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Registration No. 33-45122
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
Post-Effective Amendment No. 8
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 8
PANORAMA PLUS SEPARATE ACCOUNT
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(Exact Name of Registrant)
C.M. LIFE INSURANCE COMPANY
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(Name of Depositor)
140 Garden Street, Hartford, CT 06154
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(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: 1-800-234-5606
Ann F. Lomeli, Secretary
------------------------
C.M. Life Insurance Company
140 Garden Street
Hartford, Connecticut 06154
Approximate date of proposed public offering: Continuous.
It is proposed that this filing will become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/X/ on May 1, 1998 pursuant to paragraph (b) of Rule 485
/ / 60 days after filing pursuant to paragraph (a) of Rule 485
/ / on (date) pursuant to paragraph (a) of the Rule 485
STATEMENT PURSUANT TO RULE 24f-2
The Registrant has registered an indefinite number or amount of its variable
annuity contracts under the Securities Act of 1933 pursuant to Rule 24f-2 under
the Investment Company Act of 1940. The Rule 24f-2 Notice for Registrant's
fiscal year ended December 31, 1997 was filed on or about March 20, 1998.
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CROSS REFERENCE TO ITEMS
REQUIRED BY FORM N-4
N-4 Item Caption in Prospectus
- -------- ---------------------
1 ............................................ Cover Page
2 ............................................ Definitions
3 ............................................ Table of Fees and Expenses
4 ............................................ Condensed Financial
Information; Performance
Measures
5 ............................................ C.M. Life and the Separate
Account
6 ............................................ Contract Charges;
Distribution
7 ............................................ Miscellaneous Provisions;
An Explanation of the
Contracts; Reservation of
Rights; Contract Owner's
Voting Rights
8 ............................................ The Annuity (Pay-Out)
Period
9 ............................................ The Death Benefit
10 ........................................... The Accumulation (Pay-In)
Period; Distribution
11 ........................................... Right to Return Contract;
Redemption Privilege
12 ........................................... Federal Tax Status
13 ........................................... None
14 ........................................... Additional Information
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Caption in Statement of
Additional Information
----------------------
15 ............................................ Cover Page
16 ............................................ Table of Contents
17 ............................................ General Information
18 ............................................ Service Arrangements and
Distribution
19 ............................................ Performance Measures
20 ............................................ Contract Value Calculations
21 ............................................ Reports of Independent
Accountants and Financial
Statements
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PART A
INFORMATION REQUIRED IN A PROSPECTUS
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THE PANORAMA PLUS VARIABLE ANNUITY
Issued by
C.M. LIFE INSURANCE COMPANY
140 Garden Street, Hartford, CT 06154
This Prospectus describes the Panorama Plus variable annuity (the "Contract"), a
group and individual flexible premium deferred annuity offered by C.M. Life
Insurance Company ("C.M. Life"). The Contract is designed to aid in long-term
financial planning, and provides for the accumulation of capital by individuals
on a tax-deferred basis for retirement or other long-term purposes. The Contract
may be purchased with a minimum initial Purchase Payment of $500. The Contract
Owner generally may make additional Purchase Payments of at least $50 each at
any time before the Annuity Income Date. Additional limitations on Purchase
Payments apply.
The Contract Owner may allocate Purchase Payments to one or more Sub-Accounts of
the Panorama Plus Separate Account (the "Separate Account"), in which Contract
Balances accumulate on a variable basis, or to the General Account, in which
Contract Balances accumulate on a fixed basis, subject to an Interest Rate
Factor Adjustment, or to a combination of these Investment Accounts. The
Separate Account currently has six (6) different Sub-Accounts (the
"Sub-Accounts"). Assets of each Sub-Account are invested in a corresponding
investment portfolio ("Portfolio") of an underlying mutual fund ("Fund")
available for use with variable annuity and variable life insurance products.
Currently, the Portfolios available under the Contract are: the Oppenheimer
Money Fund ("Money Portfolio") and the Oppenheimer Bond Fund ("Bond Portfolio")
of the Oppenheimer Variable Account Funds ("OVAF") and the Government Securities
Portfolio, the Total Return Portfolio, the Growth Portfolio, and the
International Equity Portfolio of the Panorama Series Fund, Inc. ("Panorama
Fund"). Each Portfolio is described in a separate prospectus for each Fund that
accompanies this Prospectus.
The Contract Balance allocated to the Separate Account will vary in accordance
with the investment performance of the Portfolio selected by the Contract Owner.
Therefore, the Contract Owner bears the entire investment risk for all amounts
allocated to the Separate Account. The Contract Owner may also bear investment
risk with respect to Surrenders (and the election of payments of Annuity Income)
from the General Account. Thus, investment in the Contract is subject to risk
that may cause the value of the Contract Owner's investment to fluctuate, and
when the contract is surrendered, the value may be higher or lower than the
aggregate purchase payments.
This Prospectus sets forth your rights under the Contract, and information
regarding the Separate Account and the General Account that investors should
know before investing. Please read it carefully and retain for future reference.
A Statement of Additional Information, dated May 1, 1998, has been filed with
the Securities and Exchange Commission ("SEC"), and is available without charge,
upon written request, or by calling the Annuity Service Center. The Statement of
Additional Information, as supplemented from time to time, is incorporated
herein by reference.
The Securities and Exchange Commission (SEC) maintains a Web site
(http://www.sec.gov) that contains the Statement of Additional Information,
material incorporated by reference and other information regarding registrants
that is filed with the SEC electronically.
THIS PROSPECTUS MUST BE ACCOMPANIED OR PRECEDED BY THE PROSPECTUS FOR THE
PANORAMA SERIES FUND, INC. AND OPPENHEIMER VARIABLE ACCOUNT FUNDS, WHICH ARE
ATTACHED HERETO.
THE CONTRACTS DESCRIBED IN THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESPERSON OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------------------
Annuity Service Center, H562
P.O. Box 9067
Springfield, MA 01102-9067
1-800-272-2216
The date of this Prospectus is May 1, 1998.
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Table Of Contents
Page
DEFINITIONS............................................................... 4
SUMMARY................................................................... 6
TABLE OF FEES AND EXPENSES................................................ 9
CONDENSED FINANCIAL INFORMATION........................................... 10
C.M. LIFE INSURANCE COMPANY............................................... 11
THE PANORAMA PLUS VARIABLE ANNUITY CONTRACT............................... 11
Contract Application and Issuance of Contracts....................... 11
Electronic Data Transmission of Application Information.......... 11
Purchase Payments.................................................... 12
Initial Purchase Payment......................................... 12
Additional Purchase Payments..................................... 12
Allocation of Purchase Payments.................................. 12
Payment Not Honored by Bank...................................... 12
Contract Balance..................................................... 12
The Separate Account Balance..................................... 12
The General Account Balance...................................... 13
Minimum Contract Balance......................................... 13
PANORAMA PLUS INVESTMENT ACCOUNTS......................................... 13
The Separate Account................................................. 13
The General Account.................................................. 14
Transfers............................................................ 15
Dollar Cost Averaging................................................ 15
DISTRIBUTIONS UNDER THE CONTRACT.......................................... 16
Surrenders........................................................... 16
Systematic Withdrawals............................................... 17
Annuity Income Payments.............................................. 18
Annuity Income Date.............................................. 18
Election of Annuity Option....................................... 18
Premium Tax...................................................... 18
Annuity Options...................................................... 18
Terminal Illness Benefit............................................. 19
Death Benefit........................................................ 20
Death of Contract Owner.......................................... 20
Death of Contract Owner/Annuitant................................ 20
Death of Annuitant............................................... 21
Death Benefit Options............................................ 21
Death of Annuitant On or After Annuity Income Date............... 21
Beneficiary...................................................... 21
IRS Required Distribution............................................ 21
Restrictions Under the Texas Optional Retirement Program............. 22
Restrictions Under Section 403(b) Plans.............................. 22
CHARGES AND DEDUCTIONS.................................................... 22
Surrender Charge..................................................... 22
Interest Rate Factor Adjustment...................................... 23
Mortality and Expense Risk Charge.................................... 23
Administrative Charges............................................... 23
Contract Maintenance Fee......................................... 24
Administrative Expense Charge.................................... 24
Premium Taxes........................................................ 24
Federal, State and Local Taxes....................................... 24
Other Expenses Including Investment Advisory Fees.................... 24
DISTRIBUTOR OF THE CONTRACTS.............................................. 24
GENERAL PROVISIONS........................................................ 24
Assignment of the Contract........................................... 24
Contract Changes by C.M. Life........................................ 25
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Contract Termination................................................... 25
Incontestability....................................................... 25
Misstatement of Age or Sex............................................. 25
Nonparticipating....................................................... 25
Non-Business Days...................................................... 25
Regulatory Requirements................................................ 25
Right to Examine Contract.............................................. 25
TAX STATUS.................................................................. 25
General................................................................ 25
Diversification........................................................ 26
Multiple Contracts..................................................... 26
Tax Treatment of Assignments........................................... 27
Income Tax Withholding................................................. 27
Tax Treatment of Withdrawals - Non-Qualified Contracts................. 27
Penalty Tax............................................................ 27
Qualified Plans........................................................ 27
Qualified Pension and Profit Sharing Plans......................... 27
Individual Retirement Annuities and Individual Retirement Accounts. 28
Roth IRAs.......................................................... 28
Tax-Sheltered Annuities............................................ 28
Section 457 Deferred Compensation ("Section 457") Plans............ 28
Tax Treatment of Withdrawals - Qualified Contracts................. 28
Restrictions under Qualified Contracts............................. 29
General................................................................ 29
ADDITIONAL INFORMATION ABOUT THE SEPARATE ACCOUNT........................... 29
Addition, Deletion or Substitution of Investments...................... 29
PERFORMANCE MEASURES........................................................ 30
Standard Average Annual Total Return................................... 30
Additional Performance Measures........................................ 30
VOTING RIGHTS............................................................... 31
LEGAL PROCEEDINGS........................................................... 31
AVAILABLE INFORMATION....................................................... 31
APPENDIX I - SURRENDER CHARGE CALCULATION................................... 32
APPENDIX II - INTEREST RATE FACTOR ADJUSTMENT CALCULATION................... 33
APPENDIX III - EXAMPLES..................................................... 36
APPENDIX IV - INDIVIDUAL RETIREMENT ANNUITY DISCLOSURE...................... 37
ADDITIONAL INFORMATION...................................................... 40
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Definitions
Accumulation Period: The period from the Contract Issue Date through the day
preceding the Annuity Income Date.
Accumulation Unit: A unit of measure used to determine the value of the
Separate Account Balance during the Accumulation Period.
Annuitant: The person upon whose life the Annuity Income payments are to be
made. On or after the Annuity Income Date, the Annuitant shall also include any
Joint Annuitant selected in accordance with Annuity Income Options.
Annuity Income: The payments that will begin on the Annuity Income Date. The
amount of Annuity Income payments will be based on the Contract Balance and the
age(s) and sex(es) of the Annuitant (and Joint Annuitant, if Annuity Option C or
D is elected), as well as on the Annuity Option selected.
Annuity Income Date: The date on which the Annuity Income payments begin. The
earliest Annuity Income Date that may be elected is the fifth anniversary of the
Contract Issue Date. The latest Annuity Income Date that may be elected is the
Annuitant's 90th birthday, unless a shorter period is required by applicable
state law.
Annuity Options: Options available for payment of Annuity Income.
Annuity Period: The period which begins on the Annuity Income Date and ends with
the last Annuity Income payment.
Annuity Service Center: Notices, Written Requests, and Purchase Payments under
the Contract must be sent to the Annuity Service Center, H562, P.O. Box 9067,
Springfield, MA 01102-9067, 1-800-272-2216.
Annuity Unit: A unit of measure used to determine the amount of each Variable
Annuity Income payment.
Application: The document signed by the Contract Owner that evidences the
Contract Owner's application for the Contract.
Beneficiary: The person(s) designated to receive the Death Benefit provided
under the Contract.
Code: The Internal Revenue Code of 1986, as amended.
Contingent Annuitant: The person designated to receive all of the benefits
otherwise due the Annuitant if the Annuitant dies before the Annuity Income
Date, provided such person is less than 85 years of age on the Annuitant's date
of death.
Contract: The Panorama Plus individual flexible premium deferred annuity
contract, or the individual certificate issued under a Panorama Plus group
flexible premium deferred annuity contract, that is described in this
Prospectus.
Contract Balance(s): The sum of the General Account Balance and the Separate
Account Balance.
Contract Issue Date: The date on which the Contract becomes effective.
Contract Owner: The person or entity entitled to the ownership rights stated in
the Contract.
Contract Year: The first Contract Year is the annual period which begins on the
Contract Issue Date. Subsequent Contract Years begin on each anniversary of the
Contract Issue Date.
Five-Year Period: Any of the successive five-year periods which begin on the
date of the initial Purchase Payment to the General Account.
Fixed Annuity: An annuity with payments that do not vary as to dollar amount.
Funds: The Separate Account invests in shares of various investment Portfolios
of two mutual funds ("Funds"): the Panorama Series Fund, Inc. ("Panorama Fund")
and the Oppenheimer Variable Account Funds ("OVAF"). Both Funds are diversified,
open-end management investment companies. The following six (6) Portfolios are
available under the Contract: the Oppenheimer Money Fund ("Money Portfolio") and
the Oppenheimer Bond Fund ("Bond Portfolio") of OVAF, and the Government
Securities Portfolio, the Total Return Portfolio, the Growth Portfolio, and the
International Equity Portfolio of the Panorama Fund. Each Portfolio is managed
for investment purposes as if it were a separate investment company issuing its
own shares.
General Account: The portion of the Contract, if any, which is credited with a
specified interest rate, and which is held as part of the general assets of C.M.
Life and not as part of the Separate Account.
General Account Balance: The value of the General Account during the
Accumulation Period.
Guaranteed Interest Rate: The effective annual interest rate which C.M. Life
will credit on the General Account Balance. The Guaranteed Interest Rate will be
reset quarterly in the sole discretion of C.M. Life, and will never be less than
3%. Although this minimum interest rate is guaranteed, there is no guaranteed
Surrender Value.
Investment Accounts: The General Account and Separate Account available for
Purchase Payments under the Contract.
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Net Purchase Payment: A Purchase Payment less any Premium Tax.
Premium Tax: A tax imposed by certain states when a Purchase Payment is made,
when Annuity Income begins, or when the Contract is Surrendered.
Purchase Payment: A deposit made to the Contract.
Revision Date: The date of any revised Contract schedule. A revised Contract
schedule bearing the latest Revision Date will supersede all previous Contract
schedules.
Separate Account: C.M. Life's Panorama Plus Separate Account, which consists of
assets set aside by C.M. Life, the investment performance of which is kept
separate from that of the general assets and all other separate account assets
of C.M. Life.
Separate Account Balance: The value of the Separate Account during the
Accumulation Period.
Sub-Account: Separate Account assets are divided into Sub-Accounts which are
listed in the Contract Schedule. Assets of each Sub-Account will be invested in
shares of a corresponding Portfolio or Fund. C.M. Life reserves the right to
eliminate or add Sub-Accounts and to change investment companies, or to
substitute other investments for Fund shares, in accordance with the applicable
provisions of the Investment Company Act of 1940, as amended.
Surrender: An election in the form of a Written Request by the Contract Owner
made prior to the Annuity Income Date and before a Death Benefit has become
payable, to withdraw all or a portion of the Contract Balance in exchange for a
cash payment.
Surrender Value: The proceeds payable upon a Surrender of the Contract, equal to
the Contract Balance (a) minus any applicable Surrender Charge, (b) minus the
Contract Maintenance Fee, (c) minus any applicable Premium Tax, and (d) plus or
minus any applicable interest Rate Factor Adjustment. There is no guaranteed or
minimum Surrender Value.
Treasury Index Rates: The annual interest rates payable on U.S. Treasury
securities with l-year, 2-year, 3-year, and 5-year maturities, published weekly
by the Federal Reserve. Index Rates for intermediate periods shall be
interpolated from the applicable interest rates.
Valuation Date: Every day on which C.M. Life and the New York Stock Exchange
("NYSE") are open for business, except any day on which trading on the NYSE is
restricted, or on which an emergency exists, as determined by the Securities and
Exchange Commission ("SEC"), or respective governing bodies of the NYSE so that
valuation or disposal of securities is not practicable.
Valuation Period: The period of time beginning on the day following any
Valuation Date and ending on the next Valuation Date. A Valuation Period may be
more than one day.
Valuation Time: The time of the close of the New York Stock Exchange (currently
4:00 p.m. New York time) on a Valuation Date. All actions which are to be
performed on a Valuation Date will be performed as of the Valuation Time.
Variable Annuity: An annuity with payments which vary as to dollar amount in
relation to the investment performance of specified Sub-Accounts of the Separate
Account.
Window Period: The last thirty (30) days of each Five-Year Period. During a
Window Period, part or all of the General Account Balance may be transferred to
any Sub-Account of the Separate Account or surrendered without incurring a
Surrender Charge or an Interest Rate Factor Adjustment. Also, part or all of the
Separate Account Balance may be surrendered without incurring a Surrender Charge
during the Window Period.
Written Request: A request in writing, in a form satisfactory to C.M. Life,
which is received by the Annuity Service Center.
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THE PANORAMA PLUS ANNUITY
Summary
The Contract
The Panorama Plus Annuity is an individual and group flexible premium deferred
variable annuity which can be purchased on a non-tax-qualified basis
("Non-qualified Contract") or with the proceeds from certain plans qualifying
for favorable federal income tax treatment ("Qualified Contract"). The Contract
Owner allocates Purchase Payments among two Investment Accounts of C.M. Life:
the Panorama Plus Separate Account (the "Separate Account") and the General
Account.
Purchase Payments
A Contract may be purchased with a minimum initial Purchase Payment of at least
$500. From time to time, this minimum initial Purchase Payment may be changed.
The Contract Owner may make additional Purchase Payments of at least $50 each at
any time before the Annuity Income Date. Subsequent Purchase Payments allocated
to the General Account are limited in amount, based in part on prior Purchase
Payment allocations to that Account. (See Purchase Payments).
The Panorama Plus Investment Accounts
On the Contract Issue Date, the initial Net Purchase Payment is allocated among
the Investment Accounts (that is, among the General Account and/or the
Sub-Accounts of the Separate Account) in accordance with the allocation
percentages specified by the Contract Owner in the Application. Allocation
changes for subsequent Purchase Payments may be made by sending a Written
Request to the Annuity Service Center. Allocation changes will be effective when
the Annuity Service Center receives a Written Request in good order.
The Separate Account. The Separate Account, a separate account of C.M. Life,
invests in shares of various investment Portfolios of two mutual funds
("Funds"): the Panorama Series Fund, Inc. ("the Panorama Fund") and the
Oppenheimer Variable Account Funds ("OVAF"). In addition to the Money Fund and
the Bond Fund of OVAF, four (4) Portfolios of the Panorama Fund are currently
available under the Contract: the Government Securities Portfolio, the Total
Return Portfolio, the Growth Portfolio, and the International Equity Portfolio.
Each of the six Sub-Accounts of the Separate Account invests solely in a
corresponding Portfolio or Fund. Because the Separate Account Balance will
increase or decrease depending on the investment experience of the selected
Sub-Accounts, the Contract Owner bears the entire investment risk with respect
to Purchase Payments allocated to, and amounts transferred to, the Separate
Account. (See The Separate Account).
The General Account. The General Account provides for fixed accumulations and a
specified interest rate on Purchase Payments allocated to, and amounts
transferred to, the General Account. The interest rate will be reset
periodically, currently quarterly, at the sole discretion of C.M. Life. The
General Account Balance may be subject to an Interest Rate Factor Adjustment
upon Surrender and on the Annuity Income Date. (See Interest Rate Adjustment
Factor). The Interest Rate Factor Adjustment does not apply to Contracts issued
to Pennsylvania residents. Because of this adjustment and for other reasons, the
amount payable upon Surrender, or applied to Annuity Income payments, may be
more or less than the General Account Balance at that time, and more or less
than the total Purchase Payments allocated to and amounts transferred to the
General Account. Thus, the Contract Owner is subject to some investment risk
with respect to the General Account Balance. (See The General Account).
Transfers
The Contract Owner may transfer amounts from one Investment Account or
Sub-Account to another Investment Account or Sub-Account, with certain
limitations, during the Accumulation Period (i.e., prior to the Annuity Income
Date). The Beneficiary may exercise this right if a Death Benefit has become
payable. The minimum transfer amount is $100. In addition, the total of all
transfers to or from the General Account during any Contract Year is limited to
the greater of (a) 30% of the General Account Balance as of the end of the
immediately preceding Contract Year, or (b) $25,000. Additional limitations
apply to transfers to or from the General Account and the Money Sub-Account.
(See Transfers).
During the Annuity Period (i.e., after the Annuity Income Date), a portion of
the Separate Account Balance may be transferred from one Sub-Account to any
other Sub-Account once during any Contract Year. Transfers to or from the
General Account are not permitted during the Annuity Period. (See Transfers).
Dollar Cost Averaging
There are three Dollar Cost Averaging options available to the Contract Owner.
First, the Contract Owner may elect to transfer fixed dollar amounts at regular
intervals from one Sub-Account to another Sub-Account, and to change the fixed
dollar amount and the Sub-Accounts selected. As a second option, the Contract
Owner may elect to transfer fixed dollar amounts from the General Account to
Sub-Accounts (other than the Money Market Sub-Account). Total transfers from the
General Account are limited in the Contract Year of the initial Purchase Payment
to the greater of: (i) 30% of the initial Purchase Payment; or (ii) $25,000. In
subsequent Contract Years, total transfers from the General Account are limited
to the greater of: (i) 30% of the General Account Balance as of the end of the
immediately preceding Contract Year; or (ii) $25,000. The timing of the election
of this option is restricted. As a third option, the Contract Owner may elect to
transfer the credited interest of the General Account at specified intervals to
one or more of the Sub-Accounts (other than the Money Market Sub-Account). A
General Account Balance of at least $5,000 must be available at the time of each
transfer. Only one Dollar Cost Averaging option may be in effect at any one
time.
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There currently is no charge for Dollar Cost Averaging. However, the Company
reserves the right to charge for Dollar Cost Averaging in the future. The
Contract Owner may not simultaneously participate in both Dollar Cost Averaging
and Systematic Withdrawals. Changes in the Dollar Cost Averaging option may only
be made by Written Request from the Contract Owner to terminate the existing
Dollar Cost Averaging option, accompanied by a Written Request identifying the
new Dollar Cost Averaging option selected. For more details see Dollar Cost
Averaging further along in this prospectus.
Surrenders
The Contract Owner may elect to Surrender all or a portion ($100 minimum per
partial surrender) of the Contract Balance in exchange for a cash payment from
C.M. Life at any time during the Accumulation Period and prior to payment of the
Death Benefit. Following any partial Surrender, the Contract Balance must be at
least $250. Partial Surrenders may be withdrawn from both the General Account
Balance and the Separate Account Balance. Partial and full Surrenders are
subject to any applicable Surrender Charge, Interest Rate Factor Adjustment, and
Contract Maintenance Fee. There is currently no limit on the frequency or timing
of Surrenders. (See Surrenders.) Please note, federal income taxes and a tax
penalty may be applicable. (See Tax Status.)
There is no guaranteed or minimum Surrender Value, so regardless of the extent
to which Purchase Payments are allocated to the Separate Account or to the
General Account, the proceeds of a full Surrender (that is, the Surrender Value)
could be less than the total Purchase Payments.
Systematic Withdrawals
Upon Written Request, the Contract Owner may elect Systematic Withdrawals ($100
minimum per withdrawal) to begin on or after the first anniversary of the
Contract Issue Date during the Accumulation Period. There is currently no charge
for Systematic Withdrawals. However, the Company reserves the right to charge
for Systematic Withdrawals in the future. The Contract Owner may not
simultaneously participate in both Systematic Withdrawals and Dollar Cost
Averaging.
Systematic Withdrawals changes may only be made by Written Request from the
Contract Owner to terminate the existing Systematic Withdrawals program
accompanied by a Written Request identifying the new Systematic Withdrawals
election.
Systematic Withdrawals may result in tax liabilities. (See Tax Status.)
Terminal Illness Benefit
In the event that a Contract Owner becomes terminally ill during the
Accumulation Period and prior to age 75, the Contract Owner may elect, unless
prohibited by law, by submission of a Written Request, a Terminal Illness
Benefit equal to the greater of (a) the Purchase Payments less any prior
withdrawals and charges; or (b) the Contract Balance.
(See Terminal Illness Benefit.)
Death Benefit
In the event that the Contract Owner or Annuitant dies prior to the Annuity
Income Date, a Death Benefit is payable upon receipt of satisfactory proof of
death of the Contract Owner or the Annuitant, an election of the Death Benefit
Option and return of the Contract. The Death Benefit will at least equal the
Contract Balance at the time of payment. No Surrender Charge, Interest Rate
Factor Adjustment, or Contract Maintenance Fee is imposed upon amounts received
as a Death Benefit. (If the Annuitant dies before the Contract Owner and there
is a Contingent Annuitant who is less than 85 years of age on the Annuitant's
date of death, and such Contract Owner is a natural person, no Death Benefit is
payable, and the Contract continues in force, with the Contingent Annuitant
becoming the Annuitant.) (See Death Benefit.)
Charges and Deductions
Surrender Charge. To help defray sales expenses, a 5% Surrender Charge will be
deducted from the Contract Balance in the event of any partial or full Surrender
during the first five (5) Contract Years. However, beginning in the second
Contract Year, a Free Surrender Amount, equal to 10% of the Contract Balance as
of the end of the immediately preceding Contract Year, will be exempt from any
Surrender Charge (and any Interest Rate Factor Adjustment see below). In
addition, no Surrender Charge or Interest Rate Factor Adjustment is imposed on
partial or full Surrenders during the Window Period, which is the last thirty
(30) days of each Five-Year Period. C.M. LIFE GUARANTEES THAT THE AGGREGATE
SURRENDER CHARGE WILL NEVER EXCEED 8.5% OF THE TOTAL PURCHASE PAYMENTS MADE
UNDER THE CONTRACT. (See Surrender Charge.)
Interest Rate Factor Adjustment. An Interest Rate Factor Adjustment may be
applied in the event of any partial or full Surrender of the General Account
Balance during the Accumulation Period, and on the Annuity Income Date (if the
General Account Balance is applied to a Variable Annuity Option). The Interest
Rate Factor Adjustment does not apply to amounts invested in the Separate
Account or to Contracts issued to Pennsylvania residents.
The Interest Rate Factor Adjustment may be positive or negative. It is based on
interest rates payable on U.S. Treasury securities. In general, if rates on U.S.
Treasury securities are higher when you Surrender than when you made the
applicable Purchase Payments (or up to .30% lower), a negative Interest Rate
Factor Adjustment may be applied, and on a full Surrender of your General
Account Balance, you could receive an amount lower than the amount of Purchase
Payments made (even for Purchase Payments allocated to the General Account).
However, if rates on U.S. Treasury securities are more than .30% lower when you
Surrender than when you made the applicable Purchase Payments, a positive
Interest Rate Factor Adjustment may be applied, and on a full Surrender of your
General Account Balance, you could receive an amount higher than the amount of
Purchase Payments made, plus interest. (For par-
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tial Surrenders of the General Account Balance, the Interest Rate Factor
Adjustment will be added to or subtracted from the remaining General Account
Balance.) No Interest Rate Factor Adjustment will be applied during the Window
Period; in addition, no Interest Rate Factor Adjustment will be applied to the
General Account Free Surrender Amount. (See Interest Rate Factor Adjustment.)
Separate Account Charges. C.M. Life deducts a daily charge equal to a percentage
of the net assets in the Separate Account for the mortality and expense risks
assumed by C.M. Life under the Contracts. The effective annual rate of this
charge currently is 1.07%. It may increase but it will not exceed an effective
annual rate of 1.25% of the average daily value of the Separate Account's net
assets. (See Mortality and Expense Risk Charge.)
C.M. Life also deducts a daily Administrative Expense Charge from the net assets
of each of the Sub-Accounts of the Separate Account to partially cover expenses
incurred by C.M. Life in connection with the administration of the Separate
Account and the Contract. This charge is currently at an effective annual rate
of 0.07% and it may increase, but the annual charges for mortality and expense
risks and administrative expenses are guaranteed not to exceed an effective
annual rate of 1.50% of the daily value of the Separate Account's net assets.
(See Administrative Expense Charge.)
Contract Charges. There is also an annual Contract Maintenance Fee imposed each
year for Contract maintenance and related administrative expenses. This charge
is currently $30 per Contract. It will be calculated as a pro rata portion of
the balance of each Sub-Account and the General Account, and deducted from the
Contract Balance on the last day of each Contract Year during the Accumulation
Period, and upon Full Surrender of the Contract. For Contracts issued to
Pennsylvania residents, the Fee will be calculated as a pro rata portion of the
balance of each Sub-Account. The Contract Maintenance Fee may increase but it
will not exceed $60 per Contract Year. (See Contract Maintenance Fee.)
Taxes. C.M. Life may incur Premium Taxes relating to the Contracts. Depending
upon applicable state law, C.M. Life will deduct any Premium Taxes related to a
particular Contract from Purchase Payments, from the Contract Balance upon
Surrender, or on the Annuity Income Date. (See Premium Taxes.) No charges are
currently made against the Sub-Accounts for federal, state, or local taxes other
than Premium Taxes. However, C.M. Life may deduct charges for such taxes in the
future. (See Federal, State and Local Taxes.)
Charges Against the Funds. The value of the net assets of the Sub-Accounts of
the Separate Account will reflect the investment advisory fee and other expenses
incurred by the Portfolios of the Funds.
Right to Return the Contract
No Surrender Charge will be applied if the Contract Owner returns the Contract
to the Annuity Service Center for cancellation during the first fifteen (15)
calendar days following the Contract Issue Date (or a longer period, if required
by law). The Contract must be accompanied by a written request signed by the
Contract Owner that indicates the Contract Owner wishes to return the Contract.
Upon return of the Contract during this period, C.M. Life will refund the
Separate Account Balance and any Purchase Payments made to the General Account.
If required by state law, C.M. Life will refund all Purchase Payments received
upon cancellation of the Contract.
Federal Income Tax Consequences of Investment in the Contract
With respect to Contract Owners who are natural persons, there should be no
federal income tax on increases in the Contract Balance (if any) until a
distribution under the Contract occurs (e.g., a Surrender or Annuity Income
payment) or is deemed to occur (e.g., a pledge or assignment of a Contract).
Generally, a portion of any distribution or deemed distribution will be taxable
as ordinary income. The taxable portion of certain distributions will be subject
to withholding unless the recipient elects otherwise. In addition, a penalty tax
may apply to certain distributions or deemed distributions under the Contract.
(See Tax Status.)
Inquiries and Written Notices and Requests
Any questions about procedures or the Contract, or any Written Request required
to be directed to C.M. Life, should be sent to Annuity Service Center, H562,
P.O. Box 9067 Springfield, MA 01102-9067. Telephone requests and inquiries may
be made by calling 1-800-272-2216. All inquiries and Written Requests should
include the Contract number, the Contract Owner's name and the Annuitant's
name.
Variations in Contract Provisions
Certain provisions of the Contracts may vary from the descriptions in this
Prospectus in order to comply with different state laws. Any such variations
will be included in the Contract itself or in riders or endorsements.
Note: The foregoing summary is qualified in its entirety by the detailed
information in the remainder of this Prospectus, in the Statement of Additional
Information, in the prospectus for each Fund, and in the Contract, all of which
should be referred to for more detailed information. This Prospectus generally
describes only the Contract, the Separate Account and the General Account. A
separate prospectus attached hereto describes each Fund.
8
<PAGE>
Table of Fees and Expenses
<TABLE>
<S> <C>
Contract Owner Transaction Expenses/1/
Sales Load On Purchase Payments................ None
Maximum Surrender
(as a % of Contract Balance Surrendered)..... 5% for Contract Years 1-5 and 0% thereafter.
Annual Contract Maintenance Fee................ $30 Per Contract
Transfer Fees.................................. Currently No Fee
Separate Account Annual Expenses
(as a percentage of Account value)
Mortality and Expense Risk Charge.............. 1.07%
Administrative Expense Charge.................. 0.07%
Total Separate Account Annual Expenses......... 1.14%
</TABLE>
<TABLE>
<CAPTION>
Money Government Total International
Market Securities Income Return Growth Equity
------ ---------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Portfolio Annual Expenses/2/
(as a percentage of average net assets)
Management Fees................................ 0.44% 0.53% 0.73% 0.54% 0.53% 1.00%
Other Expenses................................. 0.04% 0.12% 0.05% 0.01% 0.01% 0.12%
Total Portfolio Annual Expenses................ 0.48% 0.65% 0.78% 0.55% 0.54% 1.12%
</TABLE>
/1/ In addition to the Contract Owner transaction expenses reflected in the
table, an Interest Rate Factor Adjustment is applied to the amount of
General Account Balance under the Contract subject to full or partial
Surrender during the Accumulation Period, and on the Annuity Income Date
(if the General Account Balance is applied to a Variable Annuity Option),
unless the amount surrendered is a Free Surrender Amount, or the Surrender
is made during a Window Period (the Adjustment does not apply to Contracts
issued to Pennsylvania residents). The Interest Rate Factor Adjustment may
increase or decrease the General Account Balance Surrender proceeds.
/2/ The Portfolio expenses are actual expenses for each Portfolio for the
fiscal year ended December 31, 1997.
Examples
The Contract Owner would pay the following expenses on a $1,000 investment,
assuming a 5% annual return on assets (and assuming the entire Contract Balance
is allocated to the Separate Account).
1. If the Contract is surrendered at the end of the applicable time period:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market Sub-Account............... $69 $104 $ 93 $203
Government Securities Sub-Account...... 71 109 102 221
Income Sub-Account..................... 72 113 109 235
Total Return Sub-Account............... 70 106 97 210
Growth Sub-Account..................... 70 105 96 209
International Equity Sub-Account....... 75 123 127 271
</TABLE>
9
<PAGE>
2. If the Contract is not surrendered or annuitized:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market Sub-Account..................... $17 $54 $ 93 $203
Government Securities Sub-Account............ 19 59 102 221
Income Sub-Account........................... 21 64 109 235
Total Return Sub-Account..................... 18 56 97 110
Growth Sub-Account........................... 18 56 96 209
International Equity Sub-Account............. 24 74 127 271
</TABLE>
The above table and examples are intended to assist the Contract Owner in
understanding the costs and expenses that will be borne, directly or indirectly,
by Purchase Payments allocated to the Separate Account. The table and examples
reflect the charges and expenses anticipated for the Separate Account and
reflect the actual expenses for each Portfolio for the 1997 fiscal year. For a
more complete description of the various charges and expenses described in the
table and examples, see Charges and Deductions, and the prospectus for each
Fund. In addition to the expenses listed above, Premium Taxes may be
applicable.
THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
Panorama Plus Separate Account Of C.M. Life Insurance Company Condensed
Financial Information
The audited financial statements for the years ended December 31, 1997 and 1996
are included in the Statement of Additional Information, which is incorporated
by reference in this Prospectus.
ACCUMULATION UNIT VALUES
<TABLE>
<CAPTION>
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
Sub-Account 1992(a) 1992 1993 1994 1995 1996 1997
----------- ------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Money Market $1.000000 $1.012022 $1.027456 $1.054570 $1.100599 $1.147312 $1.194713
Government Securities $1.000000 $1.061901 $1.158653 $1.095471 $1.281804 $1.293638 $1.391852
Income $1.000000 $1.060916 $1.174260 $1.114759 $1.306525 $1.318102 $1.423761
Total Return $1.000000 $1.058946 $1.217379 $1.186187 $1.460595 $1.586635 $1.863659
Growth $1.000000 $1.064372 $1.276534 $1.258146 $1.711382 $2.014864 $2.517282
International Equity $1.000000 $0.950887 $1.146031 $1.145014 $1.251930 $1.400836 $1.497222
<CAPTION>
ACCUMULATION UNITS OUTSTANDING
<S> <C> <C> <C> <C> <C> <C>
Money Market 681,553 3,136,932 13,603,045 16,949,501 13,507,122 12,091,336
Government Securities 8,444,505 11,994,574 13,726,057 12,647,811 12,647,811 11,672,397
Income 2,564,029 12,281,025 16,488,930 20,617,764 22,192,539 21,424,948
Total Return 12,316,597 71,182,538 147,324,713 194,679,349 224,734,224 224,379,585
Growth 2,798,378 19,370,204 49,636,052 83,371,008 111,846,534 128,553,850
International Equity 742,623 5,578,969 22,419,639 31,322,974 40,507,658 44,128,995
</TABLE>
(a) Commencement of operations for the Sub-Accounts occurred on May 13, 1992.
10
<PAGE>
C.M. Life Insurance Company
C.M. Life, 140 Garden Street, Hartford, Connecticut 06154, is a stock life
insurance company. It was chartered by a special Act of the Connecticut General
Assembly on April 25, 1980. It is principally engaged in the sale of life
insurance and annuities, and is licensed in all states except New York. C.M.
Life is a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company
("MassMutual"). MassMutual is a mutual life insurance company specially
chartered by the Commonwealth of Massachusetts on May 14, 1851. It is currently
licensed to transact life (including variable life), accident, and health
insurance business in all states, the District of Columbia, Puerto Rico and
certain provinces of Canada. As of December 31, 1997, MassMutual had estimated
unconsolidated statutory assets in excess of $57 billion and estimated total
assets under management in excess of $152 billion.
Prior to February 29, 1996, C.M. Life was a wholly-owned subsidiary of
Connecticut Mutual Life Insurance Company ("Connecticut Mutual"). On February
29, 1996, Connecticut Mutual merged with and into MassMutual.
The merger did not affect any provisions of, or rights or obligations under, the
Contracts issued by C.M. Life. For more information about C.M. Life, see
Additional Information About The Separate Account.
The Panorama Plus Variable Annuity Contract
The Contract is an individual and group flexible premium deferred variable
annuity contract. In certain states the Contract is only available as a group
contract. In these states, a Certificate (also referred to herein as a
"Contract"), which summarizes the provisions of the group contract under which
the Certificate is issued, is issued to individuals. The rights and benefits
under the Contract are summarized below. However, the description of the
Contract contained in this Prospectus is qualified in its entirety by the
Contract itself, a copy of which is available upon request from C.M. Life. The
Contract may be purchased on a non-tax-qualified basis ("Non-qualified
Contract"). The Contract may also be purchased and used in connection with
retirement plans or individual retirement accounts that qualify for favorable
federal income tax treatment ("Qualified Contract").
Group contracts may be issued to any employer, entity, or other group acceptable
to C.M. Life. An eligible member of a group to which a group contract has been
issued may become a participant by completing an Application and forwarding an
initial Purchase Payment to C.M. Life. The rights and benefits of a participant
under a group contract are summarized in a certificate issued to the
participant. Provisions of the group contract are controlling. All rights and
benefits may be exercised by the participant without the consent of the group
contract owner. Unless otherwise stated, the rights and benefits of an owner of
an Individual Panorama Plus Annuity and an owner of a certificate under a group
Panorama Plus Annuity are the same. Accordingly, as used herein, the term
"Contract" means either an individual annuity or a certificate under a group
annuity, depending on the state where it is issued.
There is no guaranteed or minimum Surrender Value under the Contract, so the
amount received on Surrender could be less than the amount of Purchase Payments.
Contract Application and Issuance of Contracts
Before it will issue a Contract, C.M. Life must receive a completed Application,
related forms and an initial Purchase Payment of at least $500. From time to
time, this initial Purchase Payment may be reduced. C.M. Life reserves the right
to reject any Application or Purchase Payment.
If the Application and related forms are properly completed and can be accepted
in the form received, any initial Net Purchase Payment will be credited to the
Contract Balance within two (2) business days after the later of receipt of the
Application and related forms or receipt of the initial Purchase Payment at the
Annuity Service Center. (The Net Purchase Payment is the total Purchase Payment
less any applicable Premium Tax.) If the initial Net Purchase Payment allocated
to the Separate Account cannot be credited because the Application or other
issuing requirements are incomplete, the applicant will be contacted within five
(5) business days and given an explanation for the delay, and the initial
Purchase Payment will be returned at the end of the five day period unless the
applicant consents to C.M. Life's retaining the initial Purchase Payment and
crediting it as soon as the necessary requirements are fulfilled.
The date on which the initial Net Purchase Payment is credited to the Contract
Balance is the Contract Issue Date. The Contract Issue Date is the date used to
determine Contract Years and Contract anniversaries.
The Contract Owner may return the Contract for cancellation during the first
fifteen (15) calendar days following the Contract Issue Date (or a longer
period, if required by law). Upon return of the Contract, C.M. Life will refund
the Separate Account Balance (as of the date the returned Contract and
cancellation request are received in good order at the Annuity Service Center)
and any Purchase Payments allocated to the General Account. For Contracts issued
in the States of North Carolina, South Carolina or Washington, C.M. Life will
refund all Purchase Payments received upon cancellation of the Contract during
this period, net of surrenders.
Electronic Data Transmission of Application Information. C.M. Life will accept,
by agreement with certain broker-dealers, electronic data transmissions of
Application information, along with wire transmittals of initial Purchase
11
<PAGE>
Payments, from these broker-dealers to the Annuity Service Center for purchase
of the Contract. Please contact the Annuity Service Center to receive more
information about electronic data transmission of Application information.
Purchase Payments
All Purchase Payment checks or drafts should be made payable to C.M. Life
Insurance Company and sent to the Annuity Service Center.
Initial Purchase Payment. The minimum initial Purchase Payment that C.M. Life
currently will accept under a Contract is $500. C.M. Life reserves the right to
increase or decrease this amount for Contracts issued after some future date.
The initial Purchase Payment is the only Purchase Payment required to be paid
under a Contract. However, this initial Purchase Payment may be waived in the
case of certain salary reduction/employer contribution arrangements or Automatic
Investment Plans, in which case the minimum contribution will be $40 per month
per participant.
Additional Purchase Payments. Before a Death Benefit has become payable and
prior to the Annuity Income Date, the Contract Owner may make additional
Purchase Payments at any time, and in any frequency. The minimum additional
Purchase Payment is $50. If the Annuitant is age 76 or older as of the Contract
Issue Date, cumulative Purchase Payments under the Contract without prior
consent of C.M. Life may not exceed $500,000. If the Annuitant is younger than
age 76 as of the Contract Issue Date, cumulative Purchase Payments may not
exceed $1,000,000 without the prior consent of C.M. Life.
Allocation of Purchase Payments. The Contract Owner must allocate Purchase
Payments to one or more of the Sub-Accounts or to the General Account, or some
combination thereof. The Contract Owner must specify the initial allocation in
the Application. This allocation will be used for additional Purchase Payments
unless the Contract Owner requests a change of allocation. If the Contract Owner
fails to specify how Purchase Payments are to be allocated, the Purchase
Payment(s) cannot be accepted. Additional Purchase Payments allocated to the
Separate Account will be credited to the Contract and added to the Contract
Balance as of the Valuation Period when they are received. Purchase Payments
allocated to the General Account will be credited with interest from the day
after deposit.
After the first Contract Year, the Purchase Payments allocated to the General
Account during any Contract Year may not exceed the greater of: (i) 125% of the
average annual Purchase Payments allocated to the General Account during the
last five (5) full Contract Years (or all years, if less than five (5)); or (ii)
$25,000. This restriction does not apply during the Window Period.
The Contract Owner may change the allocation instructions for future Purchase
Payments by sending a Written Request, signed by such Contract Owner, to the
Annuity Service Center. The allocation change will apply to Purchase Payments
received with the Written Request and after the Valuation Period in which the
Written Request is received.
Payment Not Honored by Bank. Any payment due under the Contract which is
derived, all or in part, from any amount paid to C.M. Life by check or draft may
be postponed until such time as C.M. Life determines that such check or draft
has been honored.
Contract Balance
On the Contract Issue Date, the accepted Contract Balance equals the initial Net
Purchase Payment. Thereafter, the Contract Balance equals the sum of the
Separate Account Balance and the General Account Balance. The Contract Balance
will increase by (1) any additional Purchase Payments accepted by C.M. Life, and
(2) any increases in the Contract Balance due to investment results of the
selected Investment Account or Sub-Account. The Contract Balance will decrease
by (1) any Surrenders, including applicable charges, (2) any decreases in the
Contract Balance due to investment results of the selected Sub-Accounts, and (3)
charges imposed by C.M. Life. The Interest Rate Factor Adjustment imposed upon
partial Surrenders may also increase or decrease the remaining Contract Balance.
The Contract Balance is expected to change from Valuation Period to Valuation
Period, reflecting the investment experience of the selected Sub-Account(s), as
well as deductions for charges. A Valuation Period is the period between
successive Valuation Dates. It begins at the close of business on each Valuation
Date and ends at the close of business on the next succeeding Valuation Date.
Holidays are generally not Valuation Dates.
The Separate Account Balance. When a Net Purchase Payment is allocated to, or an
amount is transferred to, a Sub-Account of the Separate Account, it is credited
to the Contract in the form of Accumulation Units. Each Sub-Account of the
Separate Account has a distinct Accumulation Unit value. The number of
Accumulation Units credited is determined by dividing the Net Purchase Payment,
or amount transferred, by the dollar value of one Accumulation Unit of the Sub-
Account as of the end of the Valuation Period during which the allocation is
made. When amounts are transferred out of, or Surrendered from, a Sub-Account,
Accumulation Units are cancelled or redeemed in a similar manner.
For each Sub-Account, the Accumulation Unit value for a given Valuation Period
is based on the net asset value of a share of the corresponding Portfolio or
Fund. Therefore, the Accumulation Units will fluctuate in value from day to day
based on the investment experience of the corresponding Portfolio, and the
Separate Account Balance will decrease or increase to reflect the investment
performance of the corresponding Portfolio. The Separate Account Balance also
reflects expenses borne by the Portfolio(s) and the deduction of
12
<PAGE>
certain charges. The determination of Sub-Account Accumulation Unit values is
described in detail in the Statement of Additional Information.
The General Account Balance. When a Net Purchase Payment is allocated or an
amount is transferred to the General Account, it is credited to the General
Account Balance. In addition, interest at a specified interest rate is credited
to the General Account Balance. When amounts are transferred out of, or
Surrendered from, the General Account, the General Account Balance is reduced
accordingly. Unlike the Separate Account, there are no Accumulation Units in the
General Account. (See The General Account.)
Minimum Contract Balance. A minimum Contract Balance of $250 must be maintained
during the Accumulation Period. If the Contract Owner fails to maintain the
minimum Contract Balance, then C.M. Life may, upon sixty (60) days notice,
terminate the Contract, and return the Contract Balance, minus any applicable
fees or charges, to the Contract Owner. If the Contract Owner makes sufficient
Purchase Payments to restore the Contract Balance to the minimum Contract
Balance within sixty (60) days of the date of notice, the Contract will continue
in force.
Panorama Plus Investment Accounts
Purchase Payments paid under a Contract may be allocated to one or more of the
six Sub-Accounts of the Separate Account, to the General Account, or to a
combination of these Investment Accounts. There is no guaranteed or minimum
Surrender Value for any Purchase Payments, or with respect to amounts allocated
to any Investment Account.
The Separate Account
Panorama Plus Separate Account. The Panorama Plus Separate Account of C.M. Life
Insurance Company (the "Separate Account") was established as a separate
account under the laws of the State of Connecticut, on September 25, 1991. The
Separate Account will receive and invest the Net Purchase Payments under the
Contracts that are allocated to it as well as amounts transferred to it in
shares of two mutual funds ("Funds"): the Panorama Series Fund, Inc. (the
"Panorama Fund") (formerly known as Connecticut Mutual Financial Services Series
Fund I, Inc.) and the Oppenheimer Variable Account Funds ("OVAF").
The Separate Account currently is divided into six (6) SubAccounts. Additional
Sub-Accounts may be established in the future at the discretion of C.M. Life.
Each Sub-Account invests exclusively in shares of a corresponding Portfolio of
the Funds.
Under Connecticut law, the assets of the Separate Account are owned by C.M.
Life, but they are held separately from the other assets of C.M. Life, and are
not chargeable with liabilities incurred in any other business operation of C.M.
Life (except to the extent that assets in the Separate Account exceed the
reserves and other liabilities of the Separate Account). Income, gains, and
losses incurred on the assets in the Sub-Accounts of the Separate Account,
whether or not realized, are credited to or charged against that Sub-Account,
without regard to other income, gains or losses of any other Investment Account
or Sub-Account of C.M. Life. Therefore, the investment performance of any
Sub-Account is entirely independent of the investment performance of C.M. Life's
general account assets or any other separate account maintained by C.M. Life.
The Contract Owner bears the entire investment risk with respect to the Contract
Balance allocated to the Separate Account, and the Separate Account Balance will
be more or less than the total of the Net Purchase Payments allocated to, and
transfers into, the Separate Account.
The Separate Account is registered with the Securities and Exchange Commission
(the "SEC") under the Investment Company Act of 1940, as amended, (the "1940
Act") as a unit investment trust. It meets the definition of a "separate
account" under the federal securities laws. However, the SEC does not supervise
the management or the investment practices or policies of the Separate Account
or of C.M. Life.
The Funds. The Separate Account will invest exclusively in shares of the
Panorama Fund and OVAF ("Funds"), each of which is a series-type mutual fund
registered with the SEC under the "1940 Act" as an open-end, diversified
management investment company. In addition to the Money Fund and Bond Fund of
OVAF, four (4) Portfolios of the Panorama Fund are currently available under the
Contract: the Government Securities Portfolio, the Total Return Portfolio, the
Growth Portfolio, and the International Equity Portfolio. The assets of each
investment option are held separately from the assets of the other investment
options, and each investment option has its own distinct investment objective
and policies. Each investment option operates as a separate investment fund, and
the income or losses of one Portfolio have no effect on the investment
performance of any other investment option.
13
<PAGE>
The investment objective of each of the available investment options is stated
as follows:
Money Seeks the maximum current income from investments in "money
Fund market" securities consistent with low capital risk and the
maintenance of liquidity. There can be no assurance that the
Money Portfolio will maintain a stable net asset value per
share of $1, and the Money Portfolio is not insured or
guaranteed by the U.S. Government.
Government To seek a high level of current income with a high degree of
Securities safety of principal, by investing primarily in securities that
Portfolio are issued by or guaranteed as to principal and interest by
the U.S. Government, its agencies, authorities or
instrumentalities and in obligations that are fully
collateralized or otherwise fully backed by U.S. Government
Securities.
Bond Seeks a high level of current income by investing primarily
Fund in debt securities. As a secondary investment objective, the
Bond Fund seeks capital growth when consistent with its
primary objective.
Total Return Seeks to maximize the total investment return (including
Portfolio capital appreciation and income) by allocating its assets
among stocks, corporate bonds, securities issued by the U.S.
Government and its instrumentalities, and money market
instruments according to changing market conditions.
Growth Seeks long-term growth of capital by investing primarily in
Portfolio common stocks with low price-earnings ratios and better than
anticipated earnings. Realization of income is a secondary
consideration.
International Seeks to provide long-term growth of capital by investing,
Equity Portfolio under normal market conditions, at least 90% of its assets in
equity securities (such as common stocks) of companies whose
primary stock market is outside the U.S.
OppenheimerFunds, Inc. ("OFI"), an investment adviser registered with the SEC
under the Investment Advisers Act of 1940, as amended, ("Investment Advisers
Act") is the investment adviser to the Funds. OFI has operated as an investment
adviser since 1959 and, including a subsidiary, manages investment companies
with more than $75 billion in assets and over 3.5 million shareholder accounts
as of December 31, 1997. OFI is owned by Oppenheimer Acquisition Corp., a
holding company that is owned in part by senior officers of OFI and controlled
by MassMutual. The address of OFI is Two World Trade Center, New York, NY
10048-0203.
Babson-Stewart Ivory International ("Babson-Stewart") provides sub-advisory
services to the International Equity Portfolio pursuant to a sub-advisory
agreement between Babson-Stewart and OFI. Babson-Stewart is located at One
Memorial Drive, Cambridge, MA 02142, and is a partnership formed in 1987 between
David L. Babson & Co., Inc., a subsidiary of MassMutual, and Stewart Ivory &
Co., Ltd., located in Edinburgh, Scotland.
THERE IS NO ASSURANCE THAT ANY PORTFOLIO WILL ACHIEVE ITS STATED OBJECTIVE. More
detailed information, including a description of each Portfolio's investment
objective and policies and a description of risks involved in investing in each
of the Portfolios and of each Portfolio's fees and expenses is contained in the
prospectus for the Funds, a current copy of which is attached to this
Prospectus. Information contained in the prospectuses for the Funds should be
read carefully before making allocations to a Sub-Account of the Separate
Account.
The General Account
The General Account is made up of all of the assets of C.M. Life other than
those allocated to separate accounts. Purchase Payments will be allocated to the
General Account to the extent elected by the Contract Owner at the time of the
initial Purchase Payment or as subsequently elected. Subject to certain
limitations, all or part of the Separate Account Balance may be transferred to
the General Account as described under "Transfers." Assets supporting amounts
allocated to the General Account become part of C.M. Life's general account
assets and are available to fund the claims of all classes of customers, policy
owners and other creditors of C.M. Life. Interests under the Contract relating
to the General Account are registered under the Securities Act of 1933, as
amended, ("1933 Act") but the General Account is not registered under the 1940
Act.
Contract Balances in the General Account will not share in the investment
performance of the General Account. Instead, C.M. Life will pay a specified rate
of interest on such balance. The interest rate credited to General Account
Balances will vary at the sole discretion of C.M. Life. The Contract Owner
should check with his or her registered representative or the Annuity Service
Center for current availability. However, C.M. Life will credit interest at an
effective annual rate of not less than 3% per year, compounded annually, to
amounts allocated to the General Account under the Contract. C.M. Life is not
obligated to credit any interest in excess of 3%. There is no specific formula
for the determination of the interest rate. Some of the factors that C.M. Life
may consider in determining the interest rate are: general economic trends;
14
<PAGE>
rates of return currently available and anticipated on C.M. Life's investments;
expected investment yields; regulatory and tax requirements; and competitive
factors. C.M. Life may, with respect to investments and average terms of
investments, use dedication (cash flow matching), and/or duration matching, or
other methods to minimize C.M. Life's risk in volatile interest rate
environments of not achieving the rates it is crediting. C.M. Life resets this
rate periodically. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE GENERAL
ACCOUNT IN EXCESS OF 3% PER YEAR WILL BE DETERMINED AT THE SOLE DISCRETION OF
C.M. LIFE. THE CONTRACT OWNER ASSUMES THE RISK THAT INTEREST CREDITED ON AMOUNTS
ALLOCATED TO THE GENERAL ACCOUNT MAY NOT EXCEED 3% PER YEAR. It currently resets
the rate quarterly, but in the future the rate may be reset more or less
frequently. The Contract Owner also assumes the risk that the Surrender Value of
amounts allocated to the General Account will be less than the General Account
Balance, and less than the Net Purchase Payments allocated to the General
Account.
Amounts held in the General Account are subject to an Interest Rate Factor
Adjustment explained later in this prospectus and in the prospectus for this
account which is attached.
Transfers
The Contract Owner may transfer Contract Balance amounts to or from the General
Account and/or any Sub-Account of the Separate Account, within certain limits,
as described below. Although no fee is currently imposed on transfers, C.M. Life
reserves the right to charge such a fee in the future, and to otherwise restrict
the transfer privilege in any way, or to eliminate it entirely.
During the Accumulation Period, the Contract Owner (or the Beneficiary, if a
Death Benefit has become payable) may transfer Contract Balance amounts, subject
to the following provisions.
. The Contract Owner signs and submits a Written Request for a transfer which
is received by the Annuity Service Center.
. The minimum transfer amount is $100.
. The total amount of all transfers to or from the General
Account during each Contract Year is limited to the greater of: (i) 30% of
the General Account Balance as of the end of the immediately preceding
Contract Year; or (ii) $25,000.
. Transfers between the General Account and the Money Sub-Account (together,
the "Competing Accounts") are only permitted during a Window Period. In
addition, for a period of ninety (90) days following a transfer out of one
Competing Account, no transfers (i.e., from any Account) may be made into
the other Competing Account.
. Similarly, for a period of ninety (90) days following a transfer into either
Competing Account, no transfers (i.e., to any Account) may be made out of
the other Competing Account.
During the Annuity Period, the Contract Owner (who may or may not be the
Annuitant) may transfer Separate Account Balance amounts, subject to the
following provisions.
. The Contract Owner signs and submits a Written Request for a transfer which
is received by the Annuity Service Center.
. Transfers to or from the General Account are not permitted during the
Annuity Period.
. Transfers during the Annuity Period may be made only once during any
Contract Year.
. Transfers between Sub-Accounts during the Annuity Period will be processed
based on the formula outlined in the Statement of Additional Information.
Contract Owners may elect to make transfers by telephone. To do so, the Contract
Owner must submit a completed Written Request electing the telephone transfer
privilege. Telephone requests must be received at the Annuity Service Center no
later than 4:00 Eastern Standard Time to assure same day pricing. Telephone
requests will not be accepted after that time. C.M. Life will use reasonable
procedures to confirm that instructions communicated by telephone are genuine.
If it does not, C.M. Life may be liable for any losses due to unauthorized or
fraudulent instructions. C.M. Life may tape record all telephone instructions.
C.M. Life will not be liable for any loss, liability, cost or expense incurred
by the Contract Owner for acting in accordance with such telephone instructions
believed to be genuine. The telephone transfer privilege may be discontinued by
C.M. Life at any time.
Dollar Cost Averaging
To the extent provided below, amounts from Sub-Accounts and the General Account
may be transferred at regular intervals. This election is called "Dollar Cost
Averaging."
Upon Written Request, a Contract Owner may elect Dollar Cost Averaging ("DCA")
to begin at any time during the Accumulation Period, except as otherwise
provided in DCA Option 2 - Fixed Dollar Amount Transfers described below. There
is currently no charge for DCA. However, the Company reserves the right to
charge for DCA in the future. The Contract Owner may not simultaneously
participate in both DCA and Systematic Withdrawals. (See Systematic
Withdrawals.)
DCA will begin when a properly completed Written Request from the Contract Owner
is received by the Company at least five (5) business days prior to the transfer
start date selected by the Contract Owner. If the DCA start date is less than
five
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(5) days after the date the Written Request is received by the Company, the
Company may defer the DCA start date for one (1) month. If no start date has
been selected, the Company will automatically start DCA within five (5) business
days after the Written Request is received.
If DCA is elected, the Contract Owner may direct the transfer of amounts at
regular intervals under one of the following options:
DCA OPTION 1 FROM THE SUB-ACCOUNTS - This option provides for the transfer
of fixed dollar amounts at regular intervals from any one Sub-Account to one
or more other Sub-Account(s), as elected by the Contract Owner. Transfers
must be at least $100 per transferee Sub-Account. Transfers to the General
Account are not permitted.
DCA OPTION 2 - FIXED DOLLAR AMOUNT TRANSFERS - This option provides for the
transfer of fixed dollar amounts at regular intervals from the General
Account to one or more of the Sub-Accounts (other than the Money Market
Sub-Account). Transfers must be for at least $100 per transferee
Sub-Account. Total transfers from the General Account are limited in the
Contract Year of the initial Purchase Payment to the greater of: (i) 30% of
the initial Purchase Payment; or (ii) $25,000. In subsequent Contract Years
total transfers from the General Account are limited to the greater of: (i)
30% of the General Account Balance as of the end of the immediately
preceding Contract Year; or (ii) $25,000. Election into this option may only
be made during the Accumulation Period as follows: at the time of the
initial Purchase Payment into the General Account; or, in subsequent years,
on the Contract Year anniversary, provided that the Company receives the
Written Request for this election at least five (5) business days in advance
of such anniversary.
DCA OPTION 3 - INTEREST-ONLY TRANSFERS - This option provides for the
transfer of the credited interest of the General Account at regular
intervals to one or more of the Sub-Accounts (other than the Money Market
Sub-Account). The transferred amount is comprised of the credited interest
for the selected interval (e.g., monthly, quarterly). The $100 minimum
transfer amount does not apply to this option. To participate in this
option, there is a $5,000 minimum General Account Balance required at the
time of each transfer.
DCA OPTIONS 2 & 3 FROM THE GENERAL ACCOUNT - These options provide for the
transfer of amounts at regular intervals from the General Account to one or
more of the Sub-Accounts (other than the Money Market Sub-Account). Except
during the Window Period, additional transfers from the General Account are
not permitted while a DCA option 2 or 3 is in effect. DCA Options 2 and 3
are described below.
Changes in the terms of any option elected (such as amount transferred or
Sub-Account designation) may be made by Written Request to terminate the
existing DCA, along with a Written Request providing new DCA elections.
DCA will terminate when any of the following occurs:
(1) the number of designated transfers has been completed;
(2) the value of the General Account or Sub-Account is insufficient to complete
the next transfer;
(3) a Written Request from the Contract Owner is received at least five (5)
business days prior to the next transfer date;
(4) for Option 3, where the General Account balance falls below $5,000;
(5) the Annuity Income Date arrives; or
(6) the Contract is terminated.
Except as otherwise provided, Dollar Cost Averaging is subject to the transfer
provisions of the Contract. (See Transfers.) Dollar Cost Averaging is not
currently available in all states.
Distributions Under The Contract
Surrenders
The Contract Owner may surrender all or a portion of the Contract Balance in
exchange for a cash payment from C.M. Life. The proceeds payable upon a full
Surrender are the Contract Balance less any applicable Surrender Charge,
Contract Maintenance Fee, any applicable premium taxes, and plus or minus any
applicable Interest Rate Factor Adjustment. The net proceeds payable upon full
Surrender are the "Surrender Value." There is no minimum or guaranteed Surrender
Value. The proceeds payable upon a partial Surrender are the Surrender amount
requested; any applicable Surrender Charge is subtracted from, and any
applicable Interest Rate Factor Adjustment is added to, or subtracted from, the
remaining Contract Balance. There is no Surrender Charge or Interest Rate Factor
Adjustment on Surrenders during a Window Period. Any Surrender Charge or
Contract Maintenance Fee imposed on Surrender will be allocated among the
General Account and the Sub-Accounts in the same manner (pro rata) as the
Contract Balance subject to Surrender is allocated among the General Account and
the Sub-Accounts. For Contracts issued to Pennsylvania residents, the Contract
Maintenance Fee will be allocated pro rata among the Sub-Accounts. Any
applicable Interest Rate Factor Adjustment imposed on a Surrender will be
imposed only on the amount of General Account Balance subject to Surrender. For
partial Surrenders, the Contract Owner must specify the Investment Account or
Sub-Account from which surrendered amounts should be taken.
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The minimum amount that can be withdrawn from any Sub-Account or the General
Account is $100. In addition, following any partial Surrender, the remaining
Contract Balance must be at least $250.
The Contract Owner may request the Contract Balance at any time during the life
of the Annuitant and Contract Owner and prior to the Annuity Income Date, by
sending a Written Request to the Annuity Service Center. Surrenders are
permitted any time during the Accumulation Period.
(See Annuity Options.)
C.M. Life will process all partial Surrender and full Surrender requests within
seven (7) calendar days (unless a shorter period is required under applicable
law) following receipt by the Annuity Service Center of the Contract Owner's
Written Request, except in the following situations for the following Accounts.
General Account - C.M. Life reserves the right to defer payment of any
Surrender from the General Account for up to six (6) months.
Separate Account - C.M. Life reserves the right to defer the payment of any
Surrender from the Separate Account as permitted by the 1940 Act. Such delay
may occur because: (i) the New York Stock Exchange is closed for trading;
(ii) the SEC determines that a state of emergency exists; or (iii) an order
or pronouncement of the SEC permits a delay for the protection of Contract
Owners.
In addition, a Purchase Payment amount is not available to satisfy a Written
Request for Surrender until the check, or other instrument by which such
Purchase Payment was made, has been honored.
Beginning in the second Contract Year, the Contract Owner is entitled to an
annual Free Surrender Amount, which is exempt from a Surrender Charge and from
any Interest Rate Factor Adjustment. The Free Surrender Amount equals 10% of the
Contract Balance as of the end of the immediately preceding Contract Year, and
is allocated among the General Account and Sub-Accounts in the same proportion
as the partial Surrender or full Surrender requested. The Free Surrender amount
may be taken in multiple installments in each Contract Year. Any amount subject
to Surrender in excess of the Free Surrender Amount is subject to the Surrender
Charge and the Interest Rate Factor Adjustment, as applicable. (See Interest
Rate Factor Adjustment and Surrender Charge.) Any unused Free Surrender Amount
cannot be accumulated and carried from one year to the next. (Surrenders may
result in tax liabilities. See Tax Status.)
Since the Contract Owner assumes the entire investment risk with respect to
Purchase Payments and transfers allocated to the Separate Account, and certain
risks with respect to amounts allocated to the General Account, and because
Surrenders are subject to a Surrender Charge, an Interest Rate Factor
Adjustment, a Contract Maintenance Fee, and possibly Premium Taxes, the total
amount paid upon full Surrender may be more or less than the total Purchase
Payments made (taking any prior partial Surrenders into account). Following a
Surrender of the total Contract Balance, or at any time the Contract Balance is
zero, all rights of the Contract Owner and Annuitant will terminate.
Systematic Withdrawals
Upon Written Request, a Contract Owner may elect Systematic Withdrawals ($100
minimum per withdrawal) to begin on or after the first anniversary of the
Contract Issue Date during the Accumulation Period. There is currently no charge
for Systematic Withdrawals. However, the Company reserves the right to charge
for Systematic Withdrawals in the future. The Contract Owner may not
simultaneously participate in both Systematic Withdrawals and Dollar Cost
Averaging.
If Systematic Withdrawals are elected, the Contract Owner may withdraw fixed
dollar amounts at regular intervals from the Contract Balance.
Systematic Withdrawals will begin when a properly completed Written Request from
the Contract Owner is received by the Company, at least five (5) business days
prior to the Systematic Withdrawals start date selected by the Contract Owner.
If the Systematic Withdrawals start date is less than five (5) days after the
date the Written Request is received by the Company, the Company may defer the
Systematic Withdrawals start date for one (1) month. If no start date has been
selected, the Company will automatically start Systematic Withdrawals within
five (5) business days after the Written Request is received.
Changes in Systematic Withdrawals may only be made by Written Request from the
Contract Owner to terminate the existing Systematic Withdrawals election along
with a Written Request designating a new Systematic Withdrawals election.
Systematic Withdrawals will terminate when any of the following occurs:
(1) the number of designated Systematic Withdrawals has been completed;
(2) the value of the General Account or Sub-Account is insufficient to complete
the next withdrawal;
(3) Written Request from the Contract Owner is received at least five (5)
business days prior to the next withdrawal date;
(4) the Annuity Income Date arrives; or
(5) the Contract is terminated.
Withdrawals in excess of the Free Surrender Amount may be subject to any
applicable Surrender Charge and Interest Rate Factor Adjustment. (See
Surrenders.)
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Further, withdrawals may result in tax liabilities. See Tax Status.
The Systematic Withdrawals plan is not currently available in all states.
Annuity Income Payments
C.M. Life will pay an Annuity Income beginning on the Annuity Income Date,
provided no Death Benefit has become payable, and the Contract Owner has
selected an available Annuity Option and payment schedule by Written Request.
The Annuity Option and frequency of Annuity Income payments may not be changed
after Annuity Income payments begin. Unless the Contract Owner specifies
otherwise, the payee of the Annuity Income is the applicable Annuitant. After
the death of the Annuitant, any remaining payments will be made to the
Beneficiary. The dollar amount and frequency of the payments will depend on
numerous factors, such as the Contract Balance, the type of Annuity and Annuity
Option elected, possibly age and sex, and any applicable Interest Rate Factor
Adjustment.
Annuity Income Date. Initially, the Annuity Income Date is selected by the
Contract Owner at the time the Application is completed. The Annuity Income Date
may be changed from time to time by the Contract Owner by Written Request to
C.M. Life, provided that notice of each change is received by C.M. Life at its
Annuity Service Center at least thirty (30) days prior to the then-current
Annuity Income Date. Except as otherwise permitted by C.M. Life, an Annuity
Income Date must be a date which is no earlier than the fifth anniversary of the
Contract Issue Date. The latest Annuity Income Date which may be elected is the
Annuitant's 90th birthday (unless a shorter period is required under applicable
state law).
Election of Annuity Option. The Contract Owner will choose an Annuity Option in
the Application. During the lifetime of the Annuitant and Contract Owner and
prior to the Annuity Income Date, the Contract Owner may change the election,
but a Written Request specifying a change of election must be received by C.M.
Life at its Annuity Service Center at least thirty (30) days prior to the
Annuity Income Date. If no election is made at least thirty (30) days prior to
the Annuity Income Date, Annuity Income will be paid under Option B, life income
with 120 monthly payments guaranteed. (See Annuity Options.)
If the Annuitant or Contract Owner dies prior to the Annuity Income Date, the
Beneficiary may receive a Death Benefit. (See Death Benefit.)
Premium Tax. C.M. Life may be required by state law to pay a Premium Tax on the
amount applied to an Annuity Option (or upon Surrender). If so, C.M. Life will
deduct the Premium Tax before applying (or paying) the proceeds.
Annuity Options
The Contract provides six (6) Annuity Options which are described below. Five
(5) of these are offered as either a Fixed Annuity or a Variable Annuity (Option
E is only available as a Fixed Annuity). Contract Owners may elect a Fixed
Annuity, a Variable Annuity, or a combination of both. If the Contract Owner
elects a combination, he must specify what part of the Contract Balance is to be
applied to the Fixed and Variable Options. Unless specified otherwise, the
General Account Balance will be used to provide a Fixed Annuity, and the
Separate Account Balance will be used to provide a Variable Annuity. (If the
General Account Balance is used to provide Variable Annuity Income payments,
then the Interest Rate Factor Adjustment will be applied at that time.) Variable
Annuity income payments will be based on the Sub-Account(s) selected by the
Contract Owner, or on the allocation of the Separate Account Balance among the
Sub-Accounts.
If the amount of the Annuity Income will depend on the age or sex of the
Annuitant, C.M. Life reserves the right to ask for satisfactory proof of the
Annuitant's (and Joint Annuitant's) age and sex. C.M. Life may delay Annuity
Income payments until satisfactory proof is received.
On the Annuity Income Date, the sum of: (i) the General Account Balance
(adjusted by the Interest Rate Factor Adjustment to the extent that the General
Account Balance is applied to a Variable Annuity Option); and (ii) the Separate
Account Balance; minus (iii) any Premium Tax, will be applied to provide for
Annuity Income payments under the selected Annuity Option.
A Fixed Annuity provides for Annuity Income payments which will remain constant
pursuant to the terms of the Annuity Option elected. The effect of choosing a
Fixed Annuity is that the amount of each payment will be set on the Annuity
Income Date and will not change. If a Fixed Annuity is selected, the Separate
Account Balance used to provide the Fixed Annuity will be transferred to the
general assets of C.M. Life, and the Annuity Income payments will be fixed in
amount by the Fixed Annuity provisions selected, and, for some options, the age
and sex (if consideration of sex is allowed) of the Annuitant. The Fixed Annuity
payment amounts are determined by applying the Annuity Purchase Rate specified
in the Contract to the portion of the Contract Balance allocated to the Fixed
Annuity Option selected by the Contract Owner.
A Variable Annuity provides for payments that fluctuate or vary in dollar
amount, based on the investment performance of a Separate Account Sub-Account.
The Variable Annuity purchase rate tables in the Contract reflect an assumed
interest rate of 4%, so if the actual net investment performance of the
Sub-Account is less than this rate, then the dollar amount of the actual Annuity
Income payments will decrease. If the actual net investment performance of the
Sub-Account is higher than this rate, then the dollar amount of the actual
Annuity
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Income payments will increase. If the net investment performance exactly equals
the 4% rate, then the dollar amount of the actual Annuity Income payments will
remain constant.
Annuity Units and Payments. The dollar amount of each Variable Annuity
payment depends on the number of "Annuity Units" credited to that Annuity
Option and the value of those units. The number of Annuity Units is
determined as follows.
1. The number of Annuity Units credited in each Sub-Account will be determined
by dividing the product of the portion of the Contract Balance to be applied
to the Sub-Account and the Annuity Purchase Rate specified in the Contract
by the value of one Annuity Unit in that Sub-Account on the Annuity Income
Date.
2. The amount of each Annuity Income payment equals the product of the
Annuitant's number of Annuity Units and the Annuity Unit Values on the
payment date. The amount of each payment may vary from prior Annuity Income
payments.
Annuity Unit Value. The value of an Annuity Unit in a Sub-Account on any
Valuation Date is determined follows.
1. The Net Investment Factor for the Valuation Period (for the appropriate
Annuity Income payment frequency) just ended is multiplied by the value of
the Annuity Unit for the Sub-Account on the preceding Valuation Date.
2. The result in (1) is then divided by an interest factor. The interest factor
equals 1.00 plus the interest rate for the number of days since the
preceding Valuation Date. Interest is based on an effective annual rate of
4%. This compensates for the interest assumption built into the Annuity
Purchase Rates.
The Contract Owner may choose to receive Annuity Income payments under any one
of the Annuity Options described below. The Company may consent to other plans
of payment before the Annuity Income Date.
Note Carefully: Under Annuity Options A and C, it would be possible for only one
(1) Annuity Income payment to be made if the Annuitant were to die before the
due date of the second annuity payment; only two (2) Annuity Income payments if
the Annuitant were to die before the due date of the third annuity payment; and
so forth.
The following Annuity Options are available.
Annuity Option A Life Income Periodic payments will be made as long as the
Annuitant lives.
Annuity Option B Life Income with Period Certain Periodic payments will be
made for a guaranteed period, or as long as the Annuitant lives, whichever
is longer.
The guaranteed period, which is selected by the Contract Owner, may be five
(5), ten (10), or twenty (20) years.
Annuity Option C Joint and Last Survivor Payments Periodic payments will be
made during the joint lifetime of two (2) Annuitants, continuing in the same
amount during the lifetime of the surviving Annuitant.
Annuity Option D Joint and Two-Thirds Survivor Annuity Periodic payments
will be made during the joint lifetime of two (2) Annuitants. Payments will
continue during the lifetime of the surviving Annuitant, and will be
computed on the basis of two-thirds of the annuity payment (or units) in
effect during the joint lifetime.
Annuity Option E Period Certain (Available as a Fixed Annuity only)-
Periodic payments will be made for a specified period. The specified period
must be at least five (5) years and cannot be more than thirty (30) years.
Annuity Option F Special Income Settlement Agreement C.M. Life will pay the
proceeds in accordance with terms agreed upon in writing by the Contract
Owner and C.M. Life. This option may be elected only at the Annuity Income
Date.
* * * * *
Annuity Income Payments. Except as otherwise agreed to by the Contract Owner and
C.M. Life, Annuity Income payments will be payable monthly. The minimum amount
that may be applied under any Annuity Option, and the minimum periodic Annuity
Income payment allowed, are the most recently published minimums designated by
C.M. Life for this purpose. A portion or the entire amount of the Annuity
Payments may be taxable as ordinary income. If, at the time the Annuity Payments
begin, C.M. Life has not received a proper written election not to have federal
income taxes withheld, C.M. Life must by law withhold such taxes from the
taxable portion of such annuity payments and remit that amount to the federal
government. For certain payments, an election out of withholding is not
available. (See Tax Status.)
Terminal Illness Benefit
In the event that a Contract Owner becomes terminally ill during the
Accumulation Period and prior to age 75, the Contract Owner may elect, unless
prohibited by law, by submission of a Written Request, a Terminal Illness.
Benefit equal to the greater of:
(a) the Purchase Payments less any prior withdrawals and charges; or
(b) the Contract Balance.
The Company will require proof that the Contract Owner is terminally ill and not
expected to live more than twelve (12) months. This proof will include, but is
not limited to, certi-
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fication by a licensed medical practitioner performing within the scope of
his/her license. The licensed medical practitioner must not be the Contract
Owner, Annuitant or the Contingent Annuitant, or the parent, spouse or child of
the Contract Owner, Annuitant or Contingent Annuitant.
Payment of the Terminal Illness Benefit is determined on the date the Company
receives the Written Request. No Contract Maintenance Fee for the current year,
Surrender Charge or Interest Rate Factor Adjustment shall apply with respect to
any Terminal Illness Benefit. Payment of the Terminal Illness Benefit will be in
full settlement of the Company's liability under the Contract. The Terminal
Illness Benefit is not available for Contracts issued in Kansas, Mississippi,
Texas, or Pennsylvania.
Death Benefit
If the Annuitant or Contract Owner dies prior to the Annuity Income Date, a
Death Benefit will be paid to the Beneficiary upon receipt at the Annuity
Service Center of proof of death. If, however, the Annuitant dies before such
Contract Owner and there is a Contingent Annuitant who is less than 85 years of
age on the Annuitant's date of death (and such Contract Owner is a natural
person), then no Death Benefit is payable, and the Contract will continue in
force, with the Contingent Annuitant as the Annuitant. For purposes of the Death
Benefit, the Annuitant is the Annuitant named in the Application.
The Death Benefit is payable upon receipt of proof of death, as well as proof
that the death occurred during the Accumulation Period. Upon receipt of this
proof and an election of a Death Benefit Option, and return of the Contract, the
Death Benefit generally will be payable after C.M. Life has sufficient
information to make the payment(s).
Payments under a Death Benefit Option are determined at the time of payment,
and, if the deceased Annuitant or Contract Owner was a natural person less than
age 75 at death, are based on the greater of (a) the Contract Balance or (b) the
Purchase Payments less any prior withdrawals and charges. Otherwise, the
payments are based on the Contract Balance at the time of payment. No Surrender
Charge, Interest Rate Factor Adjustment, or Contract Maintenance Fee shall apply
with respect to any Death Benefit Option.
Payment of the Death Benefit will be in full settlement of the Company's
liability under this Contract.
The available Death Benefit Options depend on whether the Contract Owner and
Annuitant are the same person.
Death of Contract Owner. If the Contract Owner is not the Annuitant, and the
Contract Owner dies before the Annuitant and prior to the Annuity Income Date,
one of the following provisions will apply.
1. If the Contract Owner's spouse is the Beneficiary and survives the Contract
Owner, the spouse may select only Death Benefit Option A, B, or C within one
(1) year after the Contract Owners death.
If the surviving spouse does not make a selection within one (1) year after
the Contract Owner's death, the surviving spouse will become the Contract
Owner.
2. If the Beneficiary is a natural person other than the Contract Owner's
spouse, the Beneficiary may select only Death Benefit Option B or C within
one (1) year after the Contract Owner's death.
If no selection is made within one (1) year after the Contract Owner's
death, the Death Benefit will be paid to the Beneficiary in a single sum at
that time.
3. If the Beneficiary is not a natural person, it may select only Death Benefit
Option B or D within one (1) year after the Contract Owner's death.
4. If no Beneficiary survives the Contract Owner, the Annuitant shall be deemed
to be the Beneficiary and provision 1 or 2 above shall apply.
If no selection is made within one (1) year after the Contract Owner's
death, the Death Benefit will be paid in a single sum at that time.
Death of Contract Owner/Annuitant. If the Contract Owner and Annuitant are the
same person, and the Contract Owner/Annuitant dies before the Annuity Income
Date, one of the following provisions applies.
1. If the Contract Owner/Annuitant's spouse is the Beneficiary, the surviving
spouse may only select Death-Benefit Option B, C, or G within (1) one year
after the Contract Owner/Annuitant's death.
If no selection is made within one (1) year after the Contract
Owner/Annuitant's death, the surviving spouse will become the Contract Owner
and Annuitant of the Contract.
2. If the Beneficiary is a natural person other than the Contract
Owner/Annuitant's spouse, the Beneficiary may select only Death Benefit
Option B or C within (1) one year of the Contract Owner/Annuitant's death.
If no selection is made within one (1) year after the Contract
Owner/Annuitant's death, the Death Benefit will be paid in a single sum at
that time.
3. If the Beneficiary is not a natural person, it may select only Death Benefit
Option B or D within one (1) year after the Contract Owner/Annuitant's
death. See below.
4. If no Beneficiary survives the Contract Owner/Annuitant, the Death Benefit
will be paid in a single sum to the Contract Owner/Annuitant's estate within
five (5) years of the date of death.
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If no selection is made within one (1) year after the Contract
Owner/Annuitant's death, the Death Benefit will be paid in a single sum at
that time.
Death of Annuitant. If the Contract Owner and Annuitant are not the same person,
and the Annuitant dies before the Contract Owner and prior to the Annuity Income
Date, and there is no Contingent Annuitant younger than age 85 (or if the
Contract Owner is not a natural person), one of the following provisions
applies.
1. The Beneficiary, if a natural person, may only select Death Benefit Option E
or F within one (1) year after the Annuitant's death. (See below.)
If no selection is made within one (1) year after the Annuitant's death, the
Death Benefit will be paid in a single sum to the Beneficiary at that time.
2. If the Beneficiary is not a natural person, it may only select Death Benefit
Option D or E within one (1) year after the Annuitant's death. (See below).
If no selection is made within one (1) year after the Annuitant's death, the
Death Benefit will be paid in a single sum at that time.
3. If no Beneficiary survives the Annuitant, the Contract Owner shall be deemed
the Beneficiary and provision 1 or 2 immediately above shall apply.
Death Benefit Options. Life expectancy for purposes of these Death Benefit
Options will be determined from the tables in the Regulations, under Section 72
of the Code. The following Death Benefit Options are available:
Death Benefit Option A - To become the Contract Owner;
Death Benefit Option B - To receive the Death Benefit as a single sum within
one (1) year after the Contract Owner's death;
Death Benefit Option C - To receive the Death Benefit under any Annuity
Option offered in the Contract, provided the entire Death Benefit is
distributed:
1. Within five (5) years of the date of death; or
2. Over a period not extending beyond the life expectancy of the
Beneficiary; or
3. Over the life of the Beneficiary.
If the Death Benefit is to be paid under provision (2) or (3), the first
installment payment must be made within one (1) year after the Contract Owner's
death.
Death Benefit Option D - To receive the Death Benefit under any Annuity
Option offered in the Contract, provided the entire Death Benefit is
distributed within five (5) years of the date of death;
Death Benefit Option E - To receive the Death Benefit as a single sum within
one (1) year after the Annuitant's death;
Death Benefit Option F - To receive the Death Benefit under any Annuity
Option offered in the Contract, provided the Death Benefit is distributed:
1. Over a period not extending beyond the life expectancy of the
Beneficiary; or
2. Over the life of the Beneficiary.
The first installment payment must be made within one (1) year after the
Annuitant's death.
Death Benefit Option G - To become the Contract Owner and Annuitant of the
Contract, just as if the Beneficiary had always been the Contract Owner and
Annuitant.
Death of Annuitant On or After Annuity Income Date. The Death Benefit payable if
the Annuitant dies on or after the Annuity Income Date, if any, depends on the
Annuity Option in effect on the date of death of the Annuitant. Any remaining
payments will be distributed at least as rapidly as under the method of
distribution being used as of the date of the Annuitant's death. If a
Beneficiary dies while receiving such benefits, the balance of the benefits, if
any, will be paid in a single sum to the estate of the Beneficiary. If no
Beneficiary survives the Annuitant, the benefits, if any, will be paid in a
single sum to the estate of the last Annuitant to die.
Beneficiary. One or more Beneficiaries may be designated to receive benefits
concurrently, contingently or successively upon the death of the Contract Owner
and/or the Annuitant. The Beneficiary designation in the Application will remain
in effect until changed. The Contract Owner may, upon Written Request, change
the designated Beneficiary before a Death Benefit has become payable. The
Beneficiary's consent to such change is not required unless the Beneficiary was
irrevocably designated or consent is required by law. (If an irrevocable
Beneficiary dies, the Contract Owner may then designate a new Beneficiary.) The
change will take effect as of the date the Contract Owner signs the Written
Request. However, the change is subject to any payments made or actions taken by
C.M. Life before receipt of the Written Request. On or after receipt of proof of
death at the Annuity Service Center, the Beneficiary shall have the exclusive
right to (i) appoint a contingent Beneficiary to succeed to the interest of the
Beneficiary in the event of the Beneficiary's death; and (ii) make transfers
under the Contract. (See Transfers.)
IRS Required Distribution
Federal tax law requires that if the Contract Owner dies before the Annuity
Income Date, then the entire value of the
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Contract must generally be distributed within five (5) years of the date of
death of the Contract Owner. Special rules may apply to the spouse of the
deceased Contract Owner. (See Federal Tax Matters of the Statement of Additional
Information, for a detailed description of these rules.)
Restrictions Under the Texas Optional Retirement Program
Section 36.105 of the Texas Educational Code permits participants in the Texas
Optional Retirement Program ("ORP") to withdraw their interests in a variable
annuity contract issued under the ORP only upon: (1) termination of employment
in the Texas public institutions of higher education; (2) retirement; or (3)
death. Accordingly, a participant in the ORP (or the participant's estate if the
participant has died) will be required to obtain a certificate of termination
from the employer, or a certificate of death, before the Contract can be
surrendered.
Restrictions Under Section 403(b) Plans
Section 403(b) of the Code provides for tax-deferred retirement savings plans
for employees of certain non-profit and educational organizations. In accordance
with the requirements of Section 403(b), any Contract used for a 403(b) plan
will prohibit distributions of elective contributions, and earnings on elective
contributions, except upon death of the employee, attainment of age 59 1/2,
separation from service, disability, or financial hardship. In addition, income
attributable to elective contributions may not be distributed in the case of
hardship.
Charges And Deductions
C.M. Life will make certain charges and deductions under the Contract in order
to compensate it for incurring expenses in distributing the Contract, bearing
mortality and expense risks under the Contract, and administering the Investment
Accounts and the Contract. Charges may also be made for Premium Taxes, and other
federal, state or local taxes. Charges and expenses are also deducted from the
assets of the Portfolios.
Surrender Charge
C.M. Life will incur expenses relating to the sale of Contracts, including
commissions to registered representatives and other promotional expenses. In
connection with a full Surrender or partial Surrender during the first five (5)
Contract Years, C.M. Life may deduct from the Contract Balance a Surrender
Charge equal to 5% of any Contract Balance surrendered in order to help cover
distribution expenses. The Surrender Charge will be deducted as of the date of
the receipt at the Annuity Service Center of the Written Request for the
Surrender. Any Surrender Charge assessed will be allocated among the General
Account and the Sub-Accounts in the same manner (pro rata) as the Contract
Balance subject to Surrender is allocated among the General Account and the
Sub-Accounts. The Surrender Charge will not be applied under the following
circumstances:
1. Cancellation of the Contract during the 15-day examination period;
2. Full Surrender of the Contract on the Annuity Income Date;
3. Partial Surrenders or full Surrenders during the Window Period or after the
first five (5) Contract Years, (the Window Period is the last thirty (30)
days of each Five-Year Period under the Contract);
4. Upon payment of the Death Benefit;
5. On any Free Surrender Amount. Beginning in the second Contract Year, the
Contract Owner is entitled to an annual Free Surrender Amount, which is
exempt from a Surrender Charge and any applicable Interest Rate Factor
Adjustment. See "Interest Rate Factor Adjustment" below. The Free Surrender
Amount will be allocated among the General Account and/or Sub-Accounts in
the same proportions as the partial Surrender or full Surrender amount. The
Free Surrender Amount equals 10% of the Contract Balance as of the end of
the immediately preceding Contract Year. Contract Owners may elect to
receive 10% of the Contract Balance in multiple installments each contract
year. Any amount redeemed during the year in excess of this 10% amount will
be subject to a Surrender Charge (and any applicable Interest Rate Factor
Adjustment); and
6. Partial Surrenders or full Surrenders of Contracts issued in exchange for
Variable Annuity Contracts issued by Connecticut Mutual through its Panorama
Separate Account which are beyond any applicable Surrender Charge period.
7. No sales charge will be imposed upon the redemption of a Contract purchased
and used in connection with a Qualified Plan that purchases Tax Sheltered
Annuities if such redemption occurs prior to May 1, 1998.
More information about how the Surrender Charge is calculated for partial
Surrenders and full Surrenders is contained in Appendices I and III attached
hereto.
In the case of a partial Surrender, the Surrender Charge will be deducted from
the Contract Balance remaining after payment of the requested Surrender amount,
or from the amount paid if sufficient balances do not remain in the Sub-Account
or General Account to which the Surrender is allocated.
Until April 30, 1999, no sales charges will be imposed upon redemption of a
Contract where the proceeds of such redemption are applied to the purchase of a
new MassMutual group annuity contract. This waiver does not eliminate applicable
charges under the particular group contract, and upon surrender of the group
contract, charges may apply.
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No sales charge will be imposed upon redemption of "excess contributions,"
including "excess aggregate contributions," made to a Contract purchased and
used in connection with plans qualifying for favorable tax treatment ("Qualified
Contract"), including certain Qualified Pension and Profit Sharing Plans,
Individual Retirement Accounts and Tax-Sheltered Annuities. (See Tax Status -
Qualified Plans). The terms of such plans may permit the refund of contributions
made in excess of certain limitations specified in the Code and applicable
regulations. In the event of a refund of excess contributions, no sales charge
will be imposed upon the amount refunded. For purposes of the Contract, "excess
contributions" and "excess aggregate contributions" will be defined as provided
in U.S. Treasury Regulations.
C.M. Life anticipates that the Surrender Charge will not generate sufficient
funds to pay the cost of distributing the Contracts. If this charge is
insufficient to cover distribution expenses, the deficiency will be met from
C.M. Life's general funds, which will include amounts derived from the charge
for mortality and expense risks.
C.M. LIFE GUARANTEES THAT THE AGGREGATE SURRENDER CHARGE WILL NEVER EXCEED 8.5%
OF THE TOTAL PURCHASE PAYMENTS MADE UNDER THE CONTRACT.
Interest Rate Factor Adjustment
The amount of General Account Balance partially or fully Surrendered during the
Accumulation Period, and the total General account Balance on the Annuity Income
Date (if and to the extent that the General Account Balance is applied to a
Variable Annuity Option), will be subject to an Interest Rate Factor Adjustment.
The Interest Rate Factor Adjustment is based on interest rates payable on U.S.
Treasury securities. In general, if rates on U.S. Treasury securities are higher
when you Surrender than when you made the applicable Purchase Payments, a
negative Interest Rate Factor Adjustment will generally be applied to the amount
Surrendered, and you could receive an amount lower than the amount of Purchase
Payments made. If rates on U.S. Treasury securities are lower when you Surrender
than when you made the applicable Purchase Payments, a positive Interest Rate
Factor Adjustment will generally be applied to the amount Surrendered, and you
could receive an amount higher than the amount of Purchase Payments made. No
Interest Rate Factor Adjustment will be applied during the Window Period. In
addition, no Interest Rate Factor Adjustment will be applied to the general
Account Free Surrender Amount or to Contracts issued to Pennsylvania residents.
Further information about the General Account and the Interest Rate Factor
Adjustment can be found in the prospectus for the Fixed Account with Interest
Rate Factor Adjustment attached hereto and in Appendix II.
Mortality and Expense Risk Charge C.M. Life imposes a daily charge as
compensation for bearing certain mortality and expense risks in connection with
the Contracts. This charge currently is 1.07% annually (equal to a daily rate of
0.002932%). It may increase, but it will not exceed an effective annual rate of
1.25% of the average daily value of net assets in the Separate Account. (The
approximate portion of this charge estimated to be attributable to mortality
risks is 0.42%; the approximate portion of this charge estimated to be
attributable to expense risks is 0.65%.) The Mortality and Expense Risk Charge
is reflected in the Accumulation Unit value or Annuity Unit value for the
Contract for each Sub-Account.
Contract Balances and Annuity Income payments are not affected by changes in
actual mortality experience nor by actual expenses incurred by C.M. Life. The
mortality risks assumed by C.M. Life arise from its contractual obligations to
make Annuity Income payments (determined in accordance with the annuity tables
and other provisions contained in the Contract), and to pay Death Benefits prior
to the Annuity Income Date. Thus, Contract Owners are assured that neither the
Annuitant's own longevity, nor an unanticipated improvement in general life
expectancy, will adversely affect the Annuity Income payments that the Annuitant
will receive under the Contract.
C.M. Life also bears substantial risk in connection with the Death Benefit.
During the Accumulation Period C.M. Life will, if the deceased Annuitant or
Contract Owner was a natural person less than age 75 at death, pay a Death
Benefit equal to the greater of (a) the Contract Balance, or (b) the Purchase
Payments less any prior partial surrenders and charges. Otherwise, the Death
Benefit is based on the Contract Balance. The Death Benefit is paid without
imposition of a Surrender Charge or the Interest Rate Factor Adjustment.
The expense risk assumed by C.M. Life is the risk that C.M. Life's actual
expenses in administering the Contract and the Separate Account will exceed the
amount recovered through Administrative Charges.
If the Mortality and Expense Risk Charge is insufficient to cover C.M. Life's
actual costs, C.M. Life will bear the loss. Conversely, if the charge is more
than sufficient to cover costs, the excess will be profit to C.M. Life. C.M.
Life expects a profit from this charge. To the extent that the Surrender Charge
is insufficient to cover the actual cost of Contract distribution, the
deficiency will be met from C.M. Life's general corporate assets, which may
include amounts derived from the Mortality and Expense Risk Charge.
Administrative Charges
In order to cover the costs of administering the Contracts and the Separate
Account, C.M. Life deducts a Contract Maintenance Fee from the Contract Balance
of each Contract, and also deducts a daily Administrative Expense Charge from
the assets of each Sub-Account of the Separate Account.
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Contract Maintenance Fee. A Contract Maintenance Fee is deducted from the
Contract Balance of each Contract on the last day of each Contract Year during
the Accumulation Period, and upon full Surrender of the Contract. The charge is
not deducted after the Annuity Income Date. This Contract Maintenance Fee
currently is $30 per Contract per Contract Year. It may be increased, but will
not exceed $60. C.M. Life does not anticipate realizing any profit from this
charge. The Contract Maintenance Fee will be deducted pro rata from the
Sub-Accounts in the Separate Account and the General Account, in the same
proportion that the amount of Contract Balance in each Sub-Account and the
General Account bears to the total Contract Balance. For Contracts issued to
Pennsylvania residents, the Fee will be calculated as a pro rata portion of the
balance of each Sub-Account.
Administrative Expense Charge. C.M. Life also deducts a daily Administrative
Expense Charge from the assets of each Sub-Account of the Separate Account. This
charge is currently at an effective annual rate of 0.07% (equal to a daily rate
of 0.000192%). C.M. Life does not anticipate realizing any profit from this
charge. The Administrative Expense Charge may be increased in the future, but
the combined total of the Administrative Expense Charge and the Mortality and
Expense Risk Charge will never exceed an effective annual rate of 1.50% of the
average daily value of net assets in the Separate Account.
Premium Taxes
C.M. Life may pay Premium Taxes in connection with Purchase Payments under the
Contracts. Depending upon applicable state law, C.M. Life will deduct the
Premium Taxes paid with respect to a particular Contract from the Purchase
Payments, from the Contract Balance on the Annuity Income Date (thus reducing
the Contract Balance), or upon the full Surrender of a Contract. Premium Taxes
currently range from 0% to 4.28% of Purchase Payments.
Federal, State and Local Taxes
No charges are currently made for federal, state, or local taxes other than
Premium Taxes. However, C.M. Life reserves the right to deduct charges in the
future for such taxes, or other economic burden resulting from the application
of any tax laws that C.M. Life determines to be attributable to the Contracts.
Other Expenses Including Investment Advisory Fees
Each Portfolio of the Funds is responsible for all of its expenses. In addition,
charges will be made against each Portfolio of the Funds for investment advisory
services provided to the Funds or the Portfolio. The net assets of each
Portfolio of the Funds will reflect deductions in connection with investment
advisory fees and other expenses.
For more information concerning investment advisory fees and other charges
against the Portfolios, see the prospectuses for the Funds, a current copy of
which accompanies this Prospectus. See also Table of Fees and Expenses.
Distributor Of The Contracts
MML Distributors, LLC ("MML Distributors") 1414 Main Street, Springfield, MA
01144-1013, an affiliate of C.M. Life, is the principal underwriter of the
Contracts pursuant to an Underwriting and Servicing Agreement to which MML
Distributors and C.M. Life on behalf of the Separate Account are parties. MML
Investors Services, Inc. ("MMLISI"), also located at 1414 Main Street,
Springfield, MA 01144-1013, serves as the co-underwriter of the Contracts. Both
MML Distributors and MMLISI are registered with the Securities and Exchange
Commission ("SEC") as broker-dealers under the Securities Exchange Act of 1934
and are members of the National Association of Securities Dealers, Inc.
("NASD").
MML Distributors may enter into selling agreements with respect to the Contracts
with other broker-dealers that are registered with the SEC and are members of
the NASD ("selling brokers"). Contracts are sold through agents who are licensed
under applicable insurance law to sell the Contracts. These agents are also
registered representatives of selling brokers or of MMLISI.
MML Distributors does business as MML Distributors, L.L.C. in the states of
Illinois, Michigan, Oklahoma, South Dakota and Washington, and as MML
Distributors, Limited Liability Company in the states of Maine, Ohio and West
Virginia.
Commissions of up to 6.0% of Purchase Payments are paid on Contract sales.
General Provisions
Assignment of the Contract
A Written Request specifying the terms of an assignment of the Contract must be
provided to the Annuity Service Center. Until the Written Request is received at
the Annuity Service Center, C.M. Life will not be required to take notice of, or
be responsible for, any transfer of interest in the Contract by assignment,
agreement, or otherwise.
C.M. Life will not be responsible for the validity or tax consequences of any
assignment. Any assignment made after the Death Benefit has become payable will
be valid only with C.M. Life's consent.
If the Contract is assigned, the Contract Owner's rights may only be exercised
with the consent of the assignee of record.
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Contract Changes by C.M. Life
C.M. Life reserves the right to amend the Contract to meet the requirements of
any applicable federal or state laws or regulations, or to make other changes
permitted by the Contract. C.M. Life will notify the Contract Owner in writing
of any such amendments.
Any changes to the Contract by C.M. Life must be signed by an authorized officer
of C.M. Life. Agents of C.M. Life have no authority to alter or modify any of
the terms, conditions, agreements of the Contract, or to waive any of its
provisions.
Contract Termination
The Contract will terminate upon the occurrence of any of the following events:
1. The date of the last Annuity Income payment;
2. The date payment is made of the Contract Balance;
3. The date of the last Death Benefit payment to the last Beneficiary;
4. The date the Contract is returned under the Right to Examine Contract
provision; or
5. Failure to maintain the required Minimum Contract Balance.
Incontestability
The Contract is incontestable.
Misstatement of Age or Sex
If the Annuitant's age or sex has been incorrectly stated, the Annuity Income
payable will be that which the Contract Balance, reduced by any applicable
Premium Tax, would have purchased at the correct age and sex. After correction,
the Annuitant will receive the sum of any underpayments made by C.M. Life within
thirty (30) calendar days. The amounts of any overpayments made by C.M. Life
will be charged against the payment(s) following the correction.
Nonparticipating
The Contract is nonparticipating and will not share in any surplus earnings of
C.M. Life. No dividends are payable on the Contract.
Non-Business Days
If the due date for any activity required by the Contract falls on a
non-business day for C.M. Life, performance will be rendered on the first
business day following the due date.
Regulatory Requirements
All interest guarantees, surrender benefits, and amounts payable at death will
not be less than the minimum benefits approved under the laws and regulations of
the state in which the Contract is delivered.
C.M. Life will administer the Contract in accordance with the U.S. tax laws and
regulations in order to retain its status as an annuity contract.
Right to Examine Contract
No Surrender Charge will be applied if the Contract Owner returns the Contract
for cancellation during the first fifteen (15) calendar days following the
Contract Issue Date (or a longer period, if required by law). The Contract must
be accompanied by a written request signed by the Contract Owner that indicates
the Contract Owner wishes to return the Contract. In addition, no Interest Rate
Factor Adjustment, or Contract Maintenance Fee or premium tax will be applied
upon such a cancellation. C.M. Life will refund the Separate Account Balance
and/or any Purchase Payments made to the General Account upon return of the
Contract. If required by state law, C.M. Life will refund any Purchase Payment
regardless of whether they were allocated to one or more Sub-Account or to the
General Account.
Tax Status
General
Note: The following description is based upon the Company's understanding of
current federal income tax law applicable to annuities in general. The Company
cannot predict the probability that any changes in such laws will be made.
Purchasers are cautioned to seek competent tax advice regarding the possibility
of such changes. This discussion is based upon C.M. Life's understanding of the
present Federal income tax laws as they are currently interpreted by the
Internal Revenue Service. No representation is made as to the likelihood of the
continuation of the present Federal income tax laws, or of the current
interpretation by the Internal Revenue Service. It should be further understood
that the following discussion is not exhaustive and that special rules not
described in this prospectus may be applicable in certain situations. Moreover,
no attempt has been made to consider any applicable state or other tax laws.
Section 72 of the Code governs taxation of annuities in general. A Contract
Owner is generally not taxed on increases in the value of a Contract until
distribution occurs, either in the form of a lump sum payment or other
non-periodic distribution or as Annuity Payments under the Annuity Option
selected. For a lump sum payment received as a total withdrawal (total
surrender), the recipient is taxed on the portion of the payment that exceeds
the cost basis of the Contract. For Non-Qualified Contracts, this cost basis is
generally the
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Purchase Payments, while for Qualified Contracts there may be no cost basis. The
taxable portion of the lump sum payment is taxed at ordinary income tax rates.
For Annuity Payments, a portion of each payment in excess of an exclusion amount
is includible in taxable income. The exclusion amount for payments based on a
fixed Annuity Option is determined by multiplying the payment by the ratio that
the cost basis of the Contract (adjusted for any period certain or refund
feature) bears to the expected return under the Contract. The exclusion amount
for payments based on a variable Annuity Option is determined by dividing the
cost basis of the Contract (adjusted for any period certain or refund guarantee)
by the number of years over which the annuity is expected to be paid. Payments
received after the investment in the Contract has been recovered (i.e., when the
total of the excludable amounts received equal the investment in the Contract)
are fully taxable. The taxable portion is taxed at ordinary income tax rates.
For certain types of Qualified Plans there may be no cost basis in the Contract
within the meaning of Section 72 of the Code. Contract Owners, Annuitants, and
Beneficiaries under the Contracts should seek competent financial advice about
the tax consequences of any distributions.
The Company is taxed as a life insurance company under the Code. For federal
income tax purposes, the Separate Account is not a separate entity from the
Company and its operations form a part of the Company.
Diversification
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not, in
accordance with regulations prescribed by the United States Treasury Department
("Treasury Department"), adequately diversified. Disqualification of the
Contract as an annuity contract would result in the imposition of federal income
tax to the Contract Owner with respect to earnings allocable to the Contract
prior to the receipt of payments under the Contract. The Code contains a safe
harbor provision which provides that annuity contracts such as the Contract meet
the diversification requirements if, as of the end of each quarter, the
underlying assets meet the diversification standards for a regulated investment
company and no more than 55% of the total assets consist of cash, cash items,
U.S. Government securities and securities of other regulated investment
companies.
On March 2, 1989, the Treasury Department issued Regulations (Treas. Reg.
1.817-5), which established diversification requirements for the investment
portfolios underlying variable contracts such as the Contract. The Regulations
amplify the diversification requirements for variable contracts set forth in the
Code and provide an alternative to the safe harbor provision described above.
Under the Regulations, an investment portfolio will be deemed adequately
diversified if: (1) no more than 55% of the value of the total assets of the
portfolio is represented by any one investment; (2) no more than 70% of the
value of the total assets of the portfolio is represented by any two
investments; (3) no more than 80% of the value of the total assets of the
portfolio is represented by any three investments; and (4) no more than 90% of
the value of the total assets of the portfolio is represented by any four
investments.
The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable contracts
by Section 817(h) of the Code have been met, "each United States Government
agency or instrumentality shall be treated as a separate issuer."
The Company intends that all Portfolios of the Trust underlying the Contracts
will be managed by the Investment Adviser for the Trust in such a manner as to
comply with these diversification requirements.
The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which Contract Owner control
of the investments of the Separate Account will cause the Contract Owner to be
treated as the owner of the assets of the Separate Account, thereby resulting in
the loss of favorable tax treatment for the Contract. At this time it cannot be
determined whether additional guidance will be provided and what standards may
be contained in such guidance.
The amount of Contract Owner control which may be exercised under the Contract
is different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
owner was not the owner of the assets of the separate account. It is unknown
whether these differences, such as the Contract Owner's ability to transfer
among investment choices or the number and type of investment choices available,
would cause the Contract Owner to be considered as the owner of the assets of
the Separate Account resulting in the imposition of federal income tax to the
Contract Owner with respect to earnings allocable to the Contract prior to
receipt of payments under the Contract.
In the event any forthcoming guidance or ruling is considered to set forth a new
position, such guidance or ruling would generally be applied only prospectively.
However, if such ruling or guidance was not considered to set forth a new
position, it may be applied retroactively resulting in the Contract Owner being
retroactively determined to be the owner of the assets of the Separate Account.
Due to the uncertainty in this area, the Company reserves the right to modify
the Contract in an attempt to maintain favorable tax treatment.
Multiple Contracts
The Code provides that multiple Non-Qualified annuity contracts which are issued
within a calendar year to the same contract owner by one company or its
affiliates are
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treated as one annuity contract for purposes of determining the tax consequences
of any distribution. Such treatment may result in adverse tax consequences
including more rapid taxation of the distributed amounts from such combination
of contracts. Contract Owners should consult a tax adviser prior to purchasing
more than one Non-Qualified annuity Contract in any calendar year.
Tax Treatment of Assignments
A transfer of ownership, assignment or pledge of a Contract may be a taxable
event. Contract Owners should therefore consult competent tax advisers should
they wish to transfer, assign or pledge their Contracts.
Income Tax Withholding
All distributions or the portion thereof which is includible in the gross income
of a payee are subject to federal income tax withholding. Generally, amounts are
withheld from periodic payments at the same rate as wages and at the rate of 10%
from non-periodic payments. However, the payee, in most cases, may elect not to
have taxes withheld or to have withholding done at a different rate. Special
rules limit the ability of a payee to elect no withholding where the payee fails
to provide a U.S. residence address or federal taxpayer identification number.
Effective January 1, 1993, certain distributions from Qualified Plans under
Section 401, which are not directly rolled over to another eligible retirement
plan or individual retirement account or individual retirement annuity, are
subject to a mandatory 20% withholding for federal income tax. The 20%
withholding requirement does not apply to: a) distributions for the life or life
expectancy of the participant or joint lives or joint life expectancies of the
participant and a designated beneficiary; or b) distributions for a specified
period of ten (10) years or more; or c) distributions which are required minimum
distributions. Payments that are not eligible for rollover remain subject to the
withholding rules described in the preceding paragraph.
Tax Treatment of Withdrawals - Non-Qualified Contracts
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the Contract Value exceeds the aggregate purchase
payments made, any amount withdrawn will be treated as coming first from the
earnings and then, only after the income portion is exhausted, as coming from
the principal. Withdrawn earnings are includible in gross income.
Penalty Tax
A 10% penalty will apply to the income portion of any distribution. However, the
penalty is not imposed on amounts received: (a) after the taxpayer reaches age
59 1/2; (b) after the death of the Contract Owner; (c) if the taxpayer has
become totally disabled (for this purpose disability is as defined in Section
72(m)(7) of the Code); (d) in a series of substantially equal periodic payments
made not less frequently than annually for the life (or life expectancy) of the
taxpayer or for the joint lives (or joint life expectancies) of the taxpayer and
his or her Beneficiary; (e) under an immediate annuity; or (f) which are
allocable to purchase payments made prior to August 14, 1982.
The above information does not apply to Qualified Contracts. However, separate
tax withdrawal penalties and restrictions may apply to such Qualified Contracts.
(See Tax Treatment of Withdrawals - Qualified Contracts.)
Qualified Plans
The Contract is designed for use with several types of Qualified Plans. The tax
rules applicable to Contract Owners in Qualified Plans, including restrictions
on contributions and benefits, taxation of distributions, and any tax penalties,
vary according to the type of plan and the terms and conditions of the plan
itself. Various tax penalties may apply to contributions in excess of specified
limits, distributions that do not satisfy specified requirements, and certain
other transactions with respect to Qualified Plans. Therefore, no attempt is
made to provide more than general information about the use of the Contract with
the various types of Qualified Plans. Contract Owners, Annuitants and
Beneficiaries are cautioned that the rights of any person to any benefits under
Qualified Plans may be subject to the terms and conditions of the plans
themselves, regardless of the terms and conditions of the Contract. Some
retirement plans are subject to distribution and other requirements that are not
incorporated in the administration of the Contracts. Contract Owners are
responsible for determining that contributions, distributions and other
transactions with respect to the Contracts satisfy applicable law. Purchasers of
Contracts for use with any retirement plan should consult their legal counsel
and tax adviser regarding the suitability of the Contract. Following are brief
descriptions of the various types of Qualified Plans in connection with which
C.M. Life will issue the Contract. Contracts for all types of Qualified Plans
may not be available in all states. When issued in connection with a Qualified
Plan, the Contract will generally be subject to endorsement.
Qualified Pension and Profit Sharing Plans. Section 401(a) of the Code permits
corporate employers to establish various types of retirement plans for
employees. Such retirement plans may permit the purchase of the Contract in
order to provide benefits under the plans. Adverse tax consequences to the plan,
to the participant or to both may result if this Contract is assigned or
transferred to any individual as a means to provide benefit payments.
The Self-Employed Individuals' Tax Retirement Act of 1962, as amended, commonly
referred to as "H.R. 10," permits self-employed individuals to establish
Qualified Plans for themselves and their employees. Purchasers of a
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Contract for use with such plans should seek competent advice regarding the
suitability of the proposed plan documents and the Contract to their specific
needs.
Individual Retirement Annuities and Individual Retirement Accounts. Section 408
of the Code permits eligible individuals to contribute to an individual
retirement program known as an Individual Retirement Annuity, or Individual
Retirement Account (each hereinafter referred to as "IRA"). Individual
Retirement Annuities are subject to limitations on the amount that may be
contributed and deducted and the time when distributions may commence. Also,
distributions from certain other types of Qualified Plans may be "rolled over"
on a tax-deferred basis into an IRA. The sale of a Contract for use with an IRA
may be subject to special disclosure requirements of the Internal Revenue
Service. Purchasers of the Contract for use with IRAs will be provided with
supplemental information required by the Internal Revenue Service or other
appropriate agency. Such purchasers will have the right to revoke their purchase
within seven (7) days of the earlier of the establishment of the IRA, or their
purchase. Purchasers should seek competent advice as to the suitability of the
Contract for use with IRAs. Additional information regarding IRAs is provided in
Appendix IV.
Roth IRAs. Section 408A of the Code permits eligible individuals to contribute
to an individual retirement program known as the Roth IRA. A Roth IRA is subject
to limitations on the amount that may be contributed and the timing and tax
consequences of distributions. Contributions to a Roth IRA are not deductible.
Also, an individual (with a filing status other than married filing separately)
with an adjusted gross income in any tax year of $100,000 or less, may roll over
distributions from a traditional IRA or convert a traditional IRA into a Roth
IRA. The rollover or conversion will be subject to tax. As in the case of a
traditional IRA, the sale of a contract for use with a Roth IRA may be subject
to special disclosure requirements of the Internal Revenue Service. Purchasers
of the Contract for use with Roth IRAs will be provided with supplemental
information required by the Internal Revenue Service or other appropriate
agency. Such purchasers will have the right to revoke their purchase within
seven (7) days of the earlier of the establishment of the Roth IRA, or their
purchase. Purchasers should seek competent advice as to the suitability of the
Contract for use with Roth IRAs. Additional information regarding Roth IRAs is
provided in Appendix IV.
Tax-Sheltered Annuities. Section 403(b) of the Code permits public school
employees, and employees of certain types of religious, charitable, educational,
and scientific organizations, specified in Section 501(c)(3) of the Code, to
purchase annuity contracts and, subject to certain limitations, exclude the
amount of premiums from gross income for tax purposes. However, these payments
may be subject to FICA (Social Security) taxes. These annuity contracts are
commonly referred to as "Tax-Sheltered Annuities." Subject to certain
exceptions, withdrawals under Tax-Sheltered Annuities which are attributable to
contributions made pursuant to salary reduction agreements are prohibited unless
made after the Contract Owner attains age 59 1/2, upon the Contract Owner's
separation from service, upon the Contract Owner's death or disability, or for
an amount not greater than the total of such contributions in the case of
hardship.
Section 457 Deferred Compensation ("Section 457") Plans. Under Section 457 of
the Code, employees of (and independent contractors who perform services for)
certain state and local governmental units, or certain tax-exempt employers, may
participate in a Section 457 plan of their employer, allowing them to defer part
of their salary or other compensation. The amount deferred, and any income on
such amount, will not be taxable until paid or otherwise made available to the
employee. Depending on the terms of the particular plan, the employer may be
entitled to draw on deferred amounts for purposes unrelated to its section 457
plan obligations. In general, all amounts received under a section 457 plan are
taxable.
The maximum amount that can be deferred under a Section 457 plan in any tax year
is ordinarily one-third of the employee's includable compensation, up to $7,500.
Includable compensation means earnings for services rendered to the employer
which is includable in the employee's gross income, but excluding any
contributions under the Section 457 plan, or a Tax-Sheltered Annuity. During the
last three (3) years before an individual attains normal retirement age,
additional "catch-up" deferrals are permitted.
The deferred amounts will be used by the employer to purchase the Contract. The
Contract will be issued to the employer, but for state and local governmental
457 plans, amounts have to be held for the exclusive benefit of plan
participants. For 457 plans for tax-exempt organizations, all Contract Values
will be subject to the claims of the employer's creditors. In either case, the
employee is only entitled to payment in accordance with the Section 457 plan
provisions. Present federal income tax law does not allow tax-free transfers or
rollovers for amounts accumulated in a Section 457 plan, except for transfers to
other Section 457 plans in certain limited cases.
Tax Treatment of Withdrawals - Qualified Contracts
In the case of a withdrawal under a Qualified Contract, a ratable portion of the
amount received is taxable, generally based on the ratio of the individual's
cost basis to the individual's total accrued benefit under the retirement plan.
Special tax rules may be available for certain distributions from a Qualified
Contract. Section 72(t) of the Code imposes a 10% penalty tax on the taxable
portion of any distribution from qualified retirement plans, including Contracts
issued and qualified under Code Sections 401 (H.R. 10 and Corporate Pension and
Profit-Sharing Plans), 408(b) (Individual Re-
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tirement Annuities) and 408A (Roth IRAs). To the extent amounts are not
includible in gross income because they have been rolled over to an IRA or to
another eligible Qualified Plan, no tax penalty will be imposed. The penalty tax
will not apply to a rollover from or conversion of a traditional IRA into a Roth
IRA. The tax penalty will not apply to the following distributions: (a) if
distribution is made on or after the date on which the Contract Owner or
Annuitant (as applicable) reaches age 59 1/2; (b) distributions following the
death or disability of the Contract Owner or Annuitant (as applicable) (for this
purpose disability is as defined in Section 72(m)(7) of the Code); (c) after
separation from service, distributions that are part of substantially equal
periodic payments made not less frequently than annually for the life (or life
expectancy) of the Contract Owner or Annuitant (as applicable) or the joint
lives (or joint life expectancies) of such Contract Owner or Annuitant (as
applicable) and his or her designated Beneficiary; (d) distributions to a
Contract Owner or Annuitant (as applicable) who has separated from service after
he/she has attained age 55; (e) distributions made to the Contract Owner or
Annuitant (as applicable) to the extent such distributions do not exceed the
amount allowable as a deduction under Code Section 213 to the Contract Owner or
Annuitant (as applicable) for amounts paid during the taxable year for medical
care; (f) distributions made to an alternate payee pursuant to a qualified
domestic relations order; (g) beginning in 1998, distributions made for
qualified higher education expenses; and (h) beginning in 1998, distributions
made for a qualified "first-home" purchase, subject to a $10,000 lifetime cap.
The exceptions stated in (d) and (f) above do not apply in the case of an
Individual Retirement Annuity. The exceptions stated in (g) and (h) above apply
to Individual Retirement Annuities. The exception stated in (c) above applies to
an Individual Retirement Annuity without the requirement that there be a
separation from service. In addition, for calendar years beginning January 1,
1997, withdrawals from IRAs by certain unemployed persons for payment of health
insurance premiums are not subject to the tax penalty. The exceptions applicable
to IRAs are applicable to Roth IRAs. Qualified distributions from Roth IRAs are
not subject to the tax penalty.
Generally, distributions from a Qualified Plan of a 5% owner or from an IRA must
commence no later than April 1 of the calendar year, following the year in which
the employee attains age 70 1/2, and from all others in Qualified Plans at the
later of age 70 1/2 or when the employee retires. Required distributions must be
over a period not exceeding the life expectancy of the individual or the joint
lives or life expectancies of the individual and his or her designated
beneficiary. If the required minimum distributions are not made, a 50% penalty
tax is imposed as to the amount not distributed. There are no required minimum
distributions for a Roth IRA.
Restrictions Under Qualified Contracts. Other restrictions with respect to the
election, commencement, or distribution of benefits may apply under Qualified
Contracts or under the terms of the plans in respect of which Qualified
Contracts are issued.
General
At the time the initial Purchase Payment is paid, a prospective purchaser must
specify whether he or she is purchasing a Non-qualified Contract or a Qualified
Contract. If the initial Purchase Payment is derived from an exchange or
surrender of another annuity contract, C.M. Life may require that the
prospective purchaser provide information with regard to the federal income tax
status of the previous annuity contract. C.M. Life will require that persons
purchase separate Contracts if they desire to invest monies qualifying for
different annuity tax treatment under the Code. Each such separate Contract
would require the minimum initial Purchase Payment stated above. Additional
Purchase Payments under a Contract must qualify for the same federal income tax
treatment as the initial Purchase Payment under the Contract. C.M. Life will not
accept an additional Purchase Payment under a Contract if the federal income tax
treatment of such Purchase Payment would be different from that of the initial
Purchase Payment.
Additional Information About The Separate Account
Addition, Deletion or Substitution of Investments
C.M. Life cannot and does not guarantee that any of the Sub-Accounts of the
Separate Account, or Portfolios of the Funds, will always be available for
Purchase Payments, al-locations, or transfers. C.M. Life retains the right to
make changes in the Separate Account and its investments.
C.M. Life reserves the right to eliminate the shares of any Portfolio held by a
Sub-Account, and to substitute shares of another Portfolio of the Funds, or of
another registered open-end management investment company, for the shares of any
Portfolio, if the shares of the Portfolio are no longer available for
investment, or if, in C.M. Life's judgment, investment in any Portfolio would be
inappropriate in view of the purposes of the Separate Account. To the extent
required by the 1940 Act, substitutions of shares attributable to the Contract
Owner's interest in a Sub-Account will not be made without prior notice to the
Contract Owner and the prior approval of the SEC. Nothing contained herein shall
prevent the Separate Account from purchasing other securities for other series
or classes of variable annuity policies, or from effecting an exchange between
series or classes of variable annuity policies on the basis of requests made by
Contract Owners.
New Sub-Accounts may be established when, at the sole discretion of C.M. Life,
marketing, tax, investment or other conditions warrant. Any new Sub-Accounts may
be made available to existing Contract Owners on a basis to be determined by
C.M. Life. Each additional Sub-Account will purchase shares in a Portfolio of
the Funds, or in another mutual fund or investment vehicle. C.M. Life may also
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eliminate one or more Sub-Accounts if, at its sole discretion, marketing, tax,
investment or other conditions warrant such change. In the event any Sub-Account
is eliminated, C.M. Life will notify Contract Owners and request a reallocation
of the amounts invested in the eliminated Sub-Account.
In the event of any such substitution or change, C.M. Life may, by appropriate
endorsement, make such changes in the Contracts as may be necessary or
appropriate to reflect such substitution or change. Furthermore, if deemed to be
in the best interests of persons having voting rights under the Contracts, the
Separate Account may be (i) operated as a management company under the 1940 Act
or any other form permitted by law, (ii) deregistered under the 1940 Act in the
event such registration is no longer required, or (iii) combined with one or
more other separate accounts. To the extent permitted by applicable law, C.M.
Life also may transfer the assets of the Separate Account associated with the
Contracts to another account or accounts.
Performance Measures
C.M. Life may show the performance under the Contracts in the following ways:
Standardized Average Annual Total Return
C.M. Life will show the Standardized Average Annual Total Return for the
Sub-Accounts of the Separate Account which have been in existence for more than
one year. As prescribed by the rules of the SEC, the Standardized Average Annual
Total Return is the effective annual compounded rate of return that would have
produced the cash redemption value over the stated period had the performance
remained constant throughout. The Standardized Average Annual Total Return
assumes a single $1000 payment made at the beginning of the period and full
redemption at the end of the period. It reflects a deduction for the contingent
deferred sales charge, the annual Contract Maintenance Fee and all other Fund,
Separate Account, and Contract level charges except premium taxes, if any. The
annual Contract Maintenance Fee is apportioned among the Sub-Accounts based upon
the percentages of in-force Contracts investing in each of the Sub-Accounts.
The Company may choose to show Standardized Average Annual Total Returns based
on the inception of the underlying Fund.
Additional Performance Measures
The performance figures discussed in this section are calculated on the basis of
the historical performance of the Funds, and may assume the Contracts were in
existence prior to May 13, 1992 (which they were not). Beginning May 13, 1992
(inception date), actual Accumulation Unit values are used for the calculations.
The difference between the first set of additional performance measures,
ANNUALIZED RETURNS on Accumulation Unit Values, and the second set, the NON-
STANDARDIZED ANNUAL and AVERAGE ANNUAL TOTAL RETURNS, is that the second set
includes the deduction of the Annual Contract Maintenance Fee, the first set
does not. Additional details follow.
ACCUMULATION UNIT VALUES - ANNUALIZED RETURNS. The ANNUALIZED RETURN, or average
annual change in Accumulation Unit Values, may be shown with respect to one or
more periods. For a one year period, the ANNUALIZED RETURN is the effective
annual rate of return. For periods greater than one year, the ANNUALIZED RETURN
is the effective annual compounded rate of return for the periods stated. Since
the value of an Accumulation Unit reflects the Separate Account, the Panorama
Series Fund expenses and the Oppenheimer Fund expenses (See Table of Fees and
Expenses), the ANNUALIZED RETURN also reflects these expenses. These
percentages, however, do not reflect the Contract Maintenance Fee and the sales
charge or premium taxes (if any), which if included would reduce the percentages
reported.
The NON-STANDARDIZED ANNUAL TOTAL RETURN for a Sub-Account is the effective
annual rate of return that would have produced the ending Accumulated Value of
the stated one year period.
The NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN for a Sub-Account is the
effective annual compounded rate of return that would have produced the ending
Accumulated Value over the stated period had the performance remained constant
throughout.
Note: The NON-STANDARDIZED ANNUAL TOTAL RETURN will be less than the NON-
STANDARDIZED ANNUALIZED RETURN on Accumulation Unit values for the same period
due to the effect of the Annual Contract Maintenance Fee. Additionally, the
magnitude of this difference will depend on the size of the Accumulated Value
from which the Annual Contract Maintenance Fee is deducted.
YIELD AND EFFECTIVE YIELD. C.M. Life may show yield and effective yield figures
for the Money Market Sub-Account over a seven-day period, which is then
"annualized". That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Money
Market Sub-Account is assumed to be reinvested. Therefore the effective yield
will be slightly higher than the yield because of the compounding effect of this
assumed reinvestment. These figures do not reflect the contingent deferred sales
charge or premium taxes (if any), which if included would reduce the yields
reported.
The performance measures discussed above reflect results of the Funds and are
not intended to indicate or predict future performance. For more detailed
information see the Statement of Additional Information.
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Performance information for the Separate Account Sub-Accounts may be: (a)
compared to other variable annuity separate accounts or other investment
products surveyed by Lipper Analytical Services, a nationally recognized
independent reporting service or similar services that rank mutual funds and
other investment companies by overall performance, investment objectives and
assets; (b) tracked by other ratings services, companies, publications or
persons who rank separate accounts or other investment products on overall
performance or other criteria; and (c) included in data bases that can be used
to produce reports and illustrations by organizations such as CDA Wiesenberger
Performance figures will be calculated in accordance with standardized methods
established by each reporting service.
C.M. Life may also show the application of general mathematical principles in
connection with the Contracts.
Voting Rights
As long as the Separate Account continues to operate as a unit investment trust
under the Investment company Act of 1940, the Contract Owner during the lifetime
of the Annuitant, or the beneficiary after the Annuitant's death, will be
entitled to give instructions as to how the shares of the Funds held in the
Separate Account (or other securities held in lieu of such shares) deemed
attributable to the Contract should be voted at meetings of shareholders of the
Funds or the Trusts. Those persons entitled to give voting instructions will be
determined as of the record date for the meeting.
The number of Fund shares held in the Separate Account deemed attributable to a
Contract prior to its Maturity Date and during the lifetime of the Annuitant
will be determined by dividing the Contract's value held in each Sub-Account of
the Separate Account, if any, by $100. Fractional votes are counted. After the
Maturity Date or after the death of the Annuitant, the number of Fund shares
deemed attributable to the Contract will be based on the liability for future
Variable Monthly Annuity payments under the Contract as of the record date and
thus the voting rights will decrease as payments are made.
Contract Owners or beneficiaries will receive proxy material and a form with
which voting instructions may be given. Fund shares held by the Separate Account
as to which no effective instructions have been received or which are
attributable to assets transferred from C.M. Life's General Account will be
voted for or against any proposition in the same proportion as the shares as to
which instructions have been received.
In situations where the Annuitant is not the Contract Owner, the Annuitant will
have the right to instruct the Contract Owner with respect to the votes
attributable to any vested interest the Contract Owner has in the Contract. C.M.
Life's obligation in this instance will be to make available to the Contract
Owner copies of the proxy material for distribution to the Annuitant. Votes
representing interests as to which the Contract Owner is not instructed may, in
turn, be voted by the Contract Owner in his discretion.
Legal Proceedings
C.M. Life is not involved in any litigation that is of material importance in
relation to its General Account assets. In addition, there are no legal
proceedings to which the Separate Account is a party.
Available Information
C.M. Life is subject to the informational requirements of the Securities
Exchange Act of 1934, and, in accordance therewith, files reports and other
information with the SEC. Such reports and other information can be inspected
and copied at the public reference facilities of the SEC, at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549. Copies of such materials also can be
obtained from the Public Reference Section of the Commission, at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
C.M. Life has filed registration statements (the "Registration Statements") with
the SEC under the Securities Act of 1933 relating to the Contracts offered by
this Prospectus. This Prospectus has been filed as part of the Registration
Statements, and does not contain all of the information set forth in the
Registration Statements. Reference is hereby made to such Registration
Statements for further information relating to C.M. Life and the Contracts. The
Registration Statements may be inspected and copied, and copies can be obtained
at prescribed rates in the manner set forth in the preceding paragraph.
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Appendix I
Surrender Charge Calculation
A Surrender Charge is deducted from the Contract Balance upon partial or full
Surrender of the Contract, unless certain conditions apply. (See "Surrender
Charge," page 32.)
The partial surrender charge formula is calculated as follows:
(PS - FREE) x 5%(95%) = PSC, but not less than zero.
The full surrender charge formula is calculated as follows:
(FS - FREE) x 5% = FSC.
Where:
(PS) is the Partial Surrender Amount.
(FS) is the Full Surrender Amount.
(FREE) is the Free Surrender Amount.
(PSC) is the Partial Surrender Charge Amount.
(FSC) is the Full Surrender Charge Amount.
Example
Assume a Separate Account Balance of $50,000 at the beginning of the second
Contract Year.
1) If there is a Full Surrender at the beginning of the second Contract Year:
Surrender Charge =
($50,000 - $5,000) x .05 = $2,250.00.
Thus, the Surrender proceeds would be = $50,000 - $30 - $2,250.00 =
$47,720.00
Note: The contract maintenance fee ($30) applies to full surrenders.
2) If there is a Partial Surrender of $10,000 at the beginning of the second
Contract Year:
Surrender Charge =
($10,000 - $5000) x .05/.95 = $263.16.
Thus, the Separate Account Balance would be reduced by $10,000 + $263.16 =
$10,263.16.
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Appendix II
Interest Rate Factor Adjustment Calculation
The amount of General Account Balance partially or fully Surrendered during the
Accumulation Period, and the total General Account Balance on the Annuity Income
Date (if and to the extent that the General Account Balance is applied to a
Variable Annuity Option), will be subject to an Interest Rate Factor Adjustment.
The Interest Rate Factor Adjustment is based on interest rates payable on U.S.
Treasury securities. In general, if rates on U.S. Treasury securities are higher
when you Surrender than when you made the applicable Purchase Payments, a
negative Interest Rate Factor Adjustment will generally be applied to the amount
Surrendered, and you could receive an amount lower than the amount of Purchase
Payments made. If rates on U.S. Treasury securities are lower when you Surrender
than when you made the applicable Purchase Payments, a positive Interest Rate
Factor Adjustment will generally be applied to the amount Surrendered, and you
could receive an amount higher than the amount of Purchase Payments made. No
Interest Rate Factor Adjustment will be applied during the Window Period. In
addition, no Interest Rate Factor Adjustment will be applied to the General
Account Free Surrender Amount or to Contracts issued to Pennsylvania residents.
The Interest Rate Factor Adjustment will reflect the relationship between (i)
the weighted average of U.S. Treasury Index Rates corresponding to Purchase
Payments and Transfers into the General Account during the current Five-Year
Period (as adjusted for partial Surrenders or Transfers out of the General
Account), (ii) the U.S. Treasury Index Rate which would be applicable during the
time remaining in the current Five-Year Period on the date of the Surrender, and
(iii) the time remaining in the current Five-Year Period. In general, if the
weighted average of U.S. Treasury Index Rates corresponding to Purchase Payments
and Transfers during the current Five-Year Period is lower than the U.S.
Treasury Index Rate which would be applicable during the time remaining in the
current Five-Year Period, then the application of the Interest Rate Factor
Adjustment will result in a lower payment upon Surrender.
The partial surrender Interest Rate Factor Adjustment Formula is:
(1 - 1/IRF) x (GAPS - GAF + GAPSC) = IRFA.
In the event of a Partial Surrender, there is no Interest Rate Factor Adjustment
if the General Account Free Surrender Amount exceeds the General Account portion
of such Partial Surrender.
The full surrender Interest Rate Factor Adjustment Formula is:
(IRF - 1) x (GAFS - GAF) = IRFA.
Where:
(GAPS) is the General Account Partial Surrender
Amount.
(GAFS) is the General Account Full Surrender Amount.
(GAF) is the General Account Free Surrender Amount.
(GAPSC) is the General Account portion of the Partial
Surrender Charge Amount determined as follows:
GAPSC = (GAPS - GAF) x 5%/95%,
but not less than zero.
(IRF) is the Interest Rate Factor.
(IRFA) is the Interest Rate Factor Adjustment.
The Interest Rate Factor is determined by the following formula:
(1 + Ta)/(N/12)/
-------------------- = IRF
(1.003 + Tb)/(N/12)/
Where:
(Ta) is the weighted average of the U.S. Treasury Index Rates which
correspond to the Purchase Payments and/or Transfers allocated to the
General Account during the current Five-Year Period. The U.S. Treasury
Index Rate corresponding to each such allocation is determined by the
number of full years and fractions thereof (but not less than one (1)
year) remaining from the date of the allocation until the end of the
current Five-Year Period. For purposes of determining the average of
these rates, each U.S. Treasury Index Rate is weighted by the amount of
the corresponding allocation (as adjusted to reflect any partial
Surrenders and/or transfers from the General Account subsequent to such
allocation). The General Account Balance at the beginning of any
Five-Year Period will be treated as a new allocation for purposes of
this calculation.
Each allocation made prior to a Partial Surrender and/or transfer from
the General Account (other than the current Surrender) shall be
adjusted by multiplying such allocation by the following fraction:
1 - PS/GAB
Where:
(PS) is the amount of the Partial Surrender and/or transfer from the
General Account made subsequent to the allocation,
(GAB) is the beginning General Account Balance on the date of such Partial
Surrender and/or transfer from the General Account, A separate
adjustment shall be calculated for each prior Partial Surrender
and/or transfer from the General Account.
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(Tb) is the U.S. Treasury Index Rate with a maturity equal to the number
of full years and fractions thereof (but not less than one (1) year)
remaining in the current Five-Year Period on the date of the Partial
or Full Surrender,
(N) is the number of whole months remaining in the current Five-Year
Period as of the date of the Partial or Full Surrender (rounded
down),
1.003 builds into the formula a factor representing direct and indirect
costs to C.M. Life associated with liquidating General Account assets
in order to satisfy Surrender requests or to begin making Annuity
Income payments (to the extent the General Account Balance is applied
to purchase a Variable Annuity). This adjustment of .30% has been
added to the denominator of the formula because it is anticipated
that a substantial portion (more than half) of applicable General
Account portfolio assets will be in relatively illiquid private
placement securities. Thus, in addition to direct transaction costs,
if such securities must be sold (e.g., because of Surrenders), the
market price may be lower because they are not registered securities.
Accordingly, even if interest rates decline, there will not be a
positive adjustment until this factor is overcome, and then any
adjustment will be lower than otherwise, to compensate for this
factor. Similarly, if interest rates rise, any negative adjustment
will be greater than otherwise, to compensate for this factor. If
interest rates stay the same, this factor will result in a small but
negative Interest Rate Factor Adjustment.
(IRF) is the Interest Rate Factor.
Examples. The following examples illustrate the calculation of the Interest
Rate Factor and the Interest Rate Factor Adjustment.
In the following examples, the Interest Rate Factor Adjustment formula is
applied so as to produce only positive numbers, which are then added to, or
subtracted from, the Surrender proceeds (for Full General Account Balance
Surrenders) or the remaining General Account Balance (for Partial General
Account Balance Surrenders). For example, if the Interest Rate Factor is .7,
then the Interest Rate Factor Adjustment calculation illustrated below will show
1-.7, rather than .7-1, to result in a positive number.
For examples 1 and 2, assume no change in interest rates.
1) Assume a $50,000 General Account Balance at the beginning of the
second Five-Year Period, and a Full Surrender at that time.
Also, assume the U.S. Treasury Index Rate at that time is 7%.
(1.07)/(5)/
THEN: IRF = ------------ = .9861
(1.073)
Interest Rate Factor Adjustment [deducted from proceeds] = (1 -
.9861) x ($50,000 - $5,000) = $625.50.
2) Assume a $50,000 General Account Balance at the beginning of the
tenth Contract Year with a Full Surrender at that time.
Also, assume the U.S. Treasury Index Rate remains at 7% for all
maturities:
1.07
THEN: IRF = -------- = .9972
1.073
Interest Rate Factor Adjustment [deducted from proceeds] = (1 -
.9972) x ($50,000 - $5,000) = $126.00.
For examples 3 and 4, assume a General Account Balance of $50,000 at the
beginning of the seventh Contract Year.
3) Assume a Full Surrender at the beginning of the seventh Contract
Year:
a) Assume that the beginning U.S. Treasury Index Rate was 7%, and the
current U.S. Treasury Index Rate is 5.40%.
(This is a decrease in rates of 1.60%). Then the IRF = 1.05.
Interest Rate Factor Adjustment =
(1.05 - 1) x ($50,000 - $5,000) = $2,250.
Thus, the actual amount of Surrender proceeds paid = $50,000 +
$2,250 - $30 = $52,220.
b) Assume that the beginning U.S. Treasury Index Rate was 7%, and the
current U.S. Treasury Index Rate is 8.08%.
(This is an increase in rates of 1.08%). Then the IRF = .95.
Interest Rate Factor Adjustment =
(1 - .95) x ($50,000 - $5,000) = $2,250.
Thus, the actual amount of Surrender proceeds paid = $50,000 -
$2,250 - $30 = $47,720.
Note: The contract maintenance fee ($30) applies to full
surrenders.
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4) Assume a partial Surrender of $10,000 at the beginning of the seventh
Contract Year:
a) Assume that the beginning U.S. Treasury Index Rate was 7%, and the
current U.S. Treasury Index Rate is 5.40%.
(This is a decrease in rates of 1.60%).
Then the IRF = 1.05.
Interest Rate Factor Adjustment =
{ 1 - 1 } x ($10,000 - $5,000) = $238.10.
----
1.05
Thus, the General Account Balance would be reduced by $10,000 - $238.10 =
$9,761.90.
b) Assume that the beginning U.S. Treasury Index Rate was 7%, and the
current U.S. Treasury Index Rate is 8.08%.
(This is an increase in rates of 1.08%).
Then the IRF = .95.
Interest Rate Factor Adjustment =
{ 1 - 1 } x ($10,000 - $5,000) = $263.16.
----
.95
Thus, the General Account Balance would be reduced by $10,000 - $236.16 =
$10,263.16.
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Appendix III
Examples
The following examples illustrate the impact of the Interest Rate Factor
Adjustment together with the Surrender Charge (See Appendix I) on Surrender
proceeds. For examples 1 and 2, assume a General Account Balance of $50,000 at
the beginning of the second Contract Year.
1) Assume a Full Surrender at the beginning of the second Contract Year.
a) Assume that the beginning U.S. Treasury Index Rate was 7%, and the
current U.S. Treasury Index Rate is 4.18%.
(This is a decrease in rates of 2.82%). Then the IRF = 1.10.
Surrender Charge =
($50,000 - $5,000) x .05 = $2,250.00.
Interest Rate Factor Adjustment =
(1.10 - 1) x ($50,000 - $5,000) = $4,500.00.
Thus, the actual amount of Surrender proceeds paid = $50,000 -
$2,250 + $4,500 - $30 = $52,220.00.
b) Assume that the beginning U.S. Treasury Index Rate was 7%, and the
current U.S. Treasury Index Rate is 9.56%.
(This is an increase in rates of 2.56%). Then the IRF = .9.
Surrender Charge =
($50,000 - $5,000) x .05 = $2,250.00.
Interest Rate Factor Adjustment =
(1 - .9) x ($50,000 - $5,000) = $4,500.00.
Thus, the actual amount of Surrender proceeds paid = $50,000 -
$2,250 - $4,500 - $30 = $43,220.00.
Note: The contract maintenance fee ($30) applies to full
surrenders.
2) Assume a partial Surrender of $10,000 at the beginning of the second
Contract Year.
a) Assume that the beginning U.S. Treasury Index Rate was 7%, and the
current U.S. Treasury Index Rate is 4.18%.
(This is a decrease in rates of 2.82%.) Then the IRF = 1.10.
Surrender Charge =
($10,000 - $5,000) x .05/.95 = $263.16.
Interest Rate Factor Adjustment =
1
{(1 - ---- } x ($10,000 - $5,000) = $478.47.
1.10
Thus, the General Account Balance will be reduced by $10,000 +
$263.16 - $478.47 = $9,784.69.
b) Assume that the beginning U.S. Treasury Index Rate was 7%, and the
current U.S. Treasury Index Rate is 9.56%.
(This is an increase in rates of 2.56%.) Then the IRF = .9.
Surrender Charge =
($10,000 - $5,000) x .05/.95 = $263.16.
Interest Rate Factor Adjustment =
(1 - 1.9) x ($10,000 - $5,000 + $263.16) = $584.80.
Thus, the General Account Balance will be reduced by $10,000 +
$263.16 + $584.80 = $10,847.96.
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Appendix IV
IRA Disclosure Statement
This statement is designed to assist you in understanding the requirements of
federal tax law which apply to your Individual Retirement Annuity ("IRA"),
Spousal IRA or your Simplified Employee Pension IRA ("SEP-IRA") for employer
contributions. C.M. Life may make this Contract available in the Roth IRA
market. This IRA Disclosure Statement contains information on Roth IRAs. If you
desire further information regarding your IRA, it may be obtained from your
registered representative, from any district office of the Internal Revenue
Service, or from a competent tax adviser. The growth in the value of the annuity
is neither guaranteed nor projected.
Seven-Day Review Period
You have seven (7) days after you sign your application to review this statement
and the Prospectus without obligation. If you notify the Company at its Service
Center, either orally or in writing, within this seven-day period that you do
not wish to keep your Contract, your entire Purchase Payment will be refunded to
you.
Annuity Service Center
H562
P.O. Box 9067
Springfield, Massachusetts 01102-9067
Telephone: 1-800-272-2216
Eligibility Requirements
All persons with earned compensation are eligible for IRAs. Additionally, if you
have a spouse who has earned no compensation (and you file a joint tax return),
an IRA for your spouse may also be established. Of course, if you have a working
spouse who has earned compensation, that spouse may establish his or her own
IRA. Lastly, a divorced or legally separated spouse may treat taxable alimony or
separate maintenance payments as compensation for purposes of establishing an
IRA.
The Annuity as an IRA
When this Annuity is issued as an IRA, the Contract is amended to provide that
the Contract is both nontransferable and nonforfeitable.
Contributions and Deductions
As a result of significant changes made by the Tax Reform Act of 1986,
contributions to your IRA are limited at two levels. First, there are limits on
the amount of contributions which may be deducted for income tax purposes.
Second, there is a limit with respect to the amount of nondeductible
contributions which can be made. In addition, The Small Business Job Protection
Act of 1996 and The Taxpayer Relief Act of 1997 may also affect contributions
and withdrawals from your IRA. Special tax rules apply in the case of Roth
IRAs.
For tax years beginning after 1997, an individual who is not an active
participant in an employer-maintained retirement plan is eligible to make
deductible contributions to an IRA equal to the lesser of 100% of compensation
or $2,000. A spouse who is not an active participant in an employer-maintained
retirement plan during any part of a year but whose spouse is a plan participant
may make a deductible IRA contribution, subject to phase-out at adjusted gross
income between $150,000 and $160,000. Furthermore, an individual who files a
joint return and who has less taxable compensation than his spouse may
contribute to a spousal IRA and deduct the lesser of $2,000 or the sum of (a)
that individual's includible compensation for the tax year plus (b) the
includible compensation of the individual's spouse reduced by the spouse's
allowable IRA deduction and Roth IRA contribution for the tax year.
However, if you or your spouse (if you file a joint return) is an active
participant in an employer-maintained retirement plan, your IRA deduction may be
reduced or eliminated entirely at certain levels of adjusted gross income. For
tax years beginning after 1997, phase-out ranges for deductible IRA
contributions increase annually until 2005 or 2007. Specifically, the adjusted
gross income phase-out range in 1998 for individuals with a single or head of
household filing status is $30,000 to $40,000, increasing annually to $50,000 to
$60,000 in 2005. For married individuals filing a joint return, the phase-out
range in 1998 is $50,000 to $60,000, increasing annually to $80,000 to $100,000
in 2007. The phase-out range in any year for a married individual filing
separately is $0 to $10,000. In all cases, the IRA deduction will be phased out
ratably within the respective ranges.
Nevertheless, you may still make designated IRA contributions to the extent of
the excess of (1) the lesser of $2,000, ($4,000 in the case of a Spousal IRA),
or 100% of compensation annually, over (2) the applicable IRA deduction limit.
You may also choose to make a contribution nondeductible even if you could have
deducted part or all of the contribution. Interest or other earnings on your IRA
contribution, whether from deductible or nondeductible contributions, will not
be taxed until distributed to you.
For purposes of the above discussion, you are an "active participant" in an
employer-maintained retirement plan, if you are covered by such plan, even if
you are not yet vested in your retirement benefit. However, an individual who is
a participant in only an eligible state deferred compensation plan, as defined
in Internal Revenue Code section 457(b), is not considered to be an "active
participant."
In order to qualify for a particular tax year, IRA contributions must be made
during such tax year, or by the deadline for filing your income tax return for
that year (not including extensions). For calendar year taxpayers the deadline
is generally April 15.
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<PAGE>
If you make contributions to an IRA, Roth IRA or Education IRA in excess of the
combined deductible and nondeductible limits, you may be liable for a
nondeductible excise tax of 6% of the amount of the excess. You may withdraw an
excess contribution together with the net income attributable to the excess, on
or before the due date (including extensions of time) for filing your federal
income tax return, and the excess amount will be treated as if you never
contributed it, regardless of the size of the contribution. The accompanying
distribution of the net income, however, is includable in income for the year in
which the excess contribution is made. Excess amounts which are not withdrawn by
this method are subject to the 6% excise tax in the year of contribution, and
are carried over and taxed each year until the year the excess is reduced.
No contribution may be made by you to your IRA during or after the tax year in
which you attain age 70 1/2.
Spousal IRAs
If your spouse has no compensation for the year and you file a joint return, you
may set up and make contributions to an IRA for your spouse, as well as for
yourself. Subject to the active participant rules discussed above, the maximum
amount that you can deduct for contributions to both IRAs is the lesser of
$4,000, or 100% of compensation reduced by the spouse's allowable IRA deduction
and Roth IRA contribution for the tax year. You may not contribute, however,
more than $2,000 to either IRA for any year.
SEP-IRAs
Under a SEP-IRA agreement, your employer may contribute 15% of your
compensation, up to $30,000 each year to your IRA. The contribution and interest
earned is excludable from your income until such time as it is distributed to
you.
You must withdraw any excess contribution made to your SEP-IRA by your employer
before the date for filing your return. If you do not, you are liable for the 6%
excise tax discussed above. SEP-IRAs are also generally subject to the other
requirements applicable to IRAs.
Roth IRAs
Roth IRAs are specially designated IRAs. Roth IRAs are subject to the same rules
as traditional IRAs except for certain special rules. Contributions to Roth IRAs
are not deductible and are limited based on modified adjusted gross income. You
may make a contribution to a Roth IRA even if you are an active participant in
an employer-maintained retirement plan. You may also make contributions to a
Roth IRA after age 70 1/2
You may contribute a maximum of $2,000 per year to all IRAs (deductible,
nondeductible and Roth IRAs). This $2,000 annual limit does not include rollover
contributions. The $2,000 maximum annual contribution to a Roth IRA phases out
for individuals with a single or head of household filing status with modified
adjusted gross income between $95,000 and $110,000. For married individuals
filling a joint return, the maximum annual contribution to a Roth IRA phases out
with modified adjusted gross income between $150,000 and $160,000.
Qualified distributions from Roth IRAs are not included in income and are not
subject to the 10% tax on premature distributions. To be qualified, a
distribution must not be made before the end of the five year tax period
beginning with the first tax year a contribution to a Roth IRA is made, and the
distribution must be made: (a) on or after the date on which you attain age 59
1/2; or (b) to your beneficiary or your estate after your death; or (c) as a
result of your being disabled; or (d) to pay for qualified first-time homebuyer
expenses.
Distributions that are not qualified distributions are treated first as a return
of investment to the extent of your contributions to Roth IRAs and as a taxable
distribution to the extent of any excess. Roth IRAs are not subject to required
minimum distribution rules or to incidental death benefit rules.
If you are not married filing separately and if your adjusted gross income for a
tax year does not exceed $100,000, you may roll over distributions within 60
days from a traditional IRA to a Roth IRA or you may convert a traditional IRA
into a Roth IRA. While the rollover would be subject to a tax, it would not be
subject to the 10% premature distribution penalty tax. If the rollover occurs
during 1998, the taxable amount is included in gross income ratably over four
years.
Rollover Contributions and Transfers
You are permitted to withdraw any portion of the value of your IRA and reinvest
it in another IRA account, but not more frequently than once in any twelve-month
period. Such withdrawals may also be made from other IRAs and contributed to
this contract. The amount of the withdrawal reinvested in another IRA within
sixty (60) days after the date it is received is called a "rollover
contribution" and is not subject to tax. Of course, you will not be allowed a
tax deduction for the amount of any rollover contribution. You may not roll over
IRA distributions required because you have reached age 70 1/2, or an IRA you
inherited as a beneficiary (unless you are the surviving spouse).
A similar type of rollover contribution can be made with the proceeds of an
eligible rollover distribution or a lump-sum distribution from a qualified
retirement plan. Such a distribution must also be invested in the IRA within
sixty (60) days of receipt. A lump sum distribution is one made from a Qualified
Plan (1) because of your death; (2) because you reached age 59 1/2, (3) because
you left your job (unless you are self-employed); or (4) because you become
permanently disabled (but only if you are self-employed). To be considered a
lump sum, the distribution must also be made entirely in a single tax year, and
must represent the entire value of your account in the retirement plan (and in
all plans of a
38
<PAGE>
similar type sponsored by the same employer). Properly made, such a distribution
will not be taxable until you receive payments from the IRA created with it.
Eligible rollover distributions are generally all taxable distributions from
Qualified Plans and Section 403(b) annuities except for: (1) amounts paid over
your life or life expectancy; or (2) installments for periods spanning ten (10)
years or more; and (3) required minimum distributions.
Also, if you receive a distribution upon a plan termination, you may make a
rollover contribution to an IRA.
In addition to rollover contributions, you may have the assets of one IRA
directly transferred (without any distribution to you) to another IRA. Direct
IRA to IRA transfers are not subject to the one-year waiting period applicable
to IRA rollover contributions.
Special tax rules apply to rollover contributions to a Roth IRA.
Withdrawals
In general, IRA withdrawals are taxable in full. If you have made both
deductible and nondeductible IRA contributions, the part of the withdrawal that
is from nondeductible contributions (not including interest) is excludable from
income. The amount excludable from income for the tax year is the portion of the
amount withdrawn that has the same ratio to the amount withdrawn as your total
nondeductible IRA contributions (of all your IRAs) have to the total balance of
all your IRAs, including rollover IRAs. The remaining portion of the amount
withdrawn for the tax year is includible in income. For purposes of this
calculation, all your IRAs are treated as one (1) contract, and all withdrawals
you make during a tax year are treated as one (1) distribution, and the value of
the contract (after adding back distributions made during the year), income on
the contract and investment in the contract are computed at the end of the year.
The special tax rules for lump sum distributions from pension plans do not apply
to IRAs.
Special tax rules apply to distributions from Roth IRAs.
Premature Distributions
Premature distributions are amounts you withdraw from your IRA before you are
age 59 1/2. Premature distributions which are not rolled over are subject to a
penalty tax equal to 10% of the amount of the distribution includible in gross
income in the tax year, unless you are totally disabled, or receive the
distributions in substantially equal payments (at least annually) for your life
or life expectancy, or the joint lives or life expectancies of you and your
beneficiary, or unless the distributions are made to your beneficiary upon your
death.
Effective for calendar years beginning January 1, 1997, withdrawals from IRAs
for payment of certain medical expenses, and withdrawals by certain unemployed
persons for payment of health insurance premiums, are not subject to the 10%
penalty tax under Section 72(t). Effective for calendar years beginning January
1, 1998, withdrawals from IRAs for payment of certain qualified higher education
expenses and withdrawals for certain first time homebuyer expenses are not
subject to the 10% penalty tax under Section 72(t).
The penalty tax is also applicable to income taxable distributions deemed to
have been made upon disqualification of your IRA as a result of a prohibited
transaction (including, in general, the sale or assignment of your interest in
your IRA to anyone), or as a result of borrowing on your IRA, or using your IRA
as security for a loan.
Special tax rules apply to distributions from Roth IRAs.
Inadequate Distribution or Underdistribution - 50% Tax
Your IRA is intended to provide retirement benefits over your lifetime. Thus,
federal law requires that you either (1) receive a lump sum distribution from
your IRA not later than April 1st of the year after the year in which you attain
age 70 1/2 or (2) start to receive periodic payments by that date. If you elect
to receive periodic payments, those payments must be sufficient to pay out the
entire value of your IRA during your life or life expectancy or over the life or
life expectancies of you and your beneficiary. If the payments are not
sufficient to meet these annual requirements, an excise tax of 50% will be
imposed on the amount of any underpayment.
Death Benefits
If you should die before receiving any benefits from your IRA, your beneficiary
must elect to either (1) receive the balance of your account in a lump sum
within five (5) years of your death, or (2) have the balance applied to purchase
an immediate annuity payable over the life or life expectancy of the
beneficiary. Such annuity must commence within one (1) year of your death. If
your spouse is your beneficiary, however, distributions are not required to be
distributed until the date you would have attained age 70 1/2, and if your
spouse dies before any distribution to him or her commences, your spouse is
treated as the owner of your IRA for purposes of any required distributions.
If you should die after benefits have commenced to you, the remaining portion of
your account must be distributed to your beneficiary as rapidly as under the
method of distribution in effect on the date of your death.
Prohibited Transactions
If you engage in certain prohibited transactions with your IRA, the IRA will
lose its exemption from taxation. Depend-
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<PAGE>
ing on the type of prohibited transaction, you must include in income all or a
portion of the fair market value of the IRA account. Examples of prohibited
transactions are: (1) any borrowing from the account; (2) use of the account as
security for a loan; (3) receipt by you or certain family members of
unreasonable compensation for managing the IRA.
Prototype Status
The Internal Revenue Service currently has not been asked to review the format
of your C.M. Life Insurance Company ("C.M. Life") Prototype IRA or issue a
determination letter regarding the qualification of the prototype IRA. However,
an opinion letter is a determination only as to the form of the IRA, and does
not represent a determination as to its merits.
Reporting to the IRS
If you make a designated nondeductible contribution to an IRA for a taxable
year, or receive a distribution from an IRA during a taxable year, you are
required to provide such information as the IRS may prescribe on your tax return
for the taxable year and, to the extent required, for succeeding taxable years.
The information that may be required includes, but is not limited to: (1) the
amount of designated nondeductible contributions for the taxable year; (2) the
total amount of designated nondeductible contributions for all preceding taxable
years that have not previously been withdrawn; (3) the total balance of all your
IRAs as of the close of the calendar year with or within which the taxable year
ends; and (4) the amount of distributions from your IRAs during the taxable
year. If the required information is not shown on your return, all traditional
IRA contributions are presumed to have been deductible. Therefore, they will be
taxable upon withdrawal from the IRA, unless it can be shown, with satisfactory
evidence, that the contributions were nondeductible when they were made.
Whenever you are liable for one of the penalty taxes discussed above (6% for
excess contributions, 10% for premature distributions or 50% for underpayments,
you must file Form 5329 with the Internal Revenue Service. The form is to be
attached to your income tax return (Form 1040) for the tax year in which the
penalty applies.
Financial Disclosure
The charges which may be made against a contribution to your IRA include the
Mortality and Expense Risk Charge, and other fees for the Investment Accounts
set forth in the Prospectus. The charges which may be made against a withdrawal
are also described in the Prospectus, and you should read the Prospectus
carefully and retain it for your future reference. Growth in the value of your
IRA is neither projected nor guaranteed. Capital gains in excess of net realized
short-term capital losses of a Portfolio are declared and paid annually in
additional full and fractional shares.
Additional Information
A Statement of Additional Information is available which contains more details
concerning the subjects discussed in this Prospectus. The following is the Table
of Contents for that Statement. You may obtain a copy by calling our Annuity
Service Center at 1-800-272-2216, or by writing to us at Annuity Service Center,
H562, P.O. Box 9067, Springfield, MA 01102-9067
Table Of Contents
1. GENERAL INFORMATION
2. CONTRACT VALUE CALCULATIONS
3. RECORDS, REPORTS AND SERVICES
4. INDEPENDENT ACCOUNTANTS
5. PERFORMANCE MEASURES
6. DISTRIBUTION
7. PURCHASE OF SECURITIES BEING OFFERED
8. FEDERAL TAX MATTERS
9. OTHER INFORMATION
10. FINANCIAL STATEMENTS
40
<PAGE>
This Prospectus sets forth the information about Panorama Plus Separate Account
that a prospective investor ought to know before investing. Certain additional
information about the Separate Account is contained in a Statement of Additional
Information dated May 1, 1998, which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. The information is
available upon request and without charge. To obtain this information, return
this request form to the address shown below or telephone 1-800-272-2216. The
Table of Contents for the Statement of Additional Information appears on the
last page of this Prospectus.
- --------------------------------------------------------------------------------
To: Annuity Service Center, H562
P.O. Box 9067
Springfield, MA 01102-9067
Please send me a Statement of Additional Information for Panorama Plus.
Name
--------------------------------------------------------------------
Address
-----------------------------------------------------------------
-----------------------------------------------------------------
City State Zip
----------------------------- -------------- -------------
Telephone
---------------------------------------------------------------
41
<PAGE>
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PANORAMA PLUS ANNUITY
OFFERED BY
C.M. LIFE INSURANCE COMPANY
140 GARDEN STREET HARTFORD, CT 06154
May 1, 1998
This Statement of Additional Information expands upon certain subjects discussed
in the current Prospectus for the Panorama Plus variable annuity contract (the
"Contract") offered by C.M. Life Insurance Company. You may obtain a copy of the
Prospectus dated May 1, 1998 by calling 1-800-272-2216, or by writing to the
Annuity Service Center, H305, P.O. Box 9067, Springfield, MA 01102-9067. Terms
used in the current Prospectus for the Contract are incorporated in this
Statement.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
ONLY IN CONJUNCTION WITH THE PROSPECTUSES FOR THE CONTRACT AND FOR THE
UNDERLYING PORTFOLIOS.
TABLE OF CONTENTS
PAGE
General Information and History.....................................2
Contract Value Calculations.........................................3
Records, Reports and Services.......................................5
Independent Accountants.............................................6
Performance Measures................................................6
Distribution........................................................8
Purchase of Securities Being Offered................................9
Federal Tax Matters.................................................9
Other Information...................................................10
Financial Statements................................................final pages
1
<PAGE>
GENERAL INFORMATION
C.M. Life Insurance Company
----------------------------
C.M. Life Insurance Company ("C.M. Life"), 140 Garden Street, Hartford,
Connecticut 06154, is a stock life insurance company. It was chartered by a
special Act of the Connecticut General Assembly on April 25, 1980. It is
principally engaged in the sales of life insurance and annuities, and is
licensed in all states except New York. C.M. Life is a wholly-owned subsidiary
of Massachusetts Mutual Life Insurance Company ("MassMutual"). MassMutual is a
mutual life insurance company specially chartered by the Commonwealth of
Massachusetts on May 14, 1851. It is currently licensed to transact life
(including variable life), accident, and health insurance business in all
states, the District of Columbia, Puerto Rico and certain provinces of Canada.
MassMutual had estimated unconsolidated statutory assets in excess of $57
billion and estimated total assets under management in excess of $152 billion as
of December 31, 1997.
Prior to February 29, 1996, C.M. Life was a wholly-owned subsidiary of
Connecticut Mutual Life Insurance Company ("Connecticut Mutual"). On February
29, 1996, Connecticut Mutual merged with and into MassMutual.
The merger did not affect any provisions of, or rights or obligations under the
Contracts issued by C.M. Life.
The Separate Account
--------------------
The Panorama Plus Separate Account of C.M. Life Insurance Company (the "Separate
Account") was established as a separate account under the laws of the State of
Connecticut, on September 25, 1991. The Separate Account will receive and invest
the Net Purchase Payments under the Contracts that are allocated to it as well
as amounts transferred to it in shares of two mutual funds ("Funds"): the
Panorama Series Fund, Inc. (the "Panorama Fund") (formerly known as Connecticut
Mutual Financial Services Series Fund I, Inc.) and the Oppenheimer Variable
Account Funds ("OVAF").
Under Connecticut law, the assets of the Separate Account are owned by C.M.
Life, but they are held separately from the other assets of C.M. Life, and are
not chargeable with liabilities incurred in any other business operation of C.M.
Life (except to the extent that assets in the Separate Account exceed the
reserves and other liabilities of the Separate Account). Income, gains, and
losses incurred on the assets in the Sub-Accounts of the Separate Account,
whether or not realized, are credited to or charged against that Sub-Account,
without regard to other income, gains or losses of any other Investment Account
or Sub-Account of C.M. Life. Therefore, the investment performance of any
Sub-Account is entirely independent of the investment performance of C.M. Life's
General Account assets or any other separate account maintained by C.M.
Life.
The Separate Account is registered with the Securities and Exchange Commission
(the "SEC") under the Investment Company Act of 1940, as amended, (the "1940
Act") as a unit investment trust. It meets the definition of a "separate
account" under the federal securities laws. However, the SEC does not supervise
the management or the investment practices or policies of the Separate Account
or of C.M. Life.
The Separate Account is divided into six Sub-Accounts, with the assets of each
Sub-Account invested in one or more shares of the Panorama Fund and OVAF
("Funds"), each of which is a series-type mutual fund registered with the SEC
under the "1940 Act" as an open-end, diversified management investment company.
In addition to the Money Fund and Bond Fund of OVAF, four (4) Portfolios of the
Panorama Fund are currently available under the Contract: the Government
Securities Portfolio, the Total Return Portfolio, the Growth Portfolio, and the
International Equity Portfolio. The assets of each investment option are held
separately from the assets of the other investment options, and each investment
option has its own distinct investment objective and policies. A description of
the Funds, their investment objectives, policies and restrictions, their
expenses, the risk attendant therein, and aspects of their operation may be
found in the Prospectus and Statement of Additional Information for each Fund.
The Prospectus and Statement of Additional Information is available for each
Fund upon request at the Annuity Service Center.
2
<PAGE>
OppenheimerFunds, Inc. ("OFI"), an investment adviser registered with the SEC
under the Investment Advisers Act of 1940, as amended, ("Investment Advisers
Act") is the investment adviser to the Funds. OFI has operated as an investment
adviser since 1959 and, including a subsidiary, manages investment companies
with more than $75 billion in assets and over 3.5 million shareholder accounts
as of December 31, 1997. OFI is owned by Oppenheimer Acquisition Corp., a
holding company that is owned in part by senior officers of OFI and controlled
by MassMutual. The address of OFI is Two World Trade Center, New York, NY
10048-0203.
Babson-Stewart Ivory International ("Babson-Stewart") provides sub-advisory
services to the International Equity Portfolio pursuant to a sub-advisory
agreement between Babson-Stewart and OFI. Babson-Stewart is located at One
Memorial Drive, Cambridge, MA 02142, and is a partnership formed in 1987 between
David L. Babson & Co., Inc., a subsidiary of MassMutual, and Stewart Ivory &
Co., Ltd., located in Edinburgh, Scotland.
CONTRACT VALUE CALCULATIONS
---------------------------
Determination of Sub-Account Accumulation Unit Values
-----------------------------------------------------
ACCUMULATION UNITS. Accumulation Units are used to account for all
amounts allocated to or withdrawn from the Separate
Account. C.M. Life will determine the number of
Accumulation Units of a Sub-Account purchased or
canceled by dividing the Net Purchase Payment
allocated to (or the amount withdrawn from) the Sub-
Account by the dollar value of one Accumulation Unit
on the date of the transaction. The Separate Account
Balance will consist of the sum of the value of all
Accumulation Units in all Sub-Accounts credited to
the Contract on the applicable Valuation Date.
ACCUMULATION UNIT VALUE. The value of an Accumulation Unit in a Sub-Account on
any Valuation Date is the product of (a) the value on
the preceding Valuation Date and (b) the Net
Investment Factor for the Sub-Account for the
Valuation Period just ended.
A VALUATION DATE is every day on which C.M. Life and the New York
Stock Exchange (NYSE) are open for business, but
shall not include any day on which trading on the
NYSE is restricted, or on which an emergency exists,
as determined by the Securities and Exchange
Commission and/or respective governing bodies of the
NYSE so that valuation or disposal of securities is
not practicable.
A VALUATION PERIOD is the period of time beginning on the day following
any Valuation Date and ending on the next Valuation
Date. A Valuation Period may be one day or more than
one day.
NET INVESTMENT FACTOR C.M. Life calculates the Net Investment Factor for
each Sub-Account as follows:
(ENAV + DIV - TAX) / BNAV - CHGS = Net Investment Factor
Where:
(ENAV) ending net asset value, I.E., the net asset value per share
of the Sub-Account's investment in the appropriate Portfolio of a
Fund for the Valuation Period just ended.
(DIV) dividends, I.E., any dividend per share declared on behalf
of the Portfolio that has an ex-dividend date within the Valuation
Period just ended. This includes both income and capital gain
dividends.
3
<PAGE>
(TAX) taxes, I.E., the reserve for taxes per share on realized and
unrealized capital gains or losses of such Portfolio within the
Valuation Period just ended (a negative number represents a tax
credit).
(BNAV) beginning net asset value, I.E., the net asset value per
share of the Sub-Account's investment in such Portfolio of a Fund
at the beginning of the Valuation Period just ended.
(CHGS) applicable charges, I.E., the accumulated Mortality and
Expense Risk Charge and Administrative Expense Charge for each day
in the Valuation Period just ended (which will not exceed 1.50% on
an annual basis).
EXAMPLE. The following example illustrates the calculation of
-------
Accumulation Unit Value:
<TABLE>
<S> <C>
Net Asset Value Per Share at End of Valuation Period (ENAV) = $ 34.00
Dividends Per Share Declared (Ex-dividend Date within Valuation Period) (DIV) = $ 2.00
Reserve for Taxes Per Share on Capital Gains/Losses (within valuation Period)(TAX) = $ [5.00]
Net Asset Value Per Share at Beginning of Valuation Period (BNAV) = $ 30.00
Applicable Mortality and Expense and Administrative Charges for Valuation Period
(CHGS) = (.0107 + .0007)/365 = .0000312
Net Investment Factor = (34 + 2 - 5)/30 - .0000312 = 1.0333021
Accumulation Unit Value at Beginning of Period = $ 10.00
Accumulation Unit Value at End of Period = 10.00 x 1.0333021 = $ 10.33
</TABLE>
Annuity Period Transfer Formulas
--------------------------------
During the Annuity Period, the Contract Owner may transfer Separate Account
Balance from one Sub-Account to another, subject to certain limitations. No
transfers are permitted to or from the General Account during the Annuity
Period. (See "Transfers," in the Prospectus.)
1. Transfers during the Annuity Period are implemented according to the
following formula:
2. Determine the number of units to be transferred from the Sub-Account
as follows: = AT/AUV1
3. Determine the number of Annuity Units remaining in such Sub-Account
(after the transfer) = UNIT1- AT/AUV
4. Determine the number of Annuity Units in the transferee Sub-Account
(after the transfer): = UNIT2 + AT/AUV2
5. Subsequent annuity payments will reflect the changes in Annuity Units
in each Sub-Account as of the next Annuity Income payment's due date.
Where:
(AUV1) is the Annuity Unit Value of the Sub-Account that the
transfer is being made from as of the next annuity
payment's due date.
4
<PAGE>
(AUV2) is the Annuity Unit Value of the Sub-Account that the
transfer is being made to as of the next annuity
payment's due date.
(UNIT1) is the number of units in the Sub-Account that the
transfer is being made from, before the transfer.
(UNIT2) is the number of units in the Sub-Account that the
transfer is being made to, before the transfer.
(AT) is the dollar amount being transferred from the
Sub-Account.
EXAMPLE. The following example illustrates the application of
------- the Annuity Period transfer formulas:
ASSUME
------
Annuity Unit Value of Sub-Account #1 = $10.00
Annuity Unit Value of Sub-Account #2 = $ 8.50
Number of Units in Sub-Account #1 = 50
Number of Units in Sub-Account #2 = 20
To Transfer $30.00 From Sub-Account #1 to Sub-Account #2:
Number of Units to Transfer from Sub-Account #1 = 30/10 = 3
Number of Units Left after Transfer = 50 - 3 = 47
Number of Units to Transfer to Sub-Account #2 = 30/8.50 = 3.53
New Number of Units in Sub-Account #2 = 20 + 3.53 = 23.53
New Monthly Annuity Income Payment From Sub-Account #1= 10 x 47 =
$470.00
New Monthly Annuity Income Payment From Sub-Account #2= 23.53 x
8.50 = $200.01
RECORDS, REPORTS AND SERVICES
All records and accounts relating to the Separate Account will be maintained by
C.M. Life. As presently required by the Investment Company Act of 1940 and
regulations promulgated thereunder, C.M. Life will mail to all Contract Owners
at their last known address of record, at least annually, reports containing
such information as may be required under that Act or by any other applicable
law or regulation. Contract Owners will also receive confirmation of each
financial transaction and any other reports required by law or regulation.
The assets of each of the Sub-Accounts of the Separate Account are held in the
custody of C.M. Life. The assets of each of the Sub-Accounts of the Separate
Account are segregated and held separate and apart from the assets of the other
Sub-Accounts and from C.M. Life's General Account assets. C.M. Life maintains
records of all purchases and redemptions of shares of the Portfolios of the
Funds held by each of the Sub-Accounts.
5
<PAGE>
INDEPENDENT ACCOUNTANTS
The audited financial statements of Panorama Plus Separate Account as included
in this Statement of Additional Information have been so included in reliance on
the report of Coopers & Lybrand L.L.P., Springfield, Massachusetts, 01101,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
The audited statements of statutory financial position of C.M. Life Insurance
Company as of December 31, 1997 and 1996 and the related statutory statements of
income, changes in capital stock and surplus and cash flows for each of the
years in the two year period ended December 31, 1997 included in this Statement
of Additional Information have been so included in reliance on the report of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
The statutory statements of income, changes in capital stock and surplus and
cash flows of C.M. Life Insurance Company for the year ended December 31, 1995
included in this registration statement have been audited by Arthur Andersen
LLP, Hartford, Connecticut, independent public accountants, as indicated in
their report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
PERFORMANCE MEASURES
C.M. Life may show the performance for the Sub Accounts of the Separate Account
in the following ways:
Standardized Average Annual Total Return
----------------------------------------
C.M. Life will show the "Standardized Average Annual Total Return," formulated
as prescribed by the rules of the SEC, for each Sub-Account. The Standardized
Average Annual Total Return is the effective annual compounded rate of return
that would have produced the cash redemption value over the stated period had
the performance remained constant throughout. The calculation assumes a single
$1,000 payment made at the beginning of the period and full redemption at the
end of the period. It reflects a deduction for the contingent deferred sales
charge, the Annual Contract Maintenance Fee and all other Fund, Separate Account
and Contract level charges except premium taxes, if any. The Annual Contract
Maintenance Fee is apportioned among the Sub-Accounts based upon the percentages
of in force Contracts investing in each of the Sub-Accounts. The Company may
choose to show Standardized Average Annual Total Returns based on the inception
of the underlying Fund.
The following tables show the Standardized Average Annual Total Return for the
Sub-Accounts for the period ended December 31, 1997.
<TABLE>
<CAPTION>
1 Year 5 Years Since Inception
------ ------- ---------------
<S> <C> <C> <C>
Growth Portfolio 18.48% 18.11% 17.09%
Total Return Portfolio 11.03% 10.95% 10.62%
Oppenheimer Bond Portfolio 2.96% 6.82% 6.84%
Government Securities Portfolio 2.64% 5.45% 5.93%
Oppenheimer Money Portfolio -0.64% 3.43% 3.34%
International Portfolio 1.58% 9.08% 6.96%
</TABLE>
The inception date of the Contract was May 13, 1992.
6
<PAGE>
Additional Performance Measures
-------------------------------
The performance figures discussed below, are calculated on the basis of the
historical performance of the Funds, and may assume the Contracts were in
existence prior to May 13, 1992 (which they were not). Beginning May 13, 1992
(inception date), actual Accumulation Unit values are used for the calculations.
The difference between the first set, ANNUALIZED RETURNS on Accumulation Unit
Values, and the second set, the NON-STANDARDIZED ANNUAL and AVERAGE ANNUAL TOTAL
RETURNS, is that the second set includes the deduction of the Annual Contract
Maintenance Fee, whereas the first set does not. Additional details follow.
Accumulation Unit Values: Annualized Returns.
---------------------------------------------
C.M. Life will show the ANNUALIZED RETURN, or average annual change in
Accumulation Unit values, with respect to one or more periods. For one year, the
Annualized Return is the effective annual rate of return. For periods greater
than one year, the Annualized Return is the effective annual compounded rate of
return for the periods stated. Since the value of an Accumulation Unit reflects
the Separate Account and Fund expenses (See Table of Fees and Expenses in the
Prospectus), the Percentage Change and Annualized Returns also reflect these
expenses. However, these percentages do not reflect the Annual Contract
Maintenance Fee and the sales charge or premium taxes (if any), which if
included would reduce the percentages reported by C.M. Life.
Annualized Accumulation Unit Value Return
-----------------------------------------
For Periods Ending 12/31/97
---------------------------
<TABLE>
<CAPTION>
Since
Portfolio (Inception) 1 Year 3 Years 5 Years 10 Years Inception
- --------------------- ------ ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C>
Growth (1/21/82) 24.94% 26.01% 18.79% 17.31% 16.99%
Total Return (9/30/82) 17.46% 16.25% 11.97% 12.51% 12.63%
Oppenheimer Bond (4/3/85) 8.02% 8.99% 7.00% 8.26% 8.03%
Government Securities (5/12/92) 7.59% 8.31% 5.56% N/A 6.04%
Oppenheimer Money (4/3/85)* 4.13% 4.19% 3.51% 4.58% 4.00%
International (5/13/92) 6.88% 9.35% 9.50% N/A 7.42%
</TABLE>
*Although the Oppenheimer Money Fund commenced operations on 4/3/85, the
information necessary to calculate returns is available only for 1987 and later
years.
The NON-STANDARDIZED ANNUAL TOTAL RETURN for a Sub-Account is the effective
annual rate of return that would have produced the ending Accumulated Value of
the stated one-year period.
The NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN for a Sub-Account is the
effective annual compounded rate of return that would have produced the ending
Accumulated Value over the stated period had the performance remained constant
throughout.
Note: The NON-STANDARDIZED ANNUAL TOTAL RETURN will be less than the
NON-STANDARDIZED ANNUALIZED RETURN on Accumulation Unit values for the same
period due to the effect of the Annual Contract Maintenance Fee. Additionally,
the magnitude of this difference will depend on the size of the Accumulated
Value from which the annual Administrative Charge is deducted.
The performance figures discussed above reflect historical results of the Funds
and are not intended to indicate or to predict future performance.
7
<PAGE>
Performance information for the Sub-Accounts may be: (a) compared to other
variable annuity separate accounts or other investment products surveyed by
Lipper Analytical Services, a nationally recognized independent reporting
service or similar services that rank mutual funds and other investment
companies by overall performance, investment objectives and assets; (b) tracked
by other ratings services, companies, publications or persons who rank separate
accounts or other investment products on overall performance or other criteria;
and (c) included in data bases that can be used to produce reports and
illustrations by organizations such as CDA Wiesenberger. Performance figures
will be calculated in accordance with standardized methods established by each
reporting service.
Yield and Effective Yield
-------------------------
C.M. Life may show yield and effective yield figures for the Money Market
Sub-Account. "Yield" refers to the income generated by an investment in the
Money Market Sub-Account over a seven-day period, which is then "annualized."
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The "effective" yield is calculated similarly but,
when annualized, the income earned by an investment in the Money Market
Sub-Account is assumed to be re-invested. Therefore the effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
These figures reflect a deduction for all Fund, Separate Account and Contract
level charges, assuming the Contract remains inforce. The figures do not reflect
the contingent deferred sales charge or premium tax deductions (if any), which
if included would reduce the percentages reported.
The 7-day Yield and Effective Yield for the Money Market Sub-Accounts for the
periods ended December 31, 1997 are as follows:
<TABLE>
<CAPTION>
After Annual Maintenance Charge
Before Annual Maintenance Charge (Annual Maintenance Charge is 0.086%)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
7-Day Yield: 3.35% 7-Yield 3.27%
7-Day Effective Yield: 3.41% 7-Day Effective Yield: 3.32%
</TABLE>
The performance figures discussed above reflect historical results of the Funds
and are not intended to indicate or to predict future performance.
DISTRIBUTION
MML Distributors, LLC ("MML Distributors"), is the principal underwriter of the
Contracts. MML Distributors is a limited liability corporation. MML Investors
Services, Inc. ("MMLISI") serves as co-underwriter of the Contracts. Both MML
Distributors and MMLISI are broker-dealers registered with the Securities and
Exchange Commission and members of the National Association of Securities
Dealers, Inc. MML Distributors and MMLISI are indirect wholly owned subsidiaries
of Massachusetts Mutual Life Insurance Company and affiliates of C.M. Life
Insurance Company.
Pursuant to the Underwriting and Servicing Agreement, both MML Distributors and
MMLISI will receive compensation for their activities as underwriters for the
Separate Account. Compensation paid to MMLISI in 1997 was $39,500. No
compensation was paid to MML Distributors in 1997. Commissions will be paid
through MMLISI and MML Distributors to agents and selling brokers for selling
the Contracts. During 1997 and 1996, commission payments amounted to $4,710,230
and $4,655,336 respectively.
MML Distributors may enter into selling agreements with other broker-dealers
which are registered with the Securities and Exchange Commission and are members
of the National Association of Securities Dealers, Inc. ("selling brokers").
Contracts are sold through agents who are licensed by state insurance officials
to sell the Contracts. These agents are also registered representatives of
selling brokers or of MMLISI.
8
<PAGE>
MML Distributors does business under different variations of its name; including
the name MML Distributors, L.L.C. in the states of Illinois, Michigan, Oklahoma,
South Dakota, and Washington, and the MML Distributors, Limited Liability
Company in the states of Maine, Ohio, and West Virginia.
The offering is on a continuous bases.
PURCHASE OF SECURITIES BEING OFFERED
Interests in the Separate Account are sold to contractholders as accumulation
units. Charges associated with such securities are discussed in the Contract
Charges section of the prospectus.
FEDERAL TAX MATTERS
The Panorama Plus Annuity is designed for use by individuals in retirement plans
which may or may not be plans qualified for special tax treatment under Sections
401, 403, 408 or 457 of the Internal Revenue Code of 1986, as amended (the
"Code"). The ultimate effect of federal income taxes on the Contract Balance, on
Annuity Income payments, and on the economic benefit to the Contract Owner, the
Annuitant or the Beneficiary depends on the type of retirement plan for which
the contract is purchased, on the tax and employment status of the individual
concerned and on C.M. Life's tax status. THE FOLLOWING DISCUSSION IS GENERAL AND
IS NOT INTENDED AS TAX ADVICE. Any person concerned about these tax implications
should consult a competent tax adviser. This discussion is based upon C.M.
Life's understanding of the present federal income tax laws as they are
currently interpreted by the Internal Revenue Service. No representation is made
as to the likelihood of continuation of these present federal income tax laws or
of the current interpretations by the Internal Revenue Service. Moreover, no
attempt has been made to consider any applicable state or other tax laws.
TAX STATUS OF C.M. LIFE
Under existing federal law, no taxes are payable by C.M. Life on investment
income and realized capital gains of the Separate Account credited to the
Contracts. Accordingly, C.M. Life does not intend to make any charge to the
Separate Accounts to provide for company income taxes. C.M. Life may, however,
make such a charge in the future if an unanticipated construction of current law
or a change in law results in a company tax liability attributable to the
Separate Account.
C.M. Life may incur state and local taxes (in addition to premium taxes) in
several states. At present, these taxes are not significant. If they increase,
however, charges for such taxes attributable to the Separate Account may be
made.
TAX STATUS OF THE CONTRACTS
Section 817(h) of the Code requires that with respect to Non-Qualified
Contracts, the investments of the Portfolios of the Fund be "adequately
diversified" in accordance with U.S. Treasury regulations in order for the
Contracts to qualify as annuity contracts under federal tax law. The Separate
Account, through the Fund, intends to comply with the diversification
requirements prescribed by the U.S. Treasury in Reg. Sec. 1.817-5, which affect
how the assets of the Fund may be invested.
In certain circumstances, owners of variable annuity contracts may be considered
the owners, for federal income tax purposes, of the assets of the separate
accounts used to support their contracts. In those circumstances, income and
gains from the separate account assets would be includible in the variable
contract owner's gross income. The IRS has stated in published rulings that a
variable contract owner will be considered the owner of separate account assets
if the contract owner possesses incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has also announced, in connection with the issuance of regulations
concerning diversification, that those regulations "do not provide guidance
concerning the circumstances in which investor control for the investments of a
segregated asset account may cause the investor [I.E., the Contract Owner],
rather than the insurance company, to be treated as the owner of the assets in
the account." This announcement also stated
9
<PAGE>
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
without being treated as owners of the underlying assets."
The ownership rights under the Contract are similar to, but also different in
certain respects from, those described by the IRS in rulings in which it was
determined that contract owners were not owners of separate account assets. For
example, a Contract Owner has additional flexibility in allocating premium
payments and account values. These differences could result in a Contract Owner
being treated as the owner of a pro rata portion of the assets of the Variable
Account. In addition, C.M. Life does not know what standards will be set forth,
if any, in the regulations or rulings which the Treasury Department may issue.
C.M. Life therefore reserves the right to modify the Contract as necessary to
attempt to prevent a Contract Owner from being considered the owner of a pro
rata share of the assets of the Separate Account.
In order to be treated as an annuity contract for federal income tax purposes,
section 72(s) of the Code requires any Non-qualified Contract to provide that
(a) if any Contract Owner dies on or after the Annuity Income Date but prior to
the time the entire interest in the Contract has been distributed, the remaining
portion of such interest will be distributed at least as rapidly as under the
method of distribution being used as of the date of that Contract Owner's death;
and (b) if any Contract Owner dies prior to the Annuity Income Date, the entire
interest in the Contract will be distributed within five years after the date of
the Contract Owner's death. These requirements will be considered satisfied as
to any portion of the Contract Owner's interest which is payable to or for the
benefit of a "designated beneficiary" and which is distributed over the life of
such "designated beneficiary" or over a period not extending beyond the life
expectancy of that beneficiary, provided that such distributions begin within
one year of that owner's death. The Contract Owner's "designated beneficiary" is
the person designated by such Contract Owner as a beneficiary and to whom
ownership of the Contract passes by reason of death and must be a natural
person. However, if the Contract Owner's "designated beneficiary" is the
surviving spouse of the Contract Owner, the Contract may be continued with the
surviving spouse as the new owner.
The Non-qualified Contracts contain provisions which are intended to comply with
the requirements of section 72(s) of the Code, although no regulations
interpreting these requirements have yet been issued. The Company intends to
review such provisions and modify them if necessary to assure that they comply
with the requirements of Code section 72(s) when clarified by regulation or
otherwise. Other rules may apply to Qualified Contracts.
OTHER INFORMATION
Registration Statements have been filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, with respect to the
Contracts discussed in this Statement of Additional Information. Not all of the
information set forth in the Registration Statements, amendments and exhibits
thereto has been included in the Prospectus for the Contracts or this Statement
of Additional Information. Statements contained in the Prospectus and this
Statement of Additional Information concerning the content of the Contracts and
other legal instruments are intended to be summaries. For a complete statement
of the terms of these documents, reference should be made to the instruments
filed with the Securities and Exchange Commission.
10
<PAGE>
Report Of Independent Accountants
To the Contract Owners of Panorama Plus Separate Account and The Board of
Directors of C.M. Life Insurance Company
We have audited the statements of assets and liabilities of the Panorama Total
Return Sub-Account, Panorama Growth Sub-Account, Panorama Government Securities
Sub-Account, Panorama International Equity Sub-Account, Oppenheimer (formerly
Panorama) Money Market Sub-Account, and Oppenheimer (formerly Panorama) Income
Sub-Account (the "Sub-Accounts") of the Panorama Plus Separate Account as of
December 31, 1997, the related statements of operations for the year then
ended and the statements of changes in net assets for each of the two years in
the period then ended. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
verification of securities owned as of December 31, 1997, by confirmation with
Panorama Series Fund, Inc. and Oppenheimer Variable Account Funds. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the Sub-Accounts of the
Panorama Plus Separate Account as of December 31, 1997, the results of their
operations for the year then ended and the changes in net assets for each of
the two years in the period then ended, in conformity with generally accepted
accounting principles.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
March 11, 1998
F-1
<PAGE>
Panorama Plus Separate Account
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at Market (Notes 3A and 3B):
Panorama Total Return Sub-Account
209,083,468 shares (Cost $359,819,168) $ 418,171,414
Panorama Growth Sub-Account
93,798,911 shares (Cost $245,615,959) 323,612,799
Panorama Government Securities Sub-Account
14,635,988 shares (Cost $15,355,455) 16,245,945
Panorama International Equity Sub-Account
48,581,105 shares (Cost $57,954,335) 66,070,753
----------------
824,100,911
----------------
Oppenheimer Money Market Sub-Account
14,416,892 shares (Cost $14,416,892) 14,416,892
Oppenheimer Income Sub-Account
2,561,196 shares (Cost $32,916,657) 30,504,481
----------------
44,921,373
----------------
Total investments 869,022,284
----------------
Dividends receivable 27,840
----------------
Total assets 869,050,124
----------------
LIABILITIES:
Due to C.M. Life Insurance Company 9,964
----------------
NET ASSETS $ 869,040,160
================
</TABLE>
<TABLE>
<CAPTION>
Net assets consisted of: Units Unit Value Net Assets
----- ---------- ----------
<S> <C> <C> <C>
Panorama Total Return Sub-Account 224,379,585 $1.863659 $ 418,167,033
Panorama Growth Sub-Account 128,553,850 2.517282 323,606,292
Panorama Government Securities Sub-Account 11,672,397 1.391852 16,246,250
Panorama International Equity Sub-Account 44,128,995 1.497222 66,070,903
Oppenheimer Money Market Sub-Account 12,091,336 1.194713 14,445,676
Oppenheimer Income Sub-Account 21,424,948 1.423761 30,504,006
----------------
$ 869,040,160
================
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
Panorama Plus Separate Account
STATEMENT OF OPERATIONS
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
Panorama Panorama
Panorama Panorama Government International Oppenheimer Oppenheimer
Total Return Growth Securities Equity Money Market Income
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $43,186,809 $20,386,363 $ 1,025,390 $ 1,406,064 $ 775,455 $ 1,881,895
Expenses
Mortality and expense risk fees (Note 4) 4,451,906 3,200,467 182,076 717,382 170,812 333,367
----------- ----------- ----------- ----------- ----------- -----------
Net investment income(Note 3C) 38,734,903 17,185,896 843,314 688,682 604,643 1,548,528
----------- ----------- ----------- ----------- ----------- -----------
Net realized and unrealized gain
on investments
Net realized gain (loss) on investments
(Notes 3B, 3C and 6) 5,179,750 8,764,220 264,249 1,281,403 -- (139,043)
Change in net unrealized
appreciation/depreciation
of investments 18,447,840 34,459,860 59,626 2,122,434 -- 859,084
----------- ----------- ----------- ----------- ----------- -----------
Net gain on investments 23,627,590 43,224,080 323,875 3,403,837 -- 720,041
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations $62,362,493 $60,409,976 $ 1,167,189 $ 4,092,519 $ 604,643 $ 2,268,569
=========== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
Panorama Plus Separate Account
STATEMENT OF CHANGES IN NET ASSETS
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
Panorama
Panorama Panorama Government
Total Return Growth Securities
Sub-Account Sub-Account Sub-Account
------------- ------------- -------------
<S> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income $ 38,734,903 $ 17,185,896 $ 843,314
Net realized gain (loss) on investments 5,179,750 8,764,220 264,249
Change in net unrealized
appreciation/depreciation
of investments 18,447,840 34,459,860 59,626
------------- ------------- -------------
Net increase in net assets
resulting from operations 62,362,493 60,409,976 1,167,189
------------- ------------- -------------
Capital transactions:
Net contract payments 27,867,462 31,596,957 927,700
Withdrawal of funds (19,860,273) (11,972,272) (1,395,063)
Reimbursement (payment) of
accumulation unit value fluctuation 13,955 103,136 (1,516)
Transfers between sub-accounts and
the General Account (8,787,789) 18,112,938 (813,749)
------------- ------------- -------------
Net increase (decrease) in net assets
resulting from capital transactions (766,645) 37,840,759 (1,282,628)
------------- ------------- -------------
Total increase (decrease) 61,595,848 98,250,735 (115,439)
NET ASSETS, at beginning of the year 356,571,185 225,355,557 16,361,689
------------- ------------- -------------
NET ASSETS, at end of the year $ 418,167,033 $ 323,606,292 $ 16,246,250
============= ============= =============
<CAPTION>
Panorama
International Oppenheimer Oppenheimer
Equity Money Market Income
Sub-Account Sub-Account Sub-Account
------------- ------------- -------------
<S> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income $ 688,682 $ 604,643 $ 1,548,528
Net realized gain (loss) on investments 1,281,403 -- (139,043)
Change in net unrealized
appreciation/depreciation
of investments 2,122,434 -- 859,084
------------- ------------- -------------
Net increase in net assets
resulting from operations 4,092,519 604,643 2,268,569
------------- ------------- -------------
Capital transactions:
Net contract payments 6,477,310 4,334,561 2,446,088
Withdrawal of funds (3,045,511) (2,226,289) (1,769,344)
Reimbursement (payment) of
accumulation unit value fluctuation (4,665) (3,986) 195
Transfers between sub-accounts and
the General Account 1,806,665 (3,760,136) (1,693,532)
------------- ------------- -------------
Net increase (decrease) in net assets
resulting from capital transactions 5,233,799 (1,655,850) (1,016,593)
------------- ------------- -------------
Total increase (decrease) 9,326,318 (1,051,207) 1,251,976
NET ASSETS, at beginning of the year 56,744,585 15,496,883 29,252,030
------------- ------------- -------------
NET ASSETS, at end of the year $ 66,070,903 $ 14,445,676 $ 30,504,006
============= ============= =============
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
Panorama Plus Separate Account
STATEMENT OF CHANGES IN NET ASSETS
For The Year Ended December 31, 1996
<TABLE>
<CAPTION>
Sub-Accounts
------------------------------------------------------------------
Government International
Total Return Growth Securities Equity
--------------- -------------- -------------- ---------------
Panorama Panorama
Panorama Panorama Government International
Total Return Growth Securities Equity
--------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss) $ (880,021) $ (483,836) $ (187,679) $ (90,265)
Net realized gain (loss)
on investments 912,928 3,473,349 (118,069) 449,754
Change in net unrealized appreciation/
depreciation of investments 27,563,072 28,025,240 429,597 5,038,678
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations 27,595,979 31,014,753 123,649 5,398,167
------------- ------------- ------------- -------------
Capital transactions:
Net contract payments 58,289,165 43,547,484 2,353,505 9,650,871
Withdrawal of funds (15,286,758) (6,911,580) (1,493,004) (2,171,308)
Transfers between sub-accounts and
the General Account 1,625,115 15,025,257 (2,216,775) 4,652,684
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from capital transactions 44,627,522 51,661,161 (1,356,274) 12,132,247
------------- ------------- ------------- -------------
Total increase (decrease) 72,223,501 82,675,914 (1,232,425) 17,530,414
NET ASSETS, at beginning of the year 284,347,684 142,679,643 17,594,114 39,214,171
------------- ------------- ------------- -------------
NET ASSETS, at end of the year 356,571,185 225,355,557 16,361,689 56,744,585
============= ============= ============= =============
<CAPTION>
Sub-Accounts
--------------------------------------------------------------------
Money Market Income
--------------------------------- --------------------------------
Panorama Oppenheimer Panorama Oppenheimer
Money Market/(1)/ Money/(2)/ Income/(3)/ Bond/(4)/
----------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss) $ 645,313 $ 47,492 $ 3,660,929 $ 444,994
Net realized gain (loss)
on investments -- -- (3,362,435) 73,809
Change in net unrealized appreciation/
depreciation of investments -- -- 218,297 (734,953)
---------------- -------------- -------------- ---------------
Net increase (decrease) in net assets
resulting from operations 645,313 47,492 516,791 (216,150)
---------------- -------------- -------------- ---------------
Capital transactions:
Net contract payments 10,034,439 412,644 6,566,750 219,153
Withdrawal of funds (981,045) (64,032) (1,443,217) (360,211)
Transfers between sub-accounts and
the General Account (28,353,311) 15,100,779 (32,577,949) 29,609,238
---------------- -------------- -------------- ---------------
Net increase (decrease) in net assets
resulting from capital transactions (19,299,917) 15,449,391 (27,454,416) 29,468,180
---------------- -------------- -------------- ---------------
Total increase (decrease) (18,654,604) 15,496,883 (26,937,625) 29,252,030
NET ASSETS, at beginning of the year 18,654,604 -- 26,937,625 --
---------------- -------------- -------------- ---------------
NET ASSETS, at end of the year -- 15,496,883 -- 29,252,030
================ ============== ============== ===============
</TABLE>
/(1)/ For the period 1/1/96-12/1/96, the Money Market Sub-Account invested in
shares of the Panorama Series Money Market Portfolio which has since been
liquidated.
/(2)/ For the period 12/2/96-12/31/96, the Money Market Sub-Account invested in
shares of the Oppenheimer Money Fund.
/(3)/ For the period 1/1/96-12/1/96, the Income Sub-Account invested in shares
of the Panorama Series Income Portfolio which has since been liquidated.
/(4)/ For the period 12/2/96-12/31/96, the Income Sub-Account invested in shares
of the Oppenheimer Bond Fund.
See Notes to Financial Statements.
F-5
<PAGE>
Panorama Plus Separate Account
Notes To Financial Statements
1. HISTORY
Panorama Plus Separate Account (the "Separate Account") was established as a
separate investment account of C.M. Life Insurance Company ("C.M. Life").
C.M. Life was formerly a wholly-owned stock life insurance subsidiary of
Connecticut Mutual Life Insurance Company ("CML"). On February 29, 1996, CML
merged with and into Massachusetts Mutual Life Insurance Company
("MassMutual"). Upon the merger, CML's existence ceased and MassMutual
became the surviving company under the name Massachusetts Mutual Life
Insurance Company. C.M. Life became a wholly-owned subsidiary of MassMutual.
The Separate Account operates as a registered unit investment trust pursuant
to the Investment Company Act of 1940 ("the 1940 Act") and the rules
promulgated thereunder.
2. INVESTMENT OF THE SEPARATE ACCOUNT'S ASSETS
The Separate Account maintains six Sub-Accounts. Each Sub-Account invests in
shares of certain investment portfolios of two investment companies: the
Panorama Series Fund, Inc. ("Panorama Fund") (prior to May 1, 1996 named
Connecticut Mutual Financial Services Series Fund I, Inc.), and the
Oppenheimer Variable Account Funds ("Oppenheimer Trust"). Panorama Fund is a
registered, open-end, diversified management investment company with four of
its portfolios currently available to Panorama Plus contract owners: Total
Return, Growth, Government Securities and International Equity. Oppenheimer
Trust is a registered, open-end, diversified management investment company
with two of its funds currently available to Panorama Plus contract owners:
Oppenheimer Money and Oppenheimer Bond. OppenheimerFunds, Inc., a controlled
subsidiary of MassMutual, serves as investment adviser to the Panorama Fund
and Oppenheimer Trust.
In addition to the six Sub-Accounts of the Separate Account, a contract
owner may also allocate funds to C.M. Life's General Account. Interests in
the General Account are registered under the Securities Act of 1933, as
amended, but the General Account in not registered under the 1940 Act.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Separate Account in preparation of the financial
statements in conformity with generally accepted accounting principles.
A. Investment Valuation
Investments in Panorama Fund and Oppenheimer Trust are each stated at market
value which is the net asset value per share of each of the respective
underlying portfolios.
B. Accounting for Investments
Investment transactions are accounted for on the trade date and identified
cost is the basis followed in determining the cost of investments sold for
financial statement purposes. Dividend income is recorded on the ex-dividend
date.
C. Federal Income Taxes
Operations of the Separate Account form a part of the total operations of
C.M. Life, and the Separate Account is not taxed separately. C.M. Life is
taxed as a life insurance company under the provisions of the 1986 Internal
Revenue Code, as amended. The Separate Account will not be taxed as a
"regulated investment company" under Subchapter M of the Internal Revenue
Code. Under existing federal law, no taxes are payable on investment income
and realized capital gains attributable to contracts which depend on the
Separate Account's investment performance. Accordingly, no provision for
federal income tax has been made. C.M. Life may, however, make such a charge
in the future if an unanticipated change of current law results in a company
tax liability attributable to the Separate Account.
F-6
<PAGE>
Notes To Financial Statements (Continued)
D. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
4. CHARGES
There are no deductions for sales charges made from contract payments at the
time of purchase. C.M. Life may pay premium taxes in connection with
purchase payments under the Contracts. Depending upon applicable state law,
C.M. Life will deduct any premium taxes from purchase payments, upon
surrender or on the Annuity Income Date. Premium taxes currently range from
0% to 4.28% of purchase payments.
There is also an annual contract maintenance fee (currently $30 per
Contract), imposed each year for contract maintenance and related
administrative expenses.
For assuming mortality and expense risks, C.M. Life deducts a charge equal,
on an annual basis, to 1.07% of the daily net asset value of the Separate
Account's assets. C.M. Life also deducts an administrative charge equal, on
an annual basis, to .07% of the daily net assets of each of the Sub-Accounts
of the Separate Account. These charges cover expenses in connection with the
administration of the Separate Account and the contracts.
5. DISTRIBUTION AGREEMENTS
MML Distributors, LLC ("MML Distributors"), a wholly-owned subsidiary of
MassMutual, serves as principal underwriter of the contracts pursuant to an
underwriting and servicing agreement among MML Distributors, C.M. Life and
Panorama Plus Separate Account (prior to May 1, 1996, MML Distributors was
known as Connecticut Mutual Financial Services, LLC). MML Distributors is
registered with the Securities and Exchange Commission (the "SEC") as a
broker-dealer under the Securities Exchange Act of 1934 and is a member of
the National Association of Securities Dealers, Inc. (the "NASD"). MML
Distributors may enter into selling agreements with other broker-dealers who
are registered with the SEC and are members of the NASD in order to sell the
contracts.
Effective March 1, 1996, MML Investors Services, Inc. ("MMLISI") serves as
co-underwriter of the contracts pursuant to underwriting and servicing
agreements among MMLISI, C.M. Life and Panorama Plus Separate Account.
MMLISI is registered with the SEC as a broker dealer under the Securities
Exchange Act of 1934 and is a member of the NASD. Registered representatives
of MMLISI sell the contracts as authorized variable life insurance agents
under applicable state insurance laws.
Pursuant to underwriting and servicing agreements, commissions or other fees
due to registered representatives for selling and servicing the contracts
are paid by C.M. Life on behalf of MML Distributors or MMLISI. MML
Distributors and MMLISI also receive compensation for their actions as
underwriters of the contracts.
6. PURCHASES AND SALES OF INVESTMENTS
<TABLE>
<CAPTION>
Panorama Panorama
Panorama Panorama Government International Oppenheimer Oppenheimer
For The Year Ended Total Return Growth Securities Equity Money Market Income
December 31, 1997 Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
- ----------------- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Cost of purchases $ 85,554,515 $ 80,849,916 $ 4,084,400 $ 13,682,854 $ 15,158,981 $ 7,007,847
Proceeds from sales $ 47,516,168 $ 25,673,983 $ 4,527,376 $ 7,756,594 $ 16,191,291 $ 6,474,260
</TABLE>
F-7
<PAGE>
Notes To Financial Statements (Continued)
7. NET INCREASE (DECREASE) IN ACCUMULATION UNITS
<TABLE>
<CAPTION>
Panorama
Panorama Panorama Government
For The Year Ended Total Return Growth Securities
December 31, 1997 Sub-Account Sub-Account Sub-Account
- ------------------ ------------- ------------- -------------
<S> <C> <C> <C>
Units purchased $ 16,378,019 $ 14,130,615 $ 733,847
Units withdrawn (11,576,893) (5,433,187) (1,081,277)
Units transferred between sub-accounts
and the General Account (5,155,765) 8,009,888 (627,984)
------------- ------------- -------------
Net increase (decrease) $ (354,639) $ 16,707,316 $ (975,414)
Units, at beginning of the year 224,734,224 111,846,534 12,647,811
------------- ------------- -------------
Units, at end of the year $ 224,379,585 $ 128,553,850 $ 11,672,397
============= ============= =============
<CAPTION>
Panorama
International Oppenheimer Oppenheimer
For The Year Ended Equity Money Market Income
December 31, 1997 Sub-Account Sub-Account Sub-Account
- ------------------ ------------- ------------- -------------
<S> <C> <C> <C>
Units purchased $ 4,497,931 $ 3,926,075 $ 1,858,460
Units withdrawn (2,125,968) (2,112,329) (1,344,284)
Units transferred between sub-accounts
and the General Account 1,249,374 (3,229,532) (1,281,767)
------------- ------------- -------------
Net increase (decrease) $ 3,621,337 $ (1,415,786) $ (767,591)
Units, at beginning of the year 40,507,658 13,507,122 22,192,539
------------- ------------- -------------
Units, at end of the year $ 44,128,995 $ 12,091,336 $ 21,424,948
============= ============= =============
</TABLE>
F-8
<PAGE>
Report Of Independent Accountants
To the Board of Directors and Policyholders
of C.M. Life Insurance Company
We have audited the accompanying statutory statements of financial position of
C.M. Life Insurance Company as of December 31, 1997 and 1996, and the related
statutory statements of income, changes in capital stock and surplus, and cash
flows for the years then ended. 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. The statutory
financial statements of C.M. Life Insurance Company for the year ended December
31, 1995 were audited by other auditors whose report, dated February 15, 1996,
expressed an adverse opinion on those statements as to fair presentation in
conformity with generally accepted accounting principles and expressed an
unqualified opinion in conformity with accounting practices prescribed or
permitted by the Insurance Department of the State of Connecticut.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described more fully in Note 1, these financial statements were prepared in
conformity with statutory accounting practices of the National Association of
Insurance Commissioners and the accounting practices prescribed or permitted by
the Department of Insurance of the State of Connecticut ("statutory accounting
principles"), which practices differ from generally accepted accounting
principles. The effects on the financial statements of the variances between the
statutory basis of accounting and generally accepted accounting principles,
although not reasonably determinable at this time, are presumed to be material.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the financial position
of C.M. Life Insurance Company at December 31, 1997 and 1996, or the results of
its operations or its cash flows for the years then ended.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of C.M. Life Insurance Company at
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended, on the statutory basis of accounting described in Note
1.
COOPERS & LYBRAND, L.L.P.
Springfield, Massachusetts
February 6, 1998
28
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION
December 31,
1997 1996
---- ----
(in Millions)
Assets:
Bonds ...................................... $ 664.5 $ 736.5
Common stocks .............................. 61.4 55.6
Mortgage loans ............................. 101.6 33.8
Other investments .......................... 2.2 -
Policy loans ............................... 142.5 132.9
Cash and short-term investments ............ 88.4 63.7
-------- --------
1,060.6 1,022.5
Investment and insurance amounts
receivable ............................... 30.1 32.9
Federal income tax receivable .............. - 7.1
Transfer due from separate account ......... 32.0 24.3
-------- --------
1,122.7 1,086.8
Separate account assets .................... 1,096.5 779.8
-------- --------
$2,219.2 $1,866.6
======== ========
See Notes to Statutory Financial Statements.
29
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION (continued)
<TABLE>
<CAPTION>
December 31,
1997 1996
---- ----
($ In Millions Except for Par Value
and Share Amounts
<S> <C> <C>
Liabilities:
Policyholders' reserves and funds .............. $ 951.0 $ 907.5
Policyholders' claims and other benefits ....... 4.5 3.8
Payable to parent .............................. 13.6 9.6
Federal income taxes payable ................... 6.1 -
Asset valuation reserve ........................ 22.7 18.5
Investment reserves ............................ 3.9 3.3
Other liabilities .............................. 7.7 34.3
-------- --------
1,009.5 977.0
Separate account reserves and liabilities ...... 1,096.5 779.8
-------- --------
2,106.0 1,756.8
-------- --------
Capital stock and surplus:
Common stock, $200 par value
50,000 shares authorized
12,500 shares issued and outstanding ........ 2.5 2.5
Paid-in and contributed surplus ................ 43.8 43.8
Surplus ........................................ 66.9 63.5
-------- --------
113.2 109.8
-------- --------
$2,219.2 $1,866.6
======== ========
</TABLE>
See Notes to Statutory Financial Statements.
30
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF INCOME
Years ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
Revenue:
Premium Income ............................ $331.3 $314.4 $260.8
Net investment and other income ........... 72.1 76.4 84.4
------ ------ ------
403.4 390.8 345.2
------ ------ ------
Benefits and expenses:
Policy benefits and payments .............. 100.4 99.0 58.9
Addition to policyholders' reserves, funds
and separate accounts ................... 190.0 210.3 211.4
Operating expenses ........................ 49.5 45.4 32.1
Commissions ............................... 33.5 25.0 14.1
State taxes, licenses and fees ............ 3.5 3.2 5.0
------ ------ ------
376.9 382.9 321.5
------ ------ ------
Net gain from operations before federal
income taxes ............................ 26.5 7.9 23.7
Federal income taxes ...................... 19.0 6.3 9.4
------ ------ ------
Net gain from operations .................. 7.5 1.6 14.3
Net realized capital gain (loss) .......... 0.1 0.6 (0.5)
------ ------ ------
Net income ................................ $ 7.6 $ 2.2 $ 13.8
====== ====== ======
See Notes to Statutory Financial Statements.
31
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF CHANGES IN CAPITAL STOCK AND SURPLUS
Years Ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
Capital stock and surplus equity,
beginning of year ............................ $109.8 $113.2 $103.8
Increases (decreases) due to:
Net income ................................... 7.6 2.2 13.8
Change in asset valuation and investment
reserves .................................... (4.8) (1.9) (9.2)
Change in non-admitted assets and other ...... (0.2) (2.7) (1.2)
Net unrealized capital gain (loss) ........... 0.8 (1.0) 6.0
------ ------ ------
3.4 (3.4) 9.4
------ ------ ------
Capital stock and surplus equity, end of year.. $113.2 $109.8 $113.2
====== ====== ======
See Notes to Statutory Financial Statements.
32
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF CASH FLOWS
Years Ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
Operating activities:
Net income ....................................... $ 7.6 $ 2.2 $ 13.8
Additions to policyholders' reserves and funds
net of transfers to separate accounts ........... 44.2 41.6 84.2
Net realized capital gain (loss) ................. (0.1) (0.6) 0.5
Other changes .................................... 0.5 (0.8) (0.6)
------ ------ ------
Net cash provided by operating activities ........ 52.2 42.4 97.9
------ ------ ------
Investing activities:
Loans and purchases of investments ............... (438.6) (184.9) (491.9)
Sales and maturites of investments and
receipts from repayment of loans ................ 411.1 191.1 406.0
------ ------ ------
Net cash provided by (used in) investing
activities ........................................ (27.5) 6.2 (85.9)
------ ------ ------
Increase in cash and short-term investments ......... 24.7 48.6 12.0
Cash and short-term investments, beginning of
year ................................................ 63.7 15.1 3.1
------ ------ ------
Cash and short-term investments, end of year ........ $ 88.4 $ 63.7 $ 15.1
====== ====== ======
See Notes to Statutory Financial Statements.
33
<PAGE>
Notes To Statutory Financial Statements
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
C.M. Life Insurance Company (the Company) is a wholly owned stock life insurance
subsidiary of Massachusetts Mutual Life Insurance Company ("MassMutual"). On
March 1, 1996, the operations of the Company's former parent, Connecticut Mutual
Life Insurance Company, were merged into MassMutual. The Company is primarily
engaged in the sale of flexible premium universal life insurance and variable
annuity products distributed through career agents. The Company is licensed to
sell life insurance and annuities in Puerto Rico, the District of Columbia and
all 50 states except New York.
The accompanying statutory financial statements, except as to form, have been
prepared in conformity with the statutory accounting practices of the National
Association of Insurance Commissioners ("NAIC") and the accounting practices
prescribed or permitted by the Insurance Department of the State of Connecticut.
The accompanying statutory financial statements are different in some respects
from GAAP financial statements. The more significant differences are as follows:
(a) acquisition costs, such as commissions and other costs directly related to
acquiring new business, are charged to current operations as incurred, whereas
GAAP would require these expenses to be capitalized and recognized over the life
of the policies; (b) policy reserves are based upon statutory mortality and
interest requirements without consideration of withdrawals, whereas GAAP
reserves would be based upon reasonably conservative estimates of mortality,
morbidity, interest and withdrawals; (c) bonds are generally carried at
amortized cost whereas GAAP generally requires they be valued at fair value; (d)
deferred income taxes are not provided for book-tax timing differences as would
be required by GAAP; and (e) payments received for universal life products and
variable annuities are reported as premium revenue, whereas under GAAP, these
payments would be recorded as deposits to policyholders' account balances.
The NAIC is currently engaged in an extensive project to codify statutory
accounting principles ("Codification") with a goal of providing a comprehensive
guide of statutory accounting principles for use by insurers in all states. This
comprehensive guide, which has not been approved by the NAIC or any state
insurance department includes seventy-two Statements of Statutory Accounting
Principles ("SSAPs") and is expected to be effective no earlier than January 1,
1999. The effect of adopting these SSAPs shall be reported as an adjustment to
surplus on the effective date. Management is currently reviewing the impact of
Codification. However, since the SSAPs have not been finalized, the ultimate
impact cannot be determined at this time.
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, as
well as disclosures of contingent assets and liabilities, at the date of the
financial statements. Management must also make estimates and assumptions that
affect the amounts of revenues and expenses during the reporting period. Future
events, including changes in the levels of mortality, morbidity, interest rates
and asset valuations, could cause actual results to differ from the estimates
used in the financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a description of the Company's principal accounting policies
and practices.
A. Investments
Bonds and stocks are valued in accordance with rules established by the National
Association of Insurance Commissioners. Generally, bonds are valued at amortized
cost, preferred stocks in good standing at cost, and common stocks at fair
value.
Mortgage loans are valued at unpaid principal less unamortized discount.
Policy loans are carried at the outstanding loan balance less amounts unsecured
by the cash surrender value of the policy.
Short-term investments are stated at amortized cost, which approximates fair
value.
In compliance with regulatory requirements, the Company maintains an Asset
Valuation Reserve and an Interest Maintenance Reserve. The Asset Valuation
Reserve and other investment reserves stabilize surplus against fluctuations in
the value of stocks, as well as declines in the value of bonds and mortgage
loans.
Notes To Statutory Financial Statements (Continued)
The Interest Maintenance Reserve captures after-tax realized capital gains and
losses which result from changes in the overall level of
34
<PAGE>
interest rates for all types of fixed income investments, as well as other
financial instruments, including financial futures, U. S. Treasury purchase
commitments, options and interest rate swaps. This reserve is amortized into
income using the grouped method over the remaining life of the investment sold
or over the remaining life of the underlying asset. Net realized after tax
capital gains of $2.0 million in 1997 and $0.4 million in 1996 and net realized
after tax capital losses of $0.9 million in 1995 were transferred to the
Interest Maintenance Reserve. Amortization of the Interest Maintenance Reserve
into net investment income amounted to $0.1 million in 1997, 1996 and 1995. At
December 31, 1997, 1996 and 1995, the Interest Maintenance Reserve consisted of
a net loss deferral which was recorded as a reduction of surplus.
Realized capital gains and losses, less taxes, not includable in the Interest
Maintenance Reserve, are recognized in net income. Realized capital gains and
losses are determined using the specific identification method. Unrealized
capital gains and losses are included in surplus.
B. Separate Accounts
Separate account assets and liabilities represent segregated funds administered
and invested by the Company for the benefit of variable annuity contract
holders. The assets consist principally of marketable securities reported at
fair value. Transfers due from separate account represents the policyholders'
account values in excess of statutory benefit reserves. Premiums, benefits and
expenses of the separate accounts are reported in the Statutory Statement of
Income. Reserves for these life and annuity contracts have been established
using assumed interest rates and valuation methods that will provide reserves at
least as great as those required by law and contract provisions. The Company
receives administrative and investment advisory fees from these accounts.
C. Non-admitted Assets
Assets designated as "non-admitted" (principally prepaid agent commissions,
other prepaid expenses and the Interest Maintenance Reserve, when in a net loss
deferral position) are excluded from the statutory statement of financial
position. These amounted to $5.7 million and $6.6 million as of December 31,
1997 and 1996, respectively and changes therein are charged directly to surplus.
D. Policyholders' Reserves and Funds
Policyholders' reserves for life contracts are developed using accepted
actuarial methods computed principally on the net level premium and the
Commissioners' Reserve Valuation Method bases using the American Experience and
1980 Commissioners' Standard Ordinary mortality tables with assumed interest
rates ranging from 4.0 to 4.5 percent.
Reserves for individual annuities are based on accepted actuarial methods,
principally at interest rates ranging from 5.5 to 9.0 percent. Reserves for
policies and contracts considered investment contracts have a carrying value of
$115.6 million and $113.7 million at December 31, 1997 and 1996, respectively
(fair value of $116.0 million and $113.7 million at December 31, 1997 and 1996,
respectively as determined by discounted cash flow projections).
E. Premium and Related Expense Recognition
Life insurance premium revenue is recognized annually on the anniversary date of
the policy. Annuity premium is recognized when received. Commissions and other
costs related to the issuance of new policies, maintenance and settlement costs
are charged to current operations when incurred.
F. Cash and Short-term Investments
For purposes of the Statutory Statement of Cash Flows, the Company considers all
highly liquid short-term investments purchased with a maturity of twelve months
or less to be cash and short-term investments.
35
<PAGE>
Notes To Statutory Financial Statements (Continued)
3. FEDERAL INCOME TAXES
Provision for federal income taxes is based upon the Company's best estimate of
its tax liability. No deferred tax effect is recognized for temporary
differences that may exist between financial reporting and taxable income.
Accordingly, the reporting of miscellaneous temporary differences, such as
reserves and acquisition costs, resulted in effective tax rates which differ
from the statutory tax rate.
The Internal Revenue Service has completed its examination of the Company's
income tax returns through the year 1991 and is currently examining the Company
for the years 1992 through 1995. The Company believes any adjustments resulting
from such examinations will not materially affect its financial statements.
The Company plans to file a separate company 1997 federal income tax return.
Federal tax payments were $6.8 million in 1997, $17.6 million in 1996 and $10.7
million in 1995.
4. CAPITAL STOCK AND SURPLUS
The Board of Directors of MassMutual has authorized the contribution of funds to
the Company sufficient to meet the capital requirements of all states in which
the Company is licensed to do business. Substantially all of the statutory
capital stock and surplus is subject to dividend restrictions relating to
various state regulations which limit the payment of dividends without prior
approval. Under these regulations, $10.7 million of capital stock and surplus is
available for distribution to the shareholder in 1998 without prior regulatory
approval.
5. RELATED PARTY TRANSACTIONS
MassMutual and the Company have an agreement whereby MassMutual, for a fee, will
furnish the Company, as required, operating facilities, human resources,
computer software development and managerial services. Investment and
administrative services are provided to the Company pursuant to a management
services agreement with MassMutual. Similar arrangements were in place with
Connecticut Mutual Life Insurance Company, the Company's former parent, prior to
its merger with MassMutual. Fees incurred under the terms of these agreements
were $39.7 million, $45.9 million and $34.0 million in 1997, 1996 and 1995,
respectively.
Prior to March 1, 1996, the Company had an underwriting agreement with its
affiliates GR Phelps and MML Distributors. Under this agreement, the affiliates
paid commissions and received the cash flows from variable annuity contract
fees. Effective March 1, 1996, this agreement was cancelled, and the Company
began paying all commissions and retained the right to the related future cash
flows from contract fees.
The Company cedes a portion of its life insurance business to MassMutual and
other insurers in the normal course of business. The Company's retention limit
per individual insured is $4 million; the portion of the risk exceeding the
retention limit is reinsured with other insurers. The Company is contingently
liable with respect to ceded reinsurance in the event any reinsurer is unable to
fulfill its contractual obligations.
The Company has a modified coinsurance quota-share reinsurance agreement with
Mass Mutual whereby the Company cedes 75% of the premiums on certain universal
life policies. In return, MassMutual pays the Company a stipulated expense
allowance, death and surrender benefits, and a modified coinsurance adjustment.
Reserves for payment of future benefits for the ceded policies are retained by
the Company.
The Company also has a stop-loss agreement with MassMutual, with maximum
coverage at $25.0 million, under which the Company cedes claims which, in
aggregate, exceed $35.6 million in 1997, $28.1 million in 1996, and $24.2
million in 1995. For each of the years, the limit was not exceeded. The Company
paid approximately $1.0 million, $0.4 million, and $0.6 million in premiums
under the agreement in 1997, 1996 and 1995, respectively.
36
<PAGE>
Notes To Statutory Financial Statements (Continued)
6. INVESTMENTS
The Company maintains a diversified investment portfolio. Investment policies
limit concentration in any asset class, geographic region, industry group,
economic characteristic, investment quality or individual investment.
A. Bonds
The carrying value and estimated fair value of investments in bonds as of
December 31, 1997 and 1996 are as follows:
December 31, 1997
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
(in Millions)
U. S. Treasury securities
and obligations of U.S.
government corporations
and agencies $ 104.3 $ 2.2 $ 0.2 $ 106.3
Debt securities issued by
foreign governments 4.6 0.0 0.3 4.3
Mortgage-backed securities 38.8 1.0 0.2 39.6
State and local governments 20.0 0.3 - 20.3
Corporate debt securities 471.8 15.6 1.9 485.6
Utilities 25.0 1.1 - 26.1
------- ------ ----- -------
Total $ 664.5 $ 20.2 $ 2.6 $ 682.1
======= ====== ===== =======
December 31, 1996
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
(In Millions)
U. S. Treasury securities
and obligations of U.S.
government corporations
and Agencies $138.8 $ 2.2 $ 1.0 $140.0
Debt securities issued by
foreign governments 3.9 0.1 - 4.0
Mortgage-backed securities 37.4 0.7 0.7 37.4
State and local governments 10.3 0.2 0.1 10.4
Industrial securities 509.2 11.6 3.7 517.1
Utilities 36.9 1.2 0.2 37.9
------ ------ ----- ------
Total $736.5 $ 16.0 $ 5.7 $746.8
====== ====== ===== ======
The carrying value and estimated fair value of bonds at December 31, 1997, by
contractual maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without prepayment penalties.
Estimated
Carrying Fair
Value Value
----- -----
(In Millions)
Due in one year or less $ 34.3 $ 34.3
Due after one year through five years 227.7 232.0
Due after five years through ten years 209.7 217.4
Due after ten years 80.3 83.4
------- ------
552.0 567.1
Mortgage-backed securities, including
securities guaranteed by the U.S.
Government 112.5 115.0
------- ------
Total $ 664.5 $682.1
======= ======
37
<PAGE>
Notes To Statutory Financial Statements (Continued)
Proceeds from sales of investments in bonds were $388.8 million during 1997,
$162.9 million during 1996, and $380.6 million during 1995. Gross capital gains
of $3.8 million in 1997, $1.6 million in 1996, and $3.6 million in 1995 and
gross capital losses of $0.5 million in 1997, $0.9 million in 1996, and $4.7
million in 1995 were realized on those sales, portions of which were included in
the Interest Maintenance Reserve. Estimated fair value of non-publicly traded
bonds is determined by the Company using a pricing matrix.
B. Stocks
Common stocks had a cost of $50.2 million in 1997 and $47.2 million in 1996.
C. Mortgages
The fair value of mortgage loans, as determined from a pricing matrix for
performing loans and the estimated underlying real estate value for
non-performing loans, approximated carrying value.
The Company had restructured loans with book values of $17.3 million and $21.9
million at December 31, 1997 and 1996, respectively. The loans typically have
been modified to defer a portion of the contracted interest payments to future
periods. Interest deferred to future periods totaled $0.2 million in 1997, 1996
and 1995.
D. Other
The carrying value of investments which were non-income producing for the
preceding twelve months was $0.4 million and $2.8 million at December 31, 1997
and 1996, respectively.
It is not practicable to determine the fair value of policy loans as they do not
have a stated maturity.
7. PORTFOLIO RISK MANAGEMENT
The Company manages its investment risks primarily to reduce interest rate and
duration imbalances determined in asset/liability analyses. The fair values of
these instruments, which are not recorded in the financial statements, are based
upon market prices or prices obtained from brokers. The Company does not hold or
issue these financial instruments for trading purposes.
The notional amounts described do not represent amounts exchanged by the parties
and, thus, are not a measure of the exposure of the Company. The amounts
exchanged are calculated on the basis of the notional amounts and the other
terms of the instruments, which relate to interest rates, exchange rates,
security prices or financial or other indexes.
The Company utilizes interest rate swap agreements and options to reduce
interest rate exposures arising from mismatches between assets and liabilities
and to modify portfolio profiles to manage other risks identified. Under
interest rate swaps, the Company agrees to exchange, at specified intervals, the
difference between fixed and floating interest rates calculated by reference to
an agreed-upon notional principal amount. Net amounts receivable and payable are
accrued as adjustments to interest income and included in investment and
insurance amounts receivable on the Statutory Statement of Financial Position.
Gains and losses realized on the termination of contracts are amortized through
the Interest Maintenance Reserve over the remaining life of the associated
contract. At December 31, 1997 and 1996, the Company had swaps outstanding with
notional amounts of $46.5 million and $13.0 million, respectively. The fair
value of these instruments was $0.2 million at December 31, 1997 and $0.1
million at December 31, 1996.
Options grant the purchaser the right to buy or sell a security or enter into a
derivative transaction at a stated price within a stated period. The Company's
option contracts have terms of up to five years. The amounts paid for options
purchased are included in other investments on the Statutory Statement of
Financial Position. Gains and losses on these contracts are recorded at the
expiration or termination date and are amortized through the Interest
Maintenance Reserve over the remaining life of the option contract. At December
31, 1997 and 1996, the Company had option contracts with notional amounts of
$111.3 million and $34.7 million, respectively. The Company's credit risk
exposure was limited to the unamortized costs of $2.2 million and $0.1 million
which had fair values of $2.3 million and $0.1 million at December 31, 1997 and
1996, respectively.
Notes To Statutory Financial Statements (Continued)
The Company utilizes asset swap agreements to reduce exposures, such as currency
risk and prepayment risk, built into certain assets acquired. Cross-currency
interest rate swaps allow investment in foreign currencies, increasing access to
additional investment
38
<PAGE>
opportunities, while limiting foreign exchange risk. The net cash flows from
asset and currency swaps are recognized as adjustments to the underlying assets'
interest income. Gains and losses realized on the termination of these contracts
adjusts the bases of the underlying asset. Notional amounts relating to asset
and currency swaps totaled $1.0 million at December 31, 1997 and 1996. The fair
values of these instruments were an unrealized gain of $0.1 million and an
unrealized loss of $0.1 million at December 31, 1997 and 1996, respectively.
The Company enters into forward U.S. Treasury commitments for the purpose of
managing interest rate exposure. The Company generally does not take delivery on
forward commitments. These commitments are instead settled with offsetting
transactions. Gains and losses on forward commitments are recorded when the
commitment is closed and amortized through the Interest Maintenance Reserve over
the remaining life of the asset. At December 31, 1997 and 1996, the company had
U. S. Treasury purchase commitments which will settle during the following year
with contractual amounts of $3.0 million and $2.0 million, respectively.
The Company is exposed to credit-related losses in the event of nonperformance
by counterparties to derivative financial instruments. This exposure is limited
to contracts with a positive fair value. The amounts at risk in a net gain
position were $2.6 million and $0.1 million at December 31, 1997 and 1996,
respectively. The Company monitors exposure to ensure counterparties are credit
worthy and concentration of exposure is minimized. Additionally, contingent
collateral positions have been obtained with counterparties when considered
prudent.
8. LIQUIDITY
The withdrawal characteristics of the policyholder's reserves and funds,
including separate accounts, and the invested assets which support them at
December 31, 1997 are illustrated below:
(In Millions)
Total policyholders' reserves and funds and,
separate account liabilities $2,047.5
Not subject to discretionary withdrawal (1.4)
Policy loans (142.5)
--------
Subject to discretionary withdrawal $1,903.6
========
Total invested assets, including separate
investment accounts $2,157.1
Policy loans and other invested assets (295.3)
--------
Marketable investments $1,861.8
========
9. BUSINESS RISKS AND CONTINGENCIES
The Company is subject to insurance guaranty fund laws in the states in which it
does business. These laws assess insurance companies amounts to be used to pay
benefits to policyholders and claimants of insolvent insurance companies. Many
states allow these assessments to be credited against future premium taxes. The
Company believes such assessments in excess of amounts accrued will not
materially affect its financial position, results of operations or liquidity.
The Company elected not to admit $1.3 million and $1.6 million of guaranty fund
premium tax offset receivable relating to prior assessments in 1997 and 1996,
respectively.
The Company is involved in litigation arising in and out of the normal course of
its business. Management intends to defend these actions vigorously. While the
outcome of litigation cannot be forseen with certainty, it is the opinion of
management, after consultation with legal counsel, that the ultimate resolution
of these matters will not materially affect its financial position, results of
operations or liquidity.
10. RECLASSIFICATIONS
Certain 1996 and 1995 amounts have been reclassified to conform with the current
year presentation.
39
<PAGE>
Notes To Statutory Financial Statements (Continued)
11. AFFILIATED COMPANIES
The relationship of the Company, its parent and affiliated companies as of
December 31, 1997 is illustrated below. Subsidiaries are wholly-owned by the
parent, except as noted.
Parent
- ------
Massachusetts Mutual Life Insurance Company
Subsidiaries of Massachusetts Mutual Life Insurance Company
- -----------------------------------------------------------
C.M. Assurance Company
C.M. Benefit Insurance Company
C.M. Life Insurance Company
MassMutual Holding Company
MassMutual Holding Company Two, Inc. (Sold in March 1996)
MassMutual of Ireland, Limited
MML Bay State Life Insurance Company
MML Distributors, LLC
Subsidiaries of MassMutual Holding Company
------------------------------------------
GR Phelps, Inc.
MassMutual Holding Trust I
MassMutual Holding Trust II
MassMutual Holding MSC, Inc.
MassMutual International, Inc.
MassMutual Reinsurance Bermuda (Sold in December 1996)
MML Investor Services, Inc.
State House One (Liquidated in December 1996)
Subsidiaries of MassMutual Holding Trust I
------------------------------------------
Antares Leveraged Capital Corporation - 98.5%
Charter Oak Capital Management, Inc. - 80.0%
Cornerstone Real Estate Advisors, Inc.
DLB Acquisition Corporation - 84.8%
Oppenheimer Acquisition Corporation - 88.55%
Subsidiaries of MassMutual Holding Trust II
-------------------------------------------
CM Advantage, Inc. - (Liquidated in December 1997)
CM International, Inc.
CM Property Management, Inc. - (Liquidated in December 1997)
High Yield Management, Inc.
MMHC Investments, Inc.
MML Realty Management
Urban Properties, Inc.
Westheimer 335 Suites, Inc.
Subsidiaries of MassMutual International
----------------------------------------
MassLife Seguros de Vida (Argentina) S. A.
MassMutual International (Bermuda) Ltd.
Mass Seguros de Vida (Chile) S. A.
MassMutual International (Luxemburg) S. A.
MassMutual Holding MSC, Incorporated
------------------------------------
MassMutual/Carlson CBO N. V. - 100%
MassMutual Corporate Value Limited - 46%
9048 - 5434 Quebec, Inc.
Affiliates of Massachusetts Mutual Life Insurance Company
---------------------------------------------------------
MML Series Investment Fund
MassMutual Institutional Funds
Oppenheimer Value Stock Fund
40
<PAGE>
PART C
OTHER INFORMATION
Item 24 Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Financial Statements Included in Part A
---------------------------------------
Condensed Financial Information
Financial Statements Included in Part B
---------------------------------------
Registrant
----------
Reports of Independent Accountants
Statement of Assets and Liabilities as of December 31, 1997
Statement of Operations for the year ended December 31, 1997
Statement of Changes in Net Assets for the years ended December 31,
1997, and 1996
Notes to Financial Statements
The Depositor
-------------
Reports of Independent Accountants
Statutory Statements of Financial Position as of December 31, 1997 and
1996
Statutory Statements of Income for the Years ended December 31, 1997,
1996 and 1995
Statutory Statements of Changes in Capital Stock and Surplus for the
years ended December 31, 1997, 1996 and 1995
Statutory Statements of Cash Flows for the years ended December 31,
1997, 1996 and 1995
Notes to Statutory Financial Statements
(b) Exhibits:
(1) Copy of Resolution of the Board of Directors of C.M. Life Insurance
Company establishing the Separate Account./1/
(2) Not Applicable.
(3) (a) Form of Distribution Agreement between the Registrant and MML
Distributors LLC./3/
(b) Copy of Underwriting and Servicing Agreement between MML Investors
Services, Inc. and C.M. Life Insurance Company./2/
(4) (a) Form of Individual Contract and Certificates for the Panorama Plus
Annuity./1/
(5) Form of Application for the Panorama Plus Annuity Individual
Contract./1/
(6) (a) Copy of the Articles of Incorporation of C.M. Life Insurance
Company./4/
(b) Copy of the By-Laws of C.M. Life Insurance Company./4/
(7) Not Applicable.
(8) (a) Form of Participation Agreement between Massachusetts Mutual Life
Insurance Company, MML Bay State Life Insurance Company, C.M. Life
Insurance Company, OppenheimerFunds, Inc. and Oppenheimer Variable Account
Funds./5/
1
<PAGE>
(8) (b) Form of Participation Agreement between Massachusetts Mutual Life
Insurance Company, MML Bay State Life Insurance Company, C.M. Life
Insurance Company, OppenheimerFunds, Inc. and Panorama Series Funds,
Inc./5/
(9) Opinion of and Consent of Counsel./1/
(10) (i) Consent of Coopers & Lybrand, L.L.P., Independent
Accountants./1/
(ii) Consent of Arthur Andersen LLP, Independent Public
Accountants./1/
(iii) Report of Arthur Andersen LLP, Independent Public
Accountants./1/
(iv) Copy of the Powers of Attorney/6/
(11) Not Applicable.
(12) Not Applicable.
(13) Form of Schedule of Computation of Performance/1/
(14) Not Applicable.
/1/ Filed herewith.
/2/ Incorporated by reference to Exhibit 1(b) to the registration statement on
Form S-1 for C.M. Life Insurance Company (File No. 333-2347) as filed with
the Securities and Exchange Commission on April 8, 1996.
/3/ Incorporated by reference to Post-Effective Amendment No. 7 to the
registration statement on Form N-4 for the Panorama Plus Separate Account
(File No. 33-45122) as filed with the Securities and Exchange Commission on
April 23, 1997.
/4/ Incorporated by reference to Post Effective Amendment No. 3 to Registration
Statement File No. 33-91072.
/5/ Incorporated by reference to Registration Statement File No. 333-22557,
filed on February 28, 1997.
/6/ Incorporated by reference to Post Effective Amendment No. 4 to Registration
No. 333-2347
2
<PAGE>
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
C.M. LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
NAME AND POSITION PRINCIPAL OCCUPATION(S ) DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Lawrence V. Burkett, Jr., Director Director, President and Chief Executive Officer, C.M. Life, since 1996; Executive
President and Chief Executive Officer Vice President and General Counsel, since 1993. Senior Vice President and Deputy
1295 State Street General Counsel, 1992-1993, MassMutual
Springfield, MA 01111
- ----------------------------------------------------------------------------------------------------------------------------------
John B. Davies, Director Director, C.M. Life, since 1996; Executive Vice President, since 1994, Associate
1295 State Street Executive Vice President, 1994-1994, General Agent, 1982-1993, MassMutual
Springfield, MA 01111
- ----------------------------------------------------------------------------------------------------------------------------------
Stuart H. Reese, Director and Senior Vice Director and Senior Vice President-Investments, C.M. Life, since 1996; Chief
President-Investments Executive Director-Investment Management, since 1997, Senior Vice President, 1993-
1295 State Street 1997. MassMutual; Investment Manager, Aetna Life and Casualty and Affiliates,
Springfield, MA 01111 1979-1993
- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OFFICERS (other than those who are also Directors):
- ----------------------------------------------------------------------------------------------------------------------------------
Paul D. Adornato Senior Vice President-Operations, C.M. Life, since 1996; Senior Vice President,
140 Garden Street MassMutual, since 1986
Hartford, CT 06154
- ----------------------------------------------------------------------------------------------------------------------------------
Anne Melissa Dowling Senior Vice President-Large Corporate Marketing, C.M. Life, since 1996; Senior Vice
140 Garden Street President, MassMutual, since 1996; Chief Investment Officer, Connecticut Mutual
Hartford, CT 06154 Life Insurance Company, 1994-1996; Senior Vice President-International, Travelers
Insurance Co., 1987-1993
- ----------------------------------------------------------------------------------------------------------------------------------
Maureen R. Ford Senior Vice President-Annuity Marketing, C.M. Life, since 1996; Senior Vice
140 Garden Street President, MassMutual, since 1996; Marketing Officer, Connecticut Mutual Life
Hartford, CT 06154 Insurance Company, 1989-1996
- ----------------------------------------------------------------------------------------------------------------------------------
Isadore Jermyn Senior Vice President and Actuary, C.M. Life, since 1996; Senior Vice President and
1295 State Street Actuary, since 1995, Vice President and Actuary, 1980-1995, MassMutual
Springfield, MA 01111
- ----------------------------------------------------------------------------------------------------------------------------------
Edward M. Kline Treasurer, C.M. Life, since 1997; Vice President, since 1989, and Treasurer, since
1295 State Street 1997, MassMutual
Springfield, MA 01111
- ----------------------------------------------------------------------------------------------------------------------------------
Ann F. Lomeli Secretary, C.M. Life, since 1988; Vice President, Secretary and Associate General
1295 State Street Counsel, since 1998, Associate Secretary, 1996-1998. MassMutual; Corporate
Springfield, MA 01111 Secretary and Counsel, Connecticut Mutual Life Insurance Company, 1988-1996
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The assets of the Registrant, under state law, are assets of C.M. Life.
C.M. Life Insurance Company is 100% owned by Massachusetts Mutual Life Insurance
Company.
The Registrant may also be deemed to be under common control with other separate
accounts established by MassMutual and its life insurance subsidiaries, C.M.
Life Insurance Company and MML Bay State Life Insurance Company, which are
registered as unit investment trusts under the Investment Company Act of 1940.
The discussion that follows indicates those entities owned directly or
indirectly by Massachusetts Mutual Life Insurance Company:
LIST OF SUBSIDIARIES AND AFFILIATES
LIST OF SUBSIDIARIES AND AFFILIATES
The following entities are, or may be deemed to be, controlled by MassMutual
through the direct or indirect ownership of such entities' stock.
1. CM Assurance Company, a Connecticut life, accident, disability and health
insurer, all the stock of which is owned by MassMutual.
2. CM Benefit Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
3. C.M. Life Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
4. MML Bay State Life Insurance Company, a Connecticut life and health
insurer, all the stock of which is owned by MassMutual.
5. MML Distributors, LLC, formerly known as Connecticut Mutual Financial
Services, LLC, a registered broker-dealer incorporated as a limited
liability company in Connecticut. MassMutual has a 99% ownership interest
and G.R. Phelps & Co. has a 1% ownership interest herein.
6. MassMutual Holding Company, a Delaware holding company, all the stock of
which is owned by MassMutual.
7. MassMutual of Ireland, Limited., incorporated in the Republic of Ireland,
to operate a group life and health claim office for MassMutual, all of the
stock of which is owned by MassMutual.
8. MML Series Investment Fund, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares of which are
owned by separate accounts of MassMutual and companies controlled by
MassMutual.
9. MassMutual Institutional Funds, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares are owned by
MassMutual.
10. G.R. Phelps & Company, Inc., Connecticut corporation which formerly
operated as a securities broker-dealer, all the stock of which is owned by
MassMutual Holding Company.
11. MML Investors Services, Inc., registered broker-dealer incorporated in
Massachusetts, MassMutual Holding Company owns 86% of the capital stock and
F.R. Phelps & Co., Inc. owns 14% of the capital stock of MML Investors
Services, Inc..
12. MassMutual Holding MSC, Inc., a Massachusetts corporation, which acts as a
holding company for MassMutual positions
1
<PAGE>
in investment entities organized outside the United States.
MassMutual Holding Company owns all the outstanding shares of
MassMutual Holding MSC, Inc.
13. MassMutual Holding Trust I, a Massachusetts business trust, which
acts as a holding company for certain MassMutual investment
subsidiaries. MassMutual Holding Company owns all the outstanding
shares of MassMutual Holding Trust I.
14. MassMutual Holding Trust II, a Massachusetts business trust, which
acts as a holding company for certain MassMutual investment
subsidiaries. MassMutual Holding Company owns all the outstanding
shares of MassMutual Holding Trust II.
15. MassMutual International, Inc., a Delaware corporation that acts as a
holding company of and provides services to international insurance
companies, all of the stock of which is owned by MassMutual Holding
Company.
16. MML Insurance Agency, Inc., a licensed insurance broker incorporated
in Massachusetts, all of the stock of which is owned by MML Investors
Services, Inc.
17. MML Securities Corporation, a "Massachusetts Securities Corporation",
all of the stock of which is owned by MML Investors Services, Inc.
18. DISA Insurance Services Agency of America, Inc. (Alabama), a licensed
insurance broker incorporated in Alabama. MML Insurance Agency, Inc.
owns all the shares of outstanding stock.
19. Diversified Insurance Services Agency of America, Inc. (Hawaii), a
licensed insurance broker incorporated in Hawaii. MML Insurance
Agency, Inc. owns all the shares of outstanding stock.
20. MML Insurance Agency of Mississippi, P.C., a Mississippi professional
corporation that operates as an insurance broker, and is controlled
by MML Insurance Agency, Inc.
21. MML Insurance Agency of Nevada, Inc., a Nevada corporation that
operates as an insurance broker, all of the stock of which is owned
by MML Insurance Agency, Inc.
22. MML Insurance Agency of Ohio, Inc., a subsidiary of MML Insurance
Agency, Inc., is incorporated in the state of Ohio and operates as an
insurance broker. The outstanding capital stock is controlled by MML
Insurance Agency, Inc. through a voting trust agreement.
23. MML Insurance Agency of Texas, Inc., a subsidiary of MML Insurance
Agency, Inc., is incorporated in the state of Texas and operates as
an insurance broker. The outstanding capital stock is controlled by
MML Insurance Agency, Inc. through an irrevocable proxy arrangement.
24. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation which
operated a collateralized bond obligation fund. MassMutual Holding
MSC, Inc. and Carlson Investment Management Co. each owns 99% of the
outstanding shares.
25. MassMutual Corporate Value Limited, a Cayman Islands corporation that
owns approximately 93% of MassMutual Corporate Value Partners
Limited. MassMutual Holding MSC, Inc. owns 46.19% of the outstanding
capital stock of MassMutual Corporate Value Limited.
26. MassMutual Corporate Value Partners Limited, a Cayman Islands
corporation that operates as a high yield bond fund. MassMutual
Corporate Value Limited holds an approximately 93% ownership interest
in this company.
27. 9048-5434 Quebec, Inc., a Quebec corporation, which operates as the
owner of hotel property in Montreal, Quebec, Canada. MassMutual
Holdings MSC, Inc. owns all the shares of 9048-5434 Quebec, Inc.
28. Antares Leveraged Capital Corp., a Delaware corporation that operates
as a finance company. MassMutual Holding Trust I owns approximately
98.7% of the capital stock of Antares.
29. Charter Oak Capital Management, Inc., a Delaware corporation that
operates as an investment manager. MassMutual Holding Trust I owns
80% of the capital stock of Charter Oak.
30. Cornerstone Real Estate Advisers, Inc., a Massachusetts equity real
estate advisory corporation, all the stock of which is owned by
MassMutual Holding Trust I.
2
<PAGE>
31. DLB Acquisition Corporation ("DLB") is a Delaware corporation, which
serves as a holding company for David L. Babson and Company,
Incorporated. MassMutual Holding Trust I owns 83.7% of the
outstanding capital stock of DLB.
32. Oppenheimer Acquisition Corporation ("OAC") is a Delaware
corporation, which serves as a holding company for OppenheimerFunds,
Inc. MassMutual Holding Trust I owns 86% of the capital stock of OAC.
33. David L. Babson and Company, Incorporated, a registered investment
adviser incorporated in Massachusetts, all of the stock of which is
owned by DLB.
34. Babson Securities Corporation, a registered broker-dealer
incorporated in Massachusetts, all of the stock of which is owned by
David L. Babson and Company, Incorporated.
35. Babson-Stewart-Ivory International, a Massachusetts general
partnership, which operates as a registered investment adviser. David
L. Babson and Company Incorporated holds a 50% ownership interest in
the partnership.
36. Potomac Babson Incorporated, a Massachusetts corporation, is a
registered investment adviser. David L. Babson and Company
Incorporated owns 60% of the outstanding shares of Potomac Babson
Incorporated.
37. OppenheimerFunds, Inc., a registered investment adviser incorporated
in Colorado, all of the stock of which is owned by Oppenheimer
Acquisition Corporation
38. Centennial Asset Management Corporation, a Delaware corporation that
serves as the investment adviser and general distributor of the
Centennial Funds. OppenheimerFunds, Inc. owns all the stock of
Centennial Asset Management Corporation.
39. HarbourView Asset Management Corporation, a registered investment
adviser incorporated in New York, all the stock of which is owned by
OppenheimerFunds, Inc.
40. MultiSource Service, Inc., a Colorado corporation that operates as a
clearing broker, 80% of the stock of which is owned by
OppenheimerFunds, Inc.
41. OppenheimerFunds Distributor, Inc., a registered broker-dealer
incorporated in New York, all the stock of which is owned by
OppenheimerFunds, Inc.
42. Oppenheimer Partnership Holdings, Inc., a Delaware holding company,
all the stock of which is owned by OppenheimerFunds, Inc.
43. Oppenheimer Real Asset Management, Inc., a commodity pool operator
incorporated in Delaware, all the stock of which is owned by
OppenheimerFunds, Inc.
44. Shareholder Financial Services, Inc., a transfer agent incorporated
in Colorado, all the stock of which is owned by OppenheimerFunds,
Inc.
45. Shareholder Services, Inc., a transfer agent incorporated in
Colorado, all the stock of which is owned by OppenheimerFunds, Inc.
46. Centennial Capital Corporation, a Delaware corporation that formerly
sponsor a unit investment trust. Centennial Asset Management
Corporation owns all the outstanding shares of Centennial Capital
Corporation.
47. Cornerstone Office Management, LLC, a Delaware limited liability
company that is 50% owned by Cornerstone Real Estate Advisers, Inc.
and 50% owned by MML Realty Management Corporation.
48. Cornerstone Suburban Office Investors, LP, a Delaware limited
partnership, which operates as a real estate operating company.
Cornerstone Office Management, LLC holds a 1% general partnership
interest in this fund and MassMutual holds a 99% limited partnership
interest.
49. CM Advantage, Inc., a Connecticut corporation that acts as a general
partner in real estate limited partnerships. MassMutual Holding Trust
II owns all of the outstanding stock.
3
<PAGE>
50. CM International, Inc., a Delaware corporation that holds a mortgage pool
and issues collateralized bond obligations. MassMutual Holding Trust II
owns all the outstanding stock of CM International, Inc.
51. CM Property Management, Inc., a Connecticut real estate holding company,
all the stock of which is owned by MassMutual Holding Trust II.
52. HYP Management, Inc., a Delaware corporation which is the LLC Manager for
MassMutual High Yield Partners LLC and owns 1.28% of the LLC units of such
entity. MassMutual Holding Trust II owns all the outstanding stock of HYP
Management, Inc.
53. MMHC Investment, Inc., a Delaware corporation which is a passive investor
in MassMutual/Darby CBO LLC, MassMutual High Yield Partners LLC and other
MassMutual investments. MassMutual Holding Trust II owns all the
outstanding stock of MMHC Investment, Inc.
54. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds 5.28%, MMHC
Investment Inc. holds 35.99%, and HYP Management, Inc. hold 1.28% for a
total of 42.55% of the ownership interest in this company.
55. MML Realty Management Corporation, a property manager incorporated in
Massachusetts, all the stock of which is owned by MassMutual Holding Trust
II.
56. 505 Waterford Park Limited Partnership, a Delaware limited partnership,
which holds title to an office building in Minneapolis, Minnesota. MML
Realty Management Corporation holds a 1% general partnership interest in
this partnership and MassMutual holds a 99% limited partnership interest.
57. MassMutual/Darby CBO IM Inc., a Delaware corporation which operates as the
LLC Manager of MassMutual/Darby CBO LLC MMHC Investment, Inc. owns 50% of
the capital stock of this company
58. MassMutual/Darby CBO LLC, a Delaware limited liability company that
operates as a fund investing in high yield debt securities of U.S. and
emerging market issuers. MassMutual holds 1.79%, MMHC Investment holds
44.91% and MassMutual High Yield Partners LLC holds 2.39% of the ownership
interest in this company.
59. Urban Properties, Inc., a Delaware real estate holding and development
company, all the stock of which is owned by MassMutual Holding Trust II.
60. Westheimer 335 Suites, Inc., was incorporated in Delaware to serve as a
general partner of the Westheimer 335 Suites Limited Partnership.
MassMutual Holding Trust II owns all the stock of Westheimer 335 Suites,
Inc.
61. Westheimer 335 Suites Limited Partnership, a Texas limited partnership of
which Westheimer 335 Suites, Inc. is the general partner.
62. MassMutual Internacional (Argentina) S.A., an Argentine corporation, which
operates as a holding company. MassMutual International Inc. owns 99.9% of
the outstanding shares and MassMutual Holding Company owns the remaining
0.1% of the shares.
63. MassMutual Internacional (Chile) S.A. a Chilean corporation, which operates
as a holding company. MassMutual International Inc. owns 99% of the
outstanding shares and MassMutual Holding Company owns the remaining 0.1%
of the shares.
64. MassMutual International (Bermuda) Ltd., a Bermuda life insurance company,
all of the stock of which is owned by MassMutual International Inc.
65. MassMutual International (Luxembourg) S.A. a Luxembourg corporation, which
operates as an insurance company. MassMutual International Inc. owns 99.9%
of the outstanding shares and MassMutual Holding Company owns the remaining
0.1% of the shares.
66. MassLife Seguros de Vida S.A., a life insurance company incorporated in
Argentina. MassMutual International Inc. owns 99.9% of the outstanding
capital stock of MassLife Seguros de Vida S.A.
4
<PAGE>
67. MassMutual Services, S.A., an Argentine corporation, which operates as a
service company. MassMutual Internacional (Argentina) S.A. owns 99.9% of
the outstanding shares and MassMutual International, Inc. own 0.1% of the
shares.
68. Mass Seguros de Vida S.A., a life insurance company incorporated in Chile.
MassMutual Internacional (Chile S.A.) owns 33.5% of the outstanding capital
stock of Mass Seguros de Vida S.A.
69. Origen Inversiones S.A., a Chilean corporation which operates as a holding
company. MassMutual Internacional (Chile) S.A. holds a 33.5% ownership
interest in this corporation.
70. Compania Seguros de Vida Corp, S.A., a Chilean insurance company. Origen
Inversiones S.A. owns 99% of the outstanding shares of this company
71. Oppenheimer Series Fund Inc., a Maryland corporation and a registered
open-end investment company of which MassMutual and its affiliates own a
majority of the outstanding shares issued by the fund.
72. Panorama Series Fund, Inc., a registered open-end investment company
organized as a Maryland corporation. Shares of the fund are sold only to
MassMutual and its affiliates.
73. The DLB Fund Group, an open-end management investment company, advised by
David L. Babson and Company Incorporated. MassMutual owns at least 25% of
each series.
MassMutual acts as the investment adviser to each of the following investment
companies and as such may be deemed to control them.
1. MML Series Investment Fund, a registered open-end Massachusetts business
trust, all of the shares are owned by separate accounts of MassMutual and
companies controlled by MassMutual.
2. MassMutual Corporate Investors, a registered closed-end Massachusetts
business trust.
3. MassMutual Corporate Value Partners, Limited, a Cayman Islands corporation
that operates as a high-yield bond fund. MassMutual Corporate Value Limited
holds an approximately 93% ownership interest in this company.
4. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds 5.28%, MMHC
Investment Inc. holds 35.99%, and HYP Management, Inc. hold 1.28% for a
total of 42.55% of the ownership interest in this company.
5. MassMutual Institutional Funds, a registered open-end Massachusetts
business trust, all of the shares are owned by MassMutual.
6. MassMutual Participation Investors, a registered closed-end Massachusetts
business trust.
7. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation which
operates a collateralized bond obligation fund. MassMutual Holding MSC,
Inc. and Carlson Investment Management Co. each own 50% of the outstanding
shares.
8. MassMutual/Darby CBO, LLC, a Delaware limited liability company that
operates as a fund investing in high yield debt securities of U.S. and
emerging market issuers. MassMutual owns 1.79% , MMHC investment, Inc. owns
44.91% and MassMutual High Yield Partners LLC owns 2.39% of the ownership
interest in this company.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of February 26, 1998, there were 23,162 Contract Owners in the Separate
Account.
5
<PAGE>
ITEM 28. INDEMNIFICATION
The following provisions regarding the Indemnification of Directors and Officers
of the Registrant are applicable:
Connecticut Law. Because all directors and officers of the Registrant shall
- ---------------
serve at the request of its parent corporation, Connecticut Mutual Life
Insurance Company, a Connecticut nonstock corporation, indemnification of the
directors and officers may be provided by Connecticut Mutual Life Insurance
Company. Except where an applicable insurance policy is procured, Connecticut
General Statutes ("C.G.S.") Section 33-454a governs indemnification by a
nonstock corporation of persons who are serving at its request as directors or
officers of a stock corporation. Under C.G.S. Section 33-454a, a nonstock
corporation shall indemnify any director or officer who was or is a party, or
was threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter referred to as "proceeding") by virtue of the fact
that he or the person whose legal representative he is or was serving at the
request of the nonstock corporation as a director or officer of a stock
corporation, against "covered expenditures" if (and only if) his conduct met the
applicable statutory eligibility standard. The types of expenditures which are
covered and the statutory eligibility standard vary according to the type of
proceeding to which the director or officer is or was a party or was threatened
to be made a party.
According to C.G.S. Section 33-454a, in non-derivative proceedings other than
ones brought in connection with an alleged claim based upon the purchase or sale
by a director or officer of securities of stock corporation, which the director
or officer serves or served at the request of the nonstock corporation, the
nonstock corporation shall indemnify a director or officer against judgements,
fines, penalties, amounts paid in settlement and reasonable expenses, including
attorneys' fees, actually incurred by him in connection with the proceeding, or
any appeal therein, if and only if he acted (i) in good faith and (ii) in a
--------------
manner he reasonably believed to be in the best interests of the nonstock
corporation. However, where the proceeding brought is criminal in nature, C.G.S.
Section 33-454a requires that the director of officer must satisfy the
additional condition that he had no reasonable cause to believe that his conduct
was unlawful in order to be indemnified. A director or officer also will be
entitled to indemnification as described above if (i) he is successful on the
merits in the defense of any non-derivative proceeding brought against him or
(ii) a court shall have determined that in view of all the circumstances he is
fairly and reasonably entitled to be indemnified. The decision about whether the
director or officer qualifies for indemnification under C.G.S, Section 33- 454a
may be made (i) in writing by a majority of those members of the board of
directors of the nonstock corporation who were not parties to the proceeding in
question, (ii) in writing by independent legal counsel selected by a consent in
writing signed by a majority of those directors who were not parties to the
proceeding, (iii) in the case of an employee or an agent of the nonstock
corporation who is serving as a director or an officer of a stock corporation at
the request of the nonstock corporation, by the nonstock corporation's general
counsel, or (iv) by the members of the nonstock corporation entitled to vote
thereon. A director or officer also may apply to a court of competent
jurisdiction for indemnification even though he previously applied to the board,
independent legal counsel, the general counsel or the members and his
application for indemnification was rejected.
For the purposes of C.G.S. Section 33-454a, the termination of any proceeding by
judgement, order, settlement, conviction or upon a plea of nolo contendere or
its equivalent shall not create, of itself, a presumption that the director or
officer did not act in good faith or in a manner which that director or officer
did not believe reasonably to be in the best interests of the nonstock
corporation. Likewise, the termination of a criminal act or proceeding shall not
create, of itself, a presumption that the director or officer had reasonable
cause to believe that his conduct was unlawful.
In non derivative proceedings based on the purchase or sale of securities of the
stock corporation, which the director or officer serves or served at the request
of the nonstock corporation, C.G.S. Section 333-454a provides that the nonstock
corporation shall indemnify the director or officer only after a court shall
have determined upon application that, in view of all the circumstance, the
director or officer is fairly and reasonably entitled to be indemnified.
Furthermore, the expenditures for which the director or officer shall be
indemnified shall be only such amount as the court determines to be appropriate.
Pursuant to C.G.S. Section 33-454a, where a director or officer was or is a
party or was threatened to be made a party to a derivative proceeding, the
nonstock corporation shall indemnify him against expenses, including attorneys'
fees, actually and reasonably incurred by him in connection with the proceeding
or any appeal therein, in relation to matters
6
<PAGE>
as to which he is finally adjudged not to have breached his duty to the nonstock
corporation. The nonstock corporation also shall indemnify a director or officer
where the court determined that, in view of all the circumstances, such person
is fairly and reasonably entitled to be indemnified; however, in such a
situation, the individual shall be indemnified only for such amount as the court
determines to be appropriate. Furthermore, the statute provides that the
nonstock corporation shall not indemnify a director or officer for amounts paid
to the nonstock corporation, to a plaintiff or to counsel for a plaintiff in
settling or otherwise disposing of a threatened or pending action, with or
without court approval, or for expenses incurred in defending a threatened
action or a pending action which is settled or otherwise disposed of without
court approval.
C.G.S. Section 33-454a also provides that expenses incurred in defending a
proceeding may be paid by the nonstock corporation in advance of the final
disposition of such proceeding upon authorization of the board or directors of
the nonstock corporation, provided said expenses are indemnifiable under the
statute and the director of officer agrees to repay such amount if he is later
found not entitled to indemnification by the nonstock corporation.
Any provision in the certificate of incorporation, the by-laws, a member or
director resolution, of agreement or otherwise that is inconsistent with C.G.S.
Section 33-454a is invalid; provided, however, that the statute specifically
authorizes a nonstock corporation to procure insurance providing greater
indemnification rights than those set out in C.G.S. Section 33-454a, the premium
cost of which may be shared with the director or officer on such basis as my be
agreed upon.
Indemnification provided by Connecticut Mutual Life Insurance Company to the
directors and officers of the Registrant may also be governed by C.G.S. Section
38-27b, which governs indemnification of persons serving as directors and
officers of a stock corporation at the request of a mutual insurance company.
Under C.G.S. Section 38-27b, the extent of indemnification that may be provided
by a mutual insurance company is more limited than that which may be provided by
a nonstock corporation under C.G.S. Section 33-454a. Unlike a nonstock
corporation, a mutual insurance company may not provide indemnification based
solely on a determination that: (i) the director or officer was successful on
the merits in the proceeding, or (ii) in view of all circumstances, the director
or officer is fairly and reasonably entitled to be indemnified. Furthermore,
unlike a nonstock corporation, a mutual insurance company may not indemnify an
employee or an agent of the mutual company serving at its request as a director
or an officer of a stock corporation based solely on a determination by the
general counsel of the nonstock corporation that the director or officer has met
the applicable standard of behavior entitling him to indemnification.
The Directors and Officers of the Registrant are covered under a Directors and
Officers liability policy written by Sargasso Mutual Insurance Company, Ltd.
naming the Directors and Officers of Connecticut Mutual Life Insurance Company
and its subsidiaries (including the Registrant) as insureds. Such Directors and
Officers are indemnified for loss arising from any claim by reason of any
Wrongful Act in their capacities as Directors or Officers. The term "loss" means
any amount which the Insureds are legally obligated to pay for a claim for
Wrongful Acts. The term "Wrongful Act" means any of alleged breach of duty,
neglect, error, misstatement, misleading statement or omission actually or
allegedly caused, committed or attempted by a Director of Officer while acting
individually or collectively in their capacity as such, claimed against them
solely by reason of their Directors and Officers. The limit of liability under
the policy is $15,000,000 each policy year.
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 provision, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
7
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITER
(a) MML Distributors, LLC, a wholly owned subsidiary of MassMutual acts as
principal underwriter for registered separate accounts of MassMutual,
C.M. Life and MML Bay State.
(b)(1) MML Distributors, LLC is the principal underwriter of the Contracts. The
following people are officers and member representatives of the
principal underwriter.
OFFICERS AND MEMBER REPRESENTATIVES
MML DISTRIBUTORS, LLC
Kenneth M. Rickson Member Representative One Monarch Place
G.R. Phelps & Co., Inc. 1414 Main Street
Springfield, MA 01144-1013
Margaret Sperry Member Representative 1295 State Street
Massachusetts Mutual Springfield, MA 01111-0001
Life Insurance Co.
Kenneth M. Rickson Chief Executive Officer, One Monarch Place
President, and Main OSJ 1414 Main Street
Supervisor Springfield, MA 01144-1013
John E. Forrest Vice President One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Michael L. Kerley Vice President One Monarch Place
Assistant Secretary 1414 Main Street
Springfield, MA 01144-1013
Ronald E. Thomson Vice President One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
James T. Bagley Treasurer 1295 State Street
Springfield, MA 01111
Bruce C. Frisbie Assistant Treasurer 1295 State Street
Springfield, MA 01111-0001
Raymond W. Anderson Assistant Treasurer 140 Garden Street
Hartford, CT 06154
Ann F. Lomeli Secretary 1295 State Street
Springfield, MA 01111-0001
Eileen D. Leo Assistant Secretary One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Marilyn A. Sponzo Chief Legal Officer One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Robert Rosenthal Compliance Officer One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
8
<PAGE>
Melissa Thompson Registration Manager One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Ruth B. Howe Director of Continuing One Monarch Place
Education 1414 Main Street
Springfield, MA 01144-1013
Peter D. Cuozzo Variable Life Supervisor and 140 Garden Street
Hartford OSJ Supervisor Hartford, CT 06154
Maureen Ford Variable Annuity Supervisor 140 Garden Street
Hartford, CT 06154
Anne Melissa Dowling Large Corporate Markets 140 Garden Street
Supervisor Hartford, CT 06154
(b)(2) MML Investors Services, Inc. is the co-underwriter of the Contracts. The
following people are the officers and directors of the co-underwriter.
MML INVESTORS SERVICES, INC.
OFFICERS AND DIRECTORS
OFFICER BUSINESS ADDRESS
- --------------------------------------------------------------------------------
Kenneth M. Rickson One Monarch Place
President 1414 Main Street
Springfield, MA 01144-1013
Michael L. Kerley One Monarch Place
Vice President, Chief Legal Officer, 1414 Main Street
Chief Compliance Officer, Assistant Secretary Springfield, MA 01144-1013
Ronald E. Thomson One Monarch Place
Vice President, Treasurer 1414 Main Street
Springfield, MA 01144-1013
Ann F. Lomeli 1295 State Street
Secretary Springfield, MA 01111
John E. Forrest One Monarch Place
Vice President 1414 Main Street
National Sales Director Springfield, MA 01144-1013
Eileen D. Leo One Monarch Place
Assistant Secretary, 1414 Main Street
Assistant Treasurer Springfield, MA 01144-1013
David Deonarine One Monarch Place
Sr. Registered Options Principal 1414 Main Street
Springfield, MA 01144-1013
Nicholas J. Orphan 245 Peach Tree Center
Regional Supervisor (South) Ave., Suite 2330
Atlanta, GA 30303
Robert W. Kumming 1295 State Street
Regional Pension Management Supervisor (East/Central) Springfield, MA 01111
Peter J. Zummo 1295 State Street
Regional Pension Management Supervisor (South/West) Springfield, MA 01111
Bruce Lukowiak 6263 North Scottsdale Rd.,
Suite 222
9
<PAGE>
Regional Supervisor (West) Scottsdale, AZ 85250
Gary L. Greenfield 1 Lincoln Center, Suite 1490
Regional Supervisor (Central) Oakbrook Terrace, IL 60181
Burvin E. Pugh, Jr. 1295 State Street
Chief Agency Field Force Supervisor Springfield, MA 01111
John P. McCloskey 1295 State Street
Regional Supervisor (East) Springfield, MA 01144
Susan Alfano 1295 State Street
Director Springfield, MA 01111
Lawrence V. Burkett, Jr. 1295 State Street
Chairman of the Board of Directors Springfield, MA 01111
Peter Cuozzo, CLU, ChFC 140 Garden Street
Director Hartford, CT 06154
John B. Davies 1295 State Street
Director Springfield, MA 01111
Anne Melissa Dowling 140 Garden Street
Director Hartford, CT 01654
Maureen R. Ford 140 Garden Street
Director Hartford, CT 01654
Gary T. Huffman 1295 State Street
Director Springfield, MA 01111
Douglas J. Jangraw 140 Garden Street
Director Hartford, CT 01654
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The records 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 by C.M.
Life at 140 Garden Street, Hartford, Connecticut 06154 and by MMLISI at 1414
Main Street, Springfield, MA 01144-1013.
ITEM 31. MANAGEMENT SERVICES.
None.
ITEM 32. UNDERTAKINGS
(a) Registrant undertakes that it will file a post-effective amendment to this
registration statement as frequently as necessary to ensure that the audited
financial statements in the registration statement are never more than 16 months
old for so long as Purchase Payments under the Contract may be accepted (except
in accordance with SEC staff no-action correspondence).
(b) Registrant undertakes that it will include either (i) a postcard or similar
written communication affixed to or included in the Prospectus that the
applicant can remove to send for a Statement of Additional Information or (ii) a
space in the Contract application that an applicant can check to request 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 of C.M. Life at the address or phone number listed
in the Prospectus.
10
<PAGE>
SECTION 403(b) REPRESENTATIONS
C.M. Life represents that it is relying on a no-action letter dated November 28,
1988, to the American Council of Life Insurance (Ref. No. IP-6-88), regarding
Sections 22(e), 27(c)(1), and 27(d) of the Investment Company Act of 1940, in
connection with redeemability restrictions on Section 403(b) Contracts, and that
paragraph numbered (1) through (4) of the letter will be complied with.
STATEMENT PURSUANT TO RULE 6c-7: TEXAS OPTIONAL RETIREMENT PROGRAM
C.M. Life and the Separate Account rely of 17 C.F.R. (S) 270.6c-7, and represent
that the provisions of that Rule have been or will be complied with.
C.M. Life Insurance Company hereby represents that the fees and charges deducted
under the group and individual flexible premium deferred annuity contracts
described in this Registration Statement in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by C.M. Life Insurance Company.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Panorama Plus Separate Account, certifies that it meets all of the requirement
for effectiveness of this Post-Effective Amendment No. 8 pursuant to Rule 485(b)
under the Securities Act of 1933 and has caused this Post-Effective Amendment
No. 8 to Registration Statement No. 33-45122 to be signed on its behalf by the
undersigned thereunto duly authorized, all in the city of Springfield and the
Commonwealth of Massachusetts, on the 10th day of April, 1998.
PANORAMA PLUS SEPARATE ACCOUNT
C.M. LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Lawrence V. Burkett, Jr.*
-----------------------------
Lawrence V. Burkett, Jr., Director, President and
Chief Executive Officer
C.M. Life Insurance Company
/s/ Richard M. Howe On April 10, 1998, as Attorney-in-Fact pursuant to
- ------------------- powers of attorney.
*Richard M. Howe
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 8 to Registration Statement No. 33-45122 has been signed by the following
persons in the capacities and on the duties indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Lawrence V. Burkett, Jr.* Director, President and Chief April 3, 1998
- ----------------------------- Executive Officer
Lawrence V. Burkett, Jr.
/s/ Edward M. Kline* Treasurer (Principal Financial April 3, 1998
- -------------------- Officer)
Edward M. Kline
/s/ John M. Miller, Jr.* Second Vice President and April 3, 1998
- ------------------------ Comptroller (Principal Accounting Officer)
John M. Miller Jr.
</TABLE>
11
<PAGE>
<TABLE>
<S> <C> <C>
/s/ John B. Davies* Director April 3, 1998
- -------------------
John B. Davies
/s/ Stuart H. Reese* Director April 3, 1998
- --------------------
Stuart H. Reese
</TABLE>
/s/ Richard M. Howe On April 3, 1998, as Attorney-in-Fact pursuant to
- ------------------- powers of attorney.
*Richard M. Howe
12
<PAGE>
REPRESENTATION BY REGISTRANT'S COUNSEL
As attorney to the Registrant, I, Lynn S. Mercier, have reviewed this
Post-Effective Amendment No. 8 to Registration Statement No. 33-45122, and
represent, pursuant to the requirement of paragraph (e) of Rule 485 under the
Securities Act of 1933, that this Amendment does not contain disclosures which
would render it ineligible to become effective pursuant to paragraph (b) of said
Rule 485.
/s/ Lynn S. Mercier
Lynn S. Mercier
Attorney
C.M. Life Insurance Company
13
<PAGE>
EXHIBIT INDEX
Exhibit
- -------
(1) Resolution of the Board of Directors of C.M. Life Insurance Company
authorizing the establishment of the Separate Account
(4)(a) Form of Individual Contract and Certificate
(5) Form of Application
(9) Opinion of and Consent of Counsel
(10)(i) Consent of Coopers & Lybrand, L.L.P., Independent Accountants
(ii) Consent of Arthur Andersen LLP, Independent Public Accountants
(iii) Report of Arthur Andersen LLP, Independent Public Accountants
(13) Schedule of Computation of Performance
14
<PAGE>
Exhibit 1
Resolution of the Board of Directors of C.M. Life Insurance Company authorizing
the establishment of the Separate Account
CM LIFE INSURANCE COMPANY
RESOLUTIONS RE ESTABLISHMENT OF PANORAMA PLUS SEPARATE ACCOUNT
--------------------------------------------------------------
WHEREAS, Section 38a-433 of the Connecticut Insurance Laws permits a
domestic life insurance company to establish one or more separate accounts;
WHEREAS, it is desired that the Company create such a separate account to
house certain of its variable annuity products;
NOW, THEREFORE, BE IT
RESOLVED, that a separate account referred to herein as "Panorama Plus
Separate Account" is hereby established:
FURTHER RESOLVED that the assets of Panorama Plus Separate Account shall be
derived solely from (a) sale of variable annuity products, (b) funds
corresponding to dividend accumulation with respect to investment of such
assets, and (c) advances made by the Company in connection with operation of
Panorama Plus Separate Account;
FURTHER RESOLVED that this Company shall maintain in Panorama Plus Separate
Account assets with a fair market value at least equal to the statutory
valuation reserves for the variable annuity policies;
FURTHER RESOLVED that the President, any Executive Vice President, any
Senior Vice President, any Vice President and the Treasurer of the Company (the
"Officers") be, and each of them hereby is, authorized in his or her discretion,
as it may deem appropriate from time to time, in accordance with applicable laws
and regulations (a) to divide Panorama Plus Separate Account into divisions and
sub-divisions with each division or sub-division investing in shares of
designated classes of designated investment companies or other appropriate
securities, (b) to modify or eliminate any such divisions or subdivisions, (c)
to designate further any division or subdivision thereof and (d) to change the
designation of Panorama Plus Separate Account to another designation;
FURTHER RESOLVED that the Officers of the Company be, and each them hereby
is, authorized to invest cash from the Company's general account in Panorama
Plus Separate Account or in any division thereof as may be deemed necessary or
appropriate to facilitate the commencement of the operations of Panorama Plus
Separate Account or to meet any minimum capital requirements under the
Investment Company Act of 1940 and to transfer cash or securities from time to
time between the Company's general account and Panorama Plus Separate Account as
deemed necessary or appropriate so long as such transfers are not prohibited by
law and are consistent with the terms of the variable annuity policies issued by
the Company providing for allocations to Panorama Plus Separate Account;
FURTHER RESOLVED that the income, gains, and losses (whether or not
realized) from assets allocated to Panorama Plus Separate Account shall, in
accordance with any variable annuity policies issued by the Company providing
for allocations to Panorama Plus Separate Account, be credited to or charged
against Panorama Plus Separate Account without regard to the other income,
gains, or losses of the Company;
FURTHER RESOLVED that authority is hereby delegated to the President of the
Company to adopt procedures providing for, among other things, criteria by which
the Company shall provide for a pass-through of voting rights to the owners of
variable annuity policies issued by the Company providing for allocation to
Panorama Plus Separate Account with respect to the shares of any investment
companies which are held in Panorama Plus Separate Account;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized and directed to prepare and execute any necessary
agreements to enable Panorama Plus Separate Account to invest or reinvest the
assets of Panorama Plus Separate Account in securities issued by investment
companies registered under the Investment Company Act of 1940 or other
appropriate securities as the Officers of the Company may designate pursuant to
the provisions of the variable annuity policies issued by the Company providing
for allocations to Panorama Plus Separate Account;
FURTHER RESOLVED that the fiscal year of Panorama Plus Separate Account
shall end on the 31(st) day of December each year;
15
<PAGE>
FURTHER RESOLVED that the Company may register under the Securities Act of
1933 variable annuity policies, or units of interest thereunder, under which
amounts will be allocated by the Company to Panorama Plus Separate Account to
support reserves for such policies and, in connection therewith, the Officers of
the Company be, and each of them hereby is, authorized, to prepare, execute and
file with the Securities and Exchange Commission, in the name and on behalf of
the Company, registration statements under the Securities Act of 1933, including
prospectuses, supplements, exhibits and other documents relating thereto, and
amendments to the foregoing, in such form as the Officer executing the same may
deem necessary or appropriate;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized to take all actions necessary to register Panorama Plus
Separate Account as a unit investment trust under the Investment Company Act of
1940 and to take such related actions as they deem necessary and appropriate to
carry out the foregoing;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized to prepare, execute and file with the Securities and
Exchange Commission, applications and amendments thereto for such exemptions
from or orders under the Investment Company Act of 1940 and the Securities Act
of 1933, and to request from the Securities and Exchange Commission no action
and interpretative letters as they may from time to time deem necessary or
desirable;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized to prepare, execute and file all periodic reports required
under the Investment Company Act of 1940 and the Securities Exchange Act of
1934;
FURTHER RESOLVED that the President of the Company, or such person as is
designated by him, is hereby appointed as agent for service under any such
registration statement and is duly authorized to receive communications and
notices from the Securities and Exchange Commission with respect thereto, and to
exercise powers given to such agent by the Securities Act of 1933 and the Rules
thereunder and any other necessary Acts;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized to effect in the name and on behalf of the Company, all
such registrations, filings and qualifications under blue sky or other
applicable securities laws and regulations and under insurance securities laws
and insurance laws and regulations of such states and other jurisdictions as
they may deem necessary or appropriate, with respect to the Company, and with
respect to any variable annuity policies under which amounts will be allocated
by the Company to Panorama Plus Separate Account to support reserves for such
policies; such authorization shall include registration, filing and
qualification of the Company and of said policies, as well as registration,
filing and qualification of officers, employees and agents of the Company as
brokers, dealers, agents, salesmen, or otherwise; and such authorization shall
also include, in connection therewith, authority to prepare, execute,
acknowledge and file all such applications, applications for exemptions,
certificates, affidavits, covenants, consents to service of process and other
instruments, and to take all such action as the Officer executing the same or
taking such action may deem necessary or desirable;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized to execute and deliver all such documents and papers and
to do or cause to be done all such acts and things as they may deem necessary or
desirable to carry out the foregoing resolutions and the intent and purpose
thereof.
16
<PAGE>
Exhibit 4(a)
Form of Individual Contracts and Certificates
C.M. Life Insurance Company
140 Garden Street
Hartford, CT 06154
Contract Owner:
Contract Number:
Contract Issue Date:
Annuity Income Date:
Annuitant: Age and Sex:
Contingent Annuitant:
C.M. Life Insurance Company (Company) will pay an annuity on the Annuity Income
Date to the Annuitant if then living, in accordance with the provisions of this
Contract.
This Contract is issued by the Company at its Home Office, 140 Garden Street,
Hartford, Connecticut, 06154, on the Contract Issue Date. The Contract,
Application, Contract Schedule, and any amendments, riders, or endorsements
attached constitute the entire Contract.
READ YOUR CONTRACT CAREFULLY
SECRETARY PRESIDENT
REGISTRAR
RIGHT TO EXAMINE CONTRACT: This Contract may be returned to the Company for any
reason within fifteen (15) calendar days after the Contract Issue Date. Upon its
return, the Company will refund the Separate Account Balance and/or any Purchase
Payments made to the General Account of this Contract.
PANORAMA PLUS
FIXED AND VARIABLE DEFERRED ANNUITY CONTRACT
Single or Periodic Purchase Payments
Nonparticipating
PAYMENTS AND VALUES PROVIDED BY THE SEPARATE ACCOUNT PORTION OF THIS CONTRACT
ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
PANA+I92
10/92
17
<PAGE>
CONTRACT SCHEDULE
- -----------------
Revision Date:
CONTRACT SPECIFICS
- ------------------
Contract Owner: Contract Number:
Annuitant: Age and Sex:
Contingent Annuitant:
Beneficiary:
Annuity Option Selected:
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------
INITIAL PURCHASE PAYMENT ALLOCATION
- -----------------------------------
Investment Accounts Percentage
- ------------------- ----------
General Account ___________
Separate Account - Sub-Accounts
Growth Portfolio Sub-Account ___________
International Equity Sub-Account ___________
Money Market Sub-Account ___________
Income Portfolio Sub-Account ___________
Total Return Sub-Account ___________
Government Securities Sub-Account ___________
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------
FEES AND CHARGES
- ----------------
The current annual Contract Maintenance Fee is $30. The maximum annual Contract
Maintenance Fee will not exceed $60. The current Mortality and Expense Risk
Charge is 1.07% and the current Administrative Expense Charge is .07%. The
maximum Mortality and Expense Risk Charge will not exceed 1.25% annually, and
together with the Administrative Expense Charge, will not exceed 1.5% annually
or .004109% daily.
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------
Annuity Service Center
Old State House Station
P. O. Box 231259
Hartford, CT 06123
PANA+I92
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18
<PAGE>
TABLE OF CONTENTS
- -----------------
Page
- ----------------------------------------------------------
CONTRACT SCHEDULE
- --------------------------------------------------------------------------------
- ---------------------------------------------------
PART 1 DEFINITIONS..................................................... 5
- --------------------------------------------------------------------------------
- ---------------------------------------------------
PART 2 INVESTMENT ACCOUNTS............................................. 9
General Account
General Account Balance
Separate Account
Separate Account Balance
Separate Account Valuation
Accumulation Units
Accumulation Unit Value
Net Investment Factor
Valuation Date
Valuation Period
Minimum Contract Balance
- --------------------------------------------------------------------------------
- ---------------------------------------------------
PART 3 PURCHASE PAYMENTS............................................... 11
Purchase Payment Guidelines
Allocation of Purchase Payments
- --------------------------------------------------------------------------------
- ---------------------------------------------------
PART 4 TRANSFERS....................................................... 12
Accumulation Period Transfers
Annuity Period Transfers
- --------------------------------------------------------------------------------
- ---------------------------------------------------
PART 5 PARTIAL AND FULL SURRENDERS..................................... 14
Surrender Guidelines
Partial Surrender
Full Surrender
- --------------------------------------------------------------------------------
- ---------------------------------------------------
PART 6 DEATH BENEFITS.................................................. 15
Death Benefit - Accumulation Period
Death of the Contract Owner
Death of the Annuitant
Death of the Contract Owner/Annuitant
Death Benefit Options
Death of Annuitant - Annuity Period
Beneficiary
- --------------------------------------------------------------------------------
- ---------------------------------------------------
PART 7 FEES AND CHARGES................................................ 19
Contract Maintenance Fee
Surrender Charge
Free Surrender
Interest Rate Factor Adjustment
19
<PAGE>
PANA+I92
10/92
- --------------------------------------------------------------------
PART 8 GENERAL PROVISIONS...............................................23
Assignment of the Contract
Contract Changes by the Company
Contract Changes by the Contract Owner
Contract Termination
Incontestability
Misstatement of Age or Sex
Nonparticipating
Non-Business Days
Regulatory Requirements
Right to Examine Contract
Voting Rights
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------
PART 9 ANNUITY PROVISIONS...............................................25
Annuity Guidelines
Annuity Payments
Fixed Annuity
Variable Annuity
Annuity Units and Payments
Annuity Unit Value
Annuity Options
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------
PART 10 ANNUITY RATES................................................... 28
Annuity Option Rates
PANA+I92
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PART 1
DEFINITIONS
- -----------
ACCUMULATION The period from the Contract Issue Date through
PERIOD the day preceding the Annuity Income Date.
ACCUMULATION UNIT A unit of measure used to determine the value of the
Contract Owner's interest in a Sub-Account of the Separate Account during the
Accumulation Period.
ANNUITANT The primary person upon whose life the Annuity
Income payments are to be made. On or after the Annuity Income Date, the
Annuitant shall also include any joint Annuitant.
* ANNUITY INCOME The date on which the payment of Annuity Income
DATE begins. The earliest Annuity Income Date which may
be elected is the fifth anniversary of the Contract
Issue Date. The latest Annuity Income Date which may
be elected is the Annuitant's 85th birthday.
ANNUITY INCOME The payments that will begin on the Annuity Income
Date. The amount of Annuity Income payments will be based on the Contract
Balance and the age(s) and sex(es) of the Annuitant (and joint Annuitant if
Annuity Option C or D is elected) as well as on the Annuity Option selected.
ANNUITY OPTIONS Options available for payment of Annuity Income.
ANNUITY PERIOD The period which begins on the Annuity Income Date
and ends with the last Annuity Income payment.
ANNUITY SERVICE The office indicated on the Contract Schedule of
CENTER this Contract to which notices, requests and
Purchase Payments must be sent. All sums payable by
the Company under this Contract are payable only at
the Annuity Service Center.
ANNUITY UNIT A unit of measure used to determine the amount of
each Variable Annuity Income payment.
APPLICATION The document signed by the Contract Owner that
evidences the Contract Owner's application for this Contract.
* BENEFICIARY The person(s) designated to receive the Death
Benefit provided by this Contract.
CONTINGENT The person designated to receive all of the benefits
otherwise due the Annuitant if the
20
<PAGE>
ANNUITANT Annuitant dies before the Annuity Income Date,
provided such person is less than 85 years of age on
the Annuitant's date of death.
* As specified in the Application, unless changed by Written Request in
accordance with the provisions of this Contract.
PANA+I92 Page 5 of 37 10/92
CONTRACT The sum of the General Account Balance and the
Separate Account Balance.
BALANCE
CONTRACT ISSUE The date on which the Contract becomes effective.
DATE
* CONTRACT OWNER The person or entity entitled to the ownership
rights stated in the Contract.
CONTRACT YEAR The first Contract Year is the annual period which
begins on the Contract Issue Date. Subsequent Contract Years begin on each
anniversary of the Contract Issue Date.
DEATH BENEFIT The payment(s) that will be made to the Beneficiary
upon the death of the Contract Owner or the Annuitant as explained in Part 6 -
Death Benefit.
FIVE YEAR PERIOD Any of the successive five year periods which begin
on the date of the initial Purchase Payment to the General Account.
FIXED ANNUITY An annuity with payments which do not vary as to
dollar amount based on investment performance.
GENERAL ACCOUNT The portion of the Investment Accounts which is
credited with the Guaranteed Interest Rate and which is not held as part of a
Separate Account.
GENERAL ACCOUNT The value of the General Account during the
BALANCE Accumulation Period, determined as described in Part
2 - Investment Accounts.
GUARANTEED The effective annual interest rate which the Company
INTEREST RATE will credit on the General Account Balance. The
Guaranteed Interest Rate will initially be reset
quarterly and will never be less than 3%.
INVESTMENT The General Account and Separate Account available
ACCOUNTS for allocation of Purchase Payments under this
Contract.
NET PURCHASE A Purchase Payment less any Premium Tax.
PAYMENT
PREMIUM TAX A tax imposed by certain states when a Purchase
Payment is made, when Annuity Income begins, or when the Contract is
surrendered.
PURCHASE PAYMENT A payment made by or on behalf of a Contract Owner
with respect to this Contract.
* As specified in the Application, unless changed by Written Request in
accordance with the provisions of this Contract.
PANA+I92 Page 6 of 37
10/92
REVISION DATE The date of any revised Contract Schedule. A revised
Contract Schedule bearing the latest Revision Date will supersede all previous
Contract Schedules.
SEPARATE ACCOUNT The Company's Panorama Plus Separate Account, which
consists of assets set aside by the Company the investment performance of which
is kept separate from that of the general assets and all other separate account
assets of the Company. The assets of the Separate Account will not be charged
with liabilities arising out of any other business the Company may conduct.
SEPARATE ACCOUNT The value of this Contract's share of the Separate
BALANCE Account during the Accumulation Period, determined
as described in Part 2 - Investment Accounts.
SERIES FUND I Panorama Series Fund I, Inc., which is a diversified
open-end management investment company which offers investment alternatives
through a number of separate classes of shares, each referred to as a Portfolio
and collectively as the Portfolios. Each Portfolio is managed for investment
purposes as if it were a separate investment company issuing its own shares.
SUB-ACCOUNT Separate Account assets are divided into Sub-
Accounts which are listed in the Contract Schedule. Assets of each Sub-Account
will be invested in shares of a corresponding Portfolio of Series Fund I. The
Company reserves the right to change investment companies or to substitute other
investments for Series Fund I shares in accordance with the applicable
provisions of the Investment Company Act of 1940, as amended.
TREASURY INDEX The annual interest rates payable on Treasury
RATES Securities with 1 - year, 2 - year, 3 - year and 5 -
year maturities, published weekly by the Federal
Reserve. Index Rates for intermediate periods shall
be interpolated from the applicable interest rates.
VALUATION DATE Every day on which the Company and the New York
Stock Exchange ("NYSE") are open for business, except any day on which trading
on the NYSE is restricted, or on which an emergency exists, as determined by the
Securities and Exchange Commission ("SEC") or respective governing bodies of the
NYSE so that valuation or disposal of securities is not practicable.
21
<PAGE>
VALUATION PERIOD The period of time beginning on the day following
any Valuation Date and ending on the next Valuation Date. A Valuation Period may
be one day or more than one day.
VARIABLE ANNUITY An annuity with payments which vary as to dollar
amount in relation to the investment performance of specified Sub-Accounts of
the Separate Account.
PANA+I92 Page 7 of 37 (Rev. 5/96)
WINDOW PERIOD The last thirty (30) calendar days of each Five Year
Period. During a Window Period, part or all of the General Account Balance may
be transferred to any Sub-Account of the Separate Account or surrendered without
incurring a Surrender Charge or an Interest Rate Factor Adjustment (See Part 7 -
Fees and Charges). Also, part or all of the Separate Account Balance may be
surrendered without incurring a Surrender Charge during the Window Period.
WRITTEN REQUEST A request in writing, in a form satisfactory to the
Company, which is received by the Annuity Service Center.
PANA+I92 Page 8 of 37 10/92
22
<PAGE>
PART 2
INVESTMENT ACCOUNTS
- -------------------
GENERAL ACCOUNT
- ---------------
The General Account is the portion of the Investment Accounts which is credited
with the Guaranteed Interest Rate and which is not held as part of a Separate
Account. It is part of the general assets of the Company.
General Account Balance
- -----------------------
The General Account Balance is equal to the amounts allocated to the
General Account under this Contract (including Net Purchase Payments, transfers
in and credited interest) less all withdrawals from the General Account
(including any surrenders, transfers out and deductions for fees and charges)
on the applicable date.
The Company agrees to credit interest to the General Account Balance as follows:
Prior to the beginning of each calendar quarter, the Company will determine the
Guaranteed Interest Rate for the next calendar quarter. The General Account
Balance will be credited daily, from day after deposit through day of
withdrawal, with the daily equivalent of the Guaranteed Interest Rate for the
applicable calendar quarter. This rate will be expressed as an annual effective
rate and will never be less than 3%. The Company reserves the right to reset the
Guaranteed Interest Rate more or less frequently than quarterly.
SEPARATE ACCOUNT
- ----------------
The Separate Account is the Company's Panorama Plus Separate Account,
which consists of assets set aside by the Company, the investment performance of
which is kept separate from that of the general assets and all other separate
account assets of the Company. The assets of the Separate Account will not be
charged with liabilities arising out of any other business the Company may
conduct.
The Separate Account assets are divided into Sub-Accounts which are listed in
the Contract Schedule. Assets of each Sub-Account will be invested in shares of
a corresponding Portfolio of Series Fund I. The Company reserves the right to
eliminate or add Sub-Accounts or to change investment companies or to substitute
other investments for Series Fund I shares.
Separate Account Balance
- ------------------------
The Separate Account Balance will consist of the sum of the value of all
Accumulation Units in all Sub-Accounts credited to this Contract on the
applicable Valuation Date.
Separate Account Valuation Accumulation Units.
- ---------------------------------------------
Accumulation Units shall be used to account for all amounts allocated to or
withdrawn from the Separate Account as a result of Purchase Payments,
surrenders, transfers, or fees and charges. The Company will determine the
number of Accumulation Units of a Sub-Account purchased or cancelled. This will
be done by dividing the amount allocated to (or the amount withdrawn from) the
Sub-Account by the dollar value of one Accumulation Unit of the Sub-Account as
of the end of the Valuation Period during which the allocation is made.
PANA+I92 Page 9 of 37 10/92
Accumulation Unit Value. The value of an Accumulation Unit in a Sub-Account on
- -----------------------
any Valuation Date is the product of (a) and (b).
(a) The value on the preceding Valuation Date.
(b) The Net Investment Factor for the Sub-Account for the Valuation Period
just ended.
Net Investment Factor. The Company calculates the Net Investment Factor for each
- ---------------------
Sub-Account as follows:
(ENAV + DIV - TAX) / BNAV - CHGS = Net Investment Factor
Where:
(ENAV) ending net asset value, i.e., the net asset value per share of the Sub-
Account's investment in the appropriate Portfolio of Series Fund I for the
Valuation Period just ended.
(DIV) dividends, i.e., any dividend per share declared on behalf of such
Portfolio that has an ex-dividend date within the Valuation Period just ended.
This includes both income and capital gain dividends.
(TAX) taxes, i.e., the reserve for taxes per share on realized and unrealized
capital gains or losses of such Portfolio within the Valuation Period just ended
(a negative number represents a tax credit).
(BNAV) beginning net asset value, i.e., the net asset value per share of the
Sub-Account's investment in such Portfolio of the Series Fund I at the beginning
of the Valuation Period just ended.
(CHGS) applicable charges, i.e., the accumulated Mortality and Expense Risk
Charge and Administrative Expense Charge for each day in the Valuation Period
just ended (specified in the Contract Schedule).
Valuation Date. A Valuation Date shall be every day on which the Company and the
- --------------
New York Stock Exchange ("NYSE") are open for business, but shall not include
any day on which trading on the NYSE is restricted, or on which an emergency
exists, as determined by the Securities and Exchange Commission and/or
respective governing bodies of the NYSE so that valuation or disposal of
securities is not practicable.
Valuation Period. The period of time beginning on the day following any
- ----------------
Valuation Date and ending on the next Valuation Date. A Valuation Period may be
one day or more than one day.
MINIMUM CONTRACT BALANCE
- ------------------------
A minimum Contract Balance of $250 must be maintained during the Accumulation
Period. If the Contract Owner fails to maintain the minimum Contract Balance,
the Company will terminate the Contract, and return the Contract Balance, minus
any
23
<PAGE>
applicable fees and charges, to the Contract Owner (See Part 7 - Fees and
Charges).
PANA+I92 Page 10 of 7 10/92
PART 3
PURCHASE PAYMENTS
- -----------------
PURCHASE PAYMENT GUIDELINES
- ---------------------------
During the Accumulation Period and before a Death Benefit has become payable,
the Company will accept Purchase Payments at the Annuity Service Center subject
to the following:
1. For Annuitants who are younger than age 76 as of the Contract Issue
Date: the initial Purchase Payment must be at least $500; any one subsequent
Purchase Payment must be at least $100; and cumulative Purchase Payments may not
exceed $1,000,000; or
2. For Annuitants who are age 76 or older as of the Contract Issue Date:
the initial Purchase Payment must be at least $500; any one subsequent Purchase
Payment must be at least $100; and cumulative Purchase Payments may not exceed
$500,000.
3. Except during the Window Period when no limits are applicable, the
General Account Purchase Payments for any Contract Year after the first Contract
Year are limited to the greater of: (a) 125% of average annual Purchase Payments
made to the General Account during the prior five (5) full Contract Years (or
all years if less than five (5)); or (b) $1,000.
ALLOCATION OF PURCHASE PAYMENTS
- -------------------------------
Purchase Payments will be allocated to the General Account and/or any Sub-
Account(s) of the Separate Account (See Part 2 Investment Accounts) in
accordance with the initial allocation specified in the Application. If the
Contract Owner fails to specify how Purchase Payments are to be allocated, the
Purchase Payment(s) cannot be accepted. Allocation changes for subsequent
Purchase Payments may be made by Written Request of the Contract Owner.
Allocation changes will apply to Purchase Payments received with the Written
Request, and thereafter.
If the Application is properly completed and can be accepted in the form
received, any initial Net Purchase Payment will be credited to the Contract
Balance within two (2) business days after the later of receipt of the
Application or receipt of the initial Purchase Payment at the Annuity Service
Center. Additional Purchase Payments allocated to the Separate Account will be
credited to the Contract and added to the Contract Balance as of the Valuation
Period when they are received. Purchase Payments allocated to the General
Account will be credited with interest from the day after deposit. Allocation of
a Purchase Payment which is derived, all or in part, from any amount paid by
check or draft may be postponed until such time as the Company determines that
such instrument has been honored.
PANA+I92 Page 11 of 37 10/92
PART 4
TRANSFERS
- ---------
No fee is currently imposed on transfers. The Company reserves the right to
charge such a fee in the future, and to otherwise restrict the transfer
privilege in any way or eliminate it entirely.
ACCUMULATION PERIOD TRANSFERS
- -----------------------------
During the Accumulation Period, the Contract Owner or the Beneficiary (if a
Death Benefit has become payable) may elect to make transfers among the Sub-
Accounts and the General Account. Such transfers shall be made upon Written
Request and are subject to the following:
1. The minimum transfer amount to or from the General Account and/or any
Sub-Account will be $100; and
2. The General Account and the Money Market Sub-Account are Competing
Accounts. Transfers between these Competing Accounts will not be permitted
unless the transfer is requested during the Window Period. For a period of
ninety (90) calendar days following a transfer from one Competing Account, no
transfer can be made to the other Competing Account. For a period of ninety (90)
calendar days following a transfer to one Competing Account, no transfer can be
made from the other Competing Account; and
3. Except during the Window Period, the total of all transfers to or from
the General Account during any Contract Year are limited to the greater of: (a)
15% of the General Account Balance as of the end of the immediately preceding
Contract Year, or (b) $1,000.
ANNUITY PERIOD TRANSFERS
- ------------------------
During the Annuity Period, the Contract Owner may, upon Written Request, elect
to transfer a portion of any Sub-Account of the Separate Account to any other
Sub-Account(s) of the Separate Account once during any Contract Year. Transfers
to or from the General Account are not permitted during the Annuity Period. The
Company will process transfers based on the calculations outlined below.
Determine the number of units to be transferred from the Sub-Account as follows:
= AT/AUV1
Determine the number of Annuity Units remaining in such Sub-Account (after the
transfer): = UNIT1 - AT/AUV1
Determine the number of Annuity Units in the transferee Sub-Account (after the
transfer): = UNIT2 + AT/AUV2
4. Subsequent annuity payments will reflect the changes in Annuity Units
in each Sub-Account as of the next Annuity Income payment's due date.
PANA+I92 Page 12 of 37 10/92
Annuity Period Transfer (cont)
Where:
24
<PAGE>
(AUV1) is the Annuity Unit Value of the Sub-Account that the transfer is being
made from as of the next annuity payment's due date.
(AUV2) is the Annuity Unit Value of the Sub-Account that the transfer is being
made to as of the next annuity payment's due date.
(UNIT1) is the number of units in the Sub-Account that the transfer is being
made from, before the transfer.
(UNIT2) is the number of units in the Sub-Account that the transfer is being
made to, before the transfer.
(AT) is the dollar amount being transferred from the Sub-Account.
PANA+I92 Page 13 of 37 10/92
PART 5
PARTIAL AND FULL SURRENDERS
- ---------------------------
SURRENDER GUIDELINES
- --------------------
During the Accumulation Period, the Company will process all Written Requests
for Partial and/or Full Surrenders subject to the following:
1. Such request is received by the Company before a Death Benefit has
become payable; and
2. the deduction of any applicable Surrender Charge, Interest Rate Factor
Adjustment, Contract Maintenance Fee, and applicable premium taxes (See Part 7 -
Fees and Charges). Any Interest Rate Factor Adjustment imposed on a surrender
will be imposed only on the amount of the General Account Balance subject to
surrender.
The Company will process all Partial and Full Surrender requests within seven
(7) calendar days following receipt by the Annuity Service Center of the
Contract Owner's Written Request, except as follows:
1. General Account. The Company reserves the right to defer payment of any
---------------
surrender from the General Account for up to six (6) months.
2. Separate Account. The Company reserves the right to defer the payment
----------------
of any surrender from the Separate Account as permitted by the Investment
Company Act of 1940, as amended.
A Purchase Payment amount is not available to satisfy a Written Request for
surrender until the check or other instrument by which the Purchase Payment was
made has been honored.
PARTIAL SURRENDER
- -----------------
The Contract Owner may elect a Partial Surrender from the General Account and/or
any Sub-Account subject to the following conditions:
1. the Partial Surrender is for at least $100; and
2. the Contract Balance is at least $250 after any Partial Surrender.
The Contract Owner must specify the Investment Account or Sub-Account from which
surrendered amounts should be taken. The Surrender Charge, if any, shall be
allocated among the General Account and/or any Sub-Account in the same manner as
the Partial Surrender amount.
FULL SURRENDER
- --------------
The Contract Owner may elect a Full Surrender of the entire Contract Balance
which will be in full settlement of the Company's liability to the Contract
Owner under the Contract and this Contract. The Company may require that this
Contract be returned to the Annuity Service Center upon a Full Surrender.
PANA+I92 Page 14 of 37 10/92
PART 6
DEATH BENEFIT
- -------------
DEATH BENEFIT DURING THE ACCUMULATION PERIOD
- --------------------------------------------
If the Annuitant or Contract Owner dies prior to the Annuity Income Date, a
Death Benefit will be paid to the Beneficiary upon receipt at the Annuity
Service Center of proof of death. If, however, the Annuitant dies before the
Contract Owner and there is a Contingent Annuitant who is less than eighty-five
(85) years of age on the Annuitant's date of death, and the Contract Owner is a
natural person, then no Death Benefit is payable, and the Contract will continue
in force, with the Contingent Annuitant as the Annuitant.
The Death Benefit is payable upon receipt of proof of death, as well as proof
that death occurred during the Accumulation Period. Payments under a Death
Benefit Option are determined at the time of payment and shall be based on (a)
or (b):
(a) the greater of the Contract Balance or the Purchase Payments less any
prior withdrawals and charges if the deceased Annuitant or Contract Owner was a
natural person less than age 75 at death.
(b) the Contract Balance, for all other Annuitants or Contract Owners. No
Surrender Charge, Interest Rate Factor Adjustment, or Contract Maintenance Fee
shall apply with respect to any Death Benefit Option. Payment of the Death
Benefit will be in full settlement of the Company's liability under this
Contract.
DEATH OF THE CONTRACT OWNER
- ---------------------------
If the Contract Owner and the Annuitant are not the same person and the Contract
Owner dies before the Annuitant and prior to the Annuity Income Date, one of the
following provisions will apply:
25
<PAGE>
1. If the Contract Owner's spouse is the Beneficiary and survives the
Contract Owner, the spouse may select Death Benefit Option A, B or C within one
year after the Contract Owner's death. If the surviving spouse does not make a
selection within one year after the Contract Owner's death, the surviving spouse
will become the Contract Owner.
2. If the Beneficiary is a natural person other than the Contract Owner's
spouse, the Beneficiary may select Death Benefit Option B or C within one year
after the Contract Owner's death. If no selection is made within one year after
the Contract Owner's death, the Death Benefit will be paid to the Beneficiary in
a single sum at that time.
3. If the Beneficiary is not a natural person, it may select Death Benefit
Option B or D within one year after the Contract Owner's death.
4. If no Beneficiary survives the Contract Owner, the Annuitant shall be
deemed to be the Beneficiary and (1) or (2) above shall apply. If no selection
is made within one year after the Contract Owner's death, the Death Benefit will
be paid in a single sum at that time.
PANA+I92 Page 15 of 37 10/92
DEATH OF THE ANNUITANT
- ----------------------
If the Contract Owner and the Annuitant are not the same person and the
Annuitant dies before the Contract Owner and prior to the Annuity Income Date,
and there is no Contingent Annuitant younger than age 85, or if the Contract
Owner is not a natural person, the following provision applies:
1. The Beneficiary, if a natural person, may select Death Benefit Option E
or F within one year after the Annuitant's death. If no selection is made within
one year after the Annuitant's death, the Death Benefit will be paid in a single
sum to the Beneficiary at that time.
2. If the Beneficiary is not a natural person, it may select only Death
Benefit Option D or E within one year after the Annuitant's death. If no
selection is made within one year after the Annuitant's death, the Death Benefit
will be paid to the Beneficiary in a single sum at that time.
3. If no Beneficiary survives the Annuitant, the Contract Owner shall be
deemed the Beneficiary and (1) or (2) above shall apply.
DEATH OF THE CONTRACT OWNER/ANNUITANT
- -------------------------------------
If the Contract Owner and the Annuitant are the same person and the Contract
Owner/Annuitant dies before the Annuity Income Date, one of the following
provisions apply:
1. If the Contract Owner/Annuitant's spouse is the Beneficiary, the
surviving spouse may select Death Benefit Option B, C or G within one year after
the Contract Owner/Annuitant's death. If no selection is made within one year
after the Contract Owner/Annuitant's death, the surviving spouse will become the
Contract Owner and Annuitant under the Contract.
2. If the Beneficiary is a natural person other than the Contract
Owner/Annuitant's spouse, the Beneficiary may select Death Benefit Option B or C
within one year of the Contract Owner/Annuitant's death. If no selection is made
within one year after the Contract Owner's death, the Death Benefit will be paid
to the Beneficiary in a single sum at that time.
3. If the Beneficiary is not a natural person, it may select Death Benefit
Option B or D within one year after the Contract Owner's death.
4. If no Beneficiary survives the Contract Owner/Annuitant, the Death
Benefit will be paid in a single sum to the Contract Owner/Annuitant's estate
within five (5) years of the date of death. If no selection is made within one
year after the Contract Owner's death, the Death Benefit will be paid in a
single sum at that time.
PANA+I92 Page 16 of 37 10/92
DEATH BENEFIT OPTIONS
- ---------------------
Life expectancy for purposes of these Death Benefit Options will be determined
from the tables in the Regulations under Section 72 of the Internal Revenue
Code. The following Death Benefit Options are available:
Death Benefit Option A - To become the Contract Owner.
- ----------------------
Death Benefit Option B - To receive the Death Benefit as a single sum within one
- ----------------------
year after the Contract Owner's death.
Death Benefit Option C - To receive the Death Benefit under any Annuity Option
- ----------------------
offered in this Contract, provided the entire Death Benefit is distributed:
1. Within five (5) years of the date of death; or,
2. Over a period not extending beyond the life expectancy of the
Beneficiary; or,
3. Over the life of the Beneficiary.
If the Death Benefit is to be paid under (2) or (3), the first installment
payment must be made within one year after the Contract Owner's death.
Death Benefit Option D - To receive the Death Benefit under any Annuity Option
- ----------------------
offered in this Contract, provided the entire Death Benefit is distributed
within five (5) years of the date of death.
Death Benefit Option E - To receive the Death Benefit as a single sum within one
- ----------------------
year after the Annuitant's death.
Death Benefit Option F - To receive the Death Benefit under any Annuity Option
- ----------------------
offered in the Contract, provided the Death Benefit is distributed:
1. Over a period not extending beyond the life expectancy of the
Beneficiary; or,
2. Over the life of the Beneficiary.
The first installment payment must be made within one year after the Annuitant's
death.
26
<PAGE>
Death Benefit Option G - To become the Contract Owner and Annuitant under the
- ----------------------
Contract, just as if the Beneficiary had always been the Contract Owner and
Annuitant.
DEATH OF THE ANNUITANT DURING ANNUITY PERIOD
- --------------------------------------------
The Death Benefit payable if the Annuitant dies on or after the Annuity Income
Date, if any, depends on the Annuity Option in effect on the date of death of
the Annuitant. Any remaining payments will be distributed at least as rapidly as
under the method of distribution being used as of the date of the Annuitant's
death. If a Beneficiary dies while receiving such benefits, the balance of the
benefits, if any, will be paid in a single sum to the estate of the Beneficiary.
If no Beneficiary survives the Annuitant, the benefits, if any, will be paid in
a single sum to the estate of the last Annuitant to die.
PANA+I92 Page 17 of 37 10/92
BENEFICIARY One or more Beneficiaries may be designated to receive
- -----------
benefits concurrently, contingently or successively upon the death of the
Contract Owner and/or the Annuitant. The Beneficiary designation in the
Application will remain in effect until changed. The Contract Owner may change
the designated Beneficiary before a Death Benefit has become payable, upon
Written Request. The change will take effect as of the date the Contract Owner
signs the Written Request; however, the change is subject to any payments made
or actions taken by the Company prior to its receipt of such Written Request.
was irrevocably designated or consent is required by law. If an irrevocable
Beneficiary dies, the Contract Owner may then designate a new Beneficiary. On or
after receipt of proof of death at the Annuity Service Center, the Beneficiary
shall have the exclusive right to: 1) appoint a contingent Beneficiary to
succeed to the interest of the Beneficiary in the event of the Beneficiary's
death; and 2) make transfers under the Contract.
PANA+I92 Page 18 of 37 10/92
PART 7
FEES AND CHARGES
- ----------------
CONTRACT MAINTENANCE FEE
- ------------------------
An annual Contract Maintenance Fee is deducted from the Contract Balance on the
last day of each Contract Year during the Accumulation Period and upon Full
Surrender of the Contract. The annual Contract Maintenance Fee will not exceed
$60. The Contract Maintenance Fee will be deducted prorata from the Sub-Accounts
in the Separate Account and the General Account, in the same proportion that the
amount of Contract Balance in each Sub-Account and the General Account bears to
the total Contract Balance.
SURRENDER CHARGE
- ----------------
During the first five (5) Contract Years, a 5% Surrender Charge will be imposed
on each Partial or Full Surrender; no Surrender Charge will be imposed on or
after the fifth anniversary of the Contract Issue Date. The Surrender Charge
will be deducted from the Contract Balance pursuant to this Part as of the date
of receipt of Written Request for such Surrender. In the case of a Partial
Surrender, the Surrender Charge will be deducted from the Contract Balance
remaining after payment of the requested surrender amount, or from the amount
paid if sufficient balances do not remain in the Sub-Account(s) or General
Account to which the surrender is allocated.
The Partial Surrender Charge formula is as follows:
(PS - FREE) x 5% / (95%) = PSC, but not less than zero
The Full Surrender Charge formula is as follows:
(FS - FREE) x 5% = FSC
where:
(PS) is the Partial Surrender Amount.
(FS) is the Full Surrender Amount.
(FREE) is the Free Surrender Amount.
(PSC) is the Partial Surrender Charge Amount
(FSC) is the Full Surrender Charge Amount
PANA+I92 Page 19 of 37 10/92
A Surrender Charge will not apply to:
1. cancellation during the Right to Examine Contract period;
2. Full Surrender of the Contract on the Annuity Income Date;
3. Partial or Full Surrenders during the Window Period;
4. the Death Benefit; or
5. a Free Surrender Amount.
FREE SURRENDER
- --------------
Beginning in the second Contract Year, the Contract Owner is entitled to an
annual Free Surrender Amount which is exempt from a Surrender Charge and any
applicable Interest Rate Factor Adjustment. The Free Surrender Amount will be
allocated among the General Account and/or Sub-Accounts in the same proportions
as the Partial or Full Surrender amount. The Free Surrender Amount equals 10% of
the Contract Balance as of the end of the immediately preceding Contract Year.
Any amount surrendered during the year in excess of this 10% amount will be
subject to a Surrender Charge and any applicable Interest Rate Factor
Adjustment.
27
<PAGE>
INTEREST RATE FACTOR ADJUSTMENT
- -------------------------------
Except during the Window Period, an Interest Rate Factor Adjustment will be
deducted from or added to the General Account:
(a) upon Partial and/or Full Surrender of the Contract during the
Accumulation Period;
b) to the extent the General Account Balance is applied to purchase a
Variable Annuity on the Annuity Income Date .
The Interest Rate Factor Adjustment will reflect the relationship between 1) the
weighted average of Treasury Index Rates corresponding to Purchase Payments and
transfers into the General Account during the current Five Year Period (as
adjusted for Partial Surrenders or transfers out of the General Account), 2) the
Treasury Index Rate which would be applicable during the time remaining in the
Five Year Period. The Interest Rate Factor Adjustment formula includes a set
percentage factor (.30%) designed to compensate the Company for certain expenses
and losses that might be incurred as a direct or indirect result or consequence
of surrenders. In general, if the weighted average of Treasury Index Rates
corresponding to Purchase Payments and transfers during the current Five Year
Period is lower than the Treasury Index Rate which would be applicable during
the time remaining in the current Five Year Period, (or exceeds such rate by
less than .30%) then the application of the Interest Rate Factor Adjustment will
result in a negative adjustment.
The Partial Surrender Interest Rate Factor Adjustment Formula is:
(1 - 1/IRF) x (GAPS - GAF + GAPSC) = IRFA
The Full Surrender Interest Rate Factor Adjustment Formula is:
(IRF - 1) x (GAFS - GAF) = IRFA
PANA+I92 Page 20 of 37 10/92
Interest Rate Factor Adjustment (cont)
where:
(GAPS) is the General Account Partial Surrender Amount
(GAFS) is the General Account Full Surrender Amount
(GAF) is the General Account Free Surrender Amount
(GAPSC) is the General Account portion of the Partial Surrender Charge Amount
determined as follows:
GAPSC = (GAPS - GAF) X 5% /95%,but not less than zero.
(IRF) is the Interest Rate Factor
(IRFA) is the Interest Rate Factor Adjustment
In the event of a Partial Surrender, there is no Interest Rate Factor Adjustment
if the General Account Free Surrender Amount exceeds the General Account portion
of such Partial Surrender.
Interest Rate Factor
- --------------------
The Interest Rate Factor is determined by the following formula:
(N/12)
(1 + Ta)
------------------------ = IRF
(N/12)
(1.003 + Tb)
where:
(Ta) is the weighted average of the Treasury Index Rates which
correspond to the Purchase Payments and/or transfers allocated to the General
Account during the current Five Year Period. The Treasury Index Rate
corresponding to each such allocation is determined by the number of full years
and fractions thereof (but not less than one year) remaining from the date of
the allocation until the end of the current Five Year Period. For purposes of
determining the average of these rates, each Treasury Index Rate is weighted by
the amount of the corresponding allocation (as adjusted to reflect any Partial
Surrenders and/or transfers from the General Account subsequent to such
allocation). The General Account Balance at the beginning of any Five Year
Period will be treated as a new allocation for purposes of this calculation.
PANA+I92 Page 21 of 37 10/92
Interest Rate Factor (cont)
Each allocation made prior to a Partial Surrender and/or transfer from the
General Account (other than the current surrender) shall be adjusted by
multiplying such allocation by the following fraction:
1 - PS/GAB
Where:
(PS) is the amount of the Partial Surrender and/or transfer from the
General Account made subsequent to the allocation.
(GAB) is the beginning General Account Balance on the date of such
Partial Surrender and/or transfer from the General Account.
(Tb) is the Treasury Index Rate with a maturity equal to the number of
full years and fractions thereof (but not less than one year) remaining in the
current Five Year Period on the date of the Partial or Full Surrender.
(N) is the number of whole months remaining in the current Five Year
Period as of the date of the Partial or Full Surrender (rounded down).
(IRF) is the Interest Rate Factor.
28
<PAGE>
The application of the Interest Rate Factor Adjustment will never cause the
General Account Balance to be in violation of the minimum non forfeiture
requirements of the state in which this Contract is issued.
PANA+I92 Page 22 of 37 10/92
PART 8
GENERAL PROVISIONS
- ------------------
ASSIGNMENT OF THE CONTRACT
- --------------------------
A Written Request specifying the terms of an assignment of this Contract must be
provided to the Annuity Service Center. Until the Written Request is received,
the Company will not be required to take notice of or be responsible for any
transfer of interest in this Contract by assignment, agreement, or otherwise.
The Company will not be responsible for the validity or tax consequences of any
assignment. Any assignment made after the Death Benefit has become payable will
be valid only with Company consent. If this Contract is assigned, the Contract
Owner's rights may only be exercised with the consent of the assignee of
record.
CONTRACT CHANGES BY THE COMPANY
- -------------------------------
The Company reserves the right to amend this Contract to meet the requirements
of any applicable federal or state laws or regulations, or as otherwise provided
in this Contract. The Company will notify the Contract Owner in writing of such
amendments. Any changes to this Contract by the Company must be signed by an
authorized officer of the Company. Agents of the Company have no authority to
alter or modify any of the terms, conditions, agreements of this C Contract, or
to waive any of its provisions.
CONTRACT CHANGES BY THE CONTRACT OWNER
- --------------------------------------
With the consent of the Company, the Contract Owner may, by Written Request:
1. change the Contract Owner;
2. change the Annuity Income Date and/or the
Annuity Option at any time up to thirty (30) calendar days before the current
Annuity Income Date, provided the Annuitant is then living;
3. change the Beneficiary, as provided in Part 6 -
Death Benefit. A change of Contract Owner or of Annuity Income Date will take
effect on the date e the Written Request is received.
CONTRACT TERMINATION
- --------------------
This Contract will terminate upon the occurrence of any of the following events:
1. the date of the last Annuity Income payment;
2. the date payment is made of the Contract Balance;
PANA+I92 Page 23 of 37 10/92
Contract Termination (cont)
3. the date of the last Death Benefit payment to the
last Beneficiary;
4. the date the Contract is returned under the
Right to Examine Contract provision; or
5. failure to main maintain the required Minimum Contract Balance as defined in
Part 2 - Investment Accounts.
INCONTESTABILITY
- ----------------
The Company shall not contest the validity of this Contract.
MISSTATEMENT OF AGE OR SEX
- --------------------------
If the Annuitant's age or sex has been incorrectly stated, the Annuity Income
payable will be that which the Contract Balance, reduced by any applicable
Premium Tax, would have purchased at the correct age and sex. After correction,
the Annuitant will receive the sum of any underpayments made by the Company
within thirty (30) calendar days. The amount of any overpayments made by the
Company will be charged against the payment(s) following the correction.
NONPARTICIPATING
- ----------------
This Contract is nonparticipating and will not share in any surplus earnings of
the Company. No dividends are payable on this Contract .
NON-BUSINESS DAYS
- -----------------
If the due date for any activity required by the Contract falls on a non-
business day for the Company, performance will be rendered on the first business
day following the due date.
REGULATORY REQUIREMENTS
- -----------------------
All interest guarantees, surrender benefits, and amounts payable at death will
not be less than the minimum benefits required by the laws and regulations of
the state in which the Contract is delivered.
RIGHT TO EXAMINE CONTRACT
- -------------------------
No Surrender Charge Interest Rate Factor Adjustment, Contract Maintenance Fee,
or Premium Tax will be applied if the Contract Owner returns the Contract for
cancellation during the first fifteen (15) calendar days following the Contract
Issue Date. The Company will refund the Separate Account Balance and/or any
Purchase Payments made to the General Account upon return of this Contract.
VOTING RIGHTS
- -------------
To the extent required to permit this Contract to qualify under the Investment
Company Act of 1940 (and any subsequent amendments), the Contract Owner has the
right to instruct the Company how to vote the shares of a Portfolio relating to
a Sub-Account in which Purchase Payments are invested.
29
<PAGE>
PANA+I92 Page 24 of 37 10/92
PART 9
ANNUITY PROVISIONS
- ------------------
ANNUITY GUIDELINES
- -------------------
Once the Contract reaches the Annuity Income Date, the following guidelines
apply:
1. The Contract Owner may elect to have the Contract Balance applied to
provide a Variable Annuity, a Fixed Annuity, or a combination Fixed and Variable
Annuity. If a combination is elected, the Contract Owner must specify what part
of the Contract Balance is to be applied to the Fixed and Variable options.
Annuity Option E is not available as a Variable Annuity.
2. The amount applied to an Annuity Option on the Annuity Income Date,
excluding any Death Benefit proceeds applied to an Annuity Option, is equal to
the sum of: (1) the General Account Balance adjusted by the Interest Rate Factor
Adjustment to the extent the General Account Balance is applied to purchase a
Variable Annuity and (2) the Separate Account Balance; minus any applicable
Premium Tax.
3. The minimum amount that may be applied under any Annuity Option, and the
minimum periodic Annuity Income payment allowed, are the most recently published
minimums designated by the Company for this purpose.
ANNUITY PAYMENTS
- ----------------
The Company will pay an Annuity Income beginning on the Annuity Income Date,
provided no Death Benefit has become payable and the Contract Owner has by
Written Request selected an available Annuity Option and payment schedule.
Except as otherwise agreed to by the Contract Owner and the Company, Annuity
Income payments will be payable monthly. The Annuity Option and frequency of
Annuity Income payments may not be changed after Annuity Income payments begin.
Unless the Contract Owner specifies otherwise, the payee of the Annuity Income
shall be the applicable Annuitant. If no Annuity Option has been chosen at least
thirty (30) calendar days before the Annuity Income Date, the Company will make
payments to the Annuitant under Option B, with 120 monthly payments guaranteed.
Unless specified otherwise, the Separate Account Balance shall be used to
provide a Variable Annuity and the General Account Balance shall be used to
provide a Fixed Annuity.
If the amount of the Annuity Income will depend on the age or sex of the
Annuitant, the Company reserves the right to ask for satisfactory proof of the
Annuitant's (or Joint Annuitant's, if any) age and sex. The Company reserves the
right to delay Annuity Income payments until acceptable proof is received.
FIXED ANNUITY
- -------------
A Fixed Annuity provides for payments which do not fluctuate based on investment
performance. The Fixed Annuity shall be determined by applying the Annuity
Purchase Rates set forth in the Fixed Annuity Rate Tables in Part 10 to the
portion of the Contract Balance allocated to the Fixed Annuity Option selected
by the Contract Owner.
PANA+I92 Page 25 of 37 10/92
VARIABLE ANNUITY
- ----------------
A Variable Annuity provides for payments which may fluctuate based on the
investment performance of the Separate Account Sub-Account. Variable Annuity
payments will be based on the allocation of the Contract Balance among the Sub-
Accounts.
Annuity Units and Payments. The dollar amount of each Variable Annuity payment
- --------------------------
depends on the number of Annuity Units credited to that Annuity Option, and the
value of those Units. The number of Annuity Units is determined as follows:
1. The number of Annuity Units credited in each Sub-Account will be
determined by dividing the product of the portion of the Contract Balance to be
applied to the Sub-Account and the Annuity Purchase Rate by the value of one
Annuity Unit in that Sub-Account on the Annuity Income Date. The purchase rates
are set forth in the Variable Annuity Rate Tables in Part 10 of this Contract.
2. For each Sub-Account, the amount of each Annuity Income payment equals
product of the Annuitant's number of Annuity Units and the Annuity Unit Value on
the payment date. The amount of each payment may vary.
Annuity Unit Value. The value of an Annuity Unit in a Sub-Account on any
- ------------------
Valuation Date is determined as follows:
1. The Net Investment Factor for the Valuation Period (for the appropriate
Annuity Income payment frequency) just ended is multiplied by the value of the
Annuity Unit for the Sub-Account on the preceding Valuation Date.
2. The result in (1) is then divided by an interest factor. The interest
factor equals 1.00 plus the interest rate for the number of days since the
preceding Valuation Date. Interest is based on an effective annual rate of 4%.
ANNUITY OPTIONS
- ---------------
The Contract Owner may choose periodic fixed and/or variable Annuity Income
payments under any one of the Annuity Options described below, except Option E,
which shall be available as a Fixed Annuity only. The Company may consent to
other plans of payment before the Annuity Income Date.
The following Annuity Options are available:
Annuity Option A - Life Income
- ----------------
Periodic payments will be made as long as the Annuitant lives.
Annuity Option B - Life Income with Period Certain
- ----------------
Periodic payments will be made for a guaranteed period, or as long as the
Annuitant lives, whichever is longer. The guaranteed period may be five (5), ten
(10) or twenty (20) years.
PANA+I92 Page 26 of 37 10/92
Annuity Options (cont)
30
<PAGE>
Annuity Option C - Joint and Last Survivor Payments
- ----------------
Periodic payments will be made during the joint lifetime of two Annuitants,
continuing in the same amount during the lifetime of the surviving Annuitant.
Annuity Option D - Joint and 2/3 Survivor Annuity
- ----------------
Periodic payments will be made during the joint lifetime of two Annuitants.
Payments will continue during the lifetime of the surviving Annuitant and will
be computed on the basis of two-thirds of the annuity payment (or Units) in
effect during the joint lifetime.
Annuity Option E - Period Certain
- ----------------
(Available as a Fixed Annuity only) Periodic payments will be made for a
specified period. The specified period must be at least five (5) years and
cannot be more than thirty (30) years.
Annuity Option F - Special Income Settlement Agreement
- ----------------
The Company will pay the proceeds in accordance with terms agreed upon in
writing by the Contract Owner and the Company.
PANA+I92 Page 27 of 37 10/92
PART 10
ANNUITY RATES
- -------------
FIXED ANNUITY RATES
- -------------------
Notes to Tables
- ---------------
Table 1 Annuity Options A and B
Table 2 Annuity Option C
Table 3 Annuity Option D
Table 4 Annuity Option E
Note 1: If the single premium immediate annuity rates offered by the
Company and designated by the Company for this purpose on the Annuity Income
Date are more favorable than the minimum guaranteed rates used to develop Tables
1, 2, 3 or 4, those rates will be used.
Note 2: The 1983 Table "a" mortality table, projected to the year 2015
with Projection Scale G, applies to all Annuity Options which include life
contingent payments. Where applicable, unisex mortality rates and projection
factors are based on a 40%/60% male/female weighting.
Note 3: The Annuity Option rates shown in Tables 1, 2, 3, and 4 are
based on an effective annual interest rate of 3%. Note 4: Rates will be
determined based on the actual age(s) of Annuitant(s), in completed years and
months, as of the Annuity Income Date. The tables below show Annuity Option
rates for completed years; rates for intermediate actual ages will be based on
straight line interpolation between the completed years rates for the next
higher and lower completed years.
Note 5: The purchase rate for any age or combination of ages not shown
in the above tables will be calculated on the same basis as the payments for
those shown and may be obtained by Written Request.
PANA+I92 Page 28 of 37 10/92
FIXED ANNUITY RATES
TABLE 1 - OPTIONS A & B
MONTHLY PAYMENT PER $1,000
Life 5 Yrs. 10 Yrs. 20 Yrs. Life 5 Yrs. 10 Yrs. 20 Yrs.
Age Only C&L C&L C&L Only C&L C&L C&L Age
50 3.94 3.93 3.91 3.84 3.64 3.64 3.63 3.60 50
51 4.00 3.99 3.97 3.89 3.69 3.69 3.68 3.64 51
52 4.07 4.06 4.04 3.94 3.74 3.74 3.73 3.69 52
53 4.13 4.13 4.10 4.00 3.80 3.79 3.78 3.74 53
54 4.21 4.20 4.17 4.06 3.85 3.85 3.84 3.79 54
55 4.29 4.28 4.25 4.11 3.92 3.91 3.90 3.84 55
56 4.37 4.36 4.32 4.17 3.98 3.98 3.96 3.90 56
57 4.45 4.44 4.40 4.23 4.05 4.04 4.03 3.95 57
58 4.54 4.53 4.49 4.30 4.12 4.11 4.10 4.01 58
59 4.64 4.63 4.58 4.36 4.20 4.19 4.17 4.07 59
60 4.74 4.73 4.67 4.42 4.28 4.27 4.25 4.13 60
61 4.85 4.84 4.77 4.49 4.36 4.35 4.33 4.20 61
62 4.97 4.95 4.88 4.56 4.45 4.44 4.41 4.27 62
63 5.10 5.07 4.99 4.62 4.55 4.54 4.50 4.33 63
64 5.23 5.20 5.11 4.69 4.65 4.64 4.60 4.40 64
65 5.37 5.34 5.23 4.75 4.76 4.75 4.70 4.47 65
66 5.53 5.49 5.35 4.82 4.88 4.86 4.81 4.55 66
67 5.69 5.64 5.49 4.88 5.00 4.98 4.92 4.62 67
68 5.86 5.81 5.63 4.94 5.13 5.11 5.04 4.69 68
69 6.05 5.98 5.77 5.00 5.28 5.25 5.17 4.76 69
31
<PAGE>
70 6.25 6.17 5.92 5.06 5.43 5.40 5.30 4.83 70
71 6.45 6.36 6.07 5.11 5.60 5.56 5.44 4.90 71
72 6.67 6.56 6.23 5.16 5.77 5.73 5.59 4.97 72
73 6.91 6.78 6.39 5.21 5.97 5.92 5.75 5.03 73
74 7.16 7.00 6.56 5.25 6.18 6.11 5.91 5.09 74
75 7.42 7.24 6.72 5.29 6.40 6.33 6.08 5.15 75
76 7.71 7.49 6.90 5.33 6.64 6.55 6.26 5.20 76
77 8.01 7.76 7.07 5.36 6.90 6.79 6.44 5.25 77
78 8.34 8.04 7.24 5.38 7.17 7.04 6.63 5.29 78
79 8.69 8.33 7.42 5.41 7.47 7.31 6.82 5.32 79
80 9.06 8.64 7.59 5.43 7.79 7.59 7.01 5.36 80
PANA+I92 Page 29 of 37 10/92
FIXED ANNUITY RATES
TABLE 2 - OPTION C
MONTHLY PAYMENT PER $1,000
MALE/FEMALE JOINT AND SURVIVOR ANNUITY
MALE------------------------------FEMALE AGE--------------------------------MALE
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.11 3.18 3.24 3.30 3.34 3.38 3.40 3.42 3.43 3.44 40
45 3.15 3.24 3.33 3.41 3.48 3.54 3.58 3.61 3.63 3.65 45
50 3.18 3.29 3.41 3.52 3.63 3.72 3.79 3.84 3.88 3.90 50
55 3.21 3.33 3.48 3.63 3.77 3.91 4.02 4.11 4.18 4.22 55
60 3.22 3.36 3.53 3.71 3.91 4.10 4.28 4.43 4.55 4.63 60
65 3.24 3.39 3.57 3.78 4.02 4.28 4.55 4.79 4.99 5.14 65
70 3.24 3.40 3.59 3.83 4.11 4.44 4.79 5.16 5.50 5.77 70
75 3.25 3.41 3.61 3.86 4.17 4.55 5.00 5.51 6.01 6.47 75
80 3.25 3.42 3.62 3.88 4.21 4.64 5.16 5.80 6.51 7.22 80
85 3.25 3.42 3.63 3.90 4.24 4.69 5.27 6.03 6.94 7.94 85
MALE(1)/MALE(2) JOINT AND SURVIVOR ANNUITY
MALE(1)--------------------------MALE(2) AGE-----------------------------MALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.17 3.24 3.29 3.33 3.37 3.40 3.41 3.43 3.44 3.44 40
45 3.24 3.32 3.40 3.47 3.53 3.57 3.60 3.63 3.64 3.65 45
50 3.29 3.40 3.51 3.61 3.70 3.77 3.83 3.87 3.89 3.91 50
55 3.33 3.47 3.61 3.75 3.89 4.00 4.09 4.16 4.21 4.24 55
60 3.37 3.53 3.70 3.89 4.07 4.25 4.40 4.52 4.60 4.66 60
65 3.40 3.57 3.77 4.00 4.25 4.50 4.73 4.93 5.09 5.20 65
70 3.41 3.60 3.83 4.09 4.40 4.73 5.08 5.40 5.67 5.88 70
75 3.43 3.63 3.87 4.16 4.52 4.93 5.40 5.87 6.31 6.67 75
80 3.44 3.64 3.89 4.21 4.60 5.09 5.67 6.31 6.96 7.57 80
85 3.44 3.65 3.91 4.24 4.66 5.20 5.88 6.67 7.57 8.48 85
FEMALE(1)/FEMALE(2) JOINT AND SURVIVOR ANNUITY
FEMALE(1)-------------------------FEMALE(2) AGE----------------------- FEMALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.06 3.11 3.15 3.19 3.21 3.23 3.24 3.25 3.25 3.25 40
45 3.11 3.19 3.25 3.30 3.34 3.37 3.39 3.40 3.41 3.42 45
50 3.15 3.25 3.34 3.42 3.49 3.54 3.58 3.60 3.62 3.63 50
55 3.19 3.30 3.42 3.54 3.64 3.73 3.79 3.84 3.87 3.89 55
60 3.21 3.34 3.49 3.64 3.79 3.93 4.05 4.13 4.19 4.23 60
65 3.23 3.37 3.54 3.73 3.93 4.13 4.32 4.47 4.59 4.66 65
70 3.24 3.39 3.58 3.79 4.05 4.32 4.60 4.86 5.06 5.21 70
75 3.25 3.40 3.60 3.84 4.13 4.47 4.86 5.25 5.62 5.91 75
80 3.25 3.41 3.62 3.87 4.19 4.59 5.06 5.62 6.18 6.70 80
85 3.25 3.42 3.63 3.89 4.23 4.66 5.21 5.91 6.70 7.52 85
PANA+I92 Page 30 of 37 10/92
FIXED ANNUITY RATES
TABLE 3 - OPTION D
MONTHLY PAYMENT PER $1,000
32
<PAGE>
MALE/FEMALE JOINT AND 2/3 ANNUITY
MALE-------------------------------FEMALE AGE-------------------------------MALE
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.21 3.26 3.31 3.35 3.38 3.40 3.42 3.43 3.44 3.44 40
45 3.30 3.37 3.43 3.49 3.54 3.58 3.61 3.63 3.64 3.65 45
50 3.40 3.48 3.57 3.65 3.73 3.79 3.84 3.87 3.90 3.91 50
55 3.50 3.60 3.71 3.82 3.93 4.03 4.11 4.17 4.21 4.24 55
60 3.61 3.73 3.86 4.00 4.15 4.30 4.43 4.53 4.61 4.67 60
65 3.73 3.86 4.02 4.19 4.39 4.59 4.79 4.97 5.11 5.22 65
70 3.86 4.01 4.19 4.40 4.64 4.91 5.20 5.48 5.73 5.92 70
75 4.00 4.16 4.36 4.60 4.89 5.23 5.61 6.03 6.42 6.76 75
80 4.14 4.31 4.53 4.80 5.13 5.54 6.03 6.59 7.19 7.74 80
85 4.27 4.46 4.69 4.99 5.36 5.83 6.42 7.14 7.97 8.82 85
MALE(1)/MALE(2) JOINT AND 2/3 ANNUITY
MALE(1)----------------------------MALE(2)AGE----------------------------MALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.26 3.30 3.34 3.37 3.40 3.41 3.43 3.44 3.44 3.45 40
45 3.37 3.43 3.48 3.53 3.57 3.60 3.62 3.64 3.65 3.65 45
50 3.48 3.56 3.64 3.71 3.78 3.83 3.86 3.89 3.91 3.92 50
55 3.60 3.71 3.81 3.92 4.01 4.09 4.16 4.20 4.23 4.26 55
60 3.73 3.86 3.99 4.14 4.27 4.40 4.51 4.59 4.65 4.69 60
65 3.87 4.02 4.19 4.37 4.57 4.76 4.93 5.07 5.18 5.26 65
70 4.02 4.19 4.40 4.63 4.88 5.15 5.42 5.65 5.85 6.00 70
75 4.18 4.37 4.60 4.88 5.19 5.55 5.94 6.31 6.64 6.91 75
80 4.33 4.55 4.81 5.12 5.50 5.96 6.48 7.02 7.54 8.01 80
85 4.48 4.72 5.00 5.36 5.80 6.34 7.00 7.73 8.51 9.26 85
FEMALE(1)/FEMALE(2) JOINT AND 2/3 ANNUITY
FEMALE(1)-------------------------FEMALE(2)AGE-------------------------FEMALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.12 3.16 3.19 3.21 3.23 3.24 3.24 3.25 3.25 3.25 40
45 3.21 3.26 3.31 3.34 3.37 3.39 3.40 3.41 3.42 3.42 45
50 3.30 3.37 3.43 3.49 3.54 3.57 3.60 3.61 3.63 3.63 50
55 3.40 3.48 3.57 3.66 3.73 3.79 3.83 3.87 3.89 3.90 55
60 3.50 3.60 3.72 3.83 3.94 4.04 4.12 4.18 4.22 4.24 60
65 3.61 3.73 3.87 4.02 4.17 4.32 4.46 4.57 4.64 4.69 65
70 3.74 3.88 4.04 4.22 4.42 4.64 4.85 5.03 5.18 5.29 70
75 3.88 4.03 4.22 4.43 4.69 4.97 5.28 5.59 5.86 6.06 75
80 4.03 4.20 4.40 4.65 4.95 5.31 5.73 6.19 6.64 7.03 80
85 4.19 4.37 4.59 4.87 5.22 5.65 6.18 6.81 7.49 8.16 85
PANA+I92 Page 31 of 37 10/92
FIXED ANNUITY RATES
TABLE 4 - OPTION E
MONTHLY PAYMENT PER $1000
YEARS MONTHLY INCOME
5 $17.91
6 15.14
7 13.16
8 11.68
9 10.53
10 9.61
11 8.86
12 8.24
13 7.71
14 7.26
15 6.87
16 6.53
17 6.23
18 5.96
19 5.73
20 5.51
33
<PAGE>
21 5.32
22 5.15
23 4.99
24 4.84
25 4.71
26 4.59
27 4.47
28 4.37
29 4.27
30 4.18
PANA+I92 Page 32 of 37 10/92
VARIABLE ANNUITY RATES
- ----------------------
Notes to Tables
- ---------------
Table 5 Annuity Options A and B
Table 6 Annuity Option C
Table 7 Annuity Option D
Note 1: The 1983 Table "a" mortality table, projected to the year 2015 with
Projection Scale G, applies to all Annuity Options which include life contingent
payments. Where applicable, unisex mortality rates and projection factors are
based on a 40%/60% male/female weighting.
Note 2: The Annuity Option rates shown in Tables 5, 6 and 7 are based on an
assumed effective annual interest rate of 4%.
Note 3: Rates will be determined based on the actual age(s) of Annuitant(s),
in completed years and months, as of the Annuity Income Date. The tables below
show Annuity Option rates for completed years; rates for intermediate actual
ages will be based on straight line interpolation between the completed years
rates for the next higher and lower completed years.
Note 4: The purchase rate for any age or combination of ages not shown in the
above tables will be calculated on the same basis as the payments for those
shown and may be obtained by Written Request.
PANA+I92 Page 33 of 37 10/92
VARIABLE ANNUITY RATES
<TABLE>
<CAPTION>
TABLE 5 - OPTION A & B
MONTHLY PAYMENT PER $1,000
- -------------------- Male ------------------ ----------------- Female ----------------
Life 5 Yrs. 10 Yrs. 20 Yrs. Life 5 Yrs. 10 Yrs. 20 Yrs.
Age Only C&L C&L C&L Only C&L C&L C&L Age
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 4.53 4.53 4.51 4.42 4.24 4.24 4.23 4.19 50
51 4.60 4.59 4.56 4.47 4.29 4.29 4.28 4.23 51
52 4.66 4.65 4.63 4.52 4.34 4.33 4.32 4.28 52
53 4.73 4.72 4.69 4.57 4.39 4.39 4.38 4.32 53
54 4.80 4.79 4.76 4.62 4.45 4.44 4.43 4.37 54
55 4.88 4.86 4.83 4.68 4.51 4.50 4.49 4.42 55
56 4.95 4.94 4.90 4.74 4.57 4.56 4.54 4.47 56
57 5.04 5.02 4.98 4.79 4.63 4.63 4.61 4.52 57
58 5.13 5.11 5.06 4.85 4.70 4.70 4.67 4.58 58
59 5.22 5.21 5.15 4.91 4.78 4.77 4.74 4.64 59
60 5.33 5.31 5.24 4.97 4.86 4.85 4.82 4.70 60
61 5.44 5.41 5.34 5.04 4.94 4.93 4.90 4.76 61
62 5.55 5.53 5.44 5.10 5.03 5.02 4.98 4.82 62
63 5.68 5.65 5.55 5.16 5.12 5.11 5.07 4.89 63
64 5.81 5.78 5.67 5.22 5.22 5.21 5.16 4.95 64
65 5.96 5.91 5.79 5.28 5.33 5.31 5.26 5.02 65
66 6.11 6.06 5.91 5.35 5.45 5.43 5.37 5.09 66
67 6.27 6.22 6.04 5.40 5.57 5.55 5.48 5.15 67
68 6.45 6.38 6.18 5.46 5.70 5.68 5.60 5.22 68
69 6.63 6.55 6.32 5.52 5.85 5.82 5.72 5.29 69
70 6.83 6.74 6.46 5.57 6.00 5.96 5.85 5.36 70
71 7.04 6.93 6.61 5.62 6.16 6.12 5.99 5.42 71
72 7.26 7.13 6.77 5.67 6.34 6.29 6.14 5.49 72
73 7.50 7.34 6.92 5.71 6.54 6.48 6.29 5.55 73
74 7.75 7.57 7.09 5.76 6.74 6.67 6.45 5.60 74
75 8.02 7.81 7.25 5.79 6.97 6.89 6.62 5.66 75
</TABLE>
34
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
76 8.30 8.06 7.42 5.83 7.22 7.11 6.79 5.71 76
77 8.61 8.32 7.59 5.86 7.47 7.35 6.97 5.75 77
78 8.94 8.60 7.76 5.88 7.75 7.60 7.15 5.79 78
79 9.29 8.89 7.93 5.90 8.05 7.87 7.34 5.82 79
80 9.66 9.20 8.10 5.92 8.37 8.15 7.53 5.86 80
</TABLE>
PANA+I92 Page 34 of 37 10/92
VARIABLE ANNUITY RATES
<TABLE>
<CAPTION>
TABLE 6 - OPTION C
MONTHLY PAYMENT PER $1,000
MALE/FEMALE JOINT AND SURVIVOR ANNUITY
MALE ---------------------------------- FEMALE AGE ------------------------------- MALE
AGE 40 45 50 55 60 65 70 75 80 85 AGE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.73 3.80 3.86 3.91 3.95 3.98 4.01 4.03 4.05 4.05 40
45 3.77 3.85 3.93 4.01 4.08 4.13 4.18 4.21 4.23 4.25 45
50 3.80 3.90 4.01 4.11 4.21 4.30 4.37 4.43 4.47 4.49 50
55 3.83 3.94 4.07 4.21 4.35 4.48 4.59 4.69 4.76 4.80 55
60 3.84 3.97 4.12 4.29 4.48 4.66 4.84 4.99 5.11 5.20 60
65 3.86 3.99 4.16 4.36 4.59 4.84 5.10 5.34 5.54 5.70 65
70 3.87 4.01 4.19 4.41 4.68 4.99 5.34 5.70 6.04 6.31 70
75 3.87 4.02 4.21 4.44 4.74 5.11 5.55 6.04 6.55 7.01 75
80 3.88 4.03 4.22 4.47 4.79 5.19 5.71 6.34 7.04 7.75 80
85 3.88 4.03 4.23 4.48 4.81 5.25 5.82 6.57 7.47 8.47 85
<CAPTION>
MALE(1)/MALE(2) JOINT AND SURVIVOR ANNUITY
MALE(1)------------------------------- MALE(2) AGE --------------------------------MALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.79 3.85 3.90 3.94 3.98 4.01 4.03 4.04 4.05 4.06 40
45 3.85 3.93 4.00 4.07 4.12 4.17 4.20 4.23 4.24 4.25 45
50 3.90 4.00 4.10 4.20 4.28 4.36 4.41 4.45 4.48 4.50 50
55 3.94 4.07 4.20 4.33 4.46 4.57 4.67 4.74 4.79 4.82 55
60 3.98 4.12 4.28 4.46 4.64 4.81 4.96 5.08 5.17 5.23 60
65 4.01 4.17 4.36 4.57 4.81 5.05 5.28 5.48 5.65 5.76 65
70 4.03 4.20 4.41 4.67 4.96 5.28 5.62 5.94 6.22 6.43 70
75 4.04 4.23 4.45 4.74 5.08 5.48 5.94 6.40 6.84 7.22 75
80 4.05 4.24 4.48 4.79 5.17 5.65 6.22 6.84 7.50 8.11 80
85 4.06 4.25 4.50 4.82 5.23 5.76 6.43 7.22 8.11 9.02 85
<CAPTION>
FEMALE(1)/FEMALE(2) JOINT AND SURVIVOR ANNUITY
FEMALE(1)---------------------------- FEMALE(2) AGE -----------------------------FEMALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.69 3.74 3.78 3.81 3.83 3.85 3.86 3.87 3.87 3.88 40
45 3.74 3.80 3.86 3.91 3.95 3.98 4.00 4.01 4.02 4.03 45
50 3.78 3.86 3.94 4.02 4.08 4.13 4.17 4.19 4.21 4.22 50
55 3.81 3.91 4.02 4.12 4.22 4.31 4.37 4.42 4.45 4.48 55
60 3.83 3.95 4.08 4.22 4.37 4.50 4.61 4.70 4.76 4.80 60
65 3.85 3.98 4.13 4.31 4.50 4.69 4.87 5.03 5.14 5.22 65
70 3.86 4.00 4.17 4.37 4.61 4.87 5.14 5.40 5.61 5.76 70
75 3.87 4.01 4.19 4.42 4.70 5.03 5.40 5.79 6.15 6.45 75
80 3.87 4.02 4.21 4.45 4.76 5.14 5.61 6.15 6.71 7.23 80
85 3.88 4.03 4.22 4.48 4.80 5.22 5.76 6.45 7.23 8.05 85
</TABLE>
PANA+I92 Page 35 of 37 10/92
VARIABLE ANNUITY RATES
<TABLE>
<CAPTION>
TABLE 7 - OPTION D
MONTHLY PAYMENT PER $1,000
MALE/FEMALE JOINT AND 2/3 ANNUITY
MALE ----------------------------- FEMALE AGE -------------------------------------MALE
AGE 40 45 50 55 60 65 70 75 80 85 AGE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.84 3.88 3.92 3.96 3.99 4.01 4.03 4.04 4.05 4.06 40
45 3.93 3.98 4.04 4.09 4.14 4.18 4.21 4.23 4.25 4.26 45
50 4.02 4.09 4.17 4.24 4.31 4.37 4.42 4.46 4.49 4.51 50
55 4.12 4.21 4.31 4.41 4.51 4.60 4.68 4.75 4.79 4.83 55
60 4.24 4.34 4.46 4.59 4.73 4.86 4.99 5.10 5.18 5.24 60
</TABLE>
35
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
65 4.37 4.49 4.62 4.79 4.97 5.16 5.35 5.53 5.67 5.78 65
70 4.52 4.65 4.81 5.00 5.23 5.48 5.76 6.04 6.28 6.48 70
75 4.68 4.82 5.00 5.22 5.49 5.81 6.18 6.58 6.97 7.31 75
80 4.84 5.00 5.20 5.44 5.75 6.14 6.61 7.16 7.74 8.30 80
85 5.01 5.18 5.39 5.66 6.01 6.46 7.03 7.73 8.54 9.38 85
<CAPTION>
MALE(1)/MALE(2) JOINT AND 2/3 ANNUITY
MALE(1) ------------------------- MALE(2) AGE -------------------------------------MALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.88 3.92 3.96 3.99 4.01 4.03 4.04 4.05 4.06 4.06 40
45 3.98 4.04 4.09 4.13 4.17 4.20 4.22 4.24 4.25 4.26 45
50 4.09 4.17 4.24 4.31 4.36 4.41 4.45 4.48 4.50 4.51 50
55 4.21 4.31 4.40 4.50 4.59 4.67 4.73 4.78 4.82 4.84 55
60 4.35 4.46 4.58 4.71 4.85 4.97 5.07 5.16 5.22 5.26 60
65 4.50 4.63 4.78 4.96 5.14 5.32 5.49 5.63 5.74 5.83 65
70 4.67 4.82 5.00 5.22 5.46 5.72 5.98 6.21 6.41 6.56 70
75 4.84 5.02 5.23 5.48 5.78 6.13 6.50 6.86 7.19 7.47 75
80 5.02 5.22 5.46 5.76 6.12 6.55 7.06 7.58 8.10 8.57 80
85 5.20 5.42 5.68 6.02 6.44 6.96 7.60 8.32 9.08 9.82 85
<CAPTION>
FEMALE(1)/FEMALE(2) JOINT AND 2/3 ANNUITY
FEMALE(1) ---------------------------FEMALE(2) AGE-------------------------------FEMALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.76 3.79 3.81 3.83 3.85 3.86 3.87 3.87 3.88 3.88 40
45 3.83 3.88 3.92 3.95 3.98 4.00 4.01 4.02 4.03 4.03 45
50 3.92 3.98 4.04 4.09 4.13 4.17 4.19 4.21 4.22 4.23 50
55 4.01 4.09 4.17 4.24 4.31 4.37 4.42 4.45 4.47 4.49 55
60 4.12 4.21 4.31 4.42 4.52 4.61 4.69 4.75 4.79 4.82 60
65 4.24 4.35 4.47 4.60 4.75 4.89 5.02 5.12 5.20 5.26 65
70 4.38 4.50 4.64 4.81 5.00 5.20 5.40 5.59 5.73 5.84 70
75 4.54 4.67 4.84 5.04 5.27 5.54 5.84 6.14 6.40 6.61 75
80 4.72 4.87 5.05 5.28 5.56 5.90 6.30 6.75 7.19 7.58 80
85 4.90 5.07 5.27 5.53 5.85 6.26 6.77 7.39 8.05 8.71 85
</TABLE>
PANA+I92 Page 36 of 37 10/92
PANORAMA PLUS
FIXED AND VARIABLE DEFERRED ANNUITY CONTRACT
Single or Periodic Purchase Payments
Nonparticipating
PAYMENTS AND VALUES PROVIDED BY THE SEPARATE ACCOUNT PORTION OF THIS CONTRACT
ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
PANA+I92 Page 37 of 37 10/92
C.M. Life Insurance Company
140 Garden Street
Hartford, CT 06154
Participant:
Certificate Number:
Certificate Issue Date:
Annuity Income Date:
Annuitant: Age and Sex:
Contingent Annuitant:
C.M. Life Insurance Company (Company) has issued a Group Annuity Contract
(Contract) to (Contractholder).
This Certificate is subject to the conditions and provisions of the Contract.
The Company will pay the benefits provided by the Contract as described in this
Certificate.
This Certificate is issued by the Company at its Home Office, 140 Garden Street,
Hartford, Connecticut, 06154, on the Certificate Issue Date.
READ YOUR CERTIFICATE CAREFULLY
SECRETARY PRESIDENT
REGISTRAR
36
<PAGE>
RIGHT TO EXAMINE CERTIFICATE: This Certificate may be returned to the Company
for any reason within fifteen (15) calendar days after the Certificate Issue
Date. Upon its return, the Company will refund the Separate Account Balance
and/or any Purchase Payments made to the General Account of this Certificate.
PANORAMA PLUS
FIXED AND VARIABLE DEFERRED ANNUITY CERTIFICATE
Single or Periodic Purchase Payments
Nonparticipating
PAYMENTS AND VALUES PROVIDED BY THE SEPARATE ACCOUNT PORTION OF THIS CERTIFICATE
ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
PANA+C92 4/92
37
<PAGE>
CERTIFICATE SCHEDULE
- --------------------
Revision Date:
CERTIFICATE SPECIFICS
- ---------------------
Contract Number: Certificate Number:
Participant:
Annuitant: Age and Sex:
Contingent Annuitant:
Beneficiary:
Annuity Option Selected:
- --------------------------------------------------------------------------------
INITIAL PURCHASE PAYMENT ALLOCATION
- -----------------------------------
Investment Accounts Percentage
- ------------------- ----------
General Account
--------
Separate Account - Sub-Accounts
Growth Portfolio Sub-Account
----------
International Equity Sub-Account
--------
Money Market Sub-Account
--------
Income Portfolio Sub-Account
--------
Total Return Sub-Account
--------
Government Securities Sub-Account
--------
- --------------------------------------------------------------------------------
- --------------
FEES AND CHARGES
- ----------------
The current annual Certificate Maintenance Fee is $30. The maximum annual
Certificate Maintenance Fee will not exceed $60. The current Mortality and
Expense Risk Charge is 1.07% and the current Administrative Expense Charge is
.07%. The maximum Mortality and Expense Risk Charge will not exceed 1.25%
annually, and together with the Administrative Expense Charge, will not exceed
1.5% annually or .004109% daily.
- --------------------------------------------------------------------------------
- --------------
Annuity Service Center
Old State House Station
P. O. Box 231259
Hartford, CT 06123
PANA+C92 4/92
38
<PAGE>
TABLE OF CONTENTS
- -----------------
Page
- ----------------------------------------------------------------------
CERTIFICATE
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
PART 1 DEFINITIONS.............................................5
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
PART 2 INVESTMENT ACCOUNTS.....................................9
General Account
General Account Balance
Separate Account
Separate Account Balance
Separate Account Valuation
Accumulation Units
Accumulation Unit Value
Net Investment Factor
Valuation Date
Valuation Period
Minimum Certification Balance
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
PART 3 PURCHASE PAYMENTS......................................11
Purchase Payment Guidelines
Allocation of Purchase Payments
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
PART 4 TRANSFERS..............................................12
Accumulation Period Transfers
Annuity Period Transfers
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
PART 5 PARTIAL AND FULL SURRENDERS............................14
Surrender Guidelines
Partial Surrender
Full Surrender
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
PART 6 DEATH BENEFITS 15
Death Benefit - Accumulation Period
Death of the Participant
Death of the Annuitant
Death of the Participant/Annuitant
Death Benefit Options
Death of Annuitant - Annuity Period
Beneficiary
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
PART 7 FEES AND CHARGES.......................................19
Certificate Maintenance Fee
Surrender Charge
Free Surrender
Interest Rate Factor Adjustment
PANA+C92 4/92
39
<PAGE>
- -------------------------------------------------------------------
PART 8 GENERAL PROVISIONS......................................23
Assignment of the Certificate
Certificate Changes by the Company
Certificate Changes by the Participant
Certificate Termination
Incontestability
Misstatement of Age or Sex
Nonparticipating
Non-Business Days
Regulatory Requirements
Right to Examine Certificate
Voting Rights
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
PART 9 ANNUITY PROVISIONS......................................25
Annuity Guidelines
Annuity Payments
Fixed Annuity
Variable Annuity
Annuity Units and Payments
Annuity Unit Value
Annuity Options
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
PART 10 ANNUITY RATES...........................................28
Annuity Option Rates
PANA+C92 4/92
40
<PAGE>
PART 1
DEFINITIONS
- -----------
ACCUMULATION The period from the Certificate Issue Date through the day
PERIOD preceding the the Annuity Income Date.
ACCUMULATION UNIT A unit of measure used to determine the value of the
Participant's interest in a Sub-Account of the Separate Account during the
Accumulation Period.
ANNUITANT The primary person upon whose life the Annuity
Income payments are to be made. On or after the Annuity Income Date, the
Annuitant shall also include any joint Annuitant.
*ANNUITY INCOME The date on which the payment of Annuity Income begins. The
DATE earliest Annuity Income Date which may be elected is the
fifth anniversary of the Certificate Issue Date. The latest
Annuity Income Date which may be elected is the Annuitant's
85th birthday.
ANNUITY INCOME The payments that will begin on the Annuity Income Date.
The amount of Annuity Income payments will be based on the
Certificate Balance and the age(s) and sex(es) of the
Annuitant (and joint Annuitant if Annuity Option C or D is
elected) as well as on the Annuity Option selected.
ANNUITY OPTIONS Options available for payment of Annuity Income.
ANNUITY PERIOD The period which begins on the Annuity Income Date and ends
with the last Annuity Income payment.
ANNUITY SERVICE The office indicated on the Certificate Schedule of this
CENTER Certificate to which notices, requests and Purchase
Payments must be sent. All sums payable by the Company
under this Certificate are payable only at the Annuity
Service Center.
ANNUITY UNIT A unit of measure used to determine the amount of each
Variable Annuity Income payment.
APPLICATION The document signed by the Participant that evidences the
Participant's application for this Certificate.
* BENEFICIARY The person(s) designated to receive the Death Benefit
provided by this Certificate.
CERTIFICATE The sum of the General Account Balance and the Separate
BALANCE Account Balance.
CERTIFICATE ISSUE The date on which the Certificate becomes effective.
DATE
* As specified in the Application, unless changed by Written Request in
accordance with the provisions of this Certificate.
PANA+C92 Page 5 of 37 4/92
CERTIFICATE YEAR The first Certificate Year is the annual period which
begins on the Certificate Issue Date. Subsequent Certificate Years begin on each
anniversary of the Certificate Issue Date.
CONTINGENT The person designated to receive all the benefits
ANNUITANT otherwise due the Annuitant if the Annuitant dies before
the Annuity Income Date, provided such person is less than
85 years of age on the Annuitant's date of death.
DEATH BENEFIT The payment(s) that will be made to the Beneficiary upon
the death of the Participant or the Annuitant as explained in Part 6 - Death
Benefit.
FIVE YEAR PERIOD Any of the successive five year periods which begin on the
date of the initial Purchase Payment to the General Account.
FIXED ANNUITY An annuity with payments which do not vary as to dollar
amount based on investment performance.
GENERAL ACCOUNT The portion of the Investment Accounts which is credited
with the Guaranteed Interest Rate and which is not held as part of a Separate
Account.
GENERAL ACCOUNT The value of the General Account during the Accumulation
BALANCE Period, determined as described in Part 2 - Investment
Accounts.
GUARANTEED The effective annual interest rate which the Company will
INTEREST RATE credit on the General Account Balance. The Guaranteed
Interest Rate will initially be reset quarterly and will
never be less than 3%.
41
<PAGE>
INVESTMENT The General Account and Separate Account available for
allocation of Purchase Payments under this Certificate.
NET PURCHASE A Purchase Payment less any Premium Tax.
PAYMENT
*PARTICIPANT The person or entity entitled to the ownership rights
stated in the Certificate.
PREMIUM TAX A tax imposed by certain states when a Purchase Payment
is made, when Annuity Income begins, or when the Certificate is surrendered.
PURCHASE PAYMENT A payment made by or on behalf of a Participant with
respect to this Certificate. * As specified in the Application, unless changed
by Written Request in accordance with the provisions of this Certificate.
PANA+C92 Page 6 of 37 4/92
REVISION DATE The date of any revised Certificate Schedule. A revised
Certificate Schedule bearing the latest Revision Date will supersede all
previous Certificate Schedules.
SEPARATE ACCOUNT The Company's Panorama Plus Separate Account, which
consists of assets set aside by the Company the investment performance of which
is kept separate from that of the general assets and all other separate account
assets of the Company. The assets of the Separate Account will not be charged
with liabilities arising out of any other business the Company may conduct.
SEPARATE ACCOUNT The value of this Certificate's share of the Separate
BALANCE Account during the Accumulation Period, determined as
described in Part 2 - Investment Accounts.
SERIES FUND I Panorama Series Fund I, Inc., which is a diversified open-end
management investment company which offers investment alternatives through a
number of separate classes of shares, each referred to as Portfolio and
collectively as the Portfolios. Each Portfolio is managed for investment
purposes as if it were a separate investment company issuing its own shares.
SUB-ACCOUNT Separate Account assets are divided into Sub-Accounts which are
listed in the Certificate Schedule. Assets of each Sub-Account will be invested
in shares of a corresponding Portfolio of Series Fund I. The Company reserves
the right to change investment companies or to substitute other investments for
Series Fund I shares in accordance with the applicable provisions of the
Investment Company Act of 1940, as amended.
TREASURY INDEX The annual interest rates payable on Treasury Securities
RATES with 1 - year, 2 - year, 3 - year and 5 - year maturities,
published weekly by the Federal Reserve. Index Rates for
intermediate periods shall be interpolated from the
applicable interest rates.
VALUATION DATE Every day on which the Company and the New York Stock
Exchange ("NYSE") are open for business, except any day on which trading on the
NYSE is restricted, or on which an emergency exists, as determined by the
Securities and Exchange Commission ("SEC") or respective governing bodies of
the NYSE so that valuation or disposal of securities is not practicable.
VALUATION PERIOD The period of time beginning on the day following any
Valuation Date and ending on the next Valuation Date. A Valuation Period may be
one day or more than one day.
VARIABLE ANNUITY An annuity with payments which vary as to dollar amount
in relation to the investment performance of specified Sub-Accounts of the
Separate Account.
PANA+C92 Page 7 of 37 (Rev. 5/96)
WINDOW PERIOD The last thirty (30) calendar days of each Five Year
Period. During a Window Period, part or all of the General Account Balance may
be transferred to any Sub-Account of the Separate Account or surrendered
without incurring a Surrender Charge or an Interest Rate Factor Adjustment (See
Part 7 - Fees and Charges). Also, part or all of the Separate Account Balance
may be surrendered without incurring a Surrender Charge during the Window
Period.
WRITTEN REQUEST A request in writing, in a form satisfactory to the
Company, which is received by the Annuity Service Center.
PANA+C92 Page 8 of 37 4/92
PART 2
INVESTMENT ACCOUNTS
-------------------
GENERAL ACCOUNT
---------------
The General Account is the portion of the Investment Accounts which is credited
with the Guaranteed Interest Rate and which is not held as part of a Separate
Account. It is part of the general assets of the Company.
General Account Balance
-----------------------
The General Account Balance is equal to the amounts allocated to the General
Account under this Certificate (including Net Purchase Payments, transfers in
and credited interest) less all withdrawals from the General Account (including
any surrenders,
42
<PAGE>
transfers out and deductions for fees and charges) on the applicable date. The
Company agrees to credit interest to the General Account Balance as follows:
Prior to the beginning of each calendar quarter, the Company will determine the
Guaranteed Interest Rate for the next calendar quarter. The General Account
Balance will be credited daily, from day after deposit through day of
withdrawal, with the daily equivalent of the Guaranteed Interest Rate for the
applicable calendar quarter. This rate will be expressed as an annual effective
rate and will never be less than 3%. The Company reserves the right to reset the
Guaranteed Interest Rate more or less frequently than quarterly.
SEPARATE ACCOUNT
- ----------------
The Separate Account is the Company's Panorama Plus Separate Account, which
consists of assets set aside by the Company, the investment performance of which
is kept separate from that of the general assets and all other separate account
assets of the Company. The assets of the Separate Account will not be charged
with liabilities arising out of any other business the Company may conduct.
The Separate Account assets are divided into Sub-Accounts which are listed in
the Certificate Schedule. Assets of each Sub-Account will be invested in shares
of a corresponding Portfolio of Series Fund I. The Company reserves the right to
eliminate or add Sub-Accounts or to change investment companies or to substitute
other investments for Series Fund I shares.
Separate Account Balance
- ------------------------
The Separate Account Balance will consist of the sum of the value of all
Accumulation Units in all Sub-Accounts credited to this Certificate on the
applicable Valuation Date.
Separate Account Valuation
- --------------------------
Accumulation Units. Accumulation Units shall be used to account for all amounts
- ------------------
allocated to or withdrawn from the Separate Account as a result of Purchase
Payments, surrenders, transfers, or fees and charges. The Company will determine
the number of Accumulation Units of a Sub-Account purchased or cancelled. This
will be done by dividing the amount allocated to (or the amount withdrawn from)
the Sub-Account by the dollar value of one Accumulation Unit of the Sub-Account
as of the end of the Valuation Period during which the allocation is made.
PANA+C92 Page 9 of 37 4/92
Accumulation Unit Value. The value of an Accumulation Unit in a Sub-Account on
any Valuation Date is the product of (a) and (b).
(a) The value on the preceding Valuation Date.
(b) The Net Investment Factor for the Sub-Account for the Valuation Period
just ended.
Net Investment Factor. The Company calculates the Net Investment Factor for each
Sub-Account as follows:
(ENAV + DIV - TAX)/BNAV - CHGS = Net Investment Factor
Where:
(ENAV) ending net asset value, i.e., the net asset value per share of the
Sub-Account's investment in the appropriate Portfolio of Series Fund I for the
Valuation Period just ended.
(DIV) dividends, i.e., any dividend per share declared on behalf
of such Portfolio that has an ex-dividend date within the Valuation Period just
ended. This includes both income and capital gain dividends.
(TAX) taxes, i.e., the reserve for taxes per share on realized and
unrealized capital gains or losses of such Portfolio within the Valuation Period
just ended (a negative number represents a tax credit).
(BNAV) beginning net asset value, i.e., the net asset value per
share of the Sub-Account's investment in such Portfolio of the Series Fund I at
the beginning of the Valuation Period just ended.
(CHGS) applicable charges, i.e., the accumulated Mortality and
Expense Risk Charge and Administrative Expense Charge for each day in the
Valuation Period just ended (specified in the Certificate Schedule).
Valuation Date. A Valuation Date shall be every day on which the Company and the
- --------------
New York Stock Exchange ("NYSE") are open for business, but shall not include
any day on which trading on the NYSE is restricted, or on which an emergency
exists, as determined by the Securities and Exchange Commission and/or
respective governing bodies of the NYSE so that valuation or disposal of
securities is not practicable.
Valuation Period. The period of time beginning on the day following any
- ----------------
Valuation Date and ending on the next Valuation Date. A Valuation Period may be
one day or more than one day.
MINIMUM CERTIFICATE BALANCE
- ---------------------------
A minimum Certificate Balance of $250 must be maintained during the Accumulation
Period. If the Participant fails to maintain the minimum Certificate Balance,
the Company will terminate the Certificate, and return the Certificate Balance,
minus any applicable fees and charges, to the Participant (See Part 7 - Fees and
Charges).
PANA+C92 Page 10 of 37 4/92
PART 3
PURCHASE PAYMENTS
- -----------------
PURCHASE PAYMENT GUIDELINES
- ---------------------------
During the Accumulation Period and before a Death Benefit has become payable,
the Company will accept Purchase Payments at the Annuity Service Center subject
to the following:
1. For Annuitants who are younger than age 76 as of the Certificate Issue
Date: the initial Purchase Payment must
43
<PAGE>
be at least $500; any one subsequent Purchase Payment must be at least $100; and
cumulative Purchase Payments may not exceed $1,000,000; or
2. For Annuitants who are age 76 or older as of the Certificate Issue Date:
the initial Purchase Payment must be at least $500; any one subsequent Purchase
Payment must be at least $100; and cumulative Purchase Payments may not exceed
$500,000.
3. Except during the Window Period when no limits are applicable, the
General Account Purchase Payments for any Certificate Year after the first
Certificate Year are limited to the greater of: (a) 125% of average annual
Purchase Payments made to the General Account during the prior five (5) full
Certificate Years (or all years if less than five (5)); or (b) $1,000.
ALLOCATION OF PURCHASE PAYMENTS
- -------------------------------
Purchase Payments will be allocated to the General Account and/or any
Sub-Account(s) of the Separate Account (See Part 2 Investment Accounts) in
accordance with the initial allocation specified in the Application. If the
Participant fails to specify how Purchase Payments are to be allocated, the
Purchase Payment(s) cannot be accepted. Allocation changes for subsequent
Purchase Payments may be made by Written Request of the Participant. Allocation
changes will apply to Purchase Payments received with the Written Request, and
thereafter.
If the Application is properly completed and can be accepted in the form
received, any initial Net Purchase Payment will be credited to the Certificate
Balance within two (2) business days after the later of receipt of the
Application or receipt of the initial Purchase Payment at the Annuity Service
Center. Additional Purchase Payments allocated to the Separate Account will be
credited to the Certificate and added to the Certificate Balance as of the
Valuation Period when they are received. Purchase Payments allocated to the
General Account will be credited with interest from the day after deposit.
Allocation of a Purchase Payment which is derived, all or in part, from any
amount paid by check or draft may be postponed until such time as the Company
determines that such instrument has been honored.
PANA+C92 Page 11 of 37 4/92
PART 4
TRANSFERS
- ---------
No fee is currently imposed on transfers. The Company reserves the right to
charge such a fee in the future, and to otherwise restrict the transfer
privilege in any way or eliminate it entirely.
ACCUMULATION PERIOD TRANSFERS
- -----------------------------
During the Accumulation Period, the Participant or the Beneficiary (if
a Death Benefit has become payable) may elect to make transfers among the
Sub-Accounts and the General Account. Such transfers shall be made upon Written
Request and are subject to the following:
1. The minimum transfer amount to or from the General Account and/or any
Sub-Account will be $100; and
2. The General Account and the Money Market Sub-Account are Competing
Accounts. Transfers between these Competing Accounts will not be permitted
unless the transfer is requested during the Window Period. For a period of
ninety (90) calendar days following a transfer from one Competing Account, no
transfer can be made to the other Competing Account. For a period of ninety (90)
calendar days following a transfer to one Competing Account, no transfer can be
made from the other Competing Account; and
3. Except during the Window Period, the total of all transfers to or from
the General Account during any Certificate Year are limited to the greater of:
(a) 15% of the General Account Balance as of the end of the immediately
preceding Certificate Year, or (b) $1,000.
ANNUITY PERIOD TRANSFERS
- ------------------------
During the Annuity Period, the Participant may, upon Written Request, elect to
transfer a portion of any Sub-Account of the Separate Account to any other
Sub-Account(s) of the Separate Account once during any Certificate Year.
Transfers to or from the General Account are not permitted during the Annuity
Period. The Company will process transfers based on the calculations outlined
below.
1. Determine the number of units to be transferred from the Sub-Account
as follows: = AT/AUV1
2. Determine the number of Annuity Units remaining in such Sub-Account
(after the transfer): = UNIT1 - AT/AUV1
3. Determine the number of Annuity Units in the transferee Sub-Account
(after the transfer): = UNIT2 + AT/AUV2
4. Subsequent annuity payments will reflect the changes in Annuity Units
in each Sub-Account as of the next Annuity Income payment's due date.
PANA+C92 Page 12 of 37 4/92
Annuity Period Transfers (cont)
Where:
(AUV1) is the Annuity Unit Value of the Sub-Account that the
transfer is being made from as of the next annuity payment's due date.
(AUV2) is the Annuity Unit Value of the Sub-Account that the
transfer is being made to as of the next annuity payment's due date.
(UNIT1) is the number of units in the Sub-Account that the transfer
is being made from, before the transfer.
44
<PAGE>
(UNIT2) is the number of units in the Sub-Account that the transfer is
being made to, before the transfer.
(AT) is the dollar amount being transferred from the Sub-Account.
PANA+C92 Page 13 of 37 4/92
PART 5
PARTIAL AND FULL SURRENDERS
- ---------------------------
SURRENDER GUIDELINES
- --------------------
During the Accumulation Period, the Company will process all Written Requests
for Partial and/or Full Surrenders subject to the following:
1. Such request is received by the Company before a Death Benefit has
become payable; and
2. the deduction of any applicable Surrender Charge, Interest Rate
Factor Adjustment, Certificate Maintenance Fee, and applicable premium taxes
(See Part 7 - Fees and Charges). Any Interest Rate Factor Adjustment imposed on
a surrender will be imposed only on the amount of the General Account Balance
subject to surrender. The Company will process all Partial and Full Surrender
requests within seven (7) calendar days following receipt by the Annuity Service
Center of the Participant's Written Request, except as follows:
1. General Account. The Company reserves the right to defer payment of
---------------
any surrender from the General Account for up to six (6) months.
2. Separate Account. The Company reserves the right to defer the payment
----------------
of any surrender from the Separate Account as permitted by the Investment
Company Act of 1940, as amended. A Purchase Payment amount is not available to
satisfy a Written Request for surrender until the check or other instrument by
which the Purchase Payment was made has been honored.
PARTIAL SURRENDER The Participant may elect a Partial Surrender from the General
- -----------------
Account and/or any Sub-Account subject to the following conditions:
1. the Partial Surrender is for at least $100; and
2. the Certificate Balance is at least $250 after any Partial
Surrender.
The Participant must specify the Investment Account or Sub-Account from which
surrendered amounts should be taken. The Surrender Charge, if any, shall be
allocated among the General Account and/or any Sub-Account in the same manner as
the Partial Surrender amount.
FULL SURRENDER
- --------------
The Participant may elect a Full Surrender of the entire Certificate Balance
which will be in full settlement of the Company's liability to the Participant
under the Contract and this Certificate. The Company may require that this
Certificate be returned to the Annuity Service Center upon a Full Surrender.
PANA+C92 Page 14 of 37 4/92
PART 6
DEATH BENEFIT
- -------------
DEATH BENEFIT DURING ACCUMULATION PERIOD
- ----------------------------------------
If the Annuitant or Participant dies prior to the Annuity Income Date, a Death
Benefit will be paid to the Beneficiary upon receipt at the Annuity Service
Center of proof of death. If, however, the Annuitant dies before the Participant
and there is a Contingent Annuitant who is less than eighty-five (85) years of
age on the Annuitant's date of death, and the Participant is a natural person,
then no Death Benefit is payable, and the Certificate will continue in force,
with the Contingent Annuitant as the Annuitant. The Death Benefit is payable
upon receipt of proof of death, as well as proof that death occurred during the
Accumulation Period. Payments under a Death Benefit Option are determined at the
time of payment and shall be based on (a) or (b):
(a) the greater of the Certificate Balance or the Purchase Payments less
any prior withdrawals and charges if the deceased Annuitant or Participant was a
natural person less than age 75 at death.
(b) the Certificate Balance, for all other Annuitants or Participants.
No Surrender Charge, Interest Rate Factor Adjustment, or
Certificate Maintenance Fee shall apply with respect to any Death Benefit
Option. Payment of the Death Benefit will be in full settlement of the Company's
liability under this Certificate.
DEATH OF THE PARTICIPANT
- ------------------------
If the Participant and the Annuitant are not the same person and the Participant
dies before the Annuitant and prior to the Annuity Income Date, one of the
following provisions will apply:
1. If the Participant's spouse is the Beneficiary and survives the
Participant, the spouse may select Death Benefit Option A, B or C within one
year after the Participant's death. If the surviving spouse does not make a
selection within one year after the Participant's death, the surviving spouse
will become the Participant.
2. If the Beneficiary is a natural person other than the
Participant's spouse, the Beneficiary may select Death Benefit Option B or C
within one year after the Participant's death. If no selection is made within
one year after the Participant's death, the Death Benefit will be paid to the
Beneficiary in a single sum at that time.
3. If the Beneficiary is not a natural person, it may select Death
Benefit Option B or D within one year after the Participant's death.
45
<PAGE>
4. If no Beneficiary survives the Participant, the Annuitant shall be
deemed to be the Beneficiary and (1) or (2) above shall apply. If no selection
is made within one year after the Participant's death, the Death Benefit will be
paid in a single sum at that time.
PANA+C92 Page 15 of 37 4/92
DEATH OF THE ANNUITANT
- ----------------------
If the Participant and the Annuitant are not the same person and the Annuitant
dies before the Participant and prior to the Annuity Income Date, and there is
no Contingent Annuitant younger than age 85, or if the Participant is not a
natural person, the following provision applies:
1. The Beneficiary, if a natural person, may select Death Benefit Option E
or F within one year after the Annuitant's death. If no selection is made within
one year after the Annuitant's death, the Death Benefit will be paid in a single
sum to the Beneficiary at that time.
2. If the Beneficiary is not a natural person, it may select only Death
Benefit Option D or E within one year after the Annuitant's death. If no
selection is made within one year after the Annuitant's death, the Death Benefit
will be paid to the Beneficiary in a single sum at that time.
3. If no Beneficiary survives the Annuitant, the Participant shall be
deemed the Beneficiary and (1) or (2) above shall apply.
DEATH OF THE PARTICIPANT/ANNUITANT
- ----------------------------------
If the Participant and the Annuitant are the same person and the
Participant/Annuitant dies before the Annuity Income Date, one of the following
provisions apply:
1. If the Participant/Annuitant's spouse is the Beneficiary,
the surviving spouse may select Death Benefit Option B, C or G within one year
after the Participant/Annuitant's death. If no selection is made within one year
after the Participant/Annuitant's death, the surviving spouse will become the
Participant and Annuitant under the Certificate.
2. If the Beneficiary is a natural person other than the
Participant/Annuitant's spouse, the Beneficiary may select Death Benefit Option
B or C within one year of the Participant/Annuitant's death. If no selection is
made within one year after the Participant's death, the Death Benefit will be
paid to the Beneficiary in a single sum at that time.
3. If the Beneficiary is not a natural person, it may select Death Benefit
Option B or D within one year after the Participant's death.
4. If no Beneficiary survives the Participant/Annuitant, the Death Benefit
will be paid in a single sum to the Participant/Annuitant's estate within five
(5) years of the date of death. If no selection is made within one year after
the Participant's death, the Death Benefit will be paid in a single sum at that
time.
PANA+C92 Page 16 of 37 4/92
DEATH BENEFIT OPTIONS
- ---------------------
Life expectancy for purposes of these Death Benefit Options will be determined
from the tables in the Regulations under Section 72 of the Internal Revenue
Code. The following Death Benefit Options are available:
Death Benefit Option A - To become the Participant.
- ----------------------
Death Benefit Option B - To receive the Death Benefit as a single sum within one
- ----------------------
year after the Participant's death.
Death Benefit Option C - To receive the Death Benefit under any Annuity Option
- ----------------------
offered in this Certificate, provided the entire Death Benefit is distributed:
1. Within five (5) years of the date of death; or,
2. Over a period not extending beyond the life expectancy of the
Beneficiary; or,
3. Over the life of the Beneficiary:
If the Death Benefit is to be paid under (2) or (3), the first installment
payment must be made within one year after the Participant's death.
Death Benefit Option D - To receive the Death Benefit under any Annuity Option
- ----------------------
offered in this Certificate, provided the entire Death Benefit is distributed
within five (5) years of the date of death.
Death Benefit Option E - To receive the Death Benefit as a single sum within one
- ----------------------
year after the Annuitant's death.
Death Benefit Option F - To receive the Death Benefit under any Annuity Option
- ----------------------
offered in the Certificate, provided the Death Benefit is distributed:
1. Over a period not extending beyond
the life expectancy of the Beneficiary; or,
2. Over the life of the Beneficiary.
The first installment payment must be made within one year after the Annuitant's
death.
Death Benefit Option G - To become the Participant and Annuitant under the
- ----------------------
Certificate, just as if the Beneficiary had always been the Participant and
Annuitant.
DEATH OF THE ANNUITANT DURING ANNUITY PERIOD
- --------------------------------------------
The Death Benefit payable if the Annuitant dies on or after the Annuity Income
Date, if any, depends on the Annuity Option in effect on the date of death of
the Annuitant. Any remaining payments will be distributed at least as rapidly as
under the method of distribution being used as of the date of the Annuitant's
death. If a Beneficiary dies while receiving such benefits, the balance of the
benefits, if any, will be paid in a single sum to the estate of the Beneficiary.
If no Beneficiary survives the Annuitant, the benefits, if any, will be paid in
a single sum to the estate of the last Annuitant to die.
46
<PAGE>
PANA+C92 Page 17 of 37 4/92
BENEFICIARY
- -----------
One or more Beneficiaries may be designated to receive benefits concurrently,
contingently or successively upon the death of the Participant and/or the
Annuitant. The Beneficiary designation in the Application will remain in effect
until changed. The Participant may change the designated Beneficiary before a
Death Benefit has become payable, upon Written Request. The change will take
effect as of the date the Participant signs the Written Request; however, the
change is subject to any payments made or actions taken by the Company prior to
its receipt of such Written Request. The Beneficiary's consent to such change is
not required unless the Beneficiary was irrevocably designated or consent is
required by law. If an irrevocable Beneficiary dies, the Participant may then
designate a new Beneficiary.
On or after receipt of proof of death at the Annuity Service Center, the
Beneficiary shall have the exclusive right to: 1) appoint a contingent
Beneficiary to succeed to the interest of the Beneficiary in the event of the
Beneficiary's death; and 2) make transfers under the Certificate.
PANA+C92 Page 18 of 37 4/92
PART 7
FEES AND CHARGES
- ----------------
CERTIFICATE MAINTENANCE FEE
- ---------------------------
An annual Certificate Maintenance Fee is deducted from the Certificate Balance
on the last day of each Certificate Year during the Accumulation Period and upon
Full Surrender of the Certificate. The annual Certificate Maintenance Fee will
not exceed $60. The Certificate Maintenance Fee will be deducted prorata from
the Sub-Accounts in the Separate Account and the General Account, in the same
proportion that the amount of Certificate Balance in each Sub-Account and the
General Account bears to the total Certificate Balance.
SURRENDER CHARGE
- ----------------
During the first five (5) Certificate Years, a 5% Surrender Charge will be
imposed on each Partial or Full Surrender; no Surrender Charge will be imposed
on or after the fifth anniversary of the Certificate Issue Date. The Surrender
Charge will be deducted from the Certificate Balance pursuant to this Part as of
the date of receipt of Written Request for such Surrender. In the case of a
Partial Surrender, the Surrender Charge will be deducted from the Certificate
Balance remaining after payment of the requested surrender amount, or from the
amount paid if sufficient balances do not remain in the Sub-Account(s) or
General Account to which the surrender is allocated.
The Partial Surrender Charge formula is as follows:
(PS - FREE) x 5% / (95%) = PSC, but not less than zero
The Full Surrender Charge formula is as follows:
(FS - FREE) x 5% = FSC
where:
(PS) is the Partial Surrender Amount.
(FS) is the Full Surrender Amount.
(FREE) is the Free Surrender Amount.
(PSC) is the Partial Surrender Charge Amount
(FSC) is the Full Surrender Charge Amount
A Surrender Charge will not apply to:
1. cancellation during the Right to Examine Certificate
period;
2. Full Surrender of the Certificate on the Annuity
Income Date;
3. Partial or Full Surrenders during the Window Period;
4. the Death Benefit; or
5. a Free Surrender Amount.
PANA+C92 Page 19 of 37 4/92
FREE SURRENDER
- --------------
Beginning in the second Certificate Year, the Participant is entitled to an
annual Free Surrender Amount which is exempt from a Surrender Charge and any
applicable Interest Rate Factor Adjustment. The Free Surrender Amount will be
allocated among the General Account and/or Sub-Accounts in the same proportions
as the Partial or Full Surrender amount. The Free Surrender Amount equals 10% of
the Certificate Balance as of the end of the immediately preceding Certificate
Year. Any amount surrendered during the year in excess of this 10% amount will
be subject to a Surrender Charge and any applicable Interest Rate Factor
Adjustment.
INTEREST RATE FACTOR ADJUSTMENT
- -------------------------------
Except during the Window Period, an Interest Rate Factor Adjustment will be
deducted from or added to the General Account:
(a) upon Partial and/or Full Surrender of the Certificate during
the Accumulation Period;
(b) to the extent the General Account Balance is applied to
purchase a Variable Annuity on the Annuity Income Date.
The Interest Rate Factor Adjustment will reflect the relationship between 1) the
weighted average of Treasury Index Rates corresponding to Purchase Payments and
transfers into the General Account during the current Five Year Period (as
adjusted for
47
<PAGE>
Partial Surrenders or transfers out of the General Account), 2) the Treasury
Index Rate which would be applicable during the time remaining in the Five Year
Period. The Interest Rate Factor Adjustment formula includes a set percentage
factor (.30%) designed to compensate the Company for certain expenses and losses
that might be incurred as a direct or indirect result or consequence of
surrenders. In general, if the weighted average of Treasury Index Rates
corresponding to Purchase Payments and transfers during the current Five Year
Period is lower than the Treasury Index Rate which would be applicable during
the time remaining in the current Five Year Period, (or exceeds such rate by
less than .30%) then the application of the Interest Rate Factor Adjustment will
result in a negative adjustment.
The Partial Surrender Interest Rate Factor Adjustment Formula is:
(1 - 1/IRF) x (GAPS - GAF + GAPSC) = IRFA
The Full Surrender Interest Rate Factor Adjustment Formula is:
(IRF - 1) x (GAFS - GAF) = IRFA
PANA+C92 Page 20 of 37 4/92
Interest Rate Factor Adjustment (cont)
where:
(GAPS) is the General Account Partial
Surrender Amount
(GAFS) is the General Account Full Surrender
Amount
(GAF) is the General Account Free Surrender
Amount
(GAPSC) is the General Account portion of the
Partial Surrender Charge Amount
determined as follows:
GAPSC = (GAPS - GAF) X 5% / 95%, but not less than zero.
(IRF) is the Interest Rate Factor
(IRFA) is the Interest Rate Factor Adjustment
In the event of a Partial Surrender, there is no Interest Rate Factor Adjustment
if the General Account Free Surrender Amount exceeds the General Account portion
of such Partial Surrender.
Interest Rate Factor
- --------------------
The Interest Rate Factor is determined by the following formula:
(N/12)
(1 + Ta)
__________________ = IRF
(N/12)
(1.003 + Tb)
where:
(Ta) is the weighted average of the Treasury Index Rates which
correspond to the Purchase Payments and/or transfers allocated to the General
Account during the current Five Year Period. The Treasury Index Rate
corresponding to each such allocation is determined by the number of full years
and fractions thereof (but not less than one year) remaining from the date of
the allocation until the end of the current Five Year Period. For purposes of
determining the average of these rates, each Treasury Index Rate is weighted by
the amount of the corresponding allocation (as adjusted to reflect any Partial
Surrenders and/or transfers from the General Account subsequent to such
allocation). The General Account Balance at the beginning of any Five Year
Period will be treated as a new allocation for purposes of this calculation.
PANA+C92 Page 21 of 37 4/92
Interest Rate Factor (cont)
Each allocation made prior to a Partial Surrender and/or transfer from the
General Account (other than the current surrender) shall be adjusted by
multiplying such allocation by the following fraction:
1 - PS/GAB
Where:
(PS) is the amount of the Partial Surrender and/or transfer from
the General Account made subsequent to the allocation.
(GAB) is the beginning General Account Balance on the date of such
Partial Surrender and/or transfer from the General Account.
(Tb) is the Treasury Index Rate with a maturity equal to the
number of full years and fractions thereof (but not less than one year)
remaining in the current Five Year Period on the date of the Partial or Full
Surrender.
(N) is the number of whole months remaining in the current Five
Year Period as of the date of the Partial or Full Surrender (rounded down).
(IRF) is the Interest Rate Factor.
PANA+C92 Page 22 of 37 4/92
PART 8
GENERAL PROVISIONS
- ------------------
ASSIGNMENT OF THE CERTIFICATE
- -----------------------------
A Written Request specifying the terms of an assignment of this Certificate must
be provided to the Annuity Service Center. Until the Written Request is
received, the Company will not be required to take notice of or be responsible
for any transfer of
48
<PAGE>
interest in this Certificate by assignment, agreement, or otherwise.
The Company will not be responsible for the validity or tax consequences of any
assignment. Any assignment made after the Death Benefit has become payable will
be valid only with Company consent.
If this Certificate is assigned, the Participant's rights may only be exercised
with the consent of the assignee of record.
CERTIFICATE CHANGES BY THE COMPANY
- ----------------------------------
The Company reserves the right to amend this Certificate to meet the
requirements of any applicable federal or state laws or regulations, or as
otherwise provided in this Certificate. The Company will notify the Participant
in writing of such amendments. Any changes to this Certificate by the Company
must be signed by an authorized officer of the Company. Agents of the Company
have no authority to alter or modify any of the terms, conditions, agreements of
this Certificate, or to waive any of its provisions.
CERTIFICATE CHANGES BY THE PARTICIPANT
- --------------------------------------
With the consent of the Company, the Participant may, by Written Request:
1. change the Participant;
2. change the Annuity Income Date and/or the Annuity Option at
any time up to thirty (30) calendar days before the current Annuity Income Date,
provided the Annuitant is then living;
3. change the Beneficiary, as provided in Part 6 - Death Benefit.
A change of Participant or of Annuity Income Date will take effect on the date
the Written Request is received.
CERTIFICATE TERMINATION
- -----------------------
This Certificate will terminate upon the occurrence of any of the following
events:
1. the date of the last Annuity Income payment;
2. the date payment is made of the Certificate Balance;
PANA+C92 Page 23 of 37 4/92
Certificate Termination (cont)
3. the date of the last Death Benefit payment to the last
Beneficiary;
4. the date the Certificate is returned under the Right to
Examine Certificate provision; or
5. failure to maintain the required Minimum Certificate Balance
as defined in Part 2 - Investment Accounts.
INCONTESTABILITY
- ----------------
The Company shall not contest the validity of this Certificate.
MISSTATEMENT OF AGE OR SEX
- --------------------------
If the Annuitant's age or sex has been incorrectly stated, the Annuity Income
payable will be that which the Certificate Balance, reduced by any applicable
Premium Tax, would have purchased at the correct age and sex. After correction,
the Annuitant will receive the sum of any underpayments made by the Company
within thirty (30) calendar days. The amount of any overpayments made by the
Company will be charged against the payment(s) following the correction.
NONPARTICIPATING
- ----------------
This Certificate is nonparticipating and will not share in any surplus earnings
of the Company. No dividends are payable on this Certificate.
NON-BUSINESS DAYS
- -----------------
If the due date for any activity required by the Certificate falls on a non-
business day for the Company, performance will be rendered on the first business
day following the due date.
REGULATORY REQUIREMENTS
- -----------------------
All interest guarantees, surrender benefits, and amounts payable at death will
not be less than the minimum benefits required by the laws and regulations of
the state in which the Certificate is delivered.
RIGHT TO EXAMINE CERTIFICATE
- ----------------------------
No Surrender Charge, Interest Rate Factor Adjustment, Certificate Maintenance
Fee, or Premium Tax will be applied if the Participant returns the Certificate
for cancellation during the first fifteen (15) calendar days following the
Certificate Issue Date. The Company will refund the Separate Account Balance
and/or any Purchase Payments made to the General Account upon return of this
Certificate.
VOTING RIGHTS
- -------------
To the extent required to permit this Certificate to qualify under the
Investment Company Act of 1940 (and any subsequent amendments), the Participant
has the right to instruct the Company how to vote the shares of a Portfolio
relating to a Sub-Account in which Purchase Payments are invested.
PANA+C92 Page 24 of 37 4/92
PART 9
ANNUITY PROVISIONS
- ------------------
ANNUITY GUIDELINES
- ------------------
Once the Certificate reaches the Annuity Income Date, the following guidelines
apply:
1. The Participant may elect to have the Certificate Balance
applied to provide a Variable Annuity, a Fixed Annuity, or a combination Fixed
and Variable Annuity. If a combination is elected, the Participant must specify
what part of the Certificate Balance is to be applied to the Fixed and Variable
options. Annuity Option E is not available as a
49
<PAGE>
Variable Annuity.
2. The amount applied to an Annuity Option on the Annuity Income
Date, excluding any Death Benefit proceeds applied to an Annuity Option, is
equal to the sum of: (1) the General Account Balance adjusted by the Interest
Rate Factor Adjustment to the extent the General Account Balance is applied to
purchase a Variable Annuity and (2) the Separate Account Balance; minus any
applicable Premium Tax.
3. The minimum amount that may be applied under any Annuity
Option, and the minimum periodic Annuity Income payment allowed, are the most
recently published minimums designated by the Company for this purpose.
ANNUITY PAYMENTS
- ----------------
The Company will pay an Annuity Income beginning on the Annuity Income Date,
provided no Death Benefit has become payable and the Participant has by Written
Request selected an available Annuity Option and payment schedule. Except as
otherwise agreed to by the Participant and the Company, Annuity Income payments
will be payable monthly. The Annuity Option and frequency of Annuity Income
payments may not be changed after Annuity Income payments begin. Unless the
Participant specifies otherwise, the payee of the Annuity Income shall be the
applicable Annuitant.
If no Annuity Option has been chosen at least thirty (30) calendar days before
the Annuity Income Date, the Company will make payments to the Annuitant under
Option B, with 120 monthly payments guaranteed. Unless specified otherwise, the
Separate Account Balance shall be used to provide a Variable Annuity and the
General Account Balance shall be used to provide a Fixed Annuity.
If the amount of the Annuity Income will depend on the age or sex of the
Annuitant, the Company reserves the right to ask for satisfactory proof of the
Annuitant's (or Joint Annuitant's, if any) age and sex. The Company reserves the
right to delay Annuity Income payments until acceptable proof is received.
FIXED ANNUITY
- -------------
A Fixed Annuity provides for payments which do not fluctuate based on investment
performance. The Fixed Annuity shall be determined by applying the Annuity
Purchase Rates set forth in the Fixed Annuity Rate Tables in Part 10 to the
portion of the Certificate Balance allocated to the Fixed Annuity Option
selected by the Participant.
PANA+C92 Page 25 of 37 4/92
VARIABLE ANNUITY
- ----------------
A Variable Annuity provides for payments which may fluctuate based on the
investment performance of the Separate Account Sub-Account. Variable Annuity
payments will be based on the allocation of the Certificate Balance among the
Sub-Accounts.
Annuity Units and Payments.
- --------------------------
The dollar amount of each Variable Annuity payment depends on the number of
Annuity Units credited to that Annuity Option, and the value of those Units. The
number of Annuity Units is determined as follows:
1. The number of Annuity Units credited in each Sub-Account will
be determined by dividing the product of the portion of the Certificate Balance
to be applied to the Sub-Account and the Annuity Purchase Rate by the value of
one Annuity Unit in that Sub-Account on the Annuity Income Date. The purchase
rates are set forth in the Variable Annuity Rate Tables in Part 10 of this
Certificate.
2. For each Sub-Account, the amount of each Annuity Income
payment equals the product of the Annuitant's number of Annuity Units and the
Annuity Unit Value on the payment date. The amount of each payment may vary.
Annuity Unit Value.
- ------------------
The value of an Annuity Unit in a Sub-Account on any Valuation Date is
determined as follows:
1. The Net Investment Factor for the Valuation Period (for the
appropriate Annuity Income payment frequency) just ended is multiplied by the
value of the Annuity Unit for the Sub-Account on the preceding Valuation Date.
2. The result in (1) is then divided by an interest factor. The
interest factor equals 1.00 plus the interest rate for the number of days since
the preceding Valuation Date. Interest is based on an effective annual rate of
4%.
ANNUITY OPTIONS
- ---------------
The Participant may choose periodic fixed and/or variable Annuity Income
payments under any one of the Annuity Options described below, except Option E,
which shall be available as a Fixed Annuity only. The Company may consent to
other plans of payment before the Annuity Income Date.
The following Annuity Options are available:
Annuity Option A - Life Income
----------------
Periodic payments will be made as long as the Annuitant lives.
Annuity Option B - Life Income with Period Certain Periodic payments will be
- ----------------
made for a guaranteed period, or as long as the Annuitant lives, whichever is
longer. The guaranteed period may be five (5), ten (10) or twenty (20) years.
PANA+C92 Page 26 of 37 4/92
Annuity Option (cont)
Annuity Option C - Joint and Last Survivor Payments
----------------
Periodic payments will be made during the joint lifetime of two Annuitants,
continuing in the same amount during the lifetime of the surviving Annuitant.
Annuity Option D - Joint and 2/3 Survivor Annuity
----------------
50
<PAGE>
Periodic payments will be made during the joint lifetime of two Annuitants.
Payments will continue during the lifetime of the surviving Annuitant and will
be computed on the basis of two-thirds of the annuity payment (or Units) in
effect during the joint lifetime.
Annuity Option E - Period Certain
- ----------------
(Available as a Fixed Annuity only)
Periodic payments will be made for a specified period. The specified period must
be at least five (5) years and cannot be more than thirty (30) years.
Annuity Option F - Special Income Settlement Agreement
- ----------------
The Company will pay the proceeds in accordance with terms agreed upon in
writing by the Participant and the Company.
PANA+C92 Page 27 of 37 4/92
PART 10
ANNUITY RATES
- -------------
FIXED ANNUITY RATES
- -------------------
Notes to Tables
- ---------------
Table 1 Annuity Options A and B
Table 2 Annuity Option C
Table 3 Annuity Option D
Table 4 Annuity Option E
Note 1: If the single premium immediate annuity rates offered by the
Company and designated by the Company for this purpose on the Annuity Income
Date are more favorable than the minimum guaranteed rates used to develop Tables
1, 2, 3 or 4, those rates will be used.
Note 2: The 1983 Table "a" mortality table, projected to the year 2015
with Projection Scale G, applies to all Annuity Options which include life
contingent payments. Where applicable, unisex mortality rates and projection
factors are based on a 40%/60% male/female weighting.
Note 3: The Annuity Option rates shown in Tables 1, 2, 3, and 4 are based
on an effective annual interest rate of 3%.
Note 4: Rates will be determined based on the actual age(s) of
Annuitant(s), in completed years and months, as of the Annuity Income Date. The
tables below show Annuity Option rates for completed years; rates for
intermediate actual ages will be based on straight line interpolation between
the completed years rates for the next higher and lower completed years.
Note 5: The purchase rate for any age or combination of ages not shown in
the above tables will be calculated on the same basis as the payments for those
shown and may be obtained by Written Request.
PANA+C92 Page 28 of 37 4/92
FIXED ANNUITY RATES
TABLE 1 - OPTIONS A & B
MONTHLY PAYMENT PER $1,000
- --------------- Male ------------------- ------------- Female ---------------
Life 5 Yrs. 10 Yrs. 20 Yrs. Life 5 Yrs. 10 Yrs. 20 Yrs.
Age Only C&L C&L C&L Only C&L C&L C&L Age
50 3.94 3.93 3.91 3.84 3.64 3.64 3.63 3.60 50
51 4.00 3.99 3.97 3.89 3.69 3.69 3.68 3.64 51
52 4.07 4.06 4.04 3.94 3.74 3.74 3.73 3.69 52
53 4.13 4.13 4.10 4.00 3.80 3.79 3.78 3.74 53
54 4.21 4.20 4.17 4.06 3.85 3.85 3.84 3.79 54
55 4.29 4.28 4.25 4.11 3.92 3.91 3.90 3.84 55
56 4.37 4.36 4.32 4.17 3.98 3.98 3.96 3.90 56
57 4.45 4.44 4.40 4.23 4.05 4.04 4.03 3.95 57
58 4.54 4.53 4.49 4.30 4.12 4.11 4.10 4.01 58
59 4.64 4.63 4.58 4.36 4.20 4.19 4.17 4.07 59
60 4.74 4.73 4.67 4.42 4.28 4.27 4.25 4.13 60
61 4.85 4.84 4.77 4.49 4.36 4.35 4.33 4.20 61
62 4.97 4.95 4.88 4.56 4.45 4.44 4.41 4.27 62
63 5.10 5.07 4.99 4.62 4.55 4.54 4.50 4.33 63
64 5.23 5.20 5.11 4.69 4.65 4.64 4.60 4.40 64
65 5.37 5.34 5.23 4.75 4.76 4.75 4.70 4.47 65
66 5.53 5.49 5.35 4.82 4.88 4.86 4.81 4.55 66
67 5.69 5.64 5.49 4.88 5.00 4.98 4.92 4.62 67
68 5.86 5.81 5.63 4.94 5.13 5.11 5.04 4.69 68
69 6.05 5.98 5.77 5.00 5.28 5.25 5.17 4.76 69
70 6.25 6.17 5.92 5.06 5.43 5.40 5.30 4.83 70
71 6.45 6.36 6.07 5.11 5.60 5.56 5.44 4.90 71
72 6.67 6.56 6.23 5.16 5.77 5.73 5.59 4.97 72
51
<PAGE>
73 6.91 6.78 6.39 5.21 5.97 5.92 5.75 5.03 73
74 7.16 7.00 6.56 5.25 6.18 6.11 5.91 5.09 74
75 7.42 7.24 6.72 5.29 6.40 6.33 6.08 5.15 75
76 7.71 7.49 6.90 5.33 6.64 6.55 6.26 5.20 76
77 8.01 7.76 7.07 5.36 6.90 6.79 6.44 5.25 77
78 8.34 8.04 7.24 5.38 7.17 7.04 6.63 5.29 78
79 8.69 8.33 7.42 5.41 7.47 7.31 6.82 5.32 79
80 9.06 8.64 7.59 5.43 7.79 7.59 7.01 5.36 80
PANA+C92 Page 29 of 37 4/92
FIXED ANNUITY RATES
TABLE 2 - OPTION C
MONTHLY PAYMENT PER $1,000
MALE/FEMALE JOINT AND SURVIVOR ANNUITY
MALE --------------------- FEMALE AGE ------------------------- MALE
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.11 3.18 3.24 3.30 3.34 3.38 3.40 3.42 3.43 3.44 40
45 3.15 3.24 3.33 3.41 3.48 3.54 3.58 3.61 3.63 3.65 45
50 3.18 3.29 3.41 3.52 3.63 3.72 3.79 3.84 3.88 3.90 50
55 3.21 3.33 3.48 3.63 3.77 3.91 4.02 4.11 4.18 4.22 55
60 3.22 3.36 3.53 3.71 3.91 4.10 4.28 4.43 4.55 4.63 60
65 3.24 3.39 3.57 3.78 4.02 4.28 4.55 4.79 4.99 5.14 65
70 3.24 3.40 3.59 3.83 4.11 4.44 4.79 5.16 5.50 5.77 70
75 3.25 3.41 3.61 3.86 4.17 4.55 5.00 5.51 6.01 6.47 75
80 3.25 3.42 3.62 3.88 4.21 4.64 5.16 5.80 6.51 7.22 80
85 3.25 3.42 3.63 3.90 4.24 4.69 5.27 6.03 6.94 7.94 85
MALE(1)/MALE(2) JOINT AND SURVIVOR ANNUITY
MALE(1) ------------------ MALE(2) AGE ------------------------ MALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.17 3.24 3.29 3.33 3.37 3.40 3.41 3.43 3.44 3.44 40
45 3.24 3.32 3.40 3.47 3.53 3.57 3.60 3.63 3.64 3.65 45
50 3.29 3.40 3.51 3.61 3.70 3.77 3.83 3.87 3.89 3.91 50
55 3.33 3.47 3.61 3.75 3.89 4.00 4.09 4.16 4.21 4.24 55
60 3.37 3.53 3.70 3.89 4.07 4.25 4.40 4.52 4.60 4.66 60
65 3.40 3.57 3.77 4.00 4.25 4.50 4.73 4.93 5.09 5.20 65
70 3.41 3.60 3.83 4.09 4.40 4.73 5.08 5.40 5.67 5.88 70
75 3.43 3.63 3.87 4.16 4.52 4.93 5.40 5.87 6.31 6.67 75
80 3.44 3.64 3.89 4.21 4.60 5.09 5.67 6.31 6.96 7.57 80
85 3.44 3.65 3.91 4.24 4.66 5.20 5.88 6.67 7.57 8.48 85
FEMALE(1)/FEMALE(2) JOINT AND SURVIVOR ANNUITY
FEMALE(1) ----------------- FEMALE(2) AGE --------------------- FEMALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.06 3.11 3.15 3.19 3.21 3.23 3.24 3.25 3.25 3.25 40
45 3.11 3.19 3.25 3.30 3.34 3.37 3.39 3.40 3.41 3.42 45
50 3.15 3.25 3.34 3.42 3.49 3.54 3.58 3.60 3.62 3.63 50
55 3.19 3.30 3.42 3.54 3.64 3.73 3.79 3.84 3.87 3.89 55
60 3.21 3.34 3.49 3.64 3.79 3.93 4.05 4.13 4.19 4.23 60
65 3.23 3.37 3.54 3.73 3.93 4.13 4.32 4.47 4.59 4.66 65
70 3.24 3.39 3.58 3.79 4.05 4.32 4.60 4.86 5.06 5.21 70
75 3.25 3.40 3.60 3.84 4.13 4.47 4.86 5.25 5.62 5.91 75
80 3.25 3.41 3.62 3.87 4.19 4.59 5.06 5.62 6.18 6.70 80
85 3.25 3.42 3.63 3.89 4.23 4.66 5.21 5.91 6.70 7.52 85
PANA+C92 Page 30 of 37 4/92
FIXED ANNUITY RATES
TABLE 3 - OPTION D
MONTHLY PAYMENT PER $1,000
MALE/FEMALE JOINT AND 2/3 ANNUITY
MALE --------------------- FEMALE AGE ------------------------ MALE
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.21 3.26 3.31 3.35 3.38 3.40 3.42 3.43 3.44 3.44 40
45 3.30 3.37 3.43 3.49 3.54 3.58 3.61 3.63 3.64 3.65 45
52
<PAGE>
50 3.40 3.48 3.57 3.65 3.73 3.79 3.84 3.87 3.90 3.91 50
55 3.50 3.60 3.71 3.82 3.93 4.03 4.11 4.17 4.21 4.24 55
60 3.61 3.73 3.86 4.00 4.15 4.30 4.43 4.53 4.61 4.67 60
65 3.73 3.86 4.02 4.19 4.39 4.59 4.79 4.97 5.11 5.22 65
70 3.86 4.01 4.19 4.40 4.64 4.91 5.20 5.48 5.73 5.92 70
75 4.00 4.16 4.36 4.60 4.89 5.23 5.61 6.03 6.42 6.76 75
80 4.14 4.31 4.53 4.80 5.13 5.54 6.03 6.59 7.19 7.74 80
85 4.27 4.46 4.69 4.99 5.36 5.83 6.42 7.14 7.97 8.82 85
MALE(1)/MALE(2) JOINT AND 2/3 ANNUITY
MALE(1) ------------------- MALE(2) AGE ----------------------- MALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.26 3.30 3.34 3.37 3.40 3.41 3.43 3.44 3.44 3.45 40
45 3.37 3.43 3.48 3.53 3.57 3.60 3.62 3.64 3.65 3.65 45
50 3.48 3.56 3.64 3.71 3.78 3.83 3.86 3.89 3.91 3.92 50
55 3.60 3.71 3.81 3.92 4.01 4.09 4.16 4.20 4.23 4.26 55
60 3.73 3.86 3.99 4.14 4.27 4.40 4.51 4.59 4.65 4.69 60
65 3.87 4.02 4.19 4.37 4.57 4.76 4.93 5.07 5.18 5.26 65
70 4.02 4.19 4.40 4.63 4.88 5.15 5.42 5.65 5.85 6.00 70
75 4.18 4.37 4.60 4.88 5.19 5.55 5.94 6.31 6.64 6.91 75
80 4.33 4.55 4.81 5.12 5.50 5.96 6.48 7.02 7.54 8.01 80
85 4.48 4.72 5.00 5.36 5.80 6.34 7.00 7.73 8.51 9.26 85
FEMALE(1)/FEMALE(2) JOINT AND 2/3 ANNUITY
FEMALE(1) ------------------ FEMALE(2) AGE -------------------- FEMALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.12 3.16 3.19 3.21 3.23 3.24 3.24 3.25 3.25 3.25 40
45 3.21 3.26 3.31 3.34 3.37 3.39 3.40 3.41 3.42 3.42 45
50 3.30 3.37 3.43 3.49 3.54 3.57 3.60 3.61 3.63 3.63 50
55 3.40 3.48 3.57 3.66 3.73 3.79 3.83 3.87 3.89 3.90 55
60 3.50 3.60 3.72 3.83 3.94 4.04 4.12 4.18 4.22 4.24 60
65 3.61 3.73 3.87 4.02 4.17 4.32 4.46 4.57 4.64 4.69 65
70 3.74 3.88 4.04 4.22 4.42 4.64 4.85 5.03 5.18 5.29 70
75 3.88 4.03 4.22 4.43 4.69 4.97 5.28 5.59 5.86 6.06 75
80 4.03 4.20 4.40 4.65 4.95 5.31 5.73 6.19 6.64 7.03 80
85 4.19 4.37 4.59 4.87 5.22 5.65 6.18 6.81 7.49 8.16 85
PANA+C92 Page 31 of 37 4/92
FIXED ANNUITY RATES
TABLE 4 - OPTION E
MONTHLY PAYMENT PER $1000
YEARS MONTHLY INCOME
5 $17.91
6 15.14
7 13.16
8 11.68
9 10.53
10 9.61
11 8.86
12 8.24
13 7.71
14 7.26
15 6.87
16 6.53
17 6.23
18 5.96
19 5.73
20 5.51
21 5.32
22 5.15
23 4.99
24 4.84
25 4.71
53
<PAGE>
26 4.59
27 4.47
28 4.37
29 4.27
30 4.18
PANA+C92 Page 32 of 37 4/92
VARIABLE ANNUITY RATES
- ----------------------
Notes to Tables
- ---------------
Table 5 Annuity Options A and B
Table 6 Annuity Option C
Table 7 Annuity Option D
Note 1: The 1983 Table "a" mortality table, projected to the year 2015
with Projection Scale G, applies to all Annuity Options which include life
contingent payments. Where applicable, unisex mortality rates and projection
factors are based on a 40%/60% male/female weighting.
Note 2: The Annuity Option rates shown in Tables 5, 6 and 7 are based on
an assumed effective annual interest rate of 4%.
Note 3: Rates will be determined based on the actual age(s) of
Annuitant(s), in completed years and months, as of the Annuity Income Date. The
tables below show Annuity Option rates for completed years; rates for
intermediate actual ages will be based on straight line interpolation between
the completed years rates for the next higher and lower completed years.
Note 4: The purchase rate for any age or combination of ages not shown
in the above tables will be calculated on the same basis as the payments for
those shown and may be obtained by Written Request.
PANA+C92 Page 33 of 37 4/92
VARIABLE ANNUITY RATES
TABLE 5 - OPTION A & B
MONTHLY PAYMENT PER $1,000
- --------------- Male -------------- ----------------- Female --------------
Life 5 Yrs. 10 Yrs. 20 Yrs. Life 5 Yrs. 10 Yrs. 20 Yrs.
Age Only C&L C&L C&L Only C&L C&L C&L Age
50 4.53 4.53 4.51 4.42 4.24 4.24 4.23 4.19 50
51 4.60 4.59 4.56 4.47 4.29 4.29 4.28 4.23 51
52 4.66 4.65 4.63 4.52 4.34 4.33 4.32 4.28 52
53 4.73 4.72 4.69 4.57 4.39 4.39 4.38 4.32 53
54 4.80 4.79 4.76 4.62 4.45 4.44 4.43 4.37 54
55 4.88 4.86 4.83 4.68 4.51 4.50 4.49 4.42 55
56 4.95 4.94 4.90 4.74 4.57 4.56 4.54 4.47 56
57 5.04 5.02 4.98 4.79 4.63 4.63 4.61 4.52 57
58 5.13 5.11 5.06 4.85 4.70 4.70 4.67 4.58 58
59 5.22 5.21 5.15 4.91 4.78 4.77 4.74 4.64 59
60 5.33 5.31 5.24 4.97 4.86 4.85 4.82 4.70 60
61 5.44 5.41 5.34 5.04 4.94 4.93 4.90 4.76 61
62 5.55 5.53 5.44 5.10 5.03 5.02 4.98 4.82 62
63 5.68 5.65 5.55 5.16 5.12 5.11 5.07 4.89 63
64 5.81 5.78 5.67 5.22 5.22 5.21 5.16 4.95 64
65 5.96 5.91 5.79 5.28 5.33 5.31 5.26 5.02 65
66 6.11 6.06 5.91 5.35 5.45 5.43 5.37 5.09 66
67 6.27 6.22 6.04 5.40 5.57 5.55 5.48 5.15 67
68 6.45 6.38 6.18 5.46 5.70 5.68 5.60 5.22 68
69 6.63 6.55 6.32 5.52 5.85 5.82 5.72 5.29 69
70 6.83 6.74 6.46 5.57 6.00 5.96 5.85 5.36 70
71 7.04 6.93 6.61 5.62 6.16 6.12 5.99 5.42 71
72 7.26 7.13 6.77 5.67 6.34 6.29 6.14 5.49 72
73 7.50 7.34 6.92 5.71 6.54 6.48 6.29 5.55 73
74 7.75 7.57 7.09 5.76 6.74 6.67 6.45 5.60 74
75 8.02 7.81 7.25 5.79 6.97 6.89 6.62 5.66 75
76 8.30 8.06 7.42 5.83 7.22 7.11 6.79 5.71 76
77 8.61 8.32 7.59 5.86 7.47 7.35 6.97 5.75 77
78 8.94 8.60 7.76 5.88 7.75 7.60 7.15 5.79 78
79 9.29 8.89 7.93 5.90 8.05 7.87 7.34 5.82 79
80 9.66 9.20 8.10 5.92 8.37 8.15 7.53 5.86 80
PANA+C92 Page 34 of 37 4/92
54
<PAGE>
VARIABLE ANNUITY RATES
TABLE 6 - OPTION C
MONTHLY PAYMENT PER $1,000
MALE/FEMALE JOINT AND SURVIVOR ANNUITY
MALE ----------------------- FEMALE AGE ---------------------- MALE
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.73 3.80 3.86 3.91 3.95 3.98 4.01 4.03 4.05 4.05 40
45 3.77 3.85 3.93 4.01 4.08 4.13 4.18 4.21 4.23 4.25 45
50 3.80 3.90 4.01 4.11 4.21 4.30 4.37 4.43 4.47 4.49 50
55 3.83 3.94 4.07 4.21 4.35 4.48 4.59 4.69 4.76 4.80 55
60 3.84 3.97 4.12 4.29 4.48 4.66 4.84 4.99 5.11 5.20 60
65 3.86 3.99 4.16 4.36 4.59 4.84 5.10 5.34 5.54 5.70 65
70 3.87 4.01 4.19 4.41 4.68 4.99 5.34 5.70 6.04 6.31 70
75 3.87 4.02 4.21 4.44 4.74 5.11 5.55 6.04 6.55 7.01 75
80 3.88 4.03 4.22 4.47 4.79 5.19 5.71 6.34 7.04 7.75 80
85 3.88 4.03 4.23 4.48 4.81 5.25 5.82 6.57 7.47 8.47 85
MALE(1)/MALE(2) JOINT AND SURVIVOR ANNUITY
MALE(1) ------------------- MALE(2) AGE ------------------- MALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.79 3.85 3.90 3.94 3.98 4.01 4.03 4.04 4.05 4.06 40
45 3.85 3.93 4.00 4.07 4.12 4.17 4.20 4.23 4.24 4.25 45
50 3.90 4.00 4.10 4.20 4.28 4.36 4.41 4.45 4.48 4.50 50
55 3.94 4.07 4.20 4.33 4.46 4.57 4.67 4.74 4.79 4.82 55
60 3.98 4.12 4.28 4.46 4.64 4.81 4.96 5.08 5.17 5.23 60
65 4.01 4.17 4.36 4.57 4.81 5.05 5.28 5.48 5.65 5.76 65
70 4.03 4.20 4.41 4.67 4.96 5.28 5.62 5.94 6.22 6.43 70
75 4.04 4.23 4.45 4.74 5.08 5.48 5.94 6.40 6.84 7.22 75
80 4.05 4.24 4.48 4.79 5.17 5.65 6.22 6.84 7.50 8.11 80
85 4.06 4.25 4.50 4.82 5.23 5.76 6.43 7.22 8.11 9.02 85
FEMALE(1)/FEMALE(2) JOINT AND SURVIVOR ANNUITY
FEMALE(1) ----------------- FEMALE(2) AGE --------------- FEMALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.69 3.74 3.78 3.81 3.83 3.85 3.86 3.87 3.87 3.88 40
45 3.74 3.80 3.86 3.91 3.95 3.98 4.00 4.01 4.02 4.03 45
50 3.78 3.86 3.94 4.02 4.08 4.13 4.17 4.19 4.21 4.22 50
55 3.81 3.91 4.02 4.12 4.22 4.31 4.37 4.42 4.45 4.48 55
60 3.83 3.95 4.08 4.22 4.37 4.50 4.61 4.70 4.76 4.80 60
65 3.85 3.98 4.13 4.31 4.50 4.69 4.87 5.03 5.14 5.22 65
70 3.86 4.00 4.17 4.37 4.61 4.87 5.14 5.40 5.61 5.76 70
75 3.87 4.01 4.19 4.42 4.70 5.03 5.40 5.79 6.15 6.45 75
80 3.87 4.02 4.21 4.45 4.76 5.14 5.61 6.15 6.71 7.23 80
85 3.88 4.03 4.22 4.48 4.80 5.22 5.76 6.45 7.23 8.05 85
PANA+C92 Page 35 of 37 4/92
VARIABLE ANNUITY RATES
TABLE 7 - OPTION D
MONTHLY PAYMENT PER $1,000
MALE/FEMALE JOINT AND 2/3 ANNUITY
MALE --------------------------- FEMALE AGE ----------------- MALE
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.84 3.88 3.92 3.96 3.99 4.01 4.03 4.04 4.05 4.06 40
45 3.93 3.98 4.04 4.09 4.14 4.18 4.21 4.23 4.25 4.26 45
50 4.02 4.09 4.17 4.24 4.31 4.37 4.42 4.46 4.49 4.51 50
55 4.12 4.21 4.31 4.41 4.51 4.60 4.68 4.75 4.79 4.83 55
60 4.24 4.34 4.46 4.59 4.73 4.86 4.99 5.10 5.18 5.24 60
65 4.37 4.49 4.62 4.79 4.97 5.16 5.35 5.53 5.67 5.78 65
70 4.52 4.65 4.81 5.00 5.23 5.48 5.76 6.04 6.28 6.48 70
75 4.68 4.82 5.00 5.22 5.49 5.81 6.18 6.58 6.97 7.31 75
80 4.84 5.00 5.20 5.44 5.75 6.14 6.61 7.16 7.74 8.30 80
85 5.01 5.18 5.39 5.66 6.01 6.46 7.03 7.73 8.54 9.38 85
MALE(1)/MALE(2) JOINT AND 2/3 ANNUITY
55
<PAGE>
MALE(1) ------------------- MALE(2) AGE ------------------ MALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.88 3.92 3.96 3.99 4.01 4.03 4.04 4.05 4.06 4.06 40
45 3.98 4.04 4.09 4.13 4.17 4.20 4.22 4.24 4.25 4.26 45
50 4.09 4.17 4.24 4.31 4.36 4.41 4.45 4.48 4.50 4.51 50
55 4.21 4.31 4.40 4.50 4.59 4.67 4.73 4.78 4.82 4.84 55
60 4.35 4.46 4.58 4.71 4.85 4.97 5.07 5.16 5.22 5.26 60
65 4.50 4.63 4.78 4.96 5.14 5.32 5.49 5.63 5.74 5.83 65
70 4.67 4.82 5.00 5.22 5.46 5.72 5.98 6.21 6.41 6.56 70
75 4.84 5.02 5.23 5.48 5.78 6.13 6.50 6.86 7.19 7.47 75
80 5.02 5.22 5.46 5.76 6.12 6.55 7.06 7.58 8.10 8.57 80
85 5.20 5.42 5.68 6.02 6.44 6.96 7.60 8.32 9.08 9.82 85
FEMALE(1)/FEMALE(2) JOINT AND 2/3 ANNUITY
FEMALE(1) ----------------- FEMALE(2) AGE -------------- FEMALE(1)
AGE 40 45 50 55 60 65 70 75 80 85 AGE
40 3.76 3.79 3.81 3.83 3.85 3.86 3.87 3.87 3.88 3.88 40
45 3.83 3.88 3.92 3.95 3.98 4.00 4.01 4.02 4.03 4.03 45
50 3.92 3.98 4.04 4.09 4.13 4.17 4.19 4.21 4.22 4.23 50
55 4.01 4.09 4.17 4.24 4.31 4.37 4.42 4.45 4.47 4.49 55
60 4.12 4.21 4.31 4.42 4.52 4.61 4.69 4.75 4.79 4.82 60
65 4.24 4.35 4.47 4.60 4.75 4.89 5.02 5.12 5.20 5.26 65
70 4.38 4.50 4.64 4.81 5.00 5.20 5.40 5.59 5.73 5.84 70
75 4.54 4.67 4.84 5.04 5.27 5.54 5.84 6.14 6.40 6.61 75
80 4.72 4.87 5.05 5.28 5.56 5.90 6.30 6.75 7.19 7.58 80
85 4.90 5.07 5.27 5.53 5.85 6.26 6.77 7.39 8.05 8.71 85
PANA+C92 Page 36 of 37 4/92
PANORAMA PLUS
FIXED AND VARIABLE DEFERRED ANNUITY CERTIFICATE
Single or Periodic Purchase Payments
Nonparticipating
PAYMENTS AND VALUES PROVIDED BY THE SEPARATE ACCOUNT PORTION OF THIS CERTIFICATE
ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
56
<PAGE>
Exhibit 5
Form of Application
57
<PAGE>
<TABLE>
<S> <C> <C>
------------------------
[LOGO OF CM LIFE P A N O R A M A P L U S Certificate Number
APPEARS HERE] ------------------------
------------------
Fixed and Variable Deferred Annuity Certificate Application (H.O. USE ONLY)
--------------------
</TABLE>
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
1. ANNUITANT INFORMATION
- ----------------------------------------------------------------------------------------------------------------------------------
a. Name (First MI. Last) b. Social Security Number
- ----------------------------------------------------------------------------------------------------------------------------------
c. Address (No.. Street, City. State, Zip) d. Birth Date (Mo/Day/Yr)
- ----------------------------------------------------------------------------------------------------------------------------------
e. Sex [_] M [_] F f. Occupation g. Telephone Number
( )
- ----------------------------------------------------------------------------------------------------------------------------------
2. CONTINGENT ANNUITANT INFORMATION NOTE: Not applicable to 403(b), IRA, SEP/IRA
- ----------------------------------------------------------------------------------------------------------------------------------
a. Name (First, MI. Last) b. Social Security Number
- ----------------------------------------------------------------------------------------------------------------------------------
c. Address (No.. Street, City, State, Zip) d. Birth Date (Mo/Day/Yr)
- ----------------------------------------------------------------------------------------------------------------------------------
e. Sex [_] M [_] F f. Occupation g. Telephone Number
( )
- ----------------------------------------------------------------------------------------------------------------------------------
3. PARTICIPANT INFORMATION NOTE: Joint Ownership Not Allowed . Must be same as Annuitant if 403(b), IRA, SEP/IRA
- ----------------------------------------------------------------------------------------------------------------------------------
Same as Annuitant: [_] a. Name (First, MI. Last) b. Tax I.D./Soc. Sec. Number
- ----------------------------------------------------------------------------------------------------------------------------------
c. Address (No., Street, City, State, Zip) d. Birth Date (Mo/Day/Year)
e. Telephone Number
( )
- ----------------------------------------------------------------------------------------------------------------------------------
4. BENEFICIARY INFORMATION: (Use Item 12. Miscellaneous Instructions/Comments if other than a natural person or for additional
instructions.)
- ----------------------------------------------------------------------------------------------------------------------------------
4a. Primary Beneficiary: a. Name (First, MI. Last) b. Relationship c. Social Security Number
- ----------------------------------------------------------------------------------------------------------------------------------
d. Address (No., Street, City, State, Zip) e. Birth Date (Mo/Day/Yr) f. Telephone Number
( )
- ----------------------------------------------------------------------------------------------------------------------------------
4b. Secondary Beneficiary(ies): a. Name (First, MI. Last) b. Relationship c. Social Security Number
- ----------------------------------------------------------------------------------------------------------------------------------
d. Address (No.. Street, City, State, Zip) e. Birth Date (Mo/Day/Yr) f. Telephone Number
( )
- ----------------------------------------------------------------------------------------------------------------------------------
a. Name (First, MI. Last) b. Relationship c. Social Security Number
- ----------------------------------------------------------------------------------------------------------------------------------
d. Address (No., Street, City, State, Zip) e. Birth Date (Mo/Day/Yr) f. Telephone Number
( )
- ----------------------------------------------------------------------------------------------------------------------------------
5. PLAN INFORMATION
- ----------------------------------------------------------------------------------------------------------------------------------
Non-Qualified Qualified
------------- ----------------------------------------------------------------------------------------------------
[_] Individual Plan [_] IRA (check one): Regular Rollover Transfer [_] Self Employed, Plan Type
------ ------- --------
Deduction Tax Year [_] 457 Deferred Compensation Plan
---------
[_] Simplified Employee Pension IRA
[_] Corporate Plan Type
----------------
[_] 403(b) TSA Plan (check one): Regular Transfer
------ --------
- ----------------------------------------------------------------------------------------------------------------------------------
--------------
6. INVESTMENT Initial Investment $ (Minimum: $500)
--------------
- ----------------------------------------------------------------------------------------------------------------------------------
7. ACCOUNT ALLOCATION
- ----------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
NOTE: Please use whole percentages. Account Description Initial Allocation % Future Allocation %
Leave Future Allocation % blank if the ---------------------------------------------------------------------------------------
same as Initial Allocation % Written General Account
notification is required to change -------------- --------------
allocation schedule. Growth Sub-Account
-------------- --------------
International Equity Sub-Account
-------------- --------------
Money Market Sub-Account
-------------- --------------
Income Sub-Account
-------------- --------------
Total Return Sub-Account
-------------- --------------
Government Securities Sub-Account
-------------- --------------
---------------------------------------------------------------------------------------
TOTAL l00% 100%
---------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------
8. ANNUITY INCOME DATE NOTE: Restrictions apply, see Prospectus (Mo/Day/Yr):
-------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
9. HEALTH INFORMATION 10. ANNUITY ACTIVITY
- ----------------------------------------------------------------------------------------------------------------------------------
Do you have any reason to believe that the Death Benefit will Have you purchased another Connecticut Mutual Life or CM. Life
become payable to the Beneficiary in the first Certificate Annuity in the past 12 months? Yes [_] No [_]
Year? Yes [_] No [_]
- ----------------------------------------------------------------------------------------------------------------------------------
11. ANNUITY OPTIONS
- ----------------------------------------------------------------------------------------------------------------------------------
[_] Option A Life Income [_] Option D Joint and 2/3 Survivor
[_] Option B Life Income with Period Certain: [_] 5 Yr. [_] 10 Yr. [_] 20 Yr. [_] Option E Period Certain: # of Years____
[_] Option C Joint and Last Survivor [_] Option F Special Agreement
Note: If no election is made 30 days before the Income Date, payments will be made under Option B with 10 Years Period Certain.
- ----------------------------------------------------------------------------------------------------------------------------------
12. MISCELLANEOUS INSTRUCTIONS/COMMENTS
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
13. ANNUITANT AND PARTICIPANT SIGNATURE
- ----------------------------------------------------------------------------------------------------------------------------------
I hereby represent that the above information is correct and true to the best of my knowledge and belief and agree that this
application shall be a part of the Panorama Plus Certificate issued by the Company. ALL PAYMENTS AND VALUES PROVIDED BY THE
CERTIFICATE BEING APPLIED FOR WHEN BASED ON INVESTMENT EXPERIENCE OF A VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT. I acknowledge receipt of a current Panorama Plus Separate Account Prospectus and Connecticut Mutual Financial
Services Series Fund I Prospectus.
Would you like to receive the Statement of Additional Information which further describes the Panorama Plus Certificate? [_] Yes
[_] No
Under penalties of perjury, I, the Participant certify that the taxpayer identification number given on this Application is correct
I also certify that: (Check one)
a. [_] I am not currently subject to backup withholding became of notification by the IRS, or
b. [_] I am exempt from backup withholding, or
c. [_] I am currently subject to backup withholding.
Signed at: on: / /
----------------------------- ------------------ -------------------
City State Date
Annuitant's Signature Contingent Annuitant's Signature
--------------------------------------- ---------------------------
(If applicable)
Participant's Signature
-------------------------------------
(If other than the Annuitant)
- ----------------------------------------------------------------------------------------------------------------------------------
14. AGENT REPLACEMENT INFORMATION
- ----------------------------------------------------------------------------------------------------------------------------------
Will the annuity applied for replace or change any existing individual or group life insurance or annuity? If yes, I have complied
with all state replacement requirements. Required replacement forms and information must be submitted to the Company. [_] Yes [_] No
Is this replacement meant to be a tax-free exchange under Section 1035? [_] Yes [_] No
WITNESS CML's 5 digit Commission
Signature of Licensed Agent(s) Printed Name of Agent Agent Code % Split
(1)
----------------------------------------- -------------------------- ---------- -------------
(2)
----------------------------------------- -------------------------- ---------- -------------
(3)
----------------------------------------- -------------------------- ---------- -------------
- -------------------------------------------- -------------------------------------------------------------------------
GA Name Agency Address City State Zip
( ) Dealer Name and Address
- ----------------------- ----------------------- --------------------------------------------------
Agency Number Agency Telephone Number -------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Make check(s) payable to C.M. Life and mail this signed Application and the check to: CM. Life insurance Company
Annuity Service Center
140 Garden Street, M.S. 305
Hartford, CT 06154
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 9 Opinion of and Consent of Counsel
April, 1998
C.M. Life Insurance Company
140 Garden Street
Hartford, CT 06154
Re: Post-Effective Amendment No. 8 to Registration Statement
No. 33-45122 filed on Form N-4
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of Post-Effective
Amendment No. 8 to Registration Statement No. 33- 45122 on Form N-4 under the
Securities Act of 1933 for C.M. Life Insurance Company's ("CM Life") flexible
premium variable annuity contract (the "Contract"). Panorama Plus Separate
Account issues the Contract.
As Attorney for CM Life, I provide legal advice to CM Life in connection with
the operation of its variable products. In such role I am familiar with the
Post-Effective Amendment for the Contract. In so acting, I have made such
examination of the law and examined such records and documents as in my judgment
are necessary or appropriate to enable me to render the opinion expressed below.
I am of the following opinion:
1. CM Life is a valid and subsisting corporation, organized and operated under
the laws of the state of Connecticut and is subject to regulation by the
Connecticut Commissioner of Insurance.
2. Panorama Plus is a separate account validly established and maintained by CM
Life in accordance with Connecticut law.
3. All of the prescribed corporate procedures for the issuance of the Contract
have been followed, and all applicable state laws have been complied with.
I hereby consent to the use of this opinion as an exhibit to this Post-Effective
Amendment.
Very truly yours,
/s/ Lynn S. Mercier
Lynn S. Mercier
Attorney
58
<PAGE>
Exhibit 10(i)
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
To the Board of Directors of
C.M. Life Insurance Company
We consent to the inclusion in this Post-Effective Amendment No. 8 to the
Registration Statement of Panorama Plus Separate Account on Form N-4
(Registration No. 33-45122), of our report, dated March 11, 1998 on our audits
of the Panorama Plus Separate Account, and of our report dated February 6, 1998
on our audits of the statutory financial statements of C.M. Life Insurance
Company, which includes explanatory paragraphs relating to the use of statutory
accounting practices, which differ from generally accepted accounting
principles. We also consent to the reference to our Firm under the caption
"Independent Accountants."
Coopers & Lybrand, L.L.P.
Springfield, Massachusetts
April 24, 1998
59
<PAGE>
Exhibit 10(ii)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our report
(and to all references to our Firm) included in or made a part of this
registration statement for Panorama Plus Separate Account of C.M. Life Insurance
Company.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
April 24, 1998
60
<PAGE>
Exhibit 10(iii)
Report Of Independent Public Accountants
To the Board of Directors of
C.M. Life Insurance Company:
We have audited the accompanying statutory statements of income, changes in
capital stock and surplus and cash flows of C.M. Life Insurance Company (a
Connecticut corporation and a wholly-owned subsidiary of Connecticut Mutual Life
Insurance Company) for the year ended December 31, 1995. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion.
In our originally issued report dated February 15, 1996, we expressed an opinion
that the 1995 financial statements, prepared using accounting practices
prescribed or permitted by the Insurance Department of the State of Connecticut,
presented fairly, in all material respects, the financial position of C.M. Life
Insurance Company as of December 31, 1995, and the results of its operations and
its cash flows for the year ended December 31, 1995 in conformity with generally
accepted accounting principles. Pursuant to the provisions of Statement of
Financial Accounting Standards No. 120 (SFAS No. 120), Accounting and Reporting
by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain
Long-Duration Participating Contracts, financial statements of mutual life
insurance enterprises for periods ending on or before December 15, 1996,
prepared using accounting practices prescribed or permitted by insurance
regulators (statutory financial statements) are no longer considered
presentations in conformity with generally accepted accounting principles when
presented for comparative purposes with the enterprise's financial statements
for periods subsequent to the effective date of SFAS No. 120. Accordingly, our
present opinion on the presentation of the 1995 financial statements in
accordance with generally accepted accounting principles, as presented herein,
is different from that expressed in our previous report.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the results of
operations and cash flows of C.M. Life Insurance Company for the year ended
December 31, 1995.
In our opinion, the financial statements referred to above do present fairly, in
all material respects, the results of operations and cash flows of C.M. Life
Insurance Company for the year ended December 31, 1995 in conformity with
accounting practices prescribed or permitted by the Insurance Department of the
State of Connecticut.
Arthur Andersen LLP
Hartford, Connecticut
February 15, 1996
61
<PAGE>
EXHIBIT 13
PANORAMA PLUS
SCHEDULE OF COMPUTATION OF PERFORMANCE
The following examples are calculated in accordance with the methods Described
in the Prospectus and Statement of Additional Information:
1. Standardized Average One Year Total Return
Assuming experience from the Growth Sub-Account, on a
$ 1,000 Purchase Payment on 12/31/96
A $30 Annual Contract Maintenance Charge was assessed on each contract
anniversary. For this calculation, it is prorated among divisions, with 37%
allocated to the Growth Sub-Account
The Deferred Sales Load for a Single Purchase Payment Contract on 12/31/1996
would have been 5%. The 10% free corridor was also applicable.
<TABLE>
<S> <C> <C>
Dates
12/31/96 2.01486400
12/31/97 2.51728200
The Standardized Average One Year Total Return for the period 12/31/96-12/31/97: 18.25%
Accumulated Value on 12/31/1997
((1000/2.01486400) x 2.51728200) - (.37 x 30) $1,238.26
Ending Redeemable Value on 12/31/1997
1238.26 - .05 x (1238.26 -.10 x 1238.26) $1,182.53
Standardized Average One Year Total Return, 12/31/96 - 12/31/97
((1182.53 / 1000 )- 1) x 100 18.25%
</TABLE>
62
<PAGE>
2 Annualized Accumulation Unit Value (AUV) Return
For a one year period, the annualized AUV return is equal to the percentage
change in accumulation unit values.
For periods greater than one year, the annualized AUV return is an average
annual change in accumulation unit values, based on the percentage change.
Assuming experience from the Growth Sub-Account
Unit Value 12/31/94 1.25814600
Unit Value 12/31/97 2.51728200
<TABLE>
<S> <C>
Percentage Change in Unit Values for the 3 year period ending 12/31/97 100.08%
(2.51728200 - 1.25814600) /1.25814600 x 100
Annualized AUV Return for the 3 year period ending 12/31/97
((1+1.0008)/_/ (1/3) - 1) x 100 26.01%
The symbol /_/ is being used to denote exponentiation.
</TABLE>
3 7-day Money Market Yield and Effective Yield
Assuming experience from the Money Market Division
For the period ending 12/31/97
Unit Value 12/24/97 1.19394600
Unit Value 12/26/97 1.19438500
Unit Value 12/31/97 1.19471300
To get the change in value from 12/24/97 to 12/26/97, take 100% of the change
from 12/24/97 to 12/26/97:
(1.19438500/1.19394600)-1 0.000368
Change in value from 12/27/97 to 12/31/97:
(1.19471300/1.19438500)-1 0.000275
Combine to get change in value from 12/24/96 to 12/31/96:
(0.000368+0.000275) 0.000643
<TABLE>
<S> <C> <C>
Yield: .000643 x (365/7) x 100 = 3.35%
Effective Yield: ((1.000643)/_/(365/7) -1) x 100 = 3.41%
The symbol /_/ is being used to denote exponentiation.
</TABLE>
63
<PAGE>
4 Non-Standardized Average Annual Total Return
Assuming experience from the Oppenheimer Bond Sub-Account
Purchase Payment 12/31/87 $50,000
Accumulated Value 12/31/97 $110,168
Average Annual Total Return 8.22%
((110,168 / 50,000) /_/ (1/10) - 1 ) x 100
The symbol /_/ is being used to denote exponentiation.
5 Non-Standardized One Year Total Return
Assuming experience from the Panorama Growth Sub-Account
Purchase Payment 12/31/87 $50,000
Accumulated Value 12/31/96 $197,059
Accumulated Value 12/31/97 $246,167
One Year Total Return 24.92%
((246,167-197,059) /197,059 ) x 100
64
