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Previous: UNIVERSAL OUTDOOR INC, S-1/A, 1997-02-19 |
Next: CUNA MUTUAL LIFE VARIABLE ANNUITY ACCOUNT, N-30D, 1997-02-19 |
[GRAPHIC OMITTED]
NORTHSTAR
VARIABLE ACCOUNT
ANNUAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 1996
This report has been prepared to provide information to owners of Northstar
Variable Account Contracts. If it is used for any other purpose, it must be
accompanied or preceded by a current Northstar Variable Trust Prospectus which
discloses any charges and other important information about the Account,
together with the current Prospectuses for the underlying Funds.
INDEPENDENT AUDITORS' REPORT
Board of Directors
ReliaStar Life Insurance
Company and Contract Owners of
Northstar Variable Account:
We have audited the accompanying statement of assets and liabilities of
Northstar Variable Account as of December 31, 1996 and the related combined
statements of operations and changes in Contract Owners' equity for the year
ended December 31, 1996, the year ended December 31, 1995 and the period from
May 6, 1994 to December 31, 1994. These financial statements are the
responsibility of the management of ReliaStar Life Insurance Company. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We have conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures include
confirmation of the securities owned as of December 31, 1996, by correspondence
with the Account custodians. 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
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Northstar Variable Account
as of December 31, 1996, and the results of its operations and changes in
Contract Owners' equity for the year ended December 31, 1996, the year ended
December 31, 1995 and the period from May 6, 1994 to December 31, 1994, in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Minneapolis, Minnesota
February 7, 1997
<TABLE>
<CAPTION>
NORTHSTAR VARIABLE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES
December 31,1996
(In Thousands, Except Share and Unit Data)
NORTHSTAR'S NORTHSTAR'S NORTHSTAR'S
ASSETS: INCOME AND NORTHSTAR'S MULTI-SECTOR HIGH YIELD
GROWTH FUND GROWTH FUND BOND FUND BOND FUND
Investments in mutual funds at market value: _____________ _____________ _____________ _____________
NORTHSTAR'S:
<S> <C> <C> <C> <C>
Income and Growth Fund
483,110 shares (cost $5,411) $5,662
Growth Fund
163,999 shares (cost $2,266) $2,309
Multi-Sector Bond Fund
128,828 shares (cost $656) $676
High Yield Bond Fund
459,218 shares (cost $2,353) $2,420
FIDELITY'S VIPF AND VIPF II:
Money Market Portfolio
222,970 shares (cost $223)
Overseas Portfolio
3,459 shares (cost $62)
Asset Manager Portfolio
2,551 shares (cost $40)
Index 500 Portfolio
1,166 shares (cost $97)
----------- ----------- ---------- -----------
Total Assets $5,662 $2,309 $676 $2,420
=========== =========== ========== ===========
LIABILITIES AND CONTRACT
OWNERS' EQUITY:
Due to (from) ReliaStar Life
Insurance Company for contract charges $7 $2 $- ($5)
Contract Owners' Equity 5,655 2,307 676 2,425
----------- ----------- ---------- -----------
Total Liabilities and Contract Owners' Equity $5,662 $2,309 $676 $2,420
=========== =========== ========== ===========
Units Outstanding: 416,758.235 150,737.332 52,943.821 182,653.068
Net Asset Value per Unit:
Northstar Variable Account
Tax Qualified $13.568696 $15.303387 $12.773825 $13.279497
Non-Tax Qualified $13.568696 $15.303387 $12.773825 $13.279497
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
FIDELITY'S FIDELITY'S
FIDELITY'S VIPF FIDELITY'S VIPF VIPF II VIPF II
MONEY MARKET OVERSEAS ASSET MANAGER INDEX 500
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO TOTAL
_____________ _____________ _____________ _____________ _____________
<S> <C> <C> <C> <C> <C>
$5,662
2,309
676
2,420
$223 223
$65 65
$43 43
$104 104
---------- ---------- ---------- ---------- -----------
$223 $65 $43 $104 $11,502
========== ========= ========= ========= ===========
$- $- $- $- $4
223 65 43 104 11,498
---------- ---------- ---------- ---------- -----------
$223 $65 $43 $104 $11,502
========== ========= ========= ========= ===========
20,823.704 5,473.449 3,425.419 7,115.014 839,930.042
$10.695325 $11.891717 $12.592959 $14.592823
$10.695325 $11.891717 $12.592959 $14.592823
The accompanying notes are an integral part of the financial statements.
</TABLE>
NORTHSTAR VARIABLE ACCOUNT
STATEMENT OF OPERATIONS AND
CHANGES IN CONTRACT OWNERS' EQUITY
(In Thousands)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD FROM
DECEMBER 31, DECEMBER 31, MAY 6, 1994 TO
1996 1995 DEC. 31, 1994
--------------- ----------- ------------
<S> <C> <C> <C>
Net investment income:
Reinvested dividend income............................... $399 $ 226 $ 16
Reinvested capital gains................................. 441 102 9
Administrative expenses.................................. (138) (60) (3)
--------- --------- ---------
Net investment income
and capital gains ........................... 702 268 22
--------- --------- ---------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares ........................ 219 44 (1)
Increase (decrease) in unrealized
appreciation of investments ....................... 133 286 (25)
------- --------- ---------
Net realized and unrealized gains (losses) ........ 352 330 (26)
--------- --------- ---------
Net additions (reductions) from operations... 1,054 598 (4)
--------- --------- ---------
Contract Owners' transactions:
Net purchase payments ................................... 4,856 4,461 1,381
Surrenders .............................................. (558) (268) (22)
Transfers between Sub-Accounts...........................
and Fixed Account ................................. - - -
Annuity payments......................................... - - -
Transfers to (from) required reserves.................... - - -
--------- --------- ---------
Net additions for Contract
Owners' transactions ........................ 4,298 4,193 1,359
--------- --------- ---------
Net additions for the year ............ 5,352 4,791 1,355
Contract Owners' Equity, beginning of the year ............... 6,146 1,355 -
--------- --------- ---------
Contract Owners' Equity, end of the year ..................... $11,498 $6,146 $1,355
========= ========= ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
NORTHSTAR VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION AND CONTRACTS:
Northstar Variable Account (the "Account") is a separate account of
ReliaStar Life Insurance Company ("ReliaStar Life"), a wholly-owned
subsidiary of ReliaStar Financial Corp. (formerly The NWNL Companies,
Inc.). The Account commenced operations on May 6, 1994 and is registered as
a unit investment trust under the Investment Company Act of 1940.
Purchase payments received under the contracts are allocated to
Sub-Accounts of the Account, each of which is invested in one of the Funds
listed below during the period.
NORTHSTAR VARIABLE TRUST FUNDS: FIDELITY'S VIPF AND VIPF II:
Income and Growth Fund Money Market Portfolio
Growth Fund Overseas Portfolio
Multi-Sector Bond Fund Asset Manager Portfolio
High Yield Bond Fund Index 500 Portfolio
Northstar Investment Management Corporation, an affiliate of ReliaStar
Life, is the investment adviser for the four Funds of the Northstar
Variable Trust and is paid fees for its services by the Northstar Funds.
Fidelity Management & Research Company is the investment adviser for
Fidelity's Variable Insurance Products Fund (VIPF) and Variable Insurance
Products Fund II (VIPF II) and is paid for its services by the VIPF and
VIPF II Portfolios. On April 30, 1995, Sub-Accounts investing in VIPF and
VIPF II Portfolios were made available under the contracts.
SECURITIES VALUATION TRANSACTIONS AND RELATED INVESTMENT INCOME:
The market value of investments in the Sub-Accounts is based on the closing
net asset values of the Fund shares held at the end of the period.
Investment transactions are accounted for on the trade date (date the order
to purchase or redeem is executed) and dividend income and capital gain
distributions are recorded on the ex-dividend date. Net realized gains and
losses on redemptions of shares of the Funds are determined on the basis of
specific identification of Fund share costs.
VARIABLE ANNUITY RESERVES:
The amount of the reserves for contracts in the distribution period is
determined by actuarial assumptions which meet statutory requirements.
Gains or losses resulting from actual mortality experience, the full
responsibility for which is assumed by ReliaStar Life, are offset by
transfers to (or from) ReliaStar Life.
2. FEDERAL INCOME TAXES:
Under current tax law, the income, gains and losses from the separate
account investments are not taxable to either the Account or ReliaStar
Life.
3. CONTRACT CHARGES:
No deduction is made for a sales charge from the purchase payments made for
the contracts. However, on certain surrenders, ReliaStar Life will deduct
from the contract value a surrender charge as set forth in the contract.
Certain charges are made by ReliaStar Life to Contract Owners' Variable
Accumulation Values in the Account in accordance with the terms of the
Contracts. These charges may include: an annual administrative/contract
charge of $35 from each contract on the anniversary date or at the time of
surrender, if surrender is at a time other than the anniversary date; a
daily administrative charge; and a daily charge for mortality and expense
risk assumed by ReliaStar Life.
Various states and other governmental units levy a premium tax on annuity
contracts issued by insurance companies. If the owner of a contract lives
in a state which levies such a tax, ReliaStar Life may deduct the amount of
the tax from the purchase payments received or the value of the contract at
annuitization.
4. INVESTMENTS:
The net realized gains (losses) on redemptions of fund shares for the years
ended December 31, 1996 and 1995 and the period from May 6, 1994 (date
operations commenced) to December 31, 1994, were as follows, (in
thousands):
<TABLE>
<CAPTION>
NORTHSTAR'S
INCOME AND
TOTAL GROWTH FUND
---------------------------------------------- ----------------------------------------------
Year ended Year ended Period from Year ended Year ended Period from
Dec. 31, Dec. 31, May 6, 1994 Dec. 31, Dec. 31, May 6, 1994
1996 1995 to Dec. 31, 1994 1996 1995 to Dec. 31, 1994
------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions........... $2,324 $1,461 $65 $750 $986 $24
Cost................................ 2,105 1,417 66 649 954 25
--------- --------- --------- --------- --------- ---------
Net realized gains (losses) on
redemptions of fund shares..... $219 $ 44 ($1) $101 $32 ($1)
======== ========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
NORTHSTAR'S
NORTHSTAR'S MULTI-SECTOR
GROWTH FUND BOND FUND
------------------------------------------------- -----------------------------------------------
Year ended Year ended Period from Year ended Year ended Period from
Dec. 31, Dec. 31, May 6, 1994 Dec. 31, Dec. 31, May 6, 1994
1996 1995 to Dec. 31, 1994 1996 1995 to Dec. 31, 1994
------------- ------------ ------------- ------------ ------------- ------------
<C> <C> <C> <C> <C> <C>
$431 $23 $14 $57 $271 $4
365 20 14 52 267 4
--------- --------- --------- --------- --------- ---------
$66 $ 3 $- $5 $ 4 $-
========= ======== ========= ========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
NORTHSTAR'S FIDELITY'S VIPF
HIGH YIELD MONEY MARKET
BOND FUND PORTOFLIO
---------------------------------------------- ---------------------------------------------
Year ended Year ended Period from Year ended Year ended Period from
Dec. 31, Dec. 31, May 6, 1994, Dec. 31, Dec. 31, May 6, 1994
1996 1995 to Dec. 31, 1994 1996 1995 to Dec. 31, 1994
------------ ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions ......... $798 $181 $23 $230 $- $-
Cost............................... 754 176 23 230 - -
--------- --------- --------- --------- --------- ---------
Net realized gains (losses) on
redemptions of fund shares.. $44 $5 $- $- $- $-
========= ========= ========= ========= ======== =========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY'S VIPF FIDELITY'S VIPF II
OVERSEAS ASSET MANAGER
PORTFOLIO PORTFOLIO
------------------------------------------------- -----------------------------------------------
Year ended Year ended Period from Year ended Year ended Period from
Dec. 31, Dec. 31, May 6, 1994 Dec. 31, Dec. 31 May 6, 1994
1996 1995 to Dec. 31, 1994 1996 1995 to Dec. 31, 1994
------------ ------------ ------------ ------------ ------------ ------------
<C> <C> <C> <C> <C> <C>
$40 $- $- $2 $- $-
39 - - 2 - -
--------- --------- --------- --------- --------- ---------
$1 $- $- $- $- $-
========= ========= ========== ========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
FIDLEITY'S VIPF II
INDEX 500
PORTFOLIO
------------------------------------------------
Year ended Year ended Period from
Dec. 31, Dec. 31, May 6, 1994,
1996 1995 to Dec. 31, 1994
------------- ------------ -------------
<S> <C> <C> <C>
Proceeds from redemptions .......... $16 $- $-
Cost................................ 14 - -
--------- --------- ---------
Net realized gains (losses) on
redemptions of fund shares... $2 $- $-
========= ========= =========
</TABLE>
5. CONTRACT OWNERS' TRANSACTIONS:
Unit transactions in each Sub-Account during the years ended December 31,
1996 and 1995 and the period from May 6, 1994 (date operations commenced)
to December 31, 1994, were as follows:
<TABLE>
<CAPTION>
NORTHSTAR'S
INCOME AND NORTHSTAR'S
GROWTH FUND GROWTH FUND
-------------------------------------------------- ----------------------------------------------
Year ended Period from Year ended Year ended Period from Year ended
Dec. 31, Dec. 31, May 6, 1994 Dec. 31, Dec. 31, May 6, 1994
1996 1995 to Dec. 31, 1994 1996 1995 to Dec. 31, 1994
------------- ------------ ------------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Units outstanding,
beginning of the year...... 301,285.181 100,955.441 - 27,043.488 8,738.734 -
Units purchased............... 136,809.182 272,482.821 102,017.017 77,198.087 16,561.980 8,900.561
Units redeemed................ (15,930.192) (12,532.790) (1,061.576) (2,645.857) (1,662.223) (626.685)
Units transferred between
Sub-Accounts and/or
Fixed Account ............. (5,405.936) (59,620.291) - 49,141.614 3,404.997 464.858
----------- ----------- ----------- ----------- ----------- -----------
Units outstanding,
end of the year............ 416,758.235 301,285.181 100,955.441 150,737.332 27,043.488 8,738.734
=========== =========== =========== =========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
NORTHSTAR'S NORTHSTAR'S
MULTI-SECTOR HIGH YIELD
BOND FUND BOND FUND
-------------------------------------------------- ------------------------------------------------
Year ended Period from Year ended Year ended Period from
Dec. 31, Dec. 31, May 6, 1994 Dec. 31, Dec. 31, May 6, 1994
1996 1995 to Dec. 31, 1994 1996 1995 to Dec. 31, 1994
------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
37,703.818 15,492.534 - 149,292.389 8,985.149 -
16,708.518 34,047.693 15,492.534 94,192.813 83,081.624 10,139.023
(1,348.523) (10.440) - (18,820.512) (10,401.395) (658.699)
(119.992) (11,825.969) - (42,011.622) 67,627.011 (495.175)
----------- ----------- ----------- ----------- ----------- -----------
52,943.821 37,703.818 15,492.534 182,653.068 149,292.389 8,985.149
========== ========== ========== =========== =========== =========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY'S VIPF FIDELITY'S VIPF
MONEY MARKET OVERSEAS
PORTFOLIO PORTFOLIO
-------------------------------------------------- -----------------------------------------------
Year ended Year ended Period from Year ended Year ended Period from
Dec. 31, Dec. 31, May 6, 1994 Dec. 31, Dec. 31, May 6, 1994
1996 1995 to Dec. 31, 1994 1996 1995 to Dec. 31, 1994
------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding,
beginning of the year..... - - - - - -
Units purchased ............. 41,631.286 - - 6,491.723 - -
Units redeemed .............. (7,939.914) - - (12.797) - -
Units transferred between
Sub-Accounts and/or
Fixed Account ............ (12,867.668) - - (1,005.477) - -
----------- ----------- ----------- ----------- ----------- -----------
Units outstanding,
end of the year .......... 20,823.704 - - 5,473.449 - -
=========== =========== =========== =========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY'S VIPF II FIDELITY'S VIPF II
ASSET MANAGER INDEX 500
PORTFOLIO PORTFOLIO
------------------------------------------------- ------------------------------------------------
Year ended Year ended Period from Year ended Year ended Period from
Dec. 31, Dec. 31, May 6, 1994 Dec. 31, Dec. 31, May 6, 1994
1996 1995 to Dec. 31, 1994 1996 1995 to Dec. 31, 1994
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
- - - 335.333 - -
3,425.419 - - 4,170.997 - -
- - - (13.694) - -
- - - 2,622.378 335.333 -
----------- ----------- ----------- ----------- ----------- -----------
3,425.419 - - 7,115.014 335.333 -
=========== =========== ========== =========== =========== ==========
</TABLE>
6. COMBINING STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY.
Operations and changes in Contract Owners' equity for the year ended
December 31, 1996 were as follows (in thousands):
<TABLE>
<CAPTION>
NORTHSTAR'S NORTHSTAR'S NORTHSTAR'S
INCOME AND NORTHSTAR'S MULTI-SECTOR HIGH YIELD
TOTAL GROWTH FUND GROWTH FUND BOND FUND BOND FUND
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net investment income:
Reinvested dividend income $399 $181 $8 $45 $159
Reinvested capital gains ... 441 385 6 12 38
Administrative expenses .... (138) (76) (19) (8) (27)
--------- --------- --------- --------- ---------
Net investment income
and capital gains .... 702 490 (5) 49 170
--------- --------- --------- --------- ---------
Realized and unrealized gains:
Net realized gains on
redemptions of fund shares 219 101 66 5 44
Increase in unrealized
appreciation of investments 133 35 45 9 31
--------- --------- --------- --------- ---------
Net realized and unrealized
gains ................ 352 136 111 14 75
--------- --------- --------- --------- ---------
Net additions (reductions)
from operations 1,054 626 106 63 245
--------- --------- --------- --------- ---------
Contract Owners' transactions:
Net purchase payments ...... 4,856 1,678 1,183 200 1,189
Surrenders ................. (558) (195) (37) (16) (232)
Transfers between Sub-Accounts
and/or Fixed Account .... - (97) 714 (2) (504)
Annuity payments............ - - - - -
Transfers to (from)
required reserves......... - - - - -
--------- --------- --------- --------- ---------
Net additions for
Contract Owners' transactions 4,298 1,386 1,860 182 453
--------- --------- --------- --------- ---------
Net additions
for the year ... 5,352 2,012 1,966 245 698
Contract Owners' Equity,
beginning of the year ...... 6,146 3,643 341 431 1,727
--------- --------- --------- --------- ---------
Contract Owners' Equity,
end of the year ............ $11,498 $5,655 $2,307 $676 $2,425
========= ========= ========= ========= ========
</TABLE>
FIDELITY'S VIPF FIDELITY'S VIPF FIDELITY'S VIPF II FIDELITY'S VIPF II
MONEY MARKET OVERSEAS ASSET MANAGER INDEX 500
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- -------------- -------------
$6 $- $- $-
- - - -
(7) - - (1)
--------- --------- --------- ---------
(1) - - (1)
--------- --------- --------- ---------
- 1 - 2
- 3 3 7
--------- --------- --------- ---------
- 4 3 9
--------- --------- --------- ---------
(1) 4 3 8
--------- --------- --------- ---------
438 72 40 56
(78) - - -
(136) (11) - 36
- - - -
- - - -
--------- --------- --------- ---------
224 61 40 92
--------- --------- --------- ---------
223 65 43 100
- - - 4
--------- --------- --------- ---------
$223 $65 $43 $104
========= ========= ========= =========
NORTHSTAR VARIABLE ACCOUNT
20 WASHINGTON AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55401
(612) 372-5507
44642b
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