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, P.O.
Box 30757, Los Angeles, California 90030-0757 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.
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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, Small Company Stock, Disciplined Stock, and International
Value 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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TABLE OF CONTENTS
Page
DEFINITIONS..........................................................5
SUMMARY..............................................................8
CONDENSED FINANCIAL INFORMATION.....................................16
PERFORMANCE DATA....................................................17
FIRST TRANSAMERICA LIFE INSURANCE COMPANY AND THE VARIABLE
ACCOUNT............................................................19
First Transamerica Life Insurance Company..................19
Published Ratings..........................................19
The Variable Account.......................................19
THE FUNDS...........................................................19
THE POLICY..........................................................23
Qualified Policies.........................................23
POLICY APPLICATION AND PREMIUMS.....................................23
Premiums...................................................23
Allocation of Premiums.....................................24
POLICY VALUE........................................................24
TRANSFERS...........................................................25
Before the Annuity Date....................................25
Possible Restrictions......................................25
Dollar Cost Averaging......................................26
After the Annuity Date.....................................26
CASH WITHDRAWALS....................................................26
Withdrawals................................................26
Systematic Withdrawal Option...............................27
Automatic Payout Option....................................28
DEATH BENEFIT.......................................................28
Payment of Death Benefit...................................29
Designation of Beneficiaries...............................29
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............................................30
Contingent Deferred Sales Load...........................30
Administrative Charges...................................31
Mortality and Expense Risk Charge........................31
Premium Taxes............................................32
Transfer Fee.............................................32
Systematic Withdrawal Option.............................32
Taxes....................................................32
Portfolio Expenses.......................................32
...............................................
ANNUITY PAYMENTS.................................................33
Annuity Date............................................33
Annuity Payment.........................................33
Election of Annuity Forms and Payment Options...........33
Annuity Payment Options.................................34
Fixed Annuity Payment Option............................34
Variable Annuity Payment Option.........................34
Annuity Forms...........................................34
Alternate Fixed Annuity Rates...........................36
FEDERAL TAX MATTERS..............................................36
DISTRIBUTION OF THE POLICY.......................................39
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LEGAL PROCEEDINGS...........................................................39
LEGAL MATTERS...............................................................40
ACCOUNTANTS.................................................................40
VOTING RIGHTS...............................................................40
AVAILABLE INFORMATION.......................................................40
STATEMENT OF ADDITIONAL INFORMATION - TABLE OF CONTENTS.....................41
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
Example of Death Benefit Calculations.............................A-1
APPENDIX B.................................................................B-1
Description of previously issued Policies.........................B-1
This Policy is available only in New York.
As of May 1, 1996, certain Sub-Accounts are not available for immediate
investment.
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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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).
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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.
Policy Value: The total dollar amount of all Variable Accumulation
Units in each Sub-Account of the Variable Account held forthe 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: 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 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, P.O. Box 30757, Los
Angeles, CA 90030-0757, 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.
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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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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 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) Small
Company Stock; (10) Disciplined Stock; and (11) International Value, all of
which are Series of Dreyfus Variable Investment Fund; (12) the Stock Index Fund;
and (13) the Socially Responsible Fund. 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.)
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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 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 CDSL 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.)
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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 no
more than $10. (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.)
10
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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
information set forth should be considered together with the narrative provided
under the heading "Charges and Deductions" on page 30 of this Prospectus, and
with the Funds' prospectuses. In addition to the expenses listed below, premium
taxes may be applicable. Policy Transaction Expenses
Sales Load Imposed on Purchase Payments 0
Maximum Contingent Deferred Sales Load 6%
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Range of Contingent Deferred Sales Load Over Time
Policy Years since (as a percentage of Premium Receipt) Contingent Deferred
Premium Receipt(1) Sales Load 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%
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Transfer Fee(2) 0
Systematic Withdrawal Fee(2) 0
Policy Fee(3) $30
Variable Account Annual Expenses
(as a percentage of average Variable Account assets)
Mortality and Expense Risk Charges 1.25%
Administrative Expense Charge (4) .15%
Other Fees and Expenses of the Variable Account 0.00%
Total Variable Account Annual Expenses 1.40%
<TABLE>
<CAPTION>
Zero Growth
Money Managed Coupon Quality Small Capital and
Portfolio Market Assets 2000 Bond Cap AppreciationIncome
Annual Expenses(6)
(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 0.00% 0.00% 0.00% 0.00% 0.23% 0.00% 0.00%
Other Expenses 0.00% 0.25% 0.00% 0.00% 0.32% 0.25% 0.22%
Total Portfolio Annual Expenses 0.00% 0.25% 0.00% 0.00% 0.55% 0.25% 0.22%
</TABLE>
<TABLE>
<CAPTION>
Small Stock Socially
International Company DisciplinedInternational Index Responsbile
Portfolio Equity Stock Stock Value Fund Fund
Annual Expenses(6)
(as a percentage of Portfolio average net assets after fee waiver and/or expense
reimbursement )
<S> <C> <C> <C>
Management Fees 0.00% 0.14% 0.00
Other Expenses 0.23% 0.26% 0.25%
Total Portfolio Annual
Expenses 0.23% 0.40% 0.25%
</TABLE>
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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. Notes to Fee Table: (1) A portion of the Premium may be withdrawn each
year after the first
Policy Year without imposition of any Contingent Deferred Sales Load, and
after a Premium has been held by Transamerica for seven Policy Years, the
remaining Premium may be withdrawn free of any Contingent Deferred Sales
Load. (See "Charges and Deductions" page 30.)
(2) Transamerica currently does not impose a Transfer Fee or a Systematic
Withdrawal Fee. However, a Transfer Fee of $10 may be imposed for each
transfer in excess of twelve in a Policy Year, and a fee of up to $25 per
year may be imposed if the Systematic Withdrawal Option is elected. (See
"Charges and Deductions" page 30.)
(3) The current annual Policy Fee of $30 (or 2% of the Policy Value, if less)
per Policy Year is assessed only on Policies of less than $50,000. The fee
may be changed annually, but it may not exceed $60 (or 2% of the Policy
Value, if less). (See "Charges and Deductions" page 30.)
(4) The current annual Administrative Expense Charge is .15%; it may be
increased to .25%. The total of the charges described in notes (2), (3)
and (4) will never exceed the anticipated or estimated costs to
administer the Policy and the Variable Account. (See "Charges and
Deductions" page 30.)
(5) From time to time, the Portfolios' investment advisers (or the manager
and/or administrator 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, 1994 for all Portfolios would be -
Money Market: 0.50%, 0.38%, 0.88%; Managed Assets: 0.75%,
0.38%, 1.13%; Zero Coupon 2000: 0.45%, 0.60%, 1.05%; Quality
Bond: 0.65%, 0.55%, 1.20%; Small Cap: 0.75%, 0.32%, 1.07%;
Capital Appreciation: 0.75%, 0.36%, 1.11%; Growth and Income:
0.75%, 0.75%, 1.50%; International Equity: 0.75%, 1.18%, 1.93%;
Small Company Stock: 0.00%; Disciplined Stock: 0.00%;
International Value: 0.00%; Stock Index Fund: 0.30%, 0.26%,
0.56%; and Socially Responsible Fund: 0.75%, 2.10%, 2.85%. 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.
13
<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.
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:
One Year Three Years Five Years Ten Years
Money Market
Managed Assets
Zero Coupon 2000
Quality Bond
Small Cap
Capital Appreciation
Growth and Income
International Equity
Small Company Stock
Disciplined Stock
International Value
Stock Index Fund
Socially Responsible Fund
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:
One Year Three Years Five Years Ten Years
Money Market
Managed Assets
Zero Coupon 2000
Quality Bond
Small Cap
Capital Appreciation
Growth and Income
International Equity
Small Company Stock
Disciplined Stock
International Value
Stock Index Fund
Socially Responsible Fund
14
<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:
One Year Three Years Five Years Ten Years
Money Market
Managed Assets
Zero Coupon 2000
Quality Bond
Small Cap
Capital Appreciation
Growth and Income
International Equity
Small Company Stock
Disciplined Stock
International Value
Stock Index Fund
Socially Responsible Fund
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, 1994,
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:
One Year Three Years Five Years Ten Years
Money Market
Managed Assets
Zero Coupon 2000
Quality Bond
Small Cap
Capital Appreciation
Growth and Income
International Equity
Small Company Stock
Disciplined Stock
International Value
Stock Index Fund
Socially Responsible Fund
15
<PAGE>
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:
One Year Three Years Five Years Ten Years
Money Market
Managed Assets
Zero Coupon 2000
Quality Bond
Small Cap
Capital Appreciation
Growth and Income
International Equity
Small Company Stock
Disciplined Stock
International Value
Stock Index Fund
Socially Responsible Fund
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:
One Year Three Years Five Years Ten Years
Money Market
Managed Assets
Zero Coupon 2000
Quality Bond
Small Cap
Capital Appreciation
Growth and Income
International Equity
Small Company Stock
Disciplined Stock
International Value
Stock Index Fund
Socially Responsible Fund
* 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.
16
<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"), P.O. Box 30757, Los
Angeles, CA 90030-0757; (800) 258-4261. All inquiries should include the Policy
Number and the Owner's and Annuitant's names.
17
<PAGE>
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.)
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 Policy for the period from the effective date of the
registration statement for the Policy, February 18, 1993, through December 31,
1994 except for the Capital Appreciation Sub-Account which commenced operations
on April 5, 1993, and except for the Socially Responsible Sub-Account which
commenced operations on October 7, 1993.
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
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value
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>
Capital Appreciation Socially Responsible
Sub-Account Sub-Account
(Inception- (Inception-
April 5, Stock Index October 7,
1993) Sub-Account 1993)
----- ----------- -----
Accumulation Unit Value at
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
18
<PAGE>
<TABLE>
<CAPTION>
Year Ending December 30, 1994
- ------------------------------------------------------------------------
Money Managed Zero Coupon Quality
Market Assets 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value
at Beginning of Period $1.018 $12.861 $13.373 $12.445 $37.702
Accumulation Unit Value
at End of Period.. $1.048 $12.496 $12.672 $11.710 $40.064
Number of Accumulation
Units Outstanding
at End of Period.. 8,547,280.580 820,985.239 203,164.531 164,657.768 612,327.228
</TABLE>
<TABLE>
<CAPTION>
Capital Appreciation Stock Index Socially Responsible
Sub-Account Sub-Account Sub-Account
<S> <C> <C> <C> <C> <C> <C>
Accumulation Unit Value
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>
19
<PAGE>
Year Ending December 30, 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
at Beginning of Period
Accumulation Unit Value
at End of Period..
Number of Accumulation
Units Outstanding
at End of Period..
Capital Growth International Stock Index Socially Responsible
Appreciation &Income
Sub-Account Sub-Account Sub-AccountS ub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period
Accumulation Unit Value
at End of Period.....
Number of Accumulation
Units Outstanding
at End of Period.....
20
<PAGE>
Financial Statements for the Variable Account and Transamerica
The financial statements and reports of the independent certified
public accountants 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 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,
21
<PAGE>
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, 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.
22
<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 Dreyfus Variable
Investment Fund (the "Variable Fund"), Dreyfus Stock Index Fund (the "Stock
Index Fund") and The
23
<PAGE>
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 Series has separate investment objectives and
policies. As a result, each Series operates as a separate investment portfolio
and the investment performance of one Series has no effect on the investment
performance of any other Series. 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, and Wells Fargo
NIKKO Investment Advisors provides index fund management services to the Index
Fund, with The Dreyfus Corporation serving as the administrator, in accordance
with applicable agreements with the Funds. Comstock Partners, Inc., provides
sub-investment advisory services to the Asset Allocation Series and Fayez
Sarofim & Company provides sub-investment advisory services to the Capital
Appreciation Series. 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 Series
The Money Market Series' 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 Series' average
daily net assets. This Series 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 Series
The Managed Asset Series' 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 Series' average daily net assets. Zero Coupon 2000
Series
The Zero Coupon 2000 Series' 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 Series also may purchase certain other
types of stripped government or corporate securities. The Series' 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%
24
<PAGE>
of the value of the Series' average daily net assets. No more than 55% of the
Series' assets will be invested in Stripped Treasury Securities.
Quality Bond Series
The Quality Bond Series' 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 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 Series' average daily net assets.
Small Cap Series
The Small Cap Series' investment objective is to maximize capital
appreciation. It seeks to achieve its objective by investing principally in
common stocks;under normal market conditions, the Series 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 Series' average daily net assets. Capital Appreciation Series
The Capital Appreciation Series' 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 & Company at the annual rate of 0.75 of 1% of the value
of the Series' average daily net assets. Growth and Income Series
The Growth and Income Series' investment objective is to provide
long-term capital growth, current income and growth of income, consistent with
reasonable investment risk. This Series invests primarily in equity and debt
securities and money market instruments of domestic and foreign issuers. The
proportion of the Series' 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 Series' average daily net assets. International Equity
The International Equity Series' investment objective is to maximize
capital appreciation. This Series 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 Series' average daily net assets
is payable monthly to The Dreyfus Corporation. The Dreyfus Corporation has
agreed to pay M&G Investment Management Limited a monthly fee at the annual rate
of 0.30 of 1% of the value of the Series' average daily net assets. Small
Company Stock Portfolio
The Small Company Stock Portfolio's investment objective is to provide
investment results that are greater than the total return performance or
publicly-traded common stocks in the aggregate, as represented by the Russell
2500(TM) Index. This Series 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. 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 Series 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.
25
<PAGE>
International Value Portfolio
The International Value Portfolio's investment objective is long-term
capital growth. This Series invests primarily in a portfolio of publicly-traded
equity securities of foreign issuers which would be recharacterized as "value"
companies according to criteria established by the Series' investment advisers.
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's index
management fee and administration fee are each paid monthly at the annual rate
of 0.15 of 1% (for a total of 0.30%) of the value of the Stock Index Fund's
average daily net assets. Socially Responsible Fund
The Socially Responsible Fund's primary goal is to provide capital
growth. It seeks to achieve this goal by investing principally in common stocks,
or securities convertible into common stock, 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%, if
assets of the Socially Responsible Fund are $500 million or below, and 0.20% of
1% if such assets are in excess of $500 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
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
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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.
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
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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
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change by the Service Center, in a form and manner acceptable to Transamerica,
and will continue in effect until subsequently changed.
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
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(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 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.
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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.
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 is 10% of the taxable amount of the withdrawal. Withholding applies only
if the taxable amount of the withdrawal is at least $200. In
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addition, under New York law the Owner may request Transamerica to withhold New
York income tax from withdrawals. 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.)
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.
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 monthly 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.
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 CDSL 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. While the Systematic Withdrawal Option is in effect, the Owner may
not make partial cash withdrawals. A partial
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withdrawal while this option is in effect will automatically terminate the
Systematic Withdrawal Option and the full amount may be subject to a CDSL.
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. 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.
Payments will be made on the seventh day of the month or, if not a
Valuation Day, the following Valuation Day, as applicable, 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.
APO may be elected in any calendar month, but no later than the month
in which the Owner attains age 84.
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
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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 about the
Beneficiary to make the payment. The Beneficiary may receive the amount payable
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 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 the 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 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.
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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
Contract Years
Since Receipt of Contingent Deferred Sales
Load
Purchase Payment As a Percentage of
Purchase Payment
Less than one year 6%
1 year but less than 2 years 6%
2 years but less than 3 years 5%
3 years but less than 4 years 5%
4 years but less than 5 years 4%
5 years but less than 6 years 4%
6 years but less than 7 years 2%
7 or more years 0%
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 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 wirthdrawal in a Policy Year,
free
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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%
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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.
Transamerica also bears substantial risk in connection with the death
benefit before the Annuity Date, since it will pay a death benefit equal to the
greater of the Policy Value without imposition of a Contingent Deferred Sales
Load or the Premiums less withdrawals and premium taxes (so 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 the 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 no more than $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
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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 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.
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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
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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 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.
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(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.
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 Internal Revenue Code of 1986, as amended
(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 and receiving distributions
from a Qualified Policy in order to continue receiving favorable tax treatment.
Therefore,
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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
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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 the income of
the recipient as follows: (1) if distributed in a lump sum, they are taxed in
the same manner as a full surrender, as described above, or (2) if distributed
under an Annuity Option, they are taxed in the same manner as Annuity Payments,
as described above.
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
43
<PAGE>
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 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. 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
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.
44
<PAGE>
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, 1994 and
December 31, 1993, and for each of the three years in the period ended December
31, 1994, and the financial statements of the Variable Account at December 31,
1994, have been audited by Ernst & Young, 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
45
<PAGE>
the Sub-Account. Voting instructions to abstain on any item to be voted upon
will be applied on a pro rata basis to reduce the votes eligible to be cast.
Each person or entity having a voting interest in a Sub-Account will
receive proxy material, reports and other material relating to the appropriate
Portfolio.
It should be noted that the Funds are not required to, and do not
intend to, hold annual or other regular meetings of shareholders.
AVAILABLE INFORMATION
Transamerica has filed a registration statement (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
46
<PAGE>
General Limitations...................................8
Sub-Account Performance Figures.......................9
Hypothetical Sub-Account Performance Figures.........10
Portfolio Performance Figures........................11
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
47
<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).
Example of Death Benefit Calculations
[to be provided]
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 taxes.
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, maybe withdrawn each year after the first complete
Policy Year without imposition of any CDSL.
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.
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
<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
Portfolio Performance Figures.............................11
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.)
<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.
<PAGE>
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
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.
<PAGE>
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.
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
<PAGE>
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 Series or any comparable substitute
funding vehicle.
The Commission also permits Transamerica to disclose the
effective yield of the Money Market Sub-Account for the same seven-day
period, determined on a compounded basis. The effective yield is
calculated by compounding the unannualized base period return by adding
one to the base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result.
The yield on amounts held in the Money Market Sub-Account
normally will fluctuate on a daily basis. Therefore, the disclosed
yield for any given past period is not an indication or representation
of future yields or rates of return. The Money Market Sub-Account's
actual yield is affected by changes in interest rates on money market
securities, average portfolio maturity of the Money Market Series or
substitute funding vehicle, the types and quality of portfolio
securities held by the Money Market Series or substitute
<PAGE>
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.
<PAGE>
Hypothetical Performance Data
Transamerica may also disclose "hypothetical" performance data
for a Sub-Account, for periods before the Sub-Account commenced
operations. Such performance information for the Sub-Account will be
calculated based on the performance of the corresponding Portfolio and
the assumption that the Sub-Account was in existence for the same
periods as those indicated for the Portfolio, with a level of Contract
charges currently in effect. The Portfolio used for these calculations
will be the actual Portfolio that the Sub-Account will invest in.
This type of hypothetical performance data may be disclosed on
both an average annual total return and a cumulative total return
basis. Moreover, it may be disclosed assuming that the Contract is not
surrendered (i.e., with no deduction for the Contingent Deferred Sales
Load) and assuming that the Contract is surrendered at the end of the
applicable period (i.e., reflecting a deduction for any applicable
Contingent Deferred Sales Load).
Other Performance Data
Transamerica may from time to time also disclose average
annual total returns in a non-standard format in conjunction with the
standard described above. The non-standard format will be identical to
the standard format except that the Contingent Deferred Sales Load
percentage will be assumed to be 0%.
Transamerica may from time to time also disclose cumulative
total returns in conjunction with the standard format described above.
The cumulative returns will be calculated using the following formula
assuming that the Contingent Deferred Sales Load percentage will be 0%.
CTR {ERV/P} - 1
Where:
CTR= the cumulative total return net of Sub-Account recurring
charges for the period.
ERV= ending redeemable value of a hypothetical $1,000 payment
at the beginning of the one, five, or ten-year period at the end of the one,
five, or ten-year period (or fractional portion thereof).
P = a hypothetical initial payment of $1,000.
All non-standard performance data will be advertised only if
the standard performance data is also disclosed.
HISTORIC PERFORMANCE DATA
General Limitations
The figures below represent the past performance of the Sub-Accounts
and are not indicative of future performance. The figures may reflect the waiver
of advisory fees and reimbursement of other expenses.
The Variable Fund has provided the performance data for the 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.
<PAGE>
Sub-Account Performance Figures
The charts below show the historical performance data for the
Sub-Accounts since each Sub-Account's commencement of operations.
The standard average annual total return (assuming deduction for any
applicable Contingent Deferred Sales Load) for each Sub-Account is as follows:
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
Managed Assets (2/18/93) -5.88%
Zero Coupon 2000 (2/18/93) 10.95%
Quality Bond (2/18/93) 13.51%
Small Cap (2/18/93) 23.44%
Capital Appreciation (4/5/93) 27.42%
Stock Index (2/18/93) 30.52%
Socially Responsible (10/7/93) 28.27%
International Equity ( / / ) 1.22% x.xx
Growth & Income ( / / ) 54.18% x.xx
Money Market ( / / ) -1.27% x.xx
The nonstandard average annual total return (assuming no deduction for
any applicable Contingent Deferred Sales Load) for each Sub-Account is as
follows:
SUB-ACCOUNT For the 1-year For the period from
(date of commencement of period ending commencement of Sub-Account
operation of Sub-Account) 12/31/94 operations to 12/31/94
Managed Assets (2/18/93)
Zero Coupon 2000 (2/18//93)
Quality Bond (2/18/93)
Small Cap (2/18/93)
Capital Appreciation (4/5/93)
Stock Index (2/18/93)
Socially Responsible (10/7/93)
Nonstandard performance data will only be disclosed if the standard
performance data for the required periods is also disclosed.
<PAGE>
The cumulative total return for the Sub-Accounts, for the period from
the Sub-Account's commencement of operations to 12/31/94, on a standard basis
(assuming deduction for any applicable Contingent Deferred Sales Load) and on a
nonstandard basis (assuming no deduction for any applicable Contingent Deferred
Sales Load), is as follows:
SUB-ACCOUNT Standard Nonstandard
(date of commencement of
operation of Sub-Account)
Managed Assets (2/18/93)
Zero Coupon 2000 (2/18/93)
Quality Bond (2/18/93)
Small Cap (2/18/93)
Capital Appreciation (4/5/93)
Stock Index (2/18/93)
Socially Responsible (10/7/93)
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 present, past, or
future performance of the Sub-Accounts. Some of the figures reflect the waiver
of advisory fees and reimbursement of other expenses for part or all of the
periods indicated.
The hypothetical standard average annual total return (assuming
deduction for any applicable Contingent Deferred Sales Load) for each
Sub-Account is as follows:
SUB-ACCOUNT For the 5-year For the period from
(date of commencement of period ending commencement of Sub-Account
operation of Corresponding Portfolio) 12/31/94 operations to 12/31/94
Managed Assets (8/31/90) -5.88% 5.10
Zero Coupon 2000 (8/31/90) 10.95 9.63
Quality Bond (8/31/90) 13.51 8.82
Small Cap (8/31/90) 23.44 53.51
Capital Appreciation (4/5/93) 27.42 12.40
Growth and Income (12/15/94)a/ 54.18 52.05
--
International Equity (12/15/94)a/ 1.22 1.50
--
Stock Index (9/29/89) 30.52 1.67
Socially Responsible (10/7/93) 28.27 15.47
a/ No performance data is included for these Portfolios because they had been in
operation for only two weeks during 1994.
<PAGE>
The hypothetical nonstandard average annual total return (assuming no
deduction for any applicable Contingent Deferred Sales Load) for each
Sub-Account is as follows:
SUB-ACCOUNT For the 5-year For the period from
(date of commencement of period ending commencement of Sub-Account
operation of Corresponding Portfolio) 12/31/94 operations to 12/31/94
Managed Assets (8/31/90)
Zero Coupon 2000 (8/31/90)
Quality Bond (8/31/90)
Small Cap (8/31/90)
Capital Appreciation (4/5/93)
Growth and Income (12/15/94)
--
International Equity (12/15/94)
--
Stock Index (9/29/89)
Socially Responsible (10/7/93)
The hypothetical cumulative total return for the Sub-Accounts, for the
period from the Portfolio's commencement of operations to 12/31/94, on a
standard basis (assuming deduction for any applicable Contingent Deferred Sales
Load) and a nonstandard basis (assuming no deduction for any applicable
Contingent Deferred Sales Load), is as follows:
SUB-ACCOUNT Standard Nonstandard
(date of commencement of
operation of Portfolio)
Managed Assets (8/31/90)
Zero Coupon 2000 (8/31/90)
Quality Bond (8/31/90)
Small Cap (8/31/90)
Capital Appreciation (4/5/93)
Growth and Income (12/15/94)
--
International Equity (12/15/94)
Stock Index (9/29/89)
Socially Responsible (10/7/93)
Portfolio Performance Figures
Transamerica may also disclose performance data for the Portfolios of
the Variable Fund, and for the Stock Index Fund and the Socially Responsible
Fund. This performance data may include disclosure for periods prior to the
dates the Sub-Accounts commenced operations. It does not include separate
account charges which, if included, would reduce the performance figures.
<PAGE>
The charts below show the historical performance data for the
Portfolios since each Portfolio's commencement of operations.
The average annual total return for each Portfolio is as follows:
For the period
from commence-
ment of
PORTFOLIO For the 1-year For the 5-year Portfolio
(date of commencement of period ending period ending operations to
operation of Portfolio) 12/31/94 12/31/94 12/31/94
Managed Assets (8/31/90)
Zero Coupon 2000 (8/31/90)
Quality Bond (8/31/90)
Small Cap (8/31/90)
Capital Appreciation (4/5/93)
Growth and Income (12/15/94)
--
Stock Index (9/29/89)
Socially Responsible (10/7/93)
The cumulative total return for each Portfolio for the period from the
Portfolio's commencement of operations to 12/31/94 is as follows:
For the period from
PORTFOLIO For the 5-year commencement of
of commencement of period ending Portfolio operations to
operation of Portfolio) 12/31/94 12/31/94
Managed Assets (8/31/90)
Zero Coupon 2000 (8/31/90)
Quality Bond (8/31/90)
Small Cap (8/31/90)
Capital Appreciation (4/5/93)
Growth and Income (12/15/94)
--
International Equity (12/15/94)
--
Stock Index (9/29/89)
Socially Responsible (10/7/93)
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 Code of
1986, as amended (the "Code"). The ultimate effect of federal income taxes on
the Policy Value, on Annuity
<PAGE>
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
<PAGE>
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. Trans- america intends to
review such provisions and modify them if necessary to assure that they comply
with the requirements of Code section 72(s) when clarified by regulation or
otherwise. Other rules may apply to Qualified 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 Contracts is expected to be continuous and neither TSSC
nor TFR anticipate discontinuing the offering of the Contracts. However, TSSC
and TFR reserve the right to discontinue the offering of the Contracts.
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.
<PAGE>
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>
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.
C-1
<PAGE>
(8) (a) Participation Agreement between First Transamerica Life
Insurance Company and Dreyfus
Variable Investment Fund.(3)
(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.(5)
(10) (a) Consent of Counsel.(5)
(b) Consent of Independent Auditors .(5)
(11) No financial statements are omitted from item 23.
(12) Not applicable.
(13) Performance Data Calculations.(5)
(14) Powers of Attorney.
(a) Marc C. Abrahms(5)
(b) Barbara Biben(5)
(c) James T. Byrne, Jr.(5)
(d) Thomas J. Cusack
(e) James W. Dederer(2)
(f) John A. Fibiger(2)
(g) David E. Gooding(2)
(h) James Inzerillo(5)
(i) Daniel E. Jund
(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-
C-2
<PAGE>
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
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
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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
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
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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
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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
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
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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
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*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 , 199 6, there were Owners of Non-Qualified
Individual Policies and 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
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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
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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.
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The following table lists the amounts of commissions paid to the
principal underwriter during the last fiscal year.
Name of
Principal Net Underwriting Compensation on Brokerage
Underwriter* Discounts & Commission Redemption Commissions
DSC/TSSC -0- -0- $2,553,814.11
Compensation
-0-
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) 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, First
Transamerica Life Insurance Company certifies that this Post-Effective Amendment
No. 3 to the Registration Statement meets all of the requirements for
effectiveness pursuant to Rule 485(a) under the Securities Act of 1933 and has
duly caused this PostEffective Amendment No. 3 to the Registration Statement to
be signed on its behalf by the undersigned in the City of Los Angeles, State of
California on the 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
<TABLE>
<CAPTION>
As Required by the Securities Act of 1933, this Post-Effective Amendment No. 3 to the Registration
Statement has been signed by the following persons in the capacities and on the date indicated.
Signature Title Date
<S> <C> <C> <C> <C> <C> <C>
* President, Chief Executive Officer and April , 199 6
- -------------------------------------------
John A. Paganelli Director
* Vice President and Controller April , 199 6
- -------------------------------------------
Alexander Smith (Principal Financial Officer and
Principal Accounting Officer
* Director April , 199 6
- -------------------------------------------
Marc C. Abrahms
* Director April , 199 6
- -------------------------------------------
Barbara Biben
* Director April , 199 6
- -------------------------------------------
James T. Byrne, Jr.
__________________* Director April , 1996
Thomas J. Cusack
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* Director April , 199 6
- ------------------------------------------
John Fibiger
* Director April , 199 6
- ------------------------------------------
David E. Gooding
* Director April , 199 6
- ----------------------------------------
James Inzerillo
_________________* Director April , 1996
Daniel E. Jund
* Director April , 199 6
- ---------------------------------------
Cecilia Kempler
* Director April , 199 6
- ----------------------------------------
Charles E. LeDoyen
* Director April , 199 6
- -----------------------------------------
James B. Roszak
</TABLE>
On April , 1996 as Attorney -in-Fact pursuant to powers of
*By: James W. Dederer attorney previously filed and filed herewith, and
in his own capacity as Chairman of the Board,
General Counsel, Corporate Secretary and Director.
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As filed with the Securities and Exchange Commission on ____________, 1995
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. 4
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 5
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:
James W. Dederer, Esquire
Chairman, General Counsel and Corporate Secretary
First Transamerica Life Insurance Company
575 Fifth Avenue
New York, NY 10017
Copy to:
Frederick R. Bellamy, Esquire
Sutherland, Asbill & Brennan
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404
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, 1994 was filed on February 26,
1996.
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
on ________________ pursuant to paragraph (b)
x 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.
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