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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
MARCH ___, 1996.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-8B-2
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FILE NO. 811-8230
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AMENDMENT NO. 2 TO
REGISTRATION STATEMENT OF UNIT INVESTMENT TRUSTS
WHICH ARE CURRENTLY ISSUING SECURITIES
PURSUANT TO SECTION 8(B) OF THE
INVESTMENT COMPANY ACT OF 1940
CHUBB SEPARATE ACCOUNT C
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(NAME OF UNIT INVESTMENT TRUST)
_______ NOT THE ISSUER OF PERIODIC PAYMENT PLAN CERTIFICATES.
X ISSUER OF PERIODIC PAYMENT PLAN CERTIFICATES.
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I.
ORGANIZATION AND GENERAL INFORMATION
1. (a) Furnish name of the trust and the Internal Revenue Service Employer
Identification Number.
Chubb Separate Account C ("Separate Account C"). Separate Account C
has no Internal Revenue Service Employer Identification Number.
(b) Furnish title of each class or series of securities issued by the
trust.
Units of interest in Separate Account C providing benefits under
flexible premium variable life insurance policies. There will be two
classes of policies issued by Separate Account C and each such class
will be separately registered under the Securities Act of 1933: (1)
Chubb Heritage Series VUL ("Heritage Policies")(File No. 33-72830),
the Prospectus of which is included herein as Exhibit D and (2) Chubb
Advisor Series VUL ("Advisor Policies") (File No. 33- ), the
Prospectus of which is included herein as Exhibit E. Unless the
context clearly indicates otherwise, the Heritage Policies and
Advisor Policies shall be referred to collectively herein as the
"Policies".
2. Furnish name and principal business address and Zip Code and the Internal
Revenue Service Employer Identification Number of each depositor of the
trust.
Chubb Life Insurance Company of America
("Chubb Life") One Granite Place
Concord, New Hampshire 03301
IRS Employer Identification Number: 62-0395665
3. Furnish name and principal business address and ZIP Code and the Internal
Revenue Service Employer Identification Number of each custodian or trustee
of the trust indicating for which class or series of securities each
custodian or trustee is acting.
There is no custodian or trustee for Separate Account C.
4. Furnish name and principal business address and Zip Code and the Internal
Revenue Service Employer Identification Number of each principal underwriter
currently distributing securities of the trust.
The principal underwriter of the Heritage Policies is:
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Chubb Securities Corporation
One Granite Place
Concord, New Hampshire 03301
IRS Employer Identification Number: 02-0275490
Distribution of the Advisor Policies has not commenced. When such
distribution commences, the principal underwriter will also be Chubb
Securities Corporation.
5. Furnish name of state or other sovereign power, the laws of which govern
with respect to the organization of the trust.
New Hampshire
6. (a) Furnish the dates of execution of any indenture or agreement currently
in effect under the terms of which the trust was organized and issued
or proposes to issue securities.
Separate Account C was established pursuant to a resolution of the
Executive Committee of the Board of Directors of Chubb Life adopted
as of August 4, 1993. This resolution authorized the issuance of the
Heritage Policies through Separate Account C. On June 9, 1995, the
Board of Directors of Chubb Life adopted a resolution authorizing the
issuance of the Advisor Policies through Separate Account C.
(b) Furnish the dates of execution and termination of any indenture or
agreement currently in effect pursuant to which the proceeds of
payments on securities issued or to be issued by the trust are held by
the custodian or trustee.
Not applicable, because Chubb Life will hold the assets of Separate
Account C, pursuant to the insurance laws of the State of New
Hampshire and in uncertificated form.
7. Furnish in chronological order the following information with respect to
each change of name of the trust since January 1, 1930. If the name has
never been changed, so state.
Separate Account C has never been known by any other name.
8. State the date on which the fiscal year of the trust ends.
December 31.
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MATERIAL LITIGATION
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9. Furnish a description of any pending legal proceedings, material with
respect to the security holders of the trust by reason of the nature of the
claim or the amount thereof, to which the trust, the depositor, or the
principal underwriter is a party or of which the assets of the trust are the
subject, including the substance of the claims involved in such proceeding
and the title of the proceeding. Furnish a similar statement with respect to
any pending administrative proceeding commenced by a governmental authority
or any such proceeding or legal proceeding known to be contemplated by a
governmental authority. Include any proceeding which, although immaterial
itself, is representative of, or one of, a group which in the aggregate is
material.
None.
II.
GENERAL DESCRIPTION OF THE TRUST AND
SECURITIES OF THE TRUST
GENERAL INFORMATION CONCERNING THE SECURITIES OF THE TRUST AND THE RIGHTS
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OF HOLDERS
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10. Furnish a brief statement with respect to the following matters for each
class or series of securities issued by the trust:
(a) Whether the securities are of the registered or bearer type.
Registered, insofar as the Policies are owned by the person named in
the Policy as the Policy owner, and records are maintained by or on
behalf of Chubb Life concerning the Policy owner.
(b) Whether the securities are of the cumulative or distributive type.
Cumulative, insofar as earnings in Separate Account C are reflected in
Policy benefits and are not distributed.
(c) The rights of security holders with respect to withdrawal or
redemption.
See "SUMMARY", "Policy Free Look", and "Surrender Privileges" in the
Chubb Heritage Prospectus contained in Exhibit D and in the Chubb
Advisor
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Prospectus contained in Exhibit E, incorporate herein by reference.
(d) The rights of security holders with respect to conversion, transfer,
partial redemption, and similar matters.
See "SUMMARY", "Transfers", "Telephone Transfers, Loans and
Reallocations", "Optional Insurance Benefits" and "Surrender
Privileges" in the Chubb Heritage Prospectus contained in Exhibit D
and in the Chubb Advisor Prospectus contained in Exhibit E,
incorporated herein by reference.
(e) If the trust is the issuer of periodic payment plan certificates, the
substance of the provisions of any indenture or agreement with respect
to lapses or defaults by security holders in making principal
payments, and with respect to reinstatement.
See "Policy Lapse" and "Reinstatement" in the Chubb Heritage
Prospectus contained in Exhibit D and in the Chubb Advisor Prospectus
contained in Exhibit E, incorporated herein by reference.
(f) The substance of the provisions of any indenture or agreement with
respect to voting rights, together with the names of any persons other
than security holders given the right to exercise voting rights
pertaining to the trust's securities or the underlying securities and
the relationship of such persons to the trust.
See "Voting Rights" in the Chubb Heritage Prospectus contained in
Exhibit D and in the Chubb Advisor Prospectus contained in Exhibit E,
"CAPITAL SHARES" in the Chubb Series Trust Prospectus in Exhibit F,
"CAPITAL STOCK" in the Chubb America Fund, Inc. Prospectus in Exhibit
G, incorporated herein by reference.
(g) Whether security holders must be given notice of any change in:
(1) the composition of the assets of the trust.
Heritage Policies
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See "Additions, Deletions or Substitutions of Investments" in the
Prospectus in Exhibit D, incorporated herein by reference. Except to
the extent described in the Prospectus, no changes in the terms and
conditions of the Policies can be made without notice to and/or
consent of Policy owners.
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As described in the response to other items of this form, however, the
Policies permit Chubb Life to exercise discretion in changing certain
fees and charges, restricting certain Policy owner rights and taking
certain other actions.
Advisor Policies
----------------
See "Additions, Deletions or Substitutions of Investments" in the
Prospectus in Exhibit E, incorporated herein by reference. Except to
the extent described in the Prospectus, no changes in the terms and
conditions of the Policies can be made without notice to and/or
consent of Policy owners. As described in the response to other items
of this form, however, the Policies permit Chubb Life to exercise
discretion in changing certain fees and charges, restricting certain
Policy owner rights and taking certain other actions.
(2) the terms and conditions of the securities issued by the trust.
See (g)(1), above, which is incorporated herein by reference.
(3) the provisions of any indenture or agreement of the trust.
No notice to or consent of Policy owners is required in connection
with any change in the provisions of the resolutions of the Executive
Committee of the Chubb Life Board of Directors pursuant to which
Separate Account C was established and the Policies w ill be issued.
(4) the identity of the depositor, trustee or custodian.
There is no requirement for notice to, or consent of, Policy owners
with respect to any change in the identity of Separate Account C's
depositor.
(h) Whether the consent of the security holders is required in order for
action to be taken concerning any change in:
(1) the composition of the assets of the trust.
See (g)(1), above, which is incorporated herein by reference.
(2) the terms and conditions of the securities issued by the trust.
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See (g)(3), above, which is incorporated herein by reference.
(3) the provisions of any indenture or agreement of the trust.
See (g)(1), above, which is incorporated herein
by reference.
(4) the identity of the depositor, trustee or custodian.
See (g)(4), above, which is incorporated herein
by reference.
(i) Any other principal feature of the securities issued by the trust or
any other principal right, privilege or obligation not covered by
subdivisions (a) to (g) or by any other item in this form.
See "CHUBB SEPARATE ACCOUNT C", "General", "Payment of Premiums",
Guaranteed Minimum Death Benefit Premiums", "Premium Limitations" and
"Allocation of Premiums" under "THE POLICIES", AND "FEDERAL TAX
MATTERS" in the Chubb Heritage Prospectus contained in Exhibit D and in
the Chubb Advisor Prospectus contained in Exhibit E, incorporated
herein by reference.
INFORMATION CONCERNING THE SECURITIES
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UNDERLYING THE TRUST'S SECURITIES
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11. Describe briefly the kind or type of securities comprising the unit of
specified securities in which security holders have an interest.
The Policy owner will not be the owner of the securities held in Separate
Account C, although the value of those securities will be used to calculate
Policy benefits.
Separate Account C will own only shares of registered, open-end management
investment companies, described in Item 12 below. Such shares will be held
in Separate Account C in accordance with New Hampshire insurance law, which
governs the operation of separate accounts of New Hampshire insurance
companies.
12. If the trust is the issuer of periodic payment plan certificates and if any
underlying securities were issued by another investment company, furnish
the following information for each such company:
(a) Name of company.
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Chubb Series Trust.
Chubb America Fund, Inc.
(b) Name and principal business address of depositor.
Not applicable.
(c) Name and principal business address of trustee or custodian.
The custodian for Chubb Series Trust is:
Morgan Guaranty Trust Company of New York
9 West 57th Street
New York, New York 10019
The custodian for Chubb America Fund, Inc. is:
Citibank, N.A.
111 Wall Street
New York, New York 10043
(d) Name and principal business address of principal underwriter.
The principal underwriter for Chubb Series Trust and Chubb America
Fund, Inc. is:
Chubb Securities Corporation
One Granite Place
Concord, New Hampshire 03301
(e) The period during which the securities of such company have been the
underlying securities.
Underlying shares of Chubb Series Trust were first issued to Separate
Account C on January 1995.
Underlying shares of Chubb America Fund, Inc. have not yet been issued
to Separate Account C.
INFORMATION CONCERNING LOADS, FEES, CHARGES AND EXPENSES
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13. (a) Furnish the following information with respect to each load, fee,
expense or charge to which (1) principal payments, (2) underlying
securities, (3) distributions, (4) cumulated or reinvested distributions or
income, and (5) redeemed or liquidated assets of the trust's securities are
subject:
(A) the nature of such load, fee, expense, or charge;
(B) the amount thereof;
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(C) the name of the person to whom such amounts are paid and his
relationship to the trust;
(D) the nature of the services performed by such person in consideration
for such loan, fee, expense or charge.
For sub-paragraphs (A) to (D) of this sub-item, see "SUMMARY", and
"CHARGES AND DEDUCTIONS" and "Optional Insurance Benefits" in the
Chubb Heritage Prospectus contained in Exhibit D and in the Chubb
Advisor Prospectus contained in Exhibit E, incorporated herein by
reference. Reference is also made to "MANAGEMENT OF THE TRUST AND
THE PORTFOLIOS" in the Chubb Series Trust Prospectus in Exhibit F,
and "MANAGEMENT OF THE FUND" in Exhibit G, incorporated herein by
reference.
(b) For each installment payment type of periodic payment plan certificate
of the trust, furnish the following information with respect to sales
load and other deductions.
Not applicable. The Policies are life insurance policies and do not
operate as the usual periodic payment plan. But see the provisions
of the Prospectuses in Exhibit D and Exhibit E mentioned in answer
to Item 13 (a), above, particularly under "CHARGES AND DEDUCTIONS",
incorporated herein by reference.
(c) State the amount of total deductions as a percentage of the net amount
invested for each type of security issued by the trust. State each
different sales charge available as a percentage of the public
offering price and as a percentage of the net amount invested. List
any special purchase plans or methods established by rule or exemptive
order that reflect scheduled variations in, or elimination of, the
sales load; and identify each class of individuals or transactions to
which such plans apply.
See (a) and (b) above, which are incorporated herein by reference.
The Prospectuses incorporated by reference from Exhibit D and
Exhibit E make provision for reduced sales charges for certain
eligible purchasers in accordance with criteria set forth in the
Prospectus. See "DISTRIBUTION OF THE POLICY".
(d) Explain fully the reasons for any difference in the price at which
securities are offered generally to the public, and the price at which
securities are
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offered for any class of transactions to any class or group of
individuals, including officers, directors, or employees of the
depositor, trustee, custodian or principal underwriter.
For a description of the different insurance rate classes, see
"General" under "THE POLICIES", "Monthly Deduction" under "CHARGES
AND DEDUCTIONS" and "Group of Sponsored Arrangements" under
"DISTRIBUTION OF THE POLICY" in the Chubb Heritage Prospectus
contained in Exhibit D and in the Chubb Advisor Prospectus contained
in Exhibit E, incorporated herein by reference.
(e) Furnish a brief description of any loads, fees, expenses or charges
not covered in Item 13(a) which may be paid by security holders in
connection with the trust or its securities.
None.
(f) State whether the depositor, principal underwriter, custodian or
trustee, or any affiliated person of the foregoing may receive profits
or other benefits not included in answer to Item 13(a) or 13(b)
through the sale or purchase of the trust's securities or interests in
such securities, or underlying securities or interests in underlying
securities, and describe fully the nature and extent of such profits
or benefits.
None.
(g) State the percentage that the aggregate annual charges and deductions
for maintenance and other expenses of the trust bear to the dividend
and interest income from the trust property during the period covered
by the financial statements filed herewith.
Not applicable because Separate Account C commenced operations in
January 1995 and financial statements have not yet been prepared.
INFORMATION CONCERNING THE OPERATIONS OF THE TRUST
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14. Describe the procedure with respect to applications (if any) and the
issuance and authentication of the trust's securities, and state the
substance of the provisions of any indenture or agreement pertaining
thereto.
See "SUMMARY", "General", and "Payment of Premiums" under "THE
POLICIES", in the Chubb Heritage Prospectus contained in Exhibit D and
in the Chubb
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Advisor Prospectus contained in Exhibit E, incorporated herein by
reference.
15. Describe the procedure with respect to the receipt of payments from
purchasers of the trust's securities and the handling of the proceeds
thereof, and state the substance of the provisions of any indenture or
agreement pertaining thereto.
Premiums must be paid to Chubb Life at its home office or through an
authorized agent of Chubb Life for forwarding to Chubb Life's home
office. The initial premium may be wired to Chubb Life's bank upon
notification that the application has been approved by Chubb Life.
Subsequent premiums may also be wired to Chubb Life's bank. In
addition, Chubb Life has administrative procedures whereby premium
payments in response to billing notices are sent directly to Chubb
Life's bank. See "Payment of Premiums" under "THE POLICIES" in the
Chubb Heritage Prospectus contained in Exhibit D and in the Chubb
Advisor Prospectus contained in Exhibit E, incorporated herein by
reference. Also see Item 14, which is incorporated herein by reference.
16. Describe the procedure with respect to the acquisition of underlying
securities and the disposition thereof, and state the substance of the
provisions of any indenture or agreement pertaining thereto.
Amounts invested in Separate Account C are promptly invested in the
underlying mutual funds. See "CHUBB SEPARATE ACCOUNT C" and "CHUBB
SERIES TRUST" in the Chubb Heritage Prospectus in Exhibit D and "CHUBB
SEPARATE ACCOUNT C" and "THE FUNDS" in Chubb Advisor Prospectus in
Exhibit E, incorporated herein by reference.
17. (a) Describe the procedure with respect to withdrawal or redemption by
security holders.
The rights of withdrawal or redemption are referred to in Items 10(c)
and 10(d) above, which are incorporated herein by reference.
(b) Furnish the names of any persons who may redeem or repurchase, or are
required to redeem or repurchase, the trust's securities or underlying
securities from security holders, and the substance of the provisions of
any indenture or agreement pertaining thereto.
See Items 10(c), (d), and (e) and 17(a), which are incorporated herein
by reference.
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(c) Indicate whether repurchased or redeemed securities will be cancelled
or may be resold.
Not applicable. Separate Account assets are used to support benefits
and amounts payable under a Policy and there is no limit on the
amount of Separate Account interests that may be sold.
18. (a) Describe the procedure with respect to the receipt, custody and
disposition of the income and other distributable funds of the trust
and state the substance of the provisions of any indenture or
agreement pertaining thereto.
See "CHUBB SEPARATE ACCOUNT C" in the Chubb Heritage Prospectus
contained in Exhibit D and in the Chubb Advisor Prospectus contained
in Exhibit E, incorporated herein by reference.
(b) Describe the procedure, if any, with respect to the reinvestment of
distributions to security holders and state the substance of the
provisions of any indenture or agreement pertaining thereto.
See "CHUBB SEPARATE ACCOUNT C" in the Chubb Heritage Prospectus
contained in Exhibit D and in the Chubb Advisor Prospectus contained
in Exhibit E, "TAXES AND DIVIDENDS" in the Chubb Series Trust
Prospectus in Exhibit F and the Chubb America Fund, Inc. Prospectus
in Exhibit G, incorporated herein by reference.
(c) If any reserves or special funds are created out of income or
principal, state with respect to each such reserve or fund the purpose
and ultimate disposition thereof, and describe the manner of handling
of same.
The assets in Separate Account C attributable to the Policies
constitute a reserve for the payment of benefits under the Policies
under state insurance law. Although these reserves support the
Policies, Policyowners have no ownership interest in the reserves.
Any excess reserves will be for the benefit of Chubb Life. The
general assets of Chubb Life are also available to satisfy Chubb
Life's obligations under the Policies.
(d) Submit a schedule showing the periodic and special distributions which
have been made to security holders during the three years covered by
the financial statements filed herewith. State for each such
distribution the aggregate amount and amount per share. If
distributions from sources other than current income have been made
identify each such
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other source and indicate whether such distribution represents the
return of principal payments to security holders. If payments other than
cash were made describe the nature thereof, the account charged and the
basis of determining the amount of such charge.
Not applicable because Separate Account C commenced operations in
January 1995 and financial statements have not yet been prepared.
19. Describe the procedure with respect to the keeping of records and accounts
of the trust, the making of reports and the furnishing of information to
security holders, and the substance of the Provisions of any indenture or
agreement pertaining thereto.
Chubb Life maintains appropriate records and accounts for its
Policyowners and accounting and financial records and accounts for
Separate Account C. See "Annual Report" and "Confirmation" under
"OTHER MATTERS" in the Chubb Heritage Prospectus contained in Exhibit
D and in the Chubb Advisor Prospectus contained in Exhibit E,
incorporated herein by reference.
20. State the substance of the provisions of any indenture or agreement
concerning the trust with respect to the following:
(a) Amendments to such indenture or agreement.
(b) The extension or termination of such indenture or agreement.
(c) The removal or resignation of the trustee or custodian, or the failure
of the trustee or custodian to perform its duties, obligations and
functions.
(d) The appointment of a successor trustee and the procedure if a
successor trustee is not appointed.
(e) The removal or resignation of the depositor, or the failure of the
depositor to perform its duties, obligations and functions.
(f) The appointment of a successor depositor and the procedure if a
successor depositor is not appointed.
As to (a) through (f), to the extent applicable to the Policies,
Items 10(g) and 10(h) above are incorporated herein by reference.
21. (a) State the substance of the provisions of any
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indenture or agreement with respect to loans to security holders.
See "Policy Loans" under "CASH VALUE BENEFITS" in the Chubb Heritage
Prospectus in Exhibit D and the Chubb Advisor Prospectus in Exhibit
E, incorporated herein by reference.
(b) Furnish a brief description of any procedure or arrangement by which
loans are made available to security holders by the depositor,
principal underwriter, trustee or custodian, or any affiliated person
of the foregoing. The following items should be covered:
(1) The name of each person who makes such agreements or arrangements
with security holders.
(2) The rate of interest payable on such loans.
(3) The period for which loans may be made.
(4) Costs or charges for default in repayment at maturity.
(5) Other material provisions of the agreement or arrangement.
As to (1) through (5), Item 21(a) above is incorporated herein by
reference.
(c) If such loans are made, furnish the aggregate amount of loans
outstanding at the end of the last fiscal year, the amount of interest
collected during the last fiscal year allocated to the depositor,
principal underwriter, trustee or custodian or affiliated person of
the foregoing and the aggregate amount of loans in default at the end
of the last fiscal year covered by financial statements filed
herewith.
Not applicable because Separate Account C commenced operations in
January 1995 and financial statements have not yet been prepared.
22. State the substance of the provisions of any indenture or agreement with
respect to limitations on the liabilities of the depositor, trustee or
custodian, or any other party to such indenture or agreement.
See "CHUBB SEPARATE ACCOUNT C" and "Telephone Transfers, Loans and
Reallocations" under "THE POLICIES" in the Chubb Heritage Prospectus
in Exhibit D and in the Chubb Advisor Prospectus in
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Exhibit E, incorporated herein by reference.
23. Describe any bonding arrangement for officers, directors, partners or
employees of the depositor or principal underwriter of the trust, including
the amount of coverage and the type of bond.
See "MANAGEMENT OF CHUBB LIFE" in the Chubb Heritage Prospectus in
Exhibit D and in the Chubb Advisor Prospectus in Exhibit E,
incorporated herein by reference.
24. State the substance of any other material provisions of any indenture or
agreement concerning the trust or its securities and a description of any
other material functions or duties of the depositor, trustee or custodian
not stated in item 10 or Items 14 to 23 inclusive.
None.
III.
ORGANIZATION, PERSONNEL AND AFFILIATED
PERSONS OF DEPOSITOR
ORGANIZATION AND OPERATIONS OF DEPOSITOR
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25. State the form of organization of the depositor of the trust, the name of
the state or other sovereign power under the laws of which the depositor
was organized and the date of organization.
See "CHUBB LIFE INSURANCE COMPANY OF AMERICA" in the Chubb Heritage
Prospectus contained in Exhibit D and in the Chubb Advisor Prospectus,
incorporated herein by reference.
26. (a) Furnish the following information with respect to all fees received by
the depositor of the trust in connection with the exercise of any
functions or duties concerning securities of the trust during the
period covered by the financial statements filed herewith: [Chart
omitted]
Not applicable because Separate Account C commenced operations in
January 1995 and financial statements have not yet been prepared.
(b) Furnish the following information with respect to any fee or any
participation in fees received by the depositor from any underlying
investment company or any affiliated person or investment adviser of
such company:
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(1) The nature of such fee or participation.
(2) The name of the person making payment.
(3) The nature of the services rendered in consideration for such fee
or participation.
(4) The aggregate amount received during the last fiscal year covered
by the financial statements filed herewith.
See Item 13(a), which is incorporated by reference. Chubb Life
has not yet received any such fees.
27. Describe the general character of the business engaged in by the depositor
including a statement as to any business other than that of depositor of
the trust. If the depositor acts or has acted in any capacity with respect
to any investment company or companies other than the trust, state the name
or names of such company or companies, their relationship, if any, to the
trust, and the nature of the depositor's activities therewith. If the
depositor has ceased to act in such named capacity, state the date of and
circumstances surrounding such cessation.
See "CHUBB LIFE INSURANCE COMPANY OF AMERICA" in the Prospectus
contained in Exhibit D, incorporated herein by reference. Chubb Life is
also the depositor of Chubb Separate Account A.
OFFICIALS AND AFFILIATED PERSONS OF DEPOSITOR
- --------- --- ---------- ------- -- ---------
28. (a) Furnish as at latest practicable date the following information with
respect to the depositor of the trust, with respect to each officer,
director, or partner of the depositor, and with respect to each
natural person directly or indirectly owning, controlling or holding
with power to vote 5% or more of the outstanding voting securities of
the depositor. [Chart omitted]
All of the voting securities of the depositor (Chubb Life) are owned
directly by The Chubb Corporation. See "CHUBB LIFE INSURANCE COMPANY
OF AMERICA" in the Prospectus contained in Exhibit D, incorporated
herein by reference.
None of the officers and directors of the depositor currently own
Policies.
(b) Furnish a brief statement of the business experience
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during the last five years of each officer, director or partner of the
depositor.
See "MANAGEMENT OF CHUBB LIFE" in the Prospectus contained in Exhibit
D, incorporated herein by reference.
COMPANIES OWNING SECURITIES OF DEPOSITOR
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29. Furnish as at latest practicable date the following information with
respect to each company which directly or indirectly owns, controls or
holds with power to vote 5% or more of the outstanding voting securities of
the depositor.
See Item 28(a) above, which is incorporated herein by reference.
CONTROLLING PERSONS
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30. Furnish as at latest practicable date the following information with
respect to any person, other than those covered by Items 28, 29, and 42 who
directly or indirectly controls the depositor. [Chart omitted]
None.
COMPENSATION OF OFFICERS AND DIRECTORS OF DEPOSITOR
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COMPENSATION OF OFFICERS OF DEPOSITOR
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31. Furnish the following information with respect to the remuneration for
services paid by the depositor during the last fiscal year covered by
financial statements filed herewith: [Chart omitted]
(a) directly to each of the officers or partners of the depositor
directly receiving the three highest amounts of remuneration:
(b) directly to all officers or partners of the depositor as a group
exclusive of persons whose remuneration is included under Item 31(a),
stating separately the aggregate amount paid by the depositor itself
and the aggregate amount paid by all the subsidiaries;
(c) indirectly or through subsidiaries to each of the officers or partners
of the depositor.
In response to (a), (b) and (c), not applicable. No person affiliated
with the depositor receives additional remuneration for services
rendered with respect to Separate Account C.
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COMPENSATION OF DIRECTORS
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32. (a) Furnish the following information with respect to the remuneration for
services, exclusive of remuneration reported under Item 31, paid by
the depositor during the last fiscal year covered by financial
statements filed herewith: [Chart omitted]
Not applicable because Separate Account C commenced operations in
January 1995 and financial statements have not yet been prepared. See
also Item 31, which is incorporated herein by reference.
(b) Furnish the following information with respect to the remuneration for
services paid directly during the last fiscal year covered by
financial statements filed herewith to the following classes of
persons (exclusive of those persons covered by Item 33(a): (1) Sales
managers, branch managers, district managers and other persons
supervising the sale of registrant's securities; (2) Salesmen, sales
agents, canvassers and other persons making solicitations but not in
supervisory capacity; (3) Administrative and clerical employees; and
(4) Others (specify). If a person is employed in more than one
capacity, classify according to predominant type of work.
Not applicable because Separate Account C commenced operations in
January 1995 and financial statements have not yet been prepared. See
also Item 31, which is incorporated herein by reference.
COMPENSATION TO EMPLOYEES
- -------------------------
33. (a) Furnish the following information with respect to the aggregate amount
of remuneration for services of all employees of the depositor
(exclusive of persons whose remuneration is reported in Items 31 and
32) who received remuneration in excess of $10,000 during the last
fiscal year covered by financial statement filed herewith from the
depositor and any of its subsidiaries. [Chart omitted]
Not applicable because Separate Account C commenced operations in
January 1995 and financial statements have not yet been prepared. See
also Item 31, which is incorporated herein by reference.
(b) Furnish the following information with respect to the remuneration for
services paid directly during the last fiscal year covered by
financial statements filed herewith to the following classes of
persons (exclusive of those persons covered by Item 33(a): (1) Sales
managers, branch mangers, district managers
-18-
<PAGE>
and other persons supervising the sale of registrant's securities; (2)
Salesmen, sales agents, canvassers and other persons making
solicitations but not in supervisory capacity; (3) Administrative and
clerical employees; and (4) Others (specify). If a person is employed
in more than one capacity, classify according to predominant type of
work.
Not applicable because Separate Account C commenced operations in
January 1995 and financial statements have not yet been prepared. See
also Item 31, which is incorporated herein by reference.
COMPENSATION TO OTHER PERSONS
- -----------------------------
34. Furnish the following information with respect to the aggregate amount of
compensation for services paid any person (exclusive of persons whose
remuneration is reported in Item 31, 32, and 33), whose aggregate
compensation in connection with services rendered with respect to the trust
in all capacities exceeded $10,000 during the last fiscal year covered by
financial statements filed herewith from the depositor and any of its
subsidiaries. [Chart omitted]
Not applicable because Separate Account C commenced operations in
January 1995 and financial statements have not yet been prepared.
IV.
DISTRIBUTION AND REDEMPTION OF SECURITIES
DISTRIBUTION OF SECURITIES
- --------------------------
35. Furnish the names of the states in which sales of the trust's securities
(A) are currently being made, (B) are presently proposed to be made, and
(C) have been discontinued, indicating by appropriate letter the statutes
with respect to each state.
No sales of the Chubb Advisor Policies have as yet been made. Chubb
Life expects to sell the Policies in all of the States except New
York.
36. If sales of the trust's securities have at any time since January 1, 1936
been suspended for more than a month describe briefly the reasons for such
suspension.
Not applicable.
-19-
<PAGE>
37. (a) Furnish the following information with respect to each instance where
subsequent to January 1, 1937, any federal or state governmental
officer, agency, or regulatory body denied authority to distribute
securities of the trust, excluding a denial which was merely a
procedural step prior to any determination by such officer, etc. and
which denial was subsequently rescinded.
(1) Name of officer, agency or body
(2) Date of denial
(3) Brief statement of the reason given for denial.
As to (1) through (3), None.
(b) Furnish the following information with regard to each instance where,
subsequent to January 1, 1937, the authority to distribute securities
of the trust has been revoked by any federal or state governmental
officer, agency or regulatory body.
(1) Name of officer, agency or body
(2) Date of revocation
(3) Brief statement of the reason given for revocation.
As to (1) through (3), None.
38. (a) Furnish a general description of the method of distribution of
securities of the trust.
The Policies will be sold by appropriately licensed life insurance
agents of Chubb Life. See "DISTRIBUTION OF THE POLICY" in the Chubb
Heritage Prospectus in Exhibit D and in the Chubb Advisor Prospectus
in Exhibit E, incorporated herein by reference.
(b) State the substance of any current selling agreement between each
principal underwriter and the trust or the depositor, including a
statement as to the inception and termination dates of the agreement,
any renewal and termination provisions, and any assignment provisions.
See Item 38(a) above, which is incorporated herein by reference.
(c) State the substance of any current agreements or arrangements of each
principal underwriter with dealers, agents, salesmen, etc. with
respect to commissions and overriding commissions, territories,
franchises, qualifications and revocations. If the trust is the issuer
of periodic payment plan
-20-
<PAGE>
certificates, furnish schedules of commissions and the bases thereof.
In lieu of a statement concerning schedules of commissions, such
schedules of commissions may be filed as Exhibit A(3)(c).
See Item 38(a) which is incorporated herein by reference. A schedule
of commissions is filed as Exhibit A(3)(c), which is herein
incorporated by reference.
INFORMATION CONCERNING PRINCIPAL UNDERWRITER
- --------------------------------------------
39. (a) State the form of organization of each principal underwriter of
securities of the trust, the name of the state or other sovereign
power under the laws of which each underwriter was organized and the
date of organization.
See "DISTRIBUTION OF THE POLICY" in the Prospectus in Exhibit D,
which is incorporated herein by reference.
(b) State whether any principal underwriter currently distributing
securities of the trust is a member of the National Association of
Securities Dealers, Inc.
Chubb Securities Corporation, the principal underwriter of the
policies, is a member of the National Association of Securities
Dealers, Inc.
40. (a) Furnish the following information with respect to all fees received by
each principal underwriter of the trust from the sale of securities of
the trust and any other functions in connection therewith exercised by
such underwriter in such capacity or otherwise during the period
covered by the financial statements filed herewith. [Chart omitted]
Not applicable because Separate Account C commenced operations on
January ___, 1995 and financial statements have not yet been
prepared.
(b) Furnish the following information with respect to any fee or any
participation in fees received by each principal underwriter from any
underlying investment company or any affiliated person or investment
adviser of such company:
(1) The nature of such fee or participation.
(2) The name of the person making payment.
(3) The nature of the services rendered in consideration for such fee
or participation.
-21-
<PAGE>
(4) The aggregate amount received during the last fiscal year covered
by the financial statements filed herewith.
As to (1) to (4), Separate Account C has not yet commenced
operations. Also, see Items 13(a), which is incorporated herein
by reference.
41. (a) Describe the general character of the business engaged in by each
principal underwriter, including a statement as to any business other
than the distribution of securities of the trust. If a principal
underwriter acts or has acted in any capacity with respect to any
investment company or companies other than the trust, state the name
or names of such company or companies, their relationship, if any, to
the trust and the nature of such activities. If a principal
underwriter has ceased to act in such named capacity, state the date
of the circumstances surrounding such cessation.
See "DISTRIBUTION OF THE POLICY", in the Prospectus in Exhibit D,
incorporated herein by reference.
(b) Furnish as at latest practicable date the address of each branch
office of each principal underwriter currently selling securities of
the trust and furnish the name and residence address of the person in
charge of such office.
Not applicable because no Policies have yet been sold.
(c) Furnish the number of individual salesmen for each principal
underwriter through whom any of the securities of the trust were
distributed for the last fiscal year of the trust covered by the
financial statements filed herewith and furnish the aggregate amount
of compensation received by such salesmen in such year.
Not applicable because Separate Account C commenced operations on
January 1995 and financial statements have not yet been prepared.
42. Furnish as at latest practicable date the following information with
respect to each principal underwriter currently distributing securities of
the trust and with respect to each of the officers, directors or partners
of such underwriter: [Chart omitted]
Not applicable because no Policies are currently
-22-
<PAGE>
being distributed.
43. Furnish, for the last fiscal year covered by the financial statements filed
herewith, the amount of brokerage commissions received by any principal
underwriter who is a member of a national securities exchange and who is
currently distributing the securities of the trust or effecting
transactions for the trust in the portfolio securities of the trust.
Not applicable because Separate Account C commenced operations in
January 1995 and financial statements have not yet been prepared.
44. (a) Furnish the following information with respect to the method of
valuation used by the trust for purpose of determining the offering
price to the public of securities issued by the trust or the valuation
of shares or interests in the underlying securities acquired by the
holder of a periodic payment plan certificate:
(1) The source of quotations used to determine the value of portfolio
securities.
Shares of Chubb Series Trust and Chubb America Fund, Inc. are
valued at net asset value, as supplied to Chubb Life by the
funds.
(2) Whether opening, closing, bid, asked or any other price is used.
Not applicable.
(3) Whether price is as of the day of sale or as of any other time.
(4) A brief description of the methods used by registrant for
determining other assets and liabilities including accrual for
expenses and taxes (including taxes on unrealized appreciation).
(5) Other items which registrant adds to the net asset value in
computing offering price of its securities: [Chart omitted]
(6) Whether adjustments are made for fractions:
(i) before adding distributor's compensation (load); and
(ii) after adding distributor's compensation (load).
-23-
<PAGE>
As to (3) through (6), see "CHUBB SERIES TRUST", "General" and
"Payment of Premiums" under "THE POLICIES", "CHARGES AND
DEDUCTIONS", "CALCULATION OF ACCUMULATION VALUE", and "CASH VALUE
BENEFITS", in the Chubb Heritage Prospectus contained in Exhibit D
and "THE FUNDS", "General" and "Payment of Premiums" under "THE
POLICIES", "CHARGES AND DEDUCTIONS", "CALCULATION OF ACCUMULATION
VALUE", and "CASH VALUE BENEFITS", in the Chubb Advisor Prospectus
contained in Exhibit E, incorporated herein by reference.
(b) Furnish a specimen schedule showing the components of the offering
price of the trust's securities as at the latest practicable date. Such
schedule shall be in substantially the following form:
(Note: If registrant is an issuer of periodic payment plan
-----
certificates, furnish, in lieu of such schedule an appropriate,
comparable schedule showing the acquisition price of the
holders' interest in the underlying securities.)
1. Value of portfolio securities
2. Value of other assets
3. Total (1 plus 2)
4. Liabilities (include accrued expenses and taxes)
5. Value of net assets (3 minus 4)
6. Other charges
(a) odd lot premiums
(b) brokerage commissions
(c) fees for administration
(d) fees for custodian or trustee
(e) fees for registrar or transfer agent
(f) transfer taxes
(g) reserves
(h) others
(i) total, 6(a) through 6(h), inclusive
7. Adjusted value of net assets (5 plus 6(i))
8. Number of units outstanding
9. Net asset value per unit (four decimals)
(a) excluding other charges (5 divided by 8)
(b) including other charges (7 divided by 8)
-24-
<PAGE>
10. Adjustment of 9(b) for fractions
11. Adjusted net asset value per unit
12. Offering price (show four decimals) (If any sales load is charged,
indicate amount, and apply percentage load to 11 or other
applicable base, indicating base.)
13. Adjustment of 12 for fractions
14. Offering price
15. Accumulated undistributed income per unit (if not included in 3 and
9)
16. Adjusted price (14 plus 15)
17. Effective load per unit
(a) In dollars (16-[9(a) + 15])
(b) In percentage (17(a) of [9(a) + 15]) (If no sales load is
charged on underlying security add accumulated undistributed
income per unit to sub-item 11, to show adjusted offering
price. If any sub-items are inapplicable, answer "none.")
To the extent this paragraph is applicable to the Policies,
see (a) above, which is incorporated herein by reference.
(c) If there is any variation in the offering price of the trust's
securities to any person or classes of persons other than
underwriters, state the nature and amount of such variation and
indicate the person or classes of persons to whom such offering is
made.
See Item 44(a) above and Items 13(c) and (d) which are
incorporated herein by reference. The premium paid for each Policy
depends on factors such as sex, attained age, and risk class of
the insured and the amount of insurance coverage purchased.
45. Furnish the following information with respect to any suspension of the
redemption rights of the securities issued by the trust during the three
fiscal years covered by the financial statements filed herewith:
(a) by whose action redemption rights were suspended.
(b) the number of days' notice given to security holders
-25-
<PAGE>
prior to suspension of redemption rights.
(c) reason for suspension.
(d) period during which suspension was in effect.
Not applicable, since the sale of Policies has not yet commenced.
REDEMPTION VALUATION OF SECURITIES OF THE TRUST
- -----------------------------------------------
46. (a) Furnish the following information with respect to the method of
determining the redemption or withdrawal valuation of securities
issued by the trust:
(1) The source of quotations used to determine the value of portfolio
securities.
Item 44(a)(1) above is incorporated herein by reference.
(2) Whether opening, closing, bid, asked or any other price is used.
Not applicable.
(3) Whether price is as of the day of sale or as of any other time.
(4) A brief description of the methods used by registrant for
determining other assets and liabilities including accrual for
expenses and taxes (including taxes on unrealized appreciation).
(5) Other items which registrant deducts from the net asset value in
computing redemption value of its securities. [Chart omitted]
(6) Whether adjustments are made for fractions.
As to (3) through (6), the factors used to determine the
redemption or withdrawal valuation of securities of the
Policies are not the usual factors used for securities. But
see the provisions of the Prospectuses referred to in Item
44(a), which are incorporated herein by reference.
(b) Furnish a specimen schedule showing the components of the redemption
price to the holders of the trust's securities as at the latest
practicable date. Such schedule shall be in substantially the following
form:
-26-
<PAGE>
1. Value of portfolio securities
2. Value of other assets
3. Total (1 plus 2)
4. Liabilities (include accrued expenses and taxes)
5. Value of net assets (3 minus 4)
6. Other charges
(a) odd lot premiums
(b) brokerage commissions
(c) fees for administration
(d) fees for custodian or trustee
(e) fees for registrar or transfer agent
(f) transfer taxes
(g) reserves
(h) others
(i) total, 6(a) through 6(h), inclusive
7. Adjusted value of net assets (5 minus 6(i))
8. Number of units outstanding
9. Net asset value per unit (four decimals)
(a) excluding other charges (5 divided by 8)
(b) including other charges (7 divided by 8)
10. Adjustment of 9(b) for fractions
11. Adjusted net asset value per unit
12. Redemption charge
13. Adjusted redemption price
14. Accumulated undistributed income per unit (if not included in 3 and
9)
15. Actual redemption price (13 plus 14)
16. Effective redemption fee per unit
(a) in dollars (9(a) + 14) - 15)
(b) in percentage (16(a) of (9(a) + 14)) (If any sub-items are
inapplicable, answer "none".)
To the extent that this paragraph is applicable, see the
answers to Items 44(a) and
-27-
<PAGE>
46(a), which are incorporated herein by reference.
PURCHASE AND SALE OF INTERESTS IN UNDERLYING SECURITIES FROM AND TO SECURITY
- ----------------------------------------------------------------------------
HOLDERS
- -------
47. Furnish a statement as to the procedure with respect to the maintenance of
a position in the underlying securities or interests in the underlying
securities, the extent and nature thereof and the person who maintains such
a position. Include description of the procedure with respect to the
purchase of underlying securities or interests in the underlying securities
from security holders who exercise redemption or withdrawal rights and the
sale of such underlying securities and interests in the underlying
securities to other security holders.
None. There is no procedure for the purchase of underlying securities
or interests therein from Policyowners who exercise surrender rights.
State whether the method of valuation of such underlying securities or
interests in underlying securities differs from that set forth in Items 44
and 46. If any item of expenditure included in the determination of the
valuation is not or may not actually be incurred or expended, explain the
nature of such item and who may benefit from the transaction.
Not applicable.
V.
INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Furnish the following information as to each trustee or custodian of the
trust.
(a) Name and principal business address.
(b) Form of organization.
(c) State or other sovereign power under the laws of which the trustee or
custodian was organized.
(d) Name of governmental supervising or examining authority.
Not applicable. Separate Account C does not have a trustee or
custodian.
49. State the basis for payment of fees or expenses of the trustee or custodian
for services rendered with respect to the trust and its securities, and the
aggregate amount thereof for the last fiscal year. Indicate the person
-28-
<PAGE>
paying such fees or expenses. If any fees or expenses are prepaid, state
the unearned amount.
Not applicable. Separate Account C does not have a trustee or
custodian.
50. State whether the trustee or custodian or any other person has or may
create a lien on the assets of the trust; and if so, give full particulars,
outlining the substance of the provisions of any indenture or agreement
with respect thereto.
See "CHUBB SEPARATE ACCOUNT C" which is incorporated herein by
reference from the Chubb Heritage Prospectus in Exhibit D and from
the Chubb Advisor Prospectus in Exhibit E.
VI.
INFORMATION CONCERNING INSURANCE OF
HOLDERS OF SECURITIES
51. Furnish the following information with respect to insurance of holders of
securities:
(a) The name and address of the insurance company.
(b) The types of policies and whether individual or group
policies.
(c) The types of risks insured and excluded.
(d) The coverage of the policies.
(e) The beneficiaries of such policies and the uses to which the proceeds
of policies must be put.
(f) The terms and manner of cancellation and of reinstatement.
(g) The method of determining the amount of premiums to be paid by holders
of securities.
(h) The amount of aggregate premiums paid to the insurance company during
the last fiscal year.
(i) Whether any person other than the insurance company receives any part
of such premiums, the name of each such person and the amounts
involved, and the nature of the services rendered therefor.
(j) The substance of any other material provisions of any indenture or
agreement of the trust relating to insurance.
-29-
<PAGE>
As to (a) through (j), the "securities" issued by the trust are
interests in Separate Account C pursuant to the Policies and the
full particulars of the material insurance-related provisions of
the Policies are described in "THE POLICIES", "CHARGES AND
DEDUCTIONS", "POLICY BENEFITS AND RIGHTS", "CALCULATION OF
ACCUMULATION VALUE" and "CASH VALUE BENEFITS" and "OTHER MATTERS"
in the Chubb Heritage Prospectus in Exhibit D, incorporated herein
by reference.
VII.
POLICY OF REGISTRANT
52. (a) Furnish the substance of the provisions of any indenture or agreement
with respect to the conditions upon which and the method of selection
by which particular portfolio securities must or may be eliminated
from assets of the trust or must or may be replaced by other portfolio
securities. If an investment adviser or other person is to be employed
in connection with such selection, elimination or substitution, state
the name of such person, the nature of any affiliation to the
depositor, trustee or custodian, and any principal underwriter, and
the amount of remuneration to be received for such services. If any
particular person is not designated in the indenture or agreement,
describe briefly the method of selection of such person.
See "CHUBB SERIES TRUST" and "OTHER MATTERS - Additions, Deletions,
or Substitutions of Investments", in the Prospectus in Exhibit D,
incorporated herein by reference.
(b) Furnish the following information with respect to each transaction
involving the elimination of any underlying security during the period
covered by the financial statements filed herewith:
(1) Title of security.
(2) Date of elimination.
(3) Reasons for elimination.
(4) The use of the proceeds from the sale of the eliminated security.
(5) Title of security substituted, if any.
-30-
<PAGE>
(6) Whether depositor, principal underwriter, trustee or custodian or
any affiliated person of the foregoing were involved in the
transaction.
(7) Compensation or remuneration received by each such person directly
or indirectly as a result of the transaction.
As to (1) through (7), not applicable, as no Policies have been
sold.
(c) Describe the policy of the trust with respect to the substitution and
elimination of the underlying securities of the trust with respect to:
(1) the grounds for elimination and substitution;
(2) the type of securities which may be substituted for any underlying
security:
(3) whether the acquisition of such substituted security or securities
would constitute the concentration of investment in a particular
industry or group of industries or would conform to a policy of
concentration of investment in a particular industry or group of
industries;
(4) whether such substituted securities may be the securities of
another investment company; and
(5) the substance of the provisions of any indenture or agreement
which authorize or restrict the policy of the registrant in this
regard. If this subject has been entirely covered in Item 52(b),
state "not applicable".)
As to (1) through (5), Item 52(a) above is incorporated herein
by reference.
(d) Furnish a description of any policy (exclusive of policies covered by
Paragraphs (a) and (b) herein) of the trust which is deemed a matter
of fundamental policy and which is elected to be treated as such.
None.
REGULATED INVESTMENT COMPANY
- ----------------------------
53. (a) State the taxable status of the trust.
See "FEDERAL TAX MATTERS" in the Prospectus in Exhibit D,
incorporated herein by reference.
(b) State whether the trust qualified for the last
-31-
<PAGE>
taxable year as a regulated investment company as defined in Section
851 of the Internal Revenue Code of 1954, and state its present
intention with respect to such qualifications during the current
taxable year.
Not applicable because Separate Account C is not a separate taxable
entity.
VIII.
FINANCIAL AND STATISTICAL INFORMATION
54. If the trust is not the issuer of Periodic payment plan certificates
furnish the following information with respect to each class or series of
its securities: [Chart omitted]
Not applicable. Separate Account C is deemed to be the issuer of
periodic payment plan certificates.
55. If the trust is the issuer of periodic payment plan certificates, a
transcript of a hypothetical account shall be filed in approximately the
following form on the basis of the certificate calling for the smallest
amount of payments. The schedule shall cover a certificate of the type
currently being sold assuming that such certificate had been sold at a date
approximately ten years prior to the date of registration or at the
approximate date of organization of the trust. [Chart omitted].
Not applicable, because no Policies have been sold at a date
approximately ten years prior to the date of registration or at the
approximate date of organization of Separate Account C.
56. If the trust is the issuer of periodic payment plan certificates, furnish
by years for the period covered by the financial statements filed herewith
in respect of certificates sold during such period, the following
information for each fully paid type and each installment payment type of
periodic payment plan certificate currently being issued by the trust.
[Chart omitted]
Not applicable because Separate Account C does not yet have a
significant operating history and no financial statements are filed
herewith.
57. If the trust is the issuer of periodic payment plan certificates, furnish
by years for the period covered by the financial statements filed herewith
the following information for each installment payment plan certificate
-32-
<PAGE>
currently being issued by the trust. [Chart omitted]
Not applicable because Separate Account C does not yet have a
significant operating history and no financial statements are filed
herewith.
58. If the trust is the issuer of periodic payment plan certificates furnish
the following information for each installment payment type of periodic
payment plan certificate outstanding as at the latest practicable date.
[Chart omitted]
Not applicable because Separate Account C does not yet have a
significant operating history and no financial statements are filed
herewith.
59. Financial statements shall be filed in accordance with the instructions
given below. [Instructions omitted]
FINANCIAL STATEMENTS OF THE TRUST
- ---------------------------------
Not applicable because Separate Account C does not yet have a
significant operating history and no financial statements are filed
herewith.
FINANCIAL STATEMENTS OF THE DEPOSITOR
- -------------------------------------
The financial statements of Chubb Life should be considered only as bearing
upon the ability of Chubb Life to meet its obligations under the Policies.
They should not be considered as bearing upon the investment performance of
the assets held in Separate Account C. The financial statements and other
text contained under "FINANCIAL STATEMENTS" in the Prospectus included in
Exhibit D are incorporated herein by reference.
-33-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940 the
depositor of the registrant has caused this amendment to the registration
statement to be duly signed on behalf of the registrant in the City of Concord
and State of New Hampshire on the ____ day of October, 1995.
CHUBB SEPARATE ACCOUNT C
[SEAL] By: CHUBB LIFE INSURANCE COMPANY
OF AMERICA
By: /s/THERESA M. STONE
---------------------------------
Theresa M. Stone
President and CEO
Title: ------------------------------
ATTEST:
/s/CHARLES C. CORNELIO
- ----------------------------
Charles C. Cornelio
<PAGE>
EXHIBITS
--------
A. 1. Resolution of Chubb Life Insurance Company of America
establishing Separate Account C.*
2. Not applicable.
3. (a) Form of Distribution Agreement among Chubb Life Insurance Company of
America, Chubb Separate Account C and Chubb Securities Corporation.*
(b) (i) Specimen Selling Agreement between Chubb Securities
Corporation and Selling Broker-Dealers.*
(ii) Specimen District Manager's Agreement of Chubb Securities
Corporation.*
(iii) Specimen Registered Representative's Agreement of Chubb
Securities Corporation.*
(c) Specimen Schedule of Sales Commissions (filed contemporaneously
herewith).
4. Not applicable.
5. Specimen Variable Life Insurance Policy form (to be filed by
amendment).
6. (a) Amended and Restated Charter of Chubb Life Insurance Company of
America.*
(b) By-laws of Chubb Life Insurance Company of America.*
7. Not applicable.
8. Not applicable.
9. Not applicable.
10. Form of Variable Life Insurance Application form (to be filed by
amendment).
B. Not Applicable.
C. Not Applicable.
D. Prospectus included in Post-Effective Amendment No. 2 to Registration
Statement on Form S-6 of Chubb Separate Account C (File No. 33-72830) filed
on February 28, 1996.
E. Prospectus included in the Registration Statement on Form S-6 of Chubb
Separate Account C (File No. 33- ) filed contemporaneously herewith.
F. Prospectus included in Post-Effective Amendment No. 2 to the Registration
Statement on Form N-1A of Chubb Series Trust (File No. 33-72834) filed on
August 4, 1995.
G. Prospectus included in Post-Effective Amendment No. 15 to the Registration
Statement on Form N-1A of Chubb America Fund, Inc. (File No. 2-94479) filed
on November 9, 1995.
__________________________
* Incorporated by reference to Registrant's Post-Effective Amendment No. 2 to
the Registration Statement on Form S-6, filed on February 28, 1996, File No.
33-72830.
<PAGE>
Exhibit A.(3)(c)
SCHEDULE OF SALES COMMISSIONS
-----------------------------
Selling Broker-Dealers
----------------------
Commissions are 3% of all premiums paid.
Writing Agents of Chubb Securities Corporation
----------------------------------------------
Commissions are 2% of all premiums paid.
District Managers of Chubb Securities Corporation
-------------------------------------------------
Commissions are 1% of all premiums paid.
<PAGE>
Chubb Life Insurance Company of America
One Granite Place
Concord, New Hampshire 03301
(603) 226-5000
This Prospectus describes two forms of a flexible premium variable
life insurance policy issued by Chubb Life Insurance Company of America ("Chubb
Life"): an individual flexible premium variable life insurance policy form
("Chubb Heritage I") and a survivorship flexible premium variable life
insurance policy form ("Chubb Heritage II") (collectively the "Policy" or
"Policies"). The Policies are designed to provide a Policyowner with both
lifetime insurance protection and maximum flexibility in connection with premium
payments and death benefits, together with the opportunity to participate in the
investment experience of Chubb Separate Account C ("Separate Account C").
Although each Policy contains a schedule of intended premium payments ("Planned
Periodic Premiums"), and an intended frequency of premium payments ("Premium
Frequency"), a Policyowner may, subject to certain restrictions, vary the
frequency and amount of the premium payments and increase or decrease the level
of life insurance benefits payable under the Policy. The flexibility allows a
Policyowner to provide for changing insurance needs within the framework of a
single insurance policy. Unlike traditional insurance protection providing fixed
benefits, the Policyowner participates in the investment experience of Separate
Account C. Accumulation Value under the Policies will increase with positive
investment experience and decrease with negative investment experience.
Accumulation Value in Separate Account C is not guaranteed and could decline to
zero.
Chubb Heritage I provides life insurance coverage on one Insured, with
the Death Benefit payable at the Insured's death. Chubb Heritage II provides
life insurance coverage on two Insureds, with the Death Benefit payable upon the
death of the last surviving Insured. If Net Premiums are allocated to Separate
Account C, the amount of the Death Benefit may reflect the investment experience
of the chosen Divisions, as well as the frequency and amount of premiums, any
withdrawals of Cash Value ("withdrawal"), and the charges assessed in
connection with the Policy. As long as the Policy remains in force, the Death
Benefit will not be less than the current Specified Amount of the Policy,
reduced by any outstanding indebtedness and any due and unpaid fees and charges.
The minimum initial Specified Amount is $500,000 for Chubb Heritage I and
$2,000,000 for Chubb Heritage II. After a withdrawal, the Specified Amount may
not be reduced to less than $250,000 for Chubb Heritage I and $500,000 for Chubb
Heritage II Policy.
The Death Benefit is payable under two options. The Policyowner will
make two elections to determine the Death Benefit under the Policy. First, the
Policyowner will choose one of two Death Benefit options offered under the
Policy. Second, the Policyowner will choose the Death Benefit qualification
test, which is the method for qualifying the Policy as a life insurance contract
for purposes of Federal tax law. In general, under Death Benefit Option I, the
Death Benefit payable under the Policy is equal to the current Specified Amount;
under Death Benefit Option II, the Death Benefit equals the current Specified
Amount plus the Accumulation Value of the Policy on the date of death. The
Policy will also increase the Death Benefit if necessary to ensure that the
Policy will continue to qualify as life insurance under Federal tax laws. The
Policyowner may not change the Death Benefit qualification test once selected
but may, subject to certain restrictions, change from one death benefit option
to the other after the Policy has been issued.
The initial premium payment must be sufficient to keep the Policy in
force for at least three months. If a Policyowner chooses the Guaranteed Death
Benefit Rider, the Death Benefit will be guaranteed to never be less than the
Specified Amount, provided that a cumulative minimum premium requirement is met.
No premium payment may be less than $500.
The Policy will remain in force so long as Cash Value exceeds
indebtedness and Cash Value less indebtedness is sufficient to pay certain
monthly charges imposed in connection with the Policy. The Cash Value equals the
Accumulation Value less any Surrender Charge. Accumulation Value in Separate
Account C will reflect the investment experience of the chosen Divisions, the
amount and frequency of premium payments, any withdrawals, and charges imposed
in connection with the Policy. Adherence to the schedule of Planned Periodic
Premiums will not assure the Policy will remain in force. The Policyowner bears
the entire investment risk for all amounts allocated to Separate Account C; no
minimum Accumulation Value is guaranteed and the Accumulation Value could
decline to zero. So long as Cash Value exceeds indebtedness and subject to
certain conditions described in this Prospectus, a Policyowner may obtain policy
loans at any time after the first policy anniversary and may make withdrawals at
any time. Both withdrawals and policy loans must be made prior to the Policy's
Maturity Date.
The Policyowner may allocate Net Premiums to one or more of the
Divisions or to Chubb Life's General Account on the Allocation Date. Each
Division will invest solely in a corresponding portfolio (a "Portfolio") of
Chubb Series Trust (the "Trust"). Prior to the Allocation Date the Net
Premiums paid will be deposited in Chubb Life's General Account. There is a
"free look" period during which the Policyowner may cancel the Policy. If the
Policyowner elects during this "free look" period
<PAGE>
to cancel the Policy, Chubb Life will reimburse, within seven days from the date
the Policy is surrendered to Chubb Life, the full amount of premium paid. The
accompanying Prospectus for the Trust and the Statement of Additional
Information, available on request, describe the investment objectives and risks
of the five Portfolios of the Trust. The Policies described in this Prospectus
are not available in all states.
Chubb Life believes the Policy will in general receive favorable tax
treatment under the Internal Revenue Code of 1986 ("the Code"). However,
because there are issues as to which the law is developing or changing, there
can be no guarantees. Information in this Prospectus is not intended as tax
advice and Chubb Life recommends that prospective purchasers rely only on the
advice of a qualified tax adviser. Prospective purchasers of this Policy are
advised that replacement of existing insurance coverage may not be financially
advantageous and should consult with their financial advisers with respect to
the Policy. It may also not be advantageous to purchase this Policy if the
prospective purchaser already owns a flexible premium variable life insurance
policy.
This Prospectus generally describes only the portion of the Policy
involving Separate Account C. For a brief summary of Chubb Life's General
Account, see "THE GENERAL ACCOUNT."
This Prospectus Is Valid Only If Accompanied Or
Preceded By A Current Prospectus For
Chubb Series Trust
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES DIVISION, NOR HAS THE COMMISSION OR
ANY STATE SECURITIES DIVISION, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Please Read This Prospectus Carefully and Retain It For Future Reference.
The Date of This Prospectus is May 1, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
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<S> <C>
DEFINITIONS....................................................... 3
SUMMARY........................................................... 4
CHUBB LIFE INSURANCE COMPANY OF
AMERICA.......................................................... 9
CHUBB SEPARATE ACCOUNT C.......................................... 9
Divisions..................................................... 9
CHUBB SERIES TRUST................................................ 9
THE POLICIES...................................................... 11
General....................................................... 11
Payment of Premiums........................................... 11
Guaranteed Death Benefit Premiums............................. 11
Premium Limitations........................................... 11
Allocation of Premiums........................................ 12
Transfers..................................................... 12
Telephone Transfers, Loans and
Reallocations............................................... 13
Policy Lapse.................................................. 14
Reinstatement................................................. 14
Policy "Free Look"............................................ 14
CHARGES AND DEDUCTIONS............................................ 14
Premium Charges............................................... 14
</TABLE>
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<TABLE>
<S> <C>
Monthly Deduction............................................... 15
Risk Charge..................................................... 16
Surrender Charge................................................ 16
Administrative Fees............................................. 16
Other Charges................................................... 16
POLICY BENEFITS AND RIGHTS.......................................... 16
Death Benefits.................................................. 16
Guaranteed Death Benefit........................................ 18
Combined Requests............................................... 18
Maturity of the Policy.......................................... 18
Optional Insurance Benefits..................................... 18
Settlement Options.............................................. 19
CALCULATION OF ACCUMULATION
VALUE........................................................... 19
Unit Values..................................................... 20
Net Investment Factor........................................... 20
CASH VALUE BENEFITS................................................. 21
Surrender Privileges............................................ 21
Policy Loans.................................................... 21
<CAPTION>
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<S> <C>
OTHER MATTERS....................................................... 23
Voting Rights................................................... 23
Additions, Deletions or Substitutions of
Investments................................................... 23
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Annual Report................................................... 23
Confirmation.................................................... 23
Limitation on Right to Contest.................................. 24
Misstatements................................................... 24
Suicide......................................................... 24
Beneficiaries................................................... 24
Postponement of Payments........................................ 24
Assignment...................................................... 24
Illustration of Benefits and Values............................. 24
Non-Participating Policy........................................ 24
THE GENERAL ACCOUNT................................................. 25
General Description............................................. 25
General Account Accumulation Value.............................. 25
Determination of Charges........................................ 25
Premium Deposit Fund............................................ 25
DISTRIBUTION OF THE POLICY.......................................... 26
Group or Sponsored Arrangements................................. 26
MANAGEMENT OF CHUBB LIFE............................................ 27
Executive Officers and Directors of Chubb
Life.......................................................... 27
Executive Officers (Other Than Directors)....................... 28
STATE REGULATION OF CHUBB LIFE...................................... 29
</TABLE>
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<TABLE>
<S> <C>
FEDERAL TAX MATTERS................................................. 29
Tax Considerations.............................................. 29
Policy Proceeds................................................. 29
Charge for Chubb Life Income Taxes.............................. 32
EMPLOYEE BENEFIT PLANS.............................................. 32
LEGAL PROCEEDINGS................................................... 32
EXPERTS............................................................. 32
REGISTRATION STATEMENT.............................................. 32
FINANCIAL STATEMENTS................................................ 33
ILLUSTRATIONS.......................................................A-1
</TABLE>
[THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION
IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. CHUBB LIFE DOES NOT AUTHORIZE
ANY INFORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS
PROSPECTUS OTHER THAN AS CONTAINED IN THIS PROSPECTUS, THE PROSPECTUS OF THE
TRUST OR THE STATEMENT OF ADDITIONAL INFORMATION OF THE TRUST.]
<PAGE>
DEFINITIONS
In addition to terms which are defined elsewhere in this Prospectus,
the following words and phrases shall have the indicated meanings:
Accumulation Value--The total amount that a Policy provides for
investment at any time plus the amount held as collateral for Policy Debt.
Age--The Insured's age at his or her nearest birthday.
Allocation Date--The date when the initial premium is placed in the
Divisions and the General Account in accordance with the Policyowner's
allocation instructions in the application. The Allocation Date is 20 days from
the date the Policy is issued.
Attained Age--The age of the Insured at the last policy anniversary.
Beneficiary--The person designated by the Policyowner in the
application to receive the Death Benefit proceeds. If changed, the Beneficiary
is as shown in the latest change filed with Chubb Life. If no Beneficiary
survives the Insured, the Policyowner or the Policyowner's estate will be the
Beneficiary. The interest of any Beneficiary is subject to that of any assignee.
Cash Value--The Accumulation Value less any applicable Surrender
Charge. This amount less the amount of Policy Debt is payable to the Policyowner
on the earlier of surrender of the Policy or the Maturity Date.
Date of Receipt--Any business day of Chubb Life prior to 4:00 P.M.
Eastern time, on which a notice or premium payment is received at Chubb Life's
service center or home office.
Death Benefit--The amount, less the amount of Policy Debt, which is
payable to the Beneficiary under the Policy upon the death of the Insured under
Chubb Heritage I and the death of the last surviving Insured under Chubb
Heritage II.
Division--A separate division of Separate Account C which invests
exclusively in the shares of a specified Portfolio of the Trust.
General Account--The assets of Chubb Life other than those allocated
to Separate Account C or any other separate account.
Insured(s)--The person(s) upon whose life the Policy is issued.
Issue Age--The Insured's age at his or her nearest birthday on the
Policy Date.
Joint Equal Age--On Chubb Heritage II, this will be calculated
pursuant to a formula which converts the specific age, gender and underwriting
classifications of the two Insureds into one age. The Joint Equal Age is used in
determining issue age limitations, minimum premiums and guaranteed death benefit
premiums.
Loan Value--Generally, 90% of a Policy's Cash Value on the date of a
loan.
Maturity Date--Unless otherwise specified, the Maturity Date will be
the policy anniversary nearest to the Insured's 100th birthday for Chubb
Heritage I and the younger Insured's 100th birthday for Chubb Heritage II.
Monthly Anniversary Date--The same day in each month as the Policy
Date.
Net Premium--The gross premium less a 2.5% state premium tax charge, a
1.25% Federal deferred acquisition cost tax charge and a 3% sales charge.
Owner (Policyowner)--The person or entity so designated in the
application or as subsequently changed.
Policy Date--The date set forth in the Policy, which is the date
requested by the Owner. If no date is requested, it is the date the Policy is
issued. The Policy Date is the date from which policy years, policy months, and
policy anniversaries will be determined. If the Policy Date should fall on the
29th, 30th, or 31st of a month, the Policy Date will be the 1st of the following
month.
Policy Debt--The sum of all unpaid policy loans and accrued interest
thereon.
Portfolio--A separate investment Portfolio of the Trust.
Proof of Death--One or more of the following:
(a) A copy of a certified death certificate.
(b) A copy of a certified decree of a court of competent jurisdiction
as to the finding of death.
(c) A written statement by a medical doctor who attended the Insured.
(d) Any other proof satisfactory to Chubb Life.
<PAGE>
Separate Account C--Chubb Separate Account C, a separate investment
account created by Chubb Life to receive and invest Net Premiums paid under the
Policy and other flexible premium variable life insurance policies offered by
Chubb Life.
Specified Amount--The face amount of the Policy which is the minimum
death benefit payable under the Policy.
Surrender Charge--A sales charge assessed only upon surrender or
withdrawal.
Trust--Chubb Series Trust, a series mutual fund.
Valuation Date--Each day, as of the close of regular trading on the
New York Stock Exchange, which is currently 4:00 P.M. Eastern time, or any other
days as may be required.
Valuation Period--The period between two successive Valuation Dates,
commencing at the close of regular trading on the New York Stock Exchange on
each Valuation Date and ending at the close of regular trading on the New York
Stock Exchange on the next succeeding Valuation Date.
<PAGE>
SUMMARY
The discussion in this Prospectus assumes that there is no policy loan
outstanding and that state variations will be covered by prospectus supplement
or policy endorsement, as appropriate. The terms under which the Policies are
issued may also vary from those described in this Prospectus based on particular
circumstances. The description of the Policies in this Prospectus is subject to
the terms of the Policy purchased by a Policyowner and any supplement or
endorsement to it. An applicant may review a copy of the Policy and any
supplement or endorsement to it on request.
What are the variable life Policies being offered?
This Prospectus describes two forms of a flexible premium variable
life insurance policy issued by Chubb Life Insurance Company of America ("Chubb
Life"). Chubb Heritage I provides life insurance coverage on one Insured, with
the Death Benefit payable upon the death of such Insured. Chubb Heritage II
provides life insurance coverage on two Insureds, with a Death Benefit payable
only when the last surviving Insured dies. The Policyowner may, subject to
certain limitations, make premium payments in any amount at any frequency. The
Policies are life insurance contracts with death benefits, cash values, and
other features traditionally associated with life insurance. They are called
"flexible premium" because, unlike many insurance contracts, there are no
fixed schedules for premium payments, although each Policyowner may establish a
schedule of premium payments ("Planned Periodic Premiums"). This flexibility
permits a Policyowner to provide for evolving insurance needs within a single
insurance product. The minimum initial Specified Amount is $500,000 for Chubb
Heritage I and $2,000,000 for Chubb Heritage II. A Policyowner may increase or
decrease coverage. Increasing coverage under the Policy, rather than purchasing
another policy, may save additional administrative costs. Increasing coverage
under the Policy or purchasing another policy may require new evidence of
insurability. Increasing or decreasing coverage may have certain tax
consequences. See "FEDERAL TAX MATTERS".
The Policies generally work as follows: a Policyowner periodically
pays a premium to Chubb Life. Chubb Life subtracts an amount for state premium
taxes, the Federal deferred acquisition cost tax charge and the sales charge
from each premium. Chubb Life then places the Net Premium into one or more of
the five Divisions and/or Chubb Life's General Account as directed by the
Policyowner. Each Division invests its assets in a corresponding Portfolio of
the Trust. During the year, Chubb Life takes charges from each Division and
credits or charges each Division with its respective investment experience. The
cost of insurance charge, which is deducted from each Policy's Accumulation
Value, varies monthly based on the sex, Issue Age, policy year, rating class of
the Insured(s), Specified Amount of the Policy, Death Benefit option and
applicable corridor percentage. A policyowner will incur a Surrender Charge for
a surrender or withdrawal during the first five policy years. See "CHARGES AND
DEDUCTIONS--Surrender Charge".
The Death Benefit is payable under two options. The Policyowner will
make two elections to determine the Death Benefit under the Policy. First, the
Policyowner will choose one of two Death Benefit options offered under the
Policy. Second, the Policyowner will choose the Death Benefit qualification
test, which is the method for qualifying the Policy as a life insurance contract
for purposes of Federal tax law. In general, under Death Benefit Option I, the
Death Benefit payable under the Policy is equal to the current Specified Amount;
under Death Benefit Option II, the Death Benefit is equal to the Specified
Amount plus the Accumulation Value of the Policy on the date of death. The
Policy will also increase the Death Benefit if necessary to ensure that the
Policy will continue to qualify as life insurance under Federal tax laws. The
Policyowner may not change the Death Benefit qualification test once selected
but may, subject to certain restrictions, change from Death Benefit Option I to
Option II, and vice versa, after the Policy has been issued. Prospective
Policyowners should be aware that there is no guarantee of Accumulation Value in
Separate Account C. See "POLICY BENEFITS AND RIGHTS--Death Benefits".
All persons insured must meet specified age limits and certain health
and other standards called "Underwriting Standards". The smoking status of the
Insureds is generally reflected in the cost of insurance rates. However, for
Chubb Heritage I, distinctions between smokers and nonsmokers are only made for
Insureds age 15 and over. Policies issued in certain jurisdictions will not
directly reflect the sexes of the Insureds in either the premium rates or the
charges and values under the Policy.
What is the amount of the Premiums?
Premiums are flexible and the Policyowner may choose the amount and
frequency of premium payments provided each premium is at least $500. Chubb Life
reserves the right to limit the amount of any increase in premium payment.
The first premium is due on the Policy Date. The amount of the first
premium must be sufficient to keep the policy in force for three months.
Premiums are paid in advance, generally one year at a time; however, Chubb Life
permits semi-annual, quarterly and monthly premium payments. Changes in Premium
Frequency and increases or decreases in the amount of Planned Periodic Premiums
may be made by the Policyowner. Chubb Life will notify Policyowners annually if
any premiums would cause their Policies to be deemed to be modified endowment
contracts and allow for a refund of the excess premium. See "FEDERAL TAX
MATTERS --Policy Proceeds".
Failure to pay premiums in accordance with the schedule of Planned
Periodic Premiums will not automatically cause the Policy to lapse. Unless the
Guaranteed Death Benefit Rider is in force and the conditions under the Rider
satisfied, it will lapse when the Cash Value less outstanding Policy Debt is
insufficient to pay the monthly deduction for certain charges ("monthly
deduction") and a grace period expires without a sufficient payment by the
Policyowner. Conversely, payment of premiums in accordance with the schedule of
Planned Periodic Premiums does not necessarily mean that the Policy will remain
in force. See "THE POLICIES--Policy Lapse".
The Guaranteed Death Benefit Rider guarantees that the Death Benefit
will never be less than the Specified Amount provided that a cumulative minimum
premium requirement is met.
What is Chubb Separate Account C?
Separate Account C is a separate account established by Chubb Life
pursuant to the insurance laws of the State
<PAGE>
of New Hampshire and organized as a registered unit investment trust under the
Investment Company Act of 1940 (the "1940 Act"). Such registration does not
involve any supervision by the Securities and Exchange Commission (the
"Commission") of the management or investment practices or policies of
Separate Account C. Separate Account C is presently comprised of five Divisions,
each of which buys shares at net asset value of the corresponding portfolio (a
"Portfolio") of Chubb Series Trust (the "Trust").
What is Chubb Series Trust?
The Trust is registered as an open-end diversified management company
under the 1940 Act. Its shares are offered only to the Divisions, whether now in
existence or to be established by Chubb Life. The Trust's shares may also be
offered to other separate accounts which may be established by Chubb Life or its
affiliated insurance companies to fund variable life insurance policies and
variable annuity contracts.
The Trust presently has five classes of shares, each representing a
Portfolio having a specific investment objective. The present Portfolios of the
Trust are the Resolute Treasury Money Market Portfolio, the Resolute Bond
Portfolio, the Resolute Equity Portfolio, the Resolute Small Company Portfolio
and the Resolute International Equity Portfolio.
The investment manager to the Trust is Chubb Investment Advisory
Corporation ("Chubb Investment Advisory"), a subsidiary of Chubb Life. Chubb
Investment receives fees from the Trust for providing investment management
services. The fees range from .40 percent to .80 percent of average daily net
assets of the Portfolios. Morgan Guaranty Trust Company of New York ("Morgan")
provides sub-investment advisory services to the Trust. Morgan receives an
annual percentage fee from Chubb Investment for its services which in no way
increases the costs borne by the Trust, Separate Account C or the Policyowner.
See "CHUBB SERIES TRUST".
What are the charges made by Chubb Life?
State Premium Tax Charge and Federal DAC Tax Charge. These charges
are deducted from each premium payment, currently 2.5% for state premium taxes
and 1.25% as a Federal deferred acquisition cost ("DAC") tax charge.
Sales Charge. A 3% sales charge is deducted from each premium
payment. Also see below "Surrender or Withdrawal Charges".
Cost of Insurance Charge. This charge is calculated on each Monthly
Anniversary Date and deducted from each Policy's Accumulation Value. The charge
is based on the sex, Issue Age, policy year, rating class of the Insured(s),
Specified Amount, Death Benefit option and applicable corridor percentage.
Monthly cost of insurance rates will be determined by Chubb Life based upon its
expectations as to future mortality experience. Cost of insurance rates are
guaranteed not to exceed or be increased above the maximum charge based upon the
Commissioner's 1980 Standard Ordinary Mortality Table.
Charge for Mortality and Expense Risks. This charge is imposed daily
at an annual rate of .65% on the assets of each Division. Chubb Life will
realize income from this charge to the extent it is not needed to provide
benefits and pay expenses under the Policies.
Surrender or Withdrawal Charges. This sales charge is imposed at the
time of surrender or withdrawal during the first five policy years. It declines
annually from 5% to 0% of premiums paid in the first policy year.
<PAGE>
Administrative Charge for Withdrawal or Transfer. Chubb Life charges
$100 for each withdrawal and for certain transfers between Divisions or between
the Divisions and the General Account. See "THE POLICIES--Transfers" for a
description of situations in which the transfer charge will be imposed.
Guaranteed Death Benefit Charge. If the Guaranteed Death Benefit
Rider is added to the Policy, a monthly charge of $.01 per $1,000 of Specified
Amount will be deducted each month from the Accumulation Value of the Policy.
Charge for Optional Rider Benefits. An additional charge is required
if the Policyowner elects to purchase certain optional insurance benefits by
rider. Charges are deducted monthly from a Policy's Accumulation Value. See
"POLICY BENEFITS AND RIGHTS--Optional Insurance Benefits".
See "CHARGES AND EXPENSES" for a fuller description of charges under
the Policies.
Is there a charge against Separate Account C for Federal income tax?
Currently no charge is made against any Division for Federal income
taxes. However, if Chubb Life incurs, or expects to incur, income taxes
attributable to any Division of this class of Policies in future years, it
reserves the right to make a charge. See the discussion of the Federal DAC tax
charge under "CHARGES AND DEDUCTIONS--Premium Charges".
How are amounts allocated to each Division or the General Account?
The Policyowner indicates in the application the allocation of Net
Premium payments among the Divisions and the General Account. The initial Net
Premium is allocated on the Allocation Date and Net Premiums received after the
Allocation Date are allocated generally on the Date of Receipt. The minimum
percentage of any Net Premium payment allocated to any Division or the General
Account is 1%. The Policyowner may change his or her allocation of future
premium payments by written notice to Chubb Life or by telephone, if the proper
telephone authorization is on file, without payment of any fee or penalty.
What is the relationship between the premium and the amount allocated to the
Divisions?
The initial Net Premium is allocated by Chubb Life on the Allocation
Date among the Divisions and the General Account as directed by the Policyowner.
Prior to the Allocation Date the initial Net Premium is held in Chubb Life's
General Account. The initial Net Premium is the initial gross premium, plus any
additional premium paid prior to the Allocation Date, less the state premium tax
charge, the Federal DAC tax charge and the sales charge. These charges also
apply to subsequent premium payments.
What commissions are paid to agents?
The Policies are sold by agents who represent Chubb Life and are
registered representatives of Chubb Securities Corporation or other registered
broker-dealers. Commissions payable to agents are described under "DISTRIBUTION
OF THE POLICY".
What is the Death Benefit?
The Death Benefit under Chubb Heritage I is the amount payable to the
named Beneficiary when the person
<PAGE>
insured under the Policy dies. The Death Benefit under Chubb Heritage II is the
amount payable to the named Beneficiary when the last surviving Insured dies.
The Death Benefit proceeds will equal the Death Benefit of the Policy, plus any
additional rider benefits included and then due, minus any outstanding Policy
Debt or unpaid cost of insurance charges or charges for riders.
Under Option I, the Death Benefit will be equal to the greater of the
Specified Amount or the Accumulation Value of the Policy on the date of death
multiplied by the corridor percentage. Under Option II, the Death Benefit is
equal to the Specified Amount plus the Accumulation Value of the Policy on the
date of death; provided, however, that under Option II, the Death Benefit can
never be less than the Accumulation Value on the date of death multiplied by the
corridor percentage. See "POLICY BENEFITS AND RIGHTS--Death Benefits". Under
the Guaranteed Death Benefit Rider the Death Benefit is guaranteed to never be
less than the Specified Amount provided that a cumulative minimum premium
requirement is met.
How does the Accumulation Value of a Policy vary in relation to the Divisions'
investment experience?
The Policy provides for Accumulation Value equal to the total of the
Policy's Accumulation Value in the Divisions and Accumulation Value in the
General Account. The Policy's Accumulation Value will reflect the amount and
frequency of premium payments, the investment experience of the Divisions, the
value of Net Premiums (Net Premiums plus credited interest), if any, allocated
to the General Account, policy loans, any withdrawals, and any charges imposed
in connection with the Policy. There is no minimum guaranteed Accumulation
Value.
What is the loan provision and how does a loan affect the Death Benefit,
Accumulation Value and Cash Value?
After the first policy anniversary, a Policyowner may borrow against
the Cash Value of his or her Policy. Generally, the maximum loan amount is 90%
of the Cash Value of the Policy on the date of the loan. Loan interest is
payable at the end of each policy year and all Policy Debt outstanding will be
deducted from proceeds payable at the Insured's death for Chubb Heritage I and
at the death of the last surviving Insured for Chubb Heritage II, upon maturity,
or upon surrender.
When a policy loan is made, a portion of the Policy's Accumulation
Value sufficient to secure the loan will be transferred to the General Account.
A policy loan removes the proceeds from the investment experience of Separate
Account C which will have a permanent effect on the Accumulation Value, the Cash
Value and the Death Benefit even if the loan is repaid.
There are two types of loans available. See "CASH VALUE BENEFITS--
Policy Loans" for a description of the two types of loans and their applicable
interest rates.
Is there a short-term cancellation right?
The Policyowner has the limited right to return a Policy for
cancellation and full refund of all premiums paid. Chubb Life will cancel the
Policy if it is returned by mail or personal delivery to Chubb Life, or to the
agent who sold the Policy, within 20 days after the delivery of the Policy to
the Policyowner. Chubb Life will return to the Policyowner, within seven days,
all payments received on the Policy.
<PAGE>
What transfers is a Policyowner allowed?
A Policyowner may transfer Accumulation Value among the Divisions and
among the Divisions and the General Account. However, transfers out of the
General Account are subject to restrictions. Chubb Life currently permits up to
24 transfers per policy year, twelve of which will not incur a transfer charge.
See "THE POLICIES--Transfers" for a more complete description of the terms and
conditions of the transfer privileges under the Policies.
Are the benefits under the Policies subject to Federal income tax?
Under current interpretations of the tax laws, all Death Benefits paid
under the Policies will generally be fully excludable from the gross income of
the Beneficiary for Federal income tax purposes. Treasury regulations require
that investments underlying the Policies be adequately diversified. Chubb Life
believes it is presently in compliance with the regulations and intends to
remain in compliance with such regulations and other Federal tax law
requirements.
If a Policyowner elects to make certain transactions, including a
withdrawal, surrender or exchange of the Policy, the Policyowner may be taxed on
a portion of any amounts paid to the Policyowner (which may include any prior
policy loans cancelled in the transaction). Also, if premiums paid by a
Policyowner exceed certain limits and the Policy is deemed a modified endowment
contract, then any pre-death distributions, including loans, surrenders and
partial withdrawals, may be treated as income taxable to the Policyowner and may
also cause the Policyowner to incur a penalty tax of 10%. Policyowners are
advised to consult with their own tax advisers with regard to the tax
consequences of the Policy. See "FEDERAL TAX MATTERS".
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Life is a stock life insurance company originally chartered in
Tennessee and redomesticated to the State of New Hampshire in 1991. It has been
continuously engaged in the insurance business since 1903. It is licensed to do
life insurance business in forty-nine states of the United States, Puerto Rico,
the U.S. Virgin Islands, Guam and in the District of Columbia. Chubb Life is a
wholly-owned subsidiary of The Chubb Corporation, a New Jersey corporation. The
principal offices of The Chubb Corporation are located at 15 Mountain View Road,
Warren, New Jersey. Its telephone number is 908/903-2000. Chubb Life's home
office is located at One Granite Place, Concord, New Hampshire 03301, telephone
number 603/226-5000.
Chubb Life and its subsidiaries had total assets, at December 31,
1995, of $4,275,365,000 and had over $66 billion of insurance in force, while
total assets of The Chubb Corporation and its subsidiaries (including Chubb
Life), as of the same date, were $22,996,525,000.
Chubb Life writes individual insurance. It is subject to
New Hampshire law governing insurance, and is regulated and supervised by the
New Hampshire Insurance Commissioner. Chubb Life is currently rated AAA
(Superior) by Standard & Poors's Corporation and A+ (Superior) by A.M. Best and
Company. These ratings do not apply to Separate Account C, but reflect the
opinion of the rating company as to Chubb Life's ability to meet its contractual
obligations to its policyowners and its relative financial strength. Even though
assets in Separate Account C are held separately from Chubb Life's other assets,
ratings of Chubb Life may still be relevant to Policyowners since not all of
Chubb Life's contractual obligations relate to payments based on those
segregated assets.
CHUBB SEPARATE ACCOUNT C
Separate Account C is a separate account of Chubb Life established
under New Hampshire law on August 4, 1993. Separate Account C is registered as a
unit investment trust with the Commission under the 1940 Act and is subject to
that Act's requirements. Such registration does not involve supervision of the
management or investment policies of Separate Account C or Chubb Life by the
Commission. Chubb Life is the depositor of Separate Account C. Under New
Hampshire law, the assets of Separate Account C are held exclusively for the
benefit of Policyowners and persons entitled to payments under this Policy and
other variable life insurance policies funded by Separate Account C. The income,
realized or unrealized capital gains, or capital losses of Separate Account C
are credited to or charged against the assets held in Separate Account C in
accordance with the terms of the Policy, without regard to other income or
capital gains or losses of any other account arising out of any other business
Chubb Life conducts. Separate Account C is administered and accounted for as a
part of the general business of Chubb Life, but the assets of Separate Account C
are not chargeable with liabilities arising out of any other business which
Chubb Life may conduct.
Chubb Life holds the assets of Separate Account C physically
segregated and separate and apart from the General Account. Chubb Life maintains
records of all purchases and redemptions of Trust shares by each of the
Divisions.
Divisions. Separate Account C presently has five Divisions but may,
in the future, add or delete Divisions. Each Division will invest exclusively in
shares representing an interest in a Portfolio of the Trust.
Investment income and other distributions to each Division arising
from the applicable underlying Portfolio of the Trust increase the assets of the
corresponding Division. The income and both realized and unrealized gains or
losses on the assets of each Division are credited to or charged against that
Division without regard to income, gains or losses from any other Division.
CHUBB SERIES TRUST
Separate Account C invests in shares of the Trust which is organized
as a Delaware business trust and is registered as an open-end diversified
management company under the 1940 Act. The Trust currently has five Portfolios
each of which has different objectives. The shares of each Portfolio are
presently offered only to the Divisions, but may also be offered to other
separate accounts that may be established by Chubb Life or any of its affiliated
insurance companies. The assets of each Portfolio are maintained separately from
the assets of the other Portfolios and each Portfolio has investment objectives
and policies which are different from those of the other Portfolios. Thus, each
Portfolio operates as a separate investment fund, and the income, gains or
losses of one Portfolio has no effect on the investment performance of any other
Portfolio.
The investment manager to the Trust is Chubb Investment Advisory
Corporation ("Chubb Investment Advisory") which is a subsidiary of Chubb Life.
Chubb Investment Advisory has in turn retained Morgan Guaranty Trust Company of
New York ("Morgan") to provide sub-investment advisory services to each
Portfolio.
An investment management fee is charged monthly against each Portfolio
by Chubb Investment Advisory at the annual rate of .40 percent of the average
daily net asset value of the Resolute Treasury Money Market Portfolio, .50
percent of the average daily net asset value of the Resolute Bond Portfolio, .60
percent of the average daily net asset value of the Resolute Equity Portfolio,
and .80 percent of the average daily net asset value of the Resolute Small
Company Portfolio and the Resolute International Equity Portfolio. The
compensation of Morgan is set at the annual rate of .20 percent of the average
daily net asset value of the Resolute Treasury Money Market Portfolio, .30
percent of the average daily net asset value of the Resolute Bond Portfolio, .40
percent of the average daily net asset value of the Resolute Equity Portfolio,
and .60 percent of the average daily net asset value of the Resolute Small
Company Portfolio and the Resolute International Equity Portfolio. Chubb
Investment Advisory is solely responsible for paying such sub-investment
advisory fees out of its investment management fee described above.
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The investment objectives of each Portfolio are set forth below. There
can be no assurance that any of the Portfolios will achieve its stated
objectives. The specialized nature of each Portfolio gives rise to significant
differences in the relative investment potential and market and financial risks
of each Portfolio. Policyowners should consider the unique features of each
Portfolio before investing in any corresponding Division. For more detailed
information concerning each Portfolio, including a description of the investment
risks, reference is made to the Prospectus for the Trust which accompanies this
Prospectus, or the Statement of Additional Information for the Trust, available
upon request.
The Resolute Treasury Money Market Portfolio seeks to provide current
income, maintain a high level of liquidity and preserve capital.
The Resolute Bond Portfolio seeks to provide a high total return
consistent with moderate risk of capital and maintenance of liquidity.
The Resolute Equity Portfolio seeks to provide a high total return
from a portfolio comprised of selected equity securities.
The Resolute Small Company Portfolio seeks to provide a high total
return from a portfolio of equity securities of small companies.
The Resolute International Equity Portfolio seeks to provide a high
total return from a portfolio of equity securities of foreign corporations.
The Trust may find it necessary to take action to assure that the
Policy continues to qualify as a life insurance policy under federal tax laws.
The Trust, for example, may alter the investment objectives of any Portfolio or
take other appropriate actions. See "OTHER MATTERS--Additions, Deletions or
Substitutions of Investments" and "FEDERAL TAX MATTERS".
Separate Account C will purchase shares of the Trust at net asset
value in connection with premium payments, transfers and loan repayments
allocated to the Divisions in accordance with the Policyowner's directions and
will redeem shares of the Trust to process transfers, policy loans, surrenders
or withdrawals and generally to meet contract obligations or make adjustments in
reserves. The Trust will sell and redeem its shares at net asset value as of the
Date of Receipt by Separate Account C of premium payments or notifications by a
Policyowner.
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THE POLICIES
General. Each form of the Policy is designed to provide the
Policyowner with lifetime insurance protection and flexibility in connection
with the amount and frequency of premium payments and the level of life
insurance proceeds payable under the Policy. Chubb Heritage I is an individual
flexible premium variable life insurance policy which provides life insurance
coverage on one Insured, with the Death Benefit payable upon the death of such
Insured. Chubb Heritage II is a flexible premium survivorship variable life
insurance policy which provides life insurance coverage on two Insureds, with a
Death Benefit payable only when the last surviving Insured dies. The Policyowner
is not required to pay scheduled premiums to keep a Policy in force but may,
subject to certain limitations, vary the frequency and amount of premium
payments. Moreover, subject to certain limitations, a Policy allows a
Policyowner to adjust the level of life insurance payable under the Policy
without having to purchase a new Policy by increasing or decreasing the
Specified Amount. Thus, as insurance needs or financial conditions change, the
policyowner has the flexibility to adjust coverage and vary the premium
payments. Death Benefits are payable under two options as described in "POLICY
BENEFITS AND RIGHTS--Death Benefits".
To purchase a Policy, a completed application must be submitted to
Chubb Life through the agent selling the Policy. Applicants for insurance must
furnish satisfactory evidence of insurability. An Insured under Chubb Heritage I
must generally be between the ages of 0 and 80 and the Insureds under Chubb
Heritage II must generally be between 20 and 85 with only one Insured over the
age of 80. The Joint Equal Age of the Insureds under Chubb Heritage II cannot be
over age 80. The smoking status of each Insured is reflected in the cost of
insurance rates; provided, however, that under Chubb Heritage I distinctions
between smokers and nonsmokers are only made for Insureds age 15 and over.
Policies issued in certain jurisdictions will not directly reflect the sex of
the Insured in either the premium rates or the charges or values under the
Policy. Accordingly, illustrations set forth in this Prospectus may differ for
such Policies.
The minimum Specified Amount at issue is $500,000 for Chubb Heritage I
and $2,000,000 for Chubb Heritage II. Chubb Life reserves the right to revise
its rules from time to time to specify different minimum Specified Amounts at
issue. If the Specified Amount applied for plus all other insurance in force
which is underwritten by Chubb Life or its affiliates exceeds an amount which
varies between $300,000 and $2,000,000 based on various factors, Chubb Life will
reinsure all or a portion of the Policy. Acceptance of an application or
revocation of a Policy during the contestable period is subject to Chubb Life's
insurance underwriting rules and Chubb Life may, in its sole discretion, reject
any application or related premium for any good reason or contest a Policy.
Payment of Premiums. Premiums must be paid to Chubb Life at its home
office or through an authorized agent of Chubb Life for forwarding to Chubb
Life's home office. The initial premium may be wired to Chubb Life's bank upon
notification that the application has been approved by Chubb Life. Subsequent
premium payments may also be wired to Chubb Life's bank. The financial
institution transmitting the wired funds may impose a charge for this service.
In addition, Chubb Life has administrative procedures whereby premium payments
in response to billing notices are sent directly to Chubb Life's bank. Unlike
traditional insurance contracts, there is no fixed schedule of premium payments
on a Policy either as to the amount or the timing of the payment. A Policyowner
may determine, within specified limits, his or her own premium payment schedule.
These limits will be set forth by Chubb Life and will include an initial premium
payment sufficient to keep the Policy in force for at least three months, and
may also include limits on the total amount and frequency of payments in each
policy year. No premium payment may be less than $500. In order to help the
Policyowner obtain the insurance benefits desired, a Planned Periodic Premium
and Premium Frequency will be stated in each Policy. This premium will usually
be based upon the Policyowner's insurance needs and financial abilities, the
current financial climate, the Specified Amount of the Policy, and the Insured's
age, sex and risk class, as discussed with the agent. The Policyowner is not
required to pay such premiums and failure to make any premium payment will not
necessarily result in lapse of the Policy, provided the Policy's Cash Value,
less Policy Debt, if any, is sufficient to pay monthly deductions. Conversely,
adherence to the schedule of Planned Periodic Premiums will not assure that the
Policy will remain in force. See "THE POLICIES --Policy
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Lapse".
Guaranteed Death Benefit Premiums. If the Guaranteed Death Benefit
Rider is added to the Policy, the Death Benefit is guaranteed to never be less
than the Specified Amount, provided the Policyowner pays a cumulative minimum
premium. This cumulative minimum premium is based on Issue Age, sex, smoking
status and underwriting class of the Insured(s) as well as the Specified Amount
and Death Benefit option. The premium is increased for increases in the
Specified Amount. See "POLICY BENEFITS AND RIGHTS--Optional Insurance
Benefits".
Premium Limitations. If, at any time during the year, a premium has
been paid which would result in a Policy being deemed a modified endowment
contract, Chubb Life will so notify the Policyowner on the Policy's anniversary
date and allow the Policyowner to request a refund of the excess premium, or
other action, in order to avoid having the Policy be deemed to be a modified
endowment contract. A Policyowner, however, may choose to have the Policy be
deemed a modified endowment contract, and, in that case, Chubb Life will not
refund the premiums. See "FEDERAL TAX MATTERS--Policy Proceeds". Premium
payments less than the minimum amount of $500 will be returned to the
Policyowner.
Allocation of Premiums. Premium payments, net of the state premium
tax charge, the Federal DAC tax charge and the sales charge plus interest earned
prior to the Allocation Date, will be allocated on the Allocation Date among the
Divisions and the General Account in accordance with the directions of the
Policyowner, as contained in the application. Prior to the Allocation Date the
initial Net Premium will be held in Chubb Life's General Account. Any other
premiums received prior to the Allocation Date will also be held in the General
Account. If the Policy issued as applied for is not accepted or the "free
look" is exercised, no interest will be credited and Chubb Life will retain any
interest earned on the initial Net Premium. The minimum percentage of any Net
Premium payment allocated to any Division or the General Account is 1%. The
Policyowner may change his or her allocation of future premium payments among
the Divisions and the General Account by written notice to Chubb Life or by
telephone without payment of any fee or penalty.
The allocation of each Net Premium payment to a Division will be
determined first by multiplying the Net Premium payment by the fraction to be
allocated to each Division as the Policyowner directs to determine the portion
to be invested in the Division. Each portion to be invested in each Division is
then divided by the unit value of that particular Division to determine the
number of units to be credited to a Policyowner. The unit value of each Division
will vary to reflect the investment experience of the corresponding underlying
Portfolio shares. For a description of the method of determining unit values see
"CALCULATION OF ACCUMULATION VALUE--Unit Values". Applicants should refer to
the Prospectus for the Trust which accompanies this Prospectus for a description
of how the assets of each Portfolio are valued.
All valuations in connection with the Policy, e.g., with respect to
determining Cash Value in connection with policy loans or withdrawals, with
respect to determining Accumulation Value in connection with transfers or
payment of Death Benefits, and with respect to determining a Division's unit
value at the time of each Net Premium payment, will be made on the Date of
Receipt of the premium or the request for payment, loan, withdrawal or transfer
if such date is a Valuation Date; otherwise, such determination will be made on
the next succeeding day which is a Valuation Date. The Date of Receipt of a
premium payment sent directly to Chubb Life's bank pursuant to a billing notice
will be the date the payment is received at the bank and the value of any
Division to which the payment is allocated will be determined as of such date
provided such date is a Valuation Date; otherwise, such determination will be
made on the next succeeding day which is a Valuation Date.
Transfers. Accumulation Value may be transferred among the Divisions
and between the Divisions and the General Account. In addition to individual
transfer requests, Policyowners may elect either a Dollar Cost Averaging feature
or an Automatic Portfolio Re-Balancing feature which provides for systematic
transfers as described below. Transfer requests may be made in writing or by
telephone. The total amount transferred each time must be at least $1,000 unless
a lesser amount constitutes the entire Accumulation Value in a Division or in
the General Account. Accumulation Value transferred from one Division or from
the General Account into more than one Division, and/or
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into the General Account, counts as one transfer. Similarly, transferring
Accumulation Value from more than one Division, and/or the General Account, into
one other Division or the General Account, counts as one transfer.
Chubb Life currently permits 12 transfers per policy year without
imposing a transfer charge. For transfers in excess of 12 in any Policy year, a
transfer charge of $100 to cover administrative costs will be imposed each time
amounts are transferred and will be deducted on a pro-rata basis from the
Division or Divisions or the General Account into which the amount is
transferred. However, no transfer charge will be imposed on the transfer of the
initial Net Premium payments, plus interest earned, from the General Account to
the Divisions on the Allocation Date or on loan repayments. No transfer charge
will be imposed for transfers pursuant to the Dollar Cost Averaging or Automatic
Portfolio Re-Balancing features. Currently, a Policyowner may make up to 24
transfers per policy year. Chubb Life reserves the right to revoke or modify
transfer privileges and charges.
At any time the Policyowner may transfer 100% of the Policy's
Accumulation Value to the General Account and elect to have all future premium
payments allocated to the General Account. While 100% of the Policy's
Accumulation Value and all future premium payments are allocated to the General
Account, the minimum period the Policy will be in force will be fixed and
guaranteed. The minimum period will depend on the amount of Accumulation Value,
the Specified Amount, the sex, the Attained Age, and rating class of the Insured
at the time of transfer. The minimum period will decrease if the Policyowner
subsequently elects to increase the Specified Amount, elects to surrender the
Policy, or elects to make a withdrawal. The minimum period will increase if the
Policyowner elects to decrease the Specified Amount, additional premium payments
are received, or Chubb Life credits a higher interest rate or charges a lower
cost of insurance rate than those guaranteed for the General Account.
Except for transfers in connection with Dollar Cost Averaging,
Automatic Portfolio Re-Balancing and loan repayments, transfers out of the
General Account to the Divisions are permitted only once every 180 days and are
limited in amount to the lesser of (a) 25% of the Accumulation Value in the
General Account not being held as loan collateral or (b) $100,000. In addition,
any other transfer rules, including minimum transfer amounts, also apply. Chubb
Life reserves the right to modify these restrictions.
No transfer charge will be imposed for a transfer of all Accumulation
Value in Separate Account C to the General Account. However, any transfer from
the General Account to the Division(s) will be subject to the transfer charge,
unless it is one of the first 12 transfers in a policy year and except for the
transfer of the initial Net Premium payments, plus interest earned, from the
General Account, loan repayments, and transfers pursuant to the Dollar Cost
Averaging or Automatic Portfolio Re-Balancing features.
A feature called Dollar Cost Averaging is available to Policyowners
under which a Policyowner deposits or designates an amount, subject to a minimum
of $6,000, in the Resolute Treasury Money Market Division or the General Account
and elects to have a specified dollar amount (the "Periodic Transfer Amount")
automatically transferred to one or more of the Divisions on a monthly,
quarterly, or semi-annual basis. This feature allows Policyowners to
systematically invest in the Divisions at various prices which may be higher or
lower than the price a Policyowner would pay when investing the entire amount at
one time and at one price. Each Periodic Transfer Amount is subject to a minimum
amount of $500. A minimum of 1% of the Periodic Transfer Amount must be
transferred to any specified Division. These amounts are subject to change at
Chubb Life's discretion. If a transfer would reduce Accumulation Value in the
Resolute Treasury Money Market Division or the General Account to less than the
Periodic Transfer Amount, Chubb Life reserves the right to include such
remaining Accumulation Value in the amount transferred. At the time a
policyowner elects the Dollar Cost Averaging feature, an election is made
between Fixed Amount Dollar Cost Averaging or Continuous Mode Dollar Cost
Averaging. Under Fixed Amount Dollar Cost Averaging, the feature will continue
until the Designated Amount has been transferred or the policyowner gives
notification of cancellation of the feature prior to transfer of the entire
Designated Amount. Once the Designated Amount has been transferred, a new
Dollar Cost Averaging election form must be completed if the Policyowner wishes
to have additional money dollar cost averaged. Under Continuous Mode Dollar
Cost Averaging, any amounts deposited into the Repository Account, and not just
the Designated Amount, will be transferred. Dollar Cost Averaging is currently
available to policyowners at no charge. Although Chubb Life reserves the right
to
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assess a charge, no greater than cost and with 30 days advance notice to
Policyowners, it has no present intention to do so.
An Automatic Portfolio Re-Balancing feature is also available to
Policyowners. This feature provides a method for re-establishing fixed
proportions between various types of investments on a systematic basis. Under
this feature, the allocation between Divisions and the General Account will be
automatically re-adjusted to the desired allocation, subject to a minimum of 1%
per Division or General Account, on a quarterly, semi-annual or annual basis.
A Policyowner may choose one of the two features. Transfers and
adjustments pursuant to these features will occur on a Policy's Monthly
Anniversary Date in the month in which the transaction is to take place or the
next succeeding business day if the Monthly Anniversary Date falls on a holiday
or a weekend. The applicable authorization form must be on file at Chubb Life
before either feature may begin. Neither feature guarantees profits nor protects
against losses. Transfers under these features do not count toward the 12 free
transfers or the 24 transfers currently allowed per year. Chubb Life reserves
the right to modify the terms and conditions of these features upon 30 days
advance notice to Policyowners.
Telephone Transfers, Loans and Reallocations. Policyowners may
request by telephone transfers of Accumulation Value or reallocation of premiums
(including allocation changes pursuant to existing Dollar Cost Averaging and
Automatic Portfolio Re-Balancing programs), provided that the appropriate
authorization form is on file with Chubb Life. Chubb Life may also, in its
discretion, permit loans to be made by telephone, provided that the proper
authorization form is on file with Chubb Life. During periods of heavy telephone
transfers, implementing a telephone transfer may be difficult. If a Policyowner
is unable to reach Chubb Life via telephone, the Policyowner should send a
written request to Chubb Life via an express mailing service or via the Chubb
Life telecopier machine at (603) 226-5155. (Any transfer requests received via
telecopier are considered telephone transfers and are bound by the conditions
outlined in the signed authorization form.) Chubb Life reserves the right to
discontinue telephone transfers at any time without notice to the Policyowners.
Procedures have been established that are reasonably designed to reduce the risk
of unauthorized telephone transfers, loan requests or allocation changes. These
procedures include requiring personal identification information, tape recording
calls and providing written confirmations to Policyowners. However, there still
exists some risk. Neither Chubb Life, Chubb Securities Corporation, nor any of
their affiliates are liable for any loss resulting from unauthorized telephone
transfers, loan requests or premium allocation changes if its procedures have
been followed, and a Policyowner bears the risk of loss in such situation.
Policy Lapse. Failure to make a premium payment on a Policy will not
necessarily cause the Policy to lapse. The duration of a Policy depends upon its
Cash Value. The Policy will remain in force so long as the Cash Value, less any
outstanding Policy Debt, is sufficient to cover cost of insurance and any rider
charges. In the event the Cash Value, less any outstanding Policy Debt, is
insufficient to pay these monthly cost of insurance and rider charges ("monthly
deduction") the Policyowner will be given a sixty-one day period ("grace
period") within which to make a premium payment to avoid lapse. The premium
required to avoid lapse must be sufficient in amount, after the deduction of the
state premium tax charge, the Federal DAC tax charge and the sales charge, to
cover the monthly deduction for at least three policy months. This required
premium will be set forth in a written notice which Chubb Life will send to the
Policyowner thirty-one days prior to the end of the grace period. The Policy
will continue in force through the grace period, but if no payment is
forthcoming, the Policy will terminate without value at the end of the grace
period. If the Insured under Chubb Heritage I or the last surviving Insured
under Chubb Heritage II dies during the grace period, the Death Benefit payable
under the Policy will be reduced by the amount of the monthly deduction due and
unpaid and the amount of any outstanding Policy Debt. In addition, if the Cash
Value of the Policy at any time should decrease so the aggregate amount of
outstanding Policy Debt secured by the Policy exceeds the Cash Value shown in
the Policy and an additional payment is not made within sixty-one days the
Policy will lapse.
Reinstatement. If the Policy lapses, the Policyowner may reinstate
the Policy. The terms of the original contract will apply upon reinstatement.
The Accumulation Value, before payment of the required reinstatement premium,
will equal the Accumulation Value on the date of termination. The policy year on
reinstatement will be
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measured from the Policy Date. An application for reinstatement may be made any
time within five years of lapse and before the Maturity Date, but satisfactory
proof of insurability of the Insured under Chubb Heritage I or the Insureds or
surviving Insured under Chubb Heritage II and payment of a reinstatement premium
is required. The reinstatement premium, after deduction of the state premium tax
charge, the Federal DAC tax charge and the sales charge, must be sufficient to
cover the monthly deduction for three policy months following the effective date
of reinstatement. If a loan was outstanding at the time of lapse, Chubb Life
will require, at the election of the Policyowner, repayment or reinstatement of
the loan before permitting reinstatement of the Policy. The effective date will
be the date of approval of the reinstatement application, which will be as of a
Monthly Anniversary Date.
Policy "Free Look". The Policyowner has a limited right to return
a Policy for cancellation and a full refund of all premiums paid. Chubb Life
will cancel the Policy if it is returned by mail or personal delivery to Chubb
Life, or to the agent who sold the Policy, within 20 days after the delivery of
the Policy to the Policyowner. Chubb Life will return to the Policyowner within
seven days all payments received on the Policy. Prior to the Allocation Date the
initial Net Premium will be held in Chubb Life's General Account; Chubb Life
will retain any interest earned if the "free look" right is exercised.
CHARGES AND DEDUCTIONS
Premium Charges. Upon receipt of each premium payment and before
allocation of payment among the Divisions and the General Account, Chubb Life
will deduct a state premium tax charge of 2.5% (which represents an average of
actual premium taxes imposed), unless otherwise required by state law.
Currently, the taxes imposed by states on premiums range up to 4% of premiums
paid, while some states do not impose a premium tax. The 2.5% state premium tax
charge may therefore be higher or lower than the actual premium tax imposed by
states in which a particular Policyholder resides. Chubb Life will not increase
this charge under outstanding Policies, but reserves the right to change this
charge for Policies not yet issued in order to correspond with changes in the
state premium tax levels. Chubb Life does not expect to derive a profit from
this charge.
Chubb Life will also deduct from each premium a charge currently equal
to 1.25% to cover the estimated cost to Chubb Life of the Federal income tax
treatment of the Policies' deferred acquisition costs ("Federal DAC tax
charge"). Chubb Life has determined that this charge is reasonable in relation
to Chubb Life's increased Federal income tax burden under the Code resulting
from the receipt of premiums. Chubb Life will not increase this charge under
outstanding Policies, but reserves the right, subject to any required regulatory
approval, to change this charge for Policies not yet issued in order to
correspond with changes in the DAC tax.
Chubb Life will deduct a sales charge of 3% from each premium payment
to compensate Chubb Life for the cost of selling the Policy. The cost of selling
the Policy includes, among other things, agents' commissions, commission
overrides, advertising and the printing of prospectuses and sales literature.
Under normal circumstances, the amount of this charge, plus the Surrender Charge
discussed below, are expected to compensate Chubb Life for total sales expenses
for that year. To the extent sales expenses in any one policy year are not
recovered by this 3% sales charge and the sales charge imposed upon surrenders
or withdrawals during the first five policy years, the sales expenses may be
recovered from other sources, including surplus, which may include profits, if
any, from the mortality and expense risk charge.
Monthly Deduction. On each Monthly Anniversary Date and on the
Policy Date, Chubb Life will deduct from the Accumulation Value of a Policy an
amount to cover certain charges and expenses incurred in connection with the
Policy. The amount of the monthly deduction is equal to the cost of insurance
for the Policy as described below, and the cost of any optional benefits added
by rider. The amount deducted will be deducted pro rata from each of the
Divisions and the General Account, excluding the amount held in the General
Account as loan collateral, in which the Policyowner is invested.
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The cost of insurance is determined on a monthly basis, and is
determined separately for the initial Specified Amount and each subsequent
increase in the Specified Amount. The monthly current cost of insurance rate is
based on the sex, Issue Age, policy year, smoking status and rating class of the
Insured(s), Specified Amount, Death Benefit option and applicable corridor
percentage.
The cost of insurance is calculated as (i) multiplied by the result of
(ii) minus (iii) where:
(i) is the cost of insurance rate as described in the Cost of
Insurance Rates provision contained in the Policy.
(ii) is the Death Benefit at the beginning of the policy month divided
by 1.00327374, to arrive at the proper values for the beginning of the month
assuming the guaranteed interest rate of 4% that is applicable to the General
Account portion of the Policy; and
(iii) is the Accumulation Value at the beginning of the policy month.
If the corridor percentage is applicable, the Death Benefit used in
the foregoing calculation will reflect the corridor percentage. The cost of
insurance charge is not affected by the death of the first Insured to die under
Chubb Heritage II.
The monthly cost of insurance rate will be determined by Chubb Life
based upon expectations as to future mortality experience, but can never exceed
the rates shown in the table of Monthly Guaranteed Cost of Insurance Rates set
forth in the Policy. Such guaranteed maximum rates are based on the
Commissioner's 1980 Standard Ordinary Mortality Table.
A guaranteed Monthly Deduction Adjustment will be calculated at the
beginning of each policy year and subtracted from the cost of insurance for each
month of that policy year during which the discount is in effect. The discount
will be allocated between the Divisions and the General Account in the same
proportion as premium payments. The discount is calculated as (i) multiplied by
the result of (ii) minus (iii) minus (iv), but not less than zero, where:
(i) is a factor that varies by Specified Amount as follows :
Under $5,000,000 .0001250
$5,000,000 to $9,999,999 .0002500
$10,000,000 to $14,999,999 .0003750
$15,000,000 and Above .0004583
(ii) is an amount no greater than the Accumulation Value at the
beginning of the policy year, and guaranteed to be at least the Accumulation
Value at the beginning of the policy year less any unloaned funds in the General
Account;
(iii) is the Guideline Single Premium at issue under Section 7702 of
the Code, increased on a pro-rata basis for any increase in Specified Amount;
and
(iv) is the outstanding Type A loan balance at the beginning of the
policy year. See "CASH VALUE BENEFITS--Policy Loans" for a description of Type A
loans.
The Monthly Deduction Adjustment is the mechanism whereby Chubb Life
annually evaluates its mortality risk exposure on individual Policies based on,
among other factors, the proceeds from all mortality charges, including the cost
of insurance charge and the mortality risk portion of the Risk Charge. The
insurance charges are set at rates designed to cover total anticipated mortality
experience, i.e., Death Benefit payments, taking into consideration the risk
that actual experience may exceed Chubb Life's expectation. Of course, as the
amount at risk under any one
<PAGE>
Policy decreases, i.e., Accumulation Value increases, Chubb Life's exposure on
such Policy will be reduced. Moreover, Chubb Life's risk decreases as the
Specified Amount increases. The Monthly Deduction Adjustment formula factors in
Accumulation Value and Specified Amount. Thus, the Monthly Deduction Adjustment
may be translated into a net reduction of the Risk Charge which is applied to
the Accumulation Value. As shown in the following table, the Monthly Deduction
Adjustment may be expressed as a reduction in the mortality portion of the Risk
Charge.
<TABLE>
<CAPTION>
Mortality Mortality
--------- ---------
Monthly Risk Risk
------- ---- ----
Mortality Deduction Charge Charge Effective
--------- --------- ------ ------ ---------
Risk Adjust- Below Above Mortality
---- ------- ----- ----- ---------
-------- Charge ment GSP GSP Risk Charge*
Specified Amount ------ ----- --- --- ------------
----------------
<S> <C> <C> <C> <C> <C>
$ 500,000--$ 4,999,999 .55% .15% .55% .40% .475%
$ 5,000,000--$ 9,999,999 .55% .30% .55% .25% .40%
$10,000,000--$14,999,999 .55% .45% .55% .10% .325%
$15,000,000 and Above . .55% .55% .55% .0% .275%
- -------------
</TABLE>
* Assumes that Accumulation Value, less any Type A loans, at the beginning of
the policy year is twice the Guideline Single Premium ("GSP").
Risk Charge. Chubb Life will also assess a charge on a daily basis
against each Division at an annual rate of .65% of the value of the Division to
compensate Chubb Life for its assumption of certain mortality and expense risks
in connection with the Policy. Specifically, Chubb Life bears the risk that the
total amount of Death Benefit payable under the Policy will be greater than
anticipated and Chubb Life also assumes the risk that the actual cost incurred
by it to administer the Policy will not be covered by charges assessed under the
Policy.
Surrender Charge. Upon surrender during the first five policy years,
Chubb Life will assess a contingent deferred sales charge. This contingent
deferred sales charge will be 5% of first year premiums for surrender during the
first policy year, 4% of first year premiums for surrender during the second
policy year, 3% of first year premiums for surrender during the third policy
year, 2% of first year premiums for surrender during the fourth policy year and
1% of first year premiums for surrender during the fifth policy year. There is
no Surrender Charge assessed for surrender after the fifth policy year. A pro
rata portion of any Surrender Charge will be assessed upon a withdrawal. The
Policy's Accumulation Value will be reduced by the amount of any withdrawal plus
any applicable pro-rata Surrender Charge.
The Surrender Charge helps to compensate Chubb Life for the cost of selling
the Policy, including the cost of advertising and the printing of the Prospectus
and sales literature.
Administrative Fees. An administrative fee equal to $100 is imposed for
each transfer among the Divisions or the General Account, after the first 12
transfers in a policy year and except for the transfer of the initial Net
Premium payments, plus interest, from the General Account on the Allocation
Date, loan repayments and transfers pursuant to the Dollar Cost Averaging and
Automatic Portfolio Re-Balancing features. For withdrawals, an administrative
fee equal to $100 will be charged. All administrative fees are no greater than
the anticipated expenses of providing such services.
Other Charges. Chubb Life also reserves the right to charge the assets of
each Division to provide for any income taxes or other taxes payable by Chubb
Life on the assets attributable to that Division. An investment advisory fee for
services provided by the Trust's investment manager and sub-investment adviser
and certain other operating expenses are deducted from the assets of each
Portfolio of the Trust. See "CHUBB SERIES TRUST".
<PAGE>
POLICY BENEFITS AND RIGHTS
Death Benefits. So long as it remains in force, Chubb Heritage I
provides for the payment of life insurance proceeds upon the death of the
Insured and Chubb Heritage II provides for a Death Benefit payable upon the
death of the last surviving Insured. Proceeds will be paid to a named
Beneficiary or contingent Beneficiary. One or more Beneficiaries or contingent
Beneficiaries may be named. Life insurance proceeds may be paid in a lump sum or
under an optional payment plan. (See "SETTLEMENT OPTIONS" below.) Proceeds of
the Policy will be reduced by any outstanding Policy Debt and any due and unpaid
charges and increased by any benefits added by rider. Proceeds that are payable
in a lump sum will be increased to include interest as required by applicable
state law. Proceeds will ordinarily be paid within seven days after Chubb Life
receives due Proof of Death. Under Chubb Heritage II, due Proof of Death must
also be submitted at the time of the first death.
A Policyowner will make in the initial application two elections to
determine the Death Benefit under the Policy. First, the Policyowner will choose
one of two Death Benefit options offered under the Policies. Second, the
Policyowner will choose the Death Benefit qualification test, which is the
method for qualifying the Policy as a life insurance contract for purposes of
Federal tax law. If no Death Benefit qualification test or option is designated,
the guideline premium test under Option I, as described below, will be assumed
by Chubb Life to have been selected.
The amount of life insurance proceeds payable under a Policy will
depend upon the option in effect, as follows:
Option I: For Policies issued pursuant to the cash value
accumulation test, the Death Benefit equals the greater of the current Specified
Amount or the Accumulation Value of the Policy at the date of death multiplied
by the corridor percentage, as described below. For Policies issued pursuant
to the guideline premium test, the Death Benefit equals the greater of the
current Specified Amount or the Accumulation Value of the Policy at the date of
death multiplied by the corridor percentage, as described below.
Option II: The Death Benefit equals the current Specified Amount
plus the Accumulation Value of the Policy on the date of death. For Policies
issued pursuant to the cash value accumulation test, the Death Benefit will not
be less than the Accumulation Value on the date of death multiplied by the
corridor percentage, as described below. For Policies issued pursuant to the
guideline premium test, the Death Benefit will not be less than the Accumulation
Value multiplied by the corridor percentage, as described below.
Option I emphasizes the impact of investment experience on
Accumulation Value rather than insurance coverage because the Specified Amount
and the Death Benefit, generally, remain stable. Under Option I, as
Accumulation Value increases and Death Benefit does not increase, the amount at
risk decreases. Thus, the cost of insurance charges are imposed on a decreasing
amount. Option II emphasizes insurance coverage because favorable investment
experience adds to the Accumulation Value that provides an addition to the total
Death Benefit. Under Option II, favorable investment experience does not reduce
the amount at risk upon which cost of insurance charges are based.
The corridor percentage is a minimum ratio of Death Benefit to
Accumulation Value required pursuant to the cash value corridor test under
Section 7702 of the Code. The Policyowner has the option to select this minimum
corridor percentage under the Code or an alternative corridor percentage that
produces a higher corridor percentage beginning in policy year 25 which grades
back to the minimum corridor percentage at the Maturity Date. Use of the
alternative corridor percentage results in a higher ratio of Death Benefit to
Accumulation Value than that resulting from the use of the minimum corridor
percentage beginning in policy year 25. This higher ratio then gradually reduces
until, by the Maturity Date, it is equal to the ratio produced by use of the
minimum corridor percentage. Although use of the alternative corridor percentage
results in a higher Death Benefit than the minimum corridor percentage beginning
in policy year 25, this higher Death Benefit results in higher cost of insurance
charges which has the effect of reducing Accumulation Value and consequently
future Death Benefits.
The Policyowner will also choose from two Death Benefit qualification
tests available under a Policy. Once
<PAGE>
elected, the Death Benefit qualification test cannot be changed for the duration
of the Policy. The available Death Benefit qualification tests are the cash
value accumulation test and the guideline premium test.
Generally, the cash value accumulation test requires that under the
terms of a Policy, the Death Benefit must be sufficient so that the cash
surrender value, as defined in Section 7702 of the Internal Revenue Code, does
not at any time exceed the net single premium required to fund the future
benefits under the Policy. If the Accumulation Value under a Policy is at any
time greater than the net single premium at the Insured's age and sex for the
proposed Death Benefit, the Death Benefit will be increased automatically by
multiplying the Accumulation Value by the corridor percentage computed in
compliance with the Code. A list of representative corridor percentages is set
forth in Appendix A to this Prospectus. The corridor percentages under the
Policy vary according to the Age, sex, and underwriting classification of the
Insured(s), and the resulting Death Benefit determined by using the corridor
percentage will be at least equal to the amount required for the Policy to be
deemed life insurance under Section 7702. The corridor percentage is calculated
using a four percent interest rate or, if higher, the contractually guaranteed
interest rate and using mortality charges specified in the prevailing
Commissioner's standard table as of the time the Policy is issued.
The guideline premium test limits the amount of premiums payable under
a Policy to a certain amount for an Insured of a particular age and sex. The
test also applies a prescribed corridor percentage to determine a minimum ratio
of Death Benefit to Accumulation Value. A complete list of corridor percentages
is set forth in Appendix B to this Prospectus.
There are two main differences between the guideline premium test and
the cash value accumulation test. First, the guideline premium test limits the
amount of premium that may be paid into a Policy. No such limits apply under
the cash value accumulation test. (However, any premium that would increase the
net amount at risk is subject to evidence of insurability satisfactory to Chubb
Life.) Second, the factors that determine the minimum Death Benefit relative to
the Policy's Accumulation Value are different. Required increases in the
minimum Death Benefit due to growth in Accumulation Value will generally be
greater under the cash value accumulation test than under the guideline premium
test. Policyowners who desire to pay premiums in excess of the guideline
premium test limitations should elect the cash value accumulation test.
Policyowners who do not desire to pay premiums in excess of the guideline
premium test limitations should consider the guideline premium test. Applicants
for a Policy should consult a qualified tax adviser in choosing a Death Benefit
election.
The following examples demonstrate the determination of Death Benefits
under Options I and II for the cash value accumulation test and the guideline
premium test. The examples show a Chubb Heritage I policy and a Chubb Heritage
II policy, with the same Specified Amounts and Accumulations Values. The Chubb
Heritage I example assumes a Policy was issued to a male, non-smoker Insured,
Age 45 at the time of calculation of the Death Benefit and that there is no
outstanding Policy Debt. The Chubb Heritage II example considers a Policy
issued to one male and one female, both non-smokers, and both Age 45. The
policy is in its tenth policy year without any outstanding Policy Debt and with
both insureds having attained age 55.
Chubb Heritage I
<TABLE>
<CAPTION>
Cash Value Accumulation Guideline Premium
Test Test
<S> <C> <C>
Specified Amount 1,000,000 1,000,000
Accumulation Value 500,000 500,000
Corridor Percentage 314% 215%
Death Benefit Option I 1,570,000 1,075,000
Death Benefit Option II 1,570,000 1,500,000
</TABLE>
<PAGE>
Chubb Heritage II
<TABLE>
<CAPTION>
Cash Value Guideline
Accumulation Test Premium Test
<S> <C> <C>
Specified Amount 2,000,000 2,000,000
Accumulation Value 1,000,000 1,000,000
Corridor Percentage 306% 150%
Death Benefit Option I 3,060,000 2,000,000
Death Benefit Option II 3,060,000 3,000,000
</TABLE>
The Death Benefit option in effect may be changed by sending Chubb
Life a written request for change. The effective date of the change will be the
first Monthly Anniversary Date that coincides with or next follows the Date of
Receipt of such request. If the Death Benefit option is changed from Option II
to Option I, the Specified Amount will be increased by the Policy's Accumulation
Value on the effective date of the change. Conversely, if the Death Benefit
option is changed from Option I to Option II, the Specified Amount will be
decreased by the Policy's Accumulation Value on the effective date of the
change. Evidence of insurability satisfactory to Chubb Life will be required on
a change from Option I to Option II. A change in the Death Benefit option may
not be made if it would result in a Specified Amount which is less than a
minimum Specified Amount of $250,000 on Chubb Heritage I and $500,000 on Chubb
Heritage II. A change in Death Benefit options will affect the cost of
insurance.
After a Policy has been in force for one year, the Policyowner may
adjust the existing insurance coverage by increasing or decreasing the Specified
Amount. The increase or decrease must be at least $250,000 on Chubb Heritage I
and $500,000 on Chubb Heritage II. To make a change, the Policyowner must send a
written request and the Policy to Chubb's home office. Any change in the
Specified Amount will affect a Policyowner's cost of insurance charge. An
increase in the Specified Amount will affect the determination of the amount
available for a Type A loan, as explained below, and will affect the Monthly
Deduction Adjustment discount, if any. Decreases in the Specified Amount may
affect the Monthly Deduction Adjustment but will have no effect on the
determination of the amount available for a Type A loan. Any decrease in the
Specified Amount will become effective on the Monthly Anniversary Date after the
Date of Receipt of the request. Any decrease in Specified Amount will first
apply to coverage provided by the most recent Specified Amount increase, then to
the next most recent increases successively and finally to the coverage under
the original application. By applying decreases in this manner, savings,
generally, may be realized by a Policyowner since additional costs and
limitations associated with increases in Specified Amounts would be eliminated
first. To apply for an increase in the Specified Amount, a supplemental
application must be completed and evidence satisfactory to Chubb Life that each
Insured is insurable must be submitted. Any approved increase in the Specified
Amount will become effective on the date shown in the Supplemental Policy
Specifications Page. Such increase will not become effective, however, if the
Policy's Cash Value is insufficient to cover the deduction for the cost of the
increased insurance for the policy month following the increase. Such an
increase may require a payment or future increased Planned Periodic Premiums.
Guaranteed Death Benefit. The Policyowner may add a Guaranteed Death
Benefit Rider to the Policy under which the Death Benefit is guaranteed to never
be less than the Specified Amount provided that a cumulative minimum premium
requirement is met. The premium requirement is based on Issue Age, sex, smoking
status, underwriting class, Specified Amount and Death Benefit Option. If the
Specified Amount is increased, an additional premium, based on Attained Age,
will be required for such increase. There is a monthly charge for this Death
Benefit Rider. See " Optional Insurance Benefits".
Combined Requests. Policyowners may combine requests for changes in
the Specified Amount and the Death Benefit option and requests for withdrawals.
The requirements and limitations that apply to each change will apply to the
combined transactions, including any required evidence of insurability,
Specified Amount and premium limitations, effectiveness on the Monthly
Anniversary Date following the Date of Receipt of the request, and the
<PAGE>
sufficiency of Cash Value to keep the Policy in force for the month following
the transaction.
The effect of a combined transaction on the cost of insurance, the
amount of the Death Benefit proceeds and the premium limitations will be the net
result of such effects for each such transaction considered separately.
Policyowners should consider the net result of a combined transaction in light
of insurance needs, financial circumstances and tax consequences.
Maturity of the Policy. As long as the Policy remains in force,
Chubb Life will pay the Policy's Cash Value, less outstanding Policy Debt, if
any, on the Maturity Date. Benefits at maturity may be paid in a lump sum or
under an optional payment plan. The Maturity Date is the date shown in the
Policy. To change the Maturity Date, a written request and the Policy must be
sent to Chubb Life. The Date of Receipt for any request must be before the
Maturity Date then in effect. The requested Maturity Date must be (i) on a
policy anniversary, (ii) at least one year from the Date of Receipt of the
request, (iii) after the tenth policy year and (iv) on or before the policy
anniversary nearest to the Insured's 100th birthday for Chubb Heritage I and the
younger Insured's 100th birthday for Chubb Heritage II.
Optional Insurance Benefits. Subject to certain requirements, one or
more of the following optional insurance benefits may be added to a Policy by
rider. More detailed information concerning such riders may be obtained from the
agent selling the Policy. Additional riders, developed after the effective date
of this Prospectus, may also be available as optional insurance benefits to the
Policy. The agent selling the Policy should be consulted regarding the
availability of any such additional riders. The cost of any optional insurance
benefits will be deducted as part of the monthly deduction. See "CHARGES AND
DEDUCTIONS."
(a) Guaranteed Death Benefit Rider. This rider guarantees that the
Policy will stay in force with a Death Benefit equal to the Specified Amount,
even if the Cash Value less Policy Debt is not sufficient to pay the monthly
deduction, provided that cumulative premiums paid, less loans and withdrawals,
are greater than or equal to the guaranteed death benefit premium multiplied by
the number of months the policy has been in force. This cumulative premium
requirement must be met at all times for the rider to stay in force. A monthly
charge of $.01 per $1,000 of Specified Amount will be deducted from the Policy's
Accumulation Value.
(b) Automatic Increase Rider. This rider allows for scheduled annual
increases in Specified Amount of from 1% to 7%, subject to certain limitations
set forth in the rider. There is an annual charge per unit of Specified Amount
which varies by Issue Age on Chubb Heritage I and by Joint Equal Age at issue on
Chubb Heritage II.
(c) Policy Exchange Option Rider. This rider is available on Chubb
Heritage II provided both Insureds are insurable. It allows Chubb Heritage II to
be exchanged for two individual Chubb Heritage I policies, without evidence of
insurability, each with a face amount equal to one half of the Death Benefit
under Chubb Heritage II at the time of exchange, upon the Insureds' divorce or
the occurrence of certain Federal tax law changes as specified in the rider.
There is no charge for this rider.
(d) Extension of Maturity Date Rider. This rider allows the
Policyowner to extend the original Maturity Date of the Policy under the terms
set forth in the rider. See "FEDERAL TAX MATTERS."
(e) Exchange of Insured Rider. This benefit is available under Chubb
Heritage I, and provides that the Policy may be exchanged for a reissued policy
on the life of a substitute insured, subject to the conditions stated in the
rider. A charge of $150 will be assessed for exercising the option. See
"FEDERAL TAX MATTERS."
Settlement Options. In addition to a lump sum payment of benefits
under the Policy, any proceeds to be paid under the Policy may be paid in any of
four methods. A settlement option may be designated by notifying Chubb Life in
writing. A lump sum payment of proceeds under the Policy will be made if a
settlement option is not designated. Any amount left with Chubb Life for payment
under an optional payment plan will be transferred to the account of the
Beneficiary in the General Account on the date Chubb Life receives written
instructions. During the
<PAGE>
life of the Insured, the Policyowner may select a plan. If a payment plan has
not been chosen at the time the Death Benefit becomes payable, a Beneficiary can
choose a plan. If a Beneficiary is changed, the payment plan selection will no
longer be in effect unless the Policyowner requests that it continue. An option
may be elected only if the amount of the proceeds is $2,000 or more. Chubb Life
reserves the right to change the interval of payments to 3, 6 or 12 months, if
necessary, to increase the guaranteed payments to at least $20 each.
Option A.
Installments of a specified amount. Payments of an agreed amount to
be made each month until the proceeds and interest are exhausted.
Option B.
Installments for a specified period. Payments to be made each month
for an agreed number of years.
Option C.
Life income. Payments to be made each month for the lifetime of the
payee. It is guaranteed that payments will be made for a minimum of 10, 15, or
20 years, as agreed upon.
Option D.
Interest. Payment of interest on the proceeds held by Chubb Life
calculated at the compound rate of 3% per year. Interest payments will be made
at 12, 6, 3 or 1 month intervals, as agreed upon.
The interest rate for Options A, B, and D will not be less than 3% per
year. The interest rate for Option C will not be less than 2 1/2% per year.
Interest in addition to that stated may be paid or credited from time to time
under any option, but only in the sole discretion of Chubb Life.
Unless otherwise stated in the election of an option, the payee of
policy benefits shall have the right to receive the withdrawal value under that
option. For Options A and D, the withdrawal value shall be any unpaid balance of
proceeds plus accrued interest. For Option B, the withdrawal value shall be the
commuted value of the remaining payments. Such value will be calculated on the
same basis as the original payments. For Option C, the withdrawal value will be
the commuted value of the remaining payments. Such value will be calculated on
the same basis as the original payments. To receive this value, the payee must
submit evidence of insurability acceptable to Chubb Life. Otherwise, the
withdrawal value shall be the commuted value of any remaining guaranteed
payments. If the payee should be alive at the end of the guaranteed period, the
payment will be resumed on that date. The payment will then continue for the
lifetime of the payee.
If a payee of policy benefits dies before the proceeds are exhausted
or the prescribed payments made, a final payment will be made in one sum to the
estate of the last surviving payee. The amount to be paid will be calculated as
described for the applicable option in the Withdrawal Value provision of the
Policy.
CALCULATION OF ACCUMULATION VALUE
The Policy provides for an Accumulation Value, which will be
determined on a daily basis. Accumulation Value is the sum of the values in the
Divisions plus the value in the General Account. The Policy's Accumulation Value
in the Divisions is calculated by units and unit values under the Policies, as
described below. The Policy's Accumulation Value will reflect a number of
factors, including the investment experience of the Divisions that are invested
in the Portfolios, any additional net premiums paid, any withdrawals, any policy
loans, and any charges
<PAGE>
assessed in connection with the Policy. Accumulation Values in Separate Account
C are not guaranteed as to dollar amount.
On the Allocation Date, the Accumulation Value in Separate Account C
is the initial premium payments, reduced by the state premium tax charge, the
Federal DAC tax charge and the sales charge, plus interest earned prior to the
Allocation Date, and less the monthly deduction for the first policy month. On
the Allocation Date, the initial number of units credited to Separate Account C
for the Policy will be established. At the end of each Valuation Period
thereafter, the Accumulation Value in a Division is (i) plus (ii) plus (iii)
minus (iv) minus (v) where:
(i) is the Accumulation Value in the Division on the preceding
Valuation Date multiplied by the net investment factor, as described below, for
the current Valuation Period,
(ii) is any Net Premium received during the current Valuation Period
which is allocated to the Division,
(iii)is all Accumulation Values transferred to the Division from
another Division or the General Account during the current Valuation Period,
(iv) is the Accumulation Values transferred from the Division to
another Division or the General Account and Accumulation Values transferred to
secure a Policy Debt during the current Valuation Period, and
(v) is all withdrawals from the Division during the current Valuation
Period.
In addition, whenever a Valuation Period includes the Monthly
Anniversary Date, the Accumulation Value at the end of such period is reduced by
the portion of the monthly deduction allocated to the Division.
The Policy's total Accumulation Value in Separate Account C equals the
sum of the Policy's Accumulation Value in each Division thereof.
Unit Values. Units are credited to a Policyowner upon allocation of
Net Premiums to a Division. Each Net Premium payment allocated to a Division
will increase the number of units in that Division. Both full and fractional
units are credited. The number of units and fractional units is determined by
dividing the Net Premium payment by the unit value of the Division to which the
payment has been allocated. The unit value of each Division is determined on
each Valuation Date. The number of units credited will not change because of
subsequent changes in unit value. The dollar value of each Division's units will
vary depending upon the investment performance of the corresponding Portfolio of
the Trust.
Certain transactions affect the number of units in a Division under a
Policy. Loans, surrenders and withdrawals, withdrawal and transfer fees and
charges, the Surrender Charge, and monthly deductions involve the redemption of
units and will decrease the number of units. Transfers of Accumulation Value
among Divisions will reduce or increase the number of units in a Division, as
appropriate.
The unit value of each Division's units initially under the Policies
was $10.00. Thereafter, the unit value of a Division on any Valuation Date is
calculated by multiplying (1) by (2) where:
(1) is the Division's unit value on the previous Valuation Date; and
(2) is the net investment factor for the Valuation Period then ended.
The unit value of each Division's units on any day other than a
Valuation Date is the unit value as of the next Valuation Date and is used for
the purpose of processing transactions.
Net Investment Factor. The net investment factor measures the
investment experience of each Division and
<PAGE>
is used to determine changes in unit value from one Valuation Period to the next
Valuation Period. The net investment factor for a Valuation Period is (i)
divided by (ii) minus (iii) where:
(i) is (a) the value of the assets of the Division at the end of the
preceding Valuation Period, plus (b) the investment income and capital gains,
realized or unrealized, credited to the assets of the Division during the
Valuation Period for which the net investment factor is being determined, minus
(c) capital losses, realized or unrealized, charged against those assets during
the Valuation Period, minus (d) any amount charged against the Division for
taxes or any amount set aside during the Valuation Period by Chubb Life to
provide for taxes attributable to the operation or maintenance of that Division,
and
(ii) is the value of the assets of the Division at the end of the
preceding Valuation Period, and
(iii) is a charge no greater than .0017808% on a daily basis. This
corresponds to .65% on an annual basis for mortality and expense risks.
CASH VALUE BENEFITS
So long as it remains in force, the Policy provides for certain
benefits prior to the Maturity Date. Subject to certain limitations, the
Policyowner may at any time obtain Cash Value by surrendering the Policy or
making withdrawals from the Policy. The Cash Value equals the Accumulation Value
less any Surrender Charge. In addition, the Policyowner has certain policy loan
privileges under the Policy.
Surrender Privileges. As long as the Policy is in force, a
Policyowner may surrender the Policy or make a withdrawal from the Policy at any
time by sending a written request along with the Policy to Chubb Life. See
"FEDERAL TAX MATTERS--Policy Proceeds."
The surrender value of the Policy equals the Cash Value less any
outstanding Policy Debt. The amount payable upon surrender of the Policy is the
surrender value at the end of the Valuation Period during which the request is
received. The surrender value may be paid in a lump sum or under one of the
optional payment plans specified in the Policy. Proceeds will generally be paid
within seven days of the Date of Receipt of a request for surrender or
withdrawal. See "POLICY BENEFITS AND RIGHTS--Settlement Options."
A Policyowner can obtain a portion of the Policy's Cash Value by
withdrawal of Cash Value from the Policy. A withdrawal from a Policy is subject
to the following conditions:
A. The amount withdrawn may not exceed the Cash Value less any
outstanding debt.
B. The minimum amount that may be withdrawn is $5,000.
C. A charge equal to $100 will be deducted from the amount of each
withdrawal.
Withdrawals generally will affect the Policy's Accumulation Value,
Cash Value and the life insurance proceeds payable under the Policy. The
Policy's Cash Value will be reduced by the amount of the withdrawal. The
Policy's Accumulation Value will be reduced by the amount of the withdrawal plus
any applicable pro-rata Surrender Charge. Life insurance proceeds payable under
the Policy will generally be reduced by the amount of the withdrawal plus any
applicable pro-rata Surrender Charge, unless the withdrawal is combined with a
request to maintain or increase the Specified Amount. See "POLICY BENEFITS AND
RIGHTS--Combined Requests".
Under Option I, which provides for life insurance proceeds equal to
the greater of the Specified Amount or the Accumulation Value of the Policy at
the date of death multiplied by the corridor percentage, the Specified Amount
<PAGE>
will be reduced by the amount of the withdrawal plus any applicable pro-rata
Surrender Charge. The Specified Amount remaining after a withdrawal may not be
less than $250,000 for Chubb Heritage I and $500,000 for Chubb Heritage II. As a
result, Chubb Life will not effectuate any withdrawal that would reduce the
Specified Amount below these minimums. If increases in Specified Amount
previously have occurred, a withdrawal will first reduce the Specified Amount of
the most recent increase, then the most recent increases successively, then the
coverage under the original application. If the life insurance proceeds payable
under either Death Benefit option, both before and after the withdrawal, is the
Accumulation Value multiplied by the corridor percentage, a withdrawal generally
will result in a reduction in life insurance proceeds equal to the amount paid
upon withdrawal, multiplied by the corridor percentage then in effect.
Under Option II, which provides for life insurance proceeds equal to
the Specified Amount plus Accumulation Value, a reduction in Accumulation Value
as a result of a withdrawal will typically result in a dollar per dollar
reduction in the life insurance proceeds payable under the Policy.
A Policyowner may allocate a withdrawal among the Divisions and the
General Account. If no such allocation is made, a withdrawal will be allocated
among the Divisions and the General Account in the same proportion that the
Accumulation Value in each Division and the Accumulation Value in the General
Account, less any Policy Debt bears to the total Accumulation Value of the
Policy, less any Policy Debt, on the date of withdrawal. See "FEDERAL TAX
MATTERS--Policy Proceeds".
Policy Loans. So long as the Policy remains in force, a Policyowner
may borrow money from Chubb Life at any time after the first policy anniversary
using the Policy as the only security for the loan. Loans have priority over the
claims of any assignee or any other person. Generally, the maximum loan amount
is 90% of the Policy's Cash Value at the end of the Valuation Period during
which the loan request is received. The maximum amount which may be borrowed at
any given time is the maximum loan amount reduced by any outstanding Policy
Debt.
Proceeds of policy loans ordinarily will be disbursed within seven
days from the Date of Receipt of a request for a loan by Chubb Life, although
payments may be postponed under certain circumstances. See "OTHER MATTERS--
Postponement of Payments". Chubb Life may, in its discretion, permit loans to
be made by telephone if the proper authorization form is on file with Chubb
Life. So long as the Policy remains in force, the loan may be repaid in whole or
in part without penalty at any time while an Insured is living.
When a policy loan is made, a portion of the Policy's Accumulation
Value sufficient to secure the loan will be transferred to the General Account.
A policy loan removes the proceeds from the investment experience of Separate
Account C which will have a permanent effect on the Accumulation Value and Death
Benefit even if the loan is repaid. Any loan interest that is due and unpaid
will also be so transferred. Accumulation Value equal to Policy Debt in the
General Account will accrue interest daily at an annual rate of 6%. The
Policyowner may allocate a policy loan among the Divisions and the General
Account. If no such allocation is made the loan will be allocated among the
Divisions and the General Account in the same proportion that the Accumulation
Value in each Division and the Accumulation Value in the General Account less
Policy Debt bears to the total Accumulation Value of the Policy, less Policy
Debt, on the date of the loan.
Chubb Life will charge interest on any outstanding policy loan with
such interest compounded annually. There are two types of loans available. A
Type A loan is charged the same interest rate as the interest credited to the
amount of Accumulation Value held in the General Account to secure loans. The
unloaned Type A balance is the Cash Value, less the threshold, and less the sum
of any outstanding Type A loans. The threshold is the Guideline Single Premium
for this policy at issue as defined in Section 7702 of the Internal Revenue Code
of 1986 entitled "Life Insurance Contract Defined." Any other loans are Type B
loans. A Type B loan is charged an interest rate of 6.85%. It is possible for
one loan request to result in both a Type A and a Type B loan. A request for a
loan will be granted first as a Type A loan, to the extent available, and then
as a Type B loan. Once a policy loan is granted, it remains a Type A or Type B
until it is repaid. Increases in the Specified Amount will affect the
determination of the amount available for a Type A loan; however, decreases in
the Specified Amount will not have any such effect.
<PAGE>
Interest is due and payable at the end of each policy year, and any interest not
paid when due becomes loan principal.
Where applicable, loans are subject to conditions and requirements of
the Employee Retirement Income Security Act of 1974 ("ERISA"), as well as the
terms of any retirement plan in connection with which the Policy has been
purchased. The ERISA rules relating to loans are complex and vary depending on
the individual circumstances of each Policy. Employers and Policyowners should
consult with qualified advisers before exercising the loan privileges.
Policy Debt equals the total of all outstanding policy loans and
accrued interest on policy loans. If Policy Debt exceeds Cash Value, Chubb Life
will notify the Policyowner and any assignee of record. A payment at least equal
to the amount of excess Policy Debt above the Cash Value must be made to Chubb
Life within 61 days from the date Policy Debt exceeds Cash Value, otherwise, the
Policy will lapse and terminate without value. In such event, the Policyowner
may be taxed on the total appreciation under the Policy. The Policy may,
however, later be reinstated, subject to satisfactory proof of insurability and
the payment of a reinstatement premium. See "THE POLICIES--Reinstatement".
So long as the Policy remains in force, Policy Debt may be repaid in
whole or in part at any time during an Insured's life. If there is any existing
Policy Debt, premium payments in the amount of the Planned Periodic Premium,
received at the Premium Frequency, will be applied as premium. Premium payments
in excess of the Planned Periodic Premium or premium payments received other
than at the Premium Frequency, will first be applied as policy loan repayments,
then as premium when the Policy Debt is repaid. For Policyowners with both Type
A and Type B loans, repayments of the loan will be applied first to Type B loans
and then to Type A loans. Upon repayment, the Policy's Accumulation Value
securing the repaid portion of the debt in the General Account will be
transferred to the Divisions and the General Account using the same percentages
used to allocate Net Premiums. Any outstanding Policy Debt is subtracted from
life insurance proceeds payable at the Insured's or last surviving Insured's
death, from Accumulation Value upon surrender, and from Cash Value payable at
maturity.
OTHER MATTERS
Voting Rights. To the extent required by law, Chubb Life will vote
the Trust shares held in the various Divisions at regular and special
shareholder meetings of the Trust in accordance with instructions received from
persons having voting interests in Separate Account C. If, however, the 1940 Act
or any regulation thereunder should be amended or if the present interpretation
thereof should change and, as a result, Chubb Life determines that it is
permissible to vote the Trust shares in its own right, it may elect to do so.
The number of votes on which each Policyowner has the right to instruct will be
determined by dividing the Policy's Accumulation Value in a Division by the net
asset value per share of the corresponding Portfolio in which the Division
invests, or as otherwise required by law. Fractional shares will be counted. The
number of votes on which the Policyowner has the right to instruct will be
determined as of the date coincident with the date established by the Trust for
determining shareholders eligible to vote at the meeting of the Trust. Voting
instructions will be solicited by written communications prior to such meeting
in accordance with procedures established by the Trust. Chubb Life will vote
Trust shares as to which no instructions are received in proportion to the
voting instructions which are received with respect to all Policies
participating in the Trust in accordance with applicable law. Each person having
a voting interest will receive proxy material, reports and other materials
relating to the Trust. The shares held by Chubb Life, including shares for which
no voting instructions have been received, shares held in Separate Account C
representing charges imposed by Chubb Life against Separate Account C under the
Policies and shares held by Chubb Life that are not otherwise attributable to
Policies, will also be voted by Chubb Life in proportion to instructions
received from the owners of variable life insurance policies funded through
Separate Account C. Chubb Life reserves the right to vote any or all such shares
at its discretion to the extent consistent with then current interpretations of
the 1940 Act and rules thereunder.
Chubb Life may, when required by state insurance regulatory
authorities, disregard voting instructions if the
<PAGE>
instructions require that shares be voted so as to cause a change in
subclassification or investment objective of the Trust or disapprove an
investment advisory contract of the Trust. In addition, Chubb Life may disregard
voting instructions in favor of changes initiated by a Policyowner in the
investment policy or the investment adviser of the Trust if Chubb Life
reasonably disapproves of such changes. A change would be disapproved only if
the proposed change is contrary to state law or prohibited by state regulatory
authorities or Chubb Life determined that the change would be inconsistent with
the investment objectives of Separate Account C or would result in the purchase
of securities for Separate Account C which vary from the general quality and
nature of investments and investment techniques utilized by other separate
accounts created by Chubb Life or any affiliate of Chubb Life which have similar
investment objectives. In the event that Chubb Life does disregard voting
instructions, a summary of that action and the reason for such actions will be
included in the next semi-annual report to the Policyowner.
Additions, Deletions or Substitutions of Investments. Chubb Life
reserves the right, subject to compliance with applicable law, to make additions
to, deletions from, or substitutions for the shares held by any Division or
which any Division may purchase. If shares of the Trust should no longer be
available for investment or if, in the judgment of Chubb Life's management,
further investment in shares of the Trust should become inappropriate in view of
the purposes of the Policy, Chubb Life may substitute shares of any other
investment company for shares already purchased, or to be purchased in the
future under the Policies. No substitution of securities will take place without
notice to and consent of Policyowners and without prior approval of the
Commission, all to the extent required by the 1940 Act. Any surrender due to a
change in a Portfolio's investment policy will incur any applicable Surrender
Charges.
Each class of Trust shares is subject to certain investment
restrictions which may not be changed without the approval of the majority of
the holders of such class. See the accompanying Prospectus for the Trust.
Annual Report. Each year a report will be sent to the Policyowner
which shows the current Accumulation Value, Cash Value, premiums paid and all
charges since the last annual report as well as the balance of outstanding
policy loans. Chubb Life will also send to the Policyowner the reports required
by the 1940 Act.
Confirmation. Confirmation notices (or other appropriate
notification) will be mailed promptly at the time of the following transactions:
(1) policy issue;
(2) receipt of premium payments;
(3) initial allocation among Divisions on the Allocation Date;
(4) transfers among Divisions;
(5) change of premium allocation;
(6) change between Option I and Option II;
(7) increases or decreases in Specified Amount;
(8) withdrawals, surrenders or loans;
(9) receipt of loan repayments; and
(10) reinstatements; and
(11) redemptions due to insufficient funds.
<PAGE>
Limitation on Right to Contest. Chubb Life will not contest or
revoke the insurance coverage provided under the Policy, except for any
subsequent increase in Specified Amount, after the Policy has been in force
during the lifetime of each Insured for a period of two years from the date it
is issued. Any increase in the Specified Amount will not be contested after such
increase has been in force during the lifetime of each Insured for two years
following the effective date of the increase. Any increase will be contestable
within the two year period only with regard to statements concerning this
increase.
Misstatements. If the age or sex of an Insured has been misstated in
an application, including a reinstatement application, Chubb Life will adjust
the benefits payable to reflect the correct age or sex.
Suicide. The Policy does not cover the risk of suicide within two
years from the date the Policy is issued or two years from the date of any
increase in Specified Amount with respect to such increase, whether the Insured
is sane or insane, unless otherwise specified by state law. In the event of
suicide of any Insured within two years of the date the Policy is issued, the
only liability of Chubb Life will be a refund of premiums paid, without
interest, less any Policy Debt and less any withdrawal. In the event of suicide
by any Insured within two years of an increase in Specified Amount, the only
liability of Chubb Life with respect to the increase will be a refund of the
cost of insurance for such increase.
Under Chubb Heritage II, if the first death is by suicide and the
surviving Insured is classified by Chubb Life as insurable on the Policy Date,
Chubb Life will issue, upon request of the Policyowner and without evidence of
insurability, an individual policy providing coverage on the life of the
surviving Insured equal to the coverage on the Insureds for which premiums or
cost of insurance was refunded.
Beneficiaries. The original Beneficiaries and contingent
Beneficiaries are designated by the Policyowner on the application. If changed,
the primary Beneficiary or contingent Beneficiary is as shown in the latest
change filed with Chubb Life. One or more primary or contingent Beneficiaries
may be named in the application. In such case, the proceeds of the Policy will
be paid in equal shares to the survivors in the appropriate beneficiary class
unless requested otherwise by the Policyowner.
Postponement of Payments. Payment of any amount upon surrender,
withdrawal, policy loan, or benefits payable at death or maturity may be
postponed whenever: (i) the New York Stock Exchange is closed other than
customary week-end and holiday closings, or trading on the New York Stock
Exchange is restricted as determined by the Commission; (ii) the Commission by
order permits postponement for the protection of Policyowners; or (iii) an
emergency exists, as determined by the Commission, as a result of which disposal
of securities is not reasonably practical or it is not reasonably practicable to
determine the value of net assets in Separate Account C.
Assignment. Ownership of the Policy can be assigned or the Policy
can be assigned as collateral security. Chubb Life must be notified in writing
if the Policy has been assigned. Each assignment will be subject to any payments
made or action taken by Chubb Life prior to its notification of such assignment.
Chubb Life is not responsible for the validity of an assignment. A Policyowner's
rights and the rights of the Beneficiary may be affected by an assignment.
Illustration of Benefits and Values. The Policyowner may request
illustrations of Death Benefits, Accumulation Values and Cash Values at any time
after the Policy Date. Illustrations will be based on the existing Accumulation
Value and Cash Value at the time of the request and both the maximum and the
then current costs of insurance rates. Although Chubb Life does not currently
charge a fee for such illustrations, it reserves the right to charge an
administrative fee, not to exceed $25, to cover the cost of preparing the
illustrations.
Non-Participating Policy. The Policy does not share in any surplus
distributions of Chubb Life. No dividends are payable with respect to the
Policy.
<PAGE>
THE GENERAL ACCOUNT
Policyowners may allocate Net Premiums and transfer Accumulation Value to the
General Account. Because of exemptive and exclusionary provisions, interests in
the General Account have not been registered under the Securities Act of 1933
and the General Account has not been registered as an investment company under
the 1940 Act. Accordingly, neither the General Account nor any interests therein
are subject to the provisions of these Acts, and Chubb Life has been advised
that the staff of the Securities and Exchange Commission has not reviewed the
disclosures in this Prospectus relating to the General Account. Disclosures
regarding the General Account may, however, be subject to certain generally
applicable provisions of the federal securities laws relating to the accuracy
and completeness of statements made in prospectuses.
General Description. The General Account consists of all assets
owned by Chubb Life other than those in Separate Account C and other separate
accounts which have been or may be established by Chubb Life. Subject to
applicable law, Chubb Life has sole discretion over the investment of the assets
of the General Account.
A Policyowner may elect to allocate Net Premiums to the General
Account or to transfer Accumulation Value to or from the Divisions and the
General Account. The allocation or transfer of funds to the General Account does
not entitle a Policyowner to share in the investment experience of the General
Account. Instead, Chubb Life guarantees that Accumulation Value in the General
Account will accrue interest daily at an effective annual rate of at least 4%,
independent of the actual investment experience of the General Account. Chubb
Life is not obligated to credit interest at any higher rate, although Chubb Life
may, in its sole discretion, do so.
If the Policy issued as applied for is not accepted or the "free
look" is exercised, no interest will be credited and Chubb Life will retain any
interest earned on the initial Net Premium.
General Account Accumulation Value. The Accumulation Value in the
General Account on the Allocation Date is equal to the portion of the Net
Premium payments, plus interest earned, which have been paid and allocated to
the General Account, less the portion of the first monthly deduction allocated
to the General Account.
Chubb Life guarantees that interest credited to each Policyowner's
Accumulation Value in the General Account will not be less than an effective
annual rate of at least 4%. Chubb Life may, IN ITS SOLE DISCRETION, credit a
higher rate of interest, although it is not obligated to credit interest in
excess of 4% per year, and might not do so. ANY INTEREST CREDITED ON THE
POLICY'S ACCUMULATION VALUE IN THE GENERAL ACCOUNT IN EXCESS OF THE GUARANTEED
RATE OF 4% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF CHUBB LIFE. THE
POLICYOWNER ASSUMES THE RISK THAT INTEREST CREDITED MAY NOT EXCEED THE
GUARANTEED MINIMUM RATE OF 4% PER YEAR. Accumulation Value in the General
Account that equals indebtedness will be credited interest daily at an effective
annual rate of 6%. The Accumulation Value in the General Account will be
calculated on each Monthly Anniversary Date of the Policy, or on any other date
with consistent adjustments.
Chubb Life guarantees that, at any time prior to the Maturity Date,
the Accumulation Value in the General Account will not be less than the amount
of the Net Premiums allocated or Accumulation Value transferred to the General
Account, plus interest at the rate of 4% per year, plus any excess interest
which Chubb Life credits and any amounts transferred into the General Account,
less the sum of all charges allocable to the General Account and any amounts
deducted from the General Account in connection with withdrawals or transfers to
Separate Account C.
Determination of Charges. The portion of the monthly deduction
attributable to the General Account will be determined as of the actual Monthly
Anniversary Date, even if the Monthly Anniversary Date does not fall on a
Valuation Date.
Premium Deposit Fund. As a convenience to Policyowners, Chubb Life
permits Policyowners to deposit
<PAGE>
funds in a premium deposit fund ("PDF"), subject to the terms and conditions of
the appropriate agreement. Funds deposited in the PDF earn interest at a minimum
annual rates of 4%, with interest credited on each monthly anniversary date.
Interest on these funds is not tax deferred and will be annually reported on
Form 1099 to the Policyowner. An amount equal to the Planned Periodic Premium
will be transferred on the Policy date to pay premiums on the Policy.
Policyowners may withdraw all or part of the funds from the PDF at any time. No
commissions are earned or paid until premium payments are made pursuant to
transfers from the PDF.
DISTRIBUTION OF THE POLICY
The Policy will be sold by individuals who, in addition to being
licensed as life insurance agents for Chubb Life, are also registered
representatives of Chubb Securities Corporation, the principal underwriter of
the policies, or of broker-dealers who have entered into written sales
agreements with the principal underwriter. Chubb Securities Corporation is a New
Hampshire corporation organized in 1969. Chubb Securities Corporation is
registered with the Securities and Exchange Commission under the Securities and
Exchange Act of 1934 as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. Each broker-dealer with whom Chubb
Securities Corporation has executed a selling agreement will receive as a
commission the full charge of 3% imposed on premiums. Any such broker-dealers
will be registered under the Securities Exchange Act of 1934 and their
representatives selling the Policies will be authorized under applicable
insurance laws and regulations to sell insurance products of this type. It is
not expected that the compensation paid by Chubb Life in connection with such
sales will exceed that described above for sales by Chubb Securities
Corporation's registered representatives.
Chubb Life and Separate Account C have entered into a Distribution
Agreement with Chubb Securities Corporation which continues until terminated by
any party on 60 days notice. Chubb Securities Corporation is not obligated to
sell any specified amount of Policies and may not assign its responsibilities
under the Distribution Agreement. Chubb Life reimburses Chubb Securities
Corporation for its expenses under the Distribution Agreement.
Chubb Securities Corporation is engaged in the sale and distribution
of various other securities, including other flexible premium variable life
policies. It acts as principal underwriter for other flexible premium variable
life policies and variable annuity contracts issued by Chubb Life (and its
affiliated insurance companies) and for the Chubb America Fund, Inc. and the
Chubb Investment Funds, Inc. mutual funds. It sells a number of mutual fund
shares as well as shares of other securities and limited partnership interests
in both public and private limited partnerships. Mutual fund shares available
for sale by Chubb Securities Corporation are sold pursuant to non-exclusive
selling agreements with the distributors of the mutual funds.
Group or Sponsored Arrangements. Policies may be purchased under
group or sponsored arrangements, as well as on an individual basis. A "group
arrangement" includes a program under which a trustee, employer or similar
entity purchases individual Policies covering a group of individuals on a group
basis. Examples of such arrangements are employer-sponsored benefit plans and
deferred compensation plans. A "sponsored arrangement" includes a program
under which an employer permits group solicitation of its employees or an
association permits group solicitation of its members for the purchase of
Policies on an individual basis.
Chubb Life may reduce the following types of charges for Policies
issued in connection with group or sponsored arrangements: the sales charge, the
cost of insurance charge, surrender or withdrawal charges, administrative
charges for withdrawal or transfer, the guaranteed death benefit charge and
charges for optional rider benefits. Chubb Life may also issue Policies in
connection with group or sponsored arrangements on a "non-medical" or
guaranteed issue basis. Due to the underwriting criteria established for
Policies issued on a non-medical, guaranteed issue basis, actual monthly cost of
insurance charges may be higher than the current cost of insurance charges under
otherwise identical Policies that are medically underwritten. In addition, Chubb
Life may also specify different minimum Specified Amounts at issue for Policies
issued in connection with group or sponsored arrangements.
<PAGE>
Certain charges or underwriting requirements set forth in this
Prospectus may also be reduced or eliminated for Policies issued in connection
with an exchange of another Chubb Life policy or contract or policies or
contracts of any affiliates of Chubb Life.
The amounts of any reduction, the charges to be reduced, the
elimination or modification of underwriting requirements, and the criteria for
applying a reduction or modification will generally reflect the reduced sales
and administrative effort, costs and differing mortality experience appropriate
to the circumstances giving rise to the reduction or modification. The charges
will be reduced in accordance with Chubb Life's company practice in effect when
the Policy is issued. The elimination or modification of underwriting
requirements will be done in accordance with Chubb Life's administrative
procedures with respect to underwriting when the Policy is issued. Reductions
and modifications will not be made where prohibited by applicable law and will
not be unfairly discriminatory against any person including the purchasers to
whom the reduction or modification applies and all other Owners of the Policy.
<PAGE>
MANAGEMENT OF CHUBB LIFE
Executive Officers and Directors of Chubb Life
Directors
<TABLE>
<CAPTION>
Principal Occupation and
------------------------
Name Business Address
- ---- ----------------
<C> <S>
John C. Beck.......... Managing Partner
Beck, Mack & Oliver
330 Madison Avenue-31st Floor
New York, NY 10017-5001
*Percy Chubb, III..... Vice Chairman
The Chubb Corporation
(also serves as Vice Chairman of Chubb Life Insurance
Company of America)
15 Mountain View Road
P.O. Box 1615
Warren, New Jersey 07061-1615
Joel J. Cohen......... Managing Director
Donaldson, Lufkin & Jenrette Securities Corporation
140 Broadway, 49th Floor
New York, NY 10005
Henry U. Harder....... Retired, Former Chairman
The Chubb Corporation
15 Mountain View Road
P.O. Box 1615
Warren, New Jersey 07061-1615
David H. Hoag......... Chairman, President & CEO
The LTV Corporation
25 West Prospect Avenue
Cleveland, OH 44115
Robert V.Lindsay...... Former President
J.P. Morgan & Co., Inc.
Altamont Road
Millbrook, NY 12545
Thomas C. MacAvoy..... Professor
Darden Graduate School of Business Administration
University of Virginia
Box 6550
Charlottesville, VA 22906-6550
Gertrude G. Michelson R.H. Macy & Co., Inc.
Herald Square--13th Floor
</TABLE>
<PAGE>
<TABLE>
<C> <S>
New York, NY 10001
*Dean R. O'Hare....... Chairman and President
The Chubb Corporation
(also serves as Chairman of Chubb Life Insurance Company
of America)
15 Mountain View Road
P.O. Box 1615
Warren, NJ 07061-1615
Warren B. Rudman...... Partner
Paul, Weiss, Rifkind, Wharton & Garrison
1615 L Street, N.W.,
Suite 1300
Washington, D.C. 20036
Sir David G. Scholey,CBE Chairman
S.G. Warburg Group plc
One Finsbury Avenue
London EC2M 2PA England
Raymond G.H. Seitz...... Former Ambassador of the United States of America
10 Trevor Square
London SW7 IDT, England
Lawrence M. Small....... President and Chief Operating Officer
Federal National Mortgage Association
3900 Wisconsin Avenue, N.W.
Washington, DC 20016
Richard D. Wood......... Former Chairman
Eli Lilly and Company
Lilly Corporate Center
Indianapolis, IN 46285
</TABLE>
<PAGE>
-------------
*Executive Officer of Chubb Life
Executive Officers (Other Than Directors)
<TABLE>
<CAPTION>
Name
- ----
<S> <C>
Theresa M. Stone........... President and Chief Executive Officer
David S. Fowler............ Vice Chairman
Randell G. Craig........... Executive Vice President and Chief Operating
Officer
Richard V. Werner.......... Executive Vice President and Chief Financial
Officer
Ronald R. Angarella........ Senior Vice President
Frederick H. Condon........ Senior Vice President, General Counsel and
Secretary
Charles C. Cornelio........ Senior Vice President, Assistant Secretary and
Chief Administrative Officer
Ronald H. Emery............ Vice President
Gregory W. Johnson......... Senior Vice President
Vincent G. Mace, Jr........ Senior Vice President, Group Actuary
Warren L. Reynolds......... Senior Vice President
Arthur V. Anderson......... Vice President and Corporate Actuary
Douglas H. Blampied........ Vice President
Thomas M. Bodrogi.......... Vice President
Mark Connolly.............. Vice President
Edwin E. Creter............ Vice President
Ned I. Gerstman............ Vice President
Glenn Hilsinger............ Vice President
Donald M. Kane............. Vice President
Patrick A. Lang............ Vice President
Deborah A. Leitch.......... Vice President
Justin J. Manjorin......... Vice President
Donna L. Metcalf........... Vice President
Christopher J. Moakley.......... Vice President
Thomas E. Murphy, Jr. M.D....... Vice President, Associate Medical Director
Herbert B. Olson................ Vice President and Group Actuary
Robert R. Rodgers............... Vice President
Russell C. Simpson.............. Vice President and Treasurer
James S. Smith.................. Vice President
William A. Spencer.............. Vice President
John A. Thomas.................. Vice President
Ernest J. Tsouros............... Vice President
David G. Underwood, MD.......... Vice President and Medical Director
John W. Wells................... Vice President
</TABLE>
The officers and employees of Chubb Life who have access to the assets of
Separate Account C are covered by a fidelity bond issued by Aetna Casualty and
Surety Company in the amount of $35,000,000.
<PAGE>
STATE REGULATION OF CHUBB LIFE
Chubb Life Insurance Company of America is governed under the laws of
the state of New Hampshire and is subject to regulation by the Insurance
Commissioner of New Hampshire. An annual statement is filed with the New
Hampshire Insurance Commissioner on or before March 1 of each year covering the
operations and reporting on the financial condition of Chubb Life as of December
31 of the preceding year. Periodically, the Commissioner examines the assets and
liabilities of Chubb Life and Separate Account C and verifies their adequacy and
a full examination of Chubb Life's operations is conducted by the Commissioner
at least every five years.
In addition, Chubb Life is subject to the insurance laws and
regulations of other states within which it is licensed to operate. Generally,
the insurance department of any other state applies the laws of the state of
domicile in determining permissible investments.
FEDERAL TAX MATTERS
Tax Considerations. The following description is a brief summary of
some of the tax rules, primarily related to federal income taxes under the Code,
which, in the opinion of Chubb Life, are currently in effect and is not intended
as tax advice. Chubb Life believes that, as discussed below, the Policy will in
general receive favorable tax treatment under the Code. Because there are issues
as to which the law is still developing or may change, however, and because this
information is not intended as tax advice, Chubb Life recommends that the
Policyowner or prospective Policyowner rely only on the advice of a qualified
tax adviser.
Policy Proceeds. The Policy contains provisions not found in
traditional life insurance policies providing only for fixed benefits. However,
under the Code, the Policy should qualify as a life insurance contract for
federal income tax purposes, with the result that all Death Benefits paid under
the Policy will generally be fully excludable from the gross income of the
Policy's Beneficiary for federal income tax purposes and, as long as the Policy
remains in force, income earned on the Policy will not be subject to federal
income tax unless and until there is a distribution from the Policy.
Policyowners should consult with their own tax advisers in this regard.
The federal income tax treatment of a distribution from the Policy
will depend on whether a Policy is a life insurance policy and also if it is
determined to be a "modified endowment contract," as defined by the Code.
Chubb Life will notify a Policyowner if the amount of premiums paid in would
cause a Policy to be a modified endowment contract and will allow a refund of
the excess premium. The Policyowner may also choose to have the Policy treated
as a modified endowment contract.
A modified endowment contract is a life insurance policy which fails
to meet a "seven-pay" test. In general, a policy will fail the seven-pay test
if the cumulative amount of premiums paid under the policy at any time during
the first seven policy years exceeds a calculated premium level. The calculated
seven-pay premium level is based on a hypothetical policy issued on the same
insured persons and for the same initial death benefit which, under specified
conditions (which include the absence of expense and administrative charges),
would be fully paid for after seven years. Your policy will be treated as a
modified endowment unless the cumulative premiums paid under your policy, at all
times during the first seven policy years, are less than or equal to the
cumulative seven-pay premiums which would have been paid under the hypothetical
policy on or before such times.
Whenever there is a "material change" under a policy, it will
generally be treated as a new contract for purposes of determining whether the
policy is a modified endowment, and subject to a new seven-pay premium period
and a new seven-pay limit. The new seven-pay limit would be determined taking
into account, under a downward adjustment formula, the Policy Account Value of
the policy at the time of such change. A materially changed policy would be
considered a modified endowment if it failed to satisfy the new seven-pay limit.
A material change could occur as a result of a change in death benefit option,
the selection of additional benefits, the restoration of a
<PAGE>
terminated policy and certain other changes.
If the benefits under your policy are reduced, for example, by
requesting a decrease in Face Amount, or in some cases by making partial
withdrawals, terminating additional benefits under a rider, changing the death
benefit option, or as a result of policy termination, the calculated seven-pay
premium level will be redetermined based on the reduced level of benefits and
applied retroactively for purposes of the seven-pay test. If the premiums
previously paid are greater than the recalculated seven-pay premium level limit,
the policy will become a modified endowment. Generally, a life insurance policy
which is received in exchange for a modified endowment or a modified endowment
which terminates and is restored, will also be considered a modified
endowment.
If a policy is deemed to be a modified endowment contract, any
distribution from the policy will be taxed in a manner comparable to
distributions from annuities (i.e., on an "income-first" basis); distributions
for this purpose include a loan or partial withdrawal. Any such distributions
will be considered taxable income to the extent accumulation value under the
policy exceeds investment in the policy.
A 10% penalty tax will apply to the taxable portion of such a
distribution. No penalty will apply to distributions (i) to taxpayers 59 1/2
years of age or older, (ii) in the case of a disability which can be expected to
result in death or to be of indefinite duration or (iii) received as part of a
series of substantially equal periodic annuity payments for the life (or life
expectancy) of the taxpayer or the joint lives (or joint life expectancies) of
the taxpayer and his beneficiary.
To the extent a policy becomes a modified endowment contract, any
distribution, including any loan, which occurs in the policy year it becomes a
modified endowment contract and in any year thereafter, will be taxable income
to the policyowner. Also, any distributions within two years before a policy
becomes a modified endowment contract will also be income taxable to the
policyowner. The Secretary of the Treasury has been authorized to prescribe
rules which would similarly treat other distributions made in anticipation of a
policy becoming a modified endowment contract. For purposes of determining the
amount of any distribution includable in income, all modified endowment contract
policies that fail the above-described tests which are issued by the same
insurer, or its affiliates, to the same policyowner during any calendar year are
treated as one contract. The Secretary of the Treasury is also authorized to
issue regulations in this connection.
In addition to the distribution rules for modified endowment
contracts, the Code and proposed regulations thereunder require that reasonable
mortality and other charges be used in satisfying the definition of life
insurance. The death benefit under a policy which meets this definition will
continue to be excluded from the beneficiary's gross income. Chubb Life believes
that the Policies meet this definition. However, there is uncertainty as to the
meaning of "reasonable mortality charges" and resultant uncertainties as to
Chubb Heritage II's qualification if a different definition is adopted by the
Treasury Department. As long as a Policy does not violate the tests described
above, it will not fail to meet the tests of the Code and the general tax
provisions described herein still apply.
The foregoing summary does not purport to be complete or to cover all
situations, and, as always, there is some degree of uncertainty with respect to
the application of the current tax laws. In particular, prior to the issuance of
final regulations or other clarifications under certain sections of the Code,
there may be some uncertainties about the tax treatment of the Policy with
respect to the mortality charges, substandard risks and any extension of the
Maturity Date. In addition to the provisions discussed above, the United States
Congress may consider other legislation which, if enacted, could adversely
affect the tax treatment of life insurance policies. Also, the Treasury
Department may amend current regulations or adopt new regulations with respect
to this and other Code provisions. Therefore, Policyowners are advised to
consult a tax adviser or attorney for more complete tax information,
specifically regarding the applicability of the Code provisions to an individual
Policyowner's situation.
Under normal circumstances, the Policy is not a modified endowment
contract and loans received under the Policy will be construed as indebtedness
of the Policyowner in the same manner as loans under a fixed benefit life
insurance policy and no part of any loan under the Policy is expected to
constitute income to the Policyowner.
<PAGE>
Policyholders are advised to consult a tax adviser or attorney regarding the
deduction of interest paid on loans.
Even if the Policy is not a modified endowment contract, a partial
withdrawal together with a reduction in death benefits during the first 15
policy years may create taxable income for the Policyowner. The amount of that
taxable income is determined under a complex formula and it may be equal to part
or all of, but not greater than, the income on the contract. A partial
withdrawal made after the first 15 policy years will be taxed on a recovery of
premium-first basis, and will only be subject to federal income tax to the
extent such proceeds exceed the total amount of premiums the Policyowner has
paid that have not been previously withdrawn.
If a Policyowner makes a partial withdrawal, surrender, loan or
exchange of the Policy, Chubb Life may be required to withhold federal income
tax from the portion of the money received by the Policyowner that is includable
in the Policyowner's federal gross income. A Policyowner who is not a
corporation may elect not to have such tax withheld; however, such election must
be made before Chubb Life makes the payment. In addition, if a Policyowner fails
to provide Chubb Life with a correct taxpayer identification number (usually a
social security number) or if the Treasury notifies Chubb Life that the taxpayer
identification number which has been provided is not correct, the election not
to have such taxes withheld will not be effective. In any case, a Policyowner is
liable for payment of the federal income tax on the taxable portion of money
received, whether or not an election to have federal income tax withheld is
made. If a Policyowner elects not to have federal income tax withheld, or if the
amount withheld is insufficient, then the Policyowner may be responsible for
payment of estimated tax. A Policyowner may also incur penalties under the
estimated tax rules if the withholding and estimated tax payments are
insufficient. Chubb Life suggests that Policyowners consult with a tax adviser
or attorney as to the tax implications of these matters.
In the event that a Policy is owned by the trustee under a pension or
profit sharing plan, or similar deferred compensation arrangement, the tax
consequences of ownership or receipt of proceeds under the Policy could differ
from those stated herein. However, if ownership of such a Policy is transferred
from the plan to a plan participant (upon termination of employment, for
example), the Policy will be subject to all of the federal tax rules described
above. A Policy owned by a trustee under such a plan may be subject to
restrictions under ERISA and a tax adviser should be consulted regarding any
applicable ERISA requirements.
The Policy may also be used in various arrangements, including
nonqualified deferred compensation or salary continuation plans, split dollar
insurance plans, executive bonus plans and others, where the tax consequences
may vary depending on the particular facts and circumstances of each individual
arrangement. A tax adviser should be consulted regarding the tax attributes of
any particular arrangement where the value of it depends in part on its tax
consequences.
Federal estate and local estate, inheritance and other tax
consequences of ownership or receipt of policy proceeds depend upon the
circumstances of each Policyowner and Beneficiary.
Current Treasury regulations set standards for diversification of the
investments underlying variable life insurance policies in order for such
policies to be treated as life insurance. Chubb Life believes it presently is in
compliance with the diversification requirements as set forth in the regulations
and intends to remain in compliance with such diversification requirements. If
the diversification requirements are not satisfied, the Policy would not be
treated as a life insurance contract. As a consequence to the Policyowner,
income earned on a Policy would be taxable to the Policyowner in the calendar
quarter in which the diversification requirements were not satisfied, and for
all subsequent calendar quarters.
The Secretary of the Treasury may issue a regulation or a ruling which
will prescribe the circumstances in which a policyowner's control of the
investments of a segregated asset account may cause the policyowner, rather than
the insurance company, to be treated as the owner of the assets of the account.
The regulation or ruling could impose requirements that are not reflected in the
Policy, relating, for example, to such elements of policyowner control as
premium allocation, investment selection, transfer privileges and investments in
a division focusing on a particular investment sector. It has also been
suggested that, in certain circumstances, control over the investment adviser
might
<PAGE>
constitute prohibited policyowner control. Chubb Life believes that policyowner
control will not exist under the Policy. Because failure to comply with any such
regulation or ruling presumably would cause earnings on a Policyowner's interest
in Separate Account C to be includable in the Policyowner's gross income in the
year earned, Chubb Life has reserved certain rights to alter the Policy and
investment alternatives so as to comply with such regulation or ruling. Chubb
Life believes that any such regulation or ruling would apply prospectively.
Since the regulation or ruling has not been issued, there can be no assurance as
to the content of such regulation or ruling or even whether application of the
regulation or ruling will be prospective. For these reasons, Policyowners are
urged to consult with their own tax advisers.
A Policyowner may elect to exchange Chubb Heritage II for two
individual Chubb Heritage I policies provided the conditions under the Policy
Exchange Option Rider are met. This could have adverse tax consequences
including, but not limited to, the recognition of taxable income in an amount up
to any taxable gain in the Policy at the time of the exchange.
Charge for Chubb Life Income Taxes. Chubb Life is presently taxed as
a life insurance company under the provisions of the Code. The Code specifically
provides for adjustments in reserves for variable policies, and Chubb Life will
include flexible premium life insurance operations in its tax return in
accordance with these rules.
Currently no charge is made against Separate Account C for Chubb
Life's federal income taxes, or provisions for such taxes, that may be
attributable to Separate Account C. Chubb Life may charge each Division for its
portion of any income tax charged to Chubb Life on the Division or its assets.
See "CHARGES AND DEDUCTIONS--Premium Charges" for a description of the Federal
DAC tax charge deducted from premium payments. Under present laws, Chubb Life
may incur state and local taxes (in addition to premium taxes) in several
states. At present, these taxes are not significant. If they increase, however,
Chubb Life may decide to make charges for such taxes or provisions for such
taxes against Separate Account C. Chubb Life would retain any investment
earnings on any tax charges accumulated in a Division. Any such charges against
Separate Account C or its Divisions could have an adverse effect on the
investment experience of such Division.
EMPLOYMENT BENEFIT PLANS
Employers and employee organizations should consider, in consultation
with counsel, the impact of Title VII of the Civil Rights Act of 1964 on the
purchase of a Policy in connection with an employment-related insurance or
benefit plan. The United States Supreme Court held, in a 1983 decision, that,
under Title VII, optional annuity benefits under a deferred compensation plan
could not vary on the basis of sex.
LEGAL PROCEEDINGS
There are no legal proceedings to which Separate Account C is a party
or to which the assets of any of the Divisions are subject. Chubb Life is not
involved in any litigation that is of material importance in relation to its
total assets or that relate to Separate Account C.
<PAGE>
EXPERTS
Actuarial matters included in this Prospectus have been examined by
Michael J. LeBoeuf, FSA, MAAA as stated in the opinion filed as an exhibit to
the Registration Statement.
REGISTRATION STATEMENT
A Registration Statement has been filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, with respect
to the Policy offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement and the amendments and
exhibits to the Registration Statement to all of which reference is made for
further information concerning Separate Account C, Chubb Life and the Policy
offered hereby. Statements contained in this Prospectus as to the contents of
the Policy and other legal instruments are summaries. For a complete statement
of the terms thereof reference is made to such instruments as filed.
FINANCIAL STATEMENTS
The financial statements of Chubb Life which are included in the
Prospectus should be considered only as bearing on the ability of Chubb Life to
meet its obligations under the Policy. They should not be considered as bearing
on the investment experience of the assets held in Separate Account C.
<PAGE>
(Financial Statements of Chubb Life Insurance Company
of America to be supplied here)
<PAGE>
Financial Statements of Chubb Separate Account C to be supplied here)
<PAGE>
APPENDIX A
ILLUSTRATIONS OF ACCUMULATION VALUES
CASH VALUES AND DEATH BENEFITS
Following are a series of tables that illustrate how the accumulation
values, cash values and death benefits of a policy change with the investment
performance of the Trust. The tables show how the accumulation values, cash
values and death benefits of a Policy issued to an insured(s) of a given age(s)
and given premium would vary over time if the return on the assets held in each
Portfolio of the Trust were a constant gross annual rate of 0%, 6%, and 12%. The
tables on pages A-2 through A-7 illustrate a Chubb Heritage I Policy issued to a
male, age 35, under a standard rate non-smoker underwriting risk classification.
The tables on pages A-8 through A-13 illustrate a Chubb Heritage II Policy
issued to a male, age 40, under a standard rate non-smoker underwriting risk
classification and a female, age 35, under a standard rate non-smoker
underwriting risk classification. The accumulation values, cash values and death
benefits would be different from those shown if the returns averaged 0%, 6%, and
12% over a period of years, but fluctuated above and below those averages for
individual policy years.
The amount of the accumulation value exceeds the cash value during the
first five policy years due to the surrender charge. For policy years six and
after, the accumulation value and cash value are equal, since the surrender
charge has been reduced to zero.
The second column shows the accumulation value of the premiums paid at
the stated interest rate. The third and sixth columns illustrate the
accumulation values and the fourth and seventh columns illustrate the cash
values of the Policy over the designated period. The accumulation values shown
in the third column and the cash values shown in the fourth column assume the
monthly charge for cost of insurance is based upon the current cost of insurance
rates and assume a monthly deduction adjustment which varies based on the
Specified Amount of the Policy. The current cost of insurance rates, which may
be modified at any time, are based on the sex, issue age, policy year, and
rating class of the Insured(s). The accumulation values shown in the sixth
column and the cash values shown in the seventh column assume the monthly charge
for cost of insurance is based upon the maximum cost of insurance rates
allowable, which are based on the Commissioner's 1980 Standard Ordinary
Mortality Table. The fifth and eighth columns illustrate the death benefit of a
Policy over the designated period. The illustrations of death benefits reflect
the same assumptions as the accumulation values and cash values. The death
benefit values also vary between tables, depending upon whether Option I or
Option II death benefits are illustrated.
The amounts shown for the death benefit, accumulation values, and cash
values reflect the fact that the net investment return of the Divisions of
Separate Account C is lower than the gross rates of return on the assets in the
Trust, as a result of expenses paid by the Trust and charges levied against the
Divisions of Separate Account C.
The policy values shown take into account a daily investment advisory
fee equivalent to the maximum annual rate of .62% of the aggregate average daily
net assets of the Portfolios of the Trust plus an assumed charge of .30% of the
aggregate average daily net assets to cover expenses incurred by the Trust. The
.62% investment advisory fee is an average of the individual investment advisory
fees of the five Portfolios. See the attached Prospectus for the Trust for a
description of the assumption of expenses of the Trust in excess of specified
annual rates averaging .92%. The policy values also take into account a daily
charge to each Division of Separate Account C for assuming mortality and expense
risks which is equivalent to a charge at an annual rate of .65% of the average
net assets of the Divisions of Separate Account C. After deduction of these
amounts, the illustrated gross investment rates of 0%, 6%, and 12% correspond to
approximate net annual rates of -1.57%, 4.43%, and 10.43%, respectively.
The hypothetical values shown in the tables do not reflect any charges
for federal income taxes or other taxes other than the DAC tax. However, if, in
the future, any additional charges are made, the gross annual investment
<PAGE>
rate of return would have to exceed the stated investment rates by a sufficient
amount to cover the tax charges in order to produce the accumulation values,
cash values and death benefits illustrated.
The tables illustrate the policy values that would result based on
hypothetical investment rates of return if premiums are paid in full at the
beginning of each year, if all net premiums are allocated to Separate Account C,
and if no policy loans have been made. The values would vary from those shown if
the assumed annual premium payments were paid in installments during a year. The
values would also vary if the Policyowner varied the amount or frequency of
premium payments. The tables also assume that the Policyowner has not requested
an increase or decrease in Specified Amount, that no withdrawals have been made
and no surrender charges imposed, and that no transfers have been made and no
transfer charges imposed.
Upon request, Chubb Life will provide, without charge, a comparable
illustration based upon the proposed insured's age, sex and rating class, the
Specified Amount requested, the proposed frequency and amount of premium
payments and any available riders requested. Existing policyowners may request
illustrations based on existing cash value at the time of request. Chubb Life
has reserved the right to charge an administrative fee of up to $25 for such
illustrations.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.43% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,889 11,289 1,000,000 10,598 9,998 1,000,000
2 25,830 24,942 24,462 1,000,000 22,240 21,760 1,000,000
3 39,721 39,222 38,862 1,000,000 35,006 34,646 1,000,000
4 54,308 54,902 54,662 1,000,000 49,010 48,770 1,000,000
5 69,623 72,153 72,033 1,000,000 64,367 64,247 1,000,000
6 85,704 91,142 91,142 1,000,000 81,217 81,217 1,000,000
7 102,589 112,047 112,047 1,000,000 99,695 99,695 1,000,000
8 120,319 135,064 135,064 1,000,000 119,983 119,983 1,000,000
9 138,935 160,437 160,437 1,000,000 142,256 142,256 1,000,000
10 158,481 188,428 188,428 1,000,000 166,765 166,765 1,000,000
11 179,006 219,332 219,332 1,000,000 193,737 193,737 1,000,000
12 200,556 253,431 253,431 1,000,000 223,440 223,440 1,000,000
13 223,184 291,071 291,071 1,000,000 256,176 256,176 1,000,000
14 246,943 332,626 332,626 1,000,000 292,283 292,283 1,000,000
15 271,890 378,525 378,525 1,000,000 332,129 332,129 1,000,000
16 298,084 429,258 429,258 1,000,000 376,143 376,143 1,000,000
17 325,589 485,339 485,339 1,000,000 424,782 424,782 1,000,000
18 354,468 547,360 547,360 1,000,000 478,566 478,566 1,000,000
19 384,791 616,006 616,006 1,010,250 (3) 538,101 538,101 1,000,000
20 416,631 691,909 691,909 1,086,297 (3) 604,069 604,069 1,000,000
25 601,361 1,206,747 1,206,747 1,617,041 (3) 1,053,653 1,053,653 1,411,895 (3)
30 837,129 2,046,775 2,046,775 2,497,066 (3) 1,783,123 1,783,123 2,175,410 (3)
35 1,138,036 3,410,991 3,410,991 3,956,750 (3) 2,957,401 2,957,401 3,430,585 (3)
40 1,522,077 5,634,671 5,634,671 6,029,098 (3) 4,859,059 4,859,059 5,199,193 (3)
45 2,012,222 9,292,629 9,292,629 9,757,260 (3) 7,978,349 7,978,349 8,377,266 (3)
50 2,637,785 15,172,546 15,172,546 15,931,173 (3) 12,926,274 12,926,274 13,572,588 (3)
55 3,436,179 24,475,817 24,475,817 25,699,608 (3) 20,591,742 20,591,742 21,621,329 (3)
60 4,455,155 39,656,182 39,656,192 40,052,744 (3) 33,058,411 33,058,411 33,388,995 (3)
65 5,755,655 65,667,815 65,667,815 65,667,815 (3) 54,754,873 54,754,873 54,754,873 (3)
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.43% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ---------------------------------------- -------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,889 11,289 1,000,000 10,598 9,998 1,000,000
2 25,830 24,942 24,462 1,000,000 22,240 21,760 1,000,000
3 39,721 39,222 38,862 1,000,000 35,006 34,646 1,000,000
4 54,308 54,902 54,662 1,000,000 49,010 48,770 1,000,000
5 69,623 72,153 72,033 1,000,000 64,367 64,247 1,000,000
6 85,704 91,142 91,142 1,000,000 81,217 81,217 1,000,000
7 102,589 112,047 112,047 1,000,000 99,695 99,695 1,000,000
8 120,319 135,064 135,064 1,000,000 119,983 119,983 1,000,000
9 138,935 160,437 160,437 1,000,000 142,256 142,256 1,000,000
10 158,481 188,428 188,428 1,000,000 166,765 166,765 1,000,000
11 179,006 219,332 219,332 1,000,000 193,737 193,737 1,000,000
12 200,556 253,431 253,431 1,000,000 223,440 223,440 1,000,000
13 223,184 291,071 291,071 1,000,000 256,176 256,176 1,000,000
14 246,943 332,626 332,626 1,000,000 292,283 292,283 1,000,000
15 271,890 378,506 378,506 1,044,677 (3) 332,129 332,129 1,000,000
16 298,084 429,002 429,022 1,145,489 (3) 376,143 376,143 1,004,302 (3)
17 325,589 484,542 484,542 1,254,964 (3) 424,525 424,525 1,099,520 (3)
18 354,468 545,527 545,527 1,369,273 (3) 477,430 477,430 1,198,349 (3)
19 384,791 612,516 612,516 1,488,414 (3) 535,242 535,242 1,300,638 (3)
20 416,631 686,035 686,035 1,619,043 (3) 589,328 598,328 1,412,054 (3)
25 601,361 1,174,415 1,174,415 2,395,807 (3) 1,009,602 1,009,602 2,059,588 (3)
30 837,129 1,937,285 1,937,285 3,448,367 (3) 1,633,000 1,633,000 2,906,740 (3)
35 1,138,036 3,109,777 3,109,777 4,913,448 (3) 2,556,116 2,556,116 4,038,663 (3)
40 1,522,077 4,882,236 4,882,236 6,932,775 (3) 3,890,439 3,890,439 5,524,423 (3)
45 2,012,222 7,516,590 7,516,590 9,846,733 (3) 5,756,724 5,756,724 7,541,308 (3)
50 2,637,785 11,378,911 11,378,911 13,882,271 (3) 8,344,277 8,344,277 10,180,018 (3)
55 3,436,179 16,996,152 16,996,152 19,715,536 (3) 11,876,652 11,876,652 13,776,916 (3)
60 4,455,155 25,210,983 25,210,983 27,984,191 (3) 16,819,264 16,819,264 18,669,383 (3)
65 5,755,655 38,675,910 38,675,910 40,222,946 (3) 23,765,496 23,765,496 24,716,116 (3)
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES
TRUST THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 6% (4.43% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ---------------------------------------- -------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,232 10,632 1,000,000 9,980 9,380 1,000,000
2 25,830 22,886 22,406 1,000,000 20,339 19,859 1,000,000
3 39,721 34,926 34,566 1,000,000 31,067 30,707 1,000,000
4 54,308 47,410 47,170 1,000,000 42,175 41,935 1,000,000
5 69,623 60,381 60,261 1,000,000 53,663 53,543 1,000,000
6 85,704 73,862 73,862 1,000,000 65,542 65,542 1,000,000
7 102,589 87,869 87,869 1,000,000 77,806 77,806 1,000,000
8 120,319 102,420 102,420 1,000,000 90,478 90,478 1,000,000
9 138,935 117,543 117,543 1,000,000 103,554 103,554 1,000,000
10 158,481 133,248 133,248 1,000,000 117,058 117,058 1,000,000
11 179,006 149,589 149,589 1,000,000 130,982 130,982 1,000,000
12 200,556 166,567 166,567 1,000,000 145,345 145,345 1,000,000
13 223,184 184,209 184,209 1,000,000 160,171 160,171 1,000,000
14 246,943 202,530 202,530 1,000,000 175,475 175,475 1,000,000
15 271,890 221,553 221,553 1,000,000 191,258 191,258 1,000,000
16 298,084 241,320 241,320 1,000,000 207,538 207,538 1,000,000
17 325,589 261,831 261,831 1,000,000 224,298 224,298 1,000,000
18 354,468 283,096 283,096 1,000,000 241,523 241,523 1,000,000
19 384,791 305,161 305,161 1,000,000 259,210 259,210 1,000,000
20 416,631 328,038 328,038 1,000,000 277,337 277,337 1,000,000
25 601,361 455,706 455,706 1,000,000 374,631 374,631 1,000,000
30 837,129 608,857 608,857 1,000,000 482,974 482,974 1,000,000
35 1,138,036 798,003 798,003 1,000,000 602,430 602,430 1,000,000
40 1,522,077 1,044,509 1,044,509 1,117,625 (3) 732,862 739,862 1,000,000
45 2,012,222 1,355,354 1,355,354 1,423,122 (3) 923,168 923,168 1,000,000
50 2,637,785 1,728,429 1,728,429 1,814,850 (3) 1,186,691 1,186,691 1,246,026 (3)
55 3,436,179 2,165,255 2,165,255 2,273,518 (3) 1,487,141 1,487,141 1,561,498 (3)
60 4,455,155 2,711,988 2,711,988 2,739,108 (3) 1,865,265 1,865,265 1,883,918 (3)
65 5,755,655 3,456,221 3,456,221 3,456,221 (3) 2,396,803 2,396,803 2,396,803 (3)
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES
TRUST THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 6% (4.43% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT (2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,232 10,632 1,000,000 9,980 9,380 1,000,000
2 25,830 22,886 22,406 1,000,000 20,339 19,859 1,000,000
3 39,721 34,926 34,566 1,000,000 31,067 30,707 1,000,000
4 54,308 47,410 47,170 1,000,000 42,175 41,935 1,000,000
5 69,623 60,381 60,261 1,000,000 53,663 53,543 1,000,000
6 85,704 73,862 73,862 1,000,000 65,542 65,542 1,000,000
7 102,589 87,869 87,869 1,000,000 77,806 77,806 1,000,000
8 120,319 102,420 102,420 1,000,000 90,478 90,478 1,000,000
9 138,935 117,543 117,543 1,000,000 103,554 103,554 1,000,000
10 158,481 133,248 133,248 1,000,000 117,058 117,058 1,000,000
11 179,006 149,589 149,589 1,000,000 130,982 130,982 1,000,000
12 200,556 166,567 166,567 1,000,000 145,345 145,345 1,000,000
13 223,184 184,209 184,209 1,000,000 160,171 160,171 1,000,000
14 246,943 202,530 202,530 1,000,000 175,475 175,475 1,000,000
15 271,890 221,553 221,553 1,000,000 191,258 191,258 1,000,000
16 298,084 241,320 241,320 1,000,000 207,538 207,538 1,000,000
17 325,589 261,831 261,831 1,000,000 224,298 224,298 1,000,000
18 354,468 283,096 283,096 1,000,000 241,523 241,523 1,000,000
19 384,791 305,161 305,161 1,000,000 259,210 259,210 1,000,000
20 416,631 328,038 328,038 1,000,000 277,337 277,337 1,000,000
25 601,361 455,706 455,706 1,000,000 374,631 374,631 1,000,000
30 837,129 607,707 607,707 1,081,718 (3) 482,974 482,974 1,000,000
35 1,138,036 781,696 781,696 1,235,080 (3) 602,430 602,430 1,000,000
40 1,522,077 975,214 975,214 1,384,804 (3) 737,165 737,165 1,046,774 (3)
45 2,012,222 1,185,093 1,185,093 1,552,472 (3) 873,884 873,884 1,144,788 (3)
50 2,637,785 1,408,456 1,408,456 1,718,316 (3) 1,008,611 1,008,611 1,230,505 (3)
55 3,436,179 1,644,401 1,644,401 1,907,505 (3) 1,137,833 1,137,833 1,319,886 (3)
60 4,455,155 1,899,760 1,899,760 2,108,734 (3) 1,272,413 1,272,413 1,412,378 (3)
65 5,755,655 2,262,145 2,262,145 2,352,631 (3) 1,415,829 1,415,829 1,472,462 (3)
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES
TRUST THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.57% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,574 9,974 1,000,000 9,362 8,762 1,000,000
2 25,830 20,910 20,430 1,000,000 18,514 18,034 1,000,000
3 39,721 30,955 30,595 1,000,000 27,433 27,073 1,000,000
4 54,308 40,754 40,514 1,000,000 36,115 35,875 1,000,000
5 69,623 50,332 50,212 1,000,000 44,545 44,425 1,000,000
6 85,704 59,693 59,693 1,000,000 52,720 52,720 1,000,000
7 102,589 68,833 68,833 1,000,000 60,619 60,619 1,000,000
8 120,319 77,747 77,747 1,000,000 68,247 68,247 1,000,000
9 138,935 86,441 86,441 1,000,000 75,583 75,583 1,000,000
10 158,481 94,902 94,902 1,000,000 82,636 82,636 1,000,000
11 179,006 103,144 103,144 1,000,000 89,374 89,374 1,000,000
12 200,556 111,128 111,128 1,000,000 95,787 95,787 1,000,000
13 223,184 118,852 118,852 1,000,000 101,866 101,866 1,000,000
14 246,943 126,295 126,295 1,000,000 107,599 107,599 1,000,000
15 271,890 133,451 133,451 1,000,000 112,960 112,960 1,000,000
16 298,084 140,334 140,334 1,000,000 117,939 117,939 1,000,000
17 325,589 146,901 146,901 1,000,000 122,484 122,484 1,000,000
18 354,468 153,116 153,116 1,000,000 126,541 126,541 1,000,000
19 384,791 158,979 158,979 1,000,000 130,073 130,073 1,000,000
20 416,631 164,449 164,449 1,000,000 133,013 133,013 1,000,000
25 601,361 184,725 184,725 1,000,000 136,983 136,983 1,000,000
30 837,129 187,488 187,488 1,000,000 115,002 115,002 1,000,000
35 1,138,036 161,198 161,198 1,000,000 45,616 45,616 1,000,000
40 1,522,077 83,045 83,045 1,000,000 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.57% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ---------------------------------------- -------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT (2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,574 9,974 1,000,000 9,362 8,762 1,000,000
2 25,830 20,910 20,430 1,000,000 18,514 18,034 1,000,000
3 39,721 30,955 30,595 1,000,000 27,433 27,073 1,000,000
4 54,308 40,754 40,514 1,000,000 36,115 35,875 1,000,000
5 69,623 50,332 50,212 1,000,000 44,545 44,425 1,000,000
6 85,704 59,693 59,693 1,000,000 52,720 52,720 1,000,000
7 102,589 68,833 68,833 1,000,000 60,619 60,619 1,000,000
8 120,319 77,747 77,747 1,000,000 68,247 68,247 1,000,000
9 138,935 86,441 86,441 1,000,000 75,583 75,583 1,000,000
10 158,481 94,902 94,902 1,000,000 82,636 82,636 1,000,000
11 179,006 103,144 103,144 1,000,000 89,374 89,374 1,000,000
12 200,556 111,128 111,128 1,000,000 95,787 95,787 1,000,000
13 223,184 118,852 118,852 1,000,000 101,866 101,866 1,000,000
14 246,943 126,295 126,295 1,000,000 107,599 107,599 1,000,000
15 271,890 133,451 133,451 1,000,000 112,960 112,960 1,000,000
16 298,084 140,334 140,334 1,000,000 117,939 117,939 1,000,000
17 325,589 146,901 146,901 1,000,000 122,484 122,484 1,000,000
18 354,468 153,116 153,116 1,000,000 126,541 126,541 1,000,000
19 384,791 158,979 158,979 1,000,000 130,073 130,073 1,000,000
20 416,631 164,449 164,449 1,000,000 133,013 133,013 1,000,000
25 601,361 184,725 184,725 1,000,000 136,983 136,983 1,000,000
30 837,129 187,488 187,488 1,000,000 115,002 115,002 1,000,000
35 1,138,036 161,198 161,198 1,000,000 45,616 54,616 1,000,000
40 1,522,077 83,045 83,045 1,000,000 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES
TRUST THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.43% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT (2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,884 11,284 1,011,884 10,581 9,981 1,010,581
2 25,830 24,924 24,444 1,024,924 22,181 21,701 1,022,181
3 39,721 39,176 38,816 1,039,176 34,875 34,515 1,034,875
4 54,308 54,810 54,570 1,054,810 48,768 48,528 1,048,768
5 69,623 71,990 71,870 1,071,990 63,963 63,843 1,063,963
6 85,704 90,879 90,879 1,090,879 80,584 80,584 1,080,584
7 102,589 111,642 111,642 1,111,642 98,751 98,751 1,098,751
8 120,319 134,467 134,467 1,134,467 118,623 118,623 1,118,623
9 138,935 159,583 159,583 1,159,583 140,347 140,347 1,140,347
10 158,481 187,232 187,232 1,187,232 164,142 164,142 1,164,142
11 179,006 217,693 217,693 1,217,693 190,194 190,194 1,190,194
12 200,556 251,212 251,212 1,251,212 218,721 218,721 1,218,721
13 223,184 288,101 288,101 1,288,101 249,964 249,964 1,249,946
14 246,943 328,687 328,687 1,328,687 284,190 284,190 1,284,190
15 271,890 373,339 373,339 1,373,339 321,673 321,673 1,321,673
16 298,084 422,488 422,488 1,422,488 362,737 362,737 1,362,737
17 325,589 476,548 476,548 1,476,548 407,688 407,688 1,407,688
18 354,468 535,987 535,987 1,535,987 456,864 456,864 1,456,864
19 384,791 601,362 601,362 1,601,362 510,649 510,649 1,510,649
20 416,631 673,241 673,241 1,673,241 569,439 569,439 1,569,439
25 601,361 1,154,925 1,154,925 2,154,925 956,199 956,199 1,956,199
30 837,129 1,925,035 1,925,035 2,925,035 1,557,704 1,557,704 2,557,704
35 1,138,036 3,153,626 3,153,626 4,153,626 2,486,839 2,486,839 3,486,839
40 1,522,077 5,111,847 5,111,847 6,111,847 3,916,015 3,916,015 4,916,015
45 2,012,222 8,235,316 8,235,316 9,235,316 6,101,350 6,101,350 7,101,350
50 2,637,785 13,223,549 13,223,549 14,223,549 9,460,416 9,460,416 10,460,416
55 3,436,179 21,217,875 21,217,875 22,278,769 (3) 14,635,597 14,635,597 15,635,597
60 4,455,155 34,099,224 34,099,224 35,099,224 22,747,472 22,747,472 23,747,472
65 5,755,655 55,121,888 55,121,888 56,121,888 34,536,114 34,536,114 35,536,114
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES
TRUST THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.43% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,884 11,284 1,011,884 10,581 9,981 1,010,581
2 25,830 24,924 24,444 1,024,924 22,181 21,701 1,022,181
3 39,721 39,176 38,816 1,039,176 34,875 34,515 1,034,875
4 54,308 54,810 54,570 1,054,810 48,768 48,528 1,048,768
5 69,623 71,990 71,870 1,071,990 63,963 63,843 1,063,963
6 85,704 90,879 90,879 1,090,879 80,584 80,584 1,080,584
7 102,589 111,642 111,642 1,111,642 98,751 98,751 1,098,751
8 120,319 134,467 134,467 1,134,467 118,623 118,623 1,118,623
9 138,935 159,583 159,583 1,159,583 140,347 140,347 1,140,347
10 158,481 187,232 187,232 1,187,232 164,142 164,142 1,164,142
11 179,006 217,693 217,693 1,217,693 190,194 190,194 1,190,194
12 200,556 251,212 251,212 1,251,212 218,721 218,721 1,218,721
13 223,184 288,101 288,101 1,288,101 249,964 249,964 1,249,964
14 246,943 328,687 328,687 1,328,687 284,190 284,190 1,284,190
15 271,890 373,339 373,339 1,373,339 321,673 321,673 1,321,673
16 298,084 422,488 422,488 1,422,488 362,737 362,737 1,362,737
17 325,589 476,548 476,548 1,476,548 407,688 407,688 1,407,688
18 354,468 535,987 535,987 1,535,987 456,864 456,864 1,456,864
19 384,791 601,362 601,362 1,601,362 510,649 510,649 1,510,649
20 416,631 673,241 673,241 1,673,241 569,439 569,439 1,569,439
25 601,361 1,153,156 1,153,156 2,352,438 (3) 956,199 956,199 1,956,199
30 837,129 1,903,542 1,903,542 3,388,305 (3) 1,550,039 1,550,039 2,759,069 (3)
35 1,138,036 3,056,878 3,056,878 4,829,867 (3) 2,429,884 2,429,884 3,839,217 (3)
40 1,522,077 4,800,413 4,800,413 6,816,586 (3) 3,701,802 3,701,802 5,256,559 (3)
45 2,012,222 7,391,817 7,391,817 9,683,280 (3) 5,480,985 5,480,985 7,180,090 (3)
50 2,637,785 11,191,207 11,191,207 13,653,273 (3) 7,947,921 7,947,921 9,696,464 (3)
55 3,436,179 16,716,957 16,716,957 19,391,670 (3) 11,315,793 11,315,793 13,126,320 (3)
60 4,455,155 24,798,012 24,798,012 27,525,793 (3) 16,028,280 16,028,280 17,791,391 (3)
65 5,755,655 38,043,579 38,043,579 39,565,322 (3) 22,518,295 22,518,295 23,518,295
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 6% (4.43% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED -------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,227 10,627 1,011,227 9,963 9,363 1,009,963
2 25,830 22,870 22,390 1,022,870 20,286 19,806 1,020,286
3 39,721 34,886 34,526 1,034,886 30,954 30,594 1,030,954
4 54,308 47,332 47,092 1,047,332 41,972 41,732 1,041,972
5 69,623 60,249 60,129 1,060,249 53,336 53,216 1,053,336
6 85,704 73,656 73,656 1,073,656 65,050 65,050 1,065,050
7 102,589 87,565 87,565 1,087,565 77,100 77,100 1,077,100
8 120,319 101,989 101,989 1,101,989 89,501 89,501 1,089,501
9 138,935 116,950 116,950 1,116,950 102,237 102,237 1,102,237
10 158,481 132,451 132,451 1,132,451 115,324 115,324 1,115,324
11 179,006 148,540 148,540 1,148,540 128,735 128,735 1,128,735
12 200,556 165,203 165,203 1,165,203 142,473 142,473 1,142,473
13 223,184 182,456 182,456 1,182,456 156,544 156,544 1,156,544
14 246,943 200,297 200,297 1,200,297 170,945 170,945 1,170,945
15 271,890 218,732 218,732 1,218,732 185,650 185,650 1,185,650
16 298,084 237,788 237,788 1,237,788 200,652 200,652 1,200,652
17 325,589 257,432 257,432 1,257,432 215,894 215,894 1,215,894
18 354,468 277,641 277,641 1,277,641 231,315 231,315 1,231,315
19 384,791 298,430 298,430 1,298,430 246,863 246,863 1,246,863
20 416,631 319,765 319,765 1,319,765 262,451 262,451 1,262,451
25 601,361 433,616 433,616 1,433,616 338,430 338,430 1,338,430
30 837,129 552,741 552,741 1,552,741 400,033 400,033 1,400,033
35 1,138,036 662,057 662,057 1,662,057 419,427 419,427 1,419,427
40 1,522,077 733,419 733,419 1,733,419 348,473 348,473 1,348,473
45 2,012,222 719,005 719,005 1,719,005 100,770 100,770 1,100,770
50 2,637,785 537,640 537,640 1,537,640 0 0 0
55 3,436,179 67,926 67,926 1,067,926 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -----------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 6% (4.43% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,227 10,627 1,011,227 9,963 9,363 1,009,963
2 25,830 22,870 22,390 1,022,870 20,286 19,806 1,020,286
3 39,721 34,886 34,526 1,034,886 30,954 30,594 1,030,954
4 54,308 47,332 47,092 1,047,332 41,972 41,732 1,041,972
5 69,623 60,249 60,129 1,060,249 53,336 53,216 1,053,336
6 85,704 73,656 73,656 1,073,656 65,050 65,050 1,065,050
7 102,589 87,565 87,565 1,087,565 77,100 77,100 1,077,100
8 120,319 101,989 101,989 1,101,989 89,501 89,501 1,089,501
9 138,935 116,950 116,950 1,116,950 102,237 102,237 1,102,237
10 158,481 132,451 132,451 1,132,451 115,324 115,324 1,115,324
11 179,006 148,540 148,540 1,148,540 128,735 128,735 1,128,735
12 200,556 165,203 165,203 1,165,203 142,473 142,473 1,142,473
13 223,184 182,456 182,456 1,182,456 156,544 156,544 1,156,544
14 246,943 200,297 200,297 1,200,297 170,945 170,945 1,170,945
15 271,890 218,732 218,732 1,218,732 185,650 185,650 1,185,650
16 298,084 237,788 237,788 1,237,788 200,652 200,652 1,200,652
17 325,589 257,432 257,432 1,257,432 215,894 215,894 1,215,894
18 354,468 277,641 277,641 1,277,641 231,315 231,315 1,231,315
19 384,791 298,430 298,430 1,298,430 246,863 246,863 1,246,863
20 416,631 319,765 319,765 1,319,765 262,451 262,451 1,262,451
25 601,361 433,616 433,616 1,433,616 338,430 338,430 1,338,430
30 837,129 552,741 552,741 1,552,741 400,033 400,033 1,400,033
35 1,138,036 662,057 662,057 1,662,057 419,427 419,427 1,419,427
40 1,522,077 733,419 733,419 1,733,419 348,473 348,473 1,348,473
45 2,012,222 719,005 719,005 1,719,005 100,770 100,770 1,100,770
50 2,637,785 537,640 537,640 1,537,640 0 0 0
55 3,436,179 67,925 67,925 1,067,925 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -----------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.57% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,570 9,970 1,010,570 9,346 8,746 1,009,346
2 25,830 20,895 20,415 1,020,895 18,466 17,986 1,018,466
3 39,721 30,920 30,560 1,030,920 27,334 26,974 1,027,334
4 54,308 40,689 40,449 1,040,689 35,945 35,705 1,035,945
5 69,623 50,225 50,105 1,050,225 44,283 44,163 1,044,283
6 85,704 59,533 59,533 1,059,533 52,341 52,341 1,052,341
7 102,589 68,606 68,606 1,068,606 60,095 60,095 1,060,095
8 120,319 77,437 77,437 1,077,437 67,550 67,550 1,067,550
9 138,935 86,032 86,032 1,086,032 74,681 74,681 1,074,681
10 158,481 94,373 94,373 1,094,373 81,493 81,493 1,081,493
11 179,006 102,474 102,474 1,102,474 87,951 87,951 1,087,951
12 200,556 110,291 110,291 1,110,291 94,041 94,041 1,094,041
13 223,184 117,817 117,817 1,117,817 99,749 99,749 1,099,749
14 246,943 125,027 125,027 1,125,027 105,062 105,062 1,105,062
15 271,890 131,908 131,908 1,131,908 109,946 109,946 1,109,946
16 298,084 138,474 138,474 1,138,474 114,388 114,388 1,114,388
17 325,589 144,671 144,671 1,144,671 118,327 118,327 1,118,327
18 354,468 150,454 150,454 1,150,454 121,700 121,700 1,121,700
19 384,791 155,819 155,819 1,155,819 124,458 124,458 1,124,458
20 416,631 160,713 160,713 1,160,713 126,521 126,521 1,126,521
25 601,361 176,578 176,578 1,176,578 124,405 124,405 1,124,405
30 837,129 171,005 171,005 1,171,005 93,342 93,342 1,093,342
35 1,138,036 131,201 131,201 1,131,201 14,605 14,605 1,014,605
40 1,522,077 37,393 37,393 1,037,393 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.57% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,570 9,970 1,010,570 9,346 8,746 1,009,346
2 25,830 20,895 20,415 1,020,895 18,466 17,986 1,018,466
3 39,721 30,920 30,560 1,030,920 27,334 26,974 1,027,334
4 54,308 40,689 40,449 1,040,689 35,945 35,705 1,035,945
5 69,623 50,225 50,105 1,050,225 44,283 44,163 1,044,283
6 85,704 59,533 59,533 1,059,533 52,341 52,341 1,052,341
7 102,589 68,606 68,606 1,068,606 60,095 60,095 1,060,095
8 120,319 77,437 77,437 1,077,437 67,550 67,550 1,067,550
9 138,935 86,032 86,032 1,086,032 74.681 74,681 1,074,681
10 158,481 94,373 94,373 1,094,373 81,493 81,493 1,081,493
11 179,006 102,474 102,474 1,102,474 87,951 87,951 1,087,951
12 200,556 110,291 110,291 1,110,291 94,041 94,041 1,094,041
13 223,184 117,817 117,817 1,117,817 99,749 99,749 1,099,749
14 246,943 125,027 125,027 1,125,027 105,062 105,062 1,105,062
15 271,890 131,908 131,908 1,131,908 109,946 109,946 1,109,946
16 298,084 138,474 138,474 1,138,474 114,388 114,388 1,114,388
17 325,589 144,671 144,671 1,144,671 118,327 118,327 1,118,327
18 354,468 150,454 150,454 1,150,454 121,700 121,700 1,121,700
19 384,791 155,819 155,819 1,155,819 124,458 124,458 1,124,458
20 416,631 160,713 160,713 1,160,713 126,521 126,521 1,126,521
25 601,361 176,578 176,578 1,176,578 124,405 124,405 1,124,405
30 837,129 171,005 171,005 1,171,005 93,342 93,342 1,093,342
35 1,138,036 131,201 131,201 1,131,201 14,605 14,605 1,014,605
40 1,522,077 37,393 37,393 1,037,393 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,473 15,673 2,000,000 16,469 15,669 2,000,000
2 34,440 34,658 34,018 2,000,000 34,640 34,000 2,000,000
3 52,962 54,731 54,251 2,000,000 54,688 54,208 2,000,000
4 72,410 76,888 76,568 2,000,000 76,804 76,484 2,000,000
5 92,831 101,346 101,186 2,000,000 101,200 101,040 2,000,000
6 114,272 128,340 128,340 2,000,000 128,109 128,109 2,000,000
7 136,786 158,134 158,134 2,000,000 157,788 157,788 2,000,000
8 160,425 191,044 191,044 2,000,000 190,544 190,544 2,000,000
9 185,246 227,417 227,417 2,000,000 226,720 226,720 2,000,000
10 211,309 267,617 267,617 2,000,000 266,671 266,671 2,000,000
11 238,674 312,047 321,047 2,000,000 310,789 310,789 2,000,000
12 267,408 361,151 361,151 2,000,000 359,508 359,508 2,000,000
13 297,578 415,418 415,418 2,000,000 413,305 413,305 2,000,000
14 329,257 475,393 475,393 2,000,000 472,708 472,708 2,000,000
15 362,520 541,675 541,675 2,000,000 538,301 538,301 2,000,000
16 397,446 614,927 614,927 2,000,000 610,731 610,731 2,000,000
17 434,118 695,884 695,884 2,000,000 690,714 690,714 2,000,000
18 472,624 785,361 785,361 2,000,000 779,048 779,048 2,000,000
19 513,055 884,260 884,260 2,000,000 876,617 876,617 2,000,000
20 555,508 993,584 993,584 2,000,000 984,410 984,410 2,000,000
25 801,815 1,739,992 1,739,992 2,331,589 (3) 1,719,966 1,719,966 2,304,754 (3)
30 1,116,173 2,970,855 2,970,855 3,624,443 (3) 2,929,025 2,929,025 3,573,411 (3)
35 1,517,381 4,993,425 4,993,425 5,792,373 (3) 4,901,565 4,901,565 5,685,815 (3)
40 2,029,436 8,313,895 8,313,895 8,895,868 (3) 8,117,110 8,117,110 8,685,308 (3)
45 2,682,963 13,772,855 13,772,855 14,461,498 (3) 13,381,804 13,381,804 14,050,894 (3)
50 3,517,046 22,609,479 22,609,479 23,739,953 (3) 21,785,629 21,785,629 22,874,910 (3)
55 4,581,572 36,699,450 36,699,450 38,534,423 (3) 34,882,959 34,882,959 36,627,107 (3)
60 5,940,206 59,721,351 59,721,351 60,318,565 (3) 56,073,587 56,073,587 56,634,323 (3)
65 7,674,207 98,881,578 98,881,578 98,881,578 (3) 92,848,050 92,848,050 92,848,050 (3)
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,473 15,673 2,000,000 16,469 15,669 2,000,000
2 34,440 34,658 34,018 2,000,000 34,640 34,000 2,000,000
3 52,962 54,731 54,251 2,000,000 54,688 54,208 2,000,000
4 72,410 76,888 76,568 2,000,000 76,804 76,484 2,000,000
5 92,831 101,346 101,186 2,000,000 101,200 101,040 2,000,000
6 114,272 128,340 128,340 2,000,000 128,109 128,109 2,000,000
7 136,786 158,134 158,134 2,000,000 157,788 157,788 2,000,000
8 160,425 191,044 191,044 2,000,000 190,544 190,544 2,000,000
9 185,246 227,417 227,417 2,000,000 226,720 226,720 2,000,000
10 211,309 267,617 267,617 2,000,000 266,671 266,671 2,000,000
11 238,674 312,047 321,047 2,000,000 310,789 310,789 2,000,000
12 267,408 361,151 361,151 2,000,000 359,508 359,508 2,000,000
13 297,578 415,418 415,418 2,000,000 413,305 413,305 2,000,000
14 329,257 475,393 475,393 2,000,000 472,708 472,708 2,000,000
15 362,520 541,675 541,675 2,000,000 538,301 538,301 2,000,000
16 397,446 614,922 614,922 2,096,884 (3) 610,723 610,723 2,082,565 (3)
17 434,118 695,831 695,831 2,282,326 (3) 690,607 690,607 2,265,191 (3)
18 472,624 785,177 785,177 2,481,159 (3) 778,655 778,655 2,460,550 (3)
19 513,055 883,816 883,816 2,695,639 (3) 875,653 875,653 2,670,742 (3)
20 555,508 992,696 992,696 2,908,599 (3) 982,473 982,473 2,878,646 (3)
25 801,815 1,730,519 1,730,519 4,222,466 (3) 1,699,234 1,699,234 4,146,131 (3)
30 1,116,173 2,927,639 2,927,639 6,001,660 (3) 2,836,290 2,836,290 5,814,395 (3)
35 1,517,381 4,843,476 4,843,476 8,476,083 (3) 4,589,733 4,589,733 8,032,033 (3)
40 2,029,436 7,853,035 7,853,035 11,936,613 (3) 7,205,453 7,205,453 10,952,289 (3)
45 2,682,963 12,449,228 12,449,228 16,930,950 (3) 10,934,736 10,934,736 14,871,241 (3)
50 3,517,046 19,253,818 19,253,818 24,067,273 (3) 16,078,362 16,078,362 20,097,953 (3)
55 4,581,572 29,246,484 29,246,484 34,218,386 (3) 23,095,161 23,095,161 27,021,338 (3)
60 5,940,206 44,283,787 44,283,787 49,155,004 (3) 32,812,245 32,812,245 36,421,592 (3)
65 7,674,207 68,888,970 68,888,970 71,644,529 (3) 46,428,308 46,428,308 48,285,440 (3)
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.43% NET)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,578 14,778 2,000,000 15,574 14,774 2,000,000
2 34,440 31,840 31,200 2,000,000 31,823 31,183 2,000,000
3 52,962 48,814 48,334 2,000,000 48,774 48,294 2,000,000
4 72,410 66,532 66,212 2,000,000 66,453 66,133 2,000,000
5 92,831 85,023 84,863 2,000,000 84,890 84,873 2,000,000
6 114,272 104,320 104,320 2,000,000 104,113 104,113 2,000,000
7 136,786 124,456 124,456 2,000,000 124,149 124,149 2,000,000
8 160,425 145,466 145,466 2,000,000 145,030 145,030 2,000,000
9 185,246 167,390 167,390 2,000,000 166,791 166,791 2,000,000
10 211,309 190,295 190,295 2,000,000 189,491 189,491 2,000,000
11 238,674 214,221 214,221 2,000,000 213,164 213,164 2,000,000
12 267,408 239,209 239,209 2,000,000 237,844 237,844 2,000,000
13 297,578 265,303 265,303 2,000,000 263,564 263,564 2,000,000
14 329,257 292,546 292,546 2,000,000 290,354 290,354 2,000,000
15 362,520 320,983 320,983 2,000,000 318,246 318,246 2,000,000
16 397,446 350,659 350,659 2,000,000 347,270 347,270 2,000,000
17 434,118 381,620 381,620 2,000,000 377,453 377,453 2,000,000
18 472,624 413,914 413,914 2,000,000 408,823 408,823 2,000,000
19 513,055 447,588 447,588 2,000,000 441,402 441,402 2,000,000
20 555,508 482,689 482,689 2,000,000 475,215 475,215 2,000,000
25 801,815 681,368 681,368 2,000,000 663,443 663,443 2,000,000
30 1,116,173 923,291 923,291 2,000,000 884,280 884,280 2,000,000
35 1,517,381 1,214,945 1,214,945 2,000,000 1,135,296 1,135,296 2,000,000
40 2,029,436 1,568,431 1,568,431 2,000,000 1,418,024 1,418,024 2,000,000
45 2,682,963 2,018,818 2,018,818 2,119,759 (3) 1,756,557 1,756,557 2,000,000
50 3,517,046 2,579,752 2,579,752 2,708,740 (3) 2,226,128 2,226,128 2,337,434 (3)
55 4,581,572 3,242,659 3,242,659 3,404,792 (3) 2,772,023 2,772,023 2,910,624 (3)
60 5,940,206 4,069,400 4,069,400 4,110,094 (3) 3,449,339 3,449,339 3,483,832 (3)
65 7,674,207 5,175,815 5,175,815 5,175,815 (3) 4,399,996 4,399,996 4,399,996 (3)
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.43% NET)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,578 14,778 2,000,000 15,574 14,774 2,000,000
2 34,440 31,840 31,200 2,000,000 31,823 31,183 2,000,000
3 52,962 48,814 48,334 2,000,000 48,774 48,294 2,000,000
4 72,410 66,532 66,212 2,000,000 66,453 66,133 2,000,000
5 92,831 85,023 84,863 2,000,000 84,890 84,730 2,000,000
6 114,272 104,320 104,320 2,000,000 104,113 104,113 2,000,000
7 136,786 124,456 124,456 2,000,000 124,149 124,149 2,000,000
8 160,425 145,466 145,466 2,000,000 145,030 145,030 2,000,000
9 185,246 167,390 167,390 2,000,000 166,791 166,791 2,000,000
10 211,309 190,295 190,295 2,000,000 189,491 189,491 2,000,000
11 238,674 214,221 214,221 2,000,000 213,164 213,164 2,000,000
12 267,408 239,209 239,209 2,000,000 237,844 237,844 2,000,000
13 297,578 265,303 265,303 2,000,000 263,564 263,564 2,000,000
14 329,257 292,546 292,546 2,000,000 290,354 290,354 2,000,000
15 362,520 320,983 320,983 2,000,000 318,246 318,246 2,000,000
16 397,446 350,659 350.659 2,000,000 347,270 347,270 2,000,000
17 434,118 381,620 381,620 2,000,000 377,453 377,453 2,000,000
18 472,624 413,914 413,914 2,000,000 408,823 408,823 2,000,000
19 513,055 447,588 447,588 2,000,000 441,402 441,402 2,000,000
20 555,508 482,689 482,689 2,000,000 475,215 475,215 2,000,000
25 801,815 681,368 681,368 2,000,000 663,443 663,443 2,000,000
30 1,116,173 923,291 923,291 2,000,000 884,280 884,280 2,000,000
35 1,517,381 1,214,945 1,214,945 2,124,778 (3) 1,135,296 1,135,296 2,000,000
40 2,029,436 1,553,039 1,553,039 2,360,619 (3) 1,410,685 1,410,685 2,144,241 (3)
45 2,682,963 1,929,545 1,929,545 2,624,181 (3) 1,685,049 1,685,049 2,291,667 (3)
50 3,517,046 2,326,957 2,326,957 2,908,696 (3) 1,941,947 1,941,947 2,427,434 (3)
55 4,581,572 2,745,442 2,745,442 3,212,167 (3) 2,179,698 2,179,698 2,550,247 (3)
60 5,940,206 3,218,536 3,218,536 3,572,575 (3) 2,414,268 2,414,268 2,679,837 (3)
65 7,674,207 3,864,822 3,864,822 4,019,415 (3) 2,658,873 2,658,873 2,765,228 (3)
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.57% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,683 13,883 2,000,000 14,679 13,879 2,000,000
2 34,440 29,129 28,489 2,000,000 29,113 28,473 2,000,000
3 52,962 43,341 42,861 2,000,000 43,302 42,822 2,000,000
4 72,410 57,321 57,001 2,000,000 57,248 56,928 2,000,000
5 92,831 71,070 70,910 2,000,000 70,949 70,789 2,000,000
6 114,272 84,590 84,590 2,000,000 84,404 84,404 2,000,000
7 136,786 97,883 97,883 2,000,000 97,611 97,611 2,000,000
8 160,425 110,947 110,947 2,000,000 110,567 110,567 2,000,000
9 185,246 123,786 123,786 2,000,000 123,268 123,268 2,000,000
10 211,309 136,396 136,396 2,000,000 135,711 135,711 2,000,000
11 238,674 148,780 148,780 2,000,000 147,890 147,890 2,000,000
12 267,408 160,944 160,944 2,000,000 159,805 159,805 2,000,000
13 297,578 172,893 172,893 2,000,000 171,453 171,453 2,000,000
14 329,257 184,622 184,622 2,000,000 182,820 182,820 2,000,000
15 362,520 196,124 196,124 2,000,000 193,889 193,889 2,000,000
16 397,446 207,392 207,392 2,000,000 204,637 204,637 2,000,000
17 434,118 218,415 218,415 2,000,000 215,040 215,040 2,000,000
18 472,624 229,181 229,181 2,000,000 225,068 225,068 2,000,000
19 513,055 239,675 239,675 2,000,000 234,685 234,685 2,000,000
20 555,508 249,880 249,880 2,000,000 243,850 243,850 2,000,000
25 801,815 295,726 295,726 2,000,000 280,989 280,989 2,000,000
30 1,116,173 328,950 328,950 2,000,000 294,995 294,995 2,000,000
35 1,517,381 337,708 337,708 2,000,000 259,825 259,825 2,000,000
40 2,029,436 295,464 295,464 2,000,000 118,963 118,963 2,000,000
45 2,682,963 134,309 134,309 2,000,000 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.57% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,683 13,883 2,000,000 14,679 13,879 2,000,000
2 34,440 29,129 28,489 2,000,000 29,113 28,473 2,000,000
3 52,962 43,341 42,861 2,000,000 43,302 42,822 2,000,000
4 72,410 57,321 57,001 2,000,000 57,248 56,928 2,000,000
5 92,831 71,070 70,910 2,000,000 70,949 70,789 2,000,000
6 114,272 84,590 84,590 2,000,000 84,404 84,404 2,000,000
7 136,786 97,883 97,883 2,000,000 97,611 97,611 2,000,000
8 160,425 110,947 110,947 2,000,000 110,567 110,567 2,000,000
9 185,246 123,786 123,786 2,000,000 123,268 123,268 2,000,000
10 211,309 136,396 136,396 2,000,000 135,711 135,711 2,000,000
11 238,674 148,780 148,780 2,000,000 147,890 147,890 2,000,000
12 267,408 160,944 160,944 2,000,000 159,805 159,805 2,000,000
13 297,578 172,893 172,893 2,000,000 171,453 171,453 2,000,000
14 329,257 184,622 184,622 2,000,000 182,820 182,820 2,000,000
15 362,520 196,124 196,124 2,000,000 193,889 193,889 2,000,000
16 397,446 207,392 207,392 2,000,000 204,637 204,637 2,000,000
17 434,118 218,415 218,415 2,000,000 215,040 215,040 2,000,000
18 472,624 229,181 229,181 2,000,000 225,068 225,068 2,000,000
19 513,055 239,675 239,675 2,000,000 234,685 234,685 2,000,000
20 555,508 249,880 249,880 2,000,000 243,850 243,850 2,000,000
25 801,815 295,726 295,726 2,000,000 280,989 280,989 2,000,000
30 1,116,173 328,950 328,950 2,000,000 294,995 294,995 2,000,000
35 1,517,381 337,708 337,708 2,000,000 259,825 259,825 2,000,000
40 2,029,436 295,464 295,464 2,000,000 118,963 118,963 2,000,000
45 2,682,963 134,309 134,309 2,000,000 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,473 15,673 2,016,473 16,469 15,669 2,016,469
2 34,440 34,658 34,018 2,034,658 34,640 34,000 2,034,640
3 52,962 54,730 54,250 2,054,730 54,686 54,206 2,054,686
4 72,410 76,887 76,567 2,076,887 76,800 76,480 2,076,800
5 92,831 101,342 101,182 2,101,342 101,191 101,031 2,101,191
6 114,272 128,333 128,333 2,128,333 128,092 128,092 2,128,092
7 136,786 158,121 158,121 2,158,121 157,756 157,756 2,157,756
8 160,425 191,020 191,020 2,191,020 190,489 190,489 2,190,489
9 185,246 227,378 227,378 2,227,378 226,628 226,628 2,226,628
10 211,309 267,555 267,555 2,267,555 266,525 266,525 2,266,525
11 238,674 311,951 311,951 2,311,951 310,564 310,564 2,310,564
12 267,408 361,006 361,006 2,361,006 359,169 359,169 2,359,169
13 297,578 415,203 415,203 2,415,203 412,804 412,804 2,412,804
14 329,257 475,079 475,079 2,475,079 471,978 471,978 2,471,978
15 362,520 541,222 541,222 2,541,222 537,252 537,252 2,537,252
16 397,446 614,281 614,281 2,614,281 609,237 609,237 2,609,237
17 434,118 694,971 694,971 2,694,971 688,608 688,608 2,688,608
18 472,624 784,081 784,081 2,784,081 776,103 776,103 2,776,103
19 513,055 882,478 882,478 2,882,478 872,528 872,528 2,872,528
20 555,508 991,118 991,118 2,991,118 978,770 978,770 2,978,770
25 801,815 1,728,773 1,728,773 3,728,773 1,694,666 1,694,666 3,694,666
30 1,116,173 2,934,024 2,934,024 4,934,024 2,847,055 2,847,055 4,847,055
35 1,517,381 4,892,595 4,892,595 6,892,595 4,680,476 4,680,476 6,680,476
40 2,029,436 8,055,160 8,055,160 10,055,160 7,563,957 7,563,957 9,563,957
45 2,682,963 13,118,305 13,118,305 15,118,305 12,034,416 12,034,416 14,034,416
50 3,517,046 21,165,673 21,165,673 23,165,673 18,919,143 18,919,143 20,919,143
55 4,581,572 33,982,866 33,982,866 35,982,866 29,536,050 29,536,050 31,536,050
60 5,940,206 54,607,230 54,607,230 56,607,230 46,013,703 46,013,703 48,013,703
65 7,674,207 88,144,085 88,144,085 90,144,085 69,962,597 69,962,597 71,962,597
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,473 15,673 2,016,473 16,469 15,669 2,016,469
2 34,440 34,658 34,018 2,034,658 34,640 34,000 2,034,640
3 52,962 54,730 54,250 2,054,730 54,686 54,206 2,054,686
4 72,410 76,887 76,567 2,076,887 76,800 76,480 2,076,800
5 92,831 101,342 101,182 2,101,342 101,191 101,031 2,101,191
6 114,272 128,333 128,333 2,128,333 128,092 128,092 2,128,092
7 136,786 158,121 158,121 2,158,121 157,756 157,756 2,157,756
8 160,425 191,020 191,020 2,191,020 190,489 190,489 2,190,489
9 185,246 227,378 227,378 2,227,378 226,628 226,628 2,226,628
10 211,309 267,555 267,555 2,267,555 266,525 266,525 2,266,525
11 238,674 311,951 311,951 2,311,951 310,564 310,564 2,310,564
12 267,408 361,006 361,006 2,361,006 359,169 359,169 2,359,169
13 297,578 415,203 415,203 2,415,203 412,804 412,804 2,412,804
14 329,257 475,079 475,079 2,475,079 471,978 471,978 2,471,978
15 362,520 541,222 541,222 2,541,222 537,252 537,252 2,537,252
16 397,446 614,281 614,281 2,614,281 609,237 609,237 2,609,237
17 434,118 694,971 694,971 2,694,971 688,608 688,608 2,688,608
18 472,624 784,081 784,081 2,784,081 776,103 776,103 2,776,103
19 513,055 882,478 882,478 2,882,478 872,528 872,528 2,872,528
20 555,508 991,118 991,118 2,991,118 978,770 978,770 2,978,770
25 801,815 1,727,838 1,727,838 4,215,925 (3) 1,692,926 1,692,926 4,130,739 (3)
30 1,116,173 2,923,257 2,923,257 5,992,677 (3) 2,826,126 2,826,126 5,793,558 (3)
35 1,517,381 4,836,375 4,836,375 8,463,656 (3) 4,573,637 4,573,637 8,003,865 (3)
40 2,029,436 7,841,666 7,841,666 11,919,332 (3) 7,180,521 7,180,521 10,914,392 (3)
45 2,682,963 12,431,345 12,431,345 16,906,629 (3) 10,897,228 10,897,228 14,820,230 (3)
50 3,517,046 19,226,299 19,226,299 24,032,874 (3) 16,023,531 16,023,531 20,029,414 (3)
55 4,581,572 29,204,819 29,204,819 34,169,638 (3) 23,016,718 23,016,718 26,929,560 (3)
60 5,940,206 44,220,836 44,220,836 49,085,128 (3) 32,701,113 32,701,113 36,298,235 (3)
65 7,674,207 68,791,182 68,791,182 71,542,829 (3) 46,047,005 46,047,005 48,047,005
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II: GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,578 14,778 2,015,578 15,574 14,774 2,015,574
2 34,440 31,840 31,200 2,031,840 31,823 31,183 2,031,823
3 52,962 48,814 48,334 2,048,814 48,772 48,292 2,048,772
4 72,410 66,530 66,210 2,066,530 66,450 66,130 2,066,450
5 92,831 85,020 84,860 2,085,020 84,883 84,723 2,084,883
6 114,272 104,314 104,314 2,104,314 104,099 104,099 2,104,099
7 136,786 124,446 124,446 2,124,446 124,125 124,125 2,124,125
8 160,425 145,448 145,448 2,145,448 144,989 144,989 2,144,989
9 185,246 167,363 167,363 2,167,363 166,726 166,726 2,166,726
10 211,309 190,253 190,253 2,190,253 189,392 189,392 2,189,392
11 238,674 214,158 214,158 2,214,158 213,017 213,017 2,213,017
12 267,408 239,118 239,118 2,239,118 237,631 237,631 2,237,631
13 297,578 265,172 265,172 2,265,172 263,260 263,260 2,263,260
14 329,257 292,363 292,363 2,292,363 289,928 289,928 2,289,928
15 362,520 320,729 320,729 2,320,729 317,658 317,658 2,317,658
16 397,446 350,311 350,311 2,350,311 346,465 346,465 2,346,465
17 434,118 381,147 381,147 2,381,147 376,363 376,363 2,376,363
18 472,624 413,277 413,277 2,413,277 407,360 407,360 2,407,360
19 513,055 446,735 446,735 2,446,735 439,453 439,453 2,439,453
20 555,508 481,557 481,557 2,481,557 472,637 472,637 2,472,637
25 801,815 677,090 677,090 2,677,090 653,924 653,924 2,653,924
30 1,116,173 908,661 908,661 2,908,661 852,846 852,846 2,852,846
35 1,517,381 1,167,582 1,167,582 3,167,582 1,037,732 1,037,732 3,037,732
40 2,029,436 1,423,356 1,423,356 3,423,356 1,137,238 1,137,238 3,137,238
45 2,682,963 1,593,526 1,593,526 3,593,526 995,684 995,684 2,995,684
50 3,517,046 1,510,956 1,510,956 3,510,956 359,382 359,382 2,359,382
55 4,581,572 951,419 951,419 2,951,419 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,578 14,778 2,015,578 15,574 14,774 2,015,574
2 34,440 31,840 31,200 2,031,840 31,823 31,183 2,031,823
3 52,962 48,814 48,334 2,048,814 48,772 48,292 2,048,772
4 72,410 66,530 66,210 2,066,530 66,450 66,130 2,066,450
5 92,831 85,020 84,860 2,085,020 84,883 84,723 2,084,883
6 114,272 104,314 104,314 2,104,314 104,099 104,099 2,104,099
7 136,786 124,446 124,446 2,124,446 124,125 124,125 2,124,125
8 160,425 145,448 145,448 2,145,448 144,989 144,989 2,144,989
9 185,246 167,363 167,363 2,167,363 166,726 166,726 2,166,726
10 211,309 190,253 190,253 2,190,253 189,392 189,392 2,189,392
11 238,674 214,158 214,158 2,214,158 213,017 213,017 2,213,017
12 267,408 239,118 239,118 2,239,118 237,631 237,631 2,237,631
13 297,578 265,172 265,172 2,265,172 263,260 263,260 2,263,260
14 329,257 292,363 292,363 2,292,363 289,928 289,928 2,289,928
15 362,520 320,729 320,729 2,320,729 317,658 317,658 2,317,658
16 397,446 350,311 350,311 2,350,311 346,465 346,465 2,346,465
17 434,118 381,147 381,147 2,381,147 376,363 376,363 2,376,363
18 472,624 413,277 413,277 2,413,277 407,360 407,360 2,407,360
19 513,055 446,735 446,735 2,446,735 439,453 439,453 2,439,453
20 555,508 481,557 481,557 2,481,557 472,637 472,637 2,472,637
25 801,815 677,090 677,090 2,677,090 653,924 653,924 2,653,924
30 1,116,173 908,661 908,661 2,908,661 852,846 852,846 2,852,846
35 1,517,381 1,167,582 1,167,582 3,167,582 1,037,732 1,037,732 3,037,732
40 2,029,436 1,423,356 1,423,356 3,423,356 1,137,238 1,137,238 3,137,238
45 2,682,963 1,593,526 1,593,526 3,593,526 995,684 995,684 2,995,684
50 3,517,046 1,510,956 1,510,956 3,510,956 359,382 359,382 2,359,382
55 4,581,572 951,419 951,419 2,951,419 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.57% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,683 13,883 2,014,683 14,679 13,879 2,014,679
2 34,440 29,129 28,489 2,029,129 29,113 28,473 2,029,113
3 52,962 43,340 42,860 2,043,340 43,301 42,821 2,043,301
4 72,410 57,319 56,999 2,057,319 57,245 56,925 2,057,245
5 92,831 71,067 70,907 2,071,067 70,943 70,783 2,070,943
6 114,272 84,586 84,586 2,084,586 84,393 84,393 2,084,393
7 136,786 97,875 97,875 2,097,875 97,592 97,592 2,097,592
8 160,425 110,935 110,935 2,110,935 110,537 110,537 2,110,537
9 185,246 123,766 123,766 2,123,766 123,223 123,223 2,123,223
10 211,309 136,368 136,368 2,136,368 135,644 135,644 2,135,644
11 238,674 148,738 148,738 2,148,738 147,793 147,793 2,147,793
12 267,408 160,886 160,886 2,160,886 159,670 159,670 2,159,670
13 297,578 172,813 172,813 2,172,813 171,267 171,267 2,171,267
14 329,257 184,514 184,514 2,184,514 182,569 182,569 2,182,569
15 362,520 195,979 195,979 2,195,979 193,555 193,555 2,193,555
16 397,446 207,201 207,201 2,207,201 204,196 204,196 2,204,196
17 434,118 218,163 218,163 2,218,163 214,464 214,464 2,214,464
18 472,624 228,855 228,855 2,228,855 224,323 224,323 2,224,323
19 513,055 239,254 239,254 2,239,254 233,727 233,727 2,233,727
20 555,508 249,341 249,341 2,249,341 242,629 242,629 2,242,629
25 801,815 294,027 294,027 2,294,027 277,263 277,263 2,277,263
30 1,116,173 324,151 324,151 2,324,151 285,044 285,044 2,285,044
35 1,517,381 325,171 325,171 2,325,171 236,238 236,238 2,236,238
40 2,029,436 266,337 266,237 2,266,337 75,451 75,451 2,075,451
45 2,682,963 80,210 80,210 2,080,210 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
CHUBB HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.57% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,683 13,883 2,014,683 14,679 13,879 2,014,679
2 34,440 29,129 28,489 2,029,129 29,113 28,473 2,029,113
3 52,962 43,340 42,860 2,043,340 43,301 42,821 2,043,301
4 72,410 57,319 56,999 2,057,319 57,245 56,925 2,057,245
5 92,831 71,067 70,907 2,071,067 70,943 70,783 2,070,943
6 114,272 84,586 84,586 2,084,586 84,393 84,393 2,084,393
7 136,786 97,875 97,875 2,097,875 97,592 97,592 2,097,592
8 160,425 110,935 110,935 2,110,935 110,537 110,537 2,110,537
9 185,246 123,766 123,766 2,123,766 123,223 123,223 2,123,223
10 211,309 136,368 136,368 2,136,368 135,644 135,644 2,135,644
11 238,674 148,738 148,738 2,148,738 147,793 147,793 2,147,793
12 267,408 160,886 160,886 2,160,886 159,670 159,670 2,159,670
13 297,578 172,813 172,813 2,172,813 171,267 171,267 2,171,267
14 329,257 184,514 184,514 2,184,514 182,569 182,569 2,182,569
15 362,520 195,979 195,979 2,195,979 193,555 193,555 2,193,555
16 397,446 207,201 207,201 2,207,201 204,196 204,196 2,204,196
17 434,118 218,163 218,163 2,218,163 214,464 214,464 2,214,464
18 472,624 228,855 228,855 2,228,855 224,323 224,323 2,224,323
19 513,055 239,254 239,254 2,239,254 233,727 233,727 2,233,727
20 555,508 249,341 249,341 2,249,341 242,629 242,629 2,242,629
25 801,815 294,027 294,027 2,294,027 277,263 277,263 2,277,263
30 1,116,173 324,151 324,151 2,324,151 285,044 285,044 2,285,044
35 1,517,381 325,171 325,171 2,325,171 236,238 236,238 2,236,238
40 2,029,436 266,337 266,337 2,266,337 75,451 75,451 2,075,451
45 2,682,963 80,210 80,210 2,080,210 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
THE CHUBB ADVISOR SERIES
CHUBB SEPARATE ACCOUNT C
INDIVIDUAL AND SURVIVORSHIP FLEXIBLE
PREMIUM VARIABLE LIFE INSURANCE POLICIES
Issued by
Chubb Life Insurance Company of America
One Granite Place
Concord, New Hampshire 03301
(603) 226-5000
This Prospectus describes two forms of a flexible premium variable life
insurance policy issued by Chubb Life Insurance Company of America ("Chubb
Life"): an individual flexible premium variable life insurance policy form
("Chubb Advisor I") and a survivorship flexible premium variable life insurance
policy form ("Chubb Advisor II") (collectively the "Policy" or "Policies"). The
Policies are designed to provide a Policyowner with both lifetime insurance
protection and maximum flexibility in connection with premium payments and death
benefits, together with the opportunity to participate in the investment
experience of Chubb Separate Account C ("Separate Account C"). Although each
Policy contains a schedule of intended premium payments ("Planned Periodic
Premiums"), and an intended frequency of premium payments ("Premium Frequency"),
a Policyowner may, subject to certain restrictions, vary the frequency and
amount of the premium payments and increase or decrease the level of life
insurance benefits payable under the Policy. The flexibility allows a
Policyowner to provide for changing insurance needs within the framework of a
single insurance policy. Unlike traditional insurance protection providing fixed
benefits, Accumulation Value under the Policies will increase with positive
investment experience and decrease with negative investment experience of
Separate Account C. Accumulation Value in Separate Account C is not guaranteed.
Chubb Advisor I provides life insurance coverage on one Insured, with the
Death Benefit payable at the Insured's death. Chubb Advisor II provides life
insurance coverage on two Insureds, with the Death Benefit payable upon the
death of the last surviving Insured. If Net Premiums are allocated to Separate
Account C, the amount of the Death Benefit may reflect the investment experience
of the chosen Divisions, as well as the frequency and amount of premiums, any
withdrawals of Cash Value ("withdrawals"), and applicable fees and charges. As
long as the Policy remains in force, the Death Benefit will not be less than the
current Specified Amount, reduced by any outstanding indebtedness and any due
and unpaid fees and charges. The minimum initial Specified Amount is $250,000.
After a withdrawal, the Specified Amount may not be reduced to less than
$125,000.
The Death Benefit is payable under two options. The Policyowner will make two
elections to determine the Death Benefit under the Policy. First, the
Policyowner will choose one of two Death Benefit options offered under the
Policy. Second, the Policyowner will choose the Death Benefit qualification
test, which is the method for qualifying the Policy as a life insurance contract
for purposes of Federal tax law. In general, under Death Benefit Option I, the
Death Benefit payable under the Policy is equal to the current Specified Amount;
under Death Benefit Option II, the Death Benefit is equal to the current
Specified Amount plus the Accumulation Value of the Policy on the date of death.
The Policy will also increase the Death Benefit if necessary to ensure that the
Policy will continue to qualify as life insurance under Federal tax laws. The
Policyowner may not change the Death
<PAGE>
Benefit qualification test once selected but may, subject to certain
restrictions, change from Death Benefit Option I to Option II, and vice versa,
after the Policy has been issued.
There is an initial premium, based on Issue Age, underwriting class and
Specified Amount, that must be paid at issue. If a Policyowner chooses the
Guaranteed Death Benefit Rider, the Death Benefit will be guaranteed to never be
less than the Specified Amount. No premium payment may be less than $250.
The Policy will remain in force so long as Cash Value exceeds indebtedness and
Cash Value less indebtedness is sufficient to pay certain monthly charges. The
Cash Value equals the Accumulation Value less any Surrender Charge. Accumulation
Value in Separate Account C will reflect the investment experience of the chosen
Divisions, the amount and frequency of premium payments, any withdrawals, and
applicable fees and charges. Adherence to the schedule of Planned Periodic
Premiums will not assure the Policy will remain in force.
The Policyowner bears the entire investment risk for all amounts allocated to
Separate Account C; no minimum Accumulation Value is guaranteed and the
Accumulation Value could decline to zero. So long as Cash Value exceeds
indebtedness and subject to certain conditions described in this Prospectus, a
Policyowner may obtain policy loans at any time after the first Policy
anniversary and may make withdrawals at any time. Both withdrawals and policy
loans must be made prior to the Policy's Maturity Date.
The Policyowner may allocate Net Premiums to one or more of the Divisions or
to Chubb Life's General Account on the Allocation Date. Each Division will
invest solely in a corresponding series (a "Portfolio") of a registered
management investment company (a "Fund"). Prior to the Allocation Date, the Net
Premiums paid will be deposited in Chubb Life's General Account. There is a
"free look" period during which the Policyowner may cancel the Policy. If the
Policyowner elects during this "free look" period to cancel the Policy, Chubb
Life will reimburse, within seven days from the date the Policy is surrendered
to Chubb Life, the full amount of premium paid. The accompanying Prospectuses
for the Funds and the Statements of Additional Information, available on
request, describe the investment objectives and risks of the Portfolios. The
Policies described in this Prospectus are not available in all States.
Chubb Life believes the Policy will in general receive favorable tax treatment
under the Internal Revenue Code of 1986, as amended ("the Code"). However,
because there are issues as to which the law is developing or changing, there
can be no guarantees. Information in this Prospectus is not intended as tax
advice and Chubb Life recommends that prospective purchasers rely only on the
advice of a qualified tax adviser.
Prospective purchasers of this Policy are advised that replacement of existing
insurance coverage may not be financially advantageous and should consult with
their financial advisers with respect to the Policy. It may also not be
advantageous to purchase this Policy if the prospective purchaser already owns a
flexible premium variable life insurance policy.
This Prospectus generally describes only the portion of the Policy involving
Separate Account C. For a brief summary of Chubb Life's General Account, see
"THE GENERAL ACCOUNT."
This Prospectus Is Valid Only If Accompanied Or Preceded By Current Prospectuses
For The Funds.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
2
<PAGE>
EXCHANGE COMMISSION OR ANY STATE SECURITIES DIVISION, NOR HAS THE COMMISSION OR
ANY STATE SECURITIES DIVISION, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Please Read This Prospectus Carefully and Retain It For Future Reference.
The Date of This Prospectus is March , 1996.
3
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
DEFINITIONS.......................................................... 7
SUMMARY.............................................................. 9
CHUBB LIFE INSURANCE COMPANY OF AMERICA.............................. 15
CHUBB SEPARATE ACCOUNT C............................................. 15
Divisions............................................................ 15
THE FUNDS............................................................ 16
General.............................................................. 16
Chubb American Fund, Inc. ........................................... 17
Chubb Series Trust................................................... 17
Investment Objectives................................................ 18
THE POLICIES......................................................... 18
General.............................................................. 18
Payment of Premiums.................................................. 19
Guaranteed Death Benefit Premiums.................................... 19
Premium Limitations.................................................. 19
Allocation of Premiums............................................... 19
Transfers............................................................ 20
Telephone Transfers, Loans and Reallocations......................... 22
Policy Lapse......................................................... 22
Reinstatement........................................................ 23
Policy "Free Look"................................................... 23
CHARGES AND DEDUCTIONS............................................... 23
Premium Charges...................................................... 23
Monthly Deduction.................................................... 24
Mortality Risk Charge................................................ 26
Surrender Charge..................................................... 26
Administrative Fees.................................................. 26
Other Charges........................................................ 26
POLICY BENEFITS AND RIGHTS........................................... 27
</TABLE>
4
<PAGE>
Death Benefits....................................................... 27
Guaranteed Death Benefit............................................. 31
Combined Requests.................................................... 31
Maturity of the Policy............................................... 31
Optional Insurance Benefits.......................................... 31
Settlement Options................................................... 33
CALCULATION OF ACCUMULATION VALUE.................................... 34
Unit Values.......................................................... 34
Net Investment Factor................................................ 35
CASH VALUE BENEFITS.................................................. 35
Surrender Privileges................................................. 36
Policy Loans......................................................... 37
OTHER MATTERS........................................................ 38
Voting Privileges.................................................... 38
Additions, Deletions or Substitutions of Investments................. 39
Annual Report........................................................ 39
Confirmation......................................................... 40
Limitation on Right to Contest....................................... 40
Misstatements........................................................ 40
Suicide.............................................................. 40
Beneficiaries........................................................
Postponement of Payments.............................................
Assignment...........................................................
Illustration of Benefits and Values..................................
Non-Participating Policy.............................................
THE GENERAL ACCOUNT..................................................
5
<PAGE>
General Description.................................................. 41
General Account Accumulation Value................................... 41
Determination of Charges............................................. 42
Premium Deposit Fund.................................................
DISTRIBUTION OF THE POLICY........................................... 42
Group or Sponsored Arrangements...................................... 42
MANAGEMENT OF CHUBB LIFE............................................. 43
Executive Officers and Directors of Chubb Life....................... 43
Executive Officers (Other Than Directors)............................ 44
STATE REGULATION OF CHUBB LIFE....................................... 45
FEDERAL TAX MATTERS.................................................. 45
Tax Considerations................................................... 45
Policy Proceeds...................................................... 45
Charge for Chubb Life Income Taxes................................... 49
EMPLOYEE BENEFIT PLANS............................................... 50
LEGAL PROCEEDINGS.................................................... 50
EXPERTS.............................................................. 50
REGISTRATION STATEMENT............................................... 50
FINANCIAL STATEMENTS................................................. 50
ILLUSTRATIONS........................................................
[THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY STATE IN WHICH SUCH
OFFERING MAY NOT LAWFULLY BE MADE. CHUBB LIFE DOES NOT AUTHORIZE ANY INFORMATION
OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS PROSPECTUS OTHER
THAN AS CONTAINED IN THIS PROSPECTUS, THE PROSPECTUSES OF THE FUNDS OR THE
STATEMENTS OF ADDITIONAL INFORMATION OF THE FUNDS.]
6
<PAGE>
DEFINITIONS
In addition to terms which are defined elsewhere in this Prospectus, the
following words and phrases shall have the indicated meanings:
ACCUMULATION VALUE-The total amount that a Policy provides for investment at
any time plus the amount held as collateral for Policy Debt.
AGE-The Insured's age at his or her nearest birthday.
ALLOCATION DATE-The date when the initial Net Premium is placed in the
Divisions and the General Account in accordance with the Policyowner's
allocation instructions in the application. The Allocation Date is 20 days from
the date the Policy is issued.
ATTAINED AGE-The age of the Insured at the last Policy anniversary.
BENEFICIARY-The person designated by the Policyowner in the application to
receive the Death Benefit proceeds. If changed, the Beneficiary is as shown in
the latest change filed with Chubb Life. If no Beneficiary survives the Insured,
the Policyowner or the Policyowner's estate will be the Beneficiary. The
interest of a Beneficiary may be subject to that of any assignee.
CASH VALUE-The Accumulation Value less any applicable Surrender Charge. This
amount less the amount of Policy Debt is payable to the Policyowner on the
earlier of surrender of the Policy or the Maturity Date.
CODE-The Internal Revenue Code of 1986, as amended.
DATE OF RECEIPT-Any business day of Chubb Life prior to 4:00 P.M. Eastern
time, on which a notice or premium payment is received at Chubb Life's home
office.
DEATH BENEFIT-The amount, less the amount of Policy Debt, which is payable to
the Beneficiary under the Policy upon the death of the Insured under Chubb
Advisor I and the death of the last surviving Insured under Chubb Advisor II.
DIVISION-A separate division of Separate Account C which invests exclusively
in the shares of a specified Portfolio of a Fund.
FUNDS-The registered management investment companies whose shares of select
separate series (the "Portfolios") are offered to corresponding Divisions.
GENERAL ACCOUNT-The assets of Chubb Life other than those allocated to
Separate Account C or any other separate account.
INSURED(S)-The person(s) upon whose life the Policy is issued.
ISSUE AGE-The Insured's age at his or her nearest birthday on the Policy Date.
JOINT EQUAL AGE-Chubb Advisor II provides for a calculation pursuant to a
formula which converts the specific age, gender and underwriting classifications
of the two Insureds into one age. The Joint Equal Age is used in determining
issue age limitations and guaranteed death benefit premiums.
LOAN VALUE-Generally, 90% of a Policy's Cash Value on the date of a loan.
MATURITY DATE-Unless otherwise specified, the Maturity Date will be the Policy
anniversary nearest to the Insured's 100th birthday for Chubb Advisor I and the
younger Insured's 100th birthday for Chubb Advisor II.
MONTHLY ANNIVERSARY DATE-The same day in each month as the Policy Date.
7
<PAGE>
NET PREMIUM-The gross premium less a 2.5% State Premium Tax Charge, a 1.25%
Federal DAC Tax Charge and a 3% Sales Charge.
OWNER (POLICYOWNER)-The person or entity so designated in the application or
as subsequently changed who may exercise all rights under the Policy.
POLICY DATE-The date set forth in the Policy, which is the date requested by
the Owner. If no date is requested, it is the date the Policy is issued. The
Policy Date is the date from which policy years, policy months, and policy
anniversaries will be determined. If the Policy Date should fall on the 29th,
30th, or 31st of a month, the Policy Date will be the 1st of the following
month.
POLICY DEBT-The sum of all unpaid policy loans and accrued interest thereon.
PORTFOLIO-A separate investment series of one of the Funds.
PROOF OF DEATH-One or more of the following:
(a) A copy of a certified death certificate.
(b) A copy of a certified decree of a court of competent jurisdiction as to
the finding of death.
(c) A written statement by a medical doctor who attended the Insured.
(d) Any other proof satisfactory to Chubb Life.
SEC-The United States Securities and Exchange Commission.
SEPARATE ACCOUNT C-Chubb Separate Account C, a separate investment account
created by Chubb Life to receive and invest Net Premiums paid under the Policy
and other flexible premium variable life insurance policies offered by Chubb
Life.
SPECIFIED AMOUNT-The face amount of the Policy which is the minimum death
benefit payable under the Policy.
STATE-"State" means any State of the United States, the District of Columbia,
Puerto Rico, the Virgin Islands, or any other possession of the United
States.
SURRENDER CHARGE-A contingent deferred sales charge assessed only upon
surrender or withdrawal.
VALUATION DATE-Each day, as of the close of regular trading on the New York
Stock Exchange, which is currently 4:00 P.M. Eastern time, or any other days as
may be required.
VALUATION PERIOD-The period between two successive Valuation Dates, commencing
at the close of regular trading on the New York Stock Exchange on each Valuation
Date and ending at the close of regular trading on the New York Stock Exchange
on the next succeeding Valuation Date.
8
<PAGE>
SUMMARY
The discussion in this Prospectus assumes that there is no policy loan
outstanding and that State variations will be covered by prospectus supplement
or policy endorsement, as appropriate. The terms under which the Policies are
issued may also vary from those described in this Prospectus based on particular
circumstances. The description of the Policies in this Prospectus is subject to
the terms of the Policy purchased by a Policyowner and any supplement or
endorsement to it. An applicant may review a copy of the Policy and any
supplement or endorsement to it on request.
WHAT ARE THE VARIABLE LIFE POLICIES BEING OFFERED?
This Prospectus describes two forms of a flexible premium variable life
insurance policy issued by Chubb Life Insurance Company of America ("Chubb
Life"). Chubb Advisor I provides life insurance coverage on one Insured, with
the Death Benefit payable upon the death of such Insured. Chubb Advisor II
provides life insurance coverage on two Insureds, with a Death Benefit payable
only when the last surviving Insured dies. The Policyowner may, subject to
certain limitations, make premium payments in any amount at any frequency. The
Policies are life insurance contracts with death benefits, cash values, and
other features traditionally associated with life insurance. They are called
"flexible premium" because, unlike many insurance contracts, there are no fixed
schedules for premium payments, although each Policyowner may establish a
schedule of premium payments ("Planned Periodic Premiums"). This flexibility
permits a Policyowner to provide for evolving insurance needs within a single
insurance product. The minimum initial Specified Amount is $250,000. A
Policyowner may increase or decrease coverage. Increasing coverage under the
Policy, rather than purchasing another policy, may save additional
administrative costs. Increasing coverage under the Policy or purchasing another
policy may require new evidence of insurability. Increasing or decreasing
coverage may have certain tax consequences. See "FEDERAL TAX MATTERS".
The Policies generally work as follows: a Policyowner periodically pays a
premium to Chubb Life. Chubb Life subtracts an amount for the State Premium Tax
Charge, the Federal DAC Tax Charge and the Sales Charge from each premium. Chubb
Life then places the Net Premium into one or more of the six Divisions and/or
Chubb Life's General Account as directed by the Policyowner. Each Division
invests its assets in a corresponding Portfolio of one of the Funds. During the
year, Chubb Life takes charges from each Division and credits or charges each
Division with its respective investment experience. The Cost of Insurance
Charge, which is deducted from each Policy's Accumulation Value, varies monthly
based on the sex, Issue Age, policy year, rating class of the Insured(s),
Specified Amount of the Policy, Death Benefit option and applicable corridor
percentage. A Policyowner will incur a Surrender Charge for a surrender or
withdrawal during the first five policy years. See "CHARGES AND DEDUCTIONS-
Surrender Charge".
The Death Benefit is payable under two options. The Policyowner will make two
elections to determine the Death Benefit under the Policy. First, the
Policyowner will choose one of two Death Benefit options offered under the
Policy. Second, the Policyowner will choose the Death Benefit qualification
test, which is the method for qualifying the Policy as a life insurance contract
for purposes of Federal tax law. In general, under Death Benefit Option I, the
Death Benefit payable under the Policy is equal to the current Specified Amount;
under Death Benefit Option II, the Death Benefit is equal to the current
Specified Amount plus the Accumulation Value of the Policy on the date of death.
The Policy will also increase the Death Benefit if necessary to ensure that the
Policy will continue to qualify as life insurance under Federal tax laws. The
Policyowner may not change the Death Benefit qualification test once selected
but may, subject to certain restrictions, change from Death Benefit Option I to
Option II, and vice versa, after the Policy has been issued. See "POLICY
BENEFITS AND RIGHTS-Death Benefits".
All persons insured must meet specified age limits and certain health and
9
<PAGE>
other standards called "Underwriting Standards". The smoking status of the
Insureds is generally reflected in the cost of insurance rates. However, for
Chubb Advisor I, distinctions between smokers and nonsmokers are only made for
Insureds age 15 and over. Policies issued in certain jurisdictions will not
directly reflect the sexes of the Insureds in either the premium rates or the
charges and values under the Policy.
WHAT IS THE AMOUNT OF THE PREMIUMS?
Premiums are flexible and the Policyowner may choose the amount and frequency
of premium payments provided each premium is at least $250.
The first premium is due on the Policy Date. Premiums are paid in advance,
generally one year at a time; however, Chubb Life permits semi-annual, quarterly
and monthly premium payments. Changes in Premium Frequency and increases or
decreases in the amount of Planned Periodic Premiums may be made by the
Policyowner. Chubb Life will notify Policyowners annually if any premiums would
cause their Policies to be deemed to be modified endowment contracts and allow
for a refund of the excess premium. See "FEDERAL TAX MATTERS -Policy Proceeds".
Failure to pay premiums in accordance with the schedule of Planned Periodic
Premiums will not automatically cause the Policy to lapse. Unless the Guaranteed
Death Benefit Rider is in force and the conditions under the Rider satisfied, it
will lapse when the Cash Value less outstanding Policy Debt is insufficient to
pay the monthly deduction for certain charges ("monthly deduction") and a grace
period expires without a sufficient payment by the Policyowner. Conversely,
payment of premiums in accordance with the schedule of Planned Periodic Premiums
does not necessarily mean that the Policy will remain in force. See "THE
POLICIES-Policy Lapse".
The Guaranteed Death Benefit Rider guarantees that the Death Benefit will
never be less than the Specified Amount provided that a cumulative minimum
premium requirement is met.
WHAT IS CHUBB SEPARATE ACCOUNT C?
Separate Account C is a separate account established by Chubb Life pursuant
to the insurance laws of the State of New Hampshire and organized as a
registered unit investment trust under the Investment Company Act of 1940 (the
"1940 Act"). Such registration does not involve any supervision by the
Securities and Exchange Commission (the "SEC") of the management or
investment practices or policies of Separate Account C.
WHAT ARE THE FUNDS?
The Policies currently offer six Divisions, each of which buys shares at
net asset value of the corresponding series (a "Portfolio") of a registered
investment company (a "Fund"). The current Funds and Portfolios are as
follows:
Chubb America Fund, Inc.
- Money Market Portfolio
- Bond Portfolio
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- Growth and Income Portfolio
Chubb Series Trust
- Resolute International Equity Portfolio
- Resolute Small Company Portfolio
- Resolute Equity Portfolio
See "THE FUNDS".
WHAT ARE THE CHARGES MADE BY CHUBB LIFE?
STATE PREMIUM TAX CHARGE AND FEDERAL DAC TAX CHARGE. These charges are
deducted from each premium payment, currently 2.5% for state premium taxes
and 1.25% as a Federal Deferred Acquisition Cost ("DAC") Tax Charge.
SALES CHARGE. A sales charge up to a maximum of 3% is deducted from each
premium payment. Also see below "Surrender or Withdrawal Charges".
MONTHLY EXPENSE RISK AND ADMINISTRATION CHARGES. These charges are calculated
each Monthly Anniversary Date and deducted from each Policy's Accumulation Value
in the Separate Account. The amount of the Expense Risk Charge varies based on
the Policy's Accumulation Value and will not exceed 0.20% of the Policy's
Accumulation Value on an annual basis.
Chubb Life will realize income from this charge to the extent it is not
needed to pay expenses under the Policies. The amount of the Administration
Charge is 0.10% on an annual basis for the first twenty policy years only.
COST OF INSURANCE CHARGE. This charge is calculated on each Monthly
Anniversary Date and deducted from each Policy's Accumulation Value. The charge
is based on the sex, Issue Age, policy year, rating class of the Insured(s),
Specified Amount, Death Benefit option and applicable corridor percentage.
Monthly cost of insurance rates will be determined by Chubb Life based upon its
expectations as to future mortality experience. Cost of insurance rates are
guaranteed not to exceed or be increased above the maximum charge based upon the
Commissioner's 1980 Standard Ordinary Mortality Table.
MORTALITY RISK CHARGE. This charge is imposed daily at an annual rate of .50%
on the assets of each Division. (This charge is not imposed on amounts held in
the General Account.) Chubb Life will realize income from this charge to the
extent it is not needed to provide benefits under the Policies.
SURRENDER OR WITHDRAWAL CHARGES. This contingent deferred sales charge is
imposed at the time of surrender or withdrawal during the first five policy
years. It declines annually from 5% to 0% of premiums paid in the first policy
year.
ADMINISTRATIVE CHARGE FOR WITHDRAWAL OR TRANSFER. Chubb Life charges $50 for
each withdrawal and for certain transfers between Divisions or between the
Divisions and the General Account. See "THE POLICIES -Transfers" for a
description of situations in which the Transfer Charge will be imposed.
GUARANTEED DEATH BENEFIT CHARGE. If the Guaranteed Death Benefit Rider is
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added to the Policy, a monthly charge of $.01 per $1,000 of Specified Amount
will be deducted each month from the Accumulation Value of the Policy.
CHARGE FOR OPTIONAL RIDER BENEFITS. An additional charge is required if the
Policyowner elects to purchase certain optional insurance benefits by rider.
Charges are deducted monthly from a Policy's Accumulation Value. See "POLICY
BENEFITS AND RIGHTS-Optional Insurance Benefits".
See "CHARGES AND EXPENSES" for a fuller description of charges under the
Policies.
IS THERE A CHARGE AGAINST SEPARATE ACCOUNT C FOR FEDERAL INCOME TAX?
Currently no charge is made against any Division for Federal income taxes.
However, if Chubb Life incurs, or expects to incur, income taxes attributable
to any Division of this class of Policies in future years, it reserves the
right to make a charge. See the discussion of the Federal DAC Tax Charge under
"CHARGES AND DEDUCTIONS-Premium Charges".
HOW ARE AMOUNTS ALLOCATED TO EACH DIVISION OR THE GENERAL ACCOUNT?
The Policyowner indicates in the application the allocation of Net Premium
payments among the Divisions and the General Account. The initial Net Premium
is allocated on the Allocation Date and Net Premiums received after the
Allocation Date are allocated generally on the Date of Receipt. The minimum
percentage of any Net Premium payment allocated to any Division or the General
Account is 1%. The Policyowner may change his or her allocation of future
premium payments by written notice to Chubb Life or by telephone, if the proper
telephone authorization is on file, without payment of any fee or penalty.
WHAT IS THE RELATIONSHIP BETWEEN THE PREMIUM AND THE AMOUNT ALLOCATED TO THE
DIVISIONS?
The initial Net Premium is allocated by Chubb Life on the Allocation Date
among the Divisions and the General Account as directed by the Policyowner.
Prior to the Allocation Date the initial Net Premium is held in Chubb Life's
General Account. The initial Net Premium is the initial gross premium, plus any
additional premium paid prior to the Allocation Date, less the State Premium
Tax Charge, the Federal DAC Tax Charge and the Sales Charge. These charges also
apply to subsequent premium payments.
WHAT COMMISSIONS ARE PAID TO AGENTS?
The Policies are sold by agents who represent Chubb Life and are registered
representatives of Chubb Securities Corporation or other registered
broker-dealers. Commissions payable to agents are described under "DISTRIBUTION
OF THE POLICY".
WHAT IS THE DEATH BENEFIT?
The Death Benefit under Chubb Advisor I is the amount payable to the named
Beneficiary when the person insured under the Policy dies. The Death Benefit
under Chubb Advisor II is the amount payable to the named Beneficiary when the
last surviving Insured dies. The Death Benefit proceeds will equal the Death
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Benefit, plus any additional rider benefits included and then due, minus any
outstanding Policy Debt or unpaid cost of insurance charges or charges for
riders.
In the initial application, the Policyowner will make two elections to
determine the Death Benefit under the Policy. First, the Policyowner will choose
one of two Death Benefit options offered under the Policy. Second, the
Policyowner will choose the Death Benefit qualification test, which is the
method for qualifying the Policy as a life insurance contract for purposes of
Federal tax law. The available Death Benefit qualification tests available under
the Policy are the cash value accumulation test and the guideline premium
test.
ONCE ELECTED, THE DEATH BENEFIT QUALIFICATION TEST CANNOT BE CHANGED FOR THE
DURATION OF THE POLICY. If no Death Benefit qualification test or option is
designated, the guideline premium test under Option I will be assumed by Chubb
Life to have been selected.
The amount of life insurance proceeds payable under a Policy will depend upon
which of the two Death Benefit options available under a Policy is in effect, as
follows:
OPTION I: For Policies issued pursuant to the cash value accumulation test,
the Death Benefit equals the greater of the current Specified Amount or the
Accumulation Value of the Policy at the date of death multiplied by the corridor
percentage, as described below. For Policies issued pursuant to the guideline
premium test, the Death Benefit equals the greater of the current Specified
Amount or the Accumulation Value of the Policy at the date of death multiplied
by the corridor percentage, as described below.
OPTION II: The Death Benefit equals the current Specified Amount plus the
Accumulation Value of the Policy on the date of death. For Policies issued
pursuant to the cash value accumulation test, the Death Benefit will not be less
than the Accumulation Value on the date of death multiplied by the corridor
percentage. For Policies issued pursuant to the guideline premium test, the
Death Benefit will not be less than the Accumulation Value multiplied by the
corridor percentage. See "POLICY BENEFITS AND RIGHTS-Death Benefits".
Under the Guaranteed Death Benefit Rider the Death Benefit is guaranteed to
never be less than the Specified Amount provided that a cumulative minimum
premium requirement is met.
HOW DOES THE ACCUMULATION VALUE OF A POLICY VARY IN RELATION TO THE DIVISIONS'
INVESTMENT EXPERIENCE?
The Policy provides for Accumulation Value equal to the total of the Policy's
Accumulation Value in the Divisions and Accumulation Value in the General
Account. The Policy's Accumulation Value will reflect the amount and frequency
of premium payments, the investment experience of the Divisions, the value of
Net Premiums (Net Premiums plus credited interest), if any, allocated to the
General Account, policy loans, any withdrawals, and any charges imposed in
connection with the Policy. There is no minimum guaranteed Accumulation Value.
WHAT IS THE LOAN PROVISION AND HOW DOES A LOAN AFFECT THE DEATH BENEFIT,
ACCUMULATION VALUE AND CASH VALUE?
After the first policy anniversary, a Policyowner may borrow against the Cash
Value of his or her Policy. Generally, the maximum loan amount is 90% of the
Cash Value of the Policy on the date of the loan. Loan interest is payable at
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the end of each policy year and all Policy Debt outstanding will be deducted
from proceeds payable at the Insured's death for Chubb Advisor I and at the
death of the last surviving Insured for Chubb Advisor II, upon maturity, or
upon surrender.
When a policy loan is made, a portion of the Policy's Accumulation Value
sufficient to secure the loan will be transferred to the General Account. A
policy loan removes the proceeds from the investment experience of Separate
Account C which will have a permanent effect on the Accumulation Value, the
Cash Value and the Death Benefit even if the loan is repaid.
There are two types of loans available. See "CASH VALUE BENEFITS-Policy
Loans" for a description of the two types of loans and their applicable
interest rates.
IS THERE A SHORT-TERM CANCELLATION RIGHT?
The Policyowner has the limited right to return a Policy for cancellation and
full refund of all premiums paid. Chubb Life will cancel the Policy if it is
returned by mail or personal delivery to Chubb Life, or to the agent who sold
the Policy, within 20 days after the delivery of the Policy to the Policyowner.
Chubb Life will return to the Policyowner, within seven days, all payments
received on the Policy.
WHAT TRANSFERS ARE A POLICYOWNER ALLOWED?
A Policyowner may transfer Accumulation Value among the Divisions and between
the Divisions and the General Account. However, transfers out of the General
Account are subject to restrictions. Chubb Life currently permits up to 24
transfers per policy year, twelve of which will not incur the $50 Transfer
Charge. See "THE POLICIES-Transfers" for a more complete description of the
terms and conditions of the transfer privileges under the Policies.
ARE THE BENEFITS UNDER THE POLICIES SUBJECT TO FEDERAL INCOME TAX?
Under current interpretations of the tax laws, all Death Benefits paid under
the Policies will generally be fully excludable from the gross income of the
Beneficiary for Federal income tax purposes. Treasury regulations require that
investments underlying the Policies be adequately diversified. Chubb Life
believes it is presently in compliance with the regulations and intends to
remain in compliance with such regulations and other Federal tax law
requirements.
If a Policyowner elects to make certain transactions, including a withdrawal,
surrender or exchange of the Policy, the Policyowner may be taxed on a portion
of any amounts paid to the Policyowner (which may include any prior policy
loans cancelled in the transaction). Also, if premiums paid by a Policyowner
exceed certain limits and the Policy is deemed a modified endowment contract,
then any pre-death distributions, including loans, surrenders and partial
withdrawals, may be treated as income taxable to the Policyowner and may also
cause the Policyowner to incur a penalty tax of 10%. Policyowners are advised
to consult with their own tax advisers with regard to the tax consequences of
the Policy. See "FEDERAL TAX MATTERS".
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CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Life is a stock life insurance company originally chartered in
Tennessee and redomesticated to the State of New Hampshire in 1991. It has been
continuously engaged in the insurance business since 1903. It is licensed to do
life insurance business in forty-nine states of the United States, Puerto Rico,
the U.S. Virgin Islands, Guam and in the District of Columbia. Chubb Life is a
wholly-owned subsidiary of The Chubb Corporation, a New Jersey corporation. The
principal offices of The Chubb Corporation are located at 15 Mountain View
Road, Warren, New Jersey. Its telephone number is 908/903-2000. Chubb Life's
home office is located at One Granite Place, Concord, New Hampshire 03301,
telephone number 603/226-5000.
Chubb Life and its subsidiaries had total assets, at December 31, 1995, of
$4,275,365,000 and had over $66 billion of insurance in force, while total
assets of The Chubb Corporation and its subsidiaries (including Chubb Life), as
of the same date, were $22,996,525,000.
Chubb Life writes individual life insurance and annuities. It is subject to
New Hampshire law governing insurance, and is regulated and supervised by the
New Hampshire Insurance Commissioner. Chubb Life is currently rated AAA
(Superior) by Standard & Poors's Corporation and A+ (Superior) by A.M. Best and
Company. These ratings do not apply to Separate Account C, but reflect the
opinion of the rating company as to Chubb Life's ability to meet its contractual
obligations to its policyowners and its relative financial strength. Even though
assets in Separate Account C are held separately from Chubb Life's other assets,
ratings of Chubb Life may still be relevant to Policyowners since not all of
Chubb Life's contractual obligations relate to payments based on those
segregated assets.
CHUBB SEPARATE ACCOUNT C
Separate Account C is a separate account of Chubb Life established under New
Hampshire law on August 4, 1993. Separate Account C is registered as a unit
investment trust with the SEC under the Investment Company Act of 1940 (the
"1940 Act") and is subject to the 1940 Act's requirements. Such registration
does not involve supervision of the management or investment policies of
Separate Account C or Chubb Life by the SEC. Chubb Life is the depositor of
Separate Account C. Under New Hampshire law, the assets of Separate Account C
are held exclusively for the benefit of Policyowners and persons entitled to
payments under this Policy and other variable life insurance policies funded by
Separate Account C. The income, realized or unrealized capital gains, or capital
losses of Separate Account C are credited to or charged against the assets held
in Separate Account C in accordance with the terms of the Policy, without regard
to other income or capital gains or losses of any other account arising out of
any other business Chubb Life conducts. Separate Account C is administered and
accounted for as a part of the general business of Chubb Life, but the assets of
Separate Account C are not chargeable with liabilities arising out of any other
business which Chubb Life may conduct.
Chubb Life holds the assets of Separate Account C physically segregated and
separate and apart from the General Account. Chubb Life maintains records of all
purchases and redemptions of Portfolio shares by each of the Divisions.
DIVISIONS. The Policies presently offer six Divisions but may, in the future,
add or delete Divisions. Each Division will invest exclusively in shares
representing an interest in a Portfolio.
Investment income and other distributions to each Division arising from the
applicable underlying Portfolio increase the assets of the corresponding
Division. The income and both realized and unrealized gains or losses on the
assets of each Division are credited to or charged against that Division without
regard to income, gains or losses from any other Division.
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THE FUNDS
GENERAL. Separate Account C invests in shares of open-end, management
investment companies (the "Funds") or their separate investment series (the
"Portfolios") registered with the SEC under the 1940 Act. The Portfolios are
maintained separately from the assets of the other Portfolios and each Portfolio
has investment objectives and policies which are different from those of the
other Portfolios. Thus, each Portfolio operates as a separate investment fund,
and the income, gains or losses of one Portfolio has no effect on the investment
performance of any other Portfolio.
The Funds were organized primarily as investment vehicles for use in
connection with variable annuity contracts and variable life insurance policies
offered by one or more life insurance companies which may or may not be
affiliated with Chubb Life.
Although Chubb Life does not currently foresee any disadvantages to
Policyowners arising out of variable life insurance separate accounts and
variable annuity separate accounts investing in the Funds simultaneously, there
is a possibility that a material conflict may arise between the interest of
Separate Account C and one or more of the other separate accounts investing in
the Funds. The Directors or Trustees of the Funds intend to monitor events in
order to identify any material conflicts and to determine what action, if any,
should be taken in response thereto. Material conflicts could result from, for
example, (i) changes in state insurance laws, (ii) changes in Federal income tax
laws, (iii) changes in the investment management of any Portfolio or (iv)
differences in voting instructions between those given by variable life
insurance policyowners and those given by variable annuity owners.
There can be no assurance that any of the Portfolios will achieve its stated
objectives. The specialized nature of each Portfolio gives rise to significant
differences in the relative investment potential and market and financial risks
of each Portfolio. Policyowners should consider the unique features of each
Portfolio before investing in any Portfolio. For more detailed information
concerning each Portfolio, including a description of the investment risks,
reference is made to the prospectuses for the Funds that accompany this
Prospectus, or the Statements of Additional Information for the Funds, available
on request.
In some states, insurance regulations may restrict the availability of
particular Portfolios.
In the event of a material change in the investment policy of a Division or
the Portfolio in which it invests, the Policyowners will be notified of the
change. If the Policyowners have values in that Division, Chubb Life will
transfer it without charge on request by the Policyowner to another Division or
the General Account. Chubb Life must receive written request from the
Policyowner within sixty (60) days of the later of: (a) the effective date of
such change in the investment policy, or (b) the receipt of the notice of the
Policyowner's right to transfer.
Separate Account C will purchase shares of the Funds at net asset value in
connection with Net Premiums allocated to the Divisions in accordance with the
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Policyowner's directions and will redeem shares of the Funds to process
transfers, surrenders, partial withdrawals and generally to meet Policy
obligations or make adjustments in reserves. The Funds will sell and redeem
their shares at net asset value as of the date of receipt by Separate Account C
of Net Premiums or notification by a Policyowner.
CHUBB AMERICA FUND, INC. Chubb America Fund, Inc. is organized as a Maryland
corporation and is registered as an open-end diversified management company
under the 1940 Act. Chubb America Fund, Inc. currently has nine separate series
each of which has different objectives; however, only three of these series are
offered through the Policies. These series are the Money Market Portfolio, Bond
Portfolio and Growth and Income Portfolio.
The investment adviser to Chubb America Fund, Inc. is Chubb Investment
Advisory Corporation ("Chubb Investment Advisory") which is a subsidiary of
Chubb Life. Chubb Investment Advisory has in turn retained Chubb Asset Managers,
Inc. ("Chubb Asset"), an affiliate of Chubb Life, to provide sub-investment
advisory services for the Money Market Portfolio, Bond Portfolio and Growth and
Income Portfolio.
An investment advisory fee is charged monthly against each Portfolio by Chubb
Investment Advisory at the annual rate of .75 percent of the average daily net
asset value of the Growth and Income Portfolio and .50 percent of the average
daily net asset value of the Money Market Portfolio and Bond Portfolio. These
fees are reduced to .70 and .45 percent, respectively, of the average daily net
asset value exceeding $200,000,000 and are further reduced to .65 and .40
percent, respectively, of the average daily net asset value exceeding
$1,300,000,000. The compensation of Chubb Asset is at the annual rate of .35
percent of the average daily net asset value of the Money Market and Bond
Portfolios and at the annual rate of .50 percent of the average daily net asset
value of the Growth and Income Portfolio. These fees are reduced to .30 and .45,
respectively, of the average daily net asset value exceeding $200,000,000 and
are further reduced to .25 and .40 percent respectively, of the average daily
net asset value exceeding $1,300,000,000. Chubb Investment Advisory is wholly
responsible for paying such sub-investment management fees out of its investment
advisory fees described above.
CHUBB SERIES TRUST. Chubb Series Trust is organized as a Delaware business
trust and is registered as an open-end diversified management company under the
1940 Act. Chubb Series Trust currently has five series each of which has
different objectives; however, only three of these series are offered through
the Policies. These series are the Resolute Equity Portfolio, Resolute Small
Company Portfolio and Resolute International Equity Portfolio.
The investment manager to the Chubb Series Trust is Chubb Investment Advisory.
Chubb Investment Advisory has in turn retained Morgan Guaranty Trust Company of
New York ("Morgan") to provide sub-investment advisory services to each
Portfolio.
An investment management fee is charged monthly against each Portfolio by
Chubb Investment Advisory at the annual rate of .60 percent of the average daily
net asset value of the Resolute Equity Portfolio, and .80 percent of the average
daily net asset value of the Resolute Small Company Portfolio and the Resolute
International Equity Portfolio. The compensation of Morgan is set at
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the annual rate of .40 percent of the average daily net asset value of the
Resolute Equity Portfolio, and .60 percent of the average daily net asset value
of the Resolute Small Company Portfolio and the Resolute International Equity
Portfolio. Chubb Investment Advisory is solely responsible for paying such sub-
investment advisory fees out of its investment management fee described
above.
INVESTMENT OBJECTIVES. The investment objectives of each Portfolio offered
through the Policies are set forth below.
CHUBB AMERICA FUND, INC.
MONEY MARKET PORTFOLIO: to achieve the highest possible current income,
consistent with preservation of capital and maintenance of liquidity, by
investing primarily in short-term money market instruments other than commercial
paper. AN INVESTMENT IN THE MONEY MARKET PORTFOLIO IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT.
BOND PORTFOLIO: to provide a stable level of income, consistent with limiting
risk to principal, by investing primarily in high quality corporate debt
securities and U.S. Government debt obligations.
GROWTH AND INCOME PORTFOLIO: to seek long-term growth of capital by investing
primarily in a wide range of equity issues that may offer capital appreciation
and, secondarily, to seek a reasonable level of current income.
CHUBB SERIES TRUST
RESOLUTE EQUITY PORTFOLIO: to provide a high total return from a portfolio
comprised of selected equity securities.
RESOLUTE SMALL COMPANY PORTFOLIO: to provide a high total return from a
portfolio of equity securities of small companies.
RESOLUTE INTERNATIONAL EQUITY PORTFOLIO: to provide a high total return from a
portfolio of equity securities of foreign corporations.
THE POLICIES
GENERAL. Each form of the Policy is designed to provide the Policyowner with
lifetime insurance protection and flexibility in connection with the amount and
frequency of premium payments and the level of life insurance proceeds payable
under the Policy. Chubb Advisor I is an individual flexible premium variable
life insurance policy which provides life insurance coverage on one Insured,
with the Death Benefit payable upon the death of such Insured. Chubb Advisor II
is a flexible premium survivorship variable life insurance policy which provides
life insurance coverage on two Insureds, with a Death Benefit payable only when
the last surviving Insured dies. The Policyowner is not required to pay
scheduled premiums to keep a Policy in force but may, subject to certain
limitations, vary the frequency and amount of premium payments. Moreover,
subject to certain limitations, a Policy allows a Policyowner to adjust the
level of life insurance payable under the Policy without having to purchase a
new Policy by increasing or decreasing the Specified Amount. Thus, as insurance
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needs or financial conditions change, the Policyowner has the flexibility to
adjust coverage and vary the premium payments. Death Benefits are payable under
two options as described in "POLICY BENEFITS AND RIGHTS-Death Benefits".
To purchase a Policy, a completed application must be submitted to Chubb Life
through the agent selling the Policy. Applicants for insurance must furnish
satisfactory evidence of insurability. An Insured under Chubb Advisor I must
generally be between the ages of 0 and 80 and the Insureds under Chubb Advisor
II must generally be between 40 and 85 with only one Insured over the age of 80.
The Joint Equal Age of the Insureds under Chubb Advisor II cannot be over age
80. The smoking status of each Insured is reflected in the cost of insurance
rates; provided, however, that under Chubb Advisor I distinctions between
smokers and nonsmokers are only made for Insureds age 15 and over. Policies
issued in certain States will not directly reflect the sex of the Insured in
either the premium rates or the charges or values under the Policy. Accordingly,
illustrations set forth in this Prospectus may differ for such Policies.
The minimum Specified Amount at issue is $250,000. Chubb Life reserves the
right to revise its rules from time to time to specify different minimum
Specified Amounts at issue. If the Specified Amount applied for plus all other
insurance in force which is underwritten by Chubb Life or its affiliates exceeds
an amount which varies between $300,000 and $2,000,000 based on various factors,
Chubb Life will reinsure all or a portion of the Policy. Acceptance of an
application or revocation of a Policy during the contestable period is subject
to Chubb Life's insurance underwriting rules and Chubb Life may, in its sole
discretion, reject any application or related premium for any reason or contest
a Policy.
PAYMENT OF PREMIUMS. Premiums must be paid to Chubb Life at its home office or
through an authorized agent of Chubb Life for forwarding to Chubb Life's home
office. The initial premium may be wired to Chubb Life's bank upon notification
that the application has been approved by Chubb Life. Subsequent premium
payments may also be wired to Chubb Life's bank. The financial institution
transmitting the wired funds may impose a charge for this service. In addition,
Chubb Life has administrative procedures whereby premium payments in response to
billing notices are sent directly to Chubb Life's bank. Unlike traditional
insurance contracts, there is no fixed schedule of premium payments on a Policy
either as to the amount or the timing of the payment. A Policyowner may
determine within specified limits his or her own premium payment schedule. These
limits will be set forth by Chubb Life and will include a minimum initial
premium payment sufficient to keep the Policy in force for three months and may
also include limits on the total amount and frequency of payments in each Policy
year. No payment may be less than $250. In order to help the Policyowner obtain
the insurance benefits desired, a Planned Periodic Premium and Premium Frequency
will be stated in each Policy. This premium will usually be based upon the
Policyowner's insurance needs and financial abilities, the current financial
climate, the Specified Amount of the Policy, and the Insured's age, sex and risk
class, as discussed with the agent. The Policyowner is not required to pay such
premiums and failure to make any premium payment will not necessarily result in
lapse of the Policy, provided the Policy's Cash Value, less Policy Debt, if any,
is sufficient to pay monthly deductions. Conversely, adherence to the schedule
of Planned Periodic Premiums will not assure that the Policy will remain in
force. See "THE POLICIES -Policy Lapse".
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the next succeeding day which is a Valuation Date. The Date of Receipt of a
premium payment sent directly to Chubb Life's bank pursuant to a billing notice
will be the date the payment is received at the bank and the value of any
Division to which the payment is allocated will be determined as of such date
provided such date is a Valuation Date; otherwise, such determination will be
made on the next succeeding day which is a Valuation Date.
TRANSFERS. Accumulation Value may be transferred among the Divisions and
between the Divisions and the General Account. In addition to individual
transfer requests, Policyowners may elect either a Dollar Cost Averaging
feature or an Automatic Portfolio Re-Balancing feature which provides for
systematic transfers as described below. Transfer requests may be made in
writing or by telephone, assuming the proper telephone authorization form
is on file with Chubb Life. The total amount transferred each time must be at
least $250 unless a lesser amount constitutes the entire Accumulation Value
in a Division or in the General Account. Accumulation Value transferred from
one Division or from the General Account into more than one Division, and/or
into the General Account, counts as one transfer. Similarly, transferring
Accumulation Value from more than one Division, and/or the General Account,
into one other Division or the General Account, counts as one transfer.
Chubb Life currently permits 12 transfers per policy year without imposing a
Transfer Charge. For transfers in excess of 12 in any policy year, a Transfer
Charge of $50 to cover administrative costs will be imposed each time amounts
are transferred and, unless otherwise specified by the Policyowner, will be
deducted on a pro-rata basis from the Division or Divisions or the General
Account into which the amount is transferred. However, no Transfer Charge will
be imposed on the transfer of the initial Net Premium payments, plus interest
earned, from the General Account to the Divisions on the Allocation Date or on
loan repayments. No Transfer Charge will be imposed for transfers pursuant to
the Dollar Cost Averaging or Automatic Portfolio Re-Balancing features.
Currently, a Policyowner may make up to 24 transfers per policy year. Chubb Life
reserves the right to revoke or modify transfer privileges and charges.
At any time the Policyowner may transfer 100% of the Policy's Accumulation
Value to the General Account and elect to have all future premium payments
allocated to the General Account. While 100% of the Policy's Accumulation Value
and all future premium payments are allocated to the General Account, the
minimum period the Policy will be in force will be fixed and guaranteed. The
minimum period will depend on the amount of Accumulation Value, the Specified
Amount, the sex, the Attained Age, and rating class of the Insured at the time
of transfer. The minimum period will decrease if the Policyowner subsequently
elects to increase the Specified Amount, elects to surrender the Policy, or
elects to make a withdrawal. The minimum period will increase if the Policyowner
elects to decrease the Specified Amount, additional premium payments are
received, or Chubb Life credits a higher interest rate or charges a lower cost
of insurance rate than those guaranteed for the General Account.
Except for transfers in connection with Dollar Cost Averaging, Automatic
Portfolio Re-Balancing and loan repayments, transfers out of the General Account
to the Divisions are permitted only once every 180 days and are limited in
amount to the lesser of (a) 25% of the Accumulation Value in the General Account
not being held as loan collateral or (b) $100,000. In addition, any other
transfer rules, including minimum transfer amounts, also apply. Chubb
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Life reserves the right to modify these restrictions.
No Transfer Charge will be imposed for a transfer of all Accumulation Value in
Separate Account C to the General Account. However, any transfer from the
General Account to the Division(s) will be subject to the Transfer Charge,
unless it is one of the first 12 transfers in a policy year and except for the
transfer of the initial Net Premium payments, plus interest earned, from the
General Account, loan repayments, and transfers pursuant to the Dollar Cost
Averaging or Automatic Portfolio Re-Balancing features.
Chubb Life reserves the right to refuse to accept or to place certain
restrictions on transfers made by third-party agents acting on behalf of
multiple Policyowners or made pursuant to market timing services when Chubb Life
determines, in its sole discretion, that such transfers will be detrimental to
the Portfolios and the Policyowners as a whole. Such transfers may cause
increased trading and transaction costs, disruption of planned investment
strategies, forced and unplanned portfolio turnover, and lost opportunity costs,
and may subject the Portfolio to large asset swings that diminishes the
Portfolio's ability to provide maximum investment return to all
Policyowners.
A feature called Dollar Cost Averaging is available to Policyowners under
which a Policyowner deposits an amount, subject to a minimum of $3,000, in the
Division investing in the Money Market Portfolio and elects to have a specified
dollar amount (the "Periodic Transfer Amount") automatically transferred to one
or more of the Divisions on a monthly, quarterly, or semi-annual basis. This
feature allows Policyowners to systematically invest in the Divisions at various
prices which may be higher or lower than the price a Policyowner would pay when
investing the entire amount at one time and at one price. Each Periodic Transfer
Amount is subject to a minimum amount of $250. A minimum of 1% of the Periodic
Transfer Amount must be transferred to any specified Division. These amounts are
subject to change at Chubb Life's discretion. If a transfer would reduce
Accumulation Value in the Division investing in the Money Market Portfolio to
less than the Periodic Transfer Amount, Chubb Life reserves the right to include
such remaining Accumulation Value in the amount transferred. At the time a
policyowner elects the Dollar Cost Averaging feature, an election is made
between Fixed Amount Dollar Cost Averaging or Continuous Mode Dollar Cost
Averaging. Under Fixed Amount Dollar Cost Averaging, the feature will continue
until the Designated Amount has been transferred or the policyowner gives
notification of cancellation of the feature prior to transfer of the entire
Designated Amount. Once the Designated Amount has been transferred, the
policyowner must complete a new Dollar Cost Averaging election form. Under
Continuous Mode Dollar Cost Averaging, any amounts deposited into the Repository
Account, and not just the Designated Amount, will be transferred. Dollar Cost
Averaging is currently available at no charge to Policyowners. Although Chubb
Life reserves the right to assess a charge, no greater than cost and with 30
days advance notice to Policyowners, it has no present intention to do so.
An Automatic Portfolio Re-Balancing feature is also available to Policyowners.
This feature provides a method for re-establishing fixed proportions between
various types of investments on a systematic basis. Under this feature, the
allocation between Divisions and the General Account will be automatically re-
adjusted to the desired allocation, subject to a minimum of 1% per Division or
General Account, on a quarterly, semi-annual or annual basis.
21
<PAGE>
A Policyowner may choose only one of the two features. Transfers and
adjustments pursuant to each feature will occur on a Policy's Monthly
Anniversary Date in the month in which the transaction is to take place or the
next succeeding business day if the Monthly Anniversary Date falls on a holiday
or a weekend. The applicable authorization form must be on file at Chubb Life
before either feature may begin. Neither feature guarantees profits nor protects
against losses. Transfers under these features do not count toward the 12 free
transfers or the 24 transfers currently allowed per year. Chubb Life reserves
the right to modify the terms and conditions of these features upon 30 days
advance notice to Policyowners.
TELEPHONE TRANSFERS, LOANS AND REALLOCATIONS. Policyowners may request by
telephone transfers of Accumulation Value or reallocation of premiums (including
allocation changes pursuant to existing Dollar Cost Averaging and Automatic
Portfolio Re-Balancing programs), provided that the appropriate authorization
form is on file with Chubb Life. Chubb Life may also, in its discretion, permit
loans to be made by telephone, provided that the proper authorization form is on
file with Chubb Life. During periods of heavy telephone transfers, implementing
a telephone transfer may be difficult. If a Policyowner is unable to reach Chubb
Life via telephone, the Policyowner should send a written request to Chubb Life
via an express mailing service or via the Chubb Life telecopier machine at (603)
226-5155. (Any transfer requests received via telecopier are considered
telephone transfers and are bound by the conditions outlined in the signed
authorization form.) Chubb Life reserves the right to discontinue telephone
transfers at any time without notice to the Policyowners. Procedures have been
established that are reasonably designed to reduce the risk of unauthorized
telephone transfers, loan requests or allocation changes. These procedures
include requiring personal identification information, tape recording calls and
providing written confirmations to Policyowners. However, there still exists
some risk. Neither Chubb Life, Chubb Securities Corporation, nor any of their
affiliates are liable for any loss resulting from unauthorized telephone
transfers, loan requests or premium allocation changes if its procedures have
been followed, and a Policyowner bears the risk of loss in such situation.
POLICY LAPSE. Failure to make a premium payment on a Policy will not
necessarily cause the Policy to lapse. The duration of a Policy depends upon its
Cash Value. The Policy will remain in force so long as the Cash Value, less any
outstanding Policy Debt, is sufficient to cover cost of insurance and any rider
charges. In the event the Cash Value, less any outstanding Policy Debt, is
insufficient to pay these monthly cost of insurance and rider charges ("monthly
deduction") the Policyowner will be given a sixty-one day period ("grace
period") within which to make a premium payment to avoid lapse. The premium
required to avoid lapse must be sufficient in amount, after the deduction of the
State Premium Tax Charge, the Federal DAC Tax Charge and the Sales Charge, to
cover the monthly deduction for at least three policy months. This required
premium will be set forth in a written notice which Chubb Life will send to the
Policyowner thirty-one days prior to the end of the grace period. The Policy
will continue in force through the grace period, but if no payment is
forthcoming, the Policy will terminate without value at the end of the grace
period. If the Insured under Chubb Advisor I or the last surviving Insured under
Chubb Advisor II dies during the grace period, the Death Benefit payable under
the Policy will be reduced by the amount of the monthly deduction
22
<PAGE>
due and unpaid and the amount of any outstanding Policy Debt. In addition, if
the Cash Value of the Policy at any time should decrease so the aggregate
amount of outstanding Policy Debt secured by the Policy exceeds the Cash Value
shown in the Policy and an additional payment is not made within sixty-one days
the Policy will lapse.
REINSTATEMENT. If the Policy lapses, the Policyowner may reinstate the Policy.
The terms of the original contract will apply upon reinstatement. The
Accumulation Value, before payment of the required reinstatement premium, will
equal the Accumulation Value on the date of termination. The policy year on
reinstatement will be measured from the Policy Date. An application for
reinstatement may be made any time within five years of lapse and before the
Maturity Date, but satisfactory proof of insurability of the Insured under Chubb
Advisor I or the Insureds or surviving Insured under Chubb Advisor II and
payment of a reinstatement premium is required. The reinstatement premium, after
deduction of the State Premium Tax Charge, the Federal DAC Tax Charge and the
Sales Charge, must be sufficient to cover the monthly deduction for three policy
months following the effective date of reinstatement. If a loan was outstanding
at the time of lapse, Chubb Life will require, at the election of the
Policyowner, repayment or reinstatement of the loan before permitting
reinstatement of the Policy. The effective date will be the date of approval of
the reinstatement application, which will be as of a Monthly Anniversary Date.
POLICY "FREE LOOK". The Policyowner has a limited right to return a Policy for
cancellation and a full refund of all premiums paid. Chubb Life will cancel the
Policy if it is returned by mail or personal delivery to Chubb Life, or to the
agent who sold the Policy, within 20 days after the delivery of the Policy to
the Policyowner. Chubb Life will return to the Policyowner within seven days all
payments received on the Policy. Prior to the Allocation Date the initial Net
Premium will be held in Chubb Life's General Account; Chubb Life will retain any
interest earned if the "free look" right is exercised.
CHARGES AND DEDUCTIONS
PREMIUM CHARGES. Upon receipt of each premium payment and before allocation of
payment among the Divisions and the General Account, Chubb Life will deduct a
State Premium Tax Charge of 2.5% (which represents an average of actual premium
taxes imposed), unless otherwise required by state law. Currently, the taxes
imposed by States on premiums range up to 4% of premiums paid, while some States
do not impose a premium tax. The 2.5% state premium tax charge may therefore be
higher or lower than the actual premium tax imposed by states in which a
particular Policyholder resides. Chubb Life will not increase this charge under
outstanding Policies, but reserves the right to change this charge for Policies
not yet issued in order to correspond with changes in the state premium tax
levels. Chubb Life does not expect to derive a profit from this charge.
Chubb Life will also deduct from each premium a charge currently equal to
1.25% to cover the estimated cost to Chubb Life of the Federal income tax
treatment of the Policies' deferred acquisition costs ("Federal DAC Tax
Charge"). Chubb Life has determined that this charge is reasonable in relation
to Chubb Life's increased Federal income tax burden under the Code resulting
from the receipt of premiums. Chubb Life will not increase this charge under
outstanding Policies, but reserves the right, subject to any required
regulatory approval, to change this charge for Policies not yet issued in order
23
<PAGE>
to correspond with changes in the DAC tax.
Chubb Life will also deduct a Sales Charge of 3% from each premium payment to
compensate Chubb Life for the cost of selling the Policy. The cost of selling
the Policy includes, among other things, agents' commissions, commission
overrides, advertising and the printing of prospectuses and sales literature.
Under normal circumstances, the amount of this charge, plus the Surrender Charge
discussed below, are expected to compensate Chubb Life for total sales expenses
for that year. To the extent sales expenses in any one policy year are not
recovered by this Sales Charge and the Surrender Charge imposed upon surrenders
or withdrawals during the first five policy years, the sales expenses may be
recovered from other sources, including surplus, which may include profits, if
any, from the Mortality Risk Charge and the Expense Risk Charge.
MONTHLY DEDUCTION. On each Monthly Anniversary Date and on the Policy Date,
Chubb Life will deduct an Expense Risk Charge and an Administration Charge. The
Administration Charge is deducted during the first twenty policy years only.
These charges are calculated by taking the Accumulation Value as of each Monthly
Anniversary Date and on the Policy Date and multiplying such Accumulation Value
by a monthly factor equal on an annual basis to the following percentages:
<TABLE>
<CAPTION>
Expense Risk Administration
Accumulation Value Charge Charge
- ------------------ ------ ------
<S> <C> <C>
Less Than $250,000............................... 0.20% 0.10%
$250,000 But Less Than $1,000,000................ 0.10% 0.10%
$1,000,000 or Greater............................ 0.00% 0.10%
</TABLE>
The Expense Risk Charge is assessed to cover Chubb Life's expense risk under
the Policies. Specifically, Chubb Life bears the risk that the actual cost
incurred by it to administer the Policy will not be covered by charges assessed
under the Policy.
The Administration Charge is assessed to help defray administrative and
related expenses actually incurred in the administration of the Policies and
Separate Account C, and is not expected to be a source of profit. However, there
is no direct relationship between the amount of the Administration Charge
imposed on a given Policy and the amount of expenses directly attributable to
that Policy. The administrative functions and expenses assumed by Chubb Life in
connection with Separate Account C and the Policies include, but are not limited
to, clerical, accounting, actuarial and legal services, rent, postage,
telephone, office equipment and supplies, expenses of preparing and printing
registration statements, expense of preparing and typesetting prospectuses and
the cost of pricing prospectuses and sales literature not allocable to sales
expense, filing and other fees.
On each Monthly Anniversary Date and on the Policy Date, Chubb Life will also
deduct from the Accumulation Value of a Policy an amount to cover certain
charges and expenses incurred in connection with the Policy. In addition to
expense risk and administration charges, the amount of the cost of insurance
portion of the monthly deduction is equal to the cost of insurance for the
Policy as described below, and the cost of any optional benefits added by rider.
This amount will be allocated to one Division according to the Policyowner's
instructions, or, if no Division has been
24
<PAGE>
specified, Chubb Life will deduct the amount pro rata from each of the Divisions
and the General Account, excluding the amount held in the General Account as
loan collateral, in which the Policyowner is invested. If the Division specified
by the Policyowner does not have sufficient funds to cover the deduction amount,
Chubb Life will deduct the charge for that month as if no specification were
made.
The cost of insurance is determined on a monthly basis, and is determined
separately for the initial Specified Amount and each subsequent increase in the
Specified Amount. The monthly current cost of insurance rate is based on the
sex, Issue Age, including the joint equal age, policy year, smoking status and
rating class of the Insured(s), Specified Amount, Death Benefit option and
applicable corridor percentage.
The cost of insurance is calculated as (i) multiplied by the result of (ii)
minus (iii) where:
(i) is the cost of insurance rate as described in the Cost of Insurance Rates
provision contained in the Policy.
(ii) is the Death Benefit at the beginning of the policy month divided by
1.00327374, to arrive at the proper values for the beginning of the month
assuming the guaranteed interest rate of 4% that is applicable to the General
Account portion of the Policy; and
(iii) is the Accumulation Value at the beginning of the policy month.
If the corridor percentage is applicable, the Death Benefit used in the
foregoing calculation will reflect the corridor percentage. The Cost of
Insurance Charge is not affected by the death of the first Insured to die under
Chubb Advisor II.
The monthly cost of insurance rate will be determined by Chubb Life based
upon expectations as to future mortality experience, but can never exceed the
rates shown in the table of Monthly Guaranteed Cost of Insurance Rates set
forth in the Policy. Such guaranteed maximum rates are based on the
Commissioner's 1980 Standard Ordinary Mortality Table.
A guaranteed monthly accumulation value deduction adjustment will be
calculated at the beginning subsequent policy year and subtracted from the cost
of insurance for each month of that policy adjustment is in effect. The
adjustment will be allocated between the Divisions in the same payments. The
adjustment is calculated as (i) multiplied by the result of (ii) plus (iii)
minus (iv), but not less than zero, where:
(i) is .000333;
(ii) is the amount held in Separate Account C at the beginning of the policy
year;
(iii) is the Type B loan balance at the beginning of the policy year; and
(iv) is the Guideline Single Premium at issue under Section 7702 of the Code,
increased on a pro-rata basis for any increase in Specified Amount. See "CASH
VALUE BENEFITS - Policy Loans" for a description of Type B loans.
25
<PAGE>
The monthly deduction adjustment results from a reduction in Chubb Life's
margin for profit and expenses. The adjustment is used to reduce these margins
in situations where Chubb Life's risk is relatively less. The mortality risk is
lessened when the Accumulation Value grows in size relative to the Death
Benefit. The net amount at risk declines while the base on which the Mortality
Risk Charge and the Expense Risk Charge are levied increases. This is the reason
why the adjustment is applied to amounts in the Accumulation Value in excess of
the threshold of item (iv) above.
MORTALITY RISK CHARGE. Chubb Life will also assess a charge on a daily basis
against each Division at an annual rate of .50% of the value of the Divisions to
compensate Chubb Life for its assumption of certain mortality risks in
connection with the Policy. (This charge is not imposed on amounts held in the
General Account.) Specifically, Chubb Life bears the risk that the total amount
of Death Benefit payable under the Policy will be greater than anticipated.
SURRENDER CHARGE. Upon surrender during the first five policy years, Chubb
Life will assess a contingent deferred sales charge.
The Surrender Charges are as follows:
- -------------------------------------
<TABLE>
<CAPTION>
Surrender Charge as
-------------------
Policy Year Percentage of First Year Premiums
- ----------- ---------------------------------
<S> <C>
0 - 1 .......................................................5.0%
1+ - 2 .......................................................4.0%
2+ - 3 .......................................................3.0%
3+ - 4 .......................................................2.0%
4+ - 5 .......................................................1.0%
5+ .......................................................0.0%
</TABLE>
There is no Surrender Charge assessed for surrender after the fifth policy year.
A pro rata portion of any Surrender Charge will be assessed upon a withdrawal.
The Policy's Accumulation Value will be reduced by the amount of any withdrawal
plus any applicable pro-rata Surrender Charge.
The Surrender Charge helps to compensate Chubb Life for the cost of selling
the Policy, including the cost of advertising and the printing of the Prospectus
and sales literature.
ADMINISTRATIVE FEES. An administrative fee equal to $50 is imposed for each
transfer among the Divisions or the General Account, after the first 12
transfers in a policy year and except for the transfer of the initial Net
Premium payments, plus interest, from the General Account on the Allocation
Date, loan repayments and transfers pursuant to the Dollar Cost Averaging and
Automatic Portfolio Re-Balancing features. For withdrawals, an administrative
fee equal to $50 will be charged. All administrative fees are no greater than
the anticipated expenses of providing such services.
OTHER CHARGES. Chubb Life also reserves the right to charge the assets of each
Division to provide for any income taxes or other taxes payable by Chubb Life on
the assets attributable to that Division. An investment advisory fee
26
<PAGE>
for services provided by the Funds' investment managers and sub-investment
managers and certain other operating expenses are deducted from the assets of
each Portfolio of the Funds. See "THE FUNDS". Chubb Life also reserves the
right to charge an administrative fee, not to exceed $25, to cover the cost of
preparing any illustrations of Death Benefits, Accumulation Values and Cash
Values which may be requested by the Policyowner after the Policy Date.
POLICY BENEFITS AND RIGHTS
DEATH BENEFITS. So long as it remains in force, Chubb Advisor I provides for
the payment of life insurance proceeds upon the death of the Insured and Chubb
Advisor II provides for a Death Benefit payable upon the death of the last
surviving Insured. Proceeds will be paid to a named Beneficiary or contingent
Beneficiary. One or more Beneficiaries or contingent Beneficiaries may be named.
Life insurance proceeds may be paid in a lump sum or under an optional payment
plan. (See "SETTLEMENT OPTIONS" below.) Proceeds of the Policy will be reduced
by any outstanding Policy Debt and any due and unpaid charges and increased by
any benefits added by rider. Proceeds that are payable in a lump sum will be
increased to include interest as required by applicable state law. Proceeds will
ordinarily be paid within seven days after Chubb Life receives due Proof of
Death. Under Chubb Advisor II, due Proof of Death must also be submitted at the
time of the first death.
A Policyowner will make in the initial application two elections to determine
the Death Benefit under the Policy. First, the Policyowner will choose one of
two Death Benefit options offered under the Policy. Second, the Policyowner will
choose the Death Benefit qualification test, which is the method for qualifying
the Policy as a life insurance contract for purposes of Federal tax law. If no
Death Benefit qualification test or option is designated, the guideline premium
test under Option I, as described below, will be assumed by Chubb Life to have
been selected.
The amount of life insurance proceeds payable under a Policy will depend upon
which of the two Death Benefit options offered under the Policy, as
follows:
OPTION I: For Policies issued pursuant to the cash value accumulation test,
the Death Benefit equals the greater of the current Specified Amount or the
Accumulation Value of the Policy at the date of death multiplied by the corridor
percentage, as described below. For Policies issued pursuant to the guideline
premium test, the Death Benefit equals the greater of the current Specified
Amount or the Accumulation Value of the Policy at the date of death multiplied
by the corridor percentage, as described below.
OPTION II: The Death Benefit equals the current Specified Amount plus the
Accumulation Value of the Policy on the date of death. For Policies issued
pursuant to the cash value accumulation test, the Death Benefit will not be less
than the Accumulation Value on the date of death multiplied by the corridor
percentage. For Policies issued pursuant to the guideline premium test, the
Death Benefit will not be less than the Accumulation Value multiplied by the
corridor percentage.
The Policyowner will also choose from two Death Benefit qualification tests
are available under a Policy. ONCE ELECTED, THE DEATH BENEFIT QUALIFICATION TEST
CANNOT BE CHANGED FOR THE DURATION OF THE POLICY. The available Death Benefit
qualification tests are the cash value accumulation test and the guideline
premium test.
27
<PAGE>
Generally, the cash value accumulation test requires that under the terms of a
Policy, the Death Benefit must be sufficient so that the cash surrender value,
as defined in Section 7702 of the Code, does not at any time exceed the net
single premium required to fund the future benefits under the Policy. If the
Accumulation Value under a Policy is at any time greater than the net single
premium at the Insured's age and sex for the proposed Death Benefit, the Death
Benefit will be increased automatically by multiplying the Accumulation Value by
a "corridor percentage" computed in compliance with the Code. A list of
representative corridor percentages is set forth in Appendix A to this
Prospectus. The corridor percentages under the Policy vary according to the Age,
sex, and underwriting classification of the Insured(s), and the resulting Death
Benefit determined by using the corridor percentage will be at least equal to
the amount required for the Policy to be deemed life insurance under Section
7702. The corridor percentage is calculated using a four percent interest rate
or, if higher, the contractually guaranteed interest rate and using mortality
charges specified in the prevailing Commissioner's standard table as of the time
the Policy is issued.
The guideline premium test limits the amount of premiums payable under a
Policy to a certain amount for an Insured of a particular age and sex. The test
also applies a prescribed "corridor percentage" to determine a minimum ratio of
Death Benefit to Accumulation Value. A complete list of corridor percentages is
set forth in Appendix B to this Prospectus.
There are two main differences between the guideline premium test and the cash
value accumulation test. First, the guideline premium test limits the amount of
premium that may be paid into a Policy. No such limits apply under the cash
value accumulation test. (However, any premium that would increase the net
amount at risk is subject to evidence of insurability satisfactory to Chubb
Life.) Second, the factors that determine the minimum Death Benefit relative to
the Policy's Accumulation Value are different. Required increases in the minimum
Death Benefit due to growth in Accumulation Value will generally be greater
under the cash value accumulation test than under the guideline premium test.
Policyowners who desire to pay premiums in excess of the guideline premium test
limitations should elect the cash value accumulation test. Policyowners who do
not desire to pay premiums in excess of the guideline premium test limitations
should consider the guideline premium test. APPLICANTS FOR A POLICY SHOULD
CONSULT A QUALIFIED TAX ADVISER IN CHOOSING A DEATH BENEFIT ELECTION.
The following examples demonstrate the determination of Death Benefits under
Options I and II for the cash value accumulation test and the guideline premium
test. The examples show a Chubb Advisor I policy and a Chubb Advisor II policy,
with the same Specified Amounts and Accumulation Values. The Chubb Advisor I
example assumes a Policy was issued to a male, non-smoker Insured, Age 45 at the
time of calculation of the Death Benefit and that there is no outstanding Policy
Debt. The Chubb Advisor II example considers a Policy issued to one male and one
female, both non-smokers, and both Age 45. The Policy is in its tenth policy
year without any outstanding Policy Debt and with both insureds having attained
age 55.
<TABLE>
<CAPTION>
Chubb Advisor I
Cash Value Accumulation Guideline Premium
----------------------- -----------------
Test Test
---- -----
<S> <C> <C>
Specified Amount $1,000,000 $1,000,000
Accumulation Value $ 500,000 $ 500,000
Corridor Percentage 314% 215%
Death Benefit Under Option I $1,570,000 $1,075,000
Death Benefit Under Option II $1,570,000 $1,500,000
</TABLE>
28
<PAGE>
Under Chubb Advisor II, if the first death is by suicide and the surviving
Insured is classified by Chubb Life as insurable on the Policy Date, Chubb Life
will issue, upon request of the Policyowner and without evidence of
insurability, an individual policy providing coverage on the life of the
surviving Insured equal to the coverage on the Insureds for which premiums or
cost of insurance was refunded.
BENEFICIARIES. The original Beneficiaries and contingent Beneficiaries are
designated by the Policyowner on the application. If changed, the primary
Beneficiary or contingent Beneficiary is as shown in the latest change filed
with Chubb Life. One or more primary or contingent Beneficiaries may be named in
the application. In such case, the proceeds of the Policy will be paid in equal
shares to the survivors in the appropriate beneficiary class unless requested
otherwise by the Policyowner.
POSTPONEMENT OF PAYMENTS. Payment of any amount upon surrender, withdrawal,
policy loan, or benefits payable at death or maturity may be postponed whenever:
(i) the New York Stock Exchange is closed other than customary week-end and
holiday closings, or trading on the New York Stock Exchange is restricted as
determined by the SEC; (ii) the SEC by order permits postponement for the
protection of Policyowners; or (iii) an emergency exists, as determined by the
SEC, as a result of which disposal of securities is not reasonably practical or
it is not reasonably practicable to determine the value of net assets in
Separate Account C.
ASSIGNMENT. Ownership of the Policy can be assigned or the Policy can be
assigned as collateral security. Chubb Life must be notified in writing if the
Policy has been assigned. Each assignment will be subject to any payments made
or action taken by Chubb Life prior to its notification of such assignment.
Chubb Life is not responsible for the validity of an assignment. A Policyowner's
rights and the rights of the Beneficiary may be affected by an assignment.
ILLUSTRATION OF BENEFITS AND VALUES. The Policyowner may request illustrations
of Death Benefits, Accumulation Values and Cash Values at any time after the
Policy Date. Illustrations will be based on the existing Accumulation Value and
Cash Value at the time of the request and both the maximum and the then current
costs of insurance rates. Although Chubb Life does not currently charge a fee
for such illustrations, it reserves the right to charge an administrative fee,
not to exceed $25, to cover the cost of preparing the illustrations.
NON-PARTICIPATING POLICY. The Policy does not share in any surplus
distributions of Chubb Life. No dividends are payable with respect to the
Policy.
THE GENERAL ACCOUNT
POLICYOWNERS MAY ALLOCATE NET PREMIUMS AND TRANSFER ACCUMULATION VALUE TO THE
GENERAL ACCOUNT. BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN
THE GENERAL ACCOUNT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND THE GENERAL ACCOUNT HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER
THE 1940 ACT. ACCORDINGLY, NEITHER THE GENERAL ACCOUNT NOR ANY INTERESTS THEREIN
ARE SUBJECT TO THE PROVISIONS OF THESE ACTS, AND CHUBB LIFE HAS BEEN
29
<PAGE>
Chubb Advisor II
----------------
<TABLE>
<CAPTION>
Cash Value Accumulation Guideline Premium
------------------------------------------------------------------
Test Test
-------------------------
<S> <C> <C>
Specified Amount $1,000,000 $1,000,000
Accumulation Value $ 500,000 $ 500,000
Corridor Percentage 306% 150%
Death Benefit Under Option I $1,530,000 $1,000,000
Death Benefit Under Option II $1,530,000 $1,500,000
</TABLE>
After issue of the Policy, the Policyowner may change the Death Benefit
selection from Option I to Option II or vice versa, by sending Chubb Life a
written request for change. THE DEATH BENEFIT QUALIFICATION TEST, HOWEVER, MUST
BE SELECTED AT THE TIME OF INITIAL APPLICATION, AND ONCE SELECTED, MAY NOT BE
SUBSEQUENTLY CHANGED. The effective date of the change will be the first Monthly
Anniversary Date that coincides with or next follows the Date of Receipt of such
request. If the Death Benefit option is changed from Option II to Option I, the
Specified Amount will be increased by the Policy's Accumulation Value on the
effective date of the change. Conversely, if the Death Benefit option is changed
from Option I to Option II, the Specified Amount will be decreased by the
Policy's Accumulation Value on the effective date of the change. Evidence of
insurability satisfactory to Chubb Life will be required on a change from Option
I to Option II. A change in the Death Benefit option may not be made if it would
result in a Specified Amount which is less than a minimum Specified Amount of
$125,000. A change in Death Benefit options will affect the cost of
insurance.
After a Policy has been in force for one year, the Policyowner may adjust the
existing insurance coverage by increasing or decreasing the Specified Amount.
The increase or decrease must be at least $125,000. To make a change, the
Policyowner must send a written request and the Policy to Chubb's home office.
Any change in the Specified Amount will affect a Policyowner's cost of insurance
charge. An increase in the Specified Amount will affect the determination of the
amount available for a Type A loan, as explained below, and will affect the
monthly deduction adjustment if any. Decreases in the Specified Amount may
affect the monthly deduction adjustment but will have no effect on the
determination of the amount available for a Type A loan. Any decrease in the
Specified Amount will become effective on the Monthly Anniversary Date after the
Date of Receipt of the request. Any decrease in Specified Amount will first
apply to coverage provided by the most recent Specified Amount increase, then to
the next most recent increases successively and finally to the coverage under
the original application. By applying decreases in this manner, savings,
generally, may be realized by a Policyowner since additional costs and
limitations associated with increases in Specified Amounts would be eliminated
first. To apply for an increase in the Specified Amount, a supplemental
application must be completed and evidence satisfactory to Chubb Life that each
Insured is insurable must be submitted. Any approved increase in the Specified
Amount will become effective on the date shown in the Supplemental Policy
Specifications Page. Such increase will not become effective, however, if the
Policy's Cash Value is insufficient to cover the deduction for the cost of the
increased insurance for the policy month following the increase. Such an
increase may require a payment or recommended increased future Planned Periodic
Premiums.
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GUARANTEED DEATH BENEFIT. The Policyowner may add a Guaranteed Death Benefit
Rider to the Policy under which the Death Benefit is guaranteed to never be less
than the Specified Amount provided that a cumulative minimum premium requirement
is met. The premium requirement is based on Issue Age, sex, smoking status,
underwriting class, Specified Amount and Death Benefit Option. If the Specified
Amount is increased, an additional premium, based on Attained Age, will be
required for such increase. There is a monthly charge for this Death Benefit
Rider. See "Optional Insurance Benefits".
COMBINED REQUESTS. Policyowners may combine requests for changes in the
Specified Amount and the Death Benefit option and requests for withdrawals. The
requirements and limitations that apply to each change will apply to the
combined transactions, including any required evidence of insurability,
Specified Amount and premium limitations, effectiveness on the Monthly
Anniversary Date following the Date of Receipt of the request, and the
sufficiency of Cash Value to keep the Policy in force for the month following
the transaction.
The effect of a combined transaction on the cost of insurance, the amount of
the Death Benefit proceeds and the premium limitations will be the net result of
such effects for each such transaction considered separately. Policyowners
should consider the net result of a combined transaction in light of insurance
needs, financial circumstances and tax consequences.
MATURITY OF THE POLICY. As long as the Policy remains in force, Chubb Life
will pay the Policy's Cash Value, less outstanding Policy Debt, if any, on the
Maturity Date. Benefits at maturity may be paid in a lump sum or under an
optional payment plan. The Maturity Date is the date shown in the Policy. To
change the Maturity Date, a written request and the Policy must be sent to
Chubb Life. The Date of Receipt for any request must be before the Maturity
Date then in effect. The requested Maturity Date must be (i) on a policy
anniversary, (ii) at least one year from the Date of Receipt of the request,
(iii) after the tenth policy year and (iv) on or before the policy anniversary
nearest to the Insured's 100th birthday for Chubb Advisor I and the younger
Insured's 100th birthday for Chubb Advisor II.
OPTIONAL INSURANCE BENEFITS. Subject to certain requirements, one or more of
the following optional insurance benefits may be added to a Policy by rider.
More detailed information concerning such riders may be obtained from the agent
selling the Policy. Additional riders, developed after the effective date of
this Prospectus, may also be available as optional insurance benefits to the
Policy. The agent selling the Policy should be consulted regarding the
availability of any such additional riders. The cost of any optional insurance
benefits will be deducted as part of the monthly deduction. See "CHARGES AND
DEDUCTIONS."
(a) GUARANTEED DEATH BENEFIT RIDER. This rider guarantees that the Policy
will stay in force with a Death Benefit equal to the Specified Amount, even if
the Cash Value less Policy Debt is not sufficient to pay the monthly deduction,
provided that cumulative premiums paid, less loans and withdrawals, are greater
than or equal to the guaranteed death benefit premium multiplied by the number
of months the Policy has been in force. This cumulative premium requirement
must be met at all times for the rider to stay in force. A monthly charge of
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$.01 per $1,000 of Specified Amount will be deducted from the Policy's
Accumulation Value.
(b) AUTOMATIC INCREASE RIDER. This rider allows for scheduled annual increases
in Specified Amount of from 1% to 7%, subject to certain limitations set forth
in the rider. There is an annual charge per unit of Specified Amount which
varies by Issue Age on Chubb Advisor I and by Joint Equal Age at issue on Chubb
Advisor II.
(c) POLICY EXCHANGE OPTION RIDER. This rider is available on Chubb Advisor II
provided both Insureds are insurable. It allows Chubb Advisor II to be exchanged
for two individual Chubb Advisor I policies, without evidence of insurability,
each with a face amount equal to one half of the Death Benefit under Chubb
Advisor II at the time of exchange, upon the Insureds' divorce or the occurrence
of certain Federal tax law changes as specified in the rider. There is no charge
for this rider.
(d) EXTENSION OF MATURITY DATE RIDER. This rider allows the Policyowner to
extend the original Maturity Date of the Policy under the terms set forth in the
rider.
(e) EXCHANGE OF INSURED RIDER. This benefit provides that the Policy may be
exchanged for a reissued policy on the life of a substitute insured, subject to
the conditions stated in the rider. See "FEDERAL TAX MATTERS."
(f) TERMINAL ILLNESS ACCELERATED BENEFIT RIDER (AVAILABLE ONLY FOR CHUBB
ADVISOR I). This benefit advances up to 50% of a Policy's eligible death
benefit, subject to a $250,000 maximum per insured, if it is medically
determined that the insured is terminally ill and has a life expectancy of six
months or less, as defined in the rider. Upon the payment of the accelerated
benefit payment, the amount of the Death Benefit, the Specified Amount, the Cash
Value and the Accumulation Value are reduced by the same ratio as the requested
portion of the Death Benefit bears to the original Death Benefit. Such reduction
will be allocated among the General Account and the Divisions on a pro rata
basis. While this benefit is offered at no additional premium cost or surrender
charge, an actuarial discount as described in the rider, which reflects the
early payment of amounts held under the Policy, will be deducted from the
requested portion of the Death Benefit. In addition, Chubb Life imposes an
administrative expense charge not to exceed the lesser of the actual cost of
administering the exercise of the rider or $300. Chubb Life will deduct from the
requested portion of the Death Benefit a prorated portion of any outstanding
policy loans and any premiums which are unpaid within the grace period. Cost of
insurance charges are adjusted to reflect the reduction in the Death Benefit.
Future charges under the Policy will depend on whether a Waiver of Premium
Disability Rider is in force. The addition of this Rider, or receipt of benefits
under it, may result in certain tax consequences to a Policyowner. See "FEDERAL
TAX MATTERS."
(g) WAIVER OF SPECIFIED PREMIUM RIDER. This benefit provides for the payment
by Chubb Life of a specified monthly premium into the Policy while the Insured
is totally disabled, as defined in the rider.
(h) WAIVER OF PREMIUM DISABILITY RIDER. This benefit provides for the waiver
of monthly deductions while the Insured is totally disabled, as defined in the
rider.
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SETTLEMENT OPTIONS. In addition to a lump sum payment of benefits under the
Policy, any proceeds to be paid under the Policy may be paid in any of four
methods. A settlement option may be designated by notifying Chubb Life in
writing. A lump sum payment of proceeds under the Policy will be made if a
settlement option is not designated. Any amount left with Chubb Life for payment
under an optional payment plan will be transferred to the account of the
Beneficiary in the General Account on the date Chubb Life receives written
instructions. During the life of the Insured, the Policyowner may select a plan.
If a payment plan has not been chosen at the time the Death Benefit becomes
payable, a Beneficiary can choose a plan. If a Beneficiary is changed, the
payment plan selection will no longer be in effect unless the Policyowner
requests that it continue. An option may be elected only if the amount of the
proceeds is $2,000 or more. Chubb Life reserves the right to change the interval
of payments to 3, 6 or 12 months, if necessary, to increase the guaranteed
payments to at least $20 each.
OPTION A.
INSTALLMENTS OF A SPECIFIED AMOUNT. Payments of an agreed amount to be made
each month until the proceeds and interest are exhausted.
OPTION B.
INSTALLMENTS FOR A SPECIFIED PERIOD. Payments to be made each month for an
agreed number of years.
OPTION C.
LIFE INCOME. Payments to be made each month for the lifetime of the payee. It
is guaranteed that payments will be made for a minimum of 10, 15, or 20 years,
as agreed upon.
OPTION D.
INTEREST. Payment of interest on the proceeds held by Chubb Life calculated
at the compound rate of 3% per year. Interest payments will be made at 12, 6, 3
or 1 month intervals, as agreed upon.
The interest rate for Options A, B, and D will not be less than 3% per year.
The interest rate for Option C will not be less than 2 1/2% per year. Interest
in addition to that stated may be paid or credited from time to time under any
option, but only in the sole discretion of Chubb Life.
Unless otherwise stated in the election of an option, the payee of policy
benefits shall have the right to receive the withdrawal value under that option.
For Options A and D, the withdrawal value shall be any unpaid balance of
proceeds plus accrued interest. For Options B and C, the withdrawal value shall
be the commuted value of the remaining payments. Such value will be calculated
on the same basis as the original payments. To receive this value under Option
C, the payee must submit evidence of insurability acceptable to Chubb Life.
Otherwise, the withdrawal value shall be the commuted value of any remaining
guaranteed payments. If the payee should be alive at the end of the guaranteed
period, the payment will be resumed on that date. The payment will then continue
for the lifetime of the payee.
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If a payee of policy benefits dies before the proceeds are exhausted or the
prescribed payments made, a final payment will be made in one sum to the estate
of the last surviving payee. The amount to be paid will be calculated as
described for the applicable option in the Withdrawal Value provision of the
Policy.
CALCULATION OF ACCUMULATION VALUE
The Policy provides for an Accumulation Value, which will be determined on a
daily basis. Accumulation Value is the sum of the values in the Divisions plus
the value in the General Account. The Policy's Accumulation Value in the
Divisions is calculated by units and unit values under the Policies, as
described below. The Policy's Accumulation Value will reflect a number of
factors, including the investment experience of the Divisions that are invested
in the Portfolios, any additional net premiums paid, any withdrawals, any
policy loans, and any charges assessed in connection with the Policy.
Accumulation Values in Separate Account C are not guaranteed as to dollar
amount.
On the Allocation Date, the Accumulation Value in Separate Account C is the
initial premium payments, reduced by the State Premium Tax Charge, the
Federal DAC Tax Charge and the Sales Charge, plus interest earned prior to the
Allocation Date, and less the monthly deduction for the first policy month. On
the Allocation Date, the initial number of units credited to Separate Account C
for the Policy will be established. At the end of each Valuation Period
thereafter, the Accumulation Value in a Division is (i) plus (ii) plus (iii)
minus (iv) minus (v) where:
(i) is the Accumulation Value in the Division on the preceding Valuation Date
multiplied by the net investment factor, as described below, for the current
Valuation Period,
(ii) is any Net Premium received during the current Valuation Period which is
allocated to the Division,
(iii) is all Accumulation Values transferred to the Division from another
Division or the General Account during the current Valuation Period,
(iv) is the Accumulation Values transferred from the Division to another
Division or the General Account and Accumulation Values transferred to secure a
Policy Debt during the current Valuation Period, and
(v) is all withdrawals from the Division during the current Valuation Period.
In addition, whenever a Valuation Period includes the Monthly Anniversary
Date, the Accumulation Value at the end of such period is reduced by the
portion of the monthly deduction allocated to the Division.
The Policy's total Accumulation Value in Separate Account C equals the sum of
the Policy's Accumulation Value in each Division thereof.
UNIT VALUES. Units are credited to a Policyowner upon allocation of Net
Premiums to a Division. Each Net Premium payment allocated to a Division will
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increase the number of units in that Division. Both full and fractional units
are credited. The number of units and fractional units is determined by
dividing the Net Premium payment by the unit value of the Division to which the
payment has been allocated. The unit value of each Division is determined on
each Valuation Date. The number of units credited will not change because of
subsequent changes in unit value. The dollar value of each Division's units
will vary depending upon the investment performance of the corresponding
Portfolio.
Certain transactions affect the number of units in a Division under a Policy.
Loans, surrenders and withdrawals, withdrawal and transfer fees and charges,
the Surrender Charge, and monthly deductions involve the redemption of units
and will decrease the number of units. Transfers of Accumulation Value among
Divisions will reduce or increase the number of units in a Division, as
appropriate.
The unit value of each Division's units initially under the Policies was
$10.00. Thereafter, the unit value of a Division on any Valuation Date is
calculated by multiplying (1) by (2) where:
(1) is the Division's unit value on the previous Valuation Date; and
(2) is the net investment factor for the Valuation Period then ended.
The unit value of each Division's units on any day other than a Valuation
Date is the unit value as of the next Valuation Date and is used for the
purpose of processing transactions.
NET INVESTMENT FACTOR. The net investment factor measures the investment
experience of each Division and is used to determine changes in unit value from
one Valuation Period to the next Valuation Period. The net investment factor
for a Valuation Period is (i) divided by (ii) minus (iii) where:
(i) is (a) the value of the assets of the Division at the end of the
preceding Valuation Period, plus (b) the investment income and capital gains,
realized or unrealized, credited to the assets of the Division during the
Valuation Period for which the net investment factor is being determined, minus
(c) capital losses, realized or unrealized, charged against those assets during
the Valuation Period, minus (d) any amount charged against the Division for
taxes or any amount set aside during the Valuation Period by Chubb Life to
provide for taxes attributable to the operation or maintenance of that
Division, and
(ii) is the value of the assets of the Division at the end of the preceding
Valuation Period, and
(iii) is a charge no greater than .0013665% on a daily basis. This
corresponds to .50% on an annual basis for the Mortality Risk Charge.
CASH VALUE BENEFITS
So long as it remains in force, the Policy provides for certain benefits
prior to the Maturity Date. Subject to certain limitations, the Policyowner may
at any time obtain Cash Value by surrendering the Policy or making withdrawals
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from the Policy. The Cash Value equals the Accumulation Value less any
Surrender Charge. In addition, the Policyowner has certain policy loan
privileges under the Policy.
SURRENDER PRIVILEGES. As long as the Policy is in force, a Policyowner may
surrender the Policy at any time by sending a written request along with the
Policy to Chubb Life, or make a withdrawal from the Policy at any time by
sending a written request to Chubb Life. See "FEDERAL TAX MATTERS-Policy
Proceeds."
The surrender value of the Policy equals the Cash Value less any outstanding
Policy Debt. The amount payable upon surrender of the Policy is the surrender
value at the end of the Valuation Period during which the request is received.
The surrender value may be paid in a lump sum or under one of the optional
payment plans specified in the Policy. Proceeds will generally be paid within
seven days of the Date of Receipt of a request for surrender or withdrawal. See
"POLICY BENEFITS AND RIGHTS-Settlement Options."
A Policyowner can obtain a portion of the Policy's Cash Value by withdrawal
of Cash Value from the Policy. A withdrawal from a Policy is subject to the
following conditions:
A. The amount withdrawn may not exceed the Cash Value less any outstanding
debt.
B. The minimum amount that may be withdrawn is $1,000.
C. A charge equal to $50 will be deducted from the amount of each withdrawal.
Withdrawals generally will affect the Policy's Accumulation Value, Cash Value
and the life insurance proceeds payable under the Policy. The Policy's Cash
Value will be reduced by the amount of the withdrawal. The Policy's Accumulation
Value will be reduced by the amount of the withdrawal plus any applicable pro-
rata Surrender Charge. Life insurance proceeds payable under the Policy will
generally be reduced by the amount of the withdrawal plus any applicable pro-
rata Surrender Charge, unless the withdrawal is combined with a request to
maintain or increase the Specified Amount. See "POLICY BENEFITS AND RIGHTS-
Combined Requests".
Under Option I, which provides for life insurance proceeds equal to the
greater of the Specified Amount or the Accumulation Value of the Policy at the
date of death multiplied by the corridor percentage, the Specified Amount will
be reduced by the plus any applicable pro-rata Surrender Charge. The Specified
Amount remaining after a withdrawal $125,000. As a result, Chubb Life will not
effectuate any withdrawal that would reduce the Specified Amount below these
minimums. If increases in Specified Amount previously have occurred, a
withdrawal will first reduce the Specified Amount of the most recent increase,
then the most recent increases successively, then the coverage under the
original application. If the life insurance proceeds payable under either Death
Benefit option, both before and after the withdrawal, is the Accumulation Value
multiplied by the corridor percentage, a withdrawal generally will result in a
reduction in life insurance proceeds equal to the amount paid upon withdrawal,
multiplied by the applicable corridor percentage then in effect.
Under Option II, which provides for life insurance proceeds equal to the
Specified Amount plus Accumulation Value, a reduction in Accumulation Value as
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a result of a withdrawal will typically result in a dollar per dollar reduction
in the life insurance proceeds payable under the Policy.
A Policyowner may allocate a withdrawal among the Divisions and the General
Account. If no such allocation is made, a withdrawal will be allocated among
the Divisions and the General Account in the same proportion that the
Accumulation Value in each Division and the Accumulation Value in the General
Account, less any Policy Debt bears to the total Accumulation Value of the
Policy, less any Policy Debt, on the date of withdrawal. See "FEDERAL TAX
MATTERS-Policy Proceeds".
POLICY LOANS. So long as the Policy remains in force, a Policyowner may
borrow money from Chubb Life at any time after the first policy anniversary
using the Policy as the only security for the loan. Loans have priority over
the claims of any assignee or any other person. Generally, the maximum loan
amount is 90% of the Cash Value at the end of the Valuation Period during which
the loan request is received. The maximum amount which may be borrowed at any
given time is the maximum loan amount reduced by any outstanding Policy Debt.
Proceeds of policy loans ordinarily will be disbursed within seven days from
the Date of Receipt of a request for a loan by Chubb Life, although payments
may be postponed under certain circumstances. See "OTHER MATTERS-Postponement
of Payments". Chubb Life may, in its discretion, permit loans to be made by
telephone if the proper authorization form is on file with Chubb Life. So long
as the Policy remains in force, the loan may be repaid in whole or in part
without penalty at any time while an Insured is living.
When a policy loan is made, a portion of the Policy's Accumulation Value
sufficient to secure the loan will be transferred to the General Account. A
policy loan removes the proceeds from the investment experience of Separate
Account C which will have a permanent effect on the Accumulation Value and
Death Benefit even if the loan is repaid. Any loan interest that is due and
unpaid will also be so transferred. Accumulation Value equal to Policy Debt in
the General Account will accrue interest daily at an annual rate of 6%. The
Policyowner may allocate a policy loan among the Divisions and the General
Account. If no such allocation is made the loan will be allocated among the
Divisions and the General Account in the same proportion that the Accumulation
Value in each Division and the Accumulation Value in the General Account less
Policy Debt bears to the total Accumulation Value of the Policy, less Policy
Debt, on the date of the loan.
Chubb Life will charge interest on any outstanding policy loan with such
interest compounded annually. There are two types of loans available. A Type A
loan is charged the same interest rate as the interest credited to the amount of
Accumulation Value held in the General Account to secure loans, which is an
effective rate of 6% per annum. The amount available at any time for a Type A
loan equals the maximum loan amount less the Guideline Single Premium at issue,
as set forth in the Code, less any outstanding Type A loans. Any other loans are
Type B loans. A Type B loan is charged an interest rate of 7.0%. It is possible
for one loan request to result in both a Type A and a Type B loan. A request for
a loan will be granted first as a Type A loan, to the extent available, and then
as a Type B loan. Once a policy loan is granted, it remains a Type A or Type B
until it is repaid. Increases in the Specified Amount will affect the
determination of the amount available for a Type A loan; however, decreases in
the Specified Amount
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will not have any such effect. Interest is due and payable at the end of each
policy year, and any interest not paid when due becomes loan principal .
Where applicable, loans are subject to conditions and requirements of the
Employee Retirement Income Security Act of 1974 ("ERISA"), as well as the terms
of any retirement plan in connection with which the Policy has been purchased.
The ERISA rules relating to loans are complex and vary depending on the
individual circumstances of each Policy. Employers and Policyowners should
consult with qualified advisers before exercising the loan privileges.
Policy Debt equals the total of all outstanding policy loans and accrued
interest on policy loans. If Policy Debt exceeds Cash Value, Chubb Life will
notify the Policyowner and any assignee of record. A payment at least equal to
the amount of excess Policy Debt above the Cash Value must be made to Chubb Life
within 61 days from the date Policy Debt exceeds Cash Value, otherwise, the
Policy will lapse and terminate without value. In such event, the Policyowner
may be taxed on the total appreciation under the Policy. The Policy may,
however, later be reinstated, subject to satisfactory proof of insurability and
the payment of a reinstatement premium. See "THE POLICIES-Reinstatement".
So long as the Policy remains in force, Policy Debt may be repaid in whole or
in part at any time during an Insured's life. If there is any existing Policy
Debt, premium payments in the amount of the Planned Periodic Premium, received
at the Premium Frequency, will be applied as premium. Premium payments in excess
of the Planned Periodic Premium or premium payments received other than at the
Premium Frequency, will first be applied as policy loan repayments, then as
premium when the Policy Debt is repaid. For Policyowners with both Type A and
Type B loans, repayments of the loan will be applied first to Type B loans and
then to Type A loans. Upon repayment, the Policy's Accumulation Value securing
the repaid portion of the debt in the General Account will be transferred to the
Divisions and the General Account using the same percentages used to allocate
Net Premiums. Any outstanding Policy Debt is subtracted from life insurance
proceeds payable at the Insured's or last surviving Insured's death, from
Accumulation Value upon surrender, and from Cash Value payable at maturity.
OTHER MATTERS
VOTING PRIVILEGES. To the extent required by law, Chubb Life will vote the
Portfolio shares held in the various Divisions at regular and special
shareholder meetings of the Funds in accordance with instructions received from
persons having voting interests in Separate Account C. If, however, the 1940 Act
or any regulation thereunder should be amended or if the present interpretation
thereof should change and, as a result, Chubb Life determines that it is
permissible to vote the Portfolio shares in its own right, it may elect to do
so. The number of votes on which each Policyowner has the right to instruct will
be determined by dividing the Policy's Accumulation Value in a Division by the
net asset value per share of the corresponding Portfolio in which the Division
invests, or as otherwise required by law. Fractional shares will be counted. The
number of votes on which the Policyowner has the right to instruct will be
determined as of the date coincident with the date established by the Fund for
determining shareholders eligible to vote at the meeting of the Fund. Voting
instructions will be solicited by written communications prior to such meeting
in accordance with procedures established by the Fund. Chubb Life
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will vote Fund shares as to which no instructions are received in proportion to
the voting instructions which are received with respect to all Policies
participating in the Fund in accordance with applicable law. Each person having
a voting interest will receive proxy material, reports and other materials
relating to the Fund. The shares held by Chubb Life, including shares for which
no voting instructions have been received, shares held in Separate Account C
representing charges imposed by Chubb Life against Separate Account C under the
Policies and shares held by Chubb Life that are not otherwise attributable to
Policies, will also be voted by Chubb Life in proportion to instructions
received from the owners of variable life insurance policies funded through
Separate Account C. Chubb Life reserves the right to vote any or all such shares
at its discretion to the extent consistent with then current interpretations of
the 1940 Act and rules thereunder.
Chubb Life may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that shares be voted
so as to cause a change in subclassification or investment objective of the Fund
or disapprove an investment advisory contract of the Fund. In addition, Chubb
Life may disregard voting instructions in favor of changes initiated by a
Policyowner in the investment policy or the investment adviser of the Fund if
Chubb Life reasonably disapproves of such changes. A change would be disapproved
only if the proposed change is contrary to state law or prohibited by state
regulatory authorities or Chubb Life determined that the change would be
inconsistent with the investment objectives of Separate Account C or would
result in the purchase of securities for Separate Account C which vary from the
general quality and nature of investments and investment techniques utilized by
other separate accounts created by Chubb Life or any affiliate of Chubb Life
which have similar investment objectives. In the event that Chubb Life does
disregard voting instructions, a summary of that action and the reason for such
actions will be included in the next semi-annual report to the Policyowner.
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS. Chubb Life reserves the
right, subject to compliance with applicable law, to make additions to,
deletions from, or substitutions for the shares held by any Division or which
any Division may purchase. If shares of a Portfolio should no longer be
available for investment or if, in the judgment of Chubb Life's management,
further investment in shares of a Portfolio should become inappropriate in view
of the purposes of the Policy, Chubb Life may substitute shares of any other
investment company for shares already purchased, or to be purchased in the
future under the Policies. No substitution of securities will take place without
notice to and consent of Policyowners and without prior approval of the SEC, all
to the extent required by the 1940 Act. Any surrender by a Policyowner due to a
change in a Portfolio's investment policy will incur any applicable Surrender
Charges.
Portfolio shares are subject to certain investment restrictions which may not
be changed without the approval of the majority of the holders of such
Portfolio. See the accompanying Prospectuses for the Funds.
ANNUAL REPORT. At least once each policy year, Chubb Life will send a report
to the Policyowner which shows the current Accumulation Value, Cash Value,
premiums paid and all charges incurred as well as the balance of outstanding
policy loans for the entire 12 months of the previous calendar year. The first
annual report sent to Policyowners will only reflect those months of the
previous calendar year
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during which the Policy was in effect. Chubb Life will also send to the
Policyowner the reports required by the 1940 Act.
CONFIRMATION. Confirmation notices (or other appropriate notification) will be
mailed promptly at the time of the following transactions:
(1) policy issue;
(2) receipt of premium payments;
(3) initial allocation among Divisions on the Allocation Date;
(4) transfers among Divisions;
(5) change of premium allocation;
(6) change between Death Benefit Option I and Option II;
(7) increases or decreases in Specified Amount;
(8) withdrawals, surrenders or loans;
(9) receipt of loan repayments;
(10) reinstatements; and
(11) redemptions due to insufficient funds.
LIMITATION ON RIGHT TO CONTEST. Chubb Life will not contest or revoke the
insurance coverage provided under the Policy, except for any subsequent increase
in Specified Amount, after the Policy has been in force during the lifetime of
each Insured for a period of two years from the date it is issued or reinstated.
Any increase in the Specified Amount will not be contested after such increase
has been in force during the lifetime of each Insured for two years following
the effective date of the increase. Any increase will be contestable within the
two year period only with regard to statements concerning this increase.
MISSTATEMENTS. If the age or sex of an Insured has been misstated in an
application, including a reinstatement application, Chubb Life will adjust the
benefits payable to reflect the correct age or sex.
SUICIDE. The Policy does not cover the risk of suicide within two years from
the date the Policy is issued or two years from the date of any increase in
Specified Amount with respect to such increase, whether the Insured is sane or
insane, unless otherwise specified by state law. In the event of suicide of any
Insured within two years of the date the Policy is issued, the only liability of
Chubb Life will be a refund of premiums paid, without interest, less any Policy
Debt and less any withdrawal. In the event of suicide by any Insured within two
years of an increase in Specified Amount, the only liability of Chubb Life with
respect to the increase will be a refund of the cost of insurance for such
increase.
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ADVISED THAT THE STAFF OF THE SEC HAS NOT REVIEWED THE DISCLOSURES IN THIS
PROSPECTUS RELATING TO THE GENERAL ACCOUNT. DISCLOSURES REGARDING THE GENERAL
ACCOUNT MAY, HOWEVER, BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF
TEH FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY AND COMPLETENESS OF
STATEMENTS MADE IN PROSPECTUSES.
GENERAL DESCRIPTION. The General Account consists of all assets owned by Chubb
Life other than those in Separate Account C and other separate accounts which
have been or may be established by Chubb Life. Subject to applicable law, Chubb
Life has sole discretion over the investment of the assets of the General
Account.
A Policyowner may elect to allocate Net Premiums to the General Account or to
transfer Accumulation Value to or from the Divisions and the General Account.
The allocation or transfer of funds to the General Account does not entitle a
Policyowner to share in the investment experience of the General Account.
Instead, Chubb Life guarantees that Accumulation Value in the General Account
will accrue interest daily at an effective annual rate of at least 4%,
independent of the actual investment experience of the General Account. Chubb
Life is not obligated to credit interest at any higher rate, although Chubb Life
may, in its sole discretion, do so.
If the Policy issued as applied for is not accepted or the "free look" is
exercised, no interest will be credited and Chubb Life will retain any interest
earned on the initial Net Premium.
GENERAL ACCOUNT ACCUMULATION VALUE. The Accumulation Value in the General
Account on the Allocation Date is equal to the portion of the Net Premium
payments, plus interest earned, which have been paid and allocated to the
General Account, less the portion of the first monthly deduction allocated to
the General Account.
Chubb Life guarantees that interest credited to each Policyowner's
Accumulation Value in the General Account will not be less than an effective
annual rate of at least 4%. Chubb Life may, IN ITS SOLE DISCRETION, credit a
higher rate of interest, although it is not obligated to credit interest in
excess of 4% per year, and might not do so. ANY INTEREST CREDITED ON THE
POLICY'S ACCUMULATION VALUE IN THE GENERAL ACCOUNT IN EXCESS OF THE GUARANTEED
RATE OF 4% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF CHUBB LIFE. THE
POLICYOWNER ASSUMES THE RISK THAT INTEREST CREDITED MAY NOT EXCEED THE
GUARANTEED MINIMUM RATE OF 4% PER YEAR. Accumulation Value in the General
Account that equals indebtedness will be credited interest daily at an effective
annual rate of 6%. The Accumulation Value in the General Account will be
calculated on each Monthly Anniversary Date of the Policy, or on any other date
with consistent adjustments.
Chubb Life guarantees that, at any time prior to the Maturity Date, the
Accumulation Value in the General Account will not be less than the amount of
the Net Premiums allocated or Accumulation Value transferred to the General
Account, plus interest at the rate of 4% per year, plus any excess interest
which Chubb Life credits and any amounts transferred into the General Account,
less the sum of all charges allocable to the General Account and any amounts
deducted from the General Account in connection with withdrawals or transfers to
Separate Account C.
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<PAGE>
DETERMINATION OF CHARGES. The portion of the monthly deduction attributable to
the General Account will be determined as of the actual Monthly Anniversary
Date, even if the Monthly Anniversary Date does not fall on a Valuation
Date.
DISTRIBUTION OF THE POLICY
The Policy will be sold by individuals who, in addition to being licensed as
life insurance agents for Chubb Life, are also registered representatives of
Chubb Securities Corporation, the principal underwriter of the Policies, or of
broker-dealers who have entered into written sales agreements with the principal
underwriter. Chubb Securities Corporation is a New Hampshire corporation
organized in 1969. Chubb Securities Corporation is registered with the SEC under
the Securities and Exchange Act of 1934 as a broker-dealer and is a member of
the National Association of Securities Dealers, Inc. Each broker-dealer with
whom Chubb Securities Corporation has executed a selling agreement will receive
as a commission the full charge of 3% imposed on premiums. Compensation to
selling broker-dealers may also include a trail commission of up to a maximum of
.25% of Accumulation Value. Any such broker-dealers will be registered under the
Securities Exchange Act of 1934 and their representatives selling the Policies
will be authorized under applicable insurance laws and regulations to sell
insurance products of this type. It is not expected that the compensation paid
by Chubb Life in connection with such sales will exceed that described above for
sales by Chubb Securities Corporation's registered representatives.
Chubb Life and Separate Account C have entered into a Distribution Agreement
with Chubb Securities Corporation which continues until terminated by any party
on 60 days notice. Chubb Securities Corporation is not obligated to sell any
specified amount of Policies and may not assign its responsibilities under the
Distribution Agreement. Chubb Life reimburses Chubb Securities Corporation for
its expenses under the Distribution Agreement.
Chubb Securities Corporation is engaged in the sale and distribution of
various other securities, including other flexible premium variable life
policies. It acts as principal underwriter for other flexible premium variable
life policies and variable annuity contracts issued by Chubb Life (and its
affiliated insurance companies) and for the Chubb America Fund, Inc., and the
Chubb Investment Funds, Inc. mutual funds. It sells a number of mutual fund
shares as well as shares of other securities and limited partnership interests
in both public and private limited partnerships. Mutual fund shares available
for sale by Chubb Securities Corporation are sold pursuant to non-exclusive
selling agreements with the distributors of the mutual funds.
GROUP OR SPONSORED ARRANGEMENTS. Policies may be purchased under group or
sponsored arrangements, as well as on an individual basis. A "group arrangement"
includes a program under which a trustee, employer or similar entity purchases
individual Policies covering a group of individuals on a group basis. Examples
of such arrangements are employer-sponsored benefit plans and deferred
compensation plans. A "sponsored arrangement" includes a program under which an
employer permits group solicitation of its employees or an association permits
group solicitation of its members for the purchase of Policies on an individual
basis.
Chubb Life may reduce the following types of charges for Policies issued in
connection with group or sponsored arrangements: the Sales Charge, the cost of
insurance charge, surrender or withdrawal charges, administrative charges for
withdrawal or transfer, the Administration Charge, the guaranteed death benefit
charge and charges for optional rider benefits.
Chubb Life may also issue Policies in connection with group or sponsored
arrangements on a "non-medical" or guaranteed issue basis. Due to the
underwriting criteria established for Policies issued on a non-medical,
guaranteed issue basis, actual monthly cost of insurance charges may be higher
than the current cost of insurance charges under otherwise identical Policies
that are medically underwritten. In addition, Chubb Life may also specify
different minimum Specified Amounts at issue for Policies issued in connection
with group or sponsored arrangements.
Certain charges or underwriting requirements set forth in this Prospectus may
also be reduced or eliminated for Policies issued in connection with an exchange
of another Chubb Life policy or contract or policies or contracts of any
affiliates of Chubb Life.
The amounts of any reduction, the charges to be reduced, the elimination or
modification of underwriting requirements, and the criteria for applying a
reduction or modification will generally reflect the reduced sales and
administrative effort, costs and differing mortality experience appropriate to
the circumstances giving rise to the reduction or modification. The charges will
be reduced in accordance with Chubb Life's company practice in effect when the
Policy is issued. The elimination or modification of underwriting requirements
will be done in accordance with Chubb Life's administrative procedures with
respect to underwriting when the Policy is issued. Reductions and modifications
will not be made where prohibited by applicable law and will not be unfairly
discriminatory against any person including the purchasers to whom the reduction
or modification applies and all other Owners of the Policy.
42
<PAGE>
MANAGEMENT OF CHUBB LIFE
Executive Officers and Directors of Chubb Life
Directors
Principal Occupation and
Name Business Address
- --------------------------------------------------------------------------------
*Percy Chubb, III........... Vice Chairman
The Chubb Corporation
(also serves as Vice Chairman of
Chubb Life Insurance Company of America)
15 Mountain View Road
P.O. Box 1615
Warren, New Jersey 07061-1615
Joel J. Cohen.............. Managing Director
Donaldson, Lufkin & Jenrette Securities
Corporation
140 Broadway, 49th Floor
New York, NY 10005
Henry U. Harder............ Retired, Former Chairman
The Chubb Corporation
15 Mountain View Road
P.O. Box 1615
Warren, New Jersey 07061-1615
David H. Hoag.............. Chairman, President & CEO
The LTV Corporation
25 West Prospect Avenue
Cleveland, OH 44115
Robert V. Lindsay.......... Former President
J.P. Morgan & Co., Inc.
Altamont Road
Millbrook, NY 12545
Thomas C. MacAvoy.......... Professor
Darden Graduate School of Business
Administration
University of Virginia
Box 6550
Charlottesville, VA 22906-6550
Gertrude G. Michelson..... Senior Vice President
R.H. Macy & Co., Inc.
Herald Square-13th Floor
New York, NY 10001
*Dean R. O'Hare............. Chairman and President
The Chubb Corporation
(also serves as Chairman of Chubb Life
Insurance Company of America)
15 Mountain View Road
P.O. Box 1615
Warren, NJ 07061-1615
Warren B. Rudman........... Partner
Paul, Weiss, Rifkind, Wharton & Garrison
1615 L Street, N.W.,
Suite 1300
Washington, D.C. 20036
Sir David G. Scholey, CBE.. Chairman
S.G. Warburg Group plc
One Finsbury Avenue
London EC2M 2PA England
Raymond G.H. Seitz......... Former Ambassador of the United States of
America
10 Trevor Square
43
<PAGE>
London SW7 IDT, England
Lawrence M. Small.......... President and Chief Operating Officer
Federal National Mortgage Association
3900 Wisconsin Avenue, N.W.
Washington, DC 20016
Richard D. Wood............ Former Chairman
Eli Lilly and Company
Lilly Corporate Center
Indianapolis, IN 46285
- ------
* Executive Officer of Chubb Life
Executive Officers (Other Than Directors)
Name
- -----------------------
Theresa M. Stone....... President and Chief Executive Officer
David S. Fowler........ Vice Chairman
Randell G. Craig....... Executive Vice President and Chief Operating Officer
Richard V. Werner...... Executive Vice President and Chief Financial Officer
Ronald R. Angarella.... Senior Vice President
Frederick H. Condon.... Senior Vice President, General Counsel and Secretary
Charles C. Cornelio.... Senior Vice President and Chief Administrative Officer
Vincent G. Mace, Jr. .. Senior Vice President and Group Actuary
Michael O'Reilly....... Senior Vice President
Warren L. Reynolds..... Senior Vice President
Arthur V. Anderson........... Vice President
Douglas H. Blampied.......... Vice President
Thomas M. Bodrogi............ Vice President
Mark Connolly................ Vice President
Edwin E. Creter.............. Vice President
Ronald H. Emery.............. Vice President
J. Michael Gannon............ Vice President and Counsel
Ned I. Gerstman.............. Vice President
Glenn Hilsinger.............. Vice President
Donald M. Kane............... Vice President
Patrick A. Lang.............. Vice President
Deborah A. Leitch............ Vice President
Sandra M. MacIntyre.......... Vice President
Edward C. MacKenzie.......... Vice President
Justin J. Manjorin........... Vice President
Donna L. Metcalf............. Vice President
Christopher J. Moakley....... Vice President
Thomas E. Murphy, Jr. M.D. .. Vice President and Associate Medical Director
Herbert B. Olson............. Vice President and Group Actuary
Richard D. Reed.............. Vice President
Robert R. Rodgers............ Vice President
Russell C. Simpson........... Vice President and Treasurer
James S. Smith............... Vice President
William A. Spencer........... Vice President
John A. Thomas............... Vice President
Ernest J. Tsouros............ Vice President
David G. Underwood, MD....... Vice President and Medical Director
John W. Wells................ Vice President
44
<PAGE>
The officers and employees of Chubb Life who have access to the assets of
Separate Account C are covered by a fidelity bond issued by Aetna Casualty and
Surety Company in the amount of $35,000,000.
STATE REGULATION OF CHUBB LIFE
Chubb Life Insurance Company of America is governed under the laws of the
state of New Hampshire and is subject to regulation by the Insurance
Commissioner of New Hampshire. An annual statement is filed with the New
Hampshire Insurance Commissioner on or before March 1 of each year covering the
operations and reporting on the financial condition of Chubb Life as of December
31 of the preceding year. Periodically, the Commissioner examines the assets and
liabilities of Chubb Life and Separate Account C and verifies their adequacy and
a full examination of Chubb Life's operations is conducted by the Commissioner
at least every five years.
In addition, Chubb Life is subject to the insurance laws and regulations of
other states within which it is licensed to operate. Generally, the insurance
department of any other state applies the laws of the state of domicile in
determining permissible investments.
FEDERAL TAX MATTERS
TAX CONSIDERATIONS. The following description is a brief summary of some of
the tax rules, primarily related to Federal income taxes under the Code, which,
in the opinion of Chubb Life, are currently in effect and is not intended as tax
advice. Chubb Life believes that, as discussed below, the Policy will in general
receive favorable tax treatment under the Code. Because there are issues as to
which the law is still developing or may change, however, and because this
information is not intended as tax advice, Chubb Life recommends that the
Policyowner or prospective Policyowner rely only on the advice of a qualified
tax adviser.
POLICY PROCEEDS. The Policy contains provisions not found in traditional life
insurance policies providing only for fixed benefits. However, under the Code,
the Policy should qualify as a life insurance contract for Federal income tax
purposes, with the result that all Death Benefits paid under the Policy will
generally be fully excludable from the gross income of the Policy's Beneficiary
for Federal income tax purposes and, as long as the Policy remains in force,
income earned on the Policy will not be subject to Federal income tax unless and
until there is a distribution from the Policy. Policyowners should consult with
their own tax advisers in this regard.
The Federal income tax treatment of a distribution from the Policy will depend
on whether a Policy is a life insurance policy and also if it is determined to
be a "modified endowment contract," as defined by the Code. Chubb Life will
notify a Policyowner if the amount of premiums paid in would cause a Policy to
be a modified endowment contract and will allow a refund of the excess premium.
Thus, the Policyowner may choose to have the Policy treated as a modified
endowment contract.
A modified endowment contract is a life insurance policy which fails to meet a
"seven-pay" test. In general, a policy will fail the seven-pay test if the
cumulative amount of premiums paid under the policy at any time during the first
seven policy years exceeds a calculated premium level. The calculated seven-pay
premium level is based on a hypothetical policy issued on the same insured
persons and for the same initial death benefit which, under specified conditions
(which include the absence of expense and administrative charges), would be
fully paid for after seven years. Your policy will be treated as a modified
endowment unless the cumulative premiums paid under your policy, at all times
during the first seven policy years, are less than or equal to the cumulative
seven-pay premiums which would have been paid under the hypothetical policy on
or before such times.
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<PAGE>
seven-pay premium level is based on a hypothetical policy issued on the same
insured persons and eath benefit which, under specified conditions (which
include the absence of expense and admini be fully paid for after seven years.
Your policy will be treated as a modified endowment unless paid under your
policy, at all times during the first seven policy years, are less than or equal
pay premiums which would have been paid under the hypothetical policy on or
before such times.
Whenever there is a "material change" under a policy, it will generally be
treated as a new contract for purposes of determining whether the policy is a
modified endowment, and subject to a new seven-pay premium period and a new
seven-pay limit. The new seven-pay limit would be determined taking into
account, under a downward adjustment formula, the Policy Account Value of the
policy at the time of such change. A materially changed policy would be
considered a modified endowment if it failed to satisfy the new seven-pay limit.
A material change could occur as a result of a change in death benefit option,
the selection of additional benefits, the restoration of a terminated policy and
certain other changes.
If the benefits under your policy are reduced, for example, by requesting a
decrease in Face Amount, or in some cases by making partial withdrawals,
terminating additional benefits under a rider, changing the death benefit
option, or as a result of policy termination, the calculated seven-pay premium
level will be redetermined based on the reduced level of benefits and applied
retoractively for purposes of the seven-pay test. If the premiums previously
paid are greater than the recalculated seven-pay premium level limit, the policy
will become a modified endowment. Generally, a life insurance policy which is
received in exchange for a modified endowment or a modified endowment which
terminates and is restored, will also be considered a modified endowment.
If a Policy is deemed to be a modified endowment contract, any
distribution from the Policy will be taxed in a manner comparable to
distributions from annuities (i.e., on an "income-first" basis);
distributions for this purpose include a loan or partial withdrawal.
Any such distributions will be considered taxable income to the
extent Accumulation Value under the Policy exceeds investment in the
Policy.
A 10% penalty tax will apply to the taxable portion of such a
distribution. No penalty will apply to distributions (i) to
taxpayers 59 1/2 years of age or older, (ii) in the case of a
disability which can be expected to result in death or to be of
indefinite duration or (iii) received as part of a series of
substantially equal periodic annuity payments for the life (or life
expectancy) of the taxpayer or the joint lives (or joint life
expectancies) of the taxpayer and his beneficiary.
To the extent a Policy becomes a modified endowment contract, any
distribution, including any loan, which occurs in the policy year it
becomes a modified endowment contract and in any year thereafter,
will be taxable income to the policyowner. Also, any distributions
within two years before a Policy becomes a modified endowment
contract will also be income taxable to the policyowner. The
Secretary of the Treasury has been authorized to prescribe rules
which would similarly treat other distributions made in anticipation
of a policy becoming a modified endowment contract. For purposes of
determining the amount of any distribution includable in income, all
modified endowment contract policies that fail the above-described
tests which are issued by the same insurer, or its affiliates, to
the same policyowner during any calendar year are treated as one
contract. The Secretary of the Treasury is also authorized to issue
regulations in this connection.
In addition to the distribution rules for modified endowment
contracts, the Code and proposed regulations thereunder require that
reasonable mortality and other charges be used in satisfying the
definition of life insurance. The death benefit under a policy which
meets this definition will continue to be excluded
46
<PAGE>
from the beneficiary's gross income. Chubb Life believes that the Policies meet
this definition. However, there is uncertainty as to the meaning of "reasonable
mortality charges" and resultant uncertainties as to Chubb Advisor II's
qualification if a different definition is adopted by the Treasury Department.
As long as a policy does not violate the tests described above, it will not fail
to meet the tests of the Code and the general tax provisions described herein
still apply.
The foregoing summary does not purport to be complete or to cover all
situations, and, as always, there is some degree of uncertainty with respect to
the application of the current tax laws. In particular, prior to the issuance of
final regulations or other clarifications under certain sections of the Code,
there may be some uncertainties about the tax treatment of the Policy with
respect to the mortality charges, substandard risks and any extension of the
Maturity Date. In addition to the provisions discussed above, the United States
Congress may consider other legislation which, if enacted, could adversely
affect the tax treatment of life insurance policies. Also, the Treasury
Department may amend current regulations or adopt new regulations with respect
to this and other Code provisions. Therefore, Policyowners are advised to
consult a tax adviser or attorney for more complete tax information,
specifically regarding the applicability of the Code provisions to an individual
Policyowner's situation.
Under normal circumstances, the Policy is not a modified endowment contract
and loans received under the Policy will be construed as indebtedness of the
Policyowner in the same manner as loans under a fixed benefit life insurance
policy and no part of any loan under the Policy is expected to constitute income
to the Policyowner. Policyholders are advised to consult a tax adviser or
attorney regarding the deduction of interest paid on loans.
Even if the Policy is not a modified endowment contract, a partial withdrawal
together with a reduction in death benefits during the first 15 policy years may
create taxable income for the Policyowner. The amount of that taxable income is
determined under a complex formula and it may be equal to part or all of, but
not greater than, the income on the Policy. A partial withdrawal made after the
first 15 policy years will be taxed on a recovery of premium-first basis, and
will only be subject to Federal income tax to the extent such proceeds exceed
the total amount of premiums the Policyowner has paid that have not been
previously withdrawn.
If a Policyowner makes a partial withdrawal, surrender, loan or exchange of
the Policy, Chubb Life may be required to withhold Federal income tax from the
portion of the money received by the Policyowner that is includable in the
Policyowner's Federal gross income. A Policyowner who is not a corporation may
elect not to have such tax withheld; however, such election must be made before
Chubb Life makes the payment. In addition, if a Policyowner fails to provide
Chubb Life with a correct taxpayer identification number (usually a social
security number) or if the Treasury notifies Chubb Life that the taxpayer
identification number which has been provided is not correct, the election not
to have such taxes withheld will not be effective. In any case, a Policyowner is
liable for payment of the Federal income tax on the taxable portion of money
received, whether or not an election to have Federal income tax withheld is
made. If a Policyowner elects not to have Federal income tax withheld, or if the
amount withheld is insufficient, then the Policyowner may be responsible
47
<PAGE>
for payment of estimated tax. A Policyowner may also incur penalties under the
estimated tax rules if the withholding and estimated tax payments are
insufficient. Chubb Life suggests that Policyowners consult with a tax adviser
or attorney as to the tax implications of these matters.
In the event that a Policy is owned by the trustee under a pension or profit
sharing plan, or similar deferred compensation arrangement, the tax consequences
of ownership or receipt of proceeds under the Policy could differ from those
stated herein. However, if ownership of such a Policy is transferred from the
plan to a plan participant (upon termination of employment, for example), the
Policy will be subject to all of the Federal tax rules described above. A Policy
owned by a trustee under such a plan may be subject to restrictions under ERISA
and a tax adviser should be consulted regarding any applicable ERISA
requirements.
The Policy may also be used in various arrangements, including nonqualified
deferred compensation or salary continuation plans, split dollar insurance
plans, executive bonus plans and others, where the tax consequences may vary
depending on the particular facts and circumstances of each individual
arrangement. A tax adviser should be consulted regarding the tax attributes of
any particular arrangement where the value of it depends in part on its tax
consequences.
Federal estate and local estate, inheritance and other tax consequences of
ownership or receipt of policy proceeds depend upon the circumstances of each
Policyowner and Beneficiary.
Current Treasury regulations set standards for diversification of the
investments underlying variable life insurance policies in order for such
policies to be treated as life insurance. Chubb Life believes it presently is in
compliance with the diversification requirements as set forth in the regulations
and intends to remain in compliance with such diversification requirements. If
the diversification requirements are not satisfied, the Policy would not be
treated as a life insurance contract. As a consequence to the Policyowner,
income earned on a Policy would be taxable to the Policyowner in the calendar
quarter in which the diversification requirements were not satisfied, and for
all subsequent calendar quarters.
The Secretary of the Treasury may issue a regulation or a ruling which will
prescribe the circumstances in which a policyowner's control of the investments
of a segregated asset account may cause the policyowner, rather than the
insurance company, to be treated as the owner of the assets of the account. The
regulation or ruling could impose requirements that are not reflected in the
Policy, relating, for example, to such elements of policyowner control as
premium allocation, investment selection, transfer privileges and investments in
a division focusing on a particular investment sector. It has also been
suggested that, in certain circumstances, control over the investment adviser
might constitute prohibited policyowner control. Chubb Life believes that
policyowner control will not exist under the Policy. Because failure to comply
with any such regulation or ruling presumably would cause earnings on a
Policyowner's interest in Separate Account C to be includable in the
Policyowner's gross income in the year earned, Chubb Life has reserved certain
rights to alter the Policy and investment alternatives so as to comply with such
regulation or ruling. Chubb Life believes that any such regulation or
48
<PAGE>
ruling would apply prospectively. Since the regulation or ruling has not been
issued, there can be no assurance as to the content of such regulation or ruling
or even whether application of the regulation or ruling will be prospective. For
these reasons, Policyowners are urged to consult with their own tax advisers.
A Policyowner may elect to exchange Chubb Advisor II for two individual Chubb
Advisor I policies provided the conditions under the Policy Exchange Option
Rider are met. This could have adverse tax consequences including, but not
limited to, the recognition of taxable income in an amount up to any taxable
gain in the Policy at the time of the exchange.
Policyowners are advised that the exercise of an Exchange of Insured Rider
will give rise to tax consequences and are urged to consult with a tax adviser
prior to exercising such rider.
Policyowners are advised that the Federal income tax status of the Terminal
Illness Accelerated Benefit Rider is uncertain at this time. Benefit proceeds
are not specifically excluded from taxable income under Section 101 of the Code.
Under regulations proposed by the Internal Revenue Service on December 14, 1992,
terminal illness benefit proceeds will be treated as excludable from taxable
income under Section 101 of the Code. As currently proposed, tax-free treatments
will only be accorded to benefit proceeds received on or after the date that
these regulations become final. In addition, while only important for a premium
paid rider, rider benefits are not expressly included as "Qualified Additional
Benefits" in Section 7702(f)(5) of the Code. Also, there is a question as to
whether or not the addition of an accelerated benefit rider constitutes a
Section 7702A(c)(3)(A) "material change" in benefit, thereby causing the Policy
to be treated as a new Policy and subject to a new seven-pay test, with
appropriate adjustments to take into account the cash surrender values under the
contract. It is likely, but not entirely certain, that the final regulations,
when adopted, will not produce a different tax result.
The foregoing summary does not purport to be complete or to cover all
situations, including the possible tax consequences of changes in ownership.
Counsel and other competent advisers should be consulted for more complete
information.
CHARGE FOR CHUBB LIFE INCOME TAXES. Chubb Life is presently taxed as a life
insurance company under the provisions of the Code. The Code specifically
provides for adjustments in reserves for variable policies, and Chubb Life will
include flexible premium life insurance operations in its tax return in
accordance with these rules.
Currently no charge is made against Separate Account C for Chubb Life's
Federal income taxes, or provisions for such taxes, that may be attributable to
Separate Account C. Chubb Life may charge each Division for its portion of any
income tax charged to Chubb Life on the Division or its assets. See "CHARGES AND
DEDUCTIONS-Premium Charges" for a description of the Federal DAC tax charge
deducted from premium payments. Under present laws, Chubb Life may incur state
and local taxes (in addition to premium taxes) in several states. At present,
these taxes are not significant. If they increase, however, Chubb Life may
decide to make charges for such taxes or provisions for such taxes against
Separate Account C. Chubb Life would retain any investment earnings on any tax
charges accumulated in a Division. Any such charges against Separate Account C
49
<PAGE>
or its Divisions could have an adverse effect on the investment experience of
such Division.
EMPLOYMENT BENEFIT PLANS
Employers and employee organizations should consider, in consultation with
counsel, the impact of Title VII of the Civil Rights Act of 1964 on the purchase
of a Policy in connection with an employment-related insurance or benefit plan.
The United States Supreme Court held, in a 1983 decision, that, under Title VII,
optional annuity benefits under a deferred compensation plan could not vary on
the basis of sex.
LEGAL PROCEEDINGS
There are no legal proceedings to which Separate Account C is a party or to
which the assets of any of the Divisions are subject. Chubb Life is not involved
in any litigation that is of material importance in relation to its total assets
or that relate to Separate Account C.
EXPERTS
The financial statements of Chubb Life as of December 31, 1994 and for the
year then ended, appearing in this Prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing elsewhere herein and in the Registration Statement, and
are included in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
Actuarial matters included in this Prospectus have been examined by Michael J.
LeBoeuf, FSA, MAAA as stated in the opinion filed as an exhibit to the
Registration Statement.
REGISTRATION STATEMENT
A Registration Statement has been filed with the SEC under the Securities Act
of 1933, as amended, with respect to the Policies offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement and the amendments and exhibits to the Registration Statement to all
of which reference is made for further information concerning Separate Account
C, Chubb Life and the Policies offered hereby. Statements contained in this
Prospectus as to the contents of the Policy and other legal instruments are
summaries. For a complete statement of the terms thereof reference is made to
such instruments as filed.
FINANCIAL STATEMENTS
The financial statements of Chubb Life which are included in the Prospectus
should be considered only as bearing on the ability of Chubb Life to meet its
obligations under the Policy. They should not be considered as bearing on the
investment experience of the assets held in Separate Account C.
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APPENDIX A
CASH VALUE ACCUMULATION TEST
CORRIDOR PERCENTAGES
CHUBB ADVISOR I
<TABLE>
<CAPTION>
Attained Non-Smoker Attained Smoker
Age Male Female Age Male Female
--- ---- ------ --- ---- ------
<S> <C> <C> <C> <C> <C>
0 1,257% 1,469% 0 n/a n/a
1 1,268 1,468 1 n/a n/a
2 1,234 1,428 2 n/a n/a
3 1,200 1,387 3 n/a n/a
4 1,165 1,347 4 n/a n/a
5 1,132 1,307 5 n/a n/a
6 1,098 1,268 6 n/a n/a
7 1,064 1,229 7 n/a n/a
8 1,031 1,191 8 n/a n/a
9 998 1,154 9 n/a n/a
10 966 1,117 10 n/a n/a
11 934 1,082 11 n/a n/a
12 904 1,047 12 n/a n/a
13 875 1,013 13 n/a n/a
14 848 981 14 n/a n/a
15 822 949 15 665% 835%
16 797 919 16 646 808
17 774 890 17 627 783
18 752 862 18 609 758
19 730 834 19 592 734
20 709 808 20 575 710
21 689 782 21 559 688
22 668 757 22 543 665
23 648 733 23 527 644
24 629 709 24 512 623
25 609 686 25 496 603
26 590 664 26 481 584
27 572 642 27 466 565
28 553 621 28 451 546
29 535 601 29 437 528
30 518 581 30 423 511
31 501 562 31 409 495
32 484 543 32 396 478
33 468 525 33 383 463
34 453 508 34 371 448
35 438 491 35 359 433
36 423 475 36 347 419
37 409 459 37 336 406
38 395 444 38 326 393
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
Attained Non-Smoker Attained Smoker
Age Male Female Age Male Female
--- ---- ------ --- ---- ------
<S> <C> <C> <C> <C> <C>
39 382% 429% 39 315% 380%
40 370 415 40 305 368
41 358 402 41 296 357
42 346 389 42 287 346
43 335 376 43 278 335
44 324 364 44 270 325
45 314 353 45 262 316
46 304 342 46 254 306
47 294 331 47 247 298
48 285 321 48 240 289
49 276 311 49 233 281
50 267 301 50 227 273
51 259 292 51 220 265
52 251 283 52 214 258
53 243 274 53 209 251
54 236 266 54 203 244
55 229 258 55 198 237
56 222 251 56 193 231
57 216 243 57 189 225
58 210 236 58 184 219
59 204 229 59 180 213
60 198 223 60 176 208
61 193 216 61 172 202
62 188 210 62 168 197
63 183 204 63 164 192
64 178 198 64 161 187
65 174 193 65 158 182
66 169 188 66 155 178
67 165 183 67 152 174
68 161 178 68 149 170
69 158 173 69 146 166
70 154 169 70 144 162
71 151 164 71 141 158
72 148 160 72 139 155
73 145 156 73 137 151
74 142 153 74 135 148
75 140 149 75 133 145
76 137 146 76 131 142
77 135 143 77 129 140
78 133 140 78 128 137
79 131 137 79 126 135
80 129 135 80 125 132
81 127 132 81 124 130
82 125 130 82 122 128
83 124 128 83 121 126
84 122 126 84 120 125
85 121 124 85 119 123
86 119 122 86 118 121
87 118 120 87 117 120
88 117 119 88 116 119
89 116 118 89 115 117
90 115 116 90 115 116
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
Attained Non-Smoker Attained Smoker
Age Male Female Age Male Female
--- ---- ------ --- ---- ------
<S> <C> <C> <C> <C> <C>
91 114% 115% 91 114% 115%
92 113 114 92 113 114
93 112 112 93 112 112
94 111 111 94 111 111
95 110 110 95 110 110
96 108 108 96 108 108
97 107 107 97 107 107
98 105 105 98 105 105
99+ 104 104 99+ 104 104
</TABLE>
A-3
<PAGE>
CASH VALUE ACCUMULATION TEST
CORRIDOR PERCENTAGES
CHUBB ADVISOR II
(ASSUME EQUAL AGE MALE AND FEMALE NONSMOKERS)
<TABLE>
<CAPTION>
Policy Issue Issue Issue Issue
Year Ages - 35 Ages - 45 Ages - 55 Ages - 65
<S> <C> <C> <C> <C>
0 656% 451% 313% 233%
1 631 443 301 214
2 607 417 290 206
3 584 401 279 199
4 561 386 268 191
5 540 371 258 185
6 519 357 249 178
7 499 343 240 172
8 480 330 231 167
9 462 318 222 162
10 444 306 215 157
11 427 295 207 152
12 411 284 200 148
13 396 273 193 144
14 381 263 187 141
15 366 254 181 137
16 353 244 175 134
17 339 236 169 131
18 327 227 164 129
19 314 219 159 127
20 303 212 155 124
21 292 205 151 122
22 281 198 147 121
23 271 191 143 119
24 261 185 140 118
25 252 179 137 116
26 243 174 134 115
27 234 168 131 114
28 226 163 129 112
29 218 159 126 111
30 211 154 124 110
31 203 150 122 108
32 197 146 121 107
33 190 143 119 105
34 184 140 118 104
35 178 136 116 100
36 173 134 115
37 168 131 114
38 163 128 112
39 158 126 111
40 154 124 110
41 150 122 108
42 146 121 107
43 143 119 105
</TABLE>
A-4
<PAGE>
<TABLE>
<CAPTION>
Policy Issue Issue Issue Issue
Year Ages - 35 Ages - 45 Ages - 55 Ages - 65
<S> <C> <C> <C> <C>
44 139% 118% 104%
45 136 116 100
46 133 115
47 131 114
48 128 112
49 126 111
50 124 110
51 122 108
52 121 107
53 119 105
54 118 104
55 116 100
56 115
57 114
58 112
59 111
60 110
61 108
62 107
63 105
64 104
65 100
</TABLE>
A-5
<PAGE>
APPENDIX B
GUIDELINE PREMIUM TEST
DEATH BENEFIT PERCENTAGES
<TABLE>
<CAPTION>
Age Percentage Age Percentage Age Percentage Age Percentage
--- ---------- --- ---------- --- ---------- --- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
0-40 250% 50 185% 60 130% 70 115%
41 243 51 178 61 128 71 113
42 236 52 171 62 126 72 111
43 229 53 164 63 124 73 109
44 222 54 157 64 122 74 107
45 215 55 150 65 120 75-90 105
46 209 56 146 66 119 91 104
47 203 57 142 67 118 92 103
48 197 58 138 68 117 93 102
49 191 59 134 69 116 94 or older 101
</TABLE>
B-1
<PAGE>
APPENDIX C
ILLUSTRATIONS OF ACCUMULATION VALUES
CASH VALUES AND DEATH BENEFITS
Following are a series of tables that illustrate how the Accumulation Values,
Cash Values and Death Benefits of a Policy change with the investment
performance of the Portfolios. The tables show how the Accumulation Values, Cash
Values and Death Benefits of a Policy issued to an Insured(s) of a given age(s)
and given premium would vary over time if the return on the assets held in each
Portfolio of the Funds were a constant gross annual rate of 0%, 6%, and 12%.
The tables on pages C- through C- illustrate a Chubb Advisor I Policy issued
to a male, age 45, under a standard rate non-smoker underwriting risk
classification. The tables on pages C- through C- illustrate a Chubb Advisor
II Policy issued to a male, age 45, under a standard rate non-smoker
underwriting risk classification and a female, age 45, under a standard rate
non-smoker underwriting risk classification. The Accumulation Values, Cash
Values and Death Benefits would be different from those shown if the returns
averaged 0%, 6%, and 12% over a period of years, but fluctuated above and below
those averages for individual policy years.
The amount of the Accumulation Value exceeds the Cash Value during the first
five policy years due to the Surrender Charge. For policy years six and after,
the Accumulation Value and Cash Value are equal, since the Surrender Charge has
been reduced to zero.
The second column shows the Accumulation Value of the premiums paid at the
stated interest rate. The third and sixth columns illustrate the Accumulation
Values and the fourth and seventh columns illustrate the Cash Values of the
Policy over the designated period. The Accumulation Values shown in the third
column and the Cash Values shown in the fourth column assume the monthly charge
for cost of insurance is based upon the current cost of insurance rates and
assume a monthly deduction adjustment. The current cost of insurance rates,
which may be modified at any time, are based on the sex, issue age, policy year,
and rating class of the Insured(s). The Accumulation Values shown in the sixth
column and the Cash Values shown in the seventh column assume the monthly charge
for cost of insurance is based upon the maximum cost of insurance rates
allowable, which are based on the Commissioner's 1980 Standard Ordinary
Mortality Table. The fifth and eighth columns illustrate the death benefit of a
Policy over the designated period. The illustrations of Death Benefits reflect
the same assumptions as the Accumulation Values and Cash Values. The Death
Benefit values also vary between tables, depending upon whether Option I, Option
II or Option III death benefits are illustrated.
C-1
<PAGE>
The amounts shown for the Death Benefit, Accumulation Values, and Cash Values
reflect the fact that the net investment return of the Divisions of Separate
Account C is lower than the gross rates of return on the assets in the
Portfolios, as a result of expenses paid by the Portfolios and charges levied
against the Divisions of Separate Account C.
The policy values shown take into account a daily investment advisory fee
equivalent to the maximum annual rate of .72% of the aggregate average daily net
assets of the Portfolios plus an assumed charge of .35% of the aggregate average
daily net assets to cover expenses incurred by the Portfolios. The .72%
investment advisory fee is an average of the individual investment advisory fees
of the ten Portfolios. The policy values also take into account a daily charge
to each Division of Separate Account C for the Mortality Risk Charge, which is
equivalent to a charge at an annual rate of .50% of the average net assets of
the Divisions of Separate Account C. After deduction of these amounts, the
illustrated gross investment rates of 0%, 6%, and 12% correspond to approximate
net annual rates of -1.57%, 4.43%, and 10.43%, respectively.
The hypothetical values shown in the tables do not reflect any charges for
Federal income taxes or other taxes other than the DAC tax and the consideration
of premium tax (at 2.5% of premium). However, if, in the future, any additional
charges are made, the gross annual investment rate of return would have to
exceed the stated investment amount to cover the tax charges in order to produce
the Accumulation Values, Cash Values and Death Benefits illustrated.
The tables illustrate the policy values that would result based on
hypothetical investment rates of return if premiums are paid in full at the
beginning of each year, if all net premiums are allocated to Separate Account
C, and if no policy loans have been made. The values would vary from those
shown if the assumed annual premium payments were paid in installments during a
year. The values would also vary if the Policyowner varied the amount or
frequency of premium payments. The tables also assume that the Policyowner has
not requested an increase or decrease in Specified Amount, that no withdrawals
have been made and no Surrender Charges imposed, and that no transfers have
been made and no Transfer Charges imposed.
Upon request, Chubb Life will provide, without charge, a comparable
illustration based upon the proposed Insured's age, sex and rating class, the
Specified Amount requested, the proposed frequency and amount of premium
payments and any available riders requested. Existing Policyowners may request
illustrations based on existing Cash Value at the time of request. Chubb Life
has reserved the right to charge an administrative fee of up to $25 for such
illustrations.
C-2
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Guideline Premium Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 0% (-1.57% net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUM Assuming Current Costs Assuming Guaranteed Costs
-------------------------------------- --------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 14,319 13,469 1,000,000 12,370 11,520 1,000,000
2 36,593 28,048 27,368 1,000,000 24,325 23,645 1,000,000
3 56,272 41,234 40,724 1,000,000 35,860 35,350 1,000,000
4 76,936 53,979 53,639 1,000,000 46,965 46,625 1,000,000
5 98,633 66,351 66,181 1,000,000 57,617 57,447 1,000,000
6 121,414 78,360 78,360 1,000,000 67,809 67,809 1,000,000
7 145,335 90,025 90,025 1,000,000 77,489 77,489 1,000,000
8 170,452 101,409 101,409 1,000,000 86,609 86,609 1,000,000
9 196,824 112,448 112,448 1,000,000 95,131 95,131 1,000,000
10 224,515 123,057 123,057 1,000,000 102,988 102,988 1,000,000
11 253,591 133,163 133,163 1,000,000 110,137 110,137 1,000,000
12 284,121 142,526 142,526 1,000,000 116,524 116,524 1,000,000
13 316,177 151,110 151,110 1,000,000 122,121 122,121 1,000,000
14 349,836 158,986 158,986 1,000,000 126,883 126,883 1,000,000
15 385,177 166,157 166,157 1,000,000 130,719 130,719 1,000,000
16 422,286 173,079 173,079 1,000,000 133,541 133,541 1,000,000
17 461,251 179,193 179,193 1,000,000 135,247 135,247 1,000,000
18 502,163 184,426 184,426 1,000,000 135,690 135,690 1,000,000
19 545,121 188,707 188,707 1,000,000 134,694 134,694 1,000,000
20 590,227 191,957 191,957 1,000,000 132,066 132,066 1,000,000
25 851,929 188,733 188,733 1,000,000 87,734 87,734 1,000,000
30 1,185,933 136,635 136,635 1,000,000 0 0 0
35 0 0 0 0 0 0 0
40 0 0 0 0 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
__________________
(1) Assumes a $17,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-3
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 0% (-1.57% net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
-------------------------------------- -------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 14,319 13,469 1,000,000 12,370 11,520 1,000,000
2 36,593 28,048 27,368 1,000,000 24,325 23,645 1,000,000
3 56,272 41,234 40,724 1,000,000 35,860 35,350 1,000,000
4 76,936 53,979 53,639 1,000,000 46,965 46,625 1,000,000
5 98,633 66,351 66,181 1,000,000 57,617 57,447 1,000,000
6 121,414 78,360 78,360 1,000,000 67,809 67,809 1,000,000
7 145,335 90,025 90,025 1,000,000 77,489 77,489 1,000,000
8 170,452 101,409 101,409 1,000,000 86,609 86,609 1,000,000
9 196,824 112,448 112,448 1,000,000 95,131 95,131 1,000,000
10 224,515 123,057 123,057 1,000,000 102,988 102,988 1,000,000
11 253,591 133,163 133,163 1,000,000 110,137 110,137 1,000,000
12 284,121 142,526 142,526 1,000,000 116,524 116,524 1,000,000
13 316,177 151,110 151,110 1,000,000 122,121 122,121 1,000,000
14 349,836 158,986 158,986 1,000,000 126,883 126,883 1,000,000
15 385,177 166,157 166,157 1,000,000 130,719 130,719 1,000,000
16 422,286 173,079 173,079 1,000,000 133,541 133,541 1,000,000
17 461,251 179,193 179,193 1,000,000 135,247 135,247 1,000,000
18 502,163 184,426 184,426 1,000,000 135,690 135,690 1,000,000
19 545,121 188,707 188,707 1,000,000 134,694 134,694 1,000,000
20 590,227 191,957 191,957 1,000,000 132,066 132,066 1,000,000
25 851,929 188,733 188,733 1,000,000 87,734 87,734 0
30 1,185,933 136,635 136,635 1,000,000 0 0 0
35 0 0 0 0 0 0 0
40 0 0 0 0 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
__________________
(1) Assumes a $17,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-4
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Guideline Premium Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 6% (4.43% net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
------------------------------------- --------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 15,229 14,379 1,000,000 13,217 12,367 1,000,000
2 36,593 30,758 30,078 1,000,000 26,796 26,116 1,000,000
3 56,272 46,642 46,132 1,000,000 40,745 40,235 1,000,000
4 76,936 62,997 62,657 1,000,000 55,069 54,729 1,000,000
5 98,633 79,910 79,740 1,000,000 69,758 69,588 1,000,000
6 121,414 97,415 97,415 1,000,000 84,821 84,821 1,000,000
7 145,335 115,557 115,557 1,000,000 100,224 100,224 1,000,000
8 170,452 134,428 134,428 1,000,000 115,936 115,936 1,000,000
9 196,824 153,998 153,998 1,000,000 131,933 131,933 1,000,000
10 224,515 174,217 174,217 1,000,000 148,172 148,172 1,000,000
11 253,591 195,047 195,047 1,000,000 164,626 164,626 1,000,000
12 284,121 216,297 216,297 1,000,000 181,266 181,266 1,000,000
13 316,177 238,030 238,030 1,000,000 198,086 198,086 1,000,000
14 349,836 260,376 260,376 1,000,000 215,071 215,071 1,000,000
15 385,177 283,388 283,388 1,000,000 232,229 232,229 1,000,000
16 422,286 307,525 307,525 1,000,000 249,522 249,522 1,000,000
17 461,251 332,380 332,380 1,000,000 266,905 266,905 1,000,000
18 502,163 357,968 357,968 1,000,000 284,296 284,296 1,000,000
19 545,121 384,318 384,318 1,000,000 301,598 301,598 1,000,000
20 590,227 411,465 411,465 1,000,000 318,713 318,713 1,000,000
25 851,929 560,904 560,904 1,000,000 399,003 399,003 1,000,000
30 1,185,933 743,216 743,216 1,000,000 457,613 457,613 1,000,000
35 1,612,217 993,919 993,919 1,043,615 (3) 455,454 455,454 1,000,000
40 2,156,276 1,322,821 1,322,821 1,388,963 (3) 285,043 285,043 1,000,000
45 2,850,648 1,715,142 1,715,142 1,800,899 (3) 0 0 0
50 3,736,862 2,210,976 2,210,976 2,233,086 (3) 0 0 0
55 4,867,920 2,887,000 2,887,000 2,887,000 (3) 0 0 0
</TABLE>
__________________
(1) Assumes a $17,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-5
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 6% (4.43% net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
-------------------------------------- -------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 15,229 14,379 1,000,000 13,217 12,367 1,000,000
2 36,593 30,758 30,078 1,000,000 26,796 26,116 1,000,000
3 56,272 46,642 46,132 1,000,000 40,745 40,235 1,000,000
4 76,936 62,997 62,657 1,000,000 55,069 54,729 1,000,000
5 98,633 79,910 79,740 1,000,000 69,758 69,588 1,000,000
6 121,414 97,415 97,415 1,000,000 84,821 84,821 1,000,000
7 145,335 115,557 115,557 1,000,000 100,224 100,224 1,000,000
8 170,452 134,428 134,428 1,000,000 115,936 115,936 1,000,000
9 196,824 153,998 153,998 1,000,000 131,933 131,933 1,000,000
10 224,515 174,217 174,217 1,000,000 148,172 148,172 1,000,000
11 253,591 195,047 195,047 1,000,000 164,626 164,626 1,000,000
12 284,121 216,297 216,297 1,000,000 181,266 181,266 1,000,000
13 316,177 238,030 238,030 1,000,000 198,086 198,086 1,000,000
14 349,836 260,376 260,376 1,000,000 215,071 215,071 1,000,000
15 385,177 283,388 283,388 1,000,000 232,229 232,229 1,000,000
16 422,286 307,525 307,525 1,000,000 249,522 249,522 1,000,000
17 461,251 332,380 332,380 1,000,000 266,905 266,905 1,000,000
18 502,163 357,968 357,968 1,000,000 284,296 284,296 1,000,000
19 545,121 384,318 384,318 1,000,000 301,598 301,598 1,000,000
20 590,227 411,465 411,465 1,000,000 318,713 318,713 1,000,000
25 851,929 560,904 560,904 1,000,000 399,003 399,003 1,000,000
30 1,185,933 741,842 741,842 1,053,416 (3) 457,613 457,613 1,000,000
35 1,612,217 949,094 949,094 1,243,314 (3) 455,454 455,454 1,000,000
40 2,156,276 1,175,777 1,175,777 1,434,448 (3) 285,043 285,043 1,000,000
45 2,850,648 1,421,454 1,421,454 1,648,886 (3) 0 0 0
50 3,736,862 1,692,567 1,692,567 1,878,749 (3) 0 0 0
55 4,867,920 2,069,670 2,069,670 2,152,457 (3) 0 0 0
</TABLE>
__________________
(1) Assumes a $17,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits."
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-6
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Guideline Premium Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 12% (10.43% net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
-------------------------------------- ----------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 16,139 15,289 1,000,000 14,065 13,215 1,000,000
2 36,593 33,578 32,898 1,000,000 29,373 28,693 1,000,000
3 56,272 52,499 51,989 1,000,000 46,047 45,537 1,000,000
4 76,936 73,163 72,823 1,000,000 64,225 63,885 1,000,000
5 98,633 95,826 95,656 1,000,000 84,045 83,875 1,000,000
6 121,414 120,713 120,713 1,000,000 105,682 105,682 1,000,000
7 145,335 148,083 148,083 1,000,000 129,286 129,286 1,000,000
8 170,452 178,269 178,269 1,000,000 155,036 155,036 1,000,000
9 196,824 211,515 211,515 1,000,000 183,143 183,143 1,000,000
10 224,515 248,127 248,127 1,000,000 213,828 213,828 1,000,000
11 253,591 288,528 288,528 1,000,000 247,426 247,426 1,000,000
12 284,121 332,969 332,969 1,000,000 284,339 284,339 1,000,000
13 316,177 381,932 381,932 1,000,000 324,988 324,988 1,000,000
14 349,836 436,057 436,057 1,000,000 369,841 369,841 1,000,000
15 385,177 496,017 496,017 1,000,000 419,417 419,417 1,000,000
16 422,286 562,853 562,853 1,000,000 474,330 474,330 1,000,000
17 461,251 637,111 637,111 1,000,000 535,303 535,303 1,000,000
18 502,163 719,774 719,774 1,000,000 603,173 603,173 1,000,000
19 545,121 811,998 811,998 1,006,877 (3) 678,943 678,943 1,000,000
20 590,227 914,441 914,441 1,115,618 (3) 763,829 763,829 1,000,000
25 851,929 1,611,144 1,611,144 1,868,927 (3) 1,351,171 1,351,171 1,567,358 (3)
30 1,185,933 2,760,514 2,760,514 2,953,750 (3) 2,314,713 2,314,713 2,476,743 (3)
35 1,612,217 4,673,165 4,673,165 4,906,824 (3) 3,913,145 3,913,145 4,108,803 (3)
40 2,156,276 7,786,513 7,786,513 8,175,839 (3) 6,481,727 6,481,727 6,805,813 (3)
45 2,850,648 12,775,662 12,775,662 13,414,445 (3) 10,514,204 10,514,204 11,039,914 (3)
50 3,736,862 21,011,783 21,011,783 21,221,901 (3) 17,147,493 17,147,493 17,318,968 (3)
55 4,867,920 35,273,678 35,273,678 35,273,678 (3) 28,805,501 28,805,501 28,805,501 (3)
</TABLE>
__________________
(1) Assumes a $17,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-7
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Mon-Smoker Issue Age 45 Annual Rate of Return: 12% (10.43% net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
------------------------------------- --------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 16,139 15,289 1,000,000 14,065 13,215 1,000,000
2 36,593 33,578 32,898 1,000,000 29,373 28,693 1,000,000
3 56,272 52,499 51,989 1,000,000 46,047 45,537 1,000,000
4 76,936 73,163 72,823 1,000,000 64,225 63,885 1,000,000
5 98,633 95,826 95,656 1,000,000 84,045 83,875 1,000,000
6 121,414 120,713 120,713 1,000,000 105,682 105,682 1,000,000
7 145,335 148,083 148,083 1,000,000 129,286 129,286 1,000,000
8 170,452 178,269 178,269 1,000,000 155,036 155,036 1,000,000
9 196,824 211,515 211,515 1,000,000 183,143 183,143 1,000,000
10 224,515 248,127 248,127 1,000,000 213,828 213,828 1,000,000
11 253,591 288,528 288,528 1,000,000 247,426 247,426 1,000,000
12 284,121 332,969 332,969 1,000,000 284,339 284,339 1,000,000
13 316,177 381,932 381,932 1,000,000 324,988 324,988 1,000,000
14 349,836 436,057 436,057 1,000,000 369,841 369,841 1,000,000
15 385,177 496,015 496,015 1,011,870 (3) 419,417 419,417 1,000,000
16 422,286 562,404 562,404 1,113,560 (3) 474,330 474,330 1,000,000
17 461,251 635,170 635,170 1,225,879 (3) 535,236 535,236 1,033,005 (3)
18 502,163 714,862 714,862 1,343,941 (3) 601,862 601,862 1,131,500 (3)
19 545,121 802,097 802,097 1,467,838 (3) 674,313 674,313 1,233,993 (3)
20 590,227 897,553 897,553 1,597,644 (3) 753,036 753,036 1,340,404 (3)
25 851,929 1,524,126 1,524,126 2,408,120 (3) 1,257,936 1,257,936 1,987,539 (3)
30 1,185,933 2,485,235 2,485,235 3,529,033 (3) 1,999,871 1,999,871 2,839,817 (3)
35 1,612,217 3,934,139 3,934,139 5,153,722 (3) 3,054,998 3,054,998 4,002,048 (3)
40 2,156,276 6,088,015 6,088,015 7,427,379 (3) 4,540,285 4,540,285 5,539,148 (3)
45 2,850,648 9,262,796 9,262,796 10,744,843 (3) 6,598,139 6,598,139 7,653,841 (3)
50 3,736,862 13,965,042 13,965,042 15,501,196 (3) 9,514,504 9,514,504 10,561,100 (3)
55 4,867,920 21,742,231 21,742,231 22,611,920 (3) 13,664,894 13,664,894 14,211,940 (3)
</TABLE>
__________________
(1) Assumes a $17,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
C-8
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option II; Guideline Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 0% (-1.57% net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
---------------------------------------- ---------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 14,301 13,451 1,014,301 12,327 11,477 1,012,327
2 36,593 27,983 27,303 1,027,983 24,194 23,514 1,024,194
3 56,272 41,084 40,574 1,041,084 35,589 35,079 1,035,589
4 76,936 53,704 53,364 1,053,704 46,500 46,160 1,046,500
5 98,633 65,909 65,739 1,065,909 56,893 56,723 1,056,893
6 121,414 77,706 77,706 1,077,706 66,759 66,759 1,066,759
7 145,335 89,110 89,110 1,089,110 76,036 76,036 1,076,036
8 170,452 100,187 100,187 1,100,187 84,664 84,664 1,084,664
9 196,824 110,863 110,863 1,110,863 92,594 92,594 1,092,594
10 224,515 121,036 121,036 1,121,036 99,749 99,749 1,099,749
11 253,591 130,616 130,616 1,130,616 106,071 106,071 1,106,071
12 284,121 139,315 139,315 1,139,315 111,496 111,496 1,111,496
13 316,177 147,079 147,079 1,147,079 115,986 115,986 1,115,986
14 349,836 153,982 153,982 1,153,982 119,489 119,489 1,119,489
15 385,177 160,016 160,016 1,160,016 121,901 121,901 1,121,901
16 422,286 165,730 165,730 1,165,730 123,122 123,122 1,123,122
17 461,251 170,436 170,436 1,170,436 123,040 123,040 1,123,040
18 502,163 174,043 174,043 1,174,043 121,500 121,500 1,121,500
19 545,121 176,458 176,458 1,176,458 118,316 118,316 1,118,316
20 590,227 177,584 177,584 1,177,584 113,298 113,298 1,113,298
25 851,929 159,310 159,310 1,159,310 55,342 55,342 1,055,342
30 1,185,933 85,663 85,663 1,085,663 0 0 0
35 0 0 0 0 0 0 0
40 0 0 0 0 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
___________________
(1) Assumes a $17,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-9
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option II; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 0% (-1.57% net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
-------------------------------------- ---------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 14,301 13,451 1,014,301 12,327 11,477 1,012,327
2 36,593 27,983 27,303 1,027,983 24,194 23,514 1,024,194
3 56,272 41,084 40,574 1,041,084 35,589 35,079 1,035,589
4 76,936 53,704 53,364 1,053,704 46,500 46,160 1,046,500
5 98,633 65,909 65,739 1,065,909 56,893 56,723 1,056,893
6 121,414 77,706 77,706 1,077,706 66,759 66,759 1,066,759
7 145,335 89,110 89,110 1,089,110 76,036 76,036 1,076,036
8 170,452 100,187 100,187 1,100,187 84,664 84,664 1,084,664
9 196,824 110,863 110,863 1,110,863 92,594 92,594 1,092,594
10 224,515 121,036 121,036 1,121,036 99,749 99,749 1,099,749
11 253,591 130,616 130,616 1,130,616 106,071 106,071 1,106,071
12 284,121 139,315 139,315 1,139,315 111,496 111,496 1,111,496
13 316,177 147,079 147,079 1,147,079 115,986 115,986 1,115,986
14 349,836 153,982 153,982 1,153,982 119,489 119,489 1,119,489
15 385,177 160,016 160,016 1,160,016 121,901 121,901 1,121,901
16 422,286 165,730 165,730 1,165,730 123,122 123,122 1,123,122
17 461,251 170,436 170,436 1,170,436 123,040 123,040 1,123,040
18 502,163 174,043 174,043 1,174,043 121,500 121,500 1,121,500
19 545,121 176,458 176,458 1,176,458 118,316 118,316 1,118,316
20 590,227 177,584 177,584 1,177,584 113,298 113,298 1,113,298
25 851,929 159,310 159,310 1,159,310 55,342 55,342 1,055,342
30 1,185,933 85,663 85,663 1,085,663 0 0 0
35 0 0 0 0 0 0 0
40 0 0 0 0 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
____________________
(1) Assumes a $17,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have to be made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-10
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option II; Guideline Premium Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of REturn: 6%(4.43% net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
----------------------------------- -------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 15,210 14,360 1,015,210 13,172 12,322 1,013,172
2 36,593 30,686 30,006 1,030,686 26,652 25,972 1,026,652
3 56,272 46,470 45,960 1,046,470 40,434 39,924 1,040,434
4 76,936 62,669 62,329 1,062,669 54,510 54,170 1,054,510
5 98,633 79,362 79,192 1,079,36 68,854 68,684 1,068,854
6 121,414 96,570 96,570 1,096,570 83,457 83,457 1,083,457
7 145,335 114,326 114,326 1,114,326 98,259 98,259 1,098,259
8 170,452 132,717 132,717 1,132,717 113,197 113,197 1,113,197
9 196,824 151,688 151,688 1,151,688 128,217 128,217 1,128,217
10 224,515 171,154 171,154 1,171,154 143,230 143,230 1,143,230
11 253,591 191,035 191,035 1,191,035 158,165 158,165 1,158,165
12 284,121 211,042 211,042 1,211,042 172,938 172,938 1,172,938
13 316,177 231,156 231,156 1,231,156 187,489 187,489 1,187,489
14 349,836 251,479 251,479 1,251,479 201,738 201,738 1,201,738
15 385,177 272,003 272,003 1,272,003 215,555 215,555 1,215,555
16 422,286 293,286 293,286 1,293,286 228,850 228,850 1,228,850
17 461,251 314,653 314,653 1,314,653 241,466 241,466 1,241,466
18 502,163 335,996 335,996 1,335,996 253,185 253,185 1,253,185
19 545,121 357,201 357,201 1,357,201 263,751 263,751 1,263,751
20 590,227 378,141 378,141 1,378,141 272,884 272,884 1,272,884
25 851,929 472,645 472,645 1,472,645 287,539 287,539 1,287,539
30 1,185,933 526,600 526,600 1,526,600 210,442 210,442 1,210,442
35 1,612,217 490,713 490,713 1,490,713 0 0 0
40 2,156,276 281,070 281,070 1,281,070 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
____________________
(1) Assumes a $17,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-11
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option II; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 6% (4.43% net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
------------------------------------- --------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 15,210 14,360 1,015,210 13,172 12,322 1,013,172
2 36,593 30,686 30,006 1,030,686 26,652 25,972 1,026,652
3 56,272 46,470 45,960 1,046,470 40,434 39,924 1,040,434
4 76,936 62,669 62,329 1,062,669 54,510 54,170 1,054,510
5 98,633 79,362 79,192 1,079,362 68,854 68,684 1,068,854
6 121,414 96,570 96,570 1,096,570 83,457 83,457 1,083,457
7 145,335 114,326 114,326 1,114,326 98,259 98,259 1,098,259
8 170,452 132,717 132,717 1,132,717 113,197 113,197 1,113,197
9 196,824 151,688 151,688 1,151,688 128,217 128,217 1,128,217
10 224,515 171,154 171,154 1,171,154 143,230 143,230 1,143,230
11 253,591 191,035 191,035 1,191,035 158,165 158,165 1,158,165
12 284,121 211,042 211,042 1,211,042 172,938 172,938 1,172,938
13 316,177 231,156 231,156 1,231,156 187,489 187,489 1,187,489
14 349,836 251,479 251,479 1,251,479 201,738 201,738 1,201,738
15 385,177 272,003 272,003 1,272,003 215,555 215,555 1,215,555
16 422,286 293,286 293,286 1,293,286 228,850 228,850 1,228,850
17 461,251 314,653 314,653 1,314,653 241,466 241,466 1,241,466
18 502,163 335,996 335,996 1,335,996 253,185 253,185 1,253,185
19 545,121 357,201 357,201 1,357,201 263,751 263,751 1,263,751
20 590,227 378,141 378,141 1,378,141 272,884 272,884 1,272,884
25 851,929 472,645 472,645 1,472,645 287,539 287,539 1,287,539
30 1,185,933 526,600 526,600 1,526,600 210,442 210,442 1,210,442
35 1,612,217 490,713 490,713 1,490,713 0 0 0
40 2,156,276 281,070 281,070 1,281,070 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
____________________
(1) Assumes a $17,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-12
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option II; Guideline Premium Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 12% (10.43% net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
--------------------------------------- ---------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 16,119 15,269 1,016,119 14,018 13,168 1,014,018
2 36,593 33,499 32,819 1,033,499 29,214 28,534 1,029,214
3 56,272 52,303 51,793 1,052,303 45,690 45,180 1,045,690
4 76,936 72,775 72,435 1,072,775 63,560 63,220 1,063,560
5 98,633 95,150 94,980 1,095,150 82,926 82,756 1,082,926
6 121,414 119,629 119,629 1,119,629 103,924 103,942 1,103,924
7 145,335 146,440 146,440 1,146,440 126,649 126,649 1,126,649
8 170,452 175,890 175,890 1,175,890 151,210 151,210 1,151,210
9 196,824 208,171 208,171 1,208,171 177,735 177,735 1,177,735
10 224,515 243,495 243,495 1,243,495 206,333 206,333 1,206,333
11 253,591 282,191 282,191 1,282,191 237,174 237,174 1,237,174
12 284,121 324,310 324,310 1,324,310 270,512 270,512 1,270,512
13 316,177 370,151 370,151 1,370,151 306,567 306,567 1,306,567
14 349,836 420,179 420,179 1,420,179 345,558 345,558 1,345,558
15 385,177 474,830 474,830 1,474,830 387,681 387,681 1,387,681
16 422,286 535,172 535,172 1,535,172 433,149 433,149 1,433,149
17 461,251 601,088 601,088 1,601,088 482,189 482,189 1,482,189
18 502,163 673,069 673,069 1,673,069 535,000 535,000 1,535,000
19 545,121 751,657 751,657 1,751,657 591,773 591,773 1,591,773
20 590,227 837,446 837,446 1,837,446 652,707 652,707 1,652,707
25 851,929 1,398,697 1,398,697 2,398,697 1,029,860 1,029,860 2,029,860
30 1,185,933 2,263,045 2,263,045 3,263,045 1,551,982 1,551,982 2,551,982
35 1,612,217 3,591,534 3,591,534 4,591,534 2,243,675 2,243,675 3,243,675
40 2,156,276 5,630,336 5,630,336 6,630,336 3,137,529 3,137,529 4,137,529
45 2,850,648 8,772,754 8,772,754 9,772,754 4,232,718 4,232,718 5,232,718
50 3,736,862 13,678,424 13,678,424 14,678,424 5,574,181 5,574,181 6,574,181
55 4,867,920 21,502,508 21,502,508 22,502,508 5,993,013 5,993,013 6,993,013
</TABLE>
____________________
(1) Assumes a $17,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-13
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor I Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option II; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 12% (10.43%net)
$1,000,000 Initial Specified Amount Assumed Annual Premium (1): $17,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
--------------------------------------- ---------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 17,850 16,119 15,269 1,016,119 14,018 13,168 1,014,018
2 36,593 33,499 32,819 1,033,499 29,214 28,534 1,029,214
3 56,272 52,303 51,793 1,052,303 45,690 45,180 1,045,690
4 76,936 72,775 72,435 1,072,775 63,560 63,220 1,063,560
5 98,633 95,150 94,980 1,095,150 82,926 82,756 1,082,926
6 121,414 119,629 119,629 1,119,629 103,924 103,924 1,103,924
7 145,335 146,440 146,440 1,146,440 126,649 126,649 1,126,649
8 170,452 175,890 175,890 1,175,890 151,210 151,210 1,151,210
9 196,824 208,171 208,171 1,208,171 177,735 177,735 1,177,735
10 224,515 243,495 243,495 1,243,495 206,333 206,333 1,206,333
11 253,591 282,191 282,191 1,282,191 237,174 237,174 1,237,174
12 284,121 324,310 324,310 1,324,310 270,512 270,512 1,270,512
13 316,177 370,151 370,151 1,370,151 306,567 306,567 1,306,567
14 349,836 420,179 420,179 1,420,179 345,558 345,558 1,345,558
15 385,177 474,830 474,830 1,474,830 387,681 387,681 1,387,681
16 422,286 535,172 535,172 1,535,172 433,149 433,149 1,433,149
17 461,251 601,088 601,088 1,601,088 482,189 482,189 1,482,189
18 502,163 673,069 673,069 1,673,069 535,000 535,000 1,535,000
19 545,121 751,657 751,657 1,751,657 591,773 591,773 1,591,773
20 590,227 837,446 837,446 1,837,446 652,707 652,707 1,652,707
25 851,929 1,398,697 1,398,697 2,398,697 1,029,860 1,029,860 2,029,860
30 1,185,933 2,263,045 2,263,045 3,263,045 1,551,982 1,551,982 2,551,982
35 1,612,217 3,585,309 3,585,309 4,696,755 (3) 2,243,675 2,243,675 3,243,675
40 2,156,276 5,556,902 5,556,902 6,779,420 (3) 3,137,529 3,137,529 4,137,529
45 2,850,648 8,463,245 8,463,245 9,817,364 (3) 4,232,718 4,232,718 5,232,718
50 3,736,862 12,768,059 12,768,059 14,172,546 (3) 5,574,181 5,574,181 6,574,181
55 4,867,920 19,774,796 19,774,796 20,774,796 5,993,013 5,993,013 6,993,013
</TABLE>
____________________
(1) Assumes a $17,000 premium is paid at the begining of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawls have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. see "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-14
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Guideline Premium Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 0% (-1.57%net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1): $26,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
--------------------------------------- ----------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 23,845 22,545 2,000,000 23,845 22,545 2,000,000
2 55,965 47,272 46,232 2,000,000 47,272 46,232 2,000,000
3 86,063 70,279 69,499 2,000,000 70,279 69,499 2,000,000
4 117,666 92,864 92,344 2,000,000 92,864 92,344 2,000,000
5 150,850 115,022 114,762 2,000,000 115,022 114,762 2,000,000
6 185,692 136,747 136,747 2,000,000 136,747 136,747 2,000,000
7 222,277 158,028 158,028 2,000,000 158,028 158,028 2,000,000
8 260,691 178,851 178,851 2,000,000 178,851 178,851 2,000,000
9 301,025 199,199 199,199 2,000,000 199,199 199,199 2,000,000
10 343,376 219,049 219,049 2,000,000 219,049 219,049 2,000,000
11 387,845 238,378 238,378 2,000,000 238,378 238,378 2,000,000
12 434,538 257,233 257,233 2,000,000 257,233 257,233 2,000,000
13 483,564 275,582 275,582 2,000,000 275,582 275,582 2,000,000
14 535,043 293,393 293,393 2,000,000 293,393 293,393 2,000,000
15 589,095 310,618 310,618 2,000,000 310,618 310,618 2,000,000
16 645,850 328,201 328,201 2,000,000 327,196 327,196 2,000,000
17 705,442 345,310 345,310 2,000,000 343,052 343,052 2,000,000
18 768,014 361,887 361,887 2,000,000 358,078 358,078 2,000,000
19 833,715 377,864 377,864 2,000,000 372,133 372,133 2,000,000
20 902,701 393,162 393,162 2,000,000 385,052 385,052 2,000,000
25 1,302,950 457,161 457,161 2,000,000 426,414 426,414 2,000,000
30 1,813,781 485,805 485,805 2,000,000 399,505 399,505 2,000,000
35 2,465,744 435,742 435,742 2,000,000 202,856 202,856 2,000,000
40 3,297,834 194,360 194,360 2,000,000 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
____________________
(1) Assumes a $26,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-15
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 0% (-1.57%net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1): $26,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
---------------------------------- ---------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- --------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 23,845 22,545 2,000,000 23,854 22,545 2,000,000
2 55,965 47,272 46,232 2,000,000 47,272 46,232 2,000,000
3 86,063 70,279 69,499 2,000,000 70,279 69,499 2,000,000
4 117,666 92,864 92,344 2,000,000 92,864 92,344 2,000,000
5 150,850 115,022 114,762 2,000,000 115,022 114,762 2,000,000
6 185,692 136,747 136,747 2,000,000 136,747 136,747 2,000,000
7 222,277 158,028 158,028 2,000,000 158,028 158,028 2,000,000
8 260,691 178,851 178,851 2,000,000 178,851 178,851 2,000,000
9 301,025 199,199 199,199 2,000,000 199,199 199,199 2,000,000
10 343,376 219,049 219,049 2,000,000 219,049 219,049 2,000,000
11 387,845 238,378 238,378 2,000,000 238,378 238,378 2,000,000
12 434,538 257,233 257,233 2,000,000 257,233 257,233 2,000,000
13 483,564 275,582 275,582 2,000,000 275,582 257,582 2,000,000
14 535,043 293,393 293,393 2,000,000 293,393 293,393 2,000,000
15 589,095 310,618 310,618 2,000,000 310,618 310,618 2,000,000
16 645,850 328,201 328,201 2,000,000 327,196 327,196 2,000,000
17 705,442 345,310 345,310 2,000,000 343,052 343,052 2,000,000
18 768,014 361,887 361,887 2,000,000 358,078 358,078 2,000,000
19 833,715 377,864 377,864 2,000,000 372,133 372,133 2,000,000
20 902,701 393,162 393,162 2,000,000 385,052 385,052 2,000,000
25 1,302,905 457,161 457,161 2,000,000 426,414 426,414 2,000,000
30 1,813,781 485,805 485,805 2,000,000 399,505 399,505 2,000,000
35 2,465,744 435,742 435,742 2,000,000 202,856 202,856 2,000,000
40 3,297,834 194,360 194,360 2,000,000 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
____________________
(1) Assumes a $26,000 premium is paid at the begining of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawls have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-16
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Guideline Premium Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 6% (4.43% net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1): $26,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
-------------------------------------- ----------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 25,299 23,999 2,000,000 25,299 23,999 2,000,000
2 55,965 51,674 50,634 2,000,000 51,674 50,634 2,000,000
3 86,063 79,165 78,385 2,000,000 79,165 78,385 2,000,000
4 117,666 107,810 107,290 2,000,000 107,810 107,290 2,000,000
5 150,850 137,652 137,392 2,000,000 137,652 137,392 2,000,000
6 185,692 168,730 168,730 2,000,000 168,730 168,730 2,000,000
7 222,277 201,083 201,083 2,000,000 201,083 201,083 2,000,000
8 260,691 234,748 234,748 2,000,000 234,748 234,748 2,000,000
9 301,025 269,828 269,828 2,000,000 269,828 269,828 2,000,000
10 343,376 306,436 306,436 2,000,000 306,436 306,436 2,000,000
11 387,845 344,619 344,619 2,000,000 344,619 344,619 2,000,000
12 434,538 384,425 384,425 2,000,000 384,425 384,425 2,000,000
13 483,564 425,906 425,906 2,000,000 425,906 425,906 2,000,000
14 535,043 469,119 469,119 2,000,000 469,119 469,119 2,000,000
15 589,095 514,111 514,111 2,000,000 514,111 514,111 2,000,000
16 645,850 561,829 561,829 2,000,000 560,927 560,927 2,000,000
17 705,442 611,658 611,658 2,000,000 609,604 609,604 2,000,000
18 768,014 663,663 663,663 2,000,000 660,163 660,163 2,000,000
19 833,715 717,909 717,909 2,000,000 712,609 712,609 2,000,000
20 902,701 774,464 774,464 2,000,000 766,945 766,945 2,000,000
25 1,302,950 1,095,678 1,095,678 2,000,000 1,068,410 1,068,410 2,000,000
30 1,813,781 1,492,671 1,492,671 2,000,000 1,427,079 1,427,079 2,000,000
35 2,465,744 2,000,991 2,000,991 2,101,040 (3) 1,878,677 1,878,677 2,000,000
40 3,297,834 2,644,574 2,644,574 2,776,803 (3) 2,472,854 2,472,854 2,596,496 (3)
45 4,359,814 3,421,166 3,421,166 3,592,224 (3) 3,164,860 3,164,860 3,323,103 (3)
50 5,715,200 4,395,342 4,395,342 4,439,295 (3) 4,030,413 4,030,413 4,070,717 (3)
55 7,445,054 5,701,491 5,701,491 5,701,491 (3) 5,239,288 5,239,288 5,239,288 (3)
</TABLE>
__________________
(1) Assumes a $26,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-17
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 6% (4.43% net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1): $26,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
-------------------------------------------- --------------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFITS(2)
- ---- -------- -------- -------- ----------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 25,299 23,999 2,000,000 25,299 23,999 2,000,000
2 55,965 51,674 50,643 2,000,000 51,674 50,634 2,000,000
3 86,063 79,165 78,385 2,000,000 79,165 78,385 2,000,000
4 117,666 107,810 107,290 2,000,000 107,810 107,290 2,000,000
5 150,850 137,652 137,392 2,000,000 137,652 137,392 2,000,000
6 185,692 168,730 168,730 2,000,000 168,730 168,730 2,000,000
7 222,277 201,083 201,083 2,000,000 201,083 201,083 2,000,000
8 260,691 234,748 234,748 2,000,000 234,748 234,748 2,000,000
9 301,025 269,828 269,828 2,000,000 269,828 269,828 2,000,000
10 343,376 306,436 306,436 2,000,000 306,436 306,436 2,000,000
11 387,845 344,619 344,619 2,000,000 344,619 344,619 2,000,000
12 434,538 384,425 384,425 2,000,000 384,425 384,425 2,000,000
13 483,564 425,906 425,906 2,000,000 425,906 425,906 2,000,000
14 535,043 469,119 469,119 2,000,000 469,119 469,119 2,000,000
15 589,095 514,111 514,111 2,000,000 514,111 514,111 2,000,000
16 645,850 561,829 561,829 2,000,000 560,927 560,927 2,000,000
17 705,442 611,658 611,658 2,000,000 609,604 609,604 2,000,000
18 768,014 663,663 663,663 2,000,000 660,163 660,163 2,000,000
19 833,715 717,909 717,909 2,000,000 712,609 712,609 2,000,000
20 902,701 774,464 774,464 2,000,000 766,945 766,945 2,000,000
25 1,302,950 1,095,663 1,095,663 2,026,977 (3) 1,068,410 1,068,410 2,000,000
30 1,813,781 1,484,403 1,484,403 2,360,201 (3) 1,417,316 1,417,316 2,253,532 (3)
35 2,465,744 1,935,732 1,935,732 2,710,025 (3) 1,786,666 1,786,666 2,501,332 (3)
40 3,297,834 2,437,074 2,437,074 3,070,714 (3) 2,154,572 2,154,572 2,714,761 (3)
45 4,359,814 2,976,367 2,976,367 3,512,113 (3) 2,495,840 2,495,840 2,945,092 (3)
50 5,715,200 3,578,953 3,578,953 3,972,638 (3) 2,844,133 2,844,133 3,156,987 (3)
55 7,445,054 4,388,201 4,388,201 4,563,729 (3) 3,203,522 3,203,522 3,331,663 (3)
</TABLE>
__________________
(1) Assumes a $26,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increases is due to adjustments by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-18
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Guideline Premium Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 12% (10.43% net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1): $26,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
------------------------------------------ --------------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- ------------ -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 26,753 25,453 2,000,000 26,753 25,453 2,000,000
2 55,965 56,250 55,210 2,000,000 56,250 55,210 2,000,000
3 86,063 88,770 87,990 2,000,000 88,770 87,990 2,000,000
4 117,666 124,617 124,097 2,000,000 124,617 124,097 2,000,000
5 150,850 164,129 163,869 2,000,000 164,129 163,869 2,000,000
6 185,692 207,677 207,677 2,000,000 207,677 207,677 2,000,000
7 222,277 255,667 255,667 2,000,000 255,667 255,667 2,000,000
8 260,691 308,704 308,704 2,000,000 308,704 308,704 2,000,000
9 301,025 367,363 367,363 2,000,000 367,363 367,363 2,000,000
10 343,376 432,236 432,236 2,000,000 432,236 432,236 2,000,000
11 387,845 503,981 503,981 2,000,000 503,981 503,981 2,000,000
12 434,538 583,333 583,333 2,000,000 583,333 583,333 2,000,000
13 483,564 671,112 671,112 2,000,000 671,112 671,112 2,000,000
14 535,043 768,239 768,239 2,000,000 768,239 768,239 2,000,000
15 589,095 875,739 875,739 2,000,000 875,739 875,739 2,000,000
16 645,850 995,432 995,432 2,000,000 994,755 994,755 2,000,000
17 705,442 1,128,083 1,128,083 2,000,000 1,126,575 1,126,575 2,000,000
18 768,014 1,275,133 1,275,133 2,000,000 1,272,647 1,272,647 2,000,000
19 833,715 1,438,198 1,438,198 2,000,000 1,434,617 1,434,617 2,000,000
20 902,701 1,619,113 1,619,113 2,000,000 1,614,381 1,614,381 2,000,000
25 1,302,950 2,862,362 2,862,362 3,320,339 (3) 2,847,282 2,847,282 3,302,847 (3)
30 1,813,781 4,932,632 4,932,632 5,277,917 (3) 4,890,204 4,890,204 5,232,519 (3)
35 2,465,744 8,381,689 8,381,689 8,800,773 (3) 8,278,723 8,278,723 8,692,659 (3)
40 3,297,834 14,056,990 14,056,990 14,759,839 (3) 13,782,111 13,782,111 14,471,216 (3)
45 4,359,814 23,252,002 23,252,002 24,414,602 (3) 22,487,947 22,487,947 23,612,344 (3)
50 5,715,200 38,427,397 38,427,397 38,811,671 (3) 36,737,613 36,737,613 37,104,989 (3)
55 7,445,054 64,481,585 64,481,585 64,481,585 (3) 61,653,169 61,653,169 61,653,169 (3)
</TABLE>
__________________
(1) Assumes a $26,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-19
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option I; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 12% (10.43% net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1): $26,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
------------------------------------------ --------------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 26,753 25,453 2,000,000 26,753 25,453 2,000,000
2 55,965 56,250 55,210 2,000,000 56,250 55,210 2,000,000
3 86,063 88,770 87,990 2,000,000 88,770 87,990 2,000,000
4 117,666 124,617 124,097 2,000,000 124,617 124,097 2,000,000
5 150,850 164,129 163,869 2,000,000 164,129 163,869 2,000,000
6 185,692 207,677 207,677 2,000,000 207,677 207,677 2,000,000
7 222,277 255,667 255,667 2,000,000 255,667 255,667 2,000,000
8 260,691 308,704 308,704 2,000,000 308,704 308,704 2,000,000
9 301,025 367,363 367,363 2,000,000 367,363 367,363 2,000,000
10 343,376 432,236 432,236 2,000,000 432,236 432,236 2,000,000
11 387,845 503,981 503,981 2,000,000 503,981 503,981 2,000,000
12 434,538 583,333 583,333 2,000,000 583,333 583,333 2,000,000
13 483,564 671,112 671,112 2,000,000 671,112 671,112 2,000,000
14 535,043 768,217 768,217 2,097,232 (3) 768,217 768,217 2,097,232 (3)
15 589,095 875,456 875,456 2,302,449 (3) 875,456 875,456 2,302,449 (3)
16 645,850 994,681 994,681 2,526,490 (3) 993,757 993,757 2,524,143 (3)
17 705,442 1,126,464 1,126,464 2,748,573 (3) 1,124,202 1,124,202 2,743,054 (3)
18 768,014 1,272,042 1,272,042 3,002,018 (3) 1,267,877 1,267,877 2,992,189 (3)
19 833,715 1,432,801 1,432,801 3,252,458 (3) 1,426,000 1,426,000 3,237,021 (3)
20 902,701 1,610,216 1,610,216 3,526,374 (3) 1,599,808 1,599,808 3,503,579 (3)
25 1,302,950 2,810,509 2,810,509 5,199,441 (3) 2,754,828 2,754,828 5,096,431 (3)
30 1,813,781 4,741,214 4,741,214 7,538,530 (3) 4,541,445 4,541,445 7,220,897 (3)
35 2,465,744 7,773,350 7,773,350 10,882,690 (3) 7,175,286 7,175,286 10,045,401 (3)
40 3,297,834 12,398,778 12,398,778 15,622,460 (3) 10,914,576 10,914,576 13,752,366 (3)
45 4,359,814 19,298,808 19,298,808 22,772,593 (3) 16,021,458 16,021,458 18,905,320 (3)
50 5,715,200 29,715,602 29,715,602 32,984,318 (3) 23,213,160 23,213,160 25,766,608 (3)
55 7,445,054 46,856,204 46,856,204 48,730,452 (3) 33,325,613 33,325,613 34,658,637 (3)
</TABLE>
__________________
(1) Assumes a $26,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-20
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option II; Guideline Premium Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 0% (-1.57% net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1): $26,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
---------------------------------------- -----------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 23,845 22,545 2,023,845 23,845 22,545 2,023,845
2 55,965 47,270 46,230 2,047,270 47,270 46,230 2,047,270
3 86,063 70,274 69,494 2,070,274 70,274 69,494 2,070,274
4 117,666 92,850 92,330 2,092,850 92,850 92,330 2,092,850
5 150,850 114,993 114,733 2,114,993 114,993 114,733 2,114,993
6 185,692 136,694 136,694 2,136,694 136,694 136,694 2,136,694
7 222,277 157,938 157,938 2,157,938 157,938 157,938 2,157,938
8 260,691 178,708 178,708 2,178,708 178,708 178,708 2,178,708
9 301,025 198,979 198,979 2,198,979 198,979 198,979 2,198,979
10 343,376 218,724 218,724 2,218,724 218,724 218,724 2,218,724
11 387,845 237,908 237,908 2,237,908 237,908 237,908 2,237,908
12 434,538 256,568 256,568 2,256,568 256,568 256,568 2,256,568
13 483,564 274,663 274,663 2,274,663 274,663 274,663 2,274,663
14 535,043 292,146 292,146 2,292,146 292,146 292,146 2,292,146
15 589,095 308,953 308,953 2,308,953 308,953 308,953 2,308,953
16 645,850 326,207 326,207 2,326,207 325,004 325,004 2,325,004
17 705,442 342,910 342,910 2,342,910 340,195 340,195 2,340,195
18 768,014 358,987 358,987 2,358,987 354,383 354,383 2,354,383
19 833,715 374,345 374,345 2,374,345 367,383 367,383 2,367,383
20 902,701 388,877 388,877 2,388,877 378,975 378,975 2,378,975
25 1,302,950 445,789 445,789 2,445,789 407,539 407,539 2,407,539
30 1,813,781 456,472 456,472 2,456,472 350,148 350,148 2,350,148
35 2,465,744 365,708 365,708 2,365,708 101,666 101,666 2,101,666
40 3,297,834 62,112 62,112 2,062,112 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
__________________
(1) Assumes a $26,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
C-21
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option II; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return 0% (-1.57% net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1) $26,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
----------------------------------------- -----------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 23,845 22,545 2,023,845 23,845 22,545 2,023,845
2 55,965 47,270 46,230 2,047,270 47,270 46,230 2,047,270
3 86,063 70,274 69,494 2,070,274 70,274 69,494 2,070,274
4 117,666 92,850 92,330 2,092,850 92,850 92,330 2,092,850
5 150,850 114,993 114,733 2,114,993 114,993 114,733 2,114,993
6 185,692 136,694 136,694 2,136,694 136,694 136,694 2,136,694
7 222,277 157,938 157,938 2,157,938 157,938 157,938 2,157,938
8 260,691 178,708 178,708 2,178,708 178,708 178,708 2,178,708
9 301,025 198,979 198,979 2,198,979 198,979 198,979 2,198,979
10 343,376 218,724 218,724 2,218,724 218,724 218,724 2,218,724
11 387,845 237,908 237,908 2,237,908 237,908 237,908 2,237,908
12 434,538 256,568 256,568 2,256,568 256,568 256,568 2,256,568
13 483,564 274,663 274,663 2,274,663 274,663 274,663 2,274,663
14 535,043 292,146 292,146 2,292,146 292,146 292,146 2,292,146
15 589,095 308,953 308,953 2,308,953 308,953 308,953 2,308,953
16 645,850 326,207 326,207 2,326,207 325,004 325,004 2,325,004
17 705,442 342,910 342,910 2,342,910 340,195 340,195 2,340,195
18 768,014 358,987 358,987 2,358,987 354,383 354,383 2,354,383
19 833,715 374,345 374,345 2,374,345 367,383 367,383 2,367,383
20 902,701 388,877 388,877 2,388,877 378,975 378,975 2,378,975
25 1,302,950 445,789 445,789 2,445,789 407,539 407,539 2,407,539
30 1,813,781 456,472 456,472 2,456,472 350,148 350,148 2,350,148
35 2,465,744 365,708 365,708 2,365,708 101,666 101,666 2,101,666
40 3,297,834 62,112 62,112 2,062,112 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
__________________
(1) Assumes a $26,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-22
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<CAPTION>
Death Benefit Option II; Guideline Premium Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 6% (4.43% net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1) $26,000
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
------------------------------------------- ----------------------------------------
END ACCUMULATED
0F AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 25,299 23,999 2,025,299 25,299 23,999 2,025,299
2 55,965 51,672 50,632 2,051,672 51,672 50,632 2,051,672
3 86,063 79,158 78,378 2,079,158 79,158 78,378 2,079,158
4 117,666 107,794 107,274 2,107,794 107,794 107,274 2,107,794
5 150,850 137,616 137,356 2,137,616 137,616 137,356 2,137,616
6 185,692 168,662 168,662 2,168,662 168,662 168,662 2,168,662
7 222,277 200,965 200,965 2,200,965 200,965 200,965 2,200,965
8 260,691 234,553 234,553 2,234,553 234,553 234,553 2,234,553
9 301,025 269,516 269,516 2,269,516 269,516 269,516 2,269,516
10 343,376 305,956 305,956 2,305,956 305,956 305,956 2,305,956
11 387,845 343,900 343,900 2,343,900 343,900 343,900 2,343,900
12 434,538 383,373 383,373 2,383,373 383,373 383,373 2,383,373
13 483,564 424,398 424,398 2,424,398 424,398 424,398 2,424,398
14 535,043 466,996 466,996 2,466,996 466,996 466,996 2,466,996
15 589,095 511,171 511,171 2,511,171 511,171 511,171 2,511,171
16 645,850 558,147 558,147 2,558,147 556,905 556,905 2,556,905
17 705,442 607,038 607,038 2,607,038 604,161 604,161 2,604,161
18 768,014 657,851 657,851 2,657,851 652,853 652,853 2,652,853
19 833,715 710,577 710,577 2,710,577 702,846 702,846 2,702,846
20 902,701 765,187 765,187 2,765,187 753,965 753,965 2,753,965
25 1,302,950 1,065,875 1,065,875 3,065,875 1,018,746 1,018,746 3,018,746
30 1,813,781 1,397,752 1,397,752 3,397,752 1,258,066 1,258,066 3,258,066
35 2,465,744 1,703,264 1,703,264 3,703,264 1,338,877 1,338,877 3,338,877
40 3,297,834 1,840,765 1,840,765 3,840,765 1,017,466 1,017,466 3,017,466
45 4,359,814 1,573,886 1,573,886 3,573,886 0 0 0
50 5,715,200 609,277 609,277 2,609,277 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
_____________________
(1) Assumes a $26,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-23
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<CAPTION>
Death Benefit Option II; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 6% (4.43% net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1) $26,000
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
----------------------------------------- -------------------------------------------
END ACCUMULATED
0F AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 25,299 23,999 2,025,299 25,299 23,999 2,025,299
2 55,965 51,672 50,632 2,051,672 51,672 50,632 2,051,672
3 86,063 79,158 78,378 2,079,158 79,158 78,378 2,079,158
4 117,666 107,794 107,274 2,107,794 107,794 107,274 2,107,794
5 150,850 137,616 137,356 2,137,616 137,616 137,356 2,137,616
6 185,692 168,662 168,662 2,168,662 168,662 168,662 2,168,662
7 222,277 200,965 200,965 2,200,965 200,965 200,965 2,200,965
8 260,691 234,553 234,553 2,234,553 234,553 234,553 2,234,553
9 301,025 269,516 269,516 2,269,516 269,516 269,516 2,269,516
10 343,376 305,956 305,956 2,305,956 305,956 305,956 2,305,956
11 387,845 343,900 343,900 2,343,900 343,900 343,900 2,343,900
12 434,538 383,373 383,373 2,383,373 383,373 383,373 2,383,373
13 483,564 424,398 424,398 2,424,398 424,398 424,398 2,424,398
14 535,043 466,996 466,996 2,466,996 466,996 466,996 2,466,996
15 589,095 511,171 511,171 2,511,171 511,171 511,171 2,511,171
16 645,850 558,147 558,147 2,558,147 556,905 556,905 2,556,905
17 705,442 607,038 607,038 2,607,038 604,161 604,161 2,604,161
18 768,014 657,851 657,851 2,657,851 652,853 652,853 2,652,853
19 833,715 710,577 710,577 2,710,577 702,846 702,846 2,702,846
20 902,701 765,187 765,187 2,765,187 753,965 753,965 2,753,965
25 1,302,950 1,065,875 1,065,875 3,065,875 1,018,746 1,018,746 3,018,746
30 1,813,781 1,397,752 1,397,752 3,397,752 1,258,066 1,258,066 3,258,066
35 2,465,744 1,703,264 1,703,264 3,703,264 1,338,877 1,338,877 3,338,877
40 3,297,834 1,840,765 1,840,765 3,840,765 1,017,466 1,017,466 3,017,466
45 4,359,814 1,573,886 1,573,886 3,573,886 0 0 0
50 5,715,200 609,277 609,277 2,609,277 0 0 0
55 0 0 0 0 0 0 0
</TABLE>
_____________________
(1) Assumes a $26,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-24
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C>
Death Benefit Option II; Guideline Premium Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 12% (10.34% net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1): $26,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
---------------------------------------- ---------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- --------- -------- -------- ---------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 26,753 25,453 2,026,753 26,753 25,453 2,026,753
2 55,965 56,248 55,208 2,056,248 56,248 55,208 2,056,248
3 86,063 88,762 87,982 2,088,762 88,762 87,982 2,088,762
4 117,666 124,597 124,077 2,124,597 124,597 124,077 2,124,597
5 150,850 164,086 163,826 2,164,086 164,086 163,826 2,164,086
6 185,692 207,592 207,592 2,207,592 207,592 207,592 2,207,592
7 222,277 255,513 255,513 2,255,513 255,513 255,513 2,255,513
8 260,691 308,438 308,438 2,308,438 308,438 308,438 2,308,438
9 301,025 366,922 366,922 2,366,922 366,922 366,922 2,366,922
10 343,376 431,531 431,531 2,431,531 431,531 431,531 2,431,531
11 387,845 502,884 502,884 2,502,884 502,884 502,884 2,502,884
12 434,538 581,663 581,663 2,581,663 581,663 581,663 2,581,663
13 483,564 668,622 668,622 2,668,622 668,622 668,622 2,668,622
14 535,043 764,593 764,593 2,764,593 764,593 764,593 2,764,593
15 589,095 870,478 870,478 2,870,478 870,478 870,478 2,870,478
16 645,850 988,539 988,539 2,988,539 987,359 987,259 2,987,259
17 705,442 1,119,041 1,119,041 3,119,041 1,116,000 1,116,000 3,116,000
18 768,014 1,623,249 1,263,249 3,263,249 1,257,836 1,257,836 3,257,836
19 833,715 1,422,543 1,422,543 3,422,543 1,413,977 1,413,977 3,413,977
20 902,701 1,598,437 1,598,437 3,598,437 1,585,731 1,585,731 3,585,731
25 1,302,950 2,792,963 2,792,963 4,792,963 2,734,309 2,734,309 4,734,309
30 1,813,781 4,736,891 4,736,881 6,736,881 4,547,956 4,547,956 6,547,956
35 2,465,744 7,861,073 7,861,073 9,861,073 7,331,978 7,331,978 9,331,978
40 3,297,834 12,810,199 12,810,199 14,810,199 11,515,490 11,515,490 13,515,490
45 4,359,814 20,604,450 20,604,450 22,604,450 17,689,409 17,689,409 19,689,409
50 5,715,200 32,973,206 32,973,206 34,973,206 26,900,908 26,900,908 28,900,908
55 7,445,054 52,927,477 52,927,477 54,927,477 38,626,447 38,626,447 40,626,447
</TABLE>
__________________
(1) Assumes a $26,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OR RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FORM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-25
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Advisor II Joint And Last Survivor
Flexible Premium Variable Life Insurance Policy
<TABLE>
<S> <C> <C>
Death Benefit Option II; Cash Value Accumulation Test Assumed Hypothetical Gross
Male Non-Smoker Issue Age 45 Annual Rate of Return: 12% (10.43% net)
Female Non-Smoker Issue Age 45
$2,000,000 Initial Specified Amount Assumed Annual Premium (1): $26,000
</TABLE>
<TABLE>
<CAPTION>
PREMIUMS Assuming Current Costs Assuming Guaranteed Costs
----------------------------------------- ----------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 27,300 26,753 25,453 2,026,753 26,753 25,453 2,026,753
2 55,965 56,248 55,208 2,056,248 56,248 55,208 2,056,248
3 86,063 88,762 87,982 2,088,762 88,762 87,982 2,088,762
4 117,666 124,567 124,077 2,124,597 124,597 124,077 2,124,597
5 150,850 164,086 163,826 2,164,086 164,086 163,826 2,164,086
6 185,692 207,592 207,592 2,207,592 207,592 207,592 2,207,592
7 222,277 255,513 255,513 2,255,513 255,513 255,513 2,255,513
8 260,691 308,438 308,438 2,308,438 308,438 308,438 2,308,438
9 301,025 366,922 366,922 2,366,922 366,922 366,922 2,366,922
10 343,376 431,531 431,531 2,431,531 431,531 431,531 2,431,531
11 387,845 502,884 502,884 2,502,884 502,884 502,884 2,502,884
12 434,538 581,663 581,663 2,581,663 581,663 581,663 2,581,663
13 483,564 668,622 668,622 2,668,622 668,622 668,622 2,668,622
14 535,043 764,593 764,593 2,764,593 764,593 764,593 2,764,593
15 589,095 870,478 870,478 2,870,478 870,478 870,478 2,870,479
16 645,850 988,539 988,539 2,988,539 987,259 987,259 2,987,259
17 705,442 1,119,041 1,119,041 3,119,041 1,116,000 1,116,000 3,116,000
18 768,014 1,263,249 1,263,249 3,263,249 1,257,836 1,257,836 3,257,836
19 833,715 1,422,543 1,422,543 3,422,543 1,413,977 1,413,977 3,413,977
20 902,701 1,598,437 1,598,437 3,598,437 1,585,731 1,585,731 3,585,731
25 1,302,950 2,790,601 2,790,601 5,162,612 (3) 2,730,826 2,730,826 5,052,028 (3)
30 1,813,781 4,708,749 4,708,749 7,486,910 (3) 4,503,231 4,503,231 7,160,138 (3)
35 2,465,744 7,721,194 7,721,194 10,809,672 (3) 7,116,197 7,116,197 9,962,676 (3)
40 3,297,834 12,316,626 12,316,626 15,518,949 (3) 10,825,932 10,825,932 13,640,675 (3)
45 4,359.814 19,171,955 19,171,955 22,622,907 (3) 15,892,544 15,892,544 18,753,202 (3)
50 5,715,200 29,521,289 29,521,289 32,768,630 (3) 23,027,579 23,027,579 25,560,613 (3)
55 7,445,054 46,490,264 46,490,264 48,490,264 31,859,148 31,859,148 33,859,148
</TABLE>
__________________
(1) Assumes a $26,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATIVE OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
C-26
<PAGE>
PROSPECTUS
- --------------------------------------------------------------------------------
The Chubb Series Trust
----------------------
One Granite Place
Concord, New Hampshire 03301
(603) 226-5000
- --------------------------------------------------------------------
The Chubb Series Trust, is an open-end diversified management investment
company organized as a Delaware Business Trust (the "Trust"), effective as of
October 28, 1994. The Trust is composed of five separate Portfolios which
operate as distinct investment vehicles. The names and investment objectives of
the Portfolios are as follows:
The RESOLUTE TREASURY MONEY MARKET PORTFOLIO seeks to provide current income,
maintain a high level of liquidity and preserve capital.
The RESOLUTE BOND PORTFOLIO seeks to provide a high total return consistent with
moderate risk of capital and maintenance of liquidity.
The RESOLUTE EQUITY PORTFOLIO seeks to provide a high total return from a
portfolio comprised of selected equity securities.
The RESOLUTE SMALL COMPANY PORTFOLIO seeks to provide a high total return from a
portfolio of equity securities of small companies.
The RESOLUTE INTERNATIONAL EQUITY PORTFOLIO seeks to provide a high total return
from a portfolio of equity securities of foreign corporations.
This Prospectus sets forth concisely the information about the Trust and
its Portfolios that a prospective investor should know before investing. This
Prospectus should be retained for future reference. A Statement of Additional
Information for the Trust, dated August 1, 1995, has been filed with the
Securities and Exchange Commission and incorporated herein by reference. The
Statement of Additional Information is available without charge upon request
from the Trust at the address or telephone number above, or by calling
1-800-997-4499. Inquiries about the Trust should be directed to the Trust at
the same address or telephone number.
AN INVESTMENT IN THE RESOLUTE TREASURY MONEY MARKET PORTFOLIO IS NEITHER
INSURED NOR GUARANTEED BY THE UNITED STATES GOVERNMENT. INVESTMENTS IN THE
PORTFOLIOS ARE NOT BANK DEPOSITS AND ARE NOT INSURED BY, GUARANTEED BY,
OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE FDIC OR ANY BANK. AN INVESTMENT
IN ANY OF THE PORTFOLIOS IS SUBJECT TO RISK THAT MAY CAUSE THE VALUE OF THE
INVESTMENT TO FLUCTUATE, AND WHEN THE INVESTMENT IS REDEEMED, THE VALUE MAY BE
HIGHER OR LOWER THAN THE AMOUNT ORIGINALLY INVESTED BY THE INVESTOR.
1
<PAGE>
The Resolute Equity, Small Company and International Equity Portfolios
permit investments in any nation, and investments in these Portfolios involve
special considerations and risks.
- ------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- ------------------------------------------------------------------
THE DATE OF THIS PROSPECTUS IS , 1995
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Performance and Yield Information ........................................ 5
Portfolios ............................................................... 5
Investment Objectives and Policies ....................................... 6
The Resolute Treasury Money Market Portfolio ........................ 6
Investment Objective ........................................... 6
Investment Policies ............................................ 7
Risk Factors ................................................... 7
The Resolute Bond Portfolio ......................................... 7
Investment Objective ........................................... 7
Investment Policies ............................................ 7
Risk Factors ...................................................11
The Resolute Equity Portfolio .......................................11
Investment Objective ...........................................11
Investment Policies ............................................11
Risk Factors ...................................................13
The Resolute Small Company Portfolio ................................13
Investment Objective ...........................................13
Investment Policies ............................................13
Risk Factors ...................................................14
The Resolute International Equity Portfolio .........................14
Investment Objective ...........................................14
Investment Policies ............................................14
Risk Factors ...................................................16
Additional Investment Information ........................................16
Convertible Securities for the Resolute Bond,
Equity, Small Company and International
Equity Portfolios ..................................................16
When-Issued and Delayed Delivery Securities .........................16
Repurchase Agreements ...............................................17
Loans and Portfolio Securities.......................................17
Reverse Repurchase Agreements .......................................18
Mortgage Dollar Roll Transactions ...................................18
Foreign Investment Information for the Resolute
Bond, Equity, Small Company and International
Equity Portfolios ..................................................18
Foreign Currency Exchange Transactions for
the Resolute Equity, Small Company and
International Equity Portfolios ....................................20
Illiquid Investments; Privately Placed and Other
Unregistered Securities ............................................22
Futures and Options Transactions for the Resolute
Bond, Equity, Small Company and International
Equity Portfolios ..................................................22
Money Market Instruments for the Resolute Equity,
Small Company and International Equity Portfolios ..................22
Investment Restrictions ..................................................23
Management of the Trust and Portfolios....................................23
Capital Shares ...........................................................26
Taxes and Dividends ......................................................27
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
Offering and Redemption of Shares ........................................28
Other Information ........................................................30
Appendix .................................................................31
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN IN ANY STATE IN WHICH SUCH
OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTIONS WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THE PROSPECTUS.
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables include selected unaudited data for a share of capital
stock outstanding for each fund through out the period indicated and other
performance information derived from the unaudited financial statements. The
related financial statements are included in the Statement of Additional
Information.
For a share outstanding for the semiannual period ended June 30, 1995:
CHUBB SERIES TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
from January 3, 1995 (Commencement of Operations) to June 30, 1995
<TABLE>
<CAPTION>
Resolute
Treasury Resolute Resolute
Money Resolute Resolute Small International
Market Bond Equity Company Equity
Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period........................................... $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
Income From Investment
Operations
Net investment income............................ 0.22 0.31 0.04 0.06 0.06
Net gains and losses
on securities (both
realized and unrealized)....................... 0.03 0.69 1.90 1.70 0.23
----------- ----------- ----------- ----------- -----------
Total from investment
operations..................................... 0.25 1.00 1.94 1.76 0.29
Net asset value, end of period..................... $ 10.25 $ 11.00 $ 11.94 $ 11.76 $ 10.29
=========== =========== =========== =========== ===========
Total Return (A)................................... 2.49% 10.03% 19.38% 17.58% 2.29%
Ratios to Average Net Assets:
(Annualized)
Expenses......................................... 0.60% 0.75% 0.90% 1.15% 1.20%
Net investment income............................ 5.03% 6.43% 1.88% 1.14% 2.05%
Portfolio Turnover Rate............................ N/A 179.85% 27.68% 45.93% 49.98%
Net Assets, At End of Period....................... $ 1,174,320 $ 1,254,740 $ 3,709,454 $ 2,450,739 $ 3,718,733
</TABLE>
(A) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of account fees and charges. Investment returns
and principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost. Total returns for periods of less than
one year have not been annualized.
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<PAGE>
PERFORMANCE AND YIELD INFORMATION
From time to time the Trust may advertise the yield and/or the average
annual total return of some or all of its five investment portfolios. These
figures are based on historical earnings and are not intended to indicate future
performance. Shares of the portfolios are presently offered only to
corresponding divisions of separate accounts established by Chubb Life Insurance
Company of America ("Chubb Life"), or its affiliated insurance companies to fund
flexible premium life insurance policies. None of these performance figures
reflect fees and charges imposed under such flexible premium life insurance
policies, which fees and charges will reduce the yield and total return to
policyowners; therefore, these performance figures may be of limited use for
comparative purposes.
The Resolute Treasury Money Market Portfolio's yield quotations represent
the Portfolio's investment income, less expenses, expressed as a percentage of
assets on an annualized basis for a seven-day period. The yield is expressed as
both a simple annualized yield and a compounded effective yield. The yield for
the non-money market portfolios is calculated by dividing the portfolio's net
investment income per share during a recent 30-day period by the maximum
offering price per share of that Portfolio (which is the net asset value of that
Portfolio) on the last day of the period.
The average annual total return quotations of the non-money market
portfolios are determined by computing the average annual percentage change in
value of a $100,000 investment, made at the maximum public offering price (which
is net asset value) for certain specified periods. This computation assumes
reinvestment of all dividends and distributions.
PORTFOLIOS
----------
The Trust currently consists of five investment portfolios: the Resolute
Treasury Money Market Portfolio, the Resolute Bond Portfolio, the Resolute
Equity Portfolio, the Resolute Small Company Portfolio, and the Resolute
International Equity Portfolio (the "Portfolios").
The separate accounts established by Chubb Life or its affiliated insurance
companies are used for the purpose of funding Flexible Premium Variable Life
Insurance Policies (the "Policies") issued by Chubb Life, its affiliated
insurance companies and their successors and assigns. The owner of a Policy may
allocate among the Portfolios the amounts available for investment under the
Policy. Chubb Life is a wholly-owned subsidiary of The Chubb Corporation, a New
Jersey corporation.
In the future, subject to receipt of an exemptive order by the Securities
and Exchange Commission, the Trust may sell its shares to other separate
accounts, funding variable annuities and varaiable life policies, established by
Chubb Life, its successors or assigns, or by other insurance companies with
which Chubb Life is affiliated. The Trust may also add or delete Portfolios.
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<PAGE>
Shares of each Portfolio are both offered and redeemed at their net asset
value without the addition of any sales load or redemption charge. See
"OFFERING AND REDEMPTION OF SHARES."
The investment manager to the Trust is Chubb Investment Advisory
Corporation ("Chubb Investment Advisory" or the "Investment Manager"), a wholly-
owned subsidiary of Chubb Life. Chubb Investment Advisory and the Trust have
contracted with Morgan Guaranty Trust Company of New York ("Morgan" or the
"Sub-Adviser") to act as sub-investment adviser to the Portfolios. Morgan is a
wholly-owned subsidiary of J.P. Morgan and Co. Incorporated.
INVESTMENT OBJECTIVES AND POLICIES
----------------------------------
The investment objectives and policies of each Portfolio are described
below. The investment objectives of a Portfolio, and certain investment
restrictions discussed in the Statement of Additional Information, may be
changed only with the approval of the shareholders of each Portfolio that are
affected by such change. The investment policies of a Portfolio, used in
furtherance of the Portfolio's objectives, may be changed by the Trust's Board
of Trustees (the "Board") without the approval of the Portfolio's shareholders.
Because investment involves both opportunities for gain and risks of loss,
no assurance can be given that the Portfolios will achieve their objectives.
The difference in objectives and policies among the various Portfolios can be
expected to affect each Portfolio's investment return as well as the degree of
market and financial risks to which each Portfolio is subject. Prospective
purchasers of Policies should carefully review the objectives and policies of
the Portfolios and consider their ability to assume the risks involved before
allocating amounts thereunder to particular Divisions.
THE RESOLUTE TREASURY MONEY MARKET PORTFOLIO
INVESTMENT OBJECTIVE: The Resolute Treasury Money Market Portfolio's investment
objective is to provide current income, maintain a high level of liquidity, and
preserve capital.
The Portfolio seeks to achieve its investment objective by investing in
direct obligations of the United States (U.S.) Treasury and engaging in
repurchase agreement transactions with respect to those obligations. The
Portfolio maintains a dollar- weighted average portfolio maturity of not more
than 90 days and invests in the following securities which have effective
maturities of not more than thirteen months.
INVESTMENT POLICIES: TREASURY SECURITIES. The Portfolio will invest in
Treasury Bills, Notes, and Bonds, all of which are backed as to principal and
interest payments by the full faith and credit of the United States of America
("Treasury Securities"). Each such obligation must have a remaining maturity of
thirteen months or less at the time of purchase by the Portfolio. Treasury
Bills have initial maturities of one year or less; Treasury Notes
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<PAGE>
have initial maturities of one to ten years; and Treasury Bonds generally have
initial maturities of greater than ten years. The Portfolio will not invest in
obligations of U.S. Government Agencies ("U.S. Government Agency Obligations").
The Portfolio also may purchase Treasury Securities on a when-issued or
delayed delivery basis, loan its portfolio securities and may engage in
repurchase and reverse repurchase agreement transactions involving Treasury
Securities. For a discussion of these transactions, see "ADDITIONAL INVESTMENT
INFORMATION."
RISK FACTORS: Obligations of the U.S. Treasury are guaranteed by the U.S.
Government as to the timely payment of principal and interest, but the market
value of such obligations is not guaranteed and may rise and fall in response to
changes in interest rates. Neither the shares of the Trust nor the interests in
the Portfolio are guaranteed or insured by the U.S. Government.
THE RESOLUTE BOND PORTFOLIO
INVESTMENT OBJECTIVE: The Resolute Bond Portfolio's investment objective is to
provide a high total return consistent with moderate risk of capital and
maintenance of liquidity. Total return will consist of income plus realized and
unrealized capital gains and losses. Although the net asset value of the
Portfolio will fluctuate, the Portfolio attempts to preserve the value of its
investments to the extent consistent with its objective.
The Resolute Bond Portfolio is designed for investors who seek a total
return over time that is higher than that generally available from a portfolio
of short-term obligations while acknowledging the greater price fluctuation of
longer-term instruments.
INVESTMENT POLICIES: The Sub-Adviser actively manages the Portfolio's duration,
the allocation of securities across market sectors, and the selection of
specific securities within sectors. Based on fundamental, economic and capital
markets research, the Sub-Adviser adjusts the duration of the Portfolio in light
of market conditions and the Sub-Adviser's interest rate outlook. For example,
if interest rates are expected to fall, the duration may be lengthened to take
advantage of the expected associated increase in bond prices. The Sub-Adviser
also actively allocates the Portfolio's assets among the broad sectors of the
fixed income market including, but not limited to, U.S. Government Agency
Obligations, corporate securities, private placements, asset-backed and
mortgage-related securities. Specific securities which the Sub-Adviser believes
to be undervalued are selected for purchase within the sectors using advanced
quantitative tools, analysis of credit risk, the expertise of a dedicated
trading desk, and the judgment of fixed income portfolio managers and analysts.
Under normal market conditions, the Sub-Adviser intends to keep the Portfolio
essentially fully invested with at least 65% of the Portfolio's assets invested
in bonds.
Duration is a measure of the weighted average maturity of the bonds held in
the Portfolio and can be used as a measure of the sensitivity of the Portfolio's
market value to changes in interest rates. Under normal market
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<PAGE>
conditions the Portfolio's duration will range between one year shorter and one
year longer than the duration of the U.S. investment grade fixed income
universe. However, the maturities of the individual securities in the Portfolio
may vary widely.
The Sub-Adviser intends to manage the portfolio actively in pursuit of its
investment objective. Portfolio transactions are undertaken principally to
accomplish the Portfolio's objective in relation to expected movements in the
general level of interest rates, but the Portfolio may also engage in short-term
trading consistent with its objective. To the extent the Portfolio engages in
short term trading, it may incur increased transaction costs.
CORPORATE BONDS, ETC. The Portfolio may invest in a broad range of U.S.
dollar-denominated debt securities of domestic and foreign issuers. These
include debt securities of various types and maturities, e.g. debentures, notes,
mortgage securities, equipment trust certificates and other collateralized
securities and zero coupon securities. Collateralized securities are backed by
a pool of assets such as loans or receivables which generate cash flow to cover
the payments due on the securities. Collateralized securities are subject to
certain risks, including a decline in the value of the collateral backing the
security, failure of the collateral to generate the anticipated cash flow or in
certain cases more rapid prepayment because of events affecting the collateral,
such as accelerated prepayment of mortgages or other loans backing these
securities or destruction of equipment subject to equipment trust certificates.
In the event of any such prepayment the Portfolio will be required to reinvest
the proceeds of prepayments at interest rates prevailing at the time of
reinvestment, which may be lower than at time of purchase. In addition, the
value of zero coupon securities which do not pay interest is more volatile than
that of interest bearing debt securities with the same maturity. The Portfolio
does not intend to invest in common stock but may invest to a limited extent in
convertible debt or preferred stock. The Portfolio does not expect to invest
more than 25% of its assets in securities of foreign issuers. See "ADDITIONAL
INVESTMENT INFORMATION" for further information on foreign investment and
convertible securities.
GOVERNMENT OBLIGATIONS, ETC. The Portfolio may invest in obligations
issued or guaranteed by the U.S. Government and backed by the full faith and
credit of the U.S. Government. These securities include Treasury securities,
obligations of the Government National Mortgage Association ("GNMA"), the
Farmers Home Administration and the Export Import Bank. GNMA Certificates are
mortgage-backed securities which evidence an undivided interest in mortgage
pools. These securities are subject to more rapid repayment than their stated
maturity would indicate because prepayments of principal on mortgages in the
pool are passed through to the holder of the securities. During periods of
declining interest rates, prepayments of mortgages in the pool can be expected
to increase. The pass-through of these prepayments would have the effect of
reducing the Portfolio's positions in these securities and requiring the
Portfolio to reinvest the prepayments at interest rates prevailing at the time
of reinvestment. The Portfolio may also invest in obligations issued or
guaranteed by U.S. Government agencies
9
<PAGE>
or instrumentalities where the Portfolio must look principally to the issuing or
guaranteeing agency for ultimate repayment; some examples of agencies or
instrumentalities issuing these obligations are the Federal Farm Credit System,
the Federal Home Loan Banks and the Federal National Mortgage Association.
Although these governmental issuers are responsible for payments on their
obligations, they do not guarantee their market value. The Portfolio may also
invest in municipal obligations which may be general obligations of the issuer
or payable only from specific revenue sources. However, the Portfolio will
invest only in municipal obligations that have been issued on a taxable basis or
have an attractive yield excluding tax considerations. In addition, the
Portfolio may invest in debt securities of foreign governments and governmental
entities denominated, in all cases, in U.S. dollars. See "ADDITIONAL INVESTMENT
INFORMATION" for further information on foreign investments.
MONEY MARKET INSTRUMENTS. The Resolute Bond Portfolio may invest in
various types of money market instruments subject to the quality requirements of
the Resolute Bond Portfolio. See "Quality Information" below and "MONEY MARKET
INSTRUMENTS" in the Statement of Additional Information. Under normal
circumstances, the Portfolio will purchase these securities to invest temporary
cash balances or to maintain liquidity to meet redemptions. However, the
Portfolio may also invest in money market instruments as a temporary defensive
measure taken during, or in anticipation of, adverse market conditions.
United States Government Obligations. See "Government Obligations, etc."
above.
Bank Obligations. The Portfolio may invest in high quality U.S. dollar-
denominated negotiable certificates of deposit, time deposits and bankers'
acceptances of (i) banks, savings and loan associations and savings banks which
have more than $2 billion in total assets and are organized under U.S. federal
or state law, (ii) foreign branches of these banks or of foreign banks of
equivalent size (Euros) and (iii) U.S. branches of foreign banks of equivalent
size (Yankees). The Portfolio may also invest in obligations of international
banking institutions designated or supported by national governments to promote
economic reconstruction, development or trade between nations (e.g., the
European Investment Bank, the Inter-American Development Bank, or the World
Bank). These obligations may be supported by appropriated but unpaid
commitments of their member countries, and there is no assurance these
commitments will be undertaken or met in the future.
Commercial Paper; Bonds. The Portfolio may invest in high quality
commercial paper and corporate bonds issued by U.S. corporations. The Portfolio
may also invest in bonds and commercial paper of foreign issuers if the
obligation is U.S. dollar-denominated and is not subject to foreign withholding
tax.
Asset-Backed Securities. The Portfolio may also invest in securities
generally referred to as asset-backed securities, which directly or indirectly
represent a participation interest in, or are secured by and payable from, a
stream of payments generated by particular assets such as
10
<PAGE>
motor vehicle or credit card receivables. Asset-backed securities provide
periodic payments that generally consist of both interest and principal
payments. Consequently, the life of an asset-backed security varies with the
prepayment experience of the underlying debt instruments.
QUALITY INFORMATION. It is a current policy of the Resolute Bond Portfolio
that under normal circumstances at least 65% of its total assets will consist of
securities that are rated at least A by Moody's Investor Services ("Moody's") or
Standard & Poor's Corporation ("Standard & Poors") or that are unrated and in
the Sub-Adviser's opinion are of comparable quality. In the case of 30% of the
Portfolio's investments, the Portfolio may purchase debt securities that are
rated Baa or better by Moody's or BBB or better by Standard & Poor's or are
unrated and in the Sub-Adviser's opinion are of comparable quality. The
remaining 5% or less of the Portfolio's assets may be invested in debt
securities rated Ba or better by Moody's or BB or better by Standard & Poor's or
are unrated and in the Sub-Adviser's opinion are of comparable quality.
Securities rated Baa by Moody's or BBB by Standard & Poor's are considered
investment grade, but have some speculative characteristics. Securities rated
Ba by Moody's or BB by Standard & Poor's are below investment grade (commonly
known as "junk bonds") and considered to be speculative with regard to payment
of interest and principal. These standards must be satisfied at the time an
investment is made. If the quality of the investment later declines below the
quality required for purchase, the Portfolio may continue to hold the
investment. See "APPENDIX A" in the Statement of Additional Information for
more detailed information on these ratings, and "High Yield/High Risk Bonds" in
the Statement of Additional Information for a discussion of risks associated
with the 5% or less of total assets that may be invested in junk bonds.
The Portfolio may also purchase obligations on a when-issued or delayed
delivery basis, enter into repurchase and reverse repurchase agreements, loan
its portfolio securities, purchase certain privately placed securities and may
use options on securities and securities indexes, futures contracts and options
on futures contracts for hedging and risk management purposes. For a discussion
of these investments and investment techniques, see "ADDITIONAL INVESTMENT
INFORMATION."
RISK FACTORS: If the Resolute Bond Portfolio disposes of an obligation prior to
maturity, it may realize a loss or a gain. An increase in interest rates will
generally reduce the value of portfolio investments, and a decline in interest
rates will generally increase the value of portfolio investments. As a result,
the level of income under such circumstances may vary. In addition, portfolio
investments (other than Treasury securities) are dependent upon the ability of
the issuer to make scheduled payments of principal and income.
THE RESOLUTE EQUITY PORTFOLIO
INVESTMENT OBJECTIVE: The Resolute Equity Portfolio's investment objective is
to provide a high total return from a portfolio comprised of selected equity
securities. Total return will consist of realized and unrealized capital gains
and losses plus income less expenses. The Portfolio invests
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<PAGE>
primarily in the common stock of large and medium-sized U.S. corporations with
market capitalizations above $1.5 billion.
The Resolute Equity Portfolio is designed for investors who want an
actively managed portfolio of selected equity securities that seeks to
outperform the S&P 500 Index.
INVESTMENT POLICIES: The Sub-Adviser seeks to enhance the Portfolio's total
return relative to that of the universe of large and medium-sized U.S.
corporations, typically represented by the S&P 500 Index, through fundamental
analysis, systematic stock valuation and disciplined portfolio construction.
Based on internal fundamental research, the Sub-Adviser uses a systematic stock
selection process to rank companies within economic sectors according to their
relative value. From the universe of securities this model shows as
undervalued, the Sub-Adviser selects stocks for the Portfolio based on a variety
of criteria including the company's managerial strength, prospects for growth
and competitive position. The Sub-Adviser may under or over-weight selected
economic sectors against the S&P 500 Index's sector weightings to seek to
enhance the Portfolio's total return or reduce the fluctuation in its market
value relative to the Index.
The Portfolio intends to manage its portfolio actively in pursuit of its
investment objective. The Portfolio does not intend to respond to short-term
market fluctuations or to acquire securities for the purpose of short-term
trading; however, it may take advantage of short-term trading opportunities that
are consistent with its objective. To the extent the Portfolio engages in short
term trading it may incur increased transaction costs.
EQUITY INVESTMENTS. During ordinary market conditions, the Sub-Adviser
intends to keep the Portfolio essentially fully invested with at least 65% of
the Portfolio's assets invested in equity securities consisting of common stocks
and other securities with equity characteristics such as preferred stocks,
warrants, rights and convertible securities. The Portfolio's primary equity
investments are the common stocks of large and medium-sized U.S. corporations
and similar securities of foreign corporations. The common stock in which the
Portfolio may invest includes the common stock of any class or series or any
similar equity interest, such as trust or limited partnership interests. These
equity investments may or may not pay dividends and may or may not carry voting
rights. The Portfolio invests in securities listed on a securities exchange or
traded in an over-the-counter market, and may invest in certain restricted or
unlisted securities.
FOREIGN INVESTMENTS. The Portfolio may invest in equity securities of
foreign corporations which may include American Depository Receipts ("ADRs").
However, the Portfolio does not expect to invest more than 30% of its assets at
the time of purchase in securities of foreign issuers, nor does it expect more
than 10% to be in securities of foreign issuers not listed on a national
securities exchange or not denominated or principally traded in U.S. dollars.
For further information on foreign investments and foreign currency exchange
transactions, see "ADDITIONAL INVESTMENT INFORMATION."
The Portfolio also may invest in securities on a when-issued or delayed
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<PAGE>
delivery basis, enter into repurchase and reverse repurchase agreements, loan
its portfolio securities, purchase certain privately placed securities and money
market instruments (see "Money Market Instruments for the Resolute Equity, Small
Company and International Equity Portfolios" for more information concerning the
types of money market instruments that the Resolute Equity Portfolio may invest
in), and may use options on securities and securities indexes, futures contracts
and options on futures contracts for hedging and risk management purposes. For a
discussion of these investments and investment techniques, see "ADDITIONAL
INVESTMENT INFORMATION."
RISK FACTORS: The foreign securities and ADRs in which the Portfolio may invest
involve special considerations and risks. See "ADDITIONAL INVESTMENT
INFORMATION" below. The prices of the types of securities usually purchased by
the Resolute Equity Portfolio will tend to fluctuate more than the prices of
securities purchased by the Resolute Treasury Money Market and Bond Portfolios.
As a result, the net asset value of the Resolute Equity Portfolio may experience
greater short-term and long-term variations than Portfolios that invest
primarily in fixed income securities.
THE RESOLUTE SMALL COMPANY PORTFOLIO
INVESTMENT OBJECTIVE: The Resolute Small Company Portfolio's investment
objective is to provide a high total return from a portfolio of equity
securities of small companies. Total return will consist of realized and
unrealized capital gains and losses plus income less expenses. The Portfolio
invests at least 65% of the value of its total assets in the common stock of
small U.S. companies primarily with market capitalizations less than $1.5
billion.
The Resolute Small Company Portfolio is designed for investors who are
willing to assume the somewhat higher risk of investing in small companies in
order to seek a higher return over time than might be expected from a portfolio
of stocks of large companies.
INVESTMENT POLICIES: The Sub-Adviser seeks to enhance the Portfolio's total
return relative to that of the U.S. small company universe. To do so, the
Sub-Adviser uses fundamental research, systematic stock valuation and a
disciplined portfolio construction process. The Sub-Adviser continually screens
the universe of small capitalization companies to identify for further analysis
those companies which exhibit favorable characteristics such as significant and
predictable cash flow and high quality management. Based on this investment
process, as well as fundamental research, the Sub-Adviser ranks these companies
within economic sectors according to their relative value. The Sub-Adviser then
selects for purchase the most attractive companies within each economic sector.
The Sub-Adviser uses a disciplined portfolio construction process to seek
to enhance returns and reduce volatility in the market value of the Portfolio
relative to that of the U.S. small company universe, typically represented by
the Russell 2500 Index. The disciplined portfolio construction process involves
continuously screening the small company
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<PAGE>
universe and consists of three basic steps: first, calculating each company's
internal rate of return ("IRR") based on projected cash flow; second, sorting
those companies within fifteen economic sectors by IRR quintile rank; third,
concentrating purchases in the top two quintiles of each sector and selling
fourth and fifth quintiles. Variance in industry weights from the Russell 2500
are minimized to ensure that stock selection is the principal source of excess
return.
The Sub-Adviser believes that under normal market conditions, the Portfolio
will have sector weightings comparable to that of the U.S. small company
universe, although it may under or over-weight selected economic sectors. In
addition, as a company moves out of the market capitalization range the small
company universe, it generally becomes a candidate for sale by the Portfolio.
The Portfolio intends to manage its investments actively to accomplish its
investment objective. Since the Portfolio has a long-term investment
perspective, it does not intend to respond to short-term market fluctuations or
to acquire securities for the purpose of short-term trading; however, it may
take advantage of short-term trading opportunities that are consistent with its
objective. To the extent the Portfolio engages in short term trading it may
incur increased transaction costs.
PERMISSIBLE INVESTMENTS. The Portfolio may invest in the same types of
securities and use the same investment techniques, subject to the same
limitations, as permitted for the Resolute Equity Portfolio.
RISK FACTORS: The risk factors discussed above in connection with the Resolute
Equity Portfolio also apply to the Resolute Small Company Portfolio. The price
of the securities purchased by the Resolute Small Company Portfolio will tend to
fluctuate more than the prices of securities purchased by the Resolute Bond and
Treasury Money Market Portfolios.
THE RESOLUTE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT OBJECTIVE: The Resolute International Equity Portfolio's investment
objective is to provide a high total return from a portfolio of equity
securities of foreign corporations. Total return will consist of realized and
unrealized capital gains and losses plus income.
The Resolute International Equity Portfolio is designed for investors with
a long-term investment horizon who want to diversify their investments by adding
international equities and take advantage of investment opportunities outside
the U.S.
INVESTMENT POLICIES: The Portfolio seeks to achieve its investment objective
through country allocation and stock valuation and selection. Based on
fundamental research, quantitative valuation techniques, and experienced
judgment, the Sub-Adviser uses a structured decision-making process to allocate
the Portfolio primarily across the developed countries of the world outside the
United States. This universe is typically represented by the Morgan Stanley
Capital International Europe, Australia and Far East ("EAFE")
14
<PAGE>
Index.
As a general matter, the Portfolio will be invested in a minimum of five
different foreign countries at all times. However, this minimum is reduced to
four when foreign country investments comprise less than 80% of the Portfolio's
net asset value; to three when less than 60% of such value; to two when less
than 40%; and to one when less than 20%.
Using a systematic stock selection process and analysts' industry
expertise, securities within each country are ranked within economic sectors
according to their relative value. Based on this valuation, the Sub-Adviser
selects the securities which appear the most attractive for the Portfolio. The
Sub-Adviser believes that under normal market conditions, economic sector
weightings generally will be similar to those of one or more relevant equity
indexes.
Finally, the Sub-Adviser actively manages currency exposure, in conjunction
with country and stock allocation, in an attempt to protect and possibly enhance
the Portfolio's market value. Through the use of forward foreign currency
exchange contracts, the Sub-Adviser will adjust the Portfolio's foreign currency
weightings to reduce its exposure to currencies deemed unattractive and, in
certain circumstances, increase exposure to currencies deemed attractive, as
market conditions warrant, based on fundamental research, technical factors, and
the judgement of a team of experienced currency managers. For further
information on foreign currency exchange transactions, see "ADDITIONAL
INVESTMENT INFORMATION."
The Portfolio intends to manage its portfolio actively in pursuit of its
investment objective. The Portfolio does not expect to trade in securities for
short-term profits; however, when circumstances warrant, securities may be sold
without regard to the length of time held. To the extent the Portfolio engages
in short term trading it may incur increased transaction costs.
EQUITY INVESTMENTS. Under normal market conditions, the Sub-Adviser
intends to keep the Portfolio essentially fully invested with at least 65% of
the value of its total assets in equity securities of foreign issuers,
consisting of common stocks and other securities with equity characteristics
such as preferred stock, warrants, rights and convertible securities which may
be held through ADRs. The Portfolio's primary equity investments are the common
stock of established companies based in developed countries outside the U.S.
Such investments will be made in at least three foreign countries. The common
stock in which the Portfolio may invest includes the common stock of any class
or series or any similar equity interest such as trust or limited partnership
interests. The Portfolio may also invest in securities of issuers located in
developing countries. See "ADDITIONAL INVESTMENT INFORMATION." The Portfolio
invests in securities listed on the foreign or domestic securities exchanges and
securities traded in foreign or domestic over-the-counter markets, and may
invest in certain restricted or unlisted securities.
The Portfolio may also invest in dollar and non-dollar denominated money
15
<PAGE>
market instruments (see "Money Market Instruments for the Resolute Equity, Small
company and International Equity Portfolios" for more information concerning the
types of money market instruments that the Resolute International Equity
Portfolio may invest in) and securities on a when-issued or delayed delivery
basis, enter into repurchase and reverse repurchase agreements, loan its
portfolio securities, purchase certain privately placed securities and enter
into certain hedging transactions, including options on equity securities,
options on foreign stock indexes and forward foreign currency exchange
contracts. For a discussion of these investments and investment techniques, see
"ADDITIONAL INVESTMENT INFORMATION."
RISK FACTORS: The risk factors discussed above in connection with the Resolute
Equity Portfolio also apply to the Resolute International Equity Portfolio. All
or a significant portion of this Portfolio may be invested in foreign securities
and ADRs, and investors should understand the special considerations and risks
related to such an investment emphasis, including foreign currency risks. See
"ADDITIONAL INVESTMENT INFORMATION."
ADDITIONAL INVESTMENT INFORMATION
---------------------------------
CONVERTIBLE SECURITIES FOR THE RESOLUTE BOND, EQUITY, SMALL COMPANY AND
INTERNATIONAL EQUITY PORTFOLIOS. The Resolute Bond, Equity, Small Company, and
International Equity Portfolios may invest in convertible securities of domestic
and, subject to each Portfolio's restrictions, foreign issuers. The convertible
securities in which the Portfolios may invest include any debt securities or
preferred stock which may be converted into common stock or which carry the
right to purchase common stock. Convertible securities entitle the holder to
exchange the securities for a specified number of shares of common stock,
usually of the same company, at specified prices within a certain period of
time.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Each of the Portfolios may
purchase securities on a when-issued or delayed delivery basis. Delivery of and
payment for these securities may take as long as a month or more after the date
of the purchase commitment. The value of these securities is subject to market
fluctuation during this period and no interest or income accrues to the
Portfolio until settlement. At the time of settlement a when-issued security
may be valued at less than its purchase price. Each Portfolio maintains with
the custodian of the Trust ("Custodian") a separate account with a segregated
portfolio of securities in an amount at least equal to these commitments. For
more information concerning the Custodian for the Trust see "INVESTMENT ADVISORY
AND OTHER SERVICES" in the Statement of Additional Information. When entering
into a when-issued or delayed delivery transaction, the Portfolio will rely on
the other party to consummate the transaction; if the other party fails to do
so, the Portfolio may be disadvantaged. It is the current policy of each
Portfolio not to enter into when-issued commitments exceeding in the aggregate
15% of the market value of the Portfolio's total assets less liabilities other
than the obligations created by these commitments.
REPURCHASE AGREEMENTS. Each of the Portfolios may engage in repurchase
agreement transactions with brokers, dealers or banks that meet the credit
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<PAGE>
guidelines established by the Trustees. The Resolute Treasury Money Market
Portfolio will only enter into repurchase agreements involving U.S. Treasury
securities. In a repurchase agreement, a Portfolio buys a security from a
seller that has agreed to repurchase it at a mutually agreed upon date and
price, reflecting the interest rate effective for the term of the agreement.
The term of these agreements is usually from overnight to one week. A
repurchase agreement may be viewed as a fully collateralized loan of money by a
Portfolio to the seller. The Portfolio always receives securities as collateral
with a market value at least equal to the purchase price plus accrued interest
and this value is maintained during the term of the agreement. If the seller
defaults and the collateral value declines, the Portfolio might incur a loss.
If bankruptcy proceedings are commenced with respect to the seller, the
Portfolio's realization upon the disposition of collateral may be delayed or
limited. Investments in certain repurchase agreements and certain other
investments which may be considered illiquid are limited. See "Illiquid
Investments; Privately Placed and Other Unregistered Securities" below.
LOANS OF PORTFOLIO SECURITIES. Subject to applicable investment restrictions,
each of the Portfolios is permitted to lend its securities. Each of the
Portfolios may lend its securities if such loans are secured continuously by
cash or equivalent collateral or by a letter of credit in favor of the Portfolio
at least equal at all times to 100% of the market value of the securities
loaned, plus accrued interest. While such securities are on loan, the borrower
will pay the Portfolio any income accruing thereon. Loans will be subject to
termination by a Portfolio in the normal settlement time, generally five
business days after notice, or by the borrower on one day's notice. Borrowed
securities must be returned when the loan is terminated. Any gain or loss in the
market price of the borrowed securities which occurs during the term of the loan
is for the account of the relevant Portfolio and its respective shareholders.
The Portfolios may pay reasonable finders' and custodial fees in connection with
a loan. In addition, the Portfolios will consider all facts and circumstances
including the creditworthiness of the borrowing financial institution, and the
Portfolios will not make any loans in excess of one year. The Portfolios will
not lend their securities to any officer, Trustee, Director, employee, or
affiliate of the Trust, or the Adviser, Sub-Adviser, Administrator or
Distributor, unless otherwise permitted by applicable law.
REVERSE REPURCHASE AGREEMENTS. Each of the Portfolios is permitted to enter
into reverse repurchase agreements. In a reverse repurchase agreement, the
Portfolio sells a security and agrees to repurchase it at a mutually agreed upon
date and price, reflecting the interest rate effective for the term of the
agreement. It may also be viewed as the borrowing of money by the Portfolio
and, therefore, is a form of leverage. Leverage may cause any gains or losses
of the Portfolio to be magnified.
MORTGAGE DOLLAR ROLL TRANSACTIONS. The Resolute Bond Portfolio may engage in
mortgage dollar roll transactions with respect to mortgage securities issued by
certain federal government agencies. In a mortgage dollar roll transaction the
Portfolio sells a mortgage backed security and simultaneously agrees to purchase
a substantially similar security on a specified date at an agreed
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<PAGE>
upon price. Compensation is derived from the difference of the sales price and
the lower price for the future repurchase as well as by the interest earned on
the reinvestment of the sales proceeds, and in some cases by a commitment fee.
FOREIGN INVESTMENT INFORMATION FOR THE RESOLUTE BOND, EQUITY, SMALL COMPANY,
AND INTERNATIONAL EQUITY PORTFOLIOS. The Resolute Bond, Equity and the Small
Company Portfolios may invest in certain securities of foreign issuers. The
Resolute International Equity Portfolio invests primarily in securities of
foreign issuers. Investment in securities of foreign issuers and in obligations
of foreign branches of domestic banks involves somewhat different investment
risks from those affecting securities of U.S. domestic issuers. There may be
limited publicly available information with respect to foreign issuers, and
foreign issuers are not generally subject to uniform accounting, auditing and
financial standards and requirements comparable to those applicable to domestic
companies. Dividends and interest paid by foreign issuers may be subject to
withholding and other foreign taxes which may decrease the net return on foreign
investments as compared to dividends and interest paid to these Portfolios by
domestic companies.
Investors should realize that the value of each Portfolio's investments in
foreign securities may be adversely affected by changes in political or social
conditions, diplomatic relations, confiscatory taxation, expropriation,
nationalization, limitation on the removal of funds or assets, or imposition of
(or change in) exchange control or tax regulations in those foreign countries.
In addition, changes in government administrations or economic or monetary
policies in the U.S. or abroad could result in appreciation or depreciation of
portfolio securities and could favorably or unfavorably affect the Portfolio's
operations. Furthermore, the economies of individual foreign nations may differ
from the U.S. economy, whether favorably or unfavorably, in areas such as growth
of gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position; it may also be more difficult
to obtain and enforce a judgment against a foreign issuer. Any foreign
investments made by the Portfolios must be made in compliance with the U.S. and
foreign currency restrictions and tax laws restricting the amounts and types of
foreign investments.
In addition, while the volume of transactions effected on foreign stock
exchanges has increased in recent years, in most cases it remains appreciably
below that of domestic security exchanges. Accordingly, a Portfolio's foreign
investments may be less liquid and their prices may be more volatile than
comparable investments in securities of the U.S. companies. Moreover, the
settlement periods for foreign securities, which are often longer than those for
securities of the U.S. issuers, may affect portfolio liquidity. In buying and
selling securities on foreign exchanges, purchasers normally pay fixed
commissions that are generally higher than the negotiated commissions charged in
the U.S. In addition, there is generally less government supervision and
regulation of securities exchanges, brokers and issuers located in foreign
countries than in the U.S.
Although the Resolute International Equity Portfolio invests primarily
18
<PAGE>
in securities of established companies based in developed countries, it may also
invest in securities of issuers in "emerging markets." Emerging markets include
any country which in the opinion of the Sub-Adviser is generally considered to
be an emerging or developing country by the international financial community.
These countries generally include every country in the world except the U.S.,
Canada, Japan, Australia, New Zealand and most countries in Western Europe.
Investments in securities of emerging markets countries entails a high degree of
risk. Investment in securities of issuers in emerging markets carry all of the
risks of investing in securities of foreign issuers outlined in this section to
a heightened degree. These heightened risks include (i) greater risks of
expropriation, confiscatory taxation, nationalization, and less social,
political and economic stability; (ii) the small current size of the markets for
securities of emerging markets issuers and the currently low or non-existent
volume of trading, resulting in lack of liquidity and in price volatility; (iii)
certain national policies which may restrict the Portfolio's investment
opportunities including restrictions on investing in issuers or industries
deemed sensitive to relevant national interests; and (iv) the absence of
developed legal structures governing private or foreign investment and private
property.
Each of the Portfolios, other than the Resolute Treasury Money Market
Portfolio, may invest in securities of foreign issuers directly or in the form
of ADRs, European Depository Receipts ("EDRs") or other similar securities of
foreign issuers. These securities may not necessarily be denominated in the same
currency as the securities they represent. ADRs are receipts typically issued
by a U.S. bank or trust company evidencing ownership of the underlying foreign
securities. Certain such institutions issuing ADRs may not be sponsored by the
issuer of the underlying foreign securities. A non-sponsored depository may not
provide the same shareholder information that a sponsored depository is required
to provide under its contractual arrangements with the issuer of the underlying
foreign securities. EDRs are receipts issued by a European financial institution
evidencing a similar arrangement. Generally, ADRs, in registered form, are
designed for use in the U.S. securities markets, and EDRs, in bearer form, are
designed for use in European securities markets.
In the case of the Resolute Equity, Small Company and International Equity
Portfolios, since investments in foreign securities involve foreign currencies,
the value of their assets as measured in U.S. dollars may be affected favorably
or unfavorably by changes in currency rates and in exchange control regulations,
including currency blockage. See "Foreign Currency Exchange Transactions for
the Resolute Equity, Small Company and International Equity Portfolios" below.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS FOR THE RESOLUTE EQUITY, SMALL COMPANY
AND INTERNATIONAL EQUITY PORTFOLIOS. Because the Resolute Equity, Small Company
and International Equity Portfolios buy and sell securities denominated in
currencies other than the U.S. dollar, and receive interest, dividends and sale
proceeds in currencies other than the U.S. dollar, the Resolute Equity and Small
Company Portfolios may, and the Resolute International Equity Portfolio will,
enter from time to time into foreign currency exchange transactions. The
Portfolios either enter into these
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<PAGE>
transactions on a spot (i.e. cash) basis at the spot rate prevailing in the
foreign currency exchange market, or use forward contracts to purchase or sell
foreign currencies. The cost of a Portfolio's currency exchange transactions
will generally be the difference between the bid and offer spot rate of the
currency being purchased or sold.
A forward foreign currency exchange contract is an obligation by the
Portfolio to purchase or sell a specific currency at a future date, which may be
any fixed number of days from the date of the contract. Forward foreign
currency exchange contracts establish an exchange rate at a future date. These
contracts are entered into in the interbank market directly between currency
traders (usually large commercial banks) and their customers. A forward foreign
currency exchange contract generally has no deposit requirement, and is traded
at a net price without commission. The Portfolios will not enter into forward
contracts for speculative purposes. Neither spot transactions nor forward
foreign currency exchange contracts eliminate fluctuations in the prices of the
Portfolio's securities, or prevent loss if the prices of these securities should
decline.
Each of these Portfolios may enter into foreign currency exchange
transactions in an attempt to protect against changes in foreign currency
exchange rates between the trade and settlement dates of specific securities
transactions or anticipated securities transactions. The Portfolios may also
enter into forward contracts to protect against a change in foreign currency
exchange rates that would cause a decline in the value of existing investments
denominated or principally traded in a foreign currency. To do this, a
Portfolio would enter into a forward contract to sell the foreign currency in
which the investment is denominated, or principally traded, in exchange for U.S.
dollars or in exchange for another foreign currency. A Portfolio will only
enter into forward contracts to sell a foreign currency in exchange for another
foreign currency if the Sub-Adviser expects the foreign currency purchased to
appreciate against the U.S. dollar more than the foreign currency exchanged.
Although these transactions are intended to minimize the risk of loss due
to a decline in the value of the hedged currency, at the same time they tend to
limit any potential gain that might be realized should the value of the hedged
currency increase. In addition, forward contracts that convert a foreign
currency into another foreign currency will cause the Portfolio to assume the
risk of fluctuations in the value of the currency purchased vis-a-vis the
hedged currency and the U.S. dollar. The precise matching of the forward
contract amounts and the value of the securities involved will not generally be
possible because the future value of such securities in foreign currencies will
change as a consequence of market movements in the value of such securities
between the date the forward contract is entered into and the date it matures.
The projection of currency market movements is extremely difficult, and the
successful execution of a hedging strategy is highly uncertain.
ILLIQUID INVESTMENTS; PRIVATELY PLACED AND OTHER UNREGISTERED SECURITIES.
Subject to the limitations described below, each of the Portfolios may acquire
investments that are illiquid or have limited liquidity, such as
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<PAGE>
investments that are not registered under the Securities Act of 1933 (the "1933
Act") and cannot be offered for public sale in the U.S. without first being
registered under the 1933 Act. An illiquid investment is any investment that
cannot be disposed of within seven days in the normal course of business at
approximately the amount at which it is valued by the Portfolio. The price the
Portfolio pays for illiquid securities or receives upon resale may be lower than
the price paid or received for similar securities with a more liquid market.
Accordingly, the valuation of these securities will reflect any limitations on
their liquidity.
Acquisitions of illiquid investments by the Portfolios is subject to the
following non-fundamental policies. The Resolute Treasury Money Market
Portfolio may not acquire any illiquid securities if, as a result thereof, more
than 10% of the market value of the Portfolio's total assets would be in
illiquid investments. The Resolute Bond, Equity, Small Company and
International Equity Portfolios may not invest in illiquid securities if, as a
result more than 15% of the market value of its total assets would be invested
in illiquid securities. Each of the Portfolios may also purchase Rule 144A
securities sold to institutional investors without registration under the 1933
Act. These securities may be determined to be liquid in accordance with
guidelines established by the Sub-Adviser and approved by the Trustees. The
Trustees will monitor the Sub-Adviser's implementation of these guidelines on a
periodic basis.
FUTURES AND OPTIONS TRANSACTIONS FOR THE RESOLUTE BOND, EQUITY, SMALL COMPANY
AND INTERNATIONAL EQUITY PORTFOLIOS. Each of these Portfolios is permitted to
enter into the futures and options transactions described in the "APPENDIX" to
this Prospectus for both hedging and risk management purposes, although not for
speculation. For more detailed information about these transactions, see the
"APPENDIX" to this Prospectus and "OPTIONS AND FUTURES TRANSACTIONS" in the
Statement of Additional Information.
MONEY MARKET INSTRUMENTS FOR THE RESOLUTE BOND, EQUITY, SMALL COMPANY AND
INTERNATIONAL EQUITY PORTFOLIOS. The Resolute Bond, Equity, Small Company and
International Equity Portfolios are permitted to invest in money market
instruments, although each of these Portfolios intends to stay invested in
equity securities (or in the case of the Resolute Bond Portfolio, long-term
fixed income securities), to the extent practical in light of its objectives and
long-term investment perspective. These Portfolios may make money market
investments pending other investment or settlement, for liquidity or in adverse
market conditions. The money market investments permitted for these Portfolios
are the same as for the Resolute Bond Portfolio and include obligations of the
U.S. Government and its agencies and instrumentalities, other debt securities,
commercial paper, bank obligations and repurchase agreements, (see "THE RESOLUTE
BOND PORTFOLIO-Money Market Instruments"). The Portfolio for the Resolute
International Equity Portfolio may also invest in short-term obligations of
sovereign foreign governments, their agencies, instrumentalities and political
subdivisions. For more detailed information about these money market
instruments, see "INVESTMENT OBJECTIVES AND POLICIES" in the Statement of
Additional Information.
INVESTMENT RESTRICTIONS
-----------------------
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<PAGE>
Investments of the Portfolios are further restricted by certain policies
that may not be changed without the approval of the holders of the outstanding
shares of each Portfolio. See "INVESTMENT RESTRICTIONS" in the Statement of
Additional Information.
MANAGEMENT OF THE TRUST AND THE PORTFOLIOS
------------------------------------------
The Board is responsible for the administration of the affairs of the
Trust. Pursuant to the Declarations of Trust for the Trust, the Trustees of the
Trust ("Trustees") decide upon matters of general policy and review the actions
of the Investment Manager, Sub-Adviser and other service providers.
The Trust's investment manager is Chubb Investment Advisory, a registered
investment adviser, which is a wholly owned subsidiary of Chubb Life. Its
address is One Granite Place, Concord, NH 03301. It provides supervisory
investment advice, acts as transfer and dividend disbursing agent for the Trust
and provides certain administrative services for all the Trust's Portfolios.
Its investment advisory services include, among other things, recommending and
overseeing the activities if the Sub- Adviser and reviewing practices of broker-
dealers selected by the Sub-adviser. The cost of such services is included in
the investment management fee described below. Chubb Investment Advisory also
acts as investment manager and administrator to other open-end management
investment companies.
As noted above, Chubb Investment Advisory acts as transfer agent and
dividend paying agent for the Trust and assumes a number of administrative
functions in addition to its investment management services. For example, Chubb
Investment Advisory prepares and distributes Proxy statements, Prospectuses,
Statements of Additional Information, Reports and other communications with
stockholders; schedules, plans the agenda for, and conducts the meetings of the
Board and shareholders; and prepares and files tax returns and reports which
federal, state, local or foreign laws may require. The cost of preparing,
printing and distributing all materials and holding such meetings is borne by
the Trust. The Trust also pays certain other expenses which are described under
the heading "INVESTMENT ADVISORY AND OTHER SERVICES" in the Statement of
Additional Information.
The Sub-Adviser for the Portfolios is Morgan Guaranty Trust Company of of
New York, a New York trust company which conducts a general banking and trust
business, and maintains its principal office at 60 Wall Street, New York, New
York 10260. Morgan is a wholly owned subsidiary of J.P. Morgan & Co.
Incorporated, a bank holding company organized under the laws of Delaware.
Through offices in New York City and abroad Morgan and its affiliates offer a
wide range of services to governmental, institutional, corporate and individual
customers and acts as investment adviser to individual and institutional
clients. As of December 31, 19xx Morgan and its affiliates had total combined
assets under management of approximately $xxx billion, (of which Morgan advises
over $xx billion).
Morgan provides investment advice and portfolio management services to each
Portfolio. Subject to the supervision of the Trustees and the Investment
Manager, Morgan makes each Portfolio's day-to-day investment
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<PAGE>
decisions, arranges for the execution of portfolio transactions and generally
manages each Portfolio's investments.
Morgan uses a sophisticated, disciplined, collaborative process for
managing all asset classes. The following persons are primarily responsible for
the day-to-day management and implementation of Morgan's process for the
respective Portfolios (the inception date of each person's responsibility for a
Portfolio and their business experience for the past 5 years are indicated
parenthetically): the Resolute Treasury Money Market Portfolio: James A. Hayes,
Vice President (since November, 1993, employed by Morgan since prior to 1988)
and Robert R. Johnson, Vice President (since November, 1993, employed by Morgan
since 1988); the Resolute Bond Portfolio: William G. Tenille, Vice President
(since January, 1994, employed by the Morgan since March, 1992, previously
Managing Director, Manufacturers Hanover Trust Company) and Connie J. Plaehn,
Vice President (since January, 1994, employed by Morgan since prior to 1989);
the Resolute Equity Portfolio: William B. Petersen, Managing Director (since
November, 1993, employed by Morgan since prior to 1988) and William M. Riegel,
Jr., Vice President (since November, 1993, employed by Morgan since prior to
1988); the Resolute Small Company Portfolio: James B. Otness, Managing Director
(since November, 1993, employed by Morgan since prior to 1988) and Fred W.
Kittler, Vice President (since November, 1993, employed by Morgan since prior to
1988); and the Resolute International Equity Portfolio: Paul A Quinsee, Vice
President (since November, 1993, employed by Morgan since February, 1992,
previously Vice President, Citibank) and Thomas P. Madsen, Managing Director
(since November, 1993, employed by Morgan since prior to 1988).
Investment management fees are paid by the Trust to Chubb Investment
Advisory monthly at an annual rate based on a percentage of the average daily
net asset value of the each Portfolio. The compensation to the Sub-Adviser is
paid directly from the investment management fees by Chubb Investment Advisory.
The fees of Chubb Investment Advisory and the Sub-Adviser are set forth in the
table below as an annual percentage of the average daily net asset value of each
Portfolio:
<TABLE>
<CAPTION>
Investment
Manager Sub-Adviser Total
-----------------------------------------
<S> <C> <C> <C>
The Resolute Treasury
Money Market Portfolio .40% .20% .40%
The Resolute Bond
Portfolio .50% .30% .50%
The Resolute Equity
Portfolio .60% .40% .60%
The Resolute Small
Company Portfolio .80% .60% .80%
The Resolute Inter-
national Equity Portfolio .80% .60% .80%
</TABLE>
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<PAGE>
Chubb Life and Morgan have agreed that for the first two years of the
Trust's existence they will each assume fifty percent of the expenses of each
Portfolio of the Trust in excess of .60%, .75%, .90%, 1.15% and 1.20% of the
average daily net asset value respectively of the Resolute Treasury Money
Market, Bond, Equity, Small Company and International Equity Portfolios.
For more information concerning the payment of expenses of the Trust, see
"INVESTMENT ADVISORY AND OTHER SERVICES" in the Statement of Additional
Information.
CAPITAL SHARES
The Trust issues a separate series of shares of beneficial interest for
each Portfolio. Each share issued with respect to a Portfolio has a pro rata
interest in all the assets of that Portfolio. Each share is entitled to one
vote on all matters submitted to a vote of all shareholders of the Trust, and
fractional shares are entitled to a corresponding fractional vote. Shares of a
Portfolio will be voted separately from shares of other Portfolios on matters
affecting only that Portfolio, including approval of the investment management
agreement, the sub-investment advisory agreement, and changes in fundamental
investment policies of that Portfolio. The assets of each Portfolio are charged
with the liabilities of that Portfolio and a proportionate share of the general
liabilities of the Trust. All shares may be redeemed at any time.
As a Delaware Business Trust, the Trust is not required to hold regular
annual shareholder meetings and, in the normal course, does not expect to hold
such meetings. The Trust is, however, required to hold shareholder meetings for
such purposes as, for example: (i) approving certain agreements as required by
the 1940 Act; (ii) changing fundamental investment objectives and restrictions
of the Portfolios; and (iii) filling vacancies on the Board in the event that
less than a majority of the Trustees were elected by shareholders. The Trust
expects that there will be no meetings of shareholders for the purpose of
electing trustees unless and until such time as less than a majority of the
trustees holding office have been elected by shareholders. At such time, the
trustees then in office will call a shareholder meeting for the election of
trustees. In addition, holders of record of not less than two-thirds of the
outstanding shares of the Trust may remove a Trustee from office by a vote cast
in person or by proxy at a shareholder meeting called for that purpose at the
request of holders of 10% or more of the outstanding shares of the Trust. The
Trust has the obligation to assist in any such shareholder communications.
Except as set forth above, Trustees will continue in office and may appoint
successor Trustees.
Chubb Life purchased 100,000 shares of each of the Resolute Bond, Resolute
Equity, Small Company and International Equity Portfolios for its general
account. The purchase price of each share was $10.00. All other shares are
being offered only to corresponding divisions of separate accounts established
by Chubb Life or its affiliated insurance companies. Chubb Life's ownership of
greater than 25% of these Portfolios may result in Chubb Life being deemed to be
a controlling entity of them. The shares held in a separate account which are
attributable to Policies will be voted by Chubb
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<PAGE>
Life or its affiliated insurance companies in accordance with instructions
received from the owners of Policies. The shares held by Chubb Life or its
affiliated insurance companies, including shares for which no voting
instructions have been received, shares held in the separate account
representing charges imposed by Chubb Life or its affiliated insurance companies
against the separate account and shares held by Chubb Life or its affiliated
insurance companies that are not otherwise attributable to Policies, will also
be voted by Chubb Life or its affiliated insurance companies in proportion to
instructions received from the owners of Policies. Chubb Life and its affiliated
insurance companies reserve the right to vote any or all such shares at their
discretion to the extent consistent with then current interpretations of the
Investment Company Act of 1940 and rules thereunder.
TAXES AND DIVIDENDS
Each Portfolio intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code (the "Code"). It is the Trust's
policy to comply with the provisions of the Code regarding distribution of
investment income. Under those provisions, a Portfolio will not be subject to
federal income tax on that portion of its ordinary income and net capital gains
distributed to shareholders.
The Trust expects that each Portfolio will declare and distribute by the
end of each calendar year all or substantially all ordinary income and net
capital gains, if any, from the sale of investments. Failure to distribute
substantially all ordinary and net capital gains, as described, may subject the
Trust to an excise tax.
Dividends from ordinary income will be declared and distributed with
respect to each Portfolio at least once each year. Ordinary income of each
Portfolio is the investment company taxable income as defined in Section 852(b)
of the Code determined (1) without excluding the amount of net capital gain, if
any, (2) without allowance of the deduction for dividends paid, (3) without
taking into account any gain or loss from the sale or exchange of a capital
asset, and (4) by treating the calendar year as each Portfolio's taxable year.
All dividends and distributions will be automatically reinvested in additional
shares of the Portfolio with respect to which dividends have been declared, at
net asset value, as of the ex-dividend date of such dividends.
Section 817(h) of the Code and regulations thereunder set standards for
diversification of the investments underlying variable life insurance policies
in order for such policies to be treated as life insurance. These requirements,
which are in addition to diversification requirements applicable to the
Portfolios under Subchapter M and the Investment Company Act of 1940, may affect
the composition of a Portfolio's investments. Since the shares of the Trust are
currently sold to segregated asset accounts underlying such variable life
insurance policies, the Trust intends to comply with the diversification
requirements as set forth in the regulations.
The Secretary of the Treasury may in the future issue additional
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<PAGE>
regulations or revenue rulings that will prescribe the circumstances in which a
policyowner's control of the investments of a separate account may cause the
policyowner, rather than the insurance company, to be treated as the owner of
assets of the separate account. Failure to comply with Section 817(h) of the
Code or any regulation thereunder, or with any regulations or revenue rulings on
policyowner control, if promulgated, would cause earnings regarding a
policyowner's interest in the separate account to be includible in the
policyowner's gross income in the year earned.
OFFERING AND REDEMPTION OF SHARES
Shares of each Portfolio are currently offered only to a corresponding
division of a separate account to which premiums have been allocated by the
owner of a Policy. Shares are sold and redeemed at their net asset value as
next determined following receipt by the separate account of premium payments,
surrender requests under Policies, loan payments, transfer requests, and similar
or related transactions through the separate account.
Although neither Chubb Life, its affiliates or the Trust currently foresees
any disadvantages to offering the Trust's shares to additional separate
accounts, funding variable annuities and variable life insurance policies,
established by Chubb Life or its affiliated insurance companies, there is a
possibility that a material conflict may arise between the interests of the
different separate accounts. Remedial action may include withdrawal by a
separate account from participation in the Trust. The Board intends to monitor
events in order to identify any material conflicts and to determine what action,
if any, should be taken in response thereto.
Net asset value is normally determined as of the close of regular trading
on the New York Stock Exchange (presently 4:00 p.m.) on each day during which
the New York Stock Exchange is open for trading.
An equity security listed on a stock exchange is valued at the closing sale
price on the exchange on which such security is principally traded. If no sale
took place, the mean of the bid and asked prices at the close of trading is
used. A security not listed on a stock exchange is valued at the closing sale
price as reported on a readily available market quotation system, or, if no
sales took place, the mean of the bid and asked prices at the close of trading
in the over-the-counter market. Quotations of foreign securities in foreign
currencies are converted to U.S. dollar equivalents using appropriately
translated foreign market closing prices.
Trading in securities on exchanges in European and Far Eastern countries,
and in over-the-counter markets in such other nations, is normally completed
well before the close of trading on the New York Stock Exchange. Trading of
European and Far Eastern securities, either generally or in a particular country
or countries, may not take place on every day on which the New York Stock
Exchange is open. Furthermore, trading takes place in Japanese markets on
certain Saturdays, and in various foreign markets on days which are not business
days in New York and on which the Trust's net asset value is not normally
calculated. The calculation of the net asset value of those Portfolios which do
such trading, therefore, may not take place
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contemporaneously with the determination of the prices of many of the securities
of each such Portfolio which are used in making the calculation of net asset
value. Occasionally, events affecting the values of such securities may occur
between the times at which they are determined and the close of the New York
Stock Exchange, which events may not be reflected in the computation of a
Portfolio's net asset value. If, during such periods, events occur which
materially affect the value of the securities of a Portfolio, and during such
periods either shares are tendered for redemption or a purchase or sale order is
received by the Trust, such securities will be valued at fair value as
determined in good faith by the Board.
Debt securities having remaining maturities of 60 days or less are valued
on a amortized cost basis unless the Board determines that such method does not
represent fair value. This procedure values a purchased instrument at cost on
the date of purchase. It thereafter assumes a constant rate of amortization of
any discount or premium and of accrual of interest income, regardless of any
intervening change in general interest rates or the market value of the
instrument.
Options and convertible preferred stocks listed on a national securities
exchange are valued as of their last sale price or, if there is no sale, at the
current bid price. Futures contracts are valued as of their last sale price or,
if there is no sale, at the latest available bid price.
All other securities and assets are valued at their fair value as
determined in good faith by the Board.
With the approval of the Board, the Trust may utilize a pricing service, a
bank, or a broker-dealer experienced in such matters to perform any of the
above-described valuation functions.
OTHER INFORMATION
Shares of the Portfolios are presently offered only to corresponding
divisions of separate accounts established by Chubb Life or its affiliated
insurance companies in order to fund the Policies. In the future, however, the
shares of the Portfolios may also be offered to separate accounts of Chubb Life
or affiliates of Chubb Life in order to fund additional variable life insurance
policies or variable annuity contracts offered by Chubb Life or its affiliates.
A potential for certain conflicts exists between the interests of variable
life insurance policyowners and variable annuity contract owners. In the event
that shares of the Portfolios are offered to separate accounts funding variable
annuity contracts, the Board intends to monitor events for the existence of any
material conflict between the interests of variable life insurance policyowners
and variable annuity contract owners and to determine what action, if any,
should be taken in response thereto.
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APPENDIX
The Resolute Bond Portfolio may (a) purchase and sell exchange traded and
over the counter ("OTC") put and call options on fixed income securities and
indexes of fixed income securities, (b) purchase and sell futures contracts on
fixed income securities and indexes of fixed income securities and (c) purchase
and sell put and call options on futures contracts on fixed income securities
and indexes of fixed income securities.
The Resolute Equity, Small Company and International Equity Portfolios may
(a) purchase and sell exchange traded and OTC put and call options on equity
securities or indexes of equity securities, (b) purchase and sell futures
contracts on indexes of equity securities, and (c) purchase and sell put and
call options on futures contracts on indexes of equity securities.
Each of these Portfolios may use futures contracts and options for hedging
and risk management purposes. See "RISK MANAGEMENT" in the Statement of
Additional Information. None of the Portfolios may use futures and options for
speculation.
Each of these Portfolios may utilize options and futures contracts to
manage its exposure to changing interest rates and/or security prices. Some
options and futures strategies, including selling futures contracts and buying
puts, tend to hedge a Portfolio's investments against price fluctuations. Other
strategies, including buying futures contracts, writing puts and calls, and
buying calls, tend to increase market exposure. Options and futures contracts
may be combined with each other or with forward contracts in order to adjust the
risk and return characteristics of a Portfolio's overall strategy in a manner
deemed appropriate to the Sub-Adviser and consistent with a Portfolio's
objective and policies. Because combined options positions involve multiple
trades, they result in higher transaction costs and may be more difficult to
open and close out.
The use of options and futures is a highly specialized activity which
involves investment strategies and risks different from those associated with
ordinary portfolio securities transactions, and there can be no guarantee that
their use will increase a Portfolio's return. While the use of these
instruments by a Portfolio may reduce certain risks associated with owning its
portfolio securities, these techniques themselves entail certain other risks.
If the Sub-Adviser applies a strategy at an inappropriate time or judges market
conditions or trends incorrectly, options and futures strategies may lower a
Portfolio's return. Certain strategies limit a Portfolio's possibilities to
realize gains as well as limiting its exposure to losses. The Portfolio could
also experience losses if the prices of its options and futures positions were
poorly correlated with its other investments, or if it could not close out its
positions because of an illiquid secondary market. In addition, a Portfolio
will incur transaction costs, including trading commissions and option premiums,
in connection with its futures and options transactions and these transactions
could significantly increase the Portfolio's turnover rate.
The Portfolios will not purchase or sell (write) futures contracts,
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options, or futures contracts or commodity options for risk management purposes
if, as a result, the aggregate initial margin and options premiums required to
establish these positions exceed 5% of the net asset value of such Portfolio.
OPTIONS
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a Portfolio
obtains the right (but not the obligation) to sell the instrument underlying the
option at a fixed strike price. In return for this right, the Portfolio pays
the current market price for the option (known as the option premium). Options
have various types of underlying instruments, including specific securities,
indexes of securities, indexes of securities prices, and futures contracts. The
Portfolio may terminate its position in a put option it has purchased by
allowing it to expire or by exercising the option. The Portfolio may also close
out a put option position by entering into an offsetting transaction, if a
liquid market exists. If the option is allowed to expire, the Portfolio will
lose the entire premium it paid. If the Portfolio exercises a put option on a
security, it will sell the instrument underlying the option at the strike price.
If the Portfolio exercises an option on an index, settlement is in cash and does
not involve the actual sale or securities. If an option is American Style, it
may be exercised on any day up to its expiration date. A European style option
may be exercised only on its expiration date.
The buyer of a typical put option can expect to realize a gain if the price
of the underlying instrument falls substantially. However, if the price of the
instrument underlying the option does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss (limited to the
amount of the premium paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the instrument underlying the option at the option's
strike price. A call buyer typically attempts to participate in potential price
increases of the instrument underlying the option with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can expect
to suffer a loss if security prices do not rise sufficiently to offset the cost
of the option.
SELLING (WRITING) PUT AND CALL OPTIONS. When a Portfolio writes a put
option, it takes the opposite side of the transaction from the option's
purchaser. In return for receipt of the premium, the Portfolio assumes the
obligation to pay the strike price for the instrument underlying the option if
the other party to the option chooses to exercise it. The Portfolio may seek to
terminate its position in a put option it writes before exercise by purchasing
an offsetting option in the market at its current price. However, if the market
is not liquid for a put option the Portfolio has written, the Portfolio must
continue to be prepared to pay the strike price while the option is outstanding,
regardless of price changes, and must continue to post margin as discussed
below.
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If the price of the underlying instrument rises, a put writer would
generally expect to profit, although its gain would be limited to the amount of
the premium it received. If security prices remain the same over time, it is
likely that the writer will also profit, because it should be able to close out
the option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. However, this loss should be less than the loss from
purchasing and holding the underlying instrument directly, because the premium
received for writing the option should offset a portion of the decline.
Writing a call option obligates a Portfolio to sell or deliver the option's
underlying instrument in return for the strike price upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium a call writer offsets part of the effect of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is greater,
a call writer gives up some ability to participate in security price increases.
The writer of an exchange traded put or call option on a security, an index
of securities or a futures contract is required to deposit cash or securities or
a letter of credit as margin and to make mark to market payments of variation
margin as the position becomes unprofitable.
OPTIONS ON INDEXES. Each Portfolio permitted to enter into options
transactions may purchase and sell (write) put and call options on any
securities index based on securities in which the Portfolio may invest. Options
on securities indexes are similar to options on securities, except that the
exercise of securities index options are settled by cash payment and does not
involve the actual purchase or sale of securities. In addition, these options
are designed to reflect price fluctuations in a group of securities or segment
of the securities market rather than price fluctuations in a single security. A
Portfolio, in purchasing or selling index options, is subject to the risk that
the value of its portfolio securities may not change as much as an index because
the Portfolio's investments generally will not match the composition of an
index.
For a number of reasons, a liquid market may not exist and thus a Portfolio
may not be able to close out an option position that it has previously entered
into. When a Portfolio purchases an OTC option, it will be relying on its
counterparty to perform its obligations, and a Portfolio may incur additional
losses if the counterparty is unable to perform.
FUTURES CONTRACTS
When a Portfolio purchases a futures contract, it agrees to purchase a
specified quantity of an underlying instrument at a specified future date or to
make a cash payment based on the value of a securities index. When a Portfolio
sells a futures contract, it agrees to sell a specified quantity of the
underlying instrument at a specified future date or to receive a cash
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payment based on the value of a securities index. The price at which the
purchase and sale will take place is fixed when the Portfolio enters into the
contract. Futures can be held until their delivery dates or the position can be
(and normally is) closed out before then. There is no assurance, however, that a
liquid market will exist when the Portfolio wishes to close out a particular
position.
When a Portfolio purchases a futures contract, the value of the futures
contract tends to increase and decrease in tandem with the value of its
underlying instrument. Therefore, purchasing futures contracts will tend to
increase a Portfolio's exposure to positive and negative price fluctuations in
the underlying instrument, much as if it had purchased the underlying instrument
directly. When a Portfolio sells a futures contract, by contrast, the value of
its futures position will tend to move in a direction contrary to the value of
the underlying instrument. Selling futures contracts, therefore, will tend to
offset both positive and negative market price changes, much as if the
underlying instrument has been sold.
The purchaser or seller of a futures contract is not required to deliver or
pay for the underlying instrument unless the contract is held until the delivery
date. However, when a Portfolio buys or sells a futures contract it will be
required to deposit "initial margin" with its custodian in a segregated account
in the name of its futures broker, known as a futures commission merchant
("FCM"). Initial margin deposits are typically equal to a small percentage of
the contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments equal to
the change in value on a daily basis. The party that has a gain may be entitled
to receive all or a portion of this amount. A Portfolio may be obligated to
make payments of variation margin at a time when it is disadvantageous to do so.
Furthermore, it may not always be possible for a Portfolio to close out its
futures positions. Until it closes out a futures position, a Portfolio will be
obligated to continue to pay variation margin. Initial and variation margin
payments do not constitute purchasing on margin for purposes of the Portfolio's
investment restrictions. In the event of the bankruptcy of an FCM that holds
margin on behalf of a Portfolio, the Portfolio may be entitled to return of
margin owed to it only in proportion to the amount received by FCM's other
customers, potentially resulting in losses to the Portfolio.
Each Portfolio will segregate liquid, high quality assets in connection
with its use of options and futures contracts to the extent required by the
staff of the Securities and Exchange Commission ("SEC"). Securities held in a
segregated account cannot be sold while the futures contract or option is
outstanding, unless they are replaced with other suitable assets. As a result,
there is a possibility that segregation of a large percentage of a Portfolio's
assets could impede portfolio management or the Portfolio's ability to meet
redemption requests or other current obligations.
For further information about the Portfolio's use of futures and options
and a more detailed discussion of associated risks, see "INVESTMENT OBJECTIVES
AND POLICIES" in the Statement of Additional Information.
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THE CHUBB SERIES TRUST
CROSS REFERENCE SHEET
Cross reference sheet showing location in the Statement of Additional
Information by the Items in Part B of Form N-1A.
Item Heading in Statement of
Number Additional Information
------ -----------------------
10 Cover Page
11 Table of Contents
12 Business History
13 Investment Objectives and Policies - Investment
Restrictions
14 Trustees and Officers
15 Capital Shares
16 Investment Advisory and Other Services
17 Portfolio Transactions and Brokerage Allocations
18 Capital Shares
19 Offering and Redemption of Shares
20 Taxes
21 Offering and Redemption of Shares
22 Performance and Yield Information
23 *(Financial Statements)
- -------------
*Indicates inapplicable or negative.
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THE CHUBB SERIES TRUST
ONE GRANITE PLACE
CONCORD, NEW HAMPSHIRE 03301
(603) 226-5000
A SERIES TRUST WITH
THE RESOLUTE TREASURY MONEY MARKET PORTFOLIO
THE RESOLUTE BOND PORTFOLIO
THE RESOLUTE EQUITY PORTFOLIO
THE RESOLUTE SMALL COMPANY PORTFOLIO
THE RESOLUTE INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS BUT
SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS OF THE TRUST.
IT IS INCORPORATED BY REFERENCE INTO THE PROSPECTUS. A COPY OF THE PROSPECTUS
MAY BE OBTAINED BY WRITING OR CALLING THE TRUST AT THE ADDRESS OR TELEPHONE
NUMBER ABOVE.
- --------------------------------------------------------------------------------
The date of the Prospectus to which this Statement of Additional Information
relates is 1995.
The date of this Statement of Additional Information is , 1995.
S-1
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
BUSINESS HISTORY .................................................... 4
INVESTMENT OBJECTIVES AND POLICIES .................................. 4
The Resolute Treasury Money Market Portfolio .............. 4
The Resolute Bond Portfolio ............................... 4
The Resolute Equity Portfolio ............................. 5
The Resolute Small Company Portfolio ...................... 5
The Resolute International Equity Portfolio ............... 5
Money Market Instruments .................................. 6
U.S. Treasury Securities ............................. 6
Additional U.S. Government Obligations ............... 6
Foreign Government Obligations ....................... 6
Bank Obligations ..................................... 7
Commercial Paper ..................................... 7
Repurchase Agreements ................................ 8
Corporate Bonds and Other Debt Securities ................. 9
High-Yield/High-Risk Bonds ........................... 9
Asset Backed Securities .............................. 10
Equity Investments ........................................ 10
Equity Securities .................................... 10
Foreign Investments ....................................... 11
Additional Investments .................................... 12
When Issued and Delayed Delivery Securities .......... 12
Investment Company Securities ........................ 12
Reverse Repurchase Agreements ........................ 13
Mortgage Dollar Roll Transactions .................... 13
Loans of Portfolio Securities ........................ 14
Privately Placed and Certain Unregistered
Securities .......................................... 14
Quality and Diversification Requirements .................. 14
Resolute Treasury Money Market Portfolio ............. 15
Resolute Bond Portfolio .............................. 15
Resolute Equity, Small Company and
International Equity Portfolios ..................... 15
Options and Futures Transactions .......................... 16
Exchange Traded and Over the Counter Options ......... 16
Futures Contracts and Options on Futures
Contracts .......................................... 16
Combined Activities .................................. 17
Correlation of Price Changes ......................... 17
Liquidity of Options and Futures Contracts ........... 18
Position Limits ...................................... 18
Asset Coverage for Futures Contracts and
Option Positions .................................... 19
Risk Management ........................................... 19
</TABLE>
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<TABLE>
<S> <C>
INVESTMENT RESTRICTIONS ............................................. 19
Fundamental Investment Restrictions ....................... 19
Non-Fundamental Investment Restrictions ................... 21
The Resolute Treasury Money Market
Portfolio ........................................... 21
The Resolute Bond, Equity, Small Company
and International Equity Portfolios ................. 21
TRUSTEES AND OFFICERS ................................................25
INVESTMENT ADVISORY AND OTHER SERVICES ...............................25
Investment Management Agreements and Sub-Advisory
Agreements .............................................. 25
Independent Auditors ...................................... 27
Custodian ................................................. 27
Payment of Expenses ....................................... 27
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATIONS .................... 28
CAPITAL SHARES ...................................................... 30
OFFERING AND REDEMPTION OF SHARES ................................... 31
DETERMINATION OF NET ASSET VALUE .................................... 32
TAXES ............................................................... 33
PERFORMANCE AND YIELD INFORMATION ................................... 35
Money Market Portfolio .................................... 35
Non-Money Market Portfolios ............................... 35
DELAWARE BUSINESS TRUST ............................................. 38
ADDITIONAL INFORMATION .............................................. 38
Reports ................................................... 38
APPENDIX A .......................................................... 39
FINANCIAL STATEMENTS................................................. F-1
</TABLE>
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BUSINESS HISTORY
The Chubb Series Trust, (the "Trust") a Delaware Business Trust is an open-
end diversified management investment company established by Chubb Life
Insurance Company of America ("Chubb Life") to provide for the investment of
assets of separate accounts established by Chubb Life or its affiliated
insurance companies. Such assets are acquired by the separate accounts pursuant
to the sale of flexible premium variable life insurance policies (the
"Policies"). The Trust has no business history prior to being organized in
Delaware on October 28, 1993. In the future, the Trust may sell its shares to
other separate accounts funding variable annuities and variable life insurance
policies established by Chubb Life, its successors or assigns, or by other
insurance companies with which Chubb Life is affiliated, and may add or delete
Portfolios.
INVESTMENT OBJECTIVES AND POLICIES
THE RESOLUTE TREASURY MONEY MARKET PORTFOLIO is designed to be an economical and
convenient means of making substantial investments in short-term direct
obligations of the United States ("U.S.") Treasury. The Resolute Treasury Money
Market Portfolio's investment objective is to provide current income, maintain a
high level of liquidity, and preserve capital.
The Portfolio attempts to achieve its investment objective by maintaining a
dollar-weighted average portfolio maturity of not more than 90 days and by
investing in U.S. Treasury securities described in the Prospectus and in this
Statement of Additional Information that have effective maturities of not more
than thirteen months.
THE RESOLUTE BOND PORTFOLIO is designed to be an economical and convenient means
of making substantial investments in a broad range of U.S. dollar-denominated
corporate and government debt obligations and related investments, subject to
certain quality and other restrictions. The Resolute Bond Portfolio's
investment objective is to provide a high total return consistent with moderate
risk of capital and maintenance of liquidity. Although the net asset value of
the Resolute Bond Portfolio will fluctuate, the Resolute Bond Portfolio attempts
to conserve the value of its investments to the extent consistent with its
objective.
The Portfolio attempts to achieve its investment objective by investing
primarily in U.S. dollar-denominated corporate and government debt obligations
and related securities described in the Prospectus and this Statement of
Additional Information. The Portfolio may purchase or sell financial futures
contracts and options in order to attempt to reduce the volatility of its
portfolio, manage market risk and minimize fluctuations in net
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asset value. For a discussion of these investments, see "OPTIONS AND FUTURES
TRANSACTIONS."
THE RESOLUTE EQUITY PORTFOLIO is designed for investors who want an actively
managed portfolio of selected equity securities that seeks to outperform the S&P
500 Index. The Resolute Equity Portfolio's investment objective is to provide a
high total return from a portfolio comprised of selected equity securities.
During ordinary market conditions, at least 65% of the Portfolio's net
assets will be invested in equity securities consisting of common stocks and
other securities with equity characteristics such as preferred stock, warrants,
rights and convertible securities. The Portfolio's primary investments are the
common stock of large and medium sized U.S. corporations.
THE RESOLUTE SMALL COMPANY PORTFOLIO is designed for investors who are willing
to assume the somewhat higher risk of investing in small companies in order to
seek a higher return over time than might be expected from a portfolio of stocks
of large companies. The Resolute Small Company Portfolio's investment objective
is to provide a high total return from a portfolio of equity securities of small
companies.
The Portfolio may invest in the same types of securities as permitted for
the Resolute Equity Portfolio.
THE RESOLUTE INTERNATIONAL EQUITY PORTFOLIO is designed for investors with a
long-term investment horizon who want to diversify their portfolios by adding
international equities and take advantage of investment opportunities outside
the U.S. The Resolute International Equity Portfolio's investment objective is
to provide a high total return from a portfolio of equity securities of foreign
corporations.
The Portfolio seeks to achieve its investment objective by investing
primarily in the equity securities of foreign corporations, consisting of common
stock and other securities with equity characteristics such as preferred stock,
warrants, rights and convertible securities. Under normal circumstances, the
Portfolio expects to invest at least 65% of its total assets in such securities.
The Portfolio does not intend to invest in U.S. securities (other than short-
term instruments), except, temporarily, when extraordinary circumstances
prevailing at the same time in a significant number of developed foreign
countries render investments in such countries inadvisable.
The following discussion supplements the information regarding the
investment objective of each of the Portfolios and the policies to be employed
to achieve their objectives as set forth above and in the Prospectus.
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MONEY MARKET INSTRUMENTS
As discussed in the Prospectus, each Portfolio may invest in money market
instruments to the extent consistent with its investment objective and policies.
A description of the various types of money market instruments that may be
purchased by the Portfolios appears below. See "QUALITY AND DIVERSIFICATION
REQUIREMENTS."
U.S. TREASURY SECURITIES. Each of the Portfolios may invest in direct
obligations of the U.S. Treasury, including Treasury Bills, Notes and Bonds, all
of which are backed as to principal and interest payments by the full faith and
credit of the U.S.
ADDITIONAL U.S. GOVERNMENT OBLIGATIONS. Each of the Portfolios, except the
Resolute Treasury Money Market Portfolio, may invest in obligations issued or
guaranteed by U.S. Government agencies or instrumentalities. These obligations,
may or may not be backed by the "full faith and credit" of the U.S. In the case
of securities not backed by the full faith and credit of the U.S., each
Portfolio must look principally to the federal agency issuing or guaranteeing
the obligation for ultimate repayment and may not be able to assert a claim
against the U.S. itself in the event the agency or instrumentality does not meet
its commitments. Securities in which each Portfolio, except the Resolute
Treasury Money Market Portfolio, may invest that are not backed by the full
faith and credit of the U.S. include, but are not limited to, obligations of
the Tennessee Valley Authority, the Federal National Mortgage Association, and
the United States Postal Service, each of which has the right to borrow from the
U.S. Treasury to meet its obligations, and obligations of the Federal Farm
Credit System and the Federal Home Loan Banks, both of whose obligations may be
satisfied only by the individual credits of each issuing agency. Securities
which are backed by the full faith and credit of the U.S. include obligations of
the Government National Mortgage Association, the Farmers Home Administration,
and the Export-Import Bank.
FOREIGN GOVERNMENT OBLIGATIONS. Each of the Portfolios, except the Resolute
Treasury Money Market Portfolio, subject to its applicable investment policies,
may also invest in short-term obligations of foreign sovereign governments or of
their agencies, instrumentalities, authorities or political subdivisions. These
securities may be denominated in the U.S. dollar or, in the case of the Resolute
Equity, Small Company or International Equity Portfolios, in another currency.
See "FOREIGN INVESTMENTS."
BANK OBLIGATIONS. Each of the Portfolios, except the Resolute Treasury Money
Market Portfolio, unless otherwise noted in the Prospectus or below, may invest
in negotiable certificates of deposit, time deposits and bankers' acceptances of
(i) banks,
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savings and loan associations and savings banks which have more than
$2 billion in total assets (the "Asset Limitation") and are organized under the
laws of the U.S. or any state, (ii) foreign branches of these banks or of
foreign banks of equivalent size (Euros) and (iii) U.S. branches of foreign
banks of equivalent size (Yankees). The Asset Limitation does not apply to the
Resolute International Equity Portfolio. See "FOREIGN INVESTMENTS." The
Portfolios will not invest in bank obligations for which the Sub- Adviser, or
any of its affiliated persons, is the ultimate obligor or accepting bank. Each
of the Portfolios other than the Resolute Treasury Money Market Portfolio, may
also invest in obligations of international banking institutions designated or
supported by national governments to promote economic reconstructions,
development or trade between nations (e.g. the European Investment Bank, the
Inter-American Development Bank, or the World Bank).
COMMERCIAL PAPER. Each of the Portfolios (except the Resolute Treasury Money
Market Portfolio) may invest in commercial paper, including master demand
obligations. Master demand obligations are obligations that provide for a
periodic adjustment in the interest rate paid and permit daily changes in the
amount borrowed. Master demand obligations are governed by agreements between
the issuer and the Sub-Adviser of the Portfolios, acting as agent, for no
additional fee. The monies loaned to the borrower come from accounts maintained
with or managed by the Sub-Adviser or its affiliates, pursuant to arrangements
with such accounts. Interest and principal payments are credited to such
accounts. The Sub-Adviser, acting as a fiduciary on behalf of its clients, has
the right to increase or decrease the amount provided to the borrower under an
obligation. The borrower has the right to pay without penalty all or any part of
the principal amount then outstanding on an obligation together with interest to
the date of payment. Since these obligations typically provide that the interest
rate is tied to the Federal Reserve Commercial Paper Composite Rate, the rate on
master demand obligations is subject to change. Repayment of a master demand
obligation to participating accounts depends on the ability of the borrower to
pay the accrued interest and principal of the obligation on demand which is
continuously monitored by the Portfolio's Sub-Adviser. Since master demand
obligations typically are not rated by credit rating agencies, the Portfolios
may invest in such unrated obligations only if at the time of an investment the
obligation is determined by the Sub-Adviser to have a credit quality which
satisfies the particular Portfolio's quality restrictions. See "QUALITY AND
DIVERSIFICATION REQUIREMENTS." Although there is no secondary market for master
demand obligations, such obligations are considered by the Portfolios to be
liquid because they are payable upon demand. The Portfolios do not have any
specific percentage limitation on investments in master demand obligations.
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REPURCHASE AGREEMENTS. Each of the Portfolios may enter into repurchase
agreements with brokers, dealers or banks that meet the credit guidelines
approved by the Trust's Board of Trustees (the "Board"). In a repurchase
agreement, a Portfolio buys a security from a seller that has agreed to
repurchase the same security at a mutually agreed upon date and price. The
resale price normally is in excess of the purchase price, reflecting an agreed
upon interest rate. This interest rate is effective for the period of time the
Portfolio is invested in the agreement and is not related to the coupon rate on
the underlying security. A repurchase agreement may also be viewed as a fully
collateralized loan of money by a Portfolio to the seller. The period of these
repurchase agreements will usually be short, from overnight to one week, and at
no time will the Portfolios invest in repurchase agreements for more than
thirteen months. The securities which are subject to repurchase agreements,
however, may have maturity dates in excess of thirteen months from the effective
date of the repurchase agreement. The Resolute Treasury Money Market Portfolio
will only enter into repurchase agreements involving U.S. Treasury securities.
The Portfolios will always receive securities as collateral whose market value
is, and during the entire term of the agreement remains, at least equal to 100%
of the dollar amount invested by the Portfolios in each agreement plus accrued
interest, and the Portfolios will make payment for such securities only upon
physical delivery or upon evidence of book entry transfer to the account of the
custodian of the Portfolio. The Resolute Treasury Money Market Portfolio will be
fully collateralized within the meaning of paragraph (a)(3) of Rule 2a-7 under
the Act. If the seller defaults, a Portfolio might incur a loss if the value of
the collateral securing the repurchase agreement declines and might incur
disposition costs in connection with liquidating the collateral. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the security,
realization upon the collateral by a Portfolio may be delayed or limited. See
"INVESTMENT RESTRICTIONS."
Each of the Portfolios (other than the Resolute Treasury Money Market
Portfolio) may make investments in other debt securities with remaining
effective maturities of not more than thirteen months, including without
limitation corporate and bonds of foreign and domestic issuers, asset-backed
securities and other obligations described in the Prospectus or this Statement
of Additional Information.
CORPORATE BONDS AND OTHER DEBT SECURITIES
As discussed in the Prospectus, the Resolute Bond Portfolio may invest in
bonds and other debt securities of domestic and foreign issuers to the extent
consistent with its investment objective and policies. A description of these
investments appears in the Prospectus and below. See "QUALITY AND
DIVERSIFICATION REQUIREMENTS." For information on short-term
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investments in these securities, see "MONEY MARKET INSTRUMENTS."
HIGH YIELD/HIGH RISK BONDS. High-yield/high risk, below investment grade
securities (commonly known as "junk bonds") involve significant credit and
liquidity concerns and fluctuating yields and are not suitable for for short-
term investing. Lower rated bonds also involve the risk that the issuer will not
make interest or principal payments when due. More careful analysis of the
financial condition of each issuer of lower rated securities is therefore
necessary. During an economic downturn or substantial period of rising interest
rates, highly leveraged issuers may experience financial stress which would
adversely affect their ability to service their principal and interest payment
obligations, to meet projected business goals to obtain additional financing.
The market prices of lower grade securities are generally less sensitive to
interest rate changes than higher rated investments, but more sensitive to
adverse economic or political changes or individual developments specific to the
issuer. Periods of economic or political uncertainty and change can be expected
to result in volatility of prices of these securities. Lower rated securities
also may have less liquid markets than higher rated securities, and their
liquidity as well as their value may be more severely affected by adverse
economic conditions. Adverse publicity and investor perceptions as well as new
proposed laws may also heve a greater negative impact on the market for lower
rated bonds.
ASSET-BACKED SECURITIES. Asset-backed securities directly or indirectly
represent a participation interest in, or are secured by and payable from, a
stream of payments generated by particular assets such as motor vehicle or
credit card receivables. Payments of principal and interest may be guaranteed up
to certain amounts and for a certain time period by a letter of credit issued by
a financial institution unaffiliated with the entities issuing the securities.
The asset-backed securities in which a Portfolio may invest are subject to the
Portfolio's overall credit requirements. However, asset-backed securities, in
general, are subject to certain risks. Most of these risks are related to
limited interests in applicable collateral. For example, credit card debt
receivables are generally unsecured and the debtors are entitled to the
protection of a number of state and federal consumer credit laws, many of which
give such debtors the right to set off certain amounts on credit card debt
thereby reducing the balance due. Additionally, if the letter of credit is
exhausted, holders of asset-backed securities may also experience delays in
payments or losses if the full amounts due on underlying sales contracts are not
realized. Because asset-backed securities are relatively new, the market
experience in these securities is limited and the market's ability to sustain
liquidity through all phases of the market cycle has not been tested.
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EQUITY INVESTMENTS
As discussed in the Prospectus, the Resolute Equity, Small Company and
International Equity Portfolios invest primarily in equity securities consisting
of common stock and other securities with equity characteristics. The securities
in which the Portfolios invest include those listed on any domestic or foreign
securities exchange or traded in the over-the-counter markets as well as certain
restricted or unlisted securities. A discussion of the various types of equity
investments which may be purchased by these Portfolios appears in the Prospectus
and below. See "QUALITY AND DIVERSIFICATION REQUIREMENTS."
EQUITY SECURITIES. The common stocks in which the Portfolios may invest include
the common stock of any class or series of domestic or foreign corporations or
any similar equity interest, such as trust or partnership interests. The
Portfolios equity investments may also include preferred stock, warrants, rights
and convertible securities. These investments may or may not pay dividends and
may or may not carry voting rights. Common stock occupies the most junior
position in a company's capital structure.
The convertible securities in which the Portfolios may invest include any
debt securities or preferred stock which may be converted into common stock or
which carry the right to purchase common stock. Convertible securities entitle
the holder to exchange the securities for a specified number of shares of common
stock, usually of the same company, at specified prices within a certain period
of time.
The terms of any convertible security determine its ranking in a company's
capital structure. In the case of subordinated convertible debentures, the
holders' claims on assets and earnings are subordinated to the claims of other
creditors, and are senior to the claims of preferred and common shareholders. In
the case of convertible preferred stock, the holders' claims on assets and
earnings are subordinated to the claims of all creditors and are senior to the
claims of common shareholders.
FOREIGN INVESTMENTS
The Resolute International Equity Portfolio makes substantial investments
in foreign securities. The Resolute Bond, Equity and Small Company Portfolios
may invest in certain foreign securities. The Resolute Bond, Equity and Small
Company Portfolios do not expect to invest more than 25%, 30% and 30%,
respectively, of their respective total assets at the time of purchase in
securities of foreign issuers. All investments of the Resolute Bond Portfolio
must be U.S. dollar-denominated. The Resolute Equity and Small Company
Portfolios do not expect more than 10% of their respective foreign investments
to be in
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securities which are not listed on a national securities exchange or which are
not U.S. dollar-denominated. In the case of the Resolute Bond Portfolio, any
foreign commercial paper must not be subject to foreign withholding tax at the
time of purchase. Foreign investments may be made directly in securities of
foreign issuers or in the form of American Depository Receipts ("ADRs") and
European Depository Receipts ("EDRs").
Generally, ADRs and EDRs are receipts issued by a bank or trust company
that evidence ownership of underlying securities issued by a foreign corporation
and that are designed for use in the domestic, in the case of ADRs, or European,
in the case of EDRs, securities markets.
Since investments in foreign securities may involve foreign currencies, the
value of a Portfolio's assets as measured in U.S. dollars may be affected by
changes in currency rates and in exchange control regulations, including
currency blockage. The Resolute Equity, Small Company and International Equity
Portfolios may enter into forward commitments for the purchase or sale of
foreign currencies in connection with the settlement of foreign securities
transactions or to hedge the underlying currency exposure related to foreign
investments. The Portfolios will not enter into such commitments for speculative
purposes. See "ADDITIONAL INVESTMENT INFORMATION" in the Prospectus.
For a description of the risks associated with investing in foreign
securities, see "ADDITIONAL INVESTMENT INFORMATION" in the Prospectus.
ADDITIONAL INVESTMENTS
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Each of the Portfolios may
purchase securities on a when-issued or delayed delivery basis. For example,
delivery of and payment for these securities can take place a month or more
after the date of the purchase commitment. The purchase price and the interest
rate payable, if any, on the securities are fixed on the purchase commitment
date or at the time the settlement date is fixed. The value of such securities
is subject to market fluctuation and no interest accrues to a Portfolio until
settlement takes place. At the time a Portfolio makes the commitment to purchase
securities on a when-issued or delayed delivery basis, it will record the
transaction, reflect the value each day of such securities in determining its
net asset value and, if applicable, calculate the maturity for the purposes of
average maturity from that date. At the time of settlement a when-issued
security may be valued at less than the purchase price. To facilitate such
acquisitions, each Portfolio will maintain with the Custodian a segregated
account with liquid assets, consisting of cash, U.S. government securities or
other appropriate securities, in an amount at least equal to such commitments.
See "INVESTMENT ADVISORY AND OTHER
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SERVICES" for more information concerning the Custodian to the Trust. On
delivery dates for such transactions, each Portfolio will meet its obligations
from maturities or sales of the securities held in the segregated account and/or
from cash flow. If a Portfolio chooses to dispose of the right to acquire a
when-issued security prior to its acquisition, it could, as with the disposition
of any other portfolio obligation, incur a gain or loss due to market
fluctuation. It is the current policy of each Portfolio not to enter into when-
issued commitments exceeding in the aggregate 15% of the market value of the
Portfolio's total assets, less liabilities other than the obligations created by
when-issued commitments.
INVESTMENT COMPANY SECURITIES. Securities of other investment companies may be
acquired by each of the Portfolios to the extent permitted under the Investment
Company Act of 1940 (the "Act"). These limits require that, as determined
immediately after a purchase is made, (i) not more than 5% of the value of a
Portfolio's total assets will be invested in the securities of any one
investment company, (ii) not more than 10% of the value of its total assets will
be invested in the aggregate in securities of investment companies as a group,
and (iii) not more than 3% of the outstanding voting stock of any one investment
company will be owned by a Portfolio. As a shareholder of another investment
company, a Portfolio would bear, along with other shareholders, its pro-rata
portion of the other investment company's expenses, including advisory fees.
These expenses would be in addition to the advisory and other expenses that a
Portfolio bears directly in connection with its own operations.
REVERSE REPURCHASE AGREEMENTS. Each of the Portfolios may enter into reverse
repurchase agreements. In a reverse repurchase agreement, a Portfolio sells a
security and agrees to repurchase the same security at a mutually agreed upon
date and price (the Resolute Treasury Money Market Portfolio will only enter
into reverse repurchase agreements involving Treasury securities). It may also
be viewed as the borrowing of money by the Portfolio and, therefore, is a form
of leverage. The Portfolios will invest the proceeds of borrowings under reverse
repurchase agreements. In addition, the Portfolios will enter into a reverse
repurchase agreement only when the interest income to be earned from the
investment of the proceeds is greater than the interest expense of the
transaction. The Portfolios will not invest the proceeds of a reverse repurchase
agreement for a period which exceeds the duration of the reverse repurchase
agreement. A Portfolio may not enter into reverse repurchase agreements
exceeding in the aggregate one-third of the market value of its total assets
less liabilities other than the obligations created by reverse repurchase
agreements. Each Portfolio will establish and maintain with the Custodian a
separate account with a segregated portfolio of securities in an
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amount at least equal to its purchase obligations under its reverse repurchase
agreements.
MORTGAGE DOLLAR ROLL TRANSACTIONS. The Resolute Bond Portfolio may engage in
mortgage dollar roll transactions with respect to mortgage securities issued by
the Government National Mortgage Association, the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation. In a mortgage dollar
roll transaction, the Portfolio sells a mortgage backed security and
simultaneously agrees to repurchase a substantially similar security on a
specified future date at an agreed upon price. During the roll period, the
Portfolio will not be entitled to receive any interest or principal paid on the
securities sold. The Portfolio is compensated for the lost interest on the
securities sold by the difference between the sales price and the lower price
for the future repurchase as well as by the interest earned on the reinvestment
of the sales proceeds. The Portfolio may also be compensated by receipt of a
commitment fee. When the Portfolio enters into a mortgage dollar roll
transaction, liquid assets in an amount sufficient to pay for the future
repurchase are segregated with its custodian. Mortgage dollar roll transactions
are considered reverse repurchase agreements for purposes of the Portfolio's
investment restrictions.
LOANS OF PORTFOLIO SECURITIES. Each of the Portfolios may lend its securities
if such loans are secured continuously by cash or equivalent collateral or by a
letter of credit in favor of the Portfolio at least equal at all times to 100%
of the market value of the securities loaned, plus accrued interest. While such
securities are on loan, the borrower will pay the Portfolio any income accruing
thereon. Loans will be subject to termination by the Portfolios in the normal
settlement time, currently five business days after notice, or by the borrower
on one day's notice. Borrowed securities must be returned when the loan is
terminated. Any gain or loss in the market price of the borrowed securities
which occurs during the term of the loan inures to a Portfolio and its
respective shareholders. The Portfolio may pay reasonable finders' and custodial
fees in connection with a loan. In addition, the Portfolios will consider all
facts and circumstances including the creditworthiness of the borrowing
financial institution, and the Portfolios will not make any loans in excess of
one year. The Portfolios will not lend their securities to any officer, Trustee,
Director, employee, or affiliate of the Portfolios, or the Investment Manager,
Sub-Adviser, any administrator or distributor of the Trust, unless otherwise
permitted by applicable law.
PRIVATELY PLACED AND CERTAIN UNREGISTERED SECURITIES. Each of the Portfolios
(except the Resolute Treasury Money Market Portfolio) may invest in privately
placed, restricted, Rule 144A or other unregistered securities as described in
the Prospectus.
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QUALITY AND DIVERSIFICATION REQUIREMENTS
As diversified investment companies, 75% of the assets of each of the
Portfolios is subject to the following fundamental limitations: (1) the
Portfolio may not invest more than 5% of its total assets in the securities of
any one issuer, except obligations of the U.S. Government, its agencies and
instrumentalities, and (2) the Portfolio may not own more than 10% of the
outstanding voting securities of any one issuer. As for the other 25% of a
Portfolio's assets not subject to the limitation described above, there is no
limitation on investment of these assets under the Act, so that all of such
assets may be invested in securities of any one issuer, subject to the
limitation of any applicable state securities laws, or with respect to the
Resolute Treasury Money Market Portfolio, as described below. Investments not
subject to the limitations described above could involve an increased risk to a
Portfolio should an issuer, or a state or its related entities, be unable to
make interest or principal payments or should the market value of such
securities decline.
THE RESOLUTE TREASURY MONEY MARKET PORTFOLIO. In order to attain its investment
objective, the Resolute Treasury Money Market Portfolio will limit its
investments to direct obligations of the U.S. Treasury including Treasury Bills,
Notes and Bonds with remaining maturities of thirteen months or less at the time
of purchase and will maintain a dollar-weighted average portfolio maturity of
not more than 90 days.
THE RESOLUTE BOND PORTFOLIO. The Resolute Bond Portfolio invests principally in
a diversified portfolio of "high quality" and "investment grade securities."
Investment grade debt is rated, on the date of investment, within the four
highest ratings of Moody's Investors Services, Inc. ("Moody's"), currently Aaa,
Aa, A and Baa or of Standard & Poor's Corporation ("Standard & Poor's"),
currently AAA, AA, A and BBB, while high grade debt is rated on the date of the
investment within the three highest of such ratings. The Portfolio may also
invest up to 5% of its total assets in securities which are "below investment
grade." Such securities must be rated, on the date of investment, Ba by Moody's
or BB by Standard & Poor's. The Portfolio may invest in debt securities which
are not rated or other debt securities to which these ratings are not applicable
if, in the opinion of the Sub-Adviser, such securities are of comparable quality
to the rated securities discussed above. In addition, at the time the Portfolio
invests in any commercial paper, bank obligation or repurchase agreement, the
issuer must have outstanding debt rated A or higher by Moody's or Standard &
Poor's, the issuer's parent corporation, if any, must have outstanding
commercial paper rated Prime-1 by Moody's or A-1 by Standard & Poor's, or if no
such ratings are available, the investment must be of comparable quality in the
Sub-Adviser's opinion.
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THE RESOLUTE EQUITY, SMALL COMPANY AND INTERNATIONAL EQUITY PORTFOLIOS. The
Resolute Equity, Small Company and International Equity Portfolios may invest in
convertible debt securities, for which there are no specific quality
requirements. In addition, at the time the Portfolio invests in any commercial
paper, bank obligation or repurchase agreement, the issuer must have outstanding
debt rated A or higher by Moody's or Standard & Poor's, the issuer's parent
corporation, if any, must have outstanding commercial paper rated Prime-1 by
Moody's or A-1 by Standard & Poor's or if no such ratings are available, the
investment must be of comparable quality in the Sub-Adviser's opinion. At the
time the Portfolio invests in any other short-term debt securities, they must be
rated A or higher by Moody's or Standard & Poor's, or if unrated, the investment
must be of comparable quality in the Sub-Adviser's opinion.
In determining the suitability of investment in a particular unrated
security the Sub-Adviser takes into consideration asset and debt service
coverage, the purpose of the financing, history of the issuer, existence of
other rated securities of the issuer, and other relevant conditions such as
comparability to other issuers.
OPTIONS AND FUTURES TRANSACTIONS
EXCHANGE TRADED AND OVER THE COUNTER OPTIONS. All options purchased or sold by
the Portfolios will be traded on a securities exchange or will be purchased or
sold by securities dealers ("over the counter" or "OTC" options) that meet
creditworthiness standards approved by the Board. While exchange-traded options
are obligations of the Options Clearing Corporation, in the case of OTC options,
a Portfolio relies on the dealer from which it purchased the option to perform
if the option is exercised. Thus, when a Portfolio purchases an OTC option, it
relies on the dealer from which it purchased the option to make or take delivery
of the underlying securities. Failure by the dealer to do so would result in the
loss of the premium paid by the Portfolio as well as loss of the expected
benefit of the transaction.
The staff of the Securities and Exchange Commission ("SEC") has taken the
position that, in general, purchased OTC options and the underlying securities
used to cover written OTC options are illiquid securities. However, a Portfolio
may treat as liquid the underlying securities used to cover written OTC options,
provided it has arrangements with certain qualified dealers who agree that the
Portfolio may repurchase any option it writes for a maximum price to be
calculated by a predetermined formula. In these cases, the OTC option itself
would only be considered illiquid to the extent that maximum repurchase price
under the formula exceeds the intrinsic value of the option.
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FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Portfolios may purchase
or sell futures contracts and purchase put and call options and sell (write)
covered put and call options on futures contracts. Futures contracts obligate
the buyer to take and the seller to make delivery at a future date of a
specified quantity of a financial instrument or an amount of cash based on the
value of a securities index. Currently, futures contracts are available on
various types of fixed-income securities, including but not limited to U.S.
Treasury bonds, notes and bills, Eurodollar certificates of deposit and on
indexes of fixed income securities and indexes of equity securities.
Unlike a futures contract, which requires the parties to buy and sell a
security or make a cash settlement payment based on changes in a financial
instrument or securities index on an agreed date, an option on a futures
contract entitles its holder to decide on or before a future date whether to
enter into such a contract. If the holder decides not to exercise its option,
the holder may close out the option position by entering into an offsetting
transaction or may decide to let the option expire and forfeit the premium
thereon. The purchaser of an option on a futures contract pays a premium for the
option but makes no initial margin payments or daily payments of cash in the
nature of "variation" margin payments to reflect the change in the value of the
underlying contract as does a purchaser or seller of a futures contract.
The seller of an option on a futures contract receives the premium paid by
the purchaser and may be required to pay initial margin. Amounts equal to the
initial margin and any additional collateral required on any options on futures
contracts sold by a Portfolio are paid by the Portfolio into a segregated
account, in the name of the Futures Commission Merchant ("FCM"), as required by
the Act and the SEC's interpretations thereunder.
COMBINED POSITIONS. The Portfolios may purchase and write options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the overall
position.
For example, a Portfolio may purchase a put option and write a call option on
the same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at one
strike price and buying a call option at a lower price, in order to reduce the
risk of the written call option in the event of a substantial price increase.
Because combined options positions involve multiple trades, they result in
higher transaction costs and may be more difficult to open and close out.
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CORRELATION OF PRICE CHANGES. Because there are a limited number of types of
exchange-traded options and futures contracts, it is likely that the
standardized options and futures contracts available will not match a
Portfolio's current or anticipated investments exactly. A Portfolio may invest
in options and futures contracts based on securities with different issuers,
maturities, or other characteristics from the securities in which it typically
invests, which involves a risk that the options or futures position will not
track the performance of the Portfolio's other investments.
Options and futures contracts prices can also diverge from the prices of
their underlying instruments, even if the underlying instruments match the
Portfolio's investments well. Options and futures contracts prices are affected
by such factors as current and anticipated short term interest rates, changes in
volatility of the underlying instrument, and the time remaining until expiration
of the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options and
futures markets and the securities markets, from structural differences in how
options and futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A Portfolio may purchase or sell options
and futures contracts with a greater or lesser value than the securities it
wishes to hedge or intends to purchase in order to attempt to compensate for
differences in volatility between the contract and the securities, although this
may not be successful in all cases. If price changes in a Portfolio's options or
future positions are poorly correlated with its other investments, the positions
may fail to produce anticipated gains or result in losses that are not offset by
gains in other investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
market will exist for any particular option or futures contract at any
particular time even if the contract is traded on an exchange. In addition,
exchanges may establish daily price fluctuation limits for options and futures
contracts and may halt trading if a contract's price moves up or down more than
the limit on a given day. On volatile trading days when the price fluctuation
limit is reached or a trading halt is imposed, it may be impossible for a
Portfolio to enter into new positions or close out existing positions. If the
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions, and
could potentially require a Portfolio to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, the
Portfolio's access to other assets held to cover its options or futures
positions could also be impaired. (See "EXCHANGE TRADED AND OVER THE COUNTER
OPTIONS" above for a discussion of the liquidity of options not traded on an
exchange.)
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POSITION LIMITS. Futures exchanges can limit the number of futures and options
on futures contracts that can be held or controlled by an entity. If an adequate
exemption cannot be obtained, a Portfolio or the Sub-Adviser may be required to
reduce the size of its futures and options positions or may not be able to trade
a certain futures or options contract in order to avoid exceeding such limits.
ASSETS COVERAGE FOR FUTURES CONTRACTS AND OPTIONS POSITIONS. The Portfolios
intend to comply with Section 4.5 of the regulations under the Commodity
Exchange Act, which limits the extent to which a Portfolio can commit assets to
initial margin deposits and option premiums. In addition, the Portfolios will
comply with guidelines established by the SEC with respect to coverage of
options and futures contracts by mutual funds, and if the guidelines so require,
will set aside appropriate liquid assets in a segregated custodial account in
the amount prescribed. Securities held in a segregated account cannot be sold
while the futures contract or option is outstanding, unless they are replaced
with other suitable assets. As a result, there is a possibility that segregation
of a large percentage of a portfolio assets could impede portfolio management or
the Portfolio's ability to meet redemption requests or other current
obligations.
RISK MANAGEMENT
The Portfolios may employ non-hedging risk management techniques. Examples
of such strategies include synthetically altering the duration of a portfolio or
the mix of securities in a portfolio. For example, if the Sub-Adviser wishes to
extend maturities in a fixed income portfolio in order to take advantage of an
anticipated decline in interest rates, but does not wish to purchase the
underlying long-term securities, it might cause the portfolio to purchase
futures contracts on long-term debt securities. Similarly, if the Sub-Adviser
wished to decrease fixed income securities or purchase equities, it could cause
the portfolio to sell futures contracts on debt securities and purchase future
contracts on a stock index. Such non-hedging risk management techniques are not
speculative, but because they involve leverage include, as do all leveraged
transactions, the possibility of losses as well as gains that are greater than
if these techniques involved the purchase and sale of the securities themselves
rather than their synthetic derivatives.
INVESTMENT RESTRICTIONS
-----------------------
FUNDAMENTAL INVESTMENT RESTRICTIONS
The investment restrictions below have been adopted by the Trust with
respect to each Portfolio. Except where otherwise noted, these investment
restrictions are "fundamental" policies that, under the Act, may not be changed
without the vote of a
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majority of the outstanding voting securities of the Portfolio, respectively, to
which it relates. A "majority of the outstanding voting securities" is defined
in the Act as the lesser of (a) 67% or more of the shares present at a
shareholders meeting if the holders of more than 50% of the outstanding shares
are present and represented by proxy, or (b) more than 50% of the outstanding
shares. The percentage limitations contained in the restrictions below apply at
the time of the purchase of securities.
Unless Sections 8(b)(1) and 13(a) of the 1940 Act or any SEC or SEC Staff
interpretations thereof, are amended or modified, each of THE RESOLUTE TREASURY
MONEY MARKET, BOND, EQUITY, SMALL COMPANY AND INTERNATIONAL EQUITY PORTFOLIOS
may not:
1. Purchase any security if, as a result, more than 25% of the value of the
Portfolios' total assets would be invested in securities of issuers having
their principal business activities in the same industry. This limitation
shall not apply to obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities;
2. Borrow money, except that the Portfolio may (i) borrow money from banks for
temporary or emergency purposes (not for leveraging purposes) and (ii)
enter into reverse repurchase agreements for any purpose; provided that (i)
and (ii) in total do not exceed 33 1/3% of the value of the Portfolio's
total assets (including the amount borrowed) less liabilities (other than
borrowings). If at any time any borrowings come to exceed 33 1/3% of the
value of the Portfolio's total assets, the Portfolio will reduce its
borrowings within three business days to the extent necessary to comply
with the 33 1/3% limitation;
3. With respect to 75% of its total assets, purchase any security if, as a
result, (a) more than 5% of the value of the Portfolio's total assets would
be invested in securities or other obligations of any one issuer; or (b)
the Portfolio would hold more than 10% of the outstanding voting securities
of that issuer. This limitation shall not apply to Government securities
(as defined in the Act);
4. Make loans to other persons, except through the purchase of debt
obligations (including privately placed securities), loans of portfolio
securities, and participation in repurchase agreements;
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5. Purchase or sell physical commodities or contracts thereon, unless acquired
as a result of the ownership of securities or instruments, but the
Portfolio may purchase or sell futures contracts or options (including
options on futures contracts, but excluding options or futures contracts on
physical commodities) may enter into foreign currency forward contracts;
6. Purchase or sell real estate, but the Portfolio may purchase or sell
securities that are secured by real estate or issued by companies
(including real estate investment trusts) that invest or deal in real
estate;
7. Underwrite securities of other issuers, except to the extent the Portfolio,
in disposing of portfolio securities, may be deemed an underwriter within
the meaning of the Securities Act of 1933, as amended; and
8. Issue senior securities, except as permitted under the Act or any rule,
order or interpretation thereunder.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
The investment restrictions that follow are not fundamental policies of the
respective Portfolios and may be changed by the Board.
THE RESOLUTE TREASURY MONEY MARKET PORTFOLIO may not:
(i) acquire any illiquid securities if as a result thereof, more than 10%
of the market value of the Portfolio's total assets would be in investments that
are illiquid.
THE RESOLUTE BOND, EQUITY, SMALL COMPANY AND INTERNATIONAL EQUITY PORTFOLIOS
may not:
(i) Acquire securities of other investment companies, except as permitted
by the Act or any rule, order or interpretation thereunder, or in connection
with a merger, consolidation, reorganization, acquisition of assets or an offer
of exchange;
(ii) invest in warrants (other than warrants acquired by the Portfolio as
part of a unit or attached to securities at the time of purchase) if, as a
result, the investments (valued at the lower of cost or market) would exceed 5%
of the value of the Portfolio's net assets or if, as a result, more than 2% of
the Portfolio's net assets would be invested in warrants not listed on a
recognized U.S. or foreign stock exchange, to the extent permitted by applicable
state securities laws.
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(iii) Acquire any illiquid securities if as a result thereof, more than 15%
of the market value of the Portfolio's total assets would be in investments that
are illiquid;
(iv) Purchase any security if, as a result, the Portfolio would then have
more than 5% of its total assets invested in securities of companies (including
predecessors) that have been in continuous operation for fewer than three years;
(v) Sell any security short, unless it owns or has the right to obtain
securities equivalent in kind and amount to the securities sold or unless it
covers such short sales as required by the current rules or positions of the SEC
or its staff. Transactions in futures contracts and options shall not constitute
selling securities short;
(vi) Purchase securities on margin, but the Portfolio may obtain such short
term credits as may be necessary for the clearance of transactions;
(vii) Purchase securities of any issuer if, to the knowledge of the Trust,
any of the Trust's officers or Trustees or any officer of the Investment Manager
or Sub-Adviser, would after the Portfolio's purchase of the securities of such
issuer, individually own more than 1/2 of 1% of the issuer's outstanding
securities and such persons owning more than 1/2 of 1% of such securities
together beneficially would own more than 5% of such securities, all taken at
market; or
(viii) Invest in real estate limited partnerships or purchase interests in
oil, gas or mineral exploration or development programs or leases.
TRUSTEES AND OFFICERS
---------------------
The Trustees and Officers of the Trust, their business addresses, and their
principal occupations during the past five years are set forth below.
S-21
<PAGE>
<TABLE>
<CAPTION>
Position with Principal Occupations
Name and Address Trust/Portfolios During Past Five Years
- ---------------- ---------------- ----------------------
<S> <C> <C>
Bruce R. Stefany President Senior Vice President
One Granite Place,; of Chubb Life;
Concord, NH 03301 President and Director
of Chubb America Fund,
Inc., Chubb Investment
Advisory Corporation,
Chubb Securities
Corporation and
Hampshire Funding,
Inc.; Senior Vice
President and Director
of Chubb Investment
Funds, Inc.
James R. Wagner, Jr.* Trustee Senior Vice President
One Granite Place of Chubb Life, Chubb
Concord, NH 03301 America Service
Corporation, the
Colonial Life Insurance
Company of America;
previously Agent
Manager of Crown Life
Harry H. Bird M.D. Trustee Retired, previously
One Allen Lane Commissioner, Office
Hanover, N.H of Health and Human
Services, State of New
Hampshire, President,
the Hitchock Clinic,
Anesthesilogist
Charles E. Clough* Trustee Manager, Freedom Energy
P.O. Box 2002 Company LLC.,
Nashua, NH 03061 Previously, Chairman
and Chief Executive
Officer of Nashua
Corporation
Peggy A. Stock Trustee President, Colby-Sawyer
100 Main Street College
New London, N.H. 03257
</TABLE>
S-22
<PAGE>
<TABLE>
<CAPTION>
Position with Principal Occupations
Name and Address Trust/Portfolios During Past Five Years
- ---------------- ---------------- ----------------------
<S> <C> <C>
Charles C. Cornelio Vice President, and Senior Vice President,
One Granite Place General Counsel Chief Administrative
Concord, N.H. 03301 Officer and Counsel
Chubb Life; Vice
President and General
Counsel and Secretary
Chubb Securities
Corporation and
Hampshire Funding Inc.;
Vice President and
General Counsel Chubb
Investment Funds, Inc.
and Chubb America Fund,
Inc.; and Secretary of
Chubb Investment
Advisory Corporation,
Director, UST Master
Variable Series, Inc.
Shari J. Lease Secretary Assistant Vice
One Granite Place President and Counsel,
Concord, N.H. 03301 Chubb Life; Secretary,
Chubb Investment Funds,
Inc. and Chubb America
Fund, Inc.; Assistant
Secretary, Chubb
Investment Advisory,
previously Assistant
Counsel and Assistant
Vice President, State
Bond and Mortgage
Company and affiliated
companies
</TABLE>
S-23
<PAGE>
<TABLE>
<CAPTION>
Position with Principal Occupations
Name and Address Trust/Portfolios During Past Five Years
- ---------------- ---------------- ----------------------
<S> <C> <C>
John A. Weston Treasurer Assistant Vice
One Granite Place President, Mutual Fund
Concord, N.H. 03301 Accounting Officer of
ChubbLife; Treasurer
of Chubb Securities
Corporation, Chubb
Investment Advisory and
Hampshire Funding,
Inc.; formerly, Mutual
Fund Accounting Manager
for the Fund, Chubb
Investment Funds, Inc.
and Chubb Investment
Advisory Corporation
and Assistant Treasurer
for Chubb Securities
Corporation and
Hampshire Funding, Inc.
Thomas H. Elwood Assistant Assistant Counsel of
One Granite Place Secretary Chubb Life, Assistant
Concord, N.H. 03301 Secretary Chubb
Investment Funds, Inc.,
and Chubb America Fund,
formerly, Associate
Counsel, New York Life
Insurance Company;
Secretary New York Life
Institutional Funds,
Inc., Assistant
Secretary, MainStay
Funds, and MFA Funds
</TABLE>
S-24
<PAGE>
<TABLE>
<CAPTION>
Position with Principal Occupations
Name and Address Trust/Portfolios During Past Five Years
- ---------------- ---------------- ----------------------
<S> <C> <C>
Mark D. Landry Assistant Senior Fund Accountant
One Granite Place Treasurer for Chubb Life and
Concord, NH 03301, Chubb Investment
Advisory Corporation;
Assistant Treasurer of
Chubb America Fund,
Inc. and Chubb
Investment Funds, Inc;
formerly Fund
Accountant for Chubb
America Fund, Inc.,
Chubb Investment Funds,
Inc. and Chubb
Investment Advisory
Corporation
</TABLE>
* Asterisks indicate those trustees who are "interested persons" within the
meaning of Section 2(a)(19) of the Act.
S-25
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT MANAGEMENT AGREEMENT AND SUB-ADVISORY AGREEMENT
The Trust has entered into Investment Management Agreements with Chubb
Investment Advisory Corporation ("Chubb Investment Advisory" or the "Investment
Manager") with respect to each of the Portfolios. The Trust and Chubb Investment
Advisory have also executed Sub-Advisory Agreements with Morgan Guaranty Trust
Company of New York, (the "Sub-Adviser" or "Morgan") with respect to each of the
Portfolios.
The Investment Management Agreement provides that Chubb Investment
Advisory, subject to control and review by the Board, is responsible for the
overall management and supervision of each Portfolio and for providing certain
administrative services to the Trust. See "MANAGEMENT OF THE TRUST AND
PORTFOLIOS" in the Prospectus. The Sub-Advisory Agreement provides that the Sub-
Adviser, subject to review by the Board and by Chubb Investment Advisory, has
the day-to-day responsibility for making decisions to buy, sell or hold any
particular security or other instrument for each Portfolio which it advises.
Chubb Investment Advisory, the Sub-Adviser and its affiliates may provide
investment advice to other clients, including, but not limited to, mutual funds,
individuals, pension funds and other institutional investors. In addition,
persons employed by Chubb Investment Advisory, who are also investment personnel
of Chubb & Son, Inc., may also provide investment advice to, supervise and
monitor investment portfolios for The Chubb Corporation and its affiliates,
including general accounts of the insurance affiliates of The Chubb Corporation.
Some of the advisory accounts of Chubb Investment Advisory, the Sub-Adviser, and
their affiliates may have investment objectives and investment programs similar
to those of the Portfolios. Accordingly, occasions may arise when securities
that are held by other advisory accounts, or that are currently being purchased
or sold for other advisory accounts, are also being selected for purchase or
sale for a Portfolio. It is the practice of Chubb Investment Advisory, the Sub-
Adviser and their affiliates to allocate such purchases or sales insofar as
feasible among their several clients in a manner they deem equitable, to all
accounts involved. Under normal circumstances, pursuant to procedures
established by the Board, such transactions will be (1) done on a pro-rata basis
substantially in proportion to the amounts ordered by each account, (2) entered
into only if the trade is likely to produce a benefit for the Portfolios, and
(3) at the same average price for each client. While it is conceivable that in
certain instances this procedure could adversely affect the price or number of
shares involved in the Trust's transaction, it is believed that the procedure
generally contributes to better overall execution of the Trust's portfolio
transactions. It is
S-26
<PAGE>
also the policy of Chubb Investment Advisory, the Sub-Adviser, and each of their
affiliates not to favor any one account over the other.
For providing investment advisory and management services to the Trust,
Chubb Investment Advisory receives monthly compensation from the Trust and has
sole responsibility to provide the Sub-Adviser, with monthly compensation at
annual rates computed as described under "MANAGEMENT OF THE TRUST AND
PORTFOLIOS" in the Prospectus.
The Investment Management Agreements also obligate Chubb Investment
Advisory to perform certain administrative services which are described more
completely in the Prospectus. Certain of these functions have been delegated to
the Sub-Adviser.
The Investment Management Agreements and the Sub-Advisory Agreements were
approved by the Board on June 3, 1994 and by Chubb Life, the sole shareholder,
on September 7, 1994. Unless earlier terminated, each Agreement will remain in
effect as to the applicable Portfolio from year to year with respect to each
such Portfolio, if approved annually (1) by the Board or by a majority of the
outstanding shares of the Portfolio, and (2) by a majority of members of the
Board who are not interested persons, within the meaning of the Act, of any
party to such Agreement. The Agreements are not assignable and may be terminated
without penalty on 60 days' written notice at the option of any party or, with
respect to any Portfolio, by the requisite vote of the shareholders of that
Portfolio. See "CAPITAL SHARES" in this Statement of Additional Information.
INDEPENDENT AUDITORS
Ernst & Young, 200 Clarendon Street, Boston, Massachusetts 02116, has been
selected as the independent auditors of the Trust.
CUSTODIAN
Morgan located at 60 Wall Street, New York, New York 10260, ("Morgan")
holds the Trust's assets in safekeeping consistent with requirements of the Act.
Morgan is a wholly owned subsidiary of J.P. Morgan & Co. Incorporated. See
"MANAGEMENT OF THE TRUST AND PORTFOLIOS" in the Prospectus. As mentioned above
Morgan also acts as sub-adviser to the Portfolios. By virtue of the dual role of
Morgan as custodian and sub-adviser, the Trust assets are deemed to be held in a
self custodianship arrangement.
The Trust has also appointed, with the approval of the Board, and in the
future may appoint from time to time, sub- custodians, qualified under Rule
17f-5 of the Act, with respect
S-27
<PAGE>
to certain foreign securities. The Trust may authorize Morgan to enter into an
agreement with any U.S. banking institution or trust company to act as a sub-
custodian pursuant to a resolution of the Board. Securities owned by the Trust
subject to repurchase agreements may be held in the custody of other U.S. banks.
PAYMENT OF EXPENSES
Chubb Investment Advisory is obligated to assume the cost of certain
administrative expenses for the Trust, as described in the Prospectus under the
heading "MANAGEMENT OF THE TRUST AND PORTFOLIOS." The Trust pays the following
expenses: brokerage commissions and transfer taxes; other state, federal and
local taxes and filing fees; fees and expenses of qualification of the Trust and
its shares under federal and state securities laws subsequent to the effective
date of this Statement of Additional Information; compensation of Trustees who
are not interested persons of the Trust ("disinterested Trustees"); travel
expenses of disinterested Trustees; interest and other borrowing costs;
extraordinary or nonrecurring expenses such as litigation; costs of printing and
distributing communications to current policyowners; insurance premiums; charges
and expenses of the custodian, independent auditors, and counsel; industry
association dues; and other expenses not expressly assumed by Chubb Investment
Advisory. See "OFFERING AND REDEMPTION OF SHARES" below.
Chubb Life and Morgan have agreed to equally assume the expenses of the
Trust for the first two years of its operation in excess of applicable expense
caps on a per Portfolio basis ("Assumption of Expenses Agreement"). Pursuant to
the Assumption of Expenses Agreement, Chubb Life and Morgan will each pay fifty
percent of the Trust's ordinary and recurring expenses that exceed .60%, .75%,
.90%, 1.15% and 1.20% of the average daily net asset value respectively of the
Resolute Treasury Money Market, Bond, Equity, Small Company and International
Equity Portfolios. For these purposes, ordinary and recurring expenses generally
includes those expenses the Trust is reasonably expected to incur in its day-to-
day operations.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATIONS
Under the Investment Management Agreements, Chubb Investment Advisory has
ultimate authority to select broker-dealers through which securities are to be
purchased and sold, subject to the general control of the Board. Under the Sub-
Advisory Agreement, the Sub-Adviser has the day-to-day responsibility for
selecting broker-dealers through which securities are to be purchased and sold,
subject to Chubb Investment Advisory's overall monitoring and supervision and
any standards and procedures established by the Board. The Sub-Adviser provides
the trading desk for their
S-28
<PAGE>
respective Portfolio transactions. Chubb Investment Advisory will perform daily
valuation of the assets of each Portfolio.
The Resolute Treasury Money Market Portfolio's investments usually will be
purchased on a principal basis directly from issuers, underwriters or dealers.
Accordingly, minimal brokerage charges are expected to be paid on such
transactions. Purchases from an underwriter generally include a commission or
concession paid by the issuer, and transactions with a dealer usually include
the dealer's mark-up.
Insofar as known to management, no trustee, director or officer of the
Trust, Chubb Investment Advisory, the Sub-Adviser or any person affiliated with
any of them has any material direct or indirect interest in any broker-dealer
employed by or on behalf of the Trust.
In selecting broker-dealers to execute transactions for the Trust, the
Sub-Adviser is obligated to use its best effort to obtain for each Portfolio the
most favorable overall price and execution available, considering all the
circumstances. Such circumstances include the price of the security, the size of
the broker-dealer's "spread" or commission, the willingness of the broker-dealer
to position the trade, the reliability, financial strength and stability and
operational capabilities of the broker-dealer, the ability to effect the
transaction at all where a large block is involved, the availability of the
broker-dealer to stand ready to execute possibly difficult transactions in the
future, including broker-dealers who specialize in any Canadian or foreign
securities held by the Portfolios. Such considerations are judgmental and are
weighed by the Sub-Adviser in seeking the most favorable overall economic result
for the Trust, including past experience as to choosing qualified
broker-dealers.
Notwithstanding the foregoing, however, and subject to appropriate policies
and procedures as then approved by the Board, Chubb Investment Advisory and the
Sub-Adviser are authorized to allocate portfolio transactions to broker-dealers
who have provided brokerage and research services, as such services are defined
in Section 28(e) of the Securities and Exchange Act of 1934, for the Portfolios
or other advisory accounts as to which Chubb Investment Advisory or the Sub-
Adviser may cause the Portfolios to pay a broker-dealer a commission for
effecting a securities transaction in excess of the amount another broker-dealer
would have charged for effecting the same transaction, if Chubb Investment
Advisory or the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services, as defined above, provided by such broker-dealer viewed in terms of
either that particular transaction or the overall responsibilities of Chubb
Investment Advisory or the Sub-Adviser
S-29
<PAGE>
with respect to the Portfolios or their other advisory accounts. Such brokerage
and research services may include, among other things, analyses and reports
concerning issuers, industries, securities, economic factors and trends, and,
portfolio strategy. Such brokerage and research services may be used by Chubb
Investment Advisory or the Sub-Adviser in connection with any other advisory
accounts managed by it. Conversely, research services for any other advisory
accounts may be used by the Sub-Adviser or Chubb Investment Advisory in managing
the investments of a Portfolio. Chubb Investment Advisory or a Sub-Adviser may
also receive from such broker-dealers quotations for Portfolio valuation
purposes, provided that this results in no additional cost to the Trust.
The Sub-Adviser will use its best efforts to recapture all available tender
offer solicitation fees and similar payments in connection with tenders of the
securities of the Trust and to advise the Trust of any fees or payment of
whatever type which it may be possible to obtain for the Trust's benefit in
connection with the purchase or sale of Trust securities.
The Sub-Adviser and Chubb Investment Advisory may combine transactions for
the Trust with transactions for other accounts managed by them or their
affiliates, including other investment companies registered under the Act, as
previously described above. Transactions will be combined only when the
transaction meets the Trust's requirements as to selection of brokers or dealers
and negotiation of prices and commissions which the Sub-Adviser would otherwise
apply.
CAPITAL SHARES
The authorized capital of the Trust consists of an unlimited number of
outstanding shares which are divided into five series: Resolute Treasury Money
Market Portfolio, Resolute Bond Portfolio, Resolute Equity Portfolio, Resolute
Small Company Portfolio, Resolute International Equity Portfolio. Each series
currently consists of 100,000,000 shares. The Trust has the right to issue
additional shares without the consent of shareholders, and may allocate its
reissued shares to new series or to one or more of the five existing series.
The assets received by the Trust for the issuance or sale of shares of each
Portfolio and all income, earnings, profits and proceeds thereof are
specifically allocated to each Portfolio. They constitute the underlying assets
of each Portfolio, are required to be segregated on the books of accounts and
are to be charged with the expenses of such Portfolio. Any assets which are not
clearly allocable to a particular Portfolio or Portfolios are allocated in a
manner determined by the Board. Accrued liabilities which are not clearly
allocable to one or more Portfolios would generally be allocated among the
Portfolios in
S-30
<PAGE>
proportion to their relative net assets before adjustment for such unallocated
liabilities. Each issued and outstanding share in a Portfolio is entitled to
participate equally in dividends and distributions declared with respect to such
Portfolio and in the net assets of such Portfolio upon liquidation or
dissolution remaining after satisfaction of outstanding liabilities.
The shares of each Portfolio, when issued, will be fully paid and non-
assessable, will have no preference, preemptive, conversion, exchange or similar
rights, and will be freely transferable. Shares do not have cumulative voting
rights.
Chubb Life provided the initial capital for the Trust by purchasing
$1,000,000 worth of shares of each of the Resolute Bond, Resolute Equity, Small
Company and International Equity Portfolios for its general account. Chubb Life
intends to withdraw such investment from time to time, but has agreed not to
make any request for redemption if it would reduce the Trust's net worth below
$100,000.
The shares held by Chubb Life or its affiliated insurance companies,
including shares for which no voting instructions have been received, shares
held in a separate account representing charges imposed by Chubb Life or its
affiliates and shares held by Chubb Life that are not otherwise attributable to
Policies, will be voted by Chubb Life or its affiliated insurance companies in
proportion to instructions received from the owners of Policies. Chubb Life and
its affiliated insurance companies reserve the right to vote any or all such
shares at their discretion to the extent consistent with then current
interpretations of the Act and rules thereunder.
The officers and Trustees cannot directly own shares of the Trust without
purchasing a Policy. As a result, the amount of shares owned by the Trustees
and officers as a group is less than 1% of each Portfolio.
OFFERING AND REDEMPTION OF SHARES
The Trust offers shares of each Portfolio only for purchase by the
corresponding division of separate accounts established by Chubb Life or its
affiliated insurance companies. It thus will serve as an investment medium for
the Policies offered by Chubb Life and its affiliated insurance companies. The
offering is without a sales charge and is made at each Portfolio's net asset
value per share, which is determined in the manner set forth below under
"DETERMINATION OF NET ASSET VALUE." In the future, the shares of the Trust may
be offered to additional separate accounts of Chubb Life, its successors or
assigns, or of its affiliated insurance companies.
S-31
<PAGE>
The Trust redeems all full and fractional shares of the Trust at the net
asset value per share applicable to each Portfolio. See "DETERMINATION OF NET
ASSET VALUE" below.
Redemptions are normally made in cash, but the Trust has authority, at its
discretion, to make full or partial payment by assignment to the separate
account of portfolio securities at their value used in determining the
redemption price. The Trust, nevertheless, pursuant to Rule 18f-1 under the
1940 Act, has filed a notification of election on Form N-18f-1, by which the
Trust has committed itself to pay to the separate account in cash, all such
separate account's requests for redemption made during any 90-day period, up to
the lesser of $250,000 or 1% of the applicable Portfolio's net asset value at
the beginning of such period. The securities, if any, to be paid in-kind to the
separate account will be selected in such manner as the Board deems fair and
equitable. In such cases, the separate account would incur brokerage costs
should it wish to liquidate these portfolio securities.
The right to redeem shares or to receive payment with respect to any
redemption of shares of any Portfolio may only be suspended (1) for any period
during which trading on the New York Stock Exchange is restricted or such
Exchange is closed, other than customary weekend and holiday closings, (2) for
any period during which an emergency exists as a result of which disposal of
securities or determination of the net asset value of that Portfolio is not
reasonably practicable, or (3) for such other periods as the SEC may by order
permit for the protection of shareholders of the Portfolio.
DETERMINATION OF NET ASSET VALUE
The net asset value of the shares of each Portfolio of the Trust is
determined immediately after the declaration by the Trust of dividends, if any,
as of the close of regular trading on the New York Stock Exchange (presently
4:00 P.M.), on each day during which the New York Stock Exchange is open for
trading. The New York Stock Exchange is open from Monday through Friday except
on the following national holidays: New Years Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
In the event that any of the above holidays falls on a Sunday, it is regularly
observed on the following Monday. The net asset value per share of each
Portfolio is computed by dividing the sum of the value of the securities held by
that Portfolio, plus any cash or other assets and minus all liabilities by the
total number of outstanding shares of the Portfolio at such time. Any expenses
borne by the Trust, including the investment management fee payable to Chubb
Investment Advisory, are accrued daily except for extraordinary or non-recurring
expenses. See "INVESTMENT ADVISORY AND OTHER SERVICES" above.
S-32
<PAGE>
Portfolio securities which are traded on national stock exchanges are
valued at the last sale price as of the close of business of the New York Stock
Exchange on the day the securities are being valued, or, lacking any sales, at
the mean between the closing bid and asked prices.
Securities traded in the over-the-counter market are valued at the closing
sales price as reported on a readily available market quotation system, or, if
no sale took place, the mean between the bid and asked prices. Securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by the Board.
Quotations of foreign securities in foreign currencies are converted to
U.S. dollar equivalents using appropriately translated foreign market closing
prices.
U.S. Treasury securities and other obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities with remaining maturities of
more than 60 days, are valued at representative quoted prices from bond pricing
services.
Long-term publicly traded corporate bonds are valued at prices obtained
from a bond pricing service when such prices are available or, when appropriate,
from broker-dealers who make a market in those securities.
Debt instruments with a remaining maturity of 60 days or less are valued on
an amortized cost basis. Under this method of valuation, the security is
initially valued at cost on the date of purchase or, in the case of securities
purchased with more than 60 days remaining to maturity, the market value on the
61st day prior to maturity. Thereafter, a constant proportionate amortization
in value is assumed until maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the security. The
amortized cost value of the security may be either more or less than the market
value at any given time. If for any reason the fair value of any security is
not fairly reflected through the amortized cost method of valuation, such
security will be valued by market quotations, if available, otherwise as
determined in good faith by the Board.
TAXES
In order for each Portfolio of the Trust to qualify for Federal income tax
treatment as a regulated investment company, at least 90% of its gross income
for a taxable year must be derived from qualifying income, i.e., dividends,
interest, income derived from loans of securities, and gains from the sale of
securities. In addition, in general, gains realized on the sale
S-33
<PAGE>
or other disposition of securities held for less than three months must be
limited to less than 30% of each Portfolio's annual gross income. It is the
Trust's policy to comply with the provisions of the Internal Revenue Code of
1986, as amended (the "Code") regarding distribution of investment income and
capital gains so that each Portfolio will not be subject to Federal income tax
on amounts distributed and undistributed or an excise tax on certain
undistributed income or capital gains. For these purposes, if a regulated
investment company declares a dividend in December to shareholders of record in
December and pays such dividends before the end of January they will be treated
as paid in the preceding calendar year and to have been received by such
shareholder in December.
Federal Tax Matters. A policyowner's interest in earnings on assets held
in a separate account and invested in the Trust are not includible in the
policyowner's gross income because the Policies presently qualify as life
insurance contracts for federal income tax purposes.
The Trust intends that each Portfolio comply with Section 817(h) of the
Code and the regulations thereunder. Pursuant to that Section, the only
shareholders of the Trust and its Portfolios will be separate accounts funding
variable annuities and variable life insurance policies established by Chubb
Life, its successors and assigns or by other insurance companies with which
Chubb Life is affiliated and Chubb Life's general account which provided the
initial capital for the Portfolios.
In addition, Section 817(h) of the Code and the regulations thereunder
impose diversification requirements on the separate accounts and on the
Portfolios. These diversification requirements are in addition to the
diversification requirements imposed by the Code for the Portfolios to be
treated as regulated investment companies. Failure to meet the requirements of
Section 817(h) could result in taxation to Chubb Life or its affiliated
insurance companies and the immediate taxation of the owners of the Policies
funded by the Trust.
The Secretary of the Treasury may in the future issue regulations or one or
more revenue rulings which would prescribe the circumstances in which a
policyowner's control of the investments of a segregated asset account would
cause the policy owner, rather than an insurance company, to be treated as the
owner of the assets of the account. The regulations could impose requirements
that are not reflected in the Policy, relating, for example, to such elements of
policyowner control as premium allocation, transfer privileges and investment in
a division focusing on a particular investment sector. Failure to comply with
any such regulations presumably would cause earnings on a policyowner's interest
in the separate account to be includible in the policyowner's gross income in
the year earned.
S-34
<PAGE>
The Trust may, therefore, find it necessary to take action to assure that
the Policy continues to qualify as a life insurance policy under Federal tax
laws. The Trust, or Chubb Life, for example, may be required to alter the
investment objectives of any Portfolios, or reduce the number of Portfolios, or
substitute the shares of one Portfolio for those of another. No such change of
investment objectives or substitution of securities will take place without
notice to affected policyowners or the approval of a majority of such
policyowners and without the approval of the SEC, to the extent legally
required.
PERFORMANCE AND YIELD INFORMATION
MONEY MARKET PORTFOLIO
The Resolute Treasury Money Market Portfolio's yield is its investment
income, less expenses, expressed as a percentage of assets on an annualized
basis for a seven-day period. The yield does not reflect the fees and charges
imposed on the assets of a separate account.
The simple annualized yield is computed by determining the net change
(exclusive of realized gains and losses from the sale of securities and
unrealized appreciation and depreciation) in the value of a hypothetical pre-
existing account having a balance of one share at the beginning of the seven-day
period, dividing the net change in account value by the value of the account at
the beginning of the period, and annualizing the resulting quotient (base period
return) on a 365-day basis. The net change in account value reflects the value
of additional shares purchased with dividends from the original shares in the
account during the seven-day period, dividends declared on such additional
shares during the period, and expenses accrued during the period.
The compounded effective yield is computed by determining the unannualized
base period return, adding one to the base period return, raising the sum to a
power equal to 365 divided by seven, and subtracting one from the result.
NON-MONEY MARKET PORTFOLIOS
This yield figure represents the net annualized yield based on a specified
30-day (or one month) period assuming a reinvestment semiannual compounding of
income. Yield is calculated by dividing the average daily net investment income
per share earned during the specified period by the
S-35
<PAGE>
maximum offering price, which is net asset value per share on the last day of
the period, and annualizing the result according to the following formula:
Yield = 2 [(A-B + 1) to the 6 power - 1]
---
CD
where A equals dividends and interest earned during the period, B equals
expenses accrued for the period (net of reimbursements), C equals the average
daily number of shares outstanding during the period that were entitled to
receive dividends, and D equals the maximum offering price per share on the last
day of the period.
The average annual total return figures represent the average annual
compounded rate of return for the stated period. Average annual total return
quotations reflect the percentage change between the beginning value of a static
account in the Portfolio and the ending value of that account measured by the
then current net asset value of that Portfolio assuming that all dividends and
capital gains distributions during the stated period were reinvested in shares
of the Portfolio when paid. Total return is calculated by finding the average
annual compounded rates of return of a hypothetical investment that would
compare the initial amount to the ending redeemable value of such investment
according to the following formula:
T = (ERV/p) to the 1/n power -1
where T equals average annual total return, where ERV, the ending redeemable
value, is the value, at the end of the applicable period, of a hypothetical
$100,000 payment made at the beginning of the applicable period, where P equals
a hypothetical initial payment of $100,000, and where N equals the number of
years.
From time to time, in reports and sales literature: (1) each Portfolio's
performance or P/E ratio may be compared to: (i) the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index") and Dow Jones Industrial Average
so that an investor may compare that Portfolio's results with those of a group
of unmanaged securities widely regarded by investors as representative of the
U.S. stock market in general; (ii) other groups of mutual funds tracked by: (A)
Lipper Analytical Services, a widely-used independent research firm which ranks
mutual funds by overall performance, investment objectives, and asset size; (B)
Forbes Magazine's Annual Mutual Funds Survey and Mutual Fund Honor Roll; or (C)
other financial or business publications, such as the Wall Street Journal,
Business Week, Money Magazine, and Barron's, which provide similar information;
(iii) indexes of stocks comparable to those in which the particular Portfolio
invests; (2) the Consumer Price Index (3)
S-36
<PAGE>
other U.S. government statistics such as GNP, and net import and export figures
derived from governmental publications, e.g. The Survey of Current Business, may
be used to illustrate investment attributes of each Portfolio or the general
economic, business, investment, or financial environment in which each Portfolio
operates; and (4) the effect of tax-deferred compounding on the particular
Portfolio's investment returns, or on returns in general, may be illustrated by
graphs, charts, etc. where such graphs or charts would compare, at various
points in time, the return from an investment in the particular Portfolio (or
returns in general) on a tax-deferred basis (assuming reinvestment of capital
gains and dividends and assuming one or more tax rates) with the return on a
taxable basis. Each Portfolio's performance may also be compared to the
performance of other mutual funds by Morningstar, Inc. which ranks mutual funds
on the basis of historical risk and total return. Morningstar rankings are
calculated using the mutual fund's performance relative to three-month Treasury
bill monthly returns. Morningstar's rankings range from five stars (highest) to
one star (lowest) and represent Morningstar's assessment of the historical risk
level and total return of a mutual fund as a weighted average for 3, 5, and 10-
year periods. In each category, Morningstar limits its five star rankings to 10%
of the funds it follows and its four star rankings to 22.5% of the funds it
follows. Rankings are not absolute or necessarily predictive of future
performance.
The performance of the Portfolios may be compared, for example, to the
record of the S&P 500 Index, the Russell 2000, the Russell 2500, the NASDAQ
Composite Index, the Morgan Stanley Capital International and the Europe,
Australia, Far Eastern ("EAFE") Index. The S&P 500 Index is a well known measure
of the price performance of 500 leading larger domestic stocks which represent
approximately 80% of the market capitalization of the U.S. Equity market. The
Russell 2000 Small Stock Index is designed to be a comprehensive representation
of the U.S. small cap equity market. It is composed of 2,000 issues of smaller
domestic stocks which represent nearly 7% of U.S. market capitalization. The
Russell 2500 Index is comprised of the Russell 2000 small cap companies plus the
next 500 largest companies in the Russell 3000 universe. The NASDAQ Composite
Index is comprised of all stocks on NASDAQ's National Market Systems, as well as
other NASDAQ domestic equity securities. The NASDAQ Composite Index has
typically included smaller, less mature companies representing 10% to 15% of the
capitalization of the entire domestic equity market. The EAFE Index is comprised
of more than 900 companies in Europe, Australia and the Far East. All of these
indexes are unmanaged and capitalization weighted. In general, the securities
comprising the Russell 2500, the Russell 2000 and NASDAQ Composite Index are
more growth oriented and have a somewhat higher volatility than in the S&P 500
Index.
The total returns of all of these indexes will show the
S-37
<PAGE>
changes in prices for the stocks in each index. However, only the performance
data for the S&P 500 Index assumes reinvestment of all capital gains
distributions and dividends paid by the stocks in each data base. Tax
consequences will not be included in such illustration, nor will brokerage or
other fees or expenses of investing be reflected in the NASDAQ Composite, S&P
500, EAFE Index, Russell 2000 and Russell 2500.
DELAWARE BUSINESS TRUST
The Trust is a business organization of the type commonly known as a
"Delaware Business Trust" of which each Portfolio is a series. The Trust has
filed a certificate of trust with the office of the Secretary of State of
Delaware. Except to the extent otherwise provided in the governing instrument of
the business trust, the beneficial owners shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the general corporation law of the State
of Delaware.
The Trust provides for the establishment of designated series of beneficial
interests (the Portfolios) having separate rights, powers or duties with respect
to specified property or obligations of the Trust or profits and losses
associated with specified property or obligations, and, to the extent provided
in the Declaration of Trust, any such series may have a separate business
purpose or investment objective.
The Trust shall continue without limitation of time subject to the
provisions in the Declaration of Trust concerning termination by action of the
shareholders or by action of the Trustees upon notice to the shareholders.
ADDITIONAL INFORMATION
REPORTS
Annual and semi-annual reports containing financial statements of the
Trust, as well as voting instruction soliciting material for the Trust, will be
sent to Policyowners.
S-38
<PAGE>
APPENDIX A
DESCRIPTION OF SECURITY RATINGS
STANDARD & POOR'S
Corporate and Municipal Bonds
AAA Debt rated AAA have the highest ratings assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay
principal is extremely strong.
AA Debt rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in a small
degree.
A Debt rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions
than debts in higher rated categories.
BBB Debt rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debts in this
category than for debts in higher rated categories.
BB Debt rated BB is regarded as having less near- term vulnerability
to default than other speculative issues. However, it faces major
ongoing uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity to meet
timely interest and principal payments.
Commercial Paper
A Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
further refined with the designations 1, 2, and 3 to indicate the
relative degree of safety.
A-1 This designation indicates that the degree of safety regarding
timely payment is very strong. Short-Term Tax-Exempt Notes
---------------------------
S-39
<PAGE>
SP-1 The short-term tax-exempt note rating of SP-1 is the highest
rating assigned by Standard & Poor's and has a very strong or
strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics are
given a "plus" (+) designation.
MOODY'S
Corporate and Municipal Bonds
Aaa Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a
large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which
make the long term risks appear somewhat larger than in Aaa
securities.
A Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Baa Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate
for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of
time. Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.
S-40
<PAGE>
Ba Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the
protection of interest and principal payments may be very
moderate, and thereby not well safeguarded during both good and
bad times over the future. Uncertainty of position characterizes
bonds in this class.
Commercial Paper
Prime-1 Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory
obligations. Prime-1 repayment capacity will normally be evidenced
by the following characteristics:
- Leading market positions in well established industries.
- High rates of return on funds employed.
- Conservative capitalization structures with moderate reliance on
debt and ample asset protection.
- Broad margins in earnings coverage of fixed financial charges
and high internal cash generation.
- Well established access to a range of financial markets and
assured sources of alternate liquidity.
S-41
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE TREASURY MONEY MARKET PORTFOLIO
June 30, 1995
<TABLE>
<CAPTION>
Market
Principal Value
Value (Note B)
---------- ----------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS-100.25%
U.S. Treasury Bill, 5.580%, due 08/03/95....................................... $ 27,000 $ 26,860
U.S. Treasury Bill, 5.685%, due 08/03/95....................................... 38,000 37,802
U.S. Treasury Bill, 5.450%, due 09/14/95....................................... 87,000 86,042
U.S. Treasury Bill, 5.375%, due 09/21/95....................................... 1,014,000 1,001,853
U.S. Treasury Bill, 5.410%, due 09/28/95....................................... 25,000 24,671
----------
Total Short-Term Obligations
(Cost $1,176,925)...................................... 1,177,228
----------
TOTAL INVESTMENTS
(Cost $1,176,925*)..................................... 100.25% 1,177,228
Other assets, less liabilities............................. (0.25) (2,908)
------ ----------
TOTAL NET ASSETS........................................ 100.00% $1,174,320
====== ==========
</TABLE>
- ---------------
*Aggregate cost for Federal income tax purposes.
See notes to financial statements.
F-1
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE BOND PORTFOLIO
June 30, 1995
<TABLE>
<CAPTION>
Market
Principal Value
Company Value (Note B)
- ------- -------- ---------
<S> <C> <C>
CORPORATE BONDS-28.86%
Banking-4.61%
Continental Bank, N.A., Sub
Notes, 7.875%,
due 02/01/03.............................. $ 55,000 $ 57,881
-----------
Financial Services-16.07%
Chrysler Financial Corp., 8.125%,
due 12/15/96.............................. 50,000 51,265
Ford Motor Credit Co., 8.250%,
due 05/15/96.............................. 50,000 50,872
GMAC Medium Term Note,
5.700%, due 12/22/97...................... 40,000 39,296
Greentree Financial Corp.,
7.200%, due 04/15/19...................... 60,000 60,125
-----------
201,558
-----------
Utilities - Electric-8.18%
Pacific Gas & Electric Co.,
7.875%, due 03/01/02...................... 50,000 52,898
Texas Utilities Electric Co.,
1st Mortgage, 7.875%
due 04/01/24.............................. 50,000 49,750
-----------
102,648
-----------
TOTAL CORPORATE BONDS
(Cost $346,833)......................... 362,087
-----------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS-69.19%
FHLMC, 7.500%,
due 07/01/25.............................. $ 50,000 $ 50,250
U.S. Treasury Bond, 12.000%,
due 08/15/13.............................. 60,000 88,819
U.S. Treasury Bond, 9.250%,
due 02/15/16.............................. 150,000 192,797
U.S. Treasury Note, 7.625%,
due 04/30/96.............................. 190,000 192,790
U.S. Treasury Note, 4.750%,
due 10/31/98.............................. 40,000 38,562
U.S. Treasury Note, 7.750%,
due 11/30/99.............................. 140,000 149,406
U.S. Treasury Note, 7.500%,
due 11/15/01.............................. 145,000 155,558
-----------
TOTAL U.S. GOVERNMENT
AND AGENCY OBLIGATIONS
(Cost $831,062*)......................... 868,182
-----------
SHORT-TERM OBLIGATIONS-6.53%
U.S. Treasury Bill, 5.460%,
due 09/21/95.............................. 10,000 9,880
U.S. Treasury Bill, 5.410%,
due 09/28/95.............................. 73,000 72,038
-----------
TOTAL SHORT-TERM
OBLIGATIONS
(Cost $81,899).......................... 81,918
-----------
TOTAL INVESTMENTS
(Cost $1,259,794*)...................... 104.58% 1,312,187
Other assets, less liabilities.............. (4.58) (57,447)
-------- -----------
TOTAL NET ASSETS......................... 100.00% $ 1,254,740
======== -----------
</TABLE>
- ---------------
*Aggregate cost for Federal income tax purposes.
See notes to financial statements.
F-2
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE EQUITY PORTFOLIO
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ---------
<S> <C> <C>
COMMON STOCK-99.04%
Aerospace-0.46%
Coltec Industries, Inc.+.................... 1,000 $ 17,250
-----------
Automotive Manufacturing-2.40%
General Motors Corporation.................. 1,900 89,062
-----------
Automotive Services & Supplies-0.92%
Cooper Tire & Rubber Co..................... 1,400 34,125
-----------
Banking-6.67%
BankAmerica Corporation..................... 1,600 84,200
First Union Corp............................ 800 36,200
Fleet Financial Group, Inc.................. 1,400 51,975
Nationsbank Corp............................ 1,400 75,075
-----------
247,450
-----------
Chemical-3.72%
E.I. Dupont DeNemours &
Company.................................... 300 20,625
Monsanto Co................................. 300 27,037
Union Carbide Corp.......................... 1,400 46,725
Wellman, Inc................................ 1,600 43,800
-----------
138,187
-----------
Commercial Services-1.62%
Services Corporation
International.............................. 1,900 60,088
-----------
Computer - Peripherals-3.19%
Bay Networks, Inc.+......................... 1,600 66,200
Conner Peripherals, Inc.+................... 1,900 23,512
International Business Machines............. 300 28,800
-----------
118,512
-----------
Computer - Software-1.88%
Novell, Inc.+............................... 3,500 69,781
-----------
Electrical Equipment-1.43%
Advanced Micro-Devices, Inc................. 500 $ 18,187
Magnetek, Inc.+............................. 400 5,450
W.W. Grainger, Inc.......................... 500 29,375
-----------
53,012
-----------
Electronics-2.40%
General Electric Co......................... 1,100 62,012
Motorola, Inc............................... 400 26,850
-----------
88,862
-----------
Entertainment, Leisure & Media-7.32%
CBS, Inc.................................... 500 33,500
Circus Circus Enterprises+.................. 1,900 66,975
International Game Technology+.............. 2,200 33,825
R.R. Donnelley & Sons Co.................... 1,400 50,400
Tele Communications,
Class A, ADR+.............................. 3,700 86,719
-----------
271,419
-----------
Financial Services-5.01%
Ambac, Inc.................................. 1,100 44,137
Citicorp.................................... 300 17,362
Dean Witter Discover & Co................... 1,100 51,700
Firstar Corp................................ 300 10,087
Great Western Financial Corp................ 1,900 39,187
ITT Corp.................................... 200 23,500
-----------
185,973
-----------
Food Processing-2.64%
Archer Daniels Midland Co................... 1,400 26,075
CPC International, Inc...................... 500 30,875
General Mills, Inc.......................... 800 41,100
-----------
98,050
-----------
Furniture & Appliances-0.30%
Interco, Inc................................ 1,900 11,163
-----------
Health Supplies-5.24%
Bausch & Lomb, Inc.......................... 2,700 112,050
Columbia/HCA Healthcare..................... 1,900 82,175
-----------
194,225
-----------
Home Construction-1.22%
Manville Corp.+............................. 3,300 45,375
-----------
</TABLE>
- ---------------
+ Non-income producing security.
See notes to financial statements.
F-3
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE EQUITY PORTFOLIO-(Continued)
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ---------
<S> <C> <C>
COMMON STOCK-Continued
Household Products-5.48%
First Brands Corp........................... 500 $ 21,437
PepsiCo, Inc................................ 1,400 63,875
Philip Morris Companies, Inc................ 1,100 81,813
Procter & Gamble Co......................... 500 35,938
-----------
203,063
-----------
Insurance-2.15%
Providian Corp.............................. 2,200 79,750
-----------
Manufacturing-4.28%
Allied Signal, Inc.......................... 1,600 71,200
Johnson Controls, Inc....................... 500 28,250
Tyco International, Ltd..................... 1,100 59,400
-----------
158,850
-----------
Metal & Mining-2.06%
Freeport McMoran, Inc....................... 1,400 24,675
Reynolds Metals Co.......................... 1,000 51,750
-----------
76,425
-----------
Office Products-1.95%
Harris Corp................................. 1,400 72,275
-----------
Oil - Production-10.85%
Anadarko Petroleum Corp..................... 600 25,875
Cooper Cameron Corp.+....................... 3,600 67,950
Diamond Shamrock, Inc....................... 1,100 28,325
Exxon Corporation........................... 500 35,312
Mobil Corporation........................... 300 28,800
Oryx Energy Company+........................ 2,500 34,375
Repsol, S.A., ADR........................... 1,100 34,788
Royal Dutch Petroleum Co., ADR.............. 300 36,563
Sun Company, Inc............................ 1,400 38,325
Texaco, Inc................................. 1,100 72,188
-----------
402,501
-----------
Packaging & Containers-0.41%
Crown Cork & Seal
Company, Inc.+............................ 300 $ 15,037
-----------
Personal Care-0.90%
Avon Products, Inc.......................... 500 33,500
-----------
Pharmaceuticals-3.87%
Alza Corp., Class A+........................ 1,600 37,400
Eli Lilly & Co.............................. 800 62,800
Warner-Lambert Co........................... 500 43,188
-----------
143,388
-----------
Pollution Control-0.79%
Wheelabrator Technologies, Inc.............. 1,900 29,213
-----------
Railroad-1.05%
Conrail, Inc................................ 700 38,937
-----------
Retail-6.27%
Limited, Inc................................ 2,700 59,400
Melville Corp............................... 1,900 65,075
Price/Costco, Inc........................... 2,200 35,750
Wal-Mart Stores, Inc........................ 2,700 72,225
-----------
232,450
-----------
Telecommunications-6.55%
AT&T Corp................................... 1,400 74,375
BellSouth Corporation....................... 500 31,750
MCI Communications Corp..................... 2,700 59,400
Pacific Telesis Group....................... 1,100 29,425
Telefonos De Mexico, S.A., ADR.............. 500 14,813
U.S. West, Inc.............................. 800 33,300
-----------
243,063
-----------
Textiles-0.91%
Fruit of the Loom, Inc., Class A+........... 1,600 33,800
-----------
Trucking & Freight Carriers-2.37%
Canadian Pacific, Ltd., Ord................. 2,200 38,225
Union Pacific Corp.......................... 900 49,838
-----------
88,063
-----------
</TABLE>
- ---------------
+ Non-income producing security.
See notes to financial statements.
F-4
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE EQUITY PORTFOLIO-(Continued)
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-Continued
Utilities - Electric-2.73%
Allegheny Power Systems, Inc................ 500 $ 11,750
Dominion Resources, Inc..................... 500 18,250
Entergy Corp................................ 1,600 38,600
Scecorp..................................... 1,900 32,538
----------
101,138
----------
TOTAL COMMON STOCK
(Cost $3,493,352)....................... 3,673,987
----------
<CAPTION>
Principal
Value
---------
<S> <C> <C>
SHORT-TERM OBLIGATIONS-3.03%
U.S. Treasury Bill, 5.380%,
due 08/03/95.............................. $73,000 72,632
U.S. Treasury Bill, 5.425%,
due 08/03/95.............................. 22,000 21,891
U.S. Treasury Bill, 5.410%,
due 09/21/95.............................. 18,000 17,784
----------
TOTAL SHORT-TERM
OBLIGATIONS
(Cost $112,301)......................... 112,307
----------
TOTAL INVESTMENTS
(Cost $3,605,653*)...................... 102.07% 3,786,294
Other assets, less liabilities.............. (2.07) (76,840)
-------- ----------
TOTAL NET ASSETS......................... 100.00% $3,709,454
======== ==========
</TABLE>
- --------------
* Aggregate cost for Federal income tax purposes.
See notes to financial statements.
F-5
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE SMALL COMPANY PORTFOLIO
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-93.91%
Advertising-0.15%
Advo Systems, Inc........................... 200 $ 3,775
----------
Aerospace-2.78%
Coltec Industries, Inc.+.................... 1,300 22,425
Kaydon Corp................................. 600 17,850
Orbital Sciences Corp.+..................... 500 9,125
Rohr Industries, Inc.+...................... 1,000 14,375
Watkins-Johnson Co.......................... 100 4,450
----------
68,225
----------
Airline-1.79%
Mesa Airlines, Inc.+........................ 4,800 43,800
----------
Automotive Manufacturing-0.19%
Paccar, Inc................................. 100 4,675
----------
Automotive Services & Supplies-2.32%
Cooper Tile & Rubber Co..................... 500 12,188
Excel Industries, Inc....................... 600 8,700
Intermet Corp.+............................. 1,900 18,050
Simpson Industries, Inc..................... 1,600 18,000
----------
56,938
----------
Banking-5.61%
First Commerce Corp......................... 1,200 35,400
First Virginia Banks, Inc................... 300 11,250
Firstar Corp................................ 1,000 33,625
Silicon Valley Bancshares+.................. 200 3,600
Southern National Corp...................... 1,080 25,920
Sterling Bancshares, Inc.................... 150 1,988
TrustCo Bancorp NY.......................... 400 8,700
Wilmington Trust Corp....................... 600 16,950
----------
137,433
----------
Biopharmaceuticals-0.07%
Human Genome Sciences, Inc.+................ 100 1,675
----------
Broadcasting-0.51%
Comcast UKCable Partners+................... 100 $ 1,613
Emmis Broadcasting Corp.,
Class A+.................................. 100 2,725
Heartland Wireless+......................... 100 2,375
Heritage Media Corp., Class A+.............. 200 5,775
----------
12,488
----------
Chemical-2.59%
Albemarle Corp.............................. 300 4,687
Bush Boake Allen, Inc.+..................... 100 3,038
Georgia Gulf Corp........................... 200 6,525
Wellman, Inc................................ 1,800 49,275
----------
63,525
----------
Commercial Services-1.28%
Measurex Corp............................... 100 3,038
Service Corporation International........... 900 28,462
----------
31,500
----------
Communications Services-0.90%
America Online, Inc.+....................... 500 22,000
----------
Computer - Peripherals-1.72%
Boca Research, Inc.+........................ 100 2,700
Network Computing Devices, Inc.+............ 200 1,725
Nexgen+..................................... 100 2,363
Planar Systems, Inc.+....................... 100 2,225
Quantum Corp.+.............................. 1,000 22,875
Tandem Computers, Inc.+..................... 200 3,225
Xcellenet, Inc.+............................ 300 6,975
----------
42,088
----------
Computer - Software-6.25%
Adobe Systems, Inc.......................... 200 11,600
Autodesk, Inc............................... 300 12,900
Avid Technology, Inc.+...................... 100 3,750
BMC Software, Inc.+......................... 100 7,725
Ceridian Corp.+............................. 100 3,687
Cheyenne Software, Inc.+.................... 100 1,850
Compuware Corp.+............................ 100 3,075
Davidson & Associates, Inc.................. 100 3,975
Dialogic Corporation+....................... 300 5,325
</TABLE>
- ---------------
+Non-income producing security.
See notes to financial statements.
F-6
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE SMALL COMPANY PORTFOLIO-(Continued)
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-Continued
Computer - Software-Continued
General Magic, Inc.+........................ 100 $ 1,350
Inso Corp.+................................. 100 5,975
Intersolv, Inc.+............................ 100 2,325
Maxis, Inc.+................................ 100 2,662
McAfee Associates, Inc.+.................... 200 6,062
Microtec Research, Inc.+.................... 500 3,875
Network General Corp.+...................... 300 8,175
Network Peripherals, Inc.+.................. 200 4,362
Oak Technology, Inc.+....................... 100 3,675
Parametric Technology Corp.+................ 100 4,975
Phoenix Technology, Ltd.+................... 300 3,225
Pinnacle Systems, Inc.+..................... 200 4,500
Plaintree Systems, Inc.+.................... 100 1,050
Project Software &
Development, Inc.+........................ 200 5,950
Quarterdeck Office Systems+................. 300 3,488
Rational Software Corp.+.................... 200 2,725
Read-Rite Corp.+............................ 700 18,725
Security Dynamics Tech, Inc.+............... 100 4,500
Softkey Int'l, Inc.+........................ 100 3,188
Spyglass, Inc.+............................. 100 2,863
Symantec Corp.+............................. 100 2,887
UUNET Technologies, Inc.+................... 100 2,750
----------
153,174
----------
Education Services-0.56%
DeVRY, Inc., Delaware+...................... 200 4,000
Flightsafety International, Inc............. 200 9,750
----------
13,750
----------
Electrical Equipment-0.85%
Charter Power Systems, Inc.................. 200 4,800
Encore Wire Corp.+.......................... 200 2,200
Kuhlman Corp................................ 100 1,125
Micrel, Inc.+............................... 400 9,200
Microchip Tech, Inc.+....................... 100 3,638
----------
20,963
----------
Electronics-6.08%
ADT Limited+................................ 4,000 $ 47,000
American Technology
Materials, Inc.+.......................... 500 5,250
Amphenol Corp.+............................. 200 5,825
Brooktree Corp.+............................ 400 6,900
General Signal Corp......................... 600 23,850
Mentor Graphics Corp.+...................... 300 5,175
Perkin-Elmer Corp........................... 100 3,550
S3, Incorporated+........................... 100 3,600
SDL, Inc.+.................................. 200 6,000
Solectron Corp.+............................ 200 6,825
Sundstrand Corp............................. 300 17,925
Symbol Technologies+........................ 200 7,675
Xilinx, Inc.+............................... 100 9,400
----------
148,975
----------
Entertainment, Leisure & Media-2.29%
Argosy Gaming Corp.+........................ 100 1,275
Boyd Gaming Corp.+.......................... 1,500 24,937
Cinergi Pictures
Entertainment, Inc.+...................... 500 3,375
IMAX Corp.+................................. 200 2,225
Johnson Worldwide
Association, Inc., Class A+............... 300 7,050
Players International, Inc.+................ 150 3,000
Royal Caribbean Cruises, Ltd................ 600 13,200
Sports Club Co.+............................ 200 1,025
----------
56,087
----------
Financial Services-3.69%
Banknorth Group, Inc........................ 400 10,750
Capital RE Corp............................. 1,200 31,200
Charter One Financial, Inc.................. 400 9,800
Commerce Bancorp, Inc. NJ................... 400 7,750
Community First Bankshares.................. 200 3,400
First National Bancorp GA................... 200 4,300
GBC Bancorp Calif........................... 200 2,400
HUBCO, Inc.................................. 100 1,787
National Commerce
Bancorporation............................ 100 2,525
Payco American Corp.+....................... 300 2,325
Roosevelt Financial Group, Inc.............. 500 8,344
Southwest Securities Group, Inc............. 700 5,775
----------
90,356
----------
</TABLE>
- ---------------
+Non-income producing security.
See notes to financial statements.
F-7
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE SMALL COMPANY PORTFOLIO-(Continued)
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-Continued
Food Processing-0.57%
John B. Sanfilippo & Son, Inc............... 100 $ 1,025
Universal Foods Corp........................ 400 12,950
----------
13,975
----------
Furniture & Appliances-0.06%
Bush Industries, Inc........................ 125 1,406
----------
Health Services-0.37%
Phycor, Inc.+............................... 100 3,513
Summit Care Corp.+.......................... 300 5,475
----------
8,988
----------
Home Construction-0.73%
Apogee Enterprises, Inc..................... 200 3,550
Congoleum Corp.+............................ 100 1,338
D.R. Horton, Inc.+.......................... 972 13,000
----------
17,888
----------
Hospital Services & Supplies-7.04%
Bioject Medical Technologies, Inc.+......... 200 300
Biomet, Inc.+............................... 100 1,550
Caremark International, Inc................. 200 4,000
C.R. Bard, Inc.............................. 200 6,000
Cellpro, Inc.+.............................. 800 10,700
Community Health Systems+................... 100 3,387
Corvita Corp.+.............................. 300 1,575
Fresenius USA, Inc.+........................ 900 11,812
Healthcare Retirement Corp.+................ 800 23,400
Health Management
Association, Inc.+........................ 900 26,325
Hooper Holmes, Inc.......................... 300 2,531
ICU Medical, Inc.+.......................... 100 1,412
Instent, Inc.+.............................. 100 1,425
Mariner Health Group, Inc.+................. 1,000 11,250
Occusystems+................................ 100 1,713
Oncor, Inc.+................................ 1,200 7,275
Owens & Minor, Inc.......................... 1,000 12,500
Perseptive Biosystems, Inc.+................ 1,200 13,200
Hospital Services & Supplies-(Continued)
St. Jude Medical, Inc....................... 100 $ 5,012
Stryker Corp................................ 100 3,838
Sunrise Medical, Inc.+...................... 100 3,113
Vital Signs, Inc............................ 700 12,075
Vivra, Inc.+................................ 300 8,138
----------
172,531
----------
Household Products-1.84%
Dekalb Genetics Corp........................ 300 13,200
Dreyers Grand Ice Cream..................... 100 3,662
First Brands Corp........................... 100 4,287
Libbey, Inc................................. 500 10,375
Nabisco Holdings Corp....................... 400 10,800
Riviana Foods, Inc.......................... 200 2,663
----------
44,987
----------
Insurance-3.24%
AMBAC, Inc.................................. 500 20,062
First Colony Corp........................... 800 19,200
Fremont General Corp........................ 180 4,342
Hilb, Rogal & Hamilton Co................... 200 2,500
MMI Companies, Inc.......................... 1,000 19,625
Mid Ocean, Ltd., Ord........................ 100 3,163
Partnerre Holdings, Ltd..................... 400 10,450
----------
79,342
----------
Lodging-0.09%
Doubletree Corp.+........................... 100 2,156
----------
Machinery-2.84%
Applied Power, Inc.......................... 500 14,437
Asyst Technologies, Inc.+................... 100 3,712
Black & Decker, Inc......................... 1,100 33,963
Credence Systems Corp.+..................... 150 4,538
Greenfield Industries, Inc.................. 100 2,900
Helix Technology Corp....................... 100 4,300
Micrion Corp.+.............................. 200 2,700
Regal Beloit Corp........................... 200 3,100
----------
69,650
----------
</TABLE>
- ---------------
+Non-income producing security.
See notes to financial statements.
F-8
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE SMALL COMPANY PORTFOLIO-(Continued)
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-Continued
Manufacturing-1.44%
Glatfelter (P.H.) Co........................ 400 $ 8,050
Maverick Tube Corp.+........................ 400 3,050
Safety 1st, Inc.+........................... 200 3,925
W.H. Brady Co., Class A..................... 300 20,400
----------
35,425
----------
Medical Biotech-0.06%
Genetic Therapy, Inc.+...................... 100 1,487
----------
Metal & Mining-4.11%
Allegheny Ludlum Corp....................... 1,800 35,550
Commercial Metals Co........................ 600 16,200
Freeport-McMoran Copper &
Gold, Class A............................. 800 16,500
Kaiser Aluminum Corp.+...................... 600 8,325
Oregon Steel Mills, Inc..................... 400 6,850
Steel Technologies, Inc..................... 1,500 17,250
----------
100,675
----------
Office Products-1.23%
Harris Corp................................. 500 25,812
Nu-Kote Holdings, Inc.+..................... 100 3,175
U.S. Office Products Co.+................... 100 1,200
----------
30,187
----------
Oil - International-0.70%
Anadarko Petroleum Corp..................... 400 17,250
----------
Oil - Production-3.85%
Devon Energy Corp........................... 500 10,750
Holly Corp.................................. 200 4,625
Oryx Energy Company+........................ 2,300 31,625
Tesoro Petroleum Corp....................... 100 1,000
Texas Meridian, Inc.+....................... 200 2,150
TransCanada Pipelines, Ltd.................. 1,900 25,413
Vintage Petroleum, Inc...................... 1,000 18,750
----------
94,313
----------
Oil - Services-1.42%
Dreco Energy Services, Ltd.+................ 400 $ 5,800
El Paso Natural Gas Company................. 100 2,850
Noble Affiliates, Inc....................... 100 2,550
Noble Drilling Corp.+....................... 2,000 14,750
Oceaneering International, Inc.+............ 1,000 8,875
----------
34,825
----------
Pharmaceuticals-2.04%
Allergan, Inc............................... 200 5,425
Athena Neurosciences, Inc.+.................. 600 5,475
Inhale Therapeutic Systems+................. 300 2,400
IVAX Corp................................... 200 4,925
Mylan Laboratories, Inc..................... 100 3,075
Northfield Laboratories, Inc.+.............. 200 2,975
Sangstat Medical Corp.+..................... 400 2,050
Targeted Genetics Corp.+.................... 400 1,550
Univax Biologics, Inc.+..................... 600 2,850
Vertex Pharmaceuticals, Inc.+............... 400 6,550
Vical, Inc.+................................ 500 4,875
Watson Pharmaceutical+...................... 200 7,800
----------
49,950
----------
Pollution Control-1.55%
Dames & Moore, Inc.......................... 1,700 22,100
Mid-America Waste Systems, Inc.+............ 1,000 4,875
Sevenson Environmental
Services, Inc............................. 200 3,650
Tetra Technologies+......................... 600 7,275
----------
37,900
----------
Publishing & Printing-0.85%
Banta Corp.................................. 500 16,625
Consolidated Graphics, Inc.+................ 300 4,125
----------
20,750
----------
</TABLE>
- ---------------
+Non-income producing security.
See notes to financial statements.
F-9
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE SMALL COMPANY PORTFOLIO-(Continued)
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-Continued
Real Estate-4.25%
Cali Realty Corp............................ 100 $ 1,937
Capstone Capital Trust, Inc................. 300 5,362
Chelsea GCA Realty, Inc..................... 200 5,400
Colonial Properties......................... 100 2,300
Developer Diversified Realty Corp........... 200 5,750
Equity Inns, Inc............................ 200 2,150
FelCor Suite Hotels, Inc.................... 100 2,550
Gables Residential Trust.................... 100 2,050
Health & Retirement Properties
Trust..................................... 1,300 19,500
Healthcare Realty........................... 600 12,150
Home Properties NY, Inc..................... 200 3,525
Liberty Property Trust...................... 100 1,962
Merry Land & Investment, Inc................ 100 2,038
RFS Hotel Investors, Inc.................... 200 3,050
ROC Communities, Inc........................ 400 8,850
Security Capital Pacific Trust.............. 500 8,688
South West Property Trust................... 500 5,750
Starwood Lodging Trust+..................... 100 2,350
Storage Trust Realty........................ 200 4,050
Sun Communities, Inc........................ 100 2,500
Wellsford Residential Properties............ 100 2,275
----------
104,187
----------
Restaurants - 0.93%
Brinker International, Inc.+................ 300 5,175
Sbarro, Inc................................. 600 13,950
Starbucks Corp.+............................ 100 3,563
----------
22,688
----------
Retail-3.55%
Borders, Inc.+.............................. 100 1,437
Brauns Fashions Corp.+...................... 400 900
Catherine Stores Corp.+..................... 900 10,012
Charming Shoppes, Inc....................... 2,500 13,125
Fastenal Co................................. 200 5,462
Garden Ridge Corp.+......................... 100 2,475
Hannaford Brothers Co....................... 100 2,850
Kohls Corp.+................................ 200 9,125
Leslie's Poolmart+.......................... 100 1,500
Retail-Continued
Office Depot, Inc.+......................... 100 $ 2,813
One Price Clothing Stores, Inc.+............ 1,000 3,750
Penn Traffic Co., New+...................... 400 14,150
Stop & Shop Companies, Inc.+................ 100 2,563
TJX Companies, Inc.......................... 800 10,600
Urban Outfitters+........................... 100 2,175
Vons Companies, Inc.+....................... 200 4,025
----------
86,962
----------
Telecommunications-2.48%
Andrew Corp.+............................... 100 5,787
Applied Digital Access+..................... 500 6,500
Arch Communications Group+.................. 100 2,225
Comdial Corp.+.............................. 700 2,887
Leasing Solutions, Inc.+.................... 100 1,163
MFS Communications, Inc.+................... 100 3,225
Mobilemedia, Inc.+.......................... 100 2,050
Network Express, Inc.+...................... 100 1,388
NYNEX Cablecomms Group+..................... 200 4,050
Paging Network+............................. 600 20,550
Tellabs, Inc.+.............................. 200 9,625
Videotron Holdings, PLC+.................... 100 1,400
----------
60,850
----------
Textiles-1.57%
Collins & Aikman, New+...................... 500 4,500
Fruit of the Loom, Inc., Class A+........... 1,000 21,125
Nine West Group, Inc.+...................... 200 7,300
St. John Knits, Inc......................... 100 4,488
Worldtex, Inc.+............................. 200 1,175
----------
38,588
----------
Trucking & Leasing-0.84%
American Freightways Corp.+................. 100 2,050
Heartland Express, Inc.+.................... 200 5,100
USA Truck, Inc.+............................ 100 1,525
Werner Enterprises, Inc..................... 600 12,000
----------
20,675
----------
</TABLE>
- ---------------
+Non-income producing security.
See notes to financial statements.
F-10
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE SMALL COMPANY PORTFOLIO-(Continued)
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-Continued
Utilities - Electric-3.98%
Alleghany Power Systems, Inc................ 500 $ 11,750
California Energy Co.+...................... 500 8,188
Central Hudson Gas &
Electric Corp............................. 700 18,900
Central Louisiana Electric, Inc............. 200 4,700
Illinova Corp............................... 200 5,075
Pinnacle West Capital Corp.................. 1,100 26,950
Potomac Electric Power Co................... 200 4,300
Washington Water Power Co................... 1,100 17,600
----------
97,463
----------
Utilities - Gas-1.12%
Atlantic Gas and Light...................... 300 10,425
Brooklyn Union Gas Company.................. 300 7,875
Providence Energy Corp...................... 300 4,575
United Cities Gas Co........................ 300 4,500
----------
27,375
----------
Utilities - Water & Sewer-1.53%
American Water Works, Inc................... 900 28,575
Aquarion Co................................. 100 2,300
E'Town...................................... 100 2,713
Southern California Water Co................ 200 3,875
----------
37,463
----------
TOTAL COMMON STOCK
(cost $2,071,023) ...................... 2,301,363
----------
PREFERRED STOCK-0.14%
Telecommunications Equipment-0.14%
MFS Communications, Conv.,
Pfd, 8.000%............................... 100 3,450
----------
TOTAL PREFERRED STOCK
(cost $3,350)........................... 3,450
----------
<CAPTION>
Market
Principal Value
Company Value (Note B)
- ------- --------- ----------
<S> <C> <C>
SHORT-TERM OBLIGATIONS-10.11%
U.S. Treasury Bill, 5.400%,
due 08/03/95.............................. $ 20,000 $ 19,901
U.S. Treasury Bill, 5.425%,
due 08/03/95.............................. 18,000 17,911
U.S. Treasury Bill, 5.510%,
due 08/03/95.............................. 12,000 11,938
U.S. Treasury Bill, 5.550%,
due 08/03/95.............................. 8,000 7,959
U.S. Treasury Bill, 5.350%,
due 08/31/95.............................. 120,000 118,948
U.S. Treasury Bill, 5.450%,
due 09/14/95.............................. 15,000 14,835
U.S. Treasury Bill, 5.375%,
due 09/21/95.............................. 20,000 19,761
U.S. Treasury Bill, 5.390%,
due 09/21/95.............................. 15,000 14,820
U.S. Treasury Bill, 5.410%,
due 09/21/95.............................. 12,000 11,856
U.S. Treasury Bill, 5.380%,
due 09/21/95.............................. 10,000 9,880
----------
TOTAL SHORT-TERM
OBLIGATIONS
(Cost $247,751)......................... 247,809
----------
TOTAL INVESTMENTS
(Cost $2,322,124*)...................... 104.16% 2,552,622
Other assets, less liabilities.............. (4.16) (101,883)
-------- ----------
TOTAL NET ASSETS......................... 100.00% $2,450,739
======== ==========
</TABLE>
- ---------------
*Aggregate cost for Federal income tax purposes.
+Non-income producing security.
See notes to financial statements.
F-11
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE INTERNATIONAL EQUITY PORTFOLIO
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-96.40%
Australia-3.25%
Broken Hill Properties Co.,
Ltd., Ord................................. 2,440 $ 29,957
C.S.R., Ltd., Ord........................... 4,000 12,476
National Australia Bank, Ltd., Ord.......... 2,800 22,071
News Corporation, Ltd., Ord................. 3,000 16,715
Southcorp Holdings, Ltd., Ord............... 7,600 15,139
TNT Limited, Ord............................ 4,100 5,377
Western Mining Corp. Holdings
Ord.,..................................... 3,500 19,179
----------
120,914
----------
Belguim-1.67%
Generale de Banque, NVP, Ord................ 65 20,877
Solvay, S.A., Ord........................... 35 19,371
Tractebel Cap, NPV, Ord..................... 60 21,769
----------
62,017
----------
Denmark-1.10%
Carlsberg A.S., Ord., B..................... 160 7,465
Den Danske Bank, Ord........................ 100 6,277
International Service System B
Ord....................................... 130 3,394
Novo Nordisk, A.S., Ord.,
Class B................................... 50 5,333
Sophus Berendsen, Ord.,
Class B................................... 100 9,424
Tele Danmark, A.S., Ord., B................. 160 8,902
----------
40,795
----------
France-11.83%
AXA, Ord.................................... 322 17,404
Air Liquide (L'), Ord....................... 75 11,991
Alcatel Alsthom, ORD........................ 455 40,999
Bouygues, Ord............................... 175 20,975
Carrefour, Ord.............................. 50 25,632
Christian Dior, S.A., Ord................... 190 16,744
Cie Generale des Eaux, Ord.................. 130 14,482
Compagnie Financiere de
Paribas, Ord.............................. 360 21,656
Dollfus-Mieg & Cie, Ord..................... 200 11,263
Elf Aquitane, Ord........................... 410 30,322
Groupe Danone, Ord.......................... 192 32,320
France-Continued
Lafarge-Coppee, Ord......................... 155 $ 12,061
Lagardere Groupe, Ord....................... 430 8,915
Lyonnaise des Eaux, Ord..................... 60 5,679
Promodes, Ord............................... 80 18,236
Renault, S.A., Ord.......................... 400 12,542
Rhone Poulenc, S.A., Ord., A................ 700 15,783
Sanofi, Ord................................. 250 13,847
Seita, Ord.................................. 400 12,031
Societe Generale, Ord....................... 280 32,751
Synthelabo, Ord............................. 380 21,581
Television Francaise, Ord................... 130 13,111
Total, S.A., Ord, `B' Shares................ 400 24,095
Ugine, S.A., Ord............................ 80 5,628
----------
440,048
----------
Germany-7.89%
AVA Allegemeine Handels-Der
Verbr., Ord............................... 10 4,010
Bayer, A.G., Ord............................ 150 37,248
Deutsche Bank, A.G., Ord.................... 500 24,312
Deutsche Pfandbrief &
Hypothekenbank, Ord....................... 40 20,244
M.A.N., A.G., Ord........................... 60 15,411
Munchener Ruckversicherungs,
Ord....................................... 20 43,783
SKW Trostbert, Ord. +....................... 200 4,191
Schering, A.G., Ord......................... 400 27,946
Seimens, A.G., Ord.......................... 40 19,805
Thyssen, A.G., Ord.......................... 110 20,481
Veba, A.G., Ord............................. 120 47,077
Volkswagen, A.G., Ord....................... 100 28,791
----------
293,299
----------
Hong Kong-5.22%
Citic Pacific, Ltd., Ord.................... 15,000 37,706
HSBC Holdings, PLC, Ord..................... 1,600 20,524
Hong Kong Telecommunication
Ord....................................... 13,600 26,892
Hong Kong Electric Holdings, Ltd.,
Ord....................................... 7,000 23,793
Sun Hung Kai Properties, Ltd.,
Ord....................................... 5,000 36,995
Swire Pacific, Ltd., Ord.,
`A' Shares................................ 4,000 30,501
Television Broadcast, Ltd., Ord............. 5,000 17,577
----------
193,988
----------
</TABLE>
- ---------------
+Non-income producing security.
See notes to financial statements.
F-12
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE INTERNATIONAL EQUITY PORTFOLIO-(Continued)
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-Continued
Japan-28.93%
Chugai Pharmaceutical Co.,
Ord....................................... 3,000 $ 30,318
Chuo Trust and Banking Co.,
Ord....................................... 1,000 11,307
Cosmo Oil Co., Ltd., Ord.................... 5,000 28,210
Dai-Ichi Kangyo Bank, Ltd., Ord............. 2,000 36,043
Daiei, Inc., Ord............................ 1,000 12,132
Daishi Bank, Ord............................ 3,000 20,742
Daito Trust Construction Co.,
Ltd., Ord................................. 2,000 18,845
Daiwa Bank, Ord............................. 3,000 28,906
East Japan Railway Co., Ord................. 5 25,618
Fuji Denki Reiki, Ord....................... 1,000 10,848
Fuji Electric Co., Ltd., Ord................ 3,000 15,088
Fuji Heavey Industries, Ord................. 3,000 11,131
Gunze Sangyo, Inc., Ord..................... 5,000 20,671
Hitachi, Ord................................ 5,000 49,765
Hokkaido Takushoku Bank, Ord................ 5,000 13,663
Honda Motor Co., Ord........................ 2,000 30,624
Industrial Bank of Japan,
Ltd., Ord................................. 1,000 26,031
Ishikawa Jima-Harima Industries,
Ord....................................... 6,000 23,534
Japan Tobacco, Ord.......................... 1 8,928
Joroku Bank, Ord............................ 2,000 12,909
Kanematsu Corp., Ord........................ 5,000 18,846
Komatsu Forklift Co.,
Ltd., Ord................................. 4,000 22,144
Kurabo Industries, Ord...................... 5,000 18,021
Matsushita Electric Industries
Ord....................................... 2,000 31,095
Mineba Co., Ltd., Ord....................... 2,000 12,815
Mitsubishi Cable Industries, Ord............ 2,000 11,519
Mitsui Fudosan Co., Ltd., Ord............... 1,000 11,437
Mitsui Toatsu Chemicals, Inc.,
Ord....................................... 3,000 11,025
NEC Corp., Ord.............................. 3,000 32,827
NKK Corporation, Ord........................ 5,000 11,720
Nagasakiya Co., Ord......................... 2,000 8,975
Japan-Continued
Nichiban Co., Ord........................... 5,000 $ 26,973
Nichii Co., Ltd., Ord., Tokyo............... 1,000 10,848
Nikkiso Co., Ord............................ 2,000 13,639
Nippon Credit Bank, Ord..................... 4,000 19,788
Nippon Kinzoku Co., Ord..................... 2,000 8,598
Nippon Paper Industries, Ord................ 2,000 12,956
Nippon Road Co., Ltd., Ord.................. 1,000 9,894
Nippon Suisan Kaisha, Ord................... 2,000 9,446
Nissan Diesel Motor Co., Ord................ 1,000 4,511
Nissin Corp. Ord............................ 4,000 16,537
Nomura Securities Corp., Ltd.,
Ord....................................... 2,000 34,865
Ricoh Co., Ord.............................. 2,000 17,150
Ryobi, Ltd., Ord............................ 3,000 14,841
Sakura Bank, Ltd., Ord...................... 3,000 31,272
Snow Brand Milk Products Co.,
Ltd., Ord................................. 2,000 15,666
Sony Corp., Ord............................. 500 23,969
Sumitomo Forestry Co., Ord.................. 1,000 16,608
Sumitomo Metal Industries, Ord.............. 10,000 26,031
Takashimaya Co., Ltd., Ord.................. 1,000 13,428
Toho Gas Co., Ltd. Ord...................... 5,000 17,786
Tohoku Electric Power Co., Inc.,
Ord....................................... 1,000 27,680
Tokio Marine & Fire Insurance Co.,
Ord........................................ 1,000 11,449
Toyo Construction Co., Ord.................. 3,000 15,654
Toyota Motor Co., Ltd., Ord................. 1,000 19,788
UBE Industries, Ltd., Ord................... 5,000 17,432
Zexel Corp., Ord............................ 2,000 13,475
----------
1,076,021
----------
Malaysia-2.38%
Public Bank, Bhd., Ord...................... 14,000 31,298
Tan Chong Motor Holdings,
Bhd., Ord................................. 18,000 20,526
Tanjong Co., Ord............................ 4,000 13,782
Telekom Malaysia, Bhd., Ord................. 3,000 22,766
----------
88,372
----------
</TABLE>
See notes to financial statements.
F-13
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE INTERNATIONAL EQUITY PORTFOLIO-(Continued)
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-Continued
Netherlands-2.69%
ABN Amro Holding, NV, Ord................... 250 $ 9,642
Dutchstate Mines, NV, Ord................... 140 12,054
Elsevier, N.V., Ord......................... 1,040 12,274
Internationale Nederlanden Groep,
NV, Ord................................... 150 8,291
Philips Electronics, Ord.................... 310 13,116
Royal Dutch Petroleum, Ord.................. 260 31,726
Unilever, N.V., CVA, Ord.................... 100 13,002
----------
100,105
----------
Norway-2.66%
Hafslund Nycomed, Ord.,
Series B.................................. 700 16,180
Kvaerner, A.S., Ord., Series B.............. 500 21,898
Norsk Hydro, A.S., Ord...................... 1,000 41,930
Orkla, A.S., Ord., Series B................. 450 19,051
----------
99,059
----------
Singapore-2.43%
Cycle and Carriage, Ltd. Ord................ 1,000 8,944
DBS LAND, Ltd., Ord......................... 5,000 15,671
Development Bank of Singapore,
Ord....................................... 2,000 22,755
Sembawang Corp., Ltd., Ord.................. 1,000 6,082
Sime Darby, Bhd., Ord....................... 10,000 27,764
Singapore Airlines, Ltd., Ord............... 1,000 9,231
----------
90,447
----------
Spain-0.86%
Bankinter, Ord.............................. 230 20,704
Iberdrola, S.A., Ord........................ 1,500 11,297
----------
32,001
----------
Switzerland-6.93%
BBC, Brown, Boveri and Cie,
A.G., Ord................................. 83 16,642
CS Holding, Bearer, Ord..................... 75 6,868
Ciba Geigy, A.G., Ord....................... 51 37,361
Switzerland-Continued
Compagnie Finaciere
Richemont-Units, Ord., "A"................ 5,000 $ 6,163
Holderbank Financiere Glaris, Ord.,
Warrants+................................. 2 3
Holderbank Financiere Glaris, A.G.,
Ord....................................... 10 8,202
Nestle, S.A. Ord............................ 33 34,343
Roche Holdings Genusscheine,
NPV, Ord.................................. 5 32,202
Sandoz, A.G., Ord........................... 55 37,905
Schweizerische Ruckversicherungs,
Ord....................................... 15 11,548
Schweizerischer Bank Gesellschaft,
Ord....................................... 16 16,568
Schweizerischer Bankverein, Ord............. 70 24,789
Swissair, A.G., Ord., Zurich................ 18 12,452
Zurich Versicherungs, Ord................... 10 12,560
----------
257,606
----------
United Kingdom-18.38%
Abbey National, PLC, Ord.................... 2,200 16,382
Agryll Group, PLC, Ord...................... 2,400 12,830
Allied Colloids Group, PLC, Ord............. 4,900 9,746
Argos, Ord.................................. 1,900 13,060
B.A.T. Industries, PLC, Ord................. 2,000 15,306
B.I.C.C., Ord............................... 1,500 7,088
BOC Group, PLC, Ord......................... 500 6,388
BTR, PLC, Ord............................... 2,600 13,217
British Gas, PLC, Ord....................... 2,200 10,134
British Petroleum, PLC, Ord................. 2,207 15,819
British Telecommunications
PLC, Ord.................................. 6,400 39,917
Cable & Wireless, PLC, Ord.................. 2,100 14,368
Chubb Security, Ord......................... 1,900 9,492
Forte, Ord.................................. 3,000 10,859
General Electric, PLC, Ord.................. 1,900 9,281
Glaxo, PLC, Ord............................. 3,335 40,938
Glynwed, PLC, Ord........................... 1,000 5,179
Granada Group, PLC, Ord..................... 800 7,739
Grand Metropolitan, PLC, Ord................ 2,300 14,107
</TABLE>
See notes to financial statements.
F-14
<PAGE>
CHUBB SERIES TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS-(Unaudited)
RESOLUTE INTERNATIONAL EQUITY PORTFOLIO-(Continued)
June 30, 1995
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-Continued
United Kingdom-Continued
Guardian Royal Exchange, PLC,
Ord....................................... 3,800 $ 12,515
Guinness, PLC, Ord.......................... 2,100 15,804
HSBC Holdings, Ord.......................... 1,050 13,557
Hanson Trust, PLC, Ord...................... 5,500 19,252
Hillsdown Holding, PLC, Ord................. 4,500 12,888
Inchape, PLC, Ord........................... 1,620 7,578
Kingfisher, Ord............................. 2,200 14,877
Kwik Save Group, Ord........................ 550 5,679
Lloyds Bank, PLC, Ord....................... 1,750 17,375
MEPC, Ord................................... 1,800 10,969
Pearson, PLC, Ord........................... 700 6,627
Peninsular & Oriental Steam
Navigation, Ord........................... 800 7,370
RTZ Corp., PLC, Ord......................... 1,000 13,047
Reckitt and Coleman, Ord.................... 890 9,389
Redland, PLC, Ord........................... 1,300 8,522
Reuter's Holding, Ord....................... 2,000 16,674
Rexam, PLC, Ord............................. 1,400 10,759
Rolls Royce, Ord............................ 5,000 13,882
Royal Bank of Scotland, PLC,
Ord....................................... 2,000 13,604
Scottish Hydro-Electric, PLC,
Ord....................................... 2,000 10,183
Scottish and Newcastle, PLC,
Ord....................................... 1,500 13,198
Sears Holdings, Ord......................... 6,700 10,607
Shell Transport and Trading Co.,
Ord....................................... 2,100 25,093
Smithkline Beecham, Ord.,
Equity Units.............................. 800 7,103
Smithkline Beecham, Ord..................... 750 6,790
Standard Chartered Bank, Ord................ 2,600 13,941
Sun Alliance Group, PLC, Ord................ 2,000 10,660
Tarmac, PLC, Ord............................ 8,000 14,320
Thorn EMI, PLC, Ord......................... 400 8,306
Tomkins, Ord................................ 2,700 9,666
United Buiscuts (Hldgs), PLC,
Ord....................................... 2,600 13,279
Vickers, PLC, Ord........................... 1,300 $ 4,282
Willis Corroon Group, PLC, Ord.............. 2,800 6,683
Yorkshire Electricity Group, Ord............ 1,000 11,042
Yorkshire Water, Ord........................ 1,200 10,998
Zeneca Group, Ord........................... 300 5,069
----------
683,438
----------
United States-0.18%
Repsol, ADR................................. 200 6,325
U.S. Industries, Inc.+...................... 31 423
----------
6,748
----------
TOTAL COMMON STOCK
(Cost $3,565,079)....................... 3,584,858
----------
TOTAL INVESTMENTS
(Cost $3,565,079*)...................... 96.40% 3,584,858
Other assets, less liabilities.............. 3.60 133,875
-------- ----------
TOTAL NET ASSETS......................... 100.00% $3,718,733
======== ==========
</TABLE>
- ---------------
*Aggregate cost for Federal income tax purposes.
+Non-income producing security.
See notes to financial statements.
F-15
<PAGE>
CHUBB SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES-(Unaudited)
June 30, 1995
<TABLE>
<CAPTION>
Resolute
Treasury Resolute Resolute
Money Resolute Resolute Small International
Market Bond Equity Company Equity
Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at cost-see accompanying
portfolios.......................................... $ 1,176,925 $ 1,259,794 $ 3,605,653 $ 2,322,124 $ 3,565,079
=========== =========== =========== =========== ===========
Investments, at value (Note B)...................... $ 1,177,228 $ 1,312,187 $ 3,786,294 $ 2,552,622 $ 3,584,858
Cash................................................ 170 3,069 8,159 334 865,796
Accrued investment income........................... 18,425 4,211 3,713 22,272
Receivable for portfolio securities sold............ 138,197 85,355 10,284 41,774
Deferred organization costs (Note F)................ 8,884 8,884 8,884 8,884 8,884
----------- ----------- ----------- ----------- -----------
Total Assets.................................. 1,186,282 1,480,762 3,892,903 2,575,837 4,523,584
LIABILITIES
Due to Chubb Life Insurance Company
of America......................................... 41 11,119 42,646 13,287 44,669
Payable for portfolio securities purchased.......... 201,834 125,372 90,721 737,885
Accrued expenses.................................... 11,921 13,069 15,431 21,090 22,297
----------- ----------- ----------- ----------- -----------
Total Liabilities............................. 11,962 226,022 183,449 125,098 804,851
----------- ----------- ----------- ----------- -----------
NET ASSETS........................................... $ 1,174,320 $ 1,254,740 $ 3,709,454 $ 2,450,739 $ 3,718,733
=========== =========== =========== =========== ===========
NET ASSETS CONSIST OF:
Paid in capital..................................... $ 1,148,575 $ 1,144,176 $ 3,461,607 $ 2,089,738 $ 3,679,175
Undistributed net investment income................. 25,491 35,738 13,819 12,164 22,922
Accumulated net realized gain (loss)
from investments................................... (49) 22,433 53,387 118,339 38,147
Undistributed net realized loss from
foreign currency transactions...................... (39,322)
Net unrealized gain on investments (Note C)......... 303 52,393 180,641 230,498 19,779
Net unrealized loss on translation of assets
and liabilities in foreign currencies (Note C)..... (1,968)
----------- ----------- ----------- ----------- -----------
NET ASSETS........................................... $ 1,174,320 $ 1,254,740 $ 3,709,454 $ 2,450,739 $ 3,718,733
=========== =========== =========== =========== ===========
Shares of common stock outstanding
(unlimited shares authorized)....................... 114,579 114,039 310,730 208,434 361,245
=========== =========== =========== =========== ===========
Net asset value and offering price per share......... $ 10.25 $ 11.00 $ 11.94 $ 11.76 $ 10.29
=========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
F-16
<PAGE>
CHUBB SERIES TRUST
STATEMENT OF OPERATIONS-(Unaudited)
For the period January 3, 1995 to June 30, 1995
<TABLE>
<CAPTION>
Resolute
Treasury Resolute Resolute
Money Resolute Resolute Small International
Market Bond Equity Company Equity
Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest......................................... $ 28,528 $ 39,923 $ 5,120 $ 6,562 $ 2,720
Dividends........................................ 15,251 17,821 34,857
Foreign taxes withheld........................... (5) (1,242)
---------- ---------- ---------- ---------- ----------
Total investment
income........................................ 28,528 39,923 20,366 24,383 36,335
Expenses:
Advisory fees (Note D)........................... 2,024 2,790 4,365 8,500 8,942
Director's fees.................................. 5,044 5,503 9,770 10,541 10,809
Professional fees................................ 4,771 5,195 6,319 9,958 10,173
Security valuation............................... 1,880 2,053 2,543 3,931 4,040
Shareholder reports.............................. 1,433 1,556 1,867 2,986 3,037
Amortization of deferred organization
costs (Note F).................................. 949 949 949 949 949
Insurance expense................................ 839 917 1,135 1,754 1,803
Custodian fees................................... 254 558 1,091 2,125 2,794
Miscellaneous expenses........................... 780 783 793 813 816
---------- ---------- ---------- ---------- ----------
Total expenses................................. 17,974 20,304 28,832 41,557 43,363
Expenses reimbursed by Chubb Life
and Morgan (Note D)............................. (14,937) (16,119) (22,285) (29,338) (29,950)
---------- ---------- ---------- ---------- ----------
Net expenses................................... 3,037 4,185 6,547 12,219 13,413
---------- ---------- ---------- ---------- ----------
Net investment income.......................... 25,491 35,738 13,819 12,164 22,922
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments.......... (49) 22,433 53,387 118,339 38,147
Net realized loss from foreign
currency transactions........................... (39,322)
Net unrealized gain on investments............... 303 52,393 180,641 230,498 19,779
Net change in unrealized loss on translation of
assets and liabilities in foreign currencies.... (1,968)
---------- ---------- ---------- ---------- ----------
Net realized and unrealized gain on
investments and foreign currency.............. 254 74,826 234,028 348,837 16,636
---------- ---------- ---------- ---------- ----------
Net increase in net assets
resulting from operations........................ $ 25,745 $ 110,564 $ 247,847 $ 361,001 $ 39,558
========== ========== ========== ========== ==========
</TABLE>
See notes to financial statements.
F-17
<PAGE>
CHUBB SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS-(Unaudited)
For the period January 3, 1995 to June 30, 1995
<TABLE>
<CAPTION>
Resolute
Treasury Resolute Resolute
Money Resolute Resolute Small International
Market Bond Equity Company Equity
Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income................................ $ 25,491 $ 35,738 $ 13,819 $ 12,164 $ 22,922
Net realized gain (loss) on
investments......................................... (49) 22,433 53,387 118,339 38,147
Net realized foreign exchange loss................... (39,322)
Net change in unrealized gain
on investments...................................... 303 52,393 180,641 230,498 19,779
Net change in unrealized loss on translation of
assets and liabilities in foreign currencies........ (1,968)
----------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations........................... 25,745 110,564 247,847 361,001 39,558
Increase in net assets derived from
shareholder transactions (Note E)................... 1,148,565 1,144,166 3,461,597 2,089,728 3,679,165
----------- ----------- ----------- ----------- -----------
Net increase in
net assets.......................................... 1,174,310 1,254,730 3,709,444 2,450,729 3,718,723
Net Assets:
Beginning of period................................. 10 10 10 10 10
----------- ----------- ----------- ----------- -----------
End of period (1)................................... $ 1,174,320 $ 1,254,740 $ 3,709,454 $ 2,450,739 $ 3,718,733
----------- ----------- ----------- ----------- -----------
(1) Including undistributed net investment income.... $ 25,491 $ 35,738 $ 13,819 $ 12,164 $ 22,922
=========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
F-18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB SERIES TRUST
June 30, 1994
NOTE A--ORGANIZATION
Chubb Series Trust (the "Trust") is an open-end management investment company
registered under the Investment Company Act of 1940. The Trust was organized as
a Delaware Business Trust on October 28, 1993 for the purpose of funding
Flexible Premium Variable Life Insurance Policies issued by Chubb Life Insurance
Company of America ("Chubb Life") and its affiliated insurance companies. The
Trust is composed of five separate portfolios (the "Portfolios"): the Resolute
Treasury Money Market Portfolio, the Resolute Bond Portfolio, the Resolute
Equity Portfolio, the Resolute Small Company Portfolio and the Resolute
International Equity Portfolio. Chubb Life's ownership at June 30, 1995 is as
follows:
<TABLE>
<CAPTION>
Percentage of
Portfolio Shares Owned Shares Outstanding
<S> <C> <C>
Resolute Treasury Money Market Portfolio........ 100,001 87.28%
Resolute Bond Portfolio......................... 100,001 87.69%
Resolute Equity Portfolio....................... 100,001 32.18%
Resolute Small Company Portfolio................ 200,001 95.95%
Resolute International Equity Portfolio......... 200,001 55.36%
</TABLE>
NOTE B--SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments: An equity security listed on a stock exchange is
valued at the closing sale price on the exchange on which such security is
principally traded. If no sale took place, the mean of the bid and asked prices
at the close of trading is used. A security not listed on a stock exchange is
valued at the closing sale price as reported on a readily available market
quotation system, or, if no sales took place, the mean of the bid and asked
prices at the close of trading in the over-the-counter market. Quotations of
foreign securities in foreign currencies are converted to U.S. dollar
equivalents using appropriately translated foreign market closing prices.
Securities listed on a foreign exchange are valued at the last quoted sale price
available before the time when net assets are valued. Securities or other assets
for which market quotations are not readily available are valued at fair value
in accordance with procedures established by the Portfolios' Trustees. All
portfolio securities with a remaining maturity of less than 60 days are valued
by the amortized cost method.
Trading in securities on most foreign exchanges and over-the-counter markets is
normally completed before the close of the domestic market and may also take
place on days on which the domestic market is closed. If events materially
affecting the value of foreign securities occur between the time when the
exchange on which they are traded closes and the time when the Portfolio's net
asset value is calculated, such securities will be valued at fair value in
accordance with procedures established by and under the general supervision of
the Portfolios' Trustees.
The books and records of the Portfolios are maintained in U.S. dollars. The
market values of investment securities, other assets and liabilities and forward
contracts stated in foreign currencies are translated at the prevailing exchange
rates at the end of the period. Purchases, sales, income and expense are
translated at the exchange rate prevailing on the respective dates of such
transactions. Translation gains and losses resulting from changes in the
exchange rate during the reporting period and gains and losses realized upon
settlement of foreign currency transactions are reported in the Statement of
Operations.
F-19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB SERIES TRUST
June 30, 1995
NOTE B--SIGNIFICANT ACCOUNTING POLICIES--(Continued)
Since the net assets of the Portfolios are presented at the exchange rates and
market values prevailing at the end of the period, the Portfolios do not isolate
the portion of the results of operations arising as a result of changes in
foreign exchange rates from the fluctuations arising from changes in the market
prices of securities during the period.
The Portfolios may enter into forward foreign currency contracts to protect
securities and related receivables and payables against fluctuations in future
foreign currency rates. A forward contract is an agreement to buy or sell
currencies of different countries on a specified future date at a specified
rate. Risks associated with such contracts include the movement in the value of
the foreign currency relative to the U.S. dollar and the ability of the
counterparty to perform. The market value of the contract will fluctuate with
changes in currency exchange rates. Contracts are valued daily and the change in
the market value is recorded by the Portfolio as unrealized appreciation or
depreciation of foreign currency translations. At June 30, 1995, the Resolute
International Equity Portfolio had the following open forward foreign currency
contracts:
Summary of Open Contracts
<TABLE>
<CAPTION>
U.S. Dollar Net Unrealized
Foreign Currency Contracts to Value at Appreciation/
Purchase Contracts Settlement Date Receive Cost 06/30/95 (Depreciation)
- ------------------- ----------------- ------------ -------- ----------- --------------
<S> <C> <C> <C> <C> <C>
French Franc 07/03/95-07/04/95 909,897 $186,480 $187,705 $1,225
Great British Pound 07/03/95-07/04/95 193,671 309,981 308,147 (1,834)
Hong Kong Dollar 07/03/95-07/04/95 258,269 33,379 33,381 2
Italian Lira 07/03/95 46,114,500 27,098 28,169 1,071
Japanese Yen 07/03/95-07/04/95 6,949,271 82,390 81,852 (538)
Malysian Ringgit 07/05/95 83,635 34,329 34,306 (23)
Singapore Dollar 07/04/95 52,495 37,590 37,563 (27)
Spanish Pesata 07/04/95 1,438,919 11,912 11,883 (29)
Swiss Franc 07/04/95 14,418 12,573 12,514 (59)
-------- -------- ------
$735,732 $735,520 ($212)
======== ======== ======
</TABLE>
<TABLE>
<CAPTION>
U.S. Dollar
Foreign Currency Contracts to Value at Net Unrealized
Sale Contracts Settlement Date Deliver Cost 06/30/95 (Depreciation)
- ------------------- ----------------- ------------ -------- ----------- --------------
<S> <C> <C> <C> <C> <C>
French Franc 07/03/95 72,553 $ 14,908 $ 14,967 ($59)
Great British Pound 08/01/95 43,882,955 26,679 26,807 (128)
Japanese Yen 07/10/95 25,515,100 339,706 341,762 (2,056)
-------- -------- -------
$381,293 $383,536 ($2,243)
======== ======== =======
</TABLE>
Security Transactions and Investment Income: Security transactions are recorded
on a trade date basis. Realized gains and losses on investments sold are
recorded on the basis of the first-in, first-out method. Interest income,
including where applicable, amortization of discount on investments, is recorded
on the accrual basis. Dividend income is recorded on the ex-dividend date,
except for
F-20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB SERIES TRUST
June 30,1995
certain dividends from foreign securities, which are recorded as soon as the
Portfolios are informed of the dividend.
Repurchase Agreements: The Trust may purchase Portfolio securities from
financial institutions deemed to be creditworthy by the investment adviser
subject to the seller's agreement to repurchase and the Trust's agreement to
resell such securities at mutually agreed upon prices. Securities purchased
subject to such repurchase agreements are deposited with the Trust's custodian
or are maintained in the Federal Reserve/Treasury book-entry system and must
have, at all times, an aggregate market value greater than 101% of the
repurchase price (including accrued interest).
If the value of the underlying security, including accrued interest, falls below
the value of 101% of the repurchase price plus accrued interest, the Trust will
require the seller to deposit the additional collateral by the next business
day. Default or bankruptcy of the seller may, however, expose the applicable
Portfolio of the Trust to possible delay in connection with the disposition of
the underlying securities of loss to the extent that proceeds from a sale of the
underlying securities were less than the repurchase price under the agreement.
Dividends and Distributions to Shareholders: Distribution to shareholders from
ordinary income and net realized capital gains are declared and distributed at
least once annually. Dividends and distributions are recorded on the ex-dividend
date.
Federal Taxes: It is the policy of the Trust that each Portfolio continue to
qualify as a regulated investment company, by complying with the requirements of
the Internal Revenue Code applicable to regulated investment companies, and by
distributing substantially all of its taxable earnings to its shareholders.
Therefore, no Federal tax provision is required.
NOTE C--INVESTMENTS
Net realized gains and losses on investment securities sold are determined by
using the first-in, first-out method. The aggregate cost of investments owned
for Federal income tax purposes is the same as for financial reporting purposes.
As of June 30, 1995, gross unrealized gains and losses were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Unrealized Unrealized Unrealized
Gains Losses Gain/(Loss)
---------- ---------- -----------
<S> <C> <C> <C>
Resolute Treasury Money Market Portfolio.......... $ 303 $ 0 $ 303
Resolute Bond Portfolio........................... 53,063 670 52,393
Resolute Equity Portfolio......................... 198,893 18,252 180,641
Resolute Small Company Portfolio.................. 284,258 53,760 230,498
Resolute International Equity Portfolio........... 138,694 118,915 19,779
</TABLE>
As of June 30, 1995, the International Equity Portfolio had unrealized foreign
currency losses of $1,968.
F-21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB SERIES TRUST
June 30, 1995
Purchases and sales of investment securities for the period ended June 30, 1995,
other than short-term obligations, were as follows:
<TABLE>
<CAPTION>
Proceeds
Cost of from
Investment Investment
Securities Securities
Purchased Sold
---------- ----------
<S> <C> <C>
Resolute Bond Portfolio......................... $3,056,023 $1,894,136
Resolute Equity Portfolio....................... 4,034,693 594,709
Resolute Small Company Portfolio................ 2,900,324 944,245
Resolute International Equity Portfolio......... 4,668,621 1,146,826
</TABLE>
NOTE D--INVESTMENT ADVISORY FEES, MANAGEMENT AGREEMENTS
The Trust has entered into an investment management agreement with Chubb
Investment Advisory Corporation, ("Chubb Investment"), a wholly-owned subsidiary
of Chubb Life. Under the agreement, Chubb Investment provides investment
management, administrative and transfer agency services for the Trust. Chubb
Investment is paid a fee for its services, computed daily and paid monthly, at
the annual rate of: .40% of average daily net assets of the Resolute Treasury
Money Market Portfolio; .50% of average daily net assets of the Resolute Bond
Portfolio; .60% of average daily net assets of the Resolute Equity Portfolio;
.80% of average daily net assets of the Resolute Small Company Portfolio, and
.80% of average daily net assets of the Resolute International Equity Portfolio.
Morgan Guaranty Trust Company of New York ("Morgan") serves as sub-investment
manager to the Trust, providing investment advice and management services for
each Portfolio. As compensation for its services, Morgan is entitled to receive
fees from Chubb Investment (and not from the Portfolios), computed daily and
paid monthly, at an annual rate of: .20% of average daily net assets of the
Resolute Treasury Money Market Portfolio; .30% of average daily net assets of
the Resolute Bond Portfolio; .40% of average daily net assets of the Resolute
Equity Portfolio; .60% of average daily net assets of the Resolute Small
Company Portfolio, and .60% of the average daily net assets of the Resolute
International Equity Portfolio.
Chubb Life and Morgan have agreed that for the first two years of the Trust's
existence they will each assume 50% of the expenses of each Portfolio of the
Trust in excess of .60%, .75%, .90%, 1.15% and 1.20% of the average daily net
assets value respectively of the Treasury Money Market, Bond, Equity, Small
Company and Resolute International Equity Portfolios.
F-22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB SERIES TRUST
June 30, 1995
NOTE E--SHAREHOLDERS' TRANSACTIONS
Following is a summary of transactions with shareholders for each portfolio for
the period January 3, 1995 to June 30, 1995.
<TABLE>
<CAPTION>
Resolute Treasury Money Market Portfolio
----------------------------------------------
Shares Dollars
-------- ----------
<S> <C> <C>
Shares sold........................................... 116,971 $1,173,002
Shares redeemed....................................... (2,393) (24,437)
------- ----------
Net increase...................................... 114,578 $1,148,565
======= ==========
<CAPTION>
Resolute Bond Portfolio
----------------------------------------------
Shares Dollars
-------- ----------
<S> <C> <C>
Shares sold........................................... 116,680 $1,172,243
Shares redeemed....................................... (2,642) (28,077)
------- ----------
Net increase...................................... 114,038 $1,144,166
======= ==========
<CAPTION>
Resolute Equity Portfolio
----------------------------------------------
Shares Dollars
-------- ----------
<S> <C> <C>
Shares sold........................................... 314,531 $3,506,269
Shares redeemed....................................... (3,802) (44,672)
------- ----------
Net increase...................................... 310,729 $3,461,597
======= ==========
</TABLE>
F-23
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB SERIES TRUST
June 30, 1995
NOTE E--SHAREHOLDERS' TRANSACTIONS-(Continued)
<TABLE>
<CAPTION>
Resolute Small Company Portfolio
----------------------------------------------
Shares Dollars
-------- ----------
<S> <C> <C>
Shares sold........................................... 209,688 $2,104,065
Shares redeemed....................................... (1,255) (14,337)
------- ----------
Net increase...................................... 208,433 $2,089,728
======= ==========
<CAPTION>
Resolute International Equity Portfolio
----------------------------------------------
Shares Dollars
-------- ----------
<S> <C> <C>
Shares sold........................................... 366,687 $3,734,726
Shares redeemed....................................... (5,443) (55,561)
------- ----------
Net increase...................................... 361,244 $3,679,165
======= ==========
</TABLE>
NOTE F--ORGANIZATION COSTS
Costs incurred in connection with the initial organization of the Trust are
being amortized on the straight-line basis over a period of five years.
F-24
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL HIGHLIGHTS....................................................... 2
PERFORMANCE AND YIELD INFORMATION.......................................... 16
PORTFOLIOS................................................................. 16
INVESTMENT OBJECTIVES AND POLICIES......................................... 16
World Growth Stock Portfolio............................................. 17
Investment Objectives.................................................. 17
Investment Policies.................................................... 17
Risk Factors........................................................... 18
Money Market Portfolio................................................... 18
Investment Objectives.................................................. 18
Investment Policies.................................................... 18
Risk Factors........................................................... 18
Gold Stock Portfolio..................................................... 18
Investment Objectives.................................................. 18
Investment Policies.................................................... 19
Risk Factors........................................................... 19
Bond Portfolio........................................................... 19
Investment Objectives.................................................. 19
Investment Policies.................................................... 19
Risk Factors........................................................... 20
Domestic Growth Stock Portfolio.......................................... 20
Investment Objectives.................................................. 20
Investment Policies.................................................... 20
Risk Factors........................................................... 21
Growth and Income Portfolio.............................................. 21
Investment Objectives.................................................. 21
Investment Policies.................................................... 21
Risk Factors........................................................... 22
Capital Growth Portfolio................................................. 22
Investment Objectives.................................................. 22
Investment Policies.................................................... 22
Risk Factors........................................................... 23
Balanced Portfolio....................................................... 23
Investment Objectives.................................................. 23
Investment Policies.................................................... 23
Risk Factors........................................................... 23
Emerging Growth Portfolio................................................ 23
Investment Objective................................................... 23
Investment Policies.................................................... 23
Risk Factors........................................................... 24
Additional Risk Factors.................................................. 25
Foreign Securities....................................................... 26
American Depository Receipts............................................. 27
Forward Foreign Currency Exchange Contracts.............................. 27
Repurchase Agreements.................................................... 27
Zero Coupon Bonds........................................................ 28
Securities and Index Options............................................. 28
Purchasing Put and Call Options.......................................... 28
Futures Contracts........................................................ 28
Lending of Securities.................................................... 29
When Issued Securities................................................... 29
Corporate Asset-Backed Securities........................................ 29
Loan Participations and Other Direct Indebtedness........................ 29
INVESTMENT RESTRICTIONS.................................................... 30
Portfolio Turnover....................................................... 30
MANAGEMENT OF THE FUND..................................................... 30
CAPITAL STOCK.............................................................. 31
TAXES AND DIVIDENDS........................................................ 32
OFFERING AND REDEMPTION OF SHARES.......................................... 32
OTHER INFORMATION.......................................................... 33
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, IN THE STATEMENT OF ADDITIONAL INFORMATION, AND IN THE
ATTACHED PROSPECTUS FOR THE POLICY.
<PAGE>
FINANCIAL HIGHLIGHTS
The following table includes selected unaudited data for a share of capital
stock outstanding for the Emerging Growth Portfolio throughout the period
indicated and other performance information derived from the unaudited financial
statements. The unaudited financial statements are included in the Statement of
Additional Information.
For a share outstanding for the five month period ended September 30, 1995.
CHUBB AMERICA FUND, INC.
FINANCIAL HIGHLIGHTS --
For a share outstanding throughout the period
<TABLE>
<CAPTION>
Emerging Growth Portfolio
-----------------------------
(Unaudited)
Period From
May 1,
1995 to
September
30, 1995(A)
-----------
<S> <C>
Net asset value, beginning of
period........................... $ 10.00
Income From Investment
Operations
Net investment loss............. (0.03)
Net realized and unrealized gains
(losses) on securities......... 2.85
----------
Total from investment
operations..................... 2.82
----------
Net asset value, end of period... $ 12.82
==========
Total Return(B).................. 28.21%(D)
Ratios to Average Net Assets:
Expenses........................ 1.68%(C)
Net investment loss............. (0.80%)(C)
Portfolio Turnover Rate........... 7.60%(D)
Net Assets, At End of Period...... $7,090,415
</TABLE>
(A) Per share data calculated from the initial offering date, May 1, 1995; for
sale to Chubb Separate Account A.
(B) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth more
or less than the original cost.
(C) Per share data and ratios calculated on an annualized basis.
(D) Not annualized.
2
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables include selected data for a share of capital stock
outstanding for each fund throughout the periods indicated and other performance
information derived from the financial statements. The related financial
statements and report of Ernst & Young LLP, independent auditors, are contained
in the Statement of Additional Information. In addition, further information
about the funds' performance is contained in the Fund's annual report to
shareholders, which may be obtained without charge.
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
World Growth Stock Portfolio
-------------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
1994 1993 1992 1991
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of year..................... $ 20.89 $ 16.73 $ 16.45 $ 13.70
Income From Investment
Operations
Net investment income.. 0.25 0.24 0.35 0.34
Net realized and
unrealized gains (losses)
on securities............. (0.89) 5.40 0.65 2.75
----------- ----------- ----------- -----------
Total from investment
operations............... (0.64) 5.64 1.00 3.09
Less Distributions to
Shareholders
Dividends from net
investment income....... (0.25) (0.24) (0.35) (0.34)
Dividends in excess of net
investment income.......
Distributions from capital
gains................... (0.81) (1.24) (0.37)
Distributions in excess
of capital gains........ (0.19)
Returns of capital........
----------- ----------- ----------- -----------
Total distributions....... (1.25) (1.48) (0.72) (0.34)
Net asset value, end
of year..................... $ 19.00 $ 20.89 $ 16.73 $ 16.45
=========== =========== =========== ===========
Total Return (B).............. (3.05%) 33.73% 6.10% 22.53%
Ratios to Average Net Assets:
Expenses.................. 1.00% 1.04% 1.17% 1.14%
Net investment income..... 1.56% 1.64% 2.19% 2.40%
Portfolio Turnover Rate....... 18.74% 34.90% 32.27% 50.06%
Net Assets, At End of Year.... $52,903,768 $42,031,141 $25,416,357 $22,659,930
</TABLE>
- ----------
(A) Per share data calculated from initial offering date, August 1, 1985, for
sale to Chubb Separate Account A. Ratios to average net assets calculated on
an annualized basis.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the separate
account or related insurance policies. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(C) Not annualized.
3
<PAGE>
<TABLE>
<CAPTION>
WORLD GROWTH STOCK PORTFOLIO
----------------------------------------------------------------------------------
FOR THE
PERIOD
FROM
YEAR YEAR YEAR YEAR YEAR AUGUST 1,
ENDED ENDED ENDED ENDED ENDED 1985 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1990 1989 1988 1987 1986 1985(A)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$ 16.07 $ 12.77 $ 11.48 $ 13.75 $ 10.81 $ 10.27
0.36 0.32 0.18 0.06 0.31 0.05
(2.00) 3.34 1.32 (0.91) 2.69 0.49
----------- ----------- ---------- ---------- ---------- ----------
(1.64) 3.66 1.50 (0.85) 3.00 0.54
(0.37) (0.36) (0.18) (0.34) (0.06)
(0.36) (0.03) (1.08)
----------- ----------- ---------- ---------- ---------- ----------
(0.73) (0.36) (0.21) (1.42) (0.06)
$ 13.70 $ 16.07 $ 12.77 $ 11.48 $ 13.75 $ 10.81
=========== =========== ========== ========== ========== ==========
(10.38%) 28.62% 13.10% (7.74%) (27.77%) 5.26%(C)
1.22% 1.42% 1.60% 1.81% 1.62% 0.74%
2.65% 2.46% 1.80% 1.14% 3.02% 0.53%
25.79% 5.73% 14.75% 8.88% 67.53% N/A
$16,052,089 $14,467,050 $8,781,827 $5,253,616 $2,105,193 $1,084,864
</TABLE>
4
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year (A):
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
---------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 1991
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of year................... $ 10.26 $ 10.22 $ 10.22 $ 10.21
INCOME FROM INVESTMENT OP-
ERATIONS
Net investment income.... 0.35 0.20 0.29 0.52
Net realized and
unrealized gains (loss-
es) on
securities.............. (0.01) 0.04 0.01
---------- ---------- ---------- ----------
Total from investment op-
erations................ 0.34 0.24 0.29 0.53
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net in-
vestment income......... (0.35) (0.20) (0.29) (0.52)
Dividends in excess of
net investment income...
Distributions from capi-
tal gains...............
Distributions in excess
of capital gains........
Returns of capital.......
---------- ---------- ---------- ----------
Total distributions...... (0.35) (0.20) (0.29) (0.52)
Net asset value, end of
year...................... $ 10.25 $ 10.26 $ 10.22 $ 10.22
========== ========== ========== ==========
Total Return (C)........... 3.28% 2.32% 2.83% 5.18%
Ratios to Average Net As-
sets:
Expenses................. 0.65% 0.74% 0.85% 0.85%
Net investment income.... 3.31% 2.32% 2.81% 4.95%
Portfolio Turnover Rate
(D)....................... N/A N/A N/A N/A
Net Assets, At End of Year. $7,680,485 $5,061,181 $3,956,152 $3,672,941
</TABLE>
- -------
(A) The per share amounts which are shown have been computed based on the
average number of shares outstanding during each year.
(B) Per share data calculated from initial offering date, August 1, 1985 for
sale to Chubb Separate Account A. Ratios to average net assets calculated
on an annual basis.
(C) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(D) There were no purchases and/or sales of securities other than short-term
obligations during the year. Therefore, the portfolio turnover rate has not
been calculated.
(E) Not annualized.
5
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
-----------------------------------------------------------------------------
FOR THE
PERIOD
FROM
YEAR YEAR YEAR YEAR YEAR AUGUST 1,
ENDED ENDED ENDED ENDED ENDED 1985 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1990 1989 1988 1987 1986 1985(B)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$ 10.18 $10.16 $ 10.09 $ 10.56 $ 10.33 $ 10.06
0.73 0.78 0.63 0.49 0.56 0.27
---------- ---------- ---------- ---------- ---------- ----------
0.73 0.78 0.63 0.49 0.56 0.27
(0.70) (0.76) (0.56) (0.96) (0.33)
---------- ---------- ---------- ---------- ---------- ----------
(0.70) (0.76) (0.56) (0.96) (0.33)
$ 10.21 $ 10.18 $ 10.16 $ 10.09 $ 10.56 $ 10.33
========== ========== ========== ========== ========== ==========
7.15% 7.63% 6.33% 4.85% 5.36% 2.72%(E)
1.09% 1.37% 1.79% 1.81% 1.45% 0.65%
6.90% 7.35% 6.16% 4.75% 5.23% 2.62%
N/A N/A N/A N/A N/A N/A
$2,910,677 $2,496,140 $2,228,190 $1,539,184 $1,249,363 $1,032,539
</TABLE>
6
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
GOLD STOCK PORTFOLIO
-----------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 1991
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, begin-
ning of year........... $ 19.00 $ 11.57 $ 11.99 $ 12.76
INCOME FROM INVESTMENT
OPERATIONS
Net investment income. 0.03 0.02 0.03 0.07
Net realized and
unrealized gains
(losses) on
securities........... (2.65) 7.43 (0.42) (0.77)
---------- ---------- ---------- ----------
Total from investment
operations........... (2.62) 7.45 (0.39) (0.70)
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income.... (0.03) (0.02) (0.03) (0.07)
Dividends in excess of
net investment
income...............
Distributions from
capital gains........
Distributions in
excess of capital
gains................ (0.10)
Returns of capital....
---------- ---------- ---------- ----------
Total distributions... (0.13) (0.02) (0.03) (0.07)
Net asset value, end of
year................... $ 16.25 $ 19.00 $ 11.57 $ 11.99
========== ========== ========== ==========
Total Return (B)........ (13.77%) 63.90% (3.29%) (5.48%)
Ratios to Average Net
Assets:
Expenses.............. 0.99% 1.01% 1.13% 1.16%
Net investment income. 0.18% 0.14% 0.24% 0.57%
Portfolio Turnover Rate. 17.43% 7.32% 7.78% 14.23%
Net Assets, At End of
Year................... $7,351,625 $7,863,581 $4,338,297 $4,646,951
</TABLE>
- -------
(A) Per share data calculated from initial offering date, August 1, 1985 for
sale to Chubb Separate Account A. Ratios to average net assets calculated
on an annual basis.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(C) Not annualized.
7
<PAGE>
<TABLE>
<CAPTION>
GOLD STOCK PORTFOLIO
---------------------------------------------------------------------------------
FOR THE
PERIOD
FROM
YEAR YEAR YEAR YEAR YEAR AUGUST 1,
ENDED ENDED ENDED ENDED ENDED 1985 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1990 1989 1988 1987 1986 1985(A)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$ 16.95 $14.37 $ 18.24 $ 13.59 $ 10.00 $ 10.04
0.07 0.06 (0.03) (0.03) (0.07) 0.05
(4.19) 2.70 (3.84) 4.69 3.74 (0.09)
---------- ---------- ---------- ---------- ---------- --------
(4.12) 2.76 (3.87) 4.66 3.67 (0.04)
(0.70) (0.05) (0.08)
(0.12) (0.01)
(0.01)
---------- ---------- ---------- ---------- ---------- --------
(0.70) (0.18) (0.01) (0.08)
$ 12.76 $ 16.95 $ 14.37 $ 18.24 $ 13.59 $ 10.00
========== ========== ========== ========== ========== ========
(24.28%) 19.24% (21.24%) 34.29% 37.00% (0.40%)(C)
1.36% 1.39% 1.62% 1.92% 1.48% 0.65%
0.59% 0.39% (0.38%) (0.24%) (0.63%) 0.43%
17.61% 3.05% 9.92% 7.02% 7.43% N/A
$5,390,279 $5,969,256 $4,258,297 $3,821,605 $1,458,593 $999,946
</TABLE>
8
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
DOMESTIC GROWTH STOCK PORTFOLIO
------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 1991
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of year................... $ 16.14 $ 15.16 $ 12.96 $ 10.15
INCOME FROM INVESTMENT OP-
ERATIONS
Net investment income.... 0.09 0.12 0.14 0.24
Net realized and
unrealized gains
(losses) on securities.. 1.12 2.29 3.27 3.13
----------- ----------- ----------- -----------
Total from investment op-
erations................ 1.21 2.41 3.41 3.37
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income....... (0.09) (0.12) (0.14) (0.24)
Dividends in excess of
net investment income...
Distributions from capi-
tal gains............... (1.32) (1.31) (1.07) (0.32)
Distributions in excess
of capital gains........
Returns of capital.......
----------- ----------- ----------- -----------
Total distributions...... (1.41) (1.43) (1.21) (0.56)
Net asset value, end of
year...................... $ 15.94 $ 16.14 $ 15.16 $ 12.96
=========== =========== =========== ===========
Total Return (B)........... 7.66% 15.89% 26.50% 33.18%
Ratios to Average Net As-
sets:
Expenses................. 0.89% 0.97% 1.07% 1.13%
Net investment income.... 0.63% 0.76% 1.07% 2.02%
Portfolio Turnover Rate.... 46.65% 49.47% 41.36% 40.93%
Net Assets, At End of Year. $31,458,666 $25,072,289 $19,985,838 $15,583,806
</TABLE>
- -------
(A) Per share data calculated from initial offering date, April 18, 1986 for
sale to Chubb Separate Account A. Ratios to average net assets calculated
on an annual basis.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(C)Not annualized.
9
<PAGE>
<TABLE>
<CAPTION>
DOMESTIC GROWTH STOCK PORTFOLIO
------------------------------------------------------------------
FOR THE
PERIOD
FROM
APRIL 18,
YEAR YEAR YEAR YEAR 1986 TO
ENDED ENDED ENDED ENDED DECEMBER
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 31,
1990 1989 1988 1987 1986(A)
------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C>
$ 13.25 $ 11.71 $ 9.54 $ 10.57 $ 10.00
0.26 0.18 0.11 0.04 0.10
(2.71) 2.06 2.40 (0.11) 0.47
----------- ----------- ---------- ---------- ----------
(2.45) 2.24 2.51 (0.07) 0.57
(0.26) (0.21) (0.10) (0.12)
(0.39) (0.49) (0.24) (0.84)
----------- ----------- ---------- ---------- ----------
(0.65) (0.70) (0.34) (0.96)
$ 10.15 $ 13.25 $ 11.71 $ 9.54 $ 10.57
=========== =========== ========== ========== ==========
(18.55%) 19.36% 26.31% (1.61%) 5.65%(C)
1.25% 1.45% 1.70% 1.75% 1.64%
2.38% 1.59% 1.26% 0.71% 1.32%
15.17% 10.32% 22.69% 13.53% 31.53%
$10,517,783 $11,320,279 $6,893,776 $3,448,383 $1,139,554
</TABLE>
10
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
BOND PORTFOLIO
-----------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 1991
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of year.................. $ 10.28 $ 10.21 $ 10.61 $ 9.83
INCOME FROM INVESTMENT OP-
ERATIONS
Net investment income... 0.35 0.74 0.66 0.72
Net realized and
unrealized gains
(losses) on securities. (0.58) 0.13 0.13 0.79
----------- ---------- ---------- ----------
Total from investment
operations............. (0.23) 0.87 0.79 1.51
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income...... (0.35) (0.74) (0.66) (0.73)
Dividends in excess of
net investment income..
Distributions from capi-
tal gains.............. (0.06) (0.53)
Distributions in excess
of capital gains.......
Returns of capital......
----------- ---------- ---------- ----------
Total distributions..... (0.35) (0.80) (1.19) (0.73)
Net asset value, end of
year..................... $ 9.70 $ 10.28 $ 10.21 $ 10.61
=========== ========== ========== ==========
Total Return (B).......... (2.28%) 8.68% 7.46% 15.34%
Ratios to Average Net As-
sets:
Expenses................ 0.68% 0.74% 0.88% 1.03%
Net investment income... 6.07% 7.59% 6.83% 7.12%
Portfolio Turnover Rate... 140.30% 112.66% 81.23% 23.73%
Net Assets, At End of
Year..................... $13,066,445 $5,461,879 $4,042,506 $3,516,314
</TABLE>
- -------
(A) Per share data calculated from initial offering date, April 18, 1986 for
sale to Chubb Separate Account A. Ratios to average net assets calculated
on an annual basis.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(C) Not annualized.
11
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO
---------------------------------------------------------------
FOR THE
PERIOD
FROM
APRIL 18,
YEAR YEAR YEAR YEAR 1986 TO
ENDED ENDED ENDED ENDED DECEMBER
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 31,
1990 1989 1988 1987 1986(A)
------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C>
$ 9.76 $9.29 $ 9.38 $ 10.47 $ 10.02
0.75 0.73 0.62 0.55 0.37
0.06 0.47 (0.09) (0.65) 0.08
---------- ---------- ---------- ---------- ----------
0.81 1.20 0.53 (0.10) 0.45
(0.74) (0.73) (0.62) (0.94)
(0.05)
---------- ---------- ---------- ---------- ----------
(0.74) (0.73) (0.62) (0.99)
$ 9.83 $ 9.76 $ 9.29 $ 9.38 $ 10.47
========== ========== ========== ========== ==========
8.44% 12.92% 5.62% (1.04%) 4.47%(C)
1.21% 1.60% 1.80% 1.96% 1.18%
7.97% 7.62% 6.85% 6.43% 5.08%
29.25% 7.64% 13.80% 53.17% 97.37%
$2,905,564 $2,289,788 $1,730,229 $1,302,390 $1,069,355
</TABLE>
12
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
GROWTH AND INCOME PORTFOLIO
-----------------------------------------
YEAR YEAR PERIOD FROM
ENDED ENDED MAY 1, 1992 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 (A)
------------ ------------ --------------
<S> <C> <C> <C>
Net asset value, beginning of year. $ 12.35 $ 11.10 $ 10.27
INCOME FROM INVESTMENT OPERATIONS
Net investment income............ 0.13 0.12 0.02
Net realized and unrealized gains
(losses) on securities.......... (0.65) 1.53 0.83
---------- ---------- ----------
Total from investment operations. (0.52) 1.65 0.85
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment in-
come............................ (0.13) (0.12) (0.02)
Dividends in excess of net in-
vestment income.................
Distributions from capital gains. (0.48) (0.28)
Distributions in excess of capi-
tal gains.......................
Returns of capital...............
---------- ---------- ----------
Total distributions.............. (0.61) (0.40) (0.02)
Net asset value, end of year....... $ 11.22 $ 12.35 $ 11.10
========== ========== ==========
Total Return (B)................... (4.24%) 14.94% 12.48%
Ratios to Average Net Assets:
Expenses......................... 1.10% 1.35% 2.09%(C)
Net investment income............ 1.52% 1.38% 0.36%(C)
Portfolio Turnover Rate............ 38.17% 77.68% 54.11%
Net Assets, At End of Year......... $5,610,472 $2,831,442 $1,489,179
</TABLE>
- -------
(A) Per share data calculated from the initial offering date, May 1, 1992, for
sale to Chubb Separate Account A. For the period from the start of business
April 1, 1992 to April 30, 1992, net investment income per share aggregated
$0 for the Growth and Income Portfolio.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost. Total return for periods of less than
one year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.
13
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
CAPITAL GROWTH PORTFOLIO
--------------------------------------------
YEAR YEAR PERIOD FROM
ENDED ENDED MAY 1, 1992 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 (A)
------------ ------------ --------------
<S> <C> <C> <C>
Net asset value, beginning of
year............................ $ 14.26 $ 12.42 $ 9.95
INCOME FROM INVESTMENT OPERATIONS
Net investment income.......... 0.03 (0.01)
Net realized and unrealized
gains (losses) on securities.. (0.49) 3.03 2.69
----------- ----------- ----------
Total from investment opera-
tions......................... (0.46) 3.03 2.68
LESS DISTRIBUTIONS TO SHAREHOLD-
ERS
Dividends from net investment
income........................ (0.03)
Dividends in excess of net in-
vestment income...............
Distributions from capital
gains......................... (0.33) (1.19) (0.21)
Distributions in excess of cap-
ital gains.................... (0.06)
Returns of capital.............
----------- ----------- ----------
Total distributions............ (0.42) (1.19) (0.21)
Net asset value, end of year..... $ 13.38 $ 14.26 $ 12.42
=========== =========== ==========
Total Return (B)................. (3.26%) 24.73% 40.40%
Ratios to Average Net Assets:
Expenses....................... 1.22% 1.33% 1.96% (C)
Net investment income.......... 0.25% (0.11%) (0.37%)(C)
Portfolio Turnover Rate.......... 202.04% 162.79% 104.76%
Net Assets, At End of Year....... $27,564,086 $15,373,489 $5,343,734
</TABLE>
- -------
(A) Per share data calculated from the initial offering date, May 1, 1992, for
sale to Chubb Separate Account A. For the period from the start of business
April 1, 1992 to April 30, 1992, net investment income per share aggregated
$0 for the Capital Growth Portfolio.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost. Total return for periods of less than
one year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.
14
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
BALANCED PORTFOLIO
-------------------------------------------
YEAR YEAR PERIOD FROM
ENDED ENDED MAY 1, 1992 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 (A)
------------ ------------ --------------
<S> <C> <C> <C>
Net asset value, beginning of year. $ 11.22 $ 10.77 $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income............ 0.32 0.25 0.16
Net realized and unrealized gains
(losses) on securities.......... (0.47) 0.74 0.67
----------- ----------- ----------
Total from investment operations. (0.15) 0.99 0.83
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment in-
come............................ (0.32) (0.25) (0.16)
Dividends in excess of net in-
vestment income.................
Distributions from capital gains. (0.13) (0.25)
Distributions in excess of capi-
tal gains....................... (0.04)
Returns of capital...............
----------- ----------- ----------
Total distributions.............. (0.45) (0.54) (0.16)
Net asset value, end of year....... $ 10.62 $ 11.22 $ 10.77
=========== =========== ==========
Total Return (B)................... (1.33%) 9.27% 12.33%
Ratios to Average Net Assets:
Expenses......................... 1.01% 1.07% 1.43%(C)
Net investment income............ 3.34% 2.79% 2.80%(C)
Portfolio Turnover Rate............ 103.68% 65.49% 77.33%
Net Assets, At End of Year......... $14,764,853 $11,703,898 $6,944,437
</TABLE>
- -------
(A) Per share data calculated from the initial offering date, May 1, 1992, for
sale to Chubb Separate Account A. For the period from the start of business
April 1, 1992 to April 30, 1992, net investment income per share aggregated
$.03 for the Balanced Portfolio.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost. Total return for periods of less than
one year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.
15
<PAGE>
PERFORMANCE AND YIELD INFORMATION
From time to time the Fund may advertise the yield and/or the average annual
total return of some or all of its nine investment portfolios. These figures
are based on historical earnings and are not intended to indicate future
performance. Shares of the portfolios are presently offered only to
corresponding divisions of separate accounts established by Chubb Life
Insurance Company of America ("Chubb Life"), or its affiliated insurance
companies, to fund flexible premium life insurance policies. None of these
performance figures reflect fees and charges imposed under such flexible
premium life insurance policies, which fees and charges will reduce the yield
and total return to policyowners; therefore, these performance figures may be
of limited use for comparative purposes.
The Money Market Portfolio's yield quotations represent the Portfolio's
investment income, less expenses, expressed as a percentage of assets on an
annualized basis for a seven-day period. The yield is expressed as both a
simple annualized yield and a compounded effective yield. The yield for the
non-money market portfolios is calculated by dividing the portfolio's net
investment income per share during a recent 30-day period by the maximum
offering price per share of that Portfolio (which is the net asset value of
that Portfolio) on the last day of the period.
The average annual total return quotations of the non-money market portfolios
are determined by computing the average annual percentage change in value of a
$1,000 investment, made at the maximum public offering price (which is net
asset value) for certain specified periods. This computation assumes
reinvestment of all dividends and distributions.
PORTFOLIOS
The Fund currently consists of nine investment portfolios, namely the World
Growth Stock Portfolio, the Money Market Portfolio, the Gold Stock Portfolio,
the Bond Portfolio, the Domestic Growth Stock Portfolio, the Growth and Income
Portfolio, the Capital Growth Portfolio, the Balanced Portfolio and the
Emerging Growth Portfolio (the "Portfolios").
The separate accounts established by Chubb Life or its affiliated insurance
companies are used for the purpose of funding Flexible Premium Variable Life
Insurance Policies (the "Policies") issued by Chubb Life, its affiliated
insurance companies and their successors or assigns. The owner of a Policy may
allocate among the Portfolios the amounts available for investment under the
Policy. Chubb Life is a wholly-owned subsidiary of The Chubb Corporation, a New
Jersey corporation.
In the future, the Fund may sell its shares to other separate accounts,
funding variable annuities and variable life insurance policies, established by
Chubb Life, its successors or assigns, or by other insurance companies with
which Chubb Life is affiliated, and may add or delete Portfolios.
Shares of each Portfolio are both offered and redeemed at their net asset
value without the addition of any sales load or redemption charge. See
"OFFERING AND REDEMPTION OF SHARES" in the Prospectus.
The investment manager to the Fund is Chubb Investment Advisory Corporation
("Chubb Investment Advisory"), a wholly-owned subsidiary of Chubb Life. Chubb
Investment Advisory and the Fund have contracted with six unaffiliated
companies, Templeton, Galbraith & Hansberger Ltd. ("Templeton"), Van Eck
Associates Corporation ("Van Eck Associates"), Pioneering Management
Corporation ("Pioneer"), Janus Capital Corporation ("Janus"), Phoenix
Investment Counsel, Inc. ("Phoenix"), and Massachusetts Financial Services
Company ("MFS") to act as sub-investment advisers or managers to the World
Growth Stock, Gold Stock, Domestic Growth Stock, Capital Growth, Balanced and
Emerging Growth Portfolios, respectively, and one affiliated company, Chubb
Asset Managers, Inc. ("Chubb Asset") to act as sub-investment adviser or
manager to the Money Market, Bond and Growth and Income Portfolios.
(Collectively the "Sub-Investment Managers"). The fees of the Sub-Investment
Managers are paid directly by Chubb Investment Advisory.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of each Portfolio are described below.
The investment objectives of a Portfolio, and certain investment restrictions
discussed in the Statement of Additional Information, may be changed only with
the approval of the stockholders of each Portfolio that are affected by such
change. The investment policies of a Portfolio, used to achieve the Portfolio's
objectives, may be changed by the Fund's Board of Directors without the
approval of the Portfolio's stockholders.
16
<PAGE>
Because investment involves both opportunities for gain and risks of loss, no
assurance can be given that the Portfolios will achieve their objectives. The
difference in objectives and policies among the various Portfolios can be
expected to affect each Portfolio's investment return as well as the degree of
market and financial risks to which each Portfolio is subject. Prospective
purchasers of Policies should carefully review the objectives and policies of
the Portfolios and consider their ability to assume the risks involved before
purchasing Policies and allocating amounts thereunder to particular Portfolios.
World Growth Stock Portfolio
Investment Objectives. The investment objective of the World Growth Stock
Portfolio is long-term capital growth, which it seeks to achieve through a
flexible policy of investing primarily in stocks of companies organized in the
United States or in any foreign nation. A portion of the Portfolio may also be
invested in debt obligations of companies and governments of any nation. Any
income realized will be incidental.
The Portfolio invests primarily in securities of companies of any size that
are (i) believed to be well-managed and possessing good growth potential or
(ii) are considered by the Sub-Investment Manager to be undervalued. See
"Foreign Securities," in the Prospectus.
Investment Policies. The Portfolio believes that in a world where investment
opportunities change rapidly, not only from company to company and from
industry to industry but also from one national economy to another, its
objective is more likely to be achieved through an investment policy that is
flexible and mobile. Accordingly, the Portfolio seeks investment opportunities
in all types of securities issued by companies or governments of any nation.
Investments are usually made in common stocks, but may also include preferred
stocks and certain debt securities, rated or unrated, such as convertible bonds
and bonds selling at a discount; all of these debt securities will have credit
ratings in the four highest rating categories of Standard & Poor's Rating
Service Corporation ("Standard & Poor's") or Moody's Investors Service, Inc.
("Moody's") or other nationally recognized statistical rating organizations
("NRSROs") or, if not rated, will be of comparable quality to obligations so
rated in the judgment of the Sub-Investment Manager. Securities rated BBB or
Baa by Standard & Poor's or Moody's are considered investment-grade obligations
and are regarded as having adequate capacity to pay interest and repay
principal, although adverse economic conditions or changing circumstances are
more likely to lead to a weakening of such capacity than for higher grade
bonds. Such securities may be considered to have speculative characteristics.
See "DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of Additional
Information for a more complete description of investment ratings. In the event
that the ratings of securities held by the Portfolio fall below investment
grade, the Portfolio will not be obligated to dispose of such securities and
may continue to hold such securities if, in the opinion of the Sub-Investment
Manager, such investment is considered appropriate under the circumstances.
Notwithstanding the investment objective of long-term capital growth, the
Portfolio may on occasion, for defensive purposes and without limitation as to
amount, invest in debt obligations of the U.S. Government, its agencies or
instrumentalities for the purpose of earning income; hold cash and time
deposits with banks in the U.S. or Canadian currencies or currencies of other
nations; acquire repurchase agreements with respect to U.S. or Canadian
government obligations; or invest in high-grade commercial paper. For a more
complete description of obligations of the U.S. Government, its agencies or
instrumentalities, see the description in the "Investment Policies" section of
the description of the Bond Portfolio. The Portfolio may also invest in
warrants, which are rights to buy certain securities at set prices during
specified time periods. See "DESCRIPTION OF CERTAIN INVESTMENTS" in the
Statement of Additional Information for more information concerning repurchase
agreements, warrants, and commercial paper. See also "Repurchase Agreements" in
the Prospectus.
The Portfolio may enter into agreements with banks or broker-dealers to
purchase some securities on a "forward commitment," "when issued" or on a
"delayed delivery" basis. Such agreements involve a commitment to purchase
securities at a price, which is fixed at the time of commitment, for delivery
at a future date, which may be up to three months in the future. The Portfolio
will not pay for the securities or begin earning interest on them until the
securities are paid for and received. The securities so purchased are subject
to market fluctuations so that at the time of delivery, the value of such
securities may be more or less than the purchase price.
The Portfolio will generally be composed of investments from among many
different industries. Although management may invest up to 25% of the
Portfolio's assets in a single industry, it has no present intention of doing
so. As a general matter, the Portfolio will be invested in a minimum of five
different foreign countries at all times. However,
17
<PAGE>
this minimum is reduced to four when foreign country investments comprise less
than 80% of the Portfolio's net asset value; to three when less than 60% of
such value; to two when less than 40%; and to one when less than 20%.
Risk Factors. All or a significant portion of this Portfolio may be invested
in foreign securities, including American Depository Receipts ("ADRs"), and
investors should understand the special considerations and risks related to
such an investment emphasis. See "Foreign Securities" and "American Depository
Receipts" in the Prospectus.
Money Market Portfolio
Investment Objectives. The primary objective of the Money Market Portfolio is
to seek as high a level of current income as is consistent with preservation of
capital and liquidity.
Investment Policies. The Portfolio invests exclusively in (1) obligations
whose timely payment of principal and interest is backed by the full faith and
credit of the U.S. Government or that of its agencies or instrumentalities
("U.S. Government Obligations") or which are secured or collateralized by such
obligations, (2) short-term obligations of U.S. banks which are members of the
Federal Deposit Insurance Corporation ("FDIC"), (3) U.S. dollar obligations of
foreign branches of U.S. banks, or (4) instruments fully secured or
collateralized by such bank obligations. Some of the obligations which the
Portfolio buys are insured by the FDIC up to $100,000. The Portfolio may also
invest in commercial paper, and may buy corporate or other notes if such notes
are guaranteed as to the payment of principal and interest by U.S. banks'
letters of credit or collateralized by U.S. Government Obligations. For a more
complete description of U.S. Government Obligations see the description in the
"Investment Policies" section of the description of the Bond Portfolio.
The Portfolio will invest only in securities which present minimal credit
risk and (1) which have been rated or whose issuer has received a rating at the
time of acquisition in one of the two highest rating categories for short-term
debt obligations by any two NRSROs, or by one NRSRO if it is the only NRSRO to
have issued a rating, ("Requisite NRSROs") or (2) which are unrated securities
of comparable quality. The Portfolio will invest no more than 5% of the value
of its total assets, at time of acquisition, in the securities of any one
issuer, other than U.S. Government Obligations, except that the Portfolio may
invest more than 5% of its total assets in securities of a single issuer rated
in the highest rating category by the Requisite NRSROs for up to three business
days after purchase. The Portfolio will also invest no more than 5% of its
total assets, at time of acquisition, in securities rated in the second highest
rating category by the Requisite NRSROs, with investment in any one issuer
limited to no more than the greater of 1% of the Portfolio's total assets or
$1,000,000.
The Sub-Investment Manager, under the supervision of Chubb Investment
Advisory, will use its best judgment in selecting investments, taking into
consideration rates, terms, and marketability of obligations as well as the
capitalization, earnings, liquidity, and other indicators of the financial
condition of their issuers. Because the market value of debt obligations
fluctuates as an inverse function of changing interest rates, the Portfolio
seeks to minimize the effect of such fluctuations by investing in instruments
with a remaining maturity of 397 calendar days or less at the time of
investment, except for U.S. government obligations which may have a remaining
maturity of 762 calendar days or less. The Portfolio will maintain a dollar-
weighted average portfolio maturity of 90 days or less.
The Portfolio may enter into repurchase agreements whereby it purchases
securities, subject to agreement by the other party to repurchase the
obligations at a specified price and date. Repurchase agreements may involve
certain additional risks. See "Repurchase Agreements" in the Prospectus and
"RISK CONSIDERATIONS" in the Statement of Additional Information for a
discussion of these risks. See "DESCRIPTION OF CERTAIN INVESTMENTS" in the
Statement of Additional Information for a more complete description of
repurchase agreements.
Risk Factors. The principal risk factors associated with investment in the
Money Market Portfolio are the risk of fluctuations in short-term interest
rates and the risk of default among one or more issuers of securities which
comprise the Portfolio's assets. Compared with the other available Portfolios,
the Money Market Portfolio could be considered the least risky of all the
Fund's Portfolios. See "RISK CONSIDERATIONS" in the Statement of Additional
Information for a description of the risks associated with investment in U.S.
dollar obligations of foreign branches of U.S. banks.
Gold Stock Portfolio
Investment Objectives. The primary investment objective of the Gold Stock
Portfolio is long-term capital appreciation while retaining, however, freedom
of action to take current income into consideration in selecting its
investments.
18
<PAGE>
Investment Policies. The present policy is to concentrate investments in
common stocks of gold mining companies. Up to 100% of the value of the
Portfolio's assets may be invested in this industry. The Fund does not
currently plan to concentrate investments of the Gold Stock Portfolio in any
industry other than the gold mining industry. Under unusual economic, political
or financial conditions, it may temporarily place a substantial portion (no
more than 75%) of its investments in debt or equity securities issued by
foreign companies, debt obligations of one or more foreign governments and/or
U.S. Government Obligations. All such debt securities in which the Portfolio
invests will have credit ratings in the four highest rating categories of
Standard & Poor's or Moody's or other NRSROs or, if not rated, will be of
comparable quality to obligations so rated in the judgment of the Sub-
Investment Manager. Securities rated BBB or Baa by Standard & Poor's or Moody's
are considered investment-grade obligations and are regarded as having adequate
capacity to pay interest and repay principal, although adverse economic
conditions or changing circumstances are more likely to lead to a weakening of
such capacity than for higher grade bonds. Such securities may be considered to
have speculative characteristics. See "DESCRIPTION OF CERTAIN INVESTMENTS" in
the Statement of Additional Information for a more complete description of
investment ratings. In the event that the ratings of securities held by the
Portfolio fall below investment grade, the Portfolio will not be obligated to
dispose of such securities and may continue to hold such securities if, in the
opinion of the Sub-Investment Manager, such investment is considered
appropriate under the circumstances.
The Gold Stock Portfolio may invest in securities of U.S. companies and also
in the following types of securities: securities of companies, wherever
organized, whose properties, products or services are international in scope or
substantially in countries outside of the U.S.; securities of foreign
governments; and U.S. Government Obligations. The Portfolio may also invest in
ADRs. See "American Depository Receipts" in the Prospectus and "DESCRIPTION OF
CERTAIN INVESTMENTS" in the Statement of Additional Information for a
description of ADRs.
The Portfolio may also enter into repurchase agreements and invest in
warrants, which are rights to buy certain securities at set prices during
specified time periods. See "Repurchase Agreements" in the Prospectus and
"DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of Additional Information
for a description of repurchase agreements and warrants.
Risk Factors. All or a significant portion of this Portfolio may be invested
in foreign securities, including ADRs, and investors should understand the
special considerations and risks related to such an investment emphasis. See
"Foreign Securities" below. In addition, given the Portfolio's concentration in
stocks of gold mining companies, investors should be aware that gold mining
shares are at times volatile; there may be sharp fluctuations in prices even
during periods of general inflation and political conditions in gold mining
countries may affect the Fund's investment decisions relating to gold mining
shares. The price of gold may affect the value of investments in the Gold Stock
Portfolio. Gold has been subject to substantial price fluctuations over short
periods of time and may be affected by the actions of certain governments and
changes in existing governments, by unpredictable international monetary and
political policies such as currency devaluations or revaluations, by economic
and social conditions within a country, trade imbalances or trade or currency
restrictions between countries or political unrest. See "RISK CONSIDERATIONS--
Gold Mining Shares" in the Statement of Additional Information.
Bond Portfolio
Investment Objectives. The investment objective of the Bond Portfolio is to
provide a stable level of income, consistent with limiting risk to principal,
by investing primarily in high quality corporate debt securities and U.S.
Government debt obligations.
Investment Policies. At least 85% of the assets of the Bond Portfolio are
invested in (a) U.S. Government Obligations, (b) debt securities, including
convertible securities, which are rated "AA" or higher by Standard & Poor's or
Moody's or other NRSROs or, if unrated, are considered by the Portfolio's Sub-
Investment Manager to be of comparable quality and (c) cash and cash
equivalents (such as bankers' acceptances, commercial paper and certificates of
deposit no greater than $100,000 per issuing bank, having ratings of A-1 or
Prime-1 by Standard & Poor's or Moody's or other NRSROs or, if unrated, are
considered by the Portfolio's Sub-Investment Manager to be of comparable
quality.)
U.S. Government Obligations consist of marketable securities issued or
guaranteed as to the timely payment of both principal and interest by the U.S.
Government, its agencies or instrumentalities. Federal agency securities are
debt obligations issued by agencies of the U.S. Government established under
authority granted by Congress. Such obligations include, but are not limited
to, those issued by the Federal Housing Authority, Maritime Administration,
Government
19
<PAGE>
National Mortgage Association, the Tennessee Valley Authority, and the General
Services Administration. Instrumentalities include, for example, each of the
Federal Home Loan Banks, the National Bank for Cooperatives, the Federal Home
Loan Mortgage Corporation, the Farm Credit Banks, the Federal National Mortgage
Association, and the U.S. Postal Service. These U.S. Government Obligations are
either: (i) backed by the full faith and credit of the U.S. Government (e.g.,
U.S. Treasury Bills); (ii) guaranteed by the U.S. Treasury (e.g., Government
National Mortgage Association mortgage-backed securities); (iii) supported by
the issuing agency's or instrumentality's right to borrow from the U.S.
Treasury (e.g., Federal National Mortgage Association Discount Notes); or (iv)
supported only by the issuing agency's or instrumentality's own credit (e.g.,
each of the Federal Home Loan Banks).
The Portfolio may also invest up to 15% of its total assets in corporate debt
securities which are rated A or BBB by Standard & Poor's or A and Baa by
Moody's or other NRSROs or, if not rated, are of comparable quality to
obligations so rated in the judgment of the Sub-Investment Manager. Securities
rated BBB or Baa by Standard & Poor's or Moody's are considered investment-
grade obligations and are regarded as having adequate capacity to pay interest
and repay principal, although adverse economic conditions or changing
circumstances are more likely to lead to a weakening of such capacity than for
higher grade bonds. Such securities may be considered to have speculative
characteristics. See "DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of
Additional Information for a more complete description of investment ratings.
In the event that the ratings of securities held by the Portfolio fall below
investment grade, the Portfolio will not be obligated to dispose of such
securities and may continue to hold such securities if, in the opinion of the
Sub-Investment Manager, such investment is considered appropriate under the
circumstances.
The Portfolio will not purchase preferred or common stocks but may acquire
and retain up to 10% of its total assets in preferred or common stocks either
by conversion of fixed income securities or by the exercise of related
warrants.
The Portfolio may enter into agreements with banks or broker-dealers to
purchase some securities on a "forward commitment," "when issued" or on a
"delayed delivery" basis. Such agreements involve a commitment to purchase
securities at a price, which is fixed at the time of commitment, for delivery
at a future date, which may be up to three months in the future. The Portfolio
will not pay for the securities or begin earning interest on them until the
securities are paid for and received. The securities so purchased are subject
to market fluctuations so that at the time of delivery, the value of such
securities may be more or less than the purchase price.
It is the policy of the Bond Portfolio not to engage in trading for short-
term profits. The Portfolio will engage in trading if it believes a transaction
net of costs (including custodian's fees) will contribute to the achievement of
its investment objective.
It is anticipated that the Portfolio's average portfolio maturity will not
exceed 15 years, with the precise term to maturity dependent upon general
market and economic conditions.
Risk Factors. If the Bond Portfolio disposes of an obligation prior to
maturity, it may realize a loss or a gain. An increase in interest rates will
generally reduce the value of portfolio investments, and a decline in interest
rates will generally increase the value of portfolio investments. As a result,
the level of income under such circumstances may vary. In addition, portfolio
investments (other than U.S. Government Obligations) are dependent upon the
ability of the issuer to make scheduled payments of principal and income.
Domestic Growth Stock Portfolio
Investment Objectives. The investment objective of the Domestic Growth Stock
Portfolio is to achieve reasonable income and growth of capital by investing
primarily in a diversified portfolio of equity securities issued by companies
organized in the U.S. and considered by the Sub-Investment Manager to be
undervalued in light of the company's earning power and growth potential.
Investment Policies. The mix of assets of the Portfolio will vary with
prevailing economic and market conditions. Generally, at least 80% of the
Portfolio's assets are invested in common stocks and other equity related
securities such as preferred stocks and securities convertible into common
stock. The Portfolio may also invest up to 20% of its assets in both U.S.
Government Obligations and corporate debt securities, which will be rated
within the top four rating categories of Standard & Poor's or Moody's or other
NRSROs or, if unrated, are considered by the Portfolio's Sub-Investment Manager
to be of comparable quality and cash equivalent investments, such as
certificates of deposit, bankers'
20
<PAGE>
acceptances, and commercial paper, having ratings of A-1 or Prime-1 by Standard
& Poor's or Moody's or other NRSROs or, if unrated, are considered by the
Portfolio's Sub-Investment Manager to be of comparable quality. Securities
rated BBB or Baa by Standard & Poor's or Moody's are considered investment-
grade obligations and are regarded as having adequate capacity to pay interest
and repay principal, although adverse economic conditions or changing
circumstances are more likely to lead to a weakening of such capacity than for
higher grade bonds. Such securities may be considered to have speculative
characteristics. In the event that the ratings of securities held by the
Portfolio fall below investment grade, the Portfolio will not be obligated to
dispose of such securities and may continue to hold such securities if, in the
opinion of the Sub-Investment Manager, such investment is considered
appropriate under the circumstances. Generally, at least 60% of the Portfolio's
assets will be invested in securities which have paid dividends or interest
within the preceding 12 months, but non-income producing securities will be
held for anticipated increases in value. The Portfolio may also invest in
warrants, which are rights to buy certain securities at set prices during
specified time periods. See "DESCRIPTION OF CERTAIN INVESTMENTS--Warrants" in
the Statement of Additional Information.
This Portfolio invests primarily in stocks listed on the New York Stock
Exchange and on other national securities exchanges and, to a lesser extent, in
stocks that are traded over-the-counter. Securities are selected principally
for their potential appreciation and anticipated income. Assets of the
Portfolio will be substantially fully invested at all times.
Risk Factors. The prices of the types of securities usually purchased for the
Domestic Growth Stock Portfolio will tend to fluctuate more than the prices of
the securities usually purchased for the Bond Portfolio or the Money Market
Portfolio. As a result, the net asset value of the Domestic Growth Stock
Portfolio may experience greater short-term and long-term variations than
Portfolios that invest primarily in fixed income securities.
Growth and Income Portfolio
Investment Objectives. The objective of the Growth and Income Portfolio is to
seek long-term growth of capital by investing primarily in a wide range of
equity issues that may offer capital appreciation and, secondarily, to seek a
reasonable level of current income.
Investment Policies. The Growth and Income Portfolio invests at least 80% of
its assets in common stocks and other equity securities such as preferred
stocks and securities convertible into common stock that are either listed on
the New York Stock Exchange, traded over-the-counter or, to a lesser extent,
listed on other national securities exchanges. Securities are selected
principally for potential capital appreciation, based upon such criteria as
relatively low price to earnings ratio and relatively low price to book value
ratio, as compared to such ratios for the market in general and, secondarily,
for current income and increasing future dividends. While the Growth and Income
Portfolio intends to invest at least 60% of its assets in securities which have
paid dividends or interest within the preceding 12 months, the Portfolio may
invest in securities not currently paying dividends where the Sub-Investment
Manager anticipates that they will increase in value.
The Growth and Income Portfolio may also invest for temporary or defensive
purposes in high-grade debt securities and money market securities, including
U.S. Government Obligations, commercial paper and bank obligations, and
repurchase agreements.
The Growth and Income Portfolio will invest primarily in U.S. companies, but
may, when deemed appropriate by the Sub-Investment Manager, invest in and hold
up to 20% of the Portfolio's total assets in foreign securities which are
traded in the U.S. or in ADRs. The Growth and Income Portfolio may also
purchase the securities of foreign issuers directly in foreign markets. The
Portfolio's investments in foreign securities will primarily be in equity
securities of companies organized outside the U.S., but may also include debt
obligations of foreign companies and governments. See "Foreign Securities" and
"American Depository Receipts" in the Prospectus and "DESCRIPTION OF CERTAIN
INVESTMENTS--American Depository Receipts" in the Statement of Additional
Information.
The Growth and Income Portfolio may write covered call options or purchase
put and call options with respect to certain of its portfolio securities or
purchase stock index options for hedging purposes or to enhance income. The
Growth and Income Portfolio may also purchase or write futures contracts,
including stock index futures contracts. The Portfolio may also enter into
closing transactions with respect to such options and futures contracts. See
"Securities and Index Options" and "Futures Contracts" in this Prospectus.
21
<PAGE>
Risk Factors. The prices of the securities purchased for the Growth and
Income Portfolio will tend to fluctuate more than the prices of securities
purchased for the Bond Portfolio or the Money Market Portfolio. As a result,
the net asset value of the Growth and Income Portfolio may experience greater
short-term and long-term variations than Portfolios that invest primarily in
fixed income securities.
Capital Growth Portfolio
Investment Objectives. The investment objective of the Capital Growth
Portfolio is to seek capital growth. Realization of income is not a significant
investment consideration and any income realized will be incidental.
Investment Policies. The Capital Growth Portfolio will invest primarily in
common stocks when the Sub-Investment Manager believes that the market
environment favors investment in those securities. Common stock investments are
selected in industries and companies that the Sub-Investment Manager believes
are experiencing favorable demand for their products and services and that
operate in a favorable environment from a competitive and regulatory
standpoint.
It is the policy of the Capital Growth Portfolio to purchase and hold
securities for capital growth. If the Sub-Investment Manager is satisfied with
the performance of a security and anticipates continued appreciation, the
Portfolio will generally retain such security. However, changes in the
Portfolio will generally be made whenever the Sub-Investment Manager believes
they are advisable, either as a result of securities having reached a price
objective, or by reason of developments not foreseen at the time of the
investment decision. Since investment changes usually will be made without
reference to the length of time a security has been held, a significant number
of short-term transactions may result. To a limited extent, the Portfolio may
also purchase individual securities in anticipation of relatively short-term
price gains, and the rate of portfolio turnover will not be a determining
factor in the sale of such securities. However, certain tax rules may restrict
the Portfolio's ability to sell securities held for less than 90 days.
Although the Portfolio expects that under normal conditions its assets will
be primarily invested in common stocks, to the extent that it is not so
invested, the Capital Growth Portfolio may also invest in other securities,
including: U.S. Government Obligations, corporate bonds and debentures, high
grade commercial paper, preferred stocks, convertible securities, warrants or
other securities of U.S. issuers when the Sub-Investment Manager perceives an
opportunity for capital growth from such securities or so that the Portfolio
may receive a return on its idle cash. The Portfolio's cash position may
increase when the Sub-Investment Manager is unable to locate investment
opportunities that it believes have desirable risk/reward characteristics.
Investments in debt securities will be limited to securities of U.S. companies,
the U.S. Government and foreign governments and foreign governmental entities.
Foreign governmental entities include supranational organizations, such as the
European Economic Community and the World Bank, that are chartered to promote
economic development and are supported by various governments and governmental
entities. All debt securities in which the Portfolio invests, except as noted
below, will have credit ratings in the four highest rating categories of
Standard & Poor's or Moody's or other NRSROs or, if not rated, will be of
comparable quality to obligations so rated in the judgment of the Sub-
Investment Manager. The Capital Growth Portfolio may invest up to 5% of its
assets in high-yield/high-risk bonds. Such securities include debt securities
that are below investment grade (securities rated Ba or lower by Moody's or BB
or lower by Standard & Poor's) and unrated securities of comparable quality as
determined by the Sub-Investment Manager.
Investments may also be made in foreign equity securities and in ADRs. The
Portfolio will not invest more than 25% of its assets in foreign securities
denominated in foreign currencies and not publicly traded in the U.S. See
"Foreign Securities" and "American Depository Receipts" in the Prospectus.
Additionally, in order to manage exchange rate risks, the Portfolio may enter
into foreign currency exchange contracts (agreements to exchange one currency
for another at a future date). See "Forward Foreign Currency Exchange
Contracts" in the Prospectus.
The Portfolio may purchase and sell futures contracts as more fully described
under "Futures Contracts" in this Prospectus and may write covered call options
and purchase call and put options as described under "Securities and Index
Options" in this Prospectus.
The Portfolio may invest in "special situations" from time to time. A special
situation arises when, in the Sub-Investment Manager's opinion, the securities
of a particular company will be recognized and appreciate in value due to a
specific development, such as a technological breakthrough or a new product, at
that company.
The Portfolio expects that its securities will primarily be traded on U.S.
and foreign securities exchanges and established over-the-counter markets.
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Risk Factors. The foreign securities and ADRs in which the Portfolio may
invest involve special considerations and risks. See "Foreign Securities" and
"American Depository Receipts" in this Prospectus. Investing in foreign
currency exchange contracts involves certain risks since shifting the
Portfolio's currency exposure from one currency to another removes the
Portfolio's opportunity to profit from increases in the value of the original
currency and involves a risk of increased losses if the Sub-Investment
Manager's projection of future exchange rates is inaccurate. Investment in
special situations may carry an additional risk of loss in the event that the
anticipated development does not occur or does not attract the expected
attention. The price of the securities purchased by the Capital Growth
Portfolio will tend to fluctuate more than the prices of securities purchased
by the Bond Portfolio and the Money Market Portfolio.
Balanced Portfolio
Investment Objectives. The investment objective of the Balanced Portfolio is
to seek reasonable current income and long-term capital growth, consistent with
conservation of capital, by investing primarily in common stocks and fixed
income securities.
Investment Policies. The Balanced Portfolio intends to invest based on
combined considerations of risk, income, capital enhancement and protection of
capital value. The Balanced Portfolio may invest in any type or class of
security. Normally, the Balanced Portfolio will invest in common stocks and
fixed income securities; however, it may also invest in warrants and in
securities convertible into common stocks. At least 25% of the value of its
assets will be invested in high-grade fixed income senior securities which are
rated in the three highest rating categories by any NRSRO or, if unrated, are
considered by the Portfolio's Sub-Investment Manager to be of comparable
quality. The Portfolio may purchase and sell futures contracts as more fully
described under "Futures Contracts" in this Prospectus and may write covered
call options and purchase call and put options as described under "Securities
and Index Options" in this Prospectus. The Portfolio may also invest in zero
coupon debt obligations. In order to provide additional diversification the
Portfolio may invest in equity and debt securities of foreign issuers limited
to 15% of the Portfolio's total assets and in ADRs. See "Foreign Securities"
and "American Depository Receipts" in this Prospectus.
In implementing the investment objectives of the Balanced Portfolio, the Sub-
Investment Manager will select securities believed to have potential for the
production of current income, with emphasis on securities that also have
potential for capital enhancement. In an effort to protect its assets against
major market declines, or for other temporary defensive purposes, the Balanced
Portfolio may actively pursue a policy of retaining cash or investing part or
all of its assets in cash equivalents, such as U.S. Government Obligations,
high grade commercial paper and U.S. dollar obligations of foreign branches of
U.S. banks.
Risk Factors. The prices of equity securities in which the Balanced Portfolio
invests will fluctuate day to day and, as a result, the value of an investment
in the Balanced Portfolio will vary based upon such market conditions. The
value of the Balanced Portfolio's investment in fixed income securities will
vary depending on various factors including prevailing interest rates. Fixed
income securities are also subject to the ability of the issuer to make
payments of principal and interest when due. Although the Balanced Portfolio
seeks to reduce both financial and market risks associated with any one
investment medium, performance of the Balanced Portfolio will depend on such
additional factors as timing the mix of investments and the ability of the Sub-
Investment Manager to predict and react to changing market conditions.
Investment in foreign securities and ADRs involve special considerations and
risks. See "Foreign Securities" and "American Depository Receipts" in this
Prospectus.
Emerging Growth Portfolio
Investment Objective. The Emerging Growth Portfolio seeks to provide long-
term growth of capital. Dividend and interest income from portfolio securities,
if any, is incidental to the Portfolio's investment objective of long term
growth of capital.
Investment Policies. The Portfolio's policy is to invest primarily (i.e., at
least 80% of its assets under normal circumstances) in common stocks of small
and medium-sized companies that are early in their life cycle but which have
the potential to become major enterprises (emerging growth companies). Such
companies generally would be expected to show earnings growth over time that is
well above the growth rate of the overall economy and the rate of inflation,
and would have the products, management and market opportunities which are
usually necessary to become more widely recognized as growth companies.
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However, the Portfolio may also invest in more established companies of any
capitalization whose earnings growth are expected to accelerate because of
special factors, such as rejuvenated management, new products, changes in
consumer demand, or basic changes in the economic environment.
While the Portfolio will invest primarily in common stocks, the Portfolio
may, to a limited extent, seek appreciation in other types of securities such
as foreign or convertible securities and warrants when relative values make
such purchases appear attractive either as individual issues or as types of
securities in certain economic environments (see "Risk Factors" and "Foreign
Securities" below). The Portfolio may also enter into forward foreign currency
exchange contracts for the purchase or sale of foreign currency for hedging
purposes and non-hedging purposes, including transactions entered into for the
purpose of profiting from anticipated changes in foreign currency exchange
rates, as well as options on foreign currencies. The Portfolio may also hold
foreign currency (see "Risk Factors" below). The Portfolio may invest up to 25%
of its total assets in foreign securities (not including American Depository
Receipts ("ADRs") (see "American Depository Receipts" below)), which may be
traded on foreign exchanges. The Portfolio may hold cash equivalents or other
forms of debt securities as a reserve for future purchases of common stock or
to meet liquidity needs.
The Portfolio may invest in corporate asset-backed securities (see "Corporate
Asset-Backed Securities" below). The Portfolio may write covered call and put
options and purchase call and put options on securities and stock indices in an
effort to increase current income and for hedging purposes. The Portfolio may
also purchase and sell stock index futures contracts and may write and purchase
options thereon for hedging purposes and for non-hedging purposes, subject to
applicable law (see "Futures Contracts" below and the Statement of Additional
Information). In addition, the Portfolio may purchase portfolio securities on a
"when-issued" or on a "forward delivery" basis (See "When-Issued Securities"
below). The Portfolio may also invest a portion of its assets in "loan
participations" (see "Loan Participations and Other Direct Indebtedness" below
and in the Statement of Additional Information).
While it is not generally the Portfolio's policy to invest or trade for
short-term profits, the Portfolio may dispose of a portfolio security whenever
the Sub-Investment Manager is of the opinion that such security no longer has
an appropriate appreciation potential or when another security appears to offer
relatively greater appreciation potential. Subject to tax requirements,
portfolio changes are made without regard to the length of time a security has
been held, or whether a sale would result in a profit or loss.
During periods of unusual market conditions when the Sub-Investment Manager
believes that investing for defensive purposes is appropriate, or in order to
meet anticipated redemption requests, a large portion or all of the assets of
the Portfolio may be invested in cash or cash equivalents including, but not
limited to, obligations of banks (including certificates of deposit, bankers'
acceptances and repurchases agreements) with assets of $1 billion or more,
commercial paper, short-term notes, obligations issued or guaranteed by the
U.S. Government or any of its agencies, authorities or instrumentalities and
related repurchase agreements. U.S. Government securities also include
interests in trust or other entities representing interests in obligations that
are issued or guaranteed by the U.S. Government, its agencies, authorities or
instrumentalities.
Risk Factors. The nature of investing in emerging growth companies involves
greater risk than is customarily associated with investments in more
established companies. Emerging growth companies often have limited product
lines, markets or financial resources, and they may be dependent on one-person
management. The securities of emerging growth companies may have limited
marketability and may be subject to more abrupt or erratic market movements
than securities of larger, more established growth companies or the market
averages in general. Shares of the Portfolio, therefore, are subject to greater
fluctuation in value than shares of a conservative equity Portfolio or of a
growth Portfolio which invests entirely in proven growth stocks.
The Portfolio may invest to a limited extent in lower rated fixed income
securities or comparable unrated securities. Investments in lower rated income
securities, while offering high current income and generally providing greater
income and opportunity for gain than investments in higher rated securities,
usually entail greater risk of principal and income (including the possibility
of default or bankruptcy of the issuers of such securities), and involve
greater volatility of price (especially during periods of economic uncertainty
or change) than investments in higher rated securities and because yields may
vary over time, no specified level of income can ever be assured. In
particular, securities rated lower than Baa by Moody's Investors Service, Inc.
("Moody's") or BBB by Standard & Poor's Rating Group or comparable unrated
securities (commonly known as "junk bonds") are considered speculative. These
lower rated high yielding fixed income securities generally tend to reflect
economic changes (and the outlook for economic growth), short-term corporate
and
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industry developments and the market's perception of their credit quality
(especially during times of adverse publicity) to a greater extent than higher
rated securities which react primarily to fluctuations in the general level of
interest rates (although these lower rated fixed income securities are also
affected by changes in interest rates). In the past, economic downturns or an
increase in interest rates have under certain circumstances caused a higher
incidence of default by the issuers of these securities and may do so in the
future, especially in the case of highly leveraged issuers. During certain
periods, the higher yields on the Portfolio's lower rated high yielding fixed
income securities are paid primarily because of the increased risk of loss of
principal and income, arising from such factors as the heightened possibility
of default or bankruptcy of the issuers of such securities. Due to the fixed
income payments of these securities, the Portfolio may continue to earn the
same level of interest income while its net asset value declines due to
portfolio losses, which could result in an increase in the Portfolio's yield
despite the actual loss of principal. The prices for these securities may be
affected by legislative and regulatory developments. For example, federal rules
require that savings and loan associations gradually reduce their holdings of
high-yield securities. An effect of such rules may be to depress the prices of
outstanding lower rated high yielding fixed income securities. Changes in the
value of securities subsequent to their acquisition will not affect cash income
or yield to maturity to the Portfolio but will be reflected in the net asset
value of shares of the Portfolio. The market for these lower rated fixed income
securities may be less liquid than the market for investment grade fixed income
securities. Furthermore, the liquidity of these lower rated securities may be
affected by the market's perception of their credit quality. Therefore, the
Sub-Investment Manager's judgment may at times play a greater role in valuing
these securities than in the case of investment grade fixed income securities,
and it also may be more difficult during times of certain adverse market
conditions to sell these lower rated securities at their fair value to meet
redemption requests or to respond to changes in the market. No minimum rating
standard is required by the Portfolio. To the extent the Portfolio invests in
these lower rated fixed income securities, the achievement of its investment
objective may be more dependant on the Sub-Investment Manager's own credit
analysis than in the case of a Portfolio investing in higher quality bonds.
While the Sub-Investment Manager may refer to ratings issued by established
credit rating agencies, it is not a policy of the Portfolio to rely exclusively
on ratings issued by these agencies, but rather to supplement such ratings with
the Sub-Investment Manager's own independent and ongoing review of credit
quality.
The Portfolio may also invest in fixed income securities rated Baa by Moody's
or BBB by S&P and comparable unrated securities. These securities, while
normally exhibiting adequate protection parameters, may have speculative
characteristics and changes in economic conditions and other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than in the case of higher rated securities.
Additional Risk Factors
The net asset value of the shares of an open-end investment company which may
invest to a limited extent in fixed income securities changes as the general
levels of interest rates fluctuate. When interest rates decline, the value of a
fixed income portfolio can be expected to rise. Conversely, when interest rates
rise, the value of a fixed income portfolio can be expected to decline.
Although changes in the value of securities subsequent to their acquisition
are reflected in the net asset value of shares of the Portfolio, such changes
will not affect the income received by the Portfolios from such securities.
However, the dividends paid by the Portfolios, if any, will increase or
decrease in relation to the income received by the Portfolio from its
investments, which would in any case be reduced by the Portfolio's expenses
before it is distributed to shareholders.
In addition, the use of options, futures contracts, options on futures
contracts, forward contracts and options on foreign currencies may result in
the loss of principal, particularly where such instruments are traded for other
than hedging purposes (e.g., to enhance current yield).
The Emerging Growth Portfolio is aggressively managed and, therefore, the
value of its shares is subject to greater fluctuation and investments in its
shares involve the assumption of a higher degree of risk than would be the case
with an investment in a conservative equity portfolio or a growth portfolio
investing entirely in proven growth equities.
See the Statement of Additional Information for further discussion of foreign
securities and the holding of foreign currency as well as the associated risks.
Given the above average investment risk inherent to the Emerging Growth
Portfolio, investment in shares of the Emerging Growth Portfolio should not be
considered a complete investment program and may not be appropriate for all
investors.
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Foreign Securities
The World Growth Stock Portfolio, the Gold Stock Portfolio and the Emerging
Growth Portfolio intend to purchase securities that are listed on stock
exchanges in foreign countries. They may also, to a limited extent, purchase
unlisted foreign securities. The Growth and Income Portfolio, the Capital
Growth Portfolio and the Balanced Portfolio may also invest in listed and
unlisted foreign securities. Foreign investments may involve greater risks than
are present in domestic investments. Compared to domestic companies, there is
generally less publicly available information about foreign companies, less
comprehensive accounting, reporting and disclosure requirements, and there may
be less governmental regulation and supervision of foreign stock exchanges,
brokers and listed companies. Investments in foreign securities also involve
the risk of expropriation or confiscatory taxation that could affect
investments, currency blockages which would prevent cash from being brought
back into the United States, generally higher brokerage and custodial costs
than those of domestic securities and settlement of transactions with respect
to such securities may sometimes be delayed beyond periods customary in the
United States. The Sub-Investment Managers, under the supervision of Chubb
Investment Advisory, consider possible political and financial instability
abroad, as well as the liquidity and volatility of foreign investments.
Investing in foreign securities or on foreign exchanges may present a greater
degree of risk than investing in domestic issuers. These risks include changes
in currency rates, exchange control regulations, governmental administration,
economic or monetary policy (in this country or abroad), war or expropriation.
In particular, the dollar value of portfolio securities of non-U.S. issuers
fluctuates with changes in market and economic conditions abroad and with
changes in relative currency values (when the value of the dollar increases as
compared to a foreign currency, the dollar value of a foreign-denominated
security decreases, and vice versa). Costs may be incurred in connection with
conversions between various currencies. Special considerations may also include
more limited information about foreign issuers, higher brokerage costs,
different accounting standards and thinner trading markets. Foreign securities
markets may also be less liquid, more volatile and less subject to government
supervision than in the United States. Investments in foreign countries could
be affected by other factors including confiscatory taxation and potential
difficulties in enforcing contractual obligations and could be subject to
extended settlement periods. Therefore, an investment in shares of a Portfolio
may be subject to a greater degree of risk than investments in other investment
companies which invest exclusively in domestic securities.
As a result of its investments in foreign securities, the Portfolios may
receive interest or dividend payments, or the proceeds of the sale or
redemption of such securities, in the foreign currencies in which such
securities are denominated. In that event, a Portfolio may promptly convert
such currencies into dollars at the then current exchange rate. Under certain
circumstances, however, such as where the Sub-Investment Manager believes that
the applicable exchange rate is unfavorable at the time the currencies are
received or the Sub-Investment Manager anticipates, for any other reason, that
the exchange rate will improve, a Portfolio may hold such currencies for an
indefinite period of time.
In addition, a Portfolio may be required to receive delivery of the foreign
currency underlying forward currency contracts it has entered into. This could
occur, for example, if an option written by the Portfolio is exercised or is
unable to close out a forward contract it has entered into. A Portfolio may
also hold foreign currency in anticipation of purchasing foreign securities. A
Portfolio may also elect to take delivery of the currencies underlying options
or forward contracts if, in the judgment of the Sub-Investment Manager, it is
in the best interest of the Portfolio to do so. In such instances as well, a
Portfolio may promptly convert the foreign currencies to dollars at the then
current exchange rate, or may hold such currencies for an indefinite period of
time.
While the holding of currencies will permit a Portfolio to take advantage of
favorable movements in the applicable exchange rate, it also exposes a
Portfolio to risk of loss if such rates move in a direction adverse to the
Portfolio's position. Such losses could reduce any profits or increase any
losses sustained by the Portfolio from the sale or redemption of securities,
and could reduce the dollar value of interest or dividend payments received. In
addition, the holding of currencies could adversely affect the Portfolio's
profit or loss on currency options or forward contracts, as well as its hedging
strategies.
Prior to investing in foreign securities, a Portfolio may hold funds
temporarily in foreign currencies. The value of the assets of that Portfolio
may be affected favorably or unfavorably by changes in foreign currency
exchange rates and exchange control regulations. The Portfolio may also incur
costs in connection with conversions between various currencies. The Portfolios
will, therefore, consider foreign exchange rates in making investment
decisions, but, other
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than the Capital Growth Portfolio and the Emerging Growth Portfolio, will not
actively hedge foreign currency fluctuations by entering into contracts to
purchase or sell foreign currencies at a future date or options or futures
contracts on foreign currencies. See "RISK CONSIDERATIONS--Foreign Securities"
in the Statement of Additional Information.
American Depository Receipts
The World Growth Stock Portfolio, the Gold Stock Portfolio, the Growth and
Income Portfolio, the Capital Growth Portfolio, the Balanced Portfolio and the
Emerging Growth Portfolio may invest in ADRs. These are certificates issued by
a United States bank representing the right to receive securities of a foreign
issuer deposited in that bank or a correspondent bank. There are no fees
imposed on the purchase or sale of ADRs when purchased from the issuing bank in
the initial underwriting, although the issuing bank may impose charges for the
collection of dividends and the conversion of ADRs into the underlying ordinary
shares. Brokerage commissions will be incurred if ADRs are purchased through
brokers on U.S. stock exchanges. Investments in ADRs often have advantages over
direct investments in the underlying foreign securities, including the
following: they are more liquid investments, they can be sold for U.S. dollars,
they may be transferred easily, market quotations are readily available in the
U.S. and more uniform financial information is available for the issuers of
such securities.
Forward Foreign Currency Exchange Contracts
The Capital Growth Portfolio and the Emerging Growth Portfolio may utilize
forward foreign currency exchange contracts ("forward currency contracts"). A
forward currency contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date
of the forward currency contract agreed upon by the parties, at a price set at
the time of the contract. These forward currency contracts are principally
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. The Portfolios will enter
into forward currency contracts only under two circumstances. First, when a
Portfolio has entered into a contract to purchase or sell a security
denominated in a foreign currency, the Portfolio may be able to protect itself
against a possible loss, between trade date and settlement date for such
security, resulting from an adverse change in the relationship between the U.S.
dollar and the foreign currency in which such security is denominated, by
entering into a forward currency contract in U.S. dollars for the purchase or
sale of the amount of the foreign currency involved in the underlying security
transaction. However, this tends to limit potential gains which might result
from a positive change in such currency relationships. Second, when management
of a Portfolio believes that the currency of a particular foreign country may
suffer or enjoy a substantial movement against the U.S. dollar (or another
currency), the Portfolio may enter into a forward currency contract to sell or
buy an amount of foreign currency approximating the value of some or all of the
Portfolio's securities denominated in such foreign currency, limited to no more
than 10% of the Portfolio's total assets. The forecasting of short-term
currency market movement is extremely difficult and whether such a short-term
hedging strategy will be successful is highly uncertain.
Repurchase Agreements
All of the Portfolios except the Bond Portfolio and the Domestic Growth Stock
Portfolio may enter into repurchase agreements, whereby the Portfolio purchases
securities (referred to as "underlying securities") from well-established
securities dealers or banks, subject to agreement by the seller to repurchase
the securities at a stated price on a specified date. Repurchase agreements
involve certain risks not associated with direct investment in securities,
including the risk that the original seller will default on its obligations to
repurchase, as a result of bankruptcy or otherwise. To minimize this risk, a
Portfolio will enter into repurchase agreements only if the repurchase
agreement is structured in a manner reasonably designed to collateralize fully
the value of a Portfolio's investment during the entire term of the agreement
and in accordance with guidelines regarding the creditworthiness of the seller
determined by the Board of Directors of the Fund. As a general matter, if the
seller of the repurchase agreement is a bank it must have assets of at least
$1,000,000,000; if the seller is a broker-dealer it must have a net worth of at
least $25,000,000. The underlying securities, held as collateral, will be
marked to market on a daily basis, and must be high-quality short-term
securities. In addition, the underlying securities of repurchase agreements
acquired by the Money Market Portfolio must be either U.S. Government
Obligations or securities that, at the time the repurchase agreement is entered
into, are rated in the highest rating category by the Requisite NRSROs.
Nevertheless, in the event that the other party to the agreement fails to
repurchase the securities subject to the agreement, a Portfolio could suffer a
loss to the extent proceeds from the sale of the underlying securities held as
collateral were less than the price specified in the repurchase agreement.
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Zero Coupon Bonds
The Balanced Portfolio, Capital Growth Portfolio and the Emerging Growth
Portfolio may invest in zero coupon bonds which are debt obligations that do
not make any interest payments for a specified period of time prior to maturity
or until maturity. The value of these obligations fluctuates more in response
to interest rate changes than does the value of debt obligations that make
current interest payments.
Securities and Index Options
The Growth and Income Portfolio, the Capital Growth Portfolio, the Balanced
Portfolio and the Emerging Growth Portfolio may write covered call options and
purchase call and put options on securities and stock indices. The Capital
Growth Portfolio and the Emerging Growth Portfolio may also utilize options on
foreign currencies. See the Statement of Additional Information for a more
detailed description of these options.
Writing (Selling) Call Options. In order to earn additional income or to
protect partially against declines in the value of its securities, the
Portfolios noted above may write (sell) covered call options. A Portfolio may
also purchase call options to the extent necessary to close out call option
positions previously written by the Portfolio. A call option gives the holder
(purchaser) the right to buy and obligates the writer (seller) to sell, in
return for a premium paid to the writer, the underlying security at the
exercise price at any time during the option period. A call option on a
securities index is similar to a call option on an individual security, except
that the value of the option depends on the weighted value of the group of
securities comprising the index and all settlements are made in cash rather
than by delivery of a particular security. The Portfolios will write only
covered call options which are listed on exchanges, and will not write a
covered call option if, as a result, the aggregate market value of all
portfolio securities covering all call options or subject to call options
written exceeds 25% of the value of the Portfolio's total assets.
The writing of call options on securities and securities indices involves the
following risks: (1) during the option period the writer of a call option gives
up the opportunity for capital appreciation above the exercise price should the
market price of the underlying security increase, but retains the risk of loss
should the price of the underlying security or index decline and (ii) the
inability to close out options previously written, which would require the
Portfolio to retain the option and the securities covering the option until its
exercise or expiration.
Purchasing Put and Call Options
In order to hedge against changes in the market value of their portfolio
securities, the Growth and Income Portfolio, the Capital Growth Portfolio, the
Balanced Portfolio and the Emerging Growth Portfolio may also purchase put and
call options with respect to equity securities, bonds, and stock and bond
indices which correlate with their portfolio securities, provided that the
premiums paid for such options are limited in each case to no more than 5% of
the Portfolio's total assets. A put option on a security gives the purchaser of
the option, in return for the premium paid to the writer (seller), the right to
sell the underlying security at the exercise price at any time during the
option period. Upon exercise by the purchaser, the writer of a put option has
the obligation to purchase the underlying security at the exercise price. A put
option on a securities index is similar to a put option on an individual
security, except that the value of the option depends on the weighted value of
the group of securities comprising the index and all settlements are made in
cash, rather than by delivery of a particular security.
Purchasing a put or call option on securities and securities indices involves
the risk that the Portfolio may lose the premium it paid plus transaction
costs.
Futures Contracts
The Growth and Income Portfolio, the Capital Growth Portfolio, the Balanced
Portfolio and the Emerging Growth Portfolio may purchase and sell futures
contracts on debt securities and indexes of debt securities (i.e., interest
rate futures contracts) as a hedge against or to minimize adverse principal
fluctuations resulting from anticipated interest rate changes. They may also,
where appropriate, enter into stock index futures contracts to provide a hedge
for a portion of a Portfolio's equity holdings. Stock index futures contracts
may be used as a way to implement either an increase or decrease in portfolio
exposure to the equity markets in response to changing market conditions. The
Capital Growth Portfolio and the Emerging Growth Portfolio may also enter into
currency futures contracts to hedge the currency fluctuations of its foreign
securities. A Portfolio may also write covered call options and purchase put or
call options on futures contracts of the type which that Portfolio is permitted
to purchase. The Portfolios will not enter into futures contracts for
speculation and will only enter into futures contracts that are traded on
national futures exchanges. No Portfolio will enter into futures contracts or
options thereon if immediately thereafter the sum of the amounts of initial
28
<PAGE>
margin deposits on the Portfolio's existing futures contracts and premiums paid
for options on unexpired futures contracts would exceed 5% of the value of the
Portfolio's total assets.
The use of futures contracts by the Growth and Income Portfolio, the Capital
Growth Portfolio, the Balanced Portfolio and the Emerging Growth Portfolio
entails certain risks, including but not limited to the following: no assurance
that futures contracts transactions can be offset in closing transactions at
favorable prices or at all unless a liquid secondary market exists; possible
reduction of the Portfolio's income due to the use of hedging; possible
reduction in value of both the securities hedged and the hedging instrument;
possible lack of liquidity due to daily limits on price fluctuation; imperfect
correlation between the contract and the securities being hedged; and potential
losses well in excess of the amount invested in futures contracts themselves.
If a Sub-Investment Manager's forecasts regarding movements in securities
prices or interest rates are incorrect, the Portfolio's investment results may
have been better without the hedge. Futures contracts and their associated
risks are described in more detail in the Statement of Additional Information.
Lending of Securities
The Emerging Growth Portfolio may make loans of its portfolio securities.
Such loans will usually be made only to member banks of the Federal Reserve
System and member firms (and subsidiaries thereof) of the New York Stock
Exchange and would be required to be secured continuously by collateral in
cash, cash equivalents or U.S. Government securities maintained on a current
basis at an amount at least equal to the market value of the securities loaned.
The Portfolio would continue to collect the equivalent of the interest on the
securities loaned and would receive either interest (through investment of cash
collateral) or a fee (if the collateral is U.S. Government securities).
When-Issued Securities
In order to help ensure the availability of suitable securities for its
portfolio, the Bond and the Emerging Growth Portfolios may purchase securities
on a "when-issued" or on a "forward delivery" basis, which means that the
obligations will be delivered to the Portfolios at a future date usually beyond
customary settlement time. It is expected that, under normal circumstances, the
Portfolios will take delivery of such securities. In general, the Portfolios do
not pay for the securities until received and does not start earning interest
on the obligations until the contractual settlement date. While awaiting
delivery of the obligations purchased on such bases, the Portfolios will
establish a segregated account consisting of cash, short-term money market
instruments or high quality debt securities equal to the amount of the
commitments to purchase "when-issued" securities. See the Statement of
Additional Information.
Corporate Asset-Backed Securities
The Bond and the Emerging Growth Portfolios may invest in corporate asset-
backed securities. These securities, issued by trusts and special purpose
corporations, are backed by a pool of assets, such as credit card or automobile
loan receivables, representing the obligations of a number of different
parties. Corporate asset-backed securities present certain risks. For instance,
in the case of credit card receivables, these securities may not have the
benefit of any security interest in the related collateral. See the Statement
of Additional Information for further information on these securities.
Loan Participations and Other Direct Indebtedness
The Bond and the Emerging Growth Portfolios may invest a portion of their
assets in "Loan Participations" and other direct indebtedness. By purchasing a
loan participation, the Portfolios acquire some or all of the interest of a
bank or other lending institution in a loan to a corporate borrower. Many such
loans are secured, and impose restrictive covenants which must be met by the
borrower. These loans are made generally to finance internal growth, mergers,
acquisitions, stock repurchases, leveraged buy-outs and other corporate
activities. Such loans may be in default at the time of purchase. The
Portfolios may also purchase other direct indebtedness such as trade or other
claims against companies, which generally represent money owed by the company
to a supplier of goods and services. These claims may also be purchased at a
time when the company is in default. Certain of the loan participations and
other direct indebtedness acquired by the Portfolios may involve revolving
credit facilities or other standby financing commitments which obligate the
Portfolios to pay additional cash on a certain date or on demand.
The highly leveraged nature of many such loans and other direct indebtedness
may make such loans especially vulnerable to adverse changes in economic or
market conditions. Loan participations and other direct indebtedness may not be
in the form of securities or may be subject to restrictions on transfer, and
only limited opportunities may exist to
29
<PAGE>
resell such instruments. As a result, the Portfolios may be unable to sell such
investments at an opportune time or may have to resell them at less than fair
market value. For a further discussion of loan participations, other direct
indebtedness and the risks related to transactions therein, see the Statement
of Additional Information.
INVESTMENT RESTRICTIONS
Investments of the Portfolios are further restricted by certain policies that
may not be changed without a vote of stockholders. See "INVESTMENT
RESTRICTIONS" in the Statement of Additional Information.
Portfolio Turnover
Portfolio turnover may vary and from year to year or within a year depending
upon economic, market and business conditions. The annual portfolio turnover
rates for the Portfolios in 1994 and 1993 were as follows: 19% and 35% for the
World Growth Stock Portfolio; 17% and 7% for the Gold Stock Portfolio; 47% and
49% for the Domestic Growth Stock Portfolio; and 140% and 113% for the Bond
Portfolio. The portfolio turnover rates for the years ended December 31, 1994
and the year ended December 31, 1993 were 38% and 78%, respectively, for the
Growth and Income Portfolio, 202% and 163%, respectively, for the Capital
Growth Portfolio and 104% and 65%, respectively, for the Balanced Portfolio. In
addition, the portfolio turnover rate for the Balanced Portfolio for such
periods can be broken down into rates of 152% and 72%, respectively, for the
common stock portion of the Portfolio and 36% and 57%, respectively, for the
fixed income portion. It is expected that the Emerging Growth Portfolio will
have a turnover that will approximate 100%. Portfolios having annual portfolio
turnover rates of over 100% may realize larger amounts of gains and losses than
they would with a lower portfolio turnover rate and will generally incur
correspondingly greater brokerage commissions. Excessive short-term trading may
result in excessive "short-short income under the Internal Revenue Code ("IRC")
which, in turn, could cause the Portfolio to also violate IRC Section 817(h)
affecting the status of such Portfolios as regulated investment companies and
the tax status of the contracts invested in the Portfolio. See "TAXES AND
DIVIDENDS" in this Prospectus and "PORTFOLIO TRANSACTIONS AND BROKERAGE
ALLOCATIONS" in the Statement of Additional Information.
MANAGEMENT OF THE FUND
The Board of Directors of the Fund is responsible for the administration of
the affairs of the Fund.
The Fund's investment manager is Chubb Investment Advisory, a registered
investment adviser, which is a wholly-owned subsidiary of Chubb Life. Its
address is One Granite Place, Concord, NH 03301. It provides supervisory
investment advice, acts as transfer and dividend disbursing agent for the Fund
and provides certain administrative services for all of the Fund's Portfolios.
Its investment advisory responsibilities include, among other things,
recommending and overseeing the activities of the Sub-Investment Managers and
reviewing the practices of broker-dealers selected by the Sub-Investment
Managers. Chubb Investment Advisory also provides office space and related
utilities, including telephones, necessary for the Fund's operations;
recommends auditors, counsel and custodians; maintains records not otherwise
maintained by other parties; and provides personnel, data processing services,
and supplies to the Fund. The cost of such facilities, supplies and services is
included in the investment management fee described below. Chubb Investment
Advisory also acts as investment administrator to Chubb Investment Funds, Inc.,
and UST Master Variable Series, Inc., both open-end management investment
companies organized in 1987 and 1994 respectively, and as investment manager
for Chubb Series Trust, an open-end management investment company established
in 1994.
Investment management fees are paid to Chubb Investment Advisory monthly at
an annual rate based on a percentage of the average daily net asset value of
each Portfolio as shown below:
<TABLE>
<CAPTION>
WORLD GROWTH STOCK,
GOLD STOCK,
DOMESTIC GROWTH STOCK,
AVERAGE DAILY NET ASSET MONEY MARKET GROWTH AND INCOME, CAPITAL EMERGING
VALUE AND BOND AND BALANCED GROWTH GROWTH
- ----------------------- ------------ ---------------------- ------- --------
<S> <C> <C> <C> <C>
First $200 Million....... .50% .75% 1.00% .80%
Next $1.1 Billion........ .45% .70% .95% .75%
Over $1.3 Billion........ .40% .65% .90% .70%
</TABLE>
30
<PAGE>
The Sub-Investment Managers for the Portfolios are Templeton, Galbraith &
Hansberger Ltd., Lyford Cay, Nassau, Bahamas for the World Growth Stock
Portfolio; Chubb Asset Managers, Inc., 15 Mountain View Road, Warren, New
Jersey 07061 for the Money Market, Bond, and Growth and Income Portfolios; Van
Eck Associates Corporation, 99 Park Avenue, New York, New York 10016 for the
Gold Stock Portfolio; Pioneering Management Corporation, 60 State Street,
Boston, Massachusetts 02109 for the Domestic Growth Stock Portfolio; Janus
Capital Corporation, 100 Fillmore Street, Suite 300, Denver, Colorado 80206 for
the Capital Growth Portfolio; Phoenix Investment Counsel, Inc., One American
Row, Hartford, Connecticut 06115 for the Balanced Portfolio; Massachusetts
Financial Services Company, 500 Boylston Street, Boston, Massachusetts 02116
for the Emerging Growth Portfolio.
Templeton, a registered investment adviser, is organized under the laws of
the Bahamas. Templeton is an indirect wholly owned subsidiary of Franklin
Resources, Inc. ("Franklin"), a Delaware corporation. Franklin is a publicly
traded company whose ordinary shares of common stock are listed on the New York
Stock Exchange. Templeton serves as an investment adviser or sub-adviser to
various investment companies registered under the Investment Company Act of
1940, subject to the supervision and direction of each company's Board of
Directors and, where appropriate, the company's investment adviser, as well as
to investment companies registered in foreign jurisdictions. In this capacity,
Templeton is responsible on a daily basis for managing the companies'
investments, making investment decisions on behalf of the companies and
supplying research services. Templeton may also provide investment research and
advice to certain common trust vehicles. Templeton is also an adviser or sub-
adviser to several private accounts. Templeton and its affiliates currently
serve as investment manager to twenty-five U.S. registered investment
companies. Dr. Jane Siebels-Kilnes has been primarily responsible for the day-
to-day management of the World Growth Stock Portfolio since 1991. She has been
employed by Templeton since September 1990 and was previously Vice President
for Union Bank of Switzerland, Zurich, Switzerland from March 1990 to September
1990 and Portfolio Manager for Storebrand International, Oslo, Norway from July
1985 to March 1990.
Chubb Asset, a registered investment adviser, is a Delaware corporation and a
wholly-owned subsidiary of The Chubb Corporation. Since 1987, Chubb Asset has
been the investment manager for Chubb Investment Funds, Inc., which currently
consists of the Chubb Money Market Fund, the Chubb Government Securities Fund,
the Chubb Tax-Exempt Fund, the Chubb Total Return Fund and the Chubb Growth and
Income Fund. Persons employed by Chubb Asset, who are also investment personnel
of Chubb & Son, Inc., a wholly-owned subsidiary of The Chubb Corporation,
currently provide investment advice to and supervise and monitor investment
portfolios for The Chubb Corporation and its affiliates, including general
accounts of insurance affiliates of The Chubb Corporation. In addition, certain
investment personnel employed by Chubb Asset currently provide advice to other
investment portfolios of entities not affiliated with The Chubb Corporation or
its affiliates in their capacity as officers or directors of certain registered
investment advisers not related to Chubb Asset. Ned Gerstman and Paul Geyer
have been primarily responsible for the day-to-day management of the Bond
Portfolio since 1988 and 1991, respectively. Mr. Gerstman is Senior Vice
President of Chubb Asset and Vice President and Portfolio Manager of The Chubb
Corporation. He has been employed by Chubb Asset since 1988 and has been
Portfolio Manager for The Chubb Corporation since 1987. Mr. Geyer, Assistant
Vice President and Assistant Portfolio Manager of Chubb Asset, has been
affiliated with Chubb Asset since 1991 and with The Chubb Corporation since
1990. He was previously affiliated with Merrill Lynch in New York. David
Schafer and Robert Witkoff have been primarily responsible for the day-to-day
management of the Growth and Income Portfolio since 1993 and 1992,
respectively. Mr. Schafer, Senior Vice President of Chubb Asset, has been
affiliated with Chubb Asset since 1993. Mr. Schafer is also President of Chubb
Equity Managers, Director and President of Schafer Value Fund, Inc., Director,
President and Treasurer of Schafer Capital Management, Inc., Chairman of the
Board of Schafer Cullen Capital Management, Inc. and sole proprietor of Schafer
Capital Management Co. Mr. Witkoff joined Chubb Asset in 1988 and is currently
Vice President of Chubb Asset and Portfolio Manager for The Chubb Corporation.
Van Eck Associates, a registered investment adviser, is a Delaware
corporation. It acts as an adviser to three other registered investment
companies, Van Eck Funds, Van Eck Investment Trust and International Growth
Trust and as a sub-adviser to two other registered investment companies,
Thomson Fund Group--Thomson Precious Metals and Natural Resources Fund and GCG
Trust--Natural Resources Fund, and manages or advises managers of portfolios of
pension plans and other accounts. Mr. John C. van Eck owns 25.6% of the
outstanding voting securities of Van Eck Associates and his wife and two sons,
Jan and Derek van Eck, 270 River Road, Briarcliff Manor, New York, are each the
beneficial owners of 24.8% of such securities. Mr. John C. van Eck has retained
the right to direct the voting and disposition of the shares of Van Eck
Associates held by his wife. Lucille Palermo has been primarily responsible for
the day-to-day management of the Gold Stock Portfolio since October of 1991.
She has been affiliated with Van Eck
31
<PAGE>
Associates and related companies since 1989 and is currently Executive Vice
President of Van Eck Funds and President and Portfolio Manager for the
Gold/Resources Fund.
Pioneer, a registered investment adviser, is a Delaware corporation. It is a
wholly-owned subsidiary of The Pioneer Group, Inc., a Delaware corporation.
Pioneer currently acts as a manager and investment adviser of twenty-five other
registered investment companies. Robert Benson, Senior Vice President of
Pioneer, has been primarily responsible for the day-to-day management of the
Domestic Growth Stock Portfolio since 1986. Mr. Benson has been employed by
Pioneer since 1974.
Janus, a registered investment adviser, is a Colorado corporation. It serves
as investment adviser or subadviser to Janus Growth and Income Fund, Janus
Worldwide Fund, Janus Fund, Janus Twenty Fund, Janus Venture Fund, Janus
Flexible Income Fund and Janus Intermediate Government Securities Fund, as well
as several other mutual funds and individual, corporate and pension and profit-
sharing accounts. Kansas City Southern Industries, Inc. ("KCSI") owns
approximately 81% of the outstanding voting stock of Janus, most of which it
acquired in 1984. KCSI is a publicly-traded holding company whose primary
subsidiaries are engaged in transportation, financial services and real estate.
Helen Young Hayes has been primarily responsible for the day-to-day management
of the Capital Growth Portfolio since its inception in 1992. Ms. Hayes, who is
currently Executive Vice President of Janus Investment Fund and Janus Aspen
Series, as well as Portfolio Manager of the Janus Worldwide Fund and separate
equity accounts, has been affiliated with Janus since 1987.
Phoenix, a registered investment adviser, is a Massachusetts corporation. It
was originally organized in 1932 as John P. Chase, Inc. and has been engaged in
the management of the Phoenix Series Fund since 1958. It also serves as
investment adviser or sub-investment adviser to Phoenix Multi-Portfolio Fund,
Phoenix Total Return Fund, Inc., The Phoenix Edge Series Fund, Cambridge Series
Trust, SunAmerica Series Trust, JNL Series Trust and American Skandia Trust.
All of the outstanding stock of Phoenix is owned by Phoenix Equity Planning
Corporation, an indirect subsidiary of Phoenix Home Life Mutual Insurance
Company. Phoenix Home Life Mutual Insurance Company is in the business of
writing ordinary and group life and health insurance and annuities, including
variable life insurance and variable annuities. Melanie Reichl has been
primarily responsible for the day-to-day management of the Balanced Portfolio
since May 1995. Previously she was an Assistant Vice President Personal Trust
Portfolio manager at the Bank of Boston.
Massachusetts Financial Services Company ("MFS") is America's oldest mutual
fund organization. MFS and its predecessor organizations have a history of
money management dating from 1924 and the founding of the first mutual fund in
the United States, Massachusetts Investors Trust. Net assets under the
management of the MFS organization were approximately $34.5 billion on behalf
of approximately 1.6 million investor accounts as of February 28, 1995. As of
such date, the MFS organization manages approximately $11.5 billion of assets
invested in equity securities and approximately $19.5 billion of assets
invested in fixed income securities. Approximately $3.1 billion of the assets
managed by MFS are invested in securities of foreign issuers and non-U.S.
dollar denominated securities of U.S. issuers. MFS is a subsidiary of Sun Life
Assurance Company of Canada (U.S.), which in turn is a subsidiary of Sun Life
Assurance Company of Canada.
MFS also serves as investment adviser to each of the other funds in the MFS
Family of Funds (the "MFS Funds") and to MFS (R) Municipal Income Trust, MFS
Multimarket Income Trust, MFS Government Markets Income Trust, MFS Intermediate
Income Trust, MFS Charter Income Trust, MFS Special Value Trust, MFS Variable
Insurance Trust, MFS Institutional Trust, MFS Union Standard Trust, MFS/Sun
Life Series Trust, Sun Growth Variable Annuity Fund, Inc. and seven variable
accounts, each of which is a registered investment company established by Sun
Life Assurance Company of Canada (U.S.) in connection with the sale of Compass-
2 and Compass-3 combination fixed/variable annuity contracts. MFS and its
wholly-owned subsidiary, MFS Asset Management, Inc., provides investment advice
to substantial private clients. John W. Ballen, a Senior Vice President of MFS,
will be the Portfolio's portfolio manager. Mr. Ballen has been employed by MFS
since 1984.
32
<PAGE>
The compensation of the Sub-Investment Managers is paid directly from the
investment management fees of Chubb Investment Advisory and is set forth in the
table below as an annual percentage of the average daily net asset value of the
Portfolio managed:
<TABLE>
<CAPTION>
SUB-INVESTMENT MANAGER
-----------------------------------------------------------------------------
CHUBB ASSET
CHUBB ASSET FOR THE
FOR THE BOND AND
GROWTH AND MONEY MARKET VAN ECK
AVERAGE DAILY NET ASSET VALUE INCOME PORTFOLIO JANUS PHOENIX TEMPLETON PORTFOLIOS ASSOCIATES PIONEER MFS
- ----------------------------- ---------------- ----- ------- --------- ------------ ---------- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First $200 Million...... .50% .75% .50% .50% .35% .50% .50% .50%
Next $1.1 Billion....... .45% .70% .45% .45% .30% .45% .45% .45%
Over $1.3 Billion....... .40% .65% .40% .40% .25% .40% .40% .40%
</TABLE>
As noted above, Chubb Investment Advisory acts as transfer agent and dividend
paying agent for the Fund and assumes a number of administrative functions in
addition to its investment management services. For example, Chubb Investment
Advisory prepares and distributes proxy statements, prospectuses, Statements of
Additional Information, reports and other communications with stockholders;
schedules, plans the agenda for, and conducts the meetings of the Fund's
directors and stockholders; and prepares and files tax returns and reports
which federal, state, local or foreign laws may require. The cost of preparing,
printing and distributing all materials and holding such meetings is borne by
the Fund. The Fund also pays certain other expenses which are described under
the heading "INVESTMENT ADVISORY AND OTHER SERVICES--Payment of Expenses" in
the Statement of Additional Information.
For the year ended December 31, 1994, all investment management fees paid to
Chubb Investment Advisory totalled .75%, .50%, .75%, .75%, .50%, .75%, 1.00%,
and .75%, respectively, of the average net assets of the World Growth Stock
Portfolio, Money Market Portfolio, Gold Stock Portfolio, Domestic Growth Stock
Portfolio, Bond Portfolio, Growth and Income Portfolio, Capital Growth
Portfolio and Balanced Portfolio. For the year ended December 31, 1994 the
ratio of operating expenses to average net assets was 1.00%, .65%, .99%, .89%,
.68%, 1.10%, 1.22% and 1.01% respectively, for the World Growth Stock
Portfolio, the Money Market Portfolio, the Gold Stock Portfolio, the Domestic
Growth Stock Portfolio, the Bond Portfolio, the Growth and Income Portfolio,
the Capital Growth Portfolio and the Balanced Portfolio.
CAPITAL STOCK
The Fund issues a separate series of capital stock for each Portfolio. Each
share of capital stock issued with respect to a Portfolio has a pro rata
interest in the assets of that Portfolio. Each share of capital stock is
entitled to one vote on all matters submitted to a vote of all stockholders of
the Fund, and fractional shares are entitled to a corresponding fractional
vote. Shares of a Portfolio will be voted separately from shares of other
Portfolios on matters affecting only that Portfolio, including approval of the
investment management agreement, a sub-investment management agreement, and
changes in fundamental investment policies of that Portfolio. The assets of
each Portfolio are charged with the liabilities of that Portfolio and a
proportionate share of the general liabilities of the Fund. All shares may be
redeemed at any time.
As a Maryland corporate entity, the Fund is not required to hold regular
annual shareholder meetings and, in the normal course, does not expect to hold
such meetings. The Fund is, however, required to hold shareholder meetings for
such purposes as, for example: (i) approving certain agreements as required by
the 1940 Act; (ii) changing fundamental investment objectives and restrictions
of the Portfolios; and (iii) filling vacancies on the Board of Directors in the
event that less than a majority of the directors were elected by shareholders.
The Fund expects that there will be no meetings of shareholders for the purpose
of electing directors unless and until such time as less than a majority of the
directors holding office have been elected by shareholders. At such time, the
directors then in office will call a shareholder meeting for the election of
directors. In addition, holders of record of not less than two-thirds of the
outstanding shares of the Fund may remove a director from office by a vote cast
in person or by proxy at a shareholder meeting called for that purpose at the
request of holders of 10% or more of the outstanding shares of the Fund. The
Fund has the obligation to assist in such shareholder communications. Except as
set forth above, directors will continue in office and may appoint successor
directors.
33
<PAGE>
Chubb Life initially purchased 100,000 shares of the capital stock of each
Portfolio, other than the Balanced Portfolio and the Emerging Growth Portfolio,
for its general account. Chubb Life initially purchased 500,000 shares of the
capital stock of the Balanced Portfolio and will purchase 300,000 shares of
capital stock of the Emerging Growth Portfolio for its general account. The
purchase price of each share was $10.00. All other shares are offered only to
corresponding divisions of separate accounts established by Chubb Life or its
affiliated insurance companies. As of March 31, 1995, Chubb Life owned greater
than 25% of the shares of capital stock of the Bond Portfolio, the Growth and
Income Portfolio and the Balanced Portfolio. Chubb Life's ownership of greater
than 25% of these Portfolios may result in Chubb Life being deemed to be a
controlling entity of them. The shares held in a separate account which are
attributable to Policies will be voted by Chubb Life or its affiliated
insurance companies in accordance with instructions received from the owners of
Policies. The shares held by Chubb Life or its affiliated insurance companies,
including shares for which no voting instructions have been received, shares
held in the separate account representing charges imposed by Chubb Life or its
affiliated insurance companies against the separate account and shares held by
Chubb Life or its affiliated insurance companies that are not otherwise
attributable to Policies, will also be voted by Chubb Life or its affiliated
insurance companies in proportion to instructions received from the owners of
Policies. Chubb Life and its affiliated insurance companies reserve the right
to vote any or all such shares at their discretion to the extent consistent
with then current interpretations of the Investment Company Act of 1940 and
rules thereunder.
TAXES AND DIVIDENDS
Each Portfolio intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code ("Code"). It is the Fund's policy to
comply with the provisions of the Code regarding distribution of investment
income. Under those provisions, a Portfolio will not be subject to federal
income tax on that portion of its ordinary income and net capital gains
distributed to shareholders.
The Fund expects that each Portfolio will declare and distribute by the end
of each calendar year all or substantially all ordinary income and net capital
gains. Failure to distribute substantially all ordinary and net capital gains,
as described, may subject the Fund to an excise tax.
Dividends from ordinary income will be declared and distributed with respect
to each Portfolio at least once each year. Ordinary income of each Portfolio is
the investment company taxable income as defined in Section 852(b) of the Code.
All dividends and distributions will be automatically reinvested in additional
shares of the Portfolio with respect to which dividends have been declared, at
net asset value, as of the ex-dividend date of such dividends.
Section 817(h) of the Code and regulations thereunder set standards for
diversification of the investments underlying variable life insurance policies
in order for such policies to be treated as life insurance. These requirements,
which are in addition to diversification requirements applicable to the
Portfolios under Subchapter M and the Investment Company Act of 1940, may
affect the composition of a Portfolio's investments. Since the shares of the
Fund are currently sold to segregated asset accounts underlying such variable
life insurance policies, the Fund intends to comply with the diversification
requirements as set forth in the regulations.
The Secretary of the Treasury may in the future issue additional regulations
or revenue rulings that will prescribe the circumstances in which a
policyowner's control of the investments of a separate account may cause the
policyowner, rather than the insurance company, to be treated as the owner of
the assets of the separate account. Failure to comply with Section 817(h) of
the Code or any regulations thereunder, or with any regulations or revenue
rulings on policyowner control, if promulgated, would cause earnings on a
policyowner's interest in the separate account to be includible in the
policyowner's gross income in the year earned.
OFFERING AND REDEMPTION OF SHARES
Shares of capital stock of each Portfolio of the Fund are offered only to the
corresponding division of a separate account to which premiums have been
allocated by the owner of a Policy. Shares are sold and redeemed at their net
asset value as next determined following receipt by the separate account of
premium payments, surrender requests under Policies, loan payments, transfer
requests, and similar or related transactions through the separate account. The
Fund's principal underwriter and distributor is Chubb Securities Corporation,
One Granite Place, Concord, New Hampshire 03301. Chubb Securities Corporation
is an affiliate of Chubb Investment Advisory and a wholly-owned subsidiary of
Chubb Life. No selling commission or redemption charge is made with respect to
the purchase or sale of Fund shares.
34
<PAGE>
Net asset value is normally determined as of the close of regular trading on
the New York Stock Exchange (presently 4:00 p.m. New York Time) on each day
during which the New York Stock Exchange is open for trading.
An equity security listed on a stock exchange is valued at the closing sale
price on the exchange on which such security is principally traded. If no sale
took place, the mean of the bid and asked prices at the close of trading is
used. A security not listed on a stock exchange is valued at the closing sale
price as reported on a readily available market quotation system, or, if no
sales took place, the mean of the bid and asked prices at the close of trading
in the over-the-counter market. Quotations of foreign securities in foreign
currencies are converted to United States dollar equivalents using
appropriately translated foreign market closing prices.
Trading in securities on exchanges in European and Far Eastern countries, and
in over-the-counter markets in such other nations, is normally completed well
before the close of trading on the New York Stock Exchange. Trading of European
and Far Eastern securities, either generally or in a particular country or
countries, may not take place on every day on which the New York Stock Exchange
is open. Furthermore, trading takes place in Japanese markets on certain
Saturdays, and in various foreign markets on days which are not business days
in New York and on which the Fund's net asset value is not normally calculated.
The calculation of the net asset value of those Portfolios which do such
trading, therefore, may not take place contemporaneously with the determination
of the prices of many of the securities of each such Portfolio which are used
in making the calculation of net asset value. Occasionally, events affecting
the values of such securities may occur between the times at which they are
determined and the close of the New York Stock Exchange, which events may not
be reflected in the computation of a Portfolio's net asset value. If, during
such periods, events occur which materially affect the value of the securities
of a Portfolio, and during such periods either shares are tendered for
redemption or a purchase or sale order is received by the Fund, such securities
will be valued at fair value as determined in good faith by the Board of
Directors of the Fund.
Debt securities having remaining maturities of 60 days or less are valued on
an amortized cost basis unless the Board determines that such method does not
represent fair value. This procedure values a purchased instrument at cost on
the date of purchase. It thereafter assumes a constant rate of amortization of
any discount or premium and of accrual of interest income, regardless of any
intervening change in general interest rates or the market value of the
instrument.
Options and convertible preferred stocks listed on a national securities
exchange are valued as of their last sale price or, if there is no sale, at the
current bid price. Futures Contracts are valued as of their last sale price or,
if there is no sale, at the latest available bid price.
All other securities and assets are valued at their fair value as determined
in good faith by the Board of Directors of the Fund.
With the approval of the Board, the Fund may utilize a pricing service, a
bank, or a broker-dealer experienced in such matters to perform any of the
above-described valuation functions.
Further discussion of asset valuation methods is included in the Statement of
Additional Information under the heading "DETERMINATION OF NET ASSET VALUE."
OTHER INFORMATION
Shares of the Portfolios are presently offered only to corresponding
divisions of separate accounts established by Chubb Life or its affiliated
insurance companies in order to fund the Policies. In the future, however, the
shares of the Portfolios may also be offered to separate accounts of Chubb Life
or affiliates of Chubb Life in order to fund additional variable life insurance
policies or variable annuity contracts offered by Chubb Life or its affiliates.
A potential for certain conflicts of interest exists between the interests of
variable life insurance policyowners and variable annuity contract owners. In
the event that shares of the Portfolios are offered to separate accounts
funding variable annuity contracts, the Board of Directors of the Fund intends
to monitor events for the existence of any material conflict between the
interests of variable life insurance policyowners and variable annuity contract
owners and to determine what action, if any, should be taken in response
thereto.
35
<PAGE>
SCHEDULE OF INVESTMENTS--Unaudited
CHUBB AMERICA FUND, INC.
EMERGING GROWTH PORTFOLIO
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Market
Value
Shares (Note B)
------------ ----------
<S> <C> <C>
COMMON STOCK 90.30%
Advertising, Broadcasting, & Publishing 0.13%
Citation Corporation (S).......................... 500 $9,000
----------
Automotive Manufacturing 0.01%
Boyds Wheels, Inc. (S)............................ 100 700
----------
Brewery 0.04%
Redhook Ale Brewery, Inc. (S)..................... 100 2,952
----------
Broadcasting - Radio & TV 0.07%
American Radio Systems Corp. (S).................. 100 2,475
Sinclair Broadcasting Group, Inc. (S)............. 100 2,875
----------
5,350
----------
Chemicals 0.05%
Arcadian Corporation (S).......................... 100 2,038
The Carbide/Graphite Group, Inc. (S).............. 100 1,412
----------
3,450
----------
Commercial Services 4.98%
AccuStaff, Inc. (S)............................... 100 3,675
Business Resource Group (S)....................... 100 487
CUC International, Inc. (S)....................... 3,600 125,550
Franklin Quest Company (S)........................ 3,500 85,750
Healthplan Services Corp ......................... 1,000 20,375
Interim Services, Inc. (S)........................ 1,000 27,000
Personnel Group Of America, Inc. (S).............. 4,900 68,600
Romac International, Inc. (S)..................... 100 1,700
SOS Staffing Services (S)......................... 200 1,650
Service Corporation International................. 400 15,650
Sitel Corporation (S)............................. 100 2,450
----------
352,887
----------
</TABLE>
(S) Non-income producing security.
See notes to financial statements.
<PAGE>
SCHEDULE OF INVESTMENTS--Unaudited (Continued)
CHUBB AMERICA FUND, INC.
EMERGING GROWTH PORTFOLIO
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Market
Value
Shares (Note B)
------------ ----------
<S> <C> <C>
Computer & Office Equipment 4.07%
Bay Networks, Inc................................. 1,200 $64,050
Cabletron Systems, Inc. (S)....................... 2,900 191,037
Chipcom Corporation (S)........................... 500 24,250
Cybex Corporation (S)............................. 100 2,500
Imnet Systems, Inc (S)............................ 100 2,575
Storemedia, Inc. (S).............................. 100 4,525
----------
288,937
----------
Computer Software - Mainframe 21.04%
Arcsys, Inc. (S).................................. 100 4,125
BDM International, Inc. (S)....................... 100 2,750
BMC Software, Incorporated........................ 3,200 147,200
Baan Company N.V. (S)............................. 100 4,500
Black Box Corporation (S)......................... 700 12,950
Cadence Design Systems, Inc....................... 3,000 117,750
Checkfree Corporation (S)......................... 100 2,000
Computer Associates International, Inc. (S)....... 1,400 59,150
Computron Software, Inc. (S)...................... 100 1,725
Compuware Corp. (S)............................... 4,000 88,000
Datalogix International, Inc. (S)................. 100 1,425
Eagle Point Software Corp. (S).................... 100 1,875
HNC Software, Inc. (S)............................ 100 2,625
HPR, Inc. (S)..................................... 100 2,325
Harbinger Corporation (S)......................... 100 1,375
Informix Corporation.............................. 5,000 162,500
Interactive Group, Inc. (S)....................... 100 662
Legato Systems, Inc. (S).......................... 100 2,650
Marcam Corp. (S).................................. 1,000 14,875
Maxis, Inc. (S)................................... 100 4,400
Mysoftware Company (S)............................ 100 1,275
National Data Corp................................ 100 2,687
Number Nine Visual Technology Corp. (S)........... 100 1,650
Oak Technology, Inc. (S).......................... 300 12,600
Oracle Systems Corp............................... 8,600 330,025
SPS Transaction Services Corp..................... 2,700 78,300
Spyglass, Inc. (S)................................ 100 4,575
Summit Medical Systems (S)........................ 100 1,500
Sybase, Inc. (S).................................. 3,900 125,288
Symantec Corporation (S).......................... 700 21,000
System Software Associates, Inc................... 5,600 224,700
The Bisys Group, Inc. (S)......................... 1,500 38,250
Transaction Systems Architects, Inc. (S).......... 200 5,350
UUNET Technologies, Inc. (S)...................... 100 4,625
Vantive Corporation (S)........................... 100 1,600
Videoserver, Inc. (S)............................. 100 3,525
----------
1,491,812
----------
</TABLE>
(S) Non-income producing security.
See notes to financial statements.
<PAGE>
SCHEDULE OF INVESTMENTS--Unaudited (Continued)
CHUBB AMERICA FUND, INC.
EMERGING GROWTH PORTFOLIO
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Market
Value
Shares (Note B)
------------ ---------
<S> <C> <C>
Computer Software - P.C. 7.45%
Adobe Systems, Inc................................ 700 $36,225
Astea International, Inc (S)...................... 100 2,000
Autodesk, Inc..................................... 6,300 275,625
CBT Group PLC-ADR (S)............................. 200 9,550
Dendrite International, Inc.(S)................... 100 1,525
Discreet Logic, Inc............................... 100 5,500
Hummingbird Communications, Ltd.(S)............... 800 29,800
Inference Corp., Class A (S)...................... 100 1,500
Integrated Measurement Systems, Inc.(S)........... 100 1,325
Netscape Communications Corporation (S)........... 100 6,250
Novadigm, Inc. (S)................................ 100 1,687
On Technology, Inc. (S)........................... 100 1,750
Premenos Technology Corporation (S)............... 100 3,250
Pure Software, Inc. (S)........................... 100 3,575
Seer Technologies, Inc. (S)....................... 100 1,512
Smith Micro Software, Inc. (S).................... 100 988
Softkey International, Inc. (S)................... 2,800 123,900
Spectrum Holobyte, Inc. (S)....................... 600 7,575
Technology Solutions Company (S).................. 600 10,800
Touchstone Software Corporation (S)............... 200 2,150
Unison Software, Inc. (S)......................... 100 1,500
----------
527,987
----------
Electrical Equipment 0.02%
Plasma & Materials Technologies, Inc. (S)......... 100 1,763
----------
Electronics 3.46%
AVX Corporation................................... 200 6,700
Accom, Inc. (S)................................... 100 875
Cyberoptics Corporation (S)....................... 100 3,400
Euphonix, Inc. (S)................................ 300 3,000
Information Storage Devices, Inc. (S)............. 300 6,787
Lsi Logic Corporation............................. 1,300 75,075
Linear Technology Corp............................ 1,400 58,100
Mackie Designs, Inc. (S).......................... 100 1,450
Macromedia, Inc................................... 200 11,425
Maxim Integrated Products, Inc.................... 300 22,200
Paradigm Technology, Inc. (S)..................... 100 3,075
Smartflex Systems, Inc. (S)....................... 100 1,700
Telecom Seciconductors, Inc. (S).................. 100 1,150
Thermospectra Corporation (S)..................... 100 1,675
Tower Semiconductor, Ltd. (S)..................... 1,000 32,500
UCAR International, Inc. (S)...................... 300 8,175
Ultratech Stepper, Inc............................ 200 8,450
----------
245,737
----------
</TABLE>
(S) Non-income producing security.
See notes to financial statements.
<PAGE>
SCHEDULE OF INVESTMENTS--Unaudited (Continued)
CHUBB AMERICA FUND, INC.
EMERGING GROWTH PORTFOLIO
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Market
Value
Shares (Note B)
------------ ----------
<S> <C> <C>
Electronics-Semiconductor 0.12%
National Semiconductor Corporation (S)............ 300 $8,288
----------
Emerging Technology 0.01%
General Scanning, Inc. (S)........................ 100 1,125
----------
Entertainment & Leisure 3.91%
Ambassadors International, Inc. (S)............... 200 2,250
Aztar Corporation (S)............................. 300 2,512
Casino America, Inc. (S).......................... 900 8,437
Grand Casinos, Inc................................ 2,500 101,563
Harrah's Entertainment, Inc....................... 5,100 149,175
National Gaming Corp. (S)......................... 1,000 10,250
Station Casinos, Inc. (S)......................... 200 3,075
----------
277,262
----------
Environmental Control 0.78%
Sanifill, Inc. (S)................................ 1,700 55,675
----------
Financial Services 0.26%
Credit Acceptance Corporation..................... 400 10,800
Jayhawk Acceptance Corp. (S)...................... 100 1,462
Union Acceptance Corp., Class A (S)............... 200 3,750
WFS Financial, Inc. (S)........................... 100 2,275
----------
18,287
----------
Food-Processing 0.05%
Rocky Mountain Chocolate Factory, Inc. (S)........ 200 3,450
----------
Industrial Machines - Engines 0.04%
Hardinge, Inc..................................... 100 2,625
----------
</TABLE>
(S) Non-income producing security.
See notes to financial statements.
<PAGE>
SCHEDULE OF INVESTMENTS--Unaudited (Continued)
CHUBB AMERICA FUND, INC.
EMERGING GROWTH PORTFOLIO
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Market
Value
Shares (Note B)
------------ ------------
<S> <C> <C>
Insurance 11.39%
Compdent Corporation (S).......................... 400 $11,700
Foundation Health Corp. (S)....................... 2,800 106,750
Healthsource, Inc. (S)............................ 1,500 72,187
Mid Atlantic Medical Services, Inc. (S)........... 8,100 158,962
Oxford Health Plans, Inc.......................... 800 58,200
Pacificare Health Systems, Class A (S)............ 1,000 65,500
Physician Corporation Of America (S).............. 400 6,300
Renaissancere Holdings, Ltd. (S).................. 100 2,438
United Dental Care, Inc. (S)...................... 100 3,000
United Healthcare Corp............................ 6,600 322,575
----------
807,612
----------
Lodging 7.05%
Amerihost Properties, Inc. (S).................... 5,000 34,375
Doubletree Corp. (S).............................. 200 4,450
HFS, Inc.......................................... 6,450 337,819
John Q Hammons Hotels, Inc. (S)................... 4,100 52,787
La Quinta Inns, Inc............................... 100 2,800
Promus Hotel Corporation (S)...................... 2,400 54,600
Renaissance Hotel Group N.V. (S).................. 600 10,650
Studio Plus Hotels, Inc. (S)...................... 100 2,300
----------
499,781
----------
Machine-Diversified 0.35%
AG Associates, Inc. (S)........................... 100 2,550
American Standard Companies, Inc. (S)............. 300 8,850
Computational Systems, Inc. (S)................... 100 1,625
Opal, Inc. (S).................................... 100 1,825
Veeco Instruments, Inc. (S)....................... 100 2,625
Westinghouse Air Brake Co. (S).................... 500 7,187
----------
24,662
----------
Manufacturing 0.15%
Chicago Miniature Lamp, Inc. (S).................. 100 1,775
Oakley, Inc. (S).................................. 100 2,963
Safety Components International, Inc. (S)......... 300 5,700
----------
10,438
----------
</TABLE>
(S) Non-income producing security.
See notes to financial statements.
<PAGE>
SCHEDULE OF INVESTMENTS--Unaudited (Continued)
CHUBB AMERICA FUND, INC.
EMERGING GROWTH PORTFOLIO
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Market
Value
Shares (Note B)
------------ -----------
<S> <C> <C>
Medical - Biotech 0.03%
Ostech Inc. (S)................................... 100 $1,825
------------
Medical - Hospitals 7.09%
American Oncology Resources, Inc. (S)............. 100 4,300
Community Care of America, Inc. (S)............... 200 2,775
Horizon Healthcare Corp. (S)...................... 1,900 43,225
Integrated Health Services........................ 4,100 115,825
Lincare Holdings, Inc. (S)........................ 2,000 51,500
Living Centers Of America, Inc. (S)............... 500 16,625
Mariner Health Group, Inc. (S).................... 1,000 14,125
Occusystems, Inc. (S)............................. 100 2,075
Owen Healthcare Inc............................... 400 6,525
Pacificare Health Systems-B, Inc. (S)............. 2,100 142,800
Pediatric Services of America, Inc. (S)........... 400 7,700
Pediatrix Medical Group, Inc. (S)................. 100 2,050
Physicians Resource Group, Inc. (S)............... 200 4,425
Renal Treatment Centers, Inc. (S)................. 1,200 44,400
Surgical Care Affiliates.......................... 1,900 44,175
----------
502,525
-----------
Medical Supplies 0.24%
ICU Medical, Inc. (S)............................. 100 1,350
Orthofix International N.V. (S)................... 1,000 15,500
----------
16,850
----------
Office & Business Equipment 0.17%
BT Office Products International, Inc. (S)........ 900 11,813
----------
Publishing-Newspaper 0.05%
Desktop Data, Inc. (S)............................ 100 3,475
----------
Publishing/Printing 0.17%
Mail-Well, Inc. (S)............................... 900 12,150
----------
Real Estate 0.39%
NHP, Inc. (S)..................................... 2,000 27,750
----------
</TABLE>
(S) Non-income producing security.
See notes to financial statements.
<PAGE>
SCHEDULE OF INVESTMENTS--Unaudited (Continued)
CHUBB AMERICA FUND, INC.
EMERGING GROWTH PORTFOLIO
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Market
Value
Shares (Note B)
------------ ----------
<S> <C> <C>
Restaurants & Food Service 4.68%
Apple South, Inc.................................. 100 $2,275
Applebee's International, Inc..................... 2,000 54,500
Brinker International, Inc. (S)................... 4,400 65,450
Buffets, Inc. (S)................................. 3,000 37,500
Hometown Buffet, Inc. (S)......................... 1,700 23,800
IHOP Corporation. (S)............................. 3,000 78,750
Logan's Roadhouse, Inc. (S)....................... 100 1,750
Lone Star Steakhouse & Saloon (S)................. 900 36,900
Papa John's International, Inc. (S)............... 100 4,500
Quantum Restaurant Group, Inc. (S)................ 2,000 26,750
----------
332,175
----------
Retail 6.23%
Boise Cascade Office Products Corp. (S)........... 800 22,200
Borders Group, Inc. (S)........................... 300 5,137
Consolidated Stores Corp. (S)..................... 2,200 50,875
Dollar Tree Stores, Inc. (S)...................... 900 30,600
Duty Free International, Inc...................... 100 1,275
Global Directmail Corp. (S)....................... 1,200 29,550
Gymboree Corp. (S)................................ 700 21,088
Hollywood Entertainment Corp...................... 600 12,863
Micro Warehouse, Inc. (S)......................... 2,700 123,525
Office Depot, Inc. (S)............................ 4,800 144,600
----------
441,713
----------
Retail - Specialty 0.58%
Corporate Express, Inc............................ 700 17,062
Creative Computers, Inc. (S)...................... 100 2,950
Moovies, Inc. (S)................................. 100 1,963
Officemax, Inc.................................... 800 19,400
----------
41,375
----------
Semiconductors 0.65%
Burr-Brown Corporation............................ 800 29,800
C.P. Clare Corp. (S).............................. 100 2,550
Lattice Semiconductor Corporation. (S)............ 100 4,062
MEMC Electronic Materials, Inc. (S)............... 200 5,425
Ontrak Systems, Inc. (S).......................... 100 2,763
Transwitch Corp. (S).............................. 100 1,263
----------
45,863
----------
</TABLE>
(S) Non-income producing security.
See notes to financial statements.
<PAGE>
SCHEDULE OF INVESTMENTS--Unaudited (Continued)
CHUBB AMERICA FUND, INC.
EMERGING GROWTH PORTFOLIO
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Market
Value
Shares (Note B)
------------ -----------
<S> <C> <C>
Telecommunication 2.78%
Equalnet Holding Corp. (S)........................ 3,000 $46,500
Midcom Communications, Inc. (S)................... 200 3,050
Mobile Media, Inc. (S)............................ 100 2,700
Tel-Save Holdings, Inc. (S)....................... 2,100 32,288
Worldcom, Inc. (S)................................ 3,500 112,437
----------
196,975
----------
Telecommunication Equipment 0.33%
Colonial Data Technologies Corporation (S)........ 1,000 18,500
Harmonic Lightwaves, Inc. (S)..................... 100 1,800
Teletrend, Inc. (S)............................... 100 3,300
----------
23,600
----------
Transportation 0.66%
American Medical Response, Inc. (S)............... 1,500 42,563
Atlas Air, Inc. (S)............................... 200 4,450
----------
47,013
----------
Transportation-Air 0.03%
Midwest Express Holdings, Inc. (S)................ 100 2,250
----------
Utilities-Telecommunications 0.75%
Frontier Corporation.............................. 2,000 53,250
----------
Wholesale 0.04%
Programmer's Paradise, Inc. (S)................... 100 1,050
U.S. Office Products Company (S).................. 100 1,513
----------
2,563
----------
TOTAL COMMON STOCK (cost $5,321,729)........... 6,402,945
----------
</TABLE>
(S) Non-income producing security.
See notes to financial statements.
<PAGE>
SCHEDULE OF INVESTMENTS--Unaudited (Continued)
CHUBB AMERICA FUND, INC.
EMERGING GROWTH PORTFOLIO
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Market
Principal Value
Value (Note B)
------------ -----------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS 9.73%
FHLMC, 6.300%, due 10/02/95.................................... $690,000 $689,759
----------
TOTAL SHORT-TERM OBLIGATIONS (cost $689,759)................ 689,759
----------
TOTAL INVESTMENTS
(Cost $6,011,488*)....................... 100.03% 7,092,704
Other assets, less liabilities.............. -0.03 (2,289)
------- ----------
TOTAL NET ASSETS......................... 100.00% $7,090,415
======= ==========
</TABLE>
*Aggregate cost for Federal income tax purposes.
(S) Non-income producing security.
See notes to financial statements.
<PAGE>
CHUBB AMERICA FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES -- (Unaudited)
September 30, 1995
<TABLE>
<CAPTION>
Emerging
Growth
Portfolio
---------
<S> <C>
ASSETS
Investments, at market value (Note B and C).................
Common Stock:
Emerging Growth Portfolio (cost--$5,321,729)............ $6,402,945
Short-Term Obligations--at amortized cost which
approximates market value................................ 689,759
----------
Total Investments..................................... 7,092,704
Cash...................................................... 174,240
Accrued Investment income................................. 326
Receivable for portfolio securities sold.................. 713,048
Receivable from Chubb Life Insurance Company of America... 35,737
----------
Total Assets.......................................... 8,016,055
LIABILITIES
Payable for portfolio securities purchased................ 914,153
Accrued investment advisory fees (Note D)................. 4,037
Accrued custody fees...................................... 5,995
Payable to Chubb America Service Corp..................... 1,455
----------
Total Liabilities..................................... 925,640
----------
NET ASSETS.................................................. $7,090,415
==========
NET ASSETS CONSIST OF:
Capital paid in........................................... $6,022,903
Accumulated net investment loss........................... (15,227)
Accumulated net realized gain from investments............ 1,523
Net unrealized gain on investments........................ 1,081,216
----------
NET ASSETS.................................................. $7,090,415
==========
Shares of common stock outstanding (no par value,
100,000,000 shares authorized)............................ 553,018
----------
Net asset value, offering and redemption price per share.... $ 12.82
==========
</TABLE>
See notes to financial statements.
<PAGE>
CHUBB AMERICA FUND, INC.
STATEMENT OF OPERATIONS--(Unaudited)
For the Period from May 1, 1995 to September 30, 1995
<TABLE>
<CAPTION>
Emerging
Growth
Portfolio
---------
<S> <C>
INVESTMENT INCOME
Income
Interest................................. $ 16,404
Dividends................................ 377
----------
Total investment
Income................................ 16,781
Expenses:
Advisory fees (Note D)..................... 14,962
Custodian fees............................. 10,007
Shareholder reports........................ 671
Professional fees.......................... 607
Insurance expenses......................... 148
Security valuation......................... 4,443
Miscellaneous expenses..................... 1,170
----------
Total expenses........................... 32,008
----------
Net investment loss...................... (15,227)
----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments........... 1,523
Net unrealized gain on investments......... 1,081,216
----------
Net realized and unrealized gain
on investments.......................... 1,082,739
----------
Net increase in net assets
resulting from operations................. $1,067,512
==========
</TABLE>
See notes to financial statements.
<PAGE>
CHUBB AMERICA FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
For the Period from May 1, 1995 to September 30, 1995
<TABLE>
<CAPTION>
Emerging Growth
Portfolio
---------------
<S> <C>
Increase (decrease) in net assets:
From operations:
Net investment loss..................................... $ (15,227)
Net realized gain on investments........................ 1,523
Net unrealized gain on investments...................... 1,081,216
----------
Net increase in net assets resulting from operations.... 1,067,512
Increase in net assets derived
from shareholder transactions (Note E)................... 6,022,903
----------
Net increase in net assets.............................. 7,090,415
Net Assets:
Beginning of period..................................... 0
End of period (1)....................................... $7,090,415
----------
(1) Including accumulated
net investment loss..................................... $ (15,227)
==========
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
CHUBB AMERICA FUND, INC.
September 30, 1995
NOTE A--ORGANIZATION
Chubb America Fund, Inc. (the "Company") is a diversified open-end series
management investment company registered under the Investment Company Act of
1940, as amended. The Company was incorporated under the laws of the State of
Maryland on October 19, 1984 for the purpose of funding Flexible Premium
Variable Life Insurance Policies issued by Chubb Life Insurance Company of
America ("Chubb Life"). The Company is composed of nine separate portfolios
(the "Portfolios"): the World Growth Stock Portfolio, the Money Market
Portfolio, the Gold Stock Portfolio, the Domestic Growth Stock Portfolio, the
Bond Portfolio, the Growth and Income Portfolio, the Capital Growth Portfolio,
the Balanced Portfolio and the Emerging Growth Portfolio. Chubb Life's ownership
in the Emerging Growth Portfolio as of September 30, 1995 is as follows:
<TABLE>
<CAPTION>
Percentage of
Portfolio Shares Owned Shares Outstanding
<S> <C> <C>
Emerging Growth................ 300,001 54.25%
</TABLE>
NOTE B--SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments: Investment securities are valued at the closing sales
price on the exchange on which such securities are principally traded;
securities traded in the over-the-counter market and securities traded on a
national exchange for which no sales took place on the day of valuation are
valued at the mean of the bid and ask prices at the close of trading. Quotations
for foreign securities are in United States dollars and accordingly, unrealized
gains and losses on these securities reflect all foreign exchange fluctuations.
Restricted securities are valued at fair value as determined in good faith by
the Board of Directors. Short-term debt instruments with a remaining maturity of
60 days or less are valued at amortized cost, which approximates market value.
Investment Security Transactions: Investment security transactions are recorded
as of the trade date, the date the order to buy or sell is executed. Dividend
income is recorded on the ex-dividend date. Interest income is recorded on the
accrual basis.
Distributions to Shareholders: Distributions to shareholders from ordinary
income and net realized capital gains are declared and distributed at least once
annually. Distributions to shareholders are recorded on the ex-dividend date.
The Company distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the financial
statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as dividends
in excess of net investment income or accumulated net realized gains.
Federal Income Taxes: It is the policy of the Company for the Portfolio to
continue to qualify as a regulated investment company by complying with the
requirements of the Internal Revenue Code applicable to regulated investment
companies, and by distributing all of its ordinary income and net realized
capital gains. Therefore, no Federal tax provision is required.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
CHUBB AMERICA FUND, INC.
September 30, 1995
NOTE C--INVESTMENTS
Net realized gains and losses on investment securities sold are determined by
using the first-in, first-out method. The aggregate cost of investments owned
for Federal income tax purposes is the same as for financial reporting purposes.
As of September 30, 1995, gross unrealized gains and losses were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Unrealized Unrealized Unrealized
Gains Losses Gain
---------- ---------- ----------
<S> <C> <C> <C>
Emerging Growth Portfolio......... $1,132,207 $50,991 $1,081,216
</TABLE>
Purchases and sales of investment securities for the period ended September 30,
1995, other than short-term obligations, were as follows:
<TABLE>
<CAPTION>
Proceeds
Cost of from
Investment Investment
Securities Securities
Purchased Sold
---------- ----------
<S> <C> <C>
Emerging Growth Portfolio.......... $5,660,187 $339,981
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
CHUBB AMERICA FUND, INC.
September 30, 1995
Note D--INVESTMENT ADVISORY FEES AND MANAGEMENT AGREEMENT
The Company has entered into an investment management agreement with Chubb
Investment Advisory Corporation, a wholly-owned subsidiary of Chubb Life. Under
the agreement, Chubb Investment Advisory Corporation provides investment
management and certain administrative services for the Company. Chubb Investment
Advisory Corporation has, in turn, retained MFS Asset Management Group to
provide investment advisory services for the Emerging Growth Portfolio. For its
investment management and administrative services, Chubb Investment Advisory
Corporation is paid an annual fee through a daily charge based on a percentage
of the average daily net asset value of the Portfolio as shown below:
<TABLE>
<CAPTION>
First Next Over
$200 $1.1 $1.3
Million Billion Billion
------- ------- -------
<S> <C> <C> <C>
Emerging Growth Portfolio .80% .75% .70%
</TABLE>
NOTE E--SHAREHOLDERS' TRANSACTIONS
Following is a summary of transactions with shareholders for each Portfolio.
<TABLE>
<CAPTION>
Emerging Growth Portfolio*
------------------------------------
For Period from May 1, 1995
to September 30, 1995
----------------------------
Shares Dollars
-------- ----------
<S> <C> <C>
Shares issued........................... 553,367 $ 6,027,398
Shares issued as reinvestment of
dividends.............................
Shares redeemed......................... (349) (4,495)
------- -----------
Net increase........................ 553,018 $ 6,022,903
======= ===========
</TABLE>
*Inception Date--May 1, 1995
<PAGE>
CHUBB AMERICA FUND, INC.
FINANCIAL HIGHLIGHTS--Unaudited
For a share outstanding throughout the period:
<TABLE>
<CAPTION>
Emerging Growth Portfolio
-------------------------
(Unaudited)
Period From
May 1,
1995 to
September
30, 1995(A)
-------------
<S> <C>
Net asset value, beginning of
period............................ $ 10.00
Income From Investment
Operations
Net investment loss............. (0.03)
Net realized and unrealized
gains (losses) on
securities..................... 2.85
-----------
Total from investment
operations.................... 2.82
-----------
Net asset value, end of period.. $ 12.82
============
Total Return (B)................ 28.21%(D)
Ratios to Average Net Assets:
Expenses...................... 1.68%(C)
Net investment loss........... (0.80%)(C)
Portfolio Turnover Rate......... 7.60%(D)
Net Assets, At End of Period.... $7,090,415
</TABLE>
(A) Per share data calculated from the initial offering date, May 1, 1995, for
sale to Chubb Separate Account A.
(B) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of account fees and charges that apply to the
separate account of related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth more
or less than the original cost.
(C) Per share data and ratios calculated on an annualized basis.
(D) Not Annualized.
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
WORLD GROWTH STOCK PORTFOLIO
December 31, 1994
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- ------ --------
<S> <C> <C>
COMMON STOCK-83.68%
Advertising, Broadcast & Publishing-0.87%
Nedlloyd Groep, NLG10, ORD 14,000 $ 459,052
----------
Aerospace Equipment-1.12%
British Aerospace, ORD 88,889 594,507
----------
Banking-4.62%
Banco Popular Espanol, ORD 5,000 594,469
Banco Portugues De Investimento, ORD 17,000 253,718
Barclays PLC, ADR 7,000 267,750
Credit Foncier De France, ORD 3,000 432,845
National Australia Bank Ltd., ADR. 11,307 457,923
National Bank of Canada, ORD 65,000 440,226
----------
2,446,931
----------
Beverages-1.13%
Embotelladora Andina S.A., ADR 23,000 600,875
----------
Building & Construction-3.06%
Corcemar Corp., ORD, B Shares+ 65,000 428,968
Perini Corporation+ 30,000 281,250
Sociedade Construcos Soares De Costa, ORD, NEW 11,100 211,949
Sociedade Construcos Soares De Costa, ORD 37,000 697,235
----------
1,619,402
----------
Building & Real Estate-0.56%
Wereldhave, NV, ORD 5,200 294,863
----------
Building Materials-4.84%
Enso-Gutzeit Oy, ORD 65,000 558,175
Masco Corporation 16,400 371,050
Owens-Corning Fiberglass Corp.+ 10,000 320,000
Pioneer International Ltd., ADR 200,000 496,400
Pioneer International Ltd., ORD 195,000 484,010
Skane-Gripen, AB., ORD 33,000 332,924
----------
2,562,559
----------
Business & Public Services-3.07%
Oce Van Der Grinten, NV, ORD 20,500 917,902
Rhoen Klinikum, ORD 840 704,509
----------
1,622,411
----------
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- ------ --------
<S> <C> <C>
Chemicals-3.88%
BASF AG, ORD 2,400 $ 488,201
Bayer, ADR 20,000 463,218
Desc Fomento, ORD, Series C 27,027 153,105
Solvay S.A., ORD 1,100 523,562
Vitro S.A., ORD 90,000 423,954
----------
2,052,040
----------
Communication Systems-4.64%
Cable & Wireless, Pub. Ltd. Co., ADR 22,000 385,000
Compania de Telefon De Chile, S.A., ADR. 9,000 708,750
MCI Communications Corp 36,000 661,500
Telefonica de Espana, ADR 20,000 702,500
----------
2,457,750
----------
Electronics-3.05%
Great Wall Electronics Ltd., ORD 720,000 56,736
Hitachi Ltd., ORD 100,000 991,270
Sony Corporation, ORD 10,000 566,302
----------
1,614,308
----------
Energy Sources-2.07%
Royal Dutch Petroleum Co., Ltd., ADR. 5,000 537,500
Total Petroles, ORD 9,600 557,998
----------
1,095,498
----------
Engineering-2.98%
Danieli & C Officine Meccaniche, ORD 180,000 643,536
Empresa ICA Sociedad Controladora S.A., ADR 21,000 325,500
IHC Caland, ORD 24,000 607,152
----------
1,576,188
----------
Entertainment & Leisure-0.90%
Kuoni, ORD 17 474,149
----------
Financial Services-4.17%
Brierley Investments Ltd., ORD 525,000 379,732
Chile Fund, Inc. 11,570 533,666
Invesco Mim, ORD 200,000 513,140
Rhone-Poulenc, ORD 7,800 181,086
Thailand International Fund+ 12 360,000
The Turkey Trust, PLC, ORD 73,000 237,549
----------
2,205,173
----------
</TABLE>
See notes to financial statements.
1
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
WORLD GROWTH STOCK PORTFOLIO-(Continued)
December 31, 1994
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-Continued
Food & Household Products-0.91%
Ares-Serono S.A., ORD 875 $ 480,739
----------
Forest Products & Paper-9.10%
Boise Cascade Corp. 19,000 508,250
Bowater, Inc. 21,000 559,125
Burlington Northern, Inc. 8,500 409,062
Carter Holt Harvey, Ltd., ORD 279,251 572,018
Fletcher Challenge Ltd. Forestry Division, ORD 360,000 430,920
International Paper Company 12,500 942,188
James River Corp., of Virginia 22,000 445,500
Tampella AB, 144A, ORD 120,000 354,456
Valmet Oy, FIM20, ORD 20,000 380,206
Vital Forsikring AS, ORD 20,000 212,890
----------
4,814,615
----------
Health & Personal Care-2.64%
Glaxo Holdings Corp., ADR 20,000 407,500
Nationwide Health Properties 12,000 429,000
Roche Holdings Genusscheine, ORD 2 9,682
Smithkline Beecham, PLC, ADR 16,000 548,000
----------
1,394,182
----------
Industrial Machines, Engines-3.29%
Celsius Industrier, AB, ORD 19,000 421,707
Internatio-Mueller, NV, ORD 10,000 530,163
SKF, ORD 48,000 790,949
----------
1,742,819
----------
Insurance-3.07%
National Mutual Asia Ltd., ORD 750,000 494,325
Swiss Reinsurance, Zurich, BR, SZF100, ORD 1,650 996,056
Swiss Reinsurance, Reg., SWF20, ORD 220 132,639
----------
1,623,020
----------
International, Oil-0.57%
YPF Sociedad Anonima S.A., ADR 14,000 299,250
----------
Manufacturing-0.96%
Pechiney International, S.A., FRF100, ORD 17,000 509,669
----------
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
Merchandising-0.79%
Limited, Inc. 23,000 $ 416,875
----------
Mining & Metals-6.57%
DeBeers/Centenary Linked Units, ADR 22,000 514,250
Industrius Penoles S.A., New Star CP, ORD+ 313,300 828,240
Metall Mining Corp., ORD+ 51,000 436,305
Oregon Steel Mills, Incorporated 14,000 218,750
Sociedad Quimica Y Minera De Chile, ADR 16,000 466,000
Tesco, PLC, ORD 140,000 545,384
Union Miniere, NPV, ORD 6,000 465,597
----------
3,474,526
----------
Multi-Industries-2.46%
Desc Sociedad De Fomento Industrial, ORD 100,000 507,610
Jardine Matheson Holdings, ADR. 111,600 796,913
----------
1,304,523
----------
Office & Business Equipment-1.94%
Buderus AG Lahn-Wetzlar, ORD 2,400 1,028,892
----------
Oil Drilling-0.45%
Parker Drilling Company+ 50,000 237,500
----------
Pharmaceuticals-2.57%
Astra AB, B Free, ORD 34,500 879,429
Pharmacia AB, B Free, SEK25, ORD 30,000 478,203
----------
1,357,632
----------
Pollution Control-0.52%
WMX Technologies Incorporated 10,500 275,625
----------
Retail-0.90%
Karstadt AG, DEM50, ORD 1,300 473,866
----------
Shipping-2.08%
Bergesen "B", ORD 20,000 484,918
Transportation Maritima, S.A., ORD. 45,000 278,676
Unitor Ships Service, ORD 20,000 337,076
----------
1,100,670
----------
</TABLE>
See notes to financial statements.
2
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
WORLD GROWTH STOCK PORTFOLIO-(Continued)
December 31, 1994
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- ------- -----------
<S> <C> <C>
COMMON STOCK-Continued
Textiles & Apparel-0.78%
Liz Clairborne, Inc 24,500 $ 413,438
-----------
Transportation-1.00%
Frans Maas Groep, CVA, NLG10, ORD 17,000 529,009
-----------
Utilities, Electric & Gas-2.12%
Alcatel Alsthom CG, ORD 4,079 348,529
Empresa Nacional De Electricidad, ADR 10,000 405,000
Shandong Huaneng Power, ADR+ 38,000 365,750
-----------
1,119,279
-----------
TOTAL COMMON STOCK (Cost $38,208,159) 44,271,835
-----------
PREFERRED STOCK-2.47%
Banking-0.83%
ANZ Banking Co., PFD., ORD 2,000 175,298
Wells Fargo & Co., PFD., Series B. 6,270 261,773
-----------
437,071
-----------
Beverages-0.33%
Dairy Farm International Holding Ltd., 6.500%,
Cumulative Convertible+ 210,000 175,875
-----------
Building Materials-0.66%
Kaufman & Broad Home Corp., PFD. 26,000 347,750
-----------
Financial Services-0.65%
Bangkok Investments Co., Ltd., PFD. 2,500 344,975
-----------
TOTAL PREFERRED STOCK (Cost $1,335,875) 1,305,671
-----------
<CAPTION>
Market
Principal Value
Company Value (Note B)
- ------- --------- -----------
<S> <C> <C>
CORPORATE BONDS-2.49%
News Corp Zero Convertibles, due 03/31/02 $ 459,000 $ 328,185
P T Inti Indorayon Utama, Conv., 5.500%,
due 10/01/02 70,000 79,100
Softe, S.A., CNV, 4.250%, due 07/30/98 ITL805,000,000 516,810
TNT Pacific Finance Conv., 9.000%,
due 07/27/98 AUD550,000 391,149
-----------
TOTAL CORPORATE BONDS (Cost $1,298,454) 1,315,244
-----------
SHORT-TERM OBLIGATIONS-15.29%
U.S. Treasury Bill, 4.965%, due 01/19/95 1,000,000 997,380
U.S. Treasury Bill, 5.080%, due 01/19/95 770,000 767,935
U.S. Treasury Bill, 5.340%, due 02/16/95 500,000 496,514
U.S. Treasury Bill, 5.540%, due 03/09/95 3,900,000 3,861,480
U.S. Treasury Bill, 5.295%, due 04/13/95 2,000,000 1,967,832
-----------
TOTAL SHORT-TERM OBLIGATIONS (Cost $8,090,719) 8,091,141
-----------
TOTAL INVESTMENTS (Cost $48,933,207*) 103.93% 54,983,891
Other assets, less liabilities (3.93) (2,080,123)
--------- -----------
TOTAL NET ASSETS 100.00% $52,903,768
========= ===========
</TABLE>
- --------------
* Aggregate cost for Federal income tax purposes.
+ Non-income producing security.
See notes to financial statements.
3
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
MONEY MARKET PORTFOLIO
December 31, 1994
<TABLE>
<CAPTION>
Market
Principal Value
Value (Note B)
----------- ----------
<S> <C> <C>
SHORT-TERM OBLIGATIONS-100.43%
U.S. Treasury Bill, 5.050%, due 01/19/94 $2,825,000 $2,817,471
U.S. Treasury Bill, 5.320%, due 02/02/95 3,125,000 3,109,760
U.S. Treasury Bill, 4.830%, due 02/09/95 1,800,000 1,790,340
----------
TOTAL SHORT-TERM OBLIGATIONS (Cost $7,717,571) 7,717,571
----------
TOTAL INVESTMENTS (Cost $7,717,571*) 100.48% 7,717,571
Other assets, less liabilities (0.48) (37,086)
------- ----------
TOTAL NET ASSETS 100.00% $7,680,485
======= ==========
</TABLE>
- --------------
*Aggregate cost for Federal income tax purposes.
See notes to financial statements.
4
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
GOLD STOCK PORTFOLIO
December 31, 1994
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-97.09%
Australia-14.23%
Acacia Resources Ltd+ 45,000 $ 82,021
Australian Resources Ltd., ORD 70,000 89,586
Herald Resources Ltd. 20,500 16,377
Mount Burgess Gold Mining Co., N.L., ORD+ 100,000 14,730
Newcrest Mining Ltd., ORD. 100,000 446,000
Placer Pacific Ltd., ORD 33,300 92,984
Plutonic Resources Ltd., ORD 20,000 88,424
Samantha Gold N.L., ORD 39,286 89,890
Sons of Gwalia N.L., ADR 5,000 90,170
Wiluna Mines, ORD 40,000 35,680
----------
1,045,862
----------
Canada-43.57%
American Barrick Resources Corp. 36,125 803,781
Audrey Resources Ltd., Inc.+ 51,000 43,630
Bolivar Goldfields Ltd.+ 18,000 30,283
Bolivar Goldfields Ltd., Warrants (exp. 4/20/95)+(A) 9,000 0
Dayton Mining Corporation+ 75,000 216,548
Dayton Mining Corporation, Warrants (exp. 5/3/95)+(A) 12,500 0
Echo Bay Mines, Ltd. 17,000 180,625
El Callao Mining Corp., ORD. 41,000 39,458
Glamis Gold, Ltd. 15,000 131,250
Hemlo Gold Mines, Inc. 33,874 342,974
Miramar Mining Corp.+ 30,000 128,325
Miramar Mining Corp., Warrants (exp. 10/12/95)+(A) 12,500 0
Placer Dome, Inc. 20,000 435,000
Prime Resources Group, Inc.+ 15,000 108,275
Rayrock Yellowknife+ 5,000 59,261
Solitario Resources Corp.+ 30,000 22,029
Teck Corp., Class B. 6,000 108,542
Texas Star Resources Corp.+ 45,000 15,075
Treminco Resources Ltd.+ 100,000 19,240
TVX Gold, Inc.+ 60,000 405,000
Viceroy Resources Corp.+ 20,000 114,066
----------
3,203,362
----------
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
United States-39.29%
Ashanti Goldfields Company Ltd., 144A+ 15,000 $ 327,188
Battle Mountain Gold Co., Inc. 40,000 440,000
Coeur D'Alene Mines Corp. 6,000 98,250
Crown Resources Corporation+ 20,000 82,500
FMC Gold Company 20,000 67,500
Freeport McMoran Copper & Gold, Inc. 27,000 573,750
Hecla Mining Co.+ 10,000 101,250
Homestake Mining Company 17,800 304,825
Newmont Gold Company 6,000 213,750
Newmont Mining Corporation 6,999 251,964
Santa Fe Pacific Gold Corp.+ 10,000 128,750
Stillwater Mining Company+ 10,000 136,250
USMX, Inc.+ 65,000 162,500
----------
2,888,477
----------
TOTAL COMMON STOCK (Cost $5,692,063) 7,137,701
----------
<CAPTION>
Principal
Value
---------
SHORT-TERM OBLIGATIONS-3.38%
U.S. Treasury Bill, 4.300%, due 02/09/95 $150,000 149,283
U.S. Treasury Bill, 5.350%, due 03/09/95 100,000 99,013
----------
TOTAL SHORT-TERM OBLIGATIONS (Cost $248,273) 248,296
----------
TOTAL INVESTMENTS (Cost $5,940,336*) 100.47% 7,385,997
Other assets, less liabilities (0.47) (34,372)
--------- ----------
TOTAL NET ASSETS 100.00% $7,351,625
========= ==========
</TABLE>
- --------------
* Aggregate cost for Federal income tax purposes.
+ Non-income producing security.
(A) Restricted security, valued at fair value (Notes B and F).
See notes to financial statements.
5
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DOMESTIC GROWTH STOCK PORTFOLIO
December 31, 1994
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-96.04%
Aerospace Equipment-1.39%
Sunstrand Corporation 9,600 $ 436,800
----------
Apparel-0.92%
Cato Corp 40,000 290,000
----------
Auto Parts and Accessories-1.24%
HI-LO Automotive, Inc.+ 40,000 390,000
----------
Banking-5.57%
Bay View Capital Corporation 24,900 473,100
Meridian Bancorp, Inc. 14,300 380,738
TIG Holdings 32,000 600,000
Transamerica Corporation 6,000 298,500
----------
1,752,338
----------
Chemicals-6.64%
Cambrex Corporation 27,700 720,200
Ferro Corp. 12,750 304,406
Furon Corp. 30,000 660,000
Loctite Corp. 5,000 232,500
Specialty Chemical Resources,Inc.+ 57,200 171,600
----------
2,088,706
----------
Communications -- Systems-1.75%
Intervoice, Inc.+ 40,000 550,000
----------
Computer & Office Equipment-2.69%
Data General Corporation+ 60,000 600,000
Smith Corona Corp 98,100 245,250
----------
845,250
----------
Computer Software/Services-3.46%
Banctec, Inc.+ 28,000 609,000
Phamis Inc.+ 26,700 480,600
----------
1,089,600
----------
Consumer Products-2.15%
American Greetings Corporation 25,000 675,000
----------
Drug and Hospital Supplies-3.48%
National Medical Enterprises+ 50,000 706,250
PCI Services, Inc.+ 60,000 390,000
----------
1,096,250
----------
</TABLE>
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
Electronics-3.34%
Instrument Systems Corp.+ 65,000 $ 544,375
Whittaker Corporation+ 25,000 506,250
----------
1,050,625
----------
Financial Services-2.07%
Student Loan Marketing Association 20,000 650,000
----------
Furnishings & Appliances-1.81%
Kimball International Inc., Class B 11,200 291,200
Shelby Williams Industries, Inc. 33,400 279,725
----------
570,925
----------
Health & Personal Care-9.24%
Allied Healthcare Products, Inc. 32,000 528,000
Bergen Brunswig Corp., Class A 29,950 625,206
Healthdyne Tech, Inc.+ 66,666 674,993
IBP Incorporated 7,900 238,975
Integrated Health Services, Inc.+ 21,200 837,400
----------
2,904,574
----------
Insurance-4.84%
American Bankers, Inc. 30,000 720,000
Citizens Corporation 25,000 425,000
Unum Corporation 10,000 377,500
----------
1,522,500
----------
Leisure & Entertainment-2.03%
Club Car, Inc.+ 38,700 638,550
----------
Machinery-5.70%
Duriron, Inc. 17,500 310,625
Lamson & Sessions, Inc.+ 88,200 529,200
N.N. Ball & Roller, Inc. 32,000 608,000
Simpson Industries, Inc. 37,500 346,875
----------
1,794,700
----------
Manufacturing-1.59%
Paragon Trade Brands, Inc.+ 37,800 500,850
----------
Merchandising-1.03%
Pier 1 Imports, Inc. 34,482 323,269
----------
Mining & Metals-3.23%
A.M. Castle & Co. 38,550 534,881
Roanoke Electric Steel Corp. 29,700 482,625
----------
1,017,506
----------
</TABLE>
See notes to financial statements.
6
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DOMESTIC GROWTH STOCK PORTFOLIO--(Continued)
December 31, 1994
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-Continued
Miscellaneous Industries-5.46%
ABM Industries, Inc. 22,000 $ 511,500
Alco Standard Corp.+ 7,200 451,800
Farrel Corporation 22,000 121,000
Sun Healthcare Group, Inc.+ 25,000 634,375
-----------
1,718,675
-----------
Paper-0.95%
Potlatch Corporation 8,000 298,000
-----------
Real Estate-0.15%
Factory Stores of America 2,200 47,575
-----------
Retail Stores-5.32%
Caldor, Inc.+ 20,000 445,000
Catherines Stores Company+ 34,000 297,500
Consolidated Stores Corp.+ 35,000 651,875
Designs, Inc.+ 40,000 280,000
-----------
1,674,375
-----------
Shipping-5.84%
Airborne Freight Corp. 30,000 615,000
American President Companies 20,000 505,000
Yellow Corp. 30,000 716,250
-----------
1,836,250
-----------
</TABLE>
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
Software Development-4.89%
Banyan Systems, Inc.+ 30,000 $ 536,250
Dataflex Corporation+ 56,000 497,000
Marcam Corp.+ 50,000 506,250
-----------
1,539,500
-----------
Textiles & Shoes-5.81%
Lacrosse Footwear, Inc. 30,000 330,000
Nine West Group, Inc.+ 25,000 709,375
Vans, Inc.+ 100,000 787,500
-----------
1,826,875
-----------
Utilities, Electric & Gas-3.45%
Acme Electric Corp.+ 50,900 648,975
Enterra Corporation+ 23,000 437,000
-----------
1,085,975
-----------
TOTAL COMMON STOCK (Cost $26,381,402) 30,214,668
-----------
TOTAL INVESTMENTS (Cost $26,381,402*) 96.04% 30,214,668
Other assets, less liabilities 3.96 1,243,998
------- -----------
TOTAL NET ASSETS 100.00% $31,458,666
======= ===========
</TABLE>
- --------------
* Aggregate cost for Federal income tax purposes.
+ Non-income producing security.
See notes to financial statements.
7
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
BOND PORTFOLIO
December 31, 1994
<TABLE>
<CAPTION>
Market
Principal Value
Company Value (Note B)
- ------- ---------- -----------
<S> <C> <C>
U.S. GOVERNMENT AND
AGENCY OBLIGATIONS-101.50%
FHLMC, #C80090, 6.000%, due 01/01/24 $ 600,471 $ 511,643
FNMA, 9.550%, due 09/10/97 55,000 57,200
FNMA, CMO, #8829B, 9.500%, due 12/25/18 107,106 108,541
FNMA, Pool #248672, 6.000%, due 12/01/23 191,214 162,352
FNMA, Pool #261605, 6.000%, due 01/01/24 821,603 697,592
FNMA, Pool #267376, 6.000%, due 01/01/24 193,905 164,637
GNMA, Pool #190666, 9.000%, due 12/15/16 107,578 108,520
U.S. Treasury Note, 5.375%, due 05/31/98 4,995,000 4,631,294
U.S. Treasury Note, 7.500%, due 10/31/99 750,000 739,452
U.S. Treasury Note, 7.750%, due 11/30/99 5,650,000 5,628,813
U.S. Treasury Note, 6.250%, due 02/15/03 500,000 452,031
-----------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $13,631,808) 13,262,075
-----------
<CAPTION>
Market
Principal Value
Company Value (Note B)
- ------- ---------- -----------
<S> <C> <C>
CORPORATE BONDS-0.38%
Corning Glass, 8.250%, due 03/15/02 $ 50,000 $ 49,372
-----------
TOTAL CORPORATE BONDS (Cost $48,272) 49,372
-----------
TOTAL INVESTMENTS (Cost $13,680,080*) 101.88% 13,311,447
Other assets, less liabilities (1.88) (245,002)
---------- -----------
TOTAL NET ASSETS 100.00% $13,066,445
========== ===========
</TABLE>
- --------------
* Aggregate cost for Federal income tax purposes.
See notes to financial statements.
8
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
GROWTH AND INCOME PORTFOLIO
December 31, 1994
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-97.46%
Aerospace, Defense-1.75%
Boeing Company 2,100 $ 98,175
----------
Appliances-3.05%
Whirlpool Corp. 3,400 170,850
----------
Automobiles-5.87%
Chrysler Corporation 3,300 161,700
General Motors Corporation, Class H 4,800 167,400
----------
329,100
----------
Banks-15.04%
First Chicago Corp. 3,500 167,125
First Federal Michigan Corp. 8,100 166,050
Fleet Mortgage Group, Inc. 9,700 192,788
KeyCorp. 6,533 163,325
Mellon Bank Corp. 5,050 154,656
----------
843,944
----------
Beverages-2.27%
Anheuser Busch Companies, Inc. 2,500 127,187
----------
Building, Homes-2.76%
Toll Brothers+ 15,700 155,037
----------
Building Materials-3.25%
Owens-Corning Fiberglass Corp.+ 5,700 182,400
----------
Capital Goods, Truck-3.23%
Cummins Engine, Inc. 4,000 181,000
----------
Computers-2.89%
Compaq Computer Corp. 4,100 161,950
----------
Consumer Health-8.65%
American Home Products, Inc. 2,500 156,875
Baxter International, Inc. 5,300 149,725
National Health Labs Holdings, Inc. 13,500 178,875
----------
485,475
----------
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
Consumer Photography-2.49%
Polaroid Corp. 4,300 $ 139,750
----------
Electronics, Defense-2.75%
E-Systems, Inc. 3,700 154,013
----------
Financial Services-4.84%
Merrill Lynch 4,200 150,150
Paine Webber Group, Inc. 8,100 121,500
----------
271,650
----------
Food, Processing-2.56%
Philip Morris Companies, Inc. 2,500 143,750
----------
Insurance-8.75%
Old Republic International Corp. 8,500 180,625
Progressive Corp. 4,900 171,500
Berkley Corp. 3,700 138,750
----------
490,875
----------
Mining and Metals-2.70%
Inco, Ltd. 5,300 151,713
----------
Oil, Domestic-0.59%
Tenneco, Inc. 776 32,980
----------
Oil, International-2.60%
Exxon Corporation 2,400 145,800
----------
Oil, Refining-2.50%
Ultramar Corp. 5,500 140,250
----------
Retail, Speciality-2.77%
Sotheby's Holdings, Inc. 13,500 155,250
----------
Retail Stores-2.69%
K Mart Corporation 11,600 150,800
----------
Technology, Semiconductors-3.03%
Avnet, Inc. 4,600 170,200
----------
</TABLE>
See notes to financial statements.
9
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
GROWTH AND INCOME PORTFOLIO-(Continued)
December 31, 1994
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK--Continued
Telephone-2.18%
Telefonos de Mexico, S.A., ADR 3,000 $ 123,000
----------
Textiles-2.83%
Burlington Industries, Inc.+ 16,100 158,987
----------
Transportation, Rail & Truck-2.66%
Burlington Northern, Inc. 3,100 149,188
----------
Transportation, Shipping-2.76%
Offshore Logistics+ 11,900 154,700
----------
TOTAL COMMON STOCK (Cost $5,595,367) 5,468,024
----------
<CAPTION>
Market
Value
Company (Note B)
- ------- ----------
<S> <C> <C>
TOTAL INVESTMENTS (Cost $5,595,367*) 97.46% $5,468,024
Other assets, less liabilities 2.54 142,448
------- ----------
TOTAL NET ASSETS 100.00% $5,610,472
======= ==========
</TABLE>
- --------------
* Aggregate cost for Federal income tax purposes.
+ Non-income producing security.
See notes to financial statements.
10
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
CAPITAL GROWTH PORTFOLIO
December 31, 1994
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK--45.99%
Advertising, Broadcast & Publ.-2.59%
British Sky Broadcasting, ADR+ 24,100 $ 578,400
Central European Media Center+ 9,750 136,500
----------
714,900
----------
Appliances-0.56%
The Singer Company, N.V., ADR 5,150 153,856
----------
Automotive Parts-0.83%
Finishmaster, Inc.+ 24,950 227,669
----------
Banking-0.58%
First Empire State Corporation 1,175 159,800
----------
Beverages-1.69%
Dr. Pepper/Seven Up Companies, Inc.+ 6,480 166,050
Panamerican Beverage Inc., Class A 9,515 300,912
----------
466,962
----------
Communication Systems-6.12%
Millicom International Cellular, S.A., ADR+ 26,050 784,756
Motorola Inc. 4,925 285,034
Paging Network, Inc.+ 18,125 616,250
----------
1,686,040
----------
Consumer Products-1.06%
Dial Corporation 1,350 28,688
Industrie Natuzzi SPA, ADR 7,750 263,500
----------
292,188
----------
Financial Services-13.28%
APS Holdings, Inc.+ 12,975 366,544
Citicorp 15,875 656,828
Espirito Santo Financial, ADR 17,675 236,403
Grupo Financiero Inbursa "C", ORD+ 75,140 195,281
Grupo Financiero Serfin, ADR+ 775 5,813
Household International, Inc. 13,025 483,553
Kinnevik AB, ORD, Class B Free 43,300 1,432,832
World Acceptance Corp.+ 12,000 282,000
----------
3,659,254
----------
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
Hardware Stores-0.44%
Orchard Supply Hardware Stores+ 16,125 $ 120,937
----------
Health & Personal Care-0.14%
Dentsply International, Inc. 1,200 37,800
----------
Lodging & Restaurant-0.55%
Davco Restaurants, Inc.+ 12,300 150,675
----------
Media-2.11%
Heritage Media Corp. Class A+ 16,525 444,109
Scandinavian Broadcasting System+ 6,725 137,863
----------
581,972
----------
Multi-Industries-0.84%
Newell Company 11,100 233,100
----------
Pharmaceuticals-3.58%
Pfizer, Inc. 3,525 272,306
R.P. Scherer Corp.+ 15,750 714,656
----------
986,962
----------
Publishing-2.26%
Wolters Klower, CVA, ORD 3,118 230,708
Wolters Kluwer, NV, ADR 5,300 392,159
----------
622,867
----------
Retail Stores-4.36%
Carrefour Supermarche, ORD 603 249,932
Cato Corporation, Class A 26,200 189,950
Federated Department Stores+ 14,450 278,163
Filene's Basement Corp.+ 2,200 10,175
Lowe's Companies, Inc. 7,875 273,656
Wal Mart Stores, Inc. 9,375 199,219
----------
1,201,095
----------
Software Products & Services-2.37%
First Data Corp. 10,075 477,303
General Motors Corp. Class E 4,600 177,100
----------
654,403
----------
</TABLE>
See notes to financial statements.
11
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
CAPITAL GROWTH PORTFOLIO-(Continued)
December 31, 1994
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- -----------
<S> <C> <C>
COMMON STOCK--Continued
Steel-1.82%
AK Steel Holding Corp.+ 16,350 $ 502,763
-----------
Textiles & Apparel-0.81%
Gap Incorporated 7,375 224,937
-----------
TOTAL COMMON STOCK (Cost $11,709,962) 12,678,180
-----------
<CAPTION>
Market
Principal Value
Company Value (Note B)
- ------- ---------- -----------
<S> <C> <C>
SHORT-TERM OBLIGATIONS-5.20%
U.S. Treasury Bill, 5.620%, due 03/02/95 $1,300,000 $ 1,288,626
U.S. Treasury Bill, 5.630%, due 03/02/95 145,000 143,732
-----------
TOTAL SHORT-TERM OBLIGATIONS (Cost $1,431,238) 1,432,358
-----------
TOTAL INVESTMENTS (Cost $13,141,200*) 51.19% 14,110,538
Other assets, less liabilities 48.81 13,453,548
----- ----------
TOTAL NET ASSETS 100.00% $27,564,086
========== ===========
</TABLE>
- --------------
* Aggregate cost for Federal income tax purposes.
+ Non-income producing security.
See notes to financial statements.
12
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
BALANCED PORTFOLIO
December 31, 1994
<TABLE>
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
COMMON STOCK-33.10%
Beverages-1.23%
PepsiCo, Inc. 5,000 $ 181,250
----------
Chemicals-0.89%
Lilly, Eli & Co. 2,000 131,250
----------
Communication Systems-2.69%
American Telephone & Telegraph Company 3,200 160,800
Bell Atlantic Corporation 2,000 99,500
GTE Corp. 4,500 136,687
----------
396,987
----------
Computers-1.04%
Computer Sciences Corp. 3,000 153,000
----------
Food & Household Products-1.08%
CPC International, Inc. 3,000 159,750
----------
Health & Personal Care-4.85%
American Home Products Corp. 3,000 188,250
Bristol Myers Squibb Co. 3,000 173,625
Health Care REIT, Inc. 4,000 80,500
Nationwide Health Properties 3,500 125,125
Schering Plough Corporation 2,000 148,000
----------
715,500
----------
Insurance-1.87%
American International Group, Inc. 1,500 147,000
Interpublic Group Companies, Inc. 4,000 128,500
----------
275,500
----------
Lodging & Restaurant-1.73%
Bertucci's, Inc.+ 8,000 88,000
McDonalds Corp. 5,700 166,725
----------
254,725
----------
Machines-0.53%
Thermo Electron Corp.+ 1,739 78,038
----------
Manufacturing-1.08%
Minnesota Mining & Manufacturing Co. 3,000 160,125
----------
<CAPTION>
Number Market
of Value
Company Shares (Note B)
- ------- -------- ----------
<S> <C> <C>
Merchandising-2.18%
Home Depot, Inc. 4,000 $ 184,000
Toys R Us+ 4,500 137,250
----------
321,250
----------
Misc-Industries-0.97%
Elan, PLC, ADR+ 4,000 142,500
----------
Office & Business Equipment-1.00%
Xerox Corporation 1,500 148,500
----------
Oil, International-5.35%
Amoco Corporation 3,000 177,375
Chevron Corporation 5,000 223,125
Mobil Corporation 2,500 210,625
Texaco, Inc. 3,000 179,625
----------
790,750
----------
Oil Service Equipment-1.83%
Baker Hughes, Inc. 6,500 118,625
Schlumberger Limited 3,000 151,125
----------
269,750
----------
Retail Stores-3.49%
Dillard Department Stores, Class A 5,000 133,750
May Department Stores Co. 3,000 101,250
Wal Mart Stores, Inc. 7,000 148,750
Walgreen Co. 3,000 131,250
----------
515,000
----------
Telephone-0.72%
U.S. West, Inc. 3,000 106,875
----------
Textiles & Apparel-0.57%
Nine West Group, Inc.+ 3,000 85,125
----------
TOTAL COMMON STOCK (cost $4,871,604) 4,885,875
----------
</TABLE>
See notes to financial statements.
13
<PAGE>
CHUBB AMERICA FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
BALANCED PORTFOLIO-(Continued)
December 31, 1994
<TABLE>
<CAPTION>
Market
Principal Value
Company Value (Note B)
- ------- ----------- -----------
<S> <C> <C>
U.S. GOVERNMENT and AGENCY
OBLIGATIONS-27.89%
U.S. Treasury Note, 5.500%, due 02/15/95 $ 300,000 $ 299,906
U.S. Treasury Note, 5.125%, due 11/15/95 250,000 245,703
U.S. Treasury Note, 4.750%, due 02/15/97 750,000 706,171
U.S. Treasury Note, 7.375%, due 11/15/97 150,000 148,406
U.S. Treasury Note, 6.000%, due 10/15/99 1,500,000 1,391,718
U.S. Treasury Note, 5.500%, due 04/15/00 400,000 360,624
U.S. Treasury Note, 7.250%, due 05/15/04 900,000 864,280
U.S. Treasury Bond, 6.250%, due 08/15/23 125,000 101,523
-----------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $4,326,851) 4,118,331
===========
<CAPTION>
Market
Principal Value
Company Value (Note B)
- ------- ----------- -----------
<S> <C> <C>
SHORT-TERM OBLIGATIONS-42.50%
Student Loan Marketing Assoc., 5.750%, due 01/03/95 $ 715,000 $ 714,657
Merrill Lynch, 6.000%, due 01/04/95 564,000 563,624
Du Pont E I De Nemours, 5.700%, due 01/05/95 440,000 439,652
Federal National Mtg. Assoc., 5.900%, due 01/09/95 370,000 369,454
Johnson & Johnson, 5.950%, due 01/09/95 570,000 569,152
Goldman Sachs, 5.950%, due 01/10/95 645,000 643,934
General Re, 5.950%, due 01/11/95 450,000 449,182
General Electric Capital, 5.950%, due 01/12/95 250,000 249,504
First Deposit Funding Trust, 6.000%, due 01/13/95 405,000 404,123
Ameritech Capital Funding, 5.980%, due 01/24/95 745,000 742,030
AT&T, 5.820%, due 01/30/95 110,000 109,466
Federal Farm Credit Bank, 5.830%, due 02/13/95 330,000 327,649
Abbott Labs, 6.050%, due 02/27/95 700,000 693,177
-----------
TOTAL SHORT-TERM OBLIGATIONS (Cost $6,275,604) 6,275,604
-----------
TOTAL INVESTMENTS (Cost $15,474,059*) 103.49% 15,279,810
Other assets, less liabilities (3.49) (514,957)
----------- -----------
TOTAL NET ASSETS 100.00% $14,764,853
=========== ===========
</TABLE>
- --------------
* Aggregate cost for Federal income tax purposes.
+ Non-income producing security.
See notes to financial statements.
14
<PAGE>
CHUBB AMERICA FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
<TABLE>
<CAPTION>
World
Growth Money Gold
Stock Market Stock
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Investments-at market value (Notes B and C):
Common Stock
World Growth Stock Portfolio (cost-$38,208,159) $44,271,835
Gold Stock Portfolio (cost-$5,692,063) $7,137,701
Domestic Growth Stock Portfolio (cost-$26,381,402)
Growth and Income Portfolio (cost-$5,595,367)
Capital Growth Portfolio (cost-$11,709,962)
Balanced Portfolio (cost-$4,871,604)
Preferred Stock
World Growth Stock Portfolio (cost-$1,335,875) 1,305,671
Corporate Bonds
World Growth Stock Portfolio (cost-$1,298,454) 1,315,244
Bond Portfolio (cost-$48,272)
U.S. Government and Agency Obligations
Bond Portfolio (cost-$13,631,808)
Balanced Portfolio (cost-$4,326,851)
Short-Term Obligations-at amortized cost which
approximates market value 8,091,141 $7,717,571 248,296
----------- ---------- ----------
TOTAL INVESTMENTS 54,983,891 7,717,571 7,385,997
Cash and cash equivalents 343,301 225,017 61,978
Accrued investment income 160,236 341 2,738
Receivable for portfolio securities sold 179,966 110,972
Receivable from Chubb Life Insurance Company of America 111,183 423
Deferred organization costs (Note B)
----------- ---------- ----------
TOTAL ASSETS 55,778,577 7,943,352 7,561,685
LIABILITIES
Due to Chubb Life Insurance Company of America 4,618
Dividends payable 2,838,549 259,435 50,893
Payable for portfolio securities purchased 149,265
Accrued investment advisory fees (Note D) 26,141 3,302 3,655
Accrued custody fees 9,953 130 1,304
Payable to Chubb America Service Corp. 166 325
----------- ---------- ----------
TOTAL LIABILITIES 2,874,809 262,867 210,060
----------- ---------- ----------
NET ASSETS $52,903,768 $7,680,485 $7,351,625
=========== ========== ==========
NET ASSETS CONSIST OF:
Capital paid in $47,308,621 $7,681,371 $7,415,889
Undistributed net investment income (loss)
Accumulated net realized gain (loss) from investments (886) (1,461,584)
Undistributed (dividends in excess) net realized gains from
foreign currency transactions (265) 34
Net unrealized gain (loss) on investments and translation of
assets and liabilities in foreign currencies (Note C) 6,047,699 1,445,661
Capital gain distributions required for
Federal tax purposes over amounts
recognized for financial reporting (Note C) (452,287) (48,375)
----------- ---------- ----------
NET ASSETS $52,903,768 $7,680,485 $7,351,625
=========== ========== ==========
Shares of common stock outstanding (no par value,
1,000,000,000 shares authorized) 2,783,776 749,331 452,308
=========== ========== ==========
Net asset value, offering and redemption price per share $ 19.00 $ 10.25 $ 16.25
=========== ========== ==========
</TABLE>
See notes to financial statements.
15
<PAGE>
CHUBB AMERICA FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
<TABLE>
<CAPTION>
Domestic Growth
Growth and Capital
Stock Bond Income Growth Balanced
Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments-at market value (Notes B and C):
Common Stock
World Growth Stock Portfolio (cost-$38,208,159)
Gold Stock Portfolio (cost-$5,692,063)
Domestic Growth Stock Portfolio (cost-$26,381,402) $30,214,668
Growth and Income Portfolio (cost-$5,595,367) $ 5,468,024
Capital Growth Portfolio (cost-$11,709,962) $12,678,180
Balanced Portfolio (cost-$4,871,604) $ 4,885,875
Preferred Stock
World Growth Stock Portfolio (cost-$1,335,875)
Corporate Bonds
World Growth Stock Portfolio (cost-$1,298,454) $ 49,372
Bond Portfolio (cost-$48,272)
U.S. Government and Agency Obligations
Bond Portfolio (cost-$13,631,808) 13,262,075
Balanced Portfolio (cost-$4,326,851) 4,118,331
Short-Term Obligations-at amortized cost which
approximates market value 1,432,358 6,275,604
----------- ----------- ----------- ----------- -----------
TOTAL INVESTMENTS 30,214,668 13,311,447 5,468,024 14,110,538 15,279,810
Cash and cash equivalents 2,067,801 118,553 317,268 14,096,682 2,062
Accrued investment income 25,034 98,969 14,403 49,354 67,513
Receivable for portfolio securities sold 1,221,169 107,797 355,357
Receivable from Chubb Life Insurance
Company of America 36,069 16,361 6,746 66,993 10,741
Deferred organization costs (Note B) 1,612 1,615 1,610
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS 33,564,741 13,545,330 5,808,053 28,432,979 15,717,093
LIABILITIES
Due to Chubb Life Insurance Company of America
Dividends payable 1,896,979 472,011 193,562 469,711 527,979
Payable for portfolio securities purchased 187,307 372,648 412,176
Accrued investment advisory fees (Note D) 19,517 5,385 3,494 22,202 9,193
Accrued custody fees 804 122 482 4,332 2,102
Payable to Chubb America Service Corp. 1,468 1,367 43 790
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES 2,106,075 478,885 197,581 868,893 952,240
----------- ----------- ----------- ----------- -----------
NET ASSETS $31,458,666 $13,066,445 $ 5,610,472 $27,564,086 $14,764,853
----------- ----------- ----------- ----------- -----------
NET ASSETS CONSIST OF:
Capital paid in $26,597,918 $13,664,679 $ 5,737,815 $26,708,913 $14,879,474
Undistributed net investment income (loss)
Accumulated net realized gain (loss) from
investments 1,027,482 (229,601) 79,628
Undistributed (dividends in excess) net
realized gains from foreign currency
transactions
Net unrealized gain (loss) on investments
and translation of assets and liabilities
in foreign currencies (Note C) 3,833,266 (368,633) (127,343) 969,345 (194,249)
Capital gain distributions required for
Federal tax purposes over amounts
recognized for financial reporting (Note C) (114,172)
----------- ----------- ----------- ----------- -----------
NET ASSETS $31,458,666 $13,066,445 $ 5,610,472 $27,564,086 $14,764,853
=========== =========== =========== =========== ===========
Shares of common stock outstanding (no par value,
1,000,000,000 shares authorized) 1,973,880 1,346,582 499,912 2,060,200 1,390,721
=========== =========== =========== =========== ===========
Net asset value, offering and redemption price
per share $ 15.94 $ 9.70 $ 11.22 $ 13.38 $ 10.62
=========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
16
<PAGE>
CHUBB AMERICA FUND, INC.
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994
<TABLE>
<CAPTION>
World
Growth Money Gold
Stock Market Stock
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest $ 310,616 $ 310,681 $ 25,445
Dividends 1,087,183 75,653
Foreign taxes withheld (110,531) (5,797)
----------- ----------- -----------
Total investment income 1,287,268 310,681 95,301
----------- ----------- -----------
Expenses:
Advisory fees (Note D) 377,344 39,051 60,959
Custodian fees 50,113 879 4,480
Shareholder reports 20,957 3,285 3,510
Professional fees 19,310 2,996 3,187
Insurance expense 5,399 840 879
Directors fees 2,443 380 397
Security valuation 16,806 618 4,321
Registration fees 4,389 870 274
Miscellaneous expenses 4,617 2,327 2,403
Amortization of deferred organization costs (Note B)
----------- ----------- -----------
Total expenses 501,378 51,246 80,410
----------- ----------- -----------
Net investment income 785,890 259,435 14,891
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments 2,028,789 (886) 109,276
Net realized foreign exchange gain (loss) (102,259) (2,987)
Net unrealized loss on investments (4,696,572) (507) (1,382,511)
Net unrealized gain (loss) on translation
of assets and liabilities in foreign currencies 4,667 2
----------- ----------- -----------
Net realized and unrealized gain (loss) on
investments and foreign currency (2,765,375) (1,393) (1,276,220)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations $(1,979,485) $ 258,042 $(1,261,329)
=========== =========== ===========
</TABLE>
See notes to financial statements.
17
<PAGE>
CHUBB AMERICA FUND, INC.
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994
<TABLE>
<CAPTION>
Domestic Growth
Growth and
Stock Bond Income
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest $ 40,806 $ 525,174 $ 7,608
Dividends 411,107 105,965
Foreign taxes withheld (663)
----------- ----------- -----------
Total investment income 451,913 525,174 112,910
----------- ----------- -----------
Expenses:
Advisory fees (Note D) 221,681 38,648 32,319
Custodian fees 5,628 1,511 4,014
Shareholder reports 12,374 3,042 1,750
Professional fees 10,916 2,745 1,682
Insurance expense 3,186 828 458
Directors fees 1,441 375 207
Security valuation 5,326 1,008 3,060
Registration fees 1,347 2,694 1,067
Miscellaneous expenses 3,054 2,312 2,214
Amortization of deferred organization costs (Note B) 715
----------- ----------- -----------
Total expenses 264,854 53,163 47,486
----------- ----------- -----------
Net investment income 187,059 472,011 65,424
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments 2,737,402 (227,339) 128,139
Net realized foreign exchange gain (loss)
Net unrealized loss on investments (729,515) (402,014) (406,681)
Net unrealized gain (loss) on translation
of assets and liabilities in foreign currencies
----------- ----------- -----------
Net realized and unrealized gain (loss) on
investments and foreign currency 2,007,887 (629,353) (278,542)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations $ 2,194,946 $ (157,342) $ (213,118)
=========== =========== ===========
<CAPTION>
Capital
Growth Balanced
Portfolio Portfolio
----------- -----------
<S> <C> <C>
INVESTMENT INCOME
Income:
Interest $ 207,283 $ 411,749
Dividends 110,738 172,150
Foreign taxes withheld (1,446)
----------- -----------
Total investment income 316,575 583,899
----------- -----------
Expenses:
Advisory fees (Note D) 214,041 100,956
Custodian fees 15,549 11,990
Shareholder reports 8,693 5,577
Professional fees 8,374 5,093
Insurance expense 2,285 1,442
Directors fees 1,035 652
Security valuation 4,983 5,227
Registration fees 4,186 1,167
Miscellaneous expenses 3,241 2,725
Amortization of deferred organization costs (Note B) 713 717
----------- -----------
Total expenses 263,100 135,546
----------- -----------
Net investment income 53,475 448,353
----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments 302,046 159,254
Net realized foreign exchange gain (loss) 17
Net unrealized loss on investments (893,606) (783,353)
Net unrealized gain (loss) on translation
of assets and liabilities in foreign currencies 28
----------- -----------
Net realized and unrealized gain (loss) on
investments and foreign currency (591,515) (624,099)
----------- -----------
Net increase (decrease) in net assets
resulting from operations $ (538,040) $ (175,746)
=========== ===========
</TABLE>
See notes to financial statements.
18
<PAGE>
CHUBB AMERICA FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
World Growth Money Market Gold Stock
Stock Portfolio Portfolio Portfolio
--------------------------- -------------------------- -----------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
December December December December December December
31, 1994 31, 1993 31, 1994 31, 1993 31, 1994 31, 1993
----------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations:
Net investment income (loss)....... $ 785,890 $ 550,400 $ 259,435 $ 100,165 $ 14,891 $ 8,353
Net realized gain (loss) on
investments....................... 2,028,789 2,971,311 (886) 100 109,276 (115,099)
Net realized foreign exchange
gain (loss)....................... (102,259) (74,336) (2,987) (1,480)
Net unrealized gain (loss)
on investments.................... (4,696,572) 6,690,215 (507) (744) (1,382,511) 3,019,073
Net unrealized gain (loss) on
translation of assets and
liabilities in foreign currencies 4,667 407 2 (3)
----------- ----------- ----------- ---------- ---------- ----------
Net increase (decrease) in net
assets resulting from operations.. (1,979,485) 10,137,997 258,042 99,521 (1,261,329) 2,910,844
Dividends to shareholders from
net investment income............... (683,631) (476,064) (259,435) (100,165) (11,870) (6,844)
Dividends to shareholders in excess
of net investment income............ (265)
Distributions to shareholders from
capital gains....................... (2,213,897) (2,499,319) (29)
Distributions to shareholders in
excess of capital gains............. (452,287) (48,375)
Dividends to shareholders from
capital paid in.....................
Increase in net assets derived from
shareholder transactions (Note E)... 16,202,192 9,452,170 2,620,697 1,105,702 809,618 621,284
----------- ----------- ----------- ---------- ---------- ----------
Net increase (decrease) in
net assets......................... 10,872,627 16,614,784 2,619,304 1,105,029 (511,956) 3,525,284
Net Assets:
Beginning of year................... 42,031,141 25,416,357 5,061,181 3,956,152 7,863,581 4,338,297
=========== =========== =========== ========== ========== ==========
End of year......................... $52,903,768 $42,031,141 $ 7,680,485 $5,061,181 $7,351,625 $7,863,581
=========== =========== =========== ========== ========== ==========
Undistributed net investment income.. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
=========== =========== =========== ========== ========== ==========
</TABLE>
See notes to financial statements.
19
<PAGE>
CHUBB AMERICA FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Domestic Growth Stock Bond Growth and Income
Portfolio Portfolio Portfolio
--------------------------- --------------------------- --------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
December December December December December December
31, 1994 31, 1993 31, 1994 31, 1993 31, 1994 31, 1993
------------ ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations:
Net investment income (loss)....... $ 187,059 $ 180,995 $ 472,011 $ 392,220 $ 65,424 $ 28,248
Net realized gain (loss) on
investments....................... 2,737,402 2,796,109 (227,339) 31,891 128,139 131,315
Net realized foreign exchange
gain (loss).......................
Net unrealized gain (loss)
on investments.................... (729,515) 573,730 (402,014) (15,384) (406,681) 143,711
Net unrealized gain (loss) on
translation of assets and
liabilities in foreign currencies
----------- ----------- ----------- ---------- ---------- ----------
Net increase (decrease) in net
assets resulting from operations.. 2,194,946 3,550,834 (157,342) 408,727 (213,118) 303,274
Dividends to shareholders from
net investment income............... (187,059) (180,995) (472,011) (392,220) (65,424) (28,248)
Dividends to shareholders in excess
of net investment income............
Distributions to shareholders from
capital gains....................... (2,502,153) (2,030,104) (31,891) (192,338) (64,088)
Distributions to shareholders in
excess of capital gains............. (1,925)
Dividends to shareholders from
capital paid in.....................
Increase in net assets derived from
shareholder transactions (Note E)... 6,880,643 3,746,716 8,233,919 1,436,682 3,249,910 1,131,325
----------- ----------- ----------- ---------- ---------- ----------
Net increase (decrease) in
net assets......................... 6,386,377 5,086,451 7,604,566 1,419,373 2,779,030 1,342,263
Net Assets:
Beginning of year................... 25,072,289 19,985,838 5,461,879 4,042,506 2,831,442 1,489,179
=========== =========== =========== ========== ========== ==========
End of year......................... $31,458,666 $25,072,289 $13,066,445 $5,461,879 $5,610,472 $2,831,442
=========== =========== =========== ========== ========== ==========
Undistributed net investment income.. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
=========== =========== =========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Capital Growth Balanced
Portfolio Portfolio
-------------------------- --------------------------
Year Year Year Year
Ended Ended Ended Ended
December December December December
31, 1994 31, 1993 31, 1994 31, 1993
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations:
Net investment income (loss)....... $ 53,475 $ (11,508) $ 448,353 $ 265,691
Net realized gain (loss) on
investments....................... 302,046 1,321,816 159,254 200,346
Net realized foreign exchange
gain (loss)....................... 17 (172)
Net unrealized gain (loss)
on investments.................... (893,606) 1,294,012 (783,353) 309,826
Net unrealized gain (loss) on
translation of assets and
liabilities in foreign currencies 28 190
----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations.. (538,040) 2,604,338 (175,746) 775,863
Dividends to shareholders from
net investment income............... (53,492) (448,353) (265,691)
Dividends to shareholders in excess
of net investment income............
Distributions to shareholders from
capital gains....................... (546,146) (1,194,908) (163,739) (200,346)
Distributions to shareholders in
excess of capital gains............. (114,172) (45,971)
Dividends to shareholders from
capital paid in.....................
Increase in net assets derived from
shareholder transactions (Note E)... 13,442,447 8,620,325 3,848,793 4,495,606
----------- ----------- ----------- -----------
Net increase (decrease) in
net assets......................... 12,190,597 10,029,755 3,060,955 4,759,461
Net Assets:
Beginning of year................... 15,373,489 5,343,734 11,703,898 6,944,437
=========== =========== =========== ===========
End of year......................... $27,564,086 $15,373,489 $14,764,853 $11,703,898
=========== =========== =========== ===========
Undistributed net investment income.. $ 0 $ 0 $ 0 $ 0
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB AMERICA FUND, INC.
December 31, 1994
NOTE A-ORGANIZATION
Chubb America Fund, Inc. (the "Company") is a diversified open-end series
management investment company registered under the Investment Company Act of
1940, as amended. The Company was incorporated under the laws of the State of
Maryland on October 19, 1984 for the purpose of funding Flexible Premium
Variable Life Insurance Policies issued by Chubb Life Insurance Company of
America ("Chubb Life"). The Company is composed of eight separate portfolios:
the World Growth Stock Portfolio, the Money Market Portfolio, the Gold Stock
Portfolio, the Domestic Growth Stock Portfolio, the Bond Portfolio, the Growth
and Income Portfolio, the Capital Growth Portfolio, and the Balanced Portfolio.
Chubb Life's ownership at December 31, 1994 is as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
PORTFOLIO SHARES OWNED SHARES OUTSTANDING
<S> <C> <C>
World Growth Stock 23,275 0.84%
Money Market 93,202 12.44%
Gold Stock 79,948 17.68%
Domestic Growth Stock 66,735 3.38%
Bond 145,657 10.82%
Growth and Income 105,451 21.09%
Capital Growth 112,037 5.44%
Balanced 537,037 38.62%
</TABLE>
NOTE B-SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments: Investment securities are valued at the closing
- ------------------------
sales price on the exchange on which such securities are principally traded;
securities traded in the over-the-counter market and securities traded on a
national exchange for which no sales took place on the day of valuation are
valued at the mean of the bid and asked prices at the close of trading.
Quotations for foreign securities are in United States dollars and,
accordingly, unrealized gains and losses on these securities reflect all
foreign exchange fluctuations. Restricted securities are valued at fair value
as determined in good faith by the Board of Directors. Short-term debt
instruments with a remaining maturity of 60 days or less are valued at
amortized cost, which approximates market value. At December 31, 1994 the World
Growth, Gold and Capital Growth Portfolios owned short-term obligations with
remaining maturities of greater than 60 days that, in aggregate, exceeded
amortized cost by $422, $23 and $1,120, respectively.
Investment Security Transactions: Investment security transactions are
- --------------------------------
recorded as of the trade date, the date the order to buy or sell is executed.
Dividend income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis.
Deferred Organizational Costs: Costs incurred by the Company in connection
- -----------------------------
with the organization and initial public offering of the Growth and Income,
Capital Growth and Balanced Portfolios have been deferred and are being
amortized over a five year period using the straight line method from the date
the shares were first offered to the public. In the event that any of the
initial shares are redeemed, by any holder thereof, during the amortization
period, the proceeds will be reduced for any unamortized organizational costs
in the same proportion as the number of initial shares being redeemed bears to
the number of initial shares outstanding at the time of redemption.
Distributions to Shareholders: Distributions to shareholders from ordinary
- -----------------------------
income and net realized capital gains are declared and distributed at least
once annually. Distributions to shareholders are recorded on the ex-dividend
date.
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB AMERICA FUND, INC.
December 31, 1994
NOTE B-SIGNIFICANT ACCOUNTING POLICIES-(Continued)
The Company distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as dividends
in excess of net investment income or accumulated net realized gains.
Foreign Currency Transactions: The World Growth Stock, Gold Stock and Capital
- -----------------------------
Growth Portfolios engage in portfolio transactions that are denominated in
foreign currency. All related receivables and payables are marked to market
daily based on the most recent exchange rates listed at the close of the New
York Stock Exchange.
The portfolios do not isolate the portion of the operating results due to
changes in foreign exchange rates on investments from the fluctuations arising
from changes in the market value of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign currency gains and losses arise from the
fluctuation of exchange rates between trade date and settlement date on
security transactions and from the difference between accrual date and payment
date on accrued investment income. Net unrealized foreign exchange gains and
losses are related to the fluctuation of exchange rates on the payables and
receivables of securities and accrued investment income at fiscal year end.
Federal Income Taxes: It is the policy of the Company for each Portfolio to
- --------------------
continue to qualify as a regulated investment company by complying with the
requirements of the Internal Revenue Code applicable to regulated investment
companies, and by distributing all of its ordinary income and net realized
capital gains. Therefore, no Federal tax provision is required.
Foreign taxes withheld represents amounts withheld by foreign tax
authorities, net of refunds recoverable.
NOTE C-INVESTMENTS
Net realized gains and losses on investment securities sold are determined
by using the first-in, first-out method. The aggregate cost of investments
owned for Federal income tax purposes is the same as for financial reporting
purposes.
At December 31, 1994, gross unrealized gains and losses were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Unrealized Unrealized Unrealized
Gains Losses Gain/(Loss)
---------- ---------- -----------
<S> <C> <C> <C>
World Growth Stock Portfolio $9,038,962 $2,988,278 $6,050,684
Gold Stock Portfolio 2,151,126 705,465 1,445,661
Domestic Growth Stock Portfolio 6,002,776 2,169,510 3,833,266
Bond Portfolio 10,807 379,440 (368,633)
Growth and Income Portfolio 219,831 347,174 (127,343)
Capital Growth Portfolio 1,642,079 672,741 969,338
Balanced Portfolio 219,580 413,829 (194,249)
</TABLE>
At December 31, 1994, the World Growth Stock Portfolio had an unrealized foreign
currency loss of $2,985 and the Capital Growth Portfolio had a foreign currency
gain of $7.
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB AMERICA FUND, INC.
December 31, 1994
NOTE C-INVESTMENTS-(Continued)
At December 31, 1994, realized capital losses, for Federal income tax purposes,
available to be used to offset future realized capital gains are as follows: the
Money Market Portfolio has $886 which expires in 2002; the Gold Stock Portfolio
has $1,461,584, of which $376,773 expires in 1998, $430,365 expires in 1999,
$370,619 expires in 2000, and $283,827 expires in 2001; the Bond Portfolio has
$229,601 which expires in 2002.
In addition, during the period from November 1, 1994 through December 31, 1994,
the World Growth Stock Portfolio incurred foreign currency losses of $265 and
capital losses of $13,017, and the Capital Growth Portfolio incurred capital
losses of $114,172 that are treated for Federal income tax purposes as if they
had occurred on January 1, 1995. Accordingly, these Portfolios made capital gain
distributions, as required by Internal Revenue Code Regulations, in excess of
net capital gains recognized for financial reporting purposes.
The World Growth Stock Portfolio and the Gold Stock Portfolio had investments in
passive foreign investment companies at December 31, 1994 which were marked to
market for Federal tax purposes. Distributions of $439,270 on the World Growth
Stock Portfolio and $48,375 on the Gold Stock Portfolio were declared based upon
this mark to market adjustment, resulting in distributions in excess of net
realized capital gains for financial statement purposes.
Purchases and sales of investment securities for the period ended December
31, 1994, other than short-term obligations, were as follows:
<TABLE>
<CAPTION>
Proceeds
Cost of from
Investment Investment
Securities Securities
Purchased Sold
------------ ------------
<S> <C> <C>
World Growth Stock Portfolio $17,730,240 $ 8,324,329
Gold Stock Portfolio 2,659,395 1,312,982
Domestic Growth Stock Portfolio 15,566,988 13,227,025
Bond Portfolio 18,644,530 10,327,113
Growth and Income Portfolio 4,827,813 1,545,484
Capital Growth Portfolio 28,786,107 29,485,147
Balanced Portfolio 11,624,156 9,296,193
</TABLE>
NOTE D-INVESTMENT ADVISORY FEES AND MANAGEMENT AGREEMENT
The Company has entered into an investment management agreement with Chubb
Investment Advisory Corporation, a wholly-owned subsidiary of Chubb Life. Under
the agreement, Chubb Investment Advisory Corporation provides investment
management and certain administrative services for the Company. Chubb Investment
Advisory Corporation has in turn retained Templeton, Galbraith & Hansberger,
Ltd. to provide investment advisory services for the World Growth Stock
Portfolio, Chubb Asset Managers, Inc. to provide investment advisory services
for the Money Market, Bond, and Growth and Income Portfolios, Van Eck Associates
Corporation to provide investment advisory services for the Gold Stock
Portfolio, Pioneering Management Corporation to provide investment advisory
services for the Domestic Growth Stock Portfolio, Janus Capital Corporation to
provide investment advisory services for the Capital Growth Portfolio, and
Phoenix Investment Counsel to provide investment advisory services for the
Balanced Portfolio. For its investment management and administrative services,
Chubb Investment Advisory Corporation is paid an annual fee through a daily
charge based on a percentage of the average daily net asset value of each
Portfolio as shown below:
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB AMERICA FUND, INC.
December 31, 1994
NOTE D-INVESTMENT ADVISORY FEES AND MANAGEMENT AGREEMENT-(Continued)
<TABLE>
<CAPTION>
World Domestic Growth
Growth Money Gold Growth and Capital
Average Daily Stock Market Stock Stock Bond Income Growth Balanced
Net Asset Value Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- --------------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First $200 Million .75% .50% .75% .75% .50% .75% 1.00% .75%
Next $1.1 Billion .70% .45% .70% .70% .45% .70% .95% .70%
Over $1.3 Billion .65% .40% .65% .65% .40% .65% .90% .65%
</TABLE>
NOTE E-SHAREHOLDERS' TRANSACTIONS
Following is a summary of transactions with shareholders for each portfolio.
<TABLE>
<CAPTION>
World Growth Stock Portfolio
---------------------------------------------
Year Ended Year Ended
December 31, 1994 December 31, 1993
----------------------- --------------------
Shares Dollars Shares Dollars
---------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Shares issued 1,035,573 $21,466,773 480,387 $9,334,689
Shares issued as reinvestment of
dividends 168,068 3,486,913 65,566 1,096,656
Shares redeemed (431,951) (8,751,494) (53,440) (979,175)
---------- ----------- -------- ----------
Net increase 771,690 $16,202,192 492,513 $9,452,170
========== =========== ======== ==========
<CAPTION>
Money Market Portfolio
---------------------------------------------
Year Ended Year Ended
December 31, 1994 December 31, 1993
----------------------- --------------------
Shares Dollars Shares Dollars
---------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Shares issued 1,254,266 $13,015,646 356,002 $3,689,352
Shares issued as reinvestment of
dividends 9,766 100,195 10,955 112,013
Shares redeemed (1,008,034) (10,495,144) (260,545) (2,695,663)
---------- ----------- -------- ----------
Net increase 255,998 $ 2,620,697 106,412 $1,105,702
========== =========== ======== ==========
</TABLE>
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB AMERICA FUND, INC.
December 31, 1994
NOTE E-SHAREHOLDERS' TRANSACTIONS-(Continued)
<TABLE>
<CAPTION>
Gold Stock Portfolio
--------------------------------------------
Year Ended Year Ended
December 31, 1994 December 31, 1993
---------------------- --------------------
Shares Dollars Shares Dollars
--------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Shares issued 157,979 $ 2,772,324 77,427 $1,234,157
Shares issued as reinvestment of
dividends 881 16,196 846 9,790
Shares redeemed (120,493) (1,978,902) (39,141) (622,663)
--------- ----------- -------- ----------
Net increase 38,367 $ 809,618 39,132 $ 621,284
========= =========== ======== ==========
<CAPTION>
Domestic Growth Stock Portfolio
--------------------------------------------
Year Ended Year Ended
December 31, 1994 December 31, 1993
---------------------- --------------------
Shares Dollars Shares Dollars
--------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Shares issued 504,196 $ 8,172,260 254,117 $4,145,200
Shares issued as reinvestment of
dividends 185,687 2,977,104 94,573 1,435,235
Shares redeemed (268,980) (4,268,721) (113,878) (1,833,719)
--------- ----------- -------- ----------
Net increase 420,903 $ 6,880,643 234,812 $3,746,716
========= =========== ======== ==========
<CAPTION>
Bond Portfolio
--------------------------------------------
Year Ended Year Ended
December 31, 1994 December 31, 1993
---------------------- --------------------
Shares Dollars Shares Dollars
--------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Shares issued 1,223,216 $12,359,424 141,602 $1,532,243
Shares issued as reinvestment of
dividends 41,407 426,036 46,229 471,792
Shares redeemed (449,159) (4,551,541) (52,819) (567,353)
--------- ----------- -------- ----------
Net increase 815,464 $ 8,233,919 135,012 $1,436,682
========= =========== ======== ==========
</TABLE>
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB AMERICA FUND, INC.
December 31, 1994
NOTE E-SHAREHOLDERS' TRANSACTIONS-(Continued)
<TABLE>
<CAPTION>
Growth and Income Portfolio
--------------------------------------------
Year Ended Year Ended
December 31, 1994 December 31, 1993
---------------------- --------------------
Shares Dollars Shares Dollars
--------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Shares issued 293,263 $ 3,529,692 112,302 $1,333,183
Shares issued as reinvestment of
dividends 12,930 156,535 294 3,261
Shares redeemed (35,479) (436,317) (17,577) (205,119)
--------- ----------- -------- ----------
Net increase 270,714 $ 3,249,910 95,019 $1,131,325
========= =========== ======== ==========
<CAPTION>
Capital Growth Portfolio
--------------------------------------------
Year Ended Year Ended
December 31, 1994 December 31, 1993
---------------------- --------------------
Shares Dollars Shares Dollars
--------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Shares issued 1,017,067 $13,892,818 684,193 $9,124,119
Shares issued as reinvestment of
dividends 92,665 1,310,134 17,399 222,490
Shares redeemed (127,748) (1,760,505) (53,735) (726,284)
--------- ----------- -------- ----------
Net increase 981,984 $13,442,447 647,857 $8,620,325
========= =========== ======== ==========
<CAPTION>
Balanced Portfolio
--------------------------------------------
Year Ended Year Ended
December 31, 1994 December 31, 1993
---------------------- --------------------
Shares Dollars Shares Dollars
--------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Shares issued 420,855 $ 4,654,199 394,727 $4,463,806
Shares issued as reinvestment of
dividends 41,717 466,037 22,682 248,427
Shares redeemed (115,035) (1,271,443) (18,923) (216,627)
--------- ----------- -------- ----------
Net increase 347,537 $ 3,848,793 398,486 $4,495,606
========= =========== ======== ==========
</TABLE>
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB AMERICA FUND, INC.
December 31, 1994
NOTE F-RESTRICTED SECURITIES
The Gold Stock Portfolio invests in securities which are restricted from resale.
The Portfolio does not have the right to demand that such securities be
registered. The portfolio's policy is to invest no more than 5% of the value of
the portfolio's assets in equity securities which are not readily marketable.
The securities are valued at fair value in accordance with the procedures
described in Note B.
The following securities are not registered in the U.S. or their country of
origin, and are considered restricted:
<TABLE>
<CAPTION>
Restricted Date of Market
Security Acquisition Cost Value
- ---------- -------------- ------ ------
<S> <C> <C> <C>
Bolivar Goldfields Ltd., Warrants April 20, 1994 $0 $0
Dayton Mining Corporation, Warrants May 3, 1994 0 0
Miramar Mining Corp., Warrants April 12, 1994 0 0
</TABLE>
The value of these restricted securities at December 31, 1994 was $0,
representing 0.0% of net assets.
In addition, the portfolio held unrestricted securities of the same issuer
as follows:
<TABLE>
<CAPTION>
Unrestricted Date of Market Date of Market
Security of Same Issuer Offering Value Acquisition Value
- ----------------------- ----------------- -------- -------------- --------
<S> <C> <C> <C> <C>
Dayton Mining Corporation April 13, 1994 $165,390 May 3, 1994 $153,535
Mirimar Mining Corp. February 24, 1994 21,368 April 12, 1994 24,418
</TABLE>
27
<PAGE>
CHUBB AMERICA FUND, INC.
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
World Growth Stock Portfolio
-------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
December December December December December
31, 1994 31, 1993 31, 1992 31, 1991 31, 1990
----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year $ 20.89 $ 16.73 $ 16.45 $ 13.70 $ 16.07
Income From Investment
Operations
Net investment income 0.25 0.24 0.35 0.34 0.36
Net gains and losses
on securities (both
realized and unrealized) (0.89) 5.40 0.65 2.75 (2.00)
----------- ----------- ----------- ----------- -----------
Total from investment
operations (0.64) 5.64 1.00 3.09 (1.64)
Less Distributions to
Shareholders
Dividends from net
investment income (0.25) (0.24) (0.35) (0.34) (0.37)
Dividends in excess of net
investment income
Distributions from capital
gains (0.81) (1.24) (0.37) (0.36)
Distributions in excess of
capital gains (0.19)
----------- ----------- ----------- ----------- -----------
Returns of capital
Total distributions (1.25) (1.48) (0.72) (0.34) (0.73)
Net asset value, end of year $ 19.00 $ 20.89 $ 16.73 $ 16.45 $ 13.70
=========== =========== =========== =========== ===========
Total Return (A) (3.05%) 33.73% 6.10% 22.53% (10.38%)
Ratios to Average Net Assets:
Expenses 1.00% 1.04% 1.17% 1.14% 1.22%
Net investment income 1.56% 1.64% 2.19% 2.40% 2.65%
Portfolio Turnover Rate 18.74% 34.90% 32.27% 50.06% 25.79%
Net Assets, At End of Year $52,903,768 $42,031,141 $25,416,357 $22,659,930 $16,052,089
</TABLE>
(A) Total return assumes reinvestment of all dividends during the year and
does not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
28
<PAGE>
CHUBB AMERICA FUND, INC.
FINANCIAL HIGHLIGHTS-(Continued)
For a share outstanding throughout the year (A):
<TABLE>
<CAPTION>
Money Market Portfolio
-------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
December December December December December
31, 1994 31, 1993 31, 1992 31, 1991 31, 1990
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year $ 10.26 $ 10.22 $ 10.22 $ 10.21 $ 10.18
Income From Investment
Operations
Net investment income 0.35 0.20 0.29 0.52 0.73
Net gains and losses
on securities (both
realized and unrealized) (0.01) 0.04 0.01
------------ ------------ ------------ ------------ ------------
Total from investment
operations 0.34 0.24 0.29 0.53 0.73
Less Distributions to
Shareholders
Dividends from net
investment income (0.35) (0.20) (0.29) (0.52) (0.70)
Dividends in excess of net
investment income
Distributions from capital
gains
Distributions in excess of
capital gains
Returns of capital
------------ ------------ ------------ ------------ ------------
Total distributions (0.35) (0.20) (0.29) (0.52) (0.70)
Net asset value, end of year $ 10.25 $ 10.26 $ 10.22 $ 10.22 $ 10.21
============ ============ ============ ============ ============
Total Return (B) 3.28% 2.32% 2.83% 5.18% 7.15%
Ratios to Average Net Assets:
Expenses 0.65% 0.74% 0.85% 0.85% 1.09%
Net investment income 3.31% 2.32% 2.81% 4.95% 6.90%
Portfolio Turnover Rate (C) N/A N/A N/A N/A N/A
Net Assets, At End of Year $ 7,680,485 $ 5,061,181 $ 3,956,152 $ 3,672,941 $ 2,910,677
</TABLE>
(A) The per share amounts which are shown have been computed based on the
average number of shares outstanding during each year.
(B) Total return assumes reinvestment of all dividends during the year and
does not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(C) There were no purchases and/or sales of securities other than short-term
obligations during the year. Therefore, the portfolio turnover rate has
not been calculated.
29
<PAGE>
CHUBB AMERICA FUND, INC.
FINANCIAL HIGHLIGHTS-(Continued)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
Gold Stock Portfolio
----------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
December December December December December
31, 1994 31, 1993 31, 1992 31, 1991 31, 1990
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $ 19.00 $ 11.57 $ 11.99 $ 12.76 $ 16.95
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.03 0.02 0.03 0.07 0.07
Net gains and losses on
securities (both
realized and unrealized) (2.65) 7.43 (0.42) (0.77) (4.19)
---------- ---------- ---------- ---------- ----------
Total from investment
operations (2.62) 7.45 (0.39) (0.70) (4.12)
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income (0.03) (0.02) (0.03) (0.07) (0.07)
Dividends in excess of net
investment income
Distributions from capital
gains
Distributions in excess of
capital gains (0.10)
Returns of capital
---------- ---------- ---------- ---------- ----------
Total distributions (0.13) (0.02) (0.03) (0.07) (0.07)
Net asset value, end of year $ 16.25 $ 19.00 $ 11.57 $ 11.99 $ 12.76
========== ========== ========== ========== ==========
Total Return (A) (13.77%) 63.90% (3.29%) (5.48%) (24.28%)
Ratios to Average Net Assets:
Expenses 0.99% 1.01% 1.13% 1.16% 1.36%
Net investment income 0.18% 0.14% 0.24% 0.57% 0.59%
Portfolio Turnover Rate 17.43% 7.32% 7.78% 14.23% 17.61%
Net Assets, At End of Year $7,351,625 $7,863,581 $4,338,297 $4,646,951 $5,390,279
</TABLE>
- ------------
(A) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
30
<PAGE>
CHUBB AMERICA FUND, INC.
FINANCIAL HIGHLIGHTS-(Continued)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
Domestic Growth Stock Portfolio
--------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
December December December December December
31, 1994 31, 1993 31, 1992 31, 1991 31, 1990
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year................................ $ 16.14 $ 15.16 $ 12.96 $ 10.15 $ 13.25
Income From Investment
Operations
Net investment income............... 0.09 0.12 0.14 0.24 0.26
Net gains and losses
on securities (both
realized and unrealized).......... 1.12 2.29 3.27 3.13 (2.71)
----------- ----------- ----------- ----------- ----------
Total from investment
operations........................ 1.21 2.41 3.41 3.37 (2.45)
Less Distributions to
Shareholders
Dividends from net
investment income................. (0.09) (0.12) (0.14) (0.24) (0.26)
Dividends in excess of net
investment income.................
Distributions from capital
gains............................. (1.32) (1.31) (1.07) (0.32) (0.39)
Distributions in excess of
capital gains.....................
Returns of capital..................
----------- ----------- ----------- ----------- ----------
Total distributions................. (1.41) (1.43) (1.21) (0.56) (0.65)
Net asset value, end of year.......... $ 15.94 $ 16.14 $ 15.16 $ 12.96 $ 10.15
=========== =========== =========== =========== ==========
Total Return (A)...................... 7.66% 15.89% 26.50% 33.18% (18.55%)
Ratios to Average Net Assets:
Expenses............................ 0.89% 0.97% 1.07% 1.13% 1.25%
Net investment income............... 0.63% 0.76% 1.07% 2.02% 2.38%
Portfolio Turnover Rate............... 46.65% 49.47% 41.36% 40.93% 15.17%
Net Assets, At End of Year............ $31,458,666 $25,072,289 $19,985,838 $15,583,806 $10,517,783
</TABLE>
- ----------
(A) Total return assumes reinvestment of all dividends during the year and
does not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth more or
less than the original cost.
31
<PAGE>
CHUBB AMERICA FUND, INC.
FINANCIAL HIGHLIGHTS-(Continued)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
Bond Portfolio
----------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
December December December December December
31, 1994 31, 1993 31, 1992 31, 1991 31, 1990
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year.............................. $ 10.28 $ 10.21 $ 10.61 $ 9.83 $ 9.76
Income From Investment
Operations
Net investment income............. 0.35 0.74 0.66 0.72 0.75
Net gains and losses
on securities (both
realized and unrealized)........ (0.58) 0.13 0.13 0.79 0.06
----------- ----------- ----------- ----------- -----------
Total from investment
operations...................... (0.23) 0.87 0.79 1.51 0.81
Less Distributions to
Shareholders
Dividends from net
investment income............... (0.35) (0.74) (0.66) (0.73) (0.74)
Dividends in excess of net
investment income...............
Distributions from capital
gains........................... (0.06) (0.53)
Distributions in excess of
capital gains...................
Returns of capital................
----------- ----------- ----------- ----------- -----------
Total distributions............... (0.35) (0.80) (1.19) (0.73) (0.74)
Net asset value, end of year........ $ 9.70 $ 10.28 $ 10.21 $ 10.61 $ 9.83
=========== =========== =========== =========== ===========
Total Return (A).................... (2.28%) 8.68% 7.46% 15.34% 8.44%
Ratios to Average Net Assets:
Expenses.......................... 0.68% 0.74% 0.88% 1.03% 1.21%
Net investment income............. 6.07% 7.59% 6.83% 7.12% 7.97%
Portfolio Turnover Rate............. 140.30% 112.66% 81.23% 23.73% 29.25%
Net Assets, At End of Year.......... $13,066,445 $ 5,461,879 $ 4,042,506 $ 3,516,314 $ 2,905,564
</TABLE>
- ----------
(A) Total return assumes reinvestment of all dividends during the year and
does not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth more or
less than the original cost.
32
<PAGE>
CHUBB AMERICA FUND, INC.
FINANCIAL HIGHLIGHTS-(Continued)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
Growth and Income Portfolio
-----------------------------------------
Period From
Year Year May 1,
Ended Ended 1992 to
December December December
31, 1994 31, 1993 31, 1992(A)
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of
year $ 12.35 $ 11.10 $ 10.27
Income From Investment
Operations
Net investment income 0.13 0.12 0.02
Net gains and losses
on securities (both
realized and unrealized) (0.65) 1.53 0.83
---------- ---------- ----------
Total from investment
operations (0.52) 1.65 0.85
Less Distributions to
Shareholders
Dividends from net
investment income (0.13) (0.12) (0.02)
Dividends in excess of net
investment income
Distributions from capital
gains (0.48) (0.28)
Distributions in excess of
capital gains
Returns of capital
---------- ---------- ----------
Total distributions (0.61) (0.40) (0.02)
Net asset value, end of year $ 11.22 $ 12.35 $ 11.10
========== ========== ==========
Total Return (B) (4.24%) 14.94% 12.48%
Ratios to Average Net Assets:
Expenses 1.10% 1.35% 2.09% (C)
Net investment income 1.52% 1.38% 0.36% (C)
Portfolio Turnover Rate 38.17% 77.68% 54.11%
Net Assets, At End of Year $5,610,472 $2,831,442 $1,489,179
</TABLE>
- -----------
(A) Per share data calculated from the initial offering date, May 1, 1992, for
sale to Chubb Separate Account A. For the period from the start of business
April 1, 1992 to April 30, 1992, net investment income per share aggregated
$0 for the Growth and Income portfolio.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost. Total return for periods of less than
one year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.
33
<PAGE>
CHUBB AMERICA FUND, INC.
FINANCIAL HIGHLIGHTS-(Continued)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
Capital Growth Portfolio
-------------------------------------------
Period From
Year Year May 1,
Ended Ended 1992 to
December December December
31, 1994 31, 1993 31, 1992(A)
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value, beginning of
year $ 14.26 $ 12.42 $ 9.95
Income From Investment
Operations
Net investment income 0.03 (0.01)
Net gains and losses
on securities (both
realized and unrealized) (0.49) 3.03 2.69
----------- ----------- -----------
Total from investment
operations (0.46) 3.03 2.68
Less Distributions to
Shareholders
Dividends from net
investment income (0.03)
Dividends in excess of net
investment income
Distributions from capital
gains (0.33) (1.19) (0.21)
Distributions in excess of
capital gains (0.06)
Returns of capital
----------- ----------- -----------
Total distributions (0.42) (1.19) (0.21)
Net asset value, end of year $ 13.38 $ 14.26 $ 12.42
=========== =========== ===========
Total Return (B) (3.26%) 24.73% 40.40%
Ratios to Average Net Assets:
Expenses 1.22% 1.33% 1.96% (C)
Net investment income 0.25% (0.11%) (0.37%)(C)
Portfolio Turnover Rate 202.04% 162.79% 104.76%
Net Assets, At End of Year $27,564,086 $15,373,489 $ 5,343,734
</TABLE>
- ------------
(A) Per share data calculated from the initial offering date, May 1, 1992, for
sale to Chubb Separate Account A. For the period from the start of business
April 1, 1992 to April 30, 1992, net investment income per share aggregated
$0 for the Capital Growth portfolio.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost. Total return for periods of less than
one year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.
34
<PAGE>
CHUBB AMERICA FUND, INC.
FINANCIAL HIGHLIGHTS-(Continued)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
Balanced Portfolio
---------------------------------------------
Period From
Year Year May 1,
Ended Ended 1992 to
December December December
31, 1994 31, 1993 31, 1992(A)
----------- ----------- ----------
<S> <C> <C> <C>
Net asset value, beginning of
year $ 11.22 $ 10.77 $ 10.10
Income From Investment
Operations
Net investment income 0.32 0.25 0.16
Net gains and losses
on securities (both
realized and unrealized) (0.47) 0.74 0.67
----------- ----------- ----------
Total from investment
operations (0.15) 0.99 0.83
Less Distributions to
Shareholders
Dividends from net
investment income (0.32) (0.25) (0.16)
Dividends in excess of net
investment income
Distributions from capital
gains (0.13) (0.25)
Distributions in excess of
capital gains (0.04)
Returns of capital
----------- ----------- ----------
Total distributions (0.45) (0.54) (0.16)
Net asset value, end of year $ 10.62 $ 11.22 $ 10.77
=========== =========== ==========
Total Return (B) (1.33%) 9.27% 12.33%
Ratios to Average Net Assets:
Expenses 1.01% 1.07% 1.43%(C)
Net investment income 3.34% 2.79% 2.80%(C)
Portfolio Turnover Rate 103.68% 65.49% 77.33%
Net Assets, At End of Year $14,764,853 $11,703,898 $6,944,437
</TABLE>
- ----------
(A) Per share data calculated from the initial offering date, May 1, 1992, for
sale to Chubb Separate Account A. For the period from the start of business
April 1, 1992 to April 30, 1992, net investment income per share aggregated
$.03 for the Balanced portfolio.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost. Total return for periods of less than
one year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.
35
<PAGE>
Ernst & Young LLP 200 Clarendon Street
Boston, Massachusetts 02116
617/266-2000
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders
Chubb America Fund, Inc.
We have audited the accompanying statement of assets and liabilities of Chubb
America Fund, Inc. (the "Fund", comprising, respectively, the World Growth
Stock, Money Market, Gold Stock, Domestic Growth Stock, Bond, Growth and Income,
Capital Growth, and Balanced Portfolios), including the schedules of portfolio
investments, as of December 31, 1994, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
periods indicated on pages 28, 29, 30, 31, 32, 33, 34 and 35 of these financial
statements. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights 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 and financial
highlights 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, 1994 by correspondence with the custodian and brokers, or other
appropriate auditing procedures where replies from brokers were not received. 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 and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting the Chubb America Fund, Inc. at
December 31, 1994, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the periods indicated on pages 28, 29,
30, 31, 32, 33, 34 and 35 of these financial statements, in conformity with
generally accepted accounting principles.
Ernst & Young LLP
February 17, 1995
36
