File Nos. 33-50174
811-7060
================================================================================
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]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 21 [X]
(Check appropriate box or boxes.)
COVA VARIABLE ANNUITY ACCOUNT FIVE
___________________________________
(Exact Name of Registrant)
COVA FINANCIAL LIFE INSURANCE COMPANY
______________________________________
(Name of Depositor)
4100 Newport Place Drive, Suite 840, Newport Beach, CA 92600
_____________________________________________________ _____
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (800) 831-5433
______________
Name and Address of Agent for Service
Lorry J. Stensrud, President
Cova Financial Life Insurance Company
One Tower Lane, Suite 3000
Oakbrook Terrace, Illinois 60181-4644
(800) 831-5433
Copies to:
Judith A. Hasenauer and Bernard J. Spaulding
Blazzard, Grodd & Hasenauer, P.C. Senior Vice President,
943 Post Road East General Counsel and Secretary
P.O. Box 5108 Cova Financial Life Insurance
Westport, CT 06881 Company
(203) 226-7866 One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
It is proposed that this filing will become effective:
_____ immediately upon filing pursuant to paragraph (b) of Rule 485
__X__ on May 1, 2000 pursuant to paragraph (b) of Rule 485
_____ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
_____ on (date) pursuant to paragraph (a)(1) of Rule 485
If appropriate, check the following:
_____ This Post-Effective Amendment designates a new date for a
previously filed Post-Effective Amendment.
Title of Securities Registered:
Individual Variable Annuity Contracts
EXPLANATORY NOTE
- --------------------------------------------------------------------------------
This Registration Statement contains three Portfolios of AIM Variable Insurance
Funds; two Portfolios of Alliance Variable Products Series Fund, Inc.; ten
Portfolios of the Cova Series Trust; one Portfolio of General American Capital
Company; three Portfolios of Goldman Sachs Variable Insurance Trust; four
Portfolios of Kemper Variable Series; one Portfolio of Liberty Variable
Investment Trust; six Portfolios of MFS Variable Insurance Trust; five
Portfolios of Oppenheimer Variable Account Funds; five Portfolios of Putnam
Variable Trust, Class IA Shares; eight Portfolios, Class 1 Shares, of Templeton
Variable Products Series Fund; two Portfolios of Variable Insurance Products
Fund; one Portfolio of Variable Insurance Products Fund II; and two Portfolios
of Variable Insurance Products Fund III. Different versions of the Prospectus
will be created from this Registration Statement. The only difference between
the versions of the Prospectuses created from this Registration Statement will
be the underlying funds available. The distribution system for each version of
the Prospectus is different. These Prospectuses will be filed with the
Commission pursuant to Rule 497 under the Securities Act of 1933. The Registrant
undertakes to update the Explanatory Note, as needed, each time a Post-Effective
Amendment is filed.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
CROSS REFERENCE SHEET
(required by Rule 495)
Item No. Location
- -------- --------------------------------
PART A
Item 1. Cover Page . . . . . . . . . . . . . . Cover Page
Item 2. Definitions . . . . . . . . . . . . . Index of Special Terms
Item 3. Synopsis . . . . . . . . . . . . . . . Profile
Item 4. Condensed Financial Information . . . Appendix A
Item 5. General Description of Registrant,
Depositor, and Portfolio Companies . . Other Information - Cova; The
Separate Account;
Investment Options; Appendix B
Item 6. Deductions and Expenses. . . . . . . . Expenses
Item 7. General Description of Variable
Annuity Contracts. . . . . . . . . . . The Fixed and Variable Annuity
Item 8. Annuity Period . . . . . . . . . . . . Income Phase
Item 9. Death Benefit. . . . . . . . . . . . . Death Benefit
Item 10. Purchases and Contract Value . . . . . Purchase
Item 11. Redemptions. . . . . . . . . . . . . . Access to Your Money
Item 12. Taxes. . . . . . . . . . . . . . . . . Taxes
Item 13. Legal Proceedings. . . . . . . . . . . None
Item 14. Table of Contents of the Statement of
Additional Information . . . . . . . . Table of Contents of the
Statement of Additional
Information
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
CROSS REFERENCE SHEET
(required by Rule 495)
Item No. Location
- -------- -----------------------
PART B
Item 15. Cover Page . . . . . . . . . . . . . . Cover Page
Item 16. Table of Contents. . . . . . . . . . . Table of Contents
Item 17. General Information and History. . . . Company
Item 18. Services . . . . . . . . . . . . . . . Not Applicable
Item 19. Purchase of Securities Being Offered . Not Applicable
Item 20. Underwriters . . . . . . . . . . . . . Distribution
Item 21. Calculation of Performance Data. . . . Performance Information
Item 22. Annuity Payments . . . . . . . . . . . Annuity Provisions
Item 23. Financial Statements . . . . . . . . . Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
Item so numbered in Part C to this Registration Statement.
PART A
THE FIXED
AND VARIABLE ANNUITY
ISSUED BY
COVA VARIABLE ANNUITY ACCOUNT FIVE
AND
COVA FINANCIAL LIFE INSURANCE COMPANY
This prospectus describes the Fixed and Variable Annuity Contract offered by
Cova Financial Life Insurance Company (Cova).
The annuity contract has __ investment choices - a fixed account which offers an
interest rate which is guaranteed by Cova, and __ investment portfolios listed
below. You can put your money in the fixed account and/or any of these
investment portfolios (except as noted).
AIM VARIABLE INSURANCE FUNDS:
MANAGED BY A I M ADVISORS, INC.
AIM V.I. Capital Appreciation
AIM V.I. International Equity
AIM V.I. Value
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.:
MANAGED BY ALLIANCE CAPITAL MANAGEMENT L.P.
Premier Growth (Class A)
Real Estate Investment (Class A)
COVA SERIES TRUST:
MANAGED BY J.P. MORGAN
INVESTMENT MANAGEMENT INC.:
Select Equity
Small Cap Stock
International Equity
Quality Bond
Large Cap Stock
MANAGED BY LORD, ABBETT & CO.:
Bond Debenture (a "high yield" portfolio under California
insurance regulations)
Mid-Cap Value
Large Cap Research
Developing Growth
Lord Abbett Growth and Income
GENERAL AMERICAN CAPITAL
COMPANY:
MANAGED BY CONNING
ASSET MANAGEMENT COMPANY
Money Market
GOLDMAN SACHS VARIABLE INSURANCE TRUST ("VIT"):
MANAGED BY GOLDMAN SACHS ASSET
MANAGEMENT, a unit of the Investment Management Division of Goldman,
Sachs & Co.
Goldman Sachs VIT Growth and Income Fund
MANAGED BY GOLDMAN SACHS ASSET
MANAGEMENT INTERNATIONAL
Goldman Sachs VIT International Equity Fund
Goldman Sachs VIT Global Income Fund
KEMPER VARIABLE SERIES:
MANAGED BY SCUDDER KEMPER INVESTMENTS, INC.
Kemper Small Cap Value
Kemper Government Securities
Kemper Small Cap Growth
MANAGED BY DREMAN VALUE MANAGEMENT, L.L.C.
Kemper-Dreman High Return Equity
LIBERTY VARIABLE INVESTMENT TRUST:
MANAGED BY NEWPORT FUND MANAGEMENT INC.
Newport Tiger Fund, Variable Series
MFS VARIABLE INSURANCE TRUST:
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
MFS Emerging Growth
MFS Research
MFS Growth With Income
MFS High Income
MFS Global Governments
MFS Bond
OPPENHEIMER VARIABLE ACCOUNT FUNDS:
MANAGED BY OPPENHEIMERFUNDS, INC.
Oppenheimer High Income Fund/VA
Oppenheimer Bond Fund/VA
Oppenheimer Capital Appreciation Fund/VA
Oppenheimer Main Street Growth & Income Fund/VA
Oppenheimer Strategic Bond Fund/VA
PUTNAM VARIABLE TRUST:
MANAGED BY PUTNAM INVESTMENT MANAGEMENT, INC.
Putnam VT Growth and Income Class IA Shares
Putnam VT International Growth Class IA Shares
Putnam VT International New Opportunities Class IA Shares
Putnam VT New Value Class IA Shares
Putnam VT Vista Class IA Shares
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST*, CLASS 1 SHARES
MANAGED BY FRANKLIN ADVISERS, INC.
Franklin Large Cap Growth Securities (the surviving fund of the merger
with Franklin Large Cap Growth Investments)
Franklin Small Cap (the surviving fund of the merger with Franklin Small
Cap Investments)
Templeton Global Income Securities (the surviving fund of the merger
with Templeton Bond)
MANAGED BY FRANKLIN MUTUAL ADVISERS, LLC
Mutual Shares Securities (the surviving fund of the merger with Mutual
Shares Investments)
MANAGED BY TEMPLETON INVESTMENT COUNSEL, INC.
Templeton Asset Strategy (formerly, Templeton Asset Allocation)
Templeton International Securities (formerly, Templeton
International)
MANAGED BY TEMPLETON GLOBAL ADVISORS LIMITED
Templeton Growth Securities (the surviving fund of the merger with
Templeton Stock)
MANAGED BY TEMPLETON ASSET MANAGEMENT LTD.
Templeton Developing Markets Securities (formerly, Templeton Developing
Markets)
*Effective May 1, 2000, the portfolios of the Templeton Variable Products
Series Fund were merged into similar portfolios of Franklin Templeton
Variable Insurance Products Trust.
VARIABLE INSURANCE PRODUCTS FUND:
MANAGED BY FIDELITY MANAGEMENT & RESEARCH COMPANY
VIP Growth
VIP Equity-Income
VARIABLE INSURANCE PRODUCTS FUND II:
MANAGED BY FIDELITY MANAGEMENT & RESEARCH COMPANY
VIP II Contrafund
VARIABLE INSURANCE PRODUCTS FUND III:
MANAGED BY FIDELITY MANAGEMENT & RESEARCH COMPANY
VIP III Growth Opportunities
VIP III Growth & Income
Please read this prospectus before investing and keep it on file for future
reference. It contains important information about the Cova Fixed and Variable
Annuity Contract.
To learn more about the Cova Fixed and Variable Annuity Contract, you can obtain
a copy of the Statement of Additional Information (SAI) dated May 1, 2000. The
SAI has been filed with the Securities and Exchange Commission (SEC) and is
legally a part of the prospectus. The SEC maintains a Web site
(http://www.sec.gov) that contains the SAI, material incorporated by reference,
and other information regarding companies that file electronically with the SEC.
The Table of Contents of the SAI is on Page __ of this prospectus. For a free
copy of the SAI, call us at (800) 523-1661 or write us at: One Tower Lane, Suite
3000, Oakbrook Terrace, Illinois 60181-4644.
The Contracts:
* are not bank deposits
* are not federally insured
* are not endorsed by any bank or government agency
* are not guaranteed and may be subject to loss of principal
The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
May 1, 2000
TABLE OF CONTENTS
PAGE
INDEX OF SPECIAL TERMS
SUMMARY
FEE TABLE
EXAMPLES
THE ANNUITY CONTRACT
ANNUITY PAYMENTS (THE INCOME PHASE)
ANNUITY DATE
ANNUITY PAYMENTS
ANNUITY OPTIONS
PURCHASE
Purchase Payments
Allocation of Purchase Payments
Accumulation Units
INVESTMENT OPTIONS
AIM Variable Insurance Funds
Alliance Variable Products Series Fund, Inc.
Cova Series Trust
General American Capital Company
Goldman Sachs Variable Insurance Trust
Kemper Variable Series
Liberty Variable Investment Trust
MFS Variable Insurance Trust
Oppenheimer Variable Account Funds
Putnam Variable Trust
Franklin Templeton Variable Insurance Products Trust
Variable Insurance Products Fund
Variable Insurance Products Fund II
Variable Insurance Products Fund III
Transfers
Dollar Cost Averaging Program
Automatic Rebalancing Program
Approved Asset Allocation Programs
Voting Rights
Substitution
EXPENSES
Insurance Charges
Contract Maintenance Charge
Withdrawal Charge
Reduction or Elimination of the Withdrawal Charge
Premium Taxes
Transfer Fee
Income Taxes
Investment Portfolio Expenses
TAXES
Annuity Contracts in General
Qualified and Non-Qualified Contracts
Withdrawals - Non-Qualified Contracts
Withdrawals - Qualified Contracts
Withdrawals - Tax-Sheltered Annuities
Diversification
ACCESS TO YOUR MONEY
Systematic Withdrawal Program
Suspension of Payments or Transfers
PERFORMANCE
DEATH BENEFIT
Upon Your Death
Death of Annuitant
OTHER INFORMATION
Cova
The Separate Account
Distributor
Ownership
Beneficiary
Assignment
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
APPENDIX A - Condensed Financial Information
APPENDIX B - Participating Investment Portfolios
APPENDIX C - Performance Information
INDEX OF SPECIAL TERMS
Because of the complex nature of the contract, we have used certain words
or terms in this prospectus which may need an explanation. We have
identified the following as some of these words or terms. The page that is
indicated here is where we believe you will find the best explanation for
the word or term. These words and terms are in italics on the indicated
page.
PAGE
Accumulation Phase
Accumulation Unit
Annuitant
Annuity Date
Annuity Options
Annuity Payments
Annuity Unit
Beneficiary
Fixed Account
Income Phase
Investment Portfolios
Joint Owner
Non-Qualified
Owner
Purchase Payment
Qualified
Tax Deferral
SUMMARY
The sections in this summary correspond to sections in this prospectus which
discuss the topics in more detail.
THE ANNUITY CONTRACT. The fixed and variable annuity contract offered by Cova is
a contract between you, the owner, and Cova, an insurance company. The Contract
provides a means for investing on a tax-deferred basis. The contract is intended
for retirement savings or other long-term investment purposes and provides for a
death benefit and guaranteed income options.
This contract offers __ investment portfolios. These portfolios are designed to
offer a better return than the fixed account. However, this is NOT guaranteed.
You can also lose your money.
The fixed account offers an interest rate that is guaranteed by the insurance
company, Cova. While your money is in the fixed account, the interest your money
will earn as well as your principal is guaranteed by Cova.
You can transfer between accounts up to 12 times a year without charge or tax
implications.
The contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase. During the accumulation phase, earnings
accumulate on a tax-deferred basis and are taxed as income when you make a
withdrawal. The income phase occurs when you begin receiving regular payments
from your Contract.
The amount of money you are able to accumulate in your account during the
accumulation phase will determine, in part, the amount of income payments
during the income phase.
ANNUITY PAYMENTS (THE INCOME PHASE). If you want to receive regular income from
your annuity, you can choose an annuity option. Once you begin receiving regular
payments, you cannot change your payment plan. During the income phase, you have
the same investment choices you had during the accumulation phase. You can
choose to have payments come from the fixed account, the investment portfolios
or both. If you choose to have any part of your payments come from the
investment portfolios, the dollar amount of your payments may go up or down.
HOW TO PURCHASE THE CONTRACT. You can buy this contract with $5,000 or more
under most circumstances. You can add $500 or more any time you like during the
accumulation phase. Your registered representative can help you fill out the
proper forms.
INVESTMENT OPTIONS. You can put your money in any or all of the following
investment portfolios which are briefly described in Appendix B and more fully
described in the prospectuses for the funds. Currently, if you are not
participating in an asset allocation program, you can only invest in 15
investment portfolios at any one time. Depending upon market conditions and the
performance of the portfolio(s) you select, you can make or lose money in any of
these portfolios.
AIM VARIABLE INSURANCE FUNDS:
MANAGED BY A I M ADVISORS, INC.
AIM V.I. Capital Appreciation
AIM V.I. International Equity
AIM V.I. Value
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.:
MANAGED BY ALLIANCE CAPITAL MANAGEMENT L.P.
Premier Growth (Class A)
Real Estate Investment (Class A)
COVA SERIES TRUST:
MANAGED BY J.P. MORGAN
INVESTMENT MANAGEMENT INC.:
Select Equity
Small Cap Stock
International Equity
Quality Bond
Large Cap Stock
MANAGED BY LORD, ABBETT & CO.:
Bond Debenture (a "high yield" portfolio under
California insurance regulations)
Mid-Cap Value
Large Cap Research
Developing Growth
Lord Abbett Growth and Income
GENERAL AMERICAN CAPITAL
COMPANY:
MANAGED BY CONNING
ASSET MANAGEMENT COMPANY
Money Market
GOLDMAN SACHS VARIABLE INSURANCE TRUST:
MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT
Goldman Sachs VIT Growth and Income Fund
MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
Goldman Sachs VIT International Equity Fund
Goldman Sachs VIT Global Income Fund
KEMPER VARIABLE SERIES:
MANAGED BY SCUDDER KEMPER INVESTMENTS, INC.
Kemper Small Cap Value
Kemper Government Securities
Kemper Small Cap Growth
MANAGED BY DREMAN VALUE MANAGEMENT, L.L.C.
Kemper-Dreman High Return Equity
LIBERTY VARIABLE INVESTMENT TRUST:
MANAGED BY NEWPORT FUND MANAGEMENT INC.
Newport Tiger Fund, Variable Series
MFS VARIABLE INSURANCE TRUST:
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
MFS Emerging Growth
MFS Research
MFS Growth With Income
MFS High Income
MFS Global Governments
MFS Bond
OPPENHEIMER VARIABLE ACCOUNT FUNDS:
MANAGED BY OPPENHEIMERFUNDS, INC.
Oppenheimer High Income Fund/VA
Oppenheimer Bond Fund/VA
Oppenheimer Capital Appreciation Fund/VA
Oppenheimer Main Street Growth & Income Fund/VA
Oppenheimer Strategic Bond Fund/VA
PUTNAM VARIABLE TRUST:
MANAGED BY PUTNAM INVESTMENT MANAGEMENT, INC.
Putnam VT Growth and Income Class IA Shares
Putnam VT International Growth Class IA Shares
Putnam VT International New Opportunities Class IA Shares
Putnam VT New Value Class IA Shares
Putnam VT Vista Class IA Shares
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST*, CLASS 1 SHARES
MANAGED BY FRANKLIN ADVISERS, INC.
Franklin Large Cap Growth Securities (the surviving fund of the merger with
Franklin Large Cap Growth Investments)
Franklin Small Cap (the surviving fund of the merger with Franklin Small
Cap Investments)
Templeton Global Income Securities (the surviving fund of the merger with
Templeton Bond)
MANAGED BY FRANKLIN MUTUAL ADVISERS, LLC
Mutual Shares Securities (formerly, Mutual Shares Investments)
MANAGED BY TEMPLETON INVESTMENT COUNSEL, INC.
Templeton Asset Strategy (formerly, Templeton Asset Allocation)
Templeton International Securities (formerly, Templeton
International)
MANAGED BY TEMPLETON GLOBAL ADVISORS LIMITED
Templeton Growth Securities (the surviving fund of the merger with Templeton
Stock)
MANAGED BY TEMPLETON ASSET MANAGEMENT LTD.
Templeton Developing Markets Securities (formerly, Templeton
Developing Markets)
*Effective May 1, 2000, the portfolios of the Templeton Variable Products Series
Fund were merged into similar portfolios of Templeton Variable Insurance
Products Trust.
VARIABLE INSURANCE PRODUCTS FUND:
MANAGED BY FIDELITY MANAGEMENT & RESEARCH COMPANY
VIP Growth
VIP Equity-Income
VARIABLE INSURANCE PRODUCTS FUND II:
MANAGED BY FIDELITY MANAGEMENT & RESEARCH COMPANY
VIP II Contrafund
VARIABLE INSURANCE PRODUCTS FUND III:
MANAGED BY FIDELITY MANAGEMENT & RESEARCH COMPANY
VIP III Growth Opportunities
VIP III Growth & Income
(VIP, VIP II and VIP III refer to Variable Insurance
Products Fund, Variable Insurance Products Fund II and
Variable Insurance Products Fund III, respectively.)
Depending upon market conditions and the performance of the portfolio(s) you
select, you can make or lose money in any of these portfolios.
EXPENSES. The contract has insurance features and investment features, and there
are costs related to each.
* Each year Cova deducts a $30 contract fee from your contract. During the
accumulation phase, Cova currently waives this charge if the value of your
contract is at least $50,000.
* Cova also deducts for its insurance charges which total 1.40% of the
average daily value of your contract allocated to the investment
portfolios.
* If you take your money out, Cova may assess a withdrawal charge which is
equal to 5% of the purchase payment you withdraw. After Cova has had a
purchase payment for 5 years, there is no charge by Cova for a withdrawal
of that purchase payment.
* When you begin receiving regular income payments from your annuity, Cova
will assess a state premium tax charge, if applicable, which ranges from
0%-4% depending upon the state.
* The first 12 transfers in a year are free. After that, a transfer fee of
$25 or 2% of the amount transferred (whichever is less) is assessed.
* There are also investment charges which currently range from ____% to ____%
of the average daily value of the investment portfolio depending upon the
investment portfolio.
TAXES. Your earnings are not taxed until you take them out. If you take money
out during the accumulation phase, earnings come out first and are taxed as
income. If you are younger than 59 1/2 when you take money out, you may be
charged a 10% federal tax penalty on the earnings. Payments during the income
phase are considered partly a return of your original investment. That part of
each payment is not taxable as income.
ACCESS TO YOUR MONEY. You can take money out at any time during the accumulation
phase. After the first year, you can take up to 10% of your total purchase
payments each year without charge from Cova. Withdrawals of purchase payments in
excess of that may be charged a withdrawal charge, depending on how long your
money has been in the contract. However, Cova will never assess a withdrawal
charge on earnings you withdraw. Earnings are defined as the value in your
contract minus the remaining purchase payments in your contract. Of course, you
may also have to pay income tax and a tax penalty on any money you take out.
DEATH BENEFIT. If you die before moving to the income phase, the person you have
chosen as your beneficiary will receive a death benefit.
OTHER INFORMATION.
Free Look. If you cancel the contract within 10 days after receiving it
(or, in the state of California, within 30 days if you are 60 years or older
when we issue the contract), we will send your money back without assessing a
withdrawal charge. You will receive whatever your contract is worth on the day
we receive your request. This may be more or less than your original payment. If
we're required by law to return your original payment, we reserve the right to
put your money in the Money Market Fund during the free-look period.
No Probate. In most cases, when you die, the person you choose as your
beneficiary will receive the death benefit without going through probate.
Who should purchase the Contract? This contract is designed for people
seeking long-term tax-deferred accumulation of assets, generally for retirement
or other long-term purposes. The tax-deferred feature is most attractive to
people in high federal and state income tax brackets. You should not buy this
contract if you are looking for a short-term investment or if you cannot take
the risk of getting back less money than you put in.
Additional Features. This contract has additional features you might be
interested in. These include:
You can arrange to have money automatically sent to you each month while
your contract is still in the accumulation phase. Of course, you'll have to pay
taxes on money you receive. We call this feature the Systematic Withdrawal
Program.
You can arrange to have a regular amount of money automatically invested in
investment portfolios each month, theoretically giving you a lower average cost
per unit over time than a single one time purchase. We call this feature Dollar
Cost Averaging.
You can arrange to automatically readjust the money between investment
portfolios periodically to keep the blend you select. We call this feature
Automatic Rebalancing.
Under certain circumstances, Cova will give you your money without a
withdrawal charge if you need it while you're in a nursing home. We call this
feature the Nursing Home Waiver.
These features may not be suitable for your particular situation.
INQUIRIES. If you need more information, please contact us at:
Cova Life Sales Company
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181
800-523-1661
COVA VARIABLE ANNUITY ACCOUNT FIVE FEE TABLE
The purpose of the Fee Table is to show you the various expenses you will incur
directly or indirectly with the contract. The Fee Table reflects expenses of the
Separate Account as well as of the investment portfolios. Expenses of the
investment portfolios are not fixed or specified under the terms of the contract
and actual expenses may vary.
OWNER TRANSACTION EXPENSES
Withdrawal Charge (see Note 1 below) 5% of purchase payment withdrawn
Transfer Fee (see Note 2 below) No charge for first 12 transfers in a
contract year; thereafter, the fee is
$25 per transfer or, if less, 2% of the
amount transferred.
CONTRACT MAINTENANCE CHARGE (see Note 3
below) $30 per contract per year
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Premium 1.25%
Administrative Expense Charge .15%
_____
TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES 1.40%
INVESTMENT PORTFOLIO EXPENSES
(as a percentage of the average daily net assets of an investment portfolio)
<TABLE>
<CAPTION>
Other Expenses
(after expense
reimbursement for Total Annual
Management certain Portfolios) Portfolio
Fees Expenses
----------- ------------------- -------------
<S> <C> <C> <C>
AIM VARIABLE INSURANCE FUNDS
Managed by A I M Advisors, Inc.
AIM V.I. Capital Appreciation .62% .11% .73%
AIM V.I. International Equity .75% .22% .97%
AIM V.I. Value .61% .15% .76%
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
Managed by Alliance Capital Management L.P.
Premier Growth 1.00% .05% 1.05%
Real Estate Investment (a) .49% .46% .95%
COVA SERIES TRUST(b)
Managed by J.P. Morgan Investment Management Inc.
Select Equity .67% .10% .77%
Small Cap Stock .85% .19% 1.04%
International Equity .79% .31% 1.10%
Quality Bond .54% .10% .64%
Large Cap Stock .65% .10% .75%
Managed by Lord, Abbett & Co.
Bond Debenture .75% .10% .85%
Mid-Cap Value 1.00% .30% 1.30%
Large Cap Research 1.00% .30% 1.30%
Developing Growth .90% .30% 1.20%
Lord Abbett Growth and Income(c) .65% .05% .70%
GENERAL AMERICAN CAPITAL COMPANY
Managed by Conning Asset
Management Company
Money Market .125% .08% .205%
GOLDMAN SACHS VARIABLE INSURANCE TRUST (d)
Managed by Goldman Sachs Asset Management
Goldman Sachs VIT Growth and Income Fund .75% .25% 1.00%
Managed By Goldman Sachs Asset Management
International
Goldman Sachs VIT International Equity Fund 1.00% .35% 1.35%
Goldman Sachs VIT Global Income Fund .90% .25% 1.15%
KEMPER VARIABLE SERIES
Managed by Scudder Kemper Investments, Inc.
Kemper Small Cap Value (e) .75% .09% .84%
Kemper Government Securities .55% .08% .63%
Kemper Small Cap Growth .65% .06% .71%
Managed by Dreman Value Management, L.L.C.
Kemper-Dreman High Return Equity (f) .75% .11% .86%
LIBERTY VARIABLE INVESTMENT TRUST
Managed by Newport Fund Management Inc.
Newport Tiger Fund, Variable Series .90% .31% 1.21%
MFS VARIABLE INSURANCE TRUST(g)
Managed by Massachusetts Financial Services Company
MFS Emerging Growth .75% .09% .84%
MFS Research .75% .11% .86%
MFS Growth With Income .75% .13% .88%
MFS High Income (h) .75% .16% .91%
MFS Global Governments (h) .75% .16% .91%
MFS Bond (h) .60% .16% .76%
OPPENHEIMER VARIABLE ACCOUNT FUNDS
Managed by OppenheimerFunds, Inc.
Oppenheimer High Income Fund/VA .74% .01% .75%
Oppenheimer Bond Fund/VA .72% .01% .73%
Oppenheimer Capital Appreciation Fund/VA .68% .02% .70%
Oppenheimer Main Street Growth & Income Fund/VA .73% .05% .78%
Oppenheimer Strategic Bond Fund/VA .74% .04% .78%
PUTNAM VARIABLE TRUST
Managed by Putnam Investment Management, Inc.
Putnam VT Growth and Income Class IA Shares .46% .04% .50%
Putnam VT International Growth Class IA Shares .80% .22% 1.02%
Putnam VT International New Opportunities
Class IA Shares 1.08% .33% 1.41%
Putnam VT New Value Class IA Shares .70% .10% .80%
Putnam VT Vista Class IA Shares .65% .10% .75%
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST, CLASS 1
SHARES
Managed by Franklin Advisers, Inc.
Franklin Large Cap Growth Securities(i) .75% .02% .77%
Franklin Small Cap (j) .55% .27% .82%
Templeton Global Income Securities (k) .60% .05% .65%
Managed by Franklin Mutual Advisers, LLC
Mutual Shares Securities(l) .60% .19% .79%
Managed by Templeton Investment Counsel, Inc.
Templeton Asset Strategy (m) .60% .18% .78%
Templeton International Securities (n) .69% .19% .88%
Managed by Templeton Global Advisors Limited
Templeton Growth Securities (o) .83% .05% .88%
Managed by Templeton Asset Management Ltd.
Templeton Developing Markets Securities (p) 1.25% .31% 1.56%
VARIABLE INSURANCE PRODUCTS FUND
VARIABLE INSURANCE PRODUCTS FUND II
VARIABLE INSURANCE PRODUCTS FUND III
Managed by Fidelity Management &
Research Company
VIP III Growth Opportunities (Initial Class)(q) .58% .11% .69%
VIP Growth (Initial Class)(q) .58% .08% .66%
VIP III Growth & Income (Initial Class)(q) .48% .12% .60%
VIP Equity-Income (Initial Class)(q) .48% .09% .57%
VIP II Contrafund (Initial Class)(q) .58% .09% .67%
</TABLE>
(a) The expenses shown with respect to the Real Estate Investment Portfolio
are net of voluntary reimbursements. Expenses have been capped at .95% annually
and the adviser to the Fund intends to continue such reimbursements for the
foreseeable future. For the year ended December 31, 1999, the expenses for the
Real Estate Investment Portfolio, before reimbursement, were: .90% management
fees and .82% for other expenses.
(b) Cova reimburses the investment portfolios, except the Select Equity,
Small Cap Stock and International Equity Portfolios, for all operating
expenses (exclusive of the management fees) in excess of approximately .30%
for the Mid-Cap Value, Large Cap Research and Developing Growth Portfolios
and in excess of approximately .10% for the other investment portfolios.
Prior to May 1, 1999, Cova had reimbursed expenses in excess of approximately
.10% with respect to the Select Equity, Small Cap Stock, International Equity,
Mid-Cap Value, Large Cap Research and Developing Growth Portfolios. Therefore,
the amounts shown above under "Other Expenses" have been restated to reflect
the estimated expenses for the Select Equity, Small Cap Stock and International
Equity Portfolios for the year ending December 31, 2000. Absent these expense
reimbursement arrangements, the total annual portfolio expenses for the year
ended December 31, 1999 were: 1.09% for the Small Cap Stock Portfolio; 1.15%
for the International Equity Portfolio; .71% for the Quality Bond Portfolio,
.76% for the Large Cap Stock Portfolio, .86% for the Bond Debenture Portfolio,
1.41% for the Mid-Cap Value Portfolio, 1.38% for the Large Cap Research
Portfolio, and 1.34% for the Developing Growth Portfolio.
(c) The Portfolio commenced investment operations on January 8, 1999.
(d) The investment advisers to the Goldman Sachs Growth and Income,
International Equity and Global Income Funds have voluntarily agreed to reduce
or limit certain "Other Expenses" of such Funds (excluding management fees,
taxes, interest, brokerage fees, litigation, indemnification and other
extraordinary expenses) to the extent such expenses exceed 0.25%, 0.35% and
0.25% per annum of such Funds' average daily net assets, respectively. The
expenses shown include this reimbursement. If not included, the "Other Expenses"
and "Total Annual Portfolio Expenses" for the Goldman Sachs Growth and Income,
International Equity and Global Income Funds would be .47% and 1.22%, .77% and
1.77% and 1.78% and 2.68%, respectively. The reductions or limitations may be
discontinued or modified by the investment advisers in their discretion at any
time. The Fund's expenses shown in the fee table are based on estimated expenses
for the fiscal year ending December 31, 2000.
(e) Pursuant to its agreement with Kemper Variable Series, the investment
manager and the accounting agent have agreed, for the one year period commencing
May 1, 2000, to limit their respective fees and to reimburse other operating
expenses to the extent necessary to limit total operating expenses of the
Kemper Small Cap Value Portfolio to .84%. The amounts set forth in the table
above reflect actual expenses for the past fiscal year, which were at or lower
than these expense limits, after the benefit of any custodial credits.
(f) Pursuant to its agreement with Kemper Variable Series, the investment
manager and the accounting agent have agreed, for the one year period commencing
May 1, 2000, to limit their respective fees and to reimburse other operating
expenses to the extent necessary to limit total operating expenses of the
Kemper-Dreman High Return Equity of Kemper Variable Series to .87%. The amounts
set forth in the table above reflect actual expenses for the past fiscal year,
which were at or lower than these expense limits, after the benefit of any
custodial credits.
(g) Each series has an expense offset arrangement which reduces the series'
custodian fee based upon the amount of cash maintained by the series with its
custodian and dividend disbursing agent. Each series may enter into other such
arrangements and directed brokerage arrangements, which would also have the
effect of reducing the series' expenses. The expenses shown in the table above
do not take into account these expense reductions, and are therefore higher than
the actual expenses of the series.
(h) MFS has contractually agreed, subject to reimbursement by these series,
to bear expenses for these series, such that each such series' "Other Expenses"
do not exceed the following percentages of the average daily net assets of the
series during the current fiscal year: 0.15% for the Bond Series, the Global
Governments Series and the High Income Series. The payments made by MFS on
behalf of each series under this arrangement are subject to reimbursement by the
series to MFS, which will be accomplished by the payment of an expense
reimbursement fee by the series to MFS computed and paid monthly at a percentage
of the series' average daily net assets for its then current fiscal year, with a
limitation that immediately after such payment, the series' "Other Expenses"
will not exceed the percentage set forth above for that series. The obligation
of MFS to bear a series' "Other Expenses" pursuant to this arrangement, and the
series' obligation to pay the reimbursement fee to MFS, terminates on the
earlier of the date on which payments made by the series equal the prior payment
of such reimbursable expenses by MFS or December 31, 2004. MFS may, in its
discretion, terminate this arrangement at an earlier date provided that the
arrangement will continue for each series until at least May 1, 2001, unless
terminated with the consent of the board of trustees which oversees the series.
Absent expense reimbursement for certain series, total annual portfolio expenses
for the year ended December 31, 1999 were .97% with respect to the High Income
Series; 1.05% with respect to the Global Governments Series; and 1.06% with
respect to the Bond Series.
(i) On 2/8/00, a merger and reorganization was approved that combined the
fund with a similar fund of Templeton Variable Products Series Fund, effective
5/1/00. The table shows total expenses based on the fund's assets as of
12/31/99, and not the assets of the combined fund. However, if the table
reflected combined assets, the fund's expenses after 5/1/00 would be estimated
as: Management Fees 0.75%, Other Expenses 0.02%, and Total Fund Operating
Expenses 0.77%. Before December 15, 1999, the Fund was known as the Franklin
Capital Growth Fund. The fund administration fee is paid indirectly through the
management fee.
(j) On 2/8/00, a merger and reorganization was approved that combined the
assets of the fund with a similar fund of Templeton Variable Products Series
Fund, effective 5/1/00. On 2/8/00, fund shareholders approved new management
fees, which apply to the combined fund effective 5/1/00. The table shows
restated total expenses based on the new fees and assets of the fund as of
12/31/99, and not the assets of the combined fund. However, if the table
reflected both the new fees and the combined assets, the fund's expenses after
5/1/00 would be estimated as: Management Fees 0.55%, Other Expenses 0.27%, and
Total Fund Operating Expenses 0.82%.
(k) On 2/8/00, a merger and reorganization was approved that combined the
fund with a similar fund of Templeton Variable Products Series Fund, effective
5/1/00. The table shows total expenses based on the fund's assets as of
12/31/99, and not the assets of the combined fund. However, if the table
reflected combined assets, the fund's expenses after 5/1/00 would be estimated
as: Management Fees 0.60%, Other Expenses 0.04%, and Total Fund Operating
Expenses 0.64%. The fund administration fee is paid indirectly through the
management fee.
(l) On 2/8/00, a merger and reorganization was approved that combined the
fund with a similar fund of Templeton Variable Products Series Fund, effective
5/1/00. The table shows total expenses based on the fund's assets as of
12/31/99, and not the assets of the combined fund. However, if the table
reflected combined assets, the fund's expenses after 5/1/00 would be estimated
as: Management Fees 0.60%, Other Expenses 0.19%, and Total Fund Operating
Expenses 0.79%.
(m) On 2/8/00, shareholders approved a merger and reorganization that
combined the fund with the Templeton Global Asset Allocation Fund, effective
5/1/00. The shareholders of that fund had approved new management fees,
which apply to the combined fund effective 5/1/00. The table shows restated
total expenses based on the new fees and the assets of the fund as of
12/31/99, and not the assets of the combined fund. However, if the
table reflected both the new fees and the combined assets, the fund's
expenses after 5/1/00 would be estimated as: Management Fees 0.60%, Other
Expenses 0.14%, and Total Fund Operating Expenses 0.74%.
(n) On 2/8/00, shareholders approved a merger and reorganization
that combined the fund with the Templeton International Equity Fund,
effective 5/1/00. The shareholders of that fund had approved new management
fees, which apply to the combined fund effective 5/1/00. The table shows
restated total expenses based on the new fees and the assets of the fund as
of 12/31/99, and not the assets of the combined fund. However, if the table
reflected both the new fees and the combined assets, the fund's expenses
after 5/1/00 would be estimated as: Management Fees 0.65%, Other Expenses
0.20%, and Total Fund Operating Expenses 0.85%.
(o) On 2/8/00, a merger and reorganization was approved that combined
the fund with a similar fund of Templeton Variable Products Series Fund,
effective 5/1/00. The table shows total expenses based on the fund's assets
as of 12/31/99, and not the assets of the combined fund. However, if the table
reflected combined assets, the fund's expenses after 5/1/00 would be estimated
as: Management Fees 0.80%, Other Expenses 0.05%, and Total Fund Operating
Expenses 0.85%. The fund administration fee is paid indirectly through the
management fee.
(p) On 2/8/00, shareholders approved a merger and reorganization that
combined the fund with the Templeton Developing Markets Equity Fund,
effective 5/1/00. The shareholders of that fund had approved new management
fees, which apply to the combined fund effective 5/1/00. The table shows
restated total expenses based on the new fees and the assets of the fund as of
12/31/99, and not the assets of the combined fund. However, if the table
reflected both the new fees and the combined assets, the fund's expenses
after 5/1/00 would be estimated as: Management Fees 1.25%, Other Expenses
0.29%, and Total Fund Operating Expenses 1.54%.
(q) A portion of the brokerage commissions that certain funds pay was
used to reduce fund expenses. In addition, through arrangements with certain
funds, or FMR on behalf of certain funds', custodian credits realized as
a result of uninvested cash balances were used to reduce a portion of each
applicable fund's expenses. With these reductions, total expenses would have
been: .68% for the Growth Opportunities Portfolio; .65% for the Growth
Portfolio; .59% for the Growth & Income Portfolio; .56% for the
Equity-Income Portfolio; and .65% for the Contrafund Portfolio.
EXAMPLES:
The examples should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.
For purposes of the examples, the assumed average contract size is $30,000.
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return on assets:
(a) if you surrender the contract at the end of each time period;
(b) if you do not surrender the contract or if you apply the contract value
to an annuity option.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Time Periods
1 year 3 years 5 years 10 years
------ ------- ------- --------
AIM VARIABLE INSURANCE FUNDS
Managed by A I M Advisors, Inc.
AIM V.I. Capital Appreciation (a) $72.59 (a) $114.54 (a) $163.94 (a) $254.10
(b) $22.59 (b) $ 69.54 (b) $118.94 (b) $254.10
AIM V.I. International Equity (a) $75.00 (a) $121.77 (a) $176.00 (a) $278.22
(b) $25.00 (b) $ 76.77 (b) $131.00 (b) $278.22
AIM V.I. Value (a) $72.90 (a) $115.45 (a) $165.46 (a) $257.15
(b) $22.90 (b) $ 70.45 (b) $120.46 (b) $257.15
ALLIANCE VARIABLE PRODUCTS SERIES FUND,
INC.
Managed by Alliance Capital
Management L.P.
Premier Growth (a) $75.80 (a) $124.17 (a) $179.99 (a) $286.12
(b) $25.80 (b) $ 79.17 (b) $134.99 (b) $286.12
Real Estate Investment (a) $74.80 (a) $121.17 (a) $175.00 (a) $276.23
(b) $24.80 (b) $ 76.17 (b) $130.00 (b) $276.23
COVA SERIES TRUST
Managed by J.P. Morgan Investment Management Inc.
Select Equity (a) $73.00 (a) $115.75 (a) $165.96 (a) $258.16
(b) $23.00 (b) $ 70.75 (b) $120.96 (b) $258.16
Small Cap Stock (a) $75.70 (a) $123.87 (a) $179.49 (a) $285.14
(b) $25.70 (b) $ 78.87 (b) $134.49 (b) $285.14
International Equity (a) $76.30 (a) $125.66 (a) $182.48 (a) $291.02
(b) $26.30 (b) $ 80.66 (b) $137.48 (b) $291.02
Quality Bond (a) $71.69 (a) $111.82 (a) $159.39 (a) $244.89
(b) $21.69 (b) $ 66.82 (b) $114.38 (b) $244.89
Large Cap Stock (a) $72.80 (a) $115.15 (a) $164.95 (a) $256.13
(b) $22.80 (b) $ 70.15 (b) $119.95 (b) $256.13
Managed by Lord, Abbett & Co.
Bond Debenture (a) $73.80 (a) $118.16 (a) $169.99 (a) $266.24
(b) $23.80 (b) $ 73.16 (b) $124.99 (b) $266.24
Mid-Cap Value (a) $78.30 (a) $131.62 (a) $192.35 (a) $310.37
(b) $28.30 (b) $ 86.62 (b) $147.35 (b) $310.37
Large Cap Research (a) $78.30 (a) $131.62 (a) $192.35 (a) $310.37
(b) $28.30 (b) $ 86.62 (b) $147.35 (b) $310.37
Developing Growth (a) $77.30 (a) $128.65 (a) $187.42 (a) $300.75
(b) $27.30 (b) $ 83.65 (b) $142.42 (b) $300.75
Lord Abbett Growth and Income (a) $72.29 (a) $113.63 (a) $162.42 (a) $251.04
(b) $22.29 (b) $ 68.63 (b) $117.42 (b) $251.04
GENERAL AMERICAN CAPITAL COMPANY
Managed by Conning Asset Management Company
Money Market (a) $67.31 (a) $ 98.54 (a) $137.02 (a) $199.08
(b) $17.31 (b) $ 53.54 (b) $ 92.02 (b) $199.08
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Managed by Goldman Sachs Asset Management
Goldman Sachs VIT Growth and Income Fund (a) $75.30 (a) $122.67 (a) $177.50 (a) $281.19
(b) $25.30 (b) $ 77.67 (b) $132.50 (b) $281.19
Managed by Goldman Sachs Asset Management
International
Goldman Sachs VIT International Equity Fund (a) $ 78.79 (a) $133.11 (a) $194.80 (a) $315.14
(b) $ 28.79 (b) $ 88.11 (b) $149.80 (b) $315.14
Goldman Sachs VIT Global Income Fund (a) $ 76.80 (a) $127.16 (a) $184.95 (a) $295.90
(b) $ 26.80 (b) $ 82.16 (b) $139.95 (b) $295.90
KEMPER VARIABLE SERIES
Managed by Scudder Kemper Investments, Inc.
Kemper Small Cap Value (a)$72.39 (a)$113.94 (a) $162.93 (a) $252.06
(b)$22.39 (b)$ 68.94 (b) $117.93 (b) $252.06
Kemper Government Securities (a)$71.59 (a)$111.51 (a) $158.87 (a) $243.86
(b)$21.59 (b)$ 66.51 (b) $113.87 (b) $243.86
Kemper Small Cap Growth (a)$73.70 (a)$117.86 (a) $169.49 (a) $265.23
(b)$23.70 (b)$ 72.86 (b) $124.49 (b) $265.23
Managed by Dreman Value Management, L.L.C.
Kemper-Dreman High Return Equity (a)$ 73.90 (a)$118.46 (a) $170.49 (a) $267.24
(b)$ 23.90 (b)$ 73.46 (b) $125.49 (b) $267.24
LIBERTY VARIABLE INVESTMENT TRUST
Managed by Newport Fund Management Inc.
Newport Tiger Fund, Variable Series (a)$77.40 (a)$128.94 (a) $187.92 (a) $301.71
(b)$27.40 (b)$ 83.94 (b) $142.92 (b) $301.71
MFS VARIABLE INSURANCE TRUST
Managed by Massachusetts Financial Services Company
MFS Emerging Growth (a) $73.70 (a) $117.86 (a) $169.49 (a) $265.23
(b) $23.70 (b) $ 72.86 (b) $124.49 (b) $265.23
MFS Research (a) $73.90 (a) $118.46 (a) $170.49 (a) $267.24
(b) $23.90 (b) $ 73.46 (b) $125.49 (b) $267.24
MFS Growth with Income (a) $74.10 (a) $119.07 (a) $119.07 (a) $171.50
(b) $24.10 (b) $ 74.07 (b) $126.50 (b) $269.25
MFS High Income (a) $74.40 (a) $119.97 (a) $173.00 (a) $272.25
(b) $24.40 (b) $ 74.97 (b) $128.00 (b) $272.25
MFS Global Governments (a) $74.40 (a) $119.97 (a) $173.00 (a) $272.25
(b) $24.40 (b) $ 74.97 (b) $128.00 (b) $272.25
MFS Bond (a) $72.90 (a) $115.45 (a) $165.46 (a) $257.15
(b) $22.90 (b) $ 70.45 (b) $120.46 (b) $257.15
OPPENHEIMER VARIABLE ACCOUNT FUNDS
Managed by OppenheimerFunds, Inc.
Oppenheimer High Income Fund/VA (a)$72.80 (a)$115.15 (a) $164.95 (a) $256.13
(b)$22.80 (b)$ 70.15 (b) $119.95 (b) $256.13
Oppenheimer Bond Fund/VA (a)$72.59 (a)$114.54 (a) $163.94 (a) $254.10
(b)$22.59 (b)$ 69.54 (b) $118.94 (b) $254.10
Oppenheimer Capital Appreciation Fund/VA (a)$72.29 (a)$113.63 (a) $162.42 (a) $251.04
(b)$22.29 (b)$ 68.63 (b) $117.42 (b) $251.04
Oppenheimer Main Street Growth & Income
Fund/VA (a)$73.10 (a)$116.05 (a) $166.47 (a) $259.18
(b)$23.10 (b)$ 71.05 (b) $121.47 (b) $259.18
Oppenheimer Strategic Bond Fund/VA (a)$73.10 (a)$116.05 (a) $166.47 (a) $259.18
(b)$23.10 (b)$ 71.05 (b) $121.47 (b) $259.18
PUTNAM VARIABLE TRUST
Managed by Putnam Investment Management, Inc.
Putnam VT Growth and Income-Class IA Shares (a)$70.29 (a)$107.56 (a) $153.24 (a) $230.39
(b)$20.29 (b)$ 62.56 (b) $107.24 (b) $230.39
Putnam VT International Growth-Class IA Shares (a)$75.50 (a)$123.27 (a) $178.50 (a) $283.17
(b)$25.50 (b)$ 78.27 (b) $133.50 (b) $283.17
Putnam VT International New Opportunities-
Class IA Shares (a)$79.39 (a)$134.88 (a) $197.73 (a) $320.83
(b)$29.39 (b)$ 89.88 (b) $152.73 (b) $320.83
Putnam VT New Value-Class IA Shares (a)$73.30 (a)$116.65 (a) $167.47 (a) $261.20
(b)$23.30 (b)$ 71.65 (b) $122.47 (b) $261.20
Putnam VT Vista-Class IA Shares (a)$72.80 (a)$115.15 (a) $164.95 (a) $256.13
(b)$22.80 (b)$70.15 (b) $119.95 (b) $256.13
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST,
CLASS 1 SHARES
Managed by Franklin Advisers, Inc.
Franklin Large Cap Growth Securities (a)$73.00 (a)$115.75 (a) $165.96 (a) $258.16
(b)$23.00 (b)$ 70.75 (b) $120.96 (b) $258.16
Franklin Small Cap (a)$73.50 (a)$117.26 (a) $168.48 (a) $263.22
(b)$23.50 (b)$ 72.26 (b) $123.48 (b) $263.22
Templeton Global Income Securities (a)$71.79 (a)$112.12 (a) $159.89 (a) $245.92
(b)$21.79 (b)$ 67.12 (b) $114.89 (b) $245.92
Managed by Franklin Mutual Advisers, LLC
Mutual Shares Securities (a)$73.20 (a)$116.35 (a) $166.97 (a) $260.19
(b)$23.20 (b)$ 71.35 (b) $121.97 (b) $260.19
Managed by Templeton Investment Counsel, Inc.
Templeton Asset Strategy (a)$73.10 (a)$116.05 (a) $166.47 (a) $259.18
(b)$23.10 (b)$ 71.05 (b) $121.47 (b) $259.18
Templeton International Securities (a)$74.10 (a)$119.07 (a) $171.50 (a) $269.25
(b)$24.10 (b)$ 74.07 (b) $126.50 (b) $269.25
Managed by Templeton Global Advisors Limited
Templeton Growth Securities (a)$74.10 (a)$119.07 (a) $171.50 (a) $269.25
(b)$24.10 (b)$ 74.07 (b) $126.50 (b) $269.25
Managed by Templeton Asset Management Ltd.
Templeton Developing Markets Securities (a)$80.89 (a)$139.31 (a) $205.03 (a) $334.89
(b)$30.89 (b)$ 94.31 (b) $160.03 (b) $334.89
VARIABLE INSURANCE PRODUCTS FUND
VARIABLE INSURANCE PRODUCTS FUND II
VARIABLE INSURANCE PRODUCTS FUND III
Managed by Fidelity Management &
Research Company
VIP III Growth Opportunities (a) $72.19 (a) $113.33 (a) $161.92 (a) $250.02
(b) $22.19 (b) $ 68.33 (b) $116.92 (b) $250.02
VIP Growth (a) $71.89 (a) $112.42 (a) $160.39 (a) $246.95
(b) $21.89 (b) $ 67.42 (b) $115.39 (b) $246.95
VIP III Growth & Income (a) $71.29 (a) $110.60 (a) $157.34 (a) $240.77
(b) $21.29 (b) $ 65.60 (b) $112.34 (b) $240.77
VIP Equity-Income (a) $70.99 (a) $109.69 (a) $155.81 (a) $237.67
(b) $20.99 (b) $ 64.69 (b) $110.81 (b) $237.67
VIP II Contrafund (a) $71.99 (a) $112.73 (a) $160.90 (a) $247.97
(b) $21.99 (b) $ 67.73 (b) $115.90 (b) $247.97
</TABLE>
EXPLANATION OF FEE TABLE
1. The withdrawal charge is 5% of the purchase payments you withdraw. After
Cova has had a purchase payment for 5 years, there is no charge by Cova for a
withdrawal of that purchase payment. You may also have to pay income tax and a
tax penalty on any money you take out. After the first year, you can take up to
10% of your total purchase payments each year without a charge from Cova.
2. Cova will not charge you the transfer fee even if there are more than 12
transfers in a year if the transfer is for the Dollar Cost Averaging, Automatic
Rebalancing or Approved Asset Allocation Programs.
3. During the accumulation phase, Cova will not charge the contract
maintenance charge if the value of your contract is $50,000 or more, although,
if you make a complete withdrawal, Cova will charge the contract maintenance
charge.
4. Premium taxes are not reflected. Premium taxes may apply depending on
the state where you live.
There is an accumulation unit value history (Condensed Financial Information)
contained in Appendix A.
THE ANNUITY CONTRACT
This Prospectus describes the Fixed and Variable Annuity Contract offered by
Cova.
An annuity is a contract between you, the owner, and an insurance company (in
this case Cova), where the insurance company promises to pay income to you, in
the form of annuity payments, beginning on a designated date that is at least 30
days in the future. Until you decide to begin receiving annuity payments, your
annuity is in the accumulation phase. Once you begin receiving annuity payments,
your contract switches to the income phase.
The contract benefits from tax deferral. Tax deferral means that you are not
taxed on earnings or appreciation on the assets in your contract until you take
money out of your contract.
The contract is called a variable annuity because you can choose among the
investment portfolios and, depending upon market conditions, you can make or
lose money in any of these portfolios. If you select the variable annuity
portion of the contract, the amount of money you are able to accumulate in your
contract during the accumulation phase depends upon the investment performance
of the investment portfolio(s) you select. The amount of the annuity payments
you receive during the income phase from the variable annuity portion of the
contract also depends, in part, upon the investment performance of the
investment portfolios you select for the income phase.
The contract also contains a fixed account. The fixed account offers an interest
rate that is guaranteed by Cova. Cova guarantees that the interest rate credited
to the fixed account will not be less than 3% per year with respect to contracts
issued on or after May 1, 1996. If you select the fixed account, your money will
be placed with the other general assets of Cova. If you select the fixed
account, the amount of money you are able to accumulate in your contract during
the accumulation phase depends upon the total interest credited to your
contract. The amount of the annuity payments you receive during the income phase
from the fixed account portion of the contract will remain level for the entire
income phase.
As owner of the contract, you exercise all interest and rights under the
contract. You can change the owner at any time by notifying Cova in writing. You
and your spouse can be named joint owners. We have described more information on
this under "Other Information."
ANNUITY PAYMENTS (THE INCOME PHASE)
Annuity Date
Under the contract you can receive regular income payments. You can choose the
month and year in which those payments begin. We call that date the annuity
date. Your annuity date must be the first day of a calendar month.
We ask you to choose your annuity date when you purchase the contract. You can
change it at any time before the annuity date with 30 days notice to us. Your
annuity date cannot be any earlier than one month after you buy the contract.
Annuity Payments
You will receive annuity payments during the income phase. In general, annuity
payments must begin by the annuitant's 85th birthday or 10 years from the date
the contract was issued, whichever is later (this requirement may differ
slightly for special programs). The annuitant is the person whose life we look
to when we make annuity payments.
During the income phase, you have the same investment choices you had just
before the start of the income phase. At the annuity date, you can choose
whether payments will come from the:
* fixed account,
* the investment portfolio(s), or
* a combination of both.
If you don't tell us otherwise, your annuity payments will be based on the
investment allocations that were in place on the annuity date.
If you choose to have any portion of your annuity payments come from the
investment portfolio(s), the dollar amount of your payment will depend upon 3
things:
1) the value of your contract in the investment portfolio(s) on the annuity
date,
2) the 3% assumed investment rate used in the annuity table for the
contract, and
3) the performance of the investment portfolios you selected.
If the actual performance exceeds the 3% assumed investment rate, your annuity
payments will increase. Similarly, if the actual investment rate is less than
3%, your annuity payments will decrease.
Annuity payments are made monthly unless you have less than $5,000 to apply
toward a payment. In that case, Cova may provide your annuity payment in a
single lump sum. Likewise, if your annuity payments would be less than $100 a
month, Cova has the right to change the frequency of payments so that your
annuity payments are at least $100.
Annuity Options
You can choose among income plans. We call those annuity options. We ask you to
choose an annuity option when you purchase the contract. You can change it at
any time before the annuity date within 30 days notice to us. If you do not
choose an annuity option at the time you purchase the contract, we will assume
that you selected Option 2 which provides a life annuity with 10 years of
guaranteed payments.
You can choose one of the following annuity options or any other annuity option
acceptable to Cova. After annuity payments begin, you cannot change the annuity
option.
OPTION 1. LIFE ANNUITY. Under this option, we will make an annuity payment
each month so long as the annuitant is alive. After the annuitant dies, we stop
making annuity payments.
OPTION 2. LIFE ANNUITY WITH 5, 10 OR 20 YEARS GUARANTEED. Under this
option, we will make an annuity payment each month so long as the annuitant is
alive. However, if, when the annuitant dies, we have made annuity payments for
less than the selected guaranteed period, we will then continue to make annuity
payments for the rest of the guaranteed period to the beneficiary. If the
beneficiary does not want to receive annuity payments, he or she can ask us for
a single lump sum.
OPTION 3. JOINT AND LAST SURVIVOR ANNUITY. Under this option, we will make
annuity payments each month so long as the annuitant and a second person are
both alive. When either of these people dies, we will continue to make annuity
payments, so long as the survivor continues to live. The amount of the annuity
payments we will make to the survivor can be equal to 100%, 66 2/3% or 50% of
the amount that we would have paid if both were alive.
PURCHASE
PURCHASE PAYMENTS
A purchase payment is the money you give us to invest in the contract. The
minimum we will accept is $5,000 when the contract is purchased as a
non-qualified contract. If you are purchasing the contract as part of an IRA
(Individual Retirement Annuity), 401(k) or other qualified plan, the minimum we
will accept is $2,000. The maximum purchase payment we accept is $1 million
without our prior approval. You can make additional purchase payments of $500 or
more to either type of contract.
ALLOCATION OF PURCHASE PAYMENTS
When you purchase a contract, we will allocate your purchase payment to the
fixed account and/or one or more of the investment portfolios you have selected.
If you make additional purchase payments, we will allocate them in the same way
as your first purchase payment unless you tell us otherwise. There is a $500
minimum allocation requirement for the fixed account and for each investment
portfolio.
Once we receive your purchase payment and the necessary information, we will
issue your contract and allocate your first purchase payment within 2 business
days. If you do not give us all of the information we need, we will contact you
to get it. If for some reason we are unable to complete this process within 5
business days, we will either send back your money or get your permission to
keep it until we get all of the necessary information. If you add more money to
your contract by making additional purchase payments, we will credit these
amounts to your contract within one business day. Our business day closes when
the New York Stock Exchange closes, usually 4:00 P.M. Eastern time.
Free Look
If you change your mind about owning this contract, you can cancel it within 10
days after receiving it (or, in the state of California, within 30 days if you
are 60 years or older when we issue the contract). When you cancel the contract
within this time period, Cova will not assess a withdrawal charge. You will
receive back whatever your contract is worth on the day we receive your request.
If you have purchased the contract as an IRA, we are required to give you back
your purchase payment if you decide to cancel your contract within 10 days after
receiving it (or whatever period is required). If that is the case, we reserve
the right to put your purchase payment in the Money Market Fund for 15 days
before we allocate your first purchase payment to the investment portfolio(s)
you have selected. In such case, we will refund the greater of purchase payments
(less withdrawals) or contract value. Currently, Cova directly allocates your
purchase payment to the investment portfolios and/or fixed account you
select.
ACCUMULATION UNITS
The value of the variable annuity portion of your contract will go up or down
depending upon the investment performance of the investment portfolio(s) you
choose. In order to keep track of the value of your contract, we use a unit of
measure we call an accumulation unit. (An accumulation unit works like a share
of a mutual fund.) During the income phase of the contract we call the unit an
annuity unit.
Every day we determine the value of an accumulation unit for each of the
investment portfolios. We do this by:
1. determining the total amount of money invested in the particular investment
portfolio;
2. subtracting from that amount any insurance charges and any other charges
such as taxes we have deducted; and
3. dividing this amount by the number of outstanding accumulation units.
The value of an accumulation unit may go up or down from day to day.
When you make a purchase payment, we credit your contract with accumulation
units. The number of accumulation units credited is determined by dividing the
amount of the purchase payment allocated to an investment portfolio by the value
of the accumulation unit for that investment portfolio.
We calculate the value of an accumulation unit for each investment portfolio
after the New York Stock Exchange closes each day and then credit your contract.
EXAMPLE:
On Monday we receive an additional purchase payment of $5,000 from you. You have
told us you want this to go to the Quality Bond Portfolio. When the New York
Stock Exchange closes on that Monday, we determine that the value of an
accumulation unit for the Quality Bond Portfolio is $13.90. We then divide
$5,000 by $13.90 and credit your contract on Monday night with 359.71
accumulation units for the Quality Bond Portfolio.
INVESTMENT OPTIONS
The contract offers __ investment portfolios which are listed below. Additional
investment portfolios may be available in the future.
YOU SHOULD READ THE PROSPECTUSES FOR THESE FUNDS CAREFULLY. Copies of
these prospectuses will be sent to you with your contract. Certain
portfolios contained in the fund prospectuses may not be available with
your contract. (See Appendix B which contains a summary of investment
objectives and strategies for each investment portfolio.)
The investment objectives and policies of certain of the investment portfolios
are similar to the investment objectives and policies of other mutual funds that
certain of the investment advisers manage. Although the objectives and policies
may be similar, the investment results of the investment portfolios may be
higher or lower than the results of such other mutual funds. The investment
advisers cannot guarantee, and make no representation, that the investment
results of similar funds will be comparable even though the funds have the same
investment advisers.
A fund's performance may be affected by risks specific to certain types of
investments, such as foreign securities, derivative investments, non-investment
grade debt securities, initial public offerings (IPOs) or companies with
relatively small market capitalizations. IPOs and other investment techniques
may have a magnified performance impact on a fund with a small asset base. A
fund may not experience similar performance as its assets grow.
AIM VARIABLE INSURANCE FUNDS
AIM Variable Insurance Funds is a management investment company with
multiple portfolios. A I M Advisors, Inc. is the investment adviser to each
portfolio. The following portfolios are available under the contract:
AIM V.I. Capital Appreciation Fund
AIM V.I. International Equity Fund
AIM V.I. Value Fund
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
Alliance Variable Products Series Fund, Inc. is a mutual fund with multiple
portfolios. Alliance Capital Management L.P. is the investment adviser to each
portfolio. The following portfolios are available under the contract:
Premier Growth Portfolio (Class A)
Real Estate Investment Portfolio (Class A)
COVA SERIES TRUST
Cova Series Trust is managed by Cova Investment Advisory Corporation (Cova
Advisory), which is an affiliate of Cova. Cova Series Trust is a mutual fund
with multiple portfolios. Each investment portfolio has a different investment
objective. Cova Advisory has engaged sub-advisers to provide investment advice
for the individual investment portfolios. The following investment portfolios
are available under the contract:
J.P. MORGAN INVESTMENT MANAGEMENT INC. IS THE SUB-ADVISER TO THE FOLLOWING
PORTFOLIOS:
Select Equity Portfolio
Small Cap Stock Portfolio
International Equity Portfolio
Quality Bond Portfolio
Large Cap Stock Portfolio
LORD, ABBETT & CO. IS THE SUB-ADVISER TO THE FOLLOWING PORTFOLIOS:
Bond Debenture Portfolio
Mid-Cap Value Portfolio
Large Cap Research Portfolio
Developing Growth Portfolio
Lord Abbett Growth and Income Portfolio
GENERAL AMERICAN CAPITAL COMPANY
General American Capital Company is a mutual fund with multiple portfolios. Each
portfolio is managed by Conning Asset Management Company. The following
portfolio is available under the contract:
Money Market Fund
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Goldman Sachs Variable Insurance Trust is a mutual fund with multiple
Portfolios. Goldman Sachs Asset Management is the investment adviser for the
Goldman Sachs VIT Growth and Income Fund and Goldman Sachs Asset Management
International is the investment adviser for the Goldman Sachs VIT
International Equity Fund and the Goldman Sachs VIT Global Income Fund. The
following portfolios are available under the contract:
Goldman Sachs VIT Growth and Income Fund
Goldman Sachs VIT International Equity Fund
Goldman Sachs VIT Global Income Fund
KEMPER VARIABLE SERIES
Kemper Variable Series is a mutual fund with multiple portfolios. Scudder Kemper
Investments, Inc. (Scudder Kemper) is the investment manager for the Kemper
Government Securities Portfolio, the Kemper Small Cap Growth Portfolio and the
Kemper Small Cap Value Portfolio. Scudder Kemper, as investment manager, has
retained Dreman Value Management, L.L.C. to serve as sub-adviser for the
Kemper-Dreman High Return Equity Portfolio. The following portfolios are
available under the contract:
Kemper Small Cap Value Portfolio
Kemper Government Securities Portfolio
Kemper Small Cap Growth Portfolio
Kemper-Dreman High Return Equity Portfolio
LIBERTY VARIABLE INVESTMENT TRUST
Liberty Variable Investment Trust is a mutual fund with multiple portfolios.
Liberty Advisory Services Corp. (LASC) is the investment manager to the Trust.
LASC has engaged Newport Fund Management, Inc. as sub-adviser to provide
investment advice for the Newport Tiger Fund, Variable Series. The following
portfolio is available under the contract:
Newport Tiger Fund, Variable Series.
MFS VARIABLE INSURANCE TRUST
MFS Variable Insurance Trust is a mutual fund with multiple portfolios.
Massachusetts Financial Services Company is the investment adviser to each
portfolio. The following portfolios are available under the contract:
MFS Emerging Growth Series
MFS Research Series
MFS Growth With Income Series
MFS High Income Series
MFS Global Governments Series
MFS Bond Series
OPPENHEIMER VARIABLE ACCOUNT FUNDS
Oppenheimer Variable Account Funds is a mutual fund with multiple portfolios.
OppenheimerFunds, Inc. is the investment adviser to each portfolio. The
following portfolios are available under the contract:
Oppenheimer High Income Fund/VA
Oppenheimer Bond Fund/VA
Oppenheimer Capital Appreciation Fund/VA
Oppenheimer Main Street Growth & Income Fund/VA
Oppenheimer Strategic Bond Fund/VA
PUTNAM VARIABLE TRUST
Putnam Variable Trust is a mutual fund with multiple portfolios. Putnam
Investment Management, Inc. is the investment adviser to each portfolio. The
following portfolios are available under the contract:
Putnam VT Growth and Income Fund-Class IA Shares
Putnam VT International Growth Fund-Class IA Shares
Putnam VT International New Opportunities Fund-Class IA Shares
Putnam VT New Value Fund-Class IA Shares
Putnam VT Vista Fund-Class IA Shares (a stock portfolio)
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST
Franklin Templeton Variable Insurance Products Trust is a mutual fund
with multiple portfolios. Effective May 1, 2000, the portfolios of
Templeton Variable Products Series Fund were merged into similar portfolios
of Franklin Templeton Variable Insurance Products Trust. Franklin Templeton
Variable Insurance Products Trust issues two classes of shares - Class 1
and Class 2. Only shares of Class 1 are available under your contract.
Franklin Advisers, Inc. is the investment manager of the Franklin
Large Cap Growth Securities Fund, the Franklin Small Cap Fund and the
Templeton Global Income Securities Fund; Franklin Mutual Advisers, LLC
is the investment manager of the Mutual Shares Securities Fund; Templeton
Investment Counsel, Inc. is the investment manager of the Templeton Asset
Strategy Fund and the Templeton International Securities Fund. Templeton
Global Advisors Limited is the investment manager for the Templeton
Growth Securities Fund; and Templeton Asset Management Ltd. is the
investment manager of the Templeton Developing Markets Securities Fund.
The following portfolios are available under the contract:
Franklin Large Cap Growth Securities Fund (the surviving fund of the
merger with Franklin Large Cap Growth Investments Fund)
Franklin Small Cap Securities Fund (the surviving fund of the merger with
Franklin Small Cap Investments Fund)
Mutual Shares Securities Fund (the surviving fund of the merger with
Mutual Shares Investments Fund)
Templeton Asset Strategy Fund (formerly, Templeton Asset Allocation Fund)
Templeton Global Income Securities Fund (the surviving fund of the merger
with Templeton Bond Fund)
Templeton International Securities Fund (formerly, Templeton
International Fund)
Templeton Growth Securities Fund (the surviving fund of the merger with
Templeton Stock Fund)
Templeton Developing Markets Securities Fund (formerly, Templeton
Developing Markets Fund)
VARIABLE INSURANCE PRODUCTS FUND
VARIABLE INSURANCE PRODUCTS FUND II
VARIABLE INSURANCE PRODUCTS FUND III
Variable Insurance Products Fund, Variable Insurance Products Fund II and
Variable Insurance Products Fund III are each a mutual fund with multiple
portfolios managed by Fidelity Management & Research Company. The following
portfolios are available under the contract:
Variable Insurance Products Fund:
VIP Growth Portfolio
VIP Equity-Income Portfolio
Variable Insurance Products Fund II:
VIP II Contrafund Portfolio
Variable Insurance Products Fund III:
VIP III Growth Opportunities Portfolio
VIP III Growth & Income Portfolio
Shares of the investment portfolios may be offered in connection with certain
variable annuity contracts and variable life insurance policies of various life
insurance companies which may or may not be affiliated with Cova. Certain
investment portfolios may also be sold directly to qualified plans. The funds
believe that offering their shares in this manner will be not disadvantageous to
you.
Cova may enter into certain arrangements under which it is reimbursed by the
investment portfolios' advisers, distributors and/or affiliates for the
administrative services which it provides to the portfolios.
TRANSFERS
You can transfer money among the fixed account and the investment portfolios.
Cova has reserved the right during the year to terminate or modify the transfer
provisions described below.
TELEPHONE TRANSFERS. You and/or your registered representative on your behalf
can make transfers by telephone. Telephone transfers will be automatically
permitted unless you tell us otherwise. If you own the contract with a joint
owner, unless Cova is instructed otherwise, Cova will accept instructions from
either you or the other owner. Cova will use reasonable procedures to confirm
that instructions given us by telephone are genuine. If Cova fails to use such
procedures, we may be liable for any losses due to unauthorized or fraudulent
instructions. Cova tape records all telephone instructions.
TRANSFERS DURING THE ACCUMULATION PHASE. You can make 12 transfers every year
during the accumulation phase without charge. We measure a year from the
anniversary of the day we issued your Contract. You can make a transfer to or
from the fixed account and to or from any investment portfolio. If you make more
than 12 transfers in a year, there is a transfer fee deducted. The following
apply to any transfer during the accumulation phase:
1. The minimum amount which you can transfer is $500 or your entire value
in the investment portfolio or fixed account.
2. Your request for transfer must clearly state which investment
portfolio(s) or the fixed account are involved in the transfer.
3. Your request for transfer must clearly state how much the transfer is
for.
4. You cannot make any transfers within 7 calendar days of the annuity
date.
TRANSFERS DURING THE INCOME PHASE. You can only make transfers between the
investment portfolios once each year. We measure a year from the anniversary of
the day we issued your contract. You cannot transfer from the fixed account to
an investment portfolio, but you can transfer from one or more investment
portfolios to the fixed account at any time.
DOLLAR COST AVERAGING PROGRAM
The Dollar Cost Averaging Program allows you to systematically transfer a set
amount each month from the Money Market Fund or the fixed account to any of the
other investment portfolio(s). By allocating amounts on a regular schedule as
opposed to allocating the total amount at one particular time, you may be less
susceptible to the impact of market fluctuations. The Dollar Cost Averaging
Program is available only during the accumulation phase.
The minimum amount which can be transferred each month is $500. You must have at
least $6,000 in the Money Market Fund or the fixed account, (or the amount
required to complete your program, if less) in order to participate in the
Dollar Cost Averaging Program. Currently, Cova does not charge for participating
in the Dollar Cost Averaging Program. Cova will waive the minimum transfer
amount and the minimum amount required to establish dollar cost averaging if you
establish dollar cost averaging for 6 or 12 months at the time you buy the
contract.
Cova reserves the right to modify, terminate or suspend the Dollar Cost
Averaging Program.
If you participate in the Dollar Cost Averaging Program, the transfers made
under the program are not taken into account in determining any transfer fee.
Cova may, from time to time, offer other dollar cost averaging programs which
may have terms different from those described above.
AUTOMATIC REBALANCING PROGRAM
Once your money has been allocated to the investment portfolios, the performance
of each portfolio may cause your allocation to shift. You can direct us to
automatically rebalance your contract to return to your original percentage
allocations by selecting our Automatic Rebalancing Program. You can tell us
whether to rebalance quarterly, semi-annually or annually. We will measure these
periods from the anniversary of the date we issued your contract. The transfer
date will be the 1st day after the end of the period you selected.
The Automatic Rebalancing Program is available only during the accumulation
phase. Currently, Cova does not charge for participating in the Automatic
Rebalancing Program. If you participate in the Automatic Rebalancing Program,
the transfers made under the program are not taken into account in determining
any transfer fee.
EXAMPLE:
Assume that you want your initial purchase payment split between 2 investment
portfolios. You want 40% to be in the Quality Bond Portfolio and 60% to be in
the Select Equity Portfolio. Over the next 21 2 months the bond market does very
well while the stock market performs poorly. At the end of the first quarter,
the Quality Bond Portfolio now represents 50% of your holdings because of its
increase in value. If you have chosen to have your holdings rebalanced
quarterly, on the first day of the next quarter, Cova will sell some of your
units in the Quality Bond Portfolio to bring its value back to 40% and use the
money to buy more units in the Select Equity Portfolio to increase those
holdings to 60%.
APPROVED ASSET ALLOCATION PROGRAMS
Cova recognizes the value to certain owners of having available, on a continuous
basis, advice for the allocation of your money among the investment options
available under the contracts. Certain providers of these types of services have
agreed to provide such services to owners in accordance with Cova's
administrative rules regarding such programs.
Cova has made no independent investigation of these programs. Cova has only
established that these programs are compatible with our administrative systems
and rules. Approved asset allocation programs are only available during the
accumulation phase. Currently, Cova does not charge for participating in an
approved asset allocation program.
Even though Cova permits the use of approved asset allocation programs, the
contract was not designed for professional market timing organizations. Repeated
patterns of frequent transfers are disruptive to the operations of the
investment portfolios, and when Cova becomes aware of such disruptive practices,
we may modify the transfer provisions of the contract.
If you participate in an Approved Asset Allocation Program, the transfers made
under the program are not taken into account in determining any transfer fee.
VOTING RIGHTS
Cova is the legal owner of the investment portfolio shares. However, Cova
believes that when an investment portfolio solicits proxies in conjunction with
a vote of shareholders, it is required to obtain from you and other affected
owners instructions as to how to vote those shares. When we receive those
instructions, we will vote all of the shares we own in proportion to those
instructions. This will also include any shares that Cova owns on its own
behalf. Should Cova determine that it is no longer required to comply with the
above, we will vote the shares in our own right.
SUBSTITUTION
Cova may be required to substitute one of the investment portfolios you have
selected with another portfolio. We would not do this without the prior approval
of the Securities and Exchange Commission. We will give you notice of our intent
to do this.
EXPENSES
There are charges and other expenses associated with the contracts that reduce
the return on your investment in the contract. These charges and expenses are:
INSURANCE CHARGES
Each day, Cova makes a deduction for its insurance charges. Cova does this as
part of its calculation of the value of the accumulation units and the annuity
units. The insurance charge has two parts:
1) the mortality and expense risk premium, and
2) the administrative expense charge.
MORTALITY AND EXPENSE RISK PREMIUM. This charge is equivalent, on an annual
basis, to 1.25% of the daily value of the contracts invested in an investment
portfolio, after fund expenses have been deducted. This charge is for the
insurance benefits e.g., guarantee of annuity rates, the death benefits, for
certain expenses of the contract, and for assuming the risk (expense risk) that
the current charges will be sufficient in the future to cover the cost of
administering the contract. If the charges under the contract are not
sufficient, then Cova will bear the loss. Cova does, however, expect to profit
from this charge. The mortality and expense risk premium cannot be increased.
Cova may use any profits we make from this charge to pay for the costs of
distributing the contract.
ADMINISTRATIVE EXPENSE CHARGE. This charge is equal, on an annual basis, to
.15% of the daily value of the contracts invested in an investment portfolio,
after fund expenses have been deducted. This charge, together with the contract
maintenance charge (see below), is for the expenses associated with the
administration of the contract. Some of these expenses are: preparation of the
contract, confirmations, annual reports and statements, maintenance of contract
records, personnel costs, legal and accounting fees, filing fees, and computer
and systems costs. Because this charge is taken out of every unit value, you may
pay more in administrative costs than those that are associated solely with your
contract. Cova does not intend to profit from this charge. However, if this
charge and the contract maintenance charge are not enough to cover the costs of
the contracts in the future, Cova will bear the loss.
CONTRACT MAINTENANCE CHARGE
During the accumulation phase, every year on the anniversary of the date when
your contract was issued, Cova deducts $30 from your contract as a contract
maintenance charge. This charge is for administrative expenses (see above). This
charge cannot be increased.
Cova will not deduct this charge during the accumulation phase if, when the
deduction is to be made, the value of your contract is $50,000 or more. Cova may
some time in the future discontinue this practice and deduct the charge.
If you make a complete withdrawal from your contract, the contract maintenance
charge will also be deducted. A pro rata portion of the charge will be deducted
if the annuity date is other than an anniversary. After the annuity date, the
charge will be collected monthly out of the annuity payment.
WITHDRAWAL CHARGE
During the accumulation phase, you can make withdrawals from your contract. Cova
keeps track of each purchase payment. Once a year after the first year (and once
a year during the first year for purposes of payment of charitable remainder
trust administration fees), you can withdraw up to 10% of your total purchase
payments and no withdrawal charge will be assessed on the 10%, if on the day you
make your withdrawal the value of your contract is $5,000 or more. Withdrawals
for purposes of payment of charitable remainder trust administration fees are
included in the 10% free withdrawal amount. Otherwise, the charge is 5% of each
purchase payment you take out unless the purchase payment was made more than 5
years ago. After Cova has had a purchase payment for 5 years, there is no charge
when you withdraw that purchase payment. Cova does not assess a withdrawal
charge on earnings withdrawn from the contract. Earnings are defined as the
value in your contract minus the remaining purchase payments in your contract.
The withdrawal order for calculating the withdrawal charge is shown below.
* 10% of purchase payments free.
* Remaining purchase payments that are over 5 years old and are not subject
to a withdrawal charge.
* Earnings in the contract free.
* Remaining purchase payments that are less than 5 years old and are subject
to a withdrawal charge.
For purposes of calculating the withdrawal charge, slightly different rules may
apply to Section 1035 exchanges.
When the withdrawal is for only part of the value of your contract, the
withdrawal charge is deducted from the remaining value in your contract.
Cova does not assess the withdrawal charge on any payments paid out as annuity
payments or as death benefits.
NOTE: For tax purposes, earnings are considered to come out first.
REDUCTION OR ELIMINATION OF THE WITHDRAWAL CHARGE
General:
Cova will reduce or eliminate the amount of the withdrawal charge when the
contract is sold under circumstances which reduce its sales expense. Some
examples are: if there is a large group of individuals that will be purchasing
the contract or a prospective purchaser already had a relationship with Cova.
Cova will not deduct a withdrawal charge under a contract issued to an officer,
director or employee of Cova or any of its affiliates.
Nursing Home Waiver:
After you have owned the contract for one year, if you, or your joint owner,
becomes confined to a nursing home or hospital for at least 90 consecutive days
under a doctor's care and you need part or all of the money from your contract,
Cova will not impose a withdrawal charge. You or your joint owner cannot have
been so confined when you purchased your contract (confinement must begin after
the first contract anniversary) if you want to take advantage of this provision.
This is called the Nursing Home Waiver.
PREMIUM TAXES
Some states and other governmental entities (e.g., municipalities) charge
premium taxes or similar taxes. Cova is responsible for the payment of these
taxes and will make a deduction from the value of the contract for them. Some of
these taxes are due when the contract is issued, others are due when annuity
payments begin. It is Cova's current practice to not charge anyone for these
taxes until annuity payments begin. Cova may some time in the future discontinue
this practice and assess the charge when the tax is due. Premium taxes generally
range from 0% to 4%, depending on the state.
TRANSFER FEE
You can make 12 free transfers every year. We measure a year from the day we
issue your contract. If you make more than 12 transfers a year, we will deduct a
transfer fee of $25 or 2% of the amount that is transferred whichever is less.
If the transfer is part of the Dollar Cost Averaging Program, the Automatic
Rebalancing Program or an Approved Asset Allocation Program, it will not count
in determining the transfer fee.
INCOME TAXES
Cova will deduct from the contract for any income taxes which it incurs because
of the contract. At the present time, we are not making any such deductions.
INVESTMENT PORTFOLIO EXPENSES
There are deductions from and expenses paid out of the assets of the various
investment portfolios, which are described in the attached fund prospectuses.
TAXES
NOTE: Cova has prepared the following information on taxes as a general
discussion of the subject. It is not intended as tax advice to any individual.
You should consult your own tax adviser about your own circumstances. Cova has
included an additional discussion regarding taxes in the Statement of
Additional Information.
ANNUITY CONTRACTS IN GENERAL
Annuity contracts are a means of setting aside money for future needs - usually
retirement. Congress recognized how important saving for retirement was and
provided special rules in the Internal Revenue Code (Code) for annuities.
Simply stated these rules provide that you will not be taxed on the earnings on
the money held in your annuity contract until you take the money out. This is
referred to as tax deferral. There are different rules as to how you will be
taxed depending on how you take the money out and the type of contract -
qualified or non-qualified (see following sections).
You, as the owner, will not be taxed on increases in the value of your contract
until a distribution occurs - either as a withdrawal or as annuity payments.
When you make a withdrawal you are taxed on the amount of the withdrawal that is
earnings. For annuity payments, different rules apply. A portion of each annuity
payment is treated as a partial return of your purchase payments and will not be
taxed. The remaining portion of the annuity payment will be treated as ordinary
income. How the annuity payment is divided between taxable and non-taxable
portions depends upon the period over which the annuity payments are expected to
be made. Annuity payments received after you have received all of your purchase
payments are fully includible in income.
When a non-qualified contract is owned by a non-natural person (e.g.,corporation
or certain other entities other than a trust holding the contract as an agent
for a natural person), the contract will generally not be treated as an annuity
for tax purposes.
QUALIFIED AND NON-QUALIFIED CONTRACTS
If you purchase the contract as an individual and not under any pension plan,
specially sponsored program or an individual retirement annuity, your contract
is referred to as a non-qualified contract.
If you purchase the contract under a pension plan, specially sponsored program,
or an individual retirement annuity, your contract is referred to as a qualified
contract. Examples of qualified plans are: Individual Retirement Annuities
(IRAs), Tax-Sheltered Annuities (sometimes referred to as 403(b) contracts),
and pension and profit plans, which include 401(k) plans and H.R. 10 plans.
A qualified contract will not provide any necessary or additional tax deferral
if it is used to fund a qualified plan that is tax deferred. However, the
contract has features and benefits other than tax deferral that may make it an
appropriate investment for a qualified plan. You should consult your tax
adviser regarding these features and benefits prior to purchasing a qualified
contract.
WITHDRAWALS - NON-QUALIFIED CONTRACTS
If you make a withdrawal from your contract, the Code treats such a withdrawal
as first coming from earnings and then from your purchase payments. Such
withdrawn earnings are includible in income.
The Code also provides that any amount received under an annuity contract which
is included in income may be subject to a penalty. The amount of the penalty is
equal to 10% of the amount that is includible in income. Some withdrawals will
be exempt from the penalty. They include any amounts:
(1) paid on or after the taxpayer reaches age 59 1/2;
(2) paid after you die;
(3) paid if the taxpayer becomes totally disabled (as that term is defined
in the Code);
(4) paid in a series of substantially equal payments made annually (or more
frequently) for life or a period not exceeding life expectancy;
(5) paid under an immediate annuity; or
(6) which come from purchase payments made prior to August 14, 1982.
WITHDRAWALS - QUALIFIED CONTRACTS
If you make a withdrawal from your qualified contract, a portion of the
withdrawal is treated as taxable income. This portion depends on the ratio of
pre-tax purchase payments to the after-tax purchase payments in your contract.
If all of your purchase payments were made with pre-tax money then the full
amount of any withdrawal is includible in taxable income. Special rules may
apply to withdrawals from certain types of qualified contracts.
The Code also provides that any amount received under a qualified contract
which is included in income may be subject to a penalty. The amount of the
penalty is equal to 10% of the amount that is includible in income. Some
withdrawals will be exempt from the penalty. They include any amounts:
(1) paid on or after you reach age 59 1/2;
(2) paid after you die;
(3) paid if you become totally disabled (as that term is defined in the
Code);
(4) paid to you after leaving your employment in a series of substantially
equal periodic payments made annually (or more frequently) under a
lifetime annuity;
(5) paid to you after you have attained age 55 and you have left your
employment;
(6) paid for certain allowable medical expenses (as defined in the Code);
(7) paid pursuant to a qualified domestic relations order;
(8) paid on account of an IRS levy upon the qualified contract;
(9) paid from an IRA for medical insurance (as defined in the Code);
(10) paid from an IRA for qualified higher education expenses; or
(11) paid from an IRA for up to $10,000 for qualified first-time homebuyer
expenses (as defined in the Code).
The exceptions in (5) and (7) above do not apply to IRAs. The exception in
(4) above applies to IRAs but without the requirement of leaving employment.
We have provided a more complete discussion in the Statement of Additional
Information.
WITHDRAWALS - TAX-SHELTERED ANNUITIES
The Code limits the withdrawal of amounts attributable to purchase payments made
under a salary reduction agreement by owners from Tax-Sheltered Annuities.
Withdrawals can only be made when an owner:
(1) reaches age 59 1/2;
(2) leaves his/her job;
(3) dies;
(4) becomes disabled (as that term is defined in the Code); or
(5) in the case of hardship.
However, in the case of hardship, the owner can only withdraw the purchase
payments and not any earnings.
DIVERSIFICATION
The Code provides that the underlying investments for a variable annuity must
satisfy certain diversification requirements in order to be treated as an
annuity contract. Cova believes that the investment portfolios are being managed
so as to comply with the requirements.
Neither the Code nor the Internal Revenue Service Regulations issued to date
provide guidance as to the circumstances under which you, because of the degree
of control you exercise over the underlying investments, and not Cova would be
considered the owner of the shares of the investment portfolios. If you are
considered the owner of the shares, it will result in the loss of the favorable
tax treatment for the contract. It is unknown to what extent owners are
permitted to select investment portfolios, to make transfers among the
investment portfolios or the number and type of investment portfolios owners may
select from without being considered the owner of the shares. If any guidance is
provided which is considered a new position, then the guidance would generally
be applied prospectively. However, if such guidance is considered not to be a
new position, it may be applied retroactively. This would mean that you, as the
owner of the contract, could be treated as the owner of the shares of the
investment portfolios.
Due to the uncertainty in this area, Cova reserves the right to modify the
contract in an attempt to maintain favorable tax treatment.
ACCESS TO YOUR MONEY
You can have access to the money in your contract:
(1) by making a withdrawal (either a partial or a complete withdrawal);
(2) by electing to receive annuity payments; or
(3) when a death benefit is paid to your beneficiary.
Under most circumstances, withdrawals can only be made during the accumulation
phase.
When you make a complete withdrawal you will receive the withdrawal value of the
contract. The withdrawal value of the contract is the value of the contract at
the end of the business day when Cova receives a written request for a
withdrawal.
* less any applicable withdrawal charge,
* less any premium tax, and
* less any contract maintenance charge.
Unless you instruct Cova otherwise, any partial withdrawal will be made pro rata
from all the investment portfolios and the fixed account you selected. Under
most circumstances the amount of any partial withdrawal must be for at least
$500. Cova requires that after a withdrawal is made you keep at least
$500 in any selected investment portfolio.
When you make a withdrawal, the amount of the death benefit may be reduced. See
"Death Benefits."
There are limits to the amount you can withdraw from a qualified plan referred
to as a 403(b) plan. For a more complete explanation see "Taxes" and the
discussion in the Statement of Additional Information.
INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY WITHDRAWAL
YOU MAKE.
SYSTEMATIC WITHDRAWAL PROGRAM
You may use the Systematic Withdrawal Program. This program provides an
automatic monthly payment to you of up to 10% of your total purchase payments
each year. No withdrawal charge will be made for these payments. Cova does not
have any charge for this program, but reserves the right to charge in the
future. If you use this program, you may not also make a single 10% free
withdrawal. For a discussion of the withdrawal charge and the 10% free
withdrawal, see "Expenses."
INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO SYSTEMATIC
WITHDRAWALS.
SUSPENSION OF PAYMENTS OR TRANSFERS
Cova may be required to suspend or postpone payments for withdrawals or
transfers for any period when:
1. the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of shares of the
investment portfolios is not reasonably practicable or Cova cannot reasonably
value the shares of the investment portfolios;
4. during any other period when the Securities and Exchange Commission, by
order, so permits for the protection of owners.
Cova has reserved the right to defer payment for a withdrawal or transfer from
the fixed account for the period permitted by law but not for more than six
months.
PERFORMANCE
Cova periodically advertises performance of the various investment portfolios.
Cova will calculate performance by determining the percentage change in the
value of an accumulation unit by dividing the increase (decrease) for that unit
by the value of the accumulation unit at the beginning of the period. This
performance number reflects the deduction of the insurance charges. It does not
reflect the deduction of any applicable contract maintenance charge and
withdrawal charge. The deduction of any applicable contract maintenance charge
and withdrawal charges would reduce the percentage increase or make greater any
percentage decrease. Any advertisement will also include total return figures
which reflect the deduction of the insurance charges, contract maintenance
charges, and withdrawal charges.
For periods starting prior to the date the contracts were first offered, the
performance will be based on the historical performance of the corresponding
investment portfolios for the periods commencing from the date on which the
particular investment portfolio was made available through the Separate Account.
In addition, for certain investment portfolios performance may be shown for the
period commencing from the inception date of the investment portfolio. These
figures should not be interpreted to reflect actual historical performance of
the Separate Account.
Cova may, from time to time, include in its advertising and sales materials, tax
deferred compounding charts and other hypothetical illustrations, which may
include comparisons of currently taxable and tax deferred investment programs,
based on selected tax brackets.
Appendix C contains performance information that you may find informative. It is
divided into various parts, depending upon the type of performance information
shown. Future performance will vary and the results shown are not necessarily
representative of future results.
DEATH BENEFIT
UPON YOUR DEATH
If you die before annuity payments begin, Cova will pay a death benefit to your
beneficiary (see below). If you have a joint owner, the death benefit will be
paid when the first of you dies. Joint owners must be spouses. The surviving
joint owner will be treated as the beneficiary.
Beginning May 1, 1999, at the time you buy the contract, you can select Death
Benefit Option B or E. If you do not choose an option on the forms provided by
Cova, Option E will be your death benefit. If, at the time you buy the contract,
the endorsement for Death Benefit Option E is not approved in your state, you
can select Death Benefit Option A or B. If you do not choose an option on the
forms provided by Cova, Option A will be your death benefit.
If you bought your contract before May 1, 1998, you were given the opportunity
to choose Death Benefit Option B or C on your next contract anniversary after
May 1, 1998 (or during a 60 day period after both options were approved in your
state). If you did not make an election during such time period, your death
benefit was automatically enhanced to Death Benefit Option B. If on May 1, 1998,
you or your joint owner were 80 or older, you were unaffected by the changes in
the death benefits and Option D continues to be your death benefit.
From May 1, 1998 to April 30, 1999, at the time you bought the contract, you
were given the opportunity to select Death Benefit Option A or B. If you did not
choose an option on the forms provided by Cova, Option A is your death benefit.
The death benefits are described below. If you have a joint owner, the death
benefit is determined based on the age of the oldest joint owner and the death
benefit is payable on the death of the first joint owner.
DEATH BENEFIT OPTION A:
Prior to you, or your joint owner, reaching age 80, the death benefit will be
the greatest of:
1. Total purchase payments, less any withdrawals (and any withdrawal
charges paid on the withdrawals); or
2. The value of your contract at the time the death benefit is to be paid;
or
3. The greatest adjusted contract value (GACV) (as explained below).
The GACV is evaluated at each contract anniversary prior to the date of your or
your joint owner's death, and on each day a purchase payment or withdrawal is
made. On the contract anniversary, if the current contract value is greater than
the GACV, the GACV will be increased to the current value of your contract. If a
purchase payment is made, the amount of the purchase payment will increase the
GACV. If a withdrawal is made, the GACV will be reduced by the amount withdrawn
(and any associated withdrawal charges) divided by the value of your contract
immediately before the withdrawal multiplied by the GACV immediately prior to
the withdrawal. The following example describes the effect of a withdrawal on
the GACV:
Example:
Assumed facts for example:
$10,000 current GACV
$ 8,000 contract value
$ 2,100 partial withdrawal ($ 2,000 withdrawal + $100 withdrawal
charge)
New GACV = $10,000 - [($2,100/$8,000) X $10,000]
which results in the current GACV of $10,000 being reduced by $2,625
The new GACV is $7,375.
After you, or your joint owner, reaches age 80, the death benefit will be the
greatest of:
1. Total purchase payments made, less any withdrawals (and any withdrawal
charges paid on the withdrawals); or
2. The value of your contract at the time the death benefit is to be paid;
or
3. The greatest adjusted contract value (GACV) (as explained below).
The GACV is evaluated at each contract anniversary on or before your, or your
joint owner's, 80th birthday, and on each day a purchase payment or withdrawal
is made. On the contract anniversary on or before your, or your joint owner's,
80th birthday, if the current contract value is greater than the GACV, the GACV
will be increased to the current value of your contract. If a purchase payment
is made, the amount of the purchase payment will increase the GACV. If a
withdrawal is made, the example above explains the effect of a withdrawal on the
GACV.
DEATH BENEFIT OPTION B:
Prior to you, or your joint owner, reaching age 80, the death benefit will be
the greatest of:
1. Total purchase payments, less any withdrawals (and any withdrawal
charges paid on the withdrawals) accumulated at an annual rate of 4% until the
date of death; or
2. The value of your contract at the time the death benefit is to be paid;
or
3. The greatest of the values of your contract resulting from taking the
contract value on any five (5) year contract anniversary prior to your, or your
joint owner's death; plus any payments you made subsequent to that contract
anniversary, less any withdrawals (and any withdrawal charges paid on the
withdrawals) subsequent to that contract anniversary.
After you, or your joint owner, reaches age 80, the death benefit will be the
greatest of:
1. Total purchase payments made on or before your, or your joint owner's,
80th birthday, less any withdrawals (and any withdrawal charges paid on the
withdrawals) accumulated at an annual rate of 4% until you, or your joint owner,
reach age 80, plus any subsequent purchase payments, less any subsequent
withdrawals (and any withdrawal charges paid on the withdrawals); or
2. The value of your contract at the time the death benefit is to be paid;
or
3. The greatest of the values of the contract resulting from taking the
contract value on any prior five (5) year contract anniversary on or before your
or your joint owner's 80th birthday, plus any purchase payments made after that
contract anniversary, less any withdrawals (and any withdrawal charges paid on
the withdrawals) made after that contract anniversary.
DEATH BENEFIT OPTION C:
Prior to you, or your joint owner, reaching age 80, the death benefit will be
the greatest of:
1. Total purchase payments, less any withdrawals (and any withdrawal
charges paid on the withdrawals); or
2. The value of your contract at the time the death benefit is to be paid;
or
3. The greatest adjusted contract value (GACV) (as explained below).
The GACV is initially the death benefit determined as of the day Cova receives
notice that you have elected this death benefit option. This figure is based on
your existing death benefit as defined in your contract, Option D (not as
defined in the endorsement for this option). The GACV is then evaluated at each
subsequent contract anniversary prior to your or your joint owner's death and on
each subsequent day a purchase payment or withdrawal is made. On the contract
anniversary, if the current contract value is greater than the GACV, the GACV
will be increased to the current value of your contract. If a purchase payment
is made, the amount of the purchase payment will increase the GACV. If a
withdrawal is made, the GACV will be reduced by the amount withdrawn (and any
associated withdrawal charges) divided by the value of your contract immediately
before the withdrawal multiplied by the GACV immediately prior to the
withdrawal. The example above under Death Benefit Option A explains the effect
of a withdrawal on the GACV under this death benefit option.
After you, or your joint owner, reaches age 80, the death benefit will be the
greatest of:
1. Total purchase payments made, less any withdrawals (and any withdrawal
charges paid on the withdrawals); or
2. The value of your contract at the time the death benefit is to be paid;
or
3. The greatest adjusted contract value (GACV) (as explained below).
The GACV is initially the death benefit determined as of the day Cova receives
notice that you have elected this death benefit option. This figure is based on
your existing death benefit as defined in your contract, Option D (not as
defined in the endorsement for this option). The GACV is then evaluated at each
subsequent contract anniversary on or before your, or your joint owner's, 80th
birthday, and on each subsequent day a purchase payment or withdrawal is made.
On the contract anniversary on or before your, or your joint owner's, 80th
birthday, if the current contract value is greater than the GACV, the GACV will
be increased to the current value of your contract. If a purchase payment is
made, the amount of the purchase payment will increase the GACV. If a withdrawal
is made, the GACV will be reduced by the amount withdrawn (and any associated
withdrawal charges) divided by the value of your contract immediately before the
withdrawal, multiplied by the GACV immediately prior to the withdrawal. The
example above under Death Benefit Option A explains the effect of a withdrawal
on the GACV under this death benefit option.
DEATH BENEFIT OPTION D:
Prior to you, or your joint owner, reaching age 80, the death benefit will be
the greater of:
1. Total purchase payments, less any withdrawals (and any withdrawal
charges paid on the withdrawals) accumulated at an annual rate of 4% from the
date your contract was issued until the date of death; or
2. The value of your contract at the time the death benefit is to be paid;
or
3. The value of your contract on the most recent five year anniversary
before the date of death, plus any subsequent purchase payments, less any
withdrawals (and any withdrawal charges paid on the withdrawals).
After you, or your joint owner, reaches age 80, the death benefit will be the
greater of:
1. Total purchase payments, less any withdrawals (and any withdrawal
charges paid on the withdrawals) accumulated at an annual rate of 4% from the
date your contract was issued until you, or your joint owner, reaches age 80,
plus any subsequent purchase payments, less any withdrawals (and any withdrawal
charges paid on the withdrawals); or
2. The value of your contract at the time the death benefit is to be paid;
or
3. The values of your contract on the most recent five year anniversary on
or before you or your joint owner reaches 80, plus any purchase payments, less
any withdrawals (and any withdrawal charges paid on the withdrawals).
DEATH BENEFIT OPTION E:
Prior to you, or your joint owner, reaching age 80, the death benefit will be
the greatest of:
1. Total purchase payments, less any withdrawals (and any withdrawal
charges paid on the withdrawals);
2. The value of your contract at the time the death benefit is to be
paid; or
3. The greatest contract value on any contract anniversary prior to your,
or your joint owner's death; plus any purchase payments you made subsequent to
that contract anniversary, less any withdrawals (and any withdrawal charges paid
on the withdrawals) subsequent to that contract anniversary.
After you, or your joint owner, reaches age 80, the death benefit will be the
greatest of:
1. Total purchase payments, less any withdrawals (and any withdrawal
charges paid on the withdrawals);
2. The value of your contract at the time the death benefit is to be paid;
or
3. The greatest contract value on any prior contract anniversary on or
before your, or your joint owner's 80th birthday; plus any purchase payments you
made after that contract anniversary, less any withdrawals (and any withdrawal
charges paid on the withdrawals) you made after that contract anniversary.
CHECK YOUR CONTRACT AND APPLICABLE ENDORSEMENT FOR YOUR DEATH BENEFIT.
The entire death benefit must be paid within 5 years of the date of death unless
the beneficiary elects to have the death benefit payable under an annuity
option. The death benefit payable under an annuity option must be paid over the
beneficiary's lifetime or for a period not extending beyond the beneficiary's
life expectancy. Payment must begin within one year of the date of death. If the
beneficiary is the spouse of the owner, he/she can continue the contract in
his/her own name at the then current value. If a lump sum payment is elected and
all the necessary requirements are met, the payment will be made within 7 days.
Payment under an annuity option may only be elected during the 60 day period
beginning with the date Cova receives proof of death. If Cova does not receive
an election during such time, it will make a single sum payment to the
beneficiary at the end of the 60 day period.
DEATH OF ANNUITANT
If the annuitant, not an owner or joint owner, dies before annuity payments
begin, you can name a new annuitant. If no annuitant is named within 30 days of
the death of the annuitant, you will become the annuitant. However, if the owner
is a non-natural person (for example, a corporation), then the death or change
of annuitant will be treated as the death of the owner, and a new annuitant may
not be named.
Upon the death of the annuitant after annuity payments begin, the death benefit,
if any, will be as provided for in the annuity option selected.
OTHER INFORMATION
COVA
Cova Financial Life Insurance Company ("Cova") was originally incorporated on
September 6, 1972 as Industrial Indemnity Life Insurance Company, a California
corporation and changed its name to Xerox Financial Life Insurance Company in
1986. On June 1, 1995, a wholly-owned subsidiary of General American Life
Insurance Company purchased Cova which on that date changed its name to Cova
Financial Life Insurance Company. On January 6, 2000, Metropolitan Life
Insurance Company (MetLife) acquired GenAmerica Corporation, the ultimate parent
company of Cova Financial Services Life Insurance Company (Cova Life), the
parent company of Cova. The acquisition of GenAmerica Corporation does not
affect policy benefits or any other terms or conditions under your contract.
MetLife, headquartered in New York City since 1868, is a leading provider of
insurance and financial products and services to individual and group customers.
Cova is presently licensed to do business in the state of California.
THE SEPARATE ACCOUNT
Cova has established a separate account, Cova Variable Annuity Account Five
(Separate Account), to hold the assets that underlie the contracts. The Board of
Directors of Cova adopted a resolution to establish the Separate Account under
California insurance law on March 24, 1992. We have registered the Separate
Account with the Securities and Exchange Commission as a unit investment trust
under the Investment Company Act of 1940. The Separate Account is divided into
sub-accounts.
The assets of the Separate Account are held in Cova's name on behalf of the
Separate Account and legally belong to Cova. However, those assets that underlie
the contracts, are not chargeable with liabilities arising out of any other
business Cova may conduct. All the income, gains and losses (realized or
unrealized) resulting from these assets are credited to or charged against the
contracts and not against any other contracts Cova may issue.
DISTRIBUTOR
Cova Life Sales Company (Life Sales), One Tower Lane, Suite 3000, Oakbrook
Terrace, Illinois 60181-4644, acts as the distributor of the contracts. Life
Sales is an affiliate of Cova.
Commissions will be paid to broker-dealers who sell the contracts.
Broker-dealers will be paid commissions up to 5.5% of purchase payments, but,
under certain circumstances, may be paid an additional .5% commission.
Sometimes, Cova enters into an agreement with the broker-dealer to pay the
broker-dealer persistency bonuses, in addition to the standard commissions.
OWNERSHIP
OWNER. You, as the owner of the contract, have all the interest and rights
under the contract. Prior to the annuity date, the owner is as designated at the
time the contract is issued, unless changed. On and after the annuity date, the
annuitant is the owner (this may be a taxable event). The beneficiary becomes
the owner when a death benefit is payable.
JOINT OWNER. The contract can be owned by joint owners. Any joint owner
must be the spouse of the other owner. Upon the death of either joint owner, the
surviving spouse will be the designated beneficiary. Any other beneficiary
designation at the time the contract was issued or as may have been later
changed will be treated as a contingent beneficiary unless otherwise indicated.
BENEFICIARY
The beneficiary is the person(s) or entity you name to receive any death
benefit. The beneficiary is named at the time the contract is issued unless
changed at a later date. Unless an irrevocable beneficiary has been named, you
can change the beneficiary at any time before you die.
ASSIGNMENT
You can assign the contract at any time during your lifetime. Cova will not be
bound by the assignment until it receives the written notice of the assignment.
Cova will not be liable for any payment or other action we take in accordance
with the contract before we receive notice of the assignment. AN ASSIGNMENT MAY
BE A TAXABLE EVENT.
If the contract is issued pursuant to a qualified plan, there may be
limitations on your ability to assign the contract.
FINANCIAL STATEMENTS
The financial statements of Cova and the Separate Account have been included in
the Statement of Additional Information.
TABLE OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
Company
Experts
Legal Opinions
Distribution
Calculation of Performance Information
Federal Tax Status
Annuity Provisions
Financial Statements
APPENDIX A
CONDENSED FINANCIAL INFORMATION
ACCUMULATION UNIT VALUE HISTORY
The following schedule includes accumulation unit values for the periods
indicated. This data has been extracted from the Separate Account's Financial
Statements. This information should be read in conjunction with the Separate
Account's Financial Statements and related notes which are included in the
Statement of Additional Information.
<TABLE>
<CAPTION>
Year or Period Year or
Period Ended Ended Period Ended Year or Period
12/31/99 12/31/98 12/31/97) ended 12/31/96
<S> <C> <C> <C> <C>
AIM VARIABLE INSURANCE FUNDS:
Managed by A I M Advisors, Inc.
AIM V.I. Capital Appreciation Sub-Account
Beginning of Period $11.80 $10.00 * *
End of Period $16.83 $11.80
Number of Accum. Units Outstanding 63,264 5,570
AIM V.I. International Equity Sub-Account
Beginning of Period $11.42 $10.00 * *
End of Period $17.46 $11.42
Number of Accum. Units Outstanding 19,322 15,257
AIM V.I. Value Sub-Account
Beginning of Period $13.08 $10.00 * *
End of Period $16.75 $13.08
Number of Accum. Units Outstanding 158,759 2,865
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
Managed by Alliance Capital Management L.P.
Premier Growth Sub-Account
Beginning of Period $14.62 $10.00 ** **
End of Period $19.08 $14.62
Number of Accum. Units Outstanding 130,836 62,869
Real Estate Investment Sub-Account
Beginning of Period $ 8.00 $10.00 ** **
End of Period $ 7.49 $ 8.00
Number of Accum. Units Outstanding 29,380 22,077
COVA SERIES TRUST
Managed by Lord Abbett & Co.
Bond Debenture Sub-Account
Beginning of Period $13.50 $12.88 $11.30 $ 10.15
End of Period $13.77 $13.50 $12.88 11.30
Number of Accum. Units Outstanding 859,300 681,676 347,400 39,545
Mid-Cap Value Sub-Account
Beginning of Period $10.44 $10.47 $10.05 *
End of Period $10.88 $10.44 $10.47 *
Number of Accum. Units Outstanding 132,159 85,457 8,510
Developing Growth Sub-Account
Beginning of Period $11.07 $10.53 $10.83 *
End of Period $14.45 $11.07 $10.53 *
Number of Accum. Units Outstanding 130,053 70,926 6,039
Large Cap Research Sub-Account
Beginning of Period $11.83 $10.76 * *
End of Period $14.64 $11.83
Number of Accum. Units Outstanding 142,370 49,894
Managed by J.P. Morgan Investment
Management Inc.
Select Equity Sub-Account
Beginning of Period $16.99 $14.05 $10.84 $ 10.15
End of Period $18.38 $16.99 $14.05 10.84
Number of Accum. Units Outstanding 1,237,436 1,052,797 700,550 185,509
Small Cap Stock Sub-Account
Beginning of Period $12.58 $13.49 $11.31 $ 10.91
End of Period $17.93 $12.58 $13.49 11.31
Number of Accum. Units Outstanding 632,695 663,925 487,580 113,118
International Equity Sub-Account
Beginning of Period $12.89 $11.46 $10.97 $ 10.10
End of Period $16.33 $12.89 $11.46 10.97
Number of Accum. Units Outstanding 838,996 779,375 554,105 124,032
Quality Bond Sub-Account
Beginning of Period $11.91 $11.16 $10.37 $ 9.95
End of Period $11.57 $11.91 $11.16 10.37
Number of Accum. Units Outstanding 629,401 501,045 234,643 64,534
Large Cap Stock Sub-Account
Beginning of Period $19.43 $14.89 $11.34 $ 10.16
End of Period $22.55 $19.43 $14.89 11.34
Number of Accum. Units Outstanding 1,531,957 1,132,390 686,677 126,231
GENERAL AMERICAN CAPITAL COMPANY
Managed by Conning Asset Management Company
Money Market Sub-Account
Beginning of Period $11.11 $10.67 $10.63 *
End of Period $11.53 $11.11 $10.67
Number of Accum. Units Outstanding 157,984 129,569 14,091
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Managed by Goldman Sachs Asset Management
Goldman Sachs VIT Growth and Income Sub-Account
Beginning of Period $ 9.91 $11.21 ** **
End of Period $10.30 $ 9.91
Number of Accum. Units Outstanding 27,398 13,107
Managed by Goldman Sachs Asset Management International
Goldman Sachs VIT International Equity Sub-Account
Beginning of Period $11.42 $11.20 ** **
End of Period $14.84 $11.42
Number of Accum. Units Outstanding 27,069 15,859
Goldman Sachs VIT Global Income Sub-Account
Beginning of Period $10.82 $10.15 ** **
End of Period $10.56 $10.82
Number of Accum. Units Outstanding 3,165 3,002
KEMPER VARIABLE SERIES
Managed by Scudder Kemper Investments, Inc.
Kemper Small Cap Value Sub-Account
Beginning of Period $ 8.77 $10.00 ** **
End of Period $ 8.89 $ 8.77
Number of Accum. Units Outstanding 27,733 16,641
Kemper Government Securities Sub-Account
Beginning of Period $10.63 $10.00 ** **
End of Period $10.56 $10.63
Number of Accum. Units Outstanding 20,807 2,519
Kemper Small Cap Growth Sub-Account
Beginning of Period $11.69 $10.00 ** **
End of Period $15.51 $11.69
Number of Accum. Units Outstanding 8,195 3,829
Managed by Dreman Value Management, L.L.C.
Kemper-Dreman High Return Equity
Sub-Account
Beginning of Period $10.49 $10.00
End of Period $ 9.27 $10.49
Number of Accum. Units Outstanding 10 10
LIBERTY VARIABLE INVESTMENT TRUST
Managed by Newport Fund Management Inc.
Newport Tiger Fund, Variable Sub-Account
Beginning of Period $ 9.28 $10.00 ** **
End of Period $15.40 $ 9.28
Number of Accum. Units Outstanding 2,639 2,397
MFS VARIABLE INSURANCE TRUST:
Managed by Massachusetts Financial
Services Company
MFS Emerging Growth Sub-Account
Beginning of Period $13.24 $10.00 * *
End of Period $23.08 $13.24
Number of Accum. Units Outstanding 62,562 47,710
MFS Research Sub-Account
Beginning of Period $12.18 $10.00 * *
End of Period $14.90 $12.18
Number of Accum. Units Outstanding 62,149 25,994
MFS Growth With Income Sub-Account
Beginning of Period $12.08 $10.00 * *
End of Period $12.70 $12.08
Number of Accum. Units Outstanding 112,973 64,791
MFS High Income Sub-Account
Beginning of Period $ 9.86 $10.00 * *
End of Period $10.35 $ 9.86
Number of Accum. Units Outstanding 21,540 13,080
MFS Global Governments Sub-Account
Beginning of Period $10.66 $10.00 * *
End of Period $10.25 $10.66
Number of Accum. Units Outstanding 1,050 385
MFS Bond Sub-Account
Beginning of Period $10.51 $10.00
End of Period $10.29 $10.51
Number of Accum. Units Outstanding 10 10
OPPENHEIMER VARIABLE ACCOUNT FUNDS
Managed by OppenheimerFunds, Inc.
Oppenheimer High Income Fund/VA Sub-Account
Beginning of Period $ 9.91 $10.00 ** **
End of Period $10.19 $ 9.91
Number of Accum. Units Outstanding 25,621 10,533
Oppenheimer Bond Fund/VA Sub-Account
Beginning of Period $10.55 $10.00 ** **
End of Period $10.25 $10.55
Number of Accum. Units Outstanding 71,773 46,377
Oppenheimer Capital Appreciation Fund/VA Sub-Account
Beginning of Period $12.24 $10.00 ** **
End of Period $17.10 $12.24
Number of Accum. Units Outstanding 15,979 5,037
Oppenheimer Main Street Growth & Income Fund/VA Sub-Account
Beginning of Period $10.34 $10.00 ** **
End of Period $12.41 $10.34
Number of Accum. Units Outstanding 34,600 14,882
Oppenheimer Strategic Bond Fund/VA Sub-Account
Beginning of Period $10.16 $10.00 ** **
End of Period $10.31 $10.16
Number of Accum. Units Outstanding 7,503 2,684
PUTNAM VARIABLE TRUST
Managed by Putnam Investment Management, Inc.
Putnam VT Growth and Income Sub-Account
Beginning of Period $11.40 $10.00 ** **
End of Period $11.42 $11.40 ** **
Number of Accum. Units Outstanding 131,527 80,114
Putnam VT International Growth Sub-Account
Beginning of Period $11.73 $10.00 ** **
End of Period $18.52 $11.73 ** **
Number of Accum. Units Outstanding 81,982 56,566
Putnam VT International New Opportunities Sub-Account
Beginning of Period $11.42 $10.00 ** **
End of Period $22.86 $11.42 ** **
Number of Accum. Units Outstanding 8,721 4,783
Putnam VT New Value Sub-Account
Beginning of Period $10.50 $10.00 ** **
End of Period $10.38 $10.50 ** **
Number of Accum. Units Outstanding 2,342 2,202
Putnam VT Vista Sub-Account
Beginning of Period $11.80 $10.00 ** **
End of Period $17.80 $11.80 ** **
Number of Accum. Units Outstanding 17,707 6,799
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST, CLASS 1 SHARES
Managed by Franklin Advisers, Inc.
Franklin Large Cap Growth Securities Sub-Account*
Beginning of Period $10.00 ** ** **
End of Period $14.69
Number of Accum. Units Outstanding 10,673
Franklin Small Cap Sub-Account*
Beginning of Period $10.00 ** ** **
End of Period $17.72
Number of Accum. Units Outstanding 7,226
Templeton Global Income Securities Sub-Account*
Beginning of Period $10.00 ** ** **
End of Period $9.70
Number of Accum. Units Outstanding 795
Managed by Franklin Mutual Advisers, LLC
Mutual Shares Securities Sub-Account
Beginning of Period $9.65 $8.64 ** **
End of Period $10.43 $9.65
Number of Accum. Units Outstanding 9,448 944
Managed by Templeton Investment Counsel, Inc.
Templeton International Securities Sub-Account
Beginning of Period $9.15 $7.89 ** **
End of Period $11.16 $9.15
Number of Accum. Units Outstanding 50,837 6,626
Managed by Templeton Global Advisors Limited
Templeton Growth Securities Sub-Account*
Beginning of Period $10.00 ** ** **
End of Period $13.32
Number of Accum. Units Outstanding 8,686
Managed by Templeton Asset Management Ltd.
Templeton Developing Markets Securities Sub-Account
Beginning of Period $7.56 $5.65 ** **
End of Period $11.48 $7.56
Number of Accum. Units Outstanding 13,256 7,033
*Sub-account commenced operations in 3/99.
VARIABLE INSURANCE PRODUCTS FUND
Managed by Fidelity Management &
Research Company
VIP Growth Sub-Account * *
Beginning of Period $13.12 $10.00
End of Period $17.78 $13.12
Number of Accum. Units Outstanding 4,777 505
VIP Equity-Income Sub-Account
Beginning of Period $10.67 $10.00 * *
End of Period $11.20 $10.67
Number of Accum. Units Outstanding 3,423 772
VARIABLE INSURANCE PRODUCTS FUND II
Managed by Fidelity Management &
Research Company
VIP II Contrafund Sub-Account
Beginning of Period $12.43 $10.00 * *
End of Period $15.24 $12.43
Number of Accum. Units Outstanding 623 78
VARIABLE INSURANCE PRODUCTS FUND III
Managed by Fidelity Management &
Research Company
VIP III Growth Opportunities Sub-Account
Beginning of Period $11.81 $10.00 * *
End of Period $12.14 $11.81
Number of Accum. Units Outstanding 521 114
VIP III Growth & Income Sub-Account
Beginning of Period $12.26 $10.00 * *
End of Period $13.20 $12.26
Number of Accum. Units Outstanding 6,964 2,082
<FN>
* The accumulation unit values shown above for the beginning of the period
for the Select Equity, Small Cap Stock, Large Cap Stock, International
Equity, Quality Bond and Bond Debenture Portfolios reflect the date these
investment portfolios were first offered for sale to the public which were
as follows: May 15, 1996 for the Select Equity and Small Cap Stock
Portfolios; May 16, 1996 for the Large Cap Stock Portfolio; May 14, 1996
for the International Equity Portfolio; and May 20, 1996 for the Quality
Bond and Bond Debenture Portfolios; and November 7, 1997 for the Developing
Growth and Mid-Cap Value Portfolios. The accumulation unit values for the
beginning of the period for the General American Capital Company Money
Market Sub-Account reflect the date they were first offered for sale under
the Contracts on December 4, 1997. The Separate Account had not invested in
the following Portfolios which are advised by Lord, Abbett & Co. as of
December 31, 1997: Large Cap Research and Lord Abbett Growth and Income.
The investment start date for the investment portfolios managed by A I M
Advisors, Inc., Massachusetts Financial Services Company, Alliance Capital
Management L.P., Scudder Kemper Investments, Inc., Newport Fund Management
Inc., OppenheimerFunds, Inc. and Putnam Variable Trust was December 31,
1997. The investment start date for the investment portfolios managed by
Fidelity Management & Research Company was February 17, 1998. The
sub-accounts investing in Franklin Templeton Variable Insurance Products
Trust commenced operations on September 21, 1998. The sub-accounts
investing in Goldman Sachs Variable Insurance Trust commenced operations on
March 31, 1998.
</FN>
</TABLE>
APPENDIX B
PARTICIPATING INVESTMENT PORTFOLIOS
Below are the investment objectives and strategies of each investment
portfolio available under the Contract. THERE CAN BE NO ASSURANCE THAT
THE INVESTMENT OBJECTIVES WILL BE ACHIEVED.
The fund prospectuses contain more complete information including a
description of the investment objectives, policies, restrictions and risks.
AIM VARIABLE INSURANCE FUNDS:
AIM Variable Insurance Funds is a mutual fund with multiple portfolios.
A I M Advisors, Inc. is the investment adviser to each portfolio.
The following portfolios are available under the contract:
AIM V.I. CAPITAL APPRECIATION FUND
Investment Objective: The Fund's investment objective is growth of capital
through investment in common stocks, with emphasis on medium- and small-
sized companies. The portfolio managers focus on companies they believe
are likely to benefit from new or innovative products, services or
processes as well as those that have experienced above-average, long-term
growth in earnings and have excellent prospects for future growth.
AIM V.I. INTERNATIONAL EQUITY FUND
Investment Objective: The Fund's investment objective is to achieve long-term
growth of capital by investing in a diversified portfolio of international
equity securities whose issuers are considered to have strong earnings momentum.
AIM V.I. VALUE FUND
Investment Objective: The Fund's investment objective is to achieve long-term
growth of capital by investing primarily in equity securities judged by the
Fund's investment advisor to be undervalued relative to the investment advisor's
appraisal of the current or projected earnings of the companies issuing the
securities, or relative to current market values of assets owned by the
companies issuing the securities or relative to the equity market generally.
Income is a secondary objective.
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.:
Alliance Variable Products Series Fund, Inc. is a mutual fund with multiple
portfolios. Alliance Capital Management L.P. is the investment adviser to each
portfolio. The following portfolios are available under the contract:
PREMIER GROWTH PORTFOLIO
Investment Objective: The Portfolio's investment objective is growth of capital
by pursuing aggressive investment policies. The Portfolio invests primarily
in equity securities of U.S. companies. Normally, the Portfolio invests in
about 40-50 companies, with the 25 most highly regarded of these companies
usually constituting approximately 70% of the Portfolio's net assets.
REAL ESTATE INVESTMENT PORTFOLIO
Investment Objective: The Portfolio's investment objective is total return from
long-term growth of capital and income principally through investing in equity
securities of companies that are primarily engaged in or related to the real
estate industry.
COVA SERIES TRUST:
Cova Series Trust is managed by Cova Investment Advisory Corporation (Cova
Advisory), which is an affiliate of Cova. Cova Series Trust is a mutual fund
with multiple portfolios. Cova Advisory has engaged sub-advisers to provide
investment advice for the individual investment portfolios. The following
portfolios are available under the contract:
PORTFOLIOS MANAGED BY J. P. MORGAN INVESTMENT MANAGEMENT INC.:
INTERNATIONAL EQUITY PORTFOLIO
Investment Objective: The International Equity Portfolio seeks to provide a high
total return from a portfolio of equity securities of foreign corporations.
LARGE CAP STOCK PORTFOLIO
Investment Objective: The Large Cap Stock Portfolio seeks to provide long-term
growth of capital and income.
QUALITY BOND PORTFOLIO
Investment Objective: The Quality Bond Portfolio seeks to provide a high total
return consistent with moderate risk of capital and maintenance of liquidity.
SELECT EQUITY PORTFOLIO
Investment Objective: The Select Equity Portfolio seeks to provide long-term
growth of capital and income.
SMALL CAP STOCK PORTFOLIO
Investment Objective: The Small Cap Stock Portfolio seeks to provide a high
total return from a portfolio of equity securities of small companies.
PORTFOLIOS MANAGED BY LORD, ABBETT & CO.:
BOND DEBENTURE PORTFOLIO
Investment Objective: The Bond Debenture Portfolio seeks to provide high current
income and the opportunity for capital appreciation to produce a high total
return.
DEVELOPING GROWTH PORTFOLIO
Investment Objective: The Developing Growth Portfolio seeks long-term growth of
capital through a diversified and actively-managed portfolio consisting of
developing growth companies, many of which are traded over the counter.
LARGE CAP RESEARCH PORTFOLIO
Investment Objective: The Large Cap Research Portfolio seeks growth of capital
and growth of income consistent with reasonable risk.
LORD ABBETT GROWTH AND INCOME PORTFOLIO
Investment Objective: The Lord Abbett Growth and Income Portfolio seeks to
achieve long-term growth of capital and income without excessive fluctuation in
market value.
MID-CAP VALUE PORTFOLIO
Investment Objective: The Mid-Cap Value Portfolio seeks capital appreciation
through investments, primarily in equity securities, which are believed to be
undervalued in the marketplace.
GENERAL AMERICAN CAPITAL COMPANY
General American Capital Company is a mutual fund with multiple portfolios. Each
portfolio is managed by Conning Asset Management Company. The following
portfolio is available under the contract:
MONEY MARKET FUND
Investment Objective: The Money Market Fund's investment objective is to provide
investors with current income while preserving capital and maintaining
liquidity. The Fund seeks to achieve this objective by investing primarily in
high-quality, short-term money market instruments. The Fund purchases securities
that meet the quality, maturity, and diversification requirements applicable to
money market funds.
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST, CLASS 1 SHARES:
Franklin Templeton Variable Insurance Products Trust is a mutual fund with
multiple portfolios. Effective May 1, 2000, the portfolios of Templeton Variable
Products Series Fund were merged into similar portfolios of Franklin Templeton
Variable Insurance Products Trust. Each portfolio has two classes of shares:
Class 1 and Class 2. The portfolios available in connection with your contract
are Class 1 shares. Franklin Advisers, Inc. is the investment adviser for the
Franklin Large Cap Growth Securities Fund, the Franklin Small Cap Fund and the
Templeton Global Income Securities Fund. Franklin Mutual Advisers, LLC is the
investment adviser for the Mutual Shares Securities Fund. Templeton Investment
Counsel, Inc. is the investment adviser for the Templeton Asset Strategy Fund
and the Templeton International Securities Fund. Templeton Global Advisors
Limited is the investment adviser for the Templeton Growth Securities Fund.
Templeton Asset Management Ltd. is the investment adviser for the Templeton
Developing Markets Securities Fund. The following portfolios are available under
the contract:
FRANKLIN LARGE CAP GROWTH SECURITIES FUND (the surviving fund of the merger
with Franklin Large Cap Growth Investments Fund)
Investment Objective and Principal Investments: The Fund's investment goal is
capital appreciation. Under normal market conditions, the Fund will invest at
least 65% of its total assets in equity securities of large cap growth companies
that are expected to have revenue growth in excess of the economy as a whole
either through above-average industry expansion or market share gains.
FRANKLIN SMALL CAP FUND (the surviving fund of the merger with Franklin
Small Cap Investments Fund)
Investment Objective and Principal Investments: The Fund's investment goal is
long-term capital growth. Under normal market conditions, the Fund will invest
at least 65% of its total assets in equity securities of U.S. small
capitalization (small cap) growth companies.
MUTUAL SHARES SECURITIES FUND (the surviving fund of the merger with Mutual
Shares Investments Fund)
Investment Objective and Principal Investments: The Fund's principal goal is
capital appreciation. Its secondary goal is income. Under normal market
conditions, the Fund will invest at least 65% of its total assets in equity
securities of companies that the manager believes are available at market prices
less than their value based on certain recognized or objective criteria
(intrinsic value).
TEMPLETON ASSET STRATEGY FUND (formerly Templeton Asset Allocation Fund)
Investment Objective and Principal Investments: The Fund's investment goal is
high total return. Under normal market conditions, the Fund will invest in
equity and debt securities of any nation, including emerging markets, and in
money market instruments.
TEMPLETON GLOBAL INCOME SECURITIES FUND (the surviving fund of the merger
with Templeton Bond Fund)
Investment Objective and Principal Investments: The Fund's investment goal is
high current income. Capital appreciation is a secondary consideration. Under
normal market conditions, the Fund will invest at least 65% of its total assets
in the debt securities of governments and their political subdivisions and
agencies, supranational organizations, and companies located anywhere in the
world, including emerging markets.
TEMPLETON INTERNATIONAL SECURITIES FUND (formerly Templeton International
Fund)
Investment Objective and Principal Investments: The Fund's investment goal is
long-term capital growth. Under normal market conditions, the Fund will invest
at least 65% of its total assets in the equity securities of companies located
outside the U.S., including in emerging markets.
TEMPLETON GROWTH SECURITIES FUND (the surviving fund of the merger with
Templeton Stock Fund)
Investment Objective and Principal Investments: The Fund's investment goal is
long-term capital growth. Under normal market conditions, the Fund will invest
at least 65% of its total assets in equity securities of companies located
anywhere in the world, including in the U.S. and emerging markets.
TEMPLETON DEVELOPING MARKETS SECURITIES FUND (formerly Templeton Developing
Markets Fund)
Investment Objective and Principal Investments: The Fund's investment goal is
long-term capital appreciation. Under normal market conditions, the Fund will
invest at least 65% of its total assets in emerging market equity securities.
Emerging market equity securities generally include equity securities that trade
in emerging markets or are issued by companies that derive revenue from goods or
services produced, or that have their principal activities, or assets in,
emerging market countries.
GOLDMAN SACHS VARIABLE INSURANCE TRUST:
Goldman Sachs Variable Insurance Trust is a mutual fund with multiple
portfolios. Goldman Sachs Asset Management, a unit of the Investment Management
Division of Goldman, Sachs & Co., is the investment adviser for the Goldman
Sachs VIT Growth and Income Fund and Goldman Sachs Asset Management
International is the investment adviser for the Goldman Sachs VIT International
Equity Fund and the Goldman Sachs VIT Global Income Fund. The following
portfolios are available under the contract:
GOLDMAN SACHS VIT GLOBAL INCOME FUND
Investment Objective: The Fund seeks a high total return, emphasizing current
income, and, to a lesser extent, providing opportunities for capital
appreciation. The Fund invests primarily in a portfolio of high quality
fixed-income securities of U.S. and foreign issuers and enters into
transactions in foreign currencies.
GOLDMAN SACHS VIT GROWTH AND INCOME FUND
Investment Objective: The Fund seeks long-term growth of capital and growth of
income by investing in large capitalization U.S. stocks that are believed to
be undervalued or undiscovered in the marketplace.
GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND
Investment Objective: The Fund seeks long-term capital appreciation by investing
primarily in equity securities of companies organized outside the United States
or whose securities are principally traded outside the United States. The Fund
intends to invest in companies with public stock market capitalizations that
are larger than $1 billion at the time of investment.
KEMPER VARIABLE SERIES
Kemper Variable Series is a mutual fund with multiple portfolios. Scudder Kemper
Investments, Inc. is the investment adviser for the Kemper Government Securities
Portfolio, the Kemper Small Cap Growth Portfolio and the Kemper Small Cap Value
Portfolio. Dreman Value Management, L.L.C. is the investment adviser for the
Kemper-Dreman High Return Equity Portfolio. The following portfolios are
available under the contract:
KEMPER GOVERNMENT SECURITIES PORTFOLIO
Investment Objective: Kemper Government Securities seeks high current return
consistent with preservation of capital. The Portfolio pursues its objective
by investing at least 65% of its total assets in U.S. Government securities
and repurchase agreements of U.S. Government securities.
KEMPER SMALL CAP GROWTH PORTFOLIO
Investment Objective: Kemper Small Cap Growth Portfolio seeks maximum
appreciation of investors' capital. The Portfolio pursues its objective by
investing at least 65% of its total assets in small capitalization stocks
similar in size to those companies comprising the Russell 2000 Index. Many
of these companies would be in the early stages of their life cycle. Equity
securities in which the Portfolio invests consist primarily of common stocks,
but may include convertible securities, including warrants and rights.
KEMPER SMALL CAP VALUE PORTFOLIO
Investment Objective: Kemper Small Cap Value Portfolio seeks long-term capital
appreciation. The Portfolio pursues its investment objective by investing
primarily in a diversified portfolio of the stocks of small U.S. companies,
which are those similar in size to those comprising the Russell 2000 Index and
that the investment manager believes to be undervalued. Under normal market
conditions, the Portfolio invests at least 65% of its assets in small
capitalization stocks similar in size to those comprising the Russell 2000
Index.
KEMPER-DREMAN HIGH RETURN EQUITY PORTFOLIO
Investment Objective: Kemper-Dreman High Return Equity Portfolio seeks to
achieve a high rate of total return. The Portfolio pursues its objective by
investing principally in a diversified portfolio of the stocks of large U.S.
Companies that the investment manager believes are undervalued. Under normal
market conditions, the Portfolio invests at least 65% of its total assets in
equity securities.
LIBERTY VARIABLE INVESTMENT TRUST:
Liberty Variable Investment Trust is a mutual fund with multiple portfolios.
Liberty Advisory Services Corp. (LASC) is the investment manager to the Trust.
LASC has engaged Newport Fund Management, Inc. as sub-adviser to provide
investment advice for the Newport Tiger Fund, Variable Series. The following
portfolio is available under the contract:
NEWPORT TIGER FUND, VARIABLE SERIES
Investment Objective: The Fund seeks long-term capital appreciation. Under
normal market conditions, the Fund invests primarily in stocks of companies
located in the nine Tiger countries of Asia. The Tigers of Asia are Hong Kong,
Singapore, South Korea, Taiwan, Malaysia, Thailand, Indonesia, The People's
Republic of China and the Philippines. The Fund typically invests in stocks of
larger, well-established companies.
MFS VARIABLE INSURANCE TRUST:
MFS Variable Insurance Trust is a mutual fund with multiple portfolios.
Massachusetts Financial Services Company is the investment adviser to each
portfolio. The following portfolios are available under the contract:
MFS BOND SERIES
Investment Objective: The Series' investment objective is primarily to provide
as high a level of current income as is believed to be consistent with prudent
risk. The Series invests, under normal market conditions, at least 65% of its
total assets in the following fixed income securities: corporate bonds, U.S.
government securities, and mortgage-backed and asset backed securities.
MFS EMERGING GROWTH SERIES
Investment Objective: The Series' investment objective is long term growth of
capital. The Series invests, under normal market conditions, at least 65% of its
total assets in common stocks and related securities of emerging growth
companies.
MFS GLOBAL GOVERNMENTS SERIES
Investment Objective: The Series' investment objective is to provide income
and capital appreciation. The Series invests primarily in U.S. and foreign
government securities.
MFS GROWTH WITH INCOME SERIES
Investment Objective: The Series' investment objective is to provide reasonable
current income and long-term growth of capital and income. The Series invests,
under normal market conditions, at least 65% of its total assets in common
stocks and related securities.
MFS HIGH INCOME SERIES
Investment Objective: The Series' investment objective is to provide high
current income by investing primarily in a professionally managed diversified
portfolio of fixed income securities, some of which may involve equity features.
The Series invests, under normal market conditions, at least 80% of its total
assets in high yield fixed income securities which generally are lower rated
bonds commonly known as junk bonds. Junk bonds are subject to a substantially
higher degree of risk than higher rated bonds.
MFS RESEARCH SERIES
Investment Objective: The Series' investment objective is long-term growth of
capital and future income. The Series invests, under normal market conditions,
at least 80% of its total assets in common stocks and related securities, such
as preferred stocks, convertible securities and depositary receipts.
OPPENHEIMER VARIABLE ACCOUNT FUNDS:
Oppenheimer Variable Account Funds is a mutual fund with multiple portfolios.
OppenheimerFunds, Inc. is the investment adviser to each portfolio. The
following portfolios are available under the contract:
OPPENHEIMER BOND FUND/VA
Investment Objective: The Fund's main objective is to seek a high level of
current income. As a secondary objective, the Fund seeks capital appreciation
when consistent with its primary objective. Normally, the Fund invests at least
65% of its total assets in investment-grade debt securities, U.S. Government
securities and money market instruments.
OPPENHEIMER CAPITAL APPRECIATION FUND/VA
(formerly Oppenheimer Growth)
Investment Objective: The Fund seeks capital appreciation by investing in
securities of well-known established companies. The Fund invests mainly in
common stocks of established and well-known U.S. companies.
OPPENHEIMER HIGH INCOME FUND/VA
Investment Objective: The Fund seeks a high level of current income from
investment in high-yield fixed income securities. The Fund invests mainly
in a variety of high-yield fixed-income securities of domestic and foreign
issuers.
OPPENHEIMER MAIN STREET GROWTH & INCOME FUND/VA
(formerly Oppenheimer Growth & Income)
Investment Objective: The Fund's objective is to seek high total return (which
includes growth in the value of its shares as well as current income) from
equity and debt securities. The Fund invests mainly in common stocks of U.S.
companies, and can also invest in other equity securities such as preferred
stocks and securities convertible into common stocks.
OPPENHEIMER STRATEGIC BOND FUND/VA
Investment Objective: The Fund seeks a high level of current income. The Fund
invests mainly in debt securities of issuers in three market sectors: foreign
governments and companies, U.S. government securities and lower-grade high-
yield securities of U.S. companies.
PUTNAM VARIABLE TRUST:
Putnam Variable Trust is a mutual fund with multiple portfolios. Putnam
Investment Management, Inc. is the investment adviser to each portfolio. The
following portfolios are available under the contract:
PUTNAM VT GROWTH AND INCOME FUND - CLASS IA SHARES
Investment Objective: The Fund seeks capital growth and current income.
PUTNAM VT INTERNATIONAL GROWTH FUND - CLASS IA SHARES
Investment Objective: The Fund seeks capital appreciation.
PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND - CLASS IA SHARES
Investment Objective: The Fund seeks long-term capital appreciation.
PUTNAM VT NEW VALUE FUND - CLASS IA SHARES
Investment Objective: The Fund seeks long-term capital appreciation.
PUTNAM VT VISTA FUND - CLASS IA SHARES
Investment Objective: The Fund seeks capital appreciation.
VARIABLE INSURANCE PRODUCTS FUND
VARIABLE INSURANCE PRODUCTS FUND II
VARIABLE INSURANCE PRODUCTS FUND III
Variable Insurance Products Fund, Variable Insurance Products Fund II and
Variable Insurance Products Fund II are each a mutual fund with multiple
portfolios managed by Fidelity Management & Research Company. The following
portfolios are available under the contract:
VARIABLE INSURANCE PRODUCTS FUND
VIP GROWTH PORTFOLIO
Investment Objective: The Growth Portfolio seeks to achieve capital
appreciation.
VIP EQUITY-INCOME PORTFOLIO
Investment Objective: The Equity-Income Portfolio seeks reasonable income. The
Fund will also consider the potential for capital appreciation. The Fund's goal
is to achieve a yield which exceeds the composite yield on the securities
comprising the S&P 500.
VARIABLE INSURANCE PRODUCTS FUND II
VIP II CONTRAFUND PORTFOLIO
Investment Objective: The Contrafund Portfolio seeks long-term capital
appreciation.
VARIABLE INSURANCE PRODUCTS FUND III
VIP III GROWTH OPPORTUNITIES PORTFOLIO
Investment Objective: The Growth Opportunities Portfolio seeks to provide
capital growth.
VIP III GROWTH & INCOME PORTFOLIO
Investment Objective: The Growth & Income Portfolio seeks high total return
through a combination of current income and capital appreciation.
APPENDIX C
PERFORMANCE INFORMATION
FUTURE PERFORMANCE WILL VARY AND THE RESULTS SHOWN ARE NOT NECESSARILY
REPRESENTATIVE OF FUTURE RESULTS.
Note: The figures below present investment performance information for the
periods ended December 31, 1999. While these numbers represent the returns as of
that date, they do not represent performance information of the portfolios since
that date. Performance information for the periods after December 31, 1999 may
be different than the numbers shown below.
PART 1 - SEPARATE ACCOUNT PERFORMANCE
The portfolios listed below began operations before December 31, 1999. As a
result, performance information is available for the accumulation unit values
investing in these portfolios.
* Column A presents performance figures for the accumulation units which
reflect the insurance charges, the contract maintenance charge, the fees and
expenses of the investment portfolio, and assume that you make a withdrawal at
the end of the period and therefore the withdrawal charge is reflected.
* Column B presents performance figures for the accumulation units which
reflect the insurance charges as well as the fees and expenses of the investment
portfolio.
The inception dates shown below reflect the dates the Separate Account first
invested in the Portfolio. The performance returns for accumulation units
investing in the portfolios in existence for less than one year are not
annualized.
PART 1 AIM VARIABLE INSURANCE FUNDS
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate (reflects all (reflects insurance
Account charges and charges and
Inception portfolio expenses) portfolio expenses)
Portfolio Date in 1 yr since 1 yr since
Portfolio inception inception
- ---------------- --------- -------- --------- ------------- ----------
AIM V.I. Capital 12/31/97 37.96% 27.84% 42.60% 29.72%
Appreciation
AIM V.I. 12/31/97 48.25% 30.28% 52.90% 32.13%
International
Equity
AIM V.I. Value 12/31/97 23.46% 27.53% 28.09% 29.42%
</TABLE>
PART 1 ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate (reflects all (reflects insurance
Account charges and charges and
Inception portfolio expenses) portfolio expenses)
Portfolio Date in 1 yr since 1 yr since
Portfolio inception inception
- ---------------- --------- -------- --------- ------------- ----------
Premier Growth (Class A) 12/31/97 25.84% 36.34% 30.47% 38.12%
Real Estate Investment
(Class A) 12/31/97 -11.03% -16.21% -6.43% -13.48%
</TABLE>
PART 1 COVA SERIES TRUST
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate Account (reflects all (reflects insurance
Inception Date charges and portfolio charges and
in Portfolio expenses) portfolio expenses)
---------------- ------------------------ ---------------------------
since since
Portfolio 1 yr inception 1 yr inception
- ----------------- -------------------------- ---------------------------
Select Equity 5/15/96 3.62% 16.83% 8.23% 17.77%
Small Cap Stock 5/15/96 37.87% 13.68% 42.52% 14.68%
International
Equity 5/14/96 22.10% 13.14% 26.73% 14.15%
Quality Bond 5/20/96 -7.51% 3.00% -2.92% 4.25%
Large Cap Stock 5/16/96 11.45% 23.76% 16.06% 24.60%
Bond Debenture 5/20/96 -2.61% 7.67% 1.99% 8.80%
Developing Growth 11/7/97 25.95% 12.40% 30.58% 14.38%
Large Cap Research 2/17/98 19.14% 15.69% 23.76% 17.92%
Mid-Cap Value 11/7/97 -0.41% 1.57% 4.19% 3.75%
</TABLE>
PART 1 GENERAL AMERICAN CAPITAL COMPANY MONEY MARKET FUND
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate Account (reflects all (reflects insurance
Inception Date charges and portfolio charges and
in Portfolio expenses) portfolio expenses)
---------------- ------------------------ ---------------------------
since since
Portfolio 1 yr inception 1 yr inception
- ----------------- -------- --------------- -------- ------------------
Money Market 12/4/97 -0.86% 1.72% 3.74% 3.97%
</TABLE>
PART 1 GOLDMAN SACHS VARIABLE INSURANCE TRUST
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate Account (reflects all (reflects insurance
Inception Date charges and portfolio charges and portfolio
in Portfolio expenses) expenses)
---------------- ----------------------- -----------------------------
Date in since since
Portfolio Portfolio 1 yr inception 1 yr inception
- ---------------- --------- -------- -------------- -------- --------------------
Goldman Sachs VIT
Growth and Income 3/31/98 -0.66% -7.51% 3.94% -4.71%
Goldman Sachs VIT
International
Equity 3/31/98 25.39% 15.00% 30.02% 17.43%
Goldman Sachs VIT
Global Income 3/31/98 -6.99% -0.41% -2.39% 2.26%
</TABLE>
PART 1 KEMPER VARIABLE SERIES
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate (reflects all (reflects insurance
Account charges and charges and
Inception portfolio expenses) portfolio expenses)
Portfolio Date in 1 yr since 1 yr since
Portfolio inception inception
- ---------------- --------- -------- --------- ------------- ----------
Kemper Small Cap Value 12/31/97 -3.28% -8.25% 1.32% -5.73%
Kemper Government
Securities 12/31/97 -5.32% 0.44% -0.72% 2.75%
Kemper Small Cap Growth 12/31/97 28.03% 22.57% 32.66% 24.52%
Kemper-Dreman High Return
Equity 5/15/98 -16.21% -7.53% -11.62% -4.54%
</TABLE>
PART 1 LIBERTY VARIABLE INVESTMENT TRUST
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate (reflects all (reflects insurance
Account charges and charges and
Inception portfolio expenses) portfolio expenses)
Portfolio Date in 1 yr since 1 yr since
Portfolio inception inception
- ---------------- --------- -------- --------- ------------- ----------
Newport Tiger Fund,
Variable Series 12/31/97 61.28% 22.13% 65.94% 24.09%
</TABLE>
PART 1 MFS VARIABLE INSURANCE TRUST
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate (reflects all (reflects insurance
Account charges and charges and
Inception portfolio expenses) portfolio expenses)
Portfolio Date in 1 yr since 1 yr since
Portfolio inception inception
- ---------------- --------- -------- --------- ------------- ----------
MFS Emerging Growth 12/31/97 69.59% 50.28% 74.26% 51.92%
MFS Research 12/31/97 17.70% 20.07% 22.32% 22.06%
MFS Growth With Income 12/31/97 0.60% 10.58% 5.21% 12.71%
MFS High Income 12/31/97 0.36% -0.59% 4.97% 1.75%
MFS Global Governments 12/31/97 -8.45% -1.10% -3.85% 1.26%
MFS Bond 5/15/98 -6.70% -1.12% -2.10% 1.76%
</TABLE>
PART 1 OPPENHEIMER VARIABLE ACCOUNT FUNDS
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate (reflects all (reflects insurance
Account charges and charges and
Inception portfolio expenses) portfolio expenses)
Portfolio Date in 1 yr since 1 yr since
Portfolio inception inception
- ---------------- --------- -------- --------- ------------- ----------
Oppenheimer High Income
Fund/VA 12/31/97 -1.76% -1.42% 2.84% 0.94%
Oppenheimer Bond Fund/VA 12/31/97 -7.49% -1.12% -2.89% 1.23%
Oppenheimer Capital
Appreciation Fund/VA 12/31/97 35.05% 28.92% 39.69% 30.78%
Oppenheimer Main Street
Growth & Income Fund/VA 12/31/97 15.39% 9.25% 20.01% 11.40%
Oppenheimer Strategic
Bond Fund/VA 12/31/97 -3.20% -0.82% 1.40% 1.52%
</TABLE>
PART 1 PUTNAM VARIABLE TRUST
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate (reflects all (reflects insurance
Account charges and charges and
Inception portfolio expenses) portfolio expenses)
Portfolio Date in 1 yr since 1 yr since
Portfolio inception inception
- ---------------- --------- -------- --------- ------------- ----------
Putnam Variable Trust
Putnam VT Growth &
Income Class IA Shares 12/31/97 -4.43% 4.64% 0.17% 6.88%
Putnam VT International
Growth Class IA Shares 12/31/97 53.26% 34.30% 57.92% 36.10%
Putnam VT International
New Opportunities
Class IA Shares 12/31/97 95.45% 49.54% 100.15% 51.19%
Putnam VT New Value
Class IA Shares 12/31/97 -5.73% -0.46% -1.13% 1.88%
Putnam VT Vista Class
IA Shares 12/31/97 46.12% 31.57% 50.77% 33.41%
</TABLE>
PART 1 FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST, CLASS 1 SHARES
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate (reflects all (reflects insurance
Account charges and charges and
Inception portfolio expenses) portfolio expenses)
Portfolio Date in 1 yr since 1 yr since
Portfolio inception inception
- ---------------- --------- -------- --------- ------------- ----------
Templeton Developing Markets
Securities (1) 9/21/98 47.24% 71.08% 51.89% 74.34%
Mutual Shares Securities (2) 9/21/98 7.23% 20.52% 11.85% 25.27%
Templeton International
Securities (3) 9/21/98 17.33% 27.66% 21.95% 31.15%
Franklin Large Cap Growth
Securities (4) 3/01/99 N/A 25.11% N/A 30.24%
Franklin Small Cap (5) 3/01/99 N/A 99.28% N/A 104.48%
Templeton Global Income
Securities (6) 3/01/99 N/A -8.77% N/A -3.67%
Templeton Growth Securities (7) 3/02/99 N/A 20.13% N/A 25.26%
</TABLE>
(1) Previously, the Templeton Developing Markets Securities Fund was known
as the Templeton Developing Markets Fund. Effective May 1, 2000, the Templeton
Developing Markets Securities Fund merged into the Templeton Developing Markets
Equity Fund. Performance shown reflects historical performance of the Templeton
Developing Markets Securities Fund.
(2) Effective May 1, 2000, the Mutual Shares Investments Fund (previously
offered under the contract) merged into the Mutual Shares Securities Fund.
Performance shown reflects historical performance of the Mutual Shares
Securities Fund.
(3) Previously, the Templeton International Securities Fund was known as
the Templeton International Fund. Effective May 1, 2000, the Templeton
International Securities Fund merged into the Templeton International Equity
Fund. Performance shown reflects historical performance of the Templeton
International Securities Fund.
(4) Effective May 1, 2000, the Franklin Large Cap Growth Investments Fund
(previously offered under the contract) merged into the Franklin Large Cap
Growth Securities Fund. Performance shown reflects historical performance of the
Franklin Large Cap Growth Securities Fund.
(5) Effective May 1, 2000, the Franklin Small Cap Investments Fund
(previously offered under the contract) merged into the Franklin Small Cap Fund.
Performance shown reflects historical performance of the Franklin Small Cap
Fund.
(6) Effective May 1, 2000, the Templeton Bond Fund (previously offered
under the contract) merged into the Templeton Global Income Securities Fund.
Performance shown reflects historical performance of the Templeton Global Income
Securities Fund.
(7) Effective May 1, 2000, the Templeton Stock Fund (previously offered
under the contract) merged into the Templeton Growth Securities Fund.
Performance shown reflects historical performance of the Templeton Growth
Securities Fund.
PART 1 VARIABLE INSURANCE PRODUCTS FUND, VARIABLE INSURANCE PRODUCTS FUND II,
VARIABLE INSURANCE PRODUCTS FUND III
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulation Unit Performance
Column A Column B
Separate (reflects all (reflects insurance
Account charges and charges and
Inception portfolio expenses) portfolio expenses)
Portfolio Date in 1 yr since 1 yr since
Portfolio inception inception
- ---------------- --------- -------- --------- ------------- ----------
VIP Growth 2/17/98 30.93% 34.07% 35.57% 36.07%
VIP Equity-Income 2/17/98 0.28% 3.81% 4.89% 6.23%
VIP II Contrafund 2/17/98 17.96% 23.15% 22.58% 25.28%
VIP III Growth 2/17/98 -1.82% 8.61% 2.78% 10.95%
Opportunities
VIP III Growth 2/17/98 3.05% 13.75% 7.66% 16.01%
& Income
</TABLE>
PART 2 - HISTORICAL FUND PERFORMANCE
Shares of the General American Capital Company Money Market Fund were made
available under the contract on May 1, 1997. Shares of the Portfolios of
Variable Insurance Products Fund, Variable Insurance Products Fund II, Variable
Insurance Products Fund III, AIM Variable Insurance Funds, Inc. and MFS Variable
Insurance Trust were offered under the contract on May 1, 1998. Shares of the
Select Equity, Small Cap Stock, International Equity, Quality Bond, Large Cap
Stock and Bond Debenture Portfolios of Cova Series Trust were offered under the
contracts on May 1, 1996 and shares of the Mid-Cap Value, Large Cap Research and
Developing Growth Portfolios of Cova Series Trust were offered under the
contract on November 15, 1997. Shares of the Portfolios of Alliance Variable
Products Series Fund, Inc., Liberty Variable Investment Trust, Investors Fund
Series and Oppenheimer Variable Account Funds were made available under the
contract on June 15, 1998. Shares of the Portfolios of Putnam Variable Trust and
Goldman Sachs Variable Insurance Trust were first offered under the contract as
of May 1, 1999. Shares of the Portfolios of Franklin Templeton Variable
Insurance Products Trust were first offered under the contract on November 1,
1998 (collectively, the "Existing Funds"). However, the Existing Funds have been
in existence for a longer time and therefore have an investment performance
history. In order to show how the historical performance of the Existing Funds
affects accumulation unit values, we have developed performance information.
The chart below shows the investment performance of the Existing Funds and the
accumulation units performance calculated by assuming that accumulation units
were invested in the Existing Funds for the same periods.
* The performance figures in Column A for the Existing Funds reflect the
fees and expenses paid by the Portfolio.
* Column B presents performance figures for the accumulation units which
reflect the insurance charges, the contract maintenance charge, the fees and
expenses of the Portfolio, and assumes that you make a withdrawal at the end of
the period and therefore the withdrawal charge is reflected.
* Column C presents performance figures for the accumulation units which
reflect the insurance charges as well as the fees and expenses of the Portfolio.
PART 2 AIM VARIABLE INSURANCE FUNDS
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all (reflects insurance
charges and charges and
Portfolio portfolio expenses) portfolio expenses)
inception Performance Since Performance
Portfolio date 1 yr 5 yrs since inception 1 yr 5 yrs inception 1 yr 5 yrs since Inception
- ---------------- --------- ----------------- --------------- ----------------- ---------- --------------- ---------------
AIM V.I. Capital
Appreciation 5/5/93 44.61% 25.59% 22.33% 37.96% 24.09% 20.83% 42.60% 24.19% 20.93%
AIM V.I.
International
Equity 5/5/93 55.04% 21.93% 18.82% 48.25% 20.43% 17.32% 52.90% 20.53% 17.42%
AIM V.I.
Value 5/5/93 29.90% 27.23% 23.07% 23.46% 25.73% 21.57% 28.09% 25.83% 21.67%
</TABLE>
PART 2 ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all (reflects insurance
charges and charges and
portfolio expenses) portfolio expenses)
Portfolio 10 yrs 10 yrs 10 yrs
Inception or since or since or since
Portfolio Date 1 yr 5 yrs inception 1 yr 5 yrs inception 1 yr 5 yrs inception
- --------------- --------- ------ ------ ---------- ------ ----- --------- ----- ------- ----------
Premier Growth
(Class A) 6/26/92 32.32% 36.03% 26.31% 25.84% 34.53% 24.81% 30.47% 34.63% 24.91%
Real Estate Investment
(Class A) 1/9/97 -5.11% N/A -1.79% -11.03% N/A -4.83% -6.43% N/A -3.19%
</TABLE>
PART 2 COVA SERIES TRUST
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all charges (reflects insurance
and portfolio expenses) and portfolio expenses)
------------------ ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Portfolio
inception since since since
Portfolio date 1 yr 5 yrs inception 1 yr 5 yrs inception 1 yr 5 yrs inception
- -------------- ---------- ----- ----- --------- ---- ----- --------- ---- ------ ---------
Select Equity 5/1/96 9.71% N/A 19.44% 3.62% N/A 16.86% 8.23% N/A 17.79%
Small Cap Stock 5/1/96 44.56% N/A 17.30% 37.87% N/A 14.70% 42.52% N/A 15.67%
International Equity 5/1/96 28.52% N/A 15.26% 22.10% N/A 12.64% 26.73% N/A 13.65%
Quality Bond 5/1/96 -1.54% N/A 5.79% -7.51% N/A 3.11% -2.92% N/A 4.34%
Large Cap Stock 5/1/96 17.64% N/A 26.52% 11.45% N/A 23.98% 16.06% N/A 24.80%
Bond Debenture 5/1/96 3.40% N/A 10.32% -2.61% N/A 7.70% 1.99% N/A 8.81%
Mid-Cap Value 8/20/97 5.71% N/A 4.95% -0.41% N/A 1.64% 4.19% N/A 3.61%
Large Cap Research 8/20/97 25.54% N/A 18.96% 19.14% N/A 15.79% 23.76% N/A 17.48%
Developing Growth 8/20/97 32.47% N/A 18.35% 25.95% N/A 15.15% 30.58% N/A 16.86%
</TABLE>
PART 2 GENERAL AMERICAN CAPITAL COMPANY MONEY MARKET FUND
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all (reflects insurance
charges and charges and
Portfolio portfolio expenses) portfolio expenses)
inception
Portfolio date 1 yr 5 yrs 10 yrs 1 yr 5 yrs 10 yrs 1 yr 5 yrs 10 yrs
- ---------------- --------- --------- ------ ------------ ------- --------- ------------- ------- --------- ------
Money Market 10/1/87 5.20% 5.60% 5.35% -0.86% 4.10% 3.85% 3.74% 4.20% 3.95%
</TABLE>
PART 2
GOLDMAN SACHS VARIABLE INSURANCE TRUST
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all charges (reflects insurance
and portfolio expenses) and portfolio expenses)
------------------ ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Portfolio
inception since since since
Portfolio date 1 yr 5 yrs inception 1 yr 5 yrs inception 1 yr 5 yrs inception
- -------------- ---------- ----- ----- --------- ---- ----- --------- ---- ------ ---------
Goldman Sachs Variable
Insurance Trust
Goldman Sachs VIT Growth
and Income 1/12/98 5.41% N/A 5.53% -0.66% N/A 1.72% 3.94% N/A 4.13%
Goldman Sachs VIT
International Equity 1/12/98 31.85% N/A 26.26% 25.39% N/A 22.45% 30.02% N/A 24.86%
Goldman Sachs VIT Global
Income 1/12/98 -1.01% N/A 3.59% -6.99% N/A -0.22% -2.39% N/A 2.19%
</TABLE>
PART 2 KEMPER VARIABLE SERIES
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all (reflects insurance
charges and charges and
portfolio expenses) portfolio expenses)
Portfolio 10 yrs 10 yrs 10 yrs
Inception or since or since or since
Portfolio Date 1 yr 5 yrs inception 1 yr 5 yrs inception 1 yr 5 yrs inception
- --------------- --------- ------ ------ ---------- ------ ----- --------- ----- ------- ----------
Kemper Small Cap Value 5/1/96 2.80% N/A 3.42% -3.28% N/A 0.67% 1.32% N/A 2.02%
Kemper Government
Securities 9/3/87 0.68% 7.46% 7.12% -5.32% 5.96% 5.62% -0.72% 6.06% 5.72%
Kemper Small Cap Growth 5/2/94 34.56% 28.92% 25.97% 28.03% 27.42% 24.47% 32.66% 27.52% 24.57%
Kemper-Dreman High
Return Equity 5/4/98 -11.16% N/A -5.28% -16.21% N/A -9.52% -11.62% N/A -6.68%
</TABLE>
PART 2 LIBERTY VARIABLE INVESTMENT TRUST
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all (reflects insurance
charges and charges and
portfolio expenses) portfolio expenses)
Portfolio 10 yrs 10 yrs 10 yrs
Inception or since or since or since
Portfolio Date 1 yr inception 1 yr inception 1 yr inception
- --------------- --------- ------ ---------- ----- --------- ----- ----------
Newport Tiger Fund,
Variable Series 5/1/95 68.01% 7.31% 61.28% 4.83% 65.94% 5.91%
</TABLE>
PART 2 MFS VARIABLE INSURANCE TRUST
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all charges (reflects insurance
and portfolio expenses) and portfolio expenses)
------------------ ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Portfolio
inception since since since
Portfolio date 1 yr 5 yrs inception 1 yr 5 yrs inception 1 yr 5 yrs inception
- -------------- ---------- ----- ----- --------- ---- ----- --------- ---- ------ ---------
MFS Emerging Growth 7/24/95 76.71% N/A 36.44% 69.59% N/A 33.91% 74.26% N/A 35.04%
MFS Research 7/26/95 24.05% N/A 22.86% 17.70% N/A 20.33% 22.32% N/A 21.46%
MFS Growth With Income 10/9/95 6.69% N/A 21.12% 0.60% N/A 18.54% 5.21% N/A 19.72%
MFS High Income 7/26/95 6.44% N/A 8.24% 0.36% N/A 5.71% 4.97% N/A 6.84%
MFS Global Governments 6/14/94 -2.50% 4.36% 4.07% -8.45% 2.86% 2.57% -3.85% 2.96% 2.67%
MFS Bond 10/24/95 -1.56% N/A 4.82% -6.70% N/A 2.23% -2.10% N/A 3.42%
</TABLE>
PART 2 OPPENHEIMER VARIABLE ACCOUNT FUNDS
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all (reflects insurance
charges and charges and
portfolio expenses) portfolio expenses)
Portfolio 10 yrs 10 yrs 10 yrs
Inception or since or since or since
Portfolio Date 1 yr 5 yrs inception 1 yr 5 yrs inception 1 yr 5 yrs inception
- --------------- --------- ------ ------ ---------- ------ ----- --------- ----- ------- ----------
Oppenheimer High Income
Fund/VA 4/30/86 4.29% 10.24% 12.65% -1.76% 8.74% 11.15% 2.84% 8.84% 11.25%
Oppenheimer Bond Fund/VA 4/3/85 -1.52% 7.10% 7.76% -7.49% 5.60% 6.26% -2.89% 5.70% 6.36%
Oppenheimer Capital
Appreciation Fund/VA 4/3/85 41.66% 30.65% 18.46% 35.05% 29.15% 16.96% 39.69% 29.25% 17.06%
Oppenheimer Main Street
Growth & Income Fund/VA 7/5/95 21.71% N/A 25.80% 15.39% N/A 23.28% 20.01% N/A 24.40%
Oppenheimer Strategic Bond
Fund/VA 5/3/93 2.83% 8.25% 6.18% -3.20% 6.75% 4.68% 1.40% 6.85% 4.78%
</TABLE>
PART 2 PUTNAM VARIABLE TRUST
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all (reflects insurance
charges and charges and
portfolio expenses) portfolio expenses)
Portfolio 10 yrs 10 yrs 10 yrs
Inception or since or since or since
Portfolio Date 1 yr 5 yrs inception 1 yr 5 yrs inception 1 yr 5 yrs inception
- --------------- --------- ------ ------ ---------- ------ ----- --------- ----- ------- ----------
Putnam VT Growth & Income
Class IA Shares 2/1/88 1.59% 19.40% 14.00% -4.43% 17.90% 12.50% 0.17% 18.00% 12.60%
Putnam VT New Value Class
IA Shares 1/2/97 0.27% N/A 7.83% -5.73% N/A 4.80% -1.13% N/A 6.43%
Putnam VT Vista Class IA
Shares 1/2/97 52.90% N/A 31.14% 46.12% N/A 28.11% 50.77% N/A 29.74%
Putnam VT International
Growth Class IA Shares 1/2/97 60.13% N/A 30.29% 53.26% N/A 27.26% 57.92% N/A 28.89%
Putnam VT International
New Opportunities Class
IA Shares 1/2/97 102.95% N/A 32.92% 95.45% N/A 29.89% 100.15% N/A 31.52%
</TABLE>
PART 2 FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST, CLASS 1 SHARES
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all (reflects insurance
charges and charges and
portfolio expenses) portfolio expenses)
Portfolio 10 yrs 10 yrs 10 yrs
Portfolio Inception or since or since or since
Class 1 Shares Date 1 yr 5 yrs inception 1 yr 5 yrs inception 1 yr 5 yrs inception
- ------------------ --------- ------ ------ ---------- ------ ----- --------- ----- ------- ----------
Templeton Global Income
Securities (1) 1/24/89 -5.79% 5.39% 5.88% -11.79% 3.89% 4.38% -7.19% 3.99% 4.48%
Templeton Growth
Securities (2) 3/15/94 21.04% 15.40% 13.76% 15.04% 13.90% 12.26% 19.64% 14.00% 12.36%
Templeton International
Securities (3) 5/01/92 23.61% 17.21% 15.36% 17.61% 15.71% 13.86% 22.21% 15.81% 13.96%
Templeton Developing
Markets Securities(4) 3/04/96 53.84% N/A -5.30% 47.84% N/A -7.99% 52.44% N/A -6.70%
Franklin Small Cap (5) 11/01/95 96.94% N/A 30.41% 90.94% N/A 27.81% 95.54% N/A 29.01%
Franklin Large Cap
Growth Securities(6) 5/01/96 31.65% N/A 22.85% 25.65% N/A 20.10% 30.25% N/A 21.45%
Templeton Mutual Shares
Securities (7) 11/08/96 13.40% N/A 10.86% 7.40% N/A 7.91% 12.00% N/A 9.46%
Templeton Asset
Strategy (8) 8/24/88 22.86% 17.08% 13.08% 16.86% 15.58% 11.58% 21.46% 15.68% 11.68%
(1) Effective May 1, 2000, the Templeton Bond Fund (previously offered under
the contract) merged into the Templeton Global Income Securities Fund.
Performance shown reflects historical performance and inception date of the
Templeton Global Income Securities Fund.
(2) Effective May 1, 2000, the Templeton Stock Fund (previously offered under
the contract) merged into the Templeton Growth Securities Fund. Performance shown
reflects historical performance and inception date of the Templeton Growth
Securities Fund.
(3) Previously, Templeton International Fund. Effective May 1, 2000, the
Templeton International Securities Fund merged into the Templeton International
Equity Fund. Performance shown reflects historical performance and inception date
of the Templeton International Securities Fund.
(4) Previously, Templeton Developing Markets Fund. Effective May 1, 2000, the
Templeton Developing Markets Fund merged into the Templeton Developing Markets
Equity Fund. Performance shown reflects historical performance and inception date
of the Templeton Developing Markets Securities Fund.
(5) Effective May 1, 2000, the Franklin Small Cap Investments Fund (previously
offered under the contract) merged into the Franklin Small Cap Fund. Performance
shown reflects historical performance and inception date of the Franklin Small Cap
Fund.
(6) Effective May 1, 2000, the Franklin Large Cap Growth Investments Fund
(previously offered under the contract) merged into the Franklin Large Cap Growth
Securities Fund. Performance shown reflects historical performance and inception
date of the Franklin Large Cap Growth Securities Fund.
(7) Effective May 1, 2000, the Mutual Shares Investments Fund (previously
offered under the contract) merged into the Mutual Shares Securities Fund.
Performance shown reflects historical performance and inception date of the
Mutual Shares Securities Fund.
(8) Previously, Templeton Asset Allocation Fund. Effective May 1, 2000, the
Templeton Asset Strategy Fund merged into the Templeton Global Asset Allocation
Fund. Performance shown reflects historical performance and inception date
of the Templeton Asset Strategy Fund.
</TABLE>
PART 2 VARIABLE INSURANCE PRODUCTS FUND, VARIABLE INSURANCE PRODUCTS FUND II,
VARIABLE INSURANCE PRODUCTS FUND III
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED 12/31/99:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Performance Accumulation Unit Performance
Column A Column B Column C
(reflects all (reflects insurance
charges and charges and
Portfolio portfolio expenses) portfolio expenses)
inception
Portfolio date 1 yr 5 yrs 10 yrs 1 yr 5 yrs 10 yrs 1 yr 5 yrs 10 yrs
- ---------------- --------- --------- ------ ------------ ------- --------- ------------- ------- --------- -------
VIP Growth 10/9/86 37.44% 29.74% 19.94% 30.93% 28.24% 18.44% 35.57% 28.34% 18.54%
VIP Equity-Income 10/9/86 6.33% 18.61% 14.49% 0.28% 17.11% 12.99% 4.89% 17.21% 13.09%
VIP II Contrafund 1/3/95 24.25% N/A 27.73% 17.96% N/A 25.31% 22.58% N/A 26.33%
VIP III Growth
Opportunities 1/3/95 4.27% N/A 21.51% -1.82% N/A 19.09% 2.78% N/A 20.11%
VIP III Growth
& Income 12/31/96 9.17% N/A 22.11% 3.05% N/A 19.09% 7.66% N/A 20.71%
</TABLE>
- --------------------------
- --------------------------- STAMP
- ---------------------------
Cova Financial Life Insurance Company
Attn: Variable Products
One Tower Lane
Suite 3000
Oakbrook Terrace, Illinois 60181-4644
Please send me, at no charge, the Statement of Additional Information
dated May 1, 2000 for The Annuity Contract issued by Cova.
(Please print or type and fill in all information)
---------------------------------------------------------------------------
Name
---------------------------------------------------------------------------
Address
---------------------------------------------------------------------------
City State Zip Code
PART B
STATEMENT OF ADDITIONAL INFORMATION
INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACT
issued by
COVA VARIABLE ANNUITY ACCOUNT FIVE
AND
COVA FINANCIAL LIFE INSURANCE COMPANY
THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS DATED MAY 1, 2000 FOR THE INDIVIDUAL
FIXED AND VARIABLE DEFERRED ANNUITY CONTRACT WHICH IS DESCRIBED HEREIN.
THE PROSPECTUS CONCISELY SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR
OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS CALL OR WRITE THE
COMPANY AT: One Tower Lane, Suite 3000, Oakbrook Terrace, Illinois 60181-4644,
(800) 831-5433.
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED MAY 1, 2000.
TABLE OF CONTENTS
Page
COMPANY ..................................................................
EXPERTS ..................................................................
LEGAL OPINIONS.............................................................
DISTRIBUTION...............................................................
Reduction or Elimination of the Withdrawal Charge.................
CALCULATION OF PERFORMANCE INFORMATION.....................................
Total Return......................................................
Historical Unit Values............................................
Reporting Agencies................................................
Performance Information...........................................
FEDERAL TAX STATUS.........................................................
General .........................................................
Diversification...................................................
Multiple Contracts...............................................
Contracts Owned by Other than Natural Persons....................
Tax Treatment of Assignments or Transfer of Ownership............
Income Tax Withholding...........................................
Tax Treatment of Withdrawals - Non-Qualified Contracts...........
Qualified Plans..................................................
Tax Treatment of Withdrawals - Qualified Contracts...............
Tax Sheltered Annuities - Withdrawal Limitations.................
ANNUITY PROVISIONS........................................................
Variable Annuity.................................................
Fixed Annuity....................................................
Annuity Unit Value...............................................
Net Investment Factor............................................
Mortality and Expense Guarantee..................................
FINANCIAL STATEMENTS......................................................
COMPANY
Cova Financial Life Insurance Company (the "Company") was originally
incorporated on September 6, 1972 as Industrial Indemnity Life Insurance
Company, a California corporation and changed its name on January 1, 1986 to
Xerox Financial Life Insurance Company. The Company presently is licensed to do
business in the state of California. On June 1, 1995 a wholly-owned subsidiary
of General American Life Insurance Company ("General American") purchased Xerox
Financial Services Life Insurance Company ("Xerox Life"), an affiliate of the
Company, from Xerox Financial Services, Inc. The acquisition of Xerox Life
included related companies, including the Company. On June 1, 1995 the Company
changed its name to Cova Financial Life Insurance Company.
On January 6, 2000, Metropolitan Life Insurance Company (MetLife) acquired
GenAmerica Corporation, the ultimate parent company of Cova Financial Services
Life Insurance Company (Cova Life), the parent company of Cova. The acquisition
of GenAmerica Corporation does not affect policy benefits or any other terms or
conditions under your contract.
EXPERTS
The balance sheets of the Company as of December 31, 1999 and 1998, and the
related statements of income, shareholder's equity, and cash flows for each of
the years in the three-year period ended December 31, 1999, and the statement of
assets and liabilities of the Separate Account as of December 31, 1999, and the
related statement of operations for the year then ended and the statements of
changes in net assets for the two years then ended, have been included herein in
reliance upon the reports of KPMG LLP, independent certified public accountants,
appearing elsewhere herein, and upon the authority of said firm as experts in
accounting and auditing.
LEGAL OPINIONS
Blazzard, Grodd & Hasenauer, P.C., Westport, Connecticut has provided advice on
certain matters relating to the federal securities and income tax laws in
connection with the Contracts.
DISTRIBUTION
Cova Life Sales Company ("Life Sales") acts as the distributor. Prior to June 1,
1995, Cova Life Sales Company was known as Xerox Life Sales Company. Life Sales
is an affiliate of the Company. The offering is on a continuous basis.
Reduction or Elimination of the Withdrawal Charge
The amount of the Withdrawal Charge on the Contracts may be reduced or
eliminated when sales of the Contracts are made to individuals or to a group of
individuals in a manner that results in savings of sales expenses. The
entitlement to reduction of the Withdrawal Charge will be determined by the
Company after examination of all the relevant factors such as:
1. The size and type of group to which sales are to be made will be
considered. Generally, the sales expenses for a larger group are less than for a
smaller group because of the ability to implement large numbers of Contracts
with fewer sales contacts.
2. The total amount of purchase payments to be received will be
considered. Per Contract sales expenses are likely to be less on larger purchase
payments than on smaller ones.
3. Any prior or existing relationship with the Company will be
considered. Per Contract sales expenses are likely to be less when there is a
prior existing relationship because of the likelihood of implementing the
Contract with fewer sales contacts.
4. There may be other circumstances, of which the Company is not
presently aware, which could result in reduced sales expenses.
If, after consideration of the foregoing factors, the Company determines that
there will be a reduction in sales expenses, the Company may provide for a
reduction or elimination of the Withdrawal Charge.
The Withdrawal Charge may be eliminated when the Contracts are issued to an
officer, director or employee of the Company or any of its affiliates. In no
event will any reduction or elimination of the Withdrawal Charge be permitted
where the reduction or elimination will be unfairly discriminatory to any
person.
CALCULATION OF PERFORMANCE INFORMATION
Total Return
From time to time, the Company may advertise performance data. Such data will
show the percentage change in the value of an Accumulation Unit based on the
performance of an investment portfolio over a period of time, usually a calendar
year, determined by dividing the increase (decrease) in value for that unit by
the Accumulation Unit value at the beginning of the period.
Any such advertisement will include total return figures for the time periods
indicated in the advertisement. Such total return figures will reflect the
deduction of a 1.25% Mortality and Expense Risk Premium, a .15% Administrative
Expense Charge, the expenses for the underlying investment portfolio being
advertised and any applicable Contract Maintenance Charges and Withdrawal
Charges.
The hypothetical value of a Contract purchased for the time periods described in
the advertisement will be determined by using the actual Accumulation Unit
values for an initial $1,000 purchase payment, and deducting any applicable
Contract Maintenance Charges and any applicable Withdrawal Charges to arrive at
the ending hypothetical value. The average annual total return is then
determined by computing the fixed interest rate that a $1,000 purchase payment
would have to earn annually, compounded annually, to grow to the hypothetical
value at the end of the time periods described. The formula used in these
calculations is:
n
P (1 + T) = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the time periods used
(or fractional portion thereof) of a hypothetical $1,000 payment
made at the beginning of the time periods used.
The Company may also advertise performance data which will be calculated in the
same manner as described above but which will not reflect the deduction of any
Withdrawal Charge. The deduction of any Withdrawal Charge would reduce any
percentage increase or make greater any percentage decrease.
You should note that the investment results of each investment portfolio will
fluctuate over time, and any presentation of the investment portfolio's total
return for any period should not be considered as a representation of what an
investment may earn or what your total return may be in any future period.
Historical Unit Values
The Company may also show historical Accumulation Unit values in certain
advertisements containing illustrations. These illustrations will be based on
actual Accumulation Unit values.
In addition, the Company may distribute sales literature which compares the
percentage change in Accumulation Unit values for any of the investment
portfolios against established market indices such as the Standard & Poor's 500
Composite Stock Price Index, the Dow Jones Industrial Average or other
management investment companies which have investment objectives similar to the
investment portfolio being compared. The Standard & Poor's 500 Composite Stock
Price Index is an unmanaged, unweighted average of 500 stocks, the majority of
which are listed on the New York Stock Exchange. The Dow Jones Industrial
Average is an unmanaged, weighted average of thirty blue chip industrial
corporations listed on the New York Stock Exchange. Both the Standard & Poor's
500 Composite Stock Price Index and the Dow Jones Industrial Average assume
quarterly reinvestment of dividends.
Reporting Agencies
The Company may also distribute sales literature which compares the performance
of the Accumulation Unit values of the Contracts with the unit values of
variable annuities issued by other insurance companies. Such information will be
derived from the Lipper Variable Insurance Products Performance Analysis
Service, the VARDS Report or from Morningstar.
The Lipper Variable Insurance Products Performance Analysis Service is published
by Lipper Analytical Services, Inc., a publisher of statistical data which
currently tracks the performance of almost 4,000 investment companies. The
rankings compiled by Lipper may or may not reflect the deduction of asset-based
insurance charges. The Company's sales literature utilizing these rankings will
indicate whether or not such charges have been deducted. Where the charges have
not been deducted, the sales literature will indicate that if the charges had
been deducted, the ranking might have been lower.
The VARDS Report is a monthly variable annuity industry analysis compiled by
Variable Annuity Research & Data Service of Roswell, Georgia and published by
Financial Planning Resources, Inc. The VARDS rankings may or may not reflect the
deduction of asset-based insurance charges. In addition, VARDS prepares risk
adjusted rankings, which consider the effects of market risk on total return
performance. This type of ranking may address the question as to which funds
provide the highest total return with the least amount of risk. Other ranking
services may be used as sources of performance comparison, such as
CDA/Weisenberger.
Morningstar rates a variable annuity against its peers with similar investment
objectives. Morningstar does not rate any variable annuity that has less than
three years of performance data.
Performance Information
Certain Portfolios have been in existence for some time and consequently have an
investment performance history. In order to demonstrate how the investment
experience of certain portfolios affects Accumulation Unit values, performance
information was developed. The information is based upon the historical
experience of the portfolios and is for the periods shown. The prospectus
contains performance information.
Future performance of the portfolios will vary and the results shown are not
necessarily representative of future results. Performance for periods ending
after those shown may vary substantially from the examples shown. The
performance of the portfolios is calculated for a specified period of time by
assuming an initial Purchase Payment of $1,000 allocated to the Portfolio. There
are performance figures for the Accumulation Units which reflect the insurance
charges as well as the portfolio expenses. There are also performance figures
for the Accumulation Units which reflect the insurance charges, the contract
maintenance charge, the portfolio expenses, and assume that you make a
withdrawal at the end of the period and therefore the withdrawal charge is
reflected. The percentage increases (decreases) are determined by subtracting
the initial Purchase Payment from the ending value and dividing the remainder by
the beginning value. The performance may also show figures when no withdrawal is
assumed.
FEDERAL TAX STATUS
General
NOTE: The following description is based upon the Company's understanding of
current federal income tax law applicable to annuities in general. The Company
cannot predict the probability that any changes in such laws will be made.
Purchasers are cautioned to seek competent tax advice regarding the possibility
of such changes. The Company does not guarantee the tax status of the contracts.
Purchasers bear the complete risk that the contracts may not be treated as
"annuity contracts" under federal income tax laws. It should be further
understood that the following discussion is not exhaustive and that special
rules not described herein may be applicable in certain situations. Moreover, no
attempt has been made to consider any applicable state or other tax laws.
Section 72 of the Internal Revenue Code of 1986, as amended (the "Code") governs
taxation of annuities in general. An Owner is not taxed on increases in the
value of a Contract until distribution occurs, either in the form of a lump sum
payment or as annuity payments under the Annuity Option selected. For a lump sum
payment received as a total withdrawal (total surrender), the recipient is taxed
on the portion of the payment that exceeds the cost basis of the Contract. For
Non-Qualified Contracts, this cost basis is generally the purchase payments,
while for Qualified Contracts there may be no cost basis. The taxable portion of
the lump sum payment is taxed at ordinary income tax rates.
For annuity payments, a portion of each payment in excess of an exclusion amount
is includible in taxable income. The exclusion amount for payments based on a
fixed annuity option is determined by multiplying the payment by the ratio that
the cost basis of the Contract (adjusted for any period or refund feature) bears
to the expected return under the Contract. The exclusion amount for payments
based on a variable annuity option is determined by dividing the cost basis of
the Contract (adjusted for any period certain or refund guarantee) by the number
of years over which the annuity is expected to be paid. Payments received after
the investment in the Contract has been recovered (i.e. when the total of the
excludable amount equals the investment in the Contract) are fully taxable. The
taxable portion is taxed at ordinary income tax rates. For certain types of
Qualified Plans there may be no cost basis in the Contract within the meaning of
Section 72 of the Code. Owners, Annuitants and Beneficiaries under the Contracts
should seek competent financial advice about the tax consequences of any
distributions.
The Company is taxed as a life insurance company under the Code. For federal
income tax purposes, the Separate Account is not a separate entity from
the Company, and its operations form a part of the Company.
Diversification
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not, in
accordance with regulations prescribed by the United States Treasury Department
("Treasury Department"), adequately diversified. Disqualification of the
Contract as an annuity contract would result in the imposition of federal income
tax to the Owner with respect to earnings allocable to the Contract prior to the
receipt of payments under the Contract. The Code contains a safe harbor
provision which provides that annuity contracts such as the Contract meet the
diversification requirements if, as of the end of each quarter, the underlying
assets meet the diversification standards for a regulated investment company and
no more than fifty-five percent (55%) of the total assets consist of cash, cash
items, U.S. Government securities and securities of other regulated investment
companies.
On March 2, 1989, the Treasury Department issued Regulations (Treas.
Reg.1.817-5), which established diversification requirements for the investment
portfolios underlying variable contracts such as the Contract. The Regulations
amplify the diversification requirements for variable contracts set forth in the
Code and provide an alternative to the safe harbor provision described above.
Under the Regulations, an investment portfolio will be deemed adequately
diversified if: (1) no more than 55% of the value of the total assets of the
portfolio is represented by any one investment; (2) no more than 70% of the
value of the total assets of the portfolio is represented by any two
investments; (3) no more than 80% of the value of the total assets of the
portfolio is represented by any three investments; and (4) no more than 90% of
the value of the total assets of the portfolio is represented by any four
investments.
The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable contracts
by Section 817(h) of the Code have been met, "each United States government
agency or instrumentality shall be treated as a separate issuer."
The Company intends that all investment portfolios underlying the Contracts will
be managed in such a manner as to comply with these diversification
requirements.
The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which Owner control of the
investments of the Separate Account will cause the Owner to be treated as the
owner of the assets of the Separate Account, thereby resulting in the loss of
favorable tax treatment for the Contract. At this time it cannot be determined
whether additional guidance will be provided and what standards may be contained
in such guidance.
The amount of Owner control which may be exercised under the Contract is
different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
owner was not the owner of the assets of the separate account. It is unknown
whether these differences, such as the Owner's ability to transfer among
investment choices or the number and type of investment choices available, would
cause the Owner to be considered as the owner of the assets of the Separate
Account resulting in the imposition of federal income tax to the Owner with
respect to earnings allocable to the Contract prior to receipt of payments under
the Contract.
In the event any forthcoming guidance or ruling is considered to set forth a new
position, such guidance or ruling will generally be applied only prospectively.
However, if such ruling or guidance was not considered to set forth a new
position, it may be applied retroactively resulting in the Owners being
retroactively determined to be the owners of the assets of the Separate Account.
Due to the uncertainty in this area, the Company reserves the right to modify
the Contract in an attempt to maintain favorable tax treatment.
Multiple Contracts
The Code provides that multiple non-qualified annuity contracts which are issued
within a calendar year to the same contract owner by one company or its
affiliates are treated as one annuity contract for purposes of determining the
tax consequences of any distribution. Such treatment may result in adverse tax
consequences including more rapid taxation of the distributed amounts from such
combination of contracts. For purposes of this rule, contracts received in a
Section 1035 exchange will be considered issued in the year of the exchange.
Owners should consult a tax adviser prior to purchasing more than one non-
qualified annuity contract in any calendar year.
Partial 1035 Exchanges
Section 1035 of the Code provides that an annuity contract may be exchanged in
a tax-free transaction for another annuity contract. Historically, it was
presumed that only the exchange of an entire contract, as opposed to a
partial exchange, would be accorded tax-free status. In 1998 in CONWAY VS.
COMMISSIONER, the Tax Court held that the direct transfer of a portion of
an annuity contract into another annuity contract qualified as a non-taxable
exchange. On November 22, 1999, the Internal Revenue Service filed an Action
on Decision which indicated that it acquiesced in the Tax Court decision in
CONWAY. However, in its acquiesence with the decision of the Tax Court, the
Internal Revenue Service stated that it will challenge transactions where
taxpayers enter into a series of partial exchanges and annuitizations as part
of a design to avoid application of the 10% premature distribution penalty or
other limitations imposed on annuity contracts under the Code. In the absence
of further guidance from the Internal Revenue Service it is unclear what
specific types of partial exchange designs and transactions will be challenged
by the Internal Revenue Service. Due to the uncertainty in this area owners
should consult their own tax advisers prior to entering into a partial exchange
of an annuity contract.
Contracts Owned by Other than Natural Persons
Under Section 72(u) of the Code, the investment earnings on premiums for the
Contracts will be taxed currently to the Owner if the Owner is a non-natural
person, e.g., a corporation or certain other entities. Such Contracts generally
will not be treated as annuities for federal income tax purposes. However, this
treatment is not applied to a Contract held by a trust or other entity as an
agent for a natural person nor to Contracts held by Qualified Plans. Purchasers
should consult their own tax counsel or other tax adviser before purchasing a
Contract to be owned by a non-natural person.
Tax Treatment of Assignments or Transfer of Ownership
An assignment, pledge or transfer of ownership of a Contract may be a taxable
event. Owners should therefore consult competent tax advisers should they wish
to assign, pledge or transfer ownership of their Contracts.
Death Benefits
Any death benefits paid under the Contract are taxable to the beneficiary. The
rules governing the taxation of payments from an annuity contract, as discussed
above, generally apply to the payment of death benefits and depend on whether
the death benefits are paid as a lump sum or as annuity payments. Estate taxes
may also apply.
Income Tax Withholding
All distributions or the portion thereof which is includible in the gross income
of the Owner are subject to federal income tax withholding. Generally, amounts
are withheld from periodic payments at the same rate as wages and at the rate of
10% from non-periodic payments. However, the Owner, in most cases, may elect not
to have taxes withheld or to have withholding done at a different rate.
Certain distributions from retirement plans qualified under Section 401 or
Section 403(b) of the Code, which are not directly rolled over to another
eligible retirement plan or individual retirement account or individual
retirement annuity, are subject to a mandatory 20% withholding for
federal income tax. The 20% withholding requirement generally does not apply to:
a) a series of substantially equal payments made at least annually for the life
or life expectancy of the participant or joint and last survivor expectancy of
the participant and a designated beneficiary, or for a specified period of 10
years or more; or b) distributions which are required minimum distributions; or
c) the portion of the distributions not includible in gross income (i.e. returns
of after-tax contributions); or d) hardship withdrawals. Participants should
consult their own tax counsel or other tax adviser regarding withholding
requirements.
Tax Treatment of Withdrawals - Non-Qualified Contracts
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the Contract Value exceeds the aggregate purchase
payments made, any amount withdrawn will be treated as coming first from the
earnings and then, only after the income portion is exhausted, as coming from
the principal. Withdrawn earnings are includible in gross income. It further
provides that a ten percent (10%) penalty will apply to the income portion of
any premature distribution. However, the penalty is not imposed on amounts
received: (a) after the taxpayer reaches age 59 1/2; (b) after the death of the
Owner; (c) if the taxpayer is totally disabled (for this purpose disability is
as defined in Section 72(m)(7) of the Code); (d) in a series of substantially
equal periodic payments made not less frequently than annually for the life (or
life expectancy) of the taxpayer or for the joint lives (or joint life
expectancies) of the taxpayer and his or her Beneficiary; (e) under an immediate
annuity; or (f) which are allocable to purchase payments made prior to August
14, 1982.
With respect to (d) above, if the series of substantially equal periodic
payments is modified before the later of your attaining age 59 1/2 or 5 years
from the date of the first periodic payment, then the tax for the year of the
modification is increased by an amount equal to the tax which would have been
imposed (the 10% penalty tax) but for the exception, plus interest for the tax
years in which the exception was used.
The above information does not apply to Qualified Contracts. However, separate
tax withdrawal penalties and restrictions may apply to such Qualified Contracts.
(See "Tax Treatment of Withdrawals - Qualified Contracts" below.)
Qualified Plans
The Contracts offered herein are designed to be suitable for use under various
types of Qualified Plans. Taxation of participants in each Qualified Plan varies
with the type of plan and terms and conditions of each specific plan. Owners,
Annuitants and Beneficiaries are cautioned that benefits under a Qualified Plan
may be subject to the terms and conditions of the plan regardless of the terms
and conditions of the Contracts issued pursuant to the plan. Some retirement
plans are subject to distribution and other requirements that are not
incorporated into the Company's administrative procedures. The Company is not
bound by the terms and conditions of such plans to the extent such terms
conflict with the terms of a Contract, unless the Company specifically consents
to be bound. Owners, participants and Beneficiaries are responsible for
determining that contributions, distributions and other transactions with
respect to the Contracts comply with applicable law. A qualified contract
will not provide any necessary or additional tax deferral if it used to fund a
qualified plan that is tax deferred. However, the contract has features and
benefits other than tax deferral that may make it an appropriate investment for
a qualified plan. Following are general descriptions of the types of Qualified
Plans with which the Contracts may be used. Such descriptions are not
exhaustive and are for general informational purposes only. The tax rules
regarding Qualified Plans are very complex and will have differing applications
depending on individual facts and circumstances. Each purchaser should obtain
competent tax advice prior to purchasing a Contract issued under a Qualified
Plan.
Contracts issued pursuant to Qualified Plans include special provisions
restricting Contract provisions that may otherwise be available as described
herein. Generally, Contracts issued pursuant to Qualified Plans are not
transferable except upon surrender or annuitization. Various penalty and excise
taxes may apply to contributions or distributions made in violation of
applicable limitations. Furthermore, certain withdrawal penalties and
restrictions may apply to surrenders from Qualified Contracts. (See "Tax
Treatment of Withdrawals - Qualified Contracts" below.)
On July 6, 1983, the Supreme Court decided in ARIZONA GOVERNING COMMITTEE V.
NORRIS that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women. The Contracts sold by the Company in connection with
Qualified Plans will utilize annuity tables which do not differentiate on the
basis of sex. Such annuity tables will also be available for use in connection
with certain non-qualified deferred compensation plans.
a. Tax-Sheltered Annuities
Section 403(b) of the Code permits the purchase of "tax-sheltered annuities" by
public schools and certain charitable, educational and scientific organizations
described in Section 501(c)(3) of the Code. These qualifying employers may make
contributions to the Contracts for the benefit of their employees. Such
contributions are not includible in the gross income of the employees until the
employees receive distributions from the Contracts. The amount of contributions
to the tax-sheltered annuity is limited to certain maximums imposed by the Code.
Furthermore, the Code sets forth additional restrictions governing such items as
transferability, distributions, nondiscrimination and withdrawals. (See "Tax
Treatment of Withdrawals - Qualified Contracts" and "Tax-Sheltered Annuities -
Withdrawal Limitations" below.) Employee loans are not allowable under the
Contracts. Any employee should obtain competent tax advice as to the tax
treatment and suitability of such an investment.
b. Individual Retirement Annuities
Section 408(b) of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity"
("IRA"). Under applicable limitations, certain amounts may be contributed to an
IRA which will be deductible from the individual's taxable income. These IRAs
are subject to limitations on eligibility, contributions, transferability and
distributions. (See "Tax Treatment of Withdrawals - Qualified Contracts" below.)
Under certain conditions, distributions from other IRAs and other Qualified
Plans may be rolled over or transferred on a tax-deferred basis into an IRA.
Sales of Contracts for use with IRAs are subject to special requirements imposed
by the Code, including the requirement that certain informational disclosure be
given to persons desiring to establish an IRA. Purchasers of Contracts to be
qualified as Individual Retirement Annuities should obtain competent tax advice
as to the tax treatment and suitability of such an investment.
Roth IRAs
Section 408A of the Code provides that beginning in 1998, individuals may
purchase a new type of non-deductible IRA, known as a Roth IRA. Purchase
payments for a Roth IRA are limited to a maximum of $2,000 per year and are not
deductible from taxable income. Lower maximum limitations apply to individuals
with adjusted gross incomes between $95,000 and $110,000 in the case of single
taxpayers, between $150,000 and $160,000 in the case of married taxpayers filing
joint returns, and between $0 and $10,000 in the case of married taxpayers
filing separately. An overall $2,000 annual limitation continues to apply to all
of a taxpayer's IRA contributions, including Roth IRA and non-Roth IRAs.
Qualified distributions from Roth IRAs are free from federal income tax. A
qualified distribution requires that an individual has held the Roth IRA for at
least five years and, in addition, that the distribution is made either after
the individual reaches age 59 1/2, on the individual's death or disability, or
as a qualified first-time home purchase, subject to a $10,000 lifetime maximum,
for the individual, a spouse, child, grandchild, or ancestor. Any distribution
which is not a qualified distribution is taxable to the extent of earnings in
the distribution. Distributions are treated as made from contributions first and
therefore no distributions are taxable until distributions exceed the amount of
contributions to the Roth IRA. The 10% penalty tax and the regular IRA
exceptions to the 10% penalty tax apply to taxable distributions from a Roth
IRA.
Amounts may be rolled over from one Roth IRA to another Roth IRA. Furthermore,
an individual may make a rollover contribution from a non-Roth IRA to a Roth
IRA, unless the individual has adjusted gross income over $100,000 or the
individual is a married taxpayer filing a separate return. The individual must
pay tax on any portion of the IRA being rolled over that represents income or a
previously deductible IRA contribution. However, for rollovers in 1998, the
individual may pay that tax ratably over the four taxable year period beginning
with tax year 1998.
Purchasers of Contracts to be qualified as a Roth IRA should obtain competent
tax advice as to the tax treatment and suitability of such an investment.
c. Pension and Profit-Sharing Plans
Sections 401(a) and 401(k) of the Code permit employers, including self-
employed individuals, to establish various types of retirement plans for
employees. These retirement plans may permit the purchase of the Contracts to
provide benefits under the Plan. Contributions to the Plan for the benefit of
employees will not be includible in the gross income of the employees until
distributed from the Plan. The tax consequences to participants may vary
depending upon the particular plan design. However, the Code places limitations
and restrictions on all Plans including on such items as: amount of allowable
contributions; form, manner and timing of distributions; transferability of
benefits; vesting and nonforfeitability of interests; nondiscrimination in
eligibility and participation; and the tax treatment of distributions,
withdrawals and surrenders. (See "Tax Treatment of Withdrawals - Qualified
Contracts" below.) Purchasers of Contracts for use with Pension or Profit
Sharing Plans should obtain competent tax advice as to the tax treatment and
suitability of such an investment.
Tax Treatment of Withdrawals - Qualified Contracts
In the case of a withdrawal under a Qualified Contract, a ratable portion of the
amount received is taxable, generally based on the ratio of the individual's
cost basis to the individual's total accrued benefit under the retirement plan.
Special tax rules may be available for certain distributions from a Qualified
Contract. Section 72(t) of the Code imposes a 10% penalty tax on the taxable
portion of any distribution from qualified retirement plans, including Contracts
issued and qualified under Code Sections 401 (Pension and Profit-Sharing Plans),
403(b) (Tax-Sheltered Annuities) and 408 and 408A (Individual Retirement
Annuities). To the extent amounts are not includible in gross income because
they have been rolled over to an IRA or to another eligible Qualified Plan, no
tax penalty will be imposed. The tax penalty will not apply to the following
distributions: (a) if distribution is made on or after the date on which the
Owner or Annuitant (as applicable) reaches age 59 1/2; (b) distributions
following the death or disability of the Owner or Annuitant (as applicable) (for
this purpose disability is as defined in Section 72(m)(7) of the Code); (c)
after separation from service, distributions that are part of substantially
equal periodic payments made not less frequently than annually for the life (or
life expectancy) of the Owner or Annuitant (as applicable) or the joint lives
(or joint life expectancies) of such Owner or Annuitant (as applicable) and his
or her designated Beneficiary; (d) distributions to an Owner or Annuitant (as
applicable) who separated from service after he has attained age 55; (e)
distributions made to the Owner or Annuitant (as applicable) to the extent such
distributions do not exceed the amount allowable as a deduction under Code
Section 213 to the Owner or Annuitant (as applicable) for amounts paid during
the taxable year for medical care; (f) distributions made to an alternate payee
pursuant to a qualified domestic relations order; (g) distributions made on
account of an IRS levy upon the Qualified Contract; (h) distributions from an
Individual Retirement Annuity for the purchase of medical insurance (as
described in Section 213(d)(1)(D) of the Code) for the Owner or Annuitant (as
applicable) and his or her spouse and dependents if the Owner or Annuitant (as
applicable) has received unemployment compensation for at least 12 weeks (this
exception will no longer apply after the Owner or Annuitant (as applicable) has
been re-employed for at least 60 days); (i) distributions from an Individual
Retirement Annuity made to the Owner or Annuitant (as applicable) to the extent
such distributions do not exceed the qualified higher education expenses (as
defined in Section 72(t)(7) of the Code) of the Owner or Annuitant (as
applicable) for the taxable year; and (j) distributions from an Individual
Retirement Annuity made to the Owner or Annuitant (as applicable) which are
qualified first-time home buyer distributions (as defined in Section 72(t)(8) of
the Code). The exceptions stated in (d) and (f) above do not apply in the case
of an Individual Retirement Annuity. The exception stated in (c) above applies
to an Individual Retirement Annuity without the requirement that there be a
separation from service.
With respect to (c) above, if the series of substantially equal periodic
payments is modified before the later of your attaining age 59 1/2 or 5 years
from the date of the first periodic payment, then the tax for the year of the
modification is increased by an amount equal to the tax which would have been
imposed (the 10% penalty tax) but for the exception, plus interest for the tax
years in which the exception was used.
Generally, distributions from a qualified plan must commence no later than April
1st of the calendar year following the later of (a) the year in which the
employee attains age 70 1/2, or (b) the calendar year in which the employee
retires. The date set forth in (b) does not apply to an Individual Retirement
Annuity. Required distributions must be over a period not exceeding the life
expectancy of the individual or the joint lives or life expectancies of the
individual and his or her designated beneficiary. If the required minimum
distributions are not made, a 50% penalty tax is imposed as to the amount not
distributed.
Tax Sheltered Annuities - Withdrawal Limitations
The Code limits the withdrawal of amounts attributable to contributions made
pursuant to a salary reduction agreement (as defined in Section 403(b)(11) of
the Code) to circumstances only when the Owner: (1) attains age 59 1/2; (2)
separates from service; (3) dies; (4) becomes disabled (within the meaning of
Section 72(m)(7) of the Code); or (5) in the case of hardship. However,
withdrawals for hardship are restricted to the portion of the Owner's Contract
Value which represents contributions made by the Owner and does not include any
investment results. The limitations on withdrawals became effective on January
1, 1989 and apply only to salary reduction contributions made after December 31,
1988, to income attributable to such contributions and to income attributable to
amounts held as of December 31, 1988. The limitations on withdrawals do not
affect transfers between Tax-Sheltered Annuity Plans. Owners should consult
their own tax counsel or other tax adviser regarding any distributions.
ANNUITY PROVISIONS
Variable Annuity
A variable annuity is an annuity with payments which: (1) are not predetermined
as to dollar amount; and (2) will vary in amount with the net investment results
of the applicable investment portfolio(s) of the Separate Account. At the
Annuity Date, the Contract Value in each investment portfolio will be applied to
the applicable Annuity Tables. The Annuity Table used will depend upon the
Annuity Option chosen. If, as of the Annuity Date, the then current Annuity
Option rates applicable to this class of Contracts provide a first Annuity
Payment greater than guaranteed under the same Annuity Option under this
Contract, the greater payment will be made. The dollar amount of Annuity
Payments after the first is determined as follows:
(1) the dollar amount of the first Annuity Payment is divided by the value of
an Annuity Unit as of the Annuity Date. This establishes the number of
Annuity Units for each monthly payment. The number of Annuity Units remains
fixed during the Annuity Payment period.
(2) the fixed number of Annuity Units is multiplied by the Annuity Unit value
for the last Valuation Period of the month preceding the month for which
the payment is due. This result is the dollar amount of the payment.
The total dollar amount of each Variable Annuity Payment is the sum of all
investment portfolios' Variable Annuity Payments reduced by the applicable
Contract Maintenance Charge.
Fixed Annuity
A fixed annuity is a series of payments made during the Annuity Period which are
guaranteed as to dollar amount by the Company and do not vary with the
investment experience of the Separate Account. The General Account Value on the
day immediately preceding the Annuity Date will be used to determine the Fixed
Annuity monthly payment. The first monthly Annuity Payment will be based upon
the Annuity Option elected and the appropriate Annuity Option Table.
Annuity Unit Value
The value of an Annuity Unit for each investment portfolio was arbitrarily set
initially at $10. This was done when the first investment portfolio shares were
purchased. The investment portfolio Annuity Unit value at the end of any
subsequent Valuation Period is determined by multiplying the investment
portfolio Annuity Unit value for the immediately preceding Valuation Period by
the product of (a) the Net Investment Factor for the day for which the Annuity
Unit value is being calculated, and (b) 0.999919.
Net Investment Factor
The Net Investment Factor for any investment portfolio for any Valuation Period
is determined by dividing:
(a) the Accumulation Unit value as of the close of the current Valuation
Period, by
(b) the Accumulation Unit value as of the close of the immediately preceding
Valuation Period.
The Net Investment Factor may be greater or less than one, as the Annuity Unit
value may increase or decrease.
Mortality and Expense Guarantee
The Company guarantees that the dollar amount of each Annuity Payment after the
first Annuity Payment will not be affected by variations in mortality or expense
experience.
FINANCIAL STATEMENTS
The financial statements of the Company included herein should be considered
only as bearing upon the ability of the Company to meet its obligations under
the Contracts.
COVA VARIABLE ANNUITY ACCOUNT FIVE
Financial Statements
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
INDEPENDENT AUDITORS' REPORT
The Contract Owners of Cova Variable
Annuity Account Five, Board of Directors
and Shareholder of Cova Financial Life
Insurance Company:
We have audited the accompanying statement of assets and liabilities of each
of the sub-accounts comprising Cova Variable Annuity Account Five of Cova
Financial Life Insurance Company (the Separate Account), as of December 31,
1999, and the related statement of operations for the year then ended and
the statements of changes in net assets for the two years then ended. These
financial statements are the responsibility of the Separate Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of December 31,
1999 by correspondence with transfer agents. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the sub-accounts of Cova
Variable Annuity Account Five of Cova Financial Life Insurance Company as of
December 31, 1999, and the results of their operations and the changes in
their net assets for each of the years presented, in conformity with
generally accepted accounting principles.
Chicago, Illinois
March 20, 2000
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<CAPTION>
Assets:
Investments:
Cova Series Trust (Cova):
<S> <C> <C> <C>
Lord Abbett Growth and Income Portfolio 2,039,841 shares at a net asset value of $24.070563 per share $ 49,100,130
Bond Debenture Portfolio 948,800 shares at a net asset value of $12.474609 per share 11,835,913
Developing Growth Portfolio 126,276 shares at a net asset value of $14.885144 per share 1,879,640
Large Cap Research Portfolio 138,994 shares at a net asset value of $14.991245 per share 2,083,694
Mid-Cap Value Portfolio 128,697 shares at a net asset value of $11.168093 per share 1,437,296
Quality Bond Portfolio 682,366 shares at a net asset value of $10.669328 per share 7,280,387
Small Cap Stock Portfolio 657,020 shares at a net asset value of $17.268582 per share 11,345,806
Large Cap Stock Portfolio 1,671,325 shares at a net asset value of $20.674865 per share 34,554,420
Select Equity Portfolio 1,412,512 shares at a net asset value of $16.112437 per share 22,759,008
International Equity Portfolio 844,627 shares at a net asset value of $16.225039 per share 13,704,098
General American Capital Company (GACC):
Money Market Fund 89,914 shares at a net asset value of $20.252283 per share 1,820,964
Russell Insurance Funds (Russell):
Multi-Style Equity Fund 187,441 shares at a net asset value of $16.79 per share 3,147,134
Aggressive Equity Fund 34,638 shares at a net asset value of $13.36 per share 462,767
Non-US Fund 102,456 shares at a net asset value of $14.19 per share 1,453,850
Core Bond Fund 238,515 shares at a net asset value of $9.64 per share 2,299,288
Real Estate Securities Fund 6,311 shares at a net asset value of $8.81 per share 55,599
AIM Variable Insurance Funds, Inc. (AIM):
AIM V.I. Value Fund 79,379 shares at a net asset value of $33.50 per share 2,659,202
AIM V.I. Capital Appreciation Fund 29,923 shares at a net asset value of $35.58 per share 1,064,656
AIM V.I. International Equity Fund 11,518 shares at a net asset value of $29.29 per share 337,362
Alliance Variable Products Series
Fund Inc. (Alliance):
Premier Growth Portfolio 61,706 shares at a net asset value of $40.45 per share 2,496,017
Real Estate Investment Portfolio 24,798 shares at a net asset value of $8.87 per share 219,954
Liberty Variable Investment Trust (Liberty):
Newport Tiger Fund, Variable Series 15,513 shares at a net asset value of $2.62 per share 40,645
Goldman Sachs Variable Insurance
Trust (Goldman Sachs):
Growth and Income Fund 25,922 shares at a net asset value of $10.89 per share 282,289
International Equity Fund 27,772 shares at a net asset value of $14.47 per share 401,861
Global Income Fund 3,399 shares at a net asset value of $9.83 per share 33,417
Kemper Variable Series (Kemper):
Kemper-Dreman High Return Equity Portfolio 103 shares at a net asset value of $0.896450 per share 93
Kemper Small Cap Growth Portfolio 47,879 shares at a net asset value of $2.653950 per share 127,069
Kemper Small Cap Value Portfolio 227,158 shares at a net asset value of $1.084940 per share 246,453
Kemper Government Securities Portfolio 189,965 shares at a net asset value of $1.156570 per share 219,707
MFS Variable Insurance Trust (MFS):
MFS Bond Series 9 shares at a net asset value of $10.93 per share 103
MFS Research Series 39,672 shares at a net asset value of $23.34 per share 925,952
MFS Growth with Income Series 67,354 shares at a net asset value of $21.31 per share 1,435,308
MFS Emerging Growth Series 38,060 shares at a net asset value of $37.94 per share 1,443,980
MFS/Foreign & Colonial Emerging Markets
Equity Series 4,289 shares at a net asset value of $8.15 per share 34,953
MFS High Income Series 19,410 shares at a net asset value of $11.49 per share 223,018
MFS Global Governments Series 1,074 shares at a net asset value of $10.03 per share 10,771
(Continued)
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<CAPTION>
Assets, continued:
Investments, continued:
Oppenheimer Variable Account Funds (Oppenheimer):
<S> <C> <C> <C>
Oppenheimer Capital Appreciation Fund 5,484 shares at a net asset value of $49.84 per share $ 273,307
Oppenheimer Main Street Growth & Income Fund 17,435 shares at a net asset value of $24.63 per share 429,413
Oppenheimer High Income Fund 24,355 shares at a net asset value of $10.72 per share 261,082
Oppenheimer Bond Fund 63,846 shares at a net asset value of $11.52 per share 735,510
Oppenheimer Strategic Bond Fund 15,562 shares at a net asset value of $4.97 per share 77,342
Putnam Variable Trust (Putnam)
Putnam VT Growth and Income Fund 56,064 shares at a net asset value of $26.80 per share 1,502,511
Putnam VT New Value Fund 2,050 shares at a net asset value of $11.86 per share 24,308
Putnam VT Vista Fund 15,240 shares at a net asset value of $20.68 per share 315,155
Putnam VT International Growth Fund 70,146 shares at a net asset value of $21.65 per share 1,518,658
Putnam VT International New Opportunities Fund 8,553 shares at a net asset value of $23.31 per share 199,370
Templeton Variable Products Series
Fund (Templeton):
Templeton Bond Fund 772 shares at a net asset value of $9.99 per share 7,717
Franklin Small Cap Investments Fund 8,109 shares at a net asset value of $15.79 per share 128,039
Templeton Stock Fund 4,745 shares at a net asset value of $24.39 per share 115,718
Templeton International Fund 25,496 shares at a net asset value of $22.25 per share 567,277
Templeton Developing Markets Fund 19,585 shares at a net asset value of $7.77 per share 152,177
Mutual Shares Investments Fund 9,274 shares at a net asset value of $10.63 per share 98,578
Franklin Growth Investments Fund 9,388 shares at a net asset value of $16.70 per share 156,777
Variable Insurance Products Fund, Fund II
and Fund III (Fidelity):
VIP Growth Portfolio 1,546 shares at a net asset value of $54.93 per share 84,936
VIP II Contrafund Portfolio 325 shares at a net asset value of $29.15 per share 9,488
VIP III Growth Opportunities Portfolio 274 shares at a net asset value of $23.15 per share 6,332
VIP III Growth & Income Portfolio 5,313 shares at a net asset value of $17.30 per share 91,921
VIP Equity-Income Portfolio 1,491 shares at a net asset value of $25.71 per share 38,327
American Century Variable Portfolios,
Inc. (American Century):
American Century VP Income & Growth Fund 1,313 shares at a net asset value of $8.00 per share 10,507
American Century VP International Fund 10 shares at a net asset value of $12.50 per share 125
American Century VP Value Fund 880 shares at a net asset value of $5.95 per share 5,234
Dreyfus Stock Index Fund (Dreyfus) 3 shares at a net asset value of $38.45 per share 103
Dreyfus Variable Investment Fund (Dreyfus):
Dreyfus VIF Disciplined Stock Portfolio 4 shares at a net asset value of $26.92 per share 103
Dreyfus VIF Capital Appreciation 3 shares at a net asset value of $39.87 per share 101
INVESCO Variable Investment Funds,
Inc. (INVESCO):
INVESCO VIF Dynamics Fund 1,151 shares at a net asset value of $18.90 per share 21,759
INVESCO VIF High Yield Fund 877 shares at a net asset value of $11.51 per share 10,093
PIMCO Variable Insurance Trust (PIMCO):
PIMCO High Yield Bond Portfolio 11 shares at a net asset value of $9.18 per share 101
PIMCO Low Duration Bond Portfolio 10 shares at a net asset value of $9.74 per share 100
PIMCO StocksPLUS Growth & Income Portfolio 8 shares at a net asset value of $13.56 per share 103
PIMCO Total Return Bond Portfolio 1,598 shares at a net asset value of $9.45 per share 15,103
Scudder Variable Life Investment Fund (Scudder):
International Portfolio 357 shares at a net asset value of $20.34 per share 7,270
--------------
Total assets $ 184,287,449
==============
(Continued)
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<CAPTION>
Liabilities:
<S> <C>
GAAC Money Market $ 139
Russell Multi-Style Equity 240
Russell Aggressive Equity 34
Russell Non-US 110
Russell Core Bond 177
Russell Real Estate Securities 4
AIM V.I. Value 202
AIM V.I. Capital Appreciation 81
AIM V.I. International Equity 26
Alliance Premier Growth 190
Alliance Real Estate 17
Liberty Newport Tiger Fund, Variable 3
Goldman Sachs Growth & Income 22
Goldman Sachs International Equity 31
Goldman Sachs Global Income 2
Kemper Small Cap Growth 10
Kemper Small Cap Value 19
Kemper Government Securities 17
MFS Research 70
MFS Growth with Income 110
MFS Emerging Growth 109
MFS/Foreign & Colonial Emerging Markets Equity 3
MFS High Income 17
MFS Global Governments 1
Oppenheimer Capital Appreciation 21
Oppenheimer Main Street Growth & Income 33
Oppenheimer High Income 20
Oppenheimer Bond 56
Oppenheimer Strategic Bond 6
Putnam VT Growth and Income 115
Putnam VT New Value 2
Putnam VT Vista 24
Putnam VT International Growth 115
Putnam International New Opportunities 15
Templeton Bond 1
Franklin Small Cap Investments 10
Templeton Stock 9
Templeton International 43
Templeton Developing Markets 12
Templeton Mutual Shares Investments 7
Franklin Growth Investments 12
Fidelity VIP Growth 6
Fidelity VIP II Contrafund 1
Fidelity VIP III Growth & Income 7
Fidelity VIP Equity-Income 3
American Century VP Income & Growth 6
American Century VP Value 3
INVESCO VIF Dynamics 9
INVESCO VIF High Yield 5
PIMCO Total Return Bond 8
Scudder International 3
----------------
$ 2,186
================
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<CAPTION>
Net assets:
Accumulation units:
<S> <C> <C> <C>
Cova Lord Abbett Growth and Income 1,241,056 accumulation units at $39.456973 per unit $ 48,968,314
Cova Bond Debenture 859,300 accumulation units at $13.765395 per unit 11,828,595
Cova Developing Growth 130,053 accumulation units at $14.452893 per unit 1,879,640
Cova Large Cap Research 142,370 accumulation units at $14.635794 per unit 2,083,694
Cova Mid-Cap Value 132,159 accumulation units at $10.875543 per unit 1,437,296
Cova Quality Bond 629,401 accumulation units at $11.567172 per unit 7,280,387
Cova Small Cap Stock 632,695 accumulation units at $17.932499 per unit 11,345,806
Cova Large Cap Stock 1,531,957 accumulation units at $22.548971 per unit 34,544,050
Cova Select Equity 1,237,436 accumulation units at $18.384684 per unit 22,749,876
Cova International Equity 838,996 accumulation units at $16.333932 per unit 13,704,098
GACC Money Market 157,984 accumulation units at $11.525403 per unit 1,820,824
Russell Multi-Style Equity 213,789 accumulation units at $14.719616 per unit 3,146,894
Russell Aggressive Equity 44,230 accumulation units at $10.461908 per unit 462,732
Russell Non-US 98,852 accumulation units at $14.706241 per unit 1,453,739
Russell Core Bond 220,655 accumulation units at $10.419502 per unit 2,299,112
Russell Real Estate Securities 5,917 accumulation units at $9.395293 per unit 55,595
AIM V.I. Value 158,759 accumulation units at $16.748633 per unit 2,659,000
AIM V.I. Capital Appreciation 63,264 accumulation units at $16.827440 per unit 1,064,575
AIM V.I. International Equity 19,322 accumulation units at $17.458837 per unit 337,336
Alliance Premier Growth 130,836 accumulation units at $19.075994 per unit 2,495,827
Alliance Real Estate Investment 29,380 accumulation units at $7.486033 per unit 219,937
Liberty Newport Tiger Fund, Variable 2,639 accumulation units at $15.397535 per unit 40,642
Goldman Sachs Growth and Income 27,398 accumulation units at $10.302541 per unit 282,267
Goldman Sachs International Equity 27,069 accumulation units at $14.844433 per unit 401,830
Goldman Sachs Global Income 3,165 accumulation units at $10.556976 per unit 33,414
Kemper-Dreman High Return Equity 10 accumulation units at $9.270000 per unit 93
Kemper Small Cap Growth 8,195 accumulation units at $15.505196 per unit 127,059
Kemper Small Cap Value 27,733 accumulation units at $8.886027 per unit 246,434
Kemper Government Securities 20,807 accumulation units at $10.558404 per unit 219,690
MFS Bond 10 accumulation units at $10.288000 per unit 103
MFS Research 62,149 accumulation units at $14.897867 per unit 925,882
MFS Growth with Income 112,973 accumulation units at $12.703932 per unit 1,435,199
MFS Emerging Growth 62,562 accumulation units at $23.079105 per unit 1,443,871
MFS/Foreign & Colonial Emerging
Markets Equity 3,897 accumulation units at $8.967637 per unit 34,950
MFS High Income 21,540 accumulation units at $10.352934 per unit 223,001
MFS Global Governments 1,050 accumulation units at $10.252619 per unit 10,770
(Continued)
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<CAPTION>
Net assets, continued:
Accumulation units:
<S> <C> <C> <C>
Oppenheimer Capital Appreciation 15,979 accumulation units at $17.103249 per unit $ 273,287
Oppenheimer Main Street Growth & Income 34,600 accumulation units at $12.409773 per unit 429,380
Oppenheimer High Income 25,621 accumulation units at $10.189165 per unit 261,062
Oppenheimer Bond 71,773 accumulation units at $10.246949 per unit 735,453
Oppenheimer Strategic Bond 7,503 accumulation units at $10.306821 per unit 77,336
Putnam VT Growth and Income 131,527 accumulation units at $11.422706 per unit 1,502,396
Putnam VT New Value 2,342 accumulation units at $10.379438 per unit 24,306
Putnam VT Vista 17,707 accumulation units at $17.797452 per unit 315,132
Putnam VT International Growth 81,982 accumulation units at $18.522808 per unit 1,518,543
Putnam VT International New Opportunities 8,721 accumulation units at $22.858952 per unit 199,355
Templeton Bond 795 accumulation units at $9.702219 per unit 7,716
Franklin Small Cap Investments 7,226 accumulation units at $17.718917 per unit 128,030
Templeton Stock 8,686 accumulation units at $13.322067 per unit 115,709
Templeton International 50,837 accumulation units at $11.157985 per unit 567,234
Templeton Developing Markets 13,256 accumulation units at $11.479237 per unit 152,165
Templeton Mutual Shares Investments 9,448 accumulation units at $10.433275 per unit 98,571
Franklin Growth Investments 10,673 accumulation units at $14.687812 per unit 156,765
Fidelity VIP Growth 4,777 accumulation units at $17.780613 per unit 84,930
Fidelity VIP II Contrafund 623 accumulation units at $15.235791 per unit 9,487
Fidelity VIP III Growth Opportunities 521 accumulation units at $12.142823 per unit 6,332
Fidelity VIP III Growth & Income 6,964 accumulation units at $13.198268 per unit 91,914
Fidelity VIP Equity-Income 3,423 accumulation units at $11.196008 per unit 38,324
American Century VP Income & Growth 1,017 accumulation units at $10.324878 per unit 10,501
American Century VP International 10 accumulation units at $12.517000 per unit 125
American Century VP Value 546 accumulation units at $9.586953 per unit 5,231
Dreyfus Stock Index 10 accumulation units at $10.336000 per unit 103
Dreyfus VIF Disciplined Stock 10 accumulation units at $10.306000 per unit 103
Dreyfus VIF Capital Appreciation 10 accumulation units at $10.128000 per unit 101
INVESCO VIF Dynamics 1,951 accumulation units at $11.148744 per unit 21,750
INVESCO VIF High Yield 996 accumulation units at $10.122749 per unit 10,088
PIMCO High Yield Bond 10 accumulation units at $10.078000 per unit 101
PIMCO Low Duration Bond 10 accumulation units at $9.969000 per unit 100
PIMCO StocksPLUS Growth & Income 10 accumulation units at $10.311000 per unit 103
PIMCO Total Return Bond 1,525 accumulation units at $9.898482 per unit 15,095
Scudder International 624 accumulation units at $11.637458 per unit 7,267
----------------
184,126,627
Annuity units:
Cova Lord Abbett Growth and Income 4,367 annuity units at $30.184634 per unit 131,816
Cova Bond Debenture 564 annuity units at $12.975024 per unit 7,318
Cova Large Cap Stock 488 annuity units at $21.254267 per unit 10,370
Cova Select Equity 527 annuity units at $17.329070 per unit 9,132
----------------
Total net assets $ 184,285,263
================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Year ended December 31, 1999
<TABLE>
<CAPTION>
Cova
----------------------------------------------------------------------------------------
VKAC Lord Abbett
Growth Growth
Quality Money Stock and and Bond Developing
Income Market Index Income Income Debenture Growth
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends $ 27,755 223 13,623 13,703 - 213,945 -
----------- ----------- ----------- ----------- ----------- ----------- -----------
Expenses:
Mortality and expense risk 210 73 637 581 541,689 132,874 15,457
Administrative fee 25 9 76 70 65,003 15,945 1,855
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total expenses 235 82 713 651 606,692 148,819 17,312
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net investment income (expense) 27,520 141 12,910 13,052 (606,692) 65,126 (17,312)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares (16,883) - 308,128 112,186 84,440 22,689 3,868
Realized gain distributions - - 232,665 207,864 - 69,331 -
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net realized gain (loss) (16,883) - 540,793 320,050 84,440 92,020 3,868
----------- ----------- ----------- ----------- ----------- ----------- -----------
Change in unrealized appreciation (19,209) - (491,713) (316,285) 4,841,111 63,985 402,539
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from operations $ (8,572) 141 61,990 16,817 4,318,859 221,131 389,095
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Year ended December 31, 1999
<TABLE>
<CAPTION>
Cova
----------------------------------------------------------------------------------------
Large Small Large
Cap Mid-Cap Quality Cap Cap Select International
Research Value Bond Stock Stock Equity Equity
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 2,277 1,536 81,795 24,018 42,000 53,137 55,097
----------- ----------- ----------- ----------- ----------- ----------- -----------
Expenses:
Mortality and expense risk 15,737 14,678 91,927 107,750 375,738 255,866 139,751
Administrative fee 1,888 1,761 11,031 12,930 45,088 30,704 16,770
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total expenses 17,625 16,439 102,958 120,680 420,826 286,570 156,521
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net investment income (expense) (15,348) (14,903) (21,163) (96,662) (378,826) (233,433) (101,424)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares 5,023 8,245 12,963 93,813 451,839 192,962 118,922
Realized gain distributions - - 40,932 - 916,687 1,803,409 147,249
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net realized gain (loss) 5,023 8,245 53,895 93,813 1,368,526 1,996,371 266,171
----------- ----------- ----------- ----------- ----------- ----------- -----------
Change in unrealized appreciation 318,972 59,675 (245,367) 3,442,246 3,428,923 (112,938) 2,686,189
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from operations $ 308,647 53,017 (212,635) 3,439,397 4,418,623 1,650,000 2,850,936
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Year ended December 31, 1999
<TABLE>
<CAPTION>
GACC Lord Abbett Russell
----------- ----------- --------------------------------------------------------------
Growth Multi- Real
Money and Style Aggressive Core Estate
Market Income Equity Equity Non-US Bond Securities
----------- ----------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ - - 13,821 924 14,139 98,425 1,818
----------- ----------- ----------- ----------- ----------- ---------- -----------
Expenses:
Mortality and expense risk 20,952 10,297 23,704 3,514 10,003 20,437 136
Administrative fee 2,514 1,236 2,844 422 1,200 2,452 16
----------- ----------- ----------- ----------- ----------- ---------- -----------
Total expenses 23,466 11,533 26,548 3,936 11,203 22,889 152
----------- ----------- ----------- ----------- ----------- ---------- -----------
Net investment income (expense) (23,466) (11,533) (12,727) (3,012) 2,936 75,536 1,666
----------- ----------- ----------- ----------- ----------- ---------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares 43,206 4,505,534 3,410 258 8,592 (12,178) 1
Realized gain distributions - - 153,378 1,632 29,827 55,059 -
----------- ----------- ----------- ----------- ----------- ---------- -----------
Net realized gain (loss) 43,206 4,505,534 156,788 1,890 38,419 42,881 1
----------- ----------- ----------- ----------- ----------- ---------- -----------
Change in unrealized appreciation 41,929 (2,782,796) 144,413 40,836 257,725 (145,900) (393)
----------- ----------- ----------- ----------- ----------- ---------- -----------
Net increase (decrease) in net
assets from operations $ 61,669 1,711,205 288,474 39,714 299,080 (27,483) 1,274
=========== =========== =========== =========== =========== ========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Year ended December 31, 1999
<TABLE>
<CAPTION>
AIM Alliance Liberty Goldman Sachs
------------------------------------ ------------------------ ---------- -------------
Newport
V.I. Real Tiger Growth
V.I. Capital International Premier Estate Fund, and
V.I. Value Appreciation Equity Growth Investment Variable Income
----------- ----------- ----------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 6,695 604 2,148 - 7,819 263 3,086
----------- ----------- ----------- ----------- ----------- ---------- -------------
Expenses:
Mortality and expense risk 13,931 3,959 2,744 20,892 2,378 367 2,339
Administrative fee 1,671 475 329 2,507 285 44 281
----------- ----------- ----------- ----------- ----------- ---------- -------------
Total expenses 15,602 4,434 3,073 23,399 2,663 411 2,620
----------- ----------- ----------- ----------- ----------- ---------- -------------
Net investment income (expense) (8,907) (3,830) (925) (23,399) 5,156 (148) 466
----------- ----------- ----------- ----------- ----------- ---------- -------------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares 5,130 1,592 631 27,142 (4,604) 106 359
Realized gain distributions 35,012 18,846 9,013 21,117 - - -
----------- ----------- ----------- ----------- ----------- ---------- -------------
Net realized gain (loss) 40,142 20,438 9,644 48,259 (4,604) 106 359
----------- ----------- ----------- ----------- ----------- ---------- -------------
Change in unrealized appreciation 311,587 206,131 107,456 463,999 (13,176) 15,947 6,892
----------- ----------- ----------- ----------- ----------- ---------- -------------
Net increase (decrease) in net
assets from operations $ 342,822 222,739 116,175 488,859 (12,624) 15,905 7,717
=========== =========== =========== =========== =========== ========== =============
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Year ended December 31, 1999
<TABLE>
<CAPTION>
Goldman Sachs Kemper MFS
----------------------- ------------------------------------------------- -----------
Kemper
Dreman Small Small
International Global High Return Cap Cap Government
Equity Income Equity Growth Value Securities Bond
----------- ----------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 4,983 1,089 1 - 1,730 3,820 3
----------- ----------- ----------- ----------- ----------- ---------- -----------
Expenses:
Mortality and expense risk 3,183 412 1 938 2,446 1,895 1
Administrative fee 382 49 - 113 293 228 -
----------- ----------- ----------- ----------- ----------- ---------- -----------
Total expenses 3,565 461 1 1,051 2,739 2,123 1
----------- ----------- ----------- ----------- ----------- ---------- -----------
Net investment income (expense) 1,418 628 - (1,051) (1,009) 1,697 2
----------- ----------- ----------- ----------- ----------- ---------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares 1,288 (7) - 1,110 (2,773) (721) -
Realized gain distributions 24,795 173 1 - - - -
----------- ----------- ----------- ----------- ----------- ---------- -----------
Net realized gain (loss) 26,083 166 1 1,110 (2,773) (721) -
----------- ----------- ----------- ----------- ----------- ---------- -----------
Change in unrealized appreciation 59,308 (1,589) (13) 33,083 10,537 (130) (4)
----------- ----------- ----------- ----------- ----------- ---------- -----------
Net increase (decrease) in net
assets from operations $ 86,809 (795) (12) 33,142 6,755 846 (2)
=========== =========== =========== =========== =========== ========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Year ended December 31, 1999
<TABLE>
<CAPTION>
MFS Oppenheimer
---------------------------------------------------------------------------- -------------
F&C
Growth Emerging
with Emerging Markets High Global Capital
Research Income Growth Equity Income Governments Appreciation
----------- ----------- ----------- ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 988 3,199 - 11 8,526 322 262
----------- ----------- ----------- ----------- ----------- ------------ -------------
Expenses:
Mortality and expense risk 7,330 13,846 10,888 323 2,132 89 1,470
Administrative fee 879 1,662 1,307 39 256 11 176
----------- ----------- ----------- ----------- ----------- ------------ -------------
Total expenses 8,209 15,508 12,195 362 2,388 100 1,646
----------- ----------- ----------- ----------- ----------- ------------ -------------
Net investment income (expense) (7,221) (12,309) (12,195) (351) 6,138 222 (1,384)
----------- ----------- ----------- ----------- ----------- ------------ -------------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares 2,134 4,845 15,552 (1,742) 1,396 (54) 1,944
Realized gain distributions 5,219 3,839 - - - - 2,880
----------- ----------- ----------- ----------- ----------- ------------ -------------
Net realized gain (loss) 7,353 8,684 15,552 (1,742) 1,396 (54) 4,824
----------- ----------- ----------- ----------- ----------- ------------ -------------
Change in unrealized appreciation 151,202 71,703 596,456 13,160 414 (431) 53,315
----------- ----------- ----------- ----------- ----------- ------------ -------------
Net increase (decrease) in net
assets from operations $ 151,334 68,078 599,813 11,067 7,948 (263) 56,755
=========== =========== =========== =========== =========== ============ =============
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Year ended December 31, 1999
<TABLE>
<CAPTION>
Oppenheimer Putnam
------------------------------------------------- -------------------------------------
Main Street
Growth VT Growth
and High Strategic and VT New
Income Income Bond Bond Income Value VT Vista
----------- ----------- ----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 815 8,100 22,575 1,644 15,328 3 22,701
----------- ----------- ----------- ---------- ----------- ----------- -----------
Expenses:
Mortality and expense risk 3,304 1,968 6,941 656 15,747 394 2,089
Administrative fee 397 236 833 79 1,890 47 251
----------- ----------- ----------- ---------- ----------- ----------- -----------
Total expenses 3,701 2,204 7,774 735 17,637 441 2,340
----------- ----------- ----------- ---------- ----------- ----------- -----------
Net investment income (expense) (2,886) 5,896 14,801 909 (2,309) (438) 20,361
----------- ----------- ----------- ---------- ----------- ----------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares 6,139 (552) (1,846) (128) 3,242 1,153 3,690
Realized gain distributions 1,373 - 2,168 - 76,488 667 -
----------- ----------- ----------- ---------- ----------- ----------- -----------
Net realized gain (loss) 7,512 (552) 322 (128) 79,730 1,820 3,690
----------- ----------- ----------- ---------- ----------- ----------- -----------
Change in unrealized appreciation 50,323 (1,438) (28,165) 265 (94,639) (1,091) 71,288
----------- ----------- ----------- ---------- ----------- ----------- -----------
Net increase (decrease) in net
assets from operations $ 54,949 3,906 (13,042) 1,046 (17,218) 291 95,339
=========== =========== =========== ========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Year ended December 31, 1999
<TABLE>
<CAPTION>
Putnam Templeton
--------------------------- ---------------------------------------------------------------
VT
VT International Franklin
International New Small Cap Developing
Growth Opportunities Bond Investments Stock International Markets
------------- ------------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ - 37 - - - 1,767 833
------------- ------------- ----------- ----------- ----------- ------------ -----------
Expenses:
Mortality and expense risk 11,652 1,364 37 1,010 628 2,882 1,197
Administrative fee 1,398 164 4 121 76 346 144
------------- ------------- ----------- ----------- ----------- ------------ -----------
Total expenses 13,050 1,528 41 1,131 704 3,228 1,341
------------- ------------- ----------- ----------- ----------- ------------ -----------
Net investment income (expense) (13,050) (1,491) (41) (1,131) (704) (1,461) (508)
------------- ------------- ----------- ----------- ----------- ------------ -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares 11,098 3,534 - 44,682 (197) 106 5,858
Realized gain distributions - - - - - 6,140 -
------------- ------------- ----------- ----------- ----------- ------------ -----------
Net realized gain (loss) 11,098 3,534 - 44,682 (197) 6,246 5,858
------------- ------------- ----------- ----------- ----------- ------------ -----------
Change in unrealized appreciation 515,817 91,568 (9) 33,706 14,590 62,767 33,553
------------- ------------- ----------- ----------- ----------- ------------ -----------
Net increase (decrease) in net
assets from operations $ 513,865 93,611 (50) 77,257 13,689 67,552 38,903
============= ============= =========== =========== =========== ============ ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Year ended December 31, 1999
<TABLE>
<CAPTION>
Templeton Fidelity
-------------------------- ---------------------------------------------------------------
Mutual Franklin VIP III VIP III VIP
Shares Growth VIP VIP II Growth Growth & Equity-
Investments Investments Growth Contrafund Opportunities Income Income
------------ ------------ ---------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 35 - 11 5 14 153 124
------------ ------------ ---------- ----------- ------------ ----------- -----------
Expenses:
Mortality and expense risk 616 465 405 58 68 719 350
Administrative fee 74 56 49 7 9 86 42
------------ ------------ ---------- ----------- ------------ ----------- -----------
Total expenses 690 521 454 65 77 805 392
------------ ------------ ---------- ----------- ------------ ----------- -----------
Net investment income (expense) (655) (521) (443) (60) (63) (652) (268)
------------ ------------ ---------- ----------- ------------ ----------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares (164) 29 212 3 3 180 (8)
Realized gain distributions - - 688 35 25 306 273
------------ ------------ ---------- ----------- ------------ ----------- -----------
Net realized gain (loss) (164) 29 900 38 28 486 265
------------ ------------ ---------- ----------- ------------ ----------- -----------
Change in unrealized appreciation 1,570 24,948 13,973 1,207 418 4,028 (1,623)
------------ ------------ ---------- ----------- ------------ ----------- -----------
Net increase (decrease) in net
assets from operations $ 751 24,456 14,430 1,185 383 3,862 (1,626)
============ ============ ========== =========== ============ =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Year ended December 31, 1999
<TABLE>
<CAPTION>
American Century Dreyfus INVESCO
--------------------------------------- -------------------------------------- -----------
VP Income VIF VIF
& VP Stock Disciplined Capital VIF
Growth International VP Value Index Stock Appreciation Dynamics
----------- ------------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ - - - - - 1 -
----------- ------------- ----------- ----------- ----------- ------------ -----------
Expenses:
Mortality and expense risk 5 - 3 - - - 8
Administrative fee 1 - - - - - 1
----------- ------------- ----------- ----------- ----------- ------------ -----------
Total expenses 6 - 3 - - - 9
----------- ------------- ----------- ----------- ----------- ------------ -----------
Net investment income (expense) (6) - (3) - - 1 (9)
----------- ------------- ----------- ----------- ----------- ------------ -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares - - - - - - -
Realized gain distributions - - - - 1 - -
----------- ------------- ----------- ----------- ----------- ------------ -----------
Net realized gain (loss) - - - - 1 - -
----------- ------------- ----------- ----------- ----------- ------------ -----------
Change in unrealized appreciation 407 25 134 3 2 - 1,133
----------- ------------- ----------- ----------- ----------- ------------ -----------
Net increase (decrease) in net
assets from operations $ 401 25 131 3 3 1 1,124
=========== ============= =========== =========== =========== ============ ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Year ended December 31, 1999
<TABLE>
<CAPTION>
INVESCO PIMCO Scudder
---------- -------------------------------------------------- -------------
VIF High Low StocksPLUS Total
High Yield Duration Growth & Return
Yield Bond Bond Income Bond International Total
---------- ----------- ----------- ----------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 7 1 1 2 36 - 777,978
---------- ----------- ----------- ----------- ----------- ------------- -----------
Expenses:
Mortality and expense risk 5 - - - 7 3 1,926,156
Administrative fee - - - - 1 - 231,138
---------- ----------- ----------- ----------- ----------- ------------- -----------
Total expenses 5 - - - 8 3 2,157,294
---------- ----------- ----------- ----------- ----------- ------------- -----------
Net investment income (expense) 2 1 1 2 28 (3) (1,379,316)
---------- ----------- ----------- ----------- ----------- ------------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares - - - - - - 6,077,380
Realized gain distributions - - - 5 - - 3,867,097
---------- ----------- ----------- ----------- ----------- ------------- -----------
Net realized gain (loss) - - - 5 - - 9,944,477
---------- ----------- ----------- ----------- ----------- ------------- -----------
Change in unrealized appreciation (14) - (1) (4) (33) 516 14,495,013
---------- ----------- ----------- ----------- ----------- ------------- -----------
Net increase (decrease) in net
assets from operations $ (12) 1 - 3 (5) 513 23,060,174
========== =========== =========== =========== =========== ============= ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1999
<TABLE>
<CAPTION>
Cova
-----------------------------------------------------------------------------------------
VKAC Lord Abbett
Growth Growth
Quality Money Stock and and Bond Developing
Income Market Index Income Income Debenture Growth
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 27,520 141 12,910 13,052 (606,692) 65,126 (17,312)
Net realized gain (loss) (16,883) - 540,793 320,050 84,440 92,020 3,868
Change in unrealized appreciation (19,209) - (491,713) (316,285) 4,841,111 63,985 402,539
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) from
operations (8,572) 141 61,990 16,817 4,318,859 221,131 389,095
----------- ----------- ----------- ----------- ----------- ----------- -----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - - -
Payments received from contract
owners - - - - 944,389 381,414 194,722
Transfers between sub-accounts
(including fixed account), net (762,919) (267,611) (2,368,403) (2,135,471) 46,839,738 3,039,279 525,525
Transfers for contract benefits and
terminations - - - - (3,002,856) (1,006,153) (14,699)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions (762,919) (267,611) (2,368,403) (2,135,471) 44,781,271 2,414,540 705,548
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets (771,491) (267,470) (2,306,413) (2,118,654) 49,100,130 2,635,671 1,094,643
Net assets at beginning of period 771,491 267,470 2,306,413 2,118,654 - 9,200,242 784,997
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period $ - - - - 49,100,130 11,835,913 1,879,640
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1999
<TABLE>
<CAPTION>
Cova
-----------------------------------------------------------------------------------------
Large Small Large
Cap Mid-Cap Quality Cap Cap Select International
Research Value Bond Stock Stock Equity Equity
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (15,348) (14,903) (21,163) (96,662) (378,826) (233,433) (101,424)
Net realized gain (loss) 5,023 8,245 53,895 93,813 1,368,526 1,996,371 266,171
Change in unrealized appreciation 318,972 59,675 (245,367) 3,442,246 3,428,923 (112,938) 2,686,189
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) from
operations 308,647 53,017 (212,635) 3,439,397 4,418,623 1,650,000 2,850,936
----------- ----------- ----------- ----------- ----------- ----------- -----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - - -
Payments received from contract
owners 267,991 87,258 531,392 82,315 1,374,292 724,675 196,744
Transfers between sub-accounts
(including fixed account), net 951,597 444,509 1,586,506 260,071 8,980,569 3,816,573 1,146,758
Transfers for contract benefits and
terminations (34,563) (39,485) (594,581) (790,063) (2,219,709) (1,316,313) (535,952)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 1,185,025 492,282 1,523,317 (447,677) 8,135,152 3,224,935 807,550
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets 1,493,672 545,299 1,310,682 2,991,720 12,553,775 4,874,935 3,658,486
Net assets at beginning of period 590,022 891,997 5,969,705 8,354,086 22,000,645 17,884,073 10,045,612
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period $ 2,083,694 1,437,296 7,280,387 11,345,806 34,554,420 22,759,008 13,704,098
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1999
<TABLE>
<CAPTION>
GACC Lord Abbett Russell
---------- ------------ ----------------------------------------------------------------
Growth Multi- Real
Money and Style Aggressive Core Estate
Market Income Equity Equity Non-US Bond Securities
---------- ------------ ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (23,466) (11,533) (12,727) (3,012) 2,936 75,536 1,666
Net realized gain (loss) 43,206 4,505,534 156,788 1,890 38,419 42,881 1
Change in unrealized appreciation 41,929 (2,782,796) 144,413 40,836 257,725 (145,900) (393)
---------- ------------ ----------- ----------- ----------- ----------- ------------
Net increase (decrease) from
operations 61,669 1,711,205 288,474 39,714 299,080 (27,483) 1,274
---------- ------------ ----------- ----------- ----------- ----------- ------------
Contract transactions:
Cova payments - - - - - - 100
Cova redemptions - - - - - - -
Payments received from contract
owners 455,426 60,200 1,215,160 190,633 485,053 661,201 25,949
Transfers between sub-accounts
(including fixed account), net 672,683 (38,834,205) 1,175,694 179,643 527,338 1,142,901 28,474
Transfers for contract benefits and
terminations (808,459) (34,968) (148,907) (33,783) (61,918) (131,305) (202)
---------- ------------ ----------- ----------- ----------- ----------- ------------
Net increase (decrease) in net
assets from contract
transactions 319,650 (38,808,973) 2,241,947 336,493 950,473 1,672,797 54,321
---------- ------------ ----------- ----------- ----------- ----------- ------------
Net increase (decrease) in net
assets 381,319 (37,097,768) 2,530,421 376,207 1,249,553 1,645,314 55,595
Net assets at beginning of period 1,439,505 37,097,768 616,473 86,525 204,186 653,798 -
---------- ------------ ----------- ----------- ----------- ----------- ------------
Net assets at end of period $1,820,824 - 3,146,894 462,732 1,453,739 2,299,112 55,595
========== ============ =========== =========== =========== =========== ============
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1999
<TABLE>
<CAPTION>
Goldman
AIM Alliance Liberty Sachs
-------------------------------------- ------------------------ ----------- ----------
Newport
V.I. Real Tiger Growth
V.I. Capital International Premier Estate Fund, and
V.I. Value Appreciation Equity Growth Investment Variable Income
----------- ------------ ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (8,907) (3,830) (925) (23,399) 5,156 (148) 466
Net realized gain (loss) 40,142 20,438 9,644 48,259 (4,604) 106 359
Change in unrealized appreciation 311,587 206,131 107,456 463,999 (13,176) 15,947 6,892
----------- ------------ ----------- ----------- ----------- ----------- ----------
Net increase (decrease) from
operations 342,822 222,739 116,175 488,859 (12,624) 15,905 7,717
----------- ------------ ----------- ----------- ----------- ----------- ----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions (135) (117) - - - - -
Payments received from contract
owners 646,993 272,306 53,431 417,182 16,568 2,495 13,612
Transfers between sub-accounts
(including fixed account), net 1,658,069 505,453 (4,431) 799,089 50,292 - 132,926
Transfers for contract benefits and
terminations (26,208) (1,538) (2,052) (128,479) (10,924) - (1,905)
----------- ------------ ----------- ----------- ----------- ----------- ----------
Net increase (decrease) in net
assets from contract
transactions 2,278,719 776,104 46,948 1,087,792 55,936 2,495 144,633
----------- ------------ ----------- ----------- ----------- ----------- ----------
Net increase (decrease) in net
assets 2,621,541 998,843 163,123 1,576,651 43,312 18,400 152,350
Net assets at beginning of period 37,459 65,732 174,213 919,176 176,625 22,242 129,917
----------- ------------ ----------- ----------- ----------- ----------- ----------
Net assets at end of period $ 2,659,000 1,064,575 337,336 2,495,827 219,937 40,642 282,267
=========== ============ =========== =========== =========== =========== ==========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1999
<TABLE>
<CAPTION>
Goldman Sachs Kemper MFS
------------------------ --------------------------------------------------- -----------
Kemper-
Dreman Small Small
International Global High Return Cap Cap Government
Equity Income Equity Growth Value Securities Bond
----------- ----------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 1,418 628 - (1,051) (1,009) 1,697 2
Net realized gain (loss) 26,083 166 1 1,110 (2,773) (721) -
Change in unrealized appreciation 59,308 (1,589) (13) 33,083 10,537 (130) (4)
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) from
operations 86,809 (795) (12) 33,142 6,755 846 (2)
----------- ----------- ------------ ----------- ----------- ----------- -----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - (106) -
Payments received from contract
owners 24,746 - - 17,391 46,547 44,475 -
Transfers between sub-accounts
(including fixed account), net 111,590 1,800 - 34,658 60,475 163,109 -
Transfers for contract benefits and
terminations (2,368) (63) - (2,889) (13,286) (15,420) -
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 133,968 1,737 - 49,160 93,736 192,058 -
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets 220,777 942 (12) 82,302 100,491 192,904 (2)
Net assets at beginning of period 181,053 32,472 105 44,757 145,943 26,786 105
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net assets at end of period $ 401,830 33,414 93 127,059 246,434 219,690 103
=========== =========== ============ =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1999
<TABLE>
<CAPTION>
MFS Oppenheimer
----------------------------------------------------------------------------- -----------
F&C
Growth Emerging
with Emerging Markets High Global Capital
Research Income Growth Equity Income Governments Appreciation
----------- ----------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (7,221) (12,309) (12,195) (351) 6,138 222 (1,384)
Net realized gain (loss) 7,353 8,684 15,552 (1,742) 1,396 (54) 4,824
Change in unrealized appreciation 151,202 71,703 596,456 13,160 414 (431) 53,315
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) from
operations 151,334 68,078 599,813 11,067 7,948 (263) 56,755
----------- ----------- ------------ ----------- ----------- ----------- -----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - - (135)
Payments received from contract
owners 136,206 89,380 81,860 1,988 33,546 - 113,274
Transfers between sub-accounts
(including fixed account), net 358,371 537,395 187,443 (5,243) 53,871 8,902 42,735
Transfers for contract benefits and
terminations (36,613) (42,012) (57,128) (727) (1,378) (1,969) (1,012)
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 457,964 584,763 212,175 (3,982) 86,039 6,933 154,862
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets 609,298 652,841 811,988 7,085 93,987 6,670 211,617
Net assets at beginning of period 316,584 782,358 631,883 27,865 129,014 4,100 61,670
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net assets at end of period $ 925,882 1,435,199 1,443,871 34,950 223,001 10,770 273,287
=========== =========== ============ =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1999
<TABLE>
<CAPTION>
Oppenheimer Putnam
-------------------------------------------------- -------------------------------------
Main Street
Growth VT Growth
and High Strategic and VT New
Income Income Bond Bond Income Value VT Vista
----------- ----------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (2,886) 5,896 14,801 909 (2,309) (438) 20,361
Net realized gain (loss) 7,512 (552) 322 (128) 79,730 1,820 3,690
Change in unrealized appreciation 50,323 (1,438) (28,165) 265 (94,639) (1,091) 71,288
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) from
operations 54,949 3,906 (13,042) 1,046 (17,218) 291 95,339
----------- ----------- ------------ ----------- ----------- ----------- -----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - - -
Payments received from contract
owners 76,794 107,415 57,943 14,538 133,519 10,334 22,606
Transfers between sub-accounts
(including fixed account), net 162,572 46,608 220,942 35,210 588,208 (4,129) 133,827
Transfers for contract benefits and
terminations (18,819) (1,231) (19,740) (737) (115,667) (5,309) (16,893)
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 220,547 152,792 259,145 49,011 606,060 896 139,540
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets 275,496 156,698 246,103 50,057 588,842 1,187 234,879
Net assets at beginning of period 153,884 104,364 489,350 27,279 913,554 23,119 80,253
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net assets at end of period $ 429,380 261,062 735,453 77,336 1,502,396 24,306 315,132
=========== =========== ============ =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1999
<TABLE>
<CAPTION>
Putnam Templeton
------------------------- ----------------------------------------------------------------
VT
VT International Franklin
International New Small Cap Developing
Growth Opportunities Bond Investments Stock International Markets
----------- ------------ ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (13,050) (1,491) (41) (1,131) (704) (1,461) (508)
Net realized gain (loss) 11,098 3,534 - 44,682 (197) 6,246 5,858
Change in unrealized appreciation 515,817 91,568 (9) 33,706 14,590 62,767 33,553
----------- ------------ ------------ ------------ ----------- ----------- -----------
Net increase (decrease) from
operations 513,865 93,611 (50) 77,257 13,689 67,552 38,903
----------- ------------ ------------ ------------ ----------- ----------- -----------
Contract transactions:
Cova payments - - 100 100 100 - -
Cova redemptions - - - (122) (117) (114) -
Payments received from contract
owners 141,900 3,024 5,127 9,200 49,708 121,554 10,245
Transfers between sub-accounts
(including fixed account), net 229,893 48,759 2,539 231,115 52,225 318,945 53,093
Transfers for contract benefits and
terminations (30,601) (665) - (189,520) 104 (1,334) (3,225)
----------- ------------ ------------ ------------ ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 341,192 51,118 7,766 50,773 102,020 439,051 60,113
----------- ------------ ------------ ------------ ----------- ----------- -----------
Net increase (decrease) in net
assets 855,057 144,729 7,716 128,030 115,709 506,603 99,016
Net assets at beginning of period 663,486 54,626 - - - 60,631 53,149
----------- ------------ ------------ ------------ ----------- ----------- -----------
Net assets at end of period $ 1,518,543 199,355 7,716 128,030 115,709 567,234 152,165
=========== ============ ============ ============ =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1999
<TABLE>
<CAPTION>
Templeton Fidelity
------------------------ ----------------------------------------------------------------
Mutual Franklin VIP III VIP III VIP
Shares Growth VIP VIP II Growth Growth & Equity-
Investments Investments Growth Contrafund Opportunities Income Income
----------- ----------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (655) (521) (443) (60) (63) (652) (268)
Net realized gain (loss) (164) 29 900 38 28 486 265
Change in unrealized appreciation 1,570 24,948 13,973 1,207 418 4,028 (1,623)
----------- ----------- ----------- ----------- ------------ ----------- -----------
Net increase (decrease) from
operations 751 24,456 14,430 1,185 383 3,862 (1,626)
----------- ----------- ----------- ----------- ------------ ----------- -----------
Contract transactions:
Cova payments - 100 - - - - -
Cova redemptions (121) (120) - - - - -
Payments received from contract
owners - - 41,465 6,405 4,570 41,668 3,029
Transfers between sub-accounts
(including fixed account), net 88,846 132,874 22,366 922 35 20,802 28,683
Transfers for contract benefits and
terminations (10) (545) 46 - (1) 58 (1)
----------- ----------- ----------- ----------- ------------ ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 88,715 132,309 63,877 7,327 4,604 62,528 31,711
----------- ----------- ----------- ----------- ------------ ----------- -----------
Net increase (decrease) in net
assets 89,466 156,765 78,307 8,512 4,987 66,390 30,085
Net assets at beginning of period 9,105 - 6,623 975 1,345 25,524 8,239
----------- ----------- ----------- ----------- ------------ ----------- -----------
Net assets at end of period $ 98,571 156,765 84,930 9,487 6,332 91,914 38,324
=========== =========== =========== =========== ============ =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1999
<TABLE>
<CAPTION>
American Century Dreyfus INVESCO
-------------------------------------- ------------------------------------- -----------
VP Income VIF VIF
& VP VP Stock Disciplined Capital VIF
Growth International Value Index Stock Appreciation Dynamics
----------- ----------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (6) - (3) - - 1 (9)
Net realized gain (loss) - - - - 1 - -
Change in unrealized appreciation 407 25 134 3 2 - 1,133
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) from
operations 401 25 131 3 3 1 1,124
----------- ----------- ------------ ----------- ----------- ----------- -----------
Contract transactions:
Cova payments 100 100 100 100 100 100 100
Cova redemptions - - - - - - -
Payments received from contract
owners 10,000 - 5,000 - - - 20,526
Transfers between sub-accounts
(including fixed account), net - - - - - - -
Transfers for contract benefits and
terminations - - - - - - -
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 10,100 100 5,100 100 100 100 20,626
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets 10,501 125 5,231 103 103 101 21,750
Net assets at beginning of period - - - - - - -
----------- ----------- ------------ ----------- ----------- ----------- -----------
Net assets at end of period $ 10,501 125 5,231 103 103 101 21,750
=========== =========== ============ =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1999
<TABLE>
<CAPTION>
INVESCO PIMCO Scudder
----------- -------------------------------------------------- -----------
High Low StocksPLUS Total
High Yield Duration Growth & Return
Yield Bond Bond Income Bond International Total
----------- ----------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 2 1 1 2 28 (3) (1,379,316)
Net realized gain (loss) - - - 5 - - 9,944,477
Change in unrealized appreciation (14) - (1) (4) (33) 516 14,495,013
----------- ----------- ------------ ----------- ----------- ----------- ------------
Net increase (decrease) from
operations (12) 1 - 3 (5) 513 23,060,174
----------- ----------- ------------ ----------- ----------- ----------- ------------
Contract transactions:
Cova payments 100 100 100 100 100 100 1,800
Cova redemptions - - - - - - (1,087)
Payments received from contract
owners 10,000 - - - 15,000 6,654 10,819,038
Transfers between sub-accounts
(including fixed account), net - - - - - - 34,060,088
Transfers for contract benefits and
terminations - - - - - - (11,523,977)
----------- ----------- ------------ ----------- ----------- ----------- ------------
Net increase (decrease) in net
assets from contract
transactions 10,100 100 100 100 15,100 6,754 33,355,862
----------- ----------- ------------ ----------- ----------- ----------- ------------
Net increase (decrease) in net
assets 10,088 101 100 103 15,095 7,267 56,416,036
Net assets at beginning of period - - - - - - 127,869,227
----------- ----------- ------------ ----------- ----------- ----------- ------------
Net assets at end of period $ 10,088 101 100 103 15,095 7,267 184,285,263
=========== =========== ============ =========== =========== =========== ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1998
<TABLE>
<CAPTION>
Cova
----------------------------------------------------------------------------------------
VKAC
Growth Large
Quality Money Stock and Bond Developing Cap
Income Market Index Income Debenture Growth Research
---------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 31,278 11,868 (17,610) (15,214) 92,644 (5,086) (2,082)
Net realized gain (loss) 1,603 - 391,001 237,648 87,212 (1,333) 25
Change in unrealized appreciation 4,531 - 98,370 64,902 110,064 57,229 52,098
---------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in
net assets from operations 37,412 11,868 471,761 287,336 289,920 50,810 50,041
---------- ----------- ----------- ----------- ----------- ----------- -----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - - -
Payments received from contract
owners - - - 1,000 1,051,661 334,325 237,270
Transfers between sub-accounts
(including fixed account), net 11,714 (111,191) 138,069 202,862 3,726,785 337,360 303,087
Transfers for contract benefits and
terminations (8,629) (3,863) (40,936) (52,497) (343,261) (1,070) (376)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 3,085 (115,054) 97,133 151,365 4,435,185 670,615 539,981
---------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets 40,497 (103,186) 568,894 438,701 4,725,105 721,425 590,022
Net assets at beginning of period 730,994 370,656 1,737,519 1,679,953 4,475,137 63,572 -
---------- ----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period $ 771,491 267,470 2,306,413 2,118,654 9,200,242 784,997 590,022
========== =========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1998
<TABLE>
<CAPTION>
Cova GACC
--------------------------------------------------------------------------- -----------
Small Large
Mid-Cap Quality Cap Cap Select International Money
Value Bond Stock Stock Equity Equity Market
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (5,560) 29,095 (95,891) (176,715) (152,047) 34,256 (6,981)
Net realized gain (loss) (4,501) 10,751 280,526 352,389 999,481 25,322 18,462
Change in unrealized appreciation 11,980 212,005 (768,604) 4,086,693 1,878,770 827,333 8,306
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in
net assets from operations 1,919 251,851 (583,969) 4,262,367 2,726,204 886,911 19,787
----------- ----------- ----------- ----------- ----------- ----------- -----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - - -
Payments received from contract
owners 593,364 828,237 664,035 1,433,747 1,284,829 470,560 1,894,032
Transfers between sub-accounts
(including fixed account), net 210,332 2,485,711 2,154,230 6,772,257 4,674,806 2,712,309 (358,103)
Transfers for contract benefits and
terminations (2,706) (213,576) (458,393) (691,973) (646,951) (375,560) (266,514)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 800,990 3,100,372 2,359,872 7,514,031 5,312,684 2,807,309 1,269,415
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets 802,909 3,352,223 1,775,903 11,776,398 8,038,888 3,694,220 1,289,202
Net assets at beginning of period 89,088 2,617,482 6,578,183 10,224,247 9,845,185 6,351,392 150,303
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period $ 891,997 5,969,705 8,354,086 22,000,645 17,884,073 10,045,612 1,439,505
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1998
<TABLE>
<CAPTION>
Lord Abbett Russell AIM
----------- ------------------------------------------------- ------------------------
Growth Multi-
and Style Aggressive Core V.I. Capital
Income Equity Equity Non-US Bond V.I. Value Appreciation
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 110,598 (2,142) (365) (884) 1,981 (29) (179)
Net realized gain (loss) 1,847,461 202 (45) (78) 2 (47) 1,256
Change in unrealized appreciation 1,268,706 37,385 (1,753) 1,844 3,543 1,376 5,386
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in
net assets from operations 3,226,765 35,445 (2,163) 882 5,526 1,300 6,463
----------- ----------- ----------- ----------- ----------- ----------- -----------
Contract transactions:
Cova payments - 100 100 100 100 100 100
Cova redemptions - (127) (95) (93) (103) - -
Payments received from contract
owners 2,282,528 550,062 80,621 187,582 578,539 33,651 57,937
Transfers between sub-accounts
(including fixed account), net 8,659,268 31,554 8,298 15,688 70,898 2,043 1,227
Transfers for contract benefits and
terminations (1,472,455) (561) (236) 27 (1,162) 365 5
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 9,469,341 581,028 88,688 203,304 648,272 36,159 59,269
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets 12,696,106 616,473 86,525 204,186 653,798 37,459 65,732
Net assets at beginning of period 24,401,662 - - - - - -
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period $ 37,097,768 616,473 86,525 204,186 653,798 37,459 65,732
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1998
<TABLE>
<CAPTION>
AIM Alliance Liberty Goldman Sachs
----------- ------------------------ ----------- -------------------------------------
Newport
V.I. Real Tiger Growth
International Premier Estate Fund, and International Global
Equity Growth Investment Variable Income Equity Income
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 187 (4,379) (540) 355 125 (1,051) 1,029
Net realized gain (loss) (5,943) (6,634) (2,767) 4 (4,119) 1,202 330
Change in unrealized appreciation (6,224) 118,514 (17,191) 2,743 (11,213) 2,720 (187)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in
net assets from operations (11,980) 107,501 (20,498) 3,102 (15,207) 2,871 1,172
----------- ----------- ----------- ----------- ----------- ----------- -----------
Contract transactions:
Cova payments 100 100 100 100 100 100 100
Cova redemptions (100) (138) (81) - (97) (86) -
Payments received from contract
owners 184,408 794,977 178,563 19,040 128,899 154,193 31,200
Transfers between sub-accounts
(including fixed account), net 3,073 20,139 19,454 - 16,047 23,975 -
Transfers for contract benefits and
terminations (1,288) (3,403) (913) - 175 - -
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 186,193 811,675 197,123 19,140 145,124 178,182 31,300
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets 174,213 919,176 176,625 22,242 129,917 181,053 32,472
Net assets at beginning of period - - - - - - -
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period $ 174,213 919,176 176,625 22,242 129,917 181,053 32,472
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1998
<TABLE>
<CAPTION>
Kemper MFS
------------------------------------------------- -------------------------------------
Kemper-
Dreman Small Small Growth
High Return Cap Cap Government with
Equity Growth Value Securities Bond Research Income
----------- ----------- ----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ - (265) (889) (42) - (1,500) (4,815)
Net realized gain (loss) - 191 (6,422) - - 145 (4,972)
Change in unrealized appreciation 5 3,989 (13,980) 206 5 24,572 54,989
----------- ----------- ----------- ---------- ----------- ----------- -----------
Net increase (decrease) in
net assets from operations 5 3,915 (21,291) 164 5 23,217 45,202
----------- ----------- ----------- ---------- ----------- ----------- -----------
Contract transactions:
Cova payments 100 100 100 100 100 100 100
Cova redemptions - (108) (78) - - (123) (120)
Payments received from contract
owners - 35,374 184,026 23,032 - 252,002 692,249
Transfers between sub-accounts
(including fixed account), net - 5,487 (15,831) 3,490 - 42,134 48,220
Transfers for contract benefits and
terminations - (11) (983) - - (746) (3,293)
----------- ----------- ----------- ---------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 100 40,842 167,234 26,622 100 293,367 737,156
----------- ----------- ----------- ---------- ----------- ----------- -----------
Net increase (decrease) in net
assets 105 44,757 145,943 26,786 105 316,584 782,358
Net assets at beginning of period - - - - - - -
----------- ----------- ----------- ---------- ----------- ----------- -----------
Net assets at end of period $ 105 44,757 145,943 26,786 105 316,584 782,358
=========== =========== =========== ========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1998
<TABLE>
<CAPTION>
MFS Oppenheimer
------------------------------------------------- ---------------------------------------
F&C Main Street
Emerging Growth
Emerging Markets High Global Capital and High
Growth Equity Income Governments Appreciation Income Income
--------- ----------- ----------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (3,541) 124 (541) (8) (286) (748) (559)
Net realized gain (loss) (2,706) (10,435) (1,086) 1 1,028 (157) (139)
Change in unrealized appreciation 87,574 (7,685) (2,625) 189 9,357 (771) (2,071)
--------- ----------- ----------- ------------ ------------ ------------ -----------
Net increase (decrease) in
net assets from operations 81,327 (17,996) (4,252) 182 10,099 (1,676) (2,769)
--------- ----------- ----------- ------------ ------------ ------------ -----------
Contract transactions:
Cova payments 100 100 100 100 100 100 100
Cova redemptions (126) (65) (93) - - (89) (93)
Payments received from contract
owners 527,982 71,508 125,820 3,193 42,486 144,121 93,367
Transfers between sub-accounts
(including fixed account), net 24,659 (25,211) 8,401 625 9,440 11,637 14,033
Transfers for contract benefits and
terminations (2,059) (471) (962) - (455) (209) (274)
--------- ----------- ----------- ------------ ------------ ------------ -----------
Net increase (decrease) in net
assets from contract
transactions 550,556 45,861 133,266 3,918 51,571 155,560 107,133
--------- ----------- ----------- ------------ ------------ ------------ -----------
Net increase (decrease) in net
assets 631,883 27,865 129,014 4,100 61,670 153,884 104,364
Net assets at beginning of period - - - - - - -
--------- ----------- ----------- ------------ ------------ ------------ -----------
Net assets at end of period $ 631,883 27,865 129,014 4,100 61,670 153,884 104,364
========= =========== =========== ============ ============ ============ ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1998
<TABLE>
<CAPTION>
Oppenheimer Putnam
------------------- ------------------------------------------------------------------
VT
VT Growth VT International
Strategic and VT New International New
Bond Bond Income Value VT Vista Growth Opportunities
-------- --------- ----------- ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (2,628) (166) (5,191) 101 (436) (1,984) (266)
Net realized gain (loss) 238 (4) (4,815) 79 (12) (8,326) (27)
Change in unrealized appreciation 12,503 (129) 44,649 860 7,815 (2,297) 299
-------- --------- ----------- ----------- ----------- ------------ -------------
Net increase (decrease) in
net assets from operations 10,113 (299) 34,643 1,040 7,367 (12,607) 6
-------- --------- ----------- ----------- ----------- ------------ -------------
Contract transactions:
Cova payments 100 100 100 100 100 100 100
Cova redemptions (105) - (113) - (109) (127) (109)
Payments received from contract
owners 407,896 22,655 787,874 4,669 46,531 674,756 50,740
Transfers between sub-accounts
(including fixed account), net 73,891 4,823 94,763 17,311 26,352 5,031 3,797
Transfers for contract benefits and
terminations (2,545) - (3,713) (1) 12 (3,667) 92
-------- --------- ----------- ----------- ----------- ------------ -------------
Net increase (decrease) in net
assets from contract
transactions 479,237 27,578 878,911 22,079 72,886 676,093 54,620
-------- --------- ----------- ----------- ----------- ------------ -------------
Net increase (decrease) in net
assets 489,350 27,279 913,554 23,119 80,253 663,486 54,626
Net assets at beginning of period - - - - - - -
-------- --------- ----------- ----------- ----------- ------------ -------------
Net assets at end of period $ 489,350 27,279 913,554 23,119 80,253 663,486 54,626
======== ========= =========== =========== =========== ============ =============
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1998
<TABLE>
<CAPTION>
Templeton Fidelity
-------------------------------------- -------------------------------------------------
Mutual VIP III VIP III
Developing Shares VIP VIP II Growth Growth &
International Markets Investments Growth Contrafund Opportunities Income
------------ ----------- ----------- -------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (139) (93) (3) (17) (1) - (58)
Net realized gain (loss) 9 8 - - - - -
Change in unrealized appreciation 4,711 3,570 263 1,118 99 19 3,784
------------ ----------- ----------- -------- ----------- ------------- -----------
Net increase (decrease) in
net assets from operations 4,581 3,485 260 1,101 98 19 3,726
------------ ----------- ----------- -------- ----------- ------------- -----------
Contract transactions:
Cova payments 100 100 100 100 100 100 100
Cova redemptions - (133) - - - - -
Payments received from contract
owners 54,930 25,540 8,079 990 777 - 3,746
Transfers between sub-accounts
(including fixed account), net 1,153 24,157 666 4,427 - 1,226 17,428
Transfers for contract benefits and
terminations (133) - - 5 - - 524
------------ ----------- ----------- -------- ----------- ------------- -----------
Net increase (decrease) in net
assets from contract
transactions 56,050 49,664 8,845 5,522 877 1,326 21,798
------------ ----------- ----------- -------- ----------- ------------- -----------
Net increase (decrease) in net
assets 60,631 53,149 9,105 6,623 975 1,345 25,524
Net assets at beginning of period - - - - - - -
------------ ----------- ----------- -------- ----------- ------------- -----------
Net assets at end of period $ 60,631 53,149 9,105 6,623 975 1,345 25,524
============ =========== =========== ======== =========== ============= ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Year ended December 31, 1998
<TABLE>
<CAPTION>
Fidelity
------------------
VIP
Equity-
Income Total
------------------ ------------------
<S> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (12) (197,302)
Net realized gain (loss) - 4,192,008
Change in unrealized appreciation 635 8,280,979
------------------ ------------------
Net increase (decrease) in
net assets from operations 623 12,275,685
------------------ ------------------
Contract transactions:
Cova payments 100 4,200
Cova redemptions - (2,511)
Payments received from contract
owners 2,968 18,342,571
Transfers between sub-accounts
(including fixed account), net 4,427 32,538,428
Transfers for contract benefits and
terminations 121 (4,604,519)
------------------ ------------------
Net increase (decrease) in net
assets from contract
transactions 7,616 46,278,169
------------------ ------------------
Net increase (decrease) in net
assets 8,239 58,553,854
Net assets at beginning of period - 69,315,373
------------------ ------------------
Net assets at end of period $ 8,239 127,869,227
================== ==================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
(1) ORGANIZATION
Cova Variable Annuity Account Five (the Separate Account), a unit
investment trust registered under the Investment Company Act of 1940 as
amended, was established by Cova Financial Life Insurance Company (CFLIC)
and exists in accordance with the regulations of the California
Department of Insurance. The Separate Account is a funding vehicle for
variable annuity contracts issued by CFLIC.
The Separate Account is divided into sub-accounts with the assets of each
sub-account invested in corresponding portfolios of the following
investment companies which are diversified, open-end, management
investment companies registered under the Investment Company Act of 1940
as amended. The sub-accounts available for investment may vary between
variable annuity contracts offered for sale by CFLIC.
<TABLE>
<S> <C>
Cova Series Trust (Cova) 10 portfolios
General American Capital Company (GACC) 1 portfolio
Lord Abbett Series Fund, Inc. (Lord Abbett) 1 portfolio
Russell Insurance Funds (Russell) 5 portfolios
AIM Variable Insurance Funds, Inc. (AIM) 3 portfolios
Alliance Variable Products Series Fund, Inc. (Alliance) 2 portfolios
Liberty Variable Investment Trust (Liberty) 1 portfolio
Goldman Sachs Variable Insurance Trust (Goldman Sachs) 3 portfolios
Kemper Variable Series (Kemper) 4 portfolios
MFS Variable Insurance Trust (MFS) 7 portfolios
Oppenheimer Variable Account Funds (Oppenheimer) 5 portfolios
Putnam Variable Trust (Putnam) 5 portfolios
Templeton Variable Products Series Fund (Templeton) 7 portfolios
Variable Insurance Products Fund, Fund II and Fund III (Fidelity) 5 portfolios
American Century Variable Portfolios, Inc. (American Century) 3 portfolios
Dreyfus Stock Index Fund (Dreyfus) 1 portfolio
Dreyfus Variable Investment Fund (Dreyfus) 2 portfolios
INVESCO Variable Investment Funds, Inc. 2 portfolios
PIMCO Variable Insurance Trust 4 portfolios
Scudder Variable Life Investment Fund 1 portfolio
</TABLE>
The following sub-accounts commenced operations in 1999:
Cova Lord Abbett Growth and Income January 8, 1999
Russell Real Estate Securities July 1, 1999
Templeton Bond March 1, 1999
Franklin Small Cap Investments March 1, 1999
Templeton Stock March 2, 1999
Franklin Growth Investments March 1, 1999
American Century VP Income & Growth November 19, 1999
American Century VP International November 19, 1999
American Century VP Value November 19, 1999
Dreyfus Stock Index November 19, 1999
Dreyfus VIF Disciplined Stock November 19, 1999
Dreyfus VIF Capital Appreciation November 19, 1999
INVESCO Dynamics November 19, 1999
INVESCO High Yield November 19, 1999
PIMCO High Yield Bond November 19, 1999
PIMCO Low Duration Bond November 19, 1999
PIMCO StocksPLUS Growth & Income November 19, 1999
PIMCO Total Return Bond November 19, 1999
Scudder International November 19, 1999
The following sub-accounts ceased operations in 1999:
Lord Abbett Growth and Income January 8, 1999
Cova Quality Income January 8, 1999
Cova Money Market January 8, 1999
Cova Stock Index January 8, 1999
Cova VKAC Growth and Income January 8, 1999
Cova Small Cap Equity October 8, 1999
On August 26, 1999, CFLIC's ultimate parent company, GenAmerica
Corporation entered into a definitive agreement to be acquired
by Metropolitan Life Insurance Company. The acquisition occurred
on January 6, 2000.
<PAGE>
(2) SIGNIFICANT ACCOUNTING POLICIES
(A) INVESTMENT VALUATION
Investments made in the portfolios of the investment companies are
valued at the reported net asset value of such portfolios, which
value their investment securities at fair value. The average cost
method is used to compute the realized gains and losses on the sale
of portfolio shares owned by the sub-accounts. Income from dividends
and gains from realized capital gain distributions are recorded on
the ex-distribution date.
(B) REINVESTMENT OF DISTRIBUTIONS
With the exception of the GACC Money Market Fund, dividends and
gains from realized gain distributions are reinvested in additional
shares of the portfolio.
GACC follows the Federal income tax practice known as consent
dividending, whereby substantially all of its net investment income
and realized capital gains are deemed to pass through to the
Separate Account. As a result, GACC does not distribute dividends
and realized capital gains. During December of each year, the
accumulated net investment income and realized capital gains of the
GACC Money Market Fund are allocated to the Separate Account by
increasing the cost basis and recognizing a gain in the Separate
Account.
(C) FEDERAL INCOME TAXES
The operations of the Separate Account are included in the federal
income tax return of CFLIC which is taxed as a Life Insurance
Company under the provisions of the Internal Revenue Code (IRC).
Under current IRC provisions, CFLIC believes it will be treated as
the owner of the Separate Account assets for federal income tax
purposes and does not expect to incur federal income taxes on the
earnings of the Separate Account to the extent the earnings are
credited to the variable annuity contracts. Based on this, no charge
has been made to the Separate Account for federal income taxes. A
charge may be made in future years for any federal income taxes that
would be attributable to the variable annuity contracts.
(D) ANNUITY RESERVES
Annuity reserves are computed for contracts in the payout stage
according to the 1983a Mortality Table. The assumed investment
return is 3%. The mortality risk is borne by CFLIC and may result in
additional transfers to the Separate Account. Conversely, if
reserves exceed amounts required, transfers may be made from the
Separate Account to CFLIC.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
(3) SEPARATE ACCOUNT EXPENSES
CFLIC deducts a daily charge from the net assets of each Separate Account
sub-account equivalent to an annual rate of 1.25% for the assumption of
mortality and expense risks and 0.15% for administrative expenses. The
mortality risks assumed by CFLIC arise from its contractual obligation to
make annuity payments after the annuity date for the life of the
annuitant and to waive the withdrawal fee in the event of the death of
the contract owner. The administrative fees cover the cost of
establishing and maintaining the variable annuity contracts and the
Separate Account.
(4) CONTRACT FEES
There are no deductions made from purchase payments for sales fees at the
time a variable annuity contract is purchased. However, if all or a
portion of the contract value is withdrawn, a withdrawal fee may be
assessed and deducted from the contract value or payment to the contract
owner. The withdrawal fee 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 the contract value exceeds $5,000, the contract
owner may make one withdrawal each contract year of up to 10% of the
aggregate purchase payments (on deposit for more than one year) without
incurring a surrender fee. During the year ended December 31, 1999,
surrender fees of $252,000 were deducted from the Separate Account.
An annual contract maintenance fee of $30 is imposed on all variable
annuity contracts with contract values less than $50,000 on their
anniversary. This fee covers the cost of contract administration for the
previous year and is prorated between the Separate Account sub- accounts
and the fixed rate account to which the contract value is allocated.
Subject to certain restrictions, the contract owner may transfer all or a
part of the accumulated value of the contract among the available
sub-accounts and the fixed rate account. 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, may be deducted from the contract
value. Transfers made in a dollar cost averaging program are not subject
to the transfer fee.
During the year ended December 31, 1999, contract maintenance and
transfer fees of $37,000 were deducted from the Separate Account.
Currently, CFLIC advances any premium taxes due at the time purchase
payments are made and then deducts premium taxes at the time annuity
payments begin. CFLIC reserves the right to deduct premium taxes when
incurred.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(5) COST BASIS OF INVESTMENTS
The cost basis of each sub-account's investment at December 31, 1999 follows:
<S> <C> <C> <C>
Cova Lord Abbett Growth and Income $ 44,259,019 Oppenheimer Capital Appreciation $ 210,635
Cova Bond Debenture 11,498,529 Oppenheimer Main Street Growth & Income 379,861
Cova Developing Growth 1,419,468 Oppenheimer High Income 264,591
Cova Large Cap Research 1,712,624 Oppenheimer Bond 751,172
Cova Mid-Cap Value 1,363,105 Oppenheimer Strategic Bond 77,206
Cova Quality Bond 7,271,632 Putnam VT Growth and Income 1,552,501
Cova Small Cap Stock 7,906,392 Putnam VT New Value 24,539
Cova Large Cap Stock 26,407,936 Putnam VT Vista 236,052
Cova Select Equity 19,708,203 Putnam VT International Growth 1,005,138
Cova International Equity 10,098,921 Putnam VT International New Opportunities 107,503
GACC Money Market 1,770,289 Templeton Bond 7,726
Russell Multi-Style Equity 2,965,336 Franklin Small Cap Investments 94,333
Russell Aggressive Equity 423,684 Templeton Stock 101,128
Russell Non-US 1,194,281 Templeton International 499,799
Russell Core Bond 2,441,645 Templeton Developing Markets 115,054
Russell Real Estate Securities 55,992 Templeton Mutual Shares Investments 96,745
AIM V.I. Value 2,346,239 Franklin Growth Investments 131,829
AIM V.I. Capital Appreciation 853,139 Fidelity VIP Growth 69,845
AIM V.I. International Equity 236,130 Fidelity VIP II Contrafund 8,182
Alliance Premier Growth 1,913,504 Fidelity VIP III Growth Opportunities 5,895
Alliance Real Estate Investment 250,321 Fidelity VIP III Growth & Income 84,109
Liberty Newport Tiger Fund, Variable 21,955 Fidelity VIP Equity-Income 39,315
Goldman Sachs Growth and Income 286,610 American Century VP Income & Growth 10,100
Goldman Sachs International Equity 339,833 American Century VP International 100
Goldman Sachs Global Income 35,193 American Century VP Value 5,100
Kemper-Dreman High Return Equity 101 Dreyfus Stock Index 100
Kemper Small Cap Growth 89,997 Dreyfus VIF Disciplined Stock 101
Kemper Small Cap Value 249,896 Dreyfus VIF Capital Appreciation 101
Kemper Government Securities 219,631 INVESCO VIF Dynamics 20,626
MFS Bond 102 INVESCO VIF High Yield 10,107
MFS Research 750,178 PIMCO High Yield Bond 101
MFS Growth with Income 1,308,616 PIMCO Low Duration Bond 101
MFS Emerging Growth 759,950 PIMCO StocksPLUS Growth & Income 107
MFS/Foreign & Colonial Emerging Markets Equity 29,478 PIMCO Total Return Bond 15,136
MFS High Income 225,229 Scudder International 6,754
--------------
MFS Global Governments 11,013 $ 156,355,863
==============
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE
A summary of accumulation unit values, net assets, total return and expense ratios for each sub-account follows:
Commenced Accumulation Unit Value
--------------------------------------------------------
Operations 12/31/1999 12/31/1998 12/31/1997 12/31/1996
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Cova Lord Abbett Growth and Income 1/8/1999 $ 39.456973 - - -
Cova Bond Debenture 5/20/1996 13.765395 13.496510 12.881799 11.294929
Cova Developing Growth 11/7/1997 14.452893 11.067868 10.527555 -
Cova Large Cap Research 2/17/1998 14.635794 11.825638 - -
Cova Mid-Cap Value 11/7/1997 10.875543 10.437956 10.467957 -
Cova Quality Bond 5/20/1996 11.567172 11.914509 11.155144 10.368767
Cova Small Cap Stock 5/15/1996 17.932499 12.582885 13.491493 11.308427
Cova Large Cap Stock 5/16/1996 22.548971 19.428505 14.889464 11.334982
Cova Select Equity 5/15/1996 18.384684 16.987203 14.053503 10.838053
Cova International Equity 5/14/1996 16.333932 12.889314 11.462436 10.967004
GACC Money Market 12/4/1997 11.525403 11.109949 10.667017 -
Russell Multi-Style Equity 12/31/1997 14.719616 12.740123 10.000000 -
Russell Aggressive Equity 12/31/1997 10.461908 10.001283 10.000000 -
Russell Non-US 12/31/1997 14.706241 11.182808 10.000000 -
Russell Core Bond 12/31/1997 10.419502 10.631124 10.000000 -
Russell Real Estate Securities 7/1/1999 9.395293 - - -
AIM V.I. Value 12/31/1997 16.748633 13.075597 10.000000 -
AIM V.I. Capital Appreciation 12/31/1997 16.827440 11.800084 10.000000 -
AIM V.I. International Equity 12/31/1997 17.458837 11.418467 10.000000 -
Alliance Premier Growth 12/31/1997 19.075994 14.620511 10.000000 -
Alliance Real Estate Investment 12/31/1997 7.486033 8.000583 10.000000 -
Liberty Newport Tiger Fund, Variable 12/31/1997 15.397535 9.278784 10.000000 -
Goldman Sachs Growth and Income 3/31/1998 10.302541 9.911702 - -
Goldman Sachs International Equity 3/31/1998 14.844433 11.416783 - -
Goldman Sachs Global Income 3/31/1998 10.556976 10.815310 - -
Kemper-Dreman High Return Equity 5/15/1998 9.270000 10.489000 - -
Kemper Small Cap Growth 12/31/1997 15.505196 11.687795 10.000000 -
Kemper Small Cap Value 12/31/1997 8.886027 8.770360 10.000000 -
Kemper Government Securities 12/31/1997 10.558404 10.634608 10.000000 -
MFS Bond 5/15/1998 10.288000 10.509000 - -
MFS Research 12/31/1997 14.897867 12.179142 10.000000 -
MFS Growth with Income 12/31/1997 12.703932 12.075079 10.000000 -
MFS Emerging Growth 12/31/1997 23.079105 13.244101 10.000000 -
MFS/Foreign & Colonial Emerging Markets Equity 12/31/1997 8.967637 6.581757 10.000000 -
MFS High Income 12/31/1997 10.352934 9.863111 10.000000 -
MFS Global Governments 12/31/1997 10.252619 10.663503 10.000000 -
Oppenheimer Capital Appreciation 12/31/1997 17.103249 12.244057 10.000000 -
Oppenheimer Main Street Growth & Income 12/31/1997 12.409773 10.340279 10.000000 -
Oppenheimer High Income 12/31/1997 10.189165 9.907918 10.000000 -
Oppenheimer Bond 12/31/1997 10.246949 10.551643 10.000000 -
Oppenheimer Strategic Bond 12/31/1997 10.306821 10.164797 10.000000 -
Putnam VT Growth and Income 12/31/1997 11.422706 11.403244 10.000000 -
Putnam VT New Value 12/31/1997 10.379438 10.498075 10.000000 -
Putnam VT Vista 12/31/1997 17.797452 11.804097 10.000000 -
Putnam VT International Growth 12/31/1997 18.522808 11.729428 10.000000 -
Putnam VT International New Opportunities 12/31/1997 22.858952 11.420772 10.000000 -
Templeton Bond 3/1/1999 9.702219 - - -
Franklin Small Cap Investments 3/1/1999 17.718917 - - -
Templeton Stock 3/2/1999 13.322067 - - -
Templeton International 9/21/1998 11.157985 9.149729 - -
Templeton Developing Markets 9/21/1998 11.479237 7.557531 - -
Templeton Mutual Shares Investments 9/21/1998 10.433275 9.646506 - -
Franklin Growth Investments 3/1/1999 14.687812 - - -
Fidelity VIP Growth 2/17/1998 17.780613 13.115493 - -
Fidelity VIP II Contrafund 2/17/1998 15.235791 12.429344 - -
Fidelity VIP III Growth Opportunities 2/17/1998 12.142823 11.814000 - -
Fidelity VIP III Growth & Income 2/17/1998 13.198268 12.259160 - -
Fidelity VIP Equity-Income 2/17/1998 11.196008 10.674283 - -
American Century VP Income & Growth 11/19/1999 10.324878 - - -
American Century VP International 11/19/1999 12.517000 - - -
American Century VP Value 11/19/1999 9.586953 - - -
Dreyfus Stock Index 11/19/1999 10.336000 - - -
Dreyfus VIF Disciplined Stock 11/19/1999 10.306000 - - -
Dreyfus VIF Capital Appreciation 11/19/1999 10.128000 - - -
INVESCO VIF Dynamics 11/19/1999 11.148744 - - -
INVESCO VIF High Yield 11/19/1999 10.122749 - - -
PIMCO High Yield Bond 11/19/1999 10.078000 - - -
PIMCO Low Duration Bond 11/19/1999 9.969000 - - -
PIMCO StocksPLUS Growth & Income 11/19/1999 10.311000 - - -
PIMCO Total Return Bond 11/19/1999 9.898482 - - -
Scudder International 11/19/1999 11.637458 - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE
A summary of accumulation unit values, net assets, total return and expense ratios for each sub-account follows:
Commenced Net Assets (in thousands)
--------------------------------------------------------
Operations 12/31/1999 12/31/1998 12/31/1997 12/31/1996
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Cova Lord Abbett Growth and Income 1/8/1999 $ 49,100 - - -
Cova Bond Debenture 5/20/1996 11,836 9,200 4,475 447
Cova Developing Growth 11/7/1997 1,880 785 64 -
Cova Large Cap Research 2/17/1998 2,084 590 - -
Cova Mid-Cap Value 11/7/1997 1,437 892 89 -
Cova Quality Bond 5/20/1996 7,280 5,970 2,617 669
Cova Small Cap Stock 5/15/1996 11,346 8,354 6,578 1,279
Cova Large Cap Stock 5/16/1996 34,554 22,001 10,224 1,431
Cova Select Equity 5/15/1996 22,759 17,884 9,845 2,011
Cova International Equity 5/14/1996 13,704 10,046 6,351 1,360
GACC Money Market 12/4/1997 1,821 1,440 150 -
Russell Multi-Style Equity 12/31/1997 3,147 616 - -
Russell Aggressive Equity 12/31/1997 463 87 - -
Russell Non-US 12/31/1997 1,454 204 - -
Russell Core Bond 12/31/1997 2,299 654 - -
Russell Real Estate Securities 7/1/1999 56 - - -
AIM V.I. Value 12/31/1997 2,659 37 - -
AIM V.I. Capital Appreciation 12/31/1997 1,065 66 - -
AIM V.I. International Equity 12/31/1997 337 174 - -
Alliance Premier Growth 12/31/1997 2,496 919 - -
Alliance Real Estate Investment 12/31/1997 220 177 - -
Liberty Newport Tiger Fund, Variable 12/31/1997 41 22 - -
Goldman Sachs Growth and Income 3/31/1998 282 130 - -
Goldman Sachs International Equity 3/31/1998 402 181 - -
Goldman Sachs Global Income 3/31/1998 33 32 - -
Kemper-Dreman High Return Equity 5/15/1998 - - - -
Kemper Small Cap Growth 12/31/1997 127 45 - -
Kemper Small Cap Value 12/31/1997 246 146 - -
Kemper Government Securities 12/31/1997 220 27 - -
MFS Bond 5/15/1998 - - - -
MFS Research 12/31/1997 926 317 - -
MFS Growth with Income 12/31/1997 1,435 782 - -
MFS Emerging Growth 12/31/1997 1,444 632 - -
MFS/Foreign & Colonial Emerging Markets Equity 12/31/1997 35 28 - -
MFS High Income 12/31/1997 223 129 - -
MFS Global Governments 12/31/1997 11 4 - -
Oppenheimer Capital Appreciation 12/31/1997 273 62 - -
Oppenheimer Main Street Growth & Income 12/31/1997 429 154 - -
Oppenheimer High Income 12/31/1997 261 104 - -
Oppenheimer Bond 12/31/1997 735 489 - -
Oppenheimer Strategic Bond 12/31/1997 77 27 - -
Putnam VT Growth and Income 12/31/1997 1,502 914 - -
Putnam VT New Value 12/31/1997 24 23 - -
Putnam VT Vista 12/31/1997 315 80 - -
Putnam VT International Growth 12/31/1997 1,519 663 - -
Putnam VT International New Opportunities 12/31/1997 199 55 - -
Templeton Bond 3/1/1999 8 - - -
Franklin Small Cap Investments 3/1/1999 128 - - -
Templeton Stock 3/2/1999 116 - - -
Templeton International 9/21/1998 567 61 - -
Templeton Developing Markets 9/21/1998 152 53 - -
Templeton Mutual Shares Investments 9/21/1998 99 9 - -
Franklin Growth Investments 3/1/1999 157 - - -
Fidelity VIP Growth 2/17/1998 85 7 - -
Fidelity VIP II Contrafund 2/17/1998 9 1 - -
Fidelity VIP III Growth Opportunities 2/17/1998 6 1 - -
Fidelity VIP III Growth & Income 2/17/1998 92 26 - -
Fidelity VIP Equity-Income 2/17/1998 38 8 - -
American Century VP Income & Growth 11/19/1999 11 - - -
American Century VP International 11/19/1999 - - - -
American Century VP Value 11/19/1999 5 - - -
Dreyfus Stock Index 11/19/1999 - - - -
Dreyfus VIF Disciplined Stock 11/19/1999 - - - -
Dreyfus VIF Capital Appreciation 11/19/1999 - - - -
INVESCO VIF Dynamics 11/19/1999 22 - - -
INVESCO VIF High Yield 11/19/1999 10 - - -
PIMCO High Yield Bond 11/19/1999 - - - -
PIMCO Low Duration Bond 11/19/1999 - - - -
PIMCO StocksPLUS Growth & Income 11/19/1999 - - - -
PIMCO Total Return Bond 11/19/1999 15 - - -
Scudder International 11/19/1999 7 - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED
Commenced Total Return*
--------------------------------------------------------
Operations 1999 1998 1997 1996
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Cova Lord Abbett Growth and Income 1/8/1999 9.90% - - -
Cova Bond Debenture 5/20/1996 1.99% 4.77% 14.05% 11.32%
Cova Developing Growth 11/7/1997 30.58% 5.13% -2.80% -
Cova Large Cap Research 2/17/1998 23.76% 9.94% - -
Cova Mid-Cap Value 11/7/1997 4.19% -0.29% 4.17% -
Cova Quality Bond 5/20/1996 -2.92% 6.81% 7.58% 4.20%
Cova Small Cap Stock 5/15/1996 42.52% -6.74% 19.31% 3.69%
Cova Large Cap Stock 5/16/1996 16.06% 30.49% 31.36% 11.62%
Cova Select Equity 5/15/1996 8.23% 20.88% 29.67% 6.76%
Cova International Equity 5/14/1996 26.73% 12.45% 4.52% 8.60%
GACC Money Market 12/4/1997 3.74% 4.15% 0.34% -
Russell Multi-Style Equity 12/31/1997 15.54% 27.40% - -
Russell Aggressive Equity 12/31/1997 4.61% 0.01% - -
Russell Non-US 12/31/1997 31.51% 11.83% - -
Russell Core Bond 12/31/1997 -1.99% 6.31% - -
Russell Real Estate Securities 7/1/1999 -6.05% - - -
AIM V.I. Value 12/31/1997 28.09% 30.76% - -
AIM V.I. Capital Appreciation 12/31/1997 42.60% 18.00% - -
AIM V.I. International Equity 12/31/1997 52.90% 14.19% - -
Alliance Premier Growth 12/31/1997 30.47% 46.21% - -
Alliance Real Estate Investment 12/31/1997 -6.43% -19.99% - -
Liberty Newport Tiger Fund, Variable 12/31/1997 65.94% -7.21% - -
Goldman Sachs Growth and Income 3/31/1998 3.94% -11.60% - -
Goldman Sachs International Equity 3/31/1998 30.02% 1.94% - -
Goldman Sachs Global Income 3/31/1998 -2.39% 6.53% - -
Kemper-Dreman High Return Equity 5/15/1998 -11.62% 4.89% - -
Kemper Small Cap Growth 12/31/1997 32.66% 16.88% - -
Kemper Small Cap Value 12/31/1997 1.32% -12.30% - -
Kemper Government Securities 12/31/1997 -0.72% 6.35% - -
MFS Bond 5/15/1998 -2.10% 5.09% - -
MFS Research 12/31/1997 22.32% 21.79% - -
MFS Growth with Income 12/31/1997 5.21% 20.75% - -
MFS Emerging Growth 12/31/1997 74.26% 32.44% - -
MFS/Foreign & Colonial Emerging Markets Equity 12/31/1997 36.25% -34.18% - -
MFS High Income 12/31/1997 4.97% -1.37% - -
MFS Global Governments 12/31/1997 -3.85% 6.63% - -
Oppenheimer Capital Appreciation 12/31/1997 39.69% 22.44% - -
Oppenheimer Main Street Growth & Income 12/31/1997 20.01% 3.40% - -
Oppenheimer High Income 12/31/1997 2.84% -0.92% - -
Oppenheimer Bond 12/31/1997 -2.89% 5.52% - -
Oppenheimer Strategic Bond 12/31/1997 1.40% 1.65% - -
Putnam VT Growth and Income 12/31/1997 0.17% 14.03% - -
Putnam VT New Value 12/31/1997 -1.13% 4.98% - -
Putnam VT Vista 12/31/1997 50.77% 18.04% - -
Putnam VT International Growth 12/31/1997 57.92% 17.29% - -
Putnam VT International New Opportunities 12/31/1997 100.15% 14.21% - -
Templeton Bond 3/1/1999 -2.98% - - -
Franklin Small Cap Investments 3/1/1999 77.19% - - -
Templeton Stock 3/2/1999 33.22% - - -
Templeton International 9/21/1998 21.95% 15.92% - -
Templeton Developing Markets 9/21/1998 51.89% 33.87% - -
Templeton Mutual Shares Investments 9/21/1998 8.16% 11.61% - -
Franklin Growth Investments 3/1/1999 46.88% - - -
Fidelity VIP Growth 2/17/1998 35.57% 31.16% - -
Fidelity VIP II Contrafund 2/17/1998 22.58% 24.29% - -
Fidelity VIP III Growth Opportunities 2/17/1998 2.78% 18.14% - -
Fidelity VIP III Growth & Income 2/17/1998 7.66% 22.59% - -
Fidelity VIP Equity-Income 2/17/1998 4.89% 6.74% - -
American Century VP Income & Growth 11/19/1999 3.25% - - -
American Century VP International 11/19/1999 25.17% - - -
American Century VP Value 11/19/1999 -4.13% - - -
Dreyfus Stock Index 11/19/1999 3.36% - - -
Dreyfus VIF Disciplined Stock 11/19/1999 3.06% - - -
Dreyfus VIF Capital Appreciation 11/19/1999 1.28% - - -
INVESCO VIF Dynamics 11/19/1999 11.49% - - -
INVESCO VIF High Yield 11/19/1999 1.23% - - -
PIMCO High Yield Bond 11/19/1999 0.78% - - -
PIMCO Low Duration Bond 11/19/1999 -0.31% - - -
PIMCO StocksPLUS Growth & Income 11/19/1999 3.11% - - -
PIMCO Total Return Bond 11/19/1999 -1.02% - - -
Scudder International 11/19/1999 16.38% - - -
* The total return for sub-accounts that commenced operations during the period is not annualized.
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED
Separate Account Expenses
Commenced As a % of Average Net Assets**
----------------------------------------------------------
Operations 1999 1998 1997 1996
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Cova Lord Abbett Growth and Income 1/8/1999 1.40% - - -
Cova Bond Debenture 5/20/1996 1.40% 1.40% 1.40% 1.40%
Cova Developing Growth 11/7/1997 1.40% 1.40% 1.40% -
Cova Large Cap Research 2/17/1998 1.40% 1.40% - -
Cova Mid-Cap Value 11/7/1997 1.40% 1.40% 1.40% -
Cova Quality Bond 5/20/1996 1.40% 1.40% 1.40% 1.40%
Cova Small Cap Stock 5/15/1996 1.40% 1.40% 1.40% 1.40%
Cova Large Cap Stock 5/16/1996 1.40% 1.40% 1.40% 1.40%
Cova Select Equity 5/15/1996 1.40% 1.40% 1.40% 1.40%
Cova International Equity 5/14/1996 1.40% 1.40% 1.40% 1.40%
GACC Money Market 12/4/1997 1.40% 1.40% 1.40% -
Russell Multi-Style Equity 12/31/1997 1.40% 1.40% - -
Russell Aggressive Equity 12/31/1997 1.40% 1.40% - -
Russell Non-US 12/31/1997 1.40% 1.40% - -
Russell Core Bond 12/31/1997 1.40% 1.40% - -
Russell Real Estate Securities 7/1/1999 1.40% - - -
AIM V.I. Value 12/31/1997 1.40% 1.40% - -
AIM V.I. Capital Appreciation 12/31/1997 1.40% 1.40% - -
AIM V.I. International Equity 12/31/1997 1.40% 1.40% - -
Alliance Premier Growth 12/31/1997 1.40% 1.40% - -
Alliance Real Estate Investment 12/31/1997 1.40% 1.40% - -
Liberty Newport Tiger Fund, Variable 12/31/1997 1.40% 1.39% - -
Goldman Sachs Growth and Income 3/31/1998 1.40% 1.40% - -
Goldman Sachs International Equity 3/31/1998 1.40% 1.40% - -
Goldman Sachs Global Income 3/31/1998 1.40% 1.40% - -
Kemper-Dreman High Return Equity 5/15/1998 1.40% 0.55% - -
Kemper Small Cap Growth 12/31/1997 1.40% 1.40% - -
Kemper Small Cap Value 12/31/1997 1.40% 1.40% - -
Kemper Government Securities 12/31/1997 1.40% 1.38% - -
MFS Bond 5/15/1998 1.40% 0.52% - -
MFS Research 12/31/1997 1.40% 1.40% - -
MFS Growth with Income 12/31/1997 1.40% 1.40% - -
MFS Emerging Growth 12/31/1997 1.40% 1.40% - -
MFS/Foreign & Colonial Emerging Markets Equity 12/31/1997 1.40% 1.40% - -
MFS High Income 12/31/1997 1.40% 1.40% - -
MFS Global Governments 12/31/1997 1.40% 1.37% - -
Oppenheimer Capital Appreciation 12/31/1997 1.40% 1.40% - -
Oppenheimer Main Street Growth & Income 12/31/1997 1.40% 1.40% - -
Oppenheimer High Income 12/31/1997 1.40% 1.40% - -
Oppenheimer Bond 12/31/1997 1.40% 1.40% - -
Oppenheimer Strategic Bond 12/31/1997 1.40% 1.40% - -
Putnam VT Growth and Income 12/31/1997 1.40% 1.40% - -
Putnam VT New Value 12/31/1997 1.40% 1.40% - -
Putnam VT Vista 12/31/1997 1.40% 1.40% - -
Putnam VT International Growth 12/31/1997 1.40% 1.40% - -
Putnam VT International New Opportunities 12/31/1997 1.40% 1.40% - -
Templeton Bond 3/1/1999 1.40% - - -
Franklin Small Cap Investments 3/1/1999 1.40% - - -
Templeton Stock 3/2/1999 1.40% - - -
Templeton International 9/21/1998 1.40% 1.40% - -
Templeton Developing Markets 9/21/1998 1.40% 1.40% - -
Templeton Mutual Shares Investments 9/21/1998 1.40% 1.32% - -
Franklin Growth Investments 3/1/1999 1.40% - - -
Fidelity VIP Growth 2/17/1998 1.40% 1.35% - -
Fidelity VIP II Contrafund 2/17/1998 1.40% 0.75% - -
Fidelity VIP III Growth Opportunities 2/17/1998 1.40% 0.52% - -
Fidelity VIP III Growth & Income 2/17/1998 1.40% 1.39% - -
Fidelity VIP Equity-Income 2/17/1998 1.40% 1.34% - -
American Century VP Income & Growth 11/19/1999 1.40% - - -
American Century VP International 11/19/1999 1.40% - - -
American Century VP Value 11/19/1999 1.40% - - -
Dreyfus Stock Index 11/19/1999 1.40% - - -
Dreyfus VIF Disciplined Stock 11/19/1999 1.40% - - -
Dreyfus VIF Capital Appreciation 11/19/1999 1.40% - - -
INVESCO VIF Dynamics 11/19/1999 1.40% - - -
INVESCO VIF High Yield 11/19/1999 1.40% - - -
PIMCO High Yield Bond 11/19/1999 1.40% - - -
PIMCO Low Duration Bond 11/19/1999 1.40% - - -
PIMCO StocksPLUS Growth & Income 11/19/1999 1.40% - - -
PIMCO Total Return Bond 11/19/1999 1.40% - - -
Scudder International 11/19/1999 1.40% - - -
** The expense ratio for sub-accounts that commenced operations during the period is annualized.
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION
The realized gain (loss) on the sale of fund shares and the change in
unrealized appreciation for each sub-account during the year or period
December 31, 1999 and the year or period ending December 31, 1998 follows:
Realized Gain (Loss)
-----------------------------------------------------------
Aggregate Aggregate Cost
Year or Proceeds from Sales of Fund Shares Realized
Period of Fund Shares Redeemed Gain (Loss)
---------- ------------------ ----------------- ---------------
<S> <C> <C> <C> <C>
Cova Quality Income 1999 $ 763,184 $ 780,067 $ (16,883)
1998 68,255 66,652 1,603
Cova Money Market 1999 267,703 267,703 -
1998 127,698 127,698 -
Cova Stock Index 1999 2,369,204 2,061,076 308,128
1998 135,751 117,530 18,221
Cova VKAC Growth and Income 1999 2,136,203 2,024,017 112,186
1998 104,628 89,010 15,618
Cova Lord Abbett Growth and Income 1999 3,133,491 3,049,051 84,440
1998 - - -
Cova Bond Debenture 1999 946,728 924,039 22,689
1998 670,935 657,487 13,448
Cova Developing Growth 1999 29,109 25,241 3,868
1998 59,769 61,323 (1,554)
Cova Large Cap Research 1999 44,923 39,900 5,023
1998 1,318 1,293 25
Cova Mid-Cap Value 1999 164,060 155,815 8,245
1998 121,779 126,280 (4,501)
Cova Quality Bond 1999 1,843,153 1,830,190 12,963
1998 319,864 309,113 10,751
Cova Small Cap Stock 1999 1,483,447 1,389,634 93,813
1998 986,220 974,390 11,830
Cova Large Cap Stock 1999 2,143,398 1,691,559 451,839
1998 1,700,678 1,489,784 210,894
Cova Select Equity 1999 1,326,474 1,133,512 192,962
1998 1,190,393 1,040,041 150,352
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION, CONTINUED
Realized Gain (Loss)
-----------------------------------------------------------
Aggregate Aggregate Cost
Year or Proceeds from Sales of Fund Shares Realized
Period of Fund Shares Redeemed Gain (Loss)
---------- ------------------ ----------------- ---------------
<S> <C> <C> <C> <C>
Cova International Equity 1999 $ 868,689 $ 749,767 $ 118,922
1998 652,667 629,290 23,377
GACC Money Market 1999 2,410,357 2,367,151 43,206
1998 2,053,922 2,035,460 18,462
Lord Abbett Growth and Income 1999 38,963,704 34,458,170 4,505,534
1998 1,839,293 1,749,075 90,218
Russell Multi-Style Equity 1999 201,087 197,677 3,410
1998 7,462 7,262 200
Russell Aggressive Equity 1999 54,526 54,268 258
1998 416 468 (52)
Russell Non-US 1999 101,624 93,032 8,592
1998 821 900 (79)
Russell Core Bond 1999 352,634 364,812 (12,178)
1998 1,162 1,160 2
Russell Real Estate Securities 1999 1,815 1,814 1
1998 - - -
AIM V.I. Value 1999 249,337 244,207 5,130
1998 26,188 27,774 (1,586)
AIM V.I. Capital Appreciation 1999 35,568 33,976 1,592
1998 236 258 (22)
AIM V.I. International Equity 1999 62,427 61,796 631
1998 40,160 46,103 (5,943)
Alliance Premier Growth 1999 229,266 202,124 27,142
1998 67,438 74,072 (6,634)
Alliance Real Estate Investment 1999 62,352 66,956 (4,604)
1998 14,746 17,733 (2,987)
Liberty Newport Tiger Fund, Variable 1999 294 188 106
1998 37 33 4
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION, CONTINUED
Realized Gain (Loss)
-----------------------------------------------------------
Aggregate Aggregate Cost
Year or Proceeds from Sales of Fund Shares Realized
Period of Fund Shares Redeemed Gain (Loss)
---------- ------------------ ----------------- ---------------
<S> <C> <C> <C> <C>
Goldman Sachs Growth and Income 1999 $ 24,697 $ 24,338 $ 359
1998 23,582 27,701 (4,119)
Goldman Sachs International Equity 1999 26,414 25,126 1,288
1998 999 1,123 (124)
Goldman Sachs Global Income 1999 513 520 (7)
1998 181 176 5
Kemper-Dreman High Return Equity 1999 1 1 -
1998 - - -
Kemper Small Cap Growth 1999 8,971 7,861 1,110
1998 7,419 7,675 (256)
Kemper Small Cap Value 1999 38,781 41,554 (2,773)
1998 21,781 28,205 (6,424)
Kemper Government Securities 1999 167,850 168,571 (721)
1998 9 9 -
MFS Bond 1999 1 1 -
1998 - - -
MFS Research 1999 33,705 31,571 2,134
1998 1,823 1,914 (91)
MFS Growth with Income 1999 73,640 68,795 4,845
1998 40,854 45,826 (4,972)
MFS Emerging Growth 1999 75,663 60,111 15,552
1998 31,963 34,744 (2,781)
MFS/Foreign & Colonial Emerging Markets Equi1999 36,299 38,041 (1,742)
1998 32,580 43,015 (10,435)
MFS High Income 1999 38,805 37,409 1,396
1998 18,006 19,172 (1,166)
MFS Global Governments 1999 2,043 2,097 (54)
1998 34 33 1
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION, CONTINUED
Realized Gain (Loss)
-----------------------------------------------------------
Aggregate Aggregate Cost
Year or Proceeds from Sales of Fund Shares Realized
Period of Fund Shares Redeemed Gain (Loss)
---------- ------------------ ----------------- ---------------
<S> <C> <C> <C> <C>
Oppenheimer Capital Appreciation 1999 $ 19,283 $ 17,339 $ 1,944
1998 731 756 (25)
Oppenheimer Main Street Growth & Income 1999 66,494 60,355 6,139
1998 1,004 1,167 (163)
Oppenheimer High Income 1999 20,434 20,986 (552)
1998 2,657 2,855 (198)
Oppenheimer Bond 1999 134,169 136,015 (1,846)
1998 17,891 17,655 236
Oppenheimer Strategic Bond 1999 15,743 15,871 (128)
1998 160 165 (5)
Putnam VT Growth and Income 1999 130,751 127,509 3,242
1998 45,339 51,871 (6,532)
Putnam VT New Value 1999 17,801 16,648 1,153
1998 6,880 6,868 12
Putnam VT Vista 1999 32,813 29,123 3,690
1998 376 388 (12)
Putnam VT International Growth 1999 114,673 103,575 11,098
1998 64,381 72,707 (8,326)
Putnam VT International New Opportunities 1999 16,020 12,486 3,534
1998 378 405 (27)
Templeton Bond 1999 40 40 -
1998 - - -
Franklin Small Cap Investments 1999 190,577 145,895 44,682
1998 - - -
Templeton Stock 1999 25,941 26,138 (197)
1998 - - -
Templeton International 1999 2,257 2,151 106
1998 133 124 9
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION, CONTINUED
Realized Gain (Loss)
-----------------------------------------------------------
Aggregate Aggregate Cost
Year or Proceeds from Sales of Fund Shares Realized
Period of Fund Shares Redeemed Gain (Loss)
---------- ------------------ ----------------- ---------------
<S> <C> <C> <C> <C>
Templeton Developing Markets 1999 $ 33,863 $ 28,005 $ 5,858
1998 133 125 8
Templeton Mutual Shares Investments 1999 9,338 9,502 (164)
1998 - - -
Franklin Growth Investments 1999 393 364 29
1998 - - -
Fidelity VIP Growth 1999 1,642 1,430 212
1998 3 3 -
Fidelity VIP II Contrafund 1999 92 89 3
1998 - - -
Fidelity VIP III Growth Opportunities 1999 76 73 3
1998 - - -
Fidelity VIP III Growth & Income 1999 1,822 1,642 180
1998 - - -
Fidelity VIP Equity-Income 1999 540 548 (8)
1998 - - -
American Century VP Income & Growth 1999 - - -
1998 - - -
American Century VP International 1999 - - -
1998 - - -
American Century VP Value 1999 - - -
1998 - - -
Dreyfus Stock Index 1999 - - -
1998 - - -
Dreyfus VIF Disciplined Stock 1999 - - -
1998 - - -
Dreyfus VIF Capital Appreciation 1999 - - -
1998 - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION, CONTINUED
Realized Gain (Loss)
-----------------------------------------------------------
Aggregate Aggregate Cost
Year or Proceeds from Sales of Fund Shares Realized
Period of Fund Shares Redeemed Gain (Loss)
---------- ------------------ ----------------- ---------------
<S> <C> <C> <C> <C>
INVESCO VIF Dynamics 1999 $ - $ - $ -
1998 - - -
INVESCO VIF High Yield 1999 - - -
1998 - - -
PIMCO High Yield Bond 1999 - - -
1998 - - -
PIMCO Low Duration Bond 1999 - - -
1998 - - -
PIMCO StocksPLUS Growth & Income 1999 - - -
1998 - - -
PIMCO Total Return Bond 1999 - - -
1998 - - -
Scudder International 1999 - - -
1998 - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION, CONTINUED
Unrealized Appreciation (Depreciation)
-------------------------------------------------------------
Appreciation Appreciation
Year or (Depreciation) (Depreciation)
Period End of Period Beginning of Period Change
---------- ------------------ ------------------- ----------------
<S> <C> <C> <C> <C>
Cova Quality Income 1999 $ - $ 19,209 $ (19,209)
1998 19,209 14,678 4,531
Cova Money Market 1999 - - -
1998 - - -
Cova Stock Index 1999 - 491,713 (491,713)
1998 491,713 393,343 98,370
Cova VKAC Growth and Income 1999 - 316,285 (316,285)
1998 316,285 251,383 64,902
Cova Lord Abbett Growth and Income 1999 4,841,111 - 4,841,111
1998 - - -
Cova Bond Debenture 1999 337,384 273,399 63,985
1998 273,399 163,335 110,064
Cova Developing Growth 1999 460,172 57,633 402,539
1998 57,633 404 57,229
Cova Large Cap Research 1999 371,070 52,098 318,972
1998 52,098 - 52,098
Cova Mid-Cap Value 1999 74,191 14,516 59,675
1998 14,516 2,536 11,980
Cova Quality Bond 1999 8,755 254,122 (245,367)
1998 254,122 42,117 212,005
Cova Small Cap Stock 1999 3,439,414 (2,832) 3,442,246
1998 (2,832) 765,772 (768,604)
Cova Large Cap Stock 1999 8,146,484 4,717,561 3,428,923
1998 4,717,561 630,868 4,086,693
Cova Select Equity 1999 3,050,805 3,163,743 (112,938)
1998 3,163,743 1,284,973 1,878,770
Cova International Equity 1999 3,605,177 918,988 2,686,189
1998 918,988 91,655 827,333
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION, CONTINUED
Unrealized Appreciation (Depreciation)
-------------------------------------------------------------
Appreciation Appreciation
Year or (Depreciation) (Depreciation)
Period End of Period Beginning of Period Change
---------- ------------------ ------------------- ----------------
<S> <C> <C> <C> <C>
GACC Money Market 1999 $ 50,675 $ 8,746 $ 41,929
1998 8,746 440 8,306
Lord Abbett Growth and Income 1999 - 2,782,796 (2,782,796)
1998 2,782,796 1,514,090 1,268,706
Russell Multi-Style Equity 1999 181,798 37,385 144,413
1998 37,385 - 37,385
Russell Aggressive Equity 1999 39,083 (1,753) 40,836
1998 (1,753) - (1,753)
Russell Non-US 1999 259,569 1,844 257,725
1998 1,844 - 1,844
Russell Core Bond 1999 (142,357) 3,543 (145,900)
1998 3,543 - 3,543
Russell Real Estate Securities 1999 (393) - (393)
1998 - - -
AIM V.I. Value 1999 312,963 1,376 311,587
1998 1,376 - 1,376
AIM V.I. Capital Appreciation 1999 211,517 5,386 206,131
1998 5,386 - 5,386
AIM V.I. International Equity 1999 101,232 (6,224) 107,456
1998 (6,224) - (6,224)
Alliance Premier Growth 1999 582,513 118,514 463,999
1998 118,514 - 118,514
Alliance Real Estate Investment 1999 (30,367) (17,191) (13,176)
1998 (17,191) - (17,191)
Liberty Newport Tiger Fund, Variable 1999 18,690 2,743 15,947
1998 2,743 - 2,743
Goldman Sachs Growth and Income 1999 (4,321) (11,213) 6,892
1998 (11,213) - (11,213)
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION, CONTINUED
Unrealized Appreciation (Depreciation)
-------------------------------------------------------------
Appreciation Appreciation
Year or (Depreciation) (Depreciation)
Period End of Period Beginning of Period Change
---------- ------------------ ------------------- ----------------
<S> <C> <C> <C> <C>
Goldman Sachs International Equity 1999 $ 62,028 2,720 $ 59,308
1998 2,720 - 2,720
Goldman Sachs Global Income 1999 (1,776) (187) (1,589)
1998 (187) - (187)
Kemper-Dreman High Return Equity 1999 (8) 5 (13)
1998 5 - 5
Kemper Small Cap Growth 1999 37,072 3,989 33,083
1998 3,989 - 3,989
Kemper Small Cap Value 1999 (3,443) (13,980) 10,537
1998 (13,980) - (13,980)
Kemper Government Securities 1999 76 206 (130)
1998 206 - 206
MFS Bond 1999 1 5 (4)
1998 5 - 5
MFS Research 1999 175,774 24,572 151,202
1998 24,572 - 24,572
MFS Growth with Income 1999 126,692 54,989 71,703
1998 54,989 - 54,989
MFS Emerging Growth 1999 684,030 87,574 596,456
1998 87,574 - 87,574
MFS/Foreign & Colonial Emerging Markets Equit1999 5,475 (7,685) 13,160
1998 (7,685) - (7,685)
MFS High Income 1999 (2,211) (2,625) 414
1998 (2,625) - (2,625)
MFS Global Governments 1999 (242) 189 (431)
1998 189 - 189
Oppenheimer Capital Appreciation 1999 62,672 9,357 53,315
1998 9,357 - 9,357
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION, CONTINUED
Unrealized Appreciation (Depreciation)
-------------------------------------------------------------
Appreciation Appreciation
Year or (Depreciation) (Depreciation)
Period End of Period Beginning of Period Change
---------- ------------------ ------------------- ----------------
<S> <C> <C> <C> <C>
Oppenheimer Main Street Growth & Income 1999 $ 49,552 (771) $ 50,323
1998 (771) - (771)
Oppenheimer High Income 1999 (3,509) (2,071) (1,438)
1998 (2,071) - (2,071)
Oppenheimer Bond 1999 (15,662) 12,503 (28,165)
1998 12,503 - 12,503
Oppenheimer Strategic Bond 1999 136 (129) 265
1998 (129) - (129)
Putnam VT Growth and Income 1999 (49,990) 44,649 (94,639)
1998 44,649 - 44,649
Putnam VT New Value 1999 (231) 860 (1,091)
1998 860 - 860
Putnam VT Vista 1999 79,103 7,815 71,288
1998 7,815 - 7,815
Putnam VT International Growth 1999 513,520 (2,297) 515,817
1998 (2,297) - (2,297)
Putnam VT International New Opportunities 1999 91,867 299 91,568
1998 299 - 299
Templeton Bond 1999 (9) - (9)
1998 - - -
Franklin Small Cap Investments 1999 33,706 - 33,706
1998 - - -
Templeton Stock 1999 14,590 - 14,590
1998 - - -
Templeton International 1999 67,478 4,711 62,767
1998 4,711 - 4,711
Templeton Developing Markets 1999 37,123 3,570 33,553
1998 3,570 - 3,570
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION, CONTINUED
Unrealized Appreciation (Depreciation)
-------------------------------------------------------------
Appreciation Appreciation
Year or (Depreciation) (Depreciation)
Period End of Period Beginning of Period Change
---------- ------------------ ------------------- ----------------
<S> <C> <C> <C> <C>
Templeton Mutual Shares Investments 1999 $ 1,833 $ 263 $ 1,570
1998 263 - 263
Franklin Growth Investments 1999 24,948 - 24,948
1998 - - -
Fidelity VIP Growth 1999 15,091 1,118 13,973
1998 1,118 - 1,118
Fidelity VIP II Contrafund 1999 1,306 99 1,207
1998 99 - 99
Fidelity VIP III Growth Opportunities 1999 437 19 418
1998 19 - 19
Fidelity VIP III Growth & Income 1999 7,812 3,784 4,028
1998 3,784 - 3,784
Fidelity VIP Equity-Income 1999 (988) 635 (1,623)
1998 635 - 635
American Century VP Income & Growth 1999 407 - 407
1998 - - -
American Century VP International 1999 25 - 25
1998 - - -
American Century VP Value 1999 134 - 134
1998 - - -
Dreyfus Stock Index 1999 3 - 3
1998 - - -
Dreyfus VIF Disciplined Stock 1999 2 - 2
1998 - - -
Dreyfus VIF Capital Appreciation 1999 - - -
1998 - - -
INVESCO VIF Dynamics 1999 1,133 - 1,133
1998 - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION, CONTINUED
Unrealized Appreciation (Depreciation)
-------------------------------------------------------------
Appreciation Appreciation
Year or (Depreciation) (Depreciation)
Period End of Period Beginning of Period Change
---------- ------------------ ------------------- ----------------
<S> <C> <C> <C> <C>
INVESCO VIF High Yield 1999 $ (14) $ - $ (14)
1998 - - -
PIMCO High Yield Bond 1999 - - -
1998 - - -
PIMCO Low Duration Bond 1999 (1) - (1)
1998 - - -
PIMCO StocksPLUS Growth & Income 1999 (4) - (4)
1998 - - -
PIMCO Total Return Bond 1999 (33) - (33)
1998 - - -
Scudder International 1999 516 - 516
1998 - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(8) UNIT TRANSACTIONS
The change in the number of units for each sub-account follows:
Cova
---------------------------------------------------------------------------------------
VKAC Lord Abbett
Growth Growth
Quality Money Stock and and Bond Developing
Income Market Index Income Income Debenture Growth
----------- ---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation units:
Unit balance at 12/31/97 43,729 29,951 69,602 80,080 - 347,400 6,039
Cova units purchased - - - - - - -
Cova units redeemed - - - - - - -
Contract units purchased - - - 48 - 83,877 31,649
Contract units transferred, net 763 (8,882) 5,039 9,020 - 280,852 33,339
Contract units redeemed (507) (306) (1,474) (2,306) - (30,453) (101)
----------- ---------- ----------- ----------- ----------- ----------- -----------
Unit balance at 12/31/98 43,985 20,763 73,167 86,842 - 681,676 70,926
Cova units purchased - - - - - - -
Cova units redeemed - - - - - - -
Contract units purchased - - - - 22,044 27,666 16,214
Contract units transferred, net (43,985) (20,763) (73,167) (86,842) 1,299,900 224,373 44,030
Contract units redeemed - - - - (80,888) (74,415) (1,117)
----------- ---------- ----------- ----------- ----------- ----------- -----------
Unit balance at 12/31/99 - - - - 1,241,056 859,300 130,053
=========== ========== =========== =========== =========== =========== ===========
Annuity Units:
Unit balance at 12/31/97 - -
Contract units purchased - -
Contract units transferred, net - -
Contract units redeemed - -
----------- -----------
Unit balance at 12/31/98 - -
Contract units purchased 4,596 574
Contract units transferred, net - -
Contract units redeemed (229) (10)
----------- -----------
Unit balance at 12/31/99 4,367 564
=========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(8) UNIT TRANSACTIONS, CONTINUED
Cova
---------------------------------------------------------------------------------------
Large Small Large
Cap Mid-Cap Quality Cap Cap Select International
Research Value Bond Stock Stock Equity Equity
----------- ----------- ---------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation units:
Unit balance at 12/31/97 - 8,510 234,643 487,580 686,677 700,550 554,105
Cova units purchased - - - - - - -
Cova units redeemed - - - - - - -
Contract units purchased 21,971 56,591 71,796 55,831 86,312 93,645 39,068
Contract units transferred, net 27,982 20,523 212,881 162,174 401,442 309,696 218,017
Contract units redeemed (59) (167) (18,275) (41,660) (42,041) (51,094) (31,815)
----------- ----------- ---------- ----------- ----------- ----------- ----------
Unit balance at 12/31/98 49,894 85,457 501,045 663,925 1,132,390 1,052,797 779,375
Cova units purchased - - - - - - -
Cova units redeemed - - - - - - -
Contract units purchased 20,904 8,156 45,162 6,514 66,126 40,833 14,882
Contract units transferred, net 74,235 42,226 134,409 17,765 437,689 218,477 83,145
Contract units redeemed (2,663) (3,680) (51,215) (55,509) (104,248) (74,671) (38,406)
----------- ----------- ---------- ----------- ----------- ----------- ----------
Unit balance at 12/31/99 142,370 132,159 629,401 632,695 1,531,957 1,237,436 838,996
=========== =========== ========== =========== =========== =========== ==========
Annuity Units:
Unit balance at 12/31/97 - -
Contract units purchased - -
Contract units transferred, net - -
Contract units redeemed - -
----------- -----------
Unit balance at 12/31/98 - -
Contract units purchased 497 536
Contract units transferred, net - -
Contract units redeemed (9) (9)
----------- -----------
Unit balance at 12/31/99 488 527
=========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(8) UNIT TRANSACTIONS, CONTINUED
GACC Lord Abbett Russell
----------- ---------- --------------------------------------------------------------
Growth Multi- Real
Money and Style Aggressive Core Estate
Market Income Equity Equity Non-US Bond Securities
----------- ---------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation units:
Unit balance at 12/31/97 14,091 791,310 - - - - -
Cova units purchased - - 10 10 10 10 -
Cova units redeemed - - (10) (10) (10) (10) -
Contract units purchased 175,697 70,041 45,702 7,795 16,824 54,877 -
Contract units transferred, net (33,948) 266,026 2,780 887 1,475 6,720 -
Contract units redeemed (26,271) (46,611) (94) (31) (40) (99) -
----------- ---------- ----------- ----------- ----------- ---------- -----------
Unit balance at 12/31/98 129,569 1,080,766 48,388 8,651 18,259 61,498 -
Cova units purchased - - - - - - 10
Cova units redeemed - - - - - - -
Contract units purchased 40,375 1,724 91,450 20,590 42,210 62,696 3,044
Contract units transferred, net 59,538 (1,081,503) 86,263 18,811 44,034 109,121 3,043
Contract units redeemed (71,498) (987) (12,312) (3,822) (5,651) (12,660) (180)
----------- ---------- ----------- ----------- ----------- ---------- -----------
Unit balance at 12/31/99 157,984 - 213,789 44,230 98,852 220,655 5,917
=========== ========== =========== =========== =========== ========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(8) UNIT TRANSACTIONS, CONTINUED
Goldman
AIM Alliance Liberty Sachs
-------------------------------------- ------------------------ ----------- ----------
Newport
V.I. Real Tiger Growth
V.I. Capital International Premier Estate Fund, and
V.I. Value Appreciation Equity Growth Investment Variable Income
----------- ------------ ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation units:
Unit balance at 12/31/97 - - - - - - -
Cova units purchased 10 10 10 10 10 10 9
Cova units redeemed - - (10) (10) (10) - (9)
Contract units purchased 2,811 5,456 15,482 61,989 20,016 2,387 11,978
Contract units transferred, net 44 104 (97) 1,056 2,144 - 1,129
Contract units redeemed - - (128) (176) (83) - -
----------- ------------ ----------- ----------- ----------- ----------- ----------
Unit balance at 12/31/98 2,865 5,570 15,257 62,869 22,077 2,397 13,107
Cova units purchased - - - - - - -
Cova units redeemed (10) (10) - - - - -
Contract units purchased 44,739 21,372 4,532 26,274 2,189 242 1,334
Contract units transferred, net 112,925 36,447 (289) 49,651 6,416 - 13,209
Contract units redeemed (1,760) (115) (178) (7,958) (1,302) - (252)
=========== ============ =========== =========== =========== =========== ==========
Unit balance at 12/31/99 158,759 63,264 19,322 130,836 29,380 2,639 27,398
=========== ============ =========== =========== =========== =========== ==========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(8) UNIT TRANSACTIONS, CONTINUED
Goldman Sachs Kemper MFS
----------------------- ------------------------------------------------- -----------
Kemper-
Dreman Small Small
International Global High Return Cap Cap Government
Equity Income Equity Growth Value Securities Bond
----------- ---------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation units:
Unit balance at 12/31/97 - - - - - - -
Cova units purchased 9 10 10 10 10 10 10
Cova units redeemed (9) - - (10) (10) - -
Contract units purchased 13,558 2,992 - 3,287 18,879 2,180 -
Contract units transferred, net 2,301 - - 542 (2,152) 329 -
Contract units redeemed - - - - (86) - -
----------- ---------- ----------- ----------- ----------- ---------- -----------
Unit balance at 12/31/98 15,859 3,002 10 3,829 16,641 2,519 10
Cova units purchased - - - - - - -
Cova units redeemed - - - - - (10) -
Contract units purchased 2,125 - - 1,544 5,762 4,211 -
Contract units transferred, net 9,273 169 - 3,069 6,802 15,559 -
Contract units redeemed (188) (6) - (247) (1,472) (1,472) -
----------- ---------- ----------- ----------- ----------- ---------- -----------
Unit balance at 12/31/99 27,069 3,165 10 8,195 27,733 20,807 10
=========== ========== =========== =========== =========== ========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(8) UNIT TRANSACTIONS, CONTINUED
MFS Oppenheimer
---------------------------------------------------------------------------- -----------
F&C
Growth Emerging
with Emerging Markets High Global Capital
Research Income Growth Equity Income Governments Appreciation
----------- ----------- ----------- ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation units:
Unit balance at 12/31/97 - - - - - - -
Cova units purchased 10 10 10 10 10 10 10
Cova units redeemed (10) (10) (10) (10) (10) - -
Contract units purchased 22,166 60,871 45,740 8,277 12,308 316 4,131
Contract units transferred, net 3,870 4,170 2,112 (3,990) 826 59 938
Contract units redeemed (42) (250) (142) (53) (54) - (42)
----------- ----------- ----------- ---------- ----------- ------------ -----------
Unit balance at 12/31/98 25,994 64,791 47,710 4,234 13,080 385 5,037
Cova units purchased - - - - - - -
Cova units redeemed - - - - - - (10)
Contract units purchased 11,000 7,379 5,934 280 3,279 - 7,947
Contract units transferred, net 27,980 44,209 12,818 (516) 5,315 857 3,078
Contract units redeemed (2,825) (3,406) (3,900) (101) (134) (192) (73)
----------- ----------- ----------- ---------- ----------- ------------ -----------
Unit balance at 12/31/99 62,149 112,973 62,562 3,897 21,540 1,050 15,979
=========== =========== =========== ========== =========== ============ ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(8) UNIT TRANSACTIONS, CONTINUED
Oppenheimer Putnam
------------------------------------------------- ------------------------------------
Main Street
Growth VT Growth
and High Strategic and VT New
Income Income Bond Bond Income Value VT Vista
----------- ---------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation units:
Unit balance at 12/31/97 - - - - - - -
Cova units purchased 10 10 10 10 10 10 10
Cova units redeemed (10) (10) (10) - (10) - (10)
Contract units purchased 13,701 9,108 39,444 2,196 72,178 487 4,298
Contract units transferred, net 1,202 1,436 7,160 478 8,219 1,705 2,501
Contract units redeemed (21) (11) (227) - (283) - -
----------- ---------- ----------- ----------- ----------- ---------- -----------
Unit balance at 12/31/98 14,882 10,533 46,377 2,684 80,114 2,202 6,799
Cova units purchased - - - - - - -
Cova units redeemed - - - - - - -
Contract units purchased 6,837 10,663 5,587 1,431 11,339 960 1,813
Contract units transferred, net 14,499 4,546 21,701 3,461 49,556 (304) 10,387
Contract units redeemed (1,618) (121) (1,892) (73) (9,482) (516) (1,292)
----------- ---------- ----------- ----------- ----------- ---------- -----------
Unit balance at 12/31/99 34,600 25,621 71,773 7,503 131,527 2,342 17,707
=========== ========== =========== =========== =========== ========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(8) UNIT TRANSACTIONS, CONTINUED
Putnam Templeton
-------------------------- --------------------------------------------------------------
VT
VT International Franklin
International New Small Cap Developing
Growth Opportunities Bond Investments Stock International Markets
------------ ------------ ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation units:
Unit balance at 12/31/97 - - - - - - -
Cova units purchased 10 10 - - - 13 18
Cova units redeemed (10) (10) - - - - (18)
Contract units purchased 56,707 4,416 - - - 6,502 3,871
Contract units transferred, net 107 367 - - - 126 3,162
Contract units redeemed (248) - - - - (15) -
------------ ------------ ----------- ----------- ----------- ---------- -----------
Unit balance at 12/31/98 56,566 4,783 - - - 6,626 7,033
Cova units purchased - - 10 10 10 - -
Cova units redeemed - - - (10) (10) (13) -
Contract units purchased 10,196 227 524 806 4,297 12,524 1,216
Contract units transferred, net 17,571 3,759 261 17,982 4,392 31,833 5,345
Contract units redeemed (2,351) (48) - (11,562) (3) (133) (338)
------------ ------------ ----------- ----------- ----------- ---------- -----------
Unit balance at 12/31/99 81,982 8,721 795 7,226 8,686 50,837 13,256
============ ============ =========== =========== =========== ========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(8) UNIT TRANSACTIONS, CONTINUED
Templeton Fidelity
------------------------- ---------------------------------------------------------------
Mutual Franklin VIP III VIP III VIP
Shares Growth VIP VIP II Growth Growth & Equity-
Investments Investments Growth Contrafund Opportunities Income Income
------------ ----------- ----------- ----------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation units:
Unit balance at 12/31/97 - - - - - - -
Cova units purchased 12 - 10 10 10 10 10
Cova units redeemed - - - - - - -
Contract units purchased 863 - 89 68 - 325 296
Contract units transferred, net 69 - 406 - 104 1,747 466
Contract units redeemed - - - - - - -
------------ ----------- ----------- ----------- ------------ ----------- ----------
Unit balance at 12/31/98 944 - 505 78 114 2,082 772
Cova units purchased - 10 - - - - -
Cova units redeemed (12) (10) - - - - -
Contract units purchased - - 2,750 476 405 3,256 256
Contract units transferred, net 8,517 10,713 1,523 69 2 1,626 2,395
Contract units redeemed (1) (40) (1) - - - -
------------ ----------- ----------- ----------- ------------ ----------- ----------
Unit balance at 12/31/99 9,448 10,673 4,777 623 521 6,964 3,423
============ =========== =========== =========== ============ =========== ==========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(8) UNIT TRANSACTIONS, CONTINUED
American Century Dreyfus INVESCO
-------------------------------------- -------------------------------------- -----------
VP Income VIF VIF
& VP VP Stock Disciplined Capital VIF
Growth International Value Index Stock Appreciation Dynamics
----------- ------------ ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation units:
Unit balance at 12/31/97 - - - - - - -
Cova units purchased - - - - - - -
Cova units redeemed - - - - - - -
Contract units purchased - - - - - - -
Contract units transferred, net - - - - - - -
Contract units redeemed - - - - - - -
----------- ------------ ----------- ----------- ----------- ------------ -----------
Unit balance at 12/31/98 - - - - - - -
Cova units purchased 10 10 10 10 10 10 10
Cova units redeemed - - - - - - -
Contract units purchased 1,007 - 536 - - - 1,941
Contract units transferred, net - - - - - - -
Contract units redeemed - - - - - - -
----------- ------------ ----------- ----------- ----------- ------------ -----------
Unit balance at 12/31/99 1,017 10 546 10 10 10 1,951
=========== ============ =========== =========== =========== ============ ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
(8) UNIT TRANSACTIONS, CONTINUED
INVESCO PIMCO Scudder
----------- --------------------------------------------------- ------------
VIF High Low StocksPLUS Total
High Yield Duration Growth & Return
Yield Bond Bond Income Bond International
----------- ----------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Accumulation units:
Unit balance at 12/31/97 - - - - - -
Cova units purchased - - - - - -
Cova units redeemed - - - - - -
Contract units purchased - - - - - -
Contract units transferred, net - - - - - -
Contract units redeemed - - - - - -
----------- ----------- ----------- ------------- ----------- ------------
Unit balance at 12/31/98 - - - - - -
Cova units purchased 10 10 10 10 10 10
Cova units redeemed - - - - - -
Contract units purchased 986 - - - 1,515 614
Contract units transferred, net - - - - - -
Contract units redeemed - - - - - -
----------- ----------- ----------- ------------- ----------- ------------
Unit balance at 12/31/99 996 10 10 10 1,525 624
=========== =========== =========== ============= =========== ============
</TABLE>
COVA FINANCIAL LIFE INSURANCE COMPANY
(a wholly owned subsidiary of Cova Financial Services
Life Insurance Company)
Financial Statements
December 31, 1999, 1998, and 1997
(With Independent Auditors' Report Thereon)
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholder
Cova Financial Life Insurance Company:
We have audited the accompanying balance sheets of Cova Financial Life
Insurance Company (a wholly owned subsidiary of Cova Financial Services
Life Insurance Company) (the Company) as of December 31, 1999 and 1998, and
the related statements of income, shareholder's equity, and cash flows for
each of the years in the three-year period ended December 31, 1999. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cova Financial Life
Insurance Company as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for each of the years in the three-year
period ended December 31, 1999, in conformity with generally accepted
accounting principles.
February 4, 2000
<PAGE>
COVA FINANCIAL LIFE INSURANCE COMPANY
(a wholly owned subsidiary of Cova Financial Services Life
Insurance Company)
Balance Sheets
December 31, 1999 and 1998
<TABLE>
<CAPTION>
ASSETS 1999 1998
----------- -----------
(in thousands)
Investments:
<S> <C> <C>
Debt securities available-for-sale, at fair value
(cost of $101,690 in 1999 and $99,228 in 1998) $ 95,568 100,658
Mortgage loans, net of allowance for potential loan
loss of $40 in 1999 and $10 in 1998 5,439 5,245
Policy loans 938 1,223
----------- -----------
Total investments 101,945 107,126
Cash and cash equivalents - interest-bearing 751 5,789
Cash - noninterest-bearing 1,448 1,200
Accrued investment income 1,624 1,641
Deferred policy acquisition costs 15,093 9,142
Present value of future profits 1,740 854
Goodwill 1,631 1,813
Deferred tax asset, net 1,232 585
Receivable from OakRe 18,890 35,312
Federal and state income taxes recoverable 75 --
Reinsurance receivables 9 118
Other assets 24 398
Separate account assets 186,040 127,873
----------- -----------
Total assets $ 330,502 291,851
=========== ===========
</TABLE>
<PAGE>
COVA FINANCIAL LIFE INSURANCE COMPANY
(a wholly owned subsidiary of Cova Financial Services Life Insurance Company)
Balance Sheets, Continued
December 31, 1999 and 1998
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY 1999 1998
----------- -----------
(in thousands)
<S> <C> <C>
Policyholder deposits $ 116,184 135,106
Future policy benefits 6,707 6,191
Payable on purchase of securities 85 27
Accounts payable and other liabilities 1,589 1,653
Federal and state income taxes payable -- 172
Future purchase price payable to OakRe 172 342
Guaranty fund assessments 1,100 1,000
Separate account liabilities 186,035 127,871
----------- -----------
Total liabilities 311,872 272,362
----------- -----------
Shareholder's equity:
Common stock, $233.34 par value, (authorized
30,000 shares; issued and outstanding
12,000 shares in 1999 and 1998) 2,800 2,800
Additional paid-in capital 15,523 14,523
Retained earnings 1,993 1,833
Accumulated other comprehensive (loss) income,
net of tax (1,686) 333
----------- -----------
Total shareholder's equity 18,630 19,489
----------- -----------
Total liabilities and shareholder's equity $ 330,502 291,851
=========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
COVA FINANCIAL LIFE INSURANCE COMPANY
(a wholly owned subsidiary of Cova Financial Services Life Insurance Company)
Statements of Income
Years ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- ---------- -----------
(in thousands)
Revenues:
<S> <C> <C> <C>
Premiums $ 1,041 1,308 1,191
Net investment income 7,663 7,516 6,761
Net realized (losses) gains on sales of
investments (452) 178 158
Separate account fees 2,215 1,392 599
Other income 382 66 45
----------- ---------- -----------
Total revenues 10,849 10,460 8,754
----------- ---------- -----------
Benefits and expenses:
Interest on policyholder deposits 6,064 5,486 4,837
Current and future policy benefits 1,479 1,549 1,481
Operating and other expenses 2,336 1,548 1,134
Amortization of purchased intangible
assets 233 260 234
Amortization of deferred policy
acquisition costs 383 530 320
----------- ---------- -----------
Total benefits and expenses 10,495 9,373 8,006
----------- ---------- -----------
Income before income taxes 354 1,087 748
----------- ---------- -----------
Income tax expense (benefit):
Current (246) (80) 310
Deferred 440 357 (5)
----------- ---------- -----------
Total income tax expense 194 277 305
----------- ---------- -----------
Net income $ 160 810 443
=========== ========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
COVA FINANCIAL LIFE INSURANCE COMPANY
(a wholly owned subsidiary of Cova Financial Services Life Insurance Company)
Statements of Shareholder's Equity
Years ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1999 1998 1997
---------- ----------- ----------
(in thousands)
<S> <C> <C> <C>
Common stock, at beginning
and end of period $ 2,800 2,800 2,800
---------- ----------- ----------
Additional paid-in capital:
Balance at beginning of period 14,523 13,523 13,523
Capital contribution 1,000 1,000 --
---------- ----------- ----------
Balance at end of period 15,523 14,523 13,523
---------- ----------- ----------
Retained earnings:
Balance at beginning of period 1,833 1,023 580
Net income 160 810 443
---------- ----------- ----------
Balance at end of period 1,993 1,833 1,023
---------- ----------- ----------
Accumulated other comprehensive income:
Balance at beginning of period 333 145 1
Change in unrealized (depreciation) appreciation
of debt securities (7,552) 794 630
Deferred federal income tax impact 1,087 (101) (77)
Change in deferred policy acquisition costs
attributable to unrealized depreciation (appreciation) 3,519 (513) (144)
Change in present value of future profits
attributable to unrealized depreciation (appreciation) 927 8 (265)
---------- ----------- ----------
Balance at end of period (1,686) 333 145
---------- ----------- ----------
Total shareholder's equity $ 18,630 19,489 17,491
========== =========== ==========
Total comprehensive income:
Net income $ 160 810 443
Other comprehensive (loss) income (change in net unrealized
(depreciation) appreciation of debt and equity securities) (2,019) 188 144
---------- ----------- ----------
Total comprehensive (loss) income $ (1,859) 998 587
========== =========== ==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
COVA FINANCIAL LIFE INSURANCE COMPANY
(a wholly owned subsidiary of Cova Financial Services Life Insurance Company)
Statements of Cash Flows
Years ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
(in thousands)
<S> <C> <C> <C>
Reconciliation of net income to net cash
provided by (used in) operating activities:
Net income $ 160 810 443
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Increase in future policy benefits 516 810 820
Increase (decrease) in payables and
accrued liabilities 94 126 (815)
Decrease (increase) in accrued
investment income 17 185 (704)
Amortization of intangible assets and
deferred policy acquisition costs 616 790 554
Amortization and accretion of
securities, premiums, and discounts (7) (87) (10)
Decrease (increase) in other assets 374 (384) 30
Net realized loss (gain) on sale of investments 452 (178) (158)
Interest on policyholder deposits 6,064 5,486 4,837
(Decrease) increase in current and
deferred federal income taxes 193 423 101
Decrease in recapture commissions payable to OakRe (170) (223) (159)
Commissions and expenses deferred (2,815) (3,411) (3,917)
Other 499 702 290
----------- ----------- -----------
Net cash provided by operating activities 5,993 5,049 1,312
----------- ----------- -----------
Cash flows from investing activities:
Cash used in the purchase of
investment securities (29,365) (56,673) (53,534)
Proceeds from investment securities
sold and matured 26,689 50,661 25,379
Other (128) (121) (81)
----------- ----------- -----------
Net cash used in investing activities (2,804) (6,133) (28,236)
----------- ----------- -----------
</TABLE>
<PAGE>
COVA FINANCIAL LIFE INSURANCE COMPANY
(a wholly owned subsidiary of Cova Financial Services Life Insurance Company)
Statements of Cash Flows, Continued
Years ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
(in thousands)
<S> <C> <C> <C>
Cash flows from financing activities:
Policyholder deposits $ 55,181 69,459 81,788
Transfers from OakRe 19,050 35,590 25,060
Transfer to separate accounts (36,544) (60,181) (56,144)
Return of policyholder deposits (46,666) (39,943) (28,267)
Capital contributions received 1,000 1,000 --
----------- ----------- -----------
Net cash (used) provided by financing activities (7,979) 5,925 22,437
----------- ----------- -----------
(Decrease) increase in cash and cash equivalents (4,790) 4,841 (4,487)
Cash and cash equivalents - beginning of period 6,989 2,148 6,635
----------- ----------- -----------
Cash and cash equivalents - end of period $ 2,199 6,989 2,148
=========== =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
COVA FINANCIAL LIFE INSURANCE COMPANY
(a wholly owned subsidiary of Cova Financial Services Life
Insurance Company)
Notes to Financial Statements
December 31, 1999, 1998, and 1997
(1) NATURE OF BUSINESS AND ORGANIZATION
NATURE OF THE BUSINESS
Cova Financial Life Insurance Company (the Company) markets and
services single premium deferred annuities, immediate annuities,
variable annuities, term life, single premium variable universal
life, and single premium whole life insurance policies. The
Company is licensed to conduct business in the state of
California. Most of the policies issued present no significant
mortality or longevity risk to the Company, but rather represent
investment deposits by the policyholders. Life insurance policies
provide policy beneficiaries with mortality benefits amounting to
a multiple, which declines with age, of the original premium.
Under the deferred fixed annuity contracts, interest rates
credited to policyholder deposits are guaranteed by the Company
for periods from one to ten years, but in no case may renewal
rates be less than 3%. The Company may assess surrender fees
against amounts withdrawn prior to scheduled rate reset and adjust
account values based on current crediting rates. Policyholders
also may incur certain federal income tax penalties on
withdrawals.
Under the variable annuity contracts, policyholder deposits are
allocated to various separate account sub-accounts or the general
account. A sub-account is valued at the sum of market values of
the securities in its underlying investment portfolio. The
contract value allocated to a sub-account will fluctuate based on
the performance of the sub-accounts. The contract value allocated
to the general account is credited with a fixed interest rate for
a specified period. The Company may assess surrender fees against
amounts withdrawn prior to the end of the withdrawal charge
period. Policyholders may also incur certain federal income tax
penalties on withdrawals.
Under the single premium variable life contracts, policyholder
deposits are allocated to various separate account sub-accounts.
The account value allocated to a sub-account will fluctuate based
on the performance of the sub-accounts. The Company guarantees a
minimum death benefit to be paid to the beneficiaries upon the
death of the insured. The Company may assess surrender fees
against amounts withdrawn prior to the end of the surrender charge
period. A deferred premium tax may also be assessed against
amounts withdrawn in the first ten years. Policyholders may also
incur certain federal income tax penalties on withdrawals.
Under the term life insurance policies, policyholders pay a level
premium over a certain period of time to guarantee a death benefit
will be paid to the beneficiaries upon the death of the insured.
This policy has no cash accumulation available to the
policyholder.
Although the Company markets its products through numerous
distributors, including regional brokerage firms, national
brokerage firms, and banks, approximately 94%, 97%, and 85% of the
Company's sales have been through two specific brokerage firms, A.
G. Edwards & Sons, Incorporated, and Edward Jones & Company,
Incorporated, in 1999, 1998, and 1997, respectively.
<PAGE>
ORGANIZATION
The Company is a wholly owned subsidiary of Cova Financial
Services Life Insurance Company (CFSLIC). CFSLIC is a wholly owned
subsidiary of Cova Corporation, which is a wholly owned subsidiary
of General American Life Insurance Company (GALIC), a Missouri
domiciled life insurance company. GALIC is a wholly owned
subsidiary of GenAmerica Corporation, which in turn is a wholly
owned by the ultimate parent, General American Mutual Holding
Company (GAMHC).
On August 26, 1999, GAMHC entered into a definitive agreement
whereby Metropolitan Life Insurance Company (MetLife), a New York
domiciled life insurance company, will acquire GenAmerica
Corporation and all its holdings for $1.2 billion in cash. The
purchase was approved by the Missouri Director of Insurance on
November 10, 1999. The purchase, however, was not consummated as
of December 31, 1999 and as a result, these financial statements
do not reflect purchase accounting treatment of this transaction.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles (GAAP)
and include the accounts and operations of the Company. The
preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect
the amounts reported. Actual results could differ from these
estimates.
DEBT SECURITIES
Investments in all debt securities with readily determinable
market values are classified into one of three categories:
held-to-maturity, trading, or available-for-sale. Classification
of investments is based on management's current intent. All debt
securities at December 31, 1999 and 1998 were classified as
available-for-sale. Securities available-for-sale are carried at
fair value, with unrealized holding gains and losses reported as
accumulated other comprehensive income in the shareholder's
equity, net of deferred effects of income tax and related effects
on deferred acquisition costs and present value of future profits.
Amortization of the discount or premium from the purchase of
mortgage-backed bonds is recognized using a level-yield method
which considers the estimated timing and amount of prepayments of
the underlying mortgage loans. Actual prepayment experience is
periodically reviewed and effective yields are recalculated when
differences arise between the prepayments previously anticipated
and the actual prepayments received and currently anticipated.
When such a difference occurs, the net investment in the
mortgage-backed bond is adjusted to the amount that would have
existed had the new effective yield been applied since the
acquisition of the bond, with a corresponding charge or credit to
interest income (the "retrospective method").
Investment income is recorded when earned. Realized capital gains
and losses on the sale of investments are determined on the basis
of specific costs of investments and are credited or charged to
income.
A realized loss is recognized and charged against income if the
Company's carrying value in a particular investment in the
available-for-sale category has experienced a significant decline
in market value that is deemed to be other than temporary.
<PAGE>
MORTGAGE LOANS AND POLICY LOANS
Mortgage loans and policy loans are carried at their unpaid
principal balances. An allowance for mortgage loan losses is
established based on an evaluation of the mortgage loan portfolio,
past credit loss experience, and current economic conditions.
Reserves for loans are established when the Company determines
that collection of all amounts due under the contractual terms is
doubtful and are calculated in conformity with Statement of
Financial Accounting Standards (SFAS) No. 114, Accounting by
Creditors for Impairment of a Loan, as amended by SFAS No. 118,
Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures.
The Company had no impaired loans, and the valuation allowance for
potential losses on mortgage loans was $40,000 and $10,000, at
December 31, 1999 and 1998, respectively.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include currency and demand deposits in
banks, U.S. Treasury bills, money market accounts, and commercial
paper with maturities under 90 days, which are not otherwise
restricted.
SEPARATE ACCOUNT ASSETS
Separate accounts contain segregated assets of the Company that
are specifically assigned to variable annuity policyholders in the
separate accounts and are not available to other creditors of the
Company. The earnings of separate account investments are also
assigned to the policyholders in the separate accounts, and are
not guaranteed or supported by the other general investments of
the Company. The Company earns mortality and expense risk fees
from the separate accounts and assesses withdrawal charges in the
event of early withdrawals. Separate accounts assets are valued at
fair market value.
In order to provide for optimum policyholder returns and to allow
for the replication of the investment performance of existing
"cloned" mutual funds, the Company has periodically transferred
capital to the separate accounts to provide for the initial
purchase of investments in new portfolios. As additional funds
have been received through policyholder deposits, the Company has
periodically reduced its capital investment in the separate
accounts. The Company's capital investment in the separate
accounts as of December 31, 1999 and 1998, is presented in note 3.
<PAGE>
DEFERRED POLICY ACQUISITION COSTS
The costs of acquiring new business which vary with and are
directly related to the production of new business, principally
commissions, premium taxes, sales costs, and certain policy
issuance and underwriting costs, are deferred. The Company sets a
limit on the deferral of acquisition costs incurred from internal
marketing and wholesaling operations in any year at 1% to 1.5% of
premiums and deposits receipts, varying according to specific
product. This limit is based on typical market rates of
independent marketing service and wholesaling organizations. This
practice also avoids possible deferral of costs in excess of
amounts recoverable.
The costs deferred are amortized in proportion to estimated future
gross profits derived from investment income, realized gains and
losses on sales of securities, unrealized securities gains and
losses, interest credited to accounts, surrender fees, mortality
costs, and policy maintenance expenses. The estimated gross profit
streams are periodically reevaluated and the unamortized balance
of deferred policy acquisition costs is adjusted to the amount
that would have existed had the actual experience and revised
estimates been known and applied from the inception of the
policies and contracts. The amortization and adjustments resulting
from unrealized gains and losses are not recognized currently in
income but as an offset to the accumulated other comprehensive
income component of shareholder's equity. The amortization period
is the remaining life of the policies, which is estimated to be 20
years from the date of original policy issue.
<TABLE>
<CAPTION>
The components of deferred policy acquisition costs are shown
below:
1999 1998 1997
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Deferred policy acquisition costs, beginning of period
$ 9,142 6,774 3,321
Commissions and expenses deferred 2,815 3,411 3,917
Amortization (383) (530) (320)
Deferred policy acquisition costs attributable to
unrealized depreciation (appreciation) 3,519 (513) (144)
------------ ------------ ------------
Deferred policy acquisition costs, end
of period $ 15,093 9,142 6,774
============ ============ ============
Costs expensed that exceeded the established deferred
limit $ 382 231 6
=========== ============ =============
</TABLE>
PURCHASE RELATED INTANGIBLE ASSETS AND LIABILITIES
In accordance with the purchase method of accounting for business
combinations, two intangible assets and a future payable related
to accrued purchase price consideration were established as of the
date the Company was purchased by GALIC.
<PAGE>
Present Value of Future Profits
The Company established an intangible asset which represents
the present value of future profits (PVFP) to be derived from
both the purchased and transferred blocks of business. Certain
estimates were utilized in the computation of this asset,
including estimates of future policy retention, investment
income, interest credited to policyholders, surrender fees,
mortality costs, and policy maintenance costs, discounted at a
pretax rate of 18% (12% net after tax).
In addition, as the Company has the option of retaining its
single premium deferred annuity (SPDA) policies after they
reach their next interest rate reset date and are recaptured
from OakRe, a component of this asset represents estimates of
future profits on recaptured business. This asset will be
amortized in proportion to estimated future gross profits
derived from investment income, realized gains and losses on
sales of securities, unrealized securities appreciation and
depreciation, interest credited to accounts, surrender fees,
mortality costs, and policy maintenance expenses. The
estimated gross profit streams are periodically reevaluated
and the unamortized balance of PVFP will be adjusted to the
amount that would have existed had the actual experience and
revised estimates been known and applied from the inception.
The amortization and adjustments resulting from unrealized
appreciation and depreciation is not recognized currently in
income but as an offset to the accumulated other comprehensive
income of shareholder's equity. The amortization period is the
remaining life of the policies, which is estimated to be 20
years from the date of original policy issue.
Based on current assumptions, amortization of the original
in-force PVFP asset, expressed as a percentage of the original
in-force asset, is projected to be 5.5%, 4.9%, 4.5%, 4.2%, and
4.2% for the years ended December 31, 2000 through 2004,
respectively. Actual amortization incurred during these years
may be more or less as assumptions are modified to incorporate
actual results. The average crediting rate on the original
in-force PVFP asset is 6.4% for 1999, 1998 and 1997.
<TABLE>
<CAPTION>
The components of PVFP are shown below:
1999 1998 1997
------------ ---------- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
PVFP - beginning of period $ 854 900 1,178
Interest credited 62 66 69
Amortization (103) (120) (82)
PVFP attributable to unrealized
depreciation (appreciation) 927 8 (265)
------------ ---------- ------------
PVFP - end of period $ 1,740 854 900
============ ========== ============
</TABLE>
<PAGE>
Goodwill
Under the push-down method of purchase accounting, the excess
of purchase price over the fair value of tangible and
intangible assets and liabilities acquired is established as
an asset and referred to as goodwill. The Company has elected
to amortize goodwill on the straight-line basis over a 20-year
period.
<TABLE>
<CAPTION>
The components of goodwill are shown below:
1999 1998 1997
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Goodwill - beginning of period $ 1,813 1,923 2,034
Amortization (111) (110) (111)
Experience adjustment to future purchase price
payable to OakRe (71) -- --
------------ ------------ ------------
Goodwill - end of period $ 1,631 1,813 1,923
============ ============ ============
</TABLE>
Future Payable
Pursuant to the financial reinsurance agreement with OakRe,
the receivable from OakRe becomes due in installments when the
SPDA policies reach their next crediting rate reset date. For
any recaptured policies that continue in force with OakRe into
the next rate guarantee period, the Company will pay a
commission to OakRe of 1.75% up to 40% of policy account
values originally reinsured and 3.5% thereafter. On policies
that are recaptured and subsequently exchanged to a variable
annuity policy, the Company will pay a commission to OakRe of
0.50%.
The Company has recorded a future payable that represents the
present value of the anticipated future commission payments
payable to OakRe over the remaining life of the financial
reinsurance agreement discounted at an estimated borrowing
rate of 6.5%. This liability represents a contingent purchase
price payable for the policies transferred to OakRe on the
purchase date and has been pushed down to the Company through
the financial reinsurance agreement. The Company expects that
this payable will be substantially extinguished by the end of
the year 2000.
<PAGE>
<TABLE>
<CAPTION>
The components of this future payable are shown below:
1999 1998 1997
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Future payable - beginning of period $ 342 565 683
Interest added 20 29 41
Payment to Oak Re (119) (252) (159)
Experience adjustment to future purchase price payable
to OakRe (71) -- --
---------- ---------- ----------
Future payable - end of period $ 172 342 565
========== ========== ==========
</TABLE>
DEFERRED TAX ASSETS AND LIABILITIES
Xerox Financial Services, Inc. (XFSI) (previous parent of the
company) and GALIC agreed to file an election to treat the
acquisition of the Company as an asset acquisition under the
provisions of Internal Revenue Code Section 338(h)(10). As a
result of that election, the tax basis of the Company's assets as
of the date of acquisition was revalued based upon fair market
values as of June 1, 1995. The principal effect of the election
was to establish a tax asset on the tax-basis balance sheet of
approximately $2.9 million for the value of the business acquired
that is amortizable for tax purposes over ten to fifteen years.
POLICYHOLDER DEPOSITS
The Company recognizes its liability for policy amounts that are
not subject to policyholder mortality nor longevity risk at the
stated contract value, which is the sum of the original deposit
and accumulated interest, less any withdrawals. The average
weighted interest crediting rate on the Company's policyholder
deposits as of December 31, 1999 was 5.96%.
FUTURE POLICY BENEFITS
Reserves are held for future policy annuity benefits that subject
the Company to risks to make payments contingent upon the
continued survival of an individual or couple (longevity risk).
These reserves are valued at the present value of estimated future
benefits discounted for interest, expenses, and mortality. The
assumed mortality is the 1983 Individual Annuity Mortality Tables
discounted at 4.50% to 8.00%, depending upon year of issue.
Current mortality benefits payable are recorded for reported
claims and estimates of amounts incurred but not reported.
PREMIUM REVENUE
The Company recognizes premium revenue at the time of issue on
annuity policies that subject it to longevity risks. Amounts
collected on annuity policies not subject to longevity risk are
recorded as increases in the policyholder deposits liability. For
term and single premium variable life products, premiums are
recognized as revenue when due.
<PAGE>
OTHER INCOME
Other income consists primarily of policy surrender charges.
FEDERAL INCOME TAXES
Beginning in 1997, the Company files a consolidated income tax
return with its immediate parent, CFSLIC. Allocations of federal
income taxes are based upon separate return calculations.
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial
statement carrying amount of existing assets and liabilities and
their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
COMPREHENSIVE INCOME
The Company reports and presents comprehensive income and its
components in accordance with SFAS No. 130, Reporting
Comprehensive Income. SFAS No. 130 has no impact on the Company's
consolidated net income or shareholder's equity. The Company's
only component of accumulated other comprehensive income relates
to unrealized appreciation and depreciation on debt and equity
securities held as available-for-sale.
RISKS AND UNCERTAINTIES
In preparing the financial statements, management is required to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and
liabilities as of the date of the balance sheet and revenues and
expenses for the period. Actual results could differ significantly
from those estimates.
The following elements of the financial statements are most
affected by the use of estimates and assumptions:
- Investment valuation
- Amortization of deferred policy acquisition costs
- Amortization of present value of future profits
- Recoverability of goodwill
The fair value of the Company's investments is subject to the risk
that interest rates will change and cause a temporary increase or
decrease in the liquidation value of debt securities. To the
extent that fluctuations in interest rates cause the cash flows of
assets and liabilities to change, the Company might have to
liquidate assets prior to their maturity and recognize a gain or
loss. Interest rate exposure for the investment portfolio is
managed through asset/liability management techniques which
attempt to control the risks presented by differences in the
probable cash flows and reinvestment of assets with the timing of
crediting rate changes in the Company's policies and contracts.
Changes in the estimated prepayments of mortgage-backed securities
also may cause retrospective changes in the amortization period of
securities and the related recognition of income.
<PAGE>
The amortization of deferred policy acquisition costs is based on
estimates of long-term future gross profits from existing
policies. These gross profits are dependent upon policy retention
and lapses, the spread between investment earnings and crediting
rates, and the level of maintenance expenses. Changes in
circumstances or estimates may cause retrospective adjustment to
the periodic amortization expense and the carrying value of the
deferred expense.
In a similar manner, the amortization of PVFP is based on
estimates of long-term future profits from existing and recaptured
policies. These gross profits are dependent upon policy retention
and lapses, the spread between investment earnings and crediting
rates, and the level of maintenance expenses. Changes in
circumstances or estimates may cause retrospective adjustment to
the periodic amortization expense and the carrying value of the
asset.
The Company has considered the recoverability of goodwill and has
concluded that no circumstances have occurred which would give
rise to impairment of goodwill at December 31, 1999.
FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS No. 107, Disclosures About Fair Value of Financial
Instruments, applies fair value disclosure practices with regard
to financial instruments, both assets and liabilities, for which
it is practical to estimate fair value. In cases where quoted
market prices are not readily available, fair values are based on
estimates that use present value or other valuation techniques.
These techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash
flows. Although fair value estimates are calculated using
assumptions that management believes are appropriate, changes in
assumptions could cause these estimates to vary materially. In
that regard, the derived fair value estimates cannot be
substantiated by comparison to independent markets and, in many
cases, might not be realized in the immediate settlement of the
instruments. SFAS No. 107 excludes certain financial instruments
and all nonfinancial instruments from its disclosure requirements.
Because of this, and further because a value of a business is also
based upon its anticipated earning power, the aggregate fair value
amounts presented do not represent the underlying value of the
Company.
The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments:
Cash and Cash Equivalents, Short-term Investments,
and Accrued Investment Income
The carrying value amounts reported in the balance sheets for
these instruments approximate their fair values. Short-term
debt securities are considered "available-for-sale" and are
carried at fair value.
<PAGE>
Investments Securities and Mortgage Loans
(Including Mortgage-backed Securities)
Fair values of debt securities are based on quoted market
prices, where available. For debt securities not actively
traded, fair value estimates are obtained from independent
pricing services. In some cases, such as private placements,
certain mortgage-backed securities, and mortgage loans, fair
values are estimated by discounting expected future cash flows
using a current market rate applicable to the yield, credit
quality, and maturity of the investments (see note 3 for fair
value disclosures).
Policy Loans
Fair values of policy loans approximate carrying value as the
interest rates on the majority of policy loans are reset
periodically and therefore approximate current interest rates.
Investment Contracts
The Company's policy contracts require the beneficiaries to
commence receipt of payments by the later of age 85 or 10
years after purchase, and substantially all contracts permit
earlier surrenders, generally subject to fees and adjustments.
Fair values for the Company's liabilities for investment type
contracts (policyholder deposits) are estimated as the amount
payable on demand. As of December 31, 1999 and 1998, the cash
surrender value of policyholder deposits was $4,058,740 and
$4,707,689, respectively, less than their stated carrying
value. Of the contracts permitting surrender, substantially
all provide the option to surrender without fee or adjustment
during the 30 days following reset of guaranteed crediting
rates. The Company has not determined a practical method to
determine the present value of this option.
All of the Company's deposit obligations are fully guaranteed
by its parent GALIC, and the receivable from OakRe equal to
the SPDA obligations is guaranteed by OakRe's parent, XFSI.
REINSURANCE
Effective July 25, 1999, the Company entered into a modified
coinsurance reinsurance agreement with Metropolitan Life Insurance
Company (MetLife). Under the reinsurance agreement, the Company
ceded life insurance and annuity business that was issued or
renewed from July 25, 1999 through December 31, 1999 to MetLife
amounting to $15 million. Net earnings to MetLife from that
business are experience refunded to the Company. The agreement
does not meet the conditions for reinsurance accounting under
GAAP. In substance, the agreement represents a guarantee by
MetLife of new business and renewed SPDA business during this
period. There was no impact on the Company's financial statements
resulting from the reinsurance transaction with MetLife.
On June 1, 1995, when Cova Corporation purchased the Company, then
known as Xerox Financial Life Insurance Company (XFLIC), from
XFSI, a wholly owned subsidiary of Xerox Corporation, it entered
into a financing reinsurance transaction with OakRe Life Insurance
Company (OakRe), then a subsidiary of XFLIC, for OakRe to assume
the economic benefits and risks of the existing SPDA deposits of
XFLIC. Ownership of OakRe was retained by XFSI subsequent to the
sale of XFLIC and other affiliates.
<PAGE>
In substance, terms of the agreement have allowed the seller,
XFSI, to retain substantially all of the existing financial
benefits and risks of the existing business, while the purchaser,
GALIC, obtained the corporate operating and product licenses,
marketing, and administrative capabilities of the Company and
access to the retention of the policyholder deposit base that
persists beyond the next crediting rate reset date.
The financing reinsurance agreement entered into with OakRe as
condition to the purchase of the Company does not meet the
criteria for reinsurance accounting under GAAP. The net assets
initially transferred to OakRe were established as a receivable
and are subsequently increased as interest accrued on the
underlying deposits and decrease as funds are transferred back to
the Company when policies reach their crediting rate reset date or
benefits are claimed. The receivable from OakRe to the Company
that was created by this transaction will be liquidated over the
remaining crediting rate guaranty periods which will be
substantially expired by mid-year 2000, and completely by mid-year
2002. The liquidations transfer cash daily in the amount of the
then current account value, less a recapture commission fee to
OakRe on policies retained beyond their 30-day-no-fee surrender
window by the Company, upon the next crediting rate reset date of
each annuity policy. The Company may then reinvest that cash for
those policies that are retained and thereafter assume the
benefits and risks of those deposits.
In the event that both OakRe and XFSI default on the receivable,
the Company may draw funds from a standby bank irrevocable letter
of credit established by XFSI in the amount of $500 million. No
funds were drawn on this letter of credit since inception of the
agreement.
The impact of reinsurance on the December 31, 1999 financial
statements is not considered material.
RECENTLY ISSUED ACCOUNTING STANDARD
SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, issued in June 1998, requires all derivative financial
instruments to be recorded on the balance sheet at estimated fair
value. The Company's present accounting policies applies such
accounting treatment only to marketable securities as defined
under SFAS No. 115, Accounting for Certain Investments in Debt and
Equity Securities, and to off-balance sheet derivative
instruments. SFAS No. 133 will broaden the definition of
derivative instruments to include all classes of financial assets
and liabilities. It also will require separate disclosure of
identifiable derivative instruments embedded in hybrid securities.
The change in the fair value of derivative instruments is to be
recorded each period either in current earnings or other
comprehensive income, depending on whether a derivative is
designed as part of a hedge transaction and, if it is, on the type
of hedge transaction.
In June 1999, the FASB issued SFAS No. 137, Accounting for
Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of SFAS No. 133. SFAS No. 137 defers for one year
the effective date of Statement of SFAS No 133, Accounting for
Derivative Instruments and Hedging Activities. The Company plans
to adopt the provision of SFAS No. 133 effective January 1, 2001.
At this time the Company does not believe it will have a material
effect on the Company's consolidated financial position or results
of operations.
<PAGE>
OTHER
Certain 1998 and 1997 amounts have been reclassified to conform to
the 1999 presentation.
(3) INVESTMENTS
The Company's investments in debt securities and short-term investments
are considered available-for-sale and carried at estimated fair value,
with the aggregate unrealized appreciation or depreciation being
recorded as a separate component of shareholder's equity. The amortized
cost, estimated fair value, and carrying value of investments at
December 31, 1999 and 1998, are as follows:
<TABLE>
<CAPTION>
1999
-------------------------------------------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR CARRYING
COST GAINS LOSSES VALUE VALUE
--------------- -------------- -------------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Debt securities:
Government agency
obligations $ 1,702 19 -- 1,721 1,721
Corporate securities 76,444 30 (4,756) 71,718 71,718
Mortgage-backed
securities 8,272 1 (202) 8,071 8,071
Asset backed securities 15,272 -- (1,214) 14,058 14,058
--------------- -------------- -------------- -------------- --------------
Total debt securities 101,690 50 (6,172) 95,568 95,568
Mortgage loans (net) 5,439 -- (70) 5,369 5,439
Policy loans 938 -- -- 938 938
--------------- -------------- -------------- -------------- --------------
Total investments $ 108,067 50 (6,242) 101,875 101,945
=============== ============== ============== ============== ==============
Company's beneficial
interest in separate
accounts $ 5 -- -- 5 5
=============== ============== ============== ============== ==============
</TABLE>
<PAGE>
COVA FINANCIAL LIFE INSURANCE COMPANY
(a wholly owned subsidiary of Cova Financial Services Life
Insurance Company)
Notes to Financial Statements
December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1998
-------------------------------------------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR CARRYING
COST GAINS LOSSES VALUE VALUE
--------------- -------------- -------------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Debt securities:
U.S. treasury securities $ 100 1 -- 101 101
Government agency
obligations 3,471 74 -- 3,545 3,545
Corporate securities 70,883 1,384 (406) 71,861 71,861
Mortgage-backed
securities 11,789 87 (32) 11,844 11,844
Asset-backed securities 12,985 349 (27) 13,307 13,307
--------------- -------------- -------------- -------------- --------------
Total debt securities 99,228 1,895 (465) 100,658 100,658
Mortgage loans (net) 5,245 204 -- 5,449 5,245
Policy loans 1,223 -- -- 1,223 1,223
--------------- -------------- -------------- -------------- --------------
Total investments $ 105,696 2,099 (465) 107,330 107,126
=============== ============== ============== ============== ==============
Company's beneficial
interest in separate
accounts $ 2 -- -- 2 2
=============== ============== ============== ============== ==============
</TABLE>
The amortized cost and estimated fair value of debt securities at
December 31, 1999, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or
prepayment penalties. Maturities of mortgage-backed securities will be
substantially shorter than their contractual maturity because they
require monthly principal installments and mortgagees may prepay
principal.
<TABLE>
<CAPTION>
ESTIMATED
AMORTIZED FAIR
COST VALUE
--------------- ---------------
(IN THOUSANDS)
<S> <C> <C>
Less than one year $ 3,573 3,573
Due after one year through five years 33,093 31,752
Due after five years through ten years 39,035 35,583
Due after ten years 17,717 16,589
Mortgage-backed securities 8,272 8,071
--------------- ---------------
Total $ 101,690 95,568
=============== ===============
</TABLE>
<PAGE>
At December 31, 1999, approximately 94.2% of the Company's debt
securities are investment grade or are nonrated but considered to be of
investment grade. Of the 5.8% noninvestment grade debt securities, 5.7%
are rated as BB or its equivalent, and 0.1% are rated B or its
equivalent.
The Company had one impaired debt security, which became nonincome
producing in 1999. The Company had no impaired investments, and all debt
securities were income producing in 1998
<TABLE>
<CAPTION>
The components of investment income, realized gains (losses), and
unrealized appreciation are as follows:
1999 1998 1997
------------ ------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Income on debt securities $ 7,119 6,928 6,575
Income on cash and cash equivalents 185 305 186
Interest on mortgage loans 401 308 32
Income on policy loans 82 92 83
Miscellaneous interest 1 2 --
------------ ------------- ------------
Total investment income 7,788 7,635 6,876
Investment expenses (125) (119) (115)
------------ ------------- ------------
Net investment income $ 7,663 7,516 6,761
============ ============= ============
Net realized capital (losses) gains -
debt securities $ (452) 178 158
============ ============= ============
Unrealized (depreciation) appreciation is as follows:
Debt securities $ (6,122) 1,430 633
Short-term investments -- -- 3
Effects on deferred acquisition
costs amortization 2,793 (726) (213)
Effects on PVFP amortization 735 (192) (200)
------------ ------------- ------------
Unrealized (depreciation) appreciation
before income tax (2,594) 512 223
Unrealized income tax benefit (expense) 908 (179) (78)
------------ ------------- ------------
Net unrealized appreciation (depreciation) on
investments $ (1,686) 333 145
============ ============= ============
</TABLE>
<PAGE>
Proceeds from sales, redemptions, and paydowns of investments in debt
securities during 1999 were $25,986,787. Gross gains of $165,919 and
gross losses of $618,025 were realized on those sales. Included in these
amounts were $25,816 of gross gains and $19,890 of gross losses realized
on the sale of noninvestment grade securities. Net realized losses
include a 1999 impairment adjustment totaling approximately $493,244
related to one debt security held by the Company.
Proceeds from sales, redemptions, and paydowns of investments in debt
securities during 1998 were $50,660,583. Gross gains of $591,755 and
gross losses of $413,588 were realized on those sales. Included in these
amounts were $133,138 of gross gains and $106,165 of gross losses
realized on the sale of noninvestment grade securities.
Proceeds from sales, redemptions, and paydowns for investments in debt
securities during 1997 were $25,379,783. Gross gains of $166,335 and
gross losses of $8,658 were realized on those sales. Included in these
amounts were $47,391 of gross gains and $7,300 of gross losses realized
on the sale of noninvestment grade securities.
(4) SECURITY GREATER THAN 10% OF SHAREHOLDER'S EQUITY
As of December 31, 1999 and 1998, the Company held the following
individual mortgage loan which exceeded 10% of shareholder's equity:
<TABLE>
1999 1998
--------------- ---------------
<S> <C> <C>
Colonial Realty, at carrying value $ 1,998,296 1,997,287
=============== ===============
</TABLE>
<PAGE>
(5) COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
The components of comprehensive income are as follows:
1999 1998 1997
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net income $ 160 810 443
------------ ------------ ------------
Other comprehensive income (loss), before tax -
Unrealized appreciation (depreciation) on
Investments arising during period:
Unrealized (depreciation) appreciation
on investments (7,100) 616 472
Adjustment to deferred acquisition
costs attributable to unrealized
depreciation (appreciation) 3,308 (398) (108)
Adjustment to PVFP attributable to
unrealized depreciation (appreciation) 872 6 (198)
------------ ------------ ------------
Total unrealized (depreciation) appreciation on
investments arising during period (2,920) 224 166
------------ ------------ ------------
Less reclassification adjustments for realized losses (gains) included
in net income:
Adjustment for losses (gains) included in
net realized (losses) gains on sales
of investments 452 (178) (158)
Adjustment for (gains) losses included in
amortization of deferred acquisition costs (211) 115 36
Adjustment for (gains) losses included in
amortization of PVFP (55) (2) 67
------------ ------------ ------------
Total reclassification adjustments for losses (gains)
included in net income 186 (65) (55)
------------ ------------ ------------
Other comprehensive (loss) income, before related income tax
(benefits) expense (3,106) 289 221
Related income tax (benefit) expense (1,087) 101 77
------------ ------------ ------------
Other comprehensive (loss) income, net of tax (2,019) 188 144
------------ ------------ ------------
Comprehensive (loss) income $ (1,859) 998 587
============ ============ ============
</TABLE>
<PAGE>
(6) POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS
The Company has no direct employees and no retired employees. All
personnel used to support the operations of the Company are supplied by
contract by Cova Life Management Company (CLMC), a wholly owned
subsidiary of Cova Corporation. The Company is allocated a portion of
certain health care and life insurance benefits for future retired
employees of CLMC. In 1999, 1998, and 1997, the Company was allocated a
portion of benefit costs including severance pay, accumulated vacations,
and disability benefits. At December 31, 1999, CLMC had no retired
employees nor any employees fully eligible for retirement, and had no
disbursements for such benefit commitments. The expense arising from
these allocations is not material.
(7) INCOME TAXES
<TABLE>
<CAPTION>
The Company will file a consolidated federal income tax return with its
immediate parent, CFSLIC. Income taxes are recorded in the statements of
earnings and directly in certain shareholder's equity accounts. Income
tax expense for the years ended December 31 was allocated as follows:
1999 1998 1997
---------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Statements of income:
Operating income (excluding realized investment gains) $ 179 215 250
Realized investment gains 15 62 55
----------- --------- ---------
Income tax expense included in the statements of
income 194 277 305
Shareholder's equity - change in deferred federal income taxes
related to unrealized (depreciation) appreciation on securities (1,087) 101 77
----------- --------- ---------
Total income tax (benefit) expense $ (893) 378 382
=========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
The actual federal income tax expense differed from the expected tax
expense computed by applying the U.S. federal statutory rate to income
before taxes on income as follows:
1999 1998 1997
-------------------- -------------------- --------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Computed expected tax expense $ 124 35.0% $ 380 35.0% $ 262 35.0%
Dividends received deduction - separate
account (115) (32.5) (150) (13.9) -- --
Amortization of intangible assets 39 11.0 39 3.6 39 5.2
Valuation allowance for permanent
impairments 173 48.9 -- -- -- --
Other (27) (7.6) 8 0.8 4 0.5
-------- ---------- -------- ---------- -------- ----------
Total $ 194 54.8% $ 277 25.5% $ 305 40.7%
======== ========== ======== ========== ======== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The tax effect of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1999 and 1998 are as follows:
1999 1998
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Tax basis of intangible assets purchased $ 569 624
Liability for commission on recaptures 60 120
Policy reserves 2,678 2,477
DAC "Proxy Tax" 1,383 1,252
Permanent impairments 173 --
Unrealized depreciation in investments 908 --
Other deferred tax assets 165 (359)
------------ ------------
Total deferred tax assets 5,936 4,114
Valuation allowance (173) --
------------ ------------
Total deferred tax assets, net of valuation allowance 5,763 4,114
------------ ------------
Deferred tax liabilities:
Unrealized appreciation in investments -- 179
PVFP 226 150
Deferred acquisition costs 4,305 3,200
------------ ------------
Total deferred tax liabilities 4,531 3,529
------------ ------------
Net deferred tax asset $ 1,232 585
============ ============
</TABLE>
A valuation allowance is provided when it is more likely than not that
some portion of the deferred tax assets will not be realized. As of
December 31, 1999, the Company has provided a 100% valuation allowance
against the deferred tax asset related to the permanent impairments.
<PAGE>
(8) RELATED-PARTY TRANSACTIONS
On December 31, 1997, Cova Life Management Company (CLMC) and Navisys
Incorporated (Navisys), both affiliated companies, purchased certain
assets of Johnson & Higgins/Kirke Van Orsdel, Inc. (J&H/KVI), an
unaffiliated Delaware corporation, for $2,500,000, and merged them into
Cova Life Administrative Service Company (CLASC), a joint subsidiary of
CLMC and Navisys. Navisys purchased 51% of CLASC, and the remaining 49%
was purchased by CLMC. The purchased assets are the administrative and
service systems and organization that provide the policy service
functions for the Company's life and annuity products. On October 31,
1999, CLMC purchased the remaining 51% interest in CLASC from Navisys
for $1,184,414.
The Company has entered into management, operations, and servicing
agreements with its affiliated companies. The affiliated companies are
CLMC, a Delaware corporation, which provides management services and the
employees necessary to conduct the activities of the Company; Conning
Asset Management, which provides investment advice; and CLASC, which
provides underwriting, policy issuance, claims, and other policy
administration functions. Additionally, a portion of overhead and other
corporate expenses is allocated by the Company's parent, GALIC. Expenses
and fees paid to affiliated companies in 1999, 1998, and 1997 by the
Company were $2,496,782, $1,587,833, and $396,806, respectively.
(9) STATUTORY SURPLUS AND DIVIDEND RESTRICTION
GAAP differs in certain respects from accounting practices prescribed or
permitted by insurance regulatory authorities (statutory accounting
principles).
The major differences arise principally from the immediate expense
recognition of policy acquisition costs and intangible assets for
statutory reporting, determination of policy reserves based on different
discount rates and methods, the recognition of deferred taxes under GAAP
reporting, the nonrecognition of financial reinsurance for GAAP
reporting, and the establishment of an asset valuation reserve as a
contingent liability based on the credit quality of the Company's
investment securities and an interest maintenance reserve as an unearned
liability to defer the realized gains and losses of fixed income
investments presumably resulting from changes to interest rates and
amortize them into income over the remaining life of the investment sold
under statutory accounting principles. In addition, adjustments to
record the carrying values of debt securities and certain equity
securities at estimated fair value are applied only under GAAP reporting
and capital contributions in the form of notes receivable from an
affiliated company are not recognized under GAAP reporting.
Purchase accounting creates another difference as it requires the
restatement of GAAP assets and liabilities to their established fair
values at the date of purchase, and shareholder's equity to the net
purchase price.
Statutory accounting does not recognize the purchase method of
accounting.
<PAGE>
<TABLE>
<CAPTION>
As of December 31, the differences between statutory capital and surplus
and shareholder's equity determined in conformity with GAAP were as
follows:
1999 1998
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Statutory capital and surplus $ 9,826 10,411
Reconciling items:
Statutory asset valuation reserve 827 1,078
Statutory interest maintenance reserve 187 190
GAAP investment adjustments to fair value (6,122) 1,430
GAAP deferred policy acquisition costs 15,093 9,142
GAAP basis policy reserves (4,480) (4,670)
GAAP deferred federal income taxes (net) 1,232 585
GAAP guarantee assessment adjustment (1,100) (1,000)
GAAP goodwill 1,631 1,813
GAAP present value of future profits 1,740 854
GAAP future purchase price payable (172) (342)
GAAP investment valuation reserves (40) (10)
Other 8 8
------------ ------------
GAAP shareholder's equity $ 18,630 19,489
============ ============
</TABLE>
Statutory net loss for the years ended December 31, 1999, 1998,
and 1997 was $1,478,513, $142,046, and $461,118, respectively.
The maximum amount of dividends which can be paid by State of California
insurance companies to shareholders without prior approval of the
insurance commissioner is the greater of 10% of statutory surplus or
statutory net gain from operations for the preceding year. The maximum
dividend permissible during 2000 will be $702,615, which is 10% of the
Company's December 31, 1999 statutory surplus of $7,026,153.
The National Association of Insurance Commissioners has developed
certain risk based capital (RBC) requirements for life insurers. If
prescribed levels of RBC are not maintained, certain actions may be
required on the part of the Company or its regulators. At December 31,
1999, the Company's Total Adjusted Capital and Authorized Control Level
RBC were $10,653,128 and $1,705,480, respectively. This level of
adjusted capital qualifies under all tests.
(10) GUARANTY FUND ASSESSMENTS
The Company participates with life insurance companies licensed in
California in an association formed to guaranty benefits to
policyholders of insolvent life insurance companies. Under state law, as
a condition for maintaining the Company's authority to issue new
business, the Company is contingently liable for its share of claims
covered by the guaranty association for insolvencies incurred through
1999, but for which assessments have not yet been determined or
assessed, to a maximum generally of 1% of statutory premiums per annum.
In November 1999, the National Organization of Life and Health Guaranty
Associations distributed a study of the major outstanding industry
insolvencies, with estimates of future assessments by state. Based on
this study, the Company has accrued a liability for $1.1 million in
future assessments on insolvencies that occurred before December 31,
1999. Under the coinsurance agreement between the Company and OakRe (see
note 1), OakRe is required to reimburse the Company for any future
assessments that it pays which relate to insolvencies occurring prior to
June 1, 1995. The Company paid $8,000, $33,505, and $460,167 in guaranty
fund assessment in 1999, 1998, and 1997, respectively. These payments
were substantially reimbursed by OakRe.
At the same time, the Company is liable to OakRe for 80% of any future
premium tax recoveries that are realized from any such assessments and
may retain the remaining 20%. The credits to be retained were not
material.
(11) SUBSEQUENT EVENT
The purchase of GenAmerica Corporation and subsidiary, including the
Company, by MetLife was completed on January 6, 2000. On that date also,
the Company's modified coinsurance agreement with MetLife was suspended
for subsequent new business.
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
a. FINANCIAL STATEMENTS
The following financial statements of the Separate Account are included in Part
B hereof:
1. Independent Auditors' Report.
2. Statement of Assets and Liabilities as of December 31, 1999.
3. Statement of Operations for the year ended December 31, 1999.
4. Statements of Changes in Net Assets for the years ended December 31,
1999 and 1998.
5. Notes to Financial Statements - December 31, 1999 and 1998.
The following financial statements of the Company are included in Part B hereof:
1. Independent Auditors' Report.
2. Balance Sheets as of December 31, 1999 and 1998.
3. Statements of Income for the years ended December 31, 1999, 1998, and
1997.
4. Statements of Shareholder's Equity for the Years Ended December 31,
1999, 1998, and 1997.
5. Statements of Cash Flows for the Years Ended December 31, 1999, 1998,
and 1997.
6. Notes to Financial Statements - December 31, 1999, 1998, and 1997.
b. EXHIBITS
1. Resolution of Board of Directors of the Company authorizing the
establishment of the Variable Account+++
2. Not Applicable
3. Principal Underwriter's Agreement+
4. (i) Individual Flexible Purchase Payment Deferred Variable and Fixed
Annuity Contract****
(ii) Endorsement**
(iii) Death Benefit Endorsements****
(iv) Charitable Remainder Trust Endorsement****
5. Application for Variable Annuity*
6. (i) Copy of Articles of Incorporation of the Company+
(ii) Copy of the Bylaws of the Company+
7. Not Applicable
8.(i)Participation Agreement among Variable Insurance Products Fund,
Fidelity Distributors Corporation and Cova Financial Life Insurance
Company++++
(ii) Participation Agreement among Variable Insurance Products Fund
II, Fidelity Distributors Corporation and Cova Financial Life
Insurance Company++++
(iii)Participation Agreement among Variable Insurance Products Fund
III, Fidelity Distributors Corporation and Cova Financial Life
Insurance Company++++
(iv) Form of Fund Participation Agreement among MFS Variable Insurance
Trust, Cova Financial Life Insurance Company and Massachusetts
Financial Services Company+
(v) Form of Fund Participation Agreement by and among AIM Variable
Insurance Funds, Inc., A I M Distributors, Inc., Cova Financial
Life Insurance Company, on behalf of itself and its Separate
Accounts, and Cova Life Sales Company++
(vi) Form of Participation Agreement among Templeton Variable Products
Series Fund, Franklin Templeton Distributors, Inc. and Cova
Financial Life Insurance Company****
(vii)Form of Fund Participation Agreement among Cova Financial Life
Insurance Company, Cova Life Sales Company, Alliance Capital
Management LP and Alliance Fund Distributors, Inc.+
(viii)Form of Fund Participation Agreement among Oppenheimer Variable
Account Funds, OppenheimerFunds, Inc. and Cova Financial Life
Insurance Company++
(ix) Form of Fund Participation Agreement among Putnam Variable Trust,
Putnam Mutual Funds Corp. and Cova Financial Life Insurance
Company++
(x) Form of Fund Participation Agreement among Investors Fund Series,
Zurich Kemper Investments, Inc., Zurich Kemper Distributors, Inc.
and Cova Financial Life Insurance Company++
(xi) Form of Participation Agreement by and between Goldman Sachs
Variable Insurance Trust, Goldman, Sachs & Co. and Cova Financial
Life Insurance Company++
(xii)Form of Participation Agreement among Liberty Variable
Investment Trust, Liberty Financial Investments, Inc. and Cova
Financial Life Insurance Company++
9. Opinion and Consent of Counsel
10. Consent of Independent Auditors
11. Not Applicable
12. Not Applicable
13. Calculation of Performance Information
14. Company Organizational Chart
27. Not Applicable
* incorporated by reference to Xerox Variable Annuity Account Five, Form
N-4 (File No. 33-50174) as filed on July 29, 1992.
** incorporated by reference to Registrant's Pre-Effective Amendment No.
1 to Form N-4 (File No. 33-50174) as filed on July 16, 1993.
+ incorporated by reference to Pre-Effective Amendment No. 1 to Form N-4
(File No. 333-34817) as filed electronically on November 19, 1997.
++ incorporated by reference to Post-Effective Amendment No. 1 to Form
N-4 (File No. 333-34817) as filed electronically on February 11, 1998.
+++ incorporated by reference to Cova Variable Life Account Five, Initial
Registration Statement on Form S-6 (File No. 333-37559) as filed
electronically on October 9, 1997.
++++ incorporated by reference to Post-Effective Amendment No. 6 to Form
N-4 (File No. 33-50174) as filed electronically on April 29, 1998.
**** incorporated by reference to Post-Effective Amendment No. 9 (File Nos.
33-50174 and 811-7060) as filed electronically on April 29, 1999.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR.
The following are the Officers and Directors who are engaged directly or
indirectly in activities relating to the Registrant or the variable annuity
contracts offered by the Registrant and the executive officers of the Company:
Name and Principal Positions and Offices
Business Address with Depositor
- -------------------------------- --------------------------------
Richard A. Liddy Chairman of the Board and Director
700 Market Street
St. Louis, MO 63101
Lorry J. Stensrud President and Director
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
Mark E. Reynolds Executive Vice President and Director
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
John W. Barber Director
13045 Tesson Ferry Rd.
St. Louis, MO 63128
William P. Boscow Vice President
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
Constance A. Doern Vice President
1776 West Lakes Parkway
West Des Moines, IA 50266
Patricia E. Gubbe Vice President
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
Philip A. Haley Executive Vice President
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
J. Robert Hopson Vice President,
One Tower Lane, Suite 3000 Chief Actuary and Director
Oakbrook Terrace, IL 60181-4644
E. Thomas Hughes, Jr. Treasurer and Director
700 Market Street
St. Louis, MO 63101
Douglas E. Jacobs Vice President
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
Lisa O. Kirchner Vice President
1776 West Lakes Parkway
West Des Moines, IA 50266
James W. Koeger Assistant Treasurer
700 Market Street
St. Louis, MO 63101
William C. Mair Vice President and Director
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
Matthew P. McCauley Assistant Secretary and Director
700 Market Street
St. Louis, MO 63101
John J. Myers Vice President
One Tower Lane,
Suite 3000
Oakbrook Terrace, IL 60181-4644
Myron H. Sandberg Vice President
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
John W. Schaus Vice President
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
Bernard J. Spaulding Senior Vice President, General Counsel
One Tower Lane, Suite 3000 and Secretary
Oakbrook Terrace, IL 60181-4644
Joann T. Tanaka Senior Vice President and Director
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
Patricia M. Wersching Assistant Treasurer
700 Market Street
St. Louis, MO 63101
Peter L. Witkewiz Vice President and Controller
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR
OR REGISTRANT.
A company organizational chart is filed as Exhibit 14 herein.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of April 12, 2000 there were 570 Qualified Contract Owners and 2,074
Non-Qualified Contract Owners.
ITEM 28. INDEMNIFICATION.
The Bylaws of the Company (Article V, Section 9) provide that:
This corporation shall indemnify, to the fullest extent allowed by California
law, its present and former directors and officers against expenses, judgments,
fines, settlements, and other amounts incurred in connection with any proceeding
or threatened proceeding brought against such directors or officers in their
capacity as such. Such indemnification shall be made in accordance with
procedures set forth by California law. Sums for expenses incurred in defending
any such proceeding may also be advanced to any such director or officer to the
extent and under the conditions provided by California law.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted directors and officers or controlling persons of the
Company pursuant to the foregoing, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) Cova Life Sales Company is the principal underwriter for the following
investment companies (other than Registrant):
Cova Variable Annuity Account One
Cova Variable Life Account One
Cova Variable Life Account Five
First Cova Variable Annuity Account One
Cova Variable Annuity Account Four
General American Separate Account Twenty-Eight
General American Separate Account Twenty-Nine
Security Equity Separate Account 26
Security Equity Separate Account 27
(b) Cova Life Sales Company is the principal underwriter for the Contracts. The
following persons are the officers and directors of Cova Life Sales Company. The
principal business address for each officer and director of Cova Life Sales
Company is One Tower Lane, Suite 3000, Oakbrook Terrace, Illinois 60181-4644.
Name and Principal Positions and Offices
Business Address with Underwriter
- ----------------------- ---------------------------
Lorry J. Stensrud Director
Patricia E. Gubbe President, Chief Compliance Officer
and Director
William C. Mair Director
Philip A. Haley Vice President
Shari Ruecker Vice President
Mark E. Reynolds Treasurer
James W. Koeger Assistant Treasurer
Bernard J. Spaulding Secretary
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
William Flory, whose address is One Tower Lane, Suite 3000, Oakbrook Terrace,
Illinois 60181-4644 and Cova Life Administration Services Company, 4700 Westown
Parkway, Bldg. 4, Suite 200, West Des Moines, IA 50266 maintain physical
possession of the accounts, books or documents of the Variable Account
required to be maintained by Section 31(a) of the Investment Company Act of
1940 and the rules promulgated thereunder.
ITEM 31. MANAGEMENT SERVICES.
Not Applicable.
ITEM 32. UNDERTAKINGS.
a. Registrant hereby undertakes to file a post-effective amendment to this
registration statement as frequently as is necessary to ensure that the audited
financial statements in the registration statement are never more than sixteen
(16) months old for so long as payment under the variable annuity contracts may
be accepted.
b. Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
postcard or similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information.
c. Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statement required to be made available under this
Form promptly upon written or oral request.
d. Cova Financial Life Insurance Company ("Company") hereby represents that
the fees and charges deducted under the Contracts described in the Prospectus,
in the aggregate, are reasonable in relation to the services rendered, the
expenses to be incurred and the risks assumed by the Company.
REPRESENTATIONS
The Company hereby represents that it is relying upon a No Action Letter
issued to the American Council of Life Insurance dated November 28, 1988
(Commission ref. IP-6-88) and that the following provisions have been complied
with:
1. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in each registration statement, including the
prospectus, used in connection with the offer of the contract;
2. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in any sales literature used in connection with
the offer of the contract;
3. Instruct sales representatives who solicit participants to purchase the
contract specifically to bring the redemption restrictions imposed by Section
403(b)(11) to the attention of the potential participants;
4. Obtain from each plan participant who purchases a Section 403(b) annuity
contract, prior to or at the time of such purchase, a signed statement
acknowledging the participant's understanding of (1) the restrictions on
redemption imposed by Section 403(b)(11), and (2) other investment alternatives
available under the employer's Section 403(b) arrangement to which the
participant may elect to transfer his contract value.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this Registration Statement and has caused this
Registration Statement to be signed on its behalf, in the City of Oakbrook
Terrace, and State of Illinois on this 28th day of April, 2000.
COVA VARIABLE ANNUITY ACCOUNT FIVE
(Registrant)
By: COVA FINANCIAL LIFE INSURANCE COMPANY
By: /s/BERNARD J. SPAULDING
_________________________________________
Senior Vice President, General Counsel
and Secretary
COVA FINANCIAL LIFE INSURANCE COMPANY
Depositor
By : /s/BERNARD J. SPAULDING
________________________________________
Senior Vice President, General Counsel
and Secretary
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the dates indicated.
Chairman of the Board and
- ---------------------- Director --------
Richard A. Liddy Date
/s/LORRY J. STENSRUD President and Director 4-28-00
- ---------------------- --------
Lorry J. Stensrud Date
/s/J. ROBERT HOPSON Director 4-28-00
- ---------------------- --------
J. Robert Hopson Date
William C. Mair* Director 4-28-00
- ---------------------- --------
William C. Mair Date
E. Thomas Hughes, Jr.* Treasurer and Director 4-28-00
- ---------------------- --------
E. Thomas Hughes, Jr. Date
Matthew P. McCauley* Director 4-28-00
- ---------------------- --------
Matthew P. McCauley Date
John W. Barber* Director 4-28-00
- ---------------------- --------
John W. Barber Date
/s/MARK E. REYNOLDS 4-28-00
- --------------------- Director --------
Mark E. Reynolds Date
/s/J. TERRI TANAKA 4-28-00
- --------------------- Director --------
J. Terri Tanaka Date
/s/PETER L. WITKEWIZ 4-28-00
- --------------------- Controller --------
Peter L. Witkewiz Date
*By: /s/LORRY J. STENSRUD
____________________________________
Lorry J. Stensrud, Attorney-in-Fact
INDEX TO EXHIBITS
EX-99.B9 Opinion and Consent of Counsel
EX-99.B10 Consent of Independent Auditors
EX-99.B13 Calculation of Performance Information
EX-99.B14 Company Organizational Chart
Blazzard, Grodd & Hasenauer, P.C.
943 Post Road East
Westport, CT 06880
(203) 226-7866
April 28, 2000
Board of Directors
Cova Financial Life Insurance Company
4100 Newport Place Drive, Suite 840
Newport Beach, CA 92600
Re: Opinion of Counsel - Cova Variable Annuity Account Five
Gentlemen:
You have requested our Opinion of Counsel in connection with the filing with the
Securities and Exchange Commission of a Post-Effective Amendment to a
Registration Statement on Form N-4 for the Individual Flexible Purchase Payment
Deferred Variable Annuity Contracts (the "Contracts") to be issued by Cova
Financial Life Insurance Company and its separate account, Cova Variable Annuity
Account Five.
We have made such examination of the law and have examined such records and
documents as in our judgment are necessary or appropriate to enable us to render
the opinions expressed below.
We are of the following opinions:
1. Cova Variable Annuity Account Five is a Unit Investment Trust as that term
is defined in Section 4(2) of the Investment Company Act of 1940 (the
"Act"), and is currently registered with the Securities and Exchange
Commission, pursuant to Section 8(a) of the Act.
2. Upon the acceptance of purchase payments made by an Owner pursuant to a
Contract issued in accordance with the Prospectus contained in the
Registration Statement and upon compliance with applicable law, such an
Owner will have a legally-issued, fully paid, non-assessable contractual
interest under such Contract.
You may use this opinion letter, or a copy thereof, as an exhibit to the
Registration Statement.
We consent to the reference to our Firm under the caption "Legal Opinions"
contained in the Statement of Additional Information which forms a part of the
Registration Statement.
Sincerely,
BLAZZARD, GRODD & HASENAUER, P.C.
By: /s/RAYMOND A. O'HARA III
---------------------------
Raymond A. O'Hara III
Consent of Independent Auditors
The Board of Directors
Cova Financial Life Insurance Company
We consent to the use of our reports on the financial statements of Cova
Financial Life Insurance Company (the Company) dated February 4, 2000, and on
the financial statements of the sub-accounts of Cova Variable Annuity Account
Five dated March 20, 2000, and to the reference to our firm under the heading
"Experts" in the Statement of Additional Information, in the Post-Effective
Amendment No. 10 to the Registration Statement (Form N-4, File No. 33-50174) of
Cova Variable Annuity Account Five.
/S/ KPMG LLP
--------------
KPMG LLP
Chicago, Illinois
April 28, 2000
<TABLE>
<CAPTION>
Cova Variable Annuity Account Five
Standard 1 Year Return Data
As of 12/31/99
Sub-Account Transaction Amount Unit Unit Balance Transaction Unit
Value Before Units Balance
Transaction After
Transaction
6 Cova Lord Abbett G&I
<S> <C> <C> <C> <C> <C>
12/31/1998 purchase 1,000.00 - - #DIV/0! #DIV/0!
12/31/1999 annual fee #DIV/0! 39.456973 #DIV/0! #DIV/0! #DIV/0!
12/31/1999 surrender fee (45.00) 39.456973 #DIV/0! (1.1405) #DIV/0!
8 Cova Bond Debenture
12/31/1998 purchase 1,000.00 13.496510 - 74.0932 74.0932
12/31/1999 annual fee (1.02) 13.765395 74.0932 (0.0741) 74.0191
12/31/1999 surrender fee (45.00) 13.765395 74.0191 (3.2691) 70.7500
9 GACC Money Market
12/31/1998 purchase 1,000.00 11.109949 - 90.0094 90.0094
12/31/1999 annual fee (1.04) 11.525403 90.0094 (0.0902) 89.9192
12/31/1999 surrender fee (45.00) 11.525403 89.9192 (3.9044) 86.0148
11 Cova Developing Growth
12/31/1998 purchase 1,000.00 11.067868 - 90.3516 90.3516
12/31/1999 annual fee (1.31) 14.452893 90.3516 (0.0906) 90.2610
12/31/1999 surrender fee (45.00) 14.452893 90.2610 (3.1136) 87.1474
12 Cova Large Cap Research
12/31/1998 purchase 1,000.00 11.825638 - 84.5620 84.5620
12/31/1999 annual fee (1.24) 14.635794 84.5620 (0.0847) 84.4773
12/31/1999 surrender fee (45.00) 14.635794 84.4773 (3.0747) 81.4026
13 Cova Mid-Cap Value
12/31/1998 purchase 1,000.00 10.437956 - 95.8042 95.8042
12/31/1999 annual fee (1.04) 10.875543 95.8042 (0.0956) 95.7086
12/31/1999 surrender fee (45.00) 10.875543 95.7086 (4.1377) 91.5709
15 Cova Quality Bond
12/31/1998 purchase 1,000.00 11.914509 - 83.9313 83.9313
12/31/1999 annual fee (0.97) 11.567172 83.9313 (0.0839) 83.8474
12/31/1999 surrender fee (45.00) 11.567172 83.8474 (3.8903) 79.9571
16 Cova Small Cap Stock
12/31/1998 purchase 1,000.00 12.582885 - 79.4730 79.4730
12/31/1999 annual fee (1.43) 17.932499 79.4730 (0.0797) 79.3933
12/31/1999 surrender fee (45.00) 17.932499 79.3933 (2.5094) 76.8839
17 Cova Large Cap Stock
12/31/1998 purchase 1,000.00 19.428505 - 51.4708 51.4708
12/31/1999 annual fee (1.16) 22.548971 51.4708 (0.0514) 51.4194
12/31/1999 surrender fee (45.00) 22.548971 51.4194 (1.9957) 49.4237
18 Cova Select Equity
12/31/1998 purchase 1,000.00 16.987203 - 58.8678 58.8678
12/31/1999 annual fee (1.08) 18.384684 58.8678 (0.0587) 58.8091
12/31/1999 surrender fee (45.00) 18.384684 58.8091 (2.4477) 56.3614
19 Cova Int'l Equity
12/31/1998 purchase 1,000.00 12.889314 - 77.5836 77.5836
12/31/1999 annual fee (1.27) 16.333932 77.5836 (0.0778) 77.5058
12/31/1999 surrender fee (45.00) 16.333932 77.5058 (2.7550) 74.7508
24 Russell Multi-Style Equity
12/31/1998 purchase 1,000.00 12.740123 - 78.4922 78.4922
12/31/1999 annual fee (1.16) 14.719616 78.4922 (0.0788) 78.4134
12/31/1999 surrender fee (45.00) 14.719616 78.4134 (3.0571) 75.3563
25 Russell Aggressive Equity
12/31/1998 purchase 1,000.00 10.001283 - 99.9872 99.9872
12/31/1999 annual fee (1.05) 10.461908 99.9872 (0.1004) 99.8868
12/31/1999 surrender fee (45.00) 10.461908 99.8868 (4.3013) 95.5855
26 Russell Non-U.S.
12/31/1998 purchase 1,000.00 11.182808 - 89.4230 89.4230
12/31/1999 annual fee (1.32) 14.706241 89.4230 (0.0898) 89.3332
12/31/1999 surrender fee (45.00) 14.706241 89.3332 (3.0599) 86.2733
27 Russell Core Bond
12/31/1998 purchase 1,000.00 10.631124 - 94.0634 94.0634
12/31/1999 annual fee (0.98) 10.419502 94.0634 (0.0941) 93.9693
12/31/1999 surrender fee (45.00) 10.419502 93.9693 (4.3188) 89.6505
28 Russell Real Estate Securities
12/31/1998 purchase 1,000.00 - - #DIV/0! #DIV/0!
12/31/1999 annual fee #DIV/0! 9.395293 #DIV/0! #DIV/0! #DIV/0!
12/31/1999 surrender fee (45.00) 9.395293 #DIV/0! (4.7896) #DIV/0!
30 AIM V.I. Value
12/31/1998 purchase 1,000.00 13.075597 - 76.4783 76.4783
12/31/1999 annual fee (1.28) 16.748633 76.4783 (0.0764) 76.4019
12/31/1999 surrender fee (45.00) 16.748633 76.4019 (2.6868) 73.7151
31 AIM V.I. Capital Appreciation
12/31/1998 purchase 1,000.00 11.800084 - 84.7452 84.7452
12/31/1999 annual fee (1.43) 16.827440 84.7452 (0.0850) 84.6602
12/31/1999 surrender fee (45.00) 16.827440 84.6602 (2.6742) 81.9860
32 AIM V.I. Int'l Equity
12/31/1998 purchase 1,000.00 11.418467 - 87.5774 87.5774
12/31/1999 annual fee (1.53) 17.458837 87.5774 (0.0876) 87.4898
12/31/1999 surrender fee (45.00) 17.458837 87.4898 (2.5775) 84.9123
35 Alliance Premier Growth
12/31/1998 purchase 1,000.00 14.620511 - 68.3971 68.3971
12/31/1999 annual fee (1.30) 19.075994 68.3971 (0.0681) 68.3290
12/31/1999 surrender fee (45.00) 19.075994 68.3290 (2.3590) 65.9700
36 Alliance Real Estate Investment
12/31/1998 purchase 1,000.00 8.000583 - 124.9909 124.9909
12/31/1999 annual fee (0.94) 7.486033 124.9909 (0.1256) 124.8653
12/31/1999 surrender fee (45.00) 7.486033 124.8653 (6.0112) 118.8541
39 Liberty Newport Tiger, Variable Series
12/31/1998 purchase 1,000.00 9.278784 - 107.7727 107.7727
12/31/1999 annual fee (1.66) 15.397535 107.7727 (0.1078) 107.6649
12/31/1999 surrender fee (45.00) 15.397535 107.6649 (2.9225) 104.7424
40 Goldman Sachs G&I
12/31/1998 purchase 1,000.00 9.911702 - 100.8908 100.8908
12/31/1999 annual fee (1.04) 10.302541 100.8908 (0.1009) 100.7899
12/31/1999 surrender fee (45.00) 10.302541 100.7899 (4.3679) 96.4220
41 Goldman Sachs Int'l Equity
12/31/1998 purchase 1,000.00 11.416783 - 87.5903 87.5903
12/31/1999 annual fee (1.30) 14.844433 87.5903 (0.0876) 87.5027
12/31/1999 surrender fee (45.00) 14.844433 87.5027 (3.0314) 84.4713
42 Goldman Sachs Global Income
12/31/1998 purchase 1,000.00 10.815310 - 92.4615 92.4615
12/31/1999 annual fee (0.98) 10.556976 92.4615 (0.0928) 92.3687
12/31/1999 surrender fee (45.00) 10.556976 92.3687 (4.2626) 88.1061
44 Kemper Dreman High Return
12/31/1998 purchase 1,000.00 10.489000 - 95.3380 95.3380
12/31/1999 annual fee (0.88) 9.270000 95.3380 (0.0949) 95.2431
12/31/1999 surrender fee (45.00) 9.270000 95.2431 (4.8544) 90.3887
45 Kemper Small Cap Growth
12/31/1998 purchase 1,000.00 11.687795 - 85.5593 85.5593
12/31/1999 annual fee (1.33) 15.505196 85.5593 (0.0858) 85.4735
12/31/1999 surrender fee (45.00) 15.505196 85.4735 (2.9023) 82.5712
46 Kemper Small Cap Value
12/31/1998 purchase 1,000.00 8.770360 - 114.0204 114.0204
12/31/1999 annual fee (1.01) 8.886027 114.0204 (0.1137) 113.9067
12/31/1999 surrender fee (45.00) 8.886027 113.9067 (5.0641) 108.8426
47 Kemper Government Securities
12/31/1998 purchase 1,000.00 10.634608 - 94.0326 94.0326
12/31/1999 annual fee (0.99) 10.558404 94.0326 (0.0938) 93.9388
12/31/1999 surrender fee (45.00) 10.558404 93.9388 (4.2620) 89.6768
48 MFS Bond
12/31/1998 purchase 1,000.00 10.509000 - 95.1565 95.1565
12/31/1999 annual fee (0.98) 10.288000 95.1565 (0.0953) 95.0612
12/31/1999 surrender fee (45.00) 10.288000 95.0612 (4.3740) 90.6872
49 MFS Research
12/31/1998 purchase 1,000.00 12.179142 - 82.1076 82.1076
12/31/1999 annual fee (1.22) 14.897867 82.1076 (0.0819) 82.0257
12/31/1999 surrender fee (45.00) 14.897867 82.0257 (3.0206) 79.0051
50 MFS Growth with Income
12/31/1998 purchase 1,000.00 12.075079 - 82.8152 82.8152
12/31/1999 annual fee (1.05) 12.703932 82.8152 (0.0827) 82.7325
12/31/1999 surrender fee (45.00) 12.703932 82.7325 (3.5422) 79.1903
51 MFS Emerging Growth
12/31/1998 purchase 1,000.00 13.244101 - 75.5053 75.5053
12/31/1999 annual fee (1.74) 23.079105 75.5053 (0.0754) 75.4299
12/31/1999 surrender fee (45.00) 23.079105 75.4299 (1.9498) 73.4801
52 MFS / F&C Emerging Markets Equity
12/31/1998 purchase 1,000.00 6.581757 - 151.9351 151.9351
12/31/1999 annual fee (1.36) 8.967637 151.9351 (0.1517) 151.7834
12/31/1999 surrender fee (45.00) 8.967637 151.7834 (5.0180) 146.7654
53 MFS High Income
12/31/1998 purchase 1,000.00 9.863111 - 101.3879 101.3879
12/31/1999 annual fee (1.05) 10.352934 101.3879 (0.1014) 101.2865
12/31/1999 surrender fee (45.00) 10.352934 101.2865 (4.3466) 96.9399
54 MFS Global Governments
12/31/1998 purchase 1,000.00 10.663503 - 93.7778 93.7778
12/31/1999 annual fee (0.96) 10.252619 93.7778 (0.0936) 93.6842
12/31/1999 surrender fee (45.00) 10.252619 93.6842 (4.3891) 89.2951
55 Oppenheimer Capital Appreciation
12/31/1998 purchase 1,000.00 12.244057 - 81.6723 81.6723
12/31/1999 annual fee (1.40) 17.103249 81.6723 (0.0819) 81.5904
12/31/1999 surrender fee (45.00) 17.103249 81.5904 (2.6311) 78.9593
56 Oppenheimer Main Street G&I
12/31/1998 purchase 1,000.00 10.340279 - 96.7092 96.7092
12/31/1999 annual fee (1.20) 12.409773 96.7092 (0.0967) 96.6125
12/31/1999 surrender fee (45.00) 12.409773 96.6125 (3.6262) 92.9863
57 Oppenheimer High Income
12/31/1998 purchase 1,000.00 9.907918 - 100.9294 100.9294
12/31/1999 annual fee (1.03) 10.189165 100.9294 (0.1011) 100.8283
12/31/1999 surrender fee (45.00) 10.189165 100.8283 (4.4165) 96.4118
58 Oppenheimer Bond
12/31/1998 purchase 1,000.00 10.551643 - 94.7720 94.7720
12/31/1999 annual fee (0.97) 10.246949 94.7720 (0.0947) 94.6773
12/31/1999 surrender fee (45.00) 10.246949 94.6773 (4.3916) 90.2857
59 Oppenheimer Strategic Bond
12/31/1998 purchase 1,000.00 10.164797 - 98.3787 98.3787
12/31/1999 annual fee (1.01) 10.306821 98.3787 (0.0980) 98.2807
12/31/1999 surrender fee (45.00) 10.306821 98.2807 (4.3660) 93.9147
60 Putnam VT G&I
12/31/1998 purchase 1,000.00 11.403244 - 87.6943 87.6943
12/31/1999 annual fee (1.00) 11.422706 87.6943 (0.0875) 87.6068
12/31/1999 surrender fee (45.00) 11.422706 87.6068 (3.9395) 83.6673
61 Putman VT New Value
12/31/1998 purchase 1,000.00 10.498075 - 95.2556 95.2556
12/31/1999 annual fee (0.99) 10.379438 95.2556 (0.0954) 95.1602
12/31/1999 surrender fee (45.00) 10.379438 95.1602 (4.3355) 90.8247
62 Putnam VT Vista
12/31/1998 purchase 1,000.00 11.804097 - 84.7163 84.7163
12/31/1999 annual fee (1.51) 17.797452 84.7163 (0.0848) 84.6315
12/31/1999 surrender fee (45.00) 17.797452 84.6315 (2.5285) 82.1030
63 Putnam VT Int'l Growth
12/31/1998 purchase 1,000.00 11.729428 - 85.2556 85.2556
12/31/1999 annual fee (1.58) 18.522808 85.2556 (0.0853) 85.1703
12/31/1999 surrender fee (45.00) 18.522808 85.1703 (2.4294) 82.7409
64 Putnam VT Int'l New Opportunities
12/31/1998 purchase 1,000.00 11.420772 - 87.5598 87.5598
12/31/1999 annual fee (2.00) 22.858952 87.5598 (0.0875) 87.4723
12/31/1999 surrender fee (45.00) 22.858952 87.4723 (1.9686) 85.5037
67 Templeton International Securities
12/31/1998 purchase 1,000.00 9.149729 - 109.2929 109.2929
12/31/1999 annual fee (1.22) 11.157985 109.2929 (0.1093) 109.1836
12/31/1999 surrender fee (45.00) 11.157985 109.1836 (4.0330) 105.1506
68 Templeton Developing Markets Securities
12/31/1998 purchase 1,000.00 7.557531 - 132.3183 132.3183
12/31/1999 annual fee (1.52) 11.479237 132.3183 (0.1324) 132.1859
12/31/1999 surrender fee (45.00) 11.479237 132.1859 (3.9201) 128.2658
69 Mutual Shares Securities
12/31/1998 purchase 1,000.00 9.310282 - 107.4081 107.4081
12/31/1999 annual fee (1.12) 10.413095 107.4081 (0.1076) 107.3005
12/31/1999 surrender fee (45.00) 10.413095 107.3005 (4.3215) 102.9790
71 Fidelity VIP Growth
12/31/1998 purchase 1,000.00 13.115493 - 76.2457 76.2457
12/31/1999 annual fee (1.36) 17.780613 76.2457 (0.0765) 76.1692
12/31/1999 surrender fee (45.00) 17.780613 76.1692 (2.5308) 73.6384
72 Fidelity VIP II Contrafund
12/31/1998 purchase 1,000.00 12.429344 - 80.4548 80.4548
12/31/1999 annual fee (1.23) 15.235791 80.4548 (0.0807) 80.3741
12/31/1999 surrender fee (45.00) 15.235791 80.3741 (2.9536) 77.4205
73 Fidelity VIP III Growth Opportunities
12/31/1998 purchase 1,000.00 11.814000 - 84.6453 84.6453
12/31/1999 annual fee (1.03) 12.142823 84.6453 (0.0848) 84.5605
12/31/1999 surrender fee (45.00) 12.142823 84.5605 (3.7059) 80.8546
75 Fidelity VIP III Growth & Income
12/31/1998 purchase 1,000.00 12.259160 - 81.5717 81.5717
12/31/1999 annual fee (1.08) 13.198268 81.5717 (0.0818) 81.4899
12/31/1999 surrender fee (45.00) 13.198268 81.4899 (3.4095) 78.0804
76 Fidelity VIP Equity-Income
12/31/1998 purchase 1,000.00 10.674283 - 93.6831 93.6831
12/31/1999 annual fee (1.05) 11.196008 93.6831 (0.0938) 93.5893
12/31/1999 surrender fee (45.00) 11.196008 93.5893 (4.0193) 89.5700
99 Franklin Growth Investments
12/31/1998 purchase 1,000.00 - - #DIV/0! #DIV/0!
12/31/1999 annual fee #DIV/0! 14.687812 #DIV/0! #DIV/0! #DIV/0!
12/31/1999 surrender fee (45.00) 14.687812 #DIV/0! (3.0638) #DIV/0!
Cova Variable Annuity Account Five
Standard 1 Year Returns
12/31/1999
Sub-Account Total Account 12/31/1999 Initial Inception
Return Value AUV Investment Date
6 Cova Lord Abbett G&I (1) 1/8/1999
8 Cova Bond Debenture -2.61% 973.90 13.765395 1,000.00 5/20/1996
9 GACC Money Market -0.86% 991.36 11.525403 1,000.00 12/4/1997
11 Cova Developing Growth 25.95% 1,259.53 14.452893 1,000.00 11/7/1997
12 Cova Large Cap Research 19.14% 1,191.39 14.635794 1,000.00 2/17/1998
13 Cova Mid-Cap Value -0.41% 995.88 10.875543 1,000.00 11/7/1997
15 Cova Quality Bond -7.51% 924.88 11.567172 1,000.00 5/20/1996
16 Cova Small Cap Stock 37.87% 1,378.72 17.932499 1,000.00 5/15/1996
17 Cova Large Cap Stock 11.45% 1,114.45 22.548971 1,000.00 5/16/1996
18 Cova Select Equity 3.62% 1,036.19 18.384684 1,000.00 5/15/1996
19 Cova Int'l Equity 22.10% 1,220.97 16.333932 1,000.00 5/14/1996
24 Russell Multi-Style Equity 10.92% 1,109.22 14.719616 1,000.00 12/31/1997
25 Russell Aggressive Equity 0.00% 1,000.01 10.461908 1,000.00 12/31/1997
26 Russell Non-U.S. 26.88% 1,268.76 14.706241 1,000.00 12/31/1997
27 Russell Core Bond -6.59% 934.11 10.419502 1,000.00 12/31/1997
28 Russell Real Estate Securities (1) 7/1/1999
30 AIM V.I. Value 23.46% 1,234.63 16.748633 1,000.00 12/31/1997
31 AIM V.I. Capital Appreciation 37.96% 1,379.61 16.827440 1,000.00 12/31/1997
32 AIM V.I. Int'l Equity 48.25% 1,482.47 17.458837 1,000.00 12/31/1997
35 Alliance Premier Growth 25.84% 1,258.44 19.075994 1,000.00 12/31/1997
36 Alliance Real Estate Investment -11.03% 889.75 7.486033 1,000.00 12/31/1997
39 Liberty Newport Tiger, Variable Series 61.28% 1,612.77 15.397535 1,000.00 12/31/1997
40 Goldman Sachs G&I -0.66% 993.39 10.302541 1,000.00 3/31/1998
41 Goldman Sachs Int'l Equity 25.39% 1,253.93 14.844433 1,000.00 3/31/1998
42 Goldman Sachs Global Income -6.99% 930.13 10.556976 1,000.00 3/31/1998
43 Templeton Global Income Securities (1) 3/1/1999
44 Kemper Dreman High Return -16.21% 837.90 9.270000 1,000.00 5/15/1998
45 Kemper Small Cap Growth 28.03% 1,280.28 15.505196 1,000.00 12/31/1997
46 Kemper Small Cap Value -3.28% 967.18 8.886027 1,000.00 12/31/1997
47 Kemper Government Securities -5.32% 946.84 10.558404 1,000.00 12/31/1997
48 MFS Bond -6.70% 932.99 10.288000 1,000.00 5/15/1998
49 MFS Research 17.70% 1,177.01 14.897867 1,000.00 12/31/1997
50 MFS Growth with Income 0.60% 1,006.03 12.703932 1,000.00 12/31/1997
51 MFS Emerging Growth 69.59% 1,695.85 23.079105 1,000.00 12/31/1997
52 MFS / F&C Emerging Markets Equity 31.61% 1,316.14 8.967637 1,000.00 12/31/1997
53 MFS High Income 0.36% 1,003.61 10.352934 1,000.00 12/31/1997
54 MFS Global Governments -8.45% 915.51 10.252619 1,000.00 12/31/1997
55 Oppenheimer Capital Appreciation 35.05% 1,350.46 17.103249 1,000.00 12/31/1997
56 Oppenheimer Main Street G&I 15.39% 1,153.94 12.409773 1,000.00 12/31/1997
57 Oppenheimer High Income -1.76% 982.36 10.189165 1,000.00 12/31/1997
58 Oppenheimer Bond -7.49% 925.15 10.246949 1,000.00 12/31/1997
59 Oppenheimer Strategic Bond -3.20% 967.96 10.306821 1,000.00 12/31/1997
60 Putnam VT G&I -4.43% 955.71 11.422706 1,000.00 12/31/1997
61 Putman VT New Value -5.73% 942.71 10.379438 1,000.00 12/31/1997
62 Putnam VT Vista 46.12% 1,461.22 17.797452 1,000.00 12/31/1997
63 Putnam VT Int'l Growth 53.26% 1,532.59 18.522808 1,000.00 12/31/1997
64 Putnam VT Int'l New Opportunities 95.45% 1,954.52 22.858952 1,000.00 12/31/1997
65 Franklin Small Cap (1) 3/1/1999
66 Templeton Growth Securities (1) 3/2/1999
67 Templeton International Securities 17.33% 1,173.27 11.157985 1,000.00 9/21/1998
68 Templeton Developing Markets Securities 47.24% 1,472.39 11.479237 1,000.00 9/21/1998
69 Mutual Shares Securities 7.23% 1,072.33 10.413095 1,000.00 5/1/1998
71 Fidelity VIP Growth 30.93% 1,309.34 17.780613 1,000.00 2/17/1998
72 Fidelity VIP II Contrafund 17.96% 1,179.56 15.235791 1,000.00 2/17/1998
73 Fidelity VIP III Growth Opportunities -1.82% 981.80 12.142823 1,000.00 2/17/1998
75 Fidelity VIP III Growth & Income 3.05% 1,030.53 13.198268 1,000.00 2/17/1998
76 Fidelity VIP Equity-Income 0.28% 1,002.83 11.196008 1,000.00 2/17/1998
99 Franklin Large Cap Growth Securities (1) 3/1/1999
140 American Century VP Income & Growth (1) 11/19/1999
141 American Century VP Int'l (1) 11/19/1999
142 American Century VP Value (1) 11/19/1999
160 Dreyfus Stock Index (1) 11/19/1999
161 Dreyfus VIF Disciplined Stock (1) 11/19/1999
162 Dreyfus VIF Capital Appreciation (1) 11/19/1999
180 INVESCO VIF Dynamics (1) 11/19/1999
181 INVESCO VIF High Yield (1) 11/19/1999
210 PIMCO High Yield Bond (1) 11/19/1999
211 PIMCO Low Duration Bond (1) 11/19/1999
212 PIMCO StockPLUS G&I (1) 11/19/1999
213 PIMCO Total Return Bond (1) 11/19/1999
230 Scudder Int'l (1) 11/19/1999
(1)Sub-account has not been in existence for 1 year.
Cova Variable Annuity Account Five
Standard Inception to Date Return Data
As of 12/31/99
Sub-Account Transaction Amount Unit Unit Balance Transaction Unit
Value Before Units Balance
Transaction After
Transaction
6 Cova Lord Abbett G&I 0.98 yrs
1/8/1999 purchase 1,000.00 35.903763 - 27.8522 27.8522
12/31/1999 annual fee (1.10) 39.456973 27.8522 (0.0279) 27.8243
12/31/1999 surrender fee (50.00) 39.456973 27.8243 (1.2672) 26.5571
8 Cova Bond Debenture 3.62 yrs
5/20/1996 purchase 1,000.00 10.146329 - 98.5578 98.5578
5/20/1997 annual fee (1.16) 11.758378 98.5578 (0.0987) 98.4591
5/20/1998 annual fee (1.33) 13.473825 98.4591 (0.0987) 98.3604
5/20/1999 annual fee (1.33) 13.526840 98.3604 (0.0983) 98.2621
12/31/1999 annual fee (1.35) 13.765395 98.2621 (0.0981) 98.1640
12/31/1999 surrender fee (45.00) 13.765395 98.1640 (3.2691) 94.8949
9 GACC Money Market 2.07 yrs
12/4/1997 purchase 1,000.00 10.630827 - 94.0661 94.0661
12/4/1998 annual fee (1.04) 11.081985 94.0661 (0.0938) 93.9723
12/6/1999 annual fee (1.08) 11.489330 93.9723 (0.0940) 93.8783
12/31/1999 annual fee (1.08) 11.525403 93.8783 (0.0937) 93.7846
12/31/1999 surrender fee (45.00) 11.525403 93.7846 (3.9044) 89.8802
11 Cova Developing Growth 2.15 yrs
11/7/1997 purchase 1,000.00 10.830839 - 92.3290 92.3290
11/7/1998 annual fee (0.92) 9.967264 92.3290 (0.0923) 92.2367
11/8/1999 annual fee (1.12) 12.101957 92.2367 (0.0925) 92.1442
12/31/1999 annual fee (1.33) 14.452893 92.1442 (0.0920) 92.0522
12/31/1999 surrender fee (45.00) 14.452893 92.0522 (3.1136) 88.9386
12 Cova Large Cap Research 1.87 yrs
2/17/1998 purchase 1,000.00 10.756077 - 92.9707 92.9707
2/17/1999 annual fee (1.08) 11.579471 92.9707 (0.0933) 92.8774
12/31/1999 annual fee (1.36) 14.635794 92.8774 (0.0929) 92.7845
12/31/1999 surrender fee (45.00) 14.635794 92.7845 (3.0747) 89.7098
13 Cova Mid-Cap Value 2.15 yrs
11/7/1997 purchase 1,000.00 10.048781 - 99.5146 99.5146
11/7/1998 annual fee (1.03) 10.358485 99.5146 (0.0994) 99.4152
11/8/1999 annual fee (1.08) 10.863413 99.4152 (0.0994) 99.3158
12/31/1999 annual fee (1.08) 10.875543 99.3158 (0.0993) 99.2165
12/31/1999 surrender fee (45.00) 10.875543 99.2165 (4.1377) 95.0788
15 Cova Quality Bond 3.62 yrs
5/20/1996 purchase 1,000.00 9.951189 - 100.4905 100.4905
5/20/1997 annual fee (1.05) 10.440361 100.4905 (0.1006) 100.3899
5/20/1998 annual fee (1.15) 11.413235 100.3899 (0.1008) 100.2891
5/20/1999 annual fee (1.17) 11.662580 100.2891 (0.1003) 100.1888
12/31/1999 annual fee (1.16) 11.567172 100.1888 (0.1003) 100.0885
12/31/1999 surrender fee (45.00) 11.567172 100.0885 (3.8903) 96.1982
16 Cova Small Cap Stock 3.63 yrs
5/15/1996 purchase 1,000.00 10.905675 - 91.6954 91.6954
5/15/1997 annual fee (1.01) 10.995232 91.6954 (0.0919) 91.6035
5/15/1998 annual fee (1.35) 14.699217 91.6035 (0.0918) 91.5117
5/17/1999 annual fee (1.15) 12.606262 91.5117 (0.0912) 91.4205
12/31/1999 annual fee (1.64) 17.932499 91.4205 (0.0915) 91.3290
12/31/1999 surrender fee (45.00) 17.932499 91.3290 (2.5094) 88.8196
17 Cova Large Cap Stock 3.63 yrs
5/16/1996 purchase 1,000.00 10.155238 - 98.4714 98.4714
5/16/1997 annual fee (1.26) 12.753841 98.4714 (0.0988) 98.3726
5/18/1998 annual fee (1.71) 17.363858 98.3726 (0.0985) 98.2741
5/17/1999 annual fee (2.04) 20.716290 98.2741 (0.0985) 98.1756
12/31/1999 annual fee (2.21) 22.548971 98.1756 (0.0980) 98.0776
12/31/1999 surrender fee (45.00) 22.548971 98.0776 (1.9957) 96.0819
18 Cova Select Equity 3.63 yrs
5/15/1996 purchase 1,000.00 10.151958 - 98.5032 98.5032
5/15/1997 annual fee (1.19) 12.101835 98.5032 (0.0983) 98.4049
5/15/1998 annual fee (1.58) 16.090569 98.4049 (0.0982) 98.3067
5/17/1999 annual fee (1.75) 17.851686 98.3067 (0.0980) 98.2087
12/31/1999 annual fee (1.81) 18.384684 98.2087 (0.0985) 98.1102
12/31/1999 surrender fee (45.00) 18.384684 98.1102 (2.4477) 95.6625
19 Cova Int'l Equity 3.63 yrs
5/14/1996 purchase 1,000.00 10.098675 - 99.0229 99.0229
5/14/1997 annual fee (1.16) 11.696691 99.0229 (0.0992) 98.9237
5/14/1998 annual fee (1.30) 13.129981 98.9237 (0.0990) 98.8247
5/14/1999 annual fee (1.28) 12.963950 98.8247 (0.0987) 98.7260
12/31/1999 annual fee (1.61) 16.333932 98.7260 (0.0986) 98.6274
12/31/1999 surrender fee (45.00) 16.333932 98.6274 (2.7550) 95.8724
24 Russell Multi-Style Equity 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.27) 12.694810 100.0000 (0.1000) 99.9000
12/31/1999 annual fee (1.47) 14.719616 99.9000 (0.0999) 99.8001
12/31/1999 surrender fee (45.00) 14.719616 99.8001 (3.0571) 96.7430
25 Russell Aggressive Equity 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.00) 9.963254 100.0000 (0.1004) 99.8996
12/31/1999 annual fee (1.05) 10.461908 99.8996 (0.1004) 99.7992
12/31/1999 surrender fee (45.00) 10.461908 99.7992 (4.3013) 95.4979
26 Russell Non-U.S. 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.11) 11.142092 100.0000 (0.0996) 99.9004
12/31/1999 annual fee (1.47) 14.706241 99.9004 (0.1000) 99.8004
12/31/1999 surrender fee (45.00) 14.706241 99.8004 (3.0599) 96.7405
27 Russell Core Bond 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.06) 10.591175 100.0000 (0.1001) 99.8999
12/31/1999 annual fee (1.04) 10.419502 99.8999 (0.0998) 99.8001
12/31/1999 surrender fee (45.00) 10.419502 99.8001 (4.3188) 95.4813
28 Russell Real Estate Securities 0.50 yrs
7/1/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (0.94) 9.395293 100.0000 (0.1001) 99.8999
12/31/1999 surrender fee (50.00) 9.395293 99.8999 (5.3218) 94.5781
30 AIM V.I. Value 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.31) 13.060203 100.0000 (0.1003) 99.8997
12/31/1999 annual fee (1.67) 16.748633 99.8997 (0.0997) 99.8000
12/31/1999 surrender fee (45.00) 16.748633 99.8000 (2.6868) 97.1132
31 AIM V.I. Capital Appreciation 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.18) 11.770729 100.0000 (0.1002) 99.8998
12/31/1999 annual fee (1.68) 16.827440 99.8998 (0.0998) 99.8000
12/31/1999 surrender fee (45.00) 16.827440 99.8000 (2.6742) 97.1258
32 AIM V.I. Int'l Equity 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.14) 11.391449 100.0000 (0.1001) 99.8999
12/31/1999 annual fee (1.74) 17.458837 99.8999 (0.0997) 99.8002
12/31/1999 surrender fee (45.00) 17.458837 99.8002 (2.5775) 97.2227
35 Alliance Premier Growth 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.46) 14.595485 100.0000 (0.1000) 99.9000
12/31/1999 annual fee (1.91) 19.075994 99.9000 (0.1001) 99.7999
12/31/1999 surrender fee (45.00) 19.075994 99.7999 (2.3590) 97.4409
36 Alliance Real Estate Investment 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (0.80) 7.988435 100.0000 (0.1001) 99.8999
12/31/1999 annual fee (0.75) 7.486033 99.8999 (0.1002) 99.7997
12/31/1999 surrender fee (45.00) 7.486033 99.7997 (6.0112) 93.7885
39 Liberty Newport Tiger, Variable Series 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (0.92) 9.228765 100.0000 (0.0997) 99.9003
12/31/1999 annual fee (1.54) 15.397535 99.9003 (0.1000) 99.8003
12/31/1999 surrender fee (45.00) 15.397535 99.8003 (2.9225) 96.8778
40 Goldman Sachs G&I 1.75 yrs
3/31/1998 purchase 1,000.00 11.212646 - 89.1850 89.1850
3/31/1999 annual fee (0.89) 9.987823 89.1850 (0.0891) 89.0959
12/31/1999 annual fee (0.92) 10.302541 89.0959 (0.0893) 89.0066
12/31/1999 surrender fee (45.00) 10.302541 89.0066 (4.3679) 84.6387
41 Goldman Sachs Int'l Equity 1.75 yrs
3/31/1998 purchase 1,000.00 11.199710 - 89.2880 89.2880
3/31/1999 annual fee (1.00) 11.253877 89.2880 (0.0889) 89.1991
12/31/1999 annual fee (1.32) 14.844433 89.1991 (0.0889) 89.1102
12/31/1999 surrender fee (45.00) 14.844433 89.1102 (3.0314) 86.0788
42 Goldman Sachs Global Income 1.75 yrs
3/31/1998 purchase 1,000.00 10.152000 - 98.5028 98.5028
3/31/1999 purchase (1.05) 10.695661 98.5028 (0.0982) 98.4046
12/31/1999 annual fee (1.04) 10.556976 98.4046 (0.0985) 98.3061
12/31/1999 surrender fee (45.00) 10.556976 98.3061 (4.2626) 94.0435
43 Templeton Global Income Securities
3/1/1999 purchase 1,000.00 10.050717 - 99.4954 99.4954
12/31/1999 annual fee (0.96) 9.681844 99.4954 (0.0992) 99.3962
12/31/1999 surrender fee (50.00) 9.681844 99.3962 (5.1643) 94.2319
44 Kemper Dreman High Return 1.63 yrs
5/15/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
5/15/1999 annual fee (1.09) 10.887804 100.0000 (0.1001) 99.8999
12/31/1999 annual fee (0.93) 9.270000 99.8999 (0.1003) 99.7996
12/31/1999 surrender fee (45.00) 9.270000 99.7996 (4.8544) 94.9452
45 Kemper Small Cap Growth 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.17) 11.676086 100.0000 (0.1002) 99.8998
12/31/1999 annual fee (1.55) 15.505196 99.8998 (0.1000) 99.7998
12/31/1999 surrender fee (45.00) 15.505196 99.7998 (2.9023) 96.8975
46 Kemper Small Cap Value 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (0.88) 8.753222 100.0000 (0.1005) 99.8995
12/31/1999 annual fee (0.89) 8.886027 99.8995 (0.1002) 99.7993
12/31/1999 surrender fee (45.00) 8.886027 99.7993 (5.0641) 94.7352
47 Kemper Government Securities 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.06) 10.556498 100.0000 (0.1004) 99.8996
12/31/1999 annual fee (1.05) 10.558404 99.8996 (0.0994) 99.8002
12/31/1999 surrender fee (45.00) 10.558404 99.8002 (4.2620) 95.5382
48 MFS Bond 1.63 yrs
5/15/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
5/15/1999 annual fee (1.04) 10.372959 100.0000 (0.1003) 99.8997
12/31/1999 annual fee (1.03) 10.288000 99.8997 (0.1001) 99.7996
12/31/1999 surrender fee (45.00) 10.288000 99.7996 (4.3740) 95.4256
49 MFS Research 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.22) 12.172796 100.0000 (0.1002) 99.8998
12/31/1999 annual fee (1.49) 14.897867 99.8998 (0.1000) 99.7998
12/31/1999 surrender fee (45.00) 14.897867 99.7998 (3.0206) 96.7792
50 MFS Growth with Income 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.21) 12.066568 100.0000 (0.1003) 99.8997
12/31/1999 annual fee (1.27) 12.703932 99.8997 (0.1000) 99.7997
12/31/1999 surrender fee (45.00) 12.703932 99.7997 (3.5422) 96.2575
51 MFS Emerging Growth 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.32) 13.233235 100.0000 (0.0997) 99.9003
12/31/1999 annual fee (2.31) 23.079105 99.9003 (0.1001) 99.8002
12/31/1999 surrender fee (45.00) 23.079105 99.8002 (1.9498) 97.8504
52 MFS / F&C Emerging Markets Equity 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (0.66) 6.571830 100.0000 (0.1004) 99.8996
12/31/1999 annual fee (0.90) 8.967637 99.8996 (0.1004) 99.7992
12/31/1999 surrender fee (45.00) 8.967637 99.7992 (5.0180) 94.7812
53 MFS High Income 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (0.98) 9.845193 100.0000 (0.0995) 99.9005
12/31/1999 annual fee (1.03) 10.352934 99.9005 (0.0995) 99.8010
12/31/1999 surrender fee (45.00) 10.352934 99.8010 (4.3466) 95.4544
54 MFS Global Governments 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.07) 10.669943 100.0000 (0.1003) 99.8997
12/31/1999 annual fee (1.02) 10.252619 99.8997 (0.0995) 99.8002
12/31/1999 surrender fee (45.00) 10.252619 99.8002 (4.3891) 95.4111
55 Oppenheimer Capital Appreciation 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.22) 12.232731 100.0000 (0.0997) 99.9003
12/31/1999 annual fee (1.71) 17.103249 99.9003 (0.1000) 99.8003
12/31/1999 surrender fee (45.00) 17.103249 99.8003 (2.6311) 97.1692
56 Oppenheimer Main Street G&I 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.03) 10.326519 100.0000 (0.0997) 99.9003
12/31/1999 annual fee (1.24) 12.409773 99.9003 (0.0999) 99.8004
12/31/1999 surrender fee (45.00) 12.409773 99.8004 (3.6262) 96.1742
57 Oppenheimer High Income 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (0.99) 9.893828 100.0000 (0.1001) 99.8999
12/31/1999 annual fee (1.02) 10.189165 99.8999 (0.1001) 99.7998
12/31/1999 surrender fee (45.00) 10.189165 99.7998 (4.4165) 95.3833
58 Oppenheimer Bond 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (0.99) 9.893828 100.0000 (0.1001) 99.8999
12/31/1999 annual fee (1.02) 10.246949 99.8999 (0.0995) 99.8004
12/31/1999 surrender fee (45.00) 10.246949 99.8004 (4.3916) 95.4088
59 Oppenheimer Strategic Bond 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.02) 10.151332 100.0000 (0.1005) 99.8995
12/31/1999 annual fee (1.03) 10.306821 99.8995 (0.0999) 99.7996
12/31/1999 surrender fee (45.00) 10.306821 99.7996 (4.3660) 95.4336
60 Putnam VT G&I 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.14) 11.382650 100.0000 (0.1002) 99.8998
12/31/1999 annual fee (1.14) 11.422706 99.8998 (0.0998) 99.8000
12/31/1999 surrender fee (45.00) 11.422706 99.8000 (3.9395) 95.8605
61 Putman VT New Value 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.05) 10.483517 100.0000 (0.1002) 99.8998
12/31/1999 annual fee (1.04) 10.379438 99.8998 (0.1002) 99.7996
12/31/1999 surrender fee (45.00) 10.379438 99.7996 (4.3355) 95.4641
62 Putnam VT Vista 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.18) 11.785702 100.0000 (0.1001) 99.8999
12/31/1999 annual fee (1.78) 17.797452 99.8999 (0.1000) 99.7999
12/31/1999 surrender fee (45.00) 17.797452 99.7999 (2.5285) 97.2714
63 Putnam VT Int'l Growth 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.17) 11.707003 100.0000 (0.0999) 99.9001
12/31/1999 annual fee (1.85) 18.522808 99.9001 (0.0999) 99.8002
12/31/1999 surrender fee (45.00) 18.522808 99.8002 (2.4294) 97.3708
64 Putnam VT Int'l New Opportunities 2.00 yrs
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee (1.14) 11.402252 100.0000 (0.1000) 99.9000
12/31/1999 annual fee (2.28) 22.858952 99.9000 (0.0997) 99.8003
12/31/1999 surrender fee (45.00) 22.858952 99.8003 (1.9686) 97.8317
65 Franklin Small Cap
3/1/1999 purchase 1,000.00 8.646100 - 115.6591 115.6591
12/31/1999 annual fee (2.04) 17.679923 115.6591 (0.1154) 115.5437
12/31/1999 surrender fee (50.00) 17.679923 115.5437 (2.8281) 112.7156
66 Templeton Growth Securities
3/2/1999 purchase 1,000.00 10.025713 - 99.7435 99.7435
12/31/1999 annual fee (1.25) 12.557918 99.7435 (0.0995) 99.6440
12/31/1999 surrender fee (50.00) 12.557918 99.6440 (3.9816) 95.6624
67 Templeton International Securities 1.28 yrs
9/21/1998 purchase 1,000.00 7.893131 - 126.6924 126.6924
9/21/1999 annual fee (1.25) 9.858587 126.6924 (0.1268) 126.5656
12/31/1999 annual fee (1.41) 11.157985 126.5656 (0.1264) 126.4392
12/31/1999 surrender fee (45.00) 11.157985 126.4392 (4.0330) 122.4062
68 Templeton Developing Markets Securities 1.28 yrs
9/21/1998 purchase 1,000.00 5.645520 - 177.1316 177.1316
9/21/1999 annual fee (1.10) 9.132548 177.1316 (0.1204) 177.0112
12/31/1999 annual fee (2.03) 11.479237 177.0112 (0.1768) 176.8344
12/31/1999 surrender fee (45.00) 11.479237 176.8344 (3.9201) 172.9143
69 Mutual Shares Securities
9/21/1998 purchase 1,000.00 8.312657 - 120.2985 120.2985
9/21/1999 annual fee (1.19) 9.915712 120.2985 (0.1200) 120.1785
12/31/1999 annual fee (1.25) 10.413095 120.1785 (0.1200) 120.0585
12/31/1999 surrender fee (45.00) 10.413095 120.0585 (4.3215) 115.7370
71 Fidelity VIP Growth 1.87 yrs
2/17/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
2/17/1999 annual fee (1.33) 13.296297 100.0000 (0.1000) 99.9000
12/31/1999 annual fee (1.78) 17.780613 99.9000 (0.1001) 99.7999
12/31/1999 surrender fee (45.00) 17.780613 99.7999 (2.5308) 97.2691
72 Fidelity VIP II Contrafund 1.87 yrs
2/17/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
2/17/1999 annual fee (1.24) 12.429231 100.0000 (0.0998) 99.9002
12/31/1999 annual fee (1.52) 15.235791 99.9002 (0.0998) 99.8004
12/31/1999 surrender fee (45.00) 15.235791 99.8004 (2.9536) 96.8468
73 Fidelity VIP III Growth Opportunities 1.87 yrs
2/17/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
2/17/1999 annual fee (1.13) 11.255274 100.0000 (0.1004) 99.8996
12/31/1999 annual fee (1.21) 12.142823 99.8996 (0.0996) 99.8000
12/31/1999 surrender fee (45.00) 12.142823 99.8000 (3.7059) 96.0941
75 Fidelity VIP III Growth & Income 1.87 yrs
2/17/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
2/17/1999 annual fee (1.21) 12.066871 100.0000 (0.1003) 99.8997
12/31/1999 annual fee (1.32) 13.198268 99.8997 (0.1000) 99.7997
12/31/1999 surrender fee (45.00) 13.198268 99.7997 (3.4095) 96.3902
76 Fidelity VIP Equity-Income 1.87 yrs
2/17/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
2/17/1999 annual fee (1.03) 10.322067 100.0000 (0.0998) 99.9002
12/31/1999 annual fee (1.12) 11.196008 99.9002 (0.1000) 99.8002
12/31/1999 surrender fee (45.00) 11.196008 99.8002 (4.0193) 95.7809
99 Franklin Large Cap Growth Securities
99 3/1/1999 purchase 1,000.00 10.985852 - 91.0262 91.0262
99 12/31/1999 annual fee (1.30) 14.307568 91.0262 (0.0909) 90.9353
99 12/31/1999 surrender fee (50.00) 14.307568 90.9353 (3.4947) 87.4406
140 American Century VP Income & Growth 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (1.03) 10.324878 100.0000 (0.0998) 99.9002
12/31/1999 surrender fee (50.00) 10.324878 99.9002 (4.8427) 95.0575
141 American Century VP Int'l 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (1.25) 12.517000 100.0000 (0.0999) 99.9001
12/31/1999 surrender fee (50.00) 12.517000 99.9001 (3.9946) 95.9055
142 American Century VP Value 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (0.96) 9.586953 100.0000 (0.1001) 99.8999
12/31/1999 surrender fee (50.00) 9.586953 99.8999 (5.2154) 94.6845
160 Dreyfus Stock Index 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (1.03) 10.336000 100.0000 (0.0997) 99.9003
12/31/1999 surrender fee (50.00) 10.336000 99.9003 (4.8375) 95.0628
161 Dreyfus VIF Disciplined Stock 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (1.03) 10.306000 100.0000 (0.0999) 99.9001
12/31/1999 surrender fee (50.00) 10.306000 99.9001 (4.8515) 95.0486
162 Dreyfus VIF Capital Appreciation 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (1.01) 10.128000 100.0000 (0.0997) 99.9003
12/31/1999 surrender fee (50.00) 10.128000 99.9003 (4.9368) 94.9635
180 INVESCO VIF Dynamics 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (1.11) 11.148744 100.0000 (0.0996) 99.9004
12/31/1999 surrender fee (50.00) 11.148744 99.9004 (4.4848) 95.4156
181 INVESCO VIF High Yield 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (1.01) 10.122749 100.0000 (0.0998) 99.9002
12/31/1999 surrender fee (50.00) 10.122749 99.9002 (4.9394) 94.9608
210 PIMCO High Yield Bond 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (1.01) 10.078000 100.0000 (0.1002) 99.8998
12/31/1999 surrender fee (50.00) 10.078000 99.8998 (4.9613) 94.9385
211 PIMCO Low Duration Bond 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (1.00) 9.969000 100.0000 (0.1003) 99.8997
12/31/1999 surrender fee (50.00) 9.969000 99.8997 (5.0155) 94.8842
212 PIMCO StockPLUS G&I 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (1.03) 10.311000 100.0000 (0.0999) 99.9001
12/31/1999 surrender fee (50.00) 10.311000 99.9001 (4.8492) 95.0509
213 PIMCO Total Return Bond 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (0.99) 9.898482 100.0000 (0.1000) 99.9000
12/31/1999 surrender fee (50.00) 9.898482 99.9000 (5.0513) 94.8487
230 Scudder Int'l 0.12 yrs
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee (1.16) 11.637458 100.0000 (0.0997) 99.9003
12/31/1999 surrender fee (50.00) 11.637458 99.9003 (4.2965) 95.6038
Cova Variable Annuity Account Five
Standard Since Inception Returns
12/31/1999
Sub-Account Annualized Account 12/31/1999 Initial Inception
Inception Value AUV Investment Date
Return
6 Cova Lord Abbett G&I (1) 4.79% 1,047.86 39.456973 1,000.00 1/8/1999
8 Cova Bond Debenture 7.67% 1,306.27 13.765395 1,000.00 5/20/1996
9 GACC Money Market 1.72% 1,035.91 11.525403 1,000.00 12/4/1997
11 Cova Developing Growth 12.40% 1,285.42 14.452893 1,000.00 11/7/1997
12 Cova Large Cap Research 15.69% 1,312.97 14.635794 1,000.00 2/17/1998
13 Cova Mid-Cap Value 1.57% 1,034.03 10.875543 1,000.00 11/7/1997
15 Cova Quality Bond 3.00% 1,112.74 11.567172 1,000.00 5/20/1996
16 Cova Small Cap Stock 13.68% 1,592.76 17.932499 1,000.00 5/15/1996
17 Cova Large Cap Stock 23.76% 2,166.55 22.548971 1,000.00 5/16/1996
18 Cova Select Equity 16.83% 1,758.72 18.384684 1,000.00 5/15/1996
19 Cova Int'l Equity 13.14% 1,565.97 16.333932 1,000.00 5/14/1996
24 Russell Multi-Style Equity 19.33% 1,424.02 14.719616 1,000.00 12/31/1997
25 Russell Aggressive Equity -0.05% 999.09 10.461908 1,000.00 12/31/1997
26 Russell Non-U.S. 19.28% 1,422.69 14.706241 1,000.00 12/31/1997
27 Russell Core Bond -0.26% 994.87 10.419502 1,000.00 12/31/1997
28 Russell Real Estate Securities (1) -11.14% 888.59 9.395293 1,000.00 7/1/1999
30 AIM V.I. Value 27.53% 1,626.51 16.748633 1,000.00 12/31/1997
31 AIM V.I. Capital Appreciation 27.84% 1,634.38 16.827440 1,000.00 12/31/1997
32 AIM V.I. Int'l Equity 30.28% 1,697.40 17.458837 1,000.00 12/31/1997
35 Alliance Premier Growth 36.34% 1,858.78 19.075994 1,000.00 12/31/1997
36 Alliance Real Estate Investment -16.21% 702.10 7.486033 1,000.00 12/31/1997
39 Liberty Newport Tiger, Variable Series 22.13% 1,491.68 15.397535 1,000.00 12/31/1997
40 Goldman Sachs G&I -7.51% 871.99 10.302541 1,000.00 3/31/1998
41 Goldman Sachs Int'l Equity 15.00% 1,277.79 14.844433 1,000.00 3/31/1998
42 Goldman Sachs Global Income -0.41% 992.81 10.556976 1,000.00 3/31/1998
43 Templeton Global Income Securities (1) -8.77% 912.34 9.681844 1,000.00 3/1/1999
44 Kemper Dreman High Return -7.53% 880.14 9.270000 1,000.00 5/15/1998
45 Kemper Small Cap Growth 22.57% 1,502.41 15.505196 1,000.00 12/31/1997
46 Kemper Small Cap Value -8.25% 841.82 8.886027 1,000.00 12/31/1997
47 Kemper Government Securities 0.44% 1,008.73 10.558404 1,000.00 12/31/1997
48 MFS Bond -1.12% 981.74 10.288000 1,000.00 5/15/1998
49 MFS Research 20.07% 1,441.80 14.897867 1,000.00 12/31/1997
50 MFS Growth with Income 10.58% 1,222.85 12.703932 1,000.00 12/31/1997
51 MFS Emerging Growth 50.28% 2,258.30 23.079105 1,000.00 12/31/1997
52 MFS / F&C Emerging Markets Equity -7.81% 849.96 8.967637 1,000.00 12/31/1997
53 MFS High Income -0.59% 988.23 10.352934 1,000.00 12/31/1997
54 MFS Global Governments -1.10% 978.21 10.252619 1,000.00 12/31/1997
55 Oppenheimer Capital Appreciation 28.92% 1,661.91 17.103249 1,000.00 12/31/1997
56 Oppenheimer Main Street G&I 9.25% 1,193.50 12.409773 1,000.00 12/31/1997
57 Oppenheimer High Income -1.42% 971.88 10.189165 1,000.00 12/31/1997
58 Oppenheimer Bond -1.12% 977.65 10.246949 1,000.00 12/31/1997
59 Oppenheimer Strategic Bond -0.82% 983.62 10.306821 1,000.00 12/31/1997
60 Putnam VT G&I 4.64% 1,094.99 11.422706 1,000.00 12/31/1997
61 Putman VT New Value -0.46% 990.86 10.379438 1,000.00 12/31/1997
62 Putnam VT Vista 31.57% 1,731.18 17.797452 1,000.00 12/31/1997
63 Putnam VT Int'l Growth 34.30% 1,803.58 18.522808 1,000.00 12/31/1997
64 Putnam VT Int'l New Opportunities 49.54% 2,236.33 22.858952 1,000.00 12/31/1997
65 Fanklin Small Cap (1) 99.28% 1,992.80 17.679923 1,000.00 3/1/1999
66 Templeton Growth Securities (1) 20.13% 1,201.32 12.557918 1,000.00 3/2/1999
67 Templeton International Securities 27.66% 1,365.81 11.157985 1,000.00 9/21/1998
68 Templeton Developing Markets Securities 71.08% 1,984.92 11.479237 1,000.00 9/21/1998
69 Mutual Shares Securities 20.52% 1,205.18 10.413095 1,000.00 9/21/1998
71 Fidelity VIP Growth 34.07% 1,729.50 17.780613 1,000.00 2/17/1998
72 Fidelity VIP II Contrafund 23.15% 1,475.54 15.235791 1,000.00 2/17/1998
73 Fidelity VIP III Growth Opportunities 8.61% 1,166.85 12.142823 1,000.00 2/17/1998
75 Fidelity VIP III Growth & Income 13.75% 1,272.18 13.198268 1,000.00 2/17/1998
76 Fidelity VIP Equity-Income 3.81% 1,072.36 11.196008 1,000.00 2/17/1998
99 Franklin Large Cap Growth Securities (1) 25.11% 1,251.06 14.307568 1,000.00 3/1/1999
140 American Century VP Income & Growth (1) -1.85% 981.46 10.324878 1,000.00 11/19/1999
141 American Century VP Int'l (1) 20.05% 1,200.45 12.517000 1,000.00 11/19/1999
142 American Century VP Value (1) -9.23% 907.74 9.586953 1,000.00 11/19/1999
160 Dreyfus Stock Index (1) -1.74% 982.57 10.336000 1,000.00 11/19/1999
161 Dreyfus VIF Disciplined Stock (1) -2.04% 979.57 10.306000 1,000.00 11/19/1999
162 Dreyfus VIF Capital Appreciation (1) -3.82% 961.79 10.128000 1,000.00 11/19/1999
180 INVESCO VIF Dynamics (1) 6.38% 1,063.76 11.148744 1,000.00 11/19/1999
181 INVESCO VIF High Yield (1) -3.87% 961.26 10.122749 1,000.00 11/19/1999
210 PIMCO High Yield Bond (1) -4.32% 956.79 10.078000 1,000.00 11/19/1999
211 PIMCO Low Duration Bond (1) -5.41% 945.90 9.969000 1,000.00 11/19/1999
212 PIMCO StockPLUS G&I (1) -1.99% 980.07 10.311000 1,000.00 11/19/1999
213 PIMCO Total Return Bond (1) -6.11% 938.86 9.898482 1,000.00 11/19/1999
230 Scudder Int'l (1) 11.26% 1,112.59 11.637458 1,000.00 11/19/1999
(1)Returns are not annualized for sub-accounts in existence less than 1 year.
Cova Variable Annuity Account Five
Non-Standard 1 Year Return Data
As of 12/31/99
Sub-Account Transaction Amount Unit Unit Balance Transaction Unit
Value Before Units Balance
Transaction After
Transaction
6 Cova Lord Abbett G&I
12/31/98 purchase 1,000.00 - - #DIV/0! #DIV/0!
12/31/99 annual fee 39.456973 #DIV/0! - #DIV/0!
12/31/99 surrender fee 39.456973 #DIV/0! - #DIV/0!
8 Cova Bond Debenture
12/31/98 purchase 1,000.00 13.496510 - 74.0932 74.0932
12/31/99 annual fee 13.765395 74.0932 - 74.0932
12/31/99 surrender fee 13.765395 74.0932 - 74.0932
9 GACC Money Market
12/31/98 purchase 1,000.00 11.109949 - 90.0094 90.0094
12/31/99 annual fee 11.525403 90.0094 - 90.0094
12/31/99 surrender fee 11.525403 90.0094 - 90.0094
11 Cova Developing Growth
12/31/98 purchase 1,000.00 11.067868 - 90.3516 90.3516
12/31/99 annual fee 14.452893 90.3516 - 90.3516
12/31/99 surrender fee 14.452893 90.3516 - 90.3516
12 Cova Large Cap Research
12/31/98 purchase 1,000.00 11.825638 - 84.5620 84.5620
12/31/99 annual fee 14.635794 84.5620 - 84.5620
12/31/99 surrender fee 14.635794 84.5620 - 84.5620
13 Cova Mid-Cap Value
12/31/98 purchase 1,000.00 10.437956 - 95.8042 95.8042
12/31/99 annual fee 10.875543 95.8042 - 95.8042
12/31/99 surrender fee 10.875543 95.8042 - 95.8042
15 Cova Quality Bond
12/31/98 purchase 1,000.00 11.914509 - 83.9313 83.9313
12/31/99 annual fee 11.567172 83.9313 - 83.9313
12/31/99 surrender fee 11.567172 83.9313 - 83.9313
16 Cova Small Cap Stock
12/31/98 purchase 1,000.00 12.582885 - 79.4730 79.4730
12/31/99 annual fee 17.932499 79.4730 - 79.4730
12/31/99 surrender fee 17.932499 79.4730 - 79.4730
17 Cova Large Cap Stock
12/31/98 purchase 1,000.00 19.428505 - 51.4708 51.4708
12/31/99 annual fee 22.548971 51.4708 - 51.4708
12/31/99 surrender fee 22.548971 51.4708 - 51.4708
18 Cova Select Equity
12/31/98 purchase 1,000.00 16.987203 - 58.8678 58.8678
12/31/99 annual fee 18.384684 58.8678 - 58.8678
12/31/99 surrender fee 18.384684 58.8678 - 58.8678
19 Cova Int'l Equity
12/31/98 purchase 1,000.00 12.889314 - 77.5836 77.5836
12/31/99 annual fee 16.333932 77.5836 - 77.5836
12/31/99 surrender fee 16.333932 77.5836 - 77.5836
24 Russell Multi-Style Equity
12/31/98 purchase 1,000.00 12.740123 - 78.4922 78.4922
12/31/99 annual fee 14.719616 78.4922 - 78.4922
12/31/99 surrender fee 14.719616 78.4922 - 78.4922
25 Russell Aggressive Equity
12/31/98 purchase 1,000.00 10.001283 - 99.9872 99.9872
12/31/99 annual fee 10.461908 99.9872 - 99.9872
12/31/99 surrender fee 10.461908 99.9872 - 99.9872
26 Russell Non-U.S.
12/31/98 purchase 1,000.00 11.182808 - 89.4230 89.4230
12/31/99 annual fee 14.706241 89.4230 - 89.4230
12/31/99 surrender fee 14.706241 89.4230 - 89.4230
27 Russell Core Bond
12/31/98 purchase 1,000.00 10.631124 - 94.0634 94.0634
12/31/99 annual fee 10.419502 94.0634 - 94.0634
12/31/99 surrender fee 10.419502 94.0634 - 94.0634
28 Russell Real Estate Securities
12/31/98 purchase 1,000.00 - - #DIV/0! #DIV/0!
12/31/99 annual fee 9.395293 #DIV/0! - #DIV/0!
12/31/99 surrender fee 9.395293 #DIV/0! - #DIV/0!
30 AIM V.I. Value
12/31/98 purchase 1,000.00 13.075597 - 76.4783 76.4783
12/31/99 annual fee 16.748633 76.4783 - 76.4783
12/31/99 surrender fee 16.748633 76.4783 - 76.4783
31 AIM V.I. Capital Appreciation
12/31/98 purchase 1,000.00 11.800084 - 84.7452 84.7452
12/31/99 annual fee 16.827440 84.7452 - 84.7452
12/31/99 surrender fee 16.827440 84.7452 - 84.7452
32 AIM V.I. Int'l Equity
12/31/98 purchase 1,000.00 11.418467 - 87.5774 87.5774
12/31/99 annual fee 17.458837 87.5774 - 87.5774
12/31/99 surrender fee 17.458837 87.5774 - 87.5774
35 Alliance Premier Growth
12/31/98 purchase 1,000.00 14.620511 - 68.3971 68.3971
12/31/99 annual fee 19.075994 68.3971 - 68.3971
12/31/99 surrender fee 19.075994 68.3971 - 68.3971
36 Alliance Real Estate Investment
12/31/98 purchase 1,000.00 8.000583 - 124.9909 124.9909
12/31/99 annual fee 7.486033 124.9909 - 124.9909
12/31/99 surrender fee 7.486033 124.9909 - 124.9909
39 Liberty Newport Tiger, Variable Series
12/31/98 purchase 1,000.00 9.278784 - 107.7727 107.7727
12/31/99 annual fee 15.397535 107.7727 - 107.7727
12/31/99 surrender fee 15.397535 107.7727 - 107.7727
40 Goldman Sachs G&I
12/31/98 purchase 1,000.00 9.911702 - 100.8908 100.8908
12/31/99 annual fee 10.302541 100.8908 - 100.8908
12/31/99 surrender fee 10.302541 100.8908 - 100.8908
41 Goldman Sachs Int'l Equity
12/31/98 purchase 1,000.00 11.416783 - 87.5903 87.5903
12/31/99 annual fee 14.844433 87.5903 - 87.5903
12/31/99 surrender fee 14.844433 87.5903 - 87.5903
42 Goldman Sachs Global Income
12/31/98 purchase 1,000.00 10.815310 - 92.4615 92.4615
12/31/99 annual fee 10.556976 92.4615 - 92.4615
12/31/99 surrender fee 10.556976 92.4615 - 92.4615
44 Kemper Dreman High Return
12/31/98 purchase 1,000.00 10.489000 - 95.3380 95.3380
12/31/99 annual fee 9.270000 95.3380 - 95.3380
12/31/99 surrender fee 9.270000 95.3380 - 95.3380
45 Kemper Small Cap Growth
12/31/98 purchase 1,000.00 11.687795 - 85.5593 85.5593
12/31/99 annual fee 15.505196 85.5593 - 85.5593
12/31/99 surrender fee 15.505196 85.5593 - 85.5593
46 Kemper Small Cap Value
12/31/98 purchase 1,000.00 8.770360 - 114.0204 114.0204
12/31/99 annual fee 8.886027 114.0204 - 114.0204
12/31/99 surrender fee 8.886027 114.0204 - 114.0204
47 Kemper Government Securities
12/31/98 purchase 1,000.00 10.634608 - 94.0326 94.0326
12/31/99 annual fee 10.558404 94.0326 - 94.0326
12/31/99 surrender fee 10.558404 94.0326 - 94.0326
48 MFS Bond
12/31/98 purchase 1,000.00 10.509000 - 95.1565 95.1565
12/31/99 annual fee 10.288000 95.1565 - 95.1565
12/31/99 surrender fee 10.288000 95.1565 - 95.1565
49 MFS Research
12/31/98 purchase 1,000.00 12.179142 - 82.1076 82.1076
12/31/99 annual fee 14.897867 82.1076 - 82.1076
12/31/99 surrender fee 14.897867 82.1076 - 82.1076
50 MFS Growth with Income
12/31/98 purchase 1,000.00 12.075079 - 82.8152 82.8152
12/31/99 annual fee 12.703932 82.8152 - 82.8152
12/31/99 surrender fee 12.703932 82.8152 - 82.8152
51 MFS Emerging Growth
12/31/98 purchase 1,000.00 13.244101 - 75.5053 75.5053
12/31/99 annual fee 23.079105 75.5053 - 75.5053
12/31/99 surrender fee 23.079105 75.5053 - 75.5053
52 MFS / F&C Emerging Markets Equity
12/31/98 purchase 1,000.00 6.581757 - 151.9351 151.9351
12/31/99 annual fee 8.967637 151.9351 - 151.9351
12/31/99 surrender fee 8.967637 151.9351 - 151.9351
53 MFS High Income
12/31/98 purchase 1,000.00 9.863111 - 101.3879 101.3879
12/31/99 annual fee 10.352934 101.3879 - 101.3879
12/31/99 surrender fee 10.352934 101.3879 - 101.3879
54 MFS Global Governments
12/31/98 purchase 1,000.00 10.663503 - 93.7778 93.7778
12/31/99 annual fee 10.252619 93.7778 - 93.7778
12/31/99 surrender fee 10.252619 93.7778 - 93.7778
55 Oppenheimer Capital Appreciation
12/31/98 purchase 1,000.00 12.244057 - 81.6723 81.6723
12/31/99 annual fee 17.103249 81.6723 - 81.6723
12/31/99 surrender fee 17.103249 81.6723 - 81.6723
56 Oppenheimer Main Street G&I
12/31/98 purchase 1,000.00 10.340279 - 96.7092 96.7092
12/31/99 annual fee 12.409773 96.7092 - 96.7092
12/31/99 surrender fee 12.409773 96.7092 - 96.7092
57 Oppenheimer High Income
12/31/98 purchase 1,000.00 9.907918 - 100.9294 100.9294
12/31/99 annual fee 10.189165 100.9294 - 100.9294
12/31/99 surrender fee 10.189165 100.9294 - 100.9294
58 Oppenheimer Bond
12/31/98 purchase 1,000.00 10.551643 - 94.7720 94.7720
12/31/99 annual fee 10.246949 94.7720 - 94.7720
12/31/99 surrender fee 10.246949 94.7720 - 94.7720
59 Oppenheimer Strategic Bond
12/31/98 purchase 1,000.00 10.164797 - 98.3787 98.3787
12/31/99 annual fee 10.306821 98.3787 - 98.3787
12/31/99 surrender fee 10.306821 98.3787 - 98.3787
60 Putnam VT G&I
12/31/98 purchase 1,000.00 11.403244 - 87.6943 87.6943
12/31/99 annual fee 11.422706 87.6943 - 87.6943
12/31/99 surrender fee 11.422706 87.6943 - 87.6943
61 Putman VT New Value
12/31/98 purchase 1,000.00 10.498075 - 95.2556 95.2556
12/31/99 annual fee 10.379438 95.2556 - 95.2556
12/31/99 surrender fee 10.379438 95.2556 - 95.2556
62 Putnam VT Vista
12/31/98 purchase 1,000.00 11.804097 - 84.7163 84.7163
12/31/99 annual fee 17.797452 84.7163 - 84.7163
12/31/99 surrender fee 17.797452 84.7163 - 84.7163
63 Putnam VT Int'l Growth
12/31/98 purchase 1,000.00 11.729428 - 85.2556 85.2556
12/31/99 annual fee 18.522808 85.2556 - 85.2556
12/31/99 surrender fee 18.522808 85.2556 - 85.2556
64 Putnam VT Int'l New Opportunities
12/31/98 purchase 1,000.00 11.420772 - 87.5598 87.5598
12/31/99 annual fee 22.858952 87.5598 - 87.5598
12/31/99 surrender fee 22.858952 87.5598 - 87.5598
67 Templeton International Securities
12/31/98 purchase 1,000.00 9.149729 - 109.2929 109.2929
12/31/99 annual fee 11.157985 109.2929 - 109.2929
12/31/99 surrender fee 11.157985 109.2929 - 109.2929
68 Templeton Developing Markets Securities
12/31/98 purchase 1,000.00 7.557531 - 132.3183 132.3183
12/31/99 annual fee 11.479237 132.3183 - 132.3183
12/31/99 surrender fee 11.479237 132.3183 - 132.3183
69 Mutual Shares Securities
12/31/98 purchase 1,000.00 9.310282 - 107.4081 107.4081
12/31/99 annual fee 10.413095 107.4081 - 107.4081
12/31/99 surrender fee 10.413095 107.4081 - 107.4081
71 Fidelity VIP Growth
12/31/98 purchase 1,000.00 13.115493 - 76.2457 76.2457
12/31/99 annual fee 17.780613 76.2457 - 76.2457
12/31/99 surrender fee 17.780613 76.2457 - 76.2457
72 Fidelity VIP II Contrafund
12/31/98 purchase 1,000.00 12.429344 - 80.4548 80.4548
12/31/99 annual fee 15.235791 80.4548 - 80.4548
12/31/99 surrender fee 15.235791 80.4548 - 80.4548
73 Fidelity VIP III Growth Opportunities
12/31/98 purchase 1,000.00 11.814000 - 84.6453 84.6453
12/31/99 annual fee 12.142823 84.6453 - 84.6453
12/31/99 surrender fee 12.142823 84.6453 - 84.6453
75 Fidelity VIP III Growth & Income
12/31/98 purchase 1,000.00 12.259160 - 81.5717 81.5717
12/31/99 annual fee 13.198268 81.5717 - 81.5717
12/31/99 surrender fee 13.198268 81.5717 - 81.5717
76 Fidelity VIP Equity-Income
12/31/98 purchase 1,000.00 10.674283 - 93.6831 93.6831
12/31/99 annual fee 11.196008 93.6831 - 93.6831
12/31/99 surrender fee 11.196008 93.6831 - 93.6831
99 Franklin Growth Investments
12/31/98 purchase 1,000.00 - - #DIV/0! #DIV/0!
12/31/99 annual fee 14.687812 #DIV/0! - #DIV/0!
12/31/99 surrender fee 14.687812 #DIV/0! - #DIV/0!
Cova Variable Annuity Account Five
Non-Standard Returns
12/31/99
Sub-Account Total Account 12/31/1999 Initial Inception
Return Value AUV Investment Date
6 Cova Lord Abbett G&I (1) 1/8/1999
8 Cova Bond Debenture 1.99% 1,019.92 13.765395 1,000.00 5/20/1996
9 GACC Money Market 3.74% 1,037.39 11.525403 1,000.00 12/4/1997
11 Cova Developing Growth 30.58% 1,305.84 14.452893 1,000.00 11/7/1997
12 Cova Large Cap Research 23.76% 1,237.63 14.635794 1,000.00 2/17/1998
13 Cova Mid-Cap Value 4.19% 1,041.92 10.875543 1,000.00 11/7/1997
15 Cova Quality Bond -2.92% 970.85 11.567172 1,000.00 5/20/1996
16 Cova Small Cap Stock 42.52% 1,425.15 17.932499 1,000.00 5/15/1996
17 Cova Large Cap Stock 16.06% 1,160.61 22.548971 1,000.00 5/16/1996
18 Cova Select Equity 8.23% 1,082.27 18.384684 1,000.00 5/15/1996
19 Cova Int'l Equity 26.73% 1,267.25 16.333932 1,000.00 5/14/1996
24 Russell Multi-Style Equity 15.54% 1,155.38 14.719616 1,000.00 12/31/1997
25 Russell Aggressive Equity 4.61% 1,046.06 10.461908 1,000.00 12/31/1997
26 Russell Non-U.S. 31.51% 1,315.08 14.706241 1,000.00 12/31/1997
27 Russell Core Bond -1.99% 980.09 10.419502 1,000.00 12/31/1997
28 Russell Real Estate Securities (1) 7/1/1999
30 AIM V.I. Value 28.09% 1,280.91 16.748633 1,000.00 12/31/1997
31 AIM V.I. Capital Appreciation 42.60% 1,426.04 16.827440 1,000.00 12/31/1997
32 AIM V.I. Int'l Equity 52.90% 1,529.00 17.458837 1,000.00 12/31/1997
35 Alliance Premier Growth 30.47% 1,304.74 19.075994 1,000.00 12/31/1997
36 Alliance Real Estate Investment -6.43% 935.69 7.486033 1,000.00 12/31/1997
39 Liberty Newport Tiger, Variable Series 65.94% 1,659.43 15.397535 1,000.00 12/31/1997
40 Goldman Sachs G&I 3.94% 1,039.43 10.302541 1,000.00 3/31/1998
41 Goldman Sachs Int'l Equity 30.02% 1,300.23 14.844433 1,000.00 3/31/1998
42 Goldman Sachs Global Income -2.39% 976.11 10.556976 1,000.00 3/31/1998
43 Templeton Global Income Securities (1) 3/1/1999
44 Kemper Dreman High Return -11.62% 883.78 9.270000 1,000.00 5/15/1998
45 Kemper Small Cap Growth 32.66% 1,326.61 15.505196 1,000.00 12/31/1997
46 Kemper Small Cap Value 1.32% 1,013.19 8.886027 1,000.00 12/31/1997
47 Kemper Government Securities -0.72% 992.83 10.558404 1,000.00 12/31/1997
48 MFS Bond -2.10% 978.97 10.288000 1,000.00 5/15/1998
49 MFS Research 22.32% 1,223.23 14.897867 1,000.00 12/31/1997
50 MFS Growth with Income 5.21% 1,052.08 12.703932 1,000.00 12/31/1997
51 MFS Emerging Growth 74.26% 1,742.59 23.079105 1,000.00 12/31/1997
52 MFS / F&C Emerging Markets Equity 36.25% 1,362.50 8.967637 1,000.00 12/31/1997
53 MFS High Income 4.97% 1,049.66 10.352934 1,000.00 12/31/1997
54 MFS Global Governments -3.85% 961.47 10.252619 1,000.00 12/31/1997
55 Oppenheimer Capital Appreciation 39.69% 1,396.86 17.103249 1,000.00 12/31/1997
56 Oppenheimer Main Street G&I 20.01% 1,200.14 12.409773 1,000.00 12/31/1997
57 Oppenheimer High Income 2.84% 1,028.39 10.189165 1,000.00 12/31/1997
58 Oppenheimer Bond -2.89% 971.12 10.246949 1,000.00 12/31/1997
59 Oppenheimer Strategic Bond 1.40% 1,013.97 10.306821 1,000.00 12/31/1997
60 Putnam VT G&I 0.17% 1,001.71 11.422706 1,000.00 12/31/1997
61 Putman VT New Value -1.13% 988.70 10.379438 1,000.00 12/31/1997
62 Putnam VT Vista 50.77% 1,507.73 17.797452 1,000.00 12/31/1997
63 Putnam VT Int'l Growth 57.92% 1,579.17 18.522808 1,000.00 12/31/1997
64 Putnam VT Int'l New Opportunities 100.15% 2,001.53 22.858952 1,000.00 12/31/1997
65 Fanklin Small Cap (1) 3/1/1999
66 Templeton Growth Securities (1) 3/2/1999
67 Templeton International Securities 21.95% 1,219.49 11.157985 1,000.00 9/21/1998
68 Templeton Developing Markets Securities 51.89% 1,518.91 11.479237 1,000.00 9/21/1998
69 Mutual Shares Securities 11.85% 1,118.45 10.413095 1,000.00 5/1/1998
71 Fidelity VIP Growth 35.57% 1,355.70 17.780613 1,000.00 2/17/1998
72 Fidelity VIP II Contrafund 22.58% 1,225.79 15.235791 1,000.00 2/17/1998
73 Fidelity VIP III Growth Opportunities 2.78% 1,027.83 12.142823 1,000.00 2/17/1998
75 Fidelity VIP III Growth & Income 7.66% 1,076.61 13.198268 1,000.00 2/17/1998
76 Fidelity VIP Equity-Income 4.89% 1,048.88 11.196008 1,000.00 2/17/1998
99 Franklin Large Cap Growth Securities (1) 3/1/1999
140 American Century VP Income & Growth (1) 11/19/1999
141 American Century VP Int'l (1) 11/19/1999
142 American Century VP Value (1) 11/19/1999
160 Dreyfus Stock Index (1) 11/19/1999
161 Dreyfus VIF Disciplined Stock (1) 11/19/1999
162 Dreyfus VIF Capital Appreciation (1) 11/19/1999
180 INVESCO VIF Dynamics (1) 11/19/1999
181 INVESCO VIF High Yield (1) 11/19/1999
210 PIMCO High Yield Bond (1) 11/19/1999
211 PIMCO Low Duration Bond (1) 11/19/1999
212 PIMCO StockPLUS G&I (1) 11/19/1999
213 PIMCO Total Return Bond (1) 11/19/1999
230 Scudder Int'l (1) 11/19/1999
(1) Sub-account has not been in existence for 1 year.
Cova Variable Annuity Account Five
Standard Inception to Date Return Data
As of 12/31/99
Sub-Account Transaction Amount Unit Unit Balance Transaction Unit
Value Before Units Balance
Transaction After
Transaction
6 Cova Lord Abbett G&I
1/8/1999 purchase 1,000.00 35.903763 - 27.8522 27.8522
12/31/1999 annual fee 39.456973 27.8522 - 27.8522
12/31/1999 surrender fee 39.456973 27.8522 - 27.8522
8 Cova Bond Debenture
5/20/1996 purchase 1,000.00 10.146329 - 98.5578 98.5578
5/20/1997 annual fee 11.758378 98.5578 - 98.5578
5/20/1998 annual fee 13.473825 98.5578 - 98.5578
5/20/1999 annual fee 13.526840 98.5578 - 98.5578
12/31/1999 annual fee 13.765395 98.5578 - 98.5578
12/31/1999 surrender fee 13.765395 98.5578 - 98.5578
9 GACC Money Market
12/4/1997 purchase 1,000.00 10.630827 - 94.0661 94.0661
12/4/1998 annual fee 11.081985 94.0661 - 94.0661
12/6/1999 annual fee 11.489330 - 94.0661
12/31/1999 annual fee 11.525403 94.0661 - 94.0661
12/31/1999 surrender fee 11.525403 94.0661 - 94.0661
11 Cova Developing Growth
11/7/1997 purchase 1,000.00 10.830839 - 92.3290 92.3290
11/7/1998 annual fee 9.967264 92.3290 - 92.3290
11/8/1999 annual fee 12.101957 92.3290 - 92.3290
12/31/1999 annual fee 14.452893 92.3290 - 92.3290
12/31/1999 surrender fee 14.452893 92.3290 - 92.3290
12 Cova Large Cap Research
2/17/1998 purchase 1,000.00 10.756077 - 92.9707 92.9707
2/17/1999 annual fee 11.579471 92.9707 - 92.9707
12/31/1999 annual fee 14.635794 92.9707 - 92.9707
12/31/1999 surrender fee 14.635794 92.9707 - 92.9707
13 Cova Mid-Cap Value
11/7/1997 purchase 1,000.00 10.048781 - 99.5146 99.5146
11/7/1998 annual fee 10.358485 99.5146 - 99.5146
11/8/1999 annual fee 10.875543 99.5146 - 99.5146
12/31/1999 surrender fee 10.875543 99.5146 - 99.5146
15 Cova Quality Bond
5/20/1996 purchase 1,000.00 9.951189 - 100.4905 100.4905
5/20/1997 annual fee 10.440361 100.4905 - 100.4905
5/20/1998 annual fee 11.413235 100.4905 - 100.4905
5/20/1999 annual fee 11.662580 100.4905 - 100.4905
12/31/1999 annual fee 11.567172 100.4905 - 100.4905
12/31/1999 surrender fee 11.567172 100.4905 - 100.4905
16 Cova Small Cap Stock
5/15/1996 purchase 1,000.00 10.905675 - 91.6954 91.6954
5/15/1997 annual fee 10.995232 91.6954 - 91.6954
5/15/1998 annual fee 14.699217 91.6954 - 91.6954
5/17/1999 annual fee 12.606262 91.6954 - 91.6954
12/31/1999 annual fee 17.932499 91.6954 - 91.6954
12/31/1999 surrender fee 17.932499 91.6954 - 91.6954
17 Cova Large Cap Stock
5/16/1996 purchase 1,000.00 10.155238 - 98.4714 98.4714
5/16/1997 annual fee 12.753841 98.4714 - 98.4714
5/18/1998 annual fee 17.363858 98.4714 - 98.4714
5/17/1999 annual fee 20.716290 98.4714 - 98.4714
12/31/1999 annual fee 22.548971 98.4714 - 98.4714
12/31/1999 surrender fee 22.548971 98.4714 - 98.4714
18 Cova Select Equity
5/15/1996 purchase 1,000.00 10.151958 - 98.5032 98.5032
5/15/1997 annual fee 12.101835 98.5032 - 98.5032
5/15/1998 annual fee 16.090569 98.5032 - 98.5032
5/17/1999 annual fee 17.851686 98.5032 - 98.5032
12/31/1999 annual fee 18.384684 98.5032 - 98.5032
12/31/1999 surrender fee 18.384684 98.5032 - 98.5032
19 Cova Int'l Equity
5/14/1996 purchase 1,000.00 10.098675 - 99.0229 99.0229
5/14/1997 annual fee 11.696691 99.0229 - 99.0229
5/14/1998 annual fee 13.129981 99.0229 - 99.0229
5/14/1999 annual fee 12.963950 99.0229 - 99.0229
12/31/1999 annual fee 16.333932 99.0229 - 99.0229
12/31/1999 surrender fee 16.333932 99.0229 - 99.0229
24 Russell Multi-Style Equity
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 12.694810 100.0000 - 100.0000
12/31/1999 annual fee 14.719616 100.0000 - 100.0000
12/31/1999 surrender fee 14.719616 100.0000 - 100.0000
25 Russell Aggressive Equity
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 9.963254 100.0000 - 100.0000
12/31/1999 annual fee 10.461908 100.0000 - 100.0000
12/31/1999 surrender fee 10.461908 100.0000 - 100.0000
26 Russell Non-U.S.
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 11.142092 100.0000 - 100.0000
12/31/1999 annual fee 14.706241 100.0000 - 100.0000
12/31/1999 surrender fee 14.706241 100.0000 - 100.0000
27 Russell Core Bond
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 10.591175 100.0000 - 100.0000
12/31/1999 annual fee 10.419502 100.0000 - 100.0000
12/31/1999 surrender fee 10.419502 100.0000 - 100.0000
28 Russell Real Estate Securities
7/1/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 9.395293 100.0000 - 100.0000
12/31/1999 surrender fee 9.395293 100.0000 - 100.0000
30 AIM V.I. Value
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 13.060203 100.0000 - 100.0000
12/31/1999 annual fee 16.748633 100.0000 - 100.0000
12/31/1999 surrender fee 16.748633 100.0000 - 100.0000
31 AIM V.I. Capital Appreciation
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 11.770729 100.0000 - 100.0000
12/31/1999 annual fee 16.827440 100.0000 - 100.0000
12/31/1999 surrender fee 16.827440 100.0000 - 100.0000
32 AIM V.I. Int'l Equity
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 11.391449 100.0000 - 100.0000
12/31/1999 annual fee 17.458837 100.0000 - 100.0000
12/31/1999 surrender fee 17.458837 100.0000 - 100.0000
35 Alliance Premier Growth
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 14.595485 100.0000 - 100.0000
12/31/1999 annual fee 19.075994 100.0000 - 100.0000
12/31/1999 surrender fee 19.075994 100.0000 - 100.0000
36 Alliance Real Estate Investment
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 7.988435 100.0000 - 100.0000
12/31/1999 annual fee 7.486033 100.0000 - 100.0000
12/31/1999 surrender fee 7.486033 100.0000 - 100.0000
39 Liberty Newport Tiger, Variable Series
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 9.228765 100.0000 - 100.0000
12/31/1999 annual fee 15.397535 100.0000 - 100.0000
12/31/1999 surrender fee 15.397535 100.0000 - 100.0000
40 Goldman Sachs G&I
3/31/1998 purchase 1,000.00 11.212646 - 89.1850 89.1850
3/31/1999 annual fee 9.987823 89.1850 - 89.1850
12/31/1999 annual fee 10.302541 89.1850 - 89.1850
12/31/1999 surrender fee 10.302541 89.1850 - 89.1850
41 Goldman Sachs Int'l Equity
3/31/1998 purchase 1,000.00 11.199710 - 89.2880 89.2880
3/31/1999 annual fee 11.253877 89.2880 - 89.2880
12/31/1999 annual fee 14.844433 89.2880 - 89.2880
12/31/1999 surrender fee 14.844433 89.2880 - 89.2880
42 Goldman Sachs Global Income
3/31/1998 purchase 1,000.00 10.152000 - 98.5028 98.5028
3/31/1999 purchase 10.695661 98.5028 - 98.5028
12/31/1999 annual fee 10.556976 98.5028 - 98.5028
12/31/1999 surrender fee 10.556976 98.5028 - 98.5028
43 Templeton Global Income Securities
3/1/1999 purchase 1,000.00 10.050717 - 99.4954 99.4954
12/31/1999 annual fee 9.681844 99.4954 - 99.4954
12/31/1999 surrender fee 9.681844 99.4954 - 99.4954
44 Kemper Dreman High Return
5/15/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
5/15/1999 annual fee 10.887804 100.0000 - 100.0000
12/31/1999 annual fee 9.270000 100.0000 - 100.0000
12/31/1999 surrender fee 9.270000 100.0000 - 100.0000
45 Kemper Small Cap Growth
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 11.676086 100.0000 - 100.0000
12/31/1999 annual fee 15.505196 100.0000 - 100.0000
12/31/1999 surrender fee 15.505196 100.0000 - 100.0000
46 Kemper Small Cap Value
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 8.753222 100.0000 - 100.0000
12/31/1999 annual fee 8.886027 100.0000 - 100.0000
12/31/1999 surrender fee 8.886027 100.0000 - 100.0000
47 Kemper Government Securities
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 10.556498 100.0000 - 100.0000
12/31/1999 annual fee 10.558404 100.0000 - 100.0000
12/31/1999 surrender fee 10.558404 100.0000 - 100.0000
48 MFS Bond
5/15/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
5/15/1999 annual fee 10.372959 100.0000 - 100.0000
12/31/1999 annual fee 10.288000 100.0000 - 100.0000
12/31/1999 surrender fee 10.288000 100.0000 - 100.0000
49 MFS Research
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 12.172796 100.0000 - 100.0000
12/31/1999 annual fee 14.897867 100.0000 - 100.0000
12/31/1999 surrender fee 14.897867 100.0000 - 100.0000
50 MFS Growth with Income
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 12.066568 100.0000 - 100.0000
12/31/1999 annual fee 12.703932 100.0000 - 100.0000
12/31/1999 surrender fee 12.703932 100.0000 - 100.0000
51 MFS Emerging Growth
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 13.233235 100.0000 - 100.0000
12/31/1999 annual fee 23.079105 100.0000 - 100.0000
12/31/1999 surrender fee 23.079105 100.0000 - 100.0000
52 MFS / F&C Emerging Markets Equity
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 6.571830 100.0000 - 100.0000
12/31/1999 annual fee 8.967637 100.0000 - 100.0000
12/31/1999 surrender fee 8.967637 100.0000 - 100.0000
53 MFS High Income
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 9.845193 100.0000 - 100.0000
12/31/1999 annual fee 10.352934 100.0000 - 100.0000
12/31/1999 surrender fee 10.352934 100.0000 - 100.0000
54 MFS Global Governments
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 10.669943 100.0000 - 100.0000
12/31/1999 annual fee 10.252619 100.0000 - 100.0000
12/31/1999 surrender fee 10.252619 100.0000 - 100.0000
55 Oppenheimer Capital Appreciation
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 12.232731 100.0000 - 100.0000
12/31/1999 annual fee 17.103249 100.0000 - 100.0000
12/31/1999 surrender fee 17.103249 100.0000 - 100.0000
56 Oppenheimer Main Street G&I
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 10.326519 100.0000 - 100.0000
12/31/1999 annual fee 12.409773 100.0000 - 100.0000
12/31/1999 surrender fee 12.409773 100.0000 - 100.0000
57 Oppenheimer High Income
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 9.893828 100.0000 - 100.0000
12/31/1999 annual fee 10.189165 100.0000 - 100.0000
12/31/1999 surrender fee 10.189165 100.0000 - 100.0000
58 Oppenheimer Bond
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 9.893828 100.0000 - 100.0000
12/31/1999 annual fee 10.246949 100.0000 - 100.0000
12/31/1999 surrender fee 10.246949 100.0000 - 100.0000
59 Oppenheimer Strategic Bond
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 10.151332 100.0000 - 100.0000
12/31/1999 annual fee 10.306821 100.0000 - 100.0000
12/31/1999 surrender fee 10.306821 100.0000 - 100.0000
60 Putnam VT G&I
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 11.382650 100.0000 - 100.0000
12/31/1999 annual fee 11.422706 100.0000 - 100.0000
12/31/1999 surrender fee 11.422706 100.0000 - 100.0000
61 Putman VT New Value
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 10.483517 100.0000 - 100.0000
12/31/1999 annual fee 10.379438 100.0000 - 100.0000
12/31/1999 surrender fee 10.379438 100.0000 - 100.0000
62 Putnam VT Vista
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 11.785702 100.0000 - 100.0000
12/31/1999 annual fee 17.797452 100.0000 - 100.0000
12/31/1999 surrender fee 17.797452 100.0000 - 100.0000
63 Putnam VT Int'l Growth
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 11.707003 100.0000 - 100.0000
12/31/1999 annual fee 18.522808 100.0000 - 100.0000
12/31/1999 surrender fee 18.522808 100.0000 - 100.0000
64 Putnam VT Int'l New Opportunities
12/31/1997 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1998 annual fee 11.402252 100.0000 - 100.0000
12/31/1999 annual fee 22.858952 100.0000 - 100.0000
12/31/1999 surrender fee 22.858952 100.0000 - 100.0000
65 Franklin Small Cap
3/1/1999 purchase 1,000.00 8.646100 - 115.6591 115.6591
12/31/1999 annual fee 17.679923 115.6591 - 115.6591
12/31/1999 surrender fee 17.679923 115.6591 - 115.6591
66 Templeton Growth Securities
3/2/1999 purchase 1,000.00 10.025713 - 99.7435 99.7435
12/31/1999 annual fee 12.557918 99.7435 - 99.7435
12/31/1999 surrender fee 12.557918 99.7435 - 99.7435
67 Templeton International Securities
9/21/1998 purchase 1,000.00 7.893131 - 126.6924 126.6924
9/21/1999 annual fee 9.858587 126.6924 - 126.6924
12/31/1999 annual fee 11.157985 126.6924 - 126.6924
12/31/1999 surrender fee 11.157985 126.6924 - 126.6924
68 Templeton Developing Markets Securities
9/21/1998 purchase 1,000.00 5.645520 - 177.1316 177.1316
9/21/1999 annual fee 9.132548 177.1316 - 177.1316
12/31/1999 annual fee 11.479237 177.1316 - 177.1316
12/31/1999 surrender fee 11.479237 177.1316 - 177.1316
69 Mutual Shares Securities
9/21/1998 purchase 1,000.00 8.312657 - 120.2985 120.2985
9/21/1999 annual fee 9.915712 120.2985 - 120.2985
12/31/1999 annual fee 10.413095 120.2985 - 120.2985
12/31/1999 surrender fee 10.413095 120.2985 - 120.2985
71 Fidelity VIP Growth
2/17/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
2/17/1999 annual fee 13.296297 100.0000 - 100.0000
12/31/1999 annual fee 17.780613 100.0000 - 100.0000
12/31/1999 surrender fee 17.780613 100.0000 - 100.0000
72 Fidelity VIP II Contrafund
2/17/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
2/17/1999 annual fee 12.429231 100.0000 - 100.0000
12/31/1999 annual fee 15.235791 100.0000 - 100.0000
12/31/1999 surrender fee 15.235791 100.0000 - 100.0000
73 Fidelity VIP III Growth Opportunities
2/17/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
2/17/1999 annual fee 11.255274 100.0000 - 100.0000
12/31/1999 annual fee 12.142823 100.0000 - 100.0000
12/31/1999 surrender fee 12.142823 100.0000 - 100.0000
75 Fidelity VIP III Growth & Income
2/17/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
2/17/1999 annual fee 12.066871 100.0000 - 100.0000
12/31/1999 annual fee 13.198268 100.0000 - 100.0000
12/31/1999 surrender fee 13.198268 100.0000 - 100.0000
76 Fidelity VIP Equity-Income
2/17/1998 purchase 1,000.00 10.000000 - 100.0000 100.0000
2/17/1999 annual fee 10.322067 100.0000 - 100.0000
12/31/1999 annual fee 11.196008 100.0000 - 100.0000
12/31/1999 surrender fee 11.196008 100.0000 - 100.0000
99 Franklin Large Cap Growth Securities
3/1/1999 purchase 1,000.00 10.985852 - 91.0262 91.0262
12/31/1999 annual fee 14.307568 91.0262 - 91.0262
12/31/1999 surrender fee 14.307568 91.0262 - 91.0262
140 American Century VP Income & Growth
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 10.324878 100.0000 - 100.0000
12/31/1999 surrender fee 10.324878 100.0000 - 100.0000
141 American Century VP Int'l
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 12.517000 100.0000 - 100.0000
12/31/1999 surrender fee 12.517000 100.0000 - 100.0000
142 American Century VP Value
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 9.586953 100.0000 - 100.0000
12/31/1999 surrender fee 9.586953 100.0000 - 100.0000
160 Dreyfus Stock Index
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 10.336000 100.0000 - 100.0000
12/31/1999 surrender fee 10.336000 100.0000 - 100.0000
161 Dreyfus VIF Disciplined Stock
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 10.306000 100.0000 - 100.0000
12/31/1999 surrender fee 10.306000 100.0000 - 100.0000
162 Dreyfus VIF Capital Appreciation
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 10.128000 100.0000 - 100.0000
12/31/1999 surrender fee 10.128000 100.0000 - 100.0000
180 INVESCO VIF Dynamics
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 11.148744 100.0000 - 100.0000
12/31/1999 surrender fee 11.148744 100.0000 - 100.0000
181 INVESCO VIF High Yield
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 10.122749 100.0000 - 100.0000
12/31/1999 surrender fee 10.122749 100.0000 - 100.0000
210 PIMCO High Yield Bond
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 10.078000 100.0000 - 100.0000
12/31/1999 surrender fee 10.078000 100.0000 - 100.0000
211 PIMCO Low Duration Bond
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 9.969000 100.0000 - 100.0000
12/31/1999 surrender fee 9.969000 100.0000 - 100.0000
212 PIMCO StockPLUS G&I
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 10.311000 100.0000 - 100.0000
12/31/1999 surrender fee 10.311000 100.0000 - 100.0000
213 PIMCO Total Return Bond
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 9.898482 100.0000 - 100.0000
12/31/1999 surrender fee 9.898482 100.0000 - 100.0000
230 Scudder Int'l
11/19/1999 purchase 1,000.00 10.000000 - 100.0000 100.0000
12/31/1999 annual fee 11.637458 100.0000 - 100.0000
12/31/1999 surrender fee 11.637458 100.0000 - 100.0000
Cova Variable Annuity Account Five
Standard Since Inception Returns
12/31/1999
Sub-Account Annualized Account 12/31/1999 Initial Inception
Inception Value AUV Investment Date
Return
6 Cova Lord Abbett G&I (1) 9.90% 1,098.96 39.456973 1,000.00 1/8/1999
8 Cova Bond Debenture 8.80% 1,356.69 13.765395 1,000.00 5/20/1996
9 GACC Money Market 3.97% 1,084.15 11.525403 1,000.00 12/4/1997
11 Cova Developing Growth 14.38% 1,334.42 14.452893 1,000.00 11/7/1997
12 Cova Large Cap Research 17.92% 1,360.70 14.635794 1,000.00 2/17/1998
13 Cova Mid-Cap Value 3.75% 1,082.28 10.875543 1,000.00 11/7/1997
15 Cova Quality Bond 4.25% 1,162.39 11.567172 1,000.00 5/20/1996
16 Cova Small Cap Stock 14.68% 1,644.33 17.932499 1,000.00 5/15/1996
17 Cova Large Cap Stock 24.60% 2,220.43 22.548971 1,000.00 5/16/1996
18 Cova Select Equity 17.77% 1,810.95 18.384684 1,000.00 5/15/1996
19 Cova Int'l Equity 14.15% 1,617.43 16.333932 1,000.00 5/14/1996
24 Russell Multi-Style Equity 21.32% 1,471.96 14.719616 1,000.00 12/31/1997
25 Russell Aggressive Equity 2.28% 1,046.19 10.461908 1,000.00 12/31/1997
26 Russell Non-U.S. 21.27% 1,470.62 14.706241 1,000.00 12/31/1997
27 Russell Core Bond 2.08% 1,041.95 10.419502 1,000.00 12/31/1997
28 Russell Real Estate Securities (1) -6.05% 939.53 9.395293 1,000.00 7/1/1999
30 AIM V.I. Value 29.42% 1,674.86 16.748633 1,000.00 12/31/1997
31 AIM V.I. Capital Appreciation 29.72% 1,682.74 16.827440 1,000.00 12/31/1997
32 AIM V.I. Int'l Equity 32.13% 1,745.88 17.458837 1,000.00 12/31/1997
35 Alliance Premier Growth 38.12% 1,907.60 19.075994 1,000.00 12/31/1997
36 Alliance Real Estate Investment -13.48% 748.60 7.486033 1,000.00 12/31/1997
39 Liberty Newport Tiger, Variable Series 24.09% 1,539.75 15.397535 1,000.00 12/31/1997
40 Goldman Sachs G&I -4.71% 918.83 10.302541 1,000.00 3/31/1998
41 Goldman Sachs Int'l Equity 17.43% 1,325.43 14.844433 1,000.00 3/31/1998
42 Goldman Sachs Global Income 2.26% 1,039.89 10.556976 1,000.00 3/31/1998
43 Templeton Global Income Securities (1) -3.67% 963.30 9.681844 1,000.00 3/1/1999
44 Kemper Dreman High Return -4.54% 927.00 9.270000 1,000.00 5/15/1998
45 Kemper Small Cap Growth 24.52% 1,550.52 15.505196 1,000.00 12/31/1997
46 Kemper Small Cap Value -5.73% 888.60 8.886027 1,000.00 12/31/1997
47 Kemper Government Securities 2.75% 1,055.84 10.558404 1,000.00 12/31/1997
48 MFS Bond 1.76% 1,028.80 10.288000 1,000.00 5/15/1998
49 MFS Research 22.06% 1,489.79 14.897867 1,000.00 12/31/1997
50 MFS Growth with Income 12.71% 1,270.39 12.703932 1,000.00 12/31/1997
51 MFS Emerging Growth 51.92% 2,307.91 23.079105 1,000.00 12/31/1997
52 MFS / F&C Emerging Markets Equity -5.30% 896.76 8.967637 1,000.00 12/31/1997
53 MFS High Income 1.75% 1,035.29 10.352934 1,000.00 12/31/1997
54 MFS Global Governments 1.26% 1,025.26 10.252619 1,000.00 12/31/1997
55 Oppenheimer Capital Appreciation 30.78% 1,710.32 17.103249 1,000.00 12/31/1997
56 Oppenheimer Main Street G&I 11.40% 1,240.98 12.409773 1,000.00 12/31/1997
57 Oppenheimer High Income 0.94% 1,018.92 10.189165 1,000.00 12/31/1997
58 Oppenheimer Bond 1.23% 1,024.69 10.246949 1,000.00 12/31/1997
59 Oppenheimer Strategic Bond 1.52% 1,030.68 10.306821 1,000.00 12/31/1997
60 Putnam VT G&I 6.88% 1,142.27 11.422706 1,000.00 12/31/1997
61 Putman VT New Value 1.88% 1,037.94 10.379438 1,000.00 12/31/1997
62 Putnam VT Vista 33.41% 1,779.75 17.797452 1,000.00 12/31/1997
63 Putnam VT Int'l Growth 36.10% 1,852.28 18.522808 1,000.00 12/31/1997
64 Putnam VT Int'l New Opportunities 51.19% 2,285.90 22.858952 1,000.00 12/31/1997
65 Franklin Small Cap (1) 104.48% 2,044.84 17.679923 1,000.00 3/1/1999
66 Templeton Growth Securities (1) 25.26% 1,252.57 12.557918 1,000.00 3/2/1999
67 Templeton International Securities 31.15% 1,413.63 11.157985 1,000.00 9/21/1998
68 Templeton Developing Markets Securities 74.34% 2,033.34 11.479237 1,000.00 9/21/1998
69 Mutual Shares Securities 25.27% 1,252.68 10.413095 1,000.00 9/21/1998
71 Fidelity VIP Growth 36.07% 1,778.06 17.780613 1,000.00 2/17/1998
72 Fidelity VIP II Contrafund 25.28% 1,523.58 15.235791 1,000.00 2/17/1998
73 Fidelity VIP III Growth Opportunities 10.95% 1,214.28 12.142823 1,000.00 2/17/1998
75 Fidelity VIP III Growth & Income 16.01% 1,319.83 13.198268 1,000.00 2/17/1998
76 Fidelity VIP Equity-Income 6.23% 1,119.60 11.196008 1,000.00 2/17/1998
99 Franklin Large Cap Growth Securities (1) 30.24% 1,302.36 14.307568 1,000.00 3/1/1999
140 American Century VP Income & Growth (1) 3.25% 1,032.49 10.324878 1,000.00 11/19/1999
141 American Century VP Int'l (1) 25.17% 1,251.70 12.517000 1,000.00 11/19/1999
142 American Century VP Value (1) -4.13% 958.70 9.586953 1,000.00 11/19/1999
160 Dreyfus Stock Index (1) 3.36% 1,033.60 10.336000 1,000.00 11/19/1999
161 Dreyfus VIF Disciplined Stock (1) 3.06% 1,030.60 10.306000 1,000.00 11/19/1999
162 Dreyfus VIF Capital Appreciation (1) 1.28% 1,012.80 10.128000 1,000.00 11/19/1999
180 INVESCO VIF Dynamics (1) 11.49% 1,114.87 11.148744 1,000.00 11/19/1999
181 INVESCO VIF High Yield (1) 1.23% 1,012.27 10.122749 1,000.00 11/19/1999
210 PIMCO High Yield Bond (1) 0.78% 1,007.80 10.078000 1,000.00 11/19/1999
211 PIMCO Low Duration Bond (1) -0.31% 996.90 9.969000 1,000.00 11/19/1999
212 PIMCO StockPLUS G&I (1) 3.11% 1,031.10 10.311000 1,000.00 11/19/1999
213 PIMCO Total Return Bond (1) -1.02% 989.85 9.898482 1,000.00 11/19/1999
230 Scudder Int'l (1) 16.38% 1,163.75 11.637458 1,000.00 11/19/1999
(1) Returns are not annualized for sub-accounts in existence less than 1 year.
Cova Variable Annuity Account Five
Standard 1 Year Return Data
As of 12/31/99
Sub-Account T Account Account
Value Value
Before After
Transaction Transaction
6 Cova Lord Abbett G&I
12/31/1998 p - #DIV/0!
12/31/1999 a #DIV/0! #DIV/0!
12/31/1999 s #DIV/0! #DIV/0!
8 Cova Bond Debenture
12/31/1998 p - 1,000.00
12/31/1999 a 1,019.92 1,018.90
12/31/1999 s 1,018.90 973.90
9 GACC Money Market
12/31/1998 p - 1,000.00
12/31/1999 a 1,037.39 1,036.36
12/31/1999 s 1,036.36 991.36
11 Cova Developing Growth
12/31/1998 p - 1,000.00
12/31/1999 a 1,305.84 1,304.53
12/31/1999 s 1,304.53 1,259.53
12 Cova Large Cap Research
12/31/1998 p - 1,000.00
12/31/1999 a 1,237.63 1,236.39
12/31/1999 s 1,236.39 1,191.39
13 Cova Mid-Cap Value
12/31/1998 p - 1,000.00
12/31/1999 a 1,041.92 1,040.88
12/31/1999 s 1,040.88 995.88
15 Cova Quality Bond
12/31/1998 p - 1,000.00
12/31/1999 a 970.85 969.88
12/31/1999 s 969.88 924.88
16 Cova Small Cap Stock
12/31/1998 p - 1,000.00
12/31/1999 a 1,425.15 1,423.72
12/31/1999 s 1,423.72 1,378.72
17 Cova Large Cap Stock
12/31/1998 p - 1,000.00
12/31/1999 a 1,160.61 1,159.45
12/31/1999 s 1,159.45 1,114.45
18 Cova Select Equity
12/31/1998 p - 1,000.00
12/31/1999 a 1,082.27 1,081.19
12/31/1999 s 1,081.19 1,036.19
19 Cova Int'l Equity
12/31/1998 p - 1,000.00
12/31/1999 a 1,267.25 1,265.97
12/31/1999 s 1,265.97 1,220.97
24 Russell Multi-Style Equity
12/31/1998 p - 1,000.00
12/31/1999 a 1,155.38 1,154.22
12/31/1999 s 1,154.22 1,109.22
25 Russell Aggressive Equity
12/31/1998 p - 1,000.00
12/31/1999 a 1,046.06 1,045.01
12/31/1999 s 1,045.01 1,000.01
26 Russell Non-U.S.
12/31/1998 p - 1,000.00
12/31/1999 a 1,315.08 1,313.76
12/31/1999 s 1,313.76 1,268.76
27 Russell Core Bond
12/31/1998 p - 1,000.00
12/31/1999 a 980.09 979.11
12/31/1999 s 979.11 934.11
28 Russell Real Estate Securities
12/31/1998 p - #DIV/0!
12/31/1999 a #DIV/0! #DIV/0!
12/31/1999 s #DIV/0! #DIV/0!
30 AIM V.I. Value
12/31/1998 p - 1,000.00
12/31/1999 a 1,280.91 1,279.63
12/31/1999 s 1,279.63 1,234.63
31 AIM V.I. Capital Appreciation
12/31/1998 p - 1,000.00
12/31/1999 a 1,426.04 1,424.61
12/31/1999 s 1,424.61 1,379.61
32 AIM V.I. Int'l Equity
12/31/1998 p - 1,000.00
12/31/1999 a 1,529.00 1,527.47
12/31/1999 s 1,527.47 1,482.47
35 Alliance Premier Growth
12/31/1998 p - 1,000.00
12/31/1999 a 1,304.74 1,303.44
12/31/1999 s 1,303.44 1,258.44
36 Alliance Real Estate Investment
12/31/1998 p - 1,000.00
12/31/1999 a 935.69 934.75
12/31/1999 s 934.75 889.75
39 Liberty Newport Tiger, Variable Series
12/31/1998 p - 1,000.00
12/31/1999 a 1,659.43 1,657.77
12/31/1999 s 1,657.77 1,612.77
40 Goldman Sachs G&I
12/31/1998 p - 1,000.00
12/31/1999 a 1,039.43 1,038.39
12/31/1999 s 1,038.39 993.39
41 Goldman Sachs Int'l Equity
12/31/1998 p - 1,000.00
12/31/1999 a 1,300.23 1,298.93
12/31/1999 s 1,298.93 1,253.93
42 Goldman Sachs Global Income
12/31/1998 p - 1,000.00
12/31/1999 a 976.11 975.13
12/31/1999 s 975.13 930.13
44 Kemper Dreman High Return
12/31/1998 p - 1,000.00
12/31/1999 a 883.78 882.90
12/31/1999 s 882.90 837.90
45 Kemper Small Cap Growth
12/31/1998 p - 1,000.00
12/31/1999 a 1,326.61 1,325.28
12/31/1999 s 1,325.28 1,280.28
46 Kemper Small Cap Value
12/31/1998 p - 1,000.00
12/31/1999 a 1,013.19 1,012.18
12/31/1999 s 1,012.18 967.18
47 Kemper Government Securities
12/31/1998 p - 1,000.00
12/31/1999 a 992.83 991.84
12/31/1999 s 991.84 946.84
48 MFS Bond
12/31/1998 p - 1,000.00
12/31/1999 a 978.97 977.99
12/31/1999 s 977.99 932.99
49 MFS Research
12/31/1998 p - 1,000.00
12/31/1999 a 1,223.23 1,222.01
12/31/1999 s 1,222.01 1,177.01
50 MFS Growth with Income
12/31/1998 p - 1,000.00
12/31/1999 a 1,052.08 1,051.03
12/31/1999 s 1,051.03 1,006.03
51 MFS Emerging Growth
12/31/1998 p - 1,000.00
12/31/1999 a 1,742.59 1,740.85
12/31/1999 s 1,740.85 1,695.85
52 MFS / F&C Emerging Markets Equity
12/31/1998 p - 1,000.00
12/31/1999 a 1,362.50 1,361.14
12/31/1999 s 1,361.14 1,316.14
53 MFS High Income
12/31/1998 p - 1,000.00
12/31/1999 a 1,049.66 1,048.61
12/31/1999 s 1,048.61 1,003.61
54 MFS Global Governments
12/31/1998 p - 1,000.00
12/31/1999 a 961.47 960.51
12/31/1999 s 960.51 915.51
55 Oppenheimer Capital Appreciation
12/31/1998 p - 1,000.00
12/31/1999 a 1,396.86 1,395.46
12/31/1999 s 1,395.46 1,350.46
56 Oppenheimer Main Street G&I
12/31/1998 p - 1,000.00
12/31/1999 a 1,200.14 1,198.94
12/31/1999 s 1,198.94 1,153.94
57 Oppenheimer High Income
12/31/1998 p - 1,000.00
12/31/1999 a 1,028.39 1,027.36
12/31/1999 s 1,027.36 982.36
58 Oppenheimer Bond
12/31/1998 p - 1,000.00
12/31/1999 a 971.12 970.15
12/31/1999 s 970.15 925.15
59 Oppenheimer Strategic Bond
12/31/1998 p - 1,000.00
12/31/1999 a 1,013.97 1,012.96
12/31/1999 s 1,012.96 967.96
60 Putnam VT G&I
12/31/1998 p - 1,000.00
12/31/1999 a 1,001.71 1,000.71
12/31/1999 s 1,000.71 955.71
61 Putman VT New Value
12/31/1998 p - 1,000.00
12/31/1999 a 988.70 987.71
12/31/1999 s 987.71 942.71
62 Putnam VT Vista
12/31/1998 p - 1,000.00
12/31/1999 a 1,507.73 1,506.23
12/31/1999 s 1,506.23 1,461.22
63 Putnam VT Int'l Growth
12/31/1998 p - 1,000.00
12/31/1999 a 1,579.17 1,577.59
12/31/1999 s 1,577.59 1,532.59
64 Putnam VT Int'l New Opportunities
12/31/1998 p - 1,000.00
12/31/1999 a 2,001.53 1,999.53
12/31/1999 s 1,999.53 1,954.52
67 Templeton International Securities
12/31/1998 p - 1,000.00
12/31/1999 a 1,219.49 1,218.27
12/31/1999 s 1,218.27 1,173.27
68 Templeton Developing Markets Securities
12/31/1998 p - 1,000.00
12/31/1999 a 1,518.91 1,517.39
12/31/1999 s 1,517.39 1,472.39
69 Mutual Shares Securities
12/31/1998 p - 1,000.00
12/31/1999 a 1,118.45 1,117.33
12/31/1999 s 1,117.33 1,072.33
71 Fidelity VIP Growth
12/31/1998 p - 1,000.00
12/31/1999 a 1,355.70 1,354.34
12/31/1999 s 1,354.34 1,309.34
72 Fidelity VIP II Contrafund
12/31/1998 p - 1,000.00
12/31/1999 a 1,225.79 1,224.56
12/31/1999 s 1,224.56 1,179.56
73 Fidelity VIP III Growth Opportunities
12/31/1998 p - 1,000.00
12/31/1999 a 1,027.83 1,026.80
12/31/1999 s 1,026.80 981.80
75 Fidelity VIP III Growth & Income
12/31/1998 p - 1,000.00
12/31/1999 a 1,076.61 1,075.53
12/31/1999 s 1,075.53 1,030.53
76 Fidelity VIP Equity-Income
12/31/1998 p - 1,000.00
12/31/1999 a 1,048.88 1,047.83
12/31/1999 s 1,047.83 1,002.83
99 Franklin Growth Investments
12/31/1998 p - #DIV/0!
12/31/1999 a #DIV/0! #DIV/0!
12/31/1999 s #DIV/0! #DIV/0!
Cova Variable Annuity Account Five
Standard 1 Year Returns
12/31/1999
Sub-Account Days Since
Inception
6 Cova Lord Abbett G&I 357
8 Cova Bond Debenture 1,320
9 GACC Money Market 757
11 Cova Developing Growth 784
12 Cova Large Cap Research 682
13 Cova Mid-Cap Value 784
15 Cova Quality Bond 1,320
16 Cova Small Cap Stock 1,325
17 Cova Large Cap Stock 1,324
18 Cova Select Equity 1,325
19 Cova Int'l Equity 1,326
24 Russell Multi-Style Equity 730
25 Russell Aggressive Equity 730
26 Russell Non-U.S. 730
27 Russell Core Bond 730
28 Russell Real Estate Securities 183
30 AIM V.I. Value 730
31 AIM V.I. Capital Appreciation 730
32 AIM V.I. Int'l Equity 730
35 Alliance Premier Growth 730
36 Alliance Real Estate Investment 730
39 Liberty Newport Tiger, Variable Series 730
40 Goldman Sachs G&I 640
41 Goldman Sachs Int'l Equity 640
42 Goldman Sachs Global Income 640
43 Templeton Global Income Securities 305
44 Kemper Dreman High Return 595
45 Kemper Small Cap Growth 730
46 Kemper Small Cap Value 730
47 Kemper Government Securities 730
48 MFS Bond 595
49 MFS Research 730
50 MFS Growth with Income 730
51 MFS Emerging Growth 730
52 MFS / F&C Emerging Markets Equity 730
53 MFS High Income 730
54 MFS Global Governments 730
55 Oppenheimer Capital Appreciation 730
56 Oppenheimer Main Street G&I 730
57 Oppenheimer High Income 730
58 Oppenheimer Bond 730
59 Oppenheimer Strategic Bond 730
60 Putnam VT G&I 730
61 Putman VT New Value 730
62 Putnam VT Vista 730
63 Putnam VT Int'l Growth 730
64 Putnam VT Int'l New Opportunities 730
65 Franklin Small Cap 305
66 Templeton Growth Securities 304
67 Templeton International Securities 466
68 Templeton Developing Markets Securities 466
69 Mutual Shares Securities 609
71 Fidelity VIP Growth 682
72 Fidelity VIP II Contrafund 682
73 Fidelity VIP III Growth Opportunities 682
75 Fidelity VIP III Growth & Income 682
76 Fidelity VIP Equity-Income 682
99 Franklin Large Cap Growth Securities 305
140 American Century VP Income & Growth 42
141 American Century VP Int'l 42
142 American Century VP Value 42
160 Dreyfus Stock Index 42
161 Dreyfus VIF Disciplined Stock 42
162 Dreyfus VIF Capital Appreciation 42
180 INVESCO VIF Dynamics 42
181 INVESCO VIF High Yield 42
210 PIMCO High Yield Bond 42
211 PIMCO Low Duration Bond 42
212 PIMCO StockPLUS G&I 42
213 PIMCO Total Return Bond 42
230 Scudder Int'l 42
(1)Sub-account has not been in existence for 1
Cova Variable Annuity Account Five
Standard Inception to Date Return Data
As of 12/31/99
Sub-Account T Account Account
Value Value
Before After
Transaction Transaction
6 Cova Lord Abbett G&I
1/8/1999 p - 1,000.00
12/31/1999 a 1,098.96 1,097.86
12/31/1999 s 1,097.86 1,047.86
8 Cova Bond Debenture
5/20/1996 p - 1,000.00
5/20/1997 a 1,158.88 1,157.72
5/20/1998 a 1,326.62 1,325.29
5/20/1999 a 1,330.51 1,329.18
12/31/1999 a 1,352.62 1,351.27
12/31/1999 s 1,351.27 1,306.27
9 GACC Money Market
12/4/1997 p - 1,000.00
12/4/1998 a 1,042.44 1,041.40
12/6/1999 a 1,079.68 1,078.60
12/31/1999 a 1,081.99 1,080.91
12/31/1999 s 1,080.91 1,035.91
11 Cova Developing Growth
11/7/1997 p - 1,000.00
11/7/1998 a 920.27 919.35
11/8/1999 a 1,116.24 1,115.13
12/31/1999 a 1,331.75 1,330.42
12/31/1999 s 1,330.42 1,285.42
12 Cova Large Cap Research
2/17/1998 p - 1,000.00
2/17/1999 a 1,076.55 1,075.47
12/31/1999 a 1,359.33 1,357.97
12/31/1999 s 1,357.97 1,312.97
13 Cova Mid-Cap Value
11/7/1997 p - 1,000.00
11/7/1998 a 1,030.82 1,029.79
11/8/1999 a 1,079.99 1,078.91
12/31/1999 a 1,080.11 1,079.03
12/31/1999 s 1,079.03 1,034.03
15 Cova Quality Bond
5/20/1996 p - 1,000.00
5/20/1997 a 1,049.16 1,048.11
5/20/1998 a 1,145.77 1,144.62
5/20/1999 a 1,169.63 1,168.46
12/31/1999 a 1,158.90 1,157.74
12/31/1999 s 1,157.74 1,112.74
16 Cova Small Cap Stock
5/15/1996 p - 1,000.00
5/15/1997 a 1,008.21 1,007.20
5/15/1998 a 1,346.50 1,345.15
5/17/1999 a 1,153.62 1,152.47
12/31/1999 a 1,639.40 1,637.76
12/31/1999 s 1,637.76 1,592.76
17 Cova Large Cap Stock
5/16/1996 p - 1,000.00
5/16/1997 a 1,255.89 1,254.63
5/18/1998 a 1,708.13 1,706.42
5/17/1999 a 2,035.87 2,033.83
12/31/1999 a 2,213.76 2,211.55
12/31/1999 s 2,211.55 2,166.55
18 Cova Select Equity
5/15/1996 p - 1,000.00
5/15/1997 a 1,192.07 1,190.88
5/15/1998 a 1,583.39 1,581.81
5/17/1999 a 1,754.94 1,753.19
12/31/1999 a 1,805.54 1,803.73
12/31/1999 s 1,803.73 1,758.72
19 Cova Int'l Equity
5/14/1996 p - 1,000.00
5/14/1997 a 1,158.24 1,157.08
5/14/1998 a 1,298.87 1,297.57
5/14/1999 a 1,281.16 1,279.88
12/31/1999 a 1,612.58 1,610.97
12/31/1999 s 1,610.97 1,565.97
24 Russell Multi-Style Equity
12/31/1997 p - 1,000.00
12/31/1998 a 1,269.48 1,268.21
12/31/1999 a 1,470.49 1,469.02
12/31/1999 s 1,469.02 1,424.02
25 Russell Aggressive Equity
12/31/1997 p - 1,000.00
12/31/1998 a 996.33 995.33
12/31/1999 a 1,045.14 1,044.09
12/31/1999 s 1,044.09 999.09
26 Russell Non-U.S.
12/31/1997 p - 1,000.00
12/31/1998 a 1,114.21 1,113.10
12/31/1999 a 1,469.16 1,467.69
12/31/1999 s 1,467.69 1,422.69
27 Russell Core Bond
12/31/1997 p - 1,000.00
12/31/1998 a 1,059.12 1,058.06
12/31/1999 a 1,040.91 1,039.87
12/31/1999 s 1,039.87 994.87
28 Russell Real Estate Securities
7/1/1999 p - 1,000.00
12/31/1999 a 939.53 938.59
12/31/1999 s 938.59 888.59
30 AIM V.I. Value
12/31/1997 p - 1,000.00
12/31/1998 a 1,306.02 1,304.71
12/31/1999 a 1,673.18 1,671.51
12/31/1999 s 1,671.51 1,626.51
31 AIM V.I. Capital Appreciation
12/31/1997 p - 1,000.00
12/31/1998 a 1,177.07 1,175.89
12/31/1999 a 1,681.06 1,679.38
12/31/1999 s 1,679.38 1,634.38
32 AIM V.I. Int'l Equity
12/31/1997 p - 1,000.00
12/31/1998 a 1,139.14 1,138.00
12/31/1999 a 1,744.14 1,742.40
12/31/1999 s 1,742.40 1,697.40
35 Alliance Premier Growth
12/31/1997 p - 1,000.00
12/31/1998 a 1,459.55 1,458.09
12/31/1999 a 1,905.69 1,903.78
12/31/1999 s 1,903.78 1,858.78
36 Alliance Real Estate Investment
12/31/1997 p - 1,000.00
12/31/1998 a 798.84 798.04
12/31/1999 a 747.85 747.10
12/31/1999 s 747.10 702.10
39 Liberty Newport Tiger, Variable Series
12/31/1997 p - 1,000.00
12/31/1998 a 922.88 921.96
12/31/1999 a 1,538.22 1,536.68
12/31/1999 s 1,536.68 1,491.68
40 Goldman Sachs G&I
3/31/1998 p - 1,000.00
3/31/1999 a 890.76 889.87
12/31/1999 a 917.91 916.99
12/31/1999 s 916.99 871.99
41 Goldman Sachs Int'l Equity
3/31/1998 p - 1,000.00
3/31/1999 a 1,004.84 1,003.84
12/31/1999 a 1,324.11 1,322.79
12/31/1999 s 1,322.79 1,277.79
42 Goldman Sachs Global Income
3/31/1998 p - 1,000.00
3/31/1999 p 1,053.55 1,052.50
12/31/1999 a 1,038.86 1,037.82
12/31/1999 s 1,037.82 992.81
43 Templeton Global Income Securities
3/1/1999 p - 1,000.00
12/31/1999 a 963.30 962.34
12/31/1999 s 962.34 912.34
44 Kemper Dreman High Return
5/15/1998 p - 1,000.00
5/15/1999 a 1,088.78 1,087.69
12/31/1999 a 926.07 925.14
12/31/1999 s 925.14 880.14
45 Kemper Small Cap Growth
12/31/1997 p - 1,000.00
12/31/1998 a 1,167.61 1,166.44
12/31/1999 a 1,548.97 1,547.42
12/31/1999 s 1,547.42 1,502.41
46 Kemper Small Cap Value
12/31/1997 p - 1,000.00
12/31/1998 a 875.32 874.44
12/31/1999 a 887.71 886.82
12/31/1999 s 886.82 841.82
47 Kemper Government Securities
12/31/1997 p - 1,000.00
12/31/1998 a 1,055.65 1,054.59
12/31/1999 a 1,054.78 1,053.73
12/31/1999 s 1,053.73 1,008.73
48 MFS Bond
5/15/1998 p - 1,000.00
5/15/1999 a 1,037.30 1,036.26
12/31/1999 a 1,027.77 1,026.74
12/31/1999 s 1,026.74 981.74
49 MFS Research
12/31/1997 p - 1,000.00
12/31/1998 a 1,217.28 1,216.06
12/31/1999 a 1,488.29 1,486.80
12/31/1999 s 1,486.80 1,441.80
50 MFS Growth with Income
12/31/1997 p - 1,000.00
12/31/1998 a 1,206.66 1,205.45
12/31/1999 a 1,269.12 1,267.85
12/31/1999 s 1,267.85 1,222.85
51 MFS Emerging Growth
12/31/1997 p - 1,000.00
12/31/1998 a 1,323.32 1,322.00
12/31/1999 a 2,305.61 2,303.30
12/31/1999 s 2,303.30 2,258.30
52 MFS / F&C Emerging Markets Equity
12/31/1997 p - 1,000.00
12/31/1998 a 657.18 656.52
12/31/1999 a 895.86 894.96
12/31/1999 s 894.96 849.96
53 MFS High Income
12/31/1997 p - 1,000.00
12/31/1998 a 984.52 983.54
12/31/1999 a 1,034.26 1,033.23
12/31/1999 s 1,033.23 988.23
54 MFS Global Governments
12/31/1997 p - 1,000.00
12/31/1998 a 1,066.99 1,065.92
12/31/1999 a 1,024.23 1,023.21
12/31/1999 s 1,023.21 978.21
55 Oppenheimer Capital Appreciation
12/31/1997 p - 1,000.00
12/31/1998 a 1,223.27 1,222.05
12/31/1999 a 1,708.62 1,706.91
12/31/1999 s 1,706.91 1,661.91
56 Oppenheimer Main Street G&I
12/31/1997 p - 1,000.00
12/31/1998 a 1,032.65 1,031.62
12/31/1999 a 1,239.74 1,238.50
12/31/1999 s 1,238.50 1,193.50
57 Oppenheimer High Income
12/31/1997 p - 1,000.00
12/31/1998 a 989.38 988.39
12/31/1999 a 1,017.90 1,016.88
12/31/1999 s 1,016.88 971.88
58 Oppenheimer Bond
12/31/1997 p - 1,000.00
12/31/1998 a 989.38 988.39
12/31/1999 a 1,023.67 1,022.65
12/31/1999 s 1,022.65 977.65
59 Oppenheimer Strategic Bond
12/31/1997 p - 1,000.00
12/31/1998 a 1,015.13 1,014.11
12/31/1999 a 1,029.65 1,028.62
12/31/1999 s 1,028.62 983.62
60 Putnam VT G&I
12/31/1997 p - 1,000.00
12/31/1998 a 1,138.27 1,137.12
12/31/1999 a 1,141.13 1,139.99
12/31/1999 s 1,139.99 1,094.99
61 Putman VT New Value
12/31/1997 p - 1,000.00
12/31/1998 a 1,048.35 1,047.30
12/31/1999 a 1,036.90 1,035.86
12/31/1999 s 1,035.86 990.86
62 Putnam VT Vista
12/31/1997 p - 1,000.00
12/31/1998 a 1,178.57 1,177.39
12/31/1999 a 1,777.96 1,776.18
12/31/1999 s 1,776.18 1,731.18
63 Putnam VT Int'l Growth
12/31/1997 p - 1,000.00
12/31/1998 a 1,170.70 1,169.53
12/31/1999 a 1,850.43 1,848.58
12/31/1999 s 1,848.58 1,803.58
64 Putnam VT Int'l New Opportunities
12/31/1997 p - 1,000.00
12/31/1998 a 1,140.23 1,139.08
12/31/1999 a 2,283.61 2,281.33
12/31/1999 s 2,281.33 2,236.33
65 Franklin Small Cap
3/1/1999 p - 1,000.00
12/31/1999 a 2,044.84 2,042.80
12/31/1999 s 2,042.80 1,992.80
66 Templeton Growth Securities
3/2/1999 p - 1,000.00
12/31/1999 a 1,252.57 1,251.32
12/31/1999 s 1,251.32 1,201.32
67 Templeton International Securities
9/21/1998 p - 1,000.00
9/21/1999 a 1,249.01 1,247.76
12/31/1999 a 1,412.22 1,410.81
12/31/1999 s 1,410.81 1,365.81
68 Templeton Developing Markets Securities
9/21/1998 p - 1,000.00
9/21/1999 a 1,617.66 1,616.56
12/31/1999 a 2,031.95 2,029.92
12/31/1999 s 2,029.92 1,984.92
69 Mutual Shares Securities
9/21/1998 p - 1,000.00
9/21/1999 a 1,192.85 1,191.66
12/31/1999 a 1,251.43 1,250.18
12/31/1999 s 1,250.18 1,205.18
71 Fidelity VIP Growth
2/17/1998 p - 1,000.00
2/17/1999 a 1,329.63 1,328.30
12/31/1999 a 1,776.28 1,774.50
12/31/1999 s 1,774.50 1,729.50
72 Fidelity VIP II Contrafund
2/17/1998 p - 1,000.00
2/17/1999 a 1,242.92 1,241.68
12/31/1999 a 1,522.06 1,520.54
12/31/1999 s 1,520.54 1,475.54
73 Fidelity VIP III Growth Opportunities
2/17/1998 p - 1,000.00
2/17/1999 a 1,125.53 1,124.40
12/31/1999 a 1,213.06 1,211.85
12/31/1999 s 1,211.85 1,166.85
75 Fidelity VIP III Growth & Income
2/17/1998 p - 1,000.00
2/17/1999 a 1,206.69 1,205.48
12/31/1999 a 1,318.50 1,317.18
12/31/1999 s 1,317.18 1,272.18
76 Fidelity VIP Equity-Income
2/17/1998 p - 1,000.00
2/17/1999 a 1,032.21 1,031.18
12/31/1999 a 1,118.48 1,117.36
12/31/1999 s 1,117.36 1,072.36
99 Franklin Large Cap Growth Securities
99 3/1/1999 p - 1,000.00
99 12/31/1999 a 1,302.36 1,301.06
99 12/31/1999 s 1,301.06 1,251.06
140 American Century VP Income & Growth
11/19/1999 p - 1,000.00
12/31/1999 a 1,032.49 1,031.46
12/31/1999 s 1,031.46 981.46
141 American Century VP Int'l
11/19/1999 p - 1,000.00
12/31/1999 a 1,251.70 1,250.45
12/31/1999 s 1,250.45 1,200.45
142 American Century VP Value
11/19/1999 p - 1,000.00
12/31/1999 a 958.70 957.74
12/31/1999 s 957.74 907.74
160 Dreyfus Stock Index
11/19/1999 p - 1,000.00
12/31/1999 a 1,033.60 1,032.57
12/31/1999 s 1,032.57 982.57
161 Dreyfus VIF Disciplined Stock
11/19/1999 p - 1,000.00
12/31/1999 a 1,030.60 1,029.57
12/31/1999 s 1,029.57 979.57
162 Dreyfus VIF Capital Appreciation
11/19/1999 p - 1,000.00
12/31/1999 a 1,012.80 1,011.79
12/31/1999 s 1,011.79 961.79
180 INVESCO VIF Dynamics
11/19/1999 p - 1,000.00
12/31/1999 a 1,114.87 1,113.76
12/31/1999 s 1,113.76 1,063.76
181 INVESCO VIF High Yield
11/19/1999 p - 1,000.00
12/31/1999 a 1,012.27 1,011.26
12/31/1999 s 1,011.26 961.26
210 PIMCO High Yield Bond
11/19/1999 p - 1,000.00
12/31/1999 a 1,007.80 1,006.79
12/31/1999 s 1,006.79 956.79
211 PIMCO Low Duration Bond
11/19/1999 p - 1,000.00
12/31/1999 a 996.90 995.90
12/31/1999 s 995.90 945.90
212 PIMCO StockPLUS G&I
11/19/1999 p - 1,000.00
12/31/1999 a 1,031.10 1,030.07
12/31/1999 s 1,030.07 980.07
213 PIMCO Total Return Bond
11/19/1999 p - 1,000.00
12/31/1999 a 989.85 988.86
12/31/1999 s 988.86 938.86
230 Scudder Int'l
11/19/1999 p - 1,000.00
12/31/1999 a 1,163.75 1,162.59
12/31/1999 s 1,162.59 1,112.59
Cova Variable Annuity Account Five
Standard Since Inception Returns
12/31/1999
Sub-Account Days Since
Inception
6 Cova Lord Abbett G&I 357
8 Cova Bond Debenture 1,320
9 GACC Money Market 757
11 Cova Developing Growth 784
12 Cova Large Cap Research 682
13 Cova Mid-Cap Value 784
15 Cova Quality Bond 1,320
16 Cova Small Cap Stock 1,325
17 Cova Large Cap Stock 1,324
18 Cova Select Equity 1,325
19 Cova Int'l Equity 1,326
24 Russell Multi-Style Equity 730
25 Russell Aggressive Equity 730
26 Russell Non-U.S. 730
27 Russell Core Bond 730
28 Russell Real Estate Securities 183
30 AIM V.I. Value 730
31 AIM V.I. Capital Appreciation 730
32 AIM V.I. Int'l Equity 730
35 Alliance Premier Growth 730
36 Alliance Real Estate Investment 730
39 Liberty Newport Tiger, Variable Series 730
40 Goldman Sachs G&I 640
41 Goldman Sachs Int'l Equity 640
42 Goldman Sachs Global Income 640
43 Templeton Global Income Securities 305
44 Kemper Dreman High Return 595
45 Kemper Small Cap Growth 730
46 Kemper Small Cap Value 730
47 Kemper Government Securities 730
48 MFS Bond 595
49 MFS Research 730
50 MFS Growth with Income 730
51 MFS Emerging Growth 730
52 MFS / F&C Emerging Markets Equity 730
53 MFS High Income 730
54 MFS Global Governments 730
55 Oppenheimer Capital Appreciation 730
56 Oppenheimer Main Street G&I 730
57 Oppenheimer High Income 730
58 Oppenheimer Bond 730
59 Oppenheimer Strategic Bond 730
60 Putnam VT G&I 730
61 Putman VT New Value 730
62 Putnam VT Vista 730
63 Putnam VT Int'l Growth 730
64 Putnam VT Int'l New Opportunities 730
65 Fanklin Small Cap 305 0.84
66 Templeton Growth Securities 304 0.83
67 Templeton International Securities 466
68 Templeton Developing Markets Securities 466
69 Mutual Shares Securities 466
71 Fidelity VIP Growth 682
72 Fidelity VIP II Contrafund 682
73 Fidelity VIP III Growth Opportunities 682
75 Fidelity VIP III Growth & Income 682
76 Fidelity VIP Equity-Income 682
99 Franklin Large Cap Growth Securities 305
140 American Century VP Income & Growth 42
141 American Century VP Int'l 42
142 American Century VP Value 42
160 Dreyfus Stock Index 42
161 Dreyfus VIF Disciplined Stock 42
162 Dreyfus VIF Capital Appreciation 42
180 INVESCO VIF Dynamics 42
181 INVESCO VIF High Yield 42
210 PIMCO High Yield Bond 42
211 PIMCO Low Duration Bond 42
212 PIMCO StockPLUS G&I 42
213 PIMCO Total Return Bond 42
230 Scudder Int'l 42
(1)Returns are not annualized for sub-accounts
Cova Variable Annuity Account Five
Non-Standard 1 Year Return Data
As of 12/31/99
Sub-Account T Account Account
Value Value
Before After
Transaction Transaction
6 Cova Lord Abbett G&I
12/31/98 p - #DIV/0!
12/31/99 a #DIV/0! #DIV/0!
12/31/99 s #DIV/0! #DIV/0!
8 Cova Bond Debenture
12/31/98 p - 1,000.00
12/31/99 a 1,019.92 1,019.92
12/31/99 s 1,019.92 1,019.92
9 GACC Money Market
12/31/98 p - 1,000.00
12/31/99 a 1,037.39 1,037.39
12/31/99 s 1,037.39 1,037.39
11 Cova Developing Growth
12/31/98 p - 1,000.00
12/31/99 a 1,305.84 1,305.84
12/31/99 s 1,305.84 1,305.84
12 Cova Large Cap Research
12/31/98 p - 1,000.00
12/31/99 a 1,237.63 1,237.63
12/31/99 s 1,237.63 1,237.63
13 Cova Mid-Cap Value
12/31/98 p - 1,000.00
12/31/99 a 1,041.92 1,041.92
12/31/99 s 1,041.92 1,041.92
15 Cova Quality Bond
12/31/98 p - 1,000.00
12/31/99 a 970.85 970.85
12/31/99 s 970.85 970.85
16 Cova Small Cap Stock
12/31/98 p - 1,000.00
12/31/99 a 1,425.15 1,425.15
12/31/99 s 1,425.15 1,425.15
17 Cova Large Cap Stock
12/31/98 p - 1,000.00
12/31/99 a 1,160.61 1,160.61
12/31/99 s 1,160.61 1,160.61
18 Cova Select Equity
12/31/98 p - 1,000.00
12/31/99 a 1,082.27 1,082.27
12/31/99 s 1,082.27 1,082.27
19 Cova Int'l Equity
12/31/98 p - 1,000.00
12/31/99 a 1,267.25 1,267.25
12/31/99 s 1,267.25 1,267.25
24 Russell Multi-Style Equity
12/31/98 p - 1,000.00
12/31/99 a 1,155.38 1,155.38
12/31/99 s 1,155.38 1,155.38
25 Russell Aggressive Equity
12/31/98 p - 1,000.00
12/31/99 a 1,046.06 1,046.06
12/31/99 s 1,046.06 1,046.06
26 Russell Non-U.S.
12/31/98 p - 1,000.00
12/31/99 a 1,315.08 1,315.08
12/31/99 s 1,315.08 1,315.08
27 Russell Core Bond
12/31/98 p - 1,000.00
12/31/99 a 980.09 980.09
12/31/99 s 980.09 980.09
28 Russell Real Estate Securities
12/31/98 p - #DIV/0!
12/31/99 a #DIV/0! #DIV/0!
12/31/99 s #DIV/0! #DIV/0!
30 AIM V.I. Value
12/31/98 p - 1,000.00
12/31/99 a 1,280.91 1,280.91
12/31/99 s 1,280.91 1,280.91
31 AIM V.I. Capital Appreciation
12/31/98 p - 1,000.00
12/31/99 a 1,426.04 1,426.04
12/31/99 s 1,426.04 1,426.04
32 AIM V.I. Int'l Equity
12/31/98 p - 1,000.00
12/31/99 a 1,529.00 1,529.00
12/31/99 s 1,529.00 1,529.00
35 Alliance Premier Growth
12/31/98 p - 1,000.00
12/31/99 a 1,304.74 1,304.74
12/31/99 s 1,304.74 1,304.74
36 Alliance Real Estate Investment
12/31/98 p - 1,000.00
12/31/99 a 935.69 935.69
12/31/99 s 935.69 935.69
39 Liberty Newport Tiger, Variable Series
12/31/98 p - 1,000.00
12/31/99 a 1,659.43 1,659.43
12/31/99 s 1,659.43 1,659.43
40 Goldman Sachs G&I
12/31/98 p - 1,000.00
12/31/99 a 1,039.43 1,039.43
12/31/99 s 1,039.43 1,039.43
41 Goldman Sachs Int'l Equity
12/31/98 p - 1,000.00
12/31/99 a 1,300.23 1,300.23
12/31/99 s 1,300.23 1,300.23
42 Goldman Sachs Global Income
12/31/98 p - 1,000.00
12/31/99 a 976.11 976.11
12/31/99 s 976.11 976.11
44 Kemper Dreman High Return
12/31/98 p - 1,000.00
12/31/99 a 883.78 883.78
12/31/99 s 883.78 883.78
45 Kemper Small Cap Growth
12/31/98 p - 1,000.00
12/31/99 a 1,326.61 1,326.61
12/31/99 s 1,326.61 1,326.61
46 Kemper Small Cap Value
12/31/98 p - 1,000.00
12/31/99 a 1,013.19 1,013.19
12/31/99 s 1,013.19 1,013.19
47 Kemper Government Securities
12/31/98 p - 1,000.00
12/31/99 a 992.83 992.83
12/31/99 s 992.83 992.83
48 MFS Bond
12/31/98 p - 1,000.00
12/31/99 a 978.97 978.97
12/31/99 s 978.97 978.97
49 MFS Research
12/31/98 p - 1,000.00
12/31/99 a 1,223.23 1,223.23
12/31/99 s 1,223.23 1,223.23
50 MFS Growth with Income
12/31/98 p - 1,000.00
12/31/99 a 1,052.08 1,052.08
12/31/99 s 1,052.08 1,052.08
51 MFS Emerging Growth
12/31/98 p - 1,000.00
12/31/99 a 1,742.59 1,742.59
12/31/99 s 1,742.59 1,742.59
52 MFS / F&C Emerging Markets Equity
12/31/98 p - 1,000.00
12/31/99 a 1,362.50 1,362.50
12/31/99 s 1,362.50 1,362.50
53 MFS High Income
12/31/98 p - 1,000.00
12/31/99 a 1,049.66 1,049.66
12/31/99 s 1,049.66 1,049.66
54 MFS Global Governments
12/31/98 p - 1,000.00
12/31/99 a 961.47 961.47
12/31/99 s 961.47 961.47
55 Oppenheimer Capital Appreciation
12/31/98 p - 1,000.00
12/31/99 a 1,396.86 1,396.86
12/31/99 s 1,396.86 1,396.86
56 Oppenheimer Main Street G&I
12/31/98 p - 1,000.00
12/31/99 a 1,200.14 1,200.14
12/31/99 s 1,200.14 1,200.14
57 Oppenheimer High Income
12/31/98 p - 1,000.00
12/31/99 a 1,028.39 1,028.39
12/31/99 s 1,028.39 1,028.39
58 Oppenheimer Bond
12/31/98 p - 1,000.00
12/31/99 a 971.12 971.12
12/31/99 s 971.12 971.12
59 Oppenheimer Strategic Bond
12/31/98 p - 1,000.00
12/31/99 a 1,013.97 1,013.97
12/31/99 s 1,013.97 1,013.97
60 Putnam VT G&I
12/31/98 p - 1,000.00
12/31/99 a 1,001.71 1,001.71
12/31/99 s 1,001.71 1,001.71
61 Putman VT New Value
12/31/98 p - 1,000.00
12/31/99 a 988.70 988.70
12/31/99 s 988.70 988.70
62 Putnam VT Vista
12/31/98 p - 1,000.00
12/31/99 a 1,507.73 1,507.73
12/31/99 s 1,507.73 1,507.73
63 Putnam VT Int'l Growth
12/31/98 p - 1,000.00
12/31/99 a 1,579.17 1,579.17
12/31/99 s 1,579.17 1,579.17
64 Putnam VT Int'l New Opportunities
12/31/98 p - 1,000.00
12/31/99 a 2,001.53 2,001.53
12/31/99 s 2,001.53 2,001.53
67 Templeton International Securities
12/31/98 p - 1,000.00
12/31/99 a 1,219.49 1,219.49
12/31/99 s 1,219.49 1,219.49
68 Templeton Developing Markets Securities
12/31/98 p - 1,000.00
12/31/99 a 1,518.91 1,518.91
12/31/99 s 1,518.91 1,518.91
69 Mutual Shares Securities
12/31/98 p - 1,000.00
12/31/99 a 1,118.45 1,118.45
12/31/99 s 1,118.45 1,118.45
71 Fidelity VIP Growth
12/31/98 p - 1,000.00
12/31/99 a 1,355.70 1,355.70
12/31/99 s 1,355.70 1,355.70
72 Fidelity VIP II Contrafund
12/31/98 p - 1,000.00
12/31/99 a 1,225.79 1,225.79
12/31/99 s 1,225.79 1,225.79
73 Fidelity VIP III Growth Opportunities
12/31/98 p - 1,000.00
12/31/99 a 1,027.83 1,027.83
12/31/99 s 1,027.83 1,027.83
75 Fidelity VIP III Growth & Income
12/31/98 p - 1,000.00
12/31/99 a 1,076.61 1,076.61
12/31/99 s 1,076.61 1,076.61
76 Fidelity VIP Equity-Income
12/31/98 p - 1,000.00
12/31/99 a 1,048.88 1,048.88
12/31/99 s 1,048.88 1,048.88
99 Franklin Growth Investments
12/31/98 p - #DIV/0!
12/31/99 a #DIV/0! #DIV/0!
12/31/99 s #DIV/0! #DIV/0!
Cova Variable Annuity Account Five
Non-Standard Returns
12/31/99
Sub-Account Days Since
Inception
6 Cova Lord Abbett G&I 357
8 Cova Bond Debenture 1,320
9 GACC Money Market 757
11 Cova Developing Growth 784
12 Cova Large Cap Research 682
13 Cova Mid-Cap Value 784
15 Cova Quality Bond 1,320
16 Cova Small Cap Stock 1,325
17 Cova Large Cap Stock 1,324
18 Cova Select Equity 1,325
19 Cova Int'l Equity 1,326
24 Russell Multi-Style Equity 730
25 Russell Aggressive Equity 730
26 Russell Non-U.S. 730
27 Russell Core Bond 730
28 Russell Real Estate Securities 183
30 AIM V.I. Value 730
31 AIM V.I. Capital Appreciation 730
32 AIM V.I. Int'l Equity 730
35 Alliance Premier Growth 730
36 Alliance Real Estate Investment 730
39 Liberty Newport Tiger, Variable Series 730
40 Goldman Sachs G&I 640
41 Goldman Sachs Int'l Equity 640
42 Goldman Sachs Global Income 640
43 Templeton Global Income Securities 305
44 Kemper Dreman High Return 595
45 Kemper Small Cap Growth 730
46 Kemper Small Cap Value 730
47 Kemper Government Securities 730
48 MFS Bond 595
49 MFS Research 730
50 MFS Growth with Income 730
51 MFS Emerging Growth 730
52 MFS / F&C Emerging Markets Equity 730
53 MFS High Income 730
54 MFS Global Governments 730
55 Oppenheimer Capital Appreciation 730
56 Oppenheimer Main Street G&I 730
57 Oppenheimer High Income 730
58 Oppenheimer Bond 730
59 Oppenheimer Strategic Bond 730
60 Putnam VT G&I 730
61 Putman VT New Value 730
62 Putnam VT Vista 730
63 Putnam VT Int'l Growth 730
64 Putnam VT Int'l New Opportunities 730
65 Fanklin Small Cap 305
66 Templeton Growth Securities 304
67 Templeton International Securities 466
68 Templeton Developing Markets Securities 466
69 Mutual Shares Securities 609
71 Fidelity VIP Growth 682
72 Fidelity VIP II Contrafund 682
73 Fidelity VIP III Growth Opportunities 682
75 Fidelity VIP III Growth & Income 682
76 Fidelity VIP Equity-Income 682
99 Franklin Large Cap Growth Securities 305
140 American Century VP Income & Growth 42
141 American Century VP Int'l 42
142 American Century VP Value 42
160 Dreyfus Stock Index 42
161 Dreyfus VIF Disciplined Stock 42
162 Dreyfus VIF Capital Appreciation 42
180 INVESCO VIF Dynamics 42
181 INVESCO VIF High Yield 42
210 PIMCO High Yield Bond 42
211 PIMCO Low Duration Bond 42
212 PIMCO StockPLUS G&I 42
213 PIMCO Total Return Bond 42
230 Scudder Int'l 42
(1) Sub-account has not been in existence for 1
Cova Variable Annuity Account Five
Standard Inception to Date Return Data
As of 12/31/99
Sub-Account T Account Account
Value Value
Before After
Transaction Transaction
6 Cova Lord Abbett G&I
1/8/1999 p - 1,000.00
12/31/1999 a 1,098.96 1,098.96
12/31/1999 s 1,098.96 1,098.96
8 Cova Bond Debenture
5/20/1996 p - 1,000.00
5/20/1997 a 1,158.88 1,158.88
5/20/1998 a 1,327.95 1,327.95
5/20/1999 a 1,333.18 1,333.18
12/31/1999 a 1,356.69 1,356.69
12/31/1999 s 1,356.69 1,356.69
9 GACC Money Market
12/4/1997 p - 1,000.00
12/4/1998 a 1,042.44 1,042.44
12/6/1999 a - 1,080.76
12/31/1999 a 1,084.15 1,084.15
12/31/1999 s 1,084.15 1,084.15
11 Cova Developing Growth
11/7/1997 p - 1,000.00
11/7/1998 a 920.27 920.27
11/8/1999 a 1,117.36 1,117.36
12/31/1999 a 1,334.42 1,334.42
12/31/1999 s 1,334.42 1,334.42
12 Cova Large Cap Research
2/17/1998 p - 1,000.00
2/17/1999 a 1,076.55 1,076.55
12/31/1999 a 1,360.70 1,360.70
12/31/1999 s 1,360.70 1,360.70
13 Cova Mid-Cap Value
11/7/1997 p - 1,000.00
11/7/1998 a 1,030.82 1,030.82
11/8/1999 a 1,082.28 1,082.28
12/31/1999 s 1,082.28 1,082.28
15 Cova Quality Bond
5/20/1996 p - 1,000.00
5/20/1997 a 1,049.16 1,049.16
5/20/1998 a 1,146.92 1,146.92
5/20/1999 a 1,171.98 1,171.98
12/31/1999 a 1,162.39 1,162.39
12/31/1999 s 1,162.39 1,162.39
16 Cova Small Cap Stock
5/15/1996 p - 1,000.00
5/15/1997 a 1,008.21 1,008.21
5/15/1998 a 1,347.85 1,347.85
5/17/1999 a 1,155.94 1,155.94
12/31/1999 a 1,644.33 1,644.33
12/31/1999 s 1,644.33 1,644.33
17 Cova Large Cap Stock
5/16/1996 p - 1,000.00
5/16/1997 a 1,255.89 1,255.89
5/18/1998 a 1,709.84 1,709.84
5/17/1999 a 2,039.96 2,039.96
12/31/1999 a 2,220.43 2,220.43
12/31/1999 s 2,220.43 2,220.43
18 Cova Select Equity
5/15/1996 p - 1,000.00
5/15/1997 a 1,192.07 1,192.07
5/15/1998 a 1,584.97 1,584.97
5/17/1999 a 1,758.45 1,758.45
12/31/1999 a 1,810.95 1,810.95
12/31/1999 s 1,810.95 1,810.95
19 Cova Int'l Equity
5/14/1996 p - 1,000.00
5/14/1997 a 1,158.24 1,158.24
5/14/1998 a 1,300.17 1,300.17
5/14/1999 a 1,283.73 1,283.73
12/31/1999 a 1,617.43 1,617.43
12/31/1999 s 1,617.43 1,617.43
24 Russell Multi-Style Equity
12/31/1997 p - 1,000.00
12/31/1998 a 1,269.48 1,269.48
12/31/1999 a 1,471.96 1,471.96
12/31/1999 s 1,471.96 1,471.96
25 Russell Aggressive Equity
12/31/1997 p - 1,000.00
12/31/1998 a 996.33 996.33
12/31/1999 a 1,046.19 1,046.19
12/31/1999 s 1,046.19 1,046.19
26 Russell Non-U.S.
12/31/1997 p - 1,000.00
12/31/1998 a 1,114.21 1,114.21
12/31/1999 a 1,470.62 1,470.62
12/31/1999 s 1,470.62 1,470.62
27 Russell Core Bond
12/31/1997 p - 1,000.00
12/31/1998 a 1,059.12 1,059.12
12/31/1999 a 1,041.95 1,041.95
12/31/1999 s 1,041.95 1,041.95
28 Russell Real Estate Securities
7/1/1999 p - 1,000.00
12/31/1999 a 939.53 939.53
12/31/1999 s 939.53 939.53
30 AIM V.I. Value
12/31/1997 p - 1,000.00
12/31/1998 a 1,306.02 1,306.02
12/31/1999 a 1,674.86 1,674.86
12/31/1999 s 1,674.86 1,674.86
31 AIM V.I. Capital Appreciation
12/31/1997 p - 1,000.00
12/31/1998 a 1,177.07 1,177.07
12/31/1999 a 1,682.74 1,682.74
12/31/1999 s 1,682.74 1,682.74
32 AIM V.I. Int'l Equity
12/31/1997 p - 1,000.00
12/31/1998 a 1,139.14 1,139.14
12/31/1999 a 1,745.88 1,745.88
12/31/1999 s 1,745.88 1,745.88
35 Alliance Premier Growth
12/31/1997 p - 1,000.00
12/31/1998 a 1,459.55 1,459.55
12/31/1999 a 1,907.60 1,907.60
12/31/1999 s 1,907.60 1,907.60
36 Alliance Real Estate Investment
12/31/1997 p - 1,000.00
12/31/1998 a 798.84 798.84
12/31/1999 a 748.60 748.60
12/31/1999 s 748.60 748.60
39 Liberty Newport Tiger, Variable Series
12/31/1997 p - 1,000.00
12/31/1998 a 922.88 922.88
12/31/1999 a 1,539.75 1,539.75
12/31/1999 s 1,539.75 1,539.75
40 Goldman Sachs G&I
3/31/1998 p - 1,000.00
3/31/1999 a 890.76 890.76
12/31/1999 a 918.83 918.83
12/31/1999 s 918.83 918.83
41 Goldman Sachs Int'l Equity
3/31/1998 p - 1,000.00
3/31/1999 a 1,004.84 1,004.84
12/31/1999 a 1,325.43 1,325.43
12/31/1999 s 1,325.43 1,325.43
42 Goldman Sachs Global Income
3/31/1998 p - 1,000.00
3/31/1999 p 1,053.55 1,053.55
12/31/1999 a 1,039.89 1,039.89
12/31/1999 s 1,039.89 1,039.89
43 Templeton Global Income Securities
3/1/1999 p - 1,000.00
12/31/1999 a 963.30 963.30
12/31/1999 s 963.30 963.30
44 Kemper Dreman High Return
5/15/1998 p - 1,000.00
5/15/1999 a 1,088.78 1,088.78
12/31/1999 a 927.00 927.00
12/31/1999 s 927.00 927.00
45 Kemper Small Cap Growth
12/31/1997 p - 1,000.00
12/31/1998 a 1,167.61 1,167.61
12/31/1999 a 1,550.52 1,550.52
12/31/1999 s 1,550.52 1,550.52
46 Kemper Small Cap Value
12/31/1997 p - 1,000.00
12/31/1998 a 875.32 875.32
12/31/1999 a 888.60 888.60
12/31/1999 s 888.60 888.60
47 Kemper Government Securities
12/31/1997 p - 1,000.00
12/31/1998 a 1,055.65 1,055.65
12/31/1999 a 1,055.84 1,055.84
12/31/1999 s 1,055.84 1,055.84
48 MFS Bond
5/15/1998 p - 1,000.00
5/15/1999 a 1,037.30 1,037.30
12/31/1999 a 1,028.80 1,028.80
12/31/1999 s 1,028.80 1,028.80
49 MFS Research
12/31/1997 p - 1,000.00
12/31/1998 a 1,217.28 1,217.28
12/31/1999 a 1,489.79 1,489.79
12/31/1999 s 1,489.79 1,489.79
50 MFS Growth with Income
12/31/1997 p - 1,000.00
12/31/1998 a 1,206.66 1,206.66
12/31/1999 a 1,270.39 1,270.39
12/31/1999 s 1,270.39 1,270.39
51 MFS Emerging Growth
12/31/1997 p - 1,000.00
12/31/1998 a 1,323.32 1,323.32
12/31/1999 a 2,307.91 2,307.91
12/31/1999 s 2,307.91 2,307.91
52 MFS / F&C Emerging Markets Equity
12/31/1997 p - 1,000.00
12/31/1998 a 657.18 657.18
12/31/1999 a 896.76 896.76
12/31/1999 s 896.76 896.76
53 MFS High Income
12/31/1997 p - 1,000.00
12/31/1998 a 984.52 984.52
12/31/1999 a 1,035.29 1,035.29
12/31/1999 s 1,035.29 1,035.29
54 MFS Global Governments
12/31/1997 p - 1,000.00
12/31/1998 a 1,066.99 1,066.99
12/31/1999 a 1,025.26 1,025.26
12/31/1999 s 1,025.26 1,025.26
55 Oppenheimer Capital Appreciation
12/31/1997 p - 1,000.00
12/31/1998 a 1,223.27 1,223.27
12/31/1999 a 1,710.32 1,710.32
12/31/1999 s 1,710.32 1,710.32
56 Oppenheimer Main Street G&I
12/31/1997 p - 1,000.00
12/31/1998 a 1,032.65 1,032.65
12/31/1999 a 1,240.98 1,240.98
12/31/1999 s 1,240.98 1,240.98
57 Oppenheimer High Income
12/31/1997 p - 1,000.00
12/31/1998 a 989.38 989.38
12/31/1999 a 1,018.92 1,018.92
12/31/1999 s 1,018.92 1,018.92
58 Oppenheimer Bond
12/31/1997 p - 1,000.00
12/31/1998 a 989.38 989.38
12/31/1999 a 1,024.69 1,024.69
12/31/1999 s 1,024.69 1,024.69
59 Oppenheimer Strategic Bond
12/31/1997 p - 1,000.00
12/31/1998 a 1,015.13 1,015.13
12/31/1999 a 1,030.68 1,030.68
12/31/1999 s 1,030.68 1,030.68
60 Putnam VT G&I
12/31/1997 p - 1,000.00
12/31/1998 a 1,138.27 1,138.27
12/31/1999 a 1,142.27 1,142.27
12/31/1999 s 1,142.27 1,142.27
61 Putman VT New Value
12/31/1997 p - 1,000.00
12/31/1998 a 1,048.35 1,048.35
12/31/1999 a 1,037.94 1,037.94
12/31/1999 s 1,037.94 1,037.94
62 Putnam VT Vista
12/31/1997 p - 1,000.00
12/31/1998 a 1,178.57 1,178.57
12/31/1999 a 1,779.75 1,779.75
12/31/1999 s 1,779.75 1,779.75
63 Putnam VT Int'l Growth
12/31/1997 p - 1,000.00
12/31/1998 a 1,170.70 1,170.70
12/31/1999 a 1,852.28 1,852.28
12/31/1999 s 1,852.28 1,852.28
64 Putnam VT Int'l New Opportunities
12/31/1997 p - 1,000.00
12/31/1998 a 1,140.23 1,140.23
12/31/1999 a 2,285.90 2,285.90
12/31/1999 s 2,285.90 2,285.90
65 Franklin Small Cap
3/1/1999 p - 1,000.00
12/31/1999 a 2,044.84 2,044.84
12/31/1999 s 2,044.84 2,044.84
66 Templeton Growth Securities
3/2/1999 p - 1,000.00
12/31/1999 a 1,252.57 1,252.57
12/31/1999 s 1,252.57 1,252.57
67 Templeton International Securities
9/21/1998 p - 1,000.00
9/21/1999 a 1,249.01 1,249.01
12/31/1999 a 1,413.63 1,413.63
12/31/1999 s 1,413.63 1,413.63
68 Templeton Developing Markets Securities
9/21/1998 p - 1,000.00
9/21/1999 a 1,617.66 1,617.66
12/31/1999 a 2,033.34 2,033.34
12/31/1999 s 2,033.34 2,033.34
69 Mutual Shares Securities
9/21/1998 p - 1,000.00
9/21/1999 a 1,192.85 1,192.85
12/31/1999 a 1,252.68 1,252.68
12/31/1999 s 1,252.68 1,252.68
71 Fidelity VIP Growth
2/17/1998 p - 1,000.00
2/17/1999 a 1,329.63 1,329.63
12/31/1999 a 1,778.06 1,778.06
12/31/1999 s 1,778.06 1,778.06
72 Fidelity VIP II Contrafund
2/17/1998 p - 1,000.00
2/17/1999 a 1,242.92 1,242.92
12/31/1999 a 1,523.58 1,523.58
12/31/1999 s 1,523.58 1,523.58
73 Fidelity VIP III Growth Opportunities
2/17/1998 p - 1,000.00
2/17/1999 a 1,125.53 1,125.53
12/31/1999 a 1,214.28 1,214.28
12/31/1999 s 1,214.28 1,214.28
75 Fidelity VIP III Growth & Income
2/17/1998 p - 1,000.00
2/17/1999 a 1,206.69 1,206.69
12/31/1999 a 1,319.83 1,319.83
12/31/1999 s 1,319.83 1,319.83
76 Fidelity VIP Equity-Income
2/17/1998 p - 1,000.00
2/17/1999 a 1,032.21 1,032.21
12/31/1999 a 1,119.60 1,119.60
12/31/1999 s 1,119.60 1,119.60
99 Franklin Large Cap Growth Securities
3/1/1999 p - 1,000.00
12/31/1999 a 1,302.36 1,302.36
12/31/1999 s 1,302.36 1,302.36
140 American Century VP Income & Growth
11/19/1999 p - 1,000.00
12/31/1999 a 1,032.49 1,032.49
12/31/1999 s 1,032.49 1,032.49
141 American Century VP Int'l
11/19/1999 p - 1,000.00
12/31/1999 a 1,251.70 1,251.70
12/31/1999 s 1,251.70 1,251.70
142 American Century VP Value
11/19/1999 p - 1,000.00
12/31/1999 a 958.70 958.70
12/31/1999 s 958.70 958.70
160 Dreyfus Stock Index
11/19/1999 p - 1,000.00
12/31/1999 a 1,033.60 1,033.60
12/31/1999 s 1,033.60 1,033.60
161 Dreyfus VIF Disciplined Stock
11/19/1999 p - 1,000.00
12/31/1999 a 1,030.60 1,030.60
12/31/1999 s 1,030.60 1,030.60
162 Dreyfus VIF Capital Appreciation
11/19/1999 p - 1,000.00
12/31/1999 a 1,012.80 1,012.80
12/31/1999 s 1,012.80 1,012.80
180 INVESCO VIF Dynamics
11/19/1999 p - 1,000.00
12/31/1999 a 1,114.87 1,114.87
12/31/1999 s 1,114.87 1,114.87
181 INVESCO VIF High Yield
11/19/1999 p - 1,000.00
12/31/1999 a 1,012.27 1,012.27
12/31/1999 s 1,012.27 1,012.27
210 PIMCO High Yield Bond
11/19/1999 p - 1,000.00
12/31/1999 a 1,007.80 1,007.80
12/31/1999 s 1,007.80 1,007.80
211 PIMCO Low Duration Bond
11/19/1999 p - 1,000.00
12/31/1999 a 996.90 996.90
12/31/1999 s 996.90 996.90
212 PIMCO StockPLUS G&I
11/19/1999 p - 1,000.00
12/31/1999 a 1,031.10 1,031.10
12/31/1999 s 1,031.10 1,031.10
213 PIMCO Total Return Bond
11/19/1999 p - 1,000.00
12/31/1999 a 989.85 989.85
12/31/1999 s 989.85 989.85
230 Scudder Int'l
11/19/1999 p - 1,000.00
12/31/1999 a 1,163.75 1,163.75
12/31/1999 s 1,163.75 1,163.75
Cova Variable Annuity Account Five
Standard Since Inception Returns
12/31/1999
Sub-Account Days Since
Inception
6 Cova Lord Abbett G&I 357
8 Cova Bond Debenture 1,320
9 GACC Money Market 757
11 Cova Developing Growth 784
12 Cova Large Cap Research 682
13 Cova Mid-Cap Value 784
15 Cova Quality Bond 1,320
16 Cova Small Cap Stock 1,325
17 Cova Large Cap Stock 1,324
18 Cova Select Equity 1,325
19 Cova Int'l Equity 1,326
24 Russell Multi-Style Equity 730
25 Russell Aggressive Equity 730
26 Russell Non-U.S. 730
27 Russell Core Bond 730
28 Russell Real Estate Securities 183
30 AIM V.I. Value 730
31 AIM V.I. Capital Appreciation 730
32 AIM V.I. Int'l Equity 730
35 Alliance Premier Growth 730
36 Alliance Real Estate Investment 730
39 Liberty Newport Tiger, Variable Series 730
40 Goldman Sachs G&I 640
41 Goldman Sachs Int'l Equity 640
42 Goldman Sachs Global Income 640
43 Templeton Global Income Securities 305
44 Kemper Dreman High Return 595
45 Kemper Small Cap Growth 730
46 Kemper Small Cap Value 730
47 Kemper Government Securities 730
48 MFS Bond 595
49 MFS Research 730
50 MFS Growth with Income 730
51 MFS Emerging Growth 730
52 MFS / F&C Emerging Markets Equity 730
53 MFS High Income 730
54 MFS Global Governments 730
55 Oppenheimer Capital Appreciation 730
56 Oppenheimer Main Street G&I 730
57 Oppenheimer High Income 730
58 Oppenheimer Bond 730
59 Oppenheimer Strategic Bond 730
60 Putnam VT G&I 730
61 Putman VT New Value 730
62 Putnam VT Vista 730
63 Putnam VT Int'l Growth 730
64 Putnam VT Int'l New Opportunities 730
65 Franklin Small Cap 305
66 Templeton Growth Securities 304
67 Templeton International Securities 466
68 Templeton Developing Markets Securities 466
69 Mutual Shares Securities 466
71 Fidelity VIP Growth 682
72 Fidelity VIP II Contrafund 682
73 Fidelity VIP III Growth Opportunities 682
75 Fidelity VIP III Growth & Income 682
76 Fidelity VIP Equity-Income 682
99 Franklin Large Cap Growth Securities 305
140 American Century VP Income & Growth 42
141 American Century VP Int'l 42
142 American Century VP Value 42
160 Dreyfus Stock Index 42
161 Dreyfus VIF Disciplined Stock 42
162 Dreyfus VIF Capital Appreciation 42
180 INVESCO VIF Dynamics 42
181 INVESCO VIF High Yield 42
210 PIMCO High Yield Bond 42
211 PIMCO Low Duration Bond 42
212 PIMCO StockPLUS G&I 42
213 PIMCO Total Return Bond 42
230 Scudder Int'l 42
(1) Returns are not annualized for sub-accounts in existence less than 1 year.
</TABLE>
Cova Corporation, a Missouri corporation, is owned by General American Life
Insurance Company, a Missouri company.
General American Life Insurance Company is owned by GenAmerica Corporation, a
Missouri corporation.
GenAmerica Corporation is owned by Metropolitan Life Insurance Company, a New
York company.
Cova Corporation owns 100% of Cova Financial Services Life Insurance Company,
a Missouri company, and Cova Life Management Company, a Delaware company.
Cova Financial Services Life Insurance Company owns 100% of First Cova Life
Insurance Company, a New York company, and Cova Financial Life Insurance
Company, a California company.
Cova Life Management Company owns 100% of Cova Investment Advisory Corporation,
an Illinois corporation, Cova Investment Allocation Corporation, an Illinois
corporation, and Cova Life Sales Company, a Delaware company.
