As filed with the Securities and Exchange Commission on May 1, 1998
Registration No. 33-71748
811-8160
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 5 |X|
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 6 |X|
SEPARATE ACCOUNT VA-5NLNY
(Exact Name of Registrant)
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW
YORK (formerly called, First Transamerica Life
Insurance Company)
(Name of Depositor)
100 Manhattanville Road, Purchase, NY 10577
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (914) 701-6000
Name and Address of Agent for Service: Copy to:
James W. Dederer, Esquire Frederick R. Bellamy, Esquire
Chairman of the Board, General Counsel and Sutherland, Asbill & Brennan, LLP
Corporate Secretary 1275 Pennsylvania Avenue, N.W.
Transamerica Life Insurance Company Washington, D.C. 20004-2404
of New York
100 Manhattanville Road
Purchase, NY 10577
Approximate date of proposed sale to the public: As soon as practicable after
effectiveness of the Registration Statement.
Title of securities being registered:Variable Annuity Contracts
It is proposed that this filing will become effective: |_|
immediately upon filing pursuant to paragraph (b) |X| on May
1, 1998 pursuant to paragraph (b) |_| 60 days after filing
pursuant to paragraph (a)(i) |_| on ________________ pursuant
to paragraph (a)(i)
If appropropriate, check the following box:
|_| this Post-Effective Amendment designates a new
effective date for a previously filed Post-Effective
Amendment.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495
Showing Location in Part A (Prospectus),
Part B (Statement of Additional Information) and Part C
of Registration Statement Information Required by Form N-4
PART A
<TABLE>
<CAPTION>
Item of Form N-4 Prospectus Caption
<S> <C>
1. Cover Page............................................... Cover Page
2. Definitions.............................................. Definitions
3. Synopsis................................................. Key Features of the Contracts
4. Condensed Financial Information.......................... Condensed Financial Information
5. General
(a) Depositor Transamerica Occidental Life Insurance
Company;
Available Information
(b) Registrant The Variable Account
(c) Portfolio Company The Portfolios
(d) Portfolio Prospectus The Portfolios
(e) Voting Rights Voting Rights
6. Deductions and Expenses..................................
(a) General Charges and Deductions
(b) Sales Load % Not Applicable
(c) Special Purchase Plan Not Applicable
(d) Commissions Distribution of the Contracts
(e) Fund Expenses The Funds
(f) Operating Expenses Variable Account Fee Table
7. Contracts
(a) Persons with Rights The Contract; Application and Purchase
Payments; Cash Withdrawals; Account Value;
Death Benefit; Voting Rights
(b) (i) Allocation of Purchase Payments
Payments..................................... Allocation of Purchase Payments
(ii) Transfers.................................... Transfers
(iii) Exchanges.................................... Federal Tax Matters
(c) Changes Addition, Deletion, or Substitution
(d) Inquiries Key Features of the Contracts; Available
Information
8. Annuity Period........................................... Annuity Payments
9. Death Benefit............................................ Death Benefit
<PAGE>
10. Purchase and Contract Balances
(a) Purchases Application and Purchase Payments
(b) Valuation Account Value; Appendix A
(c) Daily Calculation Account Value
(d) Underwriter Distribution of the Contracts
11. Redemptions
(a) By Contract Owners Cash Withdrawals; Automatic Payout Option
By Annuitant....................................... Not Applicable
(b) Texas ORP Not Applicable
(c) Check Delay Cash Withdrawals
(d) Lapse Not Applicable
(e) Free Look Key Features of the Contracts; Application
and
Purchase Payments
12. Taxes.............................................. Federal Tax Matters
13. Legal Proceedings.................................. Legal Proceedings
14. Table of Contents for the
Statement of
Additional Information................................... Statement of Additional Information Table of
Contents
PART B
Item of Form N-4 Statement of Additional
Information Caption
15. Cover Page......................................... Cover Page
16. Table of Contents.................................. Table of Contents
17. General Information
and History.............................................. (Prospectus) Transamerica Occidental Life
Insurance Company; (Prospectus) Available
Information; Transamerica
18. Services...........................................
(a) Fees and Expenses
of Registrant...................................... (Prospectus) Variable Account Fee Table;
(Prospectus) The Portfolios
(b) Management Contracts (Prospectus) Third Party Administrator
(c) Custodian Safekeeping of Account Assets; Records and
Reports
Independent Auditors ............................. Experts
(d) Assets of Registrant Not Applicable
(e) Affiliated Person Not Applicable
(f) Principal Underwriter Not Applicable
<PAGE>
19. Purchase of Securities
Being Offered............................................ (Prospectus) The Contract
Offering Sales Load...................................... Not Applicable
20. Underwriters....................................... (Prospectus) Distribution of the Contracts
21. Calculation of Performance
Data..................................................... (Prospectus) Performance Data; Performance Data
22. Annuity Payments................................... (Prospectus) Annuity Payments; Annuity Period
23. Financial Statements............................... Financial Statements
PART C -- OTHER INFORMATION
Item of Form N-4 Part C Caption
24. Financial Statements
and Exhibits............................................. Financial Statements and Exhibits
(a) Financial Statements Financial Statements
(b) Exhibits Exhibits
25. Directors and Officers of
the Depositor............................................ Directors and Officers of the Depositor
26. Persons Controlled By or Under Common Control
with the Depositor or Registrant Persons Controlled By or Under Common
Control
with the Depositor or Registrant
27. Number of Contract Owners.......................... Number of Contract Owners
28. Indemnification.................................... Indemnification
29. Principal Underwriters............................. Principal Underwriter
30. Location of Accounts
and Records.............................................. Location of Accounts and Records
31. Management Services................................ Management Services
32. Undertakings....................................... Undertakings
Signature Page........................................... Signature Page
</TABLE>
<PAGE>
DISTINCT ASSETS from TRANSAMERICAsm
A VARIABLE ANNUITY
Issued by
Transamerica Life
Insurance Company of New York
The Distinct Assets from Transamericasm, a Variable Annuity (formerly called the
Schwab Investment Advantage) ("Contract") is a variable annuity issued by
Transamerica Life Insurance Company of New York (formerly called First
Transamerica Life Insurance Company). It allows you to invest in your choice of
eleven different mutual fund Portfolios offered by eight different mutual fund
investment advisers. You may withdraw funds in the Contract as a lump sum,
through a systematic withdrawal program, or from a choice of Annuity Payment
Options.
The Contract is not currently being sold. However, additional Purchase Payments
may be made to existing Contracts. There are no sales charges, redemption,
surrender or withdrawal charges. The Contract provides a Free Look Period of 30
days from your receipt of the Contract, during which you may cancel your
investment in the Contract.
Your investment in the Contract may be allocated among eleven Sub-Accounts of
Transamerica Separate Account VA-5NLNY ("Variable Account"). Based on your
instructions, your investment in the Contract is invested in Portfolios of
various mutual funds (open-end investment companies or series thereof) offered
by fund families such as American Century, Federated, INVESCO, Janus,
Lexington(R), Schwab Funds(R), SteinRoe, and Strong. The wide array of mutual
fund choices allows you to select a mix of investment vehicles specifically
suited to your particular risk tolerances, as well as investment objectives and
adviser preferences. Prior to the Annuity Date, you are free to transfer amounts
among the Portfolios. This ability to transfer assets among the various
Portfolios allows you to change your investment mix in response to changes in
your personal objectives or investment outlook.
Your Account Value will increase or decrease based on the investment performance
of the Portfolios you select. You bear the entire investment risk under the
Contract prior to the Annuity Date. While there is a guaranteed death benefit,
there is no guaranteed or minimum Account Value. Therefore, the Account Value
you receive could be less than the total amount you have invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus Dated May 1, 1998
The Contracts are not deposits of, or guaranteed or endorsed by, any
bank, nor is the Contract federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other government agency. The
Contracts involve certain investment risks, including possible loss of
principal.
<PAGE>
The Contract offers a number of ways of withdrawing funds at a future date,
including a lump sum payment and several annuity payment forms. You may choose
the Annuity Date on which the annuity payments begin.
Full or partial withdrawals from the Contract may be made at any time before the
Annuity Date. Generally, withdrawals are subject to ordinary income taxes and if
made prior to age 59 1/2 a 10% federal income penalty tax.
To Place Orders and for Account Information: Contact the Service Center,
at 800 258-4261 or P.O. Box 31728,
Charlotte, North Carolina 28231-1728.
About This Prospectus: This Prospectus concisely presents important information
you should have before investing in the Contract. Please read it carefully and
retain it for future reference. You can find more detailed information
pertaining to the Contract in the Statement of Additional Information dated May
1, 1998 (as may be amended from time to time), and filed with the Securities and
Exchange Commission. The Statement of Additional Information is incorporated by
reference into this Prospectus, and may be obtained without charge by contacting
the Service Center at 800-258-4261 or P.O. Box 31728, Charlotte, North Carolina
28231-1728.
<PAGE>
TABLE OF CONTENTS
Page
DEFINITIONS.......................................................... 1
KEY FEATURES OF THE CONTRACT......................................... 2
CONDENSED FINANCIAL INFORMATION...................................... 7
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK AND THE VARIABLE
ACCOUNT........................................................... 8
THE PORTFOLIOS....................................................... 9
THE CONTRACT......................................................... 11
PURCHASE PAYMENTS.................................................... 12
ACCOUNT VALUE........................................................ 13
TRANSFERS............................................................ 14
CASH WITHDRAWALS..................................................... 15
DEATH BENEFIT........................................................ 17
CHARGES AND DEDUCTIONS............................................... 18
ANNUITY PAYMENTS..................................................... 20
FEDERAL TAX MATTERS.................................................. 23
PERFORMANCE DATA..................................................... 27
DISTRIBUTION OF THE CONTRACTS........................................ 28
VOTING RIGHTS........................................................ 28
LEGAL PROCEEDINGS.................................................... 28
LEGAL MATTERS........................................................ 29
ACCOUNTANTS.......................................................... 29
AVAILABLE INFORMATION................................................ 29
STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS................ 30
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESMAN, OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON.
The Contract is available only in New York.
<PAGE>
DEFINITIONS
Account Value: The Account Value of a particular Contract is the total dollar
amount of all Variable Accumulation Units under each Sub-Account held for you
prior to the Annuity Date.
Annuitant: The person named on the application and whose life is used to
determine the amount of monthly annuity payments on the Annuity Date. The
Annuitant cannot be changed after the Contract has been issued, except upon the
Annuitant's death prior to the Annuity Date if a Contingent Annuitant has
previously been named. In the case of a Qualified Contract, the Owner must be
the Annuitant.
Annuity Date: The date on which the Account Value, less any applicable premium
taxes, will be applied to provide an Annuity for you, under the annuity form you
selected. Unless a different Annuity Date is elected under the annuity payment
provisions, the Annuity Date will be as described in the Contract. The date
annuity payments start is the Commencement of Annuity Payment Date shown in the
Contract.
Code: The Internal Revenue Code of 1986, as amended, and the rules and
regulations issued thereunder.
Contract: A certificate issued to an individual which evidences
his or her coverage under a group annuity
contract.
Net Purchase Payment: A Purchase Payment reduced by any applicable premium tax
charge (including any charge for retaliatory premium taxes) (see "Premium Tax
Charge," page 19).
Owner or You: The person or persons who, while living, controls al
rights and benefits under the Contract.
Joint Owners must be husband and wife as of the Annuity Issue Date.
Qualified Contracts cannot have Joint
Owners.
Payee: The person who receives the annuity payments after the Annuity
Date. The Payee will be the Annuitant,
unless you designate that some other person shall be the Payee.
Portfolio: (1) A separate "series" or portfolio of investments within
a mutual fund or (2) a mutual fund
available for investment under the Contract.
Qualified Contract: A Contract used in connection with an individual retirement
annuity ("IRA") which receives special federal income tax treatment under
Section 408 of the Code.
Receipt: Receipt and acceptance by us at our Service Center.
Service Center: The Annuity Service Center, at 800 258-4261 or P.O.
Box 31728, Charlotte, North Carolina
28231-1728.
Sub-Account: A subdivision of the Variable Account investing solely in shares
of one of the Portfolios.
We, our, us, or Transamerica: Transamerica Life Insurance Company of New York
(formerly called First Transamerica Life Insurance Company).
<PAGE>
KEY FEATURES OF THE CONTRACT
The Distinct Assets from Transamericasm, a Variable Annuity (formerly called the
Schwab Investment Advantage) ("Contract") allows you to invest currently in your
choice of eleven different mutual fund Portfolios offered by eight different
mutual fund investment advisers. You may withdraw funds in the Contract as a
lump sum, through a systematic withdrawal program, or from a choice of annuity
payment options. Your Account Value will vary with the investment performance of
the Portfolios you select. You bear the entire investment risk for all amounts
invested in the Contract. The Account Value could be less than the total amount
you have invested.
Who should invest. The Contract is designed for individual investors who are
seeking long-term tax-deferred asset accumulation with a wide range of
investment options. The Contract can be used for retirement or other long-term
investment purposes. The deferral of income taxes is particularly attractive to
investors in high federal and state tax brackets who have already taken full
advantage of their ability to make IRA contributions or "pre-tax" contributions
to their employer- sponsored retirement or savings plans.
A Wide Range of Investment Choices. The Contract gives you an opportunity to
select among eleven different Portfolios offered by eight different mutual fund
investment advisers. The investment options cover a wide range of investment
objectives as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Aggressive Growth Stein Roe Special Venture Fund, Variable Series
Strong Discovery Fund II
Growth Janus Aspen Growth Portfolio
American Century VP Capital Appreciation
Growth & Income Federated American Leaders Fund II
INVESCO VIF-Industrial Income Portfolio
Balanced/Asset Allocation INVESCO VIF-Total Return Portfolio
International Lexington(R) Emerging Markets Fund
High Yield Bond INVESCO VIF-High Yield Portfolio
Government Bond Federated Fund for U.S. Government
Securities II
Money Market Schwab Money Market Portfolio
</TABLE>
The Stein Roe Special Venture Fund, Variable Series was previously called
SteinRoe Capital Appreciation Fund. The assets of each Portfolio are separate,
and each Portfolio has distinct investment objectives and policies as described
in their individual Fund Prospectuses, which are available, without charge, from
the Service Center, at 800 258-4261 or P.O. Box 31728, Charlotte, North Carolina
28231-1728. (See "The Portfolios," page 9.)
How to Invest. New Contracts are not sold, butadditional Purchase
Payments of at least $1,000 may be
made to Contracts previously purchased. Sales of new Contracts
may resume in the future. (See
"Application and Purchase Payments," page 12.)
Charges and Deductions Under the Contract. The Contract is a "no load" variable
annuity and imposes no sales charges, redemption or withdrawal charges.
There is a Mortality and Expense Risk Charge at an effective annual rate of
0.85% of the value of the net assets in the Variable Account. An Annual Contract
Charge of $25 (or 2% of Account Value, if lower) will be deducted from your
Account Value.
Although we currently do not deduct any additional charge for administrative
expenses, we reserve the right to deduct one. We guarantee that this charge will
never exceed an effective annual rate of 0.15% of your Account Value, if
imposed.
New York currently has no premium tax or retaliatory premium tax. If New York
imposes these taxes in the future, or if you become a resident of a state other
than New York where such taxes apply, we may deduct a charge for these premium
taxes from purchase payments, from amounts withdrawn, or at the Annuity Date.
(See "Charges and Deductions," page 18.)
Switching Investments. You may switch investments among the Portfolios as often
as you like by making a written request to our Service Center. The minimum
amount which may be transferred is $1,000 (or the entire value of the Portfolio
being transferred, if less). You may make as many transfers as you like. Ten
free transfers will be allowed per Contract year and a charge of $10 (or 2% of
the amount of the transfer, whichever is less) will be imposed for each
subsequent transfer during that Contract Year.
Full and Partial Withdrawals. You may withdraw all or part of your Account Value
before the earlier of the Annuity Date you selected or the Annuitant's or
Owner's death. Withdrawals may be taxable and if made prior to age 59 1/2 of the
Owner may be subject to a 10% penalty tax.
Annuity Forms. Beginning on the first day of the month immediately following the
Annuity Date you select (which generally may not be later than Annuitant's age
85), you may receive annuity payments on a fixed basis. A wide range of annuity
forms are available to provide flexibility in choosing an annuity payment
schedule that meets your particular needs. These annuity forms include
alternatives designed to provide payments for life (for either a single or joint
life) with or without a guaranteed minimum number of payments.
Death Benefit. If the death of the Owner or the Annuitant specified in your
Contract occurs prior to the Annuity Date, a Death Benefit will be payable to
the appropriate Beneficiary. The Death Benefit will be the greater of the sum of
your Investments, less withdrawals and any applicable premium taxes, or the then
current Account Value. The beneficiary may elect to receive the Death Benefit
proceeds as a lump sum or as Annuity Payments.
Customer Service. Transamerica's professionals are available toll-free to assist
you. If you have any questions about your Contract, please telephone the Service
Center at 800 258-4261 or P.O. Box 31728, Charlotte, North Carolina 28231-1728.
All inquiries should include the Contract Number, your name and the Annuitant's
name. As a Contract Owner you will receive confirmations regarding any
transactions relating to your Contract, as well as a quarterly statements and
the Annual and Semi-Annual Report of the Portfolios.
<PAGE>
VARIABLE ANNUITY FEE TABLE
The purpose of this table and the examples that follow is to assist you in
understanding the various costs and expenses that you will bear directly or
indirectly when investing in the Contract. The table and examples reflect
expenses of the Variable Account as well as of the Portfolios. The information
set forth should be considered together with the narrative provided under the
heading "Charges and Deductions" on page 18 of this Prospectus, and with the
Funds' prospectuses. In addition to the expenses listed below, premium taxes may
be applicable.
Contract Owner Transaction Expenses
Sales Load....................................... None
Surrender Fee.................................... None
Transfer Fee (First 10 Per Year)(1).............. None
Annual Contract Charge(2)........................ $25.00
Variable Account Annual Expenses
(as a percentage of average Variable
Account assets)
Mortality and Expense Risk Charge................ 0.85%
Administrative Expense Charge(3)................. 0.00%
Other Fees and Expenses of the Variable Account.. 0.00%
---------
Total Variable Account Annual Expenses........... 0.85%
(1) There is a fee of $10 (or 2% of the amount of the transfer, whichever is
less) for each transfer in excess of 10 in any Contract Year.
(2) This is a maximum annual charge. The Annual Contract Charge is the
lesser of $25 or 2% of Account
Value.
(3) There is currently no Administrative Expense Charge. If one is added in the
future, it will not exceed an annual rate of 0.15% of the Variable Account
assets.
<PAGE>
Portfolio Annual Expenses(1)
(as a percentage of Portfolio net assets, after expense reimbursements)
<TABLE>
<CAPTION>
Total
Management Other Portfolio
Fees Expenses Expenses
Portfolio
<S> <C> <C> <C>
American Century VP Capital Appreciation ..................... 1.00% 0.00% 1.00%
Federated American Leaders Fund II............................ 0.66% 0.19% 0.85%
Federated Fund for U.S. Government Securities II.............. 0.15% 0.65% 0.80%
INVESCO VIF-High Yield Portfolio.............................. 0.60% 0.23% 0.83%
INVESCO VIF-Industrial Income Portfolio....................... 0.75% 0.16% 0.91%
INVESCO VIF-Total Return Portfolio............................ 0.75% 0.17% 0.92%
Janus Aspen Growth Portfolio.................................. 0.65% 0.05% 0.70%
Lexington(R)Emerging Markets Fund.............................. 0.85% 0.99% 1.84%
Schwab Money Market Portfolio................................. 0.25% 0.25% 0.50%
Stein Roe Special Venture Fund, Variable Series(2)............ 0.50% 0.23% 0.73%
Strong Discovery Fund II...................................... 1.00% 0.18% 1.18%
</TABLE>
(1) The figures given above are based on expenses that would have been incurred
in the absence of expense offset arrangements, if any, for1997. If expense
offset arrangements were in place, the actual amount paid by the Portfolio would
be less than that specified above; see the Portfolios' prospectuses for more
information. Additionally, from time to time, a Portfolio's investment adviser,
in its sole discretion, may waive all or part of its fees and/or voluntarily
assume certain Portfolio expenses. For a more complete description of the
Portfolios' fees and expenses, see the Portfolio's prospectuses. As of the date
of this Prospectus, certain fees are being waived or expenses are being assumed,
in each case on a voluntary basis. Without such waivers or reimbursements, the
management fees, other expenses and total portfolio annual expenses that would
have been incurred for the last completed fiscal year would be: 0.74%, 0.04% and
0.78% for Janus Aspen Growth Portfolio; 0.85%, 1.06%, and 1.91% for Lexington(R)
Emerging Markets Fund; and 0.46%, 0.25% and 0.71% for Schwab Money Market
Portfolio. No other Portfolios waived fees or reimbursed expenses. See the
Portfolios' prospectuses for a discussion of fee waiver and expense
reimbursements.
(2) The Stein Roe Special Venture Fund, Variable Series was previously called
SteinRoe Capital Appreciation Fund.
<PAGE>
EXAMPLES(1)
The following chart reflects the $25 Annual Contract Charge as an
annual charge of % assets based on an approximate average Account Value of
$60,000. The chart assumes a 5% annual return before expenses. The tabular
information also assumes that the entire Account Value is allocated to the
particular Sub-Account. These examples assume that no premium taxes have been
assessed (although premium taxes may be applicable - see "Premium Tax Charge,"
page 19).
If you retain, annuitize, or surrender the Contract at the end of the
applicable time period, assuming a $1,000 Purchase Payment, you would pay the
following fees and expenses:
<TABLE>
<CAPTION>
Sub-Account 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
American Century VP Capital Appreciation(1)....$19.71 $60.97 $104.78 $226.60
Federated American Leaders Fund II............. $18.20 $56.38 $97.05 $210.70
Federated Fund for U.S. Government Securities II $17.70 $54.85 $94.46 $205.35
INVESCO VIF-High Yield Portfolio............... $18.00 $55.77 $96.02 $208.56
INVESCO VIF-Industrial Income Portfolio........ $18.81 $58.22 $100.15 $217.09
INVESCO VIF-Total Return Portfolio............. $18.91 $58.53 $100.67 $218.15
Janus Aspen Growth Portfolio................... $16.69 $51.78 $89.26 $194.55
Lexington(R)Emerging Markets Fund............... $28.13 $86.26 $147.01 $311.06
Schwab Money Market Portfolio.................. $14.67 $45.60 $78.78 $172.60
Stein Roe Special Venture Fund, Variable Series(2) $16.99 $52.70 $90.82 $197.80
Strong Discovery Fund II....................... $21.52 $66.44 $113.99 $245.35
</TABLE>
THESE EXAMPLES SHOULD NOT BE CONSIDERED REPRESENTATIONS OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES PAID MAY BE GREATER OR LESS THAN THOSE SHOWN, SUBJECT
TO THE GUARANTEES IN THE CONTRACT.
(1) The Portfolio Annual Expenses and these examples are based on data provided
by the Portfolios. Transamerica has no reason to doubt the accuracy or
completeness of that data, but Transamerica has not verified the Funds' figures.
In preparing the Portfolio Expense table and the Examples above, Transamerica
has relied on the figures provided by the Portfolios. (2) The American Century
VP Capital Appreciation was called the TCI Growth Portfolio previous to May 1,
1997.
Federal Income Tax Consequences
A Contract Owner who is a natural person generally should not be taxed on
increases in the Account Value (if any) until a distribution under a Contract
occurs (e.g., a withdrawal or Annuity Payment) or is deemed to occur (e.g., a
pledge, loan, or assignment of the Contract). Generally, a portion (up to 100%)
of any distribution or deemed distribution is taxable as ordinary income. The
taxable portion of distributions is generally subject to income tax withholding
unless the recipient (if permitted) elects otherwise. In addition, a federal
penalty tax may apply to certain distributions or deemed distributions. (See
"Federal Tax Matters," page 23.)
NOTES:
The foregoing summary is qualified in its entirety by the detailed
information in the remainder of this Prospectus and in the prospectuses for the
Portfolios which should be referred to for more detailed information.
With respect to Qualified Contracts, it should be noted that the
requirements of a particular retirement plan, an endorsement to the Contract, or
limitations or penalties imposed by the Code, as amended, may impose additional
limits or restrictions on Purchase Payments, withdrawals, surrenders,
distributions, or benefits, or on other provisions of the Contract. This
Prospectus does not describe any such limitations or restrictions. (See "Federal
Tax Matters," page 23.)
CONDENSED FINANCIAL INFORMATION
The following condensed financial information is derived from the
financial statements of the Variable Account. The data should be read in
conjunction with the financial statements, related notes, and other financial
information in the Statement of Additional Information.
The following table sets forth certain information regarding the
Sub-Accounts for the period from commencement of business operation of the
Sub-Accounts on January 1, 1995, through December 31,1997.
Financial statements for the Variable Account and Transamerica and
reports of the independent certified public accountants are available in the
Statement of Additional Information.
<TABLE>
<CAPTION>
Accumulation Accumulation No. of Units
Unit Values Unit Values Outstanding
as of as of as of
Sub-Accounts 1/1/95 12/31/95 12/31/95
---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
American Century VP Balanced $9.773 $11.736 176.896
American Century VP Capital Appreciation $9.695 $12.603 34,669.264
Federated American Leaders Fund II $10.024 $13.350 10,878.374
Federated Fund for U.S. Government Securities II $10.114 $10.950 3,759.299
INVESCO VIF-High Yield Portfolio $9.996 $11.870 11,645.434
INVESCO VIF-Industrial Income Portfolio $10.058 $12.891 20,026.115
INVESCO VIF-Total Return Portfolio $10.110 $12.310 5,210.993
Janus Aspen Growth Portfolio $9.950 $12.843 17,259.094
Lexington(R)Emerging Markets Fund $10.011 $9.536 29,955.147
Schwab Money Market Portfolio $1.019 $1.064 1,085,225.895
Stein Roe Special Venture Fund, Variable Series
$10.204 $11.307 8,002.306
Strong Discovery Fund II $10.848 $14.550 25,802.320
Accumulation Accumulation No. of Units
Unit Values Unit Values Outstanding
as of as of as of
Sub-Accounts 1/1/96 12/31/96 12/31/96
-----------------------------------------------------------------------------------------------
American Century VP Balanced(1) $11.736 $13.054 .428
American Century VP Capital Appreciation $12.603 $11.942 41,642.157
Federated American Leaders Fund II $13.350 $16.092 64,920.490
Federated Fund for U.S. Government Securities II $10.950 $11.313 12,061.284
INVESCO VIF-High Yield Portfolio $11.870 $13.722 42,632.792
INVESCO VIF-Industrial Income Portfolio $12.891 $15.629 77,033.017
INVESCO VIF-Total Return Portfolio $12.310 $13.693 19,328.612
Janus Aspen Growth Portfolio $12.843 $15.084 65,009.033
Lexington(R)Emerging Markets Fund $9.536 $10.161 47,399.974
Schwab Money Market Portfolio $1.064 $1.108 1,005,527.898
Stein Roe Special Venture Fund, Variable Series(2)
$11.307 $14.232 63,413.267
Strong Discovery Fund II $14.550 $14.543 42,573.916
Accumulation Accumulation No. of Units
Unit Values Unit Values Outstanding
as of as of as of
Sub-Accounts 1/1/97 12/31/97 12/31/97
American Century VP Balanced (1) $13.054 $14.990 0.000
American Century VP Capital Appreciation $11.942 $11.456 15,862.524
Federated American Leaders Fund II $16.092 $21.116 48,673.920
Federated Fund for U.S. Government Securities II $11.313 $12.180 11,585.656
INVESCO VIF-High Yield Portfolio $13.722 $15.965 11,255.796
INVESCO VIF-Industrial Income Portfolio $15.629 $19.862 32,941.580
INVESCO VIF-Total Return Portfolio $13.693 $16.688 24,250.762
Janus Aspen Growth Portfolio $15.084 $18.359 53,735.350
Lexington(R)Emerging Markets Fund $10.161 $8.911 27,412.331
Schwab Money Market Portfolio $1.108 $1.155 223,033.403
Stein Roe Special Venture Fund, Variable Series(2) $14.232 $15.214 30,914.900
Strong Discovery Fund II $14.543 $16.062 18,625.300
</TABLE>
(1) The American Century VP Balanced Sub-Account, which was offered prior to May
1, 1995, remains part of the Variable Account and is included in the Condensed
Financial Information and financial statement. However, the American Century VP
Balanced Sub-Account is no longer available for investment.
(2) The Stein Roe Special Venture Fund, Variable Series was previously called
SteinRoe Capital Appreciation Fund.
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
AND THE VARIABLE ACCOUNT
Transamerica Life Insurance Company of New York
Transamerica Life Insurance Company of New York, formerly called First
Transamerica Life Insurance Company ("Transamerica"), is a stock life insurance
company incorporated under the laws of the state of New York on February 5,
1986. It is principally engaged in the sale of life insurance and annuity
policies. Transamerica is a wholly-owned subsidiary of Transamerica Occidental
Life Insurance Company which, in turn, is an indirect subsidiary of Transamerica
Corporation. The address of Transamerica is 100 Manhattanville Road, Purchase,
New York 10577, and the telephone number for Transamerica is 914-701-6000. The
name change to Transamerica Life Insurance Company of New York is effective May
1, 1997.
Published Ratings
We may from time to time publish in advertisements, sales literature and
reports, the ratings and other information assigned to Transamerica by one or
more independent rating organizations such as A.M. Best Company, Standard &
Poor's, Moody's and Duff & Phelps. The purpose of the ratings is to reflect our
financial strength and/or claims-paying ability and should not be considered as
bearing on the investment performance of assets held in the Variable Account.
Each year the A.M. Best Company reviews the financial status of thousands of
insurers, culminating in the assignment of Best's Ratings. These ratings reflect
their current opinion of the relative financial strength and operating
performance of an insurance company in comparison to the norms of the
life/health insurance industry. In addition, our claims-paying ability as
measured by Standard & Poor's Insurance Ratings Services or Duff & Phelps may be
referred to in advertisements or sales literature or in reports. These ratings
are opinions of an operating insurance company's financial capacity to meet the
obligations of its insurance and annuity policies in accordance with their
terms. Such ratings do not reflect the investment performance of the Variable
Account or the degree of risk associated with an investment in the Variable
Account.
The Variable Account
Separate Account VA-5NLNY of Transamerica ("Variable Account") was
established by us as a separate account under the laws of the State of New York
on November 10, 1993, pursuant to resolutions of our Board of Directors. The
Variable Account is registered with the Securities and Exchange Commission
("Commission") under the Investment Company Act of 1940 ("1940 Act") as a unit
investment trust. It meets the definition of a separate account under the
federal securities laws. However, the Commission does not supervise the
management or the investment practices or policies of the Variable Account.
The assets of the Variable Account are owned by Transamerica but they are
held separately from our other assets. Section 4240 of the New York Insurance
Law provides that the assets of a separate account are not chargeable with
liabilities incurred in any other business operation of the insurance company
(except to the extent that assets in the separate account exceed the reserves
and other liabilities of the separate account) if and to the extent provided in
the applicable agreements, and the Contracts contain such a provision. Income,
gains and losses incurred on the assets in the Variable Account, whether or not
realized, are credited to or charged against the Variable Account without regard
to our other income, gains or losses. Therefore, the investment performance of
the Variable Account is entirely independent of the investment performance of
our general account assets or any other separate account maintained by us.
The Variable Account currently has eleven Sub-Accounts, each of which
invests solely in a specific corresponding mutual fund Portfolio. (See "The
Portfolios," page 9.) Changes to the Sub-Accounts may be made at our discretion.
(See "Addition, Deletion, or Substitution," page 11.)
THE PORTFOLIOS
The Portfolios described below are exclusively for use as funding vehicles
for insurance products and qualified plans, in certain circumstances, and,
consequently, are not publicly available mutual funds. Each Portfolio has
separate investment objectives and policies. As a result, each Portfolio
operates as a separate investment portfolio and the investment performance of
one Portfolio has no effect on the investment performance of any other
Portfolio. See the Portfolios' prospectuses for more information.
American Century Variable Portfolios, Inc.
American Century VP Capital Appreciation: Seeks capital growth by
investing in common stocks (including securities convertible into common
stocks and other equity equivalents) and other securities that meet
certain fundamental and technical standards of selection and have, in the
opinion of the investment manager, better-than-average potential for
appreciation. The Portfolio's investment manager intends to stay fully
invested in such securities, regardless of the movement of stock prices
generally.
Federated Insurance Series
Federated American Leaders Fund II: Seeks to achieve long-term growth of
capital as a primary objective and seeks to provide income as a secondary
objective through investment of at least 65% of its total assets (under
normal circumstances) in common stocks of "blue-chip" companies.
Federated Fund for U.S. Government Securities II: Seeks to
provide current income through
investment of at least 65% of its total assets (under normal
circumstances) in securities which
are primary or direct obligations of the U.S. government or its agencies
or instrumentalities or
which are guaranteed by the U.S. government, its agencies, or
instrumentalities and in
collateralized mortgage obligations issued by U.S. government agencies
and instrumentalities.
INVESCO Variable Investment Funds, Inc.
INVESCO VIF-Industrial Income Portfolio: Seeks the best possible current
income while following sound investment practices. Capital growth
potential is an additional consideration in the selection of portfolio
securities. The Industrial Income Portfolio normally invests at least 65%
of its total assets in dividend-paying common stocks. Up to 10% of the
Portfolio's total assets may be invested in equity securities that do not
pay regular dividends. The remaining assets are invested in other income
producing securities, such as corporate bonds.
INVESCO VIF-Total Return Portfolio: Seeks a high total return on
investment through capital appreciation and current income. The Total
Return Portfolio seeks to achieve its investment objective by investing in
a combination of equity securities (consisting of common stocks and, to a
lesser degree, securities convertible into common stock) and fixed income
securities.
INVESCO VIF-High Yield Portfolio: Seeks a high level of current income by
investing substantially all of its assets in lower-rated bonds and other
debt securities and in preferred stock. Lower-rated bonds are sometimes
referred to as "junk bonds." The High Yield Portfolio pursues its
investment objective through investment in a variety of long-term,
intermediate-term, and short-term bonds. Potential capital appreciation is
a factor in the selection of investments, but is secondary to the
Portfolio's primary objective.
Janus Aspen Series
Janus Aspen Growth Portfolio: Seeks long-term growth of capital in a
manner consistent with the preservation of capital. Realization of income
is not a significant investment consideration and any income realized on
the Growth Portfolio's investments will be incidental to its primary
objective. The Growth Portfolio seeks to achieve its investment objective
by investing substantially all of its assets in common stock when its
portfolio manager believes that the relevant market environment favors
profitable investing in those securities. Generally, the Portfolio
emphasizes issuers with larger market capitalizations.
Lexington(R) Emerging Markets Fund, Inc.
Lexington(R) Emerging Markets Fund: Seeks long term growth of capital by
investing primarily in emerging country and emerging market equity
securities. For purposes of its investment objective, the Fund considers
emerging country equity securities to be any country whose economy and
market the World Bank or United Nations considers to be emerging or
developing. The Fund may also invest in equity securities and equivalents
traded in any market, of companies that derive 50% or more of their total
revenue from either goods or services produced in such emerging countries
or markets or sales made in such countries.
Schwab Annuity Portfolios
Schwab Money Market Portfolio: Seeks maximum current income consistent
with liquidity and stability of capital. It seeks to achieve its objective
by investing in short-term money market instruments. This Portfolio is
neither insured nor guaranteed by the United States Government and there
can be no assurance that it will be able to maintain a stable net asset
value of $1.00 per share.
SteinRoe Variable Investment Trust
Stein Roe Special Venture Fund, Variable Series: Seeks growth of capital.
The Fund pursues this objective by investing primarily in common stocks,
convertible securities, and other securities having common stock
characteristics selected for prospective capital growth.
Strong Discovery Fund II, Inc.
Strong Discovery Fund II: Seeks capital growth. The Fund invests in
securities that the Fund's investment adviser believes represent
attractive growth opportunities. The Fund normally emphasizes equity
investments, although it has the flexibility to invest in any security the
Fund's investment adviser believes has the potential for capital
appreciation.
The American Century VP Capital Appreciation is advised by American
Century Investment Management,
Inc. of Kansas City, Missouri, advisers to the American Century family
of mutual funds. The two
Federated Insurance Series Portfolios are advised by Federated Advisers of
Pittsburgh, Pennsylvania. The
three INVESCO Variable Investment Funds, Inc., Portfolios are advised by
INVESCO Funds Group, Inc., of
Denver, Colorado. The Janus Aspen Growth Portfolio is advised by Janus
Capital Corporation of Denver,
Colorado. The Lexington(R) Emerging Markets Fund is advised by Lexington
Management Corporation of Saddle
Brook, New Jersey. The Schwab Money Market Portfolio is advised by
Charles Schwab Investment
Management, Inc., of San Francisco, California. The SteinRoe Capital
Appreciation Fund is advised by
Stein Roe & Farnham Incorporated of Chicago, Illinois. Strong Discovery
Fund II is advised by Strong
Capital Management, Inc. of Milwaukee, Wisconsin.
* * *
Meeting investment objectives depends on various factors,
including, but not limited to, how
well the portfolio managers anticipate changing economic and market
conditions. THERE IS NO ASSURANCE
THAT ANY OF THESE PORTFOLIOS WILL ACHIEVE THEIR STATED OBJECTIVES.
The Contracts are not deposits of, or guaranteed or endorsed by, any
bank, nor is the Contract federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other government agency. The
Contracts involve certain investment risks, including possible loss of
principal.
Each Portfolio is registered with the Commission as an open-end,
management investment company or a series thereof. The Commission does not
supervise the management or the investment practices and policies of any of the
Portfolios.
Since some of the Portfolios are available to registered separate
accounts of other insurance companies offering variable annuity and variable
life products and to qualified plans in certain circumstances, there is a
possibility that a material conflict may arise between the interests of the
Variable Account and one or more other separate accounts or qualified plans
investing in the Portfolios. In the event of a material conflict, the affected
insurance companies or qualified plans are required to take any necessary steps
to resolve the matter, including stopping their separate accounts or qualified
plans from investing in the Portfolios. See the Portfolios' prospectuses for
more details.
Additional information concerning the investment objectives and
policies of all of the Portfolios and the investment adviser services and
administrative services and charges can be found in the current prospectuses for
the Funds, which can be obtained by calling the Service Center at P.O. Box
31720, Purchase, New York 28231-1728, telephone 800-258-4261. The Portfolios'
prospectuses should be read carefully before any decision is made concerning the
allocation of Purchase Payments to, or transfers among, the Sub-Accounts.
Addition, Deletion, or Substitution
Transamerica does not control the Portfolios and cannot guarantee that any
of the Portfolios will always be available for allocation of Purchase Payments
or transfers, so Transamerica retains the right to make changes in the Variable
Account and in its investments.
Transamerica reserves the right to eliminate the shares of any Portfolio
held by a Sub-Account and to substitute shares of another Portfolio or of
another investment company, for the shares of any Portfolio, if the shares of
the Portfolio are no longer available for investment or if, in our judgment,
investment in any Portfolio would be inappropriate in view of the purposes of
the Variable Account. To the extent required by the 1940 Act, a substitution of
shares attributable to the Owner's interest in a Sub-Account will not be made
without prior notice to the Owners and the prior approval of the Commission.
Nothing contained herein shall prevent the Variable Account from purchasing
other securities for other series or classes of variable annuity policies, or
from effecting an exchange between series or classes of variable policies on the
basis of requests made by Owners.
New Sub-Accounts may be established when, in our discretion, marketing,
tax, investment or other conditions so warrant. Any new Sub-Accounts will be
made available to existing Owners on a basis to be determined by us. Each
additional Sub-Account will purchase shares in a Portfolio or in another mutual
fund or investment vehicle. We may also eliminate one or more Sub-Accounts if,
in our sole discretion, marketing, tax, investment or other conditions so
warrant. In the event any Sub-Account is eliminated, we will notify the Owners
and request a re-allocation of the amounts invested in the eliminated
Sub-Account. We also reserve the right to restrict the transfer privilege.
In the event of any such substitution or change, we may make such changes
to your Contract as may be necessary or appropriate to reflect such substitution
or change. Furthermore, if deemed to be in the best interests of persons having
voting rights under the Contracts, the Variable Account may be operated as a
management company under the 1940 Act or any other form permitted by law, may be
de-registered under such Act in the event such registration is no longer
required, or may be combined with one or more other separate accounts.
THE CONTRACT
The Contract is a deferred variable annuity contract. Your rights and
benefits are described below and in the certificate and group contract; however,
we reserve the right to make any modification to conform the group contract and
certificates thereunder to, or give you the benefit of, any federal or state
statute or rule or regulation. The obligations under the Contract are our
obligations.
You as Owner will designate the Annuitant. You can be the Annuitant and
must be the Annuitant in the case of a Qualified Contract issued to fund an IRA.
(See "Qualified Contracts" on page 26.)
Annuity payments will be made to the Annuitant after the Annuity Date
unless, in the case of a Non-Qualified Contract, you designate a different
Payee.
The term "Contract" as used herein refers to a certificate issued under
a group annuity contract. For each Contract, a different Account will be
established and values and benefits will be calculated separately. The various
administrative rules described below will apply separately to each Contract,
unless otherwise noted.
Qualified Contracts
The Contracts may be used to fund IRA rollovers for use in connection
with Section 408(b) of the Code. If a Contract is purchased to fund an IRA, the
Annuitant must also be the Owner and Joint Owners cannot be named. In addition,
minimum distributions from IRAs must commence not later than April 1st of the
calendar year following the calendar year in which you attain age 701/2. You
should consult your tax adviser concerning these matters.
The Contract and prototype IRA endorsement have received IRS approval
that they are acceptable under Section 408 of the Code, and that each individual
who purchases a Contract with an IRA endorsement will be considered to have
adopted a retirement savings program that satisfies the requirements of Section
408 of the Code. The IRS approval is a determination only as to the form of the
Contract and does not represent a determination of the merits of the Contract.
An IRA rollover is a rollover of certain kinds of distributions from
qualified plans, Section 403(b) tax sheltered annuities, and individual
retirement plans, following the rules set out in the Code to maintain special
tax treatment, to an Individual Retirement Annuity.
PURCHASE PAYMENTS
Purchase Payments
All Purchase Payments can be paid to the Service Center by a check
payable to Transamerica. A confirmation will be issued to you upon the
acceptance of each Purchase Payment. Acceptance is subject to the there being
sufficient information in a form acceptable to us, and we reserve the right to
reject any Purchase Payment.
Your Contract will be issued and your Net Purchase Payment derived from
the Initial Purchase Payment generally will be accepted and credited within two
business days after receipt of an acceptable application and receipt of the
Initial Purchase Payment at the Service Center.
Purchase Payments may be made at any time prior to the Annuity Date, as
long as the Annuitant (or Contingent Annuitant, if applicable) is living.
Additional Purchase Payments must be at least $1,000. In addition, minimum
allocation amounts apply (see "Allocation of Purchase Payments" page 13).
Purchase Payments made by check are credited to your Contract as of the date of
receipt of the payment at the Service Center.
Total Purchase Payments may not exceed $1,000,000 without our prior
approval.
In no event may the sum of all Purchase Payments for a Contract during
any taxable year exceed the limits imposed by any applicable federal or state
law, rules, or regulations.
Allocation of Purchase Payments
You specify either in a form and manner acceptable to Transamerica how
Purchase Payments will be allocated among the Sub-Accounts. You may allocate
each Net Purchase Payment to one or more of the Sub-Accounts as long as the
portions are whole number percentages and any allocation percentage for a
Sub-Account is at least 10%.
Each Net Purchase Payment will be subject to the allocation percentages
in effect at the time of receipt of such Purchase Payment. (A Net Purchase
Payment is the Purchase Payment less any applicable premium taxes, including any
retaliatory premium taxes should such taxes be levied in the future in New York
or should you live in a state with such taxes in the future.) The allocation
percentages for new Purchase Payments among the Sub-Accounts may be changed by
you at any time by request in a manner and form acceptable to us. Any change
will take effect with the first Purchase Payment received with or after receipt
of notice of the change by our Service Center and will continue in effect until
subsequently changed. The minimum amount of any new Purchase Payment that can be
allocated to establish a Sub-Account is $1,000.
ACCOUNT VALUE
Before the Annuity Date, your Account Value is the total dollar amount
of each Sub-Account credited to your Contract. The Account Value is equal to:
(a) Net Purchase Payments; plus or minus (b) any increase or decrease in the
value of the Sub-Accounts due to investment results; less (c) the Mortality and
Expense Risk Charge; less (d) the Administrative Expense Charge (if one is
imposed); less (e) Annual Contract Charge; less (f) any Transfer Fees; and less
(g) withdrawals from the Sub-Accounts less any premium taxes applicable to those
withdrawals.
A Valuation Period is the period between successive Valuation Days. It
begins at the close of the New York Stock Exchange (generally 4:00 p.m. ET) on
each Valuation Day and ends at the close of the New York Stock Exchange on the
next succeeding Valuation Day. A Valuation Day is each day that the New York
Stock Exchange is open for regular business. The value of the Variable Account
assets is determined at the end of each Valuation Day. To determine the value of
an asset on a day that is not a Valuation Day, the value of that asset as of the
end of the next Valuation Day will be used.
The Account Value is expected to change from Valuation Period to
Valuation Period, reflecting the investment experience of the selected
Portfolios as well as the deductions for charges.
Any time the value in a Sub-Account is less than $250, whether by
transfer, withdrawal or investment experience, we reserve the right to transfer
the balance in the Sub-Account to the Money Market Sub-account.
Net Purchase Payments are used to purchase Variable Accumulation Units
in the Sub-Account or Sub-Accounts you select. The number of Variable
Accumulation Units to be credited for each Sub-Account will be determined by
dividing the portion of each Net Purchase Payment allocated to the Sub-Account
by the Variable Accumulation Unit Value determined at the end of the Valuation
Period during which the Net Purchase Payment was received. Variable Accumulation
Units for Purchase Payments will be credited at the end of the Valuation Period
during which we receive the payment. The value of a Variable Accumulation Unit
for each Sub-Account for a Valuation Period is established at the end of each
Valuation Period and is calculated by multiplying the value of that unit at the
end of the prior Valuation Period by the Sub-Account's Net Investment Factor for
the Valuation Period.
The Net Investment Factor is a formula that reflects the changes in the
value of a share of the applicable Portfolio (and any dividends declared by the
Portfolio); it is used to determine the value of Accumulation Units. The
applicable formula can be found in the Statement of Additional Information. The
value of a Variable Accumulation Unit may go up or down.
Unlike a brokerage account, this account is not covered by the
Securities Investor Protection Corporation ("SIPC").
TRANSFERS
In General
Prior to the Annuity Date you may transfer all or part of your Account
Value among the Sub-Accounts by sending a written request to our Service Center.
The minimum amount which may be transferred is the lesser of $1,000 or the
entire value of the Sub-Account from which the transfer is being made. The
request must specify the amounts being transferred from each Sub-Account, and
the amounts being transferred to each Sub-Account that will receive the
transfer.
Currently, there is no limit on the number of transfers you can make
and there is no charge for the first ten transfers each Contract Year, but there
is a charge of $10 (or 2% of the amount of the transfer, whichever is less) for
each additional transfer in each Contract Year. We reserve the right to limit
the number of transfers you can make.
A transfer generally will be effective on the date the request for
transfer is received by our Service Center if received before 4:00 p.m. Eastern
Time. Under current law, there will not be any tax liability to you if you make
a transfer.
Transfers may also be subject to such terms and conditions as may be
imposed by the Portfolios.
Transfers among the Sub-Accounts will result in the purchase and/or
cancellation of Variable Accumulation Units having a total value equal to the
dollar amount being transferred to or from a particular Sub-Account. The
purchase and/or cancellation of such units generally shall be made using the
Variable Accumulation Unit value of the applicable Sub-Accounts as of the end of
the Valuation Day in which the transfer is effective.
Possible Restrictions
We reserve the right, without prior notice, to modify,
restrict, suspend or eliminate the transfer privileges (including telephone
transfers) at any time and for any reason. For example, restrictions may be
necessary to protect Contract Owners from adverse impacts on portfolio
management of large and/or numerous transfers by market timers or others. We
have determined that the movement of significant Sub-Account values from one
Sub-Account to another may prevent the underlying Portfolio from taking
advantage of investment opportunities because the Portfolio must maintain a
significant cash position in order to handle redemptions. Such movement may also
cause a substantial increase in Portfolio transaction costs which must be
indirectly borne by Contract Owners. Therefore, we reserve the right to require
that all transfer requests be made by the Owners and not by a third party
holding a power of attorney and to require that each transfer request be made by
a separate communication to us. We also reserve the right to request that each
transfer request be submitted in writing and be manually signed by the Owner(s);
facsimile transfer requests may not be allowed.
Dollar Cost Averaging (Automatic Transfers)
Prior to the Annuity Date, you may automatically transfer without
charge amounts from one Sub-Account selected, from among those being allowed
under this option, to any of the other Sub-Accounts on a monthly basis. The
transfers will begin on the tenth day of the next month following receipt of the
request, provided that automatic transfers will not commence until the later of
(a) 30 days after the Annuity Issue Date, or (b) the estimated end of the Free
Look Period. Transfers will continue unless terminated by you or automatically
terminated by us because there are insufficient funds in the applicable
Sub-Account, or for other reasons as set forth in the Contract.
Automatic transfers must meet the following conditions: (1) the minimum
amount that can be transferred out of the selected Sub-Account is $250 per
month; and (2) the minimum amount transferred into any other Sub-Account is the
greater of $250 or 10% of the amount being transferred that month. At the time
of your election and of the first automatic transfer made under this option, the
amount in the selected Sub-Account from which the transfers are to be made must
be at least $5,000.
Automatic transfers will not count toward the limitation of 10 free
transfers per Contract Year.
CASH WITHDRAWALS
Withdrawals
You (the Owner) may withdraw all or part of your Account Value at any
time during the life of the Annuitant and prior to the Annuity Date by request
in a manner and form acceptable to us at our Service Center, subject to the
rules below. Federal or state laws, rules or regulations may apply. The amount
payable to you if you surrender your Contract on or before the Annuity Date is
your Account Value less any applicable premium taxes. No withdrawals may be made
after the Annuity Date.
A full surrender will result in a cash withdrawal payment equal to the
Account Value (less any applicable premium taxes) at the end of the Valuation
Period during which the request is received. A request for a partial withdrawal
will result in a reduction in your Account Value equal to the sum of the dollar
amount withdrawn.
Partial withdrawals must be at least $1,000. You may instruct our
Service Center as to the amounts to be withdrawn from each Sub-Account. If not
so instructed, our Service Center will effect such withdrawal pro rata from all
Sub-Accounts in which your Account Value is invested.
A partial withdrawal will not be processed if it would reduce the
Account Value to less than $2,000. In that case, you will be contacted to decide
either to: (a) withdraw a lesser amount (subject to the $1,000 minimum) leaving
an Account Value of at least $2,000; or (b) completely surrender the Contract.
You will have ten days to notify us of your decision. Amounts payable will be
determined as of the end of the Valuation Period during which the subsequent
instructions are received. If, after the expiration of the 10-day period, no
election is received from you, the withdrawal request will be considered null
and void, and no withdrawal will be processed.
Withdrawals are generally taxable transactions (this includes APO
withdrawals and Systematic Withdrawals discussed below). Moreover, the Code
provides that a 10% penalty tax may be imposed on the taxable portions of
certain early withdrawals. The Code generally requires us to withhold federal
income tax from withdrawals. However, generally you will be entitled to elect,
in writing, not to have tax withholding apply. Withholding applies to the
portion of the withdrawal which is included in your income and subject to
federal income tax. The current tax withholding rate is 10% of the taxable
amount of the withdrawal. Withholding applies only if the taxable amount of the
withdrawal is at least $200. Some states also require withholding for state
income taxes. (See "Federal Tax Matters," page 23.)
Withdrawal requests must be made in writing to ensure that your
instructions regarding withholding are followed.
Since you assume the investment risk under the Contract, the total
amount paid upon surrender of your Contract (taking into account any prior
withdrawals) may be more or less than the total Purchase Payments you made.
Withdrawal (including surrender) requests generally will be processed
as of the end of the Valuation Period during which the completed request,
including any necessary forms, is received by the Service Center. Payment of any
cash withdrawal or lump sum death benefit due from the Variable Account will
occur no longer than seven days from the date the request is received, except
that we may postpone such payment if: (1) the New York Stock Exchange is closed
for other than usual weekends or holidays, or trading on the Exchange is
otherwise restricted; or (2) an emergency exists as defined by the Commission,
or the Commission requires that trading be restricted; or (3) the Commission
permits a delay for the protection of Owners. The withdrawal request will be
effective when any necessary withdrawal request forms are received. Payments of
any amounts derived from Purchase Payment paid by check may be delayed until the
check has cleared the Owner's bank.
After a surrender of your total Account Value, or at any time that your
Account Value is zero, all your rights under the Contract will terminate.
Since the Qualified Contracts offered by this Prospectus will be issued
in connection with retirement plans which meet the requirements of the Code,
reference should be made to the Code and the terms of the particular retirement
plans for any additional limitations or restrictions on cash withdrawals.
Systematic Withdrawal Option
Under the Systematic Withdrawal Option, you can instruct Transamerica
to make automatic payments of a predetermined dollar amount or fixed percentage
of the Account Value to you monthly. To be eligible for systematic withdrawal,
the Account Value must be at least $15,000 at the time you elect the Systematic
Withdrawal Option and at the time of the first withdrawal. The minimum
systematic withdrawal payment is $150.
Systematic withdrawals will commence on the fourth day of the month
following receipt of the election at our Service Center. Such date may not be
earlier than: (a) 30 days after the Annuity Issue Date shown on the Certificate
Data page; or (b) the end of the Free Look Period, whichever is later. If the
fourth day is not a Valuation Day, systematic withdrawals will start on the next
following Valuation Day. Subsequent withdrawals will be made on the fourth day
of each month thereafter. To ensure that your instructions regarding withholding
are followed, requests for systematic withdrawal must be in a manner and form
acceptable to the Service Center. You may specify the Sub-Accounts from which
systematic withdrawals will be made, but if you do not specify the Sub-Accounts
from which systematic withdrawals are to be taken, systematic withdrawals will
be taken pro-rata from all Sub-Accounts on the date of each systematic
withdrawal.
When using systematic withdrawals, an Owner may not simultaneously
participate in the Automatic Payout Option.
Systematic withdrawals may be taxable, subject to income tax
withholding, and subject to the 10% penalty tax. (See "Federal Tax Matters,"
page 23.)
Qualified Policies are subject to complex rules with respect to
restrictions on and taxation of distributions, including the applicability of
penalty taxes. A qualified tax adviser should be consulted before a Systematic
Withdrawal Option is requested. (See "Federal Tax Matters," page 23.)
Automatic Payout Option ("APO") For Qualified Plans
Prior to the Annuity Date, for Qualified Contracts (IRAs) only, you may
elect the Automatic Payout Option ("APO") to satisfy minimum distribution
requirements under Section 408(b)(3) of the Code with regard to this Contract.
This may be elected no earlier than six months prior to the calendar year in
which you attain age 701/2, but payments may not begin earlier than January 1 of
such calendar year and APO cannot be elected later than the month immediately
preceding the month in which you attain age 84. The APO may not be elected while
systematic withdrawals are in effect. Payments will continue unless terminated
by you or automatically terminated by us as stated in the Contract.
To be eligible for this option, the following conditions must be met:
(1) your Account Value must be at least $15,000 at the time of election and the
time of the first APO withdrawal; and (2) the annual withdrawal amount is the
larger of the required minimum distribution for this contract as defined under
Code Section 408(b)(3) or $1,000.
APO allows the required minimum distribution to be paid periodically
from any of the Sub-Accounts. If there are insufficient funds in any of the
Sub-Accounts to make a withdrawal, or for other reasons as set forth in the
Contract, this option will terminate. If you have more than one qualified plan
subject to the Code's minimum distribution requirement, you must consider all
such plans in the calculation of your minimum annual distribution requirement,
but Transamerica will make calculations and distributions with regard to this
Contract only. Termination of distributions from this Contract will not relieve
you from your distribution requirements if you own multiple contracts.
You may also make partial withdrawals in addition to APO withdrawals,
subject to the withdrawal provisions of the Contract.
APO withdrawals may be taxable and subject to income tax withholding.
APO is not available with respect to the Fixed Account. Therefore, it
may be necessary to transfer amounts from the Fixed Account to the Variable
Account to continue APO withdrawals and if such transfers are from a Guarantee
Period before its Expiration Date, the amount will be subject to an interest
adjustment.
DEATH BENEFIT
Before the Annuity Date, the death benefit will equal the larger of (1)
the sum of the Purchase Payments, less withdrawals and less premium or similar
taxes as of the date of death of you or the Annuitant, or (2) your Account
Value, as of the end of the Valuation Period during which the later of (a) due
Proof of Death is received by our Service Center and (b) a written notice of the
method of settlement elected by the Beneficiary is received at our Service
Center. (See "Designation of Beneficiaries," page 17.) If no settlement method
is elected, the death benefit will be paid in a lump sum no later than one year
after the date of death. Until the death benefit is paid, the Account Value
remains in the Variable Account, and fluctuates with the investment performance
of the applicable Portfolio(s). Accordingly, the amount of the death benefit
depends on the Account Value at the time the death benefit is paid (not on the
date of death).
Due Proof of Death may be: (a) a certified copy of a death certificate;
(b) a copy of a certified decree of a court of competent jurisdiction as to the
finding of death; or (c) a written statement by a medical doctor who attended
the deceased; and any other proof and documents satisfactory to us.
Payment of Death Benefit
The death benefit is generally payable upon receipt of Proof of Death
of you or the Annuitant. Upon receipt of this proof and an election of a method
of settlement, the death benefit generally will be paid within seven days, or as
soon thereafter as we have sufficient information about the Beneficiary to make
the payment. The Beneficiary may receive the amount payable in a lump sum cash
benefit or, subject to any limitations under any state or federal law, rule, or
regulation, under one of the annuity forms, unless a settlement agreement is
effective under the Contract preventing such election. If no settlement method
is elected within one year of the date of death, the death benefit will be paid
in a lump sum based upon the Account Value at that time (i.e., one year after
the date of death). The payment of the death benefit may be subject to certain
distribution requirements under the federal income tax laws. (See "Federal Tax
Matters," page 23.)
Designation of Beneficiaries
You may select one or more Beneficiaries and name them in the
application or a Beneficiary designation form. If you select more than one
Beneficiary, unless you otherwise indicate, they will share equally in any death
benefits payable in the event of the Annuitant's death before the Annuity Date
if there is no Contingent Annuitant or upon your death if there is no Joint
Owner. Different Beneficiaries may be named with respect to the Annuitant's
death ("Annuitant's Beneficiary") and your death ("Owner's Beneficiary"). Before
the Annuitant's death, you may change any Beneficiary by written notice to the
Service Center. You may also make the designation of a Beneficiary irrevocable
by sending written notice to and obtaining approval from our Service Center.
Irrevocable Beneficiaries may be changed only with the written consent of the
designated Irrevocable Beneficiaries, except to the extent required by law.
The interest of any Beneficiary who dies before you or the Annuitant
will terminate at the death of the Beneficiary. The interest of any Beneficiary
who dies at the time of, or within 30 days after your or the Annuitant's death,
will also terminate if no benefits have been paid, unless the Contract has been
endorsed to provide otherwise. The benefits will then be paid as though the
Beneficiary has died before you or the Annuitant. If the interest of all
designated Beneficiaries has terminated, or if you do not designate a
Beneficiary, any benefits payable will be paid to your estate.
We may rely on an affidavit by any responsible person in determining
the identity or non-existence of any Beneficiary not identified by name.
Death of Annuitant Prior to the Annuity Date
If the Annuitant dies prior to the Annuity Date, the Annuitant is not
an Owner, and there is no Contingent Annuitant, a death benefit under the
Contract relating to that Annuitant will be paid to the Annuitant's Beneficiary.
If there is a Contingent Annuitant, then the Contingent Annuitant will become
the Annuitant and no Death Benefit shall be payable.
Death of Owner Prior to the Annuity Date
If an Owner dies before the Annuity Date, a death benefit will be paid
to the Owner's Beneficiary. If your Joint Owner or Beneficiary is your spouse,
then your spouse may elect to treat the Contract as his or her own.
Death of Owner or Annuitant After the Annuity Date
If an Owner or the Annuitant dies after the Annuity Date, the remaining
undistributed portion, if any, of the Contract will be distributed at least as
rapidly as under the method of distribution being used as of the date of such
death. Under some annuity forms, there will be no death benefit.
CHARGES AND DEDUCTIONS
THIS PRODUCT HAS NO SALES CHARGE AND NO WITHDRAWAL OR SURRENDER CHARGES.
No deductions are made from Purchase Payments except for any applicable
premium taxes. Therefore, the full amount of the Purchase Payments (less any
applicable premium tax charges) is invested in the Variable Account.
As more fully described below, charges under the Contract are assessed
only as deductions for premium taxes, if applicable, as charges against the
assets of the Variable Account for our assumption of mortality and expense risks
and administrative expenses (if charged), for certain transfers, and as an
Annual Contract Charge.
In addition, certain deductions are made from the assets of the
Portfolios for investment management fees and expenses. These fees and expenses
are described in the Portfolios' prospectuses and their Statements of Additional
Information.
Mortality and Expense Risk Charge
We deduct a Mortality and Expense Risk Charge from the Variable Account
at the end of each Valuation Period to compensate us for bearing certain
mortality and expense risks under the Contracts. This is a daily charge equal to
an effective annual rate of 0.85% of the value of the net assets in the Variable
Account. We guarantee that this charge will never increase beyond 0.85%.
The Mortality and Expense Risk Charge is reflected in the Variable
Accumulation Unit Values for each Sub-Account.
Account Values and annuity payments are not affected by changes in
actual mortality experience incurred by us. The mortality risks assumed by us
arise from our contractual obligations to make annuity payments determined in
accordance with the annuity tables and other provisions contained in the
Contract. Thus you are assured that neither the Annuitant's longevity nor an
unanticipated improvement in general life expectancy will adversely affect the
annuity payments under the Contract.
We also bear substantial risk in connection with the death benefit
before the Annuity Date, since we will pay a death benefit equal to the greater
of your Account Value or your Purchase Payments less withdrawals and premium
taxes applicable to such withdrawals (so we bear the risk of unfavorable
experience in the Sub-Accounts).
The expense risk assumed by us is the risk that our actual expenses in
administering the Contracts and the Variable Account will be greater than
anticipated, or exceed the amount recovered through the Annual Contract Charge
plus the amount, if any, recovered through Transfer Fees and the Administrative
Expense Charge (currently not being charged).
If the Mortality and Expense Risk Charge is insufficient to cover
actual costs and risks assumed, the loss will fall on us. Conversely, if this
charge is more than sufficient, any excess will be profit to us. Currently, we
expect a profit from this charge. Our expenses for distributing the Contracts
will be borne by our general assets, including any profits from this charge.
Administrative Expense Charges
We currently deduct a $25 (or 2% of Account Value if less) Annual
Contract Charge from the Account Value on each Contract Anniversary to partially
cover our costs for administering the Contracts and the Variable Account. The
Annual Contract Charge is deducted from the Money Market Sub-Account. If there
are not sufficient funds in the Money Market Sub-Account to cover the Annual
Contract Charge, then the Charge or any portion thereof will be deducted pro
rata from the other Sub-Accounts in the proportion that the Account Value in a
Sub-Account bears to the total Account Value in all Sub-Accounts.
We currently do not deduct any other administrative expense charge.
However, we reserve the right to deduct such a charge from the Variable Account
at the end of each Valuation Period at an effective annual rate that is
guaranteed not to exceed 0.15% of the assets held in the Variable Account. We
will provide you at least 30 days written notice before any such charge is
imposed.
Premium Tax Charge
We may be required to pay state premium taxes or retaliatory taxes
currently ranging from 0% to 3.5% in connection with Purchase Payments or values
under the Contracts. Depending upon applicable state law, we will deduct charges
for the premium taxes we incur with respect to a particular Contract from the
Purchase Payments, from amounts withdrawn, or from amounts applied on the
Annuity Date. In some states, charges for both direct premium taxes and
retaliatory premium taxes may be imposed at the same or different times with
respect to the same Purchase Payment, depending on applicable state law. Other
Taxes
Under present laws, we will incur state or local taxes (in addition to
the premium taxes described above) in several states. No charges are currently
made for taxes other than state premium taxes. However, we reserve the right to
deduct charges in the future for federal, state, and local taxes or the economic
burden resulting from the application of any tax laws that we determine to be
attributable to the Contracts.
Portfolio Expenses
The value of the assets in the Variable Account reflects the value of
Portfolio shares and therefore the fees and expenses paid by each Portfolio. A
complete description of the fees, expenses, and deductions from the Portfolios
are found in the Funds' prospectuses. (See "The Portfolios," page 9.) Current
prospectuses for the Portfolios can be obtained by calling the Service Center at
800-258-4261 or P.O. Box 31728, Charlotte, North Carolina 28231-1728.
Transfer Fee
There will be a $10 (or 2% of the amount of the transfer, if less)
charge for each transfer in excess of ten transfers in any Contract Year.
ANNUITY PAYMENTS
Election of Annuity Date and Annuity Form
The Annuity Date is the date that your Account Value (less any
applicable premium taxes) is applied to provide the annuity payments under your
selected annuity form (unless your entire Account Value has been withdrawn or
the death benefit has been paid to the Beneficiary prior to that date). When the
contract is issued, the designated annuity form is a Life Annuity with period
certain of 120 months (10 years). Before the Annuity Date, and while the
Annuitant is living, you may change the Annuity Date or annuity form by written
request. The request for change of the Annuity Date or annuity form must be
received by the Service Center at least 30 days prior to the Annuity Date. We
will provide you with at least 90 days notice of your Annuity Date so you can
change the date or the annuity form, if you so desire.
The Annuity Date must not be earlier than the first day of the calendar
month coinciding with or next following the first Contract Anniversary. The
latest Annuity Date which may be elected is the first day of the calendar month
immediately preceding the month of the Annuitant's 85th birthday. The Annuity
Date must be the first day of a calendar month and initially will be the first
day of the month prior to the Commencement of Annuity Payment Date selected by
you at the time the application is completed. The first annuity payment will be
on the Commencement of Annuity Payment Date, which is the first day of the month
immediately following the Annuity Date.
Fixed Annuity Payment
The amount of each annuity payment is fixed and will remain constant
pursuant to the terms of the annuity form elected (variable annuity payment
options are not currently offered). On the Annuity Date, the Account Value will
be transferred to our general account assets. The amount of annuity payments
will be established by the fixed annuity forms selected and the age and sex
(unless unisex rates are required by law) of the Annuitant. The annuity payments
will not reflect investment experience after the Annuity Date. The fixed annuity
payment amounts are determined by applying the Annuity Purchase Rate specified
in your Contract to the annuity form selected by you. Payments may change after
the death of the Annuitant under some annuity forms; the amounts of these
changes are fixed on the Annuity Date.
Choice of Annuity Forms
You may choose any of the four annuity forms described below. Subject
to our approval, you may select any other annuity forms then being offered by
us.
(1) Life Annuity. Payments start on the first day of the month
immediately following the Annuity Date, if the Annuitant is living. Payments end
with the payment due just before the Annuitant's death. There is no death
benefit under this form. It is possible that only one payment will be made under
this form if the Annuitant dies before the second payment is due; only two
payments will be made if the Annuitant dies before the third payment is due, and
so forth.
(2) Life and Contingent Annuity. Payments start on the first day of the
month immediately following the Annuity Date, if the Annuitant is living.
Payments will continue for as long as the Annuitant lives. After the Annuitant
dies, payments will be made to the Contingent Annuitant, if living, for as long
as the Contingent Annuitant lives. The continued payments can be in the same
amount as the original payments, or in an amount equal to one-half or two-thirds
thereof. Payments will end with the payment due just before the death of the
Contingent Annuitant. There is no death benefit after both die. If the
Contingent Annuitant does not survive the Annuitant, payments will end with the
payment due just before the death of the Annuitant. It is possible that only one
payment or very few payments will be made under this form, if the Annuitant and
Contingent Annuitant die shortly after payments begin.
The request for this form must: (a) name the Contingent Annuitant; and
(b) state the percentage of payments for the Contingent Annuitant. Once Annuity
Payments start under this annuity form, the person named as Contingent
Annuitant, for purposes of being the measuring life, may not be changed. We will
require proof of age for the Annuitant and for the Contingent Annuitant before
payments start.
(3) Life Annuity With Period Certain. Payments start on the first day
of the month immediately following the Annuity Date, if the Annuitant is living.
Payments will be made for the longer of: (a) the Annuitant's life; or (b) the
period certain. The period certain may be 120 or 180 or 240 months, but in no
event may it exceed the life expectancy of the Annuitant.
If the Annuitant dies after all payments have been made for the period
certain, payments will cease with the payment due just before the Annuitant's
death. No benefit will then be payable to the Annuitant's Beneficiary.
If the Annuitant dies during the period certain, the rest of the period
certain payments will be made to the Annuitant's Beneficiary; you may elect to
have the commuted value of these payments paid in a single sum. We will
determine the commuted value by discounting the rest of the payments at the then
current rate of interest used by us for commuted values.
If after the Annuitant's death, you have not elected to have the
commuted value paid in a single sum and if the Annuitant's Beneficiary dies
before all of the payments under the period certain have been made, you may
designate a Payee to receive any remaining payments. If the Annuitant's
Beneficiary dies before receiving all of the remaining period certain payments
and a designated Payee does not survive the Annuitant's Beneficiary for at least
30 days, then the remaining payments will be paid to you, if living, otherwise
in a single sum to your estate.
The request for this form must: (a) state the length of the period
certain; and (b) name the
Annuitant's Beneficiary.
(4) Joint and Survivor Annuity. Payments will be made to the Annuitant,
starting on the first day of the month immediately following the Annuity Date,
if and for as long as the Annuitant and the Joint Annuitant are living. After
the Annuitant or the Joint Annuitant dies, payments will continue for as long as
the survivor lives. The continued payments can be in the same amount as the
original payments, or in an amount equal to one-half or two-thirds thereof. It
is possible that only one payment or very few payments will be made under this
form if the Annuitant and the Joint Annuitant both die shortly after payments
begin.
The selection of the Joint and Survivor Annuity form may have adverse
tax consequences and competent tax and legal counsel should be sought before you
select it.
The request for this form must: (a) name the Joint Annuitant; and (b)
state the percentage of continued payments for the survivor. Once payments start
under this annuity form, the person named as Joint Annuitant, for the purpose of
being the measuring life, may not be changed. We will need proof of age for the
Joint Annuitant before payments start.
(5) Other Forms of Payment. Benefits can be provided under any other
annuity form not described in this section subject to our agreement and any
applicable state or federal law or regulation. Requests for any other annuity
form must be made in writing to our Service Center at least 30 days before the
Annuity Date.
* * *
For annuity forms involving life income, the actual age and/or sex of
the Annuitant, or a Joint or Contingent Annuitant will affect the amount of each
payment. We reserve the right to ask for satisfactory proof of the Annuitant's
(or Joint or Contingent Annuitant's) age. We may delay annuity payments until
satisfactory proof is received. Since payments to older Annuitants are expected
to be fewer in number, the amount of each annuity payment under a selected
annuity form will be greater for older Annuitants than for younger Annuitants.
In the event that an annuity form is not selected at least 30 days before the
Annuity Date, we will make annuity payments in accordance with the "Life Annuity
With Period Certain" of 120 months, and the applicable provisions of the
Contract.
The Annuity Date and annuity forms available for Qualified Contracts
may also be controlled by endorsements, the plan documents, or applicable law.
If the amount of the monthly annuity payment would be less than $20 or
if your Account Value (less any applicable premium tax charge) is less than
$2,000, we reserve the right to offer a less frequent mode of payment or to pay
that amount in a lump sum cash payment to you.
Once payments start under the annuity form selected by the Owner: (a)
no changes can be made in the annuity form; (b) no additional Purchase Payments
will be accepted under the Contract; and (c) no further withdrawals other than
withdrawals made to provide annuity benefits, will be allowed.
You may, at any time after the Annuity Date, request, in a manner and
form acceptable to us, the Service Center to change the Payee of annuity
benefits being provided under the Contract. The effective date of change in
Payee will be the later of: (a) the date we receive the notice for such change;
or (b) the date specified by you. If the Contract is issued as an IRA, you may
not change the Payee on or after the Annuity Date.
* * *
A portion or the entire amount of the annuity payments may be taxable
as ordinary income. If, at the time the annuity payments begin, we have not
received a proper written election not to have federal income taxes withheld, we
must by law withhold such taxes from the taxable portion of such annuity
payments and remit that amount to the federal government. State income tax
withholding may also apply. (See "Federal Tax Matters," page 23.)
Alternate Fixed Annuity Rates
The amount of any fixed annuity payments will be determined on the
Annuity Date by using either the guaranteed fixed annuity rates or our current
single Purchase Payment fixed annuity rates at that time, whichever would result
in a higher amount of monthly fixed annuity payments.
FEDERAL TAX MATTERS
Introduction
The following discussion is a general description of federal tax
considerations relating to the Contracts and is not intended as tax advice. This
discussion is not intended to address the tax consequences resulting from all of
the situations in which a person may be entitled to or may receive a
distribution under the Contract. Any person concerned about these tax
implications should consult a competent tax adviser before initiating any
transaction. This discussion is based upon our understanding of the present
federal income tax laws as they are currently interpreted by the Internal
Revenue Service. No representation is made as to the likelihood of the
continuation of the present federal income tax laws or of the current
interpretation by the Internal Revenue Service. Moreover, no attempt has been
made to consider any applicable state or other tax laws.
The Contract may be purchased on a non-tax qualified basis
("Non-Qualified Contract") or purchased and used in connection with plans
qualifying for special tax treatment ("Qualified Contract"). Qualified Contracts
are designed for use in connection with plans entitled to special income tax
treatment under Section 408 of the Code. The ultimate effect of federal income
taxes on the amounts held under a Contract, on annuity payments, and on the
economic benefit to you, the Annuitant, or the Beneficiary may depend on the
type of retirement plan, and on the tax status of the individual concerned. In
addition, certain requirements must be satisfied in purchasing a Qualified
Contract and receiving distributions from a Qualified Contract in order to
continue receiving special tax treatment. Therefore, purchasers of Qualified
Contracts should seek competent legal and tax advice regarding the suitability
of the Contract for their situation, the applicable requirements, and the tax
treatment of the rights and benefits of the Contract. The following discussion
assumes that a Qualified Contract is purchased with proceeds from and/or
contributions under retirement plans that qualify for the intended special
federal income tax treatment.
The following discussion is based on the assumption that the Contract
qualifies as an annuity contract for federal income tax purposes. The Statement
of Additional Information discusses the requirements for qualifying as an
annuity.
Taxation of Annuities
In General
Section 72 of the Code governs taxation of annuities in general. We
believe that an Owner who is a natural person generally is not taxed on
increases (if any) in the value of an Account Value until distribution occurs by
withdrawing all or part of the Account Value (e.g., withdrawals or annuity
payments under the annuity form elected). For this purpose, the assignment,
pledge, or agreement to assign or pledge any portion of the Account Value
generally will be treated as a distribution. The taxable portion of a
distribution (in the form of a single sum payment or an annuity) is taxable as
ordinary income. Qualified Contracts cannot be assigned or pledged.
The Owner of any annuity contract who is not a natural person generally
must include in income any increase in the excess of the Account Value over the
"investment in the contract" (discussed below) during each taxable year. There
are some exceptions to this rule and a prospective Owner that is not a natural
person may wish to discuss these with a competent tax adviser.
The following discussion generally applies to a Contract owned by a
natural person.
Withdrawals
In the case of a withdrawal under a Qualified Contract, including
withdrawals under the Automatic Payout Option, a ratable portion of the amount
received is taxable, generally based on the ratio of the "investment in the
contract" to the individual's total accrued benefit under the retirement plan.
The "investment in the contract" generally equals the amount of any
non-deductible Purchase Payments paid by or on behalf of any individual. For a
Contract issued in connection with qualified plans, the "investment in the
contract" can be zero. Special tax rules may be available for certain
distributions from a Qualified Contract.
With respect to Non-Qualified Contracts, partial withdrawals, including
systematic withdrawals, are generally treated as taxable income to the extent
that the Account Value immediately before the withdrawal exceeds the "investment
in the contract" at that time. The "investment in the Contract" generally is
equal to the amount of Purchase Payments made. Full surrenders are treated as
taxable income to the extent that the amount received exceeds the "investment in
the contract."
Annuity Payments
Although the tax consequences may vary depending on the annuity form
elected under the Contract, in general, only the portion of the annuity payment
that represents the amount by which the Account Value exceeds the "investment in
the contract" will be taxed; after the investment in the contract is recovered,
the full amount of any additional annuity payments is taxable. For fixed annuity
payments, in general there is no tax on the portion of each payment which
represents the same ratio that the "investment in the contract" bears to the
total expected value of the annuity payments for the term of the payments;
however, the remainder of each annuity payment is taxable. Once the investment
in the Contract has been fully recovered, the full amount of any additional
annuity payments is taxable. If the annuity payments cease as a result of an
Annuitant's death before full recovery of the "investment in the contract," you
should consult a competent tax adviser regarding the deductibility of the
unrecovered amount.
Penalty Tax
In the case of a distribution pursuant to a Non-Qualified Contract,
there may be imposed a federal income tax penalty equal to 10% of the amount
treated as taxable income. In general, however, there is no penalty tax on
distributions: (1) made on or after the date on which the Owner attains age 59
1/2; (2) made as a result of death or disability of the Owner; or (3) received
in substantially equal periodic payments as a life annuity or a joint and
survivor annuity for the lives or life expectancies of the Owner and a
"designated beneficiary." Other tax penalties may apply to certain distributions
pursuant to a Qualified Contract.
Taxation of Death Benefit Proceeds
Amounts may be distributed from the Contract because of the death of an
Owner or the Annuitant. Generally such amounts are includible in the income of
the recipient as follows: (1) if distributed in a lump sum, they are taxed in
the same manner as a full surrender, as described above, or (2) if distributed
under an annuity form, they are taxed in the same manner as annuity payments, as
described above. 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 the amount of any Purchase Payments paid which were not
excluded from gross income.
Required Distributions upon Owner's Death
Notwithstanding any provision of the Contract or this prospectus to the
contrary, no payment of benefits provided under the Contract will be allowed
that does not satisfy the requirements of Section 72(s) of the Code.
Notwithstanding any other provision of the Contract or this prospectus,
if the Owner dies before the Annuity Date, the Death Benefit payable to the
Owner's Beneficiary will be distributed as follows:
(a) the Death Benefit must be completely distributed within
five years of the Owner's date
of death; or
(b) the Owner's Beneficiary may elect, within the one year period
after the Owner's date of death, to receive the Death Benefit
in the form of an annuity from us, provided that: (1) such
annuity is distributed in substantially equal installments
over the life of such Owner's Beneficiary or over a period not
extending beyond the life expectancy of such Owner's
Beneficiary; and (2) such distributions begin not later than
one year after the Owner's date of death.
Notwithstanding (a) and (b) above, if the sole Owner's Beneficiary is
the deceased Owner's surviving spouse, then such spouse may elect, within the
one year period after the Owner's date of death, to continue the contract under
the same terms as before the Owner's death. Upon receipt of such election from
the spouse, in a form and manner acceptable to us, at our Service Office: (1)
all rights of the spouse as Owner's Beneficiary under the contract in effect
prior to such election will cease; (2) the spouse will become the Owner of the
contract and will also be treated as the Contingent Annuitant, if none has been
named and only if the deceased Owner was the Annuitant; and (3) all rights and
privileges granted by the contract or allowed by Transamerica will belong to the
spouse as Owner of the Contract. This election will be deemed to have been made
by the spouse if such spouse makes a Purchase Payment to the Contract or fails
to make a timely election as described in this paragraph.
If the Owner's Beneficiary is a non-spouse, the distribution provisions
described in subparagraphs (a) and (b) above, will apply even if the Annuitant
and/or Contingent Annuitant are alive at the time of the Owner's death. If the
non-spouse Owner's Beneficiary is not an individual, then only a cash payment
will be paid.
If no election is received by us from a non-spouse Owner's Beneficiary within
the one year period after the Owner's date of death, then we will pay the Death
Benefit to the Owner's Beneficiary in a cash payment. The Death Benefit will be
determined as of the date we make the cash payment. Such cash payment will be in
full settlement of all our liability under the contract.
If the Annuitant dies after the annuity starts, any benefit payable
will be distributed at least as rapidly as under the Annuity Form then in
effect.
If the Owner dies after the annuity starts, any benefit payable will
continue to be distributed at least as rapidly as under the Annuity Form then in
effect. All of the Owner's rights granted under the contract or allowed by us
will pass to the Owner's Beneficiary.
Joint Ownership - For purposes of this section, if the contract has
Joint Owners we will consider the date of death of the first Joint Owner as the
death of the Owner and the surviving Joint Owner will become the Owner of the
Contract subject to the required distribution requirements described above.
Transfers, Assignments, or Exchanges
Transfer of ownership of a Contract, the designation of an Annuitant,
Payee or other Beneficiary who is not also the Owner, or the exchange of a
Contract may result in certain tax consequences to the Owner that are not
discussed herein. An Owner contemplating any such designation, transfer,
assignment, or exchange of a Contract should contact a competent tax adviser
with respect to the potential tax effects of such a transaction.
Multiple Contracts
All deferred, non-qualified contracts that are issued by us (or our
affiliates) to the same Owner during any calendar year are treated as one
annuity contract for purposes of determining the amount includible in gross
income under section 72(e) of the Code. In addition, the Treasury Department has
specific authority to issue regulations that prevent the avoidance of section
72(e) through the serial purchase of annuity contracts or otherwise. Congress
has also indicated that the Treasury Department may have authority to treat the
combination purchase of an immediate annuity contract and separate deferred
annuity contracts as a single annuity contract under its general authority to
prescribe rules as may be necessary to enforce the income tax laws.
Withholding
Pension and annuity distributions generally are subject to withholding
for the recipient's federal income tax liability at rates that vary according to
the type of distribution and the recipient's tax status. Recipients, however,
generally are provided the opportunity to elect not to have tax withheld from
distributions. (See discussion of this election under "Withdrawals" on page 15.)
Possible Changes in Taxation
Legislation has been proposed in 1998 that, if enacted, would adversely
modify the federal taxation of certain insurance and annuity contracts. For
example, one proposal would tax transfers among investment options and tax
exchanges involving variable contracts. A second proposal would reduce the
"investment in the contract" under cash value life insurance and certain annuity
contracts by certain amounts, thereby increasing the amount of income for
purpose of computing gain. Although the likelihood of there being any changes is
uncertain, there is always the possibility that the tax treatment of the
contracts could change by legislation or other means. Moreover, it is also
possible that any change could be retroactive (that is, effective prior to the
date of change). You should consult a tax adviser with respect to legislative
developments and their effect on the Contract.
Other Tax Consequences
As noted above, the foregoing discussion of the federal income tax
consequences is not exhaustive and special rules are provided with respect to
other tax situations not discussed in this Prospectus. Further, the federal
income tax consequences discussed herein reflect our understanding of current
law and the law may change. Federal estate tax consequences and state and local
estate, inheritance, and other tax consequences of ownership or receipt of
distributions under a Contract depend on the individual circumstances of each
Owner or recipient of the distribution. A competent tax adviser should be
consulted for further information.
Qualified Plans --- Individual Retirement Annuities
The Contract is designed for use with IRA rollovers. Section 408 of the
Code permits eligible individuals to contribute to an individual retirement
program known as an Individual Retirement Annuity (each referred to as an
"IRA"). Also, distributions from certain other types of qualified plans may be
"rolled over" on a tax-deferred basis into an IRA. The sale of a Contract for
use with an IRA may be subject to special disclosure requirements of the
Internal Revenue Service. Purchasers of the Contract for use with IRAs will be
provided with supplemental information required by the Internal Revenue Service
or other appropriate agency. Such purchasers will have the right to revoke their
purchase within seven days of the earlier of the establishment of the IRA or
their purchase. Various tax penalties may apply to contributions in excess of
specified limits, aggregate distributions in excess of certain limits annually,
distributions that do not satisfy specified requirements, and certain other
transactions. In addition, IRAs are subject to limitations on the amount that
can be contributed and deducted and the time when distributions can commence. A
Qualified Contract will be amended as necessary to conform to the requirements
of the Code. Purchasers should seek competent advice as to the suitability of
the Contract for use with IRAs.
Restrictions under Qualified Contracts
Other restrictions with respect to the election, commencement, or
distribution of benefits may apply under Qualified Contracts.
General
At the time the Initial Purchase Payment is paid, a prospective
purchaser must specify whether he or she is purchasing a Non-Qualified Contract
or a Qualified Contract. If the Initial Purchase Payment is derived from an
exchange or surrender of another annuity contract, we may require that the
prospective purchaser provide information with regard to the federal income tax
status of the previous annuity contract. We will require that persons purchase
separate Contracts if they desire to invest monies qualifying for different
annuity tax treatment under the Code. Each such separate Contract would require
the minimum Initial Purchase Payment stated above. Additional Purchase Payments
under a Contract must qualify for the same federal income tax treatment as the
Initial Purchase Payment under the Contract; we will not accept an additional
Purchase Payment under a Contract if the federal income tax treatment of such
Purchase Payment would be different from that of the Initial Purchase Payment.
PERFORMANCE DATA
From time to time, we may advertise yields and average annual total
returns for the Sub-Accounts of the Variable Account. In addition, we may
advertise the effective yield of the Money Market Sub-Account. These figures
will be based on historical information and are not intended to indicate future
performance.
The yield of the Money Market Sub-Account refers to the annualized
income generated by an investment in that Sub-Account over a specified seven-day
period. The yield is calculated by assuming that the income generated for that
seven-day period is generated each seven-day period over a 52-week period and is
shown as a percentage of the investment. The effective yield is calculated
similarly but, when annualized, the income earned by an investment in that
Sub-Account is assumed to be reinvested. The effective yield will be slightly
higher than the yield because of the compounding effect of this assumed
reinvestment.
The yield of a Sub-Account (other than the Money Market Sub-Account)
refers to the annualized income generated by an investment in the Sub-Account
over a specified thirty-day period. The yield is calculated by assuming that the
income generated by the investment during that thirty-day period is generated
each thirty-day period over a twelve-month period and is shown as a percentage
of the investment.
The yield calculations do not reflect the effect of any premium taxes
that may be applicable to a particular Contract. To the extent that premium
taxes are applicable to a particular Contract, the yield of that Contract will
be reduced. For a description of the methods used to determine yield and total
returns, see the Statement of Additional Information.
The average annual total return of a Sub-Account refers to return
quotations assuming an investment has been held in the Sub-Account for various
periods of time including, but not limited to, a period measured from the date
the Sub-Account commenced operations. When a Sub-Account has been in operation
for 1, 5, and 10 years, respectively, the average annual total return for these
periods will be provided. The average annual total return quotations will
represent the average annual compounded rates of return that would equate an
initial investment of $1,000 to the redemption value of that investment
(excluding premium taxes) as of the last day of each of the periods for which
total return quotations are provided. For additional information regarding
yields and total returns calculated using the standard formats briefly described
herein, please refer to the Statement of Additional Information.
Performance information for any Sub-Account reflects only the
performance of a hypothetical Contract under which Account Value is allocated to
a Sub-Account during a particular time period on which the calculations are
based. Performance information should be considered in light of the investment
objectives and policies and characteristics of the Portfolios in which the
Sub-Account invests, and the market conditions during the given time period, and
should not be considered as a representation of what may be achieved in the
future.
Reports and promotional literature may also contain other information
including (1) the ranking of any Sub-Account derived from rankings of variable
annuity separate accounts or their investment products tracked by Lipper
Analytical Services, Inc., VARDS, Morningstar, Value Line, IBC/Donoghue's Money
Fund Report, Financial Planning Magazine, Money Magazine, Bank Rate Monitor,
Standard & Poor's Indices, Dow Jones Industrial Average, and other rating
services, companies, publications, or other persons who rank separate accounts
or other investment products on overall performance or other criteria, and (2)
the effect of tax deferred compounding on Sub-Account investment returns, or
returns in general, which may be illustrated by graphs, charts, or otherwise,
and which may include a comparison, at various points in time, of the return
from an investment in a Contract (or returns in general) on a tax-deferred basis
(assuming one or more tax rates) with the return on a currently taxable basis.
Other ranking services and indices may be used.
We may from time to time also disclose cumulative (non-annualized)
total returns for the Sub-Accounts. We may from time to time also disclose yield
and standard total returns for any or all Sub-Accounts.
We may also advertise performance figures for the Sub-Accounts based on
the performance of a Portfolio prior to the time the Variable Account commenced
operations.
For additional information regarding the calculation of other
performance data, please refer to the Statement of Additional Information.
DISTRIBUTION OF THE CONTRACTS
Transamerica Securities Sales Corporation ("TSSC") is the principal
underwriter and distributor
of the Contracts. TSSC is registered with the Commission as a
broker/dealer and is a member of the
National Association of Securities Dealers, Inc. ("NASD"). Its principal
offices are located at 1150
South Olive Street, Los Angeles, California 90015, telephone 213-741-7702
VOTING RIGHTS
To the extent required by applicable law, all Portfolio shares held in
the Variable Account will be voted by us at regular and special shareholder
meetings of the respective Funds in accordance with instructions received from
persons having voting interests in the corresponding Sub-Account. If, however,
the 1940 Act or any regulation thereunder should be amended, or if the present
interpretation thereof should change, or if we determine that we are allowed to
vote all Portfolio shares in our own right, we may elect to do so.
Before the Annuity Date, you, the Owner, have the voting interest. The
number of votes which are available to you will be calculated separately for
each Sub-Account. That number will be determined by applying your percentage
interest, if any, in a particular Sub-Account to the total number of votes
attributable to that Sub-Account. You hold a voting interest in each Sub-Account
to which your Contract Value is allocated. You have no voting interest after the
Annuity Date.
The number of votes of a Portfolio will be determined as of the date
coincident with the date established by that Portfolio for determining
shareholders eligible to vote at the meeting of the Funds. Voting instructions
will be solicited by written communication prior to such meeting in accordance
with procedures established by the respective Funds.
Shares as to which no timely instructions are received and shares held
by us as to which Owners have no beneficial interest will be voted in proportion
to the voting instructions which are received with respect to all Contracts
participating in the Sub-Account. Voting instructions to abstain on any item to
be voted upon will be applied on a pro rata basis to reduce the votes eligible
to be cast.
Each person or entity having a voting interest in a Sub-Account will
receive proxy material, reports and other material relating to the appropriate
Portfolio.
It should be noted that generally the Funds are not required to, and do
not intend to, hold annual or other regular meetings of shareholders.
PREPARING FOR YEAR 2000
As a result of computer systems that may recognize a date of 12/31/00
as the year 1900 rather than the year 2000, disruptions of business activities
may occur with the year 2000. In response, Transamerica established in 1997 a
"Y2K" committee to address this issue. With regard to the systems and software
which administer and affect the Policies, Transamerica has determined that is
own internal systems will be Year 2000 compliant. Additionally, Transamerica
requires any third party vendor which supplies software or administrative
services to Transamerica in connection with the administration of the policies,
to certify that the software or services will be Year 2000 compliant. In
determining the variable accumulation unit values for each Sub-Account of the
Variable Account, Transamerica is reliant upon information received from the
Portfolios and is confirming that Year 2000 issues will not interfere with this
flow of information. As of the date of this prospectus, it is not anticipated
that Policy Owners will experience negative affects on their investment, or on
the services received in connection with their Policies, as a result of Year
2000 issues. However, especially when taking into account interaction with other
systems, it is difficult to predict with precision that there will be no
disruption of services in connection with the year 2000.
LEGAL PROCEEDINGS
There is at present no pending material legal proceeding to which the
Variable Account is a party or to which the assets of the Variable Account are
subject. We are involved in various kinds of litigation which, in management's
judgment, is not of material importance in relation to our total assets or to
the assets of the Variable Account.
LEGAL MATTERS
The organization of Transamerica, Transamerica's authority to
issue the Contract, and the
validity of the form of the Contract have been passed upon by James W.
Dederer, Secretary and General
Counsel of Transamerica.
ACCOUNTANTS
The financial statements of Transamerica at December 31, 1997 and 1996, and for
each of the three years in the period then ended December 31, 1997, and the
financial statements for the Variable Account at December 31, 1997, and for each
of the two years in the period then ended, appearing in the Statement of
Additional Information have been audited by Ernst & Young LLP, Independent
Auditors, as set forth in their reports thereon appearing elsewhere herein, and
are included in reliance upon such reports given upon the authority of such firm
experts in accounting and auditing.
AVAILABLE INFORMATION
We have filed a registration statement ("Registration Statement") with
the Commission under the Securities Act of the 1933 Act relating to the
Contracts offered by this Prospectus. This Prospectus has been filed as a part
of the Registration Statement and does not contain all of the information set
forth in the Registration Statement and exhibits thereto, and reference is
hereby made to the Registration Statement and exhibits for further information
relating to us and the Contracts. Statements contained in this Prospectus, as to
the content of the Contracts and other legal instruments are summaries. For a
complete statement of the terms thereof, reference is made to the instruments as
filed as exhibits to the Registration Statement. The Registration Statement and
its exhibits may be inspected and copied at the offices of the Commission,
located at 450 Fifth Street, N.W., Washington, D.C.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
A Statement of Additional Information is available upon request which
contains more details concerning the subjects discussed in this Prospectus. The
following is the Table of Contents for that Statement:
TABLE OF CONTENTS
Page
THE CONTRACT...............................................
3
ADDITIONAL DEFINITIONS.....................................
3
NET INVESTMENT FACTOR......................................
4
GENERAL PROVISIONS.........................................
4
CALCULATION OF PERFORMANCE DATA............................
6
TERMINATION OF DOLLAR COST AVERAGING.......................
8
FEDERAL TAX MATTERS........................................
9
DISTRIBUTION OF THE CONTRACTS..............................
10
SAFEKEEPING OF ACCOUNT ASSETS..............................
11
TRANSAMERICA...............................................
11
STATE REGULATION...........................................
11
RECORDS AND REPORTS........................................
11
FINANCIAL STATEMENTS.......................................
11
Distinct Assets from Transamericasm, a Variable Annuity issued by Transamerica
Life Insurance Company of New York, Policy form FTCG-101-193.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for the
DISTINCT ASSEST from TRANSAMERICAsm
A VARIABLE ANNUITY
Issued by
Transamerica Life
Insurance Company of New York
100 Manhattanville Road
Purchase, New York 10577
(914) 701-6000
This Statement of Additional Information expands upon subjects
discussed in the current Prospectus for the deferred variable annuity contract
("Contract") offered by Transamerica Life Insurance Company of New York
(formerly called First Transamerica Life Insurance Company) ("Transamerica") and
its Separate Account VA-5NLNY ("Variable Account"). You may obtain a copy of the
Prospectus dated May 1, 1998, as supplemented from time to time, by writing to
the Service Center, at 800-258-4261 or P.O. Box 31728, Charlotte, North Carolina
28231-1728. Terms used in the current Prospectus for the Contract are
incorporated in this Statement.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A
PROSPECTUS AND SHOULD BE READ ONLY
IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACT.
Dated May 1, 1998
<PAGE>
TABLE OF CONTENTS
Page
THE CONTRACT............................. 3
ADDITIONAL DEFINITIONS................... 3
NET INVESTMENT FACTOR.................... 4
GENERAL PROVISIONS....................... 4
CALCULATION OF PERFORMANCE DATA.......... 6
TERMINATION OF DOLLAR COST AVERAGING..... 8
FEDERAL TAX MATTERS...................... 9
DISTRIBUTION OF THE CONTRACTS............ 10
SAFEKEEPING OF ACCOUNT ASSETS............ 11
TRANSAMERICA............................. 11
STATE REGULATION......................... 11
RECORDS AND REPORTS...................... 11
FINANCIAL STATEMENTS..................... 11
(Additional page references refer to the current
Prospectus.)
<PAGE>
THE CONTRACT
As a supplement to the description in the Prospectus, the following
provides additional information about the Contract which may be of interest to
you.
The contract will be issued as a certificate under a group annuity
contract. The term "Contract: as used herein refers to a certificate issued
under the group contract. The group contract has been issued to a trust
organized under Missouri law. However, the sole purpose of the trust is to hold
the Contract. You, the Owner, have all rights and benefits under the Contract.
ADDITIONAL DEFINITIONS
Account: The account established and maintained for you under the
Contract to which your Net Purchase
Payments are credited.
Account Value: The Account Value is equal to: (a) Net Purchase
Payments; plus or minus (b) any
increase or decrease in the value of the Sub-Accounts due to investments
results; less (c) charges; and
less (d) withdrawals from the Sub-Accounts.
Age: The applicable person's age nearest birthday.
Annuitant's Beneficiary: The person or persons named by you, the Owner, who may
receive the death benefits under the Contract if: (a) there is no named
Contingent Annuitant and the Annuitant dies before the Annuity Date; or (b) the
Annuitant dies after the Annuity Date under an Annuity Form containing a period
certain option.
Annuity Issue Date: The effective date of your Contract as shown on the
Contract.
Code: The U.S. Internal Revenue Code of 1986, as amended, and the
rules and regulations issued
thereunder.
Contingent Annuitant: The person who: (a) becomes the Annuitant if the Annuitant
dies before the Annuity Date; or (b) may receive benefits under the Contract if
the Annuitant dies after the Annuity Date under an Annuity Form containing a
contingent annuity option.
Contract Anniversary: The same month and day as the Annuity Issue Date in each
calendar year after the calendar year in which the Annuity Issue Date occurs.
Contract Year: A 12-month period from the Annuity Issue Date and ending with the
day before the Contract Anniversary and each twelve month period thereafter.
Owner's Beneficiary: The person who becomes the Owner of the Contract
is the Owner dies. If the
Contract has Joint Owners, the surviving Joint Owner will be the Owner's
Beneficiary.
Valuation Day: Any day the New York Stock Exchange is open for trading.
Valuation occurs currently as
of 4:00 p.m. ET each Valuation Day.
Valuation Period: The time interval between the closing of the New
York Stock Exchange on consecutive
Valuation Days.
Withdrawals: Refers to partial withdrawals, full surrenders, and
withdrawals under the Automatic Payout
Option that are paid in cash to you.
NET INVESTMENT FACTOR
For any Sub-Account of the Variable Account, the Net Investment Factor
for a Valuation Period, before the Annuity Date, is (a) divided by (b), minus
(c),
Where (a) is
The net asset value per share held in the Sub-Account, as of the end
of the Valuation Period,
plus or minus
The per-share amount of any dividend or capital gain distribution if
the "ex-dividend" date occurs in the Valuation Period,
plus or minus
A per-share charge or credit as of the end of the Valuation Period for
tax reserves for realized and unrealized capital gains, if any.
Where (b) is
The net asset value per-share held in the Sub-Account as of the end of
the last prior Valuation Period.
Where (c) is
The daily charge of 0.002319% (0.85% annually) for assuming the
mortality and expense risks under this Contract times the number of calendar
days in the current Valuation Period, plus
The daily Administrative Expense Charge (currently zero) times the
number of calendar days in the current Valuation Period. This charge will not
exceed 0.000411% (0.15% annually).
A Valuation Day is defined as any day that the New York Stock Exchange is open.
Example of Variable Accumulation Unit Value Calculations
Assume the net asset value per share of a Portfolio at he end of the
current Valuation Period is $20.15; at the end of the immediately preceding
Valuation Period was $20.10; the Valuation Period is one day; and no dividends
or distribution caused the Portfolio shares to go "ex-dividend" during the
current Valuation Period. $20.15 divided by $20.10 is 1.002488. Subtracting the
one day risk factor for the Mortality and Expense Risk Charge 0.002319% (the
daily equivalent of the current charge of 0.85% on an annual basis) gives a Net
Investment Factor of 1.002464810. If the value of the Variable Accumulation Unit
for the immediately preceding Valuation Period had been 15.500000, the value for
the current Valuation Period would be 15.538204555 (15.5 x 1.002464810).
GENERAL PROVISIONS
IRS Required Distributions
If you have a non-qualified Contract and any Owner dies before the
entire interest in the Contract is distributed, the remaining value generally
must be distributed to the designated Beneficiary so that the Contract qualifies
as an annuity under the Code. (See "Federal Tax Matters," page 9.)
Non-Participating
The Contract is non-Participating. No dividends are payable and the
Contract will not share in the profits or surplus earnings of Transamerica.
Misstatement of Age or Sex
If the age or sex of any measuring life has been misstated, the Annuity
Payments under the Contract will be whatever the Annuity Purchase Amount applied
on the Annuity Date would purchase on the basis of the correct age or sex of you
and/or the other measuring life. Any overpayments or underpayments by
Transamerica as a result of any such misstatement bay be respectively charged
against or credited to the Annuity Payment or Annuity Payments to be made after
the correction so as to adjust for such overpayment or underpayment.
Proof of Existence and Age
Before making any payment under the Contract, Transamerica may require
proof of the existence and/or proof of the age of you or any other measuring
life, or any other information Transamerica deems necessary in order to provide
benefits under the Contract.
Transamerica will not be liable for obligations which depend on
receiving information from or about a Payee or measuring life until such
information is received in a satisfactory form.
Assignment
No assignment of a Contract will be binding on Transamerica unless made
in writing and given to Transamerica at its Service Center. Transamerica is not
responsible for the adequacy of any assignment. Your rights and the interest of
any Annuitant or Beneficiary will be subject to the rights of any assignee of
record. Qualified Contracts are not transferable.
Annual Report
At least once each Contract Year prior to the Annuity Date, you will be
given a report of the current Account Value allocated to each Sub-Account. This
report will also include any other information required by law or regulation.
Incontestability
Each Contract is incontestable from the Annuity Issue Date.
Ownership
Only you will be entitled to the rights granted by the Contract or
allowed by Transamerica under the Contract. If you die, your rights belong to
your estate unless you have previously named an Owner's Beneficiary.
Entire Contract
Transamerica issues a Contract in consideration and acceptance of the
application and making of the Initial Purchase Payment. All statements made by
or for you and the Annuitant in the application are considered representations
and not warranties. Transamerica will not use any statement in defense of a
claim unless it is made in the application and a copy of the application is
attached to the Contract when issued.
Changes in the Contract
Only two authorized officers of Transamerica, acting together, have the
authority to bind Transamerica or to make any changes in the Contract and then
only in writing. Transamerica will not be bound by any promise or representation
made by any other persons.
Transamerica may not change or amend the Contract, except as expressly
provided in the Contract without your consent. However, Transamerica may change
or amend the Contract if such change or amendment is necessary for the Contract
to comply with any state or federal law, rule or regulation.
Protection of Benefits
To the extent permitted by law, no benefit under the Contract will be
subject to any claim or process of law by any creditor.
Delay of Payments
Payment of any amounts due from the Variable Account generally will
occur within seven days from the date an acceptable Written Request, including
all completed forms Transamerica requires, is received at the Service Center,
except that Transamerica is permitted to postpone such payment if: (1) the New
York Stock Exchange is closed for reasons other than usual weekends or holidays,
or trading on the Exchange is otherwise restricted; or (2) an emergency exists
as defined by the Securities and Exchange Commission ("Commission") or the
Commission requires that trading be restricted; or (3) the Commission permits a
delay for your protection.
Notices and Directions
We will not be bound by any authorization, direction,. election or
notice which is not made in a manner and form acceptable to us and, if required
to be in writing, not received at our Service Office.
Any Written Notice requirement by us to you will be satisfied by our
mailing of any such required Written Notice, by first-class mail to your last
known address as shown on our records.
CALCULATION OF PERFORMANCE DATA
Money Market Sub-Account Yield Calculation
In accordance with regulations adopted by the Securities and Exchange
Commission, Transamerica is required to compute the Money Market Sub-Account's
current annualized yield for a seven-day period in a manner which does not take
into consideration any realized or unrealized gains or losses on shares of the
Money Market Portfolio or on its portfolio securities. This current annualized
yield is computed by determining the net change (exclusive of realized gains and
losses on the sale of securities and unrealized appreciation and depreciation)
in the value of a hypothetical account having a balance of one unit of the Money
Market Sub-Account at the beginning of such seven-day period, dividing such net
change in account value by the value of the account at the beginning of the
period to determine the base period return and annualizing this quotient on a
365-day basis. The net change in account value reflects the deductions for the
Mortality and Expense Risk Charge and Annual Contract Charge and income and
expenses accrued during the period. Because of these deductions, the yield for
the Money Market Sub-Account of the Variable Account will be lower than the
yield for the Money Market Portfolio or any comparable substitute funding
vehicle.
The Commission also permits Transamerica to disclose the effective
yield of the Money Market Sub-Account for the same seven-day period, determined
on a compounded basis. The effective yield is calculated by compounding the
unannualized base period return by adding one tot he base period return, raising
the sum to a power equal to 365 divided by 7, and subtracting one from the
result.
The yield on amounts held in the Money Market Sub-Account normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rated of
return. The Money Market Sub-Account's actual yield is affected by changes in
interest rates on money market securities, average portfolio maturity of the
Money Market Portfolio or substitute funding vehicle, the types and quality of
portfolio securities held by the Money Market Portfolio or substitute funding
vehicle, and operating expenses.
Other Sub-Account Yield Calculations
Transamerica may from time to time disclose the current annualized
yield of one or more of the Sub-Accounts (except the Money Market Sub-Account)
for 30-day periods. The annualized yield of a Sub-Account refers to the income
generated by the Sub-Account over a specified 30-day period. Because this yield
is annualized, the yield generated by a Sub-Account during the 30-day period is
assumed to be generated each 30-day period. The yield is computed by dividing
the period by the price per unit on the last day of the period, according to the
following formula:
YIELD - 2 [ {a-b +1}6 - 1]
---
cd
Where:
a = net investment income earned during the period by
the Portfolio attributable
to the shares owned by the Sub-Account.
b = expenses for the Sub-Account accrued for the period
(net of reimbursements).
c = the average daily number of Variable Accumulation
Units outstanding during the period.
d = the maximum offering price per Variable
Accumulation Unit on the last day of the period.
Net investment income will be determined in accordance with rules
established by the Commission. Accrued expenses will include all recurring fees
that are charged to all Contracts.
Because of the charges and deductions imposed by the Variable Account,
the yield for the Sub-Account will be lower than the yield for the corresponding
Portfolio. The yield on amounts held in the Sub-Accounts normally will fluctuate
over time. therefore, the disclosed yield for any given period is not an
indication or representation of future yields or rates of return. The
Sub-Account's actual yield will be affected by the type and quality of portfolio
securities held by the Portfolio and its operating expenses.
Standard Total Return Calculations
Transamerica may from time to time also disclose average annual total
returns for one of more of the Sub-Accounts for various periods of time. Average
annual total return quotations are computed by finding the average annual
compounded rates of return over one, five, and ten year periods that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P{1 + T}n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number or years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the one, five or
ten-year period at the end of the one, five or
ten-year period (or fractional portion thereof).
All recurring fees that are charged to all Contracts are recognized in
the ending redeemable value.
Other Performance Data
Transamerica may from time to time also disclose cumulative total
returns in conjunction with the standard format described above. the cumulative
returns will be calculated using the following formula.
CTR = {ERV/P} - 1
Where:
CTR = the cumulative total return net of Sub-Account
recurring charges for the
period.
ERV = ending redeemable value of a hypothetical $1,000
payment at the beginning of the one, five, or
ten-year period at the end of the one, five, or
ten-year period (or fractional portion thereof).
P = a hypothetical initial payment of $1,000.
Hypothetical Performance Data
Transamerica may also disclose "hypothetical" performance data for a
Sub-Account, for periods before the Sub-Account commenced operations. Such
performance information for the Sub-Account will be calculated based on the
performance of the corresponding Portfolio and the assumption that the
Sub-Account was in existence for the same periods as the Portfolio, with a level
of Contract charges currently n effect. The Portfolio used for these
calculations will be the actual Portfolio that the Sub-Account will invest in.
This type of hypothetical performance data may be disclosed on both an average
annual total return and a cumulative total return basis.
TERMINATION OF DOLLAR COST AVERAGING
We reserve the right to send written notification to you as to
the options available if termination of Dollar Cost Averaging, either by you or
by us, results in the value in the receiving Sub-Account(s) to which monthly
transfers were made to be less than $1,000. You will have 10 days from the date
our notice is mailed to:
(a) transfer the value of the Sub-Account(s) to
another Sub-Account with a
current value; or
(b) transfer funds from another Sub-Account (either
$1,000 or the entire value of the Sub-Account) into
the receiving Sub-Account(s) to bring the value of
that Sub-Account to at least $1,000; or
(c) submit an additional Purchase Payment (subject to the
$1,000 minimum) to make the value of the Sub-Account
equal to greater than $1,000; or
(d) transfer the entire value of the receiving
Sub-Account(s) back into the Sub-Account from which
the automatic transfers were made.
If no written election is made by you and received by us at
our Service Center prior to the end of the 10 day period, we reserve the right
to transfer the value of the receiving Sub-Account(s) back into the Sub-Account
from which the automatic transfers were made. Transfers made as a result of (a),
(b), or (d) above will not be counted for purposes of the ten allowable
transfers per Contract Year limitation.
FEDERAL TAX MATTERS
The Contract is designed for use by individuals in retirement
plans which may be qualified for special tax treatment under Section 408 of the
Internal Revenue Code of 1986, as amended (the "Code"). The ultimate effect of
federal income taxes on the Account Value, on Annuity Payments, and on the
economic benefit to you, the Annuitant or the Beneficiary may depend on the type
of retirement plan for which the Contract is purchases, on the tax and
employment status of the individual concerned and on Transamerica's tax status.
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. Any
person concerned about these tax implications should consult a competent tax
adviser. This discussion is based upon Transamerica's understanding of the
present federal income tax laws as they are currently interpreted by the
Internal Revenue Service. No representation is made as to the likelihood of
continuation of these present federal income tax laws or of the current
interpretations by the Internal Revenue Service. Moreover, no attempt has been
made to consider any applicable state of other tax laws.
Taxation of Transamerica
Transamerica is taxed as a life insurance company under Part I
of Subchapter L of the Code. Since he Variable Account is not an entity separate
from Transamerica, and its operations form a part of Transamerica, it will not
be taxed separately as a "regulated investment company" under Subchapter M of
the Code. Investment income and realized capital gains are automatically applied
to increase reserves under the Contract. Under existing federal income tax law,
Transamerica believes that the Variable Account investment income and realized
net capital gains will not be taxed to the extent that such income and gains are
applied to increase the reserves under the Contract.
Accordingly, Transamerica does not anticipate that it will
incur any federal income tax liability attributable to the Variable Account and,
therefore, Transamerica does not intend to make any provisions for any such
taxes. However, if changes in the federal tax laws or interpretations thereof
result in Transamerica being taxed on income or gains attributable tot he
Variable Account, then Transamerica may impose a charge against the Variable
Account (with respect to some or all Contracts) in order to set aside provisions
to pay such taxes.
Tax Status of the Contracts
Section 817(h) of the Code requires that with respect to
Non-Qualifies Contracts, the investment of the Portfolio be "adequately
diversified" in accordance with Treasury regulations in order for the Contracts
to qualify as annuity contracts under federal tax law. The Variable Account,
through the Portfolios, intends to comply with the diversification requirements
prescribed by the Treasury in Reg. Sec. 1.817-5, which affect how the
Portfolios' assets may be invested.
In certain circumstances, owners of variable annuity contracts
may be considered the owners, for federal income tax purposes, of the assets of
the separate account used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includible in the
variable annuity contract owner's gross income. Several years ago, the IRS
stated in published rulings that a variable contract owner will be considered
the owner of separate account assets if the contract owner possesses incidents
of ownership in those areas. More recently, the Treasury Department announced,
in connection with the issuance of regulations concerning investment
diversification, that those regulation "do not provide guidance concerning the
circumstances in which control of the investments of a segregated asset account
may cause the investor (i.e., the contract owner), rather than the insurance
company, to be treated s the owner of the assets in the account." This
announcement also states that guidance would be issued by way of regulations or
rulings on the "extent to which policyholders may direct their investment to
particular subaccounts without being treated as owners of the underlying
assets."
The ownership rights under the Contract are similar to, but
different in certain respects from, those described by the IRS in rulings in
which it was determined that contract owners were not owners of separate account
assets. For example, the owner of a Contract has the choice of more Sub-Accounts
in which to allocate net purchase payments and Contract Values, may be able to
transfer among Sub-Accounts more frequently, and the Sub-Accounts may have
narrower investment strategies, than in such rulings. These differences could
result in an Owner being treated as the owner of the assets of the Variable
Account. In addition, Transamerica does not know what standards will be set
forth, if any, in the regulations or rulings which the Treasury Department has
stated it expects to issue. Transamerica therefore reserves the right to modify
the Contract as necessary to attempt to prevent an Owner from being considered
the owner of a pro rata share of the assets of the Variable Account.
In order to be treated as an annuity contract for federal
income tax purposes, section 72(s) of the Code requires any Non-Qualified
Contract to provide that (a) if any Owner dies on or after the Annuity Date but
prior to the time the entire interest has been distributed, the remaining
portion of such interest will be distributed at least as rapidly as under the
method of distribution being used as of the date of that Owner's death; and (b)
if any Owner dies prior to the Annuity Date, the entire interest in the Contract
will be distributed within five years after the date of the Owner's death.
These requirements will be considered satisfied as to any
portion of your interest which is payable to or for the benefit of a "designated
beneficiary" and which is distributed over the life of such "designated
beneficiary" or over a period not extending beyond the life expectancy of that
Beneficiary, provided that such distributions begin within one year of your
death. Your "designated beneficiary" is a natural person designated by you as a
Beneficiary and to whom ownership of the Contract passes by reason of death.
However, if your "designated beneficiary" is your surviving spouse, the Contract
may be continued with the surviving spouse as the new owner.
The non-qualified Contracts contain provisions which are
designed to comply with the requirements of section 72(s) of the Code, although
no regulations interpreting these requirements have yet been issued.
Transamerica intends to review such provisions and modify them if necessary to
assure that they comply with the requirements of Code section 72(s) when
clarified by regulation or otherwise.
Other ruled may apply to the Qualified Contracts.
DISTRIBUTION OF THE CONTRACTS
Transamerica Securities Sales Corporation, located at 1150
South Olive Street, Los Angeles, California 90015, telephone (213) 741-7702, is
the principal underwriter and distributor of the Contracts. Transamerica
Securities Sales Corporation is registered with the Commission as a
broker/dealer and is a member of the National Association of Securities Dealers,
Inc. ("NASD"). Effective May 1, 1997, the Contracts are no longer being offered;
additional Purchase Payments may be made to Contracts purchased before May 1,
1997. No underwriting commissions have been paid to Charles Schwab & Co., Inc.,
the previous distributor, or to Transamerica Securities Sales Corporation since
commencement of sale of the Policies.
SAFEKEEPING OF ACCOUNT ASSETS
Title to the assets of the Variable Account is held by
Transamerica. The assets are kept separate and apart from Transamerica's general
account assets. Records are maintained of all purchases and redemptions of
Portfolio shares by each of the Sub-Accounts.
TRANSAMERICA
General Information and History
Transamerica is wholly-owned by Transamerica Occidental Life
Insurance Company, which is in turn an indirect subsidiary off Transamerica
Corporation. Transamerica corporation is a financial services organization which
engages through its subsidiaries in two primary businesses: finance and
insurance. Finance consists of consumer lending, commercial lending, leasing and
real estate services. In addition, Transamerica Corporation has retained a
minority ownership interest in its former property and casualty insurance
subsidiary.
STATE REGULATION
Transamerica is subject to the insurance laws and regulations
of all the states where it is licensed to operate. The availability of certain
Contract rights and provisions depends on state approval and/r filing and review
processes. Where required by state law or regulation, the Contract will be
modified accordingly.
RECORDS AND REPORTS
All records and accounts relating to the Variable Account will
be maintained by Transamerica or by our Service Center. As presently required by
the 1940 Act and regulations promulgated thereunder, which pertain to the
Variable Account, reports containing such information as may be required under
the 1940 Act or by other applicable law or regulation will be sent to you
semi-annually at your last known address of record.
FINANCIAL STATEMENTS
The financial statements of Transamerica should be considered
only as bearing on the ability of Transamerica to meet its obligations under the
Contracts. They should not be considered as bearing on the investment
performance of the assets held in the Variable Account.
This Statement of Additional Information contains the
financial statements for the Variable Account as of December 31,1997.
Distinct Assets from Transamericasm, a Variable Annuity issued by Transamerica
Life Insurance Company of New York, Policy form FTCG-101-193.
<PAGE>
Audited Financial Statements
Separate Account VA-5NLNY of
Transamerica Life Insurance Company
of New York
Year ended December 31, 1997
with Report of Independent Auditors
<PAGE>
Separate Account VA-5NLNY of Transamerica
Life Insurance Company of New York
Audited Financial Statements
Year ended December 31, 1997
Contents
Report of Independent Auditors.....................1
Statement of Assets and Liabilities................2
Statement of Operations............................4
Statement of Changes in Net Assets.................6
Notes to Financial Statements.....................10
<PAGE>
1
Report of Independent Auditors
Unitholders of Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Board of Directors, Transamerica Life Insurance Company of New York
We have audited the accompanying statement of assets and liabilities of Separate
Account VA-5NLNY of Transamerica Life Insurance Company of New York (comprised
of the Federated American Leaders Fund II, Federated Fund for U.S. Government
Securities II, INVESCO VIF-Industrial Income, INVESCO VIF-Total Return, INVESCO
VIF-High Yield, Janus Aspen Growth, Lexington Emerging Markets Fund, Schwab
Money Market, SteinRoe Capital Appreciation Fund, Strong Discovery Fund II,
American Century Balanced and American Century Growth Sub-Accounts) as of
December 31, 1997, and the related statement of operations for the year then
ended, and the statements of changes in net assets for each of the two years in
the period then ended. These financial statements are the responsibility of
Separate Account VA-5NLNY's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1997, by correspondence with
the fund managers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
sub-accounts comprising Separate Account VA-5NLNY of Transamerica Life Insurance
Company of New York as of December 31, 1997, and the results of their operations
for the year then ended, and the changes in their net assets for each of the two
years in the period then ended in conformity with generally accepted accounting
principles.
Charlotte, North Carolina
April 13, 1998
<PAGE>
2
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Statement of Assets and Liabilities
December 31, 1997
<TABLE>
<CAPTION>
Federated Federated INVESCO INVESCO
American Fund for U.S. VIF VIF
Leaders Government Industrial Total
Fund II Securities II Income Return
Sub-account Sub-account Sub-account Sub-account
----------------- ----------------- ---------------- ----------------
Assets:
<S> <C> <C> <C>
Investments, at fair value $ 1,027,822 $ 141,252 $ $
654,308 404,974
Due from Transamerica Life - - - -
----------------- ----------------- ---------------- ----------------
Total assets 1,027,822 141,252 654,308 404,974
Liabilities:
Due to Transamerica Life - 139 7 270
----------------- ----------------- ---------------- ----------------
Total liabilities - 139 7 270
----------------- ----------------- ---------------- ----------------
Net assets $ 1,027,822 $ 141,113 $ $ 404,704
654,301
================= ================= ================ ================
Accumulation units outstanding 48,673.920 11,585.656 32,941.580 24,250.762
================= ================= ================ ================
Net asset value and redemption price per unit $21.116486 $12.179971 $19.862484 $16.688272
================= ================= ================ ================
Other sub-account information:
Number of mutual fund shares 52,359.760 13,401.510 38,398.370 25,615.050
Net asset value per share $19.63 $10.54 $17.04 $15.81
Investment cost $ $ $ $
828,997 135,096 581,251 334,219
</TABLE>
<PAGE>
3
<TABLE>
<CAPTION>
INVESCO
VIF Janus Lexington Schwab SteinRoe Strong American American
High Aspen Emerging Money Capital Discovery Century Century
Yield Growth Markets Market Appreciation Fund II Balanced Growth
Sub-accoSub-account Sub-account Sub-account Sub-account Sub-account Sub-account Sub-account
- ------ --------------- ---------------- ---------------- ---------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 179$761 986,843 $ 244,562 $ 257,705 $ 470,328 $ 299,152 $ - $ 181,703
- - - - 9 15 - 12
- ------ --------------- ---------------- ----------------- --------------- ---------------- --------------- ---------------
179,761 986,843 244,562 257,705 470,337 299,167 - 181,715
63 300 282 131 11 - - -
- ------ --------------- ---------------- ----------------- --------------- ---------------- --------------- ---------------
63 300 282 131 11 - - -
- ------ --------------- ---------------- ----------------- --------------- ---------------- --------------- ---------------
$ 179$698 986,543 $ 244,280 $ 257,574 $ 470,326 $ 299,167 $ - $ 181,715
====== =============== ================ ================= =============== ================ =============== ===============
53,735.350 27,412.331 223,033.403 30,914.900 18,625.300 - 15,862.524
11,255.796
====== =============== ================ ================= =============== ================ =============== ===============
$15.9648$18.359290 $ 8.911326 $ 1.154879 $15.213550 $16.062387 $ - $11.455641
====== =============== ================ ================= =============== ================ =============== ===============
14,427.05053,400.570 27,448.060 257,705.320 26,129.310 24,867.120 - 18,770.990
$ 12.4$ 18.48 $ 8.91 $ $ 18.00 $ 12.03 $ 8.24 $
1.00 9.68
$ 1$1,871 855,706 $ 302,326 $ 257,705 $ 443,766 $ 274,610 $ - $ 191,609
</TABLE>
See accompanying notes.
<PAGE>
4
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Statement of Operations
Year ended December 31, 1997
<TABLE>
<CAPTION>
Federated Federated INVESCO INVESCO
American Fund for U.S. VIF VIF
Leaders Government Industrial Total
Fund II Securities II Income Return
Sub-account Sub-account Sub-account Sub-account
------------------- ------------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Investment income $ 36,615 $ 9,286 $ 51,690 $ 10,445
Expenses:
Mortality and expense risk charge 10,681 1,742 9,852 3,449
------------------- ------------------- ------------------ -----------------
Net investment income (loss) 25,934 7,544 41,838 6,996
Net realized and unrealized gain (loss) on investments:
Realized gain (loss) on investment 227,324 1,553 243,220 12,115
transactions
Unrealized appreciation (depreciation) of
investments 111,001 6,294 27,959 60,380
------------------- ------------------- ------------------ -----------------
Net gain (loss) on investments 338,325 7,847 271,179 72,495
------------------- ------------------- ------------------ -----------------
Increase in net assets resulting from $ 364,259 $ 15,391 $ 313,017 $ 79,491
operations
=================== =================== ================== =================
</TABLE>
<PAGE>
5
<TABLE>
<CAPTION>
INVESCO
VIF Janus Lexington Schwab SteinRoe Strong American American
High Aspen Emerging Money Capital Discovery Century Century
Yield Growth Markets Market Appreciation Fund II Balanced Growth
Sub-accounSub-account Sub-account Sub-account Sub-account Sub-account Sub-account Sub-account
- --------- ----------------- ---------------- ---------------- ---------------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$17,680 $ 43,363 $ 216 $ 44,904 $ 143,191 $ - $ - $ 10,567
3,436 10,699 4,143 7,649 5,814 4,616 - 3,731
- --------- ----------------- ---------------- ---------------- ---------------- ----------------- -------------- -----------------
14,244 32,664 (3,927) 37,255 137,377 (4,616) - 6,836
48,381 148,603 63,666 - (14,908) 23,110 - (37,016)
1,391 88,831 (58,795) - (46,915) 67,855 - 36,924
- --------- ----------------- ---------------- ---------------- ---------------- ----------------- -------------- -----------------
49,772 227,434 4,817 - (61,823) 90,965 - (92)
- --------- ----------------- ---------------- ---------------- ---------------- ----------------- -------------- -----------------
$ $ 270,098 $ 944 $ 37,255 $ 75,554 $ 86,349 $ - $ 6,744
64,016
========= ================= ================ ================ ================ ================= ============== =================
</TABLE>
See accompanying notes.
<PAGE>
6
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Statement of Changes in Net Assets
Year ended December 31, 1997
<TABLE>
<CAPTION>
Federated Federated INVESCO INVESCO
American Fund for U.S. VIF VIF
Leaders Government Industrial Total
Fund II Securities II Income Return
Sub-account Sub-account Sub-account Sub-account
----------------- ----------------- ----------------- --------------
Increase in net assets:
Operations:
<S> <C> <C> <C> <C>
Net investment income (loss) $ 25,934 $ 7,544 $ 41,838 $ 6,996
Realized gain (loss) on investment transactions 227,324 1,553 243,220 12,115
Unrealized appreciation (depreciation) of
investments 111,001 6,294 27,959 60,380
----------------- ----------------- ----------------- --------------
Increase in net assets resulting from operations 364,259 15,391 313,017 79,491
Changes from accumulation unit transactions (381,156) (10,728) (862,668) 60,555
----------------- ----------------- ----------------- --------------
Total (decrease) increase in net assets (16,897) 4,663 (549,651) 140,046
Net assets at beginning of year 1,044,719 136,450 1,203,952 264,658
----------------- ----------------- ----------------- --------------
Net assets at end of year $ 1,027,822 $ 141,113 $ 654,301 $ 404,704
================= ================= ================= ==============
</TABLE>
<PAGE>
7
<TABLE>
<CAPTION>
INVESCO
VIF Janus Lexington Schwab SteinRoe Strong American American
High Aspen Emerging Money Capital Discovery Century Century
Yield Growth Markets Market Appreciation Fund II Balanced Growth
Sub-accouSub-account Sub-account Sub-account Sub-account Sub-account Sub-account Sub-account
- -------- ---------------- ---------------- --------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
$14,244$ 32,664 $ (3,927) $ 37,255 $137,377 $ (4,616) $ - $ 6,836
48,381 148,603 63,666 - (14,908) 22,110 - (37,016)
1,391 88,831 (58,795) - (46,915) 67,855 - 36,924
- -------- ---------------- ---------------- --------------- ----------------- ----------------- ----------------- -----------------
64,016 270,098 944 37,255 75,554 86,349 - 6,744
(469,338)(264,164) (238,293) (893,713) (507,697) (406,320) - (322,326)
- -------- ---------------- ---------------- --------------- ----------------- ----------------- ----------------- -----------------
(405,322) 5,934 (237,349) (856,458) (432,143) (319,971) - (315,582)
585,020 980,609 481,629 1,114,032 902,469 619,138 - 497,297
- -------- ---------------- ---------------- --------------- ----------------- ----------------- ----------------- -----------------
$179,69$ 986,543 $ 244,280 $ 257,574 $470,326 $299,167 $ - $ 181,715
======== ================ ================ =============== ================= ================= ================= =================
</TABLE>
See accompanying notes.
<PAGE>
8
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Statement of Changes in Net Assets (continued)
Year ended December 31, 1996
<TABLE>
<CAPTION>
Federated Federated INVESCO INVESCO
American Fund for U.S. VIF VIF
Leaders Government Industrial Total
Fund II Securities II Income Return
Sub-account Sub-account Sub-account Sub-account
----------------- ---------------- ------------------ ---------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C>
Net investment income (loss) $ 6,834 $ 3,299 $ 76,370 $ 6,347
Realized gain (loss) on investment transactions 16,253 (10) 20,943 6,216
Unrealized appreciation (depreciation) of 83,084 (1,148) 39,883 7,395
investments
----------------- ---------------- ------------------ ---------------
Increase (decrease) in net assets resulting from 106,171 2,141 137,196 19,958
operations
Changes from accumulation unit transactions 793,325 93,146 808,596 180,553
----------------- ---------------- ------------------ ---------------
Total increase (decrease) in net assets 899,496 95,287 945,792 200,511
Net assets at beginning of year 145,223 41,163 258,160 64,147
----------------- ---------------- ------------------ ---------------
Net assets at end of year $ 1,044,719 $ 136,450 $ 1,203,952 $ 264,658
================= ================ ================== ===============
</TABLE>
<PAGE>
17
<TABLE>
<CAPTION>
INVESCO
VIF Janus Lexington Schwab SteinRoe Strong American American
High Aspen Emerging Money Capital Discovery Century Century
Yield Growth Markets Market Appreciation Fund II Balanced Growth
Sub-acSub-account Sub-account Sub-account Sub-account Sub-account Sub-account Sub-account
- ----- --------------- ---------------- --------------- ------------------ ---------------- ---------------- ----------------
<S><C> <C> <C> <C> <C> <C> <C>
$ $6,76113,200 $ (3,858) $ 41,371 $ (3,970) $ 113,918 $ 84 $ 54,159
15,26135,277 6,082 - 8,656 (56,578) 400 (21,541)
(2,54633,339 8,698 - 66,061 (58,304) (241) (53,367)
- ----- --------------- ---------------- --------------- ------------------ ---------------- ----------------- ---------------
59,47681,816 10,922 41,371 70,747 (964) 243 20,749
387,31677,129 185,043 (82,309) 740,562 244,684 (2,319) 81,111
- ----- --------------- ---------------- --------------- ------------------ ---------------- ----------------- ---------------
446,78758,945 195,965 (40,938) 811,309 243,720 (2,076) 60,362
138,23221,664 285,664 1,154,970 91,160 375,418 2,076 436,935
- ----- --------------- ---------------- --------------- ------------------ ---------------- ----------------- ---------------
$ 5$5,02980,609 $ 481,629 $ 1,114,032 $ 902,469 $ 619,138 $ - $ 497,297
===== =============== ================ =============== ================== ================ ================= ===============
</TABLE>
See accompanying notes.
<PAGE>
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Notes to Financial Statements
December 31, 1997
1. Organization
Separate Account VA-5NLNY of Transamerica Life Insurance Company of New York
("Separate Account") was established by Transamerica Life Insurance Company of
New York ("Transamerica Life") as a separate account under the laws of the State
of New York on September 28, 1993. The Separate Account is registered with the
Securities and Exchange Commission (the Commission) under the Investment Company
Act of 1940 as a unit investment trust and is designed to provide annuity
benefits pursuant to deferred annuity contracts ("Contract") issued by
Transamerica Life. The Separate Account commenced operations when initial
deposits were received on December 19, 1994.
In accordance with the terms of the Contract, all payments allocated to the
Separate Account by contract owners must be allocated to purchase units of any
or all of the Separate Account's eleven sub-accounts, each of which invests
exclusively in a specific corresponding mutual fund portfolio. The mutual fund
portfolios are: Federated American Leaders Fund II, Federated Fund for U.S.
Government Securities II, INVESCO VIF-High Yield Portfolio, INVESCO
VIF-Industrial Income Portfolio, INVESCO VIF-Total Return Portfolio, Janus Aspen
Growth Portfolio, Lexington Emerging Markets Fund, Schwab Money Market
Portfolio, SteinRoe Capital Appreciation Fund, Strong Discovery Fund II, and
American Century Growth Portfolio (together "the Funds"). The Funds are
open-end, diversified investment companies registered under the Investment
Company Act of 1940.
2. Significant Accounting Policies
The accompanying financial statements of the Separate Account have been prepared
in accordance with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions that
affect amounts reported in the financial statements and accompanying notes. Such
estimates and assumptions could change in the future as more information becomes
known which could impact the amounts reported and disclosed herein. The
accounting principles followed and the methods of applying those principles are
presented below:
<PAGE>
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Notes to Financial Statements (continued)
2. Significant Accounting Policies (continued)
Investment Valuation--Investments in the Funds' shares are carried at fair (net
asset) value. Realized investment gains or losses on investments are determined
on a specific identification basis which approximates average cost. Investment
transactions are accounted for on the date the order to buy or sell is executed
(trade date).
Investment Income--Investment income consists of dividend income (both ordinary
and capital gains) and is recognized on the ex-dividend date. All distributions
received are reinvested in the respective sub-accounts.
Federal Income Taxes--Operations of the Separate Account are part of, and will
be taxed with, those of Transamerica Life, which is taxed as a "life insurance
company" under the Internal Revenue Code. Under current federal income tax law,
income from assets maintained in the Separate Account for the exclusive benefit
of participants are generally not subject to federal income tax.
3. Expenses and Charges
Mortality and expense risk charges are deducted by Transamerica Life from each
sub-account of the Separate Account on a daily basis which is equal, on an
annual basis, to 0.85% of the daily net asset value of the sub-account. This
amount can never increase and is paid to Transamerica Life. No administrative
expense charge is currently deducted from each sub-account but Transamerica Life
may deduct such a charge not to exceed a maximum effective annual rate of .15%
of the daily net asset value of the sub-account.
The following charges are deducted from a contract holder's account by
Transamerica Life and not directly from the Separate Account. An annual contract
charge of $25 (or 2% of the account value, if less) is deducted at the end of
each contract year. Additionally, there is a $10 (or 2% of the transfer amount,
if less) fee for each transfer in excess of 10 in any contract year.
<PAGE>
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Notes to Financial Statements (continued)
4. Remuneration
The Separate Account pays no remuneration to directors, advisory boards or
officers or such other persons who may from time to time perform services for
the Separate Account.
5. Accumulation Units
The changes in accumulation units and amounts are as follows:
<TABLE>
<CAPTION>
Federated Federated INVESCO INVESCO
American Fund for U.S. VIF VIF
Leaders Government Industrial Total
Fund II Securities II Income Return
Sub-account Sub-account Sub-account Sub-account
-------------------- -------------------- -------------------- --------------------
Year ended December 31, 1997
Accumulation Units:
<S> <C> <C> <C>
Units sold 5,655.947 - 2,515.263 852.094
Units redeemed (43,948.193) (11,476.780) (57,983.064) (3,974.580)
Units transferred 22,045.675 11,000.043 11,376.363 8,044.635
-------------------- -------------------- -------------------- --------------------
Net increase (decrease) (16,246.571) (476.737) (44,091.438) 4,922.150
==================== ==================== ==================== ====================
INVESCO
VIF Janus Lexington Schwab
High Aspen Emerging Money
Yield Growth Markets Market
Sub-account Sub-account Sub-account Sub-account
-------------------- -------------------- -------------------- --------------------
Accumulation Units:
Units sold 335.037 5,906.689 478.668 1,149,409.034
Units redeemed (30,704.916) (41,410.238) (31,595.067) (791,275.760)
Units transferred (1,007.117) 24,229.866 11,128.755 (1,140,627.770)
-------------------- -------------------- -------------------- --------------------
Net (decrease) (31,376.996) (11,273.683) (19,987.644) (782,494.496)
==================== ==================== ==================== ====================
</TABLE>
<PAGE>
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
5. Accumulation Units (continued)
SteinRoe Strong American American
Capital Discovery Century Century
Appreciation Fund II Balanced Growth
Sub-account Sub-account Sub-account Sub-account
-------------------- -------------------- ------------------- ---------------------
Accumulation Units:
<S> <C> <C> <C>
Units sold 1,251.103 1,213.269 - 930.391
Units redeemed (29,585.379) (24,220.117) - (28,685.863)
Units transferred (4,164.092) (941.769) - 1,975.838
-------------------- -------------------- -------------------- --------------------
Net increase (decrease) (32,498.368) (23,948.617) - (25,779.634)
==================== ==================== ==================== ====================
Federated Federated INVESCO INVESCO
American Fund for U.S. VIF VIF
Leaders Government Industrial Total
Fund II Securities II Income Return
Sub-account Sub-account Sub-account Sub-account
-------------------- -------------------- -------------------- --------------------
Year ended December 31, 1997 Amounts:
Sales $ 105,908 $ - $ 42,906 $ 12,350
Redemptions (883,197) (135,445) (1,099,473) (62,151)
Transfers 396,133 124,717 193,899 110,356
-------------------- -------------------- -------------------- --------------------
Net increase (decrease) $ (381,156) $ (10,728) $ (862,668) $ 60,555
==================== ==================== ==================== ====================
INVESCO
VIF Janus Lexington Schwab
High Aspen Emerging Money
Yield Growth Markets Market
Sub-account Sub-account Sub-account Sub-account
-------------------- -------------------- -------------------- --------------------
Amounts:
Sales $ 5,000 $ 101,143 $ 5,375 $ 1,280,311
Redemptions (467,180) (742,052) (370,092) (897,842)
Transfers (7,158) 376,745 126,424 (1,276,182)
-------------------- -------------------- -------------------- --------------------
Net (decrease) $ (469,338) $ (264,164) $ (238,293) $ (893,713)
==================== ==================== ==================== ====================
</TABLE>
<PAGE>
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Notes to Financial Statements (continued)
5. Accumulation Units (continued)
<TABLE>
<CAPTION>
SteinRoe Strong American American
Capital Discovery Century Century
Appreciation Fund II Balanced Growth
Sub-account Sub-account Sub-account Sub-account
-------------------- -------------------- -------------------- --------------------
Amounts:
<S> <C> <C> <C> <C>
Sales $ 19,143 $ 17,615 $ - $ 10,620
Redemptions (465,494) (410,986) - (362,419)
Transfers (61,346) (12,949) - 29,473
-------------------- -------------------- -------------------- --------------------
Net (decrease) $ (507,697) $ (406,320) $ - $ (322,326)
==================== ==================== ==================== ====================
Federated Federated INVESCO INVESCO
American Fund for U.S. VIF VIF
Leaders Government Industrial Total
Fund II Securities II Income Return
Sub-account Sub-account Sub-account Sub-account
-------------------- -------------------- -------------------- --------------------
Year ended December 31, 1996
Accumulation Units:
Units sold 6,042.706 1,169.464 7,644.653 1,746.951
Units redeemed (745.404) (1.722) (1,270.459) (15.226)
Units transferred 48,744.814 7,134.243 50,632.708 12,385.894
-------------------- -------------------- -------------------- --------------------
Net increase 54,042.116 8,301.985 57,006.902 14,117.619
==================== ==================== ==================== ====================
INVESCO
VIF Janus Lexington Schwab
High Aspen Emerging Money
Yield Growth Markets Market
Sub-account Sub-account Sub-account Sub-account
-------------------- -------------------- -------------------- --------------------
Accumulation Units:
Units sold 16,296.669 8,169.079 3,447.003 3,567,814.007
Units redeemed (474.101) (1,218.016) (1,008.470) (404,068.451)
Units transferred 15,164.790 40,798.876 15,006.294 (3,243,443.553)
-------------------- -------------------- -------------------- --------------------
Net increase (decrease) 30,987.358 47,749.939 17,444.827 (79,697.997)
==================== ==================== ==================== ====================
</TABLE>
<PAGE>
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Notes to Financial Statements (continued)
5. Accumulation Units (continued)
<TABLE>
<CAPTION>
SteinRoe Strong American American
Capital Discovery Century Century
Appreciation Fund II Balanced Growth
Sub-account Sub-account Sub-account Sub-account
-------------------- -------------------- ------------------- ---------------------
Accumulation Units:
<S> <C> <C> <C> <C>
Units sold 8,017.075 2,420.802 2.046 3,710.627
Units redeemed (1,167.273) (1,037.366) - (23.014)
Units transferred 48,501.159 15,388.160 (178.514) 3,285.280
-------------------- -------------------- -------------------- --------------------
Net increase (decrease) 55,350.961 16,771.596 (176.468) 6,972.893
==================== ==================== ==================== ====================
Federated Federated INVESCO INVESCO
American Fund for U.S. VIF VIF
Leaders Government Industrial Total
Fund II Securities II Income Return
Sub-account Sub-account Sub-account Sub-account
-------------------- -------------------- -------------------- --------------------
Year ended December 31, 1996 Amounts:
Sales $ 89,358 $ 12,861 $ 108,616 $ 22,653
Redemptions (11,506) (18) (18,931) (199)
Transfers 715,473 80,303 718,911 158,099
-------------------- -------------------- -------------------- --------------------
Net increase $ 793,325 $ 93,146 $ 808,596 $ 180,553
==================== ==================== ==================== ====================
INVESCO
VIF Janus Lexington Schwab
High Aspen Emerging Money
Yield Growth Markets Market
Sub-account Sub-account Sub-account Sub-account
-------------------- -------------------- -------------------- --------------------
Amounts:
Sales $ 190,932 $ 116,291 $ 36,832 $ 3,877,975
Redemptions (6,276) (18,154) (10,350) (441,699)
Transfers 202,656 578,992 158,561 (3,518,585)
-------------------- -------------------- -------------------- --------------------
Net increase (decrease) $ 387,312 $ 677,129 $ 185,043 $ (82,309)
==================== ==================== ==================== ====================
</TABLE>
<PAGE>
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Notes to Financial Statements (continued)
5. Accumulation Units (continued)
<TABLE>
<CAPTION>
SteinRoe Strong American American
Capital Discovery Century Century
Appreciation Fund II Balanced Growth
Sub-account Sub-account Sub-account Sub-account
------------------ ----------------- -------------------- -------------------
Amounts:
<S> <C> <C> <C> <C>
Sales $110,705 $ 33,836 $ 24 $ 45,167
Redemptions (16,417) (14,576) (5) (286)
Transfers 646,274 225,424 (2,338) 36,230
------------------ ----------------- -------------------- -------------------
Net increase (decrease) $740,562 $ 244,684 $ (2,319) $ 81,111
================== ================= ==================== ===================
6. Investment Transactions
The aggregate cost of purchases and the aggregate proceeds from the sales of
investments for the year ended December 31, 1997 were:
Federated Federated INVESCO INVESCO
American Fund for U.S. VIF VIF
Leaders Government Industrial Total
Fund II Securities II Income Return
Sub-account Sub-account Sub-account Sub-account
------------------ ------------------ ------------------- ------------------
Aggregate purchases $604,180 $153,177 $ 522,177 $161,119
================== ================== =================== ==================
Aggregate proceeds from sales $959,555 $156,227 $ 1,260,708 $ 85,417
================== ================== =================== ==================
INVESCO
VIF Janus Lexington Schwab
High Aspen Emerging Money
Yield Growth Markets Market
Sub-account Sub-account Sub-account Sub-account
------------------ ------------------ ------------------- ------------------
Aggregate purchases $219,586 $648,523 $273,533 $ 2,197,413
================== ================== =================== ==================
Aggregate proceeds from sales $624,990 $879,691 $515,530 $ 3,038,094
================== ================== =================== ==================
<PAGE>
Separate Account VA-5NLNY of
Transamerica Life Insurance Company of New York
Notes to Financial Statements (continued)
6. Investment Transactions (continued)
SteinRoe Strong American American
Capital Discovery Century Century
Appreciation Fund II Balanced Growth
Sub-account Sub-account Sub-account Sub-account
------------------ ------------------ ------------------- ------------------
Aggregate purchases $ 380,486 $ 89,085 $ - $ 258,886
================== ================== =================== ==================
Aggregate proceeds from sales $ 750,962 $ 500,096 $ - $ 574,526
================== ================== =================== ==================
</TABLE>
<PAGE>
Audited Financial Statements
Transamerica Life
Insurance Company of New York
December 31, 1997
<PAGE>
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
Audited Financial Statements
December 31, 1997
Report of Independent Auditors....................... 1
Balance Sheet........................................ 2
Statement of Income.................................. 3
Statement of Shareholder's Equity.................... 4
Statement of Cash Flows.............................. 5
Notes to Financial Statements........................ 6
<PAGE>
1
3324/Folder T
REPORT OF INDEPENDENT AUDITORS
Transamerica Corporation
and
Board of Directors
Transamerica Life Insurance Company of New York
We have audited the accompanying balance sheet of Transamerica Life Insurance
Company of New York as of December 31, 1997 and 1996, and the related statements
of income, shareholder's equity, and cash flows for each of the three years in
the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Transamerica Life Insurance
Company of New York at December 31, 1997 and 1996, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.
January 23, 1998
<PAGE>
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
9
2
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEET
<TABLE>
<CAPTION>
December 31
1997 1996
--------------------- --------------
(In thousands, except
for share data)
ASSETS
Investments:
<S> <C> <C>
Fixed maturities available for sale $ 489,053 $ 464,153
Investment real estate 343 353
Policy loans 13,595 11,973
--------------------- ---------------------
502,991 476,479
Cash 3,029 9,079
Accrued investment income 9,245 8,840
Accounts receivable 3,419 3,214
Reinsurance recoverable on paid and unpaid losses 10,204 12,241
Deferred policy acquisitions costs 52,181 56,632
Other assets 5,364 7,047
Separate account assets 308,590 195,363
--------------------- ---------------------
$ 895,023 $ 768,895
===================== =====================
LIABILITIES AND SHAREHOLDER'S EQUITY
Policy liabilities:
Policyholder contract deposits $ 483,477 $ 482,561
Reserves for future policy benefits 10,449 10,264
Policy claims and other 1,810 3,890
--------------------- ---------------------
495,736 496,715
Income tax liabilities 8,008 3,849
Accounts payable and other liabilities 7,418 6,994
Separate account liabilities 308,590 195,363
--------------------- ---------------------
819,752 702,921
Shareholder's equity:
Common Stock ($1,000 par value):
Authorized--2,000 shares
Issued and outstanding--2,000 shares 2,000 2,000
Additional paid-in capital 52,320 52,320
Retained earnings 13,224 9,397
Net unrealized investment gains 7,727 2,257
--------------------- ---------------------
75,271 65,974
--------------------- ---------------------
$ 895,023 $ 768,895
===================== =====================
See notes to financial statements.
<PAGE>
STATEMENT OF INCOME
Year Ended December 31
1997 1996 1995
--------------- --------------- ----------
(In thousands)
Revenues:
Premiums and other considerations $ 17,833 $ 15,624 $ 13,495
Net investment income 37,068 34,834 30,897
Net realized investment gains 6 99 19
--------------- --------------- ---------------
TOTAL REVENUES 54,907 50,557 44,411
Benefits:
Benefits paid or provided 37,680 34,455 31,984
Increase (decrease) in policy reserves and liabilities (424) (711) 316
---------------- --------------- ---------------
37,256 33,744 32,300
Expenses:
Amortization of deferred policy acquisition costs 3,974 3,002 2,197
Salaries and salary related expenses 3,486 3,518 3,206
Other expenses 4,789 3,789 3,219
--------------- --------------- ---------------
12,249 10,309 8,622
--------------- --------------- ---------------
TOTAL BENEFITS AND EXPENSES 49,505 44,053 40,922
--------------- --------------- ---------------
INCOME BEFORE INCOME TAXES 5,402 6,504 3,489
Provision for income taxes 1,575 2,175 1,331
--------------- --------------- ---------------
NET INCOME $ 3,827 $ 4,329 $ 2,158
=============== =============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENT OF SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
Net
Unrealized
Additional Investment
Common Stock Paid-in Retained Gains
Shares Amount Capital Earnings (Losses)
(In thousands, except for share data)
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1995 2,000 $ 2,000 $ 47,320 $ 2,910 $ (3,912)
Net income 2,158
Capital contributions from parent 5,000
Change in net unrealized
investment gains (losses) 10,793
Balance at December 31, 1995 2,000 2,000 52,320 5,068 6,881
Net income 4,329
Change in net unrealized
investment gains (losses) (4,624)
------------ ------------ ------------ ----------- --------------
2,000 2,000 52,320 9,397 2,257
Balance at December 31, 1996
Net income 3,827
Change in net unrealized
investment gains (losses) 5,470
------------ ------------ ------------ ----------- --------------
Balance at December 31, 1997 2,000 $ 2,000 $ 52,320 $ 13,224 $ 7,727
============ ============ ============ =========== ==============
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31
1997 1996 1995
--------------- --------------- ----------
(In thousands)
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income $ 3,827 $ 4,329 $ 2,158
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Changes in:
Reinsurance recoverable and accounts
receivable 1,832 223 2,498
Accrued investment income (405) (1,329) (1,351)
Policy liabilities (1,893) 7,850 11,693
Other assets, accounts payable and other
liabilities, and income taxes 3,525 (4,130) 786
Policy acquisition costs deferred (13,256) (12,288) (12,126)
Amortization of deferred policy acquisition costs 3,974 3,002 2,197
Net realized gains on investment transactions (6) (99) (19)
Other (43) 1,179 (698)
---------------- --------------- ---------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (2,445) (1,263) 5,138
INVESTMENT ACTIVITIES
Purchases of securities and other investments (92,398) (92,243) (79,260)
Sales of investments 84,805 39,469 28,738
Maturities of securities 3,668 2,500 2,000
Other (596) (75) (77)
---------------- --------------- ---------------
NET CASH USED
BY INVESTING ACTIVITIES (4,521) (50,349) (48,599)
FINANCING ACTIVITIES
Additions to policyholder contract deposits 40,978 75,283 65,019
Withdrawals from policyholder contract deposits (40,062) (30,849) (26,078)
Capital contributions from parent - - 5,000
--------------- --------------- ---------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 916 44,434 43,941
--------------- --------------- ---------------
(DECREASE) INCREASE IN CASH (6,050) (7,178) 480
Cash at beginning of year 9,079 16,257 15,777
--------------- --------------- ---------------
CASH AT END OF YEAR $ 3,029 $ 9,079 $ 16,257
=============== =============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
Business: Transamerica Life Insurance Company of New York (the "Company") is
domiciled in New York. The Company
is a wholly owned subsidiary of Transamerica Occidental Life Insurance Company
("TOLIC"), which is an indirect
subsidiary of Transamerica Corporation. Prior to 1997, the Company was named
First Transamerica Life Insurance
Company.
The Company engages primarily in providing life insurance, annuity products, and
structured settlements. The Company's customers are primarily in the state of
New York.
Basis of Presentation: The accompanying financial statements have been prepared
in accordance with generally accepted accounting principles which differ from
statutory accounting practices prescribed or permitted by regulatory
authorities.
Reclassifications: Certain reclassifications of prior year amounts have been
made to conform to the 1997
presentation.
Use of Estimates: Certain amounts reported in the accompanying financial
statements are based on the management's best estimates and judgment. Actual
results could differ from those estimates.
New Accounting Standards: In June of 1997, the Financial Accounting Standards
Board issued a new standard on reporting comprehensive income, which establishes
standards for reporting and displaying comprehensive income and its components
in the financial statements. This standard is effective for interim and annual
periods beginning after December 15, 1997. Reclassification of financial
statements for all periods presented will be required upon adoption. Application
of this statement will not change recognition or measurement of net income and,
therefore, will not impact the Company's results of operations or financial
position.
In 1997, the Company adopted the Financial Accounting Standards Board's new
standard on accounting for transfers of financial assets, servicing of financial
assets and extinguishment of liabilities. The standard requires that a transfer
of financial assets be accounted for as a sale only if certain specified
conditions for surrender of control over the transferred assets exist. There was
no material effect on the financial position or results of operations of the
Company.
In 1996, the Company adopted the Financial Accounting Standards Board's new
standard on accounting for the impairment of long-lived assets and for
long-lived assets to be disposed of. The standard requires that an impaired
long-lived asset be measured based on the fair value of the asset to be held and
used or the fair value less cost to sell of the asset to be disposed of. There
was no material effect on the financial position or results of operations of the
Company.
Investments: Investments are reported on the following bases:
Fixed maturities--All debt securities are classified as available for sale
and carried at fair value. The Company does not carry any debt securities
principally for the purpose of trading. Prepayments are considered in
establishing amortization periods for premiums and discounts and amortized
cost is further adjusted for other-than-temporary fair value declines.
Investment real estate--at cost, less allowance for depreciation and
possible impairment.
Policy loans--at unpaid balances.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1997
NOTE A--SIGNIFICANT ACCOUNTING POLICIES (Continued)
Realized gains and losses on disposal of investments are determined on a
specific identification basis. Changes in fair values of fixed maturities
available for sale are included in net unrealized investment gains or losses
after adjustment of deferred policy acquisition costs and deferred income taxes
as a separate component of shareholder's equity and, accordingly, have no effect
on net income.
Deferred Policy Acquisition Costs (DPAC): Certain costs of acquiring new and
renewal insurance contracts, principally commissions, medical examination and
inspection report fees, and certain variable sales, underwriting and issue
expenses, all of which vary with and are primarily related to the production of
such business, have been deferred. DPAC for non-traditional life and
investment-type products are amortized over the life of the related policies
generally in relation to estimated future gross profits. DPAC for traditional
life insurance products are amortized over the premium-paying period of the
related policies in proportion to premium revenue recognized, using principally
the same assumptions used for computing future policy benefit reserves. DPAC
related to non-traditional and investment-type products is adjusted as if
unrealized gains or losses on securities available for sale were realized.
Changes in such adjustments are included in net unrealized investment gains or
losses on an after tax basis as a separate component of shareholder's equity
and, accordingly, have no effect on net income.
Separate Accounts: The Company administers segregated asset accounts for
variable annuity contracts. The assets held in these Separate Accounts are
invested in various mutual fund portfolios managed by third party companies. The
Separate Account assets are stated at fair value and are not subject to
liabilities arising out of any other business the Company may conduct.
Investment risks associated with fair value changes are borne by the contract
holders. Accordingly, investment income and realized gains and losses
attributable to Separate Accounts are not reported in the Company's results of
operations.
Policyholder Contract Deposits: Non-traditional life insurance products include
universal life and other interest-sensitive life insurance policies.
Investment-type products include single and flexible premium deferred annuities
and single premium immediate annuities. Policyholder contract deposits on
universal life and investment products represent premiums received plus
accumulated interest, less mortality charges on universal life products and
other administration charges as applicable under the contract. Interest credited
to these policies ranged from 5.0% to 7.15% in 1997 and from 5.2% to 7.2% in
1996 and from 5.5% to 7.8% in 1995.
Reserves for Future Policy Benefits: Traditional life insurance products
primarily include those contracts with fixed and guaranteed premiums and
benefits and consist principally of whole life and term insurance policies,
limited-payment life insurance policies and certain annuities with life
contingencies. The reserve for future policy benefits for traditional life
insurance products has been provided on a net-level premium method based upon
estimated investment yields, withdrawals, mortality, and other assumptions which
were appropriate at the time the policies were issued. Such estimates are based
upon past experience with a margin for adverse deviation. The initial interest
assumptions range from 4.0% to 5.5%.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1997
NOTE A--SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recognition of Revenue and Costs: Traditional life insurance contract premiums
are recognized as revenue over the premium-paying period, with reserves for
future policy benefits established from such premiums.
Revenues for universal life and investment products consist of policy charges
for the cost of insurance, policy administration charges, amortization of policy
initiation fees, and surrender charges assessed against policyholder account
balances during the period. Expenses related to these products consist of
interest credited to policyholder account balances and benefit claims incurred
in excess of policyholder account balances.
Claim reserves include provisions for reported claims and claims incurred but
not reported.
Reinsurance: Coinsurance premiums, commissions, expense reimbursements, and
reserves related to reinsured business are accounted for on bases consistent
with those used in accounting for the original policies and the terms of the
reinsurance contracts. Yearly renewable term reinsurance is accounted for the
same as direct business. Premiums ceded and recoverable losses have been
reported as a reduction of premium income and benefits, respectively. The ceded
amounts related to policy liabilities have been reported as an asset.
Income Taxes: The Company is included in the consolidated federal income tax
return of TOLIC which, with its domestic subsidiaries and affiliates, is
included in the consolidated federal income tax returns filed by Transamerica
Corporation, which by the terms of a tax sharing agreement generally requires
the Company to accrue and settle income tax obligations in amounts that would
result if the Company filed separate tax returns with federal taxing
authorities.
Deferred income taxes arise from temporary differences between the bases of
assets and liabilities for financial reporting purposes and income tax purposes,
based on enacted tax rates in effect for the years in which the temporary
differences are expected to reverse.
Fair Values of Financial Instruments: Fair values for debt securities are
based on quoted market prices, where
available.
Fair values for policy loans are estimated using discounted cash flow
calculations, based on interest rates currently being offered for similar loans
to borrowers.
The carrying amounts of cash and accrued investment income approximate their
fair value.
Fair values for liabilities under investment-type contracts are estimated using
discounted cash flow calculations, based on interest rates currently being
offered by similar contracts with maturities consistent with those remaining for
the contracts being valued. The liabilities under investment-type contracts are
included in policyholder contract deposits in the accompanying balance sheet.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1997
NOTE B--INVESTMENTS
The cost and fair value of fixed maturities available for sale are as follows
(in thousands):
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Fair
Cost Gain Loss Value
December 31, 1997
U.S. Treasury securities and
obligations of U.S. government
<S> <C> <C> <C> <C>
corporations and agencies $ 828 $ 75 $ - $ 903
Obligations of states and political
subdivisions 21,195 1,672 - 22,867
Corporate securities 345,198 25,661 139 370,720
Public utilities 84,557 7,542 79 92,020
Mortgage-backed securities 2,334 209 - 2,543
---------------- ---------------- ---------------- ----------------
$ 454,112 $ 35,159 $ 218 $ 489,053
================ ================ ================ ================
December 31, 1996
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies $ 843 $ 58 $ - $ 901
Obligations of states and political
subdivisions 23,193 801 6 23,988
Corporate securities 280,021 10,485 $ 2,473 288,033
Public utilities 114,746 4,267 1,136 117,877
Mortgage-backed securities 32,722 632 - 33,354
---------------- ---------------- ---------------- ----------------
$ 451,525 $ 16,243 $ 3,615 $ 464,153
================ ================ ================ ================
</TABLE>
The cost and fair value of fixed maturities available for sale at December 31,
1997, by contractual maturity, are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties (in thousands):
<TABLE>
<CAPTION>
Fair
Cost Value
<S> <C> <C> <C>
Due in 1998 $ 7,897 $ 8,032
Due in 1999-2002 53,875 56,505
Due in 2003-2007 108,204 113,808
Due after 2007 281,802 308,165
---------------- ----------------
451,778 486,510
Mortgage-backed securities 2,334 2,543
---------------- ----------------
$ 454,112 $ 489,053
================ ================
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1997
NOTE B--INVESTMENTS (Continued)
As of December 31, 1997, the Company held investments in one issuer, other than
the United States Government or a United States Government agency or authority,
which exceeded 10% of total shareholder's equity as follows (in thousands):
Name of Issuer Carrying Value
Hill Street Funding $ 9,178
=============
The carrying value of those assets that were on deposit with public officials in
compliance with regulatory requirements was $0.9 million at December 31, 1997.
Net investment income by major investment category is summarized as follows (in
thousands):
<TABLE>
<CAPTION>
1997 1996 1995
-------------- -------------- ---------
<S> <C> <C> <C>
Fixed maturities $ 35,740 $ 34,431 $ 30,865
Short-term, policy loans and other
investments 1,686 631 582
-------------- -------------- --------------
37,426 35,062 31,447
Investment expenses (358) (228) (550)
-------------- -------------- --------------
Net investment income $ 37,068 $ 34,834 $ 30,897
============== ============== ==============
The following summarizes realized investment gains and losses and other
information related to investments (in thousands):
1997 1996 1995
-------------- -------------- ---------
Gross gains on disposition of investment in
fixed maturities $ 664 $ 99 $ 283
Gross losses on disposition of investment in
fixed maturities (658) - (264)
-------------- ------------- -------------
Net gains on disposition of investment in
fixed maturities $ 6 $ 99 $ 19
============= ============= ============
Proceeds from disposition of investment in
fixed maturities $ 84,805 $ 39,469 $ 28,738
============= ============= ============
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1997
NOTE B--INVESTMENTS (Continued)
The components of change in net unrealized investment gains (losses) in the
accompanying statement of shareholder's equity are as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
-------------- ---------
Unrealized gains on investment in fixed
<S> <C> <C>
maturities $ 34,941 $ 12,628
Fair value adjustments to DPAC (23,053) (9,320)
Related deferred taxes (4,161) (1,051)
-------------- -------------
$ 7,727 $ 2,257
============== =============
</TABLE>
NOTE C--DEFERRED POLICY ACQUISITION COSTS (DPAC)
Significant components of changes in DPAC are as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
-------------- -------------- ---------
<S> <C> <C> <C>
Balance at beginning of year $ 56,632 $ 35,588 $ 61,435
Amounts deferred:
Commissions 10,204 9,045 8,645
Other 3,052 3,243 3,481
Amortization (3,974) (3,002) (2,197)
Fair value adjustment (13,733) 11,758 (35,776)
-------------- -------------- --------------
Balance at end of year $ 52,181 $ 56,632 $ 35,588
============== ============== ==============
</TABLE>
NOTE D--POLICY LIABILITIES
Components of policyholder contract deposits are as follows (in thousands):
<TABLE>
<CAPTION>
December 31
1997 1996
<S> <C> <C>
Liabilities for investment-type products $ 316,628 $ 289,762
Liabilities for non-traditional life insurance
products 166,849 192,799
------------- --------------
$ 483,477 $ 482,561
============= ==============
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1997
NOTE E--INCOME TAXES
Components of income tax liabilities are as follows (in thousands):
<TABLE>
<CAPTION>
December 31
1997 1996
<S> <C> <C>
Current tax liabilities $ 294 $ 951
Deferred tax liabilities 7,714 2,898
------------- --------------
$ 8,008 $ 3,849
============= ==============
Significant components of deferred tax liabilities (assets) are as follows (in
thousands):
December 31
1997 1996
Deferred policy acquisition costs $ 21,897 $ 18,046
Unrealized investment gains 4,161 1,051
Other - net - 136
------------- -------------
Total deferred tax liabilities 26,058 19,233
Life insurance policy liabilities (18,344) (16,335)
------------- -------------
Total deferred tax assets (18,344) (16,335)
------------- -------------
$ 7,714 $ 2,898
============= =============
</TABLE>
The Company offsets all deferred tax assets and liabilities and presents them in
a single amount in the balance sheet.
Components of provisions for income taxes (benefits) are as follows (in
thousands):
<TABLE>
<CAPTION>
1997 1996 1995
-------------- -------------- ---------
<S> <C> <C> <C>
Current tax expense (benefit) $ (238) $ 751 $ (665)
Deferred tax expense 1,813 1,424 1,996
-------------- -------------- --------------
$ 1,575 $ 2,175 $ 1,331
============== ============== ==============
</TABLE>
The differences between federal income taxes computed at the statutory rate and
provision for income taxes are primarily due to tax exempt income.
An income tax payment of $0.4 million and $0.3 million and an income tax refund
of $0.1 million in 1997, 1996 and 1995, respectively, was received from or paid
to TOLIC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1997
NOTE F--REINSURANCE (Continued)
The Company is involved in the cession of reinsurance to affiliated companies.
Risks are reinsured with other companies to permit the recovery of a portion of
the direct losses; however, the Company remains liable to the extent the
reinsuring companies do not meet their obligations under these reinsurance
agreements.
The components of the Company's life insurance in force and premiums and other
considerations are summarized as follows (in thousands):
<TABLE>
<CAPTION>
Ceded to
Gross Ceded to Non-affiliated Net
Amount TOLIC Companies Amount
1997
Life insurance in force,
<S> <C> <C> <C> <C>
at end of year $ 4,588,120 $ 297,518 $ 2,765,285 $ 1,525,317
=============== ================= ================== ==================
Premiums and other
considerations $ 23,686 $ 768 $ 5,085 $ 17,833
================== ================= ================== ==================
Benefits paid or
provided $ 45,434 $ 1,400 $ 6,354 $ 37,680
================== ================= ================== ==================
1996
Life insurance in force,
at end of year $ 4,769,031 $ 177,437 $ 2,323,447 $ 2,268,147
================== ================= ================== ==================
Premiums and other
considerations $ 24,652 $ 753 $ 8,275 $ 15,624
================== ================= ================== ==================
Benefits paid or
provided $ 43,440 $ 539 $ 8,446 $ 34,455
================== ================= ================== ==================
1995
Life insurance in force,
at end of year $ 5,216,397 $ 198,199 $ 2,643,198 $ 2,375,000
================== ================= ================== ==================
Premiums and other
considerations $ 23,367 $ - $ 9,872 $ 13,495
================== ================= ================== ==================
Benefits paid or
provided $ 39,432 $ 1,822 $ 5,626 $ 31,984
================== ================= ================== ==================
</TABLE>
NOTE G--PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS
Substantially all employees of the Company are covered by the Retirement Plan
for Salaried Employees of Transamerica Corporation and Affiliates (the "Plan").
Pension benefits are based on the employee's compensation during the highest
paid 60 consecutive months during the 120 months before retirement. Annual
contributions to the Plan generally include a provision for current service
costs plus amortization of prior service costs over periods ranging from 10 to
30 years. Assets of the plans are primarily invested in publicly traded stocks
and bonds.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1997
NOTE G--PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS (Continued)
The Company's pension costs charged to income were not significant in 1997, 1996
or 1995.
The Company also participates in various contributory defined benefit programs
sponsored by Transamerica Corporation that provide medical and certain other
benefits to eligible retirees. Postretirement benefit costs charged to income
were not significant.
NOTE H--RELATED PARTY TRANSACTIONS
The Company has various transactions with TOLIC and certain of its other
affiliates in the normal course of operations, including reinsurance
transactions, computer services, investment services and advertising services.
The reinsurance recoverable from TOLIC, including the amount receivable for
policy claims paid, amounted to $123,000 and $300,000 at December 31, 1997 and
1996, respectively.
NOTE I--LEASES
Substantially all leases of the Company are operating leases principally for the
rental of real estate. Rental expense for properties occupied by the Company was
$1.0 million in 1997 and $0.9 million in 1996 and 1995. The following is a
schedule by year of future minimum rental payments required under operating
leases that have initial or remaining noncancelable lease terms in excess of one
year as of December 31, 1997 (in thousands):
Year ending December 31
DecemDecember331:DEcDecember 31:
1998 $ 1,141
1999 1,141
2000 707
2001 328
2002 328
Later years 4,097
-------------
$ 7,742
NOTE J--LITIGATION
The Company is a defendant in various legal actions arising from its operations.
These include legal actions similar to those faced by many other major life
insurers which allege damages related to sales practices for universal life
policies sold between January 1981 and June 1996. In one such action, the
Company (along with TOLIC and Transamerica Assurance Company, an affiliate) and
plaintiff's counsel entered into a settlement which was approved on June 26,
1997. The settlement required prompt notification to affected policyholders.
Administrative and policy benefit costs associated with the settlement have been
accrued. The portion which relates to the Company is not material. Additional
costs related to the settlement are not expected to be material and will be
incurred over a period of years. Additional costs related to the settlement are
not currently determinable.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1997
NOTE J--LITIGATION (Continued)
In the opinion of the Company, any ultimate liability which might result from
other litigation would not have a materially adverse effect on the financial
position of the Company or the results of its operations.
NOTE K--REGULATORY MATTERS
The Company is subject to state insurance laws and regulations, principally
those of the State of New York. Such regulations include the risk based capital
requirement and the restriction on the payment of dividends. Generally,
dividends during any year may not be paid, without prior regulatory approval, in
excess of the greater of 10% of the Company's statutory capital and surplus as
of the preceding year end or the Company's statutory net income from operations
for the preceding year. Those statutory amounts are determined in conformity
with statutory accounting practices prescribed or permitted by the Department of
Insurance of New York ("New York Department"). Currently, no dividends can be
paid by the Company without prior approval of New York Department.
The Company's statutory net income income (loss) and capital and surplus are
summarized as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
-------------- -------------- ---------
<S> <C> <C> <C>
Statutory net income (loss) $ 395 $ (551) $ 1,779
Statutory capital and surplus, at end of year 23,591 22,822 22,713
NOTE L--FINANCIAL INSTRUMENTS
The carrying values and estimated fair values of financial instruments are as
follows (in thousands):
December 31
1997 1996
------------------------------- ------------------
Carrying Fair Carrying Fair
Value Value Value Value
Financial Assets:
Fixed maturities $ 489,053 $ 489,053 $ 464,153 $ 464,153
Policy loans 13,595 13,595 11,973 11,973
Cash 3,029 3,029 9,079 9,079
Accrued investment income 9,245 9,245 8,840 8,840
Financial Liabilities:
Liabilities for investment-type
contracts:
Single and flexible premium
deferred annuities 151,173 150,577 146,524 144,207
Single premium immediate
annuities 165,455 165,881 143,238 130,297
</TABLE>
<PAGE>
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements
All required financial statements are included in Parts A or B of this
Registration Statement.
(b) Exhibits
(1) Resolution of the Board of Directors of First
Transamerica Life Insurance
Company authorizing establishment of the Variable
Account. (5)
(2) Not Applicable.
(3) (a) Principal Underwriting Agreement between
First Transamerica Life
Insurance Company and Charles Schwab & Co.,
Inn (10)
(b) Agency Agreement between First Transamerica
Life Insurance
Company and Charles Schwab & Co., Inn (10)
(c) Distribution Agreement between First
Transamerica Life Insurance Company
and Transamerica Securities Sales Corporation 11/
(4) Group Contract Form, Certificate Form, and Endorsements. (6)
(a) Group Contract Form and Endorsements.
(i) Form of Flexible Purchase Payment Deferred Group Annuity
Contract (Form No. FTGP-501-193).
(ii) Form of Dollar Cost Averaging Option
Endorsement to Contract (Form No.
FTGE-003-193).
(iii) Form of Automatic Payout Option
Endorsement to Contract (Form No.
FTGE-004-193).
(iv) Form of Systematic Withdrawal Option
Endorsement to Contract (Form No.
FTGE-005-193).
(b) Certificate of Participation Form and Endorsements.
(i) Form of Certificate of Participation (Form No.
FTCG-101-193).
(ii) Form of IRA Endorsement to
Certificate (Form No.
FTCE-005-193).
(iii) Form of Benefit Distribution
Endorsement to Certificate (Form
No. FTCE 006 193).
(iv) Form of Dollar Cost Averaging Option
Endorsement to Certificate (Form No.
FTCE-007-193).
(v) Form of Automatic Payout Option
Endorsement to Certificate (Form No.
FTCE-009-193).
(vi) Form of Systematic Withdrawal Option
Endorsement to Certificate (Form No.
FTCE 009-193).
(vii) Form of Annuity Rate Table
Endorsement to Certificate (Form No.
FTCE-010-193).
(5) (a) Form of Acceptance of Group Annuity Contract
(Form No. FTGA-003193) (6)
(b) Form of Variable Annuity Application to
Certificate (Form No. FTGA
004-193). (6)
(6) (a) Declaration of Intention and Charter of
First Transamerica Life
Insurance Company. (1)
(b) By-Laws of First Transamerica Life
Insurance Company. (1)
(7) Not applicable.
(8)(a) Draft Participation Agreement among SteinRoe Variable Investment
Trust, Stein Roe & Farnam Incorporated, First Transamerica Life
Insurance Company, and Charles Schwab & Co., Ink (8)
(b) Draft Participation Agreement among INVESCO Variable Investment
Funds, Inc., INVESCO Funds Group, Inc. First Transamerica Life
Insurance Company, and Charles Schwab & Co., Ink (8)
(c) Draft Participation Agreement among Schwab Annuity Portfolios, Charles
Schwab Investment Management, Inc. First Transamerica Life Insurance
Company, and Charles Schwab & Co., Inc. (8)
(d) Draft Participation Agreement among
Lexington Emerging Markets Fund, Inc.,
Lexington Management Corporation, First
Transamerica Life Insurance Company, and
Charles Schwab & Co., Inc. (8)
(e) Draft Participation Agreement among TCI Portfolios, Inc. Investors
Research Corporation, First Transamerica Life Insurance Company, and
Charles Schwab & Co., Inc. (8)
(f) Draft Participation Agreement among Insurance Management Series,
Federated Advisers, Federated Securities Corporation, First Transamerica
Life Insurance Company, and Charles Schwab & Co., Ink (8)
(g) Drab Participation Agreement among Strong Discovery Fund II, Inc.
Strong/Corneliuson Capital Management, Inc. Strong Funds Distributors,
First Transamerica Life Insurance Company, and Charles Schwab & Co.,
Ink (8)
(h) Draft Participation Agreement among Janus Aspen Series, Janus Capital
Corporation, First Transamerica Life Insurance Company, and Charles
Schwab & Co., Inc. (8)
(i) Draft Administrative Services Agreement between Charles Schwab & Co.,
Inc. and First Transamerica Life Insurance Company. (8)
(9) Opinion and Consent of Counsel. (10)
(10) (a) Consent of Counsel. (11)
(b) Consent of Independent Auditors. (12)
(11) No financial statements are omitted from item 23.
(12) Not applicable.
(13) Performance Data Calculations. (7) (9)
(14) Not applicable.
(15) Powers of Attorney.
Alan T. Cunningham (12) Robert Abeles (12)
Marc C. Abrahms (12) James Inzerillo (12)
James T. Byrne, Jr. (12) Daniel E. Jund (12)
Thomas J. Cusack (12)
James W. Dederer (12) John A. Paganelli (12)
John A. Fibiger (12) James B. Roszak (12)
David E. Gooding (12) Nooruddin S. Veerjee (12)
Alan D. Greenberg (12)
(1) Incorporated by reference to the like-numbered exhibit to the initial
filing of the Registration Statement of Transamerica Occidental Life
Insurance Company's Separate Account VA-2NLNY on Form N-4, File No.
33-55154 (December 1, 1992).
(2) Incorporated by reference to the like-numbered exhibit to
Post-Effective Amendment No. 1 to the Registration Statement of First
Transamerica Life Insurance Company's Separate Account VA 2LNY on Form
N-4, File No. 33-55152 (June 8, 1993).
(3) Incorporated by reference to the like-numbered exhibit to Pre-Effective
Amendment No.1 to the Registration Statement of First Transamerica Life
Insurance Company's Separate Account VA 2LNY on Form N-4, File No.
33-55152 (February 10, 1993).
(4) Incorporated by reference to the like-numbered exhibit to Pre-Effective
Amendment No. 1 the Registration Statement of First Transamerica Life
Insurance Company's Separate Account VA 2NLNY on Form N-4, File No.
33-55154 (October 18, 1993).
(5) Incorporated by reference to the like-numbered exhibit to the initial
filing of the Registration Statement of First Transamerica Life
Insurance Company's Separate Account VA-5NLNY on Form N-4, File No.
33-71748 (November 17, 1993).
(6) Incorporated by reference to the like-numbered exhibit to Pre-Effective
Amendment No. 1 to the Registration Statement of First Transamerica
Life Insurance Company's Separate Account VA 5NLNY, on Form N-4, File
No. 33-71748 (February 2, 1994).
(7) Incorporated by reference to the like-numbered exhibit to Post-
Effective Amendment No. 1 to the
Registration Statement of Transamerica Occidental Life Insurance
Company's Separate Account
VA-5 on Form 4, File No. 33-71746 (May 2, 1994).
(8) Incorporated by reference to the like-numbered exhibit to Post-
Effective Amendment No. 1 to this Form
N-4 Registration Statement, File No. 33-71748 (October 4, 1994).
(9) Incorporated by reference to the like-numbered exhibit to Post-
Effective Amendment No. 2 to this Form
N-4 Registration Statement, File No. 33-71748 (April 28, 1995).
(10) Incorporated by reference to the like-numbered exhibit to
Post-Effective Amendment No.3 to this Form N-4 Registration Statement,
File No. 33-71748 (April 26, 1996).
(11) Incorporated by reference to the like-numbered exhibit to
Post-Effective Amendment No. 4 to this Form N-4 Registration Statement,
File No. 33-71748 (April 28, 1997).(12) Filed herewith.
<PAGE>
Item 25. Directors and Officers of the Depositor
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITION AND OFFICES WITH DEPOSITOR
<S> <C> <C>
James W. Dederer Director, Chairman, General Counsel and Corporate Secretary
Alan T. Cunningham Director and President
Robert Rubinstein Senior Vice President, Chief Actuary and Chief Operating
Officer
Gary Rolle' Investment Officer
Susan Silbert Investment Officer
Nicki Bair, FSA, MAAA Vice President
Paul Hankwitz MD Vice President and Chief Medical Director
William J. Lyons Vice President and Chief Underwriter
Alison B. Pettingall Vice President - Marketing
Martin V. Mondato Second Vice President and Director of Operations
Alexander Smith, Jr. Vice President, Administration and Controller
Kamran Haghighi Tax Officer
William M. Hurst Assistant Secretary
Sally S. Yamada Treasurer
Robert Abeles Director
Marc C. Abrahms Director
James T. Byrne, Jr. Director
Thomas J. Cusack Director
John A. Fibiger Director
David E. Gooding Director
Allan D. Greenberg Director
James Inzerillo Director
Daniel E. Jund Director
John A. Paganelli Director
James B. Roszak Director
Nooruddin s. Veerjee Director
</TABLE>
<PAGE>
Item 26. Person Controlled by or Under Common Control With the Depositor or
Registrant.
The Depositor, First Transamerica Life Insurance Company
(Transamerica), is wholly owned by Transamerica Occidental Life Insurance
Company. The Registrant is a segregated asset account of Transamerica.
The following chart indicates the persons controlled by or
under common control with Transamerica.
<PAGE>
TRANSAMERICA CORPORATION AND SUBSIDIARIES
WITH STATE OR COUNTRY OF INCORPORATION
Transamerica Corporation - DE
ARC Reinsurance Corporation - HI
Transamerica Management, Inc. - DE
Criterion Investment Management Company - TX
Inter-America Corporation - CA
Mortgage Corporation of America - CA
Pyramid Insurance Company, Ltd. - HI
Pacific Cable Ltd. - Bmda.
TC Cable, Inc. - DE
RTI Holdings, Inc. - DE
Transamerica Airlines, Inc. - DE
Transamerica Business Technologies Corporation - DE
Transamerica CBO I, Inc. - DE
Transamerica Corporation (Oregon) - OR
Transamerica Delaware, L.P. - DE
Transamerica Finance Corporation - DE
TA Leasing Holding Co., Inc. - DE
Trans Ocean Ltd. - DE
Trans Ocean Container Corp. - DE
SpaceWise Inc. - DE
TOD Liquidating Corp. - CA
TOL S.R.L. - Itl.
Trans Ocean Container Finance Corp. - DE
Trans Ocean Leasing Deutschland GmbH - Ger.
Trans Ocean Leasing PTY Limited - Aust.
Trans Ocean Management Corporation - CA
Trans Ocean Management S.A. - SWTZ
Trans Ocean Regional Corporate Holdings - CA
Trans Ocean Tank Services Corporation - DE
Transamerica Leasing Inc. - DE
Better Asset Management Company LLC - DE
Transamerica Leasing Holdings Inc. - DE
Greybox Logistics Services Inc. - DE
Greybox L.L.C. - DE
Transamerica Trailer Leasing S.N.C. - Fra.
Greybox Services Limited - U.K.
Intermodal Equipment, Inc. - DE
Transamerica Leasing N.V. - Belg.
Transamerica Leasing SRL - Itl.
Transamerica Distribution Services Inc. - DE
Transamerica Leasing Coordination Center - Belg.
Transamerica Leasing do Brasil Ltda. - Braz.
Transamerica Leasing GmbH - Ger.
Transamerica Leasing Limited - U.K.
ICS Terminals (UK) Limited - U.K.
Transamerica Leasing Pty. Ltd. - Aust.
Transamerica Leasing (Canada) Inc. - Can.
Transamerica Leasing (HK) Ltd. - H.K.
Transamerica Leasing (Proprietary) Limited - S.Afr.
Transamerica Tank Container Leasing Pty. Limited - Aust.
Transamerica Trailer Holdings I Inc. - DE
Transamerica Trailer Holdings II Inc. - DE
Transamerica Trailer Holdings III Inc. - DE
Transamerica Trailer Leasing AB - Swed.
Transamerica Trailer Leasing AG - SWTZ
Transamerica Trailer Leasing A/S - Denmk.
Transamerica Trailer Leasing GmbH - Ger.
Transamerica Trailer Leasing (Belgium) N.V. - Belg.
Transamerica Trailer Leasing (Netherlands) B.V. - Neth.
Transamerica Trailer Spain S.A. - Spn.
Transamerica Transport Inc. - NJ
Transamerica Commercial Finance Corporation, I - DE
BWAC Credit Corporation - DE
BWAC International Corporation - DE
BWAC Twelve, Inc. - DE
TIFCO Lending Corporation - IL
Transamerica Insurance Finance Corporation - MD
Transamerica Insurance Finance Company (Europe) - MD
Transamerica Insurance Finance Corporation, California - CA
Transamerica Insurance Finance Corporation, Canada - ON
Transamerica Business Credit Corporation - DE
Direct Capital Equity Investment, Inc. - DE
TA Air East, Corp. -
TA Air III, Corp. - DE
TA Air II, Corp. - DE
TA Air IV, Corp. - DE
TA Air I, Corp. - DE
TBC III, Inc. - DE
TBC II, Inc. - DE
TBC IV, Inc. -
TBC I, Inc. - DE
TBC Tax III, Inc. -
TBC Tax II, Inc. -
TBC Tax IV, Inc. -
TBC Tax IX, Inc. -
TBC Tax I, Inc. -
TBC Tax VIII, Inc. -
TBC Tax VII, Inc. -
TBC Tax VI, Inc. -
TBC Tax V, Inc. -
TBC Tax XII, Inc. -
TBC Tax XI, Inc. -
TBC V, Inc. -
The Plain Company - DE
Transamerica Distribution Finance Corporation - DE
Transamerica Accounts Holding Corporation - DE
Transamerica Commercial Finance Corporation - DE
Inventory Funding Trust - DE
Inventory Funding Company, LLC - DE
TCF Asset Management Corporation - CO
Transamerica Joint Ventures, Inc. - DE
Transamerica Inventory Finance Corporation - DE
BWAC Seventeen, Inc. - DE
Transamerica Commercial Finance Canada, Limited - ON
Transamerica Commercial Finance Corporation, Canada - Can.
BWAC Twenty-One, Inc. - DE
Transamerica Commercial Finance Limited - U.K.
WFC Polska Sp. Zo.o -
Transamerica Commercial Holdings Limited - U.K.
Transamerica Commercial Holdings, Inc. -
Transamerica Trailer Leasing Limited - NY
Transamerica Commercial Finance France S.A. - Fra.
Transamerica GmbH Inc. - DE
Transamerica Retail Financial Services Corporation - DE
Transamerica Consumer Finance Holding Company - DE
Metropolitan Mortgage Company - FL
Easy Yes Mortgage, Inc. - FL
Easy Yes Mortgage, Inc. - GA
First Florida Appraisal Services, Inc. - FL
First Georgia Appraisal Services, Inc. - GA
Freedom Tax Services, Inc. - FL
J.J. & W. Advertising, Inc. - FL
J.J. & W. Realty Corporation - FL
Liberty Mortgage Company of Ft. Myers, Inc. - FL
Metropolis Mortgage Company - FL
Perfect Mortgage Company - FL
Whirlpool Financial National Bank - DE
Transamerica Vendor Financial Services - DE
Transamerica Distribution Finance Corporation de Mexico -
Transamerica Corporate Services de Mexico -
Transamerica Federal Savings Bank -
Transamerica HomeFirst, Inc. - CA
Transamerica Home Loan - CA
Transamerica Lending Company - DE
Transamerica Financial Products, Inc. - CA
Transamerica Foundation - CA
Transamerica Insurance Corporation of California - CA
Arbor Life Insurance Company - AZ
Plaza Insurance Sales, Inc. - CA
Transamerica Advisors, Inc. - CA
Transamerica Annuity Service Corporation - NM
Transamerica Financial Resources, Inc. - DE
Financial Resources Insurance Agency of Texas - TX
TBK Insurance Agency of Ohio, Inc. - OH
Transamerica Financial Resources Insurance Agency of Alabama Inc.
- AL
Transamerica Financial Resources Insurance Agency of Massachusetts
Inc. - MA
Transamerica International Insurance Services, Inc. - DE
Home Loans and Finance Ltd. - U.K.
Transamerica Occidental Life Insurance Company - CA
NEF Investment Company - CA
Transamerica China Investments Holdings Limited - H.K.
Transamerica Life Insurance and Annuity Company - NC
Transamerica Assurance Company - CO
Transamerica Life Insurance Company of Canada - Can.
Transamerica Life Insurance Company of New York - NY
Transamerica South Park Resources, Inc. - DE
Transamerica Variable Insurance Fund, Inc. - MD
USA Administration Services, Inc. - KS
Transamerica Products, Inc. - CA
Transamerica Leasing Ventures, Inc. - CA
Transamerica Products II, Inc. - CA
Transamerica Products IV, Inc. - CA
Transamerica Products I, Inc. - CA
Transamerica Securities Sales Corporation - MD
Transamerica Service Company - DE
Transamerica Intellitech, Inc. - DE
Transamerica International Holdings, Inc. - DE
Transamerica Investment Services, Inc. - DE
Transamerica Income Shares, Inc. (managed by TA Investment Services)
- - MD
Transamerica LP Holdings Corp. - DE
Transamerica Real Estate Tax Service (A Division of Transamerica
Corporation) - N/A
Transamerica Flood Hazard Certification (A Division of TA Real
Estate Tax Service) - N/A
Transamerica Realty Services, Inc. - DE
Bankers Mortgage Company of California - CA
Pyramid Investment Corporation - DE
The Gilwell Company - CA
Transamerica Affordable Housing, Inc. - CA
Transamerica Minerals Company - CA
Transamerica Oakmont Corporation - CA
Ventana Inn, Inc. - CA
Transamerica Senior Properties, Inc. - DE
Transamerica Senior Living, Inc. - DE
*Designates INACTIVE COMPANIES
A Division of Transamerica Corporation
ss.Limited Partner; Transamerica Corporation is General Partner
<PAGE>
Item 27. Number of Contract Owners
As of April 1, 1998, there were 84 Owners of Non-Qualified Individual
Contract and 3 Owners
of Qualified Individual Contracts.
Item 28. Indemnification
Transamerica's Bylaws provide in Article VIII as follows:
Section 1. Indemnification: (a) The Corporation shall indemnify to the
fullest extent now or hereafter provided for or permitted by law each person
involved in, or made or threatened to be made a party to, any action, suit,
claim or proceeding, whether civil or criminal, including any investigative,
administrative, legislative, or other proceeding, and including any action by or
in the right of the Corporation or any other corporation, or any partnership,
joint venture, trust, employee benefit plan, or other enterprise (any such
entity, other than the Corporation, being hereinafter referred to as an
"Enterprise"), and including appeals therein (any such action or process being
hereinafter referred to as a Proceeding), by reason of the fact that such
person, such person's testator or intestate (i) is or was a director or officer
of the Corporation, or (ii) is or was serving, at the request of the
Corporation, as a director, officer, or in any other capacity, of any other
Enterprise, against any and all judgments, amounts paid in settlement, and
expenses, including attorneys' fees, actually and reasonably incurred as a
result of or in connection with any Proceeding, except as provided in Subsection
(b) below.
(b) No indemnification shall be made to or on behalf of any such person
if a judgment or other final adjudication adverse to such person establishes
that such person's acts were committed in bad faith or were the result of active
and deliberate dishonesty and were material to the cause of action so
adjudicated, or that such person personally gained in fact a financial profit or
other advantage to which such person was not legally entitled. In addition, no
indemnification shall be made with respect to any Proceeding initiated by any
such person against the Corporation, or a director or officer of the
Corporation, other than to enforce the terms of this Article VIII, unless such
Proceeding was authorized by the Board of Directors. Further, no indemnification
shall be made with respect to any settlement or compromise of any Proceeding
unless and until the Corporation has consented to such settlement or compromise.
(c) Written notice of any Proceeding for which indemnification may be
sought by any peon shall be given to the Corporation as soon as practicable. The
Corporation shall then be permitted to participate in the defense of any such
proceeding or, unless conflicts of interest or position exist between such peon
and the Corporation in the conduct of such defense, to assume such defense. In
the event that the Corporation assumes the defense of any such Proceeding, legal
counsel selected by the Corporation shall be reasonably acceptable to such
person. After such an assumption, the Corporation shall not be liable to such
person for any legal or other expenses subsequently incurred unless such
expenses have been expressly authorized by the Corporation. In the event that
the Corporation participates in the defense of any such Proceeding, such person
may select counsel to represent him in regard to such a Proceeding; however,
such peon shall cooperate in good faith with any request that common counsel be
utilized by the parties to any Proceeding who are similarly situated, unless to
do so would be inappropriate due to actual or potential differing interests
between or among such parties.
(d) In making any determination regarding any person's entitlement to
indemnification hereunder, it shall be presumed that such person is entitled to
indemnification, and the Corporation shall have the burden of proving the
contrary.
Section 2. Advancement of Expenses. Except in the case of a Proceeding
against a director, officer, or other person specifically approved by the Board
of Directors, the Corporation shall, subject to Section 1 of this Article VIII
above, pay expenses actually and reasonably incurred by or on behalf of such a
person in defending any Proceeding in advance of the final disposition of such
Proceeding. Such payments shall be made promptly upon receipt by the
Corporation, from time to time, of a written demand by such person for such
advancement, together with an undertaking by or on behalf of such person to
repay any expenses so advanced to the extent that the person receiving the
advancement is ultimately found not to be entitled to indemnification for pan or
all of such expenses.
Section 3. Rights Not Exclusive. The rights to indemnification and
advancement of expenses granted by or pursuant to this Article VIII (i) shall
not limit or exclude, but shall be in addition to, any other rights which may be
granted by or pursuant to any statute, corporate charter, by-law, resolution of
stockholders or directors or agreement, (ii) shall be deemed to constitute
contractual obligations of the Corporation to any person who serves in a
capacity referred to in Section 1 of this Article VIII at any time while this
Article VIII is in effect, (iii) shall continue to exist after the repeal of
modification of this Article VIII with respect to events occurring prior thereto
and (iv) shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of the estate, spouse, heirs, executors,
administrators or assigns of such person. It is the intent of this Article VIII
to require the Corporation to indemnify the persons referred to herein for the
aforementioned judgments, amounts paid in settlement, and expenses, including
attorneys' fees, in each and every circumstance in which such indemnification
could lawfully be permitted by express provisions of by-laws, and the
indemnification required by this Article VIII shall not be limited by the
absence of an express recital of such circumstances.
Section 4. Indemnification of Employees and Others. The Corporation
may, from time to time, with the approval of the Board of Directors, and to the
extent authorized, grant rights to indemnification, and to the advancement of
expenses, to any employee or agent of the Corporation or to any person serving
at the request of the Corporation as a director or officer, or in any other
capacity, of any other Enterprise, to the fullest extent of the provisions of
this Article VIII with respect to the indemnification and advancement of
expenses of directors and officers of the Corporation.
Section 5. Authorization of Contracts. The Corporation may, with the
approval of the Board of Directors, enter into an agreement with any person who
is, or is about to become, a director, officer, employee or agent of the
Corporation, or who is serving, or is about to serve, at the request of the
Corporation, as a director, officer, or in any other capacity, of any other
Enterprise, which agreement may provide for indemnification of such person and
advancement of expenses to such person upon terms, and to the extent, not
prohibited by law. The failure to enter into any such agreement shall not affect
or limit the rights of any such person under this Article VIII.
Section 6. Insurance. The Corporation may purchase and maintain
insurance to indemnify the
Corporation and any person eligible to be indemnified under this Article VIII
within the limits
permitted by law.
Section 7. Severability. If any provision of this Article VIII is
determined at any time to be
unenforceable in any respect, the other provisions shall not in any way be
affected or impaired thereby.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling person of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by the director, officer or controlling person of the registrant in the
successful defense of any anion, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
The directors and officers of First Transamerica Life Insurance Company
are covered under a Directors and Officers liability program which includes
$55,000,000 for corporate reimbursement for the directors and officers of
Transamerica Occidental Life Insurance Company and its subsidiaries as insureds.
Such directors and officers are indemnified for loss arising from any covered
claim by reason of any Wrongful Act in their capacities as directors or
officers. The term Glossy means any amount which the insureds are legally
obligated to pay for claim for Wrongful Acts. The term "Wrongful Acts" means any
breach or alleged breach of duty, neglect, error, misstatement, misleading
statement or omission actually or allegedly caused, committed or attempted by a
director or officer while acting individually or collectively in their capacity
as such, claimed against them solely by reason of their being directors and
officers. The limit of liability under the program is $95,000,000 for Coverage A
and $80,000,000 for Coverage B for the period 11/15/98 to 11/15/2000. Coverage B
is subject to a self-insured retention of $15,000,000. The primary policy is
with CNA, Lloyds, Gulf, Chubb and Travelers.
Item 29. Principal Underwriter
Transamerica Securities Sales Corporation ("TSSC") is the underwriter
of the Certificates and the Individual Contracts as defined in the Investment
Company Act of 1940. TSSC became Principal Underwriter effective May 1, 1997.
NAME AND PRINCIPAL POSITION AND OFFICE WITH
BUSINESS ADDRESS* TRANSAMERICA SECURITIES SALES CORPORATION
Barbara A. Kelley President and Director
Regina M. Fink Secretary and Director
Benjamin Tang Treasurer
Nooruddin Veerjee Director
Dan S. Trivers Senior Vice President
Nicki A. Bair Vice President
Chris Shaw Second Vice President
*The Principal business address for each officer and director is 1150 South
Olive, Los Angeles, CA 90015.
The following table lists the amounts of commissions paid to the
principal underwriter during the last fiscal year.
<TABLE>
<CAPTION>
Name of
Principal Net Underwriting Compensation on Brokerage
Underwriter Discounts & Commission Redemption Commissions Compensation
<S> <C> <C> <C> <C>
Schwab -0- -0- -0- -0-
TSSC -0- -0- -0- -0-
</TABLE>
Item 30. Location and Accounts and Records
All accounts and records required to be maintained by Section 31 (a) of the 1940
Act and the rules under it are maintained by Transamerica or the Service Office
at their administrative offices.
Item 31. Management Services
All management contracts are discussed in Parts A or B.
Item 32. Undertakings
(a)Registrant undertakes that it will file a post-effective amendment to this
registration statement as frequently as necessary to ensure that the audited
financial statements in the registration statement are never more than 16 months
old for so long as payments under the variable annuity contracts may be
accepted.
(b)Registrant undertakes that it will include either (1) as pan of any
application to purchase a Policy offered by the Prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
post card or similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information.
(c)Registrant undertakes to deliver any Statement of Additional Information and
any financial statements required to be made available under this Form promptly
upon written or oral request to Transamerica at the address or phone number
listed in the Prospectus.
(d) Transamerica hereby represents that the fees and the charges deducted
under the Contracts, in the aggregate, are reasonable in relation to
the services rendered, the expenses expected to be incurred, and the
risks assumed by Transamerica.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, Transamerica Life Insurance Company of New York certifies
that this Amendment meets the requirements of Securities Act Rule 485(b) for
effectiveness of this Registration Statement and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, in the
City of Los Angeles, State of California on this day of April, 1998
SEPARATE ACCOUNT VA-5NLNY
OF TRANSAMERICA
LIFE INSURANCE COMPANY OF NEW YORK
(REGISTRANT)
TRANSAMERICA
LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
BY: _______________________________
David M. Goldstein
Vice President
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
_________________________ * President and Director April 28, 1998
Alan T. Cunningham
__________________________ * Vice President and Controller, April 28, 1998
Alexander Smith
__________________________ * Director April 28, 1998
Robert Abeles
__________________________ * Director April 28, 1998
Marc C. Abrahms
_________________________ * DirectorApril 28, 1998
James T. Byrne, Jr.
__________________________ * Director April 28, 1998
Thomas J. Cusack
__________________________ * Director April 28, 1998
John Fibiger
__________________________ * Director April 28, 1998
David E. Gooding
<PAGE>
Signature Title Date
___________________________ * DirectorApril 28, 1998
Allan D. Greenberg
___________________________ * Director April 28, 1998
James B. Roszak
___________________________ * Director April 28, 1998
James Inzerillo
___________________________ * Director April 28, 1998
Daniel E. Jund
_________________________ * Director April 28, 1998
John A. Paganelli
_________________________ * Director April 28, 1998
Nooruddin S. Veerjee
___________________________ on April 28, 1998 as Attorney-in-Fact
*By: pursuant to powers of attorney previously
David M. Goldstein filed and in his own capacity as Vice President.
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
No. of Exhibit No.
(10) (b) Consent of Independent Auditors
(15) Powers of Attorney
<PAGE>
Exhibit 10(b) Consent of Independent Auditors
We consent to the reference to our firm under the caption "Accountants" in
Post-Effective Amendment No. 5 under the Securities Act of 1933 and
Post-Effective Amendment No. 6 under the Investment Company Act of 1940 to the
Registration Statement (Form N-4 No. 33-71748) and related Prospectus and
Statement of Additional Information of Separate Account VA-5NLNY of Transamerica
Life Insurance Company of New York and to the use of our report dated January
23, 1998 with respect to the financial statements of Transamerica Life Insurance
Company of New York and our report dated April 13, 1998 with respect to the
financial statements of Separate Account VA-5NLNY, both included in the
Statement of Additional Information.
/s/Ernst & Young LLP
Los Angeles, California
April 28, 1998
<PAGE>
Exhibit 15 Powers of Attorney
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
Robert Abeles
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
Thomas J. Cusack
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
James W. Dederer
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
Marc C. Abrahms
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
David E. Gooding
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
James T. Byrne, Jr.
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
Alan T. Cunningham
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
John A. Fibiger
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
Allan D. Greenberg
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
James Inzerillo
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
Daniel E. Jund
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
Nooruddin Veerjee
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
John A. Paganelli
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance Company of New
York, a New York corporation (the "Company"), hereby constitutes and appoints
Aldo Davanzo, James W. Dederer, David M. Goldstein, David E. Gooding, and
William M. Hurst and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him and on his behalf and in his name, place and
stead, to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 and under the Investment Company
Act of 1940 with respect to any life insurance and annuity policies:
registration statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this
20th day of March, 1998.
------------------------------
James B. Roszak
