February 1, 1996
Dear Contract Owners:
In 1995, as the Fed started the year with a rate hike, it appeared the market
would continue down the same abysmal path it took in 1994. As it turned out,
nothing was farther from the truth.
Starting the year at an opening mark of 3834, the Dow Jones Industrial Average
seldom stopped to breathe as it closed the year at 5117, setting a record high
of 5216 on December 16. Following suit, the S&P 500 also registered record
highs, rising from an opening_year figure of 459 to close at 615.
In the almost festive atmosphere provided by the stock market, the bond market
was nearly overshadowed, though it provided a stellar performance of its own.
The long_term Treasury index, for example, was up 31%. Factors driving the
bond market in 1995 were a slowing economy that produced only modest growth,
falling inflation and lower interest rates.
We are pleased with what the overall market returned in 1995 and look forward
to the opportunities in store for us in 1996. What follows are reports from
the portfolio managers along with the performance data of each portfolio in
the Cova variable annuity.
Sincerely,
L. J. Stensrud
President
<PAGE>
February 1, 1996
Dear Contract Owners:
In 1995, as the Fed started the year with a rate hike, it appeared the market
would continue down the same abysmal path it took in 1994. As it turned out,
nothing was farther from the truth.
Starting the year at an opening mark of 3834, the Dow Jones Industrial Average
seldom stopped to breathe as it closed the year at 5117, setting a record high
of 5216 on December 16. Following suit, the S&P 500 also registered record
highs, rising from an opening_year figure of 459 to close at 615.
In the almost festive atmosphere provided by the stock market, the bond market
was nearly overshadowed, though it provided a stellar performance of its own.
The long_term Treasury index, for example, was up 31%. Factors driving the
bond market in 1995 were a slowing economy that produced only modest growth,
falling inflation and lower interest rates.
We are pleased with what the overall market returned in 1995 and look forward
to the opportunities in store for us in 1996. What follows is a report from
Peter Hegel who oversees the Strategy Asset Allocation Model, and reports from
the portfolio managers along with the performance data of each portfolio.
Sincerely,
L. J. Stensrud
President
<PAGE>
February 1, 1996
Dear Contract Owners:
In 1995, as the Fed started the year with a rate hike, it appeared the market
would continue down the same abysmal path it took in 1994. As it turned out,
nothing was farther from the truth.
Starting the year at an opening mark of 3834, the Dow Jones Industrial Average
seldom stopped to breathe as it closed the year at 5117, setting a record high
of 5216 on December 16. Following suit, the S&P 500 also registered record
highs, rising from an opening_year figure of 459 to close at 615.
In the almost festive atmosphere provided by the stock market, the bond market
was nearly overshadowed, though it provided a stellar performance of its own.
The long_term Treasury index, for example, was up 31%. Factors driving the
bond market in 1995 were a slowing economy that produced only modest growth,
falling inflation and lower interest rates.
We are pleased with what the overall market returned in 1995 and look forward
to the opportunities in store for us in 1996. What follows is a report from
Don Hays, Director of Investment Strategy at Wheat First Butcher Singer,
discussing the asset allocation model, and reports from the portfolio managers
along with the performance data of each portfolio.
Sincerely,
L. J. Stensrud
President
KPMG Peat Marwick LLP
1010 Market Street
St. Louis, MO 63101-2085
INDEPENDENT AUDITOR'S REPORT
The Contract Owners of Cova Variable
Annuity Account Five
Cova Financial Life Insurance Company:
We have audited the accompanying statement of assets and liabilities of the
Quality Income, Growth and Income, Money Market, and Stock Index sub-accounts
(investment options within the Van Kampen Merritt Series Trust) and the Growth
and Income sub-account (investment option within the Lord Abbett Series Fund,
Inc.) of Cova Variable Annuity Account Five of Cova Financial Life Insurance
Company (the Separate Account) as of December 31, 1995, and the related
statements of operations and changes in contract owners' equity for the
periods then ended, and the financial highlights for the periods presented.
These financial statements and financial highlights are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned at December 31, 1995 by correspondence with the Van Kampen Merritt
Series Trust and the Lord Abbett Series Fund, Inc. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
sub-accounts of Cova Variable Annuity Account Five of Cova Financial Life
Insurance Company as of December 31, 1995, and the results of their operations
and the changes in their contract owners' equity for the periods then ended,
and the financial highlights for the periods presented, in conformity with
generally accepted accounting principles.
By: /s/ KPMG PEAT MARWICK LLP
___________________________
KPMG Peat Marwick LLP
February 9, 1996
COVA VARIABLE ANNUITY ACCOUNT FIVE
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
ASSETS
INVESTMENTS:
<TABLE>
<CAPTION>
<S> <C>
VAN KAMPEN MERRITT SERIES TRUST:
Quality Income Portfolio - 12,273 shares at a net asset value of $10.87 per share (cost $131,622) $ 133,428
Growth and Income Portfolio - 8,404 shares at a net asset value of $12.51 per share (cost $108,946) 105,152
Money Market Portfolio - 325,759 shares at a net asset value of $1.00 per share (cost $325,759) 325,759
Stock Index Portfolio - 15,252 shares at a net asset value of $13.84 per share (cost $209,816) 211,141
LORD ABBETT SERIES FUND, INC:
Growth and Income Portfolio - 175,566 shares at a net asset value of $15.24 per share (cost $2,772,318) 2,675,412
----------
TOTAL ASSETS $3,450,892
==========
LIABILITIES AND CONTRACT OWNERS' EQUITY
FEES PAYABLE TO COVA FINANCIAL LIFE INSURANCE COMPANY $ 394
CONTRACT OWNERS' EQUITY:
Trust Quality Income - 8,702 accumulation units at $15.331980 per unit 133,413
Trust Growth and Income - 7,197 accumulation units at $14.608910 per unit 105,140
Trust Money Market - 28,509 accumulation units at $11.425132 per unit 325,720
Trust Stock Index - 13,384 accumulation units at $15.773909 per unit 211,117
Fund Growth and Income - 125,555 accumulation units at $21.306278 per unit 2,675,108
----------
TOTAL CONTRACT OWNERS' EQUITY 3,450,498
----------
TOTAL LIABILITIES AND CONTRACT OWNERS' EQUITY $3,450,892
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
STATEMENT OF OPERATIONS
For the Period from June 19, 1995 (Commencement of Operations)
Through December 31, 1995
VAN KAMPEN MERRITT
LORD ABBETT
SERIES TRUST
SERIES FUND, INC.
______________________________________________________ ______________
<TABLE>
<CAPTION>
QUALITY GROWTH & MONEY STOCK GROWTH &
INCOME INCOME MARKET INDEX INCOME TOTAL
-------- ---------- ------- ------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
INCOME:
Dividends $ 1,375 $ 7,280 $10,724 $ 7,901 $ 203,892 $231,172
-------- ---------- ------- ------- ---------- ---------
Total Income 1,375 7,280 10,724 7,901 203,892 231,172
EXPENSES:
Mortality and Expense
Risk Fee 216 179 2,299 494 5,791 8,979
Administrative Fee 26 21 276 59 695 1,077
Total Expenses 242 200 2,575 553 6,486 10,056
Net Investment Income 1,133 7,080 8,149 7,348 197,406 221,116
Net Realized Gain
on Investments 6 262 -- 1,432 2,243 3,943
Net Change in Unrealized
Gain/(Loss) on Investments 1,806 (3,794) -- 1,325 (96,906) (97,569)
Net Realized and Unrealized
Gain/(Loss) on Investments 1,812 (3,532) -- 2,757 (94,663) (93,626)
Net Increase in Contract
Owners' Equity Resulting
From Operations $ 2,945 $ 3,548 $ 8,149 $10,105 $ 102,743 $127,490
======== ========== ======= ======= ========== =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
STATEMENT OF CHANGES IN CONTRACT OWNERS' EQUITY
For the Period from June 19, 1995 (Commencement of Operations)
Through December 31, 1995
VAN KAMPEN MERRITT LORD
ABBETT
SERIES TRUST
SERIES FUND, INC.
________________________________________________________ ______________
<TABLE>
<CAPTION>
QUALITY GROWTH & MONEY STOCK GROWTH &
INCOME INCOME MARKET INDEX INCOME TOTAL
--------- ---------- ------------ --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net Investment Income $ 1,133 $ 7,080 $ 8,149 $ 7,348 $ 197,406 $ 221,116
Net Realized Gain on
Investments 6 262 -- 1,432 2,243 3,943
Net Unrealized Gain/(Loss)
on Investments 1,806 (3,794) -- 1,325 (96,906) (97,569)
NET INCREASE IN CONTRACT
Owners' Equity
Resulting from
Operations 2,945 3,548 8,149 10,105 102,743 127,490
From Account Unit Transactions:
Proceeds from Units of
the Account Sold 20,000 148 2,128,675 15,778 441,266 2,605,867
Payments for Units of the
Account Redeemed (248) -- -- (2,204) (3,894) (6,346)
Account Transfers 110,716 101,444 (1,811,104) 187,438 2,134,993 723,487
Net Increase in Contract
Owners' Equity From
Account Unit
Transactions 130,468 101,592 317,571 201,012 2,572,365 3,323,008
Net Increase in Contract
Owners' Equity 133,413 105,140 325,720 211,117 2,675,108 3,450,498
Contract Owners' Equity:
Beginning of Period -- -- -- -- -- --
End of Period $133,413 $ 105,140 $ 325,720 $211,117 $2,675,108 $3,450,498
========= ========== ============ ========= =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the
period
per sub-account are presented below:
<TABLE>
<CAPTION>
VAN KAMPEN MERRITT SERIES TRUST - QUALITY INCOME PORTFOLIO
For the Period From 8/16/95
(Commencement of Operations)
Through 12/31/95
-----------------------------
<S> <C>
Accumulation Unit Value,
- ---------------------------------
Beginning of Period $ 14.42
- --------------------------------- -----------------------------
Net Investment Income .32
Net Realized and Unrealized
Gain from Security
Transactions .59
-----------------------------
Total from Investment Operations .91
-----------------------------
Accumulation Unit Value,
End of Period $ 15.33
=============================
Total Return** 17.03%*
Contract Owners Equity ,
End of Period (in thousands) $ 133
Ratio of Expenses to Average
Contract Owners' Equity 1.40%*
Ratio of Net Investment Income
to Average Contract
Owners' Equity 6.54%*
Number of Units Outstanding
at End of Period 8,702
<FN>
* Annualized
** Investment returns do not reflect any annual contract maintenance fees
or withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the
period
per sub-account are presented below:
<TABLE>
<CAPTION>
VAN KAMPEN MERRITT SERIES TRUST - GROWTH & INCOME PORTFOLIO
For the Period From 7/19/95
(Commencement of Operations)
Through 12/3195
-----------------------------
<S> <C>
Accumulation Unit Value,
Beginning of Period $ 13.05
-----------------------------
Net Investment Income .99
Net Realized and Unrealized
Gain from Security
Transactions .57
Total from Investment Operations 1.56
Accumulation Unit Value,
End of Period $ 14.61
=============================
Total Return** 26.71%*
Contract Owners Equity ,
End of Period (in thousands) $ 105
Ratio of Expenses to Average
Contract Owners' Equity 1.40%*
Ratio of Net Investment Income
to Average Contract
Owners' Equity 49.49%*
Number of Units Outstanding
at End of Period 7,197
<FN>
* Annualized
** Investment returns do not reflect any annual contract maintenance fees or
withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the
period
per sub-account are presented below:
<TABLE>
<CAPTION>
VAN KAMPEN MERRITT SERIES TRUST - MONEY MARKET PORTFOLIO
For the Period From 6/19/95
(Commencement of Operations)
Through 12/3195
-----------------------------
<S> <C>
Accumulation Unit Value,
Beginning of Period $ 11.13
-----------------------------
Net Investment Income .29
Net Realized and Unrealized
Gain/(Loss) from Security
Transactions --
Total from Investment Operations .29
Accumulation Unit Value,
End of Period $ 11.42
=============================
Total Return** 4.94%*
Contract Owners Equity ,
End of Period (in thousands) $ 326
Ratio of Expenses to Average
Contract Owners' Equity 1.40%*
Ratio of Net Investment Income
to Average Contract
Owners' Equity 4.38%*
Number of Units Outstanding
at End of Period 28,509
<FN>
* Annualized
** Investment returns do not reflect any annual contract maintenance
fees or withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the
period
per sub-account are presented below:
<TABLE>
<CAPTION>
VAN KAMPEN MERRITT SERIES TRUST - STOCK INDEX PORTFOLIO
For the Period From 7/20/95
(Commencement of Operations)
Through 12/3195
-----------------------------
<S> <C>
Accumulation Unit Value,
Beginning of Period $ 14.13
-----------------------------
Net Investment Income .50
Net Realized and Unrealized
Gain from Security
Transactions 1.14
-----------------------------
Total from Investment Operations 1.64
- --------------------------------- -----------------------------
Accumulation Unit Value,
- ---------------------------------
End of Period $ 15.77
- --------------------------------- =============================
Total Return** 26.25%*
- --------------------------------- -----------------------------
Contract Owners Equity ,
- ---------------------------------
End ofPeriod (in thousands) $ 211
- --------------------------------- -----------------------------
Ratio of Expenses to Average
- ---------------------------------
Contract Owners' Equity 1.40%*
- --------------------------------- -----------------------------
Ratio of Net Investment Income
- ---------------------------------
to Average Contract
- ---------------------------------
Owners' Equity 18.57%*
- --------------------------------- -----------------------------
Number of Units Outstanding
- ---------------------------------
at End of Period 13,384
- --------------------------------- -----------------------------
<FN>
* Annualized
** Investment returns do not reflect any annual contract maintenance
fees or withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the
period
per sub-account are presented below:
<TABLE>
<CAPTION>
LORD ABBETT SERIES FUND, INC. - GROWTH AND INCOME PORTFOLIO
For the Period From7/20/95
-----------------------------
(Commencement of Operations)
-----------------------------
Through 12/3195
-----------------------------
<S> <C>
Accumulation Unit Value,
Beginning of Period $ 19.54
-----------------------------
Net Investment Income 1.50
Net Realized and Unrealized
Gain from Security
Transactions .27
Total from Investment Operations 1.77
-----------------------------
Accumulation Unit Value,
- ---------------------------------
End of Period $ 21.31
- --------------------------------- =============================
Total Return** 20.38%*
- --------------------------------- -----------------------------
Contract Owners Equity , $ 2,675
- --------------------------------- -----------------------------
End ofPeriod (in thousands)
- ---------------------------------
Ratio of Expenses to Average
- ---------------------------------
Contract Owners' Equity 1.40%*
- --------------------------------- -----------------------------
Ratio of Net Investment Income
- ---------------------------------
to Average Contract
- ---------------------------------
Owners' Equity 42.60%*
- --------------------------------- -----------------------------
Number of Units Outstanding
- ---------------------------------
at End of Period 125,555
- --------------------------------- -----------------------------
<FN>
* Annualized
** Investment returns do not reflect any annual contract maintenance
fees or withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
NOTES TO FINANCIAL STATEMENTS
For the Period from June 19, 1995 (Commencement of Operations)
Through December 31, 1995
1. ORGANIZATION:
Cova Variable Annuity Account Five (the "Separate Account") is a separate
investment account established by a resolution of the Board of Directors of
Cova Financial Life Insurance Company ("Cova Life"). The Separate Account
operates as a Unit Investment Trust under the Investment Company Act of 1940.
The Separate Account is divided into sub-accounts, with the assets of each
sub-account invested in either the Van Kampen Merritt Series Trust ("Trust")
or the Lord Abbett Series Fund, Inc. ("Fund"). The Trust is managed by Van
Kampen American Capital Investment Advisory Corp. During 1995, the Trust
consisted of four portfolios available for investment; the Quality Income,
Growth & Income, Money Market, and Stock Index Portfolios. The Fund had one
portfolio available for investment in 1995; the Growth and Income Portfolio.
Not all portfolios of the Trust and Fund are available for investment
depending upon the nature and specific terms of the different contracts
currently being offered for sale. Both the Trust and Fund are diversified,
open-end, management investment companies which are intended to meet differing
investment objectives.
The Trust Quality Income Portfolio invests in U.S. Government issued debt
obligations and in various investment-grade debt instruments, including
mortgage pass-through obligations and collateralized mortgage obligations.
The Trust Growth and Income Portfolio invests in common stocks and futures and
options contracts. The Trust Money Market Portfolio invests in short-term
money market instruments. The Trust Stock Index Portfolio invests in common
stocks, stock index futures and options, and short-term securities. The Fund
Growth and Income Portfolio invests in common stocks.
2. SIGNIFICANT ACCOUNTING POLICIES:
A. INVESTMENT VALUATION
Investments in shares of the Trust and Fund are carried in the statement of
assets and liabilities at the underlying net asset value of the Trust and
Fund. The net asset value of the Trust and Fund has been determined on the
market value basis, and is valued daily by the Trust and Fund investment
managers. Realized gains and losses are calculated by the average cost
method.
B. REINVESTMENT OF DIVIDENDS
Dividends received from net investment income and net realized capital gains
are reinvested in additional shares of the portfolio of the Trust or Fund
making the distribution or, at the election of the Separate Account, received
in cash. Dividend income and capital gain distributions are recorded as
income on the ex-dividend date.
C. FEDERAL INCOME TAXES
Operations of the Separate Account form a part of Cova Life, which is taxed as
a "Life Insurance Company" under the Internal Revenue Code ("Code"). Under
current provisions of the Code, no Federal income taxes are payable by Cova
Life with respect to earnings of the Separate Account.
Under the principles set forth in Internal Revenue Ruling 81-225 and Section
817(h) of the Code and regulations thereunder, Cova Life believes that it will
be treated as the owner of the assets invested in the Separate Account for
Federal income tax purposes, with the result that earnings and gains, if any,
derived from those assets will not be included in a contract owners' gross
income until amounts are withdrawn or received pursuant to an Optional Payment
Plan.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
NOTES TO FINANCIAL STATEMENTS
For the Period from June 19, 1995 (Commencement of Operations)
Through December 31, 1995
3. CONTRACT CHARGES:
There are no deductions made from purchase payments for sales charges at the
time of purchase. However, if all or a portion of the contract value is
withdrawn, a withdrawal charge is calculated and deducted from the contract
value. The withdrawal charge is imposed on withdrawals of contract values
attributable to purchase payments within five years after receipt and is equal
to 5% of the purchase payment withdrawn. After the first contract
anniversary, provided that the contract value prior to withdrawal exceeds
$5,000, an owner may make a withdrawal each contract year of up to 10% of the
aggregate purchase payments free from withdrawal charges. An annual contract
maintenance charge of $30 is imposed on all contracts with contract values
less than $50,000 on their policy anniversary. The charge covers the cost of
contract administration for the previous year and is prorated between the
sub-accounts to which the contract value is allocated.
Mortality and expense risks assumed by Cova Life are compensated by a charge
equivalent to an annual rate of 1.25% of the value of net assets. The
mortality risks assumed by Cova Life arise from its contractual obligation to
make annuity payments after the annuity date for the life of the annuitant,
and to waive the withdrawal charge in the event of the death of the contract
owner.
In addition, the Separate Account bears certain administration expenses, which
are equivalent to an annual rate of .15% of net assets. These charges cover
the cost of establishing and maintaining the contracts and Separate Account.
Cova Life currently advances any premium taxes due at the time purchase
payments are made and then deducts premium taxes from the contract value at
the time annuity payments begin or upon withdrawal if Cova Life is unable to
obtain a refund. Cova Life, however, reserves the right to deduct premium
taxes when incurred.
4. ACCOUNT TRANSFERS:
Subject to certain restrictions, the contract owner may transfer all or a part
of the accumulated value of the contract among other offered and available
account options of the Separate Account and fixed rate annuities of Cova Life.
If more than 12 transfers have been made in the contract year, a transfer fee
of $25 per transfer or, if less, 2% of the amount transferred will be deducted
from the account value. If the owner is participating in the Dollar Cost
Averaging program, such related transfers are not taken into account in
determining any transfer fee.
VARIABLE ANNUITY ACCOUNT FIVE
NOTES TO FINANCIAL STATEMENTS
For the Period from June 19, 1995 (Commencement of Operations)
Through December 31, 1995
5. GAIN/(LOSS) ON INVESTMENTS:
The table below summarizes realized and unrealized gains and losses on
investments:
<TABLE>
<CAPTION>
REALIZED GAIN/(LOSS) ON INVESTMENTS:
For The Period From 6/19/95
(Commencement of Operations)
Through 12/31/95
<S> <C>
Trust Quality Income Portfolio:
Aggregate Proceeds From Sales $ 687
Aggregate Cost 681
Net Realized Gain on Investments $ 6
=============================
Trust Growth and Income Portfolio:
Aggregate Proceeds From Sales $ 27,991
Aggregate Cost 27,729
-----------------------------
Net Realized Gain on Investments $ 262
- ------------------------------------------ =============================
Trust Money Market Portfolio:
- ------------------------------------------
Aggregate Proceeds From Sales $ 1,544,456
- ------------------------------------------ -----------------------------
Aggregate Cost 1,544,456
- ------------------------------------------ -----------------------------
Net Realized Gain/(Loss) on Investments _ _
- ------------------------------------------ =============================
Trust Stock Index Portfolio:
- ------------------------------------------
Aggregate Proceeds From Sales $ 152,510
- ------------------------------------------ -----------------------------
Aggregate Cost 151,078
- ------------------------------------------ -----------------------------
Net Realized Gain on Investments $ 1,432
- ------------------------------------------ =============================
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
NOTES TO FINANCIAL STATEMENTS
For the Period from June 19, 1995 (Commencement of Operations)
Through December 31, 1995
5. GAIN/(LOSS) ON INVESTMENTS, CONTINUED:
<TABLE>
<CAPTION>
REALIZED GAIN/(LOSS) ON INVESTMENTS
For the Period From 6/19/95
(Commencement of Operations)
Through 12/31/95
-----------------------------
<S> <C>
Fund Growth and Income Portfolio:
Aggregate Proceeds From Sales $ 139,543
Aggregate Cost 137,300
Net Realized Gain on Investments $ 2,243
=============================
UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
- ------------------------------------------------------
Trust Quality Income Portfolio:
End of Period $ 1,806
Beginning of Period _ _
Net Change in Unrealized Gain on Investments $ 1,806
=============================
Trust Growth and Income Portfolio:
End of Period ($3,794)
Beginning of Period _ _
Net Change in Unrealized Loss on Investments ($3,794)
=============================
Trust Money Market Portfolio:
End of Period _ _
Beginning of Period _ _
Net Change in Unrealized Gain/(Loss) on Investments _ _
=============================
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
NOTES TO FINANCIAL STATEMENTS
For the Period from June 19, 1995 (Commencement of Operations)
Through December 31, 1995
5. GAIN/(LOSS) ON INVESTMENTS, CONTINUED:
<TABLE>
<CAPTION>
UNREALIZED GAIN/(LOSS) ON INVESTMENTS
For the Period From 6/19/95
(Commencement of Operations)
Through 12/31/95
-----------------------------
<S> <C>
Trust Stock Index Portfolio:
End of Period $ 1,325
Beginning of Period _ _
Net Change in Unrealized Gain on Investments $ 1,325
=============================
Fund Growth and Income Portfolio:
End of Period ($96,906)
Beginning of Period _ _
Net Change in Unrealized Loss on Investments ($96,906)
=============================
</TABLE>
6. ACCOUNT UNIT TRANSACTIONS:
The change in the number of accumulation units resulting from account unit
transactions is as follows:
VAN KAMPEN
MERRITT LORD ABBETT
SERIES TRUST SERIES FUND, INC.
____________________________________________ _____________
<TABLE>
__
<CAPTION>
QUALITY GROWTH & MONEY STOCK GROWTH &
INCOME INCOME MARKET INDEX INCOME TOTAL
-------- --------- --------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Units Sold 1,387 -- 188,325 1,057 21,839 212,608
Units Redeemed (16) (1) (28) (114) (527) (686)
Units Transferred 7,331 7,198 (159,788) 12,441 104,243 (28,575)
Balance at December 31, 1995 8,702 7,197 28,509 13,384 125,555 183,347
</TABLE>
7. SUBSEQUENT EVENTS:
On February 9, 1996, the Board of Trustees of Van Kampen Merritt Series Trust
voted to change the name of the Trust to Cova Series Trust, replace Van Kampen
American Capital Investment Advisory Corp. with Cova Investment Advisory Corp.
as Trust manager, and engage Van Kampen American Capital Investment Advisory
Corp. as a sub-advisor to the Trust.
