<PAGE>
- --------------------------------------------------------------------------------
PFL WRIGHT VARIABLE ANNUITY
The PFL Wright
Variable Annuity Account
Annual Report
December 31, 1995
[LOGO PFL LIFE APPEARS HERE]
<PAGE>
- --------------------------------------------------------------------------------
Dear Valued Policyholders:
The year just ended was one for the record books. Investment values increased
by $1.75 trillion in the U.S. stock market and $750 billion in the U.S. bond
market. Foreign securities also progressed to higher price levels, but not as
aggressively. Underlying the explosive growth in U.S. security values was a
10%-15% increase in corporate profits to record levels, continued moderate
inflation and nearly a two percentage point decline in long-term interest
rates.
As 1996 unfolds, a return to normalcy can be expected. Investment values should
remain on their upward movement both domestically and abroad, but the rate of
increase is likely to be comparatively lower. We remain particularly optimistic
about the prospects for high-quality issues such as those in the PFL Wright
Variable Annuity Portfolios.
The Annual Report of the PFL Wright Variable Annuity Account for the year ended
December 31, 1995 is presented herein. Contained in this report is information
on the following Subaccounts:
Wright Near Term Bond Subaccount
Wright Total Return Bond Subaccount
Wright Selected Blue Chip Subaccount
Wright International Blue Chip Subaccount
We are energized by the confidence that you have expressed in the PFL Wright
Variable Annuity and will focus our efforts even more sharply on ways to better
serve your needs. In that vein, an automatic deposit option (CHECK-O-MATIC) was
recently introduced and is now available.
Prosperity and health in the coming year.
Sincerely,
/s/ William L. Busler
William L. Busler
President
PFL Life Insurance Company
2
<PAGE>
- --------------------------------------------------------------------------------
THE PFL WRIGHT VARIABLE ANNUITY ACCOUNT
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS AND CONTRACT OWNERS OF
THE PFL WRIGHT VARIABLE ANNUITY ACCOUNT,
PFL LIFE INSURANCE COMPANY:
We have audited the accompanying balance sheet of The PFL Wright Variable
Annuity Account (comprising, respectively, the Wright Near Term Bond, Wright
Total Return Bond, Wright Selected Blue Chip and Wright International Blue Chip
subaccounts) as of December 31, 1995, and the related statements of operations
and changes in contract owners' equity for the periods indicated therein. These
financial statements are the responsibility of the Variable Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of mutual fund shares owned as of December 31,
1995 by correspondence with the mutual funds' transfer agent. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts constituting The PFL Wright Variable Annuity Account at December
31, 1995 and the results of their operations and changes in their contract
owners' equity for the periods indicated therein in conformity with generally
accepted accounting principles.
Ernst & Young LLP
Des Moines, Iowa
February 6, 1996
3
<PAGE>
- --------------------------------------------------------------------------------
THE PFL WRIGHT VARIABLE ANNUITY ACCOUNT
BALANCE SHEET
December 31, 1995
<TABLE>
<CAPTION>
WRIGHT
NEAR TERM
BOND
TOTAL SUBACCOUNT
---------- ----------
<S> <C> <C>
ASSETS
Cash.................................................... $ 20 10
Investments in mutual funds, at current market value:
Wright Managed Blue Chip Series Trust
Wright Near Term Bond Portfolio
33,060.442 shares @ $9.88 (cost $319,194)............ 326,637 326,637
Wright Total Return Bond Portfolio
54,676.087 shares @ $9.83 (cost $509,573)............ 537,466 --
Wright Selected Blue Chip Portfolio
196,275.675 shares @ $11.41 (cost $1,978,790)........ 2,239,505 --
Wright International Blue Chip Portfolio
135,714.947 shares @ $10.06 (cost $1,318,175)........ 1,365,292 --
---------- -------
Total investments in mutual funds...................... 4,468,900 326,637
---------- -------
Total Assets............................................ $4,468,920 326,647
========== =======
LIABILITIES AND CONTRACT OWNERS' EQUITY
Liabilities:
Contract terminations payable.......................... $ 279 --
---------- -------
Total Liabilities...................................... 279 --
Contract Owners' Equity:
Deferred annuity contracts terminable by owners (Notes
2 and 5).............................................. 4,468,641 326,647
---------- -------
$4,468,920 326,647
========== =======
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WRIGHT WRIGHT WRIGHT
TOTAL SELECTED INTERNATIONAL
RETURN BOND BLUE CHIP BLUE CHIP
SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ---------- -------------
<S> <C> <C>
10 -- --
-- -- --
537,466 -- --
-- 2,239,505 --
-- -- 1,365,292
------- --------- ---------
537,466 2,239,505 1,365,292
------- --------- ---------
537,476 2,239,505 1,365,292
======= ========= =========
-- 236 43
------- --------- ---------
-- 236 43
537,476 2,239,269 1,365,249
------- --------- ---------
537,476 2,239,505 1,365,292
======= ========= =========
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
THE PFL WRIGHT VARIABLE ANNUITY ACCOUNT
STATEMENT OF OPERATIONS
Year Ended December 31, 1995
<TABLE>
<CAPTION>
WRIGHT
NEAR TERM
BOND
TOTAL SUBACCOUNT
----------- ----------
<S> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends............................................. $ 113,111 15,926
Expenses (Note 4):
Administration Fee.................................... 1,500 118
Mortality and expense risk charge..................... 36,045 3,473
----------- -------
Net investment income (loss)........................ 75,566 12,335
----------- -------
NET REALIZED AND UNREALIZED CAPITAL GAIN FROM
INVESTMENTS
Net realized capital gain from sales of investments:
Proceeds from sales................................... 1,414,553 302,860
Cost of investments sold.............................. 1,377,773 301,616
----------- -------
Net realized capital gain from sales of investments ... 36,780 1,244
Net change in unrealized appreciation/depreciation of
investments:
Beginning of the year................................. (141,333) (11,500)
End of the year....................................... 343,168 7,443
----------- -------
Net change in unrealized appreciation/depreciation
of investments..................................... 484,501 18,943
----------- -------
Net realized and unrealized capital gain from
investments........................................ 521,281 20,187
----------- -------
INCREASE FROM OPERATIONS............................... $ 596,847 32,522
=========== =======
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WRIGHT WRIGHT WRIGHT
TOTAL SELECTED INTERNATIONAL
RETURN BOND BLUE CHIP BLUE CHIP
SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------- ---------- -------------
<S> <C> <C>
22,811 67,617 6,757
238 692 452
4,947 15,479 12,146
------- ------- -------
17,626 51,446 (5,841)
------- ------- -------
240,590 424,039 447,064
233,846 400,982 441,329
------- ------- -------
6,744 23,057 5,735
(17,153) (44,839) (67,841)
27,893 260,715 47,117
------- ------- -------
45,046 305,554 114,958
------- ------- -------
51,790 328,611 120,693
------- ------- -------
69,416 380,057 114,852
======= ======= =======
</TABLE>
7
<PAGE>
- --------------------------------------------------------------------------------
THE PFL WRIGHT VARIABLE ANNUITY ACCOUNT
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY
Years Ended December 31, 1995 and 1994, Except as Noted
<TABLE>
<CAPTION>
WRIGHT
NEAR TERM
BOND
TOTAL SUBACCOUNT
--------------------- ------------------
1995 1994 1995 1994/1/
---------- --------- -------- --------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss)....... $ 75,566 19,280 12,335 10,388
Net realized capital gain (loss)... 36,780 (44,146) 1,244 (12,468)
Net change in unrealized
appreciation/depreciation of
investments....................... 484,501 (140,506) 18,943 (11,500)
---------- --------- -------- --------
Increase (decrease) from
operations........................ 596,847 (165,372) 32,522 (13,580)
---------- --------- -------- --------
CONTRACT TRANSACTIONS
Net contract purchase payments..... 1,071,758 3,722,425 77,059 775,759
Transfer payments from (to) other
subaccounts or general account.... (114,120) (13,566) (135,719) (310,263)
Contract terminations, withdrawals,
and other deductions.............. (736,613) (59,907) (99,131) --
---------- --------- -------- --------
Increase (decrease) from contract
transactions...................... 221,025 3,648,952 (157,791) 465,496
---------- --------- -------- --------
Net increase (decrease) in contract
owners' equity.................... 817,872 3,483,580 (125,269) 451,916
CONTRACT OWNERS' EQUITY
Beginning of the period............ 3,650,769 167,189 451,916 --
---------- --------- -------- --------
End of the period.................. $4,468,641 3,650,769 326,647 451,916
========== ========= ======== ========
</TABLE>
/1/Period from January 6, 1994 (commencement of operations) to December 31,
1994
See accompanying Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WRIGHT WRIGHT WRIGHT
TOTAL SELECTED INTERNATIONAL
RETURN BOND BLUE CHIP BLUE CHIP
SUBACCOUNT SUBACCOUNT SUBACCOUNT
-------------------- -------------------------- --------------------------
1995 1994 1995 1994/1/ 1995 1994/1/
-------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
17,626 14,282 51,446 859 (5,841) (6,249)
6,744 (23,120) 23,057 (4,908) 5,735 (3,650)
45,046 (16,326) 305,554 (44,839) 114,958 (67,841)
-------- -------- --------- --------- --------- ---------
69,416 (25,164) 380,057 (48,888) 114,852 (77,740)
-------- -------- --------- --------- --------- ---------
166,975 609,386 513,090 1,297,693 314,634 1,039,587
(173,228) (212,796) 237,738 225,791 (42,911) 283,702
(45,543) (18,759) (342,677) (23,535) (249,262) (17,613)
-------- -------- --------- --------- --------- ---------
(51,796) 377,831 408,151 1,499,949 22,461 1,305,676
-------- -------- --------- --------- --------- ---------
17,620 352,667 788,208 1,451,061 137,313 1,227,936
519,856 167,189 1,451,061 -- 1,227,936 --
-------- -------- --------- --------- --------- ---------
537,476 519,856 2,239,269 1,451,061 1,365,249 1,227,936
======== ======== ========= ========= ========= =========
</TABLE>
9
<PAGE>
- --------------------------------------------------------------------------------
THE PFL WRIGHT VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization -- The PFL Wright Variable Annuity Account ("Variable Account") is
a segregated investment account of PFL Life Insurance Company ("PFL Life"), an
indirect, wholly-owned subsidiary of AEGON USA, Inc. ("AUSA"), a holding
company. AUSA is an indirect, wholly-owned subsidiary of AEGON nv, a holding
company organized under the laws of The Netherlands.
The Wright Near Term Bond, Wright Selected Blue Chip and Wright International
Blue Chip subaccounts, commenced operations on January 6, 1994.
The Variable Account is registered with the Securities and Exchange Commission
as a Unit Investment Trust pursuant to provisions of the Investment Company Act
of 1940.
Investments -- Net purchase payments received by the Variable Account are
invested in the portfolios of the Wright Managed Blue Chip Series Trust as
selected by the contract owner. Investments are stated at the closing net asset
values per share on December 31, 1995.
Realized capital gains and losses from sale of shares in the mutual funds are
determined on the first-in, first-out basis. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed) and
dividend income is recorded on the ex-dividend date. Unrealized gains or losses
from investments in the mutual funds are credited or charged to contract
owners' equity.
Dividend Income -- Dividends received from the mutual funds investments are
reinvested to purchase additional mutual fund shares.
2. CONTRACT OWNERS' EQUITY
A summary of deferred annuity contracts terminable by owners at December 31,
1995 follows:
<TABLE>
<CAPTION>
ACCUMULATION
ACCUMULATION UNIT TOTAL
SUBACCOUNT UNITS OWNED VALUE CONTRACT VALUE
- ---------- ------------- ------------ --------------
<S> <C> <C> <C>
Wright Near Term Bond................ 312,204.941 $1.046259 $ 326,647
Wright Total Return Bond............. 509,157.449 1.055619 537,476
Wright Selected Blue Chip............ 1,934,519.692 1.157532 2,239,269
Wright International Blue Chip....... 1,380,932.622 0.988643 1,365,249
----------
$4,468,641
==========
</TABLE>
10
<PAGE>
- --------------------------------------------------------------------------------
A summary of changes in contract owners' account units follows:
<TABLE>
<CAPTION>
WRIGHT WRIGHT WRIGHT WRIGHT
NEAR TERM TOTAL SELECTED INTERNATIONAL
BOND RETURN BOND BLUE CHIP BLUE CHIP
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
Units outstanding at 1/1/94.. -- 168,578 -- --
Units purchased.............. 796,040 646,394 1,355,142 1,087,357
Units redeemed and trans-
ferred...................... (321,803) (245,094) 211,939 273,003
-------- -------- --------- ---------
Units outstanding at
12/31/94.................... 474,237 569,878 1,567,081 1,360,360
Units purchased.............. 75,750 160,589 465,414 324,834
Units redeemed and trans-
ferred...................... (237,782) (221,310) (97,975) (304,261)
-------- -------- --------- ---------
Units outstanding at
12/31/95.................... 312,205 509,157 1,934,520 1,380,933
======== ======== ========= =========
</TABLE>
3. TAXES
Operations of the Variable Account form a part of PFL Life, which is taxed as a
life insurance company under Subchapter L of the Internal Revenue Code of 1986,
as amended (the "Code"). The operations of the Variable Account are accounted
for separately from other operations of PFL Life for purposes of federal income
taxation. The Variable Account is not separately taxable as a regulated
investment company under Subchapter M of the Code and is not otherwise taxable
as an entity separate from PFL Life. Under existing federal income tax laws,
the income of the Variable Account, to the extent applied to increase reserves
under the variable annuity contracts, is not taxable to PFL Life.
4. ADMINISTRATIVE, MORTALITY AND EXPENSE RISK CHARGE
Administrative charges include an annual charge of $30 per contract which will
commence on the first policy anniversary of each contract owner's account.
Charges for administrative fees to the variable annuity contracts are an
expense of the Variable Account.
PFL Life deducts a daily charge equal to an annual rate of 1.00% of the value
of the contract owner's individual account as a charge for assuming certain
mortality and expense risks.
11
<PAGE>
- --------------------------------------------------------------------------------
5. NET ASSETS
At December 31, 1995 contract owners' equity was comprised of:
<TABLE>
<CAPTION>
WRIGHT WRIGHT WRIGHT WRIGHT
NEAR TERM TOTAL SELECTED INTERNATIONAL
BOND RETURN BOND BLUE CHIP BLUE CHIP
TOTAL SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Unit transactions, accu-
mulated net investment
income and realized
capital gains.......... $4,125,473 319,204 509,583 1,978,554 1,318,132
Adjustment for apprecia-
tion to market value... 343,168 7,443 27,893 260,715 47,117
---------- ------- ------- --------- ---------
Total Contract Owners'
Equity................. $4,468,641 326,647 537,476 2,239,269 1,365,249
========== ======= ======= ========= =========
</TABLE>
6. PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments were
as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31 OR COMMENCEMENT
OF OPERATIONS TO DECEMBER 31
----------------------------------------
1995 1994
-------------------- -------------------
PURCHASES SALES PURCHASES SALES
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Wright Managed Blue Chip Series Trust
Wright Near Term Bond Portfolio...... $ 157,665 302,860 987,147 511,535
Wright Total Return Bond Portfolio... 206,065 240,590 812,481 420,240
Wright Selected Blue Chip Portfolio.. 882,068 424,039 1,588,476 85,864
Wright International Blue Chip Port-
folio............................... 462,087 447,064 1,413,534 112,467
---------- --------- --------- ---------
$1,707,885 1,414,553 4,801,638 1,130,106
========== ========= ========= =========
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
THIS PAGE LEFT BLANK INTENTIONALLY
13
<PAGE>
- --------------------------------------------------------------------------------
THIS PAGE LEFT BLANK INTENTIONALLY
14
<PAGE>
- --------------------------------------------------------------------------------
THIS PAGE LEFT BLANK INTENTIONALLY
15
<PAGE>
- --------------------------------------------------------------------------------
THIS PAGE LEFT BLANK INTENTIONALLY
