April 26, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: First Transamerica Life Insurance Company Separate Account VA-2LNY,
Post-Effective Amendment No.5 To Form N-4, (File Nos. 33-55152, 811-7368)
Commissioners:
Transmitted herewith for filing via EDGAR, please find Post-Effective Amendment
No. 5 to the Registration Statement on Form N-4 for Separate Account VA-2LNY of
First Transamerica Life Insurance Company.
This Amendment is being filed pursuant to Paragraph (b) of Rule 485 under the
Securities Act of 1933.
Please call Regina M. Fink, Esq. of Transamerica's Law Department at (213)
742-3131 with any questions.
Very truly yours,
Susan Vivino
Paralegal
cc: F. Bellamy, Esq.
R. Fink, Esq.
Enclosures
<PAGE>
As filed with the Securities and Exchange Commission on __________, 1996
Registration No. 33-55152
811-7368
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. 5 |X|
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 6 |X|
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SEPARATE ACCOUNT VA-2LNY
(Exact Name of Registrant)
FIRST TRANSAMERICA LIFE INSURANCE COMPANY
(Name of Depositor)
575 Fifth Avenue, New York, NY 10017
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (212) 682-8740
Name and Address of Agent for Service: Copy to:
James W. Dederer, Esquire Frederick R. Bellamy, Esquire
Chairman of the Board, General Counsel and Sutherland, Asbill & Brennan
Corporate Secretary 1275 Pennsylvania Avenue, N.W.
First Transamerica Life Insurance Co. Washington, D.C. 20004-2404
575 Fifth Avenue
New York, NY 10017
Approximate date of proposed sale to the
public: As soon as practicable after effectiveness of the
Registration Statement.
The Registrant has previously filed a declaration of indefinite registration of
its shares pursuant to Rule 24f- 2 under the Investment Company Act of 1940. The
Rule 24f-2 Notice for the year ended December 31, 1995 was filed on February 28,
1996.
It is proposed that this filing will become effective: |_|
immediately upon filing pursuant to paragraph (b) |X| on May
1, 1996 pursuant to paragraph (b) |_| 60 days after filing
pursuant to paragraph (a)(i) |_| on ________________ pursuant
to paragraph (a)(i) |_| 75 days after filing pursuant to
paragraph (a)(ii) |_| on ________________ pursuant to
paragraph (a)(ii) of Rule 485
If appropropriate, check the following box:
|_| this Post-Effective Amendment designates
a new effective date for a previously
filed Post-Effective Amendment.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495
Showing Location in Part A (Prospectus),
Part B (Statement of Additional Information) and Part C
of Registration Statement Information Required by Form N-4
PART A
Item of Form N-4 Prospectus Caption
1. Cover Page............................................... Cover Page
2. Definitions.............................................. Definitions
3. Synopsis................................................. Summary
4. Condensed Financial Information.......................... Not Applicable
5. General
(a) Depositor.....................Transamerica Occidental Life Insurance
Company;
Additional Information about
Transamerica
Occidental Life Insurance Company;
(b) Registrant....................The Variable Account
(c) Portfolio Company.............The Funds
(d) Fund Prospectus...............The Funds
(e) Voting Rights.................Voting Rights
6. Deductions and Expenses.............
(a) General.......................Charges and Deductions
(b) Sales Load %..................Contingent Deferred Sales Load
(c) Special Purchase Plan.........Not Applicable
(d) Commissions...................Distribution of the Contracts
(e) Fund Expenses.................The Funds
(f) Operating Expenses............Variable Account Fee Table
7. Contracts
(a) Persons with Rights...........The Contract; Cash Withdrawals;
Death Benefit; Voting Rights
(b) (i) Allocation of Premium
Payments......... Allocation of Purchase Payments
(ii) Transfers........ Transfers
(iii) Exchanges........ Federal Tax Matters
(c) Changes................ Addition, Deletion, or Substitution
(d) Inquiries.............. Summary; Available Information
8. Annuity Period............... Annuity Payments
9. Death Benefit................ Death Benefit
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10. Purchase and Contract Balances...........................
(a) Purchases..............Contract Application and Purchase Payments
(b) Valuation..............Participant Account Value
(c) Daily Calculation......Variable Accumulated Value
(d) Underwriter............Distribution of the Contracts
11. Redemptions
(a) By Contract Owners.....Withdrawals; Systematic Withdrawal Option;
Automatic Payout Option
By Annuitant...........Not Applicable
(b) Texas ORP..............Not Applicable
(c) Check Delay............Cash Withdrawals
(d) Lapse..................Not Applicable
(e) Free Look..............Definitions; Summary; Contract Application and
.......................Purchase Payments
12. Taxes........................Federal Tax Matters
13. Legal Proceedings............Legal Proceedings
14. Table of Contents for the
Statement of
Additional Information.......Statement of Additional Information Table of
Contents
PART B
Item of Form N-4 Statement of Additional
Information Caption
15. Cover Page.............Cover Page
16. Table of Contents......Table of Contents
17. General Information
and History............(Prospectus) Transamerica Occidental Life
Insurance Company; (Prospectus) Additional
Information About Transamerica Occidental Life
Insurance Company
18. Services...............
(a) Fees and Expenses
of Registrant....(Prospectus) Variable Account Fee Table;
(Prospectus) The Funds
(b) Management Contracts...... (Prospectus) Third Party Administration
(c) Custodian................Records and Reports; Safekeeping of Account
Assets
Independent Auditors ................. (Prospectus) Accountants
(d) Assets of Registrant.................... Not Applicable
(e) Affiliated Person....................... Not Applicable
(f) Principal Underwriter................... Not Applicable
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19. Purchase of Securities
Being Offered.................(Prospectus) The Contract
Offering Sales Load...........(Prospectus) Contingent Deferred Sales Load
20. Underwriters..................(Prospectus) Distribution of the Contracts
21. Calculation of Performance
Data..........................(Prospectus) Performance Data; Calculation of
Yields and Total Returns
22. Annuity Payments..............(Prospectus) Annuity Payments; Annuity Period
23. Financial Statements..........Financial Statements
PART C -- OTHER INFORMATION
Item of Form N-4 Part C Caption
24. Financial Statements
and Exhibits................... Financial Statements and Exhibits
(a) Financial Statements..... Financial Statements
(b) Exhibits................. Exhibits
25. Directors and Officers of
the Depositor..................... Directors and Officers of the Depositor
26. Persons Controlled By or Under Common Control
with the Depositor or Registrant . Persons Controlled By or Under Common
Control with the Depositor or Registrant
27. Number of Contract Owners..... Number of Contract Owners
28. Indemnification............... Indemnification
29. Principal Underwriters........ Principal Underwriters
30. Location of Accounts
and Records................... Location of Accounts and Records
31. Management Services........... Management Services
32. Undertakings.................. Undertakings
Signature Page................ Signature Page
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LOGO
PROSPECTUS FOR
DREYFUS/TRANSAMERICA TRIPLE ADVANTAGE
A Variable Annuity Issued by
First Transamerica
Life Insurance Company
Including Fund Prospectuses for
DREYFUS VARIABLE INVESTMENT FUND
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
DREYFUS STOCK INDEX FUND
May 1, 1996
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DREYFUS/TRANSAMERICA TRIPLE ADVANTAGE
VARIABLE ANNUITY
Issued by
FIRST TRANSAMERICA LIFE INSURANCE
COMPANY 575 Fifth Avenue, New York, New York,
10017, (212) 682-8740.
This Prospectus describes the Dreyfus/Transamerica Triple Advantage
Variable Annuity, a variable annuity policy ("Policy") issued by First
Transamerica Life Insurance Company ("Transamerica"). The Policy is designed to
aid individuals in long-term financial planning and for retirement or other
long-term purposes.
The Policy Value will accumulate on a variable basis in Transamerica
Separate Account VA-2LNY (the "Variable Account").
The Owner bears the entire investment risk under this Policy.
There is no guaranteed or minimum
withdrawal value; the Cash Surrender Value or Annuity Purchase Amount could be
less than the Premiums invested in the Policy.
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This Prospectus sets forth the basic information that a prospective
investor should know before investing. A "Statement of Additional Information"
containing more detailed information about the Policy is available free by
writing First Transamerica Life Insurance Company, Annuity Service Center, at
P.O. Box 30757, Los Angeles, California 90030-0757 until June 10, 1996, and at
P.O. Box 31728, Charlotte, North Carolina 28231-1728 after June 10, 1996, or by
calling (800) 258-4261. The Statement of Additional Information, which has the
same date as this Prospectus, as it may be supplemented from time to time, has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. The table of contents of the Statement of Additional
Information is included at the end of this Prospectus. THESE SECURITIES HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS
THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Please read this prospectus carefully and retain it for future reference.
The date of this Prospectus is May 1, 1996
This Prospectus must be accompanied by current Prospectuses for Dreyfus Variable
Investment Fund, Dreyfus Stock Index Fund, and The Dreyfus Socially Responsible
Growth Fund, Inc.
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THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESMAN, OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
- -----------------------------------------------------------------
An investment in the Policy is not a deposit or obligation of, or guaranteed or
endorsed by, any bank, nor is the Contract federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other government
agency. Investing in the Policy involves certain investment risks, including
possible loss of principal.
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The Policy provides for monthly Annuity Payments to be made by
Transamerica on a fixed or a variable or combination of a fixed and variable
basis for the life of the Annuitant or for some other period, beginning on the
first day of the month following the Annuity Date selected by the Owner. Prior
to the Annuity Date, the Owner can transfer amounts among the Sub-Accounts of
the Variable Account. Some prohibitions and restrictions apply. After the
Annuity Date, some transfers are permitted among the Sub-Accounts if the Owner
selects a Variable Annuity Payment Option. Before the Annuity Date, the Owner
can also elect to withdraw all or a portion of the Cash Surrender Value in
exchange for a cash payment from Transamerica; however, withdrawals may be
subject to a Contingent Deferred Sales Load, premium taxes, federal tax and/or a
tax penalty and, upon surrender, the annual Policy Fee will also be deducted.
The Variable Account is divided into Sub-Accounts. Each Sub-Account is
invested in shares of a specific Portfolio. Thirteen Portfolios are available
for investment under the Policies: Money Market, Managed Assets, Zero Coupon
2000, Quality Bond, Small Cap, Capital Appreciation, Growth and Income,
International Equity, International Value, Disciplined Stock, and Small Company
Stock, Portfolios of Dreyfus Variable Investment Fund, Dreyfus Stock Index Fund,
and The Dreyfus Socially Responsible Growth Fund, Inc. Certain fees and expenses
are charged against the assets of each Portfolio. The Policy Value and the
amount of any Variable Annuity payments will vary to reflect the investment
performance of the Sub-Account(s) selected by the Owner and the deduction of the
Policy charges described under "Charges and Deductions" on page 30. For more
information about the Funds, see "The Funds" on page 19 and the accompanying
Funds' prospectuses.
The Initial Premium for the Policy must be at least $5,000 and each
additional Premium must be at least $500, unless an automatic payment plan is
selected. The prior approval of Transamerica is required before it will accept
total Premiums for any Policy in excess of $1,000,000.
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<PAGE>
TABLE OF CONTENTS
Page
DEFINITIONS.........................................................5
SUMMARY............................................................7
CONDENSED FINANCIAL INFORMATION...................................15
PERFORMANCE DATA..................................................16
FIRST TRANSAMERICA LIFE INSURANCE COMPANY AND THE VARIABLE
ACCOUNT.........................................................18
First Transamerica Life Insurance Company...............18
Published Ratings.......................................18
The Variable Account....................................18
THE FUNDS........................................................18
THE POLICY.......................................................22
Qualified Policies......................................22
POLICY APPLICATION AND PREMIUMS....................................23
Premiums..................................................23
Allocation of Premiums..................................23
POLICY VALUE.......................................................24
TRANSFERS........................................................24
Before the Annuity Date.................................24
Possible Restrictions.....................................25
Dollar Cost Averaging...................................25
After the Annuity Date..................................25
CASH WITHDRAWALS...................................................26
Withdrawals...............................................26
Systematic Withdrawal Option..............................27
Automatic Payout Option.................................27
DEATH BENEFIT......................................................28
Payment of Death Benefit................................28
Designation of Beneficiaries............................28
Death of Annuitant Prior to the Annuity Date..............29
Death of Owner Prior to the Annuity Date..................29
Death of Annuitant or Owner After the Annuity Date........29
CHARGES AND DEDUCTIONS...........................................29
Contingent Deferred Sales Load..........................29
Administrative Charges..................................30
Mortality and Expense Risk Charge.......................30
Premium Taxes...........................................31
Transfer Fee............................................31
Systematic Withdrawal Option............................31
Taxes...................................................31
Portfolio Expenses......................................31
ANNUITY PAYMENTS.................................................31
Annuity Date............................................31
Annuity Payment.........................................31
Election of Annuity Forms and Payment Options...........32
Annuity Payment Options.................................32
Fixed Annuity Payment Option............................32
Variable Annuity Payment Option.........................32
Annuity Forms...........................................32
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Alternate Fixed Annuity Rates............................33
FEDERAL TAX MATTERS...............................................33
DISTRIBUTION OF THE POLICY........................................35
LEGAL PROCEEDINGS.................................................36
LEGAL MATTERS.....................................................36
ACCOUNTANTS.......................................................36
VOTING RIGHTS.....................................................36
AVAILABLE INFORMATION.............................................36
STATEMENT OF ADDITIONAL INFORMATION - TABLE OF CONTENTS...........37
APPENDIX A.........................................................A-1
Example of Variable Accumulation Unit Value Calculations..A-1
Example of Variable Annuity Unit Value Calculations.......A-1
Example of Variable Annuity Payment Calculations..........A-1
.........................................................
APPENDIX B.........................................................B-1
Description of previously issued Policies.................B-1
This Policy is available only in New
York.
This prospectus describes the terms of Policies issued beginning March 1, 1996.
Such Policies include provisions favorable to Policy Owners not available under
Policies issued prior to March 1, 1996. The material terms of the old Policies
that differ from the Policies issued after March 1, 1996, are described in
Appendix B. The old policies will be enhanced by Policy endorsement containing
the applicable March 1, 1996, terms after the New York Insurance Department
approves the policy forms and when Transamerica can administratively endorse
them.
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4
<PAGE>
DEFINITIONS
Active Sub-Account: A Sub-Account of the Variable Account in which the Policy
has current value. Annuitant: The person named on the application whose life is
used to determine the amount of monthly Annuity Payments on the Annuity Date.
Annuitant's Beneficiary: The person or persons named by the Owner who may
receive the death benefits under the Policy if: (a) there is no named Contingent
Annuitant and the Annuitant dies before the Annuity Date; or (b) the Annuitant
dies after the Annuity Date under an Annuity Form containing a period certain
option. Annuity Date: The date on which the Annuity Purchase Amount will be
applied to provide monthly annuity payments under the Annuity Form and Payment
Option selected by the Owner. Monthly annuity payments will start the first day
of the month immediately following the Annuity Date. Unless the Annuity Date is
changed as allowed by the Policy, the Annuity Date will be as shown in the
Policy. The Annuity Date may be changed by the Owner upon 30 days advance
written notice to our Service Office. The revised Annuity Date may not be
earlier than the first day of the calendar month coinciding with or next
following the third Policy Anniversary. The Annuity Date may not be later than
the first day of the calendar month immediately preceding the month of the
Annuitant's 85th birthday. Annuity Payment: An amount paid by Transamerica at
regular intervals to the Annuitant and/or any other Payee. It may be on a
variable or fixed basis. Annuity Purchase Amount: The amount applied as a single
premium to provide an annuity under the Annuity Form and Payment Options
available under the Policy. The Annuity Purchase Amount is equal to the Policy
Value, less any applicable Contingent Deferred Sales Load, and less any
applicable premium taxes. In determining the Annuity Purchase Amount,
Transamerica will waive the Contingent Deferred Sales Load if the Annuity Form
involves life contingencies. Annuity Year: A one-year period starting on the
Annuity Date and, after that, each succeeding one-year period. Cash Surrender
Value: The amount payable to the Owner if the Policy is surrendered on or before
the Annuity Date. The Cash Surrender Value is equal to the Policy Value, less
the Policy Fee, less any applicable Contingent Deferred Sales Load, and less
applicable premium taxes. Code: The U.S. Internal Revenue Code of 1986, as
amended, and the rules and regulations issued thereunder. Contingent Annuitant:
The person who: (a) becomes the Annuitant if the Annuitant dies before the
Annuity Date; or (b) may receive benefits under the Policy if the Annuitant dies
after the Annuity Date under an Annuity Form containing a contingent annuity
option. A Contingent Annuitant may be designated only if the Owner is not also
the Annuitant. Fixed Annuity: An annuity with predetermined payment amounts.
Funds: Dreyfus Variable Investment Fund, Dreyfus Stock Index Fund and The
Dreyfus Socially Responsible Growth Fund, Inc. in which the Variable Account
currently invests. Inactive Sub-Account: A Sub-Account of the Variable Account
in which the Policy has a zero balance. Net Investment Factor: An index that
measures the investment performance of a Sub-Account from one Valuation Period
to the next. Net Premium: A Premium reduced by any applicable premium tax
(including retaliatory premium taxes). Non-Qualified Policy: A Policy other than
a Qualified Policy. Owner (Joint Owners): The person or persons who, while
living, control(s) all rights and benefits under the Policy. Joint Owners own
the Policy equally with the right of survivorship. Qualified Policies may not
have Joint Owners. Owner's Beneficiary: The person who becomes the Owner of the
Policy if the Owner dies. If the Policy has Joint Owners, the surviving Joint
Owner will be the Owner's Beneficiary. Payee: The person who receives the
Annuity Payments after the Annuity Date. The Payee will be the Annuitant, unless
otherwise changed by the Owner. Policy Anniversary: The same month and day as
the Policy Date in each calendar year after the calendar year in which the
Policy Date occurs. Policy Date: The effective date of the Policy as shown on
the Policy.
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5
<PAGE>
Policy Value: The total dollar amount of all Variable Accumulation Units in each
Sub-Account of the Variable Account held for the Policy prior to the Annuity
Date. The Policy Value is equal to: (a) Net Premiums; plus or minus (b) any
increase or decrease in the value of the Sub-Accounts due to investment results;
less (c) the daily Mortality and Expense Risk Charge; less (d) the daily
Administrative Expense Charge; less (e) the annual Policy Fees (taken at the end
of each Policy Year); less (f) any applicable Transfer Fees; and less (g) any
withdrawals from the Sub-Accounts. Policy Year: The 12-month period from the
Policy Date and ending with the day before the first Policy Anniversary and each
twelve month period thereafter. The first Policy Year for any particular Net
Premium is the Policy Year in which the Premium is received by the Service
Center. Portfolio: The Dreyfus Stock Index Fund, The Dreyfus Socially
Responsible Growth Fund, Inc., or any one of the Series of Dreyfus Variable
Investment Fund underlying a Sub-Account of the Variable Account. Proof of
Death: May be: (a) a copy of a certified death certificate; (b) a copy of a
certified decree of a court of competent jurisdiction as to the finding of
death; (c) a written statement by a medical doctor who attended the deceased; or
(d) any other proof satisfactory to Transamerica. Qualified Policy: A Policy
used in connection with an individual retirement annuity which receives
favorable federal income tax treatment under Section 408 of the Code. Receipt:
Receipt and acceptance by Transamerica at its Service Center. Series: Any of the
portfolios of Dreyfus Variable Investment Fund available for investment by a
Sub-Account under the Policy. Service Center: Transamerica's Annuity Service
Center, at P.O. Box 30757, Los Angeles, CA 90030-0757 until June 10, 1996, and
at P.O. Box 31728, Charlotte, North Carolina 28231-1728 after June 10, 1996, and
at telephone (800) 258-4261. Socially Responsible Fund: The Dreyfus Socially
Responsible Growth Fund, Inc., a diversified open-end management investment
company. Stock Index Fund: Dreyfus Stock Index Fund, a non-diversified open-end
management investment company. Sub-Account: A subdivision of the Variable
Account investing solely in shares of one of the Portfolios. Valuation Day: Any
day the New York Stock Exchange is open for trading and that is a regular
business day for our Service Center. Valuation occurs currently as of 4:00 p.m.
ET each Valuation Day. Valuation Period: The time interval between the closing
of the New York Stock Exchange on consecutive Valuation Days. Variable Account:
Separate Account VA-2LNY, a separate account established and maintained by
Transamerica for the investment of a portion of its assets pursuant to Section
4240 of the New York Insurance Law and Regulation 47 (part 50). The Variable
Account contains several Sub-Accounts to which all or portions of Net Premiums
and transfers may be allocated. Variable Accumulation Unit: A unit of measure
used to determine the Policy Value prior to the Annuity Date. The value of a
Variable Accumulation Unit varies with each Sub-Account. Variable Annuity: An
annuity with payments which vary as to dollar amount in relation to the
investment performance of specified Sub-Accounts of the Variable Account.
Variable Annuity Unit: A unit of measure used to determine the amount of the
second and each subsequent payment under a Variable Annuity Payment Option. The
value of a Variable Annuity Unit varies with each Sub-Account. Variable Fund:
Dreyfus Variable Investment Fund, an open-end management investment company.
Withdrawals: Refers to partial withdrawals, full surrenders, and systematic
withdrawals that are paid in cash to the Owner. Written Notice (or Written
Request): A notice or request in writing by the Owner to Transamerica's Service
Center. Such a request must contain original signatures; no carbons or
photocopies will be accepted. Transamerica reserves the right to accept a
facsimile copy.
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6
<PAGE>
SUMMARY
The Policy
The Flexible Premium Multi-Funded Deferred Annuity Policy (the
Policy) described in this Prospectus is designed to aid individuals in long-term
financial planning and for retirement or other long-term purposes. The Policy
may be used in connection with a retirement plan which qualifies as a retirement
program under Section 408 of the code, or with non-qualified plans. The Policy
is issued by First Transamerica Life Insurance Company ("Transamerica"), a
wholly-owned subsidiary of Transamerica Occidental Life Insurance Company,
having its principal office at 575 Fifth Avenue, Thirty-Sixth Floor, New York,
New York, 10017, telephone (212) 682-8740.
The Policy provides that the Policy Value, after certain adjustments,
will be applied to an Annuity Form and Payment Option on a selected future date
(the "Annuity Date").
The Policy Value will depend on the investment experience of each
Sub-Account of the Variable Account selected by the Owner. All payments and
values provided under the Policy when based on the investment experience of the
Variable Account are variable and are not guaranteed as to dollar amount.
Therefore, prior to the Annuity Date the Owner bears the entire investment risk
under the Policy.
There is no guaranteed or minimum Cash Surrender Value, so the proceeds
of a surrender could be less than the total Premiums.
The Initial Premium for each Policy must be at least $5,000 and each
additional Premium must be at least $500 (unless an automatic payment plan is
selected). In no event, however, may the total of all Premiums under a Policy
exceed $1,000,000 without the prior approval of Transamerica.
An additional Net Premium allocated to an Inactive Sub-Account may not
be less than $1,000. (See
"Policy Application and Premiums" page 23.)
The Variable Account
The Variable Account is a separate account (Separate Account VA-2LNY)
that is subdivided into Sub-Accounts. (See "The Variable Account" page 19.)
Assets of each Sub-Account are invested in a specified mutual fund Portfolio.
Each Sub-Account uses its assets to purchase, at their net asset value, shares
of a specific Series of Dreyfus Variable Investment Fund or shares in the
Dreyfus Stock Index Fund or in The Dreyfus Socially Responsible Growth Fund,
Inc. (together "The Funds"). Thirteen Portfolios are currently available for
investment in the Variable Account under the Policy: (1) Money Market, (2)
Managed Assets, (3) Zero Coupon 2000, (4) Quality Bond, (5) Small Cap, (6)
Capital Appreciation, (7) Growth and Income, (8) International Equity, (9)
International Value, (10) Disciplined Stock, and (11) Small Company Stock, each
of which is a Series of Dreyfus Variable Investment Fund; (12) the Dreyfus Stock
Index Fund; and (13) The Dreyfus Socially Responsible Growth Fund, Inc. Each
Portfolio has distinct investment objectives and policies which are described in
the accompanying prospectuses for the Funds. (See "The Funds" page 19.)
The Funds pay their investment advisers and administrators certain fees
charged against the assets of each Portfolio. The Policy Value, if any, of a
Policy and the amount of any Variable Annuity Payments will vary to reflect the
investment performance of all of the Sub-Accounts selected by the Owner and the
deduction of the charges described under "Charges and Deductions" on page 30.
For more information about the Funds, see "The Funds" page 19 and the
accompanying Funds' prospectuses. Transfers Before the Annuity Date
Prior to the Annuity Date, the Owner may transfer values among the
Sub-Accounts of the Variable Account. Total transfers are limited to eighteen
during a Policy Year. See "Transfers" on page 25 for additional limitations
regarding transfers.
Transamerica currently does not impose a Transfer Fee, but it reserves
the right to charge a Transfer Fee
for each transfer in excess of twelve made during the same Policy Year.
(See "Transfer Fee" page 32.) (For
Transfers after the Annuity Date, see "After the Annuity Date" page 26.)
Withdrawals
All or part of the Cash Surrender Value for a Policy may be withdrawn
by the Owner on or before the Annuity Date. No partial withdrawals will be
permitted while the Systematic Withdrawal Option is in effect. However, amounts
withdrawn may be subject to a Contingent Deferred Sales Load depending upon how
long the
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<PAGE>
withdrawn Premiums have been held under the Policy. TRANSAMERICA GUARANTEES
THAT THE
AGGREGATE CONTINGENT DEFERRED SALES LOAD WILL NEVER EXCEED 6% OF THE PREMIUMS.
(See "Contingent Deferred Sales Load" page 30.) Amounts withdrawn may be
subject to a premium tax or similar
tax, depending upon the state in which the Owner lives. Withdrawals may further
be subject to any federal, state
or local income tax, and subject to a penalty tax. (See "Federal Tax Matters"
page 36.) The annual Policy Fee
generally will be deducted on a full surrender of a Policy. (See "Withdrawals"
page 26 for additional limitations
regarding withdrawals.)
Contingent Deferred Sales Load
Transamerica does not deduct a sales charge from Premiums (although
premium taxes may be deducted). However, if any part of the Policy Value is
withdrawn, a Contingent Deferred Sales Load of up to 6% of Premiums withdrawn
may be assessed by Transamerica to cover certain expenses relating to the sale
of the Policies, including commissions to registered representatives and other
promotional expenses. After a Premium has been held by Transamerica for seven
Policy Years, the remaining Premium may be withdrawn without charge.
Additionally, a withdrawal amount free of Contingent Deferred Sales Load is only
available for the first withdrawal in each Policy Year and is equal to the
greater of (a) the accumulated earnings not previously withdrawn or (b) 10% of
Premiums that are between one and seven Policy Years old. Also, no Contingent
Deferred Sales Load is assessed on death or certain annuitizations or on
transfers. Other amounts withdrawn may be subject to a Contingent Deferred Sales
Load up to 6%. (See "Contingent Deferred Sales Load" page 30 and "Withdrawals"
page 26.) Other Charges and Deductions
Transamerica deducts a daily charge (the "Mortality and Expense Risk
Charge") equal to a percentage of the value of the net assets in the Variable
Account for the mortality and expense risks assumed. The effective annual rate
of this charge is 1.25% of the value of the net assets in the Variable Account
attributable to the Policies. (See "Mortality and Expense Risk Charge" page 31.)
TRANSAMERICA GUARANTEES THAT THIS MORTALITY AND EXPENSE RISK CHARGE WILL NOT BE
INCREASED.
Transamerica also deducts a daily charge (the "Administrative Expense
Charge") equal to a percentage of the value of the net assets in the Variable
Account corresponding to an effective annual rate of 0.15% to help cover some of
the costs of administering the Policy and the Variable Account. This charge may
change, but it is guaranteed not to exceed a maximum effective annual rate of
0.25%. (See "Administrative Charges" page 31).
There is also an administrative charge (the "Policy Fee") each year for
Policy maintenance. This fee is currently $30 (or 2% of the Policy Value, if
less) but will not be assessed for Policy Years in which the Policy Value
exceeds $50,000 on the last business day of the Policy Year or as of the date
the Policy is surrendered. The Policy Fee will be deducted at the end of the
Policy Year or when the Policy is surrendered, if earlier. The Policy Fee may
change but it is guaranteed not to exceed $60 (or 2% of the Policy Value, if
less) per Policy Year. After the Annuity Date this fee is referred to as the
Annuity Fee. The Annuity Fee is $30 and will not change.
(See "Administrative Charges" page 31.)
Currently, no Transfer Fees are imposed. However, for each transfer in
excess of twelve during a Policy Year, a Transfer Fee may be imposed equal to
the lesser of $10 or 2% of the amount transferred.
(See "Transfer Fee" page 32.)
Also, New York currently has no premium tax nor retaliatory premium
tax. If New York imposes these taxes in the future, or if the Owner is or
becomes a resident of a state other than New York where such taxes apply, the
charges could be deducted from premiums, from amounts withdrawn, and/or from the
Annuity Purchase Amount upon annuitization. (See "Premium Taxes" page 32.)
- 8 -
8
<PAGE>
Variable Account Fee Table
The purpose of this table is to assist in understanding the various
costs and expenses that the Owner will bear directly and indirectly. The table
reflects expenses of the Variable Account as well as of the Portfolios. The
table assumes that the entire Account Value is in the Variable Account. The
information set forth should be considered together with the narrative provided
under the heading "Charges and Deductions" on page 41 of this Prospectus, and
with the Funds' prospectuses. In addition to the expenses listed below, premium
taxes may be applicable. Contract Transaction Expenses(1)
Sales Load Imposed on Purchase Payments 0
Maximum Contingent Deferred Sales Load(2) 6%
- -----------------------------------------------------------------------------
Range of Contingent Deferred Sales Load Over Time
Contingent Deferred
Contract Years since Sales Load
Purchase Payments Receipt Percentage
Less than 2 years 6%
2 years but less than 4 years 5%
4 years but less than 6 years 4%
6 years but less than 7 years 2%
7 or more 0%
- --------------------------------------------------------------------------
Transfer Fee(3) 0
Systematic Withdrawal Fee(3) 0
Account Fee(4) $30
Variable Account Annual Expenses(1)
Mortality and Expense Risk Charges 1.25%
Administrative Expense Charge(5) .15%
Other Fees and Expenses of the Variable Account 0.00%
Total Variable Account Annual Expenses 1.40%
<TABLE>
<CAPTION>
Zero Stock
Money Managed Coupon Quality Small Capital Index
Portfolio Market Assets 2000 Bond Cap Appreciation Fund(6)
- --------- ------ ------ ---- ---- --- ------------ -------
Annual Expenses( 5)
- --------------------
(as a percentage of Portfolio
average net assets after fee waiver
and/or expense reimbursement )
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees 0.47% 0.75% 0.42% 0.61% 0.75% 0.73% 0.25%
Other Expenses 0.15% 0.19% 0.26% 0.20% 0.08% 0.12% 0.14%
Total Portfolio Annual0.62% 0.94% 0.68% 0.81% 0.83% 0.85% 0.39%
Expenses
</TABLE>
<TABLE>
<CAPTION>
Socially Growth Small
Responsible and International International Disciplined Company
Portfolio Fund Income Equity Value(7) Stock(7) Stock(7)
- --------- ---- ------ ------ -------- -------- --------
Annual Expenses( 5)
- --------------------
(as a percentage of Portfolio
average net assets after fee waiver
and/or expense reimbursement )
<S> <C> <C> <C> <C> <C> <C>
Management Fees 0.69% 0.72% 0.30% 1.00% 0.75% 0.75%
Other Expenses 0.58% 0.20% 1.29% 0.50% 0.25% 0.25%
Total Portfolio Annual 1.27% 0.92% 1.59% 1.50% 1.00% 1.00%
Expenses
</TABLE>
Expense information regarding the Portfolios has been provided by the Funds.
Transamerica has no reason to doubt the accuracy of that information, but
Transamerica has not verified those figures. In preparing the table above and
the examples that follow, Transamerica has relied on the figures provided by the
Funds. Actual expenses in future years may be higher or lower than the figures
above.
- 9 -
9
<PAGE>
Notes to Fee Table:
(1) A portion of the Purchase Payment may be withdrawn once each year after
the first Contract Year without imposition of any Contingent Deferred
Sales Load, and after a Purchase Payment has been held by Transamerica
for seven Contract Years, the remaining Purchase Payment may be
withdrawn free of any Contingent Deferred Sales Load. (See "Charges and
Deductions" page 41.)
(2) Transamerica currently does not impose a Transfer Fee. However, a
Transfer Fee of the lesser of $10 or 2% of the amount
transferred may be imposed for each transfer in excess of six in a
Contract Year. Transamerica may also impose a fee (of up to $25
per year) if the systematic withdrawal option is elected. (See "
Charges and Deductions" page 41.)
(3) The current annual Account Fee is $30 (or 2% of the Account Value,
if less) per Contract Year. The fee may be changed annually,
but it may not exceed $60 (or 2% of the Account Value, if less).
(See "Charges and Deductions" page 41.)
(4) The current annual Administrative Expense Charge is 0.15%; it may
be increased to 0.25%. The total of the charges described in
notes (2), (3) and (4) will never exceed the anticipated or estimated
costs to administer the Contract and the Variable Account. (See
"Charges and Deductions" page 41.)
(5) From time to time, the Portfolios' investment advisers (or the manager
and/or index manager in the case of the Stock Index Fund) in their sole
discretion may waive all or part of their fees and/or voluntarily
assume certain Portfolio expenses. For a more complete description of
the Portfolios' fees and expenses, see the Funds' prospectuses. As of
the date of this Prospectus, certain fees are being waived or expenses
are being assumed, in each case on a voluntary basis. Without such
waivers or reimbursements, the Management Fees, Other Expenses and
Total Portfolio Annual Expenses that would have been incurred for the
last completed fiscal year, December 31, 1995, would be - Money Market:
.0.50%, 0.15%, 0.65%; Managed Assets: 0.75%, 0.19%, 0.94%; Zero Coupon
2000: 0.45%, 0.26%, 0.71%; Quality Bond: 0.65%, 0.20%, 0.85%; Small
Cap: 0.75%, 0.08%, 0.83%; Capital Appreciation: 0.75%, 0.12%, 0.87%;
Stock Index Fund: 0..25%, 0.17%, 0.42%; Socially Responsible Fund:
0.75%, 0.58%; 1.33%; Growth and Income: 0.75%, 0.20%, 0.95%; and
International Equity: 0.75%, 1.29%, 2.04%. There is no guarantee that
any fee waivers or expense reimbursements will continue in the future.
See the Funds' prospectuses for a discussion of fee waiver and expense
reimbursements.
(6) The Stock Index Fund expense information has been restated to reflect
current fees.
(7) The International Value, Disciplined Stock and Small Company Stock
Portfolios did not commence operations during 1995. These numbers are
annualized estimates of the expenses that each of these Portfolios
expects to incur during fiscal year 1996.
- 10 -
10
<PAGE>
Examples*
The following six examples reflect the $30 Policy Fee as an annual
charge of 0.068% of assets based on an approximate average Policy Value of
$44,000.
These examples all assume no Transfer Fees, systematic withdrawal fee
or premium tax have been
assessed. Premium taxes may be applicable. (See "Premium Taxes" page 32.)
Examples 1 through 3 show expenses based on fee waivers and
reimbursements for 1995. There is no guarantee that any fee waivers or expense
reimbursements will continue in the future.
Example 1
If the Owner surrenders the Policy at the end of the applicable time
period, he/she would pay the following expenses on a $1,000 Initial Premium
assuming a 5% annual return on assets:
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
<S> <C> <C> <C> <C>
Money Market $76.93 $114.92 $152.28 $241.89
Managed Assets $79.95 $124.08 $168.46 $274.45
Zero Coupon 2000 $77.50 $116.65 $155.33 $248.08
Quality Bond $78.72 $120.37 $161.92 $261.36
Small Cap $78.91 $120.95 $162.93 $263.38
Capital Appreciation $79.10 $121.52 $163.93 $265.40
Stock Index Fund $74.76 $108.28 $140.49 $217.78
Socially Responsible Fund $83.05 $133.44 $184.86 $306.87
Growth and Income $79.76 $123.51 $167.45 $272.45
International Equity $86.04 $142.42 $200.51 $337.22
International Value $85.20 $139.90 $196.13 $328.79
Disciplined Stock $80.51 $125.79 $171.46 $280.43
Small Company Stock $80.51 $125.79 $171.46 $280.43
</TABLE>
Example 2
If the Owner does not surrender and does not annuitize the Policy, he/she
would pay the following expenses on a $1,000 Initial Premium assuming a 5%
annual return on assets:
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
<S> <C> <C> <C> <C>
Money Market $21.19 $65.43 $112.28 $241.89
Managed Assets $24.39 $75.09 $128.46 $274.45
Zero Coupon 2000 $21.79 $67.25 $115.33 $248.08
Quality Bond $23.09 $71.18 $121.92 $261.36
Small Cap $23.29 $71.78 $122.93 $263.38
Capital Appreciation $23.49 $72.38 $123.93 $265.40
Stock Index Fund $18.87 $58.42 $100.49 $217.78
Socially Responsible Fund $27.69 $84.97 $144.86 $306.87
Growth and Income $24.19 $74.49 $127.45 $272.45
International Equity $30.88 $94.45 $160.51 $337.22
International Value $29.98 $91.79 $156.13 $328.79
Disciplined Stock $24.99 $76.90 $131.46 $280.43
Small Company Stock $24.99 $76.90 $131.46 $280.43
</TABLE>
- 11 -
11
<PAGE>
Example 3
If the Owner elects to annuitize at the end of the applicable period under an
Annuity
Form with life contingencies,** he/she would pay the following expenses on a
$1,000 Initial Premium assuming a 5% annual return on assets:
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
<S> <C> <C> <C> <C>
Money Market $76.93 $65.43 $112.28 $241.89
Managed Assets $79.95 $75.09 $128.46 $274.45
Zero Coupon 2000 $77.50 $67.25 $115.33 $248.08
Quality Bond $78.72 $71.18 $121.92 $261.36
Small Cap $78.91 $71.78 $122.93 $263.38
Capital Appreciation $79.10 $72.38 $123.93 $265.40
Stock Index Fund $74.76 $58.42 $100.49 $217.78
Socially Responsible Fund $83.05 $84.97 $144.86 $306.87
Growth and Income $79.76 $74.49 $127.45 $272.45
International Equity $86.04 $94.45 $160.51 $337.22
International Value $85.20 $91.79 $156.13 $328.79
Disciplined Stock $80.51 $76.90 $131.46 $280.43
Small Company Stock $80.51 $76.90 $131.46 $280.43
</TABLE>
Examples 4 through 6 show examples based on the fund fees and expenses which
would have been incurred for the last completed fiscal year, December 31, 1995,
for all Portfolios if no fee waivers and reimbursements had been in effect.
Example 4
If the Owner surrenders the Policy at the end of the applicable time
period, he/she would pay the following expenses on a $1,000 Initial Premium
assuming a 5% annual return on assets:
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
<S> <C> <C> <C> <C>
Money Market $77.22 $115.79 $153.81 $244.99
Managed Assets $79.95 $124.08 $168.46 $274.45
Zero Coupon 2000 $77.78 $117.51 $156.86 $251.16
Quality Bond $79.10 $121.52 $163.93 $265.40
Small Cap $78.91 $120.95 $162.95 $263.38
Capital Appreciation $79.29 $122.09 $164.94 $267.42
Stock Index Fund $75.04 $109.15 $142.03 $220.96
Socially Responsible Fund $83.61 $135.13 $187.82 $312.64
Growth and Income $80.04 $124.37 $168.96 $275.45
International Equity $90.24 $154.89 $221.14 $378.13
International Value $85.20 $139.90 $196.13 $328.79
Disciplined Stock $80.51 $125.79 $171.46 $280.43
Small Company Stock $80.51 $125.79 $171.46 $280.43
</TABLE>
Example 5
If the Owner does not surrender and does not annuitize the Policy,
he/she would pay the following expenses on a $1,000 Initial Premium assuming a
5% annual return on assets:
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
<S> <C> <C> <C> <C>
Money Market $21.49 $66.34 $113.81 $244.99
Managed Assets $24.39 $75.09 $128.46 $274.45
Zero Coupon 2000 $22.09 $65.15 $116.86 $251.16
Quality Bond $23.49 $72.38 $123.93 $265.40
Small Cap $23.29 $71.78 $122.93 $263.38
Capital Appreciation $23.69 $72.99 $124.94 $267.42
Stock Index Fund $19.18 $59.34 $102.03 $220.96
Socially Responsible Fund $28.29 $86.75 $147.82 $312.64
</TABLE>
- 12 -
12
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Growth and Income $24.49 $75.40 $128.96 $275.45
International Equity $35.34 $107.62 $182.07 $378.13
International Value $29.98 $91.79 $156.13 $328.79
Disciplined Stock $24.99 $76.90 $131.46 $280.43
Small Company Stock $24.99 $76.90 $131.46 $280.43
</TABLE>
Example 6
If the Owner elects to annuitize at the end of the applicable period
under an Annuity Form with life contingencies,** he/she would pay the following
expenses on a $1,000 Initial Premium assuming a 5% annual return on assets:
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
<S> <C> <C> <C> <C>
Money Market $77.22 $66.34 $113.81 $244.99
Managed Assets $79.95 $75.09 $128.46 $274.45
Zero Coupon 2000 $77.78 $65.15 $116.86 $251.16
Quality Bond $79.10 $72.38 $123.93 $265.40
Small Cap $78.91 $71.78 $122.93 $263.38
Capital Appreciation $79.29 $72.99 $124.94 $267.42
Stock Index Fund $75.04 $59.34 $102.03 $220.96
Socially Responsible Fund $83.61 $86.75 $147.82 $312.64
Growth and Income $80.04 $75.40 $128.96 $275.45
International Equity $90.24 $107.62 $182.07 $378.13
International Value $85.20 $91.79 $156.13 $328.79
Disciplined Stock $80.51 $76.90 $131.46 $280.43
Small Company Stock $80.51 $76.90 $131.46 $280.43
</TABLE>
* In preparing the examples above, Transamerica has relied on the data
provided by the Funds. Transamerica has no reason to doubt the accuracy
of that information, but Transamerica has not verified those figures.
** For annuitization under a form that does not include life
contingencies, a Contingent Deferred Sales Load may apply.
THESE EXAMPLES SHOULD NOT BE CONSIDERED REPRESENTATIONS OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES PAID MAY BE GREATER OR LESS THAN THOSE SHOWN, SUBJECT
TO THE GUARANTEES IN THE POLICY.
- 13 -
13
<PAGE>
Annuity Payments
Annuity Payments will be made either on a fixed basis or a variable
basis or a combination of a fixed and variable basis as the Owner selects. The
Owner has flexibility in choosing the Annuity Date for his or her Policy. In no
event may the Annuity Date be later than the first day of the month immediately
preceding the month of the Annuitant's 85th birthday nor earlier than the first
day of the month coinciding with or immediately following the third Policy
Anniversary. Annuity Payments will begin on the first day of the calendar month
following the Annuity Date. (See "Annuity Payments" page 33.)
Four Annuity Forms are available under the Policy: (1) Life Annuity;
(2) Life and Contingent Annuity;
(3) Life Annuity with Period Certain; and (4) Joint and Survivor Annuity.
(See "Annuity Forms" page 34.)
Payments on Death Before the Annuity Date
A death benefit is paid on the death of either the Owner or Annuitant
prior to the Annuity Date. If the deceased Owner or Annuitant, as applicable,
had not attained their 85th birthday, the death benefit for a Policy is the
greatest of (a) the Policy Value, (b) all Premiums paid to the Policy less
withdrawals and any applicable premium taxes or (c) the greatest Policy
Anniversary Value prior to the earliest of the Annuitant's or Owner's 75th
birthday increased by Premiums paid since that Policy Anniversary less
withdrawals and any applicable premium taxes. If the deceased Owner or
Annuitant, as applicable, has attained age 85, the death benefit will be the
Policy Value. If the deceased Owner or Annuitant, as applicable, had not
attained 85th birthday, the death benefit will generally be paid within seven
days of receipt of the required Proof of Death of the Owner or the Annuitant and
election of the method of settlement or as soon thereafter as Transamerica has
sufficient information about the Beneficiary to make the payment, but if no
settlement method is elected the death benefit will be paid no later than one
year from the date of death. No Contingent Deferred Sales Load is imposed. The
death benefit may be paid as either a lump sum or as an annuity. (See "Death
Benefit" page 28.) Federal Income Tax Consequences
An Owner who is a natural person generally should not be taxed on
increases in the Policy Value until a distribution under the Policy occurs
(e.g., a withdrawal or Annuity Payment) or is deemed to occur (e.g., a pledge,
loan, or assignment of a Policy). Generally, a portion (up to 100%) of any
distribution or deemed distribution is taxable as ordinary income. The taxable
portion of distributions is generally subject to income tax withholding unless
the recipient elects otherwise. In addition, a federal penalty tax may apply to
certain distributions or deemed distributions. (See "Federal Tax Matters" page
36.) Right to Cancel
The Owner has the right to examine the Policy for a limited period,
known as a "Free Look Period." The Owner can cancel the Policy by delivering or
mailing a written notice or by sending a telegram to (a) the agent through whom
the Policy was purchased or (b) the Service Center before midnight of the tenth
day after receipt of the Policy. Notice given by mail and the return of the
Policy by mail, properly addressed and postage prepaid, will be deemed by
Transamerica to have been made on the date postmarked. Transamerica will refund
the Policy Value determined as of the date the notice is postmarked within seven
days after receipt of such notice to cancel and the returned Policy. Questions
Any questions about procedures or the Policy will be answered by the
Transamerica Annuity Service Center ("Service Center") at P.O. Box 30757, Los
Angeles, CA 90030-0757 until June 10, 1996, and at P.O. Box 31728, Charlotte,
North Carolina 28231-1728 after June 10 or call (800) 258-4261. All inquiries
should include the Policy Number and the Owner's and Annuitant's names.
NOTE: The foregoing summary is qualified in its entirety by the
detailed information in the remainder of this Prospectus and in the prospectuses
for Dreyfus Variable Investment Fund, Dreyfus Stock Index Fund, and The Dreyfus
Socially Responsible Growth Fund, Inc. which should be referred to for more
detailed information. With respect to Qualified Policies, it should be noted
that the requirements of a particular retirement plan, an endorsement to the
Policy, or limitations or penalties imposed by the Code or the Employee
Retirement Income Security Act of 1974, as amended,may impose limits or
restrictions on Premiums, Withdrawals, distributions, or benefits, or on other
provisions of the Policy. This Prospectus does not describe such limitations or
restrictions.
(See "Federal Tax Matters" page 36.)
- 14 -
14
<PAGE>
CONDENSED FINANCIAL INFORMATION
The following condensed financial information is derived from the
financial statements of the Variable Account. The data should be read in
conjunction with the financial statements, related notes, and other financial
information included in the Statement of Additional Information.
The following table sets forth certain information regarding the
Sub-Accounts for a Contract for the period from commencement of business
operations on January 4, 1993 through December 31, 1995, except for the Socially
Responsible Sub-Account which commenced operations on October 7, 1993, the
Capital Appreciation Sub-Account which commenced operations on April 5, 1993 and
the Growth and Income and the International Equity Sub-Accounts which commenced
operations on January 5, 1995. Information for the International Value,
Disciplined Stock and Small Company Stock Sub-Accounts is not included because
these Sub- Accounts did not commence operations during 1995.
The Variable Accumulation Unit values and the number of Variable
Accumulation Units outstanding for each Sub-Account for the periods shown are as
follows:
<TABLE>
<CAPTION>
Year Ending December 31, 1993
-----------------------------------------------------------------
Money Managed Zero Coupon Quality
Market Assets 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
<S> <C> <C> <C> <C> <C>
at Beginning of Period $1.021 $12.797 $13.225 $12.310 $39.620
Accumulation Unit Value
at End of Period.. $1.018 $12.861 $13.373 $12.445 $37.702
Number of Accumulation
Units Outstanding
at End of Period.. 2,678,280.492 167,686.797 137,252.898 86,752.856 138,557.449
</TABLE>
<TABLE>
<CAPTION>
Capital Appreciation Socially Responsible
Sub-Account Sub-Account
(Inception- (Inception-
April 5, Stock Index October 7,
1993) Sub-Account 1993)
Accumulation Unit Value at
<S> <C> <C> <C>
Beginning of Period..... $6.590 $16.590 $12.490
Accumulation Unit Value at
End of Period........... $13.160 $16.521 $13.364
Number of Accumulation Units
Outstanding at End of Period 44,612.892 32,543.274 3,555.254
</TABLE>
<TABLE>
<CAPTION>
Year Ending December 31, 1994
---------------------------------------------------------------------------------
Money Managed Zero Coupon Quality
Market Assets 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
<S> <C> <C> <C> <C> <C>
at Beginning of Period$1.018 $12.861 $13.373 $12.445 $37.702
Accumulation Unit Value
at End of Period.. $1.048 $12.496 $12.672 $11.710 $40.064
Number of Accumulation
Units Outstanding
at End of Period.. 8,547,165.659 820,985.237 203,164.533 164,657.770 612,327.237
</TABLE>
- 15 -
15
<PAGE>
<TABLE>
<CAPTION>
Capital Appreciation Stock Index Socially Responsible
Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
<S> <C> <C> <C>
at Beginning of Period $13.160 $16.521 $13.364
Accumulation Unit Value
at End of Period..... $13.373 $16.437 $13.377
Number of Accumulation
Units Outstanding
at End of Period..... 285,264.827 190,496,641 24,435.402
</TABLE>
<TABLE>
<CAPTION>
Year Ending December 31, 1995
- ---------------------------------------------------------------------------------
Money Managed Zero Coupon Quality
Market Assets 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
<S> <C> <C> <C> <C> <C>
at Beginning of Period $1.048 $12.496 $12.672 $11.711 $40.064
Accumulation Unit Value
at End of Period $1.093 $12.292 $14.740 $13.908 $51.121
Number of Accumulation
Units Outstanding
at End of Period 9,084,943.487 666,488.480 351,788.006 454,139.991 817,445.023
</TABLE>
<TABLE>
<CAPTION>
Growth and Income International Equity
Sub-Account Sub-Account
Capital Appreciation Stock Index Socially Responsible (Inception (Inception
Sub-Account Sub-Account Sub-Account January 5, 1995 January 5, 1995
----------- ----------- ----------- --------------- ---------------
Accumulation Unit Value
<S> <C> <C> <C> <C> <C>
at Beginning of Period $13.373 $16.437 $13.377 $12.235 $12.024
Accumulation Unit Value
at End of Period $17.610 $22.172 $17.752 $19.426 $12.964
Number of Accumulation
Units Outstanding
at End of Period 587,928.246 365,482.688 49,020.846 734,393.096 61,152.467
</TABLE>
Financial Statements for the Variable Account and Transamerica
The financial statements and reports of independent auditors for the
Variable Account and Transamerica are contained in the Statement of Additional
Information.
PERFORMANCE DATA
From time to time, Transamerica may advertise yields and average
annual total returns for the Sub-Accounts of the Variable Account. In addition,
Transamerica may advertise the effective yield of the Money Market Sub-Account.
These figures will be based on historical information and are not intended to
indicate future performance. The yield of the Money Market Sub-Account refers to
the annualized income generated by an investment in that Sub-Account over a
specified seven-day period. The yield is calculated by assuming that the income
generated for that seven-day period is generated each seven-day period over a
52-week period and is shown as a percentage of the investment. The effective
yield is calculated similarly but, when annualized, the income earned by an
investment in that Sub-Account is assumed to be reinvested. The effective yield
will be slightly higher than the yield because of the compounding effect of this
assumed reinvestment.
The yield of a Sub-Account (other than the Money Market Sub-Account)
refers to the annualized income generated by an investment in the Sub-Account
over a specified thirty-day period. The yield is calculated by assuming that the
income generated by the investment during that thirty-day period is generated
each thirty-day period over a twelve-month period and is shown as a percentage
of the investment.
The yield calculations do not reflect the effect of any Contingent
Deferred Sales Load or premium taxes that may be applicable to a particular
Policy. To the extent that the Contingent Deferred Sales Load is applicable
- 16 -
16
<PAGE>
to a particular Policy, the yield of that Policy will be reduced. For additional
information regarding yields and total returns calculated using the standard
formats briefly described herein, please refer to the Statement of Additional
Information.
The average annual total return of a Sub-Account refers to return
quotations assuming an investment has been held in the Sub-Account for various
periods of time including, but not limited to, a period measured from the date
the Sub-Account commenced operations. When a Sub-Account has been in operation
for 1, 5, and 10 years, respectively, the average annual total return for these
periods will be provided. The average annual total return quotations will
represent the average annual compounded rates of return that would equate an
initial investment of $1,000 to the redemption value of that investment
(including the deduction of any applicable Contingent Deferred Sales Load but
excluding the deduction of any premium taxes) as of the last day of each of the
periods for which total return quotations are provided.
Performance information for any Sub-Account reflects only the
performance of a hypothetical Policy under which Policy Value is allocated to a
Sub-Account during a particular time period on which the calculations are based.
Performance information should be considered in light of the investment
objectives and policies and characteristics of the Portfolios in which the
Sub-Account invests, and the market conditions during the given time period, and
should not be considered as a representation of what may be achieved in the
future. For a description of the methods used to determine yield and total
returns, see the Statement of Additional Information.
Reports and promotional literature may also contain other information
including (1) the ranking of any Sub-Account derived from rankings of variable
annuity separate accounts or their investment products tracked by Lipper
Analytical Services, Inc., VARDS, IBC/Donoghue's Money Fund Report, Financial
Planning Magazine, Money Magazine, Bank Rate Monitor, Standard and Poor's
Indices, Dow Jones Industrial Average, and other rating services, companies,
publications, or other persons who rank separate accounts or other investment
products on overall performance or other criteria, and (2) the effect of tax
deferred compounding on Sub-Account investment returns, or returns in general,
which may be illustrated by graphs, charts, or otherwise, and which may include
a comparison, at various points in time, of the return from an investment in a
Policy (or returns in general) on a tax-deferred basis (assuming one or more tax
rates) with the return on a currently taxable basis. Other ranking services and
indices may be used.
In its advertisements and sales literature, Transamerica may discuss,
and may illustrate by graphs, charts, or otherwise, the implications of longer
life expectancy for retirement planning, the tax and other consequences of
long-term investment in the Policy, the effects of the Policy's lifetime payout
option, and the operation of certain special investment features of the Policy
- -- such as the Dollar Cost Averaging option. Transamerica may explain and depict
in charts, or other graphics, the effects of certain investment strategies.
Transamerica may also discuss the Social Security system and its projected
payout levels and retirement plans generally, using graphs, charts and other
illustrations.
Transamerica may from time to time also disclose average annual total
return in non-standard formats and cumulative (non-annualized) total return for
the Sub-Accounts. The non-standard average annual total return and cumulative
total return will assume that no Contingent Deferred Sales Load is applicable.
Transamerica may from time to time also disclose yield, standard total returns,
and non-standard total returns for any or all Sub-Accounts.
All non-standard performance data will only be disclosed if the
standard performance data is also disclosed. For additional information
regarding the calculation of other performance data, please refer to the
Statement of Additional Information.
Transamerica may also advertise performance figures for the
Sub-Accounts based on the performance of a Portfolio prior to the time the
Variable Account commenced operations.
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<PAGE>
FIRST TRANSAMERICA LIFE INSURANCE COMPANY
AND THE VARIABLE ACCOUNT
First Transamerica Life Insurance Company
First Transamerica Life Insurance Company ("Transamerica") is a
stock life insurance company
incorporated under the laws of the State of New York on February 5, 1986.
It is principally engaged in the sale
of life insurance and annuity policies. Transamerica is a wholly-owned
subsidiary of Transamerica Occidental Life
Insurance Company, which in turn is an indirect subsidiary of Transamerica
Corporation. The address for First
Transamerica Life is 575 Fifth Avenue, Thirty-Sixth Floor, New York, New York
10017-2422.
Published Ratings
Transamerica may from time to time publish in advertisements, sales
literature and reports to Owners, the ratings and other information assigned to
it by one or more independent rating organizations such as A.M. Best Company,
Standard & Poor's, and Duff & Phelps. The purpose of the ratings is to reflect
the financial strength and/or claims-paying ability of Transamerica and should
not be considered as bearing on the investment performance of assets held in the
Variable Account. Each year the A.M. Best Company reviews the financial status
of thousands of insurers, culminating in the assignment of Best's Ratings. These
ratings reflect their current opinion of the relative financial strength and
operating performance of an insurance company in comparison to the norms of the
life/health insurance industry. In addition, the claims-paying ability of
Transamerica as measured by Standard & Poor's Insurance Ratings Services or Duff
& Phelps may be referred to in advertisements or sales literature or in reports
to Owners. These ratings are opinions of an operating insurance company's
financial capacity to meet the obligations of its insurance and annuity policies
in accordance with their terms. Such ratings do not reflect the investment
performance of the Variable Account or the degree of risk associated with an
investment in the Variable Account. The Variable Account
Separate Account VA-2LNY of Transamerica (the Variable Account) was
established by Transamerica as a separate account under the laws of the State of
New York on June 23, 1992 pursuant to resolutions of Transamerica's Board of
Directors. The Variable Account is registered with the Securities and Exchange
Commission ("Commission") under the Investment Company Act of 1940 (the "1940
Act") as a unit investment trust. It meets the definition of a separate account
under the federal securities laws. However, the Commission does not supervise
the management or the investment practices or policies of the Variable Account.
The assets of the Variable Account are owned by Transamerica but they
are held separately from the other assets of Transamerica. Section 4240 of the
New York Insurance Law provides that the assets of a separate account are not
chargeable with liabilities incurred in any other business operation of the
insurance company (except to the extent that assets in the separate account
exceed the reserves and other liabilities of the separate account) if and to the
extent so provided in the applicable agreements, and the Policies contain such a
provision. Income, gains and losses incurred on the assets in the Variable
Account, whether or not realized, are credited to or charged against the
Variable Account without regard to other income, gains or losses of
Transamerica. Therefore, the investment performance of the Variable Account is
entirely independent of the investment performance of Transamerica's general
account assets or any other separate account maintained by Transamerica.
The Variable Account has thirteen Sub-Accounts, each of which invests
solely in a specific corresponding
Portfolio. (See "The Funds" page 19.) Changes to the Sub-Accounts may be made
at the discretion of
Transamerica. (See "Addition, Deletion, or Substitution" page 22.)
THE FUNDS
The Variable Account invests exclusively in Series of the Dreyfus
Variable Investment Fund (the "Variable Fund"), the Dreyfus Stock Index Fund
(the "Stock Index Fund") and The Dreyfus Socially Responsible Growth Fund, Inc.
(the "Socially Responsible Fund"). The Variable Fund was organized as an
unincorporated business trust under Massachusetts law pursuant to an Agreement
and Declaration of Trust dated October 29, 1986, commenced operations on August
31, 1990, and is registered with the Commission as an open-end management
investment company under the 1940 Act. Currently, eleven Series (i.e.,
Portfolios) of the Variable Fund are available for the Policies. Each Portfolio
has separate investment objectives and policies. As a
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<PAGE>
result, each Portfolio operates as a separate investment portfolio and the
investment performance of one Portfolio has no effect on the investment
performance of any other Portfolio. The Stock Index Fund was incorporated under
Maryland law on January 24, 1989, commenced operations on September 29, 1989,
and is registered with the Commission as an open-end, non-diversified,
management investment company. The Socially Responsible Fund was incorporated
under Maryland law on July 20, 1992, commenced operations on August 31, 1993,
and is registered with the Commission as an open-end, diversified, management
investment company. However, the Commission does not supervise the management or
the investment practices and policies of any of the Funds. The assets of the
Variable Fund, the Socially Responsible Fund and the Stock Index Fund are each
separate from the assets of the other Funds.
The Dreyfus Corporation provides investment advisory and administrative
services to the Variable Fund and the Socially Responsible Fund.Mellon Equity
Associates provides index fund management services to the Stock Index Fund, with
The Dreyfus Corporation serving as the manager, in accordance with applicable
agreements with the Fund. Comstock Partners, Inc. provides sub-investment
advisory services to the Managed Assets Portfolio. Fayez Sarofim & Co. provides
sub-investment advisory services for the Capital Appreciation Portfolio. The
Boston Company Asset Management, Inc. provides sub-investment advisory services
to the International Value Portfolio. Laurel Capital Advisors provides
investment advisory services to the Small Company Stock and Disciplined Stock
Portfolios. M&G Investment Management Limited provides sub-investment advisory
services for the International Equity Portfolio. NCM Capital Management Group,
Inc. provides sub-investment advisory services for the Socially Responsible
Fund.
The Portfolios are described below. See the Variable Fund, the Stock
Index Fund and the Socially
Responsible Fund prospectuses for more information.
Money Market Portfolio
The Money Market Portfolio's investment objective is to achieve as
high a level of current income as is consistent with the preservation of capital
and the maintenance of liquidity. It seeks to achieve its objective by investing
in short-term money market instruments. The investment advisory fee is payable
monthly at the annual rate of 0.50 of 1% of the value of the Portfolio's average
daily net assets. This Portfolio is neither insured nor guaranteed by the United
States Government and there can be no assurance that it will be able to maintain
a stable net asset value of $1.00 per share. Managed Assets Portfolio
The Managed Asset Portfolio's investment objective is to maximize
total return, consisting of capital appreciation and current income. It seeks to
achieve its objective by investing in a wide range of equity and debt securities
and money market instruments. An investment advisory fee is payable monthly to
The Dreyfus Corporation, and a sub-investment advisory fee is payable monthly to
Comstock Partners, Inc., each at the annual rate of 0.375 of 1% (for a total of
0.75%) of the value of the Portfolio's average daily net assets. Zero Coupon
2000 Portfolio
The Zero Coupon 2000 Portfolio's investment objective is to provide
as high an investment return as is consistent with the preservation of capital.
It seeks to achieve its objective by investing primarily in debt obligations of
the U.S. Treasury that have been stripped of their unmatured interest coupons,
interest coupons that have been stripped from debt obligations issued by the
U.S. Treasury and receipts and certificates for stripped debt obligations and
stripped coupons, including U.S. Government trust certificates (collectively,
"Stripped Treasury Securities"). The Portfolio's also may purchase certain other
types of stripped government or corporate securities. The Portfolio's assets
will consist primarily of portfolio securities which will mature on or about
December 31, 2000. The investment advisory fee is payable monthly at the annual
rate of 0.45 of 1% of the value of the Portfolio's average daily net assets. No
more than 55% of the Portfolio's assets will be invested in Stripped Treasury
Securities. Quality Bond Portfolio
The Quality Bond Portfolio's investment objective is to provide the
maximum amount of current income to the extent consistent with the preservation
of capital and the maintenance of liquidity. It seeks to achieve its objective
by investing principally in debt obligations of corporations, the U.S.
Government and its
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<PAGE>
agencies and instrumentalities, and major banking institutions. The investment
advisory fee is payable monthly
at the annual rate of 0.65 of 1% of the value of the Portfolio's average daily
net assets.
Small Cap Portfolio
The Small Cap Portfolio's investment objective is to maximize capital
appreciation. It seeks to achieve its objective by investing principally in
common stocks;under normal market conditions, the Portfolio's will invest at
least 65% of its total assets in companies with market capitalizations of less
than $750 million at the time of purchase which The Dreyfus Corporation believes
to be characterized by new or innovative products, services or processes which
should enhance prospects for growth in the future earnings. The investment
advisory fee is payable monthly at the annual rate of 0.75 of 1% of the value of
the Portfolio's average daily net assets. Capital Appreciation Portfolio
The Capital Appreciation Portfolio's primary investment objective is
to provide long-term capital growth consistent with the preservation of capital;
current income is a secondary goal. It seeks to achieve its goals by investing
in common stocks of domestic and foreign issuers. An investment advisory fee is
payable to The Dreyfus Corporation and a sub-investment advisory fee is payable
monthly to Fayez Sarofim & Co. at the annual rate of 0.75 of 1% of the value of
the Portfolio's average daily net assets. Growth and Income Portfolio
The Growth and Income Portfolio's investment objective is to provide
long-term capital growth, current income and growth of income, consistent with
reasonable investment risk. This Portfolio's invests primarily in equity and
debt securities and money market instruments of domestic and foreign issuers.
The proportion of the Portfolio's assets invested in each type of security will
vary from time to time in accordance with The Dreyfus Corporation's assessment
of economic conditions and investment opportunities. An investment advisory fee
is payable monthly to The Dreyfus Corporation at the annual rate of 0.75 of 1%
of the value of the Portfolio's average daily net assets. International Equity
Portfolio
The International Equity Portfolio's investment objective is to
maximize capital appreciation. This Portfolio's invests primarily in the equity
securities of foreign issuers located throughout the world. An investment
advisory fee at an annual rate of 0.75 of 1% of the value of the Portfolio's
average daily net assets is payable monthly to The Dreyfus Corporation. An
investment advisory fee is payable monthly to The Dreyfus Corporation at the
annual rate of 1.00% of the value of the Portfolio's average daily net assets.
The Dreyfus Corporation has agreed to pay the Boston Company Asset Management,
Inc. a monthly fee at the annual rate of 0.50% of 1% of the value of the
Portfolio's average daily net assets. International Value Portfolio
The International Value Portfolio's investment objective is long-term
capital growth. This Portfolio invests primarily in a portfolio of publicly
traded equity securities of foreign issuers which would be characterized as
"value" companies according to criteria established by the Portfolio's
investment advisers. An investment advisory fee is payable monthly to The
Dreyfus Corporation at the annual rate of 1.00% of the value of the Portfolio's
average daily net assets. The Dreyfus Corporation has agreed to pay The Boston
Company Asset Management, Inc. a monthly fee at the annual rate of 0.50% of 1%
of the value of the Portfolio's average daily net assets. Disciplined Stock
Portfolio
The Disciplined Stock Portfolio's investment objective is to provide
investment results that are greater than the total return performance of
publicly traded common stocks in the aggregate, as presented by the Standard &
Poor's 500 Composite Stock Price Index. This Portfolio will use quantitative
statistical modeling techniques to construct a portfolio in an attempt to
achieve its investment objective, without assuming undue risk relative to the
broad stock market. An investment advisory fee is payable monthly to The Dreyfus
Corporation at the annual rate of 0.75% of 1% of the value of the Portfolio's
average daily net assets. The Dreyfus Corporation has agreed to pay Laurel
Capital Advisors a monthly fee at the annual rate of 0.25 of 1% of the average
daily net assets of
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<PAGE>
the Portfolio up to $100 million to $1 billion; 0.15 of 1% of the Portfolio's
average daily net assets from $1 billion
to $1.5 billion; and 0.10 of 1% of the Portfolio's average daily net assets of
$1.5 billion or more.
Small Company Stock Portfolio
The Small Company Stock Portfolio's investment objective is to provide
investment results that are greater than the total return performance of
publicly traded common stocks in the aggregate, as represented by the Russell
2500(TM) Index. This Portfolio invests primarily in a portfolio of equity
securities of small- to medium-sized domestic issuers, while attempting to
maintain volatility and diversification similar to that of the Russell 2500(TM)
Index. An investment advisory fee is payable monthly to the Dreyfus Corporation
at the annual rate of 0.75% of 1% of the value of the Portfolio's average daily
net assets. The Dreyfus Corporation has agreed to pay Laurel Capital Advisors a
monthly fee at the annual rate of 0.25 of 1% of the average daily net assets of
the Portfolio up to $100 million; 0.20 of 1% of the Portfolio's average daily
net assets from $100 million to $1 billion; 0.15 of 1% of the Portfolio's
average daily net assets from $1 billion to $1.5 billion; and 0.10 of 1% of the
Portfolio's average daily net assets of $1.5 billion or more. Stock Index Fund
The Stock Index Fund's investment objective is to provide investment
results that correspond to the price and yield performance of publicly traded
common stocks in the aggregate, as represented by the Standard & Poor's 500
Composite Stock Price Index. The Stock Index Fund is neither sponsored by nor
affiliated with Standard & Poor's Corporation. The Stock Index Fund pays a
monthly management fee to The Dreyfus Corporation at the annual rate of 0.245%
of the value of the Stock Index Fund's average daily net assets. The Dreyfus
Corporation has agreed to pay Mellon Equity Assoicates a monthly fee at the
annual rate of 0.095% of the value of the Fund's average daily net assets.
Socially Responsible Fund
The Socially Responsible Fund's primary goal is to provide capital
growth. It seeks to achieve this goal by investing principally in common stocks,
or securities convertible into common stock, of companies which, in the opinion
of the Fund's management, not only meet traditional investment standards, but
also show evidence that they conduct their business in a manner that contributes
to the enhancement of the quality of life in America. Current income is a
secondary goal. A management fee is payable monthly to The Dreyfus Corporation
at the annual rate of 0.75 of 1% of the value of the Socially Responsible Fund's
average daily net assets. The Dreyfus Corporation pays NCM Capital Management
Group, Inc. a sub-investment advisory fee at the annual rate of 0.10 of 1% of
the Portfolio's average daily net assets up to $32 million; 0.15 of 1% of the
Portfolio's average daily net assets in excess of $32 million up to $150
million; 0.20 of 1% of the Portfolio's average daily net assets in excess of
$150 million up to $300 million; and 0.25 of 1% of the Portfolio's average daily
net assets in excess of $300 million.
Meeting objectives depends on various factors, including, but not
limited to, how well the portfolio
managers anticipate changing economic and market conditions. THERE IS NO
ASSURANCE THAT ANY OF
THESE PORTFOLIOS WILL ACHIEVE THEIR STATED OBJECTIVES.
An investment in the Policy is not a deposit or obligation of, or
guaranteed or endorsed by, any bank, nor is the Policy federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investing in the Policy involves certain investment risks,
including possible loss of principal.
Since all of the Portfolios are available to registered separate
accounts offering variable annuity and variable life products of Transamerica as
well as other insurance companies, there is a possibility that a material
conflict may arise between the interests of the Variable Account and one or more
other separate accounts investing in the Funds. In the event of a material
conflict, the affected insurance companies will take any necessary steps to
resolve the matter, including stopping their separate account from investing in
the Funds. See the Funds' prospectuses for more details.
Additional information concerning the investment objectives and
policies of all of the Portfolios, the investment advisory services and
administrative services and charges can be found in the current prospectuses for
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the Funds which accompany this Prospectus. The Funds' prospectuses should be
read carefully before any decision
is made concerning the allocation of Premiums to, or transfers among, the
Sub-Accounts.
Addition, Deletion, or Substitution
Transamerica does not control the Funds and cannot guarantee that any
of the Sub-Accounts of the Variable Account or any of the Portfolios will always
be available for allocation of Premiums or transfers. Transamerica retains the
right to make changes in the Variable Account and in its investments.
Subject to the approval of the New York Insurance Department,
Transamerica reserves the right to eliminate the shares of any Portfolio held by
a Sub-Account, and to substitute shares of another Portfolio or of another
investment company for the shares of any Portfolio, if the shares of the
Portfolio are no longer available for investment or if, in Transamerica's
judgement, investment in any Portfolio would be inappropriate in view of the
purposes of the Variable Account. To the extent required by the 1940 Act, a
substitution of shares attributable to the Owner's interest in a Sub-Account
will not be made without prior notice to the Owner and the prior approval of the
Commission. Nothing contained herein shall prevent the Variable Account from
purchasing other securities for other series or classes of variable annuity
policies, or from effecting an exchange between series or classes of variable
policies on the basis of requests made by Owners.
New Sub-Accounts may be established when, in the sole discretion of
Transamerica, marketing, tax, investment or other conditions so warrant. Any new
Sub-Accounts will be made available to existing Owners on a basis to be
determined by Transamerica. Each additional Sub-Account will purchase shares in
a Portfolio or in another mutual fund or investment vehicle. Transamerica may
also eliminate one or more Sub-Accounts if, in its sole discretion, marketing,
tax, investment or other conditions so warrant. In the event any Sub-Account is
eliminated, Transamerica will notify Owners and request a re-allocation of the
amounts invested in the eliminated Sub-Account.
In the event of any substitution or change, Transamerica may make such
changes in the Policies as may be necessary or appropriate to reflect such
substitution or change. Furthermore, if deemed to be in the best interests of
persons having voting rights under the Policies, the Variable Account may be
operated as a management company under the 1940 Act or any other form permitted
by law, may be deregistered under such Act in the event such registration is no
longer required, or may be combined with one or more other separate accounts.
THE POLICY
The Policy is a Flexible Premium Multi-Funded Individual Deferred
Annuity Policy. The rights and benefits under the Policy are described below and
in the Policy; however, Transamerica reserves the right to make any modification
to conform the Policy to, or give the Policy Owner the benefit of, any federal
or state statute or rule or regulation. The obligations under the Policy are
obligations of Transamerica.
The Policies are available on a non-qualified basis and as individual
retirement annuities (IRAs) that qualify for special federal income tax
treatment. Generally, Qualified Policies may be purchased only in connection
with a "rollover" of funds from another qualified plan or IRA and contain
certain restrictive provisions limiting the timing and amount of payments and
distributions from the Qualified Policy. Qualified Policies
The Policies may be used to fund IRA rollovers for use in connection
with Section 408(b) of the Code. If a Policy is purchased to fund an IRA, the
Annuitant must also be the Owner. Under current tax law, minimum distributions
from IRAs must commence not later than April 1st of the calendar year following
the calendar year in which the Owner attains age 70 1/2. The Owner should
consult his/her tax adviser concerning these matters. The only type of qualified
plan that Policies are available to fund is an IRA rollover.
An IRA rollover is a rollover of certain kinds of distributions from
qualified plans, Section 403(b) tax sheltered annuities and individual
retirement plans, following the rules set out in the Code to maintain favorable
tax treatment to an Individual Retirement Annuity.
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<PAGE>
POLICY APPLICATION AND PREMIUMS
Premiums
All Premiums must be paid to the Service Center. A confirmation will
be issued to the Owner upon the acceptance of each Premium.
The Initial Premium for each Policy must be at least $5,000.
The Policy will be issued and the Net Premium derived from the Initial
Premium generally will be accepted and credited within two business days after
the receipt of a properly completed application and receipt of the Initial
Premium at the Service Center. (A Net Premium is the Premium less any applicable
premium taxes, including retaliatory premium taxes, should such taxes be levied
in the future in New York or should the Owner live in a state with such taxes in
the future.) Acceptance is subject to the application being received in good
order, and Transamerica reserves the right to reject any application.
If the Initial Premium cannot be credited within two days of receipt of
the Premium and application because the application is incomplete or for any
other reason, then Transamerica will contact the Owner, explain the reason for
the delay and will refund the Initial Premium within five business days, unless
the Owner consents to Transamerica retaining the Initial Premium and crediting
it as soon as the requirements are fulfilled.
The Owner has the right to examine the Policy for a limited period,
known as a "Free Look Period." The Owner can cancel the Policy by delivering or
mailing a written notice or by sending a telegram to (a) the agent through whom
the Policy was purchased or (b) the Service Center, before midnight of the tenth
day after receipt of the Policy. Notice given by mail and the return of the
Policy by mail, properly addressed and postage prepaid, will be deemed by
Transamerica to have been made on the date postmarked. Transamerica will refund
the Policy Value determined as of the date the notice is postmarked, within
seven days after receipt of such notice to cancel and the returned Policy.
Additional Premiums may be made at any time prior to the Annuity Date,
as long as the Annuitant or Contingent Annuitant is living. Additional Premiums
must be at least $500, or at least $100 if made pursuant to an automatic payment
plan, under which the Additional Premiums is automatically deducted from a bank
account. In addition, minimum allocation amounts apply (see "Allocation of
Premiums" on page 24). Additional Net Premiums are credited to the Policy as of
the date the payment is received.
Total Premiums for any Policy may not exceed $1,000,000 without prior
approval of Transamerica. In no event may the sum of all Premiums for a
Policy during any taxable year exceed the limits imposed
by any applicable federal or state laws, rules, or regulations.
Allocation of Premiums
The Owner specifies in the application how Premiums will be allocated
under the Policy. The Owner may allocate the Net Premium to one or more of the
Sub-Accounts as long as the portions are whole number percentages and any
allocation percentage for a Sub-Account is at least 10%. In addition, the
Initial Premium is subject to a minimum allocation of $1,000 to any selected
Sub-Account. The Owner may choose to allocate nothing to a particular
Sub-Account.
For IRAs, on the Policy Date, the Net Premium derived from the Initial
Premium will first be allocated to the Money Market Sub-Account of the Variable
Account and will remain in that Sub-Account for fifteen calendar days after the
Policy Date. At that time, the dollar value of the Accumulation Units held in
the Money Market Sub-Account attributable to such net Premium will be allocated
among the Sub-Accounts of the Variable Account in accordance with the allocation
percentages selected by the Owner in the application. On non-IRA Policies, the
Net Premium derived from the initial Premium will be allocated directly to the
Sub-Account(s) selected by the Owner.
Each Net Premium will be subject to the allocation percentages in
effect at the time of receipt of such Premium. The allocation percentages for
new Premiums among the Sub-Accounts may be changed by the Owner at any time by
submitting a request for such change to the Service Center in a form and manner
acceptable to Transamerica. Any changes to the allocation percentages are
subject to the limitation above. Any change will take effect with the first
Premium received with or after receipt of request for such change by the Service
Center, in a form and manner acceptable to Transamerica, and will continue in
effect until subsequently changed.
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If the allocation of additional Net Premiums is directed to an Inactive
Sub-Account of the Variable Account, then the amount allocated must be at least
$1,000.
POLICY VALUE
Before the Annuity Date, the Policy Value is the total dollar amount
of all Variable Accumulation Units in each Sub-Account credited to a Policy. The
Policy Value is equal to: (a) Net Premiums; plus or minus (b) any increase or
decrease in the value of the Sub-Accounts due to investment results; less (c)
the daily Mortality and Expense Risk Charge; less (d) the daily Administrative
Expense Charge; less (e) the annual Policy Fees, if applicable, taken at the end
of each Policy Year; less (f) any Transfer Fees; and less (g) any withdrawals
from the Sub-Accounts.
A Valuation Period is the period between successive Valuation Days. It
begins at the close of the New York Stock Exchange (generally 4:00 p.m. ET) on
each Valuation Day and ends at the close of the New York Stock Exchange on the
next succeeding Valuation Day. A Valuation Day is each day that the New York
Stock Exchange is open for regular business. The value of the Variable Account
assets is determined at the end of each Valuation Day. To determine the value of
an asset on a day that is not a Valuation Day, the value of that asset as of the
end of the next Valuation Day will be used.
The Policy Value is expected to change from Valuation Period to
Valuation Period, reflecting the investment experience of all of the selected
Portfolios as well as the deductions for charges.
Net Premiums which the Owner allocates to a Sub-Account of the Variable
Account are used to purchase Variable Accumulation Units in that Sub-Account.
The number of Variable Accumulation Units to be credited for each Sub-Account
will be determined by dividing the portion of each Net Premium allocated to the
Sub-Account by the Variable Accumulation Unit Value determined at the end of the
Valuation Period during which the Net Premium was received. In the case of the
Initial Net Premium, Variable Accumulation Units for that payment will be
credited to the Policy Value (and held in the Money Market Sub-Account for
fifteen calendar days after the Policy Date) within two Valuation Days of the
later of: (a) the date an acceptable and properly completed application is
received at our Service Center; or (b) the date our Service Center receives the
Initial Premium. In the case of any subsequent Premium, Variable Accumulation
Units for that payment will be credited at the end of the Valuation Period
during which Transamerica receives the payment. The value of a Variable
Accumulation Unit for each Sub-Account for a Valuation Period is established at
the end of each Valuation Period and is calculated by multiplying the value of
that unit at the end of the prior Valuation Period by the Sub-Account's Net
Investment Factor for the Valuation Period. The value of a Variable Accumulation
Unit may go up or down.
The Net Investment Factor is used to determine the value of
Accumulation and Annuity Unit Values for the end of a Valuation Period. The
applicable formula can be found in the Statement of Additional Information.
Transfers among the Sub-Accounts will result in the purchase and/or
cancellation of Variable Accumulation Units having a total value equal to the
dollar amount being transferred to or from a particular Sub-Account. The
purchase and cancellation of such units generally are made using the Variable
Accumulation Unit value of the applicable Sub-Accounts as of the end of the
Valuation Day in which the transfer is effective.
TRANSFERS
Before the Annuity Date
Before the Annuity Date, the Owner may transfer all or part of the
Policy Value among the Variable Sub-Account(s) by giving a Written Request to
the Service Center subject to the following conditions: (1) not more than 18
transfers may be made in any Policy Year; (2) the minimum amount which may be
transferred is $500; and (3) the minimum transfer to an Inactive Sub-Account is
$1,000. Transfers are also subject to such terms and conditions as may be
imposed by the Funds.
Transfer requests must specify the amounts being transferred from each
Sub-Account and the amounts being transferred into each Sub-Account.
Currently, there is no charge for transfers. However, Transamerica
reserves the right to impose a charge of the lesser of 2% of the amount
transferred or $10 for each transfer after twelve in any Policy Year. All
requests
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received during a single Valuation Period will be treated as a single transfer.
A transfer generally will be effective on the date the request for transfer is
received by the Service Center.
If a transfer reduces the value in a Sub-Account to less than $1,000,
then Transamerica reserves the right
to transfer the remaining amount along with the amount requested to be
transferred in accordance with the transfer
instructions provided by the Owner. Under current law, there will not be any
tax liability to the Owner if the
Owner makes a transfer.
Possible Restrictions
Transamerica reserves the right without prior notice to modify,
restrict, suspend or eliminate the transfer privileges (including telephone
transfers) at any time and for any reason. For example, restrictions may be
necessary to protect Owners from adverse impacts on portfolio management of
large and/or numerous transfers by market timers or others. Transamerica has
determined that the movement of significant Sub-Account values from one
Sub-Account to another may prevent the underlying Portfolio from taking
advantage of investment opportunities because the Portfolio must maintain a
significant cash position in order to handle redemptions. Such movement may also
cause a substantial increase in Portfolio transaction costs which must be
indirectly borne by Owners. Therefore, Transamerica reserves the right to
require that all transfer requests be made by the Owner and not by a third party
holding a power of attorney and to require that each transfer request be made by
a separate communication to Transamerica. Transamerica also reserves the right
to request that each transfer request be submitted in writing and be manually
signed by the Owner or Owners; facsimile transfer requests may not be allowed.
Dollar Cost Averaging
Prior to the Annuity Date, the Owner may have amounts transferred
automatically from either (but not both) of the Money Market or Quality Bond
Sub-Accounts to any of the other Sub-Accounts on a monthly basis by giving
Written Notice to the Service Center. The written notice must specify: 1) the
Sub-Account from which the transfers are to be made; 2) the amount of each
monthly transfer; and 3) the Sub-Account(s) to receive the transfers. The
transfers will begin on the tenth day or, if not a Valuation Day, the Valuation
Date following the tenth day, of the month following receipt of Written Notice,
provided that Dollar Cost Averaging transfers will not commence until the later
of (a) 30 days after the Policy Date, or (b) the end of the Free Look Period.
Transamerica may, upon written notice to the Owner, change the day of the month
on which transfers are made. Transfers will continue for twelve consecutive
months unless terminated by the Owner, or automatically terminated by
Transamerica because there are insufficient funds in the applicable Sub-Account
or for other reasons as set forth in the Policy. The Owner may request that
monthly transfers be continued for an additional twelve months by giving Written
Notice to the Service Center within 30 days prior to the last monthly transfer.
If no written request to continue the monthly transfers is made by the Owner,
this option will terminate automatically with the twelfth transfer.
In order to be eligible for Dollar Cost Averaging, the Owner must meet
the following conditions: (1) the value of the selected Sub-Account (from which
the transfers are made) must be at least $5,000; (2) the minimum amount that can
be transferred out of the selected Sub-Account is $250 per month and the maximum
that can be transferred is one-twelfth of the Sub-Account; and (3) the minimum
amount transferred into any other Sub-Account is the greater of $250 or 10% of
the amount being transferred. Dollar Cost Averaging transfers can not be made
from a Sub-Account from which Systematic Withdrawals or Automatic Payouts are
being made.
There is no charge for the Dollar Cost Averaging Service and transfers
due to Dollar Cost Averaging
will not count toward the number of transfers without charge nor the limit of 18
transfers per Policy Year.
After the Annuity Date
If a Variable Annuity Payout Option is elected, the Owner may
transfer Variable Account amounts after the Annuity Date by submitting a request
to the Service Center, in a form and manner acceptable to Transamerica, subject
to the following provisions: (1) transfers after the Annuity Date may be made no
more than four times during any Annuity Year; and (2) the minimum amount
transferred from one Sub-Account to another is the amount supporting a current
$75 monthly payment.
Transfers among Sub-Accounts during the Annuity Period will be
processed based on the formula outlined in the Statement of Additional
Information.
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CASH WITHDRAWALS
Withdrawals
The Owner may withdraw all or part of the Cash Surrender Value for a
Policy at any time during the life of the Annuitant and prior to the Annuity
Date by giving a written request to the Service Center and subject to the rules
below. Federal or state laws, rules or regulations may also apply. The amount
payable to the Owner if the Policy is surrendered on or before the Annuity Date
is the Cash Surrender Value which is equal to the Policy Value, less any Policy
Fee, less any applicable Contingent Deferred Sales Load and less any applicable
premium taxes.
No withdrawals may be made after the Annuity Date. No partial
withdrawals will be permitted while the Systematic Withdrawal Option is in
effect. Partial withdrawals must be at least $500.
A full surrender will result in a cash withdrawal payment equal to the
Cash Surrender Value at the end of the Valuation Period during which the request
is received along with all completed forms. Any applicable Contingent Deferred
Sales Load will be deducted from the amount paid.
In the case of a partial withdrawal, the Owner may instruct the Service
Center as to the amounts to be withdrawn from each Sub-Account. If the Owner
does not specify the Sub-Account(s) from which the withdrawal is to be made, the
withdrawal will be taken pro rata from all Sub-Accounts with current values. If
the requested withdrawal reduces the value of the Sub-Account from which the
withdrawal was made to less than $1,000, Transamerica reserves the right to
transfer the remaining value of that Sub-Account pro rata among the other Active
Sub-Accounts with values equal to or greater than $1,000. If no such
Sub-Accounts exist, such transfer will be made to the Money Market Sub-Account.
The Owner will be notified in writing of any such transfer.
A partial withdrawal will not be processed if it would reduce the
Policy Value to less than $2,000. In that case, the Owner will be notified that
he or she will have 10 days from the date notice is mailed to: (a) withdraw a
lesser amount (subject to the $500 minimum), leaving a Policy Value of at least
$2,000; or (b) surrender the Policy for its Cash Surrender Value. (Amounts
payable will be determined as of the end of the Valuation Period during which
the subsequent instructions are received.) If, after the expiration of the
10-day period, no written election is received from the Owner, the withdrawal
request will be considered null and void, and no withdrawal will be processed.
The Policy Fee will be deducted from a full surrender before the
application of any Contingent Deferred Sales Load (see "Charges and Deductions"
page 30). Withdrawals will be allocated on a first-in, first-out basis from
Premiums, and then from earnings (for purposes of calculating the Contingent
Deferred Sales Load).
Withdrawals may be taxable transactions. The Code requires Transamerica
to withhold federal income tax from withdrawals. However, generally an Owner
will be entitled to elect, in writing, not to have tax withholding apply.
Withholding applies to the portion of the withdrawal which is includible in
income and subject to federal income tax. The federal income tax withholding
rate for partial withdrawals and full surrenders is 10%, or 20% in the case of
certain qualified plans, of the taxable amount of the withdrawal. Withholding
applies only if the taxable amount of the withdrawal is at least $200. Moreover,
the Code provides that a 10% penalty tax may be imposed on the taxable portions
of distributions for certain early withdrawals. (See "Federal Tax Matters" page
36.) In addition, under New York law the Owner may request Transamerica to
withhold New York income tax from withdrawals.
Withdrawal (including surrender) requests generally will be processed
as of the end of the Valuation Period during which the request, including all
completed forms, is received. Payment of any cash withdrawal or lump sum death
benefit due from the Variable Account will occur within seven days from the date
the request is received, except that Transamerica may postpone such payment if:
(1) the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted; or (2) an
emergency exists as defined by the Commission, or the Commission requires that
trading be restricted; or (3) the Commission permits a delay for the protection
of Owners. The withdrawal request will be effective when all appropriate
withdrawal request forms are received. Payments of any amounts derived from
Premiums paid by check may be delayed until the check has cleared the Owner's
bank.
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SINCE THE OWNER ASSUMES THE INVESTMENT RISK AND BECAUSE CERTAIN
WITHDRAWALS ARE SUBJECT TO A CONTINGENT DEFERRED SALES LOAD, THE TOTAL AMOUNT
PAID UPON SURRENDER OF THE POLICY (TAKING INTO ACCOUNT ANY PRIOR WITHDRAWALS)
MAY BE MORE OR LESS THAN THE TOTAL PREMIUMS PAID.
After a withdrawal of the total Cash Surrender Value, or at any time
that the Policy Value is zero, all rights of the Owner will terminate.
Since the Qualified Policies offered by the Prospectus will be issued
in connection with retirement plans which meet the requirements of Section
408(b) of the Code, reference should be made to the terms of the particular
retirement plans for any additional limitations or restrictions on cash
withdrawals.
An Owner may elect, under the Systematic Withdrawal Option or Automatic
Payout Option (but not both),
to withdraw certain amounts on a periodic basis from the Sub-Accounts prior to
the Annuity Date.
Systematic Withdrawal Option
Prior to the Annuity Date, the Owner, by giving Written Notice to the
Service Center, may elect to have withdrawals automatically made from one or
more Sub-Account(s) on a monthly basis. (Other distribution modes may be
permitted.) The withdrawals will commence on the fourth day of the month
following receipt of Written Notice, except that they will not commence sooner
than the later of (a) 30 days after the Policy Date or (b) the end of the Free
Look Period. Upon written notice to the Owners, Transamerica may change the day
of the month on which withdrawals are made under this option. Withdrawals will
be from the Sub- Account(s) and in the percentage allocations specified by the
Owner. If no specifications are made, withdrawals will be pro-rata from all
Sub-Account(s) with value. Systematic Withdrawals can not be made from a Sub-
Account from which Dollar Cost Averaging transfers are being made.
To be eligible for the Systematic Withdrawal Option, the Policy Value
must be at least $15,000 at the time of election. The minimum monthly amount
that can be withdrawn is $125. The maximum monthly amount that can be withdrawn
on an annual basis is equal to the sum, as of the date of the first withdrawal,
of (a) 10% of Premiums that are less than seven Policy Years old and (b) 10% of
remaining Premiums that are at least seven Policy Years old.
Systematic withdrawals are not subject to the Contingent Deferred Sales
Load but can be reduced by any applicable premium tax. Systematic withdrawals
may be taxable, subject to withholding, and subject to the 10% penalty tax. (See
"Federal Tax Matters" page 36.)
The withdrawals will continue unless terminated by the Owner or
automatically terminated by Transamerica as set forth in the Policy. If this
option is terminated it may not be elected again until the next Policy
Anniversary. Partial withdrawals can not be made while the Systematic Withdrawal
Option is in effect. A partial withdrawal while this option is in effect will
automatically terminate the Systematic Withdrawal Option and the full amount may
be subject to a Contingent Deferred Sales Load.
Transamerica reserves the right to impose an annual fee of an amount
not to exceed $25 for administrative expenses associated with processing the
systematic withdrawals. This fee, which is currently waived, will be deducted
from each systematic withdrawal in equal installments during a Policy Year.
Automatic Payout Option ("APO")
Prior to the Annuity Date, for Qualified Policies, the Owner may
elect the Automatic Payout Option (APO) to satisfy minimum distribution
requirements under Section 408(b)(3) of the Code. This may be elected no earlier
than six months prior to the calendar year in which the Owner attains age 70
1/2, but payments may not begin earlier than January of such calendar year.
Additionally, APO withdrawals may not begin before the later of (a) 30 days
after the Policy Date or (b) the end of the Free Look Period. APO may be elected
in any calendar month, but no later than the month in which the Owner attains
age 84.
Withdrawals will be from the Sub-Account(s) and in the percentage
allocations specified by the Owner.
If no specifications are made, withdrawals will be pro-rata from all
Sub-Account(s) with value. Withdrawals can
not be made from a Sub-Account from which Dollar Cost Averaging transfers are
being made.
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Payments will be made on the seventh day of the month or, if not a
Valuation Day, the following Valuation Day, as applicable, and will continue
unless terminated by the Owner or automatically terminated by Transamerica as
set forth in the Policy. Once terminated, APO may not be elected again.
If only APO withdrawals are made, no Contingent Deferred Sales Load
will apply. If a partial withdrawal is taken, a Contingent Deferred Sales Load
will be applied to both the APO and partial withdrawals above the free
withdrawal amount. (See "Contingent Deferred Sales Load" page 30.)
To be eligible for this APO, the following conditions must be met: (1)
the Policy Value must be at least $15,000 at the time of election; (2) the
annual withdrawal amount is the larger of the required minimum distribution
under Code Section 408(b)(3) or $500; and (3) the minimum amount per payment (if
not annual) must be at least $150.
APO allows the required minimum distribution to be paid in equal
installments, either monthly, quarterly, or annually, from the Variable Account.
If there are insufficient funds in the Variable Account to make a withdrawal, or
for other reasons as set forth in the Policy, this option will terminate.
DEATH BENEFIT
If the Owner or Annuitant dies before the Annuity Date, a death benefit
is payable. If the deceased Owner or Annuitant, as applicable, had not attained
their 85th birthday, the death benefit will be the greatest of (a) the Policy
Value, (b) all Premiums paid less all withdrawals and any applicable premium
taxes or (c) the greatest Policy Anniversary Value prior to the earliest of the
Annuitant's or Owner's 75th birthday increased by all Premiums paid since that
Policy Anniversary less all withdrawals and any applicable premium taxes since
that Policy Anniversary. If the deceased Owner or Annuitant, as applicable, had
attained age 85, the death benefit will be equal to Policy Value. The Death
Benefit will be determined as of the Valuation Period during which the later of
(a) Proof of Death of the Owner or Annuitant is received by the Service Center
or (b) a Written Notice of the method of settlement elected by the Beneficiary
is received at the Service Center. If no settlement method is elected, the death
benefit will be calculated and paid as of a date no later than one year after
the date of death. No Contingent Deferred Sales Load will apply. Until the death
benefit is paid, the Policy Value remains in the Variable Account and fluctuates
with investment performance of the applicable Portfolio(s). Accordingly, the
amount of the death benefit depends on the Policy Value at the time the death
benefit is paid. Payment of Death Benefit
The death benefit is generally payable upon receipt of Proof of Death
of the Annuitant or Owner. Upon receipt of this proof and an election of a
method of settlement, the death benefit generally will be paid within seven
days, or as soon thereafter as Transamerica has sufficient information to make
the payment. The death benefit may be paid in a lump sum cash benefit or,
subject to any limitations under any state or federal law, rule, or regulation,
under one of the Annuity Forms unless a settlement agreement is effective under
the Policy preventing such election. If no settlement method is elected within
one year of the date of death, the death benefit will be paid in a lump sum. The
payment of the death benefit may be subject to certain distribution requirements
under the federal income tax laws. (See "Federal Tax Matters" page 36.)
Designation of Beneficiaries
The Owner may select one or more Beneficiaries and name them in the
application. If the Owner selects more than one beneficiary, unless otherwise
indicated by the Owner they will share equally in any death benefits payable in
the event of the Annuitant's death before the Annuity Date if there is no
Contingent Annuitant, or the Owner's death if there is no Joint Owner. Different
Beneficiaries may be named with respect to the Annuitant's death (Annuitant's
Beneficiary) and the Owner's death (Owner's Beneficiary). Before the Annuitant's
death, the Owner may change the Beneficiary by notice to the Service Center in a
form and manner acceptable to Transamerica. The Owner may also make the
designation of Beneficiary irrevocable by sending notice to and obtaining
approval from the Service Center. Irrevocable Beneficiaries may only be changed
with the written consent of the designated Irrevocable Beneficiaries, except to
the extent required by law.
The interest of any Beneficiary who dies before the Owner or Annuitant
will terminate at the death of the Beneficiary. The interest of any Beneficiary
who dies at the time of, or within 30 days after, the death of the
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Owner or Annuitant will also terminate if no benefits have been paid unless the
Policy has been endorsed to provide otherwise. The benefits will then be paid as
though the Beneficiary had died before the Owner or Annuitant. If the interests
of all designated Beneficiaries have terminated, any benefits payable will be
paid to the Owner's estate.
Transamerica may rely on an affidavit by any responsible person in
determining the identity or non-existence of any Beneficiary not identified by
name.
Death of Annuitant Prior to the Annuity Date
If the Annuitant dies prior to the Annuity Date and the Annuitant is
not the Owner and there is no Contingent Annuitant, a death benefit under the
Policy relating to that Annuitant will be paid to the Annuitant's Beneficiary.
If there is a Contingent Annuitant, then the Contingent Annuitant will become
the Annuitant.
Death of Owner Prior to the Annuity Date
If an Owner dies before the Annuity Date, a death benefit will be
paid to the Owner's Beneficiary. If the Owner's Beneficiary is the deceased
Owner's spouse, then the spouse may elect to treat the Policy as his or her own.
The payment of the death benefit may be subject to certain distribution
requirements under the federal income tax laws. (See "Federal Tax Matters" page
36.)
Death of Annuitant or Owner After the Annuity Date
If the Annuitant or an Owner dies after the annuity starts, the
remaining undistributed portion, if any, of the Policy will be distributed at
least as rapidly as under the method of distribution being used as of the date
of such death. Under some Annuity Forms, there will be no death benefit.
CHARGES AND DEDUCTIONS
No deductions are made from Premiums except for any applicable
premium taxes. Therefore, the full amount, less any premium taxes, of the
Premiums are invested in one or more of the Sub-Accounts of the Variable
Account.
As more fully described below, charges under the Policy are assessed in
three ways: (1) as deductions for the Policy (or Annuity) Fees, any Transfer
Fees, any Systematic Withdrawal Option fees and, if applicable, for premium
taxes; (2) as charges against the assets of the Variable Account for the
assumption of mortality and expense risks and administrative expenses; and (3)
as Contingent Deferred Sales Loads. In addition, certain deductions are made
from the assets of the Funds for investment management fees and expenses. These
fees and expenses are described in the Funds' prospectuses and their statements
of additional information. Contingent Deferred Sales Load
No deduction for sales charges is made from Premiums (although
premium tax may be deducted). However, a Contingent Deferred Sales Load of up to
6% of Premiums paid may be imposed on certain withdrawals or surrenders (and
possibly on certain annuitizations) to partially cover certain expenses incurred
by Transamerica relating to the sale of the Policies, including commissions paid
to salespersons, the costs of preparation of sales literature and other
promotional costs and acquisition expenses.
The Contingent Deferred Sales Load percentage varies according to the
number of Policy Years between the Policy Year in which a Net Premium was
credited to the Policy and the Policy Year in which the withdrawal is made. The
amount of the Contingent Deferred Sales Load is determined by multiplying the
amount withdrawn subject to the Contingent Deferred Sales Load by the Contingent
Deferred Sales Load percentage in accordance with the following table.
Number of
Policy Years
Since Receipt of Contingent Deferred Sales Load
Premium As a Percentage of Premium
Less than one year 6%
1 year but less than 2 years 6%
2 years but less than 3 years 5%
3 years but less than 4 years 5%
4 years but less than 5 years 4%
5 years but less than 6 years 4%
6 years but less than 7 years 2%
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7 or more years 0%
In no event shall the aggregate Contingent Deferred Sales Load assessed
against the Policy exceed 6% of the aggregate Premiums paid to a Policy.
Any Premiums that have been held by Transamerica for at least seven
Policy Years and not previously withdrawn may be withdrawn free of any
Contingent Deferred Sales Load. In addition, any portion of a free withdrawal
amount may be withdrawn once each year after the first complete Policy Year
without imposition of any Contingent Deferred Sales Load. The free withdrawal
amount is only available for the first withdrawal in each Policy Year, and is
equal to the greater of (a) the accumulated earnings not previously withdrawn or
(b) 10% of Premiums held at least one but less than seven Policy Years prior to
the day of withdrawal,not adjusted for any prior withdrawals deemed to be made
from such Premiums. Withdrawals will be made first from earnings and then from
Premiums on a first in/first out basis. After the first free withdrawal in a
Policy Year, free withdrawals can be made only from available earnings.
No Contingent Deferred Sales Load will be charged on the 10% free
withdrawal amount if surrender of the Policy occurs in the second or subsequent
Policy Year for a Premium and the Owner was eligible to withdraw the amount
without charge but had not made such a withdrawal during the Policy Year in
which the date of surrender occurs. If the 10% free withdrawal amount is not
withdrawn or paid out during a Policy Year, it does not carry over to the next
Policy Year. In addition, no Contingent Deferred Sales Load is assessed: upon
annuitization to an option involving life contingencies on or after the third
Policy Anniversary; on distributions resulting from the death of the Owner or
Annuitant before Annuity Date; upon transfers of Policy Value among the
Sub-Accounts under the Systematic Withdrawal Option; or, in some circumstances,
under the Automatic Payout Option. Any applicable Contingent Deferred Sales Load
will be deducted from the amount requested for both partial withdrawals and full
surrenders. Administrative Charges
At the end of each Policy Year before the Annuity Date, Transamerica
deducts an annual Policy Fee as partial compensation for expenses relating to
the issue and maintenance of the Policy and the Variable Account. The annual
Policy Fee is equal to the lesser of $30 or 2% of the Policy Value. No Policy
Fee will be deducted for a Policy Year if the Policy Value exceeds $50,000 on
the last business day of the Policy Year or as of the date the Policy is
surrendered. The Policy Fee may be changed upon 30 days advance written notice,
subject to the prior approval of the New York State Insurance Department but in
no event may it exceed the lesser of $60 or 2% of the Policy Value. Such
increases in the Policy Fee will apply only to future deductions after the
effective date of the change. If the Policy is surrendered on other than the end
of a Policy Year, the Policy Fee will be deducted in full at the time of such
surrender. The Policy Fee will be deducted on a pro rata basis from each
Sub-Account in which the Policy is invested at the time of such deduction.
After the Annuity Date, an annual Annuity Fee of $30 will be deducted
in equal amounts from each Variable Annuity Payment made during the year ($2.50
each month if monthly payments). This fee will not be changed. No Annuity Fee
will be deducted from Fixed Annuity Payments.
Transamerica also makes a deduction (the Administrative Expense Charge)
from the Variable Account at the end of each Valuation Period (both before and
after the Annuity Date) at an effective current annual rate of 0.15% of assets
held in each Sub-Account to reimburse Transamerica for those administrative
expenses attributable to the Policies and the Variable Account which exceed the
revenues received from the Policy Fee, any Transfer Fee, and any fee imposed for
Systematic Withdrawals. Transamerica has the ability to increase or decrease
this charge, but the charge is guaranteed not to exceed 0.25%. Transamerica will
provide 30 days written notice of any change in fees. Transamerica believes that
the Administrative Expense Charge and Policy Fee have been initially set (and
will continue to be set) at a level that will recover no more than the
anticipated and estimated costs associated with administering the Policies and
Variable Account. The administrative charges do not bear any relationship to the
actual administrative costs of a particular Policy. Transamerica does not expect
to make a profit from the Policy Fee or the Administrative Expense Charge. The
Administrative Expense Charge is reflected in the Variable Accumulation or
Variable Annuity Unit Values for each Sub- Account. Mortality and Expense Risk
Charge
Transamerica imposes a charge called the Mortality and Expense Risk
Charge to compensate it for bearing certain mortality and expense risks under
the Policies. For assuming these risks, Transamerica makes a daily charge equal
to 0.003403% corresponding to an effective annual rate of 1.25% of the value of
the net assets in the Variable Account. This charge is imposed before the
Annuity Date and if an Annuity Purchase Amount is applied to a Variable Payment
Option, also after the Annuity Date. The approximate portion of this charge
estimated to be attributable to mortality risks is 0.65%; the approximate
portion of this charge estimated to be attributable to expense risks is 0.60%.
Transamerica guarantees that this charge of 1.25% will never increase.
The Mortality and Expense Risk Charge is reflected in the Variable
Accumulation or Variable Annuity Unit Values for each Sub-Account.
Variable Accumulated Values and Variable Annuity Payments are not
affected by changes in actual mortality experience incurred by Transamerica. The
mortality risks assumed by Transamerica arise from its contractual obligations
to make Annuity Payments (determined in accordance with the annuity tables and
other provisions contained in the Policy) and to pay death benefits prior to the
Annuity Date. Thus Owners are assured that neither the Annuitant's own longevity
nor an unanticipated improvement in general life expectancy will adversely
affect the Annuity Payments under the Policy.
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Transamerica also bears substantial risk in connection with the death
benefit before the Annuity Date, since it will pay a death benefit that may be
greater than the Policy Value. In this way, Transamerica bears the risk of
unfavorable experience in the Sub-Accounts.
The expense risk assumed by Transamerica is the risk that
Transamerica's actual expenses in administering the Policy and the Variable
Account will exceed the amount recovered through the Administrative Expense
Charge, Policy Fees, Transfer Fees and any fees imposed for Systematic
Withdrawals.
If the Mortality and Expense Risk Charge is insufficient to cover
actual costs and risks assumed, the loss will fall on Transamerica. Conversely,
if this charge is more than sufficient, any excess will be profit to
Transamerica. Currently, Transamerica expects a profit from this charge.
Transamerica anticipates that the Contingent Deferred Sales Load will
not generate sufficient funds to pay the cost of distributing the Policies. To
the extent that the Contingent Deferred Sales Load is insufficient to cover the
actual cost of Policy distribution, the deficiency will be met from
Transamerica's general corporate assets which may include amounts, if any,
derived from the Mortality and Expense Risk Charge. Premium Taxes
Currently, New York has no premium tax or retaliatory premium tax.
If New York imposes these taxes
in the future, or if the Owner is or becomes a resident of a state where such
taxes apply, Transamerica will
deduct applicable premium taxes, including any retaliatory taxes, paid with
respect to a particular Policy from the
Premiums, from amounts withdrawn, or from amounts applied on the Annuity Date.
Transfer Fee
Transamerica currently does not charge for transfers between
Sub-Accounts. However, Transamerica may
impose a fee for each transfer in excess of the first twelve in a single
Policy Year. Transamerica will deduct the
charge from the amount transferred. This fee would be the lesser of $10 or 2%
of the amount
transferred and would be used to help cover Transamerica's costs of processing
transfers.
Systematic Withdrawal Option
Transamerica reserves the right to impose an annual fee of an amount
not to exceed $25 for
administrative expenses associated with processing systematic withdrawals. This
fee, which is currently waived,
will be deducted from each systematic withdrawal in equal installments during a
Policy Year.
Taxes
Under present laws, Transamerica will incur state or local taxes (in
addition to the premium taxes described above) in several states. No charges are
currently made for taxes other than state premium taxes. However, Transamerica
reserves the right to deduct charges in the future for federal, state and local
taxes or the economic burden resulting from the application of any tax laws that
Transamerica determines to be attributable to the Policies. Portfolio Expenses
The value of the assets in the Variable Account reflects the value of
Portfolio shares and therefore the fees and expenses paid by each Portfolio. A
complete description of the fees, expenses, and deductions from the Portfolios
are found in the Funds' prospectuses. (See "The Funds" page 19.)
ANNUITY PAYMENTS
Annuity Date
Initially, the Annuity Date is selected by the Owner at the time the
Initial Premium is paid. Thereafter, the Annuity Date may be changed from time
to time by the Owner by giving notice to the Service Center provided that notice
of each change is received by the Service Center at least thirty (30) days prior
to the then-current Annuity Date. The Annuity Date must not be earlier than the
third Policy Anniversary. The latest Annuity Date which may be elected is the
first day of the calendar month immediately preceding the month of the
Annuitant's 85th birthday.
The Annuity Date must be the first day of a calendar month. The first
Annuity Payment will be on the
first day of the month immediately following the Annuity Date.
Annuity Payment
The Annuity Date is the date that the Annuity Purchase Amount is
applied to provide the Annuity Payments under the Policy under the selected
Annuity Form and Payment Option, unless the entire Policy Value has been
withdrawn or the death benefit has been paid to the Beneficiary prior to that
date. The Annuity Purchase Amount is the Policy Value, less any applicable
Contingent Deferred Sales Load and less any applicable premium taxes. Any
Contingent Deferred Sales Load will be waived if values are applied to an
Annuity Form involving life contingencies on or after the third Policy
Anniversary.
If the amount of the monthly Annuity Payment from any of the Payment
Options selected by the Owner would result in a monthly Annuity Payment of less
than $20, or if the Annuity Purchase Amount is less than $2,000, Transamerica
reserves the right to offer a less frequent mode of payment or pay the Policy
Value in a cash payment. Monthly Annuity Payments from the Variable Annuity
Payment Option will further be subject to a minimum monthly annuity amount of
$50 from each Sub-Account of the Variable Account from which such payments are
made.
The Owner may choose from the Annuity Forms below. Transamerica may
consent to other plans of payment before the Annuity Date. For Annuity Forms
involving life income, the actual age and/or sex of the Annuitant, or a Joint or
Contingent Annuitant will affect the amount of each payment. Sex-distinct rates
generally are not allowed under certain Qualified Policies. Transamerica
reserves the right to ask for satisfactory proof of
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the Annuitant's (or Joint or Contingent Annuitant's) age. Transamerica may delay
Annuity Payments until satisfactory proof is received. Since payments to older
Annuitants are expected to be fewer in number, the amount of each Annuity
Payment under a selected Annuity Form shall be greater for older Annuitants than
for younger Annuitants.
The Owner may choose from the two Annuity Payment Options described
below. The Annuity Date and Annuity Forms available for Qualified Policies may
also be controlled by endorsements, the plan or applicable law.
A portion or the entire amount of the Annuity Payments may be taxable
as ordinary income. If, at the time the Annuity Payments begin, Transamerica has
not received a proper written election not to have federal income taxes
withheld, Transamerica must by law withhold such taxes from the taxable portion
of such annuity payments and remit that amount to the federal government. State
income tax withholding may also apply. (See "Federal Tax Matters" page 36.)
Election of Annuity Forms and Payment Options
The Annuity Form and Payment Option for each Policy is set as a 120
month period certain and life Annuity Form, under the Variable Payment Option.
Before the Annuity Date, and while the Annuitant is living, the Owner
may, by Written Request, change the Annuity Form or Annuity Payment Option or
may request payment of the Cash Surrender Value for the Policy. The request for
change of the Annuity Date or Annuity Payment Option must be received by the
Service Center at least 30 days prior to the Annuity Date.
In the event that an Annuity Form and Payment Option are not selected
at least 30 days before the
Annuity Date, Transamerica will make Variable Annuity Payments in accordance
with the 120 month period
certain and life Annuity Form and the applicable provisions of the Policy.
Annuity Payment Options
The Annuity Forms may be paid under Fixed or Variable Annuity Payment
Options. Under the Fixed Annuity Payment Option, the amount of each payment will
be determined on the Annuity Date and will not subsequently be affected by the
investment performance of the Sub-Accounts. Under the Variable Annuity Payment
Option, the Annuity Payments, after the first Annuity Payment, will reflect the
investment experience of the Sub-Account or Sub- Accounts chosen by the Owner.
Owners may elect a Fixed Annuity, a Variable Annuity, or a combination
of both (in 25% increments of the Annuity Purchase Amount). If the Owner elects
a combination, he or she must specify what part of the Annuity Purchase Amount
is to be applied to the Fixed and Variable Payment Options. Unless specified
otherwise, the applied Annuity Purchase Amount will be used to provide a
Variable Annuity. In this event, the initial allocation of Variable Annuity
Units for the Variable Sub-Accounts will be in proportion to the Policy's value
in the Sub-Accounts on the Annuity Date. Fixed Annuity Payment Option
A Fixed Annuity provides for Annuity Payments which will remain
constant pursuant to the terms of the Annuity Form elected. If a Fixed Annuity
is selected, the portion of the Annuity Purchase Amount used to provide the
Fixed Annuity will be transferred to the general account assets of Transamerica,
and the amount of Annuity Payments will be established by the fixed annuity
provisions selected and the age and sex (if sex-distinct rates are allowed by
law) of the Annuitant and will not reflect investment experience after the
Annuity Date. The Fixed Annuity Payment amounts are determined by applying the
Annuity Purchase Rate specified in the Policy to the portion of the Annuity
Purchase Amount applied to the Fixed Annuity Option by the Owner. Payments may
vary after the death of the Annuitant under some Annuity Options; the amounts of
these variances are fixed on the Annuity Date. Variable Annuity Payment Option
A Variable Annuity provides for payments that vary in dollar amount,
based on the investment performance of the selected Sub-Account(s) of the
Variable Account. The Variable Annuity Purchase Rate Tables in the Policy
reflect an assumed annual interest rate of 4%, so if the actual net investment
performance of the Sub-Account(s) is less than this rate, then the dollar amount
of the actual Annuity Payments will decrease. If the actual net investment
performance of the Sub-Account(s) is higher than this rate, then the dollar
amount of the actual Annuity Payments will increase. If the net investment
performance exactly equals the 4% rate, then the dollar amount of the actual
Annuity Payments will remain constant.
Variable Annuity Payments will be based on the Sub-Accounts selected by
the Owner, and on the allocations among the Sub-Accounts.
For further details as to the determination of Variable Annuity
Payments, see the Statement of Additional
Information.
Annuity Forms
The Owner may choose any of the Annuity Forms described below.
Subject to approval by Transamerica, the Owner may select any other Annuity
Forms then being offered by Transamerica.
(1) Life Annuity. Payments start on the first day of the month
immediately following the Annuity Date, if the Annuitant is living. Payments end
with the payment due just before the Annuitant's death. There is no death
benefit under this form. It is possible that only one payment will be made under
this form if the Annuitant dies before the second payment is due; only two
payments will be made if the Annuitant dies before the third payment is due, and
so forth.
(2) Life and Contingent Annuity. Payments start on the first day of the
month immediately following the
Annuity Date, if the Annuitant is living. Payments will continue for as long as
the Annuitant lives. After the
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Annuitant dies, payments will be made to the Contingent Annuitant, if living,
for as long as the Contingent Annuitant lives. The continued payments can be in
the same amount as the original payments, or in an amount equal to one-half or
two-thirds thereof. Payments will end with the payment due just before the death
of the Contingent Annuitant. There is no death benefit after both die. If the
Contingent Annuitant does not survive the Annuitant, payments will end with the
payment due just before the death of the Annuitant. It is possible that only one
payment or very few payments will be made under this form, if the Annuitant and
Contingent Annuitant die shortly after payments begin.
The Written Request for this form must: (a) name the Contingent
Annuitant; and (b) state the percentage of payments for the Contingent
Annuitant. Once Annuity Payments start under this Annuity Form, the person named
as Contingent Annuitant for purposes of being the measuring life, may not be
changed. Transamerica will require proof of age for the Annuitant and for the
Contingent Annuitant before payments start.
(3) Life Annuity With Period Certain. Payments start on the first day
of the month immediately following
the Annuity Date, if the Annuitant is living. Payments will be made for the
longer of: (a) the Annuitant's life: or
(b) the period certain. The period certain may be 120 or 180 or 240 months,
but in no event may it exceed the
life expectancy of the Annuitant.
If the Annuitant dies after all payments have been made for the period
certain, payments will cease with the payment due just before the Annuitant's
death. No benefit will then be payable to the Annuitant's Beneficiary.
If the Annuitant dies during the period certain, the rest of the period
certain payments will be made to the Annuitant's Beneficiary. The Owner may
elect to have the commuted value of these payments paid in a single sum.
Transamerica will determine the commuted value by discounting the rest of the
payments at the then current rate of interest used for commuted values.
If the Owner does not elect to have the commuted value paid in a single
sum after the Annuitant's death, the Owner may designate a Payee to receive any
remaining payments payable if the Annuitant's Beneficiary dies before all of the
payments under the period certain have been made. If the Annuitant's Beneficiary
dies before receiving all of the remaining period certain payments and a
designated Payee does not survive the Annuitant's Beneficiary for at least 30
days, then the remaining payments will be paid to the Owner, if living,
otherwise in a single sum to the Owner's estate.
The Written Request for this form must: (a) state the length of the
period certain; and (b) name the
Annuitant's Beneficiary.
(4) Joint and Survivor Annuity. Payments will be made to the Annuitant,
starting on the first day of the month immediately following the Annuity Date,
if and for as long as the Annuitant and Joint Annuitant are living. After the
Annuitant or Joint Annuitant dies, payments will continue for so long as the
survivor lives. Payments will be made to the survivor for his or her life.
Payments end with the payment due just before the death of the survivor. The
continued payments can be in the same amount as the original payments, or in an
amount equal to one-half or two-thirds thereof. It is possible that only one
payment or very few payments will be made under this form if the Annuitant and
Joint Annuitant both die shortly after payments begin.
The Written Request for this form must: (a) name the Joint Annuitant;
and (b) state the percentage of continued payments for the survivor. Once
payments start under this Annuity Form, the person named as Joint Annuitant, for
the purpose of being the measuring life, may not be changed. Transamerica will
need proof of age for the Joint Annuitant before payments start.
(5) Other Forms of Payment. Benefits can be provided under any other
Annuity Form not described in this section subject to Transamerica's agreement
and any applicable state or federal law or regulation. Requests for any other
Annuity Form must be made in writing to the Service Center at least 30 days
before the Annuity Date.
Once payments start under the Annuity Form and Payment Option selected
by the Owner: (a) no changes can be made in the Annuity Form and Payment Option;
(b) no additional Premium will be accepted under the Policy; and (c) no further
withdrawals will be allowed.
The Owner may, at any time after the Annuity Date by Written Notice to
us at our Service Center, change
the Payee of annuity benefits being provided under the Policy. The effective
date of change in Payee will be the
later of: (a) the date we receive the Written Request for such change; or (b)
the date specified by the Owner. If
the Policy is issued as an IRA, the Owner may not change the Payee on or after
the Annuity Date.
Alternate Fixed Annuity Rates
The amount of any Fixed Annuity Payments will be determined on the
Annuity Date by using either the guaranteed fixed annuity rates or
Transamerica's current single premium fixed annuity rates at the time, whichever
would result in a higher amount of monthly Fixed Annuity Payments.
FEDERAL TAX MATTERS
Introduction
The following discussion is a general description of federal tax
considerations relating to the Policy and is not intended as tax advice. This
discussion is not intended to address the tax consequences resulting from all of
the situations in which a person may be entitled to or may receive a
distribution under the Policy. Any person concerned about these tax implications
should consult a competent tax adviser before initiating any transaction. This
discussion is based upon Transamerica's understanding of the present federal
income tax laws as they are currently interpreted by the Internal Revenue
Service. No representation is made as to the likelihood of the continuation of
the present federal income tax laws or of the current interpretation by the
Internal Revenue Service. Moreover, no attempt has been made to consider any
applicable state or other tax laws.
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The Policy may be purchased on a non-tax qualified basis
("Non-Qualified Policy") or purchased and used in connection with plans
qualifying for favorable tax treatment ("Qualified Policy"). Qualified Policies
are designed for use by individuals solely as plans entitled to special income
tax treatment under section 408 of the Code. The ultimate effect of federal
income taxes on the amounts held under a Policy, on Annuity Payments, and on the
economic benefit to the Owner, the Annuitant, or the Beneficiary may depend on
the type of retirement plan, and on the tax status of the individual concerned.
In addition, certain requirements must be satisfied in purchasing a Qualified
Policy with proceeds from a tax qualified retirement plan and receiving
distributions from a Qualified Policy in order to continue receiving favorable
tax treatment. Therefore, purchasers of Qualified Policies should seek competent
legal and tax advice regarding the suitability of the Policy for their
situation, the applicable requirements, and the tax treatment of the rights and
benefits of the Policy. The following discussion assumes that a Qualified Policy
is purchased with proceeds from and/or contributions under retirement plans that
qualify for the intended special federal income tax treatment.
The following discussion is based on the assumption that the Policy
qualifies as an annuity contract for
federal income tax purposes. The Statement of Additional Information discusses
the requirements for qualifying
as an annuity.
Taxation of Annuities
In General
Section 72 of the Code governs taxation of annuities in general.
Transamerica believes that the Owner who is a natural person generally is not
taxed on increases in the value of a Policy until distribution occurs by
withdrawing all or part of the Policy Value (e.g., withdrawals or Annuity
Payments under the Annuity Option elected). For this purpose, the assignment,
pledge, or agreement to assign or pledge any portion of the Policy Value (and in
the case of a Qualified Policy, any portion of an interest in the plan)
generally will be treated as a distribution. The taxable portion of a
distribution (in the form of a single sum payment or an annuity) is taxable as
ordinary income.
The Owner of any annuity contract who is not a natural person generally
must include in income any increase in the excess of the Policy Value over the
"investment in the contract" (discussed below) during the taxable year. There
are some exceptions to this rule and a prospective Owner that is not a natural
person may wish to discuss these with a competent tax adviser.
The following discussion generally applies to a Policy owned by a
natural person. Withdrawals In the case of a withdrawal under a
Qualified Policy, including withdrawals under the Systematic
Withdrawal Option or the Automatic Payout Option, a ratable portion of the
amount received is taxable, generally based on the ratio of the "investment in
the contract" to the individual's total accrued benefit under the retirement
plan. The "investment in the contract" generally equals the amount of any
non-deductible Premiums paid by or on behalf of any individual. For a Qualified
Policy , the "investment in the contract" can be zero. Special tax rules may be
available for certain distributions from a Qualified Policy.
With respect to Non-Qualified Policies, partial withdrawals, including
withdrawals under the Systematic Withdrawal Option, are generally treated as
taxable income to the extent that the Policy Value immediately before the
withdrawal exceeds the "investment in the contract" at that time. Full
surrenders are treated as taxable income to the extent that the amount received
exceeds the "investment in the contract."
Annuity Payments
Although the tax consequences may vary depending on the Annuity Payment
elected under the Policy, in general, only the portion of the Annuity Payment
that represents the amount by which the Policy Value exceeds the "investment in
the contract" will be taxed; after the "investment in the contract" is
recovered, the full amount of any additional Annuity Payments is taxable. For
Variable Annuity Payments, the taxable portion is generally determined by an
equation that establishes a specific dollar amount of each payment that is not
taxed. The dollar amount is determined by dividing the "investment in the
contract" by the total number of expected periodic payments. However, the entire
distribution will be taxable once the recipient has recovered the dollar amount
of his or her "investment in the contract." For Fixed Annuity Payments, in
general there is no tax on the portion of each payment which represents the same
ratio that the "investment in the contract" bears to the total expected value of
the Annuity Payments for the term of the payments; however, the remainder of
each Annuity Payment is taxable. Once the "investment in the contract" has been
fully recovered, the full amount of any additional Annuity Payments is taxable.
If Annuity Payments cease as a result of an Annuitant's death before full
recovery of the "investment in the contract," consult a competent tax advisor
regarding deductibility of the unrecovered amount.
Penalty Tax
In the case of a distribution pursuant to a Non-Qualified Policy, there
may be imposed a federal income tax penalty equal to 10% of the amount treated
as taxable income. In general, however, there is no penalty tax on
distributions: (1) made on or after the date on which the Owner attains age
591/2; (2) made as a result of death or disability of the Owner; or (3) received
in substantially equal periodic payments as a life annuity or a joint and
survivor annuity for the lives or life expectancies of the Owner and a
"designated beneficiary." Other tax penalties may apply to certain distributions
under a Qualified Policy.
Taxation of Death Benefit Proceeds
Amounts may be distributed from the Policy because of the death of
an Owner or the Annuitant.
Generally such amounts are includible in income as follows: (1) if distributed
in a lump sum,
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they are taxed in the same manner as a full surrender, as described above, or
(2) if distributed under an Annuity Option, they are taxed in the same manner as
Annuity Payments, as described above. For these purposes, the investment in the
Policy is not affected by the Owner's or Annuitant's death. That is, the
investment in the Policy remains the amount of any Premiums paid which were not
excluded from gross income.
Transfers, Assignments, or Exchanges of the Policy
A transfer of ownership of a Policy, the designation of an Annuitant,
Payee, or Beneficiary who is not also the Owner, or the exchange of a Policy may
result in certain tax consequences to the Owner that are not discussed herein.
An Owner contemplating any such designation, transfer, assignment, or exchange
should contact a competent tax adviser with respect to the potential tax effects
of such a transaction.
Multiple Policies
All deferred non-qualified annuity contracts that are issued by
Transamerica (or its affiliates) to the same Owner during any calendar year are
treated as one annuity contract for purposes of determining the amount
includible in gross income under section 72(e) of the Code. In addition, the
Treasury Department has specific authority to issue regulations that prevent the
avoidance of section 72(e) through the serial purchase of annuity contracts or
otherwise. Congress has also indicated that the Treasury Department may have
authority to treat the combination purchase of an immediate annuity contract and
separate deferred annuity contracts as a single annuity contract under its
general authority to prescribe rules as may be necessary to enforce the income
tax laws.
Withholding
Pension and annuity distributions generally are subject to withholding
for the recipient's federal income tax liability at rates that vary according to
the type of distribution and the recipient's tax status. Recipients, however,
generally are provided the opportunity to elect not to have tax withheld from
distributions. (See discussion of this election under "Withdrawals" on page 26.)
Possible Changes in Taxation
In past years, legislation has been proposed that would have
adversely modified the federal taxation of certain annuities. For example, one
such proposal would have changed the tax treatment of non-qualified annuities
that did not have "substantial life contingencies" by taxing income as it is
credited to the annuity. Although as of the date of this prospectus Congress is
not actively considering any legislation regarding the taxation of annuities,
there is always the possibility that the tax treatment of annuities could change
by legislation or other means (such as IRS regulations, revenue rulings,
judicial decisions, etc.). Moreover, it is also possible that any change could
be retroactive (that is, effective prior to the date of the change). Other Tax
Consequences
As noted above, the foregoing discussion of the federal income tax
consequences is not exhaustive and special rules are provided with respect to
other tax situations not discussed in this Prospectus. Further, the federal
income tax consequences discussed herein reflect Transamerica's understanding of
current law and the law may change. Federal gift and estate tax consequences and
state and local estate, inheritance, and other tax consequences of ownership or
receipt of distributions under the Policy depend on the individual circumstances
of each Owner or recipient of the distribution. A competent tax adviser should
be consulted for further information. Individual Retirement Annuities
The Qualified Policy is designed for use with IRA rollovers. Section
408 of the Code permits eligible individuals to contribute to an individual
retirement program known as an Individual Retirement Annuity or Individual
Retirement Account (each hereinafter referred to as an "IRA"). Also,
distributions from certain other types of qualified plans may be "rolled over"
on a tax-deferred basis into an IRA. The sale of a Policy for use with an IRA
may be subject to special disclosure requirements of the Internal Revenue
Service. Purchasers of a Policy for use with IRAs will be provided with
supplemental information required by the Internal Revenue Service or other
appropriate agency. Such purchasers will have the right to revoke their purchase
within 7 days of the earlier of the establishment of the IRA or their purchase.
Various tax penalties may apply to contributions in excess of specified limits,
aggregate distributions in excess of $150,000 annually, distributions that do
not satisfy specified requirements, and other transactions. A Qualified Policy
will be amended as necessary to conform to the requirements of the Code.
Purchasers should seek competent advice as to the suitability of the Policy for
use with IRAs. Restrictions under Qualified Policies
Other restrictions with respect to the election, commencement, or
distribution of benefits may apply under
Qualified Policies.
In General
At the time the Initial Premium is paid, a prospective purchaser must
specify whether he or she is purchasing a Non-Qualified Policy or a Qualified
Policy. If the Initial Premium is derived from an exchange or surrender of
another annuity contract, Transamerica may require that the prospective
purchaser provide information with regard to the federal income tax status of
the previous annuity contract. Transamerica will require that persons purchase
separate Policies if they desire to invest monies qualifying for different
annuity tax treatment under the Code. Each such separate Policy would require
the minimum Initial Premium stated above. Additional Premiums under a Policy
must qualify for the same federal income tax treatment as the Initial Premium
under the Policy; Transamerica will not accept an additional Premium under a
Policy if the federal income tax treatment of such Premium would be different
from that of the Initial Premium.
DISTRIBUTION OF THE POLICY
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Transamerica Securities Sales Corporation ("TSSC") is the principal
underwriter of the Policies. TSSC may also serve as an underwriter and
distributor of other policies issued through the Variable Account and certain
other separate accounts of Transamerica and any affiliates of Transamerica. TSSC
is a wholly-owned subsidiary of Transamerica Insurance Corporation of
California, which is a subsidiary of Transamerica Corporation. TSSC is
registered with the Commission as a broker/dealer and is a member of the
National Association of Securities Dealers, Inc. ("NASD"). Its principal offices
are located at 1150 South Olive, Los Angeles, California 90015. Transamerica
pays TSSC for acting as the principal underwriter under a distribution
agreement.
TSSC has entered into sales agreements with other broker/dealers to
solicit applications for the Policies through registered representatives who are
licensed to sell securities and variable insurance products. These agreements
provide that applications for the Policies may be solicited by registered
representatives of the broker/dealers appointed by Transamerica to sell its
variable life insurance and variable annuities. These broker/dealers are
registered with the Commission and are members of the NASD. The registered
representatives are authorized under applicable state regulations to sell
variable life insurance and variable annuities.
Under the agreements, applications for Policies will be sold by
broker/dealers which may receive compensation of up to 6.25% of any Initial and
additional Premiums paid. Additional amounts may be paid in certain
circumstances.
Transamerica Financial Resources, Inc. ("TFR") also is an underwriter
and distributor of the Policies. TFR
is a wholly-owned subsidiary of Transamerica Insurance Corporation of California
and is registered with the
Commission and the NASD as a broker/dealer.
LEGAL PROCEEDINGS
There is no pending material legal proceeding affecting the Variable
Account. Transamerica is involved in various kinds of routine litigation which,
in management's judgment, are not of material importance to Transamerica's
assets or to the Variable Account.
LEGAL MATTERS
Advice regarding certain legal matters concerning the federal
securities laws applicable to the issue and sale of the Policies has been
provided by Sutherland, Asbill & Brennan. The organization of Transamerica, its
authority to issue the Policies and the validity of the form of the Policies
have been passed upon by James W.
Dederer General Counsel of Transamerica.
ACCOUNTANTS
The financial statements of Transamerica at December 31, 1995 and
December 31, 1994, and for each of the three years in the period ended December
31, 1995, and the financial statements of the Variable Account at December 31,
1995, have been audited by Ernst & Young LLP, Independent Auditors, as set forth
in their reports appearing in the Statement of Additional Information, and are
included in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
VOTING RIGHTS
To the extent required by applicable law, all Portfolio shares held
in the Variable Account will be voted by Transamerica at regular and special
shareholder meetings of the respective Funds in accordance with instructions
received from persons having voting interests in the corresponding Sub-Account.
If, however, the 1940 Act or any regulation thereunder should be amended, or if
the present interpretation thereof should change, or if Transamerica determines
that it is allowed to vote all Portfolio shares in its own right, Transamerica
may elect to do so.
The person with the voting interest is the Owner. The number of votes
which are available to an Owner will be calculated separately for each
Sub-Account of the Variable Account. Before the Annuity Date, that number will
be determined by applying his or her percentage interest, if any, in a
particular Sub-Account to the total number of votes attributable to that
Sub-Account. The Owner holds a voting interest in each Sub-Account to which the
Policy Value is allocated. After the Annuity Date, the number of votes decreases
as Annuity Payments are made and as the reserves for the Policy decrease.
The number of votes of a Portfolio will be determined as of the date
coincident with the date established by that Portfolio for determining
shareholders eligible to vote at the meeting of the Funds. Voting instructions
will be solicited by written communication prior to such meeting in accordance
with procedures established by the respective Funds.
Shares as to which no timely instructions are received and shares held
by Transamerica as to which Owners have no beneficial interest will be voted in
proportion to the voting instructions which are received with respect to all
Policies participating in the Sub-Account. Voting instructions to abstain on any
item to be voted upon will be applied on a pro rata basis to reduce the votes
eligible to be cast.
Each person or entity having a voting interest in a Sub-Account will
receive proxy material, reports and other material relating to the appropriate
Portfolio.
It should be noted that the Funds are not required to, and do not
intend to, hold annual or other regular meetings of shareholders.
AVAILABLE INFORMATION
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Transamerica has filed a registration statement (the "Registration
Statement") with the Securities and Exchange Commission under the Securities Act
of 1933 relating to the Policy offered by this Prospectus. This Prospectus has
been filed as a part of the Registration Statement and does not contain all of
the information set forth in the Registration Statement and exhibits thereto,
and reference is hereby made to such Registration Statement and exhibits for
further information relating to Transamerica and the Policy. Statements
contained in this Prospectus, as to the content of the Policy and other legal
instruments, are summaries. For a complete statement of the terms thereof,
reference is made to the instruments filed as exhibits to the Registration
Statement. The Registration Statement and the exhibits thereto may be inspected
and copied at the office of the Commission, located at 450 Fifth Street, N.W.,
Washington, D.C.
STATEMENT OF ADDITIONAL INFORMATION
A Statement of Additional Information is available which contains
more details concerning the subjects discussed in this Prospectus. The following
is the Table of Contents for that Statement:
TABLE OF CONTENTS Page
THE POLICY......................................................3
DOLLAR COST AVERAGING...........................................3
NET INVESTMENT FACTOR...........................................3
ANNUITY PERIOD..................................................4
Variable Annuity Units and Payments....................4
Variable Annuity Unit Value............................4
Transfers After the Annuity Date.......................4
GENERAL PROVISIONS..............................................4
IRS Required Distributions.............................4
Non-Participating......................................4
Misstatement of Age or Sex.............................4
Proof of Existence and Age.............................5
Assignment.............................................5
Annuity Data...........................................5
Annual Report..........................................5
Incontestability.......................................5
Ownership..............................................5
Entire Contract........................................5
Changes in the Policy..................................5
Protection of Benefits.................................5
Delay of Payments......................................5
Notices and Directions.................................6
CALCULATION OF YIELDS AND TOTAL RETURNS.........................6
Money Market Sub-Account Yield Calculation.............6
Other Sub-Account Yield Calculations...................7
Standard Total Return Calculations.....................7
Hypothetical Performance Data..........................8
Other Performance Data.................................8
HISTORIC PERFORMANCE DATA.......................................8
General Limitations....................................8
Sub-Account Performance Figures........................9
Hypothetical Sub-Account Performance Figures..........10
..................................................
FEDERAL TAX MATTERS............................................12
Taxation of Transamerica..............................13
Tax Status of the Policies............................13
DISTRIBUTION OF THE POLICY.....................................14
SAFEKEEPING OF ACCOUNT ASSETS....................................14
TRANSAMERICA.....................................................14
General Information and History.........................14
STATE REGULATION ................................................15
RECORDS AND REPORTS..............................................15
FINANCIAL STATEMENTS.............................................15
APPENDIX........................................................A-1
Annuity Transfer Formula...............................A-1
- 37 -
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<PAGE>
Appendix A
Example of Variable Accumulation Unit Value Calculations
Suppose the net asset value per share of a Portfolio at the end of the
current Valuation Period is $20.15; at the end of the immediately preceding
Valuation Period it was $20.10; the Valuation Period is one day; and no
dividends or distributions caused the Portfolio to go "ex-dividend" during the
current Valuation Period. $20.15 divided by $20.10 is 1.002488. Subtracting the
one day risk factor for Mortality and Expense Risk Charge and the Administrative
Expense Charge of .003814% (the daily equivalent of the current charge of 1.40%
on an annual basis) gives a Net Investment Factor of 1.002449. If the value of
the Variable Accumulation Unit for the immediately preceding Valuation Period
had been 15.500000, the value for the current Valuation Period would be
15.537966 (15.5 x 1.002449). Example of Variable Annuity Unit Value Calculations
Suppose the circumstances of the first example exist, and the value of
a Variable Annuity Unit for the immediately preceding Valuation Period had been
13.500000. If the first Variable Annuity Payment is determined by using an
annuity payment based on an assumed interest rate of 4% per year, the value of
the Variable Annuity Unit for the current Valuation Period would be 13.531613
(13.5 x 1.002449 (the Net Investment Factor) x 0.999893). 0.999893 is the
factor, for a one day Valuation Period, that neutralizes the assumed rate of
four percent (4%) per year used to establish the Variable Annuity Rates found in
the Contract. Example of Variable Annuity Payment Calculations
Suppose that the Account is currently credited with 3,200.000000
Variable Accumulation Units of a particular Sub-Account.
Also suppose that the Variable Accumulation Unit Value and the Variable
Annuity Unit Value for the particular Sub-Account for the Valuation Period which
ends immediately preceding the first day of the month is 15.500000 and 13.500000
respectively, and that the Variable Annuity Rate for the age and option elected
is $5.73 per $1,000. Then the first Variable Annuity Payment would be:
3.200 x 15.5 x 5.73 divided by 1,000 = $284.21,
and the number of Variable Annuity Units credited for future payments would be:
284.21 divided by 13.5 = 21.052444.
For the second monthly payment, suppose that the Variable Annuity Unit
Value on the 10th day of the
second month is 13.565712. Then the second Variable Annuity Payment would be
$285.59 (21.052444 x
13.565712).
- 1 -
A-1
<PAGE>
Appendix B
The material terms of the Policies issued prior to March 1, 1996, which differ
from Policies issued beginning March 1, 1996, are described below. The pre-March
Policies will be amended by endorsement containing the applicable March 1, 1996,
terms as soon as the endorsement forms are approved by the New York Insurance
Department and Transamerica can administratively endorse the pre-March 1, 1996,
Policies.
For policies issued pre-March 1, 1996, the following terms apply:
Other Charges and Deductions (page 9) and Administrative Charges (page 33)
A Policy Fee of $30 (or 2% of Policy Value, if less) is deducted at the
end of the Policy Year regardless of the Policy Value.
Payments on Death Before the Annuity Date (page 16)
The death benefit payable for a pre-March 1, 1996 Policies is the
greater of (a) the Policy Value or (b) all Premiums paid to the Policy less any
withdrawals and applicable premium tax.
Contingent Deferred Sales Load (page 32)
Any Premiums that have been held by Transamerica for at least seven
Policy Years and not previously withdrawn may be withdrawn free of any
Contingent Deferred Sales Load. In addition, any portion of a free withdrawal
amount equal to 10% of Premiums held at least one but less than seven Policy
Years prior to the day of withdrawal, not adjusted for any withdrawals deemed to
be made from such Premiums, may be withdrawn each year after the first complete
Policy Year without imposition of any CDSL.
- 2 -
A-2
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION FOR
DREYFUS/TRANSAMERICA TRIPLE ADVANTAGE
VARIABLE ANNUITY POLICY
Issued By
First Transamerica Life Insurance Company
The Statement of Additional Information expands upon subjects discussed
in the current Prospectus for the Dreyfus/Transamerica Triple Advantage Variable
Annuity Policy ("Policy") issued by First Transamerica Life Insurance Company.
The Owner may obtain a copy of the Prospectus dated May 1, 1996, as supplemented
from time to time, by writing to First Transamerica Life Insurance Company,
Annuity Service Center, P.O. Box 30757, Los Angeles, California 90030-0757
before June 10, 1996, and at P.O. Box 31728, Charlotte, North Carolina
28231-1728 after June 10, 1996, or by calling 800-258-4261. Terms used in the
current Prospectus for the Policy are incorporated in this Statement. THIS
STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ ONLY
IN CONJUNCTION WITH THE PROSPECTUS FOR THE POLICY.
Dated May 1, 1996
- 3 -
<PAGE>
TABLE OF CONTENTS
Page
THE POLICY (page 23)..............................................3
DOLLAR COST AVERAGING (page 26)...................................3
NET INVESTMENT FACTOR (page 25)...................................3
ANNUITY PERIOD (page 34)..........................................4
Variable Annuity Units and Payments......................4
Variable Annuity Unit Value..............................4
Transfers After the Annuity Date.........................4
GENERAL PROVISIONS................................................4
IRS Required Distributions...............................4
Non-Participating........................................4
Misstatement of Age or Sex...............................4
Proof of Existence and Age...............................5
Assignment...............................................5
Annuity Data.............................................5
Annual Report............................................5
Incontestability.........................................5
Ownership................................................5
Entire Contract..........................................5
Changes in the Policy....................................5
Protection of Benefits...................................5
Delay of Payments........................................5
Notices and Directions...................................6
CALCULATION OF YIELDS AND TOTAL RETURNS (page 17).................6
Money Market Sub-Account Yield Calculation...............6
Other Sub-Account Yield Calculations.....................7
Standard Total Return Calculations.......................7
Hypothetical Performance Data............................8
Other Performance Data...................................8
HISTORIC PERFORMANCE DATA.........................................8
General Limitations......................................8
Sub-Account Performance Figures..........................9
Hypothetical Sub-Account Performance Figures............10
...................................................
FEDERAL TAX MATTERS (page 36)....................................12
Taxation of Transamerica................................13
Tax Status of the Policies..............................13
DISTRIBUTION OF THE POLICY (page 39).............................14
SAFEKEEPING OF ACCOUNT ASSETS (page 19)..........................14
TRANSAMERICA (page 19)...........................................14
General Information and History.........................14
STATE REGULATION (page 19).......................................15
RECORDS AND REPORTS..............................................15
FINANCIAL STATEMENTS.............................................15
APPENDIX........................................................A-1
Annuity Transfer Formula...............................A-1
(Additional page references refer to the current Prospectus.)
- 4 -
A-4
<PAGE>
THE POLICY
As a supplement to the description in the Prospectus, the following
provides additional information about the Policy which may be of
interest to some Owners.
DOLLAR COST AVERAGING
We reserve the right to send written notification to the Owner
as to the options available if termination of Dollar Cost Averaging,
either by the Owner or by Transamerica, results in the value in the
receiving Sub-Account(s) to which monthly transfers were made to be
less than $1,000. The Owner will have 10 days from the date our notice
is mailed to: (a) transfer the value of the Sub-Account(s) to another
Sub-Account with a value equal to or greater than $1,000; or (b)
transfer funds from another Sub-Account into the receiving
Sub-Account(s) to bring the value of that Sub-Account to at least
$1,000; or (c) submit an additional Premium (subject to the $500
minimum) to make the value of the Sub-Account equal to or greater than
$1,000; or (d) transfer the entire value of the receiving
Sub-Account(s) back into the Sub-Account from which the automatic
transfers were made.
If no election, in a form and manner acceptable to
Transamerica, is made by the Owner prior to the end of the 10 day
period, Transamerica reserves the right to transfer the value of the
receiving Sub-Account(s) back into the Sub-Account from which the
automatic transfers were made. Transfers made as a result of (a), (b),
or (d) above will not be counted for purposes of the eighteen allowable
transfers per Policy Year limitation.
NET INVESTMENT FACTOR
For any Sub-Account of the Variable Account, the Net
Investment Factor for a Valuation Period
before the Annuity Date is (a) divided by (b), minus (c) minus (d).
Where (a) is
The net asset value per share held in the Sub-Account, as of
the end of the Valuation Period,
plus or minus
The per-share amount of any dividend or capital gain
distributions if the "exdividend" date occurs in the Valuation Period,
plus or minus
A per-share charge or credit as Transamerica may determine,
as of the end of the Valuation
Period, for taxes.
Where (b) is
The net asset value per share held in the Sub-Account as of
the end of the last prior Valuation
Period.
Where (c) is
The daily charge of 0.003403% (1.25% annually) for the
Mortality and Expense Risk Charge under this Policy times the number of
calendar days in the current Valuation Period. Where (d) is
The daily Administrative Charge, currently 0.000411% (0.15%
annually) times the number of calendar days in the current Valuation
Period. This charge may be increased, but will not exceed 0.000684%
(0.25% annually).
A Valuation Day is defined as any day on which the New York
Stock Exchange is open. We currently expect that there will not be any
days on which the Exchange will be open and our Service Office will be
closed.
ANNUITY PERIOD
The Variable Annuity Options provide for payments that
fluctuate or vary in dollar amount, based on the investment performance
of the selected Variable Account Sub-Account(s).
Variable Annuity Units and Payments
For the first monthly payment, the number of Variable Annuity
Units credited in each Sub-Account will be determined by dividing (a)
the product of the portion of the value to be applied to the
Sub-Account and the Variable Annuity Purchase Rate specified in the
Policy by (b) the value of one Variable Annuity Unit in that
Sub-Account on the Annuity Date. The amount of each subsequent Variable
Annuity Payment equals the product of the number of Variable Annuity
Units in each Sub-Account and the Sub-Account's Variable Annuity Unit
Value as of the tenth day of the month before the payment due date. The
amount of each payment may vary.
Variable Annuity Unit Value
- 5 -
A-5
<PAGE>
The value of a Variable Annuity Unit in a Sub-Account on any
Valuation Day is determined as described below.
The Net Investment Factor for the Valuation Period (for the
appropriate Annuity Payment frequency) just ended is multiplied by the
value of the Variable Annuity Unit for the Sub-Account on the preceding
Valuation Day. The Net Investment Factor after the Annuity Date is
calculated in the same manner as before the Annuity Date and then
multiplied by an interest factor. The interest factor equals (.999893)n
where n is the number of days since the preceding Valuation Day. This
compensates for the 4% interest assumption built into the Variable
Annuity Purchase Rates.
Transfers After the Annuity Date
After the Annuity Date, the Owner may transfer Variable
Annuity Units from one Sub-Account to another, subject to certain
limitations. (See "Transfers" page 25 of the Prospectus.) The dollar
amount of each subsequent monthly Variable Annuity Payment after the
transfer must be determined using the new number of Variable Annuity
Units multiplied by the Sub-Account's Variable Annuity Unit Value on
the tenth day of the month preceding payment.
The formula used to determine a transfer after the Annuity
Date can be found in the Appendix to this Statement of Additional
Information.
GENERAL PROVISIONS
IRS Required Distributions
If any Owner under a Non-Qualified Policy dies before the
entire interest in the Policy is distributed, the value generally must
be distributed to the designated Beneficiary so that the Policy
qualifies as an annuity under the Code. (See "Federal Tax Matters" page
12.)
Non-Participating
The Policies are non-participating. No dividends are payable
and the Policies will not share in the profits or surplus earnings of
Transamerica.
Misstatement of Age or Sex
If the age or sex of the Annuitant or any other measuring life
has been misstated in the application, the Annuity Payments under the
Policy will be whatever the Annuity Purchase Amount applied on the
Annuity Date would purchase on the basis of the correct age or sex of
the Annuitant and/or other measuring life. Any overpayments or
underpayments by Transamerica as a result of any such misstatement may
be respectively charged against or credited to the Annuity Payment or
Annuity Payments to be made after the correction so as to adjust for
such overpayment or underpayment.
Proof of Existence and Age
Before making any payment under the Policy, Transamerica may
require proof of the existence and/or proof of the age of the Annuitant
or any other measuring life, or any other information deemed necessary
in order to provide benefits under the Policy.
Assignment
No assignment of a Policy will be binding on Transamerica
unless made in writing and given to Transamerica at its Service Office.
Transamerica is not responsible for the adequacy of any assignment. The
Owner's rights and the interest of any Annuitant or non-irrevocable
Beneficiary will be subject to the rights of any assignee of record.
Annuity Data
Transamerica will not be liable for obligations which depend
on receiving information from a Payee or measuring life until such
information is received in a satisfactory form.
Annual Report
At least once each Policy Year prior to the Annuity Date, the
Owner will be given a report of the current Policy Value allocated to
each Sub-Account. This report will also include any other information
required by law or regulation. After the Annuity Date, a confirmation
will be provided with every Variable Annuity Payment.
Incontestability
The Policies are incontestable from the Policy Date.
Ownership
Only the Owner will be entitled to the rights granted by the
Policy, or allowed by Transamerica under the Policy. If the Owner dies,
the rights of the Owner belong to the estate of the Owner unless the
Owner has previously named an Owner's Beneficiary.
- 6 -
A-6
<PAGE>
Entire Contract
Transamerica has issued the Policy in consideration and
acceptance of the application and payment of the Initial Premium. A
copy of the application is attached to and is part of the Policy and
along with the Policy constitutes the entire contract. All statements
made by the Owner are considered representations and not warranties.
Transamerica will not use any statement in defense of a claim unless it
is made in the application and a copy of the application is attached to
the Policy when issued.
Changes in the Policy
Only two authorized officers of Transamerica, acting together,
have the authority to bind Transamerica or to make any change in the
Policy and then only in writing. Transamerica will not be bound by any
promise or representation made by any other persons.
Transamerica may not change or amend the Policy, except as
expressly provided in the Policy, without the Owner's consent. However,
Transamerica may change or amend the Policy if such change or amendment
is necessary for the Policy to comply with any state or federal law,
rule or regulation.
Protection of Benefits
To the extent permitted by law, no benefit (including death
benefits) under the Policy will be subject to any claim or process of
law by any creditor.
Delay of Payments
Payment of any cash withdrawal or lump sum death benefit due
from the Variable Account will occur within seven days from the date
the election becomes effective, except that Transamerica may be
permitted to postpone such payment if: (1) the New York Stock Exchange
is closed for other than usual weekends or holidays, or trading on the
Exchange is otherwise restricted; or (2) an emergency exists as defined
by the Securities and Exchange Commission (Commission), or the
Commission requires that trading be restricted; or (3) the Commission
permits a delay for the protection of Owners.
In addition, while it is our intention to process all
transfers from the Sub-Accounts immediately upon receipt of a transfer
request, the Policy gives us the right to delay effecting a transfer
from a Sub-Account for up to seven days, but only in certain limited
circumstances. However, the staff of the Commission currently
interprets the Investment Company Act of 1940 to require the immediate
processing of all transfers, and in compliance with that interpretation
we will process all transfers immediately unless and until the
Commission or its staff changes its interpretation or otherwise permits
us to exercise this right. Subject to such approval, we may delay
effecting such a transfer only if there is a delay of payment from an
affected Portfolio. If this happens, and if the prior approval of the
Commission or its staff is obtained, then we will calculate the dollar
value or number of units involved in the transfer from a Sub-Account on
or as of the date we receive a written transfer request, but will not
process the transfer to the transferee Sub-Account until a later date
during the seven-day delay period when the Portfolio underlying the
transferring Sub-Account obtains liquidity to fund the transfer request
through sales of portfolio securities, new Premiums, transfers by
investors or otherwise. During this period, the amount transferred
would not be invested in a Sub-Account.
Notices and Directions
We will not be bound by any authorization, direction, election
or notice which is not in writing, or in a form and manner acceptable
to Transamerica, and received at our Service Office.
Any written notice requirement by Transamerica to the Owner
will be satisfied by our mailing of any such required written notice,
by first-class mail, to the Owner's last known address as shown on our
records.
CALCULATION OF YIELDS AND TOTAL RETURNS
Money Market Sub-Account Yield Calculation
In accordance with regulations adopted by the Commission,
Transamerica is required to compute the Money Market Sub-Account's
current annualized yield for a seven-day period in a manner which does
not take into consideration any realized or unrealized gains or losses
on shares of the Money Market Series or on its portfolio securities.
This current annualized yield is computed by determining the net change
(exclusive of realized gains and losses on the sale of securities and
unrealized appreciation and depreciation) in the value of a
hypothetical account having a balance of one unit of the Money Market
Sub-Account at the beginning of such seven-day period, dividing such
net change in Policy Value by the value of the account at the beginning
of the period to determine the base period return and annualizing this
quotient on a 365-day basis. The net change in Policy Value reflects
the deductions for the annual Policy Fee, the Mortality and Expense
Risk Charges and Administrative Expense Charges and income and expenses
accrued during the period. Because of these deductions, the yield for
the Money Market Sub-Account of the Variable Account will be lower than
the yield for the Money Market Portfolio or any comparable substitute
funding vehicle.
The Commission also permits Transamerica to disclose the
effective yield of the Money Market Sub-Account for the same seven-day
period, determined on a compounded basis. The effective yield is
- 7 -
A-7
<PAGE>
calculated by compounding the unannualized base period return by adding
one to the base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result.
The yield on amounts held in the Money Market Sub-Account
normally will fluctuate on a daily basis. Therefore, the disclosed
yield for any given past period is not an indication or representation
of future yields or rates of return. The Money Market Sub-Account's
actual yield is affected by changes in interest rates on money market
securities, average portfolio maturity of the Money Market Portfolio or
substitute funding vehicle, the types and quality of portfolio
securities held by the Money Market Portfolio or substitute funding
vehicle, and operating expenses. In addition, the yield figures do not
reflect the effect of any Contingent Deferred Sales Load (of up to 6%
of Premiums) that may be applicable to a Policy.
Other Sub-Account Yield Calculations
Transamerica may from time to time disclose the current
annualized yield of one or more of the Sub-Accounts (except the Money
Market Sub-Account) for 30-day periods. The annualized yield of a
Sub-Account refers to the income generated by the Sub-Account over a
specified 30-day period. Because this yield is annualized, the yield
generated by a Sub-Account during the 30-day period is assumed to be
generated each 30-day period. The yield is computed by dividing the net
investment income per Variable Accumulation Unit earned during the
period by the price per unit on the last day of the period, according
to the following formula:
YIELD 2{a - b+1}6-1
cd
Where:
a = net investment income earned during the period by the Portfolio
attributable to the shares owned by the Sub-Account.
b = expenses for the Sub-Account accrued for the period (net of
reimbursements).
c = the average daily number of Variable Accumulation Units
outstanding during the period.
d = the maximum offering price per Variable Accumulation Unit on the
last day of the period.
Net investment income will be determined in accordance with
rules established by the Commission. Accrued expenses will include all
recurring fees that are charged to all Policies. The yield calculations
do not reflect the effect of any Contingent Deferred Sales Load that
may be applicable to a particular Policy. Contingent Deferred Sales
Load range from 6% to 0% of the amount of Policy Value withdrawn
depending on the elapsed time since the receipt of each Premium
attributable to the portion of the Policy Value withdrawn.
Because of the charges and deductions imposed by the Variable
Account, the yield for the Sub-Account will be lower than the yield for
the corresponding Portfolio. The yield on amounts held in the
Sub-Accounts normally will fluctuate over time. Therefore, the
disclosed yield for any given period is not an indication or
representation of future yields or rates of return. The Sub-Account's
actual yield will be affected by the types and quality of portfolio
securities held by the Portfolio, and its operating expenses.
Standard Total Return Calculations
Transamerica may from time to time also disclose average
annual total returns for one or more of the Sub-Accounts for various
periods of time. Average annual total return quotations are computed by
finding the average annual compounded rates of return over one, five
and ten year periods that would equate the initial amount invested to
the ending redeemable value, according to the following formula:
P{1+T}n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n= number of years
ERV = ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the one,
five, or ten-year period at the end of the one, five
or ten-year period (or fractional portion thereof).
All recurring fees are recognized in the ending redeemable
value. The standard average annual total return calculations will
reflect the effect of any Contingent Deferred Sales Loads that may be
applicable to a particular period.
Hypothetical Performance Data
Transamerica may also disclose "hypothetical" performance data
for a Sub-Account, for periods before the Sub-Account commenced
operations. Such performance information for the Sub-Account will be
calculated based on the performance of the corresponding Portfolio and
the assumption that the Sub-Account was in existence for the same
periods as those indicated for the Portfolio, with a level of
- 8 -
A-8
<PAGE>
Contract charges currently in effect. The Portfolio used for these
calculations will be the actual Portfolio that the Sub-Account will
invest in.
This type of hypothetical performance data may be disclosed on
both an average annual total return and a cumulative total return
basis. Moreover, it may be disclosed assuming that the Contract is not
surrendered (i.e., with no deduction for the Contingent Deferred Sales
Load) and assuming that the Contract is surrendered at the end of the
applicable period (i.e., reflecting a deduction for any applicable
Contingent Deferred Sales Load).
Other Performance Data
Transamerica may from time to time also disclose average
annual total returns in a non-standard format in conjunction with the
standard described above. The non-standard format will be identical to
the standard format except that the Contingent Deferred Sales Load
percentage will be assumed to be 0%.
Transamerica may from time to time also disclose cumulative
total returns in conjunction with the standard format described above.
The cumulative returns will be calculated using the following formula
assuming that the Contingent Deferred Sales Load percentage will be 0%.
CTR = {ERV/P} - 1
Where:
CTR= the cumulative total return net of Sub-Account recurring
charges for the period.
ERV= ending redeemable value of a hypothetical $1,000 payment
at the beginning of the one, five, or
ten-year period at the end of the one, five, or ten-year
period (or fractional portion thereof).
P = a hypothetical initial payment of $1,000.
All non-standard performance data will be advertised only if
the standard performance data is also disclosed.
HISTORIC PERFORMANCE DATA
General Limitations
The figures below represent the past performance of the Sub-Accounts
and are not indicative of future performance. The figures may reflect the waiver
of advisory fees and reimbursement of other expenses.
The Variable Fund has provided the performance data for the Money
Market, Managed Assets, Zero Coupon 2000, Quality Bond, Small Cap, Capital
Appreciation, Growth and Income, and International Equity Portfolios. The Stock
Index Fund and the Socially Responsible Fund have provided their performance
data. The Sub-Account performance data is derived from the data provided by the
Funds. None of the Funds are affiliated with Transamerica. In preparing the
tables below, Transamerica has relied on the data provided by the Funds. While
Transamerica has no reason to doubt the accuracy of the figures provided by the
Funds, Transamerica has not verified those figures. No data is provided for the
International Value, Disciplined Stock and Small Company Stock Sub-Accounts
since, prior to May 1, 1995, these Sub-Accounts, and their related Portfolios,
had not yet commenced operations.
Sub-Account Performance Figures
The charts below show the historical performance data for the
Sub-Accounts since each Sub-Account's commencement of operations. In some
instances, calculation of Sub-Account unit values and performance data began
before amounts were allocated to the Sub-Accounts at the dates that the
identical Sub-Accounts of the Dreyfus/Transamerica Triple Advantage Variable
Annuity issued by Transamerica Occidental Life Insurance Company commenced
operations. These figures are not an indication of the future performance of the
Sub- Accounts. Some of the figures reflect the waiver of advisory fees and
reimbursement of other expenses for part or all of the periods indicated.
Standard average annual total returns for periods since inception of
the Sub-Account for each Sub-Account are as follows. These figures include
mortality and expenses charges deducted at 1.25%, the administrative expenses
charge of 0.15% per annum, the administration charge of $30 per annum adjusted
for average account size and the maximum contingent deferred sales load of 6%.
<TABLE>
<CAPTION>
SUB-ACCOUNT For the 1-year For the period from
(date of commencement of period ending commencement of Sub-Account
operation of Sub-Account) 12/31/95 operations to 12/31/95
<S> <C> <C> <C>
Money Market (1/4/93) -1.27% x.xx
Managed Assets (1/4/93) -5.88% 5.46%
Zero Coupon 2000 (1/4/93) 10.95% 6.40%
Quality Bond (1/4/93) 13.51% 6.95%
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<PAGE>
Small Cap (1/4/93) 23.44% 30.01%
Capital Appreciation (4/5/93) 27.42% 12.40%
Stock Index (1/4/93) 30.52% 12.16%
Socially Responsible (10/7/93) 28.27% 15.47%
International Equity (12/15/94) 1.22% 1.50%
Growth & Income (12/15/94) 54.18% 52.05%
</TABLE>
Nonstandard average annual total returns for periods since inception of the
Sub-Account for each Sub-Account are as follows. These figures include mortality
and expenses charges deducted at 1.25%, the administrative expenses charge of
0.15% per annum, the administration charge of $30 per annum adjusted for average
account size but do not reflect the maximum contingent deferred sales load of
6%, which if reflected would reduce the figures. Nonstandard performance data
will only be disclosed if standard performance data for the required periods is
also disclosed.
<TABLE>
<CAPTION>
SUB-ACCOUNT For the 1-year For the period from
(date of commencement of period ending commencement of Sub-Account
operation of Sub-Account) 12/31/95 operations to 12/31/95
<S> <C> <C> <C> <C>
Managed Assets (1/4/93) -.48% 6.79%
Zero Coupon 2000 (1/4/93) 16.35% 7.71%
Quality Bond (1/4/93) 18.91% 8.25%
Small Cap (1/4/93) 28.84% 30.90%
Capital Appreciation (4/5/93) 32.82% 13.74%
Stock Index (1/4/93) 35.92% 13.34%
Socially Responsible (10/7/93) 33.67% 17.17%
International Equity (12/15/94) 6.62% 6.65%
Growth & Income (12/15/94) 59.50% 57.10%
</TABLE>
Standard cumulative total returns for periods since inception of the
Sub-Account for each Sub-Account are as follows. These figures include mortality
and expenses charges deducted at 1.25%, the administrative expenses charge of
0.15% per annum, the administration charge of $30 per annum adjusted for average
account size and the maximum contingent deferred sales load of 6%.
<TABLE>
<CAPTION>
For the Period
SUB-ACCOUNT For the 1-Year Since Commencement
(date of commencement of period ending of the Sub-Account
operation of Sub-Account) 12/31/95 until 12/31/95
<S> <C> <C>
Money Market -1.27%
Managed Assets (1/4/93) -5.88% 17.29%
Zero Coupon 2000 (1/4/93) 10.95% 20.46%
Quality Bond (1/4/93) 13.51% 22.34%
Small Cap (1/4/93) 23.44% 119.77%
Capital Appreciation (4/5/93) 27.42% 37.77%
Stock Index (1/4/93) 30.52% 41.08%
Socially Responsible (10/7/93) 28.27% 37.93%
International Equity (12/15/94) 1.22% 1.57%
Growth & Income (12/15/94) 54.18% 55.07%
</TABLE>
Non-standard cumulative total returns for each Sub-Account for periods
since inception of the Sub- Account are as follows. These figures include
mortality and expenses charges deducted at 1.25%, the administrative expenses
charge of 0.15% per annum, the administration charge of $30 per annum adjusted
for average account size but do not reflect the maximum contingent deferred
sales load of 6%, which if reflected would reduce the figures. Nonstandard
performance data will only be disclosed if standard performance data for the
required periods is also disclosed.
<TABLE>
<CAPTION>
For the Period
SUB-ACCOUNT For the 1-Year Since Commencement
(date of commencement of period ending of the Sub-Account
operation of Sub-Account) 12/31/95 until 12/31/95
<S> <C> <C> <C> <C>
Managed Assets (1/4/93) 0.48% 21.79%
Zero Coupon 2000 (1/4/93) 16.35% 24.96%
Quality Bond (1/4/93) 18.71% 26.84%
Small Cap (1/4/93) 28.84% 124.27%
Capital Appreciation (4/5/93) 30.82% 42.34%
<PAGE>
Stock Index (1/4/93) 35.92% 45.58%
Socially Responsible (10/7/93) 33.67% 42.51%
International Equity (12/15/94) 6.62% 6.97%
Growth & Income (12/15/94) 57.58% 60.47%
</TABLE>
Money Market Sub-Account Yields
The annualized yield for the Money Market Sub-Account for the seven-day
period ending December 29, 1995 was 3.79%. The effective yield for the Money
Market Sub-Account for the seven-day period eending December 29, 1995 was 3.86%.
Hypothetical Sub-Account Performance Figures
The charts below show "hypothetical" historical performance data for
the Sub-Accounts, including the periods prior to the inception of the
Sub-Accounts, based on the performance of the corresponding Portfolio since its
inception date, with a level of charges equal to those currently assessed under
the Contracts. These figures are not an indication of the future performance of
the Sub-Accounts. Some of the figures reflect the waiver of advisory fees and
reimbursement of other expenses for part or all of the periods indicated.
Hypothetical standard average annual total returns for periods since
inception of the Portfolio for each Sub-Account are as follows. These figures
include mortality and expenses charges deducted at 1.25%, the administrative
expenses charge of 0.15% per annum, the administration charge of $30 per annum
adjusted for average account size and the maximum contingent deferred sales load
of 6%.
<TABLE>
<CAPTION>
SUB-ACCOUNT For the 1-year For the 5-year For the period from
(date of commencement of period ending period ending commencement of Portfolio
operation of Corresponding Portfolio) 12/31/95 12/31/95 operations to 12/31/95
<S> <C> <C> <C> <C> <C>
Money Market (1/4/93) -1.27% 2.55% 2.76%
Managed Assets (8/31/90) -5.88% 5.16% 5.10%
Zero Coupon 2000 (8/31/90) 10.95% 8.95% 9.63%
Quality Bond (8/31/90) 13.51% 9.03% 8.82%
Small Cap (8/31/90) 23.44% 57.46% 53.51%
Capital Appreciation (4/5/93) 27.42% N/A 12.40%
Stock Index (9/29/89) 30.52% 14.08% 1.67%
Socially Responsible (10/7/93) 28.27% N/A 15.47%
International Equity (12/15/94) 1.22% N/A 1.50%
Growth & Income (12/15/94) 54.18% N/A 52.05%
</TABLE>
Hypothetical nonstandard average annual total returns for periods since
inception of the Portfolio for each Sub-Account are as follows. These figures
include mortality and expenses charges deducted at 1.25%, the administrative
expenses charge of 0.15% per annum, the administration charge of $30 per annum
adjusted for average account size but do not reflect the maximum contingent
deferred sales load of 6%, which if reflected would reduce the figures.
Nonstandard performance data will only be disclosed if standard performance data
for the required periods is also disclosed.
<TABLE>
<CAPTION>
SUB-ACCOUNT For the 1-year For the 5-year For the period from
(date of commencement of period ending period ending commencement of Portfolio
operation of Corresponding Portfolio) 12/31/95 12/31/95 operations to 12/31/95
<S> <C> <C> <C> <C> <C>
Managed Assets (8/31/90) 0.48% 5.74% 5.65%
Zero Coupon 2000 (8/31/90) 16.35% 9.46% 10.09%
Quality Bond (8/31/90) 18.91% 9.53% 9.30%
Small Cap (8/31/90) 28.84% 57.58% 53.60%
Capital Appreciation (4/5/93) 32.82% N/A 10.84%
Stock Index (9/29/89) 35.92% 14.50% 10.84%
Socially Responsible (10/7/93) 33.67% N/A 17.17%
International Equity (12/15/94) 6.62% N/A 6.65%
Growth & Income (12/15/94) 59.58% N/A 57.10%
</TABLE>
Hypothetical standard cumulative total returns for periods since inception
of the Portfolio for each Sub- Account are as follows. These figures include
mortality and expenses charges deducted at 1.25%, the administrative expenses
charge of 0.15% per annum, the administration charge of $30 per annum adjusted
for average account size and the maximum contingent deferred sales load of 6%.
<TABLE>
<CAPTION>
For the period from
SUB-ACCOUNT For the 1-year For the 5 year commencement of
- 11 -
A-11
<PAGE>
(date of commencement of period ending period ending Portfolio operations
operation of Corresponding Portfolio) 12/31/95 12/31/95 to 12/31/95
<S> <C> <C> <C> <C> <C>
Managed Assets (8/31/90) -5.88 28.62 30.37%
Zero Coupon 2000 (8/31/90) 10.95 53.51 63.32%
Quality Bond (8/31/90) 13.51 54.05 57.00%
Small Cap (8/31/90) 23.44 868.03 883.59%
Capital Appreciation (4/5/93) 27.42 N/A 37.77%
Stock Index (9/29/89) 30.52 93.18 88.59%
Socially Responsible (10/7/93) 28.27 N/A 37.93%
International Equity (12/15/94) 1.22 N/A 1.57%
Growth & Income (12/15/94) 54.18 N/A 55.07%
</TABLE>
Hypothetical non-standard cumulative total returns for periods since
inception of the Portfolio for each Sub- Account are as follows. These figures
include mortality and expenses charges deducted at 1.25%, the administrative
expenses charge of 0.15% per annum, the administration charge of $30 per annum
adjusted for average account size but do not reflect the maximum contingent
deferred sales load of 6%, which if reflected would reduce the figures.
Nonstandard performance data will only be disclosed if standard performance data
for the required periods is also disclosed.
<TABLE>
<CAPTION>
(Non-Annualized) For the period from
SUB-ACCOUNT For the 1-month For the 1-year For the 5 year commencement of
(date of commencement of period ending period ending period ending Portfolio operations
operation of Corresponding Portfolio) 12/31/95 12/31/95 12/31/95 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Money Market (8/31/90) 0.35% 4.14% 16.99% 19.33%
Managed Assets (8/31/90) 1.95% -0.48% 32.22% 34.04%
Zero Coupon 2000 (8/31/90) 0.93% 16.35% 57.11% 66.99%
Quality Bond (8/31/90) 1.28% 18.91% 57.65% 60.68%
Small Cap (8/31/90) 1.99% 28.84% 871.63% 887.27%
Capital Appreciation (4/5/93) 2.34% 32.82% N/A 42.34%
Stock Index (9/29/89) 2.51% 35.92% 96.78% 90.46%
Socially Responsible (10/7/93) 0.29% 33.67% N/A 42.51%
International Equity (12/15/94) 3.30% 6.62% N/A 6.97%
Growth & Income (12/15/94) 4.45% 59.58% N/A 60.47%
</TABLE>
- 12 -
A-12
<PAGE>
FEDERAL TAX MATTERS
The Dreyfus/Transamerica Triple Advantage Variable Annuity is designed for
use by individuals in retirement plans which may or may not be plans qualified
for special tax treatment under Section 408 of the Internal Revenue
- 13 -
A-13
<PAGE>
Code of 1986, as amended (the "Code"). The ultimate effect of federal income
taxes on the Policy Value, on Annuity Payments, and on the economic benefit to
the Owner, the Annuitant or the Beneficiary may depend on the type of retirement
plan for which the Policy is purchased, on the tax and employment status of the
individual concerned and on Transamerica's tax status. THE FOLLOWING DISCUSSION
IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. Any person concerned about these
tax implications should consult a competent tax adviser. This discussion is
based upon Transamerica's understanding of the present federal income tax laws
as they are currently interpreted by the Internal Revenue Service ("IRS"). No
representation is made as to the likelihood of continuation of these present
federal income tax laws or of the current interpretations by the Internal
Revenue Service. Moreover, no attempt has been made to consider any applicable
state or other tax laws.
Taxation of Transamerica
Transamerica is taxed as a life insurance company under Part I of
Subchapter L of the Code. Since the Variable Account is not an entity separate
from Transamerica, and its operations form a part of Transamerica, it will not
be taxed separately as a "regulated investment company" under Subchapter M of
the Code. Investment income and realized capital gains are automatically applied
to increase reserves under the Policy. Under existing federal income tax law,
Transamerica believes that the Variable Account investment income and realized
net capital gains will not be taxed to the extent that such income and gains are
applied to increase the reserves under the Policy.
Accordingly, Transamerica does not anticipate that it will incur any
federal income tax liability attributable to the Variable Account and,
therefore, Transamerica does not intend to make provisions for any such taxes.
However, if changes in the federal tax laws or interpretations thereof result in
Transamerica being taxed on income or gains attributable to the Variable
Account, then Transamerica may impose a charge against the Variable Account
(with respect to some or all Policies) in order to set aside provisions to pay
such taxes.
Tax Status of the Policies
Section 817(h) of the Code requires that with respect to Non-Qualified
Policies, the investments of the Funds be "adequately diversified" in accordance
with Treasury regulations in order for the Policies to qualify as annuity
contracts under federal tax law. The Variable Account, through the Funds,
intends to comply with the diversification requirements prescribed by the
Treasury in Reg. Sec. 1.817-5, which affect how the Funds' assets may be
invested.
In certain circumstances, owners of variable annuity policies may be
considered the owners, for federal income tax purposes, of the assets of the
separate accounts used to support their policies. In those circumstances, income
and gains from the separate account assets would be includible in the variable
policy owner's gross income. The IRS has stated in published rulings that a
variable policy owner will be considered the owner of separate account assets if
the policy owner possesses incidents of ownership in those assets, such as the
ability to exercise investment control over the assets. The Treasury Department
has also announced, in connection with the issuance of regulations concerning
diversification, that those regulations "do not provide guidance concerning the
circumstances in which investor control for the investments of a segregated
asset account may cause the investor (i.e., the Owner), rather than the
insurance company, to be treated as the owner of the assets in the account."
This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct their
investments to particular Sub-Accounts without being treated as owners of the
underlying assets."
The ownership rights under the Policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that owners were not owners of separate account assets. For example,
the Owner has additional flexibility in allocating premium payments and Policy
Account values. These differences could result in an Owner being treated as the
owner of a pro rata portion of the assets of the Variable Account. In addition,
Transamerica does not know what standards will be set forth, if any, in the
regulations or rulings which the Treasury Department has stated it expects to
issue. Transamerica therefore reserves the right to modify the Policy as
necessary to attempt to prevent an Owner from being considered the owner of a
pro rata share of the assets of the Variable Account.
In order to be treated as an annuity contract for federal income tax
purposes, section 72(s) of the Code requires any Non-Qualified Policy to provide
that (a) if any Owner dies on or after the Annuity Date but prior to the time
the entire interest in the Policy has been distributed, the remaining portion of
such interest will be distributed at least as rapidly as under the method of
distribution being used as of the date of that Owner's death; and (b) if any
Owner dies prior to the Annuity Date, the entire interest in the Policy will be
distributed within five years after the date of the Owner's death. These
requirements will be considered satisfied as to any portion of the Owner's
interest which is payable to or for the benefit of a "designated beneficiary"
and which is distributed over the life of such "designated beneficiary" or over
a period not extending beyond the life expectancy of that Beneficiary, provided
that such distributions begin within one year of that Owner's death. The Owner's
"designated beneficiary" refers to a natural person designated by such Owner as
a Beneficiary and to whom ownership of the Policy passes by reason of death.
However, if the Owner's "designated beneficiary" is the surviving spouse of the
Owner, the Policy may be continued with the surviving spouse as the new owner.
The Non-Qualified Policies contain provisions which are intended to comply
with the requirements of section 72(s) of the Code, although no regulations
interpreting these requirements have yet been issued. Transamerica intends to
review such provisions and modify them if necessary to assure that they comply
with the
- 14 -
A-14
<PAGE>
requirements of Code section 72(s) when clarified by regulation or otherwise.
Other rules may apply to Qualified
Policies.
DISTRIBUTION OF THE POLICY
Transamerica Securities Sales Corporation ("TSSC") is principal underwriter
of the Policies. TSSC may also serve as principal underwriter and distributor of
other contracts issued through the Variable Account and certain other separate
accounts of Transamerica and any affiliates of Transamerica. TSSC is a
wholly-owned subsidiary of Transamerica Insurance Corporation of California,
which is a subsidiary of Transamerica Corporation. TSSC is registered with the
Commission as a broker/dealer and is a member of the National Association of
Securities Dealers, Inc. ("NASD"). Transamerica pays TSSC for acting as the
principal underwriter under a distribution agreement.
TSSC has entered into sales agreements with other broker/dealers to solicit
applications for the Contracts through registered representatives who are
licensed to sell securities and variable insurance products. These agreements
provide that applications for the Contracts may be solicited by registered
representatives of the broker/dealers appointed by Transamerica to sell its
variable life insurance and variable annuities. These broker/dealers are
registered with the Commission and are members of the NASD. The registered
representatives are authorized under applicable state regulations to sell
variable life insurance and variable annuities.
Transamerica Financial Resources, Inc. ("TFR") is an underwriter and
distributor of the Contracts. TFR is a
wholly-owned subsidiary of Transamerica Insurance Corporation of California
and is registered with the
Commission and the NASD as a broker/dealer.
Under the agreements, applications for the Contracts will be sold by
broker/dealers which will receive compensation as described in the Prospectus.
The offering of the Policies is expected to be continuous and neither TSSC
nor TFR anticipate discontinuing the offering of the Policies. However, TSSC and
TFR reserve the right to discontinue the offering of the Policies.
During fiscal year 1995, TSSC was paid $2,355,155.93 in commissions as
underwriter of the Policies; no amounts were retained by TSSC. In fiscal year
1995, TFR received $286.00 in commissions as underwriter of the Policies. During
fiscal year 1994, Dreyfus Service Corporation served as principal underwriter
until August 24, 1994; thereafter, TSSC served as principal underwriter. Total
commissions paid these two entities during 1994 were $2,553,814.11. Throughout
fiscal year 1994, TFR served as principal underwriter but received no
commissions. During fiscal year 1993, TSSC did not serve as underwriter. Dreyfus
Service Corporation served as underwriter throughout 1993 and was paid
$943,470.72 in commissions. TFR received no commissions in 1993.
SAFEKEEPING OF ACCOUNT ASSETS
Title to assets of the Variable Account is held by Transamerica. The assets
are kept separate and apart from Transamerica's general account assets. Records
are maintained of all purchases and redemptions of Portfolio shares held by each
of the Sub-Accounts.
TRANSAMERICA
General Information and History
Transamerica is wholly-owned by Transamerica Occidental Life Insurance
Company, which is, in turn, an indirect subsidiary of Transamerica Corporation.
Transamerica Corporation is a financial services organization which engages
through its subsidiaries in two primary businesses: finance and insurance.
Finance consists of consumer lending, commercial lending, leasing and real
estate services. Insurance comprises life insurance, asset management and
insurance brokerage.
STATE REGULATION
Transamerica is subject to the insurance laws and regulations of all the
states where it is licensed to operate. The availability of certain Policy
rights and provisions depends on state approval and/or filing and review
processes. Where required by state law or regulation, the Policies will be
modified accordingly.
RECORDS AND REPORTS
All records and accounts relating to the Variable Account will be
maintained by Transamerica or by its Service Office. As presently required by
the 1940 Act and regulations promulgated thereunder which pertain to the
Variable Account, reports containing such information as may be required under
the 1940 Act or by other applicable law or regulation will be sent to Owners
semi-annually at their last known address of record.
FINANCIAL STATEMENTS
This Statement of Additional Information contains the financial statements
of the Variable Account as of December 31, 1995.
The financial statements of Transamerica included in this Statement of
Additional Information should be considered only as bearing on the ability of
Transamerica to meet its obligations under the Policies. They should not be
considered as bearing on the investment performance of the assets held in the
Variable Account.
<PAGE>
Audited Financial Statements
Separate Account VA-2LNY of
First Transamerica
Life Insurance Company
December 31, 1995
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Unitholders of Separate Account VA-2LNY of First Transamerica Life Insurance
Company Board of Directors, First Transamerica Life Insurance Company
We have audited the accompanying statement of assets and liabilities of Separate
Account VA-2LNY of First Transamerica Life Insurance Company (comprised of the
Money Market, Managed Assets, Zero Coupon 2000, Quality Bond, Small Cap, Capital
Appreciation, Growth and Income, International Equity, Stock Index Fund, and the
Socially Responsible Fund Sub-accounts) as of December 31, 1995, the related
statement of operations for the year then ended, and the statements of changes
in net assets for the two years in the period then ended. These financial
statements are the responsibility of Separate Account VA-2LNY'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, 1995, by correspondence with
the fund manager. 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 each of the respective
sub-accounts comprising Separate Account VA-2LNY of First Transamerica Life
Insurance Company at December 31, 1995, the results of their operations for the
year then ended, and the changes in their net assets for the two years in the
period then ended in conformity with generally accepted accounting principles.
April 15, 1996
<PAGE>
SEPARATE ACCOUNT VA-2LNY OF FIRST TRANSAMERICA LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<CAPTION>
Zero
Money Managed Coupon
Market Assets 2000
Sub-account Sub-account Sub-account
ASSETS:
<S> <C> <C> <C>
Investments, at fair value--Notes 1 and 2:
Variable Fund Series:
Money Market Series-
10,037,059.880 shares at
$1.00 share (cost $10,037,059) $ 10,037,060
Managed Assets Series-
700,101.573 shares at
$11.70 share (cost $8,782,316) $ 8,191,188
Zero Coupon 2000 Series-
405,436.839 shares at
$12.70 share (cost $4,885,582) $ 5,149,048
Quality Bond Series-
531,524.167 shares at
$11.81 share (cost $6,008,909)
Small Cap Series-
904,448.318 shares at
$46.13 share (cost $34,772,426)
Capital Appreciation Series-
582,587.196 shares at
$17.71 share (cost $8,673,477)
Stock Index Fund-
467,198.572 shares at
$17.20 share (cost $6,776,080)
Socially Responsible Fund-
49,943.120 shares at
$17.31 share (cost $849,549)
Growth and Income-
774,149.291 shares at
$18.33 share (cost $13,572,933)
International Equity-
61,251.708 shares at
$12.82 share (cost $770,005)
Receivable for unsettled investments - 1,082 23,621
Due from Transamerica Life - - 12,858
--------------- --------------- ---------------
TOTAL ASSETS $ 10,037,060 $ 8,192,270 $ 5,185,527
LIABILITIES:
Payable for unsettled investments 110,415 - -
Due to Transamerica Life 554 60 -
--------------- --------------- ---------------
TOTAL LIABILITIES 110,969 60 -
--------------- --------------- ---------------
NET ASSETS $ 9,926,091 $ 8,192,210 $ 5,185,527
=============== =============== ===============
Accumulation units outstanding 9,084,943.487 666,488.480 351,788.006
=============== =============== ===============
Net asset value and redemption price per unit $ 1.092587 $ 12.291600 $ 14.740488
=============== =============== ===============
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Socially
Quality Small Capital Stock Responsible Growth and International
Bond Cap Appreciation Index Fund Fund Income Equity
Sub-account Sub-account Sub-account Sub-account Sub-account Sub-account Sub-account
<S> <C> <C> <C> <C> <C> <C>
$ 6,277,300
$ 41,722,201
$ 10,317,619
$ 8,035,815
$ 864,515
$ 14,190,157
$ 785,247
37,990 64,537 35,695 67,070 5,323 76,278 7,515
725 2,087 - 696 381 29 -
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 6,316,015 $ 41,788,825 $ 10,353,314 $ 8,103,581 $ 870,219 $ 14,266,464 $ 792,762
- - - - - - -
- - 11 - - - -
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
- - 11 - - - -
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 6,316,015 $ 41,788,825 $ 10,353,303 $ 8,103,581 $ 870,219 $ 14,266,464 $ 792,762
=============== =============== =============== =============== =============== =============== ===============
454,139.991 817,445.023 587,928.246 365,482.688 49,020.846 734,393.096 61,152.467
=============== =============== =============== =============== =============== =============== ===============
$ 13.907639 $ 51.121267 $ 17.609807 $ 22.172271 $ 17.752019 $ 19.426196 $ 12.963702
=============== =============== =============== =============== =============== =============== ===============
</TABLE>
<PAGE>
SEPARATE ACCOUNT VA-2LNY OF FIRST TRANSAMERICA LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
Year ended December 31, 1995
<TABLE>
<CAPTION>
Zero
Money Managed Coupon
Market Assets 2000
Sub-account Sub-account Sub-account
<S> <C> <C> <C> <C>
Investment Income--Note 2 $ 523,979 $ 427,084 $ 219,098
Expenses--Note 3:
Mortality and expense risk charge 134,909 121,233 47,600
Administrative expense charge 16,252 14,642 5,749
--------------- --------------- ---------------
NET INVESTMENT INCOME (LOSS) 372,818 291,209 165,749
Net realized and unrealized gain (loss) on investments:
Realized gain (loss) on investment transactions - (150,832) (14,600)
Unrealized appreciation (depreciation) of investments - (293,718) 391,296
--------------- --------------- ---------------
NET GAIN (LOSS) ON INVESTMENTS - (444,550) 376,696
--------------- --------------- ---------------
INCREASE (DECREASE) IN
NET ASSETS RESULTING
FROM OPERATIONS $ 372,818 $ (153,341) $ 542,445
=============== =============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Socially
Quality Small Capital Stock Responsible Growth and International
Bond Cap Appreciation Index Fund Fund Income Equity
Sub-account Sub-account Sub-account Sub-account Sub-account Sub-account Sub-account
<C> <C> <C> <C> <C> <C> <C>
$ 224,719 $ 154,042 $ 131,976 $ 121,450 $ 3,880 $ 98,415 $ 4,621
45,416 405,994 81,949 65,056 6,619 54,268 3,911
5,485 49,034 9,898 7,857 799 6,554 472
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
173,818 (300,986) 40,129 48,537 (3,538) 37,593 238
38,833 1,736,579 119,162 149,258 116,779 785,377 10,932
379,343 6,401,100 1,641,431 1,307,948 19,919 617,224 15,242
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
418,176 8,137,679 1,760,593 1,457,206 136,698 1,402,601 26,174
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 591,994 $ 7,836,693 $ 1,800,722 $ 1,505,743 $ 133,160 $ 1,440,194 $ 26,412
=============== =============== =============== =============== =============== =============== ===============
</TABLE>
<PAGE>
SEPARATE ACCOUNT VA-2LNY OF FIRST TRANSAMERICA LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
Year ended December 31, 1995
<TABLE>
<CAPTION>
Zero
Money Managed Coupon
Market Assets 2000
Sub-account Sub-account Sub-account
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C>
Net investment income (loss) $ 372,818 $ 291,209 $ 165,749
Realized gain (loss) on investment transactions - (150,832) (14,600)
Unrealized appreciation (depreciation) of investments - (293,718) 391,296
--------------- --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 372,818 (153,341) 542,445
Changes from accumulation unit transactions--Note 5 592,766 (1,913,560) 2,068,529
--------------- --------------- ---------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 965,584 (2,066,901) 2,610,974
Net assets at beginning of year 8,960,507 10,259,111 2,574,553
--------------- --------------- ---------------
NET ASSETS AT END OF YEAR $ 9,926,091 $ 8,192,210 $ 5,185,527
=============== =============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Socially
Quality Small Capital Stock Responsible Growth and International
Bond Cap Appreciation Index Fund Fund Income Equity
Sub-account Sub-account Sub-account Sub-account Sub-account Sub-account Sub-account
<C> <C> <C> <C> <C> <C> <C>
$ 173,818 $ (300,986) $ 40,129 $ 48,537 $ (3,538) $ 37,593 $ 238
38,833 1,736,579 119,162 149,258 116,779 785,377 10,932
379,343 6,401,100 1,641,431 1,307,948 19,919 617,224 15,242
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
591,994 7,836,693 1,800,722 1,505,743 133,160 1,440,194 26,412
3,795,787 9,419,766 4,737,770 3,466,691 413,718 12,826,270 766,350
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
4,387,781 17,256,459 6,538,492 4,972,434 546,878 14,266,464 792,762
1,928,234 24,532,366 3,814,811 3,131,147 323,341 - -
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 6,316,015 $ 41,788,825 $ 10,353,303 $ 8,103,581 $ 870,219 $ 14,266,464 $ 792,762
=============== =============== =============== =============== =============== =============== ===============
</TABLE>
<PAGE>
SEPARATE ACCOUNT VA-2LNY OF FIRST TRANSAMERICA LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
Year Ended December 31, 1994
<TABLE>
<CAPTION>
Zero
Money Managed Coupon
Market Assets 2000
Sub-account Sub-account Sub-account
Increase in net assets:
Operations:
<S> <C> <C> <C>
Net investment income (loss) $ 199,766 $ 185,997 $ 107,003
Realized gain (loss) on investment transactions - 29,724 (144,595)
Unrealized appreciation (depreciation) on investments - (374,053) (84,078)
--------------- --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 199,766 (158,332) (121,670)
Changes from accumulation unit transactions--Note 5 6,033,225 8,260,782 860,799
--------------- --------------- ---------------
TOTAL INCREASE IN NET ASSETS 6,232,991 8,102,450 739,129
Net assets at beginning of year 2,727,516 2,156,661 1,835,424
--------------- --------------- ---------------
NET ASSETS AT END OF YEAR $ 8,960,507 $ 10,259,111 $ 2,574,553
=============== =============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Life and Socially
Quality Small Capital Annuity Responsible
Bond Cap Appreciation Index Fund Fund
Sub-account Sub-account Sub-account Sub-account Sub-account
<C> <C> <C> <C> <C>
$ 86,666 $ (103,645) $ 40,348 $ 28,577 $ 5,760
(72,676) 398,691 13,228 (51,712) 586
(99,811) 396,431 (6,394) 25,226 (5,751)
- --------------- --------------- --------------- --------------- ---------------
(85,821) 691,477 47,182 2,091 595
934,420 18,616,985 3,180,534 2,591,413 275,232
- --------------- --------------- --------------- --------------- ---------------
848,599 19,308,462 3,227,716 2,593,504 275,827
1,079,635 5,223,904 587,095 537,643 47,514
- --------------- --------------- --------------- --------------- ---------------
$ 1,928,234 $ 24,532,366 $ 3,814,811 $ 3,131,147 $ 323,341
=============== =============== =============== =============== ===============
</TABLE>
<PAGE>
SEPARATE ACCOUNT VA-2LNY OF FIRST TRANSAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE 1--ORGANIZATION
Separate Account VA-2LNY of First Transamerica Life Insurance Company ("Separate
Account") was established by First Transamerica Life Insurance Company
("Transamerica Life"), a wholly-owned subsidiary of Transamerica Occidental Life
Insurance Company, as a separate account under the laws of the State of New York
on June 23, 1992. The Separate Account is registered with the Securities and
Exchange Commission (the Commission) under the Investment Company Act of 1940 as
a unit investment trust and is designed to provide annuity benefits pursuant to
flexible premium multi-funded individual deferred annuity policies ("Policy")
issued by Transamerica Life. The Separate Account commenced operations when
initial deposits were received on July 7, 1993.
In accordance with the terms of the Policy, all payments allocated to the
Separate Account by policy owners must be allocated to purchase units of any or
all of the Separate Account's ten sub-accounts, each of which invests
exclusively in a specific corresponding mutual fund portfolio. The mutual fund
portfolios are: eight Series of Dreyfus Variable Investment Fund (Variable
Fund), Dreyfus Life and Annuity Index Fund (Life and Annuity Index Fund) and The
Dreyfus Socially Responsible Growth Fund (Socially Responsible Fund) (together
"the Funds"). The Variable Fund's eight series are: Money Market Series, Managed
Assets Series, Zero Coupon 2000 Series, Quality Bond Series, Small Cap Series,
Capital Appreciation Series, Growth and Income, and International Equity. The
Funds are open-end management investment companies registered under the
Investment Company Act of 1940.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the Separate Account have been prepared
on the basis of generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions that
affect amounts reported in the financial statements and accompanying notes. Such
estimates and assumptions could change in the future as more information becomes
known which could impact the amounts reported and disclosed herein. The
accounting principles followed and the methods of applying those principles are
presented below:
Investment Valuation--Investments in the Funds' shares are carried at fair (net
asset) value. Realized investment gains or losses on investments are determined
on a specific identification basis which approximates average cost. Investment
transactions are accounted for on the date the order to buy or sell is executed
(trade date). Investments have a cost basis for federal income tax purposes of
$95,128,336.
Investment Income--Investment income consists of dividend income (both ordinary
and capital gains) and is recognized as declared payable by the Funds. All
distributions received are reinvested in the respective sub-accounts.
Federal Income Taxes--Operations of the Separate Account are part of, and will
be taxed with, those of Transamerica Life, which is taxed as a "life insurance
company" under the Internal Revenue Code. No income taxes are payable by the
Separate Account.
<PAGE>
SEPARATE ACCOUNT VA-2LNY OF FIRST TRANSAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE 3--EXPENSES AND CHARGES
Mortality and expense risk charges are deducted from each sub-account on a daily
basis which is equal, on an annual basis, to 1.25% of the daily net asset value
of the sub-account. This amount can never increase and is paid to Transamerica
Life. An administrative expense charge is also deducted by Transamerica Life
from each sub-account on a daily basis which is equal, on an annual basis, to
.15% of the daily net asset value of the sub-account. This amount may change,
but it is guaranteed not to exceed a maximum effective annual rate of .25%.
The following charges are deducted from a policyholder's account by Transamerica
Life and not directly from the Separate Account. An annual policy fee is
deducted at the end of each policy year prior to the annuity date. Currently,
this charge is $30 (or 2% of the policy value, if less). This charge may change
but is guaranteed not to exceed $60 (or 2% of the policy, if less). After the
annuity date this charge is referred to as the Annuity Fee. In the event that a
policyholder withdraws all or a portion of the policyholder's account, a
contingent deferred sales load (CDSL) not exceeding 6% of premiums may be
applied to the amount of the policy value withdrawn to cover certain expenses
relating to the sale of policies. The amount of the CDSL is based upon elapsed
time since the premium was received and disappears after the seventh year.
During 1995, CDSL amounted to $74,041.
NOTE 4--REMUNERATION
The Separate Account pays no remuneration to directors, advisory boards or
officers or such other persons who may from time to time perform services for
the Separate Account.
<PAGE>
SEPARATE ACCOUNT VA-2LNY OF FIRST TRANSAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--Continued
December 31, 1995
NOTE 5--ACCUMULATION UNITS
<TABLE>
<CAPTION>
The change in accumulation units and amounts is as follows:
Zero
Money Managed Coupon Quality Small
Market Assets 2000 Bond Cap
Sub-account Sub-account Sub-account Sub-account Sub-account
Year Ended December 31, 1995
Accumulation Units:
<S> <C> <C> <C> <C> <C>
Units sold 29,544,251.052 26,430.886 26,892.823 18,981.373 66,834.194
Units redeemed (961,510.362) (34,020.748) (9,576.976) (14,077.846) (19,447.456)
Units transferred (28,044,962.862) (146,906.895) 131,307.626 284,578.694 157,731.048
----------------- ------------ ----------- ----------- -----------
NET INCREASE (DECREASE) 537,777.828 (154,496.757) 148,623.473 289,482.221 205,117.786
================= ============== ============= ============= ==============
Capital Stock Socially Growth and International
Appreciation Index Fund Responsible Income Equity
Sub-account Sub-account Sub-account Sub-account Sub-account
Accumulation Units:
Units sold 52,743.913 26,348.437 7,783.369 108,076.106 11,372.243
Units redeemed (17,918.025) (9,709.656) (848.278) (4,644.204) (1,447.345)
Units transferred 267,836.448 158,347.265 17,914.164 630,961.194 51,227.569
----------------- -------------- ------------- ----------- -------------
NET INCREASE 302,662.336 174,986.046 24,849.255 734,393.096 61,152.467
================= ============== ============= ============= =============
Zero
Money Managed Coupon Quality Small
Market Assets 2000 Bond Cap
Sub-account Sub-account Sub-account Sub-account Sub-account
Amounts:
Sales $ 31,752,030 $ 331,503 $ 385,356 $ 248,748 $ 3,139,452
Redemptions (1,027,098) (418,989) (136,865) (174,885) (891,363)
Transfers (30,132,166) (1,826,074) 1,820,038 3,721,924 7,171,677
------------------ --------------- -------------- ------------- -------------
NET INCREASE (DECREASE) $ 592,766 $ (1,913,560) $ 2,068,529 $ 3,795,787 $ 9,419,766
================== =============== ============== ============= =============
Capital Stock Socially Growth and International
Appreciation Index Fund Responsible Income Equity
Sub-account Sub-account Sub-account Sub-account Sub-account
Amounts:
Sales $ 827,607 $ 524,503 $ 128,894 $ 1,922,589 $ 142,470
Redemptions (277,839) (192,252) (14,360) (77,573) (17,841)
Transfers 4,188,002 3,134,440 299,184 10,981,254 641,721
------------------ --------------- -------------- ------------- -------------
NET INCREASE $ 4,737,770 $ 3,466,691 $ 413,718 $ 12,826,270 $ 766,350
================== =============== ============== ============= =============
</TABLE>
<PAGE>
SEPARATE ACCOUNT VA-2LNY OF FIRST TRANSAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--Continued
December 31, 1995
<TABLE>
<CAPTION>
NOTE 5--ACCUMULATION UNITS
Zero
Money Managed Coupon Quality
Market Assets 2000 Bond
Sub-account Sub-account Sub-account Sub-account
Year Ended December 31, 1994
Accumulation Units:
<S> <C> <C> <C> <C>
Units sold 37,962,440.988 52,568.356 4,528.834 6,579.744
Units redeemed (227,887.242) (42,981.318) (12,199.847) (4,501.010)
.
Units transferred (31,865,668.579) 643,711.402 73,582.648 75,826.180
----------------- ---------------- ---------------- ----------------
NET INCREASE 5,868,885.167 653,298.440 65,911.635 77,904.914
================= ================ ================ ================
Small Capital Stock Socially
Cap Appreciation Index-Fund Responsible
Sub-account Sub-account Sub-account Sub-account
Accumulation Units:
Units sold 42,459.381 39,702.690 14,529.419 1,271.725
Units redeemed (15,633.768) (1,230.712) (517.156) (18.976)
Units transferred 446,944.175 202,181.040 143,941.105 19,363.588
----------------- ---------------- ---------------- ----------------
NET INCREASE 473,769.788 240,653.018 157,953.368 20,616.337
================= ================ ================ ================
Zero
Money Managed Coupon Quality
Market Assets 2000 Bond
Sub-account Sub-account Sub-account Sub-account
Amounts:
Sales $ 38,847,509 $ 682,059 $ 72,883 $ 92,259
Redemptions (234,490) (538,565) (154,938) (54,100)
Transfers (32,579,794) 8,117,288 942,854 896,261
------------------ ---------------- ----------------- ----------------
NET INCREASE $ 6,033,225 $ 8,260,782 $ 860,799 $ 934,420
================== ================ ================= ================
Small Capital Stock Socially
Cap Appreciation Index-Fund Responsible
Sub-account Sub-account Sub-account Sub-account
Amounts:
Sales $ 1,850,012 $ 539,308 $ 268,415 $ 16,787
Redemptions (608,921) (16,078) (8,498) (252)
Transfers 17,375,894 2,657,304 2,331,496 258,697
------------------ ---------------- ----------------- ----------------
NET INCREASE $ 18,616,985 $ 3,180,534 $ 2,591,413 $ 275,232
================== ================ ================= ================
</TABLE>
<PAGE>
SEPARATE ACCOUNT VA-2LNY OF FIRST TRANSAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--Continued
December 31, 1995
NOTE 6--INVESTMENT TRANSACTIONS
<TABLE>
<CAPTION>
The aggregate cost of purchases and the aggregate proceeds from the sales of
investments for the year ended December 31, 1995 were:
Zero
Money Managed Coupon Quality Small
Market Assets 2000 Bond Cap
Sub-account Sub-account Sub-account Sub-account Sub-account
<S> <C> <C> <C> <C> <C>
Aggregate purchases $ 37,640,341 $ 2,160,587 $ 3,243,852 $ 4,935,358 $ 14,337,579
=============== =============== ============== ============= ==============
Aggregate proceeds from sales $ 36,587,215 $ 3,784,085 $ 1,036,146 $ 939,166 $ 4,476,351
=============== =============== ============== ============= ==============
Life and
Capital Annuity Socially Growth and International
Appreciation Index Fund Responsible Income Equity
Sub-account Sub-account Sub-account Sub-account Sub-account
Aggregate purchases $ 5,511,534 $ 4,311,984 $ 913,073 $ 15,585,425 $ 1,023,050
=============== =============== ============== ============= ==============
Aggregate proceeds from sales $ 769,125 $ 802,893 $ 488,650 $ 2,267,406 $ 263,978
=============== =============== ============== ============= ==============
</TABLE>
- 15 -
<PAGE>
Audited Financial Statements
First Transamerica Life
Insurance Company
December 31, 1995
<PAGE>
FIRST TRANSAMERICA LIFE INSURANCE COMPANY
Audited Financial Statements
December 31, 1995
Report of Independent Auditors............................ 1
Balance Sheet............................................. 2
Statement of Income....................................... 3
Statement of Shareholder's Equity......................... 4
Statement of Cash Flows................................... 5
Notes to Financial Statements............................. 6
<PAGE>
1
REPORT OF INDEPENDENT AUDITORS
Transamerica Corporation
and
Board of Directors
First Transamerica Life Insurance Company
We have audited the accompanying balance sheet of First Transamerica Life
Insurance Company as of December 31, 1995 and 1994, and the related statements
of income, shareholder's equity, and cash flows for each of the three years in
the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion of 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. 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 First Transamerica Life
Insurance Company at December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
As discussed in Note A, in 1994, the Company changed its method of accounting
for certain debt securities effective January 1, 1994.
February 14, 1996
<PAGE>
<TABLE>
<CAPTION>
FIRST TRANSAMERICA LIFE INSURANCE COMPANY
BALANCE SHEET
December 31
1995 1994
--------------------- --------------
(In thousands, except
for share data)
ASSETS
Investments:
<S> <C> <C>
Fixed maturities available for sale $ 433,428 $ 329,118
Investment real estate 363 376
Policy loans 10,764 9,341
--------------------- ---------------------
444,555 338,835
Cash 16,257 15,777
Accrued investment income 7,511 6,160
Accounts receivable 4,542 3,750
Reinsurance recoverable on paid and unpaid losses 11,136 14,426
Deferred policy acquisitions costs 35,588 61,435
Deferred tax assets - 3,867
Other assets 5,993 7,062
Separate account assets 109,222 55,538
--------------------- ---------------------
$ 634,804 $ 506,850
===================== =====================
LIABILITIES AND SHAREHOLDER'S EQUITY
Policy liabilities:
Policyholder contract deposits $ 420,826 $ 370,483
Reserves for future policy benefits 10,075 9,419
Policy claims and other 6,707 7,072
--------------------- ---------------------
437,608 386,974
Income tax liabilities 4,533 1,034
Accounts payable and other liabilities 17,172 14,986
Separate account liabilities 109,222 55,538
--------------------- ---------------------
568,535 458,532
Shareholder's equity:
Common Stock ($1,000 par value):
Authorized--2,000 shares
Issued and outstanding--2,000 shares 2,000 2,000
Additional paid-in capital 52,320 47,320
Retained earnings 5,068 2,910
Net unrealized investment gains (losses) 6,881 (3,912)
--------------------- ---------------------
66,269 48,318
--------------------- ---------------------
$ 634,804 $ 506,850
===================== =====================
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF INCOME
Year Ended December 31
1995 1994 1993
--------------- --------------- ----------
(In thousands)
Revenues:
<S> <C> <C> <C>
Premiums and other considerations $ 13,495 $ 10,836 $ 7,908
Net investment income 30,897 26,468 23,065
Net realized investment gains (losses) 19 (36) 809
--------------- --------------- ---------------
TOTAL REVENUES 44,411 37,268 31,782
Benefits:
Benefits paid or provided 31,984 26,628 22,948
Increase (decrease) in policy reserves and liabilities 316 381 (535)
--------------- --------------- ---------------
32,300 27,009 22,413
Expenses:
Amortization of deferred policy acquisition costs 2,197 1,536 1,767
Salaries and salary related expenses 3,206 2,726 2,361
Other expenses 3,219 3,499 3,057
--------------- --------------- ---------------
8,622 7,761 7,185
--------------- --------------- ---------------
TOTAL BENEFITS AND EXPENSES 40,922 34,770 29,598
--------------- --------------- ---------------
INCOME BEFORE INCOME TAXES 3,489 2,498 2,184
Provision for income taxes 1,331 986 864
--------------- --------------- ---------------
NET INCOME $ 2,158 $ 1,512 $ 1,320
=============== =============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF SHAREHOLDER'S EQUITY
Net
Unrealized
Additional Investment
Common Stock Paid-in Retained Gains
Shares Amount Capital Earnings (Losses)
(In thousands, except for share data)
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1993 2,000 $ 2,000 $ 36,520 $ 78
Net income 1,320
Capital contributions from parent 3,400
------------ ------------ ------------
Balance at December 31, 1993 2,000 2,000 39,920 1,398
Cumulative effect of change in
accounting for investments $ 12,075
Net income 1,512
Capital contributions from parent 7,400
Change in net unrealized
investment gains (losses) (15,987)
Balance at December 31, 1994 2,000 2,000 47,320 2,910 (3,912)
Net income 2,158
Capital contributions from parent 5,000
Change in net unrealized
investment gains (losses) 10,793
Balance at December 31, 1995 2,000 $ 2,000 $ 52,320 $ 5,068 $ 6,881
============ ============ ============ =========== ==============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
Year Ended December 31
1995 1994 1993
--------------- --------------- ----------
(In thousands)
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income $ 2,158 $ 1,512 $ 1,320
Adjustments to reconcile net income to net cash
used by operating activities:
Changes in:
Reinsurance recoverable and accounts
receivable 2,498 (8,129) (7,922)
Accrued investment income (1,351) (1,099) (777)
Policy liabilities 11,693 9,489 17,174
Other assets, accounts payable and other
liabilities, and income taxes 786 10,791 (530)
Policy acquisition costs deferred (12,126) (14,387) (12,953)
Amortization of deferred policy acquisition costs 2,197 1,536 1,767
Net realized losses (gains) on investment transactions (19) 36 (809)
Other (698) 92 (257)
--------------- --------------- ---------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 5,138 (159) (2,987)
INVESTMENT ACTIVITIES
Purchases of securities and other investments (79,260) (66,255) (77,673)
Sales of investments 28,738 20,742 26,886
Maturities of securities 2,000 - 800
Other (77) 3,852 (3,358)
--------------- --------------- ---------------
NET CASH USED
BY INVESTING ACTIVITIES (48,599) (41,661) (53,345)
FINANCING ACTIVITIES
Additions to policyholder contract deposits 65,019 67,951 75,097
Withdrawals from policyholder contract deposits (26,078) (22,729) (17,747)
Capital contributions from parent 5,000 7,400 3,400
--------------- --------------- ---------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 43,941 52,622 60,750
--------------- --------------- ---------------
INCREASE IN CASH 480 10,802 4,418
Cash at beginning of year 15,777 4,975 557
--------------- --------------- ---------------
CASH AT END OF YEAR $ 16,257 $ 15,777 $ 4,975
=============== =============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
Business: First Transamerica Life Insurance Company (the "Company") is
domiciled in New York. The Company is a
wholly owned subsidiary of Transamerica Occidental Life Insurance Company
("TOLIC"), which is an indirect
subsidiary of Transamerica Corporation.
The Company engages in providing life insurance, annuity products, reinsurance,
and structured settlements. The Company's customers are primarily in the state
of New York.
Basis of Presentation: The accompanying financial statements have been prepared
in accordance with generally accepted accounting principles which differ from
statutory accounting practices prescribed or permitted by regulatory
authorities.
Use of Estimates: Certain amounts reported in the accompanying financial
statements are based on the management's best estimates and judgment. Actual
results could differ from those estimates.
New Accounting Standards: In March 1995, the Financial Accounting Standards
Board issued a new standard on accounting for the impairment of long-lived
assets and for long-lived assets to be disposed of. The Company will adopt the
standard in 1996. The standard requires that an impaired long-lived asset be
measured based on the fair value of the asset to be held and used or the fair
value less cost to sell of the asset to be disposed of. When adopted, this
standard is not expected to have a material effect on the financial position or
results of operations of the Company.
In 1994, the Company adopted the Financial Accounting Standards Board's new
standard on accounting for certain investments in debt and equity securities
which requires the Company to report at fair value, with unrealized gains and
losses excluded from earnings and reported on an after tax basis as a separate
component of shareholder's equity, its investments in debt securities for which
the Company does not have the positive intent and ability to hold to maturity.
Additionally, such unrealized gains and losses are considered in evaluating
deferred policy acquisition costs with any resultant adjustment also excluded
from earnings and reported on an after tax basis in shareholder's equity. As of
January 1, 1994, the impact of adopting the standard was to increase
shareholder's equity by $12.1 million (net of deferred taxes of $6.5 million)
with no effect on net income.
Investments: Investments are reported on the following bases:
Fixed maturities --All debt securities are classified as available for
sale and carried at fair value effective as of January 1, 1994. The
Company does not carry any debt securities principally for the purpose of
trading. Prepayments are considered in establishing amortization periods
for premiums and discounts and amortized cost is further adjusted for
other-than-temporary fair value declines.
Investment real estate--at cost, less allowance for depreciation and
possible impairment.
Policy loans--at unpaid balances.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
NOTE A--SIGNIFICANT ACCOUNTING POLICIES (Continued)
Realized gains and losses on disposal of investments are determined on a
specific identification basis. Changes in fair values of fixed maturities
available for sale are included in net unrealized investment gains or losses
after adjustment of deferred policy acquisition costs and deferred income taxes
as a separate component of shareholder's equity and, accordingly, have no effect
on net income.
Deferred Policy Acquisition Costs (DPAC): Certain costs of acquiring new and
renewal insurance contracts, principally commissions, medical examination and
inspection report fees, and certain variable underwriting and issue expenses,
all of which vary with and are primarily related to the production of such
business, have been deferred. DPAC for non-traditional life and investment-type
products are amortized over the life of the related policies generally in
relation to estimated future gross profits. DPAC for traditional life insurance
products are amortized over the premium-paying period of the related policies in
proportion to premium revenue recognized, using principally the same assumptions
used for computing future policy benefit reserves. DPAC is adjusted as if
unrealized gains or losses on securities available for sale were realized.
Changes in such adjustments are included in net unrealized investment gains or
losses on an after tax basis as a separate component of shareholder's equity
and, accordingly, have no effect on net income.
Separate Accounts: The Company administers segregated asset accounts for
variable annuity contracts. The assets held in these Separate Accounts are
invested in various mutual fund portfolios managed by third party companies. The
Separate Account assets are stated at fair value and are not subject to
liabilities arising out of any other business the Company may conduct.
Investment risks associated with fair value changes are borne by the contract
holders. Accordingly, investment income and realized gains and losses
attributable to Separate Accounts are not reported in the Company's results of
operations.
Policyholder Contract Deposits: Non-traditional life insurance products include
universal life and other interest-sensitive life insurance policies.
Investment-type products include single and flexible premium deferred annuities
and single premium immediate annuities. Policyholder contract deposits on
universal life and investment products represent premiums received plus
accumulated interest, less mortality charges on universal life products and
other administration charges as applicable under the contract. Interest credited
to these policies ranged from 5.5% to 7.8% in 1995 and 1994 and from 5.5% to
8.5% in 1993.
Reserves for Future Policy Benefits: Traditional life insurance products
primarily include those contracts with fixed and guaranteed premiums and
benefits and consist principally of whole life and term insurance policies,
limited-payment life insurance policies and certain annuities with life
contingencies. The reserve for future policy benefits for traditional life
insurance products has been provided on a net-level premium method based upon
estimated investment yields, withdrawals, mortality, and other assumptions which
were appropriate at the time the policies were issued. Such estimates are based
upon past experience with a margin for adverse deviation. The initial interest
assumptions range from 4.0% to 5.5%.
Recognition of Revenue and Costs: Traditional life insurance contract premiums
are recognized as revenue over the premium-paying period, with reserves for
future policy benefits established from such premiums.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
NOTE A--SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenues for universal life and investment products consist of policy charges
for the cost of insurance, policy administration charges, amortization of policy
initiation fees, and surrender charges assessed against policyholder account
balances during the period. Expenses related to these products consist of
interest credited to policyholder account balances and benefit claims incurred
in excess of policyholder account balances.
Claim reserves include provisions for reported claims and claims incurred but
not reported.
Reinsurance: Coinsurance premiums, commissions, expense reimbursements, and
reserves related to reinsured business are accounted for on bases consistent
with those used in accounting for the original policies and the terms of the
reinsurance contracts. Yearly renewable term reinsurance is accounted for the
same as direct business. Premiums ceded and recoverable losses have been
reported as a reduction of premium income and benefits, respectively. The ceded
amounts related to policy liabilities have been reported as an asset.
Income Taxes: The Company is included in the consolidated federal income tax
return of TOLIC which, with its domestic subsidiaries and affiliates, is
included in the consolidated federal income tax returns filed by Transamerica
Corporation, which by the terms of a tax sharing agreement generally requires
the Company to accrue and settle income tax obligations in amounts that would
result from filing separate tax returns with federal taxing authorities.
Deferred income taxes arise from temporary differences between the bases of
assets and liabilities for financial reporting purposes and income tax purposes,
based on enacted tax rates in effect for the years in which the temporary
differences are expected to reverse.
Fair Values of Financial Instruments: Fair values for debt securities are
based on quoted market prices, where available.
Fair values for policy loans are estimated using discounted cash flow
calculations, based on interest rates currently being offered for similar loans
to borrowers.
The carrying amounts of cash and accrued investment income approximate their
fair value.
Fair values for liabilities under investment-type contracts are estimated using
discounted cash flow calculations, based on interest rates currently being
offered by similar contracts with maturities consistent with those remaining for
the contracts being valued. The liabilities under investment-type contracts are
included in policyholder contract deposits in the accompanying balance sheet.
Reclassifications: Certain reclassifications of prior year amounts have been
made to conform with the 1995 presentation.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
NOTE B--INVESTMENTS
<TABLE>
<CAPTION>
The cost and fair value of fixed maturities available for sale are as follows
(in thousands):
Gross Gross
Unrealized Unrealized Fair
Cost Gain Loss Value
December 31, 1995
U.S. Treasury securities and
obligations of U.S. government
<S> <C> <C> <C>
corporations and agencies $ 1,356 $ 117 $ 1,473
Obligations of states and political
subdivisions 14,381 522 14,903
Corporate securities 210,276 20,010 $ 63 230,223
Public utilities 104,238 9,190 52 113,376
Mortgage-backed securities 71,513 1,942 2 73,453
------ ----- - --------
$ 401,764 $ 31,781 $ 117 $ 433,428
================ ================ ================ ================
December 31, 1994
U.S. Treasury securities and
obligations of U.S. government
corporate agencies $ 10,868 $ 237 $ 10,631
Corporate securities 170,261 $ 1,101 9,221 162,141
Public utilities 81,489 43 7,287 74,245
Mortgage-backed securities 87,219 125 5,243 82,101
------ --- ----- --------
$ 349,837 $ 1,269 $ 21,988 $ 329,118
================ ================ ================ ================
</TABLE>
The cost and fair value of fixed maturities available for sale at December 31,
1995, 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 (in thousands):
Fair
Cost Value
Due in 1996 $ 2,504 $ 2,536
Due in 1997-2000 31,519 33,796
Due in 2001-2005 71,233 76,551
Due after 2005 224,995 247,092
---------------- ----------------
330,251 359,975
Mortgage-backed securities 71,513 73,453
---------------- ----------------
$ 401,764 $ 433,428
================ ================
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
NOTE B--INVESTMENTS (Continued)
As of December 31, 1995, the Company held investments in three issuers, other
than the United States Government or a United States Government agency or
authority, which exceeded 10% of total shareholder's equity as follows (in
thousands):
Carrying Value Name of Issuer
$ 11,047 General Public Utilities
8,305 Cinergy
7,958 Chemical Banking Corp.
The carrying value of those assets that were on deposit with public officials in
compliance with regulatory requirements was $1.4 million at December 31, 1995.
<TABLE>
<CAPTION>
Net investment income by major investment category is summarized as follows (in
thousands):
1995 1994 1993
-------------- -------------- ---------
<S> <C> <C> <C>
Fixed maturities $ 30,329 $ 26,085 $ 22,487
Short-term investments 524 133 469
Other investments 58 443 238
-------------- -------------- --------------
30,911 26,661 23,194
Investment expenses (14) (193) (129)
-------------- -------------- --------------
Net investment income $ 30,897 $ 26,468 $ 23,065
============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
The following summarizes realized investment gains and losses and other
information related to investments (in thousands):
1995 1994 1993
-------------- -------------- ---------
Net gains (loss) on disposition of investment
<S> <C> <C> <C>
in fixed maturities $ 19 $ (36) $ 809
Proceeds from disposition of investment in
fixed maturities 30,738 20,742 27,686
Gross gains on disposition of investment in
fixed maturities 283 - 819
Gross losses on disposition of investment in
fixed maturities 264 36 10
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
NOTE B--INVESTMENTS (Continued)
<TABLE>
<CAPTION>
The components of change in net unrealized investment gains (losses) in the
accompanying statement of shareholder's equity are as follows (in thousands):
1995 1994 1993
-------------- -------------- ---------
Change in unrealized gains (loss)
<S> <C> <C> <C>
on fixed maturities $ 52,381 $ (39,296) $ 12,040
Change in related DPAC adjustments (35,776) 14,700 -
Related deferred taxes (5,812) 8,609 (4,212)
-------------- -------------- -------------
$ 10,793 $ (15,987) $ 7,826
============== ============== ==============
</TABLE>
NOTE C--DEFERRED POLICY ACQUISITION COSTS (DPAC)
<TABLE>
<CAPTION>
Significant components of changes in DPAC are as follows (in thousands):
1995 1994 1993
-------------- -------------- ---------
<S> <C> <C> <C>
Balance at beginning of year $ 61,435 $ 33,884 $ 22,698
Amounts deferred:
Commissions 8,645 10,617 8,025
Other 3,481 3,770 4,928
Amortization (2,197) (1,536) (1,767)
Fair value adjustment (35,776) 14,700 -
-------------- -------------- --------------
Balance at end of year $ 35,588 $ 61,435 $ 33,884
============== ============== ==============
</TABLE>
NOTE D--POLICY LIABILITIES
<TABLE>
<CAPTION>
Components of policyholder contract deposits are as follows (in thousands):
December 31
1995 1994
<S> <C> <C>
Liabilities for investment-type products $ 272,839 $ 235,203
Liabilities for non-traditional life insurance
products 147,987 135,280
------------- --------------
$ 420,826 $ 370,483
============= ==============
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
NOTE E--INCOME TAXES
<TABLE>
<CAPTION>
Components of income tax liabilities are as follows (in thousands):
December 31
1995 1994
<S> <C> <C>
Current tax liabilities $ 512 $ 1,034
Deferred tax liabilities 4,021 -
------------- --------------
$ 4,533 $ 1,034
============= ==============
Significant components of deferred tax liabilities (assets) are as follows (in
thousands):
December 31
1995 1994
Deferred policy acquisition costs $ 16,899 $ 13,992
Life insurance policy liabilities (16,563) (15,740)
Unrealized investment gains (losses) 3,705 (2,106)
Other - net (20) (13)
------------- -------------
$ 4,021 $ (3,867)
============= =============
</TABLE>
The Company offsets all deferred tax assets and liabilities and presents them in
a single amount in the balance sheet.
<TABLE>
<CAPTION>
Components of provisions for income taxes (benefits) are as follows (in
thousands):
1995 1994 1993
-------------- -------------- ---------
<S> <C> <C> <C>
Current tax expense $ (665) $ 1,016 $ 1,446
Deferred tax expense 1,996 (30) (680)
Adjustment for enacted change in tax laws - - 98
-------------- -------------- --------------
$ 1,331 $ 986 $ 864
============== ============== ==============
</TABLE>
The differences between federal income taxes computed at the statutory rate and
provision for income taxes are primarily due to the amortization of goodwill.
An income tax refund of $0.1 million, and income tax payments of $1.1 million
and $0.9 million in 1995, 1994 and 1993, respectively, was received from and
paid to TOLIC.
NOTE F--REINSURANCE
The Company is involved in the cession of reinsurance to affiliated companies.
Risks are reinsured with other companies to permit the recovery of a portion of
the direct losses, however, the Company remains liable to the extent the
reinsuring companies do not meet their obligations under these reinsurance
agreements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
NOTE F--REINSURANCE (Continued)
<TABLE>
<CAPTION>
The components of the Company's life insurance in force and premiums and other
considerations are summarized as follows (in thousands):
Ceded to
Gross Ceded to Affiliated Net
Amount TOLIC Companies Amount
1995
Life insurance in force,
<S> <C> <C> <C> <C>
at end of year $ 4,085,406 $ 198,199 $ 2,643,198 $ 1,244,009
================== ================= ================== ==================
Premiums and other
considerations $ 20,336 $ 0 $ 6,841 $ 13,495
================== ================= ================== ==================
Benefits paid or
provided $ 41,258 $ 9,274 $ 0 $ 31,984
================== ================= ================== ==================
1994
Life insurance in force,
at end of year $ 5,399,638 $ 687,608 $ 2,473,081 $ 2,238,949
================== ================= ================== ==================
Premiums and other
considerations $ 20,174 $ 2,559 $ 6,779 $ 10,836
================== ================= ================== ==================
Benefits paid or
provided $ 37,700 $ 11,072 $ 0 $ 26,628
================== ================= ================== ==================
1993
Life insurance in force,
at end of year $ 5,407,563 $ 892,003 $ 2,551,143 $ 1,964,417
================== ================= ================== ==================
Premiums and other
considerations $ 20,231 $ 3,598 $ 8,725 $ 7,908
================== ================= ================== ==================
Benefits paid or
provided $ 30,875 $ 7,927 $ 0 $ 22,948
================== ================= ================== ==================
</TABLE>
NOTE G--PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS
Substantially all employees of the Company are covered by the Retirement Plan
for Salaried Employees of Transamerica Corporation and Affiliates (the "Plan").
Pension benefits are based on the employee's compensation during the highest
paid 60 consecutive months during the 120 months before retirement. Annual
contributions to the Plan generally include a provision for current service
costs plus amortization of prior service costs over periods ranging from 10 to
30 years. Assets of the plans are primarily invested in publicly traded stocks
and bonds.
The Company's pension costs charged to income were not significant.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
NOTE G--PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS (Continued)
The Company also participates in various contributory defined benefit programs
sponsored by Transamerica Corporation that provide medical and certain other
benefits to eligible retirees. Postretirement benefit costs charged to income
were not significant.
NOTE H--RELATED PARTY TRANSACTIONS
The Company has various transactions with TOLIC and certain of its other
affiliates in the normal course of operations, including reinsurance
transactions, computer services, investment services and advertising services.
The reinsurance recoverable from TOLIC, including the amount receivable for
policy claims paid, amounted to $1.9 million and $4.3 million at December 31,
1995 and 1994, respectively.
NOTE I--LEASES
Substantially all leases of the Company are operating leases principally for the
rental of real estate. Rental expense for properties occupied by the Company was
$0.9 million, $1.0 million and $0.8 million in 1995, 1994 and 1993,
respectively. The following is a schedule by years of future minimum rental
payments required under operating leases that have initial or remaining
noncancelable lease terms in excess of one year as of December 31, 1995 (in
thousands):
1996 $ 821
1997 843
1998 843
1999 671
2000 384
Sublease revenue (875)
$ 2,687
NOTE J--LITIGATION
The Company is a defendant in various legal actions arising from the normal
course of operations. Contingent liabilities arising from litigation are not
considered material in relation to the financial position or results of
operations of the Company.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
NOTE K--REGULATORY MATTERS
The Company is subject to state insurance laws and regulations, principally
those of the State of New York. Such regulations include the risk based capital
requirement and the restriction on the payment of dividends. Generally,
dividends during any year may not be paid, without prior regulatory approval, in
excess of the greater of 10% of the Company's statutory capital and surplus as
of the preceding year end or the Company's statutory net income from operations
for the preceding year. Those statutory amounts are determined in conformity
with statutory accounting practices prescribed or permitted by the Department of
Insurance of New York ("New York Department"). Currently, no dividends can be
paid by the Company without prior approval of New York Department.
<TABLE>
<CAPTION>
The Company's statutory net income income (loss) and capital and surplus are
summarized as follows (in thousands):
1995 1994 1993
-------------- -------------- ---------
<S> <C> <C> <C>
Statutory net income (loss) $ 1,779 $ (5,238) $ (5,568)
Statutory capital and surplus, at end of year 22,713 16,612 14,556
</TABLE>
NOTE L--FINANCIAL INSTRUMENTS
<TABLE>
<CAPTION>
The carrying values and estimated fair values of financial instruments are as
follows (in thousands):
December 31
1995 1994
------------------------------- ------------------
Carrying Fair Carrying Fair
Value Value Value Value
Financial Assets:
<S> <C> <C> <C> <C>
Fixed maturities $ 433,428 $ 433,428 $ 329,118 $ 329,118
Policy loans 10,764 10,910 9,341 8,726
Cash 16,257 16,257 15,777 15,777
Accrued investment income 7,511 7,511 6,160 6,160
Financial Liabilities:
Liabilities for investment-type
contracts:
Single and flexible premium
deferred annuities 154,292 151,433 145,674 146,183
Single premium immediate
annuities 118,547 114,553 89,529 71,670
</TABLE>
<PAGE>
Part C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a)Financial Statements
All required financial statements are included in Parts A or B of this
Registration Statement.
(b)Exhibits
(1) Resolution of the Board of Directors of First Transamerica Life
Insurance Company ("Transamerica") authorizing establishment
of the Variable Account.(1)
(2) Not Applicable.
(3) (a) Master Agreement among
Transamerica Occidental Life
Insurance Company, First
Transamerica Life Insurance Company,
Transamerica Financial Resources,
Inc., Dreyfus Service Corporation, and
Dreyfus Service Organization, Inc.(4)
(b) Principal Agency Agreement between First Transameric a Life
Insurance Company and Dreyfus Service Organization, Inc.(3)
(c) Distribution Agreement between First Transamerica life
Insurance Company and Dreyfus Service Corporation.(3)
(d) Form of Sales Agreement among Dreyfus Service Corporation,
Dreyfus Service Organization, Inc. and Broker-Dealers.(4)
(e) Amendment Dated as of August 31, 1993, to Master Agreement
among Transamerica Occidental Life Insurance Company, First
Transamerica Life Insurance Company, Transamerica Financial
Resources, Inc., Dreyfus Service Corporation and Dreyfus
Service Organization, Inc. (5)
(f) Amendment Dated as of August 31, 1993 to Principal Agency
Agreement between First Transamerica Life Insurance Company
and Dreyfus Service Organization, Inc. (5)
(g) Amendment Dated as of August 31, 1993 to Distribution
Agreement between First Transamerica Life Insurance Company
and Dreyfus Service Corporation. (5)
(4) Policy Form and Endorsements. (5)
(a) Form of Flexible Premium Multi-Funded Individual Deferred
Annuity Policy.
(b) Form of IRA Endorsement.
(c) Form of Automatic Payout Option Endorsement.
(d) Form of Dollar Cost Averaging Option Endorsement.
(e) Form of Systematic Withdrawal Option Endorsement.
(f) Form of Unisex Annuity Rates Endorsement.
(5) Form of Application. (5)
(6) (a)Declaration of Intention and Charter of Transamerica.(1)
(b) By-Laws of Transamerica.(1)
(7) Not applicable.
(8) (a) Participation Agreement between First
Transamerica Life Insurance Company
and Dreyfus Variable Investment
Fund.(3)
C-1
<PAGE>
(b) Participation Agreement between First Transamerica Life
Insurance Company and Dreyfus Life and Annuity Index Fund,
Inc.(3)
(c) Participation Agreement between First Transamerica Life
Insurance Company and The Dreyfus Socially Responsible
Growth Fund, Inc. (5)
(d) Administrative Services Agreement (Draft) between First
Transamerica Life Insurance Company and Vantage Computer
Systems, Inc.(3)
(9) (a) Opinion and Consent of Counsel.(7)
(10) (a) Consent of Counsel.(7)
(b) Consent of Independent Auditors .(7)
(11) No financial statements are omitted from item 23.
(12) Not applicable.
(13) Performance Data Calculations.(5)
(14) Not applicable.
(15) Powers of Attorney.
(a) Marc C. Abrahms(5)
(b) Barbara Biben(5)
(c) James T. Byrne, Jr.(5)
(d) Thomas J. Cusack(7)
(e) James W. Dederer(2)
(f) John A. Fibiger(2)
(g) David E. Gooding(2)
(h) James Inzerillo(5)
(i) Daniel E. Jund(7)
(j) Cecelia Kempler(5)
(k) Charles E. LeDoyen(2)
(l) John A. Paganelli(2)
(m) James B. Roszak(2)
(1) Filed with initial filing of the Form N-4 Registration Statement,
File No. 33-55152 (December 1, 1992).
(2) Filed with Pre-Effective Amendment No.1 to the Form N-4 Registration
Statement, File No. 33-55152
(February 10, 1993).
(3) Incorporated by reference to the like-numbered exhibit to Post-Effective
Amendment No.1 to the Form N-4 Registration Statement of Transamerica
Occidental Life Insurance Company's Separate Account VA-2L, File No.
33-49998 (April 30, 1993).
(4) Filed with Post-Effective Amendment No. 1 to the Form N-4 Registration
Statement, File No. 33-55152
(June 8, 1993).
(5) Filed with Post-Effective Amendment No. 2 to the Form N-4 Registration
Statement, File No. 33-55152
(April 29, 1994).
(6) Filed with Post-Effective Amendment No. 3 to the Form N-4 Registration
Statement File No. 33-55152
(April 29, 1995).
(7) Filed herewith.
Item 25. Directors and Officers of the Depositor
Name and Principal
Business Address Position and Offices with Depositor
C-2
C-2
<PAGE>
James W. Dederer, CLU* Chairman of the Board, General
Counsel, Corporate Secretary and
Director
John A. Paganelli** President, Chief Executive Officer and Director
Robert Rubinstein** Senior Vice President,
Chief Actuary & Assistant Secretary
William Hurst* Assistant Secretary
Sally Yamada Treasurer
Wilbur L. Fulmer* Tax Officer
Martin V. Mandato Second Vice President and Director of Operations
Alexander Smith, Jr.** Vice President and Controller
James D. Lamb, FSA Vice President and Actuary
Katherine Lomeli Vice President and Assistant Secretary
William J. Lyons** Vice President and Chief Underwriter
Alison B. Pettingall Vice President - Marketing
Joan L. Robi son** Second Vice President
Michael Kappos** Vice President & Chief Administrative Officer
Marc C. Abrahms*** Director
Thomas J. Cusack Director
David E. Gooding* Director
Daniel E. Jund Director
Charles E. LeDoyen* Director
John Fibiger* Director
James B. Roszak* Director
James Inzerillo++ Director
James T. Byrne, Jr.**** Director
Cecelia Kempler+++ Director
Barbara Biben++++ Director
* The address of the officers so indicated is 1150 South Olive Street, Los
Angeles, CA, 90015 ** The address of the officers so indicated is 575 Fifth
Avenue, New York, NY, 10017 *** The address of the director so indicated is 375
Willard Avenue, Newington, CT 06131 ****The address of the director so indicated
is 280 Park Avenue, New York, NY 10017 + The address of the director so
indicated is 1290 Avenue of the Americas, New York, NY 10104 ++ The address of
the director so indicated is 12 Wayburn Road, Scarsdale, NY 10583 (home
address-retired) +++ The address of the director so indicated is 125 West 55th
Street, New York, NY 10019 ++++ The address of the director so indicated is 311
Alexander Street, Rochester, NY 14604
The Depositor, First Transamerica Life Insurance Company (Transamerica), is
wholly owned by Transamerica Occidental Life Insurance Company. The Registrant
is a segregated asset account of Transamerica.
The following chart indicates the persons controlled by or under common
control with Transamerica.
TRANSAMERICA CORPORATION AND SUBSIDIARIES
WITH STATE OR COUNTRY OF INCORPORATION
Transamerica Corporation
ARC Reinsurance Corporation - Hawaii
*Coast Service Company - California
*Inter-America Corporation - California
*Mortgage Corporation of America - California
C-3
C-3
<PAGE>
Pyramid Insurance Company, Ltd. - Hawaii
Pacific Cable Ltd. - Bermuda
TC Cable, Inc. (25% ownership) - Delaware
River Thames Insurance Company Ltd. (51% ownership) - United Kingdom
RTI Holdings, Inc. - Delaware
*TCS Inc. - Delaware
Trans International Entities Inc. - Delaware
Transamerica Airlines, Inc. - Delaware
Transamerica Asset Management Group, Inc. - Delaware
*Transamerica Corporation (Oregon) - Oregon
ss.Transamerica Delaware, L.P. - Delaware
Transamerica Finance Group, Inc. - Delaware
BWAC Twelve, Inc. - Delaware
Transamerica Insurance Finance Corporation - Maryland
Transamerica Insurance Finance Corporation, California -
California
Transamerica Insurance Finance Corporation, Canada -
Canada
Transamerica Insurance Finance Company (U.K.) - Maryland
Transamerica Financial Services Finance Company - Delaware
(TFG owns 100% of common stock; TFC owns 100% of preferred stock)
Transamerica HomeFirst, Inc. - California
Transamerica Finance Corporation - Delaware
Arcadia General Insurance Company - Arizona
Arcadia National Life Insurance Company - Arizona
First Credit Corporation - Delaware
*Pacific Agency, Inc. - Indiana
Pacific Finance Loans - California
Pacific Service Escrow Inc. - Delaware
Transamerica Acceptance Corporation - Delaware
Transamerica Credit Corporation - Nevada
Transamerica Credit Corporation - Washington
Transamerica Financial Consumer Discount Company - Pennsylvania
Transamerica Financial Corporation - Nevada
Transamerica Financial Professional Services, Inc. - California
Transamerica Financial Services, Inc. - British Columbia
Transamerica Financial Services - California
NAB Services, Inc. - California
Transamerica Financial Services - Wyoming
Transamerica Financial Services Company - Ohio
Transamerica Financial Services, Inc. - Alabama
Transamerica Financial Services, Inc. - Arizona
Transamerica Financial Services, Inc. - Kansas
Transamerica Financial Services Inc. - Minnesota
Transamerica Financial Services, Inc. - New Jersey
Transamerica Financial Services, Inc. - Texas
Transamerica Financial Services (Inc.) - Oklahoma
Transamerica Financial Services of Dover, Inc. - Delaware
Transamerica Insurance Administrators, Inc. - Delaware
TELCO Holding Co., Inc. - Delaware
Transamerica Commercial Finance Corporation, I - Delaware
BWAC Credit Corporation - Delaware
BWAC International Corporation - Delaware
MRTO Holdings, Inc. - Delaware
Transamerica Business Credit Corporation - Delaware
Transamerica Inventory Finance Corporation - Delaware
Transamerica Commercial Finance Corporation - Delaware
TCF Asset Management Corporation - Colorado
BWAC Seventeen, Inc. - Delaware
Transamerica Commercial Finance Corporation, Canada -
Canada
TCF Asset Management Corporation, Canada - Canada
Macey (North) Limited - Ontario
TCF Commercial Leasing Corporation, Canada - Ontario
Transamerica Commercial Finance Canada, Limited - Ontario
Transamerica Insurance Administrators, Inc. - Delaware
Arcadia National Life Insurance Company - Arizona
BWAC Twenty, Inc. - Delaware
Arcadia General Insurance Company - Arizona
Transamerica Commercial Finance France S.A. - France
BWAC Twenty-One, Inc. - Delaware
Transamerica Commercial Holdings Limited - United Kingdom
Transamerica Trailer Leasing Limited -
United Kingdom (51%)
Transamerica Commercial Finance Limited - United Kingdom
Transamerica GmbH Inc. - Delaware
Transamerica Financieringsmattschappij B.V. - Netherlands
*Transamerica Finanzierungs GmbH - Germany
(BWAC Twenty-One, Inc./Transamerica GmbH Inc.)
Transamerica Finanzierungs GmbH - Germany
Transamerica Rental Finance Corporation - Delaware
TA Leasing Holding Co., Inc. - Delaware
Transamerica Leasing Inc. - Delaware
Transamerica Leasing Holdings, Inc. - Delaware
Intermodal Equipment, Inc. - Delaware
Transamerica Leasing N.V. - Belgium
Transamerica Leasing Srl. - Italy
Transamerica Container Acquisition Corporation - Delaware
Transamerica Container Acquisition II
Corporation - Delaware
Transamerica Distribution Services Inc. - Delaware
Transamerica Leasing Coordination Center - Belgium
Transamerica Leasing do Brasil S/C Ltda. - Brazil
Transamerica Leasing GmbH - Germany
Transamerica Leasing (HK) Ltd. - Hong Kong
Transamerica Leasing Limited - United Kingdom
ICS Terminals (U.K.) Limited - United Kingdom
Transamerica Leasing Pty. Ltd. - Australia
Transamerica Leasing (Canada) Inc. - Canada
Transamerica Tank Container Leasing Pty. Limited -
Australia
Transamerica Trailer Holdings I Inc. - Delaware
Transamerica Trailer Holdings II Inc. - Delaware
Transamerica Trailer Holdings III - Delaware
Transamerica Trailer Leasing AB - Sweden
Transamerica Trailer Leasing (Belgium) N.V. -
Belgium
Transamerica Trailer Leasing (Netherlands) B.V. -
Netherlands
Transamerica Trailer Leasing A/S - Denmark
Transamerica Trailer Leasing GmbH - Germany
Transamerica Trailer Leasing S.A. - France
Transamerica Trailer Leasing S.p.A. - Italy
Transamerica Trailer Spain, S.A. - Spain
Transamerica Transport Inc. - New Jersey
*Transamerica Homes, Inc. - Delaware
<PAGE>
Transamerica Information Management Services, Inc. - Delaware
Transamerica Insurance Corporation of California - California
Arbor Life Insurance Company - Arizona
Plaza Insurance Sales, Inc. - California
*Transamerica Advisors, Inc. - California
Transamerica Annuity Service Corporation - New Mexico
Transamerica Financial Resources, Inc. - Delaware
Financial Resources Insurance Agency of Texas, Inc. - Texas
TBK Insurance Agency of Ohio - Ohio
Transamerica Financial Resources Insurance Agency of Alabama, Inc. -
Alabama
Transamerica Financial Resources Insurance Agency of Massachusetts,
Inc. - Massachusetts
Transamerica Securities Sales Corporation - Maryland
Transamerica International Insurance Services, Inc. - Delaware
Home Loans & Finance Limited - United Kingdom
Transamerica Occidental Life Insurance Company - California
First Transamerica Life Insurance Company - New York
*NEF Investment Company - Delaware
Transamerica Life Insurance and Annuity Company - California
Transamerica Assurance Company - Colorado
Transamerica Occidental Life Insurance Company of Illinois
- Illinois
Transamerica Life Insurance Company of Canada - Canada
USA Administration Services, Inc. - Kansas
Transamerica Products, Inc. - California
Transamerica Leasing Ventures, Inc. - California
Transamerica Products I, Inc. - California
Transamerica Products II, Inc. - California
Transamerica Products IV, Inc. - California
Transamerica Service Company - Delaware
Transamerica International Holdings, Inc. - Delaware
TC Cable, Inc. (75% ownership)
*Transamerica International Limited - Canada
Transamerica Investment Services, Inc. - Delaware
*Transamerica Land Capital, Inc. - California
*Bankers Mortgage Company of California - California
Transamerica Overseas Finance Corporation N.V. - Netherlands Antilles
oTransamerica Real Estate Tax Service
Transamerica Flood Hazard Certification - New Jersey
Transamerica Realty Services, Inc. - Delaware
*The Gilwell Company - California
Pyramid Investment Corporation - Delaware
Transamerica Minerals Company - California
Transamerica Oakmont Corporation - California
Transamerica Properties, Inc. - Delaware
Transamerica Real Estate Management Co. - California
Transamerica Retirement Management Corporation - Delaware
Ventana Inn, Inc. - California
*Transamerica Systems Corporation - Delaware
Transamerica Telecommunications Corporation - Delaware
<PAGE>
*Designates INACTIVE COMPANIES
oA Division of Transamerica Corporation
ss.Limited Partner; Transamerica Corporation is General Partner
Item 27. Number of Policy Owners
As of April 1 , 1996, there were 1,369 Owners of Non-Qualified
Individual Policies and 1,009 Owners of Qualified Individual Policies.
Item 28. Indemnification
Transamerica's Bylaws provide in Article VIII as follows:
Section 1. Indemnification: (a) The Corporation shall indemnify to the
fullest extent now or hereafter provided for or permitted by law each person
involved in, or made or threatened to be made a party to, any action, suit,
claim or proceeding, whether civil or criminal, including any investigative,
administrative, legislative, or other proceeding, and including any action by or
in the right of the Corporation or any other corporation, or any partnership,
joint venture, trust, employee benefit plan, or other enterprise (any such
entity, other than the Corporation, being hereinafter referred to as an
"Enterprise"), and including appeals therein (any such action or process being
hereinafter referred to as a "Proceeding"), by reason of the fact that such
person, such person's testator or intestate (i) is or was a director or officer
of the Corporation, or (ii) is or was serving, at the request of the
Corporation, as a director, officer, or in any other capacity, of any other
Enterprise, against any and all judgments, amounts paid in settlement, and
expenses, including attorneys' fees, actually and reasonably incurred as a
result of or in connection with any Proceeding, except as provided in Subsection
(b) below.
(b) No indemnification shall be made to or on behalf of any such person
if a judgment or other final adjudication adverse to such person establishes
that such person's acts were committed in bad faith or were the result of active
and deliberate dishonesty and were material to the cause of action so
adjudicated, or that such person personally gained in fact a financial profit or
other advantage to which such person was not legally entitled. In addition, no
indemnification shall be made with respect to any Proceeding initiated by any
such person against the Corporation, or a director or officer of the
Corporation, other than to enforce the terms of this Article VIII, unless such
Proceeding was authorized by the Board of Directors. Further, no indemnification
shall be made with respect to any settlement or compromise of any Proceeding
unless and until the Corporation has consented to such settlement or compromise.
(c) Written notice of any Proceeding for which indemnification may be
sought by any person shall be given to the Corporation as soon as practicable.
The Corporation shall then be permitted to participate in the defense of any
such proceeding or, unless conflicts of interest or position exist between such
person and the Corporation in the conduct of such defense, to assume such
defense. In the event that the Corporation assumes the defense of any such
Proceeding, legal counsel selected by the Corporation shall be reasonably
acceptable to such person. After such an assumption, the Corporation shall not
be liable to such person for any legal or other expenses subsequently incurred
unless such expenses have been expressly authorized by the Corporation. In the
event that the Corporation participates in the defense of any such Proceeding,
such person may select counsel to represent him in regard to such a Proceeding;
however, such person shall cooperate in good faith with any request that common
counsel be utilized by the parties to any Proceeding who are similarly situated,
unless to do so would be inappropriate due to actual or potential differing
interests between or among such parties.
(d) In making any determination regarding any person's entitlement to
indemnification hereunder, it shall be presumed that such person is entitled to
indemnification, and the Corporation shall have the burden of proving the
contrary.
Section 2. Advancement of Expenses. Except in the case of a Proceeding
against a director, officer, or other person specifically approved by the Board
of Directors, the Corporation shall, subject to Section 1 of this Article VIII
above, pay expenses actually and reasonably incurred by or on behalf of such a
person in defending any Proceeding in advance of the final disposition of such
Proceeding. Such payments shall be made promptly upon receipt by the
Corporation, from time to time, of a written demand by such person for such
advancement, together with an undertaking by or on behalf of such person to
repay any expenses so advanced to the extent that the person receiving the
advancement is ultimately found not to be entitled to indemnification for part
or all of such expenses.
Section 3. Rights Not Exclusive. The rights to indemnification and
advancement of expenses granted by or pursuant to this Article VIII (i) shall
not limit or exclude, but shall be in addition to, any other rights which may be
granted by or pursuant to any statute, corporate charter, by-law, resolution of
stockholders or directors or agreement, (ii) shall be deemed to constitute
contractual obligations of the Corporation to any person who serves in a
capacity referred to in Section 1 of this Article VIII at any time while this
Article VIII is in effect, (iii) shall continue to exist after the repeal or
modification of this Article VIII with respect to events occurring prior thereto
and (iv) shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of the estate, spouse, heirs, executors,
administrators or assigns of such person. It is the intent of this Article VIII
to require the Corporation to indemnify the persons referred to herein for the
aforementioned judgments, amounts paid in settlement, and expenses, including
attorneys' fees, in each and every circumstance in which such indemnification
could lawfully be permitted by express provisions of by-laws, and the
indemnification required by this Article VIII shall not be limited by the
absence of an express recital of such circumstances.
Section 4. Indemnification of Employees and Others. The Corporation
may, from time to time, with the approval of the Board of Directors, and to the
extent authorized, grant rights to indemnification, and to the advancement of
expenses, to any employee or agent of the Corporation or to any person serving
at the request of the Corporation as a director or officer, or in any other
capacity, of any other Enterprise, to the fullest extent of the provisions of
this Article VIII with respect to the indemnification and advancement of
expenses of directors and officers of the Corporation.
Section 5. Authorization of Contracts. The Corporation may, with the
approval of the Board of Directors, enter into an agreement with any person who
is, or is about to become, a director, officer, employee or agent of the
Corporation, or who is serving, or is about to serve, at the request of the
Corporation, as a director, officer, or in any other capacity, of any other
Enterprise, which agreement may provide for indemnification of such person and
advancement of expenses to such person upon terms, and to the extent, not
prohibited by law. The failure to enter into any such agreement shall not affect
or limit the rights of any such person under this Article VIII.
Section 6. Insurance. The Corporation may purchase and maintain
insurance to indemnify the
Corporation and any person eligible to be indemnified under this Article VIII
within the limits permitted by law.
Section 7. Severability. If any provision of this Article VIII is
determined at any time to be
unenforceable in any respect, the other provisions shall not in any way be
affected or impaired thereby.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling person of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by the director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
The directors and officers of First Transamerica Life Insurance Company
are covered under a Directors and Officers liability program which includes
direct coverage to directors and officers (Coverage A) and for corporate
reimbursement (Coverage B) to reimburse the Company for indemnification of its
directors and officers. Such directors and officers are indemnified for loss
arising from any covered claim by reason of any Wrongful Act in their capacities
as directors or officers. The term "loss" means any amount which the insureds
are legally obligated to pay for a claim for Wrongful Acts. The term "Wrongful
Acts" means any breach of duty, neglect, error, misstatement, misleading
statement or omission actually or allegedly caused, committed or attempted by a
director or officer while acting individually or collectively in their capacity
as such, claimed against them solely by reason of their being directors and
officers. The limit of liability under the program is $65,000,000 for Coverage A
and $55,000,000 for Coverage B for the policy year 11/25/93 to 11/25/94.
Coverage B is subject to a self insured retention of $5,000,000. The primary
policy is with Corporate Officers and Directors Assurance Holding Limited
(CODA).
Item 29. Principal Underwriter
Transamerica Securities Sales Corporation (TSSC) is the underwriter of
the Policies as defined in the Investment Company Act of 1940.
POSITION AND OFFICES WITH
NAMES AND PRINCIPAL TRANSAMERICA SECURITIES SALES
BUSINESS ADDRESS CORPORATION
Barbara A. Kelley President and Director
Dan S. Trivers Senior Vice President
Nicki Bair Vice President
Chris Shaw Second Vice President
Regina M. Fink Secretary and Director
Benjamin Tang Treasurer
James Roszak Director
Nooruddin Veerjee Director
*The address of the officers so indicates is 1150 South Olive Street, Los
Angeles, CA 90015.
C-9
C-9
<PAGE>
C-10
C-10
<PAGE>
C-11
C-11
<PAGE>
C-12
C-12
<PAGE>
C-13
C-13
<PAGE>
The following table lists the amounts of commissions paid to the
principal underwriter during the last fiscal year.
<TABLE>
<CAPTION>
Name of
Principal Net Underwriting Compensation on Brokerage
Underwriter* Discounts & Commission Redemption Commissions Compensation
<S> <C> <C> <C> <C>
TSSC -0- -0- $2,355,155.93 -0-
TFR -0- -0- 286.00 -0-
</TABLE>
Item 30. Location and Accounts and Records
All accounts and records required to be maintained by Section 31(a) of
the 1940 Act and the rules under it are maintained by Transamerica or the
Service Office at their administrative offices.
Item 31. Management Services
All management contracts are discussed in Parts A or B.
Items 32. Undertakings
(a) Registrant undertakes that it will file a post-effective amendment to
this registration statement as frequently as necessary to ensure that
the audited financial statements in the registration statement are
never more than 16 months old for so long as payments under the
variable annuity contracts may be accepted.
(b) Registrant undertakes that it will include either (1) as part of any
Application to purchase a Policy offered by the Prospectus, a space
that an applicant can check to request a Statement of Additional
Information, or (2) a post card or similar written communication
affixed to or included in the Prospectus that the applicant can remove
to send for a Statement of Additional Information.
C-14
C-14
<PAGE>
(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available
under this Form promptly upon written or oral request to Transamerica
at the address or phone number listed in the Prospectus.
C-15
C-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, First
Transamerica Life Insurance Company certifies that this Post-Effective Amendment
No. 5 to the Registration Statement meets all of the requirements for
effectiveness pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Post- Effective Amendment No. 5 to the Registration Statement
to be signed on its behalf by the undersigned in the City of Los Angeles, State
of California on the 26th day of April, 1996.
SEPARATE ACCOUNT VA-2LNY FIRST TRANSAMERICA
OF FIRST TRANSAMERICA LIFE INSURANCE COMPANY
LIFE INSURANCE COMPANY (DEPOSITOR)
(REGISTRANT)
BY:________________________
James W. Dederer,
Chairman of the Board,
General Counsel and
Corporate Secretary
As Required by the Securities Act of 1933, this Post-Effective
Amendment No. 5 to the Registration
Statement has been signed by the following persons in the capacities and on
the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
* President, Chief Executive Officer and April 26, 199 6
- ------------------------------------------- ---------------
John A. Paganelli Director
* Vice President and Controller April 26, 199 6
- ------------------------------------------- ---------------
Alexander Smith (Principal Financial Officer and
Principal Accounting Officer)
* Director April 26, 1996
Marc C. Abrahms
* Director April 26, 1996
Barbara Biben
* Director April 26, 199 6
- ------------------------------------------- -----------------
James T. Byrne, Jr.
__________________* Director April 26, 1996
Thomas J. Cusack
* Director April 26, 199 6
- ------------------------------------------ -----------------
John Fibiger
* Director April 26, 199 6
- ------------------------------------------ -----------------
David E. Gooding
<PAGE>
* Director April 26, 1996
James Inzerillo
_________________* Director April 26, 1996
----------------
Daniel E. Jund
* Director April 26, 199 6
- --------------------------------------- -----------------
Cecilia Kempler
* Director April 26, 199 6
- ---------------------------------------- -----------------
Charles E. LeDoyen
* Director April 26, 199 6
- ----------------------------------------- -----------------
James B. Roszak
</TABLE>
- -------------------------
*By: James W. Dederer
On April 26, 1996 as Attorney-in-Fact pursuant to powers of
attorney previously filed and filed herewith, and in his own capacity as
Chairman
of the Board, General Counsel, Corporate Secretary and Director.
<PAGE>
Registration No. 33-55152
811-7368
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SEPARATE ACCOUNT VA-2LNY
OF
FIRST TRANSAMERICA
LIFE INSURANCE COMPANY
EXHIBITS
TO
POST-EFFECTIVE AMENDMENT NO. 5
TO
THE REGISTRATION STATEMENT ON FORM N-4
UNDER
THE SECURITIES ACT OF 1933
AND
THE INVESTMENT COMPANY ACT OF 1940
APRIL 1996
C-18
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
No. of Exhibit No.
(4) Policy Form and Endorsement
(9) (a) Opinion and Consent of Counsel C-22
(10) (a) Consent of Counsel C-23
(b) Consent of Independent Auditors C-24
(15) (d) Power of Attorney C-26
(i) Power of Attorney C-27
C-19
C-19
<PAGE>
Exhibit (4)
Policy Form and Endorsement
<PAGE>
[GRAPHIC OMITTED]
Home Office:
575 Fifth Avenue
New York, NY 10017-2422
A Stock Company
ANNUITANT [John Doe] [Specimen] POLICY NUMBER
ANNUITY DATE [January 1, 2044] [January 1, 1994] POLICY DATE
READ THIS POLICY CAREFULLY
This policy is a legal contract between the Owner and First Transamerica Life
Insurance Company (hereinafter referred to as "we", "us", "our" and the
"Company").
The Company will provide annuities and other benefits as set out in this policy,
subject to its provisions. This policy is delivered in, and is governed by, the
laws of the State of New York.
RIGHT TO CANCEL - The Owner may cancel this policy by delivering or mailing
written notice or sending a telegram to: (a) the agent through whom the policy
was purchased; or (b) First Transamerica Life Insurance Company, Annuity Service
Center, P.O. Box 30757, Los Angeles, California 90030-0757, before midnight of
the tenth day after receipt of the policy. Notice given by mail and the return
of the policy by mail, properly addressed and postage prepaid, will be deemed by
us to have been made on the date the notice is postmarked. We will refund the
Policy Value determined as of the date the notice is postmarked, plus the
difference between the premiums paid, including any fees or other charges, and
the amount allocated to the separate account, within seven days after we receive
such notice to cancel and the returned policy.
PAYMENTS AND VALUES PROVIDED UNDER THIS POLICY WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT.
The smallest annual rate of investment return which would have to be earned on
the assets of the Variable Account so that the dollar amount of variable annuity
payments will not decrease is 5.40%. A daily charge corresponding to an annual
charge of 1.25% per year is applied to the assets of the Variable Account by the
Company, plus a current yearly charge of .15% plus $30 to cover the cost of
administering the policy. Please refer to the Variable Account provision,
beginning on Page 9 for more details.
Signed for the Company at New York, New York, to be effective as of the Policy
Date.
FIRST TRANSAMERICA LIFE INSURANCE COMPANY
[GRAPHIC OMITTED]
FLEXIBLE PREMIUM MULTI-FUNDED DEFERRED ANNUITY POLICY
Variable and Fixed Dollar Annuity Options
Separate Account Investments
Non-Participating - No Annual Dividends
3-501 11-194 Page 1
<PAGE>
POLICY DATA
- --------------------------------------------------------------
POLICY INFORMATION
- ---------------------------------------------------------------
- --------------------------------------------------------------
Policy Number: [Specimen] Policy Status: [Non-Qualified]
Policy Date: [January 1, 1994]
Annuity Date: [January 1, 2044] Initial Premium: [$20,000.00]
- --------------------------------------------------------------
- --------------------------------------------------------------
OWNER INFORMATION ANNUITANT INFORMATION
- --------------------------------------------------------------
Owner: [John Doe] Annuitant: [John Doe]
Date of Birth:[January 1, 1959] Date of Birth: [January 1, 1959]
Tax ID Number:[999-99-9999] Tax ID Number: [999-99-9999]
- --------------------------------------------------------------
- --------------------------------------------------------------
JOINT OWNER INFORMATION CONTINGENT ANNUITANT INFORMATION
- --------------------------------------------------------------
Joint Owner: [Jane Doe] Contingent Annuitant: [N/A]
Date of Birth:[January 1, 1959] Date of Birth: [N/A]
Tax ID Number:[999-99-9999] Tax ID Number: [N/A]
- --------------------------------------------------------------
- --------------------------------------------------------------
ALLOCATION OF INITIAL PREMIUM
- ---------------------------------------------------------------
- --------------------------------------------------------------
[Dreyfus Money Market Portfolio: 10%]
[Dreyfus Managed Assets Portfolio: 10%]
[Dreyfus Zero Coupon Portfolio: 10%]
[Dreyfus Quality Bond Portfolio: 10%]
[Dreyfus Small Cap Portfolio: 10%]
[Dreyfus Capital Appreciation Portfolio: 10%]
[Dreyfus Growth & Income Portfolio: 10%]
[Dreyfus International Equity Portfolio: 10%]
[Dreyfus Stock Index Fund: 10%]
[Dreyfus Socially Responsible Fund: 10%]
[Dreyfus International Value Portfolio: 00%]
[Dreyfus Disciplined Stock Fund: 00%]
[Dreyfus Small Company Stock Fund: 00%]
Total Allocations: 100%
This policy reflects the information with which your annuity has been set up.If
you wish to change/correct any information on this page, please call us
immediately at 1-(800) 258-4261.
ADDITIONAL PREMIUM INFORMATION
o MINIMUM INITIAL PREMIUM: $5,000.00
o PER PAYMENT MINIMUM: $500.00
o MAXIMUM TOTAL PREMIUM: $1,000,000.00
ANNUITY INFORMATION
o ANNUITY FORM: LIFE ANNUITY WITH PERIOD CERTAIN OF 120 MONTHS
o PAYMENT OPTION: 100% FROM VARIABLE ANNUITY PAYMENT OPTION
SERVICE OFFICE: First Transamerica Life Insurance Company
Annuity Service Center
P.O. Box 30757
Los Angeles, California 90030-0757
1-(800) 258-4261
3-501 11-194 CONTINUED ON THE FOLLOWING PAGE Page 2
<PAGE>
POLICY DATA (Continued)
CHARGES AND FEES - Current charges and fees at the time we issued this policy
are shown below.
o MORTALITY AND EXPENSE RISK CHARGE: A daily charge equal to
0.003403%, corresponding to an annual charge of 1.25%, of the
assets in each Sub-account of the Variable Account held for this
policy.
o ADMINISTRATIVE EXPENSE CHARGE: A daily charge equal to 0.000411%,
corresponding to an annual charge of 0.15%, of the assets in each
Sub-account of the Variable Account held for this policy.
o TRANSFER FEE: Currently, there is no Transfer Fee. However, prior to
the Annuity Date, we reserve the right to impose a Transfer Fee equal
to the lesser of 2% of the amount of the transfer, or $10.00, for each
transfer in excess of twelve made during a Policy Year.
o CONTINGENT DEFERRED SALES LOAD: Unless waived as provided in this
policy, a Contingent Deferred Sales Load may apply when a withdrawal
from, or surrender of, the policy occurs. The Contingent Deferred Sales
Load is calculated as a percentage of the portion of the Premium
withdrawn. The Contingent Deferred Sales Load percentage varies
according to the number of complete Policy Years between the Policy
Year of receipt of the Premium and the Policy Year of withdrawal of all
or a portion of that Premium. The table of Contingent Deferred Sales
Load percentages are shown below.
Number of Contingent Deferred Sales Load
Complete Policy Years as a Percentage of Premium
Less than 1 year................................................6%
1 year but less than 2 years....................................6%
2 years but less than 3 years...................................5%
3 years but less than 4 years...................................5%
4 years but less than 5 years...................................4%
5 years but less than 6 years...................................4%
6 years but less than 7 years...................................2%
7 or more years.................................................0%
o POLICY FEE: Prior to the Annuity Date, an annual fee equal to the
lesser of 2% of the Policy Value; or $30, will be deducted from the
Policy Value on the last business day of each Policy Year. There will
be no Policy Fee deducted for a Policy Year if the Policy Value exceeds
$50,000 on the last business day of that Policy Year, or if earlier, as
of the date the policy is surrendered.
o ANNUITY FEE: After the Annuity Date, an annual Annuity Fee equal to $30
will be deducted in equal amounts ($2.50 per month) from each annuity
payment made under the Variable Annuity Payment Option.
3-501 11-194 END OF POLICY DATA Page 2A
<PAGE>
SCHEDULE A
The following is a list of the Sub-accounts of the Variable Account available
under this policy at the time of issue.
[Dreyfus Money Market Portfolio]
[Dreyfus Managed Assets Portfolio]
[Dreyfus Zero Coupon Portfolio]
[Dreyfus Quality Bond Portfolio]
[Dreyfus Small Cap Portfolio]
[Dreyfus Capital Appreciation Portfolio]
[Dreyfus Growth and Income Portfolio]
[Dreyfus International Equity Portfolio]
[Dreyfus Stock Index Fund]
[Dreyfus Socially Responsible Fund]
[Dreyfus International Value Portfolio]
[Dreyfus Disciplined Stock Fund]
[Dreyfus Small Company Fund]
3-501 11-194 Page 2B
<PAGE>
TABLE OF CONTENTS
PAGE
POLICY DATA........................................................... 2 & 2A
SCHEDULE A................................................................ 2B
DEFINITION OF TERMS....................................................... 5
PREMIUM PAYMENTS PROVISIONS
Payment and Acceptance of Premiums...................................... 8
Allocation of Net Premiums.............................................. 8
Initial Premium......................................................... 8
Flexibility of Premium Payments......................................... 8
Change in Premium Allocation............................................ 8
Premium Payment Limitations............................................. 8
THE VARIABLE ACCOUNT
The Variable Account.................................................... 9
Sub-accounts............................................................ 9
Variable Accumulation Units..............................................10
Net Investment Factor....................................................10
TRANSFER PROVISIONS
Transfers Between Sub-accounts...........................................11
Transfer Allocation......................................................11
Minimum Transfer Amount..................................................11
Transfer Limitations.....................................................11
Effect on Variable Accumulation Units....................................11
WITHDRAWAL PROVISIONS
Partial Withdrawals......................................................12
Withdrawal Allocation....................................................12
Minimum Withdrawal Amount................................................12
Withdrawal Limitations...................................................12
Partial Withdrawal of Funds Without Charges..............................12
Effect on Variable Accumulation Units....................................12
SURRENDER PROVISIONS.......................................................13
CONTINGENT DEFERRED SALES LOAD
Contingent Deferred Sales Load...........................................13
Waiver of Contingent Deferred Sales Load.................................14
PREMIUM TAXES, CHARGES, FEES AND SERVICES
Premium Taxes............................................................14
Mortality and Expense Risk Charge........................................14
Administrative Expense Charge............................................15
Transfer Fee.............................................................15
Policy Fee...............................................................15
Annuity Fee..............................................................15
Limitation on Charges and Fees...........................................15
Statements of Account....................................................15
3-501 11-194 Page 3
<PAGE>
PAGE
ANNUITY PROVISIONS
Date Annuity Payments Start..............................................16
Change of Annuity Date...................................................16
Election to Change Annuity Form and Payment Option.......................16
Minimum Amount of Monthly Annuity........................................16
Immediate Annuity Certificates...........................................16
Change of Payee..........................................................16
ANNUITY FORMS..............................................................17
FIXED ANNUITY PAYMENT OPTION...............................................18
VARIABLE ANNUITY PAYMENT OPTION
Variable Annuity Payment Option..........................................18
Amount of First Variable Annuity Payment.................................18
Amount of Subsequent Variable Annuity Payments...........................18
Annuity Unit Value.......................................................19
Transfers of Variable Annuity Units......................................19
DEATH BENEFIT PROVISIONS
If Annuitant Dies Before Annuity Starts..................................20
If Owner Dies Before Annuity Starts......................................20
If Annuitant Dies After Annuity Starts...................................20
If Owner Dies After Annuity Starts.......................................21
Joint Ownership..........................................................21
Proof of Death...........................................................21
BENEFICIARY PROVISIONS
Designation of Beneficiary...............................................21
Change of Beneficiary....................................................21
Death of Beneficiary.....................................................21
Successive Beneficiaries.................................................21
GENERAL PROVISIONS
Entire Contract..........................................................22
Misstatement of Age and Sex..............................................22
Proof of Existence and Age...............................................22
Changes in the Policy....................................................22
Incontestability.........................................................22
Assignment of the Policy.................................................22
Payments by the Company..................................................22
Delay of Payment or Transfer.............................................22
Facility of Payment......................................................22
Minimum Benefits.........................................................22
Protection of Benefits/Proceeds..........................................23
Notices and Directions...................................................23
Non-Participating........................................................23
Voting Rights............................................................23
APPENDIX - ANNUITY RATE TABLES.............................................23
3-501 11-194 Page 4
<PAGE>
DEFINITION OF TERMS
Age - The age nearest birthday. The Ages of the Owner, Joint Owner (if any), and
of the Annuitant at the time we issued this policy are shown on the Policy Data
page.
Allowed Amount - The amount that may be withdrawn each Policy Year without
incurring a Contingent Deferred Sales Load, as described under the Partial
Withdrawal of Funds without Charges provision of the policy.
Annuitant - The person named on the Policy Data page. The Annuitant is the
person: (a) whose life is used to determine the amount of monthly annuity
payments on the Annuity Date; and (b) who is the payee designated to receive
monthly annuity payments, unless such payee is changed by the Owner. The
Annuitant cannot be changed after this policy has been issued, except upon the
Annuitant's death prior to the Annuity Date if a Contingent Annuitant has
previously been named.
Annuitant's Beneficiary - The person or persons named by the Owner who may
receive the Death Benefit under the policy, if: (a) the Annuitant is not the
Owner, there is no named Contingent Annuitant and the Annuitant dies before the
Annuity Date and before the death of the Owner; or (b) the Annuitant dies after
the Annuity Date under an Annuity Form containing a period certain option.
Annuity Date - The date shown on the Policy Data page. The Annuity Date is the
date on which the Annuity Purchase Amount is applied to determine the amount of
monthly annuity payments under the Annuity Form and Payment Option chosen by the
Owner. Monthly annuity payments will start on the first day of the month
immediately following the Annuity Date. The Annuity Date may be changed by the
Owner as provided under the Annuity Provisions.
Annuity Purchase Amount - The Annuity Purchase Amount is the amount applied as a
single premium to provide an annuity under the Annuity Form and Payment Option
elected by the Owner. The Annuity Purchase Amount is equal to the Policy Value,
less any applicable Contingent Deferred Sales Load and less any applicable
premium taxes. In determining the Annuity Purchase Amount, we will waive the
Contingent Deferred Sales Load if the Annuity Form elected involves life
contingencies and the Annuity Date occurs on or after the third Policy
Anniversary.
Annuity Year - A one-year period starting on the Annuity Date and, after that,
each succeeding one-year period.
Calendar Year - A one-year period beginning January 1 and ending December 31.
Cash Surrender Value - The amount payable to the Owner if the policy is
surrendered on or before the Annuity Date. The Cash Surrender Value is equal to
the Policy Value, less the Policy Fee, if any, and less any applicable
Contingent Deferred Sales Load and applicable premium taxes.
Code - The U.S. Internal Revenue Code of 1986, as amended, and the rules and
regulations issued thereunder.
Contingent Annuitant - The person, if any, named on the Policy Data page. The
Contingent Annuitant is the person who: (a) becomes the Annuitant if the
Annuitant dies before the Annuity Date; or (b) may receive benefits under the
policy if the Annuitant dies after the Annuity Date under an Annuity Form
containing a contingent annuity option. The Contingent Annuitant may be changed
by the Owner at any time while the Annuitant is living and before the Annuity
Date. In no event may a Contingent Annuitant be elected if the Owner and the
Annuitant are the same person.
Death Benefit - The benefit that may be payable by us to the Owner's or
Annuitant's Beneficiary, as applicable, if the Owner or Annuitant dies before
the Annuity Date. The Death Benefit will be equal to the greater of: (a) the
Policy Value; or (b) the sum of all Premiums paid by the Owner, less the sum of
all withdrawals and any applicable premium taxes. The Death Benefit will be
determined as of the end of the Valuation Period during which the last of the
following items is received by us at our Service Office: (i) proof of death of
the Owner or Annuitant; and (ii) the written notice of the method of settlement
elected by the Beneficiary.
3-501 11-194 Page 5
<PAGE>
Free Look Period - The period described in the Right To Cancel provision during
which the policy may be canceled and treated as void from the Policy Date.
Net Investment Factor - A formula that measures the investment
performance of a Sub-account from one Valuation Period to
the next.
Net Premium - A Premium reduced by any applicable premium tax.
Owner - The person or persons who, while living, controls all rights and
benefits under the policy.
Owner (Joint Owners) - The person or persons named on the Policy Data page. The
Owner is the person who, while living, controls all rights and benefits under
the policy. Joint Owners own the policy equally with the right of survivorship.
The right of survivorship means that if a Joint Owner dies, his or her interest
in the policy will pass to the surviving Joint Owner in accordance with the
Death Benefit Provisions on page 20. This policy may not have Joint Owners if
the Status shown on the Policy Data page is Qualified.
Owner's Beneficiary - If the Owner is an individual, the person who becomes the
Owner of the policy if the Owner dies. If the policy has Joint Owners, the
surviving Joint Owner will be deemed the Owner's Beneficiary.
Policy Anniversary - The same month and day as the Policy Date in each
Calendar Year after the Calendar Year in which the
Policy Date occurs.
Policy Date - The date the policy becomes effective.
The Policy Date is shown on the Policy Data page.
Policy Value - The total dollar amount of all Variable Accumulation Units under
each Sub-account of the Variable Account held for this policy prior to the
Annuity Date. The Variable Accumulated Value prior to the Annuity Date is equal
to:
(a) Net Premiums allocated to the Sub-accounts; plus or minus
(b) any increase or decrease in the value of the assets of the Sub-accounts
due to investment results; less (c) the daily Mortality and Expense Risk
Charge; less (d) the daily Administrative Expense Charge; less (e)
reductions for the annual Policy Fee deducted on the last business day of
each Policy Year; less (f) any applicable Transfer Fees; and less (g)
withdrawals from the Sub-accounts.
Policy Year - The 12-month period starting on the Policy Date and ending with
the day before the Policy Anniversary, and each 12-month period thereafter. The
first Policy Year for any Net Premium is the Policy Year in which the Premium is
received by us at our Service Office.
Portfolio - An investment portfolio underlying one of the Sub-accounts of the
Variable Account.
Premium - An amount paid to us as consideration for the benefits provided under
the policy.
Status (Qualified and Non-Qualified) - The Status shown on the Policy Data page.
This policy has a Qualified status [i.e., Qualified IRA or Qualified 401(a)] if
it is issued in connection with a retirement plan or program which receives
favorable federal income tax treatment under the Code. Any policy not qualified
to receive such favorable federal income tax treatment under the Code has a
Non-Qualified status.
Sub-account - A subdivision of the Variable Account investing solely in shares
of one of the Portfolios. The investment performance of each Sub-account is
linked directly to the investment performance of the underlying Portfolio.
3-501 11-194 Page 6
<PAGE>
Valuation Day - Any day the New York Stock Exchange is open for trading and
that is a regular business day of our Service Office.
Valuation Period - The time interval between the closing (generally 4:00 p.m.
Eastern Time) of the New York Stock Exchange on consecutive Valuation Days.
Variable Account - The Variable Account (Separate Account VA-2LNY) is a separate
account established and maintained by us for the investment of a portion of our
assets pursuant to Section 4240 of the New York Insurance Law and Regulation 47
(Part 50). The Variable Account contains several Sub-accounts to which Net
Premiums may be allocated.
Variable Accumulation Unit - A unit of measure used to determine the Policy
Value prior to the Annuity Date. The value of a Variable Accumulation Unit
varies with each Sub-account.
Variable Annuity Unit - A unit of measure used to determine the amount of the
second and each subsequent monthly variable annuity payment from the Variable
Account. The value of a Variable Annuity Unit varies with each Sub-account.
We, us, our and Company - First Transamerica Life Insurance Company, a stock
insurance company, with its Home Office in New York, New York.
3-501 11-194 Page 7
<PAGE>
PREMIUM PAYMENT PROVISIONS
Payment and Acceptance of Premiums - All Premiums must be paid to us at our
Service Office or to an agent or person authorized by us to receive such
payments. A confirmation will be issued to the Owner upon acceptance of each
Premium.
Allocation of Net Premiums - Net Premiums may be allocated to one or more
Sub-accounts of the Variable Account, as directed by the Owner. The Variable
Account is described in detail starting on Page 9.
Initial Premium - The Initial Premium will be credited within two business days
of the later of: (a) the date we receive sufficient information, in a form and
manner acceptable to us, to issue this policy; or (b) the date our Service
Office receives the Initial Premium.
The allocation of the Initial Premium must be in whole number percentages and
must provide a minimum allocation of at least 10% of the Initial Premium to each
Sub-account of the Variable Account selected by the Owner. The allocation
percentages will be further subject to a minimum dollar amount of $1,000 to each
Sub-account chosen.
Flexibility of Premium Payments - Additional Premiums to this policy may be paid
by the Owner at any time after the Initial Premium and before the Annuity Date.
Each Net Premium (derived from additional Premiums) will be credited on the date
such payment is received by us at our Service Office, provided that: (a) such
additional Premium is not less than the Per Payment Minimum shown on the Policy
Data page; and (b) any portion of the Net Premium allocated to a Sub-account of
the Variable Account with a zero balance, may not be less than $1,000. Each Net
Premium will be subject to the allocation percentages in effect at the time of
receipt of such Premium. We reserve the right to return to the Owner any
additional Premium which does not meet the conditions described in (a) and (b)
of this paragraph.
Change in Premium Allocation - The Owner may, at any time before the Annuity
Date, change the allocation percentages in effect for future Premium payments.
The allocation percentages must be in whole number percentages and must provide
a minimum allocation of at least 10% of future Premiums to each Sub-account of
the Variable Account selected by the Owner.
The change in allocation will be processed as of the date the request for such
change, in a form and manner acceptable to us, is received at our Service
Office. The change in allocation will take effect with the first Premium
received with or after receipt of the notice of change and will continue in
effect for future Premiums until subsequently changed.
Premium Payment Limitations - In no event may the sum of all Premiums paid
during any taxable year exceed the limits imposed by any applicable federal or
state law, rules or regulations. In no event may the total of all Premiums paid
during the life of the policy exceed the Maximum Total Premium amount, shown on
the Policy Data page, without our approval.
We reserve the right to return to the Owner any portion of a Premium which would
cause the total of all Premiums paid to the policy to exceed the Maximum Total
Premium amount shown on the Policy Data page.
3-501 11-194 Page 8
<PAGE>
PREMIUM PAYMENT PROVISIONS
Payment and Acceptance of Premiums - All Premiums must be paid to us at our
Service Office or to an agent or person authorized by us to receive such
payments. A confirmation will be issued to the Owner upon acceptance of each
Premium.
Allocation of Net Premiums - Net Premiums may be allocated to one or more
Sub-accounts of the Variable Account, as directed by the Owner. The Variable
Account is described in detail starting on Page 9.
Initial Premium - The Initial Premium will be credited within two business days
of the later of: (a) the date we receive sufficient information, in a form and
manner acceptable to us, to issue this policy; or (b) the date our Service
Office receives the Initial Premium.
The allocation of the Initial Premium must be in whole number percentages and
must provide a minimum allocation of at least 10% of the Initial Premium to each
Sub-account of the Variable Account selected by the Owner. The allocation
percentages will be further subject to a minimum dollar amount of $1,000 to each
Sub-account chosen.
The Net Premium (derived from the Initial Premium) will first be allocated to
the Money Market Sub-account and will remain in that Sub-account until the end
of the Free Look Period. After the end of the Free Look Period, the total dollar
value of the Variable Accumulation Units held in the Money Market Sub-account
attributable to such Net Premium will be allocated to the Sub-accounts selected
by the Owner.
Flexibility of Premium Payments - Additional Premiums to this policy may be paid
by the Owner at any time after the Initial Premium and before the Annuity Date.
Each Net Premium (derived from additional Premiums) will be credited on the date
such payment is received by us at our Service Office, provided that: (a) such
additional Premium is not less than the Per Payment Minimum shown on the Policy
Data page; and (b) any portion of the Net Premium allocated to a Sub-account of
the Variable Account with a zero balance, may not be less than $1,000. Each Net
Premium will be subject to the allocation percentages in effect at the time of
receipt of such Premium. We reserve the right to return to the Owner any
additional Premium which does not meet the conditions described in (a) and (b)
of this paragraph.
Change in Premium Allocation - The Owner may, at any time before the Annuity
Date, change the allocation percentages in effect for future Premium payments.
The allocation percentages must be in whole number percentages and must provide
a minimum allocation of at least 10% of future Premiums to each Sub-account of
the Variable Account selected by the Owner.
The change in allocation will be processed as of the date the request for such
change, in a form and manner acceptable to us, is received at our Service
Office. The change in allocation will take effect with the first Premium
received with or after receipt of the notice of change and will continue in
effect for future Premiums until subsequently changed.
Premium Payment Limitations - In no event may the sum of all Premiums paid
during any taxable year exceed the limits imposed by any applicable federal or
state law, rules or regulations. In no event may the total of all Premiums paid
during the life of the policy exceed the Maximum Total Premium amount, shown on
the Policy Data page, without our approval.
We reserve the right to return to the Owner any portion of a Premium which would
cause the total of all Premiums paid to the policy to exceed the Maximum Total
Premium amount shown on the Policy Data page.
3-501 11-194 (IRA) Page
8
<PAGE>
THE VARIABLE ACCOUNT
The Variable Account - The Variable Account (Separate Account VA-2LNY) is a
separate account established and maintained by us for the investment of a
portion of our assets pursuant to Section 4240 of the New York Insurance Law and
Regulation 47 (Part 50). We will use the assets of the Variable Account to buy
shares in the various Portfolios. Net Premiums allocated to one or more
Sub-accounts of the Variable Account will become a part of Separate Account
VA-2LNY.
We are not, and do not claim to be, a trustee with respect to the Variable
Account, the assets of which are owned absolutely and exclusively by us. The
assets in the Variable Account shall not be chargeable with liabilities arising
out of any other business of the Company, except to the extent that they exceed
the reserves and other liabilities of the Variable Account. The assets of the
Variable Account maintained under this policy and under all other policies of
this type will be kept separate from the assets held in our general account and
are not subject to the claims of the general creditors of the Company. Income,
gains and losses, whether or not realized, from assets in the Variable Account
are credited to, or charged against, the Variable Account without regard to
other income, gains or losses of the Company.
We will hold assets in the Variable Account with a value at least equal to the
total liability for the Variable Account under this and all other policies of
this type. To the extent those assets do not exceed this total, we will use them
to support only those policies and will not use those assets to support any
other business. We may use any excess over this amount at our sole discretion.
For all purposes under the policy, we will determine the value of the assets in
the Variable Account at the end of each Valuation Day. To determine the value of
an asset on a day that is not a Valuation Day, we will use the value of that
asset as of the end of the next Valuation Day.
Sub-accounts - The Variable Account contains several Sub-accounts, each of which
invests solely in the shares of a specified Portfolio. Income, gains and losses,
whether or not realized, from assets in the Sub-accounts are credited to, or
charged against, the Sub-accounts without regard to other income, gains or
losses of the Company. The Sub-accounts available under this policy are shown in
Schedule A.
We cannot and do not guarantee that any of the Sub-accounts of the Variable
Account will always be available for investment. We reserve the right, subject
to compliance with applicable federal or state law, rules or regulations and
further subject to the prior approval of the New York State Insurance
Department, to make additions to, deletions from, or substitutions for, the
Sub-accounts, or the Portfolio shares held by a Sub-account of the Variable
Account if such Portfolio shares are no longer available for investment, or if
we determine that continued investment in such Portfolio would be inappropriate
or inconsistent with the purposes of the Variable Account. We will not
substitute any shares attributable to the Owner's interest in a Sub-account
without advance written notice to the Owner and prior approval of the Securities
and Exchange Commission, to the extent required by the Investment Company Act of
1940 (the "1940 Act"). Nothing contained herein shall prevent the Variable
Account from purchasing other securities for other series or classes of variable
policies, or from effecting an exchange between series or classes of variable
policies on the basis of requests made by the Owner.
We reserve the right to establish additional Sub-accounts, each of which would
invest solely in shares of other Portfolios. If we decide to make those
Sub-accounts available under this policy, we will send written notification to
the Owner. The Owner may instruct us to allocate future Premiums to those
Sub-accounts, or transfer all or a portion of the Policy Value to those
Sub-accounts, subject to the terms and conditions described under the Transfer
Provisions and by the Portfolio.
In the event of any addition, deletion or substitution of any Sub-account of the
Variable Account, we may, by appropriate endorsement and subject to the prior
approval of the New York State Insurance Department, make such changes to the
policy as may be necessary to reflect such addition, deletion or substitution.
If we deem it to be in the best interest of Owners who have voting rights and
subject to the prior approval of the New York State Insurance Department, the
Variable Account may be: (a) operated as a management company under the 1940 Act
or any other form permitted by law; (b) deregistered under the 1940 Act in the
event such registration is no longer required; or (c) combined with one or more
other separate accounts.
3-501 11-194 Page 9
<PAGE>
Variable Accumulation Units - Net Premiums and transfers allocated to a
Sub-account are used to purchase Variable Accumulation Units in that
Sub-account. The number of Variable Accumulation Units to be credited to each
Sub-account will be determined by dividing the portion of each Net Premium or
transfer allocated to the Sub-account by that Sub-account's Variable
Accumulation Unit value for the Valuation Day on which the Premium was received
at the Service Office or for the Valuation Day on which the transfer was made.
The Net Premium (derived from the Initial Premium) will be credited with
Variable Accumulation Units within two business days of the later of: (a) the
date we receive sufficient information, in a form and manner acceptable to us,
to issue this policy; or (b) the date our Service Office receives the Initial
Premium. In the case of any subsequent Premium, we will credit Variable
Accumulation Units for that Premium as of the date such payment is received by
us at our Service Office, subject to the conditions described under the
Flexibility of Premium Payments provision.
The value of a Variable Accumulation Unit for each Sub-account at the end of any
Valuation Period is calculated by multiplying the value of that unit at the end
of the prior Valuation Period by the Sub-account's Net Investment Factor for the
Valuation Period. The value of a Variable Accumulation Unit may go up or down.
Net Investment Factor - For any Sub-account, the Net Investment Factor for a
Valuation Period is determined by dividing (a) by (b), then subtracting (c).
Where (a) is
The net asset value per share held in the Sub-account,
as of the end of the Valuation Period; plus
or minus
The per-share amount of any dividend or capital gain distributions
if the "exdividend" date occurs in the Valuation Period; plus or
minus
A per-share charge or credit as of the end of the Valuation Period
for tax reserves for realized and unrealized capital gains, if
any.
Where (b) is
The net asset value per share held in the Sub-account as of the
end of the last prior Valuation Period.
Where (c) is
The daily Mortality and Expense Risk Charge times the number of
calendar days in the current Valuation Period; plus
The daily Administrative Expense Charge times the number of
calendar days in the current Valuation Period.
3-501 11-194 Page 10
<PAGE>
Variable Accumulation Units - Net Premiums and transfers allocated to a
Sub-account are used to purchase Variable Accumulation Units in that
Sub-account. The number of Variable Accumulation Units to be credited to each
Sub-account will be determined by dividing the portion of each Net Premium or
transfer allocated to the Sub-account by that Sub-account's Variable
Accumulation Unit value for the Valuation Day on which the Premium was received
at the Service Office or for the Valuation Day on which the transfer was made.
The Net Premium (derived from the Initial Premium) allocated to the Money Market
Sub-account during the Free Look Period, will be credited with Variable
Accumulation Units within two business days of the later of: (a) the date we
receive sufficient information, in a form and manner acceptable to us, to issue
this policy; or (b) the date our Service Office receives the Initial Premium. In
the case of any subsequent Premium, we will credit Variable Accumulation Units
for that Premium as of the date such payment is received by us at our Service
Office, subject to the conditions described under the Flexibility of Premium
Payments provision.
The value of a Variable Accumulation Unit for each Sub-account at the end of any
Valuation Period is calculated by multiplying the value of that unit at the end
of the prior Valuation Period by the Sub-account's Net Investment Factor for the
Valuation Period. The value of a Variable Accumulation Unit may go up or down.
Net Investment Factor - For any Sub-account, the Net Investment Factor for a
Valuation Period is determined by dividing (a) by (b), then subtracting (c).
Where (a) is
The net asset value per share held in the Sub-account,
as of the end of the Valuation Period; plus
or minus
The per-share amount of any dividend or capital gain distributions
if the "exdividend" date occurs in the Valuation Period; plus or
minus
A per-share charge or credit as of the end of the Valuation Period
for tax reserves for realized and unrealized capital gains, if
any.
Where (b) is
The net asset value per share held in the Sub-account as of the
end of the last prior Valuation Period.
Where (c) is
The daily Mortality and Expense Risk Charge times the number of
calendar days in the current Valuation Period; plus
The daily Administrative Expense Charge times the number of
calendar days in the current Valuation Period.
3-501 11-194 (IRA) Page 10
<PAGE>
TRANSFER PROVISIONS
Transfers Between Sub-accounts - Before the Annuity Date, the Owner may transfer
all or any portion of the Policy Value to one or more Sub-accounts of the
Variable Account, subject to the provisions described below.
Transfer Allocation - Transfers will generally be effective as of the date the
request for the transfer, in a form and manner acceptable to us, is received at
our Service Office. The transfer request must specify: (a) the Sub-account(s)
from which the transfer is to be made; (b) the amount of the transfer, subject
to the minimum transfer amount described below; and (c) the Sub-account(s) to
receive the transferred amount.
Minimum Transfer Amount - Except as provided in the following sentence, the
minimum amount that may be transferred is the lesser of $500, or the entire
value of the Sub-account(s) from which the transfer is being made. Any transfer
amount allocated to a Sub-account of the Variable Account with a zero balance
may not be less than $1,000.
Transfer Limitations - Transfers among the Sub-accounts are limited to eighteen
during any Policy Year. If a transfer amount reduces the value of the
Sub-account from which the transfer was made to less than $1,000, we reserve the
right to transfer the remaining value in that Sub-account in accordance with the
transfer instructions provided by the Owner.
We also reserve the right to impose a Transfer Fee for each transfer in excess
of twelve made during a single Policy Year. If imposed, the amount of the
Transfer Fee will be as described under the Premium Taxes, Charges, Fees and
Services provision of the policy.
Effect on Variable Accumulation Units - Transfers within the Variable Account
will result in the purchase and/or cancellation of Variable Accumulation Units
having a total value equal to the dollar amount being transferred to or from a
particular Sub-account. The purchase and/or cancellation of such units generally
shall be made using the Variable Accumulation Unit value of the applicable
Sub-account on the Valuation Day on which the transfer is effective.
3-501 11-194 Page 11
<PAGE>
WITHDRAWAL PROVISIONS
Partial Withdrawals - Before the Annuity Date, the Owner may withdraw a portion
of the Policy Value for cash, subject to any withdrawal limitations imposed
under any applicable federal or state law, rules or regulations, and further
subject to the provisions described below.
Withdrawal Allocation - Withdrawals will generally be processed as of the date
the request for the withdrawal, in a form and manner acceptable to us, is
received at our Service Office. The withdrawal request must specify the amount
of the withdrawal or the percentage of value to be withdrawn from each
Sub-account, subject to the minimum withdrawal amount described below. The Owner
may direct a withdrawal to be made from a specific Sub-account or taken pro rata
from all Sub-accounts. If the Owner does not specify the Sub-account(s) from
which the withdrawal is to be made, the withdrawal will be taken pro rata from
all Sub-accounts with current values.
Minimum Withdrawal Amount - The minimum amount that may be withdrawn is the
lesser of $500, or the entire value of the Sub-account from which the withdrawal
is being made.
Withdrawal Limitations - Only one withdrawal may be made during a Policy Year.
Withdrawals will be subject to any applicable Contingent Deferred Sales Load
(unless otherwise waived as described below and on Page 14) and any applicable
premium taxes. The Contingent Deferred Sales Load and any premium tax applicable
to a withdrawal will be deducted from the amount withdrawn before payment is
made to the Owner.
If a requested withdrawal reduces the value of the Sub-account from which the
withdrawal was made to less than $1,000, we reserve the right to transfer the
remaining value in that Sub-account pro rata among the other Sub-accounts of the
Variable Account with current values. The Owner will be notified in writing of
any such transfer made by us.
We will further notify the Owner if the requested withdrawal would reduce the
Policy Value to less than $2,000. The Owner will have 10 days from the date our
notice is given or mailed to: (a) withdraw a lesser amount (subject to a minimum
withdrawal amount of $500), leaving a Policy Value of at least $2,000; or (b)
surrender the policy for its Cash Surrender Value. If, after the expiration of
the 10 day period, no election is received by us from the Owner, the withdrawal
request will be considered null and void, and no withdrawal will be processed.
Partial Withdrawal of Funds Without Charges - After the first Policy Year and
before the Annuity Date, the Owner may withdraw an amount up to the Allowed
Amount without incurring a Contingent Deferred Sales Load, as described on Page
13.
The Allowed Amount will be determined as of the date of withdrawal. The Allowed
Amount is equal to the sum of (a) plus (b), where (a) and (b) are as follows:
(a) 100% of Premiums, not previously deemed withdrawn, that were received
at least seven complete Policy Years prior to the date of withdrawal;
plus
(b) the greater of the accumulated earnings not previously deemed
withdrawn; or 10% of Premiums received at least one but less than seven
complete Policy Years prior to the date of withdrawal, not adjusted for
any withdrawals deemed to be made from such Premiums.
If the Owner requests a withdrawal of an amount which is greater than the
Allowed Amount during a Policy Year, that portion of the amount withdrawn in
excess of the Allowed Amount will be subject to a Contingent Deferred Sales
Load.
Effect on Variable Accumulation Units - Withdrawals from the Variable Account
will result in the cancellation of Variable Accumulation Units having a total
value equal to the dollar amount being withdrawn from a particular Sub-account.
The cancellation of such units generally shall be made using the Variable
Accumulation Unit value of the applicable Sub-account as of the end of the
Valuation Day on which the withdrawal is processed.
3-501 11-194 Page 12
<PAGE>
SURRENDER PROVISIONS
Surrender of Policy - On or before the Annuity Date, the Owner may surrender the
policy to us for its Cash Surrender Value. Surrender of the policy will be
subject to any withdrawal limitations imposed under applicable federal or state
law, rules or regulations.
The Owner's request for surrender will generally be processed as of the date the
request for surrender, in a form and manner acceptable to us, is received at our
Service Office. Payment of the Cash Surrender Value to the Owner will be in full
settlement of our liability under the policy.
CONTINGENT DEFERRED SALES LOAD
Contingent Deferred Sales Load - Unless waived as provided under the Partial
Withdrawal of Funds Without Charges provision or as otherwise provided on Page
14, a Contingent Deferred Sales Load may apply when a withdrawal from, or
surrender of, the policy occurs. For purposes of determining the Contingent
Deferred Sales Load, all withdrawals will be deemed to be made first from
accumulated earnings (which may generally be withdrawn without charge) and then
from Premiums on a first-in, first-out basis.
The Contingent Deferred Sales Load is calculated separately for each Policy Year
for Premiums received by us during such Policy Year. The Contingent Deferred
Sales Load is calculated as a percentage of the portion of the Premium
withdrawn. The applicable Contingent Deferred Sales Load percentages, as shown
below, are based on the number of complete Policy Years between the Policy Year
of receipt of the Premium and the Policy Year of withdrawal of all or a portion
of that Premium.
Number of Contingent Deferred Sales Load
Complete Policy Years as a Percentage of Premium
Less than 1 year................................................6%
1 year but less than 2 years....................................6%
2 years but less than 3 years...................................5%
3 years but less than 4 years...................................5%
4 years but less than 5 years...................................4%
5 years but less than 6 years...................................4%
6 years but less than 7 years...................................2%
7 or more years.................................................0%
3-501 11-194 Page 13
<PAGE>
Waiver of Contingent Deferred Sales Load - The Contingent Deferred Sales Load
will be waived:
(a) on the Allowed Amount, if: (i) surrender of the policy occurs in the
second or subsequent Policy Year; and (ii) the Owner was eligible for
a partial withdrawal of funds without charges but had not made such a
withdrawal during the Policy Year in which the date of surrender
occurs; or
(b) if the Policy Value is applied to provide an immediate annuity from
us under an Annuity Form involving life contingencies on or after the
third Policy Anniversary; or
(c) on distributions resulting from the death of the Owner or Annuitant
before the Annuity Date.
PREMIUM TAXES, CHARGES, FEES AND SERVICES
Premium Taxes - The insurance laws of the State of New York currently do not
allow the imposition of premium taxes on annuity considerations. Therefore,
wherever reference is made in this policy to the deduction of premium taxes,
such deductions will not be made while the Owner is a resident of the State of
New York, unless subsequent changes in New York's insurance laws provide
otherwise. The amount of any applicable premium tax imposed on amounts relating
to this policy may be withdrawn from the policy. For purposes of this policy,
premium taxes include retaliatory taxes or other similar taxes.
Mortality and Expense Risk Charge - The Company imposes a charge as compensation
for bearing certain mortality and expense risks under the Variable Account. The
Mortality portion of the charge compensates us for the mortality risk inherent
in the Death Benefit and for the mortality risk inherent with an annuity. The
Expense portion of the charge compensates us for the possibility that charges
and fees for administrative expenses which are guaranteed for the life of the
policy may be insufficient to cover actual costs of issuing and administering
the policy.
The amount of the daily Mortality and Expense Risk Charge is equal to 0.003403%,
corresponding to an annual charge of 1.25%, of the assets in each Sub-account
held for this policy. The Mortality and Expense Risk Charge will be deducted on
a daily basis from the assets in each such Sub-account and will remain constant
for the life of the policy.
3-501 11-194 Page 14
<PAGE>
Administrative Expense Charge - The Administrative Expense Charge compensates us
for some of the costs incurred in administering the policy and the Variable
Account. The amount of the daily Administrative Expense Charge is shown on the
Policy Data page. The Administrative Expense Charge will be deducted on a daily
basis from the assets in each Sub-account of the Variable Account held for this
policy.
During the life of the policy, including the annuitization period, the daily
Administrative Expense Charge shown on the Policy Data page may be changed by us
upon 30 days advance written notice to the Owner. Any increase in the
Administrative Expense Charge will apply prospectively to Administrative Expense
Charges deducted after the effective date of change. Any increase will not
result in the Administrative Expense Charge exceeding a maximum annual
Administrative Expense Charge of 0.25%.
Transfer Fee - Prior to the Annuity Date, we reserve the right to impose a
Transfer Fee for each transfer in excess of twelve made during a single Policy
Year. If imposed, the amount of the Transfer Fee will be equal to the lesser of:
(a) 2% of the amount of the transfer; or (b) $10. The Transfer Fee will be
deducted from the amount of the transfer prior to its reallocation. If two or
more transfers are made on the same day, the Transfer Fee will be withdrawn pro
rata from the amount of the transfers.
Policy Fee - Prior to the Annuity Date, an annual Policy Fee will be deducted
from the Policy Value on the last business day of each Policy Year, or if
earlier, as of the date the policy is surrendered. The amount of the annual
Policy Fee is shown on the Policy Data page. The annual Policy Fee will be
deducted from the Policy Value on a pro rata basis.
There will be no Policy Fee deducted for a Policy Year if the Policy Value
exceeds $50,000 on the last business day of that Policy Year, or if earlier, as
of the date the policy is surrendered.
The annual Policy Fee shown on the Policy Data page may be changed by us upon 30
days advance written notice to the Owner, subject to the prior approval of the
New York State Insurance Department. Any increase in the Policy Fee will apply
prospectively to Policy Fees deducted after the effective date of change. Any
increase will not result in the Policy Fee exceeding a maximum annual Policy Fee
equal to the lesser of 2% of the Policy Value or $60.
Annuity Fee - After the Annuity Date, an annual Annuity Fee equal to $30 will be
deducted in equal amounts ($2.50 per month) from each annuity payment made under
the Variable Annuity Payment Option.
Limitation on Charges and Fees - In no event will the Administrative Expense
Charge, together with the Transfer Fee and the Policy Fee, exceed the costs
anticipated for administering the policy and the Variable Account.
Statements of Account - At least once during each Policy Year, we will send the
Owner a Statement of Account reflecting the value of the policy. Statements of
Account will cease to be provided to the Owner after the Annuity Date.
3-501 11-194 Page 15
<PAGE>
ANNUITY PROVISIONS
Date Annuity Payments Start - Annuity payments will be made on a monthly basis
starting on the first day of the month immediately following the Annuity Date,
if the Annuitant is living and the policy has not been surrendered for cash.
Unless otherwise changed as provided below, the Annuity Form and Payment Option
under which the annuity will be paid is shown on the Policy Data page.
Once payments start, no changes can be made to either the Annuity Form or
Payment Option, no additional Premiums will be accepted under the policy, and no
further withdrawals will be allowed.
Change of Annuity Date - The Annuity Date may be changed by the Owner upon 30
days advance written notice to our Service Office. The revised Annuity Date may
not be earlier than the first day of the calendar month coinciding with or next
following the third Policy Anniversary. The Annuity Date may not be later than
the first day of the calendar month immediately preceding the month of the
Annuitant's 85th birthday.
Election to Change Annuity Form and Payment Option - At least 60 days before the
Annuity Date, we will send written notification to the Owner confirming the
Annuity Form and Payment Option for the commencement of annuity benefits. The
Owner may change the Annuity Form and/or Payment Option currently in effect to
any other Annuity Form and Payment Option described on Pages 17 through 19.
Notice by the Owner of any changes must be made in a form and manner acceptable
to us, and such notice of change must be received at our Service Office at least
30 days prior to the currently elected Annuity Date.
The selection of the Annuity Form will be subject to any applicable federal or
state law, rules or regulations. The election must include: (a) the newly
elected Annuity Form; and/or (b) the portion of the Annuity Purchase Amount
allocated to each Payment Option, expressed as a percentage. The allocation
percentages must be in increments of 25% and the sum of the allocations must
total 100% (e.g., 75% from the Fixed Annuity Payment Option and 25% from the
Variable Annuity Payment Option).
Minimum Amount of Monthly Annuity - If the amount of the first monthly annuity
payment would result in a monthly annuity of less than $20, or if the Annuity
Purchase Amount is less than $2,000, we reserve the right to offer a less
frequent mode of payment or make a cash payment to the Owner equal to the Policy
Value. Such cash payment will be in full settlement of our liability under the
policy.
Monthly annuity payments from the Variable Annuity Payment Option will be
further subject to a minimum monthly annuity amount of $50 from each Sub-account
from which such payments are to be made.
Immediate Annuity Certificates - We will issue to the Owner an immediate annuity
certificate describing the Annuity Form for annuity payments made under the
Fixed Annuity Payment Option and/or an immediate annuity certificate for annuity
payments made under the Variable Annuity Payment Option.
Change of Payee - Except as provided in the following paragraph, upon written
notice to us at our Service Office, the Owner may, at any time during the
annuitization period, change the payee of annuity benefits being provided under
the policy. The effective date of the change in payee will be the later of: (a)
the date we receive the written request for such change; or (b) the date
specified by the Owner.
If the Status shown on the Policy Data page is Qualified, the Owner may not
change the payee of annuity benefits to be provided under the policy before or
after the Annuity Date.
3-501 11-194 Page 16
<PAGE>
ANNUITY FORMS
Benefits can be provided under any Annuity Form described below, subject to any
applicable federal or state law, rules or regulations.
Life Annuity - Payments start on the first day of the month immediately
following the Annuity Date, if the Annuitant is living. Payments end with the
payment due just before the Annuitant's death. There is no death benefit under
this form.
Life and Contingent Annuity - Payments start on the first day of the month
immediately following the Annuity Date, if the Annuitant is living. Payments
will continue for as long as the Annuitant lives. If the named Contingent
Annuitant is living after the Annuitant dies, payments will continue for as long
as the Contingent Annuitant lives. The continued payments can be in the same
amount as the original payments, or in an amount equal to 50% or 66 2/3%
thereof. Payments will end with the payment due just before the death of the
Contingent Annuitant. If the Contingent Annuitant does not survive the
Annuitant, payments will end with the payment due just before the death of the
Annuitant. Once payments start under this Annuity Form, the person named as
Contingent Annuitant, for the purpose of being the measuring life, may not be
changed.
Life Annuity with Period Certain - Payments start on the first day of the month
immediately following the Annuity Date, if the Annuitant is living. Payments
will be made for the longer of: (a) the Annuitant's life; or (b) the period
certain. The period certain may be 120, 180 or 240 months, but in no event may
such period exceed the life expectancy of the Annuitant. If the Annuitant dies
during the period certain, the remaining period certain payments will generally
be made to the Annuitant's Beneficiary.
After the Annuitant's death, the Owner may designate a payee to receive any
remaining payments payable if the Annuitant's Beneficiary dies before all of the
payments under the period certain have been made. If the Annuitant's Beneficiary
dies before receiving all of the remaining period certain payments and a
designated payee does not survive the Annuitant's Beneficiary for at least 30
days, then the remaining payments will be paid to the Owner, if living,
otherwise in a single sum to the Owner's estate. If the Annuitant dies after all
payments have been made for the period certain, payments will cease with the
payment due just before the Annuitant's death.
Joint and Survivor Annuity - Payments start on the first day of the month
immediately following the Annuity Date, if the Annuitant and Joint Annuitant are
both living. After either the Annuitant or Joint Annuitant dies, payments will
continue for as long as the survivor lives. The continued payments can be in the
same amount as the original payments, or in an amount equal to 50% or 66 2/3%
thereof. Payments end with the payment due just before the death of the
survivor. Once payments start under this Annuity Form, the person named as Joint
Annuitant, for the purpose of being the measuring life, may not be changed.
Other Forms of Payment - Benefits can be provided under any other Annuity Form
not described in this section, subject to our agreement and any applicable
federal or state law, rules or regulations.
3-501 11-194 Page 17
<PAGE>
FIXED ANNUITY PAYMENT OPTION
Fixed Annuity Payment Option - A fixed annuity provides for monthly annuity
payments that will remain constant in accordance with the terms of the Annuity
Form selected by the Owner. Such payments will not be affected by the investment
performance of the Sub-accounts of the Variable Account.
The dollar amount of each monthly annuity payable under the Fixed Annuity
Payment Option will be determined by applying the portion of the Annuity
Purchase Amount allocated to the Fixed Annuity Payment Option on the Annuity
Date, as a single premium based on the Annuity Form and the Ages of the
Annuitant and any other measuring life, under the appropriate guaranteed annuity
rate tables contained in the Appendix, or under our then current single premium
immediate annuity rates, if such current rates provide a higher amount of
monthly annuity payments than those provided under the guaranteed annuity rates.
VARIABLE ANNUITY PAYMENT OPTION
Variable Annuity Payment Option - A variable annuity provides for monthly
annuity payments that will vary based on the investment performance of the
Sub-account(s) selected by the Owner from which such payments are made.
Therefore, the dollar amount of each monthly annuity payable under the Variable
Annuity Payment Option may increase, decrease or remain the same.
Amount of First Variable Annuity Payment - The dollar amount of the first
monthly variable annuity payment will be determined by applying the portion of
the Annuity Purchase Amount allocated to the Variable Annuity Payment Option on
the Annuity Date, as a single premium based on the Annuity Form and the Ages of
the Annuitant and any other measuring life, under the appropriate annuity rate
tables contained in the Appendix.
The first monthly variable annuity payment will be made on the first day of the
month immediately following the Annuity Date. The second and subsequent monthly
variable annuity payment will be due on the first day of each month thereafter.
The dollar amount of the second and subsequent variable annuity payment will be
determined in accordance with the provision below.
Amount of Subsequent Variable Annuity Payments - The dollar amount of the second
and subsequent monthly variable annuity payment will be determined by means of
Variable Annuity Units. The number of Variable Annuity Units is determined by
dividing the first monthly variable annuity payment by the selected
Sub-account's Annuity Unit Value on the Annuity Date. The number of Variable
Annuity Units will then remain the same for the second and all subsequent
variable annuity payments, unless a transfer of Variable Annuity Units is made,
as described in the Transfers of Variable Annuity Units provision on Page 19.
The dollar amount of the second and subsequent monthly variable annuity payment
will be determined by multiplying the number of Variable Annuity Units by the
Sub-account(s)' Annuity Unit Value on the tenth day of the month before the
payment due date. The dollar amount of each monthly variable annuity payment
after the first, may increase, decrease or remain the same.
When annuity payments begin, neither expenses actually incurred other than
applicable premium taxes on the investment return, nor mortality actually
experienced, shall adversely affect the dollar amount of variable annuity
payments.
3-501 11-194 Page 18
<PAGE>
Annuity Unit Value - The value of a Variable Annuity Unit for each Sub-account
for any Valuation Day is equal to (a) times (b) times (c), where:
(a) is the Annuity Unit Value on the immediately preceding Valuation Day;
(b) is the Net Investment Factor (determined in accordance with the Net
Investment Factor provision on Page 10), for the Valuation Period
just ended; and
(c) is the Investment Result Adjustment Factor (.99989255)n, which
recognizes the assumed interest rate of 4% per annum. The "n" in the
Investment Result Adjustment Factor is the number of days since the
preceding Valuation Day.
Transfers of Variable Annuity Units - After the Annuity Date, the Owner may
transfer the value of a designated number of Variable Annuity Units from one
Sub-account to Variable Annuity Units in another Sub-account, the value of which
would be such that the dollar amount of a variable annuity payment made on the
date of transfer would be unaffected by the transfer.
Transfers of Variable Annuity Units will generally be processed as of the date
the request for the transfer, in a form and manner acceptable to us, is received
at our Service Office. Transfers of Variable Annuity Units will be limited to no
more than four during any Annuity Year. The minimum amount that may be
transferred from one Sub-account to another Sub-account may not be less than the
number of Variable Annuity Units which would provide a current monthly annuity
payment of $50.
The dollar amount of each subsequent monthly variable annuity payment after the
transfer will be determined using the new number of Variable Annuity Units
multiplied by the Sub-account(s)' Annuity Unit Value on the tenth day of the
month before the payment due date.
If the transfer amount reduces the current monthly variable annuity payment
payable from the Sub-account from which such transfer was made to less than $50,
we reserve the right to transfer the entire amount in that Sub-account in
accordance with the transfer instructions provided by the Owner.
3-501 11-194 Page 19
<PAGE>
DEATH BENEFIT PROVISIONS
In General - Notwithstanding any provision of this policy to the contrary, no
payment of benefits provided under the policy will be allowed that does not
satisfy the requirements of Code Section 72(s), as amended from time to time,
for policies issued with a non-qualified status.
If Annuitant Dies Before Annuity Starts - Upon receipt of proof of death of the
Annuitant while the Owner is living, this policy is in force and before the
Annuity Date, and subject to any applicable federal or state law, rules or
regulations, we will pay the Death Benefit provided under the policy to the
Annuitant's Beneficiary in a cash payment, unless there is a surviving
Contingent Annuitant.
In lieu of receiving a cash payment, the Annuitant's Beneficiary may receive the
Death Benefit in the form of an annuity from us, under any of the Annuity Forms
and Payment Options offered in this policy, unless a settlement agreement to the
contrary is in effect.
If a Contingent Annuitant has been named by the Owner, then upon the death of
the Annuitant before the Annuity Date while the Owner is living, the Contingent
Annuitant, if alive, will become the Annuitant. Any Death Benefit normally paid
to the Annuitant's Beneficiary will not be payable if the named Contingent
Annuitant is alive at the time of the Annuitant's death.
If the Owner is a corporation or other non-individual, or if the deceased
Annuitant is the Owner, the death of the Annuitant will be treated as the death
of the Owner and the policy will be subject to the provisions described below.
If Owner Dies Before Annuity Starts - Notwithstanding any other provision of
this policy, if the Owner dies before the Annuity Date, the Death Benefit
payable to the Owner's Beneficiary will be distributed as follows:
(a) the Death Benefit must be completely distributed within five years
of the Owner's date of death; or
(b) the Owner's Beneficiary may elect, within the one year period after
the Owner's date of death, to receive the Death Benefit in the form
of an annuity from us, provided that; (1) such annuity is distributed
in substantially equal installments over the life of such Owner's
Beneficiary or over a period not extending beyond the life expectancy
of such Owner's Beneficiary; and (2) such distributions begin not
later than one year after the Owner's date of death.
Notwithstanding (a) and (b) above, if the sole Owner's Beneficiary is the
deceased Owner's surviving spouse, then such spouse may elect, within the one
year period after the Owner's date of death, to continue the policy under the
same terms as before the Owner's death. Upon receipt of such election from the
spouse, in a form and manner acceptable to us, at our Service Office: (1) all
rights of the spouse as Owner's Beneficiary under the policy in effect prior to
such election will cease; (2) the spouse will become the Owner of the policy and
will also be treated as the Contingent Annuitant, if none has been named and
only if the deceased Owner was the Annuitant; and (3) all rights and privileges
granted by the policy or allowed by us will belong to the spouse as Owner of the
policy. This election will be deemed to have been made by the spouse if such
spouse makes a Premium payment to the policy or fails to make a timely election
as described in this paragraph.
If the Owner's Beneficiary is a nonspouse, the distribution provisions described
in subparagraphs (a) and (b) above, will apply even if the Annuitant and/or
Contingent Annuitant are alive at the time of the Owner's death. If the
nonspouse Owner's Beneficiary is not an individual, then only a cash payment
will be paid.
If no election is received by us from a nonspouse Owner's Beneficiary within the
one year period after the Owner's date of death, then we will pay the Death
Benefit to the Owner's Beneficiary in a cash payment. The Death Benefit will be
determined as of the date we make the cash payment. Such cash payment will be in
full settlement of all our liability under the policy.
If Annuitant Dies After Annuity Starts - If the Annuitant dies after the annuity
starts, any benefit payable will be distributed at least as rapidly as under the
Annuity Form and Payment Option then in effect.
3-501 11-194 Page 20
<PAGE>
If Owner Dies After Annuity Starts - If the Owner dies after the annuity starts,
any benefit payable will continue to be distributed at least as rapidly as under
the Annuity Form and Payment Option then in effect. All of the Owner's rights
granted by the policy or allowed by us will pass to the Owner's Beneficiary.
Joint Ownership - For purposes of this section, if the policy has Joint Owners
we will consider the date of death of the first Joint Owner as the death of the
Owner and the surviving Joint Owner will become the Owner of the policy.
Proof of Death - Proof of death must be submitted to us at our Service Office
before any benefits due under the policy are paid. Appropriate forms will be
made available upon request.
For purposes of this policy, proof of death means: (a) a copy of a certified
death certificate; (b) a copy of a certified decree of a court of competent
jurisdiction as to a finding of death; (c) a written statement by a medical
doctor who attended the deceased; or (d) any other proof satisfactory to us.
BENEFICIARY PROVISIONS
Designation of Beneficiary - Unless changed as provided below or as otherwise
required by law, the Owner's and Annuitant's Beneficiary will be as designated
by the Owner in a form and manner acceptable to us. Unless otherwise indicated,
if more than one Owner's or Annuitant's Beneficiary is designated, then each
such Beneficiary so designated will share equally in any benefits and/or rights
granted by the policy to such Beneficiary or allowed by us. If either the
Owner's or Annuitant's Beneficiary is a partnership, any benefits will be paid
to the partnership as it existed at the time of the Owner's or Annuitant's
death. We may rely on an affidavit by any responsible person to identify a
Beneficiary or verify the non-existence of a Beneficiary not identified by name.
Change of Beneficiary - The Owner may change the Beneficiaries by giving written
notice to us at our Service Office. We will not be bound by any change of
Beneficiary unless it is made in writing and recorded by us at our Service
Office. A Beneficiary designated irrevocably may not be changed without the
written consent of that Beneficiary, except to the extent required by law.
Death of Beneficiary - The interest of any Beneficiary who dies before the Owner
or Annuitant will terminate at the death of such Beneficiary. The interest of
any Beneficiary who dies at the time of, or within 30 days after, the death of
the Owner or Annuitant will also terminate if no benefits have been paid to such
Beneficiary, unless the Owner has given us written notice of some other
arrangement. The benefits will then be paid as though the Beneficiary had died
before the Owner or Annuitant.
Successive Beneficiaries - If there is no named Owner's Beneficiary alive at the
time of the Owner's death, then the Owner's Beneficiary will be the Annuitant,
if living, or the Annuitant's Beneficiary if the Annuitant is not living. If
there is no surviving Annuitant or Annuitant's Beneficiary, any benefits payable
will be paid to the Owner's estate.
3-501 11-194 Page 21
<PAGE>
GENERAL PROVISIONS
Entire Contract - A copy of the application is attached and is a part of this
policy. This policy and the application make the entire contract.
Misstatement of Age and Sex - If the age or sex of the Annuitant and/or of any
other measuring life has been misstated, the monthly annuity payments payable
under this policy will be whatever the Annuity Purchase Amount would provide on
the basis of the correct Age or sex of the Annuitant and/or of any other
measuring life, if any, on the Annuity Date.
Any underpayment or overpayment by us, as a result of such misstatement, with
interest at 6% per annum, will credited to, or charged against, the current or
next succeeding payments.
Proof of Existence and Age - Before making any payment under this policy, we may
require proof of the existence and proof of age of the Annuitant and/or any
other payee, or any other information as we may deem necessary in order to
provide benefits under the policy.
Changes in the Policy - Only two authorized officers of the Company, acting
together, have the authority to bind us or to make any changes in this policy
and then only in writing. We will not be bound by any promise or representation
made by any other person or persons.
We may change or amend the policy, subject to the Department's prior approval,
at any time without the consent of the Owner if such change or amendment is
necessary for the policy to comply with any changes in the Code so as to
continue treatment of this policy as an annuity, or as required by any other
applicable federal or state law, rules or regulations.
Incontestability - This policy will be incontestable from the Policy Date.
Assignment of the Policy - Except as permitted by law, no person has the right
to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any
benefit under the policy. Any assignment will be subject to the limita-tions
described in the following paragraph.
No assignment of any benefits to which the Owner is entitled under this policy
will be binding on the Company, unless made in writing and given to us at our
Service Office. We are not responsible for the adequacy of any assignment.
However, when a written assignment, permitted by law, is filed with us and
recorded by us at our Service Office, the Annuitant, the Contingent Annuitant,
the Owner's Beneficiary and/or the Annuitant's Beneficiary, will be subject to
the assignment.
Payments by the Company - All sums payable by us under this policy are payable
at our Service Office.
Delay of Payment or Transfer - We will generally pay amounts due from the policy
within seven days of the date the request for such amount, in a form and manner
acceptable to us, is received at our Service Office.
We also reserve the right to delay the payment of any amount withdrawn or
transfer request from the Variable Account due to: (a) the closure of the New
York Stock Exchange for reasons other than usual weekends, holidays or if
trading on such Exchange is restricted; (b) the existence of an emergency as
defined by the Securities and Exchange Commission or the Commission requires
that trading be restricted; or (c) the Securities and Exchange Commission
permits delay for the protection of security holders.
Payments of amounts derived from Premiums paid by check may also be delayed
until the check has cleared the Owner's bank.
Facility of Payment - If a payee is a minor, or if we have reason to believe
that a valid receipt cannot be given for any payment due to the payee, we will
make the payment to the legal guardian or conservator of the payee.
Minimum Benefits - Any annuity, cash surrender or death benefits that may be
available under this policy are not less than the minimum benefits required by
any statute of the insurance laws of the State of New York.
3-501 11-194 Page 22
<PAGE>
Protection of Benefits/Proceeds - To the extent permitted by law, no payment of
benefits or interest will be subject to the claim(s) of any creditor of any
Owner, Annuitant or Beneficiary or to any claim or process of law against any
Owner, Annuitant or Beneficiary.
Notices and Directions - We will not be bound by any authorization, direction,
election or notice which is not in a form and manner acceptable to us and
received at our Service Office.
Any written notice requirement by us to the Owner will be satisfied by our
mailing of any such required written notice, by first-class mail, to the Owner's
last known address as shown on our records.
Non-Participating - This policy is classified as a non-participating policy. It
does not participate in our profits or surplus, and therefore no dividends are
payable.
Voting Rights - As long as this policy is in force, the Owner will have all
applicable voting rights under the Portfolios.
APPENDIX
ANNUITY RATE TABLES
Applicability of Rates - The guaranteed annuity rates contained in Tables I and
II will be used to provide a minimum guaranteed monthly annuity under the Fixed
Annuity Payment Option. The annuity rates contained in Tables III and IV will be
used to determine the first monthly annuity payment under the Variable Annuity
Payment Option.
The rates contained in this policy are for each $1,000 applied under the
applicable Annuity Form and do not include any applicable premium tax. Any
applicable premium tax will be withdrawn as described in the Premium Taxes
provision of the policy.
Rates Not Shown - Any rates not shown in the Tables contained in this policy
will be provided by the Company upon request.
3-501 11-194 Page 23
<PAGE>
APPENDIX (continued)
<TABLE>
<CAPTION>
TABLES OF GUARANTEED ANNUITY RATES UNDER
FIXED ANNUITY PAYMENT OPTION
TABLE I - MALE RATES
LIFE LIFE ANNUITY WITH PERIOD CERTAIN
Age ANNUITY 120 Months 180 Months 240 Months
==============================================================================================================
<S> <C> <C> <C> <C> <C>
40 3.76 3.76 3.75 3.73
41 3.80 3.79 3.78 3.76
42 3.84 3.83 3.82 3.80
43 3.88 3.87 3.86 3.83
44 3.93 3.92 3.90 3.87
45 3.97 3.96 3.94 3.91
46 4.02 4.01 3.98 3.95
47 4.07 4.06 4.03 3.99
48 4.13 4.11 4.08 4.03
49 4.18 4.16 4.13 4.08
50 4.24 4.21 4.18 4.13
51 4.30 4.27 4.23 4.17
52 4.37 4.33 4.29 4.22
53 4.43 4.40 4.34 4.28
54 4.51 4.46 4.41 4.33
55 4.58 4.53 4.47 4.38
56 4.66 4.60 4.54 4.44
57 4.74 4.68 4.60 4.50
58 4.83 4.76 4.67 4.56
59 4.92 4.84 4.75 4.61
60 5.02 4.93 4.83 4.68
61 5.12 5.02 4.90 4.74
62 5.23 5.12 4.99 4.80
63 5.34 5.22 5.07 4.87
64 5.47 5.33 5.16 4.93
65 5.60 5.45 5.25 5.00
66 5.74 5.57 5.35 5.06
67 5.90 5.69 5.45 5.12
68 6.06 5.83 5.55 5.18
69 6.24 5.97 5.64 5.24
70 6.43 6.11 5.74 5.30
71 6.63 6.26 5.84 5.35
72 6.84 6.42 5.95 5.41
73 7.07 6.58 6.05 5.45
74 7.32 6.74 6.14 5.50
75 7.58 6.91 6.24 5.54
76 7.86 7.08 6.33 5.57
77 8.16 7.26 6.42 5.61
78 8.48 7.43 6.50 5.63
79 8.83 7.61 6.58 5.66
80 9.20 7.79 6.65 5.68
==============================================================================================================
</TABLE>
Basis of Computation - The actuarial basis for the annuity rates contained in
this Table I, is the 1983a Annuity Mortality Table for males, without
projection, set back 5 years, with an interest rate of 3.5% per annum.
3-501 11-194 Page 24
<PAGE>
APPENDIX (continued)
<TABLE>
<CAPTION>
TABLES OF GUARANTEED ANNUITY RATES UNDER
FIXED ANNUITY PAYMENT OPTION
TABLE II - FEMALE RATES
LIFE LIFE ANNUITY WITH PERIOD CERTAIN
Age ANNUITY 120 Months 180 Months 240 Months
==============================================================================================================
<S> <C> <C> <C> <C> <C>
40 3.58 3.58 3.57 3.56
41 3.61 3.60 3.60 3.59
42 3.64 3.64 3.63 3.62
43 3.67 3.67 3.66 3.65
44 3.71 3.70 3.69 3.68
45 3.74 3.74 3.73 3.71
46 3.78 3.77 3.76 3.75
47 3.82 3.81 3.80 3.78
48 3.86 3.85 3.84 3.82
49 3.90 3.89 3.88 3.86
50 3.95 3.94 3.92 3.90
51 4.00 3.98 3.97 3.94
52 4.05 4.03 4.01 3.98
53 4.10 4.08 4.06 4.03
54 4.15 4.14 4.11 4.08
55 4.21 4.19 4.17 4.13
56 4.28 4.25 4.22 4.18
57 4.34 4.32 4.28 4.23
58 4.41 4.38 4.34 4.28
59 4.48 4.45 4.41 4.34
60 4.56 4.52 4.47 4.40
61 4.64 4.60 4.55 4.46
62 4.73 4.68 4.62 4.52
63 4.82 4.77 4.70 4.59
64 4.92 4.86 4.78 4.66
65 5.03 4.96 4.86 4.72
66 5.14 5.06 4.95 4.79
67 5.26 5.17 5.04 4.86
68 5.39 5.28 5.14 4.93
69 5.52 5.40 5.24 5.01
70 5.67 5.52 5.34 5.07
71 5.82 5.66 5.44 5.14
72 5.99 5.80 5.55 5.21
73 6.17 5.95 5.66 5.27
74 6.36 6.10 5.77 5.34
75 6.57 6.27 5.88 5.40
76 6.80 6.44 6.00 5.45
77 7.04 6.61 6.11 5.50
78 7.31 6.80 6.21 5.54
79 7.60 6.99 6.32 5.58
80 7.91 7.18 6.42 5.62
==============================================================================================================
</TABLE>
Basis of Computation - The actuarial basis for the annuity rates contained in
this Table II, is the 1983a Annuity Mortality Table for females, without
projection, set back 5 years, with an interest rate of 3.5% per annum.
3-501 11-194 Page 25
<PAGE>
APPENDIX (continued)
<TABLE>
<CAPTION>
TABLES OF ANNUITY RATES UNDER
VARIABLE ANNUITY PAYMENT OPTION
TABLE III - MALE RATES
LIFE LIFE ANNUITY WITH PERIOD CERTAIN
Age ANNUITY 120 Months 180 Months 240 Months
==============================================================================================================
<S> <C> <C> <C> <C> <C>
40 4.08 4.07 4.06 4.04
41 4.12 4.11 4.09 4.07
42 4.16 4.15 4.13 4.11
43 4.20 4.18 4.17 4.14
44 4.24 4.23 4.21 4.18
45 4.29 4.27 4.25 4.21
46 4.33 4.32 4.29 4.25
47 4.38 4.36 4.33 4.29
48 4.44 4.41 4.38 4.33
49 4.49 4.46 4.43 4.38
50 4.55 4.52 4.48 4.42
51 4.61 4.57 4.53 4.47
52 4.67 4.63 4.59 4.52
53 4.74 4.69 4.64 4.57
54 4.81 4.76 4.70 4.62
55 4.88 4.83 4.76 4.67
56 4.96 4.90 4.83 4.73
57 5.04 4.97 4.89 4.78
58 5.13 5.05 4.96 4.84
59 5.22 5.13 5.04 4.90
60 5.31 5.22 5.11 4.96
61 5.42 5.31 5.19 5.02
62 5.52 5.41 5.27 5.08
63 5.64 5.51 5.36 5.14
64 5.76 5.62 5.44 5.20
65 5.90 5.73 5.53 5.27
66 6.04 5.85 5.62 5.33
67 6.19 5.98 5.72 5.39
68 6.36 6.11 5.82 5.45
69 6.53 6.25 5.91 5.51
70 6.72 6.39 6.01 5.56
71 6.92 6.54 6.11 5.61
72 7.14 6.69 6.21 5.67
73 7.37 6.85 6.31 5.71
74 7.62 7.01 6.40 5.75
75 7.88 7.18 6.49 5.79
76 8.16 7.35 6.58 5.83
77 8.46 7.52 6.67 5.86
78 8.79 7.70 6.75 5.89
79 9.13 7.87 6.83 5.91
80 9.51 8.05 6.90 5.93
==============================================================================================================
</TABLE>
Basis of Computation - The actuarial basis for the annuity rates contained in
this Table III, is the 1983a Annuity Mortality Table for males, without
projection, set back 5 years, with an assumed interest rate of 4% per annum.
3-501 11-194 Page 26
<PAGE>
APPENDIX (continued)
<TABLE>
<CAPTION>
TABLES OF ANNUITY RATES UNDER
VARIABLE ANNUITY PAYMENT OPTION
TABLE IV - FEMALE RATES
LIFE LIFE ANNUITY WITH PERIOD CERTAIN
Age ANNUITY 120 Months 180 Months 240 Months
==============================================================================================================
<S> <C> <C> <C> <C> <C>
40 3.90 3.90 3.89 3.88
41 3.93 3.92 3.92 3.91
42 3.96 3.95 3.95 3.94
43 3.99 3.98 3.97 3.96
44 4.02 4.01 4.01 3.99
45 4.06 4.05 4.04 4.02
46 4.09 4.08 4.07 4.06
47 4.13 4.12 4.11 4.09
48 4.17 4.16 4.15 4.13
49 4.21 4.20 4.19 4.16
50 4.26 4.24 4.23 4.20
51 4.30 4.29 4.27 4.24
52 4.35 4.34 4.32 4.28
53 4.40 4.39 4.36 4.33
54 4.46 4.44 4.41 4.37
55 4.52 4.49 4.46 4.42
56 4.58 4.55 4.52 4.47
57 4.64 4.61 4.58 4.52
58 4.71 4.68 4.64 4.57
59 4.78 4.75 4.70 4.63
60 4.86 4.82 4.77 4.69
61 4.94 4.89 4.84 4.75
62 5.03 4.98 4.91 4.81
63 5.12 5.06 4.98 4.87
64 5.22 5.15 5.06 4.94
65 5.32 5.24 5.14 5.00
66 5.43 5.34 5.23 5.07
67 5.55 5.45 5.32 5.14
68 5.68 5.56 5.41 5.21
69 5.81 5.68 5.51 5.27
70 5.96 5.80 5.61 5.34
71 6.11 5.93 5.71 5.41
72 6.28 6.08 5.82 5.48
73 6.46 6.22 5.93 5.54
74 6.65 6.37 6.04 5.60
75 6.86 6.54 6.15 5.66
76 7.09 6.71 6.25 5.71
77 7.33 6.88 6.37 5.76
78 7.60 7.07 6.47 5.80
79 7.89 7.25 6.57 5.84
80 8.20 7.45 6.67 5.88
==============================================================================================================
</TABLE>
Basis of Computation - The actuarial basis for the annuity rates contained in
this Table IV, is the 1983a Annuity Mortality Table for females, without
projection, set back 5 years, with an assumed interest rate of 4% per annum.
3-501 11-194 Page 27
<PAGE>
FLEXIBLE PREMIUM MULTI-FUNDED DEFERRED ANNUITY POLICY
Variable and Fixed Dollar Annuity Options
Separate Account Investments
Non-Participating - No Annual Dividends
[GRAPHIC OMITTED][OBJECT OMITTED]
Home Office:
575 Fifth Avenue
New York, NY 10017-2422 3-501 11-194
A Stock Company
<PAGE>
INDIVIDUAL RETIREMENT ANNUITY
ENDORSEMENT
First Transamerica Life Insurance Company has issued this Endorsement as a part
of the policy to which it is attached.
On the basis of the application for the policy to which this Endorsement is
attached, the policy is issued as an Individual Retirement Annuity intended to
qualify under Code Section 408(b) to an Annuitant who is also the Owner.
Therefore, notwithstanding anything contained therein to the contrary, the
policy is hereby amended as follows:
Definition of Terms - Unless redefined below, the terms defined in the policy
will have the same meaning when used in this Endorsement. For purposes of this
Endorsement, the following definitions apply:
Beneficiary - Any individual who qualifies as a "designated beneficiary"
pursuant to Section 401(a)(9)(E) of the Code and is named to receive the
Death Benefit payable by us in the event of the Owner's death before the
Annuity Date, whether the policy describes such individual as Owner's
Beneficiary or Annuitant's Beneficiary, notwithstanding anything contained
in the policy to the contrary.
Owner - The individual in whose name the policy was purchased, whether the
policy describes such individual as Owner or Annuitant, notwithstanding
anything contained in the policy to the contrary. While such individual is
living, he or she will be the sole Owner of the policy.
Required Beginning Date - April 1 of the Calendar Year following the
Calendar Year in which the Owner attains age 70 1/2.
Nonforfeitability - The Owner's rights and entire interest under the policy are
nonforfeitable.
Nontransferability - The policy is not transferable by the Owner and is for the
exclusive benefit of the Owner and the Beneficiary.
Premium Limitations - Except in the case of a rollover contribution (as
permitted by Section 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of the Code), or
a contribution made in accordance with the terms of a Simplified Employee
Pension (SEP) as described in Section 408(k) of the Code, no contributions will
be accepted unless they are in cash, and the total of such contributions shall
not exceed $2,000 for any taxable year.
Refund of Premiums - To the extent necessary to preserve qualification under
Code Section 408(b)(2), refunds of Premiums which constitute excess
contributions may be made by the Company.
Limitation of Period Certain Annuity Forms - To the extent necessary to comply
with Code Sections 401(a)(9) and 408(b)(3), in no event may any period certain
only Annuity Form or the period certain portion which is in combination with any
other Annuity Form available under the policy exceed the life expectancy of the
Owner.
Life expectancy of the Owner is computed by the use of the return multiples
contained in Tables V and VI of Income Tax Regulation Section 1.72-9. The life
expectancy will be calculated using the attained age of the Owner on the date
the annuity is scheduled to begin. Once the annuity starts, life expectancy will
not be recalculated.
3-007 07-194 Page 1
<PAGE>
Required Minimum Distribution - Notwithstanding any other provision of the
policy and to the extent required by Code Section 408(b)(3) and the rules and
regulations issued thereunder, distribution must be made from the policy in a
manner which satisfies the requirements of Code Section 401(a)(9) and the rules
and regulations issued thereunder, as follows:
The entire Policy Value must be distributed, or must commence to be distributed,
not later than the Required Beginning Date, in equal or substantially equal
amounts over: (a) the life of the Owner or over the lives of the Owner and the
Beneficiary; or (b) a period certain not extending beyond the life expectancy of
the Owner, or the joint and last survivor expectancy of such Owner and the
Beneficiary. Such amount must be distributed periodically at intervals of no
longer than one year and must be either nonincreasing or increasing only as
provided in Proposed Income Tax Regulation Section 1.401(a)(9)-1.
All distributions must be made in accordance with the requirements of Code
Section 401(a)(9), including the incidental death benefit requirements of Code
Section 401(a)(9)(G), and the regulations issued thereunder, including the
minimum distribution incidental benefit requirement of Proposed Income Tax
Regulation Section 1.401(a)(9)-2.
The amount to be distributed each year, beginning with the first Calendar Year
for which distributions are required to begin and then for each year thereafter,
shall not be less than the quotient obtained by dividing the entire Policy Value
by the lesser of: (a) the life expectancy of the Owner, or the joint life
expectancy of such Owner and the Beneficiary, whichever is applicable; or (b) if
the Owner's spouse is not the Beneficiary, the applicable divisor determined
from the table set forth in Proposed Income Tax Regulation Section
1.401(a)(9)-2. Distributions after the death of the Owner will be calculated
using the applicable life expectancy as the relevant divisor without regard to
Proposed Income Tax Regulation Section 1.401(a)(9)-2.
Life expectancy of the Owner and the joint life expectancy of the Owner and the
Beneficiary are computed by use of the return multiples contained in Tables V
and VI of Income Tax Regulation Section 1.72-9. Unless otherwise elected by the
Owner by the time distributions are required to begin, life expectancies will be
recalculated annually. Such election will be irrevocable as to the Owner and
will apply to all subsequent years. The life expectancy of a nonspouse
Beneficiary may not be recalculated. Instead, the life expectancy of such
nonspouse Beneficiary will be calculated using the attained age of such
nonspouse Beneficiary during the Calendar Year in which such nonspouse
Beneficiary attains age 70 1/2, and payments for subsequent years will be based
on such life expectancy reduced by one year for each Calendar Year which has
elapsed since the Calendar Year in which the life expectancy of such nonspouse
Beneficiary was first calculated.
Distributions Beginning Before the Death of the Owner - If the Owner dies after
his or her annuity has begun, any benefit payable will continue to be
distributed at least as rapidly as under the method of distribution being used
prior to the Owner's death. Distributions are considered to have begun if
distributions are: (a) made on account of the Owner reaching his or her Required
Beginning Date, or (b) prior to the Required Beginning Date, distributions
irrevocably commence to the Owner over a period permitted and in an Annuity Form
acceptable under Income Tax Regulation Section 1.401(a)(9).
Distributions Beginning After the Death of the Owner - If the Owner dies before
his or her annuity begins, the Death Benefit will be distributed as follows:
(a) The Death Benefit must be completely distributed by December 31 of
the Calendar Year containing the fifth anniversary of the Owner's
date of death; or
(b) If distribution of the Death Benefit is to be made to a nonspouse
Beneficiary, such nonspouse Beneficiary may elect, not later than
December 31 of the Calendar Year following the Calendar Year of the
Owner's date of death, to receive the Death Benefit in the form of an
annuity from us, provided that: (1) such annuity is distributed over
the life of such nonspouse Beneficiary or over a period certain not
extending beyond the life expectancy of such nonspouse Beneficiary;
and (2) such distributions begin on or before December 31 of the
Calendar Year immediately following the Calendar Year of the Owner's
date of death; or
3-007 07-194 Page 2
<PAGE>
(c) If the Beneficiary of the Owner is the Owner's surviving spouse, the
spouse may elect, not later than the earlier of December 31 of the
Calendar Year containing the fifth anniversary of the Owner's date of
death, or the date distributions are required to begin under this
subparagraph (c), to receive the Death Benefit in the form of an
annuity from us, provided that such annuity is distributed in equal
or substantially equal payments over the life or life expectancy of
such spouse commencing at any date prior to the later of: (i)
December 31 of the Calendar Year following the Calendar Year in which
the Owner's death occurs; or (ii) December 31 of the Calendar Year in
which the deceased Owner would have attained age 70 1/2; or
(d) If the Beneficiary of the Owner is the Owner's surviving spouse,
the spouse may elect to treat the policy as his or her own
Individual Retirement Annuity. Upon receipt of such election,
in a form and manner acceptable to us, at our Service Office:
(1) all rights of the spouse as Beneficiary under the policy in
effect prior to such election will cease; (2) the spouse will
become the Owner of the policy; and (3) all rights and privileges
granted by the policy or allowed by us will belong to the spouse
as Owner of the policy. This election will be deemed to have been
made by the spouse if such spouse makes a Premium payment to the
policy, makes a rollover to or from the policy or fails to make
a timely election as described in subparagraph (c).
Once payments commence under the Annuity Form and Payment Option elected by the
spouse or nonspouse Beneficiary, no change in the form of payment can be made.
Life expectancy is computed by use of the return multiples contained in Tables V
and VI of Income Tax Regulation Section 1.72-9. For purposes of this provision
and unless otherwise elected by the Owner's surviving spouse by the time
distributions are required to begin, life expectancies will be recalculated
annually. Such election will be irrevocable as to the surviving spouse and will
apply to all subsequent years. In the case of any other Beneficiary, life
expectancy will be calculated using the attained age of such nonspouse
Beneficiary during the Calendar Year in which distributions are required to
begin in accordance with this provision, and payments for subsequent years will
be based on such life expectancy reduced by one year for each Calendar Year
which has elapsed since the Calendar Year in which the life expectancy of such
nonspouse Beneficiary was first calculated.
Payments to Minors - If the Owner has died, any amount paid to a child of the
Owner will be treated as if it had been paid to the surviving spouse if the
remainder of the value of the policy becomes payable to the surviving spouse
when the child reaches the age of majority.
Signed for the Company at New York, New York, to be effective as of the Policy
Date.
FIRST TRANSAMERICA LIFE INSURANCE COMPANY
[GRAPHIC OMITTED]
3-007 07-194 Page 3
<PAGE>
DOLLAR COST AVERAGING OPTION
ENDORSEMENT
First Transamerica Life Insurance Company has issued this Endorsement as a part
of the policy to which it is attached.
This Endorsement adds a Dollar Cost Averaging Option to the policy which allows
the Owner to automatically transfer amounts from one selected Sub-account (from
among those being allowed by us at such time) to one or more Sub-accounts of the
Variable Account on a monthly basis.
This option applies only if elected by the Owner as described below. The Owner's
election of this option will have no affect on benefits provided by the policy,
other than as specifically provided herein. The terms defined in the policy and
in any other Endorsement attached to the policy will have the same meaning when
used in this Endorsement.
DOLLAR COST AVERAGING OPTION
Election of Dollar Cost Averaging - Before the Annuity Date, the Owner may
elect, in a form and manner acceptable to us, to automatically transfer amounts
from one selected Sub-account (from among those being allowed by us at such
time) to one or more Sub-accounts on a monthly basis, subject to the provisions
of this Endorsement.
Transfer Allocation - The Owner's request for this option must specify: (a) the
Sub-account(s) from which the transfers are to be made; (b) the dollar amount of
each monthly transfer, subject to the minimum and maximum transfer amount
described below; and (c) the Sub-account(s) to receive the transferred amounts.
Minimum Sub-account Value - At the time of the Owner's election and of the first
automatic transfer, the value of the selected Sub-account from which the
transfers are to be made must be at least $5,000.
Minimum and Maximum Transfer Amount - The minimum monthly amount that can be
transferred from the selected Sub-account is $250, subject to a maximum monthly
amount equal to one-twelfth of the value of that Sub-account. The minimum
monthly amount that can be transferred into any other Sub-account is the greater
of $250, or 10% of the total monthly amount being transferred from the selected
Sub-account.
Commencement of Dollar Cost Averaging - Transfers under this option will
commence on the tenth day of the month following receipt of the election at our
Service Office. Such date may not be earlier than: (a) 30 days after the Policy
Date shown on the Policy Data page; or (b) the end of the Free Look Period,
whichever is later. If the tenth day is not a Valuation Day, Dollar Cost
Averaging will start on the next following Valuation Day. Subsequent transfers
will be made on the tenth day of each month thereafter, and will continue for
twelve consecutive months from the date the option becomes effective.
We reserve the right, upon advance written notice to the Owner, to change the
day of the month on which monthly transfers commence and/or are made under this
option.
Transfers under this option will be in addition to any other transfers the Owner
may make in accordance with the terms of the Transfer Provisions of the policy.
The conditions outlined under the Transfer Provisions will be waived only for
transfers made under this option.
Continuation of Dollar Cost Averaging - Within the 30 day period ending on the
day of the last monthly transfer, the Owner may request that monthly transfers
be continued for an additional twelve months. Continuation of this option will
be treated as a new election and will be subject to the provisions of this
Endorsement. If no election is made by the Owner to continue Dollar Cost
Averaging, the option will automatically terminate with the twelfth transfer.
3-007 08-194 Page 1
<PAGE>
Termination of Dollar Cost Averaging Option - Automatic monthly transfers will
continue in effect unless terminated by the Owner or automatically terminated by
us due to the occurrence of one of the following events:
(a) the transfer amount has reduced the value of the selected Sub-account
from which such transfers are made to less than $1,000. At that time,
the remaining value in that Sub-account will also be transferred pro
rata to the receiving Sub-account(s) and Dollar Cost Averaging will
cease; or
(b) a withdrawal or a transfer (other than a transfer made under this
option) is made from the selected Sub-account from which the
automatic transfers are made during the period in which Dollar Cost
Averaging is in effect; or
(c) the policy is annuitized, surrendered or otherwise distributed
as a result of the Owner's or Annuitant's death; or
(d) no election is made by the Owner to continue Dollar Cost Averaging
after the twelfth transfer.
If automatic termination of Dollar Cost Averaging occurs, we will send written
notification to the Owner.
The Owner may terminate the automatic monthly transfers in effect at any time.
The termination of such transfers will be processed the day the request, in a
form and manner acceptable to us, is received at our Service Office. Once the
option is terminated by the Owner or by us, it may not be elected again until
the next Policy Anniversary immediately following the effective date of
termination.
We reserve the right to send written notification to the Owner as to the options
available if the termination of the automatic monthly transfers, either by the
Owner or us, results in the value of the receiving Sub-account(s) to which
monthly transfers were made to be less than $1,000. The Owner will have 10 days
from the date our notice is mailed to:
(a) transfer the value of the Sub-account(s) to another Sub-account with
a current value; or
(b) transfer funds (subject to a minimum transfer amount of $500) from
another Sub-account into the receiving Sub-account(s) to bring the
value of that Sub-account to at least $1,000; or
(c) submit an additional Premium (subject to the Per Payment Minimum
shown on the Policy Data page) to bring the value of the
Sub-account(s) to at least $1,000; or
(d) transfer the entire value of the receiving Sub-account(s) back into
the Sub-account from which the automatic transfers were made.
If no election is made by the Owner and received by us at our Service Office
prior to the end of the 10 day period, we reserve the right to transfer the
value of the receiving Sub-account(s) back into the Sub-account from which the
automatic transfers were made. Transfers made as a result of (a), (b) or (d)
above, will not be counted for purposes of the twelve free or eighteen allowable
transfers per Policy Year limitation, as described under the Transfer Provisions
of the policy.
Signed for the Company at New York, New York, to be effective as of the Policy
Date.
FIRST TRANSAMERICA LIFE INSURANCE COMPANY
[GRAPHIC OMITTED]
3-007 08-194 Page 2
<PAGE>
SYSTEMATIC WITHDRAWAL OPTION
ENDORSEMENT
First Transamerica Life Insurance Company has issued this Endorsement as a part
of the policy to which it is attached.
This Endorsement adds a Systematic Withdrawal Option to the policy which allows
the Owner to automatically withdraw amounts from one or more Sub-accounts of the
Variable Account on a monthly basis.
This option applies only if elected by the Owner as described below. The Owner's
election of this option will affect other rights and benefits provided by the
policy as set forth in this Endorsement. The terms defined in the policy and in
any other Endorsement attached to the policy will have the same meaning when
used in this Endorsement.
SYSTEMATIC WITHDRAWAL OPTION
Election of Systematic Withdrawal Option - Before the Annuity Date, the Owner
may elect, in a form and manner acceptable to us, to automatically withdraw
amounts from one or more Sub-accounts of the Variable Account on a monthly
basis, subject to any withdrawal limitations imposed under any applicable
federal or state law, rules or regulations and further subject to the provisions
of this Endorsement. Other distribution modes may be permitted, subject to our
prior approval.
Fund Allocation - All systematic withdrawals will be taken from the
Sub-account(s) of the Variable Account selected by the Owner based on the
percentage allocations specified by the Owner. If the Owner does not indicate
the Sub-account(s) from which the withdrawals are to be made, systematic
withdrawals will be taken pro rata from all Sub-accounts on the date of each
systematic withdrawal.
Minimum Policy Value - The minimum Policy Value at the time of the Owner's
election and of the first systematic withdrawal must be at least $15,000.
Systematic Withdrawal Amount - The minimum monthly amount of each systematic
withdrawal may not be less than $125, subject to a maximum monthly amount equal
to one-twelfth of the sum of: (a) 10% of total Premiums received by us that are
less than seven complete Policy Years old; and (b) 10% of Premiums not
previously withdrawn that are at least seven complete Policy Years old. The
maximum monthly amount will be determined as of the date of the first systematic
withdrawal payment.
Annual Processing Fee - We reserve the right, upon 30 days advance written
notice to the Owner, to impose an annual processing fee of an amount not to
exceed $25. If imposed, the fee will be deducted in equal amounts from each
systematic withdrawal before the payment is made to the Owner.
Commencement of Systematic Withdrawals - Systematic withdrawals will commence on
the fourth day of the month following receipt of the election at our Service
Office. Such date may not be earlier than: (a) 30 days after the Policy Date
shown on the Policy Data page; or (b) the end of the Free Look Period, whichever
is later. If the fourth day is not a Valuation Day, systematic withdrawals will
start on the next following Valuation Day. Subsequent withdrawals will be made
on the fourth day of each month thereafter.
We reserve the right, upon advance written notice to the Owner, to change the
day of the month on which withdrawals commence and/or are made under this
option.
3-007 09-194 Page 1
<PAGE>
Systematic withdrawals will not be subject to the condition of the policy which
limits the Owner to only one withdrawal during a single Policy Year, nor will
such withdrawals be subject to any Contingent Deferred Sales Load. However,
premium taxes, if any, applicable to each systematic withdrawal will be deducted
from the amount withdrawn before payment is made to the Owner.
While this option is in effect, no other withdrawals from the policy will be
allowed, including withdrawals under the option of the policy, if any, which
provides for automatic payout of amounts to comply with federal statutory and
regulatory requirements for purposes of required minimum distributions.
Termination of Systematic Withdrawals - Systematic withdrawals will continue in
effect unless terminated by the Owner or automatically terminated by us due to
the occurrence of one of the following events:
(a) the withdrawal has reduced the value of the Sub-account from which
such withdrawals are made to an amount less than $1,000. At that
time, the remaining value in that Sub-account will be transferred pro
rata among the other Sub-accounts of the Variable Account with
current values, and the Systematic Withdrawal Option will cease; or
(b) a withdrawal (other than a systematic withdrawal) from, or surrender
of, the policy occurs during the period in which this option is in
effect. In this case, the full amount of the withdrawal or surrender
may be subject to a Contingent Deferred Sales Load, unless the
proceeds of such surrender is applied to provide an immediate annuity
from us under an Annuity Form involving life contingencies on or
after the third Policy Anniversary; or
(c) the policy is annuitized, surrendered or otherwise distributed as
a result of the Owner's or Annuitant's death.
If automatic termination of the systematic withdrawals occur, we will send
written notification to the Owner.
The Owner may terminate the systematic withdrawals in effect at any time. The
termination of such systematic withdrawals will be processed the day the
request, in a form and manner acceptable to us, is received at our Service
Office. Once the option is terminated by the Owner or by us, it may not be
elected again until the next Policy Anniversary immediately following the
effective date of termination.
Signed for the Company at New York, New York, to be effective as of the Policy
Date.
FIRST TRANSAMERICA LIFE INSURANCE COMPANY
[GRAPHIC OMITTED]
3-007 09-194 Page 2
<PAGE>
AUTOMATIC PAYOUT OPTION
ENDORSEMENT
First Transamerica Life Insurance Company has issued this Endorsement as a part
of the policy to which it is attached.
This Endorsement adds an Automatic Payout Option (APO) to the policy for
purposes of calculating and distributing required minimum distributions under
current federal statutory and regulatory requirements. The calculation and
distribution of such required minimum distribution amounts apply only to this
policy and will be determined based on the information provided to us by the
Owner, the provisions of the policy, this Endorsement and applicable federal
law, rules or regulations in effect at the time of the Owner's election.
This option applies only if elected by the Owner as described below. The Owner's
election of this option will affect other rights and benefits provided by the
policy as set forth in this Endorsement. The election of certain calculation
methods that do not provide for annual recalculation of age may cause
distribution of amounts that may result in the value of the policy to be fully
distributed prior to the life expectancy of the Owner.
The terms defined in the policy and in any other Endorsement attached to the
policy will have the same meaning when used in this Endorsement. For purposes of
this Endorsement, the following definition applies:
Required Beginning Date - Solely for calculating APO withdrawal amounts,
the Required Beginning Date is deemed to be April 1 of the Calendar Year
following the Calendar Year in which the Owner attains age 70 1/2.
AUTOMATIC PAYOUT OPTION
Election of Automatic Payout Option (APO) - Before the Annuity Date, the Owner
may elect, in a form and manner acceptable to us, to receive distributions (APO
withdrawals) from the policy to comply with required minimum distributions in
accordance with federal statutory and regulatory requirements.
Election Period - The earliest date on which APO may be elected is six months
prior to January 7 of the Calendar Year in which the Owner attains age 70 1/2,
but not later than the first day of the month immediately preceding the month in
which the Owner attains age 84.
Fund Allocation - All APO withdrawals will be taken from the Sub-account(s) of
the Variable Account selected by the Owner based on the percentage allocations
specified by the Owner. If the Owner does not indicate the Sub-account(s) from
which APO withdrawals are to be made, APO withdrawals will be taken pro rata
from all Sub-accounts on the date of each APO withdrawal.
Minimum Policy Value - The minimum Policy Value at the time of the Owner's
election and at the time of the first APO withdrawal payment must be at least
$15,000.
APO Withdrawal Amount - The amount of each APO withdrawal to be distributed from
the policy on an annual basis will be the greater of: (a) the amount determined
by dividing: (i) the entire Policy Value (adjusted as required by federal law,
rules or regulations) as of December 31 of the Calendar Year immediately
preceding the Calendar Year for which the distribution is being made; by (ii)
the life expectancy of the Owner or the joint life expectancy of such Owner and
the Beneficiary, determined in accordance with federal law, rules or regulations
and the Owner's election; or (b) $500.
3-007 10-194 Page 1
<PAGE>
Distribution Modes - APO withdrawals are available on a monthly, quarterly,
semi-annual or annual basis. If the Owner elects other than an annual
distribution mode, the minimum modal APO withdrawal must be at least $150. The
Owner may, at any time, change the distribution mode under APO upon written
notice to us at our Service Office. The change in distribution mode will take
effect with the first APO withdrawal in the Calendar Year following the Calendar
Year in which the written notice of change is received by us at our Service
Office.
Commencement of APO Withdrawals - APO withdrawals will commence on the seventh
day of the month following receipt of the election at our Service Office. Such
date may not be earlier than: (a) 30 days after the Policy Date shown on the
Policy Data page; or (b) the end of the Free Look Period, whichever is later. If
the seventh day is not a Valuation Day, APO withdrawals will start on the next
following Valuation Day. Subsequent withdrawals will be made on the seventh day
of a month thereafter, based on the distribution mode chosen by the Owner.
We reserve the right, upon advance written notice to the Owner, to change the
day of the month on which APO withdrawals commence and/or are made under this
option.
Except as provided in the following paragraph, APO withdrawals will not be
subject to the condition of the policy which limits the Owner to only one
withdrawal during a single Policy Year, nor will such withdrawals be subject to
any Contingent Deferred Sales Load.
The one withdrawal per Policy Year limitation will continue to apply to any
other partial withdrawal the Owner may make under the terms of the policy. If an
APO withdrawal and a partial withdrawal are made in the same Policy Year, the
applicability of any Contingent Deferred Sales Load will be determined as
provided below. Each APO withdrawal amount will be adjusted for any applicable
Contingent Deferred Sales Load and any applicable premium tax.
Partial Withdrawals in Addition to APO Withdrawals - While APO is in effect, the
Owner may continue to make partial withdrawals from the policy, subject to the
Withdrawal Provisions of the policy. However, if the policy contains an option
for systematic withdrawals, such option may not be in effect while APO is in
effect.
The first withdrawal during a Policy Year, whether an APO or a partial
withdrawal, will establish an Allowed Amount which can be taken during such
Policy Year without incurring a Contingent Deferred Sales Load. Each amount
withdrawn during the Policy Year will reduce the Allowed Amount to the extent
that the withdrawal was made without charges. Any withdrawal in excess of the
Allowed Amount for the Policy Year will be subject to a Contingent Deferred
Sales Load.
Additional Premiums - Once APO is elected by the Owner and until the option is
terminated, either by the Owner or by us, only rollovers and transfers may be
added to the policy and then only with our consent. Rollovers or transfers may
not be made to the policy on or after the Required Beginning Date, if: (a) the
designated beneficiary named on the transferring or distributing account differs
from the designated Beneficiary of this policy; or (b) the calculation method
for the required minimum distribution amount on the transferring or distributing
account differs from the calculation method chosen by the Owner for purposes of
APO withdrawals made under this policy.
Effect on Annuity Date - For each year an APO withdrawal is made, the Annuity
Date will be automatically postponed in yearly increments, unless we are
notified by the Owner to the contrary. In no event may the Annuity Date be
postponed to a date later than the first day of the month immediately preceding
the month of the Owner's 85th birthday.
3-007 10-194 Page 2
<PAGE>
Termination of Automatic Payout Option - APO withdrawals will continue in effect
unless terminated by the Owner or automatically terminated by us due to the
occurrence of one of the following events:
(a) the policy is annuitized, surrendered or otherwise distributed as
a result of the Owner's or Annuitant's death; or
(b) the Sub-account(s) from which APO withdrawals are made is
insufficient to provide an APO withdrawal; or
(c) the Owner reaches the first day of the month immediately preceding
the month of his or her 85th birthday; or
(d) the Owner makes more than one change in Beneficiary for reasons other
than death, divorce or marriage.
If automatic termination of APO occurs, we will send written notification to the
Owner.
The Owner may terminate APO at any time. The termination of APO will be
processed the day the request, in a form and manner acceptable to us, is
received at our Service Office. Once APO is terminated, it may not be elected
again.
Signed for the Company at New York, New York, to be effective as of the Policy
Date.
FIRST TRANSAMERICA LIFE INSURANCE COMPANY
[GRAPHIC OMITTED]
3-007 10-194 Page 3
<PAGE>
BENEFIT DISTRIBUTION ENDORSEMENT
First Transamerica Life Insurance Company has issued this Endorsement as a part
of the policy to which it is attached.
This Endorsement modifies the policy to the extent necessary to comply with Code
Section 401(a)(9) and the rules and regulations issued thereunder.
Definition of Terms - Unless redefined below, the terms defined in the policy
will have the same meaning when used in this Endorsement. For purposes of this
Endorsement, the following definitions apply:
Beneficiary - Any individual who qualifies as a "designated beneficiary"
pursuant to Code Section 401(a)(9)(E) and is named to receive the Death
Benefit payable by us in the event of the Annuitant's death before the
Annuity Date.
Plan - The employee pension benefit plan to which the policy is issued.
Required Beginning Date - April 1 of the Calendar Year following the
Calendar Year in which the Annuitant attains age 70 1/2.
Required Minimum Distribution - Notwithstanding any other provision of the
policy, distribution must be made from the policy in a manner which satisfies
the requirements of Code Section 401(a)(9), including the incidental death
benefit requirements of Code Section 401(a)(9)(G), as follows:
The entire Policy Value must be distributed, or begin to be distributed, no
later than the Required Beginning Date, in equal or substantially equal amounts
over: (a) the Annuitant's life or the lives of both the Annuitant and the
Beneficiary; or (b) a period not extending beyond the Annuitant's life
expectancy, or the joint life expectancy of the Annuitant and the Beneficiary.
If the Policy Value is to be distributed in any form other than a lump sum, then
the amount to be distributed each Calendar Year must be at least an amount equal
to the quotient obtained by dividing: (a) the entire Policy Value as of December
31 of the Calendar Year immediately preceding the Calendar Year for which the
distribution is being made: by (b) the life expectancy of the Annuitant, or the
joint life expectancy of such Annuitant and the Beneficiary.
If Annuitant Dies Before the Annuity Date - If the Annuitant dies before
the Annuity Date, the Death Benefit will be distributed as follows:
(a) The Death Benefit must be completely distributed by December 31 of the
Calendar Year containing the fifth anniversary of the Annuitant's date
of death; or
(b) If distribution is to be made to a nonspouse Beneficiary, such
nonspouse Beneficiary may elect, not later than December 31 of the
Calendar Year following the Calendar Year of the Annuitant's date of
death, to receive the Death Benefit in the form of an annuity from us,
provided that: (1) such annuity is distributed in substantially equal
installments over the life of such nonspouse Beneficiary or over a
period not extending beyond the life expectancy of such nonspouse
Beneficiary; and (2) such distributions begin on or before December 31
of the Calendar Year immediately following the Calendar Year of the
Annuitant's date of death; or
3-007 12-194 Page 1
<PAGE>
(c) If the Beneficiary of the Annuitant is the Annuitant's surviving
spouse, the spouse may elect, not later than the date distribution is
required to begin under this provision, to receive the Death Benefit in
the form of an annuity from us, provided that: (1) such annuity is
distributed in equal or substantially equal payments over the life of
such spouse or over a period not extending beyond the life expectancy
of such spouse; and (2) such distributions are required to begin not
earlier than: (i) December 31 of the Calendar Year following the
Calendar Year in which the Annuitant's death occurs; or (ii) December
31 of the Calendar Year in which the deceased Annuitant would have
attained age 70 1/2, whichever is later.
Once payments commence under the Annuity Form and Payment Option elected by the
spouse or nonspouse Beneficiary, no change in the form of payment can be made.
If no election is received from the spouse or nonspouse Beneficiary within the
required election period specified in subparagraph (b) or (c) of this provision,
as applicable, then we will pay the Death Benefit to such Beneficiary in a cash
payment. Such cash payment will be in full settlement of all our liability under
the policy. If the Beneficiary is not an individual, then only a cash payment
will be paid.
If Annuitant Dies After the Annuity Date - If the Annuitant dies after the
Annuity Date, any benefit payable will be as provided under the Annuity Form
then in effect.
Waiver and Spousal Consent Requirements - If the Plan trustee(s) is not the
Owner and the Annuitant is legally married as of the date of the Annuitant's
designation or election of (a), (b), (c) and/or (d) below, the Annuitant's right
to:
(a) name a Beneficiary other than the Annuitant's spouse;
(b) make a partial withdrawal or surrender the policy for cash;
(c) elect to take a loan from the policy, if the policy allows for loans;
and/or
(d) choose a form of payment other than the Life and Contingent Annuity,
naming the Annuitant's spouse as Contingent Annuitant,
will be honored only upon our receipt of the Annuitant's waiver of the then
current spouse's written consent in the form and manner required by us. The
spouse's written consent must acknowledge understanding of the effect of such
consent and must be notarized. Without such waiver and consent, the Annuitant's
designation or election of (a), (b), (c) and/or (d) above, will not be honored.
If, however, the Annuitant can establish that the consent of the spouse cannot
be obtained because: (i) there is no spouse; (ii) the spouse cannot be located;
(iii) the spouse is held incompetent; and/or (iv) the Annuitant is legally
separated or has been abandoned (within the meaning of local law) and the
Annuitant has a court order to this effect, then, unless otherwise required by a
qualified domestic relations order as described in Code Section 414(p), the
Annuitant's designation or election of (a), (b), (c) and/or (d) above, will be
honored.
The written consent of the Annuitant's spouse, once given with respect to the
Annuitant's waiver and designation or election of (a), (b), (c) and/or (d)
above, is irrevocable as to such waiver. If the Annuitant revokes his or her
waiver, a new spousal consent will be required for any new waiver and
designation or election of (a), (b), (c) and/or (d) above.
If the Annuitant re-marries, the Annuitant's designation or election of (a),
(b), (c) and/or (d) above, may cease to be effective and a new waiver and
spousal consent may be required.
For purposes of the policy, "spouse" or "surviving spouse" means the spouse to
which the Annuitant is married at the time of the Annuitant's designation or
election of (a), (b), (c) and/or (d) above, except that a former spouse shall be
treated as the spouse or surviving spouse, and a current spouse shall not be
treated as a spouse or surviving spouse, to the extent provided under a
qualified domestic relations order as described in Code Section 414(p).
3-007 12-194 Page 2
<PAGE>
Limitation of Period Certain Annuity Forms - To the extent necessary to comply
with Code Section 401(a)(9) and the rules and regulations issued thereunder, in
no event may any period certain only Annuity Form or the period certain portion
which is in combination with any other Annuity Form available under the policy
exceed the life expectancy of the Annuitant and/or of any other measuring life.
Limitation of Payment - Unless the Plan provides otherwise, if the Policy Value
at the time of annuitization is $2,000 or less, we will pay the Policy Value in
a cash payment, regardless of the Annuity Form chosen by the Annuitant or any
other payee. Such cash payment will be in full settlement of our liability to
the payee for the benefit.
Restrictions Imposed by Federal Laws and Regulations - Benefits to be provided
under the policy are subject to any limitation in the Plan required by the U.S.
Internal Revenue Code, as amended, and the Employee Retirement Income Security
Act (ERISA), as amended.
Signed for the Company at New York, New York, to be effective as of the Policy
Date.
FIRST TRANSAMERICA LIFE INSURANCE COMPANY
[GRAPHIC OMITTED]
3-007 12-194 Page 3
<PAGE>
GUARANTEED MINIMUM DEATH BENEFIT
ENDORSEMENT
First Transamerica Life Insurance Company has issued this Endorsement as a part
of the policy to which it is attached.
The terms defined in the policy and in any other Endorsement attached to the
policy will have the same meaning when used in this Endorsement.
GUARANTEED MINIMUM DEATH BENEFIT
Guaranteed Minimum Death Benefit - Subject to the provisions of the policy
and in lieu of the Death Benefit amount payable under the terms of the
policy, the Death Benefit will be a Guaranteed Minimum Death Benefit.
If upon death prior to the Annuity Date, the Annuitant or Owner, as
applicable, had not attained his or her 85th birthday, the beneficiary will
receive the Guaranteed Minimum Death Benefit. The Guaranteed Minimum Death
Benefit is equal to the greatest of (a), (b) or (c) below, where (a), (b)
and (c) are as follows:
(a) is the Policy Value; or
(b) is 100% of all Premiums paid by the Owner, less the sum of all
withdrawals and any applicable premium taxes; or
(c) is the Maximum Policy Anniversary Value.
The Maximum Policy Anniversary Value is equal to the greatest Policy
Anniversary Value prior to the earliest of the Annuitant's or Owner's 75th
birthday, where the Policy Anniversary Value is equal to the Policy Value
on a Policy Anniversary, increased by the sum of all Premiums paid by the
Owner since that Policy Anniversary, less the sum of all withdrawals and
any applicable premium taxes since that Policy Anniversary.
If deceased, the Annuitant or Owner, as applicable, had attained age 85,
then the Death Benefit will equal the Policy Value.
The Guaranteed Minimum Death Benefit will be determined as of the end of
the Valuation Period during which the later of the following items is
received by us at our Service Office: (i) proof of death of the Owner or
Annuitant; and (ii) the written notice of the method of settlement elected
by the Beneficiary.
Signed for the Company at New York, New York, to be effective as of the Policy
Date.
FIRST TRANSAMERICA LIFE INSURANCE COMPANY
[GRAPHIC OMITTED]
3-007 13-194
<PAGE>
Exhibit (9)(a)
Opinion and Consent of Counsel
April 17, 1996
First Transamerica Life
Insurance Company
575 Fifth Avenue, 36th Floor
New York, New York 10017
Gentlemen:
With reference to the Post-Effective Amendment No. 4 to the Registration
Statement on Form N-4 filed by First Transamerica Life Insurance Company and its
Separate Account VA-2LNY with the Securities and Exchange Commission covering
certain variable annuity contracts (File No. 33-55152), I have examined such
documents and such law as I considered necessary and appropriate, and on the
basis of such examinations, it is my opinion that:
1.) First Transamerica Life Insurance Company is duly organized
and validly existing under the laws of the State of New York.
2.) The variable annuity contracts, when issued as contemplated by
the said Form N-4 Registration Statement, as amended, will
constitute legal, validly issued and binding obligations of
First Transamerica Life Insurance Company.
I hereby consent to the filing of this opinion as an exhibit to the said
Post-Effective Amendment No. 4 to the Form N-4 Registration Statement and to the
reference to my name under the caption "Legal Matters" in the Prospectus
contained in the said Post-Effective Amendment No. 4. In giving this consent, I
am not admitting that I am in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933.
Very truly yours,
James W. Dederer
Chairman, General Counsel
and Corporate Secretary
<PAGE>
Exhibit (10)(a)
Consent of Counsel
<PAGE>
Sutherland, Asbill & Brennan
1275 Pennsylavania Avenue, N.W.
Washington, D.C. 20004-2404
Frederick R. Bellamy
Direct line (202) 383-0126
April 22, 1996
First Transamerica Life Insurance Company
575 Fifth Avenue
New York, New York 10017
Re: Separate Account VA-2LNY
File No. 33-55152
Gentlemen:
We hereby consent to the reference to our name under the caption "Legal
Matters" in the Prospectus filed as part of the Post-Effective Amendment No.5
to the Form N-4 Registration Statement for Separate Account VA-2LNY. In giving
this consent, we do not admit that we are in the category of person whose
consent is required under Section 7 of the Securities Act of 1993.
Very truly yours,
SUTHERLAND, ASBILL & BRENNAN
By: Frederick R. Bellamy
<PAGE>
Exhibit (10)(b)
Consent of Independent Auditors
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed Financial
Information" and "Accountants" in the Prospectus and to the use of our reports
dated April 15, 1996 and February 14, 1996 on Separate Account VA-2LNY of First
Transamerica Life Insurance Company and First Transamerica Life Insurance
Company, respectively, contained in the Statement of Additional Information.
Ernst & Young LLP
Los Angeles, California
April 26, 1996
<PAGE>
Exhibit 15(d)
Power of Attorney
<PAGE>
POWER OF ATTORNEY
The undersigned director of First Transamerica Life
Insurance Company, a New York corporation (the "Company"), hereby
constitutes and appoints Aldo Davanzo, James W. Dederer, Charles
E. LeDoyen and David E. Gooding and each of them (with full power
to each of them to act alone), his or her true and lawful
attorney-in-fact and agent, with full power of substitution to
each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Act of 1940, and any and all amendments
and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said
attorneys-in-fact and agents and his or their substitutes being
empowered to act with or without the others or other, and to have
full power and authority to do or cause to be done in the name
and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be
done in and about the premises in order to effectuate the same,
as fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or
her hand, this ______ day of January, 1996.
_____________________________
Thomas J. Cusack
<PAGE>
Exhibit 15(i)
Power of Attorney
<PAGE>
POWER OF ATTORNEY
The undersigned director of First Transamerica Life
Insurance Company, a New York corporation (the "Company"), hereby
constitutes and appoints Aldo Davanzo, James W. Dederer, Charles
E. LeDoyen and David E. Gooding and each of them (with full power
to each of them to act alone), his or her true and lawful
attorney-in-fact and agent, with full power of substitution to
each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Act of 1940, and any and all amendments
and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said
attorneys-in-fact and agents and his or their substitutes being
empowered to act with or without the others or other, and to have
full power and authority to do or cause to be done in the name
and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be
done in and about the premises in order to effectuate the same,
as fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or
her hand, this ______ day of January, 1996.
_____________________________
Daniel E. Jund
