File Nos.333-19699
811-05716
==============================================================================
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. 9 (X)
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 ( )
Amendment No. 45 (X)
(Check appropriate box or boxes.)
PREFERRED LIFE VARIABLE ACCOUNT C
---------------------------------
(Exact Name of Registrant)
PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
---------------------------------------------
(Name of Depositor)
152 West 57th Street, 18th Floor, New York, New York 10019
---------------------------------------------------- ---------
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (212) 586-7733
Name and Address of Agent for Service
-------------------------------------
Eugene Long
Preferred Life Insurance Company of New York
152 West 57th Street, 18th Floor
New York, New York 10019
Copies to:
Judith A. Hasenauer
Blazzard, Grodd & Hasenauer, P.C.
P.O. Box 5108
Westport, CT 06881
(203) 226-7866
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b) of Rule 485
_X_ on December 15, 2000 pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
___ on (date) pursuant to paragraph (a)(1) of Rule 485
If appropriate, check the following:
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Registered:
Individual Deferred Variable Annuity Contracts
CROSS REFERENCE SHEET
(Required by Rule 495)
<TABLE>
<CAPTION>
<S> <C> <C>
Item No. Location
PART A
Item 1. Cover Page. Cover Page
Item 2. Definitions. Index of Terms
Item 3. Synopsis or Highlights Summary
Item 4. Condensed Financial Information Appendix
Item 5. General Description of Registrant,
Depositor, and Portfolio Companies Preferred Life,
The Separate
Account, Investment
Options
Item 6. Deductions Expenses
Item 7. General Description of Variable
Annuity Contracts The Variable and Fixed
Annuity Contract
Item 8. Annuity Period Annuity Payments
(The Payout Phase)
Item 9. Death Benefit Death Benefit
Item 10. Purchases and Contract Value Purchase
Item 11. Redemptions. Access to Your
Money
Item 12. Taxes Taxes
Item 13. Legal Proceedings None
Item 14. Table of Contents of the Statement of
Additional Information Table of Contents of
the Statement of
Additional Information
PART B
Item 15. Cover Page Cover Page
Item 16. Table of Contents Table of Contents
Item 17. General Information and History Insurance Company
Item 18. Services Not Applicable
Item 19. Purchase of Securities Being Offered Not Applicable
Item 20. Underwriters Distributor
Item 21. Calculation of Performance Data Calculation of
Performance Data
Item 22. Annuity Payments Annuity Provisions
Item 23. Financial Statements Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
Item so numbered, in Part C to this Registration Statement.
EXPLANATORY NOTE
--------------------------------------------------------------------------------
This Registration Statement contains two prospectuses (Version A and Version B)
and two statements of additional information (Version A and Version B). The only
difference between the prospectuses is the underlying funding options. The only
difference between the statements of additional information is the performance
figures shown for the different underlying funding options. The prospectuses and
statements of additional information will be filed with the Commission pursuant
to Rule 497. The Registrant undertakes to update this Explanatory Note, as
necessary, each time a Post-Effective Amendment is filed.
--------------------------------------------------------------------------------
PART A
PART A - Version A
PART A WAS FILED IN REGISTRANT'S POST EFFECTIVE AMENDMENT NO. 8 TO FORM N-4 ON
APRIL 28, 2000 AND IS INCORPORATED HEREIN BY REFERENCE.
PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
PREFERRED LIFE VARIABLE ACCOUNT C
VALUEMARK(R) IV
FLEXIBLE PREMIUM VARIABLE ANNUITY
PROSPECTUS SUPPLEMENT DATED DECEMBER 15, 2000
The following information is added to the prospectus for the variable annuity
contracts issued by Preferred Life Insurance Company of New York.
1. The following two Variable Options which invest in Class II share Portfolios
of The Prudential Series Fund, Inc. are now available under your Contract:
<TABLE>
<CAPTION>
<S> <C>
Portfolio Investment Adviser
SP Jennison International Growth Portfolio Prudential Investments Fund Management LLC
SP Strategic Partners Focused Growth PortfolioPrudential Investments Fund Management LLC
</TABLE>
2.The following is added to the Fund Annual Expenses table:
<TABLE>
<CAPTION>
Management
and Portfolio Total Annual
Portfolio Administration Fees 12b-1 Fees Other Expenses Expenses
<S> <C> <C> <C> <C>
SP Jennison International Growth Portfolio1 .85% .25% .54% 1.64%
SP Strategic Partners Focused Growth Portfolio1 .90% .25% .26% 1.41%
<FN>
1 Because this is the first year of operation for all "SP" portfolios,
other expenses are estimated based on management's projection of
non-advisory fee expenses. Each "SP" portfolio has expense reimbursements
in effect and the charges with reimbursement are reflected in the table.
These expense reimbursements are voluntary and may be terminated at any
time. Without reimbursement, total operating expenses are estimated to be
2.24% for the SP Jennison International Growth Portfolio and 1.72% for
the SP Strategic Partners Focused Growth Portfolio.
</FN>
</TABLE>
3. The following examples are added to the prospectus for the new Variable
Options:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return on your money: (a) if you surrender your Contract at the end
of each time period; (b) if your Contract is not surrendered:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SP Jennison International Growth Portfolio (a) $93 $151 $203 $354
(b) 33 100 169 354
SP Strategic Partners Focused Growth Portfolio (a) 90 144 192 332
(b) 30 93 158 332
</TABLE>
SEE THE ATTACHED FUND PROSPECTUSES FOR ADDITIONAL INFORMATION REGARDING THE NEW
FUNDS.
<PAGE>
4. The following Accumulation Unit values for the period ended September 30,
2000 are added to the Appendix:
(NUMBER OF UNITS IN THOUSANDS)
Year or Period
Ended
Variable Options: September 30, 2000
-----------------------------------------------------------------
AIM V.I. GROWTH*
Unit value at beginning of period $11.083
Unit value at end of period $11.208
Number of units outstanding at end of period 28
ALGER AMERICAN GROWTH*
Unit value at beginning of period $10.921
Unit value at end of period $10.789
Number of units outstanding at end of period 23
ALGER AMERICAN LEVERAGED ALLCAP*
Unit value at beginning of period $12.159
Unit value at end of period $11.578
Number of units outstanding at end of period 24
FRANKLIN AGGRESSIVE GROWTH SECURITIES
Unit value at beginning of period $10.000
Unit value at end of period $11.835
Number of units outstanding at end of period 3
FRANKLIN GLOBAL COMMUNICATIONS SECURITIES
Unit value at beginning of period $38.572
Unit value at end of period $33.195
Number of units outstanding at end of period 38
FRANKLIN GLOBAL HEALTH CARE SECURITIES
Unit value at beginning of period $9.601
Unit value at end of period $16.656
Number of units outstanding at end of period 18
FRANKLIN GROWTH AND INCOME SECURITIES
Unit value at beginning of period $25.891
Unit value at end of period $28.475
Number of units outstanding at end of period 78
FRANKLIN HIGH INCOME
Unit value at beginning of period $20.695
Unit value at end of period $19.618
Number of units outstanding at end of period 60
FRANKLIN INCOME SECURITIES
Unit value at beginning of period $24.084
Unit value at end of period $27.667
Number of units outstanding at end of period 46
FRANKLIN LARGE CAP GROWTH SECURITIES
Unit value at beginning of period $20.152
Unit value at end of period $23.329
Number of units outstanding at end of period 133
FRANKLIN MONEY MARKET
Unit value at beginning of period $14.717
Unit value at end of period $15.188
Number of units outstanding at end of period 37
FRANKLIN NATURAL RESOURCES SECURITIES
Unit value at beginning of period $10.983
Unit value at end of period $13.864
Number of units outstanding at end of period 15
FRANKLIN REAL ESTATE
Unit value at beginning of period $21.176
Unit value at end of period $26.587
Number of units outstanding at end of period 4
FRANKLIN RISING DIVIDENDS SECURITIES
Unit value at beginning of period $18.712
Unit value at end of period $19.523
Number of units outstanding at end of period 86
FRANKLIN S&P 500 INDEX*
Unit value at beginning of period $10.465
Unit value at end of period $10.277
Number of units outstanding at end of period 28
FRANKLIN SMALL CAP
Unit value at beginning of period $28.247
Unit value at end of period $29.962
Number of units outstanding at end of period 54
FRANKLIN TECHNOLOGY SECURITIES
Unit value at beginning of period $10.000
Unit value at end of period $12.084
Number of units outstanding at end of period 4
FRANKLIN U.S. GOVERNMENT
Unit value at beginning of period $18.394
Unit value at end of period $19.474
Number of units outstanding at end of period 65
FRANKLIN VALUE SECURITIES
Unit value at beginning of period $7.724
Unit value at end of period $8.799
Number of units outstanding at end of period 51
FRANKLIN ZERO COUPON 2000
Unit value at beginning of period $20.819
Unit value at end of period $21.467
Number of units outstanding at end of period 12
FRANKLIN ZERO COUPON 2005
Unit value at beginning of period $22.983
Unit value at end of period $24.246
Number of units outstanding at end of period 4
FRANKLIN ZERO COUPON 2010
Unit value at beginning of period $23.929
Unit value at end of period $25.777
Number of units outstanding at end of period 7
MUTUAL DISCOVERY SECURITIES
Unit value at beginning of period $13.662
Unit value at end of period $14.666
Number of units outstanding at end of period 43
MUTUAL SHARES SECURITIES
Unit value at beginning of period $13.199
Unit value at end of period $14.070
Number of units outstanding at end of period 174
TEMPLETON ASSET STRATEGY
Unit value at beginning of period $14.347
Unit value at end of period $13.757
Number of units outstanding at end of period 4
TEMPLETON DEVELOPING MARKETS SECURITIES
Unit value at beginning of period $12.125
Unit value at end of period $9.145
Number of units outstanding at end of period 20
TEMPLETON GLOBAL INCOME SECURITIES
Unit value at beginning of period $16.472
Unit value at end of period $15.887
Number of units outstanding at end of period 8
TEMPLETON GROWTH SECURITIES
Unit value at beginning of period $19.364
Unit value at end of period $18.434
Number of units outstanding at end of period 107
TEMPLETON INTERNATIONAL SECURITIES
Unit value at beginning of period $22.858
Unit value at end of period $21.138
Number of units outstanding at end of period 28
TEMPLETON INTERNATIONAL SMALLER COMPANIES
Unit value at beginning of period $11.403
Unit value at end of period $11.389
Number of units outstanding at end of period 6
TEMPLETON PACIFIC GROWTH SECURITIES
Unit value at beginning of period $10.838
Unit value at end of period $8.561
Number of units outstanding at end of period 9
USALLIANZ VIP DIVERSIFIED ASSETS*
Unit value at beginning of period $10.168
Unit value at end of period $10.437
Number of units outstanding at end of period 2
USALLIANZ VIP FIXED INCOME*
Unit value at beginning of period $9.749
Unit value at end of period $10.325
Number of units outstanding at end of period 2
USALLIANZ VIP GROWTH
Unit value at beginning of period $10.731
Unit value at end of period $10.604
Number of units outstanding at end of period 0
Class II shares of the SP Jennison International Growth Portfolio and the SP
Strategic Partners Focused Growth Portfolio commenced operations as of the
date of this supplement, December 15, 2000, therefore no Accumulation Units
are shown for these Sub-Accounts.
5. The prospectus and statement of additional information are dated December
15, 2000.
PART A - VERSION B
PART A WAS FILED IN REGISTRANT'S POST EFFECTIVE AMENDMENT NO. 8 TO FORM N-4 ON
APRIL 28, 2000 AND IS INCORPORATED HEREIN BY REFERENCE.
PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
PREFERRED LIFE VARIABLE ACCOUNT C
USALLIANZ ADVANTAGE
FLEXIBLE PREMIUM VARIABLE ANNUITY
PROSPECTUS SUPPLEMENT DATED DECEMBER 15, 2000
The following information is added to the prospectus for the variable annuity
contracts issued by Preferred Life Insurance Company of New York.
1. The following two Variable Options which invest in Class II share Portfolios
of The Prudential Series Fund, Inc. are now available under your Contract:
<TABLE>
<CAPTION>
Portfolio Investment Adviser
<S> <C>
SP Jennison International Growth Portfolio Prudential Investments Fund Management LLC
SP Strategic Partners Focused Growth Portfolio Prudential Investments Fund Management LLC
</TABLE>
2. The following is added to the Fund Annual Expenses table:
<TABLE>
<CAPTION>
Management
and Portfolio Total Annual
Administration Fees 12b-1 Fees Other Expenses Expenses
<S> <C> <C> <C> <C>
SP Jennison International Growth Portfolio1 .85% .25% .54% 1.64%
SP Strategic Partners Focused Growth Portfolio1 .90% .25% .26% 1.41%
<FN>
1 Because this is the first year of operation for all "SP" portfolios,
other expenses are estimated based on management's projection of
non-advisory fee expenses. Each "SP" portfolio has expense reimbursements
in effect and the charges with reimbursement are reflected in the table.
These expense reimbursements are voluntary and may be terminated at any
time. Without reimbursement, total operating expenses are estimated to be
2.24% for the SP Jennison International Growth Portfolio and 1.72% for
the SP Strategic Partners Focused Growth Portfolio.
</FN>
</TABLE>
3. The following examples are added to the prospectus for the new Variable
Options:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return on your money: (a) if you surrender your Contract at the end
of each time period; (b) if your Contract is not surrendered:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SP Jennison International Growth Portfolio (a) $93 $151 $203 $354
(b) 33 100 169 354
SP Strategic Partners Focused Growth Portfolio (a) 90 144 192 332
(b) 30 93 158 332
</TABLE>
SEE THE ATTACHED FUND PROSPECTUSES FOR ADDITIONAL INFORMATION REGARDING THE NEW
FUNDS.
<PAGE>
4. The following Accumulation Unit values for the period ended September 30,
2000 are added to the Appendix:
Year or Period
Ended
Variable Options: September 30, 2000
-----------------------------------------------------------------
AIM V.I. GROWTH*
Unit value at beginning of period $11.083
Unit value at end of period $11.208
Number of units outstanding at end of period NA
ALGER AMERICAN GROWTH*
Unit value at beginning of period $10.921
Unit value at end of period $10.789
Number of units outstanding at end of period NA
ALGER AMERICAN LEVERAGED ALLCAP*
Unit value at beginning of period $12.159
Unit value at end of period $11.578
Number of units outstanding at end of period NA
USALLIANZ VIP DIVERSIFIED ASSETS*
Unit value at beginning of period $10.168
Unit value at end of period $10.437
Number of units outstanding at end of period NA
USALLIANZ VIP FIXED INCOME*
Unit value at beginning of period $9.749
Unit value at end of period $10.325
Number of units outstanding at end of period NA
USALLIANZ VIP GROWTH
Unit value at beginning of period $10.731
Unit value at end of period $10.604
Number of units outstanding at end of period NA
Preferred Life has only provided Accumulation Unit values for the above
Sub-Accounts since the remaining Sub-Accounts being offered had not yet
commenced operations with the Separate Account as of September 30, 2000.
5. The prospectus and statement of additional information are dated December 15,
2000.
PART B
PART B - VERSION A
PART B WAS FILED IN REGISTRANT'S POST EFFECTIVE AMENDMENT NO. 8 TO FORM N-4 ON
APRIL 28, 2000 AND IS INCORPORATED HEREIN BY REFERENCE.
PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
PREFERRED LIFE VARIABLE ACCOUNT C
VALUEMARK(R) IV
FLEXIBLE PREMIUM VARIABLE ANNUITY
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION
DATED DECEMBER 15, 2000
1. The tables in the SAI are replaced with the following tables which have
been revised to include performance data as of September 30, 2000.
The charts below show Accumulation Unit performance which assumes that the
Accumulation Units were invested in each of the Portfolios for the same periods.
The performance figures in Table I represent performance figures for the
Accumulation Units which reflects the deduction of the mortality and expense
risk charge, administrative charge, and the operating expenses of the
Portfolios. Table II represents performance figures for the Accumulation Units
which reflects the mortality and expense risk charge, administrative charge, the
contract maintenance charge, the operating expenses of the Portfolios and
assumes that you make a withdrawal at the end of the period (therefore the
contingent deferred sales charge is reflected). Past performance does not
guarantee future results.
<TABLE>
<CAPTION>
VALUEMARK IV
Table I: Total Return for the periods ended September 30, 2000
-------------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT
INCEPTION ONE THREE FIVE TEN SINCE
Variable Option DATE YEAR YEARS YEARS YEARS INCEPTION
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AIM V.I. Growth 11/11/99 NA NA NA NA 12.08%
Alger American Growth 11/11/99 NA NA NA NA 7.89%
Alger American Leveraged AllCap 11/11/99 NA NA NA NA 15.78%
Franklin Aggressive Growth Securities 5/1/00 NA NA NA NA 18.37%
Franklin Global Communications
Securities 1/24/89 12.65% 13.54% 13.14% 11.82% 10.81%
Franklin Global Health Care Securities 5/1/98 106.72% NA NA NA 23.48%
Franklin Growth and Income Securities 1/24/89 10.75% 6.55% 12.13% 12.04% 9.36%
Franklin High Income 1/24/89 -4.65% -2.13% 3.22% 8.05% 5.93%
Franklin Income Securities 1/24/89 12.45% 4.98% 7.90% 10.85% 9.10%
Franklin Large Cap Growth Securities 5/1/96 41.68% 20.14% NA NA 21.13%
Franklin Money Market 1/24/89 4.74% Seven Day Effective Yield
Franklin Natural Resources Securities 1/24/89 26.45% -0.73% -0.62% 2.12% 2.83%
Franklin Real Estate 1/24/89 24.08% -1.88% 9.17% 11.93% 8.72%
Franklin Rising Dividends Securities 1/27/92 2.66% -0.14% 10.67% NA 8.01%
Franklin S&P 500 Index 11/11/99 NA NA NA NA 2.77%
Franklin Small Cap 11/01/95 70.13% 22.64% NA NA 25.00%
Franklin Technology Securities 5/1/00 NA NA NA NA 20.85%
Franklin U.S. Government 3/14/89 5.25% 3.73% 4.51% 6.14% 5.94%
Franklin Value Securities 5/1/98 18.76% NA NA NA -5.15%
Franklin Zero Coupon - 2000 3/14/89 3.72% 4.05% 4.28% 7.44% 6.83%
Franklin Zero Coupon - 2005 3/14/89 3.71% 3.99% 4.69% 8.98% 7.97%
Franklin Zero Coupon - 2010 3/14/89 3.79% 3.80% 5.28% 10.02% 8.54%
Mutual Discovery Securities 11/08/96 22.47% 6.35% NA NA 10.33%
Mutual Shares Securities 11/08/96 14.97% 5.58% NA NA 9.16%
Templeton Asset Strategy 5/1/95 2.15% -2.52% 5.93% NA 6.06%
Templeton Developing Markets Securities 3/15/94 -4.69% -12.20% -1.51% NA -1.36%
Templeton Global Income Securities 1/24/89 -4.68% -2.06% 1.41% 3.42% 4.04%
Templeton Growth Securities 3/15/94 6.03% 4.23% 10.18% NA 9.79%
Templeton International Securities 1/27/92 7.14% 2.91% 9.44% NA 9.00%
Templeton International
Smaller Companies 5/01/96 5.50% -2.55% NA NA 2.99%
Templeton Pacific Growth Securities 1/27/92 -13.30% -13.44% -8.73% NA -1.77%
USAllianz VIP Diversified Assets 11/11/99 NA NA NA NA 3.86%
USAllianz VIP Fixed Income 11/11/99 NA NA NA NA 2.74%
USAllianz VIP Growth 11/9/99 NA NA NA NA 5.00%
</TABLE>
Class II shares of the SP Jennison International Growth Portfolio and the SP
Strategic Partners Focused Growth Portfolio commenced operations as of the date
of this supplement, December 15, 2000, therefore no performance is shown for
these Sub-Accounts.
<TABLE>
<CAPTION>
Table II: Total Return for the periods ended September 30, 2000
-------------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT
INCEPTION ONE THREE FIVE TEN SINCE
Variable Option DATE YEAR YEARS YEARS YEARS INCEPTION
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AIM V.I. Growth 11/11/99 NA NA NA NA 5.98%
Alger American Growth 11/11/99 NA NA NA NA 1.79%
Alger American Leveraged AllCap 11/11/99 NA NA NA NA 9.68%
Franklin Aggressive Growth Securities 5/1/00 NA NA NA NA 12.27%
Franklin Global Communications
Securities 1/24/89 6.55% 12.11% 12.65% 11.75% 10.75%
Franklin Global Health Care Securities 5/1/98 100.62% NA NA NA 21.77%
Franklin Growth and Income Securities 1/24/89 4.65% 4.93% 11.61% 11.98% 9.29%
Franklin High Income 1/24/89 -10.75% -4.04% 2.53% 7.99% 5.86%
Franklin Income Securities 1/24/89 6.35% 3.32% 7.30% 10.80% 9.03%
Franklin Large Cap Growth Securities 5/1/96 35.58% 18.85% NA NA 20.64%
Franklin Money Market 1/24/89 4.74% Seven Day Effective Yield
Franklin Natural Resources Securities 1/24/89 20.35% -2.63% -1.45% 2.02% 2.74%
Franklin Real Estate 1/24/89 17.98% -3.80% 8.60% 11.88% 8.65%
Franklin Rising Dividends Securities 1/27/92 -3.44% -1.98% 10.14% NA 7.93%
Franklin S&P 500 Index 11/11/99 NA NA NA NA -3.33%
Franklin Small Cap 11/01/95 64.03% 21.38% NA NA 24.63%
Franklin Technology Securities 5/1/00 NA NA NA NA 14.75%
Franklin U.S. Government 3/14/89 -0.85% 2.03% 3.84% 6.07% 5.86%
Franklin Value Securities 5/1/98 12.66% NA NA NA -7.61%
Franklin Zero Coupon - 2000 3/14/89 -2.38% 2.36% 3.60% 7.37% 6.76%
Franklin Zero Coupon - 2005 3/14/89 -2.39% 2.30% 4.03% 8.92% 7.90%
Franklin Zero Coupon - 2010 3/14/89 -2.31% 2.11% 4.63% 9.96% 8.47%
Mutual Discovery Securities 11/08/96 16.37% 4.71% NA NA 9.40%
Mutual Shares Securities 11/08/96 8.87% 3.92% NA NA 8.21%
Templeton Asset Strategy 5/1/95 -3.95% -4.45% 5.30 NA 5.61%
Templeton Developing Markets Securities 3/15/94 -10.79% -14.61% -2.35% NA -1.75%
Templeton Global Income Securities 1/24/89 -10.78% -3.97% 0.66% 3.34% 3.96%
Templeton Growth Securities 3/15/94 -0.07% 2.53% 9.63% NA 9.55%
Templeton International Securities 1/27/92 1.04% 1.17% 8.88% NA 8.93%
Templeton International
Smaller Companies 5/01/96 -0.60% -4.50% NA NA 2.18%
Templeton Pacific Growth Securities 1/27/92 -19.40% -15.93% -9.87% NA -1.87%
USAllianz VIP Diversified Assets 11/11/99 NA NA NA NA -2.24%
USAllianz VIP Fixed Income 11/11/99 NA NA NA NA -3.36%
USAllianz VIP Growth 11/9/99 NA NA NA NA -1.10%
</TABLE>
Class II shares of the SP Jennison International Growth Portfolio and the SP
Strategic Partners Focused Growth Portfolio commenced operations as of the date
of this supplement, December 15, 2000, therefore no performance is shown for
these Sub-Accounts.
2. The following financial statements are added to the Statement of Additional
Information:
PREFERRED LIFE VARIABLE ACCOUNT C
of
PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements
September 30, 2000 (unaudited)
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
ALGER ALGER FRANKLIN FRANKLIN GLOBAL FRANKLIN FRANKLIN
AIM AMERICAN AMERICAN AGGRESSIVE COMMUNICATIONS GLOBAL HEALTH GROWTH AND
VI GROWTH GROWTH LEVERAGEDALLCAPGROWTHSECUITIESSECURITIES CARE SECURITIES INCOME
FUND FUND FUND FUND FUND FUND FUND
-----------------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at net asset value $4,128 1,745 1,392 438 61,337 2,783 69,886
-----------------------------------------------------------------------------------------------------------------------------------
Total assets 4,128 1,745 1,392 438 61,337 2,783 69,886
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II 3 3 4 (1) 65 2 37
Accrued mortality and expense risk charges -
Valuemark IV 2 2 1 2 5 5 5
Accrued administrative charges -
Valuemark II - - - - 8 - 5
Accrued administrative charges -
Valuemark IV - - - - 1 1 1
---------------------------------------------------------------------------------------------------------------------------------
Total liabilities 5 5 5 1 79 8 48
Net assets $4,123 1,740 1,387 437 61,258 2,775 69,838
---------------------------------------------------------------------------------------------------------------------------------
Contract owners' equity:
Contracts in accumulation period -
Valuemark II 3,818 1,487 1,117 405 59,997 2,444 67,459
Contracts in accumulation period -
Valuemark IV 305 253 270 32 1,261 331 2,238
Contracts in annuity payment period (note 2) - - - - - - 141
-----------------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $4,123 1,740 1,387 437 61,258 2,775 69,838
-----------------------------------------------------------------------------------------------------------------------------------
Investment shares 125 31 28 37 3,647 162 4,210
Investments at cost $4,332 1,920 1,612 431 63,698 1,973 69,249
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
FRANKLINFRANKLIN LARGEFRANKLIN FRANKLIN FRANKLIN FRANKLIN
FRANKLIN INCOME CAP GROWTH MONEY NATURALRESOURCES REAL RISING DIVIDENDS
HIGH INCOMESECURITIESSECURITIES MARKET SECURITIES ESTATE SECURITIES
FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at net asset value $19,047 46,539 33,174 19,271 3,510 10,327 32,656
---------------------------------------------------------------------------------------------------------------------------
Total assets 19,047 46,539 33,174 19,271 3,510 10,327 32,656
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II 2 65 4 3 4 2 38
Accrued mortality and expense risk charges -
Valuemark IV 5 5 5 5 4 3 5
Accrued administrative charges -
Valuemark II - 8 - - - - 5
Accrued administrative charges -
Valuemark IV 1 1 1 1 - - 1
---------------------------------------------------------------------------------------------------------------------------
Total liabilities 8 79 10 9 8 5 49
Net assets $19,039 46,460 33,164 19,262 3,502 10,322 32,607
---------------------------------------------------------------------------------------------------------------------------
Contract owners' equity:
Contracts in accumulation period -
Valuemark II 17,867 45,109 30,068 18,694 3,302 10,199 30,940
Contracts in accumulation period -
Valuemark IV 1,172 1,256 3,096 568 200 123 1,667
Contracts in annuity payment period (note 2) - 95 - - - -
-
---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $19,039 46,460 33,164 19,262 3,502 10,322 32,607
---------------------------------------------------------------------------------------------------------------------------
Investment shares 2,024 3,183 1,425 19,271 253 615 2,784
Investments at cost $25,447 48,272 23,151 19,267 3,284 10,776 37,232
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
FRANKLIN FRANKLIN FRANKLIN FRANKLIN
S&P 500 FRANKLIN TECHNOLOGY U.S. VALUE FRANKLIN FRANKLIN
INDEX SMALL CAP SECURITIESGOVERNMENT SECURITIESZERO COUPONZERO COUPON
FUND FUND FUND FUND FUND FUND-2000 FUND - 2005
---------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at net asset value $2,379 25,072 479 43,319 836 8,558 5,351
---------------------------------------------------------------------------------------------------------------------------
Total assets 2,379 25,072 479 43,319 836 8,558 5,351
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II 2 4 (4) 3 8 3 6
Accrued mortality and expense risk charges -
Valuemark IV 1 5 5 5 - 5 2
Accrued administrative charges -
Valuemark II - - - - 1 - 1
Accrued administrative charges -
Valuemark IV - 1 1 1 - 1 -
---------------------------------------------------------------------------------------------------------------------------
Total liabilities 3 10 2 9 9 9 9
Net assets $2,376 25,062 477 43,310 827 8,549 5,342
---------------------------------------------------------------------------------------------------------------------------
Contract owners' equity:
Contracts in accumulation period -
Valuemark II 2,089 23,497 427 42,057 398 8,291 5,187
Contracts in accumulation period -
Valuemark IV 287 1,565 50 1,253 429 258 93
Contracts in annuity payment period (note 2) - - - - - - 62
---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $2,376 25,062 477 43,310 827 8,549 5,342
---------------------------------------------------------------------------------------------------------------------------
Investment shares 227 939 39 3,438 92 660 356
Investments at cost $2,366 17,453 475 45,338 716 9,374 5,535
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
MUTUAL MUTUAL TEMPLETON TEMPLETON TEMPLETON TEMPLETON
FRANKLIN DISCOVERY SHARES ASSET DEVELOPING GLOBALINCOME GROWTH
ZERO COUPONSECURITIESSECURITIES STRATEGY MARKETSSECURITIES SECURITIES SECURITIES
FUND - 2010 FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at net asset value $3,874 11,126 22,424 2,533 4,381 6,615 28,438
---------------------------------------------------------------------------------------------------------------------------
Total assets 3,874 11,126 22,424 2,533 4,381 6,615 28,438
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II 2 2 2 3 3 2 4
Accrued mortality and expense risk charges -
Valuemark IV 5 5 5 1 2 3 5
Accrued administrative charges -
Valuemark II - - - - - - 1
Accrued administrative charges -
Valuemark IV 1 1 1 - - - 1
---------------------------------------------------------------------------------------------------------------------------
Total liabilities 8 8 8 4 5 5 11
Net assets $3,866 11,118 22,416 2,529 4,376 6,610 28,427
Contract owners' equity:
Contracts in accumulation period -
Valuemark II 3,672 10,498 19,979 2,472 4,185 6,476 26,395
Contracts in accumulation period -
Valuemark IV 194 620 2,437 57 191 134 1,994
Contracts in annuity payment period (note 2) - - - - - -
38
---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $3,866 11,118 22,416 2,529 4,376 6,610 28,427
---------------------------------------------------------------------------------------------------------------------------
Investment shares 256 778 1,660 134 771 614 2,184
Investments at cost $4,076 9,376 19,871 2,713 5,565 7,777 28,739
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
TEMPLETON TEMPLETON
TEMPLETONINTERNATIONALPACIFIC USALLIANZ USALLIANZ
INTERNATIONALSMALLER GROWTH VIPDIVERSIFIEDVIP FIXED USALLIANZ TOTAL
SECURITIES COMPANIES SECURITIES ASSETS INCOME VIP GROWTH ALL
FUND FUND FUND FUND FUND FUND FUNDS
---------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at net asset value $35,226 997 4,370 137 138 154 512,640
---------------------------------------------------------------------------------------------------------------------------
Total assets 35,226 997 4,370 137 138 154 512,640
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II 3 4 8 - 1 2 289
Accrued mortality and expense risk charges -
Valuemark IV 5 - 2 - - - 110
Accrued administrative charges -
Valuemark II - - 1 - - - 30
Accrued administrative charges -
Valuemark IV 1 - - - - - 17
---------------------------------------------------------------------------------------------------------------------------
Total liabilities 9 4 11 - 1 2 446
Net assets $35,217 993 4,359 137 137 152 512,194
---------------------------------------------------------------------------------------------------------------------------
Contract owners' equity:
Contracts in accumulation period -
Valuemark II 34,643 909 4,288 114 116 145 488,744
Contracts in accumulation period -
Valuemark IV 574 84 71 23 21 7 23,114
Contracts in annuity payment period (note 2) - - - - - - 336
---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $35,217 993 4,359 137 137 152 512,194
---------------------------------------------------------------------------------------------------------------------------
Investment shares 1,907 91 538 13 14 14 52,521
Investments at cost $39,664 1,015 4,910 141 135 154 516,036
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF OPERATIONS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
FRANKLIN
ALGER ALGER AGGRESSIVE FRANKLINGLOBAL FRANKLIN FRANKLIN
AIM VI AMERICAN AMERICAN GROWTH COMMUNICATIONS GLOBAL HEALTH GROWTH AND
GROWTH GROWTH LEVERAGEDALLCAP SECURITIES SECURITIES CARE SECURITIES INCOME
FUND FUND FUND FUND FUND FUND FUND
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends reinvested in fund shares $ - - - - 1,247 1 3,013
------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges -
Valuemark II 32 11 9 1 697 16 822
Mortality and expense risk charges -
Valuemark IV 2 2 1 - 11 5 21
Administrative charges - Valuemark II 4 1 1 - 84 2 99
Administrative charges - Valuemark IV - - - - 1 1 2
------------------------------------------------------------------------------------------------------------------------------
Total expenses 38 14 11 1 793 24 944
Investment income (loss), net (38) (14) (11) (1) 454 (23) 2,069
Realized gains (losses) and unrealized
appreciation (depreciation) on investments:
Realized capital gain distributions on mutual funds - 184 124 - 15,022 - 8,848
Realized gains (losses) on sales of investments, net (37) 13 (49) - 2,236 184 (176)
------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net (37) 197 75 - 17,258 184 8,672
Net change in unrealized appreciation
(depreciation) on investments (217) (195) (225) 7 (27,911) 770 (4,646)
------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net (254) 2 (150) 7 (10,653) 954 4,026
Net increase (decrease) in net assets from
operations $(292) (12) (161) 6 (10,199) 931 6,095
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF OPERATIONS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
FRANKLIN FRANKLIN FRANKLIN
FRANKLIN FRANKLIN LARGE NATURAL FRANKLIN RISING
HIGH INCOME CAP GROWTH FRANKLIN RESOURCES REAL DIVIDENDS
INCOME SECURITIES SECURITIESMONEY MARKETSECURITIES ESTATE SECURITIES
FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
Investment income:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends reinvested in fund shares $ 103 4,760 144 863 21 680 780
---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges -
Valuemark II 207 556 275 198 29 93 322
Mortality and expense risk charges -
Valuemark IV 12 13 22 10 2 2 16
Administrative charges - Valuemark II 25 67 33 24 3 11 39
Administrative charges - Valuemark IV 1 1 2 1 - - 2
---------------------------------------------------------------------------------------------------------------------------
Total expenses 245 637 332 233 34 106 379
Investment income (loss), net (142) 4,123 (188) 630 (13) 574 401
Realized gains (losses) and unrealized
appreciation (depreciation) on investments:
Realized capital gain distributions on mutual funds - 2,276 1,595 - - 405 6,098
Realized gains (losses) on sales of investments,
net (2,690) (1,282) 1,296 - (60) (355) (1,439)
---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net (2,690) 994 2,891 - (60) 50 4,659
Net change in unrealized appreciation
(depreciation) on investments 1,696 1,376 1,817 3 790 1,601 (3,778)
---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net (994) 2,370 4,708 3 730 1,651 881
Net increase (decrease) in net assets from
operations $(1,136) 6,493 4,520 633 717 2,225 1,282
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF OPERATIONS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
FRANKLIN FRANKLIN FRANKLIN FRANKLIN FRANKLIN FRANKLIN
S&P 500 FRANKLIN TECHNOLOGY U.S. VALUE ZERO COUPONZERO COUPON
INDEX SMALL CAP SECURITIESGOVERNMENT SECURITIES 2000 2005
FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
Investment income:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends reinvested in fund shares $ 1 - - 45 3 11 6
---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges -
Valuemark II 17 225 (6) 427 10 90 111
Mortality and expense risk charges -
Valuemark IV 1 12 1 22 5 3 1
Administrative charges - Valuemark II 2 27 (1) 51 1 11 13
Administrative charges - Valuemark IV - 1 - 2 1 - -
---------------------------------------------------------------------------------------------------------------------------
Total expenses 20 265 (6) 502 17 104 125
Investment income (loss), net (19) (265) 6 (457) (14) (93) (119)
Realized gains (losses) and unrealized
appreciation (depreciation) on investments:
Realized capital gain distributions on mutual funds - 1,755 - - - 103 153
Realized gains (losses) on sales of investments, net 1 2,466 43 (1,415) 9 (351) (94)
---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net 1 4,221 43 (1,415) 9 (248) 59
Net change in unrealized appreciation
(depreciation) on investments 3 (2,691) 4 4,540 98 648 307
---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net 4 1,530 47 3,125 107 400 366
Net increase (decrease) in net assets from operations$(15) 1,265 53 2,668 93 307 247
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF OPERATIONS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
TEMPLETON
FRANKLIN MUTUAL MUTUAL TEMPLETON DEVELOPING TEMPLETON TEMPLETON
ZERO COUPONDISCOVERY SHARES ASSET MARKETSGLOBAL INCOME GROWTH
2010 SECURITIES SECURITIES STRATEGY SECURITIESSECURITIES SECURITIES
FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
Investment income:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends reinvested in fund shares $ 4 351 711 5 51 12 607
---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges -
Valuemark II 38 107 207 27 53 71 324
Mortality and expense risk charges -
Valuemark IV 2 6 22 1 1 1 20
Administrative charges - Valuemark II 5 13 25 3 6 9 39
Administrative charges - Valuemark IV - 1 2 - - - 2
---------------------------------------------------------------------------------------------------------------------------
Total expenses 45 127 256 31 60 81 385
Investment income (loss), net (41) 224 455 (26) (9) (69) 222
Realized gains (losses) and unrealized
appreciation (depreciation) on investments:
Realized capital gain distributions on mutual funds 68 - 615 - - - 3,996
Realized gains (losses) on sales of investments, net(257) 396 729 (51) (180) (380) 405
---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net (189) 396 1,344 (51) (180) (380) 4,401
Net change in unrealized appreciation
(depreciation) on investments 552 246 (373) (50) (1,463) 170 (6,350)
---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net 363 642 971 (101) (1,643) (210) (1,949)
Net increase (decrease) in net assets from
operations $ 322 866 1,426 (127) (1,652) (279) (1,727)
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF OPERATIONS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
TEMPLETON
TEMPLETONINTERNATIONALTEMPLETONUSALLIANZVIP
INTERNATIONALSMALLER PACIFICGROWTHDIVERSIFIED USALLIANZVIP USALLIANZ
TOTAL
SECURITIES COMPANIES SECURITIES ASSETS FIXEDINCOME VIP GROWTH ALL
FUND FUND FUND FUND FUND FUND FUNDS
---------------------------------------------------------------------------------------------------------------------------
Investment income:
<S> <C> <C> <C> <C> <C> <C>
Dividends reinvested in fund shares $ 26 19 7 7 5 - 13,483
---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges - Valuemark II 370 11 49 - - 1 5,400
Mortality and expense risk charges - Valuemark IV 4 (1) 1 - - - 221
Administrative charges - Valuemark II 44 1 6 - - - 648
Administrative charges - Valuemark IV - - - - - - 20
---------------------------------------------------------------------------------------------------------------------------
Total expenses 418 11 56 - - 1 6,289
Investment income (loss), net (392) 8 (49) 7 5 (1) 7,194
Realized gains (losses) and unrealized
appreciation (depreciation) on investments:
Realized capital gain distributions on mutual funds 11,167 - - - - - 52,409
Realized gains (losses) on sales of investments, net 165 - (1,123) (7) - 3 (2,000)
---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net 11,332 - (1,123) (7) - 3 50,409
Net change in unrealized appreciation
(depreciation) on investments (14,343) (13) (90) (4) 3 - (47,718)
---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net (3,011) (13) (1,213) (11) 3 3 2,691
Net increase (decrease) in net assets from
operations $ (3,403) (5) (1,262) (4) 8 2 9,885
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
FRANKLIN
AIM VI ALGER AMERICAN ALGER AMERICAN AGGRESSIVE GROWTH
GROWTH FUND GROWTH FUND LEVERAGED ALLCAP FUND SECURITIES FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ (38) 1 (14) - (11) - (1) -
Realized gains (losses) on investments, net(37) 9 197 - 75 9 - -
Net change in unrealized appreciation
(depreciation) on investments (217) 13 (195) 20 (225) 4 7 -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations (292) 23 (12) 20 (161) 13 6 -
---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark II (note 4):
Purchase payments 57 - 7 - 24 - - -
Transfers between funds 4,897 396 1,492 394 1,082 212 401 -
Surrenders and terminations (1,262) (22) (383) (22) (67) - (1) -
Rescissions (1) - - - - - - -
Other transactions (note 2) - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II 3,691 374 1,116 372 1,039 212 400 -
Contract transactions - Valuemark IV (note 4):
Purchase payments 165 - 100 - 115 - 10 -
Transfers between funds 162 4 63 87 173 - 21 -
Surrenders and terminations (4) - (6) - (4) - - -
Rescissions - - - - - - - -
Other transactions (note 2) - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 323 4 157 87 284 - 31 -
Increase (decrease) in net assets 3,722 401 1,261 479 1,162 225 437 -
Net assets at beginning of year 401 - 479 - 225 - - -
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 4,123 401 1,740 479 1,387 225 437 -
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
FRANKLIN GLOBAL COMMUNICATIONSFRANKLINGLOBALHEALTHCARE FRANKLINGROWTHANDFRANKLIN HIGH
SECURITIES FUND SECURITIES FUND INCOME FUND INCOME FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ 454 1,746 (23) (7) 2,069 2,370 (142) 7,066
Realized gains (losses) on
investments, net 17,258 11,061 184 (69) 8,672 15,651 (2,690) 16
Net change in unrealized appreciation
(depreciation) on investments (27,911) 10,895 770 6 (4,646) (17,772) 1,696 (7,480)
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations (10,199) 23,702 931 (70) 6,095 249 (1,136) (398)
Contract transactions - Valuemark II (note 4):
Purchase payments 155 218 5 8 169 579 75 129
Transfers between funds 712 (724) 1,294 376 (5,375) (752) (2,931) (2,280)
Surrenders and terminations (12,188) (22,559) (98) (158) (16,358) (29,750) (4,903) (8,653)
Rescissions (2) (8) - - (27) - - (6)
Other transactions (note 2) (21) 403 - - 51 436 23 51
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (11,344) (22,670) 1,201 226 (21,540) (29,487) (7,736)(10,759)
---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark IV (note 4):
Purchase payments 400 504 28 348 77 601 10 366
Transfers between funds 301 131 4 (212) 113 983 20 506
Surrenders and terminations (34) (64) (36) (13) (83) (88) (106) (52)
Rescissions - (3) - - - - - -
Other transactions (note 2) - - - - - 4 - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 667 568 (4) 123 107 1,500 (76) 820
Increase (decrease) in net assets (20,876) 1,600 2,128 279 (15,338) (27,738) (8,948)(10,337)
Net assets at beginning of year 82,134 80,534 647 368 85,176 112,914 27,987 38,324
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 61,258 82,134 2,775 647 69,838 85,176 19,039 27,987
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
FRANKLIN NATURAL
FRANKLIN INCOME FRANKLIN LARGE CAP FRANKLIN MONEY RESOURCES
SECURITIES FUND GROWTH SECURITIES FUND MARKET FUND SECURITIES FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ 4,123 4,822 (188) (228) 630 897 (13) 1
Realized gains (losses) on
nvestments, net 994 2,921 2,891 1,016 - - (60) (770)
Net change in unrealized appreciation
(depreciation) on investments 1,376 (9,842) 1,817 5,588 3 - 790 1,633
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations 6,493 (2,099) 4,520 6,376 633 897 717 864
Contract transactions - Valuemark II (note 4):
Purchase payments 63 307 109 360 74 393 5 12
Transfers between funds (4,014) (4,554) 3,162 11,623 1,157 4,341 215 (210)
Surrenders and terminations (11,919) (21,120) (4,234) (7,116) (7,043) (13,569) (576) (1,193)
Rescissions - - - - (1) (39) - -
Other transactions (note 2) 16 190 12 5 233 484 (2) (1)
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (15,854) (25,177) (951) 4,872 (5,580) (8,390) (358) (1,392)
Contract transactions - Valuemark IV (note 4):
Purchase payments 76 558 388 656 61 92 26 61
Transfers between funds (183) 485 1,044 338 (1,081) 1,256 5 (8)
Surrenders and terminations (118) (37) (94) (50) (8) (17) (3) (2)
Rescissions - - - (27) (15) - - -
Other transactions (note 2) - - - - 60 - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV (225) 1,006 1,338 917 (983) 1,331 28 51
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (9,586) (26,270) 4,907 12,165 (5,930) (6,162) 387 (477)
Net assets at beginning of year 56,046 82,316 28,257 16,092 25,192 31,354 3,115 3,592
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 46,460 56,046 33,164 28,257 19,262 25,192 3,502 3,115
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
FRANKLIN REAL FRANKLIN RISING FRANKLIN FRANKLIN
ESTATE FUND DIVIDENDS SECURITIES FUNDS&P 500 INDEX FUND SMALL CAP FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ 574 913 401 116 (19) - (265) (148)
Realized gains (losses) on
investments, net 50 1,434 4,659 11,890 1 - 4,221 488
Net change in unrealized appreciation
depreciation) on investments 1,601 (3,300) (3,778)(18,289) 3 10 (2,691) 10,634
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations 2,225 (953) 1,282 (6,283) (15) 10 1,265 10,974
Contract transactions - Valuemark II (note 4):
Purchase payments 39 34 114 304 27 - 169 100
Transfers between funds (258) (2,005) (3,853) (3,108) 1,791 521 3,458 962
Surrenders and terminations (1,725) (3,480) (8,157)(16,637) (203) (45) (3,502) (4,320)
Rescissions - - - - - - - -
Other transactions (note 2) (4) 2 (12) 11 (1) - (8) 10
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (1,948) (5,449) (11,908)(19,430) 1,614 476 117 (3,248)
Contract transactions - Valuemark IV (note 4):
Purchase payments 18 53 154 778 209 - 257 627
Transfers between funds (7) 24 145 419 84 - 553 (297)
Surrenders and terminations (16) - (44) (74) (2) - (66) (22)
Rescissions - - - (3) - - - -
Other transactions (note 2) - - (1) 3 - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV (5) 77 254 1,123 291 - 744 308
Increase (decrease) in net assets 272 (6,325) (10,372)(24,590) 1,890 486 2,126 8,034
Net assets at beginning of year 10,050 16,375 42,979 67,569 486 - 22,936 14,902
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $10,322 10,050 32,607 42,979 2,376 486 25,062 22,936
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999
FRANKLIN TECHNOLOGY FRANKLIN FRANKLIN VALUE FRANKLIN ZERO COUPON -
SECURITIES FUND U.S. GOVERNMENT FUND SECURITIES FUND 2000 FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ 6 - (457) 7,750 (14) (6) (93) 1,785
Realized gains (losses) on
investments, net 43 - (1,415) (66) 9 4 (248) 223
Net change in unrealized appreciation
(depreciation) on investments 4 - 4,540 (9,210) 98 8 648 (1,804)
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations 53 - 2,668 (1,526) 93 6 307 204
Contract transactions - Valuemark II (note 4):
Purchase payments - - 51 406 12 7 33 35
Transfers between funds 377 - (2,947) (1,792) 155 116 (304) (565)
Surrenders and terminations - - (8,888)(17,946) (68) (9) (2,598) (3,878)
Rescissions - - - (2) (1) - (21) -
Other transactions (note 2) - - 42 88 - - (4) 152
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II 377 - (11,742)(19,246) 98 114 (2,894) (4,256)
Contract transactions - Valuemark IV (note 4):
Purchase payments 25 - 29 498 11 72 - 34
Transfers between funds 22 - (1,110) 1,403 (19) 183 - 208
Surrenders and terminations - - (75) (97) (23) (18) (44) (2)
Rescissions - - - (21) - - - -
Other transactions (note 2) - - - 4 - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 47 - (1,156) 1,787 (31) 237 (44) 240
Increase (decrease) in net assets 477 - (10,230)(18,985) 160 357 (2,631) (3,812)
Net assets at beginning of year - - 53,540 72,525 667 310 11,180 14,992
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $477 - 43,310 53,540 827 667 8,549 11,180
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
FRANKLIN ZERO COUPON -FRANKLIN ZERO COUPON -MUTUAL DISCOVERY MUTUAL SHARES
2005 FUND 2010 FUND SECURITIES FUND SECURITIES FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ (119) 755 (41) 629 224 169 455 318
Realized gains (losses) on
investments, net 59 150 (189) 219 396 40 1,344 546
Net change in unrealized appreciation
(depreciation) on investments 307 (1,492) 552 (1,784) 246 2,050 (373) 2,130
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations 247 (587) 322 (936) 866 2,259 1,426 2,994
Contract transactions - Valuemark II (note 4):
Purchase payments 3 40 12 55 50 72 90 193
Transfers between funds 114 (466) (296) (572) 470 (869) (1,884) 424
Surrenders and terminations (1,116) (1,788) (1,122) (1,422) (1,925) (2,956) (4,391) (5,418)
Rescissions - - - - - - - (4)
Other transactions (note 2) (2) 65 24 9 2 (4) (9) (7)
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (1,001) (2,149) (1,382) (1,930) (1,403) (3,757) (6,194) (4,812)
Contract transactions - Valuemark IV (note 4):
Purchase payments - 37 6 157 62 113 11 906
Transfers between funds 3 9 (5) (40) 41 142 591 490
Surrenders and terminations (1) (5) (1) (8) (27) (10) (178) (54)
Rescissions - - - - - - - -
Other transactions (note 2) - - - 2 - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 2 41 - 111 76 245 424 1,342
Increase (decrease) in net assets (752) (2,695) (1,060) (2,755) (461) (1,253) (4,344) (476)
Net assets at beginning of year 6,094 8,789 4,926 7,681 11,579 12,832 26,760 27,236
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 5,342 6,094 3,866 4,926 11,118 11,579 22,416 26,760
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
TEMPLETON TEMPLETON DEVELOPING TEMPLETONGLOBALINCOME TEMPLETON GROWTH
ASSET STRATEGYFUND MARKETSSECURITIESFUND SECURITIES FUND SECURITIES FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ (26) 211 (9) 42 (69) 780 222 299
Realized gains (losses) on
investments, net (51) 236 (180) (656) (380) (290) 4,401 4,959
Net change in unrealized appreciation
(depreciation) on investments (50) (253) (1,463) 3,346 170 (1,395) (6,350) 1,167
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations (127) 194 (1,652) 2,732 (279) (905) (1,727) 6,425
Contract transactions - Valuemark II (note 4):
Purchase payments 7 39 35 49 15 31 128 164
Transfers between funds (231) (552) (413) 170 (424) (679) 178 33
Surrenders and terminations (471) (733) (1,320) (1,407) (1,853) (3,553) (8,402) (6,764)
Rescissions - - - - - - (16) -
Other transactions (note 2) (1) 31 (2) 1 - 18 (1) 13
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (696) (1,215) (1,700) (1,187) (2,262) (4,183) (8,113) (6,554)
Contract transactions - Valuemark IV (note 4):
Purchase payments 6 15 70 185 25 58 349 642
Transfers between funds (3) 25 29 (94) 3 15 91 805
Surrenders and terminations (2) (5) - (35) - (1) (152) (18)
Rescissions - - - - - - - (9)
Other transactions (note 2) - 4 - - - - - 2
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 1 39 99 56 28 72 288 1,422
Increase (decrease) in net assets (822) (982) (3,253) 1,601 (2,513) (5,016) (9,552) 1,293
Net assets at beginning of year 3,351 4,333 7,629 6,028 9,123 14,139 37,979 36,686
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $2,529 3,351 4,376 7,629 6,610 9,123 28,427 37,979
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
TEMPLETON INTLTEMPLETON INTERNATIONAL TEMPLETON PACIFIC USALLIANZ VIP
SECURITIES FUND SMALLER COMPANIES FUND GROWTHSECURITIESFUND DIVERSIFIED ASSETS FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ (392) 2,122 8 15 (49) (31) 7 -
Realized gains (losses) on
investments, net 11,332 4,165 - (47) (1,123) (2,409) (7) -
Net change in unrealized appreciation
(depreciation) on investments (14,343) 4,247 (13) 245 (90) 4,586 (4) -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations (3,403) 10,534 (5) 213 (1,262) 2,146 (4) -
Contract transactions - Valuemark II (note 4):
Purchase payments 108 145 6 4 9 102 1 -
Transfers between funds (12) (2,577) (92) 99 (221) 479 337 2
Surrenders and terminations (8,916) (15,456) (162) (217) (1,468) (2,143) (221) -
Rescissions (12) (2) - - - - - -
Other transactions (note 2) (7) 67 - (1) (2) 5 - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (8,839) (17,823) (248) (115) (1,682) (1,557) 117 2
---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark IV (note 4):
Purchase payments 100 136 38 132 5 8 4 -
Transfers between funds 208 10 15 (127) 16 6 20 -
Surrenders and terminations (13) (4) (9) - - - (2) -
Rescissions - (9) - - - - - -
Other transactions (note 2) - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 295 133 44 5 21 14 22 -
Increase (decrease) in net assets (11,947) (7,156) (209) 103 (2,923) 603 135 2
Net assets at beginning of year 47,164 54,320 1,202 1,099 7,282 6,679 2 -
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 35,217 47,164 993 1,202 4,359 7,282 137 2
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
USALLIANZ VIP USALLIANZ VIP TOTAL
FIXED INCOME FUND GROWTH FUND ALL FUNDS
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C>
Investment income (loss), net $ 5 - (1) - 7,194 32,387
Realized gains (losses) on investments, net - - 3 (2) 50,409 50,728
Net change in unrealized appreciation
(depreciation) on investments 3 - - - (47,718)(26,039)
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations 8 - 2 (2) 9,885 57,076
Contract transactions - Valuemark II (note 4):
Purchase payments 100 - 1 - 1,753 3,786
Transfers between funds 9 22 171 2 (1,783) (1,533)
Surrenders and terminations - (22) (30) - (115,570)(192,356)
Rescissions - - - - (81) (61)
Other transactions (note 2) - - - - 327 2,028
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II 109 - 142 2 (115,354)(188,136)
Contract transactions - Valuemark IV (note 4):
Purchase payments 2 - 3 - 2,840 7,637
Transfers between funds 20 - 5 - 1,344 6,751
Surrenders and terminations (2) - - - (1,153) (676)
Rescissions - - - - (15) (72)
Other transactions (note 2) - - - - 59 19
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 20 - 8 - 3,075 13,659
Increase (decrease) in net assets 137 - 152 - (102,394)(117,401)
Net assets at beginning of year - - - - 614,588 731,989
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $137 - 152 - 512,194 614,588
</TABLE>
See accompanying notes to financial statements.
<PAGE>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
September 30, 2000 (unaudited)
1. ORGANIZATION
Preferred Life Variable Account C (Variable Account) is a segregated investment
account of Preferred Life Insurance Company of New York (Preferred Life) and is
registered with the Securities and Exchange Commission as a unit investment
trust pursuant to the provisions of the Investment Company Act of 1940 (as
amended). The Variable Account was established by Preferred Life on February 26,
1988 and commenced operations September 6, 1991. Accordingly, it is an
accounting entity wherein all segregated account transactions are reflected.
The Variable Account's assets are the property of Preferred Life and are held
for the benefit of the owners and other persons entitled to payments under
variable annuity contracts issued through the Variable Account and underwritten
by Preferred Life. The assets of the Variable Account, equal to the reserves and
other liabilities of the Variable Account, are not chargeable with liabilities
that arise from any other business which Preferred Life may conduct.
The Variable Account's sub-accounts may invest, at net asset values, in one or
more of select portfolios of the following Investment Advisers in accordance
with the selection made by the contract owner. The investment advisers for each
portfolio are listed in the following table.
<TABLE>
<CAPTION>
Portfolio Investment Adviser
---------------------------------------------------------------------------
<S> <C>
AIM VI Growth Fund AIM Advisors, Inc.
Alger American Growth Fund Fred Alger Management, Inc.
Alger American Leveraged AllCap Fund Fred Alger Management, Inc.
Franklin Aggressive Growth Securities Fund Franklin Advisers, Inc.
Franklin Global Communications Securities Fund Franklin Advisers, Inc.
Franklin Global Health Care Securities Fund Franklin Advisers, Inc.
Franklin Growth and Income Fund Franklin Advisers, Inc.
Franklin High Income Fund Franklin Advisers, Inc.
Franklin Income Securities Fund Franklin Advisers, Inc.
Franklin Large Cap Growth Securities Fund Franklin Advisers, Inc.
Franklin Money Market Fund Franklin Advisers, Inc.
Franklin Natural Resources Securities Fund Franklin Advisers, Inc.
Franklin Real Estate Fund Franklin Advisers, Inc.
Franklin Rising Dividends Securities Fund Franklin Advisory Services, LLC
Franklin S&P 500 Index Fund Franklin Advisers, Inc.
Franklin Small Cap Fund Franklin Advisers, Inc.
Franklin Technology Securities Fund Franklin Advisers, Inc.
Franklin U.S. Government Fund Franklin Advisers, Inc.
Franklin Value Securities Fund Franklin Advisory Services, LLC
Franklin Zero Coupon - 2000 Fund Franklin Advisers, Inc.
Franklin Zero Coupon - 2005 Fund Franklin Advisers, Inc.
Franklin Zero Coupon - 2010 Fund Franklin Advisers, Inc.
Mutual Discovery Securities Fund Franklin Mutual Advisers, LLC
Mutual Shares Securities Fund Franklin Mutual Advisers, LLC
Templeton Asset Strategy Fund Templeton Global Advisors Limited
Templeton Developing Markets Securities Fund Templeton Asset Management Ltd.
Templeton Global Income Securities Fund Franklin Advisers, Inc.
Templeton Growth Securities Fund Templeton Global Advisors Limited
Templeton International Securities Fund Franklin Advisers, Inc.
Templeton International Smaller Companies Fund Templeton Investment Counsel, Inc.
Templeton Pacific Growth Securities Fund Franklin Advisers, Inc.
USAllianz VIP Diversified Assets Fund Allianz of America, Inc.
USAllianz VIP Fixed Income Fund Allianz of America, Inc.
USAllianz VIP Growth Fund Allianz of America, Inc.
</TABLE>
<PAGE>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
INVESTMENTS
Investments of the Variable Account are valued daily at market value using net
asset values provided by AIM Variable Insurance Funds, Inc., The Alger American
Fund, the Franklin Templeton Variable Insurance Products Trust, and the
USAllianz Variable Insurance Products Trust.
Realized investment gains include realized gain distributions received from the
respective portfolios and gains on the sale of portfolio shares as determined by
the average cost method. Realized gain distributions are reinvested in the
respective portfolios. Dividend distributions received from the portfolios are
reinvested in additional shares of the portfolios and are recorded as income to
the Variable Account on the ex-dividend date.
A Flexible Fixed Account investment option and a Dollar Cost Averaging Fixed
Account investment option are available to deferred annuity contract owners.
These accounts are comprised of equity and fixed income investments which are
part of the general assets of Preferred Life. The liabilities of the Fixed
Accounts are part of the general obligations of Preferred Life and are not
included in the Variable Account. The guaranteed minimum rate of return on the
Fixed Accounts is 3%.
On November 12, 1999, the AIM VI Growth Fund, Alger American Growth Fund, Alger
American Leveraged AllCap Fund, Franklin S&P 500 Index Fund, USAllianz VIP
Diversified Assets Fund, USAllianz VIP Fixed Income Fund, and USAllianz VIP
Growth Fund were added as available investment options.
The Franklin Aggressive Growth Securities Fund and Franklin Technology
Securities Fund were added as available investment options on May 1, 2000.
During the nine-month period ended September 30, 2000, several portfolios
changed their name as summarized, with the effective date of the change, in the
following table.
<TABLE>
<CAPTION>
Current Portfolio Prior Portfolio Name Effective Date
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Franklin Asset Strategy Fund Franklin Global Asset Allocation Fund May 1, 2000
Franklin Developing Markets Securities Fund Franklin Developing Markets Equity Fund May 1, 2000
Franklin Growth Securities Fund Franklin Global Growth Fund May 1, 2000
Franklin International Equity Fund Franklin International Securities Fund May 1, 2000
Franklin Pacific Growth Securities Fund Franklin Pacific Growth Fund May 1, 2000
</TABLE>
CONTRACTS IN ANNUITY PAYMENT PERIOD
Annuity reserves are computed for currently payable contracts according to the
1983 Individual Annuity Mortality Table, using an assumed investment return
(AIR) equal to the AIR of the specific contracts, either 3% or 5%. Charges to
annuity reserves for mortality and risk expense are reimbursed to Preferred Life
if the reserves required are less than originally estimated. If additional
reserves are required, Preferred Life reimburses the account.
EXPENSES
ASSET BASED EXPENSES
A mortality and expense risk charge is deducted from the Variable Account on a
daily basis. The charge is equal, on an annual basis, to 1.25% of the daily net
assets of Valuemark II and 1.34% of the daily net assets of Valuemark IV.
<PAGE>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
An administrative charge is deducted from the Variable Account on a daily basis
equal, on an annual basis, to 0.15% of the daily net assets of all products
which comprise the Variable Account.
CONTRACT BASED EXPENSES
A contract maintenance charge is paid by the contract owner annually from each
contract by liquidating contract units at the end of the contract year and at
the time of full surrender. The amount of the charge is $30 each year. Contract
maintenance charges deducted during the nine-month period ended September 30,
2000 (unaudited) and the year ended December 31, 1999 were $276,767 and
$443,591, respectively. These contract charges are reflected in the Statements
of Changes in Net Assets as other transactions.
A contingent deferred sales charge is deducted from the contract value at the
time of a surrender. This charge applies only to a surrender of purchase
payments received within five years of the date of surrender for Valuemark II
contracts and within seven years of the date of surrender for Valuemark IV
contracts. The amount of the contingent deferred sales charge is shown below.
Years Since Contingent Deferred Sales Charge
--------------------------------
Payment Valuemark II Valuemark IV
--------------------------------------------------------
0-1 5% 6%
1-2 5% 6%
2-3 4% 6%
3-4 3% 5%
4-5 1.5% 4%
5-6 0% 3%
6-7 0% 2%
Total contingent deferred sales charges paid by the contract owners during the
nine-month period ended September 30, 2000 (unaudited) and the year ended
December 31, 1999 were $495,633 and $961,794, respectively.
On Valuemark II deferred annuity contracts, a systematic withdrawal plan is
available which allows an owner to withdraw up to nine percent (9%) of purchase
payments less prior surrenders annually, paid monthly or quarterly, without
incurring a contingent deferred sales charge. The systematic withdrawal plan
available to Valuemark IV deferred annuity contract owners allows up to fifteen
percent (15%) of the contract value withdrawn annually, paid monthly or
quarterly, without incurring a contingent deferred sales charge. The exercise of
the systematic withdrawal plan in any contract year replaces the 15% penalty
free privilege for that year for all deferred annuity contracts.
Currently, twelve transfers are permitted each contract year. Thereafter, the
fee is $25 per transfer, or 2% of the amount transferred, if less. Currently,
transfers associated with the dollar cost averaging program are not counted.
Total transfer charges during the nine-month period ended September 30, 2000
(unaudited) and the year ended December 31, 1999 were $4,780 and $4,250,
respectively. Transfer charges are reflected in the Statement of Changes in Net
Assets as other transactions. Net transfers to the Fixed Accounts were $438,883
for the nine-month period ended September 30, 2000 (unaudited). Net transfers
from the Fixed Accounts were $5,218,108 for the year ended December 31, 1999.
Premium taxes or other taxes payable to a state or other governmental entity
will be charged against the contract values. Preferred Life may, at its sole
discretion, pay taxes when due and deduct that amount from the contract value at
a later date. Payment at an earlier date does not waive any right Preferred Life
may have to deduct such amounts at a later date.
A rescission is defined as a contract that is returned to the company and
canceled within the free-look period, generally within 10 days.
3. FEDERAL INCOME TAXES
Operations of the Variable Account form a part of, and are taxed with,
operations of Preferred Life, which is taxed as a life insurance company under
the Internal Revenue Code.
Preferred Life does not expect to incur any federal income taxes in the
operation of the Variable Account. If, in the future, Preferred Life determines
that the Variable Account may incur federal income taxes, it may then assess a
charge against the Variable Account for such taxes.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
4. CONTRACT TRANSACTIONS - ACCUMULATION UNIT ACTIVITY (IN THOUSANDS)
Transactions in units for each fund for the nine-month period ended September
30, 2000 (unaudited) and the year ended December 31, 1999 were as follows:
ALGER FRANKLIN FRANKLIN FRANKLIN
ALGER AMERICANAGGRESSIVE GLOBAL GLOBAL FRANKLIN FRANKLIN
AIM MERICANLEVERAGE GROWT COMMUNICATIONS HEALTH GROWTH & FRANKLIN INCOME
VIGROWTH GROWTH ALLCAP SECURITIESSECURITIESCARESECURITIES INCOME HIGHINCOME SECURITIES
FUND FUND FUND FUND FUND FUND FUND FUND FUND
-------------------------------------------------------------------------------------------------------------------------------
VALUEMARK II
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation units outstanding at
December 31, 1998 - - - - 2,843 26 4,289 1,783 3,263
Contract transactions:
Purchase payments - - - - 8 1 22 6 12
Transfers between funds 38 38 18 - (26) 37 (31) (106) (185)
Surrenders and terminations (2) (2) - - (750) (17) (1,112) (409) (850)
Rescissions - - - - - - - - -
Other transactions - - - - 13 - 16 2 8
-------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 36 36 18 - (755) 21 (1,105) (507) (1,015)
Accumulation units outstanding at
December 31, 1999 36 36 18 - 2,088 47 3,184 1,276 2,248
-------------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 5 1 2 - 4 - 7 4 2
Transfers between funds 410 136 82 34 17 107 (219) (141) (166)
Surrenders and terminations (110) (34) (6) - (318) (7) (628) (239) (472)
Rescissions - - - - - - (1) - -
Bonuses - - - - - - - - -
Other transactions - - - - (1) - 2 1 1
-------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 305 103 78 34 (298) 100 (839) (375) (635)
Accumulation units outstanding at
September 30, 2000 341 139 96 34 1,790 147 2,345 901 1,613
-------------------------------------------------------------------------------------------------------------------------------
VALUEMARK IV
Accumulation units outstanding at
December 31, 1998 - - - - 2 8 17 25 14
Contract transactions:
Purchase payments - - - - 17 38 23 17 23
Transfers between funds - 8 - - 4 (25) 37 24 20
Surrenders and terminations - - - - (2) (2) (3) (3) (1)
Rescissions - - - - - - - - -
Other transactions - - - - - - - - -
-------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions - 8 - - 19 11 57 38 42
Accumulation units outstanding at
December 31, 1999 - 8 - - 21 19 74 63 56
-------------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 14 9 10 1 10 2 3 1 3
Transfers between funds 14 7 14 2 8 - 4 1 (8)
Surrenders and terminations - (1) - - (1) (3) (3) (5) (5)
Rescissions - - - - - - - - -
Bonuses - - - - - - - - -
Other transactions - - - - - - - - -
-------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 28 15 24 3 17 (1) 4 (3) (10)
Accumulation units outstanding at
September 30, 2000 28 23 24 3 38 18 78 60 46
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
4. CONTRACT TRANSACTIONS - ACCUMULATION UNIT ACTIVITY (IN THOUSANDS) (CONTINUED)
FRANKLIN FRANKLIN
FRANKLIN LARGEFRANKLINNATURALFRANKLIN RISING FRANKLIN FRANKLIN FRANKLIN
CAP GROWTH MONEY RESOURCES REAL DIVIDENDS S&P 500 FRANKLINTECHNOLOGY U.S.
SECURITIES MARKETSECURITIES ESTATE SECURITIES INDEX SMALLCAP SECURITIESGOVERNMENT
FUND FUND FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK II
Accumulation units outstanding at
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1998 1,016 2,168 415 708 3,176 - 1,012 - 3,787
Contract transactions:
Purchase payments 22 26 1 1 15 - 6 - 22
Transfers between funds 710 299 (28) (90) (157) 51 27 - (96)
Surrenders and terminations (423) (930) (120) (153) (828) (4) (263) - (957)
Rescissions - (3) - - - - - - -
Other transactions - 33 - - 1 - 1 - 5
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 309 (575) (147) (242) (969) 47 (229) - (1,026)
---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at
December 31, 1999 1,325 1,593 268 466 2,207 47 783 - 2,761
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 5 5 - 2 6 3 5 - 3
Transfers between funds 146 95 13 (14) (207) 174 110 35 (157)
Surrenders and terminations (192) (490) (46) (73) (433) (20) (116) - (470)
Rescissions - - - - - - - - -
Bonuses - - - - - - - - -
Other transactions 1 15 - - (1) - - - 2
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions (40) (375) (33) (85) (635) 157 (1) 35 (622)
Accumulation units outstanding at
September 30, 2000 1,285 1,218 235 381 1,572 204 782 35 2,139
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK IV
Accumulation units outstanding at
December 31, 1998 17 12 7 1 17 - 9 - 28
Contract transactions:
Purchase payments 40 6 6 2 39 - 38 - 27
Transfers between funds 21 86 (1) 1 21 - (18) - 76
Surrenders and terminations (3) (1) - - (4) - (1) - (5)
Rescissions (2) - - - - - - - (1)
Other transactions - - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 56 91 5 3 56 - 19 - 97
---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at
December 31, 1999 73 103 12 4 73 - 28 - 125
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 18 4 2 1 8 20 9 2 2
Transfers between funds 46 (72) 1 - 7 8 19 2 (58)
Surrenders and terminations (4) (1) - (1) (2) - (2) - (4)
Rescissions - (1) - - - - - - -
Bonuses - - - - - - - - -
Other transactions - 4 - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 60 (66) 3 - 13 28 26 4 (60)
Accumulation units outstanding at
September 30, 2000 133 37 15 4 86 28 54 4 65
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
4. CONTRACT TRANSACTIONS - ACCUMULATION UNIT ACTIVITY (IN THOUSANDS) (CONTINUED)
FRANKLINFRANKLIN FRANKLIN TEMPLETONTEMPLETON
FRANKLIN ZERO ZERO ZERO MUTUAL MUTUAL TEMPLETONDEVELOPINGGLOBAL
VALUE COUPON COUPON COUPON DISCOVERY SHARES ASSET MARKETS INCOME
SECURITIES 2000 2005 2010 SECURITIESSECURITIESSTRATEGYSECURITIESSECURITIES
FUND FUND FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK II
Accumulation units outstanding at
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1998 19 723 349 272 1,127 2,264 318 749 787
Contract transactions:
Purchase payments 1 2 2 2 6 15 3 5 2
Transfers between funds 16 (27) (20) (22) (76) 28 (41) 9 (39)
Surrenders and terminations (1) (186) (75) (55) (247) (427) (54) (148) (209)
Rescissions - - - - - - - - -
Other transactions - 7 3 - - (1) 2 - 1
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 16 (204) (90) (75) (317) (385) (90) (134) (245)
Accumulation units outstanding at
December 31, 1999 35 519 259 197 810 1,879 228 615 542
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 1 2 - - 3 7 1 3 1
Transfers between funds 18 (14) 2 (12) 34 (143) (17) (39) (26)
Surrenders and terminations (8) (122) (50) (45) (132) (327) (33) (124) (114)
Rescissions - (1) - - - - - - -
Bonuses - - - - - - - - -
Other transactions - - - 1 - (1) - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 11 (135) (48) (56) (95) (464) (49) (160) (139)
Accumulation units outstanding at
September 30, 2000 46 384 211 141 715 1,415 179 455 403
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK IV
Accumulation units outstanding at
December 31, 1998 22 2 2 3 17 38 1 5 2
Contract transactions:
Purchase payments 10 2 2 6 10 71 1 18 3
Transfers between funds 24 10 - (2) 12 39 2 (9) 1
Surrenders and terminations (2) - - - (1) (4) - (4) -
Rescissions - - - - - - - - -
Other transactions - - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 32 12 2 4 21 106 3 5 4
Accumulation units outstanding at
December 31, 1999 54 14 4 7 38 144 4 10 6
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 2 - - - 4 1 - 7 2
Transfers between funds (2) - - - 3 42 - 3 -
Surrenders and terminations (3) (2) - - (2) (13) - - -
Rescissions - - - - - - - - -
Bonuses - - - - - - - - -
Other transactions - - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions (3) (2) - - 5 30 - 10 2
Accumulation units outstanding at
September 30, 2000 51 12 4 7 43 174 4 20 8
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
4. CONTRACT TRANSACTIONS - ACCUMULATION UNIT ACTIVITY (IN THOUSANDS) (CONTINUED)
TEMPLETON
TEMPLETON TEMPLETON INTL TEMPLETON USALLIANZ USALLIANZ
GROWTH INTL SMALLER PACIFICGROWTH VIPDIV VIPFIXED USALLIANZ TOTAL
SECURITIES SECURITIES COMPANIES SECURITIESASSETS INCOME VIPGROWTH ALL
FUND FUND FUND FUND FUND FUND FUND FUNDS
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK II
Accumulation units outstanding at
<S> <C> <C> <C> <C> <C>
December 31, 1998 2,239 2,938 114 821 - - - 37,206
Contract transactions:
Purchase payments 9 8 - 10 - - - 207
Transfers between funds - (136) 8 52 - 2 - 253
Surrenders and terminations (390) (780) (21) (225) - (2) - (9,640)
Rescissions - - - - - - - (3)
Other transactions 1 4 - 1 - - - 97
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions (380) (904) (13) (162) - - - (9,086)
Accumulation units outstanding at December 31, 1999 1,859 2,034 101 659 - - - 28,120
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 7 5 - 1 - 10 - 95
Transfers between funds 8 (1) (8) (8) 32 1 16 298
Surrenders and terminations (450) (411) (14) (154) (21) - (3) (5,662)
Rescissions (1) (1) - - - - - (4)
Bonuses - - - - - - - -
Other transactions - - - - - - - 20
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions (436) (408) (22) (161) 11 11 13 (5,253)
Accumulation units outstanding at
September 30, 2000 1,423 1,626 79 498 11 11 13 22,867
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK IV
Accumulation units outstanding at December 31, 1998 10 8 3 6 - - - 276
Contract transactions:
Purchase payments 37 7 12 1 - - - 456
Transfers between funds 46 1 (12) 1 - - - 367
Surrenders and terminations (1) - - - - - - (37)
Rescissions (1) - - - - - - (4)
Other transactions - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 81 8 - 2 - - - 782
Accumulation units outstanding at December 31, 1999 91 16 3 8 - - - 1,058
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 19 5 3 1 - - - 163
Transfers between funds 5 8 1 - 2 2 - 59
Surrenders and terminations (8) (1) (1) - - - - (62)
Rescissions - - - - - - - (1)
Bonuses - - - - - - - -
Other transactions - - - - - - - 4
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 16 12 3 1 2 2 - 163
Accumulation units outstanding at September 30, 2000 107 28 6 9 2 2 - 1,221
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES
A summary of accumulation unit values and accumulation units outstanding for
variable annuity contracts and the expense ratios, including expenses of the
underlying funds for the nine-month period ended September 30, 2000 (unaudited)
and each of the five years ended December 31, 1999.
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETS TOAVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETS TO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE (IN THOUSANDS)NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
AIM VI GROWTH FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 341 $11.217 $3,818 2.13% 28 $11.208 $305 2.22%
December 31,
19991 36 11.084 397 2.13+ - 11.083 4 2.22+
ALGER AMERICAN GROWTH FUND
September 30, 2000 139 10.798 1,487 2.19 23 10.789 253 2.28
December 31,
19991 36 10.922 391 2.19+ 8 10.921 88 2.28+
ALGER AMERICAN LEVERAGED ALLCAP FUND
September 30, 2000 96 11.587 1,117 2.33 24 11.578 270 2.42
December 31,
19991 18 12.160 225 2.33+ - - - 2.42+
FRANKLIN AGGRESSIVE GROWTH FUND
September 30, 20006 34 11.840 405 2.12+ 3 11.835 32 2.21+
FRANKLIN GLOBAL COMMUNICATIONS SECURITIES FUND
September 30, 2000 1,790 33.514 59,997 1.91 38 33.195 1,261 2.00
December 31,
1999 2,088 38.917 81,263 1.91 21 38.572 792 2.00
1998 2,843 28.308 80,480 1.90 2 28.082 54 1.99
1997 3,699 25.818 95,497 1.90 - - - -
1996 4,998 20.654 103,225 1.90 - - - -
1995 5,916 19.555 115,743 1.90 - - - -
FRANKLIN GLOBAL HEALTH CARE SECURITIES FUND
September 30, 2000 147 16.692 2,444 2.22 18 16.656 331 2.31
December 31,
1999 47 9.615 450 2.22 19 9.601 197 2.31
19983 26 10.610 275 2.24+ 8 10.604 93 2.33+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
FRANKLIN GROWTH AND INCOME FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 2,345 $28.776 $67,459 1.89% 78 $28.475 $2,238 1.98%
December 31,
1999 3,184 26.147 83,242 1.89 74 25.891 1,929 1.98
1998 4,289 26.226 112,466 1.89 17 25.993 448 1.98
1997 4,952 24.551 121,570 1.89 - - - -
1996 5,070 19.490 98,821 1.90 - - - -
1995 4,347 17.310 75,240 1.92 - - - -
FRANKLIN HIGH INCOME FUND
September 30, 2000 901 19.826 17,867 1.94 60 19.618 1,172 2.03
December 31,
1999 1,276 20.900 26,674 1.94 63 20.695 1,313 2.03
1998 1,783 21.208 37,806 1.93 25 21.020 518 2.02
1997 2,110 21.312 44,963 1.93 - - - -
1996 2,164 19.375 41,921 1.94 - - - -
1995 2,076 17.252 35,808 1.96 - - - -
FRANKLIN INCOME SECURITIES FUND
September 30, 2000 1,613 27.959 45,109 1.90 46 27.667 1,256 1.99
December 31,
1999 2,248 24.323 54,683 1.90 56 24.084 1,318 1.99
1998 3,263 25.122 81,970 1.89 14 24.898 346 1.98
1997 3,991 25.065 100,025 1.90 - - - -
1996 4,519 21.708 98,109 1.90 - - - -
1995 4,567 19.785 90,364 1.91 - - - -
FRANKLIN LARGE CAP GROWTH SECURITIES FUND
September 30, 2000 1,285 23.422 30,068 2.17 133 23.329 3,096 2.26
December 31,
1999 1,325 20.218 26,784 2.17 73 20.152 1,473 2.26
1998 1,016 15.574 15,825 2.17 17 15.537 267 2.26
1997 622 13.130 8,167 2.17 - - - -
19962 225 11.254 2,529 2.17+ - - - -
FRANKLIN MONEY MARKET FUND
September 30, 2000 1,218 15.346 18,694 1.93 37 15.188 568 2.02
December 31,
1999 1,593 14.860 23,673 1.93 103 14.717 1,519 2.02
1998 2,168 14.386 31,188 1.85 12 14.260 166 1.94
1997 2,155 13.865 29,881 1.85 - - - -
1996 2,433 13.359 32,508 1.83 - - - -
1995 2,218 12.883 28,571 1.80 - - - -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
FRANKLIN NATURAL RESOURCES SECURITIES FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 235 $14.010 $3,302 2.06% 15 $13.864 $200 2.15%
December 31,
1999 268 11.092 2,983 2.06 12 10.983 132 2.15
1998 415 8.505 3,536 2.04 7 8.430 56 2.13
1997 458 11.559 5,299 2.09 - - - -
1996 566 14.467 8,189 2.05 - - - -
1995 516 14.109 7,278 2.06 - - - -
FRANKLIN REAL ESTATE FUND
September 30, 2000 381 26.868 10,199 1.98 4 26.587 123 2.07
December 31,
1999 466 21.386 9,946 1.98 4 21.176 104 2.07
1998 708 23.107 16,340 1.94 1 22.901 35 2.03
1997 942 28.169 26,532 1.94 - - - -
1996 859 23.668 20,335 1.97 - - - -
1995 794 18.073 14,344 1.99 - - - -
FRANKLIN RISING DIVIDENDS SECURITIES FUND
September 30, 2000 1,572 19.675 30,940 2.15 86 19.523 1,667 2.24
December 31,
1999 2,207 18.846 41,590 2.15 73 18.712 1,353 2.24
1998 3,176 21.165 67,223 2.12 17 21.034 346 2.21
1997 3,489 20.074 70,041 2.14 - - - -
1996 3,394 15.303 51,934 2.16 - - - -
1995 3,182 12.498 39,770 2.18 - - - -
FRANKLIN S&P 500 INDEX FUND
September 30, 2000 204 10.285 2,089 1.95 28 10.277 287 2.04
December 31,
19991 47 10.467 486 1.95+ - - - 2.04+
FRANKLIN SMALL CAP FUND
September 30, 2000 782 30.095 23,497 2.17 54 29.962 1,565 2.26
December 31,
1999 783 28.353 22,163 2.17 28 28.247 773 2.26
1998 1,012 14.600 14,771 2.17 9 14.558 131 2.26
1997 938 14.952 14,022 2.17 - - - -
19962 416 12.913 5,369 2.17+ - - - -
FRANKLIN TECHNOLOGY SECURITIES FUND
September 30, 2000 35 12.088 427 2.33+ 4 12.084 50 2.42+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATION NET ASSETS TO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE (IN THOUSANDS) NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
FRANKLIN U.S. GOVERNMENT FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 2,139 $19.678 $42,057 1.91% $65 $19.474 $1,253 2.00%
December 31,
1999 2,761 18.574 51,251 1.91 125 18.394 2,289 2.00
1998 3,787 19.014 71,990 1.90 28 18.847 535 1.99
1997 4,844 17.947 86,937 1.90 - - - -
1996 6,017 16.650 100,185 1.91 - - - -
1995 5,089 16.298 82,935 1.92 - - - -
FRANKLIN VALUE SECURITIES FUND
September 30, 2000 46 8.819 398 2.21% 51 8.799 429 2.30
December 31,
1999 35 7.736 261 2.21 54 7.724 406 2.30
19983 19 7.717 143 2.52+ 22 7.713 167 2.61+
FRANKLIN ZERO COUPON FUND - 2000
September 30, 2000 384 21.694 8,291 2.05 12 21.469 258 2.14
December 31,
1999 519 21.023 10,887 2.05 14 20.819 293 2.14
1998 723 20.684 14,941 1.80 2 20.502 51 1.89
1997 1,087 19.512 21,204 1.80 - - - -
1996 1,358 18.475 25,085 1.80 - - - -
1995 1,416 18.294 25,910 1.80 - - - -
FRANKLIN ZERO COUPON FUND - 2005
September 30, 2000 211 24.497 5,187 2.05 4 24.246 93 2.14
December 31,
1999 259 23.205 6,008 2.05 4 22.983 86 2.14
1998 349 25.003 8,739 1.80 2 24.786 50 1.89
1997 345 22.532 7,772 1.80 - - - -
1996 428 20.517 8,777 1.80 - - - -
1995 456 20.914 9,531 1.80 - - - -
FRANKLIN ZERO COUPON FUND - 2010
September 30, 2000 141 26.048 3,672 2.05 7 25.777 194 2.14
December 31,
1999 197 24.164 4,745 2.05 7 23.929 181 2.14
1998 272 27.920 7,588 1.80 3 27.674 93 1.89
1997 292 24.740 7,220 1.80 - - - -
1996 348 21.522 7,492 1.80 - - - -
1995 371 22.431 8,329 1.80 - - - -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
MUTUAL DISCOVERY SECURITIES FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 715 $14.717 $10,498 2.41% 43 $14.666 $620 2.50%
December 31,
1999 810 13.701 11,073 2.41 38 13.662 506 2.50
1998 1,127 11.226 12,646 2.40 17 11.205 186 2.49
1997 924 11.983 11,070 2.46 - - - -
19964 27 10.180 278 2.77+ - - - -
MUTUAL SHARES SECURITIES FUND
September 30, 2000 1,415 14.120 19,979 2.19 174 14.070 2,437 2.28
December 31,
1999 1,879 13.237 24,866 2.19 144 13.199 1,894 2.28
1998 2,264 11.837 26,789 2.17 38 11.814 447 2.26
1997 1,823 11.993 21,858 2.20 - - - -
19964 43 10.330 442 2.40+ - - - -
TEMPLETON ASSET STRATEGY FUND
September 30, 2000 179 13.825 2,472 2.22 4 13.757 57 2.31
December 31,
1999 228 14.408 3,294 2.22 4 14.347 57 2.31
1998 318 13.589 4,317 2.24 1 13.543 16 2.33
1997 424 13.786 5,850 2.34 - - - -
1996 300 12.514 3,759 2.26 - - - -
19955 36 10.591 379 2.30+ - - - -
TEMPLETON DEVELOPING MARKETS SECURITIES FUND
September 30, 2000 455 9.199 4,185 2.79 20 9.145 191 2.88
December 31,
1999 615 12.188 7,494 2.79 10 12.125 135 2.88
1998 749 7.993 5,983 2.81 5 7.958 45 2.90
1997 1,160 10.340 11,992 2.82 - - - -
1996 1,042 11.487 11,970 2.89 - - - -
1995 757 9.582 7,254 2.81 - - - -
TEMPLETON GLOBAL INCOME SECURITIES FUND
September 30, 2000 403 16.055 6,476 2.05 8 15.887 134 2.14
December 31,
1999 542 16.635 9,013 2.05 6 16.472 110 2.14
1998 787 17.905 14,094 2.03 2 17.746 45 2.12
1997 1,072 16.957 18,177 2.02 - - - -
1996 1,354 16.781 22,719 2.01 - - - -
1995 1,472 15.522 22,851 2.04 - - - -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
TEMPLETON GROWTH SECURITIES FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 1,423 $18.543 $26,395 2.28% 107 $18.434 $1,994 2.37%
December 31,
1999 1,859 19.466 36,188 2.28 91 19.364 1,791 2.37
1998 2,239 16.309 36,512 2.28 10 16.238 174 2.37
1997 2,594 15.176 39,364 2.28 - - - -
1996 2,146 13.560 29,103 2.33 - - - -
1995 1,416 11.339 16,061 2.37 - - - -
TEMPLETON INTERNATIONAL SECURITIES FUND
September 30, 2000 1,626 21.303 34,643 2.30 28 21.138 574 2.39
December 31,
1999 2,034 23.022 46,821 2.30 16 22.858 343 2.39
1998 2,938 18.437 54,177 2.28 8 18.322 143 2.37
1997 4,063 17.711 71,965 2.29 - - - -
1996 4,375 16.081 70,362 2.29 - - - -
1995 4,073 13.263 54,018 2.32 - - - -
TEMPLETON INTERNATIONAL SMALLER COMPANIES FUND
September 30, 2000 79 11.434 909 2.51 6 11.389 84 2.60
December 31,
1999 101 11.441 1,155 2.51 3 11.403 47 2.60
1998 114 9.364 1,065 2.50 3 9.342 34 2.59
1997 173 10.825 1,875 2.46 - - - -
19962 65 11.145 722 2.18+ - - - -
TEMPLETON PACIFIC GROWTH SECURITIES FUND
September 30, 2000 498 8.628 4,288 2.48 9 8.561 71 2.57
December 31,
1999 659 10.915 7,191 2.48 8 10.838 82 2.57
1998 821 8.078 6,633 2.50 6 8.028 46 2.59
1997 1,251 9.431 11,793 2.43 - - - -
1996 1,751 14.932 26,148 2.39 - - - -
1995 1,812 13.630 24,693 2.41 - - - -
USALLIANZ VIP DIVERSIFIED ASSETS FUND
September 30, 2000 11 10.446 114 2.4 2 10.437 23 2.49
December 31,
19991 - 10.170 2 2.40+ - - - 2.49+
USALLIANZ VIP FIXED INCOME FUND
September 30, 2000 11 10.334 116 2.15 2 10.325 21 2.24
December 31,
19991 - - - 2.15+ - - - 2.24+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT A
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (CONTINUED)
December 31, 1998
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETS TO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE(IN THOUSANDS) NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
USALLIANZ VIP GROWTH FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 13 $10.612 $145 2.30% - $10.604 $7 2.39%
December 31,
19991 - - - 2.30+ - - - 2.39+
<FN>
* For the year ended December 31, including the effect of the expenses of the underlying funds.
+ Annualized.
1 Period from November 12, 1999 (fund commencement) to December 31, 1999.
2 Period from June 10, 1996 (fund commencement) to December 31, 1996.
3 Period from August 17, 1998 (fund commencement) to December 31, 1998.
4 Period from December 2, 1996 (fund commencement) to December 31, 1996.
5 Period from August 4, 1995 (fund commencement) to December 31, 1995.
6 Period from May 1, 2000 (fund commencement) to September 30, 2000.
</FN>
</TABLE>
PART B - VERSION B
PART B WAS FILED IN REGISTRANT'S POST EFFECTIVE AMENDMENT NO. 8 TO FORM N-4 ON
APRIL 28, 2000 AND IS INCORPORATED HEREIN BY REFERENCE.
PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
PREFERRED LIFE VARIABLE ACCOUNT C
USALLIANZ ADVANTAGE
FLEXIBLE PREMIUM VARIABLE ANNUITY
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION
DATED DECEMBER 15, 2000
1. The tables in the SAI are replaced with the following tables which have
been revised to include performance data as of September 30, 2000.
The charts below show Accumulation Unit performance which assumes that the
Accumulation Units were invested in each of the Portfolios for the same periods.
The performance figures in Table I represent performance figures for the
Accumulation Units which reflect the deduction of the mortality and expense risk
charge, administrative charge, and the operating expenses of the Portfolios.
Table II represents performance figures for the Accumulation Units which reflect
the mortality and expense risk charge, administrative charge, the contract
maintenance charge, the operating expenses of the Portfolios and assumes that
you make a withdrawal at the end of the period (therefore the contingent
deferred sales charge is reflected). Past performance does not guarantee future
results.
<TABLE>
<CAPTION>
USALLIANZ ADVANTAGE
Table I: Total Return for the periods ended September 30, 2000
HYPOTHETICAL
--------------------------------------------------------------------------------------------------------------------
Portfolio
Inception One Three Five Ten Since
Variable Option Date Year Years Years Years Inception
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AIM V.I. Capital Appreciation 5/5/93 53.24% 20.21% 18.80% NA 20.36%
AIM V.I. Growth 5/5/93 23.57% 20.57% 20.62% NA 19.06%
AIM V.I. International Equity 5/5/93 16.03% 9.62% 12.83% NA 12.26%
AIM V.I. Value 5/5/93 8.53% 14.91% 16.00% NA 17.74%
Alger American Growth 1/9/89 19.84% 22.36% 20.14% 22.12% 19.77%
Alger American Leveraged AllCap 1/25/95 33.08% 34.75% 20.14% NA 36.40%
Alger American MidCap Growth 5/3/93 50.60% 22.93% 18.87% NA 23.48%
Alger American Small Capitalization 9/21/88 17.32% 10.58% 8.41% 16.37% 16.83%
Davis VA Financial 7/1/99 28.91% NA NA NA 11.37%
Davis VA Real Estate 7/1/99 15.96% NA NA NA 2.89%
Davis VA Value 7/1/99 19.33% NA NA NA 7.05%
Franklin Aggressive Growth Securities* 5/1/00 NA NA NA NA 18.37
Franklin Global Communications Securities 1/24/89 12.65% 13.54% 13.14% 11.82% 10.81%
Franklin Global Health Care Securities 5/1/98 106.72% NA NA NA 23.48%
Franklin Growth and Income Securities 1/24/89 10.75% 6.55% 12.13% 12.04% 9.36%
Franklin High Income 1/24/89 -4.65% -2.13% 3.22% 8.05% 5.93%
Franklin Income Securities 1/24/89 12.45% 4.98% 7.90% 10.85% 9.10%
Franklin Large Cap Growth Securities 5/1/96 41.68% 20.14% NA NA 21.13%
Franklin Natural Resources Securities 1/24/89 26.45% -0.73% -0.62% 2.12% 2.83%
Franklin Rising Dividends Securities 1/27/92 2.66% -0.14% 10.67% NA 8.01%
Franklin S&P500 Index* 11/11/99 NA NA NA NA 3.13%
Franklin Small Cap 11/01/95 70.13% 22.64% NA NA 25.00%
Franklin Technology Securities* 5/1/00 NA NA NA NA 20.85%
Franklin U.S. Government 3/14/89 5.25% 3.73% 4.51% 6.14% 5.94%
Franklin Value Securities 5/1/98 18.76% NA NA NA -5.15%
J.P. Morgan International Opportunities 1/3/95 3.25% 4.43% 8.16% NA 8.23%
J.P. Morgan U.S. Disciplined Equity 1/3/95 3.06% 9.08% 15.45% NA 18.05%
Mutual Discovery Securities 11/08/96 22.47% 6.35% NA NA 10.33%
Mutual Shares Securities 11/08/96 14.97% 5.58% NA NA 9.16%
Oppenheimer Global Securities/VA 11/12/90 46.91% 22.50% 20.47% NA 14.69%
Oppenheimer High Income/VA 4/30/86 0.73% 0.74% 5.70% 10.55% 9.42%
Oppenheimer Main Street Growth & Income/VA 7/5/95 11.44% 8.20% 19.39% NA 20.19%
PIMCO VIT High Yield Bond 4/30/98 -3.69% NA NA NA -1.18%
PIMCO VIT Stocks PLUS Growth & Income 12/31/97 9.26% NA NA NA 14.65%
PIMCO VIT Total Return Bond 12/31/97 1.20% NA NA NA 2.21%
Seligman Global Technology 5/01/96 47.79% 36.09% NA NA 31.42%
Seligman Small-Cap Value 5/01/98 12.62% NA NA NA 6.50%
Templeton Developing Markets Securities 3/15/94 -4.69% -12.20% -1.51% NA -1.36%
Templeton Growth Securities 3/15/94 6.03% 4.23% 10.18% NA 9.79%
Templeton International Securities 1/27/92 7.14% 2.91% 9.44% NA 9.00%
Templeton International Smaller Companies 5/01/96 5.50% -2.55% NA NA 2.99%
USAllianz VIP Diversified Assets* 11/12/99 NA NA NA NA 4.10%
USAllianz VIP Fixed Income* 11/12/99 NA NA NA NA 2.94%
USAllianz VIP Global Opportunities* 2/1/00 NA NA NA NA -8.65%
USAllianz VIP Growth* 11/9/99 NA NA NA NA 6.05%
USAllianz VIP Money Market * 2/1/00 NA NA NA NA 2.64%
Van Kampen LIT Enterprise 4/7/86 14.02% 10.64% 17.61% 16.28% 11.07%
Van Kampen LIT Growth & Income 12/23/96 17.48% 11.51% NA NA 15.31%
<FN>
*For funds which have existed less than one year, non-standard cumulative total
returns since inception are shown.
</FN>
</TABLE>
Class II shares of the SP Jennison International Growth Portfolio and the SP
Strategic Partners Focused Growth Portfolio commenced operations as of the date
of this supplement, December 15, 2000, therefore no performance is shown for
these Sub-Accounts.
<TABLE>
<CAPTION>
USALLIANZ ADVANTAGE HYPOTHETICAL
Table II: Total Return for the periods ended September 30, 2000: With Contingent Deferred Sales Charge and Other
Charges
--------------------------------------------------------------------------------------------------------------------
Portfolio
Inception One Three Five Ten Since
Variable Option Date Year Years Years Years Inception
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AIM V.I. Capital Appreciation 5/5/93 48.04% 18.91% 18.37% NA 20.22%
AIM V.I. Growth 5/5/93 18.37% 19.29% 20.22% NA 18.92%
AIM V.I. International Equity 5/5/93 10.83% 8.09% 12.32% NA 12.09%
AIM V.I. Value 5/5/93 3.33% 13.52% 15.55% NA 17.60%
Alger American Growth 1/9/89 14.64% 21.13% 19.73% 22.07% 19.72%
Alger American Leveraged AllCap 1/25/95 27.88% 33.73% 19.73% NA 36.22%
Alger American MidCap Growth 5/3/93 45.40% 21.70% 18.44% NA 23.37%
Alger American Small Capitalization 9/21/88 12.12% 9.07% 7.82% 16.32% 16.79%
Davis VA Financial 7/1/99 23.71% NA NA NA 7.22%
Davis VA Real Estate 7/1/99 10.76% NA NA NA -1.34%
Davis VA Value 7/1/99 14.13% NA NA NA 2.86%
Franklin Aggressive Growth Securities* 5/1/00 NA NA NA NA 12.27%
Franklin Global Communications Securities 1/24/89 7.45% 12.11% 12.65% 11.75% 10.75%
Franklin Global Health Care Securities 5/1/98 101.52% NA NA NA 21.81%
Franklin Growth and Income Securities 1/24/89 -5.55% 4.93% 11.61% 11.98% 9.29%
Franklin High Income 1/24/89 -9.85% -4.04% 2.53% 7.99% 5.86%
Franklin Income Securities 1/24/89 7.25% 3.32% 7.30% 10.80% 9.03%
Franklin Large Cap Growth Securities 5/1/96 36.48% 18.85% NA NA 20.55%
Franklin Natural Resources Securities 1/24/89 21.25% -2.63% -1.45% 2.02% 2.75%
Franklin Rising Dividends Securities 1/27/92 -2.54% -1.98% 10.14% NA 7.94%
Franklin S&P 500 Index* 11/11/99 NA NA NA NA -3.33%
Franklin Small Cap 11/01/95 64.93% 21.38% NA NA 24.64%
Franklin Technology Securities* 5/1/00 NA NA NA NA 14.75%
Franklin U.S. Government 3/14/89 0.05% 2.03% 3.84% 6.07% 5.87%
Franklin Value Securities 5/1/98 13.56% NA NA NA -7.56%
J.P. Morgan International Opportunities 1/3/95 -1.95% 2.74% 7.57% NA 7.74%
J.P. Morgan U.S. Disciplined Equity 1/3/95 -2.14% 7.54% 14.99% NA 17.72%
Mutual Discovery Securities 11/08/96 17.27% 4.71% NA NA 9.43%
Mutual Shares Securities 11/08/96 9.77% 3.92% NA NA 8.24%
Oppenheimer Global Securities/VA 11/12/90 41.71% 21.26% 20.06% NA 14.62%
Oppenheimer High Income/VA 4/30/86 -4.47% -1.07% 5.06% 10.50% 9.36%
Oppenheimer Main Street Growth & Income/VA 7/5/95 6.24% 6.63% 18.99% NA 19.90%
PIMCO VIT High Yield Bond 4/30/98 -8.89% NA NA NA -3.44%
PIMCO VIT Stocks PLUS Growth & Income 12/31/97 4.06% NA NA NA 13.12%
PIMCO VIT Total Return Bond 12/31/97 -4.00% NA NA NA 0.33%
Seligman Global Technology 5/01/96 42.59% 35.08% NA NA 30.97%
Seligman Small-Cap Value 5/01/98 7.42% NA NA NA 4.46%
Templeton Developing Markets Securities 3/15/94 -9.89% -14.61% -2.35% NA -1.88%
Templeton Growth Securities 3/15/94 0.83% 2.53% 9.63% NA 9.48%
Templeton International Securities 1/27/92 1.94% 1.17% 8.88% NA 8.93%
Templeton International Smaller Companies 5/01/96 0.30% -4.50% NA NA 2.02%
USAllianz VIP Diversified Assets* 11/12/99 NA NA NA NA -2.00%
USAllianz VIP Fixed Income* 11/12/99 NA NA NA NA -3.16%
USAllianz VIP Global Opportunities* 2/1/00 NA NA NA NA -14.75%
USAllianz VIP Growth* 11/9/99 NA NA NA NA -0.05%
USAllianz VIP Money Market * 2/1/00 NA NA NA NA -3.46%
Van Kampen LIT Enterprise 4/7/86 8.82% 9.14% 17.18% 16.23% 11.00%
Van Kampen LIT Growth & Income 12/23/96 12.28% 10.03% NA NA 14.48%
<FN>
*For funds which have existed less than one year, non-standard cumulative total
returns since inception are shown.
</FN>
</TABLE>
Class II shares of the SP Jennison International Growth Portfolio and the SP
Strategic Partners Focused Growth Portfolio commenced operations as of the date
of this supplement, December 15, 2000, therefore no performance is shown for
these Sub-Accounts.
2. The following financial statements are added to the Statement of Additional
Information:
PREFERRED LIFE VARIABLE ACCOUNT C
of
PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements
September 30, 2000 (unaudited)
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
ALGER ALGER FRANKLIN FRANKLIN GLOBAL FRANKLIN FRANKLIN
AIM AMERICAN AMERICAN AGGRESSIVE COMMUNICATIONS GLOBAL HEALTH GROWTH AND
VI GROWTH GROWTH LEVERAGEDALLCAPGROWTHSECUITIESSECURITIES CARE SECURITIES INCOME
FUND FUND FUND FUND FUND FUND FUND
-----------------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at net asset value $4,128 1,745 1,392 438 61,337 2,783 69,886
-----------------------------------------------------------------------------------------------------------------------------------
Total assets 4,128 1,745 1,392 438 61,337 2,783 69,886
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II 3 3 4 (1) 65 2 37
Accrued mortality and expense risk charges -
Valuemark IV 2 2 1 2 5 5 5
Accrued administrative charges -
Valuemark II - - - - 8 - 5
Accrued administrative charges -
Valuemark IV - - - - 1 1 1
---------------------------------------------------------------------------------------------------------------------------------
Total liabilities 5 5 5 1 79 8 48
Net assets $4,123 1,740 1,387 437 61,258 2,775 69,838
---------------------------------------------------------------------------------------------------------------------------------
Contract owners' equity:
Contracts in accumulation period -
Valuemark II 3,818 1,487 1,117 405 59,997 2,444 67,459
Contracts in accumulation period -
Valuemark IV 305 253 270 32 1,261 331 2,238
Contracts in annuity payment period (note 2) - - - - - - 141
-----------------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $4,123 1,740 1,387 437 61,258 2,775 69,838
-----------------------------------------------------------------------------------------------------------------------------------
Investment shares 125 31 28 37 3,647 162 4,210
Investments at cost $4,332 1,920 1,612 431 63,698 1,973 69,249
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
FRANKLINFRANKLIN LARGEFRANKLIN FRANKLIN FRANKLIN FRANKLIN
FRANKLIN INCOME CAP GROWTH MONEY NATURALRESOURCES REAL RISING DIVIDENDS
HIGH INCOMESECURITIESSECURITIES MARKET SECURITIES ESTATE SECURITIES
FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at net asset value $19,047 46,539 33,174 19,271 3,510 10,327 32,656
---------------------------------------------------------------------------------------------------------------------------
Total assets 19,047 46,539 33,174 19,271 3,510 10,327 32,656
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II 2 65 4 3 4 2 38
Accrued mortality and expense risk charges -
Valuemark IV 5 5 5 5 4 3 5
Accrued administrative charges -
Valuemark II - 8 - - - - 5
Accrued administrative charges -
Valuemark IV 1 1 1 1 - - 1
---------------------------------------------------------------------------------------------------------------------------
Total liabilities 8 79 10 9 8 5 49
Net assets $19,039 46,460 33,164 19,262 3,502 10,322 32,607
---------------------------------------------------------------------------------------------------------------------------
Contract owners' equity:
Contracts in accumulation period -
Valuemark II 17,867 45,109 30,068 18,694 3,302 10,199 30,940
Contracts in accumulation period -
Valuemark IV 1,172 1,256 3,096 568 200 123 1,667
Contracts in annuity payment period (note 2) - 95 - - - -
-
---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $19,039 46,460 33,164 19,262 3,502 10,322 32,607
---------------------------------------------------------------------------------------------------------------------------
Investment shares 2,024 3,183 1,425 19,271 253 615 2,784
Investments at cost $25,447 48,272 23,151 19,267 3,284 10,776 37,232
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
FRANKLIN FRANKLIN FRANKLIN FRANKLIN
S&P 500 FRANKLIN TECHNOLOGY U.S. VALUE FRANKLIN FRANKLIN
INDEX SMALL CAP SECURITIESGOVERNMENT SECURITIESZERO COUPONZERO COUPON
FUND FUND FUND FUND FUND FUND-2000 FUND - 2005
---------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at net asset value $2,379 25,072 479 43,319 836 8,558 5,351
---------------------------------------------------------------------------------------------------------------------------
Total assets 2,379 25,072 479 43,319 836 8,558 5,351
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II 2 4 (4) 3 8 3 6
Accrued mortality and expense risk charges -
Valuemark IV 1 5 5 5 - 5 2
Accrued administrative charges -
Valuemark II - - - - 1 - 1
Accrued administrative charges -
Valuemark IV - 1 1 1 - 1 -
---------------------------------------------------------------------------------------------------------------------------
Total liabilities 3 10 2 9 9 9 9
Net assets $2,376 25,062 477 43,310 827 8,549 5,342
---------------------------------------------------------------------------------------------------------------------------
Contract owners' equity:
Contracts in accumulation period -
Valuemark II 2,089 23,497 427 42,057 398 8,291 5,187
Contracts in accumulation period -
Valuemark IV 287 1,565 50 1,253 429 258 93
Contracts in annuity payment period (note 2) - - - - - - 62
---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $2,376 25,062 477 43,310 827 8,549 5,342
---------------------------------------------------------------------------------------------------------------------------
Investment shares 227 939 39 3,438 92 660 356
Investments at cost $2,366 17,453 475 45,338 716 9,374 5,535
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
MUTUAL MUTUAL TEMPLETON TEMPLETON TEMPLETON TEMPLETON
FRANKLIN DISCOVERY SHARES ASSET DEVELOPING GLOBALINCOME GROWTH
ZERO COUPONSECURITIESSECURITIES STRATEGY MARKETSSECURITIES SECURITIES SECURITIES
FUND - 2010 FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at net asset value $3,874 11,126 22,424 2,533 4,381 6,615 28,438
---------------------------------------------------------------------------------------------------------------------------
Total assets 3,874 11,126 22,424 2,533 4,381 6,615 28,438
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II 2 2 2 3 3 2 4
Accrued mortality and expense risk charges -
Valuemark IV 5 5 5 1 2 3 5
Accrued administrative charges -
Valuemark II - - - - - - 1
Accrued administrative charges -
Valuemark IV 1 1 1 - - - 1
---------------------------------------------------------------------------------------------------------------------------
Total liabilities 8 8 8 4 5 5 11
Net assets $3,866 11,118 22,416 2,529 4,376 6,610 28,427
Contract owners' equity:
Contracts in accumulation period -
Valuemark II 3,672 10,498 19,979 2,472 4,185 6,476 26,395
Contracts in accumulation period -
Valuemark IV 194 620 2,437 57 191 134 1,994
Contracts in annuity payment period (note 2) - - - - - -
38
---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $3,866 11,118 22,416 2,529 4,376 6,610 28,427
---------------------------------------------------------------------------------------------------------------------------
Investment shares 256 778 1,660 134 771 614 2,184
Investments at cost $4,076 9,376 19,871 2,713 5,565 7,777 28,739
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
TEMPLETON TEMPLETON
TEMPLETONINTERNATIONALPACIFIC USALLIANZ USALLIANZ
INTERNATIONALSMALLER GROWTH VIPDIVERSIFIEDVIP FIXED USALLIANZ TOTAL
SECURITIES COMPANIES SECURITIES ASSETS INCOME VIP GROWTH ALL
FUND FUND FUND FUND FUND FUND FUNDS
---------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at net asset value $35,226 997 4,370 137 138 154 512,640
---------------------------------------------------------------------------------------------------------------------------
Total assets 35,226 997 4,370 137 138 154 512,640
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II 3 4 8 - 1 2 289
Accrued mortality and expense risk charges -
Valuemark IV 5 - 2 - - - 110
Accrued administrative charges -
Valuemark II - - 1 - - - 30
Accrued administrative charges -
Valuemark IV 1 - - - - - 17
---------------------------------------------------------------------------------------------------------------------------
Total liabilities 9 4 11 - 1 2 446
Net assets $35,217 993 4,359 137 137 152 512,194
---------------------------------------------------------------------------------------------------------------------------
Contract owners' equity:
Contracts in accumulation period -
Valuemark II 34,643 909 4,288 114 116 145 488,744
Contracts in accumulation period -
Valuemark IV 574 84 71 23 21 7 23,114
Contracts in annuity payment period (note 2) - - - - - - 336
---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $35,217 993 4,359 137 137 152 512,194
---------------------------------------------------------------------------------------------------------------------------
Investment shares 1,907 91 538 13 14 14 52,521
Investments at cost $39,664 1,015 4,910 141 135 154 516,036
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF OPERATIONS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
FRANKLIN
ALGER ALGER AGGRESSIVE FRANKLINGLOBAL FRANKLIN FRANKLIN
AIM VI AMERICAN AMERICAN GROWTH COMMUNICATIONS GLOBAL HEALTH GROWTH AND
GROWTH GROWTH LEVERAGEDALLCAP SECURITIES SECURITIES CARE SECURITIES INCOME
FUND FUND FUND FUND FUND FUND FUND
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends reinvested in fund shares $ - - - - 1,247 1 3,013
------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges -
Valuemark II 32 11 9 1 697 16 822
Mortality and expense risk charges -
Valuemark IV 2 2 1 - 11 5 21
Administrative charges - Valuemark II 4 1 1 - 84 2 99
Administrative charges - Valuemark IV - - - - 1 1 2
------------------------------------------------------------------------------------------------------------------------------
Total expenses 38 14 11 1 793 24 944
Investment income (loss), net (38) (14) (11) (1) 454 (23) 2,069
Realized gains (losses) and unrealized
appreciation (depreciation) on investments:
Realized capital gain distributions on mutual funds - 184 124 - 15,022 - 8,848
Realized gains (losses) on sales of investments, net (37) 13 (49) - 2,236 184 (176)
------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net (37) 197 75 - 17,258 184 8,672
Net change in unrealized appreciation
(depreciation) on investments (217) (195) (225) 7 (27,911) 770 (4,646)
------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net (254) 2 (150) 7 (10,653) 954 4,026
Net increase (decrease) in net assets from
operations $(292) (12) (161) 6 (10,199) 931 6,095
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF OPERATIONS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
FRANKLIN FRANKLIN FRANKLIN
FRANKLIN FRANKLIN LARGE NATURAL FRANKLIN RISING
HIGH INCOME CAP GROWTH FRANKLIN RESOURCES REAL DIVIDENDS
INCOME SECURITIES SECURITIESMONEY MARKETSECURITIES ESTATE SECURITIES
FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
Investment income:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends reinvested in fund shares $ 103 4,760 144 863 21 680 780
---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges -
Valuemark II 207 556 275 198 29 93 322
Mortality and expense risk charges -
Valuemark IV 12 13 22 10 2 2 16
Administrative charges - Valuemark II 25 67 33 24 3 11 39
Administrative charges - Valuemark IV 1 1 2 1 - - 2
---------------------------------------------------------------------------------------------------------------------------
Total expenses 245 637 332 233 34 106 379
Investment income (loss), net (142) 4,123 (188) 630 (13) 574 401
Realized gains (losses) and unrealized
appreciation (depreciation) on investments:
Realized capital gain distributions on mutual funds - 2,276 1,595 - - 405 6,098
Realized gains (losses) on sales of investments,
net (2,690) (1,282) 1,296 - (60) (355) (1,439)
---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net (2,690) 994 2,891 - (60) 50 4,659
Net change in unrealized appreciation
(depreciation) on investments 1,696 1,376 1,817 3 790 1,601 (3,778)
---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net (994) 2,370 4,708 3 730 1,651 881
Net increase (decrease) in net assets from
operations $(1,136) 6,493 4,520 633 717 2,225 1,282
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF OPERATIONS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
FRANKLIN FRANKLIN FRANKLIN FRANKLIN FRANKLIN FRANKLIN
S&P 500 FRANKLIN TECHNOLOGY U.S. VALUE ZERO COUPONZERO COUPON
INDEX SMALL CAP SECURITIESGOVERNMENT SECURITIES 2000 2005
FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
Investment income:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends reinvested in fund shares $ 1 - - 45 3 11 6
---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges -
Valuemark II 17 225 (6) 427 10 90 111
Mortality and expense risk charges -
Valuemark IV 1 12 1 22 5 3 1
Administrative charges - Valuemark II 2 27 (1) 51 1 11 13
Administrative charges - Valuemark IV - 1 - 2 1 - -
---------------------------------------------------------------------------------------------------------------------------
Total expenses 20 265 (6) 502 17 104 125
Investment income (loss), net (19) (265) 6 (457) (14) (93) (119)
Realized gains (losses) and unrealized
appreciation (depreciation) on investments:
Realized capital gain distributions on mutual funds - 1,755 - - - 103 153
Realized gains (losses) on sales of investments, net 1 2,466 43 (1,415) 9 (351) (94)
---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net 1 4,221 43 (1,415) 9 (248) 59
Net change in unrealized appreciation
(depreciation) on investments 3 (2,691) 4 4,540 98 648 307
---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net 4 1,530 47 3,125 107 400 366
Net increase (decrease) in net assets from operations$(15) 1,265 53 2,668 93 307 247
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF OPERATIONS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
TEMPLETON
FRANKLIN MUTUAL MUTUAL TEMPLETON DEVELOPING TEMPLETON TEMPLETON
ZERO COUPONDISCOVERY SHARES ASSET MARKETSGLOBAL INCOME GROWTH
2010 SECURITIES SECURITIES STRATEGY SECURITIESSECURITIES SECURITIES
FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
Investment income:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends reinvested in fund shares $ 4 351 711 5 51 12 607
---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges -
Valuemark II 38 107 207 27 53 71 324
Mortality and expense risk charges -
Valuemark IV 2 6 22 1 1 1 20
Administrative charges - Valuemark II 5 13 25 3 6 9 39
Administrative charges - Valuemark IV - 1 2 - - - 2
---------------------------------------------------------------------------------------------------------------------------
Total expenses 45 127 256 31 60 81 385
Investment income (loss), net (41) 224 455 (26) (9) (69) 222
Realized gains (losses) and unrealized
appreciation (depreciation) on investments:
Realized capital gain distributions on mutual funds 68 - 615 - - - 3,996
Realized gains (losses) on sales of investments, net(257) 396 729 (51) (180) (380) 405
---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net (189) 396 1,344 (51) (180) (380) 4,401
Net change in unrealized appreciation
(depreciation) on investments 552 246 (373) (50) (1,463) 170 (6,350)
---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net 363 642 971 (101) (1,643) (210) (1,949)
Net increase (decrease) in net assets from
operations $ 322 866 1,426 (127) (1,652) (279) (1,727)
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF OPERATIONS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
(IN THOUSANDS)
TEMPLETON
TEMPLETONINTERNATIONALTEMPLETONUSALLIANZVIP
INTERNATIONALSMALLER PACIFICGROWTHDIVERSIFIED USALLIANZVIP USALLIANZ
TOTAL
SECURITIES COMPANIES SECURITIES ASSETS FIXEDINCOME VIP GROWTH ALL
FUND FUND FUND FUND FUND FUND FUNDS
---------------------------------------------------------------------------------------------------------------------------
Investment income:
<S> <C> <C> <C> <C> <C> <C>
Dividends reinvested in fund shares $ 26 19 7 7 5 - 13,483
---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges - Valuemark II 370 11 49 - - 1 5,400
Mortality and expense risk charges - Valuemark IV 4 (1) 1 - - - 221
Administrative charges - Valuemark II 44 1 6 - - - 648
Administrative charges - Valuemark IV - - - - - - 20
---------------------------------------------------------------------------------------------------------------------------
Total expenses 418 11 56 - - 1 6,289
Investment income (loss), net (392) 8 (49) 7 5 (1) 7,194
Realized gains (losses) and unrealized
appreciation (depreciation) on investments:
Realized capital gain distributions on mutual funds 11,167 - - - - - 52,409
Realized gains (losses) on sales of investments, net 165 - (1,123) (7) - 3 (2,000)
---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net 11,332 - (1,123) (7) - 3 50,409
Net change in unrealized appreciation
(depreciation) on investments (14,343) (13) (90) (4) 3 - (47,718)
---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net (3,011) (13) (1,213) (11) 3 3 2,691
Net increase (decrease) in net assets from
operations $ (3,403) (5) (1,262) (4) 8 2 9,885
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
FRANKLIN
AIM VI ALGER AMERICAN ALGER AMERICAN AGGRESSIVE GROWTH
GROWTH FUND GROWTH FUND LEVERAGED ALLCAP FUND SECURITIES FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ (38) 1 (14) - (11) - (1) -
Realized gains (losses) on investments, net(37) 9 197 - 75 9 - -
Net change in unrealized appreciation
(depreciation) on investments (217) 13 (195) 20 (225) 4 7 -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations (292) 23 (12) 20 (161) 13 6 -
---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark II (note 4):
Purchase payments 57 - 7 - 24 - - -
Transfers between funds 4,897 396 1,492 394 1,082 212 401 -
Surrenders and terminations (1,262) (22) (383) (22) (67) - (1) -
Rescissions (1) - - - - - - -
Other transactions (note 2) - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II 3,691 374 1,116 372 1,039 212 400 -
Contract transactions - Valuemark IV (note 4):
Purchase payments 165 - 100 - 115 - 10 -
Transfers between funds 162 4 63 87 173 - 21 -
Surrenders and terminations (4) - (6) - (4) - - -
Rescissions - - - - - - - -
Other transactions (note 2) - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 323 4 157 87 284 - 31 -
Increase (decrease) in net assets 3,722 401 1,261 479 1,162 225 437 -
Net assets at beginning of year 401 - 479 - 225 - - -
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 4,123 401 1,740 479 1,387 225 437 -
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
FRANKLIN GLOBAL COMMUNICATIONSFRANKLINGLOBALHEALTHCARE FRANKLINGROWTHANDFRANKLIN HIGH
SECURITIES FUND SECURITIES FUND INCOME FUND INCOME FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ 454 1,746 (23) (7) 2,069 2,370 (142) 7,066
Realized gains (losses) on
investments, net 17,258 11,061 184 (69) 8,672 15,651 (2,690) 16
Net change in unrealized appreciation
(depreciation) on investments (27,911) 10,895 770 6 (4,646) (17,772) 1,696 (7,480)
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations (10,199) 23,702 931 (70) 6,095 249 (1,136) (398)
Contract transactions - Valuemark II (note 4):
Purchase payments 155 218 5 8 169 579 75 129
Transfers between funds 712 (724) 1,294 376 (5,375) (752) (2,931) (2,280)
Surrenders and terminations (12,188) (22,559) (98) (158) (16,358) (29,750) (4,903) (8,653)
Rescissions (2) (8) - - (27) - - (6)
Other transactions (note 2) (21) 403 - - 51 436 23 51
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (11,344) (22,670) 1,201 226 (21,540) (29,487) (7,736)(10,759)
---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark IV (note 4):
Purchase payments 400 504 28 348 77 601 10 366
Transfers between funds 301 131 4 (212) 113 983 20 506
Surrenders and terminations (34) (64) (36) (13) (83) (88) (106) (52)
Rescissions - (3) - - - - - -
Other transactions (note 2) - - - - - 4 - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 667 568 (4) 123 107 1,500 (76) 820
Increase (decrease) in net assets (20,876) 1,600 2,128 279 (15,338) (27,738) (8,948)(10,337)
Net assets at beginning of year 82,134 80,534 647 368 85,176 112,914 27,987 38,324
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 61,258 82,134 2,775 647 69,838 85,176 19,039 27,987
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
FRANKLIN NATURAL
FRANKLIN INCOME FRANKLIN LARGE CAP FRANKLIN MONEY RESOURCES
SECURITIES FUND GROWTH SECURITIES FUND MARKET FUND SECURITIES FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ 4,123 4,822 (188) (228) 630 897 (13) 1
Realized gains (losses) on
nvestments, net 994 2,921 2,891 1,016 - - (60) (770)
Net change in unrealized appreciation
(depreciation) on investments 1,376 (9,842) 1,817 5,588 3 - 790 1,633
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations 6,493 (2,099) 4,520 6,376 633 897 717 864
Contract transactions - Valuemark II (note 4):
Purchase payments 63 307 109 360 74 393 5 12
Transfers between funds (4,014) (4,554) 3,162 11,623 1,157 4,341 215 (210)
Surrenders and terminations (11,919) (21,120) (4,234) (7,116) (7,043) (13,569) (576) (1,193)
Rescissions - - - - (1) (39) - -
Other transactions (note 2) 16 190 12 5 233 484 (2) (1)
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (15,854) (25,177) (951) 4,872 (5,580) (8,390) (358) (1,392)
Contract transactions - Valuemark IV (note 4):
Purchase payments 76 558 388 656 61 92 26 61
Transfers between funds (183) 485 1,044 338 (1,081) 1,256 5 (8)
Surrenders and terminations (118) (37) (94) (50) (8) (17) (3) (2)
Rescissions - - - (27) (15) - - -
Other transactions (note 2) - - - - 60 - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV (225) 1,006 1,338 917 (983) 1,331 28 51
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (9,586) (26,270) 4,907 12,165 (5,930) (6,162) 387 (477)
Net assets at beginning of year 56,046 82,316 28,257 16,092 25,192 31,354 3,115 3,592
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 46,460 56,046 33,164 28,257 19,262 25,192 3,502 3,115
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
FRANKLIN REAL FRANKLIN RISING FRANKLIN FRANKLIN
ESTATE FUND DIVIDENDS SECURITIES FUNDS&P 500 INDEX FUND SMALL CAP FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ 574 913 401 116 (19) - (265) (148)
Realized gains (losses) on
investments, net 50 1,434 4,659 11,890 1 - 4,221 488
Net change in unrealized appreciation
depreciation) on investments 1,601 (3,300) (3,778)(18,289) 3 10 (2,691) 10,634
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations 2,225 (953) 1,282 (6,283) (15) 10 1,265 10,974
Contract transactions - Valuemark II (note 4):
Purchase payments 39 34 114 304 27 - 169 100
Transfers between funds (258) (2,005) (3,853) (3,108) 1,791 521 3,458 962
Surrenders and terminations (1,725) (3,480) (8,157)(16,637) (203) (45) (3,502) (4,320)
Rescissions - - - - - - - -
Other transactions (note 2) (4) 2 (12) 11 (1) - (8) 10
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (1,948) (5,449) (11,908)(19,430) 1,614 476 117 (3,248)
Contract transactions - Valuemark IV (note 4):
Purchase payments 18 53 154 778 209 - 257 627
Transfers between funds (7) 24 145 419 84 - 553 (297)
Surrenders and terminations (16) - (44) (74) (2) - (66) (22)
Rescissions - - - (3) - - - -
Other transactions (note 2) - - (1) 3 - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV (5) 77 254 1,123 291 - 744 308
Increase (decrease) in net assets 272 (6,325) (10,372)(24,590) 1,890 486 2,126 8,034
Net assets at beginning of year 10,050 16,375 42,979 67,569 486 - 22,936 14,902
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $10,322 10,050 32,607 42,979 2,376 486 25,062 22,936
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999
FRANKLIN TECHNOLOGY FRANKLIN FRANKLIN VALUE FRANKLIN ZERO COUPON -
SECURITIES FUND U.S. GOVERNMENT FUND SECURITIES FUND 2000 FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ 6 - (457) 7,750 (14) (6) (93) 1,785
Realized gains (losses) on
investments, net 43 - (1,415) (66) 9 4 (248) 223
Net change in unrealized appreciation
(depreciation) on investments 4 - 4,540 (9,210) 98 8 648 (1,804)
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations 53 - 2,668 (1,526) 93 6 307 204
Contract transactions - Valuemark II (note 4):
Purchase payments - - 51 406 12 7 33 35
Transfers between funds 377 - (2,947) (1,792) 155 116 (304) (565)
Surrenders and terminations - - (8,888)(17,946) (68) (9) (2,598) (3,878)
Rescissions - - - (2) (1) - (21) -
Other transactions (note 2) - - 42 88 - - (4) 152
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II 377 - (11,742)(19,246) 98 114 (2,894) (4,256)
Contract transactions - Valuemark IV (note 4):
Purchase payments 25 - 29 498 11 72 - 34
Transfers between funds 22 - (1,110) 1,403 (19) 183 - 208
Surrenders and terminations - - (75) (97) (23) (18) (44) (2)
Rescissions - - - (21) - - - -
Other transactions (note 2) - - - 4 - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 47 - (1,156) 1,787 (31) 237 (44) 240
Increase (decrease) in net assets 477 - (10,230)(18,985) 160 357 (2,631) (3,812)
Net assets at beginning of year - - 53,540 72,525 667 310 11,180 14,992
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $477 - 43,310 53,540 827 667 8,549 11,180
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
FRANKLIN ZERO COUPON -FRANKLIN ZERO COUPON -MUTUAL DISCOVERY MUTUAL SHARES
2005 FUND 2010 FUND SECURITIES FUND SECURITIES FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ (119) 755 (41) 629 224 169 455 318
Realized gains (losses) on
investments, net 59 150 (189) 219 396 40 1,344 546
Net change in unrealized appreciation
(depreciation) on investments 307 (1,492) 552 (1,784) 246 2,050 (373) 2,130
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations 247 (587) 322 (936) 866 2,259 1,426 2,994
Contract transactions - Valuemark II (note 4):
Purchase payments 3 40 12 55 50 72 90 193
Transfers between funds 114 (466) (296) (572) 470 (869) (1,884) 424
Surrenders and terminations (1,116) (1,788) (1,122) (1,422) (1,925) (2,956) (4,391) (5,418)
Rescissions - - - - - - - (4)
Other transactions (note 2) (2) 65 24 9 2 (4) (9) (7)
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (1,001) (2,149) (1,382) (1,930) (1,403) (3,757) (6,194) (4,812)
Contract transactions - Valuemark IV (note 4):
Purchase payments - 37 6 157 62 113 11 906
Transfers between funds 3 9 (5) (40) 41 142 591 490
Surrenders and terminations (1) (5) (1) (8) (27) (10) (178) (54)
Rescissions - - - - - - - -
Other transactions (note 2) - - - 2 - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 2 41 - 111 76 245 424 1,342
Increase (decrease) in net assets (752) (2,695) (1,060) (2,755) (461) (1,253) (4,344) (476)
Net assets at beginning of year 6,094 8,789 4,926 7,681 11,579 12,832 26,760 27,236
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 5,342 6,094 3,866 4,926 11,118 11,579 22,416 26,760
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
TEMPLETON TEMPLETON DEVELOPING TEMPLETONGLOBALINCOME TEMPLETON GROWTH
ASSET STRATEGYFUND MARKETSSECURITIESFUND SECURITIES FUND SECURITIES FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ (26) 211 (9) 42 (69) 780 222 299
Realized gains (losses) on
investments, net (51) 236 (180) (656) (380) (290) 4,401 4,959
Net change in unrealized appreciation
(depreciation) on investments (50) (253) (1,463) 3,346 170 (1,395) (6,350) 1,167
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations (127) 194 (1,652) 2,732 (279) (905) (1,727) 6,425
Contract transactions - Valuemark II (note 4):
Purchase payments 7 39 35 49 15 31 128 164
Transfers between funds (231) (552) (413) 170 (424) (679) 178 33
Surrenders and terminations (471) (733) (1,320) (1,407) (1,853) (3,553) (8,402) (6,764)
Rescissions - - - - - - (16) -
Other transactions (note 2) (1) 31 (2) 1 - 18 (1) 13
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (696) (1,215) (1,700) (1,187) (2,262) (4,183) (8,113) (6,554)
Contract transactions - Valuemark IV (note 4):
Purchase payments 6 15 70 185 25 58 349 642
Transfers between funds (3) 25 29 (94) 3 15 91 805
Surrenders and terminations (2) (5) - (35) - (1) (152) (18)
Rescissions - - - - - - - (9)
Other transactions (note 2) - 4 - - - - - 2
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 1 39 99 56 28 72 288 1,422
Increase (decrease) in net assets (822) (982) (3,253) 1,601 (2,513) (5,016) (9,552) 1,293
Net assets at beginning of year 3,351 4,333 7,629 6,028 9,123 14,139 37,979 36,686
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $2,529 3,351 4,376 7,629 6,610 9,123 28,427 37,979
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
TEMPLETON INTLTEMPLETON INTERNATIONAL TEMPLETON PACIFIC USALLIANZ VIP
SECURITIES FUND SMALLER COMPANIES FUND GROWTHSECURITIESFUND DIVERSIFIED ASSETS FUND
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss), net $ (392) 2,122 8 15 (49) (31) 7 -
Realized gains (losses) on
investments, net 11,332 4,165 - (47) (1,123) (2,409) (7) -
Net change in unrealized appreciation
(depreciation) on investments (14,343) 4,247 (13) 245 (90) 4,586 (4) -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations (3,403) 10,534 (5) 213 (1,262) 2,146 (4) -
Contract transactions - Valuemark II (note 4):
Purchase payments 108 145 6 4 9 102 1 -
Transfers between funds (12) (2,577) (92) 99 (221) 479 337 2
Surrenders and terminations (8,916) (15,456) (162) (217) (1,468) (2,143) (221) -
Rescissions (12) (2) - - - - - -
Other transactions (note 2) (7) 67 - (1) (2) 5 - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II (8,839) (17,823) (248) (115) (1,682) (1,557) 117 2
---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark IV (note 4):
Purchase payments 100 136 38 132 5 8 4 -
Transfers between funds 208 10 15 (127) 16 6 20 -
Surrenders and terminations (13) (4) (9) - - - (2) -
Rescissions - (9) - - - - - -
Other transactions (note 2) - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 295 133 44 5 21 14 22 -
Increase (decrease) in net assets (11,947) (7,156) (209) 103 (2,923) 603 135 2
Net assets at beginning of year 47,164 54,320 1,202 1,099 7,282 6,679 2 -
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 35,217 47,164 993 1,202 4,359 7,282 137 2
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS)
USALLIANZ VIP USALLIANZ VIP TOTAL
FIXED INCOME FUND GROWTH FUND ALL FUNDS
---------------------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C>
Investment income (loss), net $ 5 - (1) - 7,194 32,387
Realized gains (losses) on investments, net - - 3 (2) 50,409 50,728
Net change in unrealized appreciation
(depreciation) on investments 3 - - - (47,718)(26,039)
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations 8 - 2 (2) 9,885 57,076
Contract transactions - Valuemark II (note 4):
Purchase payments 100 - 1 - 1,753 3,786
Transfers between funds 9 22 171 2 (1,783) (1,533)
Surrenders and terminations - (22) (30) - (115,570)(192,356)
Rescissions - - - - (81) (61)
Other transactions (note 2) - - - - 327 2,028
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark II 109 - 142 2 (115,354)(188,136)
Contract transactions - Valuemark IV (note 4):
Purchase payments 2 - 3 - 2,840 7,637
Transfers between funds 20 - 5 - 1,344 6,751
Surrenders and terminations (2) - - - (1,153) (676)
Rescissions - - - - (15) (72)
Other transactions (note 2) - - - - 59 19
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract
transactions - Valuemark IV 20 - 8 - 3,075 13,659
Increase (decrease) in net assets 137 - 152 - (102,394)(117,401)
Net assets at beginning of year - - - - 614,588 731,989
---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $137 - 152 - 512,194 614,588
</TABLE>
See accompanying notes to financial statements.
<PAGE>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
September 30, 2000 (unaudited)
1. ORGANIZATION
Preferred Life Variable Account C (Variable Account) is a segregated investment
account of Preferred Life Insurance Company of New York (Preferred Life) and is
registered with the Securities and Exchange Commission as a unit investment
trust pursuant to the provisions of the Investment Company Act of 1940 (as
amended). The Variable Account was established by Preferred Life on February 26,
1988 and commenced operations September 6, 1991. Accordingly, it is an
accounting entity wherein all segregated account transactions are reflected.
The Variable Account's assets are the property of Preferred Life and are held
for the benefit of the owners and other persons entitled to payments under
variable annuity contracts issued through the Variable Account and underwritten
by Preferred Life. The assets of the Variable Account, equal to the reserves and
other liabilities of the Variable Account, are not chargeable with liabilities
that arise from any other business which Preferred Life may conduct.
The Variable Account's sub-accounts may invest, at net asset values, in one or
more of select portfolios of the following Investment Advisers in accordance
with the selection made by the contract owner. The investment advisers for each
portfolio are listed in the following table.
<TABLE>
<CAPTION>
Portfolio Investment Adviser
---------------------------------------------------------------------------
<S> <C>
AIM VI Growth Fund AIM Advisors, Inc.
Alger American Growth Fund Fred Alger Management, Inc.
Alger American Leveraged AllCap Fund Fred Alger Management, Inc.
Franklin Aggressive Growth Securities Fund Franklin Advisers, Inc.
Franklin Global Communications Securities Fund Franklin Advisers, Inc.
Franklin Global Health Care Securities Fund Franklin Advisers, Inc.
Franklin Growth and Income Fund Franklin Advisers, Inc.
Franklin High Income Fund Franklin Advisers, Inc.
Franklin Income Securities Fund Franklin Advisers, Inc.
Franklin Large Cap Growth Securities Fund Franklin Advisers, Inc.
Franklin Money Market Fund Franklin Advisers, Inc.
Franklin Natural Resources Securities Fund Franklin Advisers, Inc.
Franklin Real Estate Fund Franklin Advisers, Inc.
Franklin Rising Dividends Securities Fund Franklin Advisory Services, LLC
Franklin S&P 500 Index Fund Franklin Advisers, Inc.
Franklin Small Cap Fund Franklin Advisers, Inc.
Franklin Technology Securities Fund Franklin Advisers, Inc.
Franklin U.S. Government Fund Franklin Advisers, Inc.
Franklin Value Securities Fund Franklin Advisory Services, LLC
Franklin Zero Coupon - 2000 Fund Franklin Advisers, Inc.
Franklin Zero Coupon - 2005 Fund Franklin Advisers, Inc.
Franklin Zero Coupon - 2010 Fund Franklin Advisers, Inc.
Mutual Discovery Securities Fund Franklin Mutual Advisers, LLC
Mutual Shares Securities Fund Franklin Mutual Advisers, LLC
Templeton Asset Strategy Fund Templeton Global Advisors Limited
Templeton Developing Markets Securities Fund Templeton Asset Management Ltd.
Templeton Global Income Securities Fund Franklin Advisers, Inc.
Templeton Growth Securities Fund Templeton Global Advisors Limited
Templeton International Securities Fund Franklin Advisers, Inc.
Templeton International Smaller Companies Fund Templeton Investment Counsel, Inc.
Templeton Pacific Growth Securities Fund Franklin Advisers, Inc.
USAllianz VIP Diversified Assets Fund Allianz of America, Inc.
USAllianz VIP Fixed Income Fund Allianz of America, Inc.
USAllianz VIP Growth Fund Allianz of America, Inc.
</TABLE>
<PAGE>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
INVESTMENTS
Investments of the Variable Account are valued daily at market value using net
asset values provided by AIM Variable Insurance Funds, Inc., The Alger American
Fund, the Franklin Templeton Variable Insurance Products Trust, and the
USAllianz Variable Insurance Products Trust.
Realized investment gains include realized gain distributions received from the
respective portfolios and gains on the sale of portfolio shares as determined by
the average cost method. Realized gain distributions are reinvested in the
respective portfolios. Dividend distributions received from the portfolios are
reinvested in additional shares of the portfolios and are recorded as income to
the Variable Account on the ex-dividend date.
A Flexible Fixed Account investment option and a Dollar Cost Averaging Fixed
Account investment option are available to deferred annuity contract owners.
These accounts are comprised of equity and fixed income investments which are
part of the general assets of Preferred Life. The liabilities of the Fixed
Accounts are part of the general obligations of Preferred Life and are not
included in the Variable Account. The guaranteed minimum rate of return on the
Fixed Accounts is 3%.
On November 12, 1999, the AIM VI Growth Fund, Alger American Growth Fund, Alger
American Leveraged AllCap Fund, Franklin S&P 500 Index Fund, USAllianz VIP
Diversified Assets Fund, USAllianz VIP Fixed Income Fund, and USAllianz VIP
Growth Fund were added as available investment options.
The Franklin Aggressive Growth Securities Fund and Franklin Technology
Securities Fund were added as available investment options on May 1, 2000.
During the nine-month period ended September 30, 2000, several portfolios
changed their name as summarized, with the effective date of the change, in the
following table.
<TABLE>
<CAPTION>
Current Portfolio Prior Portfolio Name Effective Date
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Franklin Asset Strategy Fund Franklin Global Asset Allocation Fund May 1, 2000
Franklin Developing Markets Securities Fund Franklin Developing Markets Equity Fund May 1, 2000
Franklin Growth Securities Fund Franklin Global Growth Fund May 1, 2000
Franklin International Equity Fund Franklin International Securities Fund May 1, 2000
Franklin Pacific Growth Securities Fund Franklin Pacific Growth Fund May 1, 2000
</TABLE>
CONTRACTS IN ANNUITY PAYMENT PERIOD
Annuity reserves are computed for currently payable contracts according to the
1983 Individual Annuity Mortality Table, using an assumed investment return
(AIR) equal to the AIR of the specific contracts, either 3% or 5%. Charges to
annuity reserves for mortality and risk expense are reimbursed to Preferred Life
if the reserves required are less than originally estimated. If additional
reserves are required, Preferred Life reimburses the account.
EXPENSES
ASSET BASED EXPENSES
A mortality and expense risk charge is deducted from the Variable Account on a
daily basis. The charge is equal, on an annual basis, to 1.25% of the daily net
assets of Valuemark II and 1.34% of the daily net assets of Valuemark IV.
<PAGE>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
An administrative charge is deducted from the Variable Account on a daily basis
equal, on an annual basis, to 0.15% of the daily net assets of all products
which comprise the Variable Account.
CONTRACT BASED EXPENSES
A contract maintenance charge is paid by the contract owner annually from each
contract by liquidating contract units at the end of the contract year and at
the time of full surrender. The amount of the charge is $30 each year. Contract
maintenance charges deducted during the nine-month period ended September 30,
2000 (unaudited) and the year ended December 31, 1999 were $276,767 and
$443,591, respectively. These contract charges are reflected in the Statements
of Changes in Net Assets as other transactions.
A contingent deferred sales charge is deducted from the contract value at the
time of a surrender. This charge applies only to a surrender of purchase
payments received within five years of the date of surrender for Valuemark II
contracts and within seven years of the date of surrender for Valuemark IV
contracts. The amount of the contingent deferred sales charge is shown below.
Years Since Contingent Deferred Sales Charge
--------------------------------
Payment Valuemark II Valuemark IV
--------------------------------------------------------
0-1 5% 6%
1-2 5% 6%
2-3 4% 6%
3-4 3% 5%
4-5 1.5% 4%
5-6 0% 3%
6-7 0% 2%
Total contingent deferred sales charges paid by the contract owners during the
nine-month period ended September 30, 2000 (unaudited) and the year ended
December 31, 1999 were $495,633 and $961,794, respectively.
On Valuemark II deferred annuity contracts, a systematic withdrawal plan is
available which allows an owner to withdraw up to nine percent (9%) of purchase
payments less prior surrenders annually, paid monthly or quarterly, without
incurring a contingent deferred sales charge. The systematic withdrawal plan
available to Valuemark IV deferred annuity contract owners allows up to fifteen
percent (15%) of the contract value withdrawn annually, paid monthly or
quarterly, without incurring a contingent deferred sales charge. The exercise of
the systematic withdrawal plan in any contract year replaces the 15% penalty
free privilege for that year for all deferred annuity contracts.
Currently, twelve transfers are permitted each contract year. Thereafter, the
fee is $25 per transfer, or 2% of the amount transferred, if less. Currently,
transfers associated with the dollar cost averaging program are not counted.
Total transfer charges during the nine-month period ended September 30, 2000
(unaudited) and the year ended December 31, 1999 were $4,780 and $4,250,
respectively. Transfer charges are reflected in the Statement of Changes in Net
Assets as other transactions. Net transfers to the Fixed Accounts were $438,883
for the nine-month period ended September 30, 2000 (unaudited). Net transfers
from the Fixed Accounts were $5,218,108 for the year ended December 31, 1999.
Premium taxes or other taxes payable to a state or other governmental entity
will be charged against the contract values. Preferred Life may, at its sole
discretion, pay taxes when due and deduct that amount from the contract value at
a later date. Payment at an earlier date does not waive any right Preferred Life
may have to deduct such amounts at a later date.
A rescission is defined as a contract that is returned to the company and
canceled within the free-look period, generally within 10 days.
3. FEDERAL INCOME TAXES
Operations of the Variable Account form a part of, and are taxed with,
operations of Preferred Life, which is taxed as a life insurance company under
the Internal Revenue Code.
Preferred Life does not expect to incur any federal income taxes in the
operation of the Variable Account. If, in the future, Preferred Life determines
that the Variable Account may incur federal income taxes, it may then assess a
charge against the Variable Account for such taxes.
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
4. CONTRACT TRANSACTIONS - ACCUMULATION UNIT ACTIVITY (IN THOUSANDS)
Transactions in units for each fund for the nine-month period ended September
30, 2000 (unaudited) and the year ended December 31, 1999 were as follows:
ALGER FRANKLIN FRANKLIN FRANKLIN
ALGER AMERICANAGGRESSIVE GLOBAL GLOBAL FRANKLIN FRANKLIN
AIM MERICANLEVERAGE GROWT COMMUNICATIONS HEALTH GROWTH & FRANKLIN INCOME
VIGROWTH GROWTH ALLCAP SECURITIESSECURITIESCARESECURITIES INCOME HIGHINCOME SECURITIES
FUND FUND FUND FUND FUND FUND FUND FUND FUND
-------------------------------------------------------------------------------------------------------------------------------
VALUEMARK II
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation units outstanding at
December 31, 1998 - - - - 2,843 26 4,289 1,783 3,263
Contract transactions:
Purchase payments - - - - 8 1 22 6 12
Transfers between funds 38 38 18 - (26) 37 (31) (106) (185)
Surrenders and terminations (2) (2) - - (750) (17) (1,112) (409) (850)
Rescissions - - - - - - - - -
Other transactions - - - - 13 - 16 2 8
-------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 36 36 18 - (755) 21 (1,105) (507) (1,015)
Accumulation units outstanding at
December 31, 1999 36 36 18 - 2,088 47 3,184 1,276 2,248
-------------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 5 1 2 - 4 - 7 4 2
Transfers between funds 410 136 82 34 17 107 (219) (141) (166)
Surrenders and terminations (110) (34) (6) - (318) (7) (628) (239) (472)
Rescissions - - - - - - (1) - -
Bonuses - - - - - - - - -
Other transactions - - - - (1) - 2 1 1
-------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 305 103 78 34 (298) 100 (839) (375) (635)
Accumulation units outstanding at
September 30, 2000 341 139 96 34 1,790 147 2,345 901 1,613
-------------------------------------------------------------------------------------------------------------------------------
VALUEMARK IV
Accumulation units outstanding at
December 31, 1998 - - - - 2 8 17 25 14
Contract transactions:
Purchase payments - - - - 17 38 23 17 23
Transfers between funds - 8 - - 4 (25) 37 24 20
Surrenders and terminations - - - - (2) (2) (3) (3) (1)
Rescissions - - - - - - - - -
Other transactions - - - - - - - - -
-------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions - 8 - - 19 11 57 38 42
Accumulation units outstanding at
December 31, 1999 - 8 - - 21 19 74 63 56
-------------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 14 9 10 1 10 2 3 1 3
Transfers between funds 14 7 14 2 8 - 4 1 (8)
Surrenders and terminations - (1) - - (1) (3) (3) (5) (5)
Rescissions - - - - - - - - -
Bonuses - - - - - - - - -
Other transactions - - - - - - - - -
-------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 28 15 24 3 17 (1) 4 (3) (10)
Accumulation units outstanding at
September 30, 2000 28 23 24 3 38 18 78 60 46
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
4. CONTRACT TRANSACTIONS - ACCUMULATION UNIT ACTIVITY (IN THOUSANDS) (CONTINUED)
FRANKLIN FRANKLIN
FRANKLIN LARGEFRANKLINNATURALFRANKLIN RISING FRANKLIN FRANKLIN FRANKLIN
CAP GROWTH MONEY RESOURCES REAL DIVIDENDS S&P 500 FRANKLINTECHNOLOGY U.S.
SECURITIES MARKETSECURITIES ESTATE SECURITIES INDEX SMALLCAP SECURITIESGOVERNMENT
FUND FUND FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK II
Accumulation units outstanding at
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1998 1,016 2,168 415 708 3,176 - 1,012 - 3,787
Contract transactions:
Purchase payments 22 26 1 1 15 - 6 - 22
Transfers between funds 710 299 (28) (90) (157) 51 27 - (96)
Surrenders and terminations (423) (930) (120) (153) (828) (4) (263) - (957)
Rescissions - (3) - - - - - - -
Other transactions - 33 - - 1 - 1 - 5
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 309 (575) (147) (242) (969) 47 (229) - (1,026)
---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at
December 31, 1999 1,325 1,593 268 466 2,207 47 783 - 2,761
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 5 5 - 2 6 3 5 - 3
Transfers between funds 146 95 13 (14) (207) 174 110 35 (157)
Surrenders and terminations (192) (490) (46) (73) (433) (20) (116) - (470)
Rescissions - - - - - - - - -
Bonuses - - - - - - - - -
Other transactions 1 15 - - (1) - - - 2
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions (40) (375) (33) (85) (635) 157 (1) 35 (622)
Accumulation units outstanding at
September 30, 2000 1,285 1,218 235 381 1,572 204 782 35 2,139
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK IV
Accumulation units outstanding at
December 31, 1998 17 12 7 1 17 - 9 - 28
Contract transactions:
Purchase payments 40 6 6 2 39 - 38 - 27
Transfers between funds 21 86 (1) 1 21 - (18) - 76
Surrenders and terminations (3) (1) - - (4) - (1) - (5)
Rescissions (2) - - - - - - - (1)
Other transactions - - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 56 91 5 3 56 - 19 - 97
---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at
December 31, 1999 73 103 12 4 73 - 28 - 125
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 18 4 2 1 8 20 9 2 2
Transfers between funds 46 (72) 1 - 7 8 19 2 (58)
Surrenders and terminations (4) (1) - (1) (2) - (2) - (4)
Rescissions - (1) - - - - - - -
Bonuses - - - - - - - - -
Other transactions - 4 - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 60 (66) 3 - 13 28 26 4 (60)
Accumulation units outstanding at
September 30, 2000 133 37 15 4 86 28 54 4 65
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
4. CONTRACT TRANSACTIONS - ACCUMULATION UNIT ACTIVITY (IN THOUSANDS) (CONTINUED)
FRANKLINFRANKLIN FRANKLIN TEMPLETONTEMPLETON
FRANKLIN ZERO ZERO ZERO MUTUAL MUTUAL TEMPLETONDEVELOPINGGLOBAL
VALUE COUPON COUPON COUPON DISCOVERY SHARES ASSET MARKETS INCOME
SECURITIES 2000 2005 2010 SECURITIESSECURITIESSTRATEGYSECURITIESSECURITIES
FUND FUND FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK II
Accumulation units outstanding at
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1998 19 723 349 272 1,127 2,264 318 749 787
Contract transactions:
Purchase payments 1 2 2 2 6 15 3 5 2
Transfers between funds 16 (27) (20) (22) (76) 28 (41) 9 (39)
Surrenders and terminations (1) (186) (75) (55) (247) (427) (54) (148) (209)
Rescissions - - - - - - - - -
Other transactions - 7 3 - - (1) 2 - 1
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 16 (204) (90) (75) (317) (385) (90) (134) (245)
Accumulation units outstanding at
December 31, 1999 35 519 259 197 810 1,879 228 615 542
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 1 2 - - 3 7 1 3 1
Transfers between funds 18 (14) 2 (12) 34 (143) (17) (39) (26)
Surrenders and terminations (8) (122) (50) (45) (132) (327) (33) (124) (114)
Rescissions - (1) - - - - - - -
Bonuses - - - - - - - - -
Other transactions - - - 1 - (1) - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 11 (135) (48) (56) (95) (464) (49) (160) (139)
Accumulation units outstanding at
September 30, 2000 46 384 211 141 715 1,415 179 455 403
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK IV
Accumulation units outstanding at
December 31, 1998 22 2 2 3 17 38 1 5 2
Contract transactions:
Purchase payments 10 2 2 6 10 71 1 18 3
Transfers between funds 24 10 - (2) 12 39 2 (9) 1
Surrenders and terminations (2) - - - (1) (4) - (4) -
Rescissions - - - - - - - - -
Other transactions - - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 32 12 2 4 21 106 3 5 4
Accumulation units outstanding at
December 31, 1999 54 14 4 7 38 144 4 10 6
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 2 - - - 4 1 - 7 2
Transfers between funds (2) - - - 3 42 - 3 -
Surrenders and terminations (3) (2) - - (2) (13) - - -
Rescissions - - - - - - - - -
Bonuses - - - - - - - - -
Other transactions - - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions (3) (2) - - 5 30 - 10 2
Accumulation units outstanding at
September 30, 2000 51 12 4 7 43 174 4 20 8
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
4. CONTRACT TRANSACTIONS - ACCUMULATION UNIT ACTIVITY (IN THOUSANDS) (CONTINUED)
TEMPLETON
TEMPLETON TEMPLETON INTL TEMPLETON USALLIANZ USALLIANZ
GROWTH INTL SMALLER PACIFICGROWTH VIPDIV VIPFIXED USALLIANZ TOTAL
SECURITIES SECURITIES COMPANIES SECURITIESASSETS INCOME VIPGROWTH ALL
FUND FUND FUND FUND FUND FUND FUND FUNDS
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK II
Accumulation units outstanding at
<S> <C> <C> <C> <C> <C>
December 31, 1998 2,239 2,938 114 821 - - - 37,206
Contract transactions:
Purchase payments 9 8 - 10 - - - 207
Transfers between funds - (136) 8 52 - 2 - 253
Surrenders and terminations (390) (780) (21) (225) - (2) - (9,640)
Rescissions - - - - - - - (3)
Other transactions 1 4 - 1 - - - 97
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions (380) (904) (13) (162) - - - (9,086)
Accumulation units outstanding at December 31, 1999 1,859 2,034 101 659 - - - 28,120
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 7 5 - 1 - 10 - 95
Transfers between funds 8 (1) (8) (8) 32 1 16 298
Surrenders and terminations (450) (411) (14) (154) (21) - (3) (5,662)
Rescissions (1) (1) - - - - - (4)
Bonuses - - - - - - - -
Other transactions - - - - - - - 20
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions (436) (408) (22) (161) 11 11 13 (5,253)
Accumulation units outstanding at
September 30, 2000 1,423 1,626 79 498 11 11 13 22,867
---------------------------------------------------------------------------------------------------------------------------
VALUEMARK IV
Accumulation units outstanding at December 31, 1998 10 8 3 6 - - - 276
Contract transactions:
Purchase payments 37 7 12 1 - - - 456
Transfers between funds 46 1 (12) 1 - - - 367
Surrenders and terminations (1) - - - - - - (37)
Rescissions (1) - - - - - - (4)
Other transactions - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 81 8 - 2 - - - 782
Accumulation units outstanding at December 31, 1999 91 16 3 8 - - - 1,058
---------------------------------------------------------------------------------------------------------------------------
Contract transactions:
Purchase payments 19 5 3 1 - - - 163
Transfers between funds 5 8 1 - 2 2 - 59
Surrenders and terminations (8) (1) (1) - - - - (62)
Rescissions - - - - - - - (1)
Bonuses - - - - - - - -
Other transactions - - - - - - - 4
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation
units resulting from contract transactions 16 12 3 1 2 2 - 163
Accumulation units outstanding at September 30, 2000 107 28 6 9 2 2 - 1,221
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES
A summary of accumulation unit values and accumulation units outstanding for
variable annuity contracts and the expense ratios, including expenses of the
underlying funds for the nine-month period ended September 30, 2000 (unaudited)
and each of the five years ended December 31, 1999.
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETS TOAVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETS TO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE (IN THOUSANDS)NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
AIM VI GROWTH FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 341 $11.217 $3,818 2.13% 28 $11.208 $305 2.22%
December 31,
19991 36 11.084 397 2.13+ - 11.083 4 2.22+
ALGER AMERICAN GROWTH FUND
September 30, 2000 139 10.798 1,487 2.19 23 10.789 253 2.28
December 31,
19991 36 10.922 391 2.19+ 8 10.921 88 2.28+
ALGER AMERICAN LEVERAGED ALLCAP FUND
September 30, 2000 96 11.587 1,117 2.33 24 11.578 270 2.42
December 31,
19991 18 12.160 225 2.33+ - - - 2.42+
FRANKLIN AGGRESSIVE GROWTH FUND
September 30, 20006 34 11.840 405 2.12+ 3 11.835 32 2.21+
FRANKLIN GLOBAL COMMUNICATIONS SECURITIES FUND
September 30, 2000 1,790 33.514 59,997 1.91 38 33.195 1,261 2.00
December 31,
1999 2,088 38.917 81,263 1.91 21 38.572 792 2.00
1998 2,843 28.308 80,480 1.90 2 28.082 54 1.99
1997 3,699 25.818 95,497 1.90 - - - -
1996 4,998 20.654 103,225 1.90 - - - -
1995 5,916 19.555 115,743 1.90 - - - -
FRANKLIN GLOBAL HEALTH CARE SECURITIES FUND
September 30, 2000 147 16.692 2,444 2.22 18 16.656 331 2.31
December 31,
1999 47 9.615 450 2.22 19 9.601 197 2.31
19983 26 10.610 275 2.24+ 8 10.604 93 2.33+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
FRANKLIN GROWTH AND INCOME FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 2,345 $28.776 $67,459 1.89% 78 $28.475 $2,238 1.98%
December 31,
1999 3,184 26.147 83,242 1.89 74 25.891 1,929 1.98
1998 4,289 26.226 112,466 1.89 17 25.993 448 1.98
1997 4,952 24.551 121,570 1.89 - - - -
1996 5,070 19.490 98,821 1.90 - - - -
1995 4,347 17.310 75,240 1.92 - - - -
FRANKLIN HIGH INCOME FUND
September 30, 2000 901 19.826 17,867 1.94 60 19.618 1,172 2.03
December 31,
1999 1,276 20.900 26,674 1.94 63 20.695 1,313 2.03
1998 1,783 21.208 37,806 1.93 25 21.020 518 2.02
1997 2,110 21.312 44,963 1.93 - - - -
1996 2,164 19.375 41,921 1.94 - - - -
1995 2,076 17.252 35,808 1.96 - - - -
FRANKLIN INCOME SECURITIES FUND
September 30, 2000 1,613 27.959 45,109 1.90 46 27.667 1,256 1.99
December 31,
1999 2,248 24.323 54,683 1.90 56 24.084 1,318 1.99
1998 3,263 25.122 81,970 1.89 14 24.898 346 1.98
1997 3,991 25.065 100,025 1.90 - - - -
1996 4,519 21.708 98,109 1.90 - - - -
1995 4,567 19.785 90,364 1.91 - - - -
FRANKLIN LARGE CAP GROWTH SECURITIES FUND
September 30, 2000 1,285 23.422 30,068 2.17 133 23.329 3,096 2.26
December 31,
1999 1,325 20.218 26,784 2.17 73 20.152 1,473 2.26
1998 1,016 15.574 15,825 2.17 17 15.537 267 2.26
1997 622 13.130 8,167 2.17 - - - -
19962 225 11.254 2,529 2.17+ - - - -
FRANKLIN MONEY MARKET FUND
September 30, 2000 1,218 15.346 18,694 1.93 37 15.188 568 2.02
December 31,
1999 1,593 14.860 23,673 1.93 103 14.717 1,519 2.02
1998 2,168 14.386 31,188 1.85 12 14.260 166 1.94
1997 2,155 13.865 29,881 1.85 - - - -
1996 2,433 13.359 32,508 1.83 - - - -
1995 2,218 12.883 28,571 1.80 - - - -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
FRANKLIN NATURAL RESOURCES SECURITIES FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 235 $14.010 $3,302 2.06% 15 $13.864 $200 2.15%
December 31,
1999 268 11.092 2,983 2.06 12 10.983 132 2.15
1998 415 8.505 3,536 2.04 7 8.430 56 2.13
1997 458 11.559 5,299 2.09 - - - -
1996 566 14.467 8,189 2.05 - - - -
1995 516 14.109 7,278 2.06 - - - -
FRANKLIN REAL ESTATE FUND
September 30, 2000 381 26.868 10,199 1.98 4 26.587 123 2.07
December 31,
1999 466 21.386 9,946 1.98 4 21.176 104 2.07
1998 708 23.107 16,340 1.94 1 22.901 35 2.03
1997 942 28.169 26,532 1.94 - - - -
1996 859 23.668 20,335 1.97 - - - -
1995 794 18.073 14,344 1.99 - - - -
FRANKLIN RISING DIVIDENDS SECURITIES FUND
September 30, 2000 1,572 19.675 30,940 2.15 86 19.523 1,667 2.24
December 31,
1999 2,207 18.846 41,590 2.15 73 18.712 1,353 2.24
1998 3,176 21.165 67,223 2.12 17 21.034 346 2.21
1997 3,489 20.074 70,041 2.14 - - - -
1996 3,394 15.303 51,934 2.16 - - - -
1995 3,182 12.498 39,770 2.18 - - - -
FRANKLIN S&P 500 INDEX FUND
September 30, 2000 204 10.285 2,089 1.95 28 10.277 287 2.04
December 31,
19991 47 10.467 486 1.95+ - - - 2.04+
FRANKLIN SMALL CAP FUND
September 30, 2000 782 30.095 23,497 2.17 54 29.962 1,565 2.26
December 31,
1999 783 28.353 22,163 2.17 28 28.247 773 2.26
1998 1,012 14.600 14,771 2.17 9 14.558 131 2.26
1997 938 14.952 14,022 2.17 - - - -
19962 416 12.913 5,369 2.17+ - - - -
FRANKLIN TECHNOLOGY SECURITIES FUND
September 30, 2000 35 12.088 427 2.33+ 4 12.084 50 2.42+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATION NET ASSETS TO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE (IN THOUSANDS) NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
FRANKLIN U.S. GOVERNMENT FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 2,139 $19.678 $42,057 1.91% $65 $19.474 $1,253 2.00%
December 31,
1999 2,761 18.574 51,251 1.91 125 18.394 2,289 2.00
1998 3,787 19.014 71,990 1.90 28 18.847 535 1.99
1997 4,844 17.947 86,937 1.90 - - - -
1996 6,017 16.650 100,185 1.91 - - - -
1995 5,089 16.298 82,935 1.92 - - - -
FRANKLIN VALUE SECURITIES FUND
September 30, 2000 46 8.819 398 2.21% 51 8.799 429 2.30
December 31,
1999 35 7.736 261 2.21 54 7.724 406 2.30
19983 19 7.717 143 2.52+ 22 7.713 167 2.61+
FRANKLIN ZERO COUPON FUND - 2000
September 30, 2000 384 21.694 8,291 2.05 12 21.469 258 2.14
December 31,
1999 519 21.023 10,887 2.05 14 20.819 293 2.14
1998 723 20.684 14,941 1.80 2 20.502 51 1.89
1997 1,087 19.512 21,204 1.80 - - - -
1996 1,358 18.475 25,085 1.80 - - - -
1995 1,416 18.294 25,910 1.80 - - - -
FRANKLIN ZERO COUPON FUND - 2005
September 30, 2000 211 24.497 5,187 2.05 4 24.246 93 2.14
December 31,
1999 259 23.205 6,008 2.05 4 22.983 86 2.14
1998 349 25.003 8,739 1.80 2 24.786 50 1.89
1997 345 22.532 7,772 1.80 - - - -
1996 428 20.517 8,777 1.80 - - - -
1995 456 20.914 9,531 1.80 - - - -
FRANKLIN ZERO COUPON FUND - 2010
September 30, 2000 141 26.048 3,672 2.05 7 25.777 194 2.14
December 31,
1999 197 24.164 4,745 2.05 7 23.929 181 2.14
1998 272 27.920 7,588 1.80 3 27.674 93 1.89
1997 292 24.740 7,220 1.80 - - - -
1996 348 21.522 7,492 1.80 - - - -
1995 371 22.431 8,329 1.80 - - - -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
MUTUAL DISCOVERY SECURITIES FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 715 $14.717 $10,498 2.41% 43 $14.666 $620 2.50%
December 31,
1999 810 13.701 11,073 2.41 38 13.662 506 2.50
1998 1,127 11.226 12,646 2.40 17 11.205 186 2.49
1997 924 11.983 11,070 2.46 - - - -
19964 27 10.180 278 2.77+ - - - -
MUTUAL SHARES SECURITIES FUND
September 30, 2000 1,415 14.120 19,979 2.19 174 14.070 2,437 2.28
December 31,
1999 1,879 13.237 24,866 2.19 144 13.199 1,894 2.28
1998 2,264 11.837 26,789 2.17 38 11.814 447 2.26
1997 1,823 11.993 21,858 2.20 - - - -
19964 43 10.330 442 2.40+ - - - -
TEMPLETON ASSET STRATEGY FUND
September 30, 2000 179 13.825 2,472 2.22 4 13.757 57 2.31
December 31,
1999 228 14.408 3,294 2.22 4 14.347 57 2.31
1998 318 13.589 4,317 2.24 1 13.543 16 2.33
1997 424 13.786 5,850 2.34 - - - -
1996 300 12.514 3,759 2.26 - - - -
19955 36 10.591 379 2.30+ - - - -
TEMPLETON DEVELOPING MARKETS SECURITIES FUND
September 30, 2000 455 9.199 4,185 2.79 20 9.145 191 2.88
December 31,
1999 615 12.188 7,494 2.79 10 12.125 135 2.88
1998 749 7.993 5,983 2.81 5 7.958 45 2.90
1997 1,160 10.340 11,992 2.82 - - - -
1996 1,042 11.487 11,970 2.89 - - - -
1995 757 9.582 7,254 2.81 - - - -
TEMPLETON GLOBAL INCOME SECURITIES FUND
September 30, 2000 403 16.055 6,476 2.05 8 15.887 134 2.14
December 31,
1999 542 16.635 9,013 2.05 6 16.472 110 2.14
1998 787 17.905 14,094 2.03 2 17.746 45 2.12
1997 1,072 16.957 18,177 2.02 - - - -
1996 1,354 16.781 22,719 2.01 - - - -
1995 1,472 15.522 22,851 2.04 - - - -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PREFERRED LIFE VARIABLE ACCOUNT C
OF PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements (CONTINUED)
September 30, 2000 (unaudited)
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
TEMPLETON GROWTH SECURITIES FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 1,423 $18.543 $26,395 2.28% 107 $18.434 $1,994 2.37%
December 31,
1999 1,859 19.466 36,188 2.28 91 19.364 1,791 2.37
1998 2,239 16.309 36,512 2.28 10 16.238 174 2.37
1997 2,594 15.176 39,364 2.28 - - - -
1996 2,146 13.560 29,103 2.33 - - - -
1995 1,416 11.339 16,061 2.37 - - - -
TEMPLETON INTERNATIONAL SECURITIES FUND
September 30, 2000 1,626 21.303 34,643 2.30 28 21.138 574 2.39
December 31,
1999 2,034 23.022 46,821 2.30 16 22.858 343 2.39
1998 2,938 18.437 54,177 2.28 8 18.322 143 2.37
1997 4,063 17.711 71,965 2.29 - - - -
1996 4,375 16.081 70,362 2.29 - - - -
1995 4,073 13.263 54,018 2.32 - - - -
TEMPLETON INTERNATIONAL SMALLER COMPANIES FUND
September 30, 2000 79 11.434 909 2.51 6 11.389 84 2.60
December 31,
1999 101 11.441 1,155 2.51 3 11.403 47 2.60
1998 114 9.364 1,065 2.50 3 9.342 34 2.59
1997 173 10.825 1,875 2.46 - - - -
19962 65 11.145 722 2.18+ - - - -
TEMPLETON PACIFIC GROWTH SECURITIES FUND
September 30, 2000 498 8.628 4,288 2.48 9 8.561 71 2.57
December 31,
1999 659 10.915 7,191 2.48 8 10.838 82 2.57
1998 821 8.078 6,633 2.50 6 8.028 46 2.59
1997 1,251 9.431 11,793 2.43 - - - -
1996 1,751 14.932 26,148 2.39 - - - -
1995 1,812 13.630 24,693 2.41 - - - -
USALLIANZ VIP DIVERSIFIED ASSETS FUND
September 30, 2000 11 10.446 114 2.4 2 10.437 23 2.49
December 31,
19991 - 10.170 2 2.40+ - - - 2.49+
USALLIANZ VIP FIXED INCOME FUND
September 30, 2000 11 10.334 116 2.15 2 10.325 21 2.24
December 31,
19991 - - - 2.15+ - - - 2.24+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT A
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (CONTINUED)
December 31, 1998
5. UNIT VALUES (CONTINUED)
VALUEMARK II VALUEMARK IV
---------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF
ACCUMULATION EXPENSES ACCUMULATION EXPENSES
UNITS OUTSTANDINGACCUMULATIONNET ASSETSTO AVERAGE UNITS OUTSTANDINGACCUMULATIONNET ASSETS TO AVERAGE
(IN THOUSANDS)UNIT VALUE(IN THOUSANDS)NET ASSETS* (IN THOUSANDS)UNIT VALUE(IN THOUSANDS) NET ASSETS*
---------------------------------------------------------------------------------------------------------------------------
USALLIANZ VIP GROWTH FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 2000 13 $10.612 $145 2.30% - $10.604 $7 2.39%
December 31,
19991 - - - 2.30+ - - - 2.39+
<FN>
* For the year ended December 31, including the effect of the expenses of the underlying funds.
+ Annualized.
1 Period from November 12, 1999 (fund commencement) to December 31, 1999.
2 Period from June 10, 1996 (fund commencement) to December 31, 1996.
3 Period from August 17, 1998 (fund commencement) to December 31, 1998.
4 Period from December 2, 1996 (fund commencement) to December 31, 1996.
5 Period from August 4, 1995 (fund commencement) to December 31, 1995.
6 Period from May 1, 2000 (fund commencement) to September 30, 2000.
</FN>
</TABLE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
a. Financial Statements
The following financial statements of the Company are included in Part
B hereof.
1. Independent Auditors' Report.
2. Consolidated Balance Sheets as of December 31, 1999 and 1998.
3. Consolidated Statements of Income for the years ended December
31, 1999, 1998 and 1997.
4. Consolidated Statements of Stockholder's Equity for the years
ended December 31, 1999, 1998 and 1997.
5. Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997.
6. Notes to Consolidated Financial Statements - December 31, 1999,
1998 and 1997.
The following financial statements of the Variable Account are
included in Part B hereof.
1. Statements of Assets and Liabilities as of September 30, 2000
(unaudited).
2. Statements of Operations for the period ended September 30, 2000
(unaudited).
3. Statements of Changes in Net Assets for the period ended September
30, 2000 (unaudited).
4. Notes to Financial Statements - September 30, 2000 (unaudited).
5. Independent Auditors' Report.
6. Statements of Assets and Liabilities as of December 31, 1999.
7. Statements of Operations for the year ended December 31, 1999.
8. Statements of Changes in Net Assets for the years ended
December 31, 1999 and 1998.
9. Notes to Financial Statements - December 31, 1999.
b. Exhibits
1. Resolution of Board of Directors of the Company authorizing the
establishment of the Variable Account (1)
2. Not Applicable
3.a. Principal Underwriter Agreement (2)
3.b. General Agency Agreement (5)
4. Individual Variable Annuity Contract (1)
4a. Waiver of Contingent Deferred Sales Charge Endorsement (1)
4b. Enhanced Death Benefit Endorsement (1)
5. Application for Individual Variable Annuity Contract (1)
6. (i) Copy of Articles of Incorporation of the Company (1)
(ii) Copy of the Bylaws of the Company (3)
7. Not Applicable
8.a. Form of Fund Participation Agreement between Franklin Valuemark
Funds and North American Life and Casualty Company.(1)
8.b. Form of Fund Participation Agreement between AIM Variable
Insurance Funds, Inc., Preferred Life Insurance Company of New York
and NALAC Financial Plans LLC.(4)
8.c. Form of Fund Participation Agreement between Alger American Fund,
Preferred Life Insurance Company of New York and Fred Alger and
Company.(4)
8.d. Form of Fund Participation Agreement between USAllianz Variable
Insurance Products Trust, Preferred Life Insurance Company of New
York and BISYS Fund Services Limited Partnership.(4)
8.e. Form of Fund Participation Agreement between Davis Variable Account
Fund, Inc, Davis Distributors, LLC and Preferred Life Insurance
Company of New York. (5)
8.f. Form of Fund Participation Agreement between Van Kampen Life
Investment Trust, Van Kampen Asset Management, Inc., and Preferred
Life Insurance Company of New York. (5)
8.g. Form of Fund Participation Agreement between Preferred Life
Insurance Company of New York and J.P. Morgan Series Trust II. (5)
8.h. Form of Fund Participation Agreement between Oppenheimer Variable
Account Funds, Oppenheimer Funds, Inc. and Preferred Life Insurance
Company of New York. (5)
8.i. Form of Fund Participation Agreement between Preferred Life
Insurance Company of New York, PIMCO Variable Insurance Trust, and
PIMCO Funds Distributors, LLC. (5)
8.j. Form of Fund Participation Agreement between Seligman Portfolios,
Inc. and Preferred Life Insurance Company of New York. (5)
8.k. Form of Fund Participation Agreement between Preferred Life
Insurance Company of New York, The Prudential Series Fund, Inc., The
Prudential Insurance Company of America, and Prudential Investment
Management Services, LLC.
9. Opinion and Consent of Counsel
10. Independent Auditors' Consent
11. Not Applicable
12. Not Applicable
13. Calculation of Performance Information
14. Company Organizational Chart (5)
27. Not Applicable
(1) Incorporated by reference to Registrant's N-4 filing (File Nos.
333-19699 and 811-05716) as electronically filed on January 13, 1997.
(2) Incorporated by reference to Registrant's Pre-Effective Amendment No. 1
to Form N-4 electronically filed on May 12, 1997.
(3) Incorporated by reference to Registrant's Pre-Effective Amendment No. 2
to Form N-4 electronically filed on May 29, 1997.
(4) Incorporated by reference to Registrant's N-4 filing (File Nos.333-19699
and 811-05716) as electronically filed on November 12, 1999.
(5) Incorporated by reference to Registrant's N-4 filing (File Nos.333-19699
and 811-05716) as electronically filed on April 28, 2000.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
The following are the Officers and Directors of the Company:
<TABLE>
<CAPTION>
<S> <C>
Name and Principal Positions and Offices
Business Address with Depositor
----------------- ------------------------------
<S> <C>
Edward J. Bonach Chairman of the Board, President
1750 Hennepin Avenue & Chief Financial Officer
Minneapolis, MN 55403
Dennis Marion Director
500 Valley Road
Wayne, NJ 07470
Robert S. James Director
1750 Hennepin Avenue
Minneapolis, MN 55403
Eugene T. Wilkinson Director
14 Commerce Drive
Cranford, NJ 07016
Eugene Long Vice President of Operations
152 W. 57th Street and Director
18th Floor
New York, NY 10019
Reinhard W. Obermueller Director
560 Lexington Ave
New York, NY 10022
Stephen R. Herbert Director
900 Third Avenue
New York, NY 10022
Jack F. Rockett Director
140 East 95th Street, Ste 6A
New York, NY 10129
Kevin Walker Treasurer
300 S Hwy 169
Minneapolis, MN 55426
Stephen Blaske Actuary
1750 Hennepin Ave
Minneapolis, MN 55403
Margery G. Hughes Director
1750 Hennepin Ave
Mpls, MN 55403
Christopher H. Pinkerton Director
1750 Hennepin Ave
Mpls, MN 55403
Mark Zesbaugh Director
1750 Hennepin Ave
Mpls, MN 55403
Charles Kavitsky Director
300 S Hwy 169
Mpls, MN 55426
Suzanne J. Pepin Secretary and Director
1750 Hennepin Ave
Mpls, MN 55403
</TABLE>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR
OR REGISTRANT
The Insurance Company organizational chart was filed as Exhibit 14 in
Post-Effective Amendment Number 8 to Registrant's form N-4 and is incorporated
herein by reference.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of September 30, 2000 there were 213 qualified Contract Owners and 286
non-qualified Contract Owners with Contracts in the Separate Account.
ITEM 28. INDEMNIFICATION
The Bylaws of the Company provide that:
Each person (and the heirs, executors, and administrators of such person) made
or threatened to be made a party to any action, civil or criminal, by reason of
being or having been a Director, officer, or employee of the corporation (or by
reason of serving any other organization at the request of the corporation)
shall be indemnified to the extent permitted by the laws of the State of New
York, and in the manner prescribed therein.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted for directors and officers or controlling persons of the
Company pursuant to the foregoing, or otherwise, the Company 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, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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, the
Company 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 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 UNDERWRITERS
a. USAllianz Investor Services, LLC (formerly NALAC Financial Plans,
LLC) is the principal underwriter for the Contracts. It also is the
principal underwriter for:
Allianz Life Variable Account A
Allianz Life Variable Account B
b. The following are the officers(managers) and directors(Board of
Governors) of USAllianz Investor Services, LLC:
<TABLE>
<CAPTION>
Name & Principal Positions and Offices
Business Address with Underwriter
---------------------- ----------------------
<S> <C>
Christopher H.Pinkerton Chairman, Chief Executive Officer, President,
1750 Hennepin Avenue Chief Manager and Director
Minneapolis, MN 55403
Thomas B. Clifford Vice President and Director
1750 Hennepin Avenue
Minneapolis, MN 55403
Catherine L. Mielke Secretary & Compliance Officer
1750 Hennepin Avenue
Minneapolis, MN 55403
Michael M. Ahles Chief Financial Officer, Sr. Vice President & Treasurer
1750 Hennepin Avenue
Minneapolis, MN 55403
Lawrance C. Skibo Executive Vice President
1750 Hennepin Avenue
Minneapolis, MN 55403
Catherine Q. Farley Sr. Vice President & Chief Administrative Officer
1750 Hennepin Avenue
Minneapolis, MN 55403
Cynthia M. Robeck Assistant Vice President
1750 Hennepin Avenue
Minneapolis, MN 55403
Robert S. James Director
1750 Hennepin Avenue
Minneapolis, MN 55403
</TABLE>
c. Not Applicable
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Thomas Clifford, whose address is 1750 Hennepin Avenue, Minneapolis, Minnesota,
55403 and Delaware Valley Financial Services, USAllianz Service Center, 300
Berwyn Park, Berwyn, Pennsylvania 19312, maintain physical possession of the
accounts, books or documents of the Variable Account required to be maintained
by Section 31(a) of the Investment Company Act of 1940, as amended, and the
rules promulgated thereunder.
ITEM 31. MANAGEMENT SERVICES
Not Applicable
ITEM 32. UNDERTAKINGS
a. Registrant hereby undertakes to file a post-effective amendment to this
registration statement as frequently as is necessary to ensure that the audited
financial statements in the registration statement are never more than sixteen
(16) months old for so long as payment under the variable annuity contracts may
be accepted.
b. Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
postcard or similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information.
c. Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form promptly upon written or oral request.
d. Preferred Life Insurance Company of New York ("Company") hereby
represents that the fees and charges deducted under the Contract described in
the Prospectus, in the aggregate, are reasonable in relation to the services
rendered, the expenses to be incurred and the risks assumed by the Company.
REPRESENTATIONS
The Company hereby represents that it is relying upon a No-Action Letter issued
to the American Council of Life Insurance, dated November 28, 1988 (Commission
ref. IP-6-88), and that the following provisions have been complied with:
1. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in each registration statement, including the
prospectus, used in connection with the offer of the contract;
2. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in any sales literature used in connection with
the offer of the contract;
3. Instruct sales representatives who solicit participants to purchase
the contract specifically to bring the redemption restrictions imposed by
Section 403(b)(11) to the attention of the potential participants;
4. Obtain from each plan participant who purchases a Section 403(b) annuity
contract, prior to or at the time of such purchase, a signed statement
acknowledging the participant's understanding of (1) the restrictions on
redemption imposed by Section 403(b)(11), and (2) other investment alternatives
available under the employer's Section 403(b) arrangement to which the
participant may elect to transfer his contract value.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, as amended, the Registrant certifies that it meets the requirements of
Securities Act Rule 485(b) for effectiveness of this Registration Statement and
has caused this Registration Statement to be signed on its behalf in the City of
Minneapolis and State of Minnesota, on this 13 day of December, 2000.
<TABLE>
<CAPTION>
<S> <C>
PREFERRED LIFE VARIABLE
ACCOUNT C
(Registrant)
By: PREFERRED LIFE INSURANCE
COMPANY OF NEW YORK
(Depositor)
By: /s/ Suzanne J. Pepin
-------------------------
PREFERRED LIFE INSURANCE
COMPANY OF NEW YORK
(Depositor)
By: /s/ Suzanne J. Pepin
-------------------------
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature and Title
<TABLE>
<CAPTION>
<S> <C> <C>
Edward J. Bonach* Chairman of the Board
Edward J. Bonach President & Chief Financial 12-13-00
Officer
Robert S. James* Director
Robert S. James 12-13-00
Dennis Marion* Director
Dennis Marion 12-13-00
Eugene T. Wilkinson* Director
Eugene T. Wilkinson 12-13-00
Eugene Long* Director
Eugene Long 12-13-00
Reinhard W. Obermueller*Director
Reinhard W. Obermueller 12-13-00
Stephen R. Herbert* Director
Stephen R. Herbert 12-13-00
Jack F. Rockett* Director
Jack F. Rockett 12-13-00
Margery Hughes* Director
Margery Hughes 12-13-00
Christopher Pinkerton* Director
Christopher Pinkerton 12-13-00
Mark Zesbaugh* Director
Mark Zesbaugh 12-13-00
Charles Kavitsky* Director
Charles Kavitsky 12-13-00
</TABLE>
* By /S/ Suzanne J. Pepin
--------------------------
Attorney-in-Fact
Secretary and Director
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Edward J. Bonach, Chairman of the
Board, President and Chief Financial Officer of Preferred Life Insurance Company
of New York (Preferred Life), a corporation duly organized under the laws of the
state of New York, do hereby appoint Suzanne J. Pepin as my attorney and agent,
for me, and in my name as Chairman of the Board, President and Chief Financial
Officer of Preferred Life on behalf of Preferred Life, with full power to
execute, deliver and file with the Securities and Exchange Commission all
documents required for registration of a security under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 25th day of April 2000.
WITNESS:
/s/ Melissa O'Donnell /s/ Edward J. Bonach
----------------------------- ---------------------------------
Edward J. Bonach
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Robert S. James, a Director of
Preferred Life Insurance Company of New York (Preferred Life), a corporation
duly organized under the laws of the state of New York, do hereby appoint Edward
J. Bonach and Suzanne J. Pepin, each individually as my attorney and agent, for
me, and in my name as a Director of Preferred Life on behalf of Preferred Life,
with full power to execute, deliver and file with the Securities and Exchange
Commission all documents required for registration of a security under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and to do and perform each and every act that said attorney may deem
necessary or advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 12th day of April 2000.
WITNESS:
/s/ Michael T. Westermeyer /s/ Robert S. James
----------------------------- ---------------------------------
Robert S. James
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Dennis Marion, a Director of
Preferred Life Insurance Company of New York (Preferred Life), a corporation
duly organized under the laws of the state of New York, do hereby appoint Edward
J. Bonach and Suzanne J. Pepin, each individually as my attorney and agent, for
me, and in my name as a Director of Preferred Life on behalf of Preferred Life,
with full power to execute, deliver and file with the Securities and Exchange
Commission all documents required for registration of a security under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and to do and perform each and every act that said attorney may deem
necessary or advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 12th day of April 2000.
WITNESS:
/s/ Michael T. Westermeyer /s/ Dennis J. Marion
----------------------------- ---------------------------------
Dennis Marion
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Eugene T. Wilkinson, a Director of
Preferred Life Insurance Company of New York (Preferred Life), a corporation
duly organized under the laws of the state of New York, do hereby appoint Edward
J. Bonach and Suzanne J. Pepin, each individually as my attorney and agent, for
me, and in my name as a Director of Preferred Life on behalf of Preferred Life,
with full power to execute, deliver and file with the Securities and Exchange
Commission all documents required for registration of a security under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and to do and perform each and every act that said attorney may deem
necessary or advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 12th day of April 2000.
WITNESS:
/s/ Michael T. Westermeyer /s/ Eugene T. Wilkinson
----------------------------- ---------------------------------
Eugene T. Wilkinson
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Eugene Long, a Director of
Preferred Life Insurance Company of New York (Preferred Life), a corporation
duly organized under the laws of the state of New York, do hereby appoint Edward
J. Bonach and Suzanne J. Pepin, each individually as my attorney and agent, for
me, and in my name as a Director of Preferred Life on behalf of Preferred Life,
with full power to execute, deliver and file with the Securities and Exchange
Commission all documents required for registration of a security under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and to do and perform each and every act that said attorney may deem
necessary or advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 12th day of April 2000.
WITNESS:
/s/ Michael T. Westermeyer /s/ Eugene Long
----------------------------- ---------------------------------
Eugene Long
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Reinhard Obermueller, a Director
of Preferred Life Insurance Company of New York (Preferred Life), a corporation
duly organized under the laws of the state of New York, do hereby appoint Edward
J. Bonach and Suzanne J. Pepin, each individually as my attorney and agent, for
me, and in my name as a Director of Preferred Life on behalf of Preferred Life,
with full power to execute, deliver and file with the Securities and Exchange
Commission all documents required for registration of a security under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and to do and perform each and every act that said attorney may deem
necessary or advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 12th day of April 2000.
WITNESS:
/s/ Michael T. Westermeyer /s/ Reinhard W. Obermueller
----------------------------- ---------------------------------
Reinhard W. Obermueller
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Stephen R. Herbert, a Director of
Preferred Life Insurance Company of New York (Preferred Life), a corporation
duly organized under the laws of the state of New York, do hereby appoint Edward
J. Bonach and Suzanne J. Pepin, each individually as my attorney and agent, for
me, and in my name as a Director of Preferred Life on behalf of Preferred Life,
with full power to execute, deliver and file with the Securities and Exchange
Commission all documents required for registration of a security under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and to do and perform each and every act that said attorney may deem
necessary or advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 12th day of April 2000.
WITNESS:
/s/ Michael T. Westermeyer /s/ Stephen R. Herbert
----------------------------- ---------------------------------
Stephen R. Herbert
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Jack F. Rockett, a Director of
Preferred Life Insurance Company of New York (Preferred Life), a corporation
duly organized under the laws of the state of New York, do hereby appoint Edward
J. Bonach and Suzanne J. Pepin, each individually as my attorney and agent, for
me, and in my name as a Director of Preferred Life on behalf of Preferred Life,
with full power to execute, deliver and file with the Securities and Exchange
Commission all documents required for registration of a security under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and to do and perform each and every act that said attorney may deem
necessary or advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 12th day of April 2000.
WITNESS:
/s/ Michael T. Westermeyer /s/ Jack F. Rockett
----------------------------- ---------------------------------
Jack F. Rockett
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Margery Hughes, a Director of
Preferred Life Insurance Company of New York (Preferred Life), a corporation
duly organized under the laws of the state of New York, do hereby appoint Edward
J. Bonach and Suzanne J. Pepin, each individually as my attorney and agent, for
me, and in my name as a Director of Preferred Life on behalf of Preferred Life,
with full power to execute, deliver and file with the Securities and Exchange
Commission all documents required for registration of a security under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and to do and perform each and every act that said attorney may deem
necessary or advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 18th day of April 2000.
WITNESS:
/s/ Melissa O'Donnell /s/ Margery Hughes
----------------------------- ---------------------------------
Margery Hughes
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Christopher Pinkerton, a Director
of Preferred Life Insurance Company of New York (Preferred Life), a corporation
duly organized under the laws of the state of New York, do hereby appoint Edward
J. Bonach and Suzanne J. Pepin, each individually as my attorney and agent, for
me, and in my name as a Director of Preferred Life on behalf of Preferred Life,
with full power to execute, deliver and file with the Securities and Exchange
Commission all documents required for registration of a security under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and to do and perform each and every act that said attorney may deem
necessary or advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 12th day of April 2000.
WITNESS:
/s/ Michael T. Westermeyer /s/ Christopher Pinkerton
----------------------------- ---------------------------------
Christopher Pinkerton
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Mark Zesbaugh, a Director of
Preferred Life Insurance Company of New York (Preferred Life), a corporation
duly organized under the laws of the state of New York, do hereby appoint Edward
J. Bonach and Suzanne J. Pepin, each individually as my attorney and agent, for
me, and in my name as a Director of Preferred Life on behalf of Preferred Life,
with full power to execute, deliver and file with the Securities and Exchange
Commission all documents required for registration of a security under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and to do and perform each and every act that said attorney may deem
necessary or advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 12th day of April 2000.
WITNESS:
/s/ Michael T. Westermeyer /s/ Mark Zesbaugh
----------------------------- ---------------------------------
Mark Zesbaugh
LIMITED POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that I, Charles Kavitsky, a Director of
Preferred Life Insurance Company of New York (Preferred Life), a corporation
duly organized under the laws of the state of New York, do hereby appoint Edward
J. Bonach and Suzanne J. Pepin, each individually as my attorney and agent, for
me, and in my name as a Director of Preferred Life on behalf of Preferred Life,
with full power to execute, deliver and file with the Securities and Exchange
Commission all documents required for registration of a security under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and to do and perform each and every act that said attorney may deem
necessary or advisable to comply with the intent of aforesaid Acts.
WITNESS my hand and seal this 12th day of April 2000.
WITNESS:
/s/ Michael T. Westermeyer /s/ Charles Kavitsky
----------------------------- ---------------------------------
Charles Kavitsky
EXHIBITS
TO
POST-EFFECTIVE AMENDMENT NO. 9
TO
FORM N-4
(FILE NOS. 333-19699 AND 811-05716)
PREFERRED LIFE VARIABLE ACCOUNT C
PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
INDEX TO EXHIBITS
EXHIBIT
99.B8e Form of Fund Participation Agreement-Prudential
99.B9 Opinion and Consent of Counsel
99.B10 Independent Auditors' Consent
99.B13 Calculation of Performance Data
