As filed with the Securities and Exchange Commission on December 24, 1996.
Registration No. 33-49558
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. ( )
POST-EFFECTIVE AMENDMENT NO. 7 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 42 (X)
(Check appropriate box or boxes)
------------------------------
WRL SERIES ANNUITY ACCOUNT
(Exact Name of Registrant)
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
(Name of Depositor)
201 Highland Avenue
Largo, Florida 33770
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code:
(813) 585-6565
---------------------------
Thomas E. Pierpan, Esq.
Vice President and Counsel
Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, Florida 33770
(Name and Address of Agent for Service)
Copy to:
Stephen E. Roth, Esq.
Sutherland, Asbill & Brennan
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
---------------------------
It is proposed that this filing will become effective (check
appropriate space)
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on DECEMBER 31, 1996, pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485
[ ] on DATE, pursuant to paragraph (a) of Rule 485
The Registrant has chosen to register an indefinite number of securities in
accordance with Rule 24f-2. The Rule 24f-2 Notice for Registrant's most recent
fiscal year was filed on February 28, 1996.
<PAGE>
WRL SERIES ANNUITY ACCOUNT
POST-EFFECTIVE AMENDMENT NO. 7 TO
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 ON FORM N-4
Cross Reference Sheet
Showing Location in Prospectus
and Statement of Additional Information
As Required by Form N-4
FORM N-4 ITEM PROSPECTUS CAPTION
------------- ------------------
1. Cover Page......................... Cover Page
2. Definitions........................ Definitions of Special Terms
3. Synopsis or Highlights............. Summary
4. Condensed Financial
Information........................ Condensed Financial Information
5. General Description of
Registrant, Depositor,
and Portfolio Companies............ Western Reserve, the Series Account,
and the Fund; Voting Rights
6. Deductions......................... Charges and Deductions; Distribution
of the Contracts
7. General Description of
Variable Annuity Contracts......... Western Reserve, the Series Account,
and the Fund; The Contract; Statement
of Additional Information
8. Annuity Period..................... The Contract - Annuity Provisions
9. Death Benefit...................... The Contract - Accumulation
Provisions - Death Benefits during
the Accumulation Period; The
Contract - Annuity Provisions - Death
Benefits after the Maturity Date
10. Purchases and Contract Value....... The Contract - Accumulation
Provisions - Purchase Payments, Net
Purchase Payments, Accumulation Unit
Value; Distribution of the Contracts
(i)
<PAGE>
FORM N-4 ITEM PROSPECTUS CAPTION
------------- ------------------
11. Redemptions........................ The Contract - Accumulation
Provisions - Partial Withdrawals and
Surrenders; Other Matters Relating
to the Contract - Right to Examine
Contract
12. Taxes.............................. Federal Tax Matters
13. Legal Proceedings.................. Legal Proceedings
14. Table of Contents of the
Statement of Additional
Information........................ Statement of Additional Information
STATEMENT OF ADDITIONAL
FORM N-4 ITEM INFORMATION CAPTION
------------- -----------------------
15. Cover Page......................... Cover Page
16. Table of Contents.................. Table of Contents
17. General Information and
History............................ Not Applicable
18. Services........................... Custodian; Independent Accountants
19. Purchase of Securities Being
Offered............................ Addition, Deletion, and Substitution
of Investments
20. Underwriters....................... Distribution of Contracts
21. Calculation of Performance
Data............................... Calculation of Performance Related
Information
22. Annuity Payments................... Not Applicable
23. Financial Statements............... Financial Statements
(ii)
<PAGE>
SUPPLEMENT DATED JANUARY 1, 1997
TO
PROSPECTUS DATED MAY 1, 1996
WRL FREEDOM CONQUEROR /Registered Trademark/
Effective January 1, 1997, WRL Investment Management, Inc. ("WRL
Management"), a Florida corporation, will replace Western Reserve Life Assurance
Co. of Ohio ("Western Reserve") as the investment adviser for the WRL Series
Fund, Inc. (the "Fund"). WRL Management is a wholly-owned subsidiary of Western
Reserve. Throughout the Prospectus, wherever Western Reserve is referred to as
the Fund's investment adviser, Western Reserve will be replaced with WRL
Management.
Also, effective January 1, 1997, two new investment options will be made
available through this Contract. These new options are the International Equity
Portfolio and the U.S. Equity Portfolio. Details concerning these two new
Portfolios follow below. Throughout the Prospectus wherever reference is made to
FOURTEEN Sub-Accounts or Portfolios, it will now mean SIXTEEN Sub-Accounts or
Portfolios. Wherever reference is made to "twenty-one portfolios" of the Fund,
it will now mean "twenty-two portfolios" of the Fund.
THE FOLLOWING INFORMATION MODIFIES AND SUPPLEMENTS THE INFORMATION PROVIDED ON
PAGE 4 OF THE PROSPECTUS UNDER THE HEADING "SUMMARY SUMMARY OF CHARGES AND
EXPENSES";
FUND ANNUAL EXPENSES* (as a % of Fund average net assets)
U.S. INTERNATIONAL
EQUITY EQUITY
PORTFOLIO** PORTFOLIO**
----------- -----------
Management Fees 0.80% 1.00%
Other Expenses 0.25% 0.30%
(After Reimbursement)
Total Fund Annual
Expenses 1.05% 1.30%
* Effective January 1, 1997, the Fund has adopted a Plan of
Distribution pursuant to Rule 12b-1 under the 1940 Act
("Distribution Plan") and pursuant to the Plan, has entered into a
Distrbution Agreement with InterSecurities, Inc. ("ISI"), principal
underwriter for the Fund. Under the Distribution Plan, the Fund, on behalf
of the Portfolios, is authorized to pay to various service providers, as
direct payment for expenses incurred in connection with distributing a
Portfolio's shares, amounts equal to actual expenses associated with
distributing a Portfolio's shares, up to a maximum rate of 0.15% (fifteen
one-hundredths of one percent) on an annualized basis of the average daily
net assets. This fee is measured and accrued daily and paid monthly. ISI
has determined that it will not seek payment by the Fund of distribution
expenses with respect to any Portfolio during the fiscal year ending
December 31, 1997. Prior to ISI's seeking reimbursement, Policyowners will
be notified in advance.
** Because the U.S. Equity and International Equity Portfolios will commence
operations on January 2, 1997, the percentages set forth as "Other
Expenses" and "Total Fund Annual Expenses" are estimates.
THE FOLLOWING INFORMATION MODIFIES AND SUPPLEMENTS THE INFORMATION ON PAGE 5 OF
THE PROSPECTUS UNDER THE HEADING "SUMMARY - SUMMARY OF CHARGES AND EXPENSES -
EXAMPLES".
1. If you surrender your Contract at the end of the applicable time
period:
You would pay the following expenses on a $1000 investment, assuming a 5%
annual return on assets:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
International Equity Sub-Account $108 $147 $189 $314
U.S. Equity Sub-Account 106 140 176 290
2. If you annuitize or do not surrender at the end of the applicable time
period (note annuitization is not available before the fifth anniversary):
<PAGE>
You would pay the following expenses on a $1000 investment, assuming a 5%
annual return on assets:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
International Equity Sub-Account $28 $87 $149 $314
U.S. Equity Sub-Account 26 80 136 290
THE FOLLOWING INFORMATION SUPPLEMENTS INFORMATION PROVIDED ON PAGES 10-12 OF THE
PROSPECTUS UNDER THE HEADING "WESTERN RESERVE, THE SERIES ACCOUNT, AND THE FUND
- - WRL SERIES FUND, INC.":
WRL Management serves as investment adviser to each Portfolio of the Fund
and manages their assets in accordance with policies, programs and guidelines
established by the Board of Directors of the Fund.
Beginning January 1, 1997, the Fund will offer two additional portfolios
("Portfolios"). The investment objective and policies of each new Portfolio are
summarized below. There is no assurance that the Portfolios will achieve their
stated objective. More detailed information, including a description of risks,
can be found in the Prospectus for the Fund, which should be read carefully.
INTERNATIONAL EQUITY PORTFOLIO: This Portfolio seeks long-term growth of capital
by investing primarily in the common stock of foreign issuers traded on overseas
exchanges and in foreign over-the-counter markets.
U.S. EQUITY PORTFOLIO: This Portfolio seeks long-term growth of capital by
investing primarily in equity securities of U.S. companies.
Scottish Equitable Investment Management Limited ("Scottish Equitable") is a
co-sub-adviser to the International Equity Portfolio of the Fund. Scottish
Equitable, located at Edinburgh Park, Edinburgh EH12 9SE, Scotland, is a
wholly-owned subsidiary of Scottish Equitable plc. Scottish Equitable plc is
successor to Scottish Equitable Life Assurance Society, which was founded in
Edinburgh in 1831. Scottish Equitable is also an indirect wholly-owned
subsidiary of AEGON nv.
GE Investment Management Incorporated ("GE Investment") is a co-sub-adviser
of the International Equity Portfolio and is sub-adviser to the U.S. Equity
Portfolio of the Fund. GE Investment, located at 3003 Summer Street, Stamford,
Connecticut 06905, is a Delaware corporation. GE Investment is a wholly-owned
subsidiary of General Electric Company.
THE FOLLOWING INFORMATION IS ADDED TO THE END OF THE PARAGRAPH ON PAGE 14 OF THE
PROSPECTUS UNDER THE HEADING "CHARGES AND DEDUCTIONS EXPENSES OF THE FUND."
Effective January 1, 1997, the Fund has adopted a Plan of Distribution pursuant
to Rule 12b-1 under the 1940 Act ("Distribution Plan") and pursuant to the Plan,
has entered into a Distribution Agreement with InterSecurities, Inc. ("ISI"),
principal underwriter for the Fund.
Under the Distribution Plan, the Fund, on behalf of the Portfolios, is
authorized to pay to various service providers, as direct payment for expenses
incurred in connection with the distribution of a Portfolio's shares, amounts
equal to actual expenses associated with distributing a Portfolio's shares, up
to a maximum rate of 0.15% (fifteen one-hundredths of one percent) on an
annualized basis of the average daily net assets. This fee is measured and
accrued daily and paid monthly. ISI has determined that it will not seek payment
by the Fund of distribution expenses with respect to any Portfolio during the
fiscal year ending December 31, 1997. Prior to ISI's seeking reimbursement,
Policyowners will be notified in advance.
THE FOLLOWING PARAGRAPH REPLACES THE LAST PARAGRAPH ON PAGE 17 UNDER THE HEADING
"THE CONTRACT-ACCUMULATION PROVISIONS - ASSET REBALANCING PROGRAM."
Although the Asset Rebalancing Program is not available as of the date of this
Prospectus, Western Reserve anticipates its availability by February 1, 1997.
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
<PAGE>
WRL SERIES ANNUITY ACCOUNT
WRL FREEDOM CONQUEROR
PROSPECTUS DATED MAY 1, 1996
Incorporated by reference herein is the above-referenced Prospectus dated
May 1, 1996, as filed with Post-Effective Amendment No. 6 to the Registration
Statement on Form N-4 of WRL Series Annuity Account, File No. 33-49558
(April 23, 1996)
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF
ADDITIONAL INFORMATION
<PAGE>
WRL SERIES ANNUITY ACCOUNT
WRL FREEDOM CONQUEROR
STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 1996
Incorporated by reference herein is the above-referenced Statement of
Additional Information dated May 1, 1996, as filed with Post-Effective Amendment
No. 6 to the Registration Statement on Form N-4 of WRL Series Annuity Account,
File No. 33-49558 (April 23, 1996).
<PAGE>
WRL Series Annuity Account
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
The financial statements for the WRL Series Annuity Account and
for Western Reserve Life Assurance Co. of Ohio ("Western
Reserve") are included in Part B which is incorporated by
reference herein.
(b) Exhibits
(1) Copy of resolution of the Board of Directors of Western
Reserve establishing the Series Account. 1/
(2) Not Applicable.
(3) Distribution of Contracts
(a) Form of Master Service and Distribution Compliance
Agreement. 4/
(b) Form of Broker/Dealer Supervisory and Service
Agreement. 2/
(c) Form of Broker/Dealer Supervisory and Service
Agreement. 6/
(4) (a) Specimen Flexible Payment Variable Accumulation
Deferred Annuity Contract. 5/
(b) Contract Loan Endorsements. 7/
(c) (i) Other Endorsements. 7/
(ii) Form of Other Endorsements. 7/
(d) Tax Sheltered Annuity Endorsements. 8/
(e) Endorsement (Form END00117-04/95). 8/
(5) Application for Flexible Payment Variable Accumulation
Deferred Annuity Contract. 7/
(6) (a) Copy of Second Amended Articles of Incorporation of
Western Reserve. 3/
(b) Copy of Amended Code of Regulations of Western
Reserve. 4/
(7) Not Applicable.
(8) Not Applicable.
(9) Opinion and Consent of William H. Geiger, Esq. as to
Legality of Securities Being Registered. 6/
(10) (a) Written Consent of Sutherland, Asbill & Brennan,
L.L.P.
(b) Written Consent of Ernst & Young LLP.
(c) Written Consent of Price Waterhouse LLP.
C-1
<PAGE>
(11) Not Applicable.
(12) Not Applicable.
(13) Schedules for Computation of Performance Quotations. 7/
(14) Not Applicable.
(15) (a) Powers of Attorney. 8/
(b) Power of Attorney - James R. Walker. 9/
- -------------------------------------
1/ This exhibit was previously filed on Form N-4 dated October 11, 1988
(File No. 33-24856) and is incorporated herein by reference.
2/ This exhibit was previously filed on Pre-Effective Amendment No. 1 to
the Form S-6 Registration Statement dated December 19, 1989 (File
No. 33-31140) and is incorporated herein by reference.
3/ This exhibit was previously filed on Post-Effective Amendment No. 1 to
the Form N-4 Registration Statement dated May 1, 1989 (File
No. 33-24856) and is incorporated herein by reference.
4/ This exhibit was previously filed on Post-Effective Amendment No. 3 to
the Form N-4 Registration Statement dated March 1, 1991 (File
No. 33-24856) and is incorporated herein by reference.
5/ This exhibit was previously filed on the Form N-4 Registration
Statement dated July 10, 1992 (File No. 33-49556) and is incorporated
herein by reference.
6/ This exhibit was previously filed on Pre-Effective Amendment No. 1 to
the Form N-4 Registration Statement dated October 2, 1992 (File
No. 33-49556) and is incorporated herein by reference.
7/ This exhibit was previously filed on Post-Effective Amendment No. 1 to
the Form N-4 Registration Statement dated April 28, 1993 File
No. 33-49558) and is incorporated herein by reference.
8/ This exhibit was previously filed on Post-Effective Amendment No. 4 to
the Form N-4 Registration Statement Dated April 25, 1995 (File
No. 33-49558) and is incorporated herein by reference.
9/ This exhibit was previously filed on Post-Effective Amendment No. 7 to
the Form N-4 Registration Statement dated December 23, 1996 (File
No. 33-49556) and is incorporated herein by reference.
C-2
<PAGE>
<TABLE>
<CAPTION>
Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
PRINCIPAL POSITION AND OFFICES
NAME BUSINESS ADDRESS WITH DEPOSITOR
---- ---------------- --------------------
<S> <C> <C>
John R. Kenney (1) Chairman of the Board,
Chief Executive Officer and President
Patrick S. Baird 4333 Edgewood Rd. N.E. Director
Cedar Rapids, Iowa 52499
Lyman H. Treadway 30195 Chagrin Boulevard Director
Suite 210N
Cleveland, Ohio 44124
Jack E. Zimmerman 507 St. Michel Circle Director
Kettering, Ohio 45429
James R. Walker 3320 Office Park Drive Director
Dayton, Ohio 45439
Alan M. Yaeger (1) Executive Vice
President, Actuary
and Chief Financial Officer
G. John Hurley (1) Executive Vice President
William H. Geiger (1) Senior Vice President,
Secretary and General Counsel
Richard B. Franz, II (1) Senior Vice President
and Treasurer
Allan J. Hamilton (1) Vice President and
Controller
- -------------------------
<FN>
(1) 201 Highland Avenue, Largo, Florida 33770
</FN>
</TABLE>
C-3
<PAGE>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT.
VERENGING AEGON Netherlands Membership Association
AEGON n.v. Netherlands Corporation (55.19%)
AEGON Netherland n.v. Netherlands Corporation (100%)
AEGON Nevark Holding B.V. Netherlands Corporation (100%)
Groninger Financieringen B.V. Netherlands Corporation (100%)
AEGON International B.V. Netherlands Corporation (100%
Voting Trust - (Trustees - K.J. Storm, William H. Foster, H.B. Van Wijk)
AEGON U.S. Holding Corporation (DE) (100%)
Short Hills Management Company (NJ) (100%)
CORPA Reinsurance Company (NY) (100%)
AEGON Management Company (IN) (100%)
RCC North America Inc. (DE) (100%)
AEGON USA, Inc. - Holding Co. (IA) (100%
First AUSA Life Insurance Company - Insurance Holding Co. (MD) (100%)
AUSA Life Insurance Company, Inc. - Insurance (NY) (100%)
Life Investors Insurance Company of America - Insurance (IA) (100%)
International Life Investors Insurance Company - Insurance
(NY) (100%)
Bankers United Life Assurance Company Insurance (IA) (100%)
PFL Life Insurance Company - Insurance (IA) (100%)
Southwest Equity Life Insurance Company - Insurance (AZ) (100% Voting
Common)
Iowa Fidelity Life Insurance Company - Insurance (AZ) (100% Voting
Common)
Western Reserve Life Assurance Company of Ohio Insurance (OH) (100%)
WRL Series Fund, Inc. - Mutual fund (MD)
Monumental Life Insurance Company - Insurance (MD) (100%)
Monumental General Casualty Company - Insurance (MD) (100%)
United Financial Services, Inc. - General Agency (MD) (100%)
Bankers Financial Life Insurance Company - Insurance (AZ)
The Whitestone Corporation - Insurance agency (MD) (100%)
Cadet Holding Corp. - Holding company (IA) (100%)
AUSA Holding Company - Holding company (MD) (100%)
Monumental General Insurance Group, Inc. - Holding company
(MD) (100%)
Monumental General Administrators, Inc. - Provides management
services to unaffiliated third party administrator (MD) (100%)
Executive Management and Consultant Services, Inc. - Provides
actuarial consulting services (MD) (100%)
Monumental General Mass Marketing, Inc. - Marketing arm for sale
of mass marketed insurance coverages (MD) (100%)
AUSA Financial Markets, Inc. - Marketing (IA) (100%)
Universal Benefits Corporation - Third party administrator
(IA) (100%)
Investors Warranty of America, Inc. - Provider of automobile extended
maintenance contracts (IA) (100%)
Massachusetts Fidelity Trust Company - Trust company (IA) (100%)
Money Services, Inc. - Provides financial counseling for employees
and agents of affiliated companies (DE) (100%)
Zahorik Company, Inc. - Broker-dealer (CA) (100%)
C-4
<PAGE>
ZCI, Inc. (AL) (100%)
Intersecurities, Inc. - Broker-dealer (DE) (100%)
ISI Insurance Agency Inc. & its Subsidiaries - Insurance agency
(CA) (100%)
Associated Mariner Financial Group, Inc. - Holding company
management services (MI) (100%)
Mariner Financial Services, Inc. - Broker/Dealer (MI) (100%)
Mariner/ISI Planning Corporation - Financial planning
(MI) (100%)
Associated Mariner Agency, Inc. and its Subsidiaries - Insurance
agency (MI) (100%)
Mariner Mortgage Corporation - Mortgage origination (MI) (100%)
Idex Investor Services, Inc. - Shareholder services (FL) (100%)
Idex Management, Inc. - Investment advisor (DE) (50%)
Idex Fund - Mutual fund (MA)
Idex II Series Fund - Mutual fund (MA)
Idex Fund 3 - Mutual fund (MA)
Transunion Casualty Company - Insurance (IA) (100%)
AUSA Institutional Marketing Group, Inc. - Insurance agency
(MN) (100%)
Colorado Annuity Agency, Inc. - Insurance agency (MN) (100%)
Diversified Investment Advisors, Inc. - Registered investment
advisor (DE) (100%)
Diversified Investors Securities Corporation - Broker-dealer
(DE) (100%)
AEGON USA Securities, Inc. - Broker-dealer (IA) (100%)
AEGON USA Managed Portfolios, Inc. - Mutual fund (MD)
American Forum for Fiscal Fitness, Inc. - Marketing (IA) (100%)
Supplemental Insurance Division, Inc. - Insurance (TN) (100%)
Creditor Resources, Inc. - Credit insurance (MI) (100%)
CRC Creditor Resources Canadian Dealer Network Inc. -
Insurance agency (Canada)
AEGON USA Investment Management, Inc. - Investment advisor
(IA) (100%)
AEGON USA Realty Advisors, Inc. - Provides real estate administrative
and real estate investment services (IA) (100%)
Melson & Associates, Inc. - Real estate financial management
consulting (TX) (100%)
Landauer Realty Advisors, Inc. - Real estate counseling
(IA) (100%)
Landauer Associates, Inc. - Real estate counseling (DE) (100%)
AEGON USA Realty Management, Inc. - Real estate management
(IA) (100%)
Realty Information Systems, Inc. - Information systems for real
estate investment management (IA) (100%)
USP Real Estate Investment Trust - Real estate investment trust
(IA)
Cedar Income Fund Ltd. - Real estate investment trust (IA)
Forty-Six Hundred Limited Partnership - Limited partnership (IA)
JLW Financial Management Systems, Inc. - Provides management expertise
and administrative services for credit unions (IN) (60%)
Item 27. NUMBER OF CONTRACTOWNERS.
As of November 30, 1996, 10,951 non-qualified contracts and 26,002
qualified contracts were In Force.
Item 28. INDEMNIFICATION
Provisions exist under the Ohio General Corporation Law, the Second
Amended Articles of Incorporation of Western Reserve
C-5
<PAGE>
and the Amended Code of Regulations of Western Reserve whereby Western
Reserve may indemnify certain persons against certain payments incurred by
such persons. The following excerpts contain the substance of these
provisions.
OHIO GENERAL CORPORATION LAW
SECTION 1701.13 AUTHORITY OF CORPORATION.
(E)(1) A corporation may indemnify or agree to indemnify any person who
was or is a party or is threatened to be made a party, to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, other than an action by or in the right of
the corporation, by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, trustee, officer, employee, or agent of another
corporation (including a subsidiary of this corporation), domestic or foreign,
nonprofit or for profit, partnership, joint venture, trust, or other
enterprise, against expenses, including attorneys' fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit, or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendre or its equivalent, shall not, of
itself create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
(2) A corporation may indemnify or agree to indemnify any person who was
or is a party, or is threatened to be made a party to any threatened, pending,
or completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee, or agent
of another corporation, domestic or foreign, nonprofit or for profit,
partnership, joint venture, trust, or other enterprise, against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation, except that no indemnification shall
be made in respect of any of the following:
(a) Any claim, issue, or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation unless, and only to the extent that the court of
common pleas, or the court in which such action or suit was brought determines
upon application that, despite the adjudication of liability, but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court of common pleas or such
other court shall deem proper;
(b) Any action or suit in which the only liability asserted against a
director is pursuant to section 1701.95 of the Revised Code.
(3) To the extent that a director, trustee, officer, employee, or agent
has been successful on the merits or otherwise in defense of any action, suit,
or proceeding referred to in divisions (E)(1) and (2) of this section, or in
defense of any claim, issue, or matter therein, he shall be indemnified
against expenses, including attorneys' fees, actually and reasonably incurred
by him in connection therewith.
(4) Any indemnification under divisions (E)(1) and (2) of this section,
unless ordered by a court, shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the
director, trustee, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in divisions
(E)(1) and (2) of this section. Such determination shall be made as follows:
C-6
<PAGE>
(a) By a majority vote of a quorum consisting of directors of the
indemnifying corporation who were not and are not parties to or threatened
with any such action, suit, or proceeding;
(b) If the quorum described in division (E)(4)(a) of this section is
not obtainable or if a majority vote of a quorum of disinterested directors so
directs, in a written opinion by independent legal counsel other than an
attorney, or a firm having associated with it an attorney, who has been
retained by or who has performed services for the corporation, or any person
to be indemnified within the past five years;
(c) By the shareholders;
(d) By the court of common pleas or the court in which such action,
suit, or proceeding was brought.
Any determination made by the disinterested directors under division
(E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this
section shall be promptly communicated to the person who threatened or brought
the action or suit by or in the right of the corporation under division (E)(2)
of this section, and within ten days after receipt of such notification, such
person shall have the right to petition the court of common pleas or the court
in which such action or suit was brought to review the reasonableness of such
determination.
(5)(a) Unless at the time of a director's act or omission that is the
subject of an action, suit or proceeding referred to in divisions (E)(1) and
(2) of this section, the articles or the regulations of a corporation state by
specific reference to this division that the provisions of this division do
not apply to the corporation and unless the only liability asserted against a
director in an action, suit, or proceeding referred to in divisions (E)(1) and
(2) of this section is pursuant to section 1701.95 of the Revised Code,
expenses, including attorney's fees, incurred by a director in defending the
action, suit, or proceeding shall be paid by the corporation as they are
incurred, in advance of the final disposition of the action, suit, or
proceeding upon receipt of an undertaking by or on behalf of the director in
which he agrees to do both of the following:
(i) Repay such amount if it is proved by clear and convincing
evidence in a court of competent jurisdiction that his action or failure to
act involved an act or omission undertaken with deliberate intent to cause
injury to the corporation or undertaken with reckless disregard for the best
interests of the corporation;
(ii) Reasonably cooperate with the corporation concerning the
action, suit, or proceeding.
(b) Expenses, including attorneys' fees incurred by a director,
trustee, officer, employee, or agent in defending any action, suit, or
proceeding referred to in divisions (E)(1) and (2) of this section, may be paid
by the corporation as they are incurred, in advance of the final disposition of
the action, suit, or proceeding as authorized by the directors in the specific
case upon receipt of an undertaking by or on behalf of the director, trustee,
officer, employee, or agent to repay such amount, if it ultimately is determined
that he is entitled to be indemnified by the corporation.
(6) The indemnification authorized by this section shall not be exclusive
of, and shall be in addition to, any other rights granted to those seeking
indemnification under the articles or the regulations or any agreement, vote
of shareholders or disinterested directors, or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
trustee, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person.
(7) A corporation may purchase and maintain insurance or furnish similar
protection, including but not limited to trust funds, letters of credit, or
self-insurance on behalf of or for any person who is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of
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the corporation as a director, trustee, officer, employee, or agent of another
corporation, domestic or foreign, nonprofit or for profit, partnership, joint
venture, trust, or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section. Insurance may be purchased from or maintained
with a person in which the corporation has a financial interest.
(8) The authority of a corporation to indemnify persons pursuant to
divisions (E)(1) and (2) of this section does not limit the payment of
expenses as they are incurred, indemnification, insurance, or other protection
that may be provided pursuant to divisions (E)(5), (6), and (7) of this
section. Divisions (E)(1) and (2) of this section do not create any obligation
to repay or return payments made by the corporation pursuant to divisions
(E)(5), (6), or (7).
(9) As used in this division, references to "corporation" include all
constituent corporations in a consolidation or merger and the new or surviving
corporation, so that any person who is or was a director, officer, employee,
or agent of such a constituent corporation, or is or was serving at the
request of such constituent corporation as a director, trustee, officer,
employee or agent of another corporation, domestic or foreign, nonprofit or
for profit, partnership, joint venture, trust, or other enterprise, shall
stand in the same position under this section with respect to the new or
surviving corporation as he would if he had served the new or surviving
corporation in the same capacity.
SECOND AMENDED ARTICLES OF INCORPORATION OF WESTERN RESERVE
ARTICLE EIGHTH
EIGHTH: (1) The corporation may indemnify or agree to indemnify any person
who was or is a party or is threatened to be made a party, to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, other than an action by or in the right of
the corporation, by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, trustee, officer, employee, or agent of another
corporation (including a subsidiary of this corporation), domestic or foreign,
nonprofit or for profit, partnership, joint venture, trust, or other
enterprise, against expenses, including attorneys' fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit, or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendre or its equivalent, shall not, of
itself create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
(2) The corporation may indemnify or agree to indemnify any person who was
or is a party, or is threatened to be made a party to any threatened, pending,
or completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee, or agent
of another corporation (including a subsidiary of this corporation), domestic
or foreign, nonprofit or for profit, partnership, joint venture, trust, or
other enterprise against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation,
except that no indemnification shall be made in respect of any claim, issue,
or matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the corporation
unless, and only to the extent that the court of common pleas, or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability, but
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in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the court of common pleas
or such other court shall deem proper.
(3) To the extent that a director, trustee, officer, employee, or agent
has been successful on the merits or otherwise in defense of any action, suit,
or proceeding referred to in sections (1) and (2) of this article, or in
defense of any claim, issue, or matter therein, he shall be indemnified
against expenses, including attorneys' fees, actually and reasonably incurred
by him in connection therewith.
(4) Any indemnification under sections (1) and (2) of this article, unless
ordered by a court, shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
trustee, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in sections (1) and (2)
of this article. Such determination shall be made (a) by a majority vote of a
quorum consisting of directors of the indemnifying corporation who were not
and are not parties to or threatened with any such action, suit, or
proceeding, or (b) if such a quorum is not obtainable or if a majority vote of
a quorum of disinterested directors so directs, in a written opinion by
independent legal counsel other than an attorney, or a firm having associated
with it an attorney, who has been retained by or who has performed services
for the corporation, or any person to be indemnified within the past five
years, or (c) by the shareholders, or (d) by the court of common pleas or the
court in which such action, suit, or proceeding was brought. Any determination
made by the disinterested directors under section (4)(a) or by independent
legal counsel under section (4)(b) of this article shall be promptly
communicated to the person who threatened or brought the action or suit by or
in the right of the corporation under section (2) of this article, and within
ten days after receipt of such notification, such person shall have the right
to petition the court of common pleas or the court in which such action or
suit was brought to review the reasonableness of such determination.
(5) Expenses, including attorneys' fees incurred in defending any action,
suit, or proceeding referred to in sections (1) and (2) of this article, may
be paid by the corporation in advance of the final disposition of such action,
suit, or proceeding as authorized by the directors in the specific case upon
receipt of a written undertaking by or on behalf of the director, trustee,
officer, employee, or agent to repay such amount, unless it shall ultimately
be determined that he is entitled to be indemnified by the corporation as
authorized in this article. If a majority vote of a quorum of disinterested
directors so directs by resolution, said written undertaking need not be
submitted to the corporation. Such a determination that a written undertaking
need not be submitted to the corporation shall in no way affect the
entitlement of indemnification as authorized by this article.
(6) The indemnification provided by this article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under the articles or the regulations or any agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
trustee, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person.
(7) The Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee, or agent of another corporation
(including a subsidiary of this corporation), domestic or foreign, nonprofit
or for profit, partnership, joint venture, trust, or other enterprise against
any liability asserted against him and incurred by him in any such capacity or
arising out of his status as such, whether or not the corporation would have
the power to indemnify him against such liability under this section.
(8) As used in this section, references to "the corporation" include all
constituent corporations in a consolidation or merger and the new or surviving
corporation, so that any person who is or was a director, officer, employee,
or agent of such a constituent corporation, or is or was serving at the
request of such constituent corporation as a director, trustee, officer,
employee or agent of another corporation (including a subsidiary of this
corporation), domestic or foreign, nonprofit or for profit,
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<PAGE>
partnership, joint venture, trust, or other enterprise shall stand in the same
position under this article with respect to the new or surviving corporation as
he would if he had served the new or surviving corporation in the same capacity.
(9) The foregoing provisions of this article do not apply to any
proceeding against any trustee, investment manager or other fiduciary of an
employee benefit plan in such person's capacity as such, even though such
person may also be an agent of this corporation. The corporation may indemnify
such named fiduciaries of its employee benefit plans against all costs and
expenses, judgments, fines, settlements or other amounts actually and
reasonably incurred by or imposed upon said named fiduciary in connection with
or arising out of any claim, demand, action, suit or proceeding in which the
named fiduciary may be made a party by reason of being or having been a named
fiduciary, to the same extent it indemnifies an agent of the corporation. To
the extent that the corporation does not have the direct legal power to
indemnify, the corporation may contract with the named fiduciaries of its
employee benefit plans to indemnify them to the same extent as noted above.
The corporation may purchase and maintain insurance on behalf of such named
fiduciary covering any liability to the same extent that it contracts to
indemnify.
AMENDED CODE OF REGULATIONS OF WESTERN RESERVE
ARTICLE V
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Each Director, officer and member of a committee of this Corporation, and
any person who may have served at the request of this Corporation as a
Director, officer or member of a committee of any other corporation in which
this Corporation owns shares of capital stock or of which this Corporation is
a creditor (and his heirs, executors and administrators) shall be indemnified
by the Corporation against all expenses, costs, judgments, decrees, fines or
penalties as provided by, and to the extent allowed by, Article Eighth of the
Corporation's Articles of Incorporation, as amended.
RULE 484 UNDERTAKING
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of Western
Reserve pursuant to the foregoing provisions or otherwise, Western Reserve has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Western Reserve of expenses incurred
or paid by a director, officer or controlling person of Western Reserve in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Western Reserve will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 29. PRINCIPAL UNDERWRITER
(a) InterSecurities, Inc. ("ISI"), formerly known as Idex Distributors,
Inc. and before that, as Pioneer Western Distributors, Inc.,
also currently distributes securities of WRL Series Life Account
and the mutual funds managed by Idex Management, Inc., an affiliate
of ISI.
(b) Directors and Officers of ISI
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<PAGE>
PRINCIPAL POSITION AND OFFICES
NAME BUSINESS ADDRESS WITH UNDERWRITER
---- ---------------- --------------------
John R. Kenney (1) Chairman of the Board
J. Will Paull 17199 N. Laurel Park Dr. Director
Livonia, MI 48152-3908
G. John Hurley (1) Director, President and
Chief Executive Officer
Thomas R. Moriarty (1) Senior Vice President
William H. Geiger (1) Secretary and Director
Richard B. Franz, II (1) Treasurer
- --------------------------
(1) 201 Highland Avenue, Largo, Florida 33770
(c) Compensation to Principal Underwriter
Not Applicable
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books, or other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated thereunder
are maintained by the Registrant through Western Reserve, 201
Highland
Avenue, Largo, Florida 33770.
Item 31. MANAGEMENT SERVICES
Not Applicable
Item 32. UNDERTAKINGS
Western Reserve Life Assurance Co. of Ohio ("Western Reserve") hereby
represents that the fees and charges deducted under the Contracts, in
the aggregate, are reasonable in relation to the services rendered,
the expenses expected to be incurred, and the risks assumed by
Western Reserve.
Item 33. SECTION 403(B)(11) REPRESENTATION
Registrant represents that in connection with its offering of
Contracts as funding vehicles for retirement plans meeting the
requirements of Section 403(b) of the Internal Revenue Code of 1986,
Registrant is relying on the no-action letter issued by the Office of
Insurance Products and Legal Compliance, Division of Investment
Management, to the American Council of Life Insurance dated November
28, 1988 (Ref. No. IP-6-88), and that the provisions of paragraphs
(1) - (4) thereof have been complied with.
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<PAGE>
TEXAS ORP REPRESENTATION
The Registrant intends to offer Contracts to participants in the Texas
Optional Retirement Program. In connection with that offering, the
Registrant is relying on Rule 6c-7 under the Investment Company Act of
1940 and is complying with, or shall comply with, paragraphs (a) - (d)
of that Rule.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Post-Effective Amendment No. 7 to its Registration Statement to be signed
on its behalf by the undersigned, thereunder duly authorized, in the City of
Largo, State of Florida, on this 20th day of December, 1996.
WRL SERIES ANNUITY ACCOUNT
(Registrant)
By: /s/ JOHN R. KENNEY
-----------------------------------------
John R. Kenney, Chairman of the Board,
Chief Executive Officer and President of
Western Reserve Life Assurance Co. of
Ohio
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
(Depositor)
By: /s/ JOHN R. KENNEY
-----------------------------------------
John R. Kenney, Chairman of the Board,
Chief Executive Officer and President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 7 to this Registration Statement has been signed
below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ JOHN R. KENNEY Chairman of the Board, December 20, 1996
- ------------------- Chief Executive Officer and
John R. Kenney President (Principal Executive
Officer)
/s/ RICHARD B. FRANZ II Senior Vice President December 20, 1996
- ----------------------- and Treasurer
Richard B. Franz II
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ ALAN M. YAEGER Executive Vice President, December 20, 1996
- ------------------ Actuary and Chief Financial
Alan M. Yaeger Officer
/s/ ALLAN J. HAMILTON Vice President & Controller December 20, 1996
- ---------------------
Allan J. Hamilton
/s/ PATRICK S. BAIRD Director December 20, 1996
- ---------------------
Patrick S. Baird */
/s/ LYMAN H. TREADWAY Director December 20, 1996
- ---------------------
Lyman H. Treadway */
/s/ JACK E. ZIMMERMAN Director December 20, 1996
- ---------------------
Jack E. Zimmerman */
/s/ JAMES R. WALKER Director December 20, 1996
- -------------------
James R. Walker */
*/ /s/ THOMAS E. PIERPAN
- -----------------------------
Signed by Thomas E. Pierpan
As Attorney-in-fact
</TABLE>
EXHIBIT 99.1
Exhibit 10(a)
Consent of Sutherland, Asbill & Brennan, L.L.P.
<PAGE>
S.A.B. letterhead
December 23, 1996
Board of Directors
Western Reserve Life Assurance Co. of Ohio
WRL Series Annuity Account
201 Highland Avenue
Largo, Florida 33770
Re: WRL Series Annuity Account
FILE NO. 33-49558
Gentlemen:
We hereby consent to the use of our name under the caption "Legal
Matters" in the Statement of Additional Information contained in Post-Effective
Amendment No. 7 to the Registration Statement on Form N-4 (File No. 33-49558) of
the WRL Series Annuity Account filed by Western Reserve Life Assurance co. of
Ohio with the Securities and Exchange Commission. In giving this consent, we do
not admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933.
Very truly yours,
SUTHERLAND, ASBILL & BRENNAN, L.L.P.
By: /s/ STEPHEN E. ROTH
-------------------
Stephen E. Roth
EXHIBIT 99.2
Exhibit 10(b)
Consent of Ernst & Young LLP
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent
Accountants" and to the incorporation by reference therein of our report dated
February 23, 1996, with respect to the statutory-basis financial statements and
schedules of Western Reserve Life Assurance Co. of Ohio incorporated by
reference in Post-Effective Amendment No. 7 Registration Statement (Form N-4 No.
33-49558) and related Prospectus of WRL Series Annuity Account.
ERNST & YOUNG LLP
Des Moines, Iowa
December 19, 1996
EXHIBIT 99.3
Exhibit 10(c)
Consent of Price Waterhouse LLP
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by references into this Prospectus and
Statement of Additional Information constituting part of this Post-Effective
Amendment No. 7 to the registration statement on Form N-4 of the Prospectus and
Statement of Additional Information dated May 1, 1996, as filed with
Post-Effective Amendment No. 6 to the registration statement on Form N-4 of the
WRL Series Annuity Account which includes our report dated January 31, 1996,
relating to the financial statements and selected per unit data and ratios of
the sub-accounts comprising the WRL Series Annuity Account--WRL Freedom
Bellwether and WRL Freedom Conqueror Contracts, which appears in such Statement
of Additional Information. We further consent to the reference to us under the
heading "Independent Accountants" in such Statement of Additional Information.
PRICE WATERHOUSE LLP
Kansas City, Missouri
December 24, 1996
