- 1 -
As filed with the Securities and Exchange Commission on February 25, 1999
<PAGE>
- 3 -
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. 8 |X|
-
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 9|X|
SEPARATE ACCOUNT VA-2LNY
(Exact Name of Registrant)
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
(formerly called, First Transamerica Life Insurance Company)
(Name of Depositor)
100 Manhattanville Road, Purchase, NY 10577
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (914) 701-6000
Name and Address of Agent for Service: Copy to:
James W. Dederer, Esquire Frederick R. Bellamy, Esquire
Chairman of the Board, General Counsel and Sutherland, Asbill & Brennan L.L.P.
Corporate Secretary 1275 Pennsylvania Avenue, N.W.
Transamerica Life Insurance Company of New York Washington, D.C. 20004-2404
100 Manhattanville Road
Purchase, NY 10577
Approximate date of proposed sale to the
public: As soon as practicable after effectiveness of
the Registration Statement.
Title of securities being registered:
Variable Annuity Contracts
It is proposed that this filing will become effective:
|_| immediately upon filing pursuant to paragraph (b)
|_| on pursuant to paragraph (b)
|_| 60 days after filing pursuant to paragraph (a)(i)
|X| on May 1, 1999 pursuant to paragraph (a)(i)
If appropropriate, check the following box:
|_|this Post-Effective Amendment designates a new effective
date for a previously filed Post-Effective Amendment.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495
Showing Location in Part A (Prospectus),
Part B (Statement of Additional Information) and Part C
of Registration Statement Information Required by Form N-4
PART A
<TABLE>
<CAPTION>
Item of Form N-4 Prospectus Caption
<S> <C>
1. Cover Page............................................... Cover Page
2. Definitions.............................................. Definitions
3. Synopsis................................................. Summary
4. Condensed Financial Information.......................... Not Applicable
5. General
(a) Depositor Transamerica Occidental Life
Insurance Company;
Additional Information about
Transamerica
Occidental Life Insurance Company;
(b) Registrant The Variable Account
(c) Portfolio Company The Funds
(d) Fund Prospectus The Funds
(e) Voting Rights Voting Rights
6. Deductions and Expenses..................................
(a) General Charges and Deductions
(b) Sales Load % Contingent Deferred Sales Load
(c) Special Purchase Plan Not Applicable
(d) Commissions Distribution of the Contracts
(e) Fund Expenses The Funds
(f) Operating Expenses Variable Account Fee Table
7. Contracts
(a) Persons with Rights The Contract; Cash
Withdrawals; Death Benefit;
Voting Rights
(b) (i) Allocation of Premium
Payments..................................... Allocation of Purchase Payments
(ii) Transfers.................................... Transfers
(iii) Exchanges.................................... Federal Tax Matters
(c) Changes Addition, Deletion, or
Substitution
(d) Inquiries Summary; Available Information
8. Annuity Period........................................... Annuity Payments
9. Death Benefit............................................ Death Benefit
10. Purchase and Contract Balances
(a) Purchases Contract Application and
Purchase Payments
(b) Valuation Participant Account Value
(c) Daily Calculation Variable Accumulated Value
(d) Underwriter Distribution of the Contracts
11. Redemptions
(a) By Contract Owners Withdrawals; Systematic
Withdrawal Option;
Automatic Payout Option
By Annuitant....................................... Not Applicable
(b) Texas ORP Not Applicable
(c) Check Delay Cash Withdrawals
(d) Lapse Not Applicable
(e) Free Look Definitions; Summary; Contract
Application and
................................................... Purchase Payments
12. Taxes.............................................. Federal Tax Matters
13. Legal Proceedings.................................. Legal Proceedings
14. Table of Contents for the
Statement of
Additional Information................................... Statement of Additional Information Table
of
Contents
PART B
Item of Form N-4 Statement of Additional
Information Caption
15. Cover Page......................................... Cover Page
16. Table of Contents.................................. Table of Contents
17. General Information
and History.............................................. (Prospectus) Transamerica Occidental Life
Insurance Company; (Prospectus)
Additional
Information About Transamerica
Occidental Life
Insurance Company
18. Services...........................................
(a) Fees and Expenses
of Registrant...................................... (Prospectus) Variable Account Fee Table;
(Prospectus) The Funds
(b) Management Contracts (Prospectus) Third Party
Administration
(c) Custodian Records and Reports;
Safekeeping of Account
Assets
Independent Auditors ............................. (Prospectus) Accountants
(d) Assets of Registrant Not Applicable
(e) Affiliated Person Not Applicable
(f) Principal Underwriter Not Applicable
19. Purchase of Securities
Being Offered............................................ (Prospectus) The Contract
Offering Sales Load...................................... (Prospectus) Contingent Deferred Sales
Load
20. Underwriters....................................... (Prospectus) Distribution of the Contracts
21. Calculation of Performance
Data..................................................... (Prospectus) Performance Data; Calculation of
Yields and Total Returns
22. Annuity Payments................................... (Prospectus) Annuity Payments; Annuity
Period
23. Financial Statements............................... Financial Statements
PART C -- OTHER INFORMATION
Item of Form N-4 Part C Caption
24. Financial Statements
and Exhibits............................................. Financial Statements and Exhibits
(a) Financial Statements Financial Statements
(b) Exhibits Exhibits
25. Directors and Officers of
the Depositor............................................ Directors and Officers of the Depositor
26. Persons Controlled By or Under Common Control
with the Depositor or Registrant Persons Controlled By or
Under Common Control
with the Depositor or Registrant
27. Number of Contract Owners.......................... Number of Contract Owners
28. Indemnification.................................... Indemnification
29. Principal Underwriters............................. Principal Underwriters
30. Location of Accounts
and Records.............................................. Location of Accounts and Records
31. Management Services................................ Management Services
32. Undertakings....................................... Undertakings
Signature Page........................................... Signature Page
</TABLE>
<PAGE>
2
PROFILE Of The
DREYFUS/TRANSAMERICA
TRIPLE ADVANTAGE(R)
VARIABLE ANNUITY
Issued By
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
May 1, 1999
ThisProfile is a summary of some of the more important points that you should
know and consider before purchasing a Policy. The Policy is more fully described
in the full Prospectus which accompanies this Profile. Please read the
Prospectus carefully.
<PAGE>
1. The Annuity Policy. The Dreyfus/Transamerica Triple Advantage ("Policy") is
an annuity policy or a contract between you and Transamerica Life Insurance
Company of New York. In the Policy you can invest in your choice of eighteen
Sub-Accounts corresponding to eighteen funds ("Portfolios") in the Variable
Account and the Fixed Account. You could gain or lose money you invest in the
Portfolios.
The Policy is a deferred annuity, which means it has two phases: the
accumulation phase and the annuity phase. During the accumulation phase you can
invest additional premiums in the Policy, transfer your money among the
Portfolios, and withdraw some or all of your investment. During this phase
earnings accumulate on a tax-deferred basis for individuals, but if you withdraw
money some or all of it may be taxable. Tax deferral is not available for
corporations and some trusts.
During the annuity phase Transamerica will make periodic payments to
you. The dollar amount of the payments may depend on the amount of money
invested and earned during the accumulation phase (and other factors, such as
age and sex).
2. The Annuity Payments. You can generally decide when to end the accumulation
phase and begin receiving annuity payments from Transamerica. You can choose
fixed annuity payments, where the dollar amount of each payment generally stays
the same, or variable payments that go up or down in dollar amount based on the
investment performance of the Portfolios you select. You can choose among
payments for the lifetime of an individual, or payments for the longer of one
lifetime or a guaranteed period of 10, 15, or 20 years, or payments for one
lifetime and the lifetime of another individual.
3. Purchasing a Policy. Generally, you must invest at least $5,000 to purchase a
Policy, and then you can make more investments of at least $500 each ($100 each
if made under the automatic payment plan and deducted from your bank account).
You may cancel your Policy during the Free Look Period explained in item 10 on
page 4 of this Profile.
The Triple Advantage is designed for long-term tax-deferred
accumulation of assets, generally for retirement or other long-term goals.
People in high tax brackets get the most benefit from the tax deferral feature.
You should not make an investment in the Policy for short-term purposes or if
you cannot take the risk of losing some of your investment.
4. Investment Options. You can invest your premiums in any of the Sub-Accounts
corresponding to the following eighteen Portfolios:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Money Market Capital Appreciation International Value Transamerica Growth
Special Value Stock Index Disciplined Stock Core Value
Zero Coupon 2000 Socially Responsible Growth Small Company Stock MidCap Stock
Quality Bond Growth and Income Balanced
Small Cap International Equity Limited Term High Income
</TABLE>
These Portfolios are described in their own prospectuses. You can earn
or lose money in any of these Portfolios.
Fixed Account: You can also invest in a Fixed Account option, where Transamerica
guarantees the principal invested plus at least 3% annual interest.
<PAGE>
5. Expenses. The Policy provides many benefits and features that you do not get
with a regular mutual fund. It costs Transamerica money to provide these
benefits, so there are charges in connection with the Policy. If you withdraw
your money within seven years of investing it, there may be a withdrawal charge
of up to 6% of the amount invested. Once each year we deduct a Policy Fee of no
more than $30 (there is no fee if your Policy Value is over $50,000). Insurance
and administrative charges of 1.40% per year are charged against the average
daily value of your Policy and a $10 fee for transfers over 18 in one year.
Advisory fees are also deducted by the Portfolios' manager and the Portfolios
pay other expenses which in total, vary from 0.28% to 1.42% per year of the
amounts in the Portfolios.
Although New York currently has no premium tax on annuities, depending
on where you live during the time you hold this Policy, there might be premium
taxes ranging from 0 to 3.5% of your investment and/or on amounts you use to
purchase annuity benefits.
The following chart shows these charges (except transfer fees and
premium taxes). The $30 annual Policy Fee is not included in the first column
because the fee is waived for Policy Values over $50,000 and the approximate
average Policy Value is over $50,000. The third column is the sum of the first
two. The examples in the last two columns show the total amounts you would be
charged, in dollars, if you invested $1,000, the investment grew 5% each year,
and you withdrew your entire investment after one year or ten years. Year One
includes the withdrawal charge and Year Ten does not.
<TABLE>
<CAPTION>
EXAMPLES:
Annual Annual Total Expenses Total Expenses
Portfolio/ Insurance Portfolio Total Annual at end of at end of
Sub-Account Charges Charges Charges One Year Ten Years
<S> <C> <C> <C> <C> <C>
Money Market 1.40% 0.61% 2.01% $74.40 $233.76
Special Value 1.40% 0.99% 2.39% $78.21 $272.63
Zero Coupon 2000 1.40% 0.61% 2.01% $74.40 $233.76
Quality Bond 1.40% 0.75% 2.15% $75.81 $248.27
Small Cap 1.40% 0.78% 2.18% $76.11 $251.35
Capital Appreciation 1.40% 0.80% 2.20% $76.31 $253.39
Stock Index 1.40% 0.28% 1.68% $71.08 $198.70
Socially Responsible 1.40% 0.82% 2.22% $76.51 $255.44
Growth and Income 1.40% 0.80% 2.20% $76.31 $253.39
International Equity 1.40% 1.06% 2.46% $78.91 $279.62
International Value 1.40% 1.42% 2.82% $82.51 $314.73
Disciplined Stock 1.40% 1.02% 2.42% $78.51 $275.63
Small Company 1.40% 1.12% 2.52% $79.51 $285.56
Balanced 1.40% 1.00% 2.40% $78.31 $273.63
Limited Term High Income 1.40% 0.89% 2.29% $77.21 $262.55
Transamerica Growth 1.40% 0.85% 2.25% $76.84 $261.67
CoreValue 1.40% 1.00% 2.40% $78.36 $279.12
MidCap Stock 1.40% 1.00% 2.40% $78.36 $279.12
</TABLE>
The Annual Portfolio Charges above are for 1997 and do not reflect expense
reimbursement or fee waivers except for the Limited Term High Income and
Transamerica Growth Portfolios. The Core Value and MidCap Stock Portfolios did
not commence operations in 1997; the numbers for these Portfolios are annualized
estimates including reimbursements or waivers for 1998. Expenses may be higher
or lower in the future. See the Variable Account Fee Table on page 9 of the
Triple Advantage prospectus for more detailed information.
6. Federal Income Taxes. Individuals generally are not taxed on increases in the
policy value until a distribution occurs (e.g., a withdrawal or annuity payment)
or is deemed to occur (e.g., a pledge, loan, or assignment of the Policy). If
you withdraw money, earnings come out first and are taxed. Generally, some
portion (sometimes all) of any distribution or deemed distribution is taxable as
ordinary income. In some cases, income taxes will be withheld from
distributions. If you are under age 59 1/2 when you withdraw money, an
additional 10% federal tax penalty may apply to the withdrawn earnings. Certain
owners that are not individuals may be currently taxed on increases in the
Policy, whether distributed or not.
7. Access to Your Money. You can generally take money out at any time during the
accumulation phase. A withdrawal charge of up to 6% of a premium may be assessed
by Transamerica, but no withdrawal charge will be assessed on money that has
been in the Policy for seven years. In addition, after the first Policy Year,
for only the first withdrawal in a Policy Year, you may withdraw the greater of
accumulated earnings or 10% of Premiums received at least one but less than
seven years ago. Additionally, at any time you can withdraw accumulated earnings
on your premiums not previously withdrawn without a withdrawal charge. (See page
24 of the prospectus for a more detailed discussion.) You may have to pay taxes
on amounts you withdraw and there may also be a 10% tax penalty if you make
withdrawals before you are 59 1/2 years old.
8. Past Investment Performance. The value of the money you allocate to the
Sub-Accounts will go up or down, depending on the investment performance of the
Portfolios you pick. The following chart shows the past investment performance
on a year by year basis for each Sub-Account. These figures have already been
reduced by the insurance charges, the policy fee, the fund manager's fee and all
the expenses of the mutual fund Portfolio, but these figures do not include the
withdrawal charge, which would reduce performance if it applied. Remember, past
performance is no guarantee of future performance or earnings.
<PAGE>
<TABLE>
<CAPTION>
CALENDAR YEAR
PORTFOLIO/
SUB-ACCOUNT 1997 1996 1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market(1) 3.66% 3.53% 4.21% 3.00% 1.86% 2.71% 4.54% N/A
Special Value(1) 21.36% (5.67%) (0.48%) (3.48%) 26.74% (0.41%) 8.99% N/A
Zero Coupon 2000(1) 5.45% 1.10% 16.35% (5.41%) 13.52% 7.29% 17.14% 6.28%
Quality Bond(1) 7.83% 1.63% 18.91% (6.17%) 13.66% 10.45% 12.47% N/A
Small Cap(1) 15.06% 15.06% 28.84% 4.95% 65.77% 68.98% 156.07% N/A
Capital Appreciation(2) 26.21% 22.71% 32.82% 1.45% N/A N/A N/A N/A
Stock Index(3) 31.05% 19.80% 35.92% (0.60%) 7.75% 5.55% 27.98% (6.52%)
Socially Responsible(4) 26.59% 19.00% 33.67% (0.08%) N/A N/A N/A N/A
Growth and Income(5) 14.53% 18.63% 59.58% N/A N/A N/A N/A N/A
International Equity(5) 8.02% 9.82% 6.62% N/A N/A N/A N/A N/A
International Value(6) 7.13% N/A N/A N/A N/A N/A N/A N/A
Disciplined Stock(6) 29.62% N/A N/A N/A N/A N/A N/A N/A
Small Company Stock(6) 20.01% N/A N/A N/A N/A N/A N/A N/A
Transamerica Growth(7) 50.34% 26.63% 53.02% 7.71% 27.73% 13.58% 41.47% (12.58%)
(1) Portfolio Inception 8-31-90 (3) Portfolio Inception 9-29-89 (5) Portfolio Inception
12-15-94 (7) Portfolio Inception 2-26-69
(2) Portfolio Inception 4-5-93 (4) Portfolio Inception 10-7-93 (6) Portfolio Inception
5-1-96
</TABLE>
Data is for full years only. Therefore, no performance is reported for the
Balanced and Limited Term High Income Sub-Accounts because these Sub-Accounts
had not been in operation for a full year in1997. Additionally, the Core Value
and MidCap Stock Sub-Accounts did not commence operations in 1997 and,
therefore, no performance is reported for these Sub-Accounts. The figures for
the Money Market, Special Value, Zero Coupon 200, Quality Bond, Small Cap, Stock
Index and Transamerica Growth Sub-Accounts include data for periods before the
Sub-Accounts commenced operations, based on the actual performance of the
corresponding Portfolios since they commenced operation.
9. Death Benefit. If you or the Annuitant die during the accumulation phase, the
beneficiary will receive a Death Benefit.
If death occurs before age 85, the death benefit will be the greatest
of: (1), the Policy Value; (2) the Premiums you've paid, less any amounts you
have withdrawn (less any premium taxes applicable to those withdrawal's); or (3)
the highest Policy Value on any anniversary of your purchase of the Policy up to
the Owner's or Annuitant's age 75 (adjusted for additional investments and
withdrawals since that anniversary, and less premium taxes). After age 85, the
death benefit is the Policy Value.
10. Other Information. The Policy offers other features you might be interested
in. These features may not be suitable for your particular situation. Some of
these features include:
FREE LOOK. After you get your Policy, you have ten days to look it over
and decide if it is really right for you. If you decide not to keep the Policy,
you can cancel it during this period, and you will get back all the amounts you
allocated to the Fixed Account plus the current value of the amounts allocated
to the Variable Accounts (this may be more or less than your investment) and no
withdrawal charge will be deducted.
DOLLAR COST AVERAGING. You can instruct Transamerica to automatically
transfer amounts from the Premiums you allocated to the Money Market, Quality
Bond or Limited Term High Income Sub-Accounts or the Fixed Account to any of the
other Sub-Accounts each month. Dollar Cost Averaging is intended to give you a
lower average cost per share or unit than a single, one time investment, but
does not assure a profit or protect against loss and is intended to continue for
some time period.
AUTOMATIC ASSET REBALANCING. The performance of each Sub-Account may
cause the allocation of value among the Sub-Accounts to change. You may instruct
Transamerica to periodically automatically rebalance the amounts in the
Sub-Accounts by reallocating amounts among them.
SYSTEMATIC WITHDRAWAL OPTION. You can arrange to have Transamerica send
you money automatically each month out of your Policy Value during the
accumulation phase. There are limits on the amounts, but the withdrawal charge
will not apply (the payments may be taxable and subject to the penalty tax if
you are under age 59 1/2 ).
AUTOMATIC PAYOUT OPTION. Certain pension and retirement plans require
that certain amounts be distributed from the plan at certain ages. You can
arrange to have such amounts distributed automatically during the accumulation
phase.
11. INQUIRIES. You can get more information and have your questions answered by
writing or calling:
Transamerica Annuity Service Center
P.O. Box 31728
Charlotte, North Carolina 28231-1728
800-258-4261
<PAGE>
PROSPECTUS FOR THE
Dreyfus/Transamerica Triple Advantage(r) Variable Annuity
A Flexible Premium Deferred Variable Annuity
Issued By
Transamerica Life Insurance Company of New York
Offering 18 Sub-Accounts within the Variable Account
Designated as Separate Account VA-2LNY
In Addition to:
A Fixed Account
* This prospectus contains
information you should
Variable Account Options
Money Market know before investing.
Special Value
Zero Coupon 2000
Quality Bond
* Please keep this prospectus
Small Cap for future reference.
Capital Appreciation
Stock Index
* You can obtain more information about the contract by requesting a copy of the
Statement of Additional Information or SAI dated May 1, 1999. The SAI is Growth
and Income International Equity International Value Disciplined Stock available
free by writing to Transamerica Life Insurance Company of New York, Annuity
Service Center, P.O. Box 31728, Charlotte, NC 28231-1728 or by calling
800-258-4261. Small Company Stock Balanced Limited Term High Income Portfolios
of Dreyfus Variable Investment Fund Dreyfus Stock Index Fund The Dreyfus
Socially Responsible Growth Fund, Inc. Core Value and MidCap Stock Portfolios of
Dreyfus Investment Portfolios Growth Portfolio of Transamerica Variable
Insurance Fund, Inc.
The current SAI has been filed with the Securities and Exchange Commission and
is incorporated by reference into this prospectus. The table of contents of the
SAI is included on page _____ of this prospectus.
* The SEC's web site is
http://www.sec.gov
* Transamerica's web site is
http://www.transamerica.com
Neither the SEC nor any state securities commission has approved this investment
offering or determined that this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
May 1, 1999
TABLE OF CONTENTS Page
SUMMARY 6
PERFORMANCE DATA 15
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
AND THE VARIABLE ACCOUNT 16
Transamerica Life Insurance Company of New York 16
Published Ratings 16
The Variable Account 16
THE FUNDS 17
Addition, Deletion or Substitution 20
THE FIXED ACCOUNT 20
THE POLICY 21
POLICY APPLICATION AND PREMIUMS 21
Premiums 21
Allocation of Premiums 22
Investment Option Limit 22
POLICY VALUE 22
TRANSFERS 23
Before the Annuity Date 23
Possible Restrictions 23
Dollar Cost Averaging 23
Automatic Asset Rebalancing 24
After the Annuity Date 24
CASH WITHDRAWALS 24
Withdrawals 24
Systematic Withdrawal Option 25
Automatic Payout Option 26
DEATH BENEFIT 26
Payment of Death Benefit 26
Designation of Beneficiaries 26
Death of Annuitant Prior to the Annuity Date 27
Death of Owner Prior to the Annuity Date 27
Death of Annuitant or Owner After the Annuity Date 27
CHARGES AND DEDUCTIONS 27
Contingent Deferred Sales Load 27
Administrative Charges 28
Mortality and Expense Risk Charge 28
Premium Taxes 29
Transfer Fee 29
Systematic Withdrawal Option 29
Taxes 29
Portfolio Expenses 29
Sales in Special Situations 29
ANNUITY PAYMENTS 30
Annuity Date 30
Annuity Payment 30
Election of Annuity Forms and Payment Options 30
Annuity Payment Options 30
Fixed Annuity Payment Option 31
Variable Annuity Payment Option 31
Annuity Forms 31
Alternate Fixed Annuity Rates 32
QUALIFIED POLICIES 32
Automatic Payout Option 32
Restrictions under 403(b) Programs 33
FEDERAL TAX MATTERS 33
Introduction 33
Premiums 33
Taxation of Annuities 34
Qualified Policies 36
Possible Change in Taxation 37
Other Tax Consequences 37
DISTRIBUTION OF THE POLICY 38
PREPARING FOR THE YEAR 2000 38
LEGAL PROCEEDINGS 38
LEGAL MATTERS 38
ACCOUNTANTS 38
VOTING RIGHTS 39
AVAILABLE INFORMATION 39
APPENDIX A 41
Statement of Additional Information - Table of Contents 41
APPENDIX B 41
Example of Variable Accumulation Unit Value Calculations 41
Example of Variable Annuity Unit Value Calculations 41
Example of Variable Annuity Payment Calculations 41
APPENDIX C 41
Definitions 41
APPENDIX D 41
Condensed Financial Information 41
SUMMARY
You will find a list of definitions of the terms used in this prospectus in
Appendix C on page 44.
The Policy
We designed the flexible premium deferred variable annuity, the policy,
described in this prospectus to aid individuals in long-term financial planning
for retirement or other purposes. You may use the policy:
* with non-qualified plans;
* as an individual retirement annuity that qualifies for special tax treatment
under Code Section 408 and whose initial premium is a rollover or transfer from
a qualified retirement plan receiving special tax treatment under Code Sections
401(a), 403(b) and 408, a rollover IRA; or
* with Transamerica's prior approval, as an individual retirement annuity that
qualifies for special tax treatment under Code Section 408A and whose initial
premium is a rollover, transfer or conversion from other individual retirement
plans issued under Sections 408 or 408A of the Code, a rollover Roth IRA.
Additionally, with Transamerica's prior permission, you may use the policy:
* as an IRA or Roth IRA whose initial premium is limited to the contribution
limitations of the Code with respect to contributory IRAs or contributory Roth
IRAs under Sections 408 or 408A of the Code;
* as an annuity under Section 403(b) of the Code; and
* with various types of qualified pension and profit-sharing plans under Section
401(a) of the Code.
The Issuer
The policy is issued by Transamerica Life Insurance Company of New York,
Transamerica, a wholly-owned subsidiary of Transamerica Occidental Life
Insurance Company. Our principal office is at 100 Manhattanville Road, Purchase,
New York, 10577, telephone (914) 701-6000. The policy is only available in New
York.
This prospectus does not offer the sub-accounts or the fixed account in any
jurisdiction where they are not allowed to be sold. We do not authorize any
dealer, salesman or other person to give information or make representations not
contained in this prospectus. You should not rely on any information or
representation that is not in this prospectus.
Policy Value
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 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 you, as the owner, bear 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.
Initial Premium
The initial premium for each policy must generally be at least $5,000. We will
waive this minimum if the policy is sold as a qualified policy to certain
retirement plans. Generally, each additional premium must be at least $500. We
will waive this minimum if you select an automatic payment plan. In no event,
however, may the total of all premiums under a policy exceed $1,000,000 without
our prior approval. The minimum net premium that may be allocated to an
sub-account with no current allocations is $500. See Policy Application and
Premiums on page 21.
The Variable Account
The variable account is a separate account, designated as Separate Account
VA-2LNY, divided into sub-accounts. 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 or portfolio of the
following funds:
* Dreyfus Variable Investment Fund;
* Dreyfus Investment Portfolios;
* Growth Portfolio of Transamerica Variable Insurance Fund, Inc.;
* Dreyfus Stock Index Fund; or
* The Dreyfus Socially Responsible Growth Fund, Inc.
The Sub-Accounts
The following eighteen sub-accounts are currently available for investment in
the variable account.
* Money Market
* Special Value
* Zero Coupon 2000
* Quality Bond
* Small Cap
* Capital Appreciation
* Stock Index
* Socially Responsible Growth * Growth and Income * International Equity *
International Value * Disciplined Stock * Small Company Stock * Balanced *
Limited Term High Income * Transamerica Growth * Core Value * MidCap Stock
The funds pay their investment adviser and administrators certain fees
charged against the assets of each portfolio. The policy value, if any, and the
amount of any variable annuity payments will vary to reflect the investment
performance of all of the sub-accounts you select and the deduction of the
charges. See Charges and Deductions on page 27. For more information about the
funds see The Funds on page 17 and the accompanying fund's prospectuses.
The Fixed Account
We will credit interest to the amounts in the fixed account at a rate of not
less than 3% annually. We may credit interest at a rate in excess of 3% at our
discretion for any class. We guarantee to credit each interest rate for at least
12 months.
Investment Option Limit
Currently, you may not elect more than a total of eighteen investment options
over the life of the policy. Investment options include sub-accounts of the
variable account and the fixed account.
Transfers Before the Annuity Date
Prior to the annuity date, you may make transfers between and among the
sub-accounts. A "transfer" is the reallocation of amounts among the sub-accounts
of the variable account.
We charge a fee of $10 for each transfer in excess of 18 per policy year. We
exclude transfers under certain programs, which will not count towards the 18
free transfers per policy year.
Withdrawals
You may withdraw all or part of the cash surrender value on or before the
annuity date. However, amounts you withdraw may be subject to a contingent
deferred sales load. Amounts you withdraw may be subject to a premium tax or
similar tax, depending upon the state in which the you live. Withdrawals may
further be subject to any federal, state or local income tax, and a penalty tax.
Withdrawals from qualified policies may be subject to severe restrictions.
Except for rollover IRA's, qualified policies are sold only with Transamerica's
prior permission. We will generally deduct the annual policy fee on a full
surrender of a policy. See Cash Withdrawals on page 24.
The Contingent Deferred Sales Load
Transamerica does not deduct a sales charge from premiums, although we may
deduct premium taxes.
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.
Transamerica guarantees that the total contingent deferred sales load will never
exceed 6% of the premiums.
After we have held a premium for seven policy years, you, as the owner, may
withdraw the remaining premium without a contingent deferred sales load. You may
make withdrawals up to the allowed amount described below without incurring a
contingent deferred sales load each policy year before the annuity date.
The allowed amount is equal to:
* during the first policy year, the accumulated earnings not previously
withdrawn;
* after you have held your policy for at least one full policy year, for the
first withdrawal, and only the first withdrawal in a policy year, the sum of
1 100% of premiums not previously withdrawn and received at least seven policy
years before the date of withdrawal; plus,
2 the greater of
a) the accumulated earnings not previously withdrawn; or,
b) 10% of premiums received at least one but less than seven complete policy
years before the date of withdrawal not reduced to take into account any
withdrawals deemed to be made from such premiums.
* after the first policy year, after the first withdrawal in a policy year, the
sum of
1 100% of premiums not previously withdrawn and received at least seven complete
policy years before the date of withdrawal; plus,
2 accumulated earnings not previously withdrawn.
Withdrawals will always be made first from accumulated earnings, and then from
premiums on a first-in, first-out basis. So, accumulated earnings could be
withdrawn as part of the first withdrawal in a policy year and, therefore, not
be available for withdrawals made later that policy year. The accumulated
earnings, if any, in your policy value are always available as the allowed
amount. You cannot withdraw any premium deposited by check until that check
clears. See Contingent Deferred Sales Load on page 27 and Cash Withdrawals on
page 24.
Other Charges and Deductions
We deduct a daily charge referred to as the Mortality and Expense Risk Charge.
This charge is 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 your policy. See Mortality and Expense Risk
Charge on page 28. We guarantee that this mortality and expense risk charge will
not be increased.
Transamerica also deducts a daily charge referred to as 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 on page 28.
There is also an administrative charge each year for policy maintenance referred
to as the Policy Fee. This fee is currently $30, or 2% of the policy value, if
less. It 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. We will deduct the policy fee at the end of the policy year or
when you surrender the policy, if earlier. We may change the policy fee for any
policy year. But we guarantee it will not exceed the lesser of $60 or 2% of the
policy value.
After the annuity date this fee is referred to as the annuity fee. The annuity
fee is $30 and will not change.
A $10 charge is imposed for each transfer in excess of eighteen during a policy
year. See Transfer Fee on page 29.
Also, New York currently has no premium tax nor retaliatory premium tax. If New
York imposes these taxes in the future, or if you are or becomes a resident of a
state other than New York where such taxes apply, the charges could be deducted
from premiums and/or from the annuity purchase amount upon annuitization. See
Premium Taxes on page 28.
Variable Account Fee Table
The purpose of this table is to help you understand the various costs and
expenses that the owner will bear directly and indirectly. The table reflects
expenses of the variable account as well as of the portfolios. The table assumes
that the entire policy value is in the variable account. The information set
forth should be considered together with the narrative provided under the
heading Charges and Deductions on page 27 of this prospectus, and with the
funds' prospectuses. In addition to the expenses listed below, premium taxes may
be applicable.
Policy Transaction Expenses(1)
Sales Charge Imposed on Premiums 0
Maximum Contingent deferred sales load(2) 6%
Range of Contingent Deferred Sales Load Over Time
Policy Years Since
Premiums Receipt
Contingent Deferred
Sales Load
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%
Other Policy Expenses
Transfer Fee (first 18 per Policy Year)3 0
Systematic Withdrawal Fee 0
Policy Fee4 $30
Variable Account Annual Expenses1
Mortality and Expense Risk Charges 1.25%
Adminitrative Expense Charge5 0.15%
Other Fees and Expenses of the Variable Account 0.00%
Total Variable Account Annual Expenses 1.40%
Portfolio Annual Expenses
(as a percentage of assets after fee waiver and/or expense reimbursement)(6)
Portfolios
Management
Fee
Other
Expenses
Total Portfolio
Annual Expense
Money Market
0.50%
0.11%
0.61%
Special Value
0.75%
0.24%
0.99%
Zero Coupon 2000
0.45%
0.16%
0.61%
Quality Bond
0.65%
0.10%
0.75%
Small Cap
0.75%
0.03%
0.78%
Capital Appreciation
0.75%
0.05%
0.80%
Stock Index Fund
0.25%
0.03%
0.28%
Socially Responsible Growth Fund
0.75%
0.07%
0.82%
Growth and Income
0.75%
0.05%
0.80%
International Equity
0.75%
0.31%
1.06%
International Value
1.00%
0.42%
1.42%
Disciplined Stock
0.75%
0.27%
1.02%
Small Company Stock
0.75%
0.37%
1.12%
Balanced
0.75%
0.25%
1.00%
Limited Term High Income
0.65%
0.24%
0.89%
Transamerica Growth
0.75%
0.10%
0.85%
Core Value
0.75%
0.25%
1.00%
MidCap Stock
0.75%
0.25%
1.00%
Expense information regarding the portfolios has been provided by the funds.
Transamerica has no reason to doubt the accuracy of the information, but 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. These
figures are for the year ended December 31, 1998. Actual expenses in future
years may be higher or lower than the figures above.
Notes to Fee Table:
1. The policy transaction expenses apply to each policy, regardless of how
policy value is allocated between the variable account and the fixed account.
The variable account annual expenses do not apply to the fixed account.
2. You may withdraw a portion of the premiums each year after the first policy
year without any contingent deferred sales load, or CDSL. After we have held a
premium for seven policy years, you may withdraw the remaining premium payments
without any contingent deferred sales load. You may always withdraw accumulated
earnings without a CDSL.
3. We will charge a transfer fee of $10 for each transfer in excess of 18 in a
policy year. We may also charge a fee of up to $25 per year if you elect the
systematic withdrawal option.
4. The current annual policy fee per policy year is the lesser of $30 or 2% of
the policy value. We may change the fee annually, but it will not exceed the
lesser of $60, or 2% of the policy value. The current annual administrative
expense charge is 0.15%. We may increase it to 0.25%.
5. From time to time, each portfolio's investment adviser, in its sole
discretion, may waive all or part of its fees and/or voluntarily assume certain
portfolio expenses. The expenses shown in the above portfolio annual expenses
table reflect the portfolio's adviser's waiver of fees or reimbursement of
expenses, if applicable, for calendar year 1998. We anticipate that such waivers
and reimbursements will continue for calendar year 1999. Without such waivers or
reimbursements, the management fee, other expenses and total portfolio annual
expenses for 1998 would have been, as a percentage of assets, _____%, ____% and
_____% for Transamerica Growth Portfolio and _____%, ______%, and _____% for
Limited Term High Income Portfolio, respectively.
Examples*
* The following three examples reflect no policy fee deduction because the
approximate average policy value is more than $50,000. The policy fee is waived
for policy values over $50,000.
* These examples all assume that no transfer fees, systematic withdrawal fee or
premium tax have been assessed. Premium taxes may be applicable. See Premium
Taxes on page 29.
* These examples show expenses without reflecting fee waivers and reimbursements
for 1998. Except for the Limited Term High Income and Transamerica Growth
Portfolios, it is not anticipated that there will be any fee waivers or expense
reimbursements in the future.
Example 1
If you surrender the policy at the end of the applicable time period, you would
pay the following expenses on a $1,000 initial premium assuming a 5% annual
return on assets:
Variable Sub-Accounts
1 Year
3 Years
5 Years
10 Years
Money Market
$74.40
$108.05
$141.94
$233.76
Special Value
$78.21
$119.55
$162.05
$272.63
Zero Coupon 2000
$74.40
$108.05
$141.94
$233.76
Quality Bond
$75.81
$112.30
$149.39
$248.27
Small Capital
$76.11
$113.21
$150.98
$251.35
Capital Appreciation
$76.31
$113.82
$152.04
$253.39
Stock Index
$71.08
$97.81
$124.16
$198.70
Socially Responsible Growth
$76.51
$114.42
$153.10
$255.44
Growth Income
$76.31
$113.82
$152.04
$253.39
International Equity
$78.91
$121.65
$165.71
$279.62
International Value
$82.51
$132.40
$184.33
$314.73
Disciplined Stock
$78.51
$120.45
$163.62
$275.63
Small Company Stock
$79.51
$123.45
$168.84
$285.56
Balanced Fund
$78.31
$119.85
$162.57
$273.63
Limited Term High Income
$77.21
$116.53
$156.79
$262.55
Transamerica Growth Fund
$76.84
$115.58
$154.87
$261.67
Core Value
$78.36
$120.28
$162.95
$279.12
MidCap Stock
$78.36
$120.28
$162.95
$279.12
Example 2
If you do not surrender and you do not annuitize the policy, you would pay the
following expenses on a $1,000 initial premium assuming a 5% annual return on
assets:
Variable Sub-Accounts
1 Year
3 Years
5 Years
10 Years
Money Market
$20.40
$63.05
$108.29
$233.76
Special Value
$24.21
$74.55
$127.55
$272.63
Zero Coupon 2000
$20.40
$63.05
$108.29
$233.76
Quality Bond
$21.81
$67.30
$115.43
$248.27
Small Capital
$22.11
$68.21
$116.95
$251.35
Capital Appreciation
$22.31
$68.82
$117.96
$253.39
Stock Index
$17.08
$52.96
$91.26
$198.70
Socially Responsible Growth
$22.51
$69.42
$118.98
$255.44
Growth Income
$22.31
$68.82
$117.96
$253.39
International Equity
$24.91
$76.65
$131.05
$279.62
International Value
$28.51
$87.40
$148.89
$314.73
Disciplined Stock
$24.51
$75.45
$129.05
$275.63
Small Company Stock
$25.51
$78.45
$134.05
$285.56
Balanced Fund
$24.31
$74.85
$128.05
$273.63
Limited Term High Income
$23.21
$71.53
$122.51
$262.55
Transamerica Growth Fund
$22.84
$70.58
$121.22
$261.67
Core Value
$24.36
$75.28
$129.30
$279.12
MidCap Stock
$24.36
$75.28
$129.30
$279.12
Example 3
If you elect to annuitize at the end of the applicable period under an annuity
form with life contingencies,** you would pay the following expenses on a $1,000
initial premium assuming a 5% annual return on assets:
Variable Sub-Accounts
1 Year
3 Years
5 Years
10 Years
Money Market
$74.40
$63.05
$108.29
$233.76
Special Value
$78.21
$74.55
$127.55
$272.63
Zero Coupon 2000
$74.40
$63.05
$108.29
$233.76
Quality Bond
$75.81
$67.30
$115.43
$248.27
Small Capital
$76.11
$68.21
$116.95
$251.35
Capital Appreciation
$76.31
$68.82
$117.96
$253.39
Stock Index
$71.08
$52.96
$91.26
$198.70
Socially Responsible. Growth
$76.51
$69.42
$118.98
$255.44
Growth Income
$76.31
$68.82
$117.96
$253.39
International Equity
$78.91
$76.65
$131.05
$279.62
International Value
$82.51
$87.40
$148.89
$314.73
Disciplined Stock
$78.51
$75.45
$129.05
$275.63
Small Company Stock
$79.51
$78.45
$134.05
$285.56
Balanced Fund
$78.31
$74.85
$128.05
$273.63
Limited Term High Income
$77.21
$71.53
$122.51
$262.55
Transamerica Growth Fund
$76.84
$70.58
$121.22
$261.67
Core Value
$78.36
$75.28
$129.30
$279.12
MidCap Stock
$78.36
$75.28
$129.30
$279.12
*In preparing the examples above, we have relied on the data provided by the
funds. Transamerica has no reason to doubt the accuracy of that information.
However, we have not verified those figures.
**For annuitization under a form that does not include life contingencies, a
contingent deferred sales load may apply.
You should not consider these examples to represent past or future expenses.
Actual expenses paid may be greater or less than those shown, subject to the
guarantees in the policy. The assumed 5% annual return is only hypothetical. It
is not a representation of past or future returns. Actual returns could be
greater or less than this assumed rate.
Annuity Payments
We will make annuity payments either on a fixed basis or a variable basis, or a
combination of a fixed and variable basis, as you select. You have flexibility
in choosing the annuity date. In no event may the annuity date be later than the
first day of the month immediately preceding the month of your 85th birthday.
The annuity date cannot be earlier than the first day of the month coinciding
with or immediately following the third policy anniversary. We will begin
annuity payments on the first day of the calendar month following the annuity
date.
You have a choice of four annuity forms:
1. Life Annuity;
2. Life and Contingent Annuity;
3. Life Annuity with Period Certain; and
4. Joint and Survivor Annuity.
Payments on Death Before the Annuity Date
We pay a death benefit 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 is the greatest of:
(a) the policy value;
(b) all premiums paid to the policy less withdrawals and any premium taxes
applicable to those withdrawals; 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 premium taxes applicable to those
withdrawals.
If the deceased owner or annuitant, as applicable, had attained age 85, the
death benefit will be the policy value. We will generally pay the death benefit
within seven days of receipt of the required proof of death of the owner or the
annuitant. We must have sufficient information about the beneficiary to make the
payment. We must receive the beneficiary's election of the method of settlement.
If we receive no election of the settlement method, we will pay the death
benefit no later than one year from the date of death. We do not charge a
contingent deferred sales load. The beneficiary may elect to receive the death
benefit as either a lump sum or as an annuity.
Federal Income Tax Consequences
An owner who is a natural person, meaning an individual, rather than a
corporation or trust, generally should not be taxed on increases in the policy
value until a distribution under the policy occurs. A withdrawal or annuity
payment, for example, would qualify as a distribution, thereby triggering a
taxable event. A deemed distribution would also trigger a taxable event. Deemed
distributions occur when owners pledge, loan, or assign a policy as collateral.
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.
Mandatory withholding may apply for certain qualified policies. In addition, a
federal penalty tax may apply to certain distributions or deemed distributions.
Right to Cancel
You, as owner, have the right to examine the policy for a limited period. This
is known as a Free Look Period. You can cancel the policy by delivering or
mailing a written notice or by sending a telegram to:
* the agent from whom you purchased the policy; or
* the service center.
You must do this before midnight of the tenth day, or longer if required by New
York Department of Insurance, after receipt of the policy.
If you give us notice and the return of the policy by mail, properly addressed
and postage prepaid, we will be deem it to have been made on the date
postmarked. We will refund the amounts allocated to the fixed account and the
variable accumulated value determined as of the date the notice is postmarked
within seven days after we receive such notice to cancel and the returned
policy. See Application of Purchase Payments on page 28. You may request more
information by writing:
Transamerica Annuity Service Center
P.O. Box 31728
Charlotte, North Carolina
28231-1728
or
Call 1-800-258-4261
with any questions concerning your policy.
You should be able to provide the policy number and the owner's and annuitant's
names when requesting information regarding a specific policy.
NOTE: The foregoing summary is qualified in its entirety by the detailed
information in the remainder of this prospectus and in the prospectuses for the
funds. They should be referred to for more detailed information.
With respect to qualified policies, limits or restrictions may be imposed on
premiums, withdrawals, distributions, benefits or other policy provisions due
to:
* 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.
This prospectus does not describe such limitations or restrictions.
CONDENSED FINANCIAL INFORMATION
You will find condensed financial information on each sub-account in Appendix D
on page 45. You will find the full financial statements and reports of
independent auditors for the variable account in the Statement of Additional
Information.
PERFORMANCE DATA
Advertising of Yields
From time to time, we may advertise yields and average annual total returns for
the sub-accounts of the variable account. In addition, we 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.
Yield Calculations
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:
* the income generated for that seven-day period is generated each seven-day
period over a 52-week period; and
* it 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
com-pounding effect of this assumed reinvestment.
The yield of a sub-account, other than that of 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 apply to a particular policy. When the
contingent deferred sales load is applies to a particular policy, the yield of
that policy will be reduced. For additional information about how yields and
total returns are calculated, please refer to the Statement of Additional
Information.
Total Returns
Average annual total returns for each sub-account are based on performance data
compiled since the sub-account commenced operations. Performance results are
also measured over 1, 5 and 10 year time periods. When average annual total
returns for these periods are available, you will be provided with this
information. Each return 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. This will include the deduction of any applicable contingent
deferred sales load, but exclude the deduction of any premium taxes. These
returns will represent the periods for which total return quotations are
provided up to the last day of the period.
Performance information
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. It should
be considered in light of: * the investment objectives; * investment policies; *
characteristics of the portfolios in which the sub-account invests; and * the
market conditions during the given time period.
You should not consider it 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:
* Lpper Analytical Services, Inc.,
* VARDS,
* IBC/Donoghue's Money Fund Report,
* Financial Planning Magazine,
* Money Magazine,
* Bank Rate Monitor,
* Standard and Poor's Indices, and
* The Dow Jones Industrial Average.
It may also include other rating services, companies, publications, or other
persons who rank separate accounts or other investment products on overall
performance or other criteria; and
2. the effect of tax deferred compounding on sub-account investment returns, or
returns in general, which may be illustrated by graphs, charts, or otherwise.
These may include a comparison, at various points in time, of the return from an
investment, or returns in general, on a tax-deferred basis, assuming one or more
tax rates, with the return on a currently taxable basis. We may also use other
ranking services and indices.
In our advertisements and sales literature, we may use charts and graphs to
discuss and illustrate:
* the implications of longer life expectancy for retirement planning; * the tax
and other consequences of long-term investments; * the effects of the lifetime
payout option; * the operation of certain special investment features in the
policy - such as the dollar cost averaging option; * the effects of certain
investment strategies; and * the Social Security system and its projected payout
levels and retirement plans generally.
We may, from time to time, disclose average annual total returns and cumulative
total returns for the sub-accounts in non-standard formats. We will assume that
no contingent deferred sales load is applicable to these returns. Whenever we
show non-standard performance, we will also show standardized performance. You
will find additional information about the calculation of performance data in
the statement of additional information.
We may also advertise performance figures for the sub-accounts based on their
performance prior to the time the variable account started.
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
AND THE VARIABLE ACCOUNT
Transamerica Life Insurance Company of New York
Transamerica Life Insurance Company of New York, hereafter referred to as
Transamerica, is a stock life insurance company incorporated under the laws of
the State of New York on February 5, 1986. It is mainly 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 Transamerica Life
Insurance Company of New York is 100 Manhattanville Road, Purchase, New York
10577.
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. These ratings
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. Once it has completed its analysis of each
insurer's financial strength, A.M. Best assigns the insurer a Best Rating.
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, other rating companies, such as
by Standard & Poor's Insurance Ratings Services or Duff & Phelps assess our
claims-paying ability. They also 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
On June 23, 1992, Transamerica's Board of Directors passed resolutions to
establish the Separate Account VA-2LNY of Transamerica, also referred to as the
Variable Account, under the laws of the State of New York. The variable account
is registered with the Securities and Exchange Commission under the Investment
Company Act of 1940 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. This protection remains in place so long as assets in the assets in the
separate account do not exceed the reserves and other requirements of the
separate account are maintained.
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 eighteen sub-accounts, each of which invests solely in
a specific corresponding portfolio. Changes to the sub-accounts may be made at
the discretion of Transamerica.
THE FUNDS
The variable account invests exclusively in the:
* Series of Dreyfus Variable Investment Fund
* Dreyfus Stock Index Fund
* The Dreyfus Socially Responsible Growth Fund, Inc.
* Portfolios of Dreyfus Investment Portfolios
* the Growth Portfolio of Transamerica Variable Insurance Fund, Inc.
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. It commenced operations on August 31, 1990, and is registered
with the Commission as an open-end management investment company under the 1940
Act. Currently, thirteen series, or portfolios, of the variable fund are
available for the policies. Each portfolio has separate investment objectives
and policies. As a result, each portfolio operates as a separate investment
portfolio and the investment performance of one portfolio has no effect on the
investment performance of any other portfolio.
The Stock Index Fund was incorporated under Maryland law on January 24, 1989,
and commenced operations on September 29, 1989. It 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, and commenced operations on August 31, 1993. It is registered with the
Commission as an open-end, diversified, management investment company.
Dreyfus Investment Portfolios organized as an unincorporated business trust
under Massachusetts law pursuant to an Agreement and Declaration of Trust dated
May 14, 1993. It is registered with the Commission as an open-end management
company under the 1940 Act and commenced operations May 1, 1998. Currently, two
Portfolios of Dreyfus Investment Portfolios are available for the policy.
Transamerica Variable Insurance Fund, Inc. was incorporated under Maryland law
on June 23, 1995. It commenced operations on November 1, 1996, and is registered
with the SEC as a management investment company. One of its portfolios is the
Growth Portfolio.
The Commission does not supervise the management or the investment practices and
policies of any of the portfolios. The assets of the Variable Fund, the Socially
Responsible Fund, the Stock Index Fund are each separate from the assets of the
other portfolios.
Service Providers to The Funds
* The Dreyfus Corporation provides investment advisory and administrative
services to the Dreyfus Variable Investment Fund and the Socially Responsible
Fund.
* Mellon Equity Associates provides index fund management services to the Stock
Index Fund, with The Dreyfus Corporation serving as the manager, in accordance
with applicable agreements with the fund.
* Fayez Sarofim & Co. provides sub-investment advisory services for the Capital
Appreciation Portfolio.
* NCM Capital Management Group, Inc., provides sub-investment advisory services
for the Socially Responsible Fund.
* Transamerica provides investment advisory services to Transamerica VIF, with
Transamerica Investment Services, Inc., providing sub-investment advisory
services.
Transamerica receives fees from the Dreyfus Corporation and its affiliates for
providing certain administrative and or other services. The portfolios are
described below. Please see the Variable Fund, the Stock Index Fund, the
Socially Responsible Fund, Dreyfus Investment Portfolio and Transamerica VIF
prospectuses for more information.
Money Market Portfolio
The Money Market Portfolio's investment objective is to achieve as high a level
of current income while preserving invested capital and maintaining liquidity.
It seeks to achieve this objective by investing in short-term money market
instruments. The investment advisory fee is payable monthly at the annual rate
of 0.50 of 1% of the value of the portfolio's average daily net assets. This
portfolio is not insured or guaranteed by the FDIC or any agency of the United
States Government. While the portfolio intends to maintain a stable net asset
value of $1.00 per share, it is subject to loss of principal.
Special Value Portfolio
The Special Value Portfolio's investment objective is to maximize total return
on your investment capital. Total return consists 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 at the annual rate of
0.75 of 1% of the value of the portfolio's average daily net assets.
Zero Coupon 2000 Portfolio
The Zero Coupon 2000 Portfolio's investment objective is to provide as high an
investment return as is possible while preserving capital. It seeks to achieve
its objective by investing primarily in:
* debt obligations of the U.S. Treasury bonds that have been stripped of their
unmatured interest coupons;
* interest coupons that have been stripped from debt obligations issued by the
U.S. Treasury;
* receipts and certificates for stripped debt obligations and stripped coupons,
including U.S. Government trust certificates.
Collectively, we refer to these as Stripped Treasury Securities. The portfolio
also may purchase certain other types of stripped government or corporate
securities. The portfolio's assets will consist primarily of portfolio
securities which will mature on or about December 31, 2000. The investment
advisory fee is payable monthly at the annual rate of 0.45 of 1% of the value of
the portfolio's average daily net assets.
Quality Bond Portfolio
The Quality Bond Portfolio's investment objective is to provide the maximum
amount of current income possible while preserving capital and the maintaining
liquidity. It seeks to achieve its objective by investing mainly 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
portfolio's average daily net assets.
Small Cap Portfolio
The Small Cap Portfolio's investment objective is to maximize capital
appreciation. It seeks to achieve its objective by investing mainly in common
stocks. Under normal market conditions, the portfolio will invest at least 65%
of its total assets in companies with market capitalizations of less than $1.5
billion at the time of purchase. The Dreyfus Corporation will invest in
companies it believes to be characterized by new or innovative products,
services or processes which should enhance prospects for growth in the future
earnings. The investment advisory fee is payable monthly at the annual rate of
0.75 of 1% of the value of the portfolio's average daily net assets.
Capital Appreciation Portfolio
The Capital Appreciation Portfolio's primary investment objective is to provide
as much long-term capital growth as possible while preserving capital. Current
income is a secondary goal. It seeks to achieve its goals by investing in common
stocks of domestic and foreign issuers. An investment advisory fee is payable to
The Dreyfus Corporation and a sub-investment advisory fee is payable monthly to
Fayez Sarofim & Co. at the total annual rate of 0.75 of 1% of the value of the
portfolio's average daily net assets.
Growth and Income Portfolio
The Growth and Income Portfolio's investment objective is to provide as much
long-term capital growth, current income and growth of income as possible while
undertaking reasonable investment risk. This portfolio invests primarily in
equity and debt securities and money market instruments of domestic and foreign
issuers. The proportion of the portfolio's assets invested in each type of
security will vary from time to time in accordance with The Dreyfus
Corporation's assessment of economic conditions and investment opportunities. An
investment advisory fee is payable monthly to The Dreyfus Corporation at the
annual rate of 0.75 of 1% of the value of the portfolio's average daily net
assets.
International Equity Portfolio
The International Equity Portfolio's investment objective is to maximize capital
appreciation. This portfolio's invests primarily in the equity securities of
foreign issuers located throughout the world. An investment advisory fee at an
annual rate of 0.75 of 1% of the value of the portfolio's average daily net
assets is payable monthly to The Dreyfus Corporation.
International Value Portfolio
The International Value Portfolio's investment objective is long-term capital
growth. This portfolio invests primarily in a portfolio of publicly traded
equity securities of foreign issuers. Each equity within the portfolio would be
characterized as value companies according to criteria established by the
portfolio's investment adviser. An investment advisory fee is payable monthly to
The Dreyfus Corporation at the annual rate of 1.00% of the value of the
portfolio's average daily net assets.
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 as a group, as presented by the Standard & Poor's 500 Composite
Stock Price Index. This portfolio will use quantitative statistical modeling
techniques to build a portfolio in an attempt to achieve its investment
objective. It will do so without assuming risk greater than that found in the
broad stock market. An investment advisory fee is payable monthly to The Dreyfus
Corporation at the annual rate of 0.75 of 1% of the value of the Portfolio's
average daily net assets.
Small Company Stock Portfolio
The Small Company Stock Portfolio's investment objective is to provide
investment results that are greater than the total return performance of
publicly traded common stocks as a group, as represented by the Russell 2500
Index. This portfolio invests primarily in a portfolio of equity securities of
small to medium sized domestic companies. While investing in these companies,
the portfolio will attempt to maintain volatility and diversification similar to
that of the Russell 2500 Index. An investment advisory fee is payable monthly to
the Dreyfus Corporation at the annual rate of 0.75 of 1% of the value of the
portfolio's average daily net assets.
Balanced Portfolio
The Balanced Portfolio's investment objective is to provide investment results
that are greater than the total return performance of common stocks and bonds as
a group, as represented by a hybrid index. 60% of the portfolio is composed of
the common stocks in the Standard & Poor's 500 Composite Stock Price Index. 40%
of the portfolio is composed of the bonds in the Lehman Brothers Intermediate
Government/Corporate Bond Index. This Series invests primarily in common stocks
and bonds. The Dreyfus Corporation selects the proportion of each, based on
their expected returns and risks. An investment advisory fee is payable monthly
to the Dreyfus Corporation at the annual rate of 0.75 of 1% of the value of the
portfolio's average daily net assets.
Limited Term High Income Portfolio
The Limited Term High Income Portfolio's investment objective is to maximize
total return, through capital appreciation and current income. This portfolio
seeks to achieve its objective by investing up to all of its assets in a
portfolio of lower rated fixed-income securities, commonly known as junk bonds.
Under normal market conditions, these bonds will have an effective duration of
three and one-half years or less and an effective average portfolio maturity of
four years or less. Investments of this type are subject to a greater risk of
loss of principal and non-payment of interest. Investors should carefully assess
the risks associated with an investment in the portfolio. Those risks are
described in the portfolio's prospectus. An investment advisory fee is payable
monthly to the Dreyfus Corporation at the annual rate of 0.65of 1% of the value
of the portfolio's average daily net assets.
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 as a group, as represented by the Standard & Poor's 500 Composite Stock
Price Index. The Stock Index Fund is not sponsored by or affiliated with
Standard & Poor's Corporation in any way. The Stock Index Fund pays a monthly
management fee to The Dreyfus Corporation at the annual rate of 0.245 of 1% 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. Stocks selected for this fund will be
issued by companies which, in the opinion of the fund's management, must meet
traditional investment standards. They must 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 and a sub-investment advisory fee is payable
monthly to NCM Capital Management Group, Inc. at the total annual rate of 0.75
of 1% of the value of the Socially Responsible Fund's average daily net assets.
Core Value Portfolio
The Core Value Portfolio is a diversified portfolio. Its primary investment
objective is to provide long-term growth of capital. Current income is a
secondary investment objective. The portfolio anticipates that at least 65% of
the value of its total assets, except when maintaining a temporary defensive
position, will be invested in equity securities, such as common stocks,
preferred stock and securities convertible into common stocks, including
depository receipts. All of these would be characterized as equity securities
issued by "value" companies according to criteria established by The Dreyfus
Corporation. In general, the portfolio's investments are broadly diversified
over a number of industries. As a matter of operating policy, the portfolio will
not invest more than 25% of its total assets in any one industry. A management
fee is payable monthly to The Dreyfus Corporation at the annual rate of 0.75 of
1% of the portfolio's average daily net assets.
MidCap Stock Portfolio
The MidCap Stock Portfolio is a diversified portfolio. Its investment objective
is to provide investment results that are greater than the total return
performance of publicly-traded common stocks as a group, as represented by the
Standard & Poor's MidCap 400 Index. Medium-size issuers will include those U.S.
companies with market capitalizations generally ranging in value from $200
million to $5 billion. Market capitalization is defined as market price per
share times the number of shares outstanding. The portfolio also may invest in
large and small capitalization companies, including emerging and cyclical growth
companies. Emerging and cyclical growth companies are firms which, while they
may not have a history of stable long-term growth, are nonetheless expected to
represent attractive investments. The equity securities in which the portfolio
invests consist of common stocks, preferred stocks and securities convertible
into common stocks, including those in the form of Depositary Receipts. The
portfolio is not an index fund and its investments are not limited to securities
of issuers included in the S&P 400 Index. A management fee is payable monthly to
The Dreyfus Corporation at the annual rate of 0.75 of 1 of the portfolio's
average daily net assets.
Growth Portfolio of the Transamerica Variable Insurance Fund, Inc. seeks
long-term capital growth. Common stock (listed and unlisted) is the basic form
of investment. The Growth Portfolio invests primarily in common stocks of growth
companies that are considered by the manager to be premier companies. In the
Manager's view, characteristics of premier companies include one or more of the
following: * dominant market share; * leading brand recognition; * proprietary
products or technology; * low-cost production capability; and/or * excellent
management with shareholder orientation. The manager of the portfolio believes
in long-term investing and places great emphasis on each company's ability to
sustain the above competitive advantages. Unless market conditions indicate
otherwise, the manager also tries to keep the portfolio fully invested in
equity-type securities. It also does not try to invest or divest based on stock
market movements. When, in the judgment of the manager, and market conditions
warrant, the portfolio may, for temporary defensive purposes, hold part or all
of its assets in cash, debt or money market instruments. The portfolio may
invest up to 10% of its assets in debt securities having a call on common stocks
that are rated below investment grade. A management fee of 0.75 of 1% of the
average daily net assets is payable monthly to Transamerica Occidental Life
Insurance Company, as adviser. The adviser pays Transamerica Investment
Services, Inc. a monthly fee of at the annual rate of 0.30 of 1% of the first
$50 million, .25 of 1% of the next $150 million and .20 of 1% of the assets in
excess of $200 million.
Variable Account Objectives
Meeting objectives depends on various factors, including, but not limited to,
how well the portfolio managers anticipate changing economic and market
conditions. You should be aware of the following risks:
* 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.
Resolution of Possible Conflicts
Since variable insurance products from other companies as well as Transamerica
can invest in all of the portfolios, there is a possibility that a material
conflict may arise between the interests of the variable account and other
companies. If conflict occurs, the affected insurance companies will take the
needed steps to resolve the matter. This may include stopping their separate
account from investing in the portfolios.
Sources of Additional Information
You will find additional information in the current prospectuses for the
portfolios, which accompany this prospectus, including:
* the investment objectives;
* the investment policies;
* the investment advisory services;
* the administrative services; and
* charges
You should read the portfolios' prospectuses carefully before you make any
decision concerning the allocation of premiums to, or transfers among, the
sub-accounts.
Addition, Deletion or Substitution
Transamerica does not control the portfolios. We therefore cannot guarantee that
any of the sub-accounts of the variable account or any of the portfolios will
always be available to investors for allocation of premiums or transfers.
Transamerica retains the right to make changes in the variable account and in
its investments.
Transamerica reserves the right to:
* eliminate the shares of any portfolio held by a sub-account; or
* substitute shares of another portfolio or of another investment company for
the shares of any portfolio.
If the shares of a portfolio are no longer available for investment or if, in
our judgement, a portfolio is not fulfilling its intended purpose within the
variable account, we reserve the right to remove it. To the extent required by
the 1940 Act, we will inform shareholders in advance of any substitutions. We
will also see the Commission's advance approval before making substitutions.
These potentially necessary substitutions should not be construed in any way as
preventing or limiting 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.
The Establishment of New Sub-Accounts
At Transamerica's discretion, based on marketing, tax, investment or other
conditions, we can elect to establish new sub-accounts. We will make these new
sub-accounts available to our existing policy owners on a basis which we will
determine at that time. 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 change the policies
in a way that appropriately reflects substitutions or changes. Furthermore, if
we believe it 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. It may also be deregistered
under this act in the event such registration is no longer required, or may be
combined with one or more other separate accounts.
THE FIXED ACCOUNT
This prospectus is generally intended to serve owners as a disclosure document
only for the policy and the variable account. For complete details regarding the
fixed account, see the policy itself.
Premiums allocated to and amounts transferred to the fixed account become part
of the general account of Transamerica, which supports insurance and annuity
obligations. Because of exemptive and exclusionary provisions, interests in the
general account have not been registered under the Securities Act of 1933,
hereafter referred to simply as the 1933 Act. Nor is the general account
registered as an investment company under the 1940 Act. Accordingly, neither the
general account nor any interests therein are generally subject to the
provisions of the 1933 Act or the 1940 Act. Therefore the Securities and
Exchange Commission has not reviewed the disclosures in this prospectus which
relate to the fixed account. The fixed account is part of the general account of
Transamerica. The general account of Transamerica consists of all the general
assets of Transamerica, other than those in the variable account, or assets in
any other segregated asset account. Transamerica has the sole right to determine
how it will invest the assets of its general account while adhering to
applicable laws. The allocation or transfer of funds to the fixed account does
not entitle the owner to share in the overall investment returns of
Transamerica's general account.
The Interest Rate of the Fixed Account
Transamerica guarantees that it will credit interest at a rate of not less than
3% per year, compounded annually, to amounts allocated to the fixed account
under the policies. However, Transamerica reserves the right to change the
minimum rate. Transamerica may credit interest at a rate in excess of 3% per
year. There is no specific formula for the determination of excess interest
credits.
Some of the factors that the company may consider in determining whether to
credit excess interest to amounts allocated to the fixed account and the amount
in that account are:
* general economic trends;
* rates of return currently available;
* anticipated returns on the company's investments;
* regulatory and tax requirements; and
* competitive factors.
Any interest credited to amounts allocated to the fixed account in excess of 3%
per year will be determined in the sole discretion of Transamerica. The owner
assumes the risk that interest credited to the fixed account allocations may not
exceed the minimum guarantee of 3% for any given year.
Rates of interest credited to the fixed account will be guaranteed for at least
twelve months and will vary by the timing and class of the allocation, transfer
or renewal. At any time after the end of the twelve month period for a
particular allocation, Transamerica may change the annual rate of interest for
that class. The new annual rate of interest will remain in effect for at least
twelve months. New purchase payments made to the policy which are allocated to
the fixed account may receive different rates of interest. These rates of
interest may differ from those interest rates credited to amounts transferred
from the variable sub-accounts or guarantee period account and from those
credited to amounts remaining in the fixed account and receiving renewal rates.
These rates of interest may also differ from rates for allocations applied under
certain options and services Transamerica may be offering.
Transfers from the Fixed Account
Transfers from the fixed account into a sub-account of the variable account are
limited to four per policy year. The maximum transfer amount allowed from the
fixed account will be the maximum transfer amount in effect on the date of such
transfer during a policy year. The maximum transfer amount is a percentage of
the value of the fixed account as of the date of the last policy anniversary.
The percentage rate, which will be declared by Transamerica from time to time,
will be a minimum of 25% and, currently, is 25%.
Transfers into the Fixed Account
There is a 90 day waiting period before you are allowed to make a second or
additional transfers from a sub-account of the variable account into the fixed
account.
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. Transamerica reserves the right to modify the policy so that it conforms
to any federal or state stature, or rule or regulation. Such modifications will
give policy owners the benefits of these changes. Transamerica is responsible
for the obligations stated in the oolicy.
The policies may be used for rollover IRAs and for rollover Roth IRAs that
qualify for special federal income tax treatment. With Transamerica's prior
permission, the policies may also be available as a contributory IRAs, as
contributory Roth IRAs, as Section 403(b) annuities and for use in Section
401(a) qualified pension and profit sharing plans established by corporate
employers. Generally, qualified policies contain restrictive provisions limiting
the timing and amount of payments and distributions from the qualified policy.
POLICY APPLICATION AND PREMIUMS
Premiums
Please send all of your premium payments to the service center. We will send the
owner a confirmation letter to acknowledge the acceptance of each premium.
The initial premium for each policy must generally be at least $5,000.
Transamerica, may, at its discretion, accept lower initial premiums for certain
qualified policies.
We will ordinarily issue the policy and derive the net premium from the initial
premium within two days of receipt of a properly completed application and the
premium. At this time, the policy is accepted and funded with your premium. A
net premium is defined as a premium minus any applicable premium taxes. These
taxes may include retaliatory premium taxes, which possibly could be levied in
the future in New York, or in any other state in which the owner lives, where
such taxes are levied in the future. Acceptance of the application is subject to
it being received in good order. Transamerica reserves the right to reject any
application. Policies normally will not be issued with respect to annuitants
more than 80 years old, although Transamerica in its discretion may waive this
restriction in certain cases.
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. We will explain the reason for
the delay and will refund the initial premium within five business days.
However, if the owner consents to Transamerica retaining the initial premium, we
will credit it to your policy as soon as the requirements are fulfilled.
Ten Day Cancellation Option
The owner has the right to examine the policy for a limited period known as a
Free Look Period. The owner may cancel the policy by delivering or mailing a
written notice or by sending a telegram to:
* the agent through whom the policy was purchased; or
* the service center
This must be done before midnight of the tenth day after receipt of the policy.
If the owner gives notice by mail and returns the policy by mail, properly
addressed with postage paid, the request for cancellation will be deemed to have
been made on the date postmarked. We will refund the owner's premiums to the
fixed account plus the variable accumulated value, determined by the date
postmarked. The return of these amounts will occur within seven days after we
receive the owner's returned policy and the request to cancel.
Additional premiums may be paid into the policy 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 paid to an automatic payment
plan. Using an automatic payment plan, the additional premiums are automatically
deducted from a bank account. In addition, minimum allocation amounts apply.
Additional net premiums are credited to the policy as of the date the payment is
received. Currently, additional premiums after the initial premium may not be
made to Section 401(a) and Section 403(b) annuity policies.
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.
Choosing One or More Investment Options
As the owner of the policy, you will have the opportunity to choose how your
premiums are invested. You may select one or more sub-accounts, and you may
allocate your premium dollars in the percentages of your choice. Any premium
allocation you choose is allowed, as long as it is 10% or more, and you use
whole numbers. 25% is allowed, for example, whereas an allocation of 25.50% is
not allowed. In addition, the initial premium allocated to any sub-account must
be at least $500. The policy owner has the choice of which sub-accounts to
invest, or not invest in. For all non-IRA policies, the net premium derived form
the initial premium will be allocated directly to the sub-account or
sub-accounts chosen by the owner. These net premiums will be allocated as you
have chosen them to be, according to the percentages you have designated when we
receive the premium.
As the policy owner, you may change your allocation percentages at any time. To
accomplish this, simply submit a request for such a change to the service center
in a form and manner acceptable to Transamerica. Any changes to the allocation
percentages are subject to this limitation above. Please call the service center
in advance to determine how your request for allocation changes should be made.
Your requested changes will take effect:
* with the first premium received after you have submitted your request; or
* with any request deemed acceptable by Transamerica that is accompanied by a
premium.
Your requested changes will remain in effect until you change them again or cash
surrender your policy.
If, as the owner, you decide to allocate additional net premiums to an inactive
sub-account of the variable account, you must allocate at least $500.
Investment Option Limit
Currently, as the owner, you may not allocate premium dollars to more than
eighteen investment options over the life of the policy. Investment options
include sub-accounts of the variable account and the fixed account. Each
sub-account and the fixed account that ever received a transfer or purchase
payment allocation count as one towards this total of eighteen limit.
Transamerica may waive this limit in the future. For example, if the owner makes
an allocation to the money market sub-account and later transfers all amounts
out of this money market sub-account, it would still count as one for the
purposes of the limitation even if it held no value. If the owner transfers from
a sub-account to another sub-account and later back to the first, the count
towards the limitation would be two, not three.
POLICY VALUE
Before the annuity date, the policy value is the sum of :
* the fixed accumulated value, plus
* the variable accumulated value.
The policy value is determined with the use of valuation periods. 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.
It 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. Days that are not considered to be
valuation days are those during which the New York Stock Exchange is closed for
regular business.
The variable accumulated value is expected to change from valuation period to
valuation period. The changes reflect how the investment performed of all of the
selected portfolios, and also reflect the deductions for charges.
How Your Variable Accumulation Units Are Created
When you, as the policy owner, pay premiums into your policy, those premiums are
used to purchase variable accumulation units in the sub-accounts in which you
have chosen to invest. At the end of each valuation period during which
Transamerica received premiums from you, the owner, will be credited with
variable accumulation units. The number of units you receive is determined by
dividing:
* the portion of each net premium allocated to the sub-accounts by
* the variable accumulation unit value, at the end of the valuation Period.
When you, the owner, pay your first premium, which is defined as the initial net
premium, variable accumulation units for that payment are credited to the policy
value. That credit is then held in the money market sub-account for fifteen
calendar days after the policy date. The variable accumulation units credited to
your policy as the result of your initial net premium are credited to your
policy's value within two valuation days of:
1. the date upon which Transamerica's service center receives an acceptable and
properly completed application; or
2. the date upon which Transamerica's service center receives the initial
premium.
The variable accumulation units credited to your policy as the result of
subsequent premiums will be credited to your policy's value at the end of the
valuation period during which Transamerica received your payment.
How Variable Accumulation Unit Values Are Calculated
The value of a variable accumulation unit for each sub-account for a valuation
period is established at the end of each valuation period. It 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, or SAI.
Transferring Among Sub-Accounts
When you transfer premium dollars among the sub-accounts, those transfers will
result in the purchase and/or cancellation of variable accumulation units. The
value of these units will equal the total dollar amount you are transferring to
or from a sub-account. These transactions are valued at the end of the valuation
day on which you performed your transaction.
TRANSFERS
Transfers Before the Annuity Date
Before the annuity date, as the owner you may transfer all or part of the policy
value among the sub-accounts by giving a written request to the service center
subject to the following conditions:
1. the minimum amount which may be transferred is $500; and
2. the minimum transfer to an inactive sub-account is $500.
Transfers are restricted into or out of the fixed account. Transfers are also
subject to terms and conditions that may be imposed by the portfolios.
Your transfer requests must specify the amounts you wish to transfer from each
sub-account or the fixed account and the amounts you wish to transfer into each
sub-account or the fixed account.
Transamerica imposes a transfer fee of $10 for each transfer over 18 in a policy
year. We also reserve the right to:
* waive the transfer fee;
* vary the number of transfers without charge; or
* not count transfers under certain options or services.
If a transfer which you have requested reduces the value in a sub-account or the
fixed account to less than $500, then Transamerica reserves the right to
transfer the remaining amount along with the amount you requested to be
transferred. This will be done in accordance with the transfer instructions you
provided. Under current law, there will not be any tax liability to you, the
owner if you make a transfer.
Possible Restrictions
Transamerica reserves the right without prior notice to modify, restrict,
suspend or eliminate the transfer privileges 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. We have determined that the movement of significant sub-account values
from one sub-account to another may prevent the portfolio impacted by these
transfers from taking advantage of investment opportunities. This occurs because
the portfolio must maintain a significant cash position in order to handle
redemptions.
Such large and sudden movement of assets in any one portfolio may also cause a
substantial increase in portfolio transaction costs. These costs must be
indirectly borne by owners. Therefore, Transamerica reserves the right to
require that all transfer requests be made by you, the owner and not by a third
party holding a power of attorney. We also 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
As the policy owner, you may elect to participate in dollar cost averaging.
Dollar cost averaging allows you to invest monthly the dollar amount you
designate, from $250 upwards, into the portfolio of your choice. The main
benefit of this systematic investment technique is that it enables you to
average out the cost of your unit prices over time, as you invest regularly to
meet your personal investment objectives.
Prior to the annuity date, you, as the owner, may request that a designated
amount of money be automatically transferred from one, and only one, of the
sub-accounts which invests in:
* the Money Market;
* the Quality Bond Portfolio;
* the Limited High Term Income Portfolio; or
* the Fixed Account.
This money may be transferred to any of the sub-accounts on a monthly basis by
submitting a request to the service center. The request must be in a form and
manner acceptable to Transamerica. Your transfers will begin the month
following, but no sooner than one week following, receipt of such request,
provided that dollar cost averaging transfers will not commence until the later
of:
1. 30 days after the policy date, or
2. the estimated end of the free look period, allowing 5 days for delivery of
the policy by mail.
Transfers will continue for the duration selected by the owner unless:
1. terminated by the owner,
2. automatically terminated by Transamerica because there are insufficient funds
in the applicable sub-account or fixed account, or
3. for other reasons as set forth in the policy.
As the owner, you may request that monthly transfers be continued for an
additional period of time. You can accomplish this by giving notice to the
service center in a form and manner acceptable to Transamerica within 30 days
prior to the last monthly transfer. If no request to continue the monthly
transfers is made by you, as the owner, this option will terminate automatically
with the last transfer.
Eligibility Requirements
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 your transfers are made)
must be at least $5,000;
2. the minimum amount that you may transfer out of the selected sub-account or
fixed account is $250 per month; and
3. the minimum amount transferred into any other sub-account is the greater of
$250 or 10% of the amount being transferred.
Please note that dollar cost averaging transfers can not be made from a
sub-account from which you are receiving systematic withdrawals or automatic
payouts.
As the owner, you will not be charged for the dollar cost averaging service and
transfers that result from dollar cost averaging practices. Nor will these
transfers count toward 18 transfers without charge per policy year.
Dollar cost averaging transfers may not be made to the fixed account.
Automatic Asset Rebalancing
When you allocate premiums to certain portfolios in certain percentages, you
define how you want your investments to perform. Changing market conditions
effect each portfolio's performance, and can throw your allocations out of
balance. As the owner, you may instruct Transamerica to automatically rebalance
the amounts by reallocating them among the variable sub-accounts, at the time,
and in the percentages that you specify. You must specify automatic asset
rebalancing in your instructions to Transamerica. As the owner, you may elect to
have the rebalancing done on an annual, semi-annual or quarterly basis. You may
also elect to have amounts allocated among the sub-accounts using whole
percentages, with a minimum of 10% allocated to each sub-account.
As the owner, you may elect to establish, change or terminate the automatic
asset rebalancing by submitting a request to the service center in a form and
manner acceptable to Transamerica. Automatic asset rebalancing will not count
towards the limit of 18 free transfers in a policy year. There is currently no
charge for the automatic asset rebalancing. However, Transamerica reserves the
right to charge a nominal amount for this feature. Transamerica also reserves
the right to discontinue offering automatic asset rebalancing any time for any
reason.
After the Annuity Date
If a variable annuity payout option is elected, as the owner, you may transfer
variable account amounts after the annuity date by submitting a request in a
form acceptable to the service center. Your request will be 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 $50 monthly payment.
Your 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
As the owner, you 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. You can accomplish this by giving a written request to the service center.
Your request will be subject to the rules below. Federal or state laws, rules or
regulations may also apply. The amount payable to you as the owner if the policy
is surrendered on or before the annuity date is the cash surrender value. The
cash surrender value is equal to the policy value, minus any policy fee, minus
any applicable contingent deferred sales load and minus any applicable premium
taxes.
No withdrawals may be made after the annuity date. Only one partial withdrawal
will be permitted while the systematic withdrawal option is in effect. Partial
withdrawals must be at least $500.
A full surrender of your policy will result in a cash withdrawal payment equal
to the policy's cash surrender value at the end of the valuation period during
which your request is received along with all of your completed forms. Any
contingent deferred sales load which applies to your contract with Transamerica
will be deducted from the amount you paid.
In the case of a partial withdrawal, you, as the owner may instruct the service
center as to the amounts to be withdrawn from each sub-account or fixed account.
If you do not specify from where 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 $500, Transamerica reserves the right to
transfer the remaining value of that sub-account pro rata. If no such
sub-accounts exist, such transfer will be made to the money market sub-account.
As the owner, you 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, you, as the owner will be notified that you
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 you as the owner, your
withdrawal request will be considered null and void, and no withdrawal will be
processed.
Fees Relating to Withdrawals or Surrenders
The policy fee will be deducted from a full surrender before the application of
any contingent deferred sales load. You withdrawals may be taxable transactions.
The Code requires Transamerica to withhold federal income tax from withdrawals.
However, generally as an owner, you will be entitled to elect, in writing, not
to have tax withholding apply.
This is true except for distributions from certain qualified policies that may
be subject to mandatory 20% withholding. Withholding applies to the portion of
the withdrawal which is includible in income and subject to federal income tax.
The federal income tax withholding rate for partial withdrawals and full
surrenders is 10%, or 20% in the case of certain qualified plans, of the taxable
amount of the withdrawal. Withholding applies only if the taxable amount of the
withdrawal is at least $200.
Moreover, the Code provides that a 10% penalty tax may be imposed on the taxable
portions of distributions for certain early withdrawals. In addition, under New
York law you as the owner may request Transamerica to withhold New York income
tax from withdrawals.
Withdrawal , including surrender requests, generally will be processed as of the
end of the valuation period during which the request, including all completed
forms, is received. Payment of any cash withdrawal or lump sum death benefit due
from the variable account will occur within seven days from the date on which
your 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;
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. The payment of a
withdrawal from the fixed account may be delayed for up to six months. If
delayed for more than 10 days, interest will be paid on the withdrawal amount up
to the date of payment.
You, as the owner, assume the investment risk for amounts allocated to the
variable account. 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.
Additional Withdrawal and Surrender Provisions
After a withdrawal of the total cash surrender value, or at any time that the
policy value is zero, all of your rights, as the owner will terminate.
Except for rollover IRA's, qualified policies offered by the prospectus are only
offered with Transamerica's prior permission. They will be issued in connection
with retirement plans which meet the requirements of Section 408(b) of the Code.
You should refer to the terms of the particular retirement plans for any
additional limitations or restrictions on your cash withdrawals, as these
limitations or restrictions may supercede those of the policy issued by
Transamerica.
As an owner, you 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, as the owner, you may elect to have withdrawals
automatically made from one or more sub-account(s) on a monthly basis. You can
accomplish this by giving written notice to the service center. Then other
distribution modes may be permitted. The withdrawals will commence the month
following, but no sooner than one week following, receipt of your written
notice. Please note these exceptions, however, 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 you, the owner, Transamerica may change the day of the
month on which withdrawals are made under this option. Withdrawals will be from
the sub-account, or sub-accounts, and in the percentage allocations specified by
you the owner. If no specifications are made, withdrawals will be pro rata from
all sub-accounts and fixed account with value. Systematic withdrawals can not be
made from a sub-account from which dollar cost averaging transfers are being
made.
Eligibility and Rules of the Systematic Withdrawal Policy
To be eligible for the systematic withdrawal option:
* the policy value must be at least $12,000 at the time you elect to use this
option;
* the minimum monthly amount that can be withdrawn is $100; and
* the maximum monthly amount that can be withdrawn on an annual basis is equal
to the sum, as of the date of the first withdrawal, of: a) 10% of premiums that
are less than seven policy years old, and b) 10% of remaining premiums that are
at least seven policy years old.
Systematic withdrawals are not subject to the contingent deferred sales load but
can be reduced by any applicable premium tax. Systematic withdrawals may be
taxable, subject to withholding, and subject to the 10% penalty tax.
The systematic withdrawals will continue unless you, as the owner, terminate
them or automatically terminates by Transamerica as set forth in the policy. If
this option is terminated it may not be used again until the next policy
anniversary. You may make only one partial withdrawal while the systematic
withdrawal option is in effect. If you make a second partial withdrawal while
this option is in effect, it will automatically terminate the systematic
withdrawal option. Upon any second partial withdrawal any amount requested as a
partial withdrawal, including the first in a policy year, will be subject to a
contingent deferred sales load to the extent it exceeds accumulated earnings.
We reserve the right to impose an annual fee of an amount not to exceed $25 per
policy year 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.
Consult your tax adviser and, if applicable, the particular retirement plan,
before requesting withdrawals from a qualified policy. There may be severe
restrictions with regard to withdrawals from
qualified policies.
Automatic Payout Option, or APO
Prior to the annuity date, the owner may elect the automatic payout option,
referred to as the APO to satisfy minimum distribution requirements under the
Code for certain qualified policies.
DEATH BENEFIT
If the owner or annuitant dies before the annuity date, a death benefit on the
policy is payable. If the deceased owner or annuitant, as applicable, had not
reached age 85, the death benefit will be the greatest of :
a. the policy value;
b. all premiums paid less all withdrawals and any premium taxes applicable to
those withdrawals; or
c. the greatest policy anniversary value prior to the earliest of the
annuitant's or owner's 75th birthday plus all premiums paid since that policy
anniversary minus all withdrawals and any premium taxes applicable to those
withdrawals since that policy anniversary.
If the deceased owner or annuitant, as applicable, had attained age 85, the
death benefit will be equal to the 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. 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 will remain in the sub-accounts as previously specified by the owner or as
reallocated according to instructions received by Transamerica from all
beneficiaries. Therefore, the policy value will fluctuate with investment
performance of the applicable sub-accounts. As a result, the amount of the death
benefit will depend 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. Once the Transamerica service center
receives this proof and the beneficiary's choice of a method of settlement, the
death benefit generally will be paid within seven days, or as soon thereafter as
Transamerica has sufficient information to make the payment. The death benefit
may be paid in a lump sum cash benefit. Or, subject to any limitations under any
state or federal law, rule, or regulation, it may be paid under one of the
annuity forms, unless a settlement agreement effective under the policy prevents
this choice. 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.
Designation of Beneficiaries
You as the owner may select one or more beneficiaries and name them in the
application. If the owner selects more than one beneficiary, unless you indicate
otherwise they will each 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 and the owner's
death. Respectively, these individuals are referred to as the annuitant's
beneficiary and the owner's beneficiary. Before the annuitant's death, you as
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 upon the death of the annuitant the contingent
annuitant will become the annuitant and no death benefit will be paid at that
time.
Death of Owner Prior to the Annuity Date
If an owner dies before the annuity date, a death benefit will be paid to that
owner's beneficiary. If the policy has joint owners, the surviving joint owner
will be 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
or receive payment of the death benefit. The payment of the death benefit may be
subject to certain distribution requirements under the federal income tax laws.
Death of Annuitant or Owner After the Annuity Date
If the annuitant or an owner dies after the annuity starts, the remaining
undistributed portion, if any, of the policy will be distributed at least as
rapidly as under the method of distribution being used as of the date of such
death. Under some annuity forms, there will be no death benefit. If the owner is
not the annuitant, upon an owner's death, any remaining ownership rights will
pass to the owner's beneficiary.
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 or the fixed 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 the contract owner's premiums,
although premium tax may be deducted. However, a contingent deferred sales load
of up to 6% of premiums paid may be imposed on certain withdrawals or
surrenders, and possibly on certain annuitizations, to partially cover certain
expenses incurred by Transamerica relating to the sale of the policies,
including commissions paid to salespersons, the costs of preparation of sales
literature and other promotional costs and acquisition expenses.
The contingent deferred sales load percentage varies according to the number of
policy years between the policy year in which a net premium was credited to the
policy and the policy year in which the withdrawal is made. The amount of the
contingent deferred sales load is determined by multiplying the amount withdrawn
subject to the contingent deferred sales load by the contingent deferred sales
load percentage in accordance with the following table.
Number of Policy Years Contingent deferred sales load
Since Receipt of Each Premium As a Percentage of Premium
Less than one year 6%
1 year but less than 2 years 6%
2 years but less than 3 years 5%
3 years but less than 4 years 5%
4 years but less than 5 years 4%
5 years but less than 6 years 4%
6 years but less than 7 years 2%
7 or more years 0%
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In no event shall the total contingent deferred sales load assessed against the
policy exceed 6% of the aggregate premiums paid to a policy.
Certain amounts may be withdrawn free of any contingent deferred sales load. As
the owner, you may make withdrawals up to the allowed amount without incurring a
contingent deferred sales load each policy year before the annuity date. During
the first policy year, the allowed amount is equal to accumulated earnings not
previously withdrawn.
For the first withdrawal, and only the first withdrawal in a policy year after
the first policy year, the available allowed amount you are allowed to withdraw
is equal to the sum of :
1 100% of premiums not previously withdrawn and received at least seven
policy years before the date of withdrawal; plus
2 the greater of
a. the accumulated earnings not previously withdrawn; or
b. 10% of premiums received at least one but less than seven complete policy
years before the date of withdrawal not reduced to take into account any
withdrawals deemed to be made from such premiums.
After the first withdrawal in a policy year, after the first
policy year, the available allowed amount is equal to the sum of:
1 100% of premiums not previously withdrawn and received at least seven complete
policy years before the date of withdrawal; plus
2 accumulated earnings not previously withdrawn.
Your withdrawals will always be made first from your accumulated earnings, and
then from your premiums on a first in first out basis. This is done so that
accumulated earnings may be depleted with the first withdrawal and the 10% of
premiums discussed above is not used in the calculation of the allowed amount.
If an allowed amount is not withdrawn during a policy year, it does not carry
over to the next policy year. However, accumulated earnings, if any, in an
owner's policy value are always available as the allowed amount. No withdrawals
are allowed with regard to premiums made by a check which has not cleared.
Some policy owners may hold policies which, when originally issued, provided for
an allowed amount which was equal to the sum of:
1 all premiums, not previously withdrawn and held more then seven policy years;
plus
2 10% of premiums held between one and seven policy years not reduced by any
withdrawals made by the owner from such premiums.
Under these policies, withdrawals were made first from premiums on a first in
first out basis, then from earnings. The allowed amount applicable to these
policy owners will be determined by whichever formula provides them with the
larger amount available, for full surrenders only, without a contingent deferred
sales load.
In addition, no contingent deferred sales load is assessed:
1 upon annuitization to an option involving life contingencies on or after the
third policy anniversary;
2 on distributions resulting from the death of the owner or annuitant before the
annuity date;
3 upon withdrawals of policy value among the sub-accounts under the systematic
withdrawal option; or
4 in some circumstances, under the automatic payout option.
Any applicable contingent deferred sales load will be deducted from the amount
you, as the contract owner request 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 your 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 to you, the owner,
subject to the prior approval of the New York State Insurance Department. In no
event may this fee 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 you surrender your policy on other than the end
of a policy year, we will deduct the policy fee in full at the time of the
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 or
from the fixed account if there are insufficient funds in the sub-accounts.
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. If monthly
payments, the amount paid per month will be $2.50. This fee will not be changed.
No annuity fee will be deducted from fixed annuity payments.
Transamerica also deducts 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 . This deduction is for 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. The administrative charges do not bear any
relationship to the actual administrative costs of a particular policy. The
administrative expense charge is reflected in the variable accumulation or
variable annuity unit values for each sub-account.
Mortality and Expense Risk Charge
Transamerica imposes a charge called the mortality and expense risk charge to
compensate it for bearing certain mortality and expense risks under the
policies. For assuming these risks, Transamerica makes a daily charge equal to
0.003403% corresponding to an effective annual rate of 1.25% of the value of the
net assets in the variable account. This charge is imposed before the annuity
date and if an annuity purchase amount is applied to a variable payment option,
also after the annuity date. 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 and
to pay death benefits prior to the annuity date. These payments are determined
in accordance with the annuity tables and other provisions contained in the
policy. Thus, as owner, you 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 that may be greater
than the policy value. In this way, we bear 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, we expect 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 you, as the owner are presently or
become a resident of a state where such taxes apply, Transamerica will deduct
applicable premium taxes, including any retaliatory taxes, paid with respect to
a particular policy from the premiums, from amounts withdrawn, or from amounts
applied on the annuity date.
In certain limited circumstances, a broker-dealer or other entity distributing
the policies may elect to pay to Transamerica an amount equal to the premium
taxes that would otherwise be attributable to that entity's customers. In such
cases, Transamerica will not impose a premium tax charge on those policies.
Transfer Fee
A $10 fee is charged for each transfer in excess of 18 in a policy year.
Currently, no fee is charged for automatic asset rebalancing. However, we
reserve the right to impose a nominal fee.
Systematic Withdrawal Option
We reserve 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
you take in equal installments during a policy year. Taxes
Under present laws, Transamerica will incur state or local taxes, in addition to
the premium taxes described above, in several states. No charges are currently
made for taxes other than state premium taxes. However, Transamerica reserves
the right to deduct charges in the future for federal, state and local taxes or
the economic burden resulting from the application of any tax laws that we
determine 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. You can find
a complete description of the fees, expenses, and deductions from the portfolios
in the funds' prospectuses.
Sales in Special Situations
Transamerica may sell the policies in special situations that are expected to
involve reduced expenses for Transamerica. These instances may include:
1 sales in certain group arrangements, such as employee savings plans;
2 sales to current or former officers, directors, employees and their families,
of Transamerica and its affiliates;
3 sales to officers, directors, employees and their families, of the Portfolios'
investment advisers and their affiliates; or
4 sales to officers, directors, employees and sales agents, including registered
representatives and their families, of broker-dealers and other financial
institutions that have sales agreements with Transamerica to sell the policies.
In such situations:
1 the contingent deferred sales load may be reduced or waived;
2 the mortality and expense risk charge or administration charges may be reduced
or waived; or
3 certain amounts may be credited to the policy account value, for example,
amounts related to commissions or sales compensation otherwise payable to a
broker-dealer may be credited to the policy account value.
These reductions in fees or charges or credits to account value will not
unfairly discriminate against any policy owner. These reductions in fees or
charges or credits to account value are generally taxable and treated as
premiums for purposes of income tax and any possible premium tax charge.
ANNUITY PAYMENTS
Annuity Date
Initially, as the owner, you select the annuity date at the time you pay the
initial premium. Thereafter, you may change the annuity date from time to time
by giving notice to the service center, provided that the service center
receives notice of each change at least 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 . The annuity date will be used in
conjunction with to the annuity form and payment option you have selected. The
annuity date will remain effective 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, minus any applicable contingent
deferred sales load and minus 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
which you , as the owner, select results 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.
As the owner, you may choose from the annuity forms below and 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 the
joint or contingent annuitant's age. We 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 will be greater for older annuitants than for younger annuitants.
As the owner, you 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, we 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.
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 you, as owner, do not select an annuity form and payment
option within 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, as the owner, you elect a
combination, you must specify what part of the annuity purchase amount is to be
applied to the fixed and variable payment options. Unless you specify 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 in
accordance with 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. 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 performance 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-accounts 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-accounts 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-accounts is higher than this rate, then the dollar amount of the actual
annuity payments will increase. If the net investment performance exactly equals
the 4% rate, then the dollar amount of the actual annuity payments will remain
constant.
Variable annuity payments will be based on the sub-accounts which you, as the
owner, select, and on the allocations you make among the sub-accounts. For
further details as to the determination of variable annuity payments, see the
Statement of Additional Information.
Annuity Forms
As the contract owner, you may choose any of the annuity forms described below.
Subject to approval by Transamerica, you may also select any other annuity forms
then being offered by Transamerica. You may select among any of the following
contract choices:
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 the annuitant and the contingent
annuitant 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, as the owner, you do not elect to have the commuted value paid in a single
sum after the annuitant's death, you may designate a payee to receive any
remaining payments payable if the annuitant's beneficiary dies before all of the
payments under the period certain have been made.
If the annuitant's beneficiary dies before receiving all of the remaining period
certain payments and a designated payee does not survive the annuitant's
beneficiary for at least 30 days, then the remaining payments will be paid to
the owner, if living, otherwise in a single sum to the owner's estate.
The written request for this form must:
a) state the length of the period certain; and
b) name the annuitant's beneficiary.
4. Joint and Survivor Annuity Payments will be made, 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 as long as the survivor lives. The continued
payments can be in the same amount as the original payments, or in an amount
equal to 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 a qualified policy, you 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.
QUALIFIED POLICIES
The policies may be used to fund rollover IRAs and, with Transamerica's prior
permission, to fund rollover Roth IRAs, contributory IRAs and contributory Roth
IRAs, for use in connection with Section 408 and 408A of the Code. A rollover
IRA is one whose initial purchase payment is from the rollover or transfer of
certain kinds of distributions from a non-Roth IRA, qualified plans, or Section
403(b) tax sheltered annuities. Each must follow the rules set out in the Code
to maintain favorable tax treatment of the rollover IRA. A rollover Roth IRA is
one whose initial purchase payment is from the rollover, transfer or conversion
from non-Roth IRA or Roth IRA. A contributory IRA or contributory Roth IRA are
those whose initial and subsequent purchase payments are subject to limitations
imposed by the Code.
With Transamerica's prior permission, the policy may also be used for various
types of qualified pension and profit sharing plans under Section 401 of the
Code, which permits corporate employers to establish various types of retirement
plans for employees, and as Section 403(b) annuities. Currently, additional
premiums after the initial premium may not be made to policies used as Section
401(a) or Section 403(b) annuities. The tax rules applicable to distribution
from qualified retirement plans, including restrictions on contributions and
benefits, taxation of distributions, and any tax penalties, vary according to
the type of plan and the terms and the conditions of the plan itself.
Various tax penalties may apply to:
a) contributions in excess of specified limits;
b) distributions prior to age 591/2 , subject to certain exceptions;
c) distributions that do not satisfy specified requirements; and
d) certain other transactions subject to qualified plans.
If you are purchasing a policy for use in a qualified plan, you should seek
competent advice regarding the suitability of the proposed plan documents and
the policies to their specific needs. Transamerica reserves the right to decline
to sell the policy to certain qualified plans or terminate the policy if, in
Transamerica's judgment, the policy is not appropriate for the plan.
If a policy is purchased to fund an IRA or Roth IRA, the annuitant must also be
the owner. In addition, under current tax law, minimum distributions are
required from certain qualified policies. The Owner should consult his/her tax
adviser concerning these matters.
The Automatic Payout Option, or APO
Prior to the annuity date, for qualified policy other than Roth IRAs, the owner
may elect the automatic payout option, or APO, to satisfy minimum distribution
requirements under Sections 401(a)(9), 403(b), and 408(b)(3) of the Code with
regard to this policy.
For IRAs and Sep/IRAs, this may be elected no earlier than six months prior to
the calendar year in which the owner attains age 701/2, but payments may not
begin earlier than January of such calendar year. For other qualified policies,
APO can be elected no earlier than six months prior to the later of when the
owner:
a) attains age 70 1/2; and
b) retires from employment.
Additionally, APO withdrawals may not begin before the later of:
a) 30 days after the Policy Date; or
b) the end of the Free Look Period.
APO may be elected in any calendar month, but no later than the month in which
the owner attains age 84. APO withdrawals will be from the sub-accounts and in
the percentage allocations which you, as the owner specify. If no specifications
are made, withdrawals will be pro rata from all sub-accounts with value.
Withdrawals can not be made from a sub-account from which dollar cost averaging
transfers are being made.
Payments will be made annually, and will continue unless terminated by the owner
or automatically terminated by Transamerica as set forth in the policy. Once
terminated, APO may not be elected again.
If only APO withdrawals are made, no contingent deferred sales load will apply,
regardless of the allowed amount. However, if a partial withdrawal is taken,
that partial withdrawal and any subsequent withdrawals that policy year will be
subject to a contingent deferred sales load to the extent they exceed the
allowed amount.
To be eligible for this option, the following conditions must be met:
1 the policy value must be at least $12,000 at the time of election; and
2 the annual withdrawal amount is the larger of the required minimum
distribution under Code Sections 401(a)(9) or 408(b)(3) or $500.
APO allows the required minimum distribution to be paid from the sub-accounts of
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.
If you have more than one qualified plan subject to the Code's minimum
distribution requirements, you must consider all such plans in the calculation
of your minimum distribution requirement, but Transamerica will make
calculations and distribution with regard to this policy only.
Restrictions under Section 403(b) Programs
Certain restrictions apply to annuity contracts used in connection with Internal
Revenue Code Section 403(b) retirement plans. Section 403(b) of the Internal
Revenue Code provides for tax-deferred retirement savings plans for employees of
certain non-profit and educational organizations.
In accordance with the requirements of the Code, Section 403(b) annuities
generally may not permit distribution of:
a) elective contributions made in years beginning after December 31, 1988;
b) earnings on those contributions; or
c) earnings on amounts attributable to elective contributions held as of the end
of the last year beginning before January 1, 1989.
Distributions of such amounts will be allowed only upon death of the employee,
on or after attainment of age 591/2, separation from service, disability, or
financial hardship, except that income attributable to elective contributions
may not be distributed in the case of hardship.
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:
a) on a non-tax qualified basis for use as a non-qualified policy; or
b) purchased and used in connection with plans qualifying for special tax
treatment as a qualified policy.
Qualified policies are designed for use by individuals solely as plans entitled
to special income tax treatment under sections 401, 403(b), 408 and 408A of the
Code.
The ultimate effect of federal income taxes on the amounts held under a policy,
on annuity payments, and on the economic benefit to the owner, the annuitant, or
the beneficiary may depend on the type of retirement plan, and on the tax status
of the individual concerned.
In addition, certain requirements must be satisfied in purchasing a qualified
policy with proceeds from a tax qualified retirement plan and receiving
distributions from a qualified policy in order to continue receiving special tax
treatment. Therefore, if you are considering the purchase of a qualified policy,
you should seek competent legal and tax advice regarding the suitability of the
policy for you situation. You will also need to be aware of 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 also
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.
Premiums
At the time the initial premium is paid, as a prospective purchaser, you must
specify whether you are purchasing a non-qualified policy or a qualified policy.
If the initial premium is derived from an exchange or surrender of another
annuity policy, Transamerica may require that the prospective purchaser provide
information with regard to the federal income tax status of the previous annuity
policy. 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.
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, for example, through 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 non-qualified policy 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 during the taxable year. There are some exceptions to
this rule and a prospective owner that is not a natural person, for example, a
trust, may wish to discuss these with a competent tax adviser.
The following discussion generally applies to policies owned by natural persons.
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. This portion is 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 apply to certain
distributions from a qualified policy.
With respect to non-qualified policies, partial withdrawals, including
withdrawals under the systematic withdrawal option, are generally treated as
taxable income to the extent that the policy value immediately before the
withdrawal exceeds the investment in the contract at that time. Full surrenders
are treated as taxable income to the extent that the amount received exceeds the
investment in the contract.
Annuity Payments
Although the tax consequences may vary depending on the annuity payment elected
under the policy, in general, only the portion of the annuity payment that
represents the amount by which the policy value exceeds the investment in the
contract will be taxed. After the investment in the contract is recovered, the
full amount of any additional annuity payments is taxable. For variable annuity
payments, the taxable portion is generally determined by an equation that
establishes a specific dollar amount of each payment that is not taxed. The
dollar amount is determined by dividing the investment in the contract by the
total number of expected periodic payments. However, the entire distribution
will be taxable once the recipient has recovered the dollar amount of his or her
investment in the contract.
For fixed annuity payments, in general, there is no tax on the portion of each
payment which represents the same ratio that the investment in the contract
bears to the total expected value of the annuity payments for the term of the
payments. However, the remainder of each annuity payment is taxable. Once the
investment in the contract has been fully recovered, the full amount of any
additional annuity payments is taxable. If annuity payments cease as a result of
an annuitant's death before full recovery of the investment in the contract,
consult a competent tax advisor regarding deductibility of the unrecovered
amount.
Withholding
The Code requires Transamerica to withhold federal income tax from distributions
under the policies. However, except for distributions from certain qualified
policies, an owner will be entitled to elect, in writing, not to have tax
withheld. Withholding applies to the portion of a distribution which is
includible in income and subject to federal income tax, where the taxable amount
is at least $200. Some states also require withholding for state income taxes.
The withholding varies according to the type of distribution and the owner's tax
status. "Eligible rollover distributions" from Section 401(a) plans and Section
403(b) tax sheltered annuities are subject to mandatory federal income tax
withholding at the rate of 20%. An eligible rollover distribution is the taxable
portion of any distribution from such a plan, except for certain distributions,
such as minimum required distributions or settlement option payments made in a
specified form. The 20% mandatory withholding does not apply, however, if the
owner chooses a "direct rollover" from the plan to another tax-qualified plan or
to an IRA, other than a Roth IRA. The federal income tax withholding rate for a
distribution that is not an eligible rollover distribution is 10% of the taxable
amount of the distribution.
Penalty Tax
In the case of a distribution pursuant to a non-qualified policy, a federal
income tax penalty that equals 10% of the amount treated as taxable income may
be imposed. 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
joint owner
Other tax penalties may apply to certain distributions under a qualified policy.
Taxation of Death Benefit Proceeds
Amounts may be distributed from the policy because of the death of an owner or
the annuitant. Generally such amounts are includible in income as follows:
1. if distributed in a lump sum, they are taxed in the same manner as a full
surrender, as described above; or
2. if distributed under an annuity option, they are taxed in the same manner as
annuity payments, as described above.
For these purposes, the investment in the policy is not affected by the owner's
or annuitant's death. That is, the investment in the policy remains the amount
of any premiums paid which were not excluded from gross income. Other rules
relating to distributions at death apply to qualified policies. You should
consult your legal counsel and tax adviser regarding these rules and their
impact on qualified policies.
Required Distributions upon Owner's Death
Notwithstanding any provision of the policy or this prospectus to the contrary,
no payment of benefits provided under the policy will be allowed that does not
satisfy the requirements of Section 72(s) of the Code. If the owner dies before
the annuity date, the death benefit payable to the owner's beneficiary will be
distributed as follows:
a) the death benefit must be completely distributed within five years of the
owner's date of death; or
b) the owner's beneficiary may elect, within the one year period after the
owner's date of death, to receive the death benefit in the form of an annuity
from us.
Please note that Item b) is based on the following provisions:
1. the annuity must be distributed in substantially equal installments over the
life of the owner's beneficiary or over a period not extending beyond the life
expectancy of the owner's beneficiary; and
2. the distributions must not begin not later than one year after the owner's
date of death.
Notwithstanding items a) and b) above, if the sole owner's beneficiary is the
deceased owner's surviving spouse, then the surviving spouse may elect, within
the one year period after the owner's date of death, to continue the policy
under the same terms as before the owner's death.
Upon receipt of such election from the spouse, in a form and manner acceptable
to us, at our service office:
1. all rights of the spouse as owner's beneficiary under the policy in effect
prior to such election will cease;
2. the spouse will become the owner of the policy and will also be treated as
the contingent annuitant, if none has been named and only if the deceased owner
was the annuitant; and
3. all rights and privileges granted by the policy or allowed by Transamerica
will belong to the spouse as owner of the policy.
This election will be deemed to have been made by the spouse if such spouse
makes a premium payment to the policy or fails to make a timely election as
described in this paragraph. If the owner's beneficiary is a nonspouse, the
distribution provisions described in subparagraphs a. and b. above, will apply
even if the annuitant and/or contingent annuitant are alive at the time of the
owner's death. If the nonspouse owner's beneficiary is not an individual, then
only a cash payment will be paid.
If no election is received by us from a nonspouse owner's beneficiary within the
one year period after the owner's date of death, then we will pay the death
benefit to the owner's beneficiary in a cash payment. The death benefit will be
determined as of the date we make the cash payment. Such cash payment will be in
full settlement of all our liability under the policy.
If Annuitant Dies After Annuity Starts - If the annuitant dies after the annuity
starts, any benefit payable will be distributed at least as rapidly as under the
annuity form then in effect.
If Owner Dies After Annuity Starts - If the owner dies after the annuity starts,
any benefit payable will continue to be distributed at least as rapidly as under
the annuity form then in effect. All of the owner's rights granted under the
policy or allowed by us will pass to the owner's beneficiary.
Joint Ownership - For purposes of this section, if the policy has joint owners
we will consider the date of death of the first joint owner as the death of the
owner and the surviving joint owner will become the owner of the policy.
Transfers, Assignments, or Exchanges of the Policy
A transfer of ownership of a non-qualified 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.
If, as an owner, you are contemplating any such designation, transfer,
assignment, or exchange, you should contact a competent tax adviser with respect
to the potential tax effects of such a transaction. Certain qualified policies
cannot be transferred or assigned, except as permitted by the Code or the
Employee Retirement Income Security Act of 1974, also referred to simply as
ERISA.
Multiple Policies
All deferred non-qualified annuity policies that are issued by Transamerica, or
its affiliates, to the same owner during any calendar year are treated as one
annuity policy 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 policies or otherwise.
Congress has also indicated that the Treasury Department may have authority to
treat the combination purchase of an immediate annuity policy and separate
deferred annuity policies as a single annuity policy under its general authority
to prescribe rules as may be necessary to enforce the income tax laws.
QUALIFIED POLICIES
In General
The qualified policy is designed for use as a rollover IRA. With Transamerica's
prior permission, the policy may also be used as a rollover Roth IRA, a
contributory IRA, or as a contributory Roth IRA, as a Section 403(b) annuity,
and for use in qualified pension and profit sharing plans established by
corporate employers.
The tax rules applicable to participants and beneficiaries in retirement plans
vary according to the type of plan and the terms and conditions of the plan.
Special favorable tax treatment may be available for certain types of
contributions and distributions. Adverse tax consequences may result from:
* contributions in excess of specified limits;
* distributions prior to age 591/2, subject to certain exceptions;
* distributions that do not conform to specified commencement and minimum
distribution rules; and
* other specified circumstances.
We make no attempt to provide more than general information about use of the
policies with the various types of retirement plans. Owners and participants
under retirement plans as well as annuitants and beneficiaries are cautioned
that the rights of any person to any benefits under qualified policies may be
subject to the terms and conditions of the plans themselves, regardless of the
terms and conditions of the policy issued in connection with such a plan.
Some retirement plans are subject to distribution and other requirements that
are not incorporated in the administration of the policies. Owners are
responsible for determining that contributions, distributions and other
transactions with respect to the policies satisfy applicable law. Purchasers of
policies for use with any retirement plan should consult their legal counsel and
tax adviser regarding the suitability of the policy.
For qualified plans under Section 401(a), 403(a) and 403(b), the Code requires
that distributions generally must commence no later than the later of April 1 of
the calendar year following the calendar year in which the owner or plan
participant:
1. reaches age 70 1/2; or
2. retires
These distributions must be made in a specified form and manner. If the plan
participant is a "5 percent owner" as defined in the Code, distributions
generally must begin no later than April 1 of the calendar year following the
calendar year in which the owner, or plan participant reaches, age 70 1/2. For
IRAs described in Section 408, distributions generally must commence no later
than the later of April 1 of the calendar year following the calendar year in
which the owner, or plan participant, reaches age 70 1/2. Roth IRAs under
Section 408A do not require distributions at any time prior to the owner's
death.
Qualified Pension and Profit Sharing Plans
Section 401(a) of the Code permits employers to establish various types of
retirement plans for employees. Such retirement plans may permit the purchase of
the policy in order to provide retirement savings under the plans. The
Self-Employed Individuals' Tax Retirement Act of 1962, as amended, commonly
referred to as H.R. 10, also permits self-employed individuals to establish
qualified plans for themselves and their employees.
Adverse tax consequences to the plan, to the participant, or to both, may result
if this policy is assigned or transferred to any individual as a means to
provide benefits payments. Purchasers of a policy for use with such plans should
seek competent advice regarding the suitability of the proposed plan documents
and the policy to their specific needs. The policy is designed to invest
retirement savings and not to distribute retirement benefits.
Individual Retirement Annuities, Simplified Employee Plans and Roth IRAs
The policies are designed for use with rollover IRAs and contributory IRAs. A
contributory IRA is a policy in which initial and subsequent purchase payments
are subject to limitations imposed by the Code. 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
qualified plans may be rolled over, or transferred on a tax-deferred basis into
an IRA.
Earnings in an IRA are not taxed until distributed. IRA contributions are
limited each year to the lesser of $2,000 or 100% of the owner's compensation.
This includes earned income as defined in Code Section 401(c)(2) and may be
deductible in whole or in part depending on the individual's adjusted gross
income and whether or not the individual is considered an active participant in
a qualified plan. The limit on the amount contributed to an IRA does not apply
to distributions from certain other types of qualified plans that are rolled
over or transferred on a tax-deferred basis into an IRA.
Other than nondeductible contributions, amounts in the IRA are taxed when
distributed from the IRA. Distributions prior to age 59 1/2 are subject to a 10%
penalty tax, unless certain exceptions apply. Purchasers should seek competent
advice as to the suitability of the policy for use with IRAs.
Eligible employers that meet specified criteria under Code Section 408(k) could
establish simplified employee pension plans, also referred to as SEP-IRAs, for
their employees using IRAs. Employer contributions that may be made to such
plans are larger than the amounts that may be contributed to regular IRAs, and
may be deductible to the employer. SEP-IRAs are subject to certain Code
requirements regarding participation and amounts of contributions.
The Policies may also be used with rollover Roth IRAs and contributory Roth
IRAs. A contributory Roth IRA is a policy to which initial and subsequent
purchase payments are subject to limitations imposed by the Code. Section 408A
of the Code permits eligible individuals to contribute to an individual
retirement program known as a Roth IRA on a non-deductible basis. In addition,
distributions from a Section 408 IRA may be converted to a Roth IRA.
A Section 408 IRA is an IRA described in Sections 408(a) or 408(b), other than a
Roth IRA. You should consult a tax adviser before combining any converted
amounts with any other Roth IRA contributions, including any other conversion
amounts from other tax years.
Distributions from a Roth IRA generally are not taxed, except that, once total
distributions exceed contributions to the Roth IRA, income tax and a 10% penalty
tax may apply to distributions made:
1. before age 59 1/2, subject to certain exceptions; or
2. during the five taxable years starting with the year in which the first
contribution is made to the Roth IRA.
Purchasers should seek competent advice as to the suitability of the policy for
use with Roth IRAs.The sale of a policy for use with an IRA, SEP-IRA or Roth IRA
may be subject to special disclosure requirements of the Internal Revenue
Service. Purchasers of these policies 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, SEP-IRA or Roth IRA or
their purchase.
Tax Sheltered Annuities
Under Code Section 403(b), payments made by public school systems and certain
tax exempt organizations to purchase annuity contracts for their employees are
excludable from the gross income of the employee, subject to certain
limitations. However, these payments may be subject to Social Security and
Medicare taxes, which are also referred to as FICA taxes.
Code Section 403(b)(11) restricts the distribution under Code Section 403(b)
annuity contracts of:
* elective contributions made in years beginning after December 31, 1988;
* earnings on those contributions; or
* earnings in such years on amounts held as of the last year beginning before
January 1, 1989.
Distribution of those amounts may only occur upon death of the employee,
attainment of age 591/2, separation from service, disability, or financial
hardship. In addition, income attributable to elective contributions may not be
distributed in the case of hardship.
Pre-1989 contributions and earnings through December 31, 1989 are not subject to
the restrictions described above. However, funds transferred to a qualified
policy from a Section 403(b)(7) custodial account will be subject to the
restrictions.
Restrictions under Qualified Policies
Other restrictions with respect to the election, commencement, or distribution
of benefits may apply under qualified policies or under the terms of the plans
in respect of which qualified policies are issued. A qualified policy will be
amended as necessary to conform to the requirements of the Code.
Possible Changes in Taxation
Legislation has been proposed in 1998 that, if enacted, would adversely modify
the federal taxation of certain insurance and annuity policies. For example, one
proposal would tax transfers among investment options and tax exchanges
involving variable policies. A second proposal would reduce the "investment in
the policy" under cash value life insurance and certain annuity policies by
certain amounts, thereby increasing the amount of income for purposes of
computing gain. Although the likelihood of there being any changes is uncertain,
there is always the possibility that the tax treatment of the policies could be
changed by legislation or other means. Moreover, it is also possible that any
change could be retroactive, that is, effective prior to the date of the change.
You should consult a tax adviser with respect to legislative developments and
their effect on the policy.
Other Tax Consequences
As noted above, the foregoing discussion of the federal income tax consequences
is not exhaustive and special rules are provided with respect to other tax
situations not discussed in this prospectus. Further, the federal income tax
consequences discussed herein reflect Transamerica's understanding of current
law and the law may change. Federal gift and estate tax consequences and state
and local estate, inheritance, and other tax consequences of ownership or
receipt of distributions under the policy depend on the individual circumstances
of each owner or recipient of the distribution. A competent tax adviser should
be consulted for further information.
DISTRIBUTION OF THE POLICY
Transamerica Securities Sales Corporation, also referred to as 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., also known as the NASD. Its
principal offices are located at 1150 South Olive, Los Angeles, California
90015. Transamerica pays TSSC for acting as the principal underwriter under a
distribution agreement.
TSSC has entered into sales agreements with other broker/dealers to solicit
applications for the policies through registered representatives who are
licensed to sell securities and variable insurance products. These agreements
provide that applications for the policies may be solicited by registered
representatives of the broker/dealers appointed by Transamerica to sell its
variable life insurance and variable annuities. These broker/dealers are
registered with the Commission and are members of the NASD. The registered
representatives are authorized under applicable state regulations to sell
variable life insurance and variable annuities.
Under the agreements, applications for policies will be sold by broker/dealers
which will generally receive compensation of up to 6.25% of any Initial and
additional Premiums paid, although higher amounts may be paid in certain
circumstances. Additional amounts, including asset based trail commissions, may
be paid in certain circumstances.
Transamerica Financial Resources, Inc. , referred to as 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.
PREPARING FOR YEAR 2000
As a result of computer systems that may recognize a date of 12/31/00 as the
year 1900 rather than the year 2000, disruptions of business activities may
occur with the year 2000. In response, Transamerica established in 1997 a "Y2K"
committee to address this issue. With regard to the systems and software which
administer and affect the policies, Transamerica has determined that its own
internal systems will be Year 2000 compliant. Additionally, Transamerica
requires any third party vendor which supplies software or administrative
services to Transamerica in connection with the administration of the policies,
to certify that the software or services will be Year 2000 compliant.
In determining the variable accumulation unit values for each variable
sub-account, Transamerica is reliant upon information received from the
portfolios and is confirming that Year 2000 issues will not interfere with this
flow of information. As of the date of this prospectus, it is not anticipated
that policy owners will experience negative affects on their investment, or on
the services received in connection with their policies, as a result of Year
2000 issues. However, especially when taking into account interaction with other
systems, it is difficult to predict with precision that there will be no
disruption of services in connection with the year 2000.
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
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 for each of the three years ended December 31, 1998
appearing in the Statement of Additional Information have been audited by Ernst
& Young LLP, Independent Auditors, as set forth in their reports thereon
appearing elsewhere herein. They are included in reliance upon such reports
given upon the authority of such firm experts in accounting and auditing.
VOTING RIGHTS
To the extent required by applicable law, all portfolio shares held in the
variable account will be voted by Transamerica at regular and special
shareholder meetings of the respective funds in accordance with instructions
received from persons having voting interests in the corresponding sub-account.
If, however, the 1940 Act or any regulation thereunder should be amended, or if
the present interpretation thereof should change, or if Transamerica determines
that it is allowed to vote all portfolio shares in its own right, Transamerica
may elect to do so.
The person with the voting interest is the owner. The number of votes which are
available to an owner will be calculated separately for each sub-account of the
variable account. Before the annuity date, that number will be determined by
applying his or her percentage interest, if any, in a particular sub-account to
the total number of votes attributable to that sub-account. The owner holds a
voting interest in each sub-account to which the policy value is allocated.
After the annuity date, the number of votes decreases as annuity payments are
made and as the reserves for the policy decrease.
The number of votes of a portfolio will be determined as of the date coincident
with the date established by that portfolio for determining shareholders
eligible to vote at the meeting of the funds. Voting instructions will be
solicited by written communication prior to such meeting in accordance with
procedures established by the respective funds.
Shares as to which no timely instructions are received and shares held by
Transamerica as to which owners have no beneficial interest will be voted in
proportion to the voting instructions which are received with respect to all
policies participating in the sub-account. Voting instructions to abstain on any
item to be voted upon will be applied on a pro rata basis to reduce the votes
eligible to be cast.
Each person or entity having a voting interest in a sub-account will receive
proxy material, reports and other material relating to the appropriate
portfolio. It should be noted that the funds are not required to, and do not
intend to, hold annual or other regular meetings of shareholders.
AVAILABLE INFORMATION
Transamerica has filed a 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.
Appendix A
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
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 (page 22)
3
Dollar Cost Averaging (page 25)
3
Net Investment Factor (page 24)
3
Annuity Period (page 33)
3
Variable Annuity Units and Payments
3
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
4
Assignment
4
Annuity Data
5
Annual Report
5
Incontestability
5
Ownership
5
Entire Policy
5
Changes In the Policy
5
Protection of Benefits
5
Delay of Payments
5
Notices and Directions
6
Calculations of Yields and Total Returns (page 16)
6
Money Market Sub-Account Yield Calculations
6
Other Sub-Account Yield Calculations
6
Standard Total Return Calculations
7
Hypothetical Performance Data
8
Other Performance Data
8
Historic Performance Data
8
General Limitations
8
Sub-Account Performance Figures
8
Hypothetical Sub-Account Performance Figures
8
Federal Tax Matters (page 35)
10
Taxation of Transamerica
10
Tax Status of the Policies
11
Distribution of the Policy (page 37) 11 Safekeeping of Account Assets (page 18)
12 Transamerica (page 18) 12 General Information and History 12 State Regulation
(Page 18) 12 Records and Reports 12 Financial Statements 12 Appendix 13 Annuity
Transfer Formula 13
Appendix B
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, which is 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 policy.
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).
Appendix C
DEFINITIONS
Active Sub-Account: A sub-account of the variable account in which the policy
has current value.
Annuitant: The person: (a) whose life is used to determine the amount of monthly
annuity payments on the annuity date; and (b) who is the payee designated to
receive monthly annuity payments, unless such payee is changed by the owner. The
annuitant cannot be changed after the policy has been issued, except upon the
annuitant's death prior to the annuity date if a contingent annuitant has
previously been named. In the case of a qualified policy used to fund an IRA or
a 403(b) annuity, the owner must be the annuitant.
Annuitant's Beneficiary: The person or persons named by the owner who may
receive the death benefit under the policy, if: (a) the annuitant is not the
owner, there is no named contingent annuitant and the annuitant dies before the
annuity date and before the death of the owner or owners; 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 and the
annuity date occurs on or after the third policy anniversary.
Annuity Year: A one-year period starting on the annuity date and, after that,
each succeeding one-year period.
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. The contingent annuitant may be changed at any
time by the owner while the annuitant is living and before the annuity date.
Fixed Account: All or portions of net premiums and transfers may be allocated to
the fixed account. The fixed account assets are general assets of the company
and are distinguishable from those allocated to a separate account of the
company.
Fixed Accumulated Value: The total dollar amount of all amounts held under the
fixed account for the policy prior to the annuity date. The fixed accumulated
value prior to the annuity date is equal to: (a) net premiums allocated to the
fixed account plus interest credited; less (b) reductions for the annual policy
fee deducted on the last business day of each policy year; plus or minus (c)
amounts transferred to or from the variable sub-accounts; less (d) any
applicable transfer fees; and less (e) withdrawals from fixed account.
Fixed Annuity: An annuity with predetermined payment amounts.
Free Look Period: The period of time, currently 10 days, beginning when the
owner has received the policy, during which the owner has the right to cancel
the policy.
Funds: Dreyfus Variable Investment Fund, Dreyfus Stock Index Fund, The Dreyfus
Socially Responsible Growth Fund, Inc., Dreyfus Investment Portfolios and
Transamerica Variable Insurance Fund, Inc., in which the variable account
currently invests.
Inactive Sub-Account: A sub-account of the variable account in which the policy
has a zero balance.
Net Investment Factor: An index that measures the investment performance of a
sub-account from one valuation period to the next.
Net Premium: A premium reduced by any applicable premium tax, including
retaliatory premium taxes.
Non-Qualified Policy: A policy other than a qualified policy.
Owner or Joint Owners: The person or persons who, while living, control all
rights and benefits under the policy. Joint owners own the policy equally with
the right of survivorship. The right of survivorship means that if a joint owner
dies, his or her interest in the policy will pass to the surviving joint owner
in accordance with the death benefit provision. 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 sum of the fixed accumulated value plus the variable
accumulated value.
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 or any
one of the portfolios of Dreyfus Investment Portfolios or the Growth Portfolio
of Transamerica Variable Insurance Fund, Inc., 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 issued in connection with a retirement plan or
program.
Receipt: Receipt and acceptance by Transamerica at its service center.
Series: Any of the portfolios of Dreyfus Variable Investment Fund available for
investment by a sub-account under the policy.
Service Center: Transamerica's Annuity Service Center, at P.O. Box 31728,
Charlotte, North Carolina 28231-1728 and at telephone (800) 258-4261.
Source Account: A sub-account of the variable account or the fixed account, as
permitted, from which dollar cost averaging transfers are being made.
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.
Valuation Period: The time interval between the closing of the New York Stock
Exchange on consecutive valuation days.
Variable Account: Separate Account VA-2LNY, a separate account established and
maintained by Transamerica for the investment of a portion of its assets
pursuant to Section 4240 of the New York Insurance Law and Regulation 47, part
50. The variable account contains several sub-accounts to which all or portions
of net premiums and transfers may be allocated.
Variable Accumulated Value: The total dollar amount of all variable accumulation
units under each sub-account of the variable account held for the policy prior
to the annuity date. The variable accumulated value prior to the annuity date is
equal to: (a) net premiums allocated to the sub-accounts; plus or minus (b) any
increase or decrease in the value of assets of the sub-accounts due to
investment results; less (c) the daily mortality and expense risk charge; less
(d) the daily administrative expense charge; less (e) reductions for the annual
policy fee deducted on the last business day of each policy year; plus or minus
(f) amounts transferred to or from the fixed account; less (g) any applicable
transfer fees; and less (h) withdrawals from the sub-accounts.
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. Withdrawals:
Refers to partial withdrawals, full surrenders, and systematic withdrawals that
are paid in cash to the owner, person or persons specified by 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.
Appendix D
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 the period from commencement of business operations of the sub-account
through December 31, 1998. 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 Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
(Inception 1/4/93) (Inception 1/4/93) (Inception 1/4/93) (Inception 1/4/93) (Inception 1/4/93)
Accumulation Unit Value
<S> <C> <C> <C> <C> <C>
at Beginning of Period $1.021 $12.797 $13.225 $12.310 $39.620
Accumulation Unit Value
at End of Period $1.018 $12.861 $13.373 $12.445 $37.702
Number of Accumulation
Units Outstanding
at End of Period 2,678,280.492 167,686.797 137,252.898 86,752.856 138,557.449
Capital Appreciation Stock Index Socially Responsible
Sub-Account Sub-Account Sub-Account
(Inception- (Inception (Inception-
4/5/93 1/4/93 10/7/93
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
Year Ending December 31, 1994
- ---------------------------------------------------------------------------------------------------------
Money Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
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 8,547,165.659 820,985.237 203,164.533 164,657.770 612,327.237
Capital Appreciation Stock Index Socially Responsible
Sub-Account Sub-Account Sub-Account
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 285,265.910 190,496.642 24,171.591
Year Ending December 31, 1995
- ------------------------------------------------------------------------------------------------------------
Money Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $1.048 $12.496 $12.672 $11.710 $40.064
Accumulation Unit Value
at End of Period $1.093 $12.292 $14.740 $13.908 $51.121
Number of Accumulation
Units Outstanding
at End of Period 9,084,943.487 666,488.480 351,788.006 454,139.991 817,445.023
Growth and Income International Equity
Sub-Account Sub-Account
Capital Appreciation Stock Index Socially Responsible (Inception (Inception
Sub-Account Sub-Account Sub-Account 1/5/95) 1/5/95)
Accumulation Unit Value
at Beginning of Period $13.373 $16.437 $13.377 $12.235 $12.024
Accumulation Unit Value
at End of Period $17.610 $22.172 $17.752 $19.426 $12.964
Number of Accumulation
Units Outstanding
at End of Period 587,928.246 365,482.688 49,020.846 734,393.096 61,152.467
Year Ending December 31, 1996
- ---------------------------------------------------------------------------------------------------------
Money Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $1.093 $12.292 $14.740 $13.908 $51.121
Accumulation Unit Value
at End of Period $1.132 $11.682 $14.911 $14.142 $58.773
Number of Accumulation
Units Outstanding
at End of Period 10,392,468.634 489,733.637 396,886.829 664,469.782 1,000,594.786
International
Capital Appreciation Stock Index Socially Responsible Growth and Income Equity
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $17.610 $22.172 $17.752 $19.426 $12.964
Accumulation Unit Value
at End of Period $21.802 $26.791 $21.221 $23.131 $14.267
Number of Accumulation
Units Outstanding
at End of Period 1,074,614.761 585,454.420 103,732.717 1,906,011.179 226,976.242
International Value Disciplined Stock Small Company Stock
Sub-Account Sub-Account Sub-Account
(Inception 5/1/96) (Inception 5/1/96) (Incepiton 5/1/96)
Accumulation Unit Value
at Beginning of Period $10.00 $10.00 $10.00
Accumulation Unit Value
at End of Period $10.244 $11.776 $10.772
Number of Accumulation
Units Outstanding
at End of Period 47,815.855 381,884.114 212,878.654
Year Ending December 31, 1997
- ---------------------------------------------------------------------------------------------------------
Money Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $1.132 $11.682 $14.911 $14.142 $58.773
Accumulation Unit Value
at End of Period $1.175 $14.185 $15.736 $15.260 $67.668
Number of Accumulation
Units Outstanding
at End of Period 12,049,327.817 1,017,390.458 424,325.816 987,773.886 1,031,483.594
International
Capital Appreciation Stock Index Socially Responsible Growth and Income Equity
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $21.802 $26.791 $21.221 $23.131 $14.267
Accumulation Unit Value
at End of Period $27.532 $35.128 $26.879 $26.509 $15.422
Number of Accumulation
Units Outstanding
at End of Period 1,798,913.636 808,857.987 230,281.724 2,179,109.968 378,355.293
Limited Term
High Income Balanced
International Value Disciplined Stock Small Company Stock Sub-Account Sub-Account
Sub-Account Sub-Account Sub-Account (Inception 5/1/97) (Inception 5/1/97)
Accumulation Unit Value
at Beginning of Period $10.244 $11.776 $10.772 $10.000 $10.000
Accumulation Unit Value
at End of Period $10.982 $15.272 $12.935 $10.852 $11.738
Number of Accumulation
Units Outstanding
at End of Period 172,941.244 1,196,912.676 513,524.112 473,373.863 333,714.857
Year Ending December 31, 1998
- ---------------------------------------------------------------------------------------------------------
Money Special Zero Coupon Quality
Market Value 2000 Bond Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $1.132 $11.682 $14.911 $14.142 $58.773
Accumulation Unit Value
at End of Period $1.175 $14.185 $15.736 $15.260 $67.668
Number of Accumulation
Units Outstanding
at End of Period 12,049,327.817 1,017,390.458 424,325.816 987,773.886 1,031,483.594
International
Capital Appreciation Stock Index Socially Responsible Growth and Income Equity
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $21.802 $26.791 $21.221 $23.131 $14.267
Accumulation Unit Value
at End of Period $27.532 $35.128 $26.879 $26.509 $15.422
Number of Accumulation
Units Outstanding
at End of Period 1,798,913.636 808,857.987 230,281.724 2,179,109.968 378,355.293
Limited Term
High Income Balanced
International Value Disciplined Stock Small Company Stock Sub-Account Sub-Account
Sub-Account Sub-Account Sub-Account (Inception 5/1/97) (Inception 5/1/97)
Accumulation Unit Value
at Beginning of Period $10.244 $11.776 $10.772 $10.000 $10.000
Accumulation Unit Value
at End of Period $10.982 $15.272 $12.935 $10.852 $11.738
Number of Accumulation
Units Outstanding
at End of Period 172,941.244 1,196,912.676 513,524.112 473,373.863 333,714.857
Transamerica Growth Cash Value MidCap Stock
Sub-Account Sub-Account Sub-Account
Accumulation Unit Value
at Beginning of Period $10.244 $11.776 $10.772
Accumulation Unit Value
at End of Period $10.982 $15.272 $12.935
Number of Accumulation
Units Outstanding
at End of Period 172,941.244 1,196,912.676 513,524.112
</TABLE>
Financial Statements for the Variable Account and Transamerica
The financial statements and reports of independent auditors for the
variable account and Transamerica are contained in the Statement of Additional
Information.
<PAGE>
2
STATEMENT OF ADDITIONAL INFORMATION FOR
DREYFUS/TRANSAMERICA TRIPLE ADVANTAGE
VARIABLE ANNUITY POLICY
Issued By
Transamerica Life Insurance Company of New York
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 Transamerica Life Insurance Company of New
York (formerly called First Transamerica Life Insurance Company). The Owner may
obtain a copy of the Prospectus dated May 1, 1999, as supplemented from time to
time, by writing to Transamerica Life Insurance Company of New York, Annuity
Service Center, P.O. Box 31728, Charlotte, North Carolina 28231-1728 or by
calling 800-258-4261. Terms used in the current Prospectus for the Policy are
incorporated in this Statement. THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT
A PROSPECTUS AND SHOULD BE READ ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE
POLICY.
Dated May 1, 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
<S> <C> <C>
THE POLICY (page 22)......................................................................................................3
DOLLAR COST AVERAGING (page 25)...........................................................................................3
NET INVESTMENT FACTOR (page 24)...........................................................................................3
ANNUITY PERIOD (page 33)..................................................................................................3
Variable Annuity Units and Payments..............................................................................3
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.......................................................................................4
Assignment.......................................................................................................4
Annuity Data.....................................................................................................5
Annual Report....................................................................................................5
Incontestability.................................................................................................5
Ownership........................................................................................................5
Entire Policy....................................................................................................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 16).........................................................................6
Money Market Sub-Account Yield Calculation.......................................................................6
Other Sub-Account Yield Calculations.............................................................................6
Standard Total Return Calculations...............................................................................7
Hypothetical Performance Data....................................................................................8
Other Performance Data...........................................................................................8
HISTORIC PERFORMANCE DATA.................................................................................................8
General Limitations..............................................................................................8
Sub-Account Performance Figures..................................................................................8
Hypothetical Sub-Account Performance Figures.....................................................................8
FEDERAL TAX MATTERS (page 35)............................................................................................10
Taxation of Transamerica........................................................................................10
Tax Status of the Policies......................................................................................11
DISTRIBUTION OF THE POLICY (page 37).....................................................................................11
SAFEKEEPING OF ACCOUNT ASSETS (page 18)..................................................................................12
TRANSAMERICA (page 18)...................................................................................................12
General Information and History.................................................................................12
STATE REGULATION (page 18)...............................................................................................12
RECORDS AND REPORTS......................................................................................................12
FINANCIAL STATEMENTS.....................................................................................................12
APPENDIX.................................................................................................................13
Annuity Transfer Formula........................................................................................13
</TABLE>
(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 $500. 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 $500; 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 $500;
or (c) submit an additional Premium to make the value
of the Sub-Account equal to or greater than $500; or
(d) transfer the entire value of the receiving
Sub-Account(s) back into the Source 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 Source Accountfrom 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 free
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 "ex-dividend" 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. 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)
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 24 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
The Policy is intended to qualify as an annuity contract for
federal income tax purposes. All provisions in the Policy will be
interpreted to maintain such tax qualification. We may make changes in
order to maintain this qualification or to conform to the Policy to any
applicable changes in the tax qualification requirements. We will
provide you with a copy of any changes made to the Policy. 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 10.)
Non-Participating
The Policies are non-participating. No dividends are payable
and the Policies will not share in the profits or surplus earnings of
Transamerica.
Misstatement of Age or Sex
If the age or sex of the Annuitant or any other measuring life
has been misstated in the application, the Annuity Payments under the
Policy will be whatever the Annuity Purchase Amount applied on the
Annuity Date would purchase on the basis of the correct age or sex of
the Annuitant and/or other measuring life. Any overpayments or
underpayments by Transamerica as a result of any such misstatement may
be respectively charged against or credited to the Annuity Payment or
Annuity Payments to be made after the correction so as to adjust for
such overpayment or underpayment.
Proof of Existence and Age
Before making any payment under the Policy, Transamerica may
require proof of the existence and/or proof of the age of the Annuitant
or any other measuring life, or any other information deemed necessary
in order to provide benefits under the Policy.
Assignment
No assignment of a Policy will be binding on Transamerica
unless made in writing and given to Transamerica at its ServiceCenter.
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. 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(s) will be entitled to the rights granted by
the Policy, or allowed by Transamerica under the Policy. If an Owner
dies, the rights of the Owner belong to the estate of the Owner unless
the Owner has previously named an Owner's Beneficiary. A surviving
Joint Owner automatically becomes the Owner's Beneficiary.
Entire Policy
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 Policy. All statements
made by the Owner are considered representations and not warranties.
Transamerica will not use any statement in defense of a claim unless it
is made in the application and a copy of the application is attached to
the Policy when issued.
Changes in the Policy
Only two authorized officers of Transamerica, acting together,
have the authority to bind Transamerica or to make any change in the
Policy and then only in writing. Transamerica will not be bound by any
promise or representation made by any other persons.
Transamerica may not change or amend the Policy, except as
expressly provided in the Policy, without the Owner's consent. However,
Transamerica may change or amend the Policy if such change or amendment
is necessary for the Policy to comply with any state or federal law,
rule or regulation.
Protection of Benefits
To the extent permitted by law, no benefit (including death
benefits) under the Policy will be subject to any claim or process of
law by any creditor.
Delay of Payments
Payment of any cash withdrawal or lump sum death benefit due
from the Variable Account will occur within seven days from the date
the election becomes effective, except that Transamerica may be
permitted to postpone such payment if: (1) the New York Stock Exchange
is closed for other than usual weekends or holidays, or trading on the
Exchange is otherwise restricted; or (2) an emergency exists as defined
by the Securities and Exchange Commission (Commission), or the
Commission requires that trading be restricted; or (3) the Commission
permits a delay for the protection of Owners.
In addition, while it is our intention to process all
transfers from the Sub-Accounts immediately upon receipt of a transfer
request, the Policy gives us the right to delay effecting a transfer
from a Sub-Account for up to seven days, but only in certain limited
circumstances. However, the staff of the Commission currently
interprets the Investment Company Act of 1940 to require the immediate
processing of all transfers, and in compliance with that interpretation
we will process all transfers immediately unless and until the
Commission or its staff changes its interpretation or otherwise permits
us to exercise this right. Subject to such approval, we may delay
effecting such a transfer only if there is a delay of payment from an
affected Portfolio. If this happens, and if the prior approval of the
Commission or its staff is obtained, then we will calculate the dollar
value or number of units involved in the transfer from a Sub-Account on
or as of the date we receive a written transfer request, but will not
process the transfer to the transferee Sub-Account until a later date
during the seven-day delay period when the Portfolio underlying the
transferring Sub-Account obtains liquidity to fund the transfer request
through sales of portfolio securities, new Premiums, transfers by
investors or otherwise. During this period, the amount transferred
would not be invested in a Sub-Account.
Transamerica may delay payment of any withdrawal from the
Fixed Account for a period of not more than six months after
Transamerica receives the request for such withdrawal. If Transamerica
delays payment for more than 30 days, Transamerica will pay interest on
the withdrawal amount up to the date of payment. (See "Cash
Withdrawals" page 24 of the Prospectus.)
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 ServiceCenter.
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 and income other than investment income at the beginning of
such seven-day period, dividing such net change in Policy Value by the
value of the account at the beginning of the period to determine the
base period return and annualizing this quotient on a 365-day basis.
The net change in Policy Value reflects the deductions for the annual
Policy Fee, the Mortality and Expense Risk Charges and Administrative
Expense Charges and income and expenses accrued during the period.
Because of these deductions, the yield for the Money Market Sub-Account
of the Variable Account will be lower than the yield for the Money
Market Portfolio or any comparable substitute funding vehicle.
The Commission also permits Transamerica to disclose the
effective yield of the Money Market Sub-Account for the same seven-day
period, determined on a compounded basis. The effective yield is
calculated by compounding the unannualized base period return by adding
one to the base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result.
The yield on amounts held in the Money Market Sub-Account
normally will fluctuate on a daily basis. Therefore, the disclosed
yield for any given past period is not an indication or representation
of future yields or rates of return. The Money Market Sub-Account's
actual yield is affected by changes in interest rates on money market
securities, average portfolio maturity of the Money Market Portfolio or
substitute funding vehicle, the types and quality of portfolio
securities held by the Money Market Portfolio or substitute funding
vehicle, and operating expenses. In addition, the yield figures do not
reflect the effect of any Contingent Deferred Sales Load (of up to 6%
of Premiums) that may be applicable to a Policy.
Other Sub-Account Yield Calculations
Transamerica may from time to time disclose the current
annualized yield of one or more of the Sub-Accounts (except the Money
Market Sub-Account) for 30-day periods. The annualized yield of a
Sub-Account refers to the income generated by the Sub-Account over a
specified 30-day period. Because this yield is annualized, the yield
generated by a Sub-Account during the 30-day period is assumed to be
generated each 30-day period. The yield is computed by dividing the net
investment income per Variable Accumulation Unit earned during the
period by the price per unit on the last day of the period, according
to the following formula:
<PAGE>
YIELD= 2[{a - b+1}6-1]
cd
Where:
a = net investment income earned during the period by the Portfolio
attributable to the shares owned by the Sub-Account.
b = expenses for the Sub-Account accrued for the period (net of
reimbursements). c = the average daily number of Variable Accumulation
Units outstanding during the period. d = the maximum offering price per
Variable Accumulation Unit on the last day of the period.
Net investment income will be determined in accordance with
rules established by the Commission. Accrued expenses will include all
recurring fees that are charged to all Policies. The yield calculations
do not reflect the effect of any Contingent Deferred Sales Load that
may be applicable to a particular Policy. Contingent Deferred Sales
Load range from 6% to 0% of the amount of Policy Value withdrawn
depending on the elapsed time since the receipt of each Premium
attributable to the portion of the Policy Value withdrawn.
Because of the charges and deductions imposed by the Variable
Account, the yield for the Sub-Account will be lower than the yield for
the corresponding Portfolio. The yield on amounts held in the
Sub-Accounts normally will fluctuate over time. Therefore, the
disclosed yield for any given period is not an indication or
representation of future yields or rates of return. The Sub-Account's
actual yield will be affected by the types and quality of portfolio
securities held by the Portfolio, and its operating expenses.
Standard Total Return Calculations
Transamerica may from time to time also disclose average
annual total returns for one or more of the Sub-Accounts for various
periods of time. Average annual total return quotations are computed by
finding the average annual compounded rates of return over one, five
and ten year periods that would equate the initial amount invested to
the ending redeemable value, according to the following formula:
P{1+T}n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the one, five, or ten-year period at
the end of the one, five or ten-year period (or fractional
portion thereof).
All recurring fees are recognized in the ending redeemable
value. The standard average annual total return calculations will
reflect the effect of any Contingent Deferred Sales Loads that may be
applicable to a particular period.
Hypothetical Performance Data
Transamerica may also disclose "hypothetical" performance data
for a Sub-Account, for periods before the Sub-Account commenced
operations. Such performance information for the Sub-Account will be
calculated based on the performance of the corresponding Portfolio and
the assumption that the Sub-Account was in existence for the same
periods as those indicated for the Portfolio, with a level of Policy
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 Policy is not
surrendered (i.e., with no deduction for the Contingent Deferred Sales
Load) and assuming that the Policy is surrendered at the end of the
applicable period (i.e., reflecting a deduction for any applicable
Contingent Deferred Sales Load).
<PAGE>
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.
Except for Transamerica Growth, the Funds have provided the performance
data for the Sub-Accounts. Except for Transamerica Growth none of the Funds or
their investment advisers 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.
Sub-Account Performance Figures Including Hypothetical Performance
The charts below show historical performance data for the Sub-Accounts,
including, for six Sub-Accounts, "hypothetical" data for the periods prior to
the inception of the Sub-Accounts, based on the performance of the corresponding
Portfolios since their inception date, with a level of charges equal to those
currently assessed under the Polices. These figures are not an indication of the
future performance of the Sub-Accounts. Some of the figures reflect the waiver
of advisory fees and reimbursement of other expenses for part or all of the
periods indicated.
The dates to the left of the Sub-Account names below indicate the date
of commencement of operation of the Portfolios, which coincide with the date of
commencement of operation of the corresponding Sub-Account, with these seven
exceptions: the Money Market; Managed Assets, Zero Coupon 2000, Qualify Bond,
Small Cap and Stock Index Sub-Accounts which commenced operations January 4,
1993 and the Transamerica Growth Sub-Account which commenced operations May 1,
1998. Hence, the performance data given for these seven Sub-Accounts which
precedes these dates are "hypothetical".
Standard Average annual total returns for periods since inception of
the Portfolio, including hypothetical performance, for each Sub-Account are as
follows. These figures include mortality and expenses charges deducted at 1.25%,
the administrative expenses charge of 0.15% per annum, the administration charge
of $30 per annum adjusted for average account size and the maximum contingent
deferred sales load of 6%.
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
For the period
from
commencement of
SUB-ACCOUNT (date of commencement of For the 1-year For the 3-year For the 5-year Portfolio
operation of Corresponding Portfolio) period ending period ending period ending operations to
12/31/98 12/31/98 12/31/98 12/31/98
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Money Market (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Special Value (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Zero Coupon 2000 (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Quality Bond (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Small Cap (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Capital Appreciation (4/5/93)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Stock Index (9/29/89)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Socially Responsible (10/7/93)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Growth & Income (12/15/94)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
International Equity (12/15/94)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
International Value (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Disciplined Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Small Company Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Balanced (5/1/97)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Limited Term High Income(5/1/97)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Transamerica Growth(2/26/69)*
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Core Value ( )
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
MidCap Stock ( )
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Non-Standard Average annual total returns for period since inception of
the Portfolio including hypothetical performance, for each Sub-Account are as
follows. These figures include mortality and expenses charges deducted at 1.25%,
the administrative expenses charge of 0.15% per annum, the administration charge
of $30 per annum adjusted for average account size but do not reflect the
maximum contingent deferred sales load of 6% which if reflected would reduce the
figures. Non-Standard performance data will only be disclosed if the standard
performance data for the required periods is also disclosed.
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
For the period
from
commencement of
SUB-ACCOUNT (date of commencement of For the 1-year For the 3-year For the 5-year Portfolio
operation of Corresponding Portfolio) period ending period ending period ending operations to
12/31/98 12/31/98 12/31/98 12/31/98
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Money Market (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Special Value (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Zero Coupon 2000 (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Quality Bond (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Small Cap (8/31/90)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Capital Appreciation (4/5/93)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Stock Index (9/29/89)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Socially Responsible (10/7/93)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Growth & Income (12/15/94)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
International Equity (12/15/94)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
International Value (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Disciplined Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Small Company Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Balanced (5/1/97)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Limited Term High Income(5/1/97)
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Transamerica Growth(2/26/69)*
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Core Value ( )
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
MidCap Stock ( )
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------
Non-Standard Cumulative total returns for periods since inception of the
Portfolio, including hypothetical performance, for each Sub-Account are as
follows. These figures include mortality and expenses charges deducted at 1.25%,
the administrative expenses charge of 0.15% per annum, the administration charge
of $30 per annum adjusted for average account size but do not reflect the
maximum contingent deferred sales load of 6%, which if reflected would reduce
the figures. Nonstandard performance data will only be disclosed if standard
performance data for the required periods is also disclosed.
- ---------------------------------------- ------------------- ------------------
For the 1-year
SUB-ACCOUNT (date of commencement of period ending Since Inception
operation of Corresponding Portfolio) 12/31/98
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Money Market (8/31/90)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Special Value (8/31/90)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Zero Coupon 2000 (8/31/90)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Quality Bond (8/31/90)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Small Cap (8/31/90)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Capital Appreciation (4/5/93)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Stock Index (9/29/89)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Socially Responsible (10/7/93)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Growth & Income (12/15/94)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
International Equity (12/15/94)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
International Value (5/1/96)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Disciplined Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Small Company Stock (5/1/96)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Balanced (5/1/97)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Limited Term High Income(5/1/97)
- ---------------------------------------- ------------------- ------------------
- ---------------------------------------- ------------------- ------------------
Transamerica Growth(2/26/69)*
- ---------------------------------------- ------------------- ------------------
</TABLE>
*The Growth Portfolio of the Transamerica Variable Insurance Fund,
Inc., is the successor to Separate Account Fund C of Transamerica Occidental
Life Insurance Company, a management investment company funding variable
annuities, through a reorganization on November 1, 1996. Accordingly, the
performance data for the Transamerica VIF Growth Portfolio include performance
of its predecessor. The performance shown in the "since inception" box for the
Transamerica Growth Sub-Account is 10-year performance, not performance since
1969.
FEDERAL TAX MATTERS
The Dreyfus/Transamerica Triple Advantage Variable Annuity may be
purchased on a non-tax-qualified basis ("Non-Qualified Policy") or purchased and
used in connection with plans qualifying for special tax treatment ("Qualified
Polices"). Qualified Polices are designed for use by individual retirement plans
qualified for special tax treatment under Section 401, 403(b) or 408 of the
Internal Revenue Code of 1986, as amendment (the "Code").The ultimate effect of
federal income taxes on the Policy Value, on Annuity Payments, and on the
economic benefit to the Owner, the Annuitant or the Beneficiary may depend on
the type of retirement plan for which the Policy is purchased, on the tax and
employment status of the individual concerned and on Transamerica's tax status.
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. Any
person concerned about these tax implications should consult a competent tax
adviser. This discussion is based upon Transamerica's understanding of the
present federal income tax laws as they are currently interpreted by the
Internal Revenue Service ("IRS"). No representation is made as to the likelihood
of continuation of these present federal income tax laws or of the current
interpretations by the Internal Revenue Service. Moreover, no attempt has been
made to consider any applicable state or other tax laws.
Taxation of Transamerica
Transamerica is taxed as a life insurance company under Part I of
Subchapter L of the Code. Since the Variable Account is not an entity separate
from Transamerica, and its operations form a part of Transamerica, it will not
be taxed separately as a "regulated investment company" under Subchapter M of
the Code. Investment income and realized capital gains are automatically applied
to increase reserves under the Policy. Under existing federal income tax law,
Transamerica believes that the Variable Account investment income and realized
net capital gains will not be taxed to the extent that such income and gains are
applied to increase the reserves under the Policy.
Accordingly, Transamerica does not anticipate that it will incur any
federal income tax liability attributable to the Variable Account and,
therefore, Transamerica does not intend to make provisions for any such taxes.
However, if changes in the federal tax laws or interpretations thereof result in
Transamerica being taxed on income or gains attributable to the Variable
Account, then Transamerica may impose a charge against the Variable Account
(with respect to some or all Policies) in order to set aside provisions to pay
such taxes.
Tax Status of the Policies
Section 817(h) of the Code requires that with respect to Non-Qualified
Policies, the investments of the Funds be "adequately diversified" in accordance
with Treasury regulations in order for the Policies to qualify as annuity
contracts under federal tax law. The Variable Account, through the Funds,
intends to comply with the diversification requirements prescribed by the
Treasury in Reg. Sec. 1.817-5, which affect how the Funds' assets may be
invested.
In certain circumstances, Owners of variable annuity policies may be
considered the owners, for federal income tax purposes, of the assets of the
separate accounts used to support their Policies. In those circumstances, income
and gains from the separate account assets would be includible in the variable
policy owner's gross income. The IRS has stated in published rulings that a
variable policy owner will be considered the owner of separate account assets if
the policy owner possesses incidents of ownership in those assets, such as the
ability to exercise investment control over the assets. The Treasury Department
has also announced, in connection with the issuance of regulations concerning
diversification, that those regulations "do not provide guidance concerning the
circumstances in which investor control for the investments of a segregated
asset account may cause the investor (i.e., the Owner), rather than the
insurance company, to be treated as the owner of the assets in the account."
This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct their
investments to particular Sub-Accounts without being treated as owners of the
underlying assets."
The ownership rights under the Policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that owners were not owners of separate account assets. For example,
the Owner has additional flexibility in allocating premium payments and Policy
Values. These differences could result in an Owner being treated as the owner of
a pro rata portion of the assets of the Variable Account. In addition,
Transamerica does not know what standards will be set forth, if any, in the
regulations or rulings which the Treasury Department has stated it expects to
issue. Transamerica therefore reserves the right to modify the Policy as
necessary to attempt to prevent an Owner from being considered the owner of a
pro rata share of the assets of the Variable Account.
In order to be treated as an annuity contract for federal income tax
purposes, section 72(s) of the Code requires any Non-Qualified Policy to provide
that (a) if any Owner dies on or after the Annuity Date but prior to the time
the entire interest in the Policy has been distributed, the remaining portion of
such interest will be distributed at least as rapidly as under the method of
distribution being used as of the date of that Owner's death; and (b) if any
Owner dies prior to the Annuity Date, the entire interest in the Policy will be
distributed within five years after the date of the Owner's death. These
requirements will be considered satisfied as to any portion of the Owner's
interest which is payable to or for the benefit of a "designated beneficiary"
and which is distributed over the life of such "designated beneficiary" or over
a period not extending beyond the life expectancy of that Beneficiary, provided
that such distributions begin within one year of that Owner's death. The Owner's
"designated beneficiary" refers to a natural person designated by such Owner as
a Beneficiary and to whom ownership of the Policy passes by reason of death.
However, if the Owner's "designated beneficiary" is the surviving spouse of the
deceased Owner, the Policy may be continued with the surviving spouse as the new
owner.
The Non-Qualified Policies contain provisions which are intended to
comply with the requirements of section 72(s) of the Code, although no
regulations interpreting these requirements have yet been issued. Transamerica
intends to review such provisions and modify them if necessary to assure that
they comply with the 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 Polices through registered representatives who are
licensed to sell securities and variable insurance products. These agreements
provide that applications for the Polices 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 Polices. 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 Polices will be sold by
broker/dealers which will receive compensation as described in the Prospectus.
The offering of the Policies is expected to be continuous and neither
TSSC nor TFR anticipate discontinuing the offering of the Policies. However,
TSSC and TFR reserve the right to discontinue the offering of the Policies.
During fiscal year 1998, $______________ in commission were paid to
TSSC as underwriter of the Policies; no amounts were retained by TSSC. During
fiscal year 1997, $5,543,415.68 in commissions were paid to TSSC as underwriter
of the Policies; no amounts were retained by TSSC. During fiscal year 1996,
$4,277,511.85 in commissions were paid to TSSC as underwriter of the Policies;
no amounts were retained by TSSC. During fiscal year 1998, $______ in
commissions were paid to TFR as underwriter of the Policies; no amounts were
retained by TFR. During fiscal year 1997, $81.50 in commissions were paid to TFR
as underwriter of the Policies; no amounts were retained by TFR. During fiscal
year 1996, $66.00 in commissions were paid to TFR as underwriter of the
Policies; no amounts were retained by TFR.
SAFEKEEPING OF ACCOUNT ASSETS
Title to assets of the Variable Account is held by Transamerica. The
assets are kept separate and apart from Transamerica's general account assets.
Records are maintained of all purchases and redemptions of Portfolio shares held
by each of the Sub-Accounts.
TRANSAMERICA
General Information and History
Transamerica is wholly-owned by Transamerica Occidental Life Insurance
Company, which is, in turn, an indirect subsidiary of Transamerica Corporation.
Transamerica Corporation is a financial services organization which engages
through its subsidiaries in two primary businesses: finance and insurance.
Finance consists of consumer lending, commercial lending, leasing and real
estate services. Insurance comprises life insurance, asset management and
insurance brokerage.
STATE REGULATION
Transamerica is subject to the insurance laws and regulations of all
the states where it is licensed to operate. The availability of certain Policy
rights and provisions depends on state approval and/or filing and review
processes.
Where required by state law or regulation, the Policies will be modified
accordingly.
RECORDS AND REPORTS
All records and accounts relating to the Variable Account will be
maintained by Transamerica or by its Service Office. As presently required by
the 1940 Act and regulations promulgated thereunder which pertain to the
Variable Account, reports containing such information as may be required under
the 1940 Act or by other applicable law or regulation will be sent to Owners
semi-annually at their last known address of record.
FINANCIAL STATEMENTS
This Statement of Additional Information contains the financial
statements of the Variable Account as of December 31,1998.
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>
APPENDIX
Accumulation Transfer Formula
Transfers after the annuity date are implemented according to the following
formulas:
(1) Determine the number of units to be transferred from the variable
sub-account as follows: = AT/AUV1
(2) Determine the number of variable accumulation units remaining in
such variable sub-account (after the transfer):
= UNIT1 AT/AUV1
(3) Determine the number of variable accumulation units in the
transferee variable sub-account (after the transfer):
= UNIT2 + AT/AUV2
(4) Subsequent variable accumulation payments will reflect the changes
in variable accumulation units in each variable sub-account as of the
next Variable Accumulation Payment's due date.
Where:
(AUV1) is the variable accumulation Unit value of the Variable
sub-account that the transfer is being made from as of the end of the
valuation Period in which the transfer request was received.
(AUV2) is the variable accumulation unit value of the variable
sub-account that the transfer is being made to as of the end of the
valuation period in which the transfer request was received.
(UNIT1) is the number of variable accumulation units in the Variable
sub-account that the transfer is being made from, before the transfer.
(UNIT2) is the number of variable accumulation units in the variable
sub-account that the transfer is being made to, before the transfer.
(AT) is the dollar amount being transferred from the variable
sub-account.
<PAGE>
C-1
C-0
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 Transamerica
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) (h) Form of Sales Agreement among
Transamerica Insurance Securities Sales Corporation,
Transamerica Occidental Life Insurance Company, First
Transamerica Life Insurance Company and Broker/Dealers, dated
August 24, 1994.(8)
(i) Form of Sales Agreement between Transamerica Occidental Life Insurance
Company, Transamerica Life Insurance and Annuity Company, First Transamerica
Life Insurance Company and Transamerica Securities Sales Corporation.(8)
(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. (g) Form of Fixed
Account Rider(9)
(5) Form of Application. (5)
(6) (a) Declaration of Intention and Charter of Transamerica.(1)
(b) By-Laws of Transamerica.(1)
(7) Not applicable.
(8) (a) Participation Agreement between First Transamerica Life Insurance
Company and Dreyfus Variable Investment Fund.(3) (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) (e) Form of
Participation Agreement between Transamerica Life Insurance Company of New York
and Dreyfus Investment Services(9) (f) Form of Participation Agreement between
Transamerica Variable Insurance Fund, Transamerica Securities Sales Corporation
and Transamerica Life Insurance Company of New York.(9)
(9) (a) Opinion and Consent of Counsel.(7)
(10) (a) Consent of Counsel.(9)
(b) Consent of Independent Auditors .(9)
(11) No financial statements are omitted from item 23.
(12) Not applicable.
(13) Performance Data Calculations.(5)
(14) Not applicable.
(15) Powers of Attorney.
Alan T. Cunningham (8)(9) Marc C. Abrahms (5)(9)
Daniel E. Jund (7)(9)
James T. Byrne, Jr. (5)(9)
John A. Fibiger (2)(9) Thomas O'Neill
James B. Roszak (2) (9) Robert Rubinstein
Nooruddin S. Veerjee
(1) Filed with initial filing of the Form N-4 Registration Statement, File No.
33-55152 (December 1, 1992).
(2) Filed with Pre-Effective Amendment No.1 to the Form N-4 Registration
Statement, File No. 33-55152 (February 10, 1993).
(3) Incorporated by reference to the like-numbered exhibit to
Post-Effective Amendment No.1 to the Form N-4 Registration Statement of
Transamerica Occidental Life Insurance Company's Separate Account
VA-2L, File No. 33-49998 (April 30, 1993).
(4) Filed with Post-Effective Amendment No. 1 to the Form N-4 Registration
Statement, File No. 33-55152
(June 8, 1993).
(5) Filed with Post-Effective Amendment No. 2 to the Form N-4 Registration
Statement, File No. 33-55152 (April 29, 1994).
(6) Filed with Post-Effective Amendment No. 3 to the Form N-4 Registration
Statement File No. 33-55152 (April 29, 1995).
(7) Filed with Post-Effective Amendment No. 5 to the Form N-4 Registration
Statement File No. 33-55152 (April 26, 1996).
(8) Filed with Post-Effective Amendment No. 6 to the Form N-4 Registration
Statement File No. 33-55152 (April 28, 1997) (9)
(9) Filed with Post-Effective Amendment No. 7 to the Form N-4 Registration
Statement File No. 33-55152 (April 28, 1998).
(10) Filed herewith.
Item 25. Directors and Officers of the Depositor
Name and Principal
Business Address Position and Offices with Depositor
Nooruddin S. Veerjee Director and Chairman
James W. Dederer General Counsel Alan T. Cunningham
Director and President
Robert Rubinstein Director, Senior Vice President,
Chief Actuary and Chief Operating
Officer and Secretary
Gary Rolle' Investment Officer
Susan Silbert Investment Officer
Nicki Bair FSA, MAAA Vice President
Roy Chong-Kit FSA, MAAA Vice President
Paul Hankowitz MD Vice President and Chief
Medical Director
Ken Kilbane Vice President
William J. Lyons Vice President and Chief Underwriter
Alexander Smith, Jr. Vice President, Administration
and Controller
Kamran Haghighi Tax Officer
William M. Hurst Assistant Secretary
Timothy Weis Vice President
Sally S. Yamada Treasurer
Marc C. Abrahms Director
James T. Byrne, Jr. Director
John A. Fibiger Director
Daniel E. Jund Director
Thomas O'Neill Director
James B. Roszak Director
The Depositor, Transamerica Life Insurance Company of New York
(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.
<PAGE>
TRANSAMERICA CORPORATION AND SUBSIDIARIES
WITH STATE OR COUNTRY OF INCORPORATION
ARC Reinsurance Corporation
Transamerica Management, Inc. -- DE
BWAC Seventeen, Inc.
Transamerica Commercial Finance Canada, Limited -- ON Transamerica Commercial
Finance Corporation, Canada -- Can.
BWAC Twelve, Inc.
TIFCO Lending Corporation -- IL
Transamerica Insurance Finance Corporation -- MD
BWAC Twenty-One, Inc.
Transamerica Commercial Holdings Limited -- U.K.
First Florida Appraisal Services, Inc.
First Georgia Appraisal Services, Inc. -- GA
Greybox L.L.C.
Transamerica Trailer Leasing S.N.C. -- Fra.
Intermodal Equipment, Inc.
Transamerica Leasing N.V. -- Belg.
Transamerica Leasing SRL -- Itl.
Inventory Funding Trust
Inventory Funding Company, LLC -- DE
Metropolitan Mortgage Company
Easy Yes Mortgage, Inc. -- FL
Easy Yes Mortgage, Inc. -- GA
First Florida Appraisal Services, Inc. -- FL
Freedom Tax Services, Inc. -- FL
J.J. & W. Advertising, Inc. -- FL
J.J. & W. Realty Services, Inc. -- FL
Liberty Mortgage Company of Ft. Myers, Inc. -- FL
Metropolis Mortgage Company -- FL
Perfect Mortgage Company -- FL
Pyramid Insurance Company, Ltd.
Pacific Cable Ltd. -- Bmda.
TA Leasing Holding Co., Inc.
Trans Ocean Ltd. -- DE
Transamerica Leasing Inc. -- DE
Trans Ocean Container Corp.
SpaceWise Inc. -- DE
Trans Ocean Container Finance Corp. -- DE
Trans Ocean Leasing Deutschland GmbH -- Ger.
Trans Ocean Leasing PTY Limited -- Aust.
Trans Ocean Management S.A. -- SWTZ
Trans Ocean Regional Corporate Holdings -- CA
Trans Ocean Tank Services Corporation -- DE
Trans Ocean Ltd.
Trans Ocean Container Corp. -- DE
Transamerica Accounts Holding Corporation
ARS Funding Corporation -- DE
Transamerica Acquisition Corporation
Camtrex Group, Inc. --
Transamerica Business Credit Corporation
Bay Capital Corporation -- DE
Coast Funding Corporation -- DE
Direct Capital Equity Investment, Inc. -- DE
Gulf Capital Corporation -- DE
TA Air East, Corp. --
TA Air III, Corp. -- DE
TA Air IV, Corp. -- DE
TA Air IX, Corp. -- DE
TA Air I, Corp. -- DE
TA Air VIII, Corp. --
TA Air VII, Corp. --
TA Air VI, Corp. --
TA Air V, Corp. --
TA Air X Corp. -- DE
TA Marine I Corp. -- DE
TA Marine II Corp. -- DE
TBC III, Inc. -- DE
TBC II, Inc. -- DE
TBC IV, Inc. -- DE
TBC I, Inc. -- DE
TBC Tax III, Inc. -- DE
TBC Tax II, Inc. -- DE
TBC Tax IV, Inc. -- DE
TBC TAX IX, Inc. -- DE
TBC Tax I, Inc. -- DE
TBC Tax VIII, Inc. -- DE
TBC Tax VII, Inc. -- DE
TBC Tax VI, Inc. -- DE
TBC Tax V, Inc. -- DE
TBC V, Inc. -- DE
TBCC Funding Trust I --
TBCC Funding Trust II --
The Plain Company -- DE
Transamerica Mezzanine Financing, Inc. --
Transamerica Small Business Services, Inc. --
Transamerica Business Credit Corporation - DE
TA Air II, Corp. -- DE
Transamerica Commercial Finance Canada, Limited
Transamerica Acquisition Corporation -- Can.
Transamerica Commercial Finance Corporation
Inventory Funding Trust -- DE
TCF Asset Management Corporation -- CO
Transamerica Distribution Finance Corporation de Mexico --
Transamerica Joint Ventures, Inc. -- DE
Transamerica Commercial Finance Corporation, I
BWAC Credit Corporation -- DE
BWAC International Corporation -- DE
BWAC Twelve, Inc. -- DE
Transamerica Business Credit Corporation -- DE
Transamerica Distribution Finance Corporation -- DE
Transamerica Equipment Financial Services Corporation --
Transamerica Commercial Finance Limited
WFC Polska Sp. Zo.o --
Transamerica Commercial Holdings Limited
Transamerica Commercial Finance Limited -- U.K.
Transamerica Trailer Leasing Limited -- NY
Transamerica Trailer Leasing Limited -- U.K.
Transamerica Consumer Finance Holding Company
Metropolitan Mortgage Company -- FL
Pacific Agency, Inc. -- IN
Transamerica Consumer Mortgage Receivables Corporation -- DE
Transamerica Mortgage Company -- DE
Transamerica Corporation
ARC Reinsurance Corporation -- HI
Inter-America Corporation -- CA
Pyramid Insurance Company, Ltd. -- HI
RTI Holdings, Inc. -- DE
Transamerica Airlines, Inc. -- DE
Transamerica Business Technologies Corporation -- DE
Transamerica CBO I, Inc. -- DE
Transamerica Corporation (Oregon) -- OR
Transamerica Delaware, L.P. -- DE
Transamerica Finance Corporation -- DE
Transamerica Financial Products, Inc. -- CA
Transamerica Foundation -- CA
Transamerica Insurance Corporation of California -- CA
Transamerica Intellitech, Inc. -- DE
Transamerica International Holdings, Inc. -- DE
Transamerica Investment Services, Inc. -- DE
Transamerica LP Holdings Corp. -- DE
Transamerica Pacific Insurance Company, Ltd. -- HI
Transamerica Real Estate Tax Service (A Division of Transamerica Corporation)
-- N/A
Transamerica Realty Services, Inc. -- DE
Transamerica Senior Properties, Inc. -- DE
TREIC Enterprises, Inc. -- DE
Transamerica Distribution Finance Corporation Transamerica Accounts Holding
Corporation -- DE Transamerica Commercial Finance Corporation -- DE
Transamerica Inventory Finance Corporation -- DE Transamerica Retail Financial
Services Corporation -- DE Transamerica Vendor Financial Services Corporation
-- DE
Transamerica Distribution Finance Corporation de Mexico
TDF de Mexico --
Transamerica Distribution Finance Corporation de Mexico and TDF de Mexico
Transamerica Corporate Services de Mexico --
Transamerica Finance Corporation
TA Leasing Holding Co., Inc. -- DE
Transamerica Commercial Finance Corporation, I -- DE
Transamerica Home Loan -- CA
Transamerica HomeFirst, Inc. -- CA
Transamerica Lending Company -- DE
Transamerica Financial Resources, Inc.
Financial Resources Insurance Agency of Texas -- TX
TBK Insurance Agency of Ohio, Inc. -- OH
Transamerica Financial Resources Insurance Agency of Alabama Inc. -- AL
Transamerica Financial Resources Insurance Agency of Massachusetts Inc. -- MA
Transamerica GmbH Inc.
Transamerica Financieringsmaatschappij B.V. -- Neth.
Transamerica GmbH - Germany -- Ger.
Transamerica Insurance Corporation of California
Arbor Life Insurance Company -- AZ
Bulkrich Trading --
Gemini Investments, Inc. --
Plaza Insurance Sales, Inc. -- CA
Transamerica Advisors, Inc. -- CA
Transamerica Annuity Service Corporation -- NM
Transamerica Financial Resources, Inc. -- DE
Transamerica International Insurance Services, Inc. -- DE
Transamerica Occidental Life Insurance Company -- CA
Transamerica Products, Inc. -- CA
Transamerica Securities Sales Corporation -- MD
Transamerica Service Company -- DE
Transamerica Insurance Finance Corporation
Transamerica Insurance Finance Company (Europe) -- MD
Transamerica Insurance Finance Corporation
Transamerica Insurance Finance Corporation, California -- CA
Transamerica Insurance Finance Corporation - MD
Transamerica Insurance Finance Corporation, Canada -- ON
Transamerica Intellitech, Inc.
Information Service Corp. --
Transamerica International Insurance Services, Inc.
Home Loans and Finance Ltd. -- U.K.
Transamerica Inventory Finance Corporation
BWAC Seventeen, Inc. -- DE
BWAC Twenty-One, Inc. -- DE
Transamerica Commercial Finance France S.A. -- Fra.
Transamerica GmbH Inc. -- DE
Transamerica Investment Services, Inc.
Transamerica Income Shares, Inc. (managed by TA Investment Services) -- MD
Transamerica Leasing Holdings Inc.
Greybox Logistics Services Inc. -- DE
Greybox L.L.C. -- DE
Greybox Services Limited -- U.K.
Intermodal Equipment, Inc. -- DE
Transamerica Distribution Services Inc. -- DE
Transamerica Leasing Coordination Center -- Belg.
Transamerica Leasing do Brasil Ltda. -- Braz.
Transamerica Leasing GmbH -- Ger.
Transamerica Leasing Limited -- U.K.
Transamerica Leasing Pty. Ltd. -- Aust.
Transamerica Leasing (Canada) Inc. -- Can.
Transamerica Leasing (HK) Ltd. -- H.K.
Transamerica Leasing (Proprietary) Limited -- S.Afr.
Transamerica Tank Container Leasing Pty. Limited -- Aust.
Transamerica Trailer Holdings I Inc. -- DE
Transamerica Trailer Holdings II Inc. -- DE
Transamerica Trailer Holdings III Inc. -- DE
Transamerica Trailer Leasing AB -- Swed.
Transamerica Trailer Leasing AG -- SWTZ
Transamerica Trailer Leasing A/S -- Denmk.
Transamerica Trailer Leasing GmbH -- Ger.
Transamerica Trailer Leasing (Belgium) N.V. -- Belg.
Transamerica Trailer Leasing (Netherlands) B.V. -- Neth.
Transamerica Trailer Spain S.A. -- Spn.
Transamerica Transport Inc. -- NJ
Transamerica Leasing Inc.
Better Asset Management Company LLC -- DE
Transamerica Leasing Holdings Inc. -- DE
Transamerica Leasing Limited
ICS Terminals (UK) Limited -- U.K.
Transamerica Life Insurance and Annuity Company
Transamerica Assurance Company -- MO
Transamerica Management, Inc.
Criterion Investment Management Company -- TX
Transamerica Occidental Life Insurance Company
NEF Investment Company -- CA
Transamerica China Investments Holdings Limited -- H.K.
Transamerica International RE (Bermuda) Ltd. -- Bmda.
Transamerica Life Insurance and Annuity Company -- NC
Transamerica Life Insurance Company of Canada -- Can.
Transamerica Life Insurance Company of New York -- NY
Transamerica South Park Resources, Inc. -- DE
Transamerica Variable Insurance Fund, Inc. -- MD
USA Administration Services, Inc. -- KS
Transamerica Products, Inc.
Transamerica Products II, Inc. -- CA
Transamerica Products IV, Inc. -- CA
Transamerica Products I, Inc. -- CA
Transamerica Real Estate Tax Service
Transamerica Flood Hazard Certification (A Division of TA Real Estate Tax
Service) -- N/A Transamerica Realty Services, Inc.
Bankers Mortgage Company of California -- CA
Pyramid Investment Corporation -- DE
The Gilwell Company -- CA
Transamerica Affordable Housing, Inc. -- CA
Transamerica Minerals Company -- CA
Transamerica Oakmont Corporation -- CA
Ventana Inn, Inc. -- CA
Transamerica Retail Financial Services Corporation
Transamerica Consumer Finance Holding Company -- DE
Whirlpool Financial National Bank -- DE
Transamerica Senior Properties, Inc.
Transamerica Senior Living, Inc. -- DE
Transamerica Small Business Services, Inc.
Emergent Business Capital Holdings, Inc. --
*Designates INACTIVE COMPANIES
A Division of Transamerica Corporation
ss.Limited Partner; Transamerica Corporation is General Partner
<PAGE>
Item 27. Number of Policy Owners
As of April 1 , 1999, there were 3,151 Owners of Non-Qualified Individual
Policies and 2,105Owners of Qualified Individual Policies.
Item 28. Indemnification
Transamerica's Bylaws provide in Article VIII as follows:
Section 1. Indemnification: (a) The Corporation shall indemnify to the
fullest extent now or hereafter provided for or permitted by law each person
involved in, or made or threatened to be made a party to, any action, suit,
claim or proceeding, whether civil or criminal, including any investigative,
administrative, legislative, or other proceeding, and including any action by or
in the right of the Corporation or any other corporation, or any partnership,
joint venture, trust, employee benefit plan, or other enterprise (any such
entity, other than the Corporation, being hereinafter referred to as an
"Enterprise"), and including appeals therein (any such action or process being
hereinafter referred to as a "Proceeding"), by reason of the fact that such
person, such person's testator or intestate (i) is or was a director or officer
of the Corporation, or (ii) is or was serving, at the request of the
Corporation, as a director, officer, or in any other capacity, of any other
Enterprise, against any and all judgments, amounts paid in settlement, and
expenses, including attorneys' fees, actually and reasonably incurred as a
result of or in connection with any Proceeding, except as provided in Subsection
(b) below.
(b) No indemnification shall be made to or on behalf of any such person
if a judgment or other final adjudication adverse to such person establishes
that such person's acts were committed in bad faith or were the result of active
and deliberate dishonesty and were material to the cause of action so
adjudicated, or that such person personally gained in fact a financial profit or
other advantage to which such person was not legally entitled. In addition, no
indemnification shall be made with respect to any Proceeding initiated by any
such person against the Corporation, or a director or officer of the
Corporation, other than to enforce the terms of this Article VIII, unless such
Proceeding was authorized by the Board of Directors. Further, no indemnification
shall be made with respect to any settlement or compromise of any Proceeding
unless and until the Corporation has consented to such settlement or compromise.
(c) Written notice of any Proceeding for which indemnification may be
sought by any person shall be given to the Corporation as soon as practicable.
The Corporation shall then be permitted to participate in the defense of any
such proceeding or, unless conflicts of interest or position exist between such
person and the Corporation in the conduct of such defense, to assume such
defense. In the event that the Corporation assumes the defense of any such
Proceeding, legal counsel selected by the Corporation shall be reasonably
acceptable to such person. After such an assumption, the Corporation shall not
be liable to such person for any legal or other expenses subsequently incurred
unless such expenses have been expressly authorized by the Corporation. In the
event that the Corporation participates in the defense of any such Proceeding,
such person may select counsel to represent him in regard to such a Proceeding;
however, such person shall cooperate in good faith with any request that common
counsel be utilized by the parties to any Proceeding who are similarly situated,
unless to do so would be inappropriate due to actual or potential differing
interests between or among such parties.
(d) In making any determination regarding any person's entitlement to
indemnification hereunder, it shall be presumed that such person is entitled to
indemnification, and the Corporation shall have the burden of proving the
contrary.
Section 2. Advancement of Expenses. Except in the case of a Proceeding
against a director, officer, or other person specifically approved by the Board
of Directors, the Corporation shall, subject to Section 1 of this Article VIII
above, pay expenses actually and reasonably incurred by or on behalf of such a
person in defending any Proceeding in advance of the final disposition of such
Proceeding. Such payments shall be made promptly upon receipt by the
Corporation, from time to time, of a written demand by such person for such
advancement, together with an undertaking by or on behalf of such person to
repay any expenses so advanced to the extent that the person receiving the
advancement is ultimately found not to be entitled to indemnification for part
or all of such expenses.
Section 3. Rights Not Exclusive. The rights to indemnification and
advancement of expenses granted by or pursuant to this Article VIII (i) shall
not limit or exclude, but shall be in addition to, any other rights which may be
granted by or pursuant to any statute, corporate charter, by-law, resolution of
stockholders or directors or agreement, (ii) shall be deemed to constitute
contractual obligations of the Corporation to any person who serves in a
capacity referred to in Section 1 of this Article VIII at any time while this
Article VIII is in effect, (iii) shall continue to exist after the repeal or
modification of this Article VIII with respect to events occurring prior thereto
and (iv) shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of the estate, spouse, heirs, executors,
administrators or assigns of such person. It is the intent of this Article VIII
to require the Corporation to indemnify the persons referred to herein for the
aforementioned judgments, amounts paid in settlement, and expenses, including
attorneys' fees, in each and every circumstance in which such indemnification
could lawfully be permitted by express provisions of by-laws, and the
indemnification required by this Article VIII shall not be limited by the
absence of an express recital of such circumstances.
Section 4. Indemnification of Employees and Others. The Corporation
may, from time to time, with the approval of the Board of Directors, and to the
extent authorized, grant rights to indemnification, and to the advancement of
expenses, to any employee or agent of the Corporation or to any person serving
at the request of the Corporation as a director or officer, or in any other
capacity, of any other Enterprise, to the fullest extent of the provisions of
this Article VIII with respect to the indemnification and advancement of
expenses of directors and officers of the Corporation.
Section 5. Authorization of Contracts. The Corporation may, with the
approval of the Board of Directors, enter into an agreement with any person who
is, or is about to become, a director, officer, employee or agent of the
Corporation, or who is serving, or is about to serve, at the request of the
Corporation, as a director, officer, or in any other capacity, of any other
Enterprise, which agreement may provide for indemnification of such person and
advancement of expenses to such person upon terms, and to the extent, not
prohibited by law. The failure to enter into any such agreement shall not affect
or limit the rights of any such person under this Article VIII.
Section 6. Insurance. The Corporation may purchase and maintain insurance to
indemnify the Corporation and any person eligible to be indemnified under this
Article VIII within the limits permitted by law.
Section 7. Severability. If any provision of this Article VIII is determined at
any time to be unenforceable in any respect, the other provisions shall not in
any way be affected or impaired thereby.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling person of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by the director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
The directors and officers of Transamerica Life Insurance Company of
New York 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
$95,000,000 for Coverage A and $80,000,000 for Coverage B for the policy year
11/15/98 to 11/15/2000. Coverage B is subject to a self insured retention of
$15,000,000. The primary policy is with CNA Lloyds, Gulf, Chubb and Travelers.
Item 29. Principal Underwriter
Transamerica Securities Sales Corporation (TSSC) and Transamerica
Financial Resources (TFR) are the co-underwriters of the Certificates and the
Individual Contracts as defined in the Investment Company Act of 1940. TSSC
became Principal Underwriter effective 8-24-94.
NAME AND PRINCIPAL POSITION AND OFFICES WITH
BUSINESS ADDRESS* TRANSAMERICA SECURITIES SALES CORPORATION
Barbara A. Kelley President and Director
Regina M. Fink Secretary and Director
Benjamin Tang Treasurer
Nooruddin Veerjee Director
Dan S. Trivers Senior Vice President
Nicki A. Bair Vice President
Chris Shaw Second Vice President
*The Principal business address for each officer and director is 1150 South
Olive, Los Angeles, CA 90015.
NAME AND PRINCIPAL POSITION AND OFFICES WITH
BUSINESS ADDRESS* TRANSAMERICA FINANCIAL RESOURCES
Nooruddin S. Veerjee Chairman of the Board and Director
Barbara A. Kelley President and Director
Regina M. Fink Secretary and Counsel
Monica Suryapranata Treasurer
Gilbert F. Cronin Director
James W. Dederer Director
Dan Trivers Vice President, Director of Administration and
Chief Compliance Officer
Ronald F. Wagley Director
Kerry Rider Vice President,Director of Compliance and Assistant Secretary
Susan Vivino Assistant Secretary
*The Principal business address for each officer and director is 1150 South
Olive, Los Angeles, CA 90015.
The following table lists the amounts of commissions paid to the
principal underwriter during the last fiscal year.
<PAGE>
Name of
Principal Net Underwriting Compensation on Brokerage
Underwriter*Discounts & Commission Redemption Commissions Compensation
TSSC -0- -0- $5,543,415.68 -0-
TFR -0- -0- 81.50 -0-
<PAGE>
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.
(d) Transamerica hereby represents that the fees and the charges deducted
under the Contracts, in the aggregate, are reasonable in relation to
the services rendered, the expenses expected to be incurred, and the
risks assumed by Transamerica.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Transamerica
Life Insurance Company of New York certifies that this Post-Effective Amendment
No.8 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 Post-Effective Amendment No.8 to the Registration Statement to
be signed on its behalf by the undersigned in the City of Los Angeles, State of
California on the 25th day of February, 1999.
SEPARATE ACCOUNT VA-2LNY TRANSAMERICA
OF TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
LIFE INSURANCE COMPANY (DEPOSITOR)
OF NEW YORK
(REGISTRANT)
BY:________________________
David M. Goldstein
Vice President
As Required by the Securities Act of 1933, this Post-Effective Amendment No. 8
to the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
_________________________* Chairman and Director February 25, 1999
Nooruddin S. Veerjee
_________________________ * President and Director February 25, 1999
Alan T. Cunningham
__________________________* Senior Vice President, February 25, 1999
Robert Rubinstein Chief Actuary, Chief Operating
Officer, Secretary and Director
__________________________* Vice President - Administration February 25, 1999
Alexander Smith and Controller
__________________________* Director February 25, 1999
Marc C. Abrahms
_________________________* Director February 25, 1999
James T. Byrne, Jr.
__________________________* Director February 25, 1999
John Fibiger
___________________________* Director February 25, 1999
James B. Roszak
___________________________* Director February 25, 1999
Daniel E. Jund
_________________________* Director February 25, 1999
Thomas P. O'Neill
</TABLE>
On February 25, 1999 as Attorney -in-Fact pursuant to powers of attorney
previously filed and filed herewith, and in his own capacity as Vice
President.
*By:David M. Goldstein
<PAGE>
