AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 24, 1996.
REGISTRATION NO. 33-49550
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. 41 (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>
<TABLE>
<CAPTION>
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
<S> <C>
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
</TABLE>
(ii)
<PAGE>
SUPPLEMENT DATED JANUARY 1, 1997
TO
PROSPECTUS DATED MAY 1, 1996
WRL FREEDOM BELLWETHER\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 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 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.
** Because the U.S. Equity and International Equity Portfolios will
commence operations 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 or annuitize your Contract at the end of the applicable
time period:
You would pay the following expenses on a $1,000 investment assuming a 5%
annual return on assets:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
International Equity Sub-Account $28 $85 $146 $308
U.S. Equity Sub-Account 25 78 133 284
<PAGE>
THE FOLLOWING INFORMATION SUPPLEMENTS INFORMATION PROVIDED ON PAGES 10-11 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 13 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 16 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 BELLWETHER
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.
33-49550 (April 22, 1996).
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF
ADDITIONAL INFORMATION
<PAGE>
WRL SERIES ANNUITY ACCOUNT
WRL FREEDOM BELLWETHER
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. 33-49550 (April 22, 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) Form of Application for Flexible Payment Variable
Accumulation Deferred
Annuity Contract. 5/
(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.
C-1
<PAGE>
(b) Written Consent of Ernst & Young LLP.
(c) Written Consent of Price Waterhouse LLP.
(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. 33-49556) 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. 33-49550) 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.
Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
PRINCIPAL POSITION AND OFFICES
NAME BUSINESS ADDRESS WITH DEPOSITOR
---- ---------------- --------------
John R. Kenney (1) Chairman of the Board,
Chief Executive Officer
and President
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<PAGE>
James R. Walker 3320 Office Park Drive Director
Dayton, Ohio 45439
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
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
- -------------------------
(1) 201 Highland Avenue, Largo, Florida 33770
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%)
C-3
<PAGE>
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%)
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)
C-4
<PAGE>
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, 799 non-qualified contracts and 364 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 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.
C-5
<PAGE>
(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:
(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.
C-6
<PAGE>
(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 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.
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<PAGE>
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
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,
C-8
<PAGE>
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, 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
C-9
<PAGE>
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
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
C-10
<PAGE>
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.
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.
C-11
<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
- ------------------------
John R. Kenney Chief Executive Officer
and President
(Principal Executive
Officer)
/s/ RICHARD B. FRANZ II Senior Vice President December 20, 1996
- ------------------------
Richard B. Franz II and Treasurer
/s/ ALAN M. YAEGER Executive Vice President, December 20, 1996
- ---------------------- Actuary & Chief Financial
Alan M. Yaeger Officer
<PAGE>
/s/ ALLAN J. HAMILTON Vice President December 20, 1996
- ----------------------- and Controller
Allan J. Hamilton
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 24, 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. 33-49550
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. 33-49550) 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 to Registration Statement (Form N-4
No. 33-49550) 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
