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As Filed With The Securities And Exchange Commission On January 31, 1997
Registration No. 33-80958
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 6
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 17
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SEPARATE ACCOUNT V
(Formerly National Home Life Assurance Company Separate Account V)
(Exact Name of Registrant)
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
(Formerly National Home Life Assurance Company)
(Name of Depositor)
20 Moores Road
Frazer, Pennsylvania 19355
(Address of Depositor's Principal Executive Office)
Depositor's Telephone Number (800) 523-7900
Kimberly A. Scouller, Esquire
Providian Life and Health Insurance Company
400 West Market Street
P.O. Box 32830
Louisville, Kentucky 40232
(Name and Address of Agent for Service)
Copies to:
Michael Berenson, Esquire
Ann B. Furman, Esquire
Jorden Burt Berenson & Johnson LLP
1025 Thomas Jefferson Street, N.W.
Suite 400 East
Washington, D.C. 20007-0805
Approximate Date of Proposed Offering:
As soon as practicable after the effective date of this Registration Statement.
It is proposed that this filing will become effective (check appropriate box):
[x] Immediately upon filing pursuant to paragraph (b) of Rule 485.
[_] On ________________, pursuant to paragraph (b)(1)(v) of Rule 485.
[_] 60 Days after filing pursuant to paragraph (a)(1) of Rule 485.
[_] On ________________, pursuant to paragraph (a)(1) of Rule 485.
If appropriate, check the following box:
[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Pursuant to Rule 24f-2 of the Investment Company Act of 1940, the Registrant
registered an indefinite amount of securities being offered. Registrant filed
the Rule 24f-2 notice for the fiscal year ended December 31, 1995, on February
27, 1996.
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This post-effective amendment shall not supercede or effect this Registration
Statement as it applies to Providian Advisor's Edge Variable Annuity.
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PURSUANT TO RULE 481
Showing Location in Part A (Prospectus) and Part B
(Statement of Additional Information) of Registration
Statement of Information Required by Form N-4
<TABLE>
<CAPTION>
PART A
Item of
Form N-4 Prospectus Caption
- -------- ------------------
<S> <C>
1. Cover Page................................................ Cover Page
2. Definitions............................................... GLOSSARY
3. Synopsis.................................................. HIGHLIGHTS; FEE TABLE; Performance Measures
4. Condensed Financial Information........................... Not Applicable
5. General Description of Registrant, Depositor, and
Portfolio Companies....................................... Providian Life and Health Insurance Company,
Providian Life and Health Insurance Company
Separate Account V; Providian Series Trust;
The Portfolios; Voting Rights
6. Deductions................................................ Charges and Deductions; FEDERAL TAX CONSIDERATIONS;
FEE TABLE
7. General Description of Variable Annuity Contracts......... CONTRACT FEATURES; Distribution-at-Death Rules;
Voting Rights; Allocation of Purchase Payments;
Exchanges Among the Portfolios; Additions,
Deletions, or Substitutions of Investments
8. Annuity Period............................................ Annuity Payment Options
9. Death Benefit............................................. Death of Annuitant Prior to Annuity Date
10. Purchases and Contract Value.............................. Contract Purchase and Purchase Payments;
Accumulated Value
11. Redemptions............................................... Full and Partial Withdrawals; Annuity Payment
Options; Right to Cancel Period
12. Taxes..................................................... FEDERAL TAX CONSIDERATIONS
13. Legal Proceedings......................................... Part B: Legal Proceedings
14. Table of Contents of the Statement of Additional
Information............................................... Table of Contents of PGA Retirement Annuity
Statement of Additional Information
PART B
Item of Statement of Additional
Form N-4 Information Caution
- --------....................................................... -----------------------
15. Cover Page................................................ Cover Page
16. Table of Contents......................................... Table of Contents
17. General Information and History........................... THE COMPANY
18. Services.................................................. Part A: Auditors; Part B: SAFEKEEPING OF
ACCOUNT ASSETS; DISTRIBUTION OF THE CONTRACTS
19. Purchase of Securities Being Offered...................... DISTRIBUTION OF THE CONTRACTS; Exchanges
20. Underwriters.............................................. DISTRIBUTION OF THE CONTRACTS
21. Calculation of Performance Data........................... PERFORMANCE INFORMATION
22. Annuity Payments.......................................... Computations of Annuity Income Payments
23. Financial Statements...................................... FINANCIAL STATEMENTS
</TABLE>
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THIS ANNUITY IS NOT YET AVAILABLE FOR SALE.
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY SEPARATE ACCOUNT V
PROSPECTUS
FOR THE
PGA RETIREMENT ANNUITY
OFFERED BY
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
(A MISSOURI STOCK COMPANY)
ADMINISTRATIVE OFFICES
P.O. BOX 32700
LOUISVILLE, KENTUCKY 40232
The PGA Retirement Annuity contract (the "Contract"), offered through
Providian Life and Health Insurance Company (the "Company," "us," "we" or
"our"), provides a vehicle for investing on a tax-deferred basis in 5
investment company Portfolios. The Contract is an individual variable annuity
contract and is intended for retirement savings or other long-term investment
purposes.
The minimum initial Purchase Payment for Non-Qualified Contracts is $3,000.
The minimum initial purchase payment for Qualified Contracts is $2,000 (or $50
monthly by payroll deduction). The Contract is a flexible-premium deferred
variable annuity that provides for a Right to Cancel Period of 10 days (30
days or more in some instances) plus a 5 day grace period to allow for mail
delivery during which you may cancel your investment in the Contract.
Your Net Purchase Payments for the Contract may be allocated among 5
Subaccounts of Providian Life and Health Insurance Company's Separate Account
V. Assets of each Subaccount are invested in one of the following Portfolios:
. CAPITAL PRESERVATION PORTFOLIO
. INCOME ORIENTED PORTFOLIO
. GROWTH AND INCOME PORTFOLIO
. CAPITAL GROWTH PORTFOLIO
. MAXIMUM APPRECIATION PORTFOLIO
Depending upon the state of issue and provisions of your Contract, your
initial Net Purchase Payment(s), when your Contract is issued, either will be
(i) invested in a sixth Subaccount, the Money Market Fund, during your Right
to Cancel Period or (ii) invested immediately in your chosen Portfolio(s).
(The Money Market Fund and the Portfolios are collectively referred to as
"Portfolios").
The Contract's Accumulated Value varies with the investment performance of the
Portfolio(s) you select. You bear all investment risk associated with the
Portfolios. Investment results for your Contract are not guaranteed.
The Contract offers a number of ways of withdrawing monies at a future date,
including a lump sum payment and several Annuity Payment Options. Full or
partial withdrawals of the Contract's Surrender Value may be made at any time,
although in many instances withdrawals made prior to age 59 1/2 are subject to
a 10% federal tax penalty (and a portion may be subject to ordinary income
taxes). If you elect an Annuity Payment Option, Annuity Payments may be
received on a fixed and/or variable basis. You also have significant
flexibility in choosing the Annuity Date on which Annuity Payments begin.
This Prospectus sets forth the information you should know before investing in
the Contract. It must be accompanied by a current Prospectus for the
Portfolios. Please read the Prospectus carefully and retain it for future
reference. A Statement of Additional Information for the Contract Prospectus,
which has the same date as this Prospectus, has also been filed with the
Securities and Exchange Commission, is incorporated herein by reference and is
available free by calling our Administrative Offices at 1-800-866-6007. The
Table of Contents of the Statement of Additional Information is included at
the end of this Prospectus.
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.
The Contract is not available in all States.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESMAN, 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.
The date of this Prospectus is January 29, 1997
FM-1189
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
GLOSSARY................................................................... 3
HIGHLIGHTS................................................................. 6
FEE TABLE.................................................................. 8
Financial Statements....................................................... 9
Performance Measures....................................................... 9
Additional Performance Measures............................................ 10
Yield and Effective Yield.................................................. 10
The Company and the Separate Account....................................... 11
Providian Series Trust..................................................... 11
The Portfolios............................................................. 11
The Money Market Fund...................................................... 12
CONTRACT FEATURES.......................................................... 12
Right to Cancel Period................................................... 12
Contract Purchase and Purchase Payments.................................. 12
Purchasing by Wire....................................................... 13
Allocation of Purchase Payments.......................................... 13
Charges and Deductions................................................... 13
Accumulated Value........................................................ 15
Exchanges Among the Portfolios........................................... 15
Full and Partial Withdrawals............................................. 16
Systematic Withdrawal Option............................................. 16
IRS-Required Distributions............................................... 17
Minimum Balance Requirement.............................................. 17
Designation of an Annuitant's Beneficiary................................ 17
Death of Annuitant Prior to Annuity Date................................. 18
Annuity Date............................................................. 18
Lump Sum Payment Option.................................................. 18
Annuity Payment Options.................................................. 18
Deferment of Payment..................................................... 19
FEDERAL TAX CONSIDERATIONS................................................. 20
GENERAL INFORMATION........................................................ 23
</TABLE>
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GLOSSARY
Accumulation Unit - A measure of your ownership interest in the Contract prior
to the Annuity Date.
Accumulation Unit Value - The value of each Accumulation Unit which is
calculated each Valuation Period.
Accumulated Value - The value of all amounts accumulated under the Contract
prior to the Annuity Date.
Adjusted Death Benefit - The sum of all Net Purchase Payments made during the
first six Contract Years, less any partial withdrawals taken. During each
subsequent six-year period, the Adjusted Death Benefit will be the Death
Benefit on the last day of the previous six-year period plus any Net Purchase
Payments made, less any partial withdrawals taken during the current six-year
period. After the Annuitant attains age 75, the Adjusted Death Benefit will
remain equal to the Death Benefit on the last day of the six-year period ending
before age 75 occurs plus any Net Purchase Payments subsequently made, less any
partial withdrawals subsequently taken.
Annual Contract Fee - The $30 annual fee charged by the Company to cover the
cost of administering each Contract. The Annual Contract Fee will be deducted
on each Contract Anniversary and upon surrender, on a pro rata basis, from each
Subaccount.
Annuitant - The person whose life is used to determine the duration of any
Annuity Payments and upon whose death, prior to the Annuity Date, benefits
under the Contract are paid.
Annuitant's Beneficiary - The person(s) to whom any benefits are due upon the
Annuitant's death prior to the Annuity Date.
Annuity Date - The date on which Annuity Payments begin. The Annuity Date is
always the first day of the month you specify.
Annuity Payment - One of a series of payments made under an Annuity Payment
Option.
Annuity Payment Option - One of several ways in which withdrawals from the
Contract may be made. Under a Fixed Annuity Option (see "Annuity Payment
Options," page 18), the dollar amount of each Annuity Payment does not change
over time. Under a Variable Annuity Option (see "Annuity Payment Options," page
18), the dollar amount of each Annuity Payment may change over time, depending
upon the investment experience of the Portfolio or Portfolios you choose.
Annuity Payments are based on the Contract's Accumulated Value as of 10
Business Days prior to the Annuity Date.
Annuity Unit - Unit of measure used to calculate Variable Annuity Payments (see
"Annuity Payment Options," page 18).
Annuity Unit Value - The value of each Annuity Unit which is calculated each
Valuation Period.
Business Day - A day when the New York Stock Exchange is open for trading.
Company ("we," "us," "our") - Providian Life and Health Insurance Company, a
Missouri stock company.
Contract Anniversary - Any anniversary of the Contract Date.
Contract Date - The date of issue of this Contract.
Contract Owner ("you," "your") - The person or persons designated as the
Contract Owner in the Contract. The term shall also include any person named as
Joint Owner. A Joint Owner shares ownership in all respects with the Contract
Owner. Prior to the Annuity Date, the Contract Owner has the right to assign
ownership, designate beneficiaries, make permitted withdrawals and Exchanges
among Subaccounts.
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Contract Year - A period of 12 months starting with the Contract Date or any
Contract Anniversary.
Death Benefit - The greater of the Contract's Accumulated Value on the date
the Company receives due Proof of Death of the Annuitant or the Adjusted Death
Benefit.
Exchange - One Exchange will be deemed to occur with each voluntary transfer
from any Subaccount.
General Account - The account which contains all of our assets other than
those held in our separate accounts.
Net Purchase Payment - Any Purchase Payment less the applicable Premium Tax,
if any.
Non-Qualified Contract - Any Contract other than those described under the
Qualified Contract reference in this Glossary.
Owner's Designated Beneficiary - The person to whom ownership of this Contract
passes upon the Contract Owner's death, unless the Contract Owner was also the
Annuitant--in which case the Annuitant's Beneficiary is entitled to the Death
Benefit. (Note: this transfer of ownership to the Owner's Designated
Beneficiary will generally not be subject to probate, but will be subject to
estate and inheritance taxes. Consult with your tax and estate adviser to be
sure which rules will apply to you.)
Payee - The Contract Owner, Annuitant, Annuitant's Beneficiary, or any other
person, estate, or legal entity to whom benefits are to be paid.
Portfolio - A separate investment series of the Trust. The Trust currently
offers 6 series in the PGA Retirement Annuity: the Capital Preservation
Portfolio, the Income Oriented Portfolio, the Growth and Income Portfolio, the
Capital Growth Portfolio, the Maximum Appreciation Portfolio, and the Money
Market Fund (each a "Portfolio" and, collectively, the "Portfolios"). In this
Prospectus, Portfolio will also be used to refer to the Subaccount that
invests in the corresponding Portfolio/Fund.
Premium Tax - A regulatory tax that may be assessed by certain states on the
Purchase Payments you make to this Contract. The amount which we must pay as
Premium Tax will be deducted from each Purchase Payment or from your
Accumulated Value as it is incurred by us.
Proof of Death - (a) A certified death certificate; (b) a certified decree of
a court of competent jurisdiction as to the finding of death; (c) a written
statement by a medical doctor who attended the deceased; or (d) any other
proof of death satisfactory to the Company.
Purchase Payment - Any premium payment. The minimum initial Purchase Payment
is $3,000 for Non-Qualified Contracts and $2,000 for Qualified Contracts (or
$50 monthly by payroll deduction for Qualified Contracts); each additional
Purchase Payment must be at least $500 for Non-Qualified Contracts or $50 for
Qualified Contracts. Purchase Payments may be made at any time prior to the
Annuity Date as long as the Annuitant is living.
Qualified Contract - An annuity contract as defined under Sections 403(b) and
408(b) of the Internal Revenue Code of 1986, as amended (the "Code").
Right to Cancel Period - The period during which the Contract can be canceled
and treated as void from the Contract Date.
Separate Account - That portion of Providian Life and Health Insurance
Company's Separate Account V dedicated to the Contract. The Separate Account
consists of assets that are segregated by Providian Life and Health Insurance
Company and, for Contract Owners, invested in the Portfolios. The Separate
Account is independent of the general assets of the Company.
Subaccount - That portion of the Separate Account that invests in shares of
the Portfolios. Each Subaccount will only invest in a single Portfolio. The
investment performance of each Subaccount is linked directly to the investment
performance of one of the Portfolios.
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Surrender Value - The Accumulated Value less any Premium Taxes incurred but
not yet deducted.
Trust - The Providian Series Trust.
Underlying Funds - Four series of the Trust in which the Portfolios, other
than the Money Market Fund, invest. The four series are the High Quality Stock
Fund, Fixed Income Fund, International Active Fund, and Money Market Fund.
Valuation Period - The performance of your Contract is measured by using the
Accumulation Unit Value. This value is calculated at the close of each
Business Day. A Valuation Period is defined as the period of time between the
close of business on one Business Day and the close of business on the
following Business Day.
5
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HIGHLIGHTS
YOU CAN FIND DEFINITIONS OF IMPORTANT TERMS IN THE GLOSSARY (PAGE 3).
PGA RETIREMENT ANNUITY
The Contract provides a vehicle for investing on a tax-deferred basis in 5
investment company Portfolios. Monies may be subsequently withdrawn from the
Contract either as a lump sum or as annuity income as permitted under the
Contract. Accumulated Values and Annuity Payments depend on the investment
experience of the selected Portfolio(s). The investment performance of the
Portfolios is not guaranteed. Thus, you bear all investment risk for monies
invested under the Contract.
WHO SHOULD INVEST
The Contract is designed for investors seeking long term, tax-deferred
accumulation of funds, generally for retirement but also for other long-term
investment purposes. The tax-deferred feature of the Contract is most
attractive to investors in high federal and state marginal income tax brackets.
The Contract is offered as both a Qualified Contract and a Non-Qualified
Contract. Both Qualified and Non-Qualified Contracts offer tax-deferral on
increases in the Contract's value prior to withdrawal or distribution; however,
Purchase Payments made by Contract Owners of Qualified Contracts may be
excludible or deductible from gross income in the year such payments are made,
subject to certain statutory restrictions and limitations. (See "Federal Tax
Considerations," page 20.)
INVESTMENT CHOICES
Your investment in the Contract may be allocated among 5 Subaccounts of the
Separate Account. The Subaccounts in turn invest exclusively in the following 5
Portfolios offered by the Trust: the Capital Preservation Portfolio, the Income
Oriented Portfolio, the Growth and Income Portfolio, the Capital Growth
Portfolio, and the Maximum Appreciation Portfolio. In certain states, your
investment will be invested in the Money Market Fund during the Right to Cancel
Period. The assets of each Portfolio are separate. Each Portfolio has distinct
investment objectives and policies as described in the prospectus for the
Portfolios. (See page 11.)
CONTRACT OWNER
The Contract Owner is the person designated as the owner of the Contract in the
Contract. The Contract Owner may designate any person as a Joint Owner. A Joint
Owner shares ownership in all respects with the Contract Owner. Prior to the
Annuity Date, the Contract Owner has the right to assign ownership, designate
beneficiaries, and make permitted withdrawals and Exchanges among the
Subaccounts.
ANNUITANT
The Annuitant is a person whose life is used to determine the duration of any
Annuity Payments and upon whose death, prior to the Annuity Date, benefits
under the Contract are paid. The Annuitant may not be older than age 75.
ANNUITANT'S BENEFICIARY
The Contract Owner may designate any person to receive benefits under the
Contract which are payable upon the death of the Annuitant prior to the Annuity
Date.
HOW TO INVEST
To invest in the Contract, you will need to provide the necessary information
to us in a customer order form. You will need to select an Annuitant. The
Annuitant may not be older than age 75 at the time the Contract is issued. The
minimum initial Purchase Payment is $3,000 for Non-Qualified Contracts, and
$2,000 for Qualified Contracts (or $50
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monthly by payroll deduction for Qualified Contracts). Subsequent Purchase
Payments must be at least $500 for Non-Qualified Contracts or $50 for Qualified
Contracts. You may make subsequent Purchase Payments at any time before the
Contract's Annuity Date, as long as the Annuitant specified in the Contract is
living. (See page 12.)
ALLOCATION OF PURCHASE PAYMENTS
If the state of issue of your Contract is CA, GA, ID, LA, MI, MO, NE, NH, NC,
OK, OR, SC, UT, VA or WV, then your initial Net Purchase Payment(s) will, when
your Contract is issued, be invested in the Money Market Fund until the
expiration of the Right to Cancel Period of 10 days (30 or more days in some
instances, as specified in your Contract) plus a 5-day grace period to allow
for mail delivery, and then invested according to your initial allocation
instructions.
If the state of issue of your Contract is any other state, your initial Net
Purchase Payment(s) will, unless you indicate otherwise, be invested in the
Portfolio(s) you selected immediately upon our receipt thereof, IN WHICH CASE
YOU WILL BEAR FULL INVESTMENT RISK FOR ANY AMOUNTS ALLOCATED TO THE PORTFOLIOS
DURING THE RIGHT TO CANCEL PERIOD. You must fill out and send us the
appropriate form or comply with other designated Company procedures if you
would like to change how subsequent Net Purchase Payments are allocated. (See
page 13.)
RIGHT TO CANCEL PERIOD
The Contract provides for a Right to Cancel Period of 10 days (30 or more days
in some instances as specified in your Contract) plus a 5 day grace period to
allow for mail delivery, during which you may cancel your investment in the
Contract. To cancel your investment, please return your Contract to us. When we
receive the Contract, (1) if the state of issue of your Contract is CA, GA, ID,
LA, MI, MO, NE, NH, NC, OK, OR, SC, UT, VA or WV, then for any amount of your
initial Purchase Payment(s) invested in the Money Market Fund, we will return
the Accumulated Value of the amount of your Purchase Payment(s) so invested, or
if greater, the amount of your Purchase Payment(s) so invested, and (2) for any
amount of your initial Purchase Payment(s) invested in the Portfolio(s)
immediately following receipt by us, we will return the Accumulated Value of
your Purchase Payment(s) so invested plus any fees and/or Premium Taxes that
may have been subtracted from such amount. (See page 12.)
EXCHANGES
You may make unlimited Exchanges among the Portfolios, provided you maintain a
minimum balance of $1,000 in each Subaccount to which you have allocated a
portion of your Accumulated Value. A $15 fee is currently imposed for Exchanges
in excess of 12 per Contract Year. Exchanges must not reduce the value of any
Subaccount below $1,000, or that remaining amount will be transferred to your
other Subaccounts on a pro rata basis. (See also "Charges and Deductions," page
13.)
DEATH BENEFIT
If the Annuitant specified in your Contract dies prior to the Annuity Date,
your named Annuitant's Beneficiary will receive the Death Benefit under the
Contract. The Death Benefit is the greater of your Accumulated Value or the
Adjusted Death Benefit on the date we receive due proof of the Annuitant's
death. During the first six Contract Years, the Adjusted Death Benefit will be
the sum of all Net Purchase Payments made, less any partial withdrawals taken.
During each subsequent six-year period, the Adjusted Death Benefit will be the
Death Benefit on the last day of the previous six-year period plus any Net
Purchase Payments made, less any partial withdrawals taken during the current
six-year period. After the Annuitant attains age 75, the Adjusted Death Benefit
will remain equal to the Death Benefit on the last day of the six-year period
ending before age 75 occurs plus any Net Purchase Payments subsequently made,
less any partial withdrawals subsequently taken. The Annuitant's Beneficiary
may elect to receive these proceeds as a lump sum or as Annuity Payments. If
the Annuitant dies on or after the Annuity Date, any unpaid payments certain
will be paid, generally to the Annuitant's Beneficiary, in accordance with the
Contract. (See page 17.)
ANNUITY PAYMENT OPTIONS
In addition to the full and partial withdrawal privileges, you may also choose
to create an income stream by requesting an annuity income from us. As the
Contract Owner, you may elect one of several Annuity Payment Options. By
electing an Annuity Payment Option, you are asking us to systematically
liquidate your Contract. We provide you with a variety
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of options as it relates to those payments. At your discretion, payments may
be either fixed or variable or both. Fixed payouts are guaranteed for a
designated period or for life (either single or joint). Variable payments will
vary depending on the performance of the Portfolio(s) selected. (See page 18.)
CONTRACT AND POLICYHOLDER INFORMATION
If you have questions about your Contract, please telephone our Administrative
Offices at 1-800-866-6007 between the hours of 8:00 A.M. to 5:00 P.M. Eastern
time. Please have the Contract number and the Contract Owner's name ready when
you call. As Contract Owner you will receive periodic statements confirming
any financial transactions that take place, as well as quarterly statements
and an annual statement.
CHARGES AND DEDUCTIONS UNDER THE CONTRACT
The Contract has no sales charges and has an annual mortality and expense risk
charge of .55%. Contract Owners may withdraw up to 100% of the Accumulated
Value without incurring a surrender charge. The Contract also includes
administrative charges and policy fees, which pay for administering the
Contract, as well as portions of the management, advisory and other fees,
which reflect the costs of operating the Portfolios. (See page 13.)
FULL AND PARTIAL WITHDRAWALS
You may withdraw all or part of the Surrender Value of the Contract before the
earlier of the Annuity Date or the Annuitant's death. Withdrawals made prior
to age 59 1/2 may be subject to a 10% federal tax penalty (and a portion
thereof may be subject to ordinary income taxes). (See page 16.)
FEE TABLE
The following table illustrates all expenses (except for Premium Taxes that
may be assessed by your state) that you would incur as an owner of a Contract
(see page 13). The purpose of this table is to assist you in understanding the
various costs and expenses that you would bear directly or indirectly as a
purchaser of the Contract. The fee table reflects all expenses for both the
Separate Account and the Portfolios. For a complete discussion of Contract
costs and expenses, see "Charges and Deductions," page 13.
<TABLE>
<S> <C>
CONTRACTOWNER TRANSACTION EXPENSES
Sales Load Imposed on Purchases......................................... None
Contingent Deferred Sales Load (surrender charge)....................... None
Exchange Fees (for Exchanges in excess of twelve per Contract Year)..... $ 15
ANNUAL CONTRACT FEE..................................................... $ 30
SEPARATE ACCOUNT ANNUAL EXPENSES (as a percentage of assets in the
Separate Account)
Mortality and Expense Risk Charge....................................... .55%
Administrative Charge................................................... .15%
----
Total Annual Separate Account Expenses.................................. .70%
</TABLE>
PORTFOLIO ANNUAL EXPENSES
Except for the Money Market Fund, the Portfolios will operate at a zero
expense level during the first three years of operations. However, while those
Portfolios are expected to operate without expenses, including management
fees, Contract Owners in those Portfolios bear indirectly the expenses of the
Underlying Funds in which those Portfolios invest. The following chart
illustrates the indirect expense ratio that each Portfolio, except the Money
Market Fund, is
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estimated to incur based on certain allocations among the Underlying Funds.
Except as may be indicated, the figures below are based on estimated expenses
for the first fiscal year of operation (as a percentage of each such
Portfolio's average net assets after fee waiver and/or expense reimbursement).
<TABLE>
<CAPTION>
TOTAL
PORTFOLIO
ANNUAL
EXPENSES
---------
<S> <C>
Capital Preservation Portfolio.................................. 0.77%*
Income Oriented Portfolio....................................... 0.89%*
Growth and Income Portfolio..................................... 0.90%*
Capital Growth Portfolio........................................ 0.94%*
Maximum Appreciation Portfolio.................................. 0.96%*
</TABLE>
* These numbers are based on an agreement by Providian Investment Advisors,
Inc. (the "Adviser") to limit the other expenses of each Underlying Fund
to 0.25% during the first three years of operations. In the absence of
this agreement and the agreement that the Portfolio will operate at a
zero expense level during the first three years of operations, it is
estimated that the total Portfolio annual expenses would have been as
follows: Capital Preservation Portfolio 4.40%; Income Oriented Portfolio
4.30%; Growth and Income Portfolio 4.19%; Capital Growth Portfolio 4.23%;
and Maximum Appreciation Portfolio 4.66%.
The following example illustrates the expenses that you would incur on a
$1,000 Purchase Payment over various periods, assuming (1) a 5% annual rate of
return and (2) redemption at the end of each period. As noted in the table
above, the Contract imposes no surrender or withdrawal charges of any kind.
Your expenses are identical whether you continue the Contract or withdraw the
entire value of your Contract at the end of the applicable period as a lump
sum or under one of the Contract's Annuity Payment Options.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
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<S> <C> <C>
Capital Preservation Portfolio............................. $22.22 $67.99
Income Oriented Portfolio.................................. $23.47 $71.80
Growth and Income Portfolio................................ $23.60 $72.17
Capital Growth Portfolio................................... $23.85 $72.93
Maximum Appreciation Portfolio............................. $24.10 $73.69
</TABLE>
The Annual Contract Fee in these examples is estimated and reflects a
percentage equal to the total amount of fees collected during a calendar year
divided by the total average net assets of the Portfolios during the same
calendar year. The fee is assumed to remain the same in each year of the above
periods. (With respect to partial year periods, if any, in the examples, the
Annual Contract Fee is pro-rated to reflect only the applicable portion of the
partial year period.) The Annual Contract Fee will be deducted on each
Contract Anniversary and upon surrender or annuitization of the Contract, on a
pro rata basis, from each Subaccount. In some states, the Company will deduct
Premium Taxes as incurred by the Company.
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be higher or lower than those
shown, subject to the guarantees in the Contract.
FINANCIAL STATEMENTS
The audited statutory-basis financial statements of the Company (as well as
the Independent Auditors' Report thereon) are contained in the Statement of
Additional Information. No financial statements are included for the Separate
Account because, as of the date of this Prospectus, the Subaccounts of the
Separate Account offered by the PGA Retirement Annuity had not commenced
operations, and consequently had no assets or liabilities.
PERFORMANCE MEASURES
Performance for the Subaccounts of the Separate Account, including the yield
and effective yield of the Money Market Fund, the yield of the other
Subaccounts, and the total return of all Subaccounts may appear in reports and
promotional literature to current or prospective Contract Owners.
9
<PAGE>
Please refer to the discussion below and to the Statement of Additional
Information for a more detailed description of the method used to calculate a
Portfolio's and Subaccount's yield and total return, and a list of the indexes
and other benchmarks used in evaluating a Portfolio's and Subaccount's
performance.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
When advertising performance of the Subaccounts, the Company will show the
Standardized Average Annual Total Return for a Subaccount which, as prescribed
by the rules of the Securities and Exchange Commission ("SEC"), 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
$1,000 payment made at the beginning of the period and full redemption at the
end of the period. It reflects the deduction of the Annual Contract Fee and
all other Portfolio, Separate Account and Contract level charges except
Premium Taxes, if any.
ADDITIONAL PERFORMANCE MEASURES
NON-STANDARDIZED ACTUAL TOTAL RETURN AND NON-STANDARDIZED ACTUAL AVERAGE
ANNUAL TOTAL RETURN
The Company may show 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, including Total Return Year-to-Date with respect to certain
periods. The Company may also show actual Average Annual Total Return (i.e.,
the average annual change in Accumulation Unit Values) with respect to one or
more periods. For one year, the actual Total Return and the actual Average
Annual Total Return are effective annual rates of return and are equal. For
periods greater than one year, the 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"), the actual Total Return and actual Average Annual
Total Return also reflect these expenses. These percentages, however, do not
reflect the Annual Contract Fee or Premium Taxes (if any) which, if included,
would reduce the percentages reported.
YIELD AND EFFECTIVE YIELD
From time to time a Portfolio may advertise its yield and total return
investment performance. For each Subaccount for which the Company advertises
yield, the Company shall furnish a yield quotation referring to the Portfolio
computed in the following manner: the net investment income per Accumulation
Unit earned during a recent one month period is divided by the Accumulation
Unit Value on the last day of the period.
Please refer to the Statement of Additional Information for a description of
the method used to calculate a Portfolio's yield and total return, and a list
of the indexes and other benchmarks used in evaluating a Portfolio's
performance.
The performance measures discussed above reflect results of the Portfolios and
are not intended to indicate or predict future performance. For more detailed
information, see the Statement of Additional Information.
Performance information for the Subaccounts may be contrasted with other
comparable variable annuity separate accounts or other investment products
surveyed by Lipper Analytical Services, a nationally recognized independent
reporting service which ranks mutual funds and other investment companies by
overall performance, investment objectives and assets. Performance may also be
tracked by other ratings services, companies, publications or persons who rank
separate accounts or other investment products on overall performance or other
criteria, including Morningstar, Inc. Performance figures will be calculated
in accordance with standardized methods established by each reporting service.
10
<PAGE>
THE COMPANY AND THE SEPARATE ACCOUNT
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
The Company is a stock life insurance company incorporated under the laws of
Missouri on August 6, 1920. The Company is principally engaged in offering life
insurance, annuity contracts, and accident and health insurance and is admitted
to do business in all states except for New York, as well as the District of
Columbia and Puerto Rico. The Company is wholly-owned, directly and indirectly,
by Providian Corporation, a publicly-held diversified consumer financial
services company whose shares are traded on the New York Stock Exchange with
assets of $26.8 billion as of December 31, 1995.
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY SEPARATE ACCOUNT V
The Separate Account was established by the Company as a separate account under
the laws of the State of Missouri on February 14, 1992, pursuant to a
resolution of the Company's Board of Directors. The Separate Account is a unit
investment trust registered with the SEC under the Investment Company Act of
1940 (the "1940 Act"). Such registration does not signify that the SEC
supervises the management or the investment practices or policies of the
Separate Account. The Separate Account meets the definition of a "separate
account" under the federal securities laws.
The assets of the Separate Account are owned by the Company and the obligations
under the Contract are obligations of the Company. These assets are held
separately from the other assets of the Company and are not chargeable with
liabilities incurred in any other business operation of the Company (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 Separate Account, whether or not realized, are credited to or
charged against the Separate Account without regard to other income, gains or
losses of the Company. Therefore, the investment performance of the Separate
Account is entirely independent of the investment performance of the General
Account assets or any other separate account maintained by the Company.
The Separate Account has dedicated 6 Subaccounts to the Contract, each of which
invests solely in a corresponding Portfolio of the Trust. Additional
subaccounts may be established at the discretion of the Company. The Separate
Account also includes other subaccounts which are not available under the
Contract.
PROVIDIAN SERIES TRUST
The Trust is a diversified investment company presently consisting of 9
separate series each having different investment objectives and policies. This
Contract offers 6 series of shares, each a professionally managed investment
Portfolio. Except for the Money Market Fund, each Portfolio seeks to achieve
its objective by investing in a number of other series offered by the Trust.
The Money Market Fund is available only for the purposes of depositing and
holding initial purchase payments during the Right to Cancel Period for the
Contracts issued in certain states. The Adviser has retained Federated
Investment Counseling to serve as sub-adviser to the Money Market Fund and
Atlanta Capital Management Company, L.L.C. ("Atlanta Capital") to serve as sub-
adviser for the other Portfolios. Subject to the supervision and direction of
the Board of Trustees of the Trust, Atlanta Capital determines how each of its
Portfolio's assets will be invested in the Underlying Funds. Atlanta Capital
receives a fee, which is paid by the Adviser and is a percentage of the annual
net asset value of the Underlying Funds in which Atlanta Capital serves as sub-
adviser and the Portfolios invest. The advisory fee is deducted automatically
from the assets of the Underlying Funds, and is therefore paid indirectly by
the Portfolios. Similarly, Federated Investment Counseling receives a fee,
which is paid by the Adviser and is a percentage of the annual net asset value
of the Money Market Fund.
THE PORTFOLIOS (SEE ACCOMPANYING PROSPECTUS)
For more information concerning the risks associated with each Portfolio's
investments, please refer to the prospectus for the Portfolios.
THE CAPITAL PRESERVATION PORTFOLIO-seeks high current income with low
volatility of principal.
THE INCOME ORIENTED PORTFOLIO-seeks income and, secondarily, long term growth
of capital.
11
<PAGE>
THE GROWTH AND INCOME PORTFOLIO-seeks growth of capital and income.
THE CAPITAL GROWTH PORTFOLIO-seeks long term growth of capital and,
secondarily, current income.
THE MAXIMUM APPRECIATION PORTFOLIO-seeks capital appreciation.
THE MONEY MARKET FUND-seeks current income, a stable share price, and daily
liquidity. The Money Market Fund invests in corporate, bank, and government
instruments that present minimal credit risk. AN INVESTMENT IN THE MONEY
MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN
BE NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE.
OTHER PORTFOLIO INFORMATION
There is no assurance that a Portfolio will achieve its stated investment
objective.
Additional information concerning the investment objectives and policies of
the Portfolios and the investment advisory services, total expenses and
charges can be found in the current prospectuses for the Portfolios. THE
PORTFOLIOS' PROSPECTUS SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
CONCERNING THE ALLOCATION OF NET PURCHASE PAYMENTS TO A PORTFOLIO.
The Portfolios may, in the future, be made available to registered separate
accounts offering variable annuity and variable life products of the Company
as well as other insurance companies or to a person or plan, including a
pension or retirement plan receiving favorable tax treatment under the Code,
that qualifies to purchase shares of the Portfolios under Section 817(h) of
the Code. Although we believe it is unlikely, a material conflict could arise
among the interests of the Separate Account and one or more of the other
participating separate accounts and other qualified persons or plans. In the
event of a material conflict, the affected insurance companies agree to take
any necessary steps, including removing their separate accounts from the
Portfolios if required by law, to resolve the matter.
CONTRACT FEATURES
The rights and benefits under the Contract are described below and in the
Contract. The Company reserves the right to make any modification to conform
the Contract to, or give the Contract Owner the benefit of, any federal or
state statute or any rule or regulation of the United States Treasury
Department.
RIGHT TO CANCEL PERIOD
A Right to Cancel Period exists for a minimum of 10 days after you receive the
Contract (30 or more days in some instances as set forth in your Contract)
plus a 5 day grace period to allow for mail delivery. The Contract permits you
to cancel the Contract during the Right to Cancel Period by returning the
Contract to our Administrative Offices, P.O. Box 32700, Louisville, Kentucky
40232. Upon cancellation, the Contract is treated as void from the Contract
Date and when we receive the Contract, (1) if the state of issue of your
Contract is CA, GA, ID, LA, MI, MO, NE, NH, NC, OK, OR, SC, UT, VA or WV, then
for any amount of your initial Purchase Payment(s) invested in the Money
Market Fund, we will return the Accumulated Value of the amount of your
Purchase Payment(s) so invested, or if greater, the amount of your Purchase
Payment(s) so invested, and (2) for any amount of your initial Purchase
Payment(s) invested in the Portfolio(s) immediately following receipt by us,
we will return the Accumulated Value of your Purchase Payment(s) so invested
plus any fees and/or Premium Taxes that may have been subtracted from such
amount.
CONTRACT PURCHASE AND PURCHASE PAYMENTS
If you wish to purchase a Contract, you should complete the customer order
form and forward it and the initial Purchase Payment to such address as the
Company may from time to time designate. If you wish to make personal delivery
by hand or courier to the Company of the customer order form and the initial
Purchase Payment (rather than through the mail), you must do so at our
Administrative Offices at 400 West Market Street, Louisville, KY 40202. The
initial Purchase Payment for a Non-Qualified Contract must be equal to or
greater than the $3,000 minimum investment requirement. The Initial Purchase
Payment for a Qualified Contract must be equal to or greater than $2,000 (or
you may establish a payment schedule of $50 a month by payroll deduction). To
obtain a customer order form, please call our Administrative Offices at 1-800-
866-6007.
12
<PAGE>
The Contract will be issued and the initial Purchase Payment less any Premium
Taxes will be credited within 2 Business Days after receipt of the customer
order form and the initial Purchase Payment in good order. The Company
reserves the right to reject any customer order form or initial Purchase
Payment. Following issuance, the Contract will be mailed to you along with a
Contract acknowledgment form, which you should complete, sign and return in
accordance with its instructions. Please note that until the Company receives
the acknowledgment form signed by the Owner and any Joint Owner, the Owner and
any Joint Owner must obtain a signature guarantee on their written signed
request in order to exercise any rights under the Contract.
If the initial Purchase Payment cannot be credited within 5 Business Days
because the customer order form is incomplete, we will contact the applicant,
explain the reason for the delay and will refund the initial Purchase Payment,
unless the applicant instructs us to retain the initial Purchase Payment and
credit it as soon as the necessary requirements are fulfilled.
Additional Purchase Payments may be made at any time prior to the Annuity
Date, as long as the Annuitant is living. Additional Purchase Payments must be
for at least $500 for Non-Qualified Contracts, or $50 for Qualified Contracts.
Additional Purchase Payments received prior to the close of the New York Stock
Exchange (generally 4:00 P.M. Eastern time) are credited to the Accumulated
Value at the close of business that same day. Additional Purchase Payments
received after the close of the New York Stock Exchange are processed the next
Business Day.
Total Purchase Payments may not exceed $1,000,000 without our prior approval.
PURCHASING BY WIRE
For wiring instructions please contact our Administrative Offices at 1-800-
866-6007.
ALLOCATION OF PURCHASE PAYMENTS
You decide how your Net Purchase Payments will be allocated. You may allocate
each Net Purchase Payment to one of the Portfolios by sending us the
appropriate Company form or by complying with other designated Company
procedures. If an additional Net Purchase Payment is not accompanied by
allocation instructions, it will be allocated to the same Portfolio(s) as your
prior Net Purchase Payments are invested at that time, unless otherwise
directed by you in writing in advance.
If the state of issue of your Contract is CA, GA, ID, LA, MI, MO, NE, NH, NC,
OK, OR, SC, UT, VA or WV, then your initial Net Purchase Payment(s) will, when
your Contract is issued, be invested in the Money Market Fund until the
expiration of the Right to Cancel Period of 10 days (30 or more days in some
instances, as set forth in your Contract) plus a 5-day grace period to allow
for mail delivery, and then invested according to your initial allocation
instructions.
If the state of issue of your Contract is any other state, your initial Net
Purchase Payment(s) will, unless you indicate otherwise, be invested in your
Portfolio(s) immediately upon our receipt thereof, IN WHICH CASE YOU WILL BEAR
FULL INVESTMENT RISK FOR ANY AMOUNTS ALLOCATED TO THE PORTFOLIOS DURING THE
RIGHT TO CANCEL PERIOD.
CHARGES AND DEDUCTIONS
There are no sales charges for the Contracts.
MORTALITY AND EXPENSE RISK CHARGE
We impose a charge as compensation for bearing certain mortality and expense
risks under the Contracts. The annual charge is assessed daily based on the
net asset value of the Separate Account. The annual mortality and expense risk
charge is .55% of the net asset value of the Separate Account.
We guarantee that this annual charge will never increase. If this charge is
insufficient to cover actual costs and assumed risks, the loss will fall on
us. Conversely, if the charge proves more than sufficient, any excess will be
added to the Company surplus and will be used for any lawful purpose,
including any shortfall on the costs of distributing the Contracts.
13
<PAGE>
The mortality risk borne by us under the Contracts, where one of the life
Annuity Payment Options is selected, is to make monthly Annuity Payments
(determined in accordance with the annuity tables and other provisions
contained in the Contract) regardless of how long all Annuitants may live. We
also assume mortality risk as a result of our guarantee of a Death Benefit in
the event the Annuitant dies prior to the Annuity Date.
The expense risk borne by us under the Contracts is the risk that the charges
for administrative expenses which are guaranteed for the life of the Contract
may be insufficient to cover the actual costs of issuing and administering the
Contract.
ADMINISTRATIVE CHARGE AND ANNUAL CONTRACT FEE
An administrative charge equal to .15% annually of the net asset value of the
Separate Account is assessed daily along with the Annual Contract Fee of $30.
The Annual Contract Fee is deducted proportionately from the Subaccounts. For
any Contract with amounts allocated to the Subaccounts, the $30 fee is
assessed per Contract, not per Portfolio chosen. The Annual Contract Fee will
be deducted from each Subaccount on each Contract Anniversary and upon
surrender, on a pro rata basis based on the number of months that have passed
since the last anniversary date. These deductions represent reimbursement for
the costs expected to be incurred over the life of the Contract for issuing
and maintaining each Contract and the Separate Account.
EXCHANGES
Each Contract Year you may make an unlimited number of Exchanges between
Portfolios, provided that after an Exchange no Portfolio may contain a balance
less than $1,000. A $15 fee is currently imposed for Exchanges in excess of 12
per Contract Year.
EXCEPTIONS TO CHARGES AND TO TRANSACTION OR BALANCE REQUIREMENTS
The administrative charges or fees may be reduced for sales of Contracts to a
trustee, employer or similar entity representing a group where the Company
determines that such sales result in savings of administrative expenses. In
addition, 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 are permitted to
purchase Contracts with substantial reduction of administrative charges or
fees or with a waiver or modification of certain minimum or maximum purchase
and transaction amounts or balance requirements. Contracts so purchased are
for investment purposes only and may not be resold except to the Company.
In no event will reduction or elimination of fees or charges or waiver or
modification of transaction or balance requirements be permitted where such
reduction, elimination, waiver or modification will be unfairly discriminatory
to any person. Additional information about reductions in charges is contained
in the Statement of Additional Information.
TAXES
We will, where such taxes are imposed on the Company by state law, deduct
Premium Taxes that currently range up to 3.5%. These taxes will be deducted
from the Accumulated Value or Purchase Payments in accordance with applicable
law.
As of the date of this Prospectus, the following state assesses a Premium Tax
on all initial and additional Purchase Payments on Non-Qualified Contracts:
<TABLE>
<CAPTION>
PERCENTAGE
----------
<S> <C>
South Dakota................................................... 1.25%
</TABLE>
In addition, a number of states currently impose Premium Taxes at the time an
Annuity Payment Option (other than a Lump Sum Payment Option) is selected. As
of the date of this Prospectus, the following states assess a Premium Tax
14
<PAGE>
against the Accumulated Value if the Contract Owner chooses an Annuity Payment
Option instead of receiving a lump sum distribution:
<TABLE>
<CAPTION>
QUALIFIED NON-QUALIFIED
PERCENTAGE PERCENTAGE
---------- -------------
<S> <C> <C>
Alabama.................................... 1.00% 1.00%
California................................. 0.50% 2.35%
District of Columbia....................... 2.25% 2.25%
Kansas..................................... 0.00% 2.00%
Kentucky................................... 2.00% 2.00%
Maine...................................... 0.00% 2.00%
Nevada..................................... 0.00% 3.50%
West Virginia.............................. 1.00% 1.00%
Wyoming.................................... 0.00% 1.00%
</TABLE>
Under present laws, the Company will incur state or local taxes (in addition to
the Premium Taxes described above) in several states. At present, the Company
does not charge the Contract Owner for these taxes. If there is a change in
state or local tax laws, charges for such taxes may be made. The Company does
not expect to incur any federal income tax liability attributable to investment
income or capital gains retained as part of the reserves under the Contracts.
(See "Federal Tax Considerations," page 20.) Based upon these expectations, no
charge is currently being made to the Separate Account for corporate federal
income taxes that may be attributable to the Separate Account.
The Company will periodically review the question of a charge to the Separate
Account for federal income taxes related to the Separate Account. Such a charge
may be made in future years for any federal income taxes incurred by the
Company. This might become necessary if the tax treatment of the Company is
ultimately determined to be other than what the Company currently believes it
to be, if there are changes made in the federal income tax treatment of
annuities at the corporate level, or if there is a change in the Company's tax
status. In the event that the Company should incur federal income taxes
attributable to investment income or capital gains retained as part of the
reserves under the Contracts, the Accumulated Value of the Contract would be
correspondingly adjusted by any provision or charge for such taxes.
PORTFOLIO EXPENSES
The value of the assets in the Separate Account reflect the fees and expenses
paid by the Portfolios. A complete description of these expenses is found in
the "Fee Table" section of this Prospectus and in the Trust's Prospectus and
Statement of Additional Information.
ACCUMULATED VALUE
At the commencement of the Contract, the Accumulated Value equals the initial
Net Purchase Payment. Thereafter, the Accumulated Value equals the Accumulated
Value from the previous Business Day increased by: (i) any additional Net
Purchase Payments received by the Company and (ii) any increase in the
Accumulated Value due to investment results of the selected Portfolio(s) during
the Valuation Period; and reduced by: (i) any decrease in the Accumulated Value
due to investment results of the selected Portfolio(s), (ii) a daily charge to
cover the mortality and expense risks assumed by the Company, (iii) any charge
to cover the cost of administering the Contract, (iv) any partial withdrawals,
and (v) any charges for any Exchanges made after the first 12 in any Contract
Year.
EXCHANGES AMONG THE PORTFOLIOS
Should your investment goals change, you may exchange Accumulated Value among
the Portfolios. Requests for Exchanges, received by mail or by telephone, prior
to the close of the New York Stock Exchange (generally 4:00 P.M. Eastern time)
are processed at the close of business that same day. Requests received after
the close of the New York Stock Exchange are processed the next Business Day.
If you experience difficulty in making a telephone Exchange your Exchange
request may be made by regular or express mail. It will be processed on the
date received.
To take advantage of the privilege of initiating transactions by telephone, you
must first elect the privilege by completing the appropriate section of the
Contract acknowledgment form, which you will receive with your Contract. You
may also complete a separate telephone authorization form at a later date. To
take advantage of the privilege of authorizing a third party to initiate
transactions by telephone, you must first complete a third party authorization
form or the appropriate section of the Contract acknowledgment form.
15
<PAGE>
The Company will undertake reasonable procedures to confirm that instructions
communicated by telephone are genuine. Prior to the acceptance of any request,
the caller will be asked by a customer service representative for his or her
Contract number and social security number. In addition, telephone
communications from a third party authorized to transact in an account will
undergo reasonable procedures to confirm that instructions are genuine. The
third party caller will be asked for his or her name, company affiliation (if
appropriate), the Contract number to which he or she is referring, and the
social security number of the Contract Owner. All calls will be recorded, and
this information will be verified with the Contract Owner's records prior to
processing a transaction. Furthermore, all transactions performed by a customer
service representative will be verified with the Contract Owner through a
written confirmation statement. The Company, the Adviser, the Trust, the
Portfolios, Atlanta Capital, and Federated Advisers shall not be liable for any
loss, cost or expense for action on telephone instructions that are believed to
be genuine in accordance with these procedures.
FULL AND PARTIAL WITHDRAWALS
At any time before the Annuity Date and while the Annuitant is living, you may
make a partial or full withdrawal of the Contract to receive all or part of the
Surrender Value by sending a written request to our Administrative Offices.
Full or partial withdrawals may only be made before the Annuity Date and all
partial withdrawal requests must be for at least $500. The amount available for
full or partial withdrawal is the Surrender Value at the end of the Valuation
Period during which the written request for withdrawal is received. The
Surrender Value is an amount equal to the Accumulated Value, less any Premium
Taxes incurred but not yet deducted. The withdrawal amount may be paid in a
lump sum to you, or if elected, all or any part may be paid out under an
Annuity Payment Option. (See "Annuity Payment Options," page 18.)
You can make a withdrawal by sending the appropriate Company form to our
Administrative Offices. Your proceeds will normally be processed and mailed to
you within 2 Business Days after the receipt of the request but in no event
will it be later than 7 calendar days, subject to postponement in certain
circumstances. (See "Deferment of Payment," page 19.)
Payments under the Contract of any amounts derived from premiums paid by check
may be delayed until such time as the check has cleared your bank. If, at the
time the Contract Owner requests a full or partial withdrawal, he has not
provided the Company with a written election not to have federal income taxes
withheld, the Company must by law withhold such taxes from the taxable portion
of any full or partial withdrawal and remit that amount to the federal
government. Moreover, the Code provides that a 10% penalty tax may be imposed
on certain early withdrawals. (See "Federal Tax Considerations," page 20.)
Since the Contract Owner assumes the investment risk with respect to amounts
allocated to the Separate Account, the total amount paid upon withdrawal of the
Contract (taking into account any prior withdrawals) may be more or less than
the total Net Purchase Payments made.
SYSTEMATIC WITHDRAWAL OPTION
You may choose to have a specified dollar amount provided to you on a regular
basis from the portion of your Contract's Accumulated Value that is allocated
to the Portfolios. By electing the Systematic Withdrawal Option, withdrawals
may be made on a monthly, quarterly, semi-annual or annual basis. The minimum
amount for each withdrawal is $250.
This option may be elected by completing the Systematic Withdrawal Request
Form. This form must be received by us at least 30 days prior to the date
systematic withdrawals will begin. Each withdrawal will be processed on the day
and at the frequency indicated on the Systematic Withdrawal Request Form. The
start date for the systematic withdrawals must be between the first and twenty-
eighth day of the month. You may discontinue the Systematic Withdrawal Option
at any time by notifying us in writing at least 30 days prior to your next
scheduled withdrawal date.
Each systematic withdrawal is subject to federal income taxes on the taxable
portion, and may be subject to a 10% federal tax penalty if you are under age
59 1/2. You may elect to have federal income taxes withheld from each
withdrawal at a 10% rate on the Systematic Withdrawal Request Form. For a
discussion of the tax consequences of withdrawals, see "Federal Tax
Considerations" on page 20 of the Prospectus. You may wish to consult a tax
adviser regarding any tax consequences that might result prior to electing the
Systematic Withdrawal Option.
16
<PAGE>
We reserve the right to discontinue offering the Systematic Withdrawal Option
upon 30 days written notice. We also reserve the right to charge a fee for
such service.
IRS-REQUIRED DISTRIBUTIONS
Prior to the Annuity Date, if you or, if applicable, a Joint Owner dies before
the entire interest in the Contract is distributed, the value of the Contract
must be distributed to the Owner's Designated Beneficiary (unless the Contract
Owner was also the Annuitant--in which case the Annuitant's Beneficiary is
entitled to the Death Benefit) as described in this section so that the
Contract qualifies as an annuity under the Code. If the death occurs on or
after the Annuity Date, the remaining portions of such interest will be
distributed at least as rapidly as under the method of distribution being used
as of the date of death. If the death occurs before the Annuity Date, the
entire interest in the Contract will be distributed within 5 years after date
of death or be paid under an Annuity Payment Option under which payments will
begin within 1 year of the Contract Owner's death and will be made for the
life of the Owner's Designated Beneficiary or for a period not extending
beyond the life expectancy of that beneficiary. The Owner's Designated
Beneficiary is the person to whom ownership of the Contract passes by reason
of death.
If any portion of the Contract Owner's interest is payable to (or for the
benefit of) the surviving spouse of the Contract Owner, the Contract may be
continued with the surviving spouse as the new Contract Owner.
MINIMUM BALANCE REQUIREMENT
In the event that the entire value of the Contract falls below $1,000, you may
be notified that the Accumulated Value of your account is below the Contract's
minimum requirement. You would then be allowed 60 days to make an additional
investment before the account is liquidated. Proceeds would be promptly paid
to the Contract Owner. The full proceeds would be taxable as a withdrawal. We
will not exercise this right with respect to Qualified Contracts.
DESIGNATION OF AN ANNUITANT'S BENEFICIARY
The Contract Owner may select one or more Annuitant's Beneficiaries and name
them in the customer order form. Thereafter, while the Annuitant is living,
the Contract Owner may change the Annuitant's Beneficiary by sending us the
appropriate Company form. Such change will take effect on the date such form
is signed by the Contract Owner but will not affect any payment made or other
action taken before the Company acknowledges such form. You may also make the
designation of Annuitant's Beneficiary irrevocable by sending us the
appropriate Company form and obtaining approval from the Company. Changes in
the Annuitant's Beneficiary may then be made only with the consent of the
designated irrevocable Annuitant's Beneficiary.
If the Annuitant dies prior to the Annuity Date, the following will apply
unless the Contract Owner has made other provisions.
(a) If there is more than one Annuitant's Beneficiary, each will share in
the Death Benefits equally;
(b) If one or two or more Annuitant's Beneficiaries have already died, that
share of the Death Benefit will be paid equally to the survivor(s);
(c) If no Annuitant's Beneficiary is living, the proceeds will be paid to
the Contract Owner;
(d) If an Annuitant's Beneficiary dies at the same time as the Annuitant,
the proceeds will be paid as though the Annuitant's Beneficiary had
died first. If an Annuitant's Beneficiary dies within 15 days after the
Annuitant's death and before the Company receives due proof of the
Annuitant's death, proceeds will be paid as though the Annuitant's
Beneficiary had died first.
If an Annuitant's Beneficiary who is receiving Annuity Payments dies, any
remaining payments certain will be paid to that Annuitant's Beneficiary's
named beneficiary(ies) when due. If no Annuitant's Beneficiary survives the
Annuitant, the right to any amount payable will pass to the Contract Owner. If
the Contract Owner is the Annuitant, this right will pass to his or her
estate. If a Life Annuity with Period Certain option was elected, and if the
Annuitant dies on or after the Annuity Date, any unpaid payments certain will
be paid to the Annuitant's Beneficiary or your designated Payee.
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DEATH OF ANNUITANT PRIOR TO ANNUITY DATE
If the Annuitant dies prior to the Annuity Date, an amount will be paid as
proceeds to the Annuitant's Beneficiary. The Death Benefit is calculated and
is payable upon receipt of due Proof of Death of the Annuitant as well as
proof that the Annuitant died prior to the Annuity Date. Upon receipt of this
proof, the Death Benefit will be paid within seven days, or as soon thereafter
as the Company has sufficient information about the Annuitant's Beneficiary to
make the payment. The Annuitant's Beneficiary may receive the amount payable
in a lump sum cash benefit or under one of the Annuity Payment Options.
The Death Benefit is the greater of:
(1) The Accumulated Value on the date we receive due Proof of Death; or
(2) The Adjusted Death Benefit.
During the first six Contract Years, the Adjusted Death Benefit will be the
sum of all Net Purchase Payments made, less any partial withdrawals taken.
During each subsequent six-year period, the Adjusted Death Benefit will be the
Death Benefit on the last day of the previous six-year period plus any Net
Purchase Payments made, less any partial withdrawals taken during the current
six-year period. After the Annuitant attains age 75, the Adjusted Death
Benefit will remain equal to the Death Benefit on the last day of the six-year
period ending before age 75 occurs plus any Net Purchase Payments subsequently
made, less any partial withdrawals subsequently taken.
ANNUITY DATE
You may specify an Annuity Date, which can be no later than the first day of
the month after the Annuitant's 85th birthday, without the Company's prior
approval. The Annuity Date is the date that Annuity Payments are scheduled to
commence under the Contract unless the Contract has been surrendered or an
amount has been paid as proceeds to the designated Annuitant's Beneficiary
prior to that date.
You may advance or defer the Annuity Date. However, the Annuity Date may not
be advanced to a date prior to 30 days after the date of receipt of a written
request or, without the Company's prior approval, deferred to a date beyond
the first day of the month after the Annuitant's 85th birthday. The Annuity
Date may only be changed by written request during the Annuitant's lifetime
and must be made at least 30 days before the then-scheduled Annuity Date. The
Annuity Date and the Annuity Payment options available for Qualified Contracts
may also be controlled by endorsements, the plan or applicable law.
LUMP SUM PAYMENT OPTION
You may surrender the Contract at any time while the Annuitant is living and
before the Annuity Date. The Surrender Value is equal to the Accumulated
Value, less any Premium Taxes incurred but not yet deducted.
ANNUITY PAYMENT OPTIONS
All Annuity Payment Options (except for the Designated Period Annuity Option)
are offered as "Variable Annuity Options." This means that Annuity Payments,
after the initial payment, will reflect the investment experience of the
Portfolio or Portfolios you have chosen. All Annuity Payment Options are also
offered as "Fixed Annuity Options." This means that the amount of each payment
will be set on the Annuity Date and will not change. The following Annuity
Payment Options are available under the Contract:
Life Annuity--Monthly Annuity Payments are paid for the life of an Annuitant,
ceasing with the last Annuity Payment due prior to the Annuitant's death.
Joint and Last Survivor Annuity--Monthly Annuity Payments are paid for the
life of two Annuitants and thereafter for the life of the survivor, ceasing
with the last Annuity Payment due prior to the survivor's death.
Life Annuity with Period Certain--Monthly Annuity Payments are paid for the
life of an Annuitant, with a Period Certain of not less than 120, 180, or 240
months, as elected.
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Installment or Unit Refund Life Annuity--Available as either a Fixed
(Installment Refund) or Variable (Unit Refund) Annuity Option. Monthly Annuity
Payments are paid for the life of an Annuitant, with a Period Certain
determined by dividing the Accumulated Value by the first Annuity Payment.
Designated Period Annuity--Only available as a Fixed Annuity Option. Monthly
Annuity Payments are paid for a Period Certain as elected, which may be from
10 to 30 years.
Before the Annuity Date and while the Annuitant is living, you may change the
Annuity Payment Option by written request. The request for change must be made
at least 30 days prior to the Annuity Date and is subject to the approval of
the Company. If an Annuity Payment Option is chosen that depends on the
continuation of the life of the Annuitant, proof of birth date may be required
before Annuity Payments begin. For Annuity Payment Options involving life
income, the actual age of the Annuitant will affect the amount of each
payment. Since payments to older Annuitants are expected to be fewer in
number, the amount of each Annuity Payment will generally be greater.
All or part of the Accumulated Value may be placed under one or more Annuity
Payment Options. If Annuity Payments are to be paid under more than one
option, the Company must be told what part of the Accumulated Value is to be
paid under each option.
If at the time of any Annuity Payment you have not provided the Company with a
written election not to have federal income taxes withheld, the Company must
by law withhold such taxes from the taxable portions of such Annuity Payment
and remit that amount to the federal government.
In the event that an Annuity Payment Option is not selected, the Company will
make monthly Annuity Payments that will go on for as long as the Annuitant
lives (120 payments guaranteed) in accordance with the Life Annuity with
Period Certain Option and the annuity benefit sections of the Contract. That
portion of the Accumulated Value that has been held in a Portfolio prior to
the Annuity Date will be applied under a Variable Annuity Option based on the
performance of that Portfolio. Subject to approval by the Company, you may
select any other Annuity Payment Option then being offered by the Company. All
Fixed Annuity Payments and the initial Variable Annuity Payment are guaranteed
to be not less than as provided by the Annuity Tables and the Annuity Payment
Option elected by the Contract Owner. The minimum payment, however, is $100.
If the Accumulated Value is less than $3,000, or less than $2,000 for Texas
Contract Owners, the Company has the right to pay that amount in a lump sum.
From time to time, the Company may require proof that the Annuitant or
Contract Owner is living. Annuity Payment Options are not available to: (1) an
assignee; or (2) any other than a natural person, except with the consent of
the Company.
We may, at the time of election of an Annuity Payment Option, offer more
favorable rates in lieu of the guaranteed rates specified in the Annuity
Tables found in the Contract.
The value of Variable Annuity Payments will reflect the investment experience
of the chosen Portfolio. Only one Variable Annuity Option may be chosen from
among those made available by the Company for each Portfolio. The Annuity
Tables, which are contained in the Contract and are used to calculate the
value of the initial Variable Annuity Payment, are based on an assumed
interest rate of 4%. If the actual net investment experience exactly equals
the assumed interest rate, then the Variable Annuity Payments will remain the
same (equal to the first Annuity Payment). However, if actual investment
experience exceeds the assumed interest rate, the Variable Annuity Payments
will increase; conversely, they will decrease if the actual experience is
lower. The method of computation of Variable Annuity Payments is described in
more detail in the Statement of Additional Information.
The value of all payments, both fixed and variable, will be greater for
shorter guaranteed periods than for longer guaranteed periods, and greater for
life annuities than for joint and survivor annuities, because they are
expected to be made for a shorter period.
After the Annuity Date, you may change the Portfolio funding the Variable
Annuity Payments on the appropriate Company form or by calling our
Administrative Offices at 1-800-866-6007.
DEFERMENT OF PAYMENT
Payment of any cash withdrawal or lump sum Death Benefit due from the Separate
Account will occur within 7 days from the date the election becomes effective
except that the Company may be permitted to defer such payment if: (1)
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the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the New York Stock Exchange is otherwise restricted;
or (2) an emergency exists as defined by the SEC, or the SEC requires that
trading be restricted; or (3) the SEC permits a delay for the protection of
Contract Owners.
FEDERAL TAX CONSIDERATIONS
INTRODUCTION
The ultimate effect of federal income taxes on the amounts paid for the
Contract, on the investment return on assets held under a Contract, on Annuity
Payments, and on the economic benefits to the Contract Owner, Annuitant or
Annuitant's Beneficiary, depends on the terms of the Contract, the Company's
tax status and upon the tax status of the individuals concerned. The following
discussion is general in nature and is not intended as tax advice. You should
consult a tax adviser regarding the tax consequences of purchasing a Contract.
No attempt is made to consider any applicable state or other tax laws.
Moreover, the discussion is based upon the Company's understanding of the
federal income tax laws as they are currently interpreted. No representation
is made regarding the likelihood of continuation of the federal income tax
laws, the Treasury regulations or the current interpretations by the Internal
Revenue Service. We reserve the right to make uniform changes in the Contract
to the extent necessary to continue to qualify the Contract as an annuity. For
a discussion of federal income taxes as they relate to the Funds, please see
the accompanying Prospectuses for the Funds.
TAXATION OF ANNUITIES IN GENERAL
Section 72 of the Code governs taxation of annuities. In general, a Contract
Owner is not taxed on increases in value under a Contract until some form of
withdrawal or distribution is made under it. However, under certain
circumstances, the increase in value may be subject to current federal income
tax. (See "Contracts Owned by Non-Natural Persons," and "Diversification
Standards," page 22.)
Section 72 provides that the proceeds of a full or partial withdrawal from a
Contract prior to the Annuity Date will be treated as taxable income to the
extent the amounts held under the Contract exceed the "investment in the
Contract," as that term is defined in the Code. The "investment in the
Contract" can generally be described as the cost of the Contract, and
generally constitutes all Purchase Payments paid for the Contract less any
amounts received under the Contract that are excluded from the individual's
gross income. The taxable portion is taxed at ordinary income tax rates. For
purposes of this rule, a pledge or assignment of a Contract is treated as a
payment received on account of a partial withdrawal of a Contract.
Upon receipt of a full or partial withdrawal or an Annuity Payment under the
Contract, you will be taxed if the value of the Contract exceeds the
investment in the Contract. Ordinarily, the taxable portion of such payments
will be taxed at ordinary income tax rates.
For Fixed Annuity Payments, in general, the taxable portion of each payment is
determined by using a formula known as the "exclusion ratio," which
establishes the ratio that the investment in the Contract bears to the total
expected amount of Annuity Payments for the term of the Contract. That ratio
is then applied to each payment to determine the non-taxable portion of the
payment. The remaining portion of each payment is taxed at ordinary income tax
rates. For Variable Annuity Payments, in general, the taxable portion is
determined by a formula that establishes a specific dollar amount of each
payment that is not taxed. The dollar amount is determined by dividing the
investment in the Contract by the total number of expected periodic payments.
The remaining portion of each payment is taxed at ordinary income tax rates.
Once the excludible portion of Annuity Payments to date equals the investment
in the Contract, the balance of the Annuity Payments will be fully taxable.
Withholding of federal income taxes on all distributions may be required
unless the recipient elects not to have any amounts withheld and properly
notifies the Company of that election.
With respect to amounts withdrawn or distributed before the taxpayer reaches
age 59 1/2, a penalty tax is imposed equal to 10% of the taxable portion of
amounts withdrawn or distributed. However, the penalty tax will not apply to
withdrawals (i) made on or after the death of the Contract Owner or, where the
Contract Owner is not an individual, the death of the Annuitant, who is
defined as the individual the events in whose life are of primary importance
in
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affecting the timing and payment under the Contracts; (ii) attributable to the
taxpayer's becoming disabled within the meaning of Code Section 72(m)(7);
(iii) that are part of a series of substantially equal periodic payments made
at least annually for the life (or life expectancy) of the taxpayer, or joint
lives (or joint life expectancies) of the taxpayer and his or her beneficiary;
(iv) from a qualified plan (note, however, other penalties may apply); (v)
under a qualified funding asset (as defined in Code Section 130(d)); (vi)
under an immediate annuity contract as defined in Section 72(u)(4); or (vii)
that are purchased by an employer on termination of certain types of qualified
plans and that are held by the employer until the employee separates from
service. Other tax penalties may apply to certain distributions as well as to
certain contributions and other transactions under Qualified Contracts.
If the penalty tax does not apply to a withdrawal as a result of the
application of item (iii) above, and the series of payments are subsequently
modified (other than by reason of death or disability), the tax for the year
in which the modification occurs will be increased by an amount (as determined
under Treasury Regulations) equal to the tax that would have been imposed but
for item (iii) above, plus interest for the deferral period. The foregoing
rule applies if the modification takes place (a) before the close of the
period that is five years from the date of the first payment and after the
taxpayer attains age 59 1/2, or (b) before the taxpayer reaches age 59 1/2.
THE COMPANY'S TAX STATUS
The Company is taxed as a life insurance company under Part I of Subchapter L
of the Code. Since the Separate Account is not a separate entity from the
Company and its operations form a part of the Company, it will not be taxed
separately as a "regulated investment company" under Subchapter M of the Code.
Investment income and realized capital gains on the assets of the Separate
Account are reinvested and taken into account in determining the Accumulated
Value. Under existing federal income tax law, the Separate Account's
investment income, including realized net capital gains, is not taxed to the
Company. The Company reserves the right to make a deduction for taxes should
they be imposed with respect to such items in the future.
DISTRIBUTION-AT-DEATH RULES
In order to be treated as an annuity contract, a Contract must generally
provide the following two distribution rules: (a) if any Contract Owner dies
on or after the Annuity Date and before the entire interest in the Contract
has been distributed, the remaining portion of such interest must be
distributed at least as quickly as the method in effect on the Contract
Owner's death; and (b) if any Contract Owner dies before the Annuity Date, the
entire interest must generally be distributed within five years after the date
of death. To the extent such interest is payable to the Owner's Designated
Beneficiary, however, such interests may be annuitized over the life of that
Owner's Designated Beneficiary or over a period not extending beyond the life
expectancy of that Owner's Designated Beneficiary, so long as distributions
commence within one year after the Contract Owner's death. If the Owner's
Designated Beneficiary is the spouse of the Contract Owner, the Contract
(together with the deferral on tax on the accrued and future income
thereunder) may be continued unchanged in the name of the spouse as Contract
Owner. The term Owner's Designated Beneficiary means the natural person named
by the Contract Owner as a beneficiary and to whom ownership of the Contract
passes by reason of the Contract Owner's death (unless the Contract Owner was
also the Annuitant--in which case the Annuitant's Beneficiary is entitled to
the Death Benefit).
If the Contract Owner is not an individual, the "primary Annuitant" (as
defined under the Code) is considered the Contract Owner. The primary
Annuitant is the individual who is of primary importance in affecting the
timing or the amount of payout under a Contract. In addition, when the
Contract Owner is not an individual, a change in the primary Annuitant is
treated as the death of the Contract Owner. Finally, in the case of joint
Contract Owners, the distribution will be required at the death of the first
of the Contract Owners.
TRANSFERS OF ANNUITY CONTRACTS
Any transfer of a Non-Qualified Contract prior to the Annuity Date for less
than full and adequate consideration will generally trigger tax on the gain in
the Contract to the Contract Owner at the time of such transfer. The
investment in the Contract of the transferee will be increased by any amount
included in the Contract Owner's income. This provision, however, does not
apply to those transfers between spouses or incident to a divorce which are
governed by Code Section 1041(a).
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CONTRACTS OWNED BY NON-NATURAL PERSONS
Where the Contract is held by a non-natural person (for example, a
corporation), the Contract is generally not treated as an annuity contract for
federal income tax purposes, and the income on that Contract (generally the
increase in the net Accumulated Value less the payments) is includible in
taxable income each year. The rule does not apply where the non-natural person
is only a nominal owner such as a trust or other entity acting as an agent for
a natural person. If an employer is the nominal owner of a Contract, and the
beneficial owners are employees, then the Contract is not treated as being
held by a non-natural person. The rule also does not apply where the Contract
is acquired by the estate of a decedent, where the Contract is a qualified
funding asset for structured settlements, where the Contract is purchased on
behalf of an employee upon termination of a qualified plan, and in the case of
an immediate annuity.
ASSIGNMENTS
A transfer of ownership of a Contract, a collateral assignment or the
designation of an Annuitant or other beneficiary who is not also the Contract
Owner may result in tax consequences to the Contract Owner, Annuitant or
beneficiary that are not discussed herein. A Contract Owner contemplating such
a transfer or assignment of a Contract should contact a tax adviser with
respect to the potential tax effects of such a transaction.
MULTIPLE CONTRACTS RULE
All non-qualified annuity contracts issued by the same company (or affiliate)
to the same Contract Owner during any calendar year are to be aggregated and
treated as one contract for purposes of determining the amount includible in
the taxpayer's gross income. Thus, any amount received under any Contract
prior to the Contract's Annuity Date, such as a partial withdrawal, will be
taxable (and possibly subject to the 10% federal penalty tax) to the extent of
the combined income in all such contracts. The Treasury Department has
specific authority to issue regulations that prevent the avoidance of Code
Section 72(e) through the serial purchase of annuity contracts or otherwise.
In addition, there may be other situations in which the Treasury Department
may conclude that it would be appropriate to aggregate two or more Contracts
purchased by the same Contract Owner. Accordingly, a Contract Owner should
consult a tax adviser before purchasing more than one Contract or other
annuity contracts.
DIVERSIFICATION STANDARDS
To comply with certain diversification regulations (the "Regulations") under
Code Section 817(h), one year after the start up period, the Separate Account
will be required to diversify its investments. The Regulations generally
require that on the last day of each quarter of a calendar year, no more than
55% of the value of the Separate Account is represented by any one investment,
no more than 70% is represented by any two investments, no more than 80% is
represented by any three investments, and no more than 90% is represented by
any four investments. A "look-through" rule applies that suggests that each
Subaccount of the Separate Account will be tested for compliance with the
percentage limitations by looking through to the assets of the Portfolios in
which each such Subaccount invests. The Company believes that under this rule,
the Separate Account must be tested for compliance with the percentage
limitations by "looking through" both the shares in Portfolios that are held
by the Separate Account and the shares in the Underlying Funds that are held
by the Portfolios to the investment assets held by the Underlying Funds. All
securities of the same issuer are treated as a single investment. Each
government agency or instrumentality will be treated as a separate issuer for
purposes of those limitations.
In connection with the issuance of temporary diversification regulations in
1986, the Treasury Department announced that such regulations did not provide
guidance concerning the extent to which Contract Owners may direct their
investments to particular divisions of a separate account. It is possible that
regulations or revenue rulings may be issued in this area at some time in the
future. It is not clear, at this time, what these regulations or rulings would
provide. It is possible that when the regulations or ruling are issued, the
Contracts may need to be modified in order to remain in compliance. For these
reasons, the Company reserves the right to modify the Contracts, as necessary,
to prevent the Contract Owner from being considered the owner of assets of the
Separate Account.
We intend to comply with the Regulations to assure that the Contracts continue
to be treated as annuity contracts for federal income tax purposes.
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GENERAL INFORMATION
ADDITIONS, DELETIONS, OR SUBSTITUTIONS OF INVESTMENTS
The Company retains the right, subject to any applicable law, to make certain
changes. The Company reserves the right to eliminate the shares of any of the
Portfolios and to substitute shares of another Portfolio, or of another
registered, open-end management investment company, if the shares of the
Portfolios are no longer available for investment, or, if in the Company'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 a Contract Owner's interest in a
Portfolio will not be made until SEC approval has been obtained and the
Contract Owner has been notified of the change.
New portfolios may be established at the discretion of the Company. Any new
portfolios will be made available to existing Contract Owners on a basis to be
determined by the Company. The Company may also eliminate one or more
Portfolios if marketing, tax, investment or other conditions so warrant.
In the event of any such substitution or change, the Company 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 operated as a management company
under the 1940 Act or any other form permitted by law, may be deregistered
under the 1940 Act in the event such registration is no longer required, or
may be combined with one or more other separate accounts.
VOTING RIGHTS
The Trust does not hold regular meetings of shareholders. The Trustees of the
Trust may call special meetings of shareholders as may be required by the 1940
Act or other applicable law. To the extent required by law, the Portfolio
shares held in the Separate Account will be voted by the Company at
shareholder meetings of the Trust in accordance with instructions received
from persons having voting interests in the corresponding Portfolio. Trust
shares as to which no timely instructions are received or shares held by the
Company as to which Contract Owners have no beneficial interest will be voted
in proportion to the voting instructions that are received with respect to all
Contracts participating in that Portfolio. Voting instructions to abstain on
any item to be voted upon will be applied on a pro rata basis to reduce the
votes eligible to be cast.
The number of votes that are available to a Contract Owner will be calculated
separately for each Portfolio. That number will be determined by applying his
or her percentage interest, if any, in a particular Portfolio to the total
number of votes attributable to the Portfolio.
Prior to the Annuity Date, a Contract Owner holds a voting interest in each
Portfolio to which the Accumulated Value is allocated. The number of votes
which are available to a Contract Owner will be determined by dividing the
Accumulated Value attributable to a Portfolio by the net asset value per share
of the applicable Portfolio. After the Annuity Date, the person receiving
Annuity Payments has the voting interest. The number of votes after the
Annuity Date will be determined by dividing the reserve for such Contract
allocated to the Portfolio by the net asset value per share of the
corresponding Portfolio. After the Annuity Date, the votes attributable to a
Contract decrease as the reserves allocated to the Portfolio decrease. In
determining the number of votes, fractional shares will be recognized.
The number of votes of the Portfolio that are available will be determined as
of the date coincident with the date established by that Portfolio for
determining shareholders eligible to vote at the meeting of the corresponding
Portfolio. Voting instructions will be solicited by written communication
prior to such meeting in accordance with procedures established by the Trust.
AUDITORS
Ernst & Young LLP serves as independent auditors for the Separate Account and
the Company and will audit their financial statements annually.
LEGAL MATTERS
Jorden Burt Berenson & Johnson LLP of Washington, D.C. has provided legal
advice relating to the federal securities laws applicable to the issue and
sale of the Contracts. All matters of Missouri law pertaining to the validity
of the Contract and the Company's right to issue such Contracts have been
passed upon by Kimberly A. Scouller, Esquire, on behalf of the Company.
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TABLE OF CONTENTS FOR THE PGA RETIREMENT ANNUITY
VARIABLE ANNUITY
STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
PAGE
<S> <C>
THE CONTRACT.............................................................. 1
Computation of Variable Annuity Income Payments......................... 1
Exchanges............................................................... 2
Exceptions to Charges and to Transaction or Balance Requirements........ 2
GENERAL MATTERS........................................................... 3
Non-Participating....................................................... 3
Misstatement of Age or Sex.............................................. 3
Assignment.............................................................. 3
Annuity Data............................................................ 3
Annual Statement........................................................ 3
Incontestability........................................................ 4
Ownership............................................................... 4
PERFORMANCE INFORMATION................................................... 4
30-Day Yield for Subaccounts............................................ 4
Standardized Average Annual Total Return for Subaccounts................ 5
ADDITIONAL PERFORMANCE MEASURES........................................... 6
Non-Standardized Actual Total Return and Non-Standardized Actual Average
Annual Total Return..................................................... 6
Non-Standardized Total Return Year-to-Date.............................. 6
Non-Standardized One Year Return........................................ 6
PERFORMANCE COMPARISONS................................................... 7
SAFEKEEPING OF ACCOUNT ASSETS............................................. 10
THE COMPANY............................................................... 10
STATE REGULATION.......................................................... 10
RECORDS AND REPORTS....................................................... 10
DISTRIBUTION OF THE CONTRACTS............................................. 11
LEGAL PROCEEDINGS......................................................... 11
OTHER INFORMATION......................................................... 11
FINANCIAL STATEMENTS...................................................... 11
</TABLE>
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PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENT OF ADDITIONAL INFORMATION
FOR THE PGA RETIREMENT 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 PGA Retirement Annuity contract (the "Contract")
offered by Providian Life and Health Insurance Company (the "Company"). You may
obtain a copy of the Prospectus dated January 29, 1997, 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.
January 29, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
THE CONTRACT
Computation of Variable Annuity Income Payments 1
Exchanges 1
Exceptions to Charges and to Transaction or Balance Requirements 2
GENERAL MATTERS 2
Non-Participating 3
Misstatement of Age or Sex 3
Assignment 3
Annuity Data 3
Annual Statement 3
Incontestability 3
Ownership 4
PERFORMANCE INFORMATION 4
30-Day Yield for Subaccounts 4
Standardized Average Annual Total Return for Subaccounts 4
ADDITIONAL PERFORMANCE MEASURES 5
Non-Standardized Actual Total Return and Non-Standardized Actual Average 6
Annual Total Return 6
Non-Standardized Total Return Year-to-Date 6
Non-Standardized One Year Return 6
PERFORMANCE COMPARISONS 7
SAFEKEEPING OF ACCOUNT ASSETS 10
THE COMPANY 10
STATE REGULATION 10
RECORDS AND REPORTS 10
DISTRIBUTION OF THE CONTRACT 11
LEGAL PROCEEDINGS 11
OTHER INFORMATION 11
FINANCIAL STATEMENTS 11
<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; and
(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 assessed at an annual rate of .55% for the mortality
and expense risks assumed by the Company; and
<PAGE>
(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
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 another Subaccount
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. This 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. A $15 fee is currently imposed 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 AND TO TRANSACTION OR BALANCE REQUIREMENTS
The Company may reduce 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 sale of
Contracts. The Company may reduce 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 their affiliates and certain sales representatives for the
Contract. The Company also may also grant waivers or modifications of certain
minimum or maximum purchase or transaction amounts or balance requirements in
these circumstances.
Notwithstanding the above, any variations in administrative charges or other
deductions from Purchase Payments or in the minimum or maximum transaction or
balance requirements shall reflect differences in costs or services and shall
not be unfairly discriminatory against any person.
2
<PAGE>
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 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 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.
3
<PAGE>
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 the total
return of all Subaccounts, may appear in reports or promotional literature to
current or prospective Contract Owners.
Where applicable in calculating performance information, the Annual Contract Fee
is reflected as a percentage equal to the total amount of fees collected during
a calendar year divided by the total average net assets of the Portfolios during
the same calendar year. The fee is assumed to remain the same in each year of
the applicable period. (With respect to partial year periods, if any, in the
examples, the Annual Contract Fee is pro-rated to reflect only the applicable
portion of the partial year period.)
30-DAY YIELD FOR SUBACCOUNTS
Quotations of yield for the 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:
a - b
YIELD = 2[(----- + 1)/6/ - 1]
cd
4
<PAGE>
Where:
[a] = the net investment income earned during the period by the Portfolio
attributable to shares owned by a Subaccount;
[b] = the expenses accrued for the period (net of reimbursement);
[c] = the average daily number of Units outstanding during the period;
and
[d] = the maximum offering price per Accumulation Unit on the last day of
the period.
Yield on the 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 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 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:
P(1 + T)/n/ = ERV
Where:
[P] = a hypothetical initial Purchase Payment of $1,000;
[T] = an average annual total return;
[n] = the number of years; and
5
<PAGE>
[ERV] = the ending redeemable value of a hypothetical $1,000 Purchase
Payment made at the beginning of the period (or fractional
portion thereof).
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 or Premium Taxes (if any), which if included would reduce the
percentages reported by the Company.
NON-STANDARDIZED TOTAL RETURN YEAR-TO-DATE
The Company may show Non-Standardized Total Return Year-to-Date as of a
particular date, or simply Total Return YTD, for one or more Subaccounts with
respect to one or more non-standardized base periods commencing at the beginning
of a calendar year. Total Return YTD figures reflect the percentage change in
actual Accumulation Unit Values during the relevant period. These percentages
reflect a deduction for the Separate Account and Portfolio expenses, but do not
include the Annual Contract Fee or Premium Taxes (if any), which if included
would reduce the percentages reported by the Company.
NON-STANDARDIZED ONE YEAR RETURN
The Company may show Non-Standardized One Year Return, for one or more
Subaccounts with respect to one or more non-standardized base periods commencing
at the beginning of a calendar year (or date of inception, if during the
relevant year) and ending at the end of such calendar year. One Year Return
figures reflect the percentage change in actual Accumulation Unit Values during
the relevant period. These percentages reflect a deduction for the Separate
Account and Portfolio expenses, but do not include the Annual Contract Fee or
Premium Taxes (if any), which if included would reduce the percentages reported
by the Company.
6
<PAGE>
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:
7
<PAGE>
. DOW JONES INDUSTRIAL AVERAGE ("DJIA"), an unmanaged index representing
share prices of major industrial corporations, public utilities, and
transportation companies. Produced by 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.
8
<PAGE>
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.
. 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
comparisons. 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.
9
<PAGE>
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
Providian Corporation owns a 4% interest in the Company and 61%, 15% and 20%
interests, respectively, are held by Commonwealth Life Insurance Company,
Peoples Security Life Insurance Company and Capital Liberty, L.P. Commonwealth
Life Insurance Company and Peoples Security Life Insurance Company are each
wholly-owned by Providian Corporation. A 5% interest in Capital Liberty, L.P. is
owned by Providian Corporation, which is the general partner, and 76% and 19%
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.
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.
10
<PAGE>
DISTRIBUTION OF THE CONTRACTS
Providian Securities Corporation ("PSC"), the principal underwriter of the
Contracts, is ultimately 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.
The Contracts are offered to members and employees of the Professional Golfers
Association of America and to certain key employees of golf courses through
persons or entities licensed under the federal securities laws and state
insurance laws that have generally 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 Subaccounts described in the Contract Prospectus have not yet commenced
operations, and consequently have no assets or liabilities. Accordingly, no
financial statements are included for the Separate Account in this Statement of
Additional Information. The audited statutory-basis financial statements of the
Company for the years ended December 31, 1995 and 1994 respectively, including
the Reports of Independent Auditors thereon, which are included in this
Statement of Additional Information, should be considered only as bearing on the
ability of the Company to meet its obligations under the Contracts. They should
not be considered as bearing on the investment performance of the assets to be
held in the Separate Account. In addition, the unaudited statutory-basis
financial statements of the Company for the period ended September 30, 1996
have been included.
11
<PAGE>
Statutory-Basis Financial Statements
Providian Life and Health Insurance Company
Years ended December 31, 1995 and 1994
with Report of Independent Auditors
<PAGE>
Providian Life and Health Insurance Company
Statutory-Basis Financial Statements
Years ended December 31, 1995 and 1994
Contents
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors.................................. 1
Audited Financial Statements
Balance Sheets (Statutory-Basis)................................ 3
Statements of Operations (Statutory-Basis)...................... 4
Statements of Changes in Capital and Surplus (Statutory-Basis).. 5
Statements of Cash Flows (Statutory-Basis)...................... 6
Notes to Financial Statements................................... 7
</TABLE>
<PAGE>
Report of Independent Auditors
Board of Directors
Providian Life and Health Insurance Company
We have audited the accompanying statutory-basis balance sheets of Providian
Life and Health Insurance Company (formerly National Home Life Assurance
Company) as of December 31, 1995 and 1994, and the related statutory-basis
statements of operations, changes in capital and surplus, and cash flows for
each of the three years in the period 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 audits.
We conducted our audits of the accompanying statutory-basis financial statements
in accordance with generally accepted auditing standards; however, as discussed
in the following paragraph, we were not engaged to determine or audit the
effects of the variances between statutory accounting practices and generally
accepted accounting principles. Generally accepted auditing 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 on the accompanying statutory-
basis financial statements.
The Company presents its financial statements in conformity with accounting
practices prescribed or permitted by the Missouri Department of Insurance. When
statutory-basis financial statements are presented for purposes other than for
filing with a regulatory agency, generally accepted auditing standards require
that the auditors' report on such statements indicate whether they are presented
in conformity with generally accepted accounting principles. The accounting
practices used by the Company vary from generally accepted accounting principles
as explained in Note 1, and the Company has not determined the effects of those
variances. Accordingly, we were not engaged to audit, and we did not audit, the
effects of those variances. Since the accompanying financial statements do not
purport to be a presentation in conformity with generally accepted accounting
principles, we are not in a position to express, and we do not express, an
opinion on the financial statements referred to above as to fair presentation of
financial
1
<PAGE>
position, results of operations, or cash flows in conformity with generally
accepted accounting principles.
In our opinion, the statutory-basis financial statements referred to above
present fairly, in all material respects, the financial position of Providian
Life and Health Insurance Company at December 31, 1995 and 1994, and the results
of its operations and its cash flows for each of the three years in the period
ended December 31, 1995, in conformity with accounting practices prescribed or
permitted by the Missouri Department of Insurance.
/s/ Ernst & Young LLP
Louisville, Kentucky
April 23, 1996
2
<PAGE>
Providian Life and Health Insurance Company
Balance Sheets (Statutory-Basis)
<TABLE>
<CAPTION>
DECEMBER 31
1995 1994
------------------------
ADMITTED ASSETS (In Thousands)
<S> <C> <C>
Cash and invested assets:
Bonds $ 4,410,245 $4,307,195
Preferred stocks 27,719 72,508
Common stocks 408,298 297,906
Mortgage loans 2,756,891 2,013,375
Real estate 25,065 27,152
Policy loans 158,774 151,132
Cash and short-term investments 205,266 113,531
Other invested assets 125,052 127,620
------------------------
Total cash and invested assets 8,117,310 7,110,419
Deferred and uncollected premiums 45,849 43,340
Accrued investment income 99,001 93,066
Other receivables 50,942 154,174
Federal income taxes recoverable from parent 3,725 17,459
Other admitted assets 4,581 4,054
Separate account assets 1,741,564 1,114,835
------------------------
Total admitted assets $10,062,972 $8,537,347
========================
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
Aggregate policy reserves $ 5,608,366 $4,908,607
Policy and contract claims 37,947 35,302
Policyholder contract deposits 1,519,204 1,494,308
Other policy or contract liabilities 318,911 300,304
Amounts due to affiliates 18,882 18,665
Asset valuation reserve 89,486 47,482
Interest maintenance reserve - 15,868
Accrued expenses and other liabilities 152,118 71,764
Separate account liabilities 1,741,564 1,114,835
------------------------
Total liabilities 9,486,478 8,007,135
Capital and surplus:
Common stock, $11 par value, 1,145,000 and 230,000 shares
authorized, issued and outstanding in 1995 and 1994,
respectively 12,595 2,530
Preferred stock, $11 par value, 2,290,000 shares
authorized, issued and outstanding in 1995 25,190 -
Paid-in surplus 2,583 41,838
Unassigned surplus 536,126 485,844
------------------------
Total capital and surplus 576,494 530,212
------------------------
Total liabilities and capital and surplus $10,062,972 $8,537,347
========================
</TABLE>
See accompanying notes.
3
<PAGE>
Providian Life and Health Insurance Company
Statements of Operations (Statutory--Basis)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
------------------------------------
(In Thousands)
<S> <C> <C> <C>
Revenues:
Premiums earned:
Life and annuity $ 264,020 $ 181,143 $ 258,471
Accident and health 159,550 162,742 173,168
Annuity fund deposits 803,537 1,223,232 1,073,837
Net investment income 570,009 472,691 451,417
Commissions and expense allowances
on reinsurance ceded 7,164 16,186 17,230
Amortization of interest maintenance reserve 4,798 7,476 3,006
Other income 455 10 103
------------------------------------
1,809,533 2,063,480 1,977,232
Benefits and expenses:
Accident and health, life and other benefits 1,323,996 986,601 1,033,991
(Decrease) increase in aggregate policy reserves (142,665) 613,678 328,584
Commissions and expense allowances
on reinsurance assumed 66,988 54,690 61,658
General insurance and other expenses 140,495 120,830 139,103
Reinsurance recapture fee 66,672 - -
Net transfers to separate accounts 316,222 162,973 314,382
------------------------------------
1,771,708 1,938,772 1,877,718
Net gain from operations before federal
income taxes 37,825 124,708 99,514
Federal income tax expense 18,222 50,351 46,866
------------------------------------
Net gain from operations 19,603 74,357 52,648
Net realized capital losses, net of income taxes
(1995--($14,998); 1994--($7,311); 1993--
$25,997) and excluding gains (losses)
transferred to the interest maintenance reserve
(1995--($21,644); 1994--($6,786); 1993--
$28,652) (609) (15,867) (2,547)
------------------------------------
Net income $ 18,994 $ 58,490 $ 50,101
=====================================
</TABLE>
See accompanying notes.
4
<PAGE>
Providian Life and Health Insurance Company
Statements of Changes in Capital and Surplus (Statutory--Basis)
<TABLE>
<CAPTION>
COMMON PREFERRED PAID-IN UNASSIGNED
STOCK STOCK SURPLUS SURPLUS
--------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Balances, January 1, 1993 $ 2,530 $ - $ 41,838 $359,543
Net income - - - 50,101
Change in net unrealized gains
on investments - - - 838
Decrease in nonadmitted assets - - - 1,643
Change in reserves due to
change in valuation basis - - - 6,582
Increase in asset valuation
reserve - - - (6,330)
Prior year federal income tax
adjustment - - - (3,448)
--------------------------------------------
Balances, December 31, 1993 2,530 - 41,838 408,929
Net income - - - 58,490
Change in net unrealized gains
on investments - - - 24,538
Increase in nonadmitted assets - - - (3,283)
Increase in asset valuation
reserve - - - (2,830)
--------------------------------------------
Balances, December 31, 1994 2,530 - 41,838 485,844
Purchase and retirement of
common stock (11) - (3,989) -
Stock split/dividend 10,076 25,190 (35,266) -
Net income - - - 18,994
Change in net unrealized gains
on investments - - - 96,430
Change in reserves due to
change in valuation basis - - - (802)
Prior year federal income tax
adjustment - - - (5,092)
Increase in nonadmitted assets - - - (17,244)
Increase in asset valuation
reserve - - - (42,004)
--------------------------------------------
Balances, December 31, 1995 $12,595 $25,190 $ 2,583 $536,126
============================================
</TABLE>
See accompanying notes.
5
<PAGE>
Providian Life and Health Insurance Company
Statements of Cash Flows (Statutory--Basis)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
-------------------------------------
<S> <C> <C> <C>
(In Thousands)
Cash and short-term investments provided
Operations:
Premiums and annuity fund deposits $1,224,560 $1,574,914 $1,499,353
Net investment income received 564,587 481,560 440,139
Allowances and reserve adjustments received on
reinsurance ceded 7,195 16,168 17,337
Other income received 455 - -
-------------------------------------
1,796,797 2,072,642 1,956,829
Benefits paid 1,320,679 991,357 1,044,195
General insurance and other expenses 197,177 171,197 196,101
Federal income taxes (recovered) paid (10,510) 64,311 28,719
Net increase in policy loans and premium notes 7,283 4,298 11,752
Paid reinsurance reserves and other items 1,305 39 997
Net transfer to separate accounts 327,365 147,516 308,635
-------------------------------------
1,843,299 1,378,718 1,590,399
-------------------------------------
Total cash (applied) provided by operations (46,502) 693,924 366,430
Investments sold, matured or repaid 3,662,934 2,096,056 7,767,911
Other cash provided:
Increase in amounts due to affiliates - 4,402 -
Net increase in broker receivables/payables 114,177 - -
Accounts receivable - other invested assets 83,606 - -
Cash received in reinsurance recapture transaction 30,095 - -
Net cash and short-term investments received from
reinsurance assumed 303,376 - -
Other items 7,764 15,530 50,655
-------------------------------------
Total other cash provided 539,018 19,932 50,655
-------------------------------------
Total cash and short-term investments provided 4,155,450 2,809,912 8,184,996
Cash and short-term investments applied:
Investments acquired 4,029,433 2,533,051 8,244,557
Other cash applied:
Decrease in amounts due to affiliates 15,506 - 23,314
Net decrease in broker receivables/payables - 101,703 -
Accounts receivable - other invested assets - 83,606 -
Redemption of common stock 4,000 - -
Other items 14,776 16,282 38,001
-------------------------------------
Total other cash applied 34,282 201,591 61,315
-------------------------------------
Total cash and short-term investments applied 4,063,715 2,734,642 8,305,872
-------------------------------------
Increase (decrease) in cash and short-term investments 91,735 75,270 (120,876)
Cash and short-term investments:
Beginning of year 113,531 38,261 159,137
-------------------------------------
End of year $ 205,266 $ 113,531 $ 38,261
=====================================
</TABLE>
See accompanying notes.
6
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements
December 31, 1995
1. ORGANIZATION, NATURE OF OPERATIONS AND ACCOUNTING POLICIES
ORGANIZATION
Providian Life and Health Insurance Company (PLH), formerly National Home Life
Assurance Company, is a life and health insurance company domiciled in Missouri.
Prior to the transaction discussed in the following paragraph, PLH was wholly
owned by a limited partnership, Capital Liberty Limited Partnership (CLLP),
consisting of Providian Corporation (PVN) and two of its wholly owned insurance
subsidiaries, Peoples Security Life Insurance Company (PSI) and Commonwealth
Life Insurance Company (CLICO). PLH wholly owns an insurance subsidiary,
Veterans Life Insurance Company (VLIC), which wholly owns an insurance
subsidiary, First Providian Life and Health Insurance Company (FPLH), formerly
National Home Life Assurance Company of New York, and a non-insurance
subsidiary. On December 20, 1995, PLH executed a stock split/dividend whereby
four additional shares of common and ten shares of preferred stock (a total of
916,000 common and 2,290,000 preferred shares) were issued for each existing
share of common stock. CLLP retained the newly issued preferred stock and the
previously held common shares, now representing a 20% interest in PLH, and
distributed the additional common shares to its partners as follows: 174,705
shares (15.2%) to PSI, 698,820 shares (60.7%) to CLICO, and 42,475 shares (4.1%)
to PVN.
NATURE OF OPERATIONS
PLH sells and services life and accident and health insurance products,
primarily utilizing direct response methods, such as television, telephone, mail
and third-party programs to reach low to middle income households nationwide.
PLH also sells and services group and individual accumulation products,
primarily utilizing brokers, fund managers, financial planners, and stock
brokerage firms.
MANAGEMENT'S ESTIMATES
The preparation of financial statements requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Significant estimates are utilized in the calculation of
benefit reserves and the allowance for uncollectible mortgage loans. It is
reasonably possible that these estimates may change in the near term, thereby
possibly having a material effect on the financial statements.
7
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
1. ORGANIZATION, NATURE OF OPERATIONS AND ACCOUNTING POLICIES (CONTINUED)
BASIS OF PRESENTATION
The accompanying financial statements of PLH have been prepared in accordance
with the accounting practices prescribed or permitted by the Missouri Department
of Insurance. Such practices vary from generally accepted accounting principles
(GAAP). The more significant variances from GAAP are as follows:
INVESTMENTS
Investments in bonds and mandatorily redeemable preferred stocks are reported
at amortized cost or fair value based on their National Association of
Insurance Commissioners (NAIC) rating; for GAAP, such fixed maturity
investments are designated at purchase as held-to-maturity, trading or
available-for-sale. Held-to-maturity fixed investments are reported at
amortized cost, and the remaining fixed maturity investments are reported at
fair value with unrealized holding gains and losses reported in operations
for those designated as trading and as a separate component of shareholders'
equity for those designated as available-for-sale.
Fair values of investments in bonds and stocks are generally based on values
specified by the Securities Valuation Office (SVO) of the NAIC, rather than
on values provided by outside broker confirmations or internally calculated
estimates. However, for certain investments, the NAIC does not provide a
value and PLH uses either admitted asset investment amounts (i.e., statement
values) as allowed by the NAIC, fair values provided by outside broker
confirmations or internally calculated estimates. Investments in real estate
are reported net of related obligations rather than on a gross basis. Real
estate owned and occupied by PLH is included in investments rather than
reported as an operating asset, and investment income and operating expense
include amounts representing rent for PLH's occupancy of such real estate.
Changes between cost and admitted asset investment amounts are credited and
charged directly to unassigned surplus rather than to a separate surplus
account.
Valuation allowances are established for mortgage loans based on the
difference between the unpaid loan balance and the estimated fair value of
the underlying real estate when such loans are determined to be in default as
to scheduled payments. Under GAAP, valuation allowances would be established
when PLH determines it is probable that it will be unable to collect all
amounts due (both principal and interest) according to the contractual terms
of the loan agreement. Such allowances are generally based on the estimated
fair value of the underlying real estate (collateral).
8
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
1. ORGANIZATION, NATURE OF OPERATIONS AND ACCOUNTING POLICIES (CONTINUED)
The initial valuation allowance and subsequent changes in the allowance for
mortgage loans are charged or credited directly to unassigned surplus, rather
than being included as a component of earnings as would be required under
GAAP.
Under a formula prescribed by the NAIC, PLH defers the portion of realized
capital gains and losses attributable to changes in the general level of
interest rates on sales of certain liabilities and fixed income investments,
principally bonds and mortgage loans, and amortizes such deferrals into
income on a straight-line basis over the remaining period to maturity based
on groupings of individual liabilities or investments sold. The net
accumulated unamortized balance of such deferrals is reported as an "interest
maintenance reserve" (IMR) in the accompanying balance sheet. Realized gains
and losses are reported in income net of tax and transfers to the IMR. The
"asset valuation reserve" (AVR) is also determined by a NAIC prescribed
formula and is reported as a liability rather than a valuation allowance. The
AVR represents a provision for possible fluctuations in the value of bonds,
equity securities, mortgage loans, real estate and other invested assets.
Changes to the AVR are charged or credited directly to unassigned surplus.
Under GAAP, realized gains and losses are reported in the income statement on
a pretax basis in the period that the asset giving rise to the gain or loss
is sold and direct write-downs are recorded (or valuation allowances are
provided, where appropriate under GAAP) when there has been a decline in
value deemed to be other than temporary, in which case, write-downs (or
provisions) for such declines are charged to income.
SUBSIDIARIES
The accounts and operations of PLH's subsidiaries are not consolidated with
the accounts and operations of PLH as would be required under GAAP.
POLICY ACQUISITION COSTS
Costs of acquiring and renewing business are expensed when incurred. Under
GAAP, acquisition costs related to traditional life insurance, to the extent
recoverable from future policy revenues, are deferred and amortized over the
premium-paying period of the related policies using assumptions consistent
with those used in computing policy benefit reserves. For universal life
insurance and investment-type contracts, to the extent recoverable from
future gross profits, deferred policy acquisition costs are amortized
generally in proportion to the present value of expected gross profits from
surrender charges and investment, mortality and expense margins.
9
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
1. ORGANIZATION, NATURE OF OPERATIONS AND ACCOUNTING POLICIES (CONTINUED)
NONADMITTED ASSETS
Certain assets designated as "nonadmitted," principally agents' debit
balances and furniture and equipment, are excluded from the balance sheets
and are charged directly to unassigned surplus.
PREMIUMS
Revenues for universal life policies and investment-type contracts consist of
the entire premium received and benefits represent the death benefits paid
and the change in policy reserves. Under GAAP, premiums received in excess of
policy charges are not recognized as premium revenue and benefits represent
the excess of benefits paid over the policy account value and interest
credited to the account values.
BENEFIT RESERVES
Certain policy reserves are calculated using prescribed interest and
mortality assumptions rather than on expected experience and actual account
balances as is required under GAAP.
INCOME TAXES
Deferred income taxes are not provided for differences between the financial
statement and the tax bases of assets and liabilities.
The effects of the foregoing variances from GAAP on the accompanying statutory-
basis financial statements have not been determined.
Other significant accounting policies followed in preparing the accompanying
statutory-basis financial statements are as follows:
INVESTMENTS
Bonds, preferred stocks, common stocks, mortgage loans, real estate, short-
term investments and derivative financial instruments are stated at values
prescribed by the NAIC, as follows:
Bonds not backed by other loans are stated at amortized cost using the
interest method.
10
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
1. ORGANIZATION, NATURE OF OPERATIONS AND ACCOUNTING POLICIES (CONTINUED)
Loan-backed bonds and structured securities are valued at amortized cost
using the interest method. Anticipated prepayments are considered when
determining the amortization of related discounts or premiums. Prepayment
assumptions are obtained from dealer survey values or internal estimates
and are consistent with the current interest rate and economic
environment. The retrospective adjustment method is used to value such
securities.
Short-term investments include investments with maturities of less than
one year at the date of acquisition. Short-term investments and cash are
carried at cost.
Preferred stocks are carried at cost. In addition, certain bonds and
preferred stocks are carried at the lower of cost (or amortized cost) or
the NAIC designated fair value.
Common stocks are carried at the NAIC designated fair value, except that
investments in unconsolidated subsidiaries and affiliates in which PLH
has an interest of 20 percent or more are carried on the equity basis.
Derivative financial instruments, consisting primarily of interest rate
swap agreements, are valued in accordance with NAIC guidelines, which is
on a basis consistent with the asset or liability being hedged.
Mortgage loans in good standing and policy loans are carried at unpaid
principal balances while statutorily delinquent mortgages are carried at
their unpaid principal balance less the related valuation allowance.
Real estate is carried at the lower of cost (less depreciation for
occupied and investment real estate, generally calculated using the
straight-line method) or net realizable value, and is net of related
obligations, if any.
Bond and other loan interest is credited to income as it accrues. Dividends
on common and preferred stocks are credited to income on ex-dividend dates.
For securities, PLH follows the guidelines of the NAIC for each security on
an individual basis in determining the admitted or nonadmitted status of
accrued income amounts. For interest rate exchange agreements, interest is
credited to income as it accrues. For mortgage loans, PLH's policy is to
accrue investment income due for a maximum of three months from the last
payment date. At December 31, 1995 and 1994, the total amount excluded from
accrued investment income for delinquent mortgage loans was approximately
$314,000 and $4,172,000, respectively.
11
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
1. ORGANIZATION, NATURE OF OPERATIONS AND ACCOUNTING POLICIES (CONTINUED)
Net income includes realized gains and losses on investments sold, net of tax
and transfers to the IMR. The cost of investments sold is determined on a
first-in, first-out basis.
SEPARATE ACCOUNTS
Separate account assets and liabilities reported in the accompanying
financial statements represent funds that are separately administered,
principally for annuity contracts, and for which the contract holder, rather
than PLH, bears the investment risk. Separate account contract holders have
no claim against the assets of the general account of PLH. Separate account
assets are reported at fair value. The operations of the separate accounts
are not included in the accompanying financial statements. Fees charged on
separate account policyholder deposits are included in net transfers to
separate accounts in the accompanying statements of operations.
POLICY RESERVES
Unearned premiums represent the portion of premiums written which are
applicable to the unexpired terms of accident and health policies in force,
calculated principally by the application of monthly pro rata fractions.
Liabilities for unearned premiums are included in aggregate policy reserves.
PLH waives deduction of deferred fractional premiums upon death of insureds.
PLH's policy is not to return any portion of the final premium beyond the
date of death. Surrender values are not promised in excess of the legally
computed reserves. Additional premiums are charged for policies issued on
substandard lives according to underwriting classification. Mean reserves are
determined by computing the regular mean reserve for the plan at the issued
age and holding in addition one-half of the extra premium charged for the
year.
The tabular interest has been determined from the basic data for the
calculation of policy reserves. The tabular less actual reserve released and
the tabular cost have been determined by formula as described in the NAIC
instructions.
12
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
1. ORGANIZATION, NATURE OF OPERATIONS AND ACCOUNTING POLICIES (CONTINUED)
Policy reserves also include single premium and flexible premium annuity
contracts and structured settlement contracts. The single premium and
flexible premium contracts contain surrender charges for the first six to
seven years of the contract. These contract reserves are held at the contract
value that accrues to the policyholder. Structured settlement contracts
contain no surrender charge. Policy reserves on these contracts are
determined based on the expected future cash flows discounted at the
applicable statutorily defined mortality and interest rates. Annual effective
rates credited to these annuity contracts ranged from 4.0 percent to 8.0
percent during 1995.
POLICY AND CONTRACT CLAIMS
Policy and contract claims, principally related to accident and health
policies, include amounts determined on an individual case basis for reported
losses and estimates of incurred but not reported losses developed on the
basis of experience. These estimates are subject to the effects of trends in
claim severity and frequency. Although considerable variability is inherent
in such estimates, management believes that the reserves for claims and claim
expenses are adequate. The methods of making such estimates and establishing
the resulting reserves are continually reviewed and updated, and any
adjustments resulting therefrom are reflected in earnings currently.
POLICYHOLDER CONTRACT DEPOSITS
Policyholder contract deposits is comprised of guaranteed investment
contracts (GICs). The GICs consist of three types. One type is guaranteed as
to principal along with interest guarantees based upon predetermined indices.
The second type guarantees principal and interest, but also includes a
penalty if the contract is surrendered early. The third type guarantees
principal and interest and is non-surrenderable before the fixed maturity
date. Policy reserves on the GICs are determined following the retrospective
deposit method and consist of contract values that accrue to the benefit of
the policyholder. Annual effective rates credited to these GICs ranged from
5.5 percent to 7.8 percent during 1995.
PREMIUMS, BENEFITS AND EXPENSES
For individual and most group life policies, premiums are reported as earned
on the policy/certificate anniversary. For individual and group annuities,
premiums and
13
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
1. ORGANIZATION, NATURE OF OPERATIONS AND ACCOUNTING POLICIES (CONTINUED)
annuity fund deposits are recorded as earned when collected. For individual
and group accident and health policies, premiums are recorded as earned on a
pro rata basis over the coverage period for which the premiums were collected
or due. Benefit claims (including an estimated provision for claims incurred
but not reported), policy reserve changes and expenses are charged to income
as incurred.
REINSURANCE
Reinsurance premiums, benefits and expenses are accounted for in a manner
consistent with that used in accounting for original policies issued and the
terms of the reinsurance contracts. Premiums, benefits, expenses and the
reserves for policy and contract liabilities and unearned premiums are
recorded net of reinsured amounts.
GUARANTY FUND ASSESSMENTS
Periodically, PLH is assessed by various state guaranty funds as part of
those funds' activities to collect funds from solvent insurance companies to
cover certain losses to policyholders that resulted from the insolvency or
rehabilitation of other insurance companies. Each state guaranty fund
operates independently of any other state guaranty fund; as such, the methods
by which assessments are levied against PLH vary from state to state. Also,
some states permit guaranty fund assessments to be partially recovered
through reductions in future premium taxes. At December 31, 1995 and 1994,
PLH has established an estimated liability for guaranty fund assessments for
those insolvencies or rehabilitations that have actually occurred prior to
that date. The estimated liability is determined using preliminary
information received from the various state guaranty funds and the National
Organization of Life and Health Insurance Guaranty Associations. Because
there are many uncertainties regarding the ultimate assessments that will be
assessed against PLH, the ultimate assessments for those insolvencies or
rehabilitations that occurred prior to December 31, 1995 may vary from the
estimated liability included in the accompanying financial statements. The
estimated liability for guaranty fund assessments recorded at December 31,
1995 and 1994 was $11,571,000 and $11,139,000, respectively.
14
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
1. ORGANIZATION, NATURE OF OPERATIONS AND ACCOUNTING POLICIES (CONTINUED)
PERMITTED STATUTORY ACCOUNTING PRACTICES
PLH's statutory-basis financial statements are prepared in accordance with
accounting practices prescribed or permitted by the Missouri Department of
Insurance. "Prescribed" statutory accounting practices include state laws,
regulations, and general administrative rules, as well as a variety of
publications of the NAIC. "Permitted" statutory accounting practices
encompass all accounting practices that are not prescribed; such practices
may differ from state to state, may differ from company to company within a
state, and may change in the future. The NAIC currently is in the process of
recodifying statutory accounting practices, the result of which is expected
to constitute the only source of "prescribed" statutory accounting practices.
Accordingly, that project, which is expected to be completed in 1997, will
likely change, to some extent, prescribed statutory accounting practices, and
may result in changes to the accounting practices that PLH uses to prepare
its statutory-basis financial statements.
RECLASSIFICATIONS
Certain reclassifications have been made to the prior year financial statements
to conform with the current year presentation.
2. INVESTMENTS
The tables below contain amortized cost (carrying value or statement value) and
fair value information on bonds.
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
------------------------------------------------------
<S> <C> <C> <C> <C>
(In Thousands)
DECEMBER 31, 1995
U.S. government obligations $ 457,122 $ 9,764 $ 5 $ 466,881
States and political 37,957 1,399 280 39,076
subdivisions
Foreign government 71,821 4,024 34 75,811
obligations*
Corporate and other 2,828,447 93,238 11,053 2,910,632
Foreign corporate* 259,804 14,063 2,223 271,644
Mortgage-backed 755,094 - - 755,094
------------------------------------------------------
$4,410,245 $122,488 $13,595 $4,519,138
======================================================
</TABLE>
15
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
2. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
DECEMBER 31, 1994
U.S. government obligations $ 280,081 $ 272 $ 16,404 $ 263,949
States and political 60,708 260 4,398 56,570
subdivisions
Foreign government 66,401 120 4,951 61,570
obligations*
Corporate and other 2,754,441 15,388 188,532 2,581,297
Foreign corporate* 259,782 442 20,983 239,241
Mortgage-backed 885,782 3,275 47,803 841,254
----------------------------------------------------
$4,307,195 $19,757 $283,071 $4,043,881
====================================================
</TABLE>
* Substantially all are U.S. dollar denominated.
The amortized cost and fair value of bonds at December 31, 1995, by contractual
maturity, are shown below. Actual maturities may differ from contractual
maturities because certain borrowers may have the right to call or prepay
obligations, sometimes without call or prepayment penalties.
AMORTIZED FAIR
COST VALUE
--------------------------
(In Thousands)
Due in one year or less $ 31,763 $ 31,813
Due after one year through 767,315 772,576
five years
Due after five years through 1,103,712 1,115,424
ten years
Due after ten years 1,752,361 1,844,231
--------------------------
3,655,151 3,764,044
Mortgage-backed securities 755,094 755,094
--------------------------
$4,410,245 $4,519,138
==========================
Proceeds during 1995 and 1994 from sales, maturities and calls of bonds were
$2,842,536,000 and $1,674,690,000, respectively. Gross gains of $60,899,000 and
$28,226,000 and gross losses of $35,199,000 and $37,882,000, in 1995 and 1994,
respectively, were realized on those sales.
16
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
2. INVESTMENTS (CONTINUED)
The change in unrealized gains and losses on investments in common stocks and on
investments in subsidiaries is credited or charged directly to unassigned
surplus and does not affect net income. The cost and fair value of those
investments at December 31, 1995 and 1994 are as follows:
GROSS GROSS
UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
---------------------------------------------
(In Thousands)
DECEMBER 31, 1995
Common stocks $ 41,619 $ 662 $796 $ 41,485
Subsidiaries 197,949 168,864 - 366,813
---------------------------------------------
$239,568 $169,526 $796 $408,298
=============================================
GROSS GROSS
UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
---------------------------------------------
(In Thousands)
DECEMBER 31, 1994
Common stocks $ 23,713 $ 313 $775 $ 23,251
Subsidiaries 197,949 76,706 - 274,655
---------------------------------------------
$221,662 $ 77,019 $775 $297,906
=============================================
The cost of preferred stocks of unaffiliated companies was $27,719,000 and
$72,508,000 at December 31, 1995 and 1994, respectively, and the related fair
value was $27,199,000 and $61,502,000 at December 31, 1995 and 1994,
respectively. There was no difference between cost and statement value of
preferred stocks at December 31, 1995 and 1994.
Included in investments are securities having admitted asset values of
$4,494,000 at December 31, 1995 which were on deposit with various state
insurance departments to satisfy regulatory requirements.
The carrying value of mortgage loans is net of an allowance for loan losses of
$771,000 and $9,137,000 at December 31, 1995 and 1994, respectively. The maximum
and minimum lending rates for residential mortgage loans made during 1995 were
11.5 percent and 4.9 percent, respectively, while the maximum and minimum
lending rates for
17
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
2. INVESTMENTS (CONTINUED)
commercial mortgage loans made during 1995 were 9.6 percent and 7.1 percent,
respectively. The maximum percentage of any one loan to the value of collateral
at the time of the loan, exclusive of insured, guaranteed or purchase money
mortgages was 80 percent. Hazard insurance is required on all properties covered
by mortgage loans at least equal to the excess of the loan over the maximum loan
which would be permitted by law on the land without buildings. As of December
31, 1995, PLH held $1,746,000 of mortgages with interest more than one year
overdue amounting to $215,000. As of December 31, 1995, there were no taxes,
assessments, or other amounts advanced by PLH on account of mortgage loans which
were not included in mortgage loan totals. During 1995, $715,000 of taxes and
maintenance expenses were paid by PLH on property acquired through foreclosure.
During 1995, PLH did not reduce interest rates on any outstanding mortgages.
3. FINANCIAL INSTRUMENTS
PLH utilizes a variety of financial instruments in its asset/liability
management process and to meet its customers' financing needs. The
asset/liability management process focuses on the management of a variety of
risks, including interest rate, market and credit risks. Effective management of
these risks is an important determinant of profitability. Instruments used in
this process and to meet the customers' financing and investing needs include
derivative financial instruments, primarily interest rate swap agreements and
futures contracts, and commitments to extend credit. All of these instruments
involve (to varying degrees) elements of market and credit risks in excess of
the amounts recognized in the accompanying financial statements at a given point
in time. The contract or notional values of all of these instruments reflect the
extent of involvement in the various types of financial instruments.
PLH's exposure to market risk (including interest rate risk) is the risk of
market volatility and potential disruptions in the market which may result in
certain instruments being less valuable. PLH monitors and controls its exposure
to this risk primarily through the use of cash flow stress testing, total
portfolio analysis of net duration levels, a monthly mark-to-market process and
ongoing monitoring of interest rate movements.
PLH's exposure to credit risk is the risk of loss from a counterparty failing to
perform according to the terms of the contract. This exposure
18
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
3. FINANCIAL INSTRUMENTS (CONTINUED)
includes settlement risk (risk that the counterparty defaults after PLH has
delivered funds or securities under the terms of the contract) which results in
an accounting loss and replacement cost risk (cost to replace the contract at
current market rates should the counterparty default prior to the settlement
date). There is no off-balance sheet exposure to credit risk that would result
in an immediate accounting loss (settlement risk) associated with counterparty
non-performance on interest rate swap agreements and futures. Interest rate swap
agreements are subject to replacement cost risk, which equals the cost to
replace those contracts in a net gain position should a counterparty default.
Default by a counterparty would not result in an immediate accounting loss.
These instruments, as well as futures, are subject to market risk, which is the
possibility that future changes in market prices may make the instruments less
valuable. Credit loss exposure resulting from non-performance by a counterparty
for commitments to extend credit is represented by the contractual amounts of
the instruments.
The credit risk on all financial instruments, whether on- or off-balance sheet,
is controlled through an ongoing credit review, approval and monitoring process.
PLH determines, on an individual counterparty basis, the need for collateral or
other security to support financial instruments with credit risk, and
establishes individual and aggregate counterparty exposure limits. In order to
limit exposure associated with counterparty non-performance on interest rate
swap agreements, PLH enters into master netting agreements with its
counterparties. These master netting agreements provide that, upon default of
either party, contracts in gain positions will be offset with contracts in loss
positions and the net gain or loss will be received or paid, respectively.
Assuming every counterparty defaulted, the cost of replacing those interest rate
contracts in a net gain position, after consideration of the aforementioned
master netting agreements, was $51,709,000 and $698,000 at December 31, 1995 and
1994, respectively.
PLH manages interest rate risk through the use of duration analysis. Duration is
a key portfolio management tool and is measured for both assets and liabilities.
For the simplest forms of assets or liabilities, duration is proportional to
their weighted average life, with weights equal to the discounted present value
of estimated cash flows. This methodology causes near-term cash flows to have a
greater proportional weight than cash flows further in the future. For more
complex assets and liabilities with optional cash flows, for example, callable
bonds, mortgage-backed securities, or traditional insurance liabilities,
additional adjustments are made in estimating an effective duration number. PLH
uses
19
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
3. FINANCIAL INSTRUMENTS (CONTINUED)
derivatives as a less costly and less burdensome alternative to restructuring
the underlying cash instruments to manage interest rate risk based upon the
aggregate net duration level of its aggregate portfolio. Information is provided
below for each significant derivative product type.
Interest rate swap agreements generally involve the exchange of fixed and
floating rate interest payments, without an exchange of the underlying principal
amount. PLH also enters into basis swap agreements where amounts received are
based primarily upon six month or less LIBOR and pays an amount based on either
a short-term Treasury or Prime Rate. The amounts to be paid or received as a
result of these agreements are accrued and recognized in the accompanying
statements of operations through net investment income. Gains or losses realized
on closed or terminated agreements are deferred and amortized as a component of
the IMR.
Futures are contracts which call for the delayed delivery of securities in which
the seller agrees to deliver on a specified future date, a specified instrument
at a specified price. The daily change in fair value of futures contracts is
used to adjust the net duration level of the overall portfolio and is deferred
and amortized as a component of the IMR. The net deferred (loss) gain on these
contracts was $(56,112,000) and $14,707,000 during 1995 and 1994, respectively.
The daily change in fair value for futures used as accounting hedges for
products that provide a return based on the market performance of a designated
index is recognized in the accompanying statement of operations through net
realized investment losses. Margin requirements on futures contracts, equal to
the change in fair value, are usually settled on a daily basis.
20
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
3. FINANCIAL INSTRUMENTS (CONTINUED)
The following table summarizes the activity by notional or contract value in
derivative products for 1995 and 1994:
RECEIVE PAY FIXED/
FIXED/PAY RECEIVE
FLOATING FLOATING BASIS FUTURES
---------------------------------------------
(In Thousands)
Balances, December 31, 1993 $1,395,000 $1,257,000 $56,000 $ 39,000
Additions 1,647,000 - 18,000 4,226,000
Maturities 18,000 - 9,000 -
Terminations 2,325,000 1,257,000 - 3,595,000
---------------------------------------------
Balances, December 31, 1994 699,000 - 65,000 670,000
Additions 623,000 250,000 94,000 1,201,000
Maturities 1,000 - 50,000 -
Terminations - - 44,000 1,821,000
---------------------------------------------
Balances, December 31, 1995 $1,321,000 $ 250,000 $65,000 $ 50,000
=============================================
During 1994, PLH terminated or closed certain interest rate swap agreements
which were accounted for as hedges. The net deferred gains on these agreements
during 1994 were $7,425,000 and are being amortized to investment income over
the expected remaining life of the related investment, generally four to ten
years, as a component of the IMR.
COMMITMENTS
Commitments to extend credit consist of agreements to lend to a customer at some
future time, subject to established contractual conditions. Since it is likely
some commitments may expire or be withdrawn without being fully drawn upon, the
total commitment amounts do not necessarily represent future cash requirements.
PLH evaluates individually each customer's creditworthiness. Collateral may be
obtained, if deemed necessary, based on a credit evaluation of the counterparty.
The collateral may include commercial and/or residential real estate. At
December 31, 1995 and 1994, commitments to extend credit were $85,285,000 and
$359,793,000, respectively.
21
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
3. FINANCIAL INSTRUMENTS (CONTINUED)
CONCENTRATIONS OF CREDIT RISK
PLH limits credit risk by diversifying its investment portfolio among common and
preferred stocks, public bonds, private placement securities, and commercial and
residential mortgage loans. It further diversifies these portfolios between and
within industry sectors, by geography and by property type. Credit risk is also
limited by maintaining stringent underwriting standards and purchasing insurance
protection in certain cases. In addition, PLH establishes credit approval
processes, limits and monitoring procedures on an individual counterparty basis.
As a result, management believes that significant concentrations of credit risk
do not exist.
4. FEDERAL INCOME TAXES
PLH and its subsidiaries (FPLH and VLIC) file a consolidated federal income tax
return. Under a written agreement, PLH and its affiliates allocate the federal
income tax liability among the members of the consolidated return group in the
ratio that each member's separate return tax liability for the year bears to the
sum of the separate return tax liabilities of all members, with current credits
for net operating losses. The final settlement under this agreement is made
after the annual filing of the consolidated U.S. Corporate Income Tax Return.
Income before income taxes differs from taxable income principally due to
differences between the treatment of investments for statutory and tax purposes,
policy acquisition costs, and differences in policy and contract liabilities.
At December 31, 1995, PLH recorded a receivable for federal income taxes of
approximately $3,725,000. The receivable resulted primarily from updated
estimates used in the 1995 and 1994 tax accrual calculations and a tax capital
loss of approximately $28,800,000. The tax capital loss is expected to be
carried back and fully utilized against tax capital gains in the carryback
period.
Included in the statement of changes in capital and surplus are certain
adjustments totaling $5,092,013 at December 31, 1995 relating to the settlement
of the 1991/1992 IRS audit. No adjustments were necessary at December 31, 1994.
At December 31, 1995, accumulated earnings of PLH for federal income tax
purposes included $17,425,000 of "Policyholders' Surplus," a special memorandum
tax account.
22
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
4. FEDERAL INCOME TAXES (CONTINUED)
This memorandum account balance has not been currently taxed, but income taxes
computed at current rates will become payable if this surplus is distributed.
Provisions of the Deficit Reduction Act of 1984 (the "Act") do not permit
further additions to the Policyholders' Surplus account. "Shareholders' Surplus"
is also a special memorandum tax account, and generally represents an
accumulation of taxable income (net of tax thereon) plus the dividends-received
deduction, tax-exempt interest, and certain other special deductions as provided
by the Act. At December 31, 1995, the balance in the Shareholders' Surplus
account amounted to approximately $621,075,000. There is no present intention to
make distributions in excess of Shareholders' Surplus.
5. RELATED PARTY TRANSACTIONS
PLH has entered into an agreement with its affiliates whereby PLH performs
administrative services, management support services, and marketing services for
its affiliates. PLH, as compensation, receives an amount equal to the actual
cost of providing such services. This cost is allocated on a pro rata basis to
each affiliate receiving these services. Amounts received were $68,000,000 in
1995, $44,000,000 in 1994 and $73,300,000 in 1993; such amounts are classified
as reductions of general insurance and other expenses in the accompanying
statements of operations.
On November 1, 1995, PLH executed a Revolving Credit Note with FPLH allowing for
FPLH to borrow from PLH up to $5,000,000. The note is a demand note expiring
November 1, 1996 with interest payable at the prime rate. At December 31, 1995,
there was no outstanding balance. There was no interest earned by PLH during
1995 on this note.
PLH participates in a short-term investment agreement with PVN and other
affiliates which provides for the centralization of short-term investment
operations. PLH retains the right to participate in or withdraw its funds on a
daily basis. PLH had invested $2,400,000 and $21,900,000 in this short-term
agreement as of December 31, 1995 and 1994, respectively.
PLH participates in various benefit plans sponsored by PVN and the related costs
allocated to PLH are not significant.
PLH has 2,290,000 shares of redeemable preferred stock outstanding, all of which
are owned by CLLP. The preferred stock has a par value of $11 per share and a
liquidation value of $240 per share. CLLP is entitled to receive a cumulative
dividend equal to 8 1/2 percent per annum of the liquidation value of the
preferred stock. PLH may redeem all or any portion of the preferred stock at the
liquidation value commencing December 18, 2000.
On December 13, 1995, PLH redeemed 1,000 shares of its common stock held by its
wholly owned subsidiary, VLIC, for $4,000,000.
23
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
5. RELATED PARTY TRANSACTIONS (CONTINUED)
On November 8, 1994, PLH made a surplus contribution of $101,000,000
($50,000,000 in cash and $51,000,000 in securities) to VLIC.
Prior to April 1, 1995, PLH was a party to various reinsurance agreements with
VLIC whereby PLH ceded pro rata portions of certain blocks of its life and
health business on a coinsurance basis. The agreements were amended effective
April 1, 1995 whereby PLH recaptured the business. This recapture resulted in
PLH recording $159,169,000 of liabilities related to the business and
$92,497,000 of assets supporting the block of business. The $66,672,000
difference between the liabilities and assets recorded represents a recapture
fee incurred by PLH to compensate VLIC for the present value of the future cash
flows on the business recaptured by PLH.
The following table summarizes the amounts reflected in the statements of
operations from these reinsurance agreements:
<TABLE>
<CAPTION>
EXPENSE (REVENUE) FOR THE
YEAR ENDED DECEMBER 31
1995 1994 1993
--------------------------------
(In Thousands)
<S> <C> <C> <C>
Premium income ceded $ 15,049 $ 37,573 $ 37,333
Life and accident and
health benefits ceded (10,582) (28,601) (28,874)
Commissions and expense allowances (6,029) (14,794) (15,926)
on reinsurance ceded
Reserve adjustments on
reinsurance ceded - (2,626) (1,963)
Reinsurance recapture fee 66,672 - -
</TABLE>
PLH entered into two indemnity reinsurance agreements with CLICO in 1987 whereby
PLH assumes 100% of the risks reinsured on all structured settlement policies
issued during 1987 by CLICO. The agreements were amended in 1988 whereby PLH
also assumes 100% of the risks reinsured on all structured settlement, pension
buyout, and single premium immediate annuities issued subsequent to 1987 by
CLICO. The agreements were also amended in 1988 to change the agreements from
indemnity reinsurance to coinsurance. The agreements were also amended in 1992
whereby CLICO recaptured structured settlements issued in 1991 and in the first
five months of
24
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
5. RELATED PARTY TRANSACTIONS (CONTINUED)
1992. The following table summarizes the amounts reflected in the statements of
operations from these agreements:
<TABLE>
<CAPTION>
EXPENSE (REVENUE) FOR THE
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------
(In Thousands)
<S> <C> <C> <C>
Premium income assumed $(66,091) $(23,719) $(76,519)
Annuity benefits assumed 61,307 55,802 52,493
Commissions and expense allowance
on reinsurance assumed 5,291 3,784 6,393
Change in policy reserves assumed 71,056 29,618 81,199
</TABLE>
PLH entered into a reinsurance agreement with CLICO in 1988 on a coinsurance
basis whereby PLH assumes 100% of the risks on all credit life and disability
policies issued prior to January 1, 1989 by CLICO. The agreements were amended
in 1990 whereby PLH also assumes 100% of the risks on all credit life and
disability policies issued between January 1, 1989 and March 31, 1990,
inclusive. The following table summarizes the amounts reflected in the
statements of operations from this agreement:
<TABLE>
<CAPTION>
EXPENSE (REVENUE) FOR THE
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------
(In Thousands)
<S> <C> <C> <C>
Premium income assumed $ 11 $ 10 $ (117)
Life and accident and health
benefits assumed 176 431 1,277
Commissions and expense allowances (6) (19) (104)
on reinsurance assumed
Change in policy reserves assumed (345) (668) (1,701)
</TABLE>
PLH entered into a reinsurance agreement with CLICO in 1990 on a coinsurance
basis whereby PLH assumes 100% of the risk on certain guaranteed investment
contracts issued by CLICO. The agreement was amended in 1995 to provide CLICO
with profit sharing on the assumed business of up to 20 basis points per year
of the account value.
25
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
5. RELATED PARTY TRANSACTIONS (CONTINUED)
The amount of profit sharing paid to CLICO in 1995 was $1,589,000. In addition,
the agreement was amended to provide CLICO with reimbursement of extraordinary
expenses related to the assumed policies, including guaranty fund assessment
payments. There were no expense reimbursements made to CLICO in 1995. The
following table summarizes amounts reflected in the statements of operations
from this reinsurance agreement:
<TABLE>
<CAPTION>
EXPENSE (REVENUE) FOR THE
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------
(In Thousands)
<S> <C> <C> <C>
Premium income assumed $(289,272) $(698,338) $(207,489)
Life and other benefits assumed 276,351 76,342 234,937
Commissions and expense allowances 350 1,110 1,910
on reinsurance assumed
Change in policyholder contract
deposits assumed 104,113 (658,482) 4,496
</TABLE>
PLH entered into indemnity reinsurance agreements with PSI in 1987 whereby PLH
assumed 100 percent of the risks reinsured on all structured settlement
contracts issued during 1987. The agreements were amended in 1988 whereby PLH
also assumed 100 percent of the risks reinsured on all structured settlement,
pension buyout and single premium immediate annuities issued subsequent to 1987.
The agreements were also amended in 1988 to change the agreements from indemnity
reinsurance to coinsurance. The following table summarizes amounts reflected in
the statements of operations from these reinsurance agreements:
<TABLE>
<CAPTION>
EXPENSE (REVENUE) FOR THE
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------
(In Thousands)
<S> <C> <C> <C>
Premium income assumed $(1,231) $ 291 $ 503
Annuity and other benefits assumed 8,007 7,443 7,563
Commissions and expense allowances
on reinsurance assumed 10 5 21
Change in policyholder contract
deposits assumed 116 (666) 169
</TABLE>
26
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
5. RELATED PARTY TRANSACTIONS (CONTINUED)
Effective June 30, 1995, PLH entered into a coinsurance agreement with PSI
whereby PLH assumed 100 percent of the risk of business reinsured by PSI from
North American Security Life (NASL). This agreement coinsures existing deposits
of NASL's fixed annuities and the fixed account portion of their variable
annuity product business. In addition, this agreement includes prospective
coinsurance of additional annual fixed annuity deposits from the future sales of
NASL's fixed and variable annuities. This agreement also contains a provision
which provides PSI with profit sharing on the assumed business of up to 10 basis
points of account value. There were no profit sharing amounts payable in 1995.
Under the agreement, PLH received cash and invested assets in exchange for its
coinsurance of $724,700,000 of fixed annuity deposits. At December 31, 1995,
there were $728,700,000 of fixed annuity deposits outstanding which were
coinsured by PLH. The following table summarizes amounts reflected in the
statements of operations from this reinsurance agreement:
<TABLE>
<CAPTION>
EXPENSE (REVENUE) FOR THE YEAR
ENDED DECEMBER 31, 1995
------------------------------
(In Thousands)
<S> <C>
Premium income assumed $(72,339)
Annuity benefits assumed 98,519
Commissions and expense allowances
on reinsurance assumed 1,441
Change in policyholder contract deposits assumed (1,715)
</TABLE>
PLH entered into two separate reinsurance agreements with two affiliates,
Academy Life Insurance Company (ALIC) and Pension Life Insurance Company of
America (PLIC), in 1992, both on a coinsurance funds withheld basis. On April 1,
1993, the reinsurance agreements were amended from a coinsurance funds withheld
basis to a coinsurance nonfunds withheld basis. On April 1, 1993, PLH received
funds in the amount of $23,000,000 under the terms of these reinsurance
agreements. The following table summarizes the amounts reflected in the
statements of operations from these reinsurance agreements:
27
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
5. RELATED PARTY TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
EXPENSE (REVENUE) FOR THE
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------
(In Thousands)
<S> <C> <C> <C>
Premium income assumed $(49,325) $(53,051) $(71,128)
Life, accident and health and other
benefit assumed 31,421 33,457 37,926
Commissions and expense allowances
on reinsurance assumed 12,349 12,438 26,966
Change in policy reserves assumed 1,588 4,122 3,269
Other income assumed (1,030) (3,475) (1,019)
</TABLE>
Policy reserves and policy and contract claims exclude liabilities relating to
reinsurance ceded to affiliates of approximately $160,000,000 at December 31,
1994. No such amounts were ceded as of December 31, 1995. While these amounts
have been excluded from liabilities, PLH remains liable in the event the
reinsuring companies are unable to meet their obligations.
6. REINSURANCE
Certain premiums and benefits are assumed from and ceded to other nonaffiliated
insurance companies under various reinsurance agreements. The ceded reinsurance
agreements provide PLH with increased capacity to write larger risks.
PLH's assumed and ceded reinsurance agreements with affiliated and nonaffiliated
insurance companies reduced (increased) certain items in the accompanying
financial statements by the following amounts:
<TABLE>
<CAPTION>
1995 1994 1993
------------------------------------
(In Thousands)
<S> <C> <C> <C>
ASSUMED:
Policy and contract liabilities* $3,153,667 $1,978,629 $1,284,940
Claim reserves* 11,512 9,748 8,306
Advance premiums* 921 787 408
Unearned premium reserves* 8,114 7,226 6,609
</TABLE>
*At year end.
28
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
6. REINSURANCE (CONTINUED)
<TABLE>
<CAPTION>
1995 1994 1993
------------------------------------
(In Thousands)
<S> <C> <C> <C>
CEDED:
Benefits paid or provided $12,679 $ 30,889 $ 30,274
Commissions and expense allowances
on reinsurance ceded (7,164) (16,186) (17,230)
Other income-reserves on
ceded business 1,305 (39) (37)
Policy and contract liabilities* 2,682 164,604 174,624
Claim reserves* 469 1,120 1,441
Advance premiums* 11 55 54
Unearned premium reserves* 19 533 554
</TABLE>
*At year end.
Amounts payable or recoverable for reinsurance on paid or unpaid life and health
claims are not subject to periodic or maximum limits. At December 31, 1995, PLH
reinsurance recoverables are not material and no individual reinsurer owed PLH
an amount equal to or greater than 3% of PLH's surplus.
For all short-duration contracts, the effect of all reinsurance agreements on
accident and health premiums written and earned in 1995, 1994 and 1993 was as
follows:
<TABLE>
<CAPTION>
1995 1994 1993
PREMIUMS PREMIUMS PREMIUMS
WRITTEN EARNED WRITTEN EARNED WRITTEN EARNED
-------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Direct $101,345 $101,452 $111,163 $111,099 $124,725 $125,110
Assumed 62,667 61,773 56,762 55,946 50,951 52,250
Ceded (3,140) (3,675) (4,283) (4,303) (4,184) (4,192)
-------------------------------------------------------------------
Net $160,872 $159,550 $163,642 $162,742 $171,492 $173,168
===================================================================
</TABLE>
29
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
6. REINSURANCE (CONTINUED)
For all long-duration contracts, the effect of reinsurance on life and annuity
premiums earned in 1995, 1994 and 1993 was as follows:
<TABLE>
<CAPTION>
1995 1994 1993
PREMIUMS EARNED PREMIUMS EARNED PREMIUMS EARNED
-----------------------------------------------------
<S> <C> <C> <C>
(In Thousands)
Direct $138,553 $134,011 $147,943
Assumed 140,738 84,332 146,994
Ceded (15,271) (37,200) (36,466)
-----------------------------------------------------
Net $264,020 $181,143 $258,471
=====================================================
</TABLE>
PLH remains obligated for amounts ceded in the event that the reinsurers do not
meet their obligations.
7. LIFE AND ANNUITY RESERVES AND DEPOSIT FUND LIABILITIES
The withdrawal provisions of PLH's annuity reserves and deposit fund liabilities
at December 31, 1995 are summarized as follows:
<TABLE>
<CAPTION>
AMOUNT PERCENT
-----------------------
(In Thousands)
<S> <C> <C>
Subject to discretionary withdrawal (with adjustment):
With market value adjustment $1,269,197 16.1%
At book value less surrender charge 567,158 7.2%
At market value 2,416,018 30.6%
-----------------------
4,252,373 53.9%
Subject to discretionary withdrawal (without adjustment)
at book value with minimal or no charge or adjustment 2,064,845 26.2%
Not subject to discretionary withdrawal 1,567,088 19.9%
-----------------------
Total annuity reserves and deposit fund liabilities
before reinsurance 7,884,306 100.0%
==========
Less reinsurance -
------------
Net annuity reserves and deposit fund liabilities $7,884,306*
============
</TABLE>
*Includes $1,710,866,000 of annuities reported in PLH's separate account
liability.
30
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
7. LIFE AND ANNUITY RESERVES AND DEPOSIT FUND LIABILITIES (CONTINUED)
The above amount subject to discretionary withdrawal with market value
adjustment includes approximately $598,000 at December 31, 1995 of floating rate
GIC liabilities with credited rates that vary in response to changes in
stipulated indexes and which self-adjust in response to market changes making
their market value and book value essentially equal.
As of December 31, 1995, PLH has $143,808,000 of insurance in force for which
the gross premiums are less than the net premiums according to the standard of
valuation set by the State of Missouri.
8. SEPARATE ACCOUNTS
Separate accounts held by PLH primarily represent funds held for individual
policyholders. The separate accounts do not have any minimum guarantees and the
investment risks associated with market value changes are borne entirely by the
policyholder. Information regarding the separate accounts of PLH as of and for
the year ended December 31, 1995 is as follows:
<TABLE>
<CAPTION>
NONINDEXED
GUARANTEE NON-
MORE THAN 4% GUARANTEED TOTAL
----------------------------------------
(In Thousands)
<S> <C> <C> <C>
Premiums, deposits and other
considerations $ 75,292 $ 338,974 $ 414,266
========================================
Reserves for separate accounts* $258,192 $1,471,721 $1,729,913
========================================
Reserves for separate accounts by
withdrawal characteristics:
Subject to discretionary withdrawal
(with adjustment):
With market value adjustment $258,192 $ - $ 258,192
At market value - 1,471,721 1,471,721
----------------------------------------
Total separate account liabilities $258,192 $1,471,721 $1,729,913
========================================
</TABLE>
*Reserves for separate accounts are exclusive of $11,651,000 which represents
transfers due the general account and other amounts payable as of December 31,
1995.
31
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
8. SEPARATE ACCOUNTS (CONTINUED)
A reconciliation of the amounts transferred to and from PLH's separate accounts
for the year ended December 31, 1995 is presented below:
<TABLE>
<CAPTION>
1995
--------------
(In Thousands)
<S> <C>
Transfers as reported in the Summary of Operations of
PLH's Separate Accounts Annual Statement:
Transfers to separate accounts $ 414,266
Transfers from separate accounts (105,966)
--------------
Net transfers to separate accounts 308,300
Reconciling adjustments:
Fees paid to external fund manager (1,254)
Transfers to modified separate account (6,668)
--------------
(7,922)
--------------
Transfers as reported in the Summary of Operations
of PLH's Life, Accident & Health Annual Statement $ 316,222
==============
</TABLE>
9. PREMIUMS AND ANNUITY CONSIDERATIONS DEFERRED AND UNCOLLECTED
Deferred and uncollected life insurance premiums and annuity considerations as
of December 31, 1995 were as follows:
<TABLE>
<CAPTION>
NET OF
TYPE GROSS LOADING LOADING
- ---------------------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Ordinary new $ 3,513 $ 2,476 $ 1,037
Ordinary renewal 17,162 4,674 12,488
----------------------------
Total ordinary 20,675 7,150 13,525
----------------------------
Group new business 6,425 3,566 2,859
Group renewal 40,447 10,982 29,465
----------------------------
Total group 46,872 14,548 32,324
----------------------------
Total $ 67,547 $ 21,698 $ 45,849
============================
</TABLE>
32
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
10. STATUTORY RESTRICTIONS ON DIVIDENDS
PLH is subject to limitations, imposed by the State of Missouri, on the payment
of dividends to its parent company. Generally, dividends during any year may not
be paid, without prior regulatory approval, in excess of the greater of (1) 10
percent of PLH's statutory capital and surplus as of the preceding December 31,
or (2) PLH's statutory net income for the preceding year. Subject to
availability of unassigned surplus at the time of such dividend, the maximum
payment which may be made in 1996, without prior approval, is $57,649,000.
11. CONTINGENCIES
In the ordinary course of business, PLH is a defendant in litigation principally
involving insurance policy claims for damages, including compensatory and
punitive damages. In the opinion of management, the outcome of such litigation
will not result in a loss which would be material to PLH's financial position at
December 31, 1995.
12. FAIR VALUES OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used in estimating fair value
disclosures for the following financial instruments:
BONDS, PREFERRED STOCKS AND COMMON STOCKS
The fair values of bonds, preferred stocks and common stocks are generally
based on published quotations of the SVO of the NAIC. However, for certain
investments, the SVO does not provide a value and PLH uses either admitted
asset investment amounts (i.e., statement values) as allowed by the NAIC,
values provided by outside broker confirmations or internally calculated
estimates. The fair values of PLH's bonds, preferred stocks and common
stocks are disclosed in Note 2.
MORTGAGE LOANS
The fair values of commercial and residential mortgage loans are estimated
utilizing discounted cash flow calculations, using current market interest
rates for loans with similar terms to borrowers of similar credit quality.
POLICY LOANS
The carrying values of policy loans reported in the accompanying balance
sheets approximate their fair values.
33
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
12. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)
CASH, SHORT-TERM INVESTMENTS AND OTHER INVESTED ASSETS
The carrying values of cash, short-term investments and other invested
assets reported in the accompanying balance sheets approximate their fair
values.
INVESTMENT CONTRACTS
The fair values of floating rate guaranteed investment contracts approximate
their carrying values. The fair values of fixed rate guaranteed investment
contracts and investment-type fixed annuity contracts are estimated using
discounted cash flow calculations, based on current interest rates for
similar contracts. The fair values of variable annuity contracts approximate
their carrying values.
DERIVATIVE FINANCIAL INSTRUMENTS
The fair values for derivative financial instruments are based on pricing
models or formulas using current assumptions.
The carrying values and fair values of PLH's investments in commercial and
residential mortgage loans are summarized as follows:
<TABLE>
<CAPTION>
CARRYING FAIR
VALUE VALUE
------------------------
(In Thousands)
<S> <C> <C>
DECEMBER 31, 1995
Commercial mortgages $1,495,755 $1,527,424
Residential mortgages 1,261,136 1,267,627
------------------------
$2,756,891 $2,795,051
========================
DECEMBER 31, 1994
Commercial mortgages $1,442,685 $1,468,697
Residential mortgages 570,690 545,640
------------------------
$2,013,375 $2,014,337
========================
</TABLE>
The fair values of interest rate swap agreements were $51,540,000 and
$(20,833,000) at December 31, 1995 and 1994, respectively. These instruments are
primarily off-balance sheet and as such, are not recorded in the accompanying
financial statements.
34
<PAGE>
Providian Life and Health Insurance Company
Notes to Financial Statements (continued)
12. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)
The carrying values and fair values of PLH's liabilities for investment-type
contracts are summarized as follows:
<TABLE>
<CAPTION>
CARRYING FAIR
VALUE VALUE
------------------------
(In Thousands)
<S> <C> <C>
DECEMBER 31, 1995
Fixed annuity contracts $3,667,197 $3,801,151
Guaranteed investment contracts 1,519,204 1,546,248
Variable annuity contracts 1,471,722* 1,471,722
------------------------
$6,658,123 $6,819,121
========================
DECEMBER 31, 1994
Fixed annuity contracts $3,103,331 $3,098,958
Guaranteed investment contracts 1,494,308 1,473,202
Variable annuity contracts 944,261* 944,261
------------------------
$5,541,900 $5,516,421
========================
</TABLE>
*Included in PLH's separate account liabilities.
The fair values for PLH's insurance contracts other than investment contracts
are not required to be disclosed. However, the fair values of liabilities under
all insurance contracts are taken into consideration in PLH's overall management
of interest rate risk, such that PLH's exposure to changing interest rates is
minimized through the matching of investment maturities with amounts due under
insurance contracts.
35
<PAGE>
LIFE AND ACCIDENT AND HEALTH COMPANIES - ASSOCIATION EDITION
- ---------------------------------------------------------
QUARTERLY STATEMENT
AS OF SEPTEMBER 30, 1996
OF THE CONDITION AND AFFAIRS OF THE
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
---------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <S> <C> <S> <C>
NAIC Group Code 0034 NAIC Company Code 66605 Employer's ID Number 43-0378030
------------- -------------- --------------
Organized under the Laws of the State of Missouri
---------------------------,
using_________________________ as the Port of Entry, made to the
INSURANCE DEPARTMENT OF THE STATE OF
PURSUANT TO THE LAWS THEREOF
Incorporated August 6, 1920 Commenced Business August 31, 1920
----------------------------- ------------------------------------------
Statutory Home Office 237 East High Street Jefferson City, Missouri 65102
------------------------------------, ----------------------------------------------------
(Street and Number) (City or Town, State and Zip Code)
Main Administrative Office 20 Moores Road
-------------------------------------------------------------------------------------
(Street and Number)
Frazer, Pennsylvania 19355 610-648-5000
- ---------------------------------------------------------- ---------------------------------------------
(City or Town, State and Zip Code) (Area Code) (Telephone Number)
Mail Address 20 Moores Road Frazer, Pennsylvania 19355
---------------------------------------------- ---------------------------------------------
(Street and Number or P.O. Box) (City or Town, State and Zip Code)
Primary Location of Books and Records 20 Moores Road
--------------------------------------------------------------------------
(Street and Number)
Frazer, Pennsylvania 19355 610-648-5000
- --------------------------------------------------------- ---------------------------------------------
(City or Town, State and Zip Code) (Area Code) (Telephone Number)
Quarterly Statement Contact Paul John Lukacs 610-648-4737
-----------------------------------------------------------------------------------
(Name) (Area Code) (Telephone Number) (Extension)
</TABLE>
OFFICERS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
President David James Miller Secretary Susan Elizabeth Martin #
------------------------------------- ----------------------------------------------------
Treasurer Dennis Eugene Brady Actuary Michael Anthony Cioffi #
------------------------------------- -----------------------------------------------------
</TABLE>
VICE PRESIDENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Brian Alford Richard Andrew Babyak Edward Andrew Biemer
- ---------------------------------- ---------------------------------- ----------------------------------
Rita Biesiot Thomas Patrick Bowie # Joan Gritton Chandler #
- ---------------------------------- ---------------------------------- ----------------------------------
Michele Marie Coan # Charles Neil Coatsworth Julie Stone Congdon #
- ---------------------------------- ---------------------------------- ----------------------------------
Karen Hufnagel Fleming Anita Gambos # Gregory John Garvin #
- ---------------------------------- ---------------------------------- ----------------------------------
Carolyn MacBurney Kerstein William John Kline # Jeffrey Paul Lammers #
- ---------------------------------- ---------------------------------- ----------------------------------
Michael Farrin Lane Glyn Douglas Mangum Jr. John Anthony Mazzuca #
- ---------------------------------- ---------------------------------- ----------------------------------
Kevin Patrick McGlynn Douglas Scott Menges Robin Michelle Morgan #
- ---------------------------------- ---------------------------------- ----------------------------------
Thomas Bossert Nesspor Gordon Eric O'Brien # Daniel Harris Odum #
- ---------------------------------- ---------------------------------- ----------------------------------
Harold William Peterson Jr. John Reed Pegues John Cadman Prestwood Jr.
- ---------------------------------- ---------------------------------- ----------------------------------
Martin Renninger John Howard Rogers Frank Joseph Rosa
- ---------------------------------- ---------------------------------- ----------------------------------
Ellen Sisson Rosen # Douglas Alan Sarcia Nancy Boughan Schuckert
- ---------------------------------- ---------------------------------- ----------------------------------
Joseph Dennis Strenk William Wilton Strickland Oris Russell Stuart III
- ---------------------------------- ---------------------------------- ----------------------------------
William Conrad Tomilin Janice Lynn Weaver # Paul Yakulis
- ---------------------------------- ---------------------------------- ----------------------------------
DIRECTORS OR TRUSTEES
Dennis Eugene Brady Julie Stone Congdon # Susan Elizabeth Martin #
- ---------------------------------- ---------------------------------- ----------------------------------
Kevin Patrick McGlynn # David James Miller Thomas Bossert Nesspor #
- ---------------------------------- ---------------------------------- ----------------------------------
Martin Renninger # Ellen Sisson Rosen # Paul Yakulis #
- ---------------------------------- ---------------------------------- ----------------------------------
- ---------------------------------- ---------------------------------- ----------------------------------
- ---------------------------------- ---------------------------------- ----------------------------------
</TABLE>
State of Pennsylvania }
.......................... }
County of Chester }SS
............................}
David James Miller, President, Susan Elizabeth Martin/Secretary, Dennis
Eugene Brady, Treasurer of the PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY being
duly sworn, each deposes and says that they are the above described officers of
the said insurer, and that on the THIRTIETH day of SEPTEMBER, 1996, all of the
herein described assets were the absolute property of the said insurer, free and
clear from any liens or claims thereon, except as herein stated, and that this
statement is a full and true statement of all the assets and liabilities and of
the condition and affairs of the said insurer as of the THIRTIETH day of
SEPTEMBER 1996, and of its income and deductions therefrom for the NINE months
ended on that date, and have been completed in accordance with the NAIC annual
statement instructions and accounting practices and procedures manuals except to
the extent that; (1) state law may differ; or (2) that state rules or
regulations require differences in reporting not related to accounting practices
and procedures, according to the best of their information, knowledge and
belief, respectively.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ D. J. Miller /s/ Susan E. Martin /s/ Dennis Eugene Brady
........................ ............................... ...............................
President Secretary Treasurer
Subscribed and sworn to before me this ................................
31st day of October, 1996 Actuary
[NOTARIAL SEAL APPEARS HERE]
/s/ Linda K. Clauser
......................
</TABLE>
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
ASSETS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5
Ledger Assets Non-Ledger Assets Assets Not Admitted Net Admitted Assets Previous Year Ending
(Cols. 1 + 2 - 3) December 31, 1995
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Bonds...................4,361,335,982 4,361,335,982 4,410,244,655
2. Stocks:
2.1 Preferred stocks.... 40,589,017 40,589,017 27,719,117
2.2 Common stocks....... 224,396,004 196,058,415 687,790 419,766,629 408,297,877
3. Mortgage loans on real
estate:
3.1 First liens.........2,574,269,651 2,574,269,651 2,756,890,797
3.2 Other than first
liens............... 0 0
4. Real estate:
4.1 Properties
occupied by the
company (less
_______________$0
encumbrances)....... 4,688,928 4,688,928 0 0
4.2 Properties
acquired in satis-
faction of debt
(less _________$0
encumbrances)....... 19,695,041 19,695,041 25,064,852
4.3 Investment real
estate (less
_______________$0
encumbrances........ 0 0
5. Policy loans............ 161,370,272 5,184 161,365,088 158,774,535
6. Premium notes, includ-
ing _______________$0
for first year
premiums................ 0 0
7. Collateral loans........ 0 0
8.1 Cash on hand and on
deposit:
a. Cash in company's
office............. 6,000 6,000 6,000
b. Cash on deposit.... (16,795,191) (16,795,191) (2,312,250)
8.2 Short-term invest-
ments................. 118,363,554 118,363,554 207,572,518
9. Other invested assets. 159,401,009 159,401,009 125,893,742
10. Aggregate write-ins
for invested assets... (728,855) 0 0 (728,855) (841,812)
------------------------------------------------------------------------------------------------
10A. Subtotals, cash and
invested assets
(Lines 1 to 10).......7,646,591,412 196,058,415 5,381,902 (a) 7,837,267,925 8,117,310,031
11. Reinsurance ceded:
11.1 Amounts recover-
able from
reinsurers....... 370,152 370,152 93,630
11.2 Commissions and
expense allow-
ances due........ 0 1,758
11.3 Experience
rating and
other refunds
due.............. 0 0
12. Electronic data
processing
equipment............. 1,177,577 13,511 1,164,066 1,139,104
13. Federal income tax
recoverable........... 0 3,724,852
14. Life insurance
premiums and
annuity consid-
erations deferred
and uncollected on
in force at the
end of the period
(less premiums on
reinsurance ceded
and less
_______$20,773,405
loading).............. 46,693,222 46,693,222 45,849,166
15. Accident and health
premiums due and
unpaid................ 6,782,915 6,782,915 3,442,185
16. Investment income due
and accrued........... 98,318,650 98,318,650 99,000,821
17. Net adjustment in
assets and
liabilities due
to foreign
exchange rates........ 0 0
18. Receivable from
parent, subsidiaries
and affiliates........ 22,036,334 501,224 21,535,110 15,509,559
19. Amounts receivable
relating to
uninsured accident
and health plans...... 0 0
20. Other assets:
20.1 Agent's balances
(gross debit
_______$832,064 less
________$95,111 for
doubtful accounts
less $545,629
credit balances)...... 191,324 191,324 XXX XXX
20.2 Bills receivable. XXX XXX
20.3 Furniture and
equipment........ 530,617 530,617 XXX XXX
20.4 Cash advanced to
or in hands of
officers or
agents........... 256,070 256,070 XXX XXX
20.5 Loans on personal
security, endor-
sed or not....... XXX XXX
21. Aggregate write-ins
for other than
invested assets....... 50,615,756 15,383,114 25,113,082 40,885,788 35,335,965
------------------------------------------------------------------------------------------------
22. Total assets
excluding Separate
Accounts Business
(Lines 10A to 21).....7,721,399,090 363,606,468 31,987,730 8,053,017,828 8,321,407,071
-------------------------------------------------
23. From Separate
Accounts Statement.... 2,195,585,016 1,741,564,542
-----------------------------------------
24. Total (Lines 22
and 23)............... 10,248,602,844 10,062,971,613
- ----------------------------------------------------------------------------------------------------------------------------
DETAILS OF WRITE-INS
1001. Financial Futures.... (728,855) (728,855) (841,812)
1002. ..................... 0
1003. ..................... 0
1098. Summary of remain-
ing write-ins for
Line 10 from over-
flow page............ 0 0 0 0 0
1099. Totals (Lines 1001
thru 1003 plus 1098)
(Line 10 above)...... (728,855) 0 0 (728,855) (841,812)
- ----------------------------------------------------------------------------------------------------------------------------
2101. Guaranty Assessments. 6,829,019 6,829,019 6,407,132
2102. Accounts Receivable
Other................ 2,653,087 2,158,977 494,110 1,921,863
2103. Remittances and Items
not Allocated........ 135,289 135,289 0
2198. Summary of remaining
write-ins for Line 21
from overflow page... 40,998,361 15,383,114 22,818,816 33,562,659 27,006,970
2199. Totals (Lines 2101
thru 2103 plus 2198)
(Line 21 above)...... 50,615,756 15,383,114 25,113,082 40,885,788 35,335,965
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Includes $394,007,717 investments in parent, subsidiaries, and affiliates.
2
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE
COMPANY
LIABILITIES, SURPLUS AND OTHER FUNDS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1 2
Current Previous Year Ending
Period December 31, 1995
------------- --------------------
<S> <C> <C> <C>
1. Aggregate reserve for life policies and contracts $5,251,471,703 less $0
included in Line 7.3 (including $0 Modco Reserve) 5,251,471,703 5,521,362,867
2. Aggregate reserve for accident and health policies (including $0 Modco Reserve) 86,112,568 87,003,125
3. Supplementary contracts without life contingencies (including $0 Modco Reserve) 311,870 270,652
4. Policy and contract claims:
4.1 Life 16,310,009 13,777,316
4.2 Accident and health 26,878,055 24,169,501
5. Policyholders' dividend and coupon accumulations 0
6. Policyholders' dividends $7,260 and coupons $0 due and unpaid 7,260 20,652
7. Provision for policyholders' dividend and coupon payable in following calendar year-estimated amounts:
7.1 Dividends apportioned for payment to December 31, 1996 438,157 450,462
7.2 Dividends not yet apportioned 0
7.3 Coupons and similar benefits 0
8. Amount provisionally held for deferred dividend policies not included in Line 7 0
9. Premiums and annuity considerations received in advance less $0 discount; including
$0 accident and health premiums 4,529,297 4,536,005
10. Liability for premium and other deposit funds:
10.1 Policyholder premiums, including $98,221,937 deferred annuity liability 330,329,686 314,104,046
10.2 Guaranteed interest contracts, including $1,440,688,292 deferred annuity liability 1,440,688,292 1,519,204,242
10.3 Other contract deposit funds, including $0 deferred annuity liability 0
11. Policy and contract liabilities not included elsewhere:
11.1 Surrender values on cancelled policies 0
11.2 Provision for experience rating refunds, including $0 accident and health
experience rating refunds 0
11.3 Other amounts payable on reinsurance assumed 0
11.4 Interest maintenance reserve 0
12. Commission to agents due or accrued-life and annuity $0 accident and health
$1,242,018 1,242,018 721,839
12A. Commissions and expense allowances payable on reinsurance assumed 11,899,453 10,650,764
13. General expenses due or accrued 16,551,928 19,899,325
13A. Transfers to Separate Accounts due or accrued (net) (7,155,522) (9,945,235)
14. Taxes, licenses and fees due or accrued, excluding federal income taxes 13,418,359 11,941,729
14A. Federal income taxes due or accrued, including ($5,029,484) on capital gains
(excluding deferred taxes) 2,776,921 0
15. "Cost of collection" on premiums and annuity considerations deferred and uncollected
in excess of total loading thereon 0
16. Unearned investment income 6,189,944 7,295,135
17. Amounts withheld or retained by company as agent or trustee 6,172,653 10,833,332
18. Amounts held for agents' account, including $545,629 agents' credit balances 545,629 477,023
19. Remittances and items not allocated 16,748,302 11,348,433
20. Net adjustment in assets and liabilities due to foreign exchange rates 0
21. Liability for benefits for employees and agents if not included above 0
22. Borrowed money $0 and interest thereon $0 488
23. Dividends to stockholders declared and unpaid 0
24. Miscellaneous liabilities:
24.1 Asset valuation reserve 90,751,133 89,485,959
24.2 Reinsurance in unauthorized companies 0
24.3 Funds held under reinsurance treaties with unauthorized reinsurers 1,115,335
24.4 Payable to parent, subsidiaries and affiliates 21,416,376 18,881,820
24.5 Drafts outstanding 0
24.6 Liability for amounts held under uninsured accident and health plans 0
24.7 Funds held under coinsurance
25. Aggregate write-ins for liabilities 99,090,165 87,308,648
----------------------------------
26. Total Liabilities excluding Separate Accounts business (Lines 1 to 25) 7,436,724,256 7,744,913,463
27. From Separate Accounts Statement 2,195,585,016 1,741,564,543
----------------------------------
28. Total Liabilities (Lines 26 and 27) 9,632,309,272 9,486,478,006
29. Common capital stock 12,595,000 12,595,000
30. Preferred capital stock 25,190,000 25,190,000
31. Aggregate write-ins for other than special surplus funds 0 0
32. Surplus notes 0
33. Gross paid in and contributed surplus 2,582,898 2,582,898
34. Aggregate write-ins for special surplus funds 0 0
35. Unassigned funds (surplus) 575,925,674 536,125,709
36. Less treasury stock, at cost:
(1) 0 shares common (value included in Line 29 $0) 0
(2) 0 shares preferred (value included in Line 30 $0) 0
37. Surplus (total Lines 31 + 32 + 33 + 34 + 35 - 36) 578,508,572 538,708,607
38. Total of Lines 29, 30 and 37 616,293,572 576,493,607
39. Total of Lines 28 and 38 10,248,602,844 10,062,971,613
----------------------------------
DETAILS OF WRITE-INS
2501. Accounts payable other 825,104 688,002
2502. Accounts payable insurance companies 4,123,382 2,753,929
2503. Accounts payable investments 94,141,679 83,866,717
2598. Summary of remaining write-ins for Line 25 from overflow page 0 0
2599. Totals (Line 2501 thru 2503 plus 2598) (Line 25 above) 99,090,165 87,308,648
----------------------------------
3101.
3102.
3103.
3198. Summary of remaining write-ins for Line 31 from overflow page 0 0
3199. Totals (Lines 3101 thru 3103 plus 3198) (Line 31 above) 0 0
----------------------------------
3401.
3402.
3403.
3498. Summary of remaining write-ins for Line 34 from overflow page 0 0
3499. Totals (Lines 3401 thru 3403 plus 3498) (Line 34 above) 0 0
----------------------------------
</TABLE>
3
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN
LIFE AND HEALTH INSURANCE COMPANY
SUMMARY OF OPERATIONS
(Excluding Unrealized Capital Gains and Losses)
<TABLE>
<CAPTION>
____________________________________________________________________________________________________________________________________
1 2 3
Current Year Previous Year Previous Year Ending
to Date Year to Date December 31, 1995
------------ ------------- --------------------
<S> <C> <C> <C>
1. Premiums and annuity considerations 355,011,582 360,461,379 423,570,642
1A. Deposit - type funds 530,436,729 594,434,914 803,536,752
2. Considerations for supplementary contracts with life contingencies 13,628 39,085
3. Considerations for supplementary contracts without life contingencies
and dividend accumulations 27,914 5,330 80,804
3A. Coupons left to accumulate at interest 0
4. Net investment income (includes $0 equity in
undistributed income or loss of subsidiaries) 429,544,834 423,034,157 570,009,166
4A. Amortization of interest maintenance reserve (IMR) 2,182,918 3,991,911 4,798,508
5. Commissions and expense allowances on reinsurance ceded 892,888 6,768,041 7,163,791
5A. Reserve adjustments on reinsurance ceded 0
6. Aggregate write-ins for miscellaneous income 0 255,655 334,894
------------- ------------- -------------
7. Totals (Lines 1 to 6) 1,318,110,493 1,388,951,387 1,809,533,642
8. Death benefits 82,427,213 69,165,763 94,786,097
9. Matured endowments (excluding guaranteed annual pure endowments) (270,216) 8,000 24,713
10. Annuity benefits 243,194,027 170,388,391 136,044,378
11. Disability benefits and benefits under accident and health policies 61,836,845 62,726,221 84,175,217
11A. Coupons, guaranteed annual pure endowments and similar benefits 0
12. Surrender benefits and other fund withdrawals 730,615,459 569,664,274 1,008,324,255
13. Group conversions 0
14. Interest on policy or contract funds 349,203 277,481 454,774
15. Payments on supplementary contracts with life contingencies 79,206 57,781 84,219
16. Payments on supplementary contracts without life contingencies
and of dividend accumulations 69,588 64,375 102,191
16A. Accumulated coupons payments 0
17. Increase in aggregate reserves for life and accident and health
policies and contracts (271,944,494) 25,963,676 (27,000,246)
17A. Increase in liability for premium and other deposit funds (62,301,967) 155,099,802 43,393,656
18. Increase in reverse for supplementary contracts without life
contingencies and for dividend and coupon accumulations 41,218 656,582 110,913
------------- ------------- -------------
19. Totals (Lines 8 to 18) 784,096,082 1,054,072,346 1,340,500,167
20. Commissions on premiums and annuity considerations
(direct business only) 9,839,355 12,052,834 16,362,178
21. Commissions and expense allowances on reinsurance assumed 27,211,237 53,084,583 66,988,203
22. General insurance expenses 74,161,893 86,404,033 109,007,526
23. Insurance taxes, licenses and fees, excluding federal income taxes 8,648,385 11,013,531 12,583,267
24. Increases in loading on and cost of collections in excess of
loading on deferred and uncollected premiums (924,825) 674,042 779,092
24A. Net transfers to or (from) Separate Accounts 296,646,626 266,035,341 316,221,731
25. Aggregate write-ins for deductions 989,373 (91,266,364) (91,191,647)
------------- ------------- -------------
26. Totals (Lines 19 to 25) 1,200,668,126 1,392,070,346 1,771,250,517
27. Net gain from operations before dividends to policyholders and
before federal income taxes (Line 7 minus Line 26) 117,442,367 (3,118,959) 38,283,125
28. Dividends to policyholders 236,490 304,395 458,149
------------- ------------- -------------
29. Net gain from operations after dividends to policyholders and
before federal income taxes (Line 27 minus Line 28) 117,205,877 (3,423,354) 37,824,976
30. Federal income taxes incurred (excluding tax on capital gains) 43,285,000 3,911,000 18,221,946
------------- ------------- -------------
31. Net gain from operations after dividends to policyholders and
federal income taxes before realized capital gains or (losses)
(Line 29 minus Line 30) 73,920,877 (7,334,354) 19,603,030
32. Net realized capital gains or (losses) less capital gains tax
and transferred to the IMR (1,545,439) (21,220,798) (608,871)
------------- ------------- -------------
33. Net income (Line 31 plus Line 32) 72,375,438 (28,555,152) 18,994,159
CAPITAL AND SURPLUS ACCOUNT
34. Capital and surplus, December 31, previous year 576,493,607 530,212,288 530,212,288
35. Net income (Line 33) 72,375,438 (28,555,152) 18,994,159
36. Change in net unrealized capital gains or (losses) 24,252,661 88,919,242 96,430,230
37. Change in non-admitted assets and related items (1,692,099) (21,363,878) (17,244,999)
38. Change in liability for reinsurance in unauthorized companies 0
39. Change in reverse on account of change in valuation basis,
(increase) or decrease (802,188)
40. Change asset valuation reserve (1,265,175) (30,993,819) (42,003,870)
41. Change in treasury stock
42. Change in surplus in Separate Accounts Statement 0
43. Capital changes:
a. Paid in 0
b. Transferred to capital (Stock Dividend) 0
c. Transferred to surplus 0
44. Surplus adjustment:
a. Paid in 0
b. Transferred to capital (Stock Dividend) 0
c. Transferred from capital 0
d. Change in surplus as a result of reinsurance 0
45. Dividends to stockholders (53,870,860) 0
46. Aggregate write-ins for gains and losses in surplus 0 0 (9,092,013)
------------- ------------- -------------
47. Net change in capital and surplus for the year (Lines 35 through 46) 39,799,965 8,006,393 46,281,319
------------- ------------- -------------
48. Capital and surplus, as of statement date (Lines 34 + 47) 616,293,572 538,218,681 576,493,607
___________________________________________________________________________________________________________________________________
DETAILS OF WRITE-INS
0601. Miscellaneous income 255,655 334,894
0602.
0603.
0698. Summary of remaining write-ins for Line 6 overflow page 0 0 0
0699. Totals (Lines 0601 thru 0603 plus 0698) (Line 6 above) 0 255,655 334,894
___________________________________________________________________________________________________________________________________
2501. Reinsurance reserves paid for on assumed business (5,012) 1,230,412 1,305,129
2502. Reinsurance recapture 734,665 (92,496,776) (92,496,776)
2503. Recapture reimbursement expense 250,000
2598. Summary of remaining write-ins for Line 25 from overflow page 9,720 0 0
2599. Totals (Lines 2501 thru 2503 plus 2598) (Line 25 above) 989,373 (91,266,364) (91,191,647)
___________________________________________________________________________________________________________________________________
4601. Prior year federal income tax (5,092,013)
4602. Acquisition of Treasury Stock (4,000,000)
4603.
4698. Summary of remaining write-ins for Line 46 from overflow page 0 0 0
4699. Totals (Lines 4601 thru 4603 plus 4698) (Line 46 above) 0 0 (9,092,013)
___________________________________________________________________________________________________________________________________
</TABLE>
4
<PAGE>
CASH FLOW
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
1 2
Current Year Previous Year Ending
to Date December 31, 1995
---------------------------------------
<S> <C> <C>
1. Premiums and annuity considerations......................................................352,907,687...........421,023,688
2. Deposit - type funds.....................................................................530,436,729...........803,536,752
3. Other premiums, considerations and deposits...................................................41,542...............119,889
4. Allowances and reserve adjustments received on reinsurance ceded.............................898,433.............7,195,056
5. Investment income received (excluding realized gains/losses and net of
investment expenses)....................................................................431,276,007...........564,586,931
6. Other income received..............................................................................0...............334,893
---------------------------------------
7. Total (Lines 1 to 6)...................................................................1,315,560,398.........1,796,797,209
8. Life and accident and health claims paid.................................................138,811,582...........175,668,308
9. Surrender benefits and other fund withdrawals paid.......................................730,615,459.........1,008,324,255
10. Other benefits to policyholders paid.....................................................243,951,624...........136,686,549
---------------------------------------
11. Total (Lines 8 to 10)..................................................................1,113,378,665.........1,320,679,112
12. Commissions, other expenses and taxes paid (excluding FIT)...............................119,966,555...........196,781,423
13. Net transfers to or (from) Separate Accounts (operational items only)....................293,856,913...........327,365,121
--------------------------------------
14. Total (Lines 12 to 13)...................................................................413,823,468...........524,146,544
15. Dividends to policyholders paid..............................................................262,187...............395,981
16. Federal income taxes paid (excluding tax on capital gains)................................45,731,792...........(10,509,603)
17. Net increase or (decrease) in policy loans and premium notes...............................2,593,512.............7,283,377
18. Other operating expenses paid................................................................251,949.............1,305,129
--------------------------------------
19. Total (Lines 15 to 18)....................................................................48,839,440............(1,525,116)
--------------------------------------
20. Net cash from operations (Line 7 minus Line 11 minus Line 14 minus Line 19).............(260,481,175)..........(46,503,331)
21. Proceeds from investments sold, matured or repaid:
21.1 Bonds.............................................................................1,872,944,972.........2,842,536,121
21.2 Stocks..............................................................................170,417,571...........353,818,558
21.3 Mortgage loans......................................................................546,551,626...........397,516,025
21.4 Real estate..........................................................................14,192,166............12,036,204
21.5 Collateral loans..............................................................................0.....................0
21.6 Other invested assets................................................................12,687,898............50,379,808
21.7 Net gains or (losses) on cash and short-term investments................................ 1,421............... 33,911
21.8 Miscellaneous proceeds................................................................6,634,007.............6,613,492
--------------------------------------
21.9 Total investment proceeds (Lines 21.1 to 21.8)....................................2,623,429,661.........3,662,934,119
22. Tax on capital gains......................................................................(8,920,562)....................0
--------------------------------------
23. Total (Line 21.9 minus Line 22)........................................................2,632,350,223.........3,662,934,119
24. Other cash provided:
24.1 Capital and surplus paid in...................................................................0.....................0
24.2 Borrowed money..................$0. less amounts repaid...............$0......................0.....................0
24.3 Other sources........................................................................28,002,230.........1,022,526,231
--------------------------------------
24.4 Total other cash provided (Lines 24.1 to 24.3).......................................28,002,230.........1,022,526,231
--------------------------------------
25. Total (Line 20 plus Line 23 plus Line 24.4)............................................2,399,871,278.........4,638,957,019
--------------------------------------
26. Cost of investments acquired (long-term only):
26.1 Bonds.............................................................................1,831,258,810.........2,930,373,569
26.2 Stocks..............................................................................164,260,663...........326,293,794
26.3 Mortgage loans......................................................................383,783,698...........947,849,617
26.4 Real estate...................................................................................0.....................0
26.5 Collateral loans..............................................................................0.....................0
26.6 Other invested assets................................................................42,648,209............37,431,108
26.7 Miscellaneous applications............................................................8,942,351............60,330,074
--------------------------------------
26.8 Total investments acquired (Lines 26.1 to 26.7)...................................2,430,893,731.........4,302,278,162
27. Other cash applied:
27.1 Dividends to stockholders paid.......................................................53,870,860.....................0
27.2 Other applications (net).............................................................18,798,592...........244,943,824
--------------------------------------
27.3 Total other cash applied (Lines 27.1 and 27.2).......................................72,669,452...........244,943,824
--------------------------------------
28. Total (Lines 26.8 and 27.3)............................................................2,503,563,183.........4,547,221,986
--------------------------------------
29. Net change in cash and short-term investments (Line 25 minus Line 28)...................(103,691,905)...........91,735,033
--------------------------------------
RECONCILIATION
30. Cash and short-term investments:
30.1 Beginning of year...................................................................205,266,268...........113,531,235
30.2 End of period (Line 29 plus Line 30.1)..............................................101,574,363...........205,266,268
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
RECONCILIATION OF LEDGER ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
1 2
Current Previous Year Ending
Period December 31, 1995
-------------------------------------
<S> <C> <C> <C>
INCREASES IN LEDGER ASSETS
1. Premiums on life policies and annuity considerations.................................... 237,631,164 260,880,598
1A. Deposit-type funds...................................................................... 530,436,729 803,536,752
2. Accident and health cash premiums, including......$0...policy, membership and
other fees.............................................................................. 115,276,523 160,143,090
3. Considerations for supplementary contracts with life contingencies...................... 13,628 39,084
4. Considerations for supplementary contracts without life contingencies,
including.............$0..disability.................................................... 12,356 70,031
5. Dividends left with the company to accumulate at interest............................... 15,558 10,774
5A. Coupons left with the company to accumulate at interest................................. 0 0
6. Gross investment income................................................................. 438,812,223 579,510,590
7. Increase in capital and paid in or contributed surplus.................................. 0 0
8. Borrowed money gross.............$0..........less amount repaid..............$0......... 0 0
9. Commissions and expense allowances on reinsurance ceded................................. 898,433 7,195,056
9A. Reserve adjustments on reinsurance ceded................................................ 0 0
10. From sale or maturity of ledger assets.................................................. 36,020,460 81,626,856
11. By adjustment in book value of ledger assets............................................ 0 8,459,000
12. Aggregate write-ins for increases in ledger assets...................................... 19,769,136 903,840,231
-----------------------------------
13. Total increases in Ledger Assets (Line 1 through 12)............................... 1,378,886,210 2,805,312,062
-----------------------------------
DECREASES IN LEDGER ASSETS
14. Policy and contract claims:
14.1 Life............................................................................... 79,624,304 93,580,408
14.2 Accident and health................................................................ 59,187,278 82,087,016
15. For annuities with life contingencies, excluding payments on supplementary contracts
(including cash refund payments)........................................................ 243,411,561 136,044,378
16. Premium notes and liens voided by lapse, less....$0...restorations...................... 0 0
17. Surrender benefits and other fund withdrawals........................................... 730,615,459 1,008,324,255
17A. Group conversions....................................................................... 0 0
17B. Interest on policy or contract funds.................................................... 391,269 455,784
18. Dividends to policyholders:
18.1 Life insurance and annuities....................................................... 262,187 395,981
18.2 Accident and health................................................................ 0 0
18A. Coupons, guaranteed annual pure endowments and similar benefits......................... 0 0
-----------------------------------
19. Total Paid Policyholders.............................................................. 1,113,492,058 1,320,887,822
20. Paid for claims on supplementary contracts:
20.1 With life contingencies............................................................ 79,206 84,219
20.2 Without life contingencies......................................................... 69,588 102,191
20.3 Total paid for claims on supplementary contracts (Lines 20.1 plus 20.2)............ 148,794 186,410
21. Dividends and interest thereon held on deposit disbursed during the year................ 0 0
21A. Coupons and interest thereon held on deposit disbursed during the year.................. 0 0
22. Commissions to agents (direct business only):
22.1 Life insurance and annuities, including.....$0..commuted commissions............... 7,742,494 13,065,592
22.2 Accident and health, including..........$0..commuted commissions................... 1,576,681 2,990,533
22.3 Policy, membership and other fees retained by agents............................... 0 0
22.4 Total commissions to agents (Lines 22.1 thru 22.3)................................. 9,319,175 16,056,125
22A. Commissions and expense allowances on reinsurance assumed............................... 25,968,053 63,690,833
23. General expenses........................................................................ 86,769,053 118,504,147
23.1. Taxes, licenses and fees, excluding federal income taxes................................ 7,502,183 11,728,575
23.2. Federal income taxes, including......($8,920,562) on capital gains...................... 36,811,230 (10,509,603)
24. Decrease in capital and paid in or contributed surplus.................................. 0 0
25. Paid stockholders for dividends (cash.....$53,870,860...stock.....$0...)................ 53,870,860 0
26. Borrowed money repaid gross......................$0...less amount borrowed........$0.... 0 0
27. Interest on borrowed money.............................................................. 488 414,507
27A. Net transfers to or (from) Separate Accounts............................................ 293,856,913 327,365,121
28. From sale or maturity of ledger assets.................................................. 42,644,220 118,878,094
29. By adjustment in book value of ledger assets............................................ 98,500 225,918
30. Aggregate write-ins for decreases in ledger assets...................................... 6,764,860 15,346,248
-----------------------------------
31. Total Decreases in Ledger Assets (sum of Lines 19, 20.3, 21, 21A, and
22.4 through 30)................................................................... 1,677,246,387 1,982,774,197
-----------------------------------
RECONCILIATION
32. Amount of ledger assets December 31st of previous year.................................. 8,019,759,267 7,197,221,402
-----------------------------------
33. Increase or (decrease) in ledger assets during the year (Line 13 minus Line 31)......... (298,360,177) 822,537,865
-----------------------------------
34. Total = Leger Assets as of statement date.......................................... 7,721,399,090 8,019,759,267
- ------------------------------------------------------------------------------------------------------------------------------------
DETAILS OF WRITE-INS
1201. Accounts payable insurance companies..................................................... 1,369,452 1,698,795
1202. Fund withheld for unauthorized reinsurance............................................... 190,335
1203. Accounts payable other................................................................... 137,102
1298. Summary of remaining write-ins for Line 12 from overflow page............................ 18,262,582 901,951,101
1299. Totals (Lines 1201 thru 1203 plus 1298) (Line 12 above).................................. 19,769,136 903,840,231
- -----------------------------------------------------------------------------------------------------------------------------------
3001. Accounts payable insurance companies..................................................... 984,665
3002. Prior year Federal tax payment........................................................... 5,092,013
3303. Paid for reinsurance reserves............................................................ (5,012) 1,305,129
3098. Summary of remaining write-ins for Line 30 from overflow page............................ 5,785,207 8,949,106
3099. Totals (Lines 3001 thru 3003 plus 3098) (Line 30 above).................................. 6,764,860 15,346,248
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
EXHIBIT 1
DIRECT PREMIUMS AND DEPOSIT - TYPE FUNDS
- --------------------------------------------------------------------------------------------------------------------------------
1 2 3
Current Year Previous Year Previous Year Ending
to Date Year to Date 12/31
----------------------------------------------------
<S> <C> <C> <C> <C>
1. Industrial Life 0
2. Ordinary Life Insurance 33,638,498 32,007,229 44,474,177
3. Ordinary Individual Annuities 24,436,420 10,611,534 15,447,456
4. Credit Life (Group & Individual) 0
5. Group Life Insurance 49,529,917 52,171,725 67,588,218
6. Group Annuities 12,856,095 10,445,635 11,043,032
7. A & H - Group 43,890,788 49,821,159 66,876,168
8. A & H - Credit (Group & Individual) 0
9. A & H - Other 24,176,203 26,119,231 34,575,699
10. Aggregate of All Other Lines of Business 0 0 0
11. Subtotal 188,527,921 181,176,513 240,004,750
12. Deposit - Type Funds 428,000,914 334,446,416 803,536,752
13. Total 616,528,835 515,622,929 1,043,541,502
- ------------------------------------------------------------------------------------------------------------------------------------
DETAILS OF WRITE-INS
1001.
1002.
1003.
1098. Summary of remaining write-ins for Line 10 from overflow page 0 0 0
1099. Totals (Lines 1001 thru 1003 plus 1098) (Line 10 above) 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE
COMPANY
<TABLE>
<CAPTION>
SCHEDULE A - PART 1
Show all Real Estate Acquired by the Company During the Current Period
- ------------------------------------------------------------------------------------------------------------------------------------
1 2
Date Amount of
Number Location and Description of Property Acquired Name of Vendor Encumbrances Cost to Company
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
804469 Chatsworth, CA - Residential 09/1996 Korte 0 306,370
807350 Lee Summit, MO - Residential 09/1996 Fonseca 0 63,319
876756 Los Angeles, CA - Residential 08/1996 Nakagava 0 551,404
867673 Richmond, CA - Residential 07/1996 Darden 0 212,267
867809 Sacremento, CA - Residential 08/1996 Arno 0 275,920
868250 Newport Beach, CA - Residential 08/1996 Hicks 0 597,948
311010 Houston, TX - Office Building - Prior quarter adjustment 05/1996 Executive Plaza 0 37,916
- ------------------------------------------------------------------------------------------------------------------------------------
9999998 FORECLOSED REAL ESTATE ACQUIRED DURING THE CURRENT PERIOD UNDER CONTRACT FOR SALE 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS 0 2,045,144
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE A - PART 2
Show all Real Estate Sold During the Current Period
- ------------------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Location and Description Book Value At
of Property or Nature Date Cost to Date of Sale Less Profit Loss
Number of Additions and Improvements Sold Name of Purchaser Company Encumbrances on Sale on Sale
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
311010 Houston, TX - Office Building 07/1996 Executive Plaza Corporation 4,587,864 4,587,864 319,761 0
400107 Berkeley-Addison - Office Building 08/1996 First Milvia LLC 1,520,248 1,520,248 0 37,361
400461 Sunnyvale, CA - Office Building 08/1996 12,244,029 4,902,829 1,190,417 0
300089 San Antonio, TX - Shopping Center 09/1996 Macon II Shopping Center 1,020,000 533,354 215,532 0
857607 Northridge, CA - Residential 08/1996 Franklin Shapiro 234,654 234,654 0 0
857597 Walnut, CA - Residential-Add'l
proceeds rec'd on 2nd qtr sale 06/1996 Jen Yam Wu 0 0 4,960 0
- ------------------------------------------------------------------------------------------------------------------------------------
039999 TOTALS 19,606,795 11,778,949 1,730,670 37,361
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE A - Verification
Show all Real Estate Owned
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Previous Year
Current Year Current Year Current Year Ending
as of 3/31 as of 6/30 as of 9/30 12/31
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Book value of real estate owned, previous period 29,980,141 30,939,660 34,485,642 27,151,802
2. Increase, by adjustment 0 0 0 0
3. Cost of acquired 1,025,857 4,998,241 2,045,144 13,550,191
4. Cost of permanent improvements 0 0 0 114,950
5. Profit on sales 0 8,366 1,730,670 2,287,280
- -----------------------------------------------------------------------------------------------------------------------------------
6. TOTAL 31,005,998 35,946,267 38,261,456 43,104,223
7. Decrease, by adjustment 66,338 648,932 206,775 966,000
8. Received on sales 0 719,906 13,472,260 12,130,750
9. Loss on sales 0 91,787 37,361 27,332
10. Book value of real estate owned, end of period 30,939,660 34,485,642 24,545,060 29,980,141
11. Properties occupied by the company less encumbrances 4,882,951 4,850,018 4,850,018 4,915,288
12. Properties acquired in satisfaction of debt less
encumbrances 26,056,709 29,635,624 19,695,041 25,064,853
13. Investment in real estate less encumbrances 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE B - PART 1 - SECTION 1
Long-Term Mortgage Loans held
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Previous Year
Current Year Current Year Current Year Ending
as of 3/31 as of 6/30 as of 9/30 12/31
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Book value of mortgages held, previous period 2,756,890,797 2,746,388,402 2,646,294,178 2,013,375,382
2. Loans in cash or granted on disposal of real estate 82,499,975 69,265,999 67,733,859 217,268,235
3. Cost of mortgages (insured and other) purchased 72,948,510 84,338,590 6,996,765 722,223,382
4. Additional cash loaned on refunded mortgages 0
5. Interest covered by increase in, or refunding of,
mortgages 0
6. Taxes covered by increase in, or refunding of,
mortgages 0
7. Other items covered by increase in, or refunding of,
mortgages 0
8. Accrual of discount on mortgages purchased 295,593 190,601 152,285 1,949,873
9. Transfers 208,713,164
10. Aggregate write-ins for increases 0 0 0 8,358,000
- -----------------------------------------------------------------------------------------------------------------------------------
11. Totals 2,912,634,875 2,900,183,592 2,721,177,087 3,171,888,036
12. Payments on principal including cash on mortgages
refunded 162,053,650 160,985,723 140,241,227 397,516,025
13. Mortgages foreclosed and transferred to real estate 1,025,857 4,998,241 2,045,144 13,550,191
14. Mortgages on properties acquired by deed, in lieu of
foreclosure, and transferred to real estate 0
15. Decrease in book value of mortgages refunded or by
adjustment in book value of mortgages 0
16. Amortization of premium on mortgages purchased 981,966 804,876 791,973 2,516,453
17. Transfers 1,414,570
18. Aggregate write-ins for decreases 2,185,000 87,100,574 3,829,092 0
19. Total deductions 166,246,473 253,889,414 146,907,436 414,997,239
20. Book value of mortgages owned, end of period 2,746,388,402 2,646,294,178 2,574,269,651 2,756,890,797
- -----------------------------------------------------------------------------------------------------------------------------------
DETAILS OF WRITE-INS
1001. Loan loss reserve 8,358,000
1002.
1003.
1098. Summary of remaining write-ins for Line 10 from
overflow page 0 0 0 0
1099. Totals (Lines 1001 thru 1003 plus 1098)
(Line 10 above) 0 0 0 8,358,000
- -----------------------------------------------------------------------------------------------------------------------------------
1801. Loan loss reserve 2,185,000 24,000 272,000
1802. Loan Sale 87,076,574
1803. Transfer to Schedule D 3,557,092
1898. Summary of remaining write-ins for Line 18 from
overflow page 0 0 0 0
1899. Totals (Lines 1801 thru 1803 plus 1898)
(Line 18 above) 2,185,000 87,100,574 3,829,092 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
<TABLE>
<CAPTION>
SCHEDULE B - PART 2 - SECTION 1A
Long-Term Mortgages in Good Standing
- ---------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Current Year Current Year Current Year Previous Year
as of 3/31 as of 6/30 as of 9/30 Ending 12/31
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0399999 Farm Mortgages 27,200,000 30,495,119 44,064,866 10,726,000
- ---------------------------------------------------------------------------------------------------------------------------
0799999 Residential Mortgages 1,209,225,269 1,095,977,719 1,012,946,407 1,251,487,952
- ---------------------------------------------------------------------------------------------------------------------------
1199999 Commercial Mortgages 1,485,681,258 1,490,071,363 1,486,620,543 1,469,081,805
- ---------------------------------------------------------------------------------------------------------------------------
9999999 Total Mortgages in Good Standing 2,722,106,527 2,616,544,201 2,543,631,816 2,731,295,756
- ---------------------------------------------------------------------------------------------------------------------------
SCHEDULE B - PART 2 - SECTION 1B
Long-Term Mortgages in Good Standing with Restructured Terms
- ---------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Current Year Current Year Current Year Previous Year
as of 3/31 as of 6/30 as of 9/30 Ending 12/31
- ---------------------------------------------------------------------------------------------------------------------------
9999999 Total Mortgages in Good Standing
with Restructured Terms 13,691,706 13,855,395 13,908,346 15,764,893
- ---------------------------------------------------------------------------------------------------------------------------
SCHEDULE B - PART 2 - SECTION 2
Long-Term Mortgage Loans upon which Interest is Overdue more than three Months
- ---------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Current Year Current Year Current Year Previous Year
as of 3/31 as of 6/30 as of 9/30 Ending 12/31
- ---------------------------------------------------------------------------------------------------------------------------
0399999 Farm Mortgages 0
- ---------------------------------------------------------------------------------------------------------------------------
0799999 Residential Mortgages 5,537,669 6,326,020 5,840,668 6,445,699
- ---------------------------------------------------------------------------------------------------------------------------
1199999 Commercial Mortgages 0
- ---------------------------------------------------------------------------------------------------------------------------
9999999 Total Mortgages with Interest Overdue
more than three Months 5,537,669 6,326,020 5,840,668 6,445,699
- ---------------------------------------------------------------------------------------------------------------------------
SCHEDULE B - PART 2 - SECTION 3
Long-Term Mortgage Loans in Process of Foreclosure
- ---------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Current Year Current Year Current Year Previous Year
as of 3/31 as of 6/30 as of 9/30 Ending 12/31
- ---------------------------------------------------------------------------------------------------------------------------
0399999 Farm Mortgages 0
- ---------------------------------------------------------------------------------------------------------------------------
0799999 Residential Mortgages 4,858,248 6,888,999 4,567,259 3,202,197
- ---------------------------------------------------------------------------------------------------------------------------
1199999 Commercial Mortgages 194,252 2,679,563 6,321,563 182,252
- ---------------------------------------------------------------------------------------------------------------------------
9999999 Total Mortgages in Process of Foreclosure 5,052,500 9,568,562 10,888,822 3,384,449
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE B - PART 3
Long-Term Mortgages Foreclosed, Properties Transferred to Real Estate
- -----------------------------------------------------------------------------------------------------------------------------------
Current Year Current Year Current Year Previous Year
as of 3/31 as of 6/30 as of 9/30 Ending 12/31
---------------------------------------------------------------------------
1 2 3 4 5 6 7 8
Value Value Value Value
Loss on Trans- Loss on Trans- Loss on Trans- Loss on Trans-
Transfer ferred Transfer ferred Transfer ferred Transfer ferred
to Real to Real to Real to Real to Real to Real to Real to Real
Estate Estate Estate Estate Estate Estate Estate Estate
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0399999 Farm Mortgages 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
0799999 Residential Mortgages 1,025,857 1,474,150 3,481,378 0 1,300,385
- -----------------------------------------------------------------------------------------------------------------------------------
1199999 Commercial Mortgages 4,549,948 4,587,864 973,000 12,249,806
- -----------------------------------------------------------------------------------------------------------------------------------
9999999 Total Mortgages Foreclosed and Transferred
to Real Estate 0 1,025,857 0 6,024,098 0 8,069,242 973,000 13,550,191
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE BA - VERIFICATION
Other Invested Assets Included in Schedule BA
- ---------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Description Current Year Current Year Current Year Previous Year
as of 3/31 as of 6/30 as of 9/30 Ending 12/31
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Book value of other invested assets, beginning
of period 125,893,742 138,125,746 138,712,250 128,611,877
2. Cost of acquisitions, current period 13,779,666 5,351,980 23,516,563 39,812,519
3. Increase by adjustment, current period 3,476,083 2,692,665 3,598,151 12,513,274
4. Profit on disposition 203,171
- ---------------------------------------------------------------------------------------------------------------------------
5. Total 143,149,491 146,170,391 165,826,964 181,140,841
6. Deduct consideration on disposition 0 3,367,992 50,379,808
7. Reductions in investment, current period 3,603,081 5,716,825 0 2,381,411
8. Decrease by adjustment, current period 1,420,664 332,448 557,964 208,441
9. Loss on disposition 1,408,868 2,500,000 2,277,439
10. Book value of other invested assets 138,125,746 138,712,250 159,401,008 125,893,742
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE BA -- PART 2
Show all Long-Term Invested Assets Acquired During the Current Period
- ----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5
Number of Units and Description Date Cost to Company Consideration Paid Name of Vendor
Acquired During Current Year
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIMITED PARTNERSHIPS:
FOOTHILLS PARTNERS II, LP VARIOUS 2,289,375 2,289,375 FOOTHILLS PARTNERS II, LP
FOOTHILLS PARTNERS III, LP VARIOUS 11,200,000 11,200,000 FOOTHILL PARTNERS III, LP
TCW OIL & GAS FUND IV, LP VARIOUS 3,067,000 3,067,000 TCW OIL & GAS FUND IV, LP
GREEN MOUNTAIN ADVISORS, LP 09/17/96 1,019,559 1,019,559 GREEN MOUNTAIN ADVISORS, LP
RELATED CORPORATE PARTNERS IV, LP 09/26/96 3,940,629 3,940,629 RELATED CORPORATE PARTNERS IV, LP
MCDONALD CORPORATE TC FUND IV 08/01/96 2,000,000 2,000,000 MCDONALD CORPORATE TC FUND, IV
- ----------------------------------------------------------------------------------------------------------------------------------
1299999 ANY OTHER CLASS OF INVESTED ASSETS 23,516,563 23,516,563
- ----------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS 23,516,563 23,516,563 X X X
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE BA -- PART 3
Show all Long-Term Invested Assets Disposed of During the Current Period
- ----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7
Date Name of Purchaser Book Value Profit Loss
Number of Units and Description Disposed or Consideration at Date of on on
of Nature of Disposition Sale Disposal Disposal
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LIMITED PARTNERSHIPS:
CIGNA MEZZANINE, LP VARIOUS CIGNA MEZZANINE, LP 404,432
FOOTHILL PARTNERS II, LP VARIOUS FOOTHILL PARTNERS II, LP 1,279,720
FOOTHILL PARTNERS III, LP VARIOUS FOOTHILL PARTNERS III, LP 777,778
WILLIAM BLAIR MEZZANINE VARIOUS WILLIAM BLAIR MEZZAINE, LP 286,000
TCW OIL & GAS FUND IV, LP VARIOUS TCW OIL & GAS FUND IV, LP 620,062
NOTES RECEIVABLE:
MKT, INC 07/30/96 PROVIDIAN CORPORATION 0 2,500,000 2,500,000
- ----------------------------------------------------------------------------------------------------------------------------------
1299999 ANY OTHER CLASS OF INVESTED ASSETS 3,367,992 2,500,000 0 2,500,000
- ----------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS 3,367,992 2,500,000 0 2,500,000
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE C
- -----------------------------------------------------------------------------------------------------------------------------------
1 2 3
Amount Loaned or Amount of Interest
Amount of Loan Repaid Received During Year
9999998 LONG - TERM COLLATERAL LOANS MADE
DURING THE CURRENT PERIOD 0 0 0
9999999 TOTAL - LONG - TERM COLLATERAL LOANS DISCHARGED
IN WHOLE OR IN PART DURING THE CURRENT PERIOD 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE C - PART 4
Collateral Substitution During the Current Period in Collateral Loans Held
- -----------------------------------------------------------------------------------------------------------------------------------
Substitution of Collateral, Viz:
--------------------------------------------------------------------------------------------------------
Name of Actual Collateral Substituted
Number Borrower --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 2 3 4
Description Date Par Value Market Value
- -----------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS 0
- ------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Collateral Released
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5 6 7 8
Description Date Par Value Market Value
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
X X X X X X X X X 0
---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D - PART 1B
Showing the Acquisitions, Dispositions and Non - Trading Activity
During the Current Period for all Bonds and Preferred Stock by Rating Class
- --------------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Statement
Value
Beginning Non-Trading
of Period Acquisitions Dispositions Activity
- --------------------------------------------------------------------------------------------------------------------------------
BONDS
<S> <C> <C> <C> <C>
1. Class 1 2,887,698,500 1,232,258,901 1,287,201,490 12,005,382
2. Class 2 1,254,129,293 3,750,000 10,424,540 (6,978,212)
3. Class 3 207,544,906 4,281,250 10,378,081 (3,885,065)
4. Class 4 194,646,184 10,459,375 11,870,112 3,662,860
5. Class 5 0 0
6. Class 6 6,680,729 0 (6,680,729)
- --------------------------------------------------------------------------------------------------------------------------------
7. Total Bonds 4,550,699,612 1,250,749,526 1,319,874,223 (1,875,764)
- --------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCK
8. Class 1 16,479,017
9. Class 2 11,430,100 2,830,100
10. Class 3 14,410,000 100,000
11. Class 4 1,000,000
12. Class 5 0
13. Class 6 0
- --------------------------------------------------------------------------------------------------------------------------------
14. Total Preferred stock 43,319,117 100,000 2,830,100 0
- --------------------------------------------------------------------------------------------------------------------------------
15. Total Bonds and Preferred stock 4,594,018,729 1,250,849,526 1,322,704,323 (1,875,764)
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
5 6 7 8
Statement Statement Statement Statement
Value Value Value Value
End of First End of Second End of Third End of
Quarter Quarter Quarter Previous Year
- --------------------------------------------------------------------------------------------------------------------------------
BONDS
<S> <C> <C> <C> <C>
1. Class 1 2,824,440,293 2,887,698,500 2,844,761,293 2,961,427,697
2. Class 2 1,286,683,656 1,254,129,293 1,240,476,541 1,208,374,921
3. Class 3 222,152,496 207,544,906 197,563,010 265,768,907
4. Class 4 195,362,366 194,646,184 196,898,307 182,245,645
5. Class 5 0 0 0 0
6. Class 6 0 6,680,729 0 0
- -------------------------------------------------------------------------------------------------------------------------------
7. Total Bonds 4,528,638,811 4,550,699,612 4,479,699,151 4,617,817,170
- -------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCK
8. Class 1 16,479,017 16,479,017 16,479,017 16,479,017
9. Class 2 11,430,100 11,430,100 8,600,100 2,830,100
10. Class 3 7,410,000 14,410,000 14,510,000 7,410,000
11. Class 4 1,000,000 1,000,000 1,000,000 1,000,000
12. Class 5 0 0 0 0
13. Class 6 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
14. Total Preferred stock 36,319,117 43,319,117 40,589,017 27,719,117
- -------------------------------------------------------------------------------------------------------------------------------
15. Total Bonds and Preferred stock 4,564,957,928 4,594,018,729 4,520,288,168 4,645,536,287
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D -- PART 3
Showing all Long-Term Bonds and Stocks Acquired by the Company During the Current Period
- ----------------------------------------------------------------------------------------------------------------------------------
CUSIP Description Date Acquired
- ----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
BONDS
GOVERNMENTS
00253CBX4 AMT 96-C CLASS A2 (FSA) 6830 09/11/1996
31288VSC4 FHLMC POOL #845915 9100 07/18/1996
31288V2X6 FHLMC POOL #846190 9100 08/13/1996
31362J4P7 FNMA ARM POOL #062930 9100 09/19/1996
31362QS67 FNMA ARM POOL #068041 9100 09/19/1996
31362S7C3 FNMA ARM POOL #070191 9100 09/19/1996
31362TDW0 FNMA ARM POOL #070317 9100 09/19/1996
31366QU78 FNMA ARM POOL #155506 9100 06/27/1996
31374AML1 FNMA ARM POOL #308263 9100 09/19/1996
31362TAU7 FNMA ARM POOL #70219 9100 09/19/1996
31375AEV7 FNMA POOL #328748 9100 08/09/1996
000000000 FNMA 15 YR 7.0% 9100 09/09/1996
000000000 FNMA 15 YR 7.5% 9100 09/09/1996
000000000 FNMA 30 YR 8.5% TBA 9100 08/07/1996
000000000 FNMA 30 YR 6.5% 9100 09/09/1996
000000000 FNMA 30 YR 7.0% 9100 09/06/1996
000000000 FNMA 30 YR 7.5% TBA 9100 09/06/1996
000000000 FNMA 30 YR 8.0% 9100 09/09/1996
000000000 FNMA 30 YR 8.0% 9100 09/11/1996
000000000 FNMA 30 YR 8.5% TBA 9100 08/07/1996
126691YG3 INMHE 1996-A CLASS A7 (MBIA) 6820 09/09/1996
59020QAX2 MLCC MTG INVS 96-C (AMBAC) 6830 09/04/1996
83164BLE1 SBA POOL # 501225 9100 08/08/1996
83164BUQ4 SBA POOL # 501491 9100 08/08/1996
83164BS20 SBA POOL 501437 9100 08/08/1996
912810EW4 U. S. TREASURY 9100 08/07/1996
912827Q88 U. S. TREASURY 9100 09/20/1996
90263BDT2 UCFC HEL TR 1996--C CLASS A7 6830 09/16/1996
912810EQ7 US TREASURY BOND 9100 07/26/1996
Canada
110709DL3 PROV OF BRITISH COLUMBIA SER USD2 9100 08/23/1996
0199999 TOTAL GOVERNMENTS
INDUSTRIAL & MISC. (UNAFIL)
126502AC7 CTS HOME EQ LN TR 1996--1 CLASS A (MBIA) 6830 07/22/1996
261597AG3 DRESSER INDUSTRIES DEB 1300 08/23/1996
393505PY2 GRN TR HME IMPRV LN TST 96--D CLASS HIB2 6830 09/17/1996
460146AZ6 INTERNATIONAL PAPER CO NOTES 2600 07/02/1996
480206AH4 JONES INTERCABLE SR SUB DEB 4800 07/10/1996
521684AD2 LEADER FDG 1987--1 CLASS 3Z 9100 08/20/1996
56845JAC3 MARINER HEALTH SERIES B 8000 07/30/1996
638585AU3 NATIONSBANK CORP SUB NOTES 6000 09/18/1996
698891AC2 PARACELSUS HEALTHCARE SR SUB 8000 08/14/1996
74730*9A2 QUAD/GRAPHICS, INC 1996--1 G 2700 09/30/1996
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5
CUSIP Name of Vendor Number Actual Cost Par Value Paid for NAIC
of Shares Accrued Designation
of Stock Interest (a)
and Dividends
- ----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C>
BONDS
GOVERNMENTS
00253CBX4 GREENWICH CAPITAL MARKETS 15,000,000 15,000,000 1Z
31288VSC4 NOMURA SECURITIES INTERNATIONAL 25,033,330 24,274,744 119,341 1
31288V2X6 MORGAN STANLEY 19,260,963 18,677,298 80,177 1
31362J4P7 FINANCIAL NORTHEASTERN CORP 757,633 725,494 4,061 1
31362QS67 FINANCIAL NORTHEASTERN CORP 461,074 440,923 2,468 1
31362S7C3 FINANCIAL NORTHEASTERN CORP 798,549 764,454 4,320 1
31362TDW0 FINANCIAL NORTHEASTERN CORP 1,436,480 1,369,706 7,974 1Z
31366QU78 FINANCIAL NORTHEASTERN CORP 3,321 (3,257) 487 1
31374AML1 FINANCIAL NORTHEASTERN CORP 7,901,049 7,621,208 41,815 1
31362TAU7 FINANCIAL NORTHEASTERN CORP 540,188 517,422 2,913 1
31375AEV7 GREENWICH CAPITAL MARKETS 17,515,830 16,806,793 74,667 1
000000000 GREENWICH CAPITAL MARKETS 7,820,000 8,000,000 1
000000000 NOMURA SECURITIES INTERNATIONAL 7,965,000 8,000,000 1
000000000 NOMURA SECURITIES INTERNATIONAL 5,125,781 5,000,000 1
000000000 GREENWICH CAPITAL MARKETS 7,903,406 8,550,000 1
000000000 NOMURA SECURITIES INTERNATIONAL 13,135,859 13,850,000 1
000000000 NOMURA SECURITIES INTERNATIONAL 16,591,781 17,050,000 1
000000000 NOMURA SECURITIES INTERNATIONAL 4,185,563 4,200,000 1
000000000 GREENWICH CAPITAL MARKETS 9,956,250 10,000,000 1
000000000 NOMURA SECURITIES INTERNATIONAL 9,226,406 9,000,000 1
126691YG3 MERRILL LYNCH 10,000,000 10,000,000 23,875 1Z
59020QAX2 MERRILL LYNCH 15,000,000 15,000,000 1Z
83164BLE1 DUNCAN WILLIAMS 90,217 81,645 435 1
83164BUQ4 DUNCAN WILLIAMS 103,810 93,734 499 1
83164BS20 DUNCAN WILLIAMS 93,769 82,798 465 1
912810EW4 SALOMON BROTHERS 4,528,125 5,000,000 147,527 1
912827Q88 AUTRANET, INC 1,540,547 1,500,000 11,821 1
90263BDT2 PRUDENTIAL-BACHE SECURITIES 3,750,000 3,750,000 605 1Z
912810EQ7 MENDHAM CAPITAL 492,852 550,000 15,677 1
110709DL3 LEHMAN 3,160,395 3,500,000 27,174 1
0199999 209,378,178 209,402,962 566,301
126502AC7 CONTIFINANCIAL SERVICES 10,167,141 10,168,456 65,841 1Z
261597AG3 SALOMON BROTHERS 13,332,195 13,500,000 54,150 1Z
393505PY2 MERRILL LYNCH 5,367,797 5,382,937 1Z
460146AZ6 MERRILL LYNCH 10,000,000 10,000,000 1Z
480206AH4 DONALDSON, LUFKIN & JENRETTE 1,824,375 1,750,000 68,396 4
521684AD2 SCHEDULED ACQUISITION 53,349 53,349 1
56845JAC3 BEAR STEARNS & CO 1,970,000 2,000,000 62,278 4
638585AU3 NATIONSBANK 2,981,520 3,000,000 1Z
698891AC2 NATIONSBANK 1,010,000 1,000,000 833 4Z
74730*9A2 SPP HAMBRO 3,750,000 3,750,000 2
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF
THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D -- PART 3
Showing all Long-Term Bonds and Stocks Acquired by the Company
During the Current Period
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5
CUSIP Description Date Acquired Name of Vendor Number Actual Cost Par Value Paid for NAIC
of Shares Accrued Designation
of Stock Interest and (a)
Dividends
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
857689AA1 STATION CASINOS SR 09/10/1996 MERRILL LYNCH 1,905,000 2,000,000 54,542 4
SUB SER A 7000
870845AC8 SWISS BANK CORP - NY 08/27/1996 MERRILL LYNCH 9,960,600 10,000,000 1Z
6000
87238VAAO TFC RECEIVABLES 95-A 08/13/1996 CHASE MAHATTAN 12,163,204 12,187,961 12,472 1
(FSA) 6820 BANK
90531PAB9 UNION BK. SWITZERLAND- 07/18/1996 UBS (UNION BANK 5,982,540 6,000,000 1
NY SR. SUB. NOTES 6000 OF SWITZERLAND)
SECURITI
913017AS8 UNITED TECH DEBS 3700 09/25/1996 INTER/ACQ 5,651,850 5,000,000 35,243 1
92743@AA5 VININGS INDUSTRIES, INC. 07/23/1996 HEBB AND GITLIN 3,750,000 3,750,000 4
SENIOR NOTES MEXICO
2800
P17304AH2 BANCOMEXT TRUST GTD 07/18/1996 BT SECURITIES 4,281,250 5,000,000 186,667 3
NOTE 9100
0699999 TOTAL INDUSTRIAL & 94,150,821 94,542,703 540,422
MISC. (UNAFIL)
CREDIT TENANT LOANS
09789#AZ7 BOND (CIRCUIT CITY VARIOUS SCHEDULED 152,805 152,805 2
LESSEE) 1993-A CLASS F ACQUISITION
5300
38214*BZ4 GOODWILL CO. (MEIJER 08/01/1996 CONV/ACQ 2,430,000 2,430,000 101,098 1
GTD) SERIES D-1
5400
91705#AA1 URBAN PROPERTIES I 09/01/1996 FIRST UNION 3,550,708 3,550,708 1Z
LOAN#311994 6830 NATIONAL BANK
OF NC
0799999 TOTAL CREDIT TENANT 6,133,512 6,133,512 101,098
LOANS
0999998 SUBTOTAL BONDS - PART 3 309,662,511 310,079,177 1,207,821
0999999 SUMMARY BONDS ACQ/DIS 115,112,852 116,570,000 283,832
IN QTR.
1099999 SUBTOTAL BONDS 424,775,363 426,649,177 1,491,653
PREFERRED STOCKS
INDUSTRIAL & MISC. (UNAFIL)
887315869 TIME WARNER INC SER K 07/01/1996 STOCK 100.000 100,000 P3
4800 DIVIDEND
1399999 TOTAL INDUSTRIAL & 100.000 100,000
MISC (UNAFIL)
1599998 SUBTOTAL PREFERRED 100.000 100,000
STOCK -- PART 3
1599999 SUMMARY PREFERRED
ACQ/DIS IN QTR
1699999 SUBTOTAL PREFERRED 100.000 100,000
STOCKS
COMMON STOCKS
PUBLIC UTILITIES
017411109 ALLEGHENY POWER 07/25/1996 VARIOUS 24,700.000 738,870 L
SYSTEM, INC. 4900
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
14.1
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D - PART 3
Showing all Long-Term Bonds and Stocks Acquired by the Company During the Current Period
- ------------------------------------------------------------------------------------------------------------------------------------
CUSIP Description Date Acquired
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
125896100 CMS ENERGY CORP COMMON 9900 09/17/1996
482734100 KU ENERGY CORP 4900 VARIOUS
501917108 L G & E ENERGY CORP 4900 VARIOUS
771367109 ROCHESTER GAS & ELEC COMMON 9900 07/09/1996
919138107 VALERO ENERGY CORP COMMON 4900 07/10/1996
1799999 TOTAL PUBLIC UTILITIES
INDUSTRIAL & MISC. (UNAFIL)
000915306 ADT LTD COM 3600 09/30/1996
00826M103 AFFINITY TECHNOLOGY GROUP 3600 09/30/1996
011659109 ALASKA AIRGROUP INC 4500 08/19/1996
022197107 ALUMAX INC COMM 1000 09/06/1996
022249106 ALUMINUM COMPANY OF AMERICAN COMPANY 1000 09/06/1996
03839B106 AQUILA GAS PIPELINE CORP 1300 08/14/1996
048396105 ATLANTIC COAST AIRLINES 4500 08/22/1996
087509105 BETHLEHEM STEEL CORP COMMON 9900 09/17/1996
097383103 BOISE CASCADE CORP COMMON 2600 VARIOUS
172172108 CINCINNATI MILACRON COMMON 3500 09/11/1996
204932107 COMPUSA, INC. 5300 09/05/1996
209615103 CONSOLIDATED NATURAL GAS COMP 1300 VARIOUS
231021106 CUMMINS ENGINE CO COMMON 9900 08/05/1996
232809103 CYPRUS AMAX MINERALS CO 1000 VARIOUS
247361108 DELTA AIRLINES COMMON 9900 09/12/1996
250837101 DETROIT DIESEL CORPORATION 5000 09/06/1996
254063100 DILLARD DEPT STORES - CL A COM 5300 VARIOUS
261597108 DRESSER INDUSTRIES COMMON 3600 09/20/1996
315405100 FERRO CORPORATION 2800 VARIOUS
343861100 FLUOR CORP COMMON 1500 VARIOUS
356714402 FREEPORT MCMORAN INC. 1000 VARIOUS
368145108 GAYLORD CONTAINER CORP CL A 2600 VARIOUS
403777105 GYMBOREE CORP 2300 VARIOUS
422204107 HEALTHDYNE INFO ENTERPRISES 8000 09/11/1996
427866108 HERSHEY FOODS CORP 2000 09/30/1996
441560109 HOUGHTON MIFFLIN CO COMMON 2700 VARIOUS
449669100 IMC GLOBAL INC 2800 O9/12/1996
455792101 INDUSTRI-MATEMATIK INTERNATION 3600 09/26/1996
457472108 INLAND STEEL INDUSTRIES INC. COMMON 3300 09/17/1996
459200101 INT'L BUSINESS MACHINES COMMON 3500 09/18/1996
483007100 KAISER ALUMINUM CORP 7300 09/16/1996
482584109 KMART CORP COMMON 5300 VARIOUS
501810105 LCC INTERNATIONAL 4800 09/25/1996
538021106 LITTON INDUSTRIES INC 3700 VARIOUS
543213102 LONGVIEW FIBRE CO COMMON 2600 VARIOUS
553533100 M.S. CARRIERS INC COMMON 4200 09/06/1996
56418H100 MANPOWER INC 7300 09/12/1996
595112103 MICRON TECHNOLOGY 3600 09/30/1996
594918104 MICROSOFT COM 3500 09/18/1996
638044107 NATIONAL SURGERY CENTERS, INC. 8000 09/27/1996
629305103 NN BALL & ROLLER INC 3500 08/08/1996
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Paid for
Number Accrued
of Shares Interest and
CUSIP Name of Vendor of Stock Actual Cost Par Value Dividends
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
125896100 OPPENHEIMER & CO 2,900.000 85,362
482734100 PAINE WEBBER 6,200.000 182,047
501917108 VARIOUS 7,700.000 171,462
771367109 OPPENHEIMER & CO 2,400.000 49,069
919138107 OPPENHEIMER & CO 4,800.000 113,688
1799999 61,100.000 1,340,498
000915306 LEHMAN 2,500.000 46,713
00826M103 MORGAN KEEGAN 2,500.000 26,115
011659109 CANTOR FITZGERALD AND COMPANY 5,500.000 126,143
022197107 CANTOR FITZGERALD AND COMPANY 2,700.000 88,034
022249106 CANTOR FITZGERALD AND COMPANY 2,500.000 156,088
03839B106 CANTOR FITZGERALD AND COMPANY 4,500.000 58,770
048396105 ALEX BROWN 2,200.000 31,925
087509105 CANTOR FITZGERALD AND COMPANY 12,500.000 130,438
097383103 VARIOUS 17,300.000 584,657
172172108 DONALDSON, LUFKIN & JENRETTE 53,300.000 1,095,848
204932107 OPPENHEIMER & CO (1,000.000) (40,484)
209615103 CANTOR FITZGERALD AND COMPANY 7,400.000 396,956
231021106 CANTOR FITZGERALD AND COMPANY 1,300.000 49,478
232809103 VARIOUS 6,400.000 135,934
247361108 CANTOR FITZGERALD AND COMPANY 1,300.000 89,778
250837101 WHEAT FIRST SECURITIES 2,500.000 46,458
254063100 PRUDENTIAL-BACHE SECURITIES 10,000.000 341,538
261597108 OPPENHEIMER & CO 10,000.000 291,850
315405100 PRUDENTIAL-BACHE SECURITIES 48,200.000 1,296,600
343861100 CANTOR FITZGERALD AND COMPANY 5,000.000 319,973
356714402 GOLDMAN SACHS 17,500.000 620,958
368145108 VARIOUS 13,200.000 98,317
403777105 MONTGOMERY SECURITIES 4,900.000 145,763
422204107 MORGAN KEEGAN 2,500.000 13,125
427866108 OPPENHEIMER & CO (1,000.000) (49,846)
441560109 VARIOUS 20,500.000 969,481
449669100 SALOMON BROTHERS 1,300.000 52,403
455792101 ALEX BROWN 14,500.000 148,375
457472108 CANTOR FITZGERALD AND COMPANY 12,500.000 225,750
459200101 OPPENHEIMER & CO (1,000.000) (123,561)
483007100 CANTOR FITZGERALD AND COMPANY 2,500.000 29,700
482584109 VARIOUS 2,800.000 30,843
501810105 DONALDSON, LUFKIN & JENRETTE 500.000 8,000
538021106 VARIOUS 2,500.000 107,463
543213102 VARIOUS 19,000.000 309,878
553533100 MORGAN KEEGAN 2,500.000 52,188
56418H100 MORGAN STANLEY 29,800.000 1,029,888
595112103 PRUDENTIAL-BACHE SECURITIES 2,500.000 76,713
594918104 OPPENHEIMER & CO (1,000.000) (133,438)
638044107 ALEX BROWN 1,300.000 35,100
629305103 WHEAT FIRST SECUITIES 5,000.000 80,625
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
5
NAIC
Designation
CUSIP (a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
125896100 LZ
482734100 L
501917108 L
771367109 L
919138107 L
1799999
000915306 LZ
00826M103 LZ
011659109 L
022197107 L
022249106 LZ
03839B106 L
048396105 LZ
087509105 L
097383103 L
172172108 LZ
204932107 LZ
209615103 L
231021106 LZ
232809103 L
247361108 L
250837101 L
254063100 L
261597108 LZ
315405100 L
343861100 LZ
356714402 LZ
368145108 L
403777105 LZ
422204107 LZ
427866108 LZ
441560109 L
449669100 L
455792101 LZ
457472108 L
459200101 L
483007100 L
482584109 L
501810105 LZ
538021106 L
543213102 LZ
553533100 UZ
56418H100 LZ
595112103 LZ
594918104 LZ
638044107 L
629305103 L
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D -- PART 3
Showing all Long-Term Bonds and Stocks Acquired by the Company During the Current Period
- ----------------------------------------------------------------------------------------------------------------------------------
CUSIP Description Date Acquired
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
655664100 NORDSTROM INC COMMON 5300 08/09/1996
674599105 OCCIDENTAL PETROLEUM COMMON 3500 VARIOUS
695629105 PAINEWEBBER GROUP INC COMMON 6100 VARIOUS
723686101 PIONER HI-BRED INTNATL COMMON 2000 09/24/1996
693457103 PMT SERVICES INC 3600 09/16/1996
737628107 POTLATCH CORP 9900 VARIOUS
69357H106 PRI AUTOMATION INC 3600 09/13/1996
741917108 PRIME HOSPITALITY CORP 9900 09/27/1996
742718109 PROCTOR & GAMBLE 5100 09/27/1996
749084109 QUORUM HEALTH GROUP INC 7300 08/28/1996
779273101 ROUSE COMPANY COMMON 1500 09/12/1996
783755101 RYERSON TULL INC CLASS A 7000 VARIOUS
802176107 SANTA FE PACIFIC GOLD CORP 1000 08/12/1996
806857108 SCHLUMBERGER LTD COMMON 1300 VARIOUS
806882106 SHNITZER STEEL IND INC-A 3300 09/16/1996
859205106 STERLING COMMERCE INC 3600 09/23/1996
870756103 SWIFT TRANSPORTATION CO INC 4200 09/11/1996
87951U109 TELESPECTRUM WORLDWIDE INC 7300 09/27/1996
882508104 TEXAS INSTRUMENTS INC 3600 09/18/1996
887389104 TIMKEN COMPANY COMMON 1000 09/11/1996
902494103 TYSON FOODS INC COMMON 2000 VARIOUS
902549500 UAL CORP 4512 VARIOUS
905530101 UNION CAMP CORPORATION 2600 VARIOUS
908640105 UNION TEXAS PETRO HLDGS INC 1300 09/18/1996
912889201 US WEST MEDIA GROUP 4800 08/22/1996
926913104 VIKING OFFICE PRODS INC 3500 09/04/1996
384802104 W.W. GRAINGER INC COMMON 3600 08/09/1996
980903108 WORKGROUP TECHNOLOGY CORP 3600 09/24/1996
98155K102 WORLDCOM INC 4813 08/27/1996
981811102 WORTHINGTON IND 9900 VARIOUS
985509108 YELLOW CORPORATION COMMON 9900 09/06/1996
989524103 ZILOG INC 9900 09/20/1996
885535104 3COM CORPORATION COMMON 3600 09/24/1996
Brazil
038496105 ARACRUZ CELLULOSE SA 2600 07/09/1996
Canada
453258402 INCO LTD COMMON 9900 08/29/1996
87900H100 TEE-COM ELECTRONICS 3600 08/05/1996
1999999 TOTAL INDUSTRIAL & MISC. (UNAFIL)
2199998 SUBTOTAL COMMON STOCK - PART 3
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5
CUSIP Name of Vendor Number Actual Cost Par Value Paid for NAIC
of Shares Accrued Designation
of Stock Interest (a)
and Dividends
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
655664100 CANTOR FITZGERALD AND COMPANY 3,400.000 126,990 L
674599105 VARIOUS 29,800.000 700,724 L
695629105 VARIOUS 17,000.000 365,567 L
723686101 OPPENHEIMER & CO (900.0000) (52,819) L
693457103 ALEX BROWN 1,300.000 23,563 LZ
737628107 VARIOUS 7,500.000 285,763 LZ
69357H106 SMITH BARNEY 4,000.000 115,250 L
741917108 MONTGOMERY SECURITIES 15,000.000 255,900 L
742718109 OPPENHEIMER & CO (1,000.0000) (95,687) LZ
749084109 GOLDMAN SACHS 12,700.000 313,438 L
779273101 CANTOR FITZGERALD AND COMPANY 4,700.000 115,962 L
783755101 GOLDMAN SACHS 19,000.000 268,441 LZ
802176107 CANTOR FITZGERALD AND COMPANY 2,500.000 32,650 LZ
806857108 VARIOUS 13,800.000 1,180,753 LZ
806882106 GOLDMAN SACHS 7,500.000 194,310 L
859205106 ALEX BROWN 4,800.000 145,085 LZ
870756103 ALEX BROWN 2,300.000 46,000 L
87951U109 ROBINSON HUMPHRIES 2,000.000 39,000 LZ
882508104 OPPENHEIMER & CO (1,900.0000) (98,533) L
887389104 SALOMON BROTHERS 27,800.000 1,044,168 L
902494103 SMITH BARNEY 10,300.000 257,401 LZ
902549500 VARIOUS 13,300.000 653,527 L
905530101 VARIOUS 9,100.000 455,116 LZ
908640105 CANTOR FITZGERALD AND COMPANY 21,000.000 423,885 L
912889201 MORGAN STANLEY 10,000.000 183,100 LZ
926913104 OPPENHEIMER & CO (500.0000) (12,876) L
384802104 CANTOR FITZGERALD AND COMPANY 2,500.000 174,995 L
980903108 ALEX BROWN 9,100.000 51,188 LZ
98155K102 DONALDSON, LUFKIN & JENRETTE 5,000.000 102,501 LZ
981811102 VARIOUS 13,900.000 279,218 L
985509108 VARIOUS 5,000.000 66,713 LZ
989524103 MONTGOMERY SECURITIES 18,800.000 339,428 LZ
885535104 OPPENHEIMER & CO (900.0000) (51,019) LZ
038496105 SALOMON BROTHERS 24,100.000 227,384 L
453258402 VARIOUS 10,800.000 343,853 L
87900H100 OPPENHEIMER & CO 500.000 4,125 LZ
1999999 796,100.000 17,505,601
2199998 857,200.000 18,846,099
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
14.3
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF
THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D -- PART 3
Showing all Long-Term Bonds and Stocks Acquired by the Company
During the Current Period
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5
CUSIP Description Date Acquired Name of Vendor Number Actual Cost Par Value Paid for NAIC
of Shares Accrued Designation
of Stock Interest and (a)
Dividends
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2199999 SUMMARY COMMON ACQ/DIS
IN QTR. 758,060.080 25,265,636
2299999 SUBTOTAL COMMON STOCKS 1,615,260.080 44,111,735
2399999 SUBTOTAL PREFERRED AND
COMMON 1,615,360.080 44,211,735
2499999 TOTAL BONDS AND STOCKS 1,615,360.080 468,987,098 426,649,177 1,491,653
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) For all common stock bearing the NAIC designation "U" provide: the number
of such issues 1.
14.4
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D - PART 4
Showing all Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of by the Company During the Current Period
- -----------------------------------------------------------------------------------------------------------------------------------
1 2
Disposal Number
CUSIP Description Date Name of Purchaser of Shares Consideration
of Stock
- -----------------------------------------------------------------------------------------------------------------------------------
BONDS
GOVERNMENTS
<S> <C> <C> <C> <C> <C>
91203*CC6 FARMERS HOME ADM #073-35274 9100 VARIOUS SCHEDULED REDEMPTION 16,555
83164*PS1 FARMERS HOME LN #01030631094936 9100 VARIOUS SCHEDULED REDEMPTION 3,587
83164*PT9 FARMERS HOME LOAN #500610760450026 9100 VARIOUS SCHEDULED REDEMPTION 20,296
75933*BH6 FED HSY ADM PROJ LN--REILLY 061 9100 VARIOUS SCHEDULED REDEMPTION 6,138
91203*CB8 FED HSY ADM PROJ LN--USGI 19 WYTHE CRE 9100 VARIOUS SCHEDULED REDEMPTION 6,333
91203*CF9 FED HSY ADM PROJ LN--USGI 402 WESTBROOK 9100 VARIOUS SCHEDULED REDEMPTION 11,911
87263@AB3 FED HSY ADM PROJ LN--241 F 9100 VARIOUS SCHEDULED REDEMPTION 4,618
39810#AF1 FED HSY ADM PROJ LN--WOODLAND CREEK #2 9100 VARIOUS SCHEDULED REDEMPTION 21,525
91203*CE2 FED HSY ADM PROJ PC--KENWOOD HILLS # 16 9100 VARIOUS SCHEDULED REDEMPTION 7,302
31288VVK2 FHLMC ARM POOL #846108 9100 VARIOUS SCHEDULED REDEMPTION 184,819
31290KUU1 FHLMC POOL # 555095 9100 VARIOUS SCHEDULED REDEMPTION 353,908
31288VSC4 FHLMC POOL #845915 9100 VARIOUS SCHEDULED REDEMPTION 1,311,888
31288V2X6 FHLMC POOL #846190 9100 09/01/1996 SCHEDULED REDEMPTION 526,323
83164*PU6 FMHA #500080760452753 (FRESH FREEZE INC) 9100 VARIOUS SCHEDULED REDEMPTION 884
31358*AB9 PAIROFF MBS CUSIP 9100 07/12/1996 NOMURA SECURITIES INTERNATIONAL 9,195,469
31358*AB9 PAIROFF MBS CUSIP 9100 07/15/1996 GREENWICH CAPITAL MARKETS 4,805,469
31358*AB9 PAIROFF MBS CUSIP 9100 07/15/1996 NOMURA SECURITIES INTERNATIONAL 14,690,625
31358*AB9 PAIROFF MBS CUSIP 9100 07/15/1996 NOMURA SECURITIES INTERNATIONAL 14,275,781
31358*AB9 PAIROFF MBS CUSIP 9100 07/15/1996 NOMURA SECURITIES INTERNATIONAL 9,220,313
31358*AB9 PAIROFF MBS CUSIP 9100 08/07/1996 GREENWICH CAPITAL MARKETS 10,135,938
31366QU78 FNMA ARM POOL #155506 9100 VARIOUS SCHEDULED REDEMPTION 130,720
31369DHP9 FNMA ARM POOL #207338 9100 VARIOUS SCHEDULED REDEMPTION 135,992
31373TX96 FNMA ARM POOL #303204 9100 VARIOUS SCHEDULED REDEMPTION 107,002
31362SYB5 FNMA ARM POOL #70006 9100 VARIOUS SCHEDULED REDEMPTION 129,673
31365D6P5 FNMA POOL # 125178 9100 VARIOUS SCHEDULED REDEMPTION 272,024
31369MED9 FNMA POOL # 214432 9100 VARIOUS SCHEDULED REDEMPTION 99,073
31370SFZ3 FNMA POOL # 239684 9100 VARIOUS SCHEDULED REDEMPTION 185,362
31370YYN6 FNMA POOL # 245617 9100 VARIOUS SCHEDULED REDEMPTION 217,895
313615MM5 FNMA POOL # 50764 9100 VARIOUS SCHEDULED REDEMPTION 163,060
313615R81 FNMA POOL # 50911 9100 VARIOUS SCHEDULED REDEMPTION 180,683
313615R99 FNMA POOL # 50912 9100 VARIOUS SCHEDULED REDEMPTION 323,124
31370PL90 FNMA POOL #237152 9100 VARIOUS SCHEDULED REDEMPTION 72,784
31375AEV7 FNMA POOL #328748 9100 09/01/1996 SCHEDULED REDEMPTION 440,312
31358KJ58 FNMA 1991--161 CLASS H 9100 VARIOUS SCHEDULED REDEMPTION 264,183
36216KWD7 GNMA POOL # 167244 9100 VARIOUS SCHEDULED REDEMPTION 1,645
362160GD9 GNMA POOL # 179396 PROJ LN 9100 VARIOUS SCHEDULED REDEMPTION 6,663
36220YYM9 GNMA POOL # 292416 PROJ LN 9100 VARIOUS SCHEDULED REDEMPTION 1,479
36204LD24 GNMA POOL #372821 9100 VARIOUS SCHEDULED REDEMPTION 547,802
126691YG3 INMHE 1996-A CLASS A7 (MBIA) 6820 09/25/1996 SCHEDULED REDEMPTION 43,408
87258PAC4 MONEY STORE 1994-1 CLASS A 6820 VARIOUS SCHEDULED REDEMPTION 369,971
76116NCK4 RTC 1991-6 CLASS E 6830 VARIOUS SCHEDULED REDEMPTION 399,851
76116NQL7 RTC 1992-C7 CLASS A1C 6800 VARIOUS SCHEDULED REDEMPTION 2,382,349
83164AXA8 SBA POOL # 500673 9100 VARIOUS VARIOUS 2,183,610
83164AYD1 SBA POOL # 500708 9100 VARIOUS VARIOUS 2,736,140
83164AYY5 SBA POOL # 500727 9100 VARIOUS VARIOUS 1,474,155
83164BAS2 SBA POOL # 500917 9100 VARIOUS SCHEDULED REDEMPTION 6,672
83164BLE1 SBA POOL # 501225 9100 09/01/1996 SCHEDULED REDEMPTION 139
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
3 4 5 6 7 8 9
Book
CUSIP Par Value Actual Cost Value at Profit on Loss on Interest and NAIC
Date of Disposal Disposal Dividends Desig-
Disposal Received nation(a)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
91203*CC6 16,555 15,616 16,555 866 1
83164*PS1 3,587 3,924 3,587 58 1
83164*PT9 20,296 22,097 20,296 449 1
75933*BH6 6,138 5,345 6,138 293 1
91203*CB8 6,333 4,995 6,333 292 1
91203*CF9 11,911 9,804 11,911 554 1
87263@AB3 4,618 4,523 4,618 263 1
39810#AF1 21,525 19,289 21,525 1,145 1
91203*CE2 7,302 6,078 7,302 335 1
31288VVK2 184,819 191,981 184,819 2,796 1
31290KUU1 353,908 359,669 353,908 19,884 1
31288VSC4 1,311,888 1,352,885 1,311,888 4,171 1
31288V2X6 526,323 542,770 526,323 1
83164*PU6 884 1,006 884 3 1Z
31358*AB9 9,000,000 9,171,563 9,171,563 23,906 1Z
31358*AB9 5,000,000 4,798,438 4,798,438 7,031 1Z
31358*AB9 15,000,000 14,803,125 14,803,125 112,500 1Z
31358*AB9 15,000,000 14,418,750 14,418,750 142,969 1Z
31358*AB9 10,000,000 9,346,875 9,346,875 126,563 1Z
31358*AB9 10,000,000 10,043,750 10,043,750 92,188 1Z
31366QU78 130,720 133,314 130,720 1,028 1
31369DHP9 135,992 141,263 135,992 2,996 1
31373TX96 107,002 110,780 107,002 1,953 1
31362SYB5 129,673 133,382 129,673 2,419 1
31365D6P5 272,024 277,379 272,024 14,527 1
31369MED9 99,073 98,208 99,073 4,258 1
31370SFZ3 185,362 188,301 185,362 8,715 1
31370YYN6 217,895 221,736 217,895 9,554 1
313615MM5 163,060 161,724 163,060 7,015 1
313615R81 180,683 179,728 180,683 7,796 1
313615R99 323,124 324,539 323,124 13,906 1
31370PL90 72,784 74,092 72,784 3,227 1
31375AEV7 440,312 458,887 440,312 2,801 1
31358KJ58 264,183 265,587 264,183 3,265 1
36216KWD7 1,645 1,732 1,645 99 1
362160GD9 6,663 6,738 6,663 390 1
36220YYM9 1,479 1,494 1,479 95 1
36204LD24 547,802 555,849 547,802 27,298 1
126691YG3 43,408 43,408 43,408 193 1Z
87258PAC4 369,971 383,383 369,971 6,758 1
76116NCK4 399,851 429,880 399,851 31,281 1
76116NQL7 2,382,349 2,425,539 2,382,349 121,590 1
83164AXA8 2,054,496 2,170,062 2,160,879 22,731 122,585 1
83164AYD1 2,599,577 2,745,802 2,718,160 17,980 153,394 1
83164AYY5 1,386,990 1,465,008 1,479,832 5,677 82,761 1
83164BAS2 6,672 7,173 6,672 394 1
83164BLE1 139 154 139 1
</TABLE>
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF
THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D -- PART 4
Showing all Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed
of by the Company During the Current Period
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1 2
Disposal Number
CUSIP Description Date Name of Purchaser of Shares Consideration
of
Stock
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <S>
83164BLP6 SBA POOL # 501234 9100 VARIOUS SCHEDULED REDEMPTION 7,307
83164BLX9 SBA POOL # 501242 9100 VARIOUS SCHEDULED REDEMPTION 5,619
83164BL27 SBA POOL # 501245 9100 VARIOUS VARIOUS 932,712
83164BM67 SBA POOL # 501281 9100 VARIOUS SCHEDULED REDEMPTION 2,213
83164BN58 SBA POOL # 501312 9100 VARIOUS SCHEDULED REDEMPTION 6,705
83164BPD9 SBA POOL # 501320 9100 VARIOUS SCHEDULED REDEMPTION 270,650
83164BP56 SBA POOL # 501344 9100 VARIOUS SCHEDULED REDEMPTION 137,013
83164BQA4 SBA POOL # 501349 9100 VARIOUS SCHEDULED REDEMPTION 443,251
83164BRY1 SBA POOL # 501403 9100 VARIOUS SCHEDULED REDEMPTION 5,592
83164BRZ8 SBA POOL # 501404 9100 VARIOUS SCHEDULED REDEMPTION 4,832
83164BR47 SBA POOL # 501407 9100 VARIOUS SCHEDULED REDEMPTION 284,839
83164BUF8 SBA POOL # 501482 9100 VARIOUS SCHEDULED REDEMPTION 5,239
83164BUQ4 SBA POOL # 501491 9100 VARIOUS SCHEDULED REDEMPTION 869
83164BV26 SBA POOL # 501533 9100 VARIOUS SCHEDULED REDEMPTION 3,805
83164BW66 SBA POOL # 501569 9100 VARIOUS SCHEDULED REDEMPTION 6,684
83164BXH1 SBA POOL # 501580 9100 VARIOUS SCHEDULED REDEMPTION 1,801
83164BYR8 SBA POOL # 501620 9100 VARIOUS VARIOUS 1,497,046
83164BZ71 SBA POOL # 501666 9100 VARIOUS SCHEDULED REDEMPTION 13,872
83164B3R2 SBA POOL # 501708 9100 VARIOUS SCHEDULED REDEMPTION 27,670
83164B4T7 SBA POOL # 501734 9100 VARIOUS SCHEDULED REDEMPTION 30,484
83164B6U2 SBA POOL # 501783 9100 VARIOUS SCHEDULED REDEMPTION 36,038
83164B7K3 SBA POOL # 501798 9100 VARIOUS SCHEDULED REDEMPTION 9,254
83164CAD3 SBA POOL # 501804 9100 VARIOUS SCHEDULED REDEMPTION 4,531
83164CAE1 SBA POOL # 501805 9100 VARIOUS SCHEDULED REDEMPTION 8,131
83164CAK7 SBA POOL # 501810 9100 VARIOUS SCHEDULED REDEMPTION 6,088
83164CAU5 SBA POOL # 501819 9100 VARIOUS SCHEDULED REDEMPTION 9,965
83164CBA8 SBA POOL # 501833 9100 VARIOUS VARIOUS 1,707,431
83164CBF7 SBA POOL # 501838 9100 VARIOUS SCHEDULED REDEMPTION 732
83164CBN0 SBA POOL # 501845 9100 VARIOUS VARIOUS 2,534,182
83164CBX8 SBA POOL # 501854 9100 VARIOUS VARIOUS 1,384,135
83164CCC3 SBA POOL # 501867 9100 VARIOUS SCHEDULED REDEMPTION 8,676
83164CCE9 SBA POOL # 501869 9100 VARIOUS VARIOUS 1,221,043
83164CCT6 SBA POOL # 501882 9100 VARIOUS SCHEDULED REDEMPTION 2,194
83164CC25 SBA POOL # 501889 9100 VARIOUS SCHEDULED REDEMPTION 321,592
83164CDJ7 SBA POOL # 501905 9100 VARIOUS SCHEDULED REDEMPTION 147,384
83164CDU2 SBA POOL # 501915 9100 VARIOUS SCHEDULED REDEMPTION 12,265
83164CKV2 SBA POOL # 502108 9100 VARIOUS SCHEDULED REDEMPTION 11,803
83164CQC8 SBA POOL # 502251 9100 VARIOUS SCHEDULED REDEMPTION 61,875
83164CUD1 SBA POOL # 502380 9100 VARIOUS SCHEDULED REDEMPTION 88,165
83164C4J7 SBA POOL # 502625 9100 VARIOUS SCHEDULED REDEMPTION 14,678
83164DDR7 SBA POOL # 502812 9100 VARIOUS SCHEDULED REDEMPTION 115,511
83164DFW4 SBA POOL # 502881 9100 VARIOUS SCHEDULED REDEMPTION 39,009
83164DF95 SBA POOL # 502892 9100 VARIOUS SCHEDULED REDEMPTION 252,769
83164DGJ2 SBA POOL # 502901 9100 VARIOUS SCHEDULED REDEMPTION 63,109
83164DHH5 SBA POOL # 502932 9100 VARIOUS SCHEDULED REDEMPTION 1,076,120
83164DKC2 SBA POOL # 502991 9100 VARIOUS SCHEDULED REDEMPTION 55,504
83164DK73 SBA POOL # 503018 9100 VARIOUS SCHEDULED REDEMPTION 37,954
83164DT41 SBA POOL # 503271 9100 VARIOUS SCHEDULED REDEMPTION 8,139
83164DUQ0 SBA POOL # 503291 9100 VARIOUS SCHEDULED REDEMPTION 10,875
83164AGG4 SBA POOL # 500199 9100 VARIOUS SCHEDULED REDEMPTION 225,087
83164AJR7 SBA POOL # 500272 9100 VARIOUS SCHEDULED REDEMPTION 65,935
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
3 4 5 6 7 8 9
Book Profit on Loss on Interest and NAIC
CUSIP Par value Actual Cost Value at Disposal Disposal Dividends Desig-
Date of Received nation(s)
Disposal
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
83164BLP6 7,307 8,284 7,307 482 1
83164BLX9 5,619 6,243 5,619 351 1
83164BL27 835,400 921,029 940,297 7,585 55,912 1
83164BM67 2,213 2,460 2,213 136 1
83164BN58 6,705 7,393 6,705 410 1
83164BPD9 270,650 309,128 270,650 17,207 1
83164BP56 137,013 152,210 137,013 7,538 1
83164BQA4 443,251 492,563 443,251 23,434 1
83164BRY1 5,592 6,067 5,592 348 1
83164BRZ8 4,832 5,369 4,832 302 1
83164BR47 284,839 314,392 284,839 17,745 1
83164BUF8 5,239 6,004 5,239 281 1
83164BUQ4 869 975 869 12 1
83164BY26 3,805 4,211 3,805 238 1
83164BW66 6,684 7,453 6,684 431 1
83164BXH1 1,801 2,013 1,801 712 1
83164BYR8 1,337,072 1,485,822 1,466,589 30,458 92,076 1
83164BZ71 13,872 16,147 13,872 430 1
83164B3R2 27,670 31,074 27,670 1,614 1
83164B4T7 30,484 34,369 30,484 2,000 1
83164B6U2 36,038 38,650 36,038 2,293 1
83164B7K3 9,254 10,411 9,254 3,282 1
83164CAD3 4,531 5,060 4,531 278 1
83164CAE1 8,131 9,233 8,131 549 1
83164CAK7 6,088 6,819 6,088 384 1
83164CAU5 9,965 11,316 9,965 664 1
83164CBA8 1,521,326 1,684,869 1,645,668 61,762 105,546 1
83164CBF7 732 795 732 48 1
83164CBM0 2,293,403 2,534,025 2,392,601 (21,321) 5,840 155,186 1
83164CBX8 1,236,018 1,368,890 1,336,534 47,600 85,239 1
83164CCC3 8,676 9,661 8,676 4,504 1
83164CCE9 1,095,444 1,211,835 1,194,377 26,666 76,508 1
83164CCT6 2,194 2,402 2,194 838 1
83164CC25 321,592 345,710 321,592 19,563 1
83164CDJ7 147,384 163,044 147,384 8,121 1
83164CDU2 12,265 13,721 12,265 822 1
83164CKV2 11,803 12,658 11,803 792 1
83164CQC8 61,875 70,401 61,875 4,164 1
83164CUD1 88,165 97,093 88,165 5,462 1
83164C4J7 14,678 15,440 14,678 919 1
83164DDR7 115,511 122,153 115,511 7,462 1
83164DFW4 39,009 41,301 39,009 2,522 1
83164DF95 252,769 278,994 252,769 16,856 1
83164DGJ2 63,109 65,556 63,109 3,870 1
83164DHH5 1,076,120 1,186,422 1,076,120 58,572 1
83164DKC2 55,504 61,887 55,504 3,164 1
83164DK73 37,954 41,987 37,954 2,870 1
83164DT41 8,139 9,153 8,139 249 1
83164DUQ0 10,875 12,108 10,875 243 1
83164AGG4 225,087 241,967 225,087 13,229 1
83164AJR7 65,935 75,694 65,935 1,669 1
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15.1
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D - PART 4
Showing all Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of by the Company During the Current Period
- ------------------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Disposal Number
CUSIP Description Date Name of Purchaser of Shares Consideration Par Value Actual Cost
of
Stock
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
83164AMD4 SBA POOL #500356 9100 VARIOUS VARIOUS 1,297,790 1,221,811 1,298,938
83164APW9 SBA POOL #500437 9100 VARIOUS VARIOUS 1,073,680 1,010,813 1,073,989
83164A587 SBA POOL #500842 9100 VARIOUS SCHEDULED REDEMPTION 193,919 193,919 206,523
83164BCA9 SBA POOL #500965 9100 VARIOUS SCHEDULED REDEMPTION 8,103 8,103 9,177
83164BPC1 SBA POOL #501319 9100 VARIOUS SCHEDULED REDEMPTION 209,139 209,139 245,908
83164BPJ6 SBA POOL #501325 9100 VARIOUS SCHEDULED REDEMPTION 26,038 26,038 27,819
83164BPK3 SBA POOL #501326 9100 VARIOUS SCHEDULED REDEMPTION 57,729 57,729 61,893
83164BW25 SBA POOL #501565 9100 VARIOUS VARIOUS 2,604,985 2,437,934 2,610,114
83164BXY4 SBA POOL #501595 9100 VARIOUS SCHEDULED REDEMPTION 321,769 321,769 362,095
83164BYW7 SBA POOL #501625 9100 VARIOUS SCHEDULED REDEMPTION 20,220 20,220 21,837
83164B3JO SBA POOL #501701 9100 VARIOUS SCHEDULED REDEMPTION 88,530 88,530 103,198
83164B5A7 SBA POOL #501741 9100 VARIOUS SCHEDULED REDEMPTION 38,191 38,191 41,389
83164B6B4 SBA POOL #501766 9100 VARIOUS SCHEDULED REDEMPTION 69,105 69,105 74,361
83164B7L1 SBA POOL #501799 9100 VARIOUS VARIOUS 1,538,616 1,380,150 1,523,340
83164CAZ4 SBA POOL #501824 9100 VARIOUS SCHEDULED REDEMPTION 25,045 25,045 26,982
83164CBG5 SBA POOL #501839 9100 VARIOUS SCHEDULED REDEMPTION 73,977 73,977 80,172
83164CC82 SBA POOL #501895 9100 VARIOUS SCHEDULED REDEMPTION 33,900 33,900 36,520
83164CDK4 SBA POOL 3501906 9100 VARIOUS SCHEDULED REDEMPTION 8,662 8,662 9,381
83164CE64 SBA POOL #501957 9100 VARIOUS SCHEDULED REDEMPTION 39,799 39,799 42,864
83164CFY2 SBA POOL #501983 9100 VARIOUS SCHEDULED REDEMPTION 18,278 18,278 19,849
83164CGW5 SBA POOL #502013 9100 VARIOUS SCHEDULED REDEMPTION 16,695 16,695 18,093
83164CJU6 SBA POOL #502075 9100 VARIOUS SCHEDULED REDEMPTION 63,677 63,677 69,487
83164CMT5 SBA POOL #502170 9100 VARIOUS SCHEDULED REDEMPTION 36,006 36,006 39,292
83164CM65 SBA POOL #502181 9100 VARIOUS SCHEDULED REDEMPTION 44,766 44,766 47,780
83164CN72 SBA POOL #502214 9100 VARIOUS SCHEDULED REDEMPTION 91,930 91,930 100,663
83164CQ87 SBA POOL #502279 9100 VARIOUS SCHEDULED REDEMPTION 9,858 9,858 10,733
83164CVE8 SBA POOL #502413 9100 VARIOUS SCHEDULED REDEMPTION 1,255,616 1,255,616 1,480,589
83164CYC9 SBA POOL #502507 9100 VARIOUS SCHEDULED REDEMPTION 3,598 3,598 4,006
83164DAD1 SBA POOL #502704 9100 VARIOUS SCHEDULED REDEMPTION 160,730 160,730 174,392
83164DAN9 SBA POOL #502713 9100 VARIOUS SCHEDULED REDEMPTION 22,168 22,168 23,526
83164DCT4 SBA POOL #502782 9100 VARIOUS SCHEDULED REDEMPTION 20,187 20,187 21,599
83164DDH9 SBA POOL #502804 9100 VARIOUS SCHEDULED REDEMPTION 22,726 22,726 24,118
83164DDM8 SBA POOL #502808 9100 VARIOUS SCHEDULED REDEMPTION 300,220 300,220 325,739
83164DEX3 SBA POOL #502850 9100 VARIOUS SCHEDULED REDEMPTION 7,248 7,248 8,236
83164DFM6 SBA POOL #502872 9100 VARIOUS SCHEDULED REDEMPTION 35,347 35,347 37,425
83164DKN8 SBA POOL #503001 9100 VARIOUS SCHEDULED REDEMPTION 14,701 14,701 16,280
83164DKU2 SBA POOL #503007 9100 VARIOUS SCHEDULED REDEMPTION 27,939 27,939 31,723
83164DLB3 SBA POOL #503022 9100 VARIOUS SCHEDULED REDEMPTION 67,451 67,451 75,293
83164DLS6 SBA POOL #503037 9100 VARIOUS SCHEDULED REDEMPTION 56,320 56,320 63,008
83164DL56 SBA POOL #503048 9100 VARIOUS VARIOUS 3,604,678 3,148,561 3,652,331
83164DMA4 SBA POOL #503053 9100 VARIOUS SCHEDULED REDEMPTION 13,099 13,099 14,998
83164DMJ5 SBA POOL #503061 9100 VARIOUS SCHEDULED REDEMPTION 6,426 6,426 7,390
83164DMX4 SBA POOL #503074 9100 VARIOUS SCHEDULED REDEMPTION 18,858 18,858 20,333
83164DTA7 SBA POOL #503245 9100 VARIOUS SCHEDULED REDEMPTION 14,248 14,248 15,693
83164DT90 SBA POOL #503276 9100 VARIOUS SCHEDULED REDEMPTION 10,061 10,061 11,102
83164DUP2 SBA POOL #503290 9100 VARIOUS SCHEDULED REDEMPTION 7,159 7,159 8,120
83164DU72 SBA POOL #503306 9100 VARIOUS SCHEDULED REDEMPTION 7,253 7,253 8,493
83164DVB2 SBA POOL #503310 9100 VARIOUS SCHEDULED REDEMPTION 13,913 13,913 15,337
83164BPU1 SBA POOL 501335 9100 VARIOUS SCHEDULED REDEMPTION 32,881 32,881 38,327
83164BSS3 SBA POOL 501429 9100 VARIOUS SCHEDULED REDEMPTION 74,254 74,254 83,069
83164BS20 SBA POOL 501437 9100 VARIOUS SCHEDULED REDEMPTION 3,128 3,128 3,575
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
5 6 7 8 9
Book Profit on Loss on Interest and NAIC
CUSIP Value at Disposal Disposal Dividends Desig-
Date of Received nation(a)
Disposal
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
83164AMD4 1,294,774 3,016 75,373 1
83164APW9 1,071,398 2,282 61,480 1
83164A587 193,919 10,705 1
83164BCA9 8,103 538 1
83164BPC1 209,139 6,132 1
83164BPJ6 26,038 1,752 1
83164BPK3 57,729 3,883 1
83164BW25 2,598,501 6,484 149,873 1
83164BXY4 321,769 13,373 1
83164BYW7 20,220 1,358 1
83164B3JO 88,530 5,492 1
83164B5A7 38,191 2,352 1
83164B6B4 69,105 5,006 1
83164B7L1 1,519,789 18,828 94,331 1
83164CAZ4 25,045 1,685 1
83164CBG5 73,977 4,976 1
83164CC82 33,900 2,862 1
83164CDK4 8,662 535 1
83164CE64 39,799 2,676 1
83164CFY2 18,278 1,715 1
83164CGW5 16,695 1,122 1
83164CJU6 63,677 3,946 1
83164CMT5 36,006 2,280 1
83164CM65 44,766 5,189 1
83164CN72 91,930 4,746 1
83164CQ87 9,858 622 1
83164CVE8 1,255,616 45,426 1
83164CYC9 3,598 235 1
83164DAD1 160,730 9,215 1
83164DAN9 22,168 1,320 1
83164DCT4 20,187 1,237 1
83164DDH9 22,726 1,353 1
83164DDM8 300,220 19,909 1
83164DEX3 7,248 476 1
83164DFM6 35,347 2,271 1
83164DKN8 14,701 721 1
83164DKU2 27,939 655 1
83164DLB3 67,451 3,575 1
83164DLS6 56,320 3,328 1
83164DL56 3,456,157 148,520 221,679 1
83164DMA4 13,099 813 1
83164DMJ5 6,426 413 1
83164DMX4 18,858 2,808 1
83164DTA7 14,248 471 1
83164DT90 10,061 292 1
83164DUP2 7,159 155 1Z
83164DU72 7,253 173 1
83164DVB2 13,913 301 1
83164BPU1 32,881 788 1
83164BSS3 74,254 3,118 1
83164BS20 3,128 184 1
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D - PART 4
Showing all Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of
by the Company During the Current Period
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1 2
CUSIP DESCRIPTION DISPOSAL NUMBER
DATE NAME OF PURCHASER OF SHARES CONSIDERATION
OF
STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
83164BXF5 SBA POOL 501578 9100 VARIOUS SCHEDULED REDEMPTION 4,155
83164B3F8 SBA POOL 501698 9100 VARIOUS SCHEDULED REDEMPTION 66,372
83164B4D2 SBA POOL 501720 9100 VARIOUS SCHEDULED REDEMPTION 48,911
83164B6R9 SBA POOL 501780 9100 VARIOUS SCHEDULED REDEMPTION 155,476
83164CCY5 SBA POOL 501887 9100 VARIOUS SCHEDULED REDEMPTION 93,757
83164CDG3 SBA POOL 501903 9100 VARIOUS SCHEDULED REDEMPTION 169,590
83164CD65 SBA POOL 501925 9100 VARIOUS SCHEDULED REDEMPTION 117,739
83164CJ36 SBA POOL 502082 9100 VARIOUS SCHEDULED REDEMPTION 231,191
83164CSG7 SBA POOL 502319 9100 VARIOUS SCHEDULED REDEMPTION 45,328
83164CVK4 SBA POOL 502418 9100 VARIOUS SCHEDULED REDEMPTION 20,517
83164C5Y3 SBA POOL 502663 9100 VARIOUS SCHEDLUED REDEMPTION 4,844
83164DP52 SBA POOL 503144 9100 VARIOUS SCHEDULED REDEMPTION 52,882
83164BSV6 SBA POOL#501432 9100 VARIOUS SCHEDULED REDEMPTION 31,164
83164BXE8 SBA POOL#501577 9100 VARIOUS SCHEDULED REDEMPTION 134,233
83164CF89 SBA POOL#501991 9100 VARIOUS SCHEDULED REDEMPTION 252,443
91281OET1 U.S. TREASURY BOND 9100 07/05/1996 AUTRANET, INC. 6,446,250
912827X98 U.S. TREASURY NOTE 9100 08/21/1996 AUTRANET, INC. 5,002,344
91281OEV6 U.S. TREASURY BOND 9100 VARIOUS VARIOUS 3,417,188
912827X80 U.S. TREASURY NOTE 9100 08/21/1996 AUTRANET, INC. 10,182,031
Canada
C69452AL1 PROVINCE OF ONTARIO EURO BOND 9100 08/30/1996 MATURED 5,000,000
0199999 TOTAL GOVERNMENT 136,190,861
PUBLIC UTILITIES
153897AM5 CENTRAL LOUISANA FMB 4900 08/15/1996 CALLED 1,072,200
207597CFO CONN LT & PWR FMB 4900 09/18/1996 GOLDMAN SACHS 4,892,877
0599999 TOTAL PUBLIC UTILITIES 5,965,077
INDUSTRIAL & MISC. (UNAFIL)
857449#VA A.I. LEASING VI (AIRBUS, GTR) 3700 09/15/1996 REDEEMED 56,254
857449#R3 A.I. LEASING VI (AIRBUS, GTR) 3700 09/15/1996 REDEEMED 56,802
857449#T9 A.I. LEASING VI (AIRBUS, GTR) 3700 09/15/1996 REDEEMED 204,096
857449#XO A.I. LEASING VI (AIRBUS, GTR) 3700 09/15/1996 REDEEMED 56,202
00253CAF4 AAMES MTGE TRUST 1994-C CLASS A-1 6830 VARIOUS SCHEDULED REDEMPTION 1,368,314
00794*AA8 ADVANTA MGT (FGIC-GTD) CLASS 1 6830 VARIOUS SCHEDULED REDEMPTION 158,979
053528CA1 AVCO FINANCIAL SVC NOTES 6100 07/10/1996 MORGAN STANLEY 9,395,300
066365AM9 BANKERS TRUST 6000 07/02/1996 MATURED 4,000,000
097023AD7 BOEING CO DEBENTURE 3700 08/27/1996 MERRILL LYNCH 11,297,000
97180*HJO BOEING COMPANY SECURED TRUST CERTIFICA 3700 VARIOUS SCHEDULED REDEMPTION 9,548
97180*HG6 BOEING COMPANY SECURED TRUST CERTIFICA 3700 VARIOUS SCHEDULED REDEMPTION 9,548
97181#CJO BOEING COMPANY SECURED TRUST CERTIFICA 3700 VARIOUS SCHEDULED REDEMPTION 42,761
97181#CK7 BOEING COMPANY SECURED TRUST CERTIFICA 3700 VARIOUS SCHEDULED REDEMPTION 41,629
13644OAN4 CANADIAN PACIFIC LTD DEB NOTES 4000 07/17/1996 COPORATE ACTION 274,850
20033@TR8 CDO, INC (COLUMBIA/HCA HEALTH) 8000 VARIOUS SCHEDULED REDEMPTION 635,461
1565O3AG9 CENTURY COMMUNICATIONS 4800 08/16/1996 DONALDSON, LUFKIN & JENRETTE 1,496,250
1565O3AD6 CENTURY COMMUNICATIONS SR NOTE 4800 07/10/1996 DONALDSON, LUFKIN & JENRETTE 748,125
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
3 4 5 6 7 8 9
Book Profit on Loss on Interest and NAIC
CUSIP Par Value Actual Cost Value at Disposal Disposal Dividends Desig-
Date of Received nation(a)
Disposal
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
83164BXF5 4,155 4,643 4,155 241 1
83164B3F8 66,372 72,346 66,372 4,130 1
83164B4D2 48,911 52,824 48,911 3,208 1
83164B6R9 155,476 169,663 155,476 10,396 1
83164CCY5 93,757 102,664 93,757 5,724 1
83164CDG3 169,590 179,713 169,590 10,201 1
83164CD65 117,739 124,913 117,739 7,923 1
83164CJ36 231,191 245,423 231,191 14,702 1
83164CSG7 45,328 48,351 45,328 2,821 1
83164CVK4 20,517 21,492 20,517 1,278 1
83164C5Y3 4,844 5,394 4,844 570 1
83164DP52 52,882 59,966 52,882 2,587 1
83164BSV6 31,164 33,345 31,164 2,339 1
83164BXE8 92,871 151,986 134,233 3,096 1
83164CF89 252,443 268,573 252,443 9,189 1
91281OET1 6,000,000 6,478,125 6,478,081 31,831 117,218 1
912827X98 5,000,000 4,965,625 4,968,995 33,349 71,311 1
91281OEV6 3,500,000 3,848,750 3,845,397 4,828 433,037 245,466 1
912827X80 10,000,000 9,939,063 9,939,936 242,096 192,425 1
C69452AL1 5,000,000 5,126,150 5,000,000 425,000 1
0199999 135,046,883 137,916,194 136,119,716 768,404 866,002 3,443,677
153897AM5 1,000,000 1,072,500 1,070,458 1,742 104,271 1
207597CFO 4,950,000 5,234,625 5,010,758 117,881 440,619 2
0599999 5,950,000 6,307,125 6,081,215 1,742 117,881 544,890
857449#VA 56,254 56,254 56,254 5,050 1
857449#R3 56,802 56,802 56,802 5,091 1
857449#T9 204,096 204,096 204,096 18,341 1
857449#XI 56,202 56,202 56,202 5,060 1
00253CAF4 1,368,314 1,361,259 1,368,314 71,237 1
00794*AA8 158,979 156,048 158,979 10,047 1
053528CA1 10,000,000 9,965,800 9,968,320 573,020 356,667 1
066365AM9 4,000,000 4,072,280 4,000,000 330,000 1
097023AD7 10,000,000 11,382,600 11,325,225 28,225 911,458 1
97180*HJO 9,548 9,548 9,548 1,175 1
97180*HG6 9,548 9,548 9,548 1,175 1
97181#CJO 42,761 42,761 42,761 5,287 1Z
97181#CK7 41,629 41,629 41,629 5,153 1Z
13644OAN4 274,850 2
20033@TR8 635,461 635,461 635,461 33,534 1
1565O3AG9 1,500,000 1,503,750 1,503,527 7,277 138,542 3
1565O3AD6 750,000 720,938 730,068 18,057 67,031 3
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15.3
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF
THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D -- PART 4
Showing all Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed
of by the Company During the Current Period
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1 2
Disposal Number
CUSIP Description Date Name of Purchaser of shares Consideration
of
Stock
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
172921ZF8 CITICORP 1993-4 CLASS A4 6830 VARIOUS SCHEDULED REDEMPTION 104,473
178779AL8 CITYSCAPE 96-2 CLASS A1 6830 VARIOUS SCHEDULED REDEMPTION 720,565
190394B#2 COAST SVGS & LOAN CL A VAR RT MTGE PASS 6830 07/01/1996 REDEEMED 270,205
20033RCX5 COMDISCO INC MTN 6100 09/01/1996 MATURED 2,500,000
21076#AX9 CONTIMORTGAGE HOME EQ TR 94-2 CL A1 6830 VARIOUS SCHEDULED REDEMPTION 1,012,374
21076#AY7 CONTIMORTGAGE HOME EQ TR 94-2 CL A2 6830 VARIOUS SCHEDULED REDEMPTION 4,961,853
21076#AN1 CONTIMORTGAGE 1993-3 CLASS A1 6830 VARIOUS SCHEDULED REDEMPTION 326,760
21076#AP6 CONTIMORTGAGE 1993-3 CLASS A2 6830 VARIOUS SCHEDULED REDEMPTION 904,793
21076#AS0 CONTIMORTGAGE 1994-1 CLASS A2 6830 VARIOUS SCHEDULED REDEMPTION 329,209
21076#AV3 CONTIMORTGAGE 1994-1 CLASS A5 6830 VARIOUS SCHEDULED REDEMPTION 601,031
21076#BB6 CONTIMORTGAGE 1994-2 CLASS A5 6830 VARIOUS SCHEDULED REDEMPTION 474,270
211907AK6 CONTINENTAL S&L 1989-1 CLASS A 6830 VARIOUS SCHEDULED REDEMPTION 19,277
125924AF7 CPS AUTO 95-2 CLASS A (FSA) 6820 VARIOUS SCHEDULED REDEMPTION 1,211,786
125924AG5 CPS AUTO 95-3 CLASS A (FSA) 6820 VARIOUS SCHEDULED REDEMPTION 862,327
126502D#7 CTS HM EQ TR 1995-1 CLASS A 6830 VARIOUS SCHEDULED REDEMPTION 2,489,191
126502E*0 CTS HM EQ TR 95-2 CLASS A 6830 VARIOUS SCHEDULED REDEMPTION 1,289,489
126502AC7 CTS HOME EQ LN TR 1996-1 CLASS A (MBIA) 6830 VARIOUS SCHEDULED REDEMPTION 172,759
23855*AB4 DAVERS CORP (TALAGEN-GTR) 6300 VARIOUS SCHEDULED REDEMPTION 111,661
97181#CL5 DELTA AIR LINES SEC LOAN CTFS TRUST AGR 4500 VARIOUS SCHEDULED REDEMPTION 6,128
97180*YQ5 DELTA AIR LINES SEC LOAN CTFS TRUST AGR 4500 VARIOUS SCHEDULED REDEMPTION 6,138
97180*YP7 DELTA AIR LINES SEC LOAN CTFS TRUST AGR 4500 VARIOUS SCHEDULED REDEMPTION 6,137
247635C#0 DELTA FUNDING 1992-1 CLASS A1 6830 VARIOUS SCHEDULED REDEMPTION 503,912
24763#AA1 DELTA FUNDING 95-1 A-1 6830 VARIOUS SCHEDULED REDEMPTION 3,896,209
25466#BL3 DISCOVER CREDIT MTN SER II 6200 07/23/1996 MATURED 2,000,000
25466KAJ8 DISCOVER 1994-2 CLASS A 6820 07/17/1996 UBS (UNION BANK OF SWITZERLAND) SECURITI 15,128,906
26055HAA9 DOW CHEM 1992 CLASS A1 2800 VARIOUS SCHEDULED REDEMPTION 826,023
29445#AB4 EC HOLDINGS II 90, CLASS A2 6820 08/19/1996 REDEEMED 974,144
292564AA9 ENCYCLO BRIT 94-1, CLASS A (FSA) 6820 07/16/1996 REDEEMED 1,422,012
297600AC2 ETHAN ALLEN INTR SR NOTES 5100 09/10/1996 CIBC WOOD GUNDY INC. 1,020,000
269288AB2 EZ COMMUNICATIONS SR SUB NOTES 4800 08/12/1996 BT SECURITIES 1,010,000
31945RAP8 FCMT 94-J CLASS A 6820 09/09/1996 UBS (UNION BANK OF SWITZERLAND) SECURITI 18,047,813
31945RAV5 FCMT 95-P, CLASS A 6820 09/05/1996 UBS (UNION BANK OF SWITZERLAND) SECURITI 10,023,438
30243#AK6 FHA TITLE I SERIES 1993-1 CLASS A 6830 VARIOUS SCHEDULED REDEMPTION 1,569,866
30243#AL4 FHA TITLE I SERIES 1994-1 CLASS A 6830 VARIOUS SCHEDULED REDEMPTION 331,299
31846LAL0 FIRST ALLIANCE MTG 1994-3 CLASS A1 6830 VARIOUS SCHEDULED REDEMPTION 993,617
319635AB4 FIRST CITY 94 CLASS A (CAPMAC) 6820 VARIOUS SCHEDULED REDEMPTION 506,045
338473AD3 FLAGSTAR CORP SR NOTES 5800 07/24/1996 DONALDSON, LUFKIN & JENRETTE 3,520,000
361575AA1 GDV FINL 1989-A CLASS A 6830 VARIOUS SCHEDULED REDEMPTION 90,040
361957AC7 MATTERHORN USA 6800 07/17/1996 MERRILL LYNCH 5,884,180
361957AG8 MATTERHORN USA 6800 07/17/1996 MERRILL LYNCH 9,139,258
37045*AC3 GENERAL MOTORS 1992-A3 5000 VARIOUS SCHEDULED REDEMPTION 1,279,074
37867#AA8 GLENFED MTGE 1988 CLASS 5 6830 VARIOUS SCHEDULED REDEMPTION 29,751
361916AK5 GNS FINANCE CORP SR SUB NOTES 7000 09/30/1996 MENDHAM CAPITAL 265,000
44967#AD7 IMC HM EQ TR 95-1 CLASS A-2 6830 VARIOUS SCHEDULED REDEMPTION 427,812
504195AB4 LA QUINTA MOTOR 7000 09/17/1996 DONALDSON, LUFKIN & JENRETTE 2,050,000
539830AF6 LOCKHEED MARTIN 3700 08/23/1996 SALOMON BROTHERS 15,093,300
55262NAH9 MBNA 1993-4 CLASS A 6820 09/06/1996 LEHMAN 13,044,688
559079AA6 MEGELLAN HEALTH SERVICES, INC. 8000 09/12/1996 DONALDSON, LUFKIN & JENRETTE 5,224,625
58983*DK2 MERIDIAN TRUST(BOEING-LESSEE) EQUIP TRU 3700 VARIOUS SCHEDULED REDEMPTION 46,480
59020QAW4 MLMI 1996-B CLASS A 6820 VARIOUS VARIOUS 15,004,669
87258VBG1 MONEY STORE HE 95-B A9 (MBIA) 6830 VARIOUS VARIOUS 1,608,097
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
3 4 5 6 7 8 9
Par Book Interest NAIC
CUSIP Value Actual Value at Profit on Loss on and Desig-
Cost Date of Disposal Disposal Dividends nation(a)
Disposal Received
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
172921ZF8 104,473 104,994 104,473 4,121 1
178779AL8 720,565 720,227 720,565 7,407 1Z
190394B#2 270,205 271,218 270,878 673 10,658 1Z
20033RCX5 2,500,000 2,509,625 2,500,000 168,000 2
21076#AX9 1,012,374 1,010,166 1,012,374 24,056 1
21076#AY7 4,961,853 4,931,260 4,961,853 113,774 1Z
21076#AN1 326,760 326,670 326,760 12,124 1
21076#AP6 904,793 877,021 904,793 35,526 1
21076#AS0 329,209 327,107 329,209 6,445 1Z
21076#AV3 601,031 600,902 601,031 24,889 1
21076#BB6 474,270 474,234 474,270 20,182 1
211907AK6 19,277 18,892 19,277 947 1
125924AF7 1,211,786 1,211,941 1,211,786 51,939 1
125924AG5 862,327 862,420 862,327 36,791 1
126502D#7 2,489,191 2,488,901 2,489,191 144,730 1Z
126502E*0 1,289,489 1,289,250 1,289,489 70,030 1
126502AC7 172,759 172,738 172,759 1,707 1Z
23855*AB4 111,661 111,661 111,661 9,316 1
97181#CL5 6,128 6,128 6,128 578 2Z
97180*YQ5 6,138 6,138 6,138 598 2
97180*YP7 6,137 6,137 6,137 598 2
247635C#0 503,912 500,780 503,912 31,090 1
24763#AA1 3,896,209 3,895,883 3,896,209 189,124 1
25466#BL3 2,000,000 2,056,560 2,000,000 146,000 2
25466KAJ8 15,000,000 15,134,180 15,131,428 2,522 164,717 1
26055HAA9 826,023 826,023 826,023 62,792 1
29445#AB4 974,144 1,077,647 1,008,431 34,287 101,825 1
292564AA9 1,422,012 1,422,012 1,422,012 63,983 1
297600AC2 1,000,000 1,002,188 1,001,049 18,951 87,009 3
269288AB2 1,000,000 957,500 958,116 51,884 71,500 4
31945RAP8 18,000,000 18,016,875 18,012,828 34,984 782,201 1
31945RAV5 10,000,000 10,003,906 10,003,184 20,253 427,071 1
30243#AK6 1,569,866 1,569,542 1,569,866 63,048 1
30243#AL4 331,299 331,278 331,299 14,983 1
31846LAL0 993,617 990,667 993,617 53,096 1
319635AB4 506,045 506,045 506,045 23,022 1Z
338473AD3 4,000,000 3,997,500 3,998,166 478,166 375,050 4
361575AA1 90,040 92,858 90,040 3,345 1
361957AC7 5,875,000 5,875,000 5,875,000 9,180 35,792 1
361957AG8 9,125,000 9,125,000 9,125,000 14,258 55,592 1
37045*AC3 1,279,074 1,279,074 1,279,074 107,194 1
37867#AA8 29,751 28,934 29,751 1,622 1
361916AK5 250,000 245,000 246,244 18,756 24,281 2
44967#AD7 427,812 427,677 427,812 22,900 1
504195AB4 2,000,000 1,986,840 1,986,575 63,425 156,731 3
539830AF6 15,000,000 14,926,200 14,926,374 166,926 377,813 1
55262NAH9 13,000,000 13,044,180 13,036,082 8,606 429,955 1
559079AA6 4,900,000 4,928,500 4,922,453 302,172 508,375 4
58983*DK2 46,480 46,480 46,480 5,813 1Z
59020QAW4 14,999,999 14,999,999 14,999,999 4,670 63,841 1Z
87258VBG1 1,604,686 1,606,334 1,606,306 1,791 21,962 1
</TABLE>
15.4
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
1 2
Disposal Number
CUSIP Description Date Name of Purchaser of Shares Consideration
of Stock
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
65716#AA2 NASL 1995 CLASS A 6800 VARIOUS SCHEDULED REDEMPTION 6,150,197
668367AD7 NORTHWEST STL & WIR SR NOTES 3300 09/09/1996 MORGAN STANLEY 1,927,500
69372NAA2 PACE SPY FUNDING 1996-A CLASS A 6830 VARIOUS SCHEDULED REDEMPTION 542,412
74434TXD4 PHMS 93-46 CLASS A2 6830 VARIOUS SCHEDULED REDEMPTION 1,640,384
74156WAA4 PRIME FINANCE 95-2 CLASS A1 6820 VARIOUS SCHEDULED REDEMPTION 731,447
79548KBF4 SALOMON MTG 1991--1CLASS B1 6830 VARIOUS SCHEDULED REDEMPTION 391,060
85916*AA2 SBBLT 96-A CLASS A (FSA) 6820 VARIOUS SCHEDULED REDEMPTION 578,667
812387*C4 SEARS MTN 5300 07/11/1996 MATURED 1,000,000
81234FAQ7 SEARS 91-D CLASS A 6820 09/15/1996 SCHEDULED REDEMPTION 7,500,000
817320AD6 SEQUA CORP SR NOTE 3700 07/17/1996 BEAR STEARNS & CO 5,080,000
863573JU6 SMART 1992-6A CLASS AF 6830 VARIOUS SCHEDULED REDEMPTION 684,093
843590AC4 SOUTHERN PACIFIC 95-2 A2 (MBIA) 6830 VARIOUS SCHEDULED REDEMPTION 563,961
35083@AA2 THE FOUR C'S (AHOLD) TOPS MARKETS LESSEE 5400 VARIOUS SCHEDULED REDEMPTION 41,003
872905AD6 TMAC MTG SEC 1986-1 CLASS D 6830 VARIOUS SCHEDULED REDEMPTION 93,965
87260*AB8 TMI FHA TITLE I 1994-2 CLASS A (MBIA) 6830 VARIOUS SCHEDULED REDEMPTION 406,068
87258VBU0 TMS 95-C CLASS A6 (MBIA) 6830 VARIOUS SCHEDULED REDEMPTION 648,725
892790L#1 TRAILER TRAIN COND SALE AGR 6100 07/15/1996 MATURED 55,094
893512AB9 TRANSAMER OCCID LIFE 1989-1 CLASS A2 6800 VARIOUS SCHEDULED REDEMPTION 2,532,745
90263BAD0 UCFC 1993-C A2 (FGIC) 6830 VARIOUS SCHEDULED REDEMPTION 1,288,833
90263BCT3 UCFC 95-D A6 (FGIC) 6830 VARIOUS SCHEDULED REDEMPTION 437,705
902909H#0 USA FINANCIAL SERVICES SECOND SUB NOTE 6100 VARIOUS SCHEDULED REDEMPTION 142,857
92933*AA7 WSGP INTL DIVERSIFIED FNDG CRP CBO SER 8 6820 07/17/1996 FIRST BOSTON CORP 6,611,082
316817AA3 57TH STREET ASSOCIATES (NIKE) 2300 VARIOUS SCHEDULED REDEMPTION 20,165
0699999 TOTAL INDUSTRIAL & MISC. (UNAFIL) 218,259,766
CREDIT TENANT LOANS
18762*AC4 CLINTON HLDG(LINCOLN NAT-GTR) COLLATERA 6300 09/01/1996 SCHEDULED REDEMPTION 33,802
235863AA5 DANBURY BLDG-UNION CARBIDE LSE CLASS A1 2800 VARIOUS SCHEDULED REDEMPTION 147,088
38214*CD2 GOODWILL CO (MEIJER-GTD) SERIES D-2 5400 08/01/1996 BUY 2,430,000
398037H@3 GREYHOUNDL&F (BRANCH BK-LESSEE) SECURED N 6000 VARIOUS SCHEDULED REDEMPTION 85,568
46362*AA3 IRVINE CORP(AVCO FIN'L-LESSEE) COLLATERA 6100 VARIOUS VARIOUS 116,361
012441KH3 KEY CORP -- LESSEE, ALBANY INDUSTRIAL 6000 VARIOUS SCHEDULED REDEMPTION 9,513
69662*AA2 PALM COAST MTG(SHERATON-GTR) SENIOR SE 7000 VARIOUS SCHEDULED REDEMPTION 65,908
74954#AA5 RFC HOLDINGS, INC 1993 CLASS A 6000 VARIOUS SCHEDULED REDEMPTION 237,710
81371@AA7 SECURED LEASE FINANCE CORPORATION II 5300 VARIOUS SCHEDULED REDEMPTION 34,141
821046AA7 SHEEPSHEAD BAY ASSOC (ROYAL AHOLD, GTR) 5400 VARIOUS SCHEDULED REDEMPTION 50,400
94403*AF3 WAWA INC SECURED NOTES 5400 VARIOUS SCHEDULED REDEMPTION 69,886
0799999 TOTAL CREDIT TENANT LOANS 3,280,378
0999998 SUBTOTAL BONDS -- PART 4 363,696,082
0999999 SUMMARY BONDS ACQ/DIS IN QTR. 115,351,630
1099999 SUBTOTAL BONDS 479,047,712
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
3 4 5 6 7 8 9
Book Profit on Loss on Interest and NAIC
Value at Disposal Disposal Dividends Desig-
CUSIP Description Par Value Actual Cost Date of Received nation(a)
Disposal
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
65716#AA2 NASL 1995 CLASS A 6,150,197 6,150,197 6,150,197 282,878 1Z
668367AD7 NORTHWEST STL & WIR SR NOTES 2,000,000 1,987,500 1,991,377 63,877 140,916 4
69372NAA2 PACE SPY FUNDING 1996-A CLASS A 542,412 542,360 542,412 17,488 1Z
74434TXD4 PHMS 93-46 CLASS A2 1,640,384 1,676,780 1,640,384 40,250 1Z
74156WAA4 PRIME FINANCE 95-2 CLASS A1 731,447 731,345 731,447 23,236 1
79548KBF4 SALOMON MTG 1991--1CLASS B1 391,060 391,060 391,060 24,524 1
85916*AA2 SBBLT 96-A CLASS A (FSA) 578,667 576,895 578,667 6,548 1Z
812387*C4 SEARS MTN 1,000,000 1,027,100 1,000,000 33,914 1
81234FAQ7 SEARS 91-D CLASS A 7,500,000 7,621,950 7,500,000 581,250 1
817320AD6 SEQUA CORP SR NOTE 5,000,000 5,250,000 5,156,862 76,862 370,295 3
863573JU6 SMART 1992-6A CLASS AF 684,093 678,107 684,093 36,922 1
843590AC4 SOUTHERN PACIFIC 95-2 A2 (MBIA) 563,961 563,961 563,961 22,653 1
35083@AA2 THE FOUR C'S (AHOLD) TOPS MARKETS LESSEE 41,003 41,003 41,003 2,034 2
872905AD6 TMAC MTG SEC 1986-1 CLASS D 93,965 99,602 93,965 4,206 1
87260*AB8 TMI FHA TITLE I 1994-2 CLASS A (MBIA) 406,068 406,027 406,068 21,420 1
87258VBU0 TMS 95-C CLASS A6 (MBIA) 648,725 648,725 648,725 26,187 1
892790L#1 TRAILER TRAIN COND SALE AGR 55,094 56,411 55,094 6,542 1
893512AB9 TRANSAMER OCCID LIFE 1989-1 CLASS A2 2,532,745 2,505,831 2,532,745 129,288 1
90263BAD0 UCFC 1993-C A2 (FGIC) 1,288,833 1,288,027 1,288,833 52,783 1
90263BCT3 UCFC 95-D A6 (FGIC) 437,705 437,705 437,705 17,343 1
902909H#0 USA FINANCIAL SERVICES SECOND SUB NOTE 142,857 142,857 142,857 14,684 1
92933*AA7 WSGP INTL DIVERSIFIED FNDG CRP CBO SER 8 6,680,729 6,680,729 6,680,729 69,647 169,852 1
316817AA3 57TH STREET ASSOCIATES (NIKE) 20,165 20,416 20,165 933 1
0699999 TOTAL INDUSTRIAL & MISC. (UNAFIL) 217,051,099 219,027,856 218,860,407 733,913 1,334,556 9,207,137
CREDIT TENANT LOANS
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
3 4 5 6 7 8 9
Book Profit on Loss on Interest and NAIC
Value at Disposal Disposal Dividends Desig-
CUSIP Description Par Value Actual Cost Date of Received nation(a)
Disposal
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
18762*AC4 CLINTON HLDG(LINCOLN NAT-GTR) COLLATERA 33,802 33,802 33,802 4,936 1
235863AA5 DANBURY BLDG-UNION CARBIDE LSE CLASS A1 147,088 147,088 147,088 7,714 2
38214*CD2 GOODWILL CO (MEIJER-GTD) SERIES D-2 2,430,000 2,430,000 2,430,000 222,421 1
398037H@3 GREYHOUNDL&F (BRANCH BK-LESSEE) SECURED N 85,568 85,568 85,568 6,710 1
46362*AA3 IRVINE CORP(AVCO FIN'L-LESSEE) COLLATERA 116,361 116,361 116,361 9,511 1
012441KH3 KEY CORP -- LESSEE, ALBANY INDUSTRIAL 9,513 9,513 9,513 398 1Z
69662*AA2 PALM COAST MTG(SHERATON-GTR) SENIOR SE 65,908 65,908 65,908 5,130 2Z
74954#AA5 RFC HOLDINGS, INC 1993 CLASS A 237,710 237,710 237,710 11,422 1
81371@AA7 SECURED LEASE FINANCE CORPORATION II 34,141 34,099 34,141 1,626 2
821046AA7 SHEEPSHEAD BAY ASSOC (ROYAL AHOLD, GTR) 50,400 50,400 50,400 3,078 2
94403*AF3 WAWA INC SECURED NOTES 69,886 69,886 69,886 5,644 2
0799999 TOTAL CREDIT TENANT LOANS 3,280,378 3,280,336 3,280,378 278,590
0999998 SUBTOTAL BONDS -- PART 4 361,328,360 366,531,511 364,341,716 1,504,059 2,318,439 13,474,294
0999999 SUMMARY BONDS ACQ/DIS IN QTR. 116,570,000 115,112,852 115,111,692 393,220 158,895 357,633
1099999 SUBTOTAL BONDS 477,898,360 481,644,363 479,453,408 1,897,279 2,477,334 13,831,927
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D - PART 4
Showing all Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of by the Company During the Current Period
- -------------------------------------------------------------------------------------------------------------------------------
Disposal Number
CUSIP Description Date Name of Purchaser of Shares Consideration
of Stock
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PREFERRED STOCKS
PUBLIC UTILITIES
United States
882850472 TEXAS UTILITIES PFD STOCK 4900 08/21/1996 SALOMON BROTHERS 26,000.000 2,853,500
1199999 TOTAL PUBLIC UTILITIES 26,000.000 2,853,500
1599998 SUBTOTAL PREFERRED STOCKS-PART 4 26,000.000 2,853,500
1599999 SUMMARY PREFERRED ACQ/DIS IN QTR
1699999 SUBTOTAL PREFERRED STOCK 26,000.000 2,853,500
COMMON STOCKS
PUBLIC UTILITIES
017411109 ALLEGHENY POWER SYSTEM, INC. 4900 08/16/1996 DONALDSON, LUFKIN & JENRETTE 400.000 12,291
100599109 BOSTON EDISON COMPANY COMMON 4900 07/25/1996 VARIOUS 6,300.000 146,363
125896100 CMS ENERGY CORP COMMON 9900 09/30/1996 OPPENHEIMER & CO 300.000 9,132
209111103 CON EDISON OF NEW YORK COMMON 4900 07/02/1996 0PPENHEIMER & CO 4,100.000 120,446
482734100 KU ENERGY CORP 4900 07/01/1996 OPPENHEIMER & CO 11,000.000 327,404
501917108 L G & E ENERGY CORP 4900 08/20/1996 PRUDENTIAL-BACHE SECURITIES 2,100.000 49,222
694308107 PACIFIC GAS & ELEC COMMON 9900 08/23/1996 MORGAN STANLEY 8,600.000 179,586
879403780 TELEFONOS DE MEXICO-CL L ADR 9900 07/25/1996 SMITH BARNEY 2,400.000 73,354
1799999 TOTAL PUBLIC UTILITIES 78,000.000 917,798
BANKS, TRUST, & INS. COS.
001055102 AFLAC INC 6300 07/01/1996 ROBINSON HUMPHRIES 2,400.000 72,607
048798102 ATLANTIC REALTY TRUST INC 9900 07/16/1996 DEAN WITTER REYNOLDS, INC 1,036.960 8,814
313091100 FED ONE BANCORP INC 6000 09/16/1996 CHICAGO CORPORATION 2,900.000 44,588
416704104 HARTFORD STEAM BOILER INSPEC 6300 09/24/1996 CHICAGO CORPORATION 6,900.000 306,921
444859102 HUMANA INC. 6300 07/25/1996 VARIOUS 20,300.000 375,139
574061107 MARYLAND FEDERAL BANCORP 6000 09/19/1996 CHICAGO CORPORATION 1,200.000 39,826
903290104 USF & G CORP 6300 07/02/1996 VARIOUS 49,400.000 822,508
1899999 TOTAL BANKS, TRUST, & INS. COS. 129,536.960 1,670,403
INDUSTRIAL & MISC. (UNAFIL)
007903107 ADVANCED MICRO DEVICES COMMON 3500 07/25/1996 VARIOUS 4,800.000 54,760
011659109 ALASKA AIRGROUP INC. 4500 09/24/1996 PAINE WEBBER 500.000 10,282
022197107 ALUMAX INC. COMM 1000 07/19/1996 VARIOUS 2,600.000 77,816
</TABLE>
<TABLE>
<CAPTION>
Book Profit on Loss on Interest and NAIC
CUSIP Par Value Actual Cost Value at Disposal at Disposal Dividends Desig-
Date of Received nation(a)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
882850472 2,830,100 2,830,100 23,400 155,740 P2
1199999 2,830,100 2,830,100 23,400 155,740
1599998 2,830,100 2,830,100 23,400 155,740
1599999
1699999 2,830,100 2,830,100 23,400 155,740
017411109 11,974 11,974 317 L
100599109 162,528 162,528 16,165 3,807 L
125896100 8,831 8,831 301 LZ
209111103 116,584 116,584 3,862 L
482734100 332,783 332,783 5,379 9,460 L
</TABLE>
<TABLE>
<CAPTION>
Book Profit on Loss on Interest and NAIC
CUSIP Par Value Actual Cost Value at Disposal at Disposal Dividends Desig-
Date of Received nation(a)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
501917108 40,982 40,982 8,240 1,582 L
694308107 254,216 254,216 74,630 12,642 L
879403780 80,544 80,544 7,190 1,110 L
1799999 1,008,442 1,008,442 12,720 103,364 28,601
001055102 70,632 70,632 1,975 L
048798102 7,291 7,291 1,524 LZ
313091100 44,588 44,588 1,175 L
416704104 329,162 329,162 22,241 10,830 L
444859102 509,154 509,154 134,015 L
574061107 36,150 36,150 3,676 582 L
903290104 798,458 798,458 61,667 6,073 2,325 L
1899999 1,795,435 1,795,435 68,842 162,329 14,912
007903107 88,188 88,188 33,428 L
011659109 11,468 11,468 1,185 L
022197107 85,925 85,925 42 8,150 L
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30,1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D - PART 4
Showing all Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of by the Company During the Current Period
- -----------------------------------------------------------------------------------------------------------------------------------
1 2
Disposal Number
CUSIP Description Date Name of Purchaser of Shares Consideration
of
Stock
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
022615108 ALZA CORP COMMON 8000 08/19/1996 CANTOR FITZGERALD AND COMPANY 34,700.000 925,287
023551104 AMERADA HESS CORP COMMON 1300 08/27/1996 VARIOUS 19,500.000 1,051,903
025816109 AMERICAN EXPRESS CO. COMMON 9900 07/23/1996 CANTOR FITZGERALD AND COMPANY 9,700.000 408,591
001765106 AMR CORP COMMON 2800 08/05/1996 CANTOR FITZGERALD AND COMPANY 9,600.000 798,744
036115103 ANNTAYLOR STORES INC 5300 07/10/1996 ALEX BROWN 4,700.000 73,331
03839B106 AQUILA GAS PIPELINE CORP 1300 07/10/1996 VARIOUS 2,500.000 33,161
042476101 ARMSTRONG WORLD INDS INC 5200 08/05/1996 VARIOUS 4,900.000 288,661
04622E109 ASTEA INTL INC 3600 07/03/1996 ALEX BROWN 1,000.000 8,375
087509105 BETHLEHEM STEEL CORP COMMON 9900 07/25/1996 VARIOUS 16,700.000 175,660
087851101 BEVERLY ENTERPRISES COMMON 9900 07/25/1996 VARIOUS 9,500.000 95,923
097383103 BOISE CASCADE CORP COMMON 2600 07/25/1996 VARIOUS 6,600.000 226,491
099541203 BORDEN CHEM & PLASTIC-COM UT 2800 09/06/1996 CANTOR FITZGERALD AND COMPANY 2,400.000 23,856
099709107 BORDERS GROUP INC 5300 07/25/1996 ALEX BROWN 1,800.000 58,391
115885105 BROWNING-FERRIS INDUSTRIES 2800 07/19/1996 VARIOUS 22,700.000 553,326
158525105 CHAMPION INTERNATIONAL COMMON 2600 07/12/1996 CANTOR FITZGERALD AND COMPANY 7,600.000 323,318
172172108 CINCINNATI MILACRON COMMON 3500 09/17/1996 CANTOR FITZGERALD AND COMPANY 4,600.000 100,166
204015101 COMMUNITY PSYCHIATRIC COMMON 8000 07/25/1996 VARIOUS 39,900.000 344,479
205300106 COMPUTER PRODUCTS INC 3600 08/05/1996 ROBINSON HUMPHRIES 2,400.000 43,497
209237106 CONSOLIDATED FREIGHTWAYS COMM 9900 07/19/1996 CANTOR FITZGERALD AND COMPANY 8,300.000 172,460
209759109 CONSOLIDATED PAPERS INC 2600 07/15/1996 VARIOUS 5,300.000 274,503
237688106 DATA GENERAL CORP COMMON 9900 07/25/1996 VARIOUS 7,300.000 80,334
238124101 DATASTREAM SYSTEMS INC 3600 07/02/1996 ROBINSON HUMPHRIES 2,400.000 83,400
242361103 DEAN FOODS CO 2000 08/06/1996 VARIOUS 9,700.000 243,984
233203884 DFA GLOBAL BOND PORTFOLIO 9900 07/22/1996 DIMENSIONAL FUND ADVISORS 29,025.373 304,276
254063100 DILLARD DEPT STORES-CL A COM 5300 08/08/1996 CANTOR FITZGERALD AND COMPANY 1,900.000 64,721
260543103 DOW CHEMICAL CO 2800 07/01/1996 CANTOR FITZGERALD AND COMPANY 500.000 38,936
264830100 DUN & BRADSTREET CORP 2700 07/19/1996 VARIOUS 2,800.000 167,526
29444G107 EQUITABLE COMPANIES INC 6300 08/05/1996 VARIOUS 37,100.000 929,928
294549100 EQUITABLE RESOURCES INC 1300 08/13/1996 VARIOUS 11,500.000 321,666
305914103 FALCON DRILLING COMPANY INC 1300 07/03/1996 VARIOUS 26,800.000 634,726
356714402 FREEPORT MCMORAN INC 1000 07/03/1996 VARIOUS 9,700.000 364,174
368145108 GAYLORD CONTAINER CORP CL A 2600 08/07/1996 MORGAN STANLEY 14,700.000 111,207
373200203 GEORGIA GULF CORP 2800 07/18/1996 GOLDMAN SACHS 5,000.000 146,572
093671105 H&R BLOCK COMMON 7300 08/08/1996 VARIOUS 600.000 16,593
405173105 HAGGAR CORP 5300 07/25/1996 CANTOR FITZGERALD AND COMPANY 4,900.000 68,638
422704106 HECLA MINING CO 1000 08/05/1996 VARIOUS 7,400.000 51,042
806407102 HENRY SCHEIN INC 8000 07/02/1996 ALEX BROWN 1,300.000 50,050
441560109 HOUGHTON MIFFLIN CO COMMON 2700 07/19/1996 CANTOR FITZGERALD AND COMPANY 700.000 34,519
455792101 INDUSTRI-MATEMATIK INTERNATION 3600 09/30/1996 ALEX BROWN 4,800.000 57,960
457472108 INLAND STEEL INDUSTRIES INC COMMON 3300 08/07/1996 CANTOR FITZGERALD AND COMPANY 2,400.000 43,398
483007100 KAISER ALUMINUM CORP 7300 07/31/1996 VARIOUS 17,000.000 201,103
485170104 KANSAS CITY SOUTHERN INDS 4000 08/30/1996 CANTOR FITZGERALD AND COMPANY 2,400.000 97,653
487836108 KELLOGG CORPORATION 5100 07/23/1996 OPPENHEIMER & CO (400.000) (29,974)
493503106 KEYSTONE INTERNATIONAL INC 5100 08/08/1996 CANTOR FITZGERALD AND COMPANY 10,300.000 197,775
482584109 KMART CORP COMMON 5300 09/30/1996 OPPENHEIMER & CO 700.000 7,089
50540R102 LABORATORY CORPORATION 8000 07/25/1996 SMITH BARNEY 1,800.000 11,817
538021106 LITTON INDUSTRIES INC 3700 07/12/1996 CANTOR FITZGERALD AND COMPANY 11,600.000 542,182
501921100 LTV CORP 3300 07/25/1996 CANTOR FITZGERALD AND COMPANY 15,200.000 183,743
56418H100 MANPOWER INC 7300 09/13/1996 MORGAN STANLEY 7,300.000 257,521
580037109 MCDERMOTT INTERNATIONAL COMMON 9900 08/06/1996 CANTOR FITZGERALD AND COMPANY 4,900.000 99,192
605288208 MISSISSIPPI CHEMICAL CORP 2800 08/07/1996 MERRILL LYNCH 5,800.000 123,830
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
3 4 5 6 7 8 9
Book Profit on Loss on Interest and NAIC
CUSIP Par Value Actual Cost Value at Disposal Disposal Dividends Designation(a)
Date of Received
Disposal
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
022615108 990,261 990,261 64,975 L
023551104 1,101,068 1,101,068 70 49,236 2,205 L
025816109 440,962 440,962 32,371 2,182 L
001765106 907,325 907,325 108,580 L
036115103 96,524 96,524 23,194 L
03839B106 31,400 31,400 1,761 22 L
042476101 278,570 278,570 10,092 320 L
04622E109 25,088 25,088 16,713 L
087509105 243,990 243,990 68,330 L
087851101 114,570 114,570 18,647 L
097383103 264,626 264,626 38,135 735 L
099541203 34,744 34,744 10,888 140 L
099709107 59,733 59,733 1,342 L
115885105 699,333 699,333 146,006 3,858 L
158525105 357,350 357,350 34,032 379 L
172172108 94,576 94,576 5,590 LZ
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
3 4 5 6 7 8 9
Book Profit on Loss on Interest and NAIC
CUSIP Par Value Actual Cost Value at Disposal Disposal Dividends Designation(a)
Date of Received
Disposal
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
204015101 476,713 476,713 132,233 L
205300106 46,200 46,200 2,704 L
209237106 201,428 201,428 28,968 350 L
209759109 293,752 293,752 19,249 2,352 L
237688106 105,376 105,376 25,041 L
238124101 77,163 77,163 6,238 L
242361103 233,207 233,207 10,777 475 L
233203884 290,254 290,254 14,022 5,309 U
254063100 68,797 68,797 4,076 L
260543103 40,468 40,468 1,531 375 LZ
264830100 174,427 174,427 6,900 625 LZ
29444G107 890,660 890,660 39,947 679 3,500 L
294549100 344,392 344,392 22,726 4,986 L
305914103 647,540 647,540 8,050 20,864 L
356714402 343,857 343,857 20,318 LZ
368145108 145,967 145,967 34,760 L
373200203 169,191 169,191 766 23,385 288 L
093671105 20,969 20,969 4,376 224 L
405173105 74,114 74,114 5,476 125 L
422704106 59,678 59,678 8,636 L
806407102 45,500 45,500 4,550 L
441560109 33,555 33,555 965 L
455792101 48,000 48,000 9,960 LZ
457472108 61,435 61,435 18,037 120 L
483007100 238,010 238,010 36,907 L
485170104 110,799 110,799 13,146 240 L
487836108 (29,925) (29,925) 49 L
493503106 223,281 223,281 25,505 2,091 L
482584109 7,830 7,830 740 L
50540R102 22,608 22,608 10,791 L
538021106 537,884 537,884 12,093 7,794 L
501921100 216,250 216,520 32,507 456 L
56418H100 252,288 252,288 5,233 LZ
580037109 103,194 103,194 4,002 1,225 L
605288208 126,950 126,950 3,120 1,740 L
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE D - PART 4
Showing all Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of by the Company During the Current Period
- -----------------------------------------------------------------------------------------------------------------------------------
1 2
Disposal Number
CUSIP Description Date Name of Purchaser of Shares Consideration
of
Stock
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
617410105 MORGAN KEEGAN, INC. 6200 07/25/1996 VARIOUS 8,600.000 113,746
629853102 NALCO CHEMICAL CO 2800 07/25/1996 VARIOUS 4,900.000 153,221
637640103 NATIONAL SEMICONDUCTOR CORP COMMON 9900 07/25/1996 SMITH BARNEY 2,400.000 31,655
650111107 NEW YORK TIMES CO CL A 2700 08/13/1996 VARIOUS 32,000.000 1,015,291
629305103 NN BALL & ROLLER INC 3500 08/09/1996 WHEAT FIRST SECURITIES 3,500.000 60,626
655664100 NORDSTROM INC COMMON 5300 08/09/1996 CANTOR FITZGERALD AND COMPANY 3,300.000 126,754
670006105 NOVELL INC COMMON 9900 07/24/1996 ALEX BROWN 4,800.000 49,502
673662102 OAKLEY INC 5100 07/01/1996 ALEX BROWN 3,300.000 144,845
674599105 OCCIDENTAL PETROLEUM COMMON 3500 08/20/1996 VARIOUS 1,800.000 43,436
695629105 PAINEWEBBER GROUP INC COMMON 6100 07/01/1996 VARIOUS 8,800.000 194,990
718507106 PHILLIPS PETROLEUM COMMON 1300 07/02/1996 DONALDSON, LUFKIN & JENRETTE 5,000.000 210,318
693457103 PMT SERVICES INC 3600 09/27/1996 VARIOUS 800.000 16,138
693475105 PNC FINANCIAL CORP COMMON 9900 07/03/1996 VARIOUS 41,000.000 1,280,962
69357H106 PRI AUTOMATION INC 3600 09/17/1996 SMITH BARNEY 200.000 6,200
749084109 QUORUM HEALTH GROUP INC 7300 08/20/1996 GOLDMAN SACHS 3,100.000 79,409
751452103 RAMCO-GERSHENSON PROPERTIES 6100 07/16/1996 CANTOR FITZGERALD AND COMPANY 2,075.000 32,218
759930100 RENAL CARE GROUP INC 8000 08/05/1996 EQUITABLE 2,400.000 87,715
779273101 ROUSE COMPANY COMMON 1500 09/18/1996 OPPENHEIMER & CO 400.000 10,226
78388N107 SCB COMPUTER TECHNOLOGY INC 7300 07/23/1996 ROBINSON HUMPHRIES 1,500.000 26,125
806857108 SCHLUMBERGER LTD COMMON 1300 09/12/1996 GOLDMAN SACHS 2,400.000 211,323
815807102 SEGUE SOFTWARE INC 3600 07/02/1996 ALEX BROWN (100.0000) (1,250)
806882106 SHNITZER STEEL IND INC-A 3300 08/05/1996 GOLDMAN SACHS 9,600.000 268,163
829226109 SINCLAIR BROADCAST GROUP-A 4800 07/01/1996 ALEX BROWN 900.000 38,700
844895102 SOUTHWEST GAS CORP 1300 08/16/1996 SMITH BARNEY 18,200.000 320,366
789374105 ST FRANCIS CAPITAL CORP 6000 09/11/1996 CHICAGO CORPORATION 1,500.000 38,813
792848103 ST. PAUL BANCORP, INC. 6000 08/28/1996 CHICAGO CORPORATION 2,900.000 78,155
855030102 STAPLES, INC. COMMON 5300 07/01/1996 ALEX BROWN 2,300.000 44,563
861589109 STONE CONTAINER CORP COM 2600 07/23/1996 VARIOUS 9,700.000 135,722
870756103 SWIFT TRANSPORTATION CO INC 4200 07/18/1996 ALEX BROWN 1,600.000 32,467
879335107 TELEDYNE INC COMMON 3600 08/07/1996 OPPENHEIMER & CO 3,000.000 115,646
88033G100 TENET HEALTHCARE CORP 8062 07/25/1996 VARIOUS 4,800.000 97,396
886547108 TIFFANY & COMPANY 5300 07/02/1996 ALEX BROWN 900.000 66,732
887389104 TIMKEN COMPANY COMMON 1000 09/24/1996 CANTOR FITZGERALD AND COMPANY 7,300.000 283,252
902494103 TYSON FOODS INC COMMON 2000 09/24/1996 MORGAN STANLEY 600.000 16,125
902549500 UAL CORP 4512 07/31/1996 CANTOR FITZGERALD AND COMPANY 4,700.000 238,420
908640105 UNION TEXAS PETROL HLDGS INC 1300 07/12/1996 VARIOUS 35,800.000 716,990
912707106 US SURGICAL CORP 8000 07/26/1996 PRUDENTIAL-BACHE SECURITIES 2,400.000 82,353
912889201 US WEST MEDIA GROUP 4800 07/02/1996 CANTOR FITZGERALD AND COMPANY 2,400.000 44,490
90337T101 USX - US STEEL GROUP INC COMMON 3300 07/25/1996 CANTOR FITZGERALD AND COMPANY 2,400.000 60,617
233203686 VA INTERNATIONAL SMALL PORTFOLIO 9900 07/30/1996 DIMENSIONAL FUND ADVISORS 71,138.452 774,300
233203678 VA SHORT-TERM FIXED PORTFOLIO 9900 07/05/1996 DIMENSIONAL FUND ADVISORS 163,792.331 1,639,065
233203710 VA SMALL VALUE PORTFOLIO 9900 07/11/1996 DIMENSIONAL FUND ADVISORS 107,466.361 1,155,442
927914101 VISION CORP 3600 07/01/1996 ALEX BROWN 1,300.000 46,175
384802104 W.W. GRAINGER INC COMMON 3600 09/16/1996 LEHMAN 400.000 28,775
929394104 WABAN INC. 5100 07/25/1996 VARIOUS 7,300.000 144,232
949702104 WELLMAN INC 2800 08/13/1996 CANTOR FITZGERALD AND COMPANY 1,400.000 28,965
957674104 WESTERN ATLAS INC 1300 07/02/1996 CANTOR FITZGERALD AND COMPANY 4,900.000 292,996
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
3 4 5 6 7 8 9
Actual Book Profit Loss Interest NAIC
CUSIP Description Par Value Cost Value at on on and Desig-
Date of Disposal Disposal Dividends nation(a)
Disposal Received
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
617410105 MORGAN KEEGAN, INC. 6200 111,244 111,244 3,000 496 1,204 L
629853102 NALCO CHEMICAL CO 2800 148,519 148,519 5,311 610 2,250 L
637640103 NATIONAL SEMICONDUCTOR CORP COMMON 9900 39,144 39,144 7,489 L
650111107 NEW YORK TIMES CO CL A 2700 1,037,720 1,037,720 7,018 29,446 1,483 L
629305103 NN BALL & ROLLER INC 3500 56,439 56,439 4,188 200 L
655664100 NORDSTROM INC COMMON 5300 151,913 151,913 25,159 412 L
670006105 NOVELL INC COMMON 9900 71,340 71,340 21,838 L
673662102 OAKLEY INC 5100 142,625 142,625 2,221 L
674599105 OCCIDENTAL PETROLEUM COMMON 3500 43,083 43,083 401 48 L
695629105 PAINEWEBBER GROUP INC COMMON 6100 181,428 181,428 13,562 1,055 L
718507106 PHILLIPS PETROLEUM COMMON 1300 196,550 196,550 13,768 L
693457103 PMT SERVICES INC 3600 14,501 14,501 1,638 LZ
693475105 PNC FINANCIAL CORP COMMON 9900 1,225,363 1,225,363 55,599 16,380 L
69357H106 PRI AUTOMATION INC 3600 5,650 5,650 550 L
749084109 QUORUM HEALTH GROUP INC 7300 67,676 67,676 11,734 L
751452103 RAMCO-GERSHENSON PROPERTIES 6100 31,308 31,308 910 430 L
759930100 RENAL CARE GROUP INC 8000 77,100 77,100 10,615 L
779273101 ROUSE COMPANY COMMON 1500 9,777 9,777 449 L
78388N107 SCB COMPUTER TECHNOLOGY INC 7300 33,249 33,249 7,124 LZ
806857108 SCHLUMBERGER LTD COMMON 1300 205,044 205,044 6,279 LZ
815807102 SEGUE SOFTWARE INC 3600 (2,950) (2,950) 1,700 LZ
806882106 SHNITZER STEEL IND INC-A 3300 284,438 284,438 16,275 1,150 L
829226109 SINCLAIR BROADCAST GROUP-A 4800 34,313 34,313 4,388 L
844895102 SOUTHWEST GAS CORP 1300 312,344 312,344 9,342 1,320 9,656 U
789374105 ST FRANCIS CAPITAL CORP 6000 38,250 38,250 563 150 L
792848103 ST. PAUL BANCORP, INC. 6000 73,225 73,225 4,930 928 L
855030102 STAPLES, INC. COMMON 5300 45,713 45,713 1,150 L
861589109 STONE CONTAINER CORP COM 2600 156,585 156,585 20,862 L
870756103 SWIFT TRANSPORTATION CO INC 4200 28,800 28,800 3,667 L
879335107 TELEDYNE INC COMMON 3600 73,387 73,387 42,259 2,986 L
88033G100 TENET HEALTHCARE CORP 8062 99,289 99,289 1,261 3,152 L
886547108 TIFFANY & COMPANY 5300 64,132 64,132 2,599 90 L
887389104 TIMKEN COMPANY COMMON 1000 274,188 274,188 9,064 L
902494103 TYSON FOODS INC COMMON 2000 15,075 15,075 1,050 18 LZ
902549500 UAL CORP 4512 271,707 271,707 33,287 L
908640105 UNION TEXAS PETROL HLDGS INC 1300 691,951 691,951 26,097 1,239 2,485 L
912707106 US SURGICAL CORP 8000 79,999 79,999 2,354 LZ
912889201 US WEST MEDIA GROUP 4800 42,144 42,144 2,346 LZ
90337T101 USX - US STEEL GROUP INC COMMON 3300 82,164 82,164 21,547 600 L
233203686 VA INTERNATIONAL SMALL PORTFOLIO 9900 711,384 711,384 62,916 L
233203678 VA SHORT-TERM FIXED PORTFOLIO 9900 1,637,798 1,637,798 1,581 313 225,122 L
233203710 VA SMALL VALUE PORTFOLIO 9900 1,073,911 1,073,911 81,532 1,920 L
927914101 VISION CORP 3600 41,113 41,113 5,063 LZ
384802104 W.W. GRAINGER INC COMMON 3600 27,999 27,999 776 100 L
929394104 WABAN INC. 5100 187,272 187,272 43,039 L
949702104 WELLMAN INC 2800 33,334 33,334 4,369 112 L
957674104 WESTERN ATLAS INC 1300 284,593 284,593 9,211 807 L
</TABLE>
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND
HEALTH INSURANCE COMPANY
SCHEDULE D - PART 4
Showing all Long-Term Bonds and Stock Sold, Redeemed or Otherwise
Disposed of by the Company During the Current Period
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1 2
Disposal Number
CUSIP Description Date Name of Purchaser of Shares Consideration
of Stock
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
981811102 WORTHINGTON IND 9900 08/14/1996 CANTOR FITZGERALD AND COMPANY 9,600.000 192,663
989524103 ZILOG INC 9900 09/26/1996 MONTGOMERY SECURITIES 3,800.000 76,176
Canada
013716105 ALCAN ALUMINUM LTD 1000 07/19/1996 SMITH BARNEY 2,400.000 70,726
136375201 CANADIAN PACIFIC RAILWAY-P/P WI 4000 08/09/1996 SMITH BARNEY 2,400.000 45,529
440907103 HORSHAM CORP 1000 09/10/1996 OPPENHEIMER & CO 42,700.000 591,068
Singapore
04516V100 ASIA PULP AND PAPER CO LTD-ADR 2600 08/19/1996 MORGAN STANLEY 24,300.000 278,590
1999999 TOTAL INDUSTRIAL & MISC. (UNAFIL) 1,777,297.517 23,565,684
2199998 SUBTOTAL COMMON STOCK--PART 4 1,984,834.477 26,153,885
2199999 SUMMARY COMMON ACQ/DIS IN QTR. 758,060.080 25,980,145
2299999 SUBTOTAL COMMON STOCKS 2,742,894.557 52,134,030
2399999 SUBTOTAL PREFERRED AND COMMON 2,768,894.557 54,987,530
2499999 TOTAL BONDS AND STOCKS 2,768,894.557 534,035,242
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
3 4 5 6 7 8 9
Book Profit on Loss on Interest and NAIC
CUSIP Par Value Actual Cost Value at Disposal Disposal Dividends Desig-
Date of Received nation(a)
Disposal
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
981811102 195,575 195,575 113 3,025 655 L
989524103 68,153 68,153 8,023 LZ
013716105 79,044 79,044 8,318 306 L
136375201 45,444 45,444 85 L
440907103 601,529 601,529 1,393 11,854 2,517 L
04516V100 293,058 293,058 14,468 L
1999999 24,422,147 24,422,417 570,030 1,426,649 306,531
2199998 27,226,024 27,226,294 651,592 1,692,342 350,044
2199999 25,265,636 25,265,636 1,326,827 612,318 261,336
2299999 52,491,660 52,491,930 1,978,419 2,304,660 611,380
2399999 55,321,760 55,322,030 2,001,819 2,304,660 767,120
2499999 477,898,360 536,966,123 534,775,438 3,899,098 4,781,994 14,599,047 XXX
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE DA - PART 1
Short - Term Investments Owned End of Current Period
- ----------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6
Amount of
Interest
Cost Received Paid for Accrued
Book Value Par Value Statement Value To Company Current Interest
Period
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
5199999 Totals 118,363,166 X X X 118,363,166 118,303,523 1,390,231 0
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE DA - PART 2 - Verification
Short - Term Investments Owned
- -----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Previous Year
Current Year Current Year Current Year Ending
as of 3/31 as of 6/30 as of 9/30 12/31
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Book value of short-term investments, end of previous period 207,572,516 152,338,202 132,219,613 117,252,362
2. Cost of short-term investments acquired 2,424,009,272 466,709,676 825,970,863 1,035,143,076
3. Increase by adjustment in book value 1,516,338 126,449 579,976 927,678
4. Profit on disposal of short-term investments 18,678 (17,257) 0 36,923
- -----------------------------------------------------------------------------------------------------------------------------------
5. Subtotals (Sum of Lines 2 through 4) 2,425,544,288 466,818,868 826,550,839 1,036,107,677
- -----------------------------------------------------------------------------------------------------------------------------------
6. Consideration received on disposal of short-term investments 2,480,599,908 486,912,760 840,407,286 944,896,158
7. Decrease by adjustment in book value 178,694 24,697 0 888,353
8. Loss on disposal of short-term investments 0 0 0 3,012
- -----------------------------------------------------------------------------------------------------------------------------------
9. Subtotals (Sum of Lines 6 through 8) 2,480,778,602 486,937,457 840,407,286 945,787,523
- -----------------------------------------------------------------------------------------------------------------------------------
10. Book value of short-term investments, end of period 152,338,202 132,219,613 118,363,166 207,572,516
11. Income collected current period 0 7,402,633 1,990,823 5,673,070
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE
COMPANY
SCHEDULE DB -- PART A -- SECTION 1
Showing All Options, Caps and Floors Owned Quarter Ending September 30
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 2 3 4 5 6 7 8 9
Number of Date of Maturity, Strike Price, Date of Exchange or Cost Book Statement
Description Contracts or Expiry, or Rate or Index Acquisition Counterparty Value Value
Notional Settlement
Amount
- ----------------------------------------------------------------------------------------------------------------------------------
NONE
- -----------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 10 11 12 13
Market Year to Date Used to
Description Value Increase/ Adjust Other
(Decrease) Basis of Investment
by Adjustment Hedged Income
in Book Value Item
- ----------------------------------------------------------------------------------------------------------------------------------
NONE
- -----------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Has a comprehensive description of the hedge program been made available to the
domiciliary state?: Yes[_] No[_] If not, attach a description with this
statement.
SCHEDULE DB -- PART B -- SECTION 1
Showing All Options, Caps and Floors Written and In-Force Quarter Ending
September 30
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 2 3 4 5 6 7 8 9
Number of Date of Maturity, Strike Price, Date of Exchange or Consideration Book Statement
Description Contracts or Expiry, or Rate or Index Issuance Counterparty Received Value Value
Notional Settlement
Amount
- ----------------------------------------------------------------------------------------------------------------------------------
NONE
- -----------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 10 11 12 13
Market Year to Date Used to
Description Value Increase/ Adjust Other
(Decrease) Basis of Investment
by Adjustment Hedged Income
in Book Value Item
- ----------------------------------------------------------------------------------------------------------------------------------
NONE
- -----------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Has a comprehensive description of the hedge program been made available to the
domiciliary state?: Yes[_] No[_] If not, attach a description with this
statement.
17
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND
HEALTH INSURANCE COMPANY
SCHEDULE DB - PART C - SECTION 1
Showing all Collar, Swap and Forward Agreements Open Quarter Ending September 30
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5
Date of Date of
Maturity, Strike Price, Opening
Notional Expiry, or Rate or Index Position
Description Amount Settlement Rec (Pay) or Agreement
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RECEIVE FIXED RATE/(PAY FLOATING RATE):
ABN-AMRO 389,400,000 VARIOUS FIXED/(6/12MLIBOR) VARIOUS
AIG-FP 77,700,000 07/03/2000 6.412%/(12MLIBOR) 10/02/1995
BANKERS TRUST 32,600,000 04/02/1997 6.095%/(12MLIBOR) 10/02/1995
BARCLAYS 93,900,000 VARIOUS FIXED/(6MLIBOR) VARIOUS
BANK OF NOVA SCOTIA 8,500,000 VARIOUS FIXED/(3MLIBOR) VARIOUS
CANADIAN 5,000,000 VARIOUS FIXED/(3MLIBOR) VARIOUS
CREDIT LYONAISS 128,267,000 VARIOUS FIXED/(6/12MLIBOR) VARIOUS
CREDIT SUISSE 16,000,000 02/19/1997 5.32%/(6MLIBOR) 10/19/1992
DEUTSCHE BANK 71,300,000 VARIOUS FIXED/(12MLIBOR) VARIOUS
BANK OF MONTREAL 172,500,000 VARIOUS FIXED/(3/6/12MLIBOR) VARIOUS
ROYAL BANK OF CANADA 100,100,000 VARIOUS FIXED/(6MLIBOR) VARIOUS
SWAPCO 30,400,000 12/30/1999 8.085%/(6MLIBOR) 12/06/1994
SWISS BANK 149,400,000 VARIOUS FIXED/(6/12MLIBOR) VARIOUS
UNITED BANK OF SWITZERLAND 53,400,000 09/29/1998 6.28%/(12MLIBOR) 09/29/1995
RECEIVE FLOATING RATE/(PAY FLOATING RATE):
ABN--AMRO 28,733,880 04/01/1999 3MLIBOR/(3MPRIME) 04/01/1995
CREDIT SUISSE 2,800,000 11/01/1997 5YRCMT/(3MLIBOR) 11/01/1994
MERRILL LYNCH 15,211,267 03/01/1999 1MLIBOR/(1MPRIME) 03/01/1995
SWAPCO 15,000,000 10/07/1997 2YRCMS/(3MLIBOR) 10/07/1994
RECEIVE FLOATING RATE/(PAY FIXED RATE RATE):
SWISS BANK 250,000,000 05/09/2015 FORWARD START 05/24/1995
ROYAL BANK OF CANADA 10,000,000 06/26/2006 3MLIBOR/(7.291%) 06/24/1996
- ------------------------------------------------------------------------------------------------------------------------------------
0299999 SUBTOTAL - SWAPS
- ------------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
6 7 8 9 10
Cost or
Exchange or (Consideration Book Statement Market
Description Counterparty Received) Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RECEIVE FIXED RATE/(PAY FLOATING RATE):
ABN-AMRO ABN-AMRO 0 0 0 10,716,598
AIG-FP AIG-FP 0 0 0 (557,070)
BANKERS TRUST BANKERS TRUST 0 0 0 43,927
BARCLAYS BARCLAYS 0 0 0 1,527,688
BANK OF NOVA SCOTIA BANK OF NOVA SCOTIA 0 0 0 56,069
CANADIAN CANANDIAN 0 0 0 36,055
CREDIT LYONAISS CREDIT LYONAISS 0 0 0 (1,263,423)
CREDIT SUISSE CREDIT SUISSE 0 0 0 (16,148)
DEUTSCHE BANK DEUTSCHE BANK 0 0 0 81,018
BANK OF MONTREAL BANK OF MONTREAL 0 0 0 2,091,909
ROYAL BANK OF CANADA ROYAL CANADA 0 0 0 2,208,143
SWAPCO SWAPCO 0 0 0 1,276,587
SWISS BANK SWISS BANK 0 0 0 (781,491)
UNITED BANK OF SWITZERLAND UBS 0 0 0 (19,298)
RECEIVE FLOATING RATE/(PAY FLOATING RATE):
ABN--AMRO ABN--AMRO 0 0 0 (120,762)
CREDIT SUISSE CREDIT SUISSE 0 0 0 (2,639)
MERRILL LYNCH MERRILL LYNCH 0 0 0 (57,422)
SWAPCO SWAPCO 0 0 0 (11,322)
RECEIVE FLOATING RATE/(PAY FIXED RATE RATE):
SWISS BANK SWISS BANK 0 (319,200) (319,200) 200,013
ROYAL BANK OF CANADA ROYAL CANADA 0 0 0 (252,782)
- ------------------------------------------------------------------------------------------------------------------------------------
0299999 SUBTOTAL - SWAPS 0 (319,200) (319,200) 15,155,650
- ------------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS 0 (319,200) (319,200) 15,155,650
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
11 12 13 14
Year to Date Used to
Increase/ Adjust
(Decrease) Basis of Other
by Adjustment Hedged Investment Potential
Description in Book Value Item Income Exposure
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RECEIVE FIXED RATE/(PAY FLOATING RATE):
ABN-AMRO 0 0 5,107,326 3,952,410
AIG-FP 0 0 178,805 753,690
BANKERS TRUST 0 0 51,432 115,730
BARCLAYS 0 0 1,037,870 990,645
BANK OF NOVA SCOTIA 0 0 120,936 28,050
CANADIAN 0 0 (111,489) 19,250
CREDIT LYONAISS 0 0 222,859 1,237,777
CREDIT SUISSE 0 0 (67,152) 49,600
DEUTSCHE BANK 0 0 271,966 499,100
BANK OF MONTREAL 0 0 1,392,856 1,690,500
ROYAL BANK OF CANADA 0 0 1,745,509 905,905
SWAPCO 0 0 520,196 273,600
SWISS BANK 0 0 540,978 1,546,290
UNITED BANK OF SWITZERLAND 0 0 95,451 376,470
RECEIVE FLOATING RATE/(PAY FLOATING RATE):
ABN-AMRO 0 0 (76,183) 226,998
CREDIT SUISSE 0 0 (6,991) 14,560
MERRILL LYNCH 0 0 (36,549) 117,887
SWAPCO 0 0 (32,761) 75,750
RECEIVE FLOATING RATE/(PAY FIXED RATE RATE):
SWISS BANK (319,200) 0 0 5,387,500
ROYAL BANK OF CANADA 0 0 (44,118) 156,000
- ------------------------------------------------------------------------------------------------------------------------------------
0299999 SUBTOTAL - SWAPS (319,200) 0 10,910,943 18,417,712
- ------------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS (319,200) 0 10,910,943 18,417,712
- ------------------------------------------------------------------------------------------------------------------------------------
Has a comprehensive description of the hedge program been made available to the domiciliary state?:
Yes [X] No [_] If not, attach a description with this statement.
</TABLE>
SCHEDULE DB - PART D - SECTION 1
Showing all Futures Contracts Open Quarter Ending September 30
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1 2 3 4
-----------------------------------------
Number of Date of a b c
Description Contracts Maturity Original Current Variation
Value Value Margin
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STOCK INDEX FUTURES:
SP5/FUT/CME - 500 UNITS EACH 116 DEC96 38,276,550 40,101,200 1,824,650
T-BILL ON DEPOSIT FOR MARGIN
- ------------------------------------------------------------------------------------------------------------------------------------
0199999 SUBTOTAL - LONG FUTURES POSITIONS 38,276,550 40,101,200 1,824,650
- ------------------------------------------------------------------------------------------------------------------------------------
STOCK INDEX FUTURES:
SP5/FUT/CME - 500 UNITS EACH 73 DEC96 25,203,025 25,236,100 33,075
T-BILL ON DEPOSIT FOR MARGIN
- ------------------------------------------------------------------------------------------------------------------------------------
0299999 SUBTOTAL - SHORT FUTURES POSITIONS 25,203,025 25,236,100 33,075
- ------------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS 63,479,575 65,337,300 1,857,725
- ------------------------------------------------------------------------------------------------------------------------------------
5 6 7 8
Variation Margin Information
----------------------------
a b
Date of Used to Adjust
Opening Exchange or Cash Basis of
Description Position Counterparty Deposit Recognized Hedged Item
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STOCK INDEX FUTURES:
SP5/FUT/CME - 500 UNITS EACH VARIOUS CME 1,824,650 0
T-BILL ON DEPOSIT FOR MARGIN GOLDMAN 1,700,000
- ------------------------------------------------------------------------------------------------------------------------------------
0199999 SUBTOTAL - LONG FUTURES POSITIONS X X X X X X 1,700,000 1,824,650 0
- ------------------------------------------------------------------------------------------------------------------------------------
STOCK INDEX FUTURES:
SP5/FUT/CME - 500 UNITS EACH VARIOUS CME 33,075 0
T-BILL ON DEPOSIT FOR MARGIN GOLDMAN 1,300,000
- ------------------------------------------------------------------------------------------------------------------------------------
0299999 SUBTOTAL - SHORT FUTURES POSITIONS X X X X X X 1,300,000 33,075 0
- ------------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS X X X X X X 3,000,000 1,857,725 0
- ------------------------------------------------------------------------------------------------------------------------------------
9
---------
c
Potential
Description Deferred Exposure
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STOCK INDEX FUTURES:
SP5/FUT/CME - 500 UNITS EACH 0 1,160,000
T-BILL ON DEPOSIT FOR MARGIN
- ------------------------------------------------------------------------------------------------------------------------------------
0199999 SUBTOTAL - LONG FUTURES POSITIONS 0 1,160,000
- ------------------------------------------------------------------------------------------------------------------------------------
STOCK INDEX FUTURES:
SP5/FUT/CME - 500 UNITS EACH 0 730,000
T-BILL ON DEPOSIT FOR MARGIN
- ------------------------------------------------------------------------------------------------------------------------------------
0299999 SUBTOTAL - SHORT FUTURES POSITIONS 0 730,000
- ------------------------------------------------------------------------------------------------------------------------------------
9999999 TOTALS 0 1,890,000
- ------------------------------------------------------------------------------------------------------------------------------------
Has a comprehensive description of the hedge program been made available to the domiciliary state?:
Yes [X] No [_] If not, attach a description with this statement.
</TABLE>
18
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN
LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE E - CASH
Month End Depository Balances
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Depository
Amount of Interest Amount of Interest
Rate of Received During Accrued During
Interest Current Quarter Current Quarter
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPEN DEPOSITORIES..............................................................
FIRST NATIONAL BANK OF CHICAGO - CHICAGO, ILLINOIS........................
MICHIGAN NATIONAL BANK - LANSING, MICHIGAN................................
NATIONAL CITIBANK - LOUISVILLE - KENTUCKY.................................
CITIBANK - NEW YORK, NEW YORK.............................................
CHASE MANHATTAN BANK - NEW YORK, NEW YORK................................
BANK OF NEW YORK - NEW YORK, NEW YORK.....................................
SANWA BANK - PASADENA, CALIFORNIA.........................................
CORESTATES BANK - PHILADELPHIA, PENNSYLVANIA..............................
PNC BANK - PHILADELPHIA, PENNSYLVANIA.....................................
BANK OF AMERICA - SANTA ANNA - CALIFORNIA.................................
SEAFIRST BANK - SEATTLE, WASHINGTON.......................................
MBNA BANK - WILMINGTON, DELAWARE..........................................
BANCOPOPULAR - PUERTO RICO.................................................
CITIZENS FID BANK & TRUST - LOUISVILLE, KENTUCKY..........................
BANKERS TRUST - NEW YORK, NEW YORK........................................
LIBERTY NATIONAL BANK - LOUISVILLE, KENTUCKY..............................
SUN TRUST - ATLANTA, GEORGIA..............................................
HARRIS TRUST - CHICAGO, ILLINOIS............................................
- ------------------------------------------------------------------------------------------------------------------------------------
0199998 Deposits in....depositories which do not exceed the
allowable limit in any one depository (see Instructions)
- Open depositories.................................................... XXX 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
0199999 OPEN DEPOSITORIES...................................................... XXX 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SUSPENDED DEPOSITORIES
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
- ------------------------------------------------------------------------------------------------------------------------------------
0299998 Deposits in ......depositories which do not exceed the
allowable limit in any one depository (see Instructions)
-Suspended Depositories............................................... XXX 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
0299999 SUSPENDED DEPOSITORIES............................................... XXX 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
0399999 TOTALS................................................................ 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE E - CASH
Month End Depository Balances
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Book Balance at End of Each
Month During Current Quarter
----------------------------------------------
5 6 7
Depository
First Month Second Month Third Month
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPEN DEPOSITORIES..............................................................
FIRST NATIONAL BANK OF CHICAGO - CHICAGO, ILLINOIS........................ 13,589 14,100 12,427
MICHIGAN NATIONAL BANK - LANSING, MICHIGAN................................ 96 96 96
NATIONAL CITIBANK - LOUISVILLE - KENTUCKY................................. 6,550,343 7,488,870 5,587,164
CITIBANK - NEW YORK, NEW YORK............................................. 491,869 495,829 484,043
CHASE MANHATTAN BANK - NEW YORK, NEW YORK................................ 592,503 616,451 750,466
BANK OF NEW YORK - NEW YORK, NEW YORK..................................... 5,003,715 201,991 0
SANWA BANK - PASADENA, CALIFORNIA......................................... 97 97 97
CORESTATES BANK - PHILADELPHIA, PENNSYLVANIA.............................. 38,814 36,376 36,073
PNC BANK - PHILADELPHIA, PENNSYLVANIA..................................... (33,634,911) (26,863,622) (24,893,198)
BANK OF AMERICA - SANTA ANNA - CALIFORNIA................................. 21,524 53,802 83,047
SEAFIRST BANK - SEATTLE, WASHINGTON....................................... (2,428) 110 5,032
MBNA BANK - WILMINGTON, DELAWARE.......................................... 220,818 516,452 301,530
BANCOPOPULAR - PUERTO RICO................................................. 5,010 5,010 5,010
CITIZENS FID BANK & TRUST - LOUISVILLE, KENTUCKY.......................... 80,525 127,525 69,008
BANKERS TRUST - NEW YORK, NEW YORK........................................ 1,721,741 (25,736,794) (795,995)
LIBERTY NATIONAL BANK - LOUISVILLE, KENTUCKY.............................. 2,466 2,466 2,466
SUN TRUST - ATLANTA, GEORGIA.............................................. 447,924 220,023 1,557,542
HARRIS TRUST - CHICAGO, ILLINOIS............................................ 0 2,000,000 0
..........................................................................
- ------------------------------------------------------------------------------------------------------------------------------------
0199998 Deposits in....depositories which do not exceed the
allowable limit in any one depository (see Instructions)
- Open depositories.................................................... 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
0199999 OPEN DEPOSITORIES (18,446,305) (40,821,218) (16,795,192)
- ------------------------------------------------------------------------------------------------------------------------------------
SUSPENDED DEPOSITORIES
- ------------------------------------------------------------------------------------------------------------------------------------
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
...............................................................................
- ------------------------------------------------------------------------------------------------------------------------------------
0299998 Deposits in ......depositories which do not exceed the
allowable limit in any one depository (see Instructions)
-Suspended Depositories................................................ 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
0299999 SUSPENDED DEPOSITORIES 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
0399999 TOTALS (18,446,305) (40,821,218) (16,795,192)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN
LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE T - PREMIUMS AND ANNUITY CONSIDERATIONS
During Current Year to Date by State and Territories
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Direct Business Only
1 2 ----------------------------------------------------------------------------------------
Is Insurer 3 4 5 6
States, Etc. Licensed? Accident and Health Insurance Deposit-
(Yes or No) Life Insurance Annuity Considerations Premiums, Including Policy type
Premiums Membership and Other Fees Funds
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Alabama AL Yes 1,288,124 150,945 1,070,974 2,820,337
2. Alaska AK Yes 38,693 165 50,575 1,227,586
3 Arizona AZ Yes 762,391 290,495 673,408 10,733,810
4. Arkansas AR Yes 419,158 126 323,954 1,689,445
5. California CA Yes 12,990,931 1,045,241 8,742,247 62,417,553
6 Colorado CO Yes 974,518 859,128 614,826 12,200,273
7. Connecticut CT Yes 1,581,445 726,450 533,087 9,449,389
8. Delaware DE Yes 337,655 68,286 170,501 486,466
9. Dist Columbia DC Yes 103,071 194,192 166,174 2,914,747
10. Florida FL Yes 5,971,170 1,461,360 8,019,538 40,945,263
11. Georgia GA Yes 3,613,791 672,681 2,417,831 6,027,963
12. Hawaii HI Yes 63,544 75,277 2,178,242
13. Idaho ID Yes 151,688 73,474 503,923
14. Illinois IL Yes 3,917,343 810,133 2,753,129 20,873,120
15. Indiana ID Yes 2,598,798 755,877 1,709,262 7,730,690
16. Iowa IA Yes 795,951 140,518 435,309 2,683,732
17. Kansas KS Yes 599,398 161,093 180,753 7,133,541
18. Kentucky KY Yes 1,530,082 109,268 1,102,958 5,471,938
19. Louisiana LA Yes 1,533,574 585,732 1,755,773 8,340,754
20. Maine ME Yes 394,483 59,008 129,834 1,070,482
21. Maryland MD Yes 334,380 2,509,984 344,292 11,314,100
22. Massachusetts MA Yes 2,562,081 1,086,650 936,235 11,584,399
23. Michigan MI Yes 2,130,179 391,423 972,815 13,629,362
24. Minnesota MN Yes 524,675 665,902 268,090 7,517,954
25. Mississippi MS Yes 877,135 65,335 882,230 1,792,461
26. Missouri MO Yes 2,380,243 1,894,981 1,705,894 11,651,480
27. Montana MT Yes 205,686 235,291 143,458 1,266,714
28. Nebraska NE Yes 361,996 86,457 323,393 1,430,590
29. Nevada NV Yes 494,478 303 457,214 1,793,097
30. New Hampshire NH Yes 663,320 148,794 107,309 2,545,674
31. New Jersey NJ Yes 5,639,235 1,084,850 6,285,017 13,401,932
32. New Mexico NM Yes 434,704 1,571 220,930 1,405,706
33. New York NY Yes(b) 190,058 221,011 296,023 324,736
34. North Carolina NC Yes 2,710,841 216,323 2,990,075 10,144,833
35. North Dakota ND Yes 64,167 450 68,052 316,050
36. Ohio OH Yes 3,482,438 192,178 4,393,815 19,209,657
37. Oklahoma OK Yes 922,939 459,328 746,968 2,035,417
38. Oregon OR Yes 197,441 50,524 168,476 5,298,388
39. Pennsylvania PA Yes 6,744,598 2,365,811 3,775,535 23,086,368
40. Rhode Island RI Yes 378,828 153,528 111,153 981,284
41. South Carolina SC Yes 826,224 157,112 754,943 2,777,147
42. South Dakota SD Yes 104,101 220,174 70,253 538,060
43. Tennessee TN Yes 2,422,118 157,875 1,865,501 7,737,105
44. Texas TX Yes 3,546,731 15,330,350 4,504,200 33,208,609
45. Utah UT Yes 222,687 572 151,026 1,574,718
46. Vermont VT Yes 108,310 90 37,398 553,584
47. Virginia VA Yes 2,956,448 677,715 2,765,024 15,144,336
48. Washington WA Yes 740,687 255,995 736,289 8,780,458
49. West Virginia WV Yes 627,625 128,679 659,583 492,955
50. Wisconsin WI Yes 383,442 380,032 249,927 7,815,652
51. Wyoming WY Yes 62,264 62,316 33,486 1,748,834
52. American Samoa AS No
53. Guam GU No
54. Puerto Rico PR Yes 15,317 216 26,618
55. US Virgin Islands VI No 3,161
56. Canada CN No 6,645 4,888
57. Aggregate Other Alien OT x x x 4,271 0 7,625 0
-----------------------------------------------------------------------------------------------
58. Subtotal x x x 82,995,262 37,292,515 68,062,618 428,000,914
90. Company contributions for
employee benefit plans x x x
91. Dividends applied to purchase
paid-up additions and
annuities x x x
92. Dividends applied to shorten
endowment or premium paying
period x x x
93. Premium or annuity
considerations waived under
disability or other contract
provisions x x x 173,153 4,373
93A. Aggregate of other amount
not allocable by State X X X 0 0 0 0
-------------------------------------------------------------------------------------------------
94. Totals (Direct Business) x x x 83,168,415 37,292,515 68,066,991 428,000,914
95. Plus Reinsurance Assumed x x x 53,076,208 64,513,410 48,285,147 102,435,815
-------------------------------------------------------------------------------------------------
96. Totals (All Business) x x x 136,244,623 101,805,925 116,352,138 530,436,729
97. Less Reinsurance Ceded x x x 419,384 1,075,615
-------------------------------------------------------------------------------------------------
98. Totals (All Business) less
Reinsurance Ceded (a) 52 135,825,239 101,805,925 115,276,523 530,436,729
- ------------------------------------------------------------------------------------------------------------------------------------
DETAIL OF WRITE-IN
5701. Europe x x x 1,121 3,493
5702. Mexico x x x 146 442
5703. Near East x x x 318 128
5798. Summary of remaining
write-ins for Line
57 from overflow page x x x 2,685 0 3,562 0
5799. Total (Lines 5701 thru
5703 plus 5798 (Line
57 above) x x x 4,271 0 7,625 0
- ------------------------------------------------------------------------------------------------------------------------------------
93A01. x x x
93A02. x x x
93A03. x x x
93A98. Summary of remaining
write-ins for Line 93A
from overflow page x x x 0 0 0 0
93A99. Total (Lines 93A01 thru
93A03 plus 93A98) (Line
93A above) x x x 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Insert the number of yes responses except for Canada and Other Alien.
(b) Authorized reinsurer only.
</TABLE>
20
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE
COMPANY
SCHEDULE S - CEDED REINSURANCE
Showing all new reinsurers since the most recent annual statement.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5
NAIC Federal Is insurer
Company ID Name of Reinsurer Location authorized ?
Code Number (Yes or No)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AFFILIATES
- ------------------------------------------------------------------------------------------------------------------------------------
US INSURERS
66168 41-0417830 Minnesota Mutual Life Insurance Company St. Paul, Minnesota Yes
- ------------------------------------------------------------------------------------------------------------------------------------
POOLS AND ASSOCIATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
ALL OTHER INSURERS
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE Y - INFORMATION CONCERNING ACTIVITIES OF INSURER MEMBERS OF A HOLDING COMPANY GROUP
All insurer members of a Holding Company Group that has acquired and/or disposed of any domestic insurer(s) since filing the last
annual or quarterly statement shall prepare a common schedule for inclusion in each of the individual quarterly statements
PART 1 - ORGANIZATIONAL CHART
- ------------------------------------------------------------------------------------------------------------------------------------
NAME EMPLOYEE ID. NUMBER NAIC CO. CODE DOMICILE OWNERSHIP
- ------------------------------ ------------------- ------------- -------- ---------
<S> <C> <C> <C> <C>
Providian Corporation 51-0108922 DE 100% Publicly Owned
Providian Agency Group, Inc. 56-1680040 KY 100% Providian Corporation
Benefit Plans, Inc. 61-1201322 DE 100% Providian Corporation
DurCo Agency, Inc. 56-1358257 VA 100% Benefit Plans, Inc.
Providian Assignment Corporation 61-1068209 KY 100% Providian Corporation
Capital General Development Corporation 61-1014834 DE 100% Providian Corporation
*Commonwealth Life Insurance Company 61-0162820 62227 KY 100% Capital General Development Corporation
Agency Holding I, Inc. 51-0324879 DE 100% Commonwealth Life Insurance Company
Agency Investments I, Inc. 51-0324880 DE 100% Agency Holding I, Inc.
Commonwealth Agency, Inc. 61-1163956 KY 100% Commonwealth Life Insurance Company
*Peoples Security Life Insurance Company 56-0267250 64475 NC 100% Capital General Development Corporation
Ammest Realty Corporation 74-2135472 TX 100% Peoples Security Life Insurance Company
Agency Holding II, Inc. 51-0324881 DE 100% Peoples Security Life Insurance Company
Agency Investments II, Inc. 51-0324882 DE 100% Agency Holding II, Inc.
Agency Holding III, Inc. 51-0324883 DE 100% Peoples Security Life Insurance Company
Agency Investments III, Inc. 51-0324884 DE 100% Agency Holding III, Inc.
Ramada Inn Coliseum Operating Company 64-0876853 MS 100% Peoples Security Life Insurance Company
Capital 200 Block Corporation 61-1164056 DE 100% Providian Corporation
Providian Financial Services, Inc. 61-1226943 PA 100% Providian Corporation
Providian Securities Corporation 23-2421076 PA 100% Providian Financial Services, Inc.
Capital Broadway Corporation 61-1018573 KY 100% Providian Corporation
Providian Investment Advisors, Inc. 61-1160818 DE 100% Providian Corporation
Providian Capital Management, Inc. 61-1085329 DE 100% Providian Corporation
Providian Capital Management Real
Estate Services, Inc. 61-1098396 DE 100% Providian Capital Management
Corporation
Capital Real Estate Development
Corporation 61-1014814 DE 100% Providian Corporation
*Capital Security Life Insurance Company 58-1640298 79880 NC 100% Providian Corporation
Independence Automobile Club, Inc. 58-1362162 GA 100% Capital Security Life Insurance Company
Independence Automobile Association, Inc. 59-0878564 FL 100% Capital Security Life Insurance Company
Southlife, Inc. 61-1166357 TN 100% Providian Corporation
Providian Bancorp, Inc. 94-2933952 DE 100% Providian Corporation
First Deposit Service Corporation 94-2986675 CA 100% Providian Bancorp, Inc.
*First Deposit Life Insurance Company 71-0336339 83852 AR 100% Providian Bancorp, Inc.
First Deposit National Bank 02-0118519 USA 100% Providian Bancorp, Inc.
Winnisquam Community Development
Corporation 02-0450417 NH 96% First Deposit National Bank
Providian Credit Corporation 94-3208908 DE 100% Providian Bancorp, Inc.
Providian National Bancorp 94-3055127 CA 100% Providian Bancorp, Inc.
Commonwealth Premium Finance 94-2991887 CA 100% Providian National Bancorp
Providian Credit Services, Inc. 87-0446991 UT 100% Providian Bancorp, Inc.
Providian National Bank 02-0443459 USA 100% Providian Bancorp, Inc.
Providian Insurance Agency, Inc. 23-1720755 PA 100% Providian Corporation
National Home Life Corporation 23-1857095 PA 100% Providian Insurance Agency, Inc.
Compass Rose Development Corporation 23-1886091 PA 100% Providian Insurance Agency, Inc.
Association Consultants, Inc. 36-3340427 IL 100% Providian Insurance Agency, Inc.
Valley Forge Associates, Inc. 23-1608635 PA 100% Providian Insurance Agency, Inc.
Veterans Benefits Plans, Inc. 23-1895584 PA 100% Providian Insurance Agency, Inc.
Veterans Insurance Services, Inc. 51-0247259 DE 100% Providian Insurance Agency, Inc.
Financial Planning Services, Inc. 23-2130174 DC 100% Providian Insurance Agency, Inc.
*Providian Auto and Home Insurance Company 39-1341441 26050 MO 100% Providian Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SCHEDULE Y - INFORMATION CONCERNING ACTIVITIES OF INSURER MEMBERS OF A HOLDING COMPANY GROUP
All insurer members of a Holding Company Group that has acquired and/or disposed of any domestic insurer(s) since filing the last
annual or quarterly statement shall prepare a common schedule for inclusion in each of the individual quarterly statements
PART 1 - ORGANIZATIONAL CHART
- ------------------------------------------------------------------------------------------------------------------------------------
NAME EMPLOYEE ID. NUMBER NAIC CO. CODE DOMICILE OWNERSHIP
- ------------------------------ ------------------- ------------- -------- ---------
<S> <C> <C> <C> <C>
Academy Insurance Group, Inc. 58-1949029 DE 100% Providian Auto And Home Insurance
Company
*Academy Life Insurance Company 84-0528301 60046 MO 100% Academy Insurance Group, Inc.
Academy Services, Inc. 74-1502783 DE 100% Academy Insurance Group, Inc.
Ammest Development Corporation, Inc. 48-0767488 KS 100% Academy Insurance Group, Inc.
Ammest Insurance Agency, Inc. 75-1467693 CA 100% Academy Insurance Group, Inc.
Ammest Massachusetts Insurance
Agency, Inc. 06-1171577 MA 100% Academy Insurance Group, Inc.
Ammest Realty, Inc. 23-2221268 PA 100% Academy Insurance Group, Inc.
Ampac, Inc. 23-2113311 TX 100% Academy Insurance Group, Inc.
Ampac Insurance Agency, Inc. 23-2364438 PA 100% Academy Insurance Group, Inc.
Data/Mark Services, Inc. 23-2488188 DE 100% Academy Insurance Group, Inc.
Force Financial Group, Inc. 04-3017062 DE 100% Academy Insurance Group, Inc.
Force Financial Services, Inc. 04-3017057 MA 100% Force Financial Group, Inc.
Military Associates, Inc. 23-2109900 PA 100% Academy Insurance Group, Inc.
NCOAA Management Company 74-2281206 TX 100% Academy Insurance Group, Inc.
NCOA Motor Club, Inc. 74-1708561 GA 100% Academy Insurance Group, Inc.
*Pension Life Insurance Company
of America 22-1731007 67687 NJ 100% Academy Insurance Group, Inc.
Unicom Administrative Services, Inc. 23-6537972 PA 100% Academy Insurance Group, Inc.
Unicom Administrative Services GmbH NONE Germany 100% Unicom Administrative Services, Inc.
*Providian Property and Casualty
Insurance Company 61-6027355 20133 KY 100% Providian Auto And Home Insurance
Company
*Providian Fire Insurance Company 61-0983091 39896 KY 100% Providian Property And Casualty
Insurance Company
Capital Liberty, L.P. 61-0989122 DE 5% Providian Corporation
76% Commonwealth Life Insurance Company
19% Peoples Security Life Insurance Company
Providian Mauritius Investment LTD. NONE Mauritius 100% Providian Corporation
Providian LLC 98-0140083 British
West
Indies 100% Providian Corporation
*Providian Life and Health Insurance
Company 43-0378030 66605 MO 4% Providian Corporation
15% Peoples Security Life Insurance Company
20% Capital Liberty, L.P.
61% Commonwealth Life Insurance Company
*Veterans Life Insurance Company 36-2545774 81027 IL 100% Providian Life And Health Insurance
Company
*First Providian Life and Health
Insurance Company 23-1743523 78808 NY 100% Veterans Life Insurance Company
Providian Services, Inc. 23-1705984 PA 100% Veterans Life Insurance Company
Wannalancit Corp. 61-6233370 MA 100% Providian Corporation
* Denotes Insurer
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
22.1
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE
COMPANY
GENERAL INTERROGATORIES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S>
(Responses to these interrogatories should be based on changes that have
occured since prior year end)
<C>
1. (a) Did the Company implement any significant accounting policy changes which would require disclosure
in the Notes to the Financial Statements? Yes [_] No [X]
(b) If "yes," explain
-----------------------------------------------------------------------------
2. (a) Did the Company experience any material transactions requiring the filing of Disclosure of Material
Transactions with the State of Domicile, as required by the Model Act? Yes [_] No [X]
(b) If "yes," has the report been filed with the domicilary state? Yes [_] No [_]
3. (a) In all cases where the Company has assumed accident and health risks from another company,
provisions should be made in this statement on account of such reinsurances for a reserve equal
to that which the original company would have been required to establish had it retained the risks.
Has this been done? Yes [X] No [_]
(b) If "no," explain
-----------------------------------------------------------------------------
4. (a) Has there been any change in the company's own preferred or common stock? Yes [_] No [X]
(b) If "yes," explain
-----------------------------------------------------------------------------
5. (a) State as of what date the latest financial examination of the company was made or is being made. 12/31/1994
(b) State the as of date of the latest financial examination report that is available from either the
state of domicile or the Company. This date should be the date of the examined balance sheet and
the date the report was completed or released. 12/31/1994
(c) State as of what date the latest financial examination report became available to other states or
the public from either the state of domicile or the Company. This is the release date of completion
date of the examination report and not the date of the examination (balance sheet date). 03/15/1996
(d) By what department or departments? Missouri
--------------------------------------------------
6. (a) Has any change been made during the year of this statement in the charter, by-laws, articles of
incorporation, or deed of settlement of the company? Yes [_] No [X]
(b) If "yes," date of change:
--------------
If not previously filed, furnish herewith a certified copy of the instrument as amended.
7. (a) Has there been any substantial changes in the organizational chart since year end? Yes [_] No [X]
(b) If "yes," attach an organization chart.
8. (a) If the company is subject to a management agreement, including third - party administrator(s)
managing general agent(s) attorney-in-fact, or similar agreement, have there been any
significant changes regarding the terms of the agreement or principals involved? Yes [ ] No [X] NA [ ]
(b) If "yes'" attach an explanation.
9. (a) Were any of the stocks, bonds, or other assets of the Company loaned, placed under option
agreement, or otherwise made available for us by another person? (Exclude securities under
securities lending agreements.) Yes[ ] No [X]
(b) If "yes," give full and complete information relating thereto:
----------------------------------
-------------------------------------------------------------------------------------------------
10. Amount of real estate and mortgages held in other invested assets in Schedule BA: $24,242,681
11. Amount of real estate and mortgages held in short-term investments: $0
12. (a) Has the Company been a party to a merger or consolidation during the period covered by this
statement? Yes [_] No [X]
(b) If yes, provide the name of company, NAIC Company Code, and state of domicile (use two letter
state abbreviation) for any company that has ceased to exist as a result of the merger or
consolidation.
-------------------------------------------------------
NAIC State of
Name of Company Company Code Domicile
------------------------------------------------------
------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-23-
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE
COMPANY
SUPPLEMENTAL EXHIBITS AND SCHEDULES INTERROGATORIES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL EXHIBITS AND SCHEDULES INTERROGATORIES
<C> <S> <C>
1. The SVO Compliance Certification is a required filing for all companies. Will the SVO Compliance
Certification be filed with this statement? Yes [X] No [ ]
If no, please explain:
--------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
If response is no, affix bar code here:
2. a. Is your company a U.S. Branch of an alien insurer? Yes [_] No [X]
b. Will the Trusteed Surplus Statement be filed with this Department with this statement? Yes [_] No [X]
If first reponse is yes and second response is no, please explain: ------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
If second response is no, affix bar code here:
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
STATEMENT AS OF SEPTEMBER 30, 1996 OF THE PROVIDIAN LIFE AND HEALTH INSURANCE
COMPANY
OVERFLOW PAGE FOR WRITE-INS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
LQ002 Additional Aggregate Lines for Page 02 Line 21.
*ASSETS
- -----------------------------------------------------------------01--------------02-----------03-----------04-------------05------
<S> <C> <C> <C> <C> <C>
2104. Checks in course of Collection........................ 22,627 22,627 0 0
2105. Accounts Receivable Insurance Companies............... 10,099,808 57,198 10,042,610 4,625,824
2106. Miscellaneous Assets................................. 5,125,296 2,448,899 2,676,397 2,546,934
2107. Prepaid Expenses...................................... 4,906,978 4,906,978 0 0
2108. Accounts Receivable Investments....................... 20,843,652 20,843,652 19,834,212
2019. Interest Maintenance Reserve.......................... 15,383,114 15,383,114 0 0
2110. ...................................................... 0 0
2196. ......................................................
------------------------------------------------------------------
2197. Summary of remaining write-ins for Line 21 for
Page 02............................................... 40,998,361 15,383,114 22,818,816 33,562,659 27,006,970
- ----------------------------------------------------------------------------------------------------------------------------------
LQ004 Additional Aggregate Lines for Page 04 Line 25.
*SUMOP
- --------------------------------------------------------------------------------------------01-------------- 02--------------03---
2504. Miscellaneous expense........................................................... 9,720
2505. ................................................................................ 0
2506. ................................................................................ 0
2507. ................................................................................ 0
2508. ................................................................................ 0
2509. ................................................................................ 0
2510. ................................................................................ 0
2596. ................................................................................
------------------------------------------
2597. Summary of remaining write-ins for Line 25 for Page 04.......................... 9,720 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
LQ006 Additional Aggregate Lines for Page 06 Line 12.
*RECON
- --------------------------------------------------------------------------------------------------------01--------------02--------
1204. Account payable investment................................................................... 10,274,962 81,238,478
1205. Experience rating refund..................................................................... 0 0
1206. Premium deposit fund......................................................................... 53,722 0
1207. Miscellaneous income......................................................................... 0 334,893
1208. Payable to parent, subsidiaries and affiliates............................................... 2,534,556 216,417
1209. Drafts outstanding........................................................................... 0 0
1210. Reinsurance recapture........................................................................ 0 92,496,776
1211. Reserve adjustment on assumed business....................................................... 0 724,482,014
1212. Remittances and items not allocated.......................................................... 5,399,342 3,182,523
1213. ............................................................................................. 0 0
1214. .............................................................................................
1215. .............................................................................................
1296. .............................................................................................
----------------------------
1297. Summary of remaining write-ins for Line 12 for Page 06....................................... 18,262,582 901,951,101
- ----------------------------------------------------------------------------------------------------------------------------------
LQ006 Additional Aggregate Lines for Page 06 Line 30.
*RECON
- --------------------------------------------------------------------------------------------------------01--------------02--------
3004. Account payable investments.................................................................. 0
3005. Stock redemption............................................................................. 0 4,000,000
3006. Accounts payable other....................................................................... 9,720 2,383,614
3007. Amount withheld as agent..................................................................... 4,660,152 887,524
3008. Change in experience refund.................................................................. 0 1,653,738
3009. Change in premium deposit fund............................................................... 0 24,230
3010. Funds held in unauthorized reinsurers........................................................ 1,115,335 0
3011. .............................................................................................
3012. .............................................................................................
3013. .............................................................................................
3014. .............................................................................................
3015. .............................................................................................
3096. .............................................................................................
----------------------------
3097. Summary of remaining write-ins for Line 30 for Page 06....................................... 5,785,207 8,949,106
- ----------------------------------------------------------------------------------------------------------------------------------
LQ020 Additional Aggregate Lines for Page 20 Line 57.
*SCT
- ---------------------------------------------------------------------02----------03-----------04-----------05--------------06-----
5704. South America......................................... X X X 765 1,951
5705. Other................................................. X X X 1,920 1,611
5706. ...................................................... X X X
5707. ...................................................... X X X
5708. ...................................................... X X X
5709. ...................................................... X X X
5710. ...................................................... X X X
5796. ...................................................... X X X
------------------------------------------------------------------
5797. Summary of remaining write-ins for Line 57 for
Page 20............................................... X X X 2,685 0 3,562 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
Part A. None
Part B. All financial statements required to be filed are included in
Part B.
Part C. None
(b) Exhibits.
(1) Resolution of the Board of Directors of National Home Life Assurance
Company ("National Home") authorizing establishment of the
Separate Account./1/
(2) Not Applicable.
(3) Distribution Agreement.
(a) Form of Selling Agreement./5/
(4) (a) Form of variable annuity contract (A Unit)./6/
(b) Form of variable annuity contract (B Unit)./6/
(5) (a) Form of Application./7/
(b) 403(b) Rider./5/
(c) Individual Retirement Annuity Rider./5/
(6) (a) Articles of Incorporation of National Home./1/
(b) Amendment to Articles of Incorporation of National Home./1/
(c) Amended and Restated Articles of Incorporation of National
Home./1/
(d) Amended and Restated Articles of Incorporation of Providian
Life and Health Insurance Company.
(7) Not Applicable.
(8) (a) Form of Participation Agreement for the Funds./6/
(b) Participation Agreement Among DFA Investment Dimensions Group,
Inc., Dimensional Fund Advisors, Inc., DFA Securities Inc. and
National Home Life Assurance Company dated as of June 29,
1994./8/
(c) Participation Agreement Among Insurance Management Series,
Federated Advisors, Federated Securities Corp. and National
Home Life Assurance Company dated as of May 17, 1994./8/
(d) Participation Agreement Among Insurance Investment Products
Trust, SEI Financial Services Company and National Home Life
Assurance Company dated as of January 1, 1995./10/
(e) Participation Agreement Among Wanger Advisors Trust and
National Home Life Assurance Company dated as of May 19, 1995.
/10/
(f) Participation Agreement Among Tomorrow Funds Retirement Trust,
Weiss, Peck & Greer, L.L.C. and Providian Life and Health
Insurance Company dated as of September 11, 1995./10/
(g) Participation Agreement among Montgomery Funds III, Montgomery
Asset Management, L.P., and Providian Life and Health Insurance
Company dated as of January 31, 1996./11/
(9) (a) Opinion and Consent of Counsel./12/
(b) Consent of Counsel./12/
(10) Consent of Independent Auditors./12/
- -----------
/1/ Incorporated by reference from the initial Registration Statement of
National Home Life Assurance Company Separate Account V, File No. 33-45862.
/2/ Incorporated by reference from the initial Registration Statement of
National Home Life Assurance Company Separate Account II, File No. 33-7033.
/3/ Incorporated by reference from Post-Effective Amendment No. 3 to the
Registration Statement of National Home Life Assurance Company Separate
Account II, File No. 33-7033.
/4/ Incorporated by reference from Post-Effective Amendment No. 5 to the
Registration Statement of National Home Life Assurance Company Separate
Account II, File No. 33-7033.
/5/ Incorporated by reference from Pre-Effective Amendment No. 1 to the
Registration Statement of National Home Life Assurance Company Separate
Account V, File No. 33-45862.
/6/ Incorporated by reference from the Registration Statement of National
Home Life Assurance Company Separate Account V, File No. 33-72838, filed on
December 10, 1993.
/7/ Incorporated by reference from the Registration Statement of National
Home Life Assurance Company Separate Account V, File No. 33-79502, filed on
May 27, 1994.
/8/ Incorporated by reference from the Post-Effective Amendment No. 1 to the
Registration Statement of National Home Life Assurance Company Separate
Account V, File No. 33-80958, filed April 28, 1995.
/9/ Incorporated by reference from Post-Effective Amendment No. 2 to the
Registration Statement of National Home Life Assurance Company Separate
Account V, File No. 33-80958, Filed September 19, 1995.
/10/ Incorporated by reference from Post-Effective Amendment No. 3 to the
Registration Statement of National Home Life Assurance Company Separate
Account V, File No. 33-80958.
/11/ Incorporated by reference from Post-Effective Amendment No. 4 to the
Registration Statement of Providian Life and Health Insurance Company
Separate Account V, File No. 33-80958.
/12/ Filed herewith.
<PAGE>
(13) No Financial Statements are omitted from Item 23.
(14) Not Applicable.
(15) Not Applicable.
(16) Not Applicable.
<PAGE>
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
CEO Shailesh J. Mehta
President & Chief Operating Officer David J. Miller
Senior Vice President Kevin P. McGlynn
Senior Vice President Martin Renninger
Senior Vice President Paul Yakulis
Senior Vice President Edward A. Biemer
Senior Vice President, Treasurer & Senior
Financial Officer Dennis E. Brady
Vice President Brian Alford
Vice President Thomas P. Bowie
Vice President Michele M. Coan
Vice President Charles N. Coatsworth
Vice President and Associate General Counsel Julie S. Congdon
Vice President Karen H. Fleming
Vice President Anita Gambos
Vice President Gregory J. Garvin
Vice President Carolyn M. Johnson
Vice President/Underwriting William J. Kline
Vice President Jeffrey P. Lammers
Vice President Michael F. Lane
Vice President & Secretary Susan E. Martin
Vice President John A. Mazzuca
Vice President Robin M. Morgan
Vice President Thomas B. Nesspor
Vice President G. Eric O'Brien
Vice President Daniel H. Odum
Vice President Harold W. Peterson, Jr.
Vice President and Actuary John C. Prestwood, Jr.
<PAGE>
Vice President Frank J. Rosa
Vice President & Associate General Counsel Ellen S. Rosen
Vice President Douglas A. Sarcia
Vice President Nancy B. Schuckert
Vice President Joseph D. Strenk
Vice President William W. Strickland
Vice President Oris Stuart, III
Vice President William C. Tomilin
Vice President Janice L. Weaver
Assistant Vice President Janice Boehmler
Assistant Vice President & Qualified Actuary Michael A. Cioffi
Assistant Vice President Marie Helgeland
Assistant Vice President Patricia A. Lukacs
Assistant Vice President Harvey Waite
Assistant Vice President Geralyn Barbato
Assistant Vice President Mary Ellen Fahringer
Assistant Treasurer Elaine J. Robinson
Assistant Controller Paul J. Lukacs
Assistant Controller Joseph C. Noone
Second Vice President Garth A. Bernard
Second Vice President George E. Claiborne, Jr.
Second Vice President Cindy L. Chanley
Second Vice President Michael K. Mingus
Second Vice President/Investments Terri L. Allen
Second Vice President/Investments Tom Bauer
Second Vice President/Investments C. Ray Brewer
Second Vice President/Investments Kirk W. Buese
Second Vice President/Investments Curt M. Burns
Second Vice President/Investments Joel L. Coleman
Second Vice President/Investments William S. Cook
Second Vice President/Investments Deborah A. Dias
Second Vice President/Investments Lee W. Eastland
Second Vice President/Investments Eric B. Goodman
<PAGE>
Second Vice President/Investments James Grant
Second Vice President/Investments Theodore M. Haag
Second Vice President/Investments John R. Hillen
Second Vice President/Investments Frederick B. Howard
Second Vice President/Investments Claudia Jackson
Second Vice President/Investments William H. Jenkins
Second Vice President/Investments Frederick C. Kessell
Second Vice President/Investments Tim Kuussalo
Second Vice President/Investments Mark E. Lamb
Second Vice President/Investments Lisa M. Longino
Second Vice President/Investments Monika Machon
Second Vice President/Investments James D. MacKinnon
Second Vice President/Investments Jack McCabe
Second Vice President/Investments Jeffrey T. McGlaun
Second Vice President/Investments Paul D. Mier
Second Vice President/Investments James G. Nickerson
Second Vice President/Investments Wayne R. Nelis
Second Vice President/Investments Douglas H. Owen, Jr.
Second Vice President/Investments Debra K. Pellman
Second Vice President/Investments Robert Saunders
Second Vice President/Investments J. Alan Schork
Second Vice President/Investments Brad H. Seibel
Second Vice President/Investments Michael B. Simpson
Second Vice President/Investments Jon L. Skaggs
Second Vice President/Investments James A. Skufca
Second Vice President/Investments Robert A. Smedley
Second Vice President/Investments Bradley L. Stofferahn
Second Vice President/Investments Randall K. Waddell
Second Vice President/Investments Marcia Weiland
Second Vice President/Investments Tammy C. Wetterer
Second Vice President/Special Markets Kim A. Bivins
Second Vice President/Special Markets Gregory Lee Chapman
Second Vice President/Special Markets John B. Cobb, III
Second Vice President/Special Markets Gregory M. Curry
Second Vice President/Special Markets Julie Ford
Second Vice President/Special Markets Lauren M. S. Kaltman
Second Vice President/Special Markets Rosa Marie Mathison
Second Vice President/Special Markets Paul Farley Olschwanger
Second Vice President/Special Markets Lisa L. Patterson
Second Vice President/Special Markets Rhonda L. Pritchett
<PAGE>
Second Vice President/Special Markets Kris A. Robbins
Second Vice President/Special Markets Prentice J. Siegel
Second Vice President/Special Markets Harvey Willis
Second Vice President/Special Markets Thomas E. Walsh
Second Vice President and Assistant
Secretary Edward P. Reiter
Assistant Secretary L. Jude Clark
Assistant Secretary Mary Ann Malinyak
Assistant Secretary Colleen S. Lyons
Assistant Secretary John F. Reesor
Assistant Secretary Kimberly A. Scouller
Assistant Secretary R. Michael Slaven
Assistant Secretary Carolyn Wetterer
Product Compliance Officer James T. Bradley
Advertising Compliance Officer Nancy E. Partington
DIRECTORS:
- ---------
Dennis E. Brady Julie S. Congdon Martin Renninger
David J. Miller Susan E. Martin Ellen S. Rosen
Thomas B. Nesspor Kevin P. McGlynn Paul Yakulis
John C. Prestwood, Jr.
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT.
The Depositor, Providian Life and Health Insurance Company ("Providian Life and
Health"), is directly and indirectly wholly owned by Providian Corporation. The
Registrant is a segregated asset account of Providian Life and Health.
The following chart indicates the persons controlled by or under common control
with Providian Life and Health:
<TABLE>
<CAPTION>
Jurisdiction of
Name Incorporation Percent of Voting Securities Owned
<S> <C> <C>
Providian Corporation Delaware 100% Publicly Owned
Providian Agency Group, Inc. Kentucky 100% Providian Corporation
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Peoples Security Life
Insurance Company North Carolina 100% Capital General Development Corp.
Agency Holding II, Inc. Delaware 100% Peoples Security Life Insurance
Company
Agency Investments II, Inc. Delaware 100% Agency Holding II, Inc.
Agency Holding III, Inc. Delaware 100% Peoples Security Life Insurance
Company
Ramada Inn Coliseum
Operating Company Mississippi 100% Peoples Security Life Insurance Co.
Agency Investments III, Inc. Delaware 100% Agency Holding III, Inc.
Ammest Realty Corporation Texas 100% Peoples Security Life Insurance
Company
Providian Assignment Corporation Kentucky 100% Providian Corporation
Providian Capital Management,
Inc. Delaware 100% Providian Corporation
Providian Capital Management
Real Estate Services, Inc. Delaware 100% Providian Capital Management, Inc.
Capital Real Estate
Development Corporation Delaware 100% Providian Corporation
KB Currency Advisors, Inc. Delaware 33 1/3% Capital Real Estate Development
Corporation
33 1/3% Jonathan M. Berg
33 1/3% Andrew J. Krieger
Capital General
Development Corporation Delaware 100% Providian Corporation
Commonwealth Life Insurance
Company Kentucky 100% Capital General Development
Corporation
Agency Holding I, Inc. Delaware 100% Commonwealth Life Insurance Company
Agency Investments I, Inc. Delaware 100% Agency Holding I, Inc.
Commonwealth Agency, Inc. Kentucky 100% Commonwealth Life Insurance Company
Capital 200 Block Corporation Delaware 100% Providian Corporation
Providian Services, Inc. Pennsylvania 100% Providian Corporation
Providian Securities
Corporation Pennsylvania 100% Capital Values Financial Services,
Inc.
Wannalancit Corp. Massachusetts 100% Providian Corporation
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Capital Broadway Corporation Kentucky 100% Providian Corporation
Providian Investment
Advisors, Inc. Delaware 100% Providian Corporation
Capital Security Life
Insurance Company North Carolina 100% Providian Corporation
Company
Independence Automobile
Association, Inc. Florida 100% Capital Security Life Insurance
Company
Independence Automobile
Club, Inc. Georgia 100% Capital Security Life Insurance
Company
Southlife, Inc. Tennessee 100% Providian Corporation
Providian Bancorp, Inc. Delaware 100% Providian Corporation
First Deposit Service
Corporation California 100% Providian Bancorp, Inc.
First Deposit Life
Insurance Company Arkansas 100% Providian Bancorp, Inc.
First Deposit National Bank United States 100% Providian Bancorp, Inc.
Winnisquam Community
Development Corporation New Hampshire 96% First Deposit National Bank
4% First New Hampshire Bank
Providian National Bank United States 100% Providian Bancorp, Inc.
Providian National Bancorp California 100% Providian Bancorp, Inc.
Commonwealth Premium Finance California 100% Providian National Bancorp
Providian Credit Services, Inc. Utah 100% Providian Bancorp, Inc.
Providian Insurance Agency, Inc. Pennsylvania 100% Providian Corporation
National Home Life
Corporation Pennsylvania 100% Providian Insurance Agency, Inc.
Compass Rose Development
Corporation Pennsylvania 100% Providian Insurance Agency, Inc.
Association Consultants, Inc. Illinois 100% Providian Insurance Agency, Inc.
Valley Forge Associates, Inc. Pennsylvania 100% Providian Insurance Agency, Inc.
Veterans Benefits Plans, Inc. Pennsylvania 100% Providian Insurance Agency, Inc.
Veterans Insurance Services,
Inc. Delaware 100% Providian Insurance Agency, Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Financial Planning
Services, Inc. Washington, D. C. 100% Providian Insurance Agency, Inc.
Providian Auto and
Home Insurance Company Missouri 100% Providian Corporation
Academy Insurance Group,
Inc. Delaware 100% Providian Auto and Home Insurance
Company
Academy Life Insurance
Company Missouri 100% Providian Corporation
Pension Life Insurance
Company of America New Jersey 100% Academy Insurance Group, Inc.
Academy Services, Inc. Delaware 100% Academy Insurance Group, Inc.
Ammest Development
Corporation, Inc. Kansas 100% Academy Insurance Group, Inc.
Ammest Insurance Agency, Inc. California 100% Academy Insurance Group, Inc.
Ammest Massachusetts
Insurance Agency, Inc. Massachusetts 100% Academy Insurance Group, Inc.
AMMEST Realty, Inc. Pennsylvania 100% Academy Insurance Group, Inc.
AMPAC, Inc. Texas 100% Academy Insurance Group, Inc.
Ampac Insurance Agency, Inc. Pennsylvania 100% Academy Insurance Group, Inc.
Data/Mark Services, Inc. Delaware 100% Academy Insurance Group, Inc.
Force Financial Group, Inc. Delaware 100% Academy Insurance Group, Inc.
Force Financial Services, Inc. Massachusetts 100% Force Financial Group, Inc.
Military Associates, Inc. Pennsylvania 100% Academy Insurance Group, Inc.
NCOAA Management Company Texas 100% Academy Insurance Group, Inc.
NCOA Motor Club, Inc. Georgia 100% Academy Insurance Group, Inc.
Unicom Administrative
Services, Inc. Pennsylvania 100% Academy Insurance Group, Inc.
Unicom Administrative
Services GmbH Germany 100% Unicom Administrative Services, Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Providian Property and
Casualty Insurance Company Kentucky 100% Providian Auto and Home Insurance
Company
Providian Fire Insurance
Company Kentucky 100% Providian Property and Casualty
Insurance Company
Capital Liberty, L.P. Delaware 5% Providian Corporation (General
Partnership Interests)
76% Commonwealth Life Insurance Company
(Limited Partnership Interests)
19% Peoples Security Life Insurance
Company (Limited Partnership Interests)
Providian Life and Health
Insurance Company Missouri 4% Providian Corporation
61% Commonwealth Life Insurance Company
20% Capital Liberty, L.P.
15% Peoples Security Life Insurance Company
Veterans Life Insurance Company Illinois 100% Providian Life and Health Insurance
Company
First Providian Life and
Health Insurance Company New York 100% Veterans Life Insurance Company
Benefit Plans, Inc. Delaware 100% Providian Corporation
DurCo Agency, Inc. Virginia 100% Benefit Plans, Inc.
Providian Mauritius Ltd. Mauritius 100% Providian Corporation
Providian LLC. British West
Indies 100% Providian Corporation
</TABLE>
<PAGE>
ITEM 27. NUMBER OF CONTRACT OWNERS
As of December 10, 1996, there were 691 Adivsor's Edge Contract Owners and to
date there are no PGA Retirement Annuity Contract Owners.
ITEM 28. INDEMNIFICATION
Item 28 is incorporated by reference from the Post-Effective Amendment No. 6 to
the Registration Statement of the National Home Life Assurance Company Separate
Account II, File No. 33-7033.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Providian Securities Corporation, which serves as the principal
underwriter for the variable annuity contracts funded by Separate
Account V, also serves as the principal underwriter for variable life
insurance policies funded by Separate Account I and for Separate
Account II of Providian Life and Health.
(b) Directors and Officers
<TABLE>
<CAPTION>
Positions and Officers
Name with Underwriter
---- ----------------------
<S> <C>
Jeffrey P. Lammers President, Assistant Secretary
and Director
Kimberly A. Scouller Vice President and Chief Compliance Officer
John P. Fendig Vice President & Assistant Compliance Officer
Michael F. Lane Vice President
Harvey E. Willis Vice President and Secretary
Sarah J. Strange Vice President
Gregory J. Garvin Vice President
Elaine J. Robinson Treasurer
Michael G. Ayers Controller
Robert L. Walker Director
Frederick C. Kessell Director
Mark Nerderman Vice President
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The books, accounts and other documents required by Section 31(a) under the
Investment Company Act and the rules promulgated thereunder will be maintained
in the Administrative Offices of Providian Life and Health in Louisville,
Kentucky.
ITEM 31. MANAGEMENT SERVICES
All management contracts are discussed in Part A or Part B.
ITEM 32. UNDERTAKINGS.
(a) The Registrant hereby undertakes to file a post-effective amendment to
this registration statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are never more than
16 months old for so long as payments under the variable annuity contracts may
be accepted;
(b) The Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
postcard or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of Additional
Information;
(c) The Registrant hereby 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.
<PAGE>
(d) The Registrant hereby undertakes to rely on the no-action letter dated
November 28, 1988 (Ref. No. IP-6-88) with respect to language concerning
withdrawal restrictions applicable to Code Section 403(b) plans. Providian Life
and Health has complied with conditions 1 through 4 of the no-action letter.
(e) The Registrant hereby undertakes that no Director has resigned due to a
disagreement with the Registrant or any matter relating to the Separate
Account's operations, policies or practices.
(f) Providian Life and Health Insurance Company represents that the fees
and charges deducted under the contracts 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 Providian Life and Health
Insurance Company.
<PAGE>
SIGNATURES
AS REQUIRED BY THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF
1940, THE REGISTRANT, PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY SEPARATE
ACCOUNT V, CERTIFIES THAT IT MEETS THE REQUIREMENT OF SECURITIES ACT RULE
485(B) FOR EFFECTIVENESS OF THIS AMENDED REGISTRATION STATEMENT AND HAS CAUSED
THIS AMENDED REGISTRATION STATEMENT TO BE SIGNED IN THE COUNTY OF CHESTER AND
COMMONWEALTH OF PENNSYLVANIA ON THE 30TH DAY OF JANUARY, 1997.
PROVIDIAN LIFE AND HEALTH INSURANCE
COMPANY SEPARATE ACCOUNT V
(Registrant)
By: Providian Life and Health Insurance
Company
/s/ David J. Miller*
By: ______________________________
David J. Miller, President
PROVIDIAN LIFE AND HEALTH INSURANCE
COMPANY (DEPOSITOR)
/s/ David J. Miller*
By: ______________________________
David J. Miller, President
/s/ R. Michael Slaven
* By: ______________________________
R. Michael Slaven
Attorney-in-fact
13
<PAGE>
AS REQUIRED BY THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS
BEEN DULY SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES
INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Shailesh J. Mehta* Chief Executive Officer January 30, 1997
____________________________________
Shailesh J. Mehta
/s/ David J. Miller* Director, President and January 30, 1997
____________________________________ Chief Operating Officer
David J. Miller
/s/ Thomas B. Nesspor* Director and Vice President January 30, 1997
____________________________________
Thomas B. Nesspor
/s/ Dennis E. Brady* Director, Senior Vice President, January 30, 1997
____________________________________ Treasurer and Senior Financial
Dennis E. Brady Officer (Chief Accounting Officer)
/s/ Julie S. Congdon* Director, Vice President January 30, 1997
____________________________________ & Associate General Counsel
Julie S. Congdon
/s/ Susan E. Martin* Director, Vice President January 30, 1997
____________________________________ & Secretary
Susan E. Martin
/s/ Kevin P. McGlynn* Director & Senior Vice President January 30, 1997
____________________________________
Kevin P. McGlynn
/s/ John C. Prestwood, Jr.* Director, Vice President & Actuary January 30, 1997
____________________________________
John C. Prestwood, Jr.
/s/ Martin Renninger* Director & Senior Vice President January 30, 1997
____________________________________
Martin Renninger
/s/ Ellen S. Rosen* Director, Vice President January 30, 1997
____________________________________ & Associate General Counsel
Ellen S. Rosen
/s/ Paul Yakulis* Director & Senior Vice President January 30, 1997
____________________________________
Paul Yakulis
</TABLE>
*By: /s/ R. Michael Slaven
---------------------
R. Michael Slaven
Attorney-in-fact
14
<PAGE>
POWER OF ATTORNEY
-----------------
We the undersigned officers and directors of Providian Life and Health
Insurance Company, hereby severally constitute and appoint James V. Elliott,
Kimberly A. Scouller, and R. Michael Slaven, and each of them signly, our true
and lawful attorney will full power to them and each of them to sign for us, and
in our names in the capacities indicated below, any and all registration
statements to be filed with the Securities and Exchange Commission, and any and
all amendments thereto (including specifically, without limitation,
post-effective amendments), for the purposes of registering variable annuity
and/or life variable insurance contracts of Providian Life and Health Insurance
Company for sale pursuant to the Securities Act of 1933.
Witness our hands on the date set forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Dennis E. Brady Director, Senior Vice President January 21, 1997
- -------------------------- Treasurer and Senior Financial
Dennis E. Brady Officer
/s/ Julie S. Congdon Director, Vice President and January 21, 1997
- -------------------------- Associate General Counsel
Julie S. Congdon
/s/ Susan E. Martin Director, Vice President and January 21, 1997
- -------------------------- Secretary
Susan E. Martin
/s/ Kevin P. McGlynn Director and Senior Vice January 21, 1997
- -------------------------- President
Kevin P. McGlynn
/s/ David J. Miller Director, President and Chief January 21, 1997
- -------------------------- Operating Officer
David J. Miller
/s/ Thomas B. Nesspor Director and Vice President January 21, 1997
- --------------------------
Thomas B. Nesspor
/s/ John C. Prestwood, Jr. Director, Vice President and January 21, 1997
- -------------------------- Actuary
John C. Prestwood, Jr.
/s/ Martin Renninger Director and Senior Vice January 21, 1997
- -------------------------- President
Martin Renninger
/s/ Ellen S. Rosen Director, Vice President and January 21, 1997
- -------------------------- Associate General Counsel
Ellen S. Rosen
/s/ Paul Yakulis Director and Senior Vice January 21, 1997
- -------------------------- President
Paul Yakulis
/s/ Shailesh J. Mehta Chief Executive Officer January 21, 1997
- --------------------------
Shailesh J. Mehta
</TABLE>
<PAGE>
SEPARATE ACCOUNT V
THE PGA RETIREMENT VARIABLE ANNUITY
INDEX TO EXHIBITS
EXHIBIT 9(a) OPINION AND CONSENT OF COUNSEL
EXHIBIT 9(b) CONSENT OF COUNSEL
EXHIBIT 10 CONSENT OF INDEPENDENT AUDITORS
<PAGE>
[LETTERHEAD OF PROVIDIAN CORPORATION]
EXHIBIT 9(a)
January 23, 1997
Providian Life and Health Insurance Company
Administrative Offices
20 Moores Road
Frazer, Pennsylvania 19355
RE: PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SEPARATE ACCOUNT V (PGA RETIREMENT ANNUITY) - OPINION AND CONSENT
To Whom It May Concern:
This opinion and consent is furnished in connection with the filing of Post-
Effective Amendment No. 6 (the "Amendment") to the Registration Statement on
Form N-4, File No. 33-80958 (the "Registration Statement") under the Securities
Act of 1933, as amended (the "Act"), of Providian Life and Health Insurance
Company Separate Account V ("Separate Account V"). Separate Account V receives
and invests premiums allocated to it under a flexible premium multi-funded
annuity contract (the "Annuity Contract"). The Annuity Contract is offered in
the manner described in the prospectus contained in the Registration Statement
(the "Prospectus").
In my capacity as legal adviser to Providian Life and Health Insurance Company,
I hereby confirm the establishment of Separate Account V pursuant to a
resolution adopted by the Board of Directors of Providian Life and Health
Insurance Company for a separate account for assets applicable to the Annuity
Contract, pursuant to the provisions of Section 376.309 of the Missouri
Insurance Statutes. In addition, I have made such examination of the law in
addition to consultation with outside counsel and have examined such corporate
records and such other documents as I consider appropriate as a basis for the
opinion hereinafter expressed. On the basis of such examination, it is my
professional opinion that:
1. Providian Life and Health Insurance Company is a corporation duly organized
and validly existing under the laws of the State of Missouri.
2. Separate Account V is an account established and maintained by Providian
Life and Health Insurance Company pursuant to the laws of the State of
Missouri, under which income, capital gains and capital losses incurred on
the assets of Separate Account V are credited to or charged against the
assets of Separate
<PAGE>
Providian Life and Health Insurance Company
Separate Account V
January 23, 1997
Page 2
Account V, without regard to the income, capital gains or capital
losses arising out of any other business which Providian Life and Health
Insurance Company may conduct.
3. Assets allocated to Separate Account V will be owned by Providian Life and
Health Insurance Company. The assets in Separate Account V attributable to
the Annuity Contract generally are not chargeable with liabilities arising
out of any other business which Providian Life and Health Insurance Company
may conduct. The assets of Separate Account V are available to cover the
general liabilities of Providian Life and Health Insurance Company only to
the extent that the assets of Separate Account V exceed the liabilities
arising under the Annuity Contracts.
4. The Annuity Contracts have been duly authorized by Providian Life and
Health Insurance Company and, when sold in jurisdictions authorizing such
sales, in accordance with the Registration Statement, will constitute
validly issued and binding obligations of Providian Life and Health
Insurance Company in accordance with their terms.
5. Owners of the Annuity Contracts as such, will not be subject to any
deductions, charges or assessments imposed by Providian Life and Health
Insurance Company other than those provided in the Annuity Contract.
I hereby consent to the use of this opinion as an exhibit to the Amendment and
to the reference to my name under the heading "Legal Matters" in the Prospectus.
Very truly yours,
/s/ Kimberly A. Scouller
Kimberly A. Scouller
Assistant General Counsel
/maz
<PAGE>
EXHIBIT 9(b)
JORDEN BURT BERENSON & JOHNSON LLP
1025 THOMAS JEFFERSON STREET, N.W.
SUITE 400-EAST
WASHINGTON, D.C. 20007-0805
(202) 965-8100
TELECOPIER (202) 965-8104
January 30, 1997
Providian Life and Health
Insurance Company
20 Moores Road
Frazer, Pennsylvania 19355
Ladies and Gentlemen:
We hereby consent to the reference to our name under the caption "Legal
Matters" in the Prospectus contained in Post-Effective Amendment No. 6 to the
Registration Statement on Form N-4 (file No.33-80958) filed by Providian Life
and Health Insurance Company and Providian Life and Health Insurance Company
Separate Account V with the Securities and Exchange Commission under the
Securities Act of 1933 and the Investment Company Act of 1940.
Very truly yours,
/s/ Jorden Burt Berenson & Johnson LLP
Jorden Burt Berenson & Johnson LLP
<PAGE>
Exhibit No. (10)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Auditors" and to the
use of our report dated April 23, 1996, with respect to the statutory-basis
financial statements of Providian Life and Health Insurance Company in the
Registration Statement (Form N-4, No. 33-80958) and related Prospectus of
Providian Life and Health Insurance Company Separate Account V for the PGA
Retirement Annuity.
/s/ ERNST & YOUNG LLP
Louisville, Kentucky
January 24, 1997
