Dear Variable Annuity Owner:
The U.S. stock market had another strong year in 1996. The major international
stock markets were mixed, but generally ended the year on a positive note. The
U.S. bond market was relatively flat, especially when compared to the previous
year's strong bond market. International bond markets were generally weaker as
well. Results in the subaccounts of the MEMBERS(R) Variable Annuity are shown
below:
Percent increase
in Unit Value from
Subaccount 12/31/95 through 12/31/96
- -------------------------------------------------------------------------
Capital Appreciation Stock 19.77%
Growth and Income Stock 20.38%
Balanced 9.31%
Bond 1.41%
Money Market 3.41%
International Stock 13.14%
World Governments 2.57%
Emerging Growth 0.80%*
- -------------------------------------------------------------------------
*The Emerging Growth Subaccount was added on May 1, 1996.
This booklet is divided into several sections. Each section contains the annual
report for a component of the MEMBERS(R) Variable Annuity. The first section
contains the following reports for the CUNA Mutual Life Variable Annuity
Account:
Statement of Assets and Liabilities....................page 2
Statement of Operations................................page 4
Statement of Changes in Net Assets.....................page 5
Notes to the Financial Statements......................page 7
Independent Auditors' Report...........................page 11
The CUNA Mutual Life Variable Annuity Account invests in mutual funds. The
results shown above reflect the deduction of the separate account level charges.
Returns at the subaccount level shown above are slightly lower than at the
mutual fund level as a result of these charges.
The remaining sections of this booklet cover the mutual funds and include
discussions of the fund results and the managers' outlook. The second section
contains the report for the Ultra Series Fund which includes the Capital
Appreciation Stock Fund, Growth and Income Stock Fund, Balanced Fund, Bond Fund,
and Money Market Fund. The third section is the report for the International
Stock Portfolio of the T. Rowe Price International Series, Inc., and the last
section has the financial information and results for the MFS(R) World
Government Series and the MFS(R) Emerging Growth Series of the MFS(R) Variable
Insurance TrustSM.
The growth of assets in the MEMBERS(R) Variable Annuity has been very strong.
The net assets in the CUNA Mutual Life Variable Account increased from just over
$124 million on 12/31/95 to over $399 million on 12/31/96. We appreciate the
trust you place in us when you make our product a part of your long term
financial portfolio. We will work hard to continue to earn your trust in 1997.
Sincerely,
/s/ Michael B. Kitchen
Michael B. Kitchen
President and Chief Executive Officer
CUNA Mutual Life Insurance Company
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ANNUITY ACCOUNT
Statement of Assets and Liabilities
December 31, 1996
Capital
Appreciation Growth and Money
Stock Income Stock Balanced Bond Market
Assets: Subaccount Subaccount Subaccount Subaccount Subaccount
<S> <C> <C> <C> <C> <C>
Investments in Ultra Series Fund:
(note 2)
Capital Appreciation Stock Fund,
4,757,746 shares at net asset
value of $14.60 per share
(cost $61,156,372) $69,455,056 $ -- $ -- $ -- $ --
Growth and Income Stock Fund,
6,153,543 shares at net asset
value of $21.32 per share
(cost $116,294,147) -- 131,212,651 -- -- --
Balanced Fund, 6,634,711 shares
at net asset value of $15.29
per share (cost $97,730,147) -- -- 101,428,944 -- --
Bond Fund, 1,881,581 shares
at net asset value of $10.33
per share (cost $19,515,665) -- -- -- 19,430,968 --
Money Market Fund, 16,285,312
shares at net asset value of
$1.00 per share
(cost $16,285,312) -- -- -- -- 16,285,312
---------- ---------- ---------- ---------- ----------
Total assets 69,455,056 131,212,651 101,428,944 19,430,968 16,285,312
---------- ---------- ---------- ---------- ----------
Liabilities:
Accrued adverse mortality and
expense charges 11,912 22,579 17,404 3,296 2,826
Other accrued expenses 1,429 2,709 2,088 396 339
---------- ---------- ---------- ---------- ----------
Total liabilities 13,341 25,288 19,492 3,692 3,165
---------- ---------- ---------- ---------- ----------
Net assets $69,441,715 $131,187,363 $101,409,452 $19,427,276 $16,282,147
========== ========== ========== ========== ==========
Units outstanding
(note 5 and note 6) 4,495,720 8,541,383 7,783,833 1,686,539 1,492,704
========== ========== ========== ========== ==========
Net asset value per unit $15.45 $15.36 $13.03 $11.52 $10.91
========== ========== ========== ========== ==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ANNUITY ACCOUNT
Statement of Assets and Liabilities
December 31, 1996
International World Emerging
Stock Governments Growth
Assets: Subaccount Subaccount Subaccount*
<S> <C> <C> <C>
Investments in Ultra Series Fund:
(note 2)
Investments in T. Rowe Price
International Fund, Inc.:
International Stock Portfolio,
2,632,817 shares at net asset
value of $12.64 per share
(cost $30,014,815) $33,278,810 $ -- $ --
Investments in MFSAE Variable
Insurance TrustSM:
World Governments Series,
1,131,677 shares at net asset
value of $10.58 per share
(cost $11,673,106) -- 11,973,140 --
Investments in MFSAE Variable
Insurance TrustSM:
Emerging Growth Series,
1,256,485 shares at net asset
value of $13.24 per share
(cost $16,525,193) -- -- 16,635,864
---------- ----------- -----------
Total assets 33,278,810 11,973,140 16,635,864
---------- ----------- -----------
Liabilities
Accrued adverse mortality and
expense charges 5,641 2,029 2,792
Other accrued expenses 677 244 335
---------- ----------- -----------
Total liabilities 6,318 2,273 3,127
---------- ----------- -----------
Net assets $33,272,492 $11,970,867 $16,632,737
========== =========== ===========
Units outstanding
(note 5 and note 6) 2,683,277 1,033,483 1,650,627
========== =========== ===========
Net asset value per unit $12.40 $11.58 $10.08
========== =========== ===========
See accompanying notes to financial statements.
<FN>
*The data is for the period beginning May 1, 1996 (date of initial activity).
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ANNUITY ACCOUNT
Statement of Operations
December 31, 1996
Capital
Appreciation Growth and Money
Stock Income Stock Balanced Bond Market
Investment income (loss): Subaccount Subaccount Subaccount Subaccount Subaccount
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Dividend income $2,616,414 $4,614,675 $5,018,706 $886,717 $604,948
Adverse mortality and expense
charges(note 3) (586,069) (992,029) (833,237) (162,630) (160,532)
Administrative charges (70,328) (119,043) (99,988) (19,516) (19,264)
-------- -------- -------- -------- --------
Net investment income (loss) 1,960,017 3,503,603 4,085,481 704,571 425,152
-------- -------- -------- -------- --------
Realized and unrealized gain (loss)
on investments:
Realized gain (loss) on security
transactions:
Proceeds from sale of securities 1,560,118 206,568 183,878 342,674 21,549,070
Cost of securities sold (1,375,699) (175,373) (170,464) (344,619) (21,549,070)
--------- --------- -------- -------- --------
Net realized gain (loss) on
security transactions 184,419 31,195 13,414 (1,945) --
Net change in unrealized
appreciation or depreciation
on investments 6,603,942 13,287,638 2,775,771 (263,632) --
--------- --------- -------- -------- --------
Net gain (loss) on investments 6,788,361 13,318,833 2,789,185 (265,577) --
--------- --------- -------- -------- --------
Net increase (decrease) in net
assets resulting from operations $8,748,378 $16,822,436 $6,874,666 $438,994 $425,152
========= ========= ======== ======== ========
International World Emerging
Stock Governments Growth
Investment income (loss): Subaccount Subaccount Subaccount*
---------- ---------- -----------
Dividend income $529,876 $ -- $137,706
Adverse mortality and expense
charges (note 3) (274,789) (112,193) (74,180)
Administrative charges (32,975) (13,463) (8,902)
-------- -------- --------
Net investment income (loss) 222,112 (125,656) 54,624
-------- -------- --------
Realized and unrealized gain (loss)
on investments:
Realized gain (loss) on security
transactions:
Proceeds from sale of securities 14,375 353,101 --
Cost of securities sold (13,251) (355,865) --
-------- -------- --------
Net realized gain (loss) on
security transactions 1,124 (2,764) --
Net change in unrealized
appreciation or depreciation
on investments 2,489,462 448,184 110,671
--------- --------- --------
Net gain (loss) on investments 2,490,586 445,420 110,671
--------- --------- --------
Net increase (decrease) in net
assets resulting from operations $2,712,698 $319,764 $165,295
========= ========= =========
See accompanying notes to financial statements.
<FN>
*The data is for the period beginning May 1, 1996 (date of initial activity).
</FN>
</TABLE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ANNUITY ACCOUNT
Statement of Changes in Net Assets
Years Ended December 31, 1996 and 1995
CAPITAL APPRECIATION STOCK SUBACCOUNT GROWTH AND INCOME STOCK SUBACCOUNT
Operations: 1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net investment income (loss) $1,960,017 $748,689 $3,503,603 $2,445,983
Net realized gain (loss) on
security transactions 184,419 1,478 31,195 6,948
Net change in unrealized appreciation
or depreciation on investments 6,603,942 1,856,614 13,287,638 1,848,620
---------- ---------- ---------- ----------
Change in net assets from operations 8,748,378 2,606,781 16,822,436 4,301,551
---------- ---------- ---------- ----------
Capital unit transactions (note 5):
Proceeds from sales of units 66,511,107 26,775,941 112,789,079 34,898,103
Cost of units repurchased (31,925,414) (6,523,112) (34,256,064) (9,194,950)
---------- ---------- ---------- ----------
Change in net assets from capital
unit transactions 34,585,693 20,252,829 78,533,015 25,703,153
---------- ---------- ---------- ----------
Increase (decrease) in net assets 43,334,071 22,859,610 95,355,451 30,004,704
Net assets:
Beginning of period 26,107,644 3,248,034 35,831,912 5,827,208
---------- ---------- ---------- ----------
End of period $69,441,715 $26,107,644 $131,187,363 $35,831,912
========== ========== ========== ==========
BALANCED SUBACCOUNT BOND SUBACCOUNT
Operations: 1996 1995 1996 1995
---- ---- ---- ----
Net investment income (loss) $4,085,481 $1,717,682 $704,571 $195,183
Net realized gain (loss) on
security transactions 13,414 4,302 (1,945) 3,149
Net change in unrealized appreciation
or depreciation on investments 2,775,771 1,148,835 (263,632) 216,889
---------- ---------- --------- ---------
Change in net assets from operations 6,874,666 2,870,819 438,994 415,221
---------- ---------- --------- ---------
Capital unit transactions (note 5):
Proceeds from sale of units 91,579,338 32,100,084 20,883,364 7,330,321
Cost of units repurchased (29,216,779) (9,369,392) (8,218,653) (2,685,189)
---------- ---------- ---------- ---------
Change in net assets from capital
unit transactions 62,362,559 22,730,692 12,664,711 4,645,132
---------- ---------- ---------- ---------
Increase (decrease) in net assets 69,237,225 25,601,511 13,103,705 5,060,353
Net assets:
Beginning of period 32,172,227 6,570,716 6,323,571 1,263,218
---------- ---------- ---------- ---------
End of period $101,409,452 $32,172,227 $19,427,276 $6,323,571
========== ========== ========== =========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ANNUITY ACCOUNT
Statement of Changes in Net Assets
Years Ended December 31, 1996 and 1995
MONEY MARKET SUBACCOUNT INTERNATIONAL STOCK SUBACCOUNT
Operations: 1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net investment income (loss) $425,152 $192,649 $222,112 $(80,827)
Net realized gain (loss) on
security transactions -- -- 1,124 3,124
Net change in unrealized appreciation
or depreciation on investments -- -- 2,489,462 873,668
---------- ---------- ---------- ----------
Change in net assets from operations 425,152 192,649 2,712,698 795,965
---------- ---------- ---------- ----------
Capital unit transactions (note 5):
Proceeds from sales of units 71,914,632 26,622,937 37,340,833 13,898,714
Cost of units repurchased (62,787,600) (22,701,986) (18,736,774) (6,004,541)
---------- ---------- ---------- ----------
Change in net assets from capital
unit transactions 9,127,032 3,920,951 18,604,059 7,894,173
---------- ---------- ---------- ----------
Increase (decrease) in net assets 9,552,184 4,113,600 21,316,757 8,690,138
Net assets:
Beginning of period 6,729,963 2,616,363 11,955,735 3,265,597
---------- ---------- ---------- ----------
End of period $16,282,147 $6,729,963 $33,272,492 $11,955,735
========== ========== ========== ==========
WORLD GOVERNMENTS SUBACCOUNT EMERGING GROWTH SUBACCOUNT*
Operations: 1996 1995 1996
---- ---- ----
Net investment income (loss) $(125,656) $486,265 $54,624
Net realized gain (loss) on
security transactions (2,764) 12,038 --
Net change in unrealized appreciation
or depreciation on investments 448,184 (114,274) 110,671
--------- --------- ---------
Change in net assets from operations 319,764 384,029 165,295
--------- --------- ---------
Capital unit transactions (note 5):
Proceeds from sale of units 14,413,481 7,213,831 21,632,015
Cost of units repurchased (8,476,180) (3,747,086) (5,164,573)
--------- --------- ---------
Change in net assets from capital
unit transactions 5,937,301 3,466,745 16,467,442
--------- --------- ---------
Increase (decrease) in net assets 6,257,065 3,850,774 16,632,737
Net assets:
Beginning of period 5,713,802 1,863,028 --
--------- --------- ---------
End of period $11,970,867 $5,713,802 $16,632,737
========= ========= =========
See accompanying notes to financial statements.
<FN>
*The data is for the period beginning May 1, 1996 (date of initial activity).
</FN>
</TABLE>
<PAGE>
CUNA MUTUAL LIFE VARIABLE ANNUITY ACCOUNT
Notes to Financial Statements
(1) Organization
The CUNA Mutual Life Variable Annuity Account (the Variable Account) is a
unit investment trust registered under the Investment Company Act of 1940
with the Securities and Exchange Commission. The Variable Account was
established as a separate investment account within CUNA Mutual Life
Insurance Company (the Company) formerly known as Century Life of America,
to receive and invest net premiums paid under variable annuity contracts
(Contracts).
Although the assets in the Variable Account are the property of the
Company, the assets in the Variable Account attributable to the Contracts
are not chargeable with liabilities arising out of any other business which
the Company may conduct. The assets of the Variable Account are available
to cover the general liabilities of the Company only to the extent that the
Variable Account's assets exceed its liabilities arising under the
Contracts. The Company has the right to transfer to the general account any
assets of the Variable Account which are in excess of reserves and other
contract liabilities. All obligations arising under the Contracts are
general corporate obligations of the Company.
(2) Significant Accounting Policies
Investments
The Variable Account currently is divided into eight subaccounts but may,
in the future, include additional subaccounts. Each subaccount invests
exclusively in shares of a single underlying fund. (The term fund is used
to mean an investment portfolio sometimes called a fund, i.e., Ultra Series
Fund, T. Rowe Price International Fund, Inc., MFSAE Variable Insurance
TrustSM, or any other open-end management investment company or unit
investment trust in which a subaccount invests.) The income, gains and
losses, realized or unrealized, from the assets allocated to each
subaccount are credited to or charged against that subaccount without
regard to income, gains or losses from any other subaccount.
The Variable Account invests in shares of Ultra Series Fund, T. Rowe Price
International Fund, Inc., and MFSAE Variable Insurance TrustSM. Each is a
management investment company of the series type with one or more funds.
Each is registered with the SEC as an open-end, management investment
company. Such registration does not involve supervision of the management
or investment practices or policies of the companies or their funds by the
SEC.
Ultra Series Fund currently has five funds available as investment options
under the Contracts while T. Rowe Price International Fund, Inc. has one
and MFSAE Variable Insurance TrustSM has two funds available as an
investment option under the Contracts. Ultra Series Fund and MFSAE Variable
Insurance TrustSM also have other funds that are not available under the
Contracts. All three companies may, in the future, create additional funds
that may or may not be available as investment options under the Contracts.
Each fund has its own investment objectives and the income, gains and
losses for each fund are determined separately for that fund.
CIMCO Inc. (CIMCO) serves as the Investment Adviser to the Ultra Series
Fund and manages its assets in accordance with general policies and
guidelines established by the board of trustees of the Ultra Series Fund.
The Company owns one half of CIMCO's outstanding stock and one half is
owned indirectly by CUNA Mutual Insurance Society.
Rowe Price-Fleming International, Inc. (RPFI) serves as the Investment
Adviser to the International Stock Portfolio and manages its assets in
accordance with general policies and guidelines established by the board of
directors of T. Rowe Price International Fund, Inc. RPFI was founded in
1979 as a joint venture between T. Rowe Price Associates, Inc. and Robert
Fleming Holdings Limited.
Massachusetts Financial Services Company (MFS) serves as the Investment
Adviser to the MFS World Governments Series and Emerging Growth Series and
manages its assets in accordance with general policies and guidelines
established by the board of trustees of MFSAE Variable Insurance TrustSM.
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.
The assets of each fund are held separate from the assets of the other
funds, and each fund is offered at a price equal to its respective net
asset value per share, without sales charge. Dividends and capital gain
distributions from each fund are reinvested in that fund. Investments in
shares of the funds are stated at market value which is the net asset value
per share as determined by the funds. Realized gains and losses from
security transactions are reported on an average cost basis. Dividend
income is recorded on the ex-dividend date.
Federal Income Taxes
Currently, no charge is made against the Variable Account for any federal,
state or local taxes (other than premium taxes) that the Company incurs or
that may be attributable to the Variable Account or the Contracts. The
Company may, however, make such a charge in the future from surrender
value, death benefits or annuity payments, as appropriate. Such taxes may
include taxes (levied by any government entity) which the Company
determines to have resulted from: (1) the establishment or maintenance of
the Variable Account, (2) receipt by the Company of purchase payments, (3)
issuance of the Contracts, or (4) the payment of annuity payments.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
(3) Fees and Charges
Organization Costs
CUNA Mutual Life Insurance Company absorbed all organization expenses of
the Variable Account.
Contract Charges
Surrender Charge (Contingent Deferred Sales Charge). No charge for sales
expenses is deducted from purchase payments at the time purchase payments
are paid. However, a surrender charge is deducted upon surrender or partial
withdrawal of purchase payments within 7 years of their being paid and, in
certain circumstances, upon payment of a death benefit or the election of
certain annuity payment options.
For purchase payments withdrawn or surrendered within one year of having
been paid, the charge is 7% of the amount of the payment withdrawn or
surrendered. For each purchase payment, the surrender charge decreases by
1% for each full year that has elapsed since the payment was made. No
surrender charge is assessed upon the withdrawal or surrender of the
contract value in excess of aggregate purchase payments or on purchase
payments made more than 7 years prior to the withdrawal or surrender.
Subject to certain restrictions. for the first partial withdrawal (or
surrender) in each contract year, an amount equal to 10% of aggregate
purchase payments subject to a surrender charge (as of the time of
withdrawal or surrender) may be surrendered without a surrender charge. The
surrender charge also may be waived in certain circumstances as provided in
the Contracts.
Annual Contract Fee. On each contract anniversary (or upon surrender of the
Contract) prior to the annuity date, the Company deducts an annual contract
fee of $30 from the variable contract value. After the annuity date, the
Company deducts this fee from variable annuity payments. A pro-rated
portion of the fee is deducted upon annuitization of a Contract except on a
contract anniversary.
Transfer Fee. No charge is made for transfers, however, the Company
reserves the right to charge $10 for the 13th and each subsequent transfer
during a Contract year.
Premium Taxes. If state or other premium taxes are applicable to a
Contract, they will be deducted either: (a) from purchase payments as they
are received, (b) from contract value upon surrender or partial withdrawal,
(c) upon application of adjusted contract value to an annuity payment
option, or (d) upon payment of a death benefit. The Company, however,
reserves the right to deduct premium taxes at the time it pays such taxes.
Variable Account Charges
Mortality and Expense Risk Charge. The Company deducts a daily mortality
and expense risk charge to compensate it for assuming certain mortality and
expense risks. The charge is deducted from the assets of the Variable
Account at an annual rate of 1.25% (approximately 0.85% for mortality risk
and 0.40% for expense risks).
Asset-Based Administration Charge. The Company deducts a daily
administration charge to compensate it for certain expenses it incurs in
administration of the Contract. The charge is deducted from the assets of
the Variable Account at an annual rate of 0.15%.
(4) Investment Transactions
The cost of shares purchased, including reinvestment of dividend
distributions, during the year ended December 31, 1996, was as follows:
<PAGE>
Capital Appreciation Stock Fund............................ $38,116,184
Growth and Income Stock Fund............................... 82,264,387
Balanced Fund.............................................. 66,647,750
Bond Fund.................................................. 13,714,928
Money Market Fund.......................................... 31,103,634
International Stock Portfolio.............................. 18,845,494
World Governments Series................................... 6,166,365
Emerging Growth............................................ 16,525,193
-----------
$273,383,935
===========
(5) Unit Activity from Contract Transactions
Transactions in units of each subaccount of the Variable Account for the
years ended December 31, 1995 and 1996, were as follows:
<TABLE>
<CAPTION>
Capital
Appreciation Growth and Money
Stock Income Stock Balanced Bond Market
Subaccount Subaccount Subaccount Subaccount Subaccount
<S> <C> <C> <C> <C> <C>
Units outstanding at December 31, 1994 324,922 593,599 664,679 127,666 257,622
Units sold 2,250,573 2,997,868 2,868,364 676,502 2,565,795
Units repurchased (550,906) (783,591) (834,994) (247,419) (2,185,506)
-------- -------- -------- -------- --------
Units outstanding at December 31, 1995 2,024,589 2,807,876 2,698,049 556,749 637,911
-------- -------- -------- -------- --------
Units sold 4,725,115 8,201,765 7,449,013 1,861,200 6,697,714
Units repurchased (2,253,984) (2,468,258) (2,363,229) (731,410) (5,842,921)
-------- -------- -------- -------- --------
Units outstanding at December 31, 1996 4,495,720 8,541,383 7,783,833 1,686,539 1,492,704
======== ======== ======== ======== ========
International World Emerging
Stock Governments Growth
Subaccount Subaccount Subaccount*
<S> <C> <C> <C>
Units outstanding at December 31, 1994 326,923 186,155 --
Units sold 1,336,544 663,603
Units repurchased (572,786) (343,768) --
-------- -------- --------
Units outstanding at December 31, 1995 1,090,681 505,990 --
-------- -------- --------
Units sold 3,189,527 1,277,826 2,162,251
Units repurchased (1,596,931) (750,333) (511,624)
-------- -------- --------
Units outstanding at December 31, 1996 2,683,277 1,033,483 1,650,627
======== ======== ========
<FN>
*The data is for the period beginning May 1, 1996 (date of initial activity).
</FN>
</TABLE>
(6) Annuitization
As of December 31, 1996, there were no annuitized contracts.
(7) Condensed Financial Information
The table below gives per unit information about the financial history of
each subaccount for each period.
<TABLE>
<CAPTION>
Capital Appreciation Growth and Income Balanced Bond
Stock Subaccount Stock Subaccount Subaccount Subaccount
Net asset value: 1996* 1995 1996* 1995 1996* 1995 1996* 1995
----- ---- ----- ---- ----- ---- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of period $12.90 $10.00 $12.76 $9.82 $11.92 $9.89 $11.36 $9.89
End of period 15.45 12.90 15.36 12.76 13.03 11.92 11.52 11.36
Percentage increase in unit
value during period 19.77% 29.0% 20.38% 29.9% 9.31% 20.5% 1.41% 14.9%
Number of units outstanding
at end of period 4,495,720 2,024,589 8,541,383 2,807,876 7,783,833 2,698,049 1,686,539 556,749
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Money Market International World Governments Emerging Growth
Subaccount Stock Subaccount Subaccount Subaccount
Net asset value: 1996* 1995 1996* 1995 1996* 1995 1996**
----- ---- ----- ---- ----- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning of period $10.55 $10.16 $10.96 $9.99 $11.29 $10.01 $10.00
End of period 10.91 10.55 12.40 10.96 11.58 11.29 10.08
Percentage increase in unit
value during period 3.41% 3.8% 13.14% 9.7% 2.57% 12.8% 0.80%
Number of units outstanding
at end of period 1,492,704 637,911 2,683,277 1,090,681 1,033,483 505,990 1,650,627
For the Money Market Subaccount, the "seven-day average yield" for the seven
days ended December 31, 1996, was 3.3% and the "effective yield" for that period
was 3.4%.
<FN>
* 1996 data is for the year ended December 31, 1996.
**1996 data is for the eight-month period ended December 31, 1996.
</FN>
</TABLE>
<PAGE>
CUNA MUTUAL LIFE VARIABLE ANNUITY ACCOUNT
INDEPENDENT AUDITORS' REPORT
The Board of Directors
CUNA Mutual Life Insurance Company and Contract Owners of CUNA Mutual Life
Variable Annuity Account:
We have audited the statements of assets and liabilities of the Capital
Appreciation Stock Subaccount, Growth and Income Stock Subaccount, Balanced
Subaccount, Bond Subaccount, Money Market Subaccount, International Stock
Subaccount, World Governments Subaccount, and the Emerging Growth Subaccount of
the CUNA Mutual Life Variable Annuity Account as of December 31, 1996, the
related statements of operations for the year then ended; changes in net assets
and the condensed financial information for each of the years in the two-year
(eight months for Emerging Growth Subaccount) period then ended. These financial
statements and condensed financial information are the responsibility of the
Account's management. Our responsibility is to express an opinion on these
financial statements and condensed financial information 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 condensed
financial information are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Investments owned at December 31, 1996 were verified
by audit of the statements of assets and liabilities of the underlying fund of
Ultra Series Fund and confirmation with MFS Variable Insurance Trust and T. Rowe
Price. 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 condensed financial information
referred to above present fairly, in all material respects, the financial
position of the Capital Appreciation Stock Subaccount, Growth and Income Stock
Subaccount, Balanced Subaccount, Bond Subaccount, Money Market Subaccount,
International Stock Subaccount, World Governments Subaccount, and the Emerging
Growth Subaccount of the CUNA Mutual Life Variable Annuity Account as of
December 31, 1996, the results of their operations for the year then ended;
changes in their net assets and the condensed financial information for each of
the years in the two-year (eight months for Emerging Growth Subaccount) period
then ended, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Des Moines, Iowa
February 7, 1997
