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PROVIDENTMUTUAL LIFE AND ANNUITY COMPANY OF AMERICA
PROVIDENTMUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT
PROVIDENTMUTUAL VARIABLE LIFE SEPARATE ACCOUNT
SUPPLEMENT DATED DECEMBER 27, 1999
TO
PROSPECTUS DATED MAY 1, 1999
SUBSTITUTION OF SHARES OF EQUITY 500 INDEX PORTFOLIO OF MARKET STREET FUND,
INC. FOR SHARES OF INDEX 500 PORTFOLIO OF VARIABLE INSURANCE PRODUCTS FUND II.
On or about December 20, 1999, Providentmutual Life and Annuity Company
of America ("PLACA") filed an amended application with the Securities and
Exchange Commission seeking an order approving the substitution of shares of
Equity 500 Index Portfolio (the "New Portfolio") of Market Street Fund, Inc. for
shares of the Index 500 Portfolio (the "Replaced Portfolio") of Variable
Insurance Products Fund II currently held by various subaccounts of
Providentmutual Variable Annuity Separate Account and Providentmutual Variable
Life Separate Account (the "Accounts"). To the extent required by law, approvals
of these substitutions will also be obtained from the state insurance regulators
in certain jurisdictions. The effect of such a share substitution would be to
replace the Replaced Portfolio with the New Portfolio as an investment option
under the variable life or variable annuity contracts (the "Contracts")
described in your May 1, 1999 prospectus.
The Replaced Portfolio and the New Portfolio have substantially the
same investment objective. Both are passively managed portfolios that seek
investment results that correspond to the total return of common stocks publicly
traded in the United States, as represented by the Standard & Poor's Composite
Index of 500 Stocks (the "S&P 500"). Both invest substantially all of their
assets in the common stocks that are included in the S&P 500, and both attempt
to minimize the difference ("tracking error") between their investment
performance and the investment performance of the S&P 500. As a result of their
similar investment objectives and policies, the Replaced Portfolio and the New
Portfolio present substantially the same investment risk, which is the risk of
investing in the stocks of large U.S. issuers that are included in the S&P 500.
Contract owners and prospective purchasers should carefully read the prospectus
for the New Portfolio. PLACA will send each Contract owner a copy of prospectus
before the proposed substitution is carried out.
From the date of this supplement to 30 days after the date of the
proposed substitution, each Contract owner is permitted to make one transfer of
all amounts under a Contract invested in any one of the affected subaccounts to
another subaccount other than one of the other affected subaccounts without that
transfer counting as a "free" transfer permitted under a Contract. Also, PLACA
will not exercise any rights reserved under any Contract to impose additional
restrictions on transfers until at least 30 days after the proposed
substitution.
If the proposed substitution is carried out, each Contract owner
affected by the substitution will be sent a written notice informing him/her
that the substitutions were carried out and that until 30 days after the
substitution he/she may make one transfer of all amounts under a Contract
invested in any one of the affected subaccounts on the date of the notice to
another subaccount without that transfer counting as a "free" transfer permitted
under a Contract.
CHANGE IN SUB-ADVISER
On December 24, 1999, Reams Asset Management Company, LLC ("Reams")
replaced 1838 Investment Advisors as a sub-adviser to the All Pro Small Cap
Value Portfolio. From its investment advisory fees, PIMC pays Reams a monthly
fee equal to .50% of the average daily nets assets of the Portfolio.
This supplement should be retained with the Prospectus for future
reference.
