As filed with the SEC on April 24, 2000
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. 9 [ X ]
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [ X ]
Amendment No. 11
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 BOROS CICCETTI BERENSON & JOHNSON LLP
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, 1999 was filed March 30, 2000.
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, 2000, pursuant to paragraph (b) (1) (iii) 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
Anuity 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
INTRODUCTION
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 two types of Contracts. You may purchase:
(1) a "NON-QUALIFIED CONTRACT" with money from any source; and
(2) 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 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.
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 , 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 152.
INVESTMENT OPTIONS
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 twenty-eight available 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 in the mutual fund portfolios ("Portfolios") of Variable
Insurance Products Fund, Variable Insurance Products Fund II, and
Variable Insurance Products Fund III (the "Fidelity Funds"). FIDELITY
MANAGEMENT & RESEARCH COMPANY ("FMR") manages the Fidelity Funds.
The Investment Options also invest in mutual fund portfolios managed
by MORGAN STANLEY ASSET MANAGEMENT INC. (" MORGAN
STANLEY "), PILGRIM BAXTER & ASSOCIATES, LTD . OR PILGRIM BAXTER
VALUE INVESTORS, INC. ("PBHG"), STRONG CAPITAL MANAGEMENT, INC.
("STRONG") and CREDIT SUISSE ASSET MANAGEMENT, LLC for the
WARBURG PINCUS TRUST PORTFOLIOS ("WARBURG PINCUS") ("Other
Funds").
All mutual fund portfolios available in this prospectus are
collectively known as the "Funds." Additional Investment Options may
be added in the future.
LEGAL INFORMATION
This prospectus provides information that you should know before
purchasing a Contract. We have filed additional information about the
Contract and the Variable Account with the U.S. Securities and
Exchange Commission in a Statement of Additional Information dated
April 30, 200 0. Th e Statement of Additional Information is
incorporated by reference in this prospectus and is available without
charge by calling EFILI at 1-800-544-2442 or by accessing the SEC
Internet website at (http://www.sec.gov). The table of contents of the
Statement of Additional Information appears on page 164.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. 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 ALL THE
INVESTMENT OPTIONS AVAILABLE IN THE CONTRACT.
THE CONTRACT IS NOT AVAILABLE IN ALL STATES. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY
NOT BE LAWFULLY MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS.
FOR FURTHER INFORMATION CALL EMPIRE FIDELITY INVESTMENTS LIFE
Nationally 1-800-544-2442
Date: April 30, 2000
PROSPECTUS CONTENTS
GLOSSARY 9
Summary of the Contract 11
FACTS ABOUT EFILI, THE
VARIABLE ACCOUNT AND THE FUNDS
EFILI 16
The Variable Account 16
The Funds 17
FACTS ABOUT THE CONTRACT
Purchase of a Contract 149
Free Look Privilege 149
Investment Allocation of Your 149
Purchase Payment
Trading Among Investment 149
Options
Charges 150
Annuity Income Dates 150
Signature Guarantee 150
Death Benefit 150
Fixed, Variable or 151
Combination Annuity Income
Benchmark Rate of Return 151
Types of Annuity Income 153
Options
Reports 153
MORE ABOUT THE CONTRACT
Tax Considerations 153
Other Contract Provisions 156
Selling the Contracts 156
Postponement of Benefits 156
MORE ABOUT THE VARIABLE
ACCOUNT AND THE FUNDS
Changes in Investment Options 156
Total Return for an 156
Investment Option
Voting Rights 157
Resolving Material Conflicts 157
Performance 157
Litigation 157
Appendix - Illustrations of 158
Values
Table of Contents of the 165
Statement of Additional
Information
GLOSSARY
ANNUITANT - You are the Annuitant. You receive lifetime income. For
Qualified 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 annualized Total Return (performance after all
expenses) of the Investment Options you choose matches the
benchmark, annuity income will stay constant. If the Total
Return exceeds the benchmark, annuity income will increase. If
the Total Return 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, Variable Insurance Products Fund III and Other Funds
available in the Contract.
INVESTMENT OPTIONS - The Subaccounts.
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, 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 the Joint Annuitant may not be an
Owner.
NON-QUALIFIED CONTRACT - A Contract other than a Qualified 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, 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.
TOTAL RETURN - U sed to measure the investment performance of an
Investment Option from one Valuation Period to the next.
TRADING AMONG INVESTMENT OPTIONS - Transfers of amounts among the
Subaccounts.
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
PURPOSE
This variable annuity Contract provides 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 151. 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
149.
ANNUITY INCOME
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.
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 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 you must be the only Owner.
PURCHASE OF CONTRACT
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.
There are two 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.
INVESTMENT OPTIONS
You allocate your Purchase Payment between variable and fixed annuity
income on your application. This allocation may not be changed. 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.
There are currently twenty-eight variable Subaccounts available as
investment options .
(small solid bullet) Five Subaccounts invest in shares of one of the
mutual fund portfolios of Fidelity Variable Insurance Products Fund.
The Variable Insurance Products Fund currently offers Money Market
Portfolio, High Income Portfolio, Equity-Income Portfolio, Growth
Portfolio, and Overseas Portfolio.
(small solid bullet) Five Subaccounts invest in shares of one
of the mutual fund portfolios of Fidelity Variable Insurance Products
Fund II. The Variable Insurance Products Fund II currently offers
Investment Grade Bond Portfolio, Asset Manager Portfolio, Index 500
Portfolio, Asset Manager: Growth Portfolio, and Contrafund Portfolio.
(small solid bullet) Four Subaccounts invest in shares of one
of the mutual fund portfolios of Fidelity Variable Insurance Products
Fund III. The Variable Insurance Products Fund III currently offers
Growth & Income Portfolio, Balanced Portfolio, Growth Opportunities
Portfolio and Mid Cap Portfolio .
(small solid bullet) The remaining Subaccounts invest in shares
of one of the mutual fund portfolios of Morgan Stanley, PBHG, Strong,
or Warburg Pincus.
FREE LOOK PERIOD
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 147. ONCE THE FREE LOOK PERIOD
EXPIRES, YOU CANNOT RETURN THE CONTRACT 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 148.
IMPORTANT
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. The
Contract constitutes the entire agreement between you and EFILI and
should be retained.
FEE TABLE
This information may assist you in understanding the various costs and
expenses that a Contract Owner 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 148 for additional information.
CONTRACT EXPENSES
NONE
SEPARATE ACCOUNT ANNUAL
EXPENSES
(as a percentage of Portfolio
average net assets)
Mortality and Expense Risk 0.75%
Charge
Account Fees and Expenses:
Administrative Charge 0.25%
Total Separate Account Annual 1.00%
Expenses
PORTFOLIO ANNUAL EXPENSES
(as a percentage of Portfolio average net assets)
<TABLE>
<CAPTION>
Management Fees Other Expenses Total Annual Expenses (after
reimbursement)
<S> <C> <C> <C>
FIDELITYA
Asset Manager 0.53% 0.09% 0.62%
Money Market 0.18% 0.09% 0.27%
Investment Grade Bond 0.43% 0.11% 0.54%
High Income 0.58% 0.11% 0.69%
Equity-Income 0.48% 0.08% 0.56%
Index 500 0.24% 0.04% 0.28%B
Growth 0.58% 0.07% 0.65%
Overseas 0.73% 0.14% 0.87%
Asset Manager: Growth 0.58% 0.12% 0.70%
Contrafund 0.58% 0.07% 0.65%
Growth Opportunities 0.58% 0.10% 0.68%
Balanced 0.43% 0.12% 0.55%
Growth & Income 0.48% 0.11% 0.59%
Mid Cap 0.57% 0.40% 0.97%
MORGAN STANLEY ASSET MANAGEMENT
Emerging Markets Debt 0.45% 0.98% 1.43%C
Emerging Markets Equity 0.42% 1.37% 1.79%C
Global Equity 0.47% 0.68% 1.15%C
International Magnum 0.29% 0.87% 1.16%C
PBHG
Select 20 0.85% 0.20% 1.05%D
Growth II 0.85% 0.35% 1.20%D
Select Value* 0.65% 0.30% 0.95%D
Small Cap Value 0.91% 0.29% 1.20%D
Technology & Communications 0.85% 0.24% 1.09%D
STRONG
Mid Cap Growth Fund II 1.00% 0.15% 1.15%E
Opportunity Fund II 1.00% 0.14% 1.14%E
WARBURG PINCUS
International Equity 1.00% 0.32% 1.32%F
Global Post-Venture Capital** 1.07% 0.33% 1.40%F
Small Company Growth 0.90% 0.24% 1.14%F
</TABLE>
* PREVIOUSLY CALLED LARGE CAP VALUE.
** PREVIOUSLY CALLED POST-VENTURE CAPITAL.
A A PORTION OF THE BROKERAGE COMMISSIONS THAT CERTAIN FIDELITY FUNDS
PAY WAS USED TO REDUCE FUND EXPENSES. IN ADDITION, CERTAIN FIDELITY
FUNDS, OR FMR ON BEHALF OF CERTAIN FUNDS, HAVE ENTERED INTO
ARRANGEMENTS WITH THEIR CUSTODIAN WHEREBY CREDITS REALIZED AS A RESULT
OF UNINVESTED CASH BALANCES WERE USED TO REDUCE A PORTION OF
FUND EXPENSES. WITHOUT THESE REDUCTIONS, THE TOTAL OPERATING EXPENSES
PRESENTED IN THE TABLE WOULD HAVE BEEN 0. 5 7% FOR EQUITY-INCOME
PORTFO LIO, 0.66% FOR GROWTH PORTFOLIO, 0.91% FOR OVERSEAS
PORTFOLIO, 0.63% FOR ASSET MANAGER PORTFOLIO, 0.67% FOR CONTRAFUND
PORTFOLIO, 0.70% FOR ASSET MANAGER: GROWTH PORTFOLIO, 0.68% FOR GROWTH
OPPORTUNITIES PORTFOLIO, 0.55% FOR BALANCED PORTFOLIO, 0.59% FOR
GROWTH AND INCOME POR TFOLIO, AND 3.34% FOR MID CAP PORTFOLIO.
B 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 0.24%,
0. 10 % AND 0.34%, RESPECTIVELY.
C MORGAN STANLEY ASSET MANAGEMENT , WITH RESPECT TO THE
PORTFOLIOS, HAS VOLUNTARILY AGREED TO WAIVE RECEIPT OF ITS MANAGEMENT
FEES AND AGREED TO REIMBURSE CERTAIN EXPENSES OF THE PORTFOLIO. MORGAN
STANLEY ASSET MANAGEMENT MAY TERMINATE THIS VOLUNTARY WAIVER
AND REIMBURSEMENT AT ANY TIME AT ITS SOLE DISCRETION. WITHOUT WAIVERS
AND REIMBURSEMENTS, "MANAGEMENT FEES," "OTHER EXPENSES" AND "TOTAL
ANNUAL EXPENSES," RESPECTIVELY, WOULD BE AS FOLLOWS: EMERGING MARKETS
DEBT PORTFOLIO (0.80%, 0.98%, 1.78%); EMERGING MARKETS EQUITY
PORTFOLIO (1.25%, 1.37%, 2.62%); GLOBAL EQUITY PORTFOLIO (0.80%,
0.68%, 1.48%); INTERNATIONAL MAGNUM PORTFOLI O (0.80%, 0.87%,
1.67%).
D PILGRIM BAXTER & ASSOCIATES, LTD. (THE "ADVISER") HAS VOLUNTARILY
AGREED TO WAIVE OR LIMIT ITS ADVISORY FEES OR ASSUME OTHER EXPENSES IN
AN AMOUNT THAT OPERATES TO LIMIT TOTAL OPERATING EXPENSES OF THE
PORTFOLIOS TO NOT MORE THAN 1.20% OF THE AVERAGE DAILY NET ASSETS OF
THE GROWTH II, SMALL CAP VALUE, TECHNOLOGY & COMMUNICATIONS AND SELECT
20 PORTFOLIOS AND TO NOT MORE THAN 1.00% OF THE AVERAGE DAILY NET
ASSETS OF THE SELECT VALUE PORTFOLIO, THROUGH DECEMBER 31,
1999. TOTAL OPERATING EXPENSES INCLUDE, BUT ARE NOT LIMITED TO,
EXPENSES SUCH AS INVESTMENT ADVISORY FEES, TRANSFER AGENT FEES AND
LEGAL FEES. SUCH WAIVERS OF ADVISORY FEES AND POSSIBLE ASSUMPTIONS OF
OTHER EXPENSES BY THE ADVISER IS SUBJECT TO A POSSIBLE REIMBURSEMENT
BY THE PORTFOLIOS IN FUTURE YEARS IF SUCH REIMBURSEMENT CAN BE
ACHIEVED WITHIN FOREGOING ANNUAL EXPENSE LIMITS. SUCH FEE
WAIVER/EXPENSE REIMBURSEMENT ARRANGEMENTS MAY BE MODIFIED OR
TERMINATED AT ANY TIME AFTER DECEMBER 31, 1999. ABSENT SUCH FEE
WAIVERS/EXPENSE REIMBURSEMENTS THE ADVISORY FEES AND ESTIMATED TOTAL
OPERATING EXPENSES FOR THE SMALL CAP VALUE PORTFOLIO WOULD BE 1.00%
AND 1.29 %.
E STRONG CAPITAL MANAGEMENT, INC., THE INVESTMENT ADVISER, HAS
VOLUNTARILY AGREED TO CAP THE FUND'S TOTAL OPERATING EXPENSES AT
1.20%. THE ADVISER HAS NO CURRENT INTENTION TO, BUT MAY IN THE FUTURE,
DISCONTINUE OR MODIFY ANY WAIVER OF FEES OR ABSORPTION OF EXPENSES AT
ITS DISCRETION WITH APPROPRIATE NOTIFICATION TO ITS SHAREHOLDERS.
MANAGEMENT FEES, OTHER EXPENSES, AND TOTAL ANNUAL EXPENSES FOR
OPPORTUNITY II AND MID CAP GROWTH FUND II ARE CALCULATED ON AN
ANNUALIZED BASIS FROM THE BEGINNING OF THE FISCAL YEAR THROUGH THE
CURRENT QUARTER END. THE ADVISOR FOR MID CAP GROWTH FUND II IS
ABSORBING EXPENSES OF 0.02%. WITHOUT THESE ABSORPTIONS THE EXPENSE
RATIO WOULD HAVE BEEN 1.17%.
F MANAGEMENT FEES, OTHER EXPENSES AND TOTAL ANNUAL EXPENSES FOR THE
INTERNATIONAL EQUITY, GLOBAL POST-VENTURE CAPITAL AND SMALL
COMPANY GROWTH PORTFOLIOS ARE BASED ON ACTUAL EXPENSES FOR THE FISCAL
YEAR ENDED DECEMBER 31, 199 9 , NET ANY FEE WAIVERS OR EXPENSE
REIMBURSEMENTS. WITHOUT SUCH WAIVERS OR REIMBURSEMENTS, MANAGEMENT
FEES WOULD HAVE EQUALED 1.00%, 1.25% AND 0.90%; OTHER EXPENSES WOULD
HAVE EQUALLED 0.3 2 %, 0. 33 % AND 0.24%; AND TOTAL ANNUAL
EXPENSES WOULD HAVE EQUALLED 1.3 2 %, 1. 58 % AND 1.14% FOR
THE INTERNATIONAL EQUITY, GLOBAL POST-VENTURE CAPITAL, AND SMALL
COMPANY GROWTH PORTFOLIOS, RESPECTIVELY. FEE WAIVERS AND EXPENSE
REIMBURSEMENTS OR CREDITS MAY BE DISCONTINUED AT ANY TIME.
FACTS ABOUT EFILI, THE VARIABLE ACCOUNT AND THE FUNDS
EMPIRE FIDELITY INVESTMENTS LIFE
Empire Fidelity Investments Life 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.
Edward C. Johnson 3d, the Johnson family members, and various key
employees of FMR Corp. own the voting common stock of 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.
We own the assets in the Variable Account. The assets of the Variable
Account are kept separate from our general account assets and from any
other separate accounts we may have, as required by law. The assets of
the Variable Account may not be charged with liabilities from any
other business we conduct. 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, we may transfer the excess to its general account. EFILI
is obligated to provide all benefits under the Contracts.
There are currently twenty-nine Subaccounts in the Variable
Account. One of these Subaccounts, Strong Discovery Fund II Portfolio,
is no longer available as an investment option in the Contract and no
money may be allocated to this Subaccount. On or about May 26, 2000,
any assets remaining in Strong Discovery Fund II Portfolio will be
exchanged to VIP III Mid Cap Portfolio. Five Subaccounts invest
exclusively in shares of a specific portfolio of Fidelity Variable
Insurance Products Fund. Five Subaccounts invest exclusively in shares
of a specific portfolio of Fidelity Variable Insurance Products Fund
II. Four Subaccounts invest exclusively in shares of a specific
portfolio of Fidelity Variable Insurance Products Fund III. The other
14 available investment options are offered by four different mutual
fund investment advisers.
THE FUNDS
FIDELITY:
The Fidelity 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, 199 9 . 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 Total of
Return for that month is higher than the Benchmark Rate of Return, and
decreases for a given month if the annualized Total 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 $74, 520 . If the purchaser were
female, the Purchase Payment necessary would be $83, 417 . 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 graphs for the Other Funds are not available.
ASSET MANAGER PORTFOLIO OF FIDELITY 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 instruments.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Allocating the fund's assets among stocks, bonds,
and short-term and money market instruments.
(small solid bullet) Maintaining a neutral mix over time of 50% of
assets in stocks, 40% of assets in bonds, and 10% of assets in
short-term and money market instruments.
(small solid bullet) Adjusting allocation among asset classes
gradually within the following ranges: stock class (30% - 70%), bond
class (20% - 60%), and short-term/money market class (0% - 50%).
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Analyzing an issuer using fundamental and/or
quantitative factors and evaluating each security's current price
relative to estimated long-term value in selecting investments.
INVESTOR PROFILE. The fund may be appropriate for investors who want
to diversify among stocks, bonds, short-term instruments and other
types of securities. The fund's assets may also be invested in other
instruments that do not fall within these classes. The graph below is
based on a 5% Benchmark Rate of Return and initial monthly annuity
income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E ASSET MANAGER
Apr-82 0.01
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
Jan-97 31.00 3.01 102.92% $753
Feb-97 28.00 0.86 100.78% $756
Mar-97 31.00 -3.80 96.12% $724
Apr-97 30.00 3.42 103.33% $745
May-97 31.00 4.80 104.71% $777
Jun-97 30.00 2.66 102.58% $794
Jul-97 31.00 5.78 105.69% $836
Aug-97 31.00 -2.73 97.19% $809
Sep-97 30.00 3.22 103.13% $831
Oct-97 31.00 1.00% -1.64 98.28% $813
Nov-97 30.00 1.00% 2.31 102.23% $828
Dec-97 31.00 1.00% 1.52 101.43% $836
Jan-98 31.00 1.00% 0.33 100.24% $835
Feb-98 28.00 1.00% 4.50 104.42% $868
Mar-98 31.00 1.00% 2.90 102.81% $889
Apr-98 30.00 1.00% -0.12 99.80% $884
May-98 31.00 1.00% -0.53 99.39% $875
Jun-98 30.00 1.00% 1.95 101.87% $888
Jul-98 31.00 1.00% -0.64 99.28% $877
Aug-98 31.00 1.00% -9.10 90.82% $794
Sep-98 30.00 1.00% 3.34 103.25% $816
Oct-98 31.00 1.00% 4.35 104.26% $847
Nov-98 30.00 1.00% 3.81 103.72% $875
Dec-98 31.00 1.00% 4.13 104.04% $907
Jan-99 31.00 1.00% 2.37 102.28% $924
Feb-99 28.00 1.00% -2.29 97.63% $899
Mar-99 31.00 1.00% 0.89 100.80% $902
Apr-99 30.00 1.00% 2.24 102.16% $918
May-99 31.00 1.00% -1.44 98.48% $900
Jun-99 30.00 1.00% 3.51 103.42% $927
Jul-99 31.00 1.00% -1.70 98.22% $907
Aug-99 31.00 1.00% -0.17 99.74% $901
Sep-99 30.00 1.00% -1.15 98.77% $886
Oct-99 31.00 1.00% 3.03 102.94% $909
Nov-99 30.00 1.00% 1.36 101.28% $917
Dec-99 31.00 1.00% 4.19 104.10% $950
Listed in Order Max 950
to match MFPR Min 468
</TABLE>
MONEY MARKET PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks as
high a level of current income as is consistent with the preservation
of capital and liquidity.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing in U.S. dollar-denominated money market
securities, including U.S. Government securities and repurchase
agreements, and entering into reverse repurchase agreements.
(small solid bullet) Investing more than 25% of total assets in the
financial services industry.
(small solid bullet) Investing in compliance with industry-standard
requirements for money market funds for the quality, maturity, and
diversification of investments.
INVESTOR PROFILE. 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. An investment in the fund is not a deposit
of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the
fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. The
graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E MONEY MARKET
Apr-82 0.01 $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
Jan-97 31.00 0.45 100.36% $565
Feb-97 28.00 0.40 100.32% $564
Mar-97 31.00 0.44 100.35% $564
Apr-97 30.00 0.44 100.36% $564
May-97 31.00 0.44 100.35% $563
Jun-97 30.00 0.46 100.38% $563
Jul-97 31.00 0.46 100.37% $563
Aug-97 31.00 0.43 100.34% $563
Sep-97 30.00 0.47 100.39% $562
Oct-97 31.00 1.00% 0.46 100.37% $562
Nov-97 30.00 1.00% 0.41 100.33% $562
Dec-97 31.00 1.00% 0.50 100.41% $562
Jan-98 31.00 1.00% 0.45 100.36% $562
Feb-98 28.00 1.00% 0.42 100.34% $561
Mar-98 31.00 1.00% 0.47 100.38% $561
Apr-98 30.00 1.00% 0.44 100.36% $561
May-98 31.00 1.00% 0.43 100.34% $561
Jun-98 30.00 1.00% 0.47 100.39% $560
Jul-98 31.00 1.00% 0.46 100.37% $560
Aug-98 31.00 1.00% 0.46 100.37% $560
Sep-98 30.00 1.00% 0.44 100.36% $560
Oct-98 31.00 1.00% 0.43 100.34% $559
Nov-98 30.00 1.00% 0.44 100.36% $559
Dec-98 31.00 1.00% 0.43 100.34% $559
Jan-99 31.00 1.00% 0.40 100.31% $558
Feb-99 28.00 1.00% 0.38 100.30% $558
Mar-99 31.00 1.00% 0.44 100.35% $557
Apr-99 30.00 1.00% 0.39 100.31% $557
May-99 31.00 1.00% 0.36 100.27% $556
Jun-99 30.00 1.00% 0.43 100.35% $556
Jul-99 31.00 1.00% 0.40 100.31% $555
Aug-99 31.00 1.00% 0.44 100.35% $555
Sep-99 30.00 1.00% 0.43 100.35% $555
Oct-99 31.00 1.00% 0.42 100.33% $554
Nov-99 30.00 1.00% 0.47 100.39% $554
Dec-99 31.00 1.00% 0.48 100.39% $554
Listed in Order Max 609
to match MFPR Min 500
</TABLE>
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.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing in U.S. dollar-denominated
investment-grade bonds.
(small solid bullet) Managing the fund to have similar overall
interest rate risk to the Lehman Brothers Aggregate Bond Index.
(small solid bullet) Allocating assets across different market sectors
and maturities.
(small solid bullet) Analyzing a security's structural features,
current pricing and trading opportunities, and the credit quality of
its issuer in selecting investments.
INVESTOR PROFILE. The fund may be appropriate for investors who want
the potential for high current income from a portfolio of
investment-grade debt securities. The fund's level of risk and
potential reward depend on the quality and maturity of its
investments, and has overall interest rate risk similar to the index.
The graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E INVESTMENT GRADE BOND
Apr-82 0.01
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
Jan-97 31.00 0.25 100.16% $585
Feb-97 28.00 0.13 100.05% $583
Mar-97 31.00 -1.04 98.88% $574
Apr-97 30.00 1.49 101.41% $580
May-97 31.00 0.78 100.69% $582
Jun-97 30.00 1.20 101.12% $586
Jul-97 31.00 2.70 102.61% $599
Aug-97 31.00 -0.90 99.02% $590
Sep-97 30.00 1.49 101.41% $596
Oct-97 31.00 1.00% 1.31 101.22% $601
Nov-97 30.00 1.00% 0.24 100.16% $600
Dec-97 31.00 1.00% 1.12 101.03% $603
Jan-98 31.00 1.00% 1.27 101.18% $608
Feb-98 28.00 1.00% -0.07 99.85% $605
Mar-98 31.00 1.00% 0.41 100.32% $604
Apr-98 30.00 1.00% 0.50 100.42% $604
May-98 31.00 1.00% 0.90 100.81% $607
Jun-98 30.00 1.00% 0.81 100.73% $609
Jul-98 31.00 1.00% 0.24 100.15% $607
Aug-98 31.00 1.00% 1.21 101.12% $611
Sep-98 30.00 1.00% 2.47 102.39% $623
Oct-98 31.00 1.00% -0.54 99.38% $617
Nov-98 30.00 1.00% 0.86 100.78% $619
Dec-98 31.00 1.00% 0.47 100.38% $619
Jan-99 31.00 1.00% 0.85 100.76% $621
Feb-99 28.00 1.00% -1.72 98.20% $608
Mar-99 31.00 1.00% 0.66 100.57% $609
Apr-99 30.00 1.00% 0.33 100.25% $608
May-99 31.00 1.00% -1.30 98.62% $597
Jun-99 30.00 1.00% -0.49 99.43% $591
Jul-99 31.00 1.00% -0.41 99.51% $586
Aug-99 31.00 1.00% -0.17 99.74% $582
Sep-99 30.00 1.00% 1.33 101.25% $587
Oct-99 31.00 1.00% 0.16 100.07% $585
Nov-99 30.00 1.00% 0.16 100.08% $583
Dec-99 31.00 1.00% -0.41 99.51% $578
Listed in Order Max 623
to match MFPR Min 500
</TABLE>
HIGH INCOME PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks a high
level of current income. Growth of capital may also be considered.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing at least 65% of total assets in
income-producing debt securities, preferred stocks and convertible
securities, with an emphasis on lower-quality debt securities.
(small solid bullet) Potentially investing in non-income producing
securities, including defaulted securities and common stocks.
(small solid bullet) Investing in companies in troubled or uncertain
financial condition.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E HIGH INCOME
Apr-82 0.01
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
Jan-97 31.00 1.36 101.27% $933
Feb-97 28.00 1.81 101.73% $945
Mar-97 31.00 -3.11 96.81% $911
Apr-97 30.00 1.56 101.48% $921
May-97 31.00 4.18 104.09% $955
Jun-97 30.00 1.80 101.72% $967
Jul-97 31.00 3.62 103.53% $997
Aug-97 31.00 0.85 100.76% $1,001
Sep-97 30.00 3.54 103.45% $1,031
Oct-97 31.00 1.00% -0.89 99.03% $1,017
Nov-97 30.00 1.00% 0.75 100.67% $1,020
Dec-97 31.00 1.00% 1.13 101.04% $1,026
Jan-98 31.00 1.00% 2.28 102.19% $1,044
Feb-98 28.00 1.00% 0.76 100.68% $1,047
Mar-98 31.00 1.00% 2.09 102.00% $1,064
Apr-98 30.00 1.00% 0.39 100.31% $1,063
May-98 31.00 1.00% -0.71 99.21% $1,050
Jun-98 30.00 1.00% -0.08 99.84% $1,044
Jul-98 31.00 1.00% 0.55 100.46% $1,045
Aug-98 31.00 1.00% -12.36 87.57% $911
Sep-98 30.00 1.00% -0.99 98.93% $898
Oct-98 31.00 1.00% -2.72 97.20% $869
Nov-98 30.00 1.00% 8.21 108.12% $936
Dec-98 31.00 1.00% -0.60 99.32% $925
Jan-99 31.00 1.00% 2.95 102.86% $948
Feb-99 28.00 1.00% -0.42 99.50% $940
Mar-99 31.00 1.00% 2.52 102.43% $959
Apr-99 30.00 1.00% 5.00 104.91% $1,002
May-99 31.00 1.00% -2.69 97.23% $970
Jun-99 30.00 1.00% 0.53 100.45% $970
Jul-99 31.00 1.00% -0.35 99.56% $962
Aug-99 31.00 1.00% -1.69 98.23% $941
Sep-99 30.00 1.00% -1.54 98.38% $922
Oct-99 31.00 1.00% -0.46 99.46% $913
Nov-99 30.00 1.00% 2.12 102.04% $928
Dec-99 31.00 1.00% 2.26 102.17% $944
Listed in Order Max 1,064
to match MFPR Min 472
</TABLE>
EQUITY-INCOME PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks
reasonable income. The fund will consider the potential for capital
appreciation. The fund seeks a yield for its shareholders that exceeds
the yield on the securities comprising the S&P 500.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing at least 65% of total assets in
income-producing equity securities, which tends to lead to investments
in large cap "value" stocks.
(small solid bullet) Potentially investing in other types of equity
securities and debt securities, including lower-quality debt
securities.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns. The fund is designed for
those who want some income from equity and bond securities, 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E EQUITY INCOME
Apr-82 0.01
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
Jan-97 31.00 3.90 103.81% $1,020
Feb-97 28.00 1.11 101.03% $1,027
Mar-97 31.00 -3.72 96.20% $984
Apr-97 30.00 3.55 103.46% $1,014
May-97 31.00 6.20 106.11% $1,072
Jun-97 30.00 4.65 104.56% $1,116
Jul-97 31.00 7.30 107.21% $1,191
Aug-97 31.00 -4.69 95.23% $1,130
Sep-97 30.00 5.50 105.41% $1,186
Oct-97 31.00 1.00% -3.66 96.26% $1,137
Nov-97 30.00 1.00% 3.66 103.57% $1,173
Dec-97 31.00 1.00% 2.15 102.06% $1,192
Jan-98 31.00 1.00% -0.25 99.66% $1,183
Feb-98 28.00 1.00% 6.45 106.37% $1,254
Mar-98 31.00 1.00% 4.63 104.54% $1,306
Apr-98 30.00 1.00% 0.00 99.92% $1,299
May-98 31.00 1.00% -1.62 98.30% $1,272
Jun-98 30.00 1.00% 1.12 101.04% $1,280
Jul-98 31.00 1.00% -2.46 97.46% $1,242
Aug-98 31.00 1.00% -15.27 84.66% $1,047
Sep-98 30.00 1.00% 5.87 105.78% $1,103
Oct-98 31.00 1.00% 7.40 107.31% $1,179
Nov-98 30.00 1.00% 4.23 104.14% $1,223
Dec-98 31.00 1.00% 3.12 103.03% $1,255
Jan-99 31.00 1.00% -0.31 99.60% $1,245
Feb-99 28.00 1.00% -1.22 98.70% $1,224
Mar-99 31.00 1.00% 3.65 103.56% $1,262
Apr-99 30.00 1.00% 8.87 108.78% $1,368
May-99 31.00 1.00% -2.72 97.20% $1,324
Jun-99 30.00 1.00% 4.25 104.16% $1,374
Jul-99 31.00 1.00% -3.01 96.91% $1,326
Aug-99 31.00 1.00% -2.72 97.20% $1,283
Sep-99 30.00 1.00% -3.27 96.65% $1,235
Oct-99 31.00 1.00% 3.66 103.57% $1,274
Nov-99 30.00 1.00% -1.32 98.60% $1,251
Dec-99 31.00 1.00% 1.02 100.93% $1,258
Listed in Order Max 1,374
to match MFPR Min 431
</TABLE>
INDEX 500 PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND II seeks
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, as represented by the S&P 500, while
keeping transaction costs and other expenses low.
PRINCIPAL INVESTMENT STRATEGIES. Bankers Trust Company's ("BT," a New
York banking corporation serving as sub-adviser and custodian for VIP
II Index 500) principal investment strategies include:
(small solid bullet) Investing at least 80% of assets in common stocks
included in the S&P 500.
(small solid bullet) Lending securities to earn income for the fund.
(small solid bullet) 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 funds. The fund is managed by FMR, which handles its
business affairs. BT, Index 500 Portfolio's sub-adviser, chooses the
fund's investments. FMR supervises the sub-adviser and, in conjunction
with the Board of Trustees, reviews the sub-adviser's performance of
its duties. BT also acts as Index 500 Portfolio's custodian.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns in relation to the S&P
500. The graph below is based on a 5% benchmark Rate of Return and
initial annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E INDEX 500
Apr-82 0.01
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 1.16 $500
Oct-92 31.00 0.22 100.13% $499
Nov-92 30.00 3.41 103.32% $513
Dec-92 31.00 1.26 101.17% $517
Jan-93 31.00 0.64 100.55% $518
Feb-93 28.00 1.32 101.24% $522
Mar-93 31.00 2.20 102.11% $531
Apr-93 30.00 -2.55 97.37% $515
May-93 31.00 2.60 102.51% $526
Jun-93 30.00 0.26 100.18% $525
Jul-93 31.00 -0.46 99.46% $520
Aug-93 31.00 3.79 103.70% $537
Sep-93 30.00 -0.81 99.11% $530
Oct-93 31.00 2.04 101.95% $538
Nov-93 30.00 -0.97 98.95% $530
Dec-93 31.00 1.20 101.11% $534
Jan-94 31.00 3.37 103.28% $549
Feb-94 28.00 -2.71 97.22% $532
Mar-94 31.00 -4.34 95.58% $506
Apr-94 30.00 1.20 101.12% $510
May-94 31.00 1.55 101.46% $515
Jun-94 30.00 -2.44 97.48% $500
Jul-94 31.00 3.30 103.21% $514
Aug-94 31.00 3.99 103.90% $532
Sep-94 30.00 -2.43 97.49% $516
Oct-94 31.00 2.22 102.13% $525
Nov-94 30.00 -3.63 96.29% $504
Dec-94 31.00 1.46 101.37% $508
Jan-95 31.00 2.65 102.56% $519
Feb-95 28.00 3.83 103.75% $537
Mar-95 31.00 2.92 102.83% $550
Apr-95 30.00 2.94 102.86% $563
May-95 31.00 3.93 103.84% $582
Jun-95 30.00 2.27 102.19% $593
Jul-95 31.00 3.34 103.25% $609
Aug-95 31.00 0.25 100.16% $608
Sep-95 30.00 4.18 104.09% $630
Oct-95 31.00 -0.34 99.57% $625
Nov-95 30.00 4.35 104.26% $649
Dec-95 31.00 1.83 101.74% $658
Jan-96 31.00 3.42 103.33% $677
Feb-96 29.00 0.93 100.85% $680
Mar-96 31.00 1.03 100.94% $683
Apr-96 30.00 1.40 101.32% $690
May-96 31.00 2.55 102.46% $704
Jun-96 30.00 0.43 100.35% $703
Jul-96 31.00 -4.43 95.49% $669
Aug-96 31.00 2.06 101.97% $679
Sep-96 30.00 5.59 105.50% $714
Oct-96 31.00 2.76 102.67% $730
Nov-96 30.00 7.50 107.41% $781
Dec-96 31.00 -1.97 97.95% $761
Jan-97 31.00 6.20 106.11% $805
Feb-97 28.00 0.75 100.67% $807
Mar-97 31.00 -4.16 95.76% $770
Apr-97 30.00 5.94 105.85% $811
May-97 31.00 6.08 105.99% $856
Jun-97 30.00 4.39 104.30% $890
Jul-97 31.00 7.95 107.86% $956
Aug-97 31.00 -5.60 94.32% $898
Sep-97 30.00 5.41 105.32% $942
Oct-97 31.00 1.00% -3.31 96.61% $906
Nov-97 30.00 1.00% 4.52 104.43% $942
Dec-97 31.00 1.00% 1.68 101.59% $953
Jan-98 31.00 1.00% 1.08 100.99% $959
Feb-98 28.00 1.00% 7.10 107.02% $1,022
Mar-98 31.00 1.00% 5.06 104.97% $1,069
Apr-98 30.00 1.00% 0.99 100.91% $1,074
May-98 31.00 1.00% -1.79 98.13% $1,049
Jun-98 30.00 1.00% 4.07 103.98% $1,087
Jul-98 31.00 1.00% -1.09 98.83% $1,070
Aug-98 31.00 1.00% -14.47 85.46% $910
Sep-98 30.00 1.00% 6.43 106.34% $964
Oct-98 31.00 1.00% 8.12 108.03% $1,037
Nov-98 30.00 1.00% 6.02 105.93% $1,094
Dec-98 31.00 1.00% 5.88 105.79% $1,153
Jan-99 31.00 1.00% 4.02 103.93% $1,193
Feb-99 28.00 1.00% -3.15 96.78% $1,151
Mar-99 31.00 1.00% 4.02 103.93% $1,191
Apr-99 30.00 1.00% 3.81 103.72% $1,230
May-99 31.00 1.00% -2.40 97.52% $1,195
Jun-99 30.00 1.00% 5.53 105.44% $1,255
Jul-99 31.00 1.00% -3.12 96.80% $1,210
Aug-99 31.00 1.00% -0.53 99.39% $1,197
Sep-99 30.00 1.00% -2.77 97.15% $1,158
Oct-99 31.00 1.00% 6.29 106.20% $1,225
Nov-99 30.00 1.00% 2.00 101.92% $1,244
Dec-99 31.00 1.00% 5.88 105.79% $1,310
Listed in Order Max 1,310
to match MFPR Min 499
</TABLE>
GROWTH PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks to
achieve capi tal appreciation.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Investing in companies that it believes have
above-average growth potential, measured by factors such as earnings
or revenue (stocks of these companies are often called "growth
stocks").
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns. The fund is designed for
those who want to pursue growth potential, and who understand that
this strategy often leads to more volatile investments than the
market as a whole. The graph below is based on a 5% Benchmark Rate
of Return and initial monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E GROWTH
Apr-82 0.01
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 2.20 102.12% $509
Dec-86 31.00 -1.86 98.06% $497
Jan-87 31.00 10.67 110.58% $547
Feb-87 28.00 4.95 104.87% $571
Mar-87 31.00 1.63 101.54% $578
Apr-87 30.00 0.00 99.92% $575
May-87 31.00 0.68 100.59% $576
Jun-87 30.00 2.94 102.86% $590
Jul-87 31.00 4.00 103.91% $611
Aug-87 31.00 2.98 102.89% $626
Sep-87 30.00 -1.14 98.78% $616
Oct-87 31.00 -21.97 77.96% $478
Nov-87 30.00 -7.02 92.90% $442
Dec-87 31.00 10.31 110.22% $485
Jan-88 31.00 2.17 102.08% $493
Feb-88 29.00 8.11 108.02% $531
Mar-88 31.00 -0.89 99.03% $524
Apr-88 30.00 1.26 101.18% $528
May-88 31.00 -0.89 99.03% $520
Jun-88 30.00 5.03 104.94% $544
Jul-88 31.00 -0.51 99.41% $538
Aug-88 31.00 -2.41 97.51% $523
Sep-88 30.00 2.82 102.74% $535
Oct-88 31.00 0.26 100.17% $534
Nov-88 30.00 -0.94 98.98% $526
Dec-88 31.00 1.03 100.94% $529
Jan-89 31.00 7.17 107.08% $564
Feb-89 28.00 -2.07 97.85% $550
Mar-89 31.00 3.02 102.93% $564
Apr-89 30.00 5.29 105.20% $591
May-89 31.00 3.58 103.49% $609
Jun-89 30.00 -1.32 98.60% $598
Jul-89 31.00 8.94 108.85% $648
Aug-89 31.00 1.71 101.62% $656
Sep-89 30.00 0.87 100.79% $658
Oct-89 31.00 -2.80 97.12% $637
Nov-89 30.00 1.64 101.56% $644
Dec-89 31.00 2.36 102.27% $656
Jan-90 31.00 -5.80 94.12% $615
Feb-90 28.00 0.96 100.88% $618
Mar-90 31.00 1.22 101.13% $622
Apr-90 30.00 -2.91 97.01% $601
May-90 31.00 8.85 108.76% $651
Jun-90 30.00 2.08 102.00% $661
Jul-90 31.00 -1.58 98.34% $648
Aug-90 31.00 -10.30 89.62% $578
Sep-90 30.00 -10.29 89.64% $516
Oct-90 31.00 -3.57 96.35% $495
Nov-90 30.00 8.10 108.01% $533
Dec-90 31.00 2.95 102.86% $546
Jan-91 31.00 6.66 106.57% $579
Feb-91 28.00 7.46 107.38% $620
Mar-91 31.00 3.02 102.93% $635
Apr-91 30.00 -0.93 98.99% $626
May-91 31.00 5.91 105.82% $660
Jun-91 30.00 -7.42 92.50% $608
Jul-91 31.00 9.53 109.44% $663
Aug-91 31.00 4.44 104.35% $689
Sep-91 30.00 0.78 100.70% $691
Oct-91 31.00 3.09 103.00% $708
Nov-91 30.00 -5.71 94.21% $665
Dec-91 31.00 13.21 113.11% $749
Jan-92 31.00 6.10 106.01% $791
Feb-92 29.00 2.09 102.01% $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 31.00 3.86 103.77% $700
Aug-92 31.00 -2.75 97.17% $677
Sep-92 30.00 1.76 101.68% $686
Oct-92 31.00 3.87 103.78% $709
Nov-92 30.00 6.68 106.59% $752
Dec-92 31.00 3.08 102.99% $772
Jan-93 31.00 1.97 101.88% $783
Feb-93 28.00 -2.06 97.86% $763
Mar-93 31.00 3.99 103.90% $790
Apr-93 30.00 -1.05 98.87% $778
May-93 31.00 7.45 107.36% $831
Jun-93 30.00 1.03 100.95% $836
Jul-93 31.00 -0.28 99.63% $830
Aug-93 31.00 5.02 104.93% $867
Sep-93 30.00 1.86 101.78% $879
Oct-93 31.00 0.96 100.87% $883
Nov-93 30.00 -4.05 95.87% $843
Dec-93 31.00 3.54 103.45% $868
Jan-94 31.00 2.51 102.42% $886
Feb-94 28.00 -1.03 98.89% $873
Mar-94 31.00 -4.54 95.38% $829
Apr-94 30.00 0.62 100.54% $830
May-94 31.00 -2.32 97.60% $807
Jun-94 30.00 -5.08 94.84% $762
Jul-94 31.00 3.47 103.38% $785
Aug-94 31.00 5.67 105.58% $825
Sep-94 30.00 -1.21 98.71% $811
Oct-94 31.00 4.06 103.97% $840
Nov-94 30.00 -3.99 95.93% $802
Dec-94 31.00 2.55 102.46% $819
Jan-95 31.00 -1.89 98.03% $799
Feb-95 28.00 4.14 104.06% $828
Mar-95 31.00 3.63 103.54% $854
Apr-95 30.00 3.37 103.28% $879
May-95 31.00 3.90 103.81% $909
Jun-95 30.00 8.85 108.76% $984
Jul-95 31.00 9.89 109.80% $1,076
Aug-95 31.00 1.23 101.14% $1,084
Sep-95 30.00 2.59 102.51% $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 31.00 1.58 101.49% $1,056
Feb-96 29.00 3.35 103.27% $1,086
Mar-96 31.00 0.39 100.30% $1,085
Apr-96 30.00 3.91 103.82% $1,122
May-96 31.00 3.13 103.04% $1,151
Jun-96 30.00 -1.96 97.96% $1,123
Jul-96 31.00 -7.65 92.27% $1,032
Aug-96 31.00 2.99 102.90% $1,058
Sep-96 30.00 6.72 106.63% $1,124
Oct-96 31.00 -0.23 99.68% $1,115
Nov-96 30.00 5.55 105.46% $1,172
Dec-96 31.00 -3.08 96.84% $1,130
Jan-97 31.00 5.75 105.66% $1,189
Feb-97 28.00 -2.27 97.65% $1,157
Mar-97 31.00 -5.60 94.32% $1,086
Apr-97 30.00 4.81 104.72% $1,133
May-97 31.00 6.93 106.84% $1,206
Jun-97 30.00 4.11 104.02% $1,249
Jul-97 31.00 7.51 107.42% $1,336
Aug-97 31.00 -3.86 96.06% $1,278
Sep-97 30.00 5.80 105.71% $1,346
Oct-97 31.00 1.00% -3.77 96.15% $1,289
Nov-97 30.00 1.00% 2.86 102.78% $1,319
Dec-97 31.00 1.00% 0.22 100.13% $1,315
Jan-98 31.00 1.00% 1.35 101.26% $1,327
Feb-98 28.00 1.00% 7.51 107.43% $1,420
Mar-98 31.00 1.00% 3.51 103.42% $1,462
Apr-98 30.00 1.00% 1.96 101.88% $1,484
May-98 31.00 1.00% -2.57 97.35% $1,438
Jun-98 30.00 1.00% 6.33 106.24% $1,522
Jul-98 31.00 1.00% 2.04 101.95% $1,545
Aug-98 31.00 1.00% -16.32 83.61% $1,287
Sep-98 30.00 1.00% 10.33 110.24% $1,413
Oct-98 31.00 1.00% 7.06 106.97% $1,505
Nov-98 30.00 1.00% 6.96 106.87% $1,602
Dec-98 31.00 1.00% 8.54 108.45% $1,730
Jan-99 31.00 1.00% 8.09 108.00% $1,861
Feb-99 28.00 1.00% -4.91 95.02% $1,761
Mar-99 31.00 1.00% 5.57 105.48% $1,850
Apr-99 30.00 1.00% 0.35 100.27% $1,848
May-99 31.00 1.00% -1.36 98.56% $1,814
Jun-99 30.00 1.00% 6.52 106.43% $1,923
Jul-99 31.00 1.00% -1.36 98.56% $1,887
Aug-99 31.00 1.00% 0.55 100.46% $1,888
Sep-99 30.00 1.00% -1.96 97.96% $1,842
Oct-99 31.00 1.00% 5.87 105.78% $1,940
Nov-99 30.00 1.00% 5.97 105.88% $2,046
Dec-99 31.00 1.00% 10.10 110.01% $2,242
Listed in Order Max 2,242
to match MFPR Min 442
</TABLE>
OVERSEAS PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks long-term
growth of capital.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition, industry position, and market and economic
conditions to select investments.
INVESTOR PROFILE AND RISK:
(small solid bullet) Overseas Portfolio provides a means for investors
to diversify their own portfolios by participating in companies and
economies 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.
(small solid bullet) 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E OVERSEAS
Apr-82 0.01
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 28.00 0.10 100.02% $498
Mar-87 31.00 4.50 104.41% $518
Apr-87 30.00 7.27 107.18% $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 31.00 8.85 108.75% $547
Sep-87 30.00 -2.21 97.71% $532
Oct-87 31.00 -20.87 79.07% $419
Nov-87 30.00 0.91 100.83% $421
Dec-87 31.00 7.04 106.95% $448
Jan-88 31.00 -3.42 96.50% $431
Feb-88 29.00 2.66 102.58% $440
Mar-88 31.00 4.53 104.44% $458
Apr-88 30.00 1.65 101.57% $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 30.00 4.29 104.20% $435
Oct-88 31.00 4.43 104.34% $452
Nov-88 30.00 1.82 101.73% $458
Dec-88 31.00 0.20 100.11% $457
Jan-89 31.00 2.97 102.88% $468
Feb-89 28.00 1.73 101.65% $474
Mar-89 31.00 -0.09 99.82% $471
Apr-89 30.00 2.95 102.87% $483
May-89 31.00 -3.70 96.22% $463
Jun-89 30.00 -0.38 99.53% $459
Jul-89 31.00 9.35 109.26% $499
Aug-89 31.00 -0.71 99.21% $493
Sep-89 30.00 6.22 106.13% $521
Oct-89 31.00 -5.43 94.48% $490
Nov-89 30.00 5.39 105.31% $514
Dec-89 31.00 6.29 106.20% $544
Jan-90 31.00 -1.34 98.57% $534
Feb-90 28.00 -2.33 97.59% $519
Mar-90 31.00 3.78 103.69% $536
Apr-90 30.00 0.55 100.47% $537
May-90 31.00 6.54 106.44% $569
Jun-90 30.00 2.22 102.13% $579
Jul-90 31.00 5.06 104.97% $605
Aug-90 31.00 -10.19 89.74% $541
Sep-90 30.00 -9.50 90.42% $487
Oct-90 31.00 9.31 109.22% $530
Nov-90 30.00 -3.10 96.82% $511
Dec-90 31.00 -0.72 99.20% $504
Jan-91 31.00 0.97 100.88% $507
Feb-91 28.00 3.37 103.29% $522
Mar-91 31.00 -2.92 96.99% $504
Apr-91 30.00 2.20 102.11% $512
May-91 31.00 0.24 100.15% $511
Jun-91 30.00 -5.48 94.44% $481
Jul-91 31.00 4.96 104.87% $502
Aug-91 31.00 0.32 100.23% $501
Sep-91 30.00 4.07 103.99% $519
Oct-91 31.00 0.69 100.60% $520
Nov-91 30.00 -3.58 96.34% $499
Dec-91 31.00 3.48 103.39% $514
Jan-92 31.00 1.22 101.14% $517
Feb-92 29.00 -2.08 97.84% $504
Mar-92 31.00 -2.03 97.89% $492
Apr-92 30.00 6.22 106.13% $520
May-92 31.00 4.35 104.27% $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 31.00 2.49 102.40% $433
Jan-93 31.00 2.86 102.77% $443
Feb-93 28.00 1.96 101.88% $450
Mar-93 31.00 6.94 106.85% $478
Apr-93 30.00 6.65 106.56% $508
May-93 31.00 2.15 102.06% $516
Jun-93 30.00 -2.47 97.45% $501
Jul-93 31.00 3.95 103.86% $518
Aug-93 31.00 5.44 105.35% $543
Sep-93 30.00 -0.48 99.44% $538
Oct-93 31.00 3.62 103.53% $555
Nov-93 30.00 -4.22 95.70% $529
Dec-93 31.00 6.61 106.52% $561
Jan-94 31.00 6.52 106.43% $595
Feb-94 28.00 -1.76 98.16% $582
Mar-94 31.00 -2.48 97.44% $564
Apr-94 30.00 3.31 103.22% $580
May-94 31.00 -1.23 98.69% $570
Jun-94 30.00 -1.06 98.86% $562
Jul-94 31.00 2.65 102.56% $574
Aug-94 31.00 1.17 101.08% $577
Sep-94 30.00 -2.61 97.31% $560
Oct-94 31.00 2.06 101.97% $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 28.00 0.26 100.18% $512
Mar-95 31.00 3.08 102.99% $526
Apr-95 30.00 2.86 102.78% $538
May-95 31.00 1.39 101.30% $543
Jun-95 30.00 0.81 100.73% $544
Jul-95 31.00 4.44 104.35% $566
Aug-95 31.00 -2.78 97.14% $547
Sep-95 30.00 1.46 101.38% $553
Oct-95 31.00 -1.98 97.94% $539
Nov-95 30.00 1.16 101.08% $543
Dec-95 31.00 2.96 102.87% $556
Jan-96 31.00 1.88 101.79% $564
Feb-96 29.00 0.22 100.14% $562
Mar-96 31.00 1.53 101.44% $568
Apr-96 30.00 2.78 102.70% $581
May-96 31.00 0.06 99.97% $578
Jun-96 30.00 0.73 100.65% $580
Jul-96 31.00 -2.96 96.96% $560
Aug-96 31.00 0.75 100.66% $561
Sep-96 30.00 2.92 102.84% $575
Oct-96 31.00 -1.00 98.92% $566
Nov-96 30.00 5.22 105.13% $593
Dec-96 31.00 0.53 100.44% $593
Jan-97 31.00 0.00 99.91% $590
Feb-97 28.00 2.32 102.24% $601
Mar-97 31.00 0.91 100.82% $603
Apr-97 30.00 0.84 100.76% $606
May-97 31.00 6.25 106.16% $640
Jun-97 30.00 5.25 105.16% $671
Jul-97 31.00 3.39 103.30% $690
Aug-97 31.00 -7.53 92.39% $635
Sep-97 30.00 7.36 107.27% $678
Oct-97 31.00 1.00% -7.00 92.92% $628
Nov-97 30.00 1.00% -0.47 99.45% $622
Dec-97 31.00 1.00% 0.84 100.75% $624
Jan-98 31.00 1.00% 3.28 103.19% $641
Feb-98 28.00 1.00% 5.63 105.55% $674
Mar-98 31.00 1.00% 4.54 104.45% $701
Apr-98 30.00 1.00% 2.81 102.73% $717
May-98 31.00 1.00% -0.14 99.77% $713
Jun-98 30.00 1.00% -0.96 98.96% $702
Jul-98 31.00 1.00% 0.78 100.69% $704
Aug-98 31.00 1.00% -18.19 81.74% $573
Sep-98 30.00 1.00% -0.12 99.80% $570
Oct-98 31.00 1.00% 9.13 109.04% $619
Nov-98 30.00 1.00% 5.88 105.79% $652
Dec-98 31.00 1.00% 2.19 102.10% $663
Jan-99 31.00 1.00% 1.45 101.36% $669
Feb-99 28.00 1.00% -2.65 97.27% $649
Mar-99 31.00 1.00% 4.05 103.96% $672
Apr-99 30.00 1.00% 4.45 104.36% $698
May-99 31.00 1.00% -4.60 95.32% $663
Jun-99 30.00 1.00% 5.58 105.49% $696
Jul-99 31.00 1.00% 2.84 102.75% $712
Aug-99 31.00 1.00% 1.45 101.36% $719
Sep-99 30.00 1.00% 1.34 101.26% $725
Oct-99 31.00 1.00% 4.09 104.00% $751
Nov-99 30.00 1.00% 7.34 107.25% $802
Dec-99 31.00 1.00% 11.68 111.58% $892
Listed in Order Max 892
to match MFPR Min 419
</TABLE>
ASSET MANAGER: GROWTH PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND II
seeks to maximize total return over the long term by allocating its
assets among stocks, bonds, short-term instruments, and other
investments.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Allocating the fund's assets among stocks, bonds,
and short-term and money market instruments.
(small solid bullet) Maintaining a neutral mix over time of 70% of
assets in stocks, 25% of assets in bonds, and 5% of assets in
short-term and money market instruments.
(small solid bullet) Adjusting allocation among asset classes
gradually within the following ranges: stock class (50% - 100%), bond
class (0% - 50%), and short-term/money market class (0% - 50%).
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Analyzing an issuer using fundamental and/or
quantitative factors and evaluating each security's current price
relative to estimated long-term value in selecting investments.
INVESTOR PROFILE. 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, while spreading
its assets among all three asset classes, uses a more aggressive
approach by focusing on stocks for a higher potential return. The
value of each fund's investments and the income they generate will
vary. The graph below is based on a 5% Benchmark Rate of Return and
initial monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E ASSET MANAGER:GROWTH
Apr-82 0.01
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
Jan-97 31.00 4.27 104.18% $684
Feb-97 28.00 0.95 100.87% $687
Mar-97 31.00 -4.72 95.20% $651
Apr-97 30.00 4.19 104.10% $675
May-97 31.00 6.07 105.98% $713
Jun-97 30.00 2.97 102.88% $730
Jul-97 31.00 6.76 106.67% $776
Aug-97 31.00 -3.14 96.78% $748
Sep-97 30.00 3.69 103.60% $772
Oct-97 31.00 1.00% -2.37 97.55% $750
Nov-97 30.00 1.00% 2.88 102.80% $767
Dec-97 31.00 1.00% 1.74 101.65% $777
Jan-98 31.00 1.00% 0.00 99.91% $773
Feb-98 28.00 1.00% 6.11 106.03% $817
Mar-98 31.00 1.00% 3.71 103.62% $843
Apr-98 30.00 1.00% -0.31 99.61% $836
May-98 31.00 1.00% -1.01 98.91% $823
Jun-98 30.00 1.00% 2.35 102.27% $839
Jul-98 31.00 1.00% -0.87 99.05% $827
Aug-98 31.00 1.00% -12.59 87.34% $719
Sep-98 30.00 1.00% 3.73 103.64% $743
Oct-98 31.00 1.00% 6.36 106.27% $786
Nov-98 30.00 1.00% 5.00 104.91% $821
Dec-98 31.00 1.00% 5.38 105.29% $861
Jan-99 31.00 1.00% 2.94 102.85% $882
Feb-99 28.00 1.00% -2.59 97.33% $855
Mar-99 31.00 1.00% 1.00 100.91% $860
Apr-99 30.00 1.00% 2.97 102.88% $881
May-99 31.00 1.00% -1.74 98.18% $861
Jun-99 30.00 1.00% 4.96 104.87% $900
Jul-99 31.00 1.00% -2.04 97.88% $877
Aug-99 31.00 1.00% -0.24 99.67% $870
Sep-99 30.00 1.00% -2.03 97.89% $849
Oct-99 31.00 1.00% 4.08 103.99% $879
Nov-99 30.00 1.00% 1.76 101.68% $890
Dec-99 31.00 1.00% 5.69 105.60% $936
Listed in Order Max 936
to match MFPR Min 500
</TABLE>
CONTRAFUND PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND II seeks
lo ng-te rm capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Investing in securities of companies whose value
it believes is not fully recognized by the public.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns. The graph below is based
on a 5% Benchmark Rate of Return and initial monthly annuity income of
$500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E CONTRAFUND
Apr-82 0.01
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
Jan-97 31.00 3.86 103.77% $792
Feb-97 28.00 -2.78 97.15% $767
Mar-97 31.00 -2.59 97.33% $743
Apr-97 30.00 2.41 102.33% $757
May-97 31.00 6.18 106.09% $800
Jun-97 30.00 4.37 104.28% $831
Jul-97 31.00 8.59 108.50% $898
Aug-97 31.00 -2.82 97.10% $868
Sep-97 30.00 6.77 106.68% $922
Oct-97 31.00 1.00% -3.02 96.90% $890
Nov-97 30.00 1.00% -0.05 99.87% $885
Dec-97 31.00 1.00% 1.84 101.75% $897
Jan-98 31.00 1.00% -0.10 99.81% $892
Feb-98 28.00 1.00% 7.27 107.19% $952
Mar-98 31.00 1.00% 4.86 104.77% $994
Apr-98 30.00 1.00% 0.95 100.87% $998
May-98 31.00 1.00% -2.34 97.58% $970
Jun-98 30.00 1.00% 5.38 105.29% $1,017
Jul-98 31.00 1.00% 0.14 100.05% $1,014
Aug-98 31.00 1.00% -14.97 84.96% $858
Sep-98 30.00 1.00% 5.83 105.74% $903
Oct-98 31.00 1.00% 3.29 103.20% $928
Nov-98 30.00 1.00% 6.66 106.57% $985
Dec-98 31.00 1.00% 12.16 112.06% $1,100
Jan-99 31.00 1.00% 5.73 105.64% $1,157
Feb-99 28.00 1.00% -3.68 96.25% $1,109
Mar-99 31.00 1.00% 3.56 103.47% $1,143
Apr-99 30.00 1.00% 2.14 102.06% $1,162
May-99 31.00 1.00% -2.02 97.90% $1,133
Jun-99 30.00 1.00% 5.41 105.32% $1,188
Jul-99 31.00 1.00% -1.65 98.27% $1,163
Aug-99 31.00 1.00% -2.92 97.00% $1,123
Sep-99 30.00 1.00% -0.32 99.60% $1,114
Oct-99 31.00 1.00% 3.66 103.57% $1,149
Nov-99 30.00 1.00% 3.96 103.87% $1,189
Dec-99 31.00 1.00% 8.89 108.80% $1,288
Listed in Order Max 1,288
to match MFPR Min 500
</TABLE>
GROWTH OPPORTUNITIES PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND III
seeks to provide capital growth.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Potentially investing in other types of
securities, including bonds which may be lower-quality debt
securities. These securities can be more volatile due to increased
sensitivity to interest rate increases, and adverse issuer, political,
regulatory, market, or economic developments.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both. The value of the fund's investments will vary and can
decline in response to adverse issuer, political, regulatory, market
or economic developments.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors seeking
growth of capital. The investment philosophy is not constrained by any
particular investment style. The fund's assets may be invested in
securities of foreign issuers in addition to securities of domestic
issuers. The graph below is based on a 5% Benchmark Rate of Return and
initial monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E GROWTH OPPORTUNITIES
Apr-82 0.01
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
Jan-97 31.00 4.74 104.65% $725
Feb-97 28.00 0.95 100.87% $729
Mar-97 31.00 -5.10 94.82% $688
Apr-97 30.00 4.57 104.48% $716
May-97 31.00 6.49 106.40% $759
Jun-97 30.00 3.32 103.23% $780
Jul-97 31.00 7.71 107.62% $836
Aug-97 31.00 -3.80 96.12% $801
Sep-97 30.00 4.17 104.08% $830
Oct-97 31.00 1.00% -2.00 97.92% $809
Nov-97 30.00 1.00% 3.53 103.44% $834
Dec-97 31.00 1.00% 2.77 102.68% $853
Jan-98 31.00 1.00% 0.42 100.33% $852
Feb-98 28.00 1.00% 6.25 106.17% $901
Mar-98 31.00 1.00% 3.11 103.02% $924
Apr-98 30.00 1.00% -0.50 99.42% $915
May-98 31.00 1.00% -0.70 99.22% $904
Jun-98 30.00 1.00% 2.40 102.32% $922
Jul-98 31.00 1.00% 0.34 100.25% $920
Aug-98 31.00 1.00% -12.97 86.96% $797
Sep-98 30.00 1.00% 6.16 106.07% $842
Oct-98 31.00 1.00% 7.65 107.56% $902
Nov-98 30.00 1.00% 6.42 106.33% $955
Dec-98 31.00 1.00% 5.39 105.30% $1,002
Jan-99 31.00 1.00% 0.92 100.83% $1,006
Feb-99 28.00 1.00% -4.71 95.22% $954
Mar-99 31.00 1.00% 2.53 102.44% $973
Apr-99 30.00 1.00% 4.16 104.07% $1,009
May-99 31.00 1.00% -0.66 99.26% $997
Jun-99 30.00 1.00% 4.37 104.28% $1,036
Jul-99 31.00 1.00% -2.33 97.59% $1,007
Aug-99 31.00 1.00% -2.47 97.45% $977
Sep-99 30.00 1.00% -3.42 96.50% $939
Oct-99 31.00 1.00% 3.86 103.77% $970
Nov-99 30.00 1.00% 0.13 100.05% $967
Dec-99 31.00 1.00% 2.34 102.25% $985
Listed in Order Max 1,036
to match MFPR Min 500
</TABLE>
BALANCED PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND III seeks both
income and growth of capital.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing approximately 60% of assets in stocks
and other equity securities and the remainder in bonds and other debt
securities, including lower-quality debt securities when its outlook
is neutral.
(small solid bullet) Investing at least 25% of total assets in
fixed-income senior securities (including debt securities and
preferred stock).
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) With respect to equity investments, emphasizing
above-average income-producing equity securities, which tend to lead
to investments in stocks that have more "value" characteristics than
"growth" characteristics.
(small solid bullet) Analyzing a security's issuer using fundamental
factors and evaluating each security's current price relative to
estimated long-term value in selecting investments. The value of the
fund's investments will vary from day to day, and can decline in
response to interest rate increases, adverse issuer, political,
regulatory or economic developments.
INVESTOR PROFILE. The fund may be appropriate for investors who seek a
balance between stocks and bonds. The fund may invest its assets in
securities of foreign issuers in addition to domestic issuers. The
graph below is based on a 5% benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E BALANCED
Apr-82 0.01
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
Jan-97 31.00 3.19 103.10% $575
Feb-97 28.00 1.68 101.60% $582
Mar-97 31.00 -2.80 97.12% $563
Apr-97 30.00 3.78 103.69% $582
May-97 31.00 3.96 103.87% $602
Jun-97 30.00 3.66 103.57% $621
Jul-97 31.00 5.58 105.49% $652
Aug-97 31.00 -4.66 95.26% $619
Sep-97 30.00 4.01 103.92% $640
Oct-97 31.00 1.00% -2.11 97.81% $624
Nov-97 30.00 1.00% 2.44 102.36% $636
Dec-97 31.00 1.00% 2.03 101.94% $645
Jan-98 31.00 1.00% 1.10 101.01% $649
Feb-98 28.00 1.00% 3.72 103.64% $670
Mar-98 31.00 1.00% 3.76 103.67% $692
Apr-98 30.00 1.00% 0.81 100.73% $694
May-98 31.00 1.00% 0.00 99.91% $691
Jun-98 30.00 1.00% 2.26 102.18% $703
Jul-98 31.00 1.00% -0.07 99.84% $699
Aug-98 31.00 1.00% -10.81 89.11% $620
Sep-98 30.00 1.00% 5.70 105.61% $653
Oct-98 31.00 1.00% 3.66 103.57% $673
Nov-98 30.00 1.00% 3.73 103.64% $695
Dec-98 31.00 1.00% 3.53 103.44% $716
Jan-99 31.00 1.00% 1.12 101.03% $720
Feb-99 28.00 1.00% -1.78 98.14% $704
Mar-99 31.00 1.00% 2.50 102.41% $718
Apr-99 30.00 1.00% 3.21 103.12% $738
May-99 31.00 1.00% -2.24 97.68% $718
Jun-99 30.00 1.00% 2.10 102.02% $729
Jul-99 31.00 1.00% -2.43 97.49% $708
Aug-99 31.00 1.00% -1.08 98.84% $697
Sep-99 30.00 1.00% -1.87 98.05% $680
Oct-99 31.00 1.00% 2.83 102.74% $696
Nov-99 30.00 1.00% 0.00 99.92% $693
Dec-99 31.00 1.00% 2.30 102.21% $705
Listed in Order Max 738
to match MFPR Min 500
</TABLE>
GROWTH & INCOME PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND III
seeks high total return through a combination of current income and
capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing a majority of assets in common stocks
with a focus on those that pay current dividends and show potential
for capital appreciation.
(small solid bullet) Potentially investing in bonds, including
lower-quality debt securities, as well as stocks that are not
currently paying dividends, but offer prospects for future income or
capital appreciation.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position, and market and economic
conditions to select investments.
INVESTOR PROFILE. 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
investments. The graph below is based on a 5% benchmark Rate of Return
and initial monthly annuity income rate of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E GROWTH & INCOME
Apr-82 0.01
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
Feb-95 28.00
Mar-95 31.00
Apr-95 30.00
May-95 31.00
Jun-95 30.00
Jul-95 31.00
Aug-95 31.00
Sep-95 30.00
Oct-95 31.00
Nov-95 30.00
Dec-95 31.00
Jan-96 31.00
Feb-96 29.00
Mar-96 31.00
Apr-96 30.00
May-96 31.00
Jun-96 30.00
Jul-96 31.00
Aug-96 31.00
Sep-96 30.00
Oct-96 31.00
Nov-96 30.00
Dec-96 31.00 $500
Jan-97 31.00 2.50 102.41% $510
Feb-97 28.00 0.20 100.12% $509
Mar-97 31.00 -4.38 95.54% $484
Apr-97 30.00 5.40 105.31% $508
May-97 31.00 5.60 105.51% $533
Jun-97 30.00 5.12 105.03% $558
Jul-97 31.00 8.09 108.00% $600
Aug-97 31.00 -5.07 94.85% $567
Sep-97 30.00 5.26 105.17% $594
Oct-97 31.00 1.00% -2.82 97.10% $574
Nov-97 30.00 1.00% 4.48 104.39% $597
Dec-97 31.00 1.00% 2.22 102.13% $607
Jan-98 31.00 1.00% 0.56 100.47% $608
Feb-98 28.00 1.00% 6.85 106.77% $646
Mar-98 31.00 1.00% 5.08 104.99% $676
Apr-98 30.00 1.00% 0.00 99.92% $672
May-98 31.00 1.00% -1.49 98.43% $659
Jun-98 30.00 1.00% 5.12 105.03% $690
Jul-98 31.00 1.00% -0.69 99.23% $681
Aug-98 31.00 1.00% -14.17 85.76% $582
Sep-98 30.00 1.00% 7.49 107.40% $622
Oct-98 31.00 1.00% 7.79 107.70% $668
Nov-98 30.00 1.00% 6.39 106.30% $707
Dec-98 31.00 1.00% 5.49 105.40% $742
Jan-99 31.00 1.00% 2.23 102.14% $755
Feb-99 28.00 1.00% -1.92 98.00% $737
Mar-99 31.00 1.00% 3.15 103.06% $756
Apr-99 30.00 1.00% 2.81 102.73% $774
May-99 31.00 1.00% -2.85 97.07% $748
Jun-99 30.00 1.00% 4.46 104.37% $778
Jul-99 31.00 1.00% -3.51 96.41% $747
Aug-99 31.00 1.00% -1.33 98.59% $733
Sep-99 30.00 1.00% -1.78 98.14% $716
Oct-99 31.00 1.00% 5.26 105.17% $750
Nov-99 30.00 1.00% 0.59 100.51% $751
Dec-99 31.00 1.00% 2.25 102.16% $764
Listed in Order Max 778
to match MFPR Min 484
</TABLE>
MID CAP PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND
III seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Investing at least 65% of total assets in
securities of companies with medium market capitalizations (those with
market capitalizations similar to companies in the S&P MidCap
400).
(small solid bullet) Potentially investing in companies with
smaller or larger market capitalizations.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" or "value" stocks
or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors
seeking long-term growth of capital through equity securities,
including growth or value stocks, or a combination of both. The graph
below is based on a 5% benchmark Rate of Return and initial monthly
annuity income rate of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E MID CAP
Apr-82 0.01
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
Feb-95 28.00
Mar-95 31.00
Apr-95 30.00
May-95 31.00
Jun-95 30.00
Jul-95 31.00
Aug-95 31.00
Sep-95 30.00
Oct-95 31.00
Nov-95 30.00
Dec-95 31.00
Jan-96 31.00
Feb-96 29.00
Mar-96 31.00
Apr-96 30.00
May-96 31.00
Jun-96 30.00
Jul-96 31.00
Aug-96 31.00
Sep-96 30.00
Oct-96 31.00
Nov-96 30.00
Dec-96 31.00
Jan-97 31.00
Feb-97 28.00
Mar-97 31.00
Apr-97 30.00
May-97 31.00
Jun-97 30.00
Jul-97 31.00
Aug-97 31.00
Sep-97 30.00
Oct-97 31.00 1.00%
Nov-97 30.00 1.00%
Dec-97 31.00 1.00%
Jan-98 31.00 1.00%
Feb-98 28.00 1.00%
Mar-98 31.00 1.00%
Apr-98 30.00 1.00%
May-98 31.00 1.00%
Jun-98 30.00 1.00%
Jul-98 31.00 1.00%
Aug-98 31.00 1.00%
Sep-98 30.00 1.00%
Oct-98 31.00 1.00%
Nov-98 30.00 1.00%
Dec-98 31.00 1.00% 3.10 $500
Jan-99 31.00 1.00% 2.04 101.95% $508
Feb-99 28.00 1.00% -5.42 94.51% $478
Mar-99 31.00 1.00% 4.92 104.83% $499
Apr-99 30.00 1.00% 6.90 106.81% $531
May-99 31.00 1.00% -0.99 98.93% $523
Jun-99 30.00 1.00% 6.61 106.52% $555
Jul-99 31.00 1.00% -0.17 99.74% $551
Aug-99 31.00 1.00% 0.77 100.68% $553
Sep-99 30.00 1.00% -1.86 98.06% $540
Oct-99 31.00 1.00% 6.53 106.44% $572
Nov-99 30.00 1.00% 6.78 106.69% $608
Dec-99 31.00 1.00% 16.15 116.05% $703
Listed in Order Max 703
to match MFPR Min 478
</TABLE>
MORGAN STANLEY ASSET MANAGEMENT
EMERGING MARKETS DEBT PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks high total return by
investing primarily in Fixed Income Securities of government and
government-related issuers and, to a lesser extent, of corporate
issuers in emerging market countries.
(small solid bullet) APPROACH. Morgan Stanley Asset Management
seeks high total return by investing in a portfolio of emerging market
debt that offers low correlation to many other asset classes. Using
macroeconomic and fundamental analysis, Morgan Stanley Asset
Management seeks to identify developing countries that are undervalued
and have attractive or improving fundamentals. After the country
allocation is determined, the sector and security selection is made
within each country.
(small solid bullet) PROCESS. Morgan Stanley Asset Management's
global allocation team analyzes the global economic environment and
its impact on emerging markets. Morgan Stanley As set Management
focuses on investing in countries that show signs of positive
fundamental change. This analysis considers macroeconomic factors,
such as GDP growth, inflation, monetary policy, fiscal policy and
interest rates and sociopolitical factors such as political risk,
leadership, social stability, and commitment to reform. In selecting
securities, Morgan Stanley Asset Management first examines
yield curves with respect to a country and then considers
instrument-specific criteria, including: (1) spread duration; (2) real
interest rates; and (3) liquidity. The Portfolio's holdings may range
in maturity from overnight to 30 years or more and will not be subject
to any minimum credit rating standard. Morgan Stanley Asset
Management may , when or if available, use hedging strategies,
including the use of derivatives to protect the Portfolio from
overvalued currencies or to take advantage of undervalued currencies.
EMERGING MARKETS EQUITY PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation by investing primarily in Equity Securities of issuers in
emerging market countries.
(small solid bullet) APPROACH. Mor gan Stanley Asset Management
seeks to maximize returns by investing in growth-oriented equity
securities in emerging markets. Mor gan Stanley Asset Management's
investment approach combines top-down country allocation with
bottom-up stock selection. Investment selection criteria include
attractive growth characteristics, reasonable valuations and
managements with a strong shareholder value orientation.
(small solid bullet) PROCESS. Morgan Stanley Asset Management's
global allocation team analyzes the global economic environment,
particularly its impact on emerging markets and allocates the
Portfolio's assets among emerging markets based on relative economic,
political, and social fundamentals, stock valuations and investor
sentiment. Morgan Stanley Asset Management invests within
countries based on the work of country specialists who conduct
extensive fundamental analysis of issuers within these markets and
seek to identify issuers with strong earnings growth prospects. To
manage risk, Morgan Stanley Asset Management emphasizes
thorough macroeconomic and fundamental research.
GLOBAL EQUITY PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation by investing primarily in Equity Securities of issuers
throughout the world, including U.S. issuers .
(small solid bullet) APPROACH. Morgan Stanley Asset
Management seeks to maintain a diversified portfolio of global equity
securities based on individual stock selection. Morgan Stan ley
Asset Management emphasizes a bottom-up approach to investing that
seeks to identify securities of undervalued issuers.
(small solid bullet) PROCESS. Morgan Stanley Asset Management
selects securities for investment from a universe of eligible issuers
consisting of approximately 3,200 companies in the Mor gan Stanley
Capital International (MSCI) World Index. Morgan Stanley Asset
Management expects to invest at least 20% of the Portfolio's total
assets in the common stocks of U.S. issuers. The investment process is
value driven and based on individual stock selection. Morgan Stanley
Asset Management considers value criteria with an emphasis on
cash flow and the intrinsic value of company assets. Securities which
appear undervalued according to these criteria are then subjected to
in-depth fundamental analysis. Morgan Stanley Asset Management
conducts a thorough investigation of the issuer's balance sheet, cash
flow and income statement and assesses the company's business
franchise, including product, competitiveness, market positioning, and
industry structure. Meetings with senior company management are
integral to the investment process.
INTERNATIONAL MAGNUM PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation by investing primarily in Equity Securities of non-U.S.
issuers domiciled in EAFE countries.
(small solid bullet) APPROACH. Morgan Stanley A sset Management
seeks to achieve superior long-term returns by creating a diversified
portfolio of undervalued international equity securities. To
achieve this goal, Morgan Stanley Asset Management uses a combination
of strategic geographic asset allocation and fundamental, value
oriented stock selection.
(small solid bullet) PROCESS. The Portfolio is managed using a
two-part process combining the expertise of investment teams based in
New York, London, Tokyo, and Singapore. The New York-based portfolio
management team decides upon the appropriate allocation of the
Portfolio's assets among Europe, Japan and developed Asia, including
Australia and New Zealand. Regional allocation decisions are based on
variety of factors, including relative valuations, earnings
expectations, macroeconomic factors, as well as input from the
regional stock selection teams and from the Morgan Stanley Asset
Management's Asset Allocation Committee, which is made up of
several of the Morgan Stanley Asset Management's most senior
investment officers. Once the allocations to Europe, Asia, and Japan
have been determined, three overseas investment teams in London (for
European stocks), Tokyo (for Japanese stocks) and Singapore (for Asian
stocks) decide which stocks to purchase for their respective
geographic regions. The regional portfolio management teams look for
stocks that they believe to be undervalued by the market. The regional
specialists analyze each company's finances, products, and
management, typically meeting with each company's management, before a
stock is purchased for the Portfolio. The Portfolio invests
primarily in countries comprising the MSCI Europe, Australiasia, Far
East (EAFE) Index (the "EAFE Index"). EAFE countries include Japan,
most nations in Western Europe, and the more developed nations of
Asia, such as Australia, New Zealand, Hong Kong, and Singapore.
However, the Portfolio also may invest up to 5% of its assets in
countries not included in the EAFE Index.
PBHG
SELECT 20 PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Select 20 Portfolio, a non-diversified
Portfolio, seeks long-term growth of capital.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in growth securities of a
limited number (i.e., no more than 20 stocks) of large capitalization
companies that, in Pilgrim Baxter & Associates, Ltd.'s (the "Adviser")
opinion, have strong business momentum , earnings growth and
capital appreciation potential. These companies will generally have
market capitalization in excess of $1 billion.
(small solid bullet) The growth securities in the Portfolio are
primarily common stocks, but may also include other equity securities
such as warrants and rights to purchase common stocks, and convertible
securities.
(small solid bullet) The Portfolio is non-diversified, which means its
performance is dependent upon the securities of a smaller number of
companies. As a result, the impact of a single change in value
(positive or negative) of a single holding may be magnified.
GROWTH II PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks capital appreciation.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in growth securities of
small and medium sized companies that, in the Adviser's opinion, have
strong business momentum, earnings growth and capital
appreciation potential. These companies will generally have market
capitalizations or annual revenues between $500 million and $10
billion.
(small solid bullet) The growth securities in the Portfolio are
primarily common stocks, but may also include other equity securities
such as warrants and rights to purchase common stocks, and convertible
securities.
(small solid bullet) The Portfolio emphasizes small and medium sized
growth companies, so it may be more volatile than the stock market in
general, as measured by the S&P 500.
SELECT VALUE PORTFOLIO (PREVIOUSLY CALLED LARGE CAP VALUE PORTFOLIO)
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term growth of capital
and income. Current income is a secondary objective.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in value securities of no
more than 30 large capitalization companies that, in the
opinion of the Adviser and Pilgrim Baxter Value Investors, Inc. (the
"Sub-Adviser"), are currently underpriced using certain financial
measurements, such as their price-to-earnings ratios.
(small solid bullet) The value securities in the Portfolio are
primarily common stocks, but may also include other equity
securities such as warrants and rights to purchase common stocks and
convertible securities. The Portfolio holds a limited number of
stocks and the impact of the change in value (positive or negative) of
a single holding may be magn ified.
SMALL CAP VALUE PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks to achieve above-average
total return over a market cycle of three to five years, consistent
with reasonable risk.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in value securities of
companies whose market capitalizations are within the range of the
Russell 2000 index.
(small solid bullet) The value securities in the Portfolio are
primarily common stocks that, in the opinion of the Adviser and the
Sub-Adviser, are currently underpriced using certain financial
measurements, such as their price-to-earnings ratios, but may also
include other equity securities such as warrants and rights to
purchase common stocks and convertible securities.
(small solid bullet) The Portfolio's sector weightings are generally
within 10% of the Russell 2000's sector weightings. In addition, the
Portfolio generally has lower price-to-earnings ratios than the
Russell 2000.
(small solid bullet) The Portfolio emphasizes value securities of
smaller sized companies, so it is likely to be more volatile than the
stock market in general, as measured by the S&P 500 Index.
TECHNOLOGY & COMMUNICATIONS PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio, a non- diversified
Portfolio, seeks long-term growth of capital. Current income is
incidental to the Portfolio's objective.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in common stocks of
companies doing business in the technology and communications sectors
of the market. The Portfolio is concentrated which means it will
invest 25% of more of its total assets in one or more of the
industries within these sectors. These industries may include computer
software and hardware, network and cable broadcasting, semiconductors,
defense and data storage and retrieval, and biotechnology.
(small solid bullet) The Portfolio offers investors significant
growth potential because it invests in companies that may be
responsible for breakthrough products or technologies or positioned to
take advantage of cutting-edge developments.
(small solid bullet) The Portfolio's holdings may range from
smaller companies developing new technologies or pursuing scientific
breakthroughs to large, blue chip firms with established track records
in developing, using or marketing scientific advances.
(small solid bullet) The Portfolio is non-diversified, which means
it its performance is dependent on the securities of a smaller number
of companies. As a result, the impact of a change in value
(positive or negative) of a single holding may be magnified.
(small solid bullet) Securities of technology companies are strongly
affected by worldwide scientific and technological developments and
governmental policies and, therefore, are generally more volatile than
securities of companies not dependent upon or associated with
technology issues.
STRONG
MID CAP GROWTH FUND II
OBJECTIVE AND STRATEGY
(small solid bullet) Mid Cap Growth Fund II seeks capital growth
through investments in mid-sized companies.
(small solid bullet) The Fund invests primarily in equity securities
that the Adviser believes have above-average growth prospects.
(small solid bullet) Under normal market conditions, the Fund will
invest at least 65% of its total assets in equity securities,
including (a) common stocks, (b) preferred stocks, and (c) securities
that are convertible into common or preferred stocks, such as warrants
and convertible bonds.
(small solid bullet) While the emphasis of the Fund is clearly on
equity securities, the Fund may invest a limited portion of its assets
in debt obligations when the Adviser perceives that they are more
attractive than stocks on a long-term basis.
(small solid bullet) The Fund may invest up to 35% of its total assets
in debt obligations, including intermediate-to-long term corporate or
U.S. government debt securities. Although the debt obligations in
which it invests will be primarily investment grade, the Fund may
invest up to 5% of its net assets in non-investment grade debt
obligations.
(small solid bullet) When the Adviser determines that market
conditions warrant a temporary defensive position, the Fund may invest
without limitation in cash and short-term fixed-income securities.
(small solid bullet) The Fund may invest up to 25% of its assets in
foreign securities, including both direct investments and investments
made through depository receipts.
(small solid bullet) The Fund generally will invest in mid-size
companies whose earnings are believed to be in a relatively strong
growth trend, and, to a lesser extent, in companies in which
significant further growth is not anticipated but whose market value
is thought to be undervalued.
(small solid bullet) In identifying companies with favorable growth
prospects, the Adviser ordinarily looks to certain characteristics,
such as (a) prospects for above-average sales and earnings growth; (b)
high return on invested capital; (c) overall financial strength,
including sound financial and accounting policies and a strong balance
sheet; (d) competitive advantages, including innovative products and
services; (e) effective research, product development, and marketing;
and (f) stable, capable management.
OPPORTUNITY FUND II
OBJECTIVE AND STRATEGY
(small solid bullet) Opportunity Fund II seeks capital growth.
(small solid bullet) The Fund invests primarily in equity securities
and currently emphasizes investments in medium-sized companies the
Adviser believes are under-researched and attractively valued.
(small solid bullet) The Fund will invest at least 70% of its total
assets in equity securities, including (a) common stocks, (b)
preferred stocks, and (c) securities that are convertible into common
or preferred stocks, such as warrants and convertible bonds.
(small solid bullet) Under normal market conditions, the Fund expects
to be fully invested in equities.
(small solid bullet) The Fund may, however, invest up to 30% of its
net assets in debt obligations, including intermediate- to long-term
corporate or U.S. government debt securities. Although the debt
obligations in which it invests will be primarily investment grade,
the Fund may invest up to 5% of its net assets in non-investment grade
debt obligations.
(small solid bullet) When the Adviser determines that market
conditions warrant a temporary defensive position, it may use that
allowance to invest up to 30% of its net assets in cash and short-term
fixed-income securities.
(small solid bullet) The Fund may invest up to 25% of its assets in
foreign securities, including both direct investments and investments
made through depository receipts.
(small solid bullet) In selecting its equity investments, the Adviser
seeks to identify attractive investment opportunities that have not
become widely recognized by other stock analysts or the financial
press. Through first-hand research that often includes on-site visits
with the leaders of companies, the Adviser looks for companies with
fundamental value or growth potential that is not yet reflected in
their current market prices. In many cases, companies in the small-
and medium-capitalization markets are under-followed and, as a result,
less efficiently priced than their larger, better known counterparts.
(small solid bullet) The Fund's investments are therefore likely to
consist, in part, of securities in small- and medium-sized companies.
Many of these companies may have successfully emerged from the
start-up phase and have potential for future growth. Because of their
longer track records and more seasoned management, they generally pose
less investment uncertainty than do the smallest companies. In
general, smaller-capitalization companies often involve greater risks
than investments in established companies.
WARBURG PINCUS
INTERNATIONAL EQUITY PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation.
(small solid bullet) The Portfolio pursues its investment objective by
investing in equity securities of companies located or conducting a
majority of their business outside the United States.
(small solid bullet) The Portfolio i nten ds to invest
substantially all of its assets in common stocks, warrants and
securities convertible into or exchangeable for common stocks, and
will generally invest in at least three countries other than the
United States.
(small solid bullet) The Portfolio intends to diversify across
securities of issues located in a number of foreign countries, but
from time to time may invest a significant portion of its assets in a
single country.
(small solid bullet) Although the Portfolio emphasizes developed
countries, it may also invest in emerging markets.
(small solid bullet) In choosing equity securities, the Portfolio
managers look for companies of any size whose securities appear to be
discounted relative to earnings, assets, or projected growth. The
Portfolio managers determine value based on research and analysis,
taking all relevant factors into account.
RISK. In addition to risks associated with equity securities,
international investment entails special risk considerations including
currency fluctuations, lower liquidity, economic instability,
political uncertainty, and differences in accounting methods.
GLOBAL POST-VENTURE CAPITAL PORTFOLIO ( PREVIOUSLY CALLED
POST-VENTURE CAPITAL PORTFOLIO)
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term growth of
capital.
(small solid bullet) The Portfolio pursues an aggressive investment
strategy by investing primarily in equity securities of U.S. and
foreign companies considered to be in their post-venture
capital stage of development.
(small solid bullet) Under normal market conditions, the Portfolio
will invest up to at least 65% of its total assets in equity
securities of "post-venture capital companies." A post-venture capital
company is a company that has received venture capital financing
either (a) during the early stages of the company's existence or the
early stages of the development of a new product or service or (b) as
part of a restructuring or recapitalization of the company. In
addition, the investment of venture capital financing, distribution of
such company's securities to venture capital investors, or initial
public offering ("IPO"), will have been made within ten years prior to
the Portfolio's purchase of the company's securities.
(small solid bullet) The Portfolio will invest in three
countries, including the U.S.
(small solid bullet) Up to 10% of the Portfolio's assets may be
invested in private equity portfolios that invest in venture capital
companies.
(small solid bullet) A portion of the Portfolio's assets may be
invested in assets of companies expected to experience "special
situations," such as mergers or reorganizations.
RISK. The main risks associated with the portfolio include risks
associated with equity securities, particularly small, start-up and
special-situation companies. I n addition to risks associated with
equity securities, international investment entails special risk
considerations including currency fluctuations, lower liquidity,
economic instability, political uncertainty, and differences in
accounting methods. The Portfolio employs aggressive strategies
and may not be appropriate for all investors.
SMALL COMPANY GROWTH PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks capital growth by investing
primarily in equity securities of small sized U.S. companies that
represent attractive opportunities for capital growth.
(small solid bullet) The Portfolio considers a "small" company to be
one that has a market capitalization, measured at the time the
Portfolio purchases a security of that company, within the range of
capitalizations of companies represented in the Russell 2000 Index. As
of December 31, 1999 , the Russell 2000 Index included companies
with market capitalizations between $17.8 million and $1.3 billion.
Companies that outgrow the definition of small company after the
Portfolio has purchased its securities continue to be considered small
for purposes of the Portfolio's investment policies.
(small solid bullet) Small companies may (1) still be in the
development stage, (2) be older companies that appear to be entering a
new stage of growth, or (3) be companies providing products or
services with a high unit-volume growth rate.
(small solid bullet) The Portfolio may also invest in securities of
emerging-growth companies, which can be either small- or
medium -sized companies that have passed their start up phase
and that show positive earnings and prospects of achieving significant
profit and gain in a relatively short period of time. Emerging growth
companies generally stand to benefit from new products or services,
technological developments or changes in management and other factors
and include smaller companies experiencing unusual developments
affecting their market value.
(small solid bullet) The Portfolio is non-diversified and may invest a
greater portion of its assets in the securities of a smaller number of
issuers.
RISK. The Portfolio's main risks are the risks associated with equity
securities, particularly small, start-up, and special-situation
companies. The Portfolio may be subject to volatility resulting from
its non-diversified status.
FUNDS' AVAILABILITY TO SEPARATE ACCOUNTS
Shares of the Funds may also be sold to a variable life separate
account of Fidelity Investments Life and to variable annuity and
variable life separate accounts of other insurance companies. For a
discussion of the possible consequences associated with having the
Funds available to such other separate accounts, see RESOLVING
MATERIAL CONFLICTS on page 161 .
THE INVESTMENT ADVISERS
FIDELITY
The investment adviser for the Fidelity Funds is Fidelity Management &
Research Company, a registered adviser under the Investment Advisers
Act of 1940. Fidelity Management & Research Company ( 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 o f February 29, 2000, FMR managed over $829
billion in assets . The portfolios of the Fidelity Funds, as part
of their operating expenses, pay an investment management fee to
FMR . These fees are part of the Fidelity Funds' expenses. See
the prospectuses for the Fidelity Funds for discussions of the
Fidelity Funds' expenses. Fidelity Investments Money Managemen t,
Inc., a subsidiary of FMR, chooses certain investments for some of the
Fidelity Funds. Beginning January 1, 2001, FMR Co., Inc., a
su bsidiary of FMR, will also choose certain investments for the
Fidelity Funds. Foreign affiliates of FMR may help choose
investments for some of the Fidelity Funds. BT is a wholly-owned
subsidiary of Bankers Trust Corporation. BT currently serves as
sub-adviser and custodian for the Index 500 Portfolio.
MORGAN STANLEY ASSET MANAGEMENT
On December 1, 1998, Morgan Stanley Asset Management Inc. changed
its name to Morgan Stanley Dean Witter Investment Management Inc. but
continues to do business in certain instances using the name Morgan
Stanley Asset Management. The investment Adviser for T he Universal
Institutional Funds, Inc. is Morgan Stanley Asset Management, which is
a wholly-owned subsidiary of Morgan Stanley Dean Witter & Co., which
is a preeminent global financial services firm that maintains leading
market positions in each of its three primary businesses - securities,
asset management and credit services. Morgan Stanley Asset
Management, a registered investment Adviser under the Investment
Advisers Act of 1940, as amended, serves as investment Adviser to
numerous open-end and closed-end investment companies as well as to
employee benefit plans, endowment funds, foundations and other
institutional investors. Morgan Stanley Asset Management's
principal business office is located at 1221 Avenue of the Americas,
New York, New York 10020.
PBHG
The investment Adviser for the PBHG Insurance Series Fund, Inc. is
Pilgrim Baxter & Associates, Ltd. ("Pilgrim Baxter"), a professional
investment management firm and registered investment Adviser that,
along with its predecessors, has been in business since 1982. The
controlling shareholder of Pilgrim Baxter is United Asset Management
Corporation ("UAM"), a New York stock exchange listed holding company
principally engaged through affiliated firms, in providing
institutional investments management services and acquiring
institutional investment management firms. UAM's headquarters are
located at One International Place, Boston, Massachusetts 02110. The
principal business address of the Adviser is 825 Duportail
Road, Wayne, Pennsylvania 19087. Pilgrim Baxter Value Investors,
Inc., the Sub-Adviser, is a wholly owned subsidiary of Pilgrim Baxter
and is a registered investment Adviser that was formed in 1940. As
with the Adviser, the controlling shareholder of the Sub-Adviser is
UAM. The principal business address of the Sub-Adviser is 825
Duportail Road, Wayne, Pennsylvania 19087.
STRONG
The investment Adviser for the Strong Funds is Strong Capital
Management, Inc. The Adviser began conducting business in 1974. Since
then, its principal business has been providing continuous investment
supervision for individuals and institutional accounts, such as
pension funds and profit-sharing plans, as well as mutual funds,
several of which are funding vehicles for variable insurance products.
The Adviser's principal mailing address is P.O. Box 2936, Milwaukee,
Wisconsin 53201. Mr. Richard S. Strong, the Chairman of the Board of
the Fund, is the controlling shareholder of the Adviser.
WARBURG PINCUS
The investment Adviser for the Warburg Pincus Trust is Credit
Suisse Asset Management, LLC. Credit Suisse Asset Management, LLC is a
member of Credit Suisse Asset Management, the institutional asset
management and mutual fund arm of Credit Suisse Group, one of the
world's leading banks. Credit Suisse Asset Management companies manage
approximately $72 billion in the U.S. and $203 billion globally.
IMPORTANT
You will find more complete information about the Funds, including the
risks associated with each portfolio, in their respective
prospectuses. You should read them in conjunction with this
prospectus.
FACTS ABOUT THE CONTRACT
PURCHASE OF A CONTRACT
We offer the Contracts only in states in which we have obtained
approval. Two types of Contracts are available. You may
purchase: (1) a NON-QUALIFIED CONTRACT using money from any source;
and (2) a QUALIFIED CONTRACT with money rolled over from a
qualified retirement plan, such as a 401(k) plan, 403(b) plan or IRA.
(small solid bullet) The minimum Purchase Payment for a Contract is
generally $25,000.
(small solid bullet) 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.
(small solid bullet) 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.
(small solid bullet) However, if you purchase the Contract as a
Qualified Contract (IRA), you must be the sole Owner of the Contract.
(small solid bullet) Generally, for all Contracts either you or the
Joint Annuitant must be no more than 85 years old.
(small solid bullet) APPLICATION AND INITIAL PURCHASE PAYMENT
When we receive your properly completed application, we apply your
payment to the purchase of a Contract within two valuation periods
after receipt at the Annuity Service Center. We will consider your
application 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) we receive the entire amount of your Purchase Payment.
The date we credit the payment and issue your Contract is called the
Contract Date. If your application is incomplete, we will request the
information necessary to complete the application. If you do not
furnish the information within five business days of the time
we receive your application, we will return your payment unless we
obtain your specific permission to keep it until you complete the
application.
FREE LOOK PRIVILEGE
You may return a Contract for a refund within 30 calendar 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 calendar days after you
receive it, we will promptly refund your Purchase Payment adjusted for
investment performance. If you return a Contract during the first ten
days after you receive it, we 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.
We will also make an adjustment for the amount of any annuity income
we paid before we received the Contract. If your free look period
ends on a non-business day, the next business day will be used.
ONCE THE FREE LOOK PERIOD EXPIRES, YOU CANNOT RETURN THE CONTRACT 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. If your future
payment allocation instructions are incomplete (e.g. unclear or
percentages do not equal 100%), your payments will be allocated to the
VIP Money Market Portfolio until we receive your complete
instructions. In these cases, we will not be responsible for the
results of unit value changes or lost market opportunity.
TRADING AMONG INVESTMENT OPTIONS
You may currently exchange amounts among the Investment Options
as often as you wish without charge. However, excessive exchange
activity can disrupt Portfolio management strategy and increase
Portfolio expenses, which are borne by everyone participating in the
Portfolio regardless of their exchange activity. Therefore, EFILI
reserves the right to limit the number of exchanges 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 must be in whole
numbers, not fractions.
You may change the allocations among the Investment Options by writing
or telephoning the Annuity Service Center or on our Internet
website.
(small solid bullet) TRA DING BY TELEPHONE OR INTERNET
EFILI reserves the right to change telephone or Internet exchange
provisions, or to eliminate them, and to limit or reject any telephone
or Internet exchange at any time. You may make up to eighteen
telephone/Internet exchanges per calendar year. Multiple exchanges
among the Investment Options in a single trading day count as one
exchange. After this total is reached, you will only be permitted to
complete exchanges in writing. We will not accept exchange requests
via fax or electronic mail.
We will not be responsible for any losses resulting from unauthorized
telephone or Internet exchanges if we follow reasonable procedures
designed to verify the identity of the caller or Internet user. We may
record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them and notify the
Annuity Service Center promptly of any discrepancies, as we will not
be responsible for resulting losses due to unit value changes after 10
calendar days from the mailing of the report.
(small solid bullet) USE OF MARKET TIMING SERVICES
In some cases, we may sell contracts 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 exchanges among the Subaccounts on the basis of
perceived market trends. Because the large exchange 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 Subaccounts may be subject
to modification if such rights are executed by a market timing firm or
similar third party authorized to initiate exchange transactions on
behalf of a Contract Owner(s). In modifying such rights, we may, among
other things, decline to accept (1) the exchange instructions of any
agent acting under a power of attorney on behalf of more than one
Contract Owner, or (2) the exchange instructions of individual
Contract Owners who have executed pre-authorized 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. We will impose such
restrictions only if we believe that doing so will prevent harm to
other Contract Owners.
(small solid bullet) EFFECTIVE DATE OF EXCHANGES AMONG INVESTMENT
OPTIONS
When you exchange among Investment Options, we will redeem shares of
the appropriate Portfolios at their prices as of the end of the
current Valuation Period. Generally, any Investment Option you
exchange 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 exchange from becomes liquid. This will
happen only if (1) the Investment Option you exchange 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 exchange from is investing in an equity Portfolio in an illiquid
position due to substantial redemptions or exchanges that require it
to sell Portfolio securities in order to make funds available.
The Investment Option you exchange 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 exchange will be
uninvested. After seven days the exchange will be made even if the
Investment Option you exchange from is not liquid.
(small solid bullet) IMPORTANT
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 we make 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. We will allocate the remainder
of your Purchase Payment to the Investment Options and/or apply it to
the purchase of fixed annuity income.
2. ADMINISTRATIVE CHARGES. Administrative charges compensate us 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. We deduct a daily asset charge
for our assumption of mortality and expense risks. Each day we deduct
an amount from the assets of each Investment Option at an effective
annual rate of 0.75%.
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
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 161.
ANNUITY INCOME DATES
We calculate the amount of your annuity income on 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.
If an Annuity Income Date falls on a day that is not the last day of a
Valuation Period, the amount of annuity income will be determined
based on the value of your selected Investment Options at the close of
the Valuation Period. Annuity income will generally be sent at the end
of the Valuation Period immediately following the day on which the
amount is determined.
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 $ 100 ,000.
2. In any circumstances where we deem it necessary for your
protection.
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.
(small solid bullet) FIXED ANNUITY INCOME. Any portion of your
Purchase Payment allocated to fixed annuity income will always remain
allocated to fixed annuity income. 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 160.
(small solid bullet) VARIABLE ANNUITY INCOME. 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 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 160.
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.
(small solid bullet) COMBINATION OF FIXED AND VARIABLE ANNUITY INCOME.
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 160.
BENCHMARK RATE OF RETURN
When you purchase a Contract, we calculate an estimated first annuity
income amount, assuming that the Investment Options will earn the
Benchmark Rate of Return you choose. If the annualized Total 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 Total Return during that time is greater than the Benchmark
Rate of Return you choose, and will decrease if the annualized Total
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 ( e ) the selected Portfolios earn a constant
10% gross investment return before fees and expenses (equal to a
7. 90 % annualized Total 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INCOME ADVANTAGE
ANNUITY INCOME GRAPH
Current Expenses: 0.92%
Male, Age 65, Life w/ 10 years Updated 2/23/98
5% Benchmark 3.5% Benchmark
First Payment: $653.03 First Payment: $566.73
Net Returns Net Returns
Year -1.91% 5.00% 7.90% Year -1.91% 3.50% 7.90%
1 $651 $654 $656 1 $565 $568 $570
2 $608 $654 $674 2 $535 $568 $594
3 $568 $654 $693 3 $507 $568 $619
4 $530 $654 $712 4 $481 $568 $645
5 $495 $654 $731 5 $456 $568 $673
6 $463 $654 $752 6 $432 $568 $701
7 $432 $654 $772 7 $409 $568 $731
8 $404 $654 $794 8 $388 $568 $762
9 $377 $654 $816 9 $368 $568 $795
10 $353 $654 $838 10 $348 $568 $828
11 $329 $654 $861 11 $330 $568 $864
12 $308 $654 $885 12 $313 $568 $900
13 $287 $654 $909 13 $297 $568 $939
14 $268 $654 $935 14 $281 $568 $979
15 $251 $654 $960 15 $266 $568 $1,020
16 $234 $654 $987 16 $252 $568 $1,064
17 $219 $654 $1,014 17 $239 $568 $1,109
18 $204 $654 $1,042 18 $227 $568 $1,156
19 $191 $654 $1,071 19 $215 $568 $1,205
20 $178 $654 $1,101 20 $204 $568 $1,256
</TABLE>
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.
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 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.
(small solid bullet) ANNUITY INCOME TO BENEFICIARY. 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.
(small solid bullet) LUMP SUM PAYMENT. 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).
Any lump sum attributable to the fixed annuity portion of a Contract
will generally 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.
Any lump sum attributable to the variable annuity income portion of a
Contract will generally 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.
You should verify the accuracy of your transaction confirmations and
monthly statements immediately after you receive them and notify
the Annuity Service Center promptly of any discrepancies as we
will not be responsible for resul ting losses due to unit value
changes after 10 calendar days from the mailing of the report.
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 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 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 adviser 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
The Contract may be used as an Individual Retirement Annuity under
Section 408(b) of the Internal Revenue Code. Section 408(b) of the
Code permits eligible individuals to contribute to an individual
retirement program known as an "Individual Retirement Annuity." You
should seek competent advice as to the tax consequences associated
with the use of a Contract as a Qualified Contract.
Because the Contract's minimum Purchase Payment is greater than the
maximum annual contribution permitted to an Individual Retirement
Annuity, a Qualified 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.
If the Contract is used as a Qualified 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.
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).
(small solid bullet) IMPORTANT. This discussion of the Tax
Considerations assumes that the Contract will be treated as an annuity
cont r act 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
adviser 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 adviser 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) also has
(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 (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 Fidelity 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,
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.
TOTAL RETURN FOR AN INVESTMENT OPTION
The Total Return reflects the investment performance of the Investment
Option, less all expenses and charges, for the Valuation Period. EFILI
determines the Total 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.
(small solid bullet) 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.
(small solid bullet) A CUMULATIVE TOTAL RETURN reflects performance
over a stated period of time.
(small solid bullet) 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.
(small solid bullet) 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.
(small solid bullet) 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
We have prepared the following tables 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:
- -1.9 1 %, the Benchmark Rate of Return, and 9.8 6 %. 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 Total Return during
that time is greater than the Benchmark Rate of Return you choose, and
will decrease if the annualized Total 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 0 .9 2 % 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: 3/1/2000
DATE OF BIRTH: 1/1/35 FIRST ANNUITY INCOME DATE: 4/1/2000
PURCHASE PAYMENT ALLOCATION: 100% VARIABLE 0% FIXED
ANNUITY INCOME OPTION: SINGLE FREQUENCY OF ANNUITY INCOME: MONTHLY
LIFE ANNUITY
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 -1.91% 3.50% 9.86%
Apr. 1, 2000 65 $ 585 $ 588 $ 591
Apr. 1, 2001 66 $ 554 $ 588 $ 627
Apr. 1, 2002 67 $ 525 $ 588 $ 666
Apr. 1, 2003 68 $ 498 $ 588 $ 706
Apr. 1, 2004 69 $ 472 $ 588 $ 750
Apr. 1, 2009 74 $ 361 $ 588 $ 1,010
Apr. 1, 2014 79 $ 276 $ 588 $ 1,361
Apr. 1, 2019 84 $ 211 $ 588 $ 1,834
(1) The corresponding returns before annuity and investment expense s
are: 0%, 5.5 2 %, and 12.00%
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 $ 829.20 .
FIDELITY INCOME ADVANTAGE
ANNUITY INCOME GRAPH
Current Expenses: 0.92% 3/17/00
Male, Age 65, Life Only
3.5% Benchmark
First Payment: $586.89
Net Returns
Year -1.91% 3.50% 9.86%
1 $585 $588 $591
2 $554 $588 $627
3 $525 $588 $666
4 $498 $588 $706
5 $472 $588 $750
6 $447 $588 $796
7 $424 $588 $845
8 $402 $588 $897
9 $381 $588 $952
10 $361 $588 $1,010
11 $342 $588 $1,072
12 $324 $588 $1,138
13 $307 $588 $1,208
14 $291 $588 $1,283
15 $276 $588 $1,361
16 $261 $588 $1,445
17 $248 $588 $1,534
18 $235 $588 $1,628
19 $223 $588 $1,728
20 $211 $588 $1,834
$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 ILLUSTRATION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ANNUITANT(S): JOHN DOE ANNUITY PURCHASE AMOUNT: $100,000
SEX: MALE CONTRACT DATE: 3/1/2000
DATE OF BIRTH: 1/1/35 FIRST ANNUITY INCOME DATE: 4/1/2000
PURCHASE PAYMENT ALLOCATION: 100% VARIABLE 0% FIXED
ANNUITY INCOME OPTION: SINGLE FREQUENCY OF ANNUITY INCOME: MONTHLY
LIFE ANNUITY
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 -1.91% 5.00% 9.86%
Apr. 1, 2000 65 $ 675 $ 679 $ 681
Apr. 1, 2001 66 $ 630 $ 679 $ 713
Apr. 1, 2002 67 $ 589 $ 679 $ 746
Apr. 1, 2003 68 $ 550 $ 679 $ 780
Apr. 1, 2004 69 $ 514 $ 679 $ 816
Apr. 1, 2009 74 $ 366 $ 679 $ 1,024
Apr. 1, 2014 79 $ 260 $ 679 $ 1,284
Apr. 1, 2019 84 $ 185 $ 679 $ 1,610
(1) The corresponding returns before annuity and investment expenses
are: 0%, 7.05%, and 12.00%
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 $ 829.20 .
FIDELITY INCOME ADVANTAGE
ANNUITY INCOME GRAPH
Current Expenses: 0.92% 3/17/00
Male, Age 65, Life Only
5% Benchmark
First Payment: $677.33
Net Returns
Year -1.91% 5.00% 9.86%
1 $675 $679 $681
2 $630 $679 $713
3 $589 $679 $746
4 $550 $679 $780
5 $514 $679 $816
6 $480 $679 $854
7 $448 $679 $894
8 $419 $679 $935
9 $391 $679 $978
10 $366 $679 $1,024
11 $342 $679 $1,071
12 $319 $679 $1,121
13 $298 $679 $1,173
14 $278 $679 $1,227
15 $260 $679 $1,284
16 $243 $679 $1,343
17 $227 $679 $1,405
18 $212 $679 $1,470
19 $198 $679 $1,538
20 $185 $679 $1,610
$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
Investment Company Act of 1940 File No. 811-06388
THIS PAGE INTENTIONALLY LEFT BLANK
EFIA-pro-0400
1.700400.10 2
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 age 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. 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
15. Distributions are taxed generally as ordinary income under Federal
income tax laws.
16. The tax treatment of single sum distributions under Section 402(d)
of the Code is not applicable to distributions from IRAs.
17. 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
18. 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.
FINANCIAL INFORMATION
19. 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.
20. 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. 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.
PROSPECTUS
INCOME ADVANTAGE
INTRODUCTION
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 two types of Contracts. You may purchase:
(1) a "NON-QUALIFIED CONTRACT" with money from any source; and
(2) 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 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.
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 , 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 .
INVESTMENT OPTIONS
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 twenty-eight available 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 in the mutual fund portfolios ("Portfolios") of Variable
Insurance Products Fund, Variable Insurance Products Fund II, and
Variable Insurance Products Fund III (the "Fidelity Funds"). FIDELITY
MANAGEMENT & RESEARCH COMPANY ("FMR") manages the Fidelity Funds.
The Investment Options also invest in mutual fund portfolios managed
by MORGAN STANLEY ASSET MANAGEMENT INC. (" MORGAN
STANLEY "), PILGRIM BAXTER & ASSOCIATES, LTD . OR PILGRIM BAXTER
VALUE INVESTORS, INC. ("PBHG"), STRONG CAPITAL MANAGEMENT, INC.
("STRONG") and CREDIT SUISSE ASSET MANAGEMENT, LLC for the
WARBURG PINCUS TRUST PORTFOLIOS ("WARBURG PINCUS") ("Other
Funds").
All mutual fund portfolios available in this prospectus are
collectively known as the "Funds." Additional Investment Options may
be added in the future.
LEGAL INFORMATION
This prospectus provides information that you should know before
purchasing a Contract. We have filed additional information about the
Contract and the Variable Account with the U.S. Securities and
Exchange Commission in a Statement of Additional Information dated
April 30, 200 0. Th e Statement of Additional Information is
incorporated by reference in this prospectus and is available without
charge by calling EFILI at 1-800-544-2442 or by accessing the SEC
Internet website at (http://www.sec.gov). The table of contents of the
Statement of Additional Information appears on page .
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. 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 EITHER THE CURRENT PROSPECTUS FOR THE
MONEY MARKET INVESTMENT OPTION OR THE PROSPECTUSES FOR ALL THE
INVESTMENT OPTIONS AVAILABLE IN THE CONTRACT.
THE CONTRACT IS NOT AVAILABLE IN ALL STATES. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY
NOT BE LAWFULLY MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS.
FOR FURTHER INFORMATION CALL EMPIRE FIDELITY INVESTMENTS LIFE
Nationally 1-800-544-2442
Date: April 30, 2000
PROSPECTUS CONTENTS
GLOSSARY 9
Summary of the Contract 11
FACTS ABOUT EFILI, THE
VARIABLE ACCOUNT AND THE FUNDS
EFILI 15
The Variable Account 15
The Funds 16
FACTS ABOUT THE CONTRACT
Purchase of a Contract 77
Free Look Privilege 77
Investment Allocation of Your 77
Purchase Payment
Trading Among Investment 77
Options
Charges 78
Annuity Income Dates 78
Signature Guarantee 78
Death Benefit 78
Fixed, Variable or 79
Combination Annuity Income
Benchmark Rate of Return 79
Types of Annuity Income 80
Options
Reports 80
MORE ABOUT THE CONTRACT
Tax Considerations 81
Other Contract Provisions 83
Selling the Contracts 83
Postponement of Benefits 83
MORE ABOUT THE VARIABLE
ACCOUNT AND THE FUNDS
Changes in Investment Options 83
Total Return for an 83
Investment Option
Voting Rights 84
Resolving Material Conflicts 84
Performance 84
Litigation 84
Appendix - Illustrations of 85
Values
Table of Contents of the 90
Statement of Additional
Information
GLOSSARY
ANNUITANT - You are the Annuitant. You receive lifetime income. For
Qualified 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 annualized Total Return (performance after all
expenses) of the Investment Options you choose matches the
benchmark, annuity income will stay constant. If the Total
Return exceeds the benchmark, annuity income will increase. If
the Total Return 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, Variable Insurance Products Fund III and Other Funds
available in the Contract.
INVESTMENT OPTIONS - The Subaccounts.
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, 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 the Joint Annuitant may not be an
Owner.
NON-QUALIFIED CONTRACT - A Contract other than a Qualified 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, 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.
TOTAL RETURN - U sed to measure the investment performance of an
Investment Option from one Valuation Period to the next.
TRADING AMONG INVESTMENT OPTIONS - Transfers of amounts among the
Subaccounts.
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
PURPOSE
This variable annuity Contract provides 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 .
ANNUITY INCOME
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.
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 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 you must be the only Owner.
PURCHASE OF CONTRACT
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.
There are two 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.
INVESTMENT OPTIONS
You allocate your Purchase Payment between variable and fixed annuity
income on your application. This allocation may not be changed. 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.
There are currently twenty-eight variable Subaccounts available as
investment options .
(small solid bullet) Five Subaccounts invest in shares of one of the
mutual fund portfolios of Fidelity Variable Insurance Products Fund.
The Variable Insurance Products Fund currently offers Money Market
Portfolio, High Income Portfolio, Equity-Income Portfolio, Growth
Portfolio, and Overseas Portfolio.
(small solid bullet) Five Subaccounts invest in shares of one
of the mutual fund portfolios of Fidelity Variable Insurance Products
Fund II. The Variable Insurance Products Fund II currently offers
Investment Grade Bond Portfolio, Asset Manager Portfolio, Index 500
Portfolio, Asset Manager: Growth Portfolio, and Contrafund Portfolio.
(small solid bullet) Four Subaccounts invest in shares of one
of the mutual fund portfolios of Fidelity Variable Insurance Products
Fund III. The Variable Insurance Products Fund III currently offers
Growth & Income Portfolio, Balanced Portfolio, Growth Opportunities
Portfolio and Mid Cap Portfolio .
(small solid bullet) The remaining Subaccounts invest in shares
of one of the mutual fund portfolios of Morgan Stanley, PBHG, Strong,
or Warburg Pincus.
FREE LOOK PERIOD
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,
YOU CANNOT RETURN THE CONTRACT 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 .
IMPORTANT
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. The
Contract constitutes the entire agreement between you and EFILI and
should be retained.
FEE TABLE
This information may assist you in understanding the various costs and
expenses that a Contract Owner 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 for additional information.
CONTRACT EXPENSES
NONE
SEPARATE ACCOUNT ANNUAL
EXPENSES
(as a percentage of Portfolio
average net assets)
Mortality and Expense Risk 0.75%
Charge
Account Fees and Expenses:
Administrative Charge 0.25%
Total Separate Account Annual 1.00%
Expenses
PORTFOLIO ANNUAL EXPENSES
(as a percentage of Portfolio average net assets)
<TABLE>
<CAPTION>
Management Fees Other Expenses Total Annual Expenses (after
reimbursement)
<S> <C> <C> <C>
FIDELITYA
Asset Manager 0.53% 0.09% 0.62%
Money Market 0.18% 0.09% 0.27%
Investment Grade Bond 0.43% 0.11% 0.54%
High Income 0.58% 0.11% 0.69%
Equity-Income 0.48% 0.08% 0.56%
Index 500 0.24% 0.04% 0.28%B
Growth 0.58% 0.07% 0.65%
Overseas 0.73% 0.14% 0.87%
Asset Manager: Growth 0.58% 0.12% 0.70%
Contrafund 0.58% 0.07% 0.65%
Growth Opportunities 0.58% 0.10% 0.68%
Balanced 0.43% 0.12% 0.55%
Growth & Income 0.48% 0.11% 0.59%
Mid Cap 0.57% 0.40% 0.97%
MORGAN STANLEY ASSET MANAGEMENT
Emerging Markets Debt 0.45% 0.98% 1.43%C
Emerging Markets Equity 0.42% 1.37% 1.79%C
Global Equity 0.47% 0.68% 1.15%C
International Magnum 0.29% 0.87% 1.16%C
PBHG
Select 20 0.85% 0.20% 1.05%D
Growth II 0.85% 0.35% 1.20%D
Select Value* 0.65% 0.30% 0.95%D
Small Cap Value 0.91% 0.29% 1.20%D
Technology & Communications 0.85% 0.24% 1.09%D
STRONG
Mid Cap Growth Fund II 1.00% 0.15% 1.15%E
Opportunity Fund II 1.00% 0.14% 1.14%E
WARBURG PINCUS
International Equity 1.00% 0.32% 1.32%F
Global Post-Venture Capital** 1.07% 0.33% 1.40%F
Small Company Growth 0.90% 0.24% 1.14%F
</TABLE>
* PREVIOUSLY CALLED LARGE CAP VALUE.
** PREVIOUSLY CALLED POST-VENTURE CAPITAL.
A A PORTION OF THE BROKERAGE COMMISSIONS THAT CERTAIN FIDELITY FUNDS
PAY WAS USED TO REDUCE FUND EXPENSES. IN ADDITION, CERTAIN FIDELITY
FUNDS, OR FMR ON BEHALF OF CERTAIN FUNDS, HAVE ENTERED INTO
ARRANGEMENTS WITH THEIR CUSTODIAN WHEREBY CREDITS REALIZED AS A RESULT
OF UNINVESTED CASH BALANCES WERE USED TO REDUCE A PORTION OF
FUND EXPENSES. WITHOUT THESE REDUCTIONS, THE TOTAL OPERATING EXPENSES
PRESENTED IN THE TABLE WOULD HAVE BEEN 0. 5 7% FOR EQUITY-INCOME
PORTFO LIO, 0.66% FOR GROWTH PORTFOLIO, 0.91% FOR OVERSEAS
PORTFOLIO, 0.63% FOR ASSET MANAGER PORTFOLIO, 0.67% FOR CONTRAFUND
PORTFOLIO, 0.70% FOR ASSET MANAGER: GROWTH PORTFOLIO, 0.68% FOR GROWTH
OPPORTUNITIES PORTFOLIO, 0.55% FOR BALANCED PORTFOLIO, 0.59% FOR
GROWTH AND INCOME POR TFOLIO, AND 3.34% FOR MID CAP PORTFOLIO.
B 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 0.24%,
0. 10 % AND 0.34%, RESPECTIVELY.
C MORGAN STANLEY ASSET MANAGEMENT , WITH RESPECT TO THE
PORTFOLIOS, HAS VOLUNTARILY AGREED TO WAIVE RECEIPT OF ITS MANAGEMENT
FEES AND AGREED TO REIMBURSE CERTAIN EXPENSES OF THE PORTFOLIO. MORGAN
STANLEY ASSET MANAGEMENT MAY TERMINATE THIS VOLUNTARY WAIVER
AND REIMBURSEMENT AT ANY TIME AT ITS SOLE DISCRETION. WITHOUT WAIVERS
AND REIMBURSEMENTS, "MANAGEMENT FEES," "OTHER EXPENSES" AND "TOTAL
ANNUAL EXPENSES," RESPECTIVELY, WOULD BE AS FOLLOWS: EMERGING MARKETS
DEBT PORTFOLIO (0.80%, 0.98%, 1.78%); EMERGING MARKETS EQUITY
PORTFOLIO (1.25%, 1.37%, 2.62%); GLOBAL EQUITY PORTFOLIO (0.80%,
0.68%, 1.48%); INTERNATIONAL MAGNUM PORTFOLI O (0.80%, 0.87%,
1.67%).
D PILGRIM BAXTER & ASSOCIATES, LTD. (THE "ADVISER") HAS VOLUNTARILY
AGREED TO WAIVE OR LIMIT ITS ADVISORY FEES OR ASSUME OTHER EXPENSES IN
AN AMOUNT THAT OPERATES TO LIMIT TOTAL OPERATING EXPENSES OF THE
PORTFOLIOS TO NOT MORE THAN 1.20% OF THE AVERAGE DAILY NET ASSETS OF
THE GROWTH II, SMALL CAP VALUE, TECHNOLOGY & COMMUNICATIONS AND SELECT
20 PORTFOLIOS AND TO NOT MORE THAN 1.00% OF THE AVERAGE DAILY NET
ASSETS OF THE SELECT VALUE PORTFOLIO, THROUGH DECEMBER 31,
1999. TOTAL OPERATING EXPENSES INCLUDE, BUT ARE NOT LIMITED TO,
EXPENSES SUCH AS INVESTMENT ADVISORY FEES, TRANSFER AGENT FEES AND
LEGAL FEES. SUCH WAIVERS OF ADVISORY FEES AND POSSIBLE ASSUMPTIONS OF
OTHER EXPENSES BY THE ADVISER IS SUBJECT TO A POSSIBLE REIMBURSEMENT
BY THE PORTFOLIOS IN FUTURE YEARS IF SUCH REIMBURSEMENT CAN BE
ACHIEVED WITHIN FOREGOING ANNUAL EXPENSE LIMITS. SUCH FEE
WAIVER/EXPENSE REIMBURSEMENT ARRANGEMENTS MAY BE MODIFIED OR
TERMINATED AT ANY TIME AFTER DECEMBER 31, 1999. ABSENT SUCH FEE
WAIVERS/EXPENSE REIMBURSEMENTS THE ADVISORY FEES AND ESTIMATED TOTAL
OPERATING EXPENSES FOR THE SMALL CAP VALUE PORTFOLIO WOULD BE 1.00%
AND 1.29 %.
E STRONG CAPITAL MANAGEMENT, INC., THE INVESTMENT ADVISER, HAS
VOLUNTARILY AGREED TO CAP THE FUND'S TOTAL OPERATING EXPENSES AT
1.20%. THE ADVISER HAS NO CURRENT INTENTION TO, BUT MAY IN THE FUTURE,
DISCONTINUE OR MODIFY ANY WAIVER OF FEES OR ABSORPTION OF EXPENSES AT
ITS DISCRETION WITH APPROPRIATE NOTIFICATION TO ITS SHAREHOLDERS.
MANAGEMENT FEES, OTHER EXPENSES, AND TOTAL ANNUAL EXPENSES FOR
OPPORTUNITY II AND MID CAP GROWTH FUND II ARE CALCULATED ON AN
ANNUALIZED BASIS FROM THE BEGINNING OF THE FISCAL YEAR THROUGH THE
CURRENT QUARTER END. THE ADVISOR FOR MID CAP GROWTH FUND II IS
ABSORBING EXPENSES OF 0.02%. WITHOUT THESE ABSORPTIONS THE EXPENSE
RATIO WOULD HAVE BEEN 1.17%.
F MANAGEMENT FEES, OTHER EXPENSES AND TOTAL ANNUAL EXPENSES FOR THE
INTERNATIONAL EQUITY, GLOBAL POST-VENTURE CAPITAL AND SMALL
COMPANY GROWTH PORTFOLIOS ARE BASED ON ACTUAL EXPENSES FOR THE FISCAL
YEAR ENDED DECEMBER 31, 199 9 , NET ANY FEE WAIVERS OR EXPENSE
REIMBURSEMENTS. WITHOUT SUCH WAIVERS OR REIMBURSEMENTS, MANAGEMENT
FEES WOULD HAVE EQUALED 1.00%, 1.25% AND 0.90%; OTHER EXPENSES WOULD
HAVE EQUALLED 0.3 2 %, 0. 33 % AND 0.24%; AND TOTAL ANNUAL
EXPENSES WOULD HAVE EQUALLED 1.3 2 %, 1. 58 % AND 1.14% FOR
THE INTERNATIONAL EQUITY, GLOBAL POST-VENTURE CAPITAL, AND SMALL
COMPANY GROWTH PORTFOLIOS, RESPECTIVELY. FEE WAIVERS AND EXPENSE
REIMBURSEMENTS OR CREDITS MAY BE DISCONTINUED AT ANY TIME.
FACTS ABOUT EFILI, THE VARIABLE ACCOUNT AND THE FUNDS
EMPIRE FIDELITY INVESTMENTS LIFE
Empire Fidelity Investments Life 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.
Edward C. Johnson 3d, the Johnson family members, and various key
employees of FMR Corp. own the voting common stock of 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.
We own the assets in the Variable Account. The assets of the Variable
Account are kept separate from our general account assets and from any
other separate accounts we may have, as required by law. The assets of
the Variable Account may not be charged with liabilities from any
other business we conduct. 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, we may transfer the excess to its general account. EFILI
is obligated to provide all benefits under the Contracts.
There are currently twenty-nine Subaccounts in the Variable
Account. One of these Subaccounts, Strong Discovery Fund II Portfolio,
is no longer available as an investment option in the Contract and no
money may be allocated to this Subaccount. On or about May 26, 2000,
any assets remaining in Strong Discovery Fund II Portfolio will be
exchanged to VIP III Mid Cap Portfolio. Five Subaccounts invest
exclusively in shares of a specific portfolio of Fidelity Variable
Insurance Products Fund. Five Subaccounts invest exclusively in shares
of a specific portfolio of Fidelity Variable Insurance Products Fund
II. Four Subaccounts invest exclusively in shares of a specific
portfolio of Fidelity Variable Insurance Products Fund III. The other
14 available investment options are offered by four different mutual
fund investment advisers.
THE FUNDS
FIDELITY:
The Fidelity 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, 199 9 . 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 Total of
Return for that month is higher than the Benchmark Rate of Return, and
decreases for a given month if the annualized Total 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 $74, 520 . If the purchaser were
female, the Purchase Payment necessary would be $83, 417 . 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 graphs for the Other Funds are not available.
ASSET MANAGER PORTFOLIO OF FIDELITY 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 instruments.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Allocating the fund's assets among stocks, bonds,
and short-term and money market instruments.
(small solid bullet) Maintaining a neutral mix over time of 50% of
assets in stocks, 40% of assets in bonds, and 10% of assets in
short-term and money market instruments.
(small solid bullet) Adjusting allocation among asset classes
gradually within the following ranges: stock class (30% - 70%), bond
class (20% - 60%), and short-term/money market class (0% - 50%).
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Analyzing an issuer using fundamental and/or
quantitative factors and evaluating each security's current price
relative to estimated long-term value in selecting investments.
INVESTOR PROFILE. The fund may be appropriate for investors who want
to diversify among stocks, bonds, short-term instruments and other
types of securities. The fund's assets may also be invested in other
instruments that do not fall within these classes. The graph below is
based on a 5% Benchmark Rate of Return and initial monthly annuity
income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E ASSET MANAGER
Apr-82 0.01
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
Jan-97 31.00 3.01 102.92% $753
Feb-97 28.00 0.86 100.78% $756
Mar-97 31.00 -3.80 96.12% $724
Apr-97 30.00 3.42 103.33% $745
May-97 31.00 4.80 104.71% $777
Jun-97 30.00 2.66 102.58% $794
Jul-97 31.00 5.78 105.69% $836
Aug-97 31.00 -2.73 97.19% $809
Sep-97 30.00 3.22 103.13% $831
Oct-97 31.00 1.00% -1.64 98.28% $813
Nov-97 30.00 1.00% 2.31 102.23% $828
Dec-97 31.00 1.00% 1.52 101.43% $836
Jan-98 31.00 1.00% 0.33 100.24% $835
Feb-98 28.00 1.00% 4.50 104.42% $868
Mar-98 31.00 1.00% 2.90 102.81% $889
Apr-98 30.00 1.00% -0.12 99.80% $884
May-98 31.00 1.00% -0.53 99.39% $875
Jun-98 30.00 1.00% 1.95 101.87% $888
Jul-98 31.00 1.00% -0.64 99.28% $877
Aug-98 31.00 1.00% -9.10 90.82% $794
Sep-98 30.00 1.00% 3.34 103.25% $816
Oct-98 31.00 1.00% 4.35 104.26% $847
Nov-98 30.00 1.00% 3.81 103.72% $875
Dec-98 31.00 1.00% 4.13 104.04% $907
Jan-99 31.00 1.00% 2.37 102.28% $924
Feb-99 28.00 1.00% -2.29 97.63% $899
Mar-99 31.00 1.00% 0.89 100.80% $902
Apr-99 30.00 1.00% 2.24 102.16% $918
May-99 31.00 1.00% -1.44 98.48% $900
Jun-99 30.00 1.00% 3.51 103.42% $927
Jul-99 31.00 1.00% -1.70 98.22% $907
Aug-99 31.00 1.00% -0.17 99.74% $901
Sep-99 30.00 1.00% -1.15 98.77% $886
Oct-99 31.00 1.00% 3.03 102.94% $909
Nov-99 30.00 1.00% 1.36 101.28% $917
Dec-99 31.00 1.00% 4.19 104.10% $950
Listed in Order Max 950
to match MFPR Min 468
</TABLE>
MONEY MARKET PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks as
high a level of current income as is consistent with the preservation
of capital and liquidity.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing in U.S. dollar-denominated money market
securities, including U.S. Government securities and repurchase
agreements, and entering into reverse repurchase agreements.
(small solid bullet) Investing more than 25% of total assets in the
financial services industry.
(small solid bullet) Investing in compliance with industry-standard
requirements for money market funds for the quality, maturity, and
diversification of investments.
INVESTOR PROFILE. 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. An investment in the fund is not a deposit
of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the
fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. The
graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E MONEY MARKET
Apr-82 0.01 $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
Jan-97 31.00 0.45 100.36% $565
Feb-97 28.00 0.40 100.32% $564
Mar-97 31.00 0.44 100.35% $564
Apr-97 30.00 0.44 100.36% $564
May-97 31.00 0.44 100.35% $563
Jun-97 30.00 0.46 100.38% $563
Jul-97 31.00 0.46 100.37% $563
Aug-97 31.00 0.43 100.34% $563
Sep-97 30.00 0.47 100.39% $562
Oct-97 31.00 1.00% 0.46 100.37% $562
Nov-97 30.00 1.00% 0.41 100.33% $562
Dec-97 31.00 1.00% 0.50 100.41% $562
Jan-98 31.00 1.00% 0.45 100.36% $562
Feb-98 28.00 1.00% 0.42 100.34% $561
Mar-98 31.00 1.00% 0.47 100.38% $561
Apr-98 30.00 1.00% 0.44 100.36% $561
May-98 31.00 1.00% 0.43 100.34% $561
Jun-98 30.00 1.00% 0.47 100.39% $560
Jul-98 31.00 1.00% 0.46 100.37% $560
Aug-98 31.00 1.00% 0.46 100.37% $560
Sep-98 30.00 1.00% 0.44 100.36% $560
Oct-98 31.00 1.00% 0.43 100.34% $559
Nov-98 30.00 1.00% 0.44 100.36% $559
Dec-98 31.00 1.00% 0.43 100.34% $559
Jan-99 31.00 1.00% 0.40 100.31% $558
Feb-99 28.00 1.00% 0.38 100.30% $558
Mar-99 31.00 1.00% 0.44 100.35% $557
Apr-99 30.00 1.00% 0.39 100.31% $557
May-99 31.00 1.00% 0.36 100.27% $556
Jun-99 30.00 1.00% 0.43 100.35% $556
Jul-99 31.00 1.00% 0.40 100.31% $555
Aug-99 31.00 1.00% 0.44 100.35% $555
Sep-99 30.00 1.00% 0.43 100.35% $555
Oct-99 31.00 1.00% 0.42 100.33% $554
Nov-99 30.00 1.00% 0.47 100.39% $554
Dec-99 31.00 1.00% 0.48 100.39% $554
Listed in Order Max 609
to match MFPR Min 500
</TABLE>
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.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing in U.S. dollar-denominated
investment-grade bonds.
(small solid bullet) Managing the fund to have similar overall
interest rate risk to the Lehman Brothers Aggregate Bond Index.
(small solid bullet) Allocating assets across different market sectors
and maturities.
(small solid bullet) Analyzing a security's structural features,
current pricing and trading opportunities, and the credit quality of
its issuer in selecting investments.
INVESTOR PROFILE. The fund may be appropriate for investors who want
the potential for high current income from a portfolio of
investment-grade debt securities. The fund's level of risk and
potential reward depend on the quality and maturity of its
investments, and has overall interest rate risk similar to the index.
The graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E INVESTMENT GRADE BOND
Apr-82 0.01
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
Jan-97 31.00 0.25 100.16% $585
Feb-97 28.00 0.13 100.05% $583
Mar-97 31.00 -1.04 98.88% $574
Apr-97 30.00 1.49 101.41% $580
May-97 31.00 0.78 100.69% $582
Jun-97 30.00 1.20 101.12% $586
Jul-97 31.00 2.70 102.61% $599
Aug-97 31.00 -0.90 99.02% $590
Sep-97 30.00 1.49 101.41% $596
Oct-97 31.00 1.00% 1.31 101.22% $601
Nov-97 30.00 1.00% 0.24 100.16% $600
Dec-97 31.00 1.00% 1.12 101.03% $603
Jan-98 31.00 1.00% 1.27 101.18% $608
Feb-98 28.00 1.00% -0.07 99.85% $605
Mar-98 31.00 1.00% 0.41 100.32% $604
Apr-98 30.00 1.00% 0.50 100.42% $604
May-98 31.00 1.00% 0.90 100.81% $607
Jun-98 30.00 1.00% 0.81 100.73% $609
Jul-98 31.00 1.00% 0.24 100.15% $607
Aug-98 31.00 1.00% 1.21 101.12% $611
Sep-98 30.00 1.00% 2.47 102.39% $623
Oct-98 31.00 1.00% -0.54 99.38% $617
Nov-98 30.00 1.00% 0.86 100.78% $619
Dec-98 31.00 1.00% 0.47 100.38% $619
Jan-99 31.00 1.00% 0.85 100.76% $621
Feb-99 28.00 1.00% -1.72 98.20% $608
Mar-99 31.00 1.00% 0.66 100.57% $609
Apr-99 30.00 1.00% 0.33 100.25% $608
May-99 31.00 1.00% -1.30 98.62% $597
Jun-99 30.00 1.00% -0.49 99.43% $591
Jul-99 31.00 1.00% -0.41 99.51% $586
Aug-99 31.00 1.00% -0.17 99.74% $582
Sep-99 30.00 1.00% 1.33 101.25% $587
Oct-99 31.00 1.00% 0.16 100.07% $585
Nov-99 30.00 1.00% 0.16 100.08% $583
Dec-99 31.00 1.00% -0.41 99.51% $578
Listed in Order Max 623
to match MFPR Min 500
</TABLE>
HIGH INCOME PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks a high
level of current income. Growth of capital may also be considered.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing at least 65% of total assets in
income-producing debt securities, preferred stocks and convertible
securities, with an emphasis on lower-quality debt securities.
(small solid bullet) Potentially investing in non-income producing
securities, including defaulted securities and common stocks.
(small solid bullet) Investing in companies in troubled or uncertain
financial condition.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E HIGH INCOME
Apr-82 0.01
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
Jan-97 31.00 1.36 101.27% $933
Feb-97 28.00 1.81 101.73% $945
Mar-97 31.00 -3.11 96.81% $911
Apr-97 30.00 1.56 101.48% $921
May-97 31.00 4.18 104.09% $955
Jun-97 30.00 1.80 101.72% $967
Jul-97 31.00 3.62 103.53% $997
Aug-97 31.00 0.85 100.76% $1,001
Sep-97 30.00 3.54 103.45% $1,031
Oct-97 31.00 1.00% -0.89 99.03% $1,017
Nov-97 30.00 1.00% 0.75 100.67% $1,020
Dec-97 31.00 1.00% 1.13 101.04% $1,026
Jan-98 31.00 1.00% 2.28 102.19% $1,044
Feb-98 28.00 1.00% 0.76 100.68% $1,047
Mar-98 31.00 1.00% 2.09 102.00% $1,064
Apr-98 30.00 1.00% 0.39 100.31% $1,063
May-98 31.00 1.00% -0.71 99.21% $1,050
Jun-98 30.00 1.00% -0.08 99.84% $1,044
Jul-98 31.00 1.00% 0.55 100.46% $1,045
Aug-98 31.00 1.00% -12.36 87.57% $911
Sep-98 30.00 1.00% -0.99 98.93% $898
Oct-98 31.00 1.00% -2.72 97.20% $869
Nov-98 30.00 1.00% 8.21 108.12% $936
Dec-98 31.00 1.00% -0.60 99.32% $925
Jan-99 31.00 1.00% 2.95 102.86% $948
Feb-99 28.00 1.00% -0.42 99.50% $940
Mar-99 31.00 1.00% 2.52 102.43% $959
Apr-99 30.00 1.00% 5.00 104.91% $1,002
May-99 31.00 1.00% -2.69 97.23% $970
Jun-99 30.00 1.00% 0.53 100.45% $970
Jul-99 31.00 1.00% -0.35 99.56% $962
Aug-99 31.00 1.00% -1.69 98.23% $941
Sep-99 30.00 1.00% -1.54 98.38% $922
Oct-99 31.00 1.00% -0.46 99.46% $913
Nov-99 30.00 1.00% 2.12 102.04% $928
Dec-99 31.00 1.00% 2.26 102.17% $944
Listed in Order Max 1,064
to match MFPR Min 472
</TABLE>
EQUITY-INCOME PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks
reasonable income. The fund will consider the potential for capital
appreciation. The fund seeks a yield for its shareholders that exceeds
the yield on the securities comprising the S&P 500.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing at least 65% of total assets in
income-producing equity securities, which tends to lead to investments
in large cap "value" stocks.
(small solid bullet) Potentially investing in other types of equity
securities and debt securities, including lower-quality debt
securities.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns. The fund is designed for
those who want some income from equity and bond securities, 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E EQUITY INCOME
Apr-82 0.01
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
Jan-97 31.00 3.90 103.81% $1,020
Feb-97 28.00 1.11 101.03% $1,027
Mar-97 31.00 -3.72 96.20% $984
Apr-97 30.00 3.55 103.46% $1,014
May-97 31.00 6.20 106.11% $1,072
Jun-97 30.00 4.65 104.56% $1,116
Jul-97 31.00 7.30 107.21% $1,191
Aug-97 31.00 -4.69 95.23% $1,130
Sep-97 30.00 5.50 105.41% $1,186
Oct-97 31.00 1.00% -3.66 96.26% $1,137
Nov-97 30.00 1.00% 3.66 103.57% $1,173
Dec-97 31.00 1.00% 2.15 102.06% $1,192
Jan-98 31.00 1.00% -0.25 99.66% $1,183
Feb-98 28.00 1.00% 6.45 106.37% $1,254
Mar-98 31.00 1.00% 4.63 104.54% $1,306
Apr-98 30.00 1.00% 0.00 99.92% $1,299
May-98 31.00 1.00% -1.62 98.30% $1,272
Jun-98 30.00 1.00% 1.12 101.04% $1,280
Jul-98 31.00 1.00% -2.46 97.46% $1,242
Aug-98 31.00 1.00% -15.27 84.66% $1,047
Sep-98 30.00 1.00% 5.87 105.78% $1,103
Oct-98 31.00 1.00% 7.40 107.31% $1,179
Nov-98 30.00 1.00% 4.23 104.14% $1,223
Dec-98 31.00 1.00% 3.12 103.03% $1,255
Jan-99 31.00 1.00% -0.31 99.60% $1,245
Feb-99 28.00 1.00% -1.22 98.70% $1,224
Mar-99 31.00 1.00% 3.65 103.56% $1,262
Apr-99 30.00 1.00% 8.87 108.78% $1,368
May-99 31.00 1.00% -2.72 97.20% $1,324
Jun-99 30.00 1.00% 4.25 104.16% $1,374
Jul-99 31.00 1.00% -3.01 96.91% $1,326
Aug-99 31.00 1.00% -2.72 97.20% $1,283
Sep-99 30.00 1.00% -3.27 96.65% $1,235
Oct-99 31.00 1.00% 3.66 103.57% $1,274
Nov-99 30.00 1.00% -1.32 98.60% $1,251
Dec-99 31.00 1.00% 1.02 100.93% $1,258
Listed in Order Max 1,374
to match MFPR Min 431
</TABLE>
INDEX 500 PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND II seeks
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, as represented by the S&P 500, while
keeping transaction costs and other expenses low.
PRINCIPAL INVESTMENT STRATEGIES. Bankers Trust Company's ("BT," a New
York banking corporation serving as sub-adviser and custodian for VIP
II Index 500) principal investment strategies include:
(small solid bullet) Investing at least 80% of assets in common stocks
included in the S&P 500.
(small solid bullet) Lending securities to earn income for the fund.
(small solid bullet) 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 funds. The fund is managed by FMR, which handles its
business affairs. BT, Index 500 Portfolio's sub-adviser, chooses the
fund's investments. FMR supervises the sub-adviser and, in conjunction
with the Board of Trustees, reviews the sub-adviser's performance of
its duties. BT also acts as Index 500 Portfolio's custodian.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns in relation to the S&P
500. The graph below is based on a 5% benchmark Rate of Return and
initial annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E INDEX 500
Apr-82 0.01
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 1.16 $500
Oct-92 31.00 0.22 100.13% $499
Nov-92 30.00 3.41 103.32% $513
Dec-92 31.00 1.26 101.17% $517
Jan-93 31.00 0.64 100.55% $518
Feb-93 28.00 1.32 101.24% $522
Mar-93 31.00 2.20 102.11% $531
Apr-93 30.00 -2.55 97.37% $515
May-93 31.00 2.60 102.51% $526
Jun-93 30.00 0.26 100.18% $525
Jul-93 31.00 -0.46 99.46% $520
Aug-93 31.00 3.79 103.70% $537
Sep-93 30.00 -0.81 99.11% $530
Oct-93 31.00 2.04 101.95% $538
Nov-93 30.00 -0.97 98.95% $530
Dec-93 31.00 1.20 101.11% $534
Jan-94 31.00 3.37 103.28% $549
Feb-94 28.00 -2.71 97.22% $532
Mar-94 31.00 -4.34 95.58% $506
Apr-94 30.00 1.20 101.12% $510
May-94 31.00 1.55 101.46% $515
Jun-94 30.00 -2.44 97.48% $500
Jul-94 31.00 3.30 103.21% $514
Aug-94 31.00 3.99 103.90% $532
Sep-94 30.00 -2.43 97.49% $516
Oct-94 31.00 2.22 102.13% $525
Nov-94 30.00 -3.63 96.29% $504
Dec-94 31.00 1.46 101.37% $508
Jan-95 31.00 2.65 102.56% $519
Feb-95 28.00 3.83 103.75% $537
Mar-95 31.00 2.92 102.83% $550
Apr-95 30.00 2.94 102.86% $563
May-95 31.00 3.93 103.84% $582
Jun-95 30.00 2.27 102.19% $593
Jul-95 31.00 3.34 103.25% $609
Aug-95 31.00 0.25 100.16% $608
Sep-95 30.00 4.18 104.09% $630
Oct-95 31.00 -0.34 99.57% $625
Nov-95 30.00 4.35 104.26% $649
Dec-95 31.00 1.83 101.74% $658
Jan-96 31.00 3.42 103.33% $677
Feb-96 29.00 0.93 100.85% $680
Mar-96 31.00 1.03 100.94% $683
Apr-96 30.00 1.40 101.32% $690
May-96 31.00 2.55 102.46% $704
Jun-96 30.00 0.43 100.35% $703
Jul-96 31.00 -4.43 95.49% $669
Aug-96 31.00 2.06 101.97% $679
Sep-96 30.00 5.59 105.50% $714
Oct-96 31.00 2.76 102.67% $730
Nov-96 30.00 7.50 107.41% $781
Dec-96 31.00 -1.97 97.95% $761
Jan-97 31.00 6.20 106.11% $805
Feb-97 28.00 0.75 100.67% $807
Mar-97 31.00 -4.16 95.76% $770
Apr-97 30.00 5.94 105.85% $811
May-97 31.00 6.08 105.99% $856
Jun-97 30.00 4.39 104.30% $890
Jul-97 31.00 7.95 107.86% $956
Aug-97 31.00 -5.60 94.32% $898
Sep-97 30.00 5.41 105.32% $942
Oct-97 31.00 1.00% -3.31 96.61% $906
Nov-97 30.00 1.00% 4.52 104.43% $942
Dec-97 31.00 1.00% 1.68 101.59% $953
Jan-98 31.00 1.00% 1.08 100.99% $959
Feb-98 28.00 1.00% 7.10 107.02% $1,022
Mar-98 31.00 1.00% 5.06 104.97% $1,069
Apr-98 30.00 1.00% 0.99 100.91% $1,074
May-98 31.00 1.00% -1.79 98.13% $1,049
Jun-98 30.00 1.00% 4.07 103.98% $1,087
Jul-98 31.00 1.00% -1.09 98.83% $1,070
Aug-98 31.00 1.00% -14.47 85.46% $910
Sep-98 30.00 1.00% 6.43 106.34% $964
Oct-98 31.00 1.00% 8.12 108.03% $1,037
Nov-98 30.00 1.00% 6.02 105.93% $1,094
Dec-98 31.00 1.00% 5.88 105.79% $1,153
Jan-99 31.00 1.00% 4.02 103.93% $1,193
Feb-99 28.00 1.00% -3.15 96.78% $1,151
Mar-99 31.00 1.00% 4.02 103.93% $1,191
Apr-99 30.00 1.00% 3.81 103.72% $1,230
May-99 31.00 1.00% -2.40 97.52% $1,195
Jun-99 30.00 1.00% 5.53 105.44% $1,255
Jul-99 31.00 1.00% -3.12 96.80% $1,210
Aug-99 31.00 1.00% -0.53 99.39% $1,197
Sep-99 30.00 1.00% -2.77 97.15% $1,158
Oct-99 31.00 1.00% 6.29 106.20% $1,225
Nov-99 30.00 1.00% 2.00 101.92% $1,244
Dec-99 31.00 1.00% 5.88 105.79% $1,310
Listed in Order Max 1,310
to match MFPR Min 499
</TABLE>
GROWTH PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks to
achieve capi tal appreciation.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Investing in companies that it believes have
above-average growth potential, measured by factors such as earnings
or revenue (stocks of these companies are often called "growth
stocks").
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns. The fund is designed for
those who want to pursue growth potential, and who understand that
this strategy often leads to more volatile investments than the
market as a whole. The graph below is based on a 5% Benchmark Rate
of Return and initial monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E GROWTH
Apr-82 0.01
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 2.20 102.12% $509
Dec-86 31.00 -1.86 98.06% $497
Jan-87 31.00 10.67 110.58% $547
Feb-87 28.00 4.95 104.87% $571
Mar-87 31.00 1.63 101.54% $578
Apr-87 30.00 0.00 99.92% $575
May-87 31.00 0.68 100.59% $576
Jun-87 30.00 2.94 102.86% $590
Jul-87 31.00 4.00 103.91% $611
Aug-87 31.00 2.98 102.89% $626
Sep-87 30.00 -1.14 98.78% $616
Oct-87 31.00 -21.97 77.96% $478
Nov-87 30.00 -7.02 92.90% $442
Dec-87 31.00 10.31 110.22% $485
Jan-88 31.00 2.17 102.08% $493
Feb-88 29.00 8.11 108.02% $531
Mar-88 31.00 -0.89 99.03% $524
Apr-88 30.00 1.26 101.18% $528
May-88 31.00 -0.89 99.03% $520
Jun-88 30.00 5.03 104.94% $544
Jul-88 31.00 -0.51 99.41% $538
Aug-88 31.00 -2.41 97.51% $523
Sep-88 30.00 2.82 102.74% $535
Oct-88 31.00 0.26 100.17% $534
Nov-88 30.00 -0.94 98.98% $526
Dec-88 31.00 1.03 100.94% $529
Jan-89 31.00 7.17 107.08% $564
Feb-89 28.00 -2.07 97.85% $550
Mar-89 31.00 3.02 102.93% $564
Apr-89 30.00 5.29 105.20% $591
May-89 31.00 3.58 103.49% $609
Jun-89 30.00 -1.32 98.60% $598
Jul-89 31.00 8.94 108.85% $648
Aug-89 31.00 1.71 101.62% $656
Sep-89 30.00 0.87 100.79% $658
Oct-89 31.00 -2.80 97.12% $637
Nov-89 30.00 1.64 101.56% $644
Dec-89 31.00 2.36 102.27% $656
Jan-90 31.00 -5.80 94.12% $615
Feb-90 28.00 0.96 100.88% $618
Mar-90 31.00 1.22 101.13% $622
Apr-90 30.00 -2.91 97.01% $601
May-90 31.00 8.85 108.76% $651
Jun-90 30.00 2.08 102.00% $661
Jul-90 31.00 -1.58 98.34% $648
Aug-90 31.00 -10.30 89.62% $578
Sep-90 30.00 -10.29 89.64% $516
Oct-90 31.00 -3.57 96.35% $495
Nov-90 30.00 8.10 108.01% $533
Dec-90 31.00 2.95 102.86% $546
Jan-91 31.00 6.66 106.57% $579
Feb-91 28.00 7.46 107.38% $620
Mar-91 31.00 3.02 102.93% $635
Apr-91 30.00 -0.93 98.99% $626
May-91 31.00 5.91 105.82% $660
Jun-91 30.00 -7.42 92.50% $608
Jul-91 31.00 9.53 109.44% $663
Aug-91 31.00 4.44 104.35% $689
Sep-91 30.00 0.78 100.70% $691
Oct-91 31.00 3.09 103.00% $708
Nov-91 30.00 -5.71 94.21% $665
Dec-91 31.00 13.21 113.11% $749
Jan-92 31.00 6.10 106.01% $791
Feb-92 29.00 2.09 102.01% $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 31.00 3.86 103.77% $700
Aug-92 31.00 -2.75 97.17% $677
Sep-92 30.00 1.76 101.68% $686
Oct-92 31.00 3.87 103.78% $709
Nov-92 30.00 6.68 106.59% $752
Dec-92 31.00 3.08 102.99% $772
Jan-93 31.00 1.97 101.88% $783
Feb-93 28.00 -2.06 97.86% $763
Mar-93 31.00 3.99 103.90% $790
Apr-93 30.00 -1.05 98.87% $778
May-93 31.00 7.45 107.36% $831
Jun-93 30.00 1.03 100.95% $836
Jul-93 31.00 -0.28 99.63% $830
Aug-93 31.00 5.02 104.93% $867
Sep-93 30.00 1.86 101.78% $879
Oct-93 31.00 0.96 100.87% $883
Nov-93 30.00 -4.05 95.87% $843
Dec-93 31.00 3.54 103.45% $868
Jan-94 31.00 2.51 102.42% $886
Feb-94 28.00 -1.03 98.89% $873
Mar-94 31.00 -4.54 95.38% $829
Apr-94 30.00 0.62 100.54% $830
May-94 31.00 -2.32 97.60% $807
Jun-94 30.00 -5.08 94.84% $762
Jul-94 31.00 3.47 103.38% $785
Aug-94 31.00 5.67 105.58% $825
Sep-94 30.00 -1.21 98.71% $811
Oct-94 31.00 4.06 103.97% $840
Nov-94 30.00 -3.99 95.93% $802
Dec-94 31.00 2.55 102.46% $819
Jan-95 31.00 -1.89 98.03% $799
Feb-95 28.00 4.14 104.06% $828
Mar-95 31.00 3.63 103.54% $854
Apr-95 30.00 3.37 103.28% $879
May-95 31.00 3.90 103.81% $909
Jun-95 30.00 8.85 108.76% $984
Jul-95 31.00 9.89 109.80% $1,076
Aug-95 31.00 1.23 101.14% $1,084
Sep-95 30.00 2.59 102.51% $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 31.00 1.58 101.49% $1,056
Feb-96 29.00 3.35 103.27% $1,086
Mar-96 31.00 0.39 100.30% $1,085
Apr-96 30.00 3.91 103.82% $1,122
May-96 31.00 3.13 103.04% $1,151
Jun-96 30.00 -1.96 97.96% $1,123
Jul-96 31.00 -7.65 92.27% $1,032
Aug-96 31.00 2.99 102.90% $1,058
Sep-96 30.00 6.72 106.63% $1,124
Oct-96 31.00 -0.23 99.68% $1,115
Nov-96 30.00 5.55 105.46% $1,172
Dec-96 31.00 -3.08 96.84% $1,130
Jan-97 31.00 5.75 105.66% $1,189
Feb-97 28.00 -2.27 97.65% $1,157
Mar-97 31.00 -5.60 94.32% $1,086
Apr-97 30.00 4.81 104.72% $1,133
May-97 31.00 6.93 106.84% $1,206
Jun-97 30.00 4.11 104.02% $1,249
Jul-97 31.00 7.51 107.42% $1,336
Aug-97 31.00 -3.86 96.06% $1,278
Sep-97 30.00 5.80 105.71% $1,346
Oct-97 31.00 1.00% -3.77 96.15% $1,289
Nov-97 30.00 1.00% 2.86 102.78% $1,319
Dec-97 31.00 1.00% 0.22 100.13% $1,315
Jan-98 31.00 1.00% 1.35 101.26% $1,327
Feb-98 28.00 1.00% 7.51 107.43% $1,420
Mar-98 31.00 1.00% 3.51 103.42% $1,462
Apr-98 30.00 1.00% 1.96 101.88% $1,484
May-98 31.00 1.00% -2.57 97.35% $1,438
Jun-98 30.00 1.00% 6.33 106.24% $1,522
Jul-98 31.00 1.00% 2.04 101.95% $1,545
Aug-98 31.00 1.00% -16.32 83.61% $1,287
Sep-98 30.00 1.00% 10.33 110.24% $1,413
Oct-98 31.00 1.00% 7.06 106.97% $1,505
Nov-98 30.00 1.00% 6.96 106.87% $1,602
Dec-98 31.00 1.00% 8.54 108.45% $1,730
Jan-99 31.00 1.00% 8.09 108.00% $1,861
Feb-99 28.00 1.00% -4.91 95.02% $1,761
Mar-99 31.00 1.00% 5.57 105.48% $1,850
Apr-99 30.00 1.00% 0.35 100.27% $1,848
May-99 31.00 1.00% -1.36 98.56% $1,814
Jun-99 30.00 1.00% 6.52 106.43% $1,923
Jul-99 31.00 1.00% -1.36 98.56% $1,887
Aug-99 31.00 1.00% 0.55 100.46% $1,888
Sep-99 30.00 1.00% -1.96 97.96% $1,842
Oct-99 31.00 1.00% 5.87 105.78% $1,940
Nov-99 30.00 1.00% 5.97 105.88% $2,046
Dec-99 31.00 1.00% 10.10 110.01% $2,242
Listed in Order Max 2,242
to match MFPR Min 442
</TABLE>
OVERSEAS PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks long-term
growth of capital.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition, industry position, and market and economic
conditions to select investments.
INVESTOR PROFILE AND RISK:
(small solid bullet) Overseas Portfolio provides a means for investors
to diversify their own portfolios by participating in companies and
economies 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.
(small solid bullet) 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E OVERSEAS
Apr-82 0.01
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 28.00 0.10 100.02% $498
Mar-87 31.00 4.50 104.41% $518
Apr-87 30.00 7.27 107.18% $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 31.00 8.85 108.75% $547
Sep-87 30.00 -2.21 97.71% $532
Oct-87 31.00 -20.87 79.07% $419
Nov-87 30.00 0.91 100.83% $421
Dec-87 31.00 7.04 106.95% $448
Jan-88 31.00 -3.42 96.50% $431
Feb-88 29.00 2.66 102.58% $440
Mar-88 31.00 4.53 104.44% $458
Apr-88 30.00 1.65 101.57% $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 30.00 4.29 104.20% $435
Oct-88 31.00 4.43 104.34% $452
Nov-88 30.00 1.82 101.73% $458
Dec-88 31.00 0.20 100.11% $457
Jan-89 31.00 2.97 102.88% $468
Feb-89 28.00 1.73 101.65% $474
Mar-89 31.00 -0.09 99.82% $471
Apr-89 30.00 2.95 102.87% $483
May-89 31.00 -3.70 96.22% $463
Jun-89 30.00 -0.38 99.53% $459
Jul-89 31.00 9.35 109.26% $499
Aug-89 31.00 -0.71 99.21% $493
Sep-89 30.00 6.22 106.13% $521
Oct-89 31.00 -5.43 94.48% $490
Nov-89 30.00 5.39 105.31% $514
Dec-89 31.00 6.29 106.20% $544
Jan-90 31.00 -1.34 98.57% $534
Feb-90 28.00 -2.33 97.59% $519
Mar-90 31.00 3.78 103.69% $536
Apr-90 30.00 0.55 100.47% $537
May-90 31.00 6.54 106.44% $569
Jun-90 30.00 2.22 102.13% $579
Jul-90 31.00 5.06 104.97% $605
Aug-90 31.00 -10.19 89.74% $541
Sep-90 30.00 -9.50 90.42% $487
Oct-90 31.00 9.31 109.22% $530
Nov-90 30.00 -3.10 96.82% $511
Dec-90 31.00 -0.72 99.20% $504
Jan-91 31.00 0.97 100.88% $507
Feb-91 28.00 3.37 103.29% $522
Mar-91 31.00 -2.92 96.99% $504
Apr-91 30.00 2.20 102.11% $512
May-91 31.00 0.24 100.15% $511
Jun-91 30.00 -5.48 94.44% $481
Jul-91 31.00 4.96 104.87% $502
Aug-91 31.00 0.32 100.23% $501
Sep-91 30.00 4.07 103.99% $519
Oct-91 31.00 0.69 100.60% $520
Nov-91 30.00 -3.58 96.34% $499
Dec-91 31.00 3.48 103.39% $514
Jan-92 31.00 1.22 101.14% $517
Feb-92 29.00 -2.08 97.84% $504
Mar-92 31.00 -2.03 97.89% $492
Apr-92 30.00 6.22 106.13% $520
May-92 31.00 4.35 104.27% $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 31.00 2.49 102.40% $433
Jan-93 31.00 2.86 102.77% $443
Feb-93 28.00 1.96 101.88% $450
Mar-93 31.00 6.94 106.85% $478
Apr-93 30.00 6.65 106.56% $508
May-93 31.00 2.15 102.06% $516
Jun-93 30.00 -2.47 97.45% $501
Jul-93 31.00 3.95 103.86% $518
Aug-93 31.00 5.44 105.35% $543
Sep-93 30.00 -0.48 99.44% $538
Oct-93 31.00 3.62 103.53% $555
Nov-93 30.00 -4.22 95.70% $529
Dec-93 31.00 6.61 106.52% $561
Jan-94 31.00 6.52 106.43% $595
Feb-94 28.00 -1.76 98.16% $582
Mar-94 31.00 -2.48 97.44% $564
Apr-94 30.00 3.31 103.22% $580
May-94 31.00 -1.23 98.69% $570
Jun-94 30.00 -1.06 98.86% $562
Jul-94 31.00 2.65 102.56% $574
Aug-94 31.00 1.17 101.08% $577
Sep-94 30.00 -2.61 97.31% $560
Oct-94 31.00 2.06 101.97% $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 28.00 0.26 100.18% $512
Mar-95 31.00 3.08 102.99% $526
Apr-95 30.00 2.86 102.78% $538
May-95 31.00 1.39 101.30% $543
Jun-95 30.00 0.81 100.73% $544
Jul-95 31.00 4.44 104.35% $566
Aug-95 31.00 -2.78 97.14% $547
Sep-95 30.00 1.46 101.38% $553
Oct-95 31.00 -1.98 97.94% $539
Nov-95 30.00 1.16 101.08% $543
Dec-95 31.00 2.96 102.87% $556
Jan-96 31.00 1.88 101.79% $564
Feb-96 29.00 0.22 100.14% $562
Mar-96 31.00 1.53 101.44% $568
Apr-96 30.00 2.78 102.70% $581
May-96 31.00 0.06 99.97% $578
Jun-96 30.00 0.73 100.65% $580
Jul-96 31.00 -2.96 96.96% $560
Aug-96 31.00 0.75 100.66% $561
Sep-96 30.00 2.92 102.84% $575
Oct-96 31.00 -1.00 98.92% $566
Nov-96 30.00 5.22 105.13% $593
Dec-96 31.00 0.53 100.44% $593
Jan-97 31.00 0.00 99.91% $590
Feb-97 28.00 2.32 102.24% $601
Mar-97 31.00 0.91 100.82% $603
Apr-97 30.00 0.84 100.76% $606
May-97 31.00 6.25 106.16% $640
Jun-97 30.00 5.25 105.16% $671
Jul-97 31.00 3.39 103.30% $690
Aug-97 31.00 -7.53 92.39% $635
Sep-97 30.00 7.36 107.27% $678
Oct-97 31.00 1.00% -7.00 92.92% $628
Nov-97 30.00 1.00% -0.47 99.45% $622
Dec-97 31.00 1.00% 0.84 100.75% $624
Jan-98 31.00 1.00% 3.28 103.19% $641
Feb-98 28.00 1.00% 5.63 105.55% $674
Mar-98 31.00 1.00% 4.54 104.45% $701
Apr-98 30.00 1.00% 2.81 102.73% $717
May-98 31.00 1.00% -0.14 99.77% $713
Jun-98 30.00 1.00% -0.96 98.96% $702
Jul-98 31.00 1.00% 0.78 100.69% $704
Aug-98 31.00 1.00% -18.19 81.74% $573
Sep-98 30.00 1.00% -0.12 99.80% $570
Oct-98 31.00 1.00% 9.13 109.04% $619
Nov-98 30.00 1.00% 5.88 105.79% $652
Dec-98 31.00 1.00% 2.19 102.10% $663
Jan-99 31.00 1.00% 1.45 101.36% $669
Feb-99 28.00 1.00% -2.65 97.27% $649
Mar-99 31.00 1.00% 4.05 103.96% $672
Apr-99 30.00 1.00% 4.45 104.36% $698
May-99 31.00 1.00% -4.60 95.32% $663
Jun-99 30.00 1.00% 5.58 105.49% $696
Jul-99 31.00 1.00% 2.84 102.75% $712
Aug-99 31.00 1.00% 1.45 101.36% $719
Sep-99 30.00 1.00% 1.34 101.26% $725
Oct-99 31.00 1.00% 4.09 104.00% $751
Nov-99 30.00 1.00% 7.34 107.25% $802
Dec-99 31.00 1.00% 11.68 111.58% $892
Listed in Order Max 892
to match MFPR Min 419
</TABLE>
ASSET MANAGER: GROWTH PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND II
seeks to maximize total return over the long term by allocating its
assets among stocks, bonds, short-term instruments, and other
investments.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Allocating the fund's assets among stocks, bonds,
and short-term and money market instruments.
(small solid bullet) Maintaining a neutral mix over time of 70% of
assets in stocks, 25% of assets in bonds, and 5% of assets in
short-term and money market instruments.
(small solid bullet) Adjusting allocation among asset classes
gradually within the following ranges: stock class (50% - 100%), bond
class (0% - 50%), and short-term/money market class (0% - 50%).
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Analyzing an issuer using fundamental and/or
quantitative factors and evaluating each security's current price
relative to estimated long-term value in selecting investments.
INVESTOR PROFILE. 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, while spreading
its assets among all three asset classes, uses a more aggressive
approach by focusing on stocks for a higher potential return. The
value of each fund's investments and the income they generate will
vary. The graph below is based on a 5% Benchmark Rate of Return and
initial monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E ASSET MANAGER:GROWTH
Apr-82 0.01
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
Jan-97 31.00 4.27 104.18% $684
Feb-97 28.00 0.95 100.87% $687
Mar-97 31.00 -4.72 95.20% $651
Apr-97 30.00 4.19 104.10% $675
May-97 31.00 6.07 105.98% $713
Jun-97 30.00 2.97 102.88% $730
Jul-97 31.00 6.76 106.67% $776
Aug-97 31.00 -3.14 96.78% $748
Sep-97 30.00 3.69 103.60% $772
Oct-97 31.00 1.00% -2.37 97.55% $750
Nov-97 30.00 1.00% 2.88 102.80% $767
Dec-97 31.00 1.00% 1.74 101.65% $777
Jan-98 31.00 1.00% 0.00 99.91% $773
Feb-98 28.00 1.00% 6.11 106.03% $817
Mar-98 31.00 1.00% 3.71 103.62% $843
Apr-98 30.00 1.00% -0.31 99.61% $836
May-98 31.00 1.00% -1.01 98.91% $823
Jun-98 30.00 1.00% 2.35 102.27% $839
Jul-98 31.00 1.00% -0.87 99.05% $827
Aug-98 31.00 1.00% -12.59 87.34% $719
Sep-98 30.00 1.00% 3.73 103.64% $743
Oct-98 31.00 1.00% 6.36 106.27% $786
Nov-98 30.00 1.00% 5.00 104.91% $821
Dec-98 31.00 1.00% 5.38 105.29% $861
Jan-99 31.00 1.00% 2.94 102.85% $882
Feb-99 28.00 1.00% -2.59 97.33% $855
Mar-99 31.00 1.00% 1.00 100.91% $860
Apr-99 30.00 1.00% 2.97 102.88% $881
May-99 31.00 1.00% -1.74 98.18% $861
Jun-99 30.00 1.00% 4.96 104.87% $900
Jul-99 31.00 1.00% -2.04 97.88% $877
Aug-99 31.00 1.00% -0.24 99.67% $870
Sep-99 30.00 1.00% -2.03 97.89% $849
Oct-99 31.00 1.00% 4.08 103.99% $879
Nov-99 30.00 1.00% 1.76 101.68% $890
Dec-99 31.00 1.00% 5.69 105.60% $936
Listed in Order Max 936
to match MFPR Min 500
</TABLE>
CONTRAFUND PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND II seeks
lo ng-te rm capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Investing in securities of companies whose value
it believes is not fully recognized by the public.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns. The graph below is based
on a 5% Benchmark Rate of Return and initial monthly annuity income of
$500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E CONTRAFUND
Apr-82 0.01
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
Jan-97 31.00 3.86 103.77% $792
Feb-97 28.00 -2.78 97.15% $767
Mar-97 31.00 -2.59 97.33% $743
Apr-97 30.00 2.41 102.33% $757
May-97 31.00 6.18 106.09% $800
Jun-97 30.00 4.37 104.28% $831
Jul-97 31.00 8.59 108.50% $898
Aug-97 31.00 -2.82 97.10% $868
Sep-97 30.00 6.77 106.68% $922
Oct-97 31.00 1.00% -3.02 96.90% $890
Nov-97 30.00 1.00% -0.05 99.87% $885
Dec-97 31.00 1.00% 1.84 101.75% $897
Jan-98 31.00 1.00% -0.10 99.81% $892
Feb-98 28.00 1.00% 7.27 107.19% $952
Mar-98 31.00 1.00% 4.86 104.77% $994
Apr-98 30.00 1.00% 0.95 100.87% $998
May-98 31.00 1.00% -2.34 97.58% $970
Jun-98 30.00 1.00% 5.38 105.29% $1,017
Jul-98 31.00 1.00% 0.14 100.05% $1,014
Aug-98 31.00 1.00% -14.97 84.96% $858
Sep-98 30.00 1.00% 5.83 105.74% $903
Oct-98 31.00 1.00% 3.29 103.20% $928
Nov-98 30.00 1.00% 6.66 106.57% $985
Dec-98 31.00 1.00% 12.16 112.06% $1,100
Jan-99 31.00 1.00% 5.73 105.64% $1,157
Feb-99 28.00 1.00% -3.68 96.25% $1,109
Mar-99 31.00 1.00% 3.56 103.47% $1,143
Apr-99 30.00 1.00% 2.14 102.06% $1,162
May-99 31.00 1.00% -2.02 97.90% $1,133
Jun-99 30.00 1.00% 5.41 105.32% $1,188
Jul-99 31.00 1.00% -1.65 98.27% $1,163
Aug-99 31.00 1.00% -2.92 97.00% $1,123
Sep-99 30.00 1.00% -0.32 99.60% $1,114
Oct-99 31.00 1.00% 3.66 103.57% $1,149
Nov-99 30.00 1.00% 3.96 103.87% $1,189
Dec-99 31.00 1.00% 8.89 108.80% $1,288
Listed in Order Max 1,288
to match MFPR Min 500
</TABLE>
GROWTH OPPORTUNITIES PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND III
seeks to provide capital growth.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Potentially investing in other types of
securities, including bonds which may be lower-quality debt
securities. These securities can be more volatile due to increased
sensitivity to interest rate increases, and adverse issuer, political,
regulatory, market, or economic developments.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both. The value of the fund's investments will vary and can
decline in response to adverse issuer, political, regulatory, market
or economic developments.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors seeking
growth of capital. The investment philosophy is not constrained by any
particular investment style. The fund's assets may be invested in
securities of foreign issuers in addition to securities of domestic
issuers. The graph below is based on a 5% Benchmark Rate of Return and
initial monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E GROWTH OPPORTUNITIES
Apr-82 0.01
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
Jan-97 31.00 4.74 104.65% $725
Feb-97 28.00 0.95 100.87% $729
Mar-97 31.00 -5.10 94.82% $688
Apr-97 30.00 4.57 104.48% $716
May-97 31.00 6.49 106.40% $759
Jun-97 30.00 3.32 103.23% $780
Jul-97 31.00 7.71 107.62% $836
Aug-97 31.00 -3.80 96.12% $801
Sep-97 30.00 4.17 104.08% $830
Oct-97 31.00 1.00% -2.00 97.92% $809
Nov-97 30.00 1.00% 3.53 103.44% $834
Dec-97 31.00 1.00% 2.77 102.68% $853
Jan-98 31.00 1.00% 0.42 100.33% $852
Feb-98 28.00 1.00% 6.25 106.17% $901
Mar-98 31.00 1.00% 3.11 103.02% $924
Apr-98 30.00 1.00% -0.50 99.42% $915
May-98 31.00 1.00% -0.70 99.22% $904
Jun-98 30.00 1.00% 2.40 102.32% $922
Jul-98 31.00 1.00% 0.34 100.25% $920
Aug-98 31.00 1.00% -12.97 86.96% $797
Sep-98 30.00 1.00% 6.16 106.07% $842
Oct-98 31.00 1.00% 7.65 107.56% $902
Nov-98 30.00 1.00% 6.42 106.33% $955
Dec-98 31.00 1.00% 5.39 105.30% $1,002
Jan-99 31.00 1.00% 0.92 100.83% $1,006
Feb-99 28.00 1.00% -4.71 95.22% $954
Mar-99 31.00 1.00% 2.53 102.44% $973
Apr-99 30.00 1.00% 4.16 104.07% $1,009
May-99 31.00 1.00% -0.66 99.26% $997
Jun-99 30.00 1.00% 4.37 104.28% $1,036
Jul-99 31.00 1.00% -2.33 97.59% $1,007
Aug-99 31.00 1.00% -2.47 97.45% $977
Sep-99 30.00 1.00% -3.42 96.50% $939
Oct-99 31.00 1.00% 3.86 103.77% $970
Nov-99 30.00 1.00% 0.13 100.05% $967
Dec-99 31.00 1.00% 2.34 102.25% $985
Listed in Order Max 1,036
to match MFPR Min 500
</TABLE>
BALANCED PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND III seeks both
income and growth of capital.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing approximately 60% of assets in stocks
and other equity securities and the remainder in bonds and other debt
securities, including lower-quality debt securities when its outlook
is neutral.
(small solid bullet) Investing at least 25% of total assets in
fixed-income senior securities (including debt securities and
preferred stock).
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) With respect to equity investments, emphasizing
above-average income-producing equity securities, which tend to lead
to investments in stocks that have more "value" characteristics than
"growth" characteristics.
(small solid bullet) Analyzing a security's issuer using fundamental
factors and evaluating each security's current price relative to
estimated long-term value in selecting investments. The value of the
fund's investments will vary from day to day, and can decline in
response to interest rate increases, adverse issuer, political,
regulatory or economic developments.
INVESTOR PROFILE. The fund may be appropriate for investors who seek a
balance between stocks and bonds. The fund may invest its assets in
securities of foreign issuers in addition to domestic issuers. The
graph below is based on a 5% benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E BALANCED
Apr-82 0.01
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
Jan-97 31.00 3.19 103.10% $575
Feb-97 28.00 1.68 101.60% $582
Mar-97 31.00 -2.80 97.12% $563
Apr-97 30.00 3.78 103.69% $582
May-97 31.00 3.96 103.87% $602
Jun-97 30.00 3.66 103.57% $621
Jul-97 31.00 5.58 105.49% $652
Aug-97 31.00 -4.66 95.26% $619
Sep-97 30.00 4.01 103.92% $640
Oct-97 31.00 1.00% -2.11 97.81% $624
Nov-97 30.00 1.00% 2.44 102.36% $636
Dec-97 31.00 1.00% 2.03 101.94% $645
Jan-98 31.00 1.00% 1.10 101.01% $649
Feb-98 28.00 1.00% 3.72 103.64% $670
Mar-98 31.00 1.00% 3.76 103.67% $692
Apr-98 30.00 1.00% 0.81 100.73% $694
May-98 31.00 1.00% 0.00 99.91% $691
Jun-98 30.00 1.00% 2.26 102.18% $703
Jul-98 31.00 1.00% -0.07 99.84% $699
Aug-98 31.00 1.00% -10.81 89.11% $620
Sep-98 30.00 1.00% 5.70 105.61% $653
Oct-98 31.00 1.00% 3.66 103.57% $673
Nov-98 30.00 1.00% 3.73 103.64% $695
Dec-98 31.00 1.00% 3.53 103.44% $716
Jan-99 31.00 1.00% 1.12 101.03% $720
Feb-99 28.00 1.00% -1.78 98.14% $704
Mar-99 31.00 1.00% 2.50 102.41% $718
Apr-99 30.00 1.00% 3.21 103.12% $738
May-99 31.00 1.00% -2.24 97.68% $718
Jun-99 30.00 1.00% 2.10 102.02% $729
Jul-99 31.00 1.00% -2.43 97.49% $708
Aug-99 31.00 1.00% -1.08 98.84% $697
Sep-99 30.00 1.00% -1.87 98.05% $680
Oct-99 31.00 1.00% 2.83 102.74% $696
Nov-99 30.00 1.00% 0.00 99.92% $693
Dec-99 31.00 1.00% 2.30 102.21% $705
Listed in Order Max 738
to match MFPR Min 500
</TABLE>
GROWTH & INCOME PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND III
seeks high total return through a combination of current income and
capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing a majority of assets in common stocks
with a focus on those that pay current dividends and show potential
for capital appreciation.
(small solid bullet) Potentially investing in bonds, including
lower-quality debt securities, as well as stocks that are not
currently paying dividends, but offer prospects for future income or
capital appreciation.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position, and market and economic
conditions to select investments.
INVESTOR PROFILE. 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
investments. The graph below is based on a 5% benchmark Rate of Return
and initial monthly annuity income rate of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E GROWTH & INCOME
Apr-82 0.01
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
Feb-95 28.00
Mar-95 31.00
Apr-95 30.00
May-95 31.00
Jun-95 30.00
Jul-95 31.00
Aug-95 31.00
Sep-95 30.00
Oct-95 31.00
Nov-95 30.00
Dec-95 31.00
Jan-96 31.00
Feb-96 29.00
Mar-96 31.00
Apr-96 30.00
May-96 31.00
Jun-96 30.00
Jul-96 31.00
Aug-96 31.00
Sep-96 30.00
Oct-96 31.00
Nov-96 30.00
Dec-96 31.00 $500
Jan-97 31.00 2.50 102.41% $510
Feb-97 28.00 0.20 100.12% $509
Mar-97 31.00 -4.38 95.54% $484
Apr-97 30.00 5.40 105.31% $508
May-97 31.00 5.60 105.51% $533
Jun-97 30.00 5.12 105.03% $558
Jul-97 31.00 8.09 108.00% $600
Aug-97 31.00 -5.07 94.85% $567
Sep-97 30.00 5.26 105.17% $594
Oct-97 31.00 1.00% -2.82 97.10% $574
Nov-97 30.00 1.00% 4.48 104.39% $597
Dec-97 31.00 1.00% 2.22 102.13% $607
Jan-98 31.00 1.00% 0.56 100.47% $608
Feb-98 28.00 1.00% 6.85 106.77% $646
Mar-98 31.00 1.00% 5.08 104.99% $676
Apr-98 30.00 1.00% 0.00 99.92% $672
May-98 31.00 1.00% -1.49 98.43% $659
Jun-98 30.00 1.00% 5.12 105.03% $690
Jul-98 31.00 1.00% -0.69 99.23% $681
Aug-98 31.00 1.00% -14.17 85.76% $582
Sep-98 30.00 1.00% 7.49 107.40% $622
Oct-98 31.00 1.00% 7.79 107.70% $668
Nov-98 30.00 1.00% 6.39 106.30% $707
Dec-98 31.00 1.00% 5.49 105.40% $742
Jan-99 31.00 1.00% 2.23 102.14% $755
Feb-99 28.00 1.00% -1.92 98.00% $737
Mar-99 31.00 1.00% 3.15 103.06% $756
Apr-99 30.00 1.00% 2.81 102.73% $774
May-99 31.00 1.00% -2.85 97.07% $748
Jun-99 30.00 1.00% 4.46 104.37% $778
Jul-99 31.00 1.00% -3.51 96.41% $747
Aug-99 31.00 1.00% -1.33 98.59% $733
Sep-99 30.00 1.00% -1.78 98.14% $716
Oct-99 31.00 1.00% 5.26 105.17% $750
Nov-99 30.00 1.00% 0.59 100.51% $751
Dec-99 31.00 1.00% 2.25 102.16% $764
Listed in Order Max 778
to match MFPR Min 484
</TABLE>
MID CAP PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND
III seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Investing at least 65% of total assets in
securities of companies with medium market capitalizations (those with
market capitalizations similar to companies in the S&P MidCap
400).
(small solid bullet) Potentially investing in companies with
smaller or larger market capitalizations.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" or "value" stocks
or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors
seeking long-term growth of capital through equity securities,
including growth or value stocks, or a combination of both. The graph
below is based on a 5% benchmark Rate of Return and initial monthly
annuity income rate of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E MID CAP
Apr-82 0.01
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
Feb-95 28.00
Mar-95 31.00
Apr-95 30.00
May-95 31.00
Jun-95 30.00
Jul-95 31.00
Aug-95 31.00
Sep-95 30.00
Oct-95 31.00
Nov-95 30.00
Dec-95 31.00
Jan-96 31.00
Feb-96 29.00
Mar-96 31.00
Apr-96 30.00
May-96 31.00
Jun-96 30.00
Jul-96 31.00
Aug-96 31.00
Sep-96 30.00
Oct-96 31.00
Nov-96 30.00
Dec-96 31.00
Jan-97 31.00
Feb-97 28.00
Mar-97 31.00
Apr-97 30.00
May-97 31.00
Jun-97 30.00
Jul-97 31.00
Aug-97 31.00
Sep-97 30.00
Oct-97 31.00 1.00%
Nov-97 30.00 1.00%
Dec-97 31.00 1.00%
Jan-98 31.00 1.00%
Feb-98 28.00 1.00%
Mar-98 31.00 1.00%
Apr-98 30.00 1.00%
May-98 31.00 1.00%
Jun-98 30.00 1.00%
Jul-98 31.00 1.00%
Aug-98 31.00 1.00%
Sep-98 30.00 1.00%
Oct-98 31.00 1.00%
Nov-98 30.00 1.00%
Dec-98 31.00 1.00% 3.10 $500
Jan-99 31.00 1.00% 2.04 101.95% $508
Feb-99 28.00 1.00% -5.42 94.51% $478
Mar-99 31.00 1.00% 4.92 104.83% $499
Apr-99 30.00 1.00% 6.90 106.81% $531
May-99 31.00 1.00% -0.99 98.93% $523
Jun-99 30.00 1.00% 6.61 106.52% $555
Jul-99 31.00 1.00% -0.17 99.74% $551
Aug-99 31.00 1.00% 0.77 100.68% $553
Sep-99 30.00 1.00% -1.86 98.06% $540
Oct-99 31.00 1.00% 6.53 106.44% $572
Nov-99 30.00 1.00% 6.78 106.69% $608
Dec-99 31.00 1.00% 16.15 116.05% $703
Listed in Order Max 703
to match MFPR Min 478
</TABLE>
MORGAN STANLEY ASSET MANAGEMENT
EMERGING MARKETS DEBT PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks high total return by
investing primarily in Fixed Income Securities of government and
government-related issuers and, to a lesser extent, of corporate
issuers in emerging market countries.
(small solid bullet) APPROACH. Morgan Stanley Asset Management
seeks high total return by investing in a portfolio of emerging market
debt that offers low correlation to many other asset classes. Using
macroeconomic and fundamental analysis, Morgan Stanley Asset
Management seeks to identify developing countries that are undervalued
and have attractive or improving fundamentals. After the country
allocation is determined, the sector and security selection is made
within each country.
(small solid bullet) PROCESS. Morgan Stanley Asset Management's
global allocation team analyzes the global economic environment and
its impact on emerging markets. Morgan Stanley As set Management
focuses on investing in countries that show signs of positive
fundamental change. This analysis considers macroeconomic factors,
such as GDP growth, inflation, monetary policy, fiscal policy and
interest rates and sociopolitical factors such as political risk,
leadership, social stability, and commitment to reform. In selecting
securities, Morgan Stanley Asset Management first examines
yield curves with respect to a country and then considers
instrument-specific criteria, including: (1) spread duration; (2) real
interest rates; and (3) liquidity. The Portfolio's holdings may range
in maturity from overnight to 30 years or more and will not be subject
to any minimum credit rating standard. Morgan Stanley Asset
Management may , when or if available, use hedging strategies,
including the use of derivatives to protect the Portfolio from
overvalued currencies or to take advantage of undervalued currencies.
EMERGING MARKETS EQUITY PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation by investing primarily in Equity Securities of issuers in
emerging market countries.
(small solid bullet) APPROACH. Mor gan Stanley Asset Management
seeks to maximize returns by investing in growth-oriented equity
securities in emerging markets. Mor gan Stanley Asset Management's
investment approach combines top-down country allocation with
bottom-up stock selection. Investment selection criteria include
attractive growth characteristics, reasonable valuations and
managements with a strong shareholder value orientation.
(small solid bullet) PROCESS. Morgan Stanley Asset Management's
global allocation team analyzes the global economic environment,
particularly its impact on emerging markets and allocates the
Portfolio's assets among emerging markets based on relative economic,
political, and social fundamentals, stock valuations and investor
sentiment. Morgan Stanley Asset Management invests within
countries based on the work of country specialists who conduct
extensive fundamental analysis of issuers within these markets and
seek to identify issuers with strong earnings growth prospects. To
manage risk, Morgan Stanley Asset Management emphasizes
thorough macroeconomic and fundamental research.
GLOBAL EQUITY PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation by investing primarily in Equity Securities of issuers
throughout the world, including U.S. issuers .
(small solid bullet) APPROACH. Morgan Stanley Asset
Management seeks to maintain a diversified portfolio of global equity
securities based on individual stock selection. Morgan Stan ley
Asset Management emphasizes a bottom-up approach to investing that
seeks to identify securities of undervalued issuers.
(small solid bullet) PROCESS. Morgan Stanley Asset Management
selects securities for investment from a universe of eligible issuers
consisting of approximately 3,200 companies in the Mor gan Stanley
Capital International (MSCI) World Index. Morgan Stanley Asset
Management expects to invest at least 20% of the Portfolio's total
assets in the common stocks of U.S. issuers. The investment process is
value driven and based on individual stock selection. Morgan Stanley
Asset Management considers value criteria with an emphasis on
cash flow and the intrinsic value of company assets. Securities which
appear undervalued according to these criteria are then subjected to
in-depth fundamental analysis. Morgan Stanley Asset Management
conducts a thorough investigation of the issuer's balance sheet, cash
flow and income statement and assesses the company's business
franchise, including product, competitiveness, market positioning, and
industry structure. Meetings with senior company management are
integral to the investment process.
INTERNATIONAL MAGNUM PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation by investing primarily in Equity Securities of non-U.S.
issuers domiciled in EAFE countries.
(small solid bullet) APPROACH. Morgan Stanley A sset Management
seeks to achieve superior long-term returns by creating a diversified
portfolio of undervalued international equity securities. To
achieve this goal, Morgan Stanley Asset Management uses a combination
of strategic geographic asset allocation and fundamental, value
oriented stock selection.
(small solid bullet) PROCESS. The Portfolio is managed using a
two-part process combining the expertise of investment teams based in
New York, London, Tokyo, and Singapore. The New York-based portfolio
management team decides upon the appropriate allocation of the
Portfolio's assets among Europe, Japan and developed Asia, including
Australia and New Zealand. Regional allocation decisions are based on
variety of factors, including relative valuations, earnings
expectations, macroeconomic factors, as well as input from the
regional stock selection teams and from the Morgan Stanley Asset
Management's Asset Allocation Committee, which is made up of
several of the Morgan Stanley Asset Management's most senior
investment officers. Once the allocations to Europe, Asia, and Japan
have been determined, three overseas investment teams in London (for
European stocks), Tokyo (for Japanese stocks) and Singapore (for Asian
stocks) decide which stocks to purchase for their respective
geographic regions. The regional portfolio management teams look for
stocks that they believe to be undervalued by the market. The regional
specialists analyze each company's finances, products, and
management, typically meeting with each company's management, before a
stock is purchased for the Portfolio. The Portfolio invests
primarily in countries comprising the MSCI Europe, Australiasia, Far
East (EAFE) Index (the "EAFE Index"). EAFE countries include Japan,
most nations in Western Europe, and the more developed nations of
Asia, such as Australia, New Zealand, Hong Kong, and Singapore.
However, the Portfolio also may invest up to 5% of its assets in
countries not included in the EAFE Index.
PBHG
SELECT 20 PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Select 20 Portfolio, a non-diversified
Portfolio, seeks long-term growth of capital.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in growth securities of a
limited number (i.e., no more than 20 stocks) of large capitalization
companies that, in Pilgrim Baxter & Associates, Ltd.'s (the "Adviser")
opinion, have strong business momentum , earnings growth and
capital appreciation potential. These companies will generally have
market capitalization in excess of $1 billion.
(small solid bullet) The growth securities in the Portfolio are
primarily common stocks, but may also include other equity securities
such as warrants and rights to purchase common stocks, and convertible
securities.
(small solid bullet) The Portfolio is non-diversified, which means its
performance is dependent upon the securities of a smaller number of
companies. As a result, the impact of a single change in value
(positive or negative) of a single holding may be magnified.
GROWTH II PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks capital appreciation.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in growth securities of
small and medium sized companies that, in the Adviser's opinion, have
strong business momentum, earnings growth and capital
appreciation potential. These companies will generally have market
capitalizations or annual revenues between $500 million and $10
billion.
(small solid bullet) The growth securities in the Portfolio are
primarily common stocks, but may also include other equity securities
such as warrants and rights to purchase common stocks, and convertible
securities.
(small solid bullet) The Portfolio emphasizes small and medium sized
growth companies, so it may be more volatile than the stock market in
general, as measured by the S&P 500.
SELECT VALUE PORTFOLIO (PREVIOUSLY CALLED LARGE CAP VALUE PORTFOLIO)
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term growth of capital
and income. Current income is a secondary objective.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in value securities of no
more than 30 large capitalization companies that, in the
opinion of the Adviser and Pilgrim Baxter Value Investors, Inc. (the
"Sub-Adviser"), are currently underpriced using certain financial
measurements, such as their price-to-earnings ratios.
(small solid bullet) The value securities in the Portfolio are
primarily common stocks, but may also include other equity
securities such as warrants and rights to purchase common stocks and
convertible securities. The Portfolio holds a limited number of
stocks and the impact of the change in value (positive or negative) of
a single holding may be magn ified.
SMALL CAP VALUE PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks to achieve above-average
total return over a market cycle of three to five years, consistent
with reasonable risk.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in value securities of
companies whose market capitalizations are within the range of the
Russell 2000 index.
(small solid bullet) The value securities in the Portfolio are
primarily common stocks that, in the opinion of the Adviser and the
Sub-Adviser, are currently underpriced using certain financial
measurements, such as their price-to-earnings ratios, but may also
include other equity securities such as warrants and rights to
purchase common stocks and convertible securities.
(small solid bullet) The Portfolio's sector weightings are generally
within 10% of the Russell 2000's sector weightings. In addition, the
Portfolio generally has lower price-to-earnings ratios than the
Russell 2000.
(small solid bullet) The Portfolio emphasizes value securities of
smaller sized companies, so it is likely to be more volatile than the
stock market in general, as measured by the S&P 500 Index.
TECHNOLOGY & COMMUNICATIONS PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio, a non- diversified
Portfolio, seeks long-term growth of capital. Current income is
incidental to the Portfolio's objective.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in common stocks of
companies doing business in the technology and communications sectors
of the market. The Portfolio is concentrated which means it will
invest 25% of more of its total assets in one or more of the
industries within these sectors. These industries may include computer
software and hardware, network and cable broadcasting, semiconductors,
defense and data storage and retrieval, and biotechnology.
(small solid bullet) The Portfolio offers investors significant
growth potential because it invests in companies that may be
responsible for breakthrough products or technologies or positioned to
take advantage of cutting-edge developments.
(small solid bullet) The Portfolio's holdings may range from
smaller companies developing new technologies or pursuing scientific
breakthroughs to large, blue chip firms with established track records
in developing, using or marketing scientific advances.
(small solid bullet) The Portfolio is non-diversified, which means
it its performance is dependent on the securities of a smaller number
of companies. As a result, the impact of a change in value
(positive or negative) of a single holding may be magnified.
(small solid bullet) Securities of technology companies are strongly
affected by worldwide scientific and technological developments and
governmental policies and, therefore, are generally more volatile than
securities of companies not dependent upon or associated with
technology issues.
STRONG
MID CAP GROWTH FUND II
OBJECTIVE AND STRATEGY
(small solid bullet) Mid Cap Growth Fund II seeks capital growth
through investments in mid-sized companies.
(small solid bullet) The Fund invests primarily in equity securities
that the Adviser believes have above-average growth prospects.
(small solid bullet) Under normal market conditions, the Fund will
invest at least 65% of its total assets in equity securities,
including (a) common stocks, (b) preferred stocks, and (c) securities
that are convertible into common or preferred stocks, such as warrants
and convertible bonds.
(small solid bullet) While the emphasis of the Fund is clearly on
equity securities, the Fund may invest a limited portion of its assets
in debt obligations when the Adviser perceives that they are more
attractive than stocks on a long-term basis.
(small solid bullet) The Fund may invest up to 35% of its total assets
in debt obligations, including intermediate-to-long term corporate or
U.S. government debt securities. Although the debt obligations in
which it invests will be primarily investment grade, the Fund may
invest up to 5% of its net assets in non-investment grade debt
obligations.
(small solid bullet) When the Adviser determines that market
conditions warrant a temporary defensive position, the Fund may invest
without limitation in cash and short-term fixed-income securities.
(small solid bullet) The Fund may invest up to 25% of its assets in
foreign securities, including both direct investments and investments
made through depository receipts.
(small solid bullet) The Fund generally will invest in mid-size
companies whose earnings are believed to be in a relatively strong
growth trend, and, to a lesser extent, in companies in which
significant further growth is not anticipated but whose market value
is thought to be undervalued.
(small solid bullet) In identifying companies with favorable growth
prospects, the Adviser ordinarily looks to certain characteristics,
such as (a) prospects for above-average sales and earnings growth; (b)
high return on invested capital; (c) overall financial strength,
including sound financial and accounting policies and a strong balance
sheet; (d) competitive advantages, including innovative products and
services; (e) effective research, product development, and marketing;
and (f) stable, capable management.
OPPORTUNITY FUND II
OBJECTIVE AND STRATEGY
(small solid bullet) Opportunity Fund II seeks capital growth.
(small solid bullet) The Fund invests primarily in equity securities
and currently emphasizes investments in medium-sized companies the
Adviser believes are under-researched and attractively valued.
(small solid bullet) The Fund will invest at least 70% of its total
assets in equity securities, including (a) common stocks, (b)
preferred stocks, and (c) securities that are convertible into common
or preferred stocks, such as warrants and convertible bonds.
(small solid bullet) Under normal market conditions, the Fund expects
to be fully invested in equities.
(small solid bullet) The Fund may, however, invest up to 30% of its
net assets in debt obligations, including intermediate- to long-term
corporate or U.S. government debt securities. Although the debt
obligations in which it invests will be primarily investment grade,
the Fund may invest up to 5% of its net assets in non-investment grade
debt obligations.
(small solid bullet) When the Adviser determines that market
conditions warrant a temporary defensive position, it may use that
allowance to invest up to 30% of its net assets in cash and short-term
fixed-income securities.
(small solid bullet) The Fund may invest up to 25% of its assets in
foreign securities, including both direct investments and investments
made through depository receipts.
(small solid bullet) In selecting its equity investments, the Adviser
seeks to identify attractive investment opportunities that have not
become widely recognized by other stock analysts or the financial
press. Through first-hand research that often includes on-site visits
with the leaders of companies, the Adviser looks for companies with
fundamental value or growth potential that is not yet reflected in
their current market prices. In many cases, companies in the small-
and medium-capitalization markets are under-followed and, as a result,
less efficiently priced than their larger, better known counterparts.
(small solid bullet) The Fund's investments are therefore likely to
consist, in part, of securities in small- and medium-sized companies.
Many of these companies may have successfully emerged from the
start-up phase and have potential for future growth. Because of their
longer track records and more seasoned management, they generally pose
less investment uncertainty than do the smallest companies. In
general, smaller-capitalization companies often involve greater risks
than investments in established companies.
WARBURG PINCUS
INTERNATIONAL EQUITY PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation.
(small solid bullet) The Portfolio pursues its investment objective by
investing in equity securities of companies located or conducting a
majority of their business outside the United States.
(small solid bullet) The Portfolio i nten ds to invest
substantially all of its assets in common stocks, warrants and
securities convertible into or exchangeable for common stocks, and
will generally invest in at least three countries other than the
United States.
(small solid bullet) The Portfolio intends to diversify across
securities of issues located in a number of foreign countries, but
from time to time may invest a significant portion of its assets in a
single country.
(small solid bullet) Although the Portfolio emphasizes developed
countries, it may also invest in emerging markets.
(small solid bullet) In choosing equity securities, the Portfolio
managers look for companies of any size whose securities appear to be
discounted relative to earnings, assets, or projected growth. The
Portfolio managers determine value based on research and analysis,
taking all relevant factors into account.
RISK. In addition to risks associated with equity securities,
international investment entails special risk considerations including
currency fluctuations, lower liquidity, economic instability,
political uncertainty, and differences in accounting methods.
GLOBAL POST-VENTURE CAPITAL PORTFOLIO ( PREVIOUSLY CALLED
POST-VENTURE CAPITAL PORTFOLIO)
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term growth of
capital.
(small solid bullet) The Portfolio pursues an aggressive investment
strategy by investing primarily in equity securities of U.S. and
foreign companies considered to be in their post-venture
capital stage of development.
(small solid bullet) Under normal market conditions, the Portfolio
will invest up to at least 65% of its total assets in equity
securities of "post-venture capital companies." A post-venture capital
company is a company that has received venture capital financing
either (a) during the early stages of the company's existence or the
early stages of the development of a new product or service or (b) as
part of a restructuring or recapitalization of the company. In
addition, the investment of venture capital financing, distribution of
such company's securities to venture capital investors, or initial
public offering ("IPO"), will have been made within ten years prior to
the Portfolio's purchase of the company's securities.
(small solid bullet) The Portfolio will invest in three
countries, including the U.S.
(small solid bullet) Up to 10% of the Portfolio's assets may be
invested in private equity portfolios that invest in venture capital
companies.
(small solid bullet) A portion of the Portfolio's assets may be
invested in assets of companies expected to experience "special
situations," such as mergers or reorganizations.
RISK. The main risks associated with the portfolio include risks
associated with equity securities, particularly small, start-up and
special-situation companies. I n addition to risks associated with
equity securities, international investment entails special risk
considerations including currency fluctuations, lower liquidity,
economic instability, political uncertainty, and differences in
accounting methods. The Portfolio employs aggressive strategies
and may not be appropriate for all investors.
SMALL COMPANY GROWTH PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks capital growth by investing
primarily in equity securities of small sized U.S. companies that
represent attractive opportunities for capital growth.
(small solid bullet) The Portfolio considers a "small" company to be
one that has a market capitalization, measured at the time the
Portfolio purchases a security of that company, within the range of
capitalizations of companies represented in the Russell 2000 Index. As
of December 31, 1999 , the Russell 2000 Index included companies
with market capitalizations between $17.8 million and $1.3 billion.
Companies that outgrow the definition of small company after the
Portfolio has purchased its securities continue to be considered small
for purposes of the Portfolio's investment policies.
(small solid bullet) Small companies may (1) still be in the
development stage, (2) be older companies that appear to be entering a
new stage of growth, or (3) be companies providing products or
services with a high unit-volume growth rate.
(small solid bullet) The Portfolio may also invest in securities of
emerging-growth companies, which can be either small- or
medium -sized companies that have passed their start up phase
and that show positive earnings and prospects of achieving significant
profit and gain in a relatively short period of time. Emerging growth
companies generally stand to benefit from new products or services,
technological developments or changes in management and other factors
and include smaller companies experiencing unusual developments
affecting their market value.
(small solid bullet) The Portfolio is non-diversified and may invest a
greater portion of its assets in the securities of a smaller number of
issuers.
RISK. The Portfolio's main risks are the risks associated with equity
securities, particularly small, start-up, and special-situation
companies. The Portfolio may be subject to volatility resulting from
its non-diversified status.
FUNDS' AVAILABILITY TO SEPARATE ACCOUNTS
Shares of the Funds may also be sold to a variable life separate
account of Fidelity Investments Life and to variable annuity and
variable life separate accounts of other insurance companies. For a
discussion of the possible consequences associated with having the
Funds available to such other separate accounts, see RESOLVING
MATERIAL CONFLICTS on page .
THE INVESTMENT ADVISERS
FIDELITY
The investment adviser for the Fidelity Funds is Fidelity Management &
Research Company, a registered adviser under the Investment Advisers
Act of 1940. Fidelity Management & Research Company ( 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 o f February 29, 2000, FMR managed over $829
billion in assets . The portfolios of the Fidelity Funds, as part
of their operating expenses, pay an investment management fee to
FMR . These fees are part of the Fidelity Funds' expenses. See
the prospectuses for the Fidelity Funds for discussions of the
Fidelity Funds' expenses. Fidelity Investments Money Managemen t,
Inc., a subsidiary of FMR, chooses certain investments for some of the
Fidelity Funds. Beginning January 1, 2001, FMR Co., Inc., a
su bsidiary of FMR, will also choose certain investments for the
Fidelity Funds. Foreign affiliates of FMR may help choose
investments for some of the Fidelity Funds. BT is a wholly-owned
subsidiary of Bankers Trust Corporation. BT currently serves as
sub-adviser and custodian for the Index 500 Portfolio.
MORGAN STANLEY ASSET MANAGEMENT
On December 1, 1998, Morgan Stanley Asset Management Inc. changed
its name to Morgan Stanley Dean Witter Investment Management Inc. but
continues to do business in certain instances using the name Morgan
Stanley Asset Management. The investment Adviser for T he Universal
Institutional Funds, Inc. is Morgan Stanley Asset Management, which is
a wholly-owned subsidiary of Morgan Stanley Dean Witter & Co., which
is a preeminent global financial services firm that maintains leading
market positions in each of its three primary businesses - securities,
asset management and credit services. Morgan Stanley Asset
Management, a registered investment Adviser under the Investment
Advisers Act of 1940, as amended, serves as investment Adviser to
numerous open-end and closed-end investment companies as well as to
employee benefit plans, endowment funds, foundations and other
institutional investors. Morgan Stanley Asset Management's
principal business office is located at 1221 Avenue of the Americas,
New York, New York 10020.
PBHG
The investment Adviser for the PBHG Insurance Series Fund, Inc. is
Pilgrim Baxter & Associates, Ltd. ("Pilgrim Baxter"), a professional
investment management firm and registered investment Adviser that,
along with its predecessors, has been in business since 1982. The
controlling shareholder of Pilgrim Baxter is United Asset Management
Corporation ("UAM"), a New York stock exchange listed holding company
principally engaged through affiliated firms, in providing
institutional investments management services and acquiring
institutional investment management firms. UAM's headquarters are
located at One International Place, Boston, Massachusetts 02110. The
principal business address of the Adviser is 825 Duportail
Road, Wayne, Pennsylvania 19087. Pilgrim Baxter Value Investors,
Inc., the Sub-Adviser, is a wholly owned subsidiary of Pilgrim Baxter
and is a registered investment Adviser that was formed in 1940. As
with the Adviser, the controlling shareholder of the Sub-Adviser is
UAM. The principal business address of the Sub-Adviser is 825
Duportail Road, Wayne, Pennsylvania 19087.
STRONG
The investment Adviser for the Strong Funds is Strong Capital
Management, Inc. The Adviser began conducting business in 1974. Since
then, its principal business has been providing continuous investment
supervision for individuals and institutional accounts, such as
pension funds and profit-sharing plans, as well as mutual funds,
several of which are funding vehicles for variable insurance products.
The Adviser's principal mailing address is P.O. Box 2936, Milwaukee,
Wisconsin 53201. Mr. Richard S. Strong, the Chairman of the Board of
the Fund, is the controlling shareholder of the Adviser.
WARBURG PINCUS
The investment Adviser for the Warburg Pincus Trust is Credit
Suisse Asset Management, LLC. Credit Suisse Asset Management, LLC is a
member of Credit Suisse Asset Management, the institutional asset
management and mutual fund arm of Credit Suisse Group, one of the
world's leading banks. Credit Suisse Asset Management companies manage
approximately $72 billion in the U.S. and $203 billion globally.
IMPORTANT
You will find more complete information about the Funds, including the
risks associated with each portfolio, in their respective
prospectuses. You should read them in conjunction with this
prospectus.
FACTS ABOUT THE CONTRACT
PURCHASE OF A CONTRACT
We offer the Contracts only in states in which we have obtained
approval. Two types of Contracts are available. You may
purchase: (1) a NON-QUALIFIED CONTRACT using money from any source;
and (2) a QUALIFIED CONTRACT with money rolled over from a
qualified retirement plan, such as a 401(k) plan, 403(b) plan or IRA.
(small solid bullet) The minimum Purchase Payment for a Contract is
generally $25,000.
(small solid bullet) 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.
(small solid bullet) 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.
(small solid bullet) However, if you purchase the Contract as a
Qualified Contract (IRA), you must be the sole Owner of the Contract.
(small solid bullet) Generally, for all Contracts either you or the
Joint Annuitant must be no more than 85 years old.
(small solid bullet) APPLICATION AND INITIAL PURCHASE PAYMENT
When we receive your properly completed application, we apply your
payment to the purchase of a Contract within two valuation periods
after receipt at the Annuity Service Center. We will consider your
application 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) we receive the entire amount of your Purchase Payment.
The date we credit the payment and issue your Contract is called the
Contract Date. If your application is incomplete, we will request the
information necessary to complete the application. If you do not
furnish the information within five business days of the time
we receive your application, we will return your payment unless we
obtain your specific permission to keep it until you complete the
application.
FREE LOOK PRIVILEGE
You may return a Contract for a refund within 30 calendar 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 calendar days after you
receive it, we will promptly refund your Purchase Payment adjusted for
investment performance. If you return a Contract during the first ten
days after you receive it, we 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.
We will also make an adjustment for the amount of any annuity income
we paid before we received the Contract. If your free look period
ends on a non-business day, the next business day will be used.
ONCE THE FREE LOOK PERIOD EXPIRES, YOU CANNOT RETURN THE CONTRACT 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. If your future
payment allocation instructions are incomplete (e.g. unclear or
percentages do not equal 100%), your payments will be allocated to the
VIP Money Market Portfolio until we receive your complete
instructions. In these cases, we will not be responsible for the
results of unit value changes or lost market opportunity.
TRADING AMONG INVESTMENT OPTIONS
You may currently exchange amounts among the Investment Options
as often as you wish without charge. However, excessive exchange
activity can disrupt Portfolio management strategy and increase
Portfolio expenses, which are borne by everyone participating in the
Portfolio regardless of their exchange activity. Therefore, EFILI
reserves the right to limit the number of exchanges 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 must be in whole
numbers, not fractions.
You may change the allocations among the Investment Options by writing
or telephoning the Annuity Service Center or on our Internet
website.
(small solid bullet) TRA DING BY TELEPHONE OR INTERNET
EFILI reserves the right to change telephone or Internet exchange
provisions, or to eliminate them, and to limit or reject any telephone
or Internet exchange at any time. You may make up to eighteen
telephone/Internet exchanges per calendar year. Multiple exchanges
among the Investment Options in a single trading day count as one
exchange. After this total is reached, you will only be permitted to
complete exchanges in writing. We will not accept exchange requests
via fax or electronic mail.
We will not be responsible for any losses resulting from unauthorized
telephone or Internet exchanges if we follow reasonable procedures
designed to verify the identity of the caller or Internet user. We may
record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them and notify the
Annuity Service Center promptly of any discrepancies, as we will not
be responsible for resulting losses due to unit value changes after 10
calendar days from the mailing of the report.
(small solid bullet) USE OF MARKET TIMING SERVICES
In some cases, we may sell contracts 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 exchanges among the Subaccounts on the basis of
perceived market trends. Because the large exchange 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 Subaccounts may be subject
to modification if such rights are executed by a market timing firm or
similar third party authorized to initiate exchange transactions on
behalf of a Contract Owner(s). In modifying such rights, we may, among
other things, decline to accept (1) the exchange instructions of any
agent acting under a power of attorney on behalf of more than one
Contract Owner, or (2) the exchange instructions of individual
Contract Owners who have executed pre-authorized 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. We will impose such
restrictions only if we believe that doing so will prevent harm to
other Contract Owners.
(small solid bullet) EFFECTIVE DATE OF EXCHANGES AMONG INVESTMENT
OPTIONS
When you exchange among Investment Options, we will redeem shares of
the appropriate Portfolios at their prices as of the end of the
current Valuation Period. Generally, any Investment Option you
exchange 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 exchange from becomes liquid. This will
happen only if (1) the Investment Option you exchange 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 exchange from is investing in an equity Portfolio in an illiquid
position due to substantial redemptions or exchanges that require it
to sell Portfolio securities in order to make funds available.
The Investment Option you exchange 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 exchange will be
uninvested. After seven days the exchange will be made even if the
Investment Option you exchange from is not liquid.
(small solid bullet) IMPORTANT
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 we make 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. We will allocate the remainder
of your Purchase Payment to the Investment Options and/or apply it to
the purchase of fixed annuity income.
2. ADMINISTRATIVE CHARGES. Administrative charges compensate us 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. We deduct a daily asset charge
for our assumption of mortality and expense risks. Each day we deduct
an amount from the assets of each Investment Option at an effective
annual rate of 0.75%.
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
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 calculate the amount of your annuity income on 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.
If an Annuity Income Date falls on a day that is not the last day of a
Valuation Period, the amount of annuity income will be determined
based on the value of your selected Investment Options at the close of
the Valuation Period. Annuity income will generally be sent at the end
of the Valuation Period immediately following the day on which the
amount is determined.
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 $ 100 ,000.
2. In any circumstances where we deem it necessary for your
protection.
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.
(small solid bullet) FIXED ANNUITY INCOME. Any portion of your
Purchase Payment allocated to fixed annuity income will always remain
allocated to fixed annuity income. 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 .
(small solid bullet) VARIABLE ANNUITY INCOME. 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 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.
(small solid bullet) COMBINATION OF FIXED AND VARIABLE ANNUITY INCOME.
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 .
BENCHMARK RATE OF RETURN
When you purchase a Contract, we calculate an estimated first annuity
income amount, assuming that the Investment Options will earn the
Benchmark Rate of Return you choose. If the annualized Total 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 Total Return during that time is greater than the Benchmark
Rate of Return you choose, and will decrease if the annualized Total
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 ( e ) the selected Portfolios earn a constant
10% gross investment return before fees and expenses (equal to a
7. 90 % annualized Total 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INCOME ADVANTAGE
ANNUITY INCOME GRAPH
Current Expenses: 0.92%
Male, Age 65, Life w/ 10 years Updated 2/23/98
5% Benchmark 3.5% Benchmark
First Payment: $653.03 First Payment: $566.73
Net Returns Net Returns
Year -1.91% 5.00% 7.90% Year -1.91% 3.50% 7.90%
1 $651 $654 $656 1 $565 $568 $570
2 $608 $654 $674 2 $535 $568 $594
3 $568 $654 $693 3 $507 $568 $619
4 $530 $654 $712 4 $481 $568 $645
5 $495 $654 $731 5 $456 $568 $673
6 $463 $654 $752 6 $432 $568 $701
7 $432 $654 $772 7 $409 $568 $731
8 $404 $654 $794 8 $388 $568 $762
9 $377 $654 $816 9 $368 $568 $795
10 $353 $654 $838 10 $348 $568 $828
11 $329 $654 $861 11 $330 $568 $864
12 $308 $654 $885 12 $313 $568 $900
13 $287 $654 $909 13 $297 $568 $939
14 $268 $654 $935 14 $281 $568 $979
15 $251 $654 $960 15 $266 $568 $1,020
16 $234 $654 $987 16 $252 $568 $1,064
17 $219 $654 $1,014 17 $239 $568 $1,109
18 $204 $654 $1,042 18 $227 $568 $1,156
19 $191 $654 $1,071 19 $215 $568 $1,205
20 $178 $654 $1,101 20 $204 $568 $1,256
</TABLE>
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.
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 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.
(small solid bullet) ANNUITY INCOME TO BENEFICIARY. 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.
(small solid bullet) LUMP SUM PAYMENT. 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).
Any lump sum attributable to the fixed annuity portion of a Contract
will generally 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.
Any lump sum attributable to the variable annuity income portion of a
Contract will generally 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.
You should verify the accuracy of your transaction confirmations and
monthly statements immediately after you receive them and notify
the Annuity Service Center promptly of any discrepancies as we
will not be responsible for resul ting losses due to unit value
changes after 10 calendar days from the mailing of the report.
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 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 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 adviser 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
The Contract may be used as an Individual Retirement Annuity under
Section 408(b) of the Internal Revenue Code. Section 408(b) of the
Code permits eligible individuals to contribute to an individual
retirement program known as an "Individual Retirement Annuity." You
should seek competent advice as to the tax consequences associated
with the use of a Contract as a Qualified Contract.
Because the Contract's minimum Purchase Payment is greater than the
maximum annual contribution permitted to an Individual Retirement
Annuity, a Qualified 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.
If the Contract is used as a Qualified 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.
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).
(small solid bullet) IMPORTANT. This discussion of the Tax
Considerations assumes that the Contract will be treated as an annuity
cont r act 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
adviser 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 adviser 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) also has
(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 (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 Fidelity 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,
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.
TOTAL RETURN FOR AN INVESTMENT OPTION
The Total Return reflects the investment performance of the Investment
Option, less all expenses and charges, for the Valuation Period. EFILI
determines the Total 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.
(small solid bullet) 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.
(small solid bullet) A CUMULATIVE TOTAL RETURN reflects performance
over a stated period of time.
(small solid bullet) 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.
(small solid bullet) 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.
(small solid bullet) 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
We have prepared the following tables 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:
- -1.9 1 %, the Benchmark Rate of Return, and 9.8 6 %. 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 Total Return during
that time is greater than the Benchmark Rate of Return you choose, and
will decrease if the annualized Total 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 0 .9 2 % 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: 3/1/2000
DATE OF BIRTH: 1/1/35 FIRST ANNUITY INCOME DATE: 4/1/2000
PURCHASE PAYMENT ALLOCATION: 100% VARIABLE 0% FIXED
ANNUITY INCOME OPTION: SINGLE FREQUENCY OF ANNUITY INCOME: MONTHLY
LIFE ANNUITY
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 -1.91% 3.50% 9.86%
Apr. 1, 2000 65 $ 585 $ 588 $ 591
Apr. 1, 2001 66 $ 554 $ 588 $ 627
Apr. 1, 2002 67 $ 525 $ 588 $ 666
Apr. 1, 2003 68 $ 498 $ 588 $ 706
Apr. 1, 2004 69 $ 472 $ 588 $ 750
Apr. 1, 2009 74 $ 361 $ 588 $ 1,010
Apr. 1, 2014 79 $ 276 $ 588 $ 1,361
Apr. 1, 2019 84 $ 211 $ 588 $ 1,834
(1) The corresponding returns before annuity and investment expense s
are: 0%, 5.5 2 %, and 12.00%
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 $ 829.20 .
FIDELITY INCOME ADVANTAGE
ANNUITY INCOME GRAPH
Current Expenses: 0.92% 3/17/00
Male, Age 65, Life Only
3.5% Benchmark
First Payment: $586.89
Net Returns
Year -1.91% 3.50% 9.86%
1 $585 $588 $591
2 $554 $588 $627
3 $525 $588 $666
4 $498 $588 $706
5 $472 $588 $750
6 $447 $588 $796
7 $424 $588 $845
8 $402 $588 $897
9 $381 $588 $952
10 $361 $588 $1,010
11 $342 $588 $1,072
12 $324 $588 $1,138
13 $307 $588 $1,208
14 $291 $588 $1,283
15 $276 $588 $1,361
16 $261 $588 $1,445
17 $248 $588 $1,534
18 $235 $588 $1,628
19 $223 $588 $1,728
20 $211 $588 $1,834
$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 ILLUSTRATION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ANNUITANT(S): JOHN DOE ANNUITY PURCHASE AMOUNT: $100,000
SEX: MALE CONTRACT DATE: 3/1/2000
DATE OF BIRTH: 1/1/35 FIRST ANNUITY INCOME DATE: 4/1/2000
PURCHASE PAYMENT ALLOCATION: 100% VARIABLE 0% FIXED
ANNUITY INCOME OPTION: SINGLE FREQUENCY OF ANNUITY INCOME: MONTHLY
LIFE ANNUITY
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 -1.91% 5.00% 9.86%
Apr. 1, 2000 65 $ 675 $ 679 $ 681
Apr. 1, 2001 66 $ 630 $ 679 $ 713
Apr. 1, 2002 67 $ 589 $ 679 $ 746
Apr. 1, 2003 68 $ 550 $ 679 $ 780
Apr. 1, 2004 69 $ 514 $ 679 $ 816
Apr. 1, 2009 74 $ 366 $ 679 $ 1,024
Apr. 1, 2014 79 $ 260 $ 679 $ 1,284
Apr. 1, 2019 84 $ 185 $ 679 $ 1,610
(1) The corresponding returns before annuity and investment expenses
are: 0%, 7.05%, and 12.00%
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 $ 829.20 .
FIDELITY INCOME ADVANTAGE
ANNUITY INCOME GRAPH
Current Expenses: 0.92% 3/17/00
Male, Age 65, Life Only
5% Benchmark
First Payment: $677.33
Net Returns
Year -1.91% 5.00% 9.86%
1 $675 $679 $681
2 $630 $679 $713
3 $589 $679 $746
4 $550 $679 $780
5 $514 $679 $816
6 $480 $679 $854
7 $448 $679 $894
8 $419 $679 $935
9 $391 $679 $978
10 $366 $679 $1,024
11 $342 $679 $1,071
12 $319 $679 $1,121
13 $298 $679 $1,173
14 $278 $679 $1,227
15 $260 $679 $1,284
16 $243 $679 $1,343
17 $227 $679 $1,405
18 $212 $679 $1,470
19 $198 $679 $1,538
20 $185 $679 $1,610
$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
Investment Company Act of 1940 File No. 811-06388
THIS PAGE INTENTIONALLY LEFT BLANK
EFIA-pro-0400
1.700400.10 2
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 age 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. 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
15. Distributions are taxed generally as ordinary income under Federal
income tax laws.
16. The tax treatment of single sum distributions under Section 402(d)
of the Code is not applicable to distributions from IRAs.
17. 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
18. 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.
FINANCIAL INFORMATION
19. 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.
20. 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. 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.
PROSPECTUS
INCOME ADVANTAGE
INTRODUCTION
This prospectus describes a single premium variable income
a nnuity 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.
There are two types of Contracts. You may purchase:
(1) a "NON-QUALIFIED CONTRACT" with money from any source; a nd
(2) 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.
The Con tract provides you (the "Annuitant") with the opportunity to
receive annuity income for life 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.
Or, i f you have a Qualified Contract, you may choose a Contract
which permits you to withdraw part or all of the Withdrawal Value of
your Contract. Withdrawals are only available for allocations to
variable annuity income. Withdrawals may result in a reduction or
elimination of future annuity income. A Contract with a Withdrawal
Option will provide slightly less annuity income than an otherwise
identical Contract that does not permit withdrawals.
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.
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 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 150.
INVESTMENT OPTIONS
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 twenty-eight available Subaccounts of the
Empire Fidelity Investments Variable Annuity Account A (the "Variable
Account"). Amounts allocated to the Subaccounts will result in
annuity income that varies in amount according to the investment
results of the Subaccounts . The v ariable Subaccounts
invest in the mutual fund portfolios ("Portfolios") of Variable
Insurance Products Fund, Variable Insurance Products Fund II, and
Variable Insurance Products Fund III (the "Fidelity Funds"). FIDELITY
MANAGEMENT & RESEARCH COMPANY ("FMR") manages the Fidelity Funds.
The variable Subaccounts also invest in mutual fund portfolios managed
by MORGAN STANLEY ASSET MANAGEMENT (" MORGAN STANLEY "), PILGRIM
BAXTER & ASSOCIATES, LTD. OR PILGRIM BAXTER VALUE INVESTORS, INC.
("PBHG"), STRONG CAP ITAL MANAGEMENT, INC. ("STRONG") and CREDIT
SUISSE ASSET MANAGEMENT, LLC for the WARBURG PINCUS TRUST
PORTFOLIOS ("WAR BURG PINCUS") ("Other Funds").
All mutual fund portfolios available in this prospectus are
collectively known as the "Funds." We may add additional
Subaccounts and portfolios in the future.
LEGAL INFORMATION
This prospectus provides information that you should know before
purchasing a Contract. We have filed additional information about the
Contract and the Variable Account with the U.S. Securities and
Exchange Commission in a Statement of Additional Information dated
April 30, 2000. The Statement of Additional Information is
incorporated by reference in this prospectus and is available without
charge by calling EFILI at 1-800-544-2442 or by accessing the SEC
Internet website at (http://www.sec.gov). The table of contents of the
Statement of Additional Information appears on page 164.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. 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 EITHER THE CURRENT PROSPECTUS FOR THE
MONEY MARKET INVESTMENT OPTION OR THE PROSPECTUSES FOR ALL THE
INVESTMENT OPTIONS AVAILABLE IN THE CONTRACT.
THE CONTRACT IS NOT AVAILABLE IN ALL STATES. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY
NOT BE LAWFULLY MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS.
FOR FURTHER INFORMATION CALL EMPIRE FIDELITY INVESTMENTS LIFE
Nationally 1-800-544-2442
Date: April 30, 2000
PROSPECTUS CONTENTS
GLOSSARY 4
Summary of the Contract 6
FACTS ABOUT EFILI, THE
VARIABLE ACCOUNT AND THE FUNDS
EFILI 9
The Variable Account 9
The Funds 10
FACTS ABOUT THE CONTRACT
Purchase of a Contract 143
Free Look Privilege 143
Investment Allocation of Your 143
Purchase Payment
Trading Among Variable 143
Subaccounts
Charges 144
Annuity Income Dates 144
Signature Guarantee 144
Death Benefit 144
Fixed, Variable or 144
Combination Annuity Income
Benchmark Rate of Return 145
Types of Annuity Income 147
Options
Guarantee Period 147
Withdrawal Provisions 147
Reports 149
MORE ABOUT THE CONTRACT
Tax Considerations 149
Other Contract Provisions 151
Selling the Contracts 151
Postponement of Benefits 151
MORE ABOUT THE VARIABLE
ACCOUNT AND THE FUNDS
Changes in Investment Options 152
Total Return for a Subaccount 152
Voting Rights 152
Resolving Material Conflicts 152
Performance 152
Litigation 152
Appendix - Illustrations of 153
Values
Table of Contents of the 163
Statement of Additional
Information
GLOSSARY
ANNUITANT - You are the Annuitant. You receive lifetime income. For
Qualified 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 and the following description assumes you make no
withdrawals.
The estimated first annuity income amount is calculated assuming
that the Investment Options will earn the Benchmark Rate of Return you
choose. If the annualized Total Return (performance after all
expenses) of the Investment Options you choose matches the benchmark,
annuity income will stay constant. If the Total Return exceeds the
benchmark, annuity income will increase. If the Total Return 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, Variable Insurance Products Fund III and Other Funds
available in the Contract.
GUARANTEE PERIOD - The minimum period of time that income is
guaranteed to you or your heirs. If the Annuitant(s) die prior to the
end of the Guarantee Period, your beneficiary will continue to receive
income for the remainder of the Guarantee Period (or can choose a
commuted value as a lump sum benefit). Guarantee Periods available
range from 5 - 45 years.
INVESTMENT OPTIONS - The Subaccounts.
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 INVESTMENT FACTOR - An i ndex 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. 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; and (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 equivalent to an effective annual rate of not more than 1%.
NON-QUALIFIED CONTRACT - A Contract other than a Qualified 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, 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.
SUBACCOUNT - A division of the Variable Account, the assets of which
are invested in the shares of the corresponding portfolio of the Funds
available in th e Contract.
TOTAL RETURN - Used to measure the investment performance of
an Investment Option, after all expenses.
TRADING AMONG VARIABLE SUBACCOUNTS - Transfers of amounts among the
investment options.
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.
WITHDRAWAL (LIQUIDITY) PERIOD - Period of time you can take
money out of your annuity. The initial Withdrawal Period will be equal
to the life expectancy of the Annuitant(s). The life expectancy is in
whole numbers and is determined by IRS guidelines. If no withdrawals
are made from your annuity, the Withdrawal Period will operate as a
Guarantee Period. The length of the Withdrawal Period may shorten if a
withdrawal is made five or more years after your first income annuity
date. Withdrawals are only available for allocations to variable
annuity income.
WITHDRAWAL VALUE - The total amount you can take out of your
annuity during the Withdrawal Period is known as your Withdrawal
Value. The Withdrawal Value is only available for allocations to
variable annuity income.
YOU - The Annuitant. The Annuitant is always an Owner.
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SUMMARY OF THE CONTRACT
PURPOSE
This variable annuity provides periodic annuity income for your
life, or for your life and the life of a Joint Annuitant unless you
choose to surrender the Contract, if allowed. You may select from a
number of annuity income options. You may also choose a guaranteed
minimum number of years of annuity income or, if you have a Qualified
Contract, you may choose a Withdrawal option. See TYPES OF ANNUITY
INCOME OPTIONS on page 148 and ANNUITY INCOME INCLUDING WITHDRAWAL
OPTIONS on page 148. 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 145.
ANNUITY INCOME
We guarantee to provide annuity income for each Annuity Income Date
for your lifetime and for the lifetime of the Joint Annuitant, if any
(unless you choose to surrender the Contract, if allowed). 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.
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 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 you must be the only Owner.
PURCHASE OF CONTRACT
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.
There are two 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.
INVESTMENT OPTIONS
You allocate your Purchase Payment between variable and fixed annuity
income on your application. This allocation may not be changed. 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.
There are currently twenty-eight variable Subaccounts available as
Investment Options .
(small solid bullet) Five Subaccounts invest in shares of one of the
mutual fund portfolios of Fidelity Variable Insurance Products Fund.
The Variable Insurance Products Fund currently offers Money Market
Portfolio, High Income Portfolio, Equity-Income Portfolio, Growth
Portfolio, and Overseas Portfolio.
(small solid bullet) Five Subaccounts invest in shares of one
of the mutual fund portfolios of Fidelity Variable Insurance Products
Fund II. The Variable Insurance Products Fund II currently offers
Investment Grade Bond Portfolio, Asset Manager Portfolio, Index 500
Portfolio, Asset Manager: Growth Portfolio, and Contrafund Portfolio.
(small solid bullet) Four Subaccounts invest in shares of one
of the mutual fund portfolios of Fidelity Variable Insurance Products
Fund III. The Variable Insurance Products Fund III currently offers
Growth & Income Portfolio, Balanced Portfolio, Growth Opportunities
Portfolio and Mid Cap Portfolio .
(small solid bullet) The remaining Subaccounts invest in shares
of one of the mutual fund portfolios of Morgan Stanley Dean Witter,
PBHG, Strong, or Warburg Pincus.
FREE LOOK PERIOD
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 144. ONCE THE FREE LOOK PERIOD
EXPIRES, YOU CANNOT RETURN THE CONTRACT 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 145.
IMPORTANT
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. The
Contract constitutes the entire agreement between you and EFILI and
should be retained.
FEE TABLE
This information may assist you in understanding the various costs and
expenses that a Contract Owner 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 145 for additional information.
CONTRACT EXPENSES
NONE
SEPARATE ACCOUNT ANNUAL
EXPENSES
(as a percentage of Portfolio
average net assets)
Mortality and Expense Risk 0.75%
Charge
Account Fees and Expenses:
Administrative Charge 0.25%
Total Separate Account Annual 1.00%
Expenses
PORTFOLIO ANNUAL EXPENSES
(as a percentage of Portfolio average net assets)
<TABLE>
<CAPTION>
Management Fees Other Expenses Total Annual Expenses (after
reimbursement)
<S> <C> <C> <C>
FIDELITYA
Asset Manager 0.53% 0.09% 0.62%
Money Market 0.18% 0.09% 0.27%
Investment Grade Bond 0.43% 0.11% 0.54%
High Income 0.58% 0.11% 0.69%
Equity-Income 0.48% 0.08% 0.56%
Index 500 0.24% 0.04% 0.28%B
Growth 0.58% 0.07% 0.65%
Overseas 0.73% 0.14% 0.87%
Asset Manager: Growth 0.58% 0.12% 0.70%
Contrafund 0.58% 0.07% 0.65%
Growth Opportunities 0.58% 0.10% 0.68%
Balanced 0.43% 0.12% 0.55%
Growth & Income 0.48% 0.11% 0.59%
Mid Cap 0.57% 0.40% 0.97%
MORGAN STANLEY ASSET MANAGEMENT
Emerging Markets Debt 0.45% 0.98% 1.43%C
Emerging Markets Equity 0.42% 1.37% 1.79%C
Global Equity 0.47% 0.68% 1.15%C
International Magnum 0.29% 0.87% 1.16%C
PBHG
Select 20 0.85% 0.20% 1.05%D
Growth II 0.85% 0.35% 1.20%D
Select Value* 0.65% 0.30% 0.95%D
Small Cap Value 0.91% 0.29% 1.20%D
Technology & Communications 0.85% 0.24% 1.09%D
STRONG
Mid Cap Growth Fund II 1.00% 0.15% 1.15%E
Opportunity Fund II 1.00% 0.14% 1.14%E
WARBURG PINCUS
International Equity 1.00% 0.32% 1.32%F
Global Post-Venture Capital** 1.07% 0.33% 1.40%F
Small Company Growth 0.90% 0.24% 1.14%F
</TABLE>
* PREVIOUSLY CALLED LARGE CAP VALUE.
** PREVIOUSLY CALLED POST-VENTURE CAPITAL .
A A PORTION OF THE BROKERAGE COMMISSIONS THAT CERTAIN FI DELITY
FUNDS PAY WAS USED TO REDUCE FUND EXPENSES. IN ADDITION, CERTAIN
FIDELITY FUNDS, OR FMR ON BEHALF OF CERTAIN FUNDS, HAVE ENTERED
INTO ARRANGEMENTS WITH THEIR CUSTODIAN WHEREBY CREDITS REALIZED AS A
RESULT OF UNINVESTED CASH BALANCES WERE USED TO REDUCE A PORTION
OF FUND EXPENSES. WITHOUT THESE REDUCTIONS, THE TOTAL OPERATING
EXPENSES PRESENTED IN THE TABLE WOULD HAVE BEEN 0.57% FOR
EQUITY-INCOME PORTFO LIO, 0.66% FOR GROWTH PORTFOLIO, 0.91% FOR
OVERSEAS PORTFOLIO, 0.63% FOR ASSET MANAGER PORTFOLIO, 0.67% FOR
CONTRAFUND PORTFOLIO, 0.70% FOR ASSET MANAGER: GROWTH PORTFOLIO, 0.68%
FOR GROWTH OPPORTUNITIES PORTFOLIO, 0.55% FOR BALANCED PORTFOLIO,
0.59% FOR GROWTH AND INCOME POR TFOLIO, AND 3.34% FOR MID CAP
PORTFOLIO.
B 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 0.24%,
0. 10 % AND 0.34%, RESPECTIVELY.
C MORGAN STANLEY ASSET MANAGEMENT , WITH RESPECT TO THE
PORTFOLIOS, HAS VOLUNTARILY AGREED TO WAIVE RECEIPT OF ITS MANAGEMENT
FEES AND AGREED TO REIMBURSE CERTAIN EXPENSES OF THE PORTFOLIO. MORGAN
STANLEY ASSET MANAGEMENT MAY TERMINATE THIS VOLUNTARY WAIVER
AND REIMBURSEMENT AT ANY TIME AT ITS SOLE DISCRETION. WITHOUT WAIVERS
AND REIMBURSEMENTS, "MANAGEMENT FEES," "OTHER EXPENSES" AND "TOTAL
ANNUAL EXPENSES," RESPECTIVELY, WOULD BE AS FOLLOWS: EMERGING MARKETS
DEBT PORTFOLIO (0.80%, 0.98%, 1.78%); EMERGING MARKETS EQUITY
PORTFOLIO (1.25%, 1.37%, 2.62%); GLOBAL EQUITY PORTFOLIO (0.80%,
0.68%, 1.48%); INTERNATIONAL MAGNUM PORTFOLI O (0.80%, 0.87%,
1.67%).
D PILGRIM BAXTER & ASSOCIATES, LTD. (THE "ADVISER") HAS VOLUNTARILY
AGREED TO WAIVE OR LIMIT ITS ADVISORY FEES OR ASSUME OTHER EXPENSES IN
AN AMOUNT THAT OPERATES TO LIMIT TOTAL OPERATING EXPENSES OF THE
PORTFOLIOS TO NOT MORE THAN 1.20% OF THE AVERAGE DAILY NET ASSETS OF
THE GROWTH II, SMALL CAP VALUE, TECHNOLOGY & COMMUNICATIONS AND SELECT
20 PORTFOLIOS AND TO NOT MORE THAN 1.00% OF THE AVERAGE DAILY NET
ASSETS OF THE SELECT VALUE PORTFOLIO, THROUGH DECEMBER 31,
1999. TOTAL OPERATING EXPENSES INCLUDE, BUT ARE NOT LIMITED TO,
EXPENSES SUCH AS INVESTMENT ADVISORY FEES, TRANSFER AGENT FEES AND
LEGAL FEES. SUCH WAIVERS OF ADVISORY FEES AND POSSIBLE ASSUMPTIONS OF
OTHER EXPENSES BY THE ADVISER IS SUBJECT TO A POSSIBLE REIMBURSEMENT
BY THE PORTFOLIOS IN FUTURE YEARS IF SUCH REIMBURSEMENT CAN BE
ACHIEVED WITHIN FOREGOING ANNUAL EXPENSE LIMITS. SUCH FEE
WAIVER/EXPENSE REIMBURSEMENT ARRANGEMENTS MAY BE MODIFIED OR
TERMINATED AT ANY TIME AFTER DECEMBER 31, 1999. ABSENT SUCH FEE
WAIVERS/EXPENSE REIMBURSEMENTS THE ADVISORY FEES AND ESTIMATED TOTAL
OPERATING EXPENSES FOR THE SMALL CAP VALUE PORTFOLIO WOULD BE 1.00%
AND 1.29 %.
E STRONG CAPITAL MANAGEMENT, INC., THE INVESTMENT ADVISER, HAS
VOLUNTARILY AGREED TO CAP THE FUND'S TOTAL OPERATING EXPENSES AT
1.20%. THE ADVISER HAS NO CURRENT INTENTION TO, BUT MAY IN THE FUTURE,
DISCONTINUE OR MODIFY ANY WAIVER OF FEES OR ABSORPTION OF EXPENSES AT
ITS DISCRETION WITH APPROPRIATE NOTIFICATION TO ITS SHAREHOLDERS.
MANAGEMENT FEES, OTHER EXPENSES, AND TOTAL ANNUAL EXPENSES FOR
OPPORTUNITY II AND MID CAP GROWTH FUND II ARE CALCULATED ON AN
ANNUALIZED BASIS FROM THE BEGINNING OF THE FISCAL YEAR THROUGH THE
CURRENT QUARTER END. THE ADVISOR FOR MID CAP GROWTH FUND II IS
ABSORBING EXPENSES OF 0.02%. WITHOUT THESE ABSORPTIONS THE EXPENSE
RATIO WOULD HAVE BEEN 1.17%.
F MANAGEMENT FEES, OTHER EXPENSES AND TOTAL ANNUAL EXPENSES FOR THE
INTERNATIONAL EQUITY, GLOBAL POST-VENTURE CAPITAL AND SMALL
COMPANY GROWTH PORTFOLIOS ARE BASED ON ACTUAL EXPENSES FOR THE FISCAL
YEAR ENDED DECEMBER 31, 199 9 , NET ANY FEE WAIVERS OR EXPENSE
REIMBURSEMENTS. WITHOUT SUCH WAIVERS OR REIMBURSEMENTS, MANAGEMENT
FEES WOULD HAVE EQUALED 1.00%, 1.25% AND 0.90%; OTHER EXPENSES WOULD
HAVE EQUALLED 0.3 2 %, 0. 33 % AND 0.24%; AND TOTAL ANNUAL
EXPENSES WOULD HAVE EQUALLED 1.3 2 %, 1. 58 % AND 1.14% FOR
THE INTERNATIONAL EQUITY, GLOBAL POST-VENTURE CAPITAL, AND SMALL
COMPANY GROWTH PORTFOLIOS, RESPECTIVELY. FEE WAIVERS AND EXPENSE
REIMBURSEMENTS OR CREDITS MAY BE DISCONTINUED AT ANY TIME.
FACTS ABOUT EFILI, THE VARIABLE ACCOUNT AND THE FUNDS
EMPIRE FIDELITY INVESTMENTS LIFE
Empire Fidelity Investments Life 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.
Edward C. Johnson 3d, the Johnson family members, and various key
employees of FMR Corp. own the voting common stock of 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.
We own the assets in the Variable Account. The assets of the Variable
Account are kept separate from our general account assets and from any
other separate accounts we may have, as required by law. The assets of
the Variable Account may not be charged with liabilities from any
other business we conduct. 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, we may transfer the excess to its general account. EFILI
is obligated to provide all benefits under the Contracts.
There are currently twenty-nine Subaccounts in the Variable
Account. One of these Subaccounts, Strong Discovery Fund II Portfolio,
is no longer available as an investment option in the Contract and no
money may be allocated to this Subaccount. On or about May 26, 2000,
any assets remaining in Strong Discovery Fund II Portfolio will be
exchanged to VIP III Mid Cap Portfolio. Five Subaccounts invest
exclusively in shares of a specific portfolio of Fidelity Variable
Insurance Products Fund. Five Subaccounts invest exclusively in shares
of a specific portfolio of Fidelity Variable Insurance Products Fund
II. Four Subaccounts invest exclusively in shares of a specific
portfolio of Fidelity Variable Insurance Products Fund III. The other
14 available investment options are offered by four different mutual
fund investment advisers.
THE FUNDS
FIDELITY:
The Fidelity 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, 1 999. Ea ch 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 Total of
Return for that month is higher than the Benchmark Rate of Return, and
decreases for a given month if the annualized Total 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 $74 ,520. If the purchaser were
female, the Purchase Payment necessary would be $83 ,41 7. 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 graphs for the Other Funds are not available.
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 instruments.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Allocating the fund's assets among stocks, bonds,
and short-term and money market instruments.
(small solid bullet) Maintaining a neutral mix over time of 50% of
assets in stocks, 40% of assets in bonds, and 10% of assets in
short-term and money market instruments.
(small solid bullet) Adjusting allocation among asset classes
gradually within the following ranges: stock class (30% - 70%), bond
class (20% - 60%), and short-term/money market class (0% - 50%).
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Analyzing an issuer using fundamental and/or
quantitative factors and evaluating each security's current price
relative to estimated long-term value in selecting investments.
INVESTOR PROFILE. The fund may be appropriate for investors who want
to diversify among stocks, bonds, short-term instruments and other
types of securities. The fund's assets may also be invested in other
instruments that do not fall within these classes.
The graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E ASSET MANAGER
Apr-82 0.01
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
Jan-97 31.00 3.01 102.92% $753
Feb-97 28.00 0.86 100.78% $756
Mar-97 31.00 -3.80 96.12% $724
Apr-97 30.00 3.42 103.33% $745
May-97 31.00 4.80 104.71% $777
Jun-97 30.00 2.66 102.58% $794
Jul-97 31.00 5.78 105.69% $836
Aug-97 31.00 -2.73 97.19% $809
Sep-97 30.00 3.22 103.13% $831
Oct-97 31.00 1.00% -1.64 98.28% $813
Nov-97 30.00 1.00% 2.31 102.23% $828
Dec-97 31.00 1.00% 1.52 101.43% $836
Jan-98 31.00 1.00% 0.33 100.24% $835
Feb-98 28.00 1.00% 4.50 104.42% $868
Mar-98 31.00 1.00% 2.90 102.81% $889
Apr-98 30.00 1.00% -0.12 99.80% $884
May-98 31.00 1.00% -0.53 99.39% $875
Jun-98 30.00 1.00% 1.95 101.87% $888
Jul-98 31.00 1.00% -0.64 99.28% $877
Aug-98 31.00 1.00% -9.10 90.82% $794
Sep-98 30.00 1.00% 3.34 103.25% $816
Oct-98 31.00 1.00% 4.35 104.26% $847
Nov-98 30.00 1.00% 3.81 103.72% $875
Dec-98 31.00 1.00% 4.13 104.04% $907
Jan-99 31.00 1.00% 2.37 102.28% $924
Feb-99 28.00 1.00% -2.29 97.63% $899
Mar-99 31.00 1.00% 0.89 100.80% $902
Apr-99 30.00 1.00% 2.24 102.16% $918
May-99 31.00 1.00% -1.44 98.48% $900
Jun-99 30.00 1.00% 3.51 103.42% $927
Jul-99 31.00 1.00% -1.70 98.22% $907
Aug-99 31.00 1.00% -0.17 99.74% $901
Sep-99 30.00 1.00% -1.15 98.77% $886
Oct-99 31.00 1.00% 3.03 102.94% $909
Nov-99 30.00 1.00% 1.36 101.28% $917
Dec-99 31.00 1.00% 4.19 104.10% $950
Listed in Order Max 950
to match MFPR Min 468
</TABLE>
MONEY MARKET PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks as
high a level of current income as is consistent with the preservation
of capital and liquidity.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing in U.S. dollar-denominated money market
securities, including U.S. Government securities and repurchase
agreements, and entering into reverse repurchase agreements.
(small solid bullet) Investing more than 25% of total assets in the
financial services industry.
(small solid bullet) Investing in compliance with industry-standard
requirements for money market funds for the quality, maturity, and
diversification of investments.
INVESTOR PROFILE. 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. An investment in the fund is not a deposit
of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the
fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund.
The graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E MONEY MARKET
Apr-82 0.01 $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
Jan-97 31.00 0.45 100.36% $565
Feb-97 28.00 0.40 100.32% $564
Mar-97 31.00 0.44 100.35% $564
Apr-97 30.00 0.44 100.36% $564
May-97 31.00 0.44 100.35% $563
Jun-97 30.00 0.46 100.38% $563
Jul-97 31.00 0.46 100.37% $563
Aug-97 31.00 0.43 100.34% $563
Sep-97 30.00 0.47 100.39% $562
Oct-97 31.00 1.00% 0.46 100.37% $562
Nov-97 30.00 1.00% 0.41 100.33% $562
Dec-97 31.00 1.00% 0.50 100.41% $562
Jan-98 31.00 1.00% 0.45 100.36% $562
Feb-98 28.00 1.00% 0.42 100.34% $561
Mar-98 31.00 1.00% 0.47 100.38% $561
Apr-98 30.00 1.00% 0.44 100.36% $561
May-98 31.00 1.00% 0.43 100.34% $561
Jun-98 30.00 1.00% 0.47 100.39% $560
Jul-98 31.00 1.00% 0.46 100.37% $560
Aug-98 31.00 1.00% 0.46 100.37% $560
Sep-98 30.00 1.00% 0.44 100.36% $560
Oct-98 31.00 1.00% 0.43 100.34% $559
Nov-98 30.00 1.00% 0.44 100.36% $559
Dec-98 31.00 1.00% 0.43 100.34% $559
Jan-99 31.00 1.00% 0.40 100.31% $558
Feb-99 28.00 1.00% 0.38 100.30% $558
Mar-99 31.00 1.00% 0.44 100.35% $557
Apr-99 30.00 1.00% 0.39 100.31% $557
May-99 31.00 1.00% 0.36 100.27% $556
Jun-99 30.00 1.00% 0.43 100.35% $556
Jul-99 31.00 1.00% 0.40 100.31% $555
Aug-99 31.00 1.00% 0.44 100.35% $555
Sep-99 30.00 1.00% 0.43 100.35% $555
Oct-99 31.00 1.00% 0.42 100.33% $554
Nov-99 30.00 1.00% 0.47 100.39% $554
Dec-99 31.00 1.00% 0.48 100.39% $554
Listed in Order Max 609
to match MFPR Min 500
</TABLE>
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.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing in U.S. dollar-denominated
investment-grade bonds.
(small solid bullet) Managing the fund to have similar overall
interest rate risk to the Lehman Brothers Aggregate Bond Index.
(small solid bullet) Allocating assets across different market sectors
and maturities.
(small solid bullet) Analyzing a security's structural features,
current pricing and trading opportunities, and the credit quality of
its issuer in selecting investments.
INVESTOR PROFILE. The fund may be appropriate for investors who want
the potential for high current income from a portfolio of
investment-grade debt securities. The fund's level of risk and
potential reward depend on the quality and maturity of its
investments, and has overall interest rate risk similar to the index.
The graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E INVESTMENT GRADE BOND
Apr-82 0.01
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
Jan-97 31.00 0.25 100.16% $585
Feb-97 28.00 0.13 100.05% $583
Mar-97 31.00 -1.04 98.88% $574
Apr-97 30.00 1.49 101.41% $580
May-97 31.00 0.78 100.69% $582
Jun-97 30.00 1.20 101.12% $586
Jul-97 31.00 2.70 102.61% $599
Aug-97 31.00 -0.90 99.02% $590
Sep-97 30.00 1.49 101.41% $596
Oct-97 31.00 1.00% 1.31 101.22% $601
Nov-97 30.00 1.00% 0.24 100.16% $600
Dec-97 31.00 1.00% 1.12 101.03% $603
Jan-98 31.00 1.00% 1.27 101.18% $608
Feb-98 28.00 1.00% -0.07 99.85% $605
Mar-98 31.00 1.00% 0.41 100.32% $604
Apr-98 30.00 1.00% 0.50 100.42% $604
May-98 31.00 1.00% 0.90 100.81% $607
Jun-98 30.00 1.00% 0.81 100.73% $609
Jul-98 31.00 1.00% 0.24 100.15% $607
Aug-98 31.00 1.00% 1.21 101.12% $611
Sep-98 30.00 1.00% 2.47 102.39% $623
Oct-98 31.00 1.00% -0.54 99.38% $617
Nov-98 30.00 1.00% 0.86 100.78% $619
Dec-98 31.00 1.00% 0.47 100.38% $619
Jan-99 31.00 1.00% 0.85 100.76% $621
Feb-99 28.00 1.00% -1.72 98.20% $608
Mar-99 31.00 1.00% 0.66 100.57% $609
Apr-99 30.00 1.00% 0.33 100.25% $608
May-99 31.00 1.00% -1.30 98.62% $597
Jun-99 30.00 1.00% -0.49 99.43% $591
Jul-99 31.00 1.00% -0.41 99.51% $586
Aug-99 31.00 1.00% -0.17 99.74% $582
Sep-99 30.00 1.00% 1.33 101.25% $587
Oct-99 31.00 1.00% 0.16 100.07% $585
Nov-99 30.00 1.00% 0.16 100.08% $583
Dec-99 31.00 1.00% -0.41 99.51% $578
Listed in Order Max 623
to match MFPR Min 500
</TABLE>
HIGH INCOME PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks a high
level of current income. Growth of capital may also be considered.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing at least 65% of total assets in
income-producing debt securities, preferred stocks and convertible
securities, with an emphasis on lower-quality debt securities.
(small solid bullet) Potentially investing in non-income producing
securities, including defaulted securities and common stocks.
(small solid bullet) Investing in companies in troubled or uncertain
financial condition.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E HIGH INCOME
Apr-82 0.01
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
Jan-97 31.00 1.36 101.27% $933
Feb-97 28.00 1.81 101.73% $945
Mar-97 31.00 -3.11 96.81% $911
Apr-97 30.00 1.56 101.48% $921
May-97 31.00 4.18 104.09% $955
Jun-97 30.00 1.80 101.72% $967
Jul-97 31.00 3.62 103.53% $997
Aug-97 31.00 0.85 100.76% $1,001
Sep-97 30.00 3.54 103.45% $1,031
Oct-97 31.00 1.00% -0.89 99.03% $1,017
Nov-97 30.00 1.00% 0.75 100.67% $1,020
Dec-97 31.00 1.00% 1.13 101.04% $1,026
Jan-98 31.00 1.00% 2.28 102.19% $1,044
Feb-98 28.00 1.00% 0.76 100.68% $1,047
Mar-98 31.00 1.00% 2.09 102.00% $1,064
Apr-98 30.00 1.00% 0.39 100.31% $1,063
May-98 31.00 1.00% -0.71 99.21% $1,050
Jun-98 30.00 1.00% -0.08 99.84% $1,044
Jul-98 31.00 1.00% 0.55 100.46% $1,045
Aug-98 31.00 1.00% -12.36 87.57% $911
Sep-98 30.00 1.00% -0.99 98.93% $898
Oct-98 31.00 1.00% -2.72 97.20% $869
Nov-98 30.00 1.00% 8.21 108.12% $936
Dec-98 31.00 1.00% -0.60 99.32% $925
Jan-99 31.00 1.00% 2.95 102.86% $948
Feb-99 28.00 1.00% -0.42 99.50% $940
Mar-99 31.00 1.00% 2.52 102.43% $959
Apr-99 30.00 1.00% 5.00 104.91% $1,002
May-99 31.00 1.00% -2.69 97.23% $970
Jun-99 30.00 1.00% 0.53 100.45% $970
Jul-99 31.00 1.00% -0.35 99.56% $962
Aug-99 31.00 1.00% -1.69 98.23% $941
Sep-99 30.00 1.00% -1.54 98.38% $922
Oct-99 31.00 1.00% -0.46 99.46% $913
Nov-99 30.00 1.00% 2.12 102.04% $928
Dec-99 31.00 1.00% 2.26 102.17% $944
Listed in Order Max 1,064
to match MFPR Min 472
</TABLE>
EQUITY-INCOME PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks
reasonable income. The fund will consider the potential for capital
appreciation. The fund seeks a yield for its shareholders that exceeds
the yield on the securities comprising the S&P 500.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing at least 65% of total assets in
income-producing equity securities, which tends to lead to investments
in large cap "value" stocks.
(small solid bullet) Potentially investing in other types of equity
securities and debt securities, including lower-quality debt
securities.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns. The fund is designed for
those who want some income from equity and bond securities, 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E EQUITY INCOME
Apr-82 0.01
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
Jan-97 31.00 3.90 103.81% $1,020
Feb-97 28.00 1.11 101.03% $1,027
Mar-97 31.00 -3.72 96.20% $984
Apr-97 30.00 3.55 103.46% $1,014
May-97 31.00 6.20 106.11% $1,072
Jun-97 30.00 4.65 104.56% $1,116
Jul-97 31.00 7.30 107.21% $1,191
Aug-97 31.00 -4.69 95.23% $1,130
Sep-97 30.00 5.50 105.41% $1,186
Oct-97 31.00 1.00% -3.66 96.26% $1,137
Nov-97 30.00 1.00% 3.66 103.57% $1,173
Dec-97 31.00 1.00% 2.15 102.06% $1,192
Jan-98 31.00 1.00% -0.25 99.66% $1,183
Feb-98 28.00 1.00% 6.45 106.37% $1,254
Mar-98 31.00 1.00% 4.63 104.54% $1,306
Apr-98 30.00 1.00% 0.00 99.92% $1,299
May-98 31.00 1.00% -1.62 98.30% $1,272
Jun-98 30.00 1.00% 1.12 101.04% $1,280
Jul-98 31.00 1.00% -2.46 97.46% $1,242
Aug-98 31.00 1.00% -15.27 84.66% $1,047
Sep-98 30.00 1.00% 5.87 105.78% $1,103
Oct-98 31.00 1.00% 7.40 107.31% $1,179
Nov-98 30.00 1.00% 4.23 104.14% $1,223
Dec-98 31.00 1.00% 3.12 103.03% $1,255
Jan-99 31.00 1.00% -0.31 99.60% $1,245
Feb-99 28.00 1.00% -1.22 98.70% $1,224
Mar-99 31.00 1.00% 3.65 103.56% $1,262
Apr-99 30.00 1.00% 8.87 108.78% $1,368
May-99 31.00 1.00% -2.72 97.20% $1,324
Jun-99 30.00 1.00% 4.25 104.16% $1,374
Jul-99 31.00 1.00% -3.01 96.91% $1,326
Aug-99 31.00 1.00% -2.72 97.20% $1,283
Sep-99 30.00 1.00% -3.27 96.65% $1,235
Oct-99 31.00 1.00% 3.66 103.57% $1,274
Nov-99 30.00 1.00% -1.32 98.60% $1,251
Dec-99 31.00 1.00% 1.02 100.93% $1,258
Listed in Order Max 1,374
to match MFPR Min 431
</TABLE>
INDEX 500 PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND II seeks
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, as represented by the S&P 500, while
keeping transaction costs and other expenses low.
PRINCIPAL INVESTMENT STRATEGIES. Bankers Trust Company's ("BT," a New
York banking corporation serving as sub-adviser and custodian for VIP
II Index 500) principal investment strategies include:
(small solid bullet) Investing at least 80% of assets in common stocks
included in the S&P 500.
(small solid bullet) Lending securities to earn income for the fund.
(small solid bullet) 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 funds. The fund is managed by FMR, which handles its
business affairs. BT, Index 500 Portfolio's sub-adviser, chooses the
fund's investments. FMR supervises the sub-adviser and, in conjunction
with the Board of Trustees, reviews the sub-adviser's performance of
its duties. BT also acts as Index 500 Portfolio's custodian.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns in relation to the S&P
500.
The graph below is based on a 5% Benchmark Rate of Return and initial
annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E INDEX 500
Apr-82 0.01
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 1.16 $500
Oct-92 31.00 0.22 100.13% $499
Nov-92 30.00 3.41 103.32% $513
Dec-92 31.00 1.26 101.17% $517
Jan-93 31.00 0.64 100.55% $518
Feb-93 28.00 1.32 101.24% $522
Mar-93 31.00 2.20 102.11% $531
Apr-93 30.00 -2.55 97.37% $515
May-93 31.00 2.60 102.51% $526
Jun-93 30.00 0.26 100.18% $525
Jul-93 31.00 -0.46 99.46% $520
Aug-93 31.00 3.79 103.70% $537
Sep-93 30.00 -0.81 99.11% $530
Oct-93 31.00 2.04 101.95% $538
Nov-93 30.00 -0.97 98.95% $530
Dec-93 31.00 1.20 101.11% $534
Jan-94 31.00 3.37 103.28% $549
Feb-94 28.00 -2.71 97.22% $532
Mar-94 31.00 -4.34 95.58% $506
Apr-94 30.00 1.20 101.12% $510
May-94 31.00 1.55 101.46% $515
Jun-94 30.00 -2.44 97.48% $500
Jul-94 31.00 3.30 103.21% $514
Aug-94 31.00 3.99 103.90% $532
Sep-94 30.00 -2.43 97.49% $516
Oct-94 31.00 2.22 102.13% $525
Nov-94 30.00 -3.63 96.29% $504
Dec-94 31.00 1.46 101.37% $508
Jan-95 31.00 2.65 102.56% $519
Feb-95 28.00 3.83 103.75% $537
Mar-95 31.00 2.92 102.83% $550
Apr-95 30.00 2.94 102.86% $563
May-95 31.00 3.93 103.84% $582
Jun-95 30.00 2.27 102.19% $593
Jul-95 31.00 3.34 103.25% $609
Aug-95 31.00 0.25 100.16% $608
Sep-95 30.00 4.18 104.09% $630
Oct-95 31.00 -0.34 99.57% $625
Nov-95 30.00 4.35 104.26% $649
Dec-95 31.00 1.83 101.74% $658
Jan-96 31.00 3.42 103.33% $677
Feb-96 29.00 0.93 100.85% $680
Mar-96 31.00 1.03 100.94% $683
Apr-96 30.00 1.40 101.32% $690
May-96 31.00 2.55 102.46% $704
Jun-96 30.00 0.43 100.35% $703
Jul-96 31.00 -4.43 95.49% $669
Aug-96 31.00 2.06 101.97% $679
Sep-96 30.00 5.59 105.50% $714
Oct-96 31.00 2.76 102.67% $730
Nov-96 30.00 7.50 107.41% $781
Dec-96 31.00 -1.97 97.95% $761
Jan-97 31.00 6.20 106.11% $805
Feb-97 28.00 0.75 100.67% $807
Mar-97 31.00 -4.16 95.76% $770
Apr-97 30.00 5.94 105.85% $811
May-97 31.00 6.08 105.99% $856
Jun-97 30.00 4.39 104.30% $890
Jul-97 31.00 7.95 107.86% $956
Aug-97 31.00 -5.60 94.32% $898
Sep-97 30.00 5.41 105.32% $942
Oct-97 31.00 1.00% -3.31 96.61% $906
Nov-97 30.00 1.00% 4.52 104.43% $942
Dec-97 31.00 1.00% 1.68 101.59% $953
Jan-98 31.00 1.00% 1.08 100.99% $959
Feb-98 28.00 1.00% 7.10 107.02% $1,022
Mar-98 31.00 1.00% 5.06 104.97% $1,069
Apr-98 30.00 1.00% 0.99 100.91% $1,074
May-98 31.00 1.00% -1.79 98.13% $1,049
Jun-98 30.00 1.00% 4.07 103.98% $1,087
Jul-98 31.00 1.00% -1.09 98.83% $1,070
Aug-98 31.00 1.00% -14.47 85.46% $910
Sep-98 30.00 1.00% 6.43 106.34% $964
Oct-98 31.00 1.00% 8.12 108.03% $1,037
Nov-98 30.00 1.00% 6.02 105.93% $1,094
Dec-98 31.00 1.00% 5.88 105.79% $1,153
Jan-99 31.00 1.00% 4.02 103.93% $1,193
Feb-99 28.00 1.00% -3.15 96.78% $1,151
Mar-99 31.00 1.00% 4.02 103.93% $1,191
Apr-99 30.00 1.00% 3.81 103.72% $1,230
May-99 31.00 1.00% -2.40 97.52% $1,195
Jun-99 30.00 1.00% 5.53 105.44% $1,255
Jul-99 31.00 1.00% -3.12 96.80% $1,210
Aug-99 31.00 1.00% -0.53 99.39% $1,197
Sep-99 30.00 1.00% -2.77 97.15% $1,158
Oct-99 31.00 1.00% 6.29 106.20% $1,225
Nov-99 30.00 1.00% 2.00 101.92% $1,244
Dec-99 31.00 1.00% 5.88 105.79% $1,310
Listed in Order Max 1,310
to match MFPR Min 499
</TABLE>
GROWTH PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND se eks to
achieve capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Investing in companies that it believes have
above-average growth potential, measured by factors such as earnings
or revenue (stocks of these companies are often called "growth
stocks").
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns. The fund is designed for
those who want to pursue growth potential, and who understand that
this strategy often leads to more volatile investments than the
market as a whole . 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E GROWTH
Apr-82 0.01
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 2.20 102.12% $509
Dec-86 31.00 -1.86 98.06% $497
Jan-87 31.00 10.67 110.58% $547
Feb-87 28.00 4.95 104.87% $571
Mar-87 31.00 1.63 101.54% $578
Apr-87 30.00 0.00 99.92% $575
May-87 31.00 0.68 100.59% $576
Jun-87 30.00 2.94 102.86% $590
Jul-87 31.00 4.00 103.91% $611
Aug-87 31.00 2.98 102.89% $626
Sep-87 30.00 -1.14 98.78% $616
Oct-87 31.00 -21.97 77.96% $478
Nov-87 30.00 -7.02 92.90% $442
Dec-87 31.00 10.31 110.22% $485
Jan-88 31.00 2.17 102.08% $493
Feb-88 29.00 8.11 108.02% $531
Mar-88 31.00 -0.89 99.03% $524
Apr-88 30.00 1.26 101.18% $528
May-88 31.00 -0.89 99.03% $520
Jun-88 30.00 5.03 104.94% $544
Jul-88 31.00 -0.51 99.41% $538
Aug-88 31.00 -2.41 97.51% $523
Sep-88 30.00 2.82 102.74% $535
Oct-88 31.00 0.26 100.17% $534
Nov-88 30.00 -0.94 98.98% $526
Dec-88 31.00 1.03 100.94% $529
Jan-89 31.00 7.17 107.08% $564
Feb-89 28.00 -2.07 97.85% $550
Mar-89 31.00 3.02 102.93% $564
Apr-89 30.00 5.29 105.20% $591
May-89 31.00 3.58 103.49% $609
Jun-89 30.00 -1.32 98.60% $598
Jul-89 31.00 8.94 108.85% $648
Aug-89 31.00 1.71 101.62% $656
Sep-89 30.00 0.87 100.79% $658
Oct-89 31.00 -2.80 97.12% $637
Nov-89 30.00 1.64 101.56% $644
Dec-89 31.00 2.36 102.27% $656
Jan-90 31.00 -5.80 94.12% $615
Feb-90 28.00 0.96 100.88% $618
Mar-90 31.00 1.22 101.13% $622
Apr-90 30.00 -2.91 97.01% $601
May-90 31.00 8.85 108.76% $651
Jun-90 30.00 2.08 102.00% $661
Jul-90 31.00 -1.58 98.34% $648
Aug-90 31.00 -10.30 89.62% $578
Sep-90 30.00 -10.29 89.64% $516
Oct-90 31.00 -3.57 96.35% $495
Nov-90 30.00 8.10 108.01% $533
Dec-90 31.00 2.95 102.86% $546
Jan-91 31.00 6.66 106.57% $579
Feb-91 28.00 7.46 107.38% $620
Mar-91 31.00 3.02 102.93% $635
Apr-91 30.00 -0.93 98.99% $626
May-91 31.00 5.91 105.82% $660
Jun-91 30.00 -7.42 92.50% $608
Jul-91 31.00 9.53 109.44% $663
Aug-91 31.00 4.44 104.35% $689
Sep-91 30.00 0.78 100.70% $691
Oct-91 31.00 3.09 103.00% $708
Nov-91 30.00 -5.71 94.21% $665
Dec-91 31.00 13.21 113.11% $749
Jan-92 31.00 6.10 106.01% $791
Feb-92 29.00 2.09 102.01% $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 31.00 3.86 103.77% $700
Aug-92 31.00 -2.75 97.17% $677
Sep-92 30.00 1.76 101.68% $686
Oct-92 31.00 3.87 103.78% $709
Nov-92 30.00 6.68 106.59% $752
Dec-92 31.00 3.08 102.99% $772
Jan-93 31.00 1.97 101.88% $783
Feb-93 28.00 -2.06 97.86% $763
Mar-93 31.00 3.99 103.90% $790
Apr-93 30.00 -1.05 98.87% $778
May-93 31.00 7.45 107.36% $831
Jun-93 30.00 1.03 100.95% $836
Jul-93 31.00 -0.28 99.63% $830
Aug-93 31.00 5.02 104.93% $867
Sep-93 30.00 1.86 101.78% $879
Oct-93 31.00 0.96 100.87% $883
Nov-93 30.00 -4.05 95.87% $843
Dec-93 31.00 3.54 103.45% $868
Jan-94 31.00 2.51 102.42% $886
Feb-94 28.00 -1.03 98.89% $873
Mar-94 31.00 -4.54 95.38% $829
Apr-94 30.00 0.62 100.54% $830
May-94 31.00 -2.32 97.60% $807
Jun-94 30.00 -5.08 94.84% $762
Jul-94 31.00 3.47 103.38% $785
Aug-94 31.00 5.67 105.58% $825
Sep-94 30.00 -1.21 98.71% $811
Oct-94 31.00 4.06 103.97% $840
Nov-94 30.00 -3.99 95.93% $802
Dec-94 31.00 2.55 102.46% $819
Jan-95 31.00 -1.89 98.03% $799
Feb-95 28.00 4.14 104.06% $828
Mar-95 31.00 3.63 103.54% $854
Apr-95 30.00 3.37 103.28% $879
May-95 31.00 3.90 103.81% $909
Jun-95 30.00 8.85 108.76% $984
Jul-95 31.00 9.89 109.80% $1,076
Aug-95 31.00 1.23 101.14% $1,084
Sep-95 30.00 2.59 102.51% $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 31.00 1.58 101.49% $1,056
Feb-96 29.00 3.35 103.27% $1,086
Mar-96 31.00 0.39 100.30% $1,085
Apr-96 30.00 3.91 103.82% $1,122
May-96 31.00 3.13 103.04% $1,151
Jun-96 30.00 -1.96 97.96% $1,123
Jul-96 31.00 -7.65 92.27% $1,032
Aug-96 31.00 2.99 102.90% $1,058
Sep-96 30.00 6.72 106.63% $1,124
Oct-96 31.00 -0.23 99.68% $1,115
Nov-96 30.00 5.55 105.46% $1,172
Dec-96 31.00 -3.08 96.84% $1,130
Jan-97 31.00 5.75 105.66% $1,189
Feb-97 28.00 -2.27 97.65% $1,157
Mar-97 31.00 -5.60 94.32% $1,086
Apr-97 30.00 4.81 104.72% $1,133
May-97 31.00 6.93 106.84% $1,206
Jun-97 30.00 4.11 104.02% $1,249
Jul-97 31.00 7.51 107.42% $1,336
Aug-97 31.00 -3.86 96.06% $1,278
Sep-97 30.00 5.80 105.71% $1,346
Oct-97 31.00 1.00% -3.77 96.15% $1,289
Nov-97 30.00 1.00% 2.86 102.78% $1,319
Dec-97 31.00 1.00% 0.22 100.13% $1,315
Jan-98 31.00 1.00% 1.35 101.26% $1,327
Feb-98 28.00 1.00% 7.51 107.43% $1,420
Mar-98 31.00 1.00% 3.51 103.42% $1,462
Apr-98 30.00 1.00% 1.96 101.88% $1,484
May-98 31.00 1.00% -2.57 97.35% $1,438
Jun-98 30.00 1.00% 6.33 106.24% $1,522
Jul-98 31.00 1.00% 2.04 101.95% $1,545
Aug-98 31.00 1.00% -16.32 83.61% $1,287
Sep-98 30.00 1.00% 10.33 110.24% $1,413
Oct-98 31.00 1.00% 7.06 106.97% $1,505
Nov-98 30.00 1.00% 6.96 106.87% $1,602
Dec-98 31.00 1.00% 8.54 108.45% $1,730
Jan-99 31.00 1.00% 8.09 108.00% $1,861
Feb-99 28.00 1.00% -4.91 95.02% $1,761
Mar-99 31.00 1.00% 5.57 105.48% $1,850
Apr-99 30.00 1.00% 0.35 100.27% $1,848
May-99 31.00 1.00% -1.36 98.56% $1,814
Jun-99 30.00 1.00% 6.52 106.43% $1,923
Jul-99 31.00 1.00% -1.36 98.56% $1,887
Aug-99 31.00 1.00% 0.55 100.46% $1,888
Sep-99 30.00 1.00% -1.96 97.96% $1,842
Oct-99 31.00 1.00% 5.87 105.78% $1,940
Nov-99 30.00 1.00% 5.97 105.88% $2,046
Dec-99 31.00 1.00% 10.10 110.01% $2,242
Listed in Order Max 2,242
to match MFPR Min 442
</TABLE>
OVERSEAS PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND seeks long-term
growth of capital.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition, industry position, and market and economic
conditions to select investments.
INVESTOR PROFILE AND RISK:
(small solid bullet) 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.
(small solid bullet) 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E OVERSEAS
Apr-82 0.01
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 28.00 0.10 100.02% $498
Mar-87 31.00 4.50 104.41% $518
Apr-87 30.00 7.27 107.18% $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 31.00 8.85 108.75% $547
Sep-87 30.00 -2.21 97.71% $532
Oct-87 31.00 -20.87 79.07% $419
Nov-87 30.00 0.91 100.83% $421
Dec-87 31.00 7.04 106.95% $448
Jan-88 31.00 -3.42 96.50% $431
Feb-88 29.00 2.66 102.58% $440
Mar-88 31.00 4.53 104.44% $458
Apr-88 30.00 1.65 101.57% $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 30.00 4.29 104.20% $435
Oct-88 31.00 4.43 104.34% $452
Nov-88 30.00 1.82 101.73% $458
Dec-88 31.00 0.20 100.11% $457
Jan-89 31.00 2.97 102.88% $468
Feb-89 28.00 1.73 101.65% $474
Mar-89 31.00 -0.09 99.82% $471
Apr-89 30.00 2.95 102.87% $483
May-89 31.00 -3.70 96.22% $463
Jun-89 30.00 -0.38 99.53% $459
Jul-89 31.00 9.35 109.26% $499
Aug-89 31.00 -0.71 99.21% $493
Sep-89 30.00 6.22 106.13% $521
Oct-89 31.00 -5.43 94.48% $490
Nov-89 30.00 5.39 105.31% $514
Dec-89 31.00 6.29 106.20% $544
Jan-90 31.00 -1.34 98.57% $534
Feb-90 28.00 -2.33 97.59% $519
Mar-90 31.00 3.78 103.69% $536
Apr-90 30.00 0.55 100.47% $537
May-90 31.00 6.54 106.44% $569
Jun-90 30.00 2.22 102.13% $579
Jul-90 31.00 5.06 104.97% $605
Aug-90 31.00 -10.19 89.74% $541
Sep-90 30.00 -9.50 90.42% $487
Oct-90 31.00 9.31 109.22% $530
Nov-90 30.00 -3.10 96.82% $511
Dec-90 31.00 -0.72 99.20% $504
Jan-91 31.00 0.97 100.88% $507
Feb-91 28.00 3.37 103.29% $522
Mar-91 31.00 -2.92 96.99% $504
Apr-91 30.00 2.20 102.11% $512
May-91 31.00 0.24 100.15% $511
Jun-91 30.00 -5.48 94.44% $481
Jul-91 31.00 4.96 104.87% $502
Aug-91 31.00 0.32 100.23% $501
Sep-91 30.00 4.07 103.99% $519
Oct-91 31.00 0.69 100.60% $520
Nov-91 30.00 -3.58 96.34% $499
Dec-91 31.00 3.48 103.39% $514
Jan-92 31.00 1.22 101.14% $517
Feb-92 29.00 -2.08 97.84% $504
Mar-92 31.00 -2.03 97.89% $492
Apr-92 30.00 6.22 106.13% $520
May-92 31.00 4.35 104.27% $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 31.00 2.49 102.40% $433
Jan-93 31.00 2.86 102.77% $443
Feb-93 28.00 1.96 101.88% $450
Mar-93 31.00 6.94 106.85% $478
Apr-93 30.00 6.65 106.56% $508
May-93 31.00 2.15 102.06% $516
Jun-93 30.00 -2.47 97.45% $501
Jul-93 31.00 3.95 103.86% $518
Aug-93 31.00 5.44 105.35% $543
Sep-93 30.00 -0.48 99.44% $538
Oct-93 31.00 3.62 103.53% $555
Nov-93 30.00 -4.22 95.70% $529
Dec-93 31.00 6.61 106.52% $561
Jan-94 31.00 6.52 106.43% $595
Feb-94 28.00 -1.76 98.16% $582
Mar-94 31.00 -2.48 97.44% $564
Apr-94 30.00 3.31 103.22% $580
May-94 31.00 -1.23 98.69% $570
Jun-94 30.00 -1.06 98.86% $562
Jul-94 31.00 2.65 102.56% $574
Aug-94 31.00 1.17 101.08% $577
Sep-94 30.00 -2.61 97.31% $560
Oct-94 31.00 2.06 101.97% $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 28.00 0.26 100.18% $512
Mar-95 31.00 3.08 102.99% $526
Apr-95 30.00 2.86 102.78% $538
May-95 31.00 1.39 101.30% $543
Jun-95 30.00 0.81 100.73% $544
Jul-95 31.00 4.44 104.35% $566
Aug-95 31.00 -2.78 97.14% $547
Sep-95 30.00 1.46 101.38% $553
Oct-95 31.00 -1.98 97.94% $539
Nov-95 30.00 1.16 101.08% $543
Dec-95 31.00 2.96 102.87% $556
Jan-96 31.00 1.88 101.79% $564
Feb-96 29.00 0.22 100.14% $562
Mar-96 31.00 1.53 101.44% $568
Apr-96 30.00 2.78 102.70% $581
May-96 31.00 0.06 99.97% $578
Jun-96 30.00 0.73 100.65% $580
Jul-96 31.00 -2.96 96.96% $560
Aug-96 31.00 0.75 100.66% $561
Sep-96 30.00 2.92 102.84% $575
Oct-96 31.00 -1.00 98.92% $566
Nov-96 30.00 5.22 105.13% $593
Dec-96 31.00 0.53 100.44% $593
Jan-97 31.00 0.00 99.91% $590
Feb-97 28.00 2.32 102.24% $601
Mar-97 31.00 0.91 100.82% $603
Apr-97 30.00 0.84 100.76% $606
May-97 31.00 6.25 106.16% $640
Jun-97 30.00 5.25 105.16% $671
Jul-97 31.00 3.39 103.30% $690
Aug-97 31.00 -7.53 92.39% $635
Sep-97 30.00 7.36 107.27% $678
Oct-97 31.00 1.00% -7.00 92.92% $628
Nov-97 30.00 1.00% -0.47 99.45% $622
Dec-97 31.00 1.00% 0.84 100.75% $624
Jan-98 31.00 1.00% 3.28 103.19% $641
Feb-98 28.00 1.00% 5.63 105.55% $674
Mar-98 31.00 1.00% 4.54 104.45% $701
Apr-98 30.00 1.00% 2.81 102.73% $717
May-98 31.00 1.00% -0.14 99.77% $713
Jun-98 30.00 1.00% -0.96 98.96% $702
Jul-98 31.00 1.00% 0.78 100.69% $704
Aug-98 31.00 1.00% -18.19 81.74% $573
Sep-98 30.00 1.00% -0.12 99.80% $570
Oct-98 31.00 1.00% 9.13 109.04% $619
Nov-98 30.00 1.00% 5.88 105.79% $652
Dec-98 31.00 1.00% 2.19 102.10% $663
Jan-99 31.00 1.00% 1.45 101.36% $669
Feb-99 28.00 1.00% -2.65 97.27% $649
Mar-99 31.00 1.00% 4.05 103.96% $672
Apr-99 30.00 1.00% 4.45 104.36% $698
May-99 31.00 1.00% -4.60 95.32% $663
Jun-99 30.00 1.00% 5.58 105.49% $696
Jul-99 31.00 1.00% 2.84 102.75% $712
Aug-99 31.00 1.00% 1.45 101.36% $719
Sep-99 30.00 1.00% 1.34 101.26% $725
Oct-99 31.00 1.00% 4.09 104.00% $751
Nov-99 30.00 1.00% 7.34 107.25% $802
Dec-99 31.00 1.00% 11.68 111.58% $892
Listed in Order Max 892
to match MFPR Min 419
</TABLE>
ASSET MANAGER: GROWTH PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND II
seeks to maximize total return over the long term by allocating its
assets among stocks, bonds, short-term instruments, and other
investments.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Allocating the fund's assets among stocks, bonds,
and short-term and money market instruments.
(small solid bullet) Maintaining a neutral mix over time of 70% of
assets in stocks, 25% of assets in bonds, and 5% of assets in
short-term and money market instruments.
(small solid bullet) Adjusting allocation among asset classes
gradually within the following ranges: stock class (50% - 100%), bond
class (0% - 50%), and short-term/money market class (0% - 50%).
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Analyzing an issuer using fundamental and/or
quantitative factors and evaluating each security's current price
relative to estimated long-term value in selecting investments.
INVESTOR PROFILE. 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, while spreading
its assets among all three asset classes, uses a more aggressive
approach by focusing on stocks for a higher potential return. The
value of each fund's investments and the income they generate will
vary.
The graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E ASSET MANAGER:GROWTH
Apr-82 0.01
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
Jan-97 31.00 4.27 104.18% $684
Feb-97 28.00 0.95 100.87% $687
Mar-97 31.00 -4.72 95.20% $651
Apr-97 30.00 4.19 104.10% $675
May-97 31.00 6.07 105.98% $713
Jun-97 30.00 2.97 102.88% $730
Jul-97 31.00 6.76 106.67% $776
Aug-97 31.00 -3.14 96.78% $748
Sep-97 30.00 3.69 103.60% $772
Oct-97 31.00 1.00% -2.37 97.55% $750
Nov-97 30.00 1.00% 2.88 102.80% $767
Dec-97 31.00 1.00% 1.74 101.65% $777
Jan-98 31.00 1.00% 0.00 99.91% $773
Feb-98 28.00 1.00% 6.11 106.03% $817
Mar-98 31.00 1.00% 3.71 103.62% $843
Apr-98 30.00 1.00% -0.31 99.61% $836
May-98 31.00 1.00% -1.01 98.91% $823
Jun-98 30.00 1.00% 2.35 102.27% $839
Jul-98 31.00 1.00% -0.87 99.05% $827
Aug-98 31.00 1.00% -12.59 87.34% $719
Sep-98 30.00 1.00% 3.73 103.64% $743
Oct-98 31.00 1.00% 6.36 106.27% $786
Nov-98 30.00 1.00% 5.00 104.91% $821
Dec-98 31.00 1.00% 5.38 105.29% $861
Jan-99 31.00 1.00% 2.94 102.85% $882
Feb-99 28.00 1.00% -2.59 97.33% $855
Mar-99 31.00 1.00% 1.00 100.91% $860
Apr-99 30.00 1.00% 2.97 102.88% $881
May-99 31.00 1.00% -1.74 98.18% $861
Jun-99 30.00 1.00% 4.96 104.87% $900
Jul-99 31.00 1.00% -2.04 97.88% $877
Aug-99 31.00 1.00% -0.24 99.67% $870
Sep-99 30.00 1.00% -2.03 97.89% $849
Oct-99 31.00 1.00% 4.08 103.99% $879
Nov-99 30.00 1.00% 1.76 101.68% $890
Dec-99 31.00 1.00% 5.69 105.60% $936
Listed in Order Max 936
to match MFPR Min 500
</TABLE>
CONTRAFUND PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND II seeks
long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Investing in securities of companies whose value
it believes is not fully recognized by the public.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of
potentially above-average long-term returns.
The graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E CONTRAFUND
Apr-82 0.01
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
Jan-97 31.00 3.86 103.77% $792
Feb-97 28.00 -2.78 97.15% $767
Mar-97 31.00 -2.59 97.33% $743
Apr-97 30.00 2.41 102.33% $757
May-97 31.00 6.18 106.09% $800
Jun-97 30.00 4.37 104.28% $831
Jul-97 31.00 8.59 108.50% $898
Aug-97 31.00 -2.82 97.10% $868
Sep-97 30.00 6.77 106.68% $922
Oct-97 31.00 1.00% -3.02 96.90% $890
Nov-97 30.00 1.00% -0.05 99.87% $885
Dec-97 31.00 1.00% 1.84 101.75% $897
Jan-98 31.00 1.00% -0.10 99.81% $892
Feb-98 28.00 1.00% 7.27 107.19% $952
Mar-98 31.00 1.00% 4.86 104.77% $994
Apr-98 30.00 1.00% 0.95 100.87% $998
May-98 31.00 1.00% -2.34 97.58% $970
Jun-98 30.00 1.00% 5.38 105.29% $1,017
Jul-98 31.00 1.00% 0.14 100.05% $1,014
Aug-98 31.00 1.00% -14.97 84.96% $858
Sep-98 30.00 1.00% 5.83 105.74% $903
Oct-98 31.00 1.00% 3.29 103.20% $928
Nov-98 30.00 1.00% 6.66 106.57% $985
Dec-98 31.00 1.00% 12.16 112.06% $1,100
Jan-99 31.00 1.00% 5.73 105.64% $1,157
Feb-99 28.00 1.00% -3.68 96.25% $1,109
Mar-99 31.00 1.00% 3.56 103.47% $1,143
Apr-99 30.00 1.00% 2.14 102.06% $1,162
May-99 31.00 1.00% -2.02 97.90% $1,133
Jun-99 30.00 1.00% 5.41 105.32% $1,188
Jul-99 31.00 1.00% -1.65 98.27% $1,163
Aug-99 31.00 1.00% -2.92 97.00% $1,123
Sep-99 30.00 1.00% -0.32 99.60% $1,114
Oct-99 31.00 1.00% 3.66 103.57% $1,149
Nov-99 30.00 1.00% 3.96 103.87% $1,189
Dec-99 31.00 1.00% 8.89 108.80% $1,288
Listed in Order Max 1,288
to match MFPR Min 500
</TABLE>
GROWTH OPPORTUNITIES PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND III
seeks to provide capital growth.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Potentially investing in other types of
securities, including bonds which may be lower-quality debt
securities. These securities can be more volatile due to increased
sensitivity to interest rate increases, and adverse issuer, political,
regulatory, market, or economic developments.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both. The value of the fund's investments will vary and can
decline in response to adverse issuer, political, regulatory, market
or economic developments.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors seeking
growth of capital. The investment philosophy is not constrained by any
particular investment style. The fund's assets may be invested in
securities of foreign issuers in addition to securities of domestic
issuers.
The graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E GROWTH OPPORTUNITIES
Apr-82 0.01
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
Jan-97 31.00 4.74 104.65% $725
Feb-97 28.00 0.95 100.87% $729
Mar-97 31.00 -5.10 94.82% $688
Apr-97 30.00 4.57 104.48% $716
May-97 31.00 6.49 106.40% $759
Jun-97 30.00 3.32 103.23% $780
Jul-97 31.00 7.71 107.62% $836
Aug-97 31.00 -3.80 96.12% $801
Sep-97 30.00 4.17 104.08% $830
Oct-97 31.00 1.00% -2.00 97.92% $809
Nov-97 30.00 1.00% 3.53 103.44% $834
Dec-97 31.00 1.00% 2.77 102.68% $853
Jan-98 31.00 1.00% 0.42 100.33% $852
Feb-98 28.00 1.00% 6.25 106.17% $901
Mar-98 31.00 1.00% 3.11 103.02% $924
Apr-98 30.00 1.00% -0.50 99.42% $915
May-98 31.00 1.00% -0.70 99.22% $904
Jun-98 30.00 1.00% 2.40 102.32% $922
Jul-98 31.00 1.00% 0.34 100.25% $920
Aug-98 31.00 1.00% -12.97 86.96% $797
Sep-98 30.00 1.00% 6.16 106.07% $842
Oct-98 31.00 1.00% 7.65 107.56% $902
Nov-98 30.00 1.00% 6.42 106.33% $955
Dec-98 31.00 1.00% 5.39 105.30% $1,002
Jan-99 31.00 1.00% 0.92 100.83% $1,006
Feb-99 28.00 1.00% -4.71 95.22% $954
Mar-99 31.00 1.00% 2.53 102.44% $973
Apr-99 30.00 1.00% 4.16 104.07% $1,009
May-99 31.00 1.00% -0.66 99.26% $997
Jun-99 30.00 1.00% 4.37 104.28% $1,036
Jul-99 31.00 1.00% -2.33 97.59% $1,007
Aug-99 31.00 1.00% -2.47 97.45% $977
Sep-99 30.00 1.00% -3.42 96.50% $939
Oct-99 31.00 1.00% 3.86 103.77% $970
Nov-99 30.00 1.00% 0.13 100.05% $967
Dec-99 31.00 1.00% 2.34 102.25% $985
Listed in Order Max 1,036
to match MFPR Min 500
</TABLE>
BALANCED PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND III seeks both
income and growth of capital.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing approximately 60% of assets in stocks
and other equity securities and the remainder in bonds and other debt
securities, including lower-quality debt securities when its outlook
is neutral.
(small solid bullet) Investing at least 25% of total assets in
fixed-income senior securities (including debt securities and
preferred stock).
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) With respect to equity investments, emphasizing
above-average income-producing equity securities, which tend to lead
to investments in stocks that have more "value" characteristics than
"growth" characteristics.
(small solid bullet) Analyzing a security's issuer using fundamental
factors and evaluating each security's current price relative to
estimated long-term value in selecting investments. The value of the
fund's investments will vary from day to day, and can decline in
response to interest rate increases, adverse issuer, political,
regulatory or economic developments.
INVESTOR PROFILE. The fund may be appropriate for investors who seek a
balance between stocks and bonds. The fund may invest its assets in
securities of foreign issuers in addition to domestic issuers.
The graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E BALANCED
Apr-82 0.01
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
Jan-97 31.00 3.19 103.10% $575
Feb-97 28.00 1.68 101.60% $582
Mar-97 31.00 -2.80 97.12% $563
Apr-97 30.00 3.78 103.69% $582
May-97 31.00 3.96 103.87% $602
Jun-97 30.00 3.66 103.57% $621
Jul-97 31.00 5.58 105.49% $652
Aug-97 31.00 -4.66 95.26% $619
Sep-97 30.00 4.01 103.92% $640
Oct-97 31.00 1.00% -2.11 97.81% $624
Nov-97 30.00 1.00% 2.44 102.36% $636
Dec-97 31.00 1.00% 2.03 101.94% $645
Jan-98 31.00 1.00% 1.10 101.01% $649
Feb-98 28.00 1.00% 3.72 103.64% $670
Mar-98 31.00 1.00% 3.76 103.67% $692
Apr-98 30.00 1.00% 0.81 100.73% $694
May-98 31.00 1.00% 0.00 99.91% $691
Jun-98 30.00 1.00% 2.26 102.18% $703
Jul-98 31.00 1.00% -0.07 99.84% $699
Aug-98 31.00 1.00% -10.81 89.11% $620
Sep-98 30.00 1.00% 5.70 105.61% $653
Oct-98 31.00 1.00% 3.66 103.57% $673
Nov-98 30.00 1.00% 3.73 103.64% $695
Dec-98 31.00 1.00% 3.53 103.44% $716
Jan-99 31.00 1.00% 1.12 101.03% $720
Feb-99 28.00 1.00% -1.78 98.14% $704
Mar-99 31.00 1.00% 2.50 102.41% $718
Apr-99 30.00 1.00% 3.21 103.12% $738
May-99 31.00 1.00% -2.24 97.68% $718
Jun-99 30.00 1.00% 2.10 102.02% $729
Jul-99 31.00 1.00% -2.43 97.49% $708
Aug-99 31.00 1.00% -1.08 98.84% $697
Sep-99 30.00 1.00% -1.87 98.05% $680
Oct-99 31.00 1.00% 2.83 102.74% $696
Nov-99 30.00 1.00% 0.00 99.92% $693
Dec-99 31.00 1.00% 2.30 102.21% $705
Listed in Order Max 738
to match MFPR Min 500
</TABLE>
GROWTH & INCOME PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND III
seeks high total return through a combination of current income and
capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing a majority of assets in common stocks
with a focus on those that pay current dividends and show potential
for capital appreciation.
(small solid bullet) Potentially investing in bonds, including
lower-quality debt securities, as well as stocks that are not
currently paying dividends, but offer prospects for future income or
capital appreciation.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position, and market and economic
conditions to select investments.
INVESTOR PROFILE. 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
investments.
The graph below is based on a 5% Benchmark Rate of Return and initial
monthly annuity income rate of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E GROWTH & INCOME
Apr-82 0.01
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
Feb-95 28.00
Mar-95 31.00
Apr-95 30.00
May-95 31.00
Jun-95 30.00
Jul-95 31.00
Aug-95 31.00
Sep-95 30.00
Oct-95 31.00
Nov-95 30.00
Dec-95 31.00
Jan-96 31.00
Feb-96 29.00
Mar-96 31.00
Apr-96 30.00
May-96 31.00
Jun-96 30.00
Jul-96 31.00
Aug-96 31.00
Sep-96 30.00
Oct-96 31.00
Nov-96 30.00
Dec-96 31.00 $500
Jan-97 31.00 2.50 102.41% $510
Feb-97 28.00 0.20 100.12% $509
Mar-97 31.00 -4.38 95.54% $484
Apr-97 30.00 5.40 105.31% $508
May-97 31.00 5.60 105.51% $533
Jun-97 30.00 5.12 105.03% $558
Jul-97 31.00 8.09 108.00% $600
Aug-97 31.00 -5.07 94.85% $567
Sep-97 30.00 5.26 105.17% $594
Oct-97 31.00 1.00% -2.82 97.10% $574
Nov-97 30.00 1.00% 4.48 104.39% $597
Dec-97 31.00 1.00% 2.22 102.13% $607
Jan-98 31.00 1.00% 0.56 100.47% $608
Feb-98 28.00 1.00% 6.85 106.77% $646
Mar-98 31.00 1.00% 5.08 104.99% $676
Apr-98 30.00 1.00% 0.00 99.92% $672
May-98 31.00 1.00% -1.49 98.43% $659
Jun-98 30.00 1.00% 5.12 105.03% $690
Jul-98 31.00 1.00% -0.69 99.23% $681
Aug-98 31.00 1.00% -14.17 85.76% $582
Sep-98 30.00 1.00% 7.49 107.40% $622
Oct-98 31.00 1.00% 7.79 107.70% $668
Nov-98 30.00 1.00% 6.39 106.30% $707
Dec-98 31.00 1.00% 5.49 105.40% $742
Jan-99 31.00 1.00% 2.23 102.14% $755
Feb-99 28.00 1.00% -1.92 98.00% $737
Mar-99 31.00 1.00% 3.15 103.06% $756
Apr-99 30.00 1.00% 2.81 102.73% $774
May-99 31.00 1.00% -2.85 97.07% $748
Jun-99 30.00 1.00% 4.46 104.37% $778
Jul-99 31.00 1.00% -3.51 96.41% $747
Aug-99 31.00 1.00% -1.33 98.59% $733
Sep-99 30.00 1.00% -1.78 98.14% $716
Oct-99 31.00 1.00% 5.26 105.17% $750
Nov-99 30.00 1.00% 0.59 100.51% $751
Dec-99 31.00 1.00% 2.25 102.16% $764
Listed in Order Max 778
to match MFPR Min 484
</TABLE>
MID CAP PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND
III seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Investing at least 65% of total assets in
securities of companies with medium market capitalizations (those with
market capitalizations similar to companies in the S&P MidCap
400).
(small solid bullet) Potentially investing in companies with
smaller or larger market capitalizations.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" or "value" stocks
or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
INVESTOR PROFILE. The fund may be appropriate for investors
seeking long-term growth of capital through equity securities,
including growth or value stocks, or a combination of both.
The graph below is based on a 5% Benchmark Rate of Return and
initial monthly income of $500.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROSPECTUS CHARTS CUMULATIVE ONE MONTH TOTAL
RETURNS
M&E 0.01
BRR 0.05
Month # of Days M&E MID CAP
Apr-82 0.01
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
Feb-95 28.00
Mar-95 31.00
Apr-95 30.00
May-95 31.00
Jun-95 30.00
Jul-95 31.00
Aug-95 31.00
Sep-95 30.00
Oct-95 31.00
Nov-95 30.00
Dec-95 31.00
Jan-96 31.00
Feb-96 29.00
Mar-96 31.00
Apr-96 30.00
May-96 31.00
Jun-96 30.00
Jul-96 31.00
Aug-96 31.00
Sep-96 30.00
Oct-96 31.00
Nov-96 30.00
Dec-96 31.00
Jan-97 31.00
Feb-97 28.00
Mar-97 31.00
Apr-97 30.00
May-97 31.00
Jun-97 30.00
Jul-97 31.00
Aug-97 31.00
Sep-97 30.00
Oct-97 31.00 1.00%
Nov-97 30.00 1.00%
Dec-97 31.00 1.00%
Jan-98 31.00 1.00%
Feb-98 28.00 1.00%
Mar-98 31.00 1.00%
Apr-98 30.00 1.00%
May-98 31.00 1.00%
Jun-98 30.00 1.00%
Jul-98 31.00 1.00%
Aug-98 31.00 1.00%
Sep-98 30.00 1.00%
Oct-98 31.00 1.00%
Nov-98 30.00 1.00%
Dec-98 31.00 1.00% 3.10 $500
Jan-99 31.00 1.00% 2.04 101.95% $508
Feb-99 28.00 1.00% -5.42 94.51% $478
Mar-99 31.00 1.00% 4.92 104.83% $499
Apr-99 30.00 1.00% 6.90 106.81% $531
May-99 31.00 1.00% -0.99 98.93% $523
Jun-99 30.00 1.00% 6.61 106.52% $555
Jul-99 31.00 1.00% -0.17 99.74% $551
Aug-99 31.00 1.00% 0.77 100.68% $553
Sep-99 30.00 1.00% -1.86 98.06% $540
Oct-99 31.00 1.00% 6.53 106.44% $572
Nov-99 30.00 1.00% 6.78 106.69% $608
Dec-99 31.00 1.00% 16.15 116.05% $703
Listed in Order Max 703
to match MFPR Min 478
</TABLE>
MORGAN STANLEY ASSET MANAGEMENT
EMERGING MARKETS DEBT PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks high total return by
investing primarily in Fixed Income Securities of government and
government-related issuers and, to a lesser extent, of corporate
issuers in emerging market countries.
(small solid bullet) APPROACH. Morgan Stanley Asset Management
seeks high total return by investing in a portfolio of emerging market
debt that offers low correlation to many other asset classes. Using
macroeconomic and fundamental analysis, Morgan Stanley Asset
Management seeks to identify developing countries that are undervalued
and have attractive or improving fundamentals. After the country
allocation is determined, the sector and security selection is made
within each country.
(small solid bullet) PROCESS. Morgan Stanley Asset Management's
global allocation team analyzes the global economic environment and
its impact on emerging markets. Morgan Stanley As set Management
focuses on investing in countries that show signs of positive
fundamental change. This analysis considers macroeconomic factors,
such as GDP growth, inflation, monetary policy, fiscal policy and
interest rates and sociopolitical factors such as political risk,
leadership, social stability, and commitment to reform. In selecting
securities, Morgan Stanley Asset Management first examines
yield curves with respect to a country and then considers
instrument-specific criteria, including: (1) spread duration; (2) real
interest rates; and (3) liquidity. The Portfolio's holdings may range
in maturity from overnight to 30 years or more and will not be subject
to any minimum credit rating standard. Morgan Stanley Asset
Management may , when or if available, use hedging strategies,
including the use of derivatives to protect the Portfolio from
overvalued currencies or to take advantage of undervalued currencies.
EMERGING MARKETS EQUITY PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation by investing primarily in Equity Securities of issuers in
emerging market countries.
(small solid bullet) APPROACH. Mor gan Stanley Asset Management
seeks to maximize returns by investing in growth-oriented equity
securities in emerging markets. Mor gan Stanley Asset Management's
investment approach combines top-down country allocation with
bottom-up stock selection. Investment selection criteria include
attractive growth characteristics, reasonable valuations and
managements with a strong shareholder value orientation.
(small solid bullet) PROCESS. Morgan Stanley Asset Management's
global allocation team analyzes the global economic environment,
particularly its impact on emerging markets and allocates the
Portfolio's assets among emerging markets based on relative economic,
political, and social fundamentals, stock valuations and investor
sentiment. Morgan Stanley Asset Management invests within
countries based on the work of country specialists who conduct
extensive fundamental analysis of issuers within these markets and
seek to identify issuers with strong earnings growth prospects. To
manage risk, Morgan Stanley Asset Management emphasizes
thorough macroeconomic and fundamental research.
GLOBAL EQUITY PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation by investing primarily in Equity Securities of issuers
throughout the world, including U.S. issuers .
(small solid bullet) APPROACH. Morgan Stanley Asset
Management seeks to maintain a diversified portfolio of global equity
securities based on individual stock selection. Morgan Stan ley
Asset Management emphasizes a bottom-up approach to investing that
seeks to identify securities of undervalued issuers.
(small solid bullet) PROCESS. Morgan Stanley Asset Management
selects securities for investment from a universe of eligible issuers
consisting of approximately 3,200 companies in the Mor gan Stanley
Capital International (MSCI) World Index. Morgan Stanley Asset
Management expects to invest at least 20% of the Portfolio's total
assets in the common stocks of U.S. issuers. The investment process is
value driven and based on individual stock selection. Morgan Stanley
Asset Management considers value criteria with an emphasis on
cash flow and the intrinsic value of company assets. Securities which
appear undervalued according to these criteria are then subjected to
in-depth fundamental analysis. Morgan Stanley Asset Management
conducts a thorough investigation of the issuer's balance sheet, cash
flow and income statement and assesses the company's business
franchise, including product, competitiveness, market positioning, and
industry structure. Meetings with senior company management are
integral to the investment process.
INTERNATIONAL MAGNUM PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation by investing primarily in Equity Securities of non-U.S.
issuers domiciled in EAFE countries.
(small solid bullet) APPROACH. Morgan Stanley A sset Management
seeks to achieve superior long-term returns by creating a diversified
portfolio of undervalued international equity securities. To
achieve this goal, Morgan Stanley Asset Management uses a combination
of strategic geographic asset allocation and fundamental, value
oriented stock selection.
(small solid bullet) PROCESS. The Portfolio is managed using a
two-part process combining the expertise of investment teams based in
New York, London, Tokyo, and Singapore. The New York-based portfolio
management team decides upon the appropriate allocation of the
Portfolio's assets among Europe, Japan and developed Asia, including
Australia and New Zealand. Regional allocation decisions are based on
variety of factors, including relative valuations, earnings
expectations, macroeconomic factors, as well as input from the
regional stock selection teams and from the Morgan Stanley Asset
Management's Asset Allocation Committee, which is made up of
several of the Morgan Stanley Asset Management's most senior
investment officers. Once the allocations to Europe, Asia, and Japan
have been determined, three overseas investment teams in London (for
European stocks), Tokyo (for Japanese stocks) and Singapore (for Asian
stocks) decide which stocks to purchase for their respective
geographic regions. The regional portfolio management teams look for
stocks that they believe to be undervalued by the market. The regional
specialists analyze each company's finances, products, and
management, typically meeting with each company's management, before a
stock is purchased for the Portfolio. The Portfolio invests
primarily in countries comprising the MSCI Europe, Australiasia, Far
East (EAFE) Index (the "EAFE Index"). EAFE countries include Japan,
most nations in Western Europe, and the more developed nations of
Asia, such as Australia, New Zealand, Hong Kong, and Singapore.
However, the Portfolio also may invest up to 5% of its assets in
countries not included in the EAFE Index.
PBHG
SELECT 20 PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Select 20 Portfolio, a non-diversified
Portfolio, seeks long-term growth of capital.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in growth securities of a
limited number (i.e., no more than 20 stocks) of large capitalization
companies that, in Pilgrim Baxter & Associates, Ltd.'s (the "Adviser")
opinion, have strong business momentum , earnings growth and
capital appreciation potential. These companies will generally have
market capitalization in excess of $1 billion.
(small solid bullet) The growth securities in the Portfolio are
primarily common stocks, but may also include other equity securities
such as warrants and rights to purchase common stocks, and convertible
securities.
(small solid bullet) The Portfolio is non-diversified, which means its
performance is dependent upon the securities of a smaller number of
companies. As a result, the impact of a single change in value
(positive or negative) of a single holding may be magnified.
GROWTH II PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks capital appreciation.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in growth securities of
small and medium sized companies that, in the Adviser's opinion, have
strong business momentum, earnings growth and capital
appreciation potential. These companies will generally have market
capitalizations or annual revenues between $500 million and $10
billion.
(small solid bullet) The growth securities in the Portfolio are
primarily common stocks, but may also include other equity securities
such as warrants and rights to purchase common stocks, and convertible
securities.
(small solid bullet) The Portfolio emphasizes small and medium sized
growth companies, so it may be more volatile than the stock market in
general, as measured by the S&P 500.
SELECT VALUE PORTFOLIO (PREVIOUSLY CALLED LARGE CAP VALUE PORTFOLIO)
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term growth of capital
and income. Current income is a secondary objective.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in value securities of no
more than 30 large capitalization companies that, in the
opinion of the Adviser and Pilgrim Baxter Value Investors, Inc. (the
"Sub-Adviser"), are currently underpriced using certain financial
measurements, such as their price-to-earnings ratios.
(small solid bullet) The value securities in the Portfolio are
primarily common stocks, but may also include other equity
securities such as warrants and rights to purchase common stocks and
convertible securities. The Portfolio holds a limited number of
stocks and the impact of the change in value (positive or negative) of
a single holding may be magn ified.
SMALL CAP VALUE PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks to achieve above-average
total return over a market cycle of three to five years, consistent
with reasonable risk.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in value securities of
companies whose market capitalizations are within the range of the
Russell 2000 index.
(small solid bullet) The value securities in the Portfolio are
primarily common stocks that, in the opinion of the Adviser and the
Sub-Adviser, are currently underpriced using certain financial
measurements, such as their price-to-earnings ratios, but may also
include other equity securities such as warrants and rights to
purchase common stocks and convertible securities.
(small solid bullet) The Portfolio's sector weightings are generally
within 10% of the Russell 2000's sector weightings. In addition, the
Portfolio generally has lower price-to-earnings ratios than the
Russell 2000.
(small solid bullet) The Portfolio emphasizes value securities of
smaller sized companies, so it is likely to be more volatile than the
stock market in general, as measured by the S&P 500 Index.
TECHNOLOGY & COMMUNICATIONS PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio, a non- diversified
Portfolio, seeks long-term growth of capital. Current income is
incidental to the Portfolio's objective.
(small solid bullet) Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in common stocks of
companies doing business in the technology and communications sectors
of the market. The Portfolio is concentrated which means it will
invest 25% of more of its total assets in one or more of the
industries within these sectors. These industries may include computer
software and hardware, network and cable broadcasting, semiconductors,
defense and data storage and retrieval, and biotechnology.
(small solid bullet) The Portfolio offers investors significant
growth potential because it invests in companies that may be
responsible for breakthrough products or technologies or positioned to
take advantage of cutting-edge developments.
(small solid bullet) The Portfolio's holdings may range from
smaller companies developing new technologies or pursuing scientific
breakthroughs to large, blue chip firms with established track records
in developing, using or marketing scientific advances.
(small solid bullet) The Portfolio is non-diversified, which means
its performance is dependent on the securities of a smaller number of
companies. As a result, the impact of a change in value (positive
or negative) of a single holding may be magnified.
(small solid bullet) Securities of technology companies are strongly
affected by worldwide scientific and technological developments and
governmental policies and, therefore, are generally more volatile than
securities of companies not dependent upon or associated with
technology issues.
STRONG
MID CAP GROWTH FUND II
OBJECTIVE AND STRATEGY
(small solid bullet) Mid Cap Growth Fund II seeks capital growth
through investments in mid-sized companies.
(small solid bullet) The Fund invests primarily in equity securities
that the Adviser believes have above-average growth prospects.
(small solid bullet) Under normal market conditions, the Fund will
invest at least 65% of its total assets in equity securities,
including (a) common stocks, (b) preferred stocks, and (c) securities
that are convertible into common or preferred stocks, such as warrants
and convertible bonds.
(small solid bullet) While the emphasis of the Fund is clearly on
equity securities, the Fund may invest a limited portion of its assets
in debt obligations when the Adviser perceives that they are more
attractive than stocks on a long-term basis.
(small solid bullet) The Fund may invest up to 35% of its total assets
in debt obligations, including intermediate-to-long term corporate or
U.S. government debt securities. Although the debt obligations in
which it invests will be primarily investment grade, the Fund may
invest up to 5% of its net assets in non-investment grade debt
obligations.
(small solid bullet) When the Adviser determines that market
conditions warrant a temporary defensive position, the Fund may invest
without limitation in cash and short-term fixed-income securities.
(small solid bullet) The Fund may invest up to 25% of its assets in
foreign securities, including both direct investments and investments
made through depository receipts.
(small solid bullet) The Fund generally will invest in mid-size
companies whose earnings are believed to be in a relatively strong
growth trend, and, to a lesser extent, in companies in which
significant further growth is not anticipated but whose market value
is thought to be undervalued.
(small solid bullet) In identifying companies with favorable growth
prospects, the Adviser ordinarily looks to certain characteristics,
such as (a) prospects for above-average sales and earnings growth; (b)
high return on invested capital; (c) overall financial strength,
including sound financial and accounting policies and a strong balance
sheet; (d) competitive advantages, including innovative products and
services; (e) effective research, product development, and marketing;
and (f) stable, capable management.
OPPORTUNITY FUND II
OBJECTIVE AND STRATEGY
(small solid bullet) Opportunity Fund II seeks capital growth.
(small solid bullet) The Fund invests primarily in equity securities
and currently emphasizes investments in medium-sized companies the
Adviser believes are under-researched and attractively valued.
(small solid bullet) The Fund will invest at least 70% of its total
assets in equity securities, including (a) common stocks, (b)
preferred stocks, and (c) securities that are convertible into common
or preferred stocks, such as warrants and convertible bonds.
(small solid bullet) Under normal market conditions, the Fund expects
to be fully invested in equities.
(small solid bullet) The Fund may, however, invest up to 30% of its
net assets in debt obligations, including intermediate- to long-term
corporate or U.S. government debt securities. Although the debt
obligations in which it invests will be primarily investment grade,
the Fund may invest up to 5% of its net assets in non-investment grade
debt obligations.
(small solid bullet) When the Adviser determines that market
conditions warrant a temporary defensive position, it may use that
allowance to invest up to 30% of its net assets in cash and short-term
fixed-income securities.
(small solid bullet) The Fund may invest up to 25% of its assets in
foreign securities, including both direct investments and investments
made through depository receipts.
(small solid bullet) In selecting its equity investments, the Adviser
seeks to identify attractive investment opportunities that have not
become widely recognized by other stock analysts or the financial
press. Through first-hand research that often includes on-site visits
with the leaders of companies, the Adviser looks for companies with
fundamental value or growth potential that is not yet reflected in
their current market prices. In many cases, companies in the small-
and medium-capitalization markets are under-followed and, as a result,
less efficiently priced than their larger, better known counterparts.
(small solid bullet) The Fund's investments are therefore likely to
consist, in part, of securities in small- and medium-sized companies.
Many of these companies may have successfully emerged from the
start-up phase and have potential for future growth. Because of their
longer track records and more seasoned management, they generally pose
less investment uncertainty than do the smallest companies. In
general, smaller-capitalization companies often involve greater risks
than investments in established companies.
WARBURG PINCUS
INTERNATIONAL EQUITY PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks long-term capital
appreciation.
(small solid bullet) The Portfolio pursues its investment objective by
investing in equity securities of companies located or conducting a
majority of their business outside the United States.
(small solid bullet) The Portfolio i nten ds to invest
substantially all of its assets in common stocks, warrants and
securities convertible into or exchangeable for common stocks, and
will generally invest in at least three countries other than the
United States.
(small solid bullet) The Portfolio intends to diversify across
securities of issues located in a number of foreign countries, but
from time to time may invest a significant portion of its assets in a
single country.
(small solid bullet) Although the Portfolio emphasizes developed
countries, it may also invest in emerging markets.
(small solid bullet) In choosing equity securities, the Portfolio
managers look for companies of any size whose securities appear to be
discounted relative to earnings, assets, or projected growth. The
Portfolio managers determine value based on research and analysis,
taking all relevant factors into account.
RISK. In addition to risks associated with equity securities,
international investment entails special risk considerations including
currency fluctuations, lower liquidity, economic instability,
political uncertainty, and differences in accounting methods.
GLOBAL POST-VENTURE CAPITAL PORTFOLIO ( PREVIOUSLY CALLED
POST-VENTURE CAPITAL PORTFOLIO)
OBJECTI VE AND STRATEGY
(small solid bullet) T he Portfolio seeks long-term growth of
capital.
(small solid bullet) The Portfolio pursues an aggressive investment
strategy by investing primarily in equity securities of U.S. and
foreign companies considered to be in their post-venture
capital stage of development.
(small solid bullet) Under normal market conditions, the Portfolio
will invest up to at least 65% of its total assets in equity
securities of "post-venture capital companies." A post-venture capital
company is a company that has received venture capital financing
either (a) during the early stages of the company's existence or the
early stages of the development of a new product or service or (b) as
part of a restructuring or recapitalization of the company. In
addition, the investment of venture capital financing, distribution of
such company's securities to venture capital investors, or initial
public offering ("IPO"), will have been made within ten years prior to
the Portfolio's purchase of the company's securities.
(small solid bullet) The Portfolio will invest in three
countries, including the U.S.
(small solid bullet) Up to 10% of the Portfolio's assets may be
invested in private equity portfolios that invest in venture capital
companies.
(small solid bullet) A portion of the Portfolio's assets may be
invested in assets of companies expected to experience "special
situations," such as mergers or reorganizations.
RISK. The main risks associated with the portfolio include risks
associated with equity securities, particularly small, start-up and
special-situation companies. I n addition to risks associated with
equity securities, international investment entails special risk
considerations including currency fluctuations, lower liquidity,
economic instability, political uncertainty, and differences in
accounting methods. The Portfolio employs aggressive strategies
and may not be appropriate for all investors.
SMALL COMPANY GROWTH PORTFOLIO
OBJECTIVE AND STRATEGY
(small solid bullet) The Portfolio seeks capital growth by investing
primarily in equity securities of small sized U.S. companies that
represent attractive opportunities for capital growth.
(small solid bullet) The Portfolio considers a "small" company to be
one that has a market capitalization, measured at the time the
Portfolio purchases a security of that company, within the range of
capitalizations of companies represented in the Russell 2000 Index. As
of December 31, 1999 , the Russell 2000 Index included companies
with market capitalizations between $17.8 million and $1.3 billion.
Companies that outgrow the definition of small company after the
Portfolio has purchased its securities continue to be considered small
for purposes of the Portfolio's investment policies.
(small solid bullet) Small companies may (1) still be in the
development stage, (2) be older companies that appear to be entering a
new stage of growth, or (3) be companies providing products or
services with a high unit-volume growth rate.
(small solid bullet) The Portfolio may also invest in securities of
emerging-growth companies, which can be either small- or
medium -sized companies that have passed their start up phase
and that show positive earnings and prospects of achieving significant
profit and gain in a relatively short period of time. Emerging growth
companies generally stand to benefit from new products or services,
technological developments or changes in management and other factors
and include smaller companies experiencing unusual developments
affecting their market value.
(small solid bullet) The Portfolio is non-diversified and may invest a
greater portion of its assets in the securities of a smaller number of
issuers.
RISK. The Portfolio's main risks are the risks associated with equity
securities, particularly small, start-up, and special-situation
companies. The Portfolio may be subject to volatility resulting from
its non-diversified status.
FUNDS' AVAILABILITY TO SEPARATE ACCOUNTS
Shares of the Funds may also be sold to a variable life separate
account of Fidelity Investments Life and to variable annuity and
variable life separate accounts of other insurance companies. For a
discussion of the possible consequences associated with having the
Funds available to such other separate accounts, see RESOLVING
MATERIAL CONFLICTS on page 160.
THE INVESTMENT ADVISERS
FIDELITY
The investment adviser for the Fidelity Funds is Fidelity Management &
Research Company, a registered adviser under the Investment Advisers
Act of 1940. Fidelity Management & Research Company ( 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 o f February 29, 2000, FMR managed over $829
billion in assets . The portfolios of the Fidelity Funds, as part
of their operating expenses, pay an investment management fee to
FMR . These fees are part of the Funds' expenses. See the
prospectuses for the Funds for discussions of the Funds' expenses.
Fidelity Investments Money Managemen t, Inc., a subsidiary of FMR,
chooses certain investments for some of the Fidelity Funds. Beginning
January 1, 2001, FMR Co., Inc., a su bsidiary of FMR, will also
choose certain investments for the Fidelity Funds. Foreign affiliates
of FMR may help choose investments for some of the Funds. BT is a
wholly-owned subsidiary of Bankers Trust Corporation (formerly Bankers
Trust New York Corporation). BT currently serves as sub-adviser and
custodian for the Index 500 Portfolio.
MORGAN STANLEY ASSET MANAGEMENT
On December 1, 1998, Morgan Stanley Asset Management Inc. changed
its name to Morgan Stanley Dean Witter Investment Management Inc. but
continues to do business in certain instances using the name Morgan
Stanley Asset Management. The investment Adviser for T he Universal
Institutional Funds, Inc. is Morgan Stanley Asset Management, which is
a wholly-owned subsidiary of Morgan Stanley Dean Witter & Co., which
is a preeminent global financial services firm that maintains leading
market positions in each of its three primary businesses - securities,
asset management and credit services. Morgan Stanley Asset
Management, a registered investment Adviser under the Investment
Advisers Act of 1940, as amended, serves as investment Adviser to
numerous open-end and closed-end investment companies as well as, to
employee benefit plans, endowment funds, foundations and other
institutional investors. Morgan Stanley Asset Management's
principal business office is located at 1221 Avenue of the Americas,
New York, New York 10020.
PBHG
The investment Adviser for the PBHG Insurance Series Fund, Inc. is
Pilgrim Baxter & Associates, Ltd. ("Pilgrim Baxter"), a professional
investment management firm and registered investment Adviser that,
along with its predecessors, has been in business since 1982. The
controlling shareholder of Pilgrim Baxter is United Asset Management
Corporation ("UAM"), a New York stock exchange listed holding company
principally engaged through affiliated firms, in providing
institutional investments management services and acquiring
institutional investment management firms. UAM's headquarters are
located at One International Place, Boston, Massachusetts 02110. The
principal business address of the Adviser is 825 Duportail
Road, Wayne, Pennsylvania 19087. Pilgrim Baxter Value Investors,
Inc., the Sub-Adviser, is a wholly owned subsidiary of Pilgrim Baxter
and is a registered investment Adviser that was formed in 1940. As
with the Adviser, the controlling shareholder of the Sub-Adviser is
UAM. The principal business address of the Sub-Adviser is 825
Duportail Road, Wayne, Pennsylvania 19087.
STRONG
The investment Adviser for the Strong Funds is Strong Capital
Management, Inc. The Adviser began conducting business in 1974. Since
then, its principal business has been providing continuous investment
supervision for individuals and institutional accounts, such as
pension funds and profit-sharing plans, as well as mutual funds,
several of which are funding vehicles for variable insurance products.
The Adviser's principal mailing address is P.O. Box 2936, Milwaukee,
Wisconsin 53201. Mr. Richard S. Strong, the Chairman of the Board of
the Fund, is the controlling shareholder of the Adviser.
WARBURG PINCUS
The investment Adviser for the Warburg Pincus Trust is Credit
Suisse Asset Management, LLC. Credit Suisse Asset Management, LLC is a
member of Credit Suisse Asset Management, the institutional asset
management and mutual fund arm of Credit Suisse Group, one of the
world's leading banks. Credit Suisse Asset Management companies manage
approximately $72 billion in the U.S. and $203 billion globally.
IMPORTANT
You will find more complete information about the Funds, including the
risks associated with each portfolio, in their respective
prospectuses. You should read them in conjunction with this
prospectus.
FACTS ABOUT THE CONTRACT
PURCHASE OF A CONTRACT
We offer the Contracts only in states in which we have obtained
approval. Two types of Contracts are available. You may
purchase: (1) a NON-QUALIFIED CONTRACT using money from any source;
and (2) a QUALIFIED CONTRACT with money rolled over from a
qualified retirement plan, such as a 401(k) plan, 403(b) plan or IRA.
(small solid bullet) The minimum Purchase Payment for a Contract is
generally $25,000.
(small solid bullet) 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.
(small solid bullet) 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.
(small solid bullet) However, if you purchase the Contract as a
Qualified Contract (IRA) you must be the sole Owner of the Contract.
(small solid bullet) Generally, for all Contracts either you or the
Joint Annuitant must be no more than 85 years old. To choose the
Withdrawal option e i ther you or the Joint Annuitant must be no
more than 80 y e ars old.
(small solid bullet) APPLICATION AND INITIAL PURCHASE PAYMENT
When we receive your properly completed application, we apply your
payment to the purchase of a Contract within two valuation periods
after receipt at the Annuity Service Center. We will consider your
application 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) we receive the entire amount of your Purchase Payment.
The date we credit the payment and issue your Contract is called the
Contract Date. If your application is incomplete, we will request the
information necessary to complete the application. If you do not
furnish the information within five business days of the time
we receive your application, we will return your payment unless we
obtain your specific permission to keep it until you complete the
application.
FREE LOOK PRIVILEGE
You may return a Contract for a refund within 30 calendar 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, we
will promptly refund your Purchase Payment adjusted for investment
performance. If you return a Contract during the first ten calendar
days after you receive it, we 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.
We will also make an adjustment for the amount of any annuity income
we paid before we received the Contract. If your free look period
ends on a non-business day, the next business day will be use d.
ONCE THE FREE LOOK PERIOD EXPIRES, YOU CANNOT RETURN THE CONTRACT FOR
A REFUND.
INVESTMENT ALLOCATION OF YOUR PURCHASE PAYMENT
The portion of your Purchase Payment you allocate to the
Subaccounts 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. If your
instructions are incomplete (e.g. unclear or percentages do not equal
100%), your payments will be allocated to the VIP Money Market
Portfolio until we receive your complete instructions. In these cases,
we will not be responsible for the results of unit value changes or
lost market opportunity.
TRADING AMONG VARIABLE SUBACCOUNTS
You may currently exchange amounts among Subaccounts as often
as you wish without charge. However, excessive exchange activity can
disrupt Portfolio management strategy and increase Portfolio expenses,
which are borne by everyone participating in the Portfolio regardless
of their exchange activity. Therefore, EFILI reserves the right to
limit the number of exchanges permitted, but not to fewer than six per
calendar year.
You tell us the percentage you want for your new allocation in each
Subaccount . Your allocation percentages must be in whole
numbers, not fractions. You may change the allocations among the
Subaccounts by writing or telephoning the Annuity Service
Center or on our Internet website.
(small solid bullet) TRA DING BY TELEPHONE OR INTERNET
EFILI reserves the right to change telephone or Internet exchange
provisions, or to eliminate them, and to limit or reject any telephone
or Internet exchange at any time. You may make up to a combined total
of eighteen telephone/Internet exchanges per calendar year. All
exchanges made on the same day count as one exchange. After this
total is reached, you will only be permitted to complete exchanges in
writing. M ultiple exchanges among the Subaccounts in a single
trading day count as one excha nge. We will not accept exchange
requests via fax or electronic mail.
We will not be responsible for any losses resulting from unauthorized
telephone or Internet exchanges if we follow reasonable procedures
designed to verify the identity of the caller or Internet user. We may
record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them and notify the
Annuity Service Center promptly of any discrepancies as we will not be
responsible for resulting losses due to unit value changes after 10
calendar days from the mailing of the report.
(small solid bullet) USE OF MARKET TIMING SERVICES
In some cases, we may sell Contracts 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 exchanges among the Subaccounts on the basis of
perceived market trends. Because the large exchange 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 Subaccounts may be subject
to modification if such rights are executed by a market timing firm or
similar third party authorized to initiate exchange transactions on
behalf of a Contract Owner(s). In modifying such rights, we may, among
other things, decline to accept (1) the exchange instructions of any
agent acting under a power of attorney on behalf of more than one
Contract Owner, or (2) the exchange instructions of individual
Contract Owners who have executed pre-authorized 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. We will impose such
restrictions only if we believe that doing so will prevent harm to
other Contract Owners.
(small solid bullet) EFFECTIVE DATE OF EXCHANGES AMONG VARI ABLE
SUBACCOU NTS
When you exchange among the Variable Subaccounts , we will
redeem shares of the appropriate Portfolios at their prices as of the
end of the current Valuation Period. Generally, any Subaccount
you exchange to is credited at the same time.
However, we may wait to credit the amount to a new Subaccount
until an Investment Option you exchange from becomes liquid. This will
happen only if (1) the Subaccount you exchange to invests in a
Portfolio that accrues dividends on a daily basis and requires Federal
funds before accepting a purchase order, and (2) the Subaccount
you exchange from is investing in an equity Portfolio in an illiquid
position due to substantial redemptions or exchanges that require it
to sell Portfolio securities in order to make funds available.
The Subaccount you exchange 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
a Subaccount for this reason, the amount you exchange will be
uninvested. After seven days the exchange will be made even if the
Investment Option you exchange from is not liquid.
(small solid bullet) IMPORTANT
The amount of the allocation in each Subaccount 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 we make 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. We will allocate the remainder
of your Purchase Payment to the Investment Options and/or apply it to
the purchase of fixed annuity income.
2. ADMINISTRATIVE CHARGES. Administrative charges compensate us 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. We deduct a daily asset charge
for our assumption of mortality and expense risks. Each day we deduct
an amount from the assets of each Investment Option at an effective
annual rate of 0.75%.
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
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 161.
ANNUITY INCOME DATES
We calculate the amount of your an nuity income on 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.
If an Annuity Income Date falls on a day that is not the last day of a
Valuation Period, the amount of annuity income will be determined
based on the value of your selected Investment Options at the close of
the Valuation Period. Annuity income will generally be sent at the end
of the Valuation Period immediately following the day on which the
amount is determined.
SIGNATURE GUARANTEE
A signature guarantee is designed to protect you and Empire Fidelity
Investments Life from fraud. Free look or disbursement requests,
must include a signature guarantee if any of the following situations
apply.
1. The requested amount is more than $ 100 ,000.
2. In any circumstances where we deem it necessary for your
protection.
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.
(small solid bullet) FIXED ANNUITY INCOME. Any portion of your
Purchase Payment allocated to fixed annuity income will always remain
allocated to fixed annuity income. 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 158.
(small solid bullet) VARIABLE ANNUITY INCOME. 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 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 158.
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.
(small solid bullet) COMBINATION OF FIXED AND VARIABLE ANNUITY INCOME.
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 158.
BENCHMARK RATE OF RETURN
When you purchase a Contract, we calculate an estimated first annuity
income amount, assuming that the Investment Options will earn the
Benchmark Rate of Return you choose. If the annualized Total Return of
the Investment Options is greater than the Benchmark Rate of Return
between the Contract Date and the first Annuity Income Date,
assuming you do not make any withdrawals, 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.
Assum ing you do not make any withdrawals, income will increase
from one Annuity Income Date to the next if the annualized Total
Return during that time is greater than the Benchmark Rate of Return
you choose, and will decrease if the annualized Total 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 (e) the selected Portfolios earn a constant 10%
gross investment return before fees and expens es (equal to a 7.90%
annualized Total Return after fees and expenses). Mo nthly 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INCOME ADVANTAGE
ANNUITY INCOME GRAPH
Current Expenses: 0.92%
Male, Age 65, Life w/ 10 years Updated 2/23/98
5% Benchmark 3.5% Benchmark
First Payment: $653.03 First Payment: $566.73
Net Returns Net Returns
Year -1.91% 5.00% 7.90% Year -1.91% 3.50% 7.90%
1 $651 $654 $656 1 $565 $568 $570
2 $608 $654 $674 2 $535 $568 $594
3 $568 $654 $693 3 $507 $568 $619
4 $530 $654 $712 4 $481 $568 $645
5 $495 $654 $731 5 $456 $568 $673
6 $463 $654 $752 6 $432 $568 $701
7 $432 $654 $772 7 $409 $568 $731
8 $404 $654 $794 8 $388 $568 $762
9 $377 $654 $816 9 $368 $568 $795
10 $353 $654 $838 10 $348 $568 $828
11 $329 $654 $861 11 $330 $568 $864
12 $308 $654 $885 12 $313 $568 $900
13 $287 $654 $909 13 $297 $568 $939
14 $268 $654 $935 14 $281 $568 $979
15 $251 $654 $960 15 $266 $568 $1,020
16 $234 $654 $987 16 $252 $568 $1,064
17 $219 $654 $1,014 17 $239 $568 $1,109
18 $204 $654 $1,042 18 $227 $568 $1,156
19 $191 $654 $1,071 19 $215 $568 $1,205
20 $178 $654 $1,101 20 $204 $568 $1,256
</TABLE>
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.
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 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.
ANNUITY INCOME INCLUDING WITHDRAWAL OPTIONS
If you have a Qualified Contract, you may elect the following
options only if a portion or all of your purchase payment is allocated
to the variable account. Withdrawals are not available for any
allocations to fixed income. The Withdrawal option feature may not be
available in your state.
SINGLE LIFE ANNUITY WITH WITHDRAWAL OPTION. We will provide
annuity income, beginning with the first Annuity Income Date, for as
long as you live unless you surrender your Con t ract. If you
die on or after the first Annuity Income Date and before the end of
the Withd r awal Period, we will provide any remaining
annui t y income to the beneficiary(ies) according to the terms
of the Contract.
JOINT AND SURVIVOR WITH FULL ANNUITY INCO M E TO THE SURVIVOR
WITH WITHDRAWAL OPTION. Assuming you do not surrender your Contract or
make withdrawals, we will provide full annuity income,
beginning with the first Annuity Income Date, while either y o u
or the Joint Annuitant is still liv i ng.
If either you or the Joint Annuitant dies 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 Withdrawal
option. 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 Withdrawal Period, as required by law, so that it is not
longer than the life expectancy of the survivor. This may result in a
shorter Withdrawal Period and a higher amount of annuity income. For
any allocations to fixed income, similar adjustments will be made to
the Guarantee Period, if any.
If you and the Joint Annuitant both die on or after the first
Annuity Income Date and before the end of the Withdrawal Period, we
will provide any remaining annuity income or Withdrawal Value to the
Beneficiary(ies) according to the terms of the Contract.
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 forty-five (45). You may
choose a Guarantee Period for annuity income options 1 through 4. If
you choose an income option with a Withdrawal Option, you cannot also
choose a guarantee period. 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.
(small solid bullet) ANNUITY INCOME TO BENEFICIARY. 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.
(small solid bullet) LUMP SUM PAYMENT. 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).
Any lump sum attributable to the fixed annuity portion of a Contract
will generally 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.
Any lump sum attributable to the variable annuity income portion of a
Contract will generally 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.
WITH DRAWAL PROVISIONS
If you have purchased a Qualified Contract with a withdrawal
option, you can withdraw amounts from the variable portion of your
Contract by writing to our Annuity Service Center. See HOW TO MAKE
WITHDRAWALS below.
You can not purchase a Qualified Contract with a withdrawal option
if your Contract provides only fixed annuity income. Also, you can not
elect a withdrawal option if you purchase a Non-qualified
Contract.
The amount you can withdraw will depend on when you make the
withdrawal, how much of your Purchase Payment you allocated to
variable annuity income and the investment experience of your
Contract. See WITHDRAWAL VALUE below.
The length of time you can make withdrawals is called the
Withdrawal Period or Liquidity Period. See WITHDRAWAL (LIQUIDITY)
PERIOD below.
Certain withdrawals will have the effect of ending your Contract,
i.e. you will receive no more annuity income. Other withdrawals may
shorten the Withdrawal Period. All withdrawals will reduce the amount
of variable annuity income. See EFFECT OF WITHDRAWALS
below.
HOW TO MAKE WITHDRAWALS
All requests for withdrawals must be in writing to our Annuity
Service Center. You may request to withdraw all of the Withdrawal
Value (full withdrawal) or a portion of the Withdrawal Value (partial
withdrawal). You may not make more than two partial withdrawals each
calendar year. Any partial withdrawal must be for at least $500. You
may not make any partial withdrawal that would reduce your variable
annuity income below $1,200 per year at the time of the
withdrawal.
WITHDRAWAL VALUE
The Withdrawal Value changes each Valuation Period. What follows is
an overview of how we determine the Withdrawal Value for each
Valuation Period. For a complete description of how the Withdrawal
Value is calculated, see WITHDRAWAL VALUE in the Statement of
Additional Information.
The Withdrawal Value for a Valuation Period is the sum of two
amounts, which we call Part A and Part B. On the day we issue your
contract, the total of Part A and Part B equals your Purchase Payment
less any federal, state or local taxes we deducted from your Purchase
Payment. The amount you can withdraw from your Contract decreases over
time, eventually becoming zero.
Part A is based on the portion of your Purchase Payment that
provides variable annuity income during the Withdrawal Period. Part B
is based on the portion of your Purchase Payment that provides
variable annuity income after the Withdrawal Period.
Part A changes (up or down) each Valuation Period based on the
investment experience of your Contract. Also, each withdrawal and each
annuity income payment reduces the value of Part A. Part A becomes
zero at the end of the Withdrawal Period and remains zero
thereafter.
Part B also changes (up or down) each Valuation Period based on the
investment experience of your Contract. Withdrawals (but not annuity
income payments) also reduce the value of Part B. Beginning one year
after your first Annuity Income Date, Part B reflects a percentage
which declines each day. The percentage declines at a rate of 25% per
year, so five years after your first Annuity Income Date Part B
becomes zero and remains zero thereafter.
The reductions in the values of Part A and Part B resulting from a
withdrawal are in proportion to their values just before the
withdrawal.
WITHDRAWAL (LIQUIDITY) PERIOD
When you purchase your Contract we set the Withdrawal Period to be
equal to the life expectancy of the Annuitant or Annuitants. Life
expectancy is determined in accordance with requirements published by
the Internal Revenue Service. It is always expressed in whole
numbers.
If no withdrawals are made from your Contract, then you or your
beneficiaries will receive variable annuity income for the entire
length of the Withdrawal Period. In this respect the Withdrawal Period
works like a Guarantee Period, i.e. variable annuity income would be
guaranteed to last for (1) the life or lives of the Annuitant(s) or
(2) the Withdrawal Period, whichever is longer. However, if you make
withdrawals, the Withdrawal Period may shorten or disappear, as
described below.
If all the Annuitants die before the end of the Withdrawal Period,
each 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 Annuity
Income Dates in the Withdrawal Period.
COMPARING WITHDRAWAL PERIOD TO GUARANTEE PERIOD
You may compare a Contract with a Withdrawal Period to one that
provides a Guarantee Period.
Under a Contract with a Withdrawal Period, variable annuity income
is guaranteed to last for (1) the life or lives of the Annuitant(s) or
(2) the Withdrawal Period, whichever is longer.
Under a Contract with a Guarantee Period, all annuity income (fixed
and variable) is guaranteed to last for (1) the life or lives of the
Annuitant(s) or (2) the Guarantee Period, whichever is longer.
Under a Contract with a Withdrawal Period, a withdrawal may cause
the Withdrawal Period to shorten or disappear.
Under a Contract with a Guarantee Period, withdrawals are not
possible, and the date on which the Guarantee Period will end will not
change after the Contract is issued.
EFFECT OF WITHDRAWALS
Withdrawals made within five years of the first annuity income date
will have different consequences from withdrawals made after the first
five years. Full withdrawals will have different consequences from
partial withdrawals.
YOU SHOULD THINK MORE CAREFULLY ABOUT MAKING A WITHDRAWAL THE
CLOSER YOU ARE TO THE FIFTH ANNIVERSARY OF YOUR FIRST ANNUITY INCOME
DATE. IN MANY CIRCUMSTANCES YOU WILL BE BETTER OFF WAITING UNTIL AFTER
THAT DATE TO MAKE A WITHDRAWAL. For example, if you buy a Contract
that provides only variable income, withdrawals made after the end of
the fifth year of annuity income would reduce your annuity income but
would not cause your annuity income to end. In the same Contract,
making a full withdrawal before the end of the fifth year would result
in the loss of all future annuity income and your Contract would end.
See the descriptions below to understand how withdrawals made during
your first five years of annuity income may have different effects
from withdrawals made later.
(small solid bullet) FULL WITHDRA WALS DURING FIRST FIVE YEARS
If all of your Purchase Payment is allocated to variable annuity
income and you withdraw all of the Withdrawal Value on or before the
fifth anniversary of your Contract's first Annuity Income Date, your
Contract will end and you will not receive any more annuity
income.
If your Purchase Payment is allocated part to variable annuity
income and part to fixed annuity income, and you withdraw all of the
Withdrawal Value on or before the fifth anniversary of your Contract's
first Annuity Income Date, you will not receive any more variable
annuity income. Fixed annuity income will continue in accordance with
the income option you selected.
(small solid bullet) PARTIAL WITHDRAWALS DURING FIRST FIVE
YEARS
If you withdraw part of the Withdrawal Value on or before the fifth
anniversary of your Contract's first Annuity Income Date, then the
amount withdrawn will be subtracted from the Withdrawal Value and all
remaining variable annuity income will be reduced, in the same ratio
that the amount withdrawn bears to the Withdrawal Value. A partial
withdrawal during the first five years will have no impact on the
length of the remainder of the Withdrawal Period.
(small solid bullet) FULL WITHDRAWALS AFTER FIRST FIVE
YEARS
If all of your Purchase Payment is allocated to variable annuity
income and you withdraw all of the Withdrawal Value after the fifth
anniversary of your Contract's first Annuity Income Date, you will no
longer have a Withdrawal Value, the Withdrawal Period will end, and
all remaining variable annuity income will be reduced.
(small solid bullet) PARTIAL WITHDRAWALS AFTER FIRST FIVE
YEARS
If you withdraw part of the Withdrawal Value after the fifth
anniversary of your Contract's first Annuity Income Date, the amount
withdrawn will be subtracted from the Withdrawal Value, all remaining
variable annuity income will be reduced, and the Withdrawal Period
will be reduced.
The Company will allocate partial withdrawals to the Investment
Options in which the Contract is then invested in the same proportion
as the value in each Investment Option bears to the Withdrawal Value
on the date of the partial withdrawal.
For both full and partial withdrawals made after the first five
years, the value of the reduced variable annuity income plus the
amount of the withdrawal will be equivalent to the value of the
variable annuity income just prior to the withdrawal. The Company will
determine equivalence using modified insurance industry mortality
tables.
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. If you choose the Withdrawal option, we will show your
Withdrawal Value at least once each calendar quarter.
You should verify the accuracy of your transaction confirmations
and monthly statements immediately after you receive them and notify
the Annuity Service Center promptly of any discrepancies as we will
not be responsible for resulting losses due to unit value changes
after 10 calendar days from the mailing of the report.
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, 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 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 adviser 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
The Contract may be used as an Individual Retirement Annuity under
Section 408(b) of the Internal Revenue Code. Section 408(b) of the
Code permits eligible individuals to contribute to an individual
retirement program known as an "Individual Retirement Annuity." You
should seek competent advice as to the tax consequences associated
with the use of a Contract as a Qualified Contract.
Because the Contract's minimum Purchase Payment is greater than the
maximum annual contribution permitted to an Individual Retirement
Annuity, a Qualified 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.
If the Contract is used as a Qualified 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 the case of a Contract with a Withdrawal Value that is issued as
an Individual Retirement Annuity, we believe that the annuity income
payments thereunder should satisfy the minimum distribution
requirements under section 401(a)(9) of the Code. However, it is
possible, though unlikely, that the IRS will determine that the
annuity income payments do not satisfy those requirements. In
addition, we do not know whether the withdrawal of all or a part of
the Withdrawal Value constitutes a minimum required distribution which
cannot be directly transferred to another IRA or rolled over. Due to
this uncertainty, we will not process direct transfers to another IRA
but will instead treat all withdrawals of the Withdrawal Value from
the Contract as distributions for tax reporting and withholding
purposes. Accordingly, we will report such withdrawals on a 1099R
form. Owners should consult a tax advisor before withdrawing an amount
with the intention of rolling it over to another IRA.
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).
(small solid bullet) IMPORTANT. This discussion of the Tax
Considerations assumes that the Contract will be treated as an annuity
contract 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
adviser 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 adviser 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) also has
(hav e) 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; and for a Contract that includes a
Withdrawal option, (e) the right to withdraw from the variable portion
of the Contract during the Withdrawal Period and the right to
surrender the variable portion of the Contract within five years from
the first annuity income date.
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 (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 .
The Beneficiary (or Beneficiaries) will receive any remaining
Withdrawal Period annuity income if neither you nor the Joint
Annuitant (if any) survives to the end of the Withdrawal Period.
Surviving Beneficiaries will receive equal shares unless you
specify otherwise. If (1) no Beneficiary survives you and the Joint
Annuitant (if any); and (2) the Withdrawal Period or guarantee period
(if any) 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 Withdrawal Period or guarantee period,
if any:
The Beneficiary may choose (a) to continue receiving annuity income
on each remaining Annuity Income Date, or (b) to receive the
Withdrawal Value plus the present value of fixed annuity income (if
any). If a Contract with a withdrawal option is within its first five
years after the first annuity income date, it will typically be more
advantageous for the Beneficiary to choose option (b). 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
equal to the rate used to determine annuity income payments. The
variable annuity income portion will be the Withdrawal Value.
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. 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 Fidelity 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,
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 Subaccounts available to you.
These Subaccounts will invest in investment portfolios that we find
suitable for the Contract.
EFILI also has the right to eliminate any Subaccount, to combine two
or more Investment Options, or substitute a new portfolio or fund for
the Portfolio in which a Subaccount 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.
TOTAL RETURN FOR A SUBACCOUNT
The Total Return reflects the investment performance of the
Subaccount, less all expenses and charges, for the Valuation Period.
EFILI determines the Total Return of a Subaccount 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.
(small solid bullet) 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.
(small solid bullet) A CUMULATIVE TOTAL RETURN reflects performance
over a stated period of time.
(small solid bullet) 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.
(small solid bullet) 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.
(small solid bullet) 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
We have prepared the following tables 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 two different
assumptions for a constant investment return before all expenses: 0%
and 12%. 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 Total Return during
that time is greater than the Benchmark Rate of Return you choose, and
will decrease if the annualized Total Return is less than the
Benchmark Rate of Return.
T wo tables follow. The first is based on a Contract without a
withdrawal provision an d the second is based on a Contract with a
withdrawal provision.
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 .96% 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INCOME ADVANTAGE ILLUSTRATION
ANNUITANT: John Doe PURCHASE DATE: June 5, 2000
SEX: Male FIRST INCOME DATE: July 15, 2000
DATE OF BIRTH: June 15, 1930 FREQUENCY OF INCOME: Monthly
INCOME OPTION: Single Life ANNUITY PURCHASE AMOUNT: $100,000
GUARANTEE PERIOD: 10 Years SOURCE OF FUNDS: Non-IRA
PURCHASE ALLOCATION: 100% Variable BENCHMARK RATE OF RETURN: 5.00%
</TABLE>
The purpose of this illustration is to show you how much your
future income payments could be given a hypothetical rate of return.
Your actual payments will depend on the performance of the investment
Portfolios you choose. You can expect your income payments to go up
and down and no minimum dollar amount of income is guaranteed.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
<MONTHLY> ANNUITY INCOME
PROJECTION
Hypothetical 0% Return* Hypothetical 12% Return*
YEAR AGE DATE INCOME PAYMENTS CUMULATIVE PAYMENTS INCOME PAYMENTS CUMULATIVE PAYMENTS
1 70 7/15/1999 $ 721 $ 721 $ 730 $ 730
2 71 7/15/2000 $ 673 $ 9,058 $ 763 $ 9,704
3 72 7/15/2001 $ 629 $ 16,846 $ 799 $ 19,095
4 73 7/15/2002 $ 588 $ 24,122 $ 836 $ 28,919
5 74 7/15/2003 $ 549 $ 30,919 $ 874 $ 39,199
6 75 7/15/2004 $ 513 $ 37,268 $ 915 $ 49,954
7 76 7/15/2005 $ 479 $ 43,200 $ 957 $ 61,207
8 77 7/15/2006 $ 447 $ 48,741 $ 1,002 $ 72,981
9 78 7/15/2007 $ 418 $ 53,918 $ 1,048 $ 85,300
10 79 7/15/2008 $ 391 $ 58,753 $ 1,096 $ 98,189
11 80 7/15/2009 $ 365 $ 63,271 $ 1,147 $ 111,674
12 81 7/15/2010 $ 341 $ 67,491 $ 1,200 $ 125,784
13 82 7/15/2011 $ 318 $ 71,434 $ 1,256 $ 140,547
14 83 7/15/2012 $ 297 $ 75,116 $ 1,314 $ 155,993
15 84 7/15/2013 $ 278 $ 78,557 $ 1,375 $ 172,154
16 85 7/15/2014 $ 260 $ 81,771 $ 1,438 $ 189,063
17 86 7/15/2015 $ 242 $ 84,774 $ 1,505 $ 206,755
18 87 7/15/2016 $ 227 $ 87,579 $ 1,575 $ 225,265
19 88 7/15/2017 $ 212 $ 90,199 $ 1,648 $ 244,633
20 89 7/15/2018 $ 198 $ 92,647 $ 1,724 $ 264,896
<MONTHLY> ANNUITY INCOME
PROJECTION
Hypothetical 0% Return* Hypothetical 12% Return*
YEAR AGE DATE INCOME PAYMENTS CUMULATIVE PAYMENTS INCOME PAYMENTS CUMULATIVE PAYMENTS
21 90 7/15/2019 $ 185 $ 94,934 $ 1,804 $ 286,098
22 91 7/15/2020 $ 173 $ 97,070 $ 1,887 $ 308,281
23 92 7/15/2021 $ 161 $ 99,065 $ 1,974 $ 331,490
24 93 7/15/2022 $ 151 $ 100,930 $ 2,066 $ 355,774
25 94 7/15/2023 $ 141 $ 102,671 $ 2,162 $ 381,182
26 95 7/15/2024 $ 131 $ 104,298 $ 2,262 $ 407,766
</TABLE>
* HYPOTHETICAL RETURNS ARE BEFORE ALL EXPENSES. THE CORRESPONDING
RETURNS AFTER EXPENSES ARE: -1.95% AND 9.82%.
$5,652.16 of your annuity income is tax-free each year until the
total amount of tax-free income equals the amount of the investment in
your contract.
If you allocate 100% of your Purchase Payment to fixed annuity
income, the amount of your fixed annuity income each month would be
$830.64.
net interest rate:-1.95% net interest rate: 9.82%
age (x-axis) monthly income (y-axis) monthly income (y-axis)
70 $721 $730
71 $673 $763
72 $629 $799
73 $588 $836
74 $549 $874
75 $513 $915
76 $479 $957
77 $447 $1,002
78 $418 $1,048
79 $391 $1,096
80 $365 $1,147
81 $341 $1,200
82 $318 $1,256
83 $297 $1,314
84 $278 $1,375
85 $260 $1,438
86 $242 $1,505
87 $227 $1,575
88 $212 $1,648
89 $198 $1,724
90 $185 $1,804
91 $173 $1,887
92 $161 $1,974
93 $151 $2,066
94 $141 $2,162
95 $131 $2,262
<TABLE>
<CAPTION>
<S> <C> <C>
LONGEVITY INFORMATIONA
Assuming you're in good 50% chance of living to age 25% chance of living to age
health and age <70>, there's
a
86 92
</TABLE>
A SOURCE: 2000 INDIVIDUAL ANNUITANT MORTALITY TABLE.
This illustration is valid for money received by June 5, 2000.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INCOME ADVANTAGE ILLUSTRATION
ANNUITANT: John Doe PURCHASE DATE: June 5, 2000
SEX: Male FIRST INCOME DATE: July 15, 2000
DATE OF BIRTH: June 15, 1930 FREQUENCY OF INCOME: Monthly
INCOME OPTION: Single Life ANNUITY PURCHASE AMOUNT: $100,000
PURCHASE ALLOCATION: 100% Variable SOURCE OF FUNDS: IRA/Qualified
BENCHMARK RATE OF RETURN: 5.00%
WITHDRAWAL OPTION: Yes
</TABLE>
The purpose of this illustration is to show you how much your
future income payments could be given a hypothetical rate of return.
Your actual payments will depend on the performance of the investment
Portfolios you choose. You can expect payments to go up and down and
no minimum dollar amount of income is guaranteed.
<MONTHLY> ANNUITY INCOME
PROJECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Hypothetical 0% Return* Hypothetical 12% Return*
YEAR AGE DATE INCOME PAYMENTS CUMULATIVE PAYMENTS WITHDRAWAL VALUE INCOME PAYMENTS
70 6/5/2000 $ 100,000
1 70 7/15/00 $ 653 $ 653 $ 99,789 $ 662
2 71 7/15/01 $ 610 $ 8,211 $ 90,352 $ 692
3 72 7/15/02 $ 570 $ 15,272 $ 78,593 $ 724
4 73 7/15/03 $ 533 $ 21,868 $ 67,579 $ 758
5 74 7/15/04 $ 498 $ 28,029 $ 57,256 $ 793
6 75 7/15/05 $ 465 $ 33,786 $ 47,596 $ 829
7 76 7/15/06 $ 434 $ 39,163 $ 41,320 $ 868
8 77 7/15/07 $ 406 $ 44,186 $ 35,532 $ 908
9 78 7/15/08 $ 379 $ 48,879 $ 30,183 $ 950
10 79 7/15/09 $ 354 $ 53,263 $ 25,244 $ 994
11 80 7/15/10 $ 331 $ 57,358 $ 20,686 $ 1,040
12 81 7/15/11 $ 309 $ 61,184 $ 16,483 $ 1,088
13 82 7/15/12 $ 289 $ 64,758 $ 12,612 $ 1,139
14 83 7/15/13 $ 270 $ 68,097 $ 9,048 $ 1,191
15 84 7/15/14 $ 252 $ 71,216 $ 5,771 $ 1,246
16 85 7/15/15 $ 235 $ 74,130 $ 2,762 $ 1,304
17 86 7/15/16 $ 220 $ 76,852 $ 0 $ 1,364
18 87 7/15/17 $ 205 $ 79,394 $ 0 $ 1,428
19 88 7/15/18 $ 192 $ 81,770 $ 0 $ 1,494
20 89 7/15/19 $ 179 $ 83,989 $ 0 $ 1,563
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR CUMULATIVE PAYMENTS WITHDRAWAL VALUE
$ 100,000
1 $ 662 $ 101,036
2 $ 8,798 $ 102,459
3 $ 17,310 $ 99,820
4 $ 26,217 $ 96,130
5 $ 35,536 $ 91,219
6 $ 45,286 $ 84,929
7 $ 55,487 $ 82,578
8 $ 66,161 $ 79,531
9 $ 77,328 $ 75,666
10 $ 88,013 $ 70,877
11 $ 101,238 $ 65,050
12 $ 114,029 $ 58,055
13 $ 127,413 $ 49,749
14 $ 141,415 $ 39,975
15 $ 156,066 $ 28,558
16 $ 171,395 $ 15,304
17 $ 187,433 $ 0
18 $ 204,214 $ 0
19 $ 221,771 $ 0
20 $ 240,141 $ 0
</TABLE>
<MONTHLY> ANNUITY INCOME
PROJECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Hypothetical 0% Return* Hypothetical 12% Return*
YEAR AGE DATE INCOME PAYMENTS CUMULATIVE PAYMENTS WITHDRAWAL VALUE INCOME PAYMENTS
21 90 7/15/2020 $ 167 $ 86,062 $ 0 $ 1,635
22 91 7/15/2021 $ 156 $ 87,999 $ 0 $ 1,711
23 92 7/15/2022 $ 146 $ 89,808 $ 0 $ 1,790
24 93 7/15/2023 $ 136 $ 91,498 $ 0 $ 1,873
25 94 7/15/2024 $ 128 $ 93,077 $ 0 $ 1,960
26 95 7/15/2025 $ 119 $ 94,552 $ 0 $ 2,050
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR CUMULATIVE PAYMENTS WITHDRAWAL VALUE
21 $ 259,362 $ 0
22 $ 279,472 $ 0
23 $ 300,512 $ 0
24 $ 322,527 $ 0
25 $ 345,560 $ 0
26 $ 369,660 $ 0
</TABLE>
* HYPOTHETICAL RETURNS ARE BEFORE ALL EXPENSES. THE CORRESPONDING
RETURNS AFTER EXPENSES ARE: -1.95% AND 9.82%.
net interest rate: -1.91% net interest rate: 9.86%
age (x-axis) monthly income(y-axis) (monthly income y-axis)
70 $653 661.5305647
71 $610 692.1493746
72 $570 724.18537
73 $533 757.704145
74 $498 792.7743298
75 $465 829.4677311
76 $434 867.8594792
77 $406 908.0281816
78 $379 950.0560844
79 $354 994.0292402
80 $331 1040.037685
81 $309 1088.175621
82 $289 1138.541612
83 $270 1191.238783
84 $252 1246.375032
85 $235 1304.063251
86 $220 1364.421557
87 $205 1427.573536
88 $192 1493.648492
89 $179 1562.781714
90 $167 1635.114753
91 $156 1710.795712
92 $146 1789.979549
93 $136 1872.828395
94 $128 1959.511883
95 $119 2050.207498
96 $0 0
97 $0 0
98 $0 0
99 $0 0
100 $0 0
<TABLE>
<CAPTION>
<S> <C> <C>
LONGEVITY INFORMATIONA
Assuming you're in good 50% chance of living to age 25% chance of living to age
health and age <70>, there's
a
86 92
</TABLE>
A SOURCE: 2000 INDIVIDUAL ANNUITANT MORTALITY TABLE.
This illustration is valid for money received by June 5, 2000.
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
Investment Company Act of 1940 File No. 811-06388
THIS PAGE INTENTIONALLY LEFT BLANK
E FIAII-pro-0400
1.739027.100
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 age 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. 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
15. Distributions are taxed generally as ordinary income under Federal
income tax laws.
16. The tax treatment of single sum distributions under Section 402(d)
of the Code is not applicable to distributions from IRAs.
17. 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
18. 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.
FINANCIAL INFORMATION
19. 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.
20. 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. 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, 2000
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 Variable Annuity Account A (the "Variable
Account"). You may obtain a copy of the Prospectus dated April 30,
2000, without charge by calling 1-800-544-2442.
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 5
General Information 5
Performance 5
Safekeeping of Variable 12
Account Assets
Distribution of the Contracts 12
State Regulation 12
Legal Matters 12
Registration Statement 12
Independent Accountants 12
Financial Statements 12
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; and charitable giving.
In addition, Empire 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:
(solid bullet) compare the differences between tax deferred and
taxable investments;
(solid bullet) discuss factors to consider when purchasing the
contract;
(solid bullet) discuss the effects of probate when transferring the
contract to heirs;
(solid bullet) discuss traditional sources of retirement income and
products which may be used to supplement that income;
(solid bullet) 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;
(solid bullet) illustrate and compare the effects additional payments
have on a contract;
(solid bullet) discuss strategies of reducing risk through
diversification of purchase payments and providing hypothetical
investment mixes;
(solid bullet) discuss past returns of different classes of
investments, based on data supplied through various sources such as
Ibbotson Associates of Chicago, Illinois and;
(solid bullet) assist policyholders with inquiries regarding their
annuity.
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.
Investments by the Subaccounts in securities of foreign issuers may
result in a foreign investment tax credit which we will claim on our
federal income tax filings. Also, we receive fees from the funds'
Advisers for administrative services we provide.
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 and other
indices; (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 December 31, 1999 . 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, from the date each Portfolio
began in the Separate Account, and, for Portfolios in existence
for five years or more, for five years, through December 31, 1999.
For any Portfolio in existence ten years or more, figures are shown
for a ten year period rather than for the life of the Portfolio.
The returns reflect the risk and administrative charge (1% on an
annual basis).
Table 1: Average Annual Total Return for Period Ending on December
31, 1999 if contract issued at commencement of Portfolio (which in
most cases it was not).
Investment Option Start Date One Year Five Years Life of Fund
Fidelity
Asset Manager 9/6/89 9.98% 14.47% 12.02%*
Money Market 4/1/82 4.12% 4.42% 4.23%*
Investment Grade Bond 12/5/88 (2.04)% 6.22% 6.12%*
Equity-Income 10/9/86 5.27% 17.42% 13.35%*
Growth 10/9/86 36.06% 28.44% 18.74%*
High Income 9/19/85 7.07% 9.75% 11.31%*
Overseas 1/28/87 41.20% 16.20% 10.31%*
Index 500 8/27/92 19.31% 26.88% 19.86%
Asset Manager: Growth 1/3/95 14.11% N/A 18.97%
Contrafund 1/3/95 23.01% N/A 26.46%
Growth Opportunities 1/3/95 3.23% N/A 20.30%
Balanced 1/3/95 3.50% N/A 12.37%
Growth & Income 12/31/96 8.08% N/A 21.33%
Mid Cap 12/28/98 47.55% N/A 51.59%
Morgan Stanley
Emerging Markets Equity 10/1/96 93.73% N/A 11.36%
Emerging Markets Debt 6/16/97 28.08% N/A (3.77)%
Global Equity 1/2/97 3.06% N/A 12.90%
International Magnum 1/2/97 23.94% N/A 12.85%
Strong
Opportunity Fund II 5/8/92 33.56% 22.12% 19.80%
Mid Cap Growth Fund II 12/31/96 87.98% N/A 45.44%
Warburg Pincus
International Equity 6/30/95 51.90% N/A 13.67%
Small Company Growth 6/30/95 67.39% N/A 23.49%
Global Post-Venture Capital1 9/30/96 61.87% N/A 21.12%
PBHG
Growth II 5/1/97 96.22% N/A 35.38%
Select Value2 10/28/97 7.80% N/A 21.65%
Select 20 9/25/97 98.61% N/A 67.01%
Small Cap Value 10/28/97 14.78% N/A 13.52%
Technology & Communications 5/1/97 231.05% N/A 75.41%
* 10 Years
Average Annual Total Return for Period Ending on 12/31/99 from date
Portfolio Began in Separate Account.
Investment Option Date When Portfolio Began In Life
Separate Account
Fidelity
Asset Manager 6/3/92 11.65%
Money Market 6/3/92 3.82%
Investment Grade Bond 6/3/92 5.28%
Equity-Income 6/3/92 15.53%
Growth 6/3/92 22.11%
High Income 6/3/92 9.33%
Overseas 6/3/92 12.26%
Index 500 11/2/92 20.03%
Asset Manager: Growth 1/9/95 19.06%
Contrafund 1/9/95 26.64%
Growth Opportunities 1/27/97 17.63%
Balanced 1/27/97 13.38%
Growth & Income 1/27/97 21.24%
Morgan Stanley
Emerging Markets Equity 11/24/97 19.80%
Emerging Markets Debt 11/24/97 (2.35)%
Global Equity 11/24/97 8.48%
International Magnum 11/24/97 14.02%
Strong
Opportunity Fund II 11/24/97 22.16%
Mid Cap Growth Fund II 11/24/97 53.31%
Warburg Pincus
International Equity 11/24/97 23.79%
Small Company Growth 11/24/97 26.55%
Global Post-Venture Capital1 11/24/97 30.50%
PBHG
Growth II 11/24/97 43.41%
Select Value2 11/24/97 21.72%
Select 20 11/24/97 77.22%
Small Cap Value 11/24/97 13.90%
Technology & Communications 11/24/97 99.64%
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. One year
cumulative total returns are identical to the one year average annual
total returns in Table 1.
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, 199 9 . The returns reflect the
risk and administrative charge (1% on an annual basis).
Table 2: Cumulative Total Return for Period Ending on 12/31/99.
Investment Option Start Date One Year Five Years Life of Fund
Fidelity
Asset Manager 9/6/89 9.98% 96.56% 211.26%*
Money Market 4/1/82 4.12% 24.15% 51.31%*
Investment Grade Bond 12/5/88 (2.04)% 35.23% 81.06%*
Equity-Income 10/9/86 5.27% 123.25% 249.98%*
Growth 10/9/86 36.06% 249.55% 457.04%*
High Income 9/19/85 7.07% 59.23% 191.98%*
Overseas 1/28/87 41.20% 111.84% 166.87%*
Index 500 8/27/92 19.31% 228.83% 278.62%
Asset Manager: Growth 1/3/95 14.11% N/A 138.07%
Contrafund 1/3/95 23.01% N/A 223.02%
Growth Opportunities 1/3/95 3.23% N/A 151.73%
Balanced 1/3/95 3.50% N/A 79.08%
Growth & Income 12/31/96 8.08% N/A 78.59%
Mid Cap 12/28/98 47.55% N/A 52.11%
Morgan Stanley
Emerging Markets Debt 6/16/97 28.08% N/A (9.31)%
Emerging Markets Equity 10/1/96 93.73% N/A 41.84%
Global Equity 1/2/97 3.06% N/A 43.83%
International Magnum 1/2/97 23.94% N/A 43.64%
PBHG
Growth II 5/1/97 96.22% N/A 124.40%
Technology &
Communications 5/1/97 231.05% N/A 347.94%
Select Value2 10/28/97 7.80% N/A 53.17%
Small Cap Value 10/28/97 14.78% N/A 31.77%
Select 20 9/25/97 98.61% N/A 219.64%
Strong
Mid Cap Growth Fund II 12/31/96 87.98% N/A 207.67%
Opportunity Fund II 5/8/92 33.56% 171.61% 298.47%
Warburg Pincus
International Equity 6/30/95 51.90% N/A 78.17%
Small Company Growth 6/30/95 67.39% N/A 158.77%
Global Post-Venture Capital1 9/30/96 61.87% N/A 86.45%
* 10 Year Return shown. (The Separate Account inception date is
7/22/87.)
Cumulative Total Return From Date When Portfolio Began in Separate
Account.
Investment Option Date When Portfolio Began In Life
Separate Account
Fidelity
Asset Manager 6/3/92 130.53%
Money Market 6/3/92 32.87%
Investment Grade Bond 6/3/92 47.68%
Equity-Income 6/3/92 198.78%
Growth 6/3/92 354.61%
High Income 6/3/92 96.65%
Overseas 6/3/92 140.28%
Index 500 11/2/92 269.83%
Asset Manager: Growth 1/9/95 138.31%
Contrafund 1/9/95 223.99%
Growth Opportunities 1/27/97 60.83%
Balanced 1/27/97 44.39%
Growth & Income 1/27/97 75.70%
Morgan Stanley
Emerging Markets Debt 11/24/97 (4.88)%
Emerging Markets Equity 11/24/97 46.17%
Global Equity 11/24/97 18.66%
International Magnum 11/24/97 31.74%
PBHG
Growth II 11/24/97 113.32%
Technology & Communications 11/24/97 327.50%
Select Value2 11/24/97 51.14%
Small Cap Value 11/24/97 31.45%
Select 20 11/24/97 232.84%
Strong
Mid Cap Growth Fund II 11/24/97 145.43%
Opportunity Fund II 11/24/97 52.30%
Warburg Pincus
International Equity 11/24/97 56.59%
Small Company Growth 11/24/97 64.01%
Global Post-Venture Capital1 11/24/97 74.96%
1 Previously called Warburg Pincus Post-Venture Capital.
2 Previously called PBHG Large Cap Value.
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/ 1999 , the Money Market
Investment Option had a current yield of 4.6 8 % and an effective
yield of 4. 79 %.
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/ 1999 was 5.72 % for the Investment
Grade Bond Investment Option, 9. 91 % for the High Income
Investment Option and 13.21 % for Emerging Markets Debt
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, General Counsel of EFILI. Jorden Burt Boros Cicchetti
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 balance sheets of Empire Fidelity Investments Life Insurance
Company as of December 31, 199 9 and 199 8 , and the
related statements of income and comprehensive income, of
stockholder's equity, and of cash flows for each of the three years in
the period ended December 31, 199 9 , and the statement of assets
and liabilities of the Empire Fidelity Investments Variable Annuity
Account A as of December 31, 199 9 , and the related statements
of operations and of changes in net assets for the years ended
December 31, 199 9 and 199 8 included in this registration
statement have been included herein in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given 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.
INCOME ADVANTAGE
STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 2000
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 Variable Annuity Account A (the "Variable
Account"). You may obtain a copy of the Prospectus dated April 30,
2000, without charge by calling 1-800-544-2442.
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 91
General Information 91
Performance 92
Safekeeping of Variable 99
Account Assets
Distribution of the Contracts 99
State Regulation 99
Legal Matters 99
Registration Statement 99
Independent Accountants 100
Financial Statements 100
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; and charitable giving.
In addition, Empire 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:
(solid bullet) compare the differences between tax deferred and
taxable investments;
(solid bullet) discuss factors to consider when purchasing the
contract;
(solid bullet) discuss the effects of probate when transferring the
contract to heirs;
(solid bullet) discuss traditional sources of retirement income and
products which may be used to supplement that income;
(solid bullet) 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;
(solid bullet) illustrate and compare the effects additional
payments and/or withdrawals have on a contract;
(solid bullet) discuss strategies of reducing risk through
diversification of purchase payments and providing hypothetical
investment mixes;
(solid bullet) discuss past returns of different classes of
investments, based on data supplied through various sources such as
Ibbotson Associates of Chicago, Illinois and;
(solid bullet) assist policyholders with inquiries regarding their
annuity.
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.
Investments by the Subaccounts in securities of foreign issuers may
result in a foreign investment tax credit which we will claim on our
federal income tax filings. Also, we receive fees from the funds'
Advisers for administrative services we provide.
(THIS SECTION ONLY APPLIES TO VARIABLE ANNUITY INCOME)
WITHDRAWAL (LIQUIDITY) VALUE
If you elect annuity income with a withdrawal option the following
provisions are applicable.
The amount you can withdraw from this Contract at the close of a
Valuation Period is called the Withdrawal Value. There are two parts
to your Withdrawal Value, Part A and Part B. The sum of Part A and
Part B equals your Withdrawal Value.
(small solid bullet) Part A
Part A is based on the portion of your Purchase Payment that
provides variable annuity income during the Withdrawal Period. On the
Contract Date, Part A equals this portion of the Purchase Payment less
any deductions made from this portion for state, federal or local
taxes.
At the end of each subsequent Valuation Period, a new value for
Part A is computed, as follows:
(1) Start with Part A at the close of the prior Valuation
Period.
(2) With respect to each variable Subaccount to which your Contract
is allocated, multiply (1) by the Net Investment Factor for the
applicable Subaccount. See Net Investment Factor on page __. Then add
the values for each variable Subaccount together.
(3) If an Annuity Income Date occurs during the Valuation Period,
subtract from (2) an amount equal to the amount of the variable
annuity income payment for that Annuity Income Date.
(4) Subtract from (3) an amount attributable to any withdrawals
made during the Valuation Period. To determine the amount subtracted,
multiply the amount of the withdrawal by a fraction, the numerator of
which is the value of Part A at the close of the current Valuation
Period and the denominator of which is the sum of Part A and Part B at
the close of the current Valuation Period, without regard to the
withdrawal during the Valuation Period.
Part A becomes zero at the end of your Withdrawal Period and
remains zero thereafter.
(small solid bullet) Part B
Part B is based on the remainder of your variable Purchase Payment
and reflects the portion of your Purchase Payment that provides
variable annuity income after the Withdrawal Period. On the Contract
Date, Part B equals this portion of the Purchase Payment less any
deductions made from this portion for state, federal or local
taxes.
At the end of each subsequent Valuation Period, a new value for
Part B is computed, as follows:
(1) Start with Part B at the close of the prior Valuation
Period.
(2) With respect to each variable Subaccount to which your Contract
is allocated, multiply (1) by the Net Investment Factor for the
applicable Subaccount. Then add the values for each variable
Subaccount together.
(3) Subtract from (2) an amount attributable to any withdrawals
made during the Valuation Period. To determine the amount subtracted,
multiply the amount of the withdrawal by a fraction, the numerator of
which is the value of Part B at the close of the current Valuation
Period and the denominator of which is the sum of Part A and Part B at
the close of the current Valuation Period, without regard to the
withdrawal during the Valuation Period.
(4) Multiply (3) by a fraction, the numerator of which is the
percentage factor at the end of the current Valuation Period, and the
denominator of which is the percentage factor at the end of the prior
Valuation Period.
The percentage factor is 100% until one year after your first
Annuity Income Date. The percentage factor then declines daily at a
rate of 25% each year, becoming zero on the fifth anniversary of your
first Annuity Income Date and remaining at zero thereafter. Thus Part
B becomes zero on the fifth anniversary of your first Annuity Income
Date and remains zero thereafter.
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 and other
indices ; (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 December 31, 1999 . 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 , from the date each Portfolio
began in the Separate Account , and, for Portfolios in existence
for five years or more, for five years, through December 31,
199 9 . For any Portfolio in existence ten years or more,
figures are shown for a ten year period. The returns reflect the
risk and administrative charge (1% on an annual basis).
Table 1: Average Annual Total Return for Period Ending on December
31,1999 if contract issued at commencement of Portfolio (which in
most cases it was not).
Investment Option Start Date One Year Five Years Life of Fund
Fidelity
Asset Manager 9/6/89 9.98% 14.47% 12.02%*
Money Market 4/1/82 4.12% 4.42% 4.23%*
Investment Grade Bond 12/5/88 (2.04)% 6.22% 6.12%*
Equity-Income 10/9/86 5.27% 17.42% 13.35%*
Growth 10/9/86 36.06% 28.44% 18.74%*
High Income 9/19/85 7.07% 9.75% 11.31%*
Overseas 1/28/87 41.20% 16.20% 10.31%*
Index 500 8/27/92 19.31% 26.88% 19.86%
Asset Manager: Growth 1/3/95 14.11% N/A 18.97%
Contrafund 1/3/95 23.01% N/A 26.46%
Growth Opportunities 1/3/95 3.23% N/A 20.30%
Balanced 1/3/95 3.50% N/A 12.37%
Growth & Income 12/31/96 8.08% N/A 21.33%
Mid Cap 12/28/98 47.55% N/A 51.59%
Morgan Stanley
Emerging Markets Equity 10/1/96 93.73% N/A 11.36%
Emerging Markets Debt 6/16/97 28.08% N/A (3.77)%
Global Equity 1/2/97 3.06% N/A 12.90%
International Magnum 1/2/97 23.94% N/A 12.85%
Strong
Opportunity Fund II 5/8/92 33.56% 22.12% 19.80%
Mid Cap Growth Fund II 12/31/96 87.98% N/A 45.44%
Warburg Pincus
International Equity 6/30/95 51.90% N/A 13.67%
Small Company Growth 6/30/95 67.39% N/A 23.49%
Global Post-Venture Capital1 9/30/96 61.87% N/A 21.12%
PBHG
Growth II 5/1/97 96.22% N/A 35.38%
Select Value2 10/28/97 7.80% N/A 21.65%
Select 20 9/25/97 98.61% N/A 67.01%
Small Cap Value 10/28/97 14.78% N/A 13.52%
Technology & Communications 5/1/97 231.05% N/A 75.41%
* 10 Years
Average Annual Total Return for Period Ending on 12/31/99 from date
Portfolio Began in Separate Account.
Investment Option Date When Portfolio Began in Life
Separate Account
Fidelity
Asset Manager 6/3/92 11.65%
Money Market 6/3/92 3.82%
Investment Grade Bond 6/3/92 5.28%
Equity-Income 6/3/92 15.53%
Growth 6/3/92 22.11%
High Income 6/3/92 9.33%
Overseas 6/3/92 12.26%
Index 500 11/2/92 20.03%
Asset Manager: Growth 1/9/95 19.06%
Contrafund 1/9/95 26.64%
Growth Opportunities 1/27/97 17.63%
Balanced 1/27/97 13.38%
Growth & Income 1/27/97 21.24%
Morgan Stanley
Emerging Markets Equity 11/24/97 19.80%
Emerging Markets Debt 11/24/97 (2.35)%
Global Equity 11/24/97 8.48%
International Magnum 11/24/97 14.02%
Strong
Opportunity Fund II 11/24/97 22.16%
Mid Cap Growth Fund II 11/24/97 53.31%
Warburg Pincus
International Equity 11/24/97 23.79%
Small Company Growth 11/24/97 26.55%
Global Post-Venture Capital1 11/24/97 30.50%
PBHG
Growth II 11/24/97 43.41%
Select Value2 11/24/97 21.72%
Select 20 11/24/97 77.22%
Small Cap Value 11/24/97 13.90%
Technology & Communications 11/24/97 99.64%
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 for stated periods from the date the
Portfolios began operations , and from the date each Portfolio began
in the separate account (if less than 10 years), through December
31, 199 9 . The returns reflect the risk and administrative
charge (1% on an annual basis).
Table 2: Cumulative Total Return for Period Ending on 12/31/99.
Investment Option Start Date One Year Five Years Life of Fund
Fidelity
Asset Manager 9/6/89 9.98% 96.56% 211.26%*
Money Market 4/1/82 4.12% 24.15% 51.31%*
Investment Grade Bond 12/5/88 (2.04)% 35.23% 81.06%*
Equity-Income 10/9/86 5.27% 123.25% 249.98%*
Growth 10/9/86 36.06% 249.55% 457.04%*
High Income 9/19/85 7.07% 59.23% 191.98%*
Overseas 1/28/87 41.20% 111.84% 166.87%*
Index 500 8/27/92 19.31% 228.83% 278.62%
Asset Manager: Growth 1/3/95 14.11% N/A 138.07%
Contrafund 1/3/95 23.01% N/A 223.02%
Growth Opportunities 1/3/95 3.23% N/A 151.73%
Balanced 1/3/95 3.50% N/A 79.08%
Growth & Income 12/31/96 8.08% N/A 78.59%
Mid Cap 12/28/98 47.55% N/A 52.11%
Morgan Stanley
Emerging Markets Debt 6/16/97 28.08% N/A (9.31)%
Emerging Markets Equity 10/1/96 93.73% N/A 41.84%
Global Equity 1/2/97 3.06% N/A 43.83%
International Magnum 1/2/97 23.94% N/A 43.64%
PBHG
Growth II 5/1/97 96.22% N/A 124.40%
Technology &
Communications 5/1/97 231.05% N/A 347.94%
Select Value2 10/28/97 7.80% N/A 53.17%
Small Cap Value 10/28/97 14.78% N/A 31.77%
Select 20 9/25/97 98.61% N/A 219.64%
Strong
Mid Cap Growth Fund II 12/31/96 87.98% N/A 207.67%
Opportunity Fund II 5/8/92 33.56% 171.61% 298.47%
Warburg Pincus
International Equity 6/30/95 51.90% N/A 78.17%
Small Company Growth 6/30/95 67.39% N/A 158.77%
Global Post-Venture Capital1 9/30/96 61.87% N/A 86.45%
* 10 Year Return shown. (The Separate Account inception date is
7/22/87.)
Cumulative Total Return From Date When Portfolio Began in Separate
Account.
Investment Option Date When Portfolio Began In Life
Separate Account
Fidelity
Asset Manager 6/3/92 130.53%
Money Market 6/3/92 32.87%
Investment Grade Bond 6/3/92 47.68%
Equity-Income 6/3/92 198.78%
Growth 6/3/92 354.61%
High Income 6/3/92 96.65%
Overseas 6/3/92 140.28%
Index 500 11/2/92 269.83%
Asset Manager: Growth 1/9/95 138.31%
Contrafund 1/9/95 223.99%
Growth Opportunities 1/27/97 60.83%
Balanced 1/27/97 44.39%
Growth & Income 1/27/97 75.70%
Morgan Stanley
Emerging Markets Debt 11/24/97 (4.88)%
Emerging Markets Equity 11/24/97 46.17%
Global Equity 11/24/97 18.66%
International Magnum 11/24/97 31.74%
PBHG
Growth II 11/24/97 113.32%
Technology & Communications 11/24/97 327.50%
Select Value2 11/24/97 51.14%
Small Cap Value 11/24/97 31.45%
Select 20 11/24/97 232.84%
Strong
Mid Cap Growth Fund II 11/24/97 145.43%
Opportunity Fund II 11/24/97 52.30%
Warburg Pincus
International Equity 11/24/97 56.59%
Small Company Growth 11/24/97 64.01%
Global Post-Venture Capital1 11/24/97 74.96%
1 Previously called Warburg Pincus Post-Venture Capital.
2 Previously called PBHG Large Cap Value.
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/ 1999 , the Money Market
Investment Option had a current yield of 4. 68 % and an effective
yield of 4. 79 %.
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/ 1999 was 5.72 % for the Investment
Grade Bond Investment Option, 9. 91 % for the High Income
Investment Option and 13.21 % for Emerging Markets Debt
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, General Counsel of EFILI. Jorden Burt Boros Cicchetti
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 balance sheets of Empire Fidelity Investments Life Insurance
Company as of December 31, 199 9 and 199 8 , and the
related statements of income and comprehensive income, of
stockholder's equity, and of cash flows for each of the three years in
the period ended December 31, 199 9 , and the statement of assets
and liabilities of the Empire Fidelity Investments Variable Annuity
Account A as of December 31, 199 9 , and the related statements
of operations and of changes in net assets for the years ended
December 31, 199 9 and 199 8 included in this registration
statement have been included herein in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the
authority of that firm as experts in accounting an d 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, 1999, 1998 AND 1997
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(A Wholly-Owned Ultimate Subsidiary of FMR Corp.)
FINANCIAL STATEMENTS
for the years ended December 31, 1999, 1998 and 1997
Page(s)
Report of Independent 1
Accountants
Balance Sheets 2
Statements of Income and 3
Comprehensive Income
Statements of Stockholder's 4
Equity
Statements of Cash Flows 5
Notes to Financial Statements 6-14
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Empire Fidelity Investments Life Insurance Company:
In our opinion, the accompanying balance sheets and the related
statements of income and comprehensive income, of stockholder's equity
and of cash flows present fairly, in all material respects, the
financial position of Empire Fidelity Investments Life Insurance
Company (a wholly-owned ultimate subsidiary of FMR Corp.) at December
31, 1999 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31,
1999, in conformity with accounting principles generally accepted in
the United States. 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 of these statements in accordance with auditing
standards generally accepted in the United States, which 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, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
January 25, 2000
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(A Wholly-Owned Ultimate Subsidiary of FMR Corp.)
BALANCE SHEETS
(in thousands, except share data)
December 31, 1999 and 1998
ASSETS 1999 1998
Debt securities available for $21,076 $19,386
sale
Cash and cash equivalents 1,434 2,363
Accrued investment income 409 331
Deferred policy acquisition 18,981 16,253
costs
Other assets 119 36
Separate account assets 1,387,038 1,018,128
Total assets
$1,429,057 $1,056,497
LIABILITIES
Future contract and policy $4,801 $4,919
benefits
Deferred tax liability 3,357 3,508
Payable to parent and 2,152 1,903
affiliates
Other liabilities and accrued 300 200
expenses
Separate account liabilities 1,387,037 1,017,950
Total liabilities
1,397,647 1,028,480
Commitments and contingencies
(Note 8)
STOCKHOLDER'S EQUITY
Common stock, par value $10
per share -
200,000 shares authorized,
issued and
outstanding 2,000 2,000
Additional paid-in capital 12,500 12,500
Accumulated other comprehensive
(loss) income (356) 395
Retained earnings 17,266 13,122
Total stockholder's equity 31,410 28,017
Total liabilities and $1,429,057 $1,056,497
stockholder's equity
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.)
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands)
for the years ended December 31, 1999, 1998
and 1997
1999 1998 1997
Revenues:
Fees charged to contractholders $9,668 $7,461 $6,933
Net investment income 1,120 1,007 1,131
Net realized gains 15 205 123
Premium revenue 152 19 -
10,955 8,692 8,187
Benefits and expenses:
Contract and policy benefits 543 220 357
and expenses
Underwriting, acquisition and 3,747 1,187 3,997
insurance
expenses (1) 4,290 1,407 4,354
Income before provision for 6,665 7,285 3,833
income taxes
Provision for income taxes 2,521 2,686 1,452
Net income 4,144 4,599 2,381
Other comprehensive (loss)
income, before
tax:
Unrealized (losses) gains on
securities:
Unrealized holding (losses) (1,141) 369 285
gains arising
during the period
Less: reclassification
adjustment for gains
included
in net income (15) (205) (123)
Benefit (provision) for
income taxes related
to items of
other comprehensive (loss) 405 (58) (57)
income
Other comprehensive (loss) (751) 106 105
income, net of tax
Comprehensive income $3,393 $4,705 $2,486
(1) Includes affiliated party
transactions
(Note 6)
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.)
STATEMENTS OF STOCKHOLDER'S EQUITY
(in thousands)
For the years ended
December 31, 1999,
1998 and 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulated
Additional Other Total
Common Paid-In Comprehensive Retained Stockholder's
Stock Capital (Loss) Income Earnings Equity
Balance at
December 31, 1996 $2,000 $11,500 $184 $6,142 $19,826
Comprehensive income:
Net income 2,381 2,381
Other 105 105
comprehensive
income
Balance at 2,000 11,500 289 8,523 22,312
December 31, 1997
Capital
contribution
from parent 1,000 1,000
Comprehensive income:
Net income 4,599 4,599
Other 106 106
comprehensive
income
Balance at 2,000 12,500 395 13,122 28,017
Decemebr 31, 1998
Comprehensive income:
Net income 4,144 4,144
Other (751) (751)
comprehensive loss
Balance at
December 31, 1999 $2,000 $12,500 $(356) $17,266 $31,410
The accompanying
notes
are an integral
part of
the financial statements.
</TABLE>
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(A Wholly-Owned Ultimate Subsidiary of FMR Corp.)
STATEMENTS OF CASH FLOWS
(in thousands)
for the years ended December 31, 1999,
1998 and 1997
1999 1998 1997
Cash flows from operating
activities:
Net income $4,144 $4,599 $2,381
Adjustments to reconcile net
income to net
cash provided by
operating activities:
Amortization of bond discount 171 124 116
and premium
Realized loss on investments (15) (205) (123)
Depreciation 4 6 8
Change in deferred taxes 253 787 (172)
Addition to deferred policy
acquisition
costs, net of amortization (2,728) (3,293) (371)
Change in assets and
liabilities:
Accrued investment income (78) (6) (60)
Transfer from (to) separate 177 (17) 89
accounts
Future contract and policy (118) (2,264) 126
benefits
Payable to parent and 249 882 477
affiliates, net
Other assets and liabilities 14 86 (153)
Net cash provided by operating 2,073 699 2,318
activities
Cash flows from investing
activities:
Purchase of investments (9,913) (9,043) (15,707)
Proceeds from disposal of 6,911 9,078 13,078
investments
Net cash (used in) provided by
investing activities (3,002) 35 (2,629)
Cash flows from financing
activities:
Capital contribution from - 1,000 -
parent
Net cash provided by financing
activities - 1,000 -
Net (decrease) increase in cash
and cash equivalents (929) 1,734 (311)
Cash and cash equivalents:
Beginning of year 2,363 629 940
End of year $1,434 $2,363 $629
The accompanying notes are an
integral
part of the financial statements.
1. Organization:
Empire Fidelity Investments Life Insurance Company (the "Company") is
a wholly-owned subsidiary of Fidelity Investments 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 contracts 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, the Variable Insurance Products Fund II, the
Variable Insurance Products Fund III, the Morgan Stanley Dean Witter
Universal Funds, the PBHG Insurance Series Funds, the Strong Variable
Insurance Funds and the Warburg Pincus Trust Funds, which are reported
at the net asset value of such portfolios.
In 1998, the Company began offering a term life insurance product
with level premium paying periods of five, ten, fifteen and twenty
years.
2. Summary of Significant Accounting Policies:
Basis of Presentation
The accompanying financial statements of the Company have been
prepared on the basis of generally accepted accounting principles,
which vary in certain respects from reporting practices prescribed or
permitted by state insurance regulatory authorities.
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 reported as other
comprehensive income. The discount or premium on debt securities,
excluding loan-backed bonds and structured securities, is amortized
using the effective interest method. Amortization of loan-backed bonds
and structured securities includes anticipated prepayments over the
estimated economic life of the security. When actual prepayments
differ significantly from anticipated prepayments, the effective yield
is recalculated to reflect actual payments to date and anticipated
future payments and any resulting adjustment is included in investment
income.
Investment income is recognized on the accrual basis. Realized gains
or losses on investments sold are determined by the specific
identification method. Realized gains or losses on the Company's funds
retained in the separate account are reflected in income.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with an
original maturity date of three months or less to be cash equivalents.
Cash and cash equivalents represent amounts in demand deposit accounts
and money market mutual funds and are reported at fair value. Money
market mutual funds used to fund long-term investments and to meet
operating cash requirements were $1,387,000 and $2,358,000, at
December 31, 1999 and 1998, respectively.
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 or decrease in the amount of liabilities related to the
separate account. Differences between separate account assets and
separate account liabilities represent Company funds due to (from) the
separate accounts.
Revenue Recognition
Fees charged to contractholders include mortality and expense risk,
administrative charges and surrender charges for variable annuity
contractholders. Premium revenues for term life insurance policies are
recognized as revenue over the premium-paying period.
Future Contract and Policy Benefits
Future contract and policy benefits are liabilities for fixed annuity
and life products. Such liabilities are established in amounts
adequate to meet the estimated future obligations of policies in
force. Future contract benefits for annuity products are computed
using interest rates ranging from 3.5% to 6.9% and approximate the
contractholder's account balance. The liabilities for future policy
benefits for traditional life insurance products are computed using
the natural reserve method and are based upon estimates as to future
investment yield, mortality and withdrawals that include provisions
for adverse deviation.
Deferred Policy Acquisition Costs
The costs of acquiring new business, principally first-year
commissions paid to Fidelity Insurance Agency, Inc. in accordance with
a contractual agreement as described in Note 6 and certain expenses
for traditional life policy issue and underwriting, have been
deferred. These acquisition costs are being amortized in proportion to
the present value of expected future gross profits or expected future
policy premiums.
Income Taxes
The Company is included in the consolidated federal income 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 current enacted tax rates.
Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, "Disclosures
about Fair Value of Financial Instruments," requires disclosure of
fair value information about certain financial instruments (insurance
contracts, real estate, goodwill and taxes are excluded) for which it
is practicable to estimate such values, whether or not these
instruments are included in the balance sheet. The fair values and
methods used to estimate fair values of financial instruments are
disclosed throughout the notes to financial statements.
Use of Estimates
The preparation of the financial statements in accordance with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the related amounts and
disclosures in the financial statements. Actual results could differ
from those estimates.
New Accounting Pronouncements
In 1999, the Company adopted Statement of Position 97-3, "Accounting
by Insurance and Other Enterprises for Insurance-Related Assessments"
(SOP No. 97-3). SOP No. 97-3 provides guidance on when a liability
should be recognized for guaranty fund and other assessments and how
to measure the liability. The adoption of SOP No. 97-3 did not have a
material impact on the results of operations or financial position.
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (Statement No. 133),
which establishes accounting and reporting standards for derivative
instruments. Statement No. 133 requires that an entity recognize all
derivatives as either assets or liabilities at fair value in the
statement of financial position. This statement is effective for
fiscal years beginning after June 15, 2000. The Company is currently
assessing the impact of adopting Statement No. 133.
3. Investments:
The components of net investment income were as follows:
Years ended December 31,
1999 1998 1997
(in thousands)
Debt securities $1,284 $1,182 $1,187
Cash and cash equivalents 107 39 24
Investment in separate account 10 20 56
Total investment income 1,401 1,241 1,267
Investment expenses 281 234 136
Net investment income $1,120 $1,007 $1,131
Gross realized gains and losses from the sale of debt securities were
as follows:
Years ended December 31,
1999 1998 1997
(in thousands)
Gross realized gains $47 $207 $131
Gross realized losses $32 $ 2 $ 8
The amortized cost and estimated fair value of debt securities, by
type of issuer, were as follows:
December 31, 1999
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
(in thousands)
U.S. Treasury
Securities $ 5,126 $62 $(133) $ 5,055
Corporate 15,474 1 (468) 15,007
securities
Loan-backed bonds
and
structured
securities 1,023 - (9) 1,014
Total debt securities $21,623 $63 $(610) $21,076
December 31, 1998
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
(in thousands)
U.S. Treasury
securities $ 6,092 $401 $ (7) $ 6,486
Corporate 11,531 194 (8) 11,717
securities
Loan-backed bonds
and
structured
securities 1,153 30 - 1,183
Total debt securities $18,776 $625 $(15) $19,386
The amortized cost and estimated fair value of debt securities at
December 31, 1999, 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.
Estimated
Amortized Fair
Cost Value
(in thousands)
Due in 1 year or less $ 436 $ 436
Due after 1 year through 5 13,491 13,266
years
Due after 5 years through 10 5,944 5,705
years
Due after 10 years 729 655
Subtotal 20,600 20,062
Loan-backed bonds and 1,023 1,014
structured securities
$21,623 $21,076
All debt securities are investment grade and there are no significant
concentrations by issuer or by industry, other than U.S. Treasury
securities.
4. Income Taxes:
The components of the provision for income taxes attributable to
operations were as follows:
Years ended December 31,
1999 1998 1997
(in thousands)
Current $2,268 $1,899 $1,624
Deferred 253 787 (172)
Provision for income taxes $2,521 $2,686 $1,452
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,
1999 1998
(in thousands)
Deferred income tax
liabilities:
Deferred policy acquisition $4,281 $3,800
costs
Unrealized (loss) gain on
securities available for sale (191) 214
Contractholder reserves (740) (517)
Other, net 7 11
Net deferred tax liability $3,357 $3,508
The Company paid FILI federal income taxes of $1,618,000, $1,287,000,
and $1,136,000 in 1999, 1998 and 1997, respectively, related to the
Company's separate-company basis net operating results for the year.
Payables to FILI of $382,000 and $392,000 have been recorded in 1999
and 1998, respectively. Intercompany tax balances are settled within
30 days of the actual tax payments. State taxes of $371,000, $67,000,
and $234,000 were paid in 1999, 1998, and 1997, respectively. State
income tax payable of $85,000 was recorded in 1998.
The statute of limitations on the Company's federal income tax
returns is open for the taxable years ended December 31, 1994 and
thereafter. A refund to claim for additional dividends received
deduction and foreign tax credit has been filed with the Internal
Revenue Service for the tax years ended 1994 through 1998 and is under
review. In management's opinion, adequate tax liabilities have been
established for all years.
The effective tax rates approximate the statutory federal income tax
rates for the years ended 1999, 1998 and 1997.
5. 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. Under the Insurance Code of the State of New York, the
Company may pay dividends only from profits arising from the business.
The Superintendent of Insurance must be notified 30 days prior to any
declaration of the dividend.
Net income and capital stock and surplus as determined in accordance
with statutory accounting practices were as follows:
Years ended December 31,
1999 1998 1997
(in thousands)
Statutory net income $2,277 $1,933 $1,707
Statutory capital stock
and surplus $16,541 $14,276 $11,348
6. Affiliated Company Transactions:
The Company's insurance contracts are distributed through Fidelity
Brokerage Services, Inc., Fidelity Insurance Agency, Inc. (FIA), and
Fidelity Investments Institutional Services Company, Inc., all of
which are affiliated with FMR Corp. The Company has an agreement with
FIA under which the Company pays FIA sales compensation of 3% of
payments received. The Company also pays FIA 37.5% of term life
insurance first-year premiums. The Company compensated FIA in the
amount of $4,361,000, $2,888,000 and $2,978,000 in 1999, 1998 and
1997, respectively.
The Company has administrative services agreements with FILI and FMR
Corp. and its subsidiaries whereby certain administrative and special
services are provided for the Company. The Company paid FILI and FMR
Corp. and its subsidiaries $1,080,000, $961,000 and $683,000 in 1999,
1998 and 1997, 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 $28,000, $24,000 and $20,000 were
charged to the Company in 1999, 1998 and 1997, 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 $72,000, $74,000 and $63,000 in 1999, 1998
and 1997, respectively.
The Company participates in various FMR Corp. stock-based
compensatory plans. The compensation is based on the change in the net
asset value of FMR Corp. common stock, as defined. The aggregate
expenses related to these plans charged to the Company were $69,000
and $18,000 in 1999 and 1998, respectively.
7. Underwriting, Acquisition and Insurance Expenses:
Underwriting, acquisition and insurance expenses were as follows:
Years ended December 31,
1999 1998 1997
(in thousands)
Commissions, gross $4,361 $2,888 $2,978
Capitalization of deferred
policy acquisition costs (4,462) (2,903) (2,978)
Amortization of deferred
policy
acquisition costs 1,734 (390) 2,607
Taxes, licenses and fees 24 41 31
General insurance expenses 2,090 1,551 1,359
$3,747 $1,187 $3,997
Amortization of deferred policy acquisition costs is adjusted
periodically when estimates of future gross profits are revised to
reflect actual experience. In 1999, 1998 and 1997, the Company
adjusted amortization by $101,000, $(1,095,000) and $1,850,000,
respectively, to reflect actual experience for investment performance,
persistency and inflation assumptions. This adjustment has been
reflected in amortization expense.
8. Commitment and Contingencies:
Reinsurance
The Company reinsures certain of its life insurance products risks
with other companies. The Company retains a maximum coverage per
individual life of $25,000 plus 30% of the excess over $25,000; the
maximum initial retention not to exceed $100,000.
The Company has entered into agreements to reinsure certain guarantee
provisions and mortality losses on its annuity contracts. Premiums and
deposits ceded under these reinsurance contracts were not material to
the financial statements.
The Company is contingently liable for claims reinsured that the
assuming company is unable to pay.
Litigation
The Company is, from time to time, involved in various legal actions
concerning policy benefits and certain other matters. Those actions
are considered by the Company in estimating policy reserves and other
liabilities. The Company believes that the resolution of those actions
should not have a material adverse effect on stockholder's equity.
STATEMENT OF ASSETS AND LIABILITIES
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
ASSETS DECEMBER 31, 1999
Investments at current market
value:
Variable Insurance Products
Fund (VIP)
Money Market Portfolio - $ 73,675,888
73,675,888 shares (cost
$73,675,888)
High Income Portfolio - 21,011,435
1,857,775 shares (cost
$23,135,717)
Equity-Income Portfolio - 150,855,334
5,867,574 shares (cost
$120,343,187)
Growth Portfolio - 214,015,765
3,896,154 shares (cost
$141,276,984)
Overseas Portfolio - 35,103,688
1,279,289 shares (cost
$24,960,242)
Variable Insurance Products
Fund II (VIP II)
Investment Grade Bond 18,180,446
Portfolio - 1,495,102 shares
(cost $18,987,875)
Asset Manager Portfolio - 96,167,149
5,150,892 shares (cost
$81,423,921)
Index 500 Portfolio - 133,604,577
798,068 shares (cost
$95,383,210)
Asset Manager: Growth 34,851,182
Portfolio - 1,896,147 shares
(cost $28,952,843)
Contrafund Portfolio - 207,986,592
7,135,046 shares (cost
$127,154,236)
Variable Insurance Products
Fund III (VIP III)
Balanced Portfolio - 10,732,414
670,776 shares (cost
$10,420,411)
Growth & Income Portfolio - 66,659,614
3,853,157 shares (cost
$56,415,076)
Growth Opportunities 34,516,975
Portfolio - 1,491,014 shares
(cost $29,660,954)
Morgan Stanley Dean Witter
Universal Funds (MSDWUF)
Emerging Markets Equity 5,621,270
Portfolio - 404,117 shares
(cost $4,392,090)
Emerging Markets Debt 294,588
Portfolio - 42,632 shares
(cost $373,882)
Global Equity Portfolio - 1,719,496
133,501 shares (cost
$1,775,999)
International Magnum 1,140,269
Portfolio - 82,093 shares
(cost $1,025,884)
PBHG Insurance Series Funds
(PBHG)
Growth II Portfolio - 12,550,555
544,493 shares (cost
$9,705,856)
Small Cap Value Portfolio - 2,083,706
154,807 shares (cost
$1,872,958)
Large Cap Value Portfolio - 3,627,059
238,779 shares (cost
$3,557,541)
Technology & Communications 155,805,105
Portfolio - 3,386,331 shares
(cost $84,660,190)
Select 20 Portfolio - 71,540,974
2,187,797 shares (cost
$37,494,622)
Strong Variable Insurance
Funds (SVIF)
Discovery Fund II Portfolio 283,975
- - - 24,954 shares (cost
$304,153)
Mid Cap Growth Fund II 22,331,219
Portfolio - 735,305 shares
(cost $16,850,066)
Opportunity Fund II 5,527,257
Portfolio - 212,669 shares
(cost $4,824,528)
Warburg Pincus Trust (WPT)
Small Company Growth 4,294,261
Portfolio - 163,903 shares
(cost $3,578,144)
International Equity 1,957,653
Portfolio - 117,225 shares
(cost $1,727,785)
Post-Venture Capital 899,556
Portfolio - 46,706 shares
(cost $663,121)
Total Assets $ 1,387,038,002
NET ASSETS COMPRISED OF:
Variable Annuity Contracts $ 1,323,139,333
Annuity Reserves 63,898,151
Retained in Variable Account 518
by Empire Fidelity
Investments Life Insurance
Company
NET ASSETS $ 1,387,038,002
STATEMENT OF OPERATIONS
For the years ended December 31, 1999 and 1998
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP - MONEY MARKET VIP - HIGH INCOME
12/31/99 12/31/98 12/31/99 12/31/98
INCOME:
Dividends $ 3,357,223 $ 2,645,742 $ 2,099,050 $ 1,889,480
EXPENSES:
Mortality risk, expense risk 539,298 403,367 184,513 217,487
and administrative charges
Net investment income (loss) 2,817,925 2,242,375 1,914,537 1,671,993
Realized gain (loss) on sale 0 0 25,945 357,137
of fund shares
Realized gain distributions 0 0 78,469 1,200,608
Unrealized appreciation 0 0 (358,076) (4,611,108)
(depreciation)
Net increase (decrease) in $ 2,817,925 $ 2,242,375 $ 1,660,875 $ (1,381,370)
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
VIP - EQUITY-INCOME VIP - GROWTH VIP - OVERSEAS
12/31/99 12/31/98 12/31/99 12/31/98 12/31/99
INCOME:
Dividends $ 2,502,500 $ 2,627,503 $ 247,409 $ 474,706 $ 374,181
EXPENSES:
Mortality risk, expense
risk 1,370,374 1,545,117 1,380,231 866,799 208,952
and administrative charges
Net investment income
(loss) 1,132,126 1,082,386 (1,132,822) (392,093) 165,229
Realized gain (loss) on
sale 18,298,450 13,591,971 8,907,460 5,631,524 1,095,549
of fund shares
Realized gain
distributions 5,531,843 9,350,819 15,555,825 12,417,303 603,518
Unrealized appreciation (16,419,983) (6,201,694) 31,480,768 17,537,413 7,830,754
(depreciation)
Net increase (decrease) in $ 8,542,436 $ 17,823,482 $ 54,811,231 $ 35,194,147 $ 9,695,050
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
12/31/98
INCOME:
Dividends $ 474,801
EXPENSES:
Mortality risk, expense risk 215,683
and administrative charges
Net investment income (loss) 259,118
Realized gain (loss) on sale 1,010,697
of fund shares
Realized gain distributions 1,399,412
Unrealized appreciation (181,229)
(depreciation)
Net increase (decrease) in $ 2,487,998
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP II - INVESTMENT GRADE VIP II - ASSET MANAGER
BOND
12/31/99 12/31/98 12/31/99 12/31/98
INCOME:
Dividends $ 912,986 $ 486,031 $ 3,153,859 $ 2,869,728
EXPENSES:
Mortality risk, expense risk 168,113 113,320 772,222 757,524
and administrative charges
Net investment income (loss) 744,873 372,711 2,381,637 2,112,204
Realized gain (loss) on sale (66,066) 246,114 2,706,295 2,157,446
of fund shares
Realized gain distributions 286,426 57,665 3,994,889 8,609,183
Unrealized appreciation (1,395,292) 349,622 63,475 (655,336)
(depreciation)
Net increase (decrease) in $ (430,059) $ 1,026,112 $ 9,146,296 $ 12,223,497
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP II - INDEX 500 VIP II - ASSET MANAGER:
GROWTH
12/31/99 12/31/98 12/31/99 12/31/98
INCOME:
Dividends $ 1,093,942 $ 1,020,047 $ 786,181 $ 655,208
EXPENSES:
Mortality risk, expense risk 1,010,291 797,686 273,874 263,271
and administrative charges
Net investment income (loss) 83,651 222,361 512,307 391,937
Realized gain (loss) on sale 9,310,383 10,983,929 2,178,418 2,050,502
of fund shares
Realized gain distributions 742,318 2,362,610 1,303,909 3,064,065
Unrealized appreciation 12,109,896 9,112,387 515,712 (667,729)
(depreciation)
Net increase (decrease) in $ 22,246,248 $ 22,681,287 $ 4,510,346 $ 4,838,775
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
VIP II - CONTRAFUND
12/31/99 12/31/98
INCOME:
Dividends $ 840,467 $ 921,708
EXPENSES:
Mortality risk, expense risk 1,544,696 1,187,967
and administrative charges
Net investment income (loss) (704,229) (266,259)
Realized gain (loss) on sale 12,991,790 7,420,537
of fund shares
Realized gain distributions 6,163,422 6,781,142
Unrealized appreciation 21,310,986 23,314,910
(depreciation)
Net increase (decrease) in $ 39,761,969 $ 37,250,330
net assets from operations
</TABLE>
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP III - BALANCED VIP III - GROWTH &
INCOME
12/31/99 12/31/98 12/31/99 12/31/98
INCOME:
Dividends $ 203,035 $ 118,737 $ 439,671 $ 0
EXPENSES:
Mortality risk, expense risk 87,047 53,635 609,954 378,860
and administrative charges
Net investment income (loss) 115,988 65,102 (170,283) (378,860)
Realized gain (loss) on 426,821 450,249 8,090,973 1,665,467
sale of fund shares
Realized gain distributions 235,959 181,404 879,341 176,254
Unrealized appreciation (430,871) 373,537 (3,185,603) 10,346,320
(depreciation)
Net increase (decrease) in $ 347,897 $ 1,070,292 $ 5,614,428 $ 11,809,181
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP III - GROWTH MSDWUF - EMERGING
OPPORTUNITIES MARKETS EQUITY
12/31/99 12/31/98 12/31/99 12/31/98
INCOME:
Dividends $ 439,197 $ 380,494 $ 1,184 $ 2,945
EXPENSES:
Mortality risk, expense risk 338,457 318,261 21,750 2,837
and administrative charges
Net investment income (loss) 100,740 62,233 (20,566) 108
Realized gain (loss) on 4,726,198 1,816,418 298,832 8,643
sale of fund shares
Realized gain distributions 821,107 1,322,669 0 0
Unrealized appreciation (4,333,559) 4,981,718 1,328,959 (98,190)
(depreciation)
Net increase (decrease) in $ 1,314,486 $ 8,183,038 $ 1,607,225 $ (89,439)
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MSDWUF - EMERGING
MARKETS DEBT
12/31/99 12/31/98
INCOME:
Dividends $ 37,429 $ 28,061
EXPENSES:
Mortality risk, expense risk 2,247 1,787
and administrative charges
Net investment income (loss) 35,182 26,274
Realized gain (loss) on 1,909 (5,315)
sale of fund shares
Realized gain distributions 0 0
Unrealized appreciation 25,241 (92,451)
(depreciation)
Net increase (decrease) in $ 62,332 $ (71,492)
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MSDWUF - GLOBAL MSDWUF -
EQUITY INTERNATIONAL MAGNUM
12/31/99 12/31/98 12/31/99 12/31/98
INCOME:
Dividends $ 19,414 $ 13,192 $ 7,862 $ 5,184
EXPENSES:
Mortality risk, expense risk 15,017 10,698 6,650 6,541
and administrative charges
Net investment income (loss) 4,397 2,494 1,212 (1,357)
Realized gain (loss) on 45,162 61,905 (18,076) 48,096
sale of fund shares
Realized gain distributions 76,125 12,573 4,075 3,219
Unrealized appreciation (79,017) 25,498 209,399 (89,038)
(depreciation)
Net increase (decrease) in $ 46,667 $ 102,470 $ 196,610 $ (39,080)
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PBHG - GROWTH II PBHG - SMALL CAP VALUE
12/31/99 12/31/98 12/31/99 12/31/98
INCOME:
Dividends $ 0 $ 0 $ 0 $ 523
EXPENSES:
Mortality risk, expense risk 21,104 1,850 18,810 17,910
and administrative charges
Net investment income (loss) (21,104) (1,850) (18,810) (17,387)
Realized gain (loss) on 508,570 18,137 114,494 100,408
sale of fund shares
Realized gain distributions 0 0 0 3,159
Unrealized appreciation 2,830,966 13,190 181,282 20,879
(depreciation)
Net increase (decrease) in $ 3,318,432 $ 29,477 $ 276,966 $ 107,059
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
PBHG - LARGE CAP VALUE
12/31/99 12/31/98
INCOME:
Dividends $ 116 $ 5,924
EXPENSES:
Mortality risk, expense risk 31,217 7,069
and administrative charges
Net investment income (loss) (31,101) (1,145)
Realized gain (loss) on 393,569 128,101
sale of fund shares
Realized gain distributions 99,112 12,521
Unrealized appreciation (165,273) 232,358
(depreciation)
Net increase (decrease) in $ 296,307 $ 371,835
net assets from operations
</TABLE>
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
PBHG - TECHNOLOGY & PBHG - SELECT 20
COMMUNICATIONS
INCOME:
12/31/99 12/31/98 12/31/99 12/31/98
Dividends $ 0 $ 180 $ 0 $ 280
EXPENSES:
Mortality risk, expense 299,125 9,793 323,793 77,525
risk and adminis- trative
charges
Net investment income (loss) (299,125) (9,613) (323,793) (77,245)
Realized gain (loss) on sale 2,304,654 60,345 4,619,284 837,116
of fund shares
Realized gain distributions 0 0 0 0
Unrealized appreciation 70,720,773 424,975 29,220,248 4,809,171
(depreciation)
Net increase (decrease) in $ 72,726,302 $ 475,707 $ 33,515,739 $ 5,569,042
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SVIF - DISCOVERY FUND II SVIF - MID CAP GROWTH
FUND II
INCOME:
12/31/99 12/31/98 12/31/99 12/31/98
Dividends $ 0 $ 0 $ 0 $ 3
EXPENSES:
Mortality risk, expense 1,954 1,778 49,188 4,437
risk and adminis- trative
charges
Net investment income (loss) (1,954) (1,778) (49,188) (4,434)
Realized gain (loss) on sale 1,681 2,413 523,446 21,237
of fund shares
Realized gain distributions 35,470 3,035 2,833 0
Unrealized appreciation (21,180) 2,341 5,370,251 112,638
(depreciation)
Net increase (decrease) in $ 14,017 $ 6,011 $ 5,847,342 $ 129,441
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SVIF - OPPORTUNITY FUND
II
INCOME:
12/31/99 12/31/98
Dividends $ 0 $ 7,009
EXPENSES:
Mortality risk, expense 34,153 17,954
risk and adminis- trative
charges
Net investment income (loss) (34,153) (10,945)
Realized gain (loss) on sale 130,265 (23,495)
of fund shares
Realized gain distributions 373,791 207,970
Unrealized appreciation 773,031 (72,627)
(depreciation)
Net increase (decrease) in $ 1,242,934 $ 100,903
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
WPT - SMALL COMPANY WPT - INTERNATIONAL
GROWTH EQUITY
INCOME: 12/31/99 12/31/98 12/31/99 12/31/98
Dividends $ 0 $ 0 $ 10,903 $ 1,849
EXPENSES:
Mortality risk, expense 10,500 6,748 3,259 2,742
risk and adminis- trative
charges
Net investment income (loss) (10,500) (6,748) 7,644 (893)
Realized gain (loss) on sale 164,299 24,269 25,821 21,892
of fund shares
Realized gain distributions 78,799 0 0 0
Unrealized appreciation 764,971 (56,918) 265,565 (33,271)
(depreciation)
Net increase (decrease) in $ 997,569 $ (39,397) $ 299,030 $ (12,272)
net assets from operations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
WPT - POST-VENTURE TOTAL
CAPITAL
INCOME: 12/31/99 12/31/98 12/31/99 12/31/98
Dividends $ 0 $ 0 $ 16,526,609 $ 14,629,335
EXPENSES:
Mortality risk, expense 4,567 2,989 9,331,356 7,291,635
risk and adminis- trative
charges
Net investment income (loss) (4,567) (2,989) 7,195,253 7,337,700
Realized gain (loss) on sale 87,468 21,703 77,893,594 48,707,446
of fund shares
Realized gain distributions 0 0 36,867,231 47,165,611
Unrealized appreciation 259,899 (24,571) 158,873,322 58,872,795
(depreciation)
Net increase (decrease) in $ 342,800 $ (5,857) $ 280,829,400 $ 162,083,552
net assets from operations
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1999 and 1998
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP - MONEY MARKET VIP - HIGH INCOME
12/31/99 12/31/98 12/31/99 12/31/98
Net investment income (loss) $ 2,817,925 $ 2,242,375 $ 1,914,537 $ 1,671,993
Net realized gain (loss) on 0 0 104,414 1,557,745
investments
Unrealized appreciation 0 0 (358,076) (4,611,108)
(depreciation)
Net increase (decrease) in 2,817,925 2,242,375 1,660,875 (1,381,370)
net assets from operations
Payments received from 37,167,034 24,824,193 1,489,749 3,641,195
contract owners
Transfers between (16,492,270) (2,346,439) (6,617,202) (2,096,518)
sub-accounts and the fixed
account, net
Transfers for contract (10,517,625) (4,418,522) (1,006,484) (945,611)
benefits and terminations
Other transfers (to) from (11,196) (7,606) 2,610 (24,287)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 10,145,943 18,051,626 (6,131,327) 574,779
net assets from contract
transactions
Retained in (returned from) (111,001) 5,829 (4,360) 6
Variable Annuity Account A,
net
Total increase (decrease) in 12,852,867 20,299,830 (4,474,812) (806,585)
net assets
Net assets at beginning of year 60,823,021 40,523,191 25,486,247 26,292,832
Net assets at end of year $ 73,675,888 $ 60,823,021 $ 21,011,435 $ 25,486,247
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
VIP - EQUITY-INCOME VIP - GROWTH VIP - OVERSEAS
12/31/99 12/31/98 12/31/99 12/31/98 12/31/99
Net investment income
(loss) $ 1,132,126 $ 1,082,386 $ (1,132,822) $ (392,093) $ 165,229
Net realized gain (loss)
on 23,830,293 22,942,790 24,463,285 18,048,827 1,699,067
investments
Unrealized appreciation (16,419,983) (6,201,694) 31,480,768 17,537,413 7,830,754
(depreciation)
Net increase (decrease) in 8,542,436 17,823,482 54,811,231 35,194,147 9,695,050
net assets from operations
Payments received from 4,284,765 6,551,149 14,741,790 3,512,294 1,131,618
contract owners
Transfers between (32,793,233) (29,985,166) 21,083,332 (1,463,015) (519,781)
sub-accounts and the fixed
account, net
Transfers for contract (6,589,324) (6,382,415) (8,198,054) (2,742,013) (839,044)
benefits and terminations
Other transfers (to) from 35,179 (5,258) (7,105) (48,790) (616)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in (35,062,613) (29,821,690) 27,619,963 (741,524) (227,823)
net assets from contract
transactions
Retained in (returned from) (6,709) 1,014 (8,646) 2,670 (5,413)
Variable Annuity Account A,
net
Total increase (decrease) in (26,526,886) (11,997,194) 82,422,548 34,455,293 9,461,814
net assets
Net assets at beginning of
year 177,382,220 189,379,414 131,593,217 97,137,924 25,641,874
Net assets at end of year $ 150,855,334 $ 177,382,220 $ 214,015,765 $ 131,593,217 $ 35,103,688
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
12/31/98
Net investment income (loss) $ 259,118
Net realized gain (loss) on 2,410,109
investments
Unrealized appreciation (181,229)
(depreciation)
Net increase (decrease) in 2,487,998
net assets from operations
Payments received from 830,995
contract owners
Transfers between (1,993,797)
sub-accounts and the fixed
account, net
Transfers for contract (755,511)
benefits and terminations
Other transfers (to) from (1,561)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in (1,919,874)
net assets from contract
transactions
Retained in (returned from) 654
Variable Annuity Account A,
net
Total increase (decrease) in 568,778
net assets
Net assets at beginning of year 25,073,096
Net assets at end of year $ 25,641,874
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP II - INVESTMENT GRADE VIP II - ASSET MANAGER
BOND
12/31/99 12/31/98 12/31/99 12/31/98
Net investment income (loss) $ 744,873 $ 372,711 $ 2,381,637 $ 2,112,204
Net realized gain (loss) on 220,360 303,779 6,701,184 10,766,629
investments
Unrealized appreciation (1,395,292) 349,622 63,475 (655,336)
(depreciation)
Net increase (decrease) in (430,059) 1,026,112 9,146,296 12,223,497
net assets from operations
Payments received from 3,417,334 1,731,754 2,424,950 2,477,177
contract owners
Transfers between (5,330,955) 10,776,490 (7,127,954) (4,677,225)
sub-accounts and the fixed
account, net
Transfers for contract (842,493) (693,541) (4,899,468) (5,190,564)
benefits and terminations
Other transfers (to) from 3,839 (1,488) 9,532 (34,874)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in (2,752,275) 11,813,215 (9,592,940) (7,425,486)
net assets from contract
transactions
Retained in (returned from) (1,815) 213 (4,564) 746
Variable Annuity Account A,
net
Total increase (decrease) in (3,184,149) 12,839,540 (451,208) 4,798,757
net assets
Net assets at beginning of year 21,364,595 8,525,055 96,618,357 91,819,600
Net assets at end of year $ 18,180,446 $ 21,364,595 $ 96,167,149 $ 96,618,357
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP II - INDEX 500 VIP II - ASSET MANAGER:
GROWTH
12/31/99 12/31/98 12/31/99 12/31/98
Net investment income (loss) $ 83,651 $ 222,361 $ 512,307 $ 391,937
Net realized gain (loss) on 10,052,701 13,346,539 3,482,327 5,114,567
investments
Unrealized appreciation 12,109,896 9,112,387 515,712 (667,729)
(depreciation)
Net increase (decrease) in 22,246,248 22,681,287 4,510,346 4,838,775
net assets from operations
Payments received from 10,721,198 7,745,488 2,143,156 2,675,973
contract owners
Transfers between (3,895,693) 5,201,166 (3,750,421) (6,134,030)
sub-accounts and the fixed
account, net
Transfers for contract (2,991,968) (4,898,551) (994,680) (774,181)
benefits and terminations
Other transfers (to) from 17,133 (9,527) 2,093 (14,353)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 3,850,670 8,038,576 (2,599,852) (4,246,591)
net assets from contract
transactions
Retained in (returned from) (5,261) 1,138 (5,412) 932
Variable Annuity Account A,
net
Total increase (decrease) in 26,091,657 30,721,001 1,905,082 593,116
net assets
Net assets at beginning of year 107,512,920 76,791,919 32,946,100 32,352,984
Net assets at end of year $ 133,604,577 $ 107,512,920 $ 34,851,182 $ 32,946,100
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
VIP II - CONTRAFUND
12/31/99 12/31/98
Net investment income (loss) $ (704,229) $ (266,259)
Net realized gain (loss) on 19,155,212 14,201,679
investments
Unrealized appreciation 21,310,986 23,314,910
(depreciation)
Net increase (decrease) in 39,761,969 37,250,330
net assets from operations
Payments received from 13,344,538 9,773,186
contract owners
Transfers between (6,147,293) (9,126,283)
sub-accounts and the fixed
account, net
Transfers for contract (8,021,589) (3,689,396)
benefits and terminations
Other transfers (to) from (2,132) (11,441)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in (826,476) (3,053,934)
net assets from contract
transactions
Retained in (returned from) (6,462) 1,591
Variable Annuity Account A,
net
Total increase (decrease) in 38,929,031 34,197,987
net assets
Net assets at beginning of year 169,057,561 134,859,574
Net assets at end of year $ 207,986,592 $ 169,057,561
</TABLE>
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP III - BALANCED VIP III - GROWTH &
INCOME
12/31/99 12/31/98 12/31/99 12/31/98
Net investment income (loss) $ 115,988 $ 65,102 $ (170,283) $ (378,860)
Net realized gain (loss) on 662,780 631,653 8,970,314 1,841,721
investments
Unrealized appreciation (430,871) 373,537 (3,185,603) 10,346,320
(depreciation)
Net increase (decrease) in 347,897 1,070,292 5,614,428 11,809,181
net assets from operations
Payments received from 2,277,880 1,191,176 9,622,662 14,567,299
contract owners
Transfers between (193,407) 1,883,200 (11,968,744) 15,868,621
sub-accounts and the fixed
account, net
Transfers for contract (299,146) (219,835) (5,722,591) (1,973,918)
benefits and terminations
Other transfers (to) from 2,358 (2,168) 9,469 (14,699)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 1,787,685 2,852,373 (8,059,204) 28,447,303
net assets from contract
transactions
Retained in (returned from) (4,517) 847 (6,968) 1,729
Variable Annuity Account A,
net
Total increase (decrease) in 2,131,065 3,923,512 (2,451,744) 40,258,213
net assets
Net assets at beginning of year 8,601,349 4,677,837 69,111,358 28,853,145
Net assets at end of year $ 10,732,414 $ 8,601,349 $ 66,659,614 $ 69,111,358
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP III - GROWTH MSDWUF - EMERGING
OPPORTUNITIES MARKETS EQUITY
12/31/99 12/31/98 12/31/99 12/31/98
Net investment income (loss) $ 100,740 $ 62,233 $ (20,566) $ 108
Net realized gain (loss) on 5,547,305 3,139,087 298,832 8,643
investments
Unrealized appreciation (4,333,559) 4,981,718 1,328,959 (98,190)
(depreciation)
Net increase (decrease) in 1,314,486 8,183,038 1,607,225 (89,439)
net assets from operations
Payments received from 2,827,238 6,234,421 468,566 113,147
contract owners
Transfers between (12,777,805) (1,395,866) 3,019,428 314,261
sub-accounts and the fixed
account, net
Transfers for contract (1,146,235) (1,936,492) (21,269) (399)
benefits and terminations
Other transfers (to) from (5,432) (6,503) 559 (2)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in (11,102,234) 2,895,560 3,467,284 427,007
net assets from contract
transactions
Retained in (returned from) (6,541) 1,458 19 (1)
Variable Annuity Account A,
net
Total increase (decrease) in (9,794,289) 11,080,056 5,074,528 337,567
net assets
Net assets at beginning of year 44,311,264 33,231,208 546,742 209,175
Net assets at end of year $ 34,516,975 $ 44,311,264 $ 5,621,270 $ 546,742
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MSDWUF - EMERGING
MARKETS DEBT
12/31/99 12/31/98
Net investment income (loss) $ 35,182 $ 26,274
Net realized gain (loss) on 1,909 (5,315)
investments
Unrealized appreciation 25,241 (92,451)
(depreciation)
Net increase (decrease) in 62,332 (71,492)
net assets from operations
Payments received from 80,428 87,141
contract owners
Transfers between (130,259) (69,071)
sub-accounts and the fixed
account, net
Transfers for contract (622) (606)
benefits and terminations
Other transfers (to) from 161 (28)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in (50,292) 17,436
net assets from contract
transactions
Retained in (returned from) (2) 2
Variable Annuity Account A,
net
Total increase (decrease) in 12,038 (54,054)
net assets
Net assets at beginning of year 282,550 336,604
Net assets at end of year $ 294,588 $ 282,550
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MSDWUF - GLOBAL MSDWUF -
EQUITY INTERNATIONAL MAGNUM
12/31/99 12/31/98 12/31/99 12/31/98
Net investment income (loss) $ 4,397 $ 2,494 $ 1,212 $ (1,357)
Net realized gain (loss) on 121,287 74,478 (14,001) 51,315
investments
Unrealized appreciation (79,017) 25,498 209,399 (89,038)
(depreciation)
Net increase (decrease) in 46,667 102,470 196,610 (39,080)
net assets from operations
Payments received from 249,422 758,399 231,733 374,549
contract owners
Transfers between (542,965) 836,755 (181,280) 411,163
sub-accounts and the fixed
account, net
Transfers for contract (33,029) (5,584) (19,339) (2,657)
benefits and terminations
Other transfers (to) from 243 (195) 216 397
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in (326,329) 1,589,375 31,330 783,452
net assets from contract
transactions
Retained in (returned from) (4) 1 (1) (1)
Variable Annuity Account A,
net
Total increase (decrease) in (279,666) 1,691,846 227,939 744,371
net assets
Net assets at beginning of year 1,999,162 307,316 912,330 167,959
Net assets at end of year $ 1,719,496 $ 1,999,162 $ 1,140,269 $ 912,330
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PBHG - GROWTH II PBHG - SMALL CAP VALUE
12/31/99 12/31/98 12/31/99 12/31/98
Net investment income (loss) $ (21,104) $ (1,850) $ (18,810) $ (17,387)
Net realized gain (loss) on 508,570 18,137 114,494 103,567
investments
Unrealized appreciation 2,830,966 13,190 181,282 20,879
(depreciation)
Net increase (decrease) in 3,318,432 29,477 276,966 107,059
net assets from operations
Payments received from 1,200,034 133,860 423,761 500,142
contract owners
Transfers between 7,620,854 141,208 (1,530,331) 1,799,420
sub-accounts and the fixed
account, net
Transfers for contract (20,296) (609) (25,055) (17,248)
benefits and terminations
Other transfers (to) from 449 27 979 201
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 8,801,041 274,486 (1,130,646) 2,282,515
net assets from contract
transactions
Retained in (returned from) 33 (2) (2) (5)
Variable Annuity Account A,
net
Total increase (decrease) in 12,119,506 303,961 (853,682) 2,389,569
net assets
Net assets at beginning of year 431,049 127,088 2,937,388 547,819
Net assets at end of year $ 12,550,555 $ 431,049 $ 2,083,706 $ 2,937,388
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
PBHG - LARGE CAP VALUE
12/31/99 12/31/98
Net investment income (loss) $ (31,101) $ (1,145)
Net realized gain (loss) on 492,681 140,622
investments
Unrealized appreciation (165,273) 232,358
(depreciation)
Net increase (decrease) in 296,307 371,835
net assets from operations
Payments received from 934,429 393,422
contract owners
Transfers between 113,025 1,491,596
sub-accounts and the fixed
account, net
Transfers for contract (63,941) (103,177)
benefits and terminations
Other transfers (to) from 86 (2,284)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 983,599 1,779,557
net assets from contract
transactions
Retained in (returned from) (117) 113
Variable Annuity Account A,
net
Total increase (decrease) in 1,279,789 2,151,505
net assets
Net assets at beginning of year 2,347,270 195,765
Net assets at end of year $ 3,627,059 $ 2,347,270
</TABLE>
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
PBHG - TECHNOLOGY & PBHG - SELECT 20
COMMUNICATIONS
12/31/99 12/31/98 12/31/99 12/31/98
Net investment income (loss) $ (299,125) $ (9,613) $ (323,793) $ (77,245)
Net realized gain (loss) on 2,304,654 60,345 4,619,284 837,116
investments
Unrealized appreciation 70,720,773 424,975 29,220,248 4,809,171
(depreciation)
Net increase (decrease) in 72,726,302 475,707 33,515,739 5,569,042
net assets from operations
Payments received from 18,048,159 502,534 10,163,549 4,070,084
contract owners
Transfers between 62,532,330 1,593,447 90,503 19,258,341
sub-accounts and the fixed
account, net
Transfers for contract (428,500) (4,960) (1,333,503) (343,605)
benefits and terminations
Other transfers (to) from (5,427) 37 (13,046) (6,492)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 80,146,562 2,091,058 8,907,503 22,978,328
net assets from contract
transactions
Retained in (returned from) 146 (24) (147) 57
Variable Annuity Account A,
net
Total increase (decrease) in 152,873,010 2,566,741 42,423,095 28,547,427
net assets
Net assets at beginning of year 2,932,095 365,354 29,117,879 570,452
Net assets at end of year $ 155,805,105 $ 2,932,095 $ 71,540,974 $ 29,117,879
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SVIF - DISCOVERY FUND II SVIF - MID CAP GROWTH
FUND II
12/31/99 12/31/98 12/31/99 12/31/98
Net investment income (loss) $ (1,954) $ (1,778) $ (49,188) $ (4,434)
Net realized gain (loss) on 37,151 5,448 526,279 21,237
investments
Unrealized appreciation (21,180) 2,341 5,370,251 112,638
(depreciation)
Net increase (decrease) in 14,017 6,011 5,847,342 129,441
net assets from operations
Payments received from 19,122 151,061 3,919,852 402,146
contract owners
Transfers between (27,036) 33,076 11,692,323 224,617
sub-accounts and the fixed
account, net
Transfers for contract (1,271) (2,353) (43,764) (1,040)
benefits and terminations
Other transfers (to) from 100 (931) (344) 243
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in (9,085) 180,853 15,568,067 625,966
net assets from contract
transactions
Retained in (returned from) (3) (9) (14) 39
Variable Annuity Account A,
net
Total increase (decrease) in 4,929 186,855 21,415,395 755,446
net assets
Net assets at beginning of year 279,046 92,191 915,824 160,378
Net assets at end of year $ 283,975 $ 279,046 $ 22,331,219 $ 915,824
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SVIF - OPPORTUNITY FUND
II
12/31/99 12/31/98
Net investment income (loss) $ (34,153) $ (10,945)
Net realized gain (loss) on 504,056 184,475
investments
Unrealized appreciation 773,031 (72,627)
(depreciation)
Net increase (decrease) in 1,242,934 100,903
net assets from operations
Payments received from 627,295 1,769,024
contract owners
Transfers between 473,742 1,048,157
sub-accounts and the fixed
account, net
Transfers for contract (41,900) (19,037)
benefits and terminations
Other transfers (to) from 116 (696)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 1,059,253 2,797,448
net assets from contract
transactions
Retained in (returned from) 3 (32)
Variable Annuity Account A,
net
Total increase (decrease) in 2,302,190 2,898,319
net assets
Net assets at beginning of year 3,225,067 326,748
Net assets at end of year $ 5,527,257 $ ,3,225,067
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
WPT - SMALL COMPANY WPT - INTERNATIONAL
GROWTH EQUITY
12/31/99 12/31/98 12/31/99 12/31/98
Net investment income (loss) $ (10,500) $ (6,748) $ 7,644 $ (893)
Net realized gain (loss) on 243,098 24,269 25,821 21,892
investments
Unrealized appreciation 764,971 (56,918) 265,565 (33,271)
(depreciation)
Net increase (decrease) in 997,569 (39,397) 299,030 (12,272)
net assets from operations
Payments received from 298,639 331,697 175,112 181,100
contract owners
Transfers between 2,052,484 353,786 1,181,913 103,508
sub-accounts and the fixed
account, net
Transfers for contract (6,955) (6,083) (69) (1,957)
benefits and terminations
Other transfers (to) from (734) 46 (328) 1,986
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 2,343,434 679,446 1,356,628 284,637
net assets from contract
transactions
Retained in (returned from) 1 16 (1) (2,058)
Variable Annuity Account A,
net
Total increase (decrease) in 3,341,004 640,065 1,655,657 270,307
net assets
Net assets at beginning of year 953,257 313,192 301,996 31,689
Net assets at end of year $ 4,294,261 $ 953,257 $ 1,957,653 $ 301,996
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
WPT - POST-VENTURE TOTAL
CAPITAL
12/31/99 12/31/98 12/31/99 12/31/98
Net investment income (loss) $ (4,567) $ (2,989) $ 7,195,253 $ 7,337,700
Net realized gain (loss) on 87,468 21,703 114,760,825 95,873,057
investments
Unrealized appreciation 259,899 (24,571) 158,873,322 58,872,795
(depreciation)
Net increase (decrease) in 342,800 (5,857) 280,829,400 162,083,552
net assets from operations
Payments received from 175,283 337,029 142,609,296 95,861,635
contract owners
Transfers between (114,835) 119,403 (281,530) 2,170,805
sub-accounts and the fixed
account, net
Transfers for contract 0 (21,038) (54,108,214) (35,150,903)
benefits and terminations
Other transfers (to) from (5) 3 38,757 (190,243)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 60,443 435,397 88,258,309 62,691,294
net assets from contract
transactions
Retained in (returned from) 0 (5) (177,758) 16,918
Variable Annuity Account A,
net
Total increase (decrease) in 403,243 429,535 368,909,951 224,791,764
net assets
Net assets at beginning of year 496,313 66,778 1,018,128,051 793,336,287
Net assets at end of year $ 899,556 $ 496,313 $ 1,387,038,002 $ 1,018,128,051
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1999 and 1998
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 State
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.
Under applicable insurance law, the assets and liabilities of the
Account are clearly identified and distinguished from other assets and
liabilities of EFILI. The Account cannot be charged with liabilities
arising out of any other business of EFILI.
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.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Account in preparation of the financial statements
in conformity with generally accepted accounting principles.
INVESTMENT VALUATION
Investments are made by the subaccounts in their corresponding mutual
fund portfolios and are valued at the reported net asset values of
such portfolios.
ACCOUNTING FOR INVESTMENTS
Investment 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.
ANNUITY RESERVES
Annuity reserves are computed for contracts in the payout 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 the State of New York. The mortality risk is
fully borne by EFILI and may result in additional amounts being
transferred into the Account by EFILI.
FEDERAL INCOME TAXES
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").
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.
ESTIMATES
The preparation of the statement of assets and liabilities and the
statements of operations and of changes in net assets in accordance
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the related amounts and
disclosures in the financial statements. Actual results could differ
from those estimates.
RECLASSIFICATIONS
Certain prior year balances have been reclassified to conform with the
current year presentation.
3. EXPENSES
EFILI deducts a daily charge from the net assets of the Account for
administrative expenses and for the assumption of mortality risk and
expense risk. The daily charge is equivalent to an annual effective
rate of 1% of net assets for Income Advantage contracts and is
equivalent to an annual effective rate of 0.8% of net assets for
Retirement Reserves contracts. EFILI also deducts an annual
maintenance charge of $30 from the Retirement Reserves contract value.
The maintenance charge is waived on certain contracts.
In 1999, EFILI began offering Retirement Reserves contractholders the
opportunity to elect a death benefit rider. If elected, EFILI deducts
a quarterly charge which will not exceed 0.10% of the Retirement
Reserves contract value on the date of the charge. There will be no
charges made once the annuitant reaches their 85th birthday.
4. AFFILIATED COMPANY TRANSACTIONS
The contracts are distributed through Fidelity Brokerage Services,
Inc. (FBSI), Fidelity Insurance Agency, Inc. (FIA), and Fidelity
Investments Institutional Services Company, Inc. (FIIS), all of which
are affiliated with FMR Corp. FBSI, FIA, and FIIS 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 the VIP, VIP II and VIP III portfolios. Fidelity
Investments Institutional Operations Company, Inc., an affiliate of
FMR Corp., is the transfer and shareholder servicing agent for the
VIP, VIP II and VIP III 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,
1999:
PURCHASES SALES
VIP - Money Market $ 77,848,145 $ 64,995,278
VIP - High Income 8,228,190 12,370,871
VIP - Equity-Income 19,858,230 48,263,583
VIP - Growth 61,163,470 19,129,150
VIP - Overseas 6,887,364 6,351,853
VIP II - Investment Grade Bond 10,059,624 11,782,415
VIP II - Asset Manager 13,434,750 16,655,728
VIP II - Index 500 27,497,084 22,825,706
VIP II - Asset Manager: Growth 8,649,815 9,438,863
VIP II - Contrafund 32,062,582 27,436,327
VIP III - Balanced 6,742,283 4,607,168
VIP III - Growth & Income 18,453,284 25,810,398
VIP III - Growth Opportunities 7,598,913 17,785,841
MSDWUF - Emerging Markets 8,923,362 5,476,625
Equity
MSDWUF - Emerging Markets Debt 404,868 419,980
MSDWUF - Global Equity 779,981 1,025,792
MSDWUF - International Magnum 972,289 935,673
PBHG - Growth II 10,813,154 2,033,184
PBHG - Small Cap Value 2,893,929 4,043,387
PBHG - Large Cap Value 4,526,144 3,474,651
PBHG - Technology & 88,739,222 8,891,639
Communications
PBHG - Select 20 25,440,638 16,857,075
SVIF - Discovery Fund II 175,028 150,600
SVIF - Mid Cap Growth Fund II 17,238,070 1,716,372
SVIF - Opportunity Fund II 2,864,593 1,465,699
WPT - Small Company Growth 4,181,447 1,769,713
WPT - International Equity 2,241,862 877,591
WPT - Post-Venture Capital 481,893 426,017
6. UNIT VALUES
A summary of changes in accumulation units and ending unit and
contract values for variable annuity contracts at December 31, 1999
and 1998 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
BEGINNING PAYMENTS TRANSFERS CONTRACT ENDING ENDING DOLLARS
BALANCE RECEIVED BETWEEN TERMINATIONS BALANCE BALANCE
UNITS FROM SUBACCOUNTS, UNITS UNIT
CONTRACT NET VALUE
OWNERS
JANUARY 1, 1999 TO DECEMBER
31, 1999
VIP - Money Market 3,614,051 1,443,826 (181,549) (739,917) 4,136,411 $ 17.441547 $ 72,145,408
VIP - High Income 854,157 52,504 (237,317) (30,459) 638,885 $ 29.532615 18,867,943
VIP - Equity-Income 3,922,539 97,514 (728,318) (184,463) 3,107,272 $ 46.009566 142,964,243
VIP - Growth 2,171,438 225,585 317,718 (155,456) 2,559,285 $ 80.674535 206,469,135
VIP - Overseas 967,204 37,532 (41,081) (30,662) 932,993 $ 37.223575 34,729,344
VIP II - Investment Grade Bond 986,932 175,271 (285,275) (22,685) 854,243 $ 19.870115 16,973,906
VIP II - Asset Manager 3,305,949 83,932 (233,114) (227,034) 2,929,733 $ 31.190611 91,380,167
VIP II - Index 500 3,273,507 326,979 (111,304) (114,832) 3,374,350 $ 37.781601 127,488,333
VIP II - Asset Manager: Growth 1,483,958 112,031 (173,159) (74,342) 1,348,488 $ 23.934865 32,275,889
VIP II - Contrafund 6,211,520 486,189 (235,173) (353,205) 6,109,331 $ 32.540456 198,800,411
VIP III - Balanced 537,166 162,759 (30,696) (51,090) 618,139 $ 14.501916 8,964,199
VIP III - Growth & Income 3,974,242 579,518 (736,631) (416,492) 3,400,637 $ 17.646534 60,009,454
VIP III - Growth Opportunities 2,691,359 186,624 (821,822) (111,171) 1,944,990 $ 16.153367 31,418,141
MSDWUF - Emerging Markets 71,567 41,964 268,729 (4,432) 377,828 $ 14.679023 5,546,140
Equity
MSDWUF - Emerging Markets Debt 36,909 9,917 (16,957) (6) 29,863 $ 9.552515 285,265
MSDWUF - Global Equity 152,473 21,706 (47,610) (1,463) 125,106 $ 11.916163 1,490,794
MSDWUF - International Magnum 75,635 19,878 (17,275) (2,126) 76,112 $ 13.230131 1,006,980
PBHG - Growth II 38,979 70,277 472,118 (7,817) 573,557 $ 21.422237 12,286,875
PBHG - Small Cap Value 248,781 47,089 (134,867) (12,309) 148,694 $ 13.200297 1,962,814
PBHG - Large Cap Value 154,968 72,840 6,464 (9,041) 225,231 $ 15.178062 3,418,584
PBHG - Technology & 221,015 781,886 2,591,232 (53,050) 3,541,083 $ 42.930574 152,020,736
Communications
PBHG - Select 20 1,691,752 558,820 (82,501) (108,610) 2,059,461 $ 33.424799 68,837,079
SVIF - Discovery Fund II 25,260 2,414 (987) (1,519) 25,168 $ 10.752497 270,623
SVIF - Mid Cap Growth Fund II 67,817 217,770 607,518 (25,790) 867,315 $ 24.646794 21,376,528
SVIF - Opportunity Fund II 267,972 49,443 35,067 (22,143) 330,339 $ 15.294116 5,052,236
WPT - Small Company Growth 93,472 29,094 136,208 (689) 258,085 $ 16.470689 4,250,849
WPT - International Equity 29,229 13,582 81,058 (15) 123,854 $ 15.725838 1,947,701
WPT - Post-Venture Capital 45,815 11,927 (5,604) (941) 51,197 $ 17.570342 899,556
$ 1,323,139,333
</TABLE>
6. UNIT VALUES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
BEGINNING PAYMENTS TRANSFERS CONTRACT ENDING ENDING DOLLARS
BALANCE RECEIVED BETWEEN TERMINATIONS BALANCE BALANCE
UNITS FROM SUBACCOUNTS, UNITS UNIT
CONTRACT NET VALUE
OWNERS
JANUARY 1, 1998 TO DECEMBER
31, 1998
VIP - Money Market 2,510,803 1,647,401 (220,944) (323,209) 3,614,051 $ 16.718422 $ 60,421,297
VIP - High Income 868,993 133,979 (69,329) (79,486) 854,157 $ 27.525979 23,511,486
VIP - Equity-Income 4,666,312 172,712 (732,658) (183,827) 3,922,539 $ 43.619607 171,099,633
VIP - Growth 2,229,721 79,040 (61,187) (76,136) 2,171,438 $ 59.172379 128,489,157
VIP - Overseas 1,059,560 32,658 (88,408) (36,606) 967,204 $ 26.308910 25,446,085
VIP II - Investment Grade Bond 442,121 96,445 553,565 (105,199) 986,932 $ 20.242828 19,978,293
VIP II - Asset Manager 3,604,315 100,308 (164,174) (234,500) 3,305,949 $ 28.302849 93,567,756
VIP II - Index 500 3,001,334 296,359 206,144 (230,330) 3,273,507 $ 31.604128 103,456,330
VIP II - Asset Manager: Growth 1,760,200 154,243 (337,931) (92,554) 1,483,958 $ 20.933935 31,065,071
VIP II - Contrafund 6,419,636 443,789 (451,601) (200,304) 6,211,520 $ 26.399736 163,982,487
VIP III - Balanced 371,377 100,999 145,380 (80,590) 537,166 $ 13.982944 7,511,155
VIP III - Growth & Income 2,163,555 1,107,895 1,071,230 (368,438) 3,974,242 $ 16.294958 64,760,113
VIP III - Growth 2,558,459 468,112 (96,266) (238,946) 2,691,359 $ 15.616534 42,029,696
Opportunities
MSDWUF - Emerging Markets 20,806 12,500 39,057 (796) 71,567 $ 7.561799 541,172
Equity
MSDWUF - Emerging Markets 32,130 9,702 (3,800) (1,123) 36,909 $ 7.443062 274,713
Debt
MSDWUF - Global Equity 29,979 70,359 75,573 (23,438) 152,473 $ 11.539332 1,759,437
MSDWUF - International Magnum 17,042 35,893 36,135 (13,435) 75,635 $ 10.652996 805,735
PBHG - Growth II 11,877 13,257 13,845 0 38,979 $ 10.895644 424,700
PBHG - Small Cap Value 51,781 45,359 159,664 (8,023) 248,781 $ 11.477768 2,855,455
PBHG - Large Cap Value 18,440 34,250 123,327 (21,049) 154,968 $ 14.051655 2,177,563
PBHG - Technology & 34,037 46,836 143,175 (3,033) 221,015 $ 12.942126 2,860,409
Communications
PBHG - Select 20 54,758 310,910 1,419,936 (93,852) 1,691,752 $ 16.795293 28,413,465
SVIF - Discovery Fund II 8,046 16,676 3,995 (3,457) 25,260 $ 10.314283 260,538
SVIF - Mid Cap Growth Fund II 15,649 36,533 18,029 (2,394) 67,817 $ 13.084892 887,378
SVIF - Opportunity Fund II 31,571 165,753 90,042 (19,394) 267,972 $ 11.428140 3,062,422
WPT - Small Company Growth 28,265 33,486 33,545 (1,824) 93,472 $ 9.819912 917,883
WPT - International Equity 3,206 16,976 9,236 (189) 29,229 $ 10.331959 301,996
WPT - Post-Venture Capital 6,514 30,180 11,079 (1,958) 45,815 $ 10.833075 496,310
$ 981,357,735
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Contractholders of Empire Fidelity Investments Variable Annuity
Account A of
Empire Fidelity Investments Life Insurance Company:
In our opinion, the accompanying statement of assets and liabilities
and the related statements of operations and of changes in net assets
present fairly, in all material respects, the financial position of
each of the subaccounts constituting the Empire Fidelity Investments
Variable Annuity Account A of Empire Fidelity Investments Life
Insurance Company at December 31, 1999, and the results of each of
their operations and the changes in each of their net assets for each
of the two years in the period then ended December 31, 1999, in
conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of Empire
Fidelity Investments Life Insurance Company's management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United
States, which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of investments at December 31, 1999 by
correspondence with the funds, provide a reasonable basis for the
opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 25, 2000
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 are filed in Part B. There are no financial
statements included in Part A, other than Accumulation Unit Values.
Statement of Assets and Liabilities for Empire Fidelity Investments
Variable Annuity Account A as of December 31, 1999.
Statements of Operations and Changes in Net Assets for Empire
Fidelity Investments Variable Annuity Account A for Years ended
December 31, 1999 and 1998.
Report of PricewaterhouseCoopers LLP on the Financial Statements of
Empire Fidelity Investments Variable Annuity Account A.
Balance Sheets of Empire Fidelity Investments Life Insurance Company
as of December 31, 1999 and 1998.
Statements of Income for Empire Fidelity Investments Life Insurance
Company for the Years Ended December 31, 1999 and 1998.
Statements of Changes in Stockholder's Equity for Empire Fidelity
Investments Life Insurance Company for the Years Ended December 31,
1999 and 1998.
Statements of Cash Flows for Empire Fidelity Investments Life
Insurance Company for the Years Ended December 31, 1999 and 1998.
Notes to Financial Statements of Empire Fidelity Investments Life
Insurance Company.
Report of PricewaterhouseCoopers LLP on Financial Statements of
Empire Fidelity Investments Life Insurance Company.
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 4)
(c) Endorsement for Qualified Contracts. (Note 4)
(5) (a) Application for Variable Annuity Contract. (Note 4)
(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 2)
(10) Not Applicable
(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)
(c) Form of Participation Agreement between Empire Fidelity
Investments Life and Strong Variable Insurance Funds, Inc. on behalf
of the Portfolios, and Strong Opportunity Fund II, Inc., Strong
Capital Management, Inc. (the "Adviser"), (Note 4)
(d) Form of Participation Agreement between Empire Fidelity
Investments Life and PBHG INSURANCE SERIES FUND, INC. ("FUND"), and
PILGRIM BAXTER & ASSOCIATES, LTD. ("ADVISER"). (Note 4)
`
(e) Form of Participation Agreement between Empire Fidelity
Investments Life and MORGAN STANLEY UNIVERSAL FUNDS, INC. (the
"Fund"), and MORGAN STANLEY ASSET MANAGEMENT INC. and MILLER ANDERSON
& SHERRERD, LLP (the "Advisers"). (Note 4)
(f) Form of Participation Agreement between Empire Fidelity
Investments Life and Warburg, Pincus Trust, (the "Fund"); Warburg,
Pincus Counsellors, Inc. (the "Adviser"); and Counsellors Securities
Inc. (Note 4)
(15) (a) Powers of Attorney (Note 3) Power of Attorney for
Lena G. Goldberg (Note 4) Powers of Attorney for Stephen P. Jonas
and Allan Brandon (Note 5)
___________________
(Note 1) Incorporated by reference from 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 herein
(Note 3) Incorporated by reference from 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.
(Note 4) Incorporated by reference from Post-Effective Amendment No. 6
to Registration Statement No. 33-42376, filed on August 29, 1997, on
behalf of Empire Fidelity Investments Variable Annuity Account A.
(Note 5) Incorporated herein by reference from Post-Effective
Amendment No. 8 to this Registration Statement filed on January 19,
1999.
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
LENA G. GOLDBERG, Director
JOHN J. REMONDI, Director
RODNEY R. ROHDA, Director and
Chairman
ALLAN BRANDON, Director
DAVID C. WEINSTEIN, Director
STEPHEN P. JONAS, 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 Allan Brandon is One World Financial
Center, 200 Liberty Street, Tower A, New York, New York 10281. 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.
MELANIE CALZETTI-SPAHR, Executive Vice President, Operations
DAVID J. PEARLMAN, Vice President, Secretary and General Counsel
JOSEPH L. KURTZER Jr., Treasurer
The principal business address of Melanie Calzetti-Spahr, David J.
Pearlman, and Joseph L. Kurtzer Jr. 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, 1999 there were 752 Qualified Contracts and 11,774
Non-qualified Contracts outstanding.
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
Robert P. Mazzarella Director and President
Rodney R. Rohda Director
Edward L. McCartney Executive Vice President
J. Peter Benzie Executive Vice President
Bruce MacAlpine Vice President
Kenneth Klipper Treasurer
Gary Greenstein Assistant Treasurer
Jeffrey R. Larsen Legal Counsel & Clerk
Linda Holland Compliance Officer
Richard Blades Compliance Registered Options Principal
Jay Freedman Assistant Clerk
Thomas G. McNichols Vice President, Operations
Lawrence G. Smith Vice President
(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 1999, 1998 and 1997 were
$710,000, 607,200, and $514,800 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. 9 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, 2000.
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
(Registrant)
By: EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Rodney R. Rohda Attest: /s/ David J. Pearlman
Rodney R. Rohda, President David J. Pearlman,
Chairman Secretary
Chief Executive Officer and
Chief Operating Officer
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, 2000.
Signature Title
_/s/ Rodney R. Rohda__ President, Chairman and Director
Rodney R. Rohda (Chief Executive Officer)
(Chief Operating Officer)
)
_______________ )
Joseph L. Kurtzer Jr. Treasurer )
)
________________ )
J. Gary Burkhead Director )
)
________________ )
James C. Curvey Director )
) By:__/s/ David J. Pearlman_
) David J. Pearlman
________________ ) (Attorney-in-Fact)
John J. Remondi Director )
)
________________ )
Lena G. Goldberg Director )
)
_______________ )
Roy Ballentine Director )
)
_______________ )
Peter Johannsen Director )
_______________ )
Stephen P. Jonas Director )
)
_______________ )
Malcolm MacKay Director )
)
_______________ )
Joshua Berman Director )
) By: __/s/ David J. Pearlman_
_______________ ) David J. Pearlman
Allan Brandon Director ) (Attorney-in-Fact)
)
_______________ )
Floyd L. Smith Director )
)
_______________ )
David Weinstein Director )
EXHIBIT INDEX
Exhibit
(9) Opinion and consent of David J. Pearlman, as to the legality
of securities being issued.
(10) (a) Written consent of PricewaterhouseCoopers LLP
(b) Written consent of Jorden Burt Boros Cicchetti Berenson
& Johnson LLP
FIDELITY (LOGO) FMR Corp. 82 Devonshire
INVESTMENTS(registered Street Boston MA 02109-3614
trademark) 617 563 7000
April 24, 2000
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. 9 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,
/s/ David J. Pearlman
David J. Pearlman
April 24, 2000
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. 9 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 BOROS CICCHETTI BERENSON & JOHNSON LLP
By: /s/ Michael Berenson
Michael Berenson
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional
Information constituting part of this Post-Effective Amendment No. 9
to the registration statement on Form N-4 of our reports dated January
25, 2000, relating to the financial statements of Empire Fidelity
Investments Life Insurance Company and the financial statements of
Empire Fidelity Investments Variable Annuity Account A, both of which
appear in the Statement of Additional Information. We also consent to
the reference to us under the heading "Independent Accountants" in
such Statement of Additional Information.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
April 24, 2000
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