File Nos. 333-34817
811-07060
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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. 8 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 25 [X]
(Check appropriate box or boxes.)
COVA VARIABLE ANNUITY ACCOUNT FIVE
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(Exact Name of Registrant)
COVA FINANCIAL LIFE INSURANCE COMPANY
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(Name of Depositor)
4100 Newport Place Drive, Suite 840, Newport Beach, CA 92600
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(Address of Depositor's Principal Executive Offices) (Zip Code)
<PAGE>
Depositor's Telephone Number, including Area Code (800) 831-5433
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Name and Address of Agent for Service
Mark E. Reynolds, 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 September 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 effective date for a
previously filed post-effective amendment.
Title of Securities Registered:
Individual Variable Annuity Contracts.
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EXPLANATORY NOTE
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This Registration Statement contains three Prospectuses (Version A, Version B
and Version C). The three versions are substantially similar except for the
funding options. The Prospectuses will be filed with the Commission pursuant to
Rule 497 under the Securities Act of 1933. The Registrant undertakes to update
this Explanatory Note, as needed, each time a Post-Effective Amendment is filed.
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<TABLE>
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<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 . . . . . . . . . . . . . . . Summary
Item 4. Condensed Financial Information . . . Appendix - Condensed Financial Information
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)
<PAGE>
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.
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Part A (versions A, B and C) was filed in Post-Effective Amendment No. 7 to Form
N-4 on May 1, 2000 and is incorporated herein by reference.
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SUPPLEMENT TO VERSION A OF THE PROSPECTUS
COVA FINANCIAL LIFE INSURANCE COMPANY
COVA VARIABLE ANNUITY ACCOUNT FIVE
Supplement dated September 1, 2000
The following supplements certain information contained in your Cova variable
annuity prospectus:
1. The MFS New Discovery Series of MFS Variable Insurance Trust is an
available investment portfolio under your contract. Massachusetts Financial
<PAGE>
Services Company is the investment adviser to the MFS New Discovery Series.
Investment Objective: The Series' investment objective is capital
appreciation. The Series invests, under normal market conditions, at least 65%
of its total assets in equity securities of emerging growth companies.
2. The following is added to the Investment Portfolio Expenses table - MFS
Variable Insurance Trust:
Management Other Expenses(a) Total Annual (a)
Fees (after expense Portfolio Expenses
reimbursement)(after expense reimbursement)
MFS New Discovery Series .90% .17%(b) 1.07% (b)
(a) The Series has an expense offset arrangement which reduces the series'
custodian fee based on cash maintained by the Series with its custodian and
dividend disbursing agent. The Series may enter into other such arrangements and
directed brokerage arrangements, which would also have the effect of reducing
the series' expenses. "Other Expenses" above do not take into account these
expense reductions, and are therefore higher than the actual expenses of the
Series. Had these fee reductions been taken into account, net expenses would be
lower and would equal 1.05%.
(b) MFS has contractually agreed, subject to reimbursement, to bear expenses for
the Series such that the Series' "Other Expenses" (after taking into account the
expense offset arrangement described above) do not exceed .15% of the average
daily net assets of the Series during the current fiscal year. This contractual
fee arrangement will continue until at least May 1, 2001, unless changed with
the consent of the board of trustees which oversees the Series. Absent the
reimbursement, "Total Annual Portfolio Expenses" were 2.49%.
3. The following Examples are added:
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.
Time Periods
1 Year 3 Years
MFS New Discovery Series (a) $76.00 (a) $124.77
(b) $26.00 (b) $ 79.77
4. The following accumulation unit values for the period ended June 30, 2000 are
added to Appendix A:
AIM Variable Insurance Funds
Managed by A I M Advisors, Inc.
AIM V.I. Capital Appreciation Sub-Account
<PAGE>
Beginning of Period $16.83
End of Period $18.09
Number of Accum. Units Outstanding 144,086
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AIM V.I. International Equity Sub-Account
Beginning of Period $17.46
End of Period $15.46
Number of Accum. Units Outstanding 33,438
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AIM V.I. Value Sub-Account
Beginning of Period $16.75
End of Period $16.59
Number of Accum. Units Outstanding 267,530
- ----------------------------------------------------------------------------
Alliance Variable Products Series Fund, Inc. (Class A)
Managed by Alliance Capital Management L.P.
Premier Growth Sub-Account
Beginning of Period $19.08
End of Period $19.53
Number of Accum. Units Outstanding 183,290
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Real Estate Investment Sub-Account
Beginning of Period $7.49
End of Period $8.62
Number of Accum. Units Outstanding 43,763
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Cova Series Trust
Managed by Lord, Abbett & Co.
Bond Debenture Sub-Account
Beginning of Period $13.77
End of Period $13.86
Number of Accum. Units Outstanding 852,246
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Developing Growth Sub-Account
Beginning of Period $14.45
End of Period $12.66
Number of Accum. Units Outstanding 173,414
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Large Cap Research Sub-Account
Beginning of Period $14.64
End of Period $13.84
Number of Accum. Units Outstanding 168,976
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<PAGE>
Lord Abbett Growth and Income Sub Account
Beginning of Period $39.46
End of Period $38.33
Number of Accum. Units Outstanding 1,259,585
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Mid-Cap Value Sub-Account
Beginning of Period $10.88
End of Period $12.72
Number of Accum. Units Outstanding 146,325
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Managed by J.P. Morgan Investment Management Inc.
International Equity Sub-Account
Beginning of Period $16.33
End of Period $15.56
Number of Accum. Units Outstanding 867,246
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Large Cap Stock Sub-Account
Beginning of Period $22.55
End of Period $21.91
Number of Accum. Units Outstanding 1,589,429
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Quality Bond Sub-Account
Beginning of Period $11.57
End of Period $11.90
Number of Accum. Units Outstanding 567,481
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Select Equity Sub-Account
Beginning of Period $18.38
End of Period $18.07
Number of Accum. Units Outstanding 1,241,253
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Small Cap Stock Sub-Account
Beginning of Period $17.93
End of Period $17.95
Number of Accum. Units Outstanding 672,460
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Franklin Templeton Variable Insurance Products Trust,
Class 1 Shares
Managed by Franklin Mutual Advisers, LLC
Mutual Shares Securities Sub-Account
Beginning of Period $10.43
End of Period $10.41
Number of Accum. Units Outstanding 26,134
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<PAGE>
Managed by Templeton Asset Management Ltd.
Templeton Developing Markets Securities Sub-Account
Beginning of Period $11.48
End of Period $ 9.47
Number of Accum. Units Outstanding 28,284
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Managed by Templeton Investment Counsel, Inc.
Templeton International Securities Sub-Account
Beginning of Period $11.16
End of Period $11.14
Number of Accum. Units Outstanding 65,773
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Managed by Franklin Advisers, Inc.
Franklin Small Cap Sub-Account
Beginning of Period $17.72
End Of Period $18.37
Number of Accum Units Outstanding 45,972
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General American Capital Company
Managed by Conning Asset Management Company
Money Market Sub-Account
Beginning of Period $11.53
End of Period $11.80
Number of Accum. Units Outstanding 185,974
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Goldman Sachs Variable Insurance Trust
Managed by Goldman Sachs Asset Management
Goldman Sachs VIT Growth and Income Sub-Account
Beginning of Period $10.30
End of Period $10.31
Number of Accum. Units Outstanding 29,973
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Managed by Goldman Sachs Asset Management International
Goldman Sachs VIT Global Income Sub-Account
Beginning of Period $10.56
End of Period $10.82
Number of Accum. Units Outstanding 4,097
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Goldman Sachs VIT International Equity Sub-Account
Beginning of Period $14.84
End of Period $14.51
Number of Accum. Units Outstanding 27,159
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Kemper Variable Series
<PAGE>
Managed by Scudder Kemper Investments, Inc.
Kemper Government Securities Sub-Account
Beginning of Period $10.56
End of Period $10.90
Number of Accum. Units Outstanding 22,626
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Kemper Small Cap Growth Sub-Account
Beginning of Period $15.51
End of Period $16.77
Number of Accum. Units Outstanding 10,308
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Kemper Small Cap Value Sub-Account
Beginning of Period $8.89
End of Period $8.66
Number of Accum. Units Outstanding 31,724
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Liberty Variable Investment Trust
Managed by Newport Fund Management, Inc.
Newport Tiger Fund, Variable Sub-Account
Beginning of Period $15.40
End of Period $15.23
Number of Accum. Units Outstanding 4,340
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MFS Variable Insurance Trust
Managed by Massachusetts Financial Services Company
MFS Emerging Growth Sub-Account
Beginning of Period $23.08
End of Period $22.39
Number of Accum. Units Outstanding 78,755
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MFS Emerging Markets Equity Sub-Account
Beginning of Period $8.97
End of Period $8.49
Number of Accum. Units Outstanding 3,497
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MFS Global Governments Sub-Account
Beginning of Period $10.25
End of Period $10.33
Number of Accum. Units Outstanding 1,299
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MFS Growth With Income Sub-Account
Beginning of Period $12.70
End of Period $12.68
<PAGE>
Number of Accum. Units Outstanding 132,313
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MFS High Income Sub-Account
Beginning of Period $10.35
End of Period $10.31
Number of Accum. Units Outstanding 26,061
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MFS Research Sub-Account
Beginning of Period $14.90
End of Period $15.73
Number of Accum. Units Outstanding 74,223
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Oppenheimer Variable Account Funds
Managed by OppenheimerFunds, Inc.
Oppenheimer Bond Fund/VA Sub-Account
Beginning of Period $10.25
End of Period $10.37
Number of Accum. Units Outstanding 77,298
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Oppenheimer Capital Appreciation Fund/VA Sub-Account
Beginning of Period $17.10
End of Period $18.58
Number of Accum. Units Outstanding 28,308
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Oppenheimer High Income Fund/VA Sub-Account
Beginning of Period $10.19
End of Period $10.06
Number of Accum. Units Outstanding 26,405
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Oppenheimer Main Street Growth & Income Fund/VA Sub-Account
Beginning of Period $12.41
End of Period $12.35
Number of Accum. Units Outstanding 48,816
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Oppenheimer Strategic Bond Fund/VA Sub-Account
Beginning of Period $10.31
End of Period $10.42
Number of Accum. Units Outstanding 8,094
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Putnam Variable Trust
Managed by Putnam Investment Management, Inc.
Putnam VT Growth and Income Sub-Account
Beginning of Period $11.42
<PAGE>
End of Period $11.01
Number of Accum. Units Outstanding 140,549
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Putnam VT International Growth Sub-Account
Beginning of Period $18.52
End of Period $18.51
Number of Accum. Units Outstanding 107,300
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Putnam VT International New Opportunities Sub-Account
Beginning of Period $22.86
End of Period $19.19
Number of Accum. Units Outstanding 16,456
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Putnam VT New Value Sub-Account
Beginning of Period $10.38
End of Period $10.62
Number of Accum. Units Outstanding 3,280
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Putnam VT Vista Sub-Account
Beginning of Period $17.80
End of Period $20.55
Number of Accum. Units Outstanding 26,239
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5. The following replaces Appendix C - Performance Information:
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 June 30, 2000. 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 June 30, 2000 may be
different than the numbers shown below.
PART 1 - SEPARATE ACCOUNT PERFORMANCE
The portfolios listed below began operations before June 30, 2000. As a result,
performance information is available for the accumulation units investing in
these portfolios.
o Column A presents performance figures for the accumulation units which
reflect the insurance charges, the contract maintenance charge, the fees
and expenses of each portfolio, and assumes that you make a withdrawal at
the end of the period and therefore the withdrawal charge is reflected.
<PAGE>
o Column B presents performance figures for the accumulation units which
reflect the insurance charges and fees and expenses of each portfolio.
o Performance figures shown for sub-accounts in existence for less than one
year are not annualized.
Total Return for the periods ended 6/30/00:
<TABLE>
<CAPTION>
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Accumulation Unit Performance
Column A Column B
(reflects all (reflects insurance
charges and charges and portfolio
portfolio expenses) expenses)
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Separate Account
Inception Date Since Since
Portfolio in Portfolio 1 yr 5 yrs inception 1 yr 5 yrs inception
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AIM Variable Insurance
Funds
<S> <C> <C> <C> <C> <C> <C> <C>
AIM V.I. Capital Appreciation 12/31/97 36.32% n/a 25.42% 40.92% n/a 26.76%
AIM V.I. International
Equity 12/31/97 25.91% n/a 17.56% 30.51% n/a 19.03%
AIM V.I. Value 12/31/97 7.02% n/a 21.04% 11.62% n/a 22.45%
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Alliance Variable Products
Series Fund, Inc.
Premier Growth (Class A) 12/31/97 14.29% n/a 29.43% 18.89% n/a 30.71%
Real Estate Investment (Class A) 12/31/97 -2.26% n/a -7.86% 2.35% n/a -5.77%
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Cova Series Trust
Bond Debenture 5/20/96 -2.18% n/a 6.90% 2.42% n/a 7.88%
Developing Growth 11/7/97 -5.09% n/a 4.40% -0.49% n/a 6.08%
International Equity 5/14/96 10.43% n/a 10.14% 15.03% n/a 11.04%
<PAGE>
Large Cap Research 2/17/98 -0.71% n/a 9.45% 3.89% n/a 11.24%
Large Cap Stock 5/16/96 -3.91% n/a 19.79% 0.69% n/a 20.49%
Lord Abbett Growth and Income 1/8/99 -6.55% n/a 1.46% -1.95% n/a 4.53%
Mid-Cap Value 11/7/97 5.40% n/a 7.71% 10.01% n/a 9.31%
Quality Bond 5/20/96 -1.82% n/a 3.37% 2.78% n/a 4.45%
Select Equity 5/15/96 -8.40% n/a 14.19% -3.80% n/a 14.99%
Small Cap Stock 5/15/96 30.89% n/a 11.97% 35.49% n/a 12.83%
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Franklin Templeton Variable Insurance Products Trust,
Class 1 Shares
Mutual Shares Securities (1) 9/21/98 -10.97% n/a -3.80% -6.37% n/a -1.56%
Templeton Developing
Markets Securities (2) 9/21/98 -16.59% n/a 31.68% -11.99% n/a 33.81%
Templeton International
Securities (3) 9/21/98 6.57% n/a 19.14% 11.17% n/a 21.44%
Franklin Small Cap (4) 3/1/99 60.03% n/a 64.89% 64.63% n/a 67.82%
(1) 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.
(2) 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.
(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 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.
</TABLE>
<TABLE>
<CAPTION>
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General American Capital Company
<S> <C> <C> <C> <C> <C> <C> <C>
Money Market 12/4/97 -0.20% n/a 2.35% 4.40% n/a 4.13%
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Goldman Sachs Variable
<PAGE>
Insurance Trust
Goldman Sachs
VIT Global Income 3/31/98 -2.33% n/a 0.85% 2.27% n/a 2.89%
Goldman Sachs VIT Growth
and Income 3/31/98 -9.79% n/a -5.85% -5.19% n/a -3.67%
Goldman Sachs VIT
International Equity 3/31/98 20.00% n/a 10.34% 24.60% n/a 12.18%
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Kemper Variable Series
Kemper Government
Securities 12/31/97 -1.46% n/a 1.68% 3.14% n/a 3.49%
Kemper Small Cap Growth 12/31/97 34.14% n/a 21.58% 38.74% n/a 22.98%
Kemper Small Cap Value 12/31/97 -10.76% n/a -7.69% -6.16% n/a -5.60%
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Liberty Variable Investment Trust
Newport Tiger Fund,
Variable Series 12/31/97 23.11% n/a 16.86% 27.71% n/a 18.35%
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MFS Variable Insurance Trust
MFS Emerging Growth 12/31/97 46.32% n/a 36.89% 50.92% n/a 38.08%
MFS Emerging Markets Equity 12/31/97 1.54% n/a -8.47% 6.14% n/a -6.34%
MFS Global Governments 12/31/97 -4.17% n/a -0.57% 0.43% n/a 1.30%
MFS Growth With Income 12/31/97 -4.69% n/a 8.32% -0.09% n/a 9.97%
MFS High Income 12/31/97 -4.35% n/a -0.66% 0.25% n/a 1.22%
MFS Research 12/31/97 14.87% n/a 18.41% 19.47% n/a 19.87%
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Oppenheimer Variable Account Funds
Oppenheimer Bond Fund/VA 12/31/97 -3.90% n/a -0.39% 0.70% n/a 1.48%
Oppenheimer Capital
Appreciation Fund/VA 12/31/97 27.36% n/a 26.83% 31.96% n/a 28.15%
Oppenheimer High
Income Fund/VA 12/31/97 -6.15% n/a -1.68% -1.55% n/a 0.22%
<PAGE>
Oppenheimer Main Street
Growth & Income Fund/VA 12/31/97 0.28% n/a 7.12% 4.88% n/a 8.81%
Oppenheimer Strategic
Bond Fund/VA 12/31/97 -1.56% n/a -0.22% 3.03% n/a 1.64%
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Putnam Variable Trust
Putnam VT Growth and
Income - Class IA Shares 12/31/97 -16.69% n/a 2.13% -12.09% n/a 3.93%
Putnam VT International
Growth - Class IA Shares 12/31/97 36.84% n/a 26.62% 41.44% n/a 27.95%
Putnam VT International
New Opportunities -
Class IA Shares 12/31/97 36.96% n/a 28.52% 41.56% n/a 29.82%
Putnam VT New Value -
Class IA Shares 12/31/97 -15.51% n/a 0.58% -10.91% n/a 2.42%
Putnam VT Vista -
Class IA Shares 12/31/97 50.82% n/a 32.15% 55.42% n/a 33.40%
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</TABLE>
<TABLE>
<CAPTION>
APPENDIX C
PERFORMANCE INFORMATION (continued)
PART 2 - HISTORICAL FUND PERFORMANCE
Certain portfolios have been in existence for some time and have an investment
performance history. In order to show how the historical performance of the
portfolios affects the contract's accumulation unit values, the following
performance information was developed.
The information is based upon the historical experience of the portfolios and is
for the periods shown. The chart below shows the investment performance of the
portfolios and the accumulation unit performance calculated by assuming that the
contracts were invested in the portfolios for the same periods.
o The performance figures in Column A reflect the fees and expenses paid by
each portfolio.
o Column B presents performance figures for the accumulation units which
reflect the insurance charges, the contract maintenance charge, the fees
and expenses of each portfolio, and assumes that you make a withdrawal at
the end of the period and therefore the withdrawal charge is reflected.
o Column C presents performance figures for the accumulation units which
reflect the insurance charges and the fees and expenses of each portfolio.
o Performance figures shown for portfolios in existence for less than one
year are not annualized.
<PAGE>
Total Return for the periods ended 6/30/00:
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Accumulation Unit Performance
Column B Column C
(reflects all (reflects insurance
Portfolio Performance charges and charges and portfolio
Column A portfolio expenses) expenses)
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio 10 yrs or 10 yrs or 10 yrs or
Inception since since since
Portfolio Date 1 yr 5 yrs inception 1 yr 5 yrs inception 1 yr 5 yrs inception
- ----------------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds
AIM V.I. Capital
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Appreciation 5/5/93 42.91% 22.36% 21.98% 25.91% 20.86% 20.48% 30.51% 20.96% 20.58%
International Equity 5/5/93 32.34% 17.27% 15.54% 7.02% 15.77% 14.04% 11.62% 15.87% 14.14%
AIM V.I. Value 5/5/93 13.20% 21.82% 21.26% 36.32% 20.32% 19.76% 40.92% 20.42% 19.86%
- ----------------------------------------------------------------------------------------------------------------------------------
Alliance Variable Products Series Fund, Inc.
Premier Growth
(Class A) 6/26/92 20.57% 30.30% 24.99% 14.29% 28.80% 23.49% 18.89% 28.90% 23.59%
Real Estate
Investment (Class A) 1/9/97 3.79% n/a 2.76% -2.26% n/a -0.06% 2.35% n/a 1.36%
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Franklin Templeton Variable Insurance Products Trust,
Class 1 Shares
Mutual Shares
Securities (1) 11/08/96 0.24% n/a 9.69% -10.97% n/a 6.09% -6.37% n/a 8.29%
Templeton Developing
Markets Securities
Fund (2) 3/04/96 -10.74% n/a -8.71% -16.59% n/a -11.27% -11.99% n/a -10.11%
Templeton
International
Securities Fund (3) 5/01/92 12.73% 15.54% 14.44% 6.57% 14.04% 12.94% 11.17% 14.14% 13.04%
Franklin Small Cap
Fund (4) 11/01/95 80.21% n/a 28.51% 60.03% n/a 26.03% 64.63% n/a 27.11%
<PAGE>
1) 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.
(2) Previously, the 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.
(3) Previously, 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 and inception date
of the Templeton International Securities Fund.
(4) 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.
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
General American Capital Company
Money Market 10/1/87 5.88% 5.61% 5.24% -0.20% 4.11% 3.74% 4.40% 4.21% 3.84%
- ----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust
Goldman Sachs VIT
Global Income 1/12/98 3.71% n/a 4.20% -2.33% n/a 0.85% 2.27% n/a 2.80%
Goldman Sachs VIT
Growth and Income 1/12/98 -3.83% n/a 4.70% -9.79% n/a 1.35% -5.19% n/a 3.30%
Goldman Sachs VIT
International Equity 1/12/98 26.28% n/a 19.68% 20.00% n/a 16.33% 24.60% n/a 18.28%
- ----------------------------------------------------------------------------------------------------------------------------------
Kemper Variable Series
Kemper Government
Securities 9/3/87 4.60% 5.91% 7.24% -1.46% 4.41% 5.74% 3.14% 4.51% 5.84%
Kemper Small
Cap Growth 5/2/94 40.72% 27.42% 25.37% 34.14% 25.92% 23.87% 38.74% 26.02% 23.97%
Kemper Small
Cap Value 5/1/96 -4.82% n/a 2.54% -10.76% n/a -0.06% -6.16% n/a 1.14%
- ----------------------------------------------------------------------------------------------------------------------------------
Liberty Variable Investment Trust
Newport Tiger Fund,
Variable Series 5/1/95 29.44% 4.92% 6.51% 23.11% 3.42% 5.01% 27.71% 3.52% 5.11%
- ----------------------------------------------------------------------------------------------------------------------------------
<PAGE>
MFS Variable Insurance Trust
MFS Emerging
Growth 7/24/95 53.05% n/a 31.60% 46.32% n/a 29.17% 50.92% n/a 30.20%
MFS Emerging Markets
Equity 10/16/97 7.65% n/a -8.35% 1.54% n/a -11.54% 6.14% n/a -9.75%
MFS Global
Governments 6/14/94 1.84% 2.48% 3.97% -4.17% 0.98% 2.47% 0.43% 1.08% 2.57%
MFS Growth
With Income 10/09/95 1.33% n/a 18.83% -4.69% n/a 16.36% -0.09% n/a 17.43%
MFS High Income 7/26/95 1.67% n/a 7.43% -4.35% n/a 5.00% 0.25% n/a 6.03%
MFS Research 7/26/95 21.16% n/a 21.83% 14.87% n/a 19.40% 19.47% n/a 20.43%
MFS New Discovery 5/1/98 56.28% n/a 35.18% 50.28% n/a 31.58% 54.88% n/a 33.78%
- ----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account
Funds
Oppenheimer Bond
Fund/VA 4/03/85 2.12% 5.41% 7.63% -3.90% 3.91% 6.13% 0.70% 4.01% 6.23%
Oppenheimer Capital
Appreciation
Fund/VA 4/03/85 33.83% 28.17% 20.01% 27.36% 26.67% 18.51% 31.96% 26.77% 18.61%
Oppenheimer High
Income Fund/VA 4/30/86 -0.16% 7.81% 11.96% -6.15% 6.31% 10.46% -1.55% 6.41% 10.56%
Oppenheimer Main
Street Growth &
Income Fund/VA 7/05/95 6.37% n/a 23.00% 0.28% n/a 20.58% 4.88% n/a 21.60%
Oppenheimer Strategic
Bond Fund/VA 5/03/93 4.49% 7.02% 6.00% -1.56% 5.52% 4.50% 3.03% 5.62% 4.60%
- ----------------------------------------------------------------------------------------------------------------------------------
Putnam Variable Trust
Putnam VT Growth
and Income -
Class IA Shares 2/01/88 -10.85% 14.68% 13.25% -16.69% 13.18% 11.75% -12.09% 13.28% 11.85%
Putnam VT International
Growth - Class
IA Shares 1/02/97 43.43% n/a 25.69% 36.84% n/a 22.88% 41.44% n/a 24.29%
Putnam VT International
New Opportunities -
Class IA Shares 1/02/97 43.56% n/a 21.64% 36.96% n/a 18.83% 41.56% n/a 20.24%
<PAGE>
Putnam VT New Value -
Class IA Shares 1/02/97 -9.71% n/a 7.58% -15.51% n/a 4.77% -10.91% n/a 6.18%
Putnam VT Vista -
Class IA Shares 1/02/97 57.61% n/a 31.73% 50.82% n/a 28.92% 55.42% n/a 30.33%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SUPPLEMENT TO VERSION B OF THE PROSPECTUS
COVA FINANCIAL LIFE INSURANCE COMPANY
COVA VARIABLE ANNUITY ACCOUNT FIVE
Supplement dated September 1, 2000
The following supplements certain information contained in your Cova variable
annuity prospectus:
1. The following accumulation unit values for the period ended June 30, 2000 are
added to Appendix A:
- ------------------------------------------------------------------------
Russell Insurance Funds
Aggressive Equity Sub-Account
Beginning of Period $10.46
End of Period $10.74
Number of Accum. Units 68,153
Outstanding
- ------------------------------------------------------------------------
Core Bond Sub-Account
Beginning of Period $10.42
End of Period $10.73
Number of Accum. Units 250,199
Outstanding
- -------------------------------------------------------------------------
Multi-Style Equity Sub-Account
Beginning of Period $14.72
End of Period $13.98
Number of Accum. Units 305,939
Outstanding
- ---------------------------------------------------------------------------
Non-U.S. Sub-Account
Beginning of Period $14.71
End of Period $13.92
<PAGE>
Number of Accum. Units 138,959
Outstanding
- ----------------------------------------------------------------------------
Real Estate Securities Sub-Account
Beginning of Period $ 9.40
End of Period $10.44
Number of Accum. Units 17,600
Outstanding
-------------------------------------------------------------------------------
General American Capital Company
Money Market Sub-Account
Beginning of Period $11.53
End of Period $11.80
Number of Accum. Units 185,974
Outstanding
2. The following replaces Appendix B - 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 June 30, 2000. 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 June 30, 2000 may be
different than the numbers shown below.
PART 1 - SEPARATE ACCOUNT PERFORMANCE
The portfolios listed below began operations before June 30, 2000. As a result,
performance information is available for the accumulation unit values investing
in these portfolios.
o Column A 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.
o Column B presents performance figures for the accumulation units which
reflect the insurance charges and the fees and expenses of the portfolio.
<TABLE>
<CAPTION>
Total Return for the periods ended 6/30/00:
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Performance
Column A Column B
(reflects all (reflects insurance
charges and charges and
<PAGE>
portfolio expenses) portfolio expenses)
- ----------------------------------------------------------------------------------------------------------------------------------
Separate Account
Inception Date since since
Portfolio in Portfolio 1 yr inception 1 yr inception
- ----------------------------------------------------------------------------------------------------------------------------------
Russell Insurance Funds
<S> <C> <C> <C> <C> <C>
Aggressive Equity 12/31/97 2.48% 1.08% 7.08% 2.91%
Core Bond 12/31/97 -1.84% 1.03% 2.76% 2.85%
Multi-Stye Equity 12/31/97 -6.07% 12.78% -1.47% 14.34%
Non-U.S. 12/31/97 12.53% 12.59% 17.13% 14.16%
Real Estate Securities 7/01/99 n/a -0.72% n/a 4.38%
General American
Capital Company
Money Market 12/4/97 -0.20% 2.35% 4.40% 4.13%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Appendix - Performance Information (continued)
PART 2 - HISTORICAL FUND PERFORMANCE
The portfolios of Russell Insurance Funds and the Money Market Fund of General
American Capital Company have been in existence for some time and have an
investment performance history. In order to show how the historical performance
of the portfolios affects the contract's accumulation unit values, the following
performance was developed. The information is based upon the historical
experience of the portfolios and is for the periods shown.
The chart below shows the investment performance of the portfolios and the
accumulation unit performance calculated by assuming that the contracts were
invested in the portfolios for the same periods.
o The performance figures in Column A reflect the fees and expenses paid by
each portfolio.
o Column B presents performance figures for the accumulation units which
reflect the insurance charges, the contract maintenance charge, the fees
and expenses of each portfolio, and assumes that you make a withdrawal at
<PAGE>
the end of the period and therefore the withdrawal charge is reflected.
o Column C presents performance figures for the accumulation units which
reflect the insurance charges and the fees and expenses of each portfolio.
Total Return for the periods ended 6/30/00:
-----------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Performance
Column B Column C
(reflects all (reflects insurance
Portfolio Performance charges and charges and
Column A portfolio expenses) portfolio expenses)
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio 10 yrs or 10 yrs or 10 yrs or
Inception since since since
Portfolio Date 1 yr 5 yrs inception 1 yr 5 yrs inception 1 yr 5 yrs inception
- ----------------------------------------------------------------------------------------------------------------------------------
Russell Insurance Funds
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Equity 1/2 /97 8.57% n/a 12.24% 2.48% n/a 9.43% 7.08% n/a 10.84%
Core Bond 1/2 /97 4.21% n/a 5.72% -1.84% n/a 2.91% 2.76% n/a 4.32%
Multi-Style Equity 1/2 /97 -0.08% n/a 19.32% -6.07% n/a 16.51% -1.47% n/a 17.92%
Non-U.S. 1/2 /97 18.73% n/a 11.01% 12.53% n/a 8.20% 17.13% n/a 9.61%
Real Estate Securities 4/30/99 5.32% n/a 3.17% -0.68% n/a -2.19% 3.92% n/a 1.77%
------------------------------------------------------------------------------------------------------------------------------------
General American
Capital Company
Money Market 10/1/87 5.88% 5.61% 5.24% -0.20% 4.11% 3.74% 4.40% 4.21% 3.84%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SUPPLEMENT TO VERSION C OF THE PROSPECTUS
COVA FINANCIAL LIFE INSURANCE COMPANY
COVA VARIABLE ANNUITY ACCOUNT FIVE
<PAGE>
Supplement dated September 1, 2000
The following supplements certain information contained in your Cova variable
annuity prospectus:
1. The MFS New Discovery Series of MFS Variable Insurance Trust is an available
investment portfolio under your contract. Massachusetts Financial Services
Company is the investment adviser to the MFS New Discovery Series.
Investment Objective: The Series' investment objective is capital
appreciation. The Series invests, under normal market conditions, at least 65%
of its total assets in equity securities of emerging growth companies.
2. The following is added to the Investment Portfolio Expenses table -
MFS Variable Insurance Trust:
Management Other Expenses(a) Total Annual (a)
Fees (after expense Portfolio Expenses
reimbursement) (after expense reimbursement)
MFS New Discovery Series .90% .17%(b) 1.07% (b)
(a) The Series has an expense offset arrangement which reduces the
Series' custodian fee based on cash maintained by the Series with its custodian
and dividend disbursing agent. The Series may enter into other such arrangements
and directed brokerage arrangements, which would also have the effect of
reducing the Series' expenses. "Other Expenses" above do not take into account
these expense reductions, and are therefore higher than the actual expenses of
the Series. Had these fee reductions been taken into account, net expenses would
be lower and would equal 1.05%.
(b) MFS has contractually agreed, subject to reimbursement, to bear expenses for
the Series such that the Series' "Other Expenses" (after taking into account the
expense offset arrangement described above) do not exceed .15% of the average
daily net assets of the Series during the current fiscal year. This contractual
fee arrangement will continue until at least May 1, 2001, unless changed with
the consent of the board of trustees which oversees the series. Absent the
reimbursement, "Total Annual Portfolio Expenses" were 2.49%.
3. The following Examples are added:
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.
<PAGE>
Time Periods
1 Year 3 Years
MFS New Discovery Series (a) $76.00 (a) $124.77
(b) $26.00 (b) $ 79.77
4. The following accumulation unit values for the period ended June 30, 2000 are
added to Appendix A:
AIM Variable Insurance Funds Managed by A I M Advisors, Inc.
AIM V.I. Capital Appreciation Sub-Account
Beginning of Period $16.83
End of Period $18.09
Number of Accum. Units Outstanding 144,086
- ----------------------------------------------------------------------------
AIM V.I. International Equity Sub-Account
Beginning of Period $17.46
End of Period $15.46
Number of Accum. Units Outstanding 33,438
- ----------------------------------------------------------------------------
AIM V.I. Value Sub-Account
Beginning of Period $16.75
End of Period $16.59
Number of Accum. Units Outstanding 267,530
- ----------------------------------------------------------------------------
Alliance Variable Products Series Fund, Inc. (Class A)
Managed by Alliance Capital Management L.P.
Premier Growth Sub-Account
Beginning of Period $19.08
End of Period $19.53
Number of Accum. Units Outstanding 183,290
- ----------------------------------------------------------------------------
Real Estate Investment Sub-Account
Beginning of Period $ 7.49
End of Period $ 8.62
Number of Accum. Units Outstanding 43,763
- ----------------------------------------------------------------------------
American Century Variable Portfolios, Inc
Managed by American Century Investment Management, Inc.
Beginning of Period $10.32
<PAGE>
End of Period $ 9.88
Number of Accum. Units Outstanding 23,649
-----------------------------------------------------------------------------
VP International Sub-Account
Beginning of Period $12.52
End of Period $11.71
Number of Accum. Units Outstanding 1,110
-----------------------------------------------------------------------------
VP Value Sub-Account
Beginning of Period $ 9.59
End of Period $ 9.14
Number of Accum. Units Outstanding 14,030
------------------------------------------------------------------------------
Cova Series Trust
Managed by Lord, Abbett & Co.
Bond Debenture Sub-Account
Beginning of Period $13.77
End of Period $13.86
Number of Accum. Units Outstanding 852,246
- ----------------------------------------------------------------------------
Developing Growth Sub-Account
Beginning of Period $14.45
End of Period $12.66
Number of Accum. Units Outstanding 173,414
- ----------------------------------------------------------------------------
Large Cap Research Sub-Account
Beginning of Period $14.64
End of Period $13.84
Number of Accum. Units Outstanding 168,976
- ----------------------------------------------------------------------------
Lord Abbett Growth and Income Sub Account
Beginning of Period $39.46
End of Period $38.33
Number of Accum. Units Outstanding 1,259,585
- ----------------------------------------------------------------------------
Mid-Cap Value Sub-Account
Beginning of Period $10.88
End of Period $12.72
Number of Accum. Units Outstanding 146,325
- ----------------------------------------------------------------------------
Managed by J.P. Morgan Investment Management Inc.
International Equity Sub-Account
Beginning of Period $16.33
End of Period $15.56
Number of Accum. Units Outstanding 867,246
- ----------------------------------------------------------------------------
<PAGE>
Large Cap Stock Sub-Account
Beginning of Period $22.55
End of Period $21.91
Number of Accum. Units Outstanding 1,589,429
- ----------------------------------------------------------------------------
Quality Bond Sub-Account
Beginning of Period $11.57
End of Period $11.90
Number of Accum. Units Outstanding 567,481
- ----------------------------------------------------------------------------
Select Equity Sub-Account
Beginning of Period $18.38
End of Period $18.07
Number of Accum. Units Outstanding 1,241,253
- ----------------------------------------------------------------------------
Small Cap Stock Sub-Account
Beginning of Period $17.93
End of Period $17.95
Number of Accum. Units Outstanding 672,460
- ----------------------------------------------------------------------------
Dreyfus Stock Index Fund
Managed by The Dreyfus Corporation
Dreyfus Stock Index Fund Sub-Account
Beginning of Period $10.34
End of Period $10.22
Number of Accum. Units Outstanding 11,713
-----------------------------------------------------------------------------
Dreyfus Variable Investment Fund
Managed by The Dreyfus Corporation
Dreyfus VIF - Appreciation Sub-Account
Beginning of Period $10.13
End of Period $10.35
Number of Accum. Units Outstanding 21,058
-------------------------------------------------------------------------------
Dreyfus VIF - Disciplined Stock Sub-Account
Beginning of Period $10.31
End of Period $10.28
Number of Accum. Units Outstanding 3,866
-------------------------------------------------------------------------------
Franklin Templeton Variable Insurance Products Trust,
Class 1 Shares
Managed by Franklin Advisers, Inc.
<PAGE>
Franklin Small Cap Sub-Account
Beginning of Period $17.72
End of Period $18.37
Number of Accum. Units Outstanding 45,972
--------------------------------------------------------------------------------
Managed by Franklin Mutual Advisers, LLC
Mutual Shares Securities Sub-Account
Beginning of Period $10.43
End of Period $10.41
Number of Accum. Units Outstanding 26,134
- ----------------------------------------------------------------------------
Managed by Templeton Asset Management Ltd.
Templeton Developing Markets Securities Sub-Account
Beginning of Period $11.48
End of Period $ 9.47
Number of Accum. Units Outstanding 28,284
- ----------------------------------------------------------------------------
Managed by Templeton Investment Counsel, Inc.
Templeton International Securities Sub-Account
Beginning of Period $11.16
End of Period $11.14
Number of Accum. Units Outstanding 65,773
- -----------------------------------------------------------------------------
Managed by Franklin Advisers, Inc.
Franklin Small Cap Sub-Account
Beginning of Period $17.72
End Of Period $18.37
Number of Accum Units Outstanding 45,972
- ------------------------------------------------------------------------------
General American Capital Company
Managed by Conning Asset Management Company
Money Market Sub-Account
Beginning of Period $11.53
End of Period $11.80
Number of Accum. Units Outstanding 185,974
- ------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust
Managed by Goldman Sachs Asset Management
Goldman Sachs VIT Growth and Income Sub-Account
Beginning of Period $10.30
End of Period $10.31
Number of Accum. Units Outstanding 29,973
- -----------------------------------------------------------------------------
<PAGE>
Managed by Goldman Sachs Asset Management International
Goldman Sachs VIT Global Income Sub-Account
Beginning of Period $10.56
End of Period $10.82
Number of Accum. Units Outstanding 4,097
- -----------------------------------------------------------------------------
Goldman Sachs VIT International Equity Sub-Account
Beginning of Period $14.84
End of Period $14.51
Number of Accum. Units Outstanding 27,159
- -----------------------------------------------------------------------------
INVESCO Variable Investment Funds, Inc.
Managed by INVESCO Funds Group, Inc.
INVESCO VIF - Dynamics Sub-Account
Beginning of Period $11.15
End of Period $12.59
Number of Accum. Units Outstanding 18,450
-------------------------------------------------------------------------------
INVESCO VIF - High Yield Sub-Account
Beginning of Period $10.12
End of Period $ 9.92
Number of Accum. Units Outstanding 2,812
-------------------------------------------------------------------------------
Kemper Variable Series
Managed by Scudder Kemper Investments, Inc.
Kemper Government Securities Sub-Account
Beginning of Period $10.56
End of Period $10.90
Number of Accum. Units Outstanding 22,626
- -----------------------------------------------------------------------------
Kemper Small Cap Growth Sub-Account
Beginning of Period $15.51
End of Period $16.77
Number of Accum. Units Outstanding 10,308
- ------------------------------------------------------------------------------
Kemper Small Cap Value Sub-Account
Beginning of Period $ 8.89
End of Period $ 8.66
Number of Accum. Units Outstanding 31,724
-------------------------------------------------------------------------------
Liberty Variable Investment Trust
Managed by Newport Fund Management, Inc.
Newport Tiger Fund, Variable Sub-Account
Beginning of Period $15.40
End of Period $15.23
<PAGE>
Number of Accum. Units Outstanding 4,340
- -----------------------------------------------------------------------------
MFS Variable Insurance Trust
Managed by Massachusetts Financial Services Company
MFS Emerging Growth Sub-Account
Beginning of Period $23.08
End of Period $22.39
Number of Accum. Units Outstanding 78,755
- ------------------------------------------------------------------------------
MFS Global Governments Sub-Account
Beginning of Period $10.25
End of Period $10.33
Number of Accum. Units Outstanding 1,299
- ------------------------------------------------------------------------------
MFS Growth With Income Sub-Account
Beginning of Period $12.70
End of Period $12.68
Number of Accum. Units Outstanding 132,313
- -----------------------------------------------------------------------------
MFS High Income Sub-Account
Beginning of Period $10.35
End of Period $10.31
Number of Accum. Units Outstanding 26,061
- -----------------------------------------------------------------------------
MFS Research Sub-Account
Beginning of Period $14.90
End of Period $15.73
Number of Accum. Units Outstanding 74,223
- ------------------------------------------------------------------------------
PIMCO Variable Insurance Trust
Managed by Pacific Investment Management Company
PIMCO High Yield Bond Sub-Account
Beginning of Period $10.08
End of Period $ 9.93
Number of Accum. Units Outstanding 10
--------------------------------------------------------------------------------
PIMCO Low Duration Bond Sub-Account
Beginning of Period $ 9.97
End of Period $10.25
Number of Accum. Units Outstanding 10
--------------------------------------------------------------------------------
PIMCO StocksPLUS Growth and Income Sub-Account
Beginning of Period $10.31
End of Period $10.15
Number of Accum. Units Outstanding 10
<PAGE>
-------------------------------------------------------------------------------
PIMCO Total Return Bond Sub-Account
Beginning of Period $ 9.90
End of Period $10.16
Number of Accum. Units Outstanding 3,028
-------------------------------------------------------------------------------
Putnam Variable Trust
Managed by Putnam Investment Management, Inc.
Putnam VT Growth and Income Sub-Account
Beginning of Period $11.42
End of Period $11.01
Number of Accum. Units Outstanding 140,549
- ------------------------------------------------------------------------------
Putnam VT International Growth Sub-Account
Beginning of Period $18.52
End of Period $18.51
Number of Accum. Units Outstanding 107,300
- -----------------------------------------------------------------------------
Putnam VT International New Opportunities Sub-Account
Beginning of Period $22.86
End of Period $19.19
Number of Accum. Units Outstanding 16,456
- ------------------------------------------------------------------------------
Putnam VT New Value Sub-Account
Beginning of Period $10.38
End of Period $10.62
Number of Accum. Units Outstanding 3,280
- ------------------------------------------------------------------------------
Putnam VT Vista Sub-Account
Beginning of Period $17.80
End of Period $20.55
Number of Accum. Units Outstanding 26,239
--------------------------------------------------------------------------------
Scudder Variable Life Investment Fund
Managed by Scudder Kemper Investments, Inc.
International Sub-Account
Beginning of Period $11.64
End of Period $10.30
Number of Accum. Units Outstanding 13,114
------------------------------------------------------------------------------
5. The following replaces Appendix C - Performance Information:
<PAGE>
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 June 30, 2000. 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 June 30, 2000 may be
different than the numbers shown below.
PART 1 - SEPARATE ACCOUNT PERFORMANCE
The portfolios listed below began operations before June 30, 2000. As a result,
performance information is available for the accumulation units investing in
these portfolios.
o Column A presents performance figures for the accumulation units which
reflect the insurance charges, the contract maintenance charge, the fees
and expenses of each portfolio, and assumes that you make a withdrawal at
the end of the period and therefore the withdrawal charge is reflected.
o Column B presents performance figures for the accumulation units which
reflect the insurance charges and fees and expenses of each portfolio.
o Performance figures shown for sub-accounts in existence for less than one
year are not annualized.
Total Return for the periods ended 6/30/00:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Performance
Column A Column B
(reflects all (reflects insurance
charges and charges and portfolio
portfolio expenses) expenses)
- ----------------------------------------------------------------------------------------------------------------------------------
Separate Account
Inception Date Since Since
Portfolio in Portfolio 1 yr 5 yrs inception 1 yr 5 yrs inception
- ----------------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance
Funds
<S> <C> <C> <C> <C> <C> <C> <C>
<PAGE>
AIM V.I. Capital
Appreciation 12/31/97 36.32% n/a 25.42% 40.92% n/a 26.76%
AIM V.I. International
Equity 12/31/97 25.91% n/a 17.56% 30.51% n/a 19.03%
AIM V.I. Value 12/31/97 7.02% n/a 21.04% 11.62% n/a 22.45%
- ----------------------------------------------------------------------------------------------------------------------------------
Alliance Variable Products
Series Fund, Inc.
Premier Growth (Class A) 12/31/97 14.29% n/a 29.43% 18.89% n/a 30.71%
Real Estate Investment (Class A) 12/31/97 -2.26% n/a -7.86% 2.35% n/a -5.77%
- ----------------------------------------------------------------------------------------------------------------------------------
Cova Series Trust
Bond Debenture 5/20/96 -2.18% n/a 6.90% 2.42% n/a 7.88%
Developing Growth 11/7/97 -5.09% n/a 4.40% -0.49% n/a 6.08%
International Equity 5/14/96 10.43% n/a 10.14% 15.03% n/a 11.04%
Large Cap Research 2/17/98 -0.71% n/a 9.45% 3.89% n/a 11.24%
Large Cap Stock 5/16/96 -3.91% n/a 19.79% 0.69% n/a 20.49%
Lord Abbett Growth and Income 1/8/99 -6.55% n/a 1.46% -1.95% n/a 4.53%
Mid-Cap Value 11/7/97 5.40% n/a 7.71% 10.01% n/a 9.31%
Quality Bond 5/20/96 -1.82% n/a 3.37% 2.78% n/a 4.45%
Select Equity 5/15/96 -8.40% n/a 14.19% -3.80% n/a 14.99%
Small Cap Stock 5/15/96 30.89% n/a 11.97% 35.49% n/a 12.83%
- ----------------------------------------------------------------------------------------------------------------------------------
Franklin Templeton Variable Insurance Products Trust,
Class 1 Shares
Mutual Shares Securities (1) 9/21/98 -10.97% n/a -3.80% -6.37% n/a -1.56%
Templeton Developing
Markets Securities (2) 9/21/98 -16.59% n/a 31.68% -11.99% n/a 33.81%
Templeton International
Securities (3) 9/21/98 6.57% n/a 19.14% 11.17% n/a 21.44%
Franklin Small Cap (4) 3/1/99 60.03% n/a 64.89% 64.63% n/a 67.82%
<PAGE>
(1) 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.
(2) 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.
(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 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.
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
General American Capital Company
Money Market 12/4/97 -0.20% n/a 2.35% 4.40% n/a 4.13%
- ----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Variable
Insurance Trust
Goldman Sachs
VIT Global Income 3/31/98 -2.33% n/a 0.85% 2.27% n/a 2.89%
Goldman Sachs VIT Growth
and Income 3/31/98 -9.79% n/a -5.85% -5.19% n/a -3.67%
Goldman Sachs VIT
International Equity 3/31/98 20.00% n/a 10.34% 24.60% n/a 12.18%
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Kemper Variable Series
Kemper Government
Securities 12/31/97 -1.46% n/a 1.68% 3.14% n/a 3.49%
Kemper Small Cap Growth 12/31/97 34.14% n/a 21.58% 38.74% n/a 22.98%
Kemper Small Cap Value 12/31/97 -10.76% n/a -7.69% -6.16% n/a -5.60%
<PAGE>
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Liberty Variable Investment Trust
Newport Tiger Fund,
Variable Series 12/31/97 23.11% n/a 16.86% 27.71% n/a 18.35%
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MFS Variable Insurance Trust
MFS Emerging Growth 12/31/97 46.32% n/a 36.89% 50.92% n/a 38.08%
MFS Global Governments 12/31/97 -4.17% n/a -0.57% 0.43% n/a 1.30%
MFS Growth With Income 12/31/97 -4.69% n/a 8.32% -0.09% n/a 9.97%
MFS High Income 12/31/97 -4.35% n/a -0.66% 0.25% n/a 1.22%
MFS Research 12/31/97 14.87% n/a 18.41% 19.47% n/a 19.87%
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Putnam Variable Trust
Putnam VT Growth and
Income - Class IA Shares 12/31/97 -16.69% n/a 2.13% -12.09% n/a 3.93%
Putnam VT International
Growth - Class IA Shares 12/31/97 36.84% n/a 26.62% 41.44% n/a 27.95%
Putnam VT International
New Opportunities -
Class IA Shares 12/31/97 36.96% n/a 28.52% 41.56% n/a 29.82%
Putnam VT New Value -
Class IA Shares 12/31/97 -15.51% n/a 0.58% -10.91% n/a 2.42%
Putnam VT Vista -
Class IA Shares 12/31/97 50.82% n/a 32.15% 55.42% n/a 33.40%
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</TABLE>
<TABLE>
<CAPTION>
APPENDIX C
PERFORMANCE INFORMATION (continued)
PART 2 - HISTORICAL FUND PERFORMANCE
Certain portfolios have been in existence for some time and have an investment
performance history. In order to show how the historical performance of the
portfolios affects the contract's accumulation unit values, the following
performance information was developed.
The information is based upon the historical experience of the portfolios and is
for the periods shown. The chart below shows the investment performance of the
portfolios and the accumulation unit performance calculated by assuming that the
<PAGE>
contracts were invested in the portfolios for the same periods.
o The performance figures in Column A reflect the fees and expenses paid by
each portfolio.
o Column B presents performance figures for the accumulation units which
reflect the insurance charges, the contract maintenance charge, the fees
and expenses of each portfolio, and assumes that you make a withdrawal at
the end of the period and therefore the withdrawal charge is reflected.
o Column C presents performance figures for the accumulation units which
reflect the insurance charges and the fees and expenses of each portfolio.
o Performance figures shown for portfolios in existence for less than one
year are not annualized.
Total Return for the periods ended 6/30/00:
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Performance
Column B Column C
(reflects all (reflects insurance
Portfolio Performance charges and charges and portfolio
Column A portfolio expenses) expenses)
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio 10 yrs or 10 yrs or 10 yrs or
Inception since since since
Portfolio Date 1 yr 5 yrs inception 1 yr 5 yrs inception 1 yr 5 yrs inception
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AIM Variable Insurance Funds
AIM V.I. Capital
Appreciation 5/5/93 42.91% 22.36% 21.98% 25.91% 20.86% 20.48% 30.51% 20.96% 20.58%
AIM V.I.
International Equity 5/5/93 32.34% 17.27% 15.54% 7.02% 15.77% 14.04% 11.62% 15.87% 14.14%
AIM V.I. Value 5/5/93 13.20% 21.82% 21.26% 36.32% 20.32% 19.76% 40.92% 20.42% 19.86%
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Alliance Variable Products Series Fund, Inc.
Premier Growth
(Class A) 6/26/92 20.57% 30.30% 24.99% 14.29% 28.80% 23.49% 18.89% 28.90% 23.59%
Real Estate
Investment (Class A) 1/9/97 3.79% n/a 2.76% -2.26% n/a -0.06% 2.35% n/a 1.36%
<PAGE>
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American Century Variable Portfolios, Inc.
VP Income & Growth 10/30/97 3.68% n/a 18.05% -2.32% n/a 14.84% 2.28% n/a 16.65%
VP International 5/1/94 43.62% 21.81% 17.13% 37.62% 20.31% 15.63% 42.22% 20.41% 15.73%
VP Value 5/1/96 -15.88% n/a 8.64% -21.88% n/a 6.04% -17.28% n/a 7.24%
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Dreyfus Stock Index Fund 9/29/89 6.96% 22.38% 17.31% 0.96% 20.88% 15.81% 5.56% 20.98% 15.91%
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Dreyfus Variable Investment Fund
Dreyfus VIF -
Appreciation 4/5/93 6.56% 22.29% 18.99% 0.56% 20.79% 17.49% 5.16% 20.89% 17.59%
Dreyfus VIF -
Disciplined Stock 5/1/96 7.56% n/a 22.78% 1.56% n/a 20.18% 6.16% n/a 21.38%
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Franklin Templeton Variable Insurance Products Trust,
Class 1 Shares
Mutual Shares
Securities (1) 11/08/96 0.24% n/a 9.69% -10.97% n/a 6.09% -6.37% n/a 8.29%
Templeton Developing
Markets Securities
Fund (2) 3/04/96 -10.74% n/a -8.71% -16.59% n/a -11.27% -11.99% n/a -10.11%
Templeton
International
Securities Fund (3) 5/01/92 12.73% 15.54% 14.44% 6.57% 14.04% 12.94% 11.17% 14.14% 13.04%
Franklin Small Cap
Fund (4) 11/01/95 80.21% n/a 28.51% 60.03% n/a 26.03% 64.63% n/a 27.11%
1) 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.
(2) Previously, the 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.
(3) Previously, 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 and inception date
of the Templeton International Securities Fund.
(4) Effective May 1, 2000, the Franklin Small Cap Investments Fund (previously
offered under the contract) merged into the Franklin Small Cap Fund. Performance
<PAGE>
shown reflects historical performance and inception date of the Franklin Small
Cap Fund.
</TABLE>
<TABLE>
<CAPTION>
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
General American Capital Company
Money Market 10/1/87 5.88% 5.61% 5.24% -0.20% 4.11% 3.74% 4.40% 4.41% 3.84%
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Goldman Sachs Variable Insurance Trust
Goldman Sachs VIT
Global Income 1/12/98 3.71% n/a 4.20% -2.33% n/a 0.85% 2.27% n/a 2.80%
Goldman Sachs VIT
Growth and Income 1/12/98 -3.83% n/a 4.70% -9.79% n/a 1.35% -5.19% n/a 3.30%
Goldman Sachs VIT
International Equity 1/12/98 26.28% n/a 19.68% 20.00% n/a 16.33% 24.60% n/a 18.28%
- ----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
INVESCO Variable Investment Funds, Inc.
INVESCO VIF -
Dynamics 8/25/97 46.96% n/a 31.51% 40.96% n/a 28.41% 45.56% n/a 30.11%
INVESCO VIF -
High Yield 5/27/94 1.50% 10.24% 10.14% -4.50% 8.74% 8.64% 0.10% 8.84% 8.74%
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Kemper Variable Series
Kemper Government
Securities 9/3/87 4.60% 5.91% 7.24% -1.46% 4.41% 5.74% 3.14% 4.51% 5.84%
Kemper Small
Cap Growth 5/2/94 40.72% 27.42% 25.37% 34.14% 25.92% 23.87% 38.74% 26.02% 23.97%
Kemper Small
Cap Value 5/1/96 -4.82% n/a 2.54 -10.76% n/a -0.06% -6.16% n/a 1.14%
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Scudder Variable Life Investment Fund
International 5/1/87 25.18% 16.83% 11.19% 19.18% 15.33% 9.69% 23.78% 15.43% 9.79%
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Liberty Variable Investment Trust
Newport Tiger Fund,
Variable Series 5/1/95 29.44% 4.92% 6.51% 23.11% 3.42% 5.01% 27.71% 3.52% 5.11%
<PAGE>
- ----------------------------------------------------------------------------------------------------------------------------------
MFS Variable Insurance Trust
MFS Emerging
Growth 7/24/95 53.05% n/a 31.60% 46.32% n/a 29.17% 50.92% n/a 30.20%
MFS Global
Governments 6/14/94 1.84% 2.48% 3.97% -4.17% 0.98% 2.47% 0.43% 1.08% 2.57%
MFS Growth
With Income 10/09/95 1.33% n/a 18.83% -4.69% n/a 16.36% -0.09% n/a 17.43%
MFS High Income 7/26/95 1.67% n/a 7.43% -4.35% n/a 5.00% 0.25% n/a 6.03%
MFS Research 7/26/95 21.16% n/a 21.83% 14.87% n/a 19.40% 19.47% n/a 20.43%
MFS New Discovery 5/1/98 56.28% n/a 35.18% 50.28% n/a 31.58% 54.88% n/a 33.78%
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PIMCO Variable Insurance Trust
PIMCO High Yield Bond 4/30/98 0.60% n/a 1.80% -5.40% n/a -1.80% -0.80% n/a 0.40%
PIMCO Low
Duration Bond 2/16/99 4.14% n/a 3.97% -1.86% n/a -0.84% 2.74% n/a 2.57%
PIMCO StocksPLUS
Growth and Income 12/31/97 6.24% n/a 18.91% 0.24% n/a 15.58% 4.84% n/a 17.51%
PIMCO Total
Return Bond 12/31/97 4.62% n/a 4.51% -1.38% n/a 1.18% 3.22% n/a 3.11%
------------------------------------------------------------------------------------------------------------------------------------
Putnam Variable Trust
Putnam VT Growth
and Income -
Class IA Shares 2/01/88 -10.85% 14.68% 13.25% -16.69% 13.18% 11.75% -12.09% 13.28% 11.85%
Putnam VT International
Growth - Class
IA Shares 1/02/97 43.43% n/a 25.69% 36.84% n/a 22.88% 41.44% n/a 24.29%
Putnam VT International
New Opportunities -
Class IA Shares 1/02/97 43.56% n/a 21.64% 36.96% n/a 18.83% 41.56% n/a 20.24%
Putnam VT New Value -
Class IA Shares 1/02/97 -9.71% n/a 7.58% -15.51% n/a 4.77% -10.91% n/a 6.18%
Putnam VT Vista -
Class IA Shares 1/02/97 57.61% n/a 31.73% 50.82% n/a 28.92% 55.42% n/a 30.33%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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 SEPTEMBER 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 SEPTEMBER 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..................................................
FEDERAL TAX STATUS...........................................................
General ...........................................................
Diversification.....................................................
Multiple Contracts..................................................
<PAGE>
Contracts Owned by Other than Natural Persons.......................
Tax Treatment of Assignments or Transfer of Ownership...............
Death Benefits......................................................
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.
<PAGE>
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
<PAGE>
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
contract maintenance charge and withdrawal charge. The deduction of any contract
maintenance charge and 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.
The contracts are relatively new and therefore have no meaningful performance
history. However, the Separate Account and certain Portfolios have been in
existence for sometime and consequently have an investment performance history.
In order to show how the historical investment performance of the Separate
<PAGE>
Account and the Portfolios affect accumulation unit values, performance
information was developed. The information is based upon the historical
experience of the Separate Account and 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 for a Portfolio 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.
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
<PAGE>
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.
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
<PAGE>
excludible 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.
<PAGE>
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
acquiescence with the decision of the Tax Court, the
<PAGE>
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
<PAGE>
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 is used to fund a
qualified plan that is tax deferred. However, the contract has features and
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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 rollovers and transfers between certain Qualified 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
<PAGE>
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
<PAGE>
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
Statement of Assets and Liabilities
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Assets:
Investments:
Cova Series Trust (Cova):
<S> <C> <C> <C>
Lord Abbett Growth and Income Portfolio 2,118,444 shares at a net asset value of $22.879850 per share $ 48,469,681
Bond Debenture Portfolio 1,004,424 shares at a net asset value of $11.818836 per share 11,871,124
Developing Growth Portfolio 176,571 shares at a net asset value of $12.436639 per share 2,195,946
Large Cap Research Portfolio 180,144 shares at a net asset value of $12.981956 per share 2,338,621
Mid-Cap Value Portfolio 143,979 shares at a net asset value of $13.030863 per share 1,876,164
Quality Bond Portfolio 649,119 shares at a net asset value of $10.407309 per share 6,755,584
Small Cap Stock Portfolio 725,306 shares at a net asset value of $16.700167 per share 12,112,728
Large Cap Stock Portfolio 1,882,636 shares at a net asset value of $18.543961 per share 34,911,524
Select Equity Portfolio 1,514,619 shares at a net asset value of $14.816764 per share 22,441,752
International Equity Portfolio 933,259 shares at a net asset value of $14.530295 per share 13,560,534
General American Capital Company (GACC):
Money Market Fund 105,113 shares at a net asset value of $20.873908 per share 2,194,112
Russell Insurance Funds (Russell):
Multi-Style Equity Fund 274,677 shares at a net asset value of $15.57 per share 4,276,713
Aggressive Equity Fund 54,318 shares at a net asset value of $13.48 per share 732,207
Non-US Fund 147,584 shares at a net asset value of $13.11 per share 1,934,820
Core Bond Fund 272,529 shares at a net asset value of $9.85 per share 2,684,413
Real Estate Securities Fund 18,881 shares at a net asset value of $9.73 per share 183,709
AIM Variable Insurance Funds, Inc. (AIM):
AIM V.I. Value Fund 137,160 shares at a net asset value of $33.41 per share 4,582,512
AIM V.I. Capital Appreciation Fund 69,979 shares at a net asset value of $38.51 per share 2,694,874
AIM V.I. International Equity Fund 19,798 shares at a net asset value of $26.11 per share 516,918
Alliance Variable Products Series
Fund, Inc. (Alliance):
Premier Growth Portfolio 90,382 shares at a net asset value of $39.60 per share 3,579,111
Real Estate Investment Portfolio 38,343 shares at a net asset value of $9.84 per share 377,299
Liberty Variable Investment
Trust (Liberty):
Newport Tiger Fund, Variable Series 25,410 shares at a net asset value of $2.61 per share 66,320
Goldman Sachs Variable Insurance Trust
(Goldman Sachs):
Growth and Income Fund 28,161 shares at a net asset value of $10.97 per share 308,927
International Equity Fund 27,671 shares at a net asset value of $14.24 per share 394,030
Global Income Fund 4,369 shares at a net asset value of $10.15 per share 44,349
Kemper Variable Series (Kemper):
Dreman High Return Equity Portfolio 112 shares at a net asset value of $0.842450 per share 94
Kemper Small Cap Growth Portfolio 65,478 shares at a net asset value of $2.639950 per share 172,858
Kemper Small Cap Value Portfolio 259,472 shares at a net asset value of $1.058730 per share 274,711
Kemper Government Securities Portfolio 220,054 shares at a net asset value of $1.120430 per share 246,555
MFS Variable Insurance Trust (MFS):
MFS Bond Series 10 shares at a net asset value of $10.64 per share 105
MFS Research Series 50,235 shares at a net asset value of $23.24 per share 1,167,469
MFS Growth with Income Series 79,337 shares at a net asset value of $21.15 per share 1,677,979
MFS Emerging Growth Series 50,319 shares at a net asset value of $35.05 per share 1,763,667
MFS Emerging Markets Equity Series 3,821 shares at a net asset value of $7.77 per share 29,691
MFS High Income Series 25,413 shares at a net asset value of $10.57 per share 268,619
MFS Global Governments Series 1,386 shares at a net asset value of $9.68 per share 13,415
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Assets and Liabilities
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Assets, continued:
Investments, continued:
Oppenheimer Variable Account Funds (Oppenheimer):
<S> <C> <C> <C>
Oppenheimer Capital Appreciation Fund 10,288 shares at a net asset value of $51.14 per share $ 526,122
Oppenheimer Main Street Growth & Income Fund 25,816 shares at a net asset value of $23.35 per share 602,793
Oppenheimer High Income Fund 27,745 shares at a net asset value of $9.57 per share 265,523
Oppenheimer Bond Fund 74,184 shares at a net asset value of $10.81 per share 801,926
Oppenheimer Strategic Bond Fund 18,130 shares at a net asset value of $4.65 per share 84,304
Putnam Variable Trust (Putnam)
Putnam VT Growth and Income Fund 66,681 shares at a net asset value of $23.21 per share 1,547,671
Putnam VT New Value Fund 3,066 shares at a net asset value of $11.36 per share 34,828
Putnam VT Vista Fund 22,662 shares at a net asset value of $23.79 per share 539,120
Putnam VT International Growth Fund 100,879 shares at a net asset value of $19.69 per share 1,986,313
Putnam VT International New Opportunities Fund 16,740 shares at a net asset value of $18.87 per share 315,888
Franklin Templeton Variable Insurance
Products Trust (Templeton):
Templeton Global Income Securities Fund 1,268 shares at a net asset value of $11.07 per share 14,037
Franklin Small Cap Fund 31,847 shares at a net asset value of $26.52 per share 844,582
Templeton Growth Securities Fund 19,973 shares at a net asset value of $13.26 per share 264,836
Templeton International Securities Fund 37,966 shares at a net asset value of $19.31 per share 733,128
Templeton Developing Markets Securities Fund 41,910 shares at a net asset value of $6.39 per share 267,807
Mutual Shares Securities Fund 21,449 shares at a net asset value of $12.69 per share 272,183
Franklin Large Cap Growth Securities Fund 21,468 shares at a net asset value of $22.28 per share 478,304
Variable Insurance Products Fund, Fund II and
Fund III (Fidelity):
VIP Growth Portfolio 2,499 shares at a net asset value of $51.54 per share 128,789
VIP II Contrafund Portfolio 901 shares at a net asset value of $25.09 per share 22,595
VIP III Growth Opportunities Portfolio 982 shares at a net asset value of $20.61 per share 20,248
VIP III Growth & Income Portfolio 6,713 shares at a net asset value of $15.48 per share 103,912
VIP Equity-Income Portfolio 1,812 shares at a net asset value of $22.91 per share 41,514
American Century Variable Portfolios, Inc.
(American Century):
American Century VP Income & Growth Fund 30,553 shares at a net asset value of $7.70 per share 234,339
American Century VP International Fund 1,127 shares at a net asset value of $11.60 per share 13,026
American Century VP Value Fund 23,714 shares at a net asset value of $5.40 per share 128,531
Dreyfus Stock Index Fund (Dreyfus) 3,158 shares at a net asset value of $38.00 per share 120,049
Dreyfus Variable Investment Fund (Dreyfus):
Dreyfus VIF Disciplined Stock Portfolio 1,478 shares at a net asset value of $27.00 per share 39,900
Dreyfus VIF Capital Appreciation Portfolio 5,329 shares at a net asset value of $41.00 per share 218,396
INVESCO Variable Investment Funds, Inc. (INVESCO):
INVESCO VIF Dynamics Fund 10,818 shares at a net asset value of $21.50 per share 232,367
INVESCO VIF High Yield Fund 2,457 shares at a net asset value of $11.40 per share 27,914
PIMCO Variable Insurance Trust (PIMCO):
PIMCO High Yield Bond Portfolio 11 shares at a net asset value of $8.70 per share 99
PIMCO Low Duration Bond Portfolio 11 shares at a net asset value of $9.70 per share 103
PIMCO StocksPLUS Growth & Income Portfolio 8 shares at a net asset value of $13.10 per share 102
PIMCO Total Return Bond Portfolio 3,255 shares at a net asset value of $9.50 per share 30,795
Scudder Variable Life Investment Fund (Scudder):
International Portfolio 8,342 shares at a net asset value of $16.20 per share 135,383
---------------
Total assets $ 197,796,562
===============
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Assets and Liabilities
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Sub-account liabilities:
<S> <C>
GACC Money Market $ 160
Russell Multi-Style Equity 329
Russell Aggressive Equity 57
Russell Non-US 148
Russell Core Bond 206
Russell Real Estate Securities 15
AIM V.I. Value 346
AIM V.I. Capital Appreciation 203
AIM V.I. International Equity 40
Alliance Premier Growth 271
Alliance Real Estate Investment 30
Liberty Newport Tiger Fund, Variable 203
Goldman Sachs Growth and Income 24
Goldman Sachs International Equity 30
Goldman Sachs Global Income 3
Kemper Small Cap Growth 13
Kemper Small Cap Value 21
Kemper Government Securities 19
MFS Research 89
MFS Growth with Income 128
MFS Emerging Growth 134
MFS Emerging Markets Equity 2
MFS High Income 21
MFS Global Governments 1
Oppenheimer Capital Appreciation 40
Oppenheimer Main Street Growth & Income 46
Oppenheimer High Income 20
Oppenheimer Bond 61
Oppenheimer Strategic Bond 7
Putnam VT Growth and Income 120
Putnam VT New Value 3
Putnam VT Vista 41
Putnam VT International Growth 152
Putnam VT International New Opportunities 24
Templeton Global Income Securities 1
Franklin Small Cap 65
Templeton Growth Securities 19
Templeton International Securities 56
Templeton Developing Markets Securities 21
Templeton Mutual Shares Securities 21
Franklin Large Cap Growth Securities 37
Fidelity VIP Growth 10
Fidelity VIP II Contrafund 2
Fidelity VIP III Growth Opportunities 2
Fidelity VIP III Growth & Income 8
Fidelity VIP Equity-Income 3
American Century VP Income & Growth 576
American Century VP International 31
American Century VP Value 303
Dreyfus Stock Index 375
Dreyfus VIF Disciplined Stock 149
Dreyfus VIF Capital Appreciation 459
INVESCO VIF Dynamics 138
INVESCO VIF High Yield 17
PIMCO Total Return Bond 26
Scudder International 361
-------------
Total liabilities $ 5,687
=============
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Assets and Liabilities
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Sub-account net assets:
<S> <C>
Cova Lord Abbett Growth and Income $ 48,469,681
Cova Bond Debenture 11,871,124
Cova Developing Growth 2,195,946
Cova Large Cap Research 2,338,621
Cova Mid-Cap Value 1,876,164
Cova Quality Bond 6,755,584
Cova Small Cap Stock 12,112,728
Cova Large Cap Stock 34,911,524
Cova Select Equity 22,441,752
Cova International Equity 13,560,534
GACC Money Market 2,193,952
Russell Multi-Style Equity 4,276,384
Russell Aggressive Equity 732,150
Russell Non-US 1,934,672
Russell Core Bond 2,684,207
Russell Real Estate Securities 183,694
AIM V.I. Value 4,582,166
AIM V.I. Capital Appreciation 2,694,671
AIM V.I. International Equity 516,878
Alliance Premier Growth 3,578,840
Alliance Real Estate Investment 377,269
Liberty Newport Tiger Fund, Variable 66,117
Goldman Sachs Growth and Income 308,903
Goldman Sachs International Equity 394,000
Goldman Sachs Global Income 44,346
Kemper Dreman High Return Equity 94
Kemper Small Cap Growth 172,845
Kemper Small Cap Value 274,690
Kemper Government Securities 246,536
MFS Bond 105
MFS Research 1,167,380
MFS Growth with Income 1,677,851
MFS Emerging Growth 1,763,533
MFS Emerging Markets Equity 29,689
MFS High Income 268,598
MFS Global Governments 13,414
Oppenheimer Capital Appreciation 526,082
Oppenheimer Main Street Growth & Income 602,747
Oppenheimer High Income 265,503
Oppenheimer Bond 801,865
Oppenheimer Strategic Bond 84,297
Putnam VT Growth and Income 1,547,551
Putnam VT New Value 34,825
Putnam VT Vista 539,079
Putnam VT International Growth 1,986,161
Putnam VT International New Opportunities 315,864
Templeton Global Income Securities 14,036
Franklin Small Cap 844,517
Templeton Growth Securities 264,817
Templeton International Securities 733,072
Templeton Developing Markets Securities 267,786
Templeton Mutual Shares Securities 272,162
Franklin Large Cap Growth Securities 478,267
Fidelity VIP Growth 128,779
Fidelity VIP II Contrafund 22,593
Fidelity VIP III Growth Opportunities 20,246
Fidelity VIP III Growth & Income 103,904
Fidelity VIP Equity-Income 41,511
American Century VP Income & Growth 233,763
American Century VP International 12,995
American Century VP Value 128,228
Dreyfus Stock Index 119,674
Dreyfus VIF Disciplined Stock 39,751
Dreyfus VIF Capital Appreciation 217,937
INVESCO VIF Dynamics 232,229
INVESCO VIF High Yield 27,897
PIMCO High Yield Bond 99
PIMCO Low Duration Bond 103
PIMCO StocksPLUS Growth & Income 102
PIMCO Total Return Bond 30,769
Scudder International 135,022
-------------
Total net assets $ 197,790,875
=============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Cova
---------------------------------------------------------------------------------------
Lord Abbett
Growth Large Small
and Bond Developing Cap Mid-Cap Quality Cap
Income Debenture Growth Research Value Bond Stock
----------- ---------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 583,253 781,078 - 5,813 5,499 395,083 139
----------- ---------- ----------- ----------- ----------- ---------- -----------
Expenses:
Mortality and expense risk 300,168 73,236 12,752 13,863 9,960 42,994 74,385
Administrative fee 36,014 8,784 1,530 1,664 1,194 5,159 8,923
----------- ---------- ----------- ----------- ----------- ---------- -----------
Total expenses 336,182 82,020 14,282 15,527 11,154 48,153 83,308
----------- ---------- ----------- ----------- ----------- ---------- -----------
Net investment income (expense) 247,071 699,058 (14,282) (9,714) (5,655) 346,930 (83,169)
----------- ---------- ----------- ----------- ----------- ---------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares 97,593 25,369 7,577 6,474 13,410 7,379 76,234
Realized gain distributions 810,005 - 112,263 208,818 11,648 - 477,775
----------- ---------- ----------- ----------- ----------- ---------- -----------
Net realized gain (loss) 907,598 25,369 119,840 215,292 25,058 7,379 554,009
----------- ---------- ----------- ----------- ----------- ---------- -----------
Change in unrealized appreciation (2,550,754) (639,508) (373,595) (319,989) 233,820 (162,500) (543,639)
----------- ---------- ----------- ----------- ----------- ---------- -----------
Net increase (decrease) in net
assets from operations $ (1,396,085) 84,919 (268,037) (114,411) 253,223 191,809 (72,799)
=========== ========== =========== =========== =========== ========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Cova GACC Russell
------------------------------------ ----------- ------------------------------------
Large Multi-
Cap Select International Money Style Aggressive
Stock Equity Equity Market Equity Equity Non-US
----------- ----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 215,691 110,390 57,532 - 8,932 843 1,734
----------- ----------- ---------- ----------- ----------- ----------- -----------
Expenses:
Mortality and expense risk 212,396 137,888 84,381 12,160 23,248 3,790 10,669
Administrative fee 25,478 16,547 10,120 1,459 2,790 455 1,280
----------- ----------- ---------- ----------- ----------- ----------- -----------
Total expenses 237,874 154,435 94,501 13,619 26,038 4,245 11,949
----------- ----------- ---------- ----------- ----------- ----------- -----------
Net investment income (expense) (22,183) (44,045) (36,969) (13,619) (17,106) (3,402) (10,215)
----------- ----------- ---------- ----------- ----------- ----------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares 190,687 121,921 94,950 28,986 (1,902) 2,695 11,872
Realized gain distributions 2,686,453 1,480,216 837,655 - 94,044 12,854 48,421
----------- ----------- ---------- ----------- ----------- ----------- -----------
Net realized gain (loss) 2,877,140 1,602,137 932,605 28,986 92,142 15,549 60,293
----------- ----------- ---------- ----------- ----------- ----------- -----------
Change in unrealized appreciation (3,812,667) (1,931,415) (1,558,897) 30,071 (234,537) 5,658 (134,780)
----------- ----------- ---------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from operations $ (957,710) (373,323) (663,261) 45,438 (159,501) 17,805 (84,702)
=========== =========== ========== =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Russell AIM Alliance
---------------------- ------------------------------------ ------------------------
Real V.I. V.I. Real
Core Estate V.I. Capital International Premier Estate
Bond Securities Value Appreciation Equity Growth Investment
--------- ----------- ----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 35,300 1,740 - - - - 14,859
--------- ----------- ----------- ---------- ----------- ----------- -----------
Expenses:
Mortality and expense risk 15,238 802 22,593 11,605 2,502 18,586 1,674
Administrative fee 1,829 96 2,697 1,384 300 2,230 201
--------- ----------- ----------- ---------- ----------- ----------- -----------
Total expenses 17,067 898 25,290 12,989 2,802 20,816 1,875
--------- ----------- ----------- ---------- ----------- ----------- -----------
Net investment income (expense) 18,233 842 (25,290) (12,989) (2,802) (20,816) 12,984
--------- ----------- ----------- ---------- ----------- ----------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares (22,400) 2,496 10,324 918 2,194 20,565 (726)
Realized gain distributions - - - - - 172,921 -
--------- ----------- ----------- ---------- ----------- ----------- -----------
Net realized gain (loss) (22,400) 2,496 10,324 918 2,194 193,486 (726)
--------- ----------- ----------- ---------- ----------- ----------- -----------
Change in unrealized appreciation 79,464 14,106 (27,146) 126,204 (48,397) (70,598) 27,526
--------- ----------- ----------- ---------- ----------- ----------- -----------
Net increase (decrease) in net
assets from operations $ 75,297 17,444 (42,112) 114,133 (49,005) 102,072 39,784
========= =========== =========== ========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Liberty Goldman Sachs Kemper
----------- ------------------------------------ ----------------------------------
Newport Dreman
Tiger Growth High Small Small
Fund, and International Global Return Cap Cap
Variable Income Equity Income Equity Growth Value
----------- --------- ------------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ - - - - 2 - 1,358
----------- --------- ------------- ---------- ---------- ----------- ---------
Expenses:
Mortality and expense risk 342 1,741 2,500 215 - 1,032 1,510
Administrative fee 41 209 300 26 - 124 181
----------- --------- ------------- ---------- ---------- ----------- ---------
Total expenses 383 1,950 2,800 241 - 1,156 1,691
----------- --------- ------------- ---------- ---------- ----------- ---------
Net investment income (expense) (383) (1,950) (2,800) (241) 2 (1,156) (333)
----------- --------- ------------- ---------- ---------- ----------- ---------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares 1,376 (1,098) 2,810 (11) - 1,209 (284)
Realized gain distributions - - - - 5 15,923 -
----------- --------- ------------- ---------- ---------- ----------- ---------
Net realized gain (loss) 1,376 (1,098) 2,810 (11) 5 17,132 (284)
----------- --------- ------------- ---------- ---------- ----------- ---------
Change in unrealized appreciation (695) 3,785 (8,822) 1,065 (6) (3,743) (5,206)
----------- --------- ------------- ---------- ---------- ----------- ---------
Net increase (decrease) in net
assets from operations $ 298 737 (8,812) 813 1 12,233 (5,823)
=========== ========= ============= ========== ========== =========== =========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Kemper MFS
------------ -----------------------------------------------------------------------
Growth Emerging
Government with Emerging Markets High
Securities Bond Research Income Growth Equity Income
------------ ------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 16,192 5 386 7,124 - - 19,987
------------ ------- ----------- ----------- ----------- ---------- -----------
Expenses:
Mortality and expense risk 1,478 - 6,352 9,451 10,494 201 1,487
Administrative fee 177 - 762 1,134 1,259 24 178
------------ ------- ----------- ----------- ----------- ---------- -----------
Total expenses 1,655 - 7,114 10,585 11,753 225 1,665
------------ ------- ----------- ----------- ----------- ---------- -----------
Net investment income (expense) 14,537 5 (6,728) (3,461) (11,753) (225) 18,322
------------ ------- ----------- ----------- ----------- ---------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares (66) - 2,945 3,957 14,832 1,091 (78)
Realized gain distributions - - 66,248 12,936 92,802 - -
------------ ------- ----------- ----------- ----------- ---------- -----------
Net realized gain (loss) (66) - 69,193 16,893 107,634 1,091 (78)
------------ ------- ----------- ----------- ----------- ---------- -----------
Change in unrealized appreciation (6,814) (3) (5,214) (7,380) (152,786) (2,060) (19,065)
------------ ------- ----------- ----------- ----------- ---------- -----------
Net increase (decrease) in net
assets from operations $ 7,657 2 57,251 6,052 (56,905) (1,194) (821)
============ ======= =========== =========== =========== ========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
MFS Oppenheimer Putnam
------------- ---------------------------------------------------------- -----------
Main Street VT
Growth Growth
Global Capital and High Strategic and
Governments Appreciation Income Income Bond Bond Income
------------- ------------ ----------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 574 586 2,033 26,961 58,840 6,969 28,041
------------- ------------ ----------- --------- --------- --------- -----------
Expenses:
Mortality and expense risk 75 2,785 3,293 1,631 4,641 518 9,240
Administrative fee 9 334 395 196 557 62 1,109
------------- ------------ ----------- --------- --------- --------- -----------
Total expenses 84 3,119 3,688 1,827 5,198 580 10,349
------------- ------------ ----------- --------- --------- --------- -----------
Net investment income (expense) 490 (2,533) (1,655) 25,134 53,642 6,389 17,692
------------- ------------ ----------- --------- --------- --------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares (61) 339 440 (557) (1,755) (196) (11,034)
Realized gain distributions - 31,253 26,847 - - - 132,025
------------- ------------ ----------- --------- --------- --------- -----------
Net realized gain (loss) (61) 31,592 27,287 (557) (1,755) (196) 120,991
------------- ------------ ----------- --------- --------- --------- -----------
Change in unrealized appreciation (315) 6,870 (25,619) (28,078) (42,321) (5,248) (195,539)
------------- ------------ ----------- --------- --------- --------- -----------
Net increase (decrease) in net
assets from operations $ 114 35,929 13 (3,501) 9,566 945 (56,856)
============= ============ =========== ========= ========= ========= ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Putnam Templeton
------------------------------------------------- -----------------------------------
VT
VT VT International Global Franklin
New VT International New Income Small Growth
Value Vista Growth Opportunities Securities Cap Securities
--------- -------- ------------- ------------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 388 - 32,838 141 523 4,169 1,814
--------- -------- ------------- ------------- ----------- --------- -----------
Expenses:
Mortality and expense risk 169 2,696 10,742 1,737 58 3,662 1,088
Administrative fee 20 323 1,289 209 7 440 126
--------- -------- ------------- ------------- ----------- --------- -----------
Total expenses 189 3,019 12,031 1,946 65 4,102 1,214
--------- -------- ------------- ------------- ----------- --------- -----------
Net investment income (expense) 199 (3,019) 20,807 (1,805) 458 67 600
--------- -------- ------------- ------------- ----------- --------- -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares (21) 2,633 8,630 1,192 (2) (589) (16)
Realized gain distributions 1,375 4,804 142,429 13,226 - 9,584 34,468
--------- -------- ------------- ------------- ----------- --------- -----------
Net realized gain (loss) 1,354 7,437 151,059 14,418 (2) 8,995 34,452
--------- -------- ------------- ------------- ----------- --------- -----------
Change in unrealized appreciation (892) 55,026 (165,536) (62,750) (351) (30,807) (30,580)
--------- -------- ------------- ------------- ----------- --------- -----------
Net increase (decrease) in net
assets from operations $ 661 59,444 6,330 (50,137) 105 (21,745) 4,472
========= ======== ============= ============= =========== ========= ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Templeton Fidelity
------------------------------------------------- ------------------------------------
Franklin
Developing Mutual Large Cap VIP III
International Markets Shares Growth VIP VIP II Growth
Securities Securities Securities Securities Growth Contrafund Opportunities
------------ ----------- ---------- ---------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 12,539 1,778 1,471 1,566 96 31 236
------------ ----------- ---------- ---------- --------- ---------- -------------
Expenses:
Mortality and expense risk 3,855 1,184 904 2,277 677 98 112
Administrative fee 463 142 109 268 81 12 14
------------ ----------- ---------- ---------- --------- ---------- -------------
Total expenses 4,318 1,326 1,013 2,545 758 110 126
------------ ----------- ---------- ---------- --------- ---------- -------------
Net investment income (expense) 8,221 452 458 (979) (662) (79) 110
------------ ----------- ---------- ---------- --------- ---------- -------------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares (432) 1,343 (134) (3,031) 728 84 (9)
Realized gain distributions 73,894 - 1,228 21,645 9,551 1,112 1,195
------------ ----------- ---------- ---------- --------- ---------- -------------
Net realized gain (loss) 73,462 1,343 1,094 18,614 10,279 1,196 1,186
------------ ----------- ---------- ---------- --------- ---------- -------------
Change in unrealized appreciation (78,014) (32,874) (2,494) 6,548 (5,847) (1,698) (1,665)
------------ ----------- ---------- ---------- --------- ---------- -------------
Net increase (decrease) in net
assets from operations $ 3,669 (31,079) (942) 24,183 3,770 (581) (369)
============ =========== ========== ========== ========= ========== =============
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Fidelity American Century Dreyfus
------------------------ ----------------------------------- ----------------------
VP
VIP III VIP Income VIF
Growth & Equity- & VP VP Stock Disciplined
Income Income Growth International Value Index Stock
----------- ----------- --------- ------------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 1,106 718 79 - 85 513 5
----------- ----------- --------- ------------- --------- -------- ------------
Expenses:
Mortality and expense risk 620 254 509 27 268 404 156
Administrative fee 74 31 61 3 32 49 19
----------- ----------- --------- ------------- --------- -------- ------------
Total expenses 694 285 570 30 300 453 175
----------- ----------- --------- ------------- --------- -------- ------------
Net investment income (expense) 412 433 (491) (30) (215) 60 (170)
----------- ----------- --------- ------------- --------- -------- ------------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares (53) (46) 102 - (109) 201 236
Realized gain distributions 7,220 2,705 - 2 217 107 -
----------- ----------- --------- ------------- --------- -------- ------------
Net realized gain (loss) 7,167 2,659 102 2 108 308 236
----------- ----------- --------- ------------- --------- -------- ------------
Change in unrealized appreciation (10,054) (4,365) 1,123 (280) (4,115) 6,341 2,624
----------- ----------- --------- ------------- --------- -------- ------------
Net increase (decrease) in net
assets from operations $ (2,475) (1,273) 734 (308) (4,222) 6,709 2,690
=========== =========== ========= ============= ========= ======== ============
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Dreyfus INVESCO PIMCO
------------- --------------------- -----------------------------------------------
VIF VIF High Low StocksPLUS Total
Capital VIF High Yield Duration Growth & Return
Appreciation Dynamics Yield Bond Bond Income Bond
------------- ----------- -------- --------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 3 - - 4 3 3 671
------------- ----------- -------- --------- --------- ------------ -----------
Expenses:
Mortality and expense risk 480 639 105 - - - 129
Administrative fee 58 77 13 - - - 15
------------- ----------- -------- --------- --------- ------------ -----------
Total expenses 538 716 118 - - - 144
------------- ----------- -------- --------- --------- ------------ -----------
Net investment income (expense) (535) (716) (118) 4 3 3 527
------------- ----------- -------- --------- --------- ------------ -----------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares 37 373 (20) - - - (23)
Realized gain distributions - - - - - - -
------------- ----------- -------- --------- --------- ------------ -----------
Net realized gain (loss) 37 373 (20) - - - (23)
------------- ----------- -------- --------- --------- ------------ -----------
Change in unrealized appreciation 7,579 17,382 129 (6) - (4) 327
------------- ----------- -------- --------- --------- ------------ -----------
Net increase (decrease) in net
assets from operations $ 7,081 17,039 (9) (2) 3 (1) 831
============= =========== ======== ========= ========= ============ ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Operations
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Scudder
----------------
International Total
---------------- ------------
<S> <C> <C>
Income:
Dividends $ 231 2,447,955
---------------- ------------
Expenses:
Mortality and expense risk 320 1,177,046
Administrative fee 38 141,184
---------------- ------------
Total expenses 358 1,318,230
---------------- ------------
Net investment income (expense) (127) 1,129,725
---------------- ------------
Net realized gain (loss) on investments:
Realized gain (loss) on sale of fund
shares (31) 721,518
Realized gain distributions 4,699 7,660,573
---------------- ------------
Net realized gain (loss) 4,668 8,382,091
---------------- ------------
Change in unrealized appreciation (6,771) (12,730,791)
---------------- ------------
Net increase (decrease) in net
assets from operations $ (2,230) (3,218,975)
================ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Cova
---------------------------------------------------------------------------------------
Lord Abbett
Growth Large Small
and Bond Developing Cap Mid-Cap Quality Cap
Income Debenture Growth Research Value Bond Stock
---------- ----------- ----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 247,071 699,058 (14,282) (9,714) (5,655) 346,930 (83,169)
Net realized gain (loss) 907,598 25,369 119,840 215,292 25,058 7,379 554,009
Change in unrealized appreciation (2,550,754) (639,508) (373,595) (319,989) 233,820 (162,500) (543,639)
---------- ----------- ----------- ----------- ---------- ----------- -----------
Net increase (decrease) from
operations (1,396,085) 84,919 (268,037) (114,411) 253,223 191,809 (72,799)
---------- ----------- ----------- ----------- ---------- ----------- -----------
Contract transactions:
Cova payments 100 100 100 100 100 100 100
Cova redemptions - - - - - - -
Payments received from contract
owners 389,528 128,125 216,019 34,511 96,711 53,605 323,767
Transfers between sub-accounts
(including fixed account), net 1,494,086 223,284 419,367 389,683 137,880 (558,265) 784,362
Transfers for contract benefits and
terminations (1,118,078) (401,217) (51,143) (54,956) (49,046) (212,052) (268,508)
---------- ----------- ----------- ----------- ---------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 765,636 (49,708) 584,343 369,338 185,645 (716,612) 839,721
---------- ----------- ----------- ----------- ---------- ----------- -----------
Net increase (decrease) in net
assets (630,449) 35,211 316,306 254,927 438,868 (524,803) 766,922
Net assets at beginning of period 49,100,130 11,835,913 1,879,640 2,083,694 1,437,296 7,280,387 11,345,806
---------- ----------- ----------- ----------- ---------- ----------- -----------
Net assets at end of period $48,469,681 11,871,124 2,195,946 2,338,621 1,876,164 6,755,584 12,112,728
========== =========== =========== =========== ========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Cova GACC Russell
-------------------------------------- ----------- ------------------------------------
Large Multi-
Cap Select International Money Style Aggressive
Stock Equity Equity Market Equity Equity Non-US
----------- ----------- ------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (22,183) (44,045) (36,969) (13,619) (17,106) (3,402) (10,215)
Net realized gain (loss) 2,877,140 1,602,137 932,605 28,986 92,142 15,549 60,293
Change in unrealized appreciation (3,812,667) (1,931,415) (1,558,897) 30,071 (234,537) 5,658 (134,780)
----------- ----------- ------------- ----------- ----------- ----------- ----------
Net increase (decrease) from
operations (957,710) (373,323) (663,261) 45,438 (159,501) 17,805 (84,702)
----------- ----------- ------------- ----------- ----------- ----------- ----------
Contract transactions:
Cova payments 100 100 100 100 - - -
Cova redemptions - - - - - - -
Payments received from contract
owners 695,244 192,414 188,347 121,636 872,865 126,881 414,866
Transfers between sub-accounts
(including fixed account), net 1,514,369 484,786 683,876 255,137 480,000 134,636 184,140
Transfers for contract benefits and
terminations (894,899) (621,233) (352,626) (49,183) (63,874) (9,904) (33,371)
----------- ----------- ------------- ----------- ----------- ----------- ----------
Net increase (decrease) in net
assets from contract
transactions 1,314,814 56,067 519,697 327,690 1,288,991 251,613 565,635
----------- ----------- ------------- ----------- ----------- ----------- ----------
Net increase (decrease) in net
assets 357,104 (317,256) (143,564) 373,128 1,129,490 269,418 480,933
Net assets at beginning of period 34,554,420 22,759,008 13,704,098 1,820,824 3,146,894 462,732 1,453,739
----------- ----------- ------------- ----------- ----------- ----------- ----------
Net assets at end of period $ 34,911,524 22,441,752 13,560,534 2,193,952 4,276,384 732,150 1,934,672
=========== =========== ============= =========== =========== =========== ==========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Russell AIM Alliance
---------------------- ---------------------------------------- -----------------------
Real V.I. V.I. Real
Core Estate V.I. Capital International Premier Estate
Bond Securities Value Appreciation Equity Growth Investment
----------- --------- ----------- ------------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 18,233 842 (25,290) (12,989) (2,802) (20,816) 12,984
Net realized gain (loss) (22,400) 2,496 10,324 918 2,194 193,486 (726)
Change in unrealized appreciation 79,464 14,106 (27,146) 126,204 (48,397) (70,598) 27,526
----------- --------- ----------- ------------- ------------- ---------- -----------
Net increase (decrease) from
operations 75,297 17,444 (42,112) 114,133 (49,005) 102,072 39,784
----------- --------- ----------- ------------- ------------- ---------- -----------
Contract transactions:
Cova payments - - 100 100 100 - -
Cova redemptions - (91) - - - - -
Payments received from contract
owners 575,481 95,445 717,368 422,928 98,338 789,941 103,999
Transfers between sub-accounts
(including fixed account), net (198,929) 20,793 1,299,814 1,106,496 131,556 256,387 15,551
Transfers for contract benefits and
terminations (66,754) (5,492) (52,004) (13,561) (1,447) (65,387) (2,002)
----------- --------- ----------- ------------- ------------- ---------- -----------
Net increase (decrease) in net
assets from contract
transactions 309,798 110,655 1,965,278 1,515,963 228,547 980,941 117,548
----------- --------- ----------- ------------- ------------- ---------- -----------
Net increase (decrease) in net
assets 385,095 128,099 1,923,166 1,630,096 179,542 1,083,013 157,332
Net assets at beginning of period 2,299,112 55,595 2,659,000 1,064,575 337,336 2,495,827 219,937
----------- --------- ----------- ------------- ------------- ---------- -----------
Net assets at end of period $ 2,684,207 183,694 4,582,166 2,694,671 516,878 3,578,840 377,269
=========== ========= =========== ============= ============= ========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Liberty Goldman Sachs Kemper
----------- ------------------------------------ ---------------------------------
Newport Dreman
Tiger Growth High Small Small
Fund, and International Global Return Cap Cap
Variable Income Equity Income Equity Growth Value
----------- ----------- ------------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (383) (1,950) (2,800) (241) 2 (1,156) (333)
Net realized gain (loss) 1,376 (1,098) 2,810 (11) 5 17,132 (284)
Change in unrealized appreciation (695) 3,785 (8,822) 1,065 (6) (3,743) (5,206)
----------- ----------- ------------- --------- --------- ---------- ----------
Net increase (decrease) from
operations 298 737 (8,812) 813 1 12,233 (5,823)
----------- ----------- ------------- --------- --------- ---------- ----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - - -
Payments received from contract
owners 29,162 - 4,880 10,123 - 28,300 21,955
Transfers between sub-accounts
(including fixed account), net (335) 31,868 (201) 21 - 9,478 13,636
Transfers for contract benefits and
terminations (3,650) (5,969) (3,697) (25) - (4,225) (1,512)
----------- ----------- ------------- --------- --------- ---------- ----------
Net increase (decrease) in net
assets from contract
transactions 25,177 25,899 982 10,119 - 33,553 34,079
----------- ----------- ------------- --------- --------- ---------- ----------
Net increase (decrease) in net
assets 25,475 26,636 (7,830) 10,932 1 45,786 28,256
Net assets at beginning of period 40,642 282,267 401,830 33,414 93 127,059 246,434
----------- ----------- ------------- --------- --------- ---------- ----------
Net assets at end of period $ 66,117 308,903 394,000 44,346 94 172,845 274,690
=========== =========== ============= ========= ========= ========== ==========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Kemper MFS
----------- ------------------------------------------------------------------------
Growth Emerging
Government with Emerging Markets High
Securities Bond Research Income Growth Equity Income
----------- --------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 14,537 5 (6,728) (3,461) (11,753) (225) 18,322
Net realized gain (loss) (66) - 69,193 16,893 107,634 1,091 (78)
Change in unrealized appreciation (6,814) (3) (5,214) (7,380) (152,786) (2,060) (19,065)
----------- --------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) from
operations 7,657 2 57,251 6,052 (56,905) (1,194) (821)
----------- --------- ----------- ----------- ----------- ----------- -----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - - -
Payments received from contract
owners 4,488 - 64,276 196,950 292,436 - 34,050
Transfers between sub-accounts
(including fixed account), net 17,654 - 126,924 63,969 102,106 (4,066) 12,950
Transfers for contract benefits and
terminations (2,953) - (6,953) (24,319) (17,975) (1) (582)
----------- --------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 19,189 - 184,247 236,600 376,567 (4,067) 46,418
----------- --------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets 26,846 2 241,498 242,652 319,662 (5,261) 45,597
Net assets at beginning of period 219,690 103 925,882 1,435,199 1,443,871 34,950 223,001
----------- --------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period $ 246,536 105 1,167,380 1,677,851 1,763,533 29,689 268,598
=========== ========= =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
MFS Oppenheimer Putnam
------------ ------------------------------------------------------------- ----------
Main Street VT
Growth Growth
Global Capital and High Strategic and
Governments Appreciation Income Income Bond Bond Income
------------ ------------ ----------- --------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 490 (2,533) (1,655) 25,134 53,642 6,389 17,692
Net realized gain (loss) (61) 31,592 27,287 (557) (1,755) (196) 120,991
Change in unrealized appreciation (315) 6,870 (25,619) (28,078) (42,321) (5,248) (195,539)
------------ ------------ ----------- --------- ----------- ---------- ----------
Net increase (decrease) from
operations 114 35,929 13 (3,501) 9,566 945 (56,856)
------------ ------------ ----------- --------- ----------- ---------- ----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - - -
Payments received from contract
owners - 188,196 75,217 1,429 44,541 7,501 41,989
Transfers between sub-accounts
(including fixed account), net 4,104 29,623 105,856 11,003 36,051 (754) 68,523
Transfers for contract benefits and
terminations (1,574) (953) (7,719) (4,490) (23,746) (731) (8,501)
------------ ------------ ----------- --------- ----------- ---------- ----------
Net increase (decrease) in net
assets from contract
transactions 2,530 216,866 173,354 7,942 56,846 6,016 102,011
------------ ------------ ----------- --------- ----------- ---------- ----------
Net increase (decrease) in net
assets 2,644 252,795 173,367 4,441 66,412 6,961 45,155
Net assets at beginning of period 10,770 273,287 429,380 261,062 735,453 77,336 1,502,396
------------ ------------ ----------- --------- ----------- ---------- ----------
Net assets at end of period $ 13,414 526,082 602,747 265,503 801,865 84,297 1,547,551
============ ============ =========== ========= =========== ========== ==========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Putnam Templeton
-------------------------------------------------- -----------------------------------
VT
VT VT International Global Franklin
New VT International New Income Small Growth
Value Vista Growth Opportunities Securities Cap Securities
--------- ---------- ------------- ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 199 (3,019) 20,807 (1,805) 458 67 600
Net realized gain (loss) 1,354 7,437 151,059 14,418 (2) 8,995 34,452
Change in unrealized appreciation (892) 55,026 (165,536) (62,750) (351) (30,807) (30,580)
--------- ---------- ------------- ------------ ---------- ---------- -----------
Net increase (decrease) from
operations 661 59,444 6,330 (50,137) 105 (21,745) 4,472
--------- ---------- ------------- ------------ ---------- ---------- -----------
Contract transactions:
Cova payments - - - - 100 100 100
Cova redemptions - - - - - - -
Payments received from contract
owners - 91,505 400,670 146,960 2,500 112,828 46,013
Transfers between sub-accounts
(including fixed account), net 10,145 75,710 76,266 19,753 3,620 633,924 98,645
Transfers for contract benefits and
terminations (287) (2,712) (15,648) (67) (5) (8,620) (122)
--------- ---------- ------------- ------------ ---------- ---------- -----------
Net increase (decrease) in net
assets from contract
transactions 9,858 164,503 461,288 166,646 6,215 738,232 144,636
--------- ---------- ------------- ------------ ---------- ---------- -----------
Net increase (decrease) in net
assets 10,519 223,947 467,618 116,509 6,320 716,487 149,108
Net assets at beginning of period 24,306 315,132 1,518,543 199,355 7,716 128,030 115,709
--------- ---------- ------------- ------------ ---------- ---------- -----------
Net assets at end of period $ 34,825 539,079 1,986,161 315,864 14,036 844,517 264,817
========= ========== ============= ============ ========== ========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Templeton Fidelity
-------------------------------------------------- ------------------------------------
Franklin
Developing Mutual Large Cap VIP III
International Markets Shares Growth VIP VIP II Growth
Securities Securities Securities Securities Growth Contrafund Opportunities
------------ ---------- ----------- ----------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 8,221 452 458 (979) (662) (79) 110
Net realized gain (loss) 73,462 1,343 1,094 18,614 10,279 1,196 1,186
Change in unrealized appreciation (78,014) (32,874) (2,494) 6,548 (5,847) (1,698) (1,665)
------------ ---------- ----------- ----------- --------- ----------- ------------
Net increase (decrease) from
operations 3,669 (31,079) (942) 24,183 3,770 (581) (369)
------------ ---------- ----------- ----------- --------- ----------- ------------
Contract transactions:
Cova payments 100 - - 100 - - -
Cova redemptions - - - - - - -
Payments received from contract
owners 84,848 120,274 173,139 75,666 41,034 7,145 11,952
Transfers between sub-accounts
(including fixed account), net 88,250 33,211 2,289 228,023 (955) 6,542 2,331
Transfers for contract benefits and
terminations (11,029) (6,785) (895) (6,470) - - -
------------ ---------- ----------- ----------- --------- ----------- ------------
Net increase (decrease) in net
assets from contract
transactions 162,169 146,700 174,533 297,319 40,079 13,687 14,283
------------ ---------- ----------- ----------- --------- ----------- ------------
Net increase (decrease) in net
assets 165,838 115,621 173,591 321,502 43,849 13,106 13,914
Net assets at beginning of period 567,234 152,165 98,571 156,765 84,930 9,487 6,332
------------ ---------- ----------- ----------- --------- ----------- ------------
Net assets at end of period $ 733,072 267,786 272,162 478,267 128,779 22,593 20,246
============ ========== =========== =========== ========= =========== ============
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Fidelity s American Century Dreyfus
--------------------- ------------------------------------ ------------------------
VP
VIP III VIP Income VIF
Growth & Equity- & VP VP Stock Disciplined
Income Income Growth International Value Index Stock
---------- --------- ----------- ------------ --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ 412 433 (491) (30) (215) 60 (170)
Net realized gain (loss) 7,167 2,659 102 2 108 308 236
Change in unrealized appreciation (10,054) (4,365) 1,123 (280) (4,115) 6,341 2,624
---------- --------- ----------- ------------ --------- ----------- -----------
Net increase (decrease) from
operations (2,475) (1,273) 734 (308) (4,222) 6,709 2,690
---------- --------- ----------- ------------ --------- ----------- -----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - - -
Payments received from contract
owners 9,345 - 219,006 9,466 99,248 87,925 40,000
Transfers between sub-accounts
(including fixed account), net 5,120 4,460 5,252 3,712 28,636 25,649 (2,269)
Transfers for contract benefits and
terminations - - (1,730) - (665) (712) (773)
---------- --------- ----------- ------------ --------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 14,465 4,460 222,528 13,178 127,219 112,862 36,958
---------- --------- ----------- ------------ --------- ----------- -----------
Net increase (decrease) in net
assets 11,990 3,187 223,262 12,870 122,997 119,571 39,648
Net assets at beginning of period 91,914 38,324 10,501 125 5,231 103 103
---------- --------- ----------- ------------ --------- ----------- -----------
Net assets at end of period $ 103,904 41,511 233,763 12,995 128,228 119,674 39,751
========== ========= =========== ============ ========= =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Dreyfus INVESCO PIMCO
------------ ----------------------- -----------------------------------------------
VIF VIF High Low StocksPLUS Total
Capital VIF High Yield Duration Growth & Return
Appreciation Dynamics Yield Bond Bond Income Bond
------------ ----------- ---------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (535) (716) (118) 4 3 3 527
Net realized gain (loss) 37 373 (20) - - - (23)
Change in unrealized appreciation 7,579 17,382 129 (6) - (4) 327
------------ ----------- ---------- --------- ---------- ----------- -----------
Net increase (decrease) from
operations 7,081 17,039 (9) (2) 3 (1) 831
------------ ----------- ---------- --------- ---------- ----------- -----------
Contract transactions:
Cova payments - - - - - - -
Cova redemptions - - - - - - -
Payments received from contract
owners 206,299 188,327 20,127 - - - 18,356
Transfers between sub-accounts
(including fixed account), net 5,414 6,167 (2,309) - - - (3,513)
Transfers for contract benefits and
terminations (958) (1,054) - - - - -
------------ ----------- ---------- --------- ---------- ----------- -----------
Net increase (decrease) in net
assets from contract
transactions 210,755 193,440 17,818 - - - 14,843
------------ ----------- ---------- --------- ---------- ----------- -----------
Net increase (decrease) in net
assets 217,836 210,479 17,809 (2) 3 (1) 15,674
Net assets at beginning of period 101 21,750 10,088 101 100 103 15,095
------------ ----------- ---------- --------- ---------- ----------- -----------
Net assets at end of period $ 217,937 232,229 27,897 99 103 102 30,769
============ =========== ========== ========= ========== =========== ===========
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Statement of Changes in Net Assets
Period ended June 30, 2000
Unaudited
<TABLE>
<CAPTION>
Scudder
-------------------
International Total
------------------- --------------------
<S> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (expense) $ (127) 1,129,725
Net realized gain (loss) 4,668 8,382,091
Change in unrealized appreciation (6,771) (12,730,791)
------------------- --------------------
Net increase (decrease) from
operations (2,230) (3,218,975)
------------------- --------------------
Contract transactions:
Cova payments - 1,900
Cova redemptions - (91)
Payments received from contract
owners 125,966 10,042,111
Transfers between sub-accounts
(including fixed account), net 4,674 11,246,166
Transfers for contract benefits and
terminations (655) (4,565,499)
------------------- --------------------
Net increase (decrease) in net
assets from contract
transactions 129,985 16,724,587
------------------- --------------------
Net increase (decrease) in net
assets 127,755 13,505,612
Net assets at beginning of period 7,267 184,285,263
------------------- --------------------
Net assets at end of period $ 135,022 197,790,875
=================== ====================
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
---------- ---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
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. V.I. Real Tiger Growth
V.I. Capital International Premier Estate Fund, and
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
------------------------- ------------------------------------------------- --------
Dreman
High Small Small
International Global 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
------------------------------------------------------------------------- ------------
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 VT
Growth Growth VT
and High Strategic and New VT
Income Income Bond Bond Income Value 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 Global Franklin Developing
International New Income Small Growth International Markets
Growth Opportunities Securities Cap Securities Securities Securities
------------ ------------- --------- ---------- ----------- ------------ -----------
<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
------------------------- -------------------------------------------------------------
Franklin
Mutual Large Cap VIP III VIP III VIP
Shares Growth VIP VIP II Growth Growth & Equity-
Securities Securities 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 VP Stock Disciplined Capital VIF
Growth International 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>
AIM Alliance Liberty Goldman Sachs
-------------------------------------- ----------------------- ---------- ------------
Newport
V.I. V.I. Real Tiger Growth
V.I. Capital International Premier Estate Fund, and
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
----------------------- -------------------------------------------------- ---------
Dreman
High Small Small
International Global 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
------------------------------------------------------------------------- ------------
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 VT
Growth Growth VT
and High Strategic and New VT
Income Income Bond Bond Income Value 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 Global Franklin Developing
International New Income Small Growth International Markets
Growth Opportunities Securities Cap Securities Securities Securities
------------- ------------- ----------- --------- ----------- ------------ ------------
<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
---------------------- ----------------------------------------------------------------
Franklin
Mutual Large Cap VIP III VIP III VIP
Shares Growth VIP VIP II Growth Growth & Equity-
Securities Securities 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
----------- --------------------------------------------- ------------
VIF 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
Notes to Financial Statements
June 30, 2000
Unaudited
(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 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
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
Franklin Templeton Variable Insurance Products Trust (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>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
(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 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.
(3) SEPARATE ACCOUNT EXPENSES
For variable annuity contracts with a contingent deferred sales charge,
CFLIC deducts a daily charge from the net assets of the Separate Account
sub-accounts equivalent to an annual rate of 1.25% for the assumption of
mortality and expense risks and 0.15% for administrative expenses. For
variable annuity contracts with a sales charge (Series A), CFLIC deducts
a daily charge from the net assets of the Separate Account sub-accounts
equivalent to an annual rate of 0.85% for the assumption of mortality and
expense risks.
(4) CONTRACT FEES
For variable annuity contracts with a contingent deferred sales charge,
there is no deduction 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, CFLIC deducts a surrender charge 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 period ended June 30, 2000, CFLIC deducted
surrender fees of $46,542 from the Separate Account.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
For variable annuity contracts with a sales charge (Series A), CFLIC
deducts a sales charge from the gross purchase payment before the payment
is allocated to the Separate Account and / or a fixed account. The amount
of the sales charge depends on the contract owner's investment at the
time of the payment as follows:
Owner's Sales Charge as a % of
Investment Gross Purchase Payment
------------------------ ------------------------
less than $50,000 5.75%
$50,000 - $99,999.99 4.50%
$100,000 - $249,999.99 3.50%
$250,000 - $499,999.99 2.50%
$500,000 - $999,999.99 2.00%
$1,000,000 or more 1.00%
CFLIC imposes an annual contract maintenance fee of $30 on variable
annuity contracts with contract values less than $50,000 on the
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
portion of the accumulated value of the contract among the available
sub-accounts and the fixed rate account. After 12 transfers are made in a
contract year, CFLIC may deduct a transfer fee of $25 per additional
transfer or, if less, 2% of the amount transferred, from the contract
value. Transfers made in a dollar cost averaging program are not subject
to the transfer fee. During the period ended June 30, 2000, CFLIC
deducted contract maintenance and transfer fees of $20,478 from the
Separate Account.
Currently, CFLIC advances any premium taxes due at the time purchase
payments are made and 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
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(5) COST BASIS OF INVESTMENTS
The cost basis of each sub-account's investment follows:
<S> <C>
Cova Lord Abbett Growth and Income $ 46,179,324
Cova Bond Debenture 12,173,248
Cova Developing Growth 2,109,369
Cova Large Cap Research 2,287,540
Cova Mid-Cap Value 1,568,153
Cova Quality Bond 6,909,329
Cova Small Cap Stock 9,216,953
Cova Large Cap Stock 30,577,707
Cova Select Equity 21,322,362
Cova International Equity 11,514,254
GACC Money Market 2,113,366
Russell Multi-Style Equity 4,329,452
Russell Aggressive Equity 687,466
Russell Non-US 1,810,031
Russell Core Bond 2,747,306
Russell Real Estate Securities 169,996
AIM V.I. Value 4,296,695
AIM V.I. Capital Appreciation 2,357,153
AIM V.I. International Equity 464,083
Alliance Premier Growth 3,067,196
Alliance Real Estate Investment 380,140
Liberty Newport Tiger Fund, Variable 48,325
Goldman Sachs Growth and Income 309,463
Goldman Sachs International Equity 340,824
Goldman Sachs Global Income 45,060
Kemper Dreman High Return Equity 108
Kemper Small Cap Growth 139,529
Kemper Small Cap Value 283,360
Kemper Government Securities 253,293
MFS Bond 107
MFS Research 996,909
MFS Growth with Income 1,558,667
MFS Emerging Growth 1,232,423
MFS Emerging Markets Equity 26,276
MFS High Income 289,895
MFS Global Governments 13,972
Oppenheimer Capital Appreciation 456,580
Oppenheimer Main Street Growth & Income 578,860
Oppenheimer High Income 297,110
Oppenheimer Bond 859,909
Oppenheimer Strategic Bond 89,416
Putnam VT Growth and Income 1,793,200
Putnam VT New Value 35,951
Putnam VT Vista 404,991
Putnam VT International Growth 1,638,329
Putnam VT International New Opportunities 286,771
Templeton Global Income Securities 14,397
Franklin Small Cap 841,683
Templeton Growth Securities 280,826
Templeton International Securities 743,664
Templeton Developing Markets Securities 263,558
Templeton Mutual Shares Securities 272,844
Franklin Large Cap Growth Securities 446,808
Fidelity VIP Growth 119,545
Fidelity VIP II Contrafund 22,987
Fidelity VIP III Growth Opportunities 21,476
Fidelity VIP III Growth & Income 106,154
Fidelity VIP Equity-Income 46,867
American Century VP Income & Growth 232,809
American Century VP International 13,281
American Century VP Value 132,512
Dreyfus Stock Index 113,705
Dreyfus VIF Disciplined Stock 37,274
Dreyfus VIF Capital Appreciation 210,817
INVESCO VIF Dynamics 213,852
INVESCO VIF High Yield 27,799
PIMCO High Yield Bond 105
PIMCO Low Duration Bond 104
PIMCO StocksPLUS Growth & Income 110
PIMCO Total Return Bond 30,501
Scudder International 141,638
----------------
$ 182,595,767
================
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE
Commenced Sub-account Accumulation Unit Value
--------------------------------------------------------------------
Operations 6/30/00 12/31/99 12/31/98 12/31/97 12/31/96
------------ ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Cova Lord Abbett Growth and Income 01/08/99 $ 38.332363 39.456973 - - -
Cova Bond Debenture 05/20/96 13.863769 13.765395 13.496510 12.881799 11.294929
Cova Developing Growth 11/07/97 12.662547 14.452893 11.067868 10.527555 -
Cova Large Cap Research 02/17/98 13.839381 14.635794 11.825638 - -
Cova Mid-Cap Value 11/07/97 12.717054 10.875543 10.437956 10.467957 -
Cova Quality Bond 05/20/96 11.904337 11.567172 11.914509 11.155144 10.368767
Cova Small Cap Stock 05/15/96 17.951629 17.932499 12.582885 13.491493 11.308427
Cova Large Cap Stock 05/16/96 21.909614 22.548971 19.428505 14.889464 11.334982
Cova Select Equity 05/15/96 18.072905 18.384684 16.987203 14.053503 10.838053
Cova International Equity 05/14/96 15.563493 16.333932 12.889314 11.462436 10.967004
GACC Money Market 12/04/97 11.796561 11.525403 11.109949 10.667017 -
Russell Multi-Style Equity 12/31/97 13.977885 14.719616 12.740123 10.000000 -
Russell Aggressive Equity 12/31/97 10.742768 10.461908 10.001283 10.000000 -
Russell Non-US 12/31/97 13.922578 14.706241 11.182808 10.000000 -
Russell Core Bond 12/31/97 10.728280 10.419502 10.631124 10.000000 -
Russell Real Estate Securities 07/01/99 10.437504 9.395293 0.000000 0.000000 -
AIM V.I. Value 12/31/97 16.587347 16.748633 13.075597 10.000000 -
AIM V.I. Capital Appreciation 12/31/97 18.086546 16.827440 11.800084 10.000000 -
AIM V.I. International Equity 12/31/97 15.455037 17.458837 11.418467 10.000000 -
Alliance Premier Growth 12/31/97 19.525610 19.075994 14.620511 10.000000 -
Alliance Real Estate Investment 12/31/97 8.620668 7.486033 8.000583 10.000000 -
Liberty Newport Tiger Fund, Variable 12/31/97 15.234527 15.397535 9.278784 10.000000 -
Goldman Sachs Growth and Income 03/31/98 10.306101 10.302541 9.911702 - -
Goldman Sachs International Equity 03/31/98 14.506992 14.844433 11.416783 - -
Goldman Sachs Global Income 03/31/98 10.824830 10.556976 10.815310 - -
Kemper Dreman High Return Equity 05/15/98 9.433000 9.270000 10.489000 - -
Kemper Small Cap Growth 12/31/97 16.768570 15.505196 11.687795 10.000000 -
Kemper Small Cap Value 12/31/97 8.658682 8.886027 8.770360 10.000000 -
Kemper Government Securities 12/31/97 10.896008 10.558404 10.634608 10.000000 -
MFS Bond 05/15/98 10.533000 10.288000 10.509000 - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE
Commenced Sub-account Accumulation Unit Net Assets (in thousands)
--------------------------------------------------------------------
Operations 6/30/00 12/31/99 12/31/98 12/31/97 12/31/96
------------ ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Cova Lord Abbett Growth and Income 01/08/99 $ 48,283 49,100 - - -
Cova Bond Debenture 05/20/96 11,815 11,836 9,200 4,475 447
Cova Developing Growth 11/07/97 2,196 1,880 785 64 -
Cova Large Cap Research 02/17/98 2,339 2,084 590 - -
Cova Mid-Cap Value 11/07/97 1,861 1,437 892 89 -
Cova Quality Bond 05/20/96 6,755 7,280 5,970 2,617 669
Cova Small Cap Stock 05/15/96 12,072 11,346 8,354 6,578 1,279
Cova Large Cap Stock 05/16/96 34,824 34,554 22,001 10,224 1,431
Cova Select Equity 05/15/96 22,433 22,759 17,884 9,845 2,011
Cova International Equity 05/14/96 13,497 13,704 10,046 6,351 1,360
GACC Money Market 12/04/97 2,194 1,821 1,440 150 -
Russell Multi-Style Equity 12/31/97 4,276 3,147 616 - -
Russell Aggressive Equity 12/31/97 732 463 87 - -
Russell Non-US 12/31/97 1,935 1,454 204 - -
Russell Core Bond 12/31/97 2,684 2,299 654 - -
Russell Real Estate Securities 07/01/99 184 56 - - -
AIM V.I. Value 12/31/97 4,438 2,659 37 - -
AIM V.I. Capital Appreciation 12/31/97 2,606 1,065 66 - -
AIM V.I. International Equity 12/31/97 517 337 174 - -
Alliance Premier Growth 12/31/97 3,579 2,496 919 - -
Alliance Real Estate Investment 12/31/97 377 220 177 - -
Liberty Newport Tiger Fund, Variable 12/31/97 66 41 22 - -
Goldman Sachs Growth and Income 03/31/98 309 282 130 - -
Goldman Sachs International Equity 03/31/98 394 402 181 - -
Goldman Sachs Global Income 03/31/98 44 33 32 - -
Kemper Dreman High Return Equity 05/15/98 - - - - -
Kemper Small Cap Growth 12/31/97 173 127 45 - -
Kemper Small Cap Value 12/31/97 275 246 146 - -
Kemper Government Securities 12/31/97 247 220 27 - -
MFS Bond 05/15/98 - - - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED:
Commenced Sub-account Accumulation Unit Value
-------------------------------------------------------------------
Operations 6/30/00 12/31/99 12/31/98 12/31/97 12/31/96
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
MFS Research 12/31/97 $ 15.728023 14.897867 12.179142 10.000000 -
MFS Growth with Income 12/31/97 12.680932 12.703932 12.075079 10.000000 -
MFS Emerging Growth 12/31/97 22.392669 23.079105 13.244101 10.000000 -
MFS Emerging Markets Equity 12/31/97 8.490029 8.967637 6.581757 10.000000 -
MFS High Income 12/31/97 10.306573 10.352934 9.863111 10.000000 -
MFS Global Governments 12/31/97 10.327628 10.252619 10.663503 10.000000 -
Oppenheimer Capital Appreciation 12/31/97 18.584199 17.103249 12.244057 10.000000 -
Oppenheimer Main Street Growth & Income 12/31/97 12.347253 12.409773 10.340279 10.000000 -
Oppenheimer High Income 12/31/97 10.055083 10.189165 9.907918 10.000000 -
Oppenheimer Bond 12/31/97 10.373713 10.246949 10.551643 10.000000 -
Oppenheimer Strategic Bond 12/31/97 10.415097 10.306821 10.164797 10.000000 -
Putnam VT Growth and Income 12/31/97 11.010732 11.422706 11.403244 10.000000 -
Putnam VT New Value 12/31/97 10.616631 10.379438 10.498075 10.000000 -
Putnam VT Vista 12/31/97 20.545155 17.797452 11.804097 10.000000 -
Putnam VT International Growth 12/31/97 18.510367 18.522808 11.729428 10.000000 -
Putnam VT International New Opportunities 12/31/97 19.194182 22.858952 11.420772 10.000000 -
Templeton Global Income Securities 03/01/99 9.739731 9.702219 - - -
Franklin Small Cap 03/01/99 18.368325 17.718917 - - -
Templeton Growth Securities 03/02/99 13.694404 13.322067 - - -
Templeton International Securities 09/21/98 11.144004 11.157985 9.149729 - -
Templeton Developing Markets Securities 09/21/98 9.467613 11.479237 7.557531 - -
Templeton Mutual Shares Securities 09/21/98 10.413965 10.433275 9.646506 - -
Franklin Large Cap Growth Securities 03/01/99 16.270512 14.687812 - - -
Fidelity VIP Growth 02/17/98 18.559230 17.780613 13.115493 - -
Fidelity VIP II Contrafund 02/17/98 14.930844 15.235791 12.429344 - -
Fidelity VIP III Growth Opportunities 02/17/98 11.618022 12.142823 11.814000 - -
Fidelity VIP III Growth & Income 02/17/98 12.814443 13.198268 12.259160 - -
Fidelity VIP Equity-Income 02/17/98 10.821363 11.196008 10.674283 - -
American Century VP Income & Growth 11/19/99 9.884945 10.324878 - - -
American Century VP International 11/19/99 11.711608 12.517000 - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED:
Commenced Sub-account Accumulation Unit Net Assets (in thousands)
-------------------------------------------------------------------
Operations 6/30/00 12/31/99 12/31/98 12/31/97 12/31/96
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
MFS Research 12/31/97 $ 1,167 926 317 - -
MFS Growth with Income 12/31/97 1,678 1,435 782 - -
MFS Emerging Growth 12/31/97 1,764 1,444 632 - -
MFS Emerging Markets Equity 12/31/97 30 35 28 - -
MFS High Income 12/31/97 269 223 129 - -
MFS Global Governments 12/31/97 13 11 4 - -
Oppenheimer Capital Appreciation 12/31/97 526 273 62 - -
Oppenheimer Main Street Growth & Income 12/31/97 603 429 154 - -
Oppenheimer High Income 12/31/97 266 261 104 - -
Oppenheimer Bond 12/31/97 802 735 489 - -
Oppenheimer Strategic Bond 12/31/97 84 77 27 - -
Putnam VT Growth and Income 12/31/97 1,548 1,502 914 - -
Putnam VT New Value 12/31/97 35 24 23 - -
Putnam VT Vista 12/31/97 539 315 80 - -
Putnam VT International Growth 12/31/97 1,986 1,519 663 - -
Putnam VT International New Opportunities 12/31/97 316 199 55 - -
Templeton Global Income Securities 03/01/99 14 8 - - -
Franklin Small Cap 03/01/99 844 128 - - -
Templeton Growth Securities 03/02/99 225 116 - - -
Templeton International Securities 09/21/98 733 567 61 - -
Templeton Developing Markets Securities 09/21/98 268 152 53 - -
Templeton Mutual Shares Securities 09/21/98 272 99 9 - -
Franklin Large Cap Growth Securities 03/01/99 426 157 - - -
Fidelity VIP Growth 02/17/98 129 85 7 - -
Fidelity VIP II Contrafund 02/17/98 23 9 1 - -
Fidelity VIP III Growth Opportunities 02/17/98 20 6 1 - -
Fidelity VIP III Growth & Income 02/17/98 104 92 26 - -
Fidelity VIP Equity-Income 02/17/98 42 38 8 - -
American Century VP Income & Growth 11/19/99 234 11 - - -
American Century VP International 11/19/99 13 - - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED:
Commenced Sub-account Accumulation Unit Value
-------------------------------------------------------------------
Operations 6/30/00 12/31/99 12/31/98 12/31/97 12/31/96
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
American Century VP Value 11/19/99 $ 9.139577 9.586953 - - -
Dreyfus Stock Index 11/19/99 10.217333 10.336000 - - -
Dreyfus VIF Disciplined Stock 11/19/99 10.283599 10.306000 - - -
Dreyfus VIF Capital Appreciation 11/19/99 10.349457 10.128000 - - -
INVESCO VIF Dynamics 11/19/99 12.586676 11.148744 - - -
INVESCO VIF High Yield 11/19/99 9.920855 10.122749 - - -
PIMCO High Yield Bond 11/19/99 9.928000 10.078000 - - -
PIMCO Low Duration Bond 11/19/99 10.252000 9.969000 - - -
PIMCO StocksPLUS Growth & Income 11/19/99 10.154000 10.311000 - - -
PIMCO Total Return Bond 11/19/99 10.160983 9.898482 - - -
Scudder International 11/19/99 10.295987 11.637458 - - -
Cova Lord Abbett Growth and Income Series A 03/01/00 10.717190 - - - -
Cova Bond Debenture Series A 03/01/00 9.969311 - - - -
Cova Developing Growth Series A 03/01/00 8.334000 - - - -
Cova Large Cap Research Series A 03/01/00 10.523000 - - - -
Cova Mid-Cap Value Series A 03/01/00 12.064404 - - - -
Cova Quality Bond Series A 03/01/00 10.263000 - - - -
Cova Small Cap Stock Series A 03/01/00 8.186153 - - - -
Cova Large Cap Stock Series A 03/01/00 10.460972 - - - -
Cova Select Equity Series A 03/01/00 10.524000 - - - -
Cova International Equity Series A 03/01/00 9.365403 - - - -
GACC Money Market Series A 03/01/00 10.193000 - - - -
AIM V.I. Value Series A 03/01/00 9.730831 - - - -
AIM V.I. Capital Appreciation Series A 03/01/00 9.551887 - - - -
AIM V.I. International Equity Series A 03/01/00 9.569000 - - - -
Templeton Global Income Securities Series A 03/01/00 10.131000 - - - -
Franklin Small Cap Series A 03/01/00 8.953000 - - - -
Templeton Growth Securities Series A 03/01/00 10.055047 - - - -
Templeton International Securities Series A 03/01/00 10.300000 - - - -
Franklin Large Cap Growth Securities Series A 03/01/00 10.279387 - - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED:
Commenced Sub-account Accumulation Unit Net Assets (in thousands)
-------------------------------------------------------------------
Operations 6/30/00 12/31/99 12/31/98 12/31/97 12/31/96
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
American Century VP Value 11/19/99 $ 128 5 - - -
Dreyfus Stock Index 11/19/99 120 - - - -
Dreyfus VIF Disciplined Stock 11/19/99 40 - - - -
Dreyfus VIF Capital Appreciation 11/19/99 218 - - - -
INVESCO VIF Dynamics 11/19/99 232 22 - - -
INVESCO VIF High Yield 11/19/99 28 10 - - -
PIMCO High Yield Bond 11/19/99 - - - - -
PIMCO Low Duration Bond 11/19/99 - - - - -
PIMCO StocksPLUS Growth & Income 11/19/99 - - - - -
PIMCO Total Return Bond 11/19/99 31 15 - - -
Scudder International 11/19/99 135 7 - - -
Cova Lord Abbett Growth and Income Series A 03/01/00 71 - - - -
Cova Bond Debenture Series A 03/01/00 49 - - - -
Cova Developing Growth Series A 03/01/00 - - - - -
Cova Large Cap Research Series A 03/01/00 - - - - -
Cova Mid-Cap Value Series A 03/01/00 13 - - - -
Cova Quality Bond Series A 03/01/00 - - - - -
Cova Small Cap Stock Series A 03/01/00 41 - - - -
Cova Large Cap Stock Series A 03/01/00 76 - - - -
Cova Select Equity Series A 03/01/00 - - - - -
Cova International Equity Series A 03/01/00 61 - - - -
GACC Money Market Series A 03/01/00 - - - - -
AIM V.I. Value Series A 03/01/00 143 - - - -
AIM V.I. Capital Appreciation Series A 03/01/00 89 - - - -
AIM V.I. International Equity Series A 03/01/00 - - - - -
Templeton Global Income Securities Series A 03/01/00 - - - - -
Franklin Small Cap Series A 03/01/00 - - - - -
Templeton Growth Securities Series A 03/01/00 40 - - - -
Templeton International Securities Series A 03/01/00 - - - - -
Franklin Large Cap Growth Securities Series A 03/01/00 52 - - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED
Commenced Sub-account Accumulation Unit Total Return
-------------------------------------------------------------------
Operations 2000 1999 1998 1997 1996
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Cova Lord Abbett Growth and Income 01/08/99 -2.85% 9.90% - - -
Cova Bond Debenture 05/20/96 0.71% 1.99% 4.77% 14.05% 11.32%
Cova Developing Growth 11/07/97 -12.39% 30.58% 5.13% -2.80% -
Cova Large Cap Research 02/17/98 -5.44% 23.76% 9.94% - -
Cova Mid-Cap Value 11/07/97 16.93% 4.19% -0.29% 4.17% -
Cova Quality Bond 05/20/96 2.92% -2.92% 6.81% 7.58% 4.20%
Cova Small Cap Stock 05/15/96 0.11% 42.52% -6.74% 19.31% 3.69%
Cova Large Cap Stock 05/16/96 -2.84% 16.06% 30.49% 31.36% 11.62%
Cova Select Equity 05/15/96 -1.70% 8.23% 20.88% 29.67% 6.76%
Cova International Equity 05/14/96 -4.72% 26.73% 12.45% 4.52% 8.60%
GACC Money Market 12/04/97 2.35% 3.74% 4.15% 0.34% -
Russell Multi-Style Equity 12/31/97 -5.04% 15.54% 27.40% - -
Russell Aggressive Equity 12/31/97 2.68% 4.61% 0.01% - -
Russell Non-US 12/31/97 -5.33% 31.51% 11.83% - -
Russell Core Bond 12/31/97 2.96% -1.99% 6.31% - -
Russell Real Estate Securities 07/01/99 11.09% -6.05% - - -
AIM V.I. Value 12/31/97 -0.96% 28.09% 30.76% - -
AIM V.I. Capital Appreciation 12/31/97 7.48% 42.60% 18.00% - -
AIM V.I. International Equity 12/31/97 -11.48% 52.90% 14.19% - -
Alliance Premier Growth 12/31/97 2.36% 30.47% 46.21% - -
Alliance Real Estate Investment 12/31/97 15.16% -6.43% -19.99% - -
Liberty Newport Tiger Fund, Variable 12/31/97 -1.06% 65.94% -7.21% - -
Goldman Sachs Growth and Income 03/31/98 0.04% 3.94% -11.60% - -
Goldman Sachs International Equity 03/31/98 -2.27% 30.02% 1.94% - -
Goldman Sachs Global Income 03/31/98 2.54% -2.39% 6.53% - -
Kemper Dreman High Return Equity 05/15/98 1.76% -11.62% 4.89% - -
Kemper Small Cap Growth 12/31/97 8.15% 32.66% 16.88% - -
Kemper Small Cap Value 12/31/97 -2.56% 1.32% -12.30% - -
Kemper Government Securities 12/31/97 3.20% -0.72% 6.35% - -
MFS Bond 05/15/98 2.38% -2.10% 5.09% - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED
Commenced Sub-Account Expenses as a % of Average Net Assets*
-------------------------------------------------------------------
Operations 2000 1999 1998 1997 1996
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Cova Lord Abbett Growth and Income 01/08/99 1.40% 1.40% - - -
Cova Bond Debenture 05/20/96 1.40% 1.40% 1.40% 1.40% 1.40%
Cova Developing Growth 11/07/97 1.40% 1.40% 1.40% 1.40% -
Cova Large Cap Research 02/17/98 1.40% 1.40% 1.40% - -
Cova Mid-Cap Value 11/07/97 1.40% 1.40% 1.40% 1.40% -
Cova Quality Bond 05/20/96 1.40% 1.40% 1.40% 1.40% 1.40%
Cova Small Cap Stock 05/15/96 1.40% 1.40% 1.40% 1.40% 1.40%
Cova Large Cap Stock 05/16/96 1.40% 1.40% 1.40% 1.40% 1.40%
Cova Select Equity 05/15/96 1.40% 1.40% 1.40% 1.40% 1.40%
Cova International Equity 05/14/96 1.40% 1.40% 1.40% 1.40% 1.40%
GACC Money Market 12/04/97 1.40% 1.40% 1.40% 1.40% -
Russell Multi-Style Equity 12/31/97 1.40% 1.40% 1.40% - -
Russell Aggressive Equity 12/31/97 1.40% 1.40% 1.40% - -
Russell Non-US 12/31/97 1.40% 1.40% 1.40% - -
Russell Core Bond 12/31/97 1.40% 1.40% 1.40% - -
Russell Real Estate Securities 07/01/99 1.40% 1.40% - - -
AIM V.I. Value 12/31/97 1.40% 1.40% 1.40% - -
AIM V.I. Capital Appreciation 12/31/97 1.40% 1.40% 1.40% - -
AIM V.I. International Equity 12/31/97 1.40% 1.40% 1.40% - -
Alliance Premier Growth 12/31/97 1.40% 1.40% 1.40% - -
Alliance Real Estate Investment 12/31/97 1.40% 1.40% 1.40% - -
Liberty Newport Tiger Fund, Variable 12/31/97 1.40% 1.40% 1.39% - -
Goldman Sachs Growth and Income 03/31/98 1.40% 1.40% 1.40% - -
Goldman Sachs International Equity 03/31/98 1.40% 1.40% 1.40% - -
Goldman Sachs Global Income 03/31/98 1.40% 1.40% 1.40% - -
Kemper Dreman High Return Equity 05/15/98 1.40% 1.40% 0.55% - -
Kemper Small Cap Growth 12/31/97 1.40% 1.40% 1.40% - -
Kemper Small Cap Value 12/31/97 1.40% 1.40% 1.40% - -
Kemper Government Securities 12/31/97 1.40% 1.40% 1.38% - -
MFS Bond 05/15/98 1.40% 1.40% 0.52% - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED
Commenced Sub-account Accumulation Unit Total Return
-------------------------------------------------------------------
Operations 2000 1999 1998 1997 1996
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
MFS Research 12/31/97 5.57% 22.32% 21.79% - -
MFS Growth with Income 12/31/97 -0.18% 5.21% 20.75% - -
MFS Emerging Growth 12/31/97 -2.97% 74.26% 32.44% - -
MFS Emerging Markets Equity 12/31/97 -5.33% 36.25% -34.18% - -
MFS High Income 12/31/97 -0.45% 4.97% -1.37% - -
MFS Global Governments 12/31/97 0.73% -3.85% 6.63% - -
Oppenheimer Capital Appreciation 12/31/97 8.66% 39.69% 22.44% - -
Oppenheimer Main Street Growth & Income 12/31/97 -0.50% 20.01% 3.40% - -
Oppenheimer High Income 12/31/97 -1.32% 2.84% -0.92% - -
Oppenheimer Bond 12/31/97 1.24% -2.89% 5.52% - -
Oppenheimer Strategic Bond 12/31/97 1.05% 1.40% 1.65% - -
Putnam VT Growth and Income 12/31/97 -3.61% 0.17% 14.03% - -
Putnam VT New Value 12/31/97 2.29% -1.13% 4.98% - -
Putnam VT Vista 12/31/97 15.44% 50.77% 18.04% - -
Putnam VT International Growth 12/31/97 -0.07% 57.92% 17.29% - -
Putnam VT International New Opportunities 12/31/97 -16.03% 100.15% 14.21% - -
Templeton Global Income Securities 03/01/99 -0.70% -2.98% - - -
Franklin Small Cap 03/01/99 -2.00% 77.19% - - -
Templeton Growth Securities 03/02/99 -15.77% 33.22% - - -
Templeton International Securities 09/21/98 -0.12% 21.95% 15.92% - -
Templeton Developing Markets Securities 09/21/98 -17.52% 51.89% 33.87% - -
Templeton Mutual Shares Securities 09/21/98 -4.75% 8.16% 11.61% - -
Franklin Large Cap Growth Securities 03/01/99 4.96% 46.88% - - -
Fidelity VIP Growth 02/17/98 4.38% 35.57% 31.16% - -
Fidelity VIP II Contrafund 02/17/98 -2.00% 22.58% 24.29% - -
Fidelity VIP III Growth Opportunities 02/17/98 -4.32% 2.78% 18.14% - -
Fidelity VIP III Growth & Income 02/17/98 -2.91% 7.66% 22.59% - -
Fidelity VIP Equity-Income 02/17/98 -3.35% 4.89% 6.74% - -
American Century VP Income & Growth 11/19/99 -4.26% 3.25% - - -
American Century VP International 11/19/99 -6.43% 25.17% - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED
Commenced Sub-Account Expenses as a % of Average Net Assets*
-------------------------------------------------------------------
Operations 2000 1999 1998 1997 1996
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
MFS Research 12/31/97 1.40% 1.40% 1.40% - -
MFS Growth with Income 12/31/97 1.40% 1.40% 1.40% - -
MFS Emerging Growth 12/31/97 1.40% 1.40% 1.40% - -
MFS Emerging Markets Equity 12/31/97 1.40% 1.40% 1.40% - -
MFS High Income 12/31/97 1.40% 1.40% 1.40% - -
MFS Global Governments 12/31/97 1.40% 1.40% 1.37% - -
Oppenheimer Capital Appreciation 12/31/97 1.40% 1.40% 1.40% - -
Oppenheimer Main Street Growth & Income 12/31/97 1.40% 1.40% 1.40% - -
Oppenheimer High Income 12/31/97 1.40% 1.40% 1.40% - -
Oppenheimer Bond 12/31/97 1.40% 1.40% 1.40% - -
Oppenheimer Strategic Bond 12/31/97 1.40% 1.40% 1.40% - -
Putnam VT Growth and Income 12/31/97 1.40% 1.40% 1.40% - -
Putnam VT New Value 12/31/97 1.40% 1.40% 1.40% - -
Putnam VT Vista 12/31/97 1.40% 1.40% 1.40% - -
Putnam VT International Growth 12/31/97 1.40% 1.40% 1.40% - -
Putnam VT International New Opportunities 12/31/97 1.40% 1.40% 1.40% - -
Templeton Global Income Securities 03/01/99 1.40% 1.40% - - -
Franklin Small Cap 03/01/99 1.40% 1.40% - - -
Templeton Growth Securities 03/02/99 1.40% 1.40% - - -
Templeton International Securities 09/21/98 1.40% 1.40% 1.40% - -
Templeton Developing Markets Securities 09/21/98 1.40% 1.40% 1.40% - -
Templeton Mutual Shares Securities 09/21/98 1.40% 1.40% 1.32% - -
Franklin Large Cap Growth Securities 03/01/99 1.40% 1.40% - - -
Fidelity VIP Growth 02/17/98 1.40% 1.40% 1.35% - -
Fidelity VIP II Contrafund 02/17/98 1.40% 1.40% 0.75% - -
Fidelity VIP III Growth Opportunities 02/17/98 1.40% 1.40% 0.52% - -
Fidelity VIP III Growth & Income 02/17/98 1.40% 1.40% 1.39% - -
Fidelity VIP Equity-Income 02/17/98 1.40% 1.40% 1.34% - -
American Century VP Income & Growth 11/19/99 1.40% 1.40% - - -
American Century VP International 11/19/99 1.40% 1.40% - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED
Commenced Sub-account Accumulation Unit Total Return
-------------------------------------------------------------------
Operations 2000 1999 1998 1997 1996
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
American Century VP Value 11/19/99 -4.67% -4.13% - - -
Dreyfus Stock Index 11/19/99 -1.15% 3.36% - - -
Dreyfus VIF Disciplined Stock 11/19/99 -0.22% 3.06% - - -
Dreyfus VIF Capital Appreciation 11/19/99 2.19% 1.28% - - -
INVESCO VIF Dynamics 11/19/99 12.90% 11.49% - - -
INVESCO VIF High Yield 11/19/99 -1.99% 1.23% - - -
PIMCO High Yield Bond 11/19/99 -1.49% 0.78% - - -
PIMCO Low Duration Bond 11/19/99 2.84% -0.31% - - -
PIMCO StocksPLUS Growth & Income 11/19/99 -1.52% 3.11% - - -
PIMCO Total Return Bond 11/19/99 2.65% -1.02% - - -
Scudder International 11/19/99 -11.53% 16.38% - - -
Cova Lord Abbett Growth and Income Series A 03/01/00 -2.50% - - - -
Cova Bond Debenture Series A 03/01/00 1.06% - - - -
Cova Developing Growth Series A 03/01/00 -12.09% - - - -
Cova Large Cap Research Series A 03/01/00 -5.09% - - - -
Cova Mid-Cap Value Series A 03/01/00 17.36% - - - -
Cova Quality Bond Series A 03/01/00 3.32% - - - -
Cova Small Cap Stock Series A 03/01/00 0.42% - - - -
Cova Large Cap Stock Series A 03/01/00 -2.53% - - - -
Cova Select Equity Series A 03/01/00 -1.33% - - - -
Cova International Equity Series A 03/01/00 -4.38% - - - -
GACC Money Market Series A 03/01/00 2.78% - - - -
AIM V.I. Value Series A 03/01/00 -0.62% - - - -
AIM V.I. Capital Appreciation Series A 03/01/00 7.86% - - - -
AIM V.I. International Equity Series A 03/01/00 -12.31% - - - -
Templeton Global Income Securities Series A 03/01/00 -0.36% - - - -
Franklin Small Cap Series A 03/01/00 -1.66% - - - -
Templeton Growth Securities Series A 03/01/00 -15.53% - - - -
Templeton International Securities Series A 03/01/00 0.24% - - - -
Franklin Large Cap Growth Securities Series A 03/01/00 5.27% - - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(6) UNIT FAIR VALUE, CONTINUED
Commenced Sub-Account Expenses as a % of Average Net Assets*
-------------------------------------------------------------------
Operations 2000 1999 1998 1997 1996
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
American Century VP Value 11/19/99 1.40% 1.40% - - -
Dreyfus Stock Index 11/19/99 1.40% 1.40% - - -
Dreyfus VIF Disciplined Stock 11/19/99 1.40% 1.40% - - -
Dreyfus VIF Capital Appreciation 11/19/99 1.40% 1.40% - - -
INVESCO VIF Dynamics 11/19/99 1.40% 1.40% - - -
INVESCO VIF High Yield 11/19/99 1.40% 1.40% - - -
PIMCO High Yield Bond 11/19/99 1.40% 1.40% - - -
PIMCO Low Duration Bond 11/19/99 1.40% 1.40% - - -
PIMCO StocksPLUS Growth & Income 11/19/99 1.40% 1.40% - - -
PIMCO Total Return Bond 11/19/99 1.40% 1.40% - - -
Scudder International 11/19/99 1.40% 1.40% - - -
Cova Lord Abbett Growth and Income Series A 03/01/00 0.85% - - - -
Cova Bond Debenture Series A 03/01/00 0.85% - - - -
Cova Developing Growth Series A 03/01/00 0.85% - - - -
Cova Large Cap Research Series A 03/01/00 0.85% - - - -
Cova Mid-Cap Value Series A 03/01/00 0.85% - - - -
Cova Quality Bond Series A 03/01/00 0.85% - - - -
Cova Small Cap Stock Series A 03/01/00 0.85% - - - -
Cova Large Cap Stock Series A 03/01/00 0.85% - - - -
Cova Select Equity Series A 03/01/00 0.85% - - - -
Cova International Equity Series A 03/01/00 0.85% - - - -
GACC Money Market Series A 03/01/00 0.85% - - - -
AIM V.I. Value Series A 03/01/00 0.85% - - - -
AIM V.I. Capital Appreciation Series A 03/01/00 0.85% - - - -
AIM V.I. International Equity Series A 03/01/00 0.85% - - - -
Templeton Global Income Securities Series A 03/01/00 0.85% - - - -
Franklin Small Cap Series A 03/01/00 0.85% - - - -
Templeton Growth Securities Series A 03/01/00 0.85% - - - -
Templeton International Securities Series A 03/01/00 0.85% - - - -
Franklin Large Cap Growth Securities Series A 03/01/00 0.85% - - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<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 period ending
June 30, 2000 and the year ending December 31, 1999 follows:
Sub-account 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 Lord Abbett Growth and Income 2000 $ 1,501,151 $ 1,403,558 $ 97,593
1999 3,133,491 3,049,051 84,440
Cova Bond Debenture 2000 842,418 817,049 25,369
1999 946,728 924,039 22,689
Cova Developing Growth 2000 36,618 29,041 7,577
1999 29,109 25,241 3,868
Cova Large Cap Research 2000 49,901 43,427 6,474
1999 44,923 39,900 5,023
Cova Mid-Cap Value 2000 149,122 135,712 13,410
1999 164,060 155,815 8,245
Cova Quality Bond 2000 1,082,690 1,075,311 7,379
1999 1,843,153 1,830,190 12,963
Cova Small Cap Stock 2000 260,169 183,935 76,234
1999 1,483,447 1,389,634 93,813
Cova Large Cap Stock 2000 944,432 753,745 190,687
1999 2,143,398 1,691,559 451,839
Cova Select Equity 2000 1,049,629 927,708 121,921
1999 1,326,474 1,133,512 192,962
Cova International Equity 2000 394,244 299,294 94,950
1999 868,689 749,767 118,922
GACC Money Market 2000 878,129 849,143 28,986
1999 2,410,357 2,367,151 43,206
Russell Multi-Style Equity 2000 307,949 309,851 (1,902)
1999 201,087 197,677 3,410
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS), CONTINUED:
Sub-account 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>
Russell Aggressive Equity 2000 $ 45,798 $ 43,103 $ 2,695
1999 54,526 54,268 258
Russell Non-US 2000 157,343 145,471 11,872
1999 101,624 93,032 8,592
Russell Core Bond 2000 454,350 476,750 (22,400)
1999 352,634 364,812 (12,178)
Russell Real Estate Securities 2000 28,472 25,976 2,496
1999 1,815 1,814 1
AIM V.I. Value 2000 97,791 87,467 10,324
1999 249,337 244,207 5,130
AIM V.I. Capital Appreciation 2000 6,742 5,824 918
1999 35,568 33,976 1,592
AIM V.I. International Equity 2000 9,846 7,652 2,194
1999 62,427 61,796 631
Alliance Premier Growth 2000 105,875 85,310 20,565
1999 229,266 202,124 27,142
Alliance Real Estate Investment 2000 7,378 8,104 (726)
1999 62,352 66,956 (4,604)
Liberty Newport Tiger Fund, Variable 2000 4,345 2,969 1,376
1999 294 188 106
Goldman Sachs Growth and Income 2000 41,478 42,576 (1,098)
1999 24,697 24,338 359
Goldman Sachs International Equity 2000 18,256 15,446 2,810
1999 26,414 25,126 1,288
Goldman Sachs Global Income 2000 295 306 (11)
1999 513 520 (7)
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS), CONTINUED:
Sub-account 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>
Kemper Dreman High Return Equity 2000 $ - $ - $ -
1999 1 1 -
Kemper Small Cap Growth 2000 5,966 4,757 1,209
1999 8,971 7,861 1,110
Kemper Small Cap Value 2000 11,098 11,382 (284)
1999 38,781 41,554 (2,773)
Kemper Government Securities 2000 11,421 11,487 (66)
1999 167,850 168,571 (721)
MFS Bond 2000 - - -
1999 1 1 -
MFS Research 2000 14,322 11,377 2,945
1999 33,705 31,571 2,134
MFS Growth with Income 2000 63,215 59,258 3,957
1999 73,640 68,795 4,845
MFS Emerging Growth 2000 38,060 23,228 14,832
1999 75,663 60,111 15,552
MFS Emerging Markets Equity 2000 4,467 3,376 1,091
1999 36,299 38,041 (1,742)
MFS High Income 2000 5,355 5,433 (78)
1999 38,805 37,409 1,396
MFS Global Governments 2000 3,132 3,193 (61)
1999 2,043 2,097 (54)
Oppenheimer Capital Appreciation 2000 2,277 1,938 339
1999 19,283 17,339 1,944
Oppenheimer Main Street Growth & Income 2000 8,361 7,921 440
1999 66,494 60,355 6,139
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS), CONTINUED:
Sub-account 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 High Income 2000 $ 5,773 $ 6,330 $ (557)
1999 20,434 20,986 (552)
Oppenheimer Bond 2000 55,423 57,178 (1,755)
1999 134,169 136,015 (1,846)
Oppenheimer Strategic Bond 2000 3,587 3,783 (196)
1999 15,743 15,871 (128)
Putnam VT Growth and Income 2000 96,816 107,850 (11,034)
1999 130,751 127,509 3,242
Putnam VT New Value 2000 447 468 (21)
1999 17,801 16,648 1,153
Putnam VT Vista 2000 9,709 7,076 2,633
1999 32,813 29,123 3,690
Putnam VT International Growth 2000 35,278 26,648 8,630
1999 114,673 103,575 11,098
Putnam VT International New Opportunities 2000 3,820 2,628 1,192
1999 16,020 12,486 3,534
Templeton Global Income Securities 2000 54 56 (2)
1999 41 41 -
Franklin Small Cap 2000 19,715 20,304 (589)
1999 190,577 145,895 44,682
Templeton Growth Securities 2000 793 809 (16)
1999 25,941 26,138 (197)
Templeton International Securities 2000 58,613 59,045 (432)
1999 2,257 2,151 106
Templeton Developing Markets Securities 2000 9,945 8,602 1,343
1999 33,863 28,005 5,858
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS), CONTINUED:
Sub-account 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 Mutual Shares Securities 2000 $ 24,677 $ 24,811 $ (134)
1999 9,338 9,502 (164)
Franklin Large Cap Growth Securities 2000 176,567 179,598 (3,031)
1999 393 364 29
Fidelity VIP Growth 2000 8,105 7,377 728
1999 1,642 1,430 212
Fidelity VIP II Contrafund 2000 850 766 84
1999 92 89 3
Fidelity VIP III Growth Opportunities 2000 125 134 (9)
1999 76 73 3
Fidelity VIP III Growth & Income 2000 2,977 3,030 (53)
1999 1,822 1,642 180
Fidelity VIP Equity-Income 2000 399 445 (46)
1999 540 548 (8)
American Century VP Income & Growth 2000 7,106 7,004 102
1999 - - -
American Century VP International 2000 - - -
1999 - - -
American Century VP Value 2000 2,386 2,495 (109)
1999 - - -
Dreyfus Stock Index 2000 2,811 2,610 201
1999 - - -
Dreyfus VIF Disciplined Stock 2000 3,068 2,832 236
1999 - - -
Dreyfus VIF Capital Appreciation 2000 852 815 37
1999 - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(7) REALIZED GAIN (LOSS), CONTINUED:
Sub-account 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 2000 $ 3,033 $ 2,660 $ 373
1999 - - -
INVESCO VIF High Yield 2000 3,580 3,600 (20)
1999 - - -
PIMCO High Yield Bond 2000 - - -
1999 - - -
PIMCO Low Duration Bond 2000 - - -
1999 - - -
PIMCO StocksPLUS Growth & Income 2000 - - -
1999 - - -
PIMCO Total Return Bond 2000 5,385 5,408 (23)
1999 - - -
Scudder International 2000 563 594 (31)
1999 - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(7) UNREALIZED APPRECIATION:
Sub-account Unrealized Appreciation (Depreciation)
-----------------------------------------------------------------
Appreciation Appreciation
Year or (Depreciation) (Depreciation)
Period End of Period Beginning of Period Change
------------ ------------------ ------------------------------------------
<S> <C> <C> <C> <C>
Cova Lord Abbett Growth and Income 2000 $ 2,290,357 $ 4,841,111 $ (2,550,754)
1999 4,841,111 - 4,841,111
Cova Bond Debenture 2000 (302,124) 337,384 (639,508)
1999 337,384 273,399 63,985
Cova Developing Growth 2000 86,577 460,172 (373,595)
1999 460,172 57,633 402,539
Cova Large Cap Research 2000 51,081 371,070 (319,989)
1999 371,070 52,098 318,972
Cova Mid-Cap Value 2000 308,011 74,191 233,820
1999 74,191 14,516 59,675
Cova Quality Bond 2000 (153,745) 8,755 (162,500)
1999 8,755 254,122 (245,367)
Cova Small Cap Stock 2000 2,895,775 3,439,414 (543,639)
1999 3,439,414 (2,832) 3,442,246
Cova Large Cap Stock 2000 4,333,817 8,146,484 (3,812,667)
1999 8,146,484 4,717,561 3,428,923
Cova Select Equity 2000 1,119,390 3,050,805 (1,931,415)
1999 3,050,805 3,163,743 (112,938)
Cova International Equity 2000 2,046,280 3,605,177 (1,558,897)
1999 3,605,177 918,988 2,686,189
GACC Money Market 2000 80,746 50,675 30,071
1999 50,675 8,746 41,929
Russell Multi-Style Equity 2000 (52,739) 181,798 (234,537)
1999 181,798 37,385 144,413
Russell Aggressive Equity 2000 44,741 39,083 5,658
1999 39,083 (1,753) 40,836
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(7) UNREALIZED APPRECIATION, CONTINUED:
Sub-account Unrealized Appreciation (Depreciation)
-----------------------------------------------------------------
Appreciation Appreciation
Year or (Depreciation) (Depreciation)
Period End of Period Beginning of Period Change
------------ ------------------ ---------------------- ----------------
<S> <C> <C> <C> <C>
Russell Non-US 2000 $ 124,789 $ 259,569 $ (134,780)
1999 259,569 1,844 257,725
Russell Core Bond 2000 (62,893) (142,357) 79,464
1999 (142,357) 3,543 (145,900)
Russell Real Estate Securities 2000 13,713 (393) 14,106
1999 (393) - (393)
AIM V.I. Value 2000 285,817 312,963 (27,146)
1999 312,963 1,376 311,587
AIM V.I. Capital Appreciation 2000 337,721 211,517 126,204
1999 211,517 5,386 206,131
AIM V.I. International Equity 2000 52,835 101,232 (48,397)
1999 101,232 (6,224) 107,456
Alliance Premier Growth 2000 511,915 582,513 (70,598)
1999 582,513 118,514 463,999
Alliance Real Estate Investment 2000 (2,841) (30,367) 27,526
1999 (30,367) (17,191) (13,176)
Liberty Newport Tiger Fund, Variable 2000 17,995 18,690 (695)
1999 18,690 2,743 15,947
Goldman Sachs Growth and Income 2000 (536) (4,321) 3,785
1999 (4,321) (11,213) 6,892
Goldman Sachs International Equity 2000 53,206 62,028 (8,822)
1999 62,028 2,720 59,308
Goldman Sachs Global Income 2000 (711) (1,776) 1,065
1999 (1,776) (187) (1,589)
Kemper Dreman High Return Equity 2000 (14) (8) (6)
1999 (8) 5 (13)
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(7) UNREALIZED APPRECIATION, CONTINUED:
Sub-account Unrealized Appreciation (Depreciation)
-----------------------------------------------------------------
Appreciation Appreciation
Year or (Depreciation) (Depreciation)
Period End of Period Beginning of Period Change
------------ ------------------ ---------------------- -----------------
<S> <C> <C> <C> <C>
Kemper Small Cap Growth 2000 $ 33,329 $ 37,072 $ (3,743)
1999 37,072 3,989 33,083
Kemper Small Cap Value 2000 (8,649) (3,443) (5,206)
1999 (3,443) (13,980) 10,537
Kemper Government Securities 2000 (6,738) 76 (6,814)
1999 76 206 (130)
MFS Bond 2000 (2) 1 (3)
1999 1 5 (4)
MFS Research 2000 170,560 175,774 (5,214)
1999 175,774 24,572 151,202
MFS Growth with Income 2000 119,312 126,692 (7,380)
1999 126,692 54,989 71,703
MFS Emerging Growth 2000 531,244 684,030 (152,786)
1999 684,030 87,574 596,456
MFS Emerging Markets Equity 2000 3,415 5,475 (2,060)
1999 5,475 (7,685) 13,160
MFS High Income 2000 (21,276) (2,211) (19,065)
1999 (2,211) (2,625) 414
MFS Global Governments 2000 (557) (242) (315)
1999 (242) 189 (431)
Oppenheimer Capital Appreciation 2000 69,542 62,672 6,870
1999 62,672 9,357 53,315
Oppenheimer Main Street Growth & Income 2000 23,933 49,552 (25,619)
1999 49,552 (771) 50,323
Oppenheimer High Income 2000 (31,587) (3,509) (28,078)
1999 (3,509) (2,071) (1,438)
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(7) UNREALIZED APPRECIATION, CONTINUED:
Sub-account Unrealized Appreciation (Depreciation)
-----------------------------------------------------------------
Appreciation Appreciation
Year or (Depreciation) (Depreciation)
Period End of Period Beginning of Period Change
---------- ------------------ ------------------------------------------
<S> <C> <C> <C> <C>
Oppenheimer Bond 2000 $ (57,983) $ (15,662) $ (42,321)
1999 (15,662) 12,503 (28,165)
Oppenheimer Strategic Bond 2000 (5,112) 136 (5,248)
1999 136 (129) 265
Putnam VT Growth and Income 2000 (245,529) (49,990) (195,539)
1999 (49,990) 44,649 (94,639)
Putnam VT New Value 2000 (1,123) (231) (892)
1999 (231) 860 (1,091)
Putnam VT Vista 2000 134,129 79,103 55,026
1999 79,103 7,815 71,288
Putnam VT International Growth 2000 347,984 513,520 (165,536)
1999 513,520 (2,297) 515,817
Putnam VT International New Opportunities 2000 29,117 91,867 (62,750)
1999 91,867 299 91,568
Templeton Global Income Securities 2000 (360) (9) (351)
1999 (9) - (9)
Franklin Small Cap 2000 2,899 33,706 (30,807)
1999 33,706 - 33,706
Templeton Growth Securities 2000 (15,990) 14,590 (30,580)
1999 14,590 - 14,590
Templeton International Securities 2000 (10,536) 67,478 (78,014)
1999 67,478 4,711 62,767
Templeton Developing Markets Securities 2000 4,249 37,123 (32,874)
1999 37,123 3,570 33,553
Templeton Mutual Shares Securities 2000 (661) 1,833 (2,494)
1999 1,833 263 1,570
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(7) UNREALIZED APPRECIATION, CONTINUED:
Sub-account Unrealized Appreciation (Depreciation)
-----------------------------------------------------------------
Appreciation Appreciation
Year or (Depreciation) (Depreciation)
Period End of Period Beginning of Period Change
---------- ------------------ ----------------------- ----------------
<S> <C> <C> <C> <C>
Franklin Large Cap Growth Securities 2000 $ 31,496 $ 24,948 $ 6,548
1999 24,948 - 24,948
Fidelity VIP Growth 2000 9,244 15,091 (5,847)
1999 15,091 1,118 13,973
Fidelity VIP II Contrafund 2000 (392) 1,306 (1,698)
1999 1,306 99 1,207
Fidelity VIP III Growth Opportunities 2000 (1,228) 437 (1,665)
1999 437 19 418
Fidelity VIP III Growth & Income 2000 (2,242) 7,812 (10,054)
1999 7,812 3,784 4,028
Fidelity VIP Equity-Income 2000 (5,353) (988) (4,365)
1999 (988) 635 (1,623)
American Century VP Income & Growth 2000 1,530 407 1,123
1999 407 - 407
American Century VP International 2000 (255) 25 (280)
1999 25 - 25
American Century VP Value 2000 (3,981) 134 (4,115)
1999 134 - 134
Dreyfus Stock Index 2000 6,344 3 6,341
1999 3 - 3
Dreyfus VIF Disciplined Stock 2000 2,626 2 2,624
1999 2 - 2
Dreyfus VIF Capital Appreciation 2000 7,579 - 7,579
1999 - - -
INVESCO VIF Dynamics 2000 18,515 1,133 17,382
1999 1,133 - 1,133
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(7) UNREALIZED APPRECIATION, CONTINUED:
Sub-account 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 2000 $ 115 $ (14) $ 129
1999 (14) - (14)
PIMCO High Yield Bond 2000 (6) - (6)
1999 - - -
PIMCO Low Duration Bond 2000 (1) (1) -
1999 (1) - (1)
PIMCO StocksPLUS Growth & Income 2000 (8) (4) (4)
1999 (4) - (4)
PIMCO Total Return Bond 2000 294 (33) 327
1999 (33) - (33)
Scudder International 2000 (6,255) 516 (6,771)
1999 516 - 516
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(8) UNITS OUTSTANDING
6/30/00 12/31/99 12/31/98 12/31/97
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Sub-account accumulation units:
Cova Lord Abbett Growth and Income 1,259,585 1,241,056 - -
Cova Bond Debenture 852,246 859,300 681,676 347,400
Cova Developing Growth 173,414 130,053 70,926 6,039
Cova Large Cap Research 168,976 142,370 49,894 -
Cova Mid-Cap Value 146,325 132,159 85,457 8,510
Cova Quality Bond 567,481 629,401 501,045 234,643
Cova Small Cap Stock 672,460 632,695 663,925 487,580
Cova Large Cap Stock 1,589,429 1,531,957 1,132,390 686,677
Cova Select Equity 1,241,253 1,237,436 1,052,797 700,550
Cova International Equity 867,246 838,996 779,375 554,105
GACC Money Market 185,974 157,984 129,569 14,091
Russell Multi-Style Equity 305,939 213,789 48,388 -
Russell Aggressive Equity 68,153 44,230 8,651 -
Russell Non-US 138,959 98,852 18,259 -
Russell Core Bond 250,199 220,655 61,498 -
Russell Real Estate Securities 17,600 5,917 - -
AIM V.I. Value 267,530 158,759 2,865 -
AIM V.I. Capital Appreciation 144,086 63,264 5,570 -
AIM V.I. International Equity 33,438 19,322 15,257 -
Alliance Premier Growth 183,290 130,836 62,869 -
Alliance Real Estate Investment 43,763 29,380 22,077 -
Liberty Newport Tiger Fund, Variable 4,340 2,639 2,397 -
Goldman Sachs Growth and Income 29,973 27,398 13,107 -
Goldman Sachs International Equity 27,159 27,069 15,859 -
Goldman Sachs Global Income 4,097 3,165 3,002 -
Kemper Dreman High Return Equity 10 10 10 -
Kemper Small Cap Growth 10,308 8,195 3,829 -
Kemper Small Cap Value 31,724 27,733 16,641 -
Kemper Government Securities 22,626 20,807 2,519 -
MFS Bond 10 10 10 -
MFS Research 74,223 62,149 25,994 -
MFS Growth with Income 132,313 112,973 64,791 -
MFS Emerging Growth 78,755 62,562 47,710 -
MFS Emerging Markets Equity 3,497 3,897 4,234 -
MFS High Income 26,061 21,540 13,080 -
MFS Global Governments 1,299 1,050 385 -
Oppenheimer Capital Appreciation 28,308 15,979 5,037 -
Oppenheimer Main Street Growth & Income 48,816 34,600 14,882 -
Oppenheimer High Income 26,405 25,621 10,533 -
Oppenheimer Bond 77,298 71,773 46,377 -
Oppenheimer Strategic Bond 8,094 7,503 2,684 -
Putnam VT Growth and Income 140,549 131,527 80,114 -
Putnam VT New Value 3,280 2,342 2,202 -
Putnam VT Vista 26,239 17,707 6,799 -
Putnam VT International Growth 107,300 81,982 56,566 -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(8) UNITS OUTSTANDING, CONTINUED:
6/30/00 12/31/99 12/31/98 12/31/97
----------------- ----------------- ----------------- -----------------
Sub-account accumulation units, continued:
<S> <C> <C> <C> <C>
Putnam VT International New Opportunities 16,456 8,721 4,783 -
Templeton Global Income Securities 1,431 795 - -
Franklin Small Cap 45,972 7,226 - -
Templeton Growth Securities 16,407 8,686 - -
Templeton International Securities 65,773 50,837 6,626 -
Templeton Developing Markets Securities 28,284 13,256 7,033 -
Templeton Mutual Shares Securities 26,134 9,448 944 -
Franklin Large Cap Growth Securities 26,203 10,673 - -
Fidelity VIP Growth 6,939 4,777 505 -
Fidelity VIP II Contrafund 1,513 623 78 -
Fidelity VIP III Growth Opportunities 1,743 521 114 -
Fidelity VIP III Growth & Income 8,108 6,964 2,082 -
Fidelity VIP Equity-Income 3,836 3,423 772 -
American Century VP Income & Growth 23,649 1,017 - -
American Century VP International 1,110 10 - -
American Century VP Value 14,030 546 - -
Dreyfus Stock Index 11,713 10 - -
Dreyfus VIF Disciplined Stock 3,866 10 - -
Dreyfus VIF Capital Appreciation 21,058 10 - -
INVESCO VIF Dynamics 18,450 1,951 - -
INVESCO VIF High Yield 2,812 996 - -
PIMCO High Yield Bond 10 10 - -
PIMCO Low Duration Bond 10 10 - -
PIMCO StocksPLUS Growth & Income 10 10 - -
PIMCO Total Return Bond 3,028 1,525 - -
Scudder International 13,114 624 - -
Cova Lord Abbett Growth and Income Series A 6,632 - - -
Cova Bond Debenture Series A 4,888 - - -
Cova Developing Growth Series A 10 - - -
Cova Large Cap Research Series A 10 - - -
Cova Mid-Cap Value Series A 1,108 - - -
Cova Quality Bond Series A 10 - - -
Cova Small Cap Stock Series A 5,007 - - -
Cova Large Cap Stock Series A 7,299 - - -
Cova Select Equity Series A 10 - - -
Cova International Equity Series A 6,547 - - -
GACC Money Market Series A 10 - - -
AIM V.I. Value Series A 14,663 - - -
AIM V.I. Capital Appreciation Series A 9,281 - - -
AIM V.I. International Equity Series A 10 - - -
Templeton Global Income Securities Series A 10 - - -
Franklin Small Cap Series A 10 - - -
Templeton Growth Securities Series A 3,992 - - -
Templeton International Securities Series A 10 - - -
Franklin Large Cap Growth Securities Series A 5,053 - - -
</TABLE>
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT FIVE
Notes to Financial Statements
June 30, 2000
Unaudited
<TABLE>
<CAPTION>
(8) UNITS OUTSTANDING, CONTINUED:
6/30/00 12/31/99 12/31/98 12/31/97
----------------- ----------------- ----------------- -----------------
Sub-account annuity units:
<S> <C> <C> <C> <C>
Cova Lord Abbett Growth and Income 4,006 4,367 - -
Cova Bond Debenture 548 564 - -
Cova Mid-Cap Value 167 - - -
Cova Large Cap Stock 560 488 - -
Cova Select Equity 513 527 - -
Cova International Equity 128 - - -
AIM V.I. Value 122 - - -
</TABLE>
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. Statement of Assets and Liabilities as of June 30, 2000.
2. Statement of Income for the period ended June 30, 2000 and
for the year ended December 31, 1999.
3. Statement of Changes in Net Assets for the period ended June 30, 2000
and for the year ended December 31, 1999.
4. Notes to Financial Statements - June 30, 2000.
5. Independent Auditors' Report.
6. Statement of Assets and Liabilities as of December 31, 1999.
7. Statement of Operations for the year ended December 31, 1999.
8. Statements of Changes in Net Assets for the years ended December 31,
1999 and 1998.
<PAGE>
9. 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. (i) Form of Principal Underwriter's Agreement +
(ii) Form of Selling Agreement +
4. (i) Individual Flexible Purchase Payment Deferred Variable and Fixed
Annuity Contract**
(ii) Death Benefit Rider**
(iii) Rider - Nursing Home Waiver**
(iv) Death Benefit Endorsements***
(v) 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) Form of Fund Participation Agreement among MFS Variable Insurance
Trust, Cova Financial Insurance Company and Massachusetts
Financial Services Company +
(ii) Form of Fund Participation Agreement among Cova Financial Life
Insurance Company, Cova Life Sales Company, Alliance Capital
Management LP and Alliance Fund Distributors, Inc. +
(iii) Form of Fund Participation Agreement among Oppenheimer Variable
<PAGE>
Account Funds, OppenheimerFunds, Inc. and Cova Financial Life
Insurance Company++
(iv) Form of Fund Participation Agreement among Putnam Variable Trust,
Putnam Mutual Funds Corp. and Cova Financial Life Insurance
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 Fund Participation Agreement among Investors Fund Series,
Zurich Kemper Investments, Inc., Zurich Kemper Distributors, Inc.
and Cova Financial Life Insurance Company++
(vii) Form of Participation Agreement by and between Goldman Sachs
Variable Insurance Trust, Goldman, Sachs & Co. and Cova Financial
Life Insurance Company++
(viii) Form of Participation Agreement among Russell Insurance Funds,
Russell Fund Distributors, Inc. and Cova Financial Life
Insurance Company++
(ix) Form of Participation Agreement among Liberty Variable Investment
Trust, Liberty Financial Investments, Inc. and Cova Financial
Life Insurance Company++
(x) Form of Participation Agreement among Templeton Variable Products
Series Fund, Franklin Templeton Distributors, Inc. and Cova
Financial Life Insurance Company***
(xi) Form of Fund Participation Agreement - American Century Variable
Portfolios, Inc.++++
(xii) Form of Fund Participation Agreement - Dreyfus++++
(xiii)Form of Fund Participation Agreement - INVESCO Variable Investment
Funds, Inc.++++
(xiv) Form of Fund Participation Agreement - PIMCO Variable Insurance
Trust++++
(xv) Form of Fund Participation Agreement - Scudder Variable Life
Investment Fund++++
9. Opinion and Consent of Counsel++++
10. Consent of Independent Auditors
11. Not Applicable
<PAGE>
12. Not Applicable
13. Calculation of Performance Information
14. Company Organizational Chart++++
27. Not Applicable
** incorporated by reference to Registrant's Form N-4 ,(File Nos.
333-34817 and 811-07060) electronically filed on September 2,
1997.
*** incorporated by reference to Registrant's Post-Effective
Amendment No. 4 to Form N-4 (File Nos. 333-34817 and 811-07060)
electronically filed on April 30, 1999.
+ Incorporated by reference to Registrant's Pre-Effective Amendment
No. 1 to Form N-4 electronically filed on November 19, 1997.
++ Incorporated by reference to Post-Effective Amendment No. 1 to
Form N-4 electronically filed on February 11, 1998.
+++ Incorporated by reference to Cova Variable Life Account Five,
Initial Registration Statement on Form S-6 (File No. 333-37559)
electronically filed on October 9, 1997.
++++ Incorporated by reference to Post-Effective Amendment No. 7 (File
Nos. 333-34817 and 811-07060) electronically filed on May 1,
2000.
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:
<TABLE>
<CAPTION>
<S> <C>
Name and Principal Positions and Offices
Business Address with Depositor
- -------------------------------- --------------------------------
James A. Shepherdson III Chairman of the Board and Director
MetLife
Security First Group
610 Newport Center Drive
Suite 1350
Newport Beach, CA 92660
Mark E. Reynolds President and Director
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
<PAGE>
William P. Boscow Vice President
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
Gregory P. Brakovich Director
MetLife
Security First Group
610 Newport Center Drive
Suite 1350
Newport Beach, CA 92660
Constance A. Doern Vice President
4700 Westown 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
Lisa O. Kirchner Vice President
4700 Westown Parkway
West Des Moines, IA 50266
James W. Koeger Assistant Treasurer
700 Market Street
St. Louis, MO 63101
Richard A. Liddy Director
700 Market Street
St. Louis, MO 63101
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
John W. Schaus Vice President
<PAGE>
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181-4644
Bernard J. Spaulding Senior Vice President,
One Tower Lane, Suite 3000 General Counsel, Secretary
Oakbrook Terrace, IL 60181-4644 and Director
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
One Tower Lane, Suite 300 Controller and Director
Oakbrook Terrace, IL 60181-4644
</TABLE>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR
OR REGISTRANT.
A company organizational chart was filed as Exhibit 14 in Post-Effective
Amendment No. 7 on May 1, 2000 and is incorporated herein by reference.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of August 22, 2000 there were 119 Qualified Contract Owners and 417
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
<PAGE>
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
First Cova Variable Annuity Account One
Cova Variable Life Account One
Cova Variable Life Account Five
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.
<TABLE>
<CAPTION>
<S> <C>
(b) Name and Principal Positions and Offices
Business Address with Underwriter
- ----------------------- ---------------------------
Patricia E. Gubbe President, Chief Compliance
Officer and Director
Shari Ruecker Vice President
Mark E. Reynolds Treasurer and Director
James W. Koeger Assistant Treasurer
John J. Myers Vice President
Bernard J. Spaulding Secretary
Peter L. Witkewiz Vice President, Controller
and Director
</TABLE>
<PAGE>
(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
<PAGE>
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 22nd day of August, 2000.
<TABLE>
<CAPTION>
<S> <C>
COVA VARIABLE ANNUITY ACCOUNT FIVE
(Registrant)
By: COVA FINANCIAL LIFE INSURANCE COMPANY
By: /s/MARK E. REYNOLDS
-----------------------------------------
President
COVA FINANCIAL LIFE INSURANCE COMPANY
Depositor
By: /s/MARK E. REYNOLDS
-----------------------------------------
President
</TABLE>
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.
<TABLE>
<PAGE>
<CAPTION>
<S> <C> <C>
/s/JAMES A. SHEPHERDSON III 8/21/00
------------------------- Chairman of the Board ------
James A. Shepherdson III and Director Date
/s/MARK E. REYNOLDS President and Director 8/22/00
----------------------- ------
Mark E. Reynolds Date
/s/GREGORY P. BRAKOVICH 8/18/00
------------------------- Director ------
Gregory P. Brakovich Date
/s/J. ROBERT HOPSON Director 8/17/00
------------------------ ------
J. Robert Hopson Date
/s/E. THOMAS HUGHES, JR. Treasurer and Director 8/21/00
------------------------ ------
E. Thomas Hughes, Jr. Date
----------------------- Director ------
Richard A. Liddy Date
/s/MATTHEW P. MCCAULEY Director 8/21/00
------------------------ ------
Matthew P. McCauley Date
------------------------ Director ------
Bernard J. Spaulding Date
/s/J. TERRI TANAKA 8/17/00
------------------------ Director ------
J. Terri Tanaka Date
<PAGE>
/s/PETER L. WITKEWIZ 8/17/00
------------------------ Controller and Director ------
Peter L. Witkewiz Date
</TABLE>
INDEX TO EXHIBITS
TO
POST-EFFECTIVE AMENDMENT NO. 8 (FILE NO. 333-34817)
TO
FORM N-4
COVA VARIABLE ANNUITY ACCOUNT FIVE
EXHIBIT NO. PAGE NO.
EX-99.B10 Consent of Independent Auditors
EX-99.B13 Calculation of Performance Information
