<PAGE>
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENT OF ADDITIONAL INFORMATION
FOR THE
MARQUEE VARIABLE ANNUITY
Offered by
Providian Life and Health Insurance Company
(A Missouri Stock Company)
Administrative Offices
P.O. Box 32700
Louisville, Kentucky 40232
----------
This Statement of Additional Information expands upon subjects discussed in the
current Prospectus for the Marquee variable annuity contract (the "Contract")
offered by Providian Life and Health Insurance Company (the "Company"). You may
obtain a copy of the Prospectus dated May 1, 1995, as revised July 1, 1995, by
calling 1-800-866-6007 or by writing to our Administrative Offices, P.O. Box
32700, Louisville, Kentucky 40232. 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 PROSPECTUS FOR THE CONTRACT.
May 1, 1995, as revised July 1, 1995 and December __, 1995
TABLE OF CONTENTS PAGE
- ----------------- ----
THE CONTRACT................................................................. 2
Computation of Variable Annuity Income Payments............................. 2
Exchanges................................................................... 3
Exceptions to Charges....................................................... 3
GENERAL MATTERS.............................................................. 3
Non-Participating........................................................... 3
Misstatement of Age or Sex.................................................. 3
Assignment.................................................................. 4
Annuity Data................................................................ 4
Annual Statement............................................................ 4
Incontestability............................................................ 4
Ownership................................................................... 4
PERFORMANCE INFORMATION...................................................... 4
Money Market Subaccount Yields.............................................. 5
30-Day Yield for Non-Money Market Subaccounts............................... 5
Standardized Average Annual Total Return for Non-Money Market Subaccounts... 7
ADDITIONAL PERFORMANCE MEASURES.............................................. 7
Non-Standardized Actual Total Return and Non-Standardized Actual Average
Annual Total Return....................................................... 7
Non-Standardized Hypothetical Total Return and Non-Standardized
Hypothetical Average Annual Total Return.................................. 10
Individualized Computer Generated Illustrations............................ 29
PERFORMANCE COMPARISONS..................................................... 29
SAFEKEEPING OF ACCOUNT ASSETS............................................... 31
THE COMPANY................................................................. 31
STATE REGULATION............................................................ 31
RECORDS AND REPORTS......................................................... 32
DISTRIBUTION OF THE CONTRACTS............................................... 32
LEGAL PROCEEDINGS........................................................... 32
OTHER INFORMATION........................................................... 32
FINANCIAL STATEMENTS........................................................ 32
<PAGE>
THE CONTRACT
In order to supplement the description in the Prospectus, the following provides
additional information about the Contract which may be of interest to Contract
Owners.
COMPUTATION OF VARIABLE ANNUITY INCOME PAYMENTS
The amounts shown in the Annuity Tables contained in your Contract represent the
guaranteed minimum for each Annuity Payment under a Fixed Payment Option.
Variable annuity income payments are computed as follows. First, the
Accumulated Value (or the portion of the Accumulated Value used to provide
variable payments) is applied under the Annuity Tables contained in your
Contract corresponding to the Annuity Payment Option elected by the Contract
Owner and based on an assumed interest rate of 4%. This will produce a dollar
amount which is the first monthly payment. The Company may, at the time annuity
income payments are computed, offer more favorable rates in lieu of the
guaranteed rates specified in the Annuity Tables.
The amount of each Annuity Payment after the first is determined by means of
Annuity Units. The number of Annuity Units is determined by dividing the first
Annuity Payment by the Annuity Unit Value for the selected Subaccount ten
Business Days prior to the Annuity Date. The number of Annuity Units for the
Subaccount then remains fixed, unless an Exchange of Annuity Units (as set forth
below) is made. After the first Annuity Payment, the dollar amount of each
subsequent Annuity Payment is equal to the number of Annuity Units multiplied by
the Annuity Unit Value for the Subaccount ten Business Days before the due date
of the Annuity Payment.
The Annuity Unit Value for each Subaccount was initially established at $10.00
on the date money was first deposited in that Subaccount. The Annuity Unit
Value for any subsequent Business Day is equal to (a) times (b) times (c), where
(a) = the Annuity Unit Value for the immediately preceding Business Day;
(b) = the Net Investment Factor for the day;
(c) = the investment result adjustment factor (.99989255 per day), which
recognizes an assumed interest rate of 4% per year used in
determining the Annuity Payment amounts.
The Net Investment Factor is a factor applied to a Subaccount that reflects
daily changes in the value of the Subaccount due to:
(a) = any increase or decrease in the value of the Subaccount due to
investment results;
(b) = a daily charge for the mortality and expense risks assumed by the
Company corresponding to an annual rate according to the following
schedule:
A Unit Contracts .65%
B Unit Contracts 1.25%
(c) = a daily charge for the cost of administering the Contract
corresponding to an annual charge of .15% of the value of the
Subaccount, plus the Annual Contract Fee.
The Annuity Tables contained in the Contract are based on the 1983 Table "A"
Mortality Table projected for mortality improvement to the year 2000 using
Projection Scale G and an interest rate of 4% a year; except that in
2
<PAGE>
Massachusetts and Montana, the Annuity Tables contained in the Contract are
based on a 60% female/40% male blending of the above for all annuitants of
either gender.
EXCHANGES
After the Annuity Date you may, by making a written request, exchange the
current value of an existing Subaccount to Annuity Units of any other
Subaccount(s) then available. The written request for an Exchange must be
received by us, however, at least 10 Business Days prior to the first payment
date on which the Exchange is to take effect. An Exchange shall result in the
same dollar amount as that of the Annuity Payment on the date of Exchange (the
Exchange Date). Each year you may make an unlimited number of free Exchanges
between Subaccounts. We reserve the right to charge a $15 fee in the future for
Exchanges in excess of twelve per Contract Year.
Exchanges will be made using the Annuity Unit Value for the Subaccounts on the
date the written request for Exchange is received. On the Exchange Date, the
Company will establish a value for the current Subaccounts by multiplying the
Annuity Unit Value by the number of Annuity Units in the existing Subaccounts
and compute the number of Annuity Units for the new Subaccounts by dividing the
Annuity Unit Value of the new Subaccounts into the value previously calculated
for the existing Subaccounts.
EXCEPTIONS TO CHARGES
In addition to the Purchase Payment breakpoints discussed in the Prospectus, the
Company may impose reduced sales loads, administrative charges or other
deductions from Purchase Payments in certain situations where the Company
expects to realize significant economies of scale or other economic benefits
with respect to the sales of Contracts. This is possible because sales costs do
not increase in proportion to the dollar amount of the Contracts sold. For
example, the per-dollar transaction cost for a sale of a Contract equal to
$5,000 is generally much higher than the per-dollar cost for a sale of Contract
equal to $1,000,000. As a result, the applicable sales charge declines as a
percentage of the dollar amount of Contracts sold as the dollar amount
increases.
The Company may also impose reduced sales loads and reduced administrative
charges and fees on sales to directors, officers and bona fide full-time
employees (and their spouses and minor children) of the Company, its ultimate
parent company, Providian Corporation, and certain of their affiliates and
certain sales representatives for the Contract.
Notwithstanding the above, any variations in the sales loads, administrative
charges or other deductions from Purchase Payments shall reflect differences in
costs or services and shall not be unfairly discriminatory against any person.
GENERAL MATTERS
NON-PARTICIPATING
The Contracts are non-participating. No dividends are payable and the Contracts
will not share in the profits or surplus earnings of the Company.
MISSTATEMENT OF AGE OR SEX
The Company may require proof of age and sex before making Annuity Payments. If
the Annuitant's stated age, sex or both in the Contract are incorrect, the
Company will change the annuity benefits payable to those benefits which the
Purchase Payments would have purchased for the correct age and sex. In the case
of correction of the
3
<PAGE>
stated age and/or sex after payments have commenced, the Company will (1) in the
case of underpayment, pay the full amount due with the next payment; (2) in the
case of overpayment, deduct the amount due from one or more future payments.
ASSIGNMENT
Any Non-Qualified Contract may be assigned by you prior to the Annuity Date and
during the Annuitant's lifetime. The Company is not responsible for the validity
of any assignment. No assignment will be recognized until the Company receives
the appropriate Company form notifying the Company of such assignment. The
interest of any beneficiary which the assignor has the right to change shall be
subordinate to the interest of an assignee. Any amount paid to the assignee
shall be paid in one sum notwithstanding any settlement agreement in effect at
the time assignment was executed. The Company shall not be liable as to any
payment or other settlement made by the Company before receipt of the
appropriate Company form.
ANNUITY DATA
The Company will not be liable for obligations which depend on receiving
information from a Payee until such information is received in a form
satisfactory to the Company.
ANNUAL STATEMENT
Once each Contract Year, the Company will send you an annual statement of the
current Accumulated Value allocated to each Subaccount and/or the General
Account Guaranteed Options; and any Purchase Payments, charges, Exchanges or
withdrawals during the year. This report will also give you any other
information required by law or regulation. You may ask for an annual statement
like this at any time. We will also send you quarterly statements. However, we
reserve the right to discontinue quarterly statements at any time.
INCONTESTABILITY
This Contract is incontestable from the Contract Date, subject to the
"Misstatement of Age or Sex" provision.
OWNERSHIP
The Contract Owner on the Contract Date is the Annuitant, unless otherwise
specified in the application. The Contract Owner may specify a new Contract
Owner by sending us the appropriate Company form at any time thereafter. The
term Contract Owner also includes any person named as a Joint Owner. A Joint
Owner shares ownership in all respects with the Contract Owner. During the
Annuitant's lifetime, all rights and privileges under this Contract may be
exercised solely by the Contract Owner. Upon the death of the Contract Owner,
ownership is retained by the surviving Joint Owner or passes to the Owner's
Designated Beneficiary, if one has been designated by the Contract Owner. If no
Owner's Designated Beneficiary has been selected or if no Owner's Designated
Beneficiary is living, then the Owner's Designated Beneficiary is the Contract
Owner's estate. From time to time the Company may require proof that the
Contract Owner is still living.
PERFORMANCE INFORMATION
Performance information for the Subaccounts including the yield and effective
yield of the Fidelity Money Market Subaccount, the yield of the remaining
Subaccounts, and the total return of all Subaccounts, may appear in reports or
promotional literature to current or prospective Contract Owners.
4
<PAGE>
MONEY MARKET SUBACCOUNT YIELDS
Current yield for the Fidelity Money Market Subaccount will be based on the
change in the value of a hypothetical investment (exclusive of capital changes)
over a particular 7-day period, less a pro-rata share of Subaccount expenses
accrued over that period (the "base period"), and stated as a percentage of the
investment at the start of the base period (the "base period return"). The base
period return is then annualized by multiplying by 365/7, with the resulting
yield figure carried to at least the nearest hundredth of one percent.
Calculation of "effective yield" begins with the same "base period return" used
in the calculation of yield, which is then annualized to reflect weekly
compounding pursuant to the following formula:
Effective Yield = [((Base Period Return)+1)/365/7/] - 1
30-DAY YIELD FOR NON-MONEY MARKET SUBACCOUNTS
Quotations of yield for the remaining Subaccounts will be based on all
investment income per Unit earned during a particular 30-day period, less
expenses accrued during the period ("net investment income"), and will be
computed by dividing net investment income by the value of a Unit on the last
day of the period, according to the following formula:
YIELD = 2[(a-b+1)/6/ - 1]
---
cd
Where:
[a] equals the net investment income earned during the period by the
Portfolio attributable to shares owned by a Subaccount
[b] equals the expenses accrued for the period (net of reimbursement)
[c] equals the average daily number of Units outstanding during the
period
[d] equals the maximum offering price per Accumulation Unit on the
last day of the period
Yield on a Subaccount is earned from the increase in net asset value of shares
of the Portfolio in which the Subaccount invests and from dividends declared and
paid by the Portfolio, which are automatically reinvested in shares of the
Portfolio.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR NON-MONEY MARKET SUBACCOUNTS
When advertising performance of the Subaccounts, the Company will show the
"Standardized Average Annual Total Return," calculated as prescribed by the
rules of the SEC, for each Subaccount. 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 the deduction of all applicable sales loads (including the
contingent deferred sales load), the Annual Contract Fee and all other
Portfolio, Separate Account and Contract level charges except Premium Taxes, if
any.
Quotations of average annual total return for any Subaccount will be expressed
in terms of the average annual compounded rate of return of a hypothetical
investment in a Contract over a period of one, five and ten years (or, if less,
up to the life of the Subaccount), calculated pursuant to the formula:
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<PAGE>
P(1 + T)/n/ = ERV
Where:
(1) [P] equals a hypothetical initial Purchase Payment of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a hypothetical $1,000
Purchase Payment made at the beginning of the period (or fractional
portion thereof)
The following tables show the Standardized Average Annual Total Return for the
Subaccounts for the period beginning at the inception of each Subaccount and
ending on December 31, 1994.
A UNIT PERFORMANCE FOR PERIOD ENDING DECEMBER 31, 1994
Subaccount Since Inception
---------- ---------------
Fidelity Money Market Portfolio (10.06)%
Fidelity Equity-Income Portfolio (47.08)%
Fidelity Growth Portfolio 0.67%
Fidelity Asset Manager Portfolio (19.26)%
Dreyfus Growth and Income Portfolio (30.40)%
Dreyfus Quality Bond Portfolio (30.64)%
TRP Equity Income Portfolio 0.00%
TRP New America Growth Portfolio (47.64)%
TRP International Stock Portfolio (20.63)%
Quest for Value Managed Portfolio (46.63)%
Quest for Value Small Cap Portfolio (26.49)%
Quest for Value Government Income Portfolio (40.20)%
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B UNIT PERFORMANCE FOR PERIOD ENDING DECEMBER 31, 1994
Subaccount Since Inception
---------- ----------------
Fidelity Money Market Portfolio (12.95)%
Fidelity Equity-Income Portfolio (23.64)%
Fidelity Growth Portfolio (12.83)%
Fidelity Asset Manager Portfolio (30.37)%
Dreyfus Growth and Income Portfolio (30.52)%
Dreyfus Quality Bond Portfolio (18.52)%
TRP Equity Income Portfolio (23.17)%
TRP New America Growth Portfolio (47.64)%
TRP International Stock Portfolio (20.63)%
Quest for Value Managed Portfolio (45.07)%
Quest for Value Small Cap Portfolio (26.19)%
Quest for Value Government Income N/A%
Portfolio
ADDITIONAL PERFORMANCE MEASURES
NON-STANDARDIZED ACTUAL TOTAL RETURN AND NON-STANDARDIZED ACTUAL AVERAGE ANNUAL
TOTAL RETURN
The Company may show Non-Standardized Actual Total Return (i.e., the percentage
change in the value of an Accumulation Unit) for one or more Subaccounts with
respect to one or more periods. The Company may also show Non-Standardized
Actual Average Annual Total Return (i.e., the average annual change in
Accumulation Unit Value) with respect to one or more periods. For one year, the
Non-Standardized Actual Total Return and the Non-Standardized Actual Average
Annual Total Return are effective annual rates of return and are equal. For
periods greater than one year, the Non-Standardized Actual Average Annual Total
Return is the effective annual compounded rate of return for the periods stated.
Because the value of an Accumulation Unit reflects the Separate Account and
Portfolio expenses (See Fee Table in the Prospectus), the Non-Standardized
Actual Total Return and Non-Standardized Actual Average Annual Total Return also
reflect these expenses. However, these percentages do not reflect the Annual
Contract Fee, any sales loads or Premium Taxes (if any), which if included would
reduce the percentages reported by the Company.
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<PAGE>
NON-STANDARDIZED ACTUAL TOTAL RETURN FOR PERIOD ENDING 12/31/94
A UNITS Since Inception
------- ---------------
Fidelity Money Market Portfolio 2.61%
Fidelity Equity-Income Portfolio (13.49)%
Fidelity Growth Portfolio 16.06%
Fidelity Asset Manager Portfolio (6.91)%
Dreyfus Growth and Income Portfolio (12.82)%
Dreyfus Quality Bond Portfolio 14.66%
TRP Equity Income Portfolio 0.00%
TRP New America Growth Portfolio (14.41)%
TRP International Stock Portfolio (8.49)%
Quest for Value Managed Portfolio (12.68)%
Quest for Value Small Cap Portfolio 20.15%
Quest for Value Government Income (1.15)%
Portfolio
B UNITS Since Inception
------- ---------------
Fidelity Money Market Portfolio 1.10%
Fidelity Equity-Income Portfolio (9.83)%
Fidelity Growth Portfolio 2.93%
Fidelity Asset Manager Portfolio (14.17)%
Dreyfus Growth and Income Portfolio (16.38)%
Dreyfus Quality Bond Portfolio (3.79)%
TRP Equity Income 0.00%
TRP New America Growth Portfolio 0.00%
TRP International Stock Portfolio (8.49)%
Quest for Value Managed Portfolio (18.91)%
Quest for Value Small Cap Portfolio 9.70%
Quest for Value Government Income Portfolio NA%
8
<PAGE>
NON-STANDARDIZED ACTUAL AVERAGE ANNUAL TOTAL RETURNS FOR PERIOD ENDING 12/31/94
A UNITS Since Inception
------- ---------------
Fidelity Money Market Portfolio 2.61%
Fidelity Equity-Income Portfolio (13.49)%
Fidelity Growth Portfolio 16.06%
Fidelity Asset Manager Portfolio (6.91)%
Dreyfus Growth and Income Portfolio (12.82)%
Dreyfus Quality Bond Portfolio 14.66%
TRP Equity Income Portfolio 0.00%
TRP New America Growth Portfolio (14.41)%
TRP International Stock Portfolio (8.49)%
Quest for Value Managed Portfolio (12.68)%
Quest for Value Small Cap Portfolio 20.15%
Quest for Value Government Income Portfolio (1.15)%
B UNITS Since Inception
------- ---------------
Fidelity Money Market Portfolio 1.10%
Fidelity Equity-Income Portfolio (9.83)%
Fidelity Growth Portfolio 2.93%
Fidelity Asset Manager Portfolio (14.17)%
Dreyfus Growth and Income Portfolio (16.38)%
Dreyfus Quality Bond Portfolio (3.79)%
TRP Equity Income Portfolio (7.40)%
TRP New America Growth Portfolio (14.41)%
TRP International Stock Portfolio (13.81)%
Quest for Value Managed Portfolio (18.91)%
Quest for Value Small Cap Portfolio 9.70%
Quest for Value Government Income Portfolio NA
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<PAGE>
NON-STANDARDIZED HYPOTHETICAL TOTAL RETURN AND NON-STANDARDIZED HYPOTHETICAL
AVERAGE ANNUAL TOTAL RETURN*
The Company may show Non-Standardized Hypothetical Total Return and Non-
Standardized Hypothetical Average Annual Total Return, calculated on the basis
of the historical performance of the Portfolios (calculated beginning from the
end of the year of inception for each Portfolio) and may assume the Contract was
in existence prior to its inception date (which it was not). After the
Contract's inception date, actual Accumulation Unit Values are used for the
calculations. These returns are based on specified premium patterns which
produce the resulting Accumulated Values. They reflect a deduction for the
Separate Account expenses and Portfolio expenses. However, they do not include
the Annual Contract Fee, any sales loads or Premium Taxes (if any), which if
included would reduce the percentages reported.
The Non-Standardized Annual Total Return for a Subaccount 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 Subaccount 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.
HYPOTHETICAL TOTAL RETURNS FOR PERIODS ENDING 12/31/94
(BASED ON SINGLE INITIAL PURCHASE)
A UNITS 1 Year 3 Year
------- ------ ------
Fidelity Money Market Portfolio 3.45% 8.99%
Fidelity Equity-Income Portfolio 6.27% 44.30%
Fidelity Growth Portfolio (0.82)% 27.17%
Fidelity Asset Manager Portfolio (6.89)% 23.96%
Dreyfus Growth and Income Portfolio NA NA
Dreyfus Quality Bond Portfolio (5.39)% 20.22%
TRP Equity Income Portfolio NA NA
TRP New America Growth Portfolio NA NA
TRP International Stock Portfolio NA NA
Quest for Value Managed Portfolio (7.84)% NA
Quest for Value Small Cap Portfolio (17.97)% NA
Quest for Value Government Income Portfolio NA NA
Since Inception
A UNITS 5 Year Year-End
------- ------ ---------------
Fidelity Money Market Portfolio 23.36% 87.45%
Fidelity Equity-Income Portfolio 58.96% 121.50%
Fidelity Growth Portfolio 61.62% 149.44%
Fidelity Asset Manager Portfolio 60.42% 60.42%
Dreyfus Growth and Income Portfolio NA (1.75)%
Dreyfus Quality Bond Portfolio 38.85% 38.85%
TRP Equity Income Portfolio NA 4.75%
TRP New America Growth Portfolio NA 0.14%
TRP International Stock Portfolio NA 0.75%
Quest for Value Managed Portfolio (25.79)% (6.35)%
Quest for Value Small Cap Portfolio (19.77)% (7.45)%
Quest for Value Government Income Portfolio NA (0.45)%
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<PAGE>
B UNITS 1 Year 3 Year
------- ------ ------
Fidelity Money Market Portfolio 2.85% 7.02%
Fidelity Equity-Income Portfolio 5.67% 41.70%
Fidelity Growth Portfolio (1.42)% 24.88%
Fidelity Asset Manager Portfolio (7.49)% 21.73%
Dreyfus Growth and Income Portfolio NA NA
Dreyfus Quality Bond Portfolio (5.99)% 18.05%
TRP Equity Income Portfolio NA NA
TRP New America Growth Portfolio NA NA
TRP International Stock Portfolio NA NA
Quest for Value Managed Portfolio (8.44)% NA
Quest for Value Small Cap Portfolio (18.57)% NA
Quest for Value Government Income Portfolio NA NA
Since Inception
B UNITS 5 Year Year-End
------- ------ ---------------
Fidelity Money Market Portfolio 19.85% 76.09%
Fidelity Equity-Income Portfolio 54.66% 112.05%
Fidelity Growth Portfolio 57.26% 138.95%
Fidelity Asset Manager Portfolio 56.09% 56.09%
Dreyfus Growth and Income Portfolio NA (2.16)%
Dreyfus Quality Bond Portfolio 35.00% 35.00%
TRP Equity Income Portfolio NA 4.30%
TRP New America Growth Portfolio NA (0.30)%
TRP International Stock Portfolio NA 0.30%
Quest for Value Managed Portfolio (28.12)% (9.71)%
Quest for Value Small Cap Portfolio (22.25)% (10.77)%
Quest for Value Government Income Portfolio NA (0.52)%
HYPOTHETICAL AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/94
(BASED ON SINGLE INITIAL PURCHASE)
A UNITS 1 Year 3 Year
------- ------
Fidelity Money Market Portfolio 3.45% 2.91%
Fidelity Equity-Income Portfolio 6.27% 13.00%
Fidelity Growth Portfolio (0.82)% 8.34%
Fidelity Asset Manager Portfolio (6.89)% 7.42%
Dreyfus Growth and Income Portfolio NA NA
Dreyfus Quality Bond Portfolio (5.39)% 6.33%
TRP Equity Income Portfolio NA NA
TRP New America Growth Portfolio NA NA
TRP International Stock Portfolio NA NA
Quest for Value Managed Portfolio (7.84)% NA
Quest for Value Small Cap Portfolio (17.97)% NA
Quest for Value Government Income Portfolio NA NA
Since Inception
A UNITS 5 Year Year-End
------- ------ ---------------
Fidelity Money Market Portfolio 4.29% 9.91%
Fidelity Equity-Income Portfolio 9.71% 10.45%
Fidelity Growth Portfolio 10.08% 12.10%
Fidelity Asset Manager Portfolio 9.91% 9.91%
Dreyfus Growth and Income Portfolio NA (2.63)%
Dreyfus Quality Bond Portfolio 6.79% 6.79%
TRP Equity Income Portfolio NA 6.35%
TRP New America Growth Portfolio NA 0.20%
TRP International Stock Portfolio NA 1.00%
Quest for Value Managed Portfolio (5.79)% (1.09)%
Quest for Value Small Cap Portfolio (4.31)% (1.28)%
Quest for Value Government Income Portfolio NA (3.76)%
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<PAGE>
<TABLE>
<CAPTION>
B UNITS 1 Year 3 Year
------ ------
<S> <C> <C>
Fidelity Money Market Portfolio 2.85% 2.29%
Fidelity Equity-Income Portfolio 5.67% 12.32%
Fidelity Growth Portfolio (1.42)% 7.69%
Fidelity Asset Manager Portfolio (7.49)% 6.77%
Dreyfus Growth and Income Portfolio NA NA
Dreyfus Quality Bond Portfolio (5.99)% 5.69%
TRP Equity Income Portfolio NA NA
TRP New America Growth Portfolio NA NA
TRP International Stock Portfolio NA NA
Quest for Value Managed Portfolio (7.84)% NA
Quest for Value Small Cap Portfolio (17.97)% NA
Quest for Value Government Income Portfolio NA NA
</TABLE>
<TABLE>
<CAPTION>
Since Inception
B UNITS 5 Year Year-End
------- ------- ---------------
<S> <C> <C>
Fidelity Money Market Portfolio 3.69% 5.28%
Fidelity Equity-Income Portfolio 9.11% 9.85%
Fidelity Growth Portfolio 9.48% 11.50%
Fidelity Asset Manager Portfolio 9.31% 9.31%
Dreyfus Growth and Income Portfolio NA (3.23)%
Dreyfus Quality Bond Portfolio 6.19% 6.19%
TRP Equity Income Portfolio NA 5.75%
TRP New America Growth Portfolio NA (0.40)%
TRP International Stock Portfolio NA 0.40%
Quest for Value Managed Portfolio (5.79)% (1.69)%
Quest for Value Small Cap Portfolio (4.31)% (1.88)%
Quest for Value Government Income Portfolio NA (4.36)%
</TABLE>
Note: Advertisements and other sales literature for the Portfolios may quote
total returns which are calculated on non-standardized base periods. These total
returns also represent the historic change in the value of an investment in the
Portfolios based on monthly reinvestment of dividends over a specific period of
time.
* On September 16, 1994, an investment company then called Quest for Value
Accumulation Trust (the "Old Trust") was effectively divided into two investment
funds, the Old Trust and the Quest For Value Accumulation Trust that is included
in the Contract (the "New Trust"), at which time the New Trust commenced
operations. The total net assets for each of the Small Cap and Managed
Portfolios immediately after the transaction were $139,812,573 and $682,601,380,
respectively, with respect to the Old Trust and, with respect to the New Trust
were $8,129,274 and $51,345,102, for the Small Cap and Managed Growth
Portfolios, respectively. For the period prior to September 16, 1994, the
performance figures above for each of the Small Cap and Managed Portfolios
reflect the performance of the corresponding Portfolios of the Old Trust.
Remainder of Page Intentionally Left Blank
12
<PAGE>
<TABLE>
<CAPTION>
FIDELITY EQUITY INCOME PORTFOLIO A-UNITS FIDELITY EQUITY INCOME PORTFOLIO A-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1986 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1986
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ------------------ ----------------------- ----------------
One Average One Average A
Year Annual Year Annual UNITS
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Fund Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------- ------- -------- ---------- ---------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/86 $ 2,000 N/A N/A N/A 12/31/86 $50,000 N/A N/A N/A 0.00%
12/31/87 $ 4,000 $ 1,962 -1.92% -1.92% 12/31/87 $50,000 $ 49,040 -1.92% -1.92% -1.92%
12/31/88 $ 6,000 $ 4,822 21.73% 13.13% 12/31/88 $50,000 $ 59,695 21.73% 9.27% 21.73%
12/31/89 $ 8,000 $ 7,941 16.40% 14.69% 12/31/89 $50,000 $ 69,486 16.40% 11.59% 16.40%
12/31/90 $10,000 $ 8,354 -15.97% 1.74% 12/31/90 $50,000 $ 58,390 -15.97% 3.95% -15.97%
12/31/91 $12,000 $13,500 30.39% 10.18% 12/31/91 $50,000 $ 76,134 30.39% 8.77% 30.39%
12/31/92 $14,000 $17,973 15.95% 11.67% 12/31/92 $50,000 $ 88,282 15.95% 9.94% 15.95%
12/31/93 $16,000 $23,437 17.34% 12.92% 12/31/93 $50,000 $103,593 17.34% 10.97% 17.34%
12/31/94 $18,000 $27,018 6.21% 11.57% 12/31/94 $50,000 $110,030 6.21% 10.36% 6.21%
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
FIDELITY GROWTH PORTFOLIO A-UNITS FIDELITY GROWTH PORTFOLIO A-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1986 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1986
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ------------------ ----------------------- -----------------
One Average One Average A
Year Annual Year Annual UNITS
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Fund Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------- ------- -------- --------- ---------- ------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/86 $ 2,000 N/A N/A N/A 12/31/86 $50,000 N/A N/A N/A 0.00%
12/31/87 $ 4,000 $ 2,057 2.83% 2.83% 12/31/87 $50,000 $ 51,415 2.83% 2.83% 2.83%
12/31/88 $ 6,000 $ 4,651 14.66% 10.49% 12/31/88 $50,000 $ 58,950 14.66% 8.58% 14.66%
12/31/89 $ 8,000 $ 8,677 30.46% 19.62% 12/31/89 $50,000 $ 76,906 30.46% 15.43% 30.46%
12/31/90 $10,000 $ 9,349 -12.44% 6.33% 12/31/90 $50,000 $ 67,341 -12.44% 7.73% -12.44%
12/31/91 $12,000 $16,382 44.35% 16.93% 12/31/91 $50,000 $ 97,205 44.35% 14.22% 44.35%
12/31/92 $14,000 $19,934 8.45% 14.71% 12/31/92 $50,000 $105,414 8.45% 13.24% 8.45%
12/31/93 $16,000 $25,974 18.42% 15.51% 12/31/93 $50,000 $124,826 18.42% 13.96% 18.42%
12/31/94 $18,000 $27,744 -0.82% 12.15% 12/31/94 $50,000 $123,803 -0.82% 12.00% -0.82%
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
FIDELITY EQUITY INCOME PORTFOLIO B-UNITS FIDELITY EQUITY INCOME PORTFOLIO B-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1986 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1986
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ------------------ ----------------------- -----------------
One Average One Average B
Year Annual Year Annual UNITS
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Fund Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------- ------- -------- --------- ---------- ------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/86 $ 2,000 N/A N/A N/A 12/31/86 $50,000 N/A N/A N/A 0.00%
12/31/87 $ 4,000 $ 1,950 -2.51% -2.51% 12/31/87 $50,000 $ 48,743 -2.51% -2.51% -2.51%
12/31/88 $ 6,000 $ 4,779 20.99% 12.46% 12/31/88 $50,000 $ 58,975 20.99% 8.60% 20.99%
12/31/89 $ 8,000 $ 7,843 15.70% 14.00% 12/31/89 $50,000 $ 68,233 15.70% 10.92% 15.70%
12/31/90 $10,000 $ 8,221 -16.48% 1.09% 12/31/90 $50,000 $ 56,991 -16.48% 3.33% -16.48%
12/31/91 $12,000 $13,247 29.60% 9.52% 12/31/91 $50,000 $ 73,860 29.60% 8.12% 29.60%
12/31/92 $14,000 $17,572 15.25% 11.01% 12/31/92 $50,000 $ 85,126 15.25% 9.27% 15.25%
12/31/93 $16,000 $22,828 16.63% 12.25% 12/31/93 $50,000 $ 99,286 16.63% 10.30% 16.63%
12/31/94 $18,000 $26,211 5.57% 10.90% 12/31/94 $50,000 $104,817 5.57% 9.69% 5.57%
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
FIDELITY GROWTH PORTFOLIO B-UNITS FIDELITY GROWTH PORTFOLIO B-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1986 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1986
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ------------------- ----------------------- ----------------
One Average One Average B
Year Annual Year Annual UNITS
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Fund Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------- -------- -------- ---------- ---------- ------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/86 $ 2,000 N/A N/A N/A 12/31/86 $50,000 N/A N/A N/A 0.00%
12/31/87 $ 4,000 $ 2,044 2.21% 2.21% 12/31/87 $50,000 $ 51,104 2.21% 2.21% 2.21%
12/31/88 $ 6,000 $ 4,609 13.96% 9.83% 12/31/88 $50,000 $ 58,240 13.96% 7.93% 13.96%
12/31/89 $ 8,000 $ 8,570 29.67% 18.92% 12/31/89 $50,000 $ 75,519 29.67% 14.73% 29.67%
12/31/90 $10,000 $ 9,199 -12.97% 5.67% 12/31/90 $50,000 $ 65,727 -12.97% 7.08% -12.97%
12/31/91 $12,000 $16,068 43.47% 16.25% 12/31/91 $50,000 $ 94,300 43.47% 13.53% 43.47%
12/31/92 $14,000 $19,475 7.79% 14.02% 12/31/92 $50,000 $101,646 7.79% 12.55% 7.79%
12/31/93 $16,000 $25,276 17.70% 14.82% 12/31/93 $50,000 $119,636 17.70% 13.27% 17.70%
12/31/94 $18,000 $26,889 -1.42% 11.46% 12/31/94 $50,000 $117,937 -1.42% 11.32% -1.42%
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
FIDELITY ASSET MANAGER PORTFOLIO A-UNITS FIDELITY ASSET MANAGER PORTFOLIO A-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1989 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1989
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average A
Year Annual Year Annual UNITS
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Fund Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------ -------- ---------- ---------- ------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/89 $ 2,000 N/A N/A N/A 12/31/89 $50,000 N/A N/A N/A 0.00%
12/31/90 $ 4,000 $ 2,117 5.87% 5.87% 12/31/90 $50,000 $52,933 5.87% 5.87% 5.87%
12/31/91 $ 6,000 $ 5,006 21.58% 15.92% 12/31/91 $50,000 $64,356 21.58% 13.45% 21.58%
12/31/92 $ 8,000 $ 7,764 10.82% 13.45% 12/31/92 $50,000 $71,317 10.82% 12.57% 10.82%
12/31/93 $10,000 $11,742 20.26% 15.95% 12/31/93 $50,000 $85,766 20.26% 14.44% 20.26%
12/31/94 $12,000 $12,802 -6.84% 8.35% 12/31/94 $50,000 $79,898 -6.84% 9.83% -6.84%
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
FIDELITY MONEY MARKET PORTFOLIO A-UNITS FIDELITY MONEY MARKET PORTFOLIO A-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1983 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1983
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ---------------- ------------------------ ----------------
One Average One Average A
Year Annual Year Annual UNITS
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Fund Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ----------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/83 $ 2,000 N/A N/A N/A 12/31/83 $50,000 N/A N/A N/A 0.00%
12/31/84 $ 4,000 $ 2,191 9.55% 9.55% 12/31/84 $50,000 $54,773 9.55% 9.55% 9.55%
12/31/85 $ 6,000 $ 4,495 7.25% 8.03% 12/31/85 $50,000 $58,742 7.25% 8.39% 7.25%
12/31/86 $ 8,000 $ 6,874 5.85% 6.96% 12/31/86 $50,000 $62,176 5.85% 7.54% 5.85%
12/31/87 $10,000 $ 9,370 5.59% 6.42% 12/31/87 $50,000 $65,651 5.59% 7.05% 5.59%
12/31/88 $12,000 $12,113 6.53% 6.46% 12/31/88 $50,000 $69,938 6.53% 6.94% 6.53%
12/31/89 $14,000 $15,277 8.25% 6.94% 12/31/89 $50,000 $75,706 8.25% 7.16% 8.25%
12/31/90 $16,000 $18,516 7.18% 7.00% 12/31/90 $50,000 $81,138 7.18% 7.16% 7.18%
12/31/91 $18,000 $21,592 5.24% 6.63% 12/31/91 $50,000 $85,391 5.24% 6.92% 5.24%
12/31/92 $20,000 $24,316 3.07% 5.96% 12/31/92 $50,000 $88,012 3.07% 6.48% 3.07%
12/31/93 $22,000 $26,948 2.40% 5.36% 12/31/93 $50,000 $90,128 2.40% 6.07% 2.40%
12/31/94 $24,000 $29,937 3.42% 5.06% 12/31/94 $50,000 $93,206 3.42% 5.83% 3.42%
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
FIDELITY ASSET MANAGER PORTFOLIO B-UNITS FIDELITY ASSET MANAGER PORTFOLIO B-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1989 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1989
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average
Year Annual Year Annual B UNITS
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Fund Total
Date Payments Value Return Return Date Payments Value Return Return Return
---- -------- ----- ------ ------ ---- -------- ----- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/89 $ 2,000 N/A N/A N/A 12/31/89 $50,000 N/A N/A N/A 0.00%
12/31/90 $ 4,000 $ 2,105 5.23% 5.23% 12/31/90 $50,000 $52,613 5.23% 5.23% 5.23%
12/31/91 $ 6,000 $ 4,960 20.84% 15.23% 12/31/91 $50,000 $63,580 20.84% 12.76% 20.84%
12/31/92 $ 8,000 $ 7,668 10.15% 12.76% 12/31/92 $50,000 $70,031 10.15% 11.89% 10.15%
12/31/93 $10,000 $11,554 19.53% 15.26% 12/31/93 $50,000 $83,709 19.53% 13.75% 19.53%
12/31/94 $12,000 $12,551 -7.40% 7.67% 12/31/94 $50,000 $77,511 -7.40% 9.16% -7.40%
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
FIDELITY MONEY MARKET PORTFOLIO B-UNITS FIDELITY MONEY MARKET PORTFOLIO B-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1983 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1983
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average B
Year Annual Year Annual UNITS
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Fund Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ---------- ------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/83 $ 2,000 N/A N/A N/A 12/31/83 $50,000 N/A N/A N/A N/A
12/31/84 $ 4,000 $ 2,178 8.88% 8.88% 12/31/84 $50,000 $54,442 8.88% 8.88% 8.88%
12/31/85 $ 6,000 $ 4,453 6.60% 7.37% 12/31/85 $50,000 $58,033 6.60% 7.73% 6.60%
12/31/86 $ 8,000 $ 6,789 5.21% 6.31% 12/31/86 $50,000 $61,055 5.21% 6.88% 5.21%
12/31/87 $10,000 $ 9,224 4.95% 5.78% 12/31/87 $50,000 $64,077 4.95% 6.40% 4.95%
12/31/88 $12,000 $11,885 5.89% 5.81% 12/31/88 $50,000 $67,849 5.89% 6.30% 5.89%
12/31/89 $14,000 $14,939 7.59% 6.29% 12/31/89 $50,000 $73,000 7.59% 6.51% 7.59%
12/31/90 $16,000 $18,045 6.53% 6.35% 12/31/90 $50,000 $77,765 6.53% 6.51% 6.53%
12/31/91 $18,000 $20,968 4.60% 5.98% 12/31/91 $50,000 $81,346 4.60% 6.27% 4.60%
12/31/92 $20,000 $23,530 2.45% 5.32% 12/31/92 $50,000 $83,335 2.45% 5.84% 2.45%
12/31/93 $22,000 $25,985 1.78% 4.71% 12/31/93 $50,000 $84,822 1.78% 5.43% 1.78%
12/31/94 $24,000 $28,766 2.79% 4.41% 12/31/94 $50,000 $87,189 2.79% 5.19% 2.79%
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
DREYFUS GROWTH AND INCOME PORTFOLIO DREYFUS GROWTH AND INCOME PORTFOLIO
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1994 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1994
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average
Year Annual Year Annual A and B
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Fund Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ---------- ------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 $2,000 N/A N/A N/A 12/31/94 $50,000 N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
DREYFUS QUALITY BOND PORTFOLIO A-UNITS DREYFUS QUALITY BOND PORTFOLIO A-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1989 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1989
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average A
Year Annual Year Annual UNIT
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Fund Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ---------- ------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/89 $ 2,000 N/A N/A N/A 12/31/89 $50,000 N/A N/A N/A 0.00%
12/31/90 $ 4,000 $ 2,032 1.58% 1.58% 12/31/90 $50,000 $50,790 1.58% 1.58% 1.58%
12/31/91 $ 6,000 $ 4,564 13.21% 9.12% 12/31/91 $50,000 $57,498 13.21% 7.24% 13.21%
12/31/92 $ 8,000 $ 7,299 11.19% 10.12% 12/31/92 $50,000 $63,934 11.19% 8.54% 11.19%
12/31/93 $10,000 $10,639 14.41% 11.73% 12/31/93 $50,000 $73,145 14.41% 9.98% 14.41%
12/31/94 $12,000 $11,962 -5.35% 6.03% 12/31/94 $50,000 $69,230 -5.35% 6.72% -5.35%
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
DREYFUS QUALITY BOND PORTFOLIO B-UNITS DREYFUS QUALITY BOND PORTFOLIO B-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1989 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1989
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average B UNIT
Year Annual Year Annual Fund
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ----------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/89 $ 2,000 N/A N/A N/A 12/31/89 $50,000 N/A N/A N/A 0.00%
12/31/90 $ 4,000 $ 2,019 0.97% 0.97% 12/31/90 $50,000 $50,483 0.97% 0.97% 0.97%
12/31/91 $ 6,000 $ 4,523 12.52% 8.47% 12/31/91 $50,000 $56,805 12.52% 6.59% 12.52%
12/31/92 $ 8,000 $ 7,209 10.52% 9.46% 12/31/92 $50,000 $62,781 10.52% 7.88% 10.52%
12/31/93 $10,000 $10,472 13.72% 11.07% 12/31/93 $50,000 $71,392 13.72% 9.31% 13.72%
12/31/94 $12,000 $11,733 -5.93% 5.38% 12/31/94 $50,000 $67,161 -5.93% 6.08% -5.93%
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE EQUITY INCOME PORTFOLIO T. ROWE PRICE EQUITY INCOME PORTFOLIO
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1994 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1994
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average A and B
Year Annual Year Annual Fund
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ----------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 $2,000 N/A N/A N/A 12/31/94 $50,000 N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
T. ROWE PRICE INTERNATIONAL PORTOLIO T. ROWE PRICE INTERNATIONAL PORTFOLIO
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1994 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1994
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average A and B
Year Annual Year Annual Fund
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ----------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 $2,000 N/A N/A N/A 12/31/94 $50,000 N/A N/A N/A N/A
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE NEW AMERICAN GROWTH FUND PORTFOLIO T. ROWE PRICE NEW AMERICAN GROWTH FUND PORTFOLIO
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1994 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1994
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average A and B
Year Annual Year Annual Fund
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ----------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 $2,000 N/A N/A N/A 12/31/94 $50,000 N/A N/A N/A N/A
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
QUEST FOR VALUE MANAGED PORTFOLIO A-UNITS QUEST FOR VALUE MANAGED PORTFOLIO A-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1988 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1988
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average A UNIT
Year Annual Year Annual Fund
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ----------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/88 $ 2,000 N/A N/A N/A 12/31/88 $50,000 N/A N/A N/A 0.00%
12/31/89 $ 4,000 $ 2,519 25.95% 25.95% 12/31/89 $50,000 $62,976 25.95% 25.95% 25.95%
12/31/90 $ 6,000 $ 3,259 -27.88% -12.90% 12/31/90 $50,000 $45,419 -27.88% -4.69% -27.88%
12/31/91 $ 8,000 $ 7,903 50.27% 14.42% 12/31/91 $50,000 $68,249 50.27% 10.93% 50.27%
12/31/92 $10,000 $ 7,984 -19.37% -0.08% 12/31/92 $50,000 $55,026 -19.37% 2.42% -19.37%
12/31/93 $12,000 $ 9,215 -7.70% -2.71% 12/31/93 $50,000 $50,788 -7.70% 0.31% -7.70%
12/31/94 $14,000 $10,342 -7.79% -4.23% 12/31/94 $50,000 $46,832 -7.79% -1.08% -7.79%
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
QUEST FOR VALUE MANAGED PORTFOLIO B-UNITS QUEST FOR VALUE MANAGED PORTFOLIO B-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1988 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1988
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average B UNIT
Year Annual Year Annual Fund
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ----------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/88 $ 2,000 N/A N/A N/A 12/31/88 $50,000 N/A N/A N/A 0.00%
12/31/89 $ 4,000 $ 2,504 25.19% 25.19% 12/31/89 $50,000 $62,595 25.19% 25.19% 25.19%
12/31/90 $ 6,000 $ 3,229 -28.32% -13.46% 12/31/90 $50,000 $44,871 -28.32% -5.27% -28.32%
12/31/91 $ 8,000 $ 7,809 49.36% 13.77% 12/31/91 $50,000 $67,018 49.36% 10.26% 49.36%
12/31/92 $10,000 $ 7,861 -19.86% -0.70% 12/31/92 $50,000 $53,706 -19.86% 1.80% -19.86%
12/31/93 $12,000 $ 9,046 -8.26% -3.32% 12/31/93 $50,000 $49,270 -8.26% -0.29% -8.26%
12/31/94 $14,000 $10,124 -8.35% -4.84% 12/31/94 $50,000 $45,158 -8.35% -1.68% -8.35%
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
QUEST FOR VALUE SMALL CAPITAL PORTFOLIO A-UNITS QUEST FOR VALUE SMALL CAPITAL PORTFOLIO A-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1988 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1988
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average A UNIT
Year Annual Year Annual Fund
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ----------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/88 $ 2,000 N/A N/A N/A 12/31/88 $50,000 N/A N/A N/A 0.00%
12/31/89 $ 4,000 $ 2,304 15.22% 15.22% 12/31/89 $50,000 $57,608 15.22% 15.22% 15.22%
12/31/90 $ 6,000 $ 3,256 -24.36% -12.97% 12/31/90 $50,000 $43,572 -24.36% -6.65% -24.36%
12/31/91 $ 8,000 $ 8,558 62.83% 18.84% 12/31/91 $50,000 $70,950 62.83% 12.37% 62.83%
12/31/92 $10,000 $ 8,591 -18.63% 2.87% 12/31/92 $50,000 $57,729 -18.63% 3.66% -18.63%
12/31/93 $12,000 $10,334 -2.42% 1.10% 12/31/93 $50,000 $56,333 -2.42% 2.41% -2.42%
12/31/94 $14,000 $10,135 -17.83% -4.81% 12/31/94 $50,000 $46,288 -17.83% -1.28% -17.83%
</TABLE>
<TABLE>
<CAPTION>
QUEST FOR VALUE GOVERNMENTAL INCOME FUND PORTFOLIO QUEST FOR VALUE GOVERNMENTAL INCOME FUND PORTFOLIO
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1994 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1994
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- -----------------
One Average One Average A and B
Year Annual Year Annual Fund
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------ ------- -------- ---------- ----------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 $2,000 N/A N/A N/A 12/31/94 $50,000 N/A N/A N/A N/A
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
QUEST FOR VALUE SMALL CAPITAL PORTFOLIO B-UNITS QUEST FOR VALUE SMALL CAPITAL PORTFOLIO B-UNITS
$2000 PURCHASE PAYMENT MADE DECEMBER 31, 1988 $50,000 SINGLE PURCHASE PAYMENT MADE DECEMBER 31, 1988
AND YEARLY DECEMBER 31ST THEREAFTER
Values prior to current Values prior to current
years purchase payment Non-Standardized years purchase payment Non-Standardized
----------------------- ----------------- ----------------------- ----------------
One Average One Average B
Year Annual Year Annual UNIT
Cumulative Accumulated Total Total Cumulative Accumulated Total Total Fund Total
Date Payments Value Return Return Date Payments Value Return Return Return
- -------- ---------- ----------- ------- ------- -------- ---------- ----------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/88 $ 2,000 N/A N/A N/A 12/31/88 $50,000 N/A N/A N/A 0.00%
12/31/89 $ 4,000 $ 2,290 14.52% 14.52% 12/31/89 $50,000 $57,259 14.52% 14.52% 14.52%
12/31/90 $ 6,000 $ 3,225 -24.82% -13.52% 12/31/90 $50,000 $43,047 -24.82% -7.21% -24.82%
12/31/91 $ 8,000 $ 8,457 61.85% 18.17% 12/31/91 $50,000 $69,670 61.85% 11.69% 61.85%
12/31/92 $10,000 $ 8,457 -19.13% 2.24% 12/31/92 $50,000 $56,345 -19.13% 3.03% -19.13%
12/31/93 $12,000 $10,143 -3.01% 0.47% 12/31/93 $50,000 $54,650 -3.01% 1.79% -3.01%
12/31/94 $14,000 $ 9,917 -18.33% -5.42% 12/31/94 $50,000 $44,634 -18.33% -1.87% -18.33%
</TABLE>
28
<PAGE>
Individualized Computer Generated Illustrations
The Company may from time to time use computer-based software available through
Morningstar, CDA/Wiesenberger and/or other firms to provide registered
representatives and existing and/or potential owners of Contracts with
individualized hypothetical performance illustrations for some or all of the
Portfolios. Such illustrations may include, without limitation, graphs, bar
charts and other types of formats presenting the following information: (i) the
historical results of a hypothetical investment in a single Portfolio; (ii) the
historical fluctuation of the value of a single Portfolio (actual and
hypothetical); (iii) the historical results of a hypothetical investment in more
than one Portfolio; (iv) the historical performance of two or more market
indices in relation to one another and/or one or more Portfolios; (v) the
historical performance of two or more market indices in comparison to a single
Portfolio or a group of Portfolios; (vi) a market risk/reward scatter chart
showing the historical risk/reward relationship of one or more mutual funds or
Portfolios to one or more indices and a broad category of similar anonymous
variable annuity subaccounts; and (vii) Portfolio data sheets showing various
information about one or more Portfolios (such as information concerning total
return for various periods, fees and expenses, standard deviation, alpha and
beta, investment objective, inception date and net assets).
PERFORMANCE COMPARISONS
Performance information for any Subaccount reflects only the performance of a
hypothetical Contract under which Accumulation Value is allocated to a
Subaccount during a particular time period on which the calculations are based.
Performance information should be considered in light of the investment
objectives and policies, characteristics and quality of the Portfolio in which
the Subaccount invests, and the market conditions during the given period, and
should not be considered as a representation of what may be achieved in the
future.
Reports and marketing materials may, from time to time, include information
concerning the rating of Providian Life and Health Insurance Company as
determined by one or more of the ratings services listed below, or other
recognized rating services. Reports and promotional literature may also contain
other information including (i) the ranking of any Subaccount derived from
rankings of variable annuity separate accounts or other investment products
tracked by Lipper Analytical Services or by other rating services, companies,
publications, or other person who rank separate accounts or other investment
products on overall performance or other criteria, and (ii) the effect of tax-
deferred compounding on a Subaccount's investment returns, or returns in
general, which may be illustrated by graphs, charts, or otherwise, and which may
include a comparison, at various points in time, of the return from an
investment in a Contract (or returns in general) on a tax-deferred basis
(assuming one or more tax rates) with the return on a taxable basis.
Each Subaccount's performance depends on, among other things, the performance of
the underlying Portfolio which, in turn, depends upon such variables as:
. quality of underlying investments;
. average maturity of underlying investments;
. type of instruments in which the Portfolio is invested;
. changes in interest rates and market value of underlying investments;
. changes in Portfolio expenses; and
. the relative amount of the Portfolio's cash flow.
From time to time, we may advertise the performance of the Subaccounts and the
underlying Portfolios as compared to similar funds or portfolios using certain
indexes, reporting services and financial publications, and we may advertise
rankings or ratings issued by certain services and/or other institutions. These
may include, but are not limited to, the following:
29
<PAGE>
. Dow Jones Industrial Average ("DJIA"), an unmanaged index representing
share prices of major industrial corporations, public utilities, and
transportation companies. Produced by the Dow Jones & Company, it is cited
as a principal indicator of market conditions.
. Standard & Poor's Daily Stock Price Index of 500 Common Stocks, a
composite index of common stocks in industrial, transportation, and
financial and public utility companies, which can be used to compare to
the total returns of funds whose portfolios are invested primarily in
common stocks. In addition, the Standard & Poor's index assumes
reinvestments of all dividends paid by stocks listed on its index. Taxes
due on any of these distributions are not included, nor are brokerage or
other fees calculated into the Standard & Poor's figures.
. Lipper Analytical Services, Inc., a reporting service that ranks funds
in various fund categories by making comparative calculations using total
return. Total return assumes the reinvestment of all income dividends and
capital gains distributions, if any. From time to time, we may quote the
Portfolios' Lipper rankings in various fund categories in advertising and
sales literature.
. Bank Rate Monitor National Index, Miami Beach, Florida, a financial
reporting service which publishes weekly average rates of 50 leading bank
and thrift institution money market deposit accounts. The rates published
in the index are an average of the personal account rates offered on the
Wednesday prior to the date of publication by ten of the largest banks and
thrifts in each of the five largest Standard Metropolitan Statistical
Areas. Account minimums range upward from $2,500 in each institution, and
compounding methods vary. If more than one rate is offered, the lowest
rate is used. Rates are subject to change at any time specified by the
institution.
. Shearson Lehman Government/Corporate (Total) Index, an index comprised of
approximately 5,000 issues which include: non-convertible bonds publicly
issued by the U.S. government or its agencies; corporate bonds guaranteed
by the U.S. government and quasi-federal corporations; and publicly
issued, fixed-rate, non-convertible domestic bonds of companies in
industry, public utilities and finance. The average maturity of these
bonds approximates nine years. Tracked by Shearson Lehman, Inc., the index
calculates total returns for one month, three month, twelve month, and ten
year periods and year-to-date.
. Shearson Lehman Government/Corporate (Long-Term) Index, an index composed
of the same types of issues as defined above. However, the average
maturity of the bonds included in this index approximates 22 years.
. Shearson Lehman Government Index, an unmanaged index comprised of all
publicly issued, non-convertible domestic debt of the U.S. government, or
any agency thereof, or any quasi-federal corporation and of corporate debt
guaranteed by the U.S. government. Only notes and bonds with a minimum
outstanding principal of $1 million and a minimum maturity of one year are
included.
. Morningstar, Inc., an independent rating service that publishes the bi-
weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for
two weeks.
. Money, a monthly magazine that regularly ranks money market funds in
various categories based on the latest available seven-day compound
(effective) yield. From time to time, the Fund will quote its Money
ranking in advertising and sales literature.
30
<PAGE>
. Standard & Poor's Utility Index, an unmanaged index of common stocks from
forty different utilities. This index indicates daily changes in the price
of the stocks. The index also provides figures for changes in price from
the beginning of the year to date, and for a twelve month period.
. Dow Jones Utility Index, an unmanaged index comprised of fifteen utility
stocks that tracks changes in price daily and over a six month period. The
index also provides the highs and lows for each of the past five years.
. The Consumer Price Index, a measure for determining inflation.
Investors may use such indexes (or reporting services) in addition to the Funds'
Prospectuses to obtain a more complete view of each Portfolio's performance
before investing. Of course, when comparing each Portfolio's performance to any
index, conditions such as composition of the index and prevailing market
conditions should be considered in assessing the significance of such companies.
Unmanaged indexes may assume the reinvestment of dividends but generally do not
reflect deductions for administrative and management costs and expenses.
When comparing funds using reporting services, or total return and yield, or
effective yield, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods used
to value portfolio securities and compute offering price.
SAFEKEEPING OF ACCOUNT ASSETS
Title to assets of the Separate Account is held by the Company. The Assets are
kept physically segregated and held separate and apart from the Company's
General Account assets. The General Account contains all of the assets of the
Company. Records are maintained of all purchases and redemptions of eligible
Portfolio shares held by each of the Subaccounts and the General Account.
THE COMPANY
All the stock of the Company is owned by Capital Liberty, L.P., a limited
partnership, which is owned, directly and indirectly, by Providian Corporation.
A 50% interest in Capital Liberty, L.P. is owned by Providian Corporation, which
is the general partner, and 40% and 10% interests, respectively, are held by two
limited partners, Commonwealth Life Insurance Company and Peoples Security Life
Insurance Company, which are both wholly-owned by Providian Corporation.
STATE REGULATION
The Company is a stock life insurance company organized under the laws of
Missouri, and is subject to regulation by the Missouri State Department of
Insurance. An annual statement is filed with the Missouri Commissioner of
Insurance on or before March 1st of each year covering the operations and
reporting on the financial condition of the Company as of December 31st of the
preceding calendar year. Periodically, the Missouri Commissioner of Insurance
examines the financial condition of the Company, including the liabilities and
reserves of the Separate Account.
31
<PAGE>
In addition, the Company is subject to the insurance laws and regulations of
all the states where it is licensed to operate. The availability of certain
contract rights and provisions depends on state approval and/or filing and
review processes. Where required by state law or regulation, the Contracts will
be modified accordingly.
RECORDS AND REPORTS
All records and accounts relating to the Separate Account will be maintained
by the Company or by its Administrator. As presently required by the Investment
Company Act of 1940 and regulations promulgated thereunder, the Company will
mail to all Contract Owners at their last known address of record, at least
semi-annually, reports containing such information as may be required under
that Act or by any other applicable law or regulation.
DISTRIBUTION OF THE CONTRACTS
Providian Securities Corporation ("PSC"), the principal underwriter of the
Contracts, is a wholly owned subsidiary of Providian Corporation. PSC is
registered with the SEC under the Securities Exchange Act of 1934 as a broker-
dealer and is a member of the National Association of Securities Dealers, Inc.
Commissions not to exceed (i) 4.75% of Purchase Payments for A Units plus an
annual trail or maintenance fee of .20% of the Contract's Accumulation Value;
and (ii) 6.75% of Purchase Payments for B Units may be paid to entities which
sell the Contracts. In addition, expense reimbursement allowances may be paid.
Additional payments may be made for other services not directly related to the
sale of the Contracts.
The Contracts are offered to the public through brokers licensed under the
federal securities laws and state insurance laws that have entered into
agreements with PSC. The offering of the Contracts is continuous and PSC does
not anticipate discontinuing the offering of the Contracts. However, PSC does
reserve the right to discontinue the offering of the Contracts.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account is a party or to
which the assets of the Separate Account are subject. The Company is not
involved in any litigation that is of material importance in relation to its
total assets or that relates to the Separate Account.
OTHER INFORMATION
A Registration Statement has 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 Statement, amendments and exhibits
thereto has been included in this Statement of Additional Information.
Statements contained in 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.
FINANCIAL STATEMENTS
The audited financial statements of the Separate Account for the year ended
December 31, 1994, including the Report of Independent Auditors thereon, is
included in this Statement of Additional Information. The audited statutory-
basis financial statements of the Company for the years ended December 31, 1993
and 1994, respectively, including the Reports of Independent Auditors thereon,
which are also included in this Statement of Additional Information, should be
distinguished from the financial statements of the Separate Account and should
be
32
