As filed with the SEC on April 25, 1997
Registration No. 33-54924
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 4 [ X ]
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [ X ]
Amendment No. 6
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
(Exact name of registrant)
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(name of depositor)
One World Financial Center
New York, New York 10281
(Address of depositor's principal executive offices)
Depositor's telephone number: 1-800-544-8888
____________________________________________
RODNEY R. ROHDA
Chairman
Empire Fidelity Investments Life Insurance Company
One World Financial Center
New York, New York 10281
(Name and address of agent for service)
_________________________________________
Copy to:
MICHAEL BERENSON
Jorden Burt & Berenson
1025 Thomas Jefferson Street
Suite 400 East
Washington, D.C. 20007
_________________________________________
.Individual Variable Annuity Contracts -- Pursuant to Rule 24f-2 under the
Investment Company Act of 1940, the Registrant has registered an indefinite
number of securities. Registrant's Rule 24f-2 Notice for the fiscal year
ending December 31, 1995 was filed February 26, 1997.
It is proposed that this filing will become effective (check appropriate
space):
immediately upon filing pursuant to paragraph (b) of rule 485
x on April 30, 1997, pursuant to paragraph (b) (1) (v) of rule 485
60 days after filing pursuant to paragraph (a) (1) of rule 485
on , pursuant to paragraph (a) (1) of rule 485
75 days after filing pursuant to paragraph (a) (2) of rule 485
on , pursuant to paragraph (a) (2) of rule 485 Page _ of _
Exhibit Index Appears on Page __
CROSS REFERENCE TO ITEMS REQUIRED BY FORM N-4
Part A
Item N-4 Item Heading in Prospectus.
Item 1. Cover Page Cover Page
Item 2. Definitions Glossary
Item 3. Synopsis or Highlights Summary of the Contract
Item 4. Condensed Financial Information Not Applicable
Item 5. General Description of Registrant, Depositor, Facts About EFILI,
and The Portfolio Companies The Variable Account, and the Funds
(a) Depositor EFILI
(b) Registrant The Variable Account
(c) Portfolio Company The Funds
(d) The Funds The Funds
(e) Voting Voting Rights
(f) Administrator Charges
Item 6. Deductions and Expenses Charges
a) Deductions Charges; Premium Taxes
b) Sales Load Not applicable
c) Special purchase plans Not applicable
d) Commissions Selling the Contracts
e) Registrant's expenses Charges
f) Portfolio company deductions and expenses The Funds
g) Organizational expenses Not applicable
Item 7. General Description of Variable Annuity Contracts
a) Rights Summary of the Contract;
Investments Allocation of Your
Purchase Payment; Death Benefit;
Facts About the Contract; Types of
Annuity Income Options; Voting
Rights; Other Contract Provisions
b) Provisions and limitations Investment Allocation of Your
Purchase Payment; Free Look
Privilege
c) Changes in contracts or operations Changes in Investment Options
d) Contract owner inquiries Cover Page
Item 8. Annuity Period
a) Level of benefits Fixed, Variable or Combination
Annuity Income; Types of Annuity
Income Options
b) Annuity commencement date Annuity Income Dates
c) Annuity payments Types of Annuity Income Options
d) Assumed investment return Fixed, Variable or Combination
Annuity Income
e) Minimums Cover Page, Summary of the
Contract
f) Rights to change options or transfer contract Investment Allocation
of Your
value Purchase Payment
Item 9. Death Benefit
a) Death benefit Calculation Death Benefit
b) Forms of benefits Death Benefit; Types of Annuity
Options; Fixed, Variable, or
Combination Annuity Income
Item 10. Purchases and Contract Values
a) Procedures for purchases Purchase of a Contract
b) Accumulation unit value Not applicable
c) Calculation of accumulation unit value Not applicable
d) Principal underwriter Selling the Contracts
Item 11. Redemptions
a) Redemptions procedures Not applicable
b) Texas Optional Retirement Program Not Applicable
c) Delay Postponement of Benefits
d) Lapse Not Applicable
e) Revocation rights Free Look Privilege
Item 12. Taxes
a) Tax Consequences Tax Considerations
b) Qualified plans Tax Considerations
c) Impact of taxes Tax Considerations
Item 13. Legal Proceedings Litigation
Item 14. Table of Contents for Statement of Table of Contents for
Statement of
Additional Information Additional Information
Part B
Item N-4 Item Heading in Statement of Additional Information.
Item 15. Cover Page Cover Page
Item 16. Table of Contents Table of Contents
Item 17. General Information and History
a) Name Change Not Applicable
b) Attributions of Assets Not Applicable
c) Control of Depositor EFILI (Prospectus)
Item 18. Services
a) Fees, expenses and costs Fee Table (prospectus); Charges
(prospectus); The Funds (prospectus)
b) Management - related services Service Agreements
c) Custodian and independent public accountant Independent Accountants
d) Other custodianship Safekeeping of Variable Account
Assets
e) Administrative servicing agent Not applicable
f) Depositor as principal Underwriter Not Applicable
Item 19. Purchase of Securities Being Offered
a) Manner of Offering Distribution of the Contracts; Selling
the Contracts; (prospectus)
b) Sales Load Not applicable
Item 20. Underwriters
a) Depositor or affiliate as principal underwriter Selling the Contracts
(prospectus)
b) Continuous Offering Distribution of Contracts
c) Underwriting commissions Not Applicable
d) Payments to underwriter Not Applicable
Item 21. Calculation of Performance Data Performance
Item 22. Annuity Payments Fixed, Variable or Combination
Annuity Income
Item 23. Financial Statements
a) Registrant Financial Statements
b) Depositor Financial Statements
PROSPECTUS
INCOME ADVANTAGE
This prospectus describes a single premium immediate variable annuity
contract (the "Contract") offered by Empire Fidelity Investments Life
Insurance Company ("EFILI," "we" or "us"), the insurance company that is
part of the group of financial service companies known as Fidelity
Investments. Under the Contract, we provide lifetime annuity income to you
(the "Annuitant") at regular intervals (the "Annuity Income Dates"). You
choose the first Annuity Income Date, which may be up to one year from the
day we issue the Contract (the "Contract Date"), and whether you want the
Annuity Income Dates to be monthly, quarterly, semi-annual or annual.
Annuity income can be for your lifetime, or for your lifetime and the
lifetime of a second person you name (the "Joint Annuitant"). You may
choose a guaranteed minimum number of years of annuity income.
There are three types of Contracts. You may purchase a "Non-qualified
Contract" with money from any source. In addition, you may purchase a
"Qualified Contract" that is an Individual Retirement Annuity with
contributions rolled-over from tax-qualified plans such as 403(b) plans,
401(k) plans, or IRAs. You may also arrange with your employer to purchase
a "Tax-Sheltered Annuity Contract" using money from a 403(b) tax-sheltered
annuity plan.
You purchase a Contract with a single payment (the "Purchase Payment"). You
may not make additional purchase payments. The minimum Purchase Payment for
a Contract is generally $25,000. You allocate your Purchase Payment between
fixed and variable annuity income. You may choose all fixed annuity income,
all variable annuity income, or a combination of the two. If you allocate
all or a portion to variable annuity income, you may choose one or more of
the t hirteen Investment Options of the Empire Fidelity Investments
Variable Annuity Account A (the "Variable Account"). Amounts allocated to
the Investment Options will result in annuity income that varies in amount
according to the investment results of the Investment Options. The
Investment Options invest exclusively in the mutual fund portfolios
("Portfolios") of Variable Insurance Products Fund , Variable
Insurance Products Fund II , and Variable Insurance Products Fund III
(the "Funds"). Fidelity Management & Research Company ("FMR") manages the
Funds. Additional Investment Options may be added in the future.
For a Non-qualified Contract, the portion of annuity income that is
considered a return of the Purchase Payment will generally be non-taxable,
and the portion of annuity income that is considered a distribution of
earnings will generally be taxable. For Qualified Contracts and
Tax-Sheltered Annuity Contracts the entire amount of annuity income each
year will generally be taxable. For a more detailed discussion of the tax
treatment of annuity income, see TAX CONSIDERATIONS on page .
The portion of your Purchase Payment that you allocate to the Investment
Options will be allocated to the Money Market Investment Option for a brief
initial period. This "Money Market Period" ends on the day that EFILI
estimates or calculates to be ten days after you receive your Contract. For
most Contracts, EFILI estimates that you receive your Contract five days
after it is mailed to you. For Contracts with large Purchase Payments,
EFILI may determine the actual date you receive your Contract.
This prospectus provides information that you should know before purchasing
a Contract. Additional information about the Contract and the Variable
Account has been filed with the Securities and Exchange Commission in a
Statement of Additional Information dated April 30, 199 7 . The
Statement of Additional Information is incorporated by reference in this
prospectus and is available without charge by calling EFILI at
800-544-2442. The table of contents of the Statement of Additional
Information appears on page .
LIKE ALL VARIABLE ANNUITIES, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT IS NOT
VALID UNLESS ACCOMPANIED BY THE CURRENT PROSPECTUS FOR THE VARIABLE
INSURANCE PRODUCTS FUND , THE VARIABLE INSURANCE PRODUCTS FUND II
AND THE VARIABLE INSURANCE PRODUCTS FUND III.
FOR FURTHER INFORMATION CALL FIDELITY INVESTMENTS
Nationwide 1-800-544-2442
Date: April 30, 199 7
PROSPECTUS CONTENTS
GLOSSARY iv
Summary of the Contract 1
FACTS ABOUT EFILI, THE VARIABLE ACCOUNT AND THE FUNDS
EFILI 3
The Variable Account 4
The Funds 4
FACTS ABOUT THE CONTRACT
Purchase of a Contract 18
Free Look Privilege 18
Investment Allocation of Your Purchase Payment 19
Charges 20
Annuity Income Dates 21
Signature Guarantee 21
Death Benefit 22
Fixed, Variable or Combination Annuity Income 22
Benchmark Rate of Return 23
Types of Annuity Income Options 24
Reports 26
MORE ABOUT THE CONTRACT
Tax Considerations 27
Other Contract Provisions 32
Selling the Contracts 33
Postponement of Benefits 33
MORE ABOUT THE VARIABLE ACCOUNT AND THE FUNDS
Changes in Investment Options 34
Net Rate of Return for an Investment Option 34
Voting Rights 34
Resolving Material Conflicts 35
Performance 35
Litigation 36
Appendix - Illustrations of Values 37
Table of Contents of the Statement of Additional
Information 42
THE CONTRACT IS NOT AVAILABLE IN ALL STATES. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS.
GLOSSARY
ANNUITANT - You are the Annuitant. You receive lifetime income. For
Qualified Contracts and Tax-Sheltered Annuity Contracts all annuity income
must be received only by you during your lifetime. Either you or the Joint
Annuitant generally must be no older than 85 years of age on the Contract
Date. You must also be an Owner.
ANNUITY INCOME DATES - The dates we determine the amount of annuity income.
If the New York Stock Exchange is closed on an Annuity Income Date, we will
determine the amount of annuity income on the next day it is open. You
choose whether you want Annuity Income Dates to be monthly, quarterly,
semi-annual or annual.
ANNUITY INCOME UNIT - A unit of measure used to calculate the amount of
variable annuity income.
BENCHMARK RATE OF RETURN - The return that is assumed in the calculation of
each amount of variable annuity income. The Benchmark Rate of Return
applies only to the variable income portion of the Contract.
The estimated first annuity income amount is calculated assuming that the
Investment Options will earn the Benchmark Rate of Return you choose. If
the performance (after all expenses) of the Investment Options you choose
matches the benchmark, annuity income will stay constant. If the
performance exceeds the benchmark, annuity income will increase. If
performance falls below the benchmark, annuity income will decrease.
If you choose a higher benchmark, annuity income will start at a higher
amount but you will need better investment performance in order to keep
annuity income from declining.
You will be able to choose a Benchmark Rate of Return of 3.5% or 5.0%. We
may make other rates available, as permitted by state law.
BENEFICIARY(IES) - The person(s) who may receive certain benefits under
this Contract when there is no longer a living Annuitant or Joint
Annuitant.
CODE - The Internal Revenue Code of 1986, as amended.
CONTRACT - A Contract designed to provide you and the Joint Annuitant (if
any) with annuity income for your life (or lives) beginning with the first
Annuity Income Date.
CONTRACT DATE - The date your Contract becomes effective. This will be
stated in your Contract.
FUNDS - Variable Insurance Products Fund , Variable Insurance
Products Fund II , and Variable Insurance Products Fund III .
INVESTMENT OPTIONS - Asset Manager Investment Option, Money Market
Investment Option, Investment Grade Bond Investment Option, High Income
Investment Option, Equity-Income Investment Option, Index 500 Investment
Option, Growth Investment Option, Overseas Investment Option, Asset
Manager: Growth Investment Option , Contrafund Investment Option ,
Growth Opportunities Investment Option, Balanced Investment Option and
Growth & Income Investment Option. We may make additional Investment
Options available in the future. Each Investment Option is a division of
the Variable Account.
IRA - Refers generally to both an Individual Retirement Account and an
Individual Retirement Annuity as defined in Sections 408(a) and (b),
respectively, of the Code. When it is used to refer to a Qualified
Contract, it means a Contract that qualifies as an Individual Retirement
Annuity as defined in Section 408(b) of the Code.
JOINT ANNUITANT - The Joint Annuitant ( if any), receives lifetime
annuity income. However, for Qualified Contracts and Tax-Sheltered Annuity
Contracts, all annuity income must be received only by the Annuitant during
the Annuitant's lifetime. Either the Annuitant or the Joint Annuitant
generally must be no older than 85 years of age on the Contract Date. For
Non-qualified Contracts the Joint Annuitant may, but need not be, an Owner.
For Qualified Contracts and Tax-Sheltered Annuity Contracts the Joint
Annuitant may not be an Owner.
NET RATE OF RETURN - An index used to measure the investment performance of
an Investment Option from one Valuation Period to the next.
NON-QUALIFIED CONTRACT - A Contract other than a Qualified Contract or
Tax-Sheltered Annuity Contract. This type of Contract may be purchased with
money from any source.
OWNER(S) - The person(s) who have certain rights under the Contract. You
(the Annuitant) must be an Owner. If there is a Joint Annuitant, he or she
may also be an Owner (except for a Qualified Contract or Tax-Sheltered
Annuity Contract, where only one Owner is permitted). The Joint Annuitant
is never required to be an Owner. Only you and the Joint Annuitant
( if any), may ever be Owners.
PORTFOLIO - An investment portfolio of a Fund.
QUALIFIED CONTRACT - A Contract that qualifies as an Individual Retirement
Annuity under Section 408(b) of the Code.
TAX-SHELTERED ANNUITY CONTRACT - A Contract purchased with money in a
tax-sheltered annuity under section 403(b) of the Code.
VALUATION PERIOD - The period of time from the time Annuity Income Unit
values are calculated to the next time such values are calculated. These
calculations are made as of the close of business (normally 4:00 p.m.
Eastern Time) each day the New York Stock Exchange is open for trading.
VARIABLE ACCOUNT - Empire Fidelity Investments Variable Annuity Account A.
YOU - The Annuitant. The Annuitant is always an Owner.
THIS PAGE INTENTIONALLY LEFT BLANK
SUMMARY OF THE CONTRACT
The purpose of this variable annuity contract is to provide periodic
annuity income for your life, or for your life and the life of a Joint
Annuitant. You may select from a number of annuity income options. You may
also choose a guaranteed minimum number of years of annuity income. See
TYPES OF ANNUITY INCOME OPTIONS on page . You may choose annuity income
that is entirely fixed, entirely variable, or a combination of fixed and
variable. See FIXED, VARIABLE OR COMBINATION ANNUITY INCOME on page . We
guarantee to provide annuity income for each Annuity Income Date for your
lifetime and for the lifetime of the Joint Annuitant ( if any). We
guarantee the amount of fixed annuity income on each Annuity Income Date,
but we do not guarantee the amount of any variable annuity income. Neither
do we guarantee any minimum number of Annuity Income Dates, unless you
choose an option that provides for such a guarantee. The amount of variable
annuity income will fluctuate from one Annuity Income Date to the next
according to the investment results of the Investment Options you select.
The Investment Options invest in mutual fund portfolios that are managed by
Fidelity Management & Research Company.
You purchase the Contract with a single Purchase Payment. The minimum
Purchase Payment is generally $25,000. EFILI reserves the right to reject
Purchase Payments in excess of limits it establishes from time to time. You
allocate your Purchase Payment between variable and fixed annuity income on
your application. This allocation may not be changed. The portion of your
Purchase Payment allocated to variable annuity income will be placed in the
Money Market Investment Option during the Money Market Period, and you may
currently reallocate among the variable Investment Options at any time
after the end of the Money Market Period.
You may return the Contract for a refund during the free look period (see
FREE LOOK PRIVILEGE on page ). ONCE THE FREE LOOK PERIOD EXPIRES, THE
CONTRACT MAY NOT BE RETURNED FOR A REFUND. If neither you nor the Joint
Annuitant survives to the first Annuity Income Date, the Contract will be
canceled and we will make a refund equal to your Purchase Payment to your
Beneficiary or Beneficiaries. See DEATH BENEFIT on page .
There are three types of Contracts. You may purchase a Non-qualified
Contract with money from any source. In addition, you may purchase a
Qualified Contract that is an Individual Retirement Annuity with
contributions rolled-over from tax-qualified plans such as 403(b) plans,
401(k) plans, or IRAs. You may also arrange with your employer to purchase
a Tax-Sheltered Annuity Contract using money from a 403(b) tax-sheltered
annuity plan.
Under the Contract, we will distribute lifetime annuity income to you or to
you and the Joint Annuitant. The Federal income tax laws have a
special requirement for Qualified and Tax-Sheltered Annuity Contracts that
have a Joint Annuitant. For these Contracts, during your lifetime annuity
income can be payable only to you.
You are an Owner of the Contract. The Joint Annuitant will also be an Owner
if so named on the application, except that for Qualified Contracts and
Tax-Sheltered Annuity Contracts you must be the only Owner.
There are currently thirteen Investment Options. Five Investment
Options invest in Variable Insurance Products Fund, which currently offers
Money Market Portfolio, High Income Portfolio, Equity-Income Portfolio,
Growth Portfolio and O verseas P ortfolio. F ive
Investment Options invest in Variable Insurance Products Fund II, which
currently offers Investment Grade Bond Portfolio, Index 500 Portfolio,
Asset Manager Portfolio, Asset Manager: Growth Portfolio and Contrafund
Portfolio. Three Investment Options invest in Variable Insurance
Products Fund III, which currently offers Growth & Income Portfolio,
Balanced Portfolio, and Growth Opportunities Portfolio. Variable
Insurance Products Fund , Variable Insurance Products Fund II , and
Variable Insurance Products Fund III are collectively referred to as
the "Funds".
We intend this summary to provide only an overview of the more significant
aspects of the Contract. You will find more detailed information in the
rest of this prospectus and in the Contract. Please retain the Contract
together with its attached application. Together they are the entire
agreement between you and EFILI.
FEE TABLE
This information is intended to help you understand the various costs and
expenses that a Contract will bear directly or indirectly. It reflects
expenses of the Variable Account as well as the Portfolios. The tables
below do not reflect any deductions for taxes. Any applicable premium taxes
are deducted from a Contract on the Contract Date. See CHARGES on page of
this prospectus for additional information.
CONTRACT EXPENSES
NONE
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of Portfolio average net assets)
Mortality and Expense Risk Charge 0.75%
Account Fees and Expenses:
Administrative Charge . 0.25%
Total Separate Account Annual Expenses 1.00%
PORTFOLIO ANNUAL EXPENSES
(as a percentage of Portfolio average net assets)
MANAGEMENT OTHER TOTAL ANNUAL
FEES EXPENSES EXPENSES
ASSET MANAGER 0.64% 0.10% 0.74%1
MONEY MARKET 0.21% 0.09% 0.30%
INVESTMENT GRADE BOND 0.45% 0.13% 0.58%
HIGH INCOME 0.59% 0.12% 0.71%
EQUITY-INCOME 0.51% 0.07% 0.58%1
INDEX 500 0.13% 0.15% 0.28%2
GROWTH 0.61% 0.08% 0.69%1
OVERSEAS 0.76% 0.17% 0.93%1
ASSET MANAGER GROWTH 0.65% 0.22% 0.87%1
CONTRAFUND 0.61% 0.13% 0.74%1
GROWTH OPPORTUNITIES 0.61% 0.16% 0.77%1
BALANCED 0.48% 0.24% 0.72%1
GROWTH & INCOME 0.50% 0.20% 0.70%
(1) A portion of the brokerage commissions that certain funds pay was used
to reduce funds expenses. In addition, certain funds have entered into
arrangements with their custodian and transfer agent whereby interest
earned on uninvested cash balances was used to reduce custodian and
transfer agent expenses. Including these reductions, the total operating
expenses presented in the table would have been .56% for Equity-Income
Portfolio, .67% for Growth Portfolio, .92% for Overseas Portfolio, .73% for
Asset Manager Portfolio, .71% for Contrafund Portfolio, .85% for Asset
Manager: Growth Portfolio, .76% for Growth Opportunities Portfolio, and
.71% for Balanced Portfolio.
(2) FMR agreed to reimburse a portion of Index 500 Portfolio's expenses
during the period. Without this reimbursement, the fund's management fee,
other expenses and total expenses would have been .28%, .15% and .43%,
respectively.
FACTS ABOUT EFILI,
THE VARIABLE ACCOUNT AND THE FUNDS
EFILI
EFILI is a stock life insurance company organized under the laws of the
State of New York on May 1, 1991. EFILI is part of Fidelity Investments, a
group of companies that provides a variety of financial services and
products. EFILI is a wholly-owned subsidiary of Fidelity Investments Life
Insurance Company. Fidelity Investments Life Insurance Company is a
wholly-owned subsidiary of FMR Corp., the parent company of the Fidelity
companies. Through ownership of voting common stock, Edward C. Johnson 3d,
Johnson family members, and various trusts for the benefit of Johnson
family members form a controlling group with respect to FMR Corp. EFILI's
financial statements appear in the Statement of Additional Information. Our
principal executive offices are located at 200 Liberty Street, One World
Financial Center, New York, New York 10281.
THE VARIABLE ACCOUNT
Empire Fidelity Investments Variable Annuity Account A was established as a
separate investment account on July 15, 1991. It supports the Contracts and
other forms of variable annuity contracts, and may be used for other
purposes permitted by law.
The Variable Account is registered with the Securities and Exchange
Commission ("SEC") as a unit investment trust under the Investment Company
Act of 1940 ("1940 Act"). Financial statements for the Variable Account are
in the Statement of Additional Information.
EFILI owns the assets in the Variable Account. The assets of the Variable
Account are kept separate from EFILI's general account assets and from any
other separate accounts EFILI may have, as required by law. The assets of
the Variable Account may not be charged with liabilities from any other
business EFILI conducts. All income, gains and losses concerning assets
allocated to the Variable Account are credited to or charged against the
Variable Account without regard to other income, gains or losses of EFILI.
Assets are maintained in the Variable Account at least equal to the
reserves and other liabilities of the Variable Account. If the assets
exceed the required reserves and other liabilities, EFILI may transfer the
excess to its general account. EFILI is obligated to provide all benefits
under the Contracts.
THE FUNDS
The Funds are Variable Insurance Products Fund, Variable Insurance Products
Fund II, and Variable Insurance Products Fund III. Each Fund is an
open-end, diversified management investment company organized by FMR and is
the type of investment company commonly known as a series mutual fund.
The investment objectives of the Portfolios of Variable Insurance Products
Fund, Variable Insurance Products Fund II, and Variable Insurance Products
Fund III are described below. There is of course no assurance that any
Portfolio will meet its investment objective.
Following the description of each Portfolio is a graph showing how your
annuity income can fluctuate based on past investment performance through
December 31, 1996. Each graph shows the effect that the Portfolio's
investment performance would have had if a Contract with a Benchmark Rate
of Return of 5.0%, providing an initial monthly annuity income of $500, was
purchased on the date the Portfolio commenced operations. Annuity income
increases for a given month if the annualized Net Rate of Return for that
month is higher than the Benchmark Rate of Return, and decreases for a
given month if the annualized Net Rate of Return is lower than the
Benchmark Rate of Return. The Purchase Payment necessary for an initial
monthly annuity income of $500 will vary depending on the age and sex of
the Annuitant (and Joint Annuitant, if any), the annuity income option and
the first Annuity Income Date. Suppose a 65 year old male who lives in a
state that does not charge a premium tax wishes to purchase $500 of initial
monthly variable annuity income beginning on the Contract Date. If there is
no Joint Annuitant and no guarantee period and he chooses a 5% Benchmark
Rate of Return, the Purchase Payment needed would be $73,793. If the
purchaser were female, the Purchase Payment necessary would be $82,687.
This is because females have a longer life expectancy than males.
All the graphs take into account all charges under the Contract and the
actual expenses of the Portfolios.
THE PORTFOLIOS
ASSET MANAGER PORTFOLIO of Variable Insurance Products Fund II seeks high
total return with reduced risk over the long-term by allocating its assets
among stocks, bonds and short-term, fixed income instruments. The fund
may be appropriate for investors who want to diversify among domestic and
foreign stocks, bonds, short-term instruments and other types of
securities, the fund spreads its assets among all three asset classes
moderating both its risk and return potential. Because the fund owns
different types of investments, the performance is affected by a variety of
factors. The value of the fund's investments and the income generated will
vary from day to day, and generally reflect interest rates, market
conditions, and other company, political and economic news. Performance
also depends on FMR's skills in allocating assets. The graph below is based
on a 5% Benchmark Rate of Return and initial monthly annuity income of
$500.
PROSPECTUS CHARTS
M&E 0.01
BRR 0.05
Month # of DAsset Manager
Apr-82
May-82 31.00
Jun-82 30.00
Jul-82 31.00
Aug-82 31.00
Sep-82 30.00
Oct-82 31.00
Nov-82 30.00
Dec-82 31.00
Jan-83 31.00
Feb-83 28.00
Mar-83 31.00
Apr-83 30.00
May-83 31.00
Jun-83 30.00
Jul-83 31.00
Aug-83 31.00
Sep-83 30.00
Oct-83 31.00
Nov-83 30.00
Dec-83 31.00
Jan-84 31.00
Feb-84 29.00
Mar-84 31.00
Apr-84 30.00
May-84 31.00
Jun-84 30.00
Jul-84 31.00
Aug-84 31.00
Sep-84 30.00
Oct-84 31.00
Nov-84 30.00
Dec-84 31.00
Jan-85 31.00
Feb-85 28.00
Mar-85 31.00
Apr-85 30.00
May-85 31.00
Jun-85 30.00
Jul-85 31.00
Aug-85 31.00
Sep-85 30.00
Oct-85 31.00
Nov-85 30.00
Dec-85 31.00
Jan-86 31.00
Feb-86 28.00
Mar-86 31.00
Apr-86 30.00
May-86 31.00
Jun-86 30.00
Jul-86 31.00
Aug-86 31.00
Sep-86 30.00
Oct-86 31.00
Nov-86 30.00
Dec-86 31.00
Jan-87 31.00
Feb-87 28.00
Mar-87 31.00
Apr-87 30.00
May-87 31.00
Jun-87 30.00
Jul-87 31.00
Aug-87 31.00
Sep-87 30.00
Oct-87 31.00
Nov-87 30.00
Dec-87 31.00
Jan-88 31.00
Feb-88 29.00
Mar-88 31.00
Apr-88 30.00
May-88 31.00
Jun-88 30.00
Jul-88 31.00
Aug-88 31.00
Sep-88 30.00
Oct-88 31.00
Nov-88 30.00
Dec-88 31.00
Jan-89 31.00
Feb-89 28.00
Mar-89 31.00
Apr-89 30.00
May-89 31.00
Jun-89 30.00
Jul-89 31.00
Aug-89 31.00
Sep-89 30.00 $500
Oct-89 31.00 0.20 100.11%$499
Nov-89 30.00 0.40 100.32%$498
Dec-89 31.00 0.31 100.22%$497
Jan-90 31.00 -2.21 97.71%$484
Feb-90 28.00 1.03 100.95%$486
Mar-90 31.00 0.81 100.73%$488
Apr-90 30.00 -1.31 98.61%$479
May-90 31.00 5.10 105.01%$501
Jun-90 30.00 0.78 100.69%$503
Jul-90 31.00 -0.19 99.72%$499
Aug-90 31.00 -3.28 96.64%$480
Sep-90 30.00 -2.10 97.82%$468
Oct-90 31.00 0.51 100.42%$468
Nov-90 30.00 4.87 104.78%$489
Dec-90 31.00 2.90 102.81%$500
Jan-91 31.00 4.79 104.70%$522
Feb-91 28.00 3.91 103.83%$540
Mar-91 31.00 1.61 101.53%$545
Apr-91 30.00 1.50 101.42%$551
May-91 31.00 2.26 102.17%$561
Jun-91 30.00 -1.79 98.13%$548
Jul-91 31.00 2.51 102.42%$559
Aug-91 31.00 2.03 101.94%$567
Sep-91 30.00 0.58 100.50%$568
Oct-91 31.00 0.66 100.57%$569
Nov-91 30.00 -1.64 98.28%$557
Dec-91 31.00 4.32 104.23%$578
Jan-92 31.00 1.27 101.19%$582
Feb-92 29.00 1.94 101.86%$591
Mar-92 31.00 -0.24 99.67%$587
Apr-92 30.00 1.47 101.38%$592
May-92 31.00 1.04 100.96%$596
Jun-92 30.00 -0.08 99.84%$592
Jul-92 31.00 1.67 101.58%$599
Aug-92 31.00 -0.31 99.60%$594
Sep-92 30.00 0.63 100.54%$595
Oct-92 31.00 0.16 100.07%$593
Nov-92 30.00 2.18 102.10%$603
Dec-92 31.00 1.60 101.51%$610
Jan-93 31.00 1.80 101.71%$618
Feb-93 28.00 0.94 100.86%$621
Mar-93 31.00 2.83 102.74%$635
Apr-93 30.00 0.60 100.52%$636
May-93 31.00 1.70 101.61%$643
Jun-93 30.00 0.80 100.72%$645
Jul-93 31.00 1.23 101.14%$650
Aug-93 31.00 2.92 102.83%$666
Sep-93 30.00 0.07 99.99%$663
Oct-93 31.00 2.70 102.61%$677
Nov-93 30.00 -0.13 99.79%$673
Dec-93 31.00 4.05 103.96%$697
Jan-94 31.00 3.18 103.09%$716
Feb-94 28.00 -3.18 96.75%$690
Mar-94 31.00 -4.70 95.22%$654
Apr-94 30.00 0.07 99.99%$651
May-94 31.00 0.86 100.77%$654
Jun-94 30.00 -1.91 98.01%$638
Jul-94 31.00 1.73 101.64%$646
Aug-94 31.00 2.34 102.25%$658
Sep-94 30.00 -1.18 98.74%$647
Oct-94 31.00 0.49 100.40%$647
Nov-94 30.00 -1.47 98.45%$634
Dec-94 31.00 -2.20 97.72%$617
Jan-95 31.00 -0.65 99.27%$610
Feb-95 28.00 1.62 101.54%$617
Mar-95 31.00 1.32 101.23%$622
Apr-95 30.00 1.59 101.51%$629
May-95 31.00 1.28 101.19%$634
Jun-95 30.00 0.84 100.76%$636
Jul-95 31.00 3.56 103.47%$655
Aug-95 31.00 1.21 101.12%$660
Sep-95 30.00 1.26 101.18%$665
Oct-95 31.00 -1.31 98.61%$653
Nov-95 30.00 2.60 102.52%$667
Dec-95 31.00 2.53 102.44%$680
Jan-96 31.00 2.15 102.06%$692
Feb-96 29.00 -0.27 99.65%$686
Mar-96 31.00 1.06 100.97%$690
Apr-96 30.00 1.05 100.97%$694
May-96 31.00 0.78 100.69%$696
Jun-96 30.00 0.90 100.82%$699
Jul-96 31.00 -1.66 98.26%$684
Aug-96 31.00 0.20 100.11%$682
Sep-96 30.00 3.64 103.55%$703
Oct-96 31.00 2.57 102.48%$718
Nov-96 30.00 4.95 104.86%$750
Dec-96 31.00 -1.46 98.46%$735
Listed in Order Max 750
to match MFPR Min 468
MONEY MARKET PORTFOLIO of Variable Insurance Products Fund seeks to obtain
as high a level of current income as is consistent with preserving capital
and providing liquidity. It invests only in high-quality money market
instruments. The fund may be appropriate for investors who would like to
earn income at current money market rates while preserving the value of
their investment. The fund is managed to keep its share price stable at
$1.00. The rate of income will vary from day to day, generally reflecting
short-term interest rates. The graph below is based on a 5% Benchmark Rate
of Return and initial monthly annuity income of $500.
PROSPECTUS CHACUMULATIVE ONE MONTH TOTAL RETURNS
M&E 0.01
BRR 0.05
Month # of DMoney Market
Apr-82 $500
May-82 31.00 1.16 101.07%$503
Jun-82 30.00 1.12 101.04%$506
Jul-82 31.00 1.18 101.09%$510
Aug-82 31.00 1.03 100.94%$513
Sep-82 30.00 0.89 100.81%$515
Oct-82 31.00 0.86 100.78%$516
Nov-82 30.00 0.80 100.71%$518
Dec-82 31.00 0.77 100.68%$519
Jan-83 31.00 0.72 100.63%$521
Feb-83 28.00 0.63 100.56%$521
Mar-83 31.00 0.70 100.61%$523
Apr-83 30.00 0.68 100.60%$524
May-83 31.00 0.69 100.60%$525
Jun-83 30.00 0.68 100.60%$526
Jul-83 31.00 0.77 100.69%$527
Aug-83 31.00 0.80 100.72%$529
Sep-83 30.00 0.79 100.70%$530
Oct-83 31.00 0.80 100.71%$532
Nov-83 30.00 0.76 100.68%$533
Dec-83 31.00 0.77 100.68%$535
Jan-84 31.00 0.77 100.69%$536
Feb-84 29.00 0.73 100.65%$537
Mar-84 31.00 0.80 100.71%$539
Apr-84 30.00 0.80 100.72%$541
May-84 31.00 0.85 100.76%$543
Jun-84 30.00 0.85 100.77%$545
Jul-84 31.00 0.91 100.82%$547
Aug-84 31.00 0.92 100.83%$549
Sep-84 30.00 0.90 100.82%$551
Oct-84 31.00 0.90 100.81%$553
Nov-84 30.00 0.79 100.71%$555
Dec-84 31.00 0.75 100.66%$557
Jan-85 31.00 0.71 100.62%$558
Feb-85 28.00 0.62 100.54%$559
Mar-85 31.00 0.70 100.61%$560
Apr-85 30.00 0.68 100.60%$561
May-85 31.00 0.68 100.60%$562
Jun-85 30.00 0.62 100.54%$563
Jul-85 31.00 0.63 100.54%$563
Aug-85 31.00 0.63 100.55%$564
Sep-85 30.00 0.62 100.53%$565
Oct-85 31.00 0.65 100.56%$566
Nov-85 30.00 0.63 100.55%$566
Dec-85 31.00 0.65 100.57%$567
Jan-86 31.00 0.65 100.56%$568
Feb-86 28.00 0.57 100.50%$569
Mar-86 31.00 0.62 100.54%$570
Apr-86 30.00 0.57 100.49%$570
May-86 31.00 0.56 100.47%$570
Jun-86 30.00 0.54 100.45%$571
Jul-86 31.00 0.55 100.46%$571
Aug-86 31.00 0.52 100.44%$571
Sep-86 30.00 0.48 100.39%$571
Oct-86 31.00 0.49 100.40%$571
Nov-86 30.00 0.47 100.38%$571
Dec-86 31.00 0.49 100.40%$571
Jan-87 31.00 0.50 100.41%$571
Feb-87 28.00 0.43 100.36%$571
Mar-87 31.00 0.48 100.40%$570
Apr-87 30.00 0.48 100.40%$570
May-87 31.00 0.52 100.43%$571
Jun-87 30.00 0.52 100.44%$571
Jul-87 31.00 0.54 100.45%$571
Aug-87 31.00 0.54 100.45%$571
Sep-87 30.00 0.53 100.45%$572
Oct-87 31.00 0.57 100.49%$572
Nov-87 30.00 0.54 100.46%$572
Dec-87 31.00 0.59 100.51%$573
Jan-88 31.00 0.58 100.49%$573
Feb-88 29.00 0.51 100.43%$573
Mar-88 31.00 0.54 100.46%$574
Apr-88 30.00 0.52 100.44%$574
May-88 31.00 0.55 100.47%$574
Jun-88 30.00 0.56 100.48%$575
Jul-88 31.00 0.60 100.51%$575
Aug-88 31.00 0.63 100.55%$576
Sep-88 30.00 0.63 100.55%$577
Oct-88 31.00 0.66 100.57%$578
Nov-88 30.00 0.65 100.57%$579
Dec-88 31.00 0.71 100.63%$580
Jan-89 31.00 0.74 100.65%$581
Feb-89 28.00 0.67 100.59%$582
Mar-89 31.00 0.78 100.69%$584
Apr-89 30.00 0.77 100.69%$586
May-89 31.00 0.79 100.71%$587
Jun-89 30.00 0.75 100.67%$589
Jul-89 31.00 0.75 100.67%$590
Aug-89 31.00 0.73 100.64%$592
Sep-89 30.00 0.71 100.63%$593
Oct-89 31.00 0.69 100.60%$594
Nov-89 30.00 0.68 100.59%$595
Dec-89 31.00 0.71 100.62%$597
Jan-90 31.00 0.66 100.57%$597
Feb-90 28.00 0.60 100.53%$598
Mar-90 31.00 0.69 100.60%$600
Apr-90 30.00 0.63 100.55%$600
May-90 31.00 0.67 100.58%$601
Jun-90 30.00 0.64 100.56%$602
Jul-90 31.00 0.66 100.58%$603
Aug-90 31.00 0.65 100.56%$604
Sep-90 30.00 0.63 100.54%$605
Oct-90 31.00 0.65 100.57%$606
Nov-90 30.00 0.63 100.55%$607
Dec-90 31.00 0.65 100.56%$608
Jan-91 31.00 0.64 100.55%$608
Feb-91 28.00 0.54 100.46%$609
Mar-91 31.00 0.50 100.41%$609
Apr-91 30.00 0.56 100.48%$609
May-91 31.00 0.50 100.41%$609
Jun-91 30.00 0.44 100.36%$609
Jul-91 31.00 0.52 100.43%$609
Aug-91 31.00 0.46 100.38%$609
Sep-91 30.00 0.47 100.39%$609
Oct-91 31.00 0.45 100.37%$609
Nov-91 30.00 0.41 100.33%$608
Dec-91 31.00 0.44 100.35%$608
Jan-92 31.00 0.41 100.32%$607
Feb-92 29.00 0.34 100.26%$606
Mar-92 31.00 0.37 100.28%$606
Apr-92 30.00 0.33 100.25%$605
May-92 31.00 0.30 100.22%$604
Jun-92 30.00 0.33 100.25%$603
Jul-92 31.00 0.31 100.22%$601
Aug-92 31.00 0.30 100.22%$600
Sep-92 30.00 0.28 100.20%$599
Oct-92 31.00 0.28 100.19%$598
Nov-92 30.00 0.29 100.21%$597
Dec-92 31.00 0.30 100.21%$595
Jan-93 31.00 0.28 100.19%$594
Feb-93 28.00 0.26 100.18%$593
Mar-93 31.00 0.29 100.20%$592
Apr-93 30.00 0.26 100.18%$590
May-93 31.00 0.24 100.15%$589
Jun-93 30.00 0.29 100.21%$588
Jul-93 31.00 0.26 100.17%$586
Aug-93 31.00 0.27 100.18%$585
Sep-93 30.00 0.25 100.17%$584
Oct-93 31.00 0.24 100.15%$582
Nov-93 30.00 0.27 100.19%$581
Dec-93 31.00 0.27 100.18%$580
Jan-94 31.00 0.27 100.18%$578
Feb-94 28.00 0.24 100.16%$577
Mar-94 31.00 0.29 100.20%$576
Apr-94 30.00 0.28 100.20%$575
May-94 31.00 0.34 100.25%$574
Jun-94 30.00 0.34 100.26%$573
Jul-94 31.00 0.34 100.25%$572
Aug-94 31.00 0.40 100.31%$571
Sep-94 30.00 0.38 100.30%$571
Oct-94 31.00 0.41 100.32%$570
Nov-94 30.00 0.41 100.33%$570
Dec-94 31.00 0.45 100.36%$570
Jan-95 31.00 0.50 100.41%$570
Feb-95 28.00 0.45 100.37%$569
Mar-95 31.00 0.50 100.41%$569
Apr-95 30.00 0.45 100.37%$569
May-95 31.00 0.53 100.44%$569
Jun-95 30.00 0.48 100.40%$569
Jul-95 31.00 0.49 100.40%$569
Aug-95 31.00 0.48 100.39%$569
Sep-95 30.00 0.45 100.37%$569
Oct-95 31.00 0.49 100.40%$569
Nov-95 30.00 0.46 100.38%$569
Dec-95 31.00 0.44 100.35%$568
Jan-96 31.00 0.49 100.40%$568
Feb-96 29.00 0.42 100.34%$568
Mar-96 31.00 0.41 100.32%$568
Apr-96 30.00 0.45 100.37%$567
May-96 31.00 0.43 100.34%$567
Jun-96 30.00 0.39 100.31%$567
Jul-96 31.00 0.47 100.38%$566
Aug-96 31.00 0.43 100.34%$566
Sep-96 30.00 0.45 100.37%$566
Oct-96 31.00 0.45 100.36%$565
Nov-96 30.00 0.42 100.34%$565
Dec-96 31.00 0.46 100.37%$565
Listed in Order Max 609
to match MFPR Min 500
INVESTMENT GRADE BOND PORTFOLIO of Variable Insurance Products Fund II
seeks as high a level of current income as is consistent with the
preservation of capital by investing in a broad range of investment-grade
fixed-income securities. The fund may be appropriate for investors who
want high current income from a portfolio of investment-grade debt
securities. A fund's level of risk and potential reward depend on the
quality and maturity of its investments. With its focus on medium- to
high-quality investments, the fund has a moderate risk level and yield
potential. The graph below is based on a 5% Benchmark Rate of Return and
initial monthly annuity income of $500.
PROSPECTUS CHARTS
M&E 0.01
BRR 0.05
Month # of DInvestment Grade Bond
Apr-82
May-82 31.00
Jun-82 30.00
Jul-82 31.00
Aug-82 31.00
Sep-82 30.00
Oct-82 31.00
Nov-82 30.00
Dec-82 31.00
Jan-83 31.00
Feb-83 28.00
Mar-83 31.00
Apr-83 30.00
May-83 31.00
Jun-83 30.00
Jul-83 31.00
Aug-83 31.00
Sep-83 30.00
Oct-83 31.00
Nov-83 30.00
Dec-83 31.00
Jan-84 31.00
Feb-84 29.00
Mar-84 31.00
Apr-84 30.00
May-84 31.00
Jun-84 30.00
Jul-84 31.00
Aug-84 31.00
Sep-84 30.00
Oct-84 31.00
Nov-84 30.00
Dec-84 31.00
Jan-85 31.00
Feb-85 28.00
Mar-85 31.00
Apr-85 30.00
May-85 31.00
Jun-85 30.00
Jul-85 31.00
Aug-85 31.00
Sep-85 30.00
Oct-85 31.00
Nov-85 30.00
Dec-85 31.00
Jan-86 31.00
Feb-86 28.00
Mar-86 31.00
Apr-86 30.00
May-86 31.00
Jun-86 30.00
Jul-86 31.00
Aug-86 31.00
Sep-86 30.00
Oct-86 31.00
Nov-86 30.00
Dec-86 31.00
Jan-87 31.00
Feb-87 28.00
Mar-87 31.00
Apr-87 30.00
May-87 31.00
Jun-87 30.00
Jul-87 31.00
Aug-87 31.00
Sep-87 30.00
Oct-87 31.00
Nov-87 30.00
Dec-87 31.00
Jan-88 31.00
Feb-88 29.00
Mar-88 31.00
Apr-88 30.00
May-88 31.00
Jun-88 30.00
Jul-88 31.00
Aug-88 31.00
Sep-88 30.00
Oct-88 31.00
Nov-88 30.00
Dec-88 31.00 $500
Jan-89 31.00 0.87 100.78% $502
Feb-89 28.00 0.22 100.14% $501
Mar-89 31.00 0.62 100.54% $501
Apr-89 30.00 1.11 101.03% $504
May-89 31.00 1.11 101.03% $507
Jun-89 30.00 1.92 101.84% $515
Jul-89 31.00 1.56 101.47% $520
Aug-89 31.00 -0.80 99.12% $513
Sep-89 30.00 0.39 100.31% $513
Oct-89 31.00 1.55 101.46% $518
Nov-89 30.00 0.86 100.78% $520
Dec-89 31.00 0.41 100.32% $520
Jan-90 31.00 -0.23 99.69% $516
Feb-90 28.00 0.57 100.49% $517
Mar-90 31.00 0.30 100.22% $516
Apr-90 30.00 0.04 99.96% $513
May-90 31.00 1.57 101.48% $519
Jun-90 30.00 0.78 100.70% $520
Jul-90 31.00 0.99 100.91% $523
Aug-90 31.00 -0.01 99.91% $520
Sep-90 30.00 0.39 100.31% $520
Oct-90 31.00 0.01 99.92% $517
Nov-90 30.00 0.60 100.52% $518
Dec-90 31.00 1.04 100.95% $521
Jan-91 31.00 0.20 100.12% $519
Feb-91 28.00 1.01 100.93% $522
Mar-91 31.00 1.69 101.61% $528
Apr-91 30.00 1.47 101.39% $533
May-91 31.00 0.77 100.69% $535
Jun-91 30.00 0.19 100.11% $533
Jul-91 31.00 0.86 100.77% $535
Aug-91 31.00 2.09 102.00% $543
Sep-91 30.00 1.86 101.77% $551
Oct-91 31.00 1.09 101.01% $554
Nov-91 30.00 1.08 101.00% $557
Dec-91 31.00 2.98 102.90% $571
Jan-92 31.00 -0.99 98.92% $563
Feb-92 29.00 0.55 100.47% $563
Mar-92 31.00 -0.18 99.73% $559
Apr-92 30.00 0.73 100.65% $561
May-92 31.00 1.54 101.45% $566
Jun-92 30.00 1.16 101.08% $570
Jul-92 31.00 2.03 101.94% $579
Aug-92 31.00 0.60 100.52% $580
Sep-92 30.00 1.20 101.12% $584
Oct-92 31.00 -1.27 98.65% $573
Nov-92 30.00 -0.26 99.66% $569
Dec-92 31.00 1.42 101.33% $574
Jan-93 31.00 2.10 102.01% $583
Feb-93 28.00 1.70 101.62% $591
Mar-93 31.00 0.44 100.35% $590
Apr-93 30.00 0.61 100.53% $591
May-93 31.00 0.17 100.08% $589
Jun-93 30.00 1.91 101.83% $597
Jul-93 31.00 0.68 100.59% $599
Aug-93 31.00 1.78 101.69% $606
Sep-93 30.00 0.50 100.42% $606
Oct-93 31.00 0.50 100.41% $606
Nov-93 30.00 -0.49 99.43% $600
Dec-93 31.00 0.59 100.50% $601
Jan-94 31.00 1.13 101.04% $605
Feb-94 28.00 -1.64 98.28% $592
Mar-94 31.00 -2.28 97.64% $576
Apr-94 30.00 -0.90 99.02% $568
May-94 31.00 -0.27 99.64% $563
Jun-94 30.00 -0.27 99.65% $559
Jul-94 31.00 1.64 101.55% $566
Aug-94 31.00 0.09 100.00% $563
Sep-94 30.00 -1.08 98.84% $554
Oct-94 31.00 0.09 100.00% $552
Nov-94 30.00 0.18 100.10% $550
Dec-94 31.00 -0.45 99.47% $545
Jan-95 31.00 1.45 101.36% $550
Feb-95 28.00 1.93 101.85% $559
Mar-95 31.00 0.64 100.55% $559
Apr-95 30.00 1.36 101.28% $564
May-95 31.00 4.01 103.92% $584
Jun-95 30.00 0.77 100.69% $586
Jul-95 31.00 -0.34 99.57% $581
Aug-95 31.00 1.19 101.10% $585
Sep-95 30.00 0.93 100.85% $587
Oct-95 31.00 1.34 101.25% $592
Nov-95 30.00 1.48 101.40% $598
Dec-95 31.00 1.38 101.29% $603
Jan-96 31.00 0.64 100.55% $604
Feb-96 29.00 -1.83 98.09% $590
Mar-96 31.00 -0.77 99.15% $583
Apr-96 30.00 -0.60 99.32% $576
May-96 31.00 -0.17 99.74% $573
Jun-96 30.00 1.21 101.13% $577
Jul-96 31.00 0.26 100.17% $575
Aug-96 31.00 -0.09 99.82% $572
Sep-96 30.00 1.62 101.54% $578
Oct-96 31.00 2.19 102.10% $588
Nov-96 30.00 1.65 101.57% $595
Dec-96 31.00 -0.89 99.03% $587
Listed in Order Max 606
to match MFPR Min 500
HIGH INCOME PORTFOLIO of Variable Insurance Products Fund seeks to obtain a
high level of current income by investing primarily in high-yielding,
lower-rated, fixed-income securities. In choosing these securities growth
of capital will also be considered. A fund's level of risk and potential
reward depend on the quality and maturity of its investments. The fund is
for long-term, aggressive investors who understand the potential risks and
rewards of investing in lower-quality debt, including defaulted securities.
Investors must be willing to accept the fund's greater price movements and
credit risks. The graph below is based on a 5% Benchmark Rate of Return and
initial monthly annuity income of $500.
PROSPECTUS CHARTS
M&E 0.01
BRR 0.05
Month # of DHigh Income
Apr-82
May-82 31.00
Jun-82 30.00
Jul-82 31.00
Aug-82 31.00
Sep-82 30.00
Oct-82 31.00
Nov-82 30.00
Dec-82 31.00
Jan-83 31.00
Feb-83 28.00
Mar-83 31.00
Apr-83 30.00
May-83 31.00
Jun-83 30.00
Jul-83 31.00
Aug-83 31.00
Sep-83 30.00
Oct-83 31.00
Nov-83 30.00
Dec-83 31.00
Jan-84 31.00
Feb-84 29.00
Mar-84 31.00
Apr-84 30.00
May-84 31.00
Jun-84 30.00
Jul-84 31.00
Aug-84 31.00
Sep-84 30.00
Oct-84 31.00
Nov-84 30.00
Dec-84 31.00
Jan-85 31.00
Feb-85 28.00
Mar-85 31.00
Apr-85 30.00
May-85 31.00
Jun-85 30.00
Jul-85 31.00
Aug-85 31.00
Sep-85 30.00 $500
Oct-85 31.00 1.25 101.16%$504
Nov-85 30.00 1.44 101.36%$509
Dec-85 31.00 3.34 103.25%$523
Jan-86 31.00 1.24 101.15%$527
Feb-86 28.00 3.38 103.30%$542
Mar-86 31.00 2.47 102.38%$553
Apr-86 30.00 1.70 101.62%$559
May-86 31.00 1.53 101.44%$565
Jun-86 30.00 1.26 101.18%$569
Jul-86 31.00 -0.30 99.61%$565
Aug-86 31.00 0.40 100.31%$564
Sep-86 30.00 0.85 100.77%$566
Oct-86 31.00 2.99 102.90%$580
Nov-86 30.00 0.32 100.24%$579
Dec-86 31.00 0.63 100.54%$580
Jan-87 31.00 3.65 103.56%$598
Feb-87 28.00 1.73 101.65%$606
Mar-87 31.00 0.91 100.82%$608
Apr-87 30.00 -3.13 96.79%$587
May-87 31.00 -0.93 98.99%$578
Jun-87 30.00 2.16 102.08%$588
Jul-87 31.00 0.11 100.02%$586
Aug-87 31.00 0.83 100.74%$588
Sep-87 30.00 -3.48 96.44%$564
Oct-87 31.00 -4.78 95.14%$535
Nov-87 30.00 2.95 102.86%$548
Dec-87 31.00 1.60 101.51%$554
Jan-88 31.00 3.29 103.20%$569
Feb-88 29.00 2.99 102.91%$583
Mar-88 31.00 -0.72 99.20%$576
Apr-88 30.00 0.78 100.70%$578
May-88 31.00 -0.15 99.76%$574
Jun-88 30.00 2.10 102.02%$584
Jul-88 31.00 1.04 100.95%$587
Aug-88 31.00 -0.48 99.44%$581
Sep-88 30.00 0.80 100.72%$583
Oct-88 31.00 1.09 101.00%$586
Nov-88 30.00 -0.38 99.54%$581
Dec-88 31.00 0.79 100.70%$583
Jan-89 31.00 2.40 102.31%$594
Feb-89 28.00 0.49 100.41%$594
Mar-89 31.00 -1.28 98.64%$584
Apr-89 30.00 -1.11 98.81%$574
May-89 31.00 1.85 101.76%$582
Jun-89 30.00 2.86 102.78%$596
Jul-89 31.00 -0.66 99.26%$589
Aug-89 31.00 -0.58 99.34%$582
Sep-89 30.00 -3.50 96.42%$559
Oct-89 31.00 -4.29 95.63%$533
Nov-89 30.00 0.08 100.00%$531
Dec-89 31.00 -0.27 99.64%$527
Jan-90 31.00 -2.21 97.71%$512
Feb-90 28.00 -1.54 98.38%$502
Mar-90 31.00 -1.06 98.86%$494
Apr-90 30.00 0.30 100.22%$493
May-90 31.00 2.05 101.96%$501
Jun-90 30.00 1.58 101.50%$507
Jul-90 31.00 1.54 101.45%$512
Aug-90 31.00 -1.67 98.25%$501
Sep-90 30.00 -2.37 97.55%$486
Oct-90 31.00 -2.43 97.49%$472
Nov-90 30.00 2.35 102.27%$481
Dec-90 31.00 1.40 101.31%$485
Jan-91 31.00 2.12 102.03%$493
Feb-91 28.00 5.54 105.46%$518
Mar-91 31.00 3.54 103.45%$534
Apr-91 30.00 3.55 103.46%$550
May-91 31.00 1.47 101.38%$555
Jun-91 30.00 2.17 102.09%$565
Jul-91 31.00 3.78 103.69%$583
Aug-91 31.00 1.37 101.28%$588
Sep-91 30.00 2.24 102.16%$598
Oct-91 31.00 3.40 103.31%$616
Nov-91 30.00 0.85 100.77%$618
Dec-91 31.00 0.53 100.44%$618
Jan-92 31.00 5.34 105.25%$648
Feb-92 29.00 3.63 103.55%$668
Mar-92 31.00 3.23 103.14%$686
Apr-92 30.00 0.71 100.63%$688
May-92 31.00 1.20 101.11%$693
Jun-92 30.00 1.09 101.01%$697
Jul-92 31.00 1.96 101.87%$707
Aug-92 31.00 2.12 102.03%$718
Sep-92 30.00 1.04 100.96%$722
Oct-92 31.00 -1.49 98.43%$708
Nov-92 30.00 1.23 101.15%$713
Dec-92 31.00 1.03 100.94%$717
Jan-93 31.00 2.68 102.59%$733
Feb-93 28.00 1.71 101.63%$742
Mar-93 31.00 2.31 102.22%$755
Apr-93 30.00 0.66 100.58%$756
May-93 31.00 1.49 101.40%$764
Jun-93 30.00 2.58 102.50%$780
Jul-93 31.00 0.99 100.90%$784
Aug-93 31.00 1.07 100.98%$788
Sep-93 30.00 0.35 100.27%$787
Oct-93 31.00 2.36 102.27%$802
Nov-93 30.00 0.94 100.86%$805
Dec-93 31.00 1.61 101.52%$814
Jan-94 31.00 3.34 103.25%$837
Feb-94 28.00 -0.12 99.80%$832
Mar-94 31.00 -3.37 96.55%$800
Apr-94 30.00 -1.01 98.91%$788
May-94 31.00 0.19 100.10%$786
Jun-94 30.00 -0.37 99.55%$779
Jul-94 31.00 0.37 100.28%$778
Aug-94 31.00 0.00 99.91%$774
Sep-94 30.00 0.74 100.66%$776
Oct-94 31.00 -0.92 99.00%$765
Nov-94 30.00 -0.83 99.09%$755
Dec-94 31.00 0.56 100.47%$756
Jan-95 31.00 1.12 101.03%$760
Feb-95 28.00 3.43 103.35%$783
Mar-95 31.00 1.25 101.16%$789
Apr-95 30.00 2.93 102.85%$808
May-95 31.00 2.57 102.48%$825
Jun-95 30.00 0.27 100.19%$823
Jul-95 31.00 2.41 102.32%$838
Aug-95 31.00 0.79 100.70%$841
Sep-95 30.00 1.65 101.57%$851
Oct-95 31.00 0.94 100.85%$854
Nov-95 30.00 0.51 100.43%$855
Dec-95 31.00 1.18 101.09%$860
Jan-96 31.00 2.32 102.23%$876
Feb-96 29.00 1.65 101.57%$886
Mar-96 31.00 -0.26 99.65%$880
Apr-96 30.00 1.49 101.41%$888
May-96 31.00 1.38 101.29%$896
Jun-96 30.00 0.51 100.43%$896
Jul-96 31.00 -0.34 99.57%$889
Aug-96 31.00 1.45 101.36%$897
Sep-96 30.00 2.94 102.86%$919
Oct-96 31.00 -0.33 99.58%$912
Nov-96 30.00 1.06 100.98%$917
Dec-96 31.00 1.38 101.29%$925
Listed in Order Max 925
to match MFPR Min 472
EQUITY-INCOME PORTFOLIO of Variable Insurance Products Fund seeks
reasonable income by investing primarily in income-producing equity
securities. In choosing these securities the Portfolio will also consider
the potential for capital appreciation. The Portfolio's goal is to achieve
a yield which exceeds the composite yield on the securities comprising the
Standard & Poor's 500 Composite Stock Price Index. The fund may be
appropriate for investors who are willing to ride out stock market
fluctuations in pursuit of potentially high long-term returns. The fund is
designed for those who want some income from equity and bond investments,
but also want to be invested in the stock market for its long-term growth
potential. The graph below is based on a 5% Benchmark Rate of Return and
initial monthly annuity income of $500.
PROSPECTUS CHARTS
M&E 0.01
BRR 0.05
Month # of Equity Income
Apr-82
May-82 31.00
Jun-82 30.00
Jul-82 31.00
Aug-82 31.00
Sep-82 30.00
Oct-82 31.00
Nov-82 30.00
Dec-82 31.00
Jan-83 31.00
Feb-83 28.00
Mar-83 31.00
Apr-83 30.00
May-83 31.00
Jun-83 30.00
Jul-83 31.00
Aug-83 31.00
Sep-83 30.00
Oct-83 31.00
Nov-83 30.00
Dec-83 31.00
Jan-84 31.00
Feb-84 29.00
Mar-84 31.00
Apr-84 30.00
May-84 31.00
Jun-84 30.00
Jul-84 31.00
Aug-84 31.00
Sep-84 30.00
Oct-84 31.00
Nov-84 30.00
Dec-84 31.00
Jan-85 31.00
Feb-85 28.00
Mar-85 31.00
Apr-85 30.00
May-85 31.00
Jun-85 30.00
Jul-85 31.00
Aug-85 31.00
Sep-85 30.00
Oct-85 31.00
Nov-85 30.00
Dec-85 31.00
Jan-86 31.00
Feb-86 28.00
Mar-86 31.00
Apr-86 30.00
May-86 31.00
Jun-86 30.00
Jul-86 31.00
Aug-86 31.00
Sep-86 30.00
Oct-86 31.00 $500
Nov-86 30.00 2.18 102.09% $508
Dec-86 31.00 -3.00 96.92% $491
Jan-87 31.00 11.48 111.38% $544
Feb-87 28.00 2.33 102.25% $554
Mar-87 31.00 2.54 102.45% $566
Apr-87 30.00 -2.49 97.43% $549
May-87 31.00 0.62 100.53% $550
Jun-87 30.00 2.08 102.00% $558
Jul-87 31.00 3.81 103.72% $577
Aug-87 31.00 2.75 102.66% $590
Sep-87 30.00 -2.10 97.82% $574
Oct-87 31.00 -19.51 80.42% $460
Nov-87 30.00 -4.47 95.45% $437
Dec-87 31.00 5.11 105.02% $457
Jan-88 31.00 7.11 107.02% $488
Feb-88 29.00 4.96 104.87% $509
Mar-88 31.00 -1.74 98.18% $498
Apr-88 30.00 1.66 101.57% $504
May-88 31.00 1.34 101.25% $508
Jun-88 30.00 5.69 105.60% $534
Jul-88 31.00 -0.18 99.73% $531
Aug-88 31.00 -1.72 98.19% $519
Sep-88 30.00 2.97 102.89% $532
Oct-88 31.00 1.73 101.64% $538
Nov-88 30.00 -1.61 98.31% $527
Dec-88 31.00 0.91 100.83% $529
Jan-89 31.00 6.18 106.09% $559
Feb-89 28.00 -0.51 99.41% $554
Mar-89 31.00 2.17 102.08% $563
Apr-89 30.00 3.86 103.77% $582
May-89 31.00 2.97 102.88% $596
Jun-89 30.00 0.07 99.99% $594
Jul-89 31.00 5.83 105.74% $625
Aug-89 31.00 1.61 101.52% $632
Sep-89 30.00 -1.12 98.79% $622
Oct-89 31.00 -5.77 94.15% $583
Nov-89 30.00 0.57 100.49% $584
Dec-89 31.00 0.83 100.75% $585
Jan-90 31.00 -6.75 93.17% $543
Feb-90 28.00 0.59 100.52% $544
Mar-90 31.00 0.16 100.08% $542
Apr-90 30.00 -3.47 96.45% $521
May-90 31.00 6.62 106.53% $552
Jun-90 30.00 -1.00 98.92% $544
Jul-90 31.00 -2.45 97.47% $528
Aug-90 31.00 -7.99 91.94% $484
Sep-90 30.00 -7.76 92.17% $444
Oct-90 31.00 -2.55 97.37% $431
Nov-90 30.00 7.17 107.08% $459
Dec-90 31.00 2.33 102.24% $468
Jan-91 31.00 5.36 105.27% $490
Feb-91 28.00 6.89 106.80% $522
Mar-91 31.00 2.07 101.99% $530
Apr-91 30.00 0.47 100.38% $530
May-91 31.00 5.49 105.40% $556
Jun-91 30.00 -4.09 95.83% $531
Jul-91 31.00 5.67 105.58% $558
Aug-91 31.00 2.11 102.02% $567
Sep-91 30.00 -0.69 99.23% $560
Oct-91 31.00 1.67 101.58% $567
Nov-91 30.00 -4.31 95.61% $540
Dec-91 31.00 7.90 107.81% $579
Jan-92 31.00 1.35 101.26% $584
Feb-92 29.00 3.25 103.16% $601
Mar-92 31.00 -1.23 98.69% $590
Apr-92 30.00 3.13 103.05% $606
May-92 31.00 0.80 100.71% $608
Jun-92 30.00 -0.88 99.04% $599
Jul-92 31.00 3.06 102.98% $615
Aug-92 31.00 -2.19 97.73% $598
Sep-92 30.00 1.04 100.95% $601
Oct-92 31.00 1.20 101.11% $606
Nov-92 30.00 3.63 103.54% $625
Dec-92 31.00 2.82 102.73% $639
Jan-93 31.00 2.99 102.90% $655
Feb-93 28.00 2.25 102.17% $667
Mar-93 31.00 2.98 102.89% $683
Apr-93 30.00 -0.42 99.50% $677
May-93 31.00 1.81 101.72% $686
Jun-93 30.00 1.18 101.10% $690
Jul-93 31.00 1.36 101.27% $696
Aug-93 31.00 3.83 103.74% $719
Sep-93 30.00 -0.38 99.54% $713
Oct-93 31.00 0.91 100.82% $716
Nov-93 30.00 -1.75 98.17% $700
Dec-93 31.00 2.31 102.22% $713
Jan-94 31.00 4.40 104.31% $740
Feb-94 28.00 -2.58 97.34% $718
Mar-94 31.00 -4.18 95.74% $685
Apr-94 30.00 3.45 103.36% $705
May-94 31.00 0.95 100.86% $708
Jun-94 30.00 -0.62 99.30% $700
Jul-94 31.00 3.34 103.25% $720
Aug-94 31.00 5.15 105.06% $753
Sep-94 30.00 -1.64 98.28% $737
Oct-94 31.00 2.05 101.96% $749
Nov-94 30.00 -3.27 96.65% $721
Dec-94 31.00 0.33 100.24% $720
Jan-95 31.00 1.56 101.47% $727
Feb-95 28.00 3.81 103.73% $751
Mar-95 31.00 3.45 103.36% $773
Apr-95 30.00 2.78 102.70% $791
May-95 31.00 3.01 102.92% $811
Jun-95 30.00 1.44 101.36% $819
Jul-95 31.00 3.85 103.76% $846
Aug-95 31.00 1.25 101.16% $852
Sep-95 30.00 3.32 103.23% $876
Oct-95 31.00 -1.15 98.77% $862
Nov-95 30.00 4.32 104.23% $895
Dec-95 31.00 2.93 102.84% $916
Jan-96 31.00 2.91 102.82% $938
Feb-96 29.00 0.34 100.26% $937
Mar-96 31.00 1.05 100.96% $942
Apr-96 30.00 1.30 101.22% $950
May-96 31.00 1.08 100.99% $955
Jun-96 30.00 -0.92 99.00% $942
Jul-96 31.00 -4.88 95.04% $892
Aug-96 31.00 2.05 101.96% $905
Sep-96 30.00 4.28 104.19% $939
Oct-96 31.00 1.62 101.53% $950
Nov-96 30.00 6.69 106.60% $1,009
Dec-96 31.00 -1.64 98.28% $987
Listed in Order Max 1,009
to match MFPR Min 431
INDEX 500 PORTFOLIO of Variable Insurance Products Fund II seeks to provide
investment results that correspond to the total return (i.e. the
combination of capital changes and income) of common stocks publicly traded
in the United States. In seeking this objective, the Portfolio attempts to
duplicate the composition and total return of the Standard & Poor's 500
Composite Stock Price Index. The fund may be appropriate for investors
who are willing to ride out stock market fluctuations in pursuit of
potentially high long-term returns. The fund is designed for those who want
to pursue growth of capital and current income through a portfolio of
securities that broadly represents the U.S. stock market, as measured by
the S&P 500. The fund seeks to keep expenses low as it attempts to match
the return of the S&P 500. Because the fund seeks to track, rather than
beat, the performance of the S&P 500, it is not managed in the same manner
as other mutual funds. The graph below is based on a 5% Benchmark Rate of
Return and initial monthly annuity income of $500.
PROSPECTUS CHARTS
M&E 0.01
BRR 0.05
Month # of Index 500
Apr-82
May-82 31.00
Jun-82 30.00
Jul-82 31.00
Aug-82 31.00
Sep-82 30.00
Oct-82 31.00
Nov-82 30.00
Dec-82 31.00
Jan-83 31.00
Feb-83 28.00
Mar-83 31.00
Apr-83 30.00
May-83 31.00
Jun-83 30.00
Jul-83 31.00
Aug-83 31.00
Sep-83 30.00
Oct-83 31.00
Nov-83 30.00
Dec-83 31.00
Jan-84 31.00
Feb-84 29.00
Mar-84 31.00
Apr-84 30.00
May-84 31.00
Jun-84 30.00
Jul-84 31.00
Aug-84 31.00
Sep-84 30.00
Oct-84 31.00
Nov-84 30.00
Dec-84 31.00
Jan-85 31.00
Feb-85 28.00
Mar-85 31.00
Apr-85 30.00
May-85 31.00
Jun-85 30.00
Jul-85 31.00
Aug-85 31.00
Sep-85 30.00
Oct-85 31.00
Nov-85 30.00
Dec-85 31.00
Jan-86 31.00
Feb-86 28.00
Mar-86 31.00
Apr-86 30.00
May-86 31.00
Jun-86 30.00
Jul-86 31.00
Aug-86 31.00
Sep-86 30.00
Oct-86 31.00
Nov-86 30.00
Dec-86 31.00
Jan-87 31.00
Feb-87 28.00
Mar-87 31.00
Apr-87 30.00
May-87 31.00
Jun-87 30.00
Jul-87 31.00
Aug-87 31.00
Sep-87 30.00
Oct-87 31.00
Nov-87 30.00
Dec-87 31.00
Jan-88 31.00
Feb-88 29.00
Mar-88 31.00
Apr-88 30.00
May-88 31.00
Jun-88 30.00
Jul-88 31.00
Aug-88 31.00
Sep-88 30.00
Oct-88 31.00
Nov-88 30.00
Dec-88 31.00
Jan-89 31.00
Feb-89 28.00
Mar-89 31.00
Apr-89 30.00
May-89 31.00
Jun-89 30.00
Jul-89 31.00
Aug-89 31.00
Sep-89 30.00
Oct-89 31.00
Nov-89 30.00
Dec-89 31.00
Jan-90 31.00
Feb-90 28.00
Mar-90 31.00
Apr-90 30.00
May-90 31.00
Jun-90 30.00
Jul-90 31.00
Aug-90 31.00
Sep-90 30.00
Oct-90 31.00
Nov-90 30.00
Dec-90 31.00
Jan-91 31.00
Feb-91 28.00
Mar-91 31.00
Apr-91 30.00
May-91 31.00
Jun-91 30.00
Jul-91 31.00
Aug-91 31.00
Sep-91 30.00
Oct-91 31.00
Nov-91 30.00
Dec-91 31.00
Jan-92 31.00
Feb-92 29.00
Mar-92 31.00
Apr-92 30.00
May-92 31.00
Jun-92 30.00
Jul-92 31.00
Aug-92 31.00
Sep-92 30.001.16 $500
Oct-92 31.000.22 100.13%$499
Nov-92 30.003.41 103.32%$513
Dec-92 31.001.26 101.17%$517
Jan-93 31.000.64 100.55%$518
Feb-93 28.001.32 101.24%$522
Mar-93 31.002.20 102.11%$531
Apr-93 30.00-2.55 97.37%$515
May-93 31.002.60 102.51%$526
Jun-93 30.000.26 100.18%$525
Jul-93 31.00-0.46 99.46%$520
Aug-93 31.003.79 103.70%$537
Sep-93 30.00-0.81 99.11%$530
Oct-93 31.002.04 101.95%$538
Nov-93 30.00-0.97 98.95%$530
Dec-93 31.001.20 101.11%$534
Jan-94 31.003.37 103.28%$549
Feb-94 28.00-2.71 97.22%$532
Mar-94 31.00-4.34 95.58%$506
Apr-94 30.001.20 101.12%$510
May-94 31.001.55 101.46%$515
Jun-94 30.00-2.44 97.48%$500
Jul-94 31.003.30 103.21%$514
Aug-94 31.003.99 103.90%$532
Sep-94 30.00-2.43 97.49%$516
Oct-94 31.002.22 102.13%$525
Nov-94 30.00-3.63 96.29%$504
Dec-94 31.001.46 101.37%$508
Jan-95 31.002.65 102.56%$519
Feb-95 28.003.83 103.75%$537
Mar-95 31.002.92 102.83%$550
Apr-95 30.002.94 102.86%$563
May-95 31.003.93 103.84%$582
Jun-95 30.002.27 102.19%$593
Jul-95 31.003.34 103.25%$609
Aug-95 31.000.25 100.16%$608
Sep-95 30.004.18 104.09%$630
Oct-95 31.00-0.34 99.57%$625
Nov-95 30.004.35 104.26%$649
Dec-95 31.001.83 101.74%$658
Jan-96 31.003.42 103.33%$677
Feb-96 29.000.93 100.85%$680
Mar-96 31.001.03 100.94%$683
Apr-96 30.001.40 101.32%$690
May-96 31.002.55 102.46%$704
Jun-96 30.000.43 100.35%$703
Jul-96 31.00-4.43 95.49%$669
Aug-96 31.002.06 101.97%$679
Sep-96 30.005.59 105.50%$714
Oct-96 31.002.76 102.67%$730
Nov-96 30.007.50 107.41%$781
Dec-96 31.00-1.97 97.95%$761
Listed in Order Max 781
to match MFPR Min 499
GROWTH PORTFOLIO of Variable Insurance Products Fund seeks to achieve
capital appreciation normally through the purchase of common stocks
(although the Portfolio's investments are not restricted to any one type of
security). Capital appreciation may also be found in other types of
securities, including bonds and preferred stocks. The fund may be
appropriate for investors who are willing to ride out stock market
fluctuations in pursuit of potentially high long-term returns. The fund is
designed for those who want to pursue growth wherever it may arise, and who
understand that this strategy often leads to investments in smaller, less
well-known companies. The fund invests for growth and does not pursue an
income strategy. The graph below is based on a 5% Benchmark Rate of Return
and initial monthly annuity income of $500.
PROSPECTUS CHARTS
M&E 0.01
BRR 0.05
Month # of Growth
Apr-82
May-82 31.00
Jun-82 30.00
Jul-82 31.00
Aug-82 31.00
Sep-82 30.00
Oct-82 31.00
Nov-82 30.00
Dec-82 31.00
Jan-83 31.00
Feb-83 28.00
Mar-83 31.00
Apr-83 30.00
May-83 31.00
Jun-83 30.00
Jul-83 31.00
Aug-83 31.00
Sep-83 30.00
Oct-83 31.00
Nov-83 30.00
Dec-83 31.00
Jan-84 31.00
Feb-84 29.00
Mar-84 31.00
Apr-84 30.00
May-84 31.00
Jun-84 30.00
Jul-84 31.00
Aug-84 31.00
Sep-84 30.00
Oct-84 31.00
Nov-84 30.00
Dec-84 31.00
Jan-85 31.00
Feb-85 28.00
Mar-85 31.00
Apr-85 30.00
May-85 31.00
Jun-85 30.00
Jul-85 31.00
Aug-85 31.00
Sep-85 30.00
Oct-85 31.00
Nov-85 30.00
Dec-85 31.00
Jan-86 31.00
Feb-86 28.00
Mar-86 31.00
Apr-86 30.00
May-86 31.00
Jun-86 30.00
Jul-86 31.00
Aug-86 31.00
Sep-86 30.00NEED #S
Oct-86 31.00 $500
Nov-86 30.002.20 102.12% $509
Dec-86 31.00-1.86 98.06% $497
Jan-87 31.0010.67 110.58% $547
Feb-87 28.004.95 104.87% $571
Mar-87 31.001.63 101.54% $578
Apr-87 30.000.00 99.92% $575
May-87 31.000.68 100.59% $576
Jun-87 30.002.94 102.86% $590
Jul-87 31.004.00 103.91% $611
Aug-87 31.002.98 102.89% $626
Sep-87 30.00-1.14 98.78% $616
Oct-87 31.00-21.9 77.96% $478
Nov-87 30.00-7.02 92.90% $442
Dec-87 31.0010.31 110.22% $485
Jan-88 31.002.17 102.08% $493
Feb-88 29.008.11 108.02% $531
Mar-88 31.00-0.89 99.03% $524
Apr-88 30.001.26 101.18% $528
May-88 31.00-0.89 99.03% $520
Jun-88 30.005.03 104.94% $544
Jul-88 31.00-0.51 99.41% $538
Aug-88 31.00-2.41 97.51% $523
Sep-88 30.002.82 102.74% $535
Oct-88 31.000.26 100.17% $534
Nov-88 30.00-0.94 98.98% $526
Dec-88 31.001.03 100.94% $529
Jan-89 31.007.17 107.08% $564
Feb-89 28.00-2.07 97.85% $550
Mar-89 31.003.02 102.93% $564
Apr-89 30.005.29 105.20% $591
May-89 31.003.58 103.49% $609
Jun-89 30.00-1.32 98.60% $598
Jul-89 31.008.94 108.85% $648
Aug-89 31.001.71 101.62% $656
Sep-89 30.000.87 100.79% $658
Oct-89 31.00-2.80 97.12% $637
Nov-89 30.001.64 101.56% $644
Dec-89 31.002.36 102.27% $656
Jan-90 31.00-5.80 94.12% $615
Feb-90 28.000.96 100.88% $618
Mar-90 31.001.22 101.13% $622
Apr-90 30.00-2.91 97.01% $601
May-90 31.008.85 108.76% $651
Jun-90 30.002.08 102.00% $661
Jul-90 31.00-1.58 98.34% $648
Aug-90 31.00-10.3 89.62% $578
Sep-90 30.00-10.2 89.64% $516
Oct-90 31.00-3.57 96.35% $495
Nov-90 30.008.10 108.01% $533
Dec-90 31.002.95 102.86% $546
Jan-91 31.006.66 106.57% $579
Feb-91 28.007.46 107.38% $620
Mar-91 31.003.02 102.93% $635
Apr-91 30.00-0.93 98.99% $626
May-91 31.005.91 105.82% $660
Jun-91 30.00-7.42 92.50% $608
Jul-91 31.009.53 109.44% $663
Aug-91 31.004.44 104.35% $689
Sep-91 30.000.78 100.70% $691
Oct-91 31.003.09 103.00% $708
Nov-91 30.00-5.71 94.21% $665
Dec-91 31.0013.21 113.11% $749
Jan-92 31.006.10 106.01% $791
Feb-92 29.002.09 102.01% $803
Mar-92 31.00-6.13 93.79% $750
Apr-92 30.00-3.92 96.00% $717
May-92 31.00-0.85 99.07% $708
Jun-92 30.00-3.88 96.04% $677
Jul-92 31.003.86 103.77% $700
Aug-92 31.00-2.75 97.17% $677
Sep-92 30.001.76 101.68% $686
Oct-92 31.003.87 103.78% $709
Nov-92 30.006.68 106.59% $752
Dec-92 31.003.08 102.99% $772
Jan-93 31.001.97 101.88% $783
Feb-93 28.00-2.06 97.86% $763
Mar-93 31.003.99 103.90% $790
Apr-93 30.00-1.05 98.87% $778
May-93 31.007.45 107.36% $831
Jun-93 30.001.03 100.95% $836
Jul-93 31.00-0.28 99.63% $830
Aug-93 31.005.02 104.93% $867
Sep-93 30.001.86 101.78% $879
Oct-93 31.000.96 100.87% $883
Nov-93 30.00-4.05 95.87% $843
Dec-93 31.003.54 103.45% $868
Jan-94 31.002.51 102.42% $886
Feb-94 28.00-1.03 98.89% $873
Mar-94 31.00-4.54 95.38% $829
Apr-94 30.000.62 100.54% $830
May-94 31.00-2.32 97.60% $807
Jun-94 30.00-5.08 94.84% $762
Jul-94 31.003.47 103.38% $785
Aug-94 31.005.67 105.58% $825
Sep-94 30.00-1.21 98.71% $811
Oct-94 31.004.06 103.97% $840
Nov-94 30.00-3.99 95.93% $802
Dec-94 31.002.55 102.46% $819
Jan-95 31.00-1.89 98.03% $799
Feb-95 28.004.14 104.06% $828
Mar-95 31.003.63 103.54% $854
Apr-95 30.003.37 103.28% $879
May-95 31.003.90 103.81% $909
Jun-95 30.008.85 108.76% $984
Jul-95 31.009.89 109.80% $1,076
Aug-95 31.001.23 101.14% $1,084
Sep-95 30.002.59 102.51% $1,107
Oct-95 31.00-1.02 98.90% $1,090
Nov-95 30.00-0.07 99.85% $1,084
Dec-95 31.00-3.12 96.80% $1,045
Jan-96 31.001.58 101.49% $1,056
Feb-96 29.003.35 103.27% $1,086
Mar-96 31.000.39 100.30% $1,085
Apr-96 30.003.91 103.82% $1,122
May-96 31.003.13 103.04% $1,151
Jun-96 30.00-1.96 97.96% $1,123
Jul-96 31.00-7.65 92.27% $1,032
Aug-96 31.002.99 102.90% $1,058
Sep-96 30.006.72 106.63% $1,124
Oct-96 31.00-0.23 99.68% $1,115
Nov-96 30.005.55 105.46% $1,172
Dec-96 31.00-3.08 96.84% $1,130
Listed in Order Max 1,172
to match MFPR Min 442
OVERSEAS PORTFOLIO of Variable Insurance Products Fund seeks long-term
growth of capital primarily through investments in foreign securities.
Overseas Portfolio provides a means for investors to diversify their own
portfolios by participating in companies and economies outside of the
United States. The fund may be appropriate for investors who want to
pursue their investment goals in markets outside of the United States. By
including international investments in your portfolio, you can achieve
additional diversification and participate in growth opportunities around
the world. However, it is important to note that investments in foreign
securities involve risks in addition to those of U.S. investments.In
addition to general risks, international investing involves different or
increased risks. The performance of international funds depends upon
currency values, the political and regulatory environment, and overall
economic factors in the countries in which the fund invests. The graph
below is based on a 5% Benchmark Rate of Return and initial monthly annuity
income of $500.
PROSPECTUS CHARTS
M&E 0.01
BRR 0.05
Month # of Overseas
Apr-82
May-82 31.00
Jun-82 30.00
Jul-82 31.00
Aug-82 31.00
Sep-82 30.00
Oct-82 31.00
Nov-82 30.00
Dec-82 31.00
Jan-83 31.00
Feb-83 28.00
Mar-83 31.00
Apr-83 30.00
May-83 31.00
Jun-83 30.00
Jul-83 31.00
Aug-83 31.00
Sep-83 30.00
Oct-83 31.00
Nov-83 30.00
Dec-83 31.00
Jan-84 31.00
Feb-84 29.00
Mar-84 31.00
Apr-84 30.00
May-84 31.00
Jun-84 30.00
Jul-84 31.00
Aug-84 31.00
Sep-84 30.00
Oct-84 31.00
Nov-84 30.00
Dec-84 31.00
Jan-85 31.00
Feb-85 28.00
Mar-85 31.00
Apr-85 30.00
May-85 31.00
Jun-85 30.00
Jul-85 31.00
Aug-85 31.00
Sep-85 30.00
Oct-85 31.00
Nov-85 30.00
Dec-85 31.00
Jan-86 31.00
Feb-86 28.00
Mar-86 31.00
Apr-86 30.00
May-86 31.00
Jun-86 30.00
Jul-86 31.00
Aug-86 31.00
Sep-86 30.00
Oct-86 31.00
Nov-86 30.00
Dec-86 31.00
Jan-87 31.00 $500
Feb-87 28.000.10 100.02% $498
Mar-87 31.004.50 104.41% $518
Apr-87 30.007.27 107.18% $553
May-87 31.00-1.43 98.49% $542
Jun-87 30.00-4.88 95.04% $513
Jul-87 31.00-1.14 98.77% $505
Aug-87 31.008.85 108.75% $547
Sep-87 30.00-2.21 97.71% $532
Oct-87 31.00-20.8 79.07% $419
Nov-87 30.000.91 100.83% $421
Dec-87 31.007.04 106.95% $448
Jan-88 31.00-3.42 96.50% $431
Feb-88 29.002.66 102.58% $440
Mar-88 31.004.53 104.44% $458
Apr-88 30.001.65 101.57% $463
May-88 31.00-1.83 98.09% $452
Jun-88 30.00-1.76 98.16% $442
Jul-88 31.00-0.74 99.18% $437
Aug-88 31.00-3.50 96.42% $419
Sep-88 30.004.29 104.20% $435
Oct-88 31.004.43 104.34% $452
Nov-88 30.001.82 101.73% $458
Dec-88 31.000.20 100.11% $457
Jan-89 31.002.97 102.88% $468
Feb-89 28.001.73 101.65% $474
Mar-89 31.00-0.09 99.82% $471
Apr-89 30.002.95 102.87% $483
May-89 31.00-3.70 96.22% $463
Jun-89 30.00-0.38 99.53% $459
Jul-89 31.009.35 109.26% $499
Aug-89 31.00-0.71 99.21% $493
Sep-89 30.006.22 106.13% $521
Oct-89 31.00-5.43 94.48% $490
Nov-89 30.005.39 105.31% $514
Dec-89 31.006.29 106.20% $544
Jan-90 31.00-1.34 98.57% $534
Feb-90 28.00-2.33 97.59% $519
Mar-90 31.003.78 103.69% $536
Apr-90 30.000.55 100.47% $537
May-90 31.006.54 106.44% $569
Jun-90 30.002.22 102.13% $579
Jul-90 31.005.06 104.97% $605
Aug-90 31.00-10.1 89.74% $541
Sep-90 30.00-9.50 90.42% $487
Oct-90 31.009.31 109.22% $530
Nov-90 30.00-3.10 96.82% $511
Dec-90 31.00-0.72 99.20% $504
Jan-91 31.000.97 100.88% $507
Feb-91 28.003.37 103.29% $522
Mar-91 31.00-2.92 96.99% $504
Apr-91 30.002.20 102.11% $512
May-91 31.000.24 100.15% $511
Jun-91 30.00-5.48 94.44% $481
Jul-91 31.004.96 104.87% $502
Aug-91 31.000.32 100.23% $501
Sep-91 30.004.07 103.99% $519
Oct-91 31.000.69 100.60% $520
Nov-91 30.00-3.58 96.34% $499
Dec-91 31.003.48 103.39% $514
Jan-92 31.001.22 101.14% $517
Feb-92 29.00-2.08 97.84% $504
Mar-92 31.00-2.03 97.89% $492
Apr-92 30.006.22 106.13% $520
May-92 31.004.35 104.27% $539
Jun-92 30.00-1.87 98.05% $527
Jul-92 31.00-6.38 93.54% $491
Aug-92 31.00-0.86 99.05% $484
Sep-92 30.00-4.03 95.89% $462
Oct-92 31.00-6.83 93.09% $429
Nov-92 30.00-0.53 99.39% $424
Dec-92 31.002.49 102.40% $433
Jan-93 31.002.86 102.77% $443
Feb-93 28.001.96 101.88% $450
Mar-93 31.006.94 106.85% $478
Apr-93 30.006.65 106.56% $508
May-93 31.002.15 102.06% $516
Jun-93 30.00-2.47 97.45% $501
Jul-93 31.003.95 103.86% $518
Aug-93 31.005.44 105.35% $543
Sep-93 30.00-0.48 99.44% $538
Oct-93 31.003.62 103.53% $555
Nov-93 30.00-4.22 95.70% $529
Dec-93 31.006.61 106.52% $561
Jan-94 31.006.52 106.43% $595
Feb-94 28.00-1.76 98.16% $582
Mar-94 31.00-2.48 97.44% $564
Apr-94 30.003.31 103.22% $580
May-94 31.00-1.23 98.69% $570
Jun-94 30.00-1.06 98.86% $562
Jul-94 31.002.65 102.56% $574
Aug-94 31.001.17 101.08% $577
Sep-94 30.00-2.61 97.31% $560
Oct-94 31.002.06 101.97% $568
Nov-94 30.00-3.79 96.13% $544
Dec-94 31.00-0.57 99.35% $538
Jan-95 31.00-4.15 95.77% $513
Feb-95 28.000.26 100.18% $512
Mar-95 31.003.08 102.99% $526
Apr-95 30.002.86 102.78% $538
May-95 31.001.39 101.30% $543
Jun-95 30.000.81 100.73% $544
Jul-95 31.004.44 104.35% $566
Aug-95 31.00-2.78 97.14% $547
Sep-95 30.001.46 101.38% $553
Oct-95 31.00-1.98 97.94% $539
Nov-95 30.001.16 101.08% $543
Dec-95 31.002.96 102.87% $556
Jan-96 31.001.88 101.79% $564
Feb-96 29.000.22 100.14% $562
Mar-96 31.001.53 101.44% $568
Apr-96 30.002.78 102.70% $581
May-96 31.000.06 99.97% $578
Jun-96 30.000.73 100.65% $580
Jul-96 31.00-2.96 96.96% $560
Aug-96 31.000.75 100.66% $561
Sep-96 30.002.92 102.84% $575
Oct-96 31.00-1.00 98.92% $566
Nov-96 30.005.22 105.13% $593
Dec-96 31.000.53 100.44% $593
Listed in Order Max 605
to match MFPR Min 419
ASSET MANAGER: GROWTH PORTFOLIO of Variable Insurance Products Fund II
seeks to maximize total return by allocating its assets among a mix of
domestic and foreign stocks, bonds and short-term fixed income
instruments. The fund may be appropriate for investors who want to
diversify among domestic and foreign stocks, bonds, short-term instruments
and other types of securities, in one fund. The fund, while spreading its
assets among all three asset classes, uses a more aggressive approach by
focusing on stocks for a higher potential return. Because the fund own
different types of investments, their performance is affected by a variety
of factors. The value of the fund's investments and the income generated
will vary from day to day, and generally reflect interest rates, market
conditions, and other company, political and economic news. Performance
also depends on FMR's skills in allocating assets. The graph below is based
on a 5% Benchmark Rate of Return and initial monthly annuity income of
$500.
PROSPECTUS CHARTS
M&E 0.01
BRR 0.05
Month # of DAsset Manager:Growth
Apr-82
May-82 31.00
Jun-82 30.00
Jul-82 31.00
Aug-82 31.00
Sep-82 30.00
Oct-82 31.00
Nov-82 30.00
Dec-82 31.00
Jan-83 31.00
Feb-83 28.00
Mar-83 31.00
Apr-83 30.00
May-83 31.00
Jun-83 30.00
Jul-83 31.00
Aug-83 31.00
Sep-83 30.00
Oct-83 31.00
Nov-83 30.00
Dec-83 31.00
Jan-84 31.00
Feb-84 29.00
Mar-84 31.00
Apr-84 30.00
May-84 31.00
Jun-84 30.00
Jul-84 31.00
Aug-84 31.00
Sep-84 30.00
Oct-84 31.00
Nov-84 30.00
Dec-84 31.00
Jan-85 31.00
Feb-85 28.00
Mar-85 31.00
Apr-85 30.00
May-85 31.00
Jun-85 30.00
Jul-85 31.00
Aug-85 31.00
Sep-85 30.00
Oct-85 31.00
Nov-85 30.00
Dec-85 31.00
Jan-86 31.00
Feb-86 28.00
Mar-86 31.00
Apr-86 30.00
May-86 31.00
Jun-86 30.00
Jul-86 31.00
Aug-86 31.00
Sep-86 30.00
Oct-86 31.00
Nov-86 30.00
Dec-86 31.00
Jan-87 31.00
Feb-87 28.00
Mar-87 31.00
Apr-87 30.00
May-87 31.00
Jun-87 30.00
Jul-87 31.00
Aug-87 31.00
Sep-87 30.00
Oct-87 31.00
Nov-87 30.00
Dec-87 31.00
Jan-88 31.00
Feb-88 29.00
Mar-88 31.00
Apr-88 30.00
May-88 31.00
Jun-88 30.00
Jul-88 31.00
Aug-88 31.00
Sep-88 30.00
Oct-88 31.00
Nov-88 30.00
Dec-88 31.00
Jan-89 31.00
Feb-89 28.00
Mar-89 31.00
Apr-89 30.00
May-89 31.00
Jun-89 30.00
Jul-89 31.00
Aug-89 31.00
Sep-89 30.00
Oct-89 31.00
Nov-89 30.00
Dec-89 31.00
Jan-90 31.00
Feb-90 28.00
Mar-90 31.00
Apr-90 30.00
May-90 31.00
Jun-90 30.00
Jul-90 31.00
Aug-90 31.00
Sep-90 30.00
Oct-90 31.00
Nov-90 30.00
Dec-90 31.00
Jan-91 31.00
Feb-91 28.00
Mar-91 31.00
Apr-91 30.00
May-91 31.00
Jun-91 30.00
Jul-91 31.00
Aug-91 31.00
Sep-91 30.00
Oct-91 31.00
Nov-91 30.00
Dec-91 31.00
Jan-92 31.00
Feb-92 29.00
Mar-92 31.00
Apr-92 30.00
May-92 31.00
Jun-92 30.00
Jul-92 31.00
Aug-92 31.00
Sep-92 30.00
Oct-92 31.00
Nov-92 30.00
Dec-92 31.00
Jan-93 31.00
Feb-93 28.00
Mar-93 31.00
Apr-93 30.00
May-93 31.00
Jun-93 30.00
Jul-93 31.00
Aug-93 31.00
Sep-93 30.00
Oct-93 31.00
Nov-93 30.00
Dec-93 31.00
Jan-94 31.00
Feb-94 28.00
Mar-94 31.00
Apr-94 30.00
May-94 31.00
Jun-94 30.00
Jul-94 31.00
Aug-94 31.00
Sep-94 30.00
Oct-94 31.00
Nov-94 30.00
Dec-94 31.00
Jan-95 31.00 $500
Feb-95 28.00 1.50 101.42% $505
Mar-95 31.00 1.38 101.29% $510
Apr-95 30.00 2.62 102.54% $520
May-95 31.00 1.42 101.33% $525
Jun-95 30.00 4.01 103.92% $544
Jul-95 31.00 3.67 103.58% $561
Aug-95 31.00 4.49 104.40% $583
Sep-95 30.00 1.49 101.41% $589
Oct-95 31.00 -3.83 96.09% $564
Nov-95 30.00 1.78 101.70% $571
Dec-95 31.00 2.52 102.43% $582
Jan-96 31.00 2.38 102.29% $593
Feb-96 29.00 0.35 100.27% $592
Mar-96 31.00 1.80 101.71% $600
Apr-96 30.00 2.36 102.28% $611
May-96 31.00 1.56 101.47% $618
Jun-96 30.00 0.40 100.32% $617
Jul-96 31.00 -2.50 97.42% $599
Aug-96 31.00 0.74 100.65% $600
Sep-96 30.00 4.11 104.02% $622
Oct-96 31.00 2.92 102.83% $637
Nov-96 30.00 6.51 106.42% $675
Dec-96 31.00 -1.90 98.02% $659
Listed in Order Max 675
to match MFPR Min 500
CONTRAFUND PORTFOLIO of Variable Insurance Products Fund II seeks capital
appreciation by investing primarily in equity securities of companies that
are considered to be undervalued or out-of-favor by the Fund's advisor.
The fund may be appropriate for investors who are willing to ride out stock
market fluctuations in pursuit of potentially high long-term returns. The
fund is designed for those who are looking for an investment approach that
follows a contrarian philosophy. The graph below is based on a 5% Benchmark
Rate of Return and initial monthly annuity income of $500.
PROSPECTUS CHARTS
M&E 0.01
BRR 0.05
Month # of DContrafund
Apr-82
May-82 31.00
Jun-82 30.00
Jul-82 31.00
Aug-82 31.00
Sep-82 30.00
Oct-82 31.00
Nov-82 30.00
Dec-82 31.00
Jan-83 31.00
Feb-83 28.00
Mar-83 31.00
Apr-83 30.00
May-83 31.00
Jun-83 30.00
Jul-83 31.00
Aug-83 31.00
Sep-83 30.00
Oct-83 31.00
Nov-83 30.00
Dec-83 31.00
Jan-84 31.00
Feb-84 29.00
Mar-84 31.00
Apr-84 30.00
May-84 31.00
Jun-84 30.00
Jul-84 31.00
Aug-84 31.00
Sep-84 30.00
Oct-84 31.00
Nov-84 30.00
Dec-84 31.00
Jan-85 31.00
Feb-85 28.00
Mar-85 31.00
Apr-85 30.00
May-85 31.00
Jun-85 30.00
Jul-85 31.00
Aug-85 31.00
Sep-85 30.00
Oct-85 31.00
Nov-85 30.00
Dec-85 31.00
Jan-86 31.00
Feb-86 28.00
Mar-86 31.00
Apr-86 30.00
May-86 31.00
Jun-86 30.00
Jul-86 31.00
Aug-86 31.00
Sep-86 30.00
Oct-86 31.00
Nov-86 30.00
Dec-86 31.00
Jan-87 31.00
Feb-87 28.00
Mar-87 31.00
Apr-87 30.00
May-87 31.00
Jun-87 30.00
Jul-87 31.00
Aug-87 31.00
Sep-87 30.00
Oct-87 31.00
Nov-87 30.00
Dec-87 31.00
Jan-88 31.00
Feb-88 29.00
Mar-88 31.00
Apr-88 30.00
May-88 31.00
Jun-88 30.00
Jul-88 31.00
Aug-88 31.00
Sep-88 30.00
Oct-88 31.00
Nov-88 30.00
Dec-88 31.00
Jan-89 31.00
Feb-89 28.00
Mar-89 31.00
Apr-89 30.00
May-89 31.00
Jun-89 30.00
Jul-89 31.00
Aug-89 31.00
Sep-89 30.00
Oct-89 31.00
Nov-89 30.00
Dec-89 31.00
Jan-90 31.00
Feb-90 28.00
Mar-90 31.00
Apr-90 30.00
May-90 31.00
Jun-90 30.00
Jul-90 31.00
Aug-90 31.00
Sep-90 30.00
Oct-90 31.00
Nov-90 30.00
Dec-90 31.00
Jan-91 31.00
Feb-91 28.00
Mar-91 31.00
Apr-91 30.00
May-91 31.00
Jun-91 30.00
Jul-91 31.00
Aug-91 31.00
Sep-91 30.00
Oct-91 31.00
Nov-91 30.00
Dec-91 31.00
Jan-92 31.00
Feb-92 29.00
Mar-92 31.00
Apr-92 30.00
May-92 31.00
Jun-92 30.00
Jul-92 31.00
Aug-92 31.00
Sep-92 30.00
Oct-92 31.00
Nov-92 30.00
Dec-92 31.00
Jan-93 31.00
Feb-93 28.00
Mar-93 31.00
Apr-93 30.00
May-93 31.00
Jun-93 30.00
Jul-93 31.00
Aug-93 31.00
Sep-93 30.00
Oct-93 31.00
Nov-93 30.00
Dec-93 31.00
Jan-94 31.00
Feb-94 28.00
Mar-94 31.00
Apr-94 30.00
May-94 31.00
Jun-94 30.00
Jul-94 31.00
Aug-94 31.00
Sep-94 30.00
Oct-94 31.00
Nov-94 30.00
Dec-94 31.00
Jan-95 31.00 $500
Feb-95 28.00 5.07 104.99%$523
Mar-95 31.00 5.01 104.92%$546
Apr-95 30.00 5.42 105.33%$573
May-95 31.00 2.18 102.09%$583
Jun-95 30.00 6.56 106.47%$618
Jul-95 31.00 7.85 107.76%$663
Aug-95 31.00 1.26 101.17%$668
Sep-95 30.00 2.20 102.12%$680
Oct-95 31.00 -2.08 97.84%$662
Nov-95 30.00 1.83 101.75%$671
Dec-95 31.00 0.44 100.35%$671
Jan-96 31.00 0.73 100.64%$672
Feb-96 29.00 0.36 100.28%$672
Mar-96 31.00 3.26 103.17%$690
Apr-96 30.00 3.30 103.21%$709
May-96 31.00 1.15 101.06%$714
Jun-96 30.00 -0.81 99.11%$705
Jul-96 31.00 -4.67 95.25%$668
Aug-96 31.00 3.83 103.74%$691
Sep-96 30.00 4.24 104.15%$716
Oct-96 31.00 3.08 102.99%$735
Nov-96 30.00 5.98 105.89%$775
Dec-96 31.00 -0.60 99.32%$766
Listed in Order Max 775
to match MFPR Min 500
GROWTH OPPORTUNITIES PORTFOLIO of Variable Insurance Products
Fund III seeks capital growth by investing in a wide range of common
domestic and foreign stocks, and securities convertible into common stocks.
Although the fund invests primarily in common stock, it has the ability to
purchase securities, such as preferred stock and bonds that may produce
capital growth. The value of the fund's investments and, as applicable, the
income they generate will vary from day to day, and generally reflect
changes in market conditions, interest rates, and other company, political,
or economic news. In the short-term, stock prices can fluctuate
dramatically in response to these factors. The graph below is based on a 5%
Benchmark Rate of Return and initial monthly annuity income of $500.
PROSPECTUS CHARTS
M&E 0.01
BRR 0.05
Month # of Growth Opportunities
Apr-82
May-82 31.00
Jun-82 30.00
Jul-82 31.00
Aug-82 31.00
Sep-82 30.00
Oct-82 31.00
Nov-82 30.00
Dec-82 31.00
Jan-83 31.00
Feb-83 28.00
Mar-83 31.00
Apr-83 30.00
May-83 31.00
Jun-83 30.00
Jul-83 31.00
Aug-83 31.00
Sep-83 30.00
Oct-83 31.00
Nov-83 30.00
Dec-83 31.00
Jan-84 31.00
Feb-84 29.00
Mar-84 31.00
Apr-84 30.00
May-84 31.00
Jun-84 30.00
Jul-84 31.00
Aug-84 31.00
Sep-84 30.00
Oct-84 31.00
Nov-84 30.00
Dec-84 31.00
Jan-85 31.00
Feb-85 28.00
Mar-85 31.00
Apr-85 30.00
May-85 31.00
Jun-85 30.00
Jul-85 31.00
Aug-85 31.00
Sep-85 30.00
Oct-85 31.00
Nov-85 30.00
Dec-85 31.00
Jan-86 31.00
Feb-86 28.00
Mar-86 31.00
Apr-86 30.00
May-86 31.00
Jun-86 30.00
Jul-86 31.00
Aug-86 31.00
Sep-86 30.00
Oct-86 31.00
Nov-86 30.00
Dec-86 31.00
Jan-87 31.00
Feb-87 28.00
Mar-87 31.00
Apr-87 30.00
May-87 31.00
Jun-87 30.00
Jul-87 31.00
Aug-87 31.00
Sep-87 30.00
Oct-87 31.00
Nov-87 30.00
Dec-87 31.00
Jan-88 31.00
Feb-88 29.00
Mar-88 31.00
Apr-88 30.00
May-88 31.00
Jun-88 30.00
Jul-88 31.00
Aug-88 31.00
Sep-88 30.00
Oct-88 31.00
Nov-88 30.00
Dec-88 31.00
Jan-89 31.00
Feb-89 28.00
Mar-89 31.00
Apr-89 30.00
May-89 31.00
Jun-89 30.00
Jul-89 31.00
Aug-89 31.00
Sep-89 30.00
Oct-89 31.00
Nov-89 30.00
Dec-89 31.00
Jan-90 31.00
Feb-90 28.00
Mar-90 31.00
Apr-90 30.00
May-90 31.00
Jun-90 30.00
Jul-90 31.00
Aug-90 31.00
Sep-90 30.00
Oct-90 31.00
Nov-90 30.00
Dec-90 31.00
Jan-91 31.00
Feb-91 28.00
Mar-91 31.00
Apr-91 30.00
May-91 31.00
Jun-91 30.00
Jul-91 31.00
Aug-91 31.00
Sep-91 30.00
Oct-91 31.00
Nov-91 30.00
Dec-91 31.00
Jan-92 31.00
Feb-92 29.00
Mar-92 31.00
Apr-92 30.00
May-92 31.00
Jun-92 30.00
Jul-92 31.00
Aug-92 31.00
Sep-92 30.00
Oct-92 31.00
Nov-92 30.00
Dec-92 31.00
Jan-93 31.00
Feb-93 28.00
Mar-93 31.00
Apr-93 30.00
May-93 31.00
Jun-93 30.00
Jul-93 31.00
Aug-93 31.00
Sep-93 30.00
Oct-93 31.00
Nov-93 30.00
Dec-93 31.00
Jan-94 31.00
Feb-94 28.00
Mar-94 31.00
Apr-94 30.00
May-94 31.00
Jun-94 30.00
Jul-94 31.00
Aug-94 31.00
Sep-94 30.00
Oct-94 31.00
Nov-94 30.00
Dec-94 31.00
Jan-95 31.00 $500
Feb-95 28.00 3.08 103.00% $513
Mar-95 31.00 1.83 101.74% $520
Apr-95 30.00 3.50 103.41% $535
May-95 31.00 4.67 104.58% $558
Jun-95 30.00 3.06 102.97% $572
Jul-95 31.00 3.31 103.22% $588
Aug-95 31.00 0.66 100.57% $589
Sep-95 30.00 1.71 101.63% $596
Oct-95 31.00 0.72 100.63% $597
Nov-95 30.00 2.87 102.79% $612
Dec-95 31.00 2.57 102.48% $624
Jan-96 31.00 1.45 101.36% $630
Feb-96 29.00 -0.07 99.85% $627
Mar-96 31.00 -0.30 99.61% $622
Apr-96 30.00 1.60 101.52% $629
May-96 31.00 2.24 102.15% $639
Jun-96 30.00 0.80 100.72% $641
Jul-96 31.00 -2.90 97.02% $620
Aug-96 31.00 0.60 100.51% $620
Sep-96 30.00 4.83 104.74% $647
Oct-96 31.00 4.11 104.02% $670
Nov-96 30.00 7.56 107.47% $718
Dec-96 31.00 -2.53 97.39% $696
Listed in Order Max 718
to match MFPR Min 500
BALANCED PORTFOLIO of Variable Insurance Products Fund III seeks
both income and growth of capital by investing in a broad selection of
stocks, bonds, and convertible securities. When FMR's outlook is neutral,
it will invest approximately 60% of the fund's assets in equity securities
and will always invest at least 25% of the fund's assets in fixed income
securities. The value of the fund's investments and, as applicable, the
income they generate will vary from day to day, and generally reflect
changes in market conditions, interest rates, and other company, political,
or economic news. In the short-term, stock prices can fluctuate
dramatically in response to these factors. The graph below is based on a 5%
bench mark rate of Pentin and initial monthly annuity income of $500.
PROSPECTUS CHARTS
M&E 0.01
BRR 0.05
Month # of Balanced
Apr-82
May-82 31.00
Jun-82 30.00
Jul-82 31.00
Aug-82 31.00
Sep-82 30.00
Oct-82 31.00
Nov-82 30.00
Dec-82 31.00
Jan-83 31.00
Feb-83 28.00
Mar-83 31.00
Apr-83 30.00
May-83 31.00
Jun-83 30.00
Jul-83 31.00
Aug-83 31.00
Sep-83 30.00
Oct-83 31.00
Nov-83 30.00
Dec-83 31.00
Jan-84 31.00
Feb-84 29.00
Mar-84 31.00
Apr-84 30.00
May-84 31.00
Jun-84 30.00
Jul-84 31.00
Aug-84 31.00
Sep-84 30.00
Oct-84 31.00
Nov-84 30.00
Dec-84 31.00
Jan-85 31.00
Feb-85 28.00
Mar-85 31.00
Apr-85 30.00
May-85 31.00
Jun-85 30.00
Jul-85 31.00
Aug-85 31.00
Sep-85 30.00
Oct-85 31.00
Nov-85 30.00
Dec-85 31.00
Jan-86 31.00
Feb-86 28.00
Mar-86 31.00
Apr-86 30.00
May-86 31.00
Jun-86 30.00
Jul-86 31.00
Aug-86 31.00
Sep-86 30.00
Oct-86 31.00
Nov-86 30.00
Dec-86 31.00
Jan-87 31.00
Feb-87 28.00
Mar-87 31.00
Apr-87 30.00
May-87 31.00
Jun-87 30.00
Jul-87 31.00
Aug-87 31.00
Sep-87 30.00
Oct-87 31.00
Nov-87 30.00
Dec-87 31.00
Jan-88 31.00
Feb-88 29.00
Mar-88 31.00
Apr-88 30.00
May-88 31.00
Jun-88 30.00
Jul-88 31.00
Aug-88 31.00
Sep-88 30.00
Oct-88 31.00
Nov-88 30.00
Dec-88 31.00
Jan-89 31.00
Feb-89 28.00
Mar-89 31.00
Apr-89 30.00
May-89 31.00
Jun-89 30.00
Jul-89 31.00
Aug-89 31.00
Sep-89 30.00
Oct-89 31.00
Nov-89 30.00
Dec-89 31.00
Jan-90 31.00
Feb-90 28.00
Mar-90 31.00
Apr-90 30.00
May-90 31.00
Jun-90 30.00
Jul-90 31.00
Aug-90 31.00
Sep-90 30.00
Oct-90 31.00
Nov-90 30.00
Dec-90 31.00
Jan-91 31.00
Feb-91 28.00
Mar-91 31.00
Apr-91 30.00
May-91 31.00
Jun-91 30.00
Jul-91 31.00
Aug-91 31.00
Sep-91 30.00
Oct-91 31.00
Nov-91 30.00
Dec-91 31.00
Jan-92 31.00
Feb-92 29.00
Mar-92 31.00
Apr-92 30.00
May-92 31.00
Jun-92 30.00
Jul-92 31.00
Aug-92 31.00
Sep-92 30.00
Oct-92 31.00
Nov-92 30.00
Dec-92 31.00
Jan-93 31.00
Feb-93 28.00
Mar-93 31.00
Apr-93 30.00
May-93 31.00
Jun-93 30.00
Jul-93 31.00
Aug-93 31.00
Sep-93 30.00
Oct-93 31.00
Nov-93 30.00
Dec-93 31.00
Jan-94 31.00
Feb-94 28.00
Mar-94 31.00
Apr-94 30.00
May-94 31.00
Jun-94 30.00
Jul-94 31.00
Aug-94 31.00
Sep-94 30.00
Oct-94 31.00
Nov-94 30.00
Dec-94 31.00
Jan-95 31.00 $500
Feb-95 28.00 2.00 101.92% $508
Mar-95 31.00 0.69 100.60% $509
Apr-95 30.00 1.27 101.19% $513
May-95 31.00 2.12 102.03% $521
Jun-95 30.00 1.23 101.15% $525
Jul-95 31.00 1.30 101.21% $529
Aug-95 31.00 0.37 100.28% $528
Sep-95 30.00 0.92 100.84% $531
Oct-95 31.00 -1.18 98.74% $522
Nov-95 30.00 2.94 102.86% $534
Dec-95 31.00 1.62 101.53% $540
Jan-96 31.00 0.72 100.63% $542
Feb-96 29.00 -1.34 98.58% $532
Mar-96 31.00 -0.81 99.11% $525
Apr-96 30.00 0.27 100.19% $524
May-96 31.00 1.09 101.00% $527
Jun-96 30.00 0.63 100.55% $528
Jul-96 31.00 -1.97 97.95% $515
Aug-96 31.00 0.64 100.55% $515
Sep-96 30.00 4.26 104.17% $535
Oct-96 31.00 2.70 102.61% $546
Nov-96 30.00 5.25 105.16% $572
Dec-96 31.00 -1.61 98.31% $560
Listed in Order Max 572
to match MFPR Min 500
GROWTH & INCOME PORTFOLIO of Variable Insurance Products Fund III seeks
High total return through a combination of current income and capital
appreciation by investing mainly in equity securities. The fund may also
invest in equity securities that are not paying dividends, but offer the
potential for capital appreciation of future income. The fund may be
appropriate for investors who are willing to ride out stock market
fluctuations in pursuit of potentially high long-term returns. The fund is
designed for those who seek a combination of growth and income from equity
and some bond investment.
FMR is the investment adviser for the Funds. FMR is a registered investment
adviser under the Investment Advisers Act of 1940. FMR is the original
Fidelity company and was founded in 1946. It provides a number of mutual
funds and other clients with investment research and portfolio management
services. It maintains a large staff of experienced investment personnel
and a full complement of related support facilities. As of December 31,
199 6 , it advised funds having more than 29 million
shareholder accounts with a total value of more than $ 432 billion.
FMR charges the Portfolios an investment management fee. These fees are
part of the Portfolios' operating expenses. See the attached prospectuses
for the Funds for discussions of the Funds' expenses.
You will find more complete information about the Funds, including the
risks associated with each Portfolio, in the accompanying prospectuses. You
should read them in conjunction with this prospectus.
FACTS ABOUT THE CONTRACT
PURCHASE OF A CONTRACT
EFILI offers the Contracts only in states in which it has obtained
approval. Three types of Contracts are available. You can purchase a
Non-qualified Contract using money from any source. Qualified Contracts may
be purchased with money rolled over from a qualified retirement plan, such
as a 401(k) plan, 403(b) plan or IRA. You may also arrange with your
employer to purchase a Tax-Sheltered Annuity Contract with money in a
tax-sheltered annuity under section 403(b) of the Code.
The minimum Purchase Payment for a Contract is generally $25,000. You may
purchase a Qualified Contract only with a "rollover" (including a direct
trustee-to-trustee transfer, where permitted) of funds from another
qualified plan, tax-sheltered annuity or IRA.
You must be the Annuitant and the Owner of the Contract. If in addition to
you, another person is named as an Owner, that person must be the Joint
Annuitant. However, if you purchase the Contract as a Qualified Contract
(IRA) or a Tax-Sheltered Annuity Contract, you must be the sole Owner of
the Contract.
For all Contracts, either you or the Joint Annuitant must generally be no
more than 85 years old. When EFILI receives your properly completed
application, your payment is applied to the purchase of a Contract within
two business days after receipt at the Annuity Service Center. Your
application will be considered properly completed as soon as (1) you have
provided all the information requested on the application form, including
your choice of annuity income option ( 2) we have received adequate
proof of your date of birth (and the date of birth of the Joint Annuitant,
if any), and (3) the entire amount of your Purchase Payment has been
received.
The date EFILI credits the payment and issues your Contract is called the
Contract Date. If your application is incomplete, EFILI will request the
information necessary to complete the application. If you do not furnish
the information within five days of the time EFILI receives your
application, EFILI will return your payment unless it obtains your specific
permission to keep it until you complete the application.
FREE LOOK PRIVILEGE
You may return a Contract for a refund within 30 days after you receive it
(the "free look period"). If you choose to cancel the Contract, return it
to the Annuity Service Center with a written request within the free look
period. For most Contracts, we assume that you receive your Contract five
days after the Contract Date. For Contracts with large Purchase Payments,
we may use the actual date you receive the Contract. If you return a
Contract more than ten days after you receive it, EFILI will promptly
refund your Purchase Payment adjusted for investment performance. If you
return a Contract during the first ten days after you receive it, EFILI
will promptly refund the greater of (1) your Purchase Payment in full,
neither crediting your Contract for earnings nor charging it with any
administrative expenses, and (2) your Purchase Payment plus the investment
performance of the Money Market Investment Option. EFILI will also make an
adjustment for the amount of any annuity income it paid before it received
the Contract. ONCE THE FREE LOOK PERIOD EXPIRES, THE CONTRACT MAY NOT BE
RETURNED FOR A REFUND.
INVESTMENT ALLOCATION OF YOUR PURCHASE PAYMENT
The portion of your Purchase Payment you allocate to the Investment Options
will be invested in the Money Market Investment Option for the Money Market
Period. At the end of the Valuation Period in which the Money Market Period
ends any amount then in the Money Market Investment Option (the "Free Look
Units") will be exchanged for Annuity Income Units in the percentages you
have chosen. You allocate percentages that are whole numbers, not
fractions. Immediately following the reallocations, the total dollar value
of the Annuity Income Units will be the same as the Free Look Units that
were exchanged.
At least 10% of the variable portion of your Purchase Payment must be
allocated to each Investment Option you select.
You may currently transfer amounts among Investment Options as often as you
wish without charge. However, excessive trading activity can disrupt
Portfolio management strategy and increase Portfolio expenses, which are
borne by everyone participating in the Portfolio regardless of their
transfer activity. Therefore, EFILI reserves the right to limit the number
of transfers permitted, but not to fewer than six per calendar year. You
tell us the percentage you want for your new allocation in each Investment
Option. Your allocation percentages will be in whole numbers, not
fractions.
You may change the allocations among the Investment Options by writing or
telephoning the Annuity Service Center. We will provide you with a Personal
Identification Number for making telephone reallocations. EFILI and the
Funds reserve the right to change telephone reallocation provisions, or to
eliminate them, and to limit or reject any telephone reallocation at any
time. You may make up to eighteen telephone reallocations per calendar
year. Empire Fidelity Invesments Life will not accept exchange requests via
fax.
EFILI will not be responsible for any losses resulting from unauthorized
telephone reallocations if it follows reasonable procedures designed to
verify the identity of the caller. EFILI will request your Personal
Identification Number and may also record calls. You should verify the
accuracy of your confirmation statements immediately after you receive
them.
In some cases, contracts may be sold to individuals who independently
utilize the services of a firm or individual engaged in market timing.
Generally, market timing services obtain authorization from Contract
Owner(s) to make transfers and exchanges among the sub-accounts on the
basis of perceived market trends. Because the large transfers of assets
associated with market timing services may disrupt the management of the
portfolios of the Funds, such transactions may become a detriment to
Contract Owners not utilizing the market timing service.
The right to exchange contract values among sub-accounts may be subject to
modification if such rights are executed by a market timing firm or similar
third party authorized to initiate transfers or exchange transactions on
behalf of a Contract Owner(s). In modifying such rights, the Company may,
among other things, decline to accept (1) the transfer or exchange
instructions of any agent acting under a power of attorney on behalf of
more than one Contract Owner, or (2) the transfer or exchange instructions
of individual Contract Owners who have executed pre-authorized transfer or
exchange forms which are submitted by market timing firms or other third
parties on behalf of more than one Contract Owner at the same time. The
Company will impose such restrictions only if it believes that doing so
will prevent harm to other Contract Owners.
When you reallocate among Investment Options, EFILI will redeem shares of
the appropriate Portfolios at their prices as of the end of the current
Valuation Period. Generally any Investment Option you transfer to is
credited at the same time. However, we may wait to credit the amount to a
new Investment Option until an Investment Option you transfer from becomes
liquid. This will happen only if (1) the Investment Option you transfer to
invests in a Portfolio that accrues dividends on a daily basis and requires
Federal funds before accepting a purchase order, and (2) the
Investment Option you transfer from is investing in an equity Portfolio in
an illiquid position due to substantial redemptions or transfers that
require it to sell Portfolio securities in order to make funds available.
The Investment Option you transfer from will be liquid when it receives
proceeds from sales of Portfolio securities, the purchase of new Contracts,
or otherwise. During any period that we wait to credit an Investment Option
for this reason, the amount you transfer will be uninvested. After seven
days the transfer will be made even if the Investment Option you transfer
from is not liquid.
The amount of the allocation in each Investment Option will change with its
investment performance. You should periodically review the allocations in
light of market conditions and financial objectives.
CHARGES
The following are all the charges made under the Contract.
1. PREMIUM TAXES. Some states charge a "premium tax" based on the amount of
your Purchase Payment. State premium taxes range from 0% to 3.5%. In
addition, some counties, cities or towns may charge additional premium
taxes. If you reside in a place where premium taxes apply, any amount
needed to provide for the applicable premium taxes is deducted from your
Purchase Payment. The remainder of your Purchase Payment will be allocated
to the Investment Options and/or applied to the purchase of fixed annuity
income.
2. ADMINISTRATIVE CHARGES. Administrative charges compensate EFILI for the
expenses incurred in administering the Contracts. These expenses include
the cost of issuing the Contract, making electronic funds transfers to your
bank account or issuing checks, maintaining necessary systems and records,
and providing reports. These expenses are covered by a daily administrative
charge.
Each day, a deduction is made from the assets of the Investment Options at
an effective annual rate of 0.25%. We guarantee this charge will never
increase. This charge does not affect the amount of fixed annuity income.
3. MORTALITY AND EXPENSE RISK CHARGE. A daily asset charge is deducted for
our assumption of mortality and expense risks. Each day an amount is
deducted from the assets of each Investment Option at an effective annual
rate of 0.75%. Of this charge, it is estimated that 0.50% is for assuming
mortality risks and it is estimated that 0.25% is for assuming expense
risks. We guarantee this charge will never increase.
The mortality risk is our obligation to provide annuity income for your
life (and the life of the Joint Annuitant, if any) no matter how long that
might be. The expense risk is our obligation to cover the cost of issuing
and administering the Contracts, no matter how large that cost may be.
EFILI will realize a gain from the charge for these risks to the extent
that it is not needed to provide for benefits and expenses under the
Contracts. This charge does not affect the amount of fixed annuity income.
4. EXPENSES OF THE FUNDS. The Funds are charged management fees and incur
operating expenses. The effect of these fees and expenses is reflected in
the performance of the Investment Options. See the attached prospectuses
for the Funds for a description of the Funds' fees and expenses.
5. OTHER TAXES. EFILI reserves the right to charge for certain taxes (other
than premium taxes) that it may have to fund. Currently, no such charges
are being made. See EFILI'S TAX STATUS on page .
ANNUITY INCOME DATES
We provide annuity income for each Annuity Income Date. You select the
first Annuity Income Date when you purchase the Contract. The first Annuity
Income Date may be either the first or the fifteenth day of a month. All
subsequent Annuity Income Dates will be on the same day of the month as the
first Annuity Income Date. The first Annuity Income Date may be up to one
year after the Contract Date. The first Annuity Income Date generally may
not be earlier than 30 days after the Contract Date.
On the application, you choose the frequency of annuity income. You can
choose monthly, quarterly, semi-annual or annual annuity income.
SIGNATURE GUARANTEE
A signature guarantee is designed to protect you and Empire Fidelity
Investments Life from fraud. Certain free look requests must include a
signature guarantee if any of the following situations apply:
1. The requested amount is more than $25,000.
2. In other circumstances where we deem it necessary for the protection of
you, the customer (e.g. the signature does not resemble the signature we
have on file).
You should be able to obtain a signature guarantee from a bank, broker
dealer ( including Fidelity Investor Centers), credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot provide a
signature guarantee.
DEATH BENEFIT
If no Annuitant or Joint Annuitant is alive on the first Annuity Income
Date, the Contract will be canceled and we will make a refund equal to your
Purchase Payment to your Beneficiary or Beneficiaries.
If your contract is a joint and survivor annuity and either you or the
Joint Annuitant die before the first Annuity Income Date we will adjust the
annuity income so that it equals what would have been paid under a single
life annuity issued to the survivor. This will usually result in greater
annuity income.
FIXED, VARIABLE OR COMBINATION ANNUITY INCOME
At the time of purchase, you allocate your Purchase Payment between fixed
and variable annuity income. You may choose all fixed annuity income, all
variable annuity income, or a combination of the two. Any portion of your
Purchase Payment allocated to fixed annuity income will always remain
allocated to fixed annuity income. Similarly, any portion of your Purchase
Payment allocated to variable annuity income will always remain allocated
to variable annuity income. You can reallocate the variable portion of your
Contract among the various Investment Options. However, the variable
portion of a Contract must remain in the Money Market Investment Option for
the Money Market Period.
If you allocate all of your Purchase Payment to fixed annuity income, EFILI
will guarantee a specific amount of fixed annuity income that will be the
same on each Annuity Income Date, except as described for Options 3 and 4
under TYPES OF ANNUITY INCOME OPTIONS on page .
If you choose a combination of fixed and variable annuity income, a portion
of your annuity income will be fixed and a portion will vary according to
the investment experience of the Investment Options. We will guarantee the
dollar amount of the fixed annuity income portion on each Annuity Income
Date. Both fixed and variable annuity income decrease upon the death of the
Annuitant or Joint Annuitant as described for Options 3 and 4 under TYPES
OF ANNUITY INCOME OPTIONS on page .
If you choose all variable annuity income, all of your annuity income will
vary according to the investment experience of the Investment Options.
Variable annuity income may decrease upon the death of the Annuitant or
Joint Annuitant, as described for Options 3 and 4 under TYPES OF ANNUITY
INCOME OPTIONS on page .
Any portion of your Purchase Payment allocated to variable annuity income
will initially purchase Free Look Units. EFILI will determine the number of
Free Look Units based upon (a) your age and sex (and the age and sex of the
Joint Annuitant, if any); (b) the type of annuity income option you choose;
(c) the frequency of Annuity Income Dates you choose; (d) the first Annuity
Income Date you choose; (e) the Benchmark Rate of Return you choose; and
(f) the value of the Free Look Units on the Contract Date. The value of the
Free Look Units reflects the investment performance of the Money Market
Investment Option. On the date the Money Market Period ends, EFILI will
exchange Free Look Units for Annuity Income Units in the Investment Options
you select. The total dollar value of the Annuity Income Units will be the
same as the Free Look Units that were exchanged.
The number of Annuity Income Units allocated to each Investment Option
under a single life Contract will not change unless you reallocate among
the Investment Options. If you choose a joint life Contract and benefits
are reduced due to your death or the death of the Joint Annuitant, the
number of Annuity Units will be reduced at that time.
EFILI calculates the amount of your variable annuity income based on the
number of Annuity Income Units credited to each Investment Option. At the
close of business on each Annuity Income Date (or on the next Valuation
Date if the Annuity Income Date falls on a non-business day), the number of
Annuity Income Units is multiplied by the value of the Annuity Income Units
for each Investment Option. The amount of variable annuity income on the
Annuity Income Date will be the sum of annuity income amounts for each
Investment Option.
BENCHMARK RATE OF RETURN
When you purchase a Contract, EFILI calculates an estimated first annuity
income amount, assuming that the Investment Options will earn the Benchmark
Rate of Return you choose. If the annualized investment return of the
Investment Options is greater than the Benchmark Rate of Return between the
Contract Date and the first Annuity Income Date, the first annuity income
amount will be higher than the estimate. If it is less, the first annuity
income amount will be lower than the estimate.
Income will increase from one Annuity Income Date to the next if the
annualized Net Rate of Return during that time is greater than the
Benchmark Rate of Return you choose, and will decrease if the annualized
Net Rate of Return is less than the Benchmark Rate of Return. Choosing a
5.0% Benchmark Rate of Return instead of a 3.5% Benchmark Rate of Return
will result in a higher initial amount of income, but income will increase
more slowly during periods of good investment performance and decrease more
rapidly during periods of poor investment performance.
The following graph illustrates the effect that your choice of a Benchmark
Rate of Return would have on your annuity income for a hypothetical
Contract. The graph assumes the following: (a) a Purchase Payment of
$100,000; (b) annuity income is entirely variable; (c) the Contract is a
single life Contract providing annuity income for ten years or the rest of
your life, whichever is longer; (d) you are a 65 year old male; and (f) the
selected Portfolios earn a constant 10% gross investment return before fees
and expenses (equal to an 8.1 8 % Net Rate of Return after fees and
expenses). Monthly income amounts are shown for two Benchmark Rates of
Return: 3.5% and 5.0% annually. Notice that with the lower Benchmark Rate
of Return your monthly income starts at a lower level but increases more
rapidly. With the higher Benchmark Rate of Return monthly income starts at
a higher level but increases less rapidly.
Year 3.50% 5.00%
1 $574.87 $660.97
2 $601 $681
3 $628 $702
4 $656 $723
5 $686 $745
6 $717 $767
7 $750 $791
8 $784 $815
9 $819 $839
10 $856 $865
11 $895 $891
12 $935 $918
13 $977 $946
14 $1,022 $974
15 $1,068 $1,004
16 $1,116 $1,034
17 $1,167 $1,066
18 $1,219 $1,098
19 $1,275 $1,131
20 $1,332 $1,165
21 $1,393 $1,201
22 $1,455 $1,237
23 $1,521 $1,275
24 $1,590 $1,313
25 $1,662 $1,353
TYPES OF ANNUITY INCOME OPTIONS
At the time of purchase, you have a choice among a number of annuity income
options. You also choose whether you want a minimum guaranteed number of
years of annuity income. For any income option, you may choose to receive
annuity income monthly, quarterly, semi-annually or annually. Once you make
these choices, they cannot be changed. The options EFILI currently offers
are described below. Other annuity income options may be made available.
The Federal income tax laws may limit your annuity income options
where the Contract is used as a Qualified Contract or a Tax-Sheltered
Annuity Contract.
1. SINGLE LIFE ANNUITY. We will provide annuity income for your entire
life, no matter how long that may be. Annuity income stops when you are no
longer living. It is possible that your total annuity income under this
option will be less than your Purchase Payment. It is even possible that
you might receive annuity income only once under this option. This would
happen if you were to die before the second Annuity Income Date. Because of
this risk, this option offers you the highest level of annuity income. The
Contract, like many annuities, pools the mortality experience of all
Annuitants and Joint Annuitants. In effect, Annuitants and Joint Annuitants
who live longer are subsidized by those who do not.
2. JOINT AND SURVIVOR ANNUITY WITH FULL ANNUITY INCOME TO THE SURVIVOR.
Under this option, we will provide annuity income jointly to you and the
Joint Annuitant while you are both living, except that for a Qualified
Contract or Tax-Sheltered Annuity Contract during your lifetime we provide
the income only to you. After the death of either of you, we will continue
to provide the full amount of annuity income to the survivor. Annuity
income stops when both you and the Joint Annuitant are no longer living. As
in the case of the single life annuity described above, there is the risk
that you may receive annuity income only once.
3. JOINT AND SURVIVOR ANNUITY WITH REDUCED ANNUITY INCOME TO THE SURVIVOR.
This option is like Option 2 above, except that annuity income is higher
while both you and the Joint Annuitant are living, and lower when only one
of you is still living. You indicate on your application whether annuity
income to the survivor is reduced to two-thirds, or one-half, of the amount
that it would have been were you both still alive.
4. JOINT AND SURVIVOR ANNUITY WITH FULL ANNUITY INCOME TO THE ANNUITANT IF
THE JOINT ANNUITANT DIES, BUT REDUCED ANNUITY INCOME TO THE JOINT ANNUITANT
IF THE ANNUITANT DIES. This option is like Option 3 above, but annuity
income is not reduced upon the death of the Joint Annuitant if the Joint
Annuitant is the first to die. In case you are the first to die, you
indicate on your application whether annuity income to the Joint Annuitant
is reduced to two-thirds, or one-half, of the amount that it would have
been were you both still alive. While you and the Joint Annuitant are both
still alive, this option provides greater annuity income than Option 2 but
not as much annuity income as Option 3.
For Options 2, 3 and 4, if either you or the Joint Annuitant die before the
first Annuity Income Date, we will adjust the annuity income so that it
equals what would have been paid under a single life annuity issued to the
survivor. This will generally result in greater annuity income.
GUARANTEE PERIOD
On your application, you may choose a guaranteed number of years of annuity
income beginning with the first Annuity Income Date. You may choose a
number of years from five (5) to thirty (30). You may do this for any
annuity income option. If neither you nor the Joint Annuitant lives to the
end of the guarantee period, any remaining annuity income will go to your
Beneficiary or Beneficiaries. For Options 3 and 4 above, if you and the
Joint Annuitant die at the same time, the annuity income due to any
Beneficiary will be the same as if you died before the Joint Annuitant. If
you choose to have a guarantee period, the amount of annuity income on each
Annuity Income Date will be lower than if you had not chosen the guarantee.
If (a) you choose Option 2, 3 or 4 with a guarantee period ( b) an
Owner dies before the first Annuity Income Date, and (c) the survivor
(whether it is you or the Joint Annuitant) is not the deceased Owner's
spouse, we will adjust the guarantee period, as required by the
Federal income tax laws, so that it is not longer than the life
expectancy of the survivor. This may result in a shorter guarantee period
and a generally higher amount of annuity income.
If a Beneficiary is entitled to annuity income, the Beneficiary may choose
(a) to continue receiving annuity income on each remaining Annuity Income
Date, or (b) to receive a lump sum instead. The Beneficiary must notify us
within 60 days of the date we receive notice of the relevant death to elect
a lump sum. Otherwise, the Beneficiary will receive annuity income for the
remaining guaranteed Annuity Income Dates.
A lump sum will become due under a Contract if there are guaranteed Annuity
Income Dates remaining and either: (a) a Beneficiary elects a lump sum on
the death of the last survivor of you and the Joint Annuitant (if any); (b)
a Beneficiary receiving guaranteed annuity income dies, or (c) the last
survivor of you and the Joint Annuitant ( if any), dies and the
Beneficiary is no longer living. For (b) the lump sum will be paid to the
Beneficiary's estate. For (c) it will go to the estate of the last to die
of you and the Joint Annuitant (if any).
The fixed annuity income portion of any lump sum will be the present value
of the annuity income for the remaining guaranteed Annuity Income Dates,
discounted at a rate equal to the rate used to determine annuity income
payments.
The variable annuity income portion will be the present value of the
annuity income for the remaining guaranteed Annuity Income Dates, based on
interest compounded annually at the Benchmark Rate of Return that EFILI
used in determining the annuity income on the first Annuity Income Date.
If EFILI believes that the first annuity income amount due to any
Beneficiary will be less than $50, EFILI may instead provide a lump sum for
the value of all remaining annuity income. The amount of the lump sum will
be determined on the same basis as described above for other lump sums.
REPORTS
If part or all of your Purchase Payment is allocated to variable income, we
will send you a statement showing the number of Annuity Income Units in
each variable Investment Option, and the value of each Annuity Income Unit,
at least once each calendar quarter, and each time you transfer Annuity
Income Units among the Investment Options.
We will also send you semiannual reports containing financial statements
for the Funds, and a list of portfolio securities of the Funds, as required
by the Investment Company Act of 1940.
MORE ABOUT THE CONTRACT
TAX CONSIDERATIONS
TREATMENT OF DISTRIBUTIONS
TAXATION OF DISTRIBUTIONS. The portion of an annuity income distribution
that is includible in ordinary income may vary depending on the annuity
income option selected under the Contract, but generally is the excess of
the distribution over the "exclusion amount ". In the case of a
variable annuity income distribution, the exclusion amount is generally the
"investment in the contract" allocated to the variable annuity income,
adjusted for any guaranteed period, divided by the expected number of
periodic annuity income distributions (determined under Treasury Department
regulations). In the case of fixed annuity income distributions, the
exclusion amount is generally the amount determined by multiplying the
distribution by the ratio (determined under Treasury Department
regulations) of (1) the investment in the contract allocated to the fixed
annuity income, adjusted for any guaranteed period, to (2) the "expected
return" under the fixed annuity income distributions. For Qualified
Contracts and Tax-Sheltered Annuity Contracts, the investment in the
contract is generally zero. When the investment in the contract is zero,
annuity income distributions are fully taxable as ordinary income.
After the dollar amount of the investment in the contract is deemed to be
recovered, the entire amount of each annuity income distribution will be
fully includible in income. On the other hand, should the annuity income
distributions cease before the adjusted investment in the contract is fully
recovered, the person receiving those distributions at the time of their
death will be allowed a deduction for the unrecovered amount of the
adjusted investment in the contract. Where a guaranteed period of annuity
income distributions is selected and no Annuitant or Joint Annuitant lives
to the end of that period, the annuity income distributions made to the
Beneficiary for the remainder of that period are includible in income as
follows: (1) if received in a lump sum, they are included in income to the
extent that they exceed the unrecovered investment in the contract at the
time; or (2) if distributed as annuity income distributions, they are fully
excluded from income until the remaining investment in the contract is
deemed to be recovered, and all annuity income distributions thereafter are
fully includible in income.
PENALTY TAX. Certain distributions under the Contract may be subject to a
penalty tax equal to 10% of the portion of the distribution which is
includible in income. Annuity income distributions under Qualified
Contracts and Tax-Sheltered Annuity Contracts typically will not be subject
to the penalty tax. Also, the penalty tax generally will not be imposed on
distributions under a Non-qualified Contract that are made (1) on or after
the taxpayer attains age 59 1/2; (2) as part of a series of "substantially
equal periodic payments" over the life (or life expectancy) of the taxpayer
or the joint lives (or joint life expectancies) of the taxpayer and his or
her beneficiary; (3) under an "immediate annuity" (as that term is defined
in the tax law); or (4) in certain other situations. In the case of a
Contract held in custody for a minor under the Uniform Gifts to Minors Act
or the Uniform Transfers to Minors Act, a distribution under the Contract
ordinarily is taxable to the minor. Whether the penalty tax applies to such
a distribution ordinarily is determined by the circumstance or
characteristics of the minor, not the custodian. Thus, for example, a
distribution taxable to a minor will not qualify for the exception to the
penalty tax for distributions made on or after age 59 1/2 even if the
custodian is 59 1/2 or older. It is unclear at this time whether
annuity distributions under a Non-qualified Contract prior to the recipient
attaining age 59 1/2 satisfy an exception to the penalty tax.
Accordingly, a prospective purchaser of a Non-qualified Contract who
expects to receive distributions prior to attaining age 59 1/2
should consult a qualified tax advisor regarding the application of the
penalty tax to those distributions.
WITHHOLDING AND REPORTING. EFILI will, as required by law, withhold and
remit to the U.S. Government a part of the taxable portion of each
distribution under the Contract, unless a written election not to have any
amounts withheld is filed prior to the distribution. Also, EFILI will
report all annuity income distributions made while you are alive as being
distributed in full to you, even if you name a Joint Annuitant.
QUALIFIED CONTRACTS AND TAX-SHELTERED ANNUITY CONTRACTS
The Contract may be used as an Individual Retirement Annuity under Section
408(b) of the Internal Revenue Code and as a qualified tax-sheltered
annuity under Section 403(b) of the Code. Section 408(b) of the Code
permits eligible individuals to contribute to an individual retirement
program known as an "Individual Retirement Annuity ". Also, Section
403(b) of the Code permits public school employees and employees of certain
types of charitable, educational and scientific organizations specified in
Section 501(c)(3) of the Code to have their employers purchase
tax-sheltered annuities for them and, subject to certain limitations, to
exclude the amount of purchase payments from gross income for tax purposes.
You should seek competent advice as to the tax consequences associated with
the use of a Contract as a Qualified Contract or Tax-Sheltered Annuity
Contract.
Because the Contract's minimum Purchase Payment is greater than the maximum
annual contribution permitted to an Individual Retirement Annuity or a
tax-sheltered annuity, a Qualified Contract and a Tax-Sheltered Annuity
Contract may be purchased only in connection with a "rollover" (including a
direct trustee-to-trustee transfer, where permitted). Specifically, a
Qualified Contract may be purchased only in connection with a rollover of
amounts from a qualified plan, tax-sheltered annuity, or IRA. Also, a
Tax-Sheltered Annuity Contract may be purchased only in connection with a
rollover of amounts from another tax-sheltered annuity.
If the Contract is used as a Qualified Contract or a Tax-Sheltered Annuity
Contract, you must be the sole Owner of the Contract and the Annuitant. If
you name a Joint Annuitant, all distributions made while you are alive must
be made to you. Also, if you name a Joint Annuitant who is not your spouse,
the annuity income options from which you may select may be limited,
depending on the difference in ages between you and the Joint Annuitant.
Furthermore, if you choose a guaranteed period, the length of the period
may have to be limited in order to satisfy certain minimum distribution
requirements of the Code.
In order to satisfy the requirements in the Code, you generally may not
purchase a Tax-Sheltered Annuity Contract unless you have reached age 59
1/2, separated from service, or become disabled (within the meaning of the
tax law). Certain payments, known as "eligible rollover distributions,"
from a Tax-Sheltered Annuity Contract will be subject to the new direct
rollover and mandatory withholding requirements enacted by Congress in
1992. Generally, distributions from a Tax-Sheltered Annuity Contract will
not constitute eligible rollover distributions. However, if an eligible
rollover distribution is made under a Tax-Sheltered Annuity Contract, you
will receive prior to the distribution a notice (from the plan
administrator or EFILI) explaining generally the new direct rollover and
mandatory withholding requirements and how to avoid the mandatory
withholding thereunder by electing to have the distribution directly
transferred to certain qualified retirement plans.
TAX DEFERRAL UNTIL DISTRIBUTIONS ARE MADE
Under existing provisions of the Code, any increase in the value of the
Contract is generally not taxable until distributions are made under one of
the Contract's annuity income options. However, as discussed below, this
tax deferral generally applies only if (1) the Owner is an individual
( 2) the investments in the Variable Account are adequately diversified
in accordance with Treasury Department regulations ( 3) EFILI, rather
than the Owner, is considered the owner of the assets of the Variable
Account for Federal tax purposes, and (4) certain distribution
requirements are met in the event that you die.
NON-NATURAL OWNER. In certain circumstances, if an Owner were a
"non-natural" person, such as a corporation or a trust, the Contract would
not be treated as an annuity contract for Federal tax purposes, and
the Owner would be taxable currently on the income and gain from the assets
of the Variable Account. Accordingly, the Contract must be owned by an
individual (or individuals), and will not be issued to "non-natural"
persons.
DIVERSIFICATION REQUIREMENTS. For a Contract to be treated as an annuity
contract for Federal income tax purposes, the investments of the
Variable Account must be "adequately diversified ". The Treasury
Department has issued regulations which prescribe standards for determining
whether the investments of the Variable Account are "adequately
diversified ". If the Variable Account failed to comply with these
diversification standards, the Contracts would not be treated as annuity
contracts for Federal income tax purposes, and each Owner would be
taxable currently on the income and gain from the assets of the Variable
Account. Although EFILI does not control the investments of the Funds,
EFILI has entered into agreements with the Funds requiring them to operate
in compliance with the Treasury Department regulations so that the Variable
Account will be considered "adequately diversified ".
OWNERSHIP TREATMENT. In certain circumstances, variable annuity contract
owners may be considered the owners, for Federal income tax
purposes, of the assets of the separate account used to support their
contracts. In those circumstances, income and gains from the separate
account assets would be includible in the contract owners' gross income.
Several years ago, the Internal Revenue Service (the "Service") stated in
published rulings that a variable contract owner will be considered the
owner of separate account assets if the owner possesses incidents of
ownership in those assets, such as the ability to exercise investment
control over the assets. More recently, the Treasury Department announced,
in connection with the issuance of regulations concerning investment
diversification, that those regulations "do not provide guidance concerning
the circumstances in which investor control of the investments of a
segregated asset account may cause the investor, rather than the insurance
company, to be treated as the owner of the assets in the account ".
This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct
their investments to particular sub-accounts [of a separate account]
without being treated as owners of the underlying assets ". As of the
date of this Prospectus, no such guidance has been issued.
The ownership rights under the Contract are similar to, but different in
certain respects from, those described by the Service in rulings in which
it was determined that contract owners were not owners of separate account
assets. For example, the Owner of the Contract has a choice of more
Investment Options to which to allocate the Purchase Payment, and may be
able to transfer among Investment Options more frequently than in such
rulings. These differences could result in the Owner being treated as the
owner of the assets of the Variable Account, and thus income and gain from
such assets would be includible in the Owner's income annually. In
addition, it is not known what standards will be set forth in the
regulations or rulings which the Treasury Department has stated it expects
to issue. The Company therefore reserves the right to modify the Contract
as necessary to attempt to prevent the Owner from being considered the
owner of the assets of the Variable Account.
DISTRIBUTION REQUIREMENTS. To qualify as an annuity for Federal tax
purposes, the Contract must satisfy certain distribution requirements in
the event of your death. The Contract contains the required distribution
provisions. In certain situations, those provisions may limit the
guaranteed period over which annuity income distributions can be made (if
such a period is selected).
This discussion of the Tax Considerations assumes that the Contract will be
treated as an annuity contact for Federal income tax purposes and
that EFILI will be treated as the owner of the Variable Account assets.
EFILI'S TAX STATUS
EFILI is taxed as a life insurance company under Subchapter L of the Code.
Since the operations of the Variable Account are part of, and are taxed
with, the operations of EFILI, the Variable Account is not separately taxed
as a "regulated investment company" under Subchapter M of the Code. Under
existing Federal income tax laws, investment income and capital
gains of the Variable Account are not taxed to the extent they are applied
to increase reserves under a contract. EFILI does not expect to incur
Federal income taxes attributable to the Variable Account. Based on
this, no charge is being made currently to the Variable Account for
Federal income taxes. EFILI will periodically review the need for a
charge to the Variable Account for its Federal income taxes. Such a
charge may be made in future years for any Federal income taxes that
would be attributable to the Contracts.
Under existing laws, EFILI may incur state and local taxes (in addition to
premium taxes) in several states. At present, these taxes (other than
premium taxes) are not significant and are not charged against the
Contracts or the Variable Account. If the amount of these taxes changes
substantially, EFILI may make charges for such taxes against the Variable
Account.
GENERAL TAX CONSIDERATIONS
The above discussion is not exhaustive and is not intended as tax advice.
The Federal income tax consequences associated with the purchase of
an immediate annuity, like the Contract, are complex, and the application
of the pertinent tax rules to a particular person may vary according to
facts specific to that person. A qualified tax advisor should always be
consulted regarding the application of law to individual circumstances. In
particular, if you name a Joint Annuitant who is not your spouse (or if the
Joint Annuitant is your spouse and you and your spouse do not file joint
income tax returns), you should consult a qualified tax advisor as to the
tax consequences of your particular arrangement.
This discussion is based on the Code, Treasury Department regulations, and
interpretations existing on the date of this Prospectus. These authorities,
however, are subject to change by Congress, the Treasury Department, and
judicial decisions.
This discussion does not address Federal estate and gift tax
consequences, or state or local tax consequences, associated with the
purchase of a Contract. In addition, Empire Fidelity Investments Life
Insurance Company makes no guarantee regarding any tax treatment -
Federal , state, or local - of any contract or of any transaction
involving a Contract.
OTHER CONTRACT PROVISIONS
You should also be aware of the following important provisions of your
Contract.
1. OWNER(S). Before a Contract is issued, the Owner(s) have the right to
(a) name the Joint Annuitant ( if any); (b) allocate the Purchase
Payment between fixed and variable annuity income; (c) choose an annuity
income option; (d) allocate the Purchase Payment among the Investment
Options; (e) choose the Benchmark Rate of Return; (f) name the Beneficiary
or Beneficiaries; and (g) select the first Annuity Income Date and how
often you will receive annuity income.
After a Contract is issued, each Owner named in the application has the
following rights: (a) the right to change any Beneficiary; (b) the right to
cancel the Contract during the free look period; (c) any right to
reallocate among the Investment Options; and (d) the right to instruct us
how to vote shares of an investment portfolio attributable to the Contract.
A Joint Annuitant who is not an Owner when a Contract is issued will
succeed to the rights in the paragraph above if he or she survives the
Owner. When no Owner or Joint Annuitant is still alive, each Beneficiary
will have (a) the right to reallocate among the Investment Options, and (b)
the right to instruct us how to vote shares of an investment portfolio
attributable to the Contract, with respect to his or her share of annuity
income.
2. ANNUITANT. You have the right to receive annuity income under the terms
of the Contract. You also have rights as an Owner as described above.
3. JOINT ANNUITANT. For Non-qualified Contracts, the Joint Annuitant
( if any), has the right to receive annuity income jointly with you
under the terms of the Contract. The Joint Annuitant may also be an Owner,
or succeed to the rights of the Owner(s) as described above. For Qualified
Contracts and Tax-Sheltered Annuity Contracts ( a) all annuity income
during your lifetime must be received only by you, and (b) the Joint
Annuitant may not be an Owner.
4. BENEFICIARY. You may name one or more Beneficiaries when you complete
your application. You may change Beneficiaries later, unless you have
designated an irrevocable Beneficiary, in which case we will require the
consent of the irrevocable Beneficiary in writing. The Beneficiary (or
Beneficiaries) will receive (a) annuity income for the remainder of any
guarantee period after the death(s) of the Annuitant (and Joint Annuitant
if any); and (b) a refund of your Purchase Payment if you (and the Joint
Annuitant, if any) do not live to the first Annuity Income Date. Surviving
Beneficiaries will receive equal shares unless you specify otherwise. A
Beneficiary may be a "Primary Beneficiary" or a "Contingent Beneficiary".
No Contingent Beneficiary has the right to proceeds unless all of the
Primary Beneficiaries die before proceeds are determined. If a
Beneficiary receiving annuity income dies, we will provide a lump sum to
his or her estate. See TYPES OF ANNUITY INCOME OPTIONS on page .
5. MISSTATEMENT OF DATE OF BIRTH OR SEX. If the date of birth or sex of you
or the Joint Annuitant has been misstated, EFILI will change the benefits
to those which the proceeds would have purchased had the correct date(s) of
birth and sex(es) been stated.
If the misstatement is not discovered until after the first Annuity Income
Date, EFILI will take the following action: (1) if EFILI provided too much
annuity income, EFILI will add interest at the rate of 6% per year
compounded annually and withhold annuity income on subsequent following
Annuity Income Date(s) until it has recovered the excess; (2) if EFILI
provided too little annuity income, we will make up the balance plus
interest at the rate of 6% per year compounded annually in a lump sum.
6. ASSIGNMENT. The Contract may not be assigned.
7. DIVIDENDS. The Contract is "non-participating ". This means that
there are no dividends. Investment results of the Investment Options are
reflected in benefits.
8. NOTIFICATION OF DEATH. Any Beneficiary claiming an interest in the
Contract must provide us in writing with due proof of your death and the
death of the Joint Annuitant (if any) at the Annuity Service Center. We
will not be responsible for any annuity income paid to you or the Joint
Annuitant (if any) before we receive due proof of death at the Annuity
Service Center.
You and the Joint Annuitant are each responsible for notifying EFILI of the
death of the other. Each Beneficiary is responsible for notifying EFILI of
the death of the last surviving Annuitant or Joint Annuitant. Upon the
death of the last person with the right to receive annuity income under a
Contract, that person's executor is responsible for notifying EFILI. If too
much annuity income is provided because EFILI is not notified of a death,
EFILI may withhold annuity income on subsequent Annuity Income Dates, or
take legal action, until it has recovered any excess amounts.
SELLING THE CONTRACTS
The Contracts are distributed through Fidelity Brokerage Services, Inc. and
Fidelity Insurance Agency, Inc. Each is a subsidiary of FMR Corp., the
parent company of EFILI. Fidelity Brokerage Services, Inc. is the principal
underwriter (distributor) of the Contracts. Fidelity Distributors
Corporation is the distributor of the Fidelity family of funds, including
the Funds. The principal business address of Fidelity Brokerage Services,
Inc. and Fidelity Distributors Corporation is 82 Devonshire Street, Boston,
Massachusetts 02109. Fidelity Insurance Agency, Inc. receives sales
compensation from EFILI of not more than 3% of the Purchase Payments.
Amounts paid by EFILI to Fidelity Insurance Agency, Inc. will be paid out
of the general assets of EFILI, which may include proceeds derived from
mortality and expense risk charges EFILI deducts from the Variable Account.
POSTPONEMENT OF BENEFITS
We will usually send annuity income within seven days of the Annuity Income
Date. We will usually send any lump sum distributions to Beneficiaries
within seven days of the day we receive proper notice. We will usually send
any Death Benefit within seven days after we receive due proof of your
death (for a single life Contract) or the deaths of you and the Joint
Annuitant (for a joint life Contract). However, we may delay sending these
amounts if (1) the disposal or valuation of the Variable Account's assets
is not reasonably practicable because the New York Stock Exchange is closed
for other than a regular holiday or weekend, trading is restricted by the
SEC, or the SEC declares that an emergency exists; or (2) the SEC by order
permits postponement for any other reason.
MORE ABOUT THE VARIABLE ACCOUNT AND THE FUNDS
CHANGES IN INVESTMENT OPTIONS
We may from time to time make additional investment options available to
you. These investment options will invest in investment portfolios that we
find suitable for the Contract.
EFILI also has the right to eliminate any Investment Option, to combine two
or more Investment Options, or substitute a new portfolio or fund for the
Portfolio in which an Investment Option invests. A substitution may become
necessary if, in EFILI's judgment, a Portfolio or Fund no longer suits the
purpose of the Contract. This may happen due to a change in laws or
regulations, or a change in a Portfolio's investment objectives or
restrictions, or because the Portfolio is no longer available for
investment, or for some other reason. EFILI would obtain prior approval
from the SEC and any other required approvals before making such a
substitution.
EFILI also reserves the right to operate the Variable Account as a
management investment company under the 1940 Act or any other form
permitted by law or to deregister the Variable Account under such Act in
the event such registration is no longer required.
NET RATE OF RETURN FOR AN INVESTMENT OPTION
The Net Rate of Return reflects the investment performance of the
Investment Option, less all expenses and charges, for the Valuation Period.
EFILI determines the Net Rate of Return of an Investment Option at the end
of each Valuation Period. Such determinations are made as of the close of
business each day the New York Stock Exchange is open for business.
Shares of the Funds are valued at net asset value. Any dividends or capital
gains distributions of a Portfolio of the Funds are reinvested in shares of
that Portfolio.
VOTING RIGHTS
EFILI will vote shares of the Funds owned by the Variable Account according
to your instructions. However, if the Investment Company Act of 1940 or any
related regulations or interpretations should change, and EFILI decides
that it is permitted to vote the shares of the Funds in its own right, it
may decide to do so.
EFILI calculates the number of shares that you may instruct it to vote by
dividing the reserve maintained in each Investment Option to meet the
obligations under the Contract by the net asset value of one share of the
corresponding Portfolio. Fractional votes will be counted. EFILI reserves
the right to modify the manner in which it calculates the weight to be
given to your voting instructions where such a change is necessary to
comply with Federal regulations or interpretations of those
regulations.
EFILI will determine the number of shares you can instruct it to vote 90
days or less before the applicable Fund shareholder meeting. At least 14
days before the meeting, we will mail you material for providing your
voting instructions.
If your voting instructions are not received in time, EFILI will vote the
shares in the same proportion as the instructions received with regard to
all other contracts issued through the Variable Account. EFILI will also
vote shares it holds in the Variable Account that are not attributable to
contracts in the same proportionate manner. Under certain circumstances,
EFILI may be required by state regulatory authorities to disregard voting
instructions. This may happen if following such instructions would change
the sub-classification or investment objectives of the Portfolios, or
result in the approval or disapproval of an investment advisory contract.
Under Federal regulations, EFILI may also disregard instructions to
vote for changes in investment policies or the investment adviser if it
disapproves of the proposed changes. EFILI would disapprove a proposed
change only if it were contrary to state law, prohibited by state
regulatory authorities, or if it decided that the change would result in
overly speculative or unsound investments. If EFILI ever disregards voting
instructions, it will include a summary of its actions in the next
semi-annual report.
RESOLVING MATERIAL CONFLICTS
The Funds are available to separate accounts offering variable annuity and
variable life products of other participating insurance companies, as well
as to the Variable Account and other separate accounts EFILI establishes.
Although EFILI does not anticipate any disadvantages to this, there is a
possibility that a material conflict may arise between the interest of the
Variable Account and one or more of the other separate accounts
participating in a Fund. A conflict may occur due to a change in law
affecting the operations of variable life insurance and variable annuity
separate accounts, differences in the voting instructions we receive and
instructions received by other companies, or some other reason. In the
event of a conflict, it is possible that the Variable Account might be
required to withdraw its investment in the Funds. In the event of any
conflict, we will take any steps necessary to protect Annuitants, Joint
Annuitants and Beneficiaries.
PERFORMANCE
Performance information for the Investment Options may appear in reports
and advertising to current and prospective Owners, Annuitants, Joint
Annuitants and Beneficiaries. The performance information is based on
historical investment experience of the Investment Options and the Funds
and does not indicate or represent future performance.
Total returns are based on the overall dollar or percentage change in value
of a hypothetical investment. Total return quotations reflect changes in
Portfolio share price, the automatic reinvestment by the separate account
of all distributions and the deduction of applicable annuity charges.
A cumulative total return reflects performance over a stated period of
time. An average annual total return reflects the hypothetical annually
compounded return that would have produced the same cumulative total return
if the performance had been constant over the entire period. Because
average annual total returns tend to smooth out variations in an Investment
Option's returns, you should recognize that they are not the same as actual
year-by-year results.
Some Investment Options may also advertise yield. These measures reflect
the income generated by an investment in the Investment Option over a
specified period of time. This income is annualized and shown as a
percentage. Yields do not take into account capital gains or losses.
The Money Market Investment Option may advertise its current and effective
yield. Current yield reflects the income generated by an investment in the
Investment Option over a 7 day period. Effective yield is calculated in a
similar manner except that income earned is assumed to be reinvested. The
Investment Grade Bond and the High Income Investment Options may advertise
a 30 day yield which reflects the income generated by an investment in the
Investment Option over a 30 day period.
LITIGATION
Neither EFILI, the Variable Account, nor Fidelity Brokerage Services, Inc.
is a party to any material litigation.
APPENDIX - ILLUSTRATIONS OF VALUES
The following tables have been prepared to show how investment performance
affects your variable annuity income over time. In these illustrations, we
assume that you are the person who will receive the variable annuity
income, and that the Contract is a Non-qualified Contract. The
illustrations show variable annuity income amounts and fixed annuity income
amounts.
The variable annuity income amounts reflect three different assumptions for
a constant investment return after all expenses: - 1.65 %, the
Benchmark Rate of Return, and 10%. These are hypothetical rates of return
and, of course, EFILI does not guarantee that you will earn these returns
for any one year or any sustained period of time. The tables are for
illustrative purposes only and do not represent past or future investment
returns.
Your variable income may be more or less than the income shown if the
actual returns of the Investment Options are different than those
illustrated. Since it is very likely that your investment returns will
fluctuate over time, you can expect that the amount of your annuity income
will also fluctuate. The total amount of annuity income ultimately received
will depend on how long you live and whether you choose a guarantee period
option.
Another factor which determines the amount of variable annuity income is
the Benchmark Rate of Return. You choose the Benchmark Rate of Return from
the options available. Income will increase from one Annuity Income Date to
the next if the annualized Net Rate of Return during that time is greater
than the Benchmark Rate of Return you choose, and will decrease if the
annualized Net Rate of Return is less than the Benchmark Rate of Return.
Two tables follow. The first is based on a 3.5% Benchmark Rate of Return,
and the second is based on a 5% Benchmark Rate of Return.
The income amounts shown reflect the deduction of all fees and expenses.
Portfolio management fees and operating expenses are assumed to be at an
annual rate of .66 % of their average daily net assets. Actual fees
and expenses under the Contract may be higher or lower, will vary from year
to year, and will depend on how you allocate among the portfolios. The
mortality and expense risk and administration charge are assumed to be at
an annual rate of 1% of the average daily net assets.
Upon request we will furnish a customized illustration based on your
individual circumstances and choice of annuity options.
INCOME ADVANTAGE ILLUSTRATION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ANNUITANT(S): JOHN DOE ANNUITY PURCHASE AMOUNT: $100,000
SEX: MALE CONTRACT DATE: 3/1/9 7
DATE OF BIRTH: 1/1/3 2 FIRST ANNUITY INCOME DATE: 4/1/9 7
PURCHASE PAYMENT ALLOCATION: 100% VARIABLE 0% FIXED
ANNUITY INCOME OPTION: SINGLE LIFE
ANNUITY FREQUENCY OF ANNUITY
INCOME: MONTHLY
PREMIUM TAX FOR NEW YORK: 0%
</TABLE>
The amount of monthly variable annuity income shown in the table below and
the graph that follows assumes a constant annual investment return. The
amount of variable annuity income you actually receive will depend on the
investment performance of the portfolios you select. Your variable income
can go up or down and no minimum dollar amount of variable income is
guaranteed. The amounts shown are based on a 3.5% Benchmark Rate of Return.
Annual rate of return after all expenses: (1)
Annuity Income Date Age -1.65% 3.5% 10%
Apr. 1, 1997 65 $589 $592 $ 595
Apr. 1, 1998 66 $560 $592 $ 632
Apr. 1, 1999 67 $532 $592 $ 672
Apr. 1, 2000 68 $506 $592 $ 714
Apr. 1, 2001 69 $481 $592 $ 759
Apr. 1, 2006 74 $372 $592 $1,030
Apr. 1, 2011 79 $288 $592 $1,396
Apr. 1, 2016 84 $223 $592 $1,893
(1) The corresponding returns before annuity and investment expenses are:
0 %, 5.24 %, and 11.85 %
IF YOU APPLIED 100% OF YOUR PURCHASE PAYMENT TO FIXED ANNUITY INCOME ON THE
DATE OF THIS ILLUSTRATION, THE AMOUNT OF YOUR FIXED ANNUITY INCOME WOULD BE
$ 652.64 .
3.5%Benchmark
First Pa$591.16
Net Returns
Year -1.68% 3.50% 10.00%
1 $589 $592 $595
2 $560 $592 $632
3 $532 $592 $672
4 $505 $592 $714
5 $480 $592 $759
6 $456 $592 $807
7 $433 $592 $858
8 $411 $592 $911
9 $391 $592 $969
10 $371 $592 $1,030
11 $353 $592 $1,094
12 $335 $592 $1,163
13 $318 $592 $1,236
14 $302 $592 $1,314
15 $287 $592 $1,396
16 $273 $592 $1,484
17 $259 $592 $1,577
18 $246 $592 $1,676
19 $234 $592 $1,781
20 $222 $592 $1,893
$5,000.00 of your annuity income is tax free each year until the total
amount of tax-free income equals the amount of your original investment.
INCOME ADVANTAGE ILLUSTRATION14.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ANNUITANT(S): JOHN DOE ANNUITY PURCHASE AMOUNT: $100,000
SEX: MALE CONTRACT DATE: 3/1/9 7
DATE OF BIRTH: 1/1/3 2 FIRST ANNUITY INCOME DATE: 4/1/9 7
PURCHASE PAYMENT ALLOCATION: 100% VARIABLE 0% FIXED
ANNUITY INCOME OPTION: SINGLE LIFE
ANNUITY FREQUENCY OF ANNUITY INCOME: MONTHLY
PREMIUM TAX FOR NEW YORK: 0%
</TABLE>
The amount of monthly variable annuity income shown in the table below and
the graph that follows assumes a constant annual investment return. The
amount of variable annuity income you actually receive will depend on the
investment performance of the portfolios you select. Your variable income
can go up or down and no minimum dollar amount of variable income is
guaranteed. The amounts shown are based on a 5.0% Benchmark Rate of Return.
Annual rate of return after all expenses: (1)
Annuity Income Date Age -1.65% 5% 10%
Apr. 1, 1997 65 $679 $683 $ 686
Apr. 1, 1998 66 $636 $683 $ 718
Apr. 1, 1999 67 $596 $683 $ 753
Apr. 1, 2000 68 $558 $683 $ 788
Apr. 1, 2001 69 $523 $683 $ 826
Apr. 1, 2006 74 $377 $683 $1,042
Apr. 1, 2011 79 $272 $683 $1,315
Apr. 1, 2016 84 $196 $683 $1,659
(1) The corresponding returns before annuity and investment expenses are:
0 %, 6.77 %, and 11.85 %
IF YOU APPLIED 100% OF YOUR PURCHASE PAYMENT TO FIXED ANNUITY INCOME ON THE
DATE OF THIS ILLUSTRATION, THE AMOUNT OF YOUR FIXED ANNUITY INCOME WOULD BE
$ 652.64 .
5%Benchmark
First Pa$681.59
Net Returns
Year -1.68% 5.00% 10.00%
1 $679 $683 $686
2 $636 $683 $718
3 $595 $683 $753
4 $558 $683 $788
5 $522 $683 $826
6 $489 $683 $865
7 $458 $683 $906
8 $429 $683 $950
9 $401 $683 $995
10 $376 $683 $1,042
11 $352 $683 $1,092
12 $329 $683 $1,144
13 $308 $683 $1,198
14 $289 $683 $1,255
15 $270 $683 $1,315
16 $253 $683 $1,378
17 $237 $683 $1,443
18 $222 $683 $1,512
19 $208 $683 $1,584
20 $195 $683 $1,659
$5,000.00 of your annuity income is tax free each year until the total
amount of tax-free income equals the amount of your original investment.
TABLE OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
Service Agreements
General Information
Performance
Safekeeping of Variable Account Assets
Distribution of the Contracts
State Regulation
Legal Matters
Registration Statement
Independent Accountants
Financial Statements
INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT
1. Internal Revenue Service Regulations require you be given this
Disclosure Statement to make certain that you fully understand the nature
of an Individual Retirement Annuity (IRA). For this reason, it is important
that you read this statement carefully.
REVOCATION
2. You are allowed to revoke or cancel your IRA within thirty (30) days of
the later of (1) the date of the application for the IRA; or (2) the date
you receive the IRA Contract. A revocation treats an IRA as if it never
existed. If you revoke within ten days of receiving the Contract, EFILI
will refund the greater of (1) your Purchase Payment in full, neither
crediting your Contract for earnings, nor charging it with any
administrative expenses; or (2) your Purchase Payment plus the investment
performance of the Money Market Investment Option. If you revoke later
during the Free Look Period, EFILI will refund your Purchase Payment
adjusted for investment performance.
You may revoke your IRA by mailing or delivering a notice of revocation
to:
Empire Fidelity Investments Life Insurance Company
Annuity Service Center
200 Liberty Street, Tower A
One World Financial Center
New York, New York 10281
A notice of revocation shall be deemed mailed on the date of the postmark
(or if sent by certified or registered mail, the date of certification or
registration) if it is deposited in the mail in the United States in an
envelope, or other appropriate wrapper, first class postage prepaid,
properly addressed.
Any question regarding this procedure may be directed to a Fidelity
Annuity Specialist at 1-800-544-2442.
CONTRIBUTIONS
3. You may establish an IRA for the purpose of rolling over all or a
portion of certain distributions from a qualified plan, tax sheltered
annuity, individual retirement account or other IRA within 60 days of
receipt of the distribution. The amount of your rollover IRA contribution
will not be included in your taxable income for the year in which you
receive the distribution.
4. Subsequent contributions will not be accepted.
5. No deduction is allowed for a rollover contribution.
INVESTMENTS
6. The assets in your IRA are nonforfeitable.
7. The IRA is not transferable and is established for the exclusive benefit
of you and your designated beneficiary or beneficiaries.
DISTRIBUTIONS
8. Distributions from your IRA generally will be included in your gross
income for federal income tax purposes for the year in which you receive
them.
9. To the extent they are included in taxable income, distributions from
your IRA made before age 59 1/2 will be subject to a 10% non-deductible
penalty tax (in addition to being taxable as ordinary income) unless the
distribution is rolled over to another qualified plan, tax sheltered
annuity or IRA, or the distribution is made on account of your death or
disability, or the distribution is one of a scheduled series of
"substantially equal periodic payments" over your life (or life expectancy)
or the joint lives (or joint life expectancies) of yourself and the second
person designated by you.
10. You must begin receiving distributions of the assets in your IRAs by
April 1 of the calendar year following the calendar year in which you reach
70 1/2. Subsequent distributions must be made by December 31 of each year.
11. Generally, you may select any of the annuity income options under the
Contract as the method of distribution for the assets of this IRA. However,
if you name a Joint Annuitant who is not your spouse, the joint and
survivor annuity income options from which you may select may be limited,
depending on the difference in ages between you and the Joint Annuitant.
Also, if you name a Joint Annuitant, all distributions made while you are
alive must be made to you. Furthermore, if you choose a guarantee period,
it generally may not be longer than your life expectancy (or the joint life
and last survivor expectancy of you and the Joint Annuitant, if any).
12. Once distributions are required to begin, they must not be less than
the amount each year (determined by actuarial tables) which would exhaust
the value of all your IRAs over the required distribution period, which is
generally your life expectancy or the joint life and last survivor
expectancy of you and your spouse. You will be subject to a 50% excise tax
on the amount by which the distribution you actually received in any year
falls short of the minimum distribution required for the year.
13. If you die before your entire interest is distributed, the remaining
interest, if any. will be distributed as follows:
(a) If you die after distribution of your interest has begun, the remaining
portion of such interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior to your death.
(b) If you die before distributions have begun, the entire remaining
interest must be distributed as follows:
(1) if there is no Joint Annuitant, by December 31st of the year
containing the fifth anniversary of your death, and usually within seven
days after we receive due proof of your death; or
(2) if there is a Joint Annuitant, in equal or substantially equal
payments over the life or the life with a period certain not exceeding the
life expectancy of the Joint Annuitant starting by December 31st of the
year following the year of your death.
14. There is a 15% excise tax assessed against annual distributions from
tax-favored retirement plans, including IRAs, which exceed the greater of
(a) $150,000; and (b) $112,500 adjusted after 1988 to reflect
cost-of-living increases. To determine whether you have distributions in
excess of this limit you must aggregate the amounts of all distributions
received by you during the calendar year from all retirement plans,
including IRAs. Please consult with your tax advisor for more complete
information including favorable elections.
15. You may rollover all or a portion of your IRA into another IRA or
individual retirement annuity and maintain the tax-deferred status of these
assets. Tax-free rollovers between IRAs may be made no more than once every
twelve months.
OTHER TAX CONSIDERATIONS
16. Distributions are taxed generally as ordinary income under federal
income tax laws.
17. The tax treatment of single sum distributions under Section 402(d) of
the Code is not applicable to distributions from IRAs.
18. Reporting to the IRS will be required by you in the event that special
taxes or penalties described herein are due. You must file Treasury Form
5329 with the IRS for each taxable year in which a premature distribution
takes place, excess distributions are made, or less than the required
minimum amount is distributed from your IRA. The Tax Reform Act of 1986
also requires you to report the amount of all distributions you received
from your IRA and the aggregate balance of all IRAs as of the end of the
calendar year.
PROHIBITED TRANSACTIONS
19. If you or your designated beneficiary borrow any money under, or by use
of, all or a portion of your IRA, then the entire Contract will lose its
IRA classification, and you must include in gross income the fair market
value of the Contract as of the first day of the tax year. If you are
younger than age 59 1/2 at that time, you may have to pay the 10% penalty
tax on premature distributions.
IRS PROCEDURES
20. The form of your IRA has been submitted to the Internal Revenue Service
for approval. Approval by the IRS is a determination only as to the form of
the IRA and does not represent a determination on the merits of such IRA.
21. You may obtain further information with respect to your IRA from any
district office of the Internal Revenue Service.
FINANCIAL INFORMATION
22. The value of your investment will depend on how you allocate your
Purchase Payment between fixed and variable annuity income. The portion of
your Purchase Payment allocated to fixed annuity income results in income
that is the same from one Annuity Income Date to the next unless you choose
an annuity income option that calls for decreasing annuity income upon your
death or the death of the Joint Annuitant. The annuity income from the
portion of your Purchase Payment allocated to the Investment Options will
depend upon the actual investment performance of the Investment Options you
choose. No minimum amount of variable annuity income is guaranteed. See
your prospectus for a more detailed description.
23. As further described in the prospectus, the following are all the
charges that EFILI currently makes:
a) ADMINISTRATIVE CHARGE
EFILI deducts a daily charge from the assets of the Investment Options
equivalent to an effective annual rate of 0.25%. This charge is not made
against any portion of your Purchase Payment allocated to the purchase of
fixed annuity income.
(b) MORTALITY AND EXPENSE RISK CHARGE
EFILI deducts a daily charge from the assets of the Investment Options
equivalent to an effective annual rate of 0.75%. This charge is not made
against any portion of your Purchase Payment allocated to the purchase of
fixed annuity income.
(c) PORTFOLIO EXPENSES
The Portfolios associated with the Investment Options incur operating
expenses and pay monthly management fees to Fidelity Management & Research
Company. The level of expenses varies by Portfolio. These charges do not
apply to any portion of your Purchase Payment allocated to the purchase of
fixed annuity income.
PART B
INFORMATION REQUIRED IN A STATEMENT
OF ADDITIONAL INFORMATION
INCOME ADVANTAGE
STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 1997
This Statement of Additional Information supplements the information found
in the current Prospectus for the variable annuity contracts ("Contracts")
offered by Empire Fidelity Investments Life Insurance Company through its
EFILI Variable Annuity Account A (the "Variable Account"). You may obtain
a copy of the Prospectus dated April 30, 1997, without charge by calling
800-544-2442.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE
READ TOGETHER WITH THE PROSPECTUS FOR THE CONTRACT.
TABLE OF CONTENTS PAGE
Service Agreements... 2
General Information 2
Performance 3
Safekeeping of Variable Account Assets 5
Distribution of the Contracts 5
State Regulation 5
Legal Matters 6
Registration Statement 6
Independent Accountants 6
Financial Statements 6
SERVICE AGREEMENTS
We have entered into a service agreement with Fidelity Investments Life
Insurance Company ("FILI"), our parent. FILI may provide accounting,
underwriting, claims, actuarial and data processing services.
GENERAL INFORMATION
We may advertise quotes of Owners, Annuitants, Joint Annuitants or
Beneficiaries discussing Empire Fidelity Income Advantage or services
provided by EFILI. In addition, we may from time to time use statistics in
advertising to support the growth of annuity sales. Information to support
these statistics may be obtained from the Life Insurance Marketing Research
Association, A.M. Best, American Council of Life Insurance or the Variable
Annuity Research and Data Service.
From time to time, we may reprint and use as advertising and sales
literature, articles or quotes from financial or business publications and
periodicals. In addition, we may reference or discuss the products and
services of other affiliated companies, which may include: Fidelity funds;
retirement investing; brokerage products and services; saving for college;
charitable giving; and the Fidelity credit card.
In addition, Fidelity Investments Life may also provide information to help
individuals understand their investment goals and explore various financial
strategies. In communicating these strategies, we may:
compare the differences between tax deferred and taxable investments;
discuss factors to consider when purchasing the contract;
discuss the effects of probate when transferring the contract to heirs;
discuss traditional sources of retirement income and products which may be
used to supplement that income;
discuss effects of inflation on fixed-income sources and how the variable
investment options may be used as a potential hedge against inflation
during the deferral and income periods;
illustrate and compare the effects additional payments have on a contract;
discuss strategies of reducing risk through diversification of purchase
payments and providing hypothetical investment mixes;
discuss past returns of different classes of investmentsis, and;
assist policyholders with inquiries regarding their annuity.
based on data supplied through various sources such as Ibbotson Associates
of Chicago, Illinois
This information may be obtained from various sources such as The U.S.
Department of the Treasury, U.S. Department of Labor, and Individual
Annuitant Mortality Table. We may present this information through various
methods such as charts, graphs, illustrations, and tables.
You may purchase the contract with proceeds from various sources such as
transactions qualifying for a tax-free exchange under Section 1035 of the
Internal Revenue Code.
PERFORMANCE
Performance information for any Investment Option may be compared, in
reports and advertising to: (1) the Standard & Poor's 500 Composite Stock
Price Index ("S & P 500"), Dow Jones Industrial Average ("DJIA"),
Donoghue's Money Market Institutional Averages; (2) other variable annuity
separate accounts or other investment products tracked by Lipper Analytical
Services, Morningstar, or the Variable Annuity Research and Data Service,
widely used independent research firms which rank mutual funds and other
investment companies by overall performance, investment objectives, and
assets; and (3) the Consumer Price Index (measure for inflation) to assess
the real rate of return from an investment. Unmanaged indices may assume
the reinvestment of dividends but generally do not reflect deductions for
annuity charges and investment management costs.
Total returns, yields and other performance information may be quoted
numerically or in a table, graph, or similar illustration. Reports and
advertising may also contain other information including the ranking of any
Investment Option derived from rankings of variable annuity separate
accounts or other investment products tracked by Lipper Analytical
Services, rating services, companies, publications or other persons who
rank separate accounts or other investment products.
The tables below provide performance results for each Investment Option
through 12/31/96. The performance information is based on the historical
investment experience of the Investment Options and of the Portfolios. It
does not indicate or represent future performance.
Total Return
Total returns quoted in advertising reflect all aspects of an Investment
Option's return, including the automatic reinvestment by the separate
account of all distributions and any change in the Investment Option's
value over the period. Average annual returns are calculated by
determining the growth or decline in value of a hypothetical historical
investment in the Investment Option over a stated period, and then
calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had been
constant over the period. For example, a cumulative return of 100% over
ten years would produce an average annual return of 7.18%, which is the
steady rate that would equal 100% growth on a compounded basis in ten
years. While average annual returns are a convenient means of comparing
investment alternatives, investors should realize that the Investment
Option's performance is not constant over time, but changes from year to
year, and that average annual returns represent averaged figures as opposed
to the actual year-to-year performance of an Investment Option.
Table 1 shows the average annual total return on a hypothetical investment
in the Investment Options for the last year, from the date that the
Portfolios began operations, and, for Portfolios in existence for five
years or more, for five years, through December 31, 1996. The returns
reflect the risk and administrative charge (1% on an annual basis).
Table 1: Average Annual Total Return for Period Ending on 12/31/96.
Investment Option Start Date One Year Five Years Life of Fund
Asset Manager 9/6/89 13.45% 10134% 10.58%
Money Market 4/1/82 4.34% 3.48% 4.89%*
Investment
Grade Bond 12/5/88 2.15% 5.56% 7.12%
Equity-Income 10/9/86 13.13% 16.78% 12.59%*
Growth 10/9/86 13.55% 14.00% 10.01%*
High Income 9/19/85 12.88% 13.79% 6.81%
Overseas 1/28/87 12.08% 8.03% 6.81%
Index 500 8/27/92 21.59% N/A 15.93%
Asset Manager:
Growth 1/3/95 18.73% N/A 20.38%
Contrafund 1/3/95 20.09% N/A 28.95%
10 Years
In addition to average annual returns, the Investment Options may quote
unaveraged or cumulative total returns reflecting the simple change in
value of an investment over a stated period. Table 2 shows the cumulative
total return on a hypothetical investment in the Investment Options from
the date the Portfolios began operations through December 31, 1996. The
returns reflect the risk and administrative charge (1% on an annual basis)
Table 2: Cumulative Total Return for Period Ending on 12/31/96.
Investment Option Start Date One Year Five Years Life of Fund
Asset Manager 9/6/89 13.45% 62.12% 108.83%
Money Market 4/1/82 4.34% 18.66% 61.33%*
Investment
Grade Bond 12/5/88 2.15% 31.13% 74.25%
Equity-Income 10/9/86 13.13% 117.36% 227.72%*
Growth 10/9/86 13.55% 92.65% 270.84%
High Income 9/19/85 12.88% 90.95% 159.71%
Overseas 1/28/87 12.08% 47.19% 92.32%
Index 500 8/27/92 21.59% N/A 90.14%
Asset Manager:
Growth 1/3/95 18.73% N/A 44.27%
Contrafund 1/3/95 20.09% N/A 66.04%
10 Years
Yields
Some Investment Options may also advertise yields. Yields quoted in
advertising reflect the change in value of a hypothetical investment in the
Investment Option over a stated period of time, not taking into account
capital gains or losses. Yields are annualized and stated as a percentage.
Yields quoted in advertising may be based on historical seven day periods.
Current yield for the Money Market Investment Option reflects the income
generated by the Investment Option over a 7 day period. Current yield is
calculated by determining the change (net of management fees and the 1%
insurance charge) of a hypothetical account containing one share of the
underlying Portfolio exclusive of capital changes. This change is divided
by the value of the account at the beginning of the base period to obtain
the base period return. This base period return is annualized by
multiplying by (365/7). The resulting yield figure is carried to the
nearest hundredth of a percent. Effective yield is obtained by compounding
the base period return over a one year period. Since the reinvestment of
income is assumed in the calculation of the effective yield, it will
generally be higher than the current yield. For the 7 day period ending on
12/31/96, the Money Market Investment Option had a current yield of 4.24%
and an effective yield of 4.33%.
A 30 day yield for bond Investment Options reflects the income generated by
an Investment Option over a 30 day period. Current yield is calculated by
determining the interest income (net of management fees and the 1%
insurance charge) of a hypothetical account containing one share exclusive
of capital changes. Yield will be computed by dividing the net interest
income during the period by the value of the hypothetical account at the
end of the period. Income is calculated for purposes of yield quotations
in accordance with standardized methods applicable to all bond funds. In
general, interest income is reduced with respect to bonds trading at a
premium over their par value by subtracting a portion of premium from
income on a daily basis and is increased with respect to bonds trading at a
discount by adding a portion of the discount to daily income. Capital
gains and losses are generally excluded from the calculation. The 30 day
yield for the period ending on 12/31/96 was 5.00% for the Investment Grade
Bond Investment Option and 6.27% for the High Income Investment Option.
Annuity Income
Periodic annuity income amounts may be illustrated using the historical
performance of the Investment Options, the Standard & Poor's 500 Composite
Stock Price Index or other recognized investment benchmark portfolios. All
illustrations will reflect the 1% annual annuity charge and actual or
assumed Portfolio expenses.
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS
The assets of the Variable Account are held by EFILI. The assets of the
Variable Account are held apart from our general account assets and any
other separate accounts we may establish. We maintain records of all
purchases and redemptions of the shares of the Funds held by the variable
Investment Options. We maintain fidelity bond coverage for the acts of our
officers and employees.
DISTRIBUTION OF THE CONTRACTS
As explained in the Prospectus, the Contracts are distributed through
Fidelity Brokerage Services, Inc. and Fidelity Insurance Agency, Inc.,
which are affiliated with FMR Corp. and EFILI. The offering of the
contracts is continuous, and we do not anticipate discontinuing offering
the Contracts. However, we reserve the right to discontinue offering the
contracts.
STATE REGULATION
EFILI is subject to regulation by the Department of Insurance of the State
of New York, which periodically examines our financial condition and
operations. The Contract described in the Prospectus and Statement of
Additional Information has been filed with and, where required, approved
by, insurance officials in those jurisdictions where it is sold.
We are required to submit annual statements of our operations, including
financial statements, to the insurance departments of the various
jurisdictions where we do business to determine solvency and compliance
with applicable insurance laws and regulations.
LEGAL MATTERS
The legal validity of the Contracts described in the Prospectus and
Statement of Additional Information has been passed on by David J.
Pearlman, Senior Legal Counsel of FMR Corp. Jorden Burt Berenson & Johnson
LLP of Washington, D.C. has passed on matters relating to federal
securities laws.
REGISTRATION STATEMENT
We have filed a Registration Statement under the Securities Act of 1933
with the SEC relating to the Contracts. The Prospectus and Statement of
Additional Information do not include all the information in the
Registration Statement. We have omitted certain portions pursuant to SEC
rules. You may obtain the omitted information from the SEC's main office
in Washington, D.C. by paying the SEC's prescribed fees.
INDEPENDENT ACCOUNTANTS
The statements of financial condition of Empire Fidelity Investments Life
Insurance Company as of December 31, 1996 and 1995 and the related
statements of income, stockholder's equity, and cash flows for each of the
three years in the period ended December 31, 1996, and the statement of
assets and liabilities of the Empire Fidelity Investments Variable Annuity
Account A as of December 31, 1996, and the related statements of operations
and changes in net assets for the years ended December 31, 1996 and 1995
included in this registration statement have been included herein in
reliance on the reports of Coopers & Lybrand L.L.P., independent
accountants, on the authority of that firm as experts in accounting and
auditing.
FINANCIAL STATEMENTS
The financial statements of EFILI included herein should be distinguished
from the financial statements of the Variable Account and should be
considered only as bearing upon our ability to meet our obligations under
the Contracts.
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(A Wholly-Owned Ultimate Subsidiary of FMR Corp.)
FINANCIAL STATEMENTS
for the years ended December 31, 1996, 1995 and 1994
Page(s)
Report of Independent Accountants 1
Statements of Financial Condition 2
Statements of Income 3
Statements of Stockholder's Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6-12
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Empire Fidelity Investments Life Insurance Company:
We have audited the accompanying statements of financial condition of
Empire Fidelity Investments Life Insurance Company (a wholly-owned ultimate
subsidiary of FMR Corp.) as of December 31, 1996 and 1995, and the related
statements of income, stockholder's equity, and cash flows for each of the
three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial condition of Empire Fidelity
Investments Life Insurance Company as of December 31, 1996 and 1995, and
the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1996 in conformity with generally
accepted accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 29, 1997
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(A Wholly-Owned Ultimate Subsidiary of FMR Corp.)
STATEMENTS OF FINANCIAL CONDITION
December 31, 1996 and 1995
ASSETS
1996 1995
Debt securities available
for sale $16,377,959 $16,049,538
Cash 940,264 238,986
Accrued investment income 265,264 261,132
Deferred policy acquisition
costs 12,588,658 9,639,824
Other assets 121,736 50,855
Separate account assets 578,323,382 408,308,869
Total assets $608,617,263 $434,549,204
LIABILITIES
Future contract benefits 7,057,409 7,631,476
Payable to affiliates 544,059 513,137
Other liabilities and accrued
expenses 338,406 379,886
Deferred tax liability 2,778,525 2,316,120
Separate account
liabilities 578,073,237 407,806,191
Total liabilities 588,791,636 418,646,810
Commitments and contingencies (Note 7)
STOCKHOLDER'S EQUITY
Common stock, par value $10 per
share - 200,000 shares authorized,
issued and outstanding 2,000,000 2,000,000
Additional paid-in capital 11,500,000 10,000,000
Unrealized gain on available
for sale securities, net of
tax 183,909 421,830
Retained earnings 6,141,718 3,480,564
Total stockholder's equity 19,825,627 15,902,394
Total liabilities and
stockholder's equity $608,617,263 $434,549,204
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(A Wholly-Owned Ultimate Subsidiary of FMR Corp.)
STATEMENTS OF INCOME
for the years ended December 31, 1996, 1995 and 1994
1996 1995 1994
Revenues:
Fees charged to
contractholders $5,324,274 $3,499,018 $2,519,300
Net investment
income 947,831 1,060,440 453,029
Realized gains
(losses), net (600) 919 (556)
6,271,505 4,560,377 2,971,773
Benefits and expenses:
Return credited to
contractholders
and other benefits 336,079 442,617 155,126
Underwriting,
acquisition and
insurance expenses
(1) 1,900,291 1,345,682 1,061,561
2,236,370 1,788,299 1,216,687
Income before
provision for
income taxes 4,035,135 2,772,078 1,755,086
Provision for
income taxes 1,373,981 986,816 614,280
Net income $2,661,154 $1,785,262 $1,140,806
(1) Includes affiliated party transactions (Note 5)
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(A Wholly-Owned Ultimate Subsidiary of FMR Corp.)
STATEMENTS OF STOCKHOLDER'S EQUITY
for the years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Unrealized
Gain (Loss)
Additional on Available Total
Common Paid-in for Sale Retained Stockholder's
Stock Capital Securities Earnings Equity
Balance at
January 1,
1994 $2,000,000 $8,000,000 $554,496 $10,554,496
Adjustment to
beginning balance
for change in
accounting principle,
net of tax of $66,176 $122,897 122,897
Capital contribution
from parent 2,000,000 2,000,000
Net income 1,140,806 1,140,806
Change in unrealized
gain (loss), net of
tax benefit of
$154,940 (287,745) (287,745)
Balance at
December 31,
1994 2,000,000 10,000,000 (164,848) 1,695,302 13,530,454
Net income 1,785,262 1,785,262
Change in unrealized
gain (loss), net of
tax of $315,904 586,678 586,678
Balance at
December 31,
1995 2,000,000 10,000,000 421,830 3,480,564 15,902,394
Capital contribution
from parent 1,500,000 1,500,000
Net income 2,661,154 2,661,154
Change in unrealized
gain (loss), net of
tax benefit of $128,112 (237,921) (237,921)
Balance at
December 31,
1996 $2,000,000 $11,500,000 $183,909 $6,141,718 $19,825,627
</TABLE>
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(A Wholly-Owned Ultimate Subsidiary of FMR Corp.)
STATEMENTS OF CASH FLOWS
for the years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1996 1995 1994
Cash flows from operating activities:
Net income $2,661,154 $1,785,262 $1,140,806
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Amortization of bond discount and
premium 100,738 61,980 148,820
Realized (gain) loss on investments 600 (919) 556
Depreciation and amortization 592,524 432,840 290,982
Deferred tax on earnings 590,517 484,464 570,118
Increase in future contract benefits 284,757 324,703 147,414
Addition to deferred policy acquisition
costs (3,531,030) (2,613,570) (2,687,700)
Change in assets and liabilities:
Accrued investment income (4,132) (55,244) (78,466)
Amounts due to (from) separate account 252,533 (95,735) (15,940)
Payable to parent and affiliates, net 30,922 331,828 86,802
Other assets and liabilities (122,689) 231,875 275,934
Net cash provided by (used in) operating
activities 855,894 887,484 (120,674)
Cash flows from investing activities:
Purchase of debt securities (5,060,540) (5,352,430) (15,183,971)
Proceeds from disposal of debt
securities 4,264,748 2,078,307 9,597,665
Additions to fixed assets - (7,501) (5,660)
Additions to separate account (105,762,522) (76,952,370) (81,541,668)
Net cash used in investing
activities (106,558,314) (80,233,994) (87,133,634)
Cash flows from financing activities:
Considerations and deposits on variable
annuity products 117,681,324 87,118,309 89,591,046
Payments to contractholders (12,777,626) (8,229,336) (4,357,091)
Capital contribution from parent 1,500,000 - 2,000,000
Net cash provided by financing
activities 106,403,698 78,888,973 87,233,955
Net increase (decrease) in cash 701,278 (457,537) (20,353)
Cash:
Beginning of year 238,986 696,523 716,876
End of year $940,264 $238,986 $696,523
</TABLE>
The accompanying notes are an integral part of the financial statements.
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(A Wholly-Owned Ultimate Subsidiary of FMR Corp.)
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Organization
Empire Fidelity Investments Life Insurance Company (the "Company") is a
wholly-owned subsidiary of Fidelity Investment Life Insurance Company
("FILI"), which is a wholly-owned subsidiary of FMR Corp. The Company
operates exclusively in the State of New York.
The Company issues variable deferred and immediate annuity contracts.
Amounts invested in the fixed option of the contracts are allocated to the
General Account of the Company. Amounts invested in the variable option of
the contract are allocated to the Variable Annuity Account A, a separate
account of the Company. The assets of the Variable Annuity Account A are
invested in the portfolios of the Variable Insurance Products Fund and the
Variable Insurance Products Fund II, which are reported at the net asset
value of such portfolios.
Basis of Presentation
The accompanying financial statements of the Company have been prepared on
the basis of generally accepted accounting principles (GAAP), which vary in
certain respects from reporting practices prescribed by state insurance
regulatory authorities (Note 4).
Investments
Investments in debt securities available for sale are reported at fair
value. Fair values are derived from external market quotations.
Unrealized gains or losses on debt securities are excluded from earnings
and reported as a separate component of stockholder's equity, net of taxes,
until realized. The discount or premium on debt securities is amortized
using the interest method. Loan-backed and structured securities are
amortized including anticipated prepayments at the date of purchase.
Investment income is recognized on the accrual basis. Realized gains or
losses on investments sold are determined on the basis of specific
identification method. Unrealized and realized gains or losses on the
Company's funds retained in the separate account are reflected in income.
Separate Account
Separate account assets represent funds held for the exclusive benefit of
variable annuity contractholders and are reported at fair value. Since the
contractholders receive the full benefit and bear the full risk of the
separate account investments, the income and realized and unrealized gains
and losses from such investments are offset by an increase in the amount of
liabilities related to the separate account. The excess of separate
account assets over separate account liabilities represents funds of the
Company retained in the separate account.
Future Contract Benefits and Fees Charged to Contractholders
Future contract benefits represent the reserve liability which approximates
the contractholder's account balance. Fees charged to contractholders
include mortality and expense risk charges, surrender charges and an annual
administrative charge.
Deferred Policy Acquisition Costs
The costs of acquiring new business, principally first-year commissions and
certain expenses of policy issue and underwriting, all of which vary with
and are related to the production of new business, have been deferred.
These acquisition costs are being amortized in proportion to the present
value of expected future gross profits from interest margins, mortality and
other elements of performance under the contracts.
Income Taxes
The Company is included in the consolidated life insurance tax return filed
by FILI. Under a tax-sharing agreement, each company is charged or
credited its share of taxes as determined on a separate-company basis.
The liability method is used in accounting for income taxes. Under this
method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted rates and laws that will be
in effect when the differences are expected to reverse.
Use of Estimates
The preparation of the statement of financial condition in accordance with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenue and expense during the reporting period. Actual results
could differ from those estimates.
Reclassifications
Certain prior year balances have been reclassified to conform with the
current year presentation.
2.Investments:
The sources of net investment income are as follows:
Years ended December 31,
1996 1995 1994
Debt securities $1,029,347 $1,050,500 $492,970
Short-term
investments and
cash 23,821 22,150 27,824
Investment in separate
account 16,036 94,136 2,934
Total investment
income 1,069,204 1,166,786 523,728
Investment expenses 121,373 106,346 70,699
Net investment
income $947,831 $1,060,440 $453,029
Gross realized gains and losses from the sale of debt securities were as
follows:
Years Ended December 31,
1996 1995 1994
Gross realized gains $92 $2,873
Gross realized losses 692 1,954 $556
Gross unrealized appreciation (depreciation) for debt securities by type of
issuer was as follows:
December 31, 1996
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies $8,878,712 $218,868 $(18,523) $9,079,057
Corporate securities 5,853,124 66,855 (314) 5,919,665
Asset-backed securities 1,363,186 16,051 1,379,237
Totals $16,095,022 $301,774 $(18,837) $16,377,959
December 31, 1995
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies $4,811,518 $411,444 $5,222,962
Corporate securities 8,094,646 178,930 $(193) 8,273,383
Asset-backed securities 2,494,404 58,832 (43) 2,553,193
Totals $15,400,568 $649,206 $(236) $16,049,538
The amortized cost and fair value of debt securities at December 31, 1996,
by contractual maturity, are shown below. Expected maturities may differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
Amortized Fair
Cost Value
Due in 1 year or less $3,484,549 $3,501,412
Due after 1 year
through 5 years 6,710,901 6,854,776
Due after 5 years
through 10 years 4,346,842 4,449,610
Due after 10 years 189,544 192,924
Subtotal 14,731,836 14,998,722
Asset-backed securities 1,363,186 1,379,237
$16,095,022 $16,377,959
All debt securities are investment grade and there are no significant
concentrations by issuer or by industry other than U.S. government
securities.
3. Income Taxes:
Significant components of the provision for income taxes attributable to
operations were as follows:
Years Ended December 31,
1996 1995 1994
Current $783,464 $502,352 $44,162
Deferred 590,517 484,464 570,118
Provision for income
taxes $1,373,981 $986,816 $614,280
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax liability were as
follows:
Years Ended December 31,
1996 1995
Deferred policy acquisition costs $2,854,442 $2,161,421
Unrealized gain (loss) on
available-for-sale securities 99,028 227,140
Reserves (186,765) (88,631)
Other, net 11,820 16,190
Total net deferred tax liabilities $2,778,525 $2,316,120
The Company paid FILI federal income taxes of $816,323, $355,974 and
$71,681 in 1996, 1995 and 1994, respectively, related to the Company's
separate-company basis net operating results for the year. Payables of
$86,000 and $118,859 have been recorded to reflect an underpayment of taxes
to FILI in 1996 and 1995, respectively. Intercompany tax balances are
settled within 30 days of the actual tax payments.
The effective tax rates approximate the statutory federal income tax rates
for the years ended 1996, 1995 and 1994.
4. Stockholder's Equity and Dividend Restrictions:
Generally, the net assets of the Company available for transfer to FILI are
limited to the excess of the Company's net assets, as determined in
accordance with statutory accounting practices, over minimum statutory
capital requirements; however, payments of such amounts as dividends may be
subject to approval by regulatory authorities.
Net income (loss) and capital stock and surplus as determined in accordance
with statutory accounting practices were as follows:
Years Ended December 31,
1996 1995 1994
Net income (loss) $305,357 $100,694 $(717,766)
Capital stock and surplus $9,640,629 $7,834,233 $7,749,185
5. Affiliated Company Transactions:
The Company's insurance contracts are distributed through Fidelity
Brokerage Services, Inc. (FBSI) and Fidelity Insurance Agency, Inc. (FIA),
both of which are affiliated with FMR Corp. The Company has entered into
an agreement with FIA under which the Company pays FIA sales compensation
of 3% of payments received. The Company compensated FIA in the amount of
$3,521,413, $2,618,195 and $2,689,382 in 1996, 1995 and 1994, respectively.
The Company has entered into an administrative services agreement with FMR
Corp. and its subsidiaries whereby they provide certain administrative and
special services for the Company. The Company paid FMR Corp. and its
subsidiaries $404,779, $337,760 and $359,343 in 1996, 1995 and 1994,
respectively, for such services.
FMR Corp. maintains a noncontributory trusteed defined benefit pension plan
covering substantially all eligible Company employees. The benefits earned
are based on years of service and the employees' compensation during the
last five years of employment. FMR Corp.'s policy for the plan is to fund
the maximum amount deductible for income tax purposes, and to charge each
subsidiary for its share of such contributions. Pension costs of $8,628,
$9,989 and $11,628 were charged to the Company in 1996, 1995 and 1994,
respectively.
FMR Corp. sponsors a trusteed Profit-Sharing Plan and a contributory 401(k)
Thrift Plan covering substantially all eligible Company employees.
Payments are made to the trustee by FMR Corp. annually for the
Profit-Sharing Plan and monthly for the 401(k) Thrift Plan. FMR Corp.'s
policy is to fund all costs accrued and to charge each subsidiary for its
share of the cost. The cost charged to the Company for these plans
amounted to $46,836, $44,598 and $47,662 in 1996, 1995 and 1994,
respectively.
6. Underwriting, Acquisition, and Insurance Expenses:
Underwriting, acquisition and insurance expenses were as follows:
Years Ended December 31,
1996 1995 1994
Amortization of deferred policy
acquisition costs $582,196 $419,934 $277,975
Taxes, licenses and fees 388,542 122,918 77,249
General insurance expenses 929,553 802,830 706,337
$1,900,291 $1,345,682 $1,061,561
7. Commitment and Contingencies:
Reinsurance
The Company has entered into agreements to reinsure certain guarantee
provisions and mortality losses on its annuity contracts. The Company is
contingently liable for claims reinsured that the assuming company is
unable to pay. Premiums and deposits ceded under these reinsurance
contracts were not material to the financial statements.
(2_FIDELITY_LOGOS)EMPIRE FIDELITY INVESTMENTS
VARIABLE ANNUITY ACCOUNT A
ANNUAL REPORT
DECEMBER 31, 1996
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL INFORMATION OF EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE
COMPANY VARIABLE ANNUITY OWNERS. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS. NEITHER EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE
COMPANY NOR FIDELITY BROKERAGE SERVICES, INC. IS A BANK, AND NEITHER THE
ANNUITY NOR MUTUAL FUND SHARES ARE BACKED OR GUARANTEED BY ANY BANK OR
INSURED BY THE FDIC.
STATEMENT OF ASSETS AND LIABILITIES
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C>
ASSETS DECEMBER 31, 1996
Investments at Current Market Value:
Variable Insurance Products Fund (VIP)
Money Market Portfolio - 48,675,092 shares (cost $48,675,092) $ 48,675,092
High Income Portfolio - 1,673,528 shares (cost $19,657,604) 20,952,574
Equity-Income Portfolio - 7,203,986 shares (cost $119,283,610) 151,499,819
Growth Portfolio - 2,856,346 shares (cost $74,838,138) 88,946,602
Overseas Portfolio - 1,309,265 shares (cost $21,866,193) 24,666,557
Variable Insurance Products Fund II (VIP II)
Investment Grade Bond Portfolio - 567,868 shares (cost $6,863,356) 6,950,703
Asset Manager Portfolio - 4,882,698 shares (cost $71,794,963) 82,664,084
Index 500 Portfolio - 413,235 shares (cost $31,573,421) 36,831,595
Asset Manager: Growth Portfolio - 1,312,416 shares (cost $16,229,806) 17,192,654
Contrafund Portfolio - 6,035,248 shares (cost $80,549,919) 99,943,702
Total Assets $ 578,323,382
LIABILITIES
Total Liabilities 0
NET ASSETS
Variable Annuity Contracts $ 566,276,569
Annuity Reserves 11,796,668
Retained in Variable Account by Empire Fidelity Investments Life Insurance Company 250,145
Total Net Assets $ 578,323,382
</TABLE>
STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS
For the years ended December 31, 1996 and 1995
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP - VIP -
MONEY MARKET HIGH INCOME
12/31/96 12/31/95 12/31/96 12/31/95
INCOME:
Dividends $ 1,786,77 $ 1,580,34 $ 1,344,29 $ 573,316
0 0 3
EXPENSES:
Mortality, expense risk
and administrative
charges 369,246 276,570 173,493 108,556
Net investment
income (loss) 1,417,524 1,303,770 1,170,800 464,760
Realized gain 0 0 234,379 311,021
Unrealized appreciation
(depreciation) during
the year 0 0 650,495 1,066,452
Net increase in net
assets 1,417,524 1,303,770 2,055,674 1,842,233
from operations
Payments received
from contract owners 27,250,68 20,298,08 4,106,021 3,421,140
1 8
Transfers between
subaccounts and the (9,795,25 (15,358,1 1,458,992 881,407
fixed account, net 3) 81)
Transfers for contract
benefits and
terminations (1,159,04 (980,351) (381,564) (145,903)
7)
Other transfers (to) from
Empire Fidelity
Investments Life
Insurance Co., net 6,590 (277,715) (4,989) 27,410
Net increase (decrease)
in net assets from
contract transactions 16,302,97 3,681,841 5,178,460 4,184,054
1
Retained in (returned
from) Variable Annuity
Account A, net (6,995) 793 (6,253) 4,568
Total increase 17,713,50 4,986,404 7,227,881 6,030,855
(decrease) 0
in net assets
Net assets at beginning
of period 30,961,59 25,975,18 13,724,69 7,693,838
2 8 3
Net assets at end
of period $48,675,0 $ 30,961,5 $ 20,952,5 $ 13,724,6
92 92 74 93
SUBACCOUNTS INVESTING IN:
VIP -
EQUITY-INCOME VIP - GROWTH
12/31/96 12/31/95 12/31/96 12/31/95
INCOME:
Dividends $ 5,937,08 $ 5,704,765 $ 4,634,81 $ 181,456
3 9
EXPENSES:
Mortality, expense risk
and administrative
charges 1,445,756 935,882 811,476 476,876
Net investment
income (loss) 4,491,327 4,768,883 3,823,343 (295,420)
Realized gain 4,329,089 980,837 3,059,832 1,347,836
Unrealized appreciation
(depreciation) during
the year 8,576,967 21,037,305 2,520,593 10,737,43
0
Net increase in net
assets 17,397,38 26,787,025 9,403,768 11,789,84
from operations 3 6
Payments received
from contract owners 21,584,75 18,539,810 16,074,27 11,525,14
9 9 4
Transfers between
subaccounts and the (9,221,15 15,778,134 2,515,925 6,180,796
fixed account, net 7)
Transfers for contract
benefits and
terminations (3,177,33 (1,432,870 (1,354,75 (701,855)
3) ) 0)
Other transfers (to) from
Empire Fidelity
Investments Life
Insurance Co., net (35,670) 75,515 (30,252) (23,291)
Net increase (decrease)
in net assets from
contract transactions 9,150,599 32,960,589 17,205,20 16,980,79
2 4
Retained in (returned
from) Variable Annuity
Account A, net (78,836) 45,421 (40,650) 24,882
Total increase 26,469,14 59,793,035 26,568,32 28,795,52
(decrease) 6 0 2
in net assets
Net assets at beginning
of period 125,030,6 65,237,638 62,378,28 33,582,76
73 2 0
Net assets at end
of period $ 151,499, $ 125,030,6 $ 88,946,6 $62,378,2
819 73 02 82
SUBACCOUNTS INVESTING IN:
VIP - OVERSEAS
12/31/96 12/31/95
INCOME:
Dividends $ 525,818 $ 186,371
EXPENSES:
Mortality, expense risk
and administrative
charges 231,350 199,920
Net investment
income (loss) 294,468 (13,549)
Realized gain 484,088 948,661
Unrealized appreciation
(depreciation) during
the year 1,781,995 483,715
Net increase in net
assets 2,560,551 1,418,827
from operations
Payments received
from contract owners 3,046,601 1,796,064
Transfers between
subaccounts and the 1,632,798 (10,927,72
fixed account, net 3)
Transfers for contract
benefits and
terminations (312,776) (412,022)
Other transfers (to) from
Empire Fidelity
Investments Life
Insurance Co., net (20,485) 5,414
Net increase (decrease)
in net assets from
contract transactions 4,346,138 (9,538,267
)
Retained in (returned
from) Variable Annuity
Account A, net (7,308) (10,255)
Total increase 6,899,381 (8,129,695
(decrease) )
in net assets
Net assets at beginning
of period 17,767,17 25,896,871
6
Net assets at end
of period $ 24,666,5 $ 17,767,17
57 6
VIP II - VIP II -
INVESTMENT ASSET MANAGER
GRADE BOND
12/31/96 12/31/95 12/31/96 12/31/95
INCOME:
Dividends $ 337,043 $ 143,740 $ 5,293,83 $ 2,010,35
5 7
EXPENSES
:
Mortality,
expense
risk and 68,068 48,624 815,364 875,116
administrat
ive
charges
Net
investment 268,975 95,116 4,478,471 1,135,241
income
(loss)
Realized 75,367 57,874 1,663,095 2,777,299
gain
Unrealized
appreciatio
n (227,009) 563,142 4,022,895 8,678,445
(depreciati
on) during
the year
Net
increase in 117,333 716,132 10,164,46 12,590,98
net assets 1 5
from
operations
Payments
received 1,204,243 663,948 3,467,114 2,478,825
from
contract
owners
Transfers
between 976,244 (11,063,5 (30,622,5
subaccoun (177,798) 77) 61)
ts and the
fixed
account,
net
Transfers
for
contract (443,215) (148,176) (2,267,35 (2,796,51
benefits 7) 9)
and
termination
s
Other
transfers
(to) from
Empire 1,167 (1,477) (18,904) 75,768
Fidelity
Investment
s Life
Insurance
Co., net
Net
increase
(decrease) 584,397 1,490,539 (9,882,72 (30,864,4
in net 4) 87)
assets
from
contract
transaction
s
Retained
in
(returned (4,101) (4,949) (59,436) (21,367)
from)
Variable
Annuity
Account A,
net
Total 2,201,722 222,301 (18,294,8
increase 697,629 69)
(decrease)
in net
assets
Net assets
at 6,253,074 4,051,352 82,441,78 100,736,6
beginning 3 52
of period
Net assets
at end of $ 6,950,70 $ 6,253,07 $82,664,0 $ 82,441,7
period 3 4 84 83
* FOR THE PERIOD JANUARY 3, 1995 (COMMENCEMENT OF OPERATIONS) THROUGH
DECEMBER 31, 1995.
VIP II - VIP II -
INDEX 500 ASSET MANAGER:
GROWTH
12/31/96 12/31/95 12/31/96 12/31/95*
INCOME:
Dividends $ 620,782 $ 48,377 $ 862,945 $ 209,986
EXPENSES
:
Mortality,
expense
risk and 242,314 65,235 98,994 29,423
administrat
ive
charges
Net
investment 378,468 (16,858) 763,951 180,563
income
(loss)
Realized 702,643 399,595 239,532 178,391
gain
Unrealized
appreciatio
n 3,762,268 1,451,439 801,887 160,962
(depreciati
on) during
the year
Net
increase in 4,843,379 1,834,176 1,805,370 519,916
net assets
from
operations
Payments
received 9,153,239 3,472,817 5,577,602 2,910,699
from
contract
owners
Transfers
between 10,692,00 6,054,548 5,074,653 1,484,390
subaccoun 5
ts and the
fixed
account,
net
Transfers
for
contract (760,330) (919,227) (154,535) (9,486)
benefits
and
termination
s
Other
transfers
(to) from
Empire (4,432) (3,338) (3,396) (694)
Fidelity
Investment
s Life
Insurance
Co., net
Net
increase
(decrease) 19,080,48 8,604,800 10,494,32 4,384,909
in net 2 4
assets
from
contract
transaction
s
Retained
in
(returned (8,563) 5,281 (16,199) 4,334
from)
Variable
Annuity
Account A,
net
Total 23,915,29 10,444,25 12,283,49 4,909,159
increase 8 7 5
(decrease)
in net
assets
Net assets
at 12,916,29 2,472,040 4,909,159 0
beginning 7
of period
Net assets
at end of $ 36,831,5 $ 12,916,2 $ 17,192,6 $ 4,909,15
period 95 97 54 9
* FOR THE PERIOD JANUARY 3, 1995 (COMMENCEMENT OF OPERATIONS) THROUGH
DECEMBER 31, 1995.
VIP II - TOTAL
CONTRAFUND
12/31/96 12/31/95* 12/31/96 12/31/95
INCOME:
Dividends $ 526,257 $ 666,687 $ 21,869,6 $ 11,305,39
45 5
EXPENSES
:
Mortality,
expense
risk and 786,431 277,494 5,042,492 3,293,696
administrat
ive
charges
Net
investment (260,174) 389,193 16,827,15 8,011,699
income 3
(loss)
Realized 1,823,791 369,981 12,611,81 7,371,495
gain 6
Unrealized
appreciatio
n 13,273,28 6,120,498 35,163,37 50,299,388
(depreciati 6 7
on) during
the year
Net
increase in 14,836,90 6,879,672 64,602,34 65,682,582
net assets 3 6
from
operations
Payments
received 25,690,73 20,852,56 117,155,2 85,959,095
from 5 0 74
contract
owners
Transfers
between 9,364,673 24,300,25 481,261 (1,252,696
subaccoun 0 )
ts and the
fixed
account,
net
Transfers
for
contract (1,779,16 (150,792) (11,790,0 (7,697,201
benefits 1) 68) )
and
termination
s
Other
transfers
(to) from
Empire (71,396) (2,577) (181,767) (124,985)
Fidelity
Investment
s Life
Insurance
Co., net
Net
increase
(decrease) 33,204,85 44,999,44 105,664,7 76,884,213
in net 1 1 00
assets
from
contract
transaction
s
Retained
in
(returned (24,192) 47,027 (252,533) 95,735
from)
Variable
Annuity
Account A,
net
Total 48,017,56 51,926,14 170,014,5 142,662,53
increase 2 0 13 0
(decrease)
in net
assets
Net assets
at 51,926,14 0 408,308,8 265,646,33
beginning 0 69 9
of period
Net assets
at end of $ 99,943,7 $ 51,926,1 $ 578,323, $ 408,308,8
period 02 40 382 69
</TABLE>
* FOR THE PERIOD JANUARY 3, 1995 (COMMENCEMENT OF OPERATIONS) THROUGH
DECEMBER 31, 1995.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1996 and 1995
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
1. ORGANIZATION.
Empire Fidelity Investments Variable Annuity Account A (the Account), a
unit investment trust registered under the Investment Company Act of 1940
as amended, was established by Empire Fidelity Investments Life Insurance
Company (EFILI) on July 15, 1991 and exists in accordance with the
regulations of the New York Insurance Department. The Account is a funding
vehicle for individual Retirement Reserves and Income Advantage variable
annuity contracts. EFILI is a wholly-owned subsidiary of Fidelity
Investments Life Insurance Company which is a wholly-owned subsidiary of
FMR Corp.
Beginning in 1995, EFILI added two new subaccounts to the Account; Asset
Manager: Growth and Contrafund.
2. SIGNIFICANT ACCOUNTING POLICIES.
Investments are made in the portfolios of the Variable Insurance Products
Fund and the Variable Insurance Products Fund II and are valued at the
reported net asset values of such portfolios. Transactions are recorded on
the trade date. Income from dividends is recorded on the ex-dividend date.
Realized gains and losses on the sales of investments are computed on the
basis of the identified cost of the investment sold.
In addition to the Account, a contractholder may also allocate funds to the
Fixed Account, which is part of EFILI's general account. Because of
exemptive and exclusionary provisions, interests in the Fixed Account have
not been registered under the Securities Act of 1933 and EFILI's general
account has not been registered as an investment company under the
Investment Company Act of 1940.
Annuity reserves are computed for contracts in the income stage according
to the 1983 Individual Annuitant Mortality Table. The assumed investment
return is 3.5% unless the annuitant elects otherwise, in which case the
rate may vary from 3.5% to 7%, as regulated by the laws of New York. The
mortality risk is fully borne by EFILI and may result in additional amounts
being transferred into the Account by EFILI.
The operations of the Account are included in the federal income tax return
of EFILI, which is taxed as a Life Insurance Company under the provisions
of the Internal Revenue Code (the Code).
The preparation of the statement of assets and liabilities and the
statements of operations and changes in net assets in accordance with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of liabilities
at the date of the financial statements and the reported amounts of income
and expense during the reporting period. Actual results could differ from
those estimates.
Certain amounts in the financial statements for 1995 have been reclassified
to correspond to the 1996 presentation.
3. EXPENSES.
EFILI deducts a daily charge from the net assets of the Account (equivalent
to an effective annual rate of 1% of net assets) for administrative
expenses and for the assumption of mortality and expense risks. EFILI also
deducts an annual maintenance charge of $30 from the Fidelity Retirement
Reserves contract value. The maintenance charge is waived on certain
contracts.
Under the current provisions of the Code, EFILI does not expect to incur
federal income taxes on the earnings of the Account to the extent the
earnings are credited under the contracts. EFILI incurs federal income
taxes on the difference between the financial statement carrying value of
reserves for contracts in the income stage and those reserves held for
federal income tax purposes. The tax effect of this temporary difference is
expected to be recovered by EFILI. As such, no charge is being made
currently to the Account for federal income taxes. EFILI will review
periodically the status of such decision based on changes in the tax law.
Such a charge may be made in future years for any federal income taxes that
would be attributable to the contracts.
4. AFFILIATED COMPANY TRANSACTIONS.
The contracts are distributed through Fidelity Brokerage Services, Inc.
(FBSI) and Fidelity Insurance Agency, Inc. (FIA), both of which are
affiliated with FMR Corp. FBSI and FIA are the distributors and FBSI is the
principal underwriter of the contracts. Fidelity Management & Research
Company, an affiliate of FMR Corp., acts as investment advisor to each
portfolio. Fidelity Investments Institutional Operations Co., an affiliate
of FMR Corp., is the transfer and shareholder servicing agent for the
portfolios.
5. PURCHASES AND SALES OF INVESTMENTS.
The following table shows aggregate cost of shares purchased and proceeds
from sales of each subaccount for the year ended December 31, 1996:
PURCHASES SALES
Money Market $ $
46,259,773 28,546,273
High Income 10,434,586 4,091,580
Equity-Income 28,080,139 14,517,049
Growth 30,543,657 9,555,762
Overseas 8,676,063 4,042,764
Investment Grade 4,085,263 3,235,991
Asset Manager 7,199,467 12,663,155
Index 500 21,687,531 2,237,145
Asset Manager: Growth 12,668,815 1,426,740
Contrafund 38,392,223 5,471,738
6. UNIT VALUES.
A summary of changes in accumulation units and accumulation units
outstanding for variable annuity contracts at December 31, 1996 and 1995
are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PAYMENTS
BEGINNING RECEIVED TRANSFERS
BALANCE FROM CONTRACT BETWEEN
OWNERS SUBACCOUNTS,
NET
UNITS
JANUARY 1, 1996 TO DECEMBER 31, 1996
Money Market Subaccount 2,086,339 1,396,811 (671,222)
High Income Subaccount 605,822 175,020 61,177
Equity-Income Subaccount 4,481,146 751,876 (315,456)
Growth Subaccount 2,004,576 487,213 73,706
Overseas Subaccount 930,291 154,412 85,133
Investment Grade Subaccount 358,773 71,690 (12,681)
Asset Manager Subaccount 4,435,615 181,581 (584,908)
Index 500 Subaccount 802,405 537,084 624,968
Asset Manager: Growth 396,158 419,484 378,254
Subaccount*
Contrafund Subaccount* 3,685,097 1,742,216 631,751
JANUARY 1, 1995 TO DECEMBER 31, 1995
Money Market Subaccount 1,840,618 1,212,366 (887,953)
High Income Subaccount 413,916 164,126 48,831
Equity-Income Subaccount 3,148,692 755,226 681,199
Growth Subaccount 1,448,467 395,023 194,334
Overseas Subaccount 1,472,775 100,194 (621,187)
Investment Grade Subaccount 270,642 41,606 58,920
Asset Manager Subaccount 6,284,783 146,335 (1,848,581)
Index 500 Subaccount 210,179 240,442 433,808
Asset Manager: Growth 0 264,392 138,263
Subaccount*
Contrafund Subaccount* 0 1,655,600 2,096,508
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CONTRACT
TERMINATION ENDING BALANCE
S
UNITS UNIT VALUE DOLLARS
JANUARY 1, 1996 TO DECEMBER 31, 1996
Money Market Subaccount 332,385 3,144,313 $15.30 $ 48,101,350
High Income Subaccount (22,006) 820,013 $24.89 20,409,560
Equity-Income Subaccount (162,354) 4,755,212 $31.05 147,641,357
Growth Subaccount (62,104) 2,503,391 $34.97 87,540,085
Overseas Subaccount (18,195) 1,151,640 $21.29 24,519,804
Investment Grade Subaccount (34,981) 382,801 $17.36 6,644,585
Asset Manager Subaccount (131,774) 3,900,514 $20.75 80,953,438
Index 500 Subaccount (77,086) 1,887,371 $18.89 35,655,373
Asset Manager: Growth (30,890) 1,163,007 $14.49 16,853,490
Subaccount*
Contrafund Subaccount* (177,041) 5,882,023 $16.65 97,957,527
$ 566,276,569
JANUARY 1, 1995 TO DECEMBER 31, 1995
Money Market Subaccount (78,693) 2,086,339 $14.66 $ 30,587,979
High Income Subaccount (21,052) 605,822 $22.05 13,357,546
Equity-Income Subaccount (103,971) 4,481,146 $27.44 122,982,339
Growth Subaccount (33,248) 2,004,576 $30.80 61,732,843
Overseas Subaccount (21,490) 930,291 $19.00 17,672,782
Investment Grade Subaccount (12,394) 358,773 $16.99 6,096,643
Asset Manager Subaccount (146,921) 4,435,615 $18.29 81,145,514
Index 500 Subaccount (82,024) 802,405 $15.54 12,467,512
Asset Manager: Growth (6,497) 396,158 $12.21 4,835,356
Subaccount*
Contrafund Subaccount* (67,011) 3,685,097 $13.87 51,105,632
$ 401,984,146
* FOR THE PERIOD JANUARY 3, 1995 (COMMENCEMENT OF OPERATIONS) THROUGH
DECEMBER 31, 1995.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Contract Owners of Empire Fidelity Investments
Variable Annuity Account A:
We have audited the accompanying statement of assets and liabilities of
Empire Fidelity Investments Variable Annuity Account A (comprised of Money
Market Subaccount, High Income Subaccount, Equity-Income Subaccount, Growth
Subaccount, Overseas Subaccount, Investment Grade Bond Subaccount, Asset
Manager Subaccount, Index 500 Subaccount, Asset Manager: Growth Subaccount
and Contrafund Subaccount) of Empire Fidelity Investments Life Insurance
Company as of December 31, 1996, and the related statements of operations
and changes in net assets for each of the periods indicated therein. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the aforementioned
subaccounts comprising Empire Fidelity Investments Variable Annuity Account
A of Empire Fidelity Investments Life Insurance Company as of December 31,
1996, and the results of their operations and the changes in their net
assets for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 29, 1997
(registered trademark)
America's largest privately-held investment management organization.
Retirement Reserves and Income Advantage are issued by Empire Fidelity
Investments Life Insurance Company. N.Y., N.Y.
Fidelity Brokerage Services, Inc., member NYSE, SIPC, and Fidelity
Insurance Agency, Inc. are the distributors.
82 Devonshire Street, Boston, MA 02109
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
a) Financial Statements included in Part B
The following financial statements of Empire Fidelity Investments Life
Insurance Company and of Empire Fidelity Investments Variable Annuity
Account A are filed in Part B.
Statement of Assets and Liabilities for Empire Fidelity Investments
Variable Annuity Account A as of December 31, 1996.
Statements of Operations and Changes in Net Assets for Empire Fidelity
Investments Variable Annuity Account I for year ended December 31, 1996 and
1995.
Report of Coopers & Lybrand on the Financial Statements of Empire Fidelity
Investments Variable Annuity Account A.
Balance Sheet of Empire Fidelity Investments Life Insurance Company as of
December 31, 1996 and 1995.
Statements of Income for Empire Fidelity Investments Life Insurance
Company for the Year Ended December 31, 1996 and 1995.
Statements of Changes in Stockholder's Equity for Empire Fidelity
Investments Life Insurance Company for the Year Ended December 31, 1996 and
1995.
Statements of Cash Flows for Empire Fidelity Investments Life Insurance
Company for the Year Ended December 31, 1996 and 1995.
Report of Coopers & Lybrand on Financial Statements of Empire Fidelity
Investments Life Insurance Company.
There are no financial statements included in Part A.
b) Exhibits
(1) Resolution of Board of Directors of Empire Fidelity Investments Life
Insurance Company establishing the Empire Fidelity Investments Variable
Annuity Account A. (Note 1).
(2) Not Applicable.
(3) (a) Distribution Agreement between Empire Fidelity Investments Life and
Fidelity Brokerage Services, Inc. (Note 1).
(4) (a) Specimen Variable Annuity Contract. (Note 2)
(c) Endorsement for Qualified Contracts. (Note 2)
(5) (a) Application for Variable Annuity Contract. (Note 2)
(6) (a) Charter of Empire Fidelity Investments Life. (Note 1)
(b) Bylaws of Empire Fidelity Investments Life. (Note 1)
(7) Not applicable.
(8) (a) Service Agreement between Empire Fidelity
Investments Life and Fidelity Investments Life. (Note 1)
(b) Service Agreement between Empire Fidelity
Investments Life and Fidelity Investments
Corporate Services. (Note 1)
(9) Opinion and consent of David J. Pearlman, as to the legality of
securities being issued. (Note 1)
(10) (a) Written consent of Coopers & Lybrand. (Note 1)
(b) Written consent of Jorden Burt Berenson & Johnson LLP
(Note 1)
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) (a) Form of Participation Agreement Between Empire Fidelity
Investments Life, Fidelity Distributors Corporation and Variable
Insurance Products Fund (Note 1)
(b) Form of Participation Agreement Between Empire Fidelity
Investments Life, Fidelity Distributors Corporation and Variable
Insurance Products Fund II (Note 1)
(15) (a) Powers of Attorney (Note 3)
___________________
(Note 1) Incorporated by reference to original registration statement filed
on Form N-4 on April 24, 1997, Reg. No. 33-42376, on behalf of Empire
Fidelity Investments Variable Annuity Account A.
(Note 2) Filed electronically herein
(Note 3) Incorporated by reference to Post-Effective Amendment No. 3 to
Registration Statement on Form N-4, Reg. No. 33-54924, on behalf of Empire
Fidelity Investments Variable Annuity Account A.
Item 25. Directors and Officers of the Depositor
The directors and officers of Empire Fidelity Investments Life are as
follows:
Directors of Empire Fidelity Investments Life
J. GARY BURKHEAD, Director
JAMES C. CURVEY, Director
ROBERT C. POZEN, Director
JOHN J. REMONDI, Director
RODNEY R. ROHDA, Director and Chairman
DAVID C. WEINSTEIN, Director and Secretary
DENIS M. McCARTHY, Director
ROY BALLENTINE, Director
PETER JOHANNSEN, Director
JOSHUA BERMAN, Director
MALCOLM MACKAY, Director
FLOYD L. SMITH, Director
The addresses of Roy Ballentine, Joshua Berman, Peter Johannsen , Malcolm
MacKay and Floyd L. Smith are 11 Depot Street, P.O.Box 1860, Wolfboro, New
Hampshire 03894; 919 Third Avenue, New York, New York 10022; One Post
Office Square, Boston, Massachusetts 02109, and 4 Peter Cooper Road, #9G,
New York, New York 10010 respectively. The principal business address of
each of the other above persons is 82 Devonshire Street, Boston,
Massachusetts 02109.
Executive Officers Who Are not Directors
Executive officers of Empire Fidelity Investments Life who are not
directors are as follows.
ALLAN BRANDON, Vice President and Chief Administrative Officer
DAVID J. PEARLMAN, Vice President, Secretary and General Counsel
The principal business address of Allan Brandon is One World Financial
Center, 200 Liberty Street, Tower A, New York, New York 10281. The
principal business address of Messrs. Kurtzer and Pearlman is 82 Devonshire
Street, Boston, Massachusetts 02109.
Item 26. Persons Controlled By or Under Common control with the Depositor
or Registrant.
See Exhibit 26 of the original registration statement filed on Form N-4 on
August 17, 1991, Reg. No. 33-42376, on behalf of Empire Fidelity
Investments Variable Annuity Account A.
Item 27. Number of Contract Owners.
As of December 31, 1996 there were 79 owners of Registrant's Qualified
Contracts and 45 owners of Registrant's Non-qualified Contracts.
Item 28. Indemnification.
FMR Corp. and its subsidiaries own a directors' and officers' liability
reimbursement contract (the "Policy"), issued by National Union Fire
Insurance Company, that provides coverage for "Loss" (as defined in the
Policy) arising from any claim or claims by reason of any breach of duty,
neglect, error, misstatement, misleading statement, omission or other act
done or wrongfully attempted by a person while he or she is acting in his
or her capacity as a director or officer. The coverage is provided to
these insureds, including Empire Fidelity Investments Life, to the extent
required or permitted by applicable law, common or statutory, or under
their respective charters or by-laws, to indemnify directors or officers
for Loss arising from the above-described matters. Coverage is also
provided to the individual directors or officers for such Loss, for which
they shall
not be indemnified, subject to relevant contract exclusions. Loss is
essentially the legal liability on claims against a director or officer,
including damages, judgements, settlements, costs, charges and expenses
(excluding salaries of officers or employees) incurred in the defense of
actions, suits or proceedings and appeals therefrom.
There are a number of exclusions from coverage. Among the matters excluded
are Losses arising as a result of (1) fines or penalties imposed by law or
other matters that may be deemed uninsurable under the law pursuant to
which Policy is construed, (2) claims brought about or contributed to by
the fraudulent, dishonest, or criminal acts of a director or officer, (3)
any claim made against the directors or officers for violation of any of
the responsibilities, obligations, or duties imposed upon fiduciaries by
the Employee Retirement Income Security Act of 1974 or amendments thereto,
(4) professional errors or omission, and (5) claims for an accounting or
profits in fact made from the purchase or sale by a director or officer of
any securities of the insured corporations within the meaning of section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any state law.
The limit of coverage of the Policy is $10 million, as an annual aggregate
limit, with 95% co-insurance for the first $1 million of coverage, and with
a deductible of $500,000 in the event that Empire Fidelity Investments Life
indemnifies the director or officer (with a maximum aggregate per loss
deductible of $25,000) if Empire Fidelity Investments Life does not
indemnify the director or officer.
New York law (N.Y. Bus. Corp. 722) provides, in part, that a corporation
may indemnify a director, officer, employee or agent against liability if
he acted in good faith and in a manner he reasonably believed to be in the
best interests of the corporation and, in respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The text of Article VI of Empire Fidelity Investment Life's By-Laws, which
relates to indemnification of the directors and officers, is as follows:
Section 6.1. Indemnification of Directors, Officers, Employees and Agents.
Any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including any action or suit by
or in the right of the Corporation to procure a judgement in its favor) by
reason of the fact that he is or was a director, officer, employee or agent
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall
be indemnified to the extent permitted by the laws of the State of New
York, against expenses (including attorney's fees), judgements, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with the defense of settlement of such action, suit or
proceeding. The indemnification expressly provided by statute in a
specific case shall not be deemed entitled under any lawful agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office, and shall continue as a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such person.
The Board of Directors may purchase and maintain insurance on behalf on
any person who is or was a director, officer, employee of agent of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture or trust or other enterprise
against any liability incurred by him in any such capacity or arising out
of his status as such, whether or not the Corporation would have the power
to indemnify against such liability.
Insofar as indemnification for liability arising under the Securities Act
of 1933 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 in connection with the securities being registered), the
Registrant will, unless in the opinion of is counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by its against is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 29. Principal Underwriters.
(a) Fidelity Brokerage Services, Inc. acts as distributor for other
variable life and variable annuity contracts registered by separate
accounts of EFILI, Fidelity Investments Life Insurance Company, Monarch
Life Insurance Company, and PFL Life Insurance Company.
(b)
Name and Principal Positions and Offices with Underwriter
Business Address
Roger T. Servison Director
Steven Akin Director and President
Rodney Rohda Director
Edward L. McCartney Executive Vice President
Thomas E. Lewis Executive Vice President
Bruce MacAlpine Executive Vice President
Shaugn S. Stanley Treasurer and Chief Financial Officer
Jeffrey R. Larsen Legal Counsel & Clerk
Linda Holland Compliance Officer
(c) Commissions and other compensation was received by the principal
underwriter.
See Item 24 (b) (3). No compensation was received by the principal
underwriter from the registrant or depositor during the registrant's or
depositor's last fiscal year.
The address for each person named in Item 29 is 82 Devonshire Street,
Boston, Massachusetts 02109.
Item 30. Location of Accounts and Records
The records regarding the Account required to be maintained by Section
31(a) of the Investment Company Act of 1940, and Rules 31a-1 to 31a-3
promulgated thereunder, are maintained at Empire Fidelity Investments Life
Insurance Company at One World Financial Center New York, New York 10281.
Item 31. Management Services
The contracts for management-related services between (a) Fidelity
Investments Life and Empire Fidelity Investments Life is summarized in Part
B. Payments under these contracts for 1996 and 1995 were $ 343,376 and
$297,600, respectively.
Item 32. Undertakings
(a) Registrant undertakes to file a post-effective amendment to this
Registration Statement as frequently as is necessary to ensure that the
audited financial statements in the Registration Statement are never than
16 months old for so long as payments under the variable annuity contracts
may be accepted.
(b) Registrant undertakes to include either (1) as part of any application
to purchase a contract offered by the prospectus, a space that an applicant
can check to request a Statement of Additional Information, or (2) a
postcard or similar written communication affixed to or included in a
prospectus that the applicant can remove to send for a Statement of
Additional Information.
(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available
under this Form promptly upon written or oral request.
(d) Registrant represents that it meets the definition of a "separate
account" under the federal securities laws.
(e) Empire Fidelity Investment Life Insurance Company hereby represents
that the aggregate charges under the variable annuity policy ("the
contract") offered by Empire Fidelity Investment Life Insurance Company are
reasonable in relation to services rendered, the expenses expected to be
incurred, and the risks assumed by Empire Fidelity Investment Life
Insurance Company
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, Empire Fidelity Investments Variable Annuity Account
A, certifies that it meets the requirements of the Securities Act Rule
485(b) for effectiveness of this Registration Statement and has caused this
Post-Effective Amendment No. 4 to the Registration Statement to be signed
on its behalf in the city of Boston and the Commonwealth of Massachusetts,
on this 24th day of April, 1997.
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
(Registrant)
By: EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(Depositor)
By: _________________________ Attest:_____________________
Rodney R. Rohda, Chairman and David J. Pearlman,
Chief Executive Officer Secretary
As required by the Securities Act of 1933 , this Registration Statement
has been signed below by the following persons in the capacities indicated
on this 24th day of April, 1997.
Signature Title
________________ Chairman and Director
Rodney R. Rohda (Chief Executive Officer)
)By:
) David J. Pearlman
________________ Director ) (Attorney-in-Fact)
J. Gary Burkhead )
)
________________ Director )
James C. Curvey )
)
________________ Director )
John J. Remondi )
)
________________ Director )
Robert C. Pozen )
)
)
_______________ Director )
Roy Ballentine )
)
_______________ Director )
Peter Johannsen )
)
_______________ Director )
Joshua Berman
)By: ______________
) David J. Pearlman
_______________ Director ) (Attorney-in-Fact)
Malcolm MacKay )
)
_______________ Director )
Denis M. McCarthy )
)
_______________ Director )
Floyd L. Smith )
)
_______________ Director )
David Weinstein )
EXHIBIT INDEX
Exhibit Sequential Page Number
(4) (a) Specimen Variable Annuity Contract. (Note 2)
(c) Endorsement for Qualified Contracts. (Note 2)
(5) (a) Application for Variable Annuity Contract. (Note 2)
(9) Opinion and consent of David J. Pearlman, as to C-
the legality of securities being issued
(10)(a) Written consent of Coopers & Lybrand. C-
(10)(b) Written consent of Jorden Burt Berenson & Johnson LLP C-
.
EXHIBIT 4(a)
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
SALT LAKE CITY, UTAH
SELF DIRECTED INCOME ANNUITY
VARIABLE AND/OR FIXED INCOME
NONPARTICIPATING
Fidelity Investments Life Insurance Company agrees to pay lifetime income
to the Annuitant, and the Joint Annuitant if any, beginning with the first
Annuity Income Date and to provide the other rights and benefits of this
Contract.
These agreements are subject to all the provisions of this Contract.
This Contract has been issued in return for the attached application and
the single purchase payment made.
ALL INCOME AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT.
Signed for the Company at its Executive Offices, Boston, Massachusetts
PRESIDENT SECRETARY
TEN DAY RIGHT TO RETURN THE CONTRACT
When this Contract is issued, you have 10 days after you receive it from
the Company to examine it. Within those 10 days you can return the
Contract to the Company or its agent for any reason. If you do, the
Contract will be canceled. We will promptly refund the greater of (1) your
purchase payment (without interest) and (2) the amount of your purchase
payment plus the investment performance of the Money Market Investment
Option.
PLEASE READ YOUR CONTRACT CAREFULLY
This is a legal contract between you and the Company.
GUIDE TO CONTRACT PROVISIONS
PAGE
Page
Contract Schedule 4
Definitions 5
General Provisions 7
Entire Contract
Misstatement of Date of Birth or Sex
Reports
Proof of Death
Proof of Survival
Protection of Proceeds
Termination
Nonparticipating
Assignment
Determination of Values
Written Notice to the Annuity Service Center
Purchase Payment 9
Purchase Payment
Net Purchase Payment
Allocation of Purchase Payment
The Variable Account 9
Variable Account
Investment Options
Charges Against the Investment Options
Net Investment Factor
Taxes
Transfers Among Investment Options
Postponement of Benefits
Reserved Rights
Death Benefit 12
Death Benefit
Owner(s), Annuitant, Joint Annuitant and Beneficiary(ies) 12
Owner(s)
Annuitant
Joint Annuitant
Beneficiary(ies)
Change of Beneficiary
Annuity Provisions 14
Annuity Income Dates
Annuity Income Options
Fixed Annuity Income
Variable Annuity Income
Combination Annuity Income
Annuity Income Unit Value
Determination of Variable Annuity Income
Exchange of Annuity Income Units
CONTRACT SCHEDULE
SELF DIRECTED INCOME ANNUITY
ANNUITY SERVICE CENTER
P.O. BOX 1306, BOSTON, MA 02104-9907
CONTRACT NUMBER Z00000000
CONTRACT DATE FEBRUARY 1, 1992
FIRST ANNUITY INCOME DATE JUNE 1, 1992
ANNUITANT WILLIAM PENN
DATE OF BIRTH 12/9/45
SEX MALE
JOINT ANNUITANT MARTHA PENN
DATE OF BIRTH 8/12/48
SEX FEMALE
SINGLE PURCHASE PAYMENT $25,000
VARIABLE PORTFOLIOS
MONEY MARKET EQUITY-INCOME
HIGH INCOME GROWTH
ASSET MANAGER OVERSEAS
INVESTMENT GRADE BOND INDEX 500
FREQUENCY OF ANNUITY INCOME:
GUARANTEE PERIOD:
REDUCED ANNUITY INCOME PERCENTAGE AFTER DEATH OF ANNUITANT OR JOINT
ANNUITANT:
PERCENTAGE ALLOCATION OF PURCHASE PAYMENT TO PROVIDE:
FIXED ANNUITY INCOME: VARIABLE ANNUITY INCOME:
FIXED INCOME AMOUNT ON FIRST ANNUITY INCOME DATE:
ESTIMATED VARIABLE INCOME AMOUNT FOR FIRST ANNUITY INCOME DATE:
BENCHMARK RATE OF RETURN:
ANNUAL: DAILY FACTOR:
CONTRACT SCHEDULE
SELF DIRECTED INCOME ANNUITY
ANNUITY INCOME OPTION:
SINGLE LIFE ANNUITY
We will provide annuity income, beginning with the first Annuity Income
Date, for your entire life. Annuity income stops when you are no longer
living.
SINGLE LIFE ANNUITY WITH A GUARANTEED NUMBER OF YEARS OF ANNUITY INCOME
We will provide annuity income, beginning with the first Annuity Income
Date, for your entire life or for a guaranteed number of years, whichever
is longer. The guaranteed number of years you have selected is shown on
the Contract Schedule page.
If you die on or after the first Annuity Income Date and before the end of
the guarantee period, we will provide the remaining annuity income to the
Beneficiary(ies) according to the terms of this Contract.
JOINT AND SURVIVOR ANNUITY WITH FULL ANNUITY INCOME TO THE SURVIVOR
We will provide annuity income, beginning with the first Annuity Income
Date, jointly to you and the Joint Annuitant while you are both living.
After the death of either of you, we will continue to provide the full
amount of annuity income to the survivor. Annuity income stops when both
you and the Joint Annuitant are no longer living.
If either you or the Joint Annuitant die before the first Annuity Income
Date, we will adjust the annuity income so that it equals what would have
been paid under a single life annuity issued to the survivor.
JOINT AND SURVIVOR ANNUITY WITH FULL ANNUITY INCOME TO THE SURVIVOR AND A
GUARANTEED NUMBER OF YEARS OF ANNUITY INCOME
We will provide annuity income, beginning with the first Annuity Income
Date, while either you or the Joint Annuitant is still living or for a
guaranteed number of years, whichever is longer. We will provide full
annuity income jointly to you and the Joint Annuitant while you are both
living and full annuity income to the survivor after either one of you has
died. The guaranteed number of years you have selected is shown on the
Contract Schedule page.
If either you or the Joint Annuitant die before the first Annuity Income
Date, we will adjust the annuity income so that it equals what would have
been paid under a single life annuity with a guarantee period issued to the
survivor. If the person who dies (you or the Joint Annuitant) is an Owner
and the survivor is not the deceased Owner's spouse, we will adjust the
guarantee period, as required by law, so that it is not longer than the
life expectancy of the survivor. This may result in a shorter guarantee
period and a higher amount of annuity income.
If you and the Joint Annuitant both die on or after the first Annuity
Income Date and before the end of the guarantee period we will provide the
remaining annuity income to the Beneficiary(ies) according to the terms of
this Contract.
JOINT AND SURVIVOR ANNUITY WITH REDUCED ANNUITY INCOME TO THE SURVIVOR
We will provide full annuity income, beginning with the first Annuity
Income Date, jointly to you and the Joint Annuitant while you are both
living and reduced annuity income to the survivor. The Owner(s) choose the
percentage of annuity income that will be paid to the survivor compared to
the amount it would have been with both persons still living. The choice
is shown on the Contract Schedule page.
If either you or the Joint Annuitant die before the first Annuity Income
Date, we will adjust the annuity income so that it equals what would have
been paid under a single life annuity issued to the survivor.
JOINT AND SURVIVOR ANNUITY WITH REDUCED ANNUITY INCOME TO THE SURVIVOR AND
A GUARANTEED NUMBER OF YEARS OF ANNUITY INCOME
We will provide annuity income, beginning with the first Annuity Income
Date, while either you or the Joint Annuitant is living or for a guaranteed
number of years, whichever is longer. The guaranteed number of years you
have selected is shown on the Contract Schedule page. We will provide full
annuity income jointly to you and the Joint Annuitant while you are both
living and reduced annuity income to the survivor. The Owner(s) choose the
percentage of annuity income that will be paid to the survivor compared to
the amount it would have been with both persons still living. The choice
is shown on the Contract Schedule page.
If either you or the Joint Annuitant die before the first Annuity Income
Date, we will adjust the annuity income so that it equals what would have
been paid under a single life annuity with a guarantee period issued to the
survivor. If the person who dies (you or the Joint Annuitant) is an Owner
and the survivor is not the deceased Owner's spouse, we will adjust the
guarantee period, as required by law, so that it is not longer than the
life expectancy of the survivor. This may result in a shorter guarantee
period and a higher amount of annuity income.
If you and the Joint Annuitant both die on or after the first Annuity
Income Date and before the end of the guarantee period we will provide the
remaining annuity income to the Beneficiary(ies) according to the terms of
this Contract. If you and the Joint Annuitant die at the same time we will
guarantee your Beneficiary(ies) the reduced annuity income that would have
been paid to you or the Joint Annuitant had one of you died before the
other.
JOINT AND SURVIVOR ANNUITY WITH FULL ANNUITY INCOME TO THE ANNUITANT IF THE
JOINT ANNUITANT DIES, BUT REDUCED ANNUITY INCOME TO THE JOINT ANNUITANT IF
THE ANNUITANT DIES
We will provide full annuity income, beginning with the first Annuity
Income Date, jointly to you and the Joint Annuitant while you are both
living. After the death of either of you we will continue to provide
annuity income to the survivor, but annuity income will be reduced if the
Joint Annuitant is the survivor. Annuity income will not be reduced if you
are the survivor. The Owner(s) choose the percentage of annuity income
that will be paid to the Joint Annuitant survivor compared to the amount it
would have been were the Annuitant still alive. The choice is shown on the
Contract Schedule page.
If either you or the Joint Annuitant die before the first Annuity Income
Date, we will adjust the annuity income so that it equals what would have
been paid under a single life annuity issued to the survivor.
JOINT AND SURVIVOR ANNUITY WITH FULL ANNUITY INCOME TO THE ANNUITANT IF THE
JOINT ANNUITANT DIES, BUT REDUCED ANNUITY INCOME TO THE JOINT ANNUITANT IF
THE ANNUITANT DIES, AND A GUARANTEED NUMBER OF YEARS OF ANNUITY INCOME
We will provide annuity income, beginning with the first Annuity Income
Date, while either you or the Joint Annuitant is living or for a guaranteed
number of years, whichever is longer. The guaranteed number of years you
have selected is shown on the Contract Schedule page. We will provide full
annuity income jointly to you and the Joint Annuitant while you are both
living. After the death of either of you we will continue to provide
annuity income to the survivor, but annuity income will be reduced if the
Joint Annuitant is the survivor. Annuity income will not be reduced if you
are the survivor. The Owner(s) choose the percentage of annuity income
that will be paid to the Joint Annuitant compared to the amount it would
have been with the Annuitant still living. The choice is shown on the
Contract Schedule page.
If either you or the Joint Annuitant die before the first Annuity Income
Date, we will adjust the annuity income so that it equals what would have
been paid under a single life annuity with a guarantee period issued to the
survivor. If the person who dies (you or the Joint Annuitant) is an Owner
and the survivor is not the deceased Owner's spouse, we will adjust the
guarantee period, as required by law, so that it is not longer than the
life expectancy of the survivor. This may result in a shorter guarantee
period and a higher amount of annuity income.
If you and the Joint Annuitant both die on or after the first Annuity
Income Date and before the end of the guarantee period we will provide the
remaining annuity income to the Beneficiary(ies) according to the terms of
this Contract. If you and the Joint Annuitant die at the same time we will
guarantee your Beneficiary(ies) the reduced annuity income that would have
been paid to the Joint Annuitant had you died before the Joint Annuitant.
DEFINITIONS
ANNUITANT
You are the Annuitant. You and the Joint Annuitant, if any, receive
lifetime annuity income. Either you or the Joint Annuitant generally must
be no older than 85 years of age on the Contract Date. You must be an
Owner.
ANNUITY INCOME DATES
The dates we determine the amount of annuity income to the Annuitant, the
Joint Annuitant, if any, or the Beneficiary. The first Annuity Income Date
is shown on the Contract Schedule page. Subsequent Annuity Income Dates
will be monthly, quarterly, semi-annual or annual as stated on the Contract
Schedule page.
ANNUITY INCOME UNIT
A unit of measure used to calculate the amount of variable annuity income.
BENCHMARK RATE OF RETURN
The Benchmark Rate of Return is the net investment return needed to
maintain a level income from one Annuity Income Date to the next. The
Benchmark Rate of Return you have selected is stated on the Contract
Schedule page. It only applies to the variable income portion of this
Contract.
BENEFICIARY(IES)
The person(s) who may receive certain benefits under this Contract when
there is no longer a living Annuitant or Joint Annuitant.
THE COMPANY, WE OR US
Fidelity Investments Life Insurance Company.
CONTRACT DATE
The date the Contract becomes effective. Your Contract Date is shown on
the Contract Schedule page.
FIXED ANNUITY INCOME
Fixed annuity income provides a guaranteed amount of income that will be
the same on each Annuity Income Date, unless the Contract calls for a
reduction in annuity income upon the death of the Annuitant or Joint
Annuitant.
FREE LOOK PERIOD
The period during which the Owner or Owners have the right to return the
Contract for a refund. AFTER THIS PERIOD, THE CONTRACT MAY NOT BE RETURNED
FOR A REFUND AT ANY TIME.
INVESTMENT OPTIONS
The Subaccounts.
JOINT ANNUITANT
The Joint Annuitant, if any, is named on the application. You and the
Joint Annuitant, if any, receive lifetime annuity income. You or the Joint
Annuitant generally must be no older than 85 years of age on the Contract
Date. The Joint Annuitant may, but need not be, an Owner.
OWNER(S)
The person or persons named as owners on the application. Each Owner must
be the Annuitant or the Joint Annuitant. Each Owner has rights as
described in the Contract.
SUBACCOUNTS
The portfolios of the Variable Account. The Subaccounts available on the
Contract Date are named on the Contract Schedule page.
VALUATION DAY
A Valuation Day is:
(a) Each day the New York Stock Exchange is open for trading; and
(b) Any other day on which the Securities and Exchange Commission requires
mutual funds or unit investment trusts to be valued.
VALUATION PERIOD
The interval of time beginning at the close of business on each Valuation
Day and ending at the close of business on the next Valuation Day.
VARIABLE ANNUITY INCOME
Variable annuity income provides income which varies with the investment
experience of the selected Investment Options. The amount of income is not
guaranteed.
WRITTEN REQUEST
A request in a form acceptable to the Company, signed by the person making
it and delivered to the Company at the Annuity Service Center.
YOU
The Annuitant. The Annuitant is always an Owner.
GENERAL PROVISIONS
ENTIRE CONTRACT
This Contract and the application, a copy of which is attached, are the
entire contract between you and the Company.
No change in or waiver of the provisions of the Contract is valid unless
the change or waiver is signed by the President or Secretary of the
Company.
MISSTATEMENT OF DATE OF BIRTH OR SEX
If the Annuitant's or Joint Annuitant's date of birth or sex has been
misstated, we will change the benefits to those which the Net Purchase
Payment would have purchased had the correct date of birth and sex been
stated. If a misstatement is not discovered until after the first Annuity
Income Date we will take the following action: (1) if we provided too much
annuity income, we will add interest at the rate of 6% per year compounded
annually and withhold annuity income on subsequent Annuity Income Dates
until we have recovered the excess; (2) if we provided too little annuity
income, we will make up the balance plus interest at the rate of 6% per
year compounded annually in a lump sum.
If we are providing annuity income under an option that calls for reduced
annuity income following your death or the death of the Joint Annuitant,
the survivor must inform the Company of the death of the other. If too
much annuity income is provided because of failure to notify the Company,
the Company may withhold annuity income on subsequent Annuity Income Dates
until it has recovered any excess amounts.
REPORTS
If part or all of your Purchase Payment is allocated to variable annuity
income, the Company will send you a statement showing the number of Annuity
Income Units in each variable Investment Option, and the value of each
Annuity Income Unit, at least once each year, and each time you transfer
Annuity Income Units among the Investment Options.
PROOF OF DEATH
Any Beneficiary claiming an interest in the Contract must provide the
Company in writing with due proof of death of the Annuitant and the Joint
Annuitant (if any) at the Annuity Service Center. We will not be
responsible for any annuity income paid to the Annuitant or the Joint
Annuitant (if any) before we receive due proof of death at the Annuity
Service Center.
PROOF OF SURVIVAL
Where provision of annuity income under this Contract depends on a person
being alive on a given date, proof of survival may be required by the
Company prior to making any payments.
PROTECTION OF PROCEEDS
To the extent allowed by law, annuity income is not subject to the claims
of creditors or to legal process.
TERMINATION
This Contract will terminate on the later of:
(a) The time when you and the Joint Annuitant, if any, are no longer alive;
and
(b) The final guaranteed Annuity Income Date, if any.
This may not apply if a supplemental contract is issued to a Beneficiary.
NONPARTICIPATING
This Contract does not participate in the profits or surplus of the
Company.
ASSIGNMENT
You may not assign this Contract.
DETERMINATION OF VALUES
The method of determination by the Company of the number and value of
Annuity Income Units and other values shall be binding upon each Owner, the
Annuitant, the Joint Annuitant (if any) and each Beneficiary.
CONTRACT TO CONFORM TO INTERNAL REVENUE CODE
All terms of this Contract will be interpreted in accordance with the
applicable provisions of section 72(s) of the Internal Revenue Code. We
reserve the right to make changes to the Contract in order to conform to
the provisions of the Internal Revenue Code.
WRITTEN NOTICE TO THE ANNUITY SERVICE CENTER
Whenever any notice is required under the Contract, the Company will not be
liable for any action it takes before proper notice is received at the
Annuity Service Center.
PURCHASE PAYMENT
PURCHASE PAYMENT
You purchase this Contract with a single Purchase Payment. You may not
make additional Purchase Payments.
NET PURCHASE PAYMENT
The Net Purchase Payment is the Purchase Payment less any state, federal,
or local taxes related to the amount of the Purchase Payment.
ALLOCATION OF PURCHASE PAYMENT
The allocation of your Net Purchase Payment between fixed and variable
annuity income is shown on the Contract Schedule page. Any portion of your
Purchase Payment allocated to fixed annuity income will always remain
allocated to fixed annuity income. Similarly, any portion of your purchase
payment allocated to variable annuity income will always remain allocated
to variable annuity income, but you can reallocate the variable portion of
your Contract among the various Investment Options at any time.
The entire portion of the Net Purchase Payment that you allocate to the
Variable Account will be invested in the Money Market Investment Option
until the end of the Free Look Period. Any amount in the Money Market
Investment Option will then be transferred to the Investment Options in the
percentages the Owner(s) selected. ONCE THE FREE LOOK PERIOD EXPIRES, THE
CONTRACT MAY NOT BE RETURNED FOR A REFUND.
THE VARIABLE ACCOUNT
VARIABLE ACCOUNT
The Company established the Fidelity Investments Variable Annuity Account I
("the Variable Account") to support the operation of this Contract and
other variable annuity contracts the Company may offer.
The Company owns the assets in the Variable Account. Income, gains and
losses, whether or not realized, from assets allocated to the Variable
Account will be credited to or charged against the Variable Account without
regard to the Company's other income, gains or losses.
Assets equal to the reserves and other liabilities of the Variable Account
will not be charged with liabilities that arise from any other business the
Company conducts. The Company has the right to transfer to its general
account any assets of the Variable Account which are in excess of those
reserves and liabilities.
All transactions (e.g. transfers) are executed as of the date the request
is received in good order at the Annuity Service Center. All values that
depend on the performance of an Investment Option will be determined as of
the end of the Valuation Period in which the transaction is executed.
When you request a transfer from an Investment Option, the crediting of the
amount transferred may be delayed. This can occur if the Investment Option
you are transferring from invests in an investment portfolio which is
permitted under federal securities regulation to delay payment of proceeds
to the Investment Option. During this period, the amount transferred will
be uninvested.
The Variable Account is registered with the Securities and Exchange
Commission as a unit investment trust under the Investment Company Act of
1940. The Variable Account is also subject to the laws of the State of
Utah.
INVESTMENT OPTIONS
On the Contract Date the Variable Account consists of the Investment
Options listed on the Contract Schedule. The Company reserves the right to
delete any Investment Option of the Variable Account or to add new
Investment Options. The Variable Account may invest in mutual funds, unit
investment trusts and other investment portfolios which the Company
determines to be suitable for this Contract. The assets of the Variable
Account are valued each Valuation Period. Each Investment Option invests
in a designated investment portfolio. Interests in an investment portfolio
are purchased for an Investment Option at their net asset value.
You will share only the income, gains and losses of the Investment Options
to which reserves for the Contract have been allocated. The values and
benefits of this Contract depend on the investment performance of the
Investment Options you select. The Company does not guarantee the
investment performance of the investment portfolios. You bear the full
investment risk for amounts allocated to Investment Options.
The investment policies of an Investment Option may not be changed without
all necessary approvals of the Utah Insurance Department.
The Company retains the right to make additions to, deletions from or
substitutions for any of the investment portfolios in which the Investment
Options invest. Such an addition, deletion or substitution would be
subject to all necessary approvals.
CHARGES AGAINST THE INVESTMENT OPTIONS
In determining Annuity Income Unit values, the Company makes a daily charge
equivalent to an effective annual rate of 1% against the assets of each
Investment Option.
NET INVESTMENT FACTOR
The Net Investment Factor is an index used to measure the investment
performance of an Investment Option from one Valuation Period to the next.
The Net Investment Factor can be greater or less than one; therefore, the
value of an Annuity Income Unit may increase or decrease.
The Net Investment Factor for each Investment Option for a Valuation Period
is determined by adding (a) and (b), subtracting (c) and then dividing the
result by (a) where:
(a) Is the value of the assets at the end of the preceding Valuation
Period;
(b) Is the investment income and capital gains, realized or unrealized,
credited during the current Valuation Period;
(c) is the sum of:
(1) The capital losses, realized or unrealized, charged during the current
Valuation Period plus any amount charged or set aside for taxes during the
current Valuation Period;
PLUS
(2) The deduction from the Investment Option during the current Valuation
Period representing the daily charge referenced above equivalent to an
effective annual rate of 1%.
TAXES
The earnings of the Variable Account are taxed as part of the operations of
the Company. At the present time, the Company does not expect to incur
taxes on earnings of any Investment Option to the extent that earnings are
credited under the Contract. If the Company incurs taxes due to the
operation of the Variable Account, it may make charges for such taxes
against the Investment Options.
TRANSFERS AMONG INVESTMENT OPTIONS
You may transfer amounts among the Investment Options without charge by
request to the Annuity Service Center. You must tell us the percentage you
want in each Investment Option for your new allocation. The Company
reserves the right to limit the number of transfers among Investment
Options to not fewer than six transfers per calendar year.
POSTPONEMENT OF BENEFITS
We will usually send annuity income within seven days of the Annuity Income
Date. We will usually send any lump sum distributions to Beneficiaries
within seven days of the day we receive proper notice. We will usually
send any Death Benefit within seven days after we receive due proof of your
death (for a single life Contract) or the deaths of you and the Joint
Annuitant (for a joint life Contract). However, we may delay sending these
amounts if (1) the disposal or valuation of the Variable Account's assets
is not reasonably practicable because the New York Stock Exchange is closed
for other than a regular holiday or weekend, trading is restricted by the
SEC, or the SEC declares that an emergency exists; or (2) the SEC by order
permits postponement for any other reason.
RESERVED RIGHTS
The Company reserves the right to:
(a) Combine the Variable Account with other variable accounts.
(b) Deregister the Variable Account under the Investment Company Act of
1940 if registration is no longer required.
(c) Operate the Variable Account as a management investment company under
the Investment Company Act of 1940 or in any other form allowed by law.
(d) Make changes required by any change in the Investment Company Act of
1940.
DEATH BENEFIT
DEATH BENEFIT
If you and the Joint Annuitant, if any, are not alive on the first Annuity
Income Date the Contract will be canceled and we will make a refund equal
to your Purchase Payment to your Beneficiary or Beneficiaries.
OWNER(S), ANNUITANT, JOINT ANNUITANT AND BENEFICIARY(IES)
OWNER
After this Contract is issued, each Owner named in the application has the
following rights: (a) the right to change any Beneficiary; (b) the right to
cancel the Contract during the Free Look Period; (c) the right to
reallocate among the Investment Options once the Free Look Period has
ended; and (d) the right to instruct us how to vote shares of an investment
portfolio attributable to the Contract.
These rights will pass from the last surviving Owner to the Joint Annuitant
(if any), if still alive. When no Owner or Joint Annuitant is still alive,
each Beneficiary will have the right (a) to reallocate among the Investment
Options; and (b) to instruct us how to vote shares of an investment
portfolio attributable to the Contract with respect to his or her share of
annuity income.
ANNUITANT
You are the Annuitant and have the right to receive annuity income under
the terms of the Contract. You also have rights as an Owner as described
above.
JOINT ANNUITANT
The Joint Annuitant, if any, has the right to receive annuity income
jointly with you under the terms of the Contract. The Joint Annuitant may
also be an Owner initially, or succeed to the rights of the Owner(s) as
described above.
BENEFICIARY
You name one or more Beneficiaries on the application. You may change
Beneficiaries later, unless you have designated an irrevocable Beneficiary,
in which case we will require the written consent of the irrevocable
Beneficiary. The Beneficiary will receive a refund of the Purchase Payment
if you and the Joint Annuitant, if any, are not living on the first Annuity
Income Date. The Beneficiary or Beneficiaries will receive any remaining
guaranteed annuity income if neither you nor the Joint Annuitant (if any)
survives to the end of the guarantee period. Surviving Beneficiaries will
receive equal shares unless you have indicated otherwise on your
application. If no Beneficiary survives you and the Joint Annuitant (if
any) and the guarantee period has not ended, we will provide a lump sum to
the estate of the last to die of you and the Joint Annuitant.
The Beneficiary has choices if you (and the Joint Annuitant, if any) die
before the end of the guarantee period:
The Beneficiary may choose (a) to continue receiving annuity income on each
remaining Annuity Income Date, or (b) to receive a lump sum instead. The
Beneficiary must notify us within 60 days of the date we receive notice of
the relevant death to elect a lump sum. Otherwise, the Beneficiary will
receive annuity income for the remaining guaranteed Annuity Income Dates.
If a Beneficiary receiving annuity income dies, a lump sum will be provided
to the Beneficiary's estate. The fixed annuity income portion of any lump
sum will be the present value of the annuity income for the remaining
guaranteed Annuity Income Dates, discounted at a rate that is one percent
greater than the ten year United States Treasury Bond rate on the day we
receive due proof of the Beneficiary's death at the Annuity Service Center.
The variable annuity income portion will be the present value of the
annuity income over the remaining guaranteed Annuity Income Dates, based on
interest compounded annually at the Benchmark Rate of Return that we used
in determining the annuity income on the first Annuity Income Date.
If we believe that the first annuity income amount due to any Beneficiary
will be less than $50, we may instead provide a lump sum for the value of
all remaining annuity income. The amount of the lump sum will be
determined on the same basis as described above for other lump sums.
CHANGE OF BENEFICIARY
A change of Beneficiary must be in written form satisfactory to the
Company. The change will not be effective until the form is received by
the Company at the Annuity Service Center.
ANNUITY PROVISIONS
ANNUITY INCOME DATES
The first Annuity Income Date you selected is shown on the Contract
Schedule page. We provide annuity income beginning with the first Annuity
Income Date. The first Annuity Income Date generally may be no earlier
than 30 days and in any event no more than one year after the Contract
Date. The first Annuity Income Date must be either the first or the
fifteenth day of a month. All subsequent Annuity Income Dates will be on
the same day of the month as the first Annuity Income Date. The frequency
of Annuity Income Dates you have selected is shown on the Contract Schedule
page.
ANNUITY INCOME OPTIONS
The Annuity Income Option you selected is shown on the Contract Schedule
page. We will provide annuity income to you, and the Joint Annuitant, if
any, listed there. If a guarantee period is also indicated on the Contract
Schedule page and you, and the Joint Annuitant, if any, do not live past
the guarantee period, any remaining annuity income will be provided to the
Beneficiary(ies).
FIXED ANNUITY INCOME
Fixed annuity income provides a guaranteed amount of income that will be
the same on each Annuity Income Date, unless the Contract calls for a
reduction in annuity income upon the death of the Annuitant or Joint
Annuitant.
VARIABLE ANNUITY INCOME
Variable annuity income provides income which varies with the investment
experience of the selected Investment Options. The amount of income is not
guaranteed.
COMBINATION ANNUITY INCOME
A combination of fixed and variable annuity income provides a portion of
income which is guaranteed in amount and a portion which will vary in
amount according to the investment experience of the selected Investment
Options.
ANNUITY INCOME UNIT VALUE
The Annuity Income Unit Value for each Investment Option for any Valuation
Period is equal to (a) multiplied by (b) multiplied by (c) where:
(a) Is the Net Investment Factor for the Valuation Period for which the
Annuity Income Unit Value is being calculated;
(b) Is the Annuity Income Unit Value for the preceding Valuation Period;
and
(c) Is the daily Benchmark Rate of Return factor (shown on the Contract
Schedule page) adjusted for the number of days in the Valuation Period.
DETERMINATION OF VARIABLE ANNUITY INCOME
The portion of your Purchase Payment that you allocate to variable annuity
income initially purchases Free Look Units. The value of the Free Look
Units reflects the Investment performance of the Money Market Investment
Option. We will determine the amount of Free Look Units purchased on the
Contract Date based upon (a) the age and sex of the Annuitant (and the
Joint Annuitant, if any); (b) the type of annuity income you choose; (c)
the frequency of Annuity Income Dates you choose; (d) the first Annuity
Income Date you choose; (e) the Benchmark Rate of Return you choose; and
(f) the value of the Free Look Units on the Contract Date. At the end of
the Free Look Period, the Free Look Units will be exchanged for Annuity
Income Units in the Investment Options you specified.
Variable annuity income is calculated based on the Annuity Income Units
credited to the Investment Options. Variable annuity income for an Annuity
Income Date will be equal to the amount we determine by multiplying the
number of Annuity Income Units by the value of an Annuity Income Unit on
that date. Variable annuity income depends upon the investment experience
of the Investment Options.
If you select a combination fixed and variable annuity income, we will
guarantee a minimum annuity income amount for each Annuity Income Date.
The remainder will vary according to the investment experience of the
Investment Options.
EXCHANGE OF ANNUITY INCOME UNITS
Annuity Income Units of any Investment Option may be exchanged for units of
any other Investment Option by request to the Annuity Service Center. The
exchange, which must be in accordance with the Company's then current
rules, will be effective as of the end of the Valuation Period in which the
request is received and will affect payments determined after that
Valuation Period. The exchange will be based on the relative value of each
Investment Option's Annuity Income Units.
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
SALT LAKE CITY, UTAH
SELF DIRECTED INCOME ANNUITY
VARIABLE AND/OR FIXED INCOME
NONPARTICIPATING
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE
NOT GUARANTEED AS TO DOLLAR AMOUNT.
EXHIBIT 5(a)
Fidelity Investments Life Insurance Company
APPLICATION FOR SELF DIRECTED INCOME ANNUITY
1. WHO WILL BE THE ANNUITANT/OWNER?
Name __________________ Date of Birth _______________
Address __________________ Sex _______________
City, State __________________ Social Security Number _______________
Zip Code __________________ Daytime Telephone Number _______________
2. IF THERE IS A JOINT ANNUITANT, WILL THE JOINT ANNUITANT BE AN OWNER?
YES NO
3. WHO IS THE JOINT ANNUITANT (if any)?
Name __________________ Date of Birth _______________
Address __________________ Sex _______________
City, State __________________ Social Security Number _______________
Zip Code __________________ Daytime Telephone Number _______________
Relationship to Annuitant: _______________
4. IS THIS CONTRACT AN IRA ROLLOVER?
Yes No
5. HOW WILL YOU PAY FOR THIS CONTRACT?
A. Check for $ ____________ is enclosed made payable to Fidelity
Investments
Life Insurance Co.
B. Exchange of shares from ________________________________
Fidelity Fund Number/Fidelity Account Number
in ________________ registered to _____________________________
Fund Name Name
All shares OR $ __________ worth of shares.
A signature guarantee is required ONLY for payment by exchange of Fidelity
mutual fund shares that are not registered to you. It must be by a
national bank or state chartered commercial bank or trust company (except
by a savings bank) or by a member firm of the New York, American, Boston,
Midwest or Pacific Stock Exchange.
Share Owner Authorization Joint Owner Authorization
X X
Signature Guarantee
Stamp and Signature
C. _____ Exchange of another life insurance or annuity contract (1035
Exchange).
6. PLEASE SELECT ONE OF THE FOLLOWING ANNUITY INCOME OPTIONS. (If funds
from this annuity originally came from a rollover or company pension plan
there may be limitations.)
(check ONE of the following)
SINGLE LIFE ANNUITY OR JOINT AND SURVIVOR ANNUITY WITH SURVIVOR RECEIVING
Full Annuity Income
Two-thirds of Full Annuity Income
One-half of Full Annuity Income
DO YOU WANT A GUARANTEE PERIOD?
Yes No
If yes, how many years? _______
(Must be at least 5 but not more than 30 years)
7. WHEN WOULD YOU LIKE YOUR FIRST ANNUITY INCOME DATE TO BE? ___ /1/ __ or
__ /15/ ___
(This date MUST be either the 1st or 15th day of the month.)
How frequently do you want your income deposited into your checking
account?
Monthly Quarterly Semi-annually Annually
If you wish to receive a check or other mode of payment instead of direct
deposit, please indicate this in the Special Request Section.
8. HOW WOULD YOU LIKE YOUR PURCHASE PAYMENT ALLOCATED BETWEEN FIXED AND
VARIABLE INCOME? ONCE SELECTED, THIS ALLOCATION CANNOT BE CHANGED.
Fixed Variable
___ 0% 100%
___ 25% 75%
___ 50% 50%
___ 75% 25%
___ 100% 0%
HOW WOULD YOU LIKE THE VARIABLE PORTION ALLOCATED? (In whole numbers of
not less than 10%) TRANSFERS AMONG THE VARIABLE PORTFOLIOS ARE ALLOWED
EVEN AFTER INCOME BEGINS.
Asset Manager _____%
Money Market _____%
Investment Grade Bond _____%
High Income _____%
Equity-Income _____%
Index 500 _____%
Growth _____%
Overseas _____%
Other _____%
TOTAL: 100 %
I understand the entire portion of any net purchase payment that I allocate
to the Variable Account will be invested in the Money Market Portfolio
until the end of the Free Look period.
9. WHICH BENCHMARK RATE OF RETURN WOULD YOU LIKE?
3.5% (conservative) 5% (Moderate)
10. WHO WILL BE THE BENEFICIARY(IES) OF THIS CONTRACT?
Please list the name and relationship to the Annuitant.
BENEFICIARY:
Name __________________________ Relationship
_______________________________
CONTINGENT BENEFICIARY:
Name: __________________________ Relationship
_______________________________
_____________________________________________________________
11. WILL THIS CONTRACT REPLACE OR CHANGE ANY EXISTING LIFE INSURANCE OR
ANNUITIES?
No Yes (If yes, please list below)
______________________________ __________________ ____________
Company Name Contract or Policy Number Estimated Value
12. SPECIAL REQUESTS
13. PLEASE READ THESE SECTIONS AND SIGN BELOW
SUITABILITY
I HAVE RECEIVED AND READ THE PROSPECTUS. THE ANNUITY INCOME, WHEN BASED ON
THE VARIABLE PORTFOLIOS, MAY INCREASE OR DECREASE ON ANY DAY DEPENDING UPON
THE INVESTMENT RESULTS AND NO MINIMUM ANNUITY INCOME IS GUARANTEED. ALL
VALUES UNDER THE VARIABLE ANNUITY PROVISIONS ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT.
If this Contract is for an IRA rollover, I have received and understand the
Disclosure Statement. If I am opening an IRA with a distribution from an
employer-sponsored retirement plan, I certify that such distribution is a
partial or qualified total distribution which qualifies for rollover
treatment and I irrevocably elect to treat this contribution as a rollover
contribution. I am of legal age to enter into this agreement. I certify
under penalties of perjury that my Social Security Number listed on this
application is correct.
AGREEMENT
Each signer agrees that to the best of his or her knowledge and belief, all
statements and answers on this application are complete and true and may be
relied upon in issuing the contract. The answers will form a part of any
contract issued, and no registered representative has the authority to
modify this agreement or waive any of the Company's rights or requirements.
The company will furnish any information that may be currently required by
the jurisdiction in which this policy is delivered.
I recognize that neither Fidelity Investments Life Insurance Company nor
Fidelity Brokerage Services, Inc. is a bank. The annuity is not backed or
guaranteed by any bank or insured by the FDIC.
Signed at
City _________________ State _______ on _______________ (date).
Annuitant/Owner ___________________________
Joint Annuitant (if an Owner) ____________________________
April 24, 1997
Board of Directors
Empire Fidelity Investments Life Insurance Company
200 Liberty Street
One World Financial Center
New York, N.Y. 10281
Ladies and Gentlemen:
In my capacity as Associate General Counsel of FMR Corp., I have provided
legal advice to Empire Fidelity Investments Life Insurance Company ("Empire
Fidelity Life") with respect to the establishment of Empire Fidelity
Investments Variable Annuity Account A (the "Account") pursuant to section
4240 of the New York Insurance Law. The Account was established by Empire
Fidelity Life on July 15, 1991 for the investment of assets held under
certain variable annuity contracts (the "Contracts"). I have participated
in the preparation and review of Post-Effective Amendment No. 4 to the
Registration Statement on Form N-4 for the registration of the Contracts
with the Securities and Exchange Commission under the Securities Act of
1933, Reg. No. 33-54924 and the registration of the Account under the
Investment Company Act of 1940.
I am of the following opinion:
(1) Empire Fidelity Life is duly organized and validly existing under the
laws of the State of New York.
(2) The Account is duly created and validly existing as a separate account
of Empire Fidelity Life under the laws of New York.
(3) The portion of the assets to be held in the Account equal to the
reserve and other liabilities for variable benefits under the Contracts is
not chargeable with liabilities arising out of any other business Empire
Fidelity Life may conduct.
(4) The Contracts, when issued as set forth in the Registration Statement,
will be legal and binding obligations of Empire Fidelity Life in accordance
with their terms.
In arriving at the foregoing opinion, I have made such examination of law
and examined such records and other documents as I judged to be necessary
or appropriate.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement, and to the reference to my name under the heading
"Legal Matters" in the Statement of Additional Information.
Very truly yours,
David J. Pearlman
April 22, 1997
Empire Fidelity Investments Life Insurance Company
Empire Fidelity Investments Variable Annuity Account A
82 Devonshire Street
Boston, Massachusetts 02109
Re: Registration No. 33-54924
Ladies and Gentlemen:
We hereby consent to the reference to our name under the caption "Legal
Matters" in the Statement of Additional Information contained in
Post-Effective Amendment No. 4 to the Registration Statement on Form N-4
(File No. 33-54924) for Empire Fidelity Investments Variable Annuity
Account A filed by the Account with the Securities and Exchange Commission
pursuant to the Securities Act of 1933.
Very truly yours,
JORDEN BURT BERENSON & JOHNSON LLP
By: /s/Michael Berenson
Michael Berenson
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form N-4
(File No. 33-54924) of our reports dated January 29, 1997, on our audits of
the financial statements of Empire Fidelity Investments Life Insurance
Company and Empire Fidelity Investments Variable Annuity Account A. We
also consent to the reference of our Firm under the caption "Independent
Accountants" in the Statement of Additional Information.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
April 21, 1997
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