As filed with the Securities and Exchange Commission on February 25, 1999
<PAGE>
Registration No. 33-49998
811-7042
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. 10 |X|
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 12 |X|
SEPARATE ACCOUNT VA-2L
(Exact Name of Registrant)
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
(Name of Depositor)
1150 South Olive, Los Angeles, CA 90015
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (213) 742-2111
Name and Address of Agent for Service: Copy to:
James W. Dederer, Esquire Frederick R. Bellamy, Esquire
Executive Vice President, General Counsel and Sutherland, Asbill & Brennan, LLP
Corporate Secretary 1275 Pennsylvania Avenue, N.W.
Transamerica Occidental Life Insurance Co. Washington, D.C. 20004-2404
1150 South Olive
Los Angeles, CA 90015
Approximate date of proposed sale to the public: As soon as practicable after
effectiveness of the Registration Statement.
Title of Securities being registered:
Variable Annuity Contracts
It is proposed that this filing will become effective:
|_| immediately upon filing pursuant to paragraph (b)
|_| on pursuant to paragraph (b)
|_| 60 days after filing pursuant to paragraph (a)(i)
|X| on May 1, 1999 pursuant to paragraph (a)(i)
If appropropriate, check the following box:
_____ This Post-Effective Amendment designates a new effective date for
a previously filed Post-Effective Amendment.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495
Showing Location in Part A (Prospectus),
Part B (Statement of Additional Information) and Part C
of Registration Statement Information Required by Form N-4
PART A
<TABLE>
<CAPTION>
Item of Form N-4 Prospectus Caption
<S> <C> <C>
1. Cover Page............................................... Cover Page
2. Definitions.............................................. Definitions
3. Synopsis................................................. Summary
4. Condensed Financial Information.......................... Not Applicable
5. General
(a) Depositor Transamerica Occidental Life
Insurance Company;
Additional Information about
Transamerica
Occidental Life Insurance Company;
(b) Registrant The Variable Account
(c) Portfolio Company The Funds
(d) Fund Prospectus The Funds
(e) Voting Rights Voting Rights
6. Deductions and Expenses..................................
(a) General Charges and Deductions
(b) Sales Load % Contingent Deferred Sales Load
(c) Special Purchase Plan Not Applicable
(d) Commissions Distribution of the Contracts
(e) Fund Expenses The Funds
(f) Operating Expenses Variable Account Fee Table
7. Contracts
(a) Persons with Rights The Contract; Cash
Withdrawals; Death Benefit;
Voting Rights
(b) (i) Allocation of Premium
Payments..................................... Allocation of Purchase Payments
(ii) Transfers.................................... Transfers
(iii) Exchanges.................................... Federal Tax Matters
(c) Changes Addition, Deletion, or
Substitution
(d) Inquiries Summary; Available Information
8. Annuity Period........................................... Annuity Payments
9. Death Benefit............................................ Death Benefit
10. Purchase and Contract Balances
(a) Purchases Contract Application and
Purchase Payments
(b) Valuation Participant Account Value
(c) Daily Calculation Variable Accumulated Value
(d) Underwriter Distribution of the Contracts
11. Redemptions
(a) By Contract Owners Withdrawals; Systematic
Withdrawal Option;
Automatic Payout Option
By Annuitant....................................... Not Applicable
(b) Texas ORP Not Applicable
(c) Check Delay Cash Withdrawals
(d) Lapse Not Applicable
(e) Free Look Definitions; Summary; Contract
Application and
................................................... Purchase Payments
12. Taxes.............................................. Federal Tax Matters
13. Legal Proceedings.................................. Legal Proceedings
14. Table of Contents for the
Statement of
Additional Information................................... Statement of Additional Information Table
of
Contents
PART B
Item of Form N-4 Statement of Additional
Information Caption
15. Cover Page......................................... Cover Page
16. Table of Contents.................................. Table of Contents
17. General Information
and History.............................................. (Prospectus) Transamerica Occidental Life
Insurance Company; (Prospectus)
Additional
Information About Transamerica
Occidental Life
Insurance Company
18. Services...........................................
(a) Fees and Expenses
of Registrant...................................... (Prospectus) Variable Account Fee Table;
(Prospectus) The Funds
(b) Management Contracts (Prospectus) Third Party
Administration
(c) Custodian Records and Reports;
Safekeeping of Account
Assets
Independent Auditors ............................. (Prospectus) Accountants
(d) Assets of Registrant Not Applicable
(e) Affiliated Person Not Applicable
(f) Principal Underwriter Not Applicable
19. Purchase of Securities
Being Offered............................................ (Prospectus) The Contract
Offering Sales Load...................................... (Prospectus) Contingent Deferred Sales
Load
20. Underwriters....................................... (Prospectus) Distribution of the Contracts
21. Calculation of Performance
Data..................................................... (Prospectus) Performance Data; Calculation of
Yields and Total Returns
22. Annuity Payments................................... (Prospectus) Annuity Payments; Annuity
Period
23. Financial Statements............................... Financial Statements
PART C -- OTHER INFORMATION
Item of Form N-4 Part C Caption
24. Financial Statements
and Exhibits............................................. Financial Statements and Exhibits
(a) Financial Statements Financial Statements
(b) Exhibits Exhibits
25. Directors and Officers of
the Depositor............................................ Directors and Officers of the Depositor
26. Persons Controlled By or Under Common Control
with the Depositor or Registrant Persons Controlled By or
Under Common Control
with the Depositor or Registrant
27. Number of Contract Owners.......................... Number of Contract Owners
28. Indemnification.................................... Indemnification
29. Principal Underwriters............................. Principal Underwriters
30. Location of Accounts
and Records.............................................. Location of Accounts and Records
31. Management Services................................ Management Services
32. Undertakings....................................... Undertakings
Signature Page........................................... Signature Page
</TABLE>
<PAGE>
1
PROFILE OF THE
DREYFUS/TRANSAMERICATRIPLE ADVANTAGE(R)VARIABLE AND FIXED ANNUITY
Issued by
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
May 1, 1999
This Profile is a summary of some of the more important points that you should
know and consider before purchasing a Contract. The Contract is more fully
described in the full Prospectus which accompanies this Profile. Please read the
Prospectus carefully.
1. The Annuity Contract. The Dreyfus/Transamerica Triple Advantage is a contract
between you and Transamerica Occidental Life Insurance Company with both
"variable" and "guaranteed" investment options. In the Contract, you can invest,
in your choice of eighteen Sub-Accounts corresponding to eighteen funds
("Portfolios") in the Variable Account or in the Guaranteed Periods of the Fixed
Account from Transamerica. You could gain or lose money you invest in the
Portfolios, but you could also earn more than investing in the Fixed Account
options. Transamerica guarantees the safety of money invested in the Fixed
Account options. The Fixed Account and some of the Portfolios may not be
available in all states.
The Contract is a deferred annuity, which means it has two phases: the
accumulation phase and the annuity phase. During the accumulation phase you can
make additional purchase payments to the Contract, transfer your money among the
investment options, and withdraw some or all of your investment. During this
phase earnings accumulate on a tax-deferred basis for individuals, but if you
withdraw money some or all of it may be taxable. Tax deferral is not available
for corporations and some trusts.
During the annuity phase Transamerica will make periodic payments to
you. The dollar amount of the payments may depend on the amount of money
invested and earned during the accumulation phase (and other factors, such as
age and sex).
2. The Annuity Payments. You can generally decide when to end the accumulation
phase and begin receiving annuity payments from Transamerica. You can choose
fixed annuity payments, where the dollar amount of each payment generally stays
the same, or variable payments that go up or down in dollar amount based on the
investment performance of the Portfolios you select. You can choose among
payments for the lifetime of an individual, or payments for the longer of one
lifetime or a guaranteed period of 10, 15, or 20 years, or payments for one
lifetime and the lifetime of another individual.
3. Purchasing a Contract. Generally, you must invest at least $5,000 to purchase
a Contract, and then you can make more investments of at least $500 each ($100
each if made under the automatic payment plan and deducted from your bank
account). You may cancel your Contract during the Free Look Period. This right
is explained in item 10 on page 4 of this Profile.
The Triple Advantage variable annuity is designed for long-term
tax-deferred accumulation of assets, generally for retirement or other long-term
goals. Individuals in high tax brackets get the most benefit from the tax
deferral feature. You should not make an investment in the Contract for
short-term purposes or if you cannot take the risk of losing some of your
investment.
4. Investment Options. VARIABLE ACCOUNT: You can invest in any of the
Sub-Accounts corresponding to the following eighteen Portfolios:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Money Market Capital Appreciation International Value
Transamerica Growth
Special Value Stock Index Disciplined Stock
Core Value
Zero Coupon 2000 Socially Responsible Growth Small Company Stock
MidCap Stock
Quality Bond Growth and Income Balanced
Small Cap International Equity Limited Term High Income
</TABLE>
These Portfolios are described in their own prospectuses. You
can earn or lose money in any of these Portfolios. All Portfolios may not be
available in all states.
FIXED ACCOUNT: In most states, you can also invest in a Fixed Account
option, where Transamerica guarantees the principal invested plus at least 3%
annual interest.
5. Expenses. The Contract provides many benefits and features that you do not
get with a regular mutual fund. It costs Transamerica money to provide these
benefits, so there are charges in connection with this Contract. If you withdraw
your money within seven years of investing it, there may be a withdrawal charge
of up to 6% of the amount invested. Once each Contract Year we deduct an Account
Fee of no more than $30 (there is no fee if your Account Value is over $50,000).
Insurance and administrative charges of 1.40% per year are charged against your
average daily value in the Variable Account and a $10 fee for transfers over 18
in one year. Advisory fees are also deducted by the Portfolios' manager, and the
Portfolios pay other expenses which, in total, vary from 0. 28% to 1.42% per
year of the amounts in the Portfolios. Finally, there might be premium taxes
ranging from 0 to 3.5% of your investment and/or on amounts you use to purchase
annuity benefits (depending on your state's law).
The following chart shows these charges (except transfer fees premium
taxes). The $30 annual Account Fee is not included in the first column because
the fee is waived for Account Values over $50,000 and the approximate average
Account Value is over $50,000. The third column is the sum of the first two. The
examples in the last two columns show the total amounts you would be charged, in
dollars, if you invested $1000, the investment grew 5% each year, and you
withdrew your entire investment after one year or ten years. Year one includes
the withdrawal charge and year ten does not.
<TABLE>
<CAPTION>
EXAMPLES:
Annual Annual Total Expenses Total Expenses
Portfolio/ Insurance Portfolio Total Annual at end of at end of
Sub-Account Charges Charges Charges One Year Ten Years
- ----------- ------- ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C>
Money Market 1.40% 0.61% 2.01% $74.40 $233.76
Special Value 1.40% 0.99% 2.39% $78.21 $272.63
Zero Coupon 2000 1.40% 0.61% 2.01% $74.40 $233.76
Quality Bond 1.40% 0.75% 2.15% $75.81 $248.27
Small Cap 1.40% 0.78% 2.18% $76.11 $251.35
Capital Appreciation 1.40% 0.80% 2.20% $76.31 $253.39
Stock Index 1.40% 0.28% 1.68% $71.08 $198.70
Socially Responsible 1.40% 0.82% 2.22% $76.51 $255.44
Growth and Income 1.40% 0.80% 2.20% $76.31 $253.39
International Equity 1.40% 1.06% 2.46% $78.91 $279.62
International Value 1.40% 1.42% 2.82% $82.51 $314.73
Disciplined Stock 1.40% 1.02% 2.42% $78.51 $275.63
Small Company 1.40% 1.12% 2.52% $79.51 $285.56
Balanced 1.40% 1.00% 2.40% $78.31 $273.63
Limited Term High Income 1.40% 0.89% 2.29% $77.21 $262.55
Transamerica Growth 1.40% 0.85% 2.25% $76.84 $261.67
CoreValue 1.40% 1.00% 2.40% $78.36 $279.12
MidCap Stock 1.40% 1.00% 2.40% $78.36 $279.12
</TABLE>
The Annual Portfolio Charges above are for 1998 and do not reflect expense
reimbursements or fee waivers, except for the Limited Term High Income and
Transamerica Growth Portfolios. Expenses may be higher or lower in the future.
See the Variable Account Fee Table on page 12 of the Triple Advantage prospectus
for more detailed information.
6. Federal Income Taxes. Individuals generally are not taxed on increases in the
contract value until a distribution occurs (e.g., a withdrawal or annuity
payment) or is deemed to occur (e.g., a pledge, loan, or assignment of the
contract). If you withdraw money, earnings come out first and are taxed.
Generally, some portion (sometimes all) of any distribution or deemed
distribution is taxable as ordinary income. In some cases, income taxes will be
withheld from distributions. If you are under age 59 1/2 when you withdraw
money, an additional 10% federal tax penalty may apply on the withdrawn
earnings. Certain owners that are not individuals may be currently taxed on
increases in the contract, whether distributed or not.
7. Access to Your Money. You can generally take money out at any time during the
accumulation phase. A withdrawal charge of up to 6% of a purchase payment may be
assessed by Transamerica, but no withdrawal charge will be assessed on money
that has been in the Contract for seven years. In certain cases, the withdrawal
charge may be waived if you are in a hospital or nursing home for a long period
or, in some states, if you are diagnosed with a terminal illness. After the
first Contract Year, for only the first withdrawal in a Contract Year, you may
withdraw the greater of accumulated earnings or 15% of Purchase Payments
received at least one but less than seven years ago. Additionally, at any time
you can withdraw accumulated earnings on your purchase payments not previously
withdrawn without a withdrawal charge. (See Page 33 of the prospectus for a more
detailed discussion.)
You may have to pay income taxes on amounts you withdraw and there may also be a
10% tax penalty if you make withdrawals before you are 59 1/2 years old.
If you withdraw money from the Fixed Account option prematurely, you will
generally forfeit some of the interest that you earned, but you will always
receive the principal you invested plus 3% interest.
8. Past Investment Performance. The value of the money you allocate to the
Sub-Account(s) will go up or down, depending on the investment performance of
the Portfolios you pick. The following chart shows the past investment
performance on a year by year basis for each Sub-Account. These figures have
already been reduced by the insurance charges, the account fee, the fund
manager's fee and all the expenses of the mutual fund portfolio, but these
figures do not include the withdrawal charge, which would reduce performance if
it applied. Remember, past performance is no guarantee of future performance or
earnings.
<PAGE>
<TABLE>
<CAPTION>
CALENDAR YEAR
PORTFOLIO/
SUB-ACCOUNT 1997 1996 1995 1994 1993 1992 1991 1990
- ----------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market(1) 3.66% 3.53% 4.21% 3.00% 1.86% 2.71% 4.54% N/A
Special Value(1) 21.36% (5.67%) (0.48%) (3.48%) 26.74% (0.41%) 8.99% N/A
Zero Coupon 2000(1) 5.45% 1.10% 16.35% (5.41%) 13.52% 7.29% 17.14% 6.28%
Quality Bond(1) 7.83% 1.63% 18.91% (6.17%) 13.66% 10.45% 12.47% N/A
Small Cap(1) 15.06% 15.06% 28.84% 4.95% 65.77% 68.98% 156.07% N/A
Capital Appreciation(2) 26.21% 22.71% 32.82% 1.45% N/A N/A N/A N/A
Stock Index(3) 31.05% 19.80% 35.92% (0.60%) 7.75% 5.55% 27.98% (6.52%)
Socially Responsible(4) 26.59% 19.00% 33.67% (0.08%) N/A N/A N/A N/A
Growth and Income(5) 14.53% 18.63% 59.58% N/A N/A N/A N/A N/A
International Equity(5) 8.02% 9.82% 6.62% N/A N/A N/A N/A N/A
International Value(6) 7.13% N/A N/A N/A N/A N/A N/A N/A
Disciplined Stock(6) 29.62% N/A N/A N/A N/A N/A N/A N/A
Small Company Stock(6) 20.01% N/A N/A N/A N/A N/A N/A N/A
Balanced
Limited Term High Income
Transamerica Growth(7) 50.34% 26.63% 53.02% 7.71% 27.73% 13.58% 41.47% (12.58%)
Core Value
MidCap Stock
</TABLE>
12-15-94fo (7)Portfolio Inception 2-26-69ortfolio Inception 9-29-89
(5) Portfolio Inception
(2) Portfolio Inception 4-5-93 (4) Portfolio Inception 10-7-93
(6) Portfolio Inception 5-1-96
Data is for full years only. The figures for the Money Market, Special Value,
Zero Coupon 2000, Quality Bond, Small Cap, Stock Index and Transamerica Growth
Sub-Accounts include data for periods before the Sub-Accounts commenced
operations, based on the actual performance of the corresponding Portfolios
since they commenced operations.
9. Death Benefit. If you or the Annuitant die during the accumulation phase, the
beneficiary is guaranteed by Transamerica to receive a death benefit of at least
the amount you invested (less any amounts you have already withdrawn), even if
your investment has lost money because of the investment performance of the
Portfolios you picked.
The death benefit will be the greatest of: (1), the Account Value; (2)
a seven-year step-up death benefit, which is the highest Account Value on the
most recent seven year anniversary of your purchase of the Contract (adjusted
for additional investments and any withdrawals since that anniversary less
premium taxes applicable to those withdrawals); or (3) your investments, less
withdrawals and any premium taxes applicable to that withdrawal, compounded at
5% annual effective interest (the 5% interest stops when you, your joint Owner,
or the Annuitant reaches age 75, or when it has doubled the amount of your
investment, whichever is earlier).
10. Other Information. The Contract offers other features you might be
interested in. These features may not be available in all states and may not be
suitable for your particular situation. Some of these features include:
FREE LOOK. After you get your Contract, you have ten days to look it
over and decide if it is really right for you (this period may be longer in
certain states). If you decide not to keep the Contract, you can cancel it
during this period, and you will get back the amount of your investment that you
allocated to the Fixed Account and the current value of the amounts you
allocated to the Variable Account (without any withdrawal charges). Certain laws
may require that if you cancel during this period, you are entitled to get back
the greater of your full investment or the Account Value. If one of these laws
apply, then during this "free look" period your investment allocated to the
Variable Account, may be placed in the Money Market Portfolio (depending upon
the state in which the Contract is sold).
TELEPHONE TRANSFERS. You can generally arrange to transfer money between
the investments in your contract by telephone.
DOLLAR COST AVERAGING. You can instruct Transamerica to automatically
transfer amounts from the Purchase Payments you allocated to the Money Market,
Limited Term High Income or Quality Bond Sub-Accounts, or possibly from another
Sub-Account or a Guarantee Period of the Fixed Account, to any of the other
Sub-Accounts each month. Dollar Cost Averaging is intended to give you a lower
average cost per share or unit than a single, one time investment, but it does
not assure a profit or protect against loss and is intended to continue for some
time.
AUTOMATIC ASSET REBALANCING. The performance of each Sub-Account may
cause the allocation of value among the Sub-Accounts to change. You may instruct
Transamerica to periodically automatically rebalance the amounts in the
Sub-Accounts by reallocating amounts among them.
SYSTEMATIC WITHDRAWAL OPTION. You can arrange to have Transamerica send
you money automatically each month out of your Contract during the accumulation
phase. There are limits on the amounts, but the withdrawal charge will not apply
(the payments may be taxable and subject to the penalty tax if you are under age
59 1/2).
AUTOMATIC PAYOUT OPTION. If you have certain Qualified Contract (for
example: a non-Roth IRA), you can arrange to have the minimum distributions
required by the IRS to be automatically paid to you.
11. INQUIRIES. You can get more information and have your questions
answered by writing or calling: Transamerica Annuity Service Center P.O. Box
31848 Charlotte, North Carolina 28231-1848 800-258-4260
<PAGE>
PROSPECTUS FOR THE
Dreyfus/Transamerica Triple Advantage(r) Variable Annuity
A Flexible Purchase Payment Deferred Variable Annuity
Issued By
Transamerica Occidental Life Insurance Company
Offering 18 Sub-Accounts within the Variable Account
Designated as Separate Account VA-2L
In Addition to:
A Fixed Account
* This prospectus contains
information you should
Variable Account Options
Money Market know before investing.
Special Value
Zero Coupon 2000
Quality Bond
* Please keep this prospectus
Small Cap for future reference.
Capital Appreciation
Stock Index
* You can obtain more information about the contract by requesting a copy of the
Statement of Additional Information or SAI dated May 1, 1999. The SAI is Growth
and Income International Equity International Value Disciplined Stock available
free by writing to Transamerica Occidental Life Insurance Company, Annuity
Service Center, P.O. Box 31848, Charlotte, NC 28231-1848 or by calling
800-258-4260. Small Company Stock Balanced Limited Term High Income Portfolios
of Dreyfus Variable Investment Fund Dreyfus Stock Index Fund The Dreyfus
Socially Responsible Growth Fund, Inc. Core Value and MidCap Stock Portfolios of
Dreyfus Investment Portfolios Growth Portfolio of Transamerica Variable
Insurance Fund, Inc.
The current SAI has been filed with the Securities and Exchange Commission
and is incorporated by reference into this prospectus. The table of contents of
the SAI is included on page _____ of this prospectus.
* The SEC's web site is
http://www.sec.gov
* Transamerica's web site is
http://www.transamerica.com
Neither the SEC nor any state securities commission has approved this investment
offering or determined that this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
May 1, 1999
TABLE OF CONTENTS Page
SUMMARY 6
PERFORMANCE DATA 15
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
AND THE VARIABLE ACCOUNT 16
Transamerica Occidental Life Insurance Company 16
Published Ratings 16
The Variable Account 16
THE FUNDS 17
Addition, Deletion or Substitution 20
THE FIXED ACCOUNT 20
THE CONTRACT 21
CONTRACT APPLICATION AND PREMIUMS 21
Purchase Payments 21
Allocation of Purchase Payments 22
Investment Option Limit 22
ACCOUNT VALUE 22
TRANSFERS 23
Before the Annuity Date 23
Possible Restrictions 23
Dollar Cost Averaging 23
Automatic Asset Rebalancing 24
After the Annuity Date 24
CASH WITHDRAWALS 24
Withdrawals 24
Systematic Withdrawal Option 25
Automatic Payout Option 26
DEATH BENEFIT 26
Payment of Death Benefit 26
Designation of Beneficiaries 26
Death of Annuitant Prior to the Annuity Date 27
Death of Owner Prior to the Annuity Date 27
Death of Annuitant or Owner After the Annuity Date 27
CHARGES AND DEDUCTIONS 27
Contingent Deferred Sales Load 27
Administrative Charges 28
Mortality and Expense Risk Charge 28
Purchase Payment Taxes 29
Transfer Fee 29
Systematic Withdrawal Option 29
Taxes 29
Portfolio Expenses 29
Sales in Special Situations 29
ANNUITY PAYMENTS 30
Annuity Date 30
Annuity Payment 30
Election of Annuity Forms and Payment Options 30
Annuity Payment Options 30
Fixed Annuity Payment Option 31
Variable Annuity Payment Option 31
Annuity Forms 31
Alternate Fixed Annuity Rates 32
QUALIFIED CONTRACTS 32
Automatic Payout Option 32
Restrictions under 403(b) Programs 33
FEDERAL TAX MATTERS 33
Introduction 33
Purchase Payments 33
Taxation of Annuities 34
Qualified Policies 36
Possible Change in Taxation 37
Other Tax Consequences 37
DISTRIBUTION OF THE CONTRACT 38
PREPARING FOR THE YEAR 2000 38
LEGAL PROCEEDINGS 38
LEGAL MATTERS 38
ACCOUNTANTS 38
VOTING RIGHTS 39
AVAILABLE INFORMATION 39
APPENDIX A 41
Statement of Additional Information - Table of Contents 41
APPENDIX B 41
Example of Variable Accumulation Unit Value Calculations 41
Example of Variable Annuity Unit Value Calculations 41
Example of Variable Annuity Payment Calculations 41
APPENDIX C 41
Definitions 41
APPENDIX D 41
Condensed Financial Information 41
SUMMARY
You will find a list of definitions of the terms used in this prospectus in
Appendix C on page 44.
The Contract
We designed the flexible premium deferred variable annuity, the contract,
described in this prospectus to aid individuals in long-term financial planning
for retirement or other purposes. You may use the contract:
* with non-qualified plans;
* as an individual retirement annuity that qualifies for special tax treatment
under Code Section 408 and whose initial purchase payment is a rollover or
transfer from a qualified retirement plan receiving special tax treatment under
Code Sections 401(a), 403(b) and 408, a rollover IRA; or
* as an individual retirement annuity that qualifies for special tax treatment
under Code Section 408A and whose initial purchase payment is a rollover,
transfer or conversion from other individual retirement plans issued under
Sections 408 or 408A of the Code, a rollover Roth IRA.
Additionally, with Transamerica's prior permission, you may use the contract:
* as an IRA or Roth IRA whose initial purchase payment is limited to the
contribution limitations of the Code with respect to contributory IRAs or
contributory Roth IRAs under Sections 408 or 408A of the Code;
* as an annuity under Section 403(b) of the Code; and
* with various types of qualified pension and profit-sharing plans under Section
401(a) of the Code.
The Issuer
The contract is issued by Transamerica Occidental Life Insurance Company,
Transamerica, a wholly-owned subsidiary of Transamerica Insurance Corporation of
California, which in turn is a direct subsidiary of Transamerica Corporation.
Our principal office is at 1150 South Olive Street, Los Angeles, California
90015, telephone 213-742-2111.
We will issue the contract as a certificate under a group annuity contract in
some states and as an individual annuity contract in other states. This contract
is not available in all states.
This prospectus does not offer the sub-accounts or the fixed account in any
jurisdiction where they are not allowed to be sold. We do not authorize any
dealer, salesman or other person to give information or make representations not
contained in this prospectus. You should not rely on any information or
representation that is not in this prospectus.
Account Value
We will establish and maintain an account for each individual annuity contract
and for each certificate issued under a group contract. You, as owner, will
receive either an individual annuity contract, or a certificate evidencing your
coverage under a group annuity contract.
Prior to the annuity date, the account value will depend on the investment
experience of each sub-account of the variable account selected by the owner.
This does not apply to the fixed account. All payments and values provided under
the contract when based on the investment experience of the variable account are
variable and are not guaranteed as to dollar amount. Therefore, prior to the
annuity date you, as the owner, bear the entire investment risk for amounts you
allocate to the variable account.
There is no guaranteed or minimum cash surrender value, so the proceeds of a
surrender could be less than the total purchase payments.
Initial Purchase Payment
The initial purchase payment for each contract must generally be at least
$5,000. We will waive this minimum if the contract is sold as a qualified
contract to certain retirement plans. Generally, each additional purchase
payment must be at least $500. We will waive this minimum if you select an
automatic payment plan. In no event, however, may the total of all purchase
payments under a contract exceed $1,000,000 without our prior approval. The
minimum net purchase payment that you may allocate to an sub-account with no
current allocations is $500. The minimum amount that you can allocate to a new
guarantee period is $1,000. See Contract Application and Purchase Payments on
page 21.
The Variable Account
The variable account is a separate account, designated as Separate Account
VA-2L, divided into sub-accounts. Assets of each sub-account are invested in a
specified mutual fund portfolio. Each sub-account uses its assets to purchase,
at their net asset value, shares of a specific series or portfolio of the
following funds:
* Dreyfus Variable Investment Fund;
* Dreyfus Investment Portfolios;
* Growth Portfolio of Transamerica Variable Insurance Fund, Inc.;
* Dreyfus Stock Index Fund; or
* The Dreyfus Socially Responsible Growth Fund, Inc.
The Sub-Accounts
The following eighteen sub-accounts are currently available for investment in
the variable account:
* Money Market * Special Value * Zero Coupon 2000 * Quality Bond * Small Cap *
Capital Appreciation * Stock Index * Socially Responsible Growth * Growth and
Income * International Equity * International Value * Disciplined Stock * Small
Company Stock * Balanced * Limited Term High Income * Transamerica Growth * Core
Value * MidCap Stock Each portfolio has distinct investment objectives and
policies. These are described in the accompanying prospectuses for the funds.
The funds pay their investment adviser and administrators certain fees charged
against the assets of each portfolio. The account value, if any, and the amount
of any variable annuity payments will vary to reflect the investment performance
of all of the sub-accounts you select and the deduction of the charges. See
Charges and Deductions on page 27.
Each portfolio has distinct investment objectives and policies, which are
described in the accompanying prospectuses for the funds. See Charges and
Deductions on page 27. For more information about the funds see The Funds on
page 17 and the accompanying fund's prospectuses.
The Fixed Account
Each amount you initially allocate or transfer to the fixed account will
establish a new guarantee period. Each guarantee period will have its own
guaranteed interest rate with its own expiration date. The minimum interest rate
will be 3% per year. You must allocate at least $1,000 to a new guarantee
period. If you withdraw or transfer amounts from a guarantee period prior to its
expiration date, you will generally be subject to an interest adjustment. This
will reduce the interest credited to the amount withdrawn to 3%, which is the
minimum annual rate.
Investment Option Limit
Currently, you may not elect more than a total of eighteen investment options
over the life of the contract. Investment options include sub-accounts of the
variable account and the fixed account.
Transfers Before the Annuity Date
Prior to the annuity date, you may make transfers between and among the
sub-accounts and the guarantee periods of the fixed account. A "transfer" is the
reallocation of amounts between the guaranteed periods of the fixed account and
the sub-accounts, among the guarantee periods of the fixed account, and among
sub-accounts.
We charge a fee of $10 for each transfer in excess of 18 per contract year. We
exclude transfers under certain programs, which will not count towards the 18
free transfers per contract year. If you transfer amounts from a guarantee
period prior to its expiration date, it will generally be subject to an interest
adjustment. This will reduce the interest credited to 3%, the minimum annual
rate.
Withdrawals
You may withdraw all or part of the cash surrender value on or before the
annuity date. However, amounts you withdraw may be subject to a contingent
deferred sales load, depending on how long the withdrawn purchase payments have
been held under the contract. Amounts you withdraw may be subject to a premium
tax or similar tax, depending upon the state in which the you live. Withdrawals
may further be subject to any federal, state or local income tax, and a penalty
tax. Withdrawals from qualified contracts may be subject to severe restrictions.
Except for rollover IRA's, qualified contracts are sold only with Transamerica's
prior permission. We will generally deduct the annual account fee on a full
surrender of a contract. We will permit only one, and in some states no, partial
withdrawal while the systematic withdrawal option is in effect. If you transfer
amounts from a guarantee period prior to its expiration date, it will generally
be subject to an interest adjustment. This will reduce the interest credited to
3%, the minimum annual rate. See Cash Withdrawals on page 24.
The Contingent Deferred Sales Load
Transamerica does not deduct a sales charge from purchase payments, although we
may deduct premium taxes.
However, if any part of the account value is withdrawn, a contingent deferred
sales load of up to 6% of purchase payments withdrawn may be assessed by
Transamerica to cover certain expenses relating to the sale of the contracts,
including commissions to registered representatives and other promotional
expenses. Transamerica guarantees that the total contingent deferred sales load
will never exceed 6% of the purchase payments.
After we have held a purchase payment for seven contract years, you, as the
owner, may withdraw the remaining purchase payment without a contingent deferred
sales load. You may make withdrawals up to the allowed amount described below
without incurring a contingent deferred sales load each contract year before the
annuity date.
The allowed amount is equal to:
* during the first contract year, the accumulated earnings not previously
withdrawn;
* after you have held your contract for at least one full contract year, for the
first withdrawal, and only the first withdrawal, the sum of
1 100% of purchase payments not previously withdrawn and received at least seven
contract years before the date of withdrawal; plus,
2 the greater of
a) the accumulated earnings not previously withdrawn; or,
b) 15% of purchase payments received at least one but less than seven complete
contract years before the date of withdrawal not reduced to take into account
any withdrawals deemed to be made from such purchase payments.
* after the first contract year, after the first withdrawal in a contract year,
the sum of
1 100% of purchase payments not previously withdrawn and received at least seven
complete contract years before the date of withdrawal; plus,
2 accumulated earnings not previously withdrawn.
Withdrawals will always be made first from accumulated earnings, and then from
purchase payments on a first-in, first-out basis. So, accumulated earnings could
be withdrawn as part of the first withdrawal in a contract year and, therefore,
not be available for withdrawals made later that contract year. The accumulated
earnings, if any, in your account value are always available as the allowed
amount. You cannot withdraw any purchase payment deposited by check until that
check clears.
We will waive the contingent deferred sales load on a withdrawal if the owner is
confined to a hospital or nursing care facility for 45 days (30 days in
Pennsylvania) out of a continuous 60 day period, and if other conditions are
met. Additionally, we will waive the contingent deferred sales load in some
states if the owner is diagnosed with a terminal illness after the first
contract year. The illness must reasonably be expected to result in death within
twelve months. See Contingent Deferred
Sales Load on page 27 and Cash Withdrawals on page 24.
Other Charges and Deductions
We deduct a daily charge referred to as the Mortality and Expense Risk Charge.
This charge is equal to a percentage of the value of the net assets in the
variable account for the mortality and expense risks assumed. The effective
annual rate of this charge is 1.25% of the value of the net assets in the
variable account attributable to your contract. See Mortality and Expense Risk
Charge on page 28. We guarantee that this mortality and expense risk charge will
not be increased.
Transamerica also deducts a daily charge referred to as the Administrative
Expense Charge equal to a percentage of the value of the net assets in the
variable account corresponding to an effective annual rate of 0.15% to help
cover some of the costs of administering the contract and the variable account.
This charge may change, but it is guaranteed not to exceed a maximum effective
annual rate of 0.25%. See Administrative Charges on page 28.
There is also an administrative charge each year for contract maintenance
referred to as the Account Fee. This fee is currently $30, or 2% of the account
value, if less. It will not be assessed for contract years in which the account
value exceeds $50,000 on the last business day of the contract year or as of the
date the contract is surrendered. We will deduct the account fee at the end of
the contract year or when you surrender the contract, if earlier. We may change
the account fee for any contract year. But we guarantee it will not exceed the
lesser of $60 or 2% of the account value.
After the annuity date this fee is referred to as the annuity fee. The annuity
fee is $30 and will not change.
Currently we impose no fee for the systematic withdrawal option. But we reserve
the right to charge for this option in the future.
A $10 charge is imposed for each transfer in excess of eighteen during a
contract year. See Transfer Fee on page 29.
Charges for state premium taxes, including retaliatory premium taxes will be
imposed in some states. Depending on the applicability of such state taxes, we
could deduct the charges from premiums, from amounts withdrawn, and/or from the
annuity purchase amount upon annuitization. See Premium Taxes on page 38.
In addition, if you withdraw or transfer amounts out of a guarantee period of
the fixed account prior to its expiration date, it will generally be subject to
an interest adjustment. This will reduce the interest earned on that amount to
3%, the minimum annual rate.
Variable Account Fee Table
The purpose of this table is to help you understand the various costs and
expenses that the owner will bear directly and indirectly. The table reflects
expenses of the variable account as well as of the portfolios. The table assumes
that the entire account value is in the variable account. The information set
forth should be considered together with the narrative provided under the
heading Charges and Deductions on page 27 of this prospectus, and with the
funds' prospectuses. In addition to the expenses listed below, premium taxes may
be applicable.
Contract Transaction Expenses(1)
Sales Charge Imposed on Purchase Payments 0
Maximum Contingent deferred sales load(2) 6%
Range of Contingent Deferred Sales Load Over Time
Contract Years Since
Purchase Payments Receipt
Contingent Deferred
Sales Load
Less than 2 years
6%
2 years but less than 4 years 5% 4 years but less than 6 years 4% 6 years but
less than 7 years 2% 7 or more 0%
Other Contract Expenses
Transfer Fee (first 18 per Contract Year)3 0
Systematic Withdrawal Fee 0
Account Fee4 $30
Variable Account Annual Expenses1
Mortality and Expense Risk Charges 1.25%
Adminitrative Expense Charge5 0.15%
Other Fees and Expenses of the Variable Account 0.00%
Total Variable Account Annual Expenses 1.40%
Portfolio Annual Expenses
(as a percentage of assets after fee waiver and/or expense reimbursement)(6)
Portfolios
Management
Fee
Other
Expenses
Total Portfolio
Annual Expense
Money Market
0.50%
0.11%
0.61%
Special Value
0.75%
0.24%
0.99%
Zero Coupon 2000
0.45%
0.16%
0.61%
Quality Bond
0.65%
0.10%
0.75%
Small Cap
0.75%
0.03%
0.78%
Capital Appreciation
0.75%
0.05%
0.80%
Stock Index Fund
0.25%
0.03%
0.28%
Socially Responsible Growth Fund
0.75%
0.07%
0.82%
Growth and Income
0.75%
0.05%
0.80%
International Equity
0.75%
0.31%
1.06%
International Value
1.00%
0.42%
1.42%
Disciplined Stock
0.75%
0.27%
1.02%
Small Company Stock
0.75%
0.37%
1.12%
Balanced
0.75%
0.25%
1.00%
Limited Term High Income
0.65%
0.24%
0.89%
Transamerica Growth
0.75%
0.10%
0.85%
Core Value
0.75%
0.25%
1.00%
MidCap Stock
0.75%
0.25%
1.00%
Expense information regarding the portfolios has been provided by the funds.
Transamerica has no reason to doubt the accuracy of the information, but has not
verified those figures. In preparing the table above and the examples that
follow, Transamerica has relied on the figures provided by the funds. These
figures are for the year ended December 31, 1998. Actual expenses in future
years may be higher or lower than the figures above.
Notes to Fee Table:
1. The contract transaction expenses apply to each contract, regardless of how
account value is allocated between the variable account and the fixed account.
The variable account annual expenses do not apply to the fixed account.
2. You may withdraw a portion of the purchase payments each year after the first
contract year without any contingent deferred sales load, or CDSL. After we have
held a purchase payment for seven contract years, you may withdraw the remaining
purchase payments without any contingent deferred sales load. You may always
withdraw accumulated earnings without a CDSL.
3. We will charge a transfer fee of $10 for each transfer in excess of 18 in a
contract year. We may also charge a fee of up to $25 per year if you elect the
systematic withdrawal option.
4. The current annual account fee per contract year is the lesser of $30 or 2%
of the account value. We may change the fee annually, but it will not exceed the
lesser of $60, or 2% of the account value. The current annual administrative
expense charge is 0.15%. We may increase it to 0.25%.
5. From time to time, each portfolio's investment adviser, in its sole
discretion, may waive all or part of its fees and/or voluntarily assume certain
portfolio expenses. The expenses shown in the above portfolio annual expenses
table reflect the portfolio's adviser's waiver of fees or reimbursement of
expenses, if applicable, for calendar year 1998. We anticipate that such waivers
and reimbursements will continue for calendar year 1999. Without such waivers or
reimbursements, the management fee, other expenses and total portfolio annual
expenses for 1998 would have been, as a percentage of assets, _____%, ____% and
_____% for Transamerica Growth Portfolio and _____%, ______%, and _____% for
Limited Term High Income Portfolio, respectively.
Examples*
* The following three examples reflect no account fee deduction because the
approximate average account value is more than $50,000. The account fee is
waived for account values over $50,000. The examples assume that the entire
account value is allocated to the variable account.
* These examples all assume that no transfer fees, systematic withdrawal fee or
premium tax have been assessed. Purchase Payment taxes may be applicable. See
Purchase Payment Taxes on page 29.
* These examples show expenses without reflecting fee waivers and reimbursements
for 1998. Except for the Limited Term High Income and Transamerica Growth
Portfolios, it is not anticipated that there will be any fee waivers or expense
reimbursements in the future.
Example 1
If you surrender the contract at the end of the applicable time period, you
would pay the following expenses on a $1,000 initial purchase payment assuming a
5% annual return on assets:
Variable Sub-Accounts
1 Year
3 Years
5 Years
10 Years
Money Market
$71.40
$105.05
$141.94
$233.76
Special Value
$75.21
$117.05
$161.55
$272.63
Zero Coupon 2000
$71.40
$105.55
$141.94
$233.76
Quality Bond
$72.81
$109.80
$149.39
$248.27
Small Capital
$73.11
$110.71
$150.95
$251.35
Capital Appreciation
$73.31
$111.32
$151.96
$253.39
Stock Index
$68.08
$ 95.46
$124.16
$198.70
Socially Responsible Growth
$73.51
$111.92
$152.98
$255.44
Growth Income
$73.31
$111.32
$151.96
$253.39
International Equity
$75.91
$119.15
$165.05
$279.62
International Value
$79.51
$129.90
$182.89
$314.73
Disciplined Stock
$75.51
$117.95
$163.05
$275.63
Small Company Stock
$76.51
$120.95
$168.05
$285.56
Balanced Fund
$75.31
$117.35
$162.05
$273.63
Limited Term High Income
$74.21
$114.03
$156.51
$262.55
Transamerica Growth Fund
$73.84
$113.08
$154.87
$261.67
Core Value
$75.36
$117.78
$162.95
$279.12
MidCap Stock
$75.36
$117.78
$162.95
$279.12
Example 2
If you do not surrender and you do not annuitize the contract, you would pay the
following expenses on a $1,000 initial purchase payment assuming a 5% annual
return on assets:
Variable Sub-Accounts
1 Year
3 Years
5 Years
10 Years
Money Market
$20.40
$63.05
$108.29
$233.76
Special Value
$24.21
$74.55
$127.55
$272.63
Zero Coupon 2000
$20.40
$63.05
$108.29
$233.76
Quality Bond
$21.81
$67.30
$115.43
$248.27
Small Capital
$22.11
$68.21
$116.95
$251.35
Capital Appreciation
$22.31
$68.82
$117.96
$253.39
Stock Index
$17.08
$52.96
$91.26
$198.70
Socially Responsible Growth
$22.51
$69.42
$118.98
$255.44
Growth Income
$22.31
$68.82
$117.96
$253.39
International Equity
$24.91
$76.65
$131.05
$279.62
International Value
$28.51
$87.40
$148.89
$314.73
Disciplined Stock
$24.51
$75.45
$129.05
$275.63
Small Company Stock
$25.51
$78.45
$134.05
$285.56
Balanced Fund
$24.31
$74.85
$128.05
$273.63
Limited Term High Income
$23.21
$71.53
$122.51
$262.55
Transamerica Growth Fund
$22.84
$70.58
$121.22
$261.67
Core Value
$24.36
$75.28
$129.30
$279.12
MidCap Stock
$24.36
$75.28
$129.30
$279.12
Example 3
If you elect to annuitize at the end of the applicable period under an annuity
form with life contingencies,** you would pay the following expenses on a $1,000
initial purchase payment assuming a 5% annual return on assets:
Variable Sub-Accounts
1 Year
3 Years
5 Years
10 Years
Money Market
$71.40
$63.05
$108.29
$233.76
Special Value
$75.21
$74.55
$127.55
$272.63
Zero Coupon 2000
$71.40
$63.05
$108.29
$233.76
Quality Bond
$72.81
$67.30
$115.43
$248.27
Small Capital
$73.11
$68.21
$116.95
$251.35
Capital Appreciation
$73.31
$68.82
$117.96
$253.39
Stock Index
$68.08
$52.96
$91.26
$198.70
Socially Responsible. Growth
$73.51
$69.42
$118.98
$255.44
Growth Income
$73.31
$68.82
$117.96
$253.39
International Equity
$75.91
$76.65
$131.05
$279.62
International Value
$79.51
$87.40
$148.89
$314.73
Disciplined Stock
$75.51
$75.45
$129.05
$275.63
Small Company Stock
$76.51
$78.45
$134.05
$285.56
Balanced Fund
$75.31
$74.85
$128.05
$273.63
Limited Term High Income
$74.21
$71.53
$122.51
$262.55
Transamerica Growth Fund
$73.84
$70.58
$121.22
$261.67
Core Value
$75.36
$75.28
$129.30
$279.12
MidCap Stock
$75.36
$75.28
$129.30
$279.12
*In preparing the examples above, we have relied on the data provided by the
funds. Transamerica has no reason to doubt the accuracy of that information.
However, we have not verified those figures.
**For annuitizations before the third contract anniversary, or for annuitization
under a form that does not include life contingencies, a contingent deferred
sales load may apply.
You should not consider these examples to represent past or future expenses.
Actual expenses paid may be greater or less than those shown, subject to the
guarantees in the contract. The assumed 5% annual return is only hypothetical.
It is not a representation of past or future returns. Actual returns could be
greater or less than this assumed rate.
Annuity Payments
We will make annuity payments either on a fixed basis or a variable basis, or a
combination of a fixed and variable basis, as you select. You have flexibility
in choosing the annuity date. In no event may the annuity date be later than the
first day of the month immediately preceding the month of your 85th birthday or
the first day of the month coinciding with or next following the tenth contract
anniversary, whichever occurs last. This extension of the annuity date to the
tenth contract anniversary may not be available in all states. The annuity date
cannot be earlier than the first day of the month coinciding with or immediately
following the third contract anniversary, except for qualified contracts. We
will begin annuity payments on the first day of the calendar month following the
annuity date.
You have a choice of four annuity forms:
(1) Life Annuity;
(2) Life and Contingent Annuity;
(3) Life Annuity with Period Certain; and
(4) Joint and Survivor Annuity.
Payments on Death Before the Annuity Date
The death benefit will be equal to the greatest of:
1. the Account Value;
2. a seven-year step-up benefit, which is the greatest account value determined
as of the seventh contract anniversary and at each succeeding contract
anniversary occurring at seven year intervals thereafter (adjusted for
additional purchase payments and withdrawals since that anniversary, less
premium taxes applicable to those withdrawals); or
3. purchase payments, less withdrawals and premium taxes applicable to those
withdrawals, compounded at 5% annual effective interest rate (the 5% interest
stops when an owner or the annuitant reaches age 75, or when it has doubled the
amount of your investment, less withdrawals and any premium taxes applicable to
those withdrawals, whichever is earlier).
We will generally pay the death benefit within seven days of receipt of the
required proof of death of the owner or the annuitant. We must have sufficient
information about the beneficiary to make the payment. We must receive the
beneficiary's election of the method of settlement. If we receive no election of
the settlement method, we will pay the death benefit no later than one year from
the date of death. We do not charge a contingent deferred sales load or interest
adjustment. The beneficiary may elect to receive the death benefit as either a
lump sum or as an annuity.
Federal Income Tax Consequences
An owner who is a natural person, meaning an individual, rather than a
corporation or trust, generally should not be taxed on increases in the account
value until a distribution under the contract occurs. A withdrawal or annuity
payment, for example, would qualify as a distribution, thereby triggering a
taxable event. A deemed distribution would also trigger a taxable event. Deemed
distributions occur when owners pledge, loan, or assign a contract as
collateral.
Generally, a portion, up to 100%, of any distribution or deemed distribution is
taxable as ordinary income. The taxable portion of distributions is generally
subject to income tax withholding unless the recipient elects otherwise.
Mandatory withholding may apply for certain qualified contracts. In addition, a
federal penalty tax may apply to certain distributions or deemed distributions.
Right to Cancel
You have the right to examine the contract for a limited period, known as a free
look period. You can cancel the contract by delivering or mailing a written
notice of cancellation, or sending a telegram to the service center. You must
return the contract before midnight of the tenth day (or longer if required by
state law) after you receive the contract. If you give us notice and return the
contract by mail, notice will be effective on the date we receive the mail. The
amount of the refund may depend on the state of issuance. In most cases, we will
refund the purchase payments allocated to the fixed account plus the variable
accumulated value as of the date we receive the written notice and the contract.
In other cases, including all IRAs or when the owner is a certain age in certain
states, we will refund the greater of the purchase payments or the account value
as of the date we receive the written notice and the contract. In certain
situations, we will allocate the purchase payments received before or during the
free look period among the guarantee periods of the fixed account and
sub-accounts of the variable account in accordance with your instructions. In
certain situations, when we receive the purchase payments before or during the
free look period which you have allocated to the fixed account, we will allocate
the purchase payments to the guarantee periods as you instructed. But if you
allocate the purchase payments to the sub-accounts of the variable account, we
will hold them in the money market sub-account until the estimated end of the
free look period (allowing 5 days for delivery of the contract by mail). You
should consult your registered representative or investment adviser (or see
their contract) for the applicable provision. See Application and Purchase
Payments page 28 and Account Value page 30.
You may request more information by writing:
Transamerica Annuity Service Center
P.O. Box 31848
Charlotte, North Carolina
28231-1848
or
Call 1-800-258-4260
with any questions concerning your contract.
You should be able to provide the contract number and the owner's and
annuitant's names when requesting information regarding a specific contract.
NOTE: The foregoing summary is qualified in its entirety by the detailed
information in the remainder of this prospectus and in the prospectuses for the
funds. They should be referred to for more detailed information.
With respect to qualified contracts, limits or restrictions may be imposed on
purchase payments, withdrawals, distributions, benefits or other contract
provisions due to:
* the requirements of a particular retirement plan;
* an endorsement to the contract; or
* limitations or penalties imposed by the Code or the Employee Retirement Income
Security Act of 1974, as amended.
This prospectus does not describe such limitations or restrictions.
CONDENSED FINANCIAL INFORMATION
You will find condensed financial information on each sub-account in Appendix D
on page 45. You will find the full financial statements and reports of
independent auditors for the variable account in the Statement of Additional
Information.
PERFORMANCE DATA
Advertising of Yields
From time to time, we may advertise yields and average annual total returns for
the sub-accounts of the variable account. In addition, we may advertise the
effective yield of the Money Market Sub-Account.
These figures will be based on historical information and are not intended to
indicate future performance.
Yield Calculations
The yield of the Money Market Sub-Account refers to the annualized income
generated by an investment in that sub-account over a specified seven-day
period.
The yield is calculated by assuming:
* the income generated for that seven-day period is generated each seven-day
period over a 52-week period; and
* it is shown as a percentage of the investment.
The effective yield is calculated similarly but, when annualized, the income
earned by an investment in that sub-account is assumed to be reinvested. The
effective yield will be slightly higher than the yield because of the
com-pounding effect of this assumed reinvestment.
The yield of a sub-account, other than that of the Money Market Sub-Account,
refers to the annualized income generated by an investment in the sub-account
over a specified thirty-day period. The yield is calculated by assuming that the
income generated by the investment during that thirty-day period is generated
each thirty-day period over a twelve-month period and is shown as a percentage
of the investment.
The yield calculations do not reflect the effect of any contingent deferred
sales load or premium taxes that may apply to a particular contract. When the
contingent deferred sales load is applies to a particular contract, the yield of
that contract will be reduced. For additional information about how yields and
total returns are calculated, please refer to the Statement of Additional
Information.
Total Returns
Average annual total returns for each sub-account are based on performance data
compiled since the sub-account commenced operations. Performance results are
also measured over 1, 5 and 10 year time periods. When average annual total
returns for these periods are available, you will be provided with this
information. Each return will represent the average annual compounded rates of
return that would equate an initial investment of $1,000 to the redemption value
of that investment. This will include the deduction of any applicable contingent
deferred sales load, but exclude the deduction of any premium taxes. These
returns will represent the periods for which total return quotations are
provided up to the last day of the period.
Performance information
Performance information for any sub-account reflects only the performance of a
hypothetical contract under which account value is allocated to a sub-account
during a particular time period on which the calculations are based. It should
be considered in light of:
* the investment objectives;
* investment contracts;
* characteristics of the portfolios in which the sub-account invests; and * the
market conditions during the given time period.
You should not consider it as a representation of what may be achieved in the
future. For a description of the methods used to determine yield and total
returns, see the Statement of Additional Information.
Reports and promotional literature may also contain other information including:
1. the ranking of any sub-account derived from rankings of variable annuity
separate accounts or their investment products tracked by: * Lpper Analytical
Services, Inc., * VARDS, * IBC/Donoghue's Money Fund Report, * Financial
Planning Magazine, * Money Magazine, * Bank Rate Monitor, * Standard and Poor's
Indices, and * The Dow Jones Industrial Average. It may also include other
rating services, companies, publications, or other persons who rank separate
accounts or other investment products on overall performance or other criteria;
and
2. the effect of tax deferred compounding on sub-account investment returns, or
returns in general, which may be illustrated by graphs, charts, or otherwise.
These may include a comparison, at various points in time, of the return from an
investment, or returns in general, on a tax-deferred basis, assuming one or more
tax rates, with the return on a currently taxable basis. We may also use other
ranking services and indices.
In our advertisements and sales literature, we may use charts and graphs to
discuss and illustrate:
* the implications of longer life expectancy for retirement planning; * the tax
and other consequences of long-term investments; * the effects of the lifetime
payout option; * the operation of certain special investment features in the
policy - such as the dollar cost averaging option; * the effects of certain
investment strategies, such as allocating purchase payments between the fixed
account and an equity sub-account; and * the Social Security system and its
projected payout levels and retirement plans generally.
We may, from time to time, disclose average annual total returns and cumulative
total returns for the sub-accounts in non-standard formats. We will assume that
no contingent deferred sales load is applicable to these returns. Whenever we
show non-standard performance, we will also show standardized performance. You
will find additional information about the calculation of performance data in
the statement of additional information.
We may also advertise performance figures for the sub-accounts based on their
performance prior to the time the variable account started.
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
AND THE VARIABLE ACCOUNT
Transamerica Occidental Life Insurance Company
Transamerica Occidental Life Insurance Company, Transamerica, is a stock life
insurance company incorporated under the laws of the State of California in
1906. It is mainly engaged in the sale of life insurance and annuity contracts.
Transamerica is a wholly-owned subsidiary of Transamerica Insurance Corporation
of California, which in turn is a direct subsidiary of Transamerica Corporation.
The address for Transamerica Occidental Life Insurance Company is 1150 South
Olive Street, Los Angeles, California 90015.
Published Ratings
Transamerica may from time to time publish in advertisements, sales literature
and reports to owners, the ratings and other information assigned to it by one
or more independent rating organizations such as A.M. Best Company, Standard &
Poor's, Moody's and Duff & Phelps. The purpose of the ratings is to reflect the
financial strength and/or claims-paying ability of Transamerica. These ratings
should not be considered as bearing on the safety or investment performance of
assets held in the variable account. Each year the A.M. Best Company reviews the
financial status of thousands of insurers. Once it has completed its analysis of
each insurer's financial strength, A.M. Best assigns the insurer a Best Rating.
These ratings reflect their current opinion of the relative financial strength
and operating performance of an insurance company in comparison to the norms of
the life/health insurance industry. In addition, other rating companies, such as
by Standard & Poor's Insurance Ratings Services, Moody's or Duff & Phelps assess
our claims-paying ability. They also may be referred to in advertisements or
sales literature or in reports to owners. These ratings are opinions of an
operating insurance company's financial capacity to meet the obligations of its
insurance and annuity contracts in accordance with their terms, including its
obligations under the fixed account provisions of this contract. Such ratings do
not reflect the investment performance of the variable account or the degree of
risk associated with an investment in the variable account.
The Variable Account
On May 22, 1992, Transamerica's Board of Directors passed resolutions to
establish the Separate Account VA-2L of Transamerica, also referred to as the
Variable Account, under the laws of the State of California. The variable
account is registered with the Securities and Exchange Commission under the
Investment Company Act of 1940 as a unit investment trust. It meets the
definition of a separate account under the federal securities laws. However, the
Commission does not supervise the management or the investment practices or
contracts of the variable account.
The assets of the variable account are owned by Transamerica but they are held
separately from the other assets of Transamerica. Section 10506 of the
California Insurance Law provides that the assets of a separate account are not
chargeable with liabilities incurred in any other business operation of the
insurance 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 variable account, whether or not
realized, are credited to or charged against the variable account without regard
to other income, gains or losses of Transamerica. Therefore, the investment
performance of the variable account is entirely independent of the investment
performance of Transamerica's general account assets or any other separate
account maintained by Transamerica.
The variable account has eighteen sub-accounts, each of which invests solely in
a specific corresponding portfolio. Changes to the sub-accounts may be made at
the discretion of Transamerica.
THE FUNDS
The variable account invests exclusively in the:
* Series of Dreyfus Variable Investment Fund
* Dreyfus Stock Index Fund
* The Dreyfus Socially Responsible Growth Fund, Inc.
* Portfolios of Dreyfus Investment Portfolios
* the Growth Portfolio of Transamerica Variable Insurance Fund, Inc.
The Dreyfus Variable Investment Fund was organized as an unincorporated business
trust under Massachusetts law pursuant to an Agreement and Declaration of Trust
dated October 29, 1986. It commenced operations on August 31, 1990, and is
registered with the Commission as an open-end management investment company
under the 1940 Act. Currently, thirteen series, or portfolios, of the variable
fund are available for the contracts. Each portfolio has separate investment
objectives and contracts. As a result, each portfolio operates as a separate
investment portfolio and the investment performance of one portfolio has no
effect on the investment performance of any other portfolio.
The Stock Index Fund was incorporated under Maryland law on January 24, 1989,
and commenced operations on September 29, 1989. It is registered with the
Commission as an open-end, non-diversified, management investment company.
The Socially Responsible Fund was incorporated under Maryland law on July 20,
1992, and commenced operations on October 7, 1993. It is registered with the
Commission as an open-end, diversified, management investment company.
Dreyfus Investment Portfolios organized as an investment business trust under
Massachusetts law pursuant to an Agreement and Declaration of Trust dated May
14, 1993. It is registered with the Commission as an open-end management company
under the 1940 Act and commenced operations May 1, 1998. Currently, two
portfolios of Dreyfus Investment Portfolios are available for the contract.
Transamerica Variable Insurance Fund, Inc., was incorporated under Maryland law
on June 23, 1995. It commenced operations on November 1, 1996. It is registered
with the SEC as a management investment company. One of its portfolios is the
Growth Portfolio.
The Commission does not supervise the management or the investment practices and
contracts of any of the portfolios. The assets of the portfolios are each
separate from the assets of the other portfolios.
Service Providers to The Funds
* The Dreyfus Corporation provides investment advisory and administrative
services to the Dreyfus Variable Investment Fund and the Socially Responsible
Fund.
* Mellon Equity Associates provides index fund management services to the Stock
Index Fund, with The Dreyfus Corporation serving as the manager, in accordance
with applicable agreements with the fund.
* Fayez Sarofim & Co. provides sub-investment advisory services for the Capital
Appreciation Portfolio.
* NCM Capital Management Group, Inc., provides sub-investment advisory services
for the Socially Responsible Fund.
* Transamerica provides investment advisory services to Transamerica VIF, with
Transamerica Investment Services, Inc., providing sub-investment advisory
services.
Transamerica receives fees from the Dreyfus Corporation and its affiliates for
providing certain administrative and or other services. The portfolios are
described below. Please see the Variable Fund, the Stock Index Fund, the
Socially Responsible Fund, Dreyfus Investment Portfolio and Transamerica VIF
prospectuses for more information.
Money Market Portfolio The Money Market Portfolio's investment objective is to
achieve as high a level of current income while preserving invested capital and
maintaining liquidity. It seeks to achieve this objective by investing in
short-term money market instruments. The investment advisory fee is payable
monthly at the annual rate of 0.50 of 1% of the value of the portfolio's average
daily net assets. An investment in this portfolio is not insured or guaranteed
by the FDIC or any other government agency. Although this portfolio seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in this portfolio.
Special Value Portfolio
The Special Value Portfolio's investment objective is to maximize total return
on your investment capital. Total return consists of capital appreciation and
current income. It seeks to achieve its objective by investing in a wide range
of equity and debt securities and money market instruments. An investment
advisory fee is payable monthly to The Dreyfus Corporation at the annual rate of
0.75 of 1% of the value of the portfolio's average daily net assets.
Zero Coupon 2000 Portfolio
The Zero Coupon 2000 Portfolio's investment objective is to provide as high an
investment return as is possible while preserving capital. It seeks to achieve
its objective by investing primarily in:
* debt obligations of the U.S. Treasury bonds that have been stripped of their
unmatured interest coupons;
* interest coupons that have been stripped from debt obligations issued by the
U.S. Treasury;
* receipts and certificates for stripped debt obligations and stripped coupons,
including U.S. Government trust certificates.
Collectively, we refer to these as Stripped Treasury Securities. The portfolio
also may purchase certain other types of stripped government or corporate
securities. The portfolio's assets will consist primarily of portfolio
securities which will mature on or about December 31, 2000. The investment
advisory fee is payable monthly at the annual rate of 0.45 of 1% of the value of
the portfolio's average daily net assets.
Quality Bond Portfolio
The Quality Bond Portfolio's investment objective is to provide the maximum
amount of current income possible while preserving capital and the maintaining
liquidity. It seeks to achieve its objective by investing mainly in: debt
obligations of corporations, the U.S. Government and its agencies and
instrumentalities, and major banking institutions. The investment advisory fee
is payable monthly at the annual rate of 0.65 of 1% of the value of the
portfolio's average daily net assets.
Small Cap Portfolio
The Small Cap Portfolio's investment objective is to maximize capital
appreciation. It seeks to achieve its objective by investing mainly in common
stocks. Under normal market conditions, the portfolio will invest at least 65%
of its total assets in companies with market capitalizations of less than $1.5
billion at the time of purchase. The Dreyfus Corporation will invest in
companies it believes to be characterized by new or innovative products,
services or processes which should enhance prospects for growth in the future
earnings. The investment advisory fee is payable monthly at the annual rate of
0.75 of 1% of the value of the portfolio's average daily net assets.
Capital Appreciation Portfolio
The Capital Appreciation Portfolio's primary investment objective is to provide
as much long-term capital growth as possible while preserving capital. Current
income is a secondary goal. It seeks to achieve its goals by investing in common
stocks of domestic and foreign issuers. An investment advisory fee is payable to
The Dreyfus Corporation and a sub-investment advisory fee is payable monthly to
Fayez Sarofim & Co. at the total annual rate of 0.75 of 1% of the value of the
portfolio's average daily net assets.
Growth and Income Portfolio
The Growth and Income Portfolio's investment objective is to provide as much
long-term capital growth, current income and growth of income as possible while
undertaking reasonable investment risk. This portfolio invests primarily in
equity and debt securities and money market instruments of domestic and foreign
issuers. The proportion of the portfolio's assets invested in each type of
security will vary from time to time in accordance with The Dreyfus
Corporation's assessment of economic conditions and investment opportunities. An
investment advisory fee is payable monthly to The Dreyfus Corporation at the
annual rate of 0.75 of 1% of the value of the portfolio's average daily net
assets.
International Equity Portfolio
The International Equity Portfolio's investment objective is to maximize capital
appreciation. This portfolio's invests primarily in the equity securities of
foreign issuers located throughout the world. An investment advisory fee at an
annual rate of 0.75 of 1% of the value of the portfolio's average daily net
assets is payable monthly to The Dreyfus Corporation.
International Value Portfolio
The International Value Portfolio's investment objective is long-term capital
growth. This portfolio invests primarily in a portfolio of publicly traded
equity securities of foreign issuers. Each equity within the portfolio would be
characterized as value companies according to criteria established by the
portfolio's investment adviser. An investment advisory fee is payable monthly to
The Dreyfus Corporation at the annual rate of 1.00% of the value of the
portfolio's average daily net assets.
Disciplined Stock Portfolio
The Disciplined Stock Portfolio's investment objective is to provide investment
results that are greater than the total return performance of publicly traded
common stocks as a group, as presented by the Standard & Poor's 500 Composite
Stock Price Index. This portfolio will use quantitative statistical modeling
techniques to build a portfolio in an attempt to achieve its investment
objective. It will do so without assuming risk greater than that found in the
broad stock market. An investment advisory fee is payable monthly to The Dreyfus
Corporation at the annual rate of 0.75 of 1% of the value of the Portfolio's
average daily net assets.
Small Company Stock Portfolio
The Small Company Stock Portfolio's investment objective is to provide
investment results that are greater than the total return performance of
publicly traded common stocks as a group, as represented by the Russell 2500
Index. This portfolio invests primarily in a portfolio of equity securities of
small to medium sized domestic companies. While investing in these companies,
the portfolio will attempt to maintain volatility and diversification similar to
that of the Russell 2500 Index. An investment advisory fee is payable monthly to
the Dreyfus Corporation at the annual rate of 0.75 of 1% of the value of the
portfolio's average daily net assets.
Balanced Portfolio
The Balanced Portfolio's investment objective is to provide investment results
that are greater than the total return performance of common stocks and bonds as
a group, as represented by a hybrid index. 60% of the portfolio is composed of
the common stocks in the Standard & Poor's 500 Composite Stock Price Index. 40%
of the portfolio is composed of the bonds in the Lehman Brothers Intermediate
Government/Corporate Bond Index. This Series invests primarily in common stocks
and bonds. The Dreyfus Corporation selects the proportion of each, based on
their expected returns and risks. An investment advisory fee is payable monthly
to the Dreyfus Corporation at the annual rate of 0.75 of 1% of the value of the
portfolio's average daily net assets.
Limited Term High Income Portfolio
The Limited Term High Income Portfolio's investment objective is to maximize
total return, through capital appreciation and current income. This portfolio
seeks to achieve its objective by investing up to all of its assets in a
portfolio of lower rated fixed-income securities, commonly known as junk bonds.
Under normal market conditions, these bonds will have an effective duration of
three and one-half years or less and an effective average portfolio maturity of
four years or less. Investments of this type are subject to a greater risk of
loss of principal and non-payment of interest. Investors should carefully assess
the risks associated with an investment in the portfolio. Those risks are
described in the portfolio's prospectus. An investment advisory fee is payable
monthly to the Dreyfus Corporation at the annual rate of 0.65of 1% of the value
of the portfolio's average daily net assets.
Stock Index Fund
The Stock Index Fund's investment objective is to provide investment results
that correspond to the price and yield performance of publicly traded common
stocks as a group, as represented by the Standard & Poor's 500 Composite Stock
Price Index. The Stock Index Fund is not sponsored by or affiliated with
Standard & Poor's Corporation in any way. The Stock Index Fund pays a monthly
management fee to The Dreyfus Corporation at the annual rate of 0.245 of 1% of
the value of the Stock Index Fund's average daily net assets.
Socially Responsible Fund
The Socially Responsible Fund's primary goal is to provide capital growth. It
seeks to achieve this goal by investing principally in common stocks, or
securities convertible into common stock. Stocks selected for this fund will be
issued by companies which, in the opinion of the fund's management, must meet
traditional investment standards. They must also show evidence that they conduct
their business in a manner that contributes to the enhancement of the quality of
life in America. Current income is a secondary goal. A management fee is payable
monthly to The Dreyfus Corporation and a sub-investment advisory fee is payable
monthly to NCM Capital Management Group, Inc. at the total annual rate of 0.75
of 1% of the value of the Socially Responsible Fund's average daily net assets.
Core Value Portfolio
The Core Value Portfolio is a diversified portfolio. Its primary investment
objective is to provide long-term growth of capital. Current income is a
secondary investment objective. The portfolio anticipates that at least 65% of
the value of its total assets, except when maintaining a temporary defensive
position, will be invested in equity securities, such as common stocks,
preferred stock and securities convertible into common stocks, including
depository receipts. All of these would be characterized as equity securities
issued by "value" companies according to criteria established by The Dreyfus
Corporation. In general, the portfolio's investments are broadly diversified
over a number of industries. As a matter of operating contract, the portfolio
will not invest more than 25% of its total assets in any one industry. A
management fee is payable monthly to The Dreyfus Corporation at the annual rate
of 0.75 of 1% of the portfolio's average daily net assets.
MidCap Stock Portfolio
The MidCap Stock Portfolio is a diversified portfolio. Its investment objective
is to provide investment results that are greater than the total return
performance of publicly-traded common stocks as a group, as represented by the
Standard & Poor's MidCap 400 Index. Medium-size issuers will include those U.S.
companies with market capitalizations generally ranging in value from $200
million to $5 billion. Market capitalization is defined as market price per
share times the number of shares outstanding. The portfolio also may invest in
large and small capitalization companies, including emerging and cyclical growth
companies. Emerging and cyclical growth companies are firms which, while they
may not have a history of stable long-term growth, are nonetheless expected to
represent attractive investments. The equity securities in which the portfolio
invests consist of common stocks, preferred stocks and securities convertible
into common stocks, including those in the form of Depositary Receipts. The
portfolio is not an index fund and its investments are not limited to securities
of issuers included in the S&P 400 Index. A management fee is payable monthly to
The Dreyfus Corporation at the annual rate of 0.75 of 1 of the portfolio's
average daily net assets.
Growth Portfolio of the Transamerica Variable Insurance Fund, Inc. seeks
long-term capital growth. Common stock (listed and unlisted) is the basic form
of investment. The Growth Portfolio invests primarily in common stocks of growth
companies that are considered by the manager to be premier companies. In the
Manager's view, characteristics of premier companies include one or more of the
following: * dominant market share; * leading brand recognition; * proprietary
products or technology; * low-cost production capability; and/or * excellent
management with shareholder orientation. The manager of the portfolio believes
in long-term investing and places great emphasis on each company's ability to
sustain the above competitive advantages. Unless market conditions indicate
otherwise, the manager also tries to keep the portfolio fully invested in
equity-type securities. It also does not try to invest or divest based on stock
market movements. When, in the judgment of the manager, and market conditions
warrant, the portfolio may, for temporary defensive purposes, hold part or all
of its assets in cash, debt or money market instruments. The portfolio may
invest up to 10% of its assets in debt securities having a call on common stocks
that are rated below investment grade. A management fee of 0.75 of 1% of the
average daily net assets is payable monthly to Transamerica Occidental Life
Insurance Company, as adviser. The adviser pays Transamerica Investment
Services, Inc. a monthly fee of at the annual rate of 0.30 of 1% of the first
$50 million, .25 of 1% of the next $150 million and .20 of 1% of the assets in
excess of $200 million.
Variable Account Objectives
Meeting objectives depends on various factors, including, but not limited to,
how well the portfolio managers anticipate changing economic and market
conditions. You should be aware of the following risks:
* There is no assurance that any of these portfolios will achieve their stated
objectives. . * An investment in the contract is not insured or guaranteed by
the FDIC or any other government agency.
* Investing in the contract involves certain investment risks, including
possible loss of principal.
Portfolios Not Publicly Available
The portfolios are open-end management investment companies or portfolios of
series, open-end management companies registered with the SEC under the 1940 Act
that are often referred to as mutual funds. This SEC registration does not
involve SEC supervision of the investments or investment policies of the
portfolios. Shares of the portfolios are not offered to the public but solely to
the insurance company separate accounts and other qualified purchasers as
limited by federal tax laws. These portfolios are not the same as mutual funds
that may have very similar names that are sold directly to the public. The
assets of each portfolio are held separate from the assets of the other
portfolios. Each portfolio operates as a separate investment vehicle. The income
or losses of one portfolio have no effect on the investment performance of
another portfolio. The sub-accounts reinvest dividends and/or capital gains
distributions received from a portfolio in more shares of that portfolio as
retained assets.
Resolution of Possible Conflicts
Since variable insurance products from other companies as well as Transamerica
can invest in all of the portfolios, there is a possibility that a material
conflict may arise between the interests of the variable account and other
companies. If conflict occurs, the affected insurance companies will take the
needed steps to resolve the matter. This may include stopping their separate
account from investing in the portfolios.
Sources of Additional Information
You will find additional information in the current prospectuses for the
portfolios, which accompany this prospectus, including: * the investment
objectives;
* the investment policies;
* the investment advisory services;
* the administrative services; and
* charges
You should read the portfolios' prospectuses carefully before you make any
decision concerning the allocation of purchase payments to, or transfers among,
the sub-accounts.
Addition, Deletion or Substitution
Transamerica does not control the portfolios. We therefore cannot guarantee that
any of the sub-accounts of the variable account or any of the portfolios will
always be available to investors for allocation of purchase payments or
transfers. Transamerica retains the right to make changes in the variable
account and in its investments.
Transamerica reserves the right to:
* eliminate the shares of any portfolio held by a sub-account; or
* substitute shares of another portfolio or of another investment company for
the shares of any portfolio.
If the shares of a portfolio are no longer available for investment or if, in
our judgement, a portfolio is not fulfilling its intended purpose within the
variable account, we reserve the right to remove it. To the extent required by
the 1940 Act, we will inform shareholders in advance of any substitutions. We
will also see the Commission's advance approval before making substitutions.
These potentially necessary substitutions should not be construed in any way as
preventing or limiting the variable account from purchasing other securities for
other series or classes of variable annuity contracts, or from effecting an
exchange between series or classes of variable contracts on the basis of
requests made by owners.
The Establishment of New Sub-Accounts
At Transamerica's discretion, based on marketing, tax, investment or other
conditions, we can elect to establish new sub-accounts. We will make these new
sub-accounts available to our existing contract owners on a basis which we will
determine at that time. Each additional sub-account will purchase shares in a
portfolio or in another mutual fund or investment vehicle. Transamerica may also
eliminate one or more sub-accounts if, in its sole discretion, marketing, tax,
investment or other conditions so warrant. In the event any sub-account is
eliminated, Transamerica will notify owners and request a re-allocation of the
amounts invested in the eliminated sub-account.
In the event of any substitution or change, Transamerica may change the
contracts in a way that appropriately reflects substitutions or changes.
Furthermore, if we believe it to be in the best interests of persons having
voting rights under the contracts, the variable account may be operated as a
management company under the 1940 Act or any other form permitted by law. It may
also be deregistered under this act in the event such registration is no longer
required, or may be combined with one or more other separate accounts.
THE FIXED ACCOUNT
This prospectus is generally intended to serve owners as a disclosure document
only for the contract and the variable account. For complete details regarding
the fixed account, see the contract itself. The fixed account is not available
in all states.
Purchase Payments allocated to and amounts transferred to the fixed account
become part of the general account of Transamerica, which supports insurance and
annuity obligations. Because of exemptive and exclusionary provisions, interests
in the general account have not been registered under the Securities Act of
1933, hereafter referred to simply as the 1933 Act. Nor is the general account
registered as an investment company under the 1940 Act. Accordingly, neither the
general account nor any interests therein are generally subject to the
provisions of the 1933 Act or the 1940 Act. Therefore the Securities and
Exchange Commission has not reviewed the disclosures in this prospectus which
relate to the fixed account.
The guarantee periods of the fixed account are part of the general account of
Transamerica. The general account of Transamerica consists of all the general
assets of Transamerica, other than those in the variable account, or assets in
any other segregated asset account. Instead of the owner bearing the investment
risk as with the variable account, we bear the full investment risk for all
values in the fixed account. We have the sole right to determine how we will
invest the assets of our general account while adhering to applicable laws. The
Interest Rate of the Fixed Account
As owner, you bear the risk that, after the initial guarantee period, we will
not credit interest in excess of 3% per year to amounts you allocate to the
fixed account.
The allocation or transfer of funds to the fixed account does not entitle you to
share in the overall investment returns of Transamerica's general account.
Instead, we guarantee that the funds you allocate or transfer to the fixed
account will accrue a specified annual rate of interest for a specific duration.
The rate of interest we credit will always be at least 3% per year.
Consequently, if you allocate all net purchase payments only to the fixed
account and make no transfers or withdrawals, the minimum amount of the account
value will be determinable and guaranteed.
We will establish a new guarantee period of a duration you select from those we
are offering on net purchase payments you allocate to the fixed account. Every
guarantee period we offer will have a duration of at least one year. The minimum
amount you may allocate or transfer to a guarantee period is $1,000. We will
credit net purchase payments you allocate to the fixed account on the date we
receive the payment at the service center. We will establish a new guarantee
period as of the effective date of the transfer for any amount you transfer from
another guarantee period, or from a sub-account of the variable account to the
fixed account.
We may delay payment of any withdrawal from the fixed account for up to six
months after we receive the request. If we delay payment for more than 30 days,
we will pay interest on the withdrawal amount up to the date of payment.
Guarantee Periods
Each guarantee period will have its own guaranteed interest rate and expiration
date. The guaranteed interest rate applicable to a guarantee period will depend
on the date it is established and the duration you choose. The guarantee period
you choose may not extend beyond the annuity date.
We reserve the right to change the maximum number of guarantee periods that may
be in effect at any one time. We will establish effective annual rates of
interest for each guarantee period. The effective annual rate of interest we
establish for a guarantee period will remain in effect for the duration of the
guarantee period. We will credit Interest to a guarantee period based on its
daily balance at a daily rate which is equivalent to the guaranteed interest
rate applicable to that guarantee period for amounts held during the entire
guarantee period. Amounts withdrawn or transferred from a guarantee period prior
to its expiration date will be subject to an interest adjustment as described
below. In no event will the effective annual rate of interest applicable to a
guarantee period be less than 3% per year.
Interest Adjustment
Except in certain circumstances, an interest adjustment will be made to any
amount withdrawn or transferred from a guarantee period before its expiration
date Any such amount withdrawn or transferred from a guarantee period will be
credited with interest at a rate of only 3% per year from the date the guarantee
period was established to the date of payment or transfer, regardless of the
guaranteed interest rate. This means that any interest in excess of 3% will be
forfeited on the amount withdrawn or transferred.
Exceptions to the interest adjustment include:
1. amounts withdrawn within 30 days before the expiration date of the guarantee
period;
2. amounts withdrawn from a guarantee period serving as the source account, if
available, for dollar cost averaging transfers; and
3. amounts paid as part of a death benefit.
A contingent deferred sales load may apply to withdrawals made at the end of a
guarantee period even if there is no interest adjustment made.
Expiration of Guarantee Period
At least 45 days, but not more than 60 days, prior to the expiration date of a
guarantee period, we will notify you of the options available when a guarantee
period expires. You may elect one of the following options:
1. transfer the guarantee amount of that guarantee period to a new guarantee
period from among those being offered by us. The new Guarantee Period will be
established on the later of:
a) the date selected by the Owner, or
b) the date the notice, in a form and manner acceptable to us, is received at
the service center, but in no event later than the day immediately following the
expiration date of the previous guarantee period; or
2. transfer the guarantee amount of that guarantee period to one or more
sub-accounts of the variable account.
We must receive your notice electing one of these options at the service center
by the expiration date of the guarantee period. If such election has not been
received by us at the service center, the guarantee amount of that guarantee
period will remain in the fixed account. A new guarantee period of the same
duration as the expiring guarantee period, if offered, will automatically be
established by us with a new guaranteed interest rate. The new guarantee period
will start on the day
following the expiration date of the previous guarantee period.
If we are not currently offering guarantee periods having the same duration as
the expiring guarantee period, the new guarantee period will be the next longer
duration. If we are not offering guarantee periods longer than the duration of
the expiring guarantee period, the new guarantee period will be the next shorter
duration.
If the guarantee amount of an expiring guarantee period is less than $1,000, we
reserve the right to transfer such amount to the Money Market Sub-Account of the
variable account.
If you make a transfer from a guarantee period within the 30-day period ending
on its expiration date, it will not be counted for the purpose of determining
the eighteen free transfers per contract year. This transfer will not be subject
to any interest adjustment.
THE CONTRACT
The Contract is a Flexible Purchase Payment Multi-Funded Individual Deferred
Annuity Contract. The rights and benefits under the contract, or in the
certificate and group contract, are described below and in the contract.
Transamerica reserves the right to modify the individual contract, and the group
contract and its certificates, so that it conforms to any federal or state
statute, rule or regulation. Such modifications will give contract owners the
benefits of these changes. Transamerica is responsible for the obligations
stated in the contract.
The contracts may be used for rollover IRAs and for rollover Roth IRAs that
qualify for special federal income tax treatment. With Transamerica's prior
permission, the contracts may also be available as a contributory IRAs, as
contributory Roth IRAs, as Section 403(b) annuities and for use in Section
401(a) qualified pension and profit sharing plans established by corporate
employers. Generally, qualified contracts contain restrictive provisions
limiting the timing and amount of payments and distributions from the qualified
contract.
The owner designates the annuitant. The annuitant can be the same person as the
owner and must be the same person in the case of certain qualified contracts.
Annuity payments will be made to the annuitant after the annuity date
unless, in the case of a non-qualified contract, the owner changes the payee
after the annuity date.
For each contract, a different account will be established and values, benefits
and charges will be calculated separately. The various administrative rules
described below will apply separately to each contract, unless otherwise noted.
CONTRACT APPLICATION AND PURCHASE PAYMENTS
Purchase Payments
Please send all of your purchase payment payments to the service center. We will
send the owner a confirmation letter to acknowledge the acceptance of each
purchase payment.
The initial purchase payment for each contract must generally be at least
$5,000. Transamerica, may, at its discretion, accept lower initial purchase
payments for certain qualified contracts.
We will ordinarily issue the contract and derive the net purchase payment from
the initial purchase payment within two days of receipt of a properly completed
application and the purchase payment. At this time, the contract is accepted and
funded with your purchase payment. A net purchase payment is defined as a
purchase payment minus any applicable premium taxes. These taxes may include
retaliatory premium taxes, which possibly could be levied in the future in New
York, or in any other state in which the owner lives, where such taxes are
levied in the future. Acceptance of the application is subject to it being
received in good order. Transamerica reserves the right to reject any
application or purchase payment. Contracts normally will not be issued with
respect to annuitants more than 80 years old, although Transamerica in its
discretion may waive this restriction in certain cases.
If the initial purchase payment cannot be credited within two days of receipt of
the purchase payment and information requesting issuance of a contract because
the information is incomplete or for any other reason, then Transamerica will
contact the owner. We will explain the reason for the delay and will refund the
initial purchase payment within five business days. However, if the owner
consents to Transamerica retaining the initial purchase payment, we will credit
it to your contract as soon as the requirements are fulfilled.
Ten Day Cancellation Option
Each contract provides for a free look period of 10 days (or longer if required
by state law) after receipt of the contract during which you may cancel the
contract. To cancel, the contract must be returned to us with a written notice
of cancellation. In some states, including for some ages of owners in some
states, and in all states for IRAs, Transamerica will refund the greater of the
purchase payments or account value of the date the written notice and the
contract are received by Transamerica. In other states, the purchase payments
allocated to the fixed account plus the variable accumulated value will be
returned with any adjustments required by applicable law or regulation (and
without imposition of any contingent deferred sales load) as of the date the
notice and contract are received. You should consult your registered
representative or investment adviser (or see your contract) for the applicable
provision.
Additional purchase payments may be paid into the contract at any time prior to
the annuity date, as long as the annuitant or contingent annuitant is living.
Additional purchase payments must be at least $500, or at least $100 if paid to
an automatic payment plan. Using an automatic payment plan, the additional
purchase payments are automatically deducted from a bank account. In addition,
minimum allocation amounts apply. Additional net purchase payments are credited
to the contract as of the date the payment is received. Currently, additional
purchase payments after the initial purchase payment may not be made to Section
401(a) and Section 403(b) annuity contracts.
Total purchase payments for any contract may not exceed $1,000,000 without prior
approval of Transamerica. In no event may the sum of all purchase payments for a
contract during any taxable year exceed the limits imposed by any applicable
federal or state laws, rules, or regulations.
Choosing One or More Investment Options
You specify how purchase payments will be allocated under the contract.
You may allocate the net purchase payments between and among one or more of the
sub-accounts of the variable account and the guarantee periods of the fixed
account. Portions must be whole number percentages and any allocation percentage
for a sub-account must be at least 10%. In addition, the initial allocation to
any inactive sub-account is subject to a minimum of $500. The initial allocation
to a new guarantee period is subject to a minimum of $1,000. You may choose to
allocate nothing to a particular sub-account or guarantee period.
With regard to the allocation of purchase payments during the free look
period for any portion of the net purchase payments allocated to the fixed
account, the amounts you specify by will be allocated to the guarantee periods
you specify. With regard to purchase payments allocated to the variable account,
in most situations where the purchase payment allocated to the fixed account
plus variable accumulation value will be refunded upon exercise of the free
look, the net purchase payments derived from the initial purchase payments will
be allocated between and among the sub-accounts of the variable account and the
guarantee periods of the fixed account in accordance with the allocation
percentages you select. In most situations where the greater of purchase
payments or account value will be refunded on exercise of the free look, the net
purchase payment derived from the portion of initial purchase payment allocated
to the variable account will first be allocated to the Money Market Sub-Account.
It will remain in that sub-account until the estimated end of the free look
period, allowing 5 days for delivery of the contract by mail. The dollar value
of the variable accumulation units held in the Money Market Sub-Account
attributable to such net purchase payment will then be allocated among the
sub-accounts in accordance with the allocation percentages you select. This
initial allocation after the free look period from the Money Market Sub-Account
to the selected sub-accounts does not count toward the limit of 18 free
transfers per contract Year.
Each net purchase payment will be subject to the allocation percentages
in effect at the time of receipt of such purchase payment. The allocation
percentages for new purchase payments between and among the sub-accounts and the
guarantee period may be changed by the owner at any time by submitting a request
for such change, in a form and manner acceptable to Transamerica, to the service
center. Any changes to the allocation percentages are subject to the limitations
above. Any change will take effect with the first purchase payment received with
or after receipt by the service center of the request for such change and will
continue in effect until subsequently changed.
If an allocation of an additional net purchase payment is directed to an
inactive sub-account, then the amount allocated must be at least $500. If an
allocation of an additional net purchase payment is directed to a new guaranteed
period of the fixed account, then the amount allocated must be at least $1000.
Investment Option Limit
Currently, as the owner, you may not allocate purchase payment dollars to more
than eighteen investment options over the life of the contract. Investment
options include sub-accounts of the variable account and guarantee periods of
the fixed account. Each sub-account and each duration of a guarantee period of
the fixed account that ever received a transfer or purchase payment allocation
count as one towards this total of eighteen limit.
Transamerica may waive this limit in the future. For example, if the owner makes
an allocation to the money market sub-account and later transfers all amounts
out of this money market sub-account, it would still count as one for the
purposes of the limitation even if it held no value. If the owner transfers from
a sub-account to another sub-account and later back to the first, the count
towards the limitation would be two, not three. If the owner selects a guarantee
period and renews for the same term, the count will be one. If the owner renews
to a guarantee period with a different term, the count will be two.
ACCOUNT VALUE
Before the annuity date, the account value is the sum of :
* the fixed accumulated value, plus
* the variable accumulated value.
The fixed accumulated value is the total dollar amount of all guarantee amounts
held under the fixed account for the contract prior to the annuity date. The
fixed accumulated value is determined without regard to any interest adjustment.
The variable accumulated value is the total dollar amount of all variable
accumulation units under each sub-account of the variable account held for the
contract prior to the annuity date. The variable accumulated value prior to the
annuity date is equal to:
a) net purchase payments allocated to the sub-accounts; plus or minus
b) any increase or decrease in the value of the assets of the sub-accounts due
to investment results; less
c) the daily mortality and expense risk charge; less
d) the daily administrative expense charge; less
e) any reductions for the annual account fee; plus or minus
f) amounts transferred from or to the fixed account; less
g) any applicable transfer fees and systematic withdrawal option fees; and less
h) any withdrawals from the sub-accounts less any premium tax applicable to
those withdrawals.
A valuation period is the period between successive valuation days. It begins at
the close of the New York Stock Exchange, generally 4:00 p.m. ET, on each
valuation day. It ends at the close of the New York Stock Exchange on the next
succeeding valuation day. A valuation day is each day that the New York Stock
Exchange is open for regular business. The value of the variable account assets
is determined at the end of each valuation day. To determine the value of an
asset on a day that is not a valuation day, the value of that asset as of the
end of the next valuation day will be used. Days that are not considered to be
valuation days are those during which the New York Stock Exchange is closed for
regular business.
The variable accumulated value is expected to change from valuation period to
valuation period. The changes reflect how the investment performed of all of the
selected portfolios, and also reflect the deductions for charges.
How Your Variable Accumulation Units Are Created
When you, as the contract owner, pay purchase payments into your contract, those
purchase payments are used to purchase variable accumulation units in the
sub-accounts in which you have chosen to invest. At the end of each valuation
period during which Transamerica received purchase payments from you, the owner,
will be credited with variable accumulation units. The number of units you
receive is determined by dividing:
* the portion of each net purchase payment allocated to the sub-accounts, by
* the variable accumulation unit value, at the end of the valuation Period.
When you, the owner, pay your first purchase payment, which is defined as the
initial net purchase payment, variable accumulation units for that payment are
credited to the account value. That credit is then held in the money market
sub-account for fifteen calendar days after the contract date.
The variable accumulation units credited to your contract as the result of your
initial net purchase payment are credited to your contract's value within two
valuation days of:
1. the date upon which Transamerica's service center receives an acceptable and
properly completed application; or
2. the date upon which Transamerica's service center receives the initial
purchase payment.
The variable accumulation units credited to your contract as the result of
subsequent purchase payments will be credited to your contract's value at the
end of the valuation period during which Transamerica received your payment.
How Variable Accumulation Unit Values Are Calculated
The value of a variable accumulation unit for each sub-account for a valuation
period is established at the end of each valuation period. It is calculated by
multiplying the value of that unit at the end of the prior valuation period by
the sub-account's net investment factor for the valuation period. The value of a
variable accumulation unit may go up or down.
The net investment factor is used to determine the value of accumulation and
annuity unit values for the end of a valuation period. The applicable formula
can be found in the Statement of Additional Information, or SAI.
Transferring Among Sub-Accounts
When you transfer purchase payment dollars among the sub-accounts, those
transfers will result in the purchase and/or cancellation of variable
accumulation units. The value of these units will equal the total dollar amount
you are transferring to or from a sub-account. These transactions are valued at
the end of the valuation day on which you performed your transaction.
TRANSFERS
Transfers Before the Annuity Date
Before the annuity date, as the owner you may transfer any portion of the
account value among and between the sub-accounts and the guarantee periods then
offered by us. You can make transfers by giving a written request to the service
center subject to the following conditions:
* the minimum amount which may be transferred is $500; and
* the minimum transfer to an inactive sub-account is $500; and
* the minimum transfer required to establish a new guarantee period is $1,000.
Transfers are also subject to terms and conditions that may be imposed by the
portfolios.
Your transfer requests must specify:
* The sub-account or guarantee period from which the transfer is to be made;
* the amounts you wish to transfer, subject to the minimum transfer amount; and
* the sub-account or guarantee period you wish to receive the transfer.
Transamerica imposes a transfer fee of $10 for each transfer over 18 in a
contract year. We also reserve the right to:
* waive the transfer fee;
* vary the number of transfers without charge; or
* not count transfers under certain options or services.
The transfer will generally be effective on the date your request is received at
the service center. If the transfer is made from a guarantee period before its
expiration date, it will be subject to an interest adjustment.
If a transfer from a guarantee period is made within the 30-day period ending on
its expiration date, we will not count it for purposes of the eighteen allowable
transfers. It will also not be subject to any interest adjustment.
If a transfer reduces the value in a sub-account to less than $500, then
Transamerica reserves the right to transfer the remaining amount along with the
amount you requested to be transferred in accordance with your transfer
instructions. Under current law, there will not be any tax liability to you, the
owner if you make a transfer.
Telephone Transfers
We will allow telephone transfers if you have provided proper
authorization for such transfers in a form and manner acceptable to us.
Limitations and rules for these transfers will be provided to you by us. We
reserve the right to suspend telephone transfer privileges at any time, for some
or all contracts, for any reason. Withdrawals are not permitted by telephone.
We will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. If we follows such procedures we will not
be liable for any losses due to unauthorized or fraudulent instructions.
However, we may be liable for such losses if we doe not follow those reasonable
procedures. The procedures we will follow for telephone transfers may include:
a) requiring some form of personal identification prior to acting on
instructions received by telephone;
b) providing written confirmation of the transaction; and/or
c) tape recording the instructions given by telephone.
Possible Restrictions
Transamerica reserves the right without prior notice to modify, restrict,
suspend or eliminate the transfer privileges, including telephone transfers, at
any time and for any reason. For example, restrictions may be necessary to
protect owners from adverse impacts on portfolio management of large and/or
numerous transfers by market timers or others. We have determined that the
movement of significant sub-account values from one sub-account to another may
prevent the portfolio impacted by these transfers from taking advantage of
investment opportunities. This occurs because the portfolio must maintain a
significant cash position in order to handle redemptions.
Such large and sudden movement of assets in any one portfolio may also cause a
substantial increase in portfolio transaction costs. These costs must be
indirectly borne by owners. Therefore, Transamerica reserves the right to
require that all transfer requests be made by you, the owner and not by a third
party holding a power of attorney. We also require that each transfer request be
made by a separate communication to Transamerica. Transamerica also reserves the
right to request that each transfer request be submitted in writing and be
manually signed by the owner or owners; facsimile transfer requests may not be
allowed.
Dollar Cost Averaging
Prior to the annuity date, you, as the owner, may request that a designated
amount of money be automatically transferred from one, and only one, of the
sub-accounts which invests in:
* the Money Market;
* the Quality Bond Portfolio; or
* the Limited High Term Income Portfolio.
Or you can have it transferred from the fixed account. This money may be
transferred to any of the sub-accounts or the fixed account on a monthly basis
by submitting a request to the service center. The request must be in a form and
manner acceptable to Transamerica. You can transfer amounts from the source
accounts in addition to the Money Market and Quality Bond Sub-Account, and can
include the shortest guarantee period. Call the service center for the
availability of the source accounts options. Your transfers will begin the month
following, but no sooner than one week following, receipt of such request,
provided that dollar cost averaging transfers will not commence until the later
of:
1. 30 days after the contract date, or
2. the estimated end of the free look period, allowing 5 days for delivery of
the contract by mail.
Transfers will continue for the duration selected by the owner unless:
1. terminated by the owner,
2. automatically terminated by Transamerica because there are insufficient funds
in the source account, or
3. for other reasons as set forth in the contract.
As the owner, you may request that monthly transfers be continued. You can
accomplish this by giving notice to the service center in a form and manner
acceptable to Transamerica within 30 days prior to the last monthly transfer. If
no request to continue the monthly transfers is made by you, as the owner, this
option will terminate automatically with the last transfer.
In order to be eligible for dollar cost averaging, the owner must meet the
following conditions:
1. the value of the source account must be at least $5,000;
2. the minimum amount that you may transfer out of the source account is $250
per month; and
3. the minimum amount transferred into any other sub-account is the greater of
$250 or 10% of the amount being transferred.
Please note that dollar cost averaging transfers can not be made from a source
account from which you are receiving systematic withdrawals or automatic
payouts.
As the owner, you will not be charged for the dollar cost averaging service.
Transfers that result from dollar cost averaging practices will not count toward
18 transfers allowed without charge. We will make no interest adjustments on
dollar cost averaging transfers from the fixed account, if we allow it as a
source account.
Dollar cost averaging transfers may not be made to the fixed account.
Automatic Asset Rebalancing
When you allocate purchase payments to certain portfolios in certain
percentages, you define how you want your investments to perform. Changing
market conditions effect each portfolio's performance, and can throw your
allocations out of balance. As the owner, you may instruct Transamerica to
automatically rebalance the amounts by reallocating them among the variable
sub-accounts, at the time, and in the percentages that you specify. You must
specify automatic asset rebalancing in your instructions to Transamerica. As the
owner, you may elect to have the rebalancing done on an annual, semi-annual or
quarterly basis. You may also elect to have amounts allocated among the
sub-accounts using whole percentages, with a minimum of 10% allocated to each
sub-account.
As the owner, you may elect to establish, change or terminate the automatic
asset rebalancing by submitting a request to the service center in a form and
manner acceptable to Transamerica. Automatic asset rebalancing will not count
towards the limit of 18 free transfers in a contract year. There is currently no
charge for the automatic asset rebalancing. However, Transamerica reserves the
right to charge a nominal amount for this feature. Transamerica also reserves
the right to discontinue offering automatic asset rebalancing any time for any
reason.
After the Annuity Date
If a variable annuity payout option is elected, as the owner, you may make
transfers among sub-accounts after the annuity date by submitting a request in a
form acceptable to the service center. Your request will be subject to the
following provisions:
1. transfers after the annuity date may be made no more than four times during
any annuity year; and
2. the minimum amount transferred from one sub-account to another is the amount
supporting a current $75 monthly payment.
Your transfers among sub-accounts during the annuity period will be processed
based on the formula outlined in the Statement of Additional Information.
CASH WITHDRAWALS
Withdrawals
As the owner, you may withdraw all or part of the cash surrender value for a
contract at any time during the life of the annuitant and prior to the annuity
date. You can accomplish this by giving a written request to the service center.
Your request will be subject to the rules below. Federal or state laws, rules or
regulations may also apply. You cannot make withdrawals after the annuity date.
The amount payable to you as the owner if the contract is surrendered on or
before the annuity date is the cash surrender value. The cash surrender value is
equal to the account value, minus any account fee, minus any interest
adjustment, minus any applicable contingent deferred sales load and minus any
applicable premium taxes. If the account value exceeds $50,000 on the date the
contract is surrendered, and where permitted by law, we will waive the account
fee.
Only one partial withdrawal will be permitted while the systematic withdrawal
option is in effect. Partial withdrawals must be at least $500.
A full surrender of your contract will result in a cash withdrawal payment equal
to the contract's cash surrender value at the end of the valuation period during
which your request is received along with all of your completed forms. Any
contingent deferred sales load which applies to your contract with Transamerica
will be deducted from the amount you paid.
In the case of a partial withdrawal, you, as the owner may instruct the service
center as to the amounts to be withdrawn from each sub-account or fixed account.
If you do not specify from where the withdrawal is to be made, the withdrawal
will be taken pro rata from all sub-accounts with current values. If the
requested withdrawal reduces the value of the sub-account from which the
withdrawal was made to less than $500, Transamerica reserves the right to
transfer the remaining value of that sub-account pro rata. If no such
sub-accounts exist, such transfer will be made to the money market sub-account.
As the owner, you will be notified in writing of any such transfer.
A partial withdrawal will not be processed if it would reduce the account value
to less than $2,000. In that case, you, as the owner will be notified that you
will have 10 days from the date notice is mailed to:
a. withdraw a lesser amount, subject to the $500 minimum, leaving a account
value of at least $2,000; or
b. surrender the contract for its cash surrender value.
Amounts payable will be determined as of the end of the valuation period during
which the subsequent instructions are received. If, after the expiration of the
10-day period, no written election is received from you as the owner, your
withdrawal request will be considered null and void, and no withdrawal will be
processed.
A full surrender will result in a cash withdrawal payment equal to the cash
surrender value at the end of the valuation period during which the election is
received along with all completed forms. Any applicable contingent deferred
sales load will be deducted from the amount paid.
Fees and Taxes Relating to Withdrawals or Surrenders
The account fee, unless waived, will be deducted from a full surrender before
the application of any contingent deferred sales load. You withdrawals may be
taxable transactions. The Code requires Transamerica to withhold federal income
tax from withdrawals. However, generally as an owner, you will be entitled to
elect, in writing, not to have tax withholding apply.
This is true except for distributions from certain qualified contracts that may
be subject to mandatory 20% withholding. Withholding applies to the portion of
the withdrawal which is includible in income and subject to federal income tax.
The federal income tax withholding rate for partial withdrawals and full
surrenders is currently 10% of the taxable amount of the withdrawal. Withholding
applies only if the taxable amount of the withdrawal is at least $200. Some
states also require withholding for state income taxes. Moreover, the Code
provides that a 10% penalty tax may be imposed on the taxable portions of
distributions for certain early withdrawals.
Withdrawal , including surrender requests, generally will be processed as of the
end of the valuation period during which the request, including all completed
forms, is received. Payment of any cash withdrawal or lump sum death benefit due
from the variable account will occur within seven days from the date on which
your request is received, except that Transamerica may postpone such payment if:
1. the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted;
2. an emergency exists as defined by the Commission, or the Commission requires
that trading be restricted; or
3. the Commission permits a delay for the protection of owners.
The withdrawal request will be effective when all appropriate withdrawal request
forms are received. Payments of any amounts derived from purchase payments paid
by check may be delayed until the check has cleared the owner's bank. When a
withdrawal is made from a guarantee period before its expiration date, the
amount withdrawn will generally be subject to an interest adjustment. The
payment of a withdrawal from the fixed account may be delayed for up to six
months. If delayed for more than 30 days, interest will be paid on the
withdrawal amount up to the date of payment.
You, as the owner, assume the investment risk for amounts allocated to the
variable account. Certain withdrawals are subject to a contingent deferred sales
load The total amount paid upon surrender of the contract, taking into account
any prior withdrawals, may be more or less than the total purchase payments
paid.
Additional Withdrawal and Surrender Provisions
After a withdrawal of the total cash surrender value, or at any time that the
account value is zero, all of your rights, as the owner will terminate.
Except for rollover IRA's, qualified contracts offered by the prospectus are
only offered with Transamerica's prior permission. They will be issued in
connection with retirement plans which meet the requirements of Section 408(b)
of the Code. You should refer to the terms of the particular retirement plans
for any additional limitations or restrictions on your cash withdrawals, as
these limitations or restrictions may supercede those of the contract issued by
Transamerica.
As an owner, you may elect, under the systematic withdrawal option or automatic
payout option (but not both), to withdraw certain amounts on a periodic basis
from the sub-accounts prior to the annuity date.
Systematic Withdrawal Option
Prior to the annuity date, as the owner, you may elect to have withdrawals
automatically made from one or more sub-account(s) on a monthly basis. You can
accomplish this by giving written notice to the service center. Then other
distribution modes may be permitted. The withdrawals will commence the month
following, but no sooner than one week following, receipt of your written
notice. Please note these exceptions, however, will not commence sooner than the
later of:
a. 30 days after the contract date; or
b. the end of the free look period.
Upon written notice to you, the owner, Transamerica may change the day of the
month on which withdrawals are made under this option. Withdrawals will be from
the sub-account, or sub-accounts, and in the percentage allocations specified by
you the owner. If no specifications are made, withdrawals will be pro rata from
all sub-accounts and fixed account with value. Systematic withdrawals can not be
made from a sub-account from which dollar cost averaging transfers are being
made.
Eligibility and Rules of the Systematic Withdrawal Contract
To be eligible for the systematic withdrawal option:
* the account value must be at least $12,000 at the time you elect to use this
option;
* the minimum monthly amount that can be withdrawn is $100; and
* the maximum monthly amount that can be withdrawn on an annual basis is equal
to the sum, as of the date of the first withdrawal, of: a. 10% of purchase
payments that are less than seven contract years old, and b. 10% of remaining
purchase payments that are at least seven contract years old.
Systematic withdrawals are not subject to the contingent deferred sales load but
can be reduced by any applicable premium tax. Systematic withdrawals may be
taxable, subject to withholding, and subject to the 10% penalty tax.
The systematic withdrawals will continue unless you, as the owner, terminate
them or automatically terminates by Transamerica as set forth in the contract.
If this option is terminated it may not be used again until the next contract
anniversary. In some states, no partial withdrawal may be made while the
systematic withdrawal option is in effect. Any partial withdrawal will
automatically terminate the systematic withdrawal option. Any portion of such
partial withdrawal, which exceeds the allowed amount for withdrawals after the
first withdrawal in a contract year will be subject to a contingent deferred
sales load. In other states, only one partial withdrawal can be made while the
systematic withdrawal option is in effect. Making more than one partial
withdrawal while this option is in effect will automatically terminate the
systematic withdrawal option. The amounts taken as the first and second partial
withdrawals which exceed the allowed amount for withdrawals after the first
withdrawal in a contract year, will be subject to a contingent deferred sales
load.
We reserve the right to impose an annual fee of an amount not to exceed $25 per
contract year for administrative expenses associated with processing the
systematic withdrawals. This fee, which is currently waived, will be deducted
from each systematic withdrawal in equal installments during a contract year.
The systematic withdrawal option is not available with the fixed account.
Consult your tax adviser and, if applicable, the particular retirement plan,
before requesting withdrawals from a qualified contract. There may be severe
restrictions with regard to withdrawals from qualified contracts.
Automatic Payout Option, or APO
Prior to the annuity date, the owner may elect the automatic payout option,
referred to as the APO to satisfy minimum distribution requirements under the
Code for certain qualified contracts.
DEATH BENEFIT
If an owner or annuitant dies before the annuity date, a death benefit is
payable. The death benefit will be equal to the greatest of:
1) the Account Value;
2) the Account Value determined as of the seventh contract anniversary and at
each succeeding contract anniversary occurring at subsequent seven year
intervals thereafter, adjusted for any subsequent purchase payments paid by the
owner (less the sum of all subsequent withdrawals and any premium taxes
applicable to those withdrawals), or
3) the sum of all purchase payments, less withdrawals and any premium taxes
applicable to those withdrawals, plus interest thereon equal to a 5% annual
effective rate, credited on a daily basis up to
a) the contract anniversary following the earlier of any owner's or annuitant's
75th birthday, or
b) the date the sum of all purchase payments, (less the sum of all withdrawals
and any premium taxes), together with credited interest, has grown to two times
the amount of all purchase payments (less all withdrawals and any premium taxes)
as a result of such interest accumulation, if earlier.
For contracts purchased by any owner or with an annuitant age 75 or older, the
death benefit available under option three above will be the sum of all purchase
payments, less withdrawals and any premium taxes applicable to these
withdrawals.
The death benefit will be determined as of the valuation period during which the
later of:
a) proof of death of the owner or annuitant is received by the service center;
or
b) written notice of the method of settlement elected by the beneficiary is
received at the service center.
If no settlement method is elected, the death benefit will be calculated
and paid as of a date no later than one year after the date of death. No
contingent deferred sales load will apply. Until the death benefit is paid,
the account value allocated to the variable account will remain in the
sub-accounts as previously specified by the owner, or in the sub-accounts
as reallocated according to instructions received by Transamerica from all
beneficiaries. Therefore, the account value will fluctuate with investment
performance of the applicable sub-accounts. As a result, the amount of the
death benefit will depend on the account value at the time the death
benefit is paid. There is no extra charge for the death benefit, and it
applies automatically, i.e. no election by the owner is necessary.
Payment of Death Benefit
The death benefit is generally payable upon receipt of proof of death of the
annuitant or owner. Where the owner is not an individual, the death benefit is
generally payable upon receipt of proof of death of the annuitant. Once the
Transamerica service center receives this proof and the beneficiary's choice of
a method of settlement, the death benefit generally will be paid within seven
days, or as soon thereafter as Transamerica has sufficient information to make
the payment. The death benefit may be paid in a lump sum cash benefit. Or,
subject to any limitations under any state or federal law, rule, or regulation,
it may be paid under one of the annuity forms, unless a settlement agreement
effective under the contract prevents this choice. If no settlement method is
elected within one year of the date of death, the death benefit will be paid in
a lump sum. The payment of the death benefit may be subject to certain
distribution requirements under the federal income tax laws.
Designation of Beneficiaries
You as the owner may select one or more beneficiaries and name them in a form
and manner acceptable to us. If the owner selects more than one beneficiary,
unless you indicate otherwise they will each share equally in any death benefits
payable in the event of the annuitant's death before the annuity date if there
is no contingent annuitant, or the owner's death if there is no joint owner, and
the owner is an individual other than the annuitant. Different beneficiaries may
be named with respect to the annuitant's death and the owner's death.
Respectively, these individuals are referred to as the annuitant's beneficiary
and the owner's beneficiary. Before the annuitant's death, you as the owner may
change the beneficiary by notice to the service center in a form and manner
acceptable to Transamerica. The owner may also make the designation of
beneficiary irrevocable by sending notice to and obtaining approval from the
service center. Irrevocable beneficiaries may only be changed with the written
consent of the designated irrevocable beneficiaries, except to the extent
required by law.
The interest of any beneficiary who dies before the owner or annuitant will
terminate at the death of the beneficiary. The interest of any beneficiary
who dies at the time of, or within 30 days after, the death of the owner or
annuitant will also terminate if no benefits have been paid, unless the
contract has been endorsed to provide otherwise. The benefits will then be
paid as though the beneficiary had died before the owner or annuitant. If
the interests of all designated beneficiaries have terminated, any benefits
payable will be paid to the owner's estate.
Transamerica may rely on an affidavit by any responsible person in determining
the identity or non-existence of any beneficiary not identified by name.
Death of Annuitant Prior to the Annuity Date
If the annuitant dies prior to the annuity date and the annuitant is not the
owner and there is no contingent annuitant, a death benefit under the contract
relating to that annuitant will be paid to the annuitant's beneficiary. If there
is a contingent annuitant, then upon the death of the annuitant the contingent
annuitant will become the annuitant and no death benefit will be paid at that
time.
Death of Owner Prior to the Annuity Date
If an owner dies before the annuity date, a death benefit will be paid to
that owner's beneficiary. If the contract has joint owners, the surviving
joint owner will be the owner's beneficiary. If the owner's beneficiary is
the deceased owner's spouse, then the spouse may elect to treat the
contract as his or her own or receive payment of the death benefit. The
payment of the death benefit may be subject to certain distribution
requirements under the federal income tax laws.
Death of Annuitant or Owner After the Annuity Date
If the annuitant or an owner dies after the annuity starts, the remaining
undistributed portion, if any, of the contract will be distributed at least as
rapidly as under the method of distribution being used as of the date of such
death. Under some annuity forms, there will be no death benefit. If the owner is
not the annuitant, upon an owner's death, any remaining ownership rights will
pass to the owner's beneficiary.
CHARGES AND DEDUCTIONS
No deductions are made from purchase payments except for any applicable premium
taxes. Therefore, the full amount, less any premium taxes, of the purchase
payments are invested in one or more of the sub-accounts of the variable account
or the fixed account.
As more fully described below, charges under the contract are assessed in three
ways:
1. as deductions for the contract or annuity fees, any transfer fees, any
systematic withdrawal option or asset rebalancing fees, any interest adjustment
(for withdrawals from the fixed account) and, if applicable, for premium taxes;
2. as charges against the assets of the variable account for the assumption of
mortality and expense risks and administrative expenses; and
3. as contingent deferred sales loads.
In addition, certain deductions are made from the assets of the funds for
investment management fees and expenses. These fees and expenses are described
in the funds' prospectuses and their statements of additional information.
Contingent Deferred Sales Load
No deduction for sales charges is made from the contract owner's purchase
payments, although premium tax may be deducted. However, a contingent deferred
sales load of up to 6% of purchase payments paid may be imposed on certain
withdrawals or surrenders from the account value to partially cover certain
expenses incurred by Transamerica relating to the sale of the contracts,
including commissions paid to salespersons, the costs of preparation of sales
literature and other promotional costs and acquisition expenses.
The contingent deferred sales load percentage varies according to the number of
contract years between the contract year in which a net purchase payment was
credited to the contract and the contract year in which the withdrawal is made.
The amount of the contingent deferred sales load is determined by multiplying
the amount withdrawn subject to the contingent deferred sales load by the
contingent deferred sales load percentage in accordance with the following
table.
Number of Contract Years Contingent Deferred Sales Load
Since Receipt of Each Purchase Payment As a Percentage of Purchase Payment
Less than one year 6%
1 year but less than 2 years 6%
2 years but less than 3 years 5%
3 years but less than 4 years 5%
4 years but less than 5 years 4%
5 years but less than 6 years 4%
6 years but less than 7 years 2%
7 or more years 0%
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In no event shall the total contingent deferred sales load assessed against the
contract exceed 6% of the aggregate purchase payments paid to a contract.
Certain amounts may be withdrawn free of any contingent deferred sales load. As
the owner, you may make withdrawals up to the allowed amount without incurring a
contingent deferred sales load each contract year before the annuity date.
During the first contract year, the allowed amount is equal to accumulated
earnings not previously withdrawn.
For the first withdrawal, and only the first withdrawal in a contract year after
the first contract year, the available allowed amount you are allowed to
withdraw is equal to the sum of :
1. 100% of purchase payments not previously withdrawn and received at least
seven contract years before the date of withdrawal; plus
2. the greater of
a) the accumulated earnings not previously withdrawn; or
b) 15% of purchase payments received at least one but less than seven complete
contract years before the date of withdrawal not reduced to take into account
any withdrawals deemed to be made from such purchase payments.
After the first withdrawal in a contract year, after the first
contract year, the available allowed amount is equal to the sum of:
1. 100% of purchase payments not previously withdrawn and received at least
seven complete contract years before the date of withdrawal; plus
2. accumulated earnings not previously withdrawn.
Your withdrawals will always be made first from your accumulated earnings, and
then from your purchase payments on a first in first out basis. This is done so
that accumulated earnings may be depleted with the first withdrawal and the 10%
of purchase payments discussed above is not used in the calculation of the
allowed amount. If an allowed amount is not withdrawn during a contract year, it
does not carry over to the next contract year. However, accumulated earnings, if
any, in an owner's account value are always available as the allowed amount. No
withdrawals are allowed with regard to purchase payments made by a check which
has not cleared.
Some contract owners may hold contracts which, when originally issued, provided
for an allowed amount which was equal to the sum of:
1. all purchase payments, not previously withdrawn and held more then seven
contract years; plus
2. 10% of purchase payments held between one and seven contract years not
reduced by any withdrawals made by the owner from such purchase payments.
Under these contracts, withdrawals were made first from purchase payments on a
first in first out basis, then from earnings. The allowed amount applicable to
these contract owners will be determined by whichever formula provides them with
the larger amount available, for full surrenders only, without a contingent
deferred sales load.
No contingent deferred sales load will be charged on the allowed amount if a
contract is surrendered and the owner was eligible to withdraw the amount
without charge, but had not made such a withdrawal during the contract year. In
addition, no contingent deferred sales load is assessed:
1. upon annuitization after the first three contract years to an option
involving life contingencies;
2. upon payment of the death benefit;
3. upon transfers of account value among and between the sub-accounts and the
guarantee periods;
4. under the systematic withdrawal option; or,
5. in some circumstances, under the automatic payout option.
Any applicable contingent deferred sales load will be deducted from the amount
requested for both partial withdrawals and full surrenders. The contingent
deferred sales load and any premium tax applicable to a withdrawal from the
fixed account will be deducted from the amount withdrawn after the interest
adjustment, if any, is applied and before payment is made to the owner.
The contingent deferred sales load arising from a withdrawal or
surrender of the contract will be waived if the owner receives extended medical
care in a licensed hospital or nursing care facility for a least 45 days (30
days for contracts issued in Pennsylvania) during any continuous 60 day period
beginning on or after the first contract anniversary and the request for the
withdrawal or surrender, together with proof of such extended care, is received
at the service center during the term of such care or within 90 days after the
last day upon which the owner received such extended care. This waiver of the
contingent deferred sales load may not be available in all states and does not
apply if the owner is receiving extended medical care in a licensed hospital or
nursing care facility at the time the owner applied for the contract or at the
contract date.
Additionally, in some states, the contingent deferred sales load arising from a
withdrawal or surrender of the contract will be waived if the owner is
diagnosed, after the first contract year, with a terminal illness reasonably
expected to result in death within twelve months. Proof of the terminal illness
must be received by the service center at the time the withdrawal or surrender
request is received.
Administrative Charges
At the end of each contract year before the annuity date, Transamerica deducts
an annual account fee as partial compensation for expenses relating to the issue
and maintenance of the contract and the variable account. The annual account fee
is equal to the lesser of $30 or 2% of the account value. No account fee will be
deducted for a contract year if your account value exceeds $50,000 on the last
business day of the contract year or as of the date the contract is surrendered.
The account fee may be changed upon 30 days advance written notice to you, the
owner, subject to the prior approval of the New York State Insurance Department.
In no event may this fee exceed the lesser of $60 or 2% of the account value.
Such increases in the account fee will apply only to future deductions after the
effective date of the change. If you surrender your contract on other than the
end of a contract year, we will deduct the account fee in full at the time of
the surrender. The account fee will be deducted on a pro rata basis from each
sub-account in which the contract is invested at the time of such deduction or
from the fixed account if there are insufficient funds in the sub-accounts. If
the entire amount is in the fixed account, then the annual account fee will be
deducted on a pro rata basis from all guarantee periods. The account fee for a
contract year may be waived if the account value exceeds $50,000 on the last
business day of that contract year or as of the date the contract is
surrendered. This waiver of the account fee may not be available in all states.
After the annuity date, an annual annuity fee of $30 will be deducted in equal
amounts from each variable annuity payment made during the year. If monthly
payments, the amount paid per month will be $2.50. This fee will not be changed.
No annuity fee will be deducted from fixed annuity payments.
Transamerica also deducts the administrative expense charge from the variable
account at the end of each valuation period both before and after the annuity
date at an effective current annual rate of 0.15% of assets held in each
sub-account . This deduction is for administrative expenses attributable to the
contracts and the variable account which exceed the revenues received from the
account fee, any transfer fee, and any fee imposed for systematic withdrawals.
Transamerica has the ability to increase or decrease this charge, but the charge
is guaranteed not to exceed 0.25%. Transamerica will provide 30 days written
notice of any change in fees. The administrative charges do not bear any
relationship to the actual administrative costs of a particular contract. The
administrative expense charge is reflected in the variable accumulation or
variable annuity unit values for each sub-account. Mortality and Expense Risk
Charge
Transamerica imposes a charge called the mortality and expense risk charge to
compensate it for bearing certain mortality and expense risks under the
contracts. For assuming these risks, Transamerica makes a daily charge equal to
0.003403% corresponding to an effective annual rate of 1.25% of the value of the
net assets in the variable account. This charge is imposed before the annuity
date and if an annuity purchase amount is applied to a variable payment option,
also after the annuity date. Transamerica guarantees that this charge of 1.25%
will never increase.
The mortality and expense risk charge is reflected in the variable accumulation
or variable annuity unit values for each sub-account.
Variable accumulated values and variable annuity payments are not affected by
changes in actual mortality experience incurred by Transamerica. The mortality
risks assumed by Transamerica arise from its contractual obligations to make
annuity payments and to pay death benefits prior to the annuity date. The
annuity payments are determined in accordance with the annuity tables and other
provisions contained in the contract. Thus, as owner, you are assured that
neither the annuitant's own longevity nor an unanticipated improvement in
general life expectancy will adversely affect the annuity payments under the
contract.
Transamerica also bears substantial risk in connection with the death benefit
before the annuity date, since it will pay a death benefit that may be greater
than the account value. In this way, we bear the risk of unfavorable experience
in the sub-accounts.
The expense risk assumed by Transamerica is the risk that Transamerica's actual
expenses in administering the contract and the variable account will exceed the
amount recovered through the administrative expense charge, account fees,
transfer fees and any fees imposed for systematic withdrawals. If the mortality
and expense risk charge is insufficient to cover actual costs and risks assumed,
the loss will fall on Transamerica. Conversely, if this charge is more than
sufficient, any excess will be profit to Transamerica. Currently, we expect a
profit from this charge.
Transamerica anticipates that the contingent deferred sales load will not
generate sufficient funds to pay the cost of distributing the contracts. To the
extent that the contingent deferred sales load is insufficient to cover the
actual cost of contract distribution, the deficiency will be met from
Transamerica's general corporate assets which may include amounts, if any,
derived from the mortality and expense risk charge.
Premium Taxes
We may be required to pay premium or retaliatory taxes currently ranging
from 0% to 3.5% in connection with purchase payments or values under the
contracts. Depending upon applicable state law, we may deduct the premium taxes
which are payable with respect to a particular contract from the purchase
payments, from amounts withdrawn, or from amounts applied on the annuity date.
In some states, charges for both direct premium taxes and retaliatory premium
taxes may be imposed at the same or different times with respect to the same
purchase payment, depending upon applicable state law.
In certain limited circumstances, a broker-dealer or other entity distributing
the contracts may elect to pay to Transamerica an amount equal to the premium
taxes that would otherwise be attributable to that entity's customers. In such
cases, Transamerica will not impose a premium tax charge on those contracts.
Transfer Fee
We charge a $10 transfer fee for each transfer in excess of eighteen in a
contract year. We reserve the right to:
a) waive the transfer fee;
b) vary the number of transfers without charge; or
c) not count transfers under certain options or services for purposes of the
allowed number without charge.
Currently, we do not charge a fee for automatic asset rebalancing.
However, we reserve the right to impose a nominal fee.
Systematic Withdrawal Option
We reserve the right to impose an annual fee of an amount not to exceed $25 for
administrative expenses associated with processing systematic withdrawals. This
fee, which is currently waived, will be deducted from each systematic withdrawal
you take in equal installments during a contract year.
Taxes
Under present laws, Transamerica will incur state or local taxes, in addition to
the premium taxes described above, in several states. No charges are currently
made for taxes other than state premium taxes. However, Transamerica reserves
the right to deduct charges in the future for federal, state and local taxes or
the economic burden resulting from the application of any tax laws that we
determine to be attributable to the contracts.
Portfolio Expenses
The value of the assets in the variable account reflects the value of portfolio
shares and therefore the fees and expenses paid by each portfolio. You can find
a complete description of the fees, expenses, and deductions from the portfolios
in the portfolio's prospectuses.
Interest Adjustment
For a description of the interest adjustment applicable to early withdrawals and
transfers from the guarantee periods of the fixed account, see The Fixed Account
on page 26.
Sales in Special Situations
Transamerica may sell the contracts in special situations that are expected to
involve reduced expenses for Transamerica. These instances may include:
1. sales in certain group arrangements, such as employee savings plans;
2. sales to current or former officers, directors, employees and their families,
of Transamerica and its affiliates;
3. sales to officers, directors, employees and their families, of the
Portfolios' investment advisers and their affiliates; or
4. sales to officers, directors, employees and sales agents, including
registered representatives and their families, of broker-dealers and other
financial institutions that have sales agreements with Transamerica to sell the
contracts.
In such situations:
1. the contingent deferred sales load may be reduced or waived;
2. the mortality and expense risk charge or administration charges may be
reduced or waived; or
3. certain amounts may be credited to the contract account value, for example,
amounts related to commissions or sales compensation otherwise payable to a
broker-dealer may be credited to the contract account value.
These reductions in fees or charges or credits to account value will not
unfairly discriminate against any contract owner. These reductions in fees or
charges or credits to account value are generally taxable and treated as
purchase payments for purposes of income tax and any possible premium tax
charge.
ANNUITY PAYMENTS
Annuity Date
Initially, as the owner, you select the annuity date at the time you pay the
initial purchase payment. Thereafter, you may change the annuity date from time
to time by giving notice to the service center in a form and manner acceptable
to us. The service center must receive notice of each change at least 30 days
prior to the then-current annuity date. The annuity date must not be earlier
than the third contract anniversary, except for certain qualified contracts.
The latest annuity date which may be elected is the later of:
a) the first day of the calendar month immediately preceding the month of the
annuitant's 85th birthday; or
b) the first day of the month coinciding with or next following the tenth
contract anniversary.
This annuity date extension to the tenth contract anniversary may not be
available in all states. The annuity date must be the first day of a calendar
month. The first annuity payment will be on the first day of the month
immediately following the annuity date.
Annuity Payment
The annuity date is the date that the annuity purchase amount is applied to
provide the annuity payments under the contract . The annuity date will be used
in conjunction with to the annuity form and payment option you have selected.
The annuity date will remain effective unless the entire account value has been
withdrawn or the death benefit has been paid to the beneficiary prior to that
date.
The annuity purchase amount is the account value, minus any interest adjustment,
minus any applicable contingent deferred sales load and minus any applicable
premium taxes. Any contingent deferred sales load will be waived if values are
applied to an annuity form involving life contingencies on or after the third
contract anniversary.
If the amount of the monthly annuity payment from any of the payment options
which you , as the owner, select results in a monthly annuity payment of less
than $150, or if the annuity purchase amount is less than $5,000, Transamerica
reserves the right to offer a less frequent mode of payment or pay the account
value in a cash payment. Monthly annuity payments from the variable annuity
payment option will further be subject to a minimum monthly annuity amount of
$75 from each sub-account of the variable account from which such payments are
made.
As the owner, you may choose from the annuity forms below and Transamerica may
consent to other plans of payment before the annuity date. For annuity forms
involving life income, the actual age and/or sex of the annuitant, or a joint or
contingent annuitant will affect the amount of each payment. Sex-distinct rates
generally are not allowed under certain qualified contracts. Transamerica
reserves the right to ask for satisfactory proof of the annuitant's, or the
joint or contingent annuitant's age. We may delay annuity payments until
satisfactory proof is received. Since payments to older annuitants are expected
to be fewer in number, the amount of each annuity payment under a selected
annuity form will be greater for older annuitants than for younger annuitants.
As the owner, you may choose from the two annuity payment options described
below. The annuity date and annuity forms available for qualified contracts may
also be controlled by endorsements, the plan or applicable law.
A portion or the entire amount of the annuity payments may be taxable as
ordinary income. If, at the time the annuity payments begin, Transamerica has
not received a proper written election not to have federal income taxes
withheld, we must by law withhold such taxes from the taxable portion of such
annuity payments and remit that amount to the federal government. Federal income
tax withholding is mandatory for certain distributions from Section 401
retirement plans and 403(b) annuities. State income tax withholding may also
apply.
Election of Annuity Forms and Payment Options
The annuity form and payment option for each contract is set as a 120 month
period certain and life annuity form, under the variable payment option. Before
the annuity date, and while the annuitant is living, the owner may, by written
request, change the annuity form or annuity payment option or may request
payment of the cash surrender value for the contract. The request for change of
the annuity date or annuity payment option must be received by the service
center at least 30 days prior to the annuity date.
In the event that you, as owner, do not select an annuity form and payment
option within at least 30 days before the annuity date, Transamerica will make
variable annuity payments in accordance with the 120 month period certain and
life annuity form and the applicable provisions of the contract.
Annuity Payment Options
The annuity forms may be paid under fixed or variable annuity payment options.
Under the fixed annuity payment option, the amount of each payment will be
determined on the annuity date and will not subsequently be affected by the
investment performance of the sub-accounts.
Under the variable annuity payment option, the annuity payments, after the first
annuity payment, will reflect the investment experience of the sub-account or
sub-accounts chosen by the owner.
Owners may elect a fixed annuity, a variable annuity, or a combination of both,
in 25% increments of the annuity purchase amount. If, as the owner, you elect a
combination, you must specify what part of the annuity purchase amount is to be
applied to the fixed and variable payment options. Unless you specify otherwise,
the applied annuity purchase amount will be used to provide a variable annuity.
In this event, the initial allocation of variable annuity units for the variable
sub-accounts will be in proportion to the contract's value in the sub-accounts
on the annuity date.
Fixed Annuity Payment Option
A fixed annuity provides for annuity payments which will remain constant in
accordance with the terms of the annuity form elected. If a fixed annuity is
selected, the portion of the annuity purchase amount used to provide the fixed
annuity will be transferred to the general account assets of Transamerica. The
amount of annuity payments will be established by the fixed annuity provisions
selected and the age and sex, if sex-distinct rates are allowed by law, of the
annuitant and will not reflect investment performance after the annuity date.
The fixed annuity payment amounts are determined by applying the annuity
purchase rate specified in the contract to the portion of the annuity purchase
amount applied to the fixed annuity option by the owner. Payments may vary after
the death of the annuitant under some annuity options; the amounts of these
variances are fixed on the annuity date.
Variable Annuity Payment Option
A variable annuity provides for payments that vary in dollar amount, based on
the investment performance of the selected sub-accounts of the variable account.
The variable annuity purchase rate tables in the contract reflect an assumed
annual interest rate of 4%, so if the actual net investment performance of the
sub-accounts is less than this rate, then the dollar amount of the actual
annuity payments will decrease. If the actual net investment performance of the
sub-accounts is higher than this rate, then the dollar amount of the actual
annuity payments will increase. If the net investment performance exactly equals
the 4% rate, then the dollar amount of the actual annuity payments will remain
constant.
Variable annuity payments will be based on the sub-accounts which you, as the
owner, select, and on the allocations you make among the sub-accounts. For
further details as to the determination of variable annuity payments, see the
Statement of Additional Information.
Annuity Forms
As the contract owner, you may choose any of the annuity forms described below.
Subject to approval by Transamerica, you may also select any other annuity forms
then being offered by Transamerica. You may select among any of the following
contract choices:
1. Life Annuity. Payments start on the first day of the month immediately
following the annuity date, if the annuitant is living. Payments end with the
payment due just before the annuitant's death. There is no death benefit under
this form. It is possible that only one payment will be made under this form if
the annuitant dies before the second payment is due; only two payments will be
made if the annuitant dies before the third payment is due, and so forth.
2. Life and Contingent Annuity. Payments start on the first day of the month
immediately following the annuity date, if the annuitant is living. Payments
will continue for as long as the annuitant lives. After the annuitant dies,
payments will be made to the contingent annuitant, if living, for as long as the
contingent annuitant lives. The continued payments can be in the same amount as
the original payments, or in an amount equal to one-half or two-thirds thereof.
Payments will end with the payment due just before the death of the contingent
annuitant. There is no death benefit after both the annuitant and the contingent
annuitant die. If the contingent annuitant does not survive the annuitant,
payments will end with the payment due just before the death of the annuitant.
It is possible that only one payment or very few payments will be made under
this form, if the annuitant and contingent annuitant die shortly after payments
begin.
The written request for this form must:
a) name the contingent annuitant; and
b) state the percentage of payments for the contingent annuitant.
Once annuity payments start under this annuity form, the person named as
contingent annuitant for purposes of being the measuring life, may not be
changed. Transamerica will require proof of age for the annuitant and for the
contingent annuitant before payments start.
3. Life Annuity With Period Certain. Payments start on the first day of the
month immediately following the annuity date, if the annuitant is living.
Payments will be made for the longer of:
a) the annuitant's life; or,
b) the period certain.
The period certain may be 120 or 180 or 240 months, but in no event may it
exceed the life expectancy of the annuitant. If the annuitant dies after all
payments have been made for the period certain, payments will cease with the
payment due just before the annuitant's death. No benefit will then be payable
to the annuitant's beneficiary.
If the annuitant dies during the period certain, the rest of the period certain
payments will be made to the annuitant's beneficiary. The owner may elect to
have the commuted value of these payments paid in a single sum. Transamerica
will determine the commuted value by discounting the rest of the payments at the
then current rate of interest used for commuted values.
If, as the owner, you do not elect to have the commuted value paid in a single
sum after the annuitant's death, you may designate a payee to receive any
remaining payments payable if the annuitant's beneficiary dies before all of the
payments under the period certain have been made.
If the annuitant's beneficiary dies before receiving all of the remaining period
certain payments and a designated payee does not survive the annuitant's
beneficiary for at least 30 days, then the remaining payments will be paid to
the owner, if living, otherwise in a single sum to the owner's estate.
The written request for this form must:
a) state the length of the period certain; and
b) name the annuitant's beneficiary.
4. Joint and Survivor Annuity Payments will be made, starting on the first day
of the month immediately following the annuity date, if and for as long as the
annuitant and joint annuitant are living. After the annuitant or joint annuitant
dies, payments will continue as long as the survivor lives. The continued
payments can be in the same amount as the original payments, or in an amount
equal to one-half or two-thirds thereof. It is possible that only one payment or
very few payments will be made under this form if the annuitant and joint
annuitant both die shortly after payments begin.
The written request for this form must:
a) name the joint annuitant; and
b) state the percentage of continued payments for the survivor.
Once payments start under this annuity form, the person named as joint
annuitant, for the purpose of being the measuring life, may not be changed.
Transamerica will need proof of age for the joint annuitant before payments
start.
5. Other Forms of Payment. Benefits can be provided under any other annuity form
not described in this section subject to Transamerica's agreement and any
applicable state or federal law or regulation. Requests for any other annuity
form must be made in writing to the service center at least 30 days before the
annuity date.
Once payments start under the annuity form and payment option selected by the
owner:
a) no changes can be made in the annuity form and payment option;
b) no additional purchase payment will be accepted under the contract; and
c) no further withdrawals will be allowed.
The owner may, at any time after the annuity date by written notice to us at our
service center, change the payee of annuity benefits being provided under the
contract.
The effective date of change in payee will be the later of:
a) the date we receive the written request for such change; or
b) the date specified by the owner.
If the contract is issued as a qualified contract, you may not change the payee
on or after the annuity date.
Alternate Fixed Annuity Rates
The amount of any fixed annuity payments will be determined on the annuity date
by using either the guaranteed fixed annuity rates or Transamerica's current
single purchase payment fixed annuity rates at the time, whichever would result
in a higher amount of monthly fixed annuity payments.
QUALIFIED CONTRACTS
The contracts may be used to fund rollover IRAs and, with Transamerica's prior
permission, to fund contributory IRAs and contributory Roth IRAs, for use in
connection with Section 408 and 408A of the Code. A rollover IRA is one whose
initial purchase payment is from the rollover or transfer of certain kinds of
distributions from a non-Roth IRA, qualified plans, or Section 403(b) tax
sheltered annuities. Each must follow the rules set out in the Code to maintain
favorable tax treatment of the rollover IRA. A rollover Roth IRA is one whose
initial purchase payment is from the rollover, transfer or conversion from
non-Roth IRA or Roth IRA. A contributory IRA or contributory Roth IRA are those
whose initial and subsequent purchase payments are subject to limitations
imposed by the Code.
With Transamerica's prior permission, the contract may also be used for various
types of qualified pension and profit sharing plans under Section 401 of the
Code, which permits corporate employers to establish various types of retirement
plans for employees, and as Section 403(b) annuities. Currently, additional
purchase payments after the initial purchase payment may not be made to
contracts used as Section 401(a) or Section 403(b) annuities. The tax rules
applicable to distribution from qualified retirement plans, including
restrictions on contributions and benefits, taxation of distributions, and any
tax penalties, vary according to the type of plan and the terms and the
conditions of the plan itself.
Various tax penalties may apply to:
a) contributions in excess of specified limits;
b) distributions prior to age 591/2 , subject to certain exceptions;
c) distributions that do not satisfy specified requirements; and
d) certain other transactions subject to qualified plans.
If you are purchasing a contract for use in a qualified plan, you should seek
competent advice regarding the suitability of the proposed plan documents and
the contracts to their specific needs. Transamerica reserves the right to
decline to sell the contract to certain qualified plans or terminate the
contract if, in Transamerica's judgment, the contract is not appropriate for the
plan.
If a contract is purchased to fund an IRA or Roth IRA, the annuitant must also
be the owner. In addition, under current tax law, minimum distributions are
required from certain qualified contracts. The Owner should consult his/her tax
adviser concerning these matters.
The Automatic Payout Option, or APO
Prior to the annuity date, for qualified contract other than Roth IRAs, the
owner may elect the automatic payout option, or APO, to satisfy minimum
distribution requirements under Sections 401(a)(9), 403(b), and 408(b)(3) of the
Code with regard to this contract.
For IRAs and Sep/IRAs, this may be elected no earlier than six months prior to
the calendar year in which the owner attains age 701/2, but payments may not
begin earlier than January of such calendar year.
For other qualified contracts, APO can be elected no earlier than six months
prior to the later of when the owner:
a) attains age 70 1/2; and
b) retires from employment.
Additionally, APO withdrawals may not begin before the later of:
a) 30 days after the Contract Date; or
b) the end of the Free Look Period.
APO may be elected in any calendar month, but no later than the month in which
the owner attains age 84. APO withdrawals will be from the sub-accounts and in
the percentage allocations which you, as the owner specify. If no specifications
are made, withdrawals will be pro rata from all sub-accounts with value.
Withdrawals can not be made from a sub-account from which dollar cost averaging
transfers are being made.
Payments will be made annually, and will continue unless terminated by the owner
or automatically terminated by Transamerica as set forth in the contract. Once
terminated, APO may not be elected again.
If only APO withdrawals are made, no contingent deferred sales load will apply,
regardless of the allowed amount. However, if a partial withdrawal is taken,
that partial withdrawal and any subsequent withdrawals that contract year will
be subject to a contingent deferred sales load to the extent they exceed the
allowed amount.
To be eligible for this option, the following conditions must be met:
1. the account value must be at least $12,000 at the time of election; and
2. the annual withdrawal amount is the larger of the required minimum
distribution under Code Sections 401(a)(9) or 408(b)(3) or $500.
APO allows the required minimum distribution to be paid from the sub-accounts of
the variable account. If there are insufficient funds in the variable account to
make a withdrawal, or for other reasons as set forth in the contract, this
option will terminate. In which case, if there are amounts in a contract's
account value remaining in the fixed account, the minimum distribution
requirements with regard to the account value may not be met. If amounts are
transferred to sub-accounts from a guaranteed period before its expiration date,
an interest adjustment will be made to such amounts.
If you have more than one qualified plan subject to the Code's minimum
distribution requirements, you must consider all such plans in the calculation
of your minimum distribution requirement, but Transamerica will make
calculations and distribution with regard to this contract only.
Restrictions under Section 403(b) Programs
Certain restrictions apply to annuity contracts used in connection with Internal
Revenue Code Section 403(b) retirement plans. Section 403(b) of the Internal
Revenue Code provides for tax-deferred retirement savings plans for employees of
certain non-profit and educational organizations.
In accordance with the requirements of the Code, Section 403(b) annuities
generally may not permit distribution of:
a) elective contributions made in years beginning after December 31, 1988;
b) earnings on those contributions; or
c) earnings on amounts attributable to elective contributions held as of the end
of the last year beginning before January 1, 1989.
Distributions of such amounts will be allowed only upon death of the employee,
on or after attainment of age 591/2, separation from service, disability, or
financial hardship, except that income attributable to elective contributions
may not be distributed in the case of hardship.
FEDERAL TAX MATTERS
Introduction
The following discussion is a general description of federal tax considerations
relating to the contract and is not intended as tax advice. This discussion is
not intended to address the tax consequences resulting from all of the
situations in which a person may be entitled to or may receive a distribution
under the contract.
Any person concerned about these tax implications should consult a competent tax
adviser before initiating any transaction. This discussion is based upon
Transamerica's understanding of the present federal income tax laws as they are
currently interpreted by the Internal Revenue Service.
No representation is made as to the likelihood of the continuation of the
present federal income tax laws or of the current interpretation by the Internal
Revenue Service. Moreover, no attempt has been made to consider any applicable
state or other tax laws.
The Contract may be purchased:
a) on a non-tax qualified basis for use as a non-qualified contract; or
b) purchased and used in connection with plans qualifying for special tax
treatment as a qualified contract.
Qualified contracts are designed for use by individuals solely as plans entitled
to special income tax treatment under sections 401, 403(b), 408 and 408A of the
Code.
The ultimate effect of federal income taxes on the amounts held under a
contract, on annuity payments, and on the economic benefit to the owner, the
annuitant, or the beneficiary may depend on the type of retirement plan, and on
the tax status of the individual concerned.
In addition, certain requirements must be satisfied in purchasing a qualified
contract with proceeds from a tax qualified retirement plan and receiving
distributions from a qualified contract in order to continue receiving special
tax treatment. Therefore, if you are considering the purchase of a qualified
contract, you should seek competent legal and tax advice regarding the
suitability of the contract for you situation. You will also need to be aware of
the applicable requirements, and the tax treatment of the rights and benefits of
the contract.
The following discussion assumes that a qualified contract is purchased with
proceeds from and/or contributions under retirement plans that qualify for the
intended special federal income tax treatment. The following discussion is also
based on the assumption that the contract qualifies as an annuity contract for
federal income tax purposes. The Statement of Additional Information discusses
the requirements for qualifying as an annuity.
Purchase Payments
At the time the initial purchase payment is paid, as a prospective purchaser,
you must specify whether you are purchasing a non-qualified contract or a
qualified contract. If the initial purchase payment is derived from an exchange
or surrender of another annuity contract, Transamerica may require that the
prospective purchaser provide information with regard to the federal income tax
status of the previous annuity contract. Transamerica will require that persons
purchase separate contracts if they desire to invest monies qualifying for
different annuity tax treatment under the Code.
Each such separate contract would require the minimum initial purchase payment
stated above. Additional purchase payments under a contract must qualify for the
same federal income tax treatment as the initial purchase payment under the
contract. Transamerica will not accept an additional purchase payment under a
contract if the federal income tax treatment of such purchase payment would be
different from that of the initial purchase payment.
Taxation of Annuities In General
Section 72 of the Code governs taxation of annuities in general. Transamerica
believes that the owner who is a natural person generally is not taxed on
increases in the value of a contract until distribution occurs by withdrawing
all or part of the account value, for example, through withdrawals or annuity
payments under the annuity option elected.
For this purpose, the assignment, pledge, or agreement to assign or pledge any
portion of the account value, and in the case of a qualified contract, any
portion of an interest in the plan, generally will be treated as a distribution.
The taxable portion of a distribution, in the form of a single sum payment or an
annuity, is taxable as ordinary income.
The owner of any non-qualified contract who is not a natural person generally
must include in income any increase in the excess of the account value over the
investment in the contract during the taxable year. There are some exceptions to
this rule and a prospective owner that is not a natural person, for example, a
trust, may wish to discuss these with a competent tax adviser.
The following discussion generally applies to contracts owned by natural
persons.
Withdrawals
In the case of a withdrawal under a qualified contract, including withdrawals
under the systematic withdrawal option or the automatic payout option, a ratable
portion of the amount received is taxable. This portion is generally based on
the ratio of the investment in the contract to the individual's total accrued
benefit under the retirement plan.
The investment in the contract generally equals the amount of any non-deductible
purchase payments paid by or on behalf of any individual. For a qualified
contract, the investment in the contract can be zero. Special tax rules may
apply to certain distributions from a qualified contract.
With respect to non-qualified contracts, partial withdrawals, including
withdrawals under the systematic withdrawal option, are generally treated as
taxable income to the extent that the account value immediately before the
withdrawal exceeds the investment in the contract at that time. The investment
in the contract is generally equal to the amount of non-deductible purchase
payments made. If a partial withdrawal from the fixed account is subject to an
interest adjustment, the account value immediately before the withdrawal will
not be altered to take into account the interest adjustment. As a result, for
purposes of determining the taxable portion of the partial withdrawal, the
account value will be treated as including the amount deducted from the fixed
account due to the interest adjustment. Full surrenders are treated as taxable
income to the extent that the amount received exceeds the investment in the
contract.
Annuity Payments
Although the tax consequences may vary depending on the annuity payment elected
under the contract, in general, only the portion of the annuity payment that
represents the amount by which the account value exceeds the investment in the
contract will be taxed. After the investment in the contract is recovered, the
full amount of any additional annuity payments is taxable. For variable annuity
payments, the taxable portion is generally determined by an equation 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. However, the entire distribution
will be taxable once the recipient has recovered the dollar amount of his or her
investment in the contract.
For fixed annuity payments, in general, there is no tax on the portion of each
payment which represents the same ratio that the investment in the contract
bears to the total expected value of the annuity payments for the term of the
payments. However, the remainder of each annuity payment is taxable. Once the
investment in the contract has been fully recovered, the full amount of any
additional annuity payments is taxable. If annuity payments cease as a result of
an annuitant's death before full recovery of the investment in the contract,
consult a competent tax advisor regarding deductibility of the unrecovered
amount.
Withholding
The Code requires Transamerica to withhold federal income tax from distributions
under the contracts. However, except for distributions from certain qualified
contracts, an owner will be entitled to elect, in writing, not to have tax
withheld. Withholding applies to the portion of a distribution which is
includible in income and subject to federal income tax, where the taxable amount
is at least $200. Some states also require withholding for state income taxes.
The withholding varies according to the type of distribution and the owner's tax
status. "Eligible rollover distributions" from Section 401(a) plans and Section
403(b) tax sheltered annuities are subject to mandatory federal income tax
withholding at the rate of 20%. An eligible rollover distribution is the taxable
portion of any distribution from such a plan, except for certain distributions,
such as minimum required distributions or settlement option payments made in a
specified form. The 20% mandatory withholding does not apply, however, if the
owner chooses a "direct rollover" from the plan to another tax-qualified plan or
to an IRA, other than a Roth IRA. The federal income tax withholding rate for a
distribution that is not an eligible rollover distribution is 10% of the taxable
amount of the distribution.
Penalty Tax
In the case of a distribution pursuant to a non-qualified contract, a federal
income tax penalty that equals 10% of the amount treated as taxable income may
be imposed. In general, however, there is no penalty tax on distributions:
1. made on or after the date on which the owner attains age 591/2;
2. made as a result of death or disability of the owner; or
3. received in substantially equal periodic payments as a life annuity or a
joint and survivor annuity for the lives or life expectancies of the owner and a
joint owner
Other tax penalties may apply to certain distributions under a qualified
contract.
Taxation of Death Benefit Proceeds
Amounts may be distributed from the contract because of the death of an owner or
the annuitant. Generally such amounts are includible in income as follows:
1. if distributed in a lump sum, they are taxed in the same manner as a full
surrender, as described above; or
2. if distributed under an annuity option, they are taxed in the same manner as
annuity payments, as described above.
For these purposes, the investment in the contract is not affected by the
owner's or annuitant's death. That is, the investment in the contract remains
the amount of any purchase payments paid which were not excluded from gross
income. Other rules relating to distributions at death apply to qualified
contracts. You should consult your legal counsel and tax adviser regarding these
rules and their impact on qualified contracts.
Required Distributions upon Owner's Death
Notwithstanding any provision of the contract or this prospectus to the
contrary, no payment of benefits provided under the contract will be allowed
that does not satisfy the requirements of Section 72(s) of the Code. If the
owner dies before the annuity date, the death benefit payable to the owner's
beneficiary will be distributed as follows:
a) the death benefit must be completely distributed within five years of the
owner's date of death; or
b) the owner's beneficiary may elect, within the one year period after the
owner's date of death, to receive the death benefit in the form of an annuity
from us.
Please note that Item b) is based on the following provisions:
1. the annuity must be distributed in substantially equal installments over the
life of the owner's beneficiary or over a period not extending beyond the life
expectancy of the owner's beneficiary; and
2. the distributions must not begin not later than one year after the owner's
date of death.
Notwithstanding items a) and b) above, if the sole owner's beneficiary is the
deceased owner's surviving spouse, then the surviving spouse may elect, within
the one year period after the owner's date of death, to continue the contract
under the same terms as before the owner's death.
Upon receipt of such election from the spouse, in a form and manner acceptable
to us, at our service office:
1. all rights of the spouse as owner's beneficiary under the contract in effect
prior to such election will cease;
2. the spouse will become the owner of the contract and will also be treated as
the contingent annuitant, if none has been named and only if the deceased owner
was the annuitant; and
3. all rights and privileges granted by the contract or allowed by Transamerica
will belong to the spouse as owner of the contract.
This election will be deemed to have been made by the spouse if such spouse
makes a purchase payment payment to the contract or fails to make a timely
election as described in this paragraph. If the owner's beneficiary is a
nonspouse, the distribution provisions described in subparagraphs a. and b.
above, will apply even if the annuitant and/or contingent annuitant are alive at
the time of the owner's death. If the nonspouse owner's beneficiary is not an
individual, then only a cash payment will be paid.
If no election is received by us from a nonspouse owner's beneficiary within the
one year period after the owner's date of death, then we will pay the death
benefit to the owner's beneficiary in a cash payment. The death benefit will be
determined as of the date we make the cash payment. Such cash payment will be in
full settlement of all our liability under the contract.
If Annuitant Dies After Annuity Starts - If the annuitant dies after the annuity
starts, any benefit payable will be distributed at least as rapidly as under the
annuity form then in effect.
If Owner Dies After Annuity Starts - If the owner dies after the annuity starts,
any benefit payable will continue to be distributed at least as rapidly as under
the annuity form then in effect. All of the owner's rights granted under the
contract or allowed by us will pass to the owner's beneficiary.
Joint Ownership - For purposes of this section, if the contract has joint owners
we will consider the date of death of the first joint owner as the death of the
owner and the surviving joint owner will become the owner of the contract.
Transfers, Assignments, or Exchanges of the Contract
A transfer of ownership of a non-qualified contract, the designation of an
annuitant, payee, or beneficiary who is not also the owner, or the exchange of a
contract may result in certain tax consequences to the owner that are not
discussed herein.
If, as an owner, you are contemplating any such designation, transfer,
assignment, or exchange, you should contact a competent tax adviser with respect
to the potential tax effects of such a transaction. Certain qualified contracts
cannot be transferred or assigned, except as permitted by the Code or the
Employee Retirement Income Security Act of 1974, also referred to simply as
ERISA.
Multiple Policies
All deferred non-qualified annuity contracts that are issued by Transamerica, or
its affiliates, to the same owner during any calendar year are treated as one
annuity contract for purposes of determining the amount includible in gross
income under section 72(e) of the Code. In addition, the Treasury Department has
specific authority to issue regulations that prevent the avoidance of section
72(e) through the serial purchase of annuity contracts or otherwise.
Congress has also indicated that the Treasury Department may have authority to
treat the combination purchase of an immediate annuity contract and separate
deferred annuity contracts as a single annuity contract under its general
authority to prescribe rules as may be necessary to enforce the income tax laws.
QUALIFIED CONTRACTS
In General
The qualified contract is designed for use as a rollover IRA. With
Transamerica's prior permission, the contract may also be used as a rollover
Roth IRA, a contributory IRA, or as a contributory Roth IRA, as a Section 403(b)
annuity, and for use in qualified pension and profit sharing plans established
by corporate employers.
The tax rules applicable to participants and beneficiaries in retirement plans
vary according to the type of plan and the terms and conditions of the plan.
Special favorable tax treatment may be available for certain types of
contributions and distributions. Adverse tax consequences may result from:
* contributions in excess of specified limits;
* distributions prior to age 591/2, subject to certain exceptions;
* distributions that do not conform to specified commencement and minimum
distribution rules; and
* other specified circumstances.
We make no attempt to provide more than general information about use of the
contracts with the various types of retirement plans. Owners and participants
under retirement plans as well as annuitants and beneficiaries are cautioned
that the rights of any person to any benefits under qualified contracts may be
subject to the terms and conditions of the plans themselves, regardless of the
terms and conditions of the contract issued in connection with such a plan.
Some retirement plans are subject to distribution and other requirements that
are not incorporated in the administration of the contracts. Owners are
responsible for determining that contributions, distributions and other
transactions with respect to the contracts satisfy applicable law. Purchasers of
contracts for use with any retirement plan should consult their legal counsel
and tax adviser regarding the suitability of the contract.
For qualified plans under Section 401(a), 403(a) and 403(b), the Code requires
that distributions generally must commence no later than the later of April 1 of
the calendar year following the calendar year in which the owner or plan
participant:
1. reaches age 70 1/2; or
2. retires
These distributions must be made in a specified form and manner. If the plan
participant is a "5 percent owner" as defined in the Code, distributions
generally must begin no later than April 1 of the calendar year following the
calendar year in which the owner, or plan participant reaches, age 70 1/2. For
IRAs described in Section 408, distributions generally must commence no later
than the later of April 1 of the calendar year following the calendar year in
which the owner, or plan participant, reaches age 70 1/2. Roth IRAs under
Section 408A do not require distributions at any time prior to the owner's
death.
Qualified Pension and Profit Sharing Plans
Section 401(a) of the Code permits employers to establish various types of
retirement plans for employees. Such retirement plans may permit the purchase of
the contract in order to provide retirement savings under the plans. The
Self-Employed Individuals' Tax Retirement Act of 1962, as amended, commonly
referred to as H.R. 10, also permits self-employed individuals to establish
qualified plans for themselves and their employees.
Adverse tax consequences to the plan, to the participant, or to both, may result
if this contract is assigned or transferred to any individual as a means to
provide benefits payments. Purchasers of a contract for use with such plans
should seek competent advice regarding the suitability of the proposed plan
documents and the contract to their specific needs. The contract is designed to
invest retirement savings and not to distribute retirement benefits.
Individual Retirement Annuities, Simplified Employee Plans and Roth IRAs
The contracts are designed for use with rollover IRAs and contributory IRAs. A
contributory IRA is a contract in which initial and subsequent purchase payments
are subject to limitations imposed by the Code. Section 408 of the Code permits
eligible individuals to contribute to an individual retirement program known as
an individual retirement annuity or individual retirement account, each
hereinafter referred to as an IRA. Also, distributions from certain other
qualified plans may be rolled over, or transferred on a tax-deferred basis into
an IRA.
Earnings in an IRA are not taxed until distributed. IRA contributions are
limited each year to the lesser of $2,000 or 100% of the owner's compensation.
This includes earned income as defined in Code Section 401(c)(2) and may be
deductible in whole or in part depending on the individual's adjusted gross
income and whether or not the individual is considered an active participant in
a qualified plan. The limit on the amount contributed to an IRA does not apply
to distributions from certain other types of qualified plans that are rolled
over or transferred on a tax-deferred basis into an IRA.
Other than nondeductible contributions, amounts in the IRA are taxed when
distributed from the IRA. Distributions prior to age 59 1/2 are subject to a 10%
penalty tax, unless certain exceptions apply. Purchasers should seek competent
advice as to the suitability of the contract for use with IRAs.
Eligible employers that meet specified criteria under Code Section 408(k) could
establish simplified employee pension plans, also referred to as SEP-IRAs, for
their employees using IRAs. Employer contributions that may be made to such
plans are larger than the amounts that may be contributed to regular IRAs, and
may be deductible to the employer. SEP-IRAs are subject to certain Code
requirements regarding participation and amounts of contributions.
The Policies may also be used with rollover Roth IRAs and contributory Roth
IRAs. A contributory Roth IRA is a contract to which initial and subsequent
purchase payments are subject to limitations imposed by the Code. Section 408A
of the Code permits eligible individuals to contribute to an individual
retirement program known as a Roth IRA on a non-deductible basis. In addition,
distributions from a Section 408 IRA may be converted to a Roth IRA.
A Section 408 IRA is an IRA described in Sections 408(a) or 408(b), other than a
Roth IRA. You should consult a tax adviser before combining any converted
amounts with any other Roth IRA contributions, including any other conversion
amounts from other tax years.
Distributions from a Roth IRA generally are not taxed, except that, once total
distributions exceed contributions to the Roth IRA, income tax and a 10% penalty
tax may apply to distributions made:
1. before age 59 1/2, subject to certain exceptions; or
2. during the five taxable years starting with the year in which the first
contribution is made to the Roth IRA.
Purchasers should seek competent advice as to the suitability of the contract
for use with Roth IRAs.The sale of a contract for use with an IRA, SEP-IRA or
Roth IRA may be subject to special disclosure requirements of the Internal
Revenue Service. Purchasers of these contracts will be provided with
supplemental information required by the Internal Revenue Service or other
appropriate agency. Such purchasers will have the right to revoke their purchase
within 7 days of the earlier of the
establishment of the IRA, SEP-IRA or Roth IRA or their purchase.
Tax Sheltered Annuities
Under Code Section 403(b), payments made by public school systems and certain
tax exempt organizations to purchase annuity contracts for their employees are
excludable from the gross income of the employee, subject to certain
limitations. However, these payments may be subject to Social Security and
Medicare taxes, which are also referred to as FICA taxes.
Code Section 403(b)(11) restricts the distribution under Code Section 403(b)
annuity contracts of:
* elective contributions made in years beginning after December 31, 1988;
* earnings on those contributions; or
* earnings in such years on amounts held as of the last year beginning before
January 1, 1989.
Distribution of those amounts may only occur upon death of the employee,
attainment of age 591/2, separation from service, disability, or financial
hardship. In addition, income attributable to elective contributions may not be
distributed in the case of hardship.
Pre-1989 contributions and earnings through December 31, 1989 are not subject to
the restrictions described above. However, funds transferred to a qualified
contract from a Section 403(b)(7) custodial account will be subject to the
restrictions.
Restrictions under Qualified Policies
Other restrictions with respect to the election, commencement, or distribution
of benefits may apply under qualified contracts or under the terms of the plans
in respect of which qualified contracts are issued. A qualified contract will be
amended as necessary to conform to the requirements of the Code.
Possible Changes in Taxation
Legislation has been proposed in 1998 that, if enacted, would adversely modify
the federal taxation of certain insurance and annuity contracts. For example,
one proposal would tax transfers among investment options and tax exchanges
involving variable contracts. A second proposal would reduce the "investment in
the contract" under cash value life insurance and certain annuity contracts by
certain amounts, thereby increasing the amount of income for purposes of
computing gain. Although the likelihood of there being any changes is uncertain,
there is always the possibility that the tax treatment of the contracts could be
changed by legislation or other means. Moreover, it is also possible that any
change could be retroactive, that is, effective prior to the date of the change.
You should consult a tax adviser with respect to legislative developments and
their effect on the contract.
Other Tax Consequences
As noted above, the foregoing discussion of the federal income tax consequences
is not exhaustive and special rules are provided with respect to other tax
situations not discussed in this prospectus. Further, the federal income tax
consequences discussed herein reflect Transamerica's understanding of current
law and the law may change. Federal gift and estate tax consequences and state
and local estate, inheritance, and other tax consequences of ownership or
receipt of distributions under the contract depend on the individual
circumstances of each owner or recipient of the distribution. A competent tax
adviser should be consulted for further information.
DISTRIBUTION OF THE CONTRACT
Transamerica Securities Sales Corporation, also referred to as TSSC, is the
principal underwriter of the contracts. TSSC may also serve as an underwriter
and distributor of other contracts issued through the variable account and
certain other separate accounts of Transamerica and any affiliates of
Transamerica. TSSC is a wholly-owned subsidiary of Transamerica Insurance
Corporation of California, which is a subsidiary of Transamerica Corporation.
TSSC is registered with the Commission as a broker/dealer and is a member of the
National Association of Securities Dealers, Inc., also known as the NASD. Its
principal offices are located at 1150 South Olive, Los Angeles, California
90015. Transamerica pays TSSC for acting as the principal underwriter under a
distribution agreement.
TSSC has entered into sales agreements with other broker/dealers to solicit
applications for the contracts through registered representatives who are
licensed to sell securities and variable insurance products. These agreements
provide that applications for the contracts may be solicited by registered
representatives of the broker/dealers appointed by Transamerica to sell its
variable life insurance and variable annuities. These broker/dealers are
registered with the Commission and are members of the NASD. The registered
representatives are authorized under applicable state regulations to sell
variable life insurance and variable annuities.
Under the agreements, contracts will be sold by broker/dealers which will
generally receive compensation of up to 6.25% of any initial and additional
purchase payments paid, although higher amounts may be paid in certain
circumstances. Additional amounts may be paid in certain circumstances (such as
upon certain annuitizations, when an additional commission of 2.5% of the
account value annuitized may be paid). Additional amounts, including asset based
trail commissions, may be paid in certain circumstances.
Transamerica Financial Resources, Inc. , referred to as TFR, also is an
underwriter and distributor of the Policies. TFR is a wholly-owned subsidiary of
Transamerica Insurance Corporation of California and is registered with the
Commission and the NASD as a broker/dealer.
PREPARING FOR YEAR 2000
As a result of computer systems that may recognize a date of 12/31/00 as the
year 1900 rather than the year 2000, disruptions of business activities may
occur with the year 2000. In response, Transamerica established in 1997 a "Y2K"
committee to address this issue. With regard to the systems and software which
administer and affect the contracts, Transamerica has determined that its own
internal systems will be Year 2000 compliant. Additionally, Transamerica
requires any third party vendor which supplies software or administrative
services to Transamerica in connection with the administration of the contracts,
to certify that the software or services will be Year 2000 compliant.
In determining the variable accumulation unit values for each variable
sub-account, Transamerica is reliant upon information received from the
portfolios and is confirming that Year 2000 issues will not interfere with this
flow of information. As of the date of this prospectus, it is not anticipated
that contract owners will experience negative affects on their investment, or on
the services received in connection with their contracts, as a result of Year
2000 issues. However, especially when taking into account interaction with other
systems, it is difficult to predict with precision that there will be no
disruption of services in connection with the year 2000.
LEGAL PROCEEDINGS
There is no pending material legal proceeding affecting the variable account.
Transamerica is involved in various kinds of routine litigation which, in
management's judgment, are not of material importance to Transamerica's assets
or to the variable account.
LEGAL MATTERS
The organization of Transamerica, its authority to issue the contracts and the
validity of the form of the contracts have been passed upon by James W. Dederer,
general counsel of Transamerica.
ACCOUNTANTS
The financial statements for each of the three years ended December 31, 1998
appearing in the Statement of Additional Information have been audited by Ernst
& Young LLP, Independent Auditors, as set forth in their reports thereon
appearing elsewhere herein. They are included in reliance upon such reports
given upon the authority of such firm experts in accounting and auditing. VOTING
RIGHTS
To the extent required by applicable law, all portfolio shares held in the
variable account will be voted by Transamerica at regular and special
shareholder meetings of the respective funds in accordance with instructions
received from persons having voting interests in the corresponding sub-account.
If, however, the 1940 Act or any regulation thereunder should be amended, or if
the present interpretation thereof should change, or if Transamerica determines
that it is allowed to vote all portfolio shares in its own right, Transamerica
may elect to do so.
The person with the voting interest is the owner. The number of votes which are
available to an owner will be calculated separately for each sub-account of the
variable account. Before the annuity date, that number will be determined by
applying his or her percentage interest, if any, in a particular sub-account to
the total number of votes attributable to that sub-account. The owner holds a
voting interest in each sub-account to which the account value is allocated.
After the annuity date, the number of votes decreases as annuity payments are
made and as the reserves for the contract decrease.
The number of votes of a portfolio 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 funds. Voting instructions will be
solicited by written communication prior to such meeting in accordance with
procedures established by the respective funds.
Shares as to which no timely instructions are received and shares held by
Transamerica as to which owners have no beneficial interest will be voted in
proportion to the voting instructions which are received with respect to all
contracts participating in the sub-account. 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.
Each person or entity having a voting interest in a sub-account will receive
proxy material, reports and other material relating to the appropriate
portfolio. It should be noted that the funds are not required to, and do not
intend to, hold annual or other regular meetings of shareholders.
AVAILABLE INFORMATION
Transamerica has filed a registration statement with the Securities and Exchange
Commission under the Securities Act of 1933 relating to the contract offered by
this prospectus. This prospectus has been filed as a part of the registration
statement and does not contain all of the information set forth in the
registration statement and exhibits thereto, and reference is hereby made to
such registration statement and exhibits for further information relating to
Transamerica and the contract.
Statements contained in this prospectus, as to the content of the contract and
other legal instruments, are summaries. For a complete statement of the terms
thereof, reference is made to the instruments filed as exhibits to the
registration statement. The registration statement and the exhibits thereto may
be inspected and copied at the office of the Commission, located at 450 Fifth
Street, N.W., Washington, D.C.
Appendix A
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
A Statement of Additional Information is available which contains more details
concerning the subjects discussed in this prospectus. The following is the table
of contents for that statement:
TABLE OF CONTENTS
Page
The Contract (page 22)
3
Dollar Cost Averaging (page 25)
3
Net Investment Factor (page 24)
3
Annuity Period (page 33)
3
Variable Annuity Units and Payments
3
Variable Annuity Unit Value
4
Transfers After the Annuity Date
4
General Provisions
4
IRS Required Distributions
4
Non-Participating
4
Misstatement of Age or Sex
4
Proof of Existence and Age
4
Assignment
4
Annuity Data
5
Annual Report
5
Incontestability
5
Ownership
5
Entire Contract
5
Changes In the Contract
5
Protection of Benefits
5
Delay of Payments
5
Notices and Directions
6
Calculations of Yields and Total Returns (page 16)
6
Money Market Sub-Account Yield Calculations
6
Other Sub-Account Yield Calculations
6
Standard Total Return Calculations
7
Hypothetical Performance Data
8
Other Performance Data
8
Historic Performance Data
8
General Limitations
8
Sub-Account Performance Figures
8
Hypothetical Sub-Account Performance Figures
8
Federal Tax Matters (page 35)
10
Taxation of Transamerica
10
Tax Status of the Policies
11
Distribution of the Contract (page 37)
11
Safekeeping of Account Assets (page 18)
12
Transamerica (page 18)
12
General Information and History
12
State Regulation (Page 18)
12
Records and Reports
12
Financial Statements
12
Appendix
13
Annuity Transfer Formula
13
Appendix B
Example of Variable Accumulation Unit Value Calculations
Suppose the net asset value per share of a portfolio at the end of the current
valuation period is $20.15; at the end of the immediately preceding valuation
period it was $20.10; the valuation period is one day; and no dividends or
distributions caused the portfolio to go ex-dividend during the current
valuation period. $20.15 divided by $20.10 is 1.002488. Subtracting the one day
risk factor for mortality and expense risk charge and the administrative expense
charge of .003814% (the daily equivalent of the current charge of 1.40% on an
annual basis) gives a net investment factor of 1.002449. If the value of the
variable accumulation unit for the immediately preceding valuation period had
been 15.500000, the value for the current valuation period would be 15.537966
(15.5 x 1.002449).
Example of Variable Annuity Unit Value Calculations
Suppose the circumstances of the first example exist, and the value of a
variable annuity unit for the immediately preceding valuation period had been
13.500000. If the first variable annuity payment is determined by using an
annuity payment based on an assumed interest rate of 4% per year, the value of
the variable annuity unit for the current valuation period would be 13.531613
(13.5 x 1.002449, which is the Net Investment Factor x 0.999893). 0.999893 is
the factor, for a one day valuation period, that neutralizes the assumed rate of
four percent (4%) per year used to establish the variable annuity rates found in
the contract.
Example of Variable Annuity Payment Calculations
Suppose that the account is currently credited with 3,200.000000 variable
accumulation units of a particular sub-account. Also suppose that the variable
accumulation unit value and the variable annuity unit value for the particular
sub-account for the valuation period which ends immediately preceding the first
day of the month is 15.500000 and 13.500000 respectively, and that the variable
annuity rate for the age and option elected is $5.73 per $1,000.
Then the first variable annuity payment would be:
3.200 x 15.5 x 5.73 divided by 1,000 = $284.21,
and the number of variable annuity units credited for future payments would
be:
284.21 divided by 13.5 = 21.052444.
For the second monthly payment, suppose that the variable annuity unit value on
the 10th day of the second month is 13.565712. Then the second variable annuity
payment would be $285.59 (21.052444 x 13.565712).
Appendix C
DEFINITIONS
Account: The account established and maintained under the contract to which your
net purchase payments are credited.
Account Value: The account value is equal to the sum of: a) the fixed
accumulated value, plus b) the variable accumulated value.
Active Sub-Account: A sub-account of the variable account in which the contract
has current value.
Annuitant: The person: (a) whose life is used to determine the amount of monthly
annuity payments on the annuity date; and (b) who is the payee designated to
receive monthly annuity payments, unless such payee is changed by the owner. The
annuitant cannot be changed after the contract has been issued, except upon the
annuitant's death prior to the annuity date if a contingent annuitant has
previously been named. In the case of a qualified contract used to fund an IRA
or a 403(b) annuity, the owner must be the annuitant.
Annuitant's Beneficiary: The person or persons named by the owner who may
receive the death benefit under the contract, if: (a) the annuitant is not the
owner, there is no named contingent annuitant and the annuitant dies before the
annuity date and before the death of the owner or owners; or (b) the annuitant
dies after the annuity date under an annuity form containing a period certain
option.
Annuity Date: The date on which the annuity purchase amount will be applied to
provide an annuity under the annuity form and payment option selected by the
owner. Monthly annuity payments will start the first day of the month
immediately following the annuity date. Unless the annuity date is changed as
allowed by the contract, the annuity date will be as shown in the contract.
Annuity Payment: An amount paid by Transamerica at regular intervals to the
annuitant and/or any other payee specified by the owner. It may be on a variable
or fixed basis.
Annuity Purchase Amount: The amount applied as a single purchase payment to
provide an annuity under the annuity form and payment options available under
the contract. The annuity purchase amount is equal to the account value, less
any applicable contingent deferred sales load, and less any applicable premium
taxes. In determining the annuity purchase amount, Transamerica will waive the
contingent deferred sales load if the annuity form involves life contingencies
and the annuity date occurs on or after the third contract anniversary.
Annuity Year: A one-year period starting on the annuity date and, after that,
each succeeding one-year period.
Cash Surrender Value: The amount payable to the owner if the contract is
surrendered on or before the annuity date. The cash surrender value is equal to
the account value, less the account fee, less any applicable contingent deferred
sales load, and less applicable premium taxes.
Code: The U.S. Internal Revenue Code of 1986, as amended, and the rules and
regulations issued thereunder.
Contingent Annuitant: The person who: (a) becomes the annuitant if the annuitant
dies before the annuity date; or (b) may receive benefits under the contract if
the annuitant dies after the annuity date under an annuity form containing a
contingent annuity option. A contingent annuitant may be designated only if the
owner is not also the annuitant. The contingent annuitant may be changed at any
time by the owner while the annuitant is living and before the annuity date.
Contract Anniversary: The same month and day as the contract date in each
calendar year after the calendar year in which the contract date occurs.
Contract Date: The effective date of the contract as shown on the contract.
Contract Year: The 12-month period from the contract date and ending with the
day before the first contract anniversary and each twelve month period
thereafter. The first contract year for any particular net purchase payment is
the contract year in which the purchase payment is received by the service
center.
Expiration Date: The last day of a guarantee period.
Fixed Account: The fixed account contains one or more guarantee periods to which
all or portions of net purchase payments and transfers may be allocated. The
fixed account assets are general assets of the company and are distinguishable
from those allocated to a separate account of the company.
Fixed Accumulated Value: The total dollar amount of all guarantee amounts held
under the fixed account for the contract prior to the annuity date. The fixed
accumulated value is determined without regard to any interest adjustment.
Fixed Annuity: An annuity with predetermined payment amounts.
Free Look Period: The period of time, beginning on the date the owner receives
the contract, during which the owner has the right to cancel the contract. The
length of this period depends upon the state of issuance.
Funds: Dreyfus Variable Investment Fund, Dreyfus Stock Index Fund, The Dreyfus
Socially Responsible Growth Fund, Inc., Dreyfus Investment Portfolios and
Transamerica Variable Insurance Fund, Inc., in which the variable account
currently invests.
Guarantee Amount: An amount equal to: a) the amount of the net purchase payment
or transfer allocated to a particular guarantee period with a particular
expiration date; less b) any withdrawals or transfers made from that guarantee
period; less c) any applicable transfer fee; less d) any reductions for the
annual account fee; and plus e) interest credited.
Guarantee Period: The period for which a guaranteed interest rate is credited
which shall not be less than one year.
Inactive Sub-Account: A sub-account of the variable account in which the
contract has a zero balance.
Net Investment Factor: An index that measures the investment performance of a
sub-account from one valuation period to the next.
Net Purchase Payment: A purchase payment reduced by any applicable premium tax,
including retaliatory premium taxes.
Non-Qualified Contract: A contract other than a qualified contract.
Owner or Joint Owners: The person or persons who, while living, control all
rights and benefits under the contract. Joint owners own the contract equally
with the right of survivorship. The right of survivorship means that if a joint
owner dies, his or her interest in the contract will pass to the surviving joint
owner in accordance with the death benefit provision. Joint owners must be
husband and wife as of the contract date (except in Pennsylvania). Qualified
contracts may not have joint
owners.
Owner's Beneficiary: If the owner is an individual, the owner's beneficiary is
the person(s) who may receive the death benefit if the owner dies before the
annuity date and before the death of the annuitant. If the contract has joint
owners, the surviving joint owner will be the owner's beneficiary.
Payee: The person who receives the annuity payments after the annuity date. The
payee will be the annuitant, unless otherwise changed by the owner.
Portfolio: Dreyfus Stock Index Fund, The Dreyfus Socially Responsible Growth
Fund, Inc., or any one of the series of Dreyfus Variable Investment Fund or any
one of the portfolios of Dreyfus Investment Portfolios or the Growth Portfolio
of Transamerica Variable Insurance Fund, Inc., underlying a sub-account of the
variable account.
Proof of Death: May be: (a) a copy of a certified death certificate; (b) a copy
of 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 satisfactory to Transamerica.
Qualified Contract: A contract issued in connection with a retirement plan or
program.
Receipt: Receipt and acceptance by Transamerica at its service center.
Series: Any of the portfolios of Dreyfus Variable Investment Fund available for
investment by a sub-account under the contract.
Service Center: Transamerica's Annuity Service Center, at P.O. Box 31728,
Charlotte, North Carolina 28231-1728 and at telephone (800) 258-4261.
Source Account: A sub-account of the variable account or the fixed account, as
permitted, from which dollar cost averaging transfers are being made.
Sub-Account: A subdivision of the variable account investing solely in shares of
one of the portfolios.
Valuation Day: Any day the New York Stock Exchange is open for trading.
Valuation Period: The time interval between the closing of the New York Stock
Exchange on consecutive valuation days.
Variable Account: Separate Account VA-2L, a separate account established and
maintained by Transamerica for the investment of a portion of its assets
pursuant to Section 10506 of the California Insurance Code. The variable account
contains several sub-accounts to which all or portions of net purchase payments
and transfers may be allocated.
Variable Accumulated Value: The total dollar amount of all variable accumulation
units under each sub-account of the variable account held for the contract prior
to the annuity date. The variable accumulated value prior to the annuity date is
equal to: (a) net purchase payments allocated to the sub-accounts; plus or minus
(b) any increase or decrease in the value of assets of the sub-accounts due to
investment results; less (c) the daily mortality and expense risk charge; less
(d) the daily administrative expense charge; less (e) reductions for the annual
account fee deducted on the last business day of each contract year; plus or
minus (f) amounts transferred to or from the fixed account; less (g) any
applicable transfer fees; and less (h) withdrawals from the sub-accounts.
Variable Accumulation Unit: A unit of measure used to determine the account
value prior to the annuity date. The value of a variable accumulation unit
varies with each sub-account.
Variable Annuity: An annuity with payments which vary as to dollar amount in
relation to the investment performance of specified sub-accounts of the variable
account.
Variable Annuity Unit: A unit of measure used to determine the amount of the
second and each subsequent payment under a variable annuity payment option. The
value of a variable annuity unit varies with each sub-account.
Withdrawals: Refers to partial withdrawals, full surrenders, and systematic
withdrawals that are paid in cash to the owner, person or persons specified by
the owner.
Written Notice or Written Request: A notice or request in writing by the owner
to Transamerica's service center. Such a request must contain original
signatures; no carbons or photocopies will be accepted. Transamerica reserves
the right to accept a facsimile copy.
Appendix D
CONDENSED FINANCIAL INFORMATION
The following condensed financial information is derived from the financial
statements of the variable account. The data should be read in conjunction with
the financial statements, related notes, and other financial information
included in the Statement of Additional Information.
The following table sets forth certain information regarding the sub-accounts
for the period from commencement of business operations of the sub-account
through December 31, 1998. The variable accumulation unit values and the number
of variable accumulation units outstanding for each sub-account for the periods
shown are as follows:
<TABLE>
<CAPTION>
Year Ending December 31, 1993
- ---------------------------------------------------------------------------------------------------------
Money Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
(Inception 1/4/93) (Inception 1/4/93) (Inception 1/4/93) (Inception 1/4/93) (Inception 1/4/93)
Accumulation Unit Value
<S> <C> <C> <C> <C> <C>
at Beginning of Period $1.021 $12.797 $13.225 $12.310 $39.620
Accumulation Unit Value
at End of Period $1.018 $12.861 $13.373 $12.445 $37.702
Number of Accumulation
Units Outstanding
at End of Period 2,678,280.492 167,686.797 137,252.898 86,752.856 138,557.449
Capital Appreciation Stock Index Socially Responsible
Sub-Account Sub-Account Sub-Account
(Inception- (Inception (Inception-
4/5/93 1/4/93 10/7/93
Accumulation Unit Value at
Beginning of Period $12.500 $15.310 $12.490
Accumulation Unit Value at
End of Period $13.160 $16.521 $13.364
Number of Accumulation Units
Outstanding at End of Period 237,733.021 93,536.733 26,089.826
Year Ending December 31, 1994
- ---------------------------------------------------------------------------------------------------------
Money Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $1.018 $12.861 $13.373 $12.445 $37.702
Accumulation Unit Value
at End of Period $1.048 $12.496 $12.672 $11.710 $40.064
Number of Accumulation
Units Outstanding
at End of Period 23,559,789.795 1,486,438.137 476,355.738 931,527.691 1.250,237.625
Growth and Income International Equity
Sub-Account Sub-Account
Capital Appreciation Stock Index Socially Responsible (Inception (Inception
Sub-Account Sub-Account Sub-Account 12/15/94) 12/15/94)
Accumulation Unit Value
at Beginning of Period $13.160 $16.521 $13.364 $12.177 $12.247
Accumulation Unit Value
at End of Period $13.373 $16.437 $13.377 $12.167 $12.240
Number of Accumulation
Units Outstanding
at End of Period 919,622.615 348,937.285 135,018.350 4,300.380 8,552.073
Year Ending December 31, 1995
- ------------------------------------------------------------------------------------------------------------
Money Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $1.048 $12.496 $12.672 $11.710 $40.064
Accumulation Unit Value
at End of Period $1.093 $12.292 $14.740 $13.908 $51.121
Number of Accumulation
Units Outstanding
at End of Period 31,807,563.947 1,288,429.555 903,799.152 2,052,313.888 2,155,879.198
Growth and Income International Equity
Sub-Account Sub-Account
Capital Appreciation Stock Index Socially Responsible (Inception (Inception
Sub-Account Sub-Account Sub-Account 1/5/95) 1/5/95)
Accumulation Unit Value
at Beginning of Period $13.373 $16.437 $13.377 $12.167 $12.240
Accumulation Unit Value
at End of Period $17.610 $22.172 $17.752 $19.426 $12.964
Number of Accumulation
Units Outstanding
at End of Period 2,077,029.504 977,271.816 295,077.936 2,565,038.589 530,374.642
Year Ending December 31, 1996
- ---------------------------------------------------------------------------------------------------------
Money Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $1.093 $12.292 $14.740 $13.908 $51.121
Accumulation Unit Value
at End of Period $1.132 $11.682 $14.911 $14.142 $58.773
Number of Accumulation
Units Outstanding
at End of Period 38,983,053.941 1,232, 530.711 1,320,168.687 3,072,774.847 2,736,720.675
International
Capital Appreciation Stock Index Socially Responsible Growth and Income Equity
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $17.610 $22.172 $17.752 $19.426 $12.964
Accumulation Unit Value
at End of Period $21.802 $26.791 $21.221 $23.131 $14.267
Number of Accumulation
Units Outstanding
at End of Period 3,665,146.389 2,030,280.057 708,680.320 6,332,649.215 1,480,395.223
International Value Disciplined Stock Small Company Stock
Sub-Account Sub-Account Sub-Account
(Inception 5/1/96) (Inception 5/1/96) (Incepiton 5/1/96)
Accumulation Unit Value
at Beginning of Period $10.00 $10.00 $10.00
Accumulation Unit Value
at End of Period $10.244 $11.776 $10.772
Number of Accumulation
Units Outstanding
at End of Period 230,868.491 618,809.191 543,949.419
Year Ending December 31, 1997
- ---------------------------------------------------------------------------------------------------------
Money Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $1.132 $11.682 $14.911 $14.142 $58.773
Accumulation Unit Value
at End of Period $1.175 $14.185 $15.736 $15.260 $67.668
Number of Accumulation
Units Outstanding
at End of Period 42,660,950.364 2,649,561.005 1,350,865.031 4,020,220.452 2,954,842.907
International
Capital Appreciation Stock Index Socially Responsible Growth and Income Equity
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $21.802 $26.791 $21.221 $23.131 $14.267
Accumulation Unit Value
at End of Period $27.532 $35.128 $26.879 $26.509 $15.422
Number of Accumulation
Units Outstanding
at End of Period 6,447,159.634 3,357,236.245 1,335,814.063 7,480,387.355 2,176,230.247
Limited Term
High Income Balanced
International Value Disciplined Stock Small Company Stock Sub-Account Sub-Account
Sub-Account Sub-Account Sub-Account (Inception 5/1/97) (Inception 5/1/97)
Accumulation Unit Value
at Beginning of Period $10.244 $11.776 $10.772 $10.000 $10.000
Accumulation Unit Value
at End of Period $10.982 $15.272 $12.935 $10.852 $11.738
Number of Accumulation
Units Outstanding
at End of Period 1,047,389.002 2,278,146.352 1,604,089.554 2,424,231.798 647,855.304
Year Ending December 31, 1998
- ---------------------------------------------------------------------------------------------------------
Money Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $_____ $_____ $______ $______ $______
Accumulation Unit Value
at End of Period $______ $______ $______ $______ $______
Number of Accumulation
Units Outstanding
at End of Period 12,049,327.817 1,017,390.458 424,325.816 987,773.886 1,031,483.594
International
Capital Appreciation Stock Index Socially Responsible Growth and Income Equity
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $______ $______ $______ $______ $______
Accumulation Unit Value
at End of Period $______ $______ $______ $______ $______
Number of Accumulation
Units Outstanding
at End of Period 1,798,913.636 808,857.987 230,281.724 2,179,109.968 378,355.293
Limited Term
High Income Balanced
International Value Disciplined Stock Small Company Stock Sub-Account Sub-Account
Sub-Account Sub-Account Sub-Account (Inception 5/1/97) (Inception 5/1/97)
Accumulation Unit Value
at Beginning of Period $______ $______ $______ $______ $______
Accumulation Unit Value
at End of Period $______ $______ $______ $______ $______
Number of Accumulation
Units Outstanding
at End of Period 172,941.244 1,196,912.676 513,524.112 473,373.863 333,714.857
Transamerica Growth Cash Value MidCap Stock
Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $______ $______ $______
Accumulation Unit Value
at End of Period $______ $______ $______
Number of Accumulation
Units Outstanding
at End of Period 172,941.244 1,196,912.676 513,524.112
</TABLE>
Financial Statements for the Variable Account and Transamerica
The financial statements and reports of independent auditors for the
variable account and Transamerica are contained in the Statement of Additional
Information.
<PAGE>
1
STATEMENT OF ADDITIONAL INFORMATION FOR
DREYFUS/TRANSAMERICA TRIPLE ADVANTAGE
VARIABLE ANNUITY
Issued By
Transamerica Occidental Life Insurance Company
The Statement of Additional Information expands upon subjects discussed
in the current Prospectus for the Dreyfus/Transamerica Triple Advantage Variable
Annuity (Contract) issued by Transamerica Occidental Life Insurance Company. The
Owner may obtain a copy of the Prospectus dated May 1, 1999, as supplemented
from time to time, by writing to Transamerica Occidental Life Insurance Company,
Annuity Service Center, at P.O. Box 31848 Charlotte, North Carolina 28231 or
calling 800-258-4260. Terms used in the current Prospectus for the Contract are
incorporated in this Statement.
The Contract will be issued as a certificate under a group annuity
contract in some states and as an individual annuity contract in other states.
The term "Contract" as used herein refers to both the individual contract and
the certificates issued under the group contract.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACT.
Dated May 1, 1999
<PAGE>
<TABLE>
<CAPTION>
11
TABLE OF CONTENTS
Page
<S> <C>
THE CONTRACT......................................................................................................3
DOLLAR COST AVERAGING.............................................................................................3
NET INVESTMENT FACTOR.............................................................................................3
ANNUITY PERIOD....................................................................................................3
Variable Annuity Units and Payments......................................................................3
Variable Annuity Unit Value..............................................................................4
Transfers After the Annuity Date.........................................................................4
GENERAL PROVISIONS................................................................................................4
IRS Required Distributions...............................................................................4
Non-Participating........................................................................................4
Misstatement of Age or Sex...............................................................................4
Proof of Existence and Age...............................................................................4
Assignment...............................................................................................4
Annuity Data.............................................................................................5
Annual Report............................................................................................5
Incontestability.........................................................................................5
Ownership................................................................................................5
Entire Contract..........................................................................................5
Changes in the Contract..................................................................................5
Protection of Benefits...................................................................................5
Delay of Payments........................................................................................5
Notices and Directions...................................................................................6
CALCULATION OF YIELDS AND TOTAL RETURNS...........................................................................6
Money Market Sub-Account Yield Calculation...............................................................6
Other Sub-Account Yield Calculations.....................................................................7
Standard Total Return Calculations.......................................................................7
Hypothetical Performance Data............................................................................8
Other Performance Data...................................................................................8
HISTORIC PERFORMANCE DATA.........................................................................................8
General Limitations......................................................................................8
Sub-Account Performance Data.............................................................................9
Hypothetical Sub-Account Performance Figures.............................................................9
FEDERAL TAX MATTERS..............................................................................................11
Taxation of Transamerica................................................................................11
Tax Status of the Contract..............................................................................11
DISTRIBUTION OF THE CONTRACT.....................................................................................12
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS...........................................................................13
TRANSAMERICA.....................................................................................................13
General Information and History.........................................................................13
STATE REGULATION.................................................................................................13
RECORDS AND REPORTS..............................................................................................13
FINANCIAL STATEMENTS.............................................................................................13
APPENDIX.........................................................................................................14
Annuity Transfer Formula.............................................................................14
</TABLE>
<PAGE>
THE CONTRACT
As a supplement to the description in the Prospectus, the following
provides additional information about the Contract which may be of interest to
some Owners.
DOLLAR COST AVERAGING
We reserve the right to send written notification to the Owner as to
the options available if termination of Dollar Cost Averaging, either by the
Owner or by Transamerica, results in the value of the receiving Sub-Account(s)
to which monthly transfers were made to be less than $500. The Owner will have
10 days from the date our notice is mailed to:
(a) transfer the value of the Sub-Account(s) to another Sub-Account
with a value equal to or greater than $500; or (b) transfer funds from
another Sub-Account into the receiving Sub-Account(s) to bring the
value of that Sub-Account to at least $500; or (c) submit an additional
Purchase Payment to make the value of the Sub-Account equal to or
greater than $500; or (d) transfer the entire value of the receiving
Sub-Account(s) back into the Source Account from which the automatic
transfers were made. If no election, in a form and manner acceptable to
Transamerica, is made by the Owner prior to the end
of the 10 day period, we reserve the right to transfer the value of the
receiving Sub-Account(s) back into the Source Account from which the automatic
transfers were made. Transfers made as a result of (a), (b), or (d) above will
not be counted for purposes of the eighteen free transfers per Contract Year
limitation.
NET INVESTMENT FACTOR For any Sub-Account of the Variable Account, the Net
Investment Factor for a Valuation Period, before the Annuity Date, is (a)
divided by (b), minus (c) minus (d). Where (a) is The net asset value per share
held in the Sub-Account, as of the end of the Valuation Period, plus or minus
The per-share amount of any dividend or capital gain distributions if the
"ex-dividend" date occurs in the Valuation Period, plus or minus A per-share
charge or credit as Transamerica may determine, as of the end of the Valuation
Period, for taxes. Where (b) is The net asset value per share held in the
Sub-Account as of the end of the last prior Valuation Period. Where (c) is The
daily charge of 0.003403% (1.25% annually) for the Mortality and Expense Risk
Charge under the Contract times the number of calendar days in the current
Valuation Period. Where (d) is The daily Administrative Expense Charge,
currently 0.000411% (0.15% annually) times the number of calendar days in the
current Valuation Period. This charge may be increased, but will not exceed
0.000684% (0.25% annually). A Valuation Day is defined as any day that the New
York Stock Exchange is open.
ANNUITY PERIOD
The Variable Annuity Options provide for payments that fluctuate or
vary in dollar amount, based on the investment performance of the elected
Variable Account Sub-Account(s).
Variable Annuity Units and Payments
For the first monthly payment, the number of Variable Annuity Units
credited in each Sub-Account will be determined by dividing (a) the product of
the portion of the value to be applied to the Sub-Account and the Variable
Annuity Purchase Rate specified in the Contract by (b) the value of one Variable
Annuity Unit in that Sub-Account on the Annuity Date.
The amount of each subsequent Variable Annuity Payment equals the
product of the number of Variable Annuity Units in each Sub-Account and the
Sub-Account's Variable Annuity Unit Value as of the tenth day of the month
before the payment due date. The amount of each payment may vary as may the date
of determination.
Variable Annuity Unit Value
The value of a Variable Annuity Unit in a Sub-Account on any Valuation
Day is determined as described below.
The Net Investment Factor for the Valuation Period (for the appropriate
Annuity Payment frequency) just ended is multiplied by the value of the Variable
Annuity Unit for the Sub-Account on the preceding Valuation Day. The Net
Investment Factor after the Annuity Date is calculated in the same manner as
before the Annuity Date and then multiplied by an interest factor. The interest
factor equals (.999893)n where n is the number of days since the preceding
Valuation Day. This compensates for the 4% interest assumption built into the
Variable Annuity Purchase Rates.
Transfers After the Annuity Date
After the Annuity Date, the Owner may transfer Variable Annuity Units
from one Sub-Account to another, subject to certain limitations. (See
"Transfers" page 28 of the Prospectus.) The dollar amount of each subsequent
monthly Variable Annuity Payment after the transfer must be determined using the
new number of Variable Annuity Units multiplied by the Sub-Account's Variable
Annuity Unit Value.
The formula used to determine a transfer after the Annuity Date can be
found in the Appendix to this Statement of Additional Information.
GENERAL PROVISIONS
IRS Required Distributions
The Contract is intended to qualify as an annuity contract for federal
income tax purposes. All provisions in the Contract will be interpreted to
maintain such tax qualification. We may make changes in order to maintain this
qualification or to conform the Contract to any applicable changes in the tax
qualification requirements. We will provide you with a copy of any changes made
to the Contract. If any Owner under a Non-Qualified Contract dies before the
entire interest in the Contract is distributed, the value generally must be
distributed to the designated Beneficiary so that the Contract qualifies as an
annuity under the Code. (See "Federal Tax Matters" page 39.)
Non-Participating
The Contract is non-participating. No dividends are payable and the
Contract will not share in the profits or surplus earnings of Transamerica.
Misstatement of Age or Sex
If the age or sex of the Annuitant or any other measuring life has been
misstated in the application, or other form relied upon to determine annuity
payment , the Annuity Payments under the Contract will be whatever the Annuity
Purchase Amount applied on the Annuity Date would purchase on the basis of the
correct age or sex of the Annuitant and/or other measuring life. Any
overpayments or underpayments by Transamerica as a result of any such
misstatement may be respectively charged against or credited to the Annuity
Payment or Annuity Payments to be made after the correction so as to adjust for
such overpayment or underpayment.
Proof of Existence and Age
Before making any payment under the Contract, Transamerica may require
proof of the existence and/or proof of the age of the Annuitant or any other
measuring life, or any other information deemed necessary in order to provide
benefits under the Contract.
Assignment
No assignment of a Contract will be binding on Transamerica unless made
in writing and given to Transamerica at its Service Center. Transamerica is not
responsible for the adequacy of any assignment. The Owner's rights and the
interest of any Annuitant or non-irrevocable Beneficiary will be subject to the
rights of any assignee of record.
Annuity Data
Transamerica will not be liable for obligations which depend on
receiving information from a Payee or measuring life until such information is
received in a satisfactory form.
Annual Report
At least once each Contract Year prior to the Annuity Date, the Owner
will be given a report of the current Account Value. This report will also
include any other information required by law or regulation. After the Annuity
Date, a confirmation will be provided with every Variable Annuity Payment.
Incontestability
Each Contract is incontestable from the Contract Date.
Ownership
Only the Owner(s) will be entitled to the rights granted by the
Contract, or allowed by Transamerica under the Contract. If an Owner dies, the
rights of the Owner belong to the estate of the Owner unless the Owner has
previously named an Owner's Beneficiary. A surviving Joint Owner automatically
becomes the Owner's Beneficiary.
Entire Contract
Transamerica has issued the Contract in consideration and acceptance of
the payment of the Initial Purchase Payment and, where state law requires, the
application. In those states that require a written application, a copy of the
application is attached to and is part of the Contract and along with the
Contract constitutes the entire contract. All statements made by the Owner are
considered representations and not warranties. Transamerica will not use any
statement in defense of a claim unless it is made in the application and a copy
of the application is attached to the Contract when issued.
The group annuity contract has been issued to a trust organized under
Missouri law. However, the sole purpose of the trust is to hold the group
annuity contract. The Owner has all rights and benefits under the individual
certificate issued under the group contract.
Changes in the Contract
Only two authorized officers of Transamerica, acting together, have the
authority to bind Transamerica or to make any change in the individual contract
or the group contract or individual certificates thereunder and then only in
writing. Transamerica will not be bound by any promise or representation made by
any other persons.
Transamerica may not change or amend the individual contract or the
group contract or individual certificates thereunder, except as expressly
provided therein, without the Owner's consent. However, Transamerica may change
or amend the individual contract or the group contract or individual
certificates thereunder if such change or amendment is necessary for the
individual contract or the group contract or individual certificates thereunder
to comply with any state or federal law, rule or regulation.
Protection of Benefits
To the extent permitted by law, no benefit (including death benefits)
under the Contract will be subject to any claim or process of law by any
creditor.
Delay of Payments
Payment of any cash withdrawal or lump sum death benefit due from the
Variable Account will occur within seven days from the date the election becomes
effective, except that Transamerica may be permitted to postpone such payment or
transfers if: (1) the New York Stock Exchange is closed for other than usual
weekends or holidays, or trading on the Exchange is otherwise restricted; or (2)
an emergency exists as defined by the Securities and Exchange Commission
(Commission), or the Commission requires that trading be restricted; or (3) the
Commission permits a delay for the protection of Owners.
In addition, while it is our intention to process all transfers from
the Sub-Accounts immediately upon receipt of a transfer request, the Contract
gives us the right to delay effecting a transfer from a Sub-Account for up to
seven days, but only in certain limited circumstances. However, the staff of the
Commission currently interprets the Investment Company Act of 1940 to require
the immediate processing of all transfers, and in compliance with that
interpretation we will process all transfers immediately unless and until the
Commission or its staff changes its interpretation or otherwise permits us to
exercise this right. Subject to such approval, we may delay effecting such a
transfer only if there is a delay of payment from an affected Portfolio. If this
happens, and if the prior approval of the Commission or its staff is obtained,
then we will calculate the dollar value or number of units involved in the
transfer from a Sub-Account on or as of the date we receive a written transfer
request, but will not process the transfer to the transferee Sub-Account until a
later date during the seven-day delay period when the Portfolio underlying the
transferring Sub-Account obtains liquidity to fund the transfer request through
sales of portfolio securities, new Purchase Payments, transfers by investors or
otherwise. During this period, the amount transferred would not be invested in a
Sub-Account.
Transamerica may delay payment of any withdrawal from the Fixed Account
for a period of not more than six months after Transamerica receives the request
for such withdrawal. If Transamerica delays payment for more than 30 days,
Transamerica will pay interest on the withdrawal amount up to the date of
payment. (See "Cash Withdrawals" page 30 of the Prospectus.)
Notices and Directions
Transamerica will not be bound by any authorization, direction,
election or notice which is not in writing, in a form and manner acceptable to
Transamerica, and received at our Service Center.
Any written notice requirement by Transamerica to the Owner will be
satisfied by our mailing of any such required written notice, by first-class
mail, to the Owner's last known address as shown on our records.
CALCULATION OF YIELDS AND TOTAL RETURNS
Money Market Sub-Account Yield Calculation
In accordance with regulations adopted by the Commission, Transamerica
is required to compute the Money Market Sub-Account's current annualized yield
for a seven-day period in a manner which does not take into consideration any
realized or unrealized gains or losses on shares of the Money Market Series or
on its portfolio securities. This current annualized yield is computed by
determining the net change (exclusive of realized gains and losses on the sale
of securities and unrealized appreciation and depreciation) in the value of a
hypothetical account having a balance of one unit of the Money Market
Sub-Account and income other than investment income at the beginning of such
seven-day period, dividing such net change in Account Value by the value of the
account at the beginning of the period to determine the base period return and
annualizing this quotient on a 365-day basis. The net change in Account Value
reflects the deductions for the annual Account Fee, the Mortality and Expense
Risk Charge and Administrative Expense Charges and income and expenses accrued
during the period. Because of these deductions, the yield for the Money Market
Sub-Account of the Variable Account will be lower than the yield for the Money
Market Portfolio or any comparable substitute funding vehicle.
The Commission also permits Transamerica to disclose the effective
yield of the Money Market Sub-Account for the same seven-day period, determined
on a compounded basis. The effective yield is calculated by compounding the
unannualized base period return by adding one to the base period return, raising
the sum to a power equal to 365 divided by 7, and subtracting one from the
result.
The yield on amounts held in the Money Market Sub-Account normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. The Money Market Sub-Account's actual yield is affected by changes in
interest rates on money market securities, average portfolio maturity of the
Money Market Portfolio or substitute funding vehicle, the types and quality of
portfolio securities held by the Money Market Series or substitute funding
vehicle, and operating expenses. In addition, the yield figures do not reflect
the effect of any Contingent Deferred Sales Load (of up to 6% of Purchase
Payments) that may be applicable to a Contract.
Other Sub-Account Yield Calculations
Transamerica may from time to time disclose the current annualized
yield of one or more of the Sub-Accounts (except the Money Market Sub-Account)
for 30-day periods. The annualized yield of a Sub-Account refers to the income
generated by the Sub-Account over a specified 30-day period. Because this yield
is annualized, the yield generated by a Sub-Account during the 30-day period is
assumed to be generated each 30-day period. The yield is computed by dividing
the net investment income per Variable Accumulation Unit earned during the
period by the price per unit on the last day of the period, according to the
following formula:
YIELD = 2[{a-b + 1}6 - 1]
cd
Where:
a = net investment income earned during the period by the
Portfolio attributable to the shares owned by the Sub-Account.
b = expenses for the Sub-Account accrued for the period (net of
reimbursements). c = the average daily number of Variable Accumulation
Units outstanding during the period. d = the maximum offering price per
Variable Accumulation Unit on the last day of the period.
Net investment income will be determined in accordance with rules
established by the Commission. Accrued expenses will include all recurring fees
that are charged to all Contracts. The yield calculations do not reflect the
effect of any Contingent Deferred Sales Load that may be applicable to a
particular Contract. Contingent Deferred Sales Load range from 6% to 0% of the
amount of Account Value withdrawn depending on the elapsed time since the
receipt of each Purchase Payment attributable to the portion of the Account
Value withdrawn.
Because of the charges and deductions imposed by the Variable Account,
the yield for the Sub-Account will be lower than the yield for the corresponding
Portfolio. The yield on amounts held in the Sub-Accounts normally will fluctuate
over time. Therefore, the disclosed yield for any given period is not an
indication or representation of future yields or rates of return. The
Sub-Account's actual yield will be affected by the types and quality of
portfolio securities held by the Portfolio, and its operating expenses.
Standard Total Return Calculations
Transamerica may from time to time also disclose average annual total
returns for one or more of the Sub-Accounts for various periods of time. Average
annual total return quotations are computed by finding the average annual
compounded rates of return over one, five and ten year periods that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:
P{1 + T}n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the one, five or ten-year period at
the end of the one, five, or ten-year period (or fractional
portion thereof).
All recurring fees are recognized in the ending redeemable value. The
standard average annual total return calculations will reflect the effect of any
Contingent Deferred Sales Load that may be applicable to a particular period.
<PAGE>
Hypothetical Performance Data
Transamerica may also disclose "hypothetical" performance data for a
Sub-Account, for periods before the Sub-Account commenced operations. Such
performance information for the Sub-Account will be calculated based on the
performance of the corresponding Portfolio and the assumption that the
Sub-Account was in existence for the same periods as those indicated for the
Portfolio, with a level of Contract charges currently in effect. The Portfolio
used for these calculations will be the actual Portfolio that the Sub-Account
will invest in.
This type of hypothetical performance data may be disclosed on both an
average annual total return and a cumulative total return basis. Moreover, it
may be disclosed assuming that the Contract is not surrendered (i.e., with no
deduction for the Contingent Deferred Sales Load) and assuming that the Contract
is surrendered at the end of the applicable period (i.e., reflecting a deduction
for any applicable Contingent Deferred Sales Load).
Other Performance Data
Transamerica may from time to time also disclose average annual total
returns in a non-standard format in conjunction with the standard described
above. The non-standard format will be identical to the standard format except
that the Contingent Deferred Sales Load percentage will be assumed to be 0%.
Transamerica may from time to time also disclose cumulative total
returns in conjunction with the standard format described above. The cumulative
returns will be calculated using the following formula assuming that the
Contingent Deferred Sales Load percentage will be 0%.
CTR = {ERV/P} - 1
Where:
CTR = the cumulative total return net of Sub-Account recurring charges
for the period. ERV = ending redeemable value of a hypothetical $1,000
payment at the beginning of the one, five, or
ten-year period at the end of the one, five, or ten-year
period (or fractional portion thereof). P = a hypothetical initial
payment of $1,000. All non-standard performance data will be advertised
only if the standard performance data is also disclosed.
HISTORIC PERFORMANCE DATA
General Limitations
The figures below represent the past performance of the Sub-Accounts
and are not indicative of future performance. The figures may reflect the waiver
of advisory fees and reimbursement of other expenses.
Except for Transamerica Growth, the Funds have provided the performance
data for the Sub-Accounts. Except for Transamerica Growth none of the Funds or
their investment advisers are affiliated with Transamerica. In preparing the
tables below, Transamerica has relied on the data provided by the Funds. While
Transamerica has no reason to doubt the accuracy of the figures provided by the
Funds, Transamerica has not verified those figures.
Money Market Sub-Account Yields
The annualized yield for the Money Market Sub-Account for the seven-day
period ending December 31, 1998 was ______%. The effective yield for the Money
Market Sub-Account for the seven-day period ending December 31, 1998 was
_______%.
<PAGE>
Sub-Account Performance Figures Including Hypothetical Performance
The charts below show historical performance data for the Sub-Accounts,
including, for seven Sub-Accounts, "hypothetical" data for the periods prior to
the inception of the Sub-Accounts, based on the performance of the corresponding
Portfolios since their inception date, with a level of charges equal to those
currently assessed under the Contracts. These figures are not an indication of
the future performance of the Sub-Accounts. Some of the figures reflect the
waiver of advisory fees and reimbursement of other expenses for part or all of
the periods indicated.
The dates to the left of the Sub-Account names below indicate the date
of commencement of operation of the Portfolios, which coincide with the date of
commencement of operation of the corresponding Sub-Account, with these seven
exceptions: the Money Market; Managed Assets, Zero Coupon 2000, Qualify Bond,
Small Cap and Stock Index Sub-Accounts which commenced operations January 4,
1993, and the Transamerica Growth Sub-Account which commenced operations May 1,
1998. Hence, the performance data given for these seven Sub-Accounts which
precedes these dates is "hypothetical."
Standard Average annual total returns for periods since inception of
the Portfolio, including hypothetical performance, for each Sub-Account are as
follows. These figures include mortality and expenses charges deducted at 1.25%,
the administrative expenses charge of 0.15% per annum, the administration charge
of $30 per annum adjusted for average account size and the maximum contingent
deferred sales load of 6%.
<TABLE>
<CAPTION>
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
For the period
from
commencement of
SUB-ACCOUNT (date of commencement of For the 1-year For the 3-year For the 5-year Portfolio
operation of Corresponding Portfolio) period ending period ending period ending operations to
12/31/98 12/31/98 12/31/98 12/31/98
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
<S> <C> <C> <C>
Money Market (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Special Value (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Zero Coupon 2000 (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Quality Bond (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Small Cap (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Capital Appreciation (4/5/93)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Stock Index (9/29/89)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Socially Responsible (10/7/93)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Growth & Income (12/15/94)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
International Equity (12/15/94)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
International Value (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Disciplined Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Small Company Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Balanced (5/1/97)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Limited Term High Income(5/1/97)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Transamerica Growth(2/26/69)*
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Core Value ( )
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
MidCap Stock ( )
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
<PAGE>
Non-Standard Average annual total returns for period since inception of
the Portfolio including hypothetical performance, for each Sub-Account are as
follows. These figures include mortality and expenses charges deducted at 1.25%,
the administrative expenses charge of 0.15% per annum, the administration charge
of $30 per annum adjusted for average account size but do not reflect the
maximum contingent deferred sales load of 6% which if reflected would reduce the
figures. Non-Standard performance data will only be disclosed if the standard
performance data for the required periods is also disclosed.
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
For the period
from
commencement of
SUB-ACCOUNT (date of commencement of For the 1-year For the 3-year For the 5-year Portfolio
operation of Corresponding Portfolio) period ending period ending period ending operations to
12/31/98 12/31/98 12/31/98 12/31/98
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Money Market (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Special Value (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Zero Coupon 2000 (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Quality Bond (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Small Cap (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Capital Appreciation (4/5/93)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Stock Index (9/29/89)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Socially Responsible (10/7/93)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Growth & Income (12/15/94)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
International Equity (12/15/94)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
International Value (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Disciplined Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Small Company Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Balanced (5/1/97)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Limited Term High Income(5/1/97)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Transamerica Growth(2/26/69)*
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Core Value ( )
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
MidCap Stock ( )
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Non-Standard Cumulative total returns for periods since inception of the
Portfolio, including hypothetical performance, for each Sub-Account are as
follows. These figures include mortality and expenses charges deducted at 1.25%,
the administrative expenses charge of 0.15% per annum, the administration charge
of $30 per annum adjusted for average account size but do not reflect the
maximum contingent deferred sales load of 6%, which if reflected would reduce
the figures. Nonstandard performance data will only be disclosed if standard
performance data for the required periods is also disclosed.
- ---------------------------------------- ------------------- ------------------
For the 1-year
SUB-ACCOUNT (date of commencement of period ending Since Inception
operation of Corresponding Portfolio) 12/31/98
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Money Market (8/31/90)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Special Value (8/31/90)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Zero Coupon 2000 (8/31/90)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Quality Bond (8/31/90)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Small Cap (8/31/90)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Capital Appreciation (4/5/93)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Stock Index (9/29/89)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Socially Responsible (10/7/93)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Growth & Income (12/15/94)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
International Equity (12/15/94)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
International Value (5/1/96)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Disciplined Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Small Company Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Balanced (5/1/97)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Limited Term High Income(5/1/97)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Transamerica Growth(2/26/69)*
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Core Value ( )
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
MidCap Stock ( )
- ---------------------------------------- ------------------- ------------------
</TABLE>
*The Growth Portfolio of the Transamerica Variable Insurance Fund,
Inc., is the successor to Separate Account Fund C of Transamerica Occidental
Life Insurance Company, a management investment company funding variable
annuities, through a reorganization on November 1, 1996. Accordingly, the
performance data for the Transamerica VIF Growth Portfolio include performance
of its predecessor. The performance shown in the "since inception" box for the
Transamerica Growth Sub-Account is 10-year performance, not performance since
1969.
FEDERAL TAX MATTERS The Dreyfus/Transamerica Triple Advantage Variable Annuity
may be purchased on a non-tax qualified basis ("Non-Qualified Contract") or
purchased and used in connection with plans qualifying for special tax treatment
("Qualified Contract"). Qualified Contracts are designed for use by retirement
plans qualified for special tax treatment under Sections 401, 403(b) or 408 of
the Internal Revenue Code of 1986, as amended (the "Code"). The ultimate effect
of federal income taxes on the Account Value, on Annuity Payments, and on the
economic benefit to the Owner, the Annuitant or the Beneficiary may depend on
the type of retirement plan for which the Contract is purchased, on the tax and
employment status of the individual concerned and on Transamerica's tax status.
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. Any
person concerned about these tax implications should consult a competent tax
adviser. This discussion is based upon Transamerica's understanding of the
present federal income tax laws as they are currently interpreted by the
Internal Revenue Service ("IRS"). No representation is made as to the likelihood
of continuation of these present federal income tax laws or of the current
interpretations by the Internal Revenue Service. Moreover, no attempt has been
made to consider any applicable state or other tax laws.
Taxation of Transamerica
Transamerica is taxed as a life insurance company under Part I of
Subchapter L of the Code. Since the Variable Account is not an entity separate
from Transamerica, and its operations form a part of Transamerica, it will not
be taxed separately as a "regulated investment company" under Subchapter M of
the Code. Investment income and realized capital gains are automatically applied
to increase reserves under the Contracts. Under existing federal income tax law,
Transamerica believes that the Variable Account investment income and realized
net capital gains will not be taxed to the extent that such income and gains are
applied to increase the reserves under the Contracts.
Accordingly, Transamerica does not anticipate that it will incur any
federal income tax liability attributable to the Variable Account and,
therefore, Transamerica does not intend to make provisions for any such taxes.
However, if changes in the federal tax laws or interpretations thereof result in
Transamerica being taxed on income or gains attributable to the Variable
Account, then Transamerica may impose a charge against the Variable Account
(with respect to some or all Contracts) in order to set aside provisions to pay
such taxes.
Tax Status of the Contract
Section 817(h) of the Code requires that with respect to
Non-Qualified Contracts, the investments of the Funds be "adequately
diversified" in accordance with Treasury regulations in order for the Contracts
to qualify as annuity contracts under federal tax law. The Variable Account,
through the Funds, intends to comply with the diversification requirements
prescribed by the Treasury in Reg. Sec. 1.817-5, which affect how the Funds'
assets may be invested.
In certain circumstances, Owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate accounts used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includible in the
variable contract owner's gross income. The IRS has stated in published rulings
that a variable contract Owner will be considered the Owner of separate account
assets if the contract Owner possesses incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. The Treasury
Department has also announced, in connection with the issuance of regulations
concerning diversification, that those regulations "do not provide guidance
concerning the circumstances in which investor control for the investments of a
segregated asset account may cause the investor (i.e., the Owner), rather than
the insurance company, to be treated as the Owner of the assets in the account."
This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct their
investments to particular Sub-Accounts without being treated as owners of the
underlying assets."
The ownership rights under the Contract are similar to, but different
in certain respects from, those described by the IRS in rulings in which it was
determined that Contract Owners were not owners of separate account assets. For
example, the Owner has additional flexibility in allocating premium payments and
Account Values. These differences could result in an Owner being treated as the
owner of a pro rata portion of the assets of the Variable Account. In addition,
Transamerica does not know what standards will be set forth, if any, in the
regulations or rulings which the Treasury Department has stated it expects to
issue. Transamerica therefore reserves the right to modify the Contract as
necessary to attempt to prevent an Owner from being considered the owner of a
pro rata share of the assets of the Variable Account.
In order to be treated as an annuity contract for federal income tax
purposes, section 72(s) of the Code requires any Non-Qualified Contract to
provide that (a) if any Owner dies on or after the Annuity Date but prior to the
time the entire interest in the Contract has been distributed, the remaining
portion of such interest will be distributed at least as rapidly as under the
method of distribution being used as of the date of that Owner's death; and (b)
if any Owner dies prior to the Annuity Date, the entire interest in the Contract
will be distributed within five years after the date of the Owner's death. These
requirements will be considered satisfied as to any portion of the Owner's
interest which is payable to or for the benefit of a "designated beneficiary"
and which is distributed over the life of such "designated beneficiary" or over
a period not extending beyond the life expectancy of that Beneficiary, provided
that such distributions begin within one year of the Owner's death. The Owner's
"designated beneficiary" refers to a natural person designated by such Owner as
a Beneficiary and to whom ownership of the Contract passes by reason of death.
However, if the Owner's "designated beneficiary" is the surviving spouse of the
deceased Owner, the Contract may be continued with the surviving spouse as the
new owner.
The Non-Qualified Contracts contain provisions which are intended to
comply with the requirements of section 72(s) of the Code, although no
regulations interpreting these requirements have yet been issued. Transamerica
intends to review such provisions and modify them if necessary to assure that
they comply with the requirements of Code section 72(s) when clarified by
regulation or otherwise. Other rules may apply to Qualified Contracts.
DISTRIBUTION OF THE CONTRACT Transamerica Securities Sales Corporation
("TSSC") is principal underwriter of the Contracts. TSSC may also serve as
principal underwriter and distributor of other contracts issued through the
Variable Account and certain other separate accounts of Transamerica and any
affiliates of Transamerica. TSSC is a wholly owned subsidiary of Transamerica
Insurance Corporation of California, which is a subsidiary of Transamerica
Corporation. TSSC is registered with the Commission as a broker/dealer and is a
member of the National Association of Securities Dealers, Inc. ("NASD").
Transamerica pays TSSC for acting as the principal underwriter under a
distribution agreement. TSSC has entered into sales agreements with other
broker/dealers to solicit applications for the Contracts through registered
representatives who are licensed to sell securities and variable insurance
products. These agreements provide that applications for the Contracts may be
solicited by registered representatives of the broker/dealers appointed by
Transamerica to sell its variable life insurance and variable annuities. These
broker/dealers are registered with the Commission and are members of the NASD.
The registered representatives are authorized under applicable state regulations
to sell variable life insurance and variable annuities. Transamerica Financial
Resources, Inc. ("TFR") is an underwriter and distributor of the Contracts. TFR
is a wholly-owned subsidiary of Transamerica Insurance Corporation of California
and is registered with the Commission and the NASD as a broker/dealer. Under the
agreements, applications for the Contracts will be sold by broker/dealers which
will receive compensation as described in the Prospectus. The offering of the
Contracts is expected to be continuous and neither TSSC nor TFR anticipate
discontinuing the offering of the Contracts. However, TSSC and TFR reserve the
right to discontinue the offering of the Contracts.
During fiscal year 1998, $________________ in commissions were paid to
TSSC as underwriter of the Contracts; no amounts were retained by TSSC. During
fiscal year 1997, $21,886,072.80 in commissions were paid to TSSC as underwriter
of the Contracts; no amounts were retained by TSSC. During fiscal year 1996,
$15,506,834.71 in commissions were paid to TSSC as underwriter of the Contracts;
no amounts were retained by TSSC. During fiscal year 1998, $_______________ in
commissions were paid to TFR as underwriter of the Contracts; no amounts were
retained by TFR. During fiscal year 1997, $2,394,358.42 in commissions were paid
to TFR as underwriter of the Contracts; no amounts were retained by TFR. During
fiscal year 1996, $2,283,845.07 in commissions were paid to TFR as underwriter
of the Contracts; no amounts were retained by TFR.
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS
Title to assets of the Variable Account is held by Transamerica. The
assets of the Variable Account are kept separate and apart from Transamerica
general account assets. Records are maintained of all purchases and redemptions
of Portfolio shares held by each of the Sub-Accounts.
TRANSAMERICA
General Information and History
Transamerica Occidental Life Insurance Company was formerly known as
Occidental Life Insurance Company of California. The name change occurred on or
about September 1, 1981.
Transamerica is wholly-owned by Transamerica Insurance Corporation of
California, which is in turn, wholly-owned by Transamerica Corporation.
Transamerica Corporation is a financial services organization which engages
through its subsidiaries in two primary businesses: finance and insurance.
Finance consists of consumer lending, commercial lending, leasing and real
estate services. Insurance comprises life insurance, asset management, and
insurance brokerage.
STATE REGULATION
Transamerica 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 Contract will be
modified accordingly.
RECORDS AND REPORTS
All records and accounts relating to the Variable Account will be
maintained by Transamerica or by its Service Office. As presently required by
the provisions of the 1940 Act and regulations promulgated thereunder which
pertain to the Variable Account, reports containing such information as may be
required under the 1940 Act or by other applicable law or regulation will be
sent to Owners semi-annually at their last known address of record.
FINANCIAL STATEMENTS
This Statement of Additional Information contains the financial
statements of the Variable Account as of December 31, 1998.
The consolidated financial statements of Transamerica included in this
Statement of Additional Information should be considered only as bearing on the
ability of Transamerica to meet its obligations under the Contract. They should
not be considered as bearing on the investment performance of the assets held in
the Variable Account.
<PAGE>
APPENDIX
Accumulation Transfer Formula
Transfers after the annuity date are implemented according to the
following formulas:
(1) Determine the number of units to be transferred from the variable
sub-account as follows:
= AT/AUV1
(2) Determine the number of variable accumulation units remaining in
such variable sub-account (after the transfer):
= UNIT1 AT/AUV1
(3) Determine the number of variable accumulation units in the
transferee variable sub-account (after the transfer):
= UNIT2 + AT/AUV2
(4) Subsequent variable accumulation payments will reflect the changes
in variable accumulation units in each variable sub-account as of the
next Variable Accumulation Payment's due date.
Where:
(AUV1) is the variable accumulation Unit value of the Variable
sub-account that the transfer is being made from as of the end of the
valuation Period in which the transfer request was received.
(AUV2) is the variable accumulation unit value of the variable
sub-account that the transfer is being made to as of the end of the
valuation period in which the transfer request was received.
(UNIT1) is the number of variable accumulation units in the Variable
sub-account that the transfer is being made from, before the transfer.
(UNIT2) is the number of variable accumulation units in the variable
sub-account that the transfer is being made to, before the transfer.
(AT) is the dollar amount being transferred from the variable
sub-account.
<PAGE>
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<PAGE>
<PAGE>
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements
All required financial statements are included in Parts A or B of this
Registration Statement.
(b) Exhibits
(1)Resolution of the Board of Directors of Transamerica
Occidental Life Insurance Company ("Transamerica") authorizing
establishment of the Variable Account.(1)
(2) Not Applicable.
(3) (a)Master Agreement among Transamerica Occidental
Life Insurance Company, First Transamerica Life
Insurance, Transamerica Financial Resources, Inc.,
Dreyfus Service Corporation, and Dreyfus Service
Organization, Inc. (4)
(b) Principal Agency Agreement between Transamerica
Occidental Life Insurance
Company and Dreyfus Service Organization, Inc. (4)
(c) Distribution Agreement between Transamerica Occidental
Life Insurance
Company and Dreyfus Service Corporation.(4)
(d) Form of Sales Agreement among Dreyfus Service
Corporation, Dreyfus Service Organization,
Inc., and Broker-Dealers. (4)
(e) Amendment Dated as of August 31, 1993, to Master
Agreement among Transamerica Occidental Life Insurance
Company, First Transamerica Life Insurance Company,
Transamerica Financial Resources, Inc., Dreyfus Service
Corporation and Dreyfus Service Organization, Inc. (6)
(f) Amendment Dated as of August 31, 1993 to Principal
Agency Agreement between Transamerica Occidental Life
Insurance Company and Dreyfus Service Organization, Inc.
(6)
(g) Amendment Dated as of August 31, 1993 to Distribution
Agreement between Transamerica Occidental Life Insurance
Company and Dreyfus Service Corporation. (6)
(h) Distribution Agreement between Transamerica Occidental
Life Insurance Company and
Transamerica Insurance Securities Sales Corporation,
dated as of August 24, 1994. (8)
(i) Sales Agreement among Transamerica Insurance Securities
Sales Corporation, Transamerica Occidental Life
Insurance Company, First Transamerica Life Insurance
Company, Dreyfus Service Corporation, and Dreyfus
Service Organization, Inc., dated as of August 24, 1994.
(8)
(j) Services Agreement among Transamerica Occidental Life
Insurance Company, First Transamerica Life Insurance
Company, Transamerica Insurance Securities Sales
Corporation, Dreyfus Service Corporation, and Dreyfus
Service Organization, Inc., dated as of August 24, 1994.
(8)
(k) Sales Agreement among Transamerica Insurance Securities
Sales Corporation, Transamerica
Occidental Life Insurance Company, First Transamerica
Life Insurance Company and
Broker/Dealers, dated August 24, 1994.(10)
(l) Form of Sales Agreement between Transamerica
Occidental Life Insurance Company,
Transamerica Life Insurance and Annuity Company, First
Transamerica Life Insurance
Company and Transamerica Securities Sales Corporation.(10)
(4) Group Contract Form, Certificate Form, Individual
Contract Form and Endorsements.
(a) Contract Form and Endorsements. (5)
(i) Form of Flexible Purchase Payment Multi-Funded
Deferred Master Group Annuity
Contract.
(ii) Form of Automatic Payout Option Endorsement to Group Contract.
(iii) Form of Dollar Cost Averaging Option Endorsement to Group Contract.
(iv) Form of Systematic Withdrawal Option Endorsement to Group Contract.
(v) Form of Guaranteed Minimum Death Benefit Endorsement to Group Contract.
(vi) Form of Fixed Account Rider to Group Contract. (7)
(b) Certificate of Participation Form and Endorsements. (5)
(i) Form of Certificate of Participation.
(ii) Form of IRA Endorsement to Certificate.
(iii)Form of Dollar Cost Averaging Option Endorsement to Certificate.
(iv) Form of Systematic Withdrawal Option Endorsement to Certificate.
(v) Form of Automatic Payout Option Endorsement to Certificate.
(vi) Form of Benefit Distribution Endorsement to Certificate.
(c) Individual Contract Form and Endorsements (6)
(i) Form of Flexible Purchase Payment Multi-Funded Deferred Individual
Annuity Contract.
(ii) Form of IRA Endorsement to Individual Contract.
(iii) Form of Benefit Distribution Endorsement.
(iv) Form of Dollar Cost Averaging Option Endorsement to Individual Contract.
(v) Form of Systematic Withdrawal Option Endorsement to Individual Contract.
(vi) Form of Automatic Payout Option Endorsement to Individual Contract.
(vii) Form of Guaranteed Minimum Death Benefit Endorsement to Individual
Contract.
(viii) Form of Fixed Account Rider to Individual Contract. (7)
(5) (a) Form of Application for and Acceptance of Group
Annuity Contract.(5) (b) Form of Application for Enrollment
under Group Annuity Contract.(5)
(c) Form of Application for Individual Annuity Contract. (6)
(6) (a) Restated Articles of Incorporation of Transamerica. (1)
(b) Restated By-Laws of Transamerica. (1)
(7) Not applicable.
(8) (a) Participation Agreement between Transamerica Occidental Life
Insurance Company and
Dreyfus Variable Investment Fund. (4)
(b) Participation Agreement between Transamerica Occidental Life Insurance
Company and
Dreyfus Life and Annuity Index Fund, Inc. (4)
(c) Participation Agreement between Transamerica Occidental Life Insurance
Company and The
Dreyfus Socially Responsible Growth Fund, Inc. (6)
(d) Administrative Services Agreement between Transamerica Occidental Life
Insurance Company
and Vantage Computer Systems, Inc. (4)
(e) Amendment Dated as of August 31, 1993 to Participation
Agreement between Transamerica Occidental Life Insurance
Company and Dreyfus Variable Investment Fund. (6)
(f) Amendment Dated as of August 31, 1993 to Participation
Agreement between Transamerica Occidental Life Insurance
Company and Dreyfus Life and Annuity Index Fund, Inc.
(6)
(g) Amendment Dated as of August 24, 1994 to Participation
Agreement Dated as of March 3, 1993, As Amended, between
Transamerica Occidental Life Insurance Company and
Dreyfus Variable Investment Fund. (8)
(h) Amendment Dated as of August 24, 1994 to Participation
Agreement Dated as of August 31, 1993 between
Transamerica Occidental Life Insurance Company and
Dreyfus Socially Responsible Growth Fund, Inc. (8)
(i) Amendment Dated as of August 24, 1994 to Participation
Agreement Dated as of March 3, 1993, As Amended, between
Transamerica Occidental Life Insurance Company and
Dreyfus Stock Index Fund. (8)
(9) (a) Opinion and Consent of Counsel. (9)
(10) (a) Consent of Counsel. (10) (11)
(b) Consent of Independent Auditors. (10) (11)
(11) No financial statements are omitted from item 23.
(12) Not applicable.
(13) Performance Data Calculations. (6)
(14) Not applicable.
(15) Powers of Attorney.
Frank Beardsley (12) Richard N. Latzer (2)(11)
Thomas J. Cusack (6)(11) Karen MacDonald (9)(11)
James W. Dederer (2)(11) Gary U. Rolle' (2)(11)
Paul E. Rutledge III(11) T. Desmond Sugrue(10)(11)
George A. Foegele (11)
David E. Gooding (2)(11) Nooruddin S. Veerjee (4)(11)
Edgar H. Grubb (2)(11) Robert A. Watson(9)(11)
Frank C. Herringer (2)(11)
(1) Filed with initial filing of this Form N-4 Registration Statement,
File No. 33-49998 (July 24, 1992).
(2) Incorporated by reference to Exhibit 7(c) of Post-Effective Amendment
No.1 to the Registration Statement of Transamerica Occidental Life
Insurance Company's Separate Account VL on Form S-6, File No. 33-28107
(April 30, 1990).
(3) Incorporated by reference to Exhibit 7(d) of Post-Effective Amendment No. 2
to the Registration Statement of Transamerica Occidental Life Insurance
Company's Separate Account VL on Form S-6, File No. 33-28107 (April 30, 1991).
(4) Filed with Post-Effective Amendment No. 1 to this Form N-4 Registration
Statement, File No. 33-49998 (April 30, 1993).
(5) Filed with Post-Effective Amendment No. 3 to this Form N-4 Registration
Statement, File No. 33-49998 (March 8, 1994).
(6) Filed with Post-Effective Amendment No. 4 to this Form N-4 Registration
Statement, File No. 33-49998 (April 29, 1994).
(7) Filed with Post-Effective Amendment No. 5 to this Form N-4 Registration
Statement, File No. 33-49998 (March 1, 1995).
(8) Filed with Post-Effective Amendment No. 6 to this Form N-4 Registration
Statement File No. 33-499988 (April 28, 1995).
(9) Filed with Post-Effective Amendment No. 7 to this Form N-4 Registration
Statement File No. 33-49998 (April 26, 1996).
(10) Filed with Post-Effective Amendment No. 8 to this Form N-4 Registration
Statement File No. 33-49998 (April 28, 1997)
(11) Filed with Post-Effective Amendment No. 9 to this Form N-4 Registation
Statement file No. 333-49998 (April 28, 1998).
(12) Filed herewith.
Item 25. List of Directors of Transamerica Occidental Life Insurance Company
Frank Beardsley Frank C. Herringer
Thomas J. Cusack Richard N. Latzer
James W. Dederer Karen MacDonald
Gary U. Rolle' George A. Foegele
Paul E. Rutledge III
David E. Gooding
Edgar H. GrubbT. Desmond Sugrue
Nooruddin S. Veerjee Robert A. Watson
List of Officers for Transamerica Occidental Life Insurance Company
<TABLE>
<CAPTION>
<S> <C>
Thomas J. Cusack Chairman, President and Chief Executive Officer
Nooruddin S. Veerjee President - Insurance Products Division
Frank Beardsley President - Transamerica Asset Management
George A. Foegele Senior Vice President
Paul E. Rutledge III President - Reinsurance Division
James W. Dederer, CLU Executive Vice President, General Counsel and Corporate Secretary
David E. Gooding Executive Vice President and Chief Information Officer
Meheriar Hasan Vice President
Daniel E. Jund, FLMI Senior Vice President
Karen MacDonald Senior Vice President and Corporate Actuary
William N. Scott, CLU, FLMI Senior Vice President
T. Desmond Sugrue Executive Vice President
Ron F. Wagley Senior Vice President and Chief Agency Officer
Darrel K.S. Yuen President-Asian Operations
Richard N. Latzer Chief Investment Officer
Gary U. Rolle', CFA Chief Investment Officer
Stephen J. Ahearn Investment Officer
Jim Bowman Vice President
John M. Casparian Investment Officer
Catherine Collinson Vice President
Heather E. Creeden Investment Officer
Colin Funai Investment Officer
William L. Griffin Investment Officer
Heidi Y. Hu Investment Officer
Matthew W. Kuhns Investment Officer
Michael F. Luongo Investment Officer
Dennis J. McNamara Investment Officer
Matthew Palmer Investment Officer
Thomas C. Pokorski Investment Officer
Susan A. Silbert Investment Officer
Philip W. Treick Investment Officer
Jeffrey S. Van Harte Investment Officer
Paul Wintermute Investment Officer
William D. Adams Vice President
Sandra Bailey-Whichard Vice President
Nicki Bair Senior Vice President
Michael Barnhart Regional Vice President
Dennis Barry Vice President
Laurie Bayless Vice President
Nancy Blozis Vice President and Controller
Thomas Briggle Vice President
Thomas Brimacombe Vice President
Sandy Brown Vice President
John Byrnes Vice President
Kent Callahan Vice President
Roy Chong-Kit Senior Vice President and Actuary
Matt Coben Vice President
Ken Cochrane Vice Presidetn
Alan T. Cunningham Vice President and Deputy General Counsel
Glenn Cunningham Vice President
Robert DeMarco Vice President
Peter DeWolf Vice President
Mitch Dimler Vice President
Randy Dobo Vice President and Actuary
Thomas P. Dolan, FLMI Vice President
John V. Dohmen Vice President
Harry Dunn, FSA Vice President and Chief Reinsurance Actuary
Gail DuBois Vice President and Actuary
Ken Ellis Vice President
George Garcia Vice President and Chief Medicare Officer
David M. Goldstein Vice President and Deputy General Counsel
Paul Hankwitz, MD Vice President and Chief Medical Director
Randall C. Hoiby Vice President and Associate General Counsel
John W. Holowasko Vice President
William M. Hurst Vice President and Associate General Counsel
James M. Jackson Vice President and Deputy General Counsel
Allan H. Johnson, FSA Vice President and Actuary
Michael Kappos Vice President
Patrick Kelleher Vice President and Reinsurance Financial Officer
Ken Kilbane Vice President
Frank J. LaRusso Vice President and Chief Underwriting Officer
Susan Mack Vice President and Associate General Counsel
Philip E. McHale, FLMI Vice President
Mark Madden Vice President
Maureen McCarthy Vice President
Vic Modugno Vice President and Associate Actuary
Jess Nadelman Vice President
Wayne Nakano, CPA Vice President
Paul Norris Vice President and Actuary
Susan O'Brien Vice President
Thomas P. O'Neill Vice President
Michael Palace, ASA Vice President and Actuary
Jerry Paul Vice President
Stephen W. Pinkham Vice President
Kristy M. Pipes Senior Vice President
Larry H. Roy Senior Vice President
Michael Sanders Vice President
Gary L. Seagraves Vice President
Joel D. Seigle Vice President
Karen Stout Vice President
James O. Strand Vice President
Alice Su Vice President
Lee Tang Vice President
Bill Tate Vice President
Claude W. Thau, FSA Senior Vice President
Barry Tobin Vice President
Kim A. Tursky Vice President and Assistant Secretary
John Vieren Vice President
Timothy Weis Vice President
William R. Wellnitz, FSA Senior Vice President and Actuary
Virginia M. Wilson Senior Vice President and Controller
Ronald R. Wolfe Regional Vice President
Sally Yamada Vice President and Treasurer
Olisa Abaelu Second Vice President
Benjamin Bock Vice President
Daniel J. Bohmfalk Second Vice President and Associate Actuary
Ken Bromberg Second Vice President
Art Bueno Second Vice President
Barry Buner Second Vice President
Wonjoon Cho Second Vice President
Art Cohen Second Vice President
Dave Costanza Second Vice President
Reid A. Evers Vice President and Associate General Counsel
David Fairhall Second Vice President and Associate Actuary
Selma Fox Second Vice President
Toni A. Forge Second Vice President
Jerry Gable, FSA Second Vice President
Linda Goodwin M.D. Second Vice President and Reinsurance Medical Director
Roger Hagopian Second Vice President
Zahid Hussain Vice President and Associate Actuary
Ahmad Kamil, FIA, MAAA Vice President and Associate Actuary
Andrew G. Kanelos Second Vice President
Ronald G. Keller Second Vice President
Joan Klubnik Second Vice President
Roger Korte Second Vice President
Lynette Lawson Second Vice President
Dean LeCesne Second Vice President
Liwen Lien Second Vice President
Marilyn McCullough Vice President
Richard MacKenzie Second Vice President
Danny Mahoney Second Vice President
Carl Marcero Vice President and Chief Reinsurance Underwriter
Jodie Moore Second Vice President
Clay Moye Second Vice President
Daniel A. Norwick Second Vice President
John Oliver Second Vice President
Susan O'Brien Second Vice President
Stephanie Quincey Second Vice President
Paul Reisz Second Vice President
Ray Robinson Second Vice President
Beverly Rochecharlie Second Vice President
John J. Romer Vice President
Laura Scully Second Vice President
Frederick Seto Second Vice President
Jack Shalley, MD Second Vice President and Medical Director
Steven R. Shepard Second Vice President and Assistant General Counsel
Frank Snyder Second Vice President
Mary Spence Second Vice President
Jean Stefaniak Second Vice President
Christina Stiver Vice President
David Stone Second Vice President
Suzette Stover-Hoyt Second Vice President
John Tillotson Second Vice President
K. Y. To Second Vice President
Boning Tong Second Vice President and Associate Actuary
Janet Unruh Second Vice President and Assistant General Counsel
Colleen Vandermark Vice President
Marsha Wallace Second Vice President
James B. Watson Second Vice President and Assistant General Counsel
Sheila Wickens, MD Second Vice President and Medical Director
Michael B. Wolfe Vice President
James Wolfenden Statement Officer
Kamran Haghighi Tax Officer
Susan Vivino Assistant Secretary
</TABLE>
Item 26. Person Controlled by or Under Common Control With the Depositor or
Registrant. The Depositor, Transamerica Occidental Life Insurance Company
(Transamerica), is wholly owned by Transamerica Insurance Corporation of
California. The Registrant is a segregated asset account of Transamerica.
The following chart indicates the persons controlled by or under common
control with Transamerica.
<PAGE>
- -
ARC Reinsurance Corporation
Transamerica Management, Inc. -- DE
BWAC Seventeen, Inc.
Transamerica Commercial Finance Canada, Limited -- ON Transamerica Commercial
Finance Corporation, Canada -- Can.
BWAC Twelve, Inc.
TIFCO Lending Corporation -- IL
Transamerica Insurance Finance Corporation -- MD
BWAC Twenty-One, Inc.
Transamerica Commercial Holdings Limited -- U.K.
First Florida Appraisal Services, Inc.
First Georgia Appraisal Services, Inc. -- GA
Greybox L.L.C.
Transamerica Trailer Leasing S.N.C. -- Fra.
Intermodal Equipment, Inc.
Transamerica Leasing N.V. -- Belg.
Transamerica Leasing SRL -- Itl.
Inventory Funding Trust
Inventory Funding Company, LLC -- DE
Metropolitan Mortgage Company
Easy Yes Mortgage, Inc. -- FL
Easy Yes Mortgage, Inc. -- GA
First Florida Appraisal Services, Inc. -- FL
Freedom Tax Services, Inc. -- FL
J.J. & W. Advertising, Inc. -- FL
J.J. & W. Realty Services, Inc. -- FL
Liberty Mortgage Company of Ft. Myers, Inc. -- FL
Metropolis Mortgage Company -- FL
Perfect Mortgage Company -- FL
Pyramid Insurance Company, Ltd.
Pacific Cable Ltd. -- Bmda.
TA Leasing Holding Co., Inc.
Trans Ocean Ltd. -- DE
Transamerica Leasing Inc. -- DE
Trans Ocean Container Corp.
SpaceWise Inc. -- DE
Trans Ocean Container Finance Corp. -- DE
Trans Ocean Leasing Deutschland GmbH -- Ger.
Trans Ocean Leasing PTY Limited -- Aust.
Trans Ocean Management S.A. -- SWTZ
Trans Ocean Regional Corporate Holdings -- CA
Trans Ocean Tank Services Corporation -- DE
Trans Ocean Ltd.
Trans Ocean Container Corp. -- DE
Transamerica Accounts Holding Corporation
ARS Funding Corporation -- DE
Transamerica Acquisition Corporation
Camtrex Group, Inc. --
Transamerica Business Credit Corporation
Bay Capital Corporation -- DE
Coast Funding Corporation -- DE
Direct Capital Equity Investment, Inc. -- DE
Gulf Capital Corporation -- DE
TA Air East, Corp. --
TA Air III, Corp. -- DE
TA Air IV, Corp. -- DE
TA Air IX, Corp. -- DE
TA Air I, Corp. -- DE
TA Air VIII, Corp. --
TA Air VII, Corp. --
TA Air VI, Corp. --
TA Air V, Corp. --
TA Air X Corp. -- DE
TA Marine I Corp. -- DE
TA Marine II Corp. -- DE
TBC III, Inc. -- DE
TBC II, Inc. -- DE
TBC IV, Inc. -- DE
TBC I, Inc. -- DE
TBC Tax III, Inc. -- DE
TBC Tax II, Inc. -- DE
TBC Tax IV, Inc. -- DE
TBC TAX IX, Inc. -- DE
TBC Tax I, Inc. -- DE
TBC Tax VIII, Inc. -- DE
TBC Tax VII, Inc. -- DE
TBC Tax VI, Inc. -- DE
TBC Tax V, Inc. -- DE
TBC V, Inc. -- DE
TBCC Funding Trust I --
TBCC Funding Trust II --
The Plain Company -- DE
Transamerica Mezzanine Financing, Inc. --
Transamerica Small Business Services, Inc. --
Transamerica Business Credit Corporation - DE
TA Air II, Corp. -- DE
Transamerica Commercial Finance Canada, Limited
Transamerica Acquisition Corporation -- Can.
Transamerica Commercial Finance Corporation
Inventory Funding Trust -- DE
TCF Asset Management Corporation -- CO
Transamerica Distribution Finance Corporation de Mexico --
Transamerica Joint Ventures, Inc. -- DE
Transamerica Commercial Finance Corporation, I
BWAC Credit Corporation -- DE
BWAC International Corporation -- DE
BWAC Twelve, Inc. -- DE
Transamerica Business Credit Corporation -- DE
Transamerica Distribution Finance Corporation -- DE
Transamerica Equipment Financial Services Corporation --
Transamerica Commercial Finance Limited
WFC Polska Sp. Zo.o --
Transamerica Commercial Holdings Limited
Transamerica Commercial Finance Limited -- U.K.
Transamerica Trailer Leasing Limited -- NY
Transamerica Trailer Leasing Limited -- U.K.
Transamerica Consumer Finance Holding Company
Metropolitan Mortgage Company -- FL
Pacific Agency, Inc. -- IN
Transamerica Consumer Mortgage Receivables Corporation -- DE
Transamerica Mortgage Company -- DE
Transamerica Corporation
ARC Reinsurance Corporation -- HI
Inter-America Corporation -- CA
Pyramid Insurance Company, Ltd. -- HI
RTI Holdings, Inc. -- DE
Transamerica Airlines, Inc. -- DE
Transamerica Business Technologies Corporation -- DE
Transamerica CBO I, Inc. -- DE
Transamerica Corporation (Oregon) -- OR
Transamerica Delaware, L.P. -- DE
Transamerica Finance Corporation -- DE
Transamerica Financial Products, Inc. -- CA
Transamerica Foundation -- CA
Transamerica Insurance Corporation of California -- CA
Transamerica Intellitech, Inc. -- DE
Transamerica International Holdings, Inc. -- DE
Transamerica Investment Services, Inc. -- DE
Transamerica LP Holdings Corp. -- DE
Transamerica Pacific Insurance Company, Ltd. -- HI
Transamerica Real Estate Tax Service (A Division of Transamerica Corporation)
-- N/A
Transamerica Realty Services, Inc. -- DE
Transamerica Senior Properties, Inc. -- DE
TREIC Enterprises, Inc. -- DE
Transamerica Distribution Finance Corporation Transamerica Accounts Holding
Corporation -- DE Transamerica Commercial Finance Corporation -- DE
Transamerica Inventory Finance Corporation -- DE Transamerica Retail Financial
Services Corporation -- DE Transamerica Vendor Financial Services Corporation
-- DE
Transamerica Distribution Finance Corporation de Mexico
TDF de Mexico --
Transamerica Distribution Finance Corporation de Mexico and TDF de Mexico
Transamerica Corporate Services de Mexico --
Transamerica Finance Corporation
TA Leasing Holding Co., Inc. -- DE
Transamerica Commercial Finance Corporation, I -- DE
Transamerica Home Loan -- CA
Transamerica HomeFirst, Inc. -- CA
Transamerica Lending Company -- DE
Transamerica Financial Resources, Inc.
Financial Resources Insurance Agency of Texas -- TX
TBK Insurance Agency of Ohio, Inc. -- OH
Transamerica Financial Resources Insurance Agency of Alabama Inc. -- AL
Transamerica Financial Resources Insurance Agency of Massachusetts Inc. -- MA
Transamerica GmbH Inc.
Transamerica Financieringsmaatschappij B.V. -- Neth.
Transamerica GmbH - Germany -- Ger.
Transamerica Insurance Corporation of California
Arbor Life Insurance Company -- AZ
Bulkrich Trading --
Gemini Investments, Inc. --
Plaza Insurance Sales, Inc. -- CA
Transamerica Advisors, Inc. -- CA
Transamerica Annuity Service Corporation -- NM
Transamerica Financial Resources, Inc. -- DE
Transamerica International Insurance Services, Inc. -- DE
Transamerica Occidental Life Insurance Company -- CA
Transamerica Products, Inc. -- CA
Transamerica Securities Sales Corporation -- MD
Transamerica Service Company -- DE
Transamerica Insurance Finance Corporation
Transamerica Insurance Finance Company (Europe) -- MD
Transamerica Insurance Finance Corporation
Transamerica Insurance Finance Corporation, California -- CA
Transamerica Insurance Finance Corporation - MD
Transamerica Insurance Finance Corporation, Canada -- ON
Transamerica Intellitech, Inc.
Information Service Corp. --
Transamerica International Insurance Services, Inc.
Home Loans and Finance Ltd. -- U.K.
Transamerica Inventory Finance Corporation
BWAC Seventeen, Inc. -- DE
BWAC Twenty-One, Inc. -- DE
Transamerica Commercial Finance France S.A. -- Fra.
Transamerica GmbH Inc. -- DE
Transamerica Investment Services, Inc.
Transamerica Income Shares, Inc. (managed by TA Investment Services) -- MD
Transamerica Leasing Holdings Inc.
Greybox Logistics Services Inc. -- DE
Greybox L.L.C. -- DE
Greybox Services Limited -- U.K.
Intermodal Equipment, Inc. -- DE
Transamerica Distribution Services Inc. -- DE
Transamerica Leasing Coordination Center -- Belg.
Transamerica Leasing do Brasil Ltda. -- Braz.
Transamerica Leasing GmbH -- Ger.
Transamerica Leasing Limited -- U.K.
Transamerica Leasing Pty. Ltd. -- Aust.
Transamerica Leasing (Canada) Inc. -- Can.
Transamerica Leasing (HK) Ltd. -- H.K.
Transamerica Leasing (Proprietary) Limited -- S.Afr.
Transamerica Tank Container Leasing Pty. Limited -- Aust.
Transamerica Trailer Holdings I Inc. -- DE
Transamerica Trailer Holdings II Inc. -- DE
Transamerica Trailer Holdings III Inc. -- DE
Transamerica Trailer Leasing AB -- Swed.
Transamerica Trailer Leasing AG -- SWTZ
Transamerica Trailer Leasing A/S -- Denmk.
Transamerica Trailer Leasing GmbH -- Ger.
Transamerica Trailer Leasing (Belgium) N.V. -- Belg.
Transamerica Trailer Leasing (Netherlands) B.V. -- Neth.
Transamerica Trailer Spain S.A. -- Spn.
Transamerica Transport Inc. -- NJ
Transamerica Leasing Inc.
Better Asset Management Company LLC -- DE
Transamerica Leasing Holdings Inc. -- DE
Transamerica Leasing Limited
ICS Terminals (UK) Limited -- U.K.
Transamerica Life Insurance and Annuity Company
Transamerica Assurance Company -- MO
Transamerica Management, Inc.
Criterion Investment Management Company -- TX
Transamerica Occidental Life Insurance Company
NEF Investment Company -- CA
Transamerica China Investments Holdings Limited -- H.K.
Transamerica International RE (Bermuda) Ltd. -- Bmda.
Transamerica Life Insurance and Annuity Company -- NC
Transamerica Life Insurance Company of Canada -- Can.
Transamerica Life Insurance Company of New York -- NY
Transamerica South Park Resources, Inc. -- DE
Transamerica Variable Insurance Fund, Inc. -- MD
USA Administration Services, Inc. -- KS
Transamerica Products, Inc.
Transamerica Products II, Inc. -- CA
Transamerica Products IV, Inc. -- CA
Transamerica Products I, Inc. -- CA
Transamerica Real Estate Tax Service
Transamerica Flood Hazard Certification (A Division of TA Real Estate Tax
Service) -- N/A Transamerica Realty Services, Inc.
Bankers Mortgage Company of California -- CA
Pyramid Investment Corporation -- DE
The Gilwell Company -- CA
Transamerica Affordable Housing, Inc. -- CA
Transamerica Minerals Company -- CA
Transamerica Oakmont Corporation -- CA
Ventana Inn, Inc. -- CA
Transamerica Retail Financial Services Corporation
Transamerica Consumer Finance Holding Company -- DE
Whirlpool Financial National Bank -- DE
Transamerica Senior Properties, Inc.
Transamerica Senior Living, Inc. -- DE
Transamerica Small Business Services, Inc.
Emergent Business Capital Holdings, Inc. --
*Designates INACTIVE COMPANIES
A Division of Transamerica Corporation
ss.Limited Partner; Transamerica Corporation is General Partner
Item 27. Number of Certificate Owners
As of April 1, 1999 there were Owners of Non-Qualified Individual
Contracts and Owners of Qualified Individual Contracts.
Item 28. Indemnification
Transamerica's Bylaws provide in Article V as follows:
Section 1. Right to Indemnification.
Each person who was or is a party or is threatened to be made a party to or is
involved, even as a witness, in any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(hereafter a "Proceeding"), by reason of the fact that he, or a person of whom
he is the legal representative, is or was a director, officer, employee, or
agent of the corporation or is or was serving at the request of the corporation
as a director, officer, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, or other enterprise, or was a
director, officer, employee, or agent of a foreign or domestic corporation that
was predecessor corporation of the corporation or of another enterprise at the
request of such predecessor corporation, including service with respect to
employee benefit plans, whether the basis of the Proceeding is alleged action in
an official capacity as a director, officer, employee, or agent or in any other
capacity while serving as a director, officer, employee, or agent (hereafter an
"Agent"), shall be indemnified and held harmless by the corporation to the
fullest extent authorized by statutory and decisional law, as the same exists or
may hereafter be interpreted or amended (but, in the case of any such amendment
or interpretation, only to the extent that such amendment or interpretation
permits the corporation to provide broader indemnification rights than were
permitted prior thereto) against all expense, liability, and loss (including
attorneys' fees, judgements, fines, ERISA excise taxes and penalties, amounts
paid or to be paid in settlement, any interest, assessments, or other charges
imposed thereon, and any federal, state, local or foreign taxes imposed on any
Agent as a result of the actual or deemed receipt of any payments under this
Article) incurred or suffered by such person in connection with investigating,
defending, being a witness in, or participating in (including on appeal), or
preparing for any of the foregoing, in any Proceeding (hereafter "Expenses");
provided however, that except as to actions to enforce indemnification rights
pursuant to Section 3 of this Article, the corporation shall indemnify any Agent
seeking indemnification in connection with a Proceeding (or part thereof)
initiated by such person only if the Proceeding (or part thereof) was authorized
by the Board of Directors of the corporation. The right to indemnification
conferred in this Article shall be a contract right. [It is the Corporation's
intent that the bylaws provide indemnification in excess of that expressly
permitted by Section 317 of the California General Corporation Law, as
authorized by the Corporation's Articles of Incorporation.]
Section 2. Authority to Advance Expenses.
Expenses incurred by an officer or director (acting in his capacity as such) in
defending a Proceeding shall be paid by the corporation in advance of the final
disposition of such Proceeding, provided, however, that if required by the
California General Corporation Law, as amended, such Expenses shall be advanced
only upon delivery to the corporation of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the corporation as authorized in
this Article or otherwise. Expenses incurred by other Agents of the corporation
(or by the directors or officers not acting in their capacity as such, including
service with respect to employee benefit plans) may be advanced upon the receipt
of a similar undertaking, if required by law, and upon such other terms and
conditions as the Board of Directors deems appropriate. Any obligation to
reimburse the corporation for Expense advances shall be unsecured and no
interest shall be charged thereon.
Section 3. Right of Claimant to Bring Suit.
If a claim under Section 1 or 2 of this Article is not paid in full by the
corporation within 30 days after a written claim has been received by the
corporation, the claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense
(including attorneys' fees) of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending a Proceeding in advance of its final disposition where the
required undertaking has been tendered to the corporation) that the claimant has
not met the standards of conduct that make it permissible under the California
General Corporation Law for the corporation to indemnify the claimant for the
amount claimed. The burden of proving such a defense shall be on the
corporation. Neither the failure of the corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper under the circumstances because he has met the applicable
standard of conduct set forth in the California General Corporation Law, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant had not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that claimant has not met the applicable standard of conduct.
Section 4. Provisions Nonexclusive.
The rights conferred on any person by this Article shall not be exclusive of any
other rights that such person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office. To the extent that any provision of the Articles, agreement, or vote of
the stockholders or disinterested directors is inconsistent with these bylaws,
the provision, agreement, or vote shall take precedence.
Section 5. Authority to Insure.
The corporation may purchase and maintain insurance to protect itself and any
Agent against any Expense asserted against or incurred by such person, whether
or not the corporation would have the power to indemnify the Agent against such
Expense under applicable law or the provisions of this Article [provided that,
in cases where the corporation owns all or a portion of the shares of the
company issuing the insurance policy, the company and/or the policy must meet
one of the two sets of conditions set forth in Section 317 of the California
General Corporation Law, as amended].
Section 6. Survival of Rights.
The rights provided by this Article shall continue as to a person who has ceased
to be an Agent and shall inure to the benefit of the heirs, executors, and
administrators of such person.
Section 7. Settlement of Claims.
The corporation shall not be liable to indemnify any Agent under this Article
(a) for any amounts paid in settlement of any action or claim effected without
the corporation's written consent, which consent shall not be unreasonably
withheld; or (b) for any judicial award, if the corporation was not given a
reasonable and timely opportunity, at its expense, to participate in the defense
of such action.
Section 8. Effect of Amendment
Any amendment, repeal, or modification of this Article shall not adversely
affect any right or protection of any Agent existing at the time of such
amendment, repeal, or modification.
Section 9. Subrogation.
In the event of payment under this Article, the corporation shall be subrogated
to the extent of such payment to all of the rights of recovery of the Agent, who
shall execute all papers required and shall do everything that may be necessary
to secure such rights, including the execution of such documents necessary to
enable the corporation effectively to bring suit to enforce such rights.
Section 10. No Duplication of Payments.
The corporation shall not be liable under this Article to make any payment in
connection with any claim made against the Agent to the extent the Agent has
otherwise actually received payment (under any insurance policy, agreement,
vote, or otherwise) of the amounts otherwise indemnifiable hereunder.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling person of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by the director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
The directors and officers of Transamerica Occidental Life Insurance
Company are covered under a Directors and Officers liability program which
includes direct coverage to directors and officers (Coverage A) and corporate
reimbursement (Coverage B) to reimburse the Company for indemnification of its
directors and officers. Such directors and officers are indemnified for loss
arising from any covered claim by reason of any Wrongful Act in their capacities
as directors or officers. In general, the term "loss" means any amount which the
insureds are legally obligated to pay for a claim for Wrongful Acts. In general,
the term "Wrongful Acts" means any breach of duty, neglect, error, misstatement,
misleading statement or omission caused, committed or attempted by a director or
officer while acting individually or collectively in their capacity as such,
claimed against them solely by reason of their being directors and officers. The
limit of liability under the program is $95,000,000 for Coverage A and
$80,000,000 for Coverage B for the period 11/15/98 to 11/15/2000. Coverage B is
subject to a self insured retention of $15,000,000. The primary policy under the
program is with CNA Lloyds, Gulf, Chubb and Travelers.
Item 29. Principal Underwriter
Transamerica Securities Sales Corporation (TSSC) and Transamerica
Financial Resources (TFR) are the co-underwriters of the Certificates and the
Individual Contracts as defined in the Investment Company Act of 1940. TSSC
became Principal Underwriter effective 8-24-94.
NAME AND PRINCIPAL POSITION AND OFFICES WITH
BUSINESS ADDRESS* TRANSAMERICA SECURITIES SALES CORPORATION
Barbara A. Kelley President and Director
Regina M. Fink Secretary and Director
Benjamin Tang Treasurer
Nooruddin Veerjee Director
Dan S. Trivers Senior Vice President
Nicki A. Bair Vice President
Chris Shaw Second Vice President
*The Principal business address for each officer and director is 1150 South
Olive, Los Angeles, CA 90015.
NAME AND PRINCIPAL POSITION AND OFFICES WITH
BUSINESS ADDRESS* TRANSAMERICA FINANCIAL RESOURCES
Nooruddin S. Veerjee Chairman of the Board and Director
Barbara A. Kelley President and Director
Regina M. Fink Secretary and Counsel
Monica Suryapranata Treasurer
Gilbert F. Cronin Director
James W. Dederer Director
Dan Trivers Vice President, Director of
Administration and
Chief Compliance Officer
Ronald F. Wagley Director
Kerry Rider Vice President and Director of
Compliance and Assistant
Secretary
Susan Vivino Assistant Secretary
*The Principal business address for each officer and director is 1150 South
Olive, Los Angeles, CA 90015.
The following table lists the amounts of commissions paid to the
co-underwriters during the last fiscal year.
<TABLE>
<CAPTION>
Name of
Principal Net Underwriting Compensation on Brokerage
UnderwriterDiscounts & Commission Redemption Commissions Compensation
<S> <C> <C> <C> <C>
TSSC -0- -0- 21,886,072.80 -0-
TFR -0- -0- 2,394,358.42 -0-
</TABLE>
Item 30. Location and Accounts and Records
All accounts and records required to be maintained by Section 31(a) of
the 1940 Act and the rules under it are maintained by Transamerica or the
Service Office at their administrative offices.
Item 31. Management Services
All management contracts are discussed in Parts A or B.
Items 32. Undertakings
(a) Registrant undertakes that it will file a post-effective amendment to
this registration statement as frequently as necessary to ensure that
the audited financial statements in the registration statement are
never more than 16 months old for so long as payments under the
variable annuity contracts may be accepted.
(b) Registrant undertakes that it will include either (1) as part of any
application to purchase a Certificate or an Individual Contract offered
by the Prospectus, a space that an applicant can check to request a
Statement of Additional Information, or (2) a post card 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) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available
under this Form promptly upon written or oral request to Transamerica
at the address or phone number listed in the Prospectus.
(d) Registrant represents that it is relying on a no-action letter dated
November 28, 1988, to the American Council of Life Insurance (Ref. No.
IP-6-88) regarding Sections 22(e), 27(c)(i) and 27(d) of the Investment
Company Act of 1940, in connection with redeemability restrictions on
Section 403(b) policies, and that paragraphs numbered (1) through (4)
of that letter will be complied with.
(e) Transamerica hereby represents that the fees and the charges deducted
under the Contracts, in the aggregate, are reasonable in relation to
the services rendered, the expenses expected to be incurred, and the
risks assumed by Transamerica.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Transamerica
Occidental Life Insurance Company certifies that this Post-Effective Amendment
No. 10 to the Registration Statement meets all of the requirements for
effectiveness pursuant to Rule 485(a) under the Securities Act of 1933 and has
duly caused this Post-Effective Amendment No. 10 to the Registration Statement
to be signed on its behalf by the undersigned in the City of Los Angeles, State
of California on this 25th day of February, 1999.
SEPARATE ACCOUNT VA-2L TRANSAMERICA OCCIDENTAL
OF TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
LIFE INSURANCE COMPANY (DEPOSITOR)
(REGISTRANT)
--------------------------
David M. Goldstein
Vice President
As Required by the Securities Act of 1933, this Post-Effective Amendment No. 10
to the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signatures Titles Date
<S> <C> <C>
_____________________* Director February 25, 1999
Frank Beardsley
_____________________* Senior Vice President
Virginia M. Wilson and Controller
______________________* Director, President, ChairmanFebruary 25, 1999
Thomas J. Cusack and Chief Executive Officer
______________________* Director, Executive Vice President February 25, 1999
James W. Dederer General Counsel and Corporate Secretary
______________________* Director February 25, 1999
George A. Foegele
______________________* Director February 25, 1999
David E. Gooding
______________________* Director February 25, 1999
Edgar H. Grubb
______________________* Director February 25, 1999
Frank C. Herringer
______________________* Director February 25, 1999
Richard N. Latzer
______________________* Director February 25, 1999
Karen MacDonald
______________________* Director February 25, 1999
Gary U. Rolle'
______________________* Director February 25, 1999
Paul E. Rutledge III
______________________* Director February 25, 1999
T. Desmond Sugrue
February 25, 1999
______________________* Director February 25, 1999
Nooruddin S. Veerjee
______________________* Director February 25, 1999
Robert A. Watson
</TABLE>
______________________ On February 25, 1999 as Attorney-in-Fact pursuant to
*By:David M. Goldstein powers of attorney previously filed and filed herewith,
and in his own capacity as Vice President.
<PAGE>
