[Janus Logo]
Janus Retirement Advantage(R)
Variable Annuity
Issued Through
WRL SERIES ANNUITY ACCOUNT B
By
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
PROSPECTUS
MAY 1, 1999
This prospectus gives you important information
about the Janus Retirement Advantage, a flexible
payment variable accumulation deferred annuity.
Please read this prospectus and the prospectus for
the Janus Aspen Series before you invest and keep
them for future reference. This Contract is
available to individuals and can be used with
individual retirement plans.
You can put your money into 12 investment choices: a
fixed account and 11 subaccounts of the WRL Series
Annuity Account B. Money you put in a subaccount is
invested exclusively in a single mutual fund
portfolio of the Janus Aspen Series. Your
investments in the Janus portfolios are not
guaranteed. You could lose your money. Money you
direct into the fixed account earns interest at a
rate guaranteed by Western Reserve.
The 11 portfolios we currently offer through the
subaccounts under this Contract are:
JANUS ASPEN SERIES
<TABLE>
<S> <C>
Growth Portfolio Equity Income Portfolio
Aggressive Growth Growth and Income
Portfolio Portfolio
Capital Appreciation Flexible Income Portfolio
Portfolio High-Yield Portfolio
International Growth Money Market Portfolio
Portfolio
Worldwide Growth Portfolio
Balanced Portfolio
</TABLE>
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED
OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
[JANUS LOGO]
1-800-504-4440
P.O. Box 173401
Denver, Colorado 80217-3401
janus.com
If you would like more information about the Janus Retirement
Advantage, you can obtain a free copy of the Statement of Additional
Information (SAI) dated May 1, 1999. Please call us at
1-800-504-4440 or write us at: Western Reserve, P.O. Box 9052,
Clearwater, Florida 33758-9052. A registration statement, including
the SAI, has been filed with the Securities and Exchange Commission
(SEC) and is incorporated herein by reference. The SEC maintains a
web site (http://www.sec.gov) that contains the prospectus, the SAI,
material incorporated by reference and other information. The table
of contents of the SAI is included at the end of this prospectus.
PLEASE NOTE THAT THE CONTRACT AND THE JANUS PORTFOLIOS:
- - ARE NOT BANK DEPOSITS
- - ARE NOT FEDERALLY INSURED
- - ARE NOT ENDORSED BY ANY BANK OR GOVERNMENT AGENCY
- - ARE NOT GUARANTEED TO ACHIEVE THEIR GOAL
- - INVOLVE RISKS, INCLUDING POSSIBLE LOSS OF PREMIUM
Investment Company Act File No. 000-0000
0000
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Table - of contents
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<S> <C>
DEFINITIONS OF SPECIAL TERMS.................... 3
SUMMARY......................................... 6
ANNUITY CONTRACT FEE TABLE...................... 12
EXAMPLE......................................... 13
1. THE ANNUITY CONTRACT........................ 14
2. ANNUITY PAYMENTS (THE INCOME PHASE)......... 15
Annuity Payment Options.................... 15
Fixed Annuity Options...................... 17
Variable Annuity Options................... 18
3. PURCHASE.................................... 20
Contract Issue Requirements................ 20
Purchase Payments.......................... 20
Initial Purchase Requirements.............. 20
Additional Purchase Payments............... 21
Maximum Annual Purchase Payments........... 21
Allocation of Purchase Payments............ 22
Annuity Value.............................. 22
Accumulation Units......................... 22
4. INVESTMENT CHOICES.......................... 24
The Separate Account....................... 24
Janus Aspen Series......................... 24
The Fixed Account.......................... 24
Transfers.................................. 25
Systematic Exchanges....................... 27
Asset Rebalancing Program.................. 27
Telephone Transactions..................... 28
5. EXPENSES.................................... 29
Surrenders and Partial Withdrawals......... 29
Mortality and Expense Risk Charge.......... 29
Administrative Charge...................... 29
Annual Contract Charge..................... 29
Premium Taxes.............................. 30
Federal, State and Local Taxes............. 30
Transfer Charge............................ 30
Portfolio Management Fees.................. 31
</TABLE>
Table of contents 1
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<TABLE>
<S> <C>
6. TAXES....................................... 32
Annuity Contracts in General............... 32
Qualified and Non-Qualified Contracts...... 32
Withdrawals - Non-Qualified Contracts...... 33
Withdrawals - Qualified Contracts.......... 34
Diversification and Distribution
Requirements............................. 34
Multiple Contracts......................... 34
Partial Withdrawals and Surrenders
- Qualified Contracts ................... 35
Taxation of Death Benefit Proceeds......... 35
Annuity Payments........................... 36
Transfers, Assignments or Exchanges of
Contracts................................ 37
Possible Tax Law Changes................... 37
7. ACCESS TO YOUR MONEY........................ 38
Surrenders and Withdrawals................. 38
Delay of Payment and Transfers............. 39
Systematic Partial Withdrawals............. 40
8. PERFORMANCE................................. 41
9. DEATH BENEFIT............................... 42
When We Pay A Death Benefit................ 42
When We Do Not Pay A Death Benefit......... 43
Amount of Death Benefit.................... 43
Alternate Payment Elections................ 44
10. OTHER INFORMATION........................... 45
Ownership.................................. 45
Assignment................................. 45
Western Reserve Life Assurance Co. of
Ohio..................................... 45
The Separate Account....................... 45
Voting Rights.............................. 46
Distributor of the Contracts............... 47
Non-participating Contract................. 47
Variations in Contract Provisions.......... 47
Year 2000 Readiness Disclosure............. 48
IMSA....................................... 48
Legal Proceedings.......................... 49
Financial Statements....................... 49
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL
INFORMATION................................... 50
APPENDIX A
Condensed Financial Information............ 51
APPENDIX B
Historical Performance Data................ 55
</TABLE>
2 Janus Retirement Advantage Variable Annuity
<PAGE>
Definitions of - special terms
accumulation period The period between the Contract Date and the
maturity date while the Contract is in force.
accumulation unit value An accounting unit of measure used to calculate
subaccount values during the accumulation
period.
age The issue age, which is annuitant's age on the
birthday nearest the Contract date, plus the
number of completed Contract years. When we use
the term "age" in this prospectus, it has the
same meaning as "attained age" in the Contract.
annuitant The person named in the application, or as
subsequently changed, to receive annuity
payments. The annuitant may be changed as
provided in the Contract's death benefit
provisions and annuity provision.
annuity value The sum of the separate account value and the
fixed account value.
annuity unit value An accounting unit of measure used to calculate
annuity payments from certain subaccounts after
the maturity date.
beneficiary(ies) The person(s) entitled to receive the death
benefit proceeds under the Contract.
Cash Value The annuity value less any applicable premium
taxes.
Code The Internal Revenue Code of 1986, as amended.
Contract Date The later of the date on which the initial
purchase payment is received and the date that
the properly completed application is received
at Western Reserve's administrative office.
fixed account An allocation option under the Contract, other
than the separate account, that provides for
accumulation of purchase payments, and options
for annuity payments on a fixed basis. For
Definitions of special terms 3
<PAGE>
Contracts issued in the State of Washington,
the fixed account is not available for
allocation of purchase payments or transfers.
fixed account value During the accumulation period, a Contract's
value allocated to the fixed account.
in force Condition under which the Contract is active
and the owner is entitled to exercise all
rights under the Contract.
maturity date The date on which the accumulation period ends
and annuity payments begin.
Non-Qualified Contracts Contracts issued other than in connection with
retirement plans. Non-Qualified Contracts do
not qualify for special Federal income tax
treatment under the Code.
owner, you, your The person(s) entitled to exercise all rights
under the Contract. The annuitant is the owner
unless the application states otherwise, or
unless a change of ownership is made at a later
time.
portfolio A separate investment portfolio of the Trust.
purchase payments Amounts paid by an owner or on the owner's
behalf to Western Reserve as consideration for
the benefits provided by the Contract. When we
use the term "purchase payment" in this
prospectus, it has the same meaning as "net
purchase payment" in the Contract, which means
the purchase payment less any applicable
premium taxes.
Qualified Contracts Contracts issued in connection with retirement
plans that qualify for special Federal income
tax treatment under the Code.
separate account WRL Series Annuity Account B, a separate
account composed of subaccounts established to
4 Janus Retirement Advantage Variable Annuity
<PAGE>
receive and invest purchase payments not
allocated to the fixed account.
separate account value During the accumulation period, a Contract's
value in the separate account, which equals the
total value in each subaccount during the
accumulation period.
subaccount A sub-division of the separate account that
invests exclusively in the shares of a
specified portfolio and supports the Contracts.
Subaccounts corresponding to each applicable
portfolio hold assets under the Contract during
the accumulation period. Other subaccounts
corresponding to each applicable portfolio will
hold assets after the maturity date if a
variable annuity option is selected.
surrender The termination of a Contract at the option of
the owner.
Trust Janus Aspen Series, an investment company
registered with the U.S. Securities and
Exchange Commission.
Valuation Date Each day on which the New York Stock
Exchange is open for trading, except when a
subaccount's corresponding portfolio does not
value its shares.
Valuation Period The period beginning at the end of one
Valuation Date and continuing to the end of the
next succeeding Valuation Date.
Definitions of special terms 5
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Summary -
THE SECTIONS IN THIS SUMMARY CORRESPOND TO SECTIONS IN THIS
PROSPECTUS, WHICH DISCUSS THE TOPICS IN MORE DETAIL. PLEASE READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
1. THE ANNUITY CONTRACT
The Janus Retirement Advantage(R) is a flexible payment variable
deferred annuity contract (the "Contract") offered by Western
Reserve Life Assurance Co. of Ohio (Western Reserve, we, us). It
is a contract between you, as the owner, and Western Reserve, a
life insurance company. The Contract provides a way for you to
invest on a tax-deferred basis in the subaccounts of the separate
account and the fixed account. We intend the Contract to be used
to accumulate money for retirement or other long-term investment
purposes.
The Contract allows you to direct your money into any of the 11
subaccounts. Each subaccount invests exclusively in a single
portfolio of the Janus Aspen Series (the "Trust") listed in
Section 4. The money you invest in the subaccounts will fluctuate
daily based on the portfolio's investment results. The value of
your investment in the subaccounts is not guaranteed and may
increase or decrease. You bear the investment risk for amounts
you invest in the subaccounts.
You can also direct money to the fixed account. Amounts in the
fixed account earn interest annually at a fixed rate that is
guaranteed by us never to be less than 4%, and may be more. We
guarantee the interest, as well as principal, on money placed in
the fixed account.
You can transfer money between any of the investment choices.
The Contract, like all deferred annuity contracts, has two
phases: the "accumulation period" and the "income phase." During
the accumulation period, earnings accumulate on a tax-deferred
basis and are taxed as income when you take them out of the
Contract. The income phase starts on the maturity date when you
begin receiving regular payments from your Contract. The money
you can accumulate during the accumulation period, as well as the
6 Janus Retirement Advantage Variable Annuity
<PAGE>
annuity payment option you choose, will determine the amount of
any income payments you receive during the income phase.
2. ANNUITY PAYMENTS (THE INCOME PHASE)
The Contract allows you to receive income under one of five
annuity payment options. You may choose from fixed payment
options or variable payment options. If you select a variable
payment option, the dollar amount of the payments you receive may
go up or down depending on the investment results of the
portfolios you invest in at that time.
3. PURCHASE
You can buy this Contract with $2,500 or more under most
circumstances. You can add as little as $100 at any time during
the accumulation period.
4. INVESTMENT CHOICES
You can invest your money in any of the 11 portfolios of the
Trust by directing it to the corresponding subaccount. The
portfolios are described in the prospectuses for the Trust. The
portfolios now available to you under the Contract are:
11 PORTFOLIOS OF THE JANUS ASPEN SERIES
Growth Portfolio
Aggressive Growth Portfolio
Capital Appreciation Portfolio
International Growth Portfolio
Worldwide Growth Portfolio
Balanced Portfolio
Equity Income Portfolio
Growth and Income Portfolio
Flexible Income Portfolio
High-Yield Portfolio
Money Market Portfolio
Summary 7
<PAGE>
Depending upon market conditions, you can make or lose money in
any of these subaccounts. We reserve the right to offer other
investment choices in the future.
You can also allocate your purchase payments to the fixed
account.
5. EXPENSES
We do not take any deductions from purchase payments at the time
you buy the Contract. You invest the full amount of each purchase
payment in one or more of the investment choices.
We deduct from the daily net assets a mortality and expense risk
charge of 0.50% and an administrative charge of 0.15% each year
from the money you have invested in the subaccounts.
During the accumulation period, we deduct an Annual Contract
Charge of $30 from the annuity value on each Contract anniversary
and at the time of surrender. Deduction of the Annual Contract
Charge is currently waived when the annuity value on the
anniversary is equal to or greater than $25,000.
We impose a $10 charge per transfer if you make more than 12
transfers among the subaccounts per Contract year.
We will deduct state premium taxes, which currently range from 0%
to 3.50%, if:
- you surrender the Contract; or
- partially withdraw its value; or
- we pay out death benefit proceeds; or
- you begin to receive regular annuity payments.
We only charge you premium taxes in those states that require us
to pay premium taxes.
The portfolios deduct investment charges from amounts you have
invested in the portfolios. These charges range from 0.25% to
0.75% annually, depending on the portfolio. See the prospectuses
for the Trust and the Fee Table in this prospectus.
8 Janus Retirement Advantage Variable Annuity
<PAGE>
6. TAXES
The Contract's earnings are generally not taxed until you take
them out. For Federal tax purposes, if you take money out during
the accumulation period, earnings come out first and are taxed as
ordinary income. If you are younger than 59 1/2 when you take
money out, you may be charged a 10% Federal penalty tax on the
earnings. The annuity payments you receive during the income
phase are considered partly a return of your original investment
so that part of each payment is not taxable as income. Different
tax consequences may apply for a Contract used in connection with
a qualified plan.
7. ACCESS TO YOUR MONEY
You can take some or all of your money out anytime during the
accumulation period. However, you may not take a partial
withdrawal if it reduces the Cash Value below $2,500. No
withdrawals may be made from the fixed account without prior
consent from us. You may also have to pay Federal income tax and
a penalty tax on any money you take out. No surrender charges
apply.
8. PERFORMANCE
The value of your Contract will vary up or down depending upon
the investment performance of the subaccounts you choose and will
be reduced by Contract fees and charges. We provide performance
information in Appendix B and in the SAI. Past performance does
not guarantee future results.
9. DEATH BENEFIT
If you are both the owner and the annuitant and you die before
the income phase begins, your beneficiary will receive a death
benefit.
If you name different persons as owner and annuitant, you can
affect whether the death benefit is payable and who would receive
it. Use care when naming owners, annuitants and beneficiaries.
Summary 9
<PAGE>
The death benefit will be the greater of:
- the value of your Contract on the date we receive proof of
death and your beneficiary's election regarding payment; and
- the total purchase payments you make to the Contract, less
partial withdrawals.
10. OTHER INFORMATION
RIGHT TO CANCEL PERIOD. You may return your Contract for a refund
within 10 days after you receive it. The amount of the refund
will generally be the total purchase payments we have received,
plus (or minus) any gains (or losses) in the amounts you invested
in the subaccounts. We determine the value of the refund as of
the date we receive the returned Contract. We will pay the refund
within 7 days after we receive your written notice of
cancellation and the returned Contract. The Contract will then be
deemed void. In some states you may have more than 10 days, or
receive a different refund amount.
WHO SHOULD PURCHASE THE CONTRACT? We have designed this Contract
for people seeking long-term tax deferred accumulation of assets,
generally for retirement. This includes persons who have
maximized their use of other retirement savings methods, such as
401(k) plans and individual retirement accounts. The tax-deferred
feature is most attractive to people in high Federal and state
tax brackets. You should not buy this Contract if you are looking
for a short-term investment or if you cannot take the risk of
getting back less money than you put in.
ADDITIONAL FEATURES. This Contract has additional features that
might interest you. These include the following:
- SYSTEMATIC PARTIAL WITHDRAWALS: You can arrange to have money
automatically sent to you monthly, quarterly, semi-annually, or
annually while your Contract is in the accumulation period.
Amounts you receive may be included in your gross income, and,
in certain circumstances, may be subject to penalty taxes.
10 Janus Retirement Advantage Variable Annuity
<PAGE>
- SYSTEMATIC EXCHANGES: You can arrange to have a certain amount
of money automatically transferred monthly from one or any
combination of the Money Market, Flexible Income, High-Yield
subaccounts or the fixed account into your choice of
subaccounts. This is also known as dollar cost averaging, a
long-term investment method which provides for regular, level
investments over time. Systematic Exchanges do not guarantee a
profit or protect against a loss if market prices decline.
- ASSET REBALANCING: We will automatically transfer amounts among
the subaccounts on a regular basis to maintain a desired
allocation of the annuity value among the various subaccounts.
- TELEPHONE TRANSACTIONS: You may make transfers, change the
allocation of additional purchase payments and/or make
additional purchase payments by telephone.
These features are not available in all states and may not be
suitable for your particular situation.
Certain states place restrictions on access to the fixed account,
on the death benefit calculation and on other features of the
Contract. Consult your Contract form for details.
11. INQUIRIES
If you need additional information, please contact us at:
Western Reserve Life
Annuity Department
P.O. Box 9052
Clearwater, FL 33758-9052
1-800-504-4440
Summary 11
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Annuity contract - fee table
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<CAPTION>
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SEPARATE ACCOUNT ANNUAL EXPENSES
Owner Transaction Expenses (as a percentage of average account value)
-------------------------------------------------------------------------------------
<S> <C> <C>
Sales Load On Purchase Payments..None Mortality and Expense Risk Charge.. 0.50%
Maximum Withdrawal Charge........None Administrative Charge.............. 0.15%
Transfer Charge.............$10 after -----
12 per Contract year TOTAL SEPARATE ACCOUNT ANNUAL
EXPENSES........................... 0.65%
-------------------------------------
OTHER EXPENSES
-------------------------------------
Annual Contract Charge*.......$30 per
Contract Year
* We waive the Annual Contract Charge
when the annuity value on the
anniversary is equal to or greater
than $25,000.
-------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO ANNUAL EXPENSES(1)
(as a percentage of average net assets)
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Total Annual
Total Annual Portfolio
Portfolio Total Operating
Operating Expenses Waivers Expenses with
Janus Aspen Series Management Other Without Waivers or And Waivers or
Portfolios Fee Expenses Reductions Reductions Reductions(2)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Growth 0.72% 0.03% 0.75% 0.07% 0.68%
Aggressive Growth 0.72% 0.03% 0.75% N/A 0.75%
Capital Appreciation 0.75% 0.22% 0.97% 0.05% 0.92%
International Growth 0.75% 0.20% 0.95% 0.09% 0.86%
Worldwide Growth 0.67% 0.07% 0.74% 0.02% 0.72%
Balanced 0.72% 0.02% 0.74% N/A 0.74%
Equity Income 0.75% 1.11% 1.86% 0.61% 1.25%
Growth and Income(3) 0.75% 2.31% 3.06% 1.81% 1.25%
Flexible Income 0.65% 0.08% 0.73% N/A 0.73%
High-Yield 0.75% 1.36% 2.11% 1.11% 1.00%
Money Market 0.25% 0.09% 0.34% N/A 0.34%
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</TABLE>
(1) The fee table information relating to the Janus portfolios is for 1998 and
was provided to Western Reserve by the Trust. Western Reserve has not
independently verified such information.
(2) All portfolio expenses are stated both with and without contractual waivers
and fee reductions by Janus Capital. Janus Capital has agreed to continue
the waivers and fee reductions until at least the next annual renewal of the
advisory agreements.
(3) Because Growth and Income commenced operations on May 1, 1998, the
percentages set forth as "Other Expenses" and "Total Portfolio Annual
Expenses" are annualized.
12 Janus Retirement Advantage Variable Annuity
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- Example
You would pay the following expenses on a $1,000 investment,
assuming a hypothetical 5% annual return on assets, and assuming
the entire $1,000 is invested in the subaccount listed.
<TABLE>
<CAPTION>
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If the Contract is surrendered or annuitized
at the end of the applicable time period
Subaccounts 1 Year 3 Years 5 Years 10 Years
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<S> <C> <C> <C> <C>
Growth $14 $43 $ 74 $164
Aggressive Growth $15 $46 $ 80 $175
Capital Appreciation $16 $51 $ 88 $192
International Growth $16 $50 $ 86 $187
Worldwide Growth $15 $45 $ 78 $171
Balanced $15 $46 $ 79 $174
Equity Income $20 $62 $106 $229
Growth and Income $20 $62 $106 $229
Flexible Income $15 $46 $ 79 $172
High-Yield $17 $54 $ 93 $202
Money Market $11 $33 $ 58 $128
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</TABLE>
The table above will help you understand the costs of investing
in the subaccounts. The table reflects the 1998 expenses of the
portfolios of the Trust and the subaccount fees and charges
without waivers or reductions. The table does not reflect premium
taxes which may range up to 3.5%, depending on the jurisdiction.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS HYPOTHETICAL AND
DOES NOT REPRESENT PAST OR FUTURE ANNUAL RETURNS. ACTUAL RETURNS
MAY BE GREATER OR LESS THAN THE ASSUMED RATE.
In this example, the $30 Annual Contract Charge is reflected as a
charge of 0.06% based on an average Contract value of $50,087.
There is a financial history of each subaccount in Appendix A to
this prospectus. See Appendix A - Condensed Financial
Information.
Example 13
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1. The annuity - contract
This prospectus describes the Janus Retirement Advantage Variable
Annuity Contract offered by Western Reserve.
An annuity is a contract between you, the owner, and an insurance
company (in this case Western Reserve), where the insurance
company promises to pay you an income in the form of annuity
payments. These payments begin after the maturity date. (See
Section 2.) Until the maturity date, your annuity is in the
accumulation period and the earnings are tax deferred. Tax
deferral means you generally are not taxed on your annuity until
you take money out of your annuity. After the maturity date, your
annuity switches to the income phase.
The Contract is a flexible purchase variable annuity. You can use
the Contract to accumulate funds for retirement or other long-
term financial planning purposes.
It is a "flexible purchase" Contract because after you purchase
it, you can generally make additional investments of $100 or
more, until the maturity date. But you are not required to make
any additional investments.
The Contract is a "variable" annuity because the value of your
Contract can go up or down based on the performance of your
investment choices. If you select the variable annuity portion of
the Contract, the amount of money you are able to accumulate in
your Contract during the accumulation period depends upon the
performance of your investment choices. The amount of annuity
payments you receive during the income phase from the variable
annuity portion of your Contract also depends upon the investment
performance of your investment choices for the income phase.
The Contract also contains a fixed account. The fixed account
offers an interest rate that is guaranteed by Western Reserve to
equal at least 4% per year. There may be different interest rates
for each payment or transfer you direct to the fixed account. The
interest rates we set will be credited for periods of at least
one year measured from each payment or transfer date.
14 Janus Retirement Advantage Variable Annuity
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2. Annuity - payments
(the income phase)
You choose the date when annuity payments under the Contract
start. This is the maturity date. You can change this date by
giving us 30 days written notice. The maturity date cannot be
earlier than the end of the fifth Contract year. The latest
annuity maturity date is the Contract month following the month
in which the annuitant reaches age 90.
ELECTION OF ANNUITY PAYMENT OPTION. Before the maturity date, if
the annuitant is alive, you may choose an annuity payment option
or change your option. If you do not choose an annuity option by
the maturity date, we will make payments under Option D (see
below) as a Variable Life Income with 10 years of guaranteed
payments. You cannot change the annuity payment option after the
maturity date.
If you choose a variable payment option, you must specify how you
want the annuity proceeds divided among the subaccounts as of the
maturity date. If you do not specify, we will allocate the
annuity proceeds in the same proportion as the annuity value is
allocated among the investment options on the maturity date.
Unless you specify otherwise, the annuitant named on the
application will receive the annuity payments. As of the maturity
date, you can change the annuitant or add a joint annuitant, so
long as we agree. If you do not choose an annuitant, we will
consider you to be the annuitant.
SUPPLEMENTAL CONTRACT. Once you annuitize and you have selected a
fixed payment option, the Contract will end and we will issue a
supplemental Contract to describe the terms of the option you
selected. The supplemental Contract will name who will receive
the annuity payments and describe when the annuity payments will
be made.
ANNUITY PAYMENT OPTIONS
The Contract provides five annuity payment options that are
described below. You can choose to receive payments monthly,
quarterly, semi-annually, or annually.
2. Annuity payments (the income phase) 15
<PAGE>
We will use your "annuity proceeds" to provide these payments.
The "annuity proceeds" is your annuity value on the maturity
date, less any premium tax that may apply. If your annuity
payment would be less than $100, then we will pay you the annuity
proceeds in one lump sum.
FIXED ANNUITY INCOME PAYMENTS. If you choose annuity payment
Option A, B or C, the dollar amount of each annuity payment will
be fixed on the maturity date and guaranteed by us. The payment
amount will depend on five things:
- The amount of the annuity proceeds on the maturity date;
- The gender of the annuitant;
- The age of the annuitant or beneficiary;
- The interest rate we credit on those amounts (we guarantee a
minimum annual interest rate of 3%); and
- The specific payment option you choose.
We may, in our discretion, increase the amount of a payment once
payments begin.
VARIABLE ANNUITY INCOME PAYMENTS. If you choose variable annuity
payment Option D or E, the dollar amount of the first variable
payment will be determined in accordance with the annuity payment
rates set forth in the applicable table contained in the
Contract. The dollar amount of each additional variable payment
will vary based on the investment performance of the
subaccount(s) you invest in and the Contract's assumed investment
return of 5%. The dollar amount of each variable payment after
the first may increase, decrease or remain constant. If, after
all charges are deducted, the actual investment performance
exactly matches the Contract's assumed investment return of 5% at
all times, then the amount of the next variable annuity payment
will remain equal. If actual investment performance, after all
charges are deducted, exceeds the assumed investment return, then
the amount of the variable annuity payments would increase. But,
if actual investment performance, less charges, is lower than
16 Janus Retirement Advantage Variable Annuity
<PAGE>
the 5% assumed investment return, then the amount of the variable
annuity payments would decrease. The portfolio in which you are
invested must grow at a rate at least equal to the 5% assumed
investment return (plus the mortality and expense risk charge and
the administrative charge) in order to avoid a decrease in the
dollar amount of variable annuity payments. For more information
or how variable annuity income payments are determined, see the
SAI.
The annuity payment options are explained below. Options A, B,
and C are fixed only. Options D and E are variable only.
FIXED ANNUITY OPTIONS
PAYMENT OPTION A - FIXED INSTALLMENTS: We will pay the annuity in
equal payments over a fixed period of 5, 10, 15 or 20 years or
any other fixed period acceptable to Western Reserve.
PAYMENT OPTION B - LIFE INCOME - FIXED PAYMENTS:
- No Period Certain - We will make level payments only during the
annuitant's lifetime; or
- 10 Years Certain - We will make level payments for the longer
of the annuitant's lifetime or ten years; or
- Guaranteed Return of Annuity Proceeds - We will make level
payments for the longer of the annuitant's lifetime or until
the total dollar amount of payments we made to you equals the
annuity proceeds.
PAYMENT OPTION C - JOINT AND SURVIVOR LIFE INCOME - FIXED
PAYMENTS:
- We will make level payments during the joint lifetime of the
annuitant and a co-annuitant of your choice. Payments will be
made as long as either person is living.
2. Annuity payments (the income phase) 17
<PAGE>
VARIABLE ANNUITY OPTIONS
PAYMENT OPTION D - VARIABLE LIFE INCOME: The annuity proceeds are
used to purchase annuity units of the subaccounts you select. You
may choose between:
- No Period Certain - We will make variable payments only during
the annuitant's lifetime; or
- 10 Years Certain - We will make variable payments for the
longer of the annuitant's lifetime or ten years.
PAYMENT OPTION E - VARIABLE JOINT AND SURVIVOR LIFE INCOME:
- We will make variable payments during the joint lifetime of the
annuitant and a co-annuitant of your choice. Payments will be
made as long as either person is living.
NOTE CAREFULLY:
IF:
- you choose Life Income with No Period Certain or a Joint and
Survivor Life Income (fixed or variable); and
- the annuitant(s) dies before the due date of the second annuity
payment;
THEN:
- we may make only one annuity payment.
IF:
- you choose Fixed Installments, Life Income with 10 years
Certain or Guaranteed Return of Annuity Proceeds; and
- the person receiving payments dies prior to the end of the
guaranteed period;
THEN:
- the remaining guaranteed payments will be continued to that
person's beneficiary, or their value (determined at the date of
death) may be paid in a single sum.
18 Janus Retirement Advantage Variable Annuity
<PAGE>
We will not pay interest on amounts represented by uncashed
annuity payment checks if the postal or other delivery service is
unable to deliver checks to the payee's address of record. The
payee is responsible to keep Western Reserve informed of the
payee's current address of record.
2. Annuity payments (the income phase) 19
<PAGE>
3. - Purchase
CONTRACT ISSUE REQUIREMENTS
Western Reserve will issue a Contract
IF:
- we receive the information we need to issue the Contract;
- we receive a minimum initial purchase payment; and
- you are age 85 or younger.
PURCHASE PAYMENTS
You should make checks or drafts for purchase payments payable
only to "Western Reserve" and send them to the administrative
office. Your check or draft must be honored in order for Western
Reserve to pay any associated payments and benefits due under the
Contract.
INITIAL PURCHASE REQUIREMENTS
The initial purchase payment for most Contracts must be at least
$2,500. We will credit your initial purchase payment to your
Contract within two business days after the day we receive it and
your complete Contract information. If we are unable to credit
your initial purchase payment, we will contact you within five
business days and explain why. We will also return your initial
purchase payment at that time unless you tell us to keep it. We
will credit it as soon as we receive all necessary application
information.
The date on which we credit your initial purchase payment to your
Contract is the Contract Date. The Contract Date is used to
determine Contract years, Contract months and Contract
anniversaries.
You may wire your initial purchase payment to us. You must send
an application by facsimile ("faxed application") at the same
time that you send the wire transfer. The faxed application
should be faxed to 1-727-299-1620.
20 Janus Retirement Advantage Variable Annuity
<PAGE>
We will follow the same procedures for completing your
application and crediting your initial purchase payment as are
discussed above. When the faxed application contains all the
information we need to issue your Contract and credit your
payment, but you did not sign the faxed application, we will
issue your Contract and credit your payment according to the
allocation instructions you specified in the faxed application.
We will also send you a new application for your signature that
will contain all the information on the faxed application. You
must sign the new application and return it to us.
If the allocation instructions on the signed application you
returned to us do not match the instructions on the faxed
application, we will reallocate your annuity value to fit the
allocation instructions on the signed application. We will effect
the reallocation at the accumulation unit value next determined
after we receive the signed application.
If you wish to make payments by bank wire, you should instruct
your bank to wire Federal Funds to us. Please contact us at
1-800-504-4440 for complete wire instructions.
We may reject any application or purchase payments for any reason
permitted by law.
ADDITIONAL PURCHASE PAYMENTS
You are not required to make any additional purchase payments.
However, you can make additional purchase payments as often as
you like during the lifetime of the annuitant and prior to the
maturity date. Additional purchase payments must be at least $100
($1,000 if by wire). We will credit additional purchase payments
to your Contract as of the business day we receive your purchase
payment and required information.
MAXIMUM ANNUAL PURCHASE PAYMENTS
We allow purchase payments up to a total of $1,000,000 per
Contract year without prior approval.
3. Purchase 21
<PAGE>
ALLOCATION OF PURCHASE PAYMENTS
When you purchase a Contract, we will allocate your purchase
payment to the investment choices you select. Your allocation
must be in whole percentages and must total 100%. We may in the
future require that you allocate at least 10% of each payment to
any particular investment choice. No fractional percentages are
permitted. We will allocate additional purchase payments the same
way, unless you request a different allocation.
You may change allocations for future additional purchase
payments by sending written instructions or by telephone, subject
to the limitations described below under "Telephone
Transactions." The allocation change will apply to purchase
payments received after the date we receive the change request.
You should review periodically how your payments are divided
among the subaccounts because market conditions and your overall
financial objective may change.
ANNUITY VALUE
You should expect your annuity value to change from Valuation
Period to Valuation Period to reflect the investment performance
of the portfolios, the interest credited to your value in the
fixed account, and the fees and charges we deduct. A Valuation
Period begins at the close of business on each business day and
ends at the close of business on the next succeeding business
day. A business day is any day the New York Stock Exchange is
open. Our business day closes when the New York Stock Exchange
closes, usually 4:00 P.M. Eastern time. We observe the same
holidays as the New York Stock Exchange.
ACCUMULATION UNITS
We measure the value of your Contract during the accumulation
period by using a unit called an accumulation unit. During the
income phase, we call the unit an annuity unit. When you direct
money into a subaccount, we credit your Contract with
accumulation units for that subaccount. We determine how many
22 Janus Retirement Advantage Variable Annuity
<PAGE>
accumulation units to credit by dividing the dollar amount you
direct to the subaccount by the subaccount's accumulation unit
value as of the end of that business day. If you withdraw or
transfer out of a subaccount, or if we assess a transfer or
Annual Contract Charge, we subtract accumulation units from the
subaccounts using the same method.
Each subaccount's accumulation unit value was set at $10 when the
subaccount started. We recalculate the accumulation unit value
for each subaccount at the close of each business day. The new
value reflects the investment performance of the underlying
portfolio and the daily deduction of the mortality and expense
risk charge and the administrative charge. For a detailed
discussion of how we determine accumulation unit values, see the
SAI.
3. Purchase 23
<PAGE>
4. Investment - choices
THE SEPARATE ACCOUNT
The separate account currently consists of eleven subaccounts.
JANUS ASPEN SERIES
Each subaccount invests exclusively in one portfolio of the
Trust. Janus Capital serves as the investment adviser to each
portfolio. The portfolios are listed below.
Growth Portfolio
Aggressive Growth Portfolio
Capital Appreciation Portfolio
International Growth Portfolio
Worldwide Growth Portfolio
Balanced Portfolio
Equity Income Portfolio
Growth and Income Portfolio
Flexible Income Portfolio
High-Yield Portfolio
Money Market Portfolio
The general public may not purchase these portfolios. Their
investment objective and policies may be similar to other
portfolios and mutual funds managed by the same investment
adviser that are sold directly to the public. You should not
expect that the investment results of the other portfolios and
mutual funds would be similar to those of the portfolios offered
by this prospectus.
THERE IS NO ASSURANCE THAT A PORTFOLIO WILL ACHIEVE ITS STATED
OBJECTIVE. MORE DETAILED INFORMATION, INCLUDING AN EXPLANATION OF
EACH PORTFOLIO'S INVESTMENT OBJECTIVE, MAY BE FOUND IN THE
TRUST'S CURRENT PROSPECTUS, WHICH IS ATTACHED TO THIS PROSPECTUS.
YOU SHOULD READ THE PROSPECTUS FOR THE TRUST CAREFULLY BEFORE YOU
INVEST.
THE FIXED ACCOUNT
Purchase payments allocated and amounts transferred to the fixed
account become part of the general account of Western Reserve.
24 Janus Retirement Advantage Variable Annuity
<PAGE>
Interests in the general account have not been registered under
the Securities Act of 1933 (the "1933 Act"), nor is the general
account registered as an investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"). Accordingly,
neither the general account nor any interests therein are
generally subject to the provisions of the 1933 or 1940 Acts.
Western Reserve has been advised that the staff of the SEC has
not reviewed the disclosures in this prospectus which relate to
the fixed account.
We guarantee that the interest credited to the fixed account will
not be less than 4% per year. We have no formula for determining
fixed account interest rates. We established the interest rate,
at our sole discretion, for each purchase payment or transfer
into the fixed account. Rates are guaranteed for at least one
year.
If you select the fixed account, your money will be placed with
the other general assets of Western Reserve. All assets in our
general account are subject to the general liabilities of our
business operations. The amount of money you are able to
accumulate in the fixed account during the accumulation period
depends upon the total interest credited. The amount of annuity
payments you receive during the income phase under a fixed
annuity option will remain level for the entire income phase.
When you request a transfer or partial withdrawal from the fixed
account, we will account for it on a last-in, first-out ("LIFO")
basis, for purposes of crediting your interest. This means that
we will take the deduction from the most recent money you have
put in the fixed account.
Washington State residents: The fixed account is NOT available to
you. You may not direct any money to the fixed account or
transfer any of your Contract's value into the fixed account.
TRANSFERS
During the accumulation period, you may make transfers from any
subaccount as often as you wish. However, we will not permit
4. Investment choices 25
<PAGE>
you to make transfers if you have elected Systematic Exchanges,
asset rebalancing or systematic withdrawals.
Transfers from the fixed account are allowed once each Contract
year. You may transfer the entire dollar amount in the fixed
account. We may, in the future, limit the amount you can transfer
out of the fixed account to the greater of: (1) 25% of the dollar
amount in the fixed account, or (2) the amount you transferred
out of the fixed account in the previous Contract year.
Washington State residents: You may NOT transfer any of your
Contract's value into the fixed account.
Transfers may be made by telephone, subject to limitations
described below under "Telephone Transactions."
If you make more than 12 transfers from the subaccounts in any
Contract year, we will charge you $10 for each additional
transfer you make during that year. Currently, there is no charge
for transfers from the fixed account.
The Contract's transfer privilege is not intended to afford
Contract owners a way to speculate on short-term movements in the
market. Excessive use of the transfer privilege can disrupt the
management of the portfolios and increase transaction costs.
Accordingly, we have established a policy of limiting excessive
transfer activity. We will limit transfer activity to two
substantive transfers (at lease 30 days apart) from each
portfolio, except from the Money Market portfolio. We interpret
"substantive" to mean either a dollar amount large enough to have
a negative impact on a portfolio's operations or a series of
movements between portfolios. We will not limit non-substantive
transfers.
We may, at any time, no longer permit transfers, modify our
procedures, or limit the number of transfers we permit. We will
ordinarily execute transfers and determine all values in
connection with transfers at the end of the business day during
which we receive the transfer request.
26 Janus Retirement Advantage Variable Annuity
<PAGE>
SYSTEMATIC EXCHANGES
Systematic Exchanges allows you to systematically transfer a
specific amount each month from the Money Market subaccount, the
Flexible Income subaccount, the High-Yield subaccount, the fixed
account, or any combination of these accounts to a different
subaccount. You may specify the dollar amount to be transferred
monthly; however, each transfer must be at least $100. To
qualify, a minimum of $2,500 must be in each subaccount from
which we make the transfer. There is no charge for this program.
These transfers do count towards the twelve free transfers
allowed during each Contract year.
By transferring a set amount on a regular schedule instead of
transferring the total amount at one particular time, you may
reduce the risk of investing in the portfolios only when the
price is high. It does not guarantee a profit and it does not
protect you from loss if market prices decline.
We reserve the right to discontinue offering Systematic Exchanges
30 days after we send notice to you. Systematic Exchanges is not
available if you have elected systematic partial withdrawals.
ASSET REBALANCING PROGRAM
During the accumulation period you can instruct us to rebalance
automatically the amounts in your subaccounts to maintain your
desired asset allocation. This feature is called asset
rebalancing and can be started and stopped at any time free of
charge. However, we will not rebalance if you are in Systematic
Exchanges, systematic partial withdrawals or if any other
transfer is requested. Asset rebalancing ignores amounts in the
fixed account. You can choose to rebalance monthly, quarterly,
semi-annually, or annually.
To qualify for asset rebalancing, a minimum annuity value of
$2,500 for an existing Contract, or a minimum initial purchase
payment of $2,500 for a new Contract is required. Asset
rebalancing does not guarantee gains, nor does it assure that any
subaccount will not have losses.
4. Investment choices 27
<PAGE>
Each reallocation which occurs under asset rebalancing will be
counted towards the 12 free transfers allowed during each
Contract year.
We reserve the right to discontinue, modify or suspend the asset
rebalancing program at any time.
TELEPHONE TRANSACTIONS
You may make additional purchase payments, transfers and change
the allocation of additional purchase payments by telephone
IF:
- you complete the appropriate form; or
- you later request telephone transfers in writing.
When you make an additional purchase by telephone, we will
automatically debit your predesignated bank account for the
requested amount. Call 1-800-504-4440 to request the proper form
to be completed.
To make telephone transfers, call 1-800-504-4440. You will be
required to provide certain information for identification
purposes when you request a transaction by telephone. We may also
require written confirmation of your request. We will not be
liable for following telephone requests that we believe are
genuine.
Telephone requests must be received before 4:00 P.M. Eastern time
to assure same-day pricing of the transaction. We may discontinue
this option at any time.
28 Janus Retirement Advantage Variable Annuity
<PAGE>
5. - Expenses
There are charges and expenses associated with your Contract that
reduce the return on your investment in the Contract.
SURRENDERS AND PARTIAL WITHDRAWALS
During the accumulation period, you can withdraw part or all of
the Cash Value. Cash Value is the annuity value less any premium
taxes. No surrender charges apply.
MORTALITY AND EXPENSE RISK CHARGE
We charge a fee as compensation for bearing certain mortality and
expense risks under the Contract. Examples include a guarantee of
annuity rates, the death benefits, certain expenses of the
Contract, and assuming the risk that the current charges will be
insufficient in the future to cover costs of administering the
Contract. The mortality and expense risk charge is equal, on an
annual basis, to 0.50% of the average daily net assets that you
have invested in each subaccount. This charge is deducted from
the subaccounts during both the accumulation period and the
annuity period (the income phase).
If this charge does not cover our actual costs, we absorb the
loss. Conversely, if the charge covers more than actual costs,
the excess is added to our surplus. We expect to profit from this
charge. We may use any profits to cover distribution costs.
ADMINISTRATIVE CHARGE
We deduct an annual administrative charge to cover the costs of
administering the Contracts. This charge is assessed daily and is
equal to 0.15% per year of the daily net assets that you have
invested in each subaccount. This charge is deducted from the
subaccounts during both the accumulation period and the annuity
period (the income phase). This charge is guaranteed not to be
increased.
ANNUAL CONTRACT CHARGE
We deduct an Annual Contract Charge of $30 from your annuity
value on each Contract anniversary and at surrender. We deduct
5. Expenses 29
<PAGE>
the charge to cover our costs of administering the Contract. This
charge is currently waived when the annuity value on the
anniversary is equal to or greater than $25,000. We reserve the
right to modify this waiver upon 30 days written notice to you.
PREMIUM TAXES
Some states assess premium taxes on the purchase payments you
make. Currently, we do not deduct for these taxes at the time you
make a purchase payment. However, we will deduct the total amount
of premium taxes, if any, from the annuity value when:
- you elect to begin receiving annuity payments;
- you surrender the Contract;
- you request a partial withdrawal; or
- a death benefit is paid.
Generally, premium taxes range from 0% to 3.50%, depending on the
state.
FEDERAL, STATE AND LOCAL TAXES
We may in the future deduct charges from the Contract for any
taxes we incur because of the Contract. However, no deductions
are being made at the present time.
TRANSFER CHARGE
You are allowed to make 12 free transfers per Contract year. If
you make more than 12 transfers per Contract year, we charge $10
for each additional transfer. We deduct the charge from the
amount transferred. Systematic Exchange transfers and asset
rebalancing are considered transfers. All transfer requests made
on the same day are treated as a single request. We deduct the
charge to compensate us for the cost of processing the transfer.
30 Janus Retirement Advantage Variable Annuity
<PAGE>
PORTFOLIO MANAGEMENT FEES
The value of the assets in each subaccount is reduced by the fees
and expenses paid by the portfolios of the Trust. A description
of these expenses is found in the "Fee Table" section of this
prospectus and in the Trust's prospectus.
5. Expenses 31
<PAGE>
6. - Taxes
NOTE: WESTERN RESERVE HAS PREPARED THE FOLLOWING INFORMATION ON
FEDERAL INCOME TAXES AS A GENERAL DISCUSSION OF THE SUBJECT. IT
IS NOT INTENDED AS TAX ADVICE TO ANY INDIVIDUAL. YOU SHOULD
CONSULT YOUR OWN TAX ADVISOR ABOUT YOUR OWN CIRCUMSTANCES. WE
BELIEVE THAT THE CONTRACT QUALIFIES AS AN ANNUITY CONTRACT FOR
FEDERAL INCOME TAX PURPOSES AND THE FOLLOWING DISCUSSIONS ASSUMES
IT SO QUALIFIES. WE HAVE INCLUDED AN ADDITIONAL DISCUSSION
REGARDING TAXES IN THE SAI.
ANNUITY CONTRACTS IN GENERAL
Deferred annuity Contracts are a way of setting aside money for
future needs like retirement. Congress recognized how important
saving for retirement is and provided special rules in the Code
for annuities.
Simply stated, these rules provide that you will not be taxed on
the earnings, if any, on the money held in your annuity Contract
until you take the money out. This is referred to as tax
deferral. There are different rules as to how you will be taxed
depending on how you take the money out and the type of
Contract - Qualified or Non-Qualified (discussed below).
You will not be taxed on increases in the value of your Contract
until a distribution occurs - either as a withdrawal or as
annuity payments.
When a non-natural person (e.g., corporations or certain other
entities other than tax-qualified trusts) owns a Non-Qualified
Contract, the Contract will generally not be treated as an
annuity for tax purposes.
QUALIFIED AND NON-QUALIFIED CONTRACTS
If you purchase the Contract under an individual retirement
annuity, your Contract is referred to as a Qualified Contract.
If you purchase the Contract as an individual and not under a
Qualified Contract, your Contract is referred to as a Non-
Qualified Contract.
32 Janus Retirement Advantage Variable Annuity
<PAGE>
A Qualified Contract may be used in connection with the following
plans:
- INDIVIDUAL RETIREMENT ANNUITY (IRA): A traditional IRA allows
individuals to make contributions, which may be deductible, to
the Contract. A Roth IRA also allows individuals to make
contributions to the Contract, but it does not allow a
deduction for contributions. Roth IRA distributions may be tax-
free if the owner meets certain rules.
There are limits on the amount of annual contributions you can
make to these plans. Other restrictions may apply. The terms of
the plan may limit your rights under a Qualified Contract. You
should consult your legal counsel or tax advisor if you are
considering purchasing a Contract for use with any retirement
plan. We have provided more detailed information on these plans
and the tax consequences associated with them in the SAI.
WITHDRAWALS - NON-QUALIFIED CONTRACTS
If you make a withdrawal from your Contract, the Code treats that
withdrawal as first coming from earnings and then from your
purchase payments. When you make a withdrawal you are taxed on
the amount of the withdrawal that is earnings. Different rules
apply for annuity payments.
The Code also provides that withdrawn earnings may be subject to
a penalty. The amount of the penalty is equal to 10% of the
amount that is includible in income. Some withdrawals will be
exempt from the penalty. They include any amounts:
- paid on or after the taxpayer reaches age 59 1/2;
- paid after the taxpayer dies;
- paid if the taxpayer becomes totally disabled (as that term is
defined in the Code);
- paid in a series of substantially equal payments made annually
(or more frequently) under a lifetime annuity;
- paid under an immediate annuity; or
6. Taxes 33
<PAGE>
- which come from purchase payments made prior to August 14,
1982.
WITHDRAWALS - QUALIFIED CONTRACTS
The above information describing the taxation of Non-Qualified
Contracts does not apply to Qualified Contracts. There are
special rules that govern with respect to Qualified Contracts,
including rules restricting the time when amounts can be paid
from the Contracts and providing that a penalty tax may be
assessed on amounts withdrawn from the Contract prior to the date
you reach age 59 1/2, unless you meet one of the exceptions to
this rule. We have provided more information in the SAI.
DIVERSIFICATION AND DISTRIBUTION REQUIREMENTS
The Code provides that the underlying investments for a Non-
Qualified variable annuity must satisfy certain diversification
requirements in order to be treated as an annuity Contract. A
Non-Qualified Contract must meet certain distribution
requirements upon an owner's death in order to be treated as an
annuity Contract. A Qualified Contract (except a Roth IRA) must
also meet certain distribution requirements during the owner's
life. These diversification and distribution requirements are
discussed in the SAI. Western Reserve may modify the Contract to
attempt to maintain favorable tax treatment.
MULTIPLE CONTRACTS
All Non-Qualified, deferred annuity contracts entered into after
October 21, 1988 that we issue (or our affiliates issue) to the
same owner during any calendar year are to be treated as one
annuity contract for purposes of determining the amount
includible in an individual's gross income. There may be other
situations in which the Treasury may conclude that it would be
appropriate to aggregate two or more annuity contracts purchased
by the same owner. You should consult a competent tax advisor
before purchasing more than one Contract or other annuity
contracts.
34 Janus Retirement Advantage Variable Annuity
<PAGE>
PARTIAL WITHDRAWALS AND SURRENDERS - QUALIFIED CONTRACTS
In the case of a partial withdrawal, systematic partial
withdrawal, or surrender distributed to a participant or
beneficiary under a Qualified Contract, a ratable portion of the
amount received is taxable, generally based on the ratio of the
investment in the Contract to the total annuity value. The
"investment in the contract" generally equals the portion, if
any, of any purchase payments paid by or on behalf of an
individual under a Contract which is not excluded from the
individual's gross income. For Contracts issued in connection
with qualified plans, the "investment in the contract" can be
zero.
Generally, in the case of a partial withdrawal, systematic
partial withdrawal, or surrender under a Non-Qualified Contract
before the maturity date, amounts received are first treated as
taxable income to the extent that the annuity value immediately
before the partial withdrawal, systematic partial withdrawal, or
surrender exceeds the "investment in the contract" at that time.
Any additional amount partially withdrawn, applied to a
systematic partial withdrawal or surrender is not taxable. In the
event of a partial withdrawal or systematic partial withdrawal
from, or surrender of, a Non-Qualified Contract, we will withhold
for tax purposes the minimum amount required by law, unless the
owner affirmatively elects, before payments begin, to have either
nothing withheld or a different amount withheld.
Assignment of Non-Qualified Contracts are taxed in the same
manner as withdrawals from such Contracts.
TAXATION OF DEATH BENEFIT PROCEEDS
We may distribute amounts from the Contract because of the death
of an owner or the annuitant. Generally, such amounts are
includible in the income of the recipient:
- if distributed in a lump sum, these amounts are taxed in the
same manner as a full surrender; or
6. Taxes 35
<PAGE>
- if distributed under an annuity payment option, these amounts
are taxed in the same manner as annuity payments.
For these purposes, the "investment in the contract" is not
affected by the owner's or annuitant's death. That is, the
"investment in the contract" remains generally the total purchase
payments, less amounts received which were not includible in
gross income.
ANNUITY PAYMENTS
Although the tax consequences may vary depending on the annuity
payment option you select, in general, for Non-Qualified and
certain Qualified Contracts, only a portion of the annuity
payments you receive will be includible in your gross income.
In general, the excludible portion of each annuity payment you
receive will be generally determined as follows:
- Fixed payments - by dividing the "investment in the contract"
on the maturity date by the total expected value of the annuity
payments for the term of the payments. This is the percentage
of each annuity payment that is excludable.
- Variable payments - by dividing the "investment in the
contract" on the maturity date by the total number of expected
periodic payments. This is the amount of each annuity payment
that is excludable.
The remainder of each annuity payment is includible in gross
income. Once the "investment in the contract" has been fully
recovered, the full amount of any additional annuity payments is
includible in gross income.
If you select more than one annuity payment option, special rules
govern the allocation of the Contract's entire "investment in the
contract" to each such option, for purposes of determining the
excludable amount of each payment received under that option. We
advise you to consult a competent tax advisor as to the potential
tax effects of allocating amounts to any particular annuity
payment option.
36 Janus Retirement Advantage Variable Annuity
<PAGE>
If, after the maturity date, annuity payments stop because of an
annuitant's death, the excess (if any) of the "investment in the
contract" as of the maturity date over the aggregate amount of
annuity payments received that was excluded from gross income is
generally allowable as a deduction for your last tax return.
TRANSFERS, ASSIGNMENTS OR EXCHANGES OF CONTRACTS
If you transfer your ownership or assign a Contract, designate an
annuitant or other beneficiary who is not also the owner, select
certain maturity dates, or change annuitants, you may trigger
certain income or gift tax consequences that are beyond the scope
of this discussion. If you contemplate any such transfer,
assignment, selection, or change, you should contact a competent
tax advisor with respect to the potential tax effects of such a
transaction.
POSSIBLE TAX LAW CHANGES
Although the likelihood of legislative changes is uncertain,
there is always the possibility that the tax treatment of the
Contract could change by legislation or otherwise. You should
consult a tax advisor with respect to legislative developments
and their effect on the Contract.
6. Taxes 37
<PAGE>
7. Access - to your money
SURRENDERS AND WITHDRAWALS
You can have access to the money in your Contract in several
ways:
- by making a withdrawal (either a complete surrender or partial
withdrawal); or
- by taking annuity payments.
If you want to completely surrender your Contract, you will
receive your Cash Value, which equals the annuity value of your
Contract minus:
- premium taxes; and
- the Annual Contract Charge.
No partial withdrawal is permitted if the withdrawal would reduce
the Cash Value below $2,500. Unless you tell us otherwise, we
will take the withdrawal from each of the investment choices in
proportion to the Cash Value.
Remember that any withdrawal you take will reduce the annuity
value, and might reduce the amount of the death benefit. See
Section 9, Death Benefit, for more details. Income taxes, Federal
tax penalties and certain restrictions may apply to any
withdrawals you make.
We must receive a properly completed surrender request which must
contain your original signature. We will accept faxed requests
for partial withdrawals as long as the withdrawal proceeds are
being sent to the address of record.
When we incur extraordinary expenses, such as wire transfers or
overnight mail expenses, for expediting delivery of your partial
withdrawal or surrender payment, we will deduct that charge from
the payment. We charge $15 for a wire transfer and $20 for an
overnight delivery.
For your protection, we will require a signature guarantee for:
- all requests for partial withdrawals or surrenders over
$500,000; or
38 Janus Retirement Advantage Variable Annuity
<PAGE>
- where the partial withdrawal or surrender proceeds will be sent
to an address other than the address of record.
All signature guarantees must be made by:
- a national or state bank;
- a member firm of a national stock exchange; or
- any institution that is an eligible guarantor under SEC rules
and regulations.
If the Contract's owner is not an individual, additional
information may be required. If you own a Qualified Contract, the
tax code may require your spouse to consent to any withdrawal.
For more information, call us at 1-800-504-4440.
DELAY OF PAYMENT AND TRANSFERS
Payment of any amount due from the separate account for a
surrender, a death benefit, or the death of the owner of a Non-
Qualified Contract, will generally occur within seven business
days from the date all required information is received by us. We
may be permitted to defer such payment from the separate account
if:
- the New York Stock Exchange is closed for other than usual
weekends or holidays or trading on the Exchange is otherwise
restricted; or
- an emergency exists as defined by the SEC or the SEC requires
that trading be restricted; or
- the SEC permits a delay for the protection of owners.
In addition, transfers of amounts from the subaccounts may be
deferred under these circumstances.
Pursuant to the requirements of certain state laws, we reserve
the right to defer payment of transfers, partial withdrawals and
surrenders from the fixed account for up to six months.
7. Access to your money 39
<PAGE>
SYSTEMATIC PARTIAL WITHDRAWALS
You can elect to receive regular payments from your Contract by
using systematic partial withdrawals. Payments are made monthly,
quarterly, semi-annually or annually, in equal payments of at
least $200. Your Cash Value must equal at least $25,000. No
systematic partial withdrawals are permitted from the fixed
account.
You may stop systematic partial withdrawals at any time. We
reserve the right to discontinue offering systematic partial
withdrawals 30 days after we send you notice. Systematic partial
withdrawals are not available if you have elected Systematic
Exchanges or the asset rebalancing program.
Income taxes, Federal tax penalties and other restrictions may
apply to any systematic withdrawal you receive.
40 Janus Retirement Advantage Variable Annuity
<PAGE>
8. - Performance
Western Reserve periodically advertises performance of the
subaccounts and investment portfolios. We may disclose at least
four different kinds of performance.
First, we may disclose standard total return figures for the
subaccounts that reflect the deduction of all charges under the
Contract, including the mortality and expense charge, the
administrative charge, and the Annual Contract Charge. These
figures are based on the actual historical performance of the
subaccounts since their inception.
Second, we may disclose total return figures on a non-standard
basis. This means that the data may be presented for different
time periods and different dollar amounts. We will only disclose
non-standard performance data if it is accompanied by standard
total return data.
Third, we may present historic performance data for the
portfolios since their inception reduced by some or all fees and
charges under the Contract. Such adjusted historic performance
includes data that precedes the inception dates of the
subaccounts, but is designed to show the performance that would
have resulted if the Contract had been available during that
time.
Fourth, we may include in our advertising and sales materials,
tax deferred compounding charts and other hypothetical
illustrations, which may include comparisons of currently taxable
and tax deferred investment programs, based on selected tax
brackets.
Appendix B contains performance information that you may find
useful. It is divided into various parts, depending upon the type
of performance information shown. Future performance will vary
and future results will not be the same as the results shown.
8. Performance 41
<PAGE>
9. Death - benefit
We will pay a death benefit to your beneficiary, under certain
circumstances, if you are an owner and the annuitant and you die
during the accumulation period. (If you are not the annuitant, a
death benefit may or may not be paid. See below.) The beneficiary
may choose an annuity payment option, or may choose to receive a
lump sum.
WHEN WE PAY A DEATH BENEFIT
BEFORE THE MATURITY DATE
We will pay a death benefit to your beneficiary
IF:
- you are both the annuitant and the owner of the Contract; and
- you die before the maturity date.
If the only beneficiary is your surviving spouse, then he or she
may elect to continue the Contract as the new annuitant and
owner, instead of receiving the death benefit.
Distribution requirements apply to the annuity value upon the
death of any owner or annuitant. These restrictions are detailed
in the SAI.
AFTER THE MATURITY DATE
The death benefit payable, if any, on or after the maturity date
depends on the annuity payment option selected.
IF:
- you are not the annuitant; and
- you die on or after the maturity date; and
- the entire interest in the Contract has not been paid to you;
THEN:
- any remaining value in the Contract will be distributed at
least as rapidly as under the method of distribution being used
as of the date of the owner's death.
42 Janus Retirement Advantage Variable Annuity
<PAGE>
WHEN WE DO NOT PAY A DEATH BENEFIT
NO DEATH BENEFIT IS PAID IN THE FOLLOWING CASES:
IF:
- you are not the annuitant; and
- the annuitant dies prior to the maturity date;
THEN:
- you will become the new annuitant and the Contract will
continue.
IF:
- you are not the annuitant; and
- an owner dies prior to the maturity date;
THEN:
- the new owner must surrender the Contract for the annuity value
within five years of your death.
NOTE CAREFULLY. If the owner does not name a successor owner, the
owner's estate will become the new owner.
AMOUNT OF DEATH BENEFIT
Death benefit provisions may differ from state to state. The
death benefit will be the greater of:
- the value of your Contract on the date we receive proof of
death and your beneficiary's election regarding payment; or
- the total purchase payments you make to the Contract, less
partial withdrawals.
9. Death benefit 43
<PAGE>
ALTERNATE PAYMENT ELECTIONS
The beneficiary may elect to receive the death benefit in a lump
sum payment, or (if not your surviving spouse) to receive
payment:
1. within 5 years of the date of your death;
2. over a specific number of years, not to exceed the
beneficiary's life expectancy, with payments starting within
one year of the annuitant's death; or
3. under a life annuity payout option, with payments starting
within one year of the annuitant's death.
If the beneficiary chooses 1 or 2 above, this Contract remains in
effect and remains in the accumulation period until it terminates
at the end of the elected period. The death benefit becomes the
new annuity value. If the beneficiary chooses 3 above, the
Contract remains in effect, but moves into the annuity phase with
the beneficiary receiving payments under a life annuity payout
option. Special restrictions apply to option 1 above. See the SAI
for more details.
44 Janus Retirement Advantage Variable Annuity
<PAGE>
10. Other - information
OWNERSHIP
You, as owner of the Contract, exercise all rights under the
Contract. You can change the owner at any time by notifying
Western Reserve in writing. An ownership change may be a taxable
event.
ASSIGNMENT
You can also assign the Contract any time during your lifetime.
Western Reserve will not be bound by the assignment until we
receive written notice of the assignment. Western Reserve will
not be liable for any payment or other action we take in
accordance with the Contract before we receive notice of the
assignment. An assignment may be a taxable event. There may be
limitations on your ability to assign a Qualified Contract.
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
Western Reserve was incorporated under the laws of Ohio on
October 1, 1957. It is engaged in the business of writing life
insurance policies and annuity contracts. Western Reserve is
wholly-owned by First AUSA Life Insurance Company, a stock life
insurance company which is wholly-owned by AEGON USA, Inc. (AEGON
USA), which conducts most of its operations through subsidiary
companies engaged in the insurance business or in providing
non-insurance financial services. All of the stock of AEGON USA
is indirectly owned by AEGON n.v. of the Netherlands, the
securities of which are publicly traded. AEGON n.v., a holding
company, conducts its business through subsidiary companies
engaged primarily in the insurance business. Western Reserve is
licensed in the District of Columbia, Guam, Puerto Rico and in
all states except New York.
THE SEPARATE ACCOUNT
Western Reserve established a separate account, called the WRL
Series Annuity Account B, under the laws of the State of Ohio on
May 24, 1993. The separate account is divided into subaccounts,
each of which invests exclusively in shares of a mutual fund
10. Other information 45
<PAGE>
portfolio. Currently, there are 11 subaccounts offered through
this Contract. Western Reserve may add, delete or substitute
subaccounts or investments held by the subaccounts, and we
reserve the right to change the investment objective of any
subaccount, subject to applicable law as described in the SAI. In
addition, the separate account may be used for other variable
annuity contracts issued by Western Reserve.
The separate account is registered with the SEC as a unit
investment trust under the 1940 Act. However, the SEC does not
supervise the management, the investment practices, or the
Contracts of the separate account or Western Reserve.
The assets of the separate account are held in Western Reserve's
name on behalf of the separate account and belong to Western
Reserve. However, the assets underlying the Contracts are not
chargeable with liabilities arising out of any other business
Western Reserve may conduct. The income, gains and losses,
realized and unrealized, from the assets allocated to each
subaccount are credited to and charged against that subaccount
without regard to the income, gains and losses from any other of
our accounts or subaccounts.
Information about the separate account can be reviewed and copied
at the SEC's Public Reference Room in Washington, D.C. You may
obtain information about the operation of the public reference
room by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains a web site (http://www.sec.gov) that contains other
information regarding the separate account.
VOTING RIGHTS
2Western Reserve will vote all shares of the portfolios in
accordance with instructions we receive from you and other owners
that have voting interests in the portfolios. We will send you
and other owners written requests for instructions on how to vote
those shares. When we receive those instructions, we will vote
all of the shares in accordance with those instructions. We will
vote shares for which no timely instructions were received in the
same
46 Janus Retirement Advantage Variable Annuity
<PAGE>
proportion as the voting instructions we received. However, if we
determine that we are permitted to vote the shares in our own
right, we may do so. Each person having a voting interest will
receive proxy material, reports, and other materials relating to
the appropriate portfolio. More information on voting rights is
provided in the SAI.
DISTRIBUTOR OF THE CONTRACTS
AFSG Securities Corporation is the principal underwriter of the
Contracts. Like Western Reserve, it is an indirect wholly-owned
subsidiary of AEGON USA. It is located at 4333 Edgewood Road
N.E., Cedar Rapids, IA 52499-0001. AFSG Securities Corporation is
registered as a broker/dealer under the Securities Exchange Act
of 1934. It is a member of the National Association of Securities
Dealers, Inc. ("NASD").
There are no sales commissions payable upon the sale of
Contracts. The offering of Contracts will be made on a continuous
basis.
NON-PARTICIPATING CONTRACT
The Contract does not participate or share in the profits or
surplus earnings of Western Reserve. No dividends are payable on
the Contract.
VARIATIONS IN CONTRACT PROVISIONS
Certain provisions of the Contracts may vary from the
descriptions in this prospectus in order to comply with different
state laws. See your Contract for variations since any such state
variations will be included in your Contract or in riders or
endorsements attached to your Contract.
Washington State residents: The fixed account is NOT available to
you. You may not direct any money to the fixed account or
transfer any money to the fixed account.
10. Other information 47
<PAGE>
YEAR 2000 READINESS DISCLOSURE
In May 1996, Western Reserve adopted and presently has in place a
Year 2000 Project Plan (the "Plan") to review and analyze
existing hardware and software systems, as well as voice and data
communications systems, to determine if they are Year 2000
compliant. As of March 1, 1999, substantially all of Western
Reserve's mission-critical systems are Year 2000 compliant. The
Year 2000 Project Plan remains on track as we continue with the
validation of our mission-critical and non-mission-critical
systems, including revalidation testing in 1999. In addition, we
have undertaken aggressive initiatives to test all systems that
interface with any third parties and other business partners. All
of these steps are aimed at allowing current operations to remain
unaffected by the Year 2000 date change.
As of the date of this Prospectus, Western Reserve has identified
and made available what it believes are the appropriate resources
of hardware, people, and dollars, including the engagement of
outside third parties, to ensure that the Plan will be completed.
The actions taken by management under the Year 2000 Project Plan
are intended to significantly reduce Western Reserve's risk of a
material business interruption based on the Year 2000 issues. It
should be noted that the Year 2000 computer problem, and its
resolution, is complex and multifaceted, and any company's
success cannot be conclusively known until the Year 2000 is
reached. In spite of its efforts or results, our ability to
function unaffected to and through the Year 2000 may be adversely
affected by actions, or failure to act, of third parties beyond
our knowledge or control.
This statement is a Year 2000 Readiness Disclosure pursuant to
Section 3(9) of the Year 2000 Information and Readiness
Disclosure Act, 15 U.S.C. Section 1 (1998).
IMSA
We are a charter member of the Insurance Marketplace Standards
Association ("IMSA"). IMSA is an independent, voluntary
organization of life insurance companies. It promotes high
ethical standards in the sales, advertising and servicing of
individual life insurance and annuity products. Companies must
undergo a rigorous self and independent assessment of their
practices to become a member of IMSA. The IMSA logo in our sales
literature shows our ongoing commitment to these standards.
48 Janus Retirement Advantage Variable Annuity
<PAGE>
LEGAL PROCEEDINGS
Western Reserve, like other life insurance companies, is involved
in lawsuits. We are not aware of any class lawsuits naming us as
a defendant or involving the separate account. In some lawsuits
involving other insurers, substantial damages have been sought
and/or material settlement payments have been made. Although the
outcome of any litigation cannot be predicted with certainty,
Western Reserve believes that at the present time there are no
pending or threatened lawsuits that are reasonably likely to have
a material adverse impact on the separate account, AFSG
Securities Corporation, the principal underwriter for the
Contracts, or Western Reserve.
FINANCIAL STATEMENTS
Financial Statements of Western Reserve and the separate account
are included in the SAI.
10. Other information 49
<PAGE>
Table of - contents of the statement
of additional information
Definitions of Special Terms
The Contract - General Provisions
Certain Federal Income Tax Consequences
Investment Experience
Historical Performance Data
Published Ratings
Administration
Records and Reports
Distribution of the Contracts
Other Products
Custody of Assets
Legal Matters
Independent Accountants
Other Information
Financial Statements
Inquiries and requests for a SAI should be directed to:
Western Reserve Life
Attention: Annuity Department
P.O. Box 9052
Clearwater, Florida 33758-9052
1-800-504-4440
50 Janus Retirement Advantage Variable Annuity
<PAGE>
Appendix - A
CONDENSED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
GROWTH SUBACCOUNT
-----------------------------------------------------------------------------------------
Number of
Accumulation
Accumulation Accumulation Units
Unit Value at Unit Value at Outstanding at
Beginning of Period End of Period END OF PERIOD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
9/13/93(1)-12/31/93 $10.000 $10.350 100.000
12/31/94 $10.350 $10.547 451,117.958
12/31/95 $10.547 $13.613 743,809.909
12/31/96 $13.613 $16.010 1,042,859.684
12/31/97 $16.010 $19.524 1,514,530.379
12/31/98 $19.524 $26.315 1,652,701.845
-----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
AGGRESSIVE GROWTH SUBACCOUNT
-----------------------------------------------------------------------------------------
Number of
Accumulation
Accumulation Accumulation Units
Unit Value at Unit Value at Outstanding at
Beginning of Period End of Period END OF PERIOD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
9/13/93(1)-12/31/93 $10.000 $11.805 100.000
12/31/94 $11.805 $13.617 354,557.639
12/31/95 $13.617 $17.213 678,636.237
12/31/96 $17.213 $18.449 1,020,107.090
12/31/97 $18.449 $20.651 984,381.141
12/31/98 $20.651 $27.546 883,037.839
-----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
WORLDWIDE GROWTH SUBACCOUNT
-----------------------------------------------------------------------------------------
Number of
Accumulation
Accumulation Accumulation Units
Unit Value at Unit Value at Outstanding at
Beginning of Period End of Period END OF PERIOD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
9/13/93(1)-12/31/93 $10.000 $11.910 100.000
12/31/94 $11.910 $11.991 561,882.376
12/31/95 $11.991 $15.144 732,914.024
12/31/96 $15.144 $19.402 1,211,235.201
12/31/97 $19.402 $23.547 1,875,176.146
12/31/98 $23.547 $30.160 1,941,625.844
-----------------------------------------------------------------------------------------
</TABLE>
Appendix A 51
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
INTERNATIONAL GROWTH SUBACCOUNT
-----------------------------------------------------------------------------------------
Number of
Accumulation
Accumulation Accumulation Units
Unit Value at Unit Value at Outstanding at
Beginning of Period End of Period END OF PERIOD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
5/2/94(1)-12/31/94 $10.000 $ 9.665 93,520.075
12/31/95 $ 9.665 $11.801 135,202.435
12/31/96 $11.801 $15.785 390,010.601
12/31/97 $15.785 $18.585 821,409.199
12/31/98 $18.585 $21.647 671,555.731
-----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
BALANCED SUBACCOUNT
-----------------------------------------------------------------------------------------
Number of
Accumulation
Accumulation Accumulation Units
Unit Value at Unit Value at Outstanding at
Beginning of Period End of Period END OF PERIOD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
9/13/93(1)-12/31/93 $10.000 $10.720 100.000
12/31/94 $10.720 $10.720 201,716.082
12/31/95 $10.720 $13.264 247,488.141
12/31/96 $13.264 $15.301 348,749.461
12/31/97 $15.301 $18.562 608,080.467
12/31/98 $18.562 $24.764 733,116.706
-----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
FLEXIBLE INCOME SUBACCOUNT
-----------------------------------------------------------------------------------------
Number of
Accumulation
Accumulation Accumulation Units
Unit Value at Unit Value at Outstanding at
Beginning of Period End of Period END OF PERIOD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
9/13/93(1)-12/31/93 $10.000 $10.070 100.000
12/31/94 $10.070 $ 9.895 90,218.877
12/31/95 $ 9.895 $12.152 200,443.851
12/31/96 $12.152 $13.175 166,841.253
12/31/97 $13.175 $14.629 250,305.069
12/31/98 $14.629 $15.858 427,644.390
-----------------------------------------------------------------------------------------
</TABLE>
52 Janus Retirement Advantage Variable Annuity
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
MONEY MARKET SUBACCOUNT
-----------------------------------------------------------------------------------------
Number of
Accumulation
Accumulation Accumulation Units
Unit Value at Unit Value at Outstanding at
Beginning of Period End of Period END OF PERIOD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
5/1/95(1)-12/31/95 $10.000 $10.303 167,435.066
12/31/96 $10.303 $10.744 567,317.336
12/31/97 $10.744 $11.226 656,381.666
12/31/98 $11.226 $11.752 1,395,441.856
-----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
HIGH-YIELD SUBACCOUNT
-----------------------------------------------------------------------------------------
Number of
Accumulation
Accumulation Accumulation Units
Unit Value at Unit Value at Outstanding at
Beginning of Period End of Period END OF PERIOD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
5/1/96(1)-12/31/96 $10.000 $11.191 58,905.138
12/31/97 $11.191 $12.895 225,866.419
12/31/98 $12.895 $12.973 229,600.091
-----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
CAPITAL APPRECIATION SUBACCOUNT
-----------------------------------------------------------------------------------------
Number of
Accumulation
Accumulation Accumulation Units
Unit Value at Unit Value at Outstanding at
Beginning of Period End of Period END OF PERIOD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
5/1/97(1)-12/31/97 $10.000 $12.605 209,216.685
12/31/98 $12.605 $19.801 714,666.508
-----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
EQUITY INCOME SUBACCOUNT
-----------------------------------------------------------------------------------------
Number of
Accumulation
Accumulation Accumulation Units
Unit Value at Unit Value at Outstanding at
Beginning of Period End of Period END OF PERIOD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
5/1/97(1)-12/31/97 $10.000 $13.412 227,237.196
12/31/98 $13.412 $19.487 462,715.096
-----------------------------------------------------------------------------------------
</TABLE>
Appendix A 53
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
GROWTH AND INCOME SUBACCOUNT
-----------------------------------------------------------------------------------------
Number of
Accumulation
Units
Accumulation Accumulation Outstanding
Unit Value at Unit Value at at
Beginning of Period End of Period END OF PERIOD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
5/1/98(1)-12/31/98 $10.000 $11.928 359,656.882
-----------------------------------------------------------------------------------------
</TABLE>
(1) Commencement of operations of these subaccounts.
54 Janus Retirement Advantage Variable Annuity
<PAGE>
Appendix - B
HISTORICAL PERFORMANCE DATA
STANDARDIZED PERFORMANCE DATA
Western Reserve may advertise historical yields and total returns
for the subaccounts of the separate account. These figures are
based on historical earnings and will be calculated according to
guidelines from the SEC. They do not indicate future performance.
MONEY MARKET SUBACCOUNT. The yield of the Money Market subaccount
is the annualized income generated by an investment in the
subaccount over a specified seven-day period. The yield is
calculated by assuming that the income generated for that
seven-day period, not including capital changes or income other
than investment income, is generated each seven-day period over a
52-week period and is shown as a percentage of the investment.
The effective yield is calculated similarly but we assume that
the income earned is reinvested. The effective yield will be
slightly higher than the yield because of the compounding effect
of this assumed reinvestment. For the seven days ended December
31, 1998, the yield of the Money Market subaccount was 4.20%, and
the effective yield was 4.29%.
OTHER SUBACCOUNTS. The yield of a subaccount (other than the
Money Market subaccount) refers to the annualized income
generated by an investment in the subaccount over a specified
30-day period. The yield is calculated by assuming that the
income generated by the investment during that 30-day period is
generated each 30-day period over a 12-month period and is shown
as a percentage of the investment.
The total return of a subaccount assumes that an investment has
been held in the subaccount for various periods of time including
a period measured from the date the subaccount began operations.
When a subaccount has been in operation for 1, 3, 5, and 10
years, the total return for these periods will be provided. The
total return quotations will represent the average annual
compounded rates of return of investment of $1,000 in the
subaccount as of the last day of each period.
Appendix B 55
<PAGE>
The yield and total return calculations are not reduced by any
premium taxes. For additional information regarding yields and
total returns, please see the SAI.
Based on the method of calculation described in the SAI, the
standard average annual total returns for periods from inception
of the subaccounts to December 31, 1998, and for the one and
three year periods ended December 31, 1998 are shown in Table 1
below. Total returns shown reflect deductions of 0.50% for the
mortality and expense risk charge, 0.15% for the administrative
charge and the $30 Annual Contract Charge. (Based on an average
Contract size of $50,087, the Annual Contract Charge translates
into a charge of 0.06%.)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
TABLE 1
STANDARD AVERAGE ANNUAL TOTAL RETURNS OF THE SUBACCOUNTS
(Total Subaccount Annual Expenses: 0.65%)
---------------------------------------------------------------------------------------
1 Year 3 Years 5 Years Inception of Subaccount
Ended Ended Ended the Subaccount Inception
Subaccount 12/31/98 12/31/98 12/31/98 to 12/31/98 Date
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Growth 34.70% 24.50% 20.45% 19.95% 9/13/93
Aggressive Growth 33.31% 16.90% 18.40% 20.99% 9/13/93
Worldwide Growth 28.01% 25.73% 20.35% 23.08% 9/13/93
Balanced 33.34% 23.06% 18.16% 18.59% 9/13/93
Flexible Income 8.34% 9.21% 9.44% 9.02% 9/13/93
International Growth 16.41% 22.34% N/A 17.92% 5/2/94
Money Market* 4.62% 4.42% N/A 4.43% 5/1/95
High-Yield 0.55% N/A N/A 10.18% 5/1/96
Capital Appreciation 57.00% N/A N/A 50.51% 5/1/97
Equity Income 45.21% N/A N/A 49.07% 5/1/97
Growth and Income N/A N/A N/A 19.21% 5/1/98
---------------------------------------------------------------------------------------
</TABLE>
* Yield more closely reflects the current earnings of the Money Market
subaccount than its total return.
56 Janus Retirement Advantage Variable Annuity
<PAGE>
NON-STANDARDIZED PERFORMANCE DATA
In addition to the standard data discussed above, similar
performance data for other periods may also be shown.
We may from time to time also disclose average annual total
return or other performance data in non-standard formats for the
subaccounts. The non-standard performance data may make different
assumptions regarding the amount invested, the time periods
shown, or the effect of partial withdrawals or annuity payments.
All non-standard performance data will be advertised only if the
standard performance data is also disclosed. For additional
information regarding the calculation of other performance data,
please see the SAI.
Appendix B 57
<PAGE>
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58 Janus Retirement Advantage Variable Annuity
