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Registration Number __________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
AMERICAN NATIONAL VARIABLE LIFE SEPARATE ACCOUNT
(Exact Name of Registrant)
AMERICAN NATIONAL INSURANCE COMPANY
(Exact Name of Depositor)
One Moody Plaza
Galveston, Texas 77550
(Complete Address of Depositor's Principal Executive Offices)
Rex D. Hemme Jerry L. Adams
Vice President, Actuary Greer, Herz & Adams, L.L.P.
American National With copy to: One Moody Plaza, 18th Floor
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Insurance Company Galveston, Texas 77550
One Moody Plaza
Galveston, Texas 77550
(Name and Address of Agent for Service)
________________________________________________________________________________
Approximate date of proposed public offering: As soon as practicable after the
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effective date of this Registration Statement.
________________________________________________________________________________
Securities being offered: Variable Universal Life Insurance Policies.
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________________________________________________________________________________
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Wealthquest Variable Universal Life
Issued by American National Insurance Company
Home Office One Moody Plaza Galveston, Texas 77550
Prospectus (date) 1-800-306-2959
This prospectus describes a variable universal life insurance contract offered
by American National Insurance Company. The contract provides life insurance
protection with flexibility to vary the amount and timing of premium payments
and the level of death benefit. The death benefits available under your contract
can increase if the value of the contract increases.
The value of your contract will vary with the investment performance of
investment options you choose. You can choose to have your net premium payments
(premium payments less applicable charges) allocated to subaccounts of the
American National Variable Life Separate Account and to our general account. The
portfolios currently available for purchase by the subaccounts are:
American National Fund
. Money Market Portfolio
. Growth Portfolio
. Balanced Portfolio
. Equity Income Portfolio
. High Yield Bond Portfolio
. International Stock Portfolio
. Small-Cap/Mid-Cap Portfolio
. Government Bond Portfolio
Fidelity Funds
. Contrafund Portfolio
. Asset Manager: Growth Portfolio
. Asset Manager Portfolio
. Index 500 Portfolio
. Growth Opportunities Portfolio
T. Rowe Price Funds
. Equity Income Portfolio
. Mid-Cap Growth Portfolio
. International Stock Portfolio
. Limited-Term Bond Portfolio
MFS Fund
. Capital Opportunities Portfolio
. Emerging Growth Portfolio
. Research Portfolio
. Growth With Income Portfolio
Federated Fund
. Utility Fund II Portfolio
. Growth Strategies Portfolio
. International Small Company Fund II Portfolio
. High Income Bond Portfolio
. Balanced Portfolio
Alger American Fund
. Small Capitalization Portfolio
. Growth Portfolio
. MidCap Growth Portfolio
. Leveraged AllCap Portfolio
. Balanced Portfolio
. Income & Growth Portfolio
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The Securities and Exchange Commission has not approved or disapproved the
contract or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
The contract is not a deposit or obligation of, or guaranteed or endorsed by,
any bank, nor is it federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency. The contract
involves investment risks, including possible loss of principal. For a full
description of the American National Fund, Fidelity Funds, T. Rowe Price Funds,
MFS Fund, Federated Fund, and Alger American Fund, their investment policies and
restrictions, risks, charges and expenses and other aspects of their operation,
see their prospectuses. Please read this prospectus and keep it for future
reference.
Form
3
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Definitions.....................................................
Summary.........................................................
The Contract...................................................
Issuance of a Contract.........................................
Allocation of Premiums.........................................
Contract Benefits and Rights...................................
Charges........................................................
Taxes..........................................................
Contract Benefits...............................................
Purposes of the Contract.......................................
Death Benefit Proceeds.........................................
Death Benefit Options..........................................
Guaranteed Coverage Benefit....................................
Duration of the Contract.......................................
Accumulation Value.............................................
Payment of Contract Benefits...................................
Contract Rights.................................................
Loan Benefits..................................................
Surrenders.....................................................
Transfers......................................................
Refund Privilege...............................................
Dollar Cost Averaging..........................................
Rebalancing....................................................
Payment and Allocation of Premiums..............................
Issuance of a Contract.........................................
Premiums.......................................................
Premium Flexibility............................................
Allocation of Premiums and Accumulation Value..................
Grace Period and Reinstatement.................................
Charges and Deductions..........................................
Premium Charges................................................
Charges from Accumulation Value................................
Monthly Deduction.............................................
Cost of Insurance.............................................
Surrender Charge..............................................
Transfer Charge...............................................
</TABLE>
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<TABLE>
<S> <C>
Partial Surrender Charge.....................................
Daily Charges Against the Separate Account...................
Fees and Expenses Incurred by Eligible Portfolios............
Taxes........................................................
Exceptions to Charges.........................................
American National Insurance Company, the Separate..............
Account, the Funds and the Fixed Account......................
American National Insurance Company...........................
The Separate Account..........................................
The Funds.....................................................
Fixed Account.................................................
Federal Income Tax Considerations..............................
Introduction..................................................
Tax Status of the Contract....................................
Tax Treatment of Contract Proceeds............................
American National's Income Taxes..............................
Other Information..............................................
Sale of the Contract..........................................
The Contract..................................................
Dividends.....................................................
Legal Matters..................................................
Legal Proceedings..............................................
Registration Statement.........................................
Experts........................................................
Senior Executive Officers and Directors of.....................
American National Insurance Company............................
Appendix.......................................................
Illustrations of Death Benefits,
Accumulation Values and Surrender Values.....................
Financial Statements...........................................
</TABLE>
5
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DEFINITIONS
Accumulation Value - the total amount that a Contract provides for investment at
any time.
Age At Issue - the Insured's age last birthday before the Date of Issue.
Alger American Fund - the Alger American Fund.
American National Fund - American National Investment Accounts, Inc.
Attained Age - Age at Issue plus the number of complete Contract Years.
Beneficiary - The Beneficiary designated in the application or the latest
change, if any filed and recorded with us.
Contract - the variable universal life insurance contract described in this
prospectus.
Contract Debt - the sum of all unpaid loans and accrued interest thereon.
Contract Owner ("you") - the owner of the Contract, as designated in the
application or as subsequently changed. If a Contract has been absolutely
assigned, the assignee is the Contract Owner. A collateral assignee is not the
Contract Owner.
Contract Year - the period from one Contract anniversary date until the next
Contract anniversary date.
Daily Asset Charge - a charge equal to an annual rate of 0.70% of the average
daily Accumulation Value of each subaccount.
Data Page - the pages of the Contract so titled.
Date Of Issue - the Date of Issue of the Contract and any riders to the
Contract.
Death Benefit - the amount of insurance coverage provided under the selected
Death Benefit option.
Death Benefit Proceeds - the proceeds payable upon the Insured's death.
Declared Rate - the interest rate that is credited in the Fixed Account.
Effective Date - the later of the Date of Issue or the date on which:
. the first premium, as shown on the Data Page, has been paid; and
. the Contract has been delivered during the Insured's lifetime and good
health.
Any increase in Specified Amount, addition of a benefit rider, or reinstatement
of coverage will take effect on the Monthly Deduction Date which coincides with
or next follows the date we approve an application for such change or for
reinstatement of the Contract.
Eligible Portfolio - a portfolio that corresponds to a subaccount.
Federated Fund - Federated Insurance Series.
Fidelity Funds - Variable Insurance Products Fund. The Fidelity Fund's
portfolios offered are Service Class II portfolios.
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Fixed Account - a part of our General Account that accumulates interest at a
fixed rate.
General Account - includes all of our assets except assets segregated into
separate accounts.
Guaranteed Coverage Benefit - our agreement to keep the Contract in force if the
Guaranteed Coverage Premium is paid and other Contract provisions are met.
Guaranteed Coverage Premium - a required specified premium paid in advance will
keep the Contract in force so long as other Contract provisions are met.
Insured - the person upon whose life the Contract is issued.
MFS Fund - MFS Variable Insurance Trust
Monthly Deduction - the sum of (1) cost of insurance charge, (2) charge for any
riders, and (3) monthly charge shown on the Data Page.
Monthly Deduction Date - the same date in each succeeding month as the Date of
Issue, except that whenever the Monthly Deduction Date falls on a date other
than a Valuation Date, the Monthly Deduction Date will be deemed to be the next
Valuation Date. The Date of Issue is the first Monthly Deduction Date.
Net Amount At Risk - your Death Benefit minus your Accumulation Value.
Planned Periodic Premiums - scheduled premiums selected by you.
Satisfactory Proof Of Death - submission of the following:
. certified copy of the death certificate;
. a claimant statement;
. the Contract; and
. any other information that we may reasonably require to establish the
validity of the claim.
Specified Amount - the minimum Death Benefit under the Contract. The Specified
Amount is an amount you select in accordance with Contract requirements.
Surrender Value - the Accumulation Value less Contract Debt and surrender
charges.
T. Rowe Price Funds - T. Rowe Price International Series, Inc. and T. Rowe Price
Equity Series, Inc.
Valuation Date - each day the New York Stock Exchange ("NYSE") is open for
regular trading. A redemption, transfer, or purchase can be made only on days
that American National is open. American National will be open each day the
NYSE is open except for the day after Thanksgiving and Christmas Eve.
Valuation Period - the close of business on one Valuation Date to the close of
business on another.
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SUMMARY
The Contract is not available in some states. You should rely only on the
information contained or incorporated by reference in this prospectus. We have
not authorized anyone to provide you with information that is different.
You should read the following summary in conjunction with the detailed
information appearing elsewhere in this prospectus. Unless otherwise indicated,
the description of the Contract assumes that the Contract is in effect and there
is no Contract Debt.
The Contract
The Contract is a flexible premium variable universal life insurance contract.
In certain states, the Contract may be offered as a group contract with
individual ownership represented by certificates. The discussion of Contracts
in this prospectus applies equally to certificates under group contracts.
You do not have a fixed schedule for premium payments. You can establish a
schedule of Planned Periodic Premiums, but you are not required to follow such
schedule. (See "Premium Flexibility," page __.)
The Death Benefit under the Contract may, and the Accumulation Value will,
reflect the investment performance of the investments you choose. (See "Death
Benefits," page __ and "Accumulation Value," page __.) You benefit from any
increase in value and bear the risk that your chosen investment options may
decrease in value. The amount and duration of the life insurance coverage
provided by the Contract is not guaranteed, except under the Guaranteed Coverage
Benefit provision. Further, the Accumulation Value is not guaranteed, except in
the Fixed Account.
Issuance Of A Contract
In order to purchase a Contract, you must submit an application to us. We
review the application to determine whether the Contract can be issued in
accordance with our underwriting standards. Once the underwriting process is
completed, the Date of Issue is designated. You, however, must submit your
initial premium for the Contract to have an Effective Date. Accordingly, the
Date of Issue may be before the Effective Date. If the underwriting process is
not completed within 45 days after you submit your application and initial
premium, we will refund your premium. Your initial premium can be re-submitted
if the underwriting review of the application is later completed.
Allocation Of Premiums
You can allocate premiums to one or more of the subaccounts and to the Fixed
Account. (See "The Separate Account," page __ and "Fixed Account," page __.)
The assets of the various subaccounts are invested in Eligible Portfolios. The
prospectuses or prospectus profiles for the Eligible Portfolios accompany this
prospectus.
Premium payments received before the Date of Issue are held in our General
Account without interest. On the Date of Issue, premiums received on or before
that date are allocated to the subaccount for the American National Money Market
Portfolio.
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Premium payments received within 15 days after the Date of Issue are also
allocated to the American National Money Market Portfolio. After the 15-day
period, premium payments and Accumulation Value are allocated among the Eligible
Portfolios in accordance with your instructions as contained in the application.
The minimum percentage that you may allocate to any one subaccount or to the
Fixed Account is 10% of the premium or $100.
Contract Benefits And Rights
Death Benefit. The Death Benefit is available in two options. (See "Death
Benefit Options," page __.) The Death Benefit Proceeds may be paid in a lump
sum or in accordance with an optional payment plan. (See "Payment of Policy
Benefits," page __.)
Adjustments to Death Benefit. You can adjust the Death Benefit by changing the
Death Benefit option and by increasing or decreasing the Specified Amount.
Changes in the Specified Amount or the Death Benefit option are subject to
certain limitations. (See "Death Benefit Options," page __ and "Change in
Specified Amount," page __.)
Accumulation Value and Surrender Value. The Accumulation Value reflects the
investment performance of the chosen subaccounts, the rate of interest paid on
the Fixed Account, premium paid, partial surrenders, and charges deducted from
the Contract. There is no guaranteed minimum Accumulation Value. You can
withdraw the entire Surrender Value. Subject to certain limitations, you can
also withdraw a portion of the Surrender Value. Partial surrenders reduce both
the Accumulation Value and the Death Benefit payable under the Contract. A
surrender charge will be deducted from the amount paid upon a partial
withdrawal. (See "Partial Surrender Charge," page __ and "Surrenders," page
__.) Surrenders may have tax consequences. (See "Federal Income Tax
Considerations," page __.)
Loans. You can borrow money from us using the Contract as security for the
loan. (See "Loan Benefits," page __.) Loans may have tax consequences. (See
"Federal Income Tax Considerations," page __.)
Free Look Period. You have a free look period in which to examine a Contract
and return it for a refund. The length of the free look period varies among
different states, but generally runs for 10 days after you receive your
Contract. The date you receive your Contract will not necessarily be the date
you submit your premium. (See "Refund Privilege," page __.)
Policy Lapse and Guaranteed Coverage Benefit. We will provide a Guaranteed
Coverage Benefit so long as the Guaranteed Coverage Premium is paid and other
Policy provisions are met. After the Guaranteed Coverage Benefit period, the
Policy will lapse at any time the Surrender Value is insufficient to pay the
Monthly Deductions and the grace period expires without sufficient additional
premium payment. The grace period starts when written notice of lapse is mailed
to your last known address and expires 61 days later. Unless the Guaranteed
Coverage Benefit requirements have been met, lapse can occur even if the Planned
Periodic Premiums are paid. (See "Payment and Allocation of Premiums," page
__.)
Charges
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Charges from Premium Payments. Premium payments will be reduced by a premium
charge not to exceed 6%. The current premium charge is 6% for the first ten
Contract Years. Thereafter, the current premium charge is 4%, but we reserve
the right to increase such premium charge, not to exceed 6%.
Charges from Accumulation Value. Certain Monthly Deductions and Daily Asset
Charges will reduce the Accumulation Value as follows:
[_] On each Monthly Deduction Date by:
. Cost of Insurance Charge. Because the cost of insurance depends upon
several variables, the cost can vary from month to month. We will
determine the monthly cost of insurance charges by multiplying the
applicable cost of insurance rate by the Net Amount at Risk, as of the
Monthly Deduction Date, for each Contract month.
The monthly cost of insurance rate is based on the Insured's sex,
Attained Age, Specified Amount, and underwriting risk class. The rate
may vary if the Insured is a nicotine user or nicotine non-user, if the
Insured is in a preferred or standard risk classification, or if the
Insured is in a substandard risk classification and rated with a tabular
extra rating.
. Charge for the Cost of any Riders.
. Monthly Expense Fee. The monthly expense fee is $7.50.
. Monthly Fee. The monthly fee, which will vary by Age at Issue and risk
class, will be a maximum of $7.50 plus $.14167 per $1,000 of Specified
Amount. The monthly fee is determined when the Contract is issued.
[_] On each Valuation Date, by a Daily Asset Charge not to exceed 0.70%
annually of the average daily Accumulation Value in each subaccount.
Currently, the Daily Asset Charge is 0.70% for the first fifteen Contract
Years. Thereafter, the Daily Asset Charge is 0.35%, but we reserve the
right to increase such Daily Asset Charge, not to exceed 0.70% annually.
(See "Charges and Deductions," page __.)
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Eligible Portfolio Expenses. The values of the units in each subaccount will
reflect the net asset value of shares in the corresponding Eligible Portfolios.
The Eligible Portfolios' expenses reduce the net asset value of those shares.
Eligible Portfolio Annual Expenses
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(as a percentage of average net assets)
<TABLE>
<CAPTION>
Portfolio Management Other Exp. Total Exp. Management Other Exp. Total Exp.
Fees With With With Fees Without Without Without
Reduction Reduction Reduction Reduction Reduction Reduction
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<S> <C> <C> <C> <C> <C> <C>
American National Money Market Portfolio/1/ 0.09% 0.78% 0.87% 0.50% 0.87% 1.37%
American National Growth Portfolio/1/ 0.43% 0.44% 0.87% 0.50% 0.44% 0.94%
American National Balanced Portfolio/1/ 0.26% 0.64% 0.90% 0.50% 0.64% 1.14%
American National Equity Income Portfolio/1/ 0.49% 0.44% 0.93% 0.50% 0.49% 0.99%
American National High Yield Bond Portfolio 0.55% 0.30% 0.85% 0.55% 0.30% 0.85%
American National International Stock Portfolio 0.75% 0.35% 1.10% 0.75% 0.35% 1.10%
American National Small-Cap/Mid-Cap Portfolio 1.25% 0.25% 1.50% 1.25% 0.25% 1.50%
American National Governmental Bond Portfolio 0.50% 0.30% 0.80% 0.50% 0.30% 0.80%
Fidelity Asset Manager Portfolio/2/ 0.53% 0.37% 0.89% 0.53% 0.97% 1.50%
Fidelity Index 500 Portfolio/2/ 0.24% 0.29% 0.53% 0.24% 0.36% 0.60%
Fidelity Contrafund Portfolio/2/ 0.58% 0.37% 0.95% 0.58% 0.67% 1.25%
Fidelity Asset Manager: Growth Portfolio/2/ 0.58% 0.40% 0.98% 0.58% 0.67% 1.25%
Fidelity Growth Opportunities Portfolio/2/ 0.58% 0.38% 0.96% 0.58% 1.17% 1.75%
T. Rowe Price Equity Income Portfolio/3/ 0.85% 0.00% 0.85% 0.85% 0.00% 0.85%
T. Rowe Price Mid-Cap Growth Portfolio/3/ 0.85% 0.00% 0.85% 0.85% 0.00% 0.85%
T. Rowe Price International Stock Portfolio/3/ 1.05% 0.00% 1.05% 1.05% 0.00% 1.05%
T. Rowe Price Limited - Term Bond Portfolio/3/ 0.70% 0.00% 0.70% 0.70% 0.00% 0.70%
MFS Capital Opportunities Portfolio/4/ 0.75% 0.16% 0.91% 0.75% 0.27% 1.02%
MFS Emerging Growth Portfolio 0.75% 0.09% 0.84% 0.75% 0.09% 0.84%
MFS Research Portfolio 0.75% 0.11% 0.86% 0.75% 0.11% 0.86%
MFS Growth With Income Portfolio 0.75% 0.13% 0.88% 0.75% 0.13% 0.88%
Federated Utility Fund II Portfolio/4/ 0.75% 0.19% 0.94% 0.75% 0.44% 1.19%
Federated Growth Strategies Fund II Portfolio/4/ 0.55% 0.30% 0.85% 0.75% 0.55% 1.30%
Federated Int. Small Company Fund II Portfolio 1.25% 0.00% 1.25% 1.25% 0.00% 1.25%
Federated High Income Bond Fund II Portfolio/4/ 0.60% 0.19% 0.79% 0.60% 0.44% 1.04%
Federated Equity Income Fund II Portfolio/4/ 0.55% 0.39% 0.94% 0.75% 0.89% 1.64%
Alger American Small Capitalization Portfolio 0.85% 0.04% 0.89% 0.85% 0.04% 0.89%
Alger American Growth Portfolio 0.75% 0.04% 0.79% 0.75% 0.04% 0.79%
Alger American MidCap Growth Portfolio 0.80% 0.04% 0.84% 0.80% 0.04% 0.84%
Alger American Leveraged AllCap Portfolio/5/ 0.85% 0.11% 0.96% 0.85% 0.11% 0.96%
Alger American Income & Growth Portfolio 0.625% 0.075% 0.70% 0.625% 0.075% 0.70%
Alger American Balanced Portfolio 0.75% 0.17% 0.92% 0.75% 0.17% 0.92%
</TABLE>
/1/Under its Administrative Service Agreement with the American National Fund,
Securities Management and Research, Inc. ("SM&R"), the fund's investment advisor
and manager, has agreed to pay (or to reimburse each Portfolio for) each
Portfolio's expenses (including the advisory fee and administrative services fee
paid to SM&R, but exclusive of interest, commissions, and other expenses
incidental to Portfolio transactions) in excess of 1.50% per year of such
Portfolio's average daily net assets. In addition, SM&R has entered into a
separate undertaking with the fund effective May 1, 1994 until April 30, 2002,
pursuant to which SM&R has agreed to reimburse the American National Money
Market Portfolio and the American National Growth Portfolio for expenses in
excess of 0.87%; the American National Balanced Portfolio for expenses in excess
of .90%; and the American National Managed Portfolio for expenses in excess of
.93%, of each of such Portfolio's average daily net assets during such period.
SM&R is under no obligation to renew this undertaking for any Portfolio at the
end of such period.
/2/Fidelity Management & Research ("FMR") has voluntarily agreed to reimburse
Service Class 2 of the Index 500 to the extent that total operating expenses
(excluding interest, taxes, securities lending costs, brokerage commissions and
extraordinary expenses), as a percentage of its average net assets, exceed
0.60%. FMR has voluntarily agreed to reimburse Service Class 2 of certain funds
to the extent that total operating expenses (excluding interest, taxes, certain
securities lending costs, brokerage commissions and extraordinary expenses), as
a percentage of their respective average net assets, exceed the following rates:
1.50% for Asset Manager,
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1.25% for Contrafund, 1.25% for Asset Manager: Growth, and 1.75% for Growth
Opportunities. These arrangements can be discontinued by FMR at any time.
/3/T. Rowe Price Equity Income and Mid-Cap Growth Portfolios pay T. Rowe Price
an annual all-inclusive fee of .85% based on such Portfolios' average daily net
assets. T. Rowe Price Limited-Term Bond Portfolio pays T. Rowe Price an annual
all-inclusive fee of .70% based on such Portfolios' average daily net assets. T.
Rowe Price International Stock Portfolio pays Rowe-Price-Flemming International,
Inc. an annual all-inclusive fee of 1.05% based on such Portfolios' average
daily net assets. These fees pay for investment management services and other
operating costs of the Portfolios.
/4/The portfolio's investment advisor voluntarily reduced the portfolio's
expenses.
/5/Included in other expenses is .03% of interest expense.
See the prospectuses for American National Fund, Fidelity Funds, T. Rowe Price
Funds, MFS Fund, Federated Fund, and Alger American Fund for more detailed
information about the Eligible Portfolios' fees and expenses.
Surrender Charges. If you surrender all or a portion of your Contract, a
surrender charge will be assessed. The surrender charge for a full surrender is
assessed based on a rate per $1,000 of Specified Amount, with the charges being
calculated separately for the original Specified Amount and each increase, if
any, in Specified Amount. The surrender charge for the initial Specified Amount
is applicable until the 16th Contract anniversary. For an increase in Specified
Amount, the surrender charge is applicable for 15 years after the Effective Date
of such increase. Thereafter, there is no surrender charge.
The surrender charge varies by Age at Issue and risk class. In the first
Contract Year, the surrender charge shall range from $15.38 per $1,000 of
Specified Amount to $57.86 per $1,000 of Specified Amount. The rate is the same
for the first ___ years since issue or increase, and reduces to zero after
fifteen years. (See "Surrender Charge," page __.)
We will charge an additional $25 fee for partial surrenders. (See "Partial
Surrender Charge," page __.) A surrender charge will also be assessed on
decreases in the Specified Amount or on Death Benefit option changes that result
in decreases in Specified Amount.
Transfer Charge. The first 12 transfers of Accumulation Value in a Contract
Year are free. Thereafter, a transfer charge of $10 will be deducted from the
amount transferred. (See "Transfer Charge," page __.)
Taxes
We intend the Contract to satisfy the definition of life insurance under the
Internal Revenue Code. Therefore, the Death Benefit Proceeds generally should
be excludible from the gross income of the recipient. Similarly, you should not
be taxed on increases in the Accumulation Value until there is a distribution
from the Contract.
Under certain circumstances, a Contract could be a modified endowment contract.
If so, all pre-death distributions, including loans, will be treated first as
distributions of taxable income and then as a return of basis or investment in
the Contract. In addition, prior to age 59 1/2 any such distributions generally
will be subject to a 10% penalty tax.
If the Contract is not a modified endowment contract, distributions generally
will be treated first as a return of basis or investment in the Contract and
then as distributing taxable income. Moreover, loans
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will not be treated as distributions and neither distributions nor loans are
subject to the 10% penalty tax.
See "Federal Income Tax Considerations," page __ for a discussion of when
distributions, such as surrenders and loans, could be subject to federal income
tax.
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CONTRACT BENEFITS
Purposes of the Contract
The Contract is designed to provide you:
. life insurance protection,
. Death Benefits which may and Accumulation Value that will vary with
performance of your chosen investment options,
. flexibility in the amount and frequency of premium payments,
. flexibility in the level of life insurance protection, subject to certain
limitations, and
. a Guaranteed Coverage Benefit, if you pay the Guaranteed Coverage Premium and
meet the other Contract requirements.
Death Benefit Proceeds
We will, upon Satisfactory Proof of Death, pay the Death Benefit Proceeds in
accordance with the Death Benefit option in effect when the Insured dies. The
amount of the Death Benefit will be determined at the end of the Valuation
Period in which the Insured dies. Death Benefit Proceeds equal:
. the Death Benefit; plus
. additional life insurance proceeds provided by riders; minus
. Contract Debt; minus
. unpaid Monthly Deductions.
Subject to the rights of any assignee, we will pay the Death Benefit Proceeds
to:
. the Beneficiary or Beneficiaries, or
. if no Beneficiary survives the Insured, the Insured's estate will receive the
proceeds.
The Death Benefit Proceeds may be paid to the Beneficiary in a lump sum or under
one or more of the payment options in the Policy. (See "Payment of Policy
Benefits," page __.)
Death Benefit Options
You choose one of two Death Benefit options in the application. Until age 100,
the Death Benefit under either option will equal or exceed the current Specified
Amount of the Contract. After age 100, the Death Benefit will be 110% of the
Accumulation Value.
Option A. Under Option A the Death Benefit is the Specified Amount or, if
greater, the corridor percentage of Accumulation Value at the end of the
Valuation Period that includes the date of death. The applicable percentage
declines as the age of the Insured increases as shown in the following Corridor
Percentage Table:
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CORRIDOR PERCENTAGE TABLE
Attained Corridor Attained Corridor Attained Corridor
Age Percentage Age Percentage Age Percentage
--------------------------------------------------------------------------------
40 or younger 250 54 157 68 117
41 243 55 150 69 116
42 236 56 146 70 115
43 229 57 142 71 113
44 222 58 138 72 111
45 215 59 134 73 109
46 209 60 130 74 107
47 203 61 128 75 to 90 105
48 197 62 126 91 104
49 191 63 124 92 103
50 185 64 122 93 102
51 178 65 120 94 to 99 101
52 171 66 119 100 100
53 164 67 118
OPTION A EXAMPLE. Assume that the Insured's Attained Age is between 0 and 40.
A Contract with a $100,000 Specified Amount will generally pay $100,000 in Death
Benefits. However, the Death Benefit will be the greater of $100,000 or 250% of
Accumulation Value. Anytime the Accumulation Value exceeds $40,000 the Death
Benefit will exceed the $100,000 Specified Amount. Each additional dollar added
to Accumulation Value above $40,000 will increase the Death Benefit by $2.50.
If the Accumulation Value exceeds $40,000 and increases by $100 because of
investment performance or premium payments, the Death Benefit will increase by
$250. A Contract with an Accumulation Value of $50,000 will provide a Death
Benefit of $125,000 ($50,000 x 250%); an Accumulation Value of $60,000 will
provide a Death Benefit of $150,000 ($60,000 x 250%); and, an Accumulation Value
of $70,000 will provide a Death Benefit of $175,000 ($70,000 x 250%).
Similarly, so long as Accumulation Value exceeds $40,000, each dollar decrease
in Accumulation Value will reduce the Death Benefit by $2.50. If, for example,
the Accumulation Value is reduced from $45,000 to $40,000 because of partial
withdrawals, charges, or negative investment performance, the Death Benefit will
be reduced from $112,500 to $100,000.
Option B. The Death Benefit is the Specified Amount plus the Accumulation Value
or, if greater, the applicable corridor percentage of the Accumulation Value at
the end of the Valuation Period that includes the Insured's date of death. The
corridor percentage is the same as under Option A: 250% at Attained Age 40 or
younger on the Contract anniversary before the date of death, and for an
Attained Age over 40 on that Contract anniversary the percentage declines as
shown in the Corridor Percentage Table. Accordingly, the amount of the Death
Benefit will always vary as the Accumulation Value varies but will never be less
than the Specified Amount.
OPTION B EXAMPLE. Assume that the Insured is age 40 or younger. A Contract
with a Specified Amount of $100,000 will generally provide a Death Benefit of
$100,000 plus Accumulation Value. For example, a Contract with Accumulation
Value of $5,000, the Death Benefit will be $105,000 ($100,000 + $5,000); for an
Accumulation Value of $10,000, the Death Benefit will be $110,000 ($100,000 +
$10,000). The Death Benefit, however, must be at least 250% of
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Accumulation Value. Consequently, if the Accumulation Value exceeds
approximately $66,668, the Death Benefit will be greater than the Specified
Amount plus Accumulation Value. Each additional dollar of Accumulation Value
above $66,668 will increase the Death Benefit by $2.50. If the Accumulation
Value exceeds $66,668 and increases by $100 because of investment performance or
premium payments, the Death Benefit will increase by $250. For a Contract with
Accumulation Value of $40,000, the Death Benefit will be $140,000 (Specified
Amount $100,000 plus $40,000 Accumulation Value); for an Accumulation Value of
$50,000, the Death Benefit will be $150,000 ($100,000 plus $50,000); and for an
Accumulation Value of $70,000, the Death Benefit will be $175,000 ($70,000 x
250% is greater than $100,000 plus $70,000).
Similarly, any time Accumulation Value exceeds $66,668, each dollar taken out of
Accumulation Value will reduce the Death Benefit by $2.50. If, for example, the
Accumulation Value is reduced from $80,000 to $70,000 because of partial
surrenders, charges, or negative investment performance, the Death Benefit will
be reduced from $200,000 to $175,000. If at any time, however, the Accumulation
Value multiplied by the applicable corridor percentage is less than the
Specified Amount plus the Accumulation Value, the Death Benefit will be the
Specified Amount plus the Accumulation Value.
If you want favorable investment performance to:
[_] increase your Death Benefit, you should:
. choose Option A if your Accumulation Value times corridor percentage is
greater than your Specified Amount, or
. choose Option B if:
- your Accumulation Value times corridor percentage is less than your
Specified Amount, or
- your Accumulation Value times corridor percentage is greater than
your Specified Amount plus Accumulation Value
[_] keep your cost of insurance charges to a minimum, you should:
. choose Option A if your Accumulation Value times corridor percentage is
less than your Specified Amount, or
. choose Option B if your Accumulation Value times corridor percentage is
greater than your Specified Amount.
Change in Death Benefit Option. You may change the Death Benefit option at any
time by sending us a written request. The effective date of a change will be
the Monthly Deduction Date on or following the date, we receive the written
request. A change may have Federal Tax consequences. (See "Federal Income Tax
Considerations," page __.)
If you change from Option A to Option B, the Specified Amount will equal the
Specified Amount before the change minus the Accumulation Value on the effective
date of the change. If you change from Option B to Option A, the Specified
Amount after the change will equal the Death Benefit under Option B on the
effective date of change. You cannot change your Death Benefit option if the
Specified Amount remaining in force after the change would be less than the
minimum Specified Amount of $100,000.
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An increase in Specified Amount due to a Death Benefit option change will
increase the Monthly Deduction and the Guaranteed Coverage Premium. A surrender
charge may apply to a change in Death Benefit option. (See "Surrender Charge,"
page __.)
A change in the Death Benefit option may affect subsequent cost of insurance
charges, which vary with our Net Amount at Risk. In addition, a change may
affect subsequent monthly fees. (See "Charges and Deductions," page __.)
Change in Specified Amount. Subject to certain limitations, you may increase or
decrease the Specified Amount at any time. A change in Specified Amount may
affect the cost of insurance rate and our Net Amount at Risk, both of which may
affect your cost of insurance charge and have Federal Tax consequences. (See
"Cost of Insurance," page __ and "Federal Income Tax Considerations," page __.)
The Specified Amount after a decrease may not be less than the minimum Specified
Amount of $100,000 (see "Change in Death Benefit Option," page __).
If following the decrease in Specified Amount, the Contract would not comply
with the maximum premium limitations required by federal tax law, the decrease
may be limited or a portion of Accumulation Value may be returned to you at your
election, to the extent necessary to meet these requirements. A decrease in the
Specified Amount will be applied first against increases in Specified Amount in
order of the more recent increase first and finally against the initial
Specified Amount.
If your Specified Amount decreases, we will deduct a surrender charge from the
Accumulation Value. Such deduction will equal the sum of surrender charges
computed separately for each portion of Specified Amount reduced in the above
order. The surrender charge, for each reduction is a pro rata portion of any
surrender charge applicable to a full surrender of the related increase or
initial Specified Amount. You cannot decrease the Specified Amount if the
Insured's Attained Age exceeds 100. A decrease in Specified Amount will take
effect on the Monthly Deduction Date, which coincides with or next follows the
date we receive, your written request.
If you want to increase the Specified Amount, you must submit a written
supplemental application and provide evidence of insurability. You may have a
different underwriting risk classification for the initial Specified Amount and
each increase in Specified Amount. (See "Charges from Accumulation Value", page
__.) An additional premium may be required. (See "Premiums Upon Increase in
Specified Amount," page __.) The minimum amount of any increase is $5,000. You
cannot increase the Specified Amount if the Insured's Attained Age is over 85.
An increase in the Specified Amount will increase certain charges. Those
charges will be deducted from the Accumulation Value on each Monthly Deduction
Date. An increase in the Specified Amount may also increase surrender charges.
An increase in the Specified Amount during the time the Guaranteed Coverage
Benefit provision is in effect will increase the Guaranteed Coverage Premium
requirement. (See "Charges and Deductions," page __.)
You have a "free look period" for each increase in Specified Amount. The free
look period will apply only to the increase in Specified Amount. (See "Refund
Privilege," page __.)
Methods of Affecting Insurance Protection. Your "pure insurance protection"
will be the difference between your Death Benefit and your Accumulation Value.
You may increase or decrease the pure insurance protection provided by the
Contract, as your insurance needs change. You can change the
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pure insurance protection by increasing or decreasing the Specified Amount,
changing the level of premium payments, or making a partial surrender of the
Policy. Some of these changes may have federal tax consequences. Although the
consequences of each change will depend upon individual circumstances, they can
be summarized as follows:
. A decrease in Specified Amount will, subject to the applicable corridor
percentage limitations, decrease insurance protection, and cost of insurance
charges.
. An increase in Specified Amount may increase pure insurance protection,
depending on the amount of Accumulation Value and the corridor percentage
limitation. If insurance protection is increased, the Contract charges
generally increase as well.
. If Option A is in effect, increased premium payments may reduce pure
insurance protection, until the corridor percentage of Accumulation Value
exceeds the Specified Amount. Increased premiums should also increase the
Accumulation Value available to keep the Contract in force.
. If Option A is in effect, reduced premium payments generally will increase
the amount of pure insurance protection, depending on the corridor percentage
limitations. Reducing premium payments may also result in a reduced amount of
Accumulation Value and increase the possibility that the Contract will lapse.
. A partial surrender will reduce the Death Benefit. However, a partial
surrender only affects the amount of pure insurance protection if the
percentage from the Corridor Percentage Table is applicable in determining
the Death Benefit. Otherwise, the decrease in Death Benefit is offset by the
amount of Accumulation Value withdrawn. The primary use of a partial
surrender is to withdraw Accumulation Value.
Guaranteed Coverage Benefit
We will keep the Contract in force for ten Contract Years under the Guaranteed
Coverage Benefit so long as the sum of premiums paid at any time during such
period is at least:
. the sum of Guaranteed Coverage Premium for each month from the start of the
period, including the current month, plus
. partial surrenders and Contract Debt.
For an additional monthly cost of insurance charge, the Guaranteed Coverage
Benefit can be extended to twenty years or to age 100 by adding a rider. An
increase in Specified Amount does not start a new Guaranteed Coverage Benefit
period, but does increase Guaranteed Coverage Premium.
Duration of the Contract
The Contract will remain in force so long as the Surrender Value is sufficient
to pay the Monthly Deduction. The tax consequences associated with continuing
the Contract beyond age 100 are unclear and a tax advisor should be consulted.
Where, however, the Surrender Value is insufficient to
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pay the Monthly Deduction and the grace period expires without an adequate
payment, the Contract will lapse and terminate without value. (See "Grace Period
and Reinstatement," page __.)
Accumulation Value
Determination of Accumulation Value. On each Valuation Date, Accumulation Value
is determined as follows:
. the aggregate of the value in each subaccount, determined by multiplying a
subaccount's unit value by the number of units in the subaccount; plus
. the value in the Fixed Account; plus
. premiums (less premium taxes), plus
. Accumulation Value securing Contract Debt; less
. partial surrenders, and related charges, processed on that Valuation Date;
less
. any Monthly Deduction processed on that Valuation Date; less
. any federal or state income taxes.
The number of subaccount units allocated to the Contract is determined after any
transfers among subaccounts, or the Fixed Account (and deduction of transfer
charges), but before any other transactions on the Valuation Date.
Determination of Unit Value. The unit value of each subaccount is equal to:
. the per share net asset value of the corresponding Eligible Portfolio on the
Valuation Date, multiplied by
. the number of shares held by the subaccount, after the purchase or redemption
of any shares on that date, minus
. the Daily Asset Charge, and divided by
. the total number of units held in the subaccount on the Valuation Date, after
any transfers among subaccounts, or the Fixed Account (and deduction of
transfer charges), but before any other transactions.
Payment of Contract Benefits
Death Benefit Proceeds will usually be paid within seven days after we receive
Satisfactory Proof of Death. Loans and surrenders will ordinarily be paid within
seven days after receipt of your written request. We may defer payment of any
surrender, refund or loan until a premium payment made by check clears the
banking system. Payments may also be postponed in certain other circumstances.
(See "Postponement of Payments," page __.) You can decide how benefits will be
paid. During the Insured's lifetime, you may arrange for the Death Benefit
Proceeds to be paid in a lump sum or under one or more of the optional methods
of payment described below. These choices are also available if the Contract is
surrendered. When Death Benefit Proceeds are payable in a lump sum and no
election of an optional payment method is in force at the death of the Insured,
the Beneficiary may select one
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or more of the optional payment methods. If you or the Beneficiary do not elect
one of these options, we will pay the benefits in a lump sum.
An election or change of method of payment must be in writing. A change in
Beneficiary revokes any previous election. Further, if the Contract is assigned,
any amount due to the assignee will be paid first in a lump sum. The balance, if
any, may be applied under any payment option. Once payments have begun, the
payment option may not be changed.
Optional Methods of Payment. In addition to a lump sum payment of benefits under
the Contract, any proceeds to be paid under the Contract may be paid in any of
the following four methods:
. Option 1. Equal Installments for a Fixed Number of Years. Installments will
include interest at the effective rate of 2.5% per year or at a higher rate,
at our option.
. Option 2. Installments for Life with the Option to Choose a Period Certain.
The fixed period may be 10 or 20 years.
. Option 3. Equal Installments of a Fixed Amount Payable Annually, Semi-
annually, Quarterly, or Monthly. The sum of the installments paid in one year
must be at least $40 for each $1,000 of proceeds. Installments will be paid
until the total of the following amount is exhausted: (1) the net sum
payable; plus (2) interest at the effective rate of 2.5% per year; plus (3)
any additional interest that we may elect to pay. The final installment will
be the balance of the proceeds payable plus interest.
. Option 4. Interest Only. We will hold the proceeds and pay interest at the
effective rate of 2.5% per year or at a higher rate, at our option. On
interest due dates, the payee may withdraw an amount of at least $100 from
the amount held.
Any amount left with us for payment under a settlement option will be
transferred to our General Account and will not be affected by the investment
performance associated with the Separate Account. We may make other options
available in the future.
When proceeds become payable in accordance with a settlement option, the
Contract will be exchanged for a supplementary contract specifying all rights
and benefits. The effective date will be the date of the Insured's death or
other termination of the Contract.
Amounts under the supplemental contact remaining payable after the Beneficiary's
death will be paid to the estate of the Beneficiary or in any other manner
provided for in the supplementary contract or as otherwise provided under
applicable law.
General Provisions for Settlement Options. If the amount held falls below
$2,000, we will pay the entire amount held to the payee. The first installment
under Option 1, 2 or 3 will be paid the date the proceeds are available. With
our consent, the first installment may be postponed for up to ten years. If
payment is postponed, the proceeds will accumulate with compound interest at the
effective rate of 2.5% per year.
To avoid paying installments of less than $20 each, we will:
. change the installments to a quarterly, semi-annual or annual basis; and/or
. reduce the number of installments.
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If you elect an option, you may restrict the Beneficiary's right to assign,
encumber, or obtain the discounted present value of any unpaid amount.
Except as permitted by law, unpaid amounts are not subject to claims of a
Beneficiary's creditors.
At our option, a Beneficiary may be permitted to receive the discounted present
value of installments, except under option 2. If the payee dies, under Option 1
or 2 we will pay the discounted present value of any unpaid fixed-period
installments to the payee's estate except Option 2 lifetime. Under Option 3 or
4, we will pay any balance to the payee's estate. The discounted present value
of any remaining payments using a discount rate equal to the effective interest
rate used to compute the benefit plus 1%. With our consent, the option elected
may provide for payment in another manner.
Limitations. You must obtain our consent to have an option under which proceeds
are payable to:
. joint or successive payees, or
. other than a natural person.
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CONTRACT RIGHTS
Loan Benefits
Loan Privileges. You can borrow money from us using your Contract as security
for the loan. The minimum loan amount is $100. Except as otherwise required by
applicable state law or regulation:
. during the first three Contract Years, you cannot borrow more than 75% of the
Surrender Value, as calculated at the end of the Valuation Period during
which your loan request is received
. after the first three Contract Years, you can borrow up to 90% of the
Surrender Value, as calculated at the end of the Valuation Period during
which your loan request is received
Preferred loans accrue interest at a lower rate. We determine whether a loan is
preferred at the time the loan is made.
The amount available for a preferred loan is equal to the lesser of:
. the above-mentioned loan limits, or
. the Accumulation Value less Contract Debt and less premiums paid (adjusted by
partial surrenders).
The loan may be repaid in whole or in part during the Insured's lifetime. Each
loan repayment must be at least $10 or the full amount of Contract Debt, if
less. Loans generally are funded within seven days after receipt of a written
request. (See "Postponement of Payments," page __.) Loans may have tax
consequences. (See "Federal Income Tax Considerations," page __.)
Interest. Loans will accrue interest on a daily basis at a rate of 4.0% per
year, 3.0% on preferred loans. Interest is due and payable on each Contract
anniversary date or when a loan payment is made if earlier. If unpaid, interest
will be added to the amount of the loan and bear interest at the same rate.
Amounts held to secure loans earn interest at the annual rate of 3.0% credited
on the Contract anniversary. We will allocate interest to the subaccounts and
the Fixed Account on each Contract anniversary in the same proportion that
premiums are being allocated to those subaccounts and the Fixed Account at that
time.
Effect of Loans. When a loan is made, we transfer Accumulation Value equal to
the loan amount from the Separate Account and the Fixed Account to our General
Account as security for the Contract Debt. The Accumulation Value transferred
will be deducted from the subaccounts and the Fixed Account in accordance with
your instructions. The minimum amount that can remain in a subaccount or the
Fixed Account because of a loan is $100. If you do not provide allocation
instructions, the Accumulation Value transferred will be allocated among the
subaccounts and the Fixed Account pro-rata. If allocation instructions conflict
with the $100 minimum described above, we may allocate the Accumulation Value
transferred among the subaccounts, and the Fixed Account pro-rata. We will also
transfer Accumulation Value from the subaccounts and the Fixed Account to the
General Account to secure unpaid loan interest. We will allocate this transfer
among the subaccounts and the Fixed Account as described above. We will not
impose a charge for these transfers. A loan may have tax consequences. (See
"Federal Income Tax Considerations," page __.)
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A loan may permanently affect the Accumulation Value, even if repaid. The effect
could be favorable or unfavorable depending on whether the investment
performance of the subacccount(s)/Fixed Account chosen by you is greater or less
than the interest rate credited to the Accumulation Value held in the General
Account to secure the loan. In comparison to a Contract under which no loan was
made, the Accumulation Value will be lower if the General Account interest rate
is less than the investment performance of the subaccount(s)/Fixed Account, and
greater if the General Account interest rate is higher than the investment
performance of the subaccount(s)/Fixed Account. Since your Death Benefit may be
affected by Accumulation Value, a loan may also affect the amount of the Death
Benefit, even if repaid.
Contract Debt. Contract Debt reduces Death Benefit Proceeds and Surrender Value.
If the Contract Debt exceeds the Accumulation Value less any surrender charge,
you must pay the excess or your Contract will lapse. We will notify you of the
amount that must be paid. (See "Grace Period and Reinstatement," page __.)
Repayment of Contract Debt. If we receive payments while a loan is outstanding,
those payments are treated as additional premiums, unless you request otherwise.
As Contract Debt is repaid, we will transfer Accumulation Value equal to the
loan amount repaid from the General Account to the subaccounts and the Fixed
Account. We will allocate the transfers among the subaccounts and the Fixed
Account in the same proportion that premiums are being allocated at the time of
repayment. We will make the allocation at the end of the Valuation Period during
which the repayment is received. If you do not repay the Contract Debt, we will
deduct the amount of the Contract Debt from any amount payable under the
Contract.
Surrenders
During the life of the Insured, you can surrender the Contract in whole or in
part by sending us a written request. The maximum amount available for surrender
is the Surrender Value at the end of the Valuation Period during which the
surrender request is received at our Home Office. Surrenders will generally be
paid within seven days of receipt of the written request. (See "Postponement of
Payments," page __.) Any proceeds payable upon full surrender shall be paid in
one sum unless an optional method of payment is elected. (See "Payment of Policy
Benefits," page __.) Surrenders may have tax consequences. (See "Federal Income
Tax Considerations," page __.)
Full Surrenders. If the Contract is being fully surrendered, you must return the
Contract to us with your request. Coverage under the Contract will terminate as
of the date of a full surrender.
Partial Surrenders. The amount of a partial surrender may not exceed the
Surrender Value at the end of the Valuation Period during which the request is
received less an amount sufficient to cover Monthly Deductions for three months.
The minimum partial surrender is $100.
The Accumulation Value will be reduced by the amount of partial surrender and
any applicable partial surrender charge. (See "Partial Surrender Charge," page
__.) This amount will be deducted from the Accumulation Value at the end of the
Valuation Period during which the request is received. The deduction will be
allocated to the subaccounts and the Fixed Account according to your
instructions, if the minimum amount remaining in a subaccount as a result of the
allocation is $100. If you do not provide allocation instructions or if your
allocation instructions conflict with the $100 minimum
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described above, we will allocate the partial surrender among the subaccounts
and the Fixed Account pro-rata.
Partial surrenders reduce the Death Benefit by the amount the Accumulation Value
is reduced. If Option A is in effect, the Specified Amount will be reduced by
the amount of the partial surrender. Where increases in Specified Amount
occurred, a partial surrender will reduce the increases in order of the more
recent increase first and finally the initial Specified Amount. Thus, partial
surrenders may affect the cost of insurance charge and the Net Amount at Risk.
(See "Cost of Insurance," page __; "Methods of Affecting Insurance Protection,"
page __.) If Option B is in effect, the Specified Amount will not change, but
the Accumulation Value will be reduced.
The Specified Amount remaining in force after a partial surrender may not be
less than the minimum Specified Amount of $100,000. (See "Change in Death
Benefit Option," page __.)
The amount of any partial surrender will generally be paid within seven (7) days
after receipt of your written request. (See "Postponement of Payments," page
__.)
Transfers
You can transfer Accumulation Value among the subaccounts or from the
subaccounts to the Fixed Account as often as you like. You can make transfers in
person, by mail, or, if a telephone transfer authorization form is on file, by
telephone. The minimum transfer from a subaccount is $250, or the balance of the
subaccount, if less. The minimum that may remain in a subaccount after a
transfer is $100. We will make transfers and determine all values concerning
transfers on the later of the end of the Valuation Period which includes the
requested transfer date or during which the transfer request is received.
Accumulation Value on the date of a transfer will not be affected except to the
extent of the transfer charge, if applicable. The first twelve transfers in a
Contract Year will be free. We will charge $10 for each additional transfer.
Such charge will be deducted from the amount transferred. (See "Transfer
Charge," page __.) Transfers resulting from loans, the dollar cost averaging
program or the rebalancing program will not be subject to a transfer charge or
be counted for purposes of determining the number of free transfers.
During the thirty-day period beginning on the Contract anniversary, you may make
one transfer from the Fixed Account to the subaccounts. This transfer is free.
The amount you can transfer from the Fixed Account to the subaccounts is the
greater of:
. twenty-five percent of the amount in the Fixed Account, or
. $1,000.
If we receive a request to transfer funds out of the Fixed Account before the
Contract anniversary, the transfer will be made at the end of the Valuation
Period during which the Contract anniversary occurs. If we receive a proper
transfer request within 30 days after the Contract anniversary, the transfer
will be made as of the end of the Valuation Period in which we received the
transfer request.
We will employ reasonable procedures to confirm that the transfer instructions
communicated by telephone are genuine. These procedures may include some form of
personal identification before acting, providing you written confirmation of the
transaction, and making a tape recording of the telephoned instructions.
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Refund Privilege
Under state law, you have a free look period in which to examine a Contract and
return it for a refund. The length of the free look period varies among
different states, but generally runs for 10 days after your receipt of the
Contract. If the Contract is canceled during the free look period, you will
receive a refund equal to premiums paid adjusted by investment gains during the
15-day period such premiums have been allocated to the American National Money
Market Portfolio. (See "Allocation of Premiums," page __.) A free look period
also applies to any increase in Specified Amount. If you cancel the increase,
you will receive the amount of premiums paid attributable to such increase in
Specified Amount adjusted by investment gains or losses.
To cancel the Contract, you should mail or deliver the Contract to our Home
Office or to the office of one of our agents. We may delay paying a refund of
premiums paid by check until the check has cleared your bank. (See
"Postponement of Payments," page __.)
Dollar Cost Averaging
Under the dollar cost averaging program, you can instruct us to automatically
transfer, on a periodic basis, a predetermined amount or percentage from any one
subaccount or Fixed Account, to any subaccount(s) or Fixed Account. The
automatic transfers can occur monthly, quarterly, semi-annually, or annually.
The amount transferred each time must be at least $1,000. The minimum transfer
to each subaccount must be at least $100. At the time the program begins, you
must have at least $10,000 Accumulation Value. Transfers under dollar cost
averaging will be made, and values resulting from the transfers determined, at
the end of the Valuation Period that includes the transfer date designated in
your instructions.
Using dollar cost averaging, you purchase more units when the unit value is low,
and fewer units when the unit value is high. There is no guarantee that the
dollar cost averaging program will result in higher Accumulation Value or
otherwise be successful.
You can specify that only a certain number of transfers will be made, in which
case the program will terminate when that number of transfers has been made. In
addition, the program will terminate if Accumulation Value is less than $5,000
on a transfer date.
If you participate in the fixed account dollar cost averaging program, you may
designate an amount to be held in one of the dollar cost averaging fixed account
options until it is transferred to the subaccounts or the Fixed Account as
selected by you. The two options you must select from are a six-month or a
twelve-month dollar cost averaging period. When you make an allocation to one of
the dollar cost averaging fixed accounts for this purpose, we will set an
interest rate applicable to that amount. We will then credit interest at that
rate to that amount until it has been entirely transferred to your chosen
subaccounts or the Fixed Account. Consistent with the option selected by you, we
will complete the transfers within either six or twelve months of the allocation
date, which will be the Date of Issue. In our discretion, we may change the rate
that we set for new allocations to the dollar cost averaging fixed accounts. We
will never, however, set a rate less than an effective annual rate of 3%. The
program is available only for premium payments received on or prior to the Date
of Issue. The minimum premium payment to participate in the program is $10,000.
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You can increase or decrease the amount of transfers or discontinue the program
by sending us written notice or, if a telephone transfer authorization form is
on file, notifying us by phone. There is no charge for this program and
transfers made pursuant to this program will not be counted in determining the
number of free transfers.
Rebalancing
Because the subaccounts and the Fixed Account may have different investment
results, your Accumulation Value may not stay in the same percentages as your
initial allocation instructions. At your request, we will rebalance your
Accumulation Value by allocating premiums and transferring Accumulation Value to
ensure conformity with your allocation instructions. We will rebalance your
allocation on a calendar quarter, semi-annual or annual basis according to your
instructions. We will rebalance, and determine any values resulting from the
rebalancing, at the end of the Valuation Period that includes the rebalancing
date in your request. There is no charge for this program and transfers made
pursuant to this program will not be counted in determining the number of free
transfers. At the time the program begins, you must have at least $10,000 of
Accumulation Value. If the Accumulation Value is less than $5,000 on a
rebalancing date, the program will be discontinued.
You can request participation in the rebalancing program at any time. You can
discontinue the program by sending us written notice or, if a telephone transfer
authorization form is on file, by calling by telephone.
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PAYMENT AND ALLOCATION
OF PREMIUMS
Issuance of a Contract
If you want to purchase a Contract, you must complete an application and submit
it to our Home Office. We will only issue a Contract to individuals 85 years of
age or less on their last birthday who supply satisfactory evidence of
insurability. Acceptance is subject to our underwriting rules.
The Date of Issue is used to determine Contract anniversary dates, Contract
Years, and Contract months.
Premiums
You must pay the initial premium for the Contract to be in force. The initial
premium must be at least 1/12 of the first year Guaranteed Coverage Premium.
The initial premium and all other premiums are payable at our Home Office.
Subject to certain limitations, you have flexibility in determining the
frequency and amount of premiums since the Planned Periodic Premium schedule is
not binding on you.
Premium Flexibility
You may make unscheduled premium payments at any time in any amount, subject to
the premium limitations described herein.
Planned Periodic Premiums. At the time the Contract is issued, you can determine
a Planned Periodic Premium schedule. The amounts and frequency of the Planned
Periodic Premiums will be shown on the Data Page. During the Guaranteed Coverage
Benefit period, the Planned Periodic Premium must be at least the Guaranteed
Coverage Premium. You are not required to pay premiums in accordance with this
schedule.
You can change the frequency and amount of Planned Periodic Premiums by sending
a written request to our Home Office. We may limit any increase in premium to
comply with applicable federal tax law. We will send premium payment notices
annually, semi-annually, quarterly or monthly depending upon the frequency of
the Planned Periodic Premiums. Payment of the Planned Periodic Premiums does not
guarantee that the Contract will remain in force unless the Guaranteed Coverage
Benefit provision is in effect.
Premium Limitations. Total premiums paid cannot exceed the current maximum
premium limitations established by federal tax laws. If a premium is paid which
would cause total premiums to exceed such maximum premium limitations, we will
only accept that portion of the premium equal to the maximum. We will return
any part of the premium in excess of that amount or apply it as otherwise
agreed. No further premiums will be accepted until permitted under the laws
prescribing maximum premium limitations. We may refuse to accept a premium or
require additional evidence of insurability if the premium would increase Net
Amount at Risk. We may also establish a minimum acceptable premium amount.
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Premiums Upon Increase in Specified Amount. If you request an increase in the
Specified Amount, we will notify you if any additional premium is required.
Whether additional premium will be required will depend upon
. the Accumulation Value of the Contract at the time of the increase, and
. the amount of the increase you request.
Allocation of Premiums and Accumulation Value
Allocation of Premiums. Premiums are allocated according to your instructions.
You can change the allocation without charge by providing proper notification to
our Home Office. Your notice must include the Contract number to which the
instructions apply. Your revised allocation instructions will apply to premiums
received by us on or after the date proper notification is received.
Accumulation Value. The value of subaccounts will vary with the investment
performance of these subaccounts and you bear the risk that those investments
might actually lose money. The performance of these investments affects the
Accumulation Value and may affect the Death Benefit as well.
Grace Period and Reinstatement
Grace Period. If the Surrender Value is insufficient to pay the Monthly
Deduction, you have a grace period of sixty-one days to pay an additional
premium. The grace period begins on the date Surrender Value is insufficient to
cover the Monthly Deduction. At the beginning of the grace period, we will mail
you notice to your last known address we have on file advising you of the
necessary additional premium. If you do not pay the additional premium during
the grace period, the Contract will terminate. If the Insured dies during the
grace period, any overdue Monthly Deductions and Contract Debt will be deducted
from the Death Benefit Proceeds.
Reinstatement. A Contract may be reinstated any time within five years after
termination. A Contract cannot be reinstated if it was surrendered.
Reinstatement will be effected based on the Insured's underwriting
classification at the time of the reinstatement.
Reinstatement is subject to the following:
. evidence of insurability satisfactory to us;
. reinstatement or repayment of Contract Debt;
. payment of Monthly Deductions not collected during the grace period;
. payment of the premium sufficient to pay the Monthly Deduction for three
months after the date of reinstatement.
Reinstatement will be effected based on the Insured's underwriting
classification at the time of the reinstatement.
The original Date of Issue, and the Effective Dates of increases in Specified
Amount (if applicable), will be used for purposes of calculating Monthly
Deductions and the surrender charge. If any Contract Debt was reinstated, the
amount of the debt will be held in our General Account. During the
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lapse period, Contract Debt will accrue interest at a rate of 6%. Accumulation
Value will then be calculated as described under "Accumulation Value" on page
__. The Effective Date of reinstatement will be the first Monthly Deduction Date
on or next following the date we approve the application for reinstatement.
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CHARGES AND DEDUCTIONS
Premium Charges
A premium charge of 6% will be deducted from any premium payment before
allocating such premiums among the subaccounts and the Fixed Account. After the
first ten Contract Years, the premium charge is 4%, and will be deducted from
any premium received. We reserve the right to change the premium charge. We can
change the premium charge only once each Contract Year. The premium charge will
never exceed 6%.
Charges from Accumulation Value
We will deduct the following charges from the Accumulation Value:
Monthly Deduction. The Monthly Deduction is the sum of the cost of insurance
charge, applicable charge for any riders, monthly expense fee, and the monthly
fee. The Monthly Deduction compensates us for providing the insurance benefits
and administering the Contract. We deduct the Monthly Deduction as of the Date
of Issue and on each Monthly Deduction Date thereafter. We will allocate the
deduction among the subaccounts and the Fixed Account pro-rata. The cost of
insurance, monthly expense fee, and the monthly fee are described in more detail
below. Because portions of the Monthly Deduction, such as the cost of insurance,
can vary from month to month, the Monthly Deduction itself may vary in amount
from month to month.
Cost of Insurance. For the initial Specified Amount, the cost of insurance rate
will not exceed those in the schedule of monthly guaranteed maximum cost of
insurance rates shown on the Data Page. These guaranteed rates are based on the
Insured's age last birthday. The current rates range between 28% and 65% of the
guaranteed rates. Any change in the current cost of insurance rates will apply
to all persons of the same age, sex, risk class and Specified Amount.
Guaranteed maximum cost of insurance rates are calculated based on the 1980
Commissioners Standard Ordinary (CSO) Smoker or Nonsmoker Mortality Tables (Age
Last Birthday).
The underwriting risk class for the initial Specified Amount and the Specified
Amount for any increase may be different. Consequently, the cost of insurance
rate for the initial Specified Amount and each increase in Specified Amount may
be different. Decreases will also be reflected in the cost of insurance rate.
(See "Change in Specified Amount," page __.)
The actual charges made during the Contract Year will be shown in the annual
report delivered to you.
The rate class of an Insured may affect the cost of insurance rate. We currently
place insureds into either a preferred rate class, standard rate class, or
substandard rate class that involves a higher mortality risk. In an otherwise
identical Contract, an Insured in the standard rate class will typically have a
lower cost of insurance than an Insured in a substandard rate class. Similarly,
in an otherwise identical Contract, an Insured in a preferred rate class
typically has a lower cost of insurance than one in a standard class. If a
Contract is rated at issue with a tabular extra rating, the guaranteed rate is
generally a multiple of the guaranteed rate for a standard issue.
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Insureds may also be assigned a flat extra rating to reflect certain additional
risks. The flat extra rating will not impact the cost of insurance rate but
1/12 of any annualized flat extra cost will be deducted as part of the Monthly
Deduction.
Surrender Charge. If a Contract is surrendered, we may assess a surrender
charge. Surrender charges are intended to compensate us for the costs of
distributing the Contract.
We may also assess a surrender charge upon decreases in Specified Amount or upon
Death Benefit option changes that result in a decrease in Specified Amount. (See
"Change in Specified Amount," page __.)
The surrender charge is more substantial in early Contract Years. (See
"Surrender Charges," page __.) Accordingly, the Contract is more suitable for
long-term purposes.
Transfer Charge. We will make the first 12 transfers of Accumulation Value in
any Contract Year without a transfer charge. A charge of $10 will be deducted
from the amount transferred for each additional transfer among the subaccounts
or from the subaccounts to the Fixed Account. This charge compensates us for the
costs of effecting the transfer. The transfer charge cannot be increased.
Partial Surrender Charge. We will impose a $25 fee for each partial surrender.
In addition, if Death Benefit Option A is in effect, a partial surrender charge
will be charged for a decrease in Specified Amount. (See "Change in Specified
Amount," page __.)
Daily Charges Against the Separate Account. On each Valuation Date, we will
deduct a Daily Asset Charge from the Separate Account. This charge is to
compensate us for mortality and expense risks. The mortality risk is that
Insureds may live for a shorter time than we assumed. If so, we will have to pay
Death Benefits greater than we estimated. The expense risk is that expenses
incurred in issuing and administering the Contracts will exceed our estimates.
Such charge shall not exceed .70% annually of the average daily Accumulation
Value of each subaccount, but not the Fixed Account. After the sixteenth
Contract anniversary, the Daily Asset Charge will reduce to .35%. We reserve the
right to change the Daily Asset Charge once each Contract Year. The Daily Asset
Charge will not exceed .70%. We will deduct the daily charge from the
Accumulation Value of the Separate Account on each Valuation Date. The deduction
will equal the .70% annual rate divided by 365 and multiplying the result by the
number of days since the last Valuation Date. We will not deduct a Daily Asset
Charge from the Fixed Account.
Fees and Expenses Incurred by Eligible Portfolios. In addition, the managers of
the Eligible Portfolios will charge certain fees and expenses against the
Eligible Portfolios. (See "Eligible Portfolio Annual Expenses," page __. Also,
see the funds' prospectuses.) No portfolio fees or expenses will be charged from
the Fixed Account.
Taxes. Currently, we will not make a charge against the Separate Account for
federal, state, or local income taxes. We may, however, make such a charge in
the future if income or gains within the Separate Account will incur any Federal
tax, or any significant state or local tax treatment of our Company changes. We
would deduct such charges, if any, from the Separate Account and/or the Fixed
Account. We would not realize a profit on such tax charges with respect to the
Policies.
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Exceptions to Charges
We may reduce the premium charge, surrender charge, monthly expense fee, monthly
fee, cost of insurance and Daily Asset Charge for, or credit additional amounts
on, sales of the Contract to a trustee, employer, or similar entity where we
determine that such sales result in savings of sales or administrative expenses.
In addition, directors, officers and bona fide full-time employees (and their
spouses and minor children) of American National Insurance Company and any of
its subsidiaries may be permitted to purchase the Contract with substantial
reductions of premium charge, surrender charge, monthly expense fee, monthly
fee, cost of insurance or Daily Asset Charge.
The Contract may be sold directly, without compensation, to: (1) a registered
representative, (2) employees, officers, directors, and trustees of American
National Insurance Company and its subsidiaries, and spouses and immediate
family members (i.e., children, siblings, parents, and grandparents) of the
foregoing, and (3) employees, officers, directors, trustees and registered
representatives of any broker-dealer authorized to sell the Contract, and
spouses and immediate family member of the foregoing. If sold under these
circumstances, a Contract may be credited in part or in whole with any cost
savings resulting from the sale being direct, rather than through an agent with
an associated commission, but only if such credit will not be unfairly
discriminatory to any person.
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American National Insurance Company
THE SEPARATE ACCOUNT, THE FUNDS AND
THE FIXED ACCOUNT
American National Insurance Company
We are a stock life insurance company chartered under Texas law in 1905. We
write life, health and accident insurance and annuities and are licensed to do
life insurance business in 49 states, the District of Columbia, Puerto Rico,
Guam, and American Samoa. Our home office is located at the American National
Insurance Building, One Moody Plaza, Galveston, Texas 77550. The Moody
Foundation, a charitable foundation established for charitable and educational
purposes, owns approximately 23.6% of our stock and the Libbie S. Moody Trust, a
private trust, owns approximately 37.5%.
We are subject to regulation by the Texas Department of Insurance. In addition,
we are subject to the insurance laws and regulations of other states within
which we are licensed to operate. On or before March 1 of each year we must
submit to the Texas Department of Insurance a filing describing our operations
and reporting on our financial condition and that of the Separate Account as of
December 31 of the preceding year. Periodically, the Department examines our
liabilities, and reserves and those of the Separate Account and certifies their
adequacy. A full examination of our operations is also conducted periodically by
the National Association of Insurance Commissioners.
The Separate Account
We established the separate account under Texas law on July 30, 1987. The assets
of the separate account are held exclusively for your benefit and the benefit of
other people entitled to payments under variable life policies we issue. We are
the legal holders of the separate account's assets. The assets are held separate
and apart from the General Account assets. We maintain records of all purchases
and redemptions of shares of Eligible Portfolios by each of the subaccounts. We
will at all times maintain assets in the separate account with a total market
value at least equal to the reserve and other contract liabilities of the
separate account. Liabilities arising out of other aspects of our business
cannot be charged against the assets of the separate account. Income, as well as
both realized and unrealized gains or losses from the separate account's assets,
are credited to or charged against the separate account without regard to
income, gains or losses arising out of other aspects of our business. If,
however, the separate account's assets exceed its liabilities, the excess shall
be available to cover the liabilities of our General Account.
The separate account is registered with the Securities and Exchange Commission
("SEC") as a unit investment trust, which is a type of investment company. Such
registration does not involve any SEC supervision of the management or
investment policies or practices of the separate account.
The separate account will purchase and redeem shares of the Eligible Portfolios
at net asset value. The net asset value of a share is equal to the total assets
of the portfolio less the total liabilities of the portfolio divided by the
number of shares outstanding.
We will redeem shares in the Eligible Portfolios as needed to:
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. collect charges,
. pay the Surrender Value,
. secure loans,
. provide benefits, or
. transfer assets from one subaccount to another, or to the Fixed Account.
Any dividend or capital gain distribution received from an Eligible Portfolio
will be reinvested immediately at net asset value in shares of that Eligible
Portfolio and retained as assets of the corresponding subaccount.
The separate account may include other subaccounts that are not available under
the Contract. We may from time to time discontinue the availability of some of
the subaccounts. If the availability of a subaccount is discontinued, we may
redeem any shares in the corresponding Eligible Portfolio and substitute shares
of another registered, open-end management company.
We may also establish additional subaccounts. Each new subaccount would
correspond to a portfolio of a registered, open-end management company. We would
establish the terms upon which existing Contract Owners could purchase shares in
such portfolios.
If any of these substitutions or changes is made, we may change the Contract by
sending an endorsement. We may:
. operate the separate account as a management company,
. de-register the separate account if registration is no longer required,
. combine the separate account with other separate accounts,
. restrict or eliminate any voting rights associated with the separate account,
or
. transfer the assets of the separate account relating to the Contracts to
another separate account.
We would, of course, not make any changes to the menu of Eligible Portfolios or
to the separate account without complying with applicable laws and regulations.
Such laws and regulations may require notice to and approval from the Contract
Owners, the SEC, and state insurance regulatory authorities.
Since we are the legal holders of the Eligible Portfolio shares held by the
separate account, we can vote on any matter that may be voted upon at a
shareholder's meeting. To the extent required by law, we will vote all shares of
the Eligible Portfolios held in the separate account at shareholders' meetings
in accordance with instructions we receive from you and other Contract Owners.
The number of votes for which each Contract Owner has the right to provide
instructions will be determined as of the record date selected by the Board of
Directors of the American National Fund, the Fidelity Funds, the T. Rowe Price
Funds, the MFS Fund, the Federated Fund, or the Alger American Fund, as the case
may be. We will furnish Contract Owners with the proper forms, materials, and
reports to enable them to give us these instructions. We will vote Eligible
Portfolio shares held in each subaccount for which no timely instructions from
Contract Owners are received and shares held in each subaccount which do not
support Contract Owner interests in the same proportion as those shares in that
subaccount for which timely instructions are received. Voting instructions to
abstain on any item to
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be voted will be applied on a pro rata basis to reduce the votes eligible to be
cast. Should applicable federal securities laws or regulations permit, we may
vote shares of the American National Fund, the Fidelity Funds, the T. Rowe Price
Funds, the MFS Fund, the Federated Fund, and the Alger American Fund in our own
right. We may, if required by state insurance officials, disregard voting
instructions if those instructions would require shares to be voted to cause a
change in the subclassification, or investment objectives, or Contract of one or
more of the Eligible Portfolios, or to approve or disapprove an investment
adviser or principal underwriter for the Eligible Portfolios. In addition, we
may disregard voting instructions that would require changes in the investment
objectives or policies of any Eligible Portfolio or in an investment adviser or
principal underwriter for the Eligible Portfolios, if we reasonably disapprove
those changes in accordance with applicable federal regulations. If we do
disregard voting instructions, we will advise Contract Owners of that action and
our reasons for the action in the next annual report or proxy statement to
Contract Owners.
The separate account is not the only separate account that invests in the
Eligible Portfolios. Other separate accounts, including those funding other
variable life contracts, variable annuity contracts, other insurance contracts
and retirement plans, invest in certain of the Eligible Portfolios. We do not
currently see any disadvantages to you resulting from the Eligible Portfolios
selling shares to fund products other than the Contract. However, there is a
possibility that a material conflict of interest may arise between the Contract
Owners and the owners of variable life insurance contracts and the owners of
variable annuity contracts whose values are allocated to another separate
account investing in the Eligible Portfolios. In addition, there is a
possibility that a material conflict may arise between the interests of Contract
Owners or owners of other contracts and the retirement plans, which invest in
the Eligible Portfolios or those plans participants. If a material conflict
arises, we will take any necessary steps, including removing the Eligible
Portfolio from the separate account, to resolve the matter. The Board of
Directors of each Eligible Portfolio will monitor events in order to identify
any material conflicts that may arise and determine what action, if any should
be taken in response to those events or conflicts. See the accompanying
prospectuses for the Eligible Portfolios for more information.
The Funds
Each subaccount invests in shares of a corresponding Eligible Portfolio.
The investment objectives and policies of each Eligible Portfolio are summarized
below. The Eligible Portfolios may not achieve their stated objectives. You will
be notified of any material change in the investment policy of any portfolio in
which you have an interest.
Each Eligible Portfolio's total operating expenses will include fees for
management, shareholder services, and other expenses, such as custodial, legal,
and other miscellaneous fees. The prospectuses for the American National Fund,
the Fidelity Funds, the T. Rowe Price Funds, the MFS Fund, the Federated Fund,
and the Alger American Fund contain more detailed information about the Eligible
Portfolios, including a description of investment objectives, restrictions,
expenses and risks. You should carefully read those prospectuses and retain them
for future reference.
You should periodically review your allocation to make sure that your investment
choices are still appropriate in light of any market developments or changes in
your personal financial situation.
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. The American National Fund - currently has the following series or
portfolios, each of which is an Eligible Portfolio:
. American National Money Market Portfolio seeks the highest current income
consistent with the preservation of capital and maintenance of liquidity.
. American National Growth Portfolio seeks to achieve capital appreciation.
. American National Balanced Portfolio seeks to conserve principal, produce
reasonable current income, and achieve long-term capital appreciation.
. American National Equity Income Portfolio seeks to achieve growth of
capital and/or current income.
. American National High Yield Portfolio seeks to provide a high level of
current income. As a secondary investment objective, the Portfolio seeks
capital appreciation.
. American National International Stock Portfolio seeks to obtain long-term
growth of capital through investments primarily in the equity securities
of established, non-U.S. countries.
. American National Small-cap/mid-cap Portfolio seeks to provide long-term
capital growth by investing primarily in stocks of small to medium-sized
companies.
. American National Government Bond Portfolio seeks to provide as high a
level of current income, liquidity, and safety of principal as is
consistent with prudent investment risks through investment in a portfolio
consisting primarily of securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities.
Securities Management and Research, Inc. ("SM&R"), which is a subsidiary of
American National Insurance Company, is the American National Fund's investment
adviser. SM&R provides investment advisory and portfolio management services to
us and other clients. SM&R maintains a staff of experienced investment personnel
and related support facilities.
. The Fidelity Funds - currently have fourteen series or portfolios, the
following five of which are Eligible Portfolios:
. Fidelity Asset Manager Portfolio seeks high total return with reduced risk
over the long-term by allocating its assets among stocks, bonds, and
short-term instruments.
. Fidelity Asset Manager: Growth Portfolio seeks to maximize total return by
allocating its assets among stocks, bonds, short-term instruments, and
other investments.
. Fidelity Index 500 Portfolio seeks investment results that correspond to
the total return of common stocks publicly traded in the United States, as
represented by the S&P 500. The portfolio normally invests at least 80% of
its assets in common stocks included in the S&P 500. The portfolio seeks
to achieve a 98% or better correlation between its total return and the
total return of the index.
. Fidelity Growth Opportunities Portfolio seeks to provide capital growth.
The portfolio normally invests its assets primarily in common stocks. The
portfolio may also invest in other types of securities, including bonds,
which may be lower-quality debt securities.
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. Fidelity Contrafund Portfolio seeks long-term capital appreciation. The
portfolio normally invests primarily in common stocks. The portfolio
invests in securities of companies whose value the portfolio believes is
not fully recognized by the public.
The Fidelity Management & Research Company ("FMR") is the Fidelity Funds'
investment adviser. FMR provides a number of mutual funds and other clients with
investment research and portfolio management services. Fidelity Management &
Research (U.K.) Inc. and Fidelity Management & Research (Far East) Inc., are
wholly owned subsidiaries of FMR, provide research with respect to foreign
securities. FMR maintains a large staff of experienced investment personnel and
a full complement of related support facilities.
. The T. Rowe Price Funds - currently have the following series or portfolios,
each of which are Eligible Portfolios:
. T. Rowe Price International Stock Portfolio seeks to provide long-term
growth of capital through investments primarily in common stocks of
established non-U.S. companies. The portfolio expects to invest
substantially all of the portfolio's assets (with a minimum of 65%) in
established companies beyond U.S. borders. The portfolio's focus will
typically be on large and, to a lesser extent, medium-sized companies.
. T. Rowe Price Mid-cap Growth Portfolio seeks to provide long-term capital
appreciation by investing in mid-cap stocks with potential for above-
average earnings growth. The portfolio will invest at least 65% of its
assets in a diversified portfolio of common stocks of mid-cap companies
whose earnings are expected to grow at a faster rate than the average
company. The portfolio considers "mid-cap companies" as companies with
market capitalization (number of shares outstanding multiplied by share
price) between $300 million and $5 billion. Most of the portfolio's assets
will be invested in U. S. common stocks.
. T. Rowe Price Equity Income Portfolio seeks to provide substantial dividend
income as well as long-term growth of capital through investments in common
stocks of established companies. The portfolio will normally invest at
least 65% of its assets in the common stocks of well-established companies
paying above-average dividends.
. T. Rowe Price Limited-term Bond Portfolio seeks a high level of income
consistent with modest price fluctuation by investing primarily in
investment grade debt securities.
T. Rowe Price Associates, Inc. is responsible for selection and management of
the portfolio investments of T. Rowe Price Equity Securities and T. Rowe Price
Fixed Income Securities. Rowe Price-Fleming International, Inc., a joint venture
between T. Rowe Price Associates, Inc. and Robert Fleming Holdings Limited, is
responsible for selection and management of the portfolio investments of T. Rowe
Price International Series.
. The MFS Fund - currently has the following portfolios, each of which are
Eligible Portfolios:
. MFS Capital Opportunities Portfolio seeks capital appreciation. Dividend
income, if any, is a consideration incidental to the portfolio's objective
of capital appreciation. While the portfolio's policy is to invest
primarily in common stocks, it may seek appreciation in other types of
securities such as fixed income securities (which may be unrated),
convertible bonds, convertible preferred stocks and warrants. These types
of securities are purchased when relative values make such
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purchases appear attractive either as individual issues or as types of
securities in certain economic environments. The portfolio may invest in
lower rated fixed income securities or comparable unrated securities.
. MFS Emerging Growth Portfolio seeks to provide long-term growth of capital
through investing primarily in common stocks of emerging growth companies,
which involves greater risk than is customarily associated with investment in
more established companies. The portfolio may invest in a limited extent in
lower rated fixed income securities or comparable unrated securities.
. MFS Research Portfolio seeks to provide long-term growth of capital and
future income by investing a substantial proportion of its assets in the
common stocks or securities convertible into common stocks of companies
believed to possess better than average prospects for long-term growth. No
more than 5% of the portfolio's convertible securities, if any, will consist
of securities in lower rated categories or securities believed to be of
similar quality to lower rated securities. The portfolio may invest to a
limited extent in lower rated fixed income securities or comparable unrated
securities.
. MFS Growth With Income Portfolio seeks to provide reasonable current income
and long-term growth and income. Under normal market conditions, the
portfolio will invest at least 65% of its assets in common stocks or
securities convertible into common stocks that are believed to have long-term
prospects for growth and income. The portfolio may invest up to 75% of its
net assets in foreign securities, which are not traded on an U. S. exchange.
Massachusetts Financial Service Company is responsible for selection and
management of the portfolio investments of the MFS Fund.
. The Federated Fund - currently has the following portfolios, each of which
are Eligible Portfolios:
. Federated Utility Fund Ii Portfolio seeks to achieve high current income and
moderate capital appreciation. The portfolio invests primarily in equity and
debt securities of utility companies.
. Federated Growth Strategies Portfolio seeks capital appreciation. The
portfolio invests at least 65% of its assets in equity securities of
companies with prospects for above average growth in earnings and dividends.
. Federated International Small Company Fund Ii Portfolio seeks to long term
growth of capital by investing primarily in equity securities of foreign
companies that have a market capitalization at the time of purchase of $1.5
billion or less.
. Federated High Income Bond Portfolio seeks high current income. The portfolio
invests in fixed income securities, which are lower rated corporate debt
obligations, which are commonly referred to as "junk bonds". The risk in
investing in junk bonds is described in the prospectus for the Federated
Fund, which should be read carefully before investing.
. Federated Equity Income Fund II Portfolio seeks to provide above average
income and capital appreciation by investing in income producing equity
securities including common stocks, preferred stocks, and debt securities
that are convertible into common stocks, in cash and cash items during times
of unusual conditions to maintain liquidity. Cash items may include
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commercial paper, Europaper, certificates of deposit, obligations of the U.
S. government, repurchase agreements, and other short-term instruments.
. The Alger American Fund - currently has the following series or portfolios,
each of which are Eligible Portfolios:
. Alger American Small Capitalization Portfolio seeks long-term capital
appreciation. It focuses on small, fast growing companies that offer
innovative products, services, or technologies to a rapidly expanding
marketplace.
. Alger American Growth Portfolio seeks to achieve long-term capital
appreciation. It focuses on growing companies that generally have broad
product lines, markets, financial resources, and depth of management.
. Alger American Midcap Growth Portfolio seeks to achieve long-term capital
appreciation. It focuses on midsize companies with promising growth
potential.
. Alger American Leveraged Allcap Portfolio seeks to achieve long-term capital
appreciation. Under normal circumstances, the portfolio invests in the equity
securities of companies of any size, which demonstrate promising growth
potential. The portfolio can leverage, that is, borrow money, up to one-third
of its total assets to buy additional securities. By borrowing money, the
portfolio has the potential to increase its returns if the increase in the
value of the securities purchased exceeds the cost of borrowing, including
interest paid on the money borrowed.
. Alger American Income & Growth Portfolio primarily seeks to provide a high
level of dividend income; its secondary goal is to provide capital
appreciation. The portfolio invests in dividend paying equity securities,
such as common or preferred stocks, preferably those that the manager
believes also offer opportunities for capital appreciation.
. Alger American Balanced Portfolio seeks current income and long-term capital
appreciation. It focuses on stocks of companies with growth potential and
fixed-income securities, with emphasis on income-producing securities that
appear to have some potential for capital appreciation.
Fred Alger Management, Inc. is the Alger American Fund's investment adviser.
Fred Alger Management, Inc. also provides investment advisory and portfolio
management services to us and to other clients. Fred Alger Management, Inc.
maintains a staff of experienced investment personnel and related support
facilities.
The accompanying prospectuses should be read in conjunction with this prospectus
before investing and contain a full description of the above funds, their
investment policies and restrictions, risks, charges and expenses and other
aspects of their operation.
We have entered into or may enter agreements with the investment advisor or
distributor of the Eligible Portfolios. These agreements require us to provide
administrative and other services. In return, we receive a fee based upon an
annual percentage of the average net asset amount we invested on behalf of the
separate account and our other separate accounts. Some advisors or distributors
may pay us a greater percentage than others.
Fixed Account
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You can allocate some or all of your premium payments to the Fixed Account. You
can also, subject to certain limitations, transfer amounts from the separate
account to the Fixed Account or from the Fixed Account to the separate account.
(See "Transfers," page __.)
We establish the Declared Rate and may adjust the rate each month; however, we
guarantee an effective annual rate of at least 3.0% compounded daily.
Payments allocated to the Fixed Account and transfers from the separate account
to the Fixed Account are placed in our General Account, which supports insurance
and annuity obligations. The General Account includes all of our assets, except
those assets segregated in our separate accounts. We have discretion over the
investment of assets of the General Account, subject to applicable law. We bear
the risk that the investments in the General Account will lose money. You bear
the risk that the Declared Rate will fall to a lower rate.
Interests in the General Account have not been registered with the SEC as
securities and the General Account has not been registered as an investment
company. Accordingly, neither the General Account nor any interest in the
General Account is generally subject to the provisions of federal securities
laws. The SEC has not reviewed the disclosures in this prospectus relating to
the Fixed Account portion of the Contract. However, disclosures regarding the
Fixed Account portion of the Contract may be subject to generally applicable
provisions of the federal securities laws regarding the accuracy and
completeness of statements made in prospectuses.
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FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is general and is not tax advice.
Introduction
The following summary provides a general description of the federal income tax
considerations relating to the Contract. This summary is based upon our
understanding of the present federal income tax laws as currently interpreted by
the Internal Revenue Service ("IRS"). Because of the complexity of such laws
and the fact that tax results will vary according to the factual status of the
specific Contract involved tax advice from a qualified tax advisor may be needed
by a person contemplating the purchase of a Contract or the exercise of certain
elections under the Contract. These comments concerning federal income tax
consequences are not an exhaustive discussion of all tax questions that might
arise under the Contract. Further, these comments do not take into account any
federal estate tax and gift, state, or local tax considerations which may be
involved in the purchase of a Contract or the exercise of certain elections
under the Contract. For complete information on such federal and state tax
considerations, a qualified tax advisor should be consulted. We do not make any
guarantee regarding the tax status of any Contract, and the following summary is
not tax advice.
Tax Status of the Contract
In order to qualify as a life insurance contract for federal income tax purposes
and to receive the tax treatment normally accorded life insurance contracts
under federal tax law, a Contract must satisfy certain requirements which are
set forth in the Internal Revenue Code (the "Code"). Guidance as to how these
requirements apply is limited. Nevertheless, we believe that Contracts issued
on a standard or preferred basis should satisfy the applicable requirements.
There is less guidance, however, with respect to Contracts issued on a sub-
standard basis and it is not clear whether such Contracts will in all cases
satisfy the applicable requirements. We reserve the right to restrict Contract
transactions and to make other modifications in order to bring the Contract into
compliance with such requirements.
In certain circumstances, owners of variable life insurance contracts may be
considered for federal income tax purposes to be the owners of the assets of the
separate account supporting their contracts due to their ability to exercise
investment control over those assets. Where this is the case, the Contract
Owners would be taxed on income and gains attributable to separate account
assets. There is little guidance in this area, and some features of the
Contracts, such as the flexibility of a Contract Owner to allocate premium
payments and transfer Accumulation Value, have not been explicitly addressed in
published rulings. While we believe that the Contracts do not give Contract
Owners investment control over separate account assets, we reserve the right to
modify the Contracts as necessary to prevent a Contract Owner from being treated
as the owner of the separate account assets.
In addition, the Code requires that the investments of the separate account be
"adequately diversified" in order for the Contracts to be treated as life
insurance contracts for federal income tax purposes. It is intended that the
separate account, through the Eligible Portfolios, will satisfy these
diversification requirements.
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The following discussion assumes that the Contract will qualify as a life
insurance contract for federal income tax purposes.
Tax Treatment of Contract Proceeds
In general, we believe that the Death Benefit Proceeds under a Contract will be
excludable from the gross income of the Beneficiary.
Generally, the Contract Owner will not be deemed to be in constructive receipt
of the Accumulation Value until there is a distribution. When distributions
from a Contract occur, or when loans are taken out from or secured by a
Contract, the tax consequences depend on whether the Contract is classified as a
"Modified Endowment Contract."
Depending on the circumstances, the exchange of a Contract, a change in the
Contract's Death Benefit option, a loan, a partial or full surrender, the
continuation of the Contract beyond the Insured's 100th birthday, a change in
ownership, or an assignment of the Contract may have federal income tax
consequences.
Modified Endowment Contracts. Whether a Contract is treated as a Modified
Endowment Contract depends upon the amount of premiums paid in relation to the
Death Benefit provided under the Contract. The rules for determining whether a
Contract is a Modified Endowment Contract are extremely complex. In general
however, a Contract will be considered to be a Modified Endowment Contract if
the accumulated premium payments made at any time during the first seven
Contract Years exceed the sum of the net level premiums which would have been
paid on or before such time if the Contract provided for paid-up future benefits
after the payment of seven level annual premium payments.
In addition, if a Contract is "materially changed," it may cause such Contract
to be treated as a Modified Endowment Contract. The material change rules for
determining whether a Contract is a Modified Endowment Contract are also
extremely complex. In general, however, the determination of whether a Contract
will be a Modified Endowment Contract after a material change depends upon (i)
the relationship of the Death Benefit at the time of change to the Accumulation
Value at the time of such change, and (ii) the additional premiums paid in the
seven Contract Years following the date on which the material change occurs.
The manner in which the premium limitation and material change rules should be
applied to certain features of the Contract and its riders is unclear. If we
determine that a Contract Owner has made excessive premium payments that will
cause a Contract to be considered a Modified Endowment Contract, we will notify
the Contract Owner of the tax consequences and give the Contract Owner the
option of having the excessive premiums refunded. If the Contract Owner
requests a refund within 30 days after receipt of such notice, we will refund
the excessive premium payments to prevent the Contract from becoming a Modified
Endowment Contract.
Due to the Contract's flexibility, classification of a Contract as a Modified
Endowment Contract will depend upon the individual circumstances of each
Contract. Accordingly, a prospective Contract Owner should contact a qualified
tax advisor before purchasing a Contract to determine the circumstances under
which the Contract would be a Modified Endowment Contract. In addition, a
Contract Owner should contact a tax advisor before making any change to a
Contract, exchanging a
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Contract, or reducing Contract benefits, to determine whether such change would
cause the Contract (or the new Contract in the case of an exchange) to be
treated as a Modified Endowment Contract.
If a Contract becomes a Modified Endowment Contract, distributions such as
partial surrenders and loans that occur during the Contract Year it becomes a
Modified Endowment Contract and any subsequent Contract Year will be taxed as
distributions from a Modified Endowment Contract. In addition, distributions
from a Contract within two years before it becomes a Modified Endowment Contract
will be taxed in this manner. This means that a distribution made from a
Contract that is not a Modified Endowment Contract could later become taxable as
a distribution from a Modified Endowment Contract.
Whether a Contract is or is not a Modified Endowment Contract, upon a complete
surrender or a lapse or termination of a Contract if the amount received plus
the amount of any indebtedness exceeds the total investment in the Contract
(described below), the excess will generally be treated as ordinary income
subject to tax.
Distributions Other Than Death Benefit Proceeds from Modified Endowment
Contracts. Contracts classified as Modified Endowment Contracts will be subject
to the following tax rules:
(1) All distributions from such a Contract (including distributions upon partial
or full surrender) are treated as ordinary income subject to tax up to the
amount equal to the excess (if any) of the Accumulation Value immediately
before the distribution over the investment in the Contract at such time.
(2) Loans taken from (or secured by) such a Contract are treated as
distributions from such a Contract and taxed accordingly. This includes
unpaid loan interest that is added to the principal of a loan.
(3) A 10 percent penalty tax is imposed on the portion of any distribution from
such a Contract that is included in income. This includes any loan taken
from or secured by such a Contract. This penalty tax does not apply if the
distribution or loan:
(a) is made on or after the Contract Owner reaches actual age 59 1/2;
(b) is attributable to the Contract Owner's becoming disabled; or
(c) is part of a series of substantially equal periodic payments for (i) the
life (or life expectancy) of the Contract Owner, or (ii) the joint lives
(or joint life expectancies) of the Contract Owner and the Beneficiary.
Distributions Other Than Death Benefit Proceeds from Contracts that are not
Modified Endowment Contracts. Distributions other than Death Benefit Proceeds
from a Contract that is not classified as a Modified Endowment Contract
generally are treated first as a recovery of the Contract Owner's investment in
the Contract. After the recovery of all investment in the Contract, additional
amounts distributed are taxable income. However, certain distributions which
must be made in order to enable the Contract to continue to qualify as a life
insurance contract for federal income tax purposes if Contract benefits are
reduced during the first 15 Contract Years may be treated in whole or in part as
ordinary income subject to tax.
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Loans. Loans from a Contract (or secured by a Contract) that is not a Modified
Endowment Contract are generally not treated as distributions. Instead, such
loans are treated as indebtedness of the Contract Owner. However, the tax
consequences associated with loans that are outstanding after the first 15
Contract Years are less clear and a tax adviser should be consulted about such
loans. Interest paid on a loan generally is not be tax-deductible. The
Contract Owner should consult a tax advisor regarding the deductibility of
interest paid on a loan.
Finally, neither distributions from nor loans from (or secured by) a Contract
that is not a Modified Endowment Contract are subject to the 10 percent
additional income tax.
Investment in the Contract. "Investment in the Contract" means:
(a) the aggregate amount of any premium payments or other consideration paid
for a Contract; minus
(b) the aggregate amount of distributions received under the Contract which is
excluded from the gross income of the Contract Owner (except that the
amount of any loan from, or secured by, a Contract that is a Modified
Endowment Contract, to the extent such amount is excluded from gross
income, will be disregarded); plus
(c) the amount of any loan from, or secured by, a Contract that is a Modified
Endowment Contract to the extent that such amount is included in the gross
income of the Contract Owner.
Multiple Contracts. All Modified Endowment Contracts that are issued by us (or
our affiliates) to the same Contract Owner during any calendar year are treated
as one Modified Endowment Contract. This applies to determining the amount
includible in the Contract Owner's income when a taxable distribution occurs.
Other Contract Owner Tax Matters. The tax consequences of continuing the
Contract beyond the Insured's 100th year are unclear. You should consult a tax
advisor if you intend to keep the Contract in force beyond the Insured's 100th
year.
Businesses can use the Contracts in various arrangements, including nonqualified
deferred compensation or salary continuance plans, split dollar insurance plans,
executive bonus plans, tax exempt and nonexempt welfare benefit plans, retiree
medical benefit plans and others. The tax consequences of such plans may vary
depending on the particular facts and circumstances.
If you are purchasing the Contract for any arrangement the value of which
depends in part on its tax consequences, you should consult a qualified tax
adviser. In recent years, moreover, Congress has adopted new rules relating to
life insurance owned by businesses. Any business contemplating the purchase of
a new Contract or a change in an existing Contract should consult a tax adviser.
Federal, state and local estate, inheritance, transfer and other tax
consequences of ownership or receipt of Contract proceeds depend on the
circumstances of each Contract Owner or Beneficiary. A tax advisor should be
consulted on these consequences.
Possible Tax Law Changes. Although the likelihood of legislative changes is
uncertain, there is always the possibility that the tax treatment of the
Contract could change by legislation or otherwise.
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Moreover, it is possible that any change could be retroactive (that is,
effective prior to the date of change). Consult a tax adviser with respect to
legislative developments and their effect on the Contract.
American National's Income Taxes'
American National is taxed as a life insurance company under the Code. Under
current federal income tax law, American National is not taxed on the separate
account's operations. Thus, we currently do not deduct a charge from the
separate account for federal income taxes. Nevertheless, we reserve the right
in the future to make a charge for any such tax that we determine to be properly
attributable to the separate account or to the Contracts.
Under current laws in some states, we may incur state and local taxes (in
addition to premium taxes for which a deduction from premium payments is
currently made). At present, these taxes are not significant and we are not
currently charging for them. However, we may deduct charges for such taxes in
the future.
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OTHER INFORMATION
Sale of the Contract
SM&R, one of our wholly-owned subsidiaries, is the principal underwriter of the
Contract. SM&R was organized December 15, 1964 under the laws of the State of
Florida. SM&R is a registered broker-dealer and a member of the National
Association of Securities Dealers. (See the American National Fund's
prospectus.)
SM&R will pay commissions to its registered representatives who sell the
Contracts based upon a commission schedule. The commissions to the registered
representatives will not exceed ___._% of the total premium contribution. In
later years, the registered representatives will receive renewal commissions
that will not exceed _.__% of the total contributions paid. We may pay
registered representatives who meet certain production standards additional
compensation. SM&R will pay overriding commissions to managers and we may pay
bonuses to the managers for the sale of the Contract. SM&R and the Company may
also authorize other registered broker-dealers and their registered
representatives to sell the Contract.
The Contract
The Contract, the application, any supplemental applications, and any riders,
amendments, or endorsements make up the entire Contract. Only statements in the
application attached to the Contract and any supplemental applications made a
part of the Contract can be used to contest a claim or the validity of the
Contract. Any changes must be approved in writing by the president, vice
president, or secretary of American National. No agent has the authority to
alter or modify any of the terms, conditions or agreements of the Contract or to
waive any of its provisions. Differences in state laws may require us to offer
a Contract in a state that has suicide, incontestability, refund provisions,
surrender charges or other provisions more favorable than provisions in other
states.
Control of Contract. Subject to the rights of any irrevocable Beneficiary and
assignee of record, all rights, options, and privileges belong to the Contract
Owner, if living; otherwise to any contingent owner or owners, if living;
otherwise to the estate of the last Contract Owner to die. If the Contract
Owner is a minor, first the applicant, then the Beneficiary, if living and
legally competent, may exercise all rights of ownership.
Beneficiary. You can name primary and contingent beneficiaries. Initial
Beneficiary (ies) is specified in the application. Payments will be shared
equally among Beneficiaries of the same class unless otherwise stated. If a
Beneficiary dies before the Insured, payments will be made to any surviving
Beneficiaries of the same class; otherwise to any Beneficiary (ies) of the next
class; otherwise to the estate of the Insured.
Change of Beneficiary. Unless the Beneficiary designation is irrevocable, you
can change the Beneficiary by written request on a Change of Beneficiary form at
any time during the Insured's lifetime. We may require that the Contract be
returned to the Home Office for endorsement of any change, or that other forms
be completed. The change will take effect as of the date the change is recorded
at the Home Office. We will not be liable for any payment made or action taken
before the change is recorded. There is no limit on the number of Beneficiary
changes that may be made.
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Change in Contract Owner or Assignment. In order to change the Contract Owner
or assign Contract rights, an assignment of the Contract must be made in writing
and filed at our Home Office. The change will take effect as of the date the
change is recorded at our Home Office, and we will not be liable for any payment
made or action taken before the change is recorded. Payment of proceeds is
subject to the rights of any assignee of record. No partial or contingent
assignment of the Contract will be permitted. A collateral assignment is not a
change of ownership.
Incontestability. The Contract is incontestable after it has been in force for
two years from the Date of Issue during the lifetime of the Insured. An
increase in the Specified Amount or addition of a rider after the Date of Issue
shall be incontestable after such increase or addition has been in force for two
years from its Effective Date during the lifetime of the Insured. However, this
two-year provision shall not apply to riders that provide disability or
accidental death benefits. Any reinstatement of a Contract shall be
incontestable during the lifetime of the Insured, only after having been in
force for two years after the Effective Date of the reinstatement.
Misstatement of Age or Sex. If the age or sex of the Insured or any person
insured by rider has been misstated, the amount of the Death Benefit will be
adjusted as provided for in the Contract.
Suicide. Suicide within two years after Date of Issue is not covered by the
Contract unless otherwise provided by a state's insurance law. If the Insured,
while sane or insane, commits suicide within two years after the Date of Issue,
we will pay only the premiums received less any partial surrenders and Contract
Debt. If the Insured, while sane or insane, commits suicide within two years
after the Effective Date of any increase in the Specified Amount, our liability
with respect to such increase will only be the total cost of insurance applied
to the increase. If the Insured, while sane or insane, commits suicide within
two years from the Effective Date of reinstatement, our liability with respect
to such reinstatement will only be for the return of cost of insurance and
expenses, if any, paid on or after the reinstatement.
Postponement of Payments. Payment of any amount upon refund, full surrender,
partial surrender, loans, benefits payable at death, and transfers, which
require valuation of a subaccount, may be postponed whenever: (1) the New York
Stock Exchange is closed other than customary weekend and holiday closings, or
trading on the New York Stock Exchange is restricted as determined by the SEC;
(2) the SEC by order permits postponement for the protection of Contract Owners;
or (3) an emergency exists, as determined by the SEC, as a result of which
disposal of securities is not reasonably practicable or it is not reasonably
practicable to determine the value of the separate account's Accumulation Value.
Surrenders, loans or partial surrenders from the Fixed Account may be deferred
for up to 6 months from the date of written request.
Additional Insurance Benefits (Riders). Subject to certain requirements,
certain additional optional benefits may be obtained. The cost of any such
additional insurance benefits, which will be provided by "riders" to the
Contract, will be deducted as part of the Monthly Deduction. Riders in force
during the time the Guaranteed Coverage Benefit is in effect will increase the
Guaranteed Coverage Premium requirement.
Dividends
The Contract is non-participating and therefore is not eligible for dividends
and does not participate in any distribution of our surplus.
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LEGAL MATTERS
Greer, Herz and Adams, L.L.P., our general counsel, has reviewed various matters
of Texas law pertaining to the Contract, including the validity of the Contract
and our right to issue the Contract.
LEGAL PROCEEDINGS
The Company and its affiliates, like other life insurance companies, are
involved in lawsuits, including class action lawsuits. In some class action and
other lawsuits involving insurers, substantial damages have been sought and/or
material settlement payments have been made. Although the outcome of any
litigation cannot be predicted with certainty, we believe that at the present
time no lawsuits are pending or threatened that are reasonably likely to have a
material adverse impact on the separate account or us.
REGISTRATION STATEMENT
We filed a registration statement covering information about the Contract with
the SEC. The registration statement, and its subsequent amendments, included
this prospectus, but it also contained additional information. This prospectus
is simply a summary of the contents of the Contract and related legal
instruments. If you want complete information regarding any of the matters
described in this prospectus, you should consult the registration statement.
EXPERTS
The consolidated financial statements of American National Insurance Company and
subsidiaries as of December 31, 2000, and for the year then ended, are included
in this prospectus and have been audited by KPMG Peat Marwick LLP, independent
public accountant, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
The consolidated financial statements of American National Insurance Company and
subsidiaries as of December 31, 1999, and for the years then ended, are included
in this prospectus and have been audited by Arthur Andersen LLP, independent
public accountant, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
As stated in his opinion that was filed as an exhibit to the registration
statement, Rex D. Hemme has examined the actuarial matters included in this
prospectus.
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SENIOR EXECUTIVE OFFICERS AND
DIRECTORS OF
AMERICAN NATIONAL INSURANCE COMPANY
NAME
Position(s) with American National Insurance Company
Principal Occupations Last Five Years and Positions Held
--------------------------------------------------------------------------------
ROBERT L. MOODY
Chairman of the Board, Director, and Chief Executive Officer
American National: President, January 1996 to April 2000t; Chairman of the
Board, April 1982 to present; Chief Executive Officer, July 1991 to present; and
Director, March 1960 to present.
ANREM Corporation: Director, September 1985 to present. Moody Bancshares, Inc.:
Director and President, 1982 to present. Moody Bank Holding Company, Inc.:
Director and President, 1988 to present. Moody National Bank of Galveston:
President, 1980 to 1993; Chairman of the Board, 1980 to present. Director since
1969. National Western Insurance Company: Chairman of the Board, Director, and
Chief Executive Officer, 1971 to present. The Moody Foundation: Trustee, 1955 to
present. Gal-Tex Hotel Corporation: Chairman of the Board and Director, 1954 to
present. Gal-Tenn Hotel Corporation: Director. GTG Corporation: Director. Gal-
Tex Management Co.: Director. Gal-Tex Woodstock, Inc.: Director. New Paxton
Hotel Corporation: Director. Transitional Learning Center at Galveston: Chairman
of the Board and Director. The Moody Endowment: Chairman of the Board and
Director. The Mary Moody Northen, Inc.: Director. Gal-Tex Crockett, Inc.:
Director.
--------------------------------------------------------------------------------
G. RICHARD FERDINANDTSEN
Director, President and Chief Operating Officer
American National: President and Chief Operating Officer, May 2000 to present;
Director, 1998 to present; Senior Executive Vice President and Chief Operating
Officer, April 1997 to April 2000; Senior Executive Vice President and Chief
Administrative Officer, April 1996 to April 1997; Senior Vice President, Health
Insurance Operations, April 1993 to April 1996; Senior Vice President, Director
of Group Insurance, July 1990 to April 1993. American National Life Insurance
Company of Texas: Chairman of the Board, President, Chief Executive Officer and
Director, 1998 to present; and Vice President, Health Insurance Operations,
April 1993 to 1998. American National Property and Casualty Company: Director,
November 1992 to present; and Vice Chairman of the Board, 1998 to present.
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American National General Insurance Company: Director, November 1992 to present;
and Vice Chairman of the Board, 1998 to present. American National Lloyds
Insurance Company: Underwriter, March 1993 to present. Pacific P & C, Inc.:
Director, 1995 to present; and Vice Chairman of the Board. Standard Life and
Accident Insurance Company: Director, Chairman of the Board, President, and
Chief Executive Officer, May 1996 to present. Garden State Life Insurance
Company: Director. Securities Management & Research, Inc.: Director.
Comprehensive Investment Services, Inc.: Director. Alternative Benefit
Management, Inc.: Director, President, and Chief Executive Officer. ANMEX
International Services, Inc.: Director and President. ANMEX International,
Inc.: Director and President.
--------------------------------------------------------------------------------
IRWIN M. HERZ, JR.
Director
American National: Director: 1981 to present. Greer, Herz & Adams, L.L.P.:
Partner, March 1980 to present, General Counsel to American National. Three R
Trust: Trustee, April 1971 to present. Garden State Life Insurance Company:
Director, June 1992 to present. American National Property and Casualty
Company: Director. Galveston Housing Authority: Commissioner and Chairman. The
Westcap Corporation: Director, 1983 to 1999.
--------------------------------------------------------------------------------
R. EUGENE LUCAS
Director
American National: Director, April 1981 to present. Gal-Tex Hotel Corporation:
President and Director, March 1971 to present. Gal-Tenn Hotel Corporation:
President and Director, March 1971 to present. Gal-Tex Management Company:
President and Director, May 1985 to present. Gal-Tex Woodstock, Inc.: President
and Director, November 1995 to present. Securities Management and Research,
Inc.: Director, November 1982 to present. ANREM Corporation: Director,
September 1982 to present. Colonel Museum, Inc.: Director, March 1985 to
present. GTG Corporation: President and Director.
--------------------------------------------------------------------------------
E. DOUGLAS MCLEOD
Director
American National: Director, April 1984 to present. ANREM Corporation:
Director, October 1979 to present. National Western Life Insurance Company:
Director, 1979 to present. Independent County Mutual Fire Insurance Company of
Texas: Director, June 1984 to present. Attorney. The Moody Foundation:
Director of Development, May 1982 to present. McLeod Properties: Owner. Texas
State House of Representatives: Past Member. Moody Gardens, Inc.: Chairman and
Director, 1988
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to present. Colonel Museum, Inc.: Vice President and Director, 1985 to present.
Center for Transportation and Commerce: Chairman and Director, 1983 to present.
South Texas College of Law: Director.
--------------------------------------------------------------------------------
FRANCES ANNE MOODY
Director
American National: Director, April 1987 to present. The Moody Foundation:
Executive Director, January 1998 to present and Regional Grants Advisor,
September 1996 to 1998. National Western Life Insurance Company: Director, 1990
to present. The Moody Endowment: Director, 1991 to present. Investments,
Dallas, Texas. Transitional Learning Center at Galveston, Inc.: Director, 1991
to present.
--------------------------------------------------------------------------------
RUSSELL S. MOODY
Director
American National: Director, April 1986 to present. National Western Life
Insurance Company: Director, 1988 to present. Investments, Austin, Texas.
--------------------------------------------------------------------------------
WILLIAM L. MOODY IV
Director
American National: Director, March 1951 to present. Moody National Bank of
Galveston: Director, January 1969 to March 1996, and Advisory Director, March
1996 to present. Moody Ranches, Inc.: President and Director, May 1959 to
present. American National Life Insurance Company of Texas: Director, November
1969 to present. Rosenberg Library: Board of Trustees, 1970 to present.
University of Texas Medical Branch Development Board: Director, 1970 to present.
Investments, Ranching, Oil & Gas, Galveston, Texas.
--------------------------------------------------------------------------------
JOE MAX TAYLOR
Director
American National: Director, April 1992 to present. County of Galveston, Texas:
Sheriff, 1980 to present. Moody Gardens, Inc.: Director and President, 1988 to
present. Transitional Learning Center at Galveston: Director, 1985 to present,
and Vice President. Galveston County Bail-Bond Board: President, 1981 to
present. Fifty Club Board of Galveston: Director, 1981 to present. Landry's
Seafood Restaurants, Inc.: Director, 1993 to present. Pre-Trial Release Board
of Galveston County: 1982 to present. Juvenile Crime Prevention-Intervention
Task Force: Chairman, 1993 to present.
--------------------------------------------------------------------------------
DAVID A. BEHRENS
Executive Vice President
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American National: Executive Vice President, Independent Marketing, January 1999
to present. Lincoln Benefit Life: Director, Senior Vice President, Marketing,
September 1993 to January 1999. American National Life Insurance Company of
Texas: Vice President.
--------------------------------------------------------------------------------
ROBERT A. FRUEND
Executive Vice President
American National: Executive Vice President, November 1988 to present. American
National Property and Casualty Company: Director. American National Life
Insurance Company of Texas: Director and Vice President. American National
General Insurance Company: Chairman of the Board and Director. American National
Insurance Service Company: Director. American National Lloyds Insurance Company:
Director. ANPAC Lloyds Insurance Management, Inc.: Director. Pacific P & C,
Inc.: Director and Chairman of the Board. Securities Management and Research,
Inc.: Director.
--------------------------------------------------------------------------------
BILL J. GARRISON
Executive Vice President
American National: Executive Vice President, Director of Home Service Division,
April 1991 to present. ANMEX International Services, Inc.: Vice President and
Director. ANMEX International, Inc.: Vice President and Director. American
National de Mexico, Compania de Seguros de Vida, S.A. de C.V.: Director.
American National Promotora de Ventas, S.A. de C.V.: Director. Servicios de
Administracion American National: Director.
--------------------------------------------------------------------------------
MICHAEL W. McCROSKEY
Executive Vice President
American National: Executive Vice President- Investments, 1995 to present; and
Senior Vice President-Real Estate and Mortgage Loans, 1986 to 1995. ANREM
Corporation: Director, June 1977 to present; and President, October 1986 to
present. American National Life Insurance Company of Texas: Assistant
Secretary, December 1986 to present. Standard Life and Accident Insurance
Company: Vice President, May 1988 to present. ANTAC, Inc.: President and
Director, 1995 to present. Securities Management and Research, Inc.: President,
Chief Executive Officer, and Director, 1994 to present. American National Funds
Group: President and Director, 1994 to present. SM&R Investments, Inc.
(formerly SM&R Capital Funds, Inc.): Chief Executive Officer; President and
Director, 1994 to present. American National Investment Accounts, Inc.:
President and Director, 1994 to present. Pacific P & C, Inc.: Vice President,
1995 to present. Garden State Life Insurance Company: Vice President, May 1994
to present. American National Property and Casualty Company
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Vice President: June 1994 to present. American National General Insurance
Company: Vice President, June 1994 to present.
--------------------------------------------------------------------------------
GREGORY V. OSTERGREN
Executive Vice President
American National: Executive Vice President and Director of Multiple Line
Marketing, May 2000 to present. American National Property and Casualty
Company: Chairman, President, and Chief Executive Officer, May 2000 to present,
President and Chief Executive Officer, October 1990 to May 2000. American
National General Insurance Company: Director. American National Insurance
Service Company: Director and Chairman of the Board. American National Lloyds
Insurance Company: Director, President, and Chief Executive Officer. ANPAC
Lloyds Insurance Management, Inc.: Director, President, and Chief Executive
Officer. Pacific P & C, Inc.: Director, President and Chief Executive.
--------------------------------------------------------------------------------
JAMES E. POZZI
Executive Vice President
American National: Executive Vice President, Independent Markets, June 1992 to
April 1996; and Executive Vice President, Corporate Planning and Development,
April 1996 to present. American National Life Insurance Company of Texas: Vice
President, April 1993 to present.
--------------------------------------------------------------------------------
RONALD J. WELCH
Executive Vice President
American National: Executive Vice President and Chief Actuary, April 1996 to
present; and Senior Vice President and Chief Actuary, April 1986 to April 1996.
Standard Life and Accident Insurance Company: Director, December 1987 to
present. American National Property and Casualty Company: Director, November
1987 to present. American National General Insurance Company: Director,
November 1987 to present. American National Life Insurance Company of Texas:
Director, November 1986 to present, Actuary, April 1980 to present, and Senior
Vice President, April 1990 to present. Garden State Life Insurance Company:
Chairman of the Board and Director, June 1992 to present: Pacific P & C, Inc.:
Director, 1995 to present. American National Insurance Service Company:
Director, December 1995 to present. Securities, Research & Management, Inc.:
Director. ANMEX International Services, Inc.: Director and Vice President.
ANMEX International, Inc.: Director and Vice President. Alternative Benefit
Management, Inc.: Director.
--------------------------------------------------------------------------------
CHARLES H. ADDISON
Senior Vice President
54
<PAGE>
American National: Senior Vice President, Systems Planning and Computing, April
1978 to present. American National Property and Casualty Company: Director,
November 1981 to present. American National General Insurance Company:
Director, November 1981 to present. Pacific P & C, Inc.: Director, 1995 to
present. Standard Life and Accident Insurance Company: Director, January 1996
to present.
--------------------------------------------------------------------------------
ALBERT L. AMATO
Senior Vice President
American National: Senior Vice President, Life Policy Administration, April 1994
to present; and Vice President, Life Policy Administration, April 1984 to April
1994. American National Life Insurance Company of Texas: Vice President, May
1984 to present. Garden State Life Insurance Company: Vice President, August
1992 to present, Director, August 1992 to December 1993, and Advisory Director,
December 1993 to present. Standard Life and Accident Insurance Company: Vice
President, Life Policy Administration. Alternative Benefit Management, Inc.:
Director and Senior Vice President.
--------------------------------------------------------------------------------
GLENN C. LANGLEY
Senior Vice President
American National: Senior Vice President, Human Resources, November 1995 to
present; Vice President, Assistant Personnel Director, April 1983 to November
1995; Assistant Vice President, Equal Employment Opportunity/Affirmative Action
Program Coordinator, April 1976 to April 1983; and Assistant Vice President,
Personnel Placement Director, April 1969 to April 1976. Standard Life and
Accident Insurance Company: Vice President, Director of Human Resources. Garden
State Life Insurance Company: Vice President, Human Resources.
--------------------------------------------------------------------------------
STEPHEN E. PAVLICEK
Senior Vice President and Controller
American National: Senior Vice President and Controller, April 1996 to present;
Vice President and Controller, 1994 to April 1996; and Assistant Vice President
- Financial Reports, 1983 to 1994. ANTAC, Inc.: Assistant Treasurer, 1995 to
1998. Garden State Life Insurance Company: Controller, June 1992 to present.
American National Life Insurance Company of Texas: Controller, August 1994 to
present. ANREM Corporation: Director. American National Property and Casualty
Company: Director. American National General Insurance Company: Director.
Pacific P & C, Inc.: Director. Standard Life and Accident Insurance Company:
Vice President, Controller, and Director. ANDV `97: Assistant Treasurer. ANMEX
International Services, Inc.: Controller. ANMEX International, Inc.:
Controller. Alternative Benefit Management, Inc.: Senior Vice President,
Controller, and Director.
--------------------------------------------------------------------------------
55
<PAGE>
STEVEN H. SCHOUWEILER
Senior Vice President
American National: Senior Vice President, Health Insurance Operations, May 1998
to present. Standard Life and Accident Insurance Company: Vice President,
Claims, May 1998 to present. American National Life Insurance Company of Texas:
Director and Senior Vice President, May 1998 to present. Alternative Benefit
Management, Inc.: Chief Administrative Officer, Senior Vice President, and
Director. Conseco Group Risk Management: President and Chief Executive Officer,
December 1989 to April 1998.
--------------------------------------------------------------------------------
JAMES R. THOMASON
Senior Vice President
American National: Senior Vice President, Credit Insurance Services, April 1987
to present.
--------------------------------------------------------------------------------
GARETH W. TOLMAN
Senior Vice President
American National: Senior Vice President, Corporate Affairs, April 1996 to
present; and Vice President, Corporate Affairs, April 1976 to April 1996.
American National Life Insurance Company of Texas: Vice President. Garden State
Life Insurance Company, Vice President, Corporate Affairs. Standard Life and
Accident Insurance Company, Vice President, Corporate Affairs.
--------------------------------------------------------------------------------
VINCENT E. SOLER, JR.
Vice President, Secretary and Treasurer
American National: Vice President, Secretary and Treasurer, 1994 to present; and
Vice President and Controller, March, 1984 to 1994. ANREM Corporation:
Secretary, October 1984 to present. American National Life Insurance Company of
Texas: Treasurer, April 1984 to present; Controller, April 1984 to August 1994;
and Secretary, August 1994 to present. Standard Life and Accident Insurance
Company: Secretary and Treasurer, 1998 to present; Assistant Secretary, January
1996 to 1998. ANTAC, Inc.: Secretary, 1995 to present. Garden State Life
Insurance Company: Secretary and Treasurer, August 1994 to present. American
National Property and Casualty Company: Assistant Secretary, August 1994 to
present. American National General Insurance Company: Assistant Secretary.
Pacific P & C, Inc.: Assistant Secretary. ANDV `97: Secretary. ANMEX
International Services, Inc.: Secretary and Treasurer. ANMEX International,
Inc.: Secretary and Treasurer. Comprehensive Investment Services, Inc.:
Secretary. Alternative Benefit Management, Inc.: Secretary and Treasurer.
--------------------------------------------------------------------------------
56
<PAGE>
The principal business address of each person listed above is American National
Insurance Company, One Moody Plaza, Galveston, Texas 77550-7999.
57
<PAGE>
FINANCIAL STATEMENTS
Our financial statements, which are included in this prospectus, should be
considered only as bearing on our ability to meet our obligations under the
Contract. Our financial statements should not be considered as bearing on the
investment performance of the assets held in the separate account.
58
<PAGE>
APPENDIX
Illustrations of Death Benefits, Accumulation Values and Surrender Values
The tables on pages __ through __ illustrate how Accumulation Value, Surrender
Value and Death Benefit of a Contract may change with the investment performance
of the Eligible Portfolios. These illustrations are hypothetical and may not be
used to project or predict investment results. The illustrations assume:
. a gross annual investment rate of return (i.e. investment income and capital
gains and losses) of 0%, 6% or 12%,
. a $100,000 Specified Amount,
. the Insured is a male, age 45,
. the Contract is issued under a preferred nicotine non-user underwriting risk
classification,
. the premium is paid at the beginning of each Contract Year,
. all Accumulation Value is allocated to the separate account,
. no loans are made,
. no changes in the Specified Amount,
. no partial surrenders
. no riders
. no transfers to the Fixed Account,
. no more than twelve transfers among Subaccounts, and
. fees and expenses for the Eligible Portfolios at a hypothetical annual rate
of 0.77% of net assets (the rate is a simple average, for all Eligible
Portfolios, of the "Management Fees" and "Other Expenses", indicated for each
Eligible Portfolio in the Eligible Portfolio Annual Expenses table. Certain
fee waiver and expense reimbursement arrangements exist and are reflected in
this average. Excluding the effect of these arrangements, the simple average
of the "Management Fees" and "Other Expenses" would be 0.83%).
The Accumulation Value, Surrender Value, and Death Benefit shown in the
illustrations may be different if any of the above assumptions changed.
The second column of the tables shows the value of the premiums paid accumulated
at a 5% annual interest rate.
The tables on pages __ and __ are based on the current schedule of Monthly
Deductions. We may, however, change the current schedule of Monthly Deductions
at any time and for any reason. Accordingly, you should not construe the tables
as guarantees or estimates of amounts to be paid in the future.
59
<PAGE>
The tables on pages __ and __ are based on the assumption that the maximum
allowable Monthly Deductions are made throughout the life of the Contract.
The tables show that the net investment return of each subaccount is lower than
the gross return of the assets held in its corresponding Eligible Portfolio
because of the charges against the subaccounts.
Illustrations also reflect the Daily Asset Charge, which is levied against each
subaccount at an annual rate of 0.70% of average daily Accumulation Value. In
the sixteenth Contract Year and thereafter, the Daily Asset Charge is reduced to
an annual rate of 0.35% of average daily Accumulation Value. The reduction in
the Daily Asset Charge is not guaranteed. After adjustment to reflect the Daily
Asset Charge and the average Eligible Portfolio Annual Expenses, the illustrated
hypothetical gross annual investment rates of return of 0%, 6% and 12%
correspond to approximate hypothetical net annual rates of __.__%, __.__% and
__.__%.
The illustrations do not reflect any charges for federal income tax burden
attributable to the separate account, since we are not currently making such
charges. However, such charges may be made in the future, and, in that event,
the gross annual investment rate of return would have to exceed 0%, 6% or 12% by
an amount sufficient to cover the tax charges in order to produce the values
illustrated. (See "Federal Income Tax Considerations," page __.)
If a loan is made, both Surrender Value and Death Benefit Proceeds will be
reduced by the amount of Contract Debt. Even if repaid, Contract Debt may
permanently affect the Contract's values. The effect could be favorable, or
unfavorable, depending on whether the investment performance of the
subaccount(s)/Fixed Account you selected is less than or greater than the
interest rate credited to the Accumulation Value held to secure the loan.
If a partial surrender is made, it will immediately reduce the Accumulation
Value by the amount of the partial surrender, a $25 fee for the partial
surrender and any applicable surrender charge. If the Contract is surrendered,
a surrender charge may be imposed, and the Contract owner may receive less than
the total premium paid. In the illustrations, the difference between the
Accumulation Value and the Surrender Value in any year is the surrender charge.
Upon request, we will provide a comparable illustration based upon the proposed
Insured's age, sex and underwriting classification, the Specified Amount, the
Death Benefit option, and Planned Periodic Premium schedule and any available
riders requested.
60
<PAGE>
AMERICAN NATIONAL INSURANCE COMPANY
ONE MOODY PLAZA
GALVESTON, TEXAS 77550-7999
VARIABLE UNIVERSAL LIFE INSURANCE
DEATH BENEFIT OPTION A; SPECIFIED AMOUNT - $100,000
MALE ISSUE AGE 45
PREFERRED NICOTINE NON-USER
CURRENT SCHEDULE OF CHARGES
PLANNED PERIODIC PREMIUM OF $1,400 PAID AT THE BEGINNING OF EACH CONTRACT YEAR
VALUES BASED ON ASSUMED HYPOTHETICAL GROSS
ANNUAL INVESTMENT RATES OF RETURN OF
<TABLE>
<CAPTION>
0% 6% 12%
----------------------------------------------------------------------------------------------------------------------------------
END OF PREMIUMS
CONT. ACCUMULATED ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,470 899 0 100,000 964 0 100,000 1,030 0 100,000
2 3,014 1,769 0 100,000 1,956 0 100,000 2,152 0 100,000
3 4,634 2,609 0 100,000 2,976 0 100,000 3,374 387 100,000
4 6,336 3,419 482 100,000 4,023 1,085 100,000 4,706 1,768 100,000
5 8,123 4,197 1,311 100,000 5,097 2,212 100,000 6,158 3,272 100,000
6 9,999 4,946 2,114 100,000 6,203 3,371 100,000 7,746 4,913 100,000
7 11,969 5,664 2,886 100,000 7,309 4,561 100,000 9,482 6,704 100,000
8 14,037 6,348 3,625 100,000 8,505 5,782 100,000 11,380 8,658 100,000
9 16,209 6,995 4,329 100,000 9,698 7,032 100,000 13,456 10,790 100,000
10 18,490 7,604 4,997 100,000 10,918 8,311 100,000 15,727 13,119 100,000
15 31,720 10,290 9,906 100,000 17,732 17,348 100,000 31,178 30,795 100,000
20 48,607 12,255 12,255 100,000 26,081 26,081 100,000 57,577 57,577 100,000
25 70,159 12,362 12,362 100,000 35,419 35,419 100,000 102,583 102,583 119,000
30 97,665 9,106 9,106 100,000 45,394 45,394 100,000 177,916 177,916 190,400
Age 65 48,607 12,255 12,255 100,000 26,081 26,081 100,000 57,577 57,577 100,000
</TABLE>
* GUARANTEED COVERAGE PREMIUM $1,400
Under Death Benefit Option A, the Death Benefit is the current
Specified Amount of the Contract or, if greater, the applicable corridor
percentage of Accumulation Value at the end of the Valuation Period that
includes the date of the Insured's death. Corridor percentages are
specified in the Contract.
American National agrees to keep the Contract in force for the period
stipulated under the Guaranteed Coverage Benefit so long as the Guaranteed
Coverage Premium is paid and other Contract provisions are met, even though
in certain instances the minimum payment allowed by the Contract will not,
after the payment of Monthly Deductions, generate positive Surrender Value
at one or more points during such period.
Accumulation Value, Surrender Value, and Death Benefit may be
different if premiums are paid with a different frequency, or timing, or if
of different amounts. Illustration assumes no loan or partial surrender
has been made. Zero values in the Death Benefit column indicate lapse in
the absence of sufficient additional premium payment.
61
<PAGE>
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF
RETURN NOR A SUGGESTION THAT SUCH RESULTS WILL BE ACHIEVED. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A CONTRACT OWNER,
DIFFERENT RETURNS OF ELIGIBLE PORTFOLIOS, PREVAILING INTEREST RATES AND RATES OF
INFLATION. NO REPRESENTATIONS CAN BE MADE BY AMERICAN NATIONAL THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD. ALTHOUGH THE ACTUAL RATES OF RETURN MAY AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, IF THEY HAVE FLUCTUATED ABOVE OR BELOW THOSE AVERAGES, THE
ACCUMULATION VALUE, DEATH BENEFIT, AND SURRENDER VALUE WOULD BE DIFFERENT FROM
THOSE SHOWN ABOVE.
62
<PAGE>
AMERICAN NATIONAL INSURANCE COMPANY
ONE MOODY PLAZA
GALVESTON, TEXAS 77550-7999
VARIABLE UNIVERSAL LIFE INSURANCE
DEATH BENEFIT OPTION A; SPECIFIED AMOUNT - $100,000
MALE ISSUE AGE 45
PREFERRED NICOTINE NON-USER
GUARANTEED SCHEDULE OF CHARGES
PLANNED PERIODIC PREMIUM OF $1,400 PAID AT THE BEGINNING OF EACH CONTRACT YEAR
VALUES BASED ON ASSUMED
HYPOTHETICAL GROSS
ANNUAL INVESTMENT RATES
OF RETURN OF
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0% 6% 12%
-----------------------------------------------------------------------------------------------------------------------
END OF PREMIUMS
CONT. ACCUMULATED ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH ACCUMULATION
SURRENDER DEATH
YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-----------------------------------------------------------------------------------------------------------------------
1 1,470 709 0 100,000 842 0 100,000 904 0 100,000
2 3,014 1,334 0 100,000 1,696 0 100,000 1,876 0 100,000
3 4,634 1,882 0 100,000 2,562 0 100,000 2,923 0 100,000
4 6,336 2,355 0 100,000 3,438 500 100,000 4,052 1,114 100,000
5 8,123 2,757 0 100,000 4,322 1,436 100,000 5,267 2,381 100,000
6 9,999 3,089 257 100,000 5,210 2,378 100,000 6,575 3,743 100,000
7 11,969 3,352 574 100,000 6,097 3,319 100,000 7,981 5,203 100,000
8 14,037 3,545 822 100,000 6,979 4,256 100,000 9,491 6,769 100,000
9 16,209 3,666 1,000 100,000 7,846 5,180 100,000 11,111 8,445 100,000
10 18,490 3,714 1,106 100,000 8,694 6,086 100,000 12,848 10,240 100,000
15 31,720 2,923 2,540 100,000 12,553 12,170 100,000 23,869 23,485 100,000
20 48,607 0 0 0 14,745 14,745 100,000 40,793 40,793 100,000
25 70,159 0 0 0 12,198 12,198 100,000 68,064 68,064 100,000
30 97,665 0 0 0 0 0 0 117,445 117,445 125,700
Age 65 48,607 0 0 0 14,745 26,674 100,000 40,793 40,793 100,000
</TABLE>
* GUARANTEED COVERAGE PREMIUM $1,400
Under Death Benefit Option A, the Death Benefit is the current
Specified Amount of the Contract or, if greater, the applicable corridor
percentage of Accumulation Value at the end of the Valuation Period that
includes the date of the Insured's death. Corridor percentages are
specified in the Contract.
American National agrees to keep the Contract in force for the period
stipulated under the Guaranteed Coverage Benefit so long as the Guaranteed
Coverage Premium is paid and other Contract provisions are met, even though
in certain instances, the minimum payment allowed by the Contract will not,
after the payment of Monthly Deductions, generate positive Surrender Value
at one or more points during such period.
Accumulation Value, Surrender Value, and Death Benefit may be
different if premiums are paid with a different frequency, or timing, or if
of different amounts. Illustration assumes no loan or partial surrender
has been made. Zero values in the Death Benefit column indicate lapse in
the absence of sufficient additional premium payment.
63
<PAGE>
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF
RETURN NOR A SUGGESTION THAT SUCH RESULTS WILL BE ACHIEVED. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A CONTRACT OWNER,
DIFFERENT RETURNS OF ELIGIBLE PORTFOLIOS, PREVAILING INTEREST RATES AND RATES OF
INFLATION. NO REPRESENTATIONS CAN BE MADE BY AMERICAN NATIONAL THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD. ALTHOUGH THE ACTUAL RATES OF RETURN MAY AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, IF THEY HAVE FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR
CONTRACT YEARS THE ACCUMULATION VALUE, DEATH BENEFIT AND SURRENDER VALUE WOULD
BE DIFFERENT FROM THOSE SHOWN ABOVE.
64
<PAGE>
AMERICAN NATIONAL INSURANCE COMPANY
ONE MOODY PLAZA
GALVESTON, TEXAS 77550-7999
VARIABLE UNIVERSAL LIFE INSURANCE
DEATH BENEFIT OPTION B; SPECIFIED AMOUNT - $100,000
MALE ISSUE AGE 45
PREFERRED NICOTINE NON-USER
CURRENT SCHEDULE OF CHARGES
PLANNED PERIODIC PREMIUM OF $1,400 PAID AT THE BEGINNING OF EACH CONTRACT YEAR
VALUES BASED ON ASSUMED
HYPOTHETICAL GROSS
ANNUAL INVESTMENT RATES
OF RETURN OF
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0% 6% 12%
----------------------------------------------------------------------------------------------------------------------
END OF PREMIUMS
CONT. ACCUMULATED ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH ACCUMULATION
SURRENDER DEATH
YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
----------------------------------------------------------------------------------------------------------------------
1 1,470 896 0 100,900 962 0 101,000 1,027 0 101,000
2 3,014 1,761 0 101,800 1,948 0 101,900 2,143 0 102,100
3 4,634 2,595 0 102,600 2,959 0 103,000 3,355 368 103,400
4 6,336 3,394 457 103,400 3,993 1,056 104,000 4,671 1,733 104,700
5 8,123 4,159 1,274 104,200 5,050 2,164 105,100 6,099 3,213 106,100
6 9,999 4,892 2,060 104,900 6,133 3,300 106,100 7,655 4,822 107,700
7 11,969 5,589 2,811 105,600 7,239 4,461 107,200 9,347 6,569 109,300
8 14,037 6,249 3,527 106,200 8,366 5,644 108,400 11,187 8,464 111,200
9 16,209 6,868 4,202 106,900 9,512 6,846 109,500 13,186 10,520 113,200
10 18,490 7,444 4,836 107,400 10,674 8,066 110,700 15,357 12,749 115,400
15 31,720 9,886 9,503 109,900 16,979 16,595 117,000 29,768 29,385 129,400
20 48,607 11,446 11,446 111,400 24,208 24,208 124,200 53,181 53,181 153,200
25 70,159 10,856 10,856 110,900 31,015 31,015 131,000 89,657 89,657 189,700
30 97,665 6,593 6,593 106,600 35,395 35,395 135,400 145,812 145,812 245,800
Age 65 48,607 11,446 11,446 111,400 24,208 24,208 124,200 53,181 53,181 153,200
</TABLE>
* GUARANTEED COVERAGE PREMIUM $1,400
Under Death Benefit Option B, the Death Benefit is the current
Specified Amount plus the Accumulation Value of the Contract or, if
greater, the applicable corridor percentage of Accumulation Value at the
end of the Valuation Period that includes the date of the Insured's death.
Corridor percentages are specified in the Contract.
American National agrees to keep the Contract in force for the period
stipulated under the Guaranteed Coverage Benefit so long as the Guaranteed
Coverage Premium is paid and other Contract provisions are met even though,
in certain instances, the minimum payment allowed by the Contract will not,
after the payment of Monthly Deductions, generate positive Surrender Value
at one or more points during such period.
Accumulation Value, Surrender Value, and Death Benefit may be
different if premiums are paid with a different frequency, or timing, or if
of different amounts. Illustration assumes no loan or partial surrender
has been made. Zero values in the Death Benefit column indicate lapse in
the absence of sufficient additional premium payment.
65
<PAGE>
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF
RETURN NOR A SUGGESTION THAT SUCH RESULTS WILL BE ACHIEVED. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A CONTRACT OWNER,
DIFFERENT RETURNS OF ELIGIBLE PORTFOLIOS, PREVAILING INTEREST RATES AND RATES OF
INFLATION. NO REPRESENTATIONS CAN BE MADE BY AMERICAN NATIONAL THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD. ALTHOUGH THE ACTUAL RATES OF RETURN MAY AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, IF THEY HAVE FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR
CONTRACTS YEARS THE ACCUMULATION VALUE, DEATH BENEFIT AND SURRENDER VALUE WOULD
BE DIFFERENT FROM THOSE SHOWN ABOVE.
66
<PAGE>
AMERICAN NATIONAL INSURANCE COMPANY
ONE MOODY PLAZA
GALVESTON, TEXAS 77550-7999
VARIABLE UNIVERSAL LIFE INSURANCE
DEATH BENEFIT OPTION B; SPECIFIED AMOUNT - $100,000
MALE ISSUE AGE 45
PREFERRED NICOTINE NON-USER
GUARANTEED SCHEDULE OF CHARGES
PLANNED PERIODIC PREMIUM OF $1,400 PAID AT THE BEGINNING OF EACH CONTRACT YEAR
VALUES BASED ON ASSUMED HYPOTHETICAL GROSS
ANNUAL INVESTMENT RATES
OF RETURN OF
<TABLE>
<CAPTION>
0% 6% 12%
----------------------------------------------------------------------------------------------------------------------
END OF PREMIUMS
CONT. ACCUMULATED ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH ACCUMULATION
SURRENDER DEATH
YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,470 706 0 100,700 838 0 100,800 900 0 100,900
2 3,014 1,325 0 101,300 1,684 0 101,700 1,864 0 101,900
3 4,634 1,865 0 101,900 2,538 0 102,500 2,896 0 102,900
4 6,336 2,328 0 102,300 3,397 459 103,400 4,003 1,065 104,000
5 8,123 2,717 0 102,700 4,257 1,371 104,300 5,186 2,300 105,200
6 9,999 3,036 203 103,000 5,114 2,281 105,100 6,450 3,618 106,500
7 11,969 3,282 504 103,300 5,960 3,182 106,000 7,797 5,019 107,800
8 14,037 3,456 734 103,500 6,790 4,067 106,800 9,227 6,504 109,200
9 16,209 3,557 891 103,600 7,593 4,927 107,600 10,740 8,074 110,700
10 18,490 3,583 975 103,600 8,361 5,753 108,400 12,339 9,731 112,300
15 31,720 2,668 2,284 102,700 11,495 11,111 111,500 21,832 21,448 121,800
20 48,607 0 0 0 12,040 12,040 112,000 33,935 33,935 133,900
25 70,159 0 0 0 6,476 6,476 106,500 46,993 46,993 147,000
30 97,665 0 0 0 0 0 0 56,762 56,762 156,800
Age 65 48,607 0 0 0 12,040 12,040 112,000 33,935 33,935 133,900
</TABLE>
* GUARANTEED COVERAGE PREMIUM $1,400
Under Death Benefit Option B, the Death Benefit is the current
Specified Amount plus the Accumulation Value of the Contract or, if
greater, the applicable corridor percentage of Accumulation Value at the
end of the Valuation Period that includes the date of the Insured's death.
Corridor percentages are specified in the Contract.
American National agrees to keep the Contract in force for the period
stipulated under the Guaranteed Coverage Benefit so long as the Guaranteed
Coverage Premium is paid and other Contract provisions are met even though,
in certain instances, the minimum payment allowed by the Contract will not,
after the payment of Monthly Deductions, generate positive Surrender Value
at one or more points during such period.
Accumulation Value, Surrender Value, and Death Benefit may be
different if premiums are paid with a different frequency, or timing, or if
of different amounts. Illustration assumes no loan or partial surrender
has been made. Zero values in the Death Benefit column indicate lapse in
the absence of sufficient additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF
RETURN NOR A SUGGESTION THAT SUCH RESULTS WILL BE ACHIEVED. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE
67
<PAGE>
INVESTMENT ALLOCATIONS MADE BY A CONTRACT OWNER, DIFFERENT RETURNS OF ELIGIBLE
PORTFOLIOS, PREVAILING INTEREST RATES AND RATES OF INFLATION. NO REPRESENTATIONS
CAN BE MADE BY AMERICAN NATIONAL THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD. ALTHOUGH THE ACTUAL
RATES OF RETURN MAY AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, IF THEY HAVE
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR CONTRACT YEARS THE ACCUMULATION
VALUE, DEATH BENEFIT, AND SURRENDER VALUE WOULD BE DIFFERENT, FROM THOSE SHOWN
ABOVE.
68
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UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
RULE 484 UNDERTAKING
Insofar as indemnification for liability arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant 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 Registrant 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.
REPRESENTATION PURSUANT TO SECTION 26(e)(2)(A)
American National Insurance Company hereby represents that the fees and
charges deducted under the contracts described in this pre-effective amendment
are, in the aggregate, reasonable in relationship to the services rendered, the
expenses expected to be incurred, and the risks assumed by American National
Insurance Company.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectus consisting of ___ pages.
Undertaking to file reports.
Rule 484 undertaking.
Representation pursuant to Section 26(e)(2)(A).
Signatures.
Written Consents
The following exhibits, corresponding to those required by the instructions
as to exhibits in Form N-8B-2:
1
<PAGE>
Exhibit 1 .... Resolution of the Board of Directors of American National
Insurance Company authorizing establishment of American
National Variable Life Separate Account (previously filed in
Registrant's registration statement number 333-79153 on May
24, 1999)
Exhibit 2 .... Not Applicable
Exhibit 3(a) .... Distribution and Administrative Services Agreement
(previously filed in Registrant's registration statement
number 333-79153 on May 24, 1999)
Exhibit 3(b) .... Not Applicable
Exhibit 3(c) .... Schedule of Sales Commissions (to be filed by pre-effective
amendment)
Exhibit 4 .... Not Applicable
Exhibit 5 .... Flexible Premium Variable Life Insurance Policy (to be filed
by pre-effective amendment)
Exhibit 6(1) .... Articles of Incorporation of American National Insurance
Company (previously filed in Registrant's registration
statement number 333-79153 on May 24, 1999)
Exhibit 6(2) .... By-laws of American National Insurance Company (previously
filed in Registrant's registration statement number 333-
79153 on May 24, 1999)
Exhibit 7 .... Not Applicable
Exhibit 8(1) .... Form of American National Investment Accounts, Inc. Fund
Participation Agreement (previously filed in Registrant's
registration statement number 333-79153 on May 24, 1999)
Exhibit 8(2) .... Form of Variable Insurance Products Fund Fund Participation
Agreement (previously filed in Registrant's registration
statement number 333-79153 on May 24, 1999)
Exhibit 8(3) .... Form of Variable Insurance Products Fund II Fund
Participation Agreement (previously filed in Registrant's
registration statement number 333-79153 on May 24, 1999)
Exhibit 8(4) .... Form of Variable Insurance Products Fund III Fund
Participation Agreement (previously filed in Registrant's
registration statement number 333-79153 on May 24, 1999)
Exhibit 8(5) .... Form of T. Rowe Price Fund Participation Agreement
(previously filed in
2
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Registrant's registration statement number 333-79153 on May
24, 1999)
Exhibit 8(6) .... Form of MFS Variable Insurance Trust Participation Agreement
(previously filed in Registrant's registration statement
number 333-51035 on April 24, 1998)
Exhibit 8(7) .... Form of Federated Insurance Series Participation Agreement
(previously filed in Registrant's registration statement
number 333-51035 on April 24, 1998)
Exhibit 8(8) ... Form of Fred Alger American Fund Participation Agreement
Exhibit 9 .... Not Applicable
Exhibit 10 .... Application Form (to be filed by pre-effective amendment)
Exhibit 11 .... Independent Auditors' Consent (to be filed by pre-effective
amendment)
Exhibit 12 .... Opinion of Counsel (to be filed by pre-effective amendment)
Exhibit 13 .... Consent of Counsel (to be filed by pre-effective amendment)
Exhibit 14 .... Actuarial Opinion (to be filed by pre-effective amendment)
Exhibit 15 .... Actuarial Basis of Payment and Cash Value Adjustment
Pursuant to Rule 6e-3(T)(b)(V)(B) (to be filed by pre-
effective amendment)
Exhibit 16 .... Procedures Memorandum Pursuant to Rule 6e-3(T)(b)(12)(iii)
(to be filed by pre-effective amendment)
3
<PAGE>
As required by the Securities Act of 1933, the Registrant has caused this
registration statement to be signed on its behalf, in the City of Galveston, and
the State of Texas on the 22nd day of December, 2000.
AMERICAN NATIONAL VARIABLE LIFE SEPARATE ACCOUNT
(Registrant)
By: American National Insurance Company
By: /s/ ROBERT L. MOODY
_________________________________
Robert L. Moody,
Chairman of the Board, President
and Chief Executive Officer
AMERICAN NATIONAL INSURANCE
COMPANY
(Depositor)
By: /s/ Robert L. Moody
___________________________________________
Robert L. Moody, Chairman of the Board,
President and Chief Executive Officer
attest:
/s/ Vincent E. Soler, Jr.
________________________________
Vincent E. Soler, Jr.,
Vice President, Secretary and Treasurer
As required by the Securities Act of 1933, this amended registration
statement has been signed by the following persons in their capacities and on
the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Michael W. McCroskey Executive Vice President December 22, 2000
________________________ Investments (Principal Financial
Michael W. McCroskey Officer)
/s/ Stephen E. Pavlicek Senior Vice President and December 22, 2000
________________________ Controller
Stephen E. Pavlicek (Principal Accounting Officer)
4
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Signature Title Date
--------- ----- ----
/s/ Robert L. Moody Chairman of the Board, December 22, 2000
____________________________ Director, President and Chief
Robert L. Moody Executive Officer
/s/ G. Richard Ferdinandtsen Director December 22, 2000
____________________________
G. Richard Ferdinandtsen
/s/ Irwin M. Herz, Jr. Director December 22, 2000
____________________________
Irwin M. Herz, Jr.
/s/ R. Eugene Lucas Director December 22, 2000
____________________________
R. Eugene Lucas
/s/ E. Douglas McLeod Director December 22, 2000
____________________________
E. Douglas McLeod
Director ____________
____________________________
Frances Anne Moody
Director ____________
____________________________
Russell S. Moody
Director ____________
____________________________
W. L. Moody, IV
Director ____________
____________________________
Joe Max Taylor
5
