File Nos. 33-79170
811-8524
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 4 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 5 [X]
(Check appropriate box or boxes.)
EQUITABLE LIFE INSURANCE COMPANY OF IOWA SEPARATE ACCOUNT A
___________________________________________________________
(Exact Name of Registrant)
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
________________________________________
(Name of Depositor)
604 Locust Street, Des Moines, Iowa 50309
____________________________________________________ __________
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (800) 344-6860
NAME AND ADDRESS OF AGENT FOR SERVICE
John A. Merriman, Secretary & General Counsel
Equitable Life Insurance Company of Iowa
604 Locust Street
Des Moines, Iowa 50309
(515) 245-6911
COPIES TO:
Judith A. Hasenauer and G. Thomas Sullivan
Blazzard, Grodd & Hasenauer, P.C. Nyemaster, Goode,
P.O. Box 5108 McLaughlin, Voigts,
Westport, CT 06881 West, Hansell & O'Brien
(203) 226-7866 699 Walnut Street
Des Moines, Iowa 50309
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b) of Rule 485
_X_ on April 1, 1996 pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
___ on (date) pursuant to paragraph (a)(1) of Rule 485
If appropriate, check the following:
___ This Post-Effective Amendment designates a new effective date for a
previously filed Post-Effective Amendment.
Registrant has declared that it has registered an indefinite number or amount
of securities in accordance with Rule 24f-2 under the Investment Company Act
of 1940. Registrant filed its Rule 24f-2 Notice for the fiscal year ended
December 31, 1995 on or about February 27, 1996.
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CROSS REFERENCE SHEET
(required by Rule 495)
Item No. Location
- -------- -------------------
PART A
Item 1. Cover Page................................. Cover Page
Item 2. Definitions................................ Definitions
Item 3. Synopsis................................... Highlights
Item 4. Condensed Financial Information............ Not Applicable
Item 5. General Description of Registrant,
Depositor, and Portfolio Companies......... The Company; The
Separate Account;
EquiSelect Series
Trust; Smith
Barney/Travelers
Series Fund Inc.;
Smith Barney Series
Fund; Warburg Pincus
Trust
Item 6. Deductions and Expenses.................... Charges and
Deductions
Item 7. General Description of Variable
Annuity Contracts.......................... The Contracts
Item 8. Annuity Period............................. Annuity Provisions
Item 9. Death Benefit.............................. The Contracts;
Annuity
Provisions
Item 10. Purchases and Contract Value............... Purchase Payments
and Contract Value
Item 11. Redemptions................................ Withdrawals
Item 12. Taxes...................................... Tax Status
Item 13. Legal Proceedings.......................... Legal Proceedings
Item 14. Table of Contents of the Statement
of Additional Information.................. Table of Contents
of the Statement
of Additional
Information
</TABLE>
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CROSS REFERENCE SHEET (CONT'D)
(required by Rule 495)
Item No. Location
- -------- --------------------
PART B
Item 15. Cover Page................................. Cover Page
Item 16. Table of Contents.......................... Table of Contents
Item 17. General Information and History............ The Company
Item 18. Services................................... Not Applicable
Item 19. Purchase of Securities Being Offered....... Not Applicable
Item 20. Underwriters............................... Distributor
Item 21. Calculation of Performance Data............ Performance
Information
Item 22. Annuity Payments........................... Annuity Provisions
Item 23. Financial Statements....................... Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate Item so numbered in Part C to this Registration Statement.
EXPLANATORY NOTE
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This Registration Statement contains ten Portfolios of Equi-Select Series
Trust, four Portfolios of Smith Barney/Travelers Series Fund Inc., four
Portfolios of Smith Barney Series Fund and one Portfolio of Warburg Pincus
Trust. Two versions of Prospectuses will be created from this Registration
Statement. The distribution system for each version of the Prospectus is
different. One version of the Prospectus will contain the ten Portfolios of
Equi-Select Series Trust and one Portfolio of Warburg Pincus Trust (Version
I). Currently, the other version of the Prospectus will contain the
Research, OTC and Total Return Portfolios of Equi-Select Series Trust,
the four Portfolios of Smith Barney/Travelers Series Fund Inc., and the
Appreciation Portfolio of Smith Barney Series Fund (Version II). (Prior
to the effective date of this Registration Statement Version II
contained the Research Portfolio of Equi-Select Series Trust and the
four Portfolios of Smith Barney/Travelers Series Fund Inc.) These
Prospectuses will be filed with the Commission pursuant to Rule 497.
The Registrant undertakes to update this Explanatory Note each time a
Post-Effective Amendment is filed. The following Prospectuses were filed
pursuant to Rule 497 regarding this Registration Statement:
1. On February 22, 1996, a Prospectus was filed pursuant to Rule 497
which contained the ten Portfolios of Equi-Select Series Trust.
2. On February 22, 1996, a Prospectus was filed pursuant to Rule 497
which contained the Research, OTC and Total Return Portfolios of Equi-
Select Series Trust, the four Portfolios of Smith Barney/Travelers Series Fund
Inc. and the Appreciation Portfolio of the Smith Barney Series Fund.
==============================================================================
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
Home Office & Annuity Service Center: Mailing Address:
604 Locust Street P.O. Box 9271
Des Moines, Iowa 50309 Des Moines, Iowa 50306-9271
(800) 344-6864
INDIVIDUAL FLEXIBLE PURCHASE PAYMENT DEFERRED VARIABLE AND
FIXED ANNUITY CONTRACTS
ISSUED BY
EQUITABLE LIFE INSURANCE COMPANY OF IOWA SEPARATE ACCOUNT A
AND
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
The Individual Flexible Purchase Payment Deferred Variable and Fixed Annuity
Contracts (the "Contracts") described in this Prospectus provide for
accumulation of Contract Values on a fixed and variable basis and payment of
monthly annuity payments on a fixed basis. The Contracts are designed for use
by individuals in retirement plans on a Qualified or Non-Qualified basis.
(See "Definitions" on Page __.)
At the Owner's direction, Purchase Payments for the Contracts will be
allocated to a segregated investment account of Equitable Life Insurance
Company of Iowa (the "Company") which account has been designated Equitable
Life Insurance Company of Iowa Separate Account A (the "Separate Account") or
to the Company's Fixed Account. Under certain circumstances, however,
Purchase Payments may initially be allocated to the Money Market Subaccount of
the Separate Account. (See "Highlights" on Page __.) The Separate Account
invests in shares of the following Investment Options: Equi-Select Series
Trust (see "Equi-Select Series Trust" on Page __), Smith Barney/Travelers
Series Fund Inc. (see "Smith Barney/Travelers Series Fund Inc." on Page __),
Smith Barney Series Fund (see "Smith Barney Series Fund" on Page __) and
Warburg Pincus Trust (see "Warburg Pincus Trust" on Page __).
Equi-Select Series Trust is a series fund with twelve Portfolios, ten of
which are currently available in connection with the Contracts: Advantage
Portfolio, Government Securities Portfolio, International Fixed Income
Portfolio, International Stock Portfolio, Money Market Portfolio,
Mortgage-Backed Securities Portfolio, OTC Portfolio, Research Portfolio,
Short-Term Bond Portfolio, Total Return Portfolio, Growth & Income Portfolio
and Value + Growth Portfolio. SHARES OF THE GOVERNMENT SECURITIES PORTFOLIO
AND THE SHORT-TERM BOND PORTFOLIO ARE NO LONGER OFFERED FOR SALE. SHARES
OF THE INTERNATIONAL STOCK PORTFOLIO WILL NO LONGER BE OFFERED FOR SALE
AFTER MAY 17, 1996. Smith Barney/Travelers Series Fund Inc. is a series
fund with twelve Portfolios, four of which are currently available in
connection with the Contracts: Smith Barney Income and Growth Portfolio,
Smith Barney International Equity Portfolio, Smith Barney High Income
Portfolio and Smith Barney Money Market Portfolio. Smith Barney Series Fund
is a series fund with ten Portfolios, four of which are currently
available in connection with the Contracts: Appreciation Portfolio, Equity
Income Portfolio, Equity Index Portfolio, and Intermediate High Grade
Portfolio. Warburg Pincus Trust is a series fund with two portfolios,
one of which is currently available in connection with the Contracts:
International Equity Portfolio.
Shares of certain Portfolios of the Investment Options may not be available
for sale in all states. The Prospectuses of the Investment Options may
contain Portfolios not currently available in connection with the
Contracts.
This Prospectus concisely sets forth the information a prospective investor
should know before investing. Additional information about the Contracts is
contained in the Statement of Additional Information which is available at no
charge. The Statement of Additional Information has been filed with the
Securities and Exchange Commission and is incorporated herein by reference.
The Table of Contents of the Statement of Additional Information can be found
on Page __ of this Prospectus. For the Statement of Additional Information,
call (800) 344-6864 or write to the Company at the address listed above.
THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY FINANCIAL INSTITUTION AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
INVESTMENT IN THE CONTRACTS IS SUBJECT TO RISK THAT MAY CAUSE THE VALUE OF THE
CONTRACT OWNER'S INVESTMENT TO FLUCTUATE, AND WHEN THE CONTRACTS ARE
SURRENDERED, THE VALUE MAY BE HIGHER OR LOWER THAN THE PURCHASE PAYMENTS.
INQUIRIES:
Any inquiries can be made by telephone or in writing to Equitable Life
Insurance Company of Iowa at (800) 344-6864 or P.O. Box 9271, Des Moines,
Iowa 50306-9271.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Prospectus and the Statement of Additional Information are dated
April 1, 1996.
This Prospectus should be kept for future reference.
TABLE OF CONTENTS
PAGE
DEFINITIONS
HIGHLIGHTS
TABLE
CONDENSED FINANCIAL INFORMATION
THE COMPANY
THE SEPARATE ACCOUNT
INVESTMENT OPTIONS
Equi-Select Series Trust
Smith Barney/Travelers Series Fund Inc.
Smith Barney Series Fund
Warburg Pincus Trust
Voting Rights
Substitution of Securities
CHARGES AND DEDUCTIONS
Deduction for Withdrawal Charge (Sales Load)
Reduction or Elimination of the Withdrawal Charge
Deduction for Mortality and Expense Risk Charge
Deduction for Administrative Charge
Deduction for Annual Contract Maintenance Charge
Deduction for Income Taxes
Deduction for Expenses of the Investment Options
Deduction for Transfer Fee
THE CONTRACTS
Ownership
Annuitant
Assignment
Beneficiary
PURCHASE PAYMENTS AND CONTRACT VALUE
Purchase Payments
Allocation of Purchase Payments
Dollar Cost Averaging
Automatic Portfolio Rebalancing
Contract Value
Accumulation Unit
TRANSFERS
WITHDRAWALS
Automatic Withdrawals
Texas Optional Retirement Program
Suspension of Payments or Transfers
CONTRACT PROCEEDS
Maturity Proceeds
Death Proceeds
Death of the Annuitant
Death of Owner
Fixed Payment Plans
Plan A. Interest
Plan B. Fixed Period
Plan C. Life Income
DISTRIBUTOR
PERFORMANCE INFORMATION
Money Market Portfolio
Other Portfolios
TAX STATUS
General
Diversification
Multiple Contracts
Contracts Owned by Other than Natural Persons
Tax Treatment of Assignments
Income Tax Withholding
Qualified Plans
Tax Treatment of Withdrawals -- Qualified Contracts
Tax-Sheltered Annuities -- Withdrawal Limitations
FINANCIAL STATEMENTS
LEGAL PROCEEDINGS
TABLE OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
DEFINITIONS
ACCUMULATION PERIOD--The period during which Purchase Payments may be made
prior to the Maturity Date.
ACCUMULATION UNIT--A unit of measure used to calculate the Contract Value in a
Subaccount of the Separate Account prior to the Maturity Date.
AGE--The Annuitant's age on his or her last birthday.
ANNUITANT--The natural person on whose life Annuity Payments are based.
ANNUITY PAYMENTS--The series of payments after the Maturity Date under the
Payment Plan selected.
BENEFICIARY--The person the Owner has chosen to receive the Proceeds on the
Annuitant's death as shown on the Company's records. There may be different
classes of Beneficiaries, such as primary and contingent. These classes set
the order of payment. There may be more than one Beneficiary in a class.
COMPANY--Equitable Life Insurance Company of Iowa.
CONTRACT ANNIVERSARY--An anniversary of the Issue Date of the Contract.
CONTRACT YEAR--One year from the Issue Date and from each Contract
Anniversary.
FIXED ACCOUNT--The Company's general investment account which contains all the
assets of the Company with the exception of the Separate Account and other
segregated asset accounts.
INVESTMENT OPTION--An investment entity the Company may make available from
time to time.
ISSUE DATE/DATE OF ISSUE--The effective date of the Contract.
MATURITY DATE--The date on which Annuity Payments begin.
NON-QUALIFIED CONTRACTS--Contracts issued under non-qualified plans which do
not receive favorable tax treatment under Sections 401, 403(b) or 408 of the
Internal Revenue Code of 1986, as amended (the "Code").
OWNER--The person(s) who owns the Contract. The Owner may be someone other
than the Annuitant. There may be Joint Owners.
PORTFOLIO--A segment of an Investment Option which constitutes a separate and
distinct class of shares.
PROCEEDS--Proceeds are the amounts payable under the Contract.
PURCHASE PAYMENT--An amount paid to the Company to provide benefits under the
Contract. A Purchase Payment does not include transfers between the Separate
Account and the Fixed Account or among Subaccounts.
PURCHASE PAYMENT ANNIVERSARY--The anniversary of a Purchase Payment.
QUALIFIED CONTRACTS--Contracts issued under qualified plans which receive
favorable tax treatment under Sections 401, 403(b) or 408 of the Code.
SEPARATE ACCOUNT--A separate investment account of the Company designated as
Equitable Life Insurance Company of Iowa Separate Account A, into which
Purchase Payments or Contract Values may be allocated.
SUBACCOUNT--A segment of the Separate Account representing an investment in an
Investment Option.
VALUATION DATE--The Separate Account will be valued each day that the New York
Stock Exchange and the Company's Annuity Service Center both are open for
business.
VALUATION PERIOD--The period beginning at the close of business of the New
York Stock Exchange on each Valuation Date and ending at the close of business
for the next succeeding Valuation Date.
HIGHLIGHTS
At the Owner's direction, Purchase Payments for the Contracts will be
allocated to a segregated investment account of Equitable Life Insurance
Company of Iowa (the "Company") which account has been designated Equitable
Life Insurance Company of Iowa Separate Account A (the "Separate Account") or
to the Company's Fixed Account. Under certain circumstances, however,
Purchase Payments may initially be allocated to the Money Market Subaccount of
the Separate Account (see below). The Separate Account invests in shares of
Equi-Select Series Trust (see "Equi-Select Series Trust" on Page __), Smith
Barney/Travelers Series Fund Inc. (See "Smith Barney/Travelers Series Fund
Inc." on Page __), Smith Barney Series Fund (see "Smith Barney Series Fund"
on Page __) and Warburg Pincus Trust (see "Warburg Pincus Trust" on Page__).
The Separate Account may invest in other Investment Options. Owners bear the
investment risk for all amounts allocated to the Separate Account.
Within twenty (20) days of the date of receipt of the Contract by the Owner
(or within ten (10) days of the date of receipt with respect to the
circumstances described in (a) and (b) below or in states where required or,
within thirty (30) days in the case of a Contract issued in the State of
California to an individual who is sixty (60) years of age or older, it may be
returned by delivering or mailing it to the Company at its Annuity Service
Center. When the Contract is received at the Annuity Service Center, the
Company will refund the Contract Value computed at the end of the Valuation
Period during which the Contract is received by the Company except in the
following circumstances: (a) where the Contract is purchased pursuant to an
Individual Retirement Annuity; (b) in those states which require the Company
to refund Purchase Payments, less withdrawals; or (c) in the case of Contracts
(including Contracts purchased pursuant to an Individual Retirement Annuity)
which are deemed by certain states to be replacing an existing annuity or
insurance contract and which require the Company to refund Purchase Payments,
less withdrawals. With respect to the circumstances described in (a), (b) and
(c) above, the Company will refund the greater of Purchase Payments, less any
withdrawals, or the Contract Value, and will allocate initial purchase
payments to the Money Market Subaccount until the expiration of fifteen days
from the Issue Date (or twenty-five days in the case of Contracts described
under (c) above). Upon the expiration of the fifteen day period (or
twenty-five day period with respect to Contracts described under (c)), the
Subaccount value of the Money Market Subaccount will be allocated to the
Separate Account or Fixed Account in accordance with the election made by the
Owner in the Application. In Pennsylvania, when the Contract is purchased
pursuant to an Individual Retirement Annuity and is not deemed to be replacing
an existing annuity or insurance contract, the Owner may return the Contract
within twenty (20) days of receipt. Further, in Pennsylvania when the
Contract is received at the Annuity Service Center during the first seven
days, the Company will refund the greater of Purchase Payments, less
withdrawals or the Contract Value, thereafter (days 8-20), the Company will
refund the Contract Value computed at the end of the Valuation Period during
which the Contract is received by the Company. In Oregon, when the Contract is
purchased pursuant to an Individual Retirement Annuity, the Owner may return
the Contract within twenty (20) days of receipt. Further, when the Contract is
received at the Annuity Service Center during the first ten days, the Company
will refund the greater of the initial Purchase Payment, less any withdrawals
or the Contract Value as of the date of cancellation. Thereafter (days 11-20),
the Company will refund the Contract Value as of the date of cancellation. The
initial Purchase Payment will be allocated to the Money Market Sub-Account as
described above.
A Withdrawal Charge (sales load) may be deducted in the event of a withdrawal
of all or a portion of the Contract Value. The Withdrawal Charge percentages
are based upon the number of Purchase Payment Anniversaries that Purchase
Payments have remained in the Contract before being withdrawn:
TABLE OF WITHDRAWAL CHARGES
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PURCHASE PAYMENT ANNIVERSARY WITHDRAWAL CHARGE
- -------------------------------- ------------------------------------
1 8% of the Purchase Payment withdrawn
2 7% of the Purchase Payment withdrawn
3 6% of the Purchase Payment withdrawn
4 5% of the Purchase Payment withdrawn
5 4% of the Purchase Payment withdrawn
6 3% of the Purchase Payment withdrawn
7 2% of the Purchase Payment withdrawn
8 1% of the Purchase Payment withdrawn
9 and after 0% of the Purchase Payment withdrawn
</TABLE>
At any time, the Owner may make a withdrawal without the imposition of a
Withdrawal Charge of an amount equal to 10% of the total of all Purchase
Payments at the beginning of the Contract Year, less any Purchase Payments
previously withdrawn. Any withdrawals without a Withdrawal Charge not used in
a Contract Year may not be used in any subsequent Contract Year. (See "Charges
and Deductions -- Deduction for Withdrawal Charge (Sales Load)" on Page __.)
With respect to the assessment of a Withdrawal Charge, the distribution of
Purchase Payments from within a Subaccount or the Fixed Account is on a
first-in, first-out basis. (See "Withdrawals" on Page __.)
There is a Mortality and Expense Risk Charge which is equal, on an annual
basis, to 1.25% of the average daily net asset value of the Separate Account.
This Charge compensates the Company for assuming the mortality and expense
risks under the Contracts. (See "Charges and Deductions -- Deduction for
Mortality and Expense Risk Charge" on Page __.)
There is an Administrative Charge which is equal, on an annual basis, to .15%
of the average daily net asset value of the Separate Account. This Charge
compensates the Company for costs associated with the administration of the
Contracts and the Separate Account. (See "Charges and Deductions -- Deduction
for Administrative Charge" on Page __.)
There is an Annual Contract Maintenance Charge of $30 each Contract Year prior
to the Maturity Date. (See "Charges and Deductions -- Deduction for Annual
Contract Maintenance Charge" on Page __.)
Premium taxes or other taxes payable to a state or other governmental entity
will be charged against the Contract Values. Premium taxes generally range
from 0% to 4%. (See "Charges and Deductions -- Deduction for Premium Taxes"
on Page __.)
Under certain circumstances, a Transfer Fee may be assessed when an Owner
transfers Contract Values from one Subaccount to another Subaccount or to or
from the Fixed Account. (See "Charges and Deductions -- Deduction for
Transfer Fee" on Page __.)
There is a ten percent (10%) federal income tax penalty applied to the income
portion of any distribution from Non-Qualified Contracts. However, the
penalty is not imposed on amounts received: (a) after the taxpayer reaches age
59 1/2; (b) after the death of the Owner; (c) if the taxpayer is totally
disabled (for this purpose disability is as defined in Section 72(m)(7) of the
Code); (d) in a series of substantially equal periodic payments made not less
frequently than annually for the life (or life expectancy) of the taxpayer and
his or her Beneficiary; (e) under an immediate annuity; or (f) which are
allocable to purchase payments made prior to August 14, 1982. The Contract
provides that upon the death of the Annuitant prior to the Maturity Date, the
Death Proceeds will be paid to the named Beneficiary. Such payments made upon
the death of the Annuitant who is not the Owner of the Contract do not qualify
for the death of Owner exception described above, and will be subject to the
ten percent (10%) distribution penalty unless the Beneficiary is 59 1/2 or one
of the other exceptions to the penalty applies. For federal income tax
purposes, withdrawals are deemed to be on a last-in, first-out basis.
Separate tax withdrawal penalties and restrictions apply to Qualified
Contracts. (See "Tax Status -- Tax Treatment of Withdrawals -- Qualified
Contracts" on Page __.) For a further discussion of the taxation of the
Contracts, see "Tax Status" on Page __.
Withdrawals of amounts attributable to contributions made pursuant to a salary
reduction agreement (as defined in Section 403(b)(11) of the Code) are limited
to circumstances only when the Owner attains age 59 1/2, separates from
service, dies, becomes disabled (within the meaning of Section 72(m)(7) of the
Code) or in the case of hardship. Withdrawals for hardship are restricted to
the portion of the Owner's Contract Value which represents contributions made
by the Owner and does not include any investment result. The limitations on
withdrawals became effective on January 1, 1989, and apply only to: (1) salary
reduction contributions made after December 31, 1988; (2) income attributable
to such contributions; and (3) income attributable to amounts held as of
December 31, 1988. The limitations on withdrawals do not affect rollovers or
transfers between certain Qualified Plans. Tax penalties may also apply.
(See "Tax Status -- Tax Treatment of Withdrawals -- Qualified Contracts" on
Page __.) Owners should consult their own tax counsel or other tax adviser
regarding any distributions. (See "Tax Status -- Tax Sheltered Annuities --
Withdrawal Limitations" on Page __.)
See "Tax Status -- Diversification" for a discussion of owner control of the
underlying investments in a variable annuity contract.
Because of certain exemptive and exclusionary provisions, interests in the
Fixed Account are not registered under the Securities Act of 1933 and the
Fixed Account is not registered as an investment company under the Investment
Company Act of 1940, as amended. Accordingly, neither the Fixed Account nor
any interests therein are subject to the provisions of these Acts and the
Company has been advised that the staff of the Securities and Exchange
Commission has not reviewed the disclosures in the Prospectus relating to the
Fixed Account. Disclosures regarding the Fixed 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.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA SEPARATE ACCOUNT A
FEE TABLE
OWNER TRANSACTION EXPENSES
Withdrawal Charge (see Note 2 below)
(as a percentage of Purchase Payments withdrawn)
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PURCHASE PAYMENT ANNIVERSARY CHARGE
- -------------------------------- -------
1 8%
2 7%
3 6%
4 5%
5 4%
6 3%
7 2%
8 1%
9+ 0
</TABLE>
Transfer Fee (see Note 3 below) No charge for first 12 transfers in a
Contract Year; thereafter the fee is the
lesser of 2% of the Contract Value trans-
ferred or an amount not greater than $25.
Annual Contract Maintenance Charge $30 per Contract per year
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
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Mortality and Expense Risk Charge 1.25%
Administrative Charge .15%
-----
Total Separate Account Annual Expenses 1.40%
</TABLE>
EQUI-SELECT SERIES TRUST'S ANNUAL EXPENSES
(as a percentage of the average daily net assets of a Portfolio)
<TABLE>
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TOTAL
MANAGEMENT OTHER ANNUAL
FEES* EXPENSES** EXPENSES
------------- ------------ ----------
Advantage Portfolio .50 % .30 % .80 %
Government Securities Portfolio .75 % .50 % 1.25 %
International Fixed Income Portfolio .85 % .75 % 1.60 %
International Stock Portfolio .80 % .75 % 1.55 %
Money Market Portfolio .375% .30 % .675 %
Mortgage-Backed Securities Portfolio .75 % .50 % 1.25 %
OTC Portfolio .80 % .75 % 1.55 %
Research Portfolio .80 % .75 % 1.55 %
Short-Term Bond Portfolio .65 % .30 % .95 %
Total Return Portfolio .80 % .75 % 1.55 %
Growth & Income Portfolio .95 % .75 % 1.70 %
Value + Growth Portfolio .95 % .75 % 1.70 %
<FN>
* PRIOR TO OCTOBER 6, 1995, EQUITABLE INVESTMENT SERVICES, INC. ("EISI"),
THE TRUST'S INVESTMENT ADVISER, WAIVED ITS MANAGEMENT FEES FOR EACH OF THE
PORTFOLIOS, EXCEPT THE GROWTH & INCOME PORTFOLIO AND THE VALUE + GROWTH PORTFOLIO
WHICH COMMENCED INVESTMENT OPERATIONS ON APRIL 1, 1996.
** BEGINNING OCTOBER 6, 1995, EISI HAS UNDERTAKEN TO REIMBURSE EACH
PORTFOLIO FOR ALL OPERATING EXPENSES, EXCLUDING MANAGEMENT FEES, THAT EXCEED
.30% OF THE AVERAGE DAILY NET ASSETS OF THE ADVANTAGE, SHORT-TERM BOND AND
MONEY MARKET PORTFOLIOS, .50% OF THE AVERAGE DAILY NET ASSETS OF THE
MORTGAGE-BACKED SECURITIES AND GOVERNMENT SECURITIES PORTFOLIOS AND .75% OF
THE AVERAGE DAILY NET ASSETS OF THE INTERNATIONAL STOCK, INTERNATIONAL FIXED
INCOME, OTC, TOTAL RETURN AND RESEARCH PORTFOLIOS AND BEGINNING APRIL 1, 1996
WITH GROWTH & INCOME PORTFOLIO AND VALUE + GROWTH PORTFOLIO. THIS VOLUNTARY
EXPENSE REIMBURSEMENT CAN BE TERMINATED AT ANY TIME.
</TABLE>
SMITH BARNEY/TRAVELERS SERIES FUND INC.'S ANNUAL EXPENSES
(as a percentage of the average daily net assets of a Portfolio)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Total
Management Other Annual
Fees Expenses Expenses
----------- --------- ---------
Smith Barney Income and Growth Portfolio* .65 % .29% .94%
Smith Barney International Equity Portfolio .90 % .54% 1.44%
Smith Barney High Income Portfolio* .60 % .47% 1.07%
Smith Barney Money Market Portfolio* .60 % .34% .94%
<FN>
* SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC., THE FUND'S INVESTMENT
MANAGER, WAIVED ALL OR PART OF ITS MANAGEMENT FEES FOR THE YEAR ENDED OCTOBER
31, 1995 FOR THE SMITH BARNEY INCOME AND GROWTH PORTFOLIO, SMITH BARNEY HIGH
INCOME PORTFOLIO AND SMITH BARNEY MONEY MARKET PORTFOLIO SUCH THAT THE ACTUAL
TOTAL ANNUAL EXPENSES CHARGED TO EACH PORTFOLIO IN 1995 WERE .73%, .70% AND
.65%, RESPECTIVELY. THIS VOLUNTARY FEE WAIVER CAN BE TERMINATED AT ANY TIME.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SMITH BARNEY SERIES FUND'S ANNUAL EXPENSES
(as a percentage of the average daily net
assets of a Portfolio)
TOTAL
MANAGEMENT OTHER OPERATING
FEES EXPENSES EXPENSES
----------- --------- ----------
Appreciation Portfolio 0.75 % 0.13% 0.88%
Equity Income Portfolio 0.65 % 0.19% 0.84%
Equity Index Portfolio 0.60 % 0.40% 1.00%
Intermediate High Grade Portfolio 0.60 % 0.25% 0.85%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
WARBURG PINCUS TRUST'S ANNUAL EXPENSES
(as a percentage of the average daily net
assets of a Portfolio)
TOTAL
MANAGEMENT OTHER OPERATING
FEES EXPENSES EXPENSES
----------- --------- ----------
International Equity Portfolio* .27% 1.17% 1.44%
<FN>
* WARBURG, PINCUS COUNSELLORS,INC. THE TRUST'S INVESTMENT ADVISER, WAIVED
PART OF ITS MANAGEMENT FEE AND REIMBURSED CERTAIN EXPENSES FOR THE FISCAL PERIOD
ENDED DECEMBER 31, 1995 FOR THE INTERNATIONAL EQUITY PORTFOLIO. WITHOUT SUCH
WAIVER AND REIMBURSEMENT, MANAGEMENT FEES WOULD HAVE EQUALED 1.00%, OTHER
EXPENSES WOULD HAVE EQUALED 1.21% AND TOTAL PORTFOLIO EXPENSES WOULD HAVE EQUALED
2.21%. WARBURG, PINCUS COUNSELLORS, INC., HAD UNDERTAKEN TO REDUCE OR OTHERWISE
LIMIT TOTAL PORTFOLIO OPERATING EXPENSES THROUGH DECEMBER 31, 1995. THERE IS NO
ASSURANCE THAT THESE UNDERTAKINGS WILL CONTINUE.
</TABLE>
EXAMPLES
An Owner would pay the following expenses on a $1,000 investment, assuming a
5% annual return on assets:
(a) if the Contract is fully surrendered at the end of each time period;
(b) if the Contract is not surrendered;
(c) if Payment Plan A - Option 2 is elected.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Time Periods
----------- ----------
EQUI-SELECT SERIES TRUST 1 year 3 years 5 years 10 years
- ------------------------ ---------- ----------- ---------- ----------
Advantage Portfolio a) $103.39 a) $125.92 a) $158.91 a) $262.03
b) $23.39 b) $71.92 b) $122.91 b) $262.03
c) $103.39 c) $125.92 c) $158.91 c) $262.03
Government Securities Portfolio a) $107.89 a) $139.42 a) $181.35 a) $306.45
b) $27.89 b) $85.42 b) $145.35 b) $306.45
c) $107.89 c) $139.42 c) $181.35 c) $306.45
International Fixed Income Portfolio a) $111.39 a) $149.79 a) $198.45 a) $339.54
b) $31.39 b) $95.79 b) $162.45 b) $339.54
c) $111.39 c) $149.79 c) $198.45 c) $339.54
International Stock Portfolio a) $110.89 a) $148.32 a) $196.03 a) $334.89
b) $30.89 b) $94.32 b) $160.03 b) $334.89
c) $110.89 c) $148.32 c) $196.03 c) $334.89
Money Market Portfolio a) $102.13 a) $122.14 a) $152.68 a) $249.30
b) $22.13 b) $68.14 b) $116.58 b) $249.30
c) $102.13 c) $122.14 c) $152.68 c) $249.30
Mortgage-Backed Securities Portfolio a) $107.89 a) $139.42 a) $181.35 a) $306.45
b) $27.89 b) $85.42 b) $145.35 b) $306.45
c) $107.89 c) $139.42 c) $181.35 c) $306.45
OTC Portfolio a) $110.89 a) $148.32 a) $196.03 a) $334.89
b) $30.89 b) $94.32 b) $160.03 b) $334.89
c) $110.89 c) $148.32 c) $196.03 c) $334.89
Research Portfolio a) $110.89 a) $148.32 a) $196.03 a) $334.89
b) $30.89 b) $94.32 b) $160.03 b) $334.89
c) $110.89 c) $148.32 c) $196.03 c) $334.89
Short-Term Bond Portfolio a) $104.89 a) $130.44 a) $166.45 a) $277.08
b) $24.89 b) $76.44 b) $130.45 b) $277.08
c) $104.89 c) $130.44 c) $166.45 c) $277.08
Total Return Portfolio a) $110.89 a) $148.32 a) $196.03 a) $334.89
b) $30.89 b) $94.32 b) $160.03 b) $334.89
c) $110.89 c) $148.32 c) $196.03 c) $334.89
Growth & Income Portfolio a) $112.38 a) $152.74 a) $203.28 a) $348.76
b) $32.38 b) $98.74 b) $167.28 b) $348.76
c) $112.38 c) $152.74 c) $203.28 c) $348.76
Value + Growth Portfolio a) $112.38 a) $152.74 a) $203.28 a) $348.76
b) $32.38 b) $98.74 b) $167.28 b) $348.76
c) $112.38 c) $152.74 c) $203.28 c) $348.76
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SMITH BARNEY/TRAVELERS SERIES FUND INC. 1 Year 3 Years 5 Years 10 Years
- --------------------------------------- ---------- ---------- --------- ---------
Smith Barney Income and Growth Portfolio a) 107.89 a) 139.42 a) 181.35 a) 306.45
b) 27.89 b) 85.42 b) 145.35 b) 306.45
c) 107.89 c) 139.42 c) 181.35 c) 306.45
Smith Barney International Equity Portfolio a) 110.39 a) 146.84 a) 193.60 a) 330.21
b) 30.39 b) 92.84 b) 157.60 b) 330.21
c) 110.39 c) 146.84 c) 193.60 c) 330.21
Smith Barney High Income Portfolio a) 107.89 a) 139.42 a) 181.35 a) 306.45
b) 27.89 b) 85.42 b) 145.35 b) 306.45
c) 107.89 c) 139.42 c) 181.35 c) 306.45
Smith Barney Money Market Portfolio a) 107.89 a) 139.42 a) 181.35 a) 306.45
b) 27.89 b) 85.42 b) 145.35 b) 306.45
c) 107.89 c) 139.42 c) 181.35 c) 306.45
SMITH BARNEY SERIES FUND
- ------------------------
Appreciation Portfolio a) $104.19 a) $128.33 a) 162.94 a) 270.09
b) $ 24.19 b) $ 74.33 b) 126.94 b) 270.09
c) $104.19 c) $128.33 c) 162.94 c) 270.09
Equity Income Portfolio a) $103.79 a) $127.13 a) 160.93 a) 266.07
b) $ 23.79 b) $ 73.13 b) 124.93 b) 266.07
c) $103.79 c) $127.13 c) 160.93 c) 266.07
Equity Index Portfolio a) $105.39 a) $131.94 a) 168.95 a) 282.04
b) $ 25.39 b) $ 77.94 b) 132.95 b) 282.04
c) $105.39 c) $131.94 c) 168.95 c) 282.04
Intermediate High Grade Portfolio a) $103.89 a) $127.43 a) 161.43 a) 267.07
b) $ 23.89 b) $ 73.43 b) 125.43 b) 267.07
c) $103.89 c) $127.43 c) 161.43 c) 267.07
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
WARBURG PINCUS TRUST 1 Year 3 Years 5 Years 10 Years
- ------------------------ ---------- ----------- --------- ---------
International Equity Portfolio a) $109.79 a) $145.06 a) $190.68 a) $324.57
b) $29.79 b) $91.06 b) $154.68 b) $324.57
c) $109.79 c) $145.06 c) $190.68 c) $324.57
</TABLE>
NOTES TO FEE TABLE AND EXAMPLES
1. The purpose of the Fee Table is to assist the Owner in understanding
the various costs and expenses that an Owner will incur directly or
indirectly. For additional information, see "Charges and Deductions" in this
Prospectus and see the Prospectuses for Equi-Select Series Trust, Smith Barney/
Travelers Series Fund Inc., Smith Barney Series Fund and Warburg Pincus Trust.
2. At any time the Owner may make a withdrawal without the imposition of
a Withdrawal Charge of an amount equal to 10% of the total of all Purchase
Payments at the beginning of the Contract Year, less any Purchase Payments
previously withdrawn. Any withdrawals without a Withdrawal Charge not used in
a Contract Year may not be used in a subsequent Contract Year.
3. If the Owner is participating in the Automatic Portfolio Rebalancing
program or Dollar Cost Averaging program providing for the automatic transfer
of funds from a Subaccount or the Fixed Account to any other Subaccount, such
transfers are currently not taken into account in determining the number of
transfers for the year or in determining any Transfer Fee. (See "Charges and
Deductions -- Deduction for Transfer Fee" on Page __ and "Purchase Payments
and Contract Value -- Dollar Cost Averaging" on Page __ and "Purchase Payments
and Contract Value -- Automatic Portfolio Rebalancing" on Page __.)
4. Premium taxes are not reflected. Premium taxes may apply. (See
"Charges and Deductions -- Deduction for Premium Taxes" on Page 11.)
5. THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
CONDENSED FINANCIAL INFORMATION
The financial statements of Equitable Life Insurance Company of Iowa and
Equitable Life Insurance Company of Iowa Separate Account A may be found in
the Statement of Additional Information.
The table below gives per unit information about the financial history of each
Sub-Account invested in Equi-Select Series Trust from commencement of operations
(October 7, 1994) to December 31, 1995 and of the Sub-Accounts invested in Smith
Barney/Travelers Series Fund, Inc. from commencement of operations of the
Sub-Accounts (April 5, 1995 for the Smith Barney Income and Growth Sub-Account;
March 27, 1995 for the Smith Barney International Equity Sub-Account; April 28,
1995 for the Smith Barney High Income Sub-Account; and May 24, 1995 for the
Smith Barney Money Market Sub-Account) to December 31, 1995. This information
should be read in conjunction with the financial statements and related
notes of the Separate Account included in the Statement of Additional
Information.
<TABLE>
<CAPTION>
<S> <C> <C>
Period from
EQUI-SELECT SERIES TRUST: Commencement of
Year Ended Operations
Dec. 31, 1995 to December 31, 1994
-------------- ------------------------
ADVANTAGE SUB-ACCOUNT
Unit value at beginning of period $ 10.08 $ 10.00
Unit value at end of period $ 10.86 $ 10.08
No. of units outstanding at end of period 344,775 45,516
GOVERNMENT SECURITIES SUB-ACCOUNT
Unit value at beginning of period $ 10.11 $ 10.00
Unit value at end of period $ 11.76 $ 10.11
No. of units outstanding at end of period 56,258 1,428
INTERNATIONAL FIXED INCOME SUB-ACCOUNT
Unit value at beginning of period $ 10.06 $ 10.00
Unit value at end of period $ 11.55 $ 10.06
No. of units outstanding at end of period 311,689 5,098
INTERNATIONAL STOCK SUB-ACCOUNT
Unit value at beginning of period $ 9.87 $ 10.00
Unit value at end of period $ 10.56 $ 9.87
No. of units outstanding at end of period 541,570 23,662
MONEY MARKET SUB-ACCOUNT
Unit value at beginning of period $ 10.07 $ 10.00
Unit value at end of period $ 10.45 $ 10.07
No. of units outstanding at end of period 548,767 34,322
MORTGAGE-BACKED SECURITIES SUB-ACCOUNT
Unit value at beginning of period $ 9.99 $ 10.00
Unit value at end of period $ 11.42 $ 9.99
No. of units outstanding at end of period 380,031 2,886
OTC SUB-ACCOUNT
Unit value at beginning of period $ 10.35 $ 10.00
Unit value at end of period $ 13.21 $ 10.35
No. of units outstanding at end of period 759,597 63,781
RESEARCH SUB-ACCOUNT
Unit value at beginning of period $ 9.72 $ 10.00
Unit value at end of period $ 13.10 $ 9.72
No. of units outstanding at end of period 1,255,752 69,177
SHORT-TERM BOND SUB-ACCOUNT
Unit value at beginning of period $ 10.15 $ 10.00
Unit value at end of period $ 10.98 $ 10.15
No. of units outstanding at end of period 32,032 1,141
TOTAL RETURN SUB-ACCOUNT
Unit value at beginning of period $ 9.81 $ 10.00
Unit value at end of period $ 12.05 $ 9.81
No. of units outstanding at end of period 1,312,565 33,106
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Period from
Commencement of
Operations
SMITH BARNEY/TRAVELERS SERIES FUND INC. to December 31, 1995
- ----------------------------------------------- -------------------------
SMITH BARNEY INCOME AND GROWTH SUB-ACCOUNT
Unit value at beginning of period (4-5-95) $ 10.00
Unit value at end of period $ 12.05
No. of units outstanding at end of period 295,134
SMITH BARNEY INTERNATIONAL EQUITY SUB-ACCOUNT
Unit value at beginning of period (3-27-95) $ 10.00
Unit value at end of period $ 11.56
No. of units outstanding at end of period 154,388
SMITH BARNEY HIGH INCOME SUB-ACCOUNT
Unit value at beginning of period (4-28-95) $ 10.00
Unit value at end of period $ 10.94
No. of units outstanding at end of period 72,283
SMITH BARNEY MONEY MARKET SUB-ACCOUNT
Unit value at beginning of period (5-24-95) $ 10.00
Unit value at end of period $ 10.23
No. of units outstanding at end of period 125,048
</TABLE>
The Growth & Income and Value + Growth Sub-Accounts of Equi-Select Series Trust
and the sub-accounts invested in Smith Barney Series Fund and Warburg Pincus
Trust are new in 1996.
THE COMPANY
Equitable Life Insurance Company of Iowa (the "Company") was founded in Iowa
in 1867 and is the oldest life insurance company west of the Mississippi. The
Company is currently licensed to do business in the District of Columbia and
all states except Maine, New Hampshire, New York and Vermont. The Company is
a wholly-owned subsidiary of Equitable of Iowa Companies, an Iowa corporation.
THE SEPARATE ACCOUNT
The Board of Directors of the Company adopted a resolution to establish a
segregated asset account pursuant to Iowa insurance law on January 24, 1994.
This segregated asset account has been designated Equitable Life Insurance
Company of Iowa Separate Account A (the "Separate Account"). The Company has
caused the Separate Account to be registered with the Securities and Exchange
Commission as a unit investment trust pursuant to the provisions of the
Investment Company Act of 1940.
The assets of the Separate Account are the property of the Company. However,
the assets of the Separate Account equal to the reserves and other contract
liabilities with respect to the Separate Account, are not chargeable with
liabilities arising out of any other business the Company may conduct.
Income, gains and losses, whether or not realized, are, in accordance with the
Contracts, credited to or charged against the Separate Account without regard
to other income, gains or losses of the Company. The Company's obligations
arising under the Contracts are general obligations.
The Separate Account meets the definition of a "separate account" under
federal securities laws.
The Separate Account is divided into Subaccounts, with the assets of each
Subaccount invested in one Portfolio of Equi-Select Series Trust, Smith
Barney/Travelers Series Fund Inc., Smith Barney Series Fund and Warburg
Pincus Trust. There is no assurance that the investment objectives of any of
the Portfolios will be met. Owners bear the complete investment risk for
Purchase Payments allocated to a Subaccount. Contract Values will fluctuate
in accordance with the investment performance of the Subaccounts to which
Purchase Payments are allocated, and in accordance with the imposition of the
fees and charges assessed under the Contracts.
INVESTMENT OPTIONS
EQUI-SELECT SERIES TRUST
Equi-Select Series Trust ("Trust") has been established to act as one of the
funding vehicles for the Contracts offered. The Trust is managed by Equitable
Investment Services, Inc. ("EISI") which is a wholly-owned subsidiary of the
Equitable of Iowa Companies. EISI has retained Sub-Advisers for certain
Portfolios to make investment decisions and place orders. The Sub-Advisers
for the Portfolios are: Credit Suisse Investment Management Limited with
respect to the International Fixed Income Portfolio; Strong Capital
Management, Inc. with respect to the International Stock Portfolio;
Massachusetts Financial Services Company with respect to the OTC, Research
and Total Return Portfolios and Robertson, Stephens & Company Investment
Management, L.P. with respect to the Growth & Income and Value + Growth
Portfolios. See "Management of the Trust" in the Trust Prospectus, which
accompanies this Prospectus, for additional information concerning EISI
and the Sub-Advisers, including a description of advisory and sub-advisory
fees. PURCHASERS SHOULD READ THIS PROSPECTUS AND THE PROSPECTUS FOR
EQUI-SELECT SERIES TRUST CAREFULLY BEFORE INVESTING.
The Trust is an open-end management investment company. While a brief summary
of the investment objectives of the available Portfolios is set forth below,
more comprehensive information, including a discussion of potential risks,
is found in the current Prospectus for the Trust which is included with this
Prospectus. Additional Prospectuses and the Statement of Additional
Information can be obtained by calling or writing the Company's Home Office.
The Trust is intended to meet differing investment objectives with its
currently available separate Portfolios. SHARES OF THE GOVERNMENT SECURITIES
PORTFOLIO AND SHORT-TERM BOND PORTFOLIO ARE NO LONGER OFFERED FOR SALE.
SHARES OF THE INTERNATIONAL STOCK PORTFOLIO WILL NO LONGER BE OFFERED
FOR SALE AFTER MAY 17, 1996.
The investment objectives of the Portfolios are as follows:
ADVANTAGE PORTFOLIO. The Advantage Portfolio seeks current income with a
very low degree of share-price fluctuation. The Portfolio invests primarily
in ultra short-term investment grade bonds. The Portfolio is designed for
investors who seek higher yields than money market funds generally offer and
who are willing to accept some modest principal fluctuation in order to
achieve that objective. Because its share price will vary, the Portfolio is
not an appropriate investment for those whose primary objective is absolute
principal stability. The Portfolio's investments include a combination of
high-quality money market instruments, as well as securities with longer
maturities and securities of lower quality. Under normal market conditions,
it is anticipated that the portfolio will maintain an average effective
maturity of one year or less.
GOVERNMENT SECURITIES PORTFOLIO. The Government Securities Portfolio
seeks total return by investing for a high level of current income with a
moderate degree of share-price fluctuation. The Portfolio is designed for
long-term investors who want to pursue higher income than shorter-term
securities generally provide, who are willing to accept the fluctuation in
principal associated with longer-term securities , and who seek the low credit
risk that U.S. Government securities generally carry. Under normal market
conditions, at least 80% of the Portfolio's total assets will be invested in
U.S. government securities.
INTERNATIONAL FIXED INCOME PORTFOLIO. The International Fixed Income
Portfolio seeks to provide high total return. The Portfolio will seek to
achieve its objective by investing in both domestic and foreign debt
securities and related foreign currency transactions. The total return will be
sought through a combination of current income, capital gains and gains in
currency positions. Under normal market conditions, the portfolio will invest
primarily in: (i) obligations issued or guaranteed by foreign national
governments, their agencies, instrumentalities, or political subdivisions;
(ii) U.S. government securities; (iii) debt securities issued or guaranteed by
supranational organizations, considered to be government securities. Under
normal conditions, the Portfolio's Sub-Adviser expects that the Portfolio
generally will be invested in at least six different countries, including the
U.S., although the Portfolio may at times invest all of its assets in a single
country. The Portfolio may invest a significant portion of its assets in
foreign securities. Investing in foreign securities generally involves risks
not ordinarily associated with investing in securities of domestic issuers.
Purchasers are cautioned to read the "Appendix -- Foreign Investments" in the
Trust Prospectus for a discussion of the risks involved in foreign investing.
INTERNATIONAL STOCK PORTFOLIO. The International Stock Portfolio seeks
capital growth. The Portfolio invests primarily in equity securities of
issuers located outside the United States. The Portfolio will invest at least
65% of its assets in foreign equity securities, including common stocks,
preferred stocks, securities that are convertible into common or preferred
stocks, such as warrants and convertible bonds, that are issued by companies
whose principal headquarters are located outside the United States. Under
normal market conditions, the Portfolio expects to invest at least 90% of its
assets in foreign equity securities. The Portfolio will normally invest in
securities of issuers located in at least three different countries. Investing
in foreign securities generally involves risks not ordinarily associated with
investing in securities of domestic issuers. Purchasers are cautioned to read
the "Implementation of Policies and Risks - International Stock Portfolio" in
the Trust Prospectus for a discussion of the risks involved in foreign
investing.
MONEY MARKET PORTFOLIO. The Money Market Portfolio seeks to obtain
maximum current income, consistent with the preservation of capital and the
maintenance of liquidity. The Portfolio will seek to achieve this objective
by investing exclusively in certain U.S. dollar-denominated money market
instruments maturing in 397 days or less. An investment in the Money Market
Portfolio is neither insured nor guaranteed by the U.S. Government.
MORTGAGE-BACKED SECURITIES PORTFOLIO. The Mortgage-Backed Securities
Portfolio seeks to obtain a high current return, consistent with safety of
principal primarily through investments in mortgage-backed securities.
Mortgage-backed securities represent interests in, or are secured by and
payable from, pools of mortgage loans, including collateralized mortgage
obligations.
OTC PORTFOLIO. The investment objective of the OTC Portfolio is to seek
to obtain long-term growth of capital. The Portfolio seeks to achieve its
objective by investing at least 65% of its assets, under normal circumstances,
in securities principally traded on the over-the-counter (OTC) securities
market.
RESEARCH PORTFOLIO. The Research Portfolio seeks to provide long-term
growth of capital and future income by investing a substantial portion of its
assets in the common stocks or securities convertible into common stocks of
companies believed to possess better than average prospects for long-term
growth. A smaller proportion of the assets may be invested in bonds,
short-term obligations, preferred stocks or common stocks whose principal
characteristic is income production rather than growth. The Portfolio
securities of the Research Portfolio are selected by the investment research
analysts in the Equity Research Group of the Sub-Adviser. The Portfolio's
assets are allocated to economic sectors (e.g. health care, technology,
consumer staples) and then to industry groups within these sectors (e.g.
within the health care sector, the managed care, drug and medical supply
industries). The allocation by sector and industry is determined by the
analysts acting together as a group.
SHORT-TERM BOND PORTFOLIO. The Short-Term Bond Portfolio seeks total
return by investing for a high level of current income with a low degree of
share-price fluctuation. The Portfolio is designed for investors who are
willing to accept some fluctuation in principal in order to pursue a higher
level of income than is generally available from money market securities.
Because its share price will vary, the Portfolio is not an appropriate
investment for those whose primary objective is absolute principal stability.
The Portfolio invests primarily in short-and intermediate-term, investment
grade bonds. Although the Portfolio may invest in any type of fixed income
security, under normal market conditions, at least 65% of the Portfolio's
assets will be invested in bonds, such as corporate and U.S. government debt
securities.
TOTAL RETURN PORTFOLIO. The Total Return Portfolio primarily seeks to
obtain above-average income (compared to a portfolio entirely invested in
equity securities) consistent with the prudent employment of capital. While
current income is the primary objective, the Portfolio believes that there
should also be a reasonable opportunity for growth of capital and income since
many securities offering a better than average yield may also possess growth
potential. Generally, at least 40% of the Portfolio's assets will be invested
in equity securities.
GROWTH & INCOME PORTFOLIO. The Growth & Income Portfolio seeks long-term
total return. The Portfolio will pursue this objective primarily by investing
in equity and debt securities, focusing on small- and mid-cap companies that
offer the potential for capital appreciation, current income or both. The
Portfolio will normally invest the majority of its assets in common and
preferred stocks, convertible securities, bonds and notes.
VALUE + GROWTH PORTFOLIO. The Value + Growth Portfolio seeks capital
appreciation. The Portfolio invests primarily in mid-cap growth companies with
favorable relationships between price/earnings ratios and growth rates, in
sectors offering the potential for above-average returns. Mid-cap companies
are companies with market capitalizations ranging from $750 million to
approximately $2 billion, although the Portfolio's investments may include
securities of larger or smaller companies.
SMITH BARNEY/TRAVELERS SERIES FUND INC.
Smith Barney/Travelers Series Fund Inc. ("Fund") is an investment company
underlying certain variable annuity and variable life insurance contracts. The
Fund is managed by Smith Barney Mutual Funds Management Inc. ("SBMFM" or
"Manager"). SBMFM is a wholly-owned subsidiary of Smith Barney Holdings Inc.
Smith Barney Holdings Inc. is a wholly-owned subsidiary of Travelers Group
Inc. which is a financial services holding company engaged through its
subsidiaries, principally in four business segments: investment services,
consumer finance services, life insurance services and property & casualty
insurance services.
The Fund is an open-end management investment company. While a brief summary
of the investment objectives is set forth below, more comprehensive
information, including a discussion of potential risks, is found in the
current Prospectus for the Fund, which is included with this Prospectus.
Additional Prospectuses and the Statement of Additional Information can be
obtained by calling or writing the Company's Home Office.
The Fund is intended to meet differing investment objectives with its
currently available separate Portfolios.
The investment objectives of the Portfolios are as follows:
SMITH BARNEY INCOME AND GROWTH PORTFOLIO. The Smith Barney Income and
Growth Portfolio seeks current income and long-term growth of income and
capital by investing primarily, but not exclusively, in common stocks. The
Portfolio invests primarily in common stocks offering a current return from
dividends and in interest-paying debt obligations (such as U.S. Government
Securities, investment grade bonds and debentures) and high quality short-term
debt obligations (such as commercial paper and repurchase agreements
collateralized by U.S. Government Securities with broker/dealers or other
financial institutions.)
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO. The Smith Barney
International Equity Portfolio seeks total return on its assets from growth of
capital and income. The Portfolio seeks to achieve its objective by investing
at least 65% of its assets in a diversified portfolio of equity securities of
established non-U.S. issuers. Investing in foreign securities generally
involves risks not ordinarily associated with investing in securities of
domestic issuers. Purchasers are cautioned to read "Special Investment
Techniques and Risk Considerations - Foreign Securities" in the Fund
Prospectus.
SMITH BARNEY HIGH INCOME PORTFOLIO. The Smith Barney High Income
Portfolio seeks high current income. Capital appreciation is a secondary
objective. The Portfolio seeks to achieve its investment objectives by
investing, under normal circumstances, at least 65% of its assets in
high-yielding corporate debt obligations and preferred stock. The Portfolio
invests significantly in lower grade corporate debt securities, which are
commonly known as "junk bonds" and involve a significant degree of risk. (See
"The Fund's Investment Program - Smith Barney High Income Portfolio" in the
Fund Prospectus.) Prior to investing in this Portfolio, purchasers are
cautioned to read the section entitled "Special Investment Techniques and Risk
Considerations - Lower-Quality and Non-Rated Securities" in the Fund
Prospectus. The Portfolio may invest up to 20% of its assets in the securities
of foreign issuers that are denominated in currencies other than the U.S.
dollar and may invest without limitation in securities of foreign issuers that
are denominated in U.S. dollars. Investing in foreign securities generally
involves risks not ordinarily associated with investing in securities of
domestic issuers. Purchasers are cautioned to read "Special Investment
Techniques and Risk Considerations - Foreign Securities" in the Fund
Prospectus.
SMITH BARNEY MONEY MARKET PORTFOLIO. The Smith Barney Money Market
Portfolio seeks maximum current income and preservation of capital. The
Portfolio seeks to achieve its objectives by investing in bank obligations and
high quality commercial paper, corporate obligations and municipal
obligations, in addition to U.S. Government Securities and related repurchase
agreements. An investment in this Portfolio is neither insured nor guaranteed
by the U.S. Government. In addition, there is no assurance that the Portfolio
will be able to maintain a stable net asset value of $1.00 per share.
SMITH BARNEY SERIES FUND
Smith Barney Series Fund is a diversified, open-end management investment
company. Smith Barney Mutual Funds Management Inc. ("SBMFM") is the investment
adviser to the Appreciation Portfolio, Equity Income Portfolio and
Intermediate High Grade Portfolio (see "Smith Barney/Travelers Series Fund
Inc." above for information pertaining to SBMFM). Travelers Investment
Management Company ("TIMCO") is the investment adviser to the Equity Index
Portfolio.
Smith Barney Series Fund has ten Portfolios, four of which are currently
available in connection with the Contracts. While a brief summary of the
investment objectives is set forth below, more comprehensive information,
including a discussion of potential risks, is found in the current prospectus
for Smith Barney Series Fund, which is included with this Prospectus.
Additional prospectuses and the Statement of Additional Information can be
obtained by calling or writing the Company's Home Office.
Smith Barney Series Fund is intended to meet differing investment objectives
with its currently available separate Portfolios.
The investment objectives of the Portfolios are as follows:
APPRECIATION PORTFOLIO - The Appreciation Portfolio's goal is long-term
appreciation of capital. The Portfolio will attempt to achieve its goal by
investing primarily in equity and equity-related securities that are believed
to afford attractive opportunities for appreciation. Under normal market
conditions, substantially all - but not less than 65% - of the Portfolio's
assets will consist of common stocks, but the Portfolio also may hold
securities convertible into common stocks and warrants.
EQUITY INCOME PORTFOLIO - The Equity Income Portfolio's primary goal is
current income. Long-term capital appreciation is a secondary goal. The
Portfolio will seek to achieve its goals principally through investment in
dividend-paying common stocks of companies whose prospects for dividend growth
and capital appreciation are considered favorable by SBMFM. The Portfolio will
normally invest at least 65% of its assets in equity securities. Under normal
circumstances, the Portfolio will concentrate at least 25% of its assets in
equity and debt securities of companies in the utilities industry.
EQUITY INDEX PORTFOLIO - The Equity Index Portfolio's goal is to provide
investment results that, before deduction of operating expenses, match the
price and yield performance of U.S. publicly traded common stocks, as measured
by the Standard & Poor's 500 Composite Stock Price Index ("S&P 500"). Once the
Portfolio reaches a sufficient asset size, it will seek to achieve its goal by
owning all 500 stocks in the S&P 500 in proportion to their actual market
capitalization weightings. The Portfolio will be reviewed daily and will be
adjusted, when necessary, to maintain security weightings as close to those of
the S&P 500 as possible, given the amount of assets in the Portfolio at that
time.
INTERMEDIATE HIGH GRADE PORTFOLIO - The Intermediate High Grade
Portfolio's goal is to provide as high a level of current income as is
consistent with the protection of capital. The Portfolio will seek to achieve
its goal by investing, under normal circumstances, substantially all - but not
less than 65% - of its assets in U.S. government securities and high-grade
corporate bonds of U.S. issuers.
WARBURG PINCUS TRUST
Warburg Pincus Trust is an open-end management investment company. Warburg,
Pincus Counsellors, Inc. ("Warburg") is the investment adviser to each of the
Trust's two Portfolios, one of which - the International Equity Portfolio - is
being offered herein. Warburg is a wholly-owned subsidiary of Warburg, Pincus
Counsellors G.P., a New York general partnership. E.M. Warburg, Pincus & Co.,
Inc. controls Warburg through its ownership of a class of voting preferred
stock of Warburg.
While a brief summary of the investment objective of the International Equity
Portfolio is set forth below, more comprehensive information, including a
discussion of potential risks, is found in the current prospectus for Warburg
Pincus Trust, which is included with this Prospectus. Additional prospectuses
and the Statement of Additional Information can be obtained by calling or
writing the Company's Home Office.
The investment objective of the International Equity Portfolio is as follows:
INTERNATIONAL EQUITY PORTFOLIO - The investment objective of the
International Equity Portfolio is to seek long-term capital appreciation
by investing primarily in a broadly diversified portfolio of equity
securities of companies, wherever organized, that in the judgment of
Warburg have their principal business activities and interests outside the
United States. The Portfolio will ordinarily invest substantially all of its
assets - but no less than 65% of its total assets - in common stocks,
warrants and securities convertible into or exchangeable for common stocks.
Generally the Portfolio will hold no less than 65% of its total assets in
at least three countries other than the United States.
VOTING RIGHTS
In accordance with its view of present applicable law, the Company will vote
the shares of the Investment Options held in the Separate Account at special
meetings of the shareholders in accordance with instructions received from
persons having the voting interest in the Separate Account. The Company will
vote shares for which it has not received instructions, as well as shares
attributable to it, in the same proportion as it votes shares for which it has
received instructions. The Investment Options do not hold regular meetings of
shareholders.
The number of shares which a person has a right to vote will be determined as
of a date to be chosen by the Company not more than sixty (60) days prior to a
shareholder meeting of an Investment Option. Voting instructions will be
solicited by written communication prior to the meeting.
SUBSTITUTION OF SECURITIES
If the shares of the Investment Options (or any Portfolio within an Investment
Option or any other Investment Option), are no longer available for investment
by the Separate Account or, if in the judgment of the Company, further
investment in the shares should become inappropriate in view of the purpose of
the Contracts, the Company may substitute shares of another Investment Option
(or Portfolio) for shares already purchased or to be purchased in the future
by Purchase Payments under the Contracts. No substitution of securities may
take place without prior approval of the Securities and Exchange Commission
and under the requirements it may impose.
Shares of the Investment Options are issued and redeemed in connection
with investments in and payments under certain variable annuity contracts
and (with respect to certain of the Investment Options) variable life
insurance policies of various life insurance companies which may or may
not be affiliated. In addition, Warburg Pincus Trust may offer its shares
to tax-qualified pension and retirement plans ("Qualified Plans"). The
Investment Options do not foresee any disadvantage to Contract Owners
arising out of the fact that the Investment Options offer their shares
for products offered by life insurance companies which are not affiliated
(or with respect to Warburg Pincus Trust, that it may offer its shares to
Qualified Plans). Nevertheless, the Boards of Trustees of the Investment
Options intend to monitor events in order to identify any material
irreconcilable conflicts which may possibly arise and to determine what
action, if any, should be taken in response thereto. If such a conflict
were to occur, one or more insurance company separate accounts (or
Qualified Plans) might withdraw its investments in an Investment Option.
An irreconcilable conflict might result in the withdrawal of a substantial
amount of a Portfolio's assets which could adversely affect such
Portfolio's net asset value per share.
CHARGES AND DEDUCTIONS
Various charges and deductions are made from the Contract Value and the
Separate Account. These charges and deductions are:
DEDUCTION FOR WITHDRAWAL CHARGE (SALES LOAD)
If all or a portion of the Contract Value (see "Withdrawals" on Page 15) is
withdrawn, a Withdrawal Charge (sales load) will be calculated at the time of
each withdrawal and will be deducted from the Contract Value. This Charge
reimburses the Company for expenses incurred in connection with the promotion,
sale and distribution of the Contracts. The Withdrawal Charge percentages are
based upon the number of Purchase Payment Anniversaries that Purchase Payments
have remained in the Contract before being withdrawn as shown in the Table of
Withdrawal Charges below:
<TABLE>
<CAPTION>
TABLE OF WITHDRAWAL CHARGES
<S> <C>
PURCHASE PAYMENT ANNIVERSARY WITHDRAWAL CHARGE
____________________________ _____________________________________
1 8% of the Purchase Payment withdrawn
2 7% of the Purchase Payment withdrawn
3 6% of the Purchase Payment withdrawn
4 5% of the Purchase Payment withdrawn
5 4% of the Purchase Payment withdrawn
6 3% of the Purchase Payment withdrawn
7 2% of the Purchase Payment withdrawn
8 1% of the Purchase Payment withdrawn
9 and after 0% of the Purchase Payment withdrawn
</TABLE>
At any time the Owner may make a withdrawal without the imposition of a
Withdrawal Charge of an amount equal to 10% of the total of all Purchase
Payments at the beginning of the Contract Year less any Purchase Payments
previously withdrawn. Any withdrawals without a Withdrawal Charge not used in
a Contract Year may not be used in any subsequent Contract Year. With respect
to the assessment of a Withdrawal Charge, the distribution of Purchase
Payments from within a Subaccount or the Fixed Account are on a first-in,
first-out basis. (See "Withdrawals" on Page 15.)
Commissions will be paid to broker-dealers who sell the Contracts.
Broker-dealers will be paid commissions, up to an amount currently equal to
7.75% of Purchase Payments, for promotional or distribution expenses
associated with the marketing of the Contracts. The Company may, by agreement
with the broker-dealer, pay commissions as a combination of a certain
percentage amount at the time of sale and a trail commission (which when
combined could exceed 7.75% of Purchase Payments). In addition, under certain
circumstances, the Company may pay certain sellers production bonuses which
will take into account, among other things, the total Purchase Payments which
have been made under Contracts associated with the broker-dealer. Additional
payments or allowances may be made for other services not directly related to
the sale of the Contracts. To the extent that the Withdrawal Charge is
insufficient to cover the actual costs of distribution, the Company may use
any of its corporate assets, including potential profit which may arise from
the Mortality and Expense Risk Charge (see below), to provide for any
difference.
No Withdrawal Charge is deducted if Plan A -- Option 1; Plan B or Plan C is
elected. (See "Contract Proceeds -- Fixed Payment Plans" on Page 18.)
In addition, in certain states, an endorsement to the Contract is issued which
permits the Owner to make a total or partial withdrawal without the imposition
of a Withdrawal Charge if the Annuitant is hospitalized and/or confined to an
eligible nursing home for 30 consecutive days.
REDUCTION OR ELIMINATION OF THE WITHDRAWAL CHARGE
The amount of the Withdrawal Charge on the Contracts may be reduced or
eliminated when sales of the Contracts are made to individuals or to a group
of individuals in a manner that results in savings of sales expenses. The
entitlement to reduction of the Withdrawal Charge will be determined by the
Company after examination of all the relevant factors such as:
1. The size and type of group to which sales are to be made will be
considered. Generally, the sales expenses for a larger group are less than
for a smaller group because of the ability to implement large numbers of
Contracts with fewer sales contacts.
2. The total amount of Purchase Payments to be received will be
considered. Per Contract sales expenses are likely to be less on larger
Purchase Payments than on smaller ones.
3. Any prior or existing relationship with the Company will be
considered. Per Contract sales expenses are likely to be less when there is a
prior existing relationship because of the likelihood of implementing the
Contract with fewer sales contacts.
4. There may be other circumstances, of which the Company is not
presently aware, which could result in reduced sales expenses.
If, after consideration of the foregoing factors, the Company determines that
there will be a reduction in sales expenses, the Company may provide for a
reduction or elimination of the Withdrawal Charge.
The Company and its affiliates may offer an exchange program ("Exchange
Program") to their fixed annuity contract owners whereby a contract owner can
exchange his or her fixed annuity contract for a Contract offered by this
Prospectus. Pursuant to the Exchange Program, the Withdrawal Charge may be
reduced or eliminated so that a contract owner would not incur any additional
or higher Withdrawal Charge as a result of the exchange.
The Withdrawal Charge may be eliminated when the Contracts are issued to an
officer, director or employee of the Company or any of its affiliates. In no
event will reductions or elimination of the Withdrawal Charge be permitted
where reductions or elimination will be unfairly discriminatory to any person.
DEDUCTION FOR MORTALITY AND EXPENSE RISK CHARGE
The Company deducts on each Valuation Date a Mortality and Expense Risk Charge
which is equal, on an annual basis, to 1.25% (consisting of approximately .90%
for mortality risks and approximately .35% for expense risks) of the average
daily net asset value of the Separate Account. The mortality risks assumed by
the Company arise from its contractual obligation to make annuity payments
after the Annuity Date for the life of the Annuitant and to waive the
Withdrawal Charge in the event of the death of the Annuitant. Also, there is
a mortality risk borne by the Company with respect to the guaranteed death
benefit (see "Contract Proceeds -- Death Proceeds" on Page 17). The expense
risk assumed by the Company is that all actual expenses involved in
administering the Contracts, including Contract maintenance costs,
administrative costs, mailing costs, data processing costs, legal fees,
accounting fees, filing fees and the costs of other services may exceed the
amount recovered from the Annual Contract Maintenance Charge and the
Administrative Charge.
If the Mortality and Expense Risk Charge is insufficient to cover the actual
costs, the loss will be borne by the Company. Conversely, if the amount
deducted proves more than sufficient, the excess will be a profit to the
Company. The Company expects a profit from this charge.
The Mortality and Expense Risk Charge is guaranteed by the Company and cannot
be increased.
DEDUCTION FOR ADMINISTRATIVE CHARGE
The Company deducts on each Valuation Date an Administrative Charge which is
equal, on an annual basis, to .15% of the average daily net asset value of the
Separate Account. This charge, together with the Annual Contract Maintenance
Charge (see below), is to reimburse the Company for the expenses it incurs in
the establishment and maintenance of the Contracts and the Separate Account.
These expenses include but are not limited to: preparation of the Contracts,
confirmations, annual reports and statements, maintenance of Owner records,
maintenance of Separate Account records, administrative personnel costs,
mailing costs, data processing costs, legal fees, accounting fees, filing
fees, the costs of other services necessary for Owner servicing and all
accounting, valuation, regulatory and reporting requirements. Since this
charge is an asset-based charge, the amount of the charge attributable to a
particular Contract may have no relationship to the administrative costs
actually incurred by that Contract. The Company does not intend to profit
from this charge. This charge will be reduced to the extent that the amount
of this charge is in excess of that necessary to reimburse the Company for its
administrative expenses. Should this charge prove to be insufficient, the
Company will not increase this charge and will incur the loss.
DEDUCTION FOR ANNUAL CONTRACT MAINTENANCE CHARGE
The Company deducts an Annual Contract Maintenance Charge of $30 from the
Contract Value on each Contract Anniversary prior to the Maturity Date. This
charge is to reimburse the Company for its administrative expenses (see
above). This charge is deducted by subtracting values from the Fixed Account
and/or cancelling Accumulation Units from each applicable Subaccount in the
ratio that the value of each account bears to the total Contract Value. If a
total withdrawal is made on other than a Contract Anniversary, the Annual
Contract Maintenance Charge will be deducted at the time of withdrawal. If
the Maturity Date is not a Contract Anniversary, the Annual Contract
Maintenance Charge will be deducted from the Maturity Proceeds. The Company
has set this charge at a level so that, when considered in conjunction with
the Administrative Charge (see above), it will not make a profit from the
charges assessed for administration.
DEDUCTION FOR PREMIUM TAXES
The Contract provides that any premium or other taxes paid to any government
entity relating to the Contract will be deducted from the Purchase Payment or
Contract Value when incurred. Some states assess premium taxes at the time
Purchase Payments are made; others assess premium taxes at the time Annuity
Payments begin. Premium taxes generally range from 0% to 4%. The Contract
also provides that the Company may, at its sole discretion, pay taxes when due
and deduct that amount from the Contract Value at a later date. Payment at an
earlier date does not waive any right the Company may have to deduct amounts
at a later date. The Company currently intends to advance any premium taxes
due at the time Purchase Payments are made and then deduct such premium taxes
from an Owner's Contract Value at the time Annuity Payments begin or upon
withdrawal if the Company is unable to obtain a refund. The Company will, in
its sole discretion, determine when taxes have resulted from:
(1) the investment experience of the Separate Account;
(2) receipt by the Company of the Purchase Payments; or
(3) commencement of Annuity Payments.
DEDUCTION FOR INCOME TAXES
While the Company is not currently maintaining a provision for federal income
taxes with respect to the Separate Account, the Company has reserved the right
to establish a provision for income taxes if it determines, in its sole
discretion, that it will incur a tax as a result of the operation of the
Separate Account. The Company will deduct for any income taxes incurred by it
as a result of the operation of the Separate Account whether or not there was
a provision for taxes and whether or not it was sufficient. The Company will
deduct any withholding taxes required by applicable law.
DEDUCTION FOR EXPENSES OF THE INVESTMENT OPTIONS
There are other deductions from and expenses paid out of the assets of the
Investment Options , including amounts paid for other expenses and
amounts paid to the Investment Advisers as Management Fees, which are
described in the accompanying Prospectuses for the Investment Options.
DEDUCTION FOR TRANSFER FEE
Prior to the Maturity Date, the Owner may transfer all or part of the Owner's
interest in a Subaccount or the Fixed Account (subject to Fixed Account
provisions) without the imposition of any fee or charge if there have been no
more than 12 transfers made in the Contract Year. If more than 12 transfers
have been made in the Contract Year, the Company will deduct a Transfer Fee
which is equal to the lesser of 2% of the Contract Value transferred or an
amount not greater than $25. (The current amount is $25.) Currently, all
transfers made on any one day are considered a single transfer. If the Owner
is participating in the Automatic Portfolio Rebalancing program or the Dollar
Cost Averaging program providing for the automatic transfer of funds from a
Subaccount or the Fixed Account to any other Subaccount(s), such transfers
currently are not counted toward the number of transfers for the year and are
not taken into account in determining any Transfer Fee. However, the Company
reserves the right to treat multiple transfers in a single day, Automatic
Portfolio Rebalancing transfers and Dollar Cost Averaging transfers as
standard transfers when determining annual transfers and imposing the Transfer
Fee. (See "Purchase Payments and Contract Value -- Dollar Cost Averaging" on
Page __ and "Purchase Payments and Contract Value - Automatic Portfolio
Rebalancing" on Page __.)
THE CONTRACTS
OWNERSHIP
The Owner exercises all the rights under the Contract. The maximum issue Age
is 85 years old for Owners and Annuitants (in Florida, 75 years old for
Annuitants). The Owner may name a new Owner. Any change in Ownership must
be sent to the Company's Annuity Service Center on a form acceptable to the
Company. The change will go into effect when it is signed, subject to any
payments or actions taken by the Company before it records it. The Company is
not responsible for any tax consequences occurring as a result of ownership
changes.
ANNUITANT
The Annuitant is the natural person on whose life Annuity Payments are based.
The Annuitant is irrevocably named at the time the Contract is issued.
ASSIGNMENT
During the Annuitant's life, the Owner can assign some or all of the Owner's
rights under the Contract to someone else.
A signed copy of the assignment must be sent to the Company's Annuity Service
Center on a form acceptable to the Company. An assignment of the Contract is
not binding on the Company until the assignment, or a copy, is recorded at the
Annuity Service Center, subject to any payments or actions taken by the
Company before the recording. The Company is not responsible for the validity
or effect of any assignment, including any tax consequences.
The consent of any Irrevocable Beneficiaries is required before assignment of
Proceeds can happen.
BENEFICIARY
The Owner can name any Beneficiary to be an Irrevocable Beneficiary. The
interest of an Irrevocable Beneficiary cannot be changed without his or her
consent. Otherwise, the Owner can change Beneficiaries as explained below.
Unless the Owner states otherwise, all rights of a Beneficiary, including an
Irrevocable Beneficiary, will end if he or she dies before the Annuitant. If
any Beneficiary dies before the Annuitant, that Beneficiary's interest will
pass to any other Beneficiaries according to their respective interests. If
all Beneficiaries die before the Annuitant, upon the Annuitant's death the
Company will pay the Death Proceeds to the Owner, if living, otherwise to the
Owner's estate or legal successors.
The Owner can change the Beneficiary at any time during the Annuitant's life.
To do so, the Owner must send a written request to the Company's Annuity
Service Center. The request must be on a form acceptable to the Company. The
change will go into effect when signed, subject to any payments or actions
taken by the Company before it records the change.
A change cancels all prior Beneficiary designations; except, however, a change
will not cancel any Irrevocable Beneficiary without his or her consent. The
interest of the Beneficiary will be subject to:
(1) any assignment of the Contract, accepted and recorded by the Company
prior to the Annuitant's death; and
(2) any Payment Plan in effect on the date of the Annuitant's death.
Death Proceeds will be paid as though the Beneficiary died before the
Annuitant if:
(1) the Beneficiary dies at the same time as the Annuitant; or
(2) the Beneficiary dies within 24 hours of the Annuitant's death.
PURCHASE PAYMENTS AND CONTRACT VALUE
PURCHASE PAYMENTS
The initial Purchase Payment is due on the Issue Date. There is no Contract
until the initial Purchase Payment is paid. If any check presented as payment
of any part of the initial Purchase Payment for a Contract is not honored, the
Contract is void.
The minimum Purchase Payment for Non-Qualified Contracts is an aggregate of
$5,000 the first year and the minimum subsequent Purchase Payment is $100.
Under certain circumstances the Company may waive and/or modify the minimum
subsequent Purchase Payment requirement for Non-Qualified Contracts in the
case of large groups who submit Purchase Payments through Company approved
billing procedures. For Qualified Contracts, the minimum Purchase Payment is
$100 per month if payroll deduction is used; otherwise it is an aggregate of
$2,000 per year. Prior Company approval must be obtained for subsequent
Purchase Payments in excess of $500,000 or for total Purchase Payments in
excess of $1 million. The Company reserves the right to decline or accept any
Application or Purchase Payment.
ALLOCATION OF PURCHASE PAYMENTS
The initial Purchase Payment is allocated to the Fixed Account or the
Subaccount(s) of the Separate Account as elected by the Owner. Unless
otherwise changed by the Owner, subsequent Purchase Payments are allocated in
the same manner as the initial Purchase Payment. (In Oregon, Washington and
New Jersey, after the second Contract Year, subsequent Purchase Payments may
not be allocated to the Fixed Account.) Under certain circumstances, Purchase
Payments, which have been designated by prospective purchasers to be allocated
to the Fixed Account or Subaccounts other than the Money Market Subaccount,
may initially be allocated to the Money Market Subaccount during the free look
period. (See "Highlights" on Page __.) For each Subaccount, Purchase Payments
are converted into Accumulation Units. The number of Accumulation Units
credited to the Contract is determined by dividing the Purchase Payment
allocated to the Subaccount by the value of the Accumulation Unit for the
Subaccount. Purchase Payments allocated to the Fixed Account are credited in
dollars.
If the Application for a Contract is in good order, the Company will apply the
Purchase Payment to the Separate Account and credit the Contract with
Accumulation Units and/or to the Fixed Account and credit the Contract with
dollars within two business days of receipt. If the Application for a
Contract is not in good order, the Company will attempt to get it in good
order or the Company will return the Application and the Purchase Payment
within five (5) business days. The Company will not retain a Purchase Payment
for more than five (5) business days while processing an incomplete
Application unless it has been so authorized by the purchaser.
DOLLAR COST AVERAGING
Dollar Cost Averaging is a program which, if elected, permits an Owner to
systematically transfer each month amounts from any one Subaccount or the
Fixed Account (subject to Fixed Account provisions) to any Subaccount(s). By
allocating amounts on a regularly scheduled basis as opposed to allocating the
total amount at one particular time, an Owner may be less susceptible to the
impact of market fluctuations. The minimum amount which may be transferred is
$100. The minimum duration of participation in any Dollar Cost Averaging
program is currently five (5) months. An Owner must have a minimum of the
amount required in the Subaccount or the Fixed Account to complete the Owner's
designated program, in order to participate in the Dollar Cost Averaging
program.
All Dollar Cost Averaging transfers will be made on the 15th of each month or
another monthly date mutually agreed upon (or the next Valuation Date if the
15th of the month is not a Valuation Date). If the Owner is participating in
the Dollar Cost Averaging program, such transfers currently are not taken into
account in determining any Transfer Fee. The Company reserves the right to
treat Dollar Cost Averaging transfers as standard transfers when determining
the number of transfers in a year and imposing any applicable Transfer Fees.
An Owner participating in the Dollar Cost Averaging program may not make
automatic withdrawals of his or her Contract Value or participate in the
Automatic Portfolio Rebalancing program. (See "Purchase Payments and Contract
Value - Automatic Portfolio Rebalancing" below and "Withdrawals --
Automatic Withdrawals" on Page __.)
AUTOMATIC PORTFOLIO REBALANCING
Owners may participate in the Automatic Portfolio Rebalancing pursuant to
which Owners authorize the Company to automatically transfer all or a portion
of their Contract Value on a periodic basis to maintain a particular
percentage allocation among the Portfolios as selected by the Owner. The
Contract Value allocated to each Portfolio will increase or decrease at
different rates depending on the investment experience of the Portfolio and
Automatic Portfolio Rebalancing automatically reallocates the Contract Value
in the Portfolios selected to the allocation chosen by the Owner. Portfolios
that have Contract Value may not automatically be included in Automatic
Portfolio Rebalancing unless selected by the Owner.
An Owner may select that rebalancing occur on a quarterly, semiannual or
annual basis and currently all Portfolios are available investment options
under Automatic Portfolio Rebalancing. The Fixed Account is excluded from
rebalancing. Currently, the Company offers Automatic Portfolio Rebalancing to
Owners with a Contract Value of greater than $25,000, but reserves the right
to offer the program on Contracts with a lesser amount. The Company reserves
the right to modify, suspend or terminate this service at any time.
All Automatic Portfolio Rebalancing transfers will be made on the 15th of the
month rebalancing is requested or another monthly date mutually agreed upon
(or the next Valuation Date, if the 15th of the month is a not a Valuation
Date). If the Owner is participating in the Automatic Portfolio Rebalancing
program, such transfers currently are not taken into account in determining
any Transfer Fee. The Company reserves the right to treat Automatic Portfolio
Rebalancing transfers as standard transfers when determining the number of
transfers in a year and imposing any applicable Transfer Fees. An Owner
participating in the Automatic Portfolio Rebalancing program may not make
automatic withdrawals of his or her Contract Value or participate in the
Dollar Cost Averaging Program (See "Purchase Payments and Contract
Value-Dollar Cost Averaging" above and "Withdrawals-Automatic
Withdrawals" on Page __.)
CONTRACT VALUE
The Contract Value, at any time, is the sum of:
(1) the Fixed Account Value; and
(2) the Separate Account Value.
The Separate Account value on any Valuation Date means the sum of the Owner's
interests in the Subaccounts of the Separate Account. The value of the
Owner's interest in a Subaccount is determined by multiplying the number of
Accumulation Units attributable to that Subaccount by the Accumulation Unit
value for the Subaccount. Any withdrawals or transfers will result in the
cancellation of Accumulation Units in a Subaccount. The Separate Account
values will vary with the performance of the Subaccounts of the Separate
Account, any Purchase Payments paid, partial withdrawals and charges assessed.
ACCUMULATION UNIT
A Purchase Payment when allocated to the Separate Account is converted into
Accumulation Units for the selected Subaccount. The number of Accumulation
Units in a Subaccount credited to the Contract is determined by dividing the
Purchase Payment allocated to that Subaccount by the Accumulation Unit value
for that Subaccount as of the Valuation Period during which the Purchase
Payment is allocated to the Subaccount. The Accumulation Unit value for each
Subaccount was arbitrarily set initially at $10. Subsequent Accumulation Unit
values are determined by subtracting (2) from (1) and dividing the result by
(3) where:
(1) is the net result of:
(a) the assets of the Subaccount attributable to Accumulation
Units; plus or minus
(b) the cumulative charge or credit for taxes reserved, which
resulted from the operation or maintenance of the Subaccount.
(2) is the cumulative unpaid charge for the Mortality and Expense Risk
Charge and for the Administrative Charge; and
(3) is the number of Accumulation Units outstanding at the end of the
Valuation Period.
The Accumulation Unit value may increase or decrease from Valuation Period to
Valuation Period.
TRANSFERS
Prior to the Maturity Date, the Owner may transfer all or part of the Owner's
interest in a Subaccount or the Fixed Account without the imposition of any
fee or charge if there have been no more than 12 transfers for the Contract
Year. All transfers are subject to the following:
(1) if more than 12 free transfers have been made in any Contract Year,
the Company will deduct a Transfer Fee for each subsequent transfer. (The
Transfer Fee is the lesser of 2% of Contract Value transferred or $25.) The
Transfer Fee will be deducted from the amount which is transferred. Transfers
from a Dollar Cost Averaging program or Automatic Portfolio Rebalancing
program are currently not counted toward the number of annual transfers and
are not taken into account in determining any applicable Transfer Fees.
Currently, all transfers in a single day are treated as a single transfer.
The Company reserves the right to treat Dollar Cost Averaging transfers,
Automatic Portfolio Rebalancing transfers and multiple transfers in a single
day as standard transfers in determining the number of annual transfers and
the imposition of any applicable Transfer Fees.
(2) the minimum amount which can be transferred is $100 or the Owner's
entire interest in the Subaccount or the Fixed Account, if less. The minimum
amount which must remain in a Subaccount or Fixed Account after a transfer is
$100 or the Subaccount or Fixed Account must be liquidated.
(3) for any Contract Year, transfers of Purchase Payments and any
attributable earnings from the Fixed Account to a Subaccount are limited to
ten percent (10%) of the Purchase Payment and ten percent (10%) of its
attributable earnings. If a Purchase Payment was received at least eight (8)
years prior to the request for transfer, all of the Purchase Payment and the
earnings attributable to it may be transferred to a Subaccount. ( In New
Jersey, no amounts may be transferred to the Fixed Account after the second
Contract Year).
(4) any transfer direction must clearly specify:
(a) the amount which is to be transferred; and
(b) the Fixed Account or Subaccounts which are to be affected.
(5) transfers will be made as of the Valuation Period next following the
Valuation Period during which a written request for a transfer is received by
the Company.
(6) the Company reserves the right, at any time, and without prior
notice to any party, to terminate, suspend, or modify the transfer privilege
described above, subject to applicable state law and regulation.
An Owner may elect to make transfers by telephone. To elect this option the
Owner must do so in writing to the Company. If there are Joint Owners, unless
the Company is informed to the contrary, instructions will be accepted from
either one of the Joint Owners. The Company will use reasonable procedures to
confirm that instructions communicated by telephone are genuine. If it does
not, the Company may be liable for any losses due to unauthorized or
fraudulent instructions. The Company may tape record all telephone
instructions.
WITHDRAWALS
Prior to the Maturity Date, the Owner may, upon written request received by
the Company, make a total or partial withdrawal of the Contract Withdrawal
Value. (For Contracts issued in Idaho, no partial withdrawal may be made for
30 days after the Issue Date.) The Contract terminates if a total withdrawal
is made. The Contract Withdrawal Value is:
(1) the Contract Value for the Valuation Period next following the
Valuation Period during which a written request for a withdrawal is received
by the Company; less
(2) any applicable taxes not previously deducted; less
(3) the Withdrawal Charge, if any (see "Charges and Deductions --
Deduction for Withdrawal Charge (Sales Load)" on Page ); less
(4) the Annual Contract Maintenance Charge, if any.
A withdrawal will result in the cancellation of Accumulation Units for each
applicable Subaccount of the Separate Account or a reduction in the Fixed
Account Value. Unless otherwise instructed, a partial withdrawal will be
applied pro rata among each Subaccount and the Fixed Account based on the
ratio of the value of each Subaccount or Fixed Account to the Contract Value.
The Company will pay the amount of any withdrawal within seven (7) calendar
days of receipt of a request, unless the "Suspension of Payments or Transfers"
provision is in effect (see "Suspension of Payments or Transfers" below).
For purposes of determining any applicable Withdrawal Charges or any other
charges under the Contract, the distribution of Purchase Payments from within
a Subaccount or the Fixed Account is on a first-in, first-out basis with
earnings attributable to such Purchase Payments considered only after the
Purchase Payment is considered.
Each partial withdrawal must be for an amount which is not less than $100 or
the Owner's entire interest in the Subaccount or the Fixed Account, if less.
The minimum Contract Value which must remain in a Subaccount or the Fixed
Account after a partial withdrawal is $100.
Certain tax withdrawal penalties and restrictions may apply to withdrawals
from the Contracts. (See "Tax Status" on Page 21.) For Contracts purchased in
connection with 403(b) plans, the Code limits the withdrawal of amounts
attributable to contributions made pursuant to a salary reduction agreement
(as defined in Section 403(b)(11) of the Code) to circumstances only when the
Owner: (1) attains age 59 1/2; (2) separates from service; (3) dies; (4)
becomes disabled (within the meaning of Section 72(m)(7) of the Code); or (5)
in the case of hardship.
However, withdrawals for hardship are restricted to the portion of the Owner's
Contract Value which represents contributions made by the Owner and does not
include any investment results. The limitations on withdrawals became
effective on January 1, 1989 and apply only to salary reduction contributions
made after December 31, 1988, to income attributable to such contributions and
to income attributable to amounts held as of December 31, 1988. The
limitations on withdrawals do not affect rollovers or transfers between
certain Qualified Plans. Owners should consult their own tax counsel or other
tax adviser regarding any distributions.
AUTOMATIC WITHDRAWALS
At any time, an Owner may make a withdrawal each Contract Year of up to ten
percent (10%) of the total of all aggregate Purchase Payments at the beginning
of the Contract Year, less any Purchase Payments previously withdrawn, free
from Withdrawal Charges. Subject to any conditions and fees the Company may
impose, an Owner may elect to have this amount paid in equal periodic
installments ("automatic withdrawals"). The Company reserves the right to
charge a fee for automatic withdrawals. Currently, however, there are no
charges for automatic withdrawals.
Automatic withdrawals are made on the 15th of each month, or any other monthly
date mutually agreed upon (or the next following Valuation Date if the monthly
date is not a Valuation Date). Certain withdrawal penalties may apply to
withdrawals from the Contracts (see "Tax Status -- Tax Treatment of
Withdrawals -- Qualified Contracts" on Page __). Automatic withdrawals are
taken pro rata from Contract Value. The right to a 10% free single sum
withdrawal is forfeited. Automatic withdrawals are not allowed simultaneously
with the Dollar Cost Averaging program or Automatic Portfolio Rebalancing
program. (See "Purchase Payments and Contract Value -- Dollar Cost Averaging"
on Page __ and "Purchase Payments and Contract Value - Automatic Portfolio
Rebalancing" on Page __.)
TEXAS OPTIONAL RETIREMENT PROGRAM
A Contract issued to a participant in the Texas Optional Retirement Program
("ORP") will contain an ORP endorsement that will amend the Contract as
follows: A) If for any reason a second year of ORP participation is not begun,
the total amount of the State of Texas' first-year contribution will be
returned to the appropriate institute of higher education upon its request.
B) No benefits will be payable, through surrender of the Contract or
otherwise, until the participant dies, accepts retirement, terminates
employment in all Texas institutions of higher education or attains the age of
70 1/2. The value of the Contract may, however, be transferred to other
contracts or carriers during the period of ORP participation. A participant
in the ORP is required to obtain a certificate of termination from the
participant's employer before the value of a Contract can be withdrawn.
SUSPENSION OF PAYMENTS OR TRANSFERS
The Company reserves the right to suspend or postpone payments (in Illinois,
for a period not exceeding six months) for withdrawals or transfers for any
period when:
(1) the New York Stock Exchange is closed (other than customary weekend
and holiday closings);
(2) trading on the New York Stock Exchange is restricted;
(3) an emergency exists as a result of which disposal of securities held
in the Separate Account is not reasonably practicable or it is not reasonably
practicable to determine the value of the Separate Account's net assets;
(4) when the Company's Annuity Service Center is closed; or
(5) during any other period when the Securities and Exchange Commission,
by order, so permits for the protection of Owners; provided that applicable
rules and regulations of the Securities and Exchange Commission will govern as
to whether the conditions described in (2) and (3) exist.
The Company reserves the right to defer payment for a withdrawal or transfer
from the Fixed Account for the period permitted by law but not for more than
six months after written election is received by the Company.
CONTRACT PROCEEDS
MATURITY PROCEEDS
On the Maturity Date, the Company will pay the Maturity Proceeds of the
Contract to the Annuitant, if living, subject to the terms of the Contract.
If Payment Plan A, Option 1; Plan B; or Plan C are elected, the Maturity
Proceeds will be the Contract Value less any applicable taxes not previously
deducted. (See "Fixed Payment Plans" below.) If the Maturity Proceeds are
paid in cash or by any other method not listed above, the Maturity Proceeds
equal the Contract Value less:
(1) any applicable taxes not previously deducted; less
(2) the Withdrawal Charge, if any; less
(3) the Annual Contract Maintenance Charge, if any.
The election of a Payment Plan must be made in writing at least seven (7) days
prior to the Maturity Date. If no election is made, an automatic option of
monthly income for a minimum of 120 months and as long thereafter as the
Annuitant lives will be applied.
DEATH PROCEEDS
If death occurs prior to the end of the eighth Contract Year, the Death
Proceeds will be the greatest of:
(1) the sum of the Purchase Payments less any withdrawals including any
applicable Withdrawal Charge and any applicable taxes not previously deducted;
or
(2) the Contract Value less any applicable taxes not previously
deducted.
If death occurs after the end of the eighth Contract Year, the Death Proceeds
will be the greatest of:
(1) the sum of the Purchase Payments less any withdrawals including any
applicable Withdrawal Charge and less any applicable taxes not previously
deducted; or
(2) the Contract Value less any applicable taxes not previously
deducted; or
(3) the Contract Value at the end of the eighth Contract Year less any
withdrawals including any applicable Withdrawal Charge incurred since the end
of the eighth Contract Year and any applicable taxes not previously deducted.
The Death Proceeds will be determined and paid as of the Valuation Period next
following the Valuation Period during which both due proof of death
satisfactory to the Company and an election for the payment method from all
Beneficiaries are received at the Company.
The Beneficiary can elect to have a single lump sum payment or choose one of
the Payment Plans. If a single sum payment is requested, the amount will be
paid within seven (7) days, unless the Suspension of Payments or Transfers
provision is in effect.
Payment to the Beneficiary, other than in a single sum, may only be elected
during the 60-day period beginning with the date of receipt of due proof of
death on a form acceptable to the Company.
The entire Death Proceeds must be paid within five (5) years of the date of
death unless:
(1) the Beneficiary elects to have the Death Proceeds:
(a) payable under a Payment Plan over the life of the Beneficiary
or over a period not extending beyond the life expectancy of
the Beneficiary; and
(b) payable beginning within one year of the date of death; or
(2) if the Beneficiary is the Owner's Spouse, the Beneficiary may elect
to become the Owner of the Contract and the Contract will continue in effect.
DEATH OF THE ANNUITANT
(1) If the Annuitant dies prior to the Maturity Date, the Company will
pay the Death Proceeds as provided above except as provided in number (2)
below.
(2) If the Annuitant dies prior to the Maturity Date and if the
Annuitant was age 76 or greater on the Issue Date of the Contract, the Company
will pay the Death Proceeds as provided above except that the Death Proceeds
will equal the Contract Value less any applicable taxes not previously
deducted.
(3) If the Annuitant dies after the Maturity Date but before all of the
Proceeds payable under the Contract have been distributed, the Company will
pay the remaining Proceeds to the Beneficiary(ies) according to the terms of
the supplementary contract.
Provision (2) above is inapplicable in Florida.
DEATH OF OWNER
(1) If the Owner dies before the Maturity Date, ownership of the
Contract will be transferred as follows:
(a) if the Owner is also the Annuitant, the Death of the Annuitant
provision described above applies; or
(b) if the Owner is not also the Annuitant and if the new Owner is
the spouse of the Owner, the Contract may be continued; or
(c) if the Owner is not also the Annuitant and if the new Owner is
someone other than the spouse of the Owner, the Contract
Withdrawal Value must be distributed pursuant to the Death
Proceeds provision above.
(2) If the Owner dies on or after the Maturity Date, but before all
Proceeds payable under the Contract have been distributed, the Company will
continue payments according to the terms of the supplementary contract.
The Owner's spouse is the Owner's surviving spouse at the time of the Owner's
death. If the Owner is not a natural person, the death of the Annuitant will
be treated as the death of the Owner. If there are Joint Owners, any
references to the death of the Owner shall mean the first death of an Owner.
FIXED PAYMENT PLANS
After the first Contract Year, the Proceeds may be applied under one or more
of the Payment Plans described below. Payment Plans not specified in the
Contract are available only if they are approved both by the Company and the
Owner. The Owner chooses a Payment Plan during the Annuitant's lifetime.
This choice can be changed during the life of the Annuitant prior to the
Maturity Date. If the Owner has not chosen a plan prior to the Annuitant's
death, the automatic option of monthly income for a minimum of 120 months and
as long thereafter as the Payee lives will be applied.
The Owner chooses a plan by sending a written request to the Annuity Service
Center. The Company will send the Owner the proper forms to complete. The
request, when recorded at the Company's Annuity Service Center, will be in
effect from the date it was signed, subject to any payments or actions taken
by the Company before the recording. Any change must be requested at least
seven (7) days prior to the Maturity Date. If, for any reason, the person
named to receive payments (the Payee) is changed, the change will go into
effect when the request is recorded at the Company's Annuity Service Center,
subject to any payments or actions taken by the Company before the recording.
No Withdrawal Charge is deducted if Plan A-Option 1; Plan B or Plan C is
elected.
A plan is available only if the periodic payment is $100 or more. If the
Payee is other than a natural person (such as a corporation), a plan will be
available only with the Company's consent.
A supplementary contract will be issued in exchange for the Contract when
payment is made under a Payment Plan. The effective date of a Payment Plan
shall be a date upon which the Company and the Owner mutually agree.
The minimum interest rate for plans A and B is 3.0% a year, compounded yearly.
The minimum rates for Plan C were based on the 1983a Annuity Table at 3.0%
interest, compounded yearly. The Company may pay a higher rate at its
discretion.
PLAN A. INTEREST
OPTION 1--The Contract Value less any applicable taxes not previously
deducted may be left on deposit with the Company for five (5) years. Fixed
payments will be made monthly, quarterly, semi-annually, or annually. The
Company does not allow a monthly payment if the Contract Value applied under
this option is less than $100,000. The Proceeds may not be withdrawn until
the end of the five (5) year period.
OPTION 2--The Contract Withdrawal Value may be left on deposit with the
Company for a specified period. Interest will be paid annually. All or part
of the Proceeds may be withdrawn at any time.
PLAN B. FIXED PERIOD
The Contract Value less any applicable taxes not previously deducted will be
paid until the Proceeds, plus interest, are paid in full. Payments may be
paid annually or monthly. The payment period cannot be more than thirty (30)
years nor less than five (5) years. The Contract provides for a table of
minimum annual payments. They are based on the Age of the Annuitant or the
Beneficiary.
PLAN C. LIFE INCOME
The Contract Value less any applicable taxes not previously deducted will be
paid in monthly or annual payments for as long as the Annuitant or
Beneficiary, whichever is appropriate, lives. The Company has the right to
require proof satisfactory to it of the Age and sex of such person and proof
of continuing survival of such person. A minimum number of payments may be
guaranteed, if desired. The Contract provides for a table of minimum annual
payments. They are based on the Age of the Annuitant or the Beneficiary.
DISTRIBUTOR
Equitable of Iowa Securities Network, Inc. ("Securities Network"), 604 Locust
Street, Des Moines, Iowa 50309, acts as the distributor of the Contracts.
Securities Network is also a wholly-owned subsidiary of Equitable of Iowa
Companies. The Contracts are offered on a continuous basis.
PERFORMANCE INFORMATION
MONEY MARKET PORTFOLIO
From time to time, the Money Market Subaccount of the Separate Account may
advertise its "yield" and "effective yield." Both yield figures are based on
historical earnings and are not intended to indicate future performance. The
"yield" of the Money Market Subaccount refers to the income generated by
Contract Values in the Money Market Subaccount over a seven-day period (which
period will be stated in the advertisement). This income is "annualized."
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the Contract Values in the Money Market Subaccount. The
"effective yield" is calculated similarly. However, when annualized, the
income earned by Contract Values is assumed to be reinvested. This results in
the "effective yield" being slightly higher than the "yield" because of the
compounding effect of the assumed reinvestment. The yield figure will reflect
the deduction of any asset-based charges and any applicable Annual Contract
Maintenance Charge, but will not reflect the deduction of any Withdrawal
Charge. The deduction of any Withdrawal Charge would reduce any percentage
increase or make greater any percentage decrease.
OTHER PORTFOLIOS
From time to time, the Company may advertise performance data for the various
other Portfolios under the Contract. Such data will show the percentage
change in the value of an Accumulation Unit based on the performance of an
investment medium over a period of time, usually a calendar year, determined
by dividing the increase (decrease) in value for that Unit by the Accumulation
Unit value at the beginning of the period. This percentage figure will
reflect the deduction of any asset-based charges and any applicable Annual
Contract Maintenance Charges under the Contracts, but will not reflect the
deduction of any Withdrawal Charge. The deduction of any Withdrawal Charge
would reduce any percentage increase or make greater any percentage decrease.
Any advertisement will also include total return figures calculated as
described in the Statement of Additional Information. The total return
figures reflect the deduction of any applicable Annual Contract Maintenance
Charge and Withdrawal Charges, as well as any asset-based charges.
The Company has decided to make available yield information with respect to
some of the Portfolios. Such yield information will be calculated as
described in the Statement of Additional Information. The yield information
will reflect the deduction of any applicable Annual Contract Maintenance
Charge as well as any asset-based charges.
The Company may also show historical Accumulation Unit values in certain
advertisements containing illustrations. These illustrations will be based on
actual Accumulation Unit values.
In addition, the Company may distribute sales literature which compares the
percentage change in Accumulation Unit values for any of the Portfolios
against established market indices such as the Standard & Poor's 500 Composite
Stock Price Index, the Dow Jones Industrial Average or other management
investment companies which have investment objectives similar to the Portfolio
being compared. The Standard & Poor's 500 Composite Stock Price Index is an
unmanaged, unweighted average of 500 stocks, the majority of which are listed
on the New York Stock Exchange. The Dow Jones Industrial Average is an
unmanaged, weighted average of thirty blue chip industrial corporations listed
on the New York Stock Exchange. Both the Standard & Poor's 500 Composite
Stock Price Index and the Dow Jones Industrial Average assume quarterly
reinvestment of dividends.
In addition, the Company may, as appropriate, compare each Subaccount's
performance to that of other types of investments such as certificates of
deposit, savings accounts and U.S. Treasuries, or to certain interest rate and
inflation indices, such as the Consumer Price Index, which is published by the
U.S. Department of Labor and measures the average change in prices over time
of a fixed "market basket" of certain specified goods and services. Similar
comparisons of Subaccount performance may also be made with appropriate
indices measuring the performance of a defined group of securities widely
recognized by investors as representing a particular segment of the securities
markets. For example, Subaccount performance may be compared with Donoghue
Money Market Institutional Averages (money market rates), Lehman Brothers
Corporate Bond Index (corporate bond interest rates) or Lehman Brothers
Government Bond Index (long-term U.S. Government obligation interest rates).
The Company may also distribute sales literature which compares the
performance of the Accumulation Unit values of the Contracts issued through
the Separate Account with the unit values of variable annuities issued through
the separate accounts of other insurance companies. Such information will be
derived from the Lipper Variable Insurance Products Performance Analysis
Service, the VARDS Report or from Morningstar.
The Lipper Variable Insurance Products Performance Analysis Service is
published by Lipper Analytical Services, Inc., a publisher of statistical data
which currently tracks the performance of almost 4,000 investment companies.
The rankings compiled by Lipper may or may not reflect the deduction of
asset-based insurance charges. The Company's sales literature utilizing these
rankings will indicate whether or not such charges have been deducted. Where
the charges have not been deducted, the sales literature will indicate that if
the charges had been deducted, the ranking might have been lower.
The VARDS Report is a monthly variable annuity industry analysis compiled by
Variable Annuity Research & Data Service of Atlanta and published by Financial
Planning Resources, Inc. The VARDS rankings may or may not reflect the
deduction of asset-based insurance charges. The Company's sales literature
utilizing these rankings will indicate whether or not such charges have been
deducted. Where the charges have not been deducted, the sales literature will
indicate that if the charges had been deducted, the ranking might have been
lower.
Morningstar rates a variable annuity subaccount against its peers with similar
investment objectives. Morningstar does not rate any subaccount that has less
than three years of performance data. The Company's sales literature
utilizing these rankings will indicate whether charges have been deducted.
Where the charges have not been deducted, the sales literature will indicate
that if the charges had been deducted, the ranking might have been lower.
TAX STATUS
GENERAL
NOTE: THE FOLLOWING DESCRIPTION IS BASED UPON THE COMPANY'S UNDERSTANDING OF
CURRENT FEDERAL INCOME TAX LAW APPLICABLE TO ANNUITIES IN GENERAL. THE
COMPANY CANNOT PREDICT THE PROBABILITY THAT ANY CHANGES IN SUCH LAWS WILL BE
MADE. PURCHASERS ARE CAUTIONED TO SEEK COMPETENT TAX ADVICE REGARDING THE
POSSIBILITY OF SUCH CHANGES. THE COMPANY DOES NOT GUARANTEE THE TAX STATUS OF
THE CONTRACTS. PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT
BE TREATED AS "ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS. IT SHOULD BE
FURTHER UNDERSTOOD THAT THE FOLLOWING DISCUSSION IS NOT EXHAUSTIVE AND THAT
SPECIAL RULES NOT DESCRIBED IN THIS PROSPECTUS MAY BE APPLICABLE IN CERTAIN
SITUATIONS. MOREOVER, NO ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE
STATE OR OTHER TAX LAWS.
Section 72 of the Code governs taxation of annuities in general. An Owner is
not taxed on increases in the value of a Contract until distribution occurs,
either in the form of a lump sum payment or as annuity payments under the
Annuity Option selected. For a lump sum payment received as a total
withdrawal (total surrender), the recipient is taxed on the portion of the
payment that exceeds the cost basis of the Contract. For Non-Qualified
Contracts, this cost basis is generally the purchase payments, while for
Qualified Contracts there may be no cost basis. The taxable portion of the
lump sum payment is taxed at ordinary income tax rates.
For annuity payments, a portion of each payment in excess of an exclusion
amount is includible in taxable income. The exclusion amount for payments
based on a fixed annuity option is determined by multiplying the payment by
the ratio that the cost basis of the Contract (adjusted for any period certain
or refund feature) bears to the expected return under the Contract. Payments
received after the investment in the Contract has been recovered (i.e. when
the total of the excludible amounts equal the investment in the Contract) are
fully taxable. The taxable portion is taxed at ordinary income tax rates.
For certain types of Qualified Plans there may be no cost basis in the
Contract within the meaning of Section 72 of the Code. Owners, Annuitants and
Beneficiaries under the Contracts should seek competent financial advice about
the tax consequences of any distributions.
The Company is taxed as a life insurance company under the Code. For federal
income tax purposes, the Separate Account is not a separate entity from the
Company and its operations form a part of the Company.
DIVERSIFICATION
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not, in
accordance with regulations prescribed by the United States Treasury
Department ("Treasury Department"), adequately diversified. Disqualification
of the Contract as an annuity contract would result in imposition of federal
income tax to the Owner with respect to earnings allocable to the Contract
prior to the receipt of payments under the Contract. The Code contains a safe
harbor provision which provides that annuity contracts such as the Contracts
meet the diversification requirements if, as of the end of each quarter, the
underlying assets meet the diversification standards for a regulated
investment company and no more than fifty-five percent (55%) of the total
assets consist of cash, cash items, U.S. Government securities and securities
of other regulated investment companies.
On March 2, 1989, the Treasury Department issued Regulations (Treas. Reg.
1.817-5), which established diversification requirements for the investment
portfolios underlying variable contracts such as the Contracts. The
Regulations amplify the diversification requirements for variable contracts
set forth in the Code and provide an alternative to the safe harbor provision
described above. Under the Regulations, an investment portfolio will be
deemed adequately diversified if: (1) no more than 55% of the value of the
total assets of the portfolio is represented by any one investment; (2) no
more than 70% of the value of the total assets of the portfolio is represented
by any two investments; (3) no more than 80% of the value of the total assets
of the portfolio is represented by any three investments; and (4) no more than
90% of the value of the total assets of the portfolio is represented by any
four investments.
The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable
contracts by Section 817(h) of the Code have been met, "each United States
government agency or instrumentality shall be treated as a separate issuer".
The Company intends that all Portfolios of the Investment Options underlying
the Contracts will be managed by the investment advisers for the Investment
Options in such a manner as to comply with these diversification requirements.
The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which Owner control of the
investments of the Separate Account will cause the Owner to be treated as the
owner of the assets of the Separate Account, thereby resulting in the loss of
favorable tax treatment for the Contract. At this time it cannot be
determined whether additional guidance will be provided and what standards may
be contained in such guidance.
The amount of Owner control which may be exercised under the Contract is
different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
owner was not the owner of the assets of the separate account. It is unknown
whether these differences, such as the Owner's ability to transfer among
investment choices or the number and type of investment choices available,
would cause the Owner to be considered as the owner of the assets of the
Separate Account resulting in the imposition of federal income tax to the
Owner with respect to earnings allocable to the Contract prior to receipt of
payments under the Contract.
In the event any forthcoming guidance or ruling is considered to set forth a
new position, such guidance or ruling will generally be applied only
prospectively. However, if such ruling or guidance was not considered to set
forth a new position, it may be applied retroactively resulting in the Owner
being retroactively determined to be the owner of the assets of the Separate
Account.
Due to the uncertainty in this area, the Company reserves the right to modify
the Contract in an attempt to maintain favorable tax treatment.
MULTIPLE CONTRACTS
The Code provides that multiple non-qualified annuity contracts which are
issued within a calendar year to the same contract owner by one company or its
affiliates are treated as one annuity contract for purposes of determining the
tax consequences of any distribution. Such treatment may result in adverse
tax consequences including more rapid taxation of the distributed amounts from
such combination of contracts. Owners should consult a tax adviser prior to
purchasing more than one non-qualified annuity contract in any calendar year.
CONTRACTS OWNED BY OTHER THAN NATURAL PERSONS
Under Section 72(u) of the Code, the investment earnings on premiums for
Contracts will be taxed currently to the Owner if the Owner is a non-natural
person, e.g., a corporation or certain other entities. Such Contracts
generally will not be treated as annuities for federal income tax purposes.
However, this treatment is not applied to Contracts held by a trust or other
entity as an agent for a natural person nor Contracts held by Qualified Plans.
Purchasers should consult their own tax counsel or other tax adviser before
purchasing a Contract to be owned by a non-natural person.
TAX TREATMENT OF ASSIGNMENTS
An assignment or pledge of a Contract may be a taxable event. Owners should
therefore consult competent tax advisers should they wish to assign or pledge
their Contracts.
INCOME TAX WITHHOLDING
All distributions or the portion thereof which is includible in the gross
income of the Owner are subject to Federal income tax withholding. Generally,
amounts are withheld from periodic payments at the same rate as wages and at
the rate of 10% from non-periodic payments. However, the Owner, in most
cases, may elect not to have taxes withheld or to have withholding done at a
different rate.
Effective January 1, 1993, certain distributions from retirement plans
qualified under Section 401 or Section 403(b) of the Code, which are not
directly rolled over to another eligible retirement plan or individual
retirement account or individual retirement annuity, are subject to a
mandatory 20% withholding for Federal income tax. The 20% withholding
requirement generally does not apply to: a) a series of substantially equal
payments made at least annually for the life or life expectancy of the
participant or joint and last survivor expectancy of the participant and a
designated beneficiary, or for a specified period of 10 years or more; b)
distributions which are required minimum distributions; or c) the portion of
the distributions not includible in gross income (i.e. returns of after-tax
contributions). Participants should consult their own tax counsel or other tax
advisor regarding withholding requirements.
TAX TREATMENT OF WITHDRAWALS -- NON-QUALIFIED CONTRACTS
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the Contract Value exceeds the aggregate
purchase payments made, any amount withdrawn will be treated as coming first
from the earnings and then, only after the income portion is exhausted, as
coming from the principal. Withdrawn earnings are includible in gross income.
It further provides that a ten percent (10%) penalty will apply to the income
portion of any distribution. However, the penalty is not imposed on amounts
received: (a) after the taxpayer reaches age 59 1/2; (b) after the death of
the Owner; (c) if the taxpayer is totally disabled (for this purpose
disability is as defined in Section 72(m)(7) of the Code); (d) in a series of
substantially equal periodic payments made not less frequently than annually
for the life (or life expectancy) of the taxpayer or for the joint lives (or
joint life expectancies) of the taxpayer and his or her Beneficiary; (e) under
an immediate annuity; or (f) which are allocable to purchase payments made
prior to August 14, 1982.
The Contract provides that upon the death of the Annuitant prior to the
Maturity Date, the Death Proceeds will be paid to the named Beneficiary. Such
payments made upon the death of the Annuitant who is not the Owner of the
Contract do not qualify for the death of Owner exception described above, and
will be subject to the ten (10%) percent distribution penalty unless the
Beneficiary is 59 1/2 years old or one of the other exceptions to the penalty
applies.
The above information does not apply to Qualified Contracts. However,
separate tax withdrawal penalties and restrictions may apply to such Qualified
Contracts. (See "Tax Treatment of Withdrawals -- Qualified Contracts",
below.)
QUALIFIED PLANS
The Contracts offered by this Prospectus are designed to be suitable for use
under various types of qualified plans. Generally, participants in a
qualified plan are not taxed on increases to the value of the contributions to
the plan until distribution occurs, regardless of whether the plan assets are
held under an annuity contract. Taxation of participants in each qualified
plan varies with the type of plan and terms and conditions of each specific
plan. Owners, Annuitants and Beneficiaries are cautioned that benefits under
a qualified plan may be subject to the terms and conditions of the plan
regardless of the terms and conditions of the Contracts issued pursuant to the
plan. Some retirement plans are subject to distribution and other
requirements that are not incorporated into the Company's administrative
procedures. Contract Owners, participants and beneficiaries are responsible
for determining that contributions, distributions and other transactions with
respect to the Contracts comply with applicable law. Following are general
descriptions of the types of qualified plans with which the Contracts may be
used. Such descriptions are not exhaustive and are for general informational
purposes only. The tax rules regarding qualified plans are very complex and
will have differing applications depending on individual facts and
circumstances. Each purchaser should obtain competent tax advice prior to
purchasing a Contract issued under a qualified plan.
Contracts issued pursuant to qualified plans include special provisions
restricting Contract provisions that may otherwise be available as described
in this Prospectus. Generally, Contracts issued pursuant to qualified plans
are not transferable except upon surrender or annuitization. Various penalty
and excise taxes may apply to contributions or distributions made in violation
of applicable limitations. Furthermore, certain withdrawal penalties and
restrictions may apply to surrenders from Qualified Contracts. (See "Tax
Treatment of Withdrawals -- Qualified Contracts", below.)
On July 6, 1983, the Supreme Court decided in Arizona Governing Committee v.
Norris that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women. The Contracts sold by the Company in connection
with certain Qualified Plans will utilize annuity tables which do not
differentiate on the basis of sex. Such annuity tables will also be available
for use in connection with certain non-qualified deferred compensation plans.
A. H.R. 10 PLANS
Section 401 of the Code permits self-employed individuals to establish
Qualified Plans for themselves and their employees, commonly referred to as
"H.R. 10" or "Keogh" plans. Contributions made to the Plan for the benefit
of the employees will not be included in the gross income of the employees
until distributed from the Plan. The tax consequences to participants may
vary depending upon the particular plan design. However, the Code places
limitations and restrictions on all Plans including on such items as: amount
of allowable contributions; form, manner and timing of distributions;
transferability of benefits; vesting and nonforfeitability of interests;
nondiscrimination in eligibility and participation; and the tax treatment of
distributions, withdrawals and surrenders. (See "Tax Treatment of Withdrawals
- -- Qualified Contracts" and "Tax-Sheltered Annuities - Withdrawal Limitations"
below.) Purchasers of Contracts for use with an H.R. 10 Plan should obtain
competent tax advice as to the tax treatment and suitability of such an
investment.
B. TAX-SHELTERED ANNUITIES
Section 403(b) of the Code permits the purchase of "tax-sheltered
annuities" by public schools and certain charitable, educational and
scientific organizations described in Section 501(c)(3) of the Code. These
qualifying employers may make contributions to the Contracts for the benefit
of their employees. Such contributions are not includible in the gross income
of the employees until the employees receive distributions from the Contracts.
The amount of contributions to the tax-sheltered annuity is limited to
certain maximums imposed by the Code. Furthermore, the Code sets forth
additional restrictions governing such items as transferability,
distributions, nondiscrimination and withdrawals. (See "Tax Treatment of
Withdrawals -- Qualified Contracts" and "Tax-Sheltered Annuities - Withdrawal
Limitations" below.) Any employee should obtain competent tax advice as to the
tax treatment and suitability of such an investment.
C. INDIVIDUAL RETIREMENT ANNUITIES
Section 408(b) of the Code permits eligible individuals to contribute to
an individual retirement program known as an "Individual Retirement Annuity"
("IRA"). Under applicable limitations, certain amounts may be contributed to
an IRA which will be deductible from the individual's gross income. These
IRAs are subject to limitations on eligibility, contributions, transferability
and distributions. (See "Tax Treatment of Withdrawals -- Qualified Contracts"
below.) Under certain conditions, distributions from other IRAs and other
Qualified Plans may be rolled over or transferred on a tax-deferred basis into
an IRA. Sales of Contracts for use with IRAs are subject to special
requirements imposed by the Code, including the requirement that certain
informational disclosure be given to persons desiring to establish an IRA.
Purchasers of Contracts to be qualified as Individual Retirement Annuities
should obtain competent tax advice as to the tax treatment and suitability of
such an investment.
D. CORPORATE PENSION AND PROFIT-SHARING PLANS
Sections 401(a) and 401(k) of the Code permit corporate employers to
establish various types of retirement plans for employees. These retirement
plans may permit the purchase of the Contracts to provide benefits under the
Plan. Contributions to the Plan for the benefit of employees will not be
includible in the gross income of the employees until distributed from the
Plan. The tax consequences to participants may vary depending upon the
particular plan design. However, the Code places limitations and restrictions
on all plans including on such items as: amount of allowable contributions;
form, manner and timing of distributions; transferability of benefits; vesting
and nonforfeitability of interests; nondiscrimination in eligibility and
participation; and the tax treatment of distributions, withdrawals and
surrenders. (See "Tax Treatment of Withdrawals -- Qualified Contracts"
below.) Purchasers of Contracts for use with Corporate Pension or
Profit-Sharing Plans should obtain competent tax advice as to the tax
treatment and suitability of such an investment.
TAX TREATMENT OF WITHDRAWALS -- QUALIFIED CONTRACTS
In the case of a withdrawal under a Qualified Contract, a ratable portion of
the amount received is taxable, generally based on the ratio of the
individual's cost basis to the individual's total accrued benefit under the
retirement plan. Special tax rules may be available for certain distributions
from a Qualified Contract. Section 72(t) of the Code imposes a 10% penalty tax
on the taxable portion of any distribution from qualified retirement plans,
including Contracts issued and qualified under Code Sections 401 (H.R. 10 and
Corporate Pension and Profit-Sharing Plans), 403(b) (Tax-Sheltered Annuities)
and 408(b) (Individual Retirement Annuities). To the extent amounts are not
includible in gross income because they have been rolled over to an IRA or to
another eligible qualified plan, no tax penalty will be imposed. The tax
penalty will not apply to the following distributions: (a) if distribution is
made on or after the date on which the Owner or Annuitant (as applicable)
reaches age 59 1/2; (b) distributions following the death or disability of the
Owner or Annuitant (as applicable) (for this purpose disability is as defined
in Section 72(m)(7) of the Code); (c) after separation from service,
distributions that are part of substantially equal periodic payments made not
less frequently than annually for the life (or life expectancy) of the Owner
or Annuitant (as applicable) or the joint lives (or joint life expectancies)
of such Owner or Annuitant (as applicable) and his or her designated
Beneficiary; (d) distributions to an Owner or Annuitant (as applicable) who
has separated from service after he has attained age 55; (e) distributions
made to the Owner or Annuitant (as applicable) to the extent such
distributions do not exceed the amount allowable as a deduction under Code
Section 213 to the Owner or Annuitant (as applicable) for amounts paid during
the taxable year for medical care; and (f) distributions made to an alternate
payee pursuant to a qualified domestic relations order. The exceptions stated
in (d), (e) and (f) above do not apply in the case of an Individual Retirement
Annuity. The exception stated in (c) above applies to an Individual
Retirement Annuity without the requirement that there be a separation from
service.
Generally, distributions from a qualified plan must commence no later than
April 1 of the calendar year, following the year in which the employee attains
age 70 1/2. Required distributions must be over a period not exceeding the
life expectancy of the individual or the joint lives or life expectancies of
the individual and his or her designated beneficiary. If the required minimum
distributions are not made, a 50% penalty tax is imposed as to the amount not
distributed. In addition, distributions in excess of $150,000 per year may be
subject to an additional 15% excise tax unless an exemption applies.
TAX-SHELTERED ANNUITIES -- WITHDRAWAL LIMITATIONS
The Code limits the withdrawal of amounts attributable to contributions made
pursuant to a salary reduction agreement (as defined in Section 403(b)(11) of
the Code) to circumstances only when the Owner: (1) attains age 59 1/2; (2)
separates from service; (3) dies; (4) becomes disabled (within the meaning of
Section 72(m)(7) of the Code); or (5) in the case of hardship. However,
withdrawals for hardship are restricted to the portion of the Owner's Contract
Value which represents contributions made by the Owner and does not include
any investment results. The limitations on withdrawals became effective on
January 1, 1989 and apply only to salary reduction contributions made after
December 31, 1988, to income attributable to such contributions and to income
attributable to amounts held as of December 31, 1988. The limitations on
withdrawals do not affect rollovers or transfers between certain Qualified
Plans. Owners should consult their own tax counsel or other tax adviser
regarding any distributions.
FINANCIAL STATEMENTS
Financial statements of the Company and the Separate Account have been
included in the Statement of Additional Information.
LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Separate
Account, the Distributor or the Company is a party.
In the ordinary course of business, the Company and its subsidiaries are also
engaged in certain other litigation none of which management believes is
material.
TABLE OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
ITEM PAGE
Company.................................................................. 3
Experts.................................................................. 3
Legal Opinions........................................................... 3
Distributor.............................................................. 3
Yield Calculation for Money Market Subaccounts........................... 3
Performance Information.................................................. 4
Annuity Provisions....................................................... 5
Financial Statements..................................................... 5
<TABLE>
<CAPTION>
<S> <C>
________________________________________________________________________
__________________ _______
__________________ STAMP
__________________ _______
FRONT
- -----
Equitable Life Insurance Company of Iowa
Attention: Variable Products
P.O. BOX 9271
Des Moines, Iowa 50306-9271
________________________________________________________________________
________________________________________________________________________
Please send me, at no charge, the Statement of Additional Information
dated April 1, 1996 for the Individual Flexible Purchase Payment
Deferred Variable and Fixed Annuity Contracts issued by Equitable Life
Insurance Company of Iowa Separate Account A and Equitable Life Insurance
Company of Iowa.
(Please print or type and fill in all information)
BACK ________________________________________________________________________
- -----
Name
________________________________________________________________________
Address
________________________________________________________________________
City State Zip Code
Form #5344-A
________________________________________________________________________
</TABLE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
INDIVIDUAL FLEXIBLE PURCHASE PAYMENT DEFERRED
VARIABLE AND FIXED ANNUITY CONTRACTS
issued by
EQUITABLE LIFE INSURANCE COMPANY OF IOWA SEPARATE ACCOUNT A
AND
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS DATED April 1, 1996, FOR THE
INDIVIDUAL FLEXIBLE PURCHASE PAYMENT DEFERRED VARIABLE AND FIXED ANNUITY
CONTRACTS WHICH ARE REFERRED TO HEREIN.
THE PROSPECTUS CONCISELY SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR
OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS CALL OR WRITE
THE COMPANY AT: P.O. BOX 9271, DES MOINES, IOWA 50306-9271, (800) 344-6864.
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED April 1 , 1996.
TABLE OF CONTENTS
PAGE
Company.................................................................. 3
Experts.................................................................. 3
Legal Opinions........................................................... 3
Distributor.............................................................. 3
Yield Calculation For Money Market Subaccounts........................... 3
Performance Information.................................................. 4
Annuity Provisions....................................................... 5
Financial Statements..................................................... 5
COMPANY
Information regarding Equitable Life Insurance Company of Iowa (the "Company")
and its ownership is contained in the Prospectus.
EXPERTS
The consolidated financial statements and schedules of the Company as of
December 31, 1995 and 1994 and for each of the three years in the period
ended December 31, 1995, and the financial statements of each account
within the Separate Account as of December 31, 1995 for the period
from October 7, 1994 or commencement of operations to December 31,
1995, included herein have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports appearing elsewhere herein, and
are included in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.
LEGAL OPINIONS
Legal matters in connection with the Contracts described herein are being
passed upon by the law firm of Blazzard, Grodd & Hasenauer, P.C., Westport,
Connecticut.
DISTRIBUTOR
Equitable of Iowa Securities Network, Inc. ("Securities Network") acts as the
distributor. Securities Network is an affiliate of the Company and is
registered as a broker-dealer. The offering is on a continuous basis.
YIELD CALCULATION FOR MONEY MARKET SUBACCOUNTS
The Money Market Subaccounts of the Separate Account will calculate their
current yield based upon the seven days ended on the date of calculation. For
the seven calendar days ended December 31, 1995, the annualized yield for the
Money Market Subaccount was 3.81%. For the seven calendar days ended December
31, 1995, the annualized yield for the Smith Barney Money Market Subaccount
was 3.86%.
The current yields of the Money Market Subaccounts are computed by determining
the net change (exclusive of capital changes) in the value of a hypothetical
pre-existing Owner account having a balance of one Accumulation Unit of the
Subaccount at the beginning of the period, subtracting the Mortality and
Expense Risk Charge, the Administrative Charge and the Annual Contract
Maintenance Charge, dividing the difference by the value of the account at the
beginning of the same period to obtain the base period return and multiplying
the result by (365/7).
The Money Market Subaccounts compute their effective compound yield according
to the method prescribed by the Securities and Exchange Commission. The
effective yield reflects the reinvestment of net income earned daily on Money
Market Subaccounts assets.
Net investment income for yield quotation purposes will not include either
realized capital gains and losses or unrealized appreciation and depreciation,
whether reinvested or not.
The yields quoted should not be considered a representation of the yield of
the Money Market Subaccounts in the future since the yield is not fixed.
Actual yields will depend not only on the type, quality and maturities of the
investments held by the Money Market Subaccounts and changes in the interest
rates on such investments, but also on changes in the Money Market
Subaccounts' expenses during the period.
Yield information may be useful in reviewing the performance of the Money
Market Subaccounts and for providing a basis for comparison with other
investment alternatives. However, the Money Market Subaccounts' yield
luctuates, unlike bank deposits or other investments which typically pay a
fixed yield for a stated period of time. The yield information does not
reflect the deduction of any applicable Withdrawal Charge at the time
of the surrender. (See "Charges and Deductions - Deduction for Withdrawal
Charge (Sales Load)" in the Prospectus.)
PERFORMANCE INFORMATION
From time to time, the Company may advertise performance data as described in
the Prospectus. Any such advertisement will include total return figures for
the time periods indicated in the advertisement. Such total return figures
will reflect the deduction of a 1.25% Mortality and Expense Risk Charge, a
.15% Administrative Charge, the investment advisory fee for the underlying
Portfolio being advertised and any applicable Annual Contract Maintenance
Charge and Withdrawal Charges.
The hypothetical value of a Contract purchased for the time periods described
in the advertisement will be determined by using the actual Accumulation Unit
values for an initial $1,000 purchase payment, and deducting any applicable
Annual Contract Maintenance Charge and any applicable Withdrawal Charge to
arrive at the ending hypothetical value. The average annual total return is
then determined by computing the fixed interest rate that a $1,000 purchase
payment would have to earn annually, compounded annually, to grow to the
hypothetical value at the end of the time periods described. The formula used
in these calculations is:
n
P ( 1 + T ) = ERV
<TABLE>
<CAPTION>
<S> <C> <C>
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the time periods used
(or fractional portion thereof) of a hypothetical $1,000
payment made at the beginning of the time periods used.
</TABLE>
In addition to total return data, the Company may include yield information in
its advertisements. For each Subaccount (other than the Money Market
Subaccounts) for which the Company will advertise yield, it will show a yield
quotation based on a 30 day (or one month) period ended on the date of the
most recent balance sheet of the Separate Account included in the registration
statement, computed by dividing the net investment income per Accumulation
Unit earned during the period by the maximum offering price per Unit on the
last day of the period, according to the following formula:
Yield = a-b 6
[2(_____) + 1 - 1
cd
Where:
<TABLE>
<CAPTION>
<S> <C>
a = Net investment income earned during the period by the Trust
attributable to shares owned by the Subaccount.
b = Expenses accrued for the period (net of reimbursements).
c = The average daily number of Accumulation Units outstanding
during the period.
d = The maximum offering price per Accumulation Unit on the last
day of the period.
</TABLE>
The Company may also advertise performance data which will be calculated in
the same manner as described above but which will not reflect the deduction of
any Withdrawal Charge.
Owners should note that the investment results of each Subaccount will
fluctuate over time, and any presentation of the Subaccount's total return or
yield for any period should not be considered as a representation of what an
investment may earn or what an Owner's total return or yield may be in any
future period.
ANNUITY PROVISIONS
Currently, the Company makes available payment plans on a fixed basis only.
(See the Prospectus - "Contract Proceeds - Fixed Payment Plans" for a
description of the Payment Plans.)
FINANCIAL STATEMENTS
The consolidated financial statements of the Company included herein should be
considered only as bearing upon the ability of the Company to meet its
obligations under the Contracts.
Financial Statements
Equitable Life Insurance Company of Iowa
Years ended December 31, 1995, 1994 and 1993
with Report of Independent Auditors
Equitable Life Insurance Company of Iowa
Financial Statements
Years ended December 31, 1995, 1994 and 1993
Contents
Report of Independent Auditors
Audited Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Changes in Stockholder's Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Auditors
The Board of Directors and Stockholder
Equitable Life Insurance Company of Iowa
We have audited the accompanying consolidated balance sheets of Equitable
Life Insurance Company of Iowa (wholly owned by Equitable of Iowa
Companies) as of December 31, 1995 and 1994, and the related consolidated
statements of income, changes in stockholder's equity, and cash flows for
each of the three years in the period ended December 31, 1995. Our audits
also include the financial statement schedules listed in the Index at Item
24. These financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Equitable Life Insurance Company of Iowa at December 31, 1995
and 1994, and the consolidated results of their operations and their cash
flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly
in all material respects the information set forth therein.
As discussed in Note 3 to the consolidated financial statements, in 1994
the Company changed its method of accounting for certain investments in
debt securities.
/s/ Ernst & Young LLP
Des Moines, Iowa
February 7, 1996
Equitable Life Insurance Company of Iowa
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
December 31
1995 1994
_________________________
<S> <C> <C>
Assets
Investments
Fixed maturities:
Available for sale, at market (cost:
1995-$6,884,837; 1994-$819,083) $7,352,211 $778,486
Held for investment, at amortized cost
(market: 1994-$5,059,090) -- 5,393,798
Equity securities of unaffiliated companies, at
market (cost: 1995 - $49,789; 1994 - $23,351) 50,595 22,978
Equity security of affiliated company, at market
(cost: 1995 and 1994 - $618) 3,599 3,164
Mortgage loans on real estate 1,169,456 610,185
Real estate, less allowance for depreciation
of $4,804 in 1995 and $4,659 in 1994 13,960 15,668
Policy loans 182,423 176,448
Short-term investments 35,282 45,796
___________ ___________
Total investments 8,807,526 7,046,523
Cash and cash equivalents 10,390 11,830
Securities and indebtedness of related parties 13,755 11,034
Accrued investment income 122,834 105,959
Notes and other receivables 32,395 23,173
Deferred policy acquisition costs 554,179 607,626
Property and equipment, less allowance for
depreciation of $9,628 in 1995 and $6,685 in 1994 8,026 7,806
Deferred income tax benefit -- 1,634
Intangible assets, less accumulated amortization
of $558 in 1995 and $483 in 1994 2,417 2,492
Other assets 47,991 43,784
Due from affiliates 1,995 13,598
Separate account assets 171,881 84,963
___________ ___________
Total assets $9,773,389 $7,960,422
=========== ===========
</TABLE>
See accompanying notes.
Equitable Life Insurance Company of Iowa
Consolidated Balance Sheets (continued)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
December 31
1995 1994
_________________________
<S> <C> <C>
Liabilities and stockholder's equity
Policy liabilities and accruals:
Future policy benefits:
Annuity and universal life products $7,428,134 $6,237,107
Traditional life insurance products 778,857 777,100
Unearned revenue reserve 14,326 14,317
Other policy claims and benefits 8,980 7,785
___________ ___________
8,230,297 7,036,309
Other policyholders' funds:
Supplementary contracts without life contingencies 11,613 12,224
Advance premiums and other deposits 691 790
Accrued dividends 12,715 12,761
___________ ___________
25,019 25,775
Deferred income taxes 113,171 --
Due to affiliates 5,175 4,122
Other liabilities 180,452 136,408
Separate account liabilities 171,881 84,963
___________ ___________
Total liabilities 8,725,995 7,287,577
Commitments and contingencies
Stockholder's equity:
Common stock, par value $1.00 per share -
authorized 7,500,000 shares, issued and
outstanding 5,000,300 shares 5,000 5,000
Additional paid-in capital 274,009 224,009
Unrealized appreciation (depreciation) of fixed
maturities 208,932 (26,493)
Unrealized appreciation of equity securities 3,787 2,173
Retained earnings 555,666 468,156
___________ ___________
Total stockholder's equity 1,047,394 672,845
___________ ___________
Total liabilities and stockholder's equity $9,773,389 $7,960,422
=========== ===========
</TABLE>
See accompanying notes.
Equitable Life Insurance Company of Iowa
Consolidated Statements of Income
(Dollars in thousands)
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
_______________________________________
<S> <C> <C> <C>
Revenues:
Annuity and universal life
product charges $51,466 $43,767 $34,281
Traditional life insurance premiums 43,425 46,265 46,870
Net investment income 638,056 521,646 432,044
Realized gains on investments 9,524 19,697 44,996
Other income 8,883 8,297 6,663
___________ ___________ ___________
751,354 639,672 564,854
Benefits and expenses:
Annuity and universal life benefits:
Interest credited to account balances 390,039 320,312 268,992
Benefit claims incurred in excess of
account balances 10,396 8,877 5,618
Traditional life insurance benefits 68,338 56,923 54,262
Increase (decrease) in future
traditional policy benefits (6,867) 3,350 3,439
Distributions to participating
policyholders 25,125 24,988 25,861
Underwriting, acquisition and
insurance expenses:
Commissions 146,224 157,028 113,450
General expenses 40,941 43,402 37,553
Insurance taxes 45,472 9,961 6,335
Policy acquisition costs deferred (178,133) (193,263) (137,153)
Amortization of deferred policy
acquisition costs 72,537 50,921 42,078
___________ ___________ ___________
614,072 482,499 420,435
Interest expense 2,565 2,069 457
Other expenses (9) 1,880 322
___________ ___________ ___________
616,628 486,448 421,214
___________ ___________ ___________
134,726 153,224 143,640
Income taxes 47,233 53,262 50,469
___________ ___________ ___________
87,493 99,962 93,171
Equity income (loss), net of related
income taxes 17 (39) 126
___________ ___________ ___________
Net income $87,510 $99,923 $93,297
=========== =========== ===========
</TABLE>
See accompanying notes.
Equitable Life Insurance Company of Iowa
Consolidated Statements of Changes in Stockholder's Equity
(Dollars in thousands)
<TABLE>
<CAPTION>
Unreal- Unreal-
ized ized
Appre- Appre-
ciation ciation
(Depre- (Depre-
ciation) ciation)
Addi- of of Total
tional Fixed Equity Stock-
Common Paid-In Matur- Secur- Retained holder's
Stock Capital ities ities Earnings Equity
________ _________ _________ _______ _________ ___________
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1993 $5,000 $134,009 -- $1,767 $274,936 $415,712
Net income for 1993 -- -- -- -- 93,297 93,297
Unrealized appre-
ciation of equity
securities -- -- -- 1,242 -- 1,242
Contributions from
parent -- 90,000 -- -- -- 90,000
________ _________ _________ _______ _________ ___________
Balance at December
31, 1993 5,000 224,009 3,009 368,233 600,251
Cumulative effect of
change in accounting
principle regarding
fixed maturity
securities -- -- $22,516 -- -- 22,516
Net income for 1994 -- -- -- -- 99,923 99,923
Unrealized depre-
ciation of fixed
maturity securities -- -- (49,009) -- -- (49,009)
Unrealized depre-
ciation of equity
securities -- -- -- (836) -- (836)
________ _________ _________ _______ _________ ___________
Balance at December
31, 1994 5,000 224,009 (26,493) 2,173 468,156 672,845
Net income for 1995 -- -- -- -- 87,510 87,510
Unrealized appre-
ciation of fixed
maturity securities -- -- 235,425 -- -- 235,425
Unrealized appre-
ciation of equity
securities -- -- -- 1,614 -- 1,614
Contributions from
parent -- 50,000 -- -- -- 50,000
________ _________ _________ _______ _________ ___________
Balance at December
31, 1995 $5,000 $274,009 $208,932 $3,787 $555,666 $1,047,394
======== ========= ========= ======= ========= ===========
</TABLE>
See accompanying notes.
Equitable Life Insurance Company of Iowa
Consolidated Statements of Cash Flows
(Dollars in thousands)
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
_______________________________________
<S> <C> <C> <C>
Operating activities
Net income $87,510 $99,923 $93,297
Adjustments to reconcile net income to
net cash provided by operations:
Adjustments related to annuity and
universal life products:
Interest credited to account balances 390,039 320,312 268,992
Charges for mortality and administration (54,308) (46,280) (31,151)
Change in unearned revenues (293) (449) (840)
Increase in traditional life
policy liabilities and accruals 2,758 3,750 5,987
Decrease in other policyholders' funds (756) (130) (194)
Increase in accrued investment income (16,875) (13,486) (14,376)
Policy acquisition costs deferred (178,133) (193,263) (137,153)
Amortization of deferred policy
acquisition costs 72,537 50,921 42,078
Change in other assets, other
liabilities, and accrued income taxes 42,496 27,372 26,515
Provision for depreciation and
amortization (8,449) (1,089) (426)
Provision for deferred income taxes 1,117 9,958 (3,138)
Share of losses (equity in earnings)
of related parties (27) 51 (194)
Realized gains on investments (9,524) (19,697) (44,996)
___________ ___________ ___________
Net cash provided by operating
activities 328,092 237,893 204,401
Investing activities
Sale, maturity, or repayment of investments:
Fixed maturities-available for sale 145,173 204,847 --
Fixed maturities-held for investment 203,395 286,844 1,056,544
Equity securities 6,572 -- --
Mortgage loans on real estate 53,544 47,886 49,008
Real estate 2,030 5,662 289
Policy loans 28,436 30,397 25,963
Short-term investments - net 10,514 12,294 --
___________ ___________ ___________
449,664 587,930 1,131,804
Acquisition of investments:
Fixed maturities-available for sale (943,285) (181,303) --
Fixed maturities-held for investment (59,759) (1,422,409) (2,121,604)
Equity securities (32,097) (23,101) --
Mortgage loans on real estate (612,449) (314,255) (152,274)
Real estate (1,018) (876) (346)
Policy loans (34,411) (29,996) (26,083)
Short-term investments - net -- -- (48,395)
___________ ___________ ___________
(1,683,019) (1,971,940) (2,348,702)
</TABLE>
See accompanying notes.
Equitable Life Insurance Company of Iowa
Consolidated Statements of Cash Flows (continued)
(Dollars in thousands)
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
_______________________________________
<S> <C> <C> <C>
Investing activities (continued)
Disposal of investments accounted for
by the equity method $498 $489 $939
Additions to investments accounted for
by the equity method -- (1,376) (467)
Repayments of notes receivable 1,317 221 --
Issuance of notes receivable -- (2,438) --
Sales of property and equipment 109 281 107
Purchases of property and equipment (3,397) (3,052) (4,300)
___________ ___________ ___________
Net cash used in investing activities (1,234,828) (1,389,885) (1,220,619)
Financing activities
Proceeds from line of credit borrowing 754,104 1,053,746 594,494
Repayment of line of credit borrowing (754,104) (1,053,746) (594,494)
___________ ___________ ___________
-- -- --
Receipts from annuity and universal
life policies credited to
policyholder account balances 1,691,189 1,746,108 1,190,024
Return of policyholder account balances
on annuity policies and universal life
policies (835,893) (586,762) (264,364)
Contributions from parent 50,000 -- 90,000
___________ ___________ ___________
Net cash provided by financing
activities 905,296 1,159,346 1,015,660
Increase (decrease) in cash and cash
equivalents (1,440) 7,354 (558)
Cash and cash equivalents at beginning
of year 11,830 4,476 5,034
___________ ___________ ___________
Cash and cash equivalents at end of year $10,390 $11,830 $4,476
=========== =========== ===========
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest $2,567 $2,070 $457
Income taxes 33,490 60,610 43,552
Noncash investing and financing activities:
Foreclosure of mortgage loans, including
taxes and costs capitalized ($106) and
operating funds retained ($283) in 1993 -- 250 6,577
</TABLE>
See accompanying notes.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements
December 31, 1995
1. Significant Accounting Policies
Organization
Equitable Life Insurance Company of Iowa ("the Company") is a wholly-owned
subsidiary of Equitable of Iowa Companies ("parent"). The Company and USG
Annuity & Life Company ("USG") offer various insurance products including
deferred fixed annuities, universal and term life insurance and variable
annuities. These products are marketed by the Company's career agency
force, brokers and through financial institutions. The Company's primary
customers are middle-income individuals and small businesses.
Consolidation
The consolidated financial statements include the Company and its
subsidiaries. The Company's principal subsidiaries are USG, Equitable
American Insurance Company ("EAIC") and Equitable Companies. At
December 31, 1995 and 1994, all subsidiaries are wholly owned. All
significant intercompany accounts and transactions have been eliminated.
Investments
Effective January 1, 1994, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 115, Accounting for Certain Investments
in Debt and Equity Securities. Pursuant to SFAS No. 115, fixed maturity
securities are designated as either "available for sale", "held for investment"
or "trading". Sales of fixed maturities designated as "available for sale"
are not restricted by SFAS No. 115. Available for sale securities are
reported at market value and unrealized gains and losses on these securities
are included directly in stockholder's equity, after adjustment for related
changes in deferred policy acquisition costs, policy reserves and deferred
income taxes. At December 31, 1995, all of the Company's fixed maturity
securities are designated as available for sale although the Company is not
precluded from designating fixed maturity securities as held for investment
or trading at some future date. Securities that the Company has the positive
intent and ability to hold to maturity are designated as "held for investment".
Held for investment securities are reported at cost adjusted for amortization
of premiums and discounts. Changes in the market value of these securities,
except for declines that are other than temporary, are not reflected in the
Company's financial statements. Sales of securities designated as held for
investment are severely restricted by SFAS No. 115. Securities that are
bought and held principally for the purpose of selling them in the near term
are designated as trading securities. Unrealized gains and losses on trading
securities are included in current earnings. Transfers of securities
between categories are restricted and are recorded at fair value at the time
of the transfer. Securities that are determined to have a decline in value
that is other than temporary are written down to estimated fair value which
becomes the security's new cost basis by a charge to realized losses in the
Company's Statement of Income. Premiums and discounts are amortized/accrued
utilizing the scientific interest method which results in a constant yield
over the securities' expected life.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
1. Significant Accounting Policies (continued)
Amortization/accrual of premiums and discounts on mortgage-backed securities
incorporates a prepayment assumption to estimate the securities' expected
life.
Prior to the adoption of SFAS No. 115, all of the Company's fixed maturity
securities were classified as "held to maturity". Fixed maturity
securities were written down to net realizable value (the sum of the
estimated nondiscounted cash flows from the securities) if the securities
were determined to have declines in value that were "other than temporary".
Future investment income was recognized at the rate implicit in this
calculation of net realizable value.
Equity securities (common and non-redeemable preferred stocks) are reported
at market if readily marketable, or at cost if not readily marketable. The
change in unrealized appreciation and depreciation of marketable equity
securities (net of related deferred income taxes, if any) is included
directly in stockholder's equity. Equity securities that are determined to
have a decline in value that is other than temporary are written down to
estimated fair value which becomes the security's new cost basis by a
charge to realized losses in the Company's Statement of Income.
Mortgage loans on real estate are reported at cost adjusted for
amortization of premiums and accrual of discounts. If the value of any
mortgage loan is determined to be impaired (i.e., when it is probable that
the Company will be unable to collect all amounts due according to the
contractual terms of the loan agreement), the carrying value of the
mortgage loan is reduced to the present value of expected future cash flows
from the loan, discounted at the loan's effective interest rate, or to the
loan's observable market price, or the fair value of the underlying
collateral. The carrying value of impaired loans is reduced by the
establishment of a valuation allowance which is adjusted at each reporting
date for significant changes in the calculated value of the loan. Changes
in this valuation allowance are charged or credited to income.
Real estate, which includes real estate acquired through foreclosure, is
reported at cost less allowances for depreciation. Real estate acquired
through foreclosure, or in-substance foreclosure, is recorded at the lower
of cost (which includes the balance of the mortgage loan, any accrued
interest and any costs incurred to obtain title to the property) or fair
value as determined at or before the foreclosure date. The carrying value
of these assets is subject to regular review. If the fair value, less
estimated sale cost, of real estate owned decreases to an amount lower than
its carrying value, a valuation allowance is established for the
difference. This valuation allowance can be restored should the fair value
of the property increase. Changes in this valuation allowance are charged
or credited to income.
Policy loans are reported at unpaid principal. Short-term investments are
reported at cost adjusted for amortization of premiums and accrual of
discounts. Investments accounted for by the equity method include investments
in, and advances to, various joint ventures and partnerships.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
1. Significant Accounting Policies (continued)
Market values, as reported herein, of publicly-traded fixed maturity
securities are as reported by an independent pricing service. Market
values of conventional mortgage-backed securities not actively traded in a
liquid market are estimated using a third-party pricing system, which uses
a matrix calculation assuming a spread over U.S. Treasury bonds based upon
the expected average lives of the securities. Market values of private
placement bonds are estimated using a matrix that assumes a spread (based
on interest rates and a risk assessment of the bonds) over U.S. Treasury
bonds. Market values of redeemable preferred stocks are as reported by the
National Association of Insurance Commissioners ("NAIC"). Market values of
equity securities are based on the latest quoted market prices, or where not
readily marketable, at values which are representative of the market values
of issues of comparable yield and quality. Realized gains and losses are
determined on the basis of specific identification and average cost methods
for manager initiated and issuer initiated disposals, respectively.
Cash and Cash Equivalents
For purposes of the consolidated statement of cash flows, the Company
considers all demand deposits and interest-bearing accounts not related to
the investment function to be cash equivalents. All interest-bearing
accounts classified as cash equivalents have original maturities of three
months or less.
Deferred Policy Acquisition Costs
Certain costs of acquiring new insurance business, principally commissions
and other expenses related to the production of new business, have been
deferred. For annuity and universal life products, such costs are being
amortized generally in proportion to the present value (using the assumed
crediting rate) of expected gross profits. This amortization is adjusted
retrospectively, or "unlocked", when the Company revises its estimate of
current or future gross profits to be realized from a group of products.
For traditional life insurance products, such costs are being amortized
over the premium-paying period of the related policies in proportion to
premium revenues recognized, using principally the same assumptions for
interest, mortality and withdrawals that are used for computing liabilities
for future policy benefits subject to traditional "lock-in" concepts.
Deferred policy acquisition costs are adjusted to reflect the pro-forma
impact of unrealized gains and losses on fixed maturity securities the
Company has designated as "available for sale" under SFAS No. 115.
Property and Equipment
Property and equipment primarily represent leasehold improvements at the
Company's headquarters and at various agency offices and office furniture
and equipment and are not considered to be significant to the Company's
overall operations. Property and equipment are reported at cost less
allowances for depreciation. Depreciation expense is computed primarily on
the basis of the straight-line method over the estimated useful lives of the
assets.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
1. Significant Accounting Policies (continued)
Intangible Assets
Intangible assets include the value of various licenses acquired in
conjunction with the purchase of USG which are being amortized over forty
years using the straight-line method.
Future Policy Benefits
The liability for future policy benefits for traditional life insurance
products has been calculated on a net-level premium basis. Interest
assumptions range from 2.75% for 1956 and prior issues to a 9.00% level,
graded to 6.00% after twenty years for current issues. Mortality,
morbidity and withdrawal assumptions generally are based on actual
experience. These assumptions have been modified to provide for possible
unfavorable deviation from the assumptions. Future dividends for
participating business (which accounted for 1.8% of premiums and 9.4% of
inforce in 1995) are provided for in the liability for future policy
benefits.
With respect to annuity and universal life products, the Company utilizes
the retrospective deposit accounting method. Policy reserves represent the
premiums received plus accumulated interest, less mortality and
administration charges. Interest credited to these policies ranged from
3.35% to 11.35% during 1995, 3.50% to 11.35% during 1994, and 4.50% to
10.00% during 1993.
The unearned revenue reserve reflects the unamortized balance of the excess
of first year administration charges over renewal period administration
charges (policy initiation fees) on annuity and universal life products.
These excess charges have been deferred and are being recognized in income
over the period benefited using the same assumptions and factors used to
amortize deferred policy acquisition costs.
Recognition of Premium Revenues and Costs
Traditional life insurance premiums are recognized as revenues over the
premium-paying period. Future policy benefits and policy acquisition costs
are associated with the premiums as earned by means of the provision for
future policy benefits and amortization of deferred policy acquisition
costs.
Revenues for annuity and universal life products consist of policy charges
for the cost of insurance, policy administration charges, amortization of
policy initiation fees and surrender charges assessed against policyholder
account balances during the period. Expenses related to these products
include interest credited to policyholder account balances and benefit
claims incurred in excess of policyholder account balances.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
1. Significant Accounting Policies (continued)
Deferred Income Taxes
Deferred tax assets or liabilities are computed based on the difference
between the financial statement and income tax bases of assets and
liabilities using the enacted marginal tax rate. Deferred tax assets or
liabilities are adjusted to reflect the pro-forma impact of unrealized
gains and losses on fixed maturity securities the Company has designated as
available for sale under SFAS No. 115. Changes in deferred tax assets or
liabilities resulting from this SFAS No. 115 adjustment are charged or
credited directly to stockholder's equity. Deferred income tax expenses or
credits reflected in the Company's Statement of Income are based on the
changes in the deferred tax asset or liability from period to period
(excluding the SFAS No. 115 adjustment).
Separate Accounts
The transactions in the separate accounts (which are charged or credited
directly to the accounts) are excluded from the consolidated statements of
income.
Dividend Restrictions
The Company's ability to pay dividends to its parent company is restricted
because prior approval of insurance regulatory authorities is required for
payment of dividends to the stockholder which exceed an annual limitation.
During 1996, the Company could pay dividends to the parent company of
approximately $85,758,000 without prior approval of statutory authorities.
Also, the amount ($514,576,000 at December 31, 1995) by which the
stockholder's equity stated in conformity with generally accepted
accounting principles exceeds statutory capital and surplus as reported is
restricted and cannot be distributed.
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 assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
preparation period. Actual results could differ from those estimates.
Significant estimates and assumptions are utilized in the calculation of
deferred policy acquisition costs, policyholder liabilities and accruals,
postretirement benefits, guaranty fund assessment accruals and valuation
allowances on investments and deferred tax benefits. It is reasonably
possible that actual experience could differ from the estimates and
assumptions utilized which could have a material impact on the financial
statements.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
1. Significant Accounting Policies (continued)
Reclassification
Certain amounts in the 1994 and 1993 financial statements have been
reclassified to conform to the 1995 financial statement presentation.
2. Basis of Financial Reporting
The financial statements of the Company differ from related statutory
financial statements principally as follows: (1) acquisition costs of
acquiring new business are deferred and amortized over the life of the
policies rather than charged to operations as incurred; (2) future policy
benefit reserves on traditional life insurance products are based on
reasonable assumptions of expected mortality, interest, and withdrawals
which include a provision for possible unfavorable deviation from such
assumptions, which may differ from reserves based upon statutory mortality
rates and interest; (3) future policy benefit reserves for annuity and
universal life products are based on full account values, rather than the
greater of cash surrender value or amounts derived from discounting
methodologies utilizing statutory interest rates; (4) reserves are reported
before reduction for reserve credits related to reinsurance ceded and a
receivable is established, net of an allowance for uncollectible amounts,
for these credits rather than presented net of these credits; (5) fixed
maturity investments are designated as "available for sale" and valued at
fair value with unrealized appreciation/depreciation, net of adjustments to
deferred income taxes (if applicable) and deferred policy acquisition costs,
credited/charged directly to stockholder's equity rather than valued at
amortized cost; (6) the carrying value of fixed maturity securities is reduced
to fair value by a charge to realized losses in the statements of income when
declines in carrying value are judged to be other than temporary, rather than
through the establishment of a formula-determined statutory investment
reserve (carried as a liability), changes in which are charged directly to
surplus; (7) deferred income taxes are provided for the difference between
the financial statement and income tax bases of assets and liabilities; (8)
net realized gains or losses attributed to changes in the level of interest
rates in the market are recognized when the sale is completed rather than
deferred and amortized over the remaining life of the fixed maturity security
or mortgage loan; (9) gains arising from sale lease-back transactions are
deferred and amortized over the life of the lease rather than recognized in
the period of sale; (10) a liability is established for anticipated guaranty
fund assessments, net of related anticipated premium tax credits, rather than
capitalized when assessed and amortized in accordance with procedures
permitted by insurance regulatory authorities; (11) a prepaid pension cost
asset established in accordance with SFAS No. 87, Employers' Accounting for
Pensions, agents' balances and certain other assets designated as
"non-admitted assets" for statutory purposes are reported as assets rather
than being charged to surplus; (12) revenues for annuity and universal life
products consist of policy charges for the cost of insurance, policy
administration charges, amortization of policy initiation fees and surrender
charges assessed rather than premiums received; (13) expenses for
postretirement benefits other than pensions are recognized for all qualified
employees rather than for only vested and fully-eligible employees, and the
accumulated postretirement benefit obligation for years prior to adoption of
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
2. Basis of Financial Reporting (continued)
SFAS No. 106, Employers' Accounting for Postretirement Benefits Other than
Pensions, was recognized as a cumulative effect of change in accounting
method rather than deferred and amortized over twenty years, and (14) assets
and liabilities are restated to fair values when a change in ownership occurs,
with provisions for goodwill and other intangible assets, rather than
continuing to be presented at historical cost.
Net income for the Company, USG and EAIC as determined in accordance with
statutory accounting practices was $87,179,000 in 1995, $61,421,000 in
1994, and $42,182,000 in 1993. Total statutory capital and surplus was
$532,817,000 at December 31, 1995 and $431,585,000 at December 31, 1994.
3. Investment Operations
Effective January 1, 1994, the Company adopted SFAS No. 115, Accounting
for Certain Investments in Debt and Equity Securities. SFAS No. 115
requires companies to classify their securities as "held to maturity",
"available for sale" or "trading".
On November 15, 1995, the Financial Accounting Standards Board issued a
special report A Guide to Implementation of Statement 115 on Accounting for
Certain Investments in Debt and Equity Securities. This report allowed
companies a one-time opportunity to reassess the classification of their
securities holdings pursuant to SFAS No. 115. SFAS No. 115 significantly
restricts a company's ability to sell securities in the held to maturity
category without raising questions about the appropriateness of its
accounting policy for such securities. Classification of securities as
held to maturity therefore limits a company's ability to manage its
investment portfolio in many circumstances. For example, a company would
be prohibited from accepting a tender offer or responding to an anticipated
decline in the credit quality of assets in a particular industry when the
security is categorized as held to maturity. Additionally, a company is
unable to adjust its portfolio to take advantage of tax planning
opportunities or economic changes that would assist in providing the most
appropriate asset liability management. Thus a company's ability to maintain
the appropriate flexibility to make optimal investment decisions is
significantly restricted if it classifies securities as held to maturity.
In response to this opportunity, the Company reclassified 100% of the
securities in its "held to maturity" category to "available for sale" on
December 1, 1995 to maximize investment flexibility. As a result of this
reclassification, securities with combined cost totaling $5,250,921,000 and
estimated fair value of $5,560,519,000 were transferred from the Company's
held for investment portfolio to its available for sale portfolio. This
transfer caused the net unrealized investment gain component of stockholder's
equity to increase by $138,795,000 (net of deferred income taxes of
$74,735,000 and an adjustment of $96,068,000 to deferred policy acquisition
costs). The Company is not, however, precluded from classifying securities as
held to maturity in the future. While it is not the Company's current
practice to engage in active management of the fixed maturity securities
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
3. Investment Operations (continued)
portfolio such that significant sales would occur, the inability to implement
prudent financial management decisions necessitated this change.
SFAS No. 115 requires the carrying value of fixed maturity securities
classified as available for sale to be adjusted for changes in market value,
primarily caused by interest rates. While other related accounts are adjusted
as discussed above, the insurance liabilities supported by these securities
are not adjusted under SFAS No. 115, thereby creating volatility in
stockholder's equity as interest rates change. As a result, the Company
expects that its stockholder's equity will be exposed to incremental
volatility due to changes in market interest rates and the accompanying
changes in the reported value of securities classified as available for sale,
with equity increasing as market interest rates decline and, conversely,
decreasing as market interest rates rise.
Due to this potential for distortion in stockholder's equity, fair value
disclosure is provided in Note 4. SFAS No. 107, Disclosures about Fair
Value of Financial Instruments requires disclosure of fair values for
selected financial instruments but does not require disclosure of fair
value of life insurance liabilities. Although the Company's life insurance
liabilities are specifically exempted from this disclosure requirement,
estimated fair value disclosure of these liabilities is provided in an
effort to more properly reflect changes in stockholder's equity from
fluctuations in interest rates.
The cumulative effect of the adoption of SFAS No. 115 was to increase
stockholder's equity by $22,516,000, at January 1, 1994. The change in
unrealized gain or loss included in stockholder's equity, net of
adjustments, totaled $235,425,000 of unrealized gains (including the
unrealized gain of $138,795,000 related to the December 1, 1995
reclassification of securities to available for sale) for the year ended
December 31, 1995 and $49,009,000 of unrealized losses for the year ended
December 31, 1994.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
3. Investment Operations (continued)
Realized gains (losses) and unrealized appreciation (depreciation) on
investments are summarized below:
<TABLE>
<CAPTION>
Realized*
_______________________________________
Year ended December 31
1995 1994 1993
_______________________________________
(Dollars in thousands)
<S> <C> <C> <C>
Fixed maturities:
Available for sale ($3,401) $7,417
Held for investment 9,330 11,364 $44,765
Equity securities 912 -- --
Mortgage loans on real estate -- (62) (363)
Real estate (161) 7 14
Equity investments 2,844 971 580
___________ ___________ ___________
Realized gains on investments $9,524 $19,697 $44,996
=========== =========== ===========
<FN>
*See Note 5 for the income tax effects attributable to realized gains and
losses on investments.
</TABLE>
<TABLE>
<CAPTION>
Unrealized
_______________________________________
Year ended December 31
1995 1994 1993
_______________________________________
(Dollars in thousands)
<S> <C> <C> <C>
Fixed maturities:
Available for sale $507,971 ($40,597)
Held for investment 334,708 (663,840) 144,409
Equity securities 1,614 (836) 1,242
___________ ___________ ___________
Unrealized appreciation (depre-
ciation) of investments $844,293 ($705,273) $145,651
=========== =========== ===========
</TABLE>
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
3. Investment Operations (continued)
Major categories of net investment income are summarized below:
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
_______________________________________
(Dollars in thousands)
<S> <C> <C> <C>
Fixed maturities $558,903 $478,436 $397,912
Equity securities 1,255 303 45
Mortgage loans on real estate 76,382 39,117 28,408
Real estate 2,747 3,696 2,696
Policy loans 10,049 9,788 9,838
Short-term investments 1,275 886 933
Other - net 996 801 425
___________ ___________ ___________
651,607 533,027 440,257
Less investment expenses (13,551) (11,381) (8,213)
___________ ___________ ___________
Net investment income $638,056 $521,646 $432,044
=========== =========== ===========
</TABLE>
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
3. Investment Operations (continued)
At December 31, 1995 and 1994, amortized cost, gross unrealized gains and
losses and estimated market value of the Company's fixed maturity securities
designated as available for sale are as follows:
<TABLE>
<CAPTION>
AVAILABLE FOR SALE
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
December 31, 1995
U.S. Government and
governmental agencies
and authorities:
Mortgage-backed
securities $289,422 $16,738 $306,160
Other 60,567 4,163 ($2) 64,728
States, municipalities
and political
subdivisions 15,485 1,639 -- 17,124
Foreign governments 10,573 3,426 -- 13,999
Public utilities 1,271,641 92,546 (2,077) 1,362,110
Investment grade
corporate 2,322,036 277,981 (1,303) 2,598,714
Below investment grade
corporate 574,284 19,428 (12,492) 581,220
Mortgage-backed
securities 2,340,194 75,704 (8,142) 2,407,756
Redeemable preferred
stocks 635 -- (235) 400
___________ ___________ ___________ ___________
Total available for sale $6,884,837 $491,625 ($24,251) $7,352,211
=========== =========== =========== ===========
December 31, 1994
U.S. Government and
governmental agencies
and authorities:
Mortgage-backed
securities $17,817 ($730) $17,087
Other 30,624 (1,178) 29,446
Public utilities 70,184 $704 (7,173) 63,715
Investment grade
corporate 365,162 9,288 (19,574) 354,876
Below investment grade
corporate 199,597 589 (23,417) 176,769
Mortgage-backed
securities 135,699 1,926 (1,032) 136,593
___________ ___________ ___________ ___________
Total available for sale $819,083 $12,507 ($53,104) $778,486
=========== =========== =========== ===========
</TABLE>
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
3. Investment Operations (continued)
At December 31, 1994, the amortized cost, gross unrealized gains and
losses, and estimated market value of the Company's fixed maturity
securities designated as held for investment are as follows:
<TABLE>
<CAPTION>
HELD FOR INVESTMENT
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
December 31, 1994
U.S. Government and
governmental agencies
and authorities:
Mortgage-backed
securities $288,914 $2,971 ($13,949) $277,936
Other 3,980 66 (104) 3,942
States, municipalities
and political
subdivisions 15,557 -- (1,128) 14,429
Foreign governments 10,573 719 -- 11,292
Public utilities 1,231,799 7,148 (99,517) 1,139,430
Investment grade
corporate 1,594,095 33,750 (80,108) 1,547,737
Below investment grade
corporate 223,908 477 (19,074) 205,311
Mortgage-backed
securities 2,024,281 4,389 (170,091) 1,858,579
Redeemable preferred
stocks 691 -- (257) 434
___________ ___________ ___________ ___________
Total held for investment $5,393,798 $49,520 ($384,228) $5,059,090
=========== =========== =========== ===========
</TABLE>
No fixed maturity securities were designated as held for investment at
December 31, 1995. Short-term investments, all with maturities of 30 days or
less, have been excluded from the above schedules. Amortized cost
approximates market value for these securities.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
3. Investment Operations (continued)
The amortized cost and estimated market value of fixed maturity securities,
by contractual maturity, at December 31, 1995, are shown below. Expected
maturities will differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or
prepayment penalties.
<TABLE>
<CAPTION>
AVAILABLE FOR SALE
Estimated
Amortized Market
Cost Value
_________________________
(Dollars in thousands)
<S> <C> <C>
December 31, 1995
Due after one year through five years $178,935 $183,442
Due after five years through ten years 1,343,419 1,450,436
Due after ten years 2,732,867 3,004,417
___________ ___________
4,255,221 4,638,295
Mortgage-backed securities 2,629,616 2,713,916
___________ ___________
Total available for sale $6,884,837 $7,352,211
=========== ===========
</TABLE>
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
3. Investment Operations (continued)
The amortized cost and market value of mortgage-backed securities, which
comprise 37% of the Company's investment in fixed maturity securities at
December 31, 1995, by type, are as follows:
<TABLE>
<CAPTION>
Estimated
Amortized Market
Cost Value
__________________________
(Dollars in thousands)
<S> <C> <C>
December 31, 1995
Mortgage-backed securities:
Government and agency guaranteed pools:
Very accurately defined maturities $17,199 $18,646
Planned amortization class 84,746 91,044
Targeted amortization class 29,290 30,216
Sequential pay 69,084 71,439
Pass through 89,103 94,815
Private Label CMOs and REMICs:
Very accurately defined maturities 30,555 32,026
Planned amortization class 25,448 27,357
Targeted amortization class 445,545 449,932
Sequential pay 1,767,444 1,823,761
Mezzanines 38,026 39,655
Private placements and subordinate issues 33,176 35,025
___________ ___________
Total mortgage-backed securities $2,629,616 $2,713,916
=========== ===========
</TABLE>
During periods of significant interest rate volatility, the mortgages
underlying mortgage-backed securities may prepay more quickly or more
slowly than anticipated. If the principal amount of such mortgages are
prepaid earlier than anticipated during periods of declining interest
rates, investment income may decline due to reinvestment of these funds at
lower current market rates. If principal repayments are slower than
anticipated during periods of rising interest rates, increases in
investment yield may lag behind increases in interest rates because funds
will remain invested at lower historical rates rather than reinvested at
higher current rates. To mitigate this prepayment volatility, the Company
invests primarily in intermediate tranche collateralized mortgage
obligations ("CMOs"). CMOs are pools of mortgages that are segregated into
sections, or tranches, which provide sequential retirement of bonds rather
than a pro-rata share of principal return in the pass-through structure.
The Company owns no "interest only" or "principal only" mortgage-backed
securities. Further, the Company has not purchased obligations at
significant premiums, thereby limiting exposure to loss during periods of
accelerated prepayments. At December 31, 1995, unamortized premiums on
mortgage-backed securities totaled $5,611,000 and unaccrued discounts on
mortgage-backed securities totaled $61,808,000.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
3. Investment Operations (continued)
An analysis of sales, maturities and principal repayments of the Company's
fixed maturities portfolio for the years ended December 31, 1995, 1994 and
1993 is as follows:
<TABLE>
<CAPTION>
Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
_________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Year ended December 31, 1995
Scheduled principal repayments
calls and tenders (available
for sale only):
Available for sale $59,935 $319 ($19) $60,235
Held for investment 172,082 5,279 (274) 177,087
Sales:
Available for sale 82,837 2,104 (3) 84,938
Held for investment 21,983 4,325 -- 26,308
___________ _________ _________ ___________
Total $336,837 $12,027 ($296) $348,568
=========== ========= ========= ===========
Year ended December 31, 1994
Scheduled principal repayments
calls and tenders (available
for sale only):
Available for sale $167,285 $4,877 ($11) $172,151
Held for investment 275,480 11,389 (25) 286,844
Sales:
Available for sale 29,526 3,184 (14) 32,696
___________ _________ _________ ___________
Total $472,291 $19,450 ($50) $491,691
=========== ========= ========= ===========
Year ended December 31, 1993
Scheduled principal
repayments, calls and
tenders $999,855 $50,924 $1,050,779
Sales 5,481 284 5,765
___________ _________ _________ ___________
Total $1,005,336 $51,208 $ -- $1,056,544
=========== ========= ========= ===========
</TABLE>
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
3. Investment Operations (continued)
During the second quarter of 1995, the Company sold one security with an
amortized cost of $21,983,000 from the held for investment portfolio
generating a realized gain of $4,325,000. This sale was due to a
significant deterioration of the issuer's creditworthiness resulting from
the announced reorganization of the issuer.
At December 31, 1995, unrealized appreciation of equity securities of
$3,787,000, is comprised of gross unrealized appreciation of $4,000,000 on
the Company's investment in affiliated common stock and its registered
separate account and gross unrealized depreciation of $213,000 on the
Company's other equity securities.
The carrying value of investments which have been non-income producing for
the twelve months preceding December 31, 1995 totaled $239,000 related to
one real estate property.
The Company analyzes its investment portfolio at least quarterly in order
to determine if the carrying value of its investments has been impaired.
The carrying value of debt and equity securities is written down to fair
value by a charge to realized losses when an impairment in value appears to
be other than temporary. During 1995, the Company identified two below
investment grade securities as having impairments in value that were other
than temporary. As a result of those determinations, the Company
recognized pre-tax losses of $5,802,000 to reduce the carrying value of the
securities to their estimated fair value. These securities were
subsequently sold resulting in realized gains totaling $1,200,000. During
1994, the Company recognized a pre-tax loss of $619,000 to reduce the
carrying value of one fixed maturity security to its estimated fair value.
This security had been previously written down to its estimated net
realizable value by a charge to realized losses of $6,443,000 during 1993.
This security was sold in the fourth quarter of 1994 at a nominal gain.
At December 31, 1995, the Company had established valuation allowances of
$202,000 on two mortgage loans (one of which was delinquent by 90 days or
more) to reduce the carrying value of these investments to their estimated
fair value less costs to sell. At December 31, 1994, the Company had
established valuation allowances of $57,000 on one mortgage loan and
$959,000 on one real estate property (sold in 1995) to reduce the carrying
value of these investments to their estimated fair value, less costs to sell.
During the year ended December 31, 1993, the Company recognized a pre-tax
loss of $363,000 to reduce the carrying value of one mortgage loan (sold in
1994) and established a valuation allowance of $86,000 on one real estate
property to reduce the carrying value of these investments to their estimated
fair value, less costs to sell.
At December 31, 1995, affidavits of deposits covering bonds with a par
value of $1,693,573,000 (1994 - $1,519,564,000), mortgage loans with an
unpaid principal balance of $304,729,000 (1994 - $225,404,000) and policy
loans with an unpaid balance of $167,844,000 (1994 - $168,653,000) were on
deposit with state agencies to meet regulatory requirements. In addition,
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
3. Investment Operations (continued)
at December 31, 1995, pursuant to a reinsurance agreement, the Company had
investments with a carrying value of $64,350,000 (1994 - $84,156,000) and
estimated market values of $64,350,000 (1994 - $72,637,000) deposited in a
trust for the benefit of the ceding company.
The Company's investment policies related to its investment portfolio
require diversification by asset type, company and industry and set limits
on the amounts which can be invested in an individual issuer. Such
policies are at least as restrictive as those set forth by regulatory
authorities. Fixed maturity investments included investments in various non-
governmental mortgage-backed securities (33% in 1995 and 35% in 1994),
public utilities (19% in 1995 and 22% in 1994), basic industrials (21% in
1995 and 18% in 1994), and consumer products (12% in 1995 and 13% in 1994).
Mortgage loans on real estate have been analyzed by geographical locations
and there are no concentrations of mortgage loans in any state exceeding
ten percent in 1995 and 1994. Mortgage loans on real estate have also been
analyzed by collateral type with significant concentrations identified in
retail facilities (32% in 1995 and 33% in 1994), industrial buildings (26%
in 1995 and 25% in 1994), multi-family residential buildings (24% in 1995
and 25% in 1994), and office buildings (17% in 1995 and 15% in 1994).
Equity securities are comprised of investments in the Company's registered
separate account and other equity securities and do not contain any
concentrations of risk by issuer or industry. Real estate and investments
accounted for by the equity method are not significant to the Company's
overall investment portfolio.
No investment in any person or its affiliates (other than bonds issued by
agencies of the United States government) exceeded ten percent of
stockholder's equity at December 31, 1995.
4. Fair Values of Financial Instruments
SFAS No. 107, Disclosures about Fair Value of Financial Instruments,
requires disclosure of estimated fair value of all financial instruments,
including both assets and liabilities recognized and not recognized in a
Company's balance sheet, unless specifically exempted. SFAS No. 119,
Disclosure about Derivative Financial Instruments and Fair Value of Financial
Instruments, requires additional disclosures about derivative financial
instruments. Most of the Company's investments, insurance liabilities and
debt fall within the standards' definition of a financial instrument.
Although the Company's life insurance liabilities are specifically exempted
from this disclosure requirement, estimated fair value disclosure of these
liabilities is also provided in order to make the disclosures more meaningful.
Accounting, actuarial and regulatory bodies are continuing to study the
methodologies to be used in developing fair value information, particularly
as it relates to such things as liabilities for insurance contracts.
Accordingly, care should be exercised in deriving conclusions about the
Company's business or financial condition based on the information presented
herein.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
4. Fair Values of Financial Instruments (continued)
The Company closely monitors the level of its insurance liabilities, the
level of interest rates credited to its interest-sensitive products and the
assumed interest margin provided for within the pricing structure of its
other products. These amounts are taken into consideration in the
Company's overall management of interest rate risk, which attempts to
minimize exposure to changing interest rates through the matching of
investment cash flows with amounts expected to be due under insurance
contracts. In addition, the Company is not currently a party to any
financial instruments such as futures, forward, swap or option contracts,
or other financial instruments with similar characteristics. As such, the
Company believes that it has reduced the volatility inherent in its "fair
value" adjusted stockholder's equity, although such volatility will not be
reduced completely. As discussed below, the Company has used discount
rates in its determination of fair values for its liabilities which are
consistent with market yields for related assets. The use of the asset
market yield is consistent with management's opinion that the risks
inherent in its asset and liability portfolios are similar. This
assumption, however, might not result in values that are consistent with
those obtained through an actuarial appraisal of the Company's business or
values that might arise in a negotiated transaction.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
4. Fair Values of Financial Instruments (continued)
The following compares carrying values as shown for financial reporting
purposes with estimated fair values:
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
_____________________________________________________
Estimated Estimated
Carrying Fair Carrying Fair
Value Value Value Value
___________ ___________ ___________ ___________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Assets
Balance sheet financial assets:
Fixed maturities:
Available for sale $7,352,211 $7,352,211 $778,486 $778,486
Held for investment -- -- 5,393,798 5,059,090
Equity securities of
unaffiliated companies 50,595 50,595 22,978 22,978
Equity security of
affiliated company 3,599 3,599 3,164 3,164
Mortgage loans on real
estate 1,169,456 1,245,128 610,185 586,333
Short-term investments 35,282 35,282 45,796 45,796
Cash and cash equivalents 10,390 10,390 11,830 11,830
Notes and other
receivables 137,126 137,126 119,261 119,261
Separate account assets 171,881 171,881 84,963 84,963
___________ ___________ ___________ ___________
8,930,540 9,006,212 7,070,461 6,711,901
Deferred policy acquisition
costs and intangible
assets 556,596 -- 610,118 --
Prepaid pension and other
postretirement benefits 24,547 22,737 21,702 18,404
Non-financial assets 52,779 52,779 63,710 63,710
___________ ___________ ___________ ___________
Total assets $9,564,462 $9,081,728 $7,765,991 $6,794,015
=========== =========== =========== ===========
</TABLE>
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
4. Fair Values of Financial Instruments (continued)
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
_____________________________________________________
Estimated Estimated
Carrying Fair Carrying Fair
Value Value Value Value
___________ ___________ ___________ ___________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Liabilities and stockholder's equity
Balance sheet financial liabilities:
Liabilities:
Future policy benefits (net
of related policy loans):
Annuity products $6,846,030 $5,905,241 $5,718,888 $4,312,559
Universal life and
current interest
products 441,726 309,142 390,061 258,852
Participating life insur-
ance and dividend
accumulations 577,599 444,497 580,043 377,577
Traditional life insurance
- nonpar 167,740 113,948 166,227 114,193
___________ ___________ ___________ ___________
8,033,095 6,772,828 6,855,219 5,063,181
Separate account
liabilities 171,881 171,881 84,963 84,963
___________ ___________ ___________ ___________
8,204,976 6,944,709 6,940,182 5,148,144
Deferred income taxes on fair
value adjustments -- 272,983 -- 287,894
Non-financial liabilities 312,092 312,092 152,964 152,964
___________ ___________ ___________ ___________
Total liabilities 8,517,068 7,529,784 7,093,146 5,589,002
Stockholder's equity 1,047,394 1,551,944 672,845 1,205,013
___________ ___________ ___________ ___________
Total liabilities and
stockholder's equity $9,564,462 $9,081,728 $7,765,991 $6,794,015
=========== =========== =========== ===========
</TABLE>
The following methods and assumptions were used by the Company in
estimating fair values:
Fixed maturities: Estimated market values of publicly traded securities
are as reported by an independent pricing service. Estimated market
values of conventional mortgage-backed securities not actively traded in
a liquid market are estimated using a third-party pricing system, which
uses a matrix calculation assuming a spread over U. S. Treasury bonds
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
4. Fair Values of Financial Instruments (continued)
based upon the expected average lives of the securities. Market values
of private placement bonds are estimated using a matrix that assumes a
spread (based on interest rates and a risk assessment of the bonds) over
U.S. Treasury bonds. Estimated market values of redeemable preferred
stocks are as reported by the NAIC.
Equity securities: Estimated fair values are based upon the latest
quoted market prices, where available. For equity securities not
actively traded, estimated fair values are based upon values of issues
of comparable yield and quality.
Mortgage loans on real estate: Fair values are estimated by discounting
expected cash flows, using interest rates currently being offered for
similar loans.
Short-term investments, cash and cash equivalents and notes and other
receivables: Carrying values reported in the Company's historical cost
basis balance sheet approximate estimated fair value for these
instruments, due to their short-term nature.
Prepaid pension and other postretirement benefits: Estimated fair value
of the prepaid pension costs asset and other postretirement benefits
obligations represents the fair value of plan assets less accumulated
benefit obligations (pension) and accumulated postretirement benefit
obligations. Differences in estimated fair value and carrying value are
the result of deferral of recognition of: prior service costs,
unrecognized gains and losses and the remaining balance of the
unrecognized transition asset for pensions.
Separate account assets and liabilities: Separate account assets and
liabilities are reported at estimated fair value in the Company's
historical cost basis balance sheet.
Future policy benefits: Estimated fair values of the Company's
liabilities for future policy benefits for annuity products, universal
life and current interest products, participating life insurance and
dividend accumulations and non-par traditional life insurance products
are based upon discounted cash flow calculations. Cash flows of future
policy benefits are discounted using the market yield rate of the assets
supporting these liabilities. Estimated fair values are presented net
of the estimated fair value of corresponding policy loans due to the
interdependent nature of the cash flows associated with these items.
Deferred policy acquisition costs and intangible assets: For historical
cost purposes, the recovery of policy acquisition costs is based on the
realization, among other things, of future interest spreads and gross
premiums on in-force business. Because these cash flows are considered
in the computation of the future policy benefit cash flows, the deferred
policy acquisition cost balance does not appear on the estimated fair
value balance sheet. Intangible assets do not appear in the estimated
fair value balance sheet because there are no cash flows related to
these assets.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
4. Fair Values of Financial Instruments (continued)
Derivative financial instruments: SFAS No. 119 requires disclosures
about derivative financial instruments such as futures, forward, swap or
option contracts, or other financial instruments with similar
characteristics. The Company was not a party to such derivative
financial instruments at any time during 1995 or 1994.
Deferred income taxes on fair value adjustments: Deferred income taxes
have been reported at the statutory rate for the differences (except for
those attributed to permanent differences) between the carrying value
and estimated fair value of assets and liabilities set forth herein.
Non-financial assets and liabilities: Values are presented at historical
cost. Non-financial assets consist primarily of real estate, securities
and indebtedness of related parties, property and equipment, current income
taxes recoverable and guaranty fund premium tax offset. Non-financial
liabilities consist primarily of other policy claims and benefits, accrued
dividends, deferred income taxes payable, guaranty fund assessments payable,
outstanding checks, suspense accounts, draft accounts payable and payable to
reinsurers.
SFAS No. 107 and SFAS No. 119 require disclosure of estimated fair value
information about financial instruments, whether or not recognized in the
consolidated balance sheet, for which it is practicable to estimate that
value. In cases where quoted market prices are not available, estimated
fair values are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows. In
that regard, the derived fair value estimates cannot be substantiated by
comparison to independent markets and, in many cases, could not be realized
in immediate settlement of the instrument. The above presentation should
not be viewed as an appraisal as there are several factors, such as the
fair value associated with customer or agent relationships and other
intangible items, which have not been considered. In addition, interest
rates and other assumptions might be modified if an actual appraisal were
to be performed. Accordingly, the aggregate estimated fair value amounts
presented herein are limited by each of these factors and do not purport to
represent the underlying value of the Company.
5. Income Taxes
The Company and all of its subsidiaries file a consolidated federal income
tax return with its parent company. The parent company and its subsidiaries
each report current income tax expense as allocated under a consolidated tax
allocation agreement. Taxes payable (receivable) to/from the parent under
this agreement were $3,149,000 and $(9,487,000) at December 31, 1995 and 1994,
respectively. Generally, this allocation results in profitable companies
recognizing a tax provision as if the individual company filed a separate
return and loss companies recognizing benefits to the extent their losses
contribute to reduce consolidated taxes. Deferred income taxes have been
established by each member of the consolidated group based upon the temporary
differences, the reversal of which will result in taxable or deductible
amounts in future years when the related asset or liability is recovered or
settled, within each entity.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
5. Income Taxes (continued)
Income tax expenses (credits) are included in the consolidated financial
statements as follows:
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
_______________________________________
(Dollars in thousands)
<S> <C> <C> <C>
Taxes provided in consolidated statements
of income on:
Income before equity income (loss):
Current $46,168 $43,357 $53,650
Deferred 1,065 9,905 (3,181)
___________ ___________ ___________
47,233 53,262 50,469
Equity income (loss):
Current (43) (65) 25
Deferred 52 52 43
___________ ___________ ___________
9 (13) 68
Taxes provided in consolidated
statement changes in stockholder's
equity on unrealized gains and
losses, less valuation allowance
of $9,403 in 1994 - deferred 113,503 -- --
___________ ___________ ___________
$160,745 $53,249 $50,537
=========== =========== ===========
</TABLE>
Income tax expense (credits) attributed to realized gains and losses on
investments amounted to $3,333,000, $6,744,000 and $15,749,000 for the years
ended December 31, 1995, 1994 and 1993, respectively. The effective tax rate
on income before income taxes and equity income (loss) is different from the
prevailing federal income tax rate as follows:
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
_______________________________________
(Dollars in thousands)
<S> <C> <C> <C>
Income before income taxes and
equity income (loss) $134,726 $153,224 $143,640
Income tax at federal statutory rate 47,154 53,628 50,274
Tax effect (decrease) of:
Taxes provided for IRS examinations -- -- 200
Other items 79 (366) (5)
___________ ___________ ___________
Income tax expense $47,233 $53,262 $50,469
=========== =========== ===========
</TABLE>
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
5. Income Taxes (continued)
The Internal Revenue Service ("IRS") is currently examining, or has
examined, the parent company's consolidated income tax returns through
1992. The 1993 and 1994 consolidated income tax returns remain open to
examination. Management believes amounts provided for IRS examinations are
adequate to settle any adjustments raised by the IRS.
The tax effect of temporary differences giving rise to the Company's
deferred income tax assets and liabilities at December 31, 1995 and 1994,
is as follows:
<TABLE>
<CAPTION>
December 31
1995 1994
_________________________
(Dollars in thousands)
<S> <C> <C>
Deferred tax assets:
Net unrealized depreciation of available for sale
fixed maturity securities $14,339
Future policy benefits $208,431 187,609
Accrued dividends 4,375 4,397
Guaranty fund assessment accruals 17,030 5,557
Other 9,194 8,534
___________ ___________
239,030 220,436
Deferred tax liabilities:
Net unrealized appreciation of available for sale
fixed maturity securities (163,581) --
Deferred policy acquisition costs (168,753) (192,061)
Prepaid pension costs (11,532) (10,434)
Other (8,335) (6,904)
___________ ___________
(352,201) (209,399)
Valuation allowance, for amounts attributable
to net unrealized depreciation for assets
available for sale -- (9,403)
___________ ___________
Deferred income tax asset (liability) ($113,171) $1,634
=========== ===========
</TABLE>
A valuation allowance of $9,403,000 was established to offset the deferred
tax asset related to the unrealized depreciation of assets held in the
available for sale account at December 31, 1994. No valuation allowance was
established for 1995 because the available for sale account reflected net
unrealized appreciation.
Prior to 1984, a portion of the Company's current income was not subject to
current income taxation, but was accumulated, for tax purposes, in a
memorandum account designated as "policyholders' surplus account". The
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
5. Income Taxes (continued)
aggregate accumulation in this account at December 31, 1995 was $14,388,000.
Should the policyholders' surplus account of the Company exceed the
limitation prescribed by federal income tax law, or should distributions be
made by the Company to the parent company in excess of $358,918,000, such
excess would be subject to federal income taxes at rates then effective.
Deferred income taxes of $5,036,000 have not been provided on amounts
included in this memorandum account since the Company contemplates no
action and can foresee no events that would create such a tax.
Deferred income taxes (credits) were also reported on equity income during
these periods. These taxes arise from the recognition of income and losses
differently for purposes of filing federal income tax returns than for
financial reporting purposes.
6. Employee Stock Compensation and Retirement Plans
Certain key employees of the Company participate in stock incentive plans
sponsored by Equitable of Iowa Companies, which provide for the award of
stock options or shares of stock of Equitable of Iowa Companies through
three means: qualified incentive stock options (as defined in the Internal
Revenue Code), non-qualified stock options and restricted shares. The non-
qualified stock options are compensatory, and require the accrual of
compensation expense over the period of service from the date the options
are granted until they become fully exercisable if market values exceed the
option price on the measurement date. During the years ended December 31,
1995, 1994 and 1993, compensation (income)/expense of $(4,000), $15,000 and
$78,000, respectively, was recognized related to these options.
The Company also awards restricted common stock of Equitable of Iowa
Companies to certain key employees. These shares are subject to forfeiture
to Equitable of Iowa Companies should the individuals terminate their
relationship with the Company for reasons other than death, permanent
disability or change in Company control prior to full vesting. Shares
granted to key employees generally vest over three to five years from the
date of grant. The Company amortizes as compensation expense the market
value on date of grant of restricted stock using the straight-line method
over the vesting periods. Compensation expense recognized during the years
ended December 31, 1995, 1994 and 1993 aggregated $533,000, $696,000 and
$450,000, respectively.
The Company also participates in a discretionary stock award plan under
which employees and agents are awarded shares of Equitable of Iowa
Companies' stock for superior performance. During the years ended
December 31, 1995, 1994 and 1993, awards of 1,370, 495 and 580 shares of
stock resulted in charges to income of $42,000, $16,000 and $15,000,
respectively.
The Company sponsors a long-term incentive compensation plan which allows
certain agents to earn units equal to shares of Equitable of Iowa
Companies' common stock based on personal production and the maintenance of
specific levels of assets under management. At December 31, 1995 and 1994,
the Company held 112,000 shares of common stock of Equitable of Iowa
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
6. Employee Stock Compensation and Retirement Plans (continued)
Companies, with a market value of $3,599,000 and $3,164,000, respectively
(cost - $618,000), to provide for projected distributions based on current
performance levels, under this plan. This program resulted in
expense/(income) of $736,000, $(129,000) and $926,000 in the years ended
December 31, 1995, 1994 and 1993, respectively.
Substantially all full-time employees of the Company are covered by a non-
contributory self-insured defined benefit pension plan. The benefits are
based on years of service and the employee's compensation during the last
five years of employment. Further, the parent sponsors a supplemental
defined benefit plan to provide benefits in excess of amounts allowed
pursuant to Internal Revenue Code Section 401(a)(17) and those allowed due
to integration rules. The Company's funding policy with respect to the plan
is consistent with the funding requirements of federal law and regulations.
The following table sets forth the plan's funded status and amounts
recognized in the Company's consolidated balance sheet:
<TABLE>
<CAPTION>
December 31
1995 1994
________________________
(Dollars in thousands)
<S> <C> <C>
Accumulated benefit obligation, including vested
benefits of $53,522 in 1995 and $45,788 in 1994 $54,441 $46,534
=========== ===========
Plan assets at fair value, primarily bonds, common
stocks (including 400,000 shares of the Equitable
of Iowa Companies' common stock), mortgage loans
and short-term investments $92,827 $78,120
Projected benefit obligation for service rendered
to date 61,332 51,778
___________ ___________
Plan assets in excess of projected benefit obligation 31,495 26,342
Unrecognized net loss from past experience different
from that assumed and effects of changes in
assumptions 2,793 7,002
Prior service cost not yet recognized 619 760
Unrecognized net asset at the transition date, net
of amortization (1,109) (3,456)
___________ ___________
Prepaid pension cost $33,798 $30,648
=========== ===========
</TABLE>
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
6. Employee Stock Compensation and Retirement Plans (continued)
Net periodic pension benefit included the following components:
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
_____________________________________
(Dollars in thousands)
<S> <C> <C> <C>
Actual return on plan assets $18,201 ($7,681) $13,647
Service cost-benefits earned during
the period (1,052) (1,221) (935)
Interest cost on projected benefit
obligation (4,096) (3,867) (3,623)
Net amortization and deferral (9,979) 16,761 (4,932)
___________ ___________ ___________
Net periodic pension benefit $3,074 $3,992 $4,157
=========== =========== ===========
</TABLE>
The discount rate and rate of increase in future compensation levels used
in determining the actuarial present value of the projected benefit
obligation were 7.0% and 5.0%, respectively, at December 31, 1995, and 8.0%
and 5.0%, respectively, at December 31, 1994. The average expected long-
term rate of return on plan assets was 8.0% in 1995 and 1994 and 8.5% in
1993.
In addition to the Company's defined benefit pension plan, the Company
sponsors plans that provide postretirement medical and group term life
insurance benefits to full-time employees and agents who have worked for
the Company for five years and attained age 55 as of January 1, 1992. The
medical plans are contributory, with retiree contributions adjusted
annually, and contain other cost-sharing features such as deductibles and
coinsurance. The accounting for these plans anticipates that the Company's
contributions will increase annually by the lesser of the health care
inflation rate or 3%, with increases in excess of these amounts borne by
the employee or agent. All payments of the liability for group term life
insurance are funded by the Company on a pay-as-you-go (cash) basis.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
6. Employee Stock Compensation and Retirement Plans (continued)
The Company has chosen not to fund any amounts in excess of current
benefits. The following table sets forth the amounts recognized in the
Company's consolidated balance sheet:
<TABLE>
<CAPTION>
December 31, 1995
_____________________________
Life
Medical Insurance
Plans Plans Total
_____________________________
(Dollars in thousands)
<S> <C> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $4,033 $1,981 $6,014
Fully eligible active plan participants 969 140 1,109
Other active plan participants 1,236 73 1,309
_________ _________ _________
Accumulated postretirement benefit obligation
in excess of plan assets 6,238 2,194 8,432
Prior service cost not yet recognized in net
postretirement benefit cost 360 83 443
Unrecognized net loss (358) (116) (474)
_________ _________ _________
Accrued postretirement benefit cost $6,240 $2,161 $8,401
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1994
_____________________________
Life
Medical Insurance
Plans Plans Total
_____________________________
(Dollars in thousands)
<S> <C> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $3,374 $1,854 $5,228
Fully eligible active plan participants 1,026 160 1,186
Other active plan participants 1,232 82 1,314
_________ _________ _________
Accumulated postretirement benefit obligation
in excess of plan assets 5,632 2,096 7,728
Prior service cost not yet recognized in net
postretirement benefit cost 393 90 483
Unrecognized net loss (72) (28) (100)
_________ _________ _________
Accrued postretirement benefit cost $5,953 $2,158 $8,111
========= ========= =========
</TABLE>
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
6. Employee Stock Compensation and Retirement Plans (continued)
Net periodic postretirement benefit costs include the following components:
<TABLE>
<CAPTION>
December 31, 1995
_____________________________
Life
Medical Insurance
Plans Plans Total
_____________________________
(Dollars in thousands)
<S> <C> <C> <C>
Service cost $250 $10 $260
Interest cost 409 153 562
Net amortization of prior service cost (33) (7) (40)
_________ _________ _________
Net periodic postretirement benefit cost $626 $156 $782
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1994
_____________________________
Life
Medical Insurance
Plans Plans Total
_____________________________
(Dollars in thousands)
<S> <C> <C> <C>
Service cost $279 $13 $292
Interest cost 405 159 564
Net amortization of prior service cost and
amortization of unrecognized loss (26) (6) (32)
_________ _________ _________
Net periodic postretirement benefit cost $658 $166 $824
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1993
_____________________________
Life
Medical Insurance
Plans Plans Total
_____________________________
(Dollars in thousands)
<S> <C> <C> <C>
Service cost $244 $27 $271
Interest cost 381 163 544
_________ _________ _________
Net periodic postretirement benefit cost $625 $190 $815
========= ========= =========
</TABLE>
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
6. Employee Stock Compensation and Retirement Plans (continued)
The weighted-average annual assumed rate of increase in the per capita cost
of health care benefits (i.e., health care cost trend rate) used in
determining the actuarial present value of the accumulated postretirement
benefit obligation was 12.5% at December 31, 1995 and 13.5% at December 31,
1994 for employees under 65 and 8.5% at December 31, 1995 and 9.0% at
December 31, 1994 for employees over 65, with the rates for both groups to
be graded down to 5.5% for 2005 and thereafter. The health care cost trend
rate assumption has a significant effect on the amounts reported. For
example, increasing the assumed health care trend rates by one percent
would increase the accumulated postretirement benefit obligation as of
December 31, 1995 by $744,000 and net periodic postretirement benefit costs
for the year ended December 31, 1995 by $95,000. The discount rate used in
determining the accumulated postretirement benefit obligation was 7.0% at
December 31, 1995 and 8.0% at December 31, 1994.
The Company also sponsors an unfunded deferred compensation plan providing
benefits to certain former employees. The Company recognized benefits of
$20,000, $38,000 and $44,000 during the years ended December 31, 1995, 1994
and 1993, respectively, in connection with this plan.
The Company sponsors pension plans for its employees which are qualified
under Internal Revenue Code Section 401(k). Employees may contribute a
portion of their annual salary, subject to limitation, to the plans. The
Company contributes an additional amount, subject to limitation, based on
the voluntary contribution of the employee. Company contributions charged
to expense with respect to these plans during the years ended December 31,
1995, 1994 and 1993 were $292,000, $289,000 and $259,000, respectively.
The Company has non-contributory self-insured defined contribution pension
plans for its agents. Contributions charged to expense under these plans
during the years ended December 31, 1995, 1994 and 1993 amounted to
$368,000, $389,000 and $566,000, respectively.
Certain of the assets related to these plans are on deposit with the
Company and amounts relating to these plans are included in these
consolidated financial statements.
7. Commitments and Contingencies
Reinsurance
In the normal course of business, the Company seeks to limit its exposure
to loss on any single insured and to recover a portion of benefits paid by
ceding reinsurance to other insurance enterprises or reinsurers. Reinsurance
coverages for life insurance vary according to the age and risk classification
of the insured with retention limits ranging up to $500,000 of coverage per
individual life. The Company does not use financial or surplus relief
reinsurance. At December 31, 1995, life insurance in force ceded on a
consolidated basis amounted to $1,459,523,000, or approximately 13.4% of
total life insurance in force.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
7. Commitments and Contingencies (continued)
Reinsurance contracts do not relieve the Company of its obligations to its
policyholders. To the extent that reinsuring companies are later unable to
meet obligations under reinsurance agreements, the Company would be liable
for these obligations, and payment of these obligations could result in
losses to the Company. To limit the possibility of such losses, the
Company evaluates the financial condition of its reinsurers, monitors
concentrations of credit risk arising from factors such as similar
geographic regions, and limits its exposure to any one reinsurer. At
December 31, 1995, the Company had reinsurance treaties with 16 reinsurers,
all of which are deemed to be long-duration, retroactive contracts, and has
established a receivable totaling $19,298,000 for reserve credits
($11,986,000 in 1994), reinsurance claims and other receivables from these
reinsurers. No allowance for uncollectible amounts has been established
since none of the receivables are deemed to be uncollectible, and because
such receivables, either individually or in the aggregate, are not material
to the Company's operations. The Company's liability for future policy
benefits and notes and other receivables have been increased by $18,103,000
at December 31, 1995 ($9,871,000 in 1994) for reserve credits on reinsured
policies. This "gross-up" of assets and liabilities for reserve credits on
reinsurance had no impact on the Company's net income. Insurance premiums
and product charges have been reduced by $6,271,000, $5,916,000 and
$5,653,000 and insurance benefits have been reduced by $8,281,000,
$5,310,000 and $3,498,000 in 1995, 1994 and 1993, respectively, as a result
of the cession agreements. The amount of reinsurance assumed is not
significant.
Guaranty Fund Assessments
Assessments are levied on the Company by life and health guaranty associations
in most states in which the Company is licensed to cover losses of
policyholders of insolvent or rehabilitated insurers. In some states, these
assessments can be partially recovered through a reduction in future premium
taxes. Based upon information currently available from the National
Organization of Life and Health Guaranty Association, the Company believes
that it is probable that these insolvencies will result in future assessments
which will be material to the Company's financial statements. The Company
regularly reviews its reserve for these insolvencies and updates its reserve
based upon the Company's interpretation of information recently received.
Information received during December 1995 reflected an increase in the
estimated cost to the insurance industry of approximately 44% from 1994. The
associated cost for a particular insurance company can vary significantly
based upon its premium volume by line of business in a particular state and
its potential for premium tax offset. The Company reported record premium
levels in 1994 which served as the basis for determining the associated
liability for several new insolvencies. As a result, the Company accrued and
charged to expense an additional $36,492,000 during 1995 ($1,763,000 in 1994
and $2,109,000 in 1993). At December 31, 1995, the Company has reserved
$48,562,000 to cover estimated future assessments (net of related anticipated
premium tax credits) and has established an asset totaling $14,877,000 for
items expected to be recoverable through future premium tax offsets. The
Company cannot predict whether and to what extent legislative initiatives may
affect the right to offset.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
7. Commitments and Contingencies (continued)
Litigation
The Company and certain of its subsidiaries are defendants in class action
lawsuits filed in the Iowa District Court for Polk County in May 1995 and
the United States District Court for the Middle District of Florida, Tampa
Division in February 1996. The Florida suit is similar to the Iowa suit
and was filed by some of the same law firms as in the earlier Iowa suit.
The Company believes the new action was filed in response to jurisdictional
and procedural problems faced by the plaintiffs in the Iowa suit. The
suits claim unspecified damages as a result of the sale of life insurance
policies with so-called "vanishing premiums" wherein cash values are used
to pay insurance premiums under certain interest rate scenarios. The
complaints allege that the policyholders were misled by optimistic policy
illustrations. The Company believes the allegations are without merit
because full and appropriate disclosure was made as a matter of practice.
The suits are in the early discovery and procedural stages and have not yet
been certified as class actions. The Company intends to defend the suits
vigorously. The amount of any liability which may arise as a result of
these suits, if any, cannot be reasonably estimated and no provision for
loss has been made in the accompanying financial statements.
On December 15, 1995, USG received a Notice of Intention to Arbitrate a
dispute with one of its insurance brokerage agencies before the American
Arbitration Association. The agency alleges that USG has failed to pay an
unspecified amount of commissions for the sale of insurance products,
including alleged future commissions on future policy values if the
policies stay in force. USG believes the claims are without merit based
upon its interpretation of the agreements between the parties, the business
relations between the parties and custom and practice in the industry.
Therefore, USG has denied the allegations and intends to defend the
proceeding vigorously. The amount of any liability which may arise as a
result of this arbitration, if any, cannot be reasonably estimated and no
provision for loss has been made in the accompanying financial statements.
In the ordinary course of business, the Company and its subsidiaries are
also engaged in certain other litigation, none of which management believes
is material.
Vulnerability from Concentrations
The Company has various concentrations in its investment portfolio (see
Note 3 for further information). The Company's asset growth, net investment
income and cash flow are primarily generated from the sale of individual
fixed annuity policies and associated future policy benefits. Substantial
changes in tax laws that would make these products less attractive to
consumers or extreme fluctuations in interest rates which may result in
higher lapse experience than assumed, could cause a severe impact to the
Company's financial condition.
Equitable Life Insurance Company of Iowa
Notes to Consolidated Financial Statements (continued)
7. Commitments and Contingencies (continued)
Leases and Other Commitments
The Company leases its home office space and certain other equipment under
operating leases which expire through 2017. During the years ended
December 31, 1995, 1994 and 1993, rent expense totaled $2,001,000,
$1,995,000 and $1,769,000, respectively. At December 31, 1995, minimum
rental payments due under all non-cancelable operating leases with initial
terms of one year or more are: 1996 - $1,821,000; 1997 - $1,485,000; 1998
- - $3,960,000; 1999 - $2,784,000; and 2000 - $2,553,000.
At December 31, 1995, outstanding commitments to fund mortgage loans on
real estate totaled $146,560,000.
8. Related Party Transactions
The Company purchases investment management services from an affiliate.
Payments for these services aggregated $8,143,000, $6,734,000 and
$5,317,000 during the years ended December 31, 1995, 1994 and 1993,
respectively.
Additionally, the Company maintains a line of credit agreement with
Equitable of Iowa Companies to facilitate the handling of unusual and/or
unanticipated short-term cash requirements. Under the current agreement,
which expires on December 31, 1996, the Company can borrow up to $140
million. Interest on any outstanding borrowings is charged at a rate of
Equitable of Iowa Companies' monthly average aggregate cost of short-term
funds plus 1.00%. At December 31, 1995, no amounts were outstanding under
the line of credit.
Equitable Life Insurance Company of Iowa
SCHEDULE I
SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES
(Dollars in thousands)
<TABLE>
<CAPTION>
Balance
Sheet
December 31, 1995 Cost 1 Value Amount
_______________________________________________________________________________
<S> <C> <C> <C>
TYPE OF INVESTMENT
Fixed maturities, available for sale:
Bonds:
United States Government and governmental
agencies and authorities $349,989 $370,888 $370,888
States, municipalities and
political subdivisions 15,485 17,124 17,124
Foreign governments 10,573 13,999 13,999
Public utilities 1,271,641 1,362,110 1,362,110
Investment grade corporate 2,322,036 2,598,714 2,598,714
Below investment grade corporate 574,284 581,220 581,220
Mortgage-backed securities 2,340,194 2,407,756 2,407,756
Redeemable preferred stocks 635 400 400
___________ ___________ ___________
Total fixed maturities, available
for sale 6,884,837 7,352,211 7,352,211
Equity securities:
Common stocks:
Affiliates 618 3,599 3,599
Industrial, miscellaneous and
all other 49,789 50,595 50,595
___________ ___________ ___________
Total equity securities 50,407 54,194 54,194
Mortgage loans on real estate 1,169,456 1,169,456
Real estate:
Investment properties 3,672 3,672
Acquired in satisfaction of debt 10,288 10,288
___________ ___________
Total real estate 13,960 13,960
Policy loans 182,423 182,423
Short-term investments 35,282 35,282
___________ ___________
Total investments $8,336,365 $8,807,526
=========== ===========
<FN>
Note 1: Except as stated in Note 2 below, cost is defined as original cost
for stocks and other invested assets, amortized cost for bonds and
unpaid principal for policy loans and mortgage loans on real estate,
adjusted for amortization of premiums, accrual of discounts and
cost less allowances for depreciation for real estate.
Note 2: Original cost and amortized cost of investments have been adjusted
to reflect other than temporary declines in value by charges to
income as follows. Mortgage loans on real estate: 1995 - $145,000;
1994 - $57,000. Real estate: 1991 - $123,000 and 1990 - $90,000.
</TABLE>
Equitable Life Insurance Company of Iowa
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION
(Dollars in thousands)
<TABLE>
<CAPTION>
Column Column Column Column Column Column
A B C D E F
_______________________________________________________________________________
Future
Policy Other
De- Benefits, Policy
ferred Losses, Claims Insur-
Policy Claims Un- and ance
Acqui- and earned Bene- Premiums
sition Loss Revenue fits and
Segment Costs Expenses Reserve Payable Charges
_______________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1995:
Life insurance $554,179 $8,206,991 $14,326 $8,980 $94,891
Year ended December 31, 1994:
Life insurance 607,626 7,014,207 14,317 7,785 90,032
Year ended December 31, 1993:
Life insurance 451,180 5,578,085 14,451 5,765 81,151
</TABLE>
<TABLE>
<CAPTION>
Column Column Column Column Column Column
A G H I J K
_______________________________________________________________________________
Amorti-
Benefits zation
Claims, of
Losses Deferred
Net and Policy Other
Invest- Settle- Acqui- Opera-
ment ment sitions ting Premiums
Segment Income Expenses Costs Expenses Written
_______________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1995:
Life insurance $638,056 $487,031 $72,537 $54,504 --
Year ended December 31, 1994:
Life insurance 521,646 414,450 50,921 17,128 --
Year ended December 31, 1993:
Life insurance 432,044 358,172 42,078 20,185 --
</TABLE>
Equitable Life Insurance Company of Iowa
SCHEDULE IV
REINSURANCE
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
________________________________________________________________________________
Percentage
Ceded to Assumed of Amount
Gross Other from Other Net Assumed
Amount Companies Companies Amount to Net
________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1995:
Life insurance in
force $10,927,445 $1,459,523 $ -- $9,467,922 --
============ ============ ========= =========== ==========
Insurance premiums
and charges $101,095 $6,271 $67 $94,891 --
============ ============ ========= =========== ==========
Year ended December 31, 1994:
Life insurance in
force $10,146,940 $1,421,608 $ -- $8,725,332 --
============ ============ ========= =========== ==========
Insurance premiums
and charges $95,821 $5,916 $127 $90,032 --
============ ============ ========= =========== ==========
Year ended December 31, 1993:
Life insurance in
force $9,617,881 $1,326,020 $ -- $8,291,861 --
============ ============ ========= =========== ==========
Insurance premiums
and charges $86,615 $5,653 $189 $81,151 --
============ ============ ========= =========== ==========
</TABLE>
Report of Independent Auditors
The Board of Directors
Equitable Life Insurance Company of Iowa
We have audited the accompanying statements of net assets of certain
accounts of Equitable Life Insurance Company of Iowa Separate Account
A (comprising, respectively, the Money Market, Mortgage-Backed
Securities, International Fixed Income, OTC, Research, Total Return,
Advantage, Government Securities, International Stock and Short-Term
Bond Accounts) as of December 31, 1995, and the related statements of
operations for the year ended December 31, 1995 and statements of
changes in net assets for the period from October 7, 1994
(commencement of operations) through December 31, 1994 and for the
year ended December 31, 1995. These financial statements are the
responsibility of the Account's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1995, by correspondence with the
transfer agent. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of certain
accounts of the Equitable Life Insurance Company of Iowa Separate
Account A at December 31, 1995, and the results of their operations
for the year ended December 31, 1995 and the changes in their net
assets for the period from October 7, 1994 through December 31, 1994
and for the year ended December 31, 1995 in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
Des Moines, Iowa
February 7, 1996
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
EQUI-SELECT PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
Money
Market
Account
____________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust Money Market Portfolio,
5,708,694 shares at $1.00 per share (cost - $5,708,694) $5,708,694
Equi-Select Series Trust Mortgage-Backed Securities Portfolio,
378,660 shares at $10.84 per share (cost - $4,182,777)
Equi-Select Series Trust International Fixed Income Portfolio,
310,243 shares at $11.09 per share (cost - $3,405,258)
Equi-Select Series Trust OTC Portfolio,
748,553 shares at $12.08 per share (cost - $9,015,055)
Equi-Select Series Trust Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Equi-Select Series Trust Total Return Portfolio,
1,301,515 shares at $11.90 per share (cost - $14,460,627)
Equi-Select Series Trust Advantage Portfolio,
343,572 shares at $10.18 per share (cost - $3,599,548)
Equi-Select Series Trust Government Securities Portfolio,
55,971 shares at $10.42 per share (cost - $603,887)
Equi-Select Series Trust International Stock Portfolio,
541,371 shares at $10.14 per share (cost - $5,412,698)
Equi-Select Series Trust Short-Term Bond Portfolio,
31,925 shares at $10.09 per share (cost - $332,138)
____________
TOTAL INVESTMENTS 5,708,694
Accrued investment income 23,527
____________
TOTAL NET ASSETS $5,732,221
============
NET ASSETS REPRESENTED BY:
Units 548,767
Unit Value 10.45
____________
Net Assets $5,732,221
============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
EQUI-SELECT PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
Mortgage-
Backed
Securites
Account
____________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust Money Market Portfolio,
5,708,694 shares at $1.00 per share (cost - $5,708,694)
Equi-Select Series Trust Mortgage-Backed Securities Portfolio,
378,660 shares at $10.84 per share (cost - $4,182,777) $4,104,533
Equi-Select Series Trust International Fixed Income Portfolio,
310,243 shares at $11.09 per share (cost - $3,405,258)
Equi-Select Series Trust OTC Portfolio,
748,553 shares at $12.08 per share (cost - $9,015,055)
Equi-Select Series Trust Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Equi-Select Series Trust Total Return Portfolio,
1,301,515 shares at $11.90 per share (cost - $14,460,627)
Equi-Select Series Trust Advantage Portfolio,
343,572 shares at $10.18 per share (cost - $3,599,548)
Equi-Select Series Trust Government Securities Portfolio,
55,971 shares at $10.42 per share (cost - $603,887)
Equi-Select Series Trust International Stock Portfolio,
541,371 shares at $10.14 per share (cost - $5,412,698)
Equi-Select Series Trust Short-Term Bond Portfolio,
31,925 shares at $10.09 per share (cost - $332,138)
____________
TOTAL INVESTMENTS 4,104,533
Accrued investment income 234,987
____________
TOTAL NET ASSETS $4,339,520
============
NET ASSETS REPRESENTED BY:
Units 380,031
Unit Value 11.42
____________
Net Assets $4,339,520
============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
EQUI-SELECT PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
International
Fixed
Income
Account
______________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust Money Market Portfolio,
5,708,694 shares at $1.00 per share (cost - $5,708,694)
Equi-Select Series Trust Mortgage-Backed Securities Portfolio,
378,660 shares at $10.84 per share (cost - $4,182,777)
Equi-Select Series Trust International Fixed Income Portfolio,
310,243 shares at $11.09 per share (cost - $3,405,258) $3,439,156
Equi-Select Series Trust OTC Portfolio,
748,553 shares at $12.08 per share (cost - $9,015,055)
Equi-Select Series Trust Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Equi-Select Series Trust Total Return Portfolio,
1,301,515 shares at $11.90 per share (cost - $14,460,627)
Equi-Select Series Trust Advantage Portfolio,
343,572 shares at $10.18 per share (cost - $3,599,548)
Equi-Select Series Trust Government Securities Portfolio,
55,971 shares at $10.42 per share (cost - $603,887)
Equi-Select Series Trust International Stock Portfolio,
541,371 shares at $10.14 per share (cost - $5,412,698)
Equi-Select Series Trust Short-Term Bond Portfolio,
31,925 shares at $10.09 per share (cost - $332,138)
______________
TOTAL INVESTMENTS 3,439,156
Accrued investment income 160,411
______________
TOTAL NET ASSETS $3,599,567
==============
NET ASSETS REPRESENTED BY:
Units 311,689
Unit Value 11.55
______________
Net Assets $3,599,567
==============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
EQUI-SELECT PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
OTC
Account
____________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust Money Market Portfolio,
5,708,694 shares at $1.00 per share (cost - $5,708,694)
Equi-Select Series Trust Mortgage-Backed Securities Portfolio,
378,660 shares at $10.84 per share (cost - $4,182,777)
Equi-Select Series Trust International Fixed Income Portfolio,
310,243 shares at $11.09 per share (cost - $3,405,258)
Equi-Select Series Trust OTC Portfolio,
748,553 shares at $12.08 per share (cost - $9,015,055) $9,042,595
Equi-Select Series Trust Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Equi-Select Series Trust Total Return Portfolio,
1,301,515 shares at $11.90 per share (cost - $14,460,627)
Equi-Select Series Trust Advantage Portfolio,
343,572 shares at $10.18 per share (cost - $3,599,548)
Equi-Select Series Trust Government Securities Portfolio,
55,971 shares at $10.42 per share (cost - $603,887)
Equi-Select Series Trust International Stock Portfolio,
541,371 shares at $10.14 per share (cost - $5,412,698)
Equi-Select Series Trust Short-Term Bond Portfolio,
31,925 shares at $10.09 per share (cost - $332,138)
____________
TOTAL INVESTMENTS 9,042,595
Accrued investment income 994,102
____________
TOTAL NET ASSETS $10,036,697
============
NET ASSETS REPRESENTED BY:
Units 759,597
Unit Value 13.21
____________
Net Assets $10,036,697
============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
EQUI-SELECT PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
Research
Account
____________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust Money Market Portfolio,
5,708,694 shares at $1.00 per share (cost - $5,708,694)
Equi-Select Series Trust Mortgage-Backed Securities Portfolio,
378,660 shares at $10.84 per share (cost - $4,182,777)
Equi-Select Series Trust International Fixed Income Portfolio,
310,243 shares at $11.09 per share (cost - $3,405,258)
Equi-Select Series Trust OTC Portfolio,
748,553 shares at $12.08 per share (cost - $9,015,055)
Equi-Select Series Trust Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800) $16,172,693
Equi-Select Series Trust Total Return Portfolio,
1,301,515 shares at $11.90 per share (cost - $14,460,627)
Equi-Select Series Trust Advantage Portfolio,
343,572 shares at $10.18 per share (cost - $3,599,548)
Equi-Select Series Trust Government Securities Portfolio,
55,971 shares at $10.42 per share (cost - $603,887)
Equi-Select Series Trust International Stock Portfolio,
541,371 shares at $10.14 per share (cost - $5,412,698)
Equi-Select Series Trust Short-Term Bond Portfolio,
31,925 shares at $10.09 per share (cost - $332,138)
____________
TOTAL INVESTMENTS 16,172,693
Accrued investment income 274,255
____________
TOTAL NET ASSETS $16,446,948
============
NET ASSETS REPRESENTED BY:
Units 1,255,752
Unit Value 13.10
____________
Net Assets $16,446,948
============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
EQUI-SELECT PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
Total
Return
Account
____________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust Money Market Portfolio,
5,708,694 shares at $1.00 per share (cost - $5,708,694)
Equi-Select Series Trust Mortgage-Backed Securities Portfolio,
378,660 shares at $10.84 per share (cost - $4,182,777)
Equi-Select Series Trust International Fixed Income Portfolio,
310,243 shares at $11.09 per share (cost - $3,405,258)
Equi-Select Series Trust OTC Portfolio,
748,553 shares at $12.08 per share (cost - $9,015,055)
Equi-Select Series Trust Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Equi-Select Series Trust Total Return Portfolio,
1,301,515 shares at $11.90 per share (cost - $14,460,627) $15,492,400
Equi-Select Series Trust Advantage Portfolio,
343,572 shares at $10.18 per share (cost - $3,599,548)
Equi-Select Series Trust Government Securities Portfolio,
55,971 shares at $10.42 per share (cost - $603,887)
Equi-Select Series Trust International Stock Portfolio,
541,371 shares at $10.14 per share (cost - $5,412,698)
Equi-Select Series Trust Short-Term Bond Portfolio,
31,925 shares at $10.09 per share (cost - $332,138)
____________
TOTAL INVESTMENTS 15,492,400
Accrued investment income 329,442
____________
TOTAL NET ASSETS $15,821,842
============
NET ASSETS REPRESENTED BY:
Units 1,312,565
Unit Value 12.05
____________
Net Assets $15,821,842
============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
EQUI-SELECT PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
Advantage
Account
____________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust Money Market Portfolio,
5,708,694 shares at $1.00 per share (cost - $5,708,694)
Equi-Select Series Trust Mortgage-Backed Securities Portfolio,
378,660 shares at $10.84 per share (cost - $4,182,777)
Equi-Select Series Trust International Fixed Income Portfolio,
310,243 shares at $11.09 per share (cost - $3,405,258)
Equi-Select Series Trust OTC Portfolio,
748,553 shares at $12.08 per share (cost - $9,015,055)
Equi-Select Series Trust Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Equi-Select Series Trust Total Return Portfolio,
1,301,515 shares at $11.90 per share (cost - $14,460,627)
Equi-Select Series Trust Advantage Portfolio,
343,572 shares at $10.18 per share (cost - $3,599,548) $3,499,215
Equi-Select Series Trust Government Securities Portfolio,
55,971 shares at $10.42 per share (cost - $603,887)
Equi-Select Series Trust International Stock Portfolio,
541,371 shares at $10.14 per share (cost - $5,412,698)
Equi-Select Series Trust Short-Term Bond Portfolio,
31,925 shares at $10.09 per share (cost - $332,138)
____________
TOTAL INVESTMENTS 3,499,215
Accrued investment income 245,022
____________
TOTAL NET ASSETS $3,744,237
============
NET ASSETS REPRESENTED BY:
Units 344,775
Unit Value 10.86
____________
Net Assets $3,744,237
============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
EQUI-SELECT PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
Government
Securities
Account
____________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust Money Market Portfolio,
5,708,694 shares at $1.00 per share (cost - $5,708,694)
Equi-Select Series Trust Mortgage-Backed Securities Portfolio,
378,660 shares at $10.84 per share (cost - $4,182,777)
Equi-Select Series Trust International Fixed Income Portfolio,
310,243 shares at $11.09 per share (cost - $3,405,258)
Equi-Select Series Trust OTC Portfolio,
748,553 shares at $12.08 per share (cost - $9,015,055)
Equi-Select Series Trust Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Equi-Select Series Trust Total Return Portfolio,
1,301,515 shares at $11.90 per share (cost - $14,460,627)
Equi-Select Series Trust Advantage Portfolio,
343,572 shares at $10.18 per share (cost - $3,599,548)
Equi-Select Series Trust Government Securities Portfolio,
55,971 shares at $10.42 per share (cost - $603,887) $583,367
Equi-Select Series Trust International Stock Portfolio,
541,371 shares at $10.14 per share (cost - $5,412,698)
Equi-Select Series Trust Short-Term Bond Portfolio,
31,925 shares at $10.09 per share (cost - $332,138)
____________
TOTAL INVESTMENTS 583,367
Accrued investment income 77,967
____________
TOTAL NET ASSETS $661,334
============
NET ASSETS REPRESENTED BY:
Units 56,258
Unit Value 11.76
____________
Net Assets $661,334
============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
EQUI-SELECT PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
International
Stock
Account
______________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust Money Market Portfolio,
5,708,694 shares at $1.00 per share (cost - $5,708,694)
Equi-Select Series Trust Mortgage-Backed Securities Portfolio,
378,660 shares at $10.84 per share (cost - $4,182,777)
Equi-Select Series Trust International Fixed Income Portfolio,
310,243 shares at $11.09 per share (cost - $3,405,258)
Equi-Select Series Trust OTC Portfolio,
748,553 shares at $12.08 per share (cost - $9,015,055)
Equi-Select Series Trust Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Equi-Select Series Trust Total Return Portfolio,
1,301,515 shares at $11.90 per share (cost - $14,460,627)
Equi-Select Series Trust Advantage Portfolio,
343,572 shares at $10.18 per share (cost - $3,599,548)
Equi-Select Series Trust Government Securities Portfolio,
55,971 shares at $10.42 per share (cost - $603,887)
Equi-Select Series Trust International Stock Portfolio,
541,371 shares at $10.14 per share (cost - $5,412,698) $5,490,993
Equi-Select Series Trust Short-Term Bond Portfolio,
31,925 shares at $10.09 per share (cost - $332,138)
______________
TOTAL INVESTMENTS 5,490,993
Accrued investment income 227,777
______________
TOTAL NET ASSETS $5,718,770
==============
NET ASSETS REPRESENTED BY:
Units 541,570
Unit Value 10.56
______________
Net Assets $5,718,770
==============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
EQUI-SELECT PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
Short-Term
Bond
Account
____________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust Money Market Portfolio,
5,708,694 shares at $1.00 per share (cost - $5,708,694)
Equi-Select Series Trust Mortgage-Backed Securities Portfolio,
378,660 shares at $10.84 per share (cost - $4,182,777)
Equi-Select Series Trust International Fixed Income Portfolio,
310,243 shares at $11.09 per share (cost - $3,405,258)
Equi-Select Series Trust OTC Portfolio,
748,553 shares at $12.08 per share (cost - $9,015,055)
Equi-Select Series Trust Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Equi-Select Series Trust Total Return Portfolio,
1,301,515 shares at $11.90 per share (cost - $14,460,627)
Equi-Select Series Trust Advantage Portfolio,
343,572 shares at $10.18 per share (cost - $3,599,548)
Equi-Select Series Trust Government Securities Portfolio,
55,971 shares at $10.42 per share (cost - $603,887)
Equi-Select Series Trust International Stock Portfolio,
541,371 shares at $10.14 per share (cost - $5,412,698)
Equi-Select Series Trust Short-Term Bond Portfolio,
31,925 shares at $10.09 per share (cost - $332,138) $322,215
____________
TOTAL INVESTMENTS 322,215
Accrued investment income 29,396
____________
TOTAL NET ASSETS $351,611
============
NET ASSETS REPRESENTED BY:
Units 32,032
Unit Value 10.98
____________
Net Assets $351,611
============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
EQUI-SELECT PRODUCT
For the year ended December 31, 1995
<TABLE>
<CAPTION>
Mortgage-
Money Backed
Market Securities
Account Account
______________ ______________
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends $173,300 $192,773
Capital gains distributions -- 42,213
Expenses (Note 2):
Annual contract charges (74) (97)
Administrative charges (5,092) (1,928)
Mortality and expense
risk charges (42,199) (15,980)
______________ ______________
Net investment income 125,935 216,981
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 4)
Net realized gain on
investments -- 994
Net unrealized appreciation
(depreciation) of
investments -- (77,915)
______________ ______________
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $125,935 $140,060
============== ==============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
EQUI-SELECT PRODUCT
For the year ended December 31, 1995
<TABLE>
<CAPTION>
International
Fixed
Income OTC Research
Account Account Account
______________ ______________ ______________
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends $139,030 -- $39,906
Capital gains distributions 33,016 $994,102 234,349
Expenses (Note 2):
Annual contract charges (107) (579) (558)
Administrative charges (2,366) (6,510) (8,999)
Mortality and expense
risk charges (19,614) (53,955) (74,579)
______________ ______________ ______________
Net investment income 149,959 933,058 190,119
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 4)
Net realized gain on
investments 4,271 36,066 19,662
Net unrealized appreciation
(depreciation) of
investments 34,190 20,313 1,548,017
______________ ______________ ______________
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $188,420 $989,437 $1,757,798
============== ============== ==============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
EQUI-SELECT PRODUCT
For the year ended December 31, 1995
<TABLE>
<CAPTION>
Total Government
Return Advantage Securities
Account Account Account
______________ ______________ ______________
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends $265,808 $243,949 $50,921
Capital gains distributions 63,634 1,219 27,115
Expenses (Note 2):
Annual contract charges (737) (174) (18)
Administrative charges (8,853) (2,721) (1,074)
Mortality and expense
risk charges (73,376) (22,550) (8,900)
______________ ______________ ______________
Net investment income 246,476 219,723 68,044
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 4)
Net realized gain on
investments 6,083 15,065 57,031
Net unrealized appreciation
(depreciation) of
investments 1,034,214 (96,273) (20,436)
______________ ______________ ______________
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,286,773 $138,515 $104,639
============== ============== ==============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
EQUI-SELECT PRODUCT
For the year ended December 31, 1995
<TABLE>
<CAPTION>
International Short-Term
Stock Bond
Account Account
______________ ______________
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends $93,741 $26,296
Capital gains distributions 134,583 3,120
Expenses (Note 2):
Annual contract charges (433) (29)
Administrative charges (4,069) (466)
Mortality and expense
risk charges (33,726) (3,860)
______________ ______________
Net investment income 190,096 25,061
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 4)
Net realized gain on
investments 9,684 11,985
Net unrealized appreciation
(depreciation) of
investments 79,172 (9,796)
______________ ______________
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $278,952 $27,250
============== ==============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
EQUI-SELECT PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the year ended December 31, 1995
<TABLE>
<CAPTION>
Money
Market
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $1,504
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
______________
Net increase (decrease) in net assets resulting from operations 1,504
Changes from principal transactions:
Purchase payments 947,439
Contract distributions and terminations --
Transfer payments from (to) other Accounts (603,444)
______________
Increase in net assets derived from principal transactions 343,995
______________
Total increase 345,499
______________
NET ASSETS AT DECEMBER 31, 1994 345,499
INCREASE IN NET ASSETS
Operations:
Net investment income 125,935
Net realized gain on investments --
Net unrealized appreciation (depreciation) of investments --
______________
Net increase in net assets resulting from operations 125,935
Changes from principal transactions:
Purchase payments 30,141,356
Contract distributions and terminations (18,210)
Transfer payments from (to) other Accounts (22,930,581)
Transfer payments from (to) Fixed Account and other Funds (1,931,778)
______________
Increase in net assets derived from principal transactions 5,260,787
______________
Total increase 5,386,722
______________
NET ASSETS AT DECEMBER 31, 1995 $5,732,221
==============
<FN>
* Commencement of operations
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
EQUI-SELECT PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the year ended December 31, 1995
<TABLE>
<CAPTION>
Mortgage-
Backed
Securities
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $414
Net realized gain (loss) on investments 3
Net unrealized appreciation (depreciation) of investments (329)
______________
Net increase (decrease) in net assets resulting from operations 88
Changes from principal transactions:
Purchase payments 8,983
Contract distributions and terminations --
Transfer payments from (to) other Accounts 19,751
______________
Increase in net assets derived from principal transactions 28,734
______________
Total increase 28,822
______________
NET ASSETS AT DECEMBER 31, 1994 28,822
INCREASE IN NET ASSETS
Operations:
Net investment income 216,981
Net realized gain on investments 994
Net unrealized appreciation (depreciation) of investments (77,915)
______________
Net increase in net assets resulting from operations 140,060
Changes from principal transactions:
Purchase payments 1,764,376
Contract distributions and terminations (7,691)
Transfer payments from (to) other Accounts 2,246,463
Transfer payments from (to) Fixed Account and other Funds 167,490
______________
Increase in net assets derived from principal transactions 4,170,638
______________
Total increase 4,310,698
______________
NET ASSETS AT DECEMBER 31, 1995 $4,339,520
==============
<FN>
* Commencement of operations
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
EQUI-SELECT PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the year ended December 31, 1995
<TABLE>
<CAPTION>
International
Fixed
Income
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $342
Net realized gain (loss) on investments 3
Net unrealized appreciation (depreciation) of investments (292)
______________
Net increase (decrease) in net assets resulting from operations 53
Changes from principal transactions:
Purchase payments 21,572
Contract distributions and terminations --
Transfer payments from (to) other Accounts 29,663
______________
Increase in net assets derived from principal transactions 51,235
______________
Total increase 51,288
______________
NET ASSETS AT DECEMBER 31, 1994 51,288
INCREASE IN NET ASSETS
Operations:
Net investment income 149,959
Net realized gain on investments 4,271
Net unrealized appreciation (depreciation) of investments 34,190
______________
Net increase in net assets resulting from operations 188,420
Changes from principal transactions:
Purchase payments 1,703,537
Contract distributions and terminations (6,355)
Transfer payments from (to) other Accounts 1,593,333
Transfer payments from (to) Fixed Account and other Funds 69,344
______________
Increase in net assets derived from principal transactions 3,359,859
______________
Total increase 3,548,279
______________
NET ASSETS AT DECEMBER 31, 1995 $3,599,567
==============
<FN>
* Commencement of operations
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
EQUI-SELECT PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the year ended December 31, 1995
<TABLE>
<CAPTION>
OTC
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($908)
Net realized gain (loss) on investments (66)
Net unrealized appreciation (depreciation) of investments 7,227
______________
Net increase (decrease) in net assets resulting from operations 6,253
Changes from principal transactions:
Purchase payments 585,144
Contract distributions and terminations --
Transfer payments from (to) other Accounts 68,709
______________
Increase in net assets derived from principal transactions 653,853
______________
Total increase 660,106
______________
NET ASSETS AT DECEMBER 31, 1994 660,106
INCREASE IN NET ASSETS
Operations:
Net investment income 933,058
Net realized gain on investments 36,066
Net unrealized appreciation (depreciation) of investments 20,313
______________
Net increase in net assets resulting from operations 989,437
Changes from principal transactions:
Purchase payments 4,028,128
Contract distributions and terminations (33,765)
Transfer payments from (to) other Accounts 4,236,805
Transfer payments from (to) Fixed Account and other Funds 155,986
______________
Increase in net assets derived from principal transactions 8,387,154
______________
Total increase 9,376,591
______________
NET ASSETS AT DECEMBER 31, 1995 $10,036,697
==============
<FN>
* Commencement of operations
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
EQUI-SELECT PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the year ended December 31, 1995
<TABLE>
<CAPTION>
Research
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $4,874
Net realized gain (loss) on investments (3)
Net unrealized appreciation (depreciation) of investments (20,124)
______________
Net increase (decrease) in net assets resulting from operations (15,253)
Changes from principal transactions:
Purchase payments 635,302
Contract distributions and terminations (50)
Transfer payments from (to) other Accounts 52,604
______________
Increase in net assets derived from principal transactions 687,856
______________
Total increase 672,603
______________
NET ASSETS AT DECEMBER 31, 1994 672,603
INCREASE IN NET ASSETS
Operations:
Net investment income 190,119
Net realized gain on investments 19,662
Net unrealized appreciation (depreciation) of investments 1,548,017
______________
Net increase in net assets resulting from operations 1,757,798
Changes from principal transactions:
Purchase payments 8,333,228
Contract distributions and terminations (32,130)
Transfer payments from (to) other Accounts 4,960,660
Transfer payments from (to) Fixed Account and other Funds 754,789
______________
Increase in net assets derived from principal transactions 14,016,547
______________
Total increase 15,774,345
______________
NET ASSETS AT DECEMBER 31, 1995 $16,446,948
==============
<FN>
* Commencement of operations
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
EQUI-SELECT PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the year ended December 31, 1995
<TABLE>
<CAPTION>
Total
Return
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,657
Net realized gain (loss) on investments (37)
Net unrealized appreciation (depreciation) of investments (2,441)
______________
Net increase (decrease) in net assets resulting from operations 179
Changes from principal transactions:
Purchase payments 198,999
Contract distributions and terminations --
Transfer payments from (to) other Accounts 125,747
______________
Increase in net assets derived from principal transactions 324,746
______________
Total increase 324,925
______________
NET ASSETS AT DECEMBER 31, 1994 324,925
INCREASE IN NET ASSETS
Operations:
Net investment income 246,476
Net realized gain on investments 6,083
Net unrealized appreciation (depreciation) of investments 1,034,214
______________
Net increase in net assets resulting from operations 1,286,773
Changes from principal transactions:
Purchase payments 7,285,539
Contract distributions and terminations (72,501)
Transfer payments from (to) other Accounts 6,787,996
Transfer payments from (to) Fixed Account and other Funds 209,110
______________
Increase in net assets derived from principal transactions 14,210,144
______________
Total increase 15,496,917
______________
NET ASSETS AT DECEMBER 31, 1995 $15,821,842
==============
<FN>
* Commencement of operations
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
EQUI-SELECT PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the year ended December 31, 1995
<TABLE>
<CAPTION>
Advantage
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $4,252
Net realized gain (loss) on investments 166
Net unrealized appreciation (depreciation) of investments (4,060)
______________
Net increase (decrease) in net assets resulting from operations 358
Changes from principal transactions:
Purchase payments 225,148
Contract distributions and terminations --
Transfer payments from (to) other Accounts 233,518
______________
Increase in net assets derived from principal transactions 458,666
______________
Total increase 459,024
______________
NET ASSETS AT DECEMBER 31, 1994 459,024
INCREASE IN NET ASSETS
Operations:
Net investment income 219,723
Net realized gain on investments 15,065
Net unrealized appreciation (depreciation) of investments (96,273)
______________
Net increase in net assets resulting from operations 138,515
Changes from principal transactions:
Purchase payments 1,956,116
Contract distributions and terminations (15,339)
Transfer payments from (to) other Accounts 1,159,684
Transfer payments from (to) Fixed Account and other Funds 46,237
______________
Increase in net assets derived from principal transactions 3,146,698
______________
Total increase 3,285,213
______________
NET ASSETS AT DECEMBER 31, 1995 $3,744,237
==============
<FN>
* Commencement of operations
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
EQUI-SELECT PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the year ended December 31, 1995
<TABLE>
<CAPTION>
Government
Securities
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $166
Net realized gain (loss) on investments 1
Net unrealized appreciation (depreciation) of investments (84)
______________
Net increase (decrease) in net assets resulting from operations 83
Changes from principal transactions:
Purchase payments 14,453
Contract distributions and terminations --
Transfer payments from (to) other Accounts (100)
______________
Increase in net assets derived from principal transactions 14,353
______________
Total increase 14,436
______________
NET ASSETS AT DECEMBER 31, 1994 14,436
INCREASE IN NET ASSETS
Operations:
Net investment income 68,044
Net realized gain on investments 57,031
Net unrealized appreciation (depreciation) of investments (20,436)
______________
Net increase in net assets resulting from operations 104,639
Changes from principal transactions:
Purchase payments 932,770
Contract distributions and terminations (17,843)
Transfer payments from (to) other Accounts (357,771)
Transfer payments from (to) Fixed Account and other Funds (14,897)
______________
Increase in net assets derived from principal transactions 542,259
______________
Total increase 646,898
______________
NET ASSETS AT DECEMBER 31, 1995 $661,334
==============
<FN>
* Commencement of operations
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
EQUI-SELECT PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the year ended December 31, 1995
<TABLE>
<CAPTION>
International
Stock
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $1,275
Net realized gain (loss) on investments (74)
Net unrealized appreciation (depreciation) of investments (877)
______________
Net increase (decrease) in net assets resulting from operations 324
Changes from principal transactions:
Purchase payments 159,544
Contract distributions and terminations (50)
Transfer payments from (to) other Accounts 73,652
______________
Increase in net assets derived from principal transactions 233,146
______________
Total increase 233,470
______________
NET ASSETS AT DECEMBER 31, 1994 233,470
INCREASE IN NET ASSETS
Operations:
Net investment income 190,096
Net realized gain on investments 9,684
Net unrealized appreciation (depreciation) of investments 79,172
______________
Net increase in net assets resulting from operations 278,952
Changes from principal transactions:
Purchase payments 2,770,444
Contract distributions and terminations (57,092)
Transfer payments from (to) other Accounts 2,444,365
Transfer payments from (to) Fixed Account and other Funds 48,631
______________
Increase in net assets derived from principal transactions 5,206,348
______________
Total increase 5,485,300
______________
NET ASSETS AT DECEMBER 31, 1995 $5,718,770
==============
<FN>
* Commencement of operations
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
EQUI-SELECT PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the year ended December 31, 1995
<TABLE>
<CAPTION>
Short-Term
Bond
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $129
Net realized gain (loss) on investments 2
Net unrealized appreciation (depreciation) of investments (127)
______________
Net increase (decrease) in net assets resulting from operations 4
Changes from principal transactions:
Purchase payments 11,675
Contract distributions and terminations --
Transfer payments from (to) other Accounts (100)
______________
Increase in net assets derived from principal transactions 11,575
______________
Total increase 11,579
______________
NET ASSETS AT DECEMBER 31, 1994 11,579
INCREASE IN NET ASSETS
Operations:
Net investment income 25,061
Net realized gain on investments 11,985
Net unrealized appreciation (depreciation) of investments (9,796)
______________
Net increase in net assets resulting from operations 27,250
Changes from principal transactions:
Purchase payments 431,525
Contract distributions and terminations (9,551)
Transfer payments from (to) other Accounts (140,954)
Transfer payments from (to) Fixed Account and other Funds 31,762
______________
Increase in net assets derived from principal transactions 312,782
______________
Total increase 340,032
______________
NET ASSETS AT DECEMBER 31, 1995 $351,611
==============
<FN>
* Commencement of operations
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
EQUI-SELECT PRODUCT
December 31, 1995
NOTE 1 - INVESTMENT AND ACCOUNTING POLICIES
Equitable Life Insurance Company of Iowa Separate Account A was organized by
Equitable Life Insurance Company of Iowa (the "Company") in accordance with
the provisions of Iowa Insurance laws and is a part of the total operations
of the Company. The assets and liabilities of the Equitable Life Insurance
Company of Iowa Separate Account A are clearly identified and distinguished
from the other assets and liabilities of the Company. Equitable Life Insurance
Company of Iowa Separate Account A commenced operations on October 7, 1994
with the initial sale of contract units to contract owners. Investments are
stated at the closing net asset values per share on December 31, 1995.
Equitable Life Insurance Company of Iowa Separate Account A consists of
fourteen investment accounts, ten of which (the Money Market, Mortgage-Backed
Securities, International Fixed Income, OTC, Research, Total Return, Advantage,
Government Securities, International Stock and Short-Term Bond) are invested
in specified portfolios of the Equi-Select Series Trust, an open-end series
management investment company under the Investment Company Act of 1940, as
directed by eligible contract owners. Activity in these ten investment
accounts is available to contract owners of the Equi-Select Variable Annuity
product. Effective September 22, 1995, contract owners could no longer
purchase or transfer funds to the Government Securities or Short-Term Bond
Accounts.
The remaining four investment accounts are invested in specified portfolios of
the Smith Barney/Travelers Series Fund Inc. These four investment accounts
and the Research Account, which invests in the Equi-Select Series Trust, are
available to contract owners of the PrimElite Variable Annuity product.
The financial statements included herein present only those investment
accounts available to contract owners of the Equi-Select Variable Annuity
product. The financial statements of the remaining investment accounts and
the Research Account available to contract owners of the PrimElite Variable
Annuity product are presented separately.
The average cost method is used to determine realized gains and losses.
Dividends are taken into income on an accrual basis as of the ex-dividend
date.
NOTE 2 - EXPENSES
The Company is compensated for mortality and expense risks and
administrative costs by a charge equivalent to an annual rate of 1.25%
and 0.15%, respectively, of the total net assets of each Account. These
charges amounted to $348,739 and $42,078, respectively, for the year
ended December 31, 1995 ($3,241 and $391, respectively, for the period
ended December 31, 1994).
An annual contract charge of $30 is deducted on each contract anniversary
prior to the maturity date, upon full withdrawal of a contract's value or
upon commencement of annuity payments if such withdrawal is made or annuity
payments commence on a date other than the contract anniversary. During
1995, annual contract charges amounted to $2,806. No annual contract
charges were assessed in 1994.
NOTE 2 - EXPENSES (continued)
A transfer charge computed as the lesser of 2% of the contract value
transferred or $25 will be imposed on each transfer between Accounts in
excess of twelve in any one calendar year. A withdrawal charge may be
imposed in the event of withdrawal of any portion of the contract value
or upon annuitization. The withdrawal charge is 8% of the amount withdrawn
prior to the first anniversary of the purchase payment and reduces by 1% at
each subsequent purchase payment anniversary.
NOTE 3 - FEDERAL INCOME TAXES
Operations of the Equitable Life Insurance Company of Iowa Separate
Account A form a part of the operations of the Company which is taxed as
a life insurance company under the Internal Revenue Code. Under current
law, no federal income taxes are payable with respect to operations of
Equitable Life Insurance Company of Iowa Separate Account A.
NOTE 4 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments
were as follows:
<TABLE>
<CAPTION>
Period From
Year Ended October 7, 1994 to
December 31, 1995 December 31, 1994
_________________________ _________________________
Purchases Sales Purchases Sales
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Money Market Portfolio $18,116,828 $12,751,952 $759,639 $415,821
Mortgage-Backed Securities
Portfolio 4,186,979 33,921 29,782 1,060
International Fixed
Income Portfolio 3,461,113 111,334 52,990 1,785
OTC Portfolio 8,736,489 410,391 654,619 1,662
Research Portfolio 14,168,762 230,594 687,042 69
Total Return Portfolio 14,267,685 137,651 325,895 1,348
Advantage Portfolio 3,718,744 592,976 535,350 76,801
Government Securities
Portfolio 1,537,791 1,005,281 14,453 108
International Stock
Portfolio 5,388,124 218,038 234,384 1,382
Short-Term Bond Portfolio 683,300 374,720 11,675 104
</TABLE>
NOTE 5 - SUMMARY OF CHANGES FROM UNIT TRANSACTIONS
Transactions in units were as follows:
<TABLE>
<CAPTION>
Period From
Year Ended October 7, 1994 to
December 31, 1995 December 31, 1994
_________________________ _________________________
Purchases Sales Purchases Sales
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Money Market Account 2,969,444 2,454,999 101,861 67,539
Mortgage-Backed Securities
Account 380,372 3,227 2,896 10
International Fixed
Income Account 309,796 3,205 5,135 37
OTC Account 705,565 9,749 63,781 --
Research Account 1,196,506 9,931 69,182 5
Total Return Account 1,315,204 35,745 33,106 --
Advantage Account 359,214 59,955 53,240 7,724
Government Securities
Account 224,515 169,685 1,438 10
International Stock
Account 535,682 17,774 23,667 5
Short-Term Bond Account 65,845 34,954 1,151 10
</TABLE>
NOTE 6 - NET ASSETS
Net assets at December 31, 1995 consisted of the following:
<TABLE>
<CAPTION>
Mortgage- International
Money Backed Fixed
Market Securities Income OTC
Account Account Account Account
____________ _____________ ____________ _____________
<S> <C> <C> <C> <C>
Unit transactions $5,708,819 $4,200,698 $3,415,456 $9,076,800
Accumulated net
investment income 23,402 217,066 150,213 932,357
Net unrealized appreciation
(depreciation) of
investments -- (78,244) 33,898 27,540
____________ _____________ ____________ _____________
$5,732,221 $4,339,520 $3,599,567 $10,036,697
============ ============= ============ =============
</TABLE>
<TABLE>
<CAPTION>
Total
Research Return Advantage
Account Account Account
____________ _____________ ____________
<S> <C> <C> <C>
Unit transactions $14,724,226 $14,542,050 $3,620,601
Accumulated net
investment income 194,829 248,019 223,969
Net unrealized appreciation
(depreciation) of
investments 1,527,893 1,031,773 (100,333)
____________ _____________ ____________
$16,446,948 $15,821,842 $3,744,237
============ ============= ============
</TABLE>
<TABLE>
<CAPTION>
Government International Short-Term
Securities Stock Bond
Account Account Account
____________ _____________ ____________
<S> <C> <C> <C>
Unit transactions $636,052 $5,450,703 $343,325
Accumulated net
investment income 45,802 189,772 18,209
Net unrealized appreciation
(depreciation) of
investments (20,520) 78,295 (9,923)
____________ _____________ ____________
$661,334 $5,718,770 $351,611
============ ============= ============
</TABLE>
Report of Independent Auditors
The Board of Directors
Equitable Life Insurance Company of Iowa
We have audited the accompanying statements of net assets of certain
accounts of Equitable Life Insurance Company of Iowa Separate Account
A (comprising, respectively, the Research, International Equity,
Income and Growth, High Income, and Money Market Accounts) as of
December 31, 1995, and the related statements of operations for the
period January 1, 1995 or commencement of operations through December
31, 1995, and the statements of changes in net assets for the period
from October 7, 1994 through December 31, 1994 and for the period
January 1, 1995 or commencement of operations through December 31,
1995. These financial statements are the responsibility of the
Account's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1995, by correspondence with the
transfer agent. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of certain
accounts of the Equitable Life Insurance Company of Iowa Separate
Account A at December 31, 1995, and the results of their operations
for the period January 1, 1995 or commencement of operations through
December 31, 1995 and the changes in their net assets for the period
from October 7, 1994 through December 31, 1994 and the period from
January 1, 1995 or commencement of operations through December 31,
1995 in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Des Moines, Iowa
February 7, 1996
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
PRIMELITE PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
Research
Account
____________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust
Equi-Select Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800) $16,172,693
Smith Barney/Travelers Series Fund Inc.
Smith Barney International Equity Portfolio,
167,157 shares at $10.68 per share (cost - $1,753,674)
Smith Barney/Travelers Series Fund Inc.
Smith Barney Income and Growth Portfolio,
276,435 shares at $12.86 per share (cost - $3,366,536)
Smith Barney/Travelers Series Fund Inc.
Smith Barney High Income Portfolio,
71,320 shares at $11.09 per share (cost - $791,011)
Smith Barney/Travelers Series Fund Inc.
Smith Barney Money Market Portfolio,
1,277,892 shares at $1.00 per share (cost - $1,277,892)
____________
TOTAL INVESTMENTS 16,172,693
Accrued investment income 274,255
____________
TOTAL NET ASSETS $16,446,948
============
NET ASSETS REPRESENTED BY:
Units 1,255,752
Unit Value 13.10
____________
Net Assets $16,446,948
============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
PRIMELITE PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
International
Equity
Account
______________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust
Equi-Select Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Smith Barney/Travelers Series Fund Inc.
Smith Barney International Equity Portfolio,
167,157 shares at $10.68 per share (cost - $1,753,674) $1,785,234
Smith Barney/Travelers Series Fund Inc.
Smith Barney Income and Growth Portfolio,
276,435 shares at $12.86 per share (cost - $3,366,536)
Smith Barney/Travelers Series Fund Inc.
Smith Barney High Income Portfolio,
71,320 shares at $11.09 per share (cost - $791,011)
Smith Barney/Travelers Series Fund Inc.
Smith Barney Money Market Portfolio,
1,277,892 shares at $1.00 per share (cost - $1,277,892)
______________
TOTAL INVESTMENTS 1,785,234
Accrued investment income --
______________
TOTAL NET ASSETS $1,785,234
==============
NET ASSETS REPRESENTED BY:
Units 154,388
Unit Value 11.56
______________
Net Assets $1,785,234
==============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
PRIMELITE PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
Income and
Growth
Account
______________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust
Equi-Select Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Smith Barney/Travelers Series Fund Inc.
Smith Barney International Equity Portfolio,
167,157 shares at $10.68 per share (cost - $1,753,674)
Smith Barney/Travelers Series Fund Inc.
Smith Barney Income and Growth Portfolio,
276,435 shares at $12.86 per share (cost - $3,366,536) $3,554,954
Smith Barney/Travelers Series Fund Inc.
Smith Barney High Income Portfolio,
71,320 shares at $11.09 per share (cost - $791,011)
Smith Barney/Travelers Series Fund Inc.
Smith Barney Money Market Portfolio,
1,277,892 shares at $1.00 per share (cost - $1,277,892)
______________
TOTAL INVESTMENTS 3,554,954
Accrued investment income --
______________
TOTAL NET ASSETS $3,554,954
==============
NET ASSETS REPRESENTED BY:
Units 295,134
Unit Value 12.05
______________
Net Assets $3,554,954
==============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
PRIMELITE PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
High
Income
Account
______________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust
Equi-Select Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Smith Barney/Travelers Series Fund Inc.
Smith Barney International Equity Portfolio,
167,157 shares at $10.68 per share (cost - $1,753,674)
Smith Barney/Travelers Series Fund Inc.
Smith Barney Income and Growth Portfolio,
276,435 shares at $12.86 per share (cost - $3,366,536)
Smith Barney/Travelers Series Fund Inc.
Smith Barney High Income Portfolio,
71,320 shares at $11.09 per share (cost - $791,011) $790,940
Smith Barney/Travelers Series Fund Inc.
Smith Barney Money Market Portfolio,
1,277,892 shares at $1.00 per share (cost - $1,277,892)
______________
TOTAL INVESTMENTS 790,940
Accrued investment income --
______________
TOTAL NET ASSETS $790,940
==============
NET ASSETS REPRESENTED BY:
Units 72,283
Unit Value 10.94
______________
Net Assets $790,940
==============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
PRIMELITE PRODUCT
December 31, 1995
<TABLE>
<CAPTION>
Money
Market
Account
______________
<S> <C>
ASSETS
Investments at net asset value:
Equi-Select Series Trust
Equi-Select Research Portfolio,
1,255,727 shares at $12.88 per share (cost - $14,644,800)
Smith Barney/Travelers Series Fund Inc.
Smith Barney International Equity Portfolio,
167,157 shares at $10.68 per share (cost - $1,753,674)
Smith Barney/Travelers Series Fund Inc.
Smith Barney Income and Growth Portfolio,
276,435 shares at $12.86 per share (cost - $3,366,536)
Smith Barney/Travelers Series Fund Inc.
Smith Barney High Income Portfolio,
71,320 shares at $11.09 per share (cost - $791,011)
Smith Barney/Travelers Series Fund Inc.
Smith Barney Money Market Portfolio,
1,277,892 shares at $1.00 per share (cost - $1,277,892) $1,277,892
______________
TOTAL INVESTMENTS 1,277,892
Accrued investment income 1,633
______________
TOTAL NET ASSETS $1,279,525
==============
NET ASSETS REPRESENTED BY:
Units 125,048
Unit Value 10.23
______________
Net Assets $1,279,525
==============
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
PRIMELITE PRODUCT
For the period January 1, 1995 or Commencement of Operations*
through December 31, 1995
<TABLE>
<CAPTION>
International Income
Research Equity and Growth
Account Account Account
______________ ______________ ______________
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS)
Income:
Dividends $39,906 $2,011 $46,777
Capital gains distributions 234,349 -- 12,711
Expenses (Note 2):
Annual contract charges (558) -- --
Administrative charges (8,999) (620) (1,381)
Mortality and expense
risk charges (74,579) (5,135) (11,442)
______________ ______________ ______________
Net investment income (loss) 190,119 (3,744) 46,665
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 4)
Net realized gain (loss) on
investments 19,662 (4) 106
Net unrealized appreciation
(depreciation) of
investments 1,548,017 31,560 188,418
______________ ______________ ______________
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,757,798 $27,812 $235,189
============== ============== ==============
<FN>
*Commencement of operations - see Note 1
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
PRIMELITE PRODUCT
For the period January 1, 1995 or Commencement of Operations*
through December 31, 1995
<TABLE>
<CAPTION>
High Money
Income Market
Account Account
______________ ______________
<S> <C> <C>
INVESTMENT INCOME (LOSS)
Income:
Dividends $33,656 $12,980
Capital gains distributions -- --
Expenses (Note 2):
Annual contract charges -- --
Administrative charges (298) (364)
Mortality and expense
risk charges (2,475) (3,016)
______________ ______________
Net investment income (loss) 30,883 9,600
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 4)
Net realized gain (loss) on
investments 20 --
Net unrealized appreciation
(depreciation) of
investments (71) --
______________ ______________
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $30,832 $9,600
============== ==============
<FN>
*Commencement of operations - see Note 1
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
PRIMELITE PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the period from January 1, 1995 or Commencement of Operations*
through December 31, 1995
<TABLE>
<CAPTION>
Research
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income $4,874
Net realized loss on investments (3)
Net unrealized depreciation of investments (20,124)
______________
Net decrease in net assets resulting from operations (15,253)
Changes from principal transactions:
Purchase payments 635,302
Contract distributions and terminations (50)
Transfer payments from other Accounts 52,604
______________
Increase in net assets derived from principal transactions 687,856
______________
Total increase 672,603
______________
NET ASSETS AT DECEMBER 31, 1994 672,603
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) 190,119
Net realized gain (loss) on investments 19,662
Net unrealized appreciation (depreciation) of investments 1,548,017
______________
Net increase in net assets resulting from operations 1,757,798
Changes from principal transactions:
Purchase payments 8,333,228
Contract distributions and terminations (32,130)
Transfer payments from (to) other Accounts 588,563
Transfer payments from (to) Fixed Account and other Funds 5,126,886
______________
Increase in net assets derived from principal transactions 14,016,547
______________
Total increase 15,774,345
______________
NET ASSETS AT DECEMBER 31, 1995 $16,446,948
==============
<FN>
*Commencement of operations - see Note 1
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
PRIMELITE PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the period from January 1, 1995 or Commencement of Operations*
through December 31, 1995
<TABLE>
<CAPTION>
International
Equity
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income --
Net realized loss on investments --
Net unrealized depreciation of investments --
______________
Net decrease in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from other Accounts --
______________
Increase in net assets derived from principal transactions --
______________
Total increase --
______________
NET ASSETS AT DECEMBER 31, 1994 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($3,744)
Net realized gain (loss) on investments (4)
Net unrealized appreciation (depreciation) of investments 31,560
______________
Net increase in net assets resulting from operations 27,812
Changes from principal transactions:
Purchase payments 1,444,691
Contract distributions and terminations --
Transfer payments from (to) other Accounts 300,075
Transfer payments from (to) Fixed Account and other Funds 12,656
______________
Increase in net assets derived from principal transactions 1,757,422
______________
Total increase 1,785,234
______________
NET ASSETS AT DECEMBER 31, 1995 $1,785,234
==============
<FN>
*Commencement of operations - see Note 1
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
PRIMELITE PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the period from January 1, 1995 or Commencement of Operations*
through December 31, 1995
<TABLE>
<CAPTION>
Income
and Growth
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income --
Net realized loss on investments --
Net unrealized depreciation of investments --
______________
Net decrease in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from other Accounts --
______________
Increase in net assets derived from principal transactions --
______________
Total increase --
______________
NET ASSETS AT DECEMBER 31, 1994 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $46,665
Net realized gain (loss) on investments 106
Net unrealized appreciation (depreciation) of investments 188,418
______________
Net increase in net assets resulting from operations 235,189
Changes from principal transactions:
Purchase payments 2,609,690
Contract distributions and terminations (77)
Transfer payments from (to) other Accounts 697,496
Transfer payments from (to) Fixed Account and other Funds 12,656
______________
Increase in net assets derived from principal transactions 3,319,765
______________
Total increase 3,554,954
______________
NET ASSETS AT DECEMBER 31, 1995 $3,554,954
==============
<FN>
*Commencement of operations - see Note 1
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
PRIMELITE PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the period from January 1, 1995 or Commencement of Operations*
through December 31, 1995
<TABLE>
<CAPTION>
High
Income
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income --
Net realized loss on investments --
Net unrealized depreciation of investments --
______________
Net decrease in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from other Accounts --
______________
Increase in net assets derived from principal transactions --
______________
Total increase --
______________
NET ASSETS AT DECEMBER 31, 1994 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $30,883
Net realized gain (loss) on investments 20
Net unrealized appreciation (depreciation) of investments (71)
______________
Net increase in net assets resulting from operations 30,832
Changes from principal transactions:
Purchase payments 672,913
Contract distributions and terminations (1,611)
Transfer payments from (to) other Accounts 76,650
Transfer payments from (to) Fixed Account and other Funds 12,156
______________
Increase in net assets derived from principal transactions 760,108
______________
Total increase 790,940
______________
NET ASSETS AT DECEMBER 31, 1995 $790,940
==============
<FN>
*Commencement of operations - see Note 1
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
PRIMELITE PRODUCT
For the period from October 7, 1994* through December 31, 1994
and for the period from January 1, 1995 or Commencement of Operations*
through December 31, 1995
<TABLE>
<CAPTION>
Money
Market
Account
______________
<S> <C>
NET ASSETS AT OCTOBER 7, 1994* --
INCREASE IN NET ASSETS
Operations:
Net investment income --
Net realized loss on investments --
Net unrealized depreciation of investments --
______________
Net in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from other Accounts --
______________
Increase in net assets derived from principal transactions --
______________
Total increase --
______________
NET ASSETS AT DECEMBER 31, 1994 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $9,600
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
______________
Net increase in net assets resulting from operations 9,600
Changes from principal transactions:
Purchase payments 3,007,403
Contract distributions and terminations (13,913)
Transfer payments from (to) other Accounts (1,662,784)
Transfer payments from (to) Fixed Account and other Funds (60,781)
______________
Increase in net assets derived from principal transactions 1,269,925
______________
Total increase 1,279,525
______________
NET ASSETS AT DECEMBER 31, 1995 $1,279,525
==============
<FN>
*Commencement of operations - see Note 1
</TABLE>
See accompanying notes.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
PRIMELITE PRODUCT
December 31, 1995
NOTE 1 - INVESTMENT AND ACCOUNTING POLICIES
Equitable Life Insurance Company of Iowa Separate Account A was
organized by Equitable Life Insurance Company of Iowa (the
"Company") in accordance with the provisions of Iowa Insurance
laws and is a part of the total operations of the Company. The
assets and liabilities of the Equitable Life Insurance Company of
Iowa Separate Account A are clearly identified and distinguished
from the other assets and liabilities of the Company.
Commencement of operations is defined as the date of initial sale
of contract units to contract owners. The Equitable Life
Insurance Company of Iowa Separate Account A investment accounts
commenced operations on October 7, 1994 for the Research Account,
March 27, 1995 for the International Equity Account, April 5,
1995 for the Income and Growth Account, April 28, 1995 for the
High Income Account, and May 24, 1995 for the Money Market
Account. Investments are stated at the closing net asset values
per share on December 31, 1995.
Equitable Life Insurance Company of Iowa Separate Account A
consists of fourteen investment accounts, four of which
(International Equity, Income and Growth, High Income, and Money
Market), as directed by eligible contract owners, are invested in
specified portfolios of the Smith Barney/Travelers Series Fund
Inc., an open-end management investment company under the
Investment Company Act of 1940, which commenced operations on
June 16, 1994. Activity in these four investment accounts, as
well as the Research Account, which invests in the Equi-Select
Series Trust, is available to contract owners of the PrimElite
Variable Annuity Product.
The remaining ten investment accounts (including the Research
Account) are invested in specified portfolios of the Equi-Select
Series Trust, which commenced operations on October 4, 1994.
These ten investment accounts are available to contract owners of
the Equi-Select Variable Annuity product.
The financial statements included herein present only those
investment accounts available to contract owners of the PrimElite
Variable Annuity product. The financial statements of the
remaining investment accounts available to contract owners of the
Equi-Select Variable Annuity product are presented separately.
The average cost method is used to determine realized gains and
losses. Dividends are taken into income on an accrual basis as
of the ex-dividend date.
NOTE 2 - EXPENSES
The Company is compensated for mortality and expense risks and
administrative costs by a charge equivalent to an annual rate of
1.25% and 0.15%, respectively, of the total net assets of each
Account. These charges amounted to $96,647 and $11,662,
respectively, during 1995 ($980 and $118, respectively in 1994).
NOTE 2 - EXPENSES (continued)
An annual contract charge of $30 is deducted on each contract
anniversary prior to the maturity date, upon full withdrawal of a
contract's value or upon commencement of annuity payments if such
withdrawal is made or annuity payments commence on a date other
than the contract anniversary. During 1995, annual contract
charges amounted to $558. No annual contract charges were
assessed in 1994.
A transfer charge computed as the lesser of 2% of the contract
value transferred or $25 will be imposed on each transfer between
Accounts in excess of twelve in any one calendar year. A
withdrawal charge may be imposed in the event of withdrawal of
any portion of the contract value or upon annuitization. The
withdrawal charge is 8% of the amount withdrawn prior to the
first anniversary of the purchase payment and reduces by 1% at
each subsequent purchase payment anniversary.
NOTE 3 - FEDERAL INCOME TAXES
Operations of the Equitable Life Insurance Company of Iowa
Separate Account A form a part of the operations of the Company
which is taxed as a life insurance company under the Internal
Revenue Code. Under current law, no federal income taxes are
payable with respect to operations of Equitable Life Insurance
Company of Iowa Separate Account A.
NOTE 4 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of
investments were as follows:
<TABLE>
<CAPTION>
Period From
January 1, 1995 or
Commencement of Period From
Operations October 7, 1994 to
to December 31, 1995 December 31, 1994
_________________________ _________________________
Purchases Sales Purchases Sales
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Research Portfolio $14,168,762 $230,594 $687,042 $69
International Equity
Portfolio 1,754,791 1,113 -- --
Income and Growth Portfolio 3,373,110 6,680 -- --
High Income Portfolio 792,963 1,972 -- --
Money Market Portfolio 2,614,578 1,336,686 -- --
</TABLE>
NOTE 5 - SUMMARY OF CHANGES FROM UNIT TRANSACTIONS
Transactions in units were as follows:
<TABLE>
<CAPTION>
Period From
January 1, 1995 or
Commencement of Period From
Operations October 7, 1994 to
to December 31, 1995 December 31, 1994
_________________________ _________________________
Purchases Sales Purchases Sales
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Research Account 1,196,506 9,931 69,182 5
International Equity Account 154,388 -- -- --
Income and Growth Account 295,140 6 -- --
High Income Account 72,433 150 -- --
Money Market Account 295,977 170,929 -- --
</TABLE>
NOTE 6 - NET ASSETS
Net assets at December 31, 1995 consisted of the following:
<TABLE>
<CAPTION>
International Income
Research Equity and Growth
Account Account Account
______________ ______________ ______________
<S> <C> <C> <C>
Unit transactions $14,724,226 $1,757,418 $3,319,871
Accumulated net
investment income (loss) 194,829 (3,744) 46,665
Net unrealized appreciation
(depreciation) of
investments 1,527,893 31,560 188,418
______________ ______________ ______________
$16,446,948 $1,785,234 $3,554,954
============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
High Money
Income Market
Account Account
______________ ______________
<S> <C> <C>
Unit transactions $760,190 $1,275,454
Accumulated net
investment income (loss) 30,821 4,071
Net unrealized appreciation
(depreciation) of
investments (71) --
______________ ______________
$790,940 $1,279,525
============== ==============
</TABLE>
PART C
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
A. FINANCIAL STATEMENTS
The following financial statements of the Company are included in Part B
hereof:
Audited Consolidated Financial Statements:
1. Report of Independent Auditors
2. Consolidated Balance Sheets - as of December 31, 1995 and 1994.
3. Consolidated Statements of Income - for the years ended December 31,
1995, 1994 and 1993.
4. Consolidated Statements of Changes in Stockholder's Equity - for
the years ended December 31, 1995, 1994 and 1993.
5. Consolidated Statements of Cash Flows - for the years ended December
31, 1995, 1994 and 1993.
6. Notes to Consolidated Financial Statements - December 31, 1995.
Schedules to Consolidated Financial Statements - December 31, 1995:
Schedule I - Summary of Investments Other Than Investment in
Related Parties
Schedule III - Supplementary Insurance Information
Schedule IV - Reinsurance
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable and therefore have been omitted.
The following financial statements of the Separate Account are included in
Part B hereof:
Audited Financial Statements:
1. Statements of Net Assets - Equi-Select Product - December 31, 1995.
2. Statements of Operations - Equi-Select Product - For the year ended
December 31, 1995.
3. Statements of Changes in Net Assets - Equi-Select Product - For the
period from October 7, 1994 through December 31, 1994 and for the year ended
December 31, 1995.
4. Notes to Financial Statements - Equi-Select Product - December 31,
1995.
5. Statements of Net Assets - PrimElite Product - December 31, 1995.
6. Statements of Operations - PrimElite Product - For the period
January 1, 1995 or Commencement of Operations through December 31, 1995.
7. Statements of Changes in Net Assets - PrimElite Product - For the
period from October 7, 1994 through December 31, 1994 and for the period
from January 1, 1995 or Commencement of Operations through December 31, 1995.
8. Notes to Financial Statements - PrimElite Product - December 31, 1995.
B. EXHIBITS
1. Resolution of Board of Directors of the Company authorizing the
establishment of the Separate Account.
2. Not Applicable.
3. Principal Underwriter's Agreement dated October 1, 1994 between
Equitable Life Insurance Company of Iowa on behalf of the Registrant and
Equitable of Iowa Securities Network, Inc.
4. Individual Flexible Purchase Payment Deferred Variable Annuity
Contract.
5. Application Form.
6. (i) Copy of Restated Articles of Incorporation of the Company.*
(ii) Copy of the Restated Bylaws of the Company.*
7. Not Applicable.
8. Form of Fund Participation Agreement between the Company and
Smith Barney/Travelers Series Fund, Inc.*
9. Opinion and Consent of Counsel.*
10. Consent of Independent Auditors.
11. Not Applicable.
12. (i) Agreement Governing Initial Contribution to Equi-Select Series
Trust by Equitable Life Insurance Company of Iowa dated September
15, 1994.
(ii) Agreement Governing Contribution of Working Capital to Equi-Select
Series Trust by Equitable Life Insurance Company of Iowa dated
October 4, 1994.
(iii) Agreement Governing Initial Contribution to Equi-Select Series
Trust by Equitable Life Insurance Company of Iowa dated March 20,
1996.
(iv) Agreement Governing Contribution of Working Capital to Equi-Select
Series Trust by Equitable Life Insurance Company of Iowa dated
April 1, 1996.
13. Calculation of Performance Information.
14. Company Organizational Chart.
27. Financial Data Schedules
* Incorporated by reference to Registrant's Post-Effective Amendment No. 3 as
filed electronically on February 9, 1996.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
The following are the Executive Officers and Directors of the Company:
<TABLE>
<CAPTION>
<S> <C>
Name and Principal Position and Offices
Business Address with Depositor
- ------------------------ -----------------------------------------
Frederick S. Hubbell President, Chairman of the Board, Chief
604 Locust Street Executive Officer and Director
Des Moines, Iowa 50309
Susan M. Jordan Vice President and Chief Information
604 Locust Street Officer and Director
Des Moines, Iowa 50309
Paul E. Larson Executive Vice President, Chief Financial
604 Locust Street Officer, Assistant Secretary and Director
Des Moines, Iowa 50309
Doug Lourens Assistant Vice President, Corporate
604 Locust Street Actuary and Assistant Secretary
Des Moines, Iowa 50309
Beth B. Neppl Vice President -
604 Locust Street Human Resources and Director
Des Moines, Iowa 50309
Dennis D. Hargens Treasurer
604 Locust Street
Des Moines, Iowa 50309
Paul R. Schlaack Director
604 Locust Street
Des Moines, Iowa 50309
John A. Merriman General Counsel, Secretary
604 Locust Street and Director
Des Moines, Iowa 50309
David A. Terwilliger Vice President, Controller, Assistant
604 Locust Street Treasurer and Assistant Secretary
Des Moines, Iowa 50309
Arthur E. Kent Senior Vice President - Sales and
604 Locust Street Marketing
Des Moines, Iowa 50309
Lawrence V. Durland, Jr. Senior Vice President, Assistant
604 Locust Street Secretary and Director
Des Moines, Iowa 50309
Thomas L. May Senior Vice President - Sales and
604 Locust Street Marketing and Director
Des Moines, Iowa 50309
</TABLE>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The Company organizational chart is incorporated by reference to Registrant's
Registration Statement (Exhibit 14) as filed on May 18, 1994.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of March 1, 1996, there were 1,806 Qualified Contract Owners and 1,620
Non-Qualified Contract Owners.
ITEM 28. INDEMNIFICATION
The Restated Articles of Incorporation of the Company (Article VII) provide,
in part, that:
Section 1. In the manner and to the fullest extent permitted by the Iowa
Business Corporation Act as the same now exists or may hereafter be amended,
the Corporation shall indemnify directors, officers, employees and agents and
shall pay or reimburse them for reasonable expenses in any proceeding to which
said person is or was a party.
Section 2. A director of this Corporation shall not be personally liable to
the Corporation or its shareholders for monetary damages for breach of
fiduciary duty as a Director, except for liability (i) for any breach of any
duty of the Director of loyalty to the Corporation or its shareholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for any transaction from which
the Director derived an improper personal benefit, or (iv) under Section
490.833 of the Iowa Business Corporation Act for assenting to or voting for an
unlawful distribution. If Chapter 490 of the Code of Iowa, is subsequently
amended to authorize corporate action further eliminating or limiting personal
liability of directors, then the liability of a director to the Corporation
shall be eliminated or limited to the fullest extent permitted by Chapter 490
of the Code of Iowa, as so amended. Any repeal or modification of the
provisions of this Article shall not adversely affect any right or protection
of a director of the Corporation existing at the time of such repeal or
modification.
The Restated Bylaws of the Company (Article VI, Section 2) provide that:
Any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceedings, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or enterprise, shall be
indemnified to the following extent and under the following circumstances:
(a) In an action, suit or proceeding other than an action by or in the
right of the Corporation, such person shall be indemnified against expenses
(including attorney's fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and in a manner he reasonably believed
to be in the best interests of the Corporation, in the case of conduct in his
official capacity with the Corporation, or, in all other cases, at least not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, if he had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding
judgment, order, settlement, conviction or upon a plea of nolo contendere or
its equivalent shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(b) In an action, suit or proceedings by or in the right of the
Corporation, notwithstanding any provision precluding liability in the
Articles of Incorporation, such person shall nonetheless be indemnified
against expenses (including attorney's fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in the
best interests of the Corporation, in the case of conduct in his official
capacity with the Corporation, or, in all other cases, at least not opposed to
the best interests of the Corporation, except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the Corporation unless and only to the extent that
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability, but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted directors and officers or controlling persons of the
Company pursuant to the foregoing, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Not Applicable.
(b) Equitable of Iowa Securities Network, Inc. ("Securities Network") is the
principal underwriter for the Contracts. The following persons are the
officers and directors of Securities Network. The principal business address
for each officer and director of Securities Network is 604 Locust Street, Des
Moines, Iowa 50309.
<TABLE>
<CAPTION>
<S> <C>
Name and Principal Positions and Offices
Business Address with Underwriter
- ------------------------ -------------------------------------
William L. Lowe President
Lawrence V. Durland, Jr. Director
Frederick S. Hubbell Director
Paul E. Larson Director
Edward J. Berkson Vice President
Thomas L. May Director
John A. Merriman Director and Secretary
Paul R. Schlaack Director
Merlyn P. Schwickerath Treasurer
Susan M. Jordan Director
Beth B. Neppl Director
Teresa J. Christenson Vice President and Compliance Officer
</TABLE>
(c) Not Applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
David A. Terwilliger, Vice President and Controller, whose address is 604
Locust Street, Des Moines, Iowa 50309, maintains physical possession of the
accounts, books or documents of the Separate Account required to be maintained
by Section 31(a) of the Investment Company Act of 1940 and the rules
promulgated thereunder.
ITEM 31. MANAGEMENT SERVICES
Not Applicable.
ITEM 32. UNDERTAKINGS
a. Registrant hereby undertakes to file a post-effective amendment to
this registration statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are never more than
sixteen (16) months old for so long as payment under the variable annuity
contracts may be accepted.
b. Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
postcard or similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information.
c. Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statement required to be made available under
this Form promptly upon written or oral request.
REPRESENTATIONS
The Company hereby represents that it is relying upon a No-Action Letter
issued to the American Council of Life Insurance dated November 28, 1988
(Commission ref. IP-6-88) and that the following provisions have been complied
with:
1. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in each registration statement, including the
prospectus, used in connection with the offer of the contract;
2. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in any sales literature used in connection with
the offer of the contract;
3. Instruct sales representatives who solicit participants to purchase
the contract specifically to bring the redemption restrictions imposed by
Section 403(b)(11) to the attention of the potential participants;
4. Obtain from each plan participant who purchases a Section 403(b)
annuity contract, prior to or at the time of such purchase, a signed statement
acknowledging the participant's understanding of (1) the restrictions on
redemption imposed by Section 403(b)(11), and (2) other investment
alternatives available under the employer's Section 403(b) arrangement to
which the participant may elect to transfer his contract value.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities
Act Rule 485(b) for effectiveness of this Registration Statement and has
caused this Registration Statement to be signed on its behalf, in the City of
Des Moines, and State of Iowa on this 28th day of March, 1996.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
Registrant
By: EQUITABLE LIFE INSURANCE COMPANY OF IOWA
By: /S/ FRED S. HUBBELL
___________________________________________
Fred S. Hubbell, Chairman of the Board and
Chief Executive Officer
By: EQUITABLE LIFE INSURANCE COMPANY OF IOWA
Depositor
By: /S/ FRED S. HUBBELL
___________________________________________
Fred S. Hubbell, Chairman of the Board and
Chief Executive Officer
As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
President, Chairman of the Board
/S/ FRED S. HUBBELL and Chief Executive Officer 3/28/96
- ------------------------- --------
Fred S. Hubbell and Director Date
Executive Vice President,
Paul E. Larson* Chief Financial Officer, 3/28/96
- ------------------------- --------
Paul E. Larson Assistant Secretary and Director Date
Senior Vice President -
Thomas L. May* Administration and Director 3/28/96
- ------------------------- --------
Thomas L. May Date
Paul R. Schlaack* Director 3/28/96
- ------------------------- --------
Paul R. Schlaack Date
General Counsel, Secretary
John A. Merriman* and Director 3/28/96
- ------------------------- --------
John A. Merriman Date
Senior Vice President,
Lawrence V. Durland, Jr.* Assistant Secretary and 3/28/96
- ------------------------- --------
Lawrence V. Durland, Jr. Director Date
Vice President and Chief
Susan M. Jordan* Information Officer and 3/28/96
- ------------------------- --------
Susan M. Jordan* Director Date
Vice President - Human
Beth B. Neppl* Resources and Director 3/28/96
- ------------------------- --------
Beth B. Neppl Date
</TABLE>
*By: /S/ FRED S. HUBBELL
-------------------------------------
Fred S. Hubbell, Attorney-in-Fact
EXHIBITS
TO
POST-EFFECTIVE AMENDMENT NO. 4
TO
FORM N-4
FOR
EQUITABLE LIFE INSURANCE COMPANY OF IOWA SEPARATE ACCOUNT A
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
INDEX TO EXHIBITS
EXHIBIT PAGE
99.B1 Resolution of Board of Directors of the Company authorizing the
establishment of the Separate Account
99.B3 Principal Underwriter's Agreement dated October 1, 1994, between
Equitable Life Insurance Company of Iowa on behalf of the
Registrant and Equitable of Iowa Securities Network, Inc.
99.B4 Individual Flexible Purchase Payment Deferred Variable Annuity
Contract
99.B5 Application Form
99.B10 Consent of Independent Auditors
99.B12(i) Agreement Governing Initial Contribution to Equi-Select Series
Trust by Equitable Life Insurance Company of Iowa dated
September 15, 1994
99.B12(ii) Agreement Governing Contribution of Working Capital to
Equi-Select Series Trust by Equitable Life Insurance Company
of Iowa dated October 4, 1994
99.B12(iii) Agreement Governing Initial Contribution to Equi-Select Series
Trust by Equitable Life Insurance Company of Iowa dated March 20,
1996
99.B12(iv) Agreement Governing Contribution of Working Capital to Equi-Select
Series Trust by Equitable Life Insurance Company of Iowa dated
April 1, 1996
99.B13 Calculation of Performance Information
99.B14 Company Organizational Chart
27 Financial Data Schedules
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
RESOLUTION
WHEREAS, Equitable Life Insurance Company of Iowa, (the "Company") is desirous
of developing and marketing certain types of variable and fixed annuity
contracts and variable life insurance contracts (the "Contracts") which may be
required to be registered with the Securities and Exchange Commission pursuant
to the various securities laws; and
WHEREAS, it will be necessary to take certain actions including, but not
limited to, establishing separate accounts for segregation of assets and
seeking approval of regulatory authorities;
NOW THEREFORE, BE IT RESOLVED, that the Company is hereby authorized to
develop the necessary program in order to effectuate the issuance and sale of
the Contracts; and further
RESOLVED, that the Company is hereby authorized to establish and to designate
one or more separate accounts of the Company in accordance with the provisions
of state insurance law. The purpose of any such separate account shall be to
provide an investment medium for the Contracts issued by the Company as may be
designated as participating therein. Any such separate account shall receive,
hold, invest and reinvest only the monies arising from (i) premiums,
contributions or payments made pursuant to the Contracts participating
therein; (ii) such assets of the Company as shall be deemed appropriate to be
invested in the same manner as the assets applicable to the Company's reserve
liability under the Contracts participating in such separate accounts or as
may be necessary for the establishment of such separate accounts; and (iii)
the dividends, interest and gains produced by the foregoing; and further
RESOLVED, that the President and Chief Executive Officer, Executive Vice
President, Senior Vice President, Secretary and Treasurer of the Company, or
any one of the foregoing individually, as appropriate, (the "Officers"), are
hereby authorized:
(i) to register the Contracts participating in any such separate
accounts under the provisions of the Securities Act of 1933, as amended, to
the extent that it shall be determined that such registration is necessary;
(ii) to register any such separate accounts with the Securities and
Exchange Commission under the provisions of the Investment Company Act of
1940, as amended, to the extent that it shall be determined that such
registration is necessary;
(iii) to prepare, execute and file such amendments to any registration
statements filed under the aforementioned Acts (including post-effective
amendments), supplements and exhibits thereto as they may be deemed necessary
or desirable;
(iv) to apply for exemption from those provisions of the aforementioned
Acts as shall be deemed necessary and to take any and all other actions which
shall be deemed necessary, desirable, or appropriate in connection with such
Acts;
(v) to file the Contracts participating in any such separate accounts
with the appropriate state insurance departments and to prepare and execute
all necessary documents to obtain approval of the insurance departments;
(vi) to prepare or have prepared and execute all necessary documents to
obtain approval of, or clearance with, or other appropriate actions required,
of any other regulatory authority that may be necessary; and further
RESOLVED, that for the purposes of facilitating the execution and filing of
any registration statement and of remedying any deficiencies therein by
appropriate amendments (including post-effective amendments) or supplements
thereto, the Officers, and each of them individually, are hereby designated as
attorneys and agents of the Company; and the appropriate officers of the
Company be, and they hereby are, authorized and directed to grant the power of
attorney of the Company to the Officers as necessary by executing and
delivering to such individuals, on behalf of the Company, a power of attorney;
and further
RESOLVED, that in connection with the offering and sale of the Contracts in
the various States of the United States, as and to the extent necessary, the
officers of the Company be, and they hereby are, authorized to take any and
all such action, including but not limited to the preparation, execution and
filing with proper State authorities, on behalf of and in the name of the
Company, of such applications, notices, certificates, affidavits, powers of
attorney, consents to service of process, issuer's covenants, certified copies
of minutes of shareholders' and directors' meetings, bonds, escrow and
impounding agreements and other writings and instruments, as may be required
in order to render permissible the offering and sale of the Contracts in such
jurisdictions; and further
RESOLVED, that the forms of any resolutions required by any State authority to
be filed in connection with any of the documents or instruments referred to in
any of the preceding resolutions be, and the same hereby are, adopted as if
fully set forth herein if (1) in the opinion of the Officers of the Company,
the adoption of the resolutions is advisable and (2) the Secretary or any
Assistant Secretary of the Company evidences such adoption by inserting into
these minutes copies of such resolutions; and further
RESOLVED, that the officers of the Company, and each of them, are hereby
authorized to prepare and to execute the necessary documents and to take such
further actions as may be deemed necessary or appropriate, in their
discretion, to implement the purpose of these resolutions.
EXHIBIT 99.B3
PRINCIPAL UNDERWRITER'S AGREEMENT
This Agreement dated this 1st day of October, 1994 is by and between
Equitable Life Insurance Company of Iowa ("ELIC") on behalf of Equitable Life
Insurance Company of Iowa Separate Account A (the "Separate Account") and
Equitable of Iowa Securities Network, Inc. ("EISN") as follows:
WITNESSETH:
WHEREAS, ELIC is a life insurance company licensed to issue and sell
Individual Flexible Purchase Payment Deferred Variable and Fixed Annuity
Contracts (the "Contracts") of the Separate Account to the public through
EISN; and
WHEREAS, ELIC desires EISN to act as the principal underwriter of the
Contracts; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
SECTION 1. DESIGNATION OF PRINCIPAL UNDERWRITER. ELIC grants EISN the
exclusive right, during the term of this Agreement, subject to registration
requirements of the Securities Act of 1933 and the Investment Company Act of
1940 and the provisions of the Securities Exchange Act of 1934, to be the
distributor of the Contracts issued through the Separate Account. EISN will
sell the Contracts under such terms as set by ELIC and will make such sales to
purchasers permitted to buy such Contracts as specified in the prospectus.
SECTION 2. SERVICES BY EISN. EISN agrees to provide sales service subject to
the terms and conditions hereof. The Contracts to be sold are more fully
described in the registration statement and prospectus hereinafter mentioned.
Contracts to be issued by ELIC through the Separate Account.
SECTION 3. COMPENSATION OF EISN. EISN shall be compensated for its
distribution services in such amount as to meet all of its obligations to
selling broker-dealers with respect to all purchase payments accepted by ELIC
on the Contracts covered hereby.
SECTION 4. PROVISION OF SALES MATERIALS. On behalf of the Separate Account,
ELIC shall furnish EISN with copies of all prospectuses, financial statements
and other documents which EISN reasonably requests for use in connection with
the distribution of the Contracts. ELIC shall provide to EISN such number of
copies of the current effective prospectuses as EISN shall request.
SECTION 5. LIMITATION OF AUTHORITY. EISN is not authorized to give any
information, or to make any representations concerning the Contracts or the
Separate Account of ELIC other than those contained in the current
registration statements or prospectuses relating to the Separate Account filed
with the Securities and Exchange Commission or such sales literature as may be
authorized by ELIC.
SECTION 6. BOOKS AND RECORDS. Both parties to this Agreement agree to keep
the necessary books and records required by applicable state and federal law
and regulations and to render the necessary assistance to one another for the
accurate and timely preparation of such books and records.
SECTION 7. TERM OF AGREEMENT. This Agreement shall be effective upon the
execution hereof and will remain in effect unless terminated as hereinafter
provided. This Agreement shall automatically be terminated in the event of
its assignment by EISN. This Agreement may be terminated at any time by
either party hereto upon 60 days' written notice to the other party.
SECTION 8. NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been
given on the date of service if served personally on the party to whom notice
is to be given, or on the date of mailing if sent by First Class Mail,
Registered or Certified, postage prepaid and properly addressed.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed on their behalf by their respective officers thereunto duly authorized.
ELIC:
EQUITABLE LIFE INSURANCE
COMPANY OF IOWA
BY: /s/ FRED S. HUBBELL
_______________________________
Fred S. Hubbell,
Its President
EISN:
EQUITABLE OF IOWA SECURITIES
NETWORK, INC.
BY: /s/ BILL L. LOWE
______________________________
Bill L. Lowe,
Its President
EX-99.B4
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
Annuity Service Center
P. O. Box 9271
Des Moines, Iowa 50306-9271
(800)344-6860
AMENDMENT TO COMPLY WITH SECTION 403(B) OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED
This Amendment is made at the request of the applicant for, or the Owner of,
the Contract. The intent of this Amendment is to qualify the Contract under
IRC Section 403(b).
The following provisions amend your Contract and take precedence over any
contrary provisions in the Contract to which this Amendment is attached.
(1) DEFINITIONS. Words and phrases used in the Contract have the same meaning
when used in this Amendment. The words shown below have the meanings stated.
(a) "IRC" means the United States Internal Revenue Code of 1986, as
amended from time to time.
(b) "EMPLOYEE OR ANNUITANT" means the person covered by the Contract.
(2) This Contract is nontransferable. Other than to us, it may not be sold,
assigned, discounted or pledged as collateral for a loan or as security for
the performance of an obligation or for any other purpose.
(3) This Contract is valid only if it is purchased:
(a) For an employee by an employer as described in IRC Section 501 (c)(3)
which is exempt from income tax under IRC Section 501(a); or
(b) For an employee who performs services for an educational organization
described in IRC Section 170(b)(1)(A)(ii) by an employer which is a state, a
political subdivision of a state or an agency or instrumentality of a state or
political subdivision thereof; or
(c) By an employee in a rollover or a direct transfer as permitted by IRC
Sections 403(b)(8), 403(b)(10), and 408(d)(3).
(4) The Purchase Payments applicable to this Contract must be attributable to
the employee's salary reduction agreement, or to permitted employer
contributions, except in the case of a rollover contribution or a direct
transfer by an employee [as permitted by IRC Section 403(b)(8), 403(b)(10),
and 408(d)(3).] The Purchase Payment must be in cash. The total of such
Purchase Payments cannot exceed the lesser of:
(a) $9,500; or
(b) the exclusion allowance described in IRC Section 403(b)(2), as
amended, for any taxable year and in no event, exceeding any limits set forth
in IRC Sections 401 (a)(30), 402(g), 403(b)(2), and 415. Premiums may be
refunded when necessary to comply with IRC Section 403(b).
(5) Distribution of the assets of this Contract may not be made before the
Annuitant:
(a) Attains age 59 1/2; or
(b) Separates from service; or
(c) Dies; or
(d) Becomes disabled.
In the case of financial hardship, distributions of premiums paid (not
earnings) may be made before (a), (b), (c), or (d) above.
(6) Notwithstanding any provision of this Amendment to the contrary, the
distribution of an individual's interest shall be made under the minimum
distribution requirements of IRC Section 403(b)(10) including:
(a) Any regulations under that Section; and
(b) The incidental death benefit provisions of IRC Section 401(a)(9) and
any regulations under that Section.
The above Sections and regulations are incorporated by reference.
(7) The Annuitant's entire interest in the account must be distributed, or
begin to be distributed, by the Annuitant's required beginning date. The
Annuitant's required beginning date is the April 1st following the calendar
year in which the Annuitant reaches age 70 1/2. (For Annuitants covered by the
governmental or church plans, the required beginning date is the later of: (a)
April 1st of the calendar year after the attainment of age 70 1/2; or (b)
April 1st following the calendar year of retirement.) For each succeeding
year, a distribution must be made on or before December 31st. By the required
beginning date the Annuitant may elect to have the balance in the account
distributed in one of the following forms:
(a) To the Annuitant of this Contract in one sum; or
(b) To the Annuitant as a life annuity (which may provide for a minimum
term certain period not extending beyond the life expectancy of the
Annuitant); or
(c) To the Annuitant and the Annuitant's designated beneficiary, as a
joint and survivor annuity (which may provide for a minimum term certain
period not extending beyond the life expectancy of the Annuitant and his or
her designated beneficiary) in equal or substantially equal amounts: or
(d) To the Annuitant as an annuity certain not extending beyond the life
expectancy of the Annuitant: or
(e) If the Annuitant has a living designated beneficiary, to the
Annuitant as an annuity certain not extending beyond the joint life expectancy
of the Annuitant and the Annuitant's designated beneficiary in equal or
substantially equal amounts.
If the Annuitant's entire interest is to be distributed in a manner other than
that set forth in (a) above, then the minimum distribution that must be made
each year will be determined by dividing the Annuitant's entire interest by
his or her life expectancy. In the case of (c) above, the entire interest will
be divided by the joint and last survivor expectancy of the Annuitant and his
or her designated beneficiary.
If the Annuitant's designated beneficiary is someone other than his or her
spouse, then the minimum distribution which must be made each year will be not
less than the amount obtained by dividing his or her entire interest by the
joint and last survivor expectancy of the Annuitant and the Annuitant's
designated beneficiary, whose life expectancy in making the calculation shall
not be more than 10 years less than the Annuitant.
Life expectancy and joint and last survivor expectancy are computed by use of
the return multiples contained in Section 1.72-9 of the IRC Regulations. For
this computation, the Annuitant's life expectancy (and the life expectancy of
his or her spouse) may be recalculated, but no more frequently than annually.
The life expectancy of a non-spouse designated beneficiary may not be
recalculated.
(8) With respect to any amount, which upon the death of the Annuitant, becomes
payable under any supplementary contract issued in exchange for this Contract,
no provision of this Contract or such supplementary contract shall be
applicable to the extent that it permits or provides for settlement of such
amount in any manner other than as set forth in (a) or (b) below:
(a) If the Annuitant dies after distribution of his or her interest has
commenced, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution being used
prior to the Annuitant's death.
(b) If the Annuitant dies before distribution of his or her interest
commences, the Annuitant's entire interest will be distributed in accordance
with one of the following provisions:
(i) The Annuitant's entire interest will be paid in one sum by
December 31 of the fifth (5th) year after the date of his or her death; or in
a series of payments which will be completed by December 31 of the fifth (5th)
Year after the date of his or her death.
(ii) If the Annuitant's interest is payable to a beneficiary
designated by the Annuitant, and the Annuitant has not elected (i) above, then
the entire interest will be distributed in substantially equal installments
over the life or life expectancy of the designated beneficiary. Distribution
must begin no later than December 31 of the year following the year the
Annuitant dies.
(iii) If the designated beneficiary of the Annuitant is his or her
surviving spouse, distribution must begin by December 31 of the later of:
(a) The year immediately following the year the Annuitant dies; or
(b) The year in which the Annuitant would have attained age 70 1/2.
Payments can be received over the life or life expectancy of the
surviving spouse.
For purposes of the above, payments will be calculated by use of the return
multiples specified in Section 1.72-9 of the IRC Regulations. Life expectancy
of a surviving spouse may be recalculated annually. In the case of any other
designated beneficiary, life expectancy will be recalculated at the time
payment first commences. Payments for each subsequent 12-consecutive month
period will be based on such life expectancy minus the number of whole years
passed since distribution first commenced.
For purposes of this requirement, any amount paid to a child of the Annuitant
will be treated as if it had been paid to the surviving spouse if the
remainder of the interest becomes payable to the surviving spouse when the
child reaches the age of majority.
(9) This paragraph applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of this Contract to the contrary that would
otherwise limit an Annuitant's election under this Contract, an Annuitant may
elect, at any time and in the manner prescribed by us, but subject to the
distribution restrictions of paragraph 5, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified
by the Annuitant in a direct rollover.
For the purpose of this paragraph, the following definitions apply:
(a) Eligible Rollover Distribution is any distribution of all or any
portion of the balance to the credit of the Annuitant, not including:
(i) Any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life or
life expectancy of the Annuitant or the joint lives or joint life expectancies
of the Annuitant and the Annuitant's designated beneficiary, or for a
specified period of ten years or more: or
(ii) Any distribution to the extent such distribution is required
under IRC Sections 401 (a)(9) or 403(b)(10); and
(iii) The portion of any distribution that cannot be included in
gross income.
(b) Eligible Retirement Plan is:
(i) An annuity described in IRC Section 403(b);
(ii) An individual retirement account described in IRC Section 408(a);
or
(iii) An individual retirement annuity described in IRC Section
408(b).
However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an eligible retirement plan is (ii) or (iii) above.
(c) Direct Rollover is payment by us to the Eligible Retirement Plan
specified by the Annuitant.
(d) Annuitant, for the purposes of this paragraph, includes the
Annuitant's surviving spouse and the Annuitant's spouse or former spouse who
is an alternate payee under a qualified domestic relations order, as defined
in IRC Section 414(p).
(10) This Contract shall be for the exclusive benefit of the Annuitant or his
or her beneficiary. The Annuitant's rights under this Contract shall be
nonforfeitable.
(11) We may amend this Contract to conform to the provisions of the IRC,
Internal Revenue Regulations or published Internal Revenue Rulings. We will
send a copy of such amendment to you. It will be mailed to the last post
office address known to us.
(12) Effective for years beginning after December 31, 1988, except in the
case of a Contract purchased by a church, no premium payments applicable to
this contract can be made unless all employees of the employer may elect to
have the employer make contributions of more than $200 under a salary
reduction agreement.
For purposes of this paragraph any employee who is a participant in (a),
(b) or (c) below may be excluded.
(a) An eligible deferred compensation plan under IRC Section 457;
(b) A qualified cash or deferred arrangement; or
(c) Another IRC Section 403(b) annuity contract.
In addition, any nonresident aliens and students who normally work less
than twenty (20) hours per week may be excluded.
The issue date (effective date) of this amendment is the Contract Issue Date
unless another date is shown.
Signed for EQUITABLE LIFE INSURANCE COMPANY OF IOWA
/S/ FRED S. HUBBELL
_______________________
President
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
Annuity Service Center
P.O. Box 9271
Des Moines, Iowa 50306-9271
(800) 344-6860
WAIVER OF WITHDRAWAL CHARGE
This Rider is made a part of the Contract when listed on the Data Page.
If, after the Effective Date of this Rider, the Annuitant is hospitalized
and/or confined to an Eligible Nursing Home for 30 consecutive days, you may
make a total or partial withdrawal without incurring a Withdrawal Charge.
Such withdrawal must be made no later than the sixtieth (60) day following the
last day of a qualifying period of confinement. We will require proof of
confinement in a form satisfactory to us. Part of the proof may be
certification by a licensed physician.
DEFINITIONS
An ELIGIBLE NURSING HOME is an institution or special nursing unit of a
hospital. It must meet at least one of the following requirements:
(1) Be Medicare approved as a provider of skilled nursing care services; or
(2) Be licensed and operated to provide skilled nursing care, intermediate
nursing care, or custodial nursing care by the state in which it is located:
or
(3) Meet all the requirements listed below:
(a) Be licensed to operate as a nursing home by the state in which it is
located;
(b) Have as a main function, the provision of skilled, intermediate, or
custodial nursing care;
(c) Be engaged in providing continuous room and board accommodations to 3
or more persons;
(d) Be under the supervision of a Licensed Vocational Nurse (LVN) or a
nurse of comparable qualifications: and
(e) Maintain a daily medical record of each patient.
QUALIFYING PERIOD OF CONFINEMENT is confinement in a hospital and/or an
Eligible Nursing Home for 30 consecutive days.
NOTICE OF CLAIM
Written notice of claim must be given to us within 30 days following the last
day of a qualifying period of confinement. If notice cannot be given to us
within 30 days, it must be given as soon as reasonably possible. Notice will
be sufficient if it identifies the Annuitant and is sent to our Annuity
Service Center.
CLAIM FORMS
We will supply claim forms within 15 days after receiving notice of claim. If
such forms are not supplied within that time, written proof of claim may be
made without using our forms.
TIME PAYMENT OF CLAIMS
Benefits payable under this Rider will be paid as soon as we receive proper
written proof of claim.
PAYMENT OF CLAIMS
The portion of the Contract Value that is surrendered will be paid in a lump
sum to you.
LEGAL ACTIONS
No legal action may be brought to recover on this benefit until 60 days after
written proof of claim has been given as required by this Rider.
TAX IMPLICATIONS
Receipt of any portion of the Contract Value may be taxable. You should
consult with your personal tax advisor.
GENERAL PROVISIONS
There is no cost associated with this Rider. The provisions of the Contract
are made a part of this Rider except as changed by this Rider. All other
terms, provisions, and conditions of the Contract remain unchanged except as
provided by this Rider. In the event of a conflict between this Rider and the
Contract, the provisions of this Rider will control.
EFFECTIVE DATE
The Effective Date of this Rider is the Effective Date of the Contract shown
on the Contract Data Page unless a later date is shown on the Contract Data
Page.
Signed for EQUITABLE LIFE INSURANCE COMPANY OF IOWA.
/S/FRED S. HUBBELL
_____________________
President
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
EXECUTIVE OFFICE
P.O. Box 9271
Des Moines, Iowa 50306-9271
(800)344-6860
UNISEX AMENDMENT RIDER
The policy to which this amendment is attached is amended by deleting all
reference to "sex" and by amending the Table which shows the Minimum Amount of
Each Installment Per $1,000 of Proceeds for Plan C as shown below.
MINIMUM AMOUNT OF EACH INSTALLMENT PER $1,000 OF PROCEEDS FOR PLAN C
ANNUAL INSTALLMENT GUARANTEED PERIOD
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AGE OF AGE OF
PAYEE LIFE 10 YRS 20 YRS PAYEE LIFE 10 YRS 20 YRS
45 4.08 4.06 4.00 63 5.69 5.53 5.04
46 4.14 4.11 4.05 64 5.85 5.66 5.10
47 4.19 4.17 4.09 65 6.01 5.79 5.16
48 4.25 4.23 4.14 66 6.19 5.93 5.22
49 4.32 4.29 4.19 67 6.37 6.07 5.28
50 4.38 4.35 4.24 68 6.57 6.23 5.34
51 4.45 4.41 4.30 69 6.79 6.38 5.39
52 4.52 4.48 4.35 70 7.02 6.54 5.44
53 4.60 4.55 4.41 71 7.26 6.71 5.48
54 4.68 4.63 4.47 72 7.52 6.88 5.52
55 4.77 4.71 4.53 73 7.80 7.05 5.56
56 4.86 4.80 4.59 74 8.10 7.22 5.59
57 4.96 4.88 4.65 75 8.41 7.40 5.62
58 5.06 4.98 4.71 76 8.76 7.58 5.65
59 5.17 5.08 4.78 77 9.12 7.76 5.67
60 5.29 5.18 4.84 78 9.52 7.93 5.69
61 5.41 5.29 4.91 79 9.94 8.11 5.70
62 5.55 5.41 4.97 80 10.40 8.28 5.71
</TABLE>
This amendment is a part of your policy. Its issue date (effective date) is
the policy date.
Signed for EQUITABLE LIFE INSURANCE COMPANY OF IOWA
/S/ FRED S. HUBBELL
_____________________
President
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
ANNUITY SERVICE CENTER
P.O. Box 9271
Des Moines, Iowa 50306-9271
(800)344-6860
INDIVIDUAL RETIREMENT ANNUITY AMENDMENT
The following language amends and takes precedence over contrary language in
the Contract to which it is attached.
(1) DEFINITIONS. Words and phrases used in the Contract have the same meaning
when used in this Amendment. The words shown below have the meanings stated.
(a) IRC or CODE means the Internal Revenue Code of 1986 as amended and
all rules and regulations thereunder.
(b) CONTRACT means the policy or contract to which this amendment is
attached.
(c) OWNER means the person ("insured" or "annuitant") covered by the
contract.
(2) This Contract is nontransferable. Other than to us, it may not be sold,
assigned, discounted or pledged as collateral for a loan, or as security for
the performance of an obligation or for any other purpose.
(3) The premiums applicable to this Contract will be applied to accumulate a
retirement saving fund for the annuitant/owner.
(4) Except in the case of a rollover contribution (as permitted by IRC Section
402(c), 403(a)(4), 403(b)(8) or 408(d)(3), or a contribution made in
accordance with the terms of a Simplified Employee Pension Program (SEP) as
described in IRC Section 408(k):
(a) All contributions should be in cash; and
(b) The total of all contributions will not exceed $2,000 for any taxable
year.
Any refund of premiums (other than those attributable to excess
contributions) will be applied before the close of the calendar year following
the year of the refund towards the payment of future premiums or the purchase
of additional benefits.
(5) All distributions made under this Contract shall be made in accordance
with the requirements of IRC Section 401 (a)(9), including the incidental
death benefit requirements of IRC Section 401 (a)(9)(G), and the regulations
thereunder, including the minimum distribution incidental benefit requirement
of Section 1.401 (a)(9)-2 of the Proposed Treasury Regulations.
(6) The Owner's entire interest in the account must be distributed, or begin
to be distributed, by the Owner's required beginning date. The Owner's
required beginning date is the April 1 following the calendar year in which
the Owner reaches age 70 1/2. For each succeeding year, a distribution must be
made on or before December 31. By the required beginning date the Owner may
elect to have the balance in the Contract distributed in one of the following
forms:
(a) A single sum payment;
(b) Equal or substantially equal payments over the life of the Owner;
(c) Equal or substantially equal payments over the lives of the Owner and
his or her designated beneficiary:
(d) Equal or substantially equal payments over a specified period that
may not be longer than the Owner's life expectancy:
(e) Equal or substantially equal payments over a specified period that may
not be longer than the joint life and last survivor life expectancy of the
Owner and his or her designated beneficiary.
If the Owner's entire interest is to be distributed in a manner other than
6(a), the required annual minimum distribution will be (a) divided by (b)
where:
(a) Is the Owner's entire interest; and
(b) is his or her life expectancy.
If the Owner's entire interest is to be distributed under 6(c), that interest
will be divided by the joint and last survivor expectancy of the Owner and his
or her designated beneficiary.
If the Owner's beneficiary is someone other than his or her spouse, then the
minimum distribution which must be made each year will be not less than (a)
divided by (b) where:
(a) Is the Owner's entire interest; and
(b) Is the joint and last survivor expectancy of the Owner and the
designated beneficiary. If the designated beneficiary is more than ten years
younger than the Owner, the age to use for the designated beneficiary in
making the calculation shall be the Owner's age less 10 years.
Payments must be made in periodic payments at intervals of no longer than one
year.
Life expectancy is computed by use of the expected return multiples in Tables
V and Vl of Treasury Regulations Section 1.72-9. Unless otherwise elected by
the Owner by the time distributions are required to begin, life expectancies
shall be recalculated annually. Such election shall be irrevocable by the
Owner and shall apply to all subsequent years. The life expectancy of a
non-spouse beneficiary may not be recalculated. Instead, life expectancy will
be calculated using the attained age of such beneficiary during the calendar
year in which the beneficiary attains age 70 1/2, and payments for subsequent
years shall be calculated based on such life expectancy reduced by one for
each calendar year which has elapsed since the calendar year life expectancy
was first calculated.
If the Owner's spouse is not the designated beneficiary, the method of
distribution selected must assure that at least 50% of the present value of
the amount available for distribution is paid within the life expectancy of
the Owner.
(7) No provision of this Contract or any supplementary contract issued upon
the death of the Owner in exchange for this Contract will apply where it
permits or provides for settlement of such amount in any manner other than as
noted in "a" or "b" below:
(a) If the Owner dies on or after distributions have begun under Section
6, the entire remaining interest must be distributed at least as rapidly as
provided under the method of distribution being used before the Owner's death.
(b) If the Owner dies before distributions have begun under Section 6,
the entire remaining interest must be distributed as elected by the Owner. If
the Owner has not made an election, the beneficiary or beneficiaries may elect
a method of distribution as follows:
(1) By December 31 of the year containing the fifth anniversary of the
Owner's death; or
(2) In equal or substantially equal payments over the life or life
expectancy of the designated beneficiary or beneficiaries starting by December
31st of the year following the year of the Owner's death. If the beneficiary
is the Owner's surviving spouse, distribution is not required to begin before
December 31st of the year in which the Owner would have turned 70 1/2 .
(3) If the designated beneficiary is the Owner's surviving spouse, the
spouse may treat the Contract as his or her own individual retirement
arrangement (IRA). This election will be deemed to have been made if the
spouse:
(i) Makes a regular IRA contribution to the Contract;
(ii) Makes rollover to or from such Contract; or
(iii) Fails to elect any of the above provisions.
Life expectancy is computed by use of the expected return multiples in Tables
V and Vl of Section 1.72-9 of the Treasury Regulations. For purposes of
distributions beginning after the Owner's death, unless otherwise elected by
the surviving spouse by the time distributions are required to begin, life
expectancies shall be recalculated annually. Such election shall be
irrevocable by the surviving spouse and shall apply to all subsequent years.
In the case of any other designated beneficiary, life expectancies shall be
calculated using the attained age of such beneficiary during the calendar year
in which distributions are required to begin pursuant to this section, and
payments for any subsequent calendar year shall be calculated based on such
life expectancy reduced by one for each calendar year which has elapsed since
the calendar year life expectancy was first calculated.
Distributions under this section are considered to have begun if distributions
are made on account of the individual reaching his or her required beginning
date or if prior to the required beginning date distributions irrevocably
commence to an individual over a period permitted and in an annuity form
acceptable under Section 1.401 (a)(9) of the Treasury Regulations.
(8) This Contract will be for the exclusive benefit of the Owner or his or her
beneficiary. The entire interest of the annuitant in this Contract will be
nonforfeitable.
(9) We will furnish annual calendar year reports concerning the status of this
Contract.
(10) We may amend this Contract to conform to the provisions of the IRC,
Internal Revenue Regulation or published Internal Revenue Rulings.
(11) Termination of the Contract may occur if:
(a) No premiums have been received for two full consecutive policy years;
and
(b) the paid up annuity benefit at maturity would be less than $20 per
month.
(12) The 20 Day Right To Examine And Return This Contract provision on the
cover of this Contract is modified by substituting the words "initial premium"
for the words "Contract Value."
The Issue Date of this amendment is the Contract Issue Date unless another
date is shown.
Signed for EQUITABLE LIFE INSURANCE COMPANY OF IOWA.
/S/ FRED S. HUBBELL
____________________
President
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
DES MOINES, IOWA
Annuity Service Center
P.O. Box 9271
Des Moines, IA 50306-9271
(800)344-6860
In this Contract, "you" or "your" will refer to the Owner, and "we," "our,"
and "us" will refer to Equitable Life Insurance Company of Iowa.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA (THE "COMPANY") WILL PAY THE BENEFITS
OF THIS CONTRACT ACCORDING TO THE TERMS OF THIS CONTRACT.
This Contract is issued in return for the payment of the initial Purchase
Payment.
20 DAY RIGHT TO EXAMINE AND RETURN THIS CONTRACT
READ YOUR CONTRACT CAREFULLY. THE CONTRACT IS A LEGAL CONTRACT BETWEEN YOU,
THE OWNER, AND US, THE COMPANY.
WITHIN 20 DAYS OF THE DATE OF RECEIPT OF THIS CONTRACT BY THE OWNER, IT MAY BE
RETURNED BY DELIVERING OR MAILING IT TO THE COMPANY AT ITS ANNUITY SERVICE
CENTER. WHEN THE CONTRACT IS RECEIVED AT OUR ANNUITY SERVICE CENTER, WE WILL
REFUND THE CONTRACT VALUE TO THE OWNER, AS OF THE DATE OF CANCELLATION, WITH
ANY ADJUSTMENT REQUIRED BY APPLICABLE LAW OR REGULATION. THEREAFTER, THE
CONTRACT WILL BE DEEMED VOID AS OF ITS ISSUE DATE.
The Contract is signed for the Company as of its Issue Date (Effective Date).
/S/ JAMES R SAMPLE /S/ FRED S. HUBBELL
___________________ _____________________
Secretary President
MATURITY PROCEEDS, WITHDRAWAL VALUES, AND THE DEATH PROCEEDS PROVIDED BY THIS
CONTRACT, WHEN BASED ON INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE
VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
THE VARIABLE PROVISIONS OF THIS CONTRACT CAN BE FOUND IN SECTIONS 3 AND 4.
FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY CONTRACT
NONPARTICIPATING
MATURITY PROCEEDS PAYABLE AT MATURITY DATE.
DEATH PROCEEDS PAYABLE IN EVENT OF ANNUITANT'S DEATH PRIOR TO MATURITY DATE.
TABLE OF CONTENTS
1. GENERAL DEFINITIONS
2. PURCHASE PAYMENTS
3. CONTRACT VALUE PROVISION
3.1 CONTRACT VALUE
3.2 ANNUAL CONTRACT
MAINTENANCE CHARGE
4. SEPARATE ACCOUNT PROVISIONS
4.1 THE SEPARATE ACCOUNT
4.2 INVESTMENTS OF THE
SEPARATE ACCOUNT
4.3 VALUATION OF ASSETS
4.4 ACCUMULATION UNIT
4.5 MORTALITY AND EXPENSE
RISK CHARGE
4.6 ADMINISTRATIVE CHARGE
4.7 SEPARATE ACCOUNT VALUE
5. FIXED ACCOUNT VALUE
6. TRANSFER PROVISION
7. WITHDRAWAL PROVISIONS
7.1 WITHDRAWAL
7.2 WITHDRAWALS WITHOUT
CHARGE
8. CONTRACT PROCEEDS
8.1 MATURITY PROCEEDS
8.2 DEATH PROCEEDS
8.3 DEATH OF ANNUITANT
8.4 DEATH OF OWNER
9. FIXED PAYMENT PLANS
9.1 PLAN A. INTEREST
9.2 PLAN B. FIXED PERIOD
9.3 PLAN C. LIFE INCOME
10. SUSPENSION OR DEFERRAL OF
PAYMENTS
11. OWNER, ASSIGNMENT,
BENEFICIARY, PROVISIONS
11.1 OWNER
11.2 ASSIGNMENT
11.3 BENEFICIARY
11.4 SIMULTANEOUS DEATH OF
BENEFICIARY AND
ANNUITANT
12. GENERAL TERMS
12.1 YOUR CONTRACT
12.2 LIMITS ON CONTESTING
THIS CONTRACT
12.3 VALID RELEASE FOR
PAYMENT
12.4 OPTION TO CHANGE
MATURITY DATE
12.5 REPORTS
12.6 MISTAKE OF AGE OR SEX
12.7 NONPARTICIPATING
12.8 PROTECTION OF PROCEEDS
12.9 TAXES
12.10 MODIFICATION
DATA PAGE
ANNUITANT: [John Doe] AGE AT ISSUE: [35]
OWNER: [John Doe]
CONTRACT NUMBER: [12345] ISSUE DATE: [4/1/93]
MATURITY DATE: [4/01/2023]
PURCHASE PAYMENTS:
[INITIAL PURCHASE PAYMENT: $10,000]
[MINIMUM SUBSEQUENT PURCHASE PAYMENT: $2,000]
[MAXIMUM SUBSEQUENT PURCHASE PAYMENT: $500,000]
[MAXIMUM TOTAL PURCHASE PAYMENT: $ 1 Million]
ANNUAL CONTRACT MAINTENANCE CHARGE:
[$30.00 each Contract Year prior to Maturity Date.]
MORTALITY AND EXPENSE RISK CHARGE:
[Equal on an annual basis to 1.25% of the average daily net asset value of the
Separate Account.]
ADMINISTRATIVE CHARGE:
[Equal on an annual basis to .15% of the average daily net asset value of the
Separate Account.]
TRANSFERS:
FREE TRANSFERS:
[12 per Contract Year]
TRANSFER FEE: [Lesser of: (1 ) 2% of Contract Value transferred; or (2) an
amount not greater than $25.]
MINIMUM CONTRACT VALUE TO BE TRANSFERRED:
[$100 or the Owner's entire interest in the Subaccount or the Fixed Account,
if less.]
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN A SUBACCOUNT OR FIXED ACCOUNT
AFTER A TRANSFER:
[$100]
WITHDRAWALS:
WITHDRAWAL CHARGE: [A withdrawal charge may be deducted in the event of a
withdrawal of all or a portion of the Contract Value. The Withdrawal Charge
Percentages are based upon the number of Purchase Payment Anniversaries that
Purchase Payments have remained in the Contract before being withdrawn.]
TABLE OF WITHDRAWAL CHARGES:
<TABLE>
<CAPTION>
<S> <C>
PURCHASE PAYMENT
ANNIVERSARY WITHDRAWAL CHARGE
- ---------------- -------------------------------------
[1 8% of the Purchase Payment withdrawn]
[2 7% of the Purchase Payment withdrawn]
[3 6% of the Purchase Payment withdrawn]
[4 5% of the Purchase Payment withdrawn]
[5 4% of the Purchase Payment withdrawn]
[6 3% of the Purchase Payment withdrawn]
[7 2% of the Purchase Payment withdrawn]
[8 1% of the Purchase Payment withdrawn]
[9 and after 0%]
</TABLE>
MINIMUM PARTIAL WITHDRAWAL: [$100 or the Owner's entire interest in the
subaccount or the Fixed Account, if less.]
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN A SUBACCOUNT OR THE FIXED ACCOUNT
AFTER A PARTIAL WITHDRAWAL: [$100]
INVESTMENT OPTIONS:
[ADVANTAGE]
[GOVERNMENT SECURITIES]
[SHORT-TERM BOND]
[MONEY MARKET]
[MORTGAGE-BACKED SECURITIES]
[INTERNATIONAL FIXED INCOME]
INTERNATIONAL STOCK]
[TOTAL RETURN]
[RESEARCH]
[OTC]
SEPARATE ACCOUNT: [Separate Account A]
1. GENERAL DEFINITIONS
ACCUMULATION PERIOD - The period during which Purchase Payments may be made
prior to the Maturity Date.
ACCUMULATION UNIT - A unit of measure used to calculate the Contract Value in
a Subaccount of the Separate Account prior to the Maturity Date.
AGE - The Annuitant's age on his or her last birthday.
ANNUITANT - The natural person on whose life Annuity Payments are based. The
Annuitant is shown on the Data Page.
ANNUITY PAYMENTS - The series of payments after the Maturity Date under the
Payment Plan selected.
BENEFICIARY - The person you, as Owner, have chosen to receive the Proceeds on
the Annuitant's death, as shown in our records. There may be different classes
of Beneficiaries, such as primary and contingent. These classes set the order
of payment. There may be more than one Beneficiary in a class.
COMPANY - Equitable Life Insurance Company of Iowa.
CONTRACT ANNIVERSARY - An anniversary of the Issue Date of the Contract.
CONTRACT YEAR - One year from the Issue Date and from each Contract
Anniversary.
FIXED ACCOUNT - The Company's general investment account which contains all
the assets of the Company with the exception of the Separate Account and other
segregated asset accounts.
INVESTMENT OPTION - An investment entity the Company may make available from
time to time.
ISSUE DATE/DATE OF ISSUE - The effective date of the Contract. The Issue Date
is shown on the Data Page.
MATURITY DATE - The date on which Annuity Payments begin. The Maturity Date is
shown on the Data Page unless changed as provided under Section 12.4.
OWNER - The person who owns the Contract, as shown in our records. The Owner
may be someone other than the Annuitant.
PORTFOLIO - A segment of an Investment Option which constitutes a separate and
distinct class of shares.
PROCEEDS - Proceeds are the amounts payable under this Contract.
PURCHASE PAYMENT - An amount paid to the Company to provide benefits under
this Contract. A Purchase Payment does not include transfers between the
Separate Account and the Fixed Account or among Subaccounts.
PURCHASE PAYMENT ANNIVERSARY - The anniversary of a Purchase Payment.
SEPARATE ACCOUNT - A separate investment account of the Company designated on
the Data Page.
SUBACCOUNT - A segment of the Separate Account representing an investment in
an Investment Option.
VALUATION DATE - The Separate Account will be valued each day that the New
York Stock Exchange and our Annuity Service Center both are open for business.
VALUATION PERIOD - The period beginning at the close of business of the New
York Stock Exchange on each Valuation Date and ending at the close of business
for the next succeeding Valuation Date.
2. PURCHASE PAYMENTS
The initial Purchase Payment is due on the Issue Date. There is no Contract
until the initial Purchase Payment is paid. If any check presented as payment
of any part of the initial Purchase Payment for this Contract is not honored,
this Contract is void.
The allocation of the initial Purchase Payment is made in accordance with the
selection made by the Owner. Unless otherwise changed by the Owner, subsequent
Purchase Payments are allocated in the same manner as the initial Purchase
Payment. Allocation of the Purchase Payments is subject to the terms and
conditions imposed by the Company.
The minimum and maximum subsequent Purchase Payments are shown on the Data
Page. The total amount of purchase payments is subject to the Maximum Total
Purchase Payment shown on the Data Page. The Company reserves the right to
reject any Purchase Payment.
3. CONTRACT VALUE PROVISION
3.1 CONTRACT VALUE - The Contract Value, at any time, is the sum of:
(1) The Fixed Account Value; and
(2) The Separate Account Value.
The Separate Account Value will vary daily with the performance of the
Subaccounts of the Separate Account, any Purchase Payments paid, partial
withdrawals, and charges assessed. There is no guaranteed minimum Separate
Account Value.
3.2 ANNUAL CONTRACT MAINTENANCE CHARGE - The Contract Maintenance Charge is
deducted from the Fixed Account Value and the Separate Account Value by
subtracting values from the Fixed Account Value and/or canceling Accumulation
Units from each applicable Subaccount in the ratio that the value of each
account bears to the total Contract Value. The deduction of the Contract
Maintenance Charge from within each Subaccount or Fixed Account is on a first
in, first out basis. The Annual Contract Maintenance Charge is shown on the
Data Page. The Annual Contract Maintenance Charge will be deducted from the
Contract Value on each Contract Anniversary while this Contract is in force.
If a total withdrawal is made on other than a Contract Anniversary, the Annual
Contract Maintenance Charge will be deducted at the time of withdrawal.
4. SEPARATE ACCOUNT PROVISIONS
4.1 THE SEPARATE ACCOUNT - The Separate Account is a separate investment
account of the Company. It is shown on the Data Page. The Company has
allocated a part of its assets for this and certain other contracts to the
Separate Account. The assets of the Separate Account are the property of the
Company. However, they will not be charged with the liabilities that arise out
of any other business the Company may conduct.
4.2 INVESTMENTS OF THE SEPARATE ACCOUNT - The Separate Account is segmented
into Subaccounts. Purchase Payments applied to the Separate Account are
allocated to a Subaccount of the Separate Account. The assets of the
Subaccount are allocated to the Investment Option(s) shown on the Data Page.
The Company may, from time to time, add additional Investment Options or
Portfolios to those shown on the Data Page. The Owner may be permitted to
transfer Contract Values to the additional Investment Options or Portfolios.
However, the right to make any transfer will be limited by the terms and
conditions imposed by the Company.
The Company may substitute shares of another Investment Option or Portfolio
for shares already under this Contract if:
(1) Any Investment Option is a separate legal entity issuing shares or
other evidence of ownership and should the shares of any such Investment
Options) or any Portfolio(s) within the Investment Option became unavailable
for investment by the Separate Account; or
(2) The Board of Directors deems further investment in these shares
inappropriate.
4.3 VALUATION OF ASSETS - Assets of the Separate Account are valued at their
fair market value in accordance with procedures of the Company.
4.4 ACCUMULATION UNIT - A Purchase Payment when allocated to the Separate
Account is converted into Accumulation Units for the selected Subaccount. The
number of Accumulation Units in a Subaccount credited to this Contract is
determined by dividing the Purchase Payment allocated to that Subaccount by
the Accumulation Unit Value for that Subaccount as of the Valuation Period
during which the Purchase Payment is allocated to the Subaccount. The
Accumulation Unit Value for each Subaccount was arbitrarily set initially at
$10. Subsequent Accumulation Unit Values are determined by subtracting (2)
from (1) and dividing the result by (3) where:
(1) Is the net result of:
(a) The assets of the Subaccount attributable to Accumulation
Units; plus or minus
(b) The cumulative charge or credit for taxes reserved, as stated in
Section 12.9, which resulted from the operation or maintenance of that
Subaccount.
(2) Is the cumulative unpaid charge for the Mortality and Expense Risk
Charge and for the Administrative Charge, which are shown on the Contract Data
Page; and
(3) Is the number of Accumulation Units outstanding at the end of the
Valuation Period.
The Accumulation Unit Value may increase or decrease from Valuation Period to
Valuation Period.
4.5 MORTALITY AND EXPENSE RISK CHARGE - The Company deducts a Mortality and
Expense Risk Charge from the Separate Account which is equal, on an annual
basis, to the amount shown on the Data Page. The Mortality and Expense Risk
Charge compensates the Company for assuming the mortality and expense risks
under this Contract.
4.6 ADMINISTRATIVE CHARGE - The Company deducts an Administrative Charge from
the Separate Account which is equal, on an annual basis, to the amount shown
on the Data Page. The Administrative Charge compensates the Company for the
costs associated with the administration of this Contract and the Separate
Account.
4.7 SEPARATE ACCOUNT VALUE - The Separate Account Value on any Valuation Date
shall mean the sum of the Owner's interests in the Subaccounts of the Separate
Account. The value of the Owner's interest in a Subaccount is determined by
multiplying the number of Accumulation Units attributable to that Subaccount
by the Accumulation Unit Value for that Subaccount. Any withdrawals or
transfers will result in the cancellation of Accumulation Units in a
Subaccount.
5. FIXED ACCOUNT VALUE
The Fixed Account Value at any time is the sum of all Purchase Payments
allocated to the Fixed Account:
(l) Less any amount withdrawn; and
(2) Plus any interest credited.
The Company will credit interest to the Fixed Account Value at rates as the
Company declares. The guaranteed minimum interest rate is equal to an
effective rate of 3% per year. We may credit excess interest while this
Contract is in force and before the proceeds are paid. Excess interest will be
declared in advance.
6. TRANSFER PROVISION
Prior to the Maturity Date, the Owner may transfer all or part of the Owner's
interest in a Subaccount or the Fixed Account without the imposition of any
fee or charge if there have been no more than the number of free transfers
shown on the Data Page for the Contract Year. All transfers are subject to the
following:
(1) If more than the number of free transfers have been made in any
Contract Year, the Company will deduct a Transfer Fee for each subsequent
transfer. The Transfer Fee will be deducted from the amount which is
transferred.
(2) The minimum amount which can be transferred is shown on the Data
Page. The minimum amount which must remain is shown on the Data Page.
(3) Any transfer direction must clearly specify:
(a) The amount which is to be transferred; and
(b) The Fixed Account or Subaccounts which are to be affected.
(4) Transfers will be made as of the Valuation Period next following the
Valuation Period during which a written request for a transfer is received at
the Company.
(5) The Company reserves the right, at any time and without prior notice
to any party, to terminate, suspend, or modify the transfer privilege
described above.
Purchase Payments and any earnings attributable to such Purchase Payments are
transferred from the Fixed Account or Subaccount on a first in, first out
basis. For any Contract Year, transfers of Purchase Payments and any
attributable earnings from the Fixed Account to a Subaccount are limited to
10% of the Purchase Payment and 10% of its attributable earnings. If a
Purchase Payment was received at least eight (8) years prior to the request
for transfer, 100% of that Purchase Payment and its attributable earnings may
be transferred to a Subaccount or Subaccounts. If the Owner elects to use the
transfer privilege, the Company will not be liable for transfers made
according to the Owner's instructions.
7. WITHDRAWAL PROVISIONS
7.1 WITHDRAWAL - Prior to the Maturity Date, the Owner may, upon written
request received by the Company, make a total or partial withdrawal of the
Contract Withdrawal Value. This Contract terminates if a total withdrawal is
made. The Contract Withdrawal Value is:
(1) The Contract Value for the Valuation Period next following the
Valuation Period during which a written request for a withdrawal is received
at the Company; less
(2) Any applicable taxes not previously deducted; less
(3) The Withdrawal Charge, if any; less
(4) The Annual Contract Maintenance Charge, if any.
A withdrawal will result in the cancellation of Accumulation Units for each
applicable Subaccount of the Separate Account or a reduction in the Fixed
Account Value. Unless otherwise instructed, a partial withdrawal will be
applied pro rata among each Subaccount and the Fixed Account based on the
ratio of the value of each Subaccount or Fixed Account to the Contract Value.
For purposes of determining any applicable withdrawal charges or any other
charges under this Contract, the distribution of Purchase Payments from within
a Subaccount or the Fixed Account are on a first in, first out basis with
earnings attributable to such Purchase Payments considered only after the
Purchase Payment is considered.
Each partial withdrawal must be for an amount which is not less than the
amount shown on the Data Page. The remaining Contract Value which must remain
in a Subaccount or in the Fixed Account after a partial withdrawal is shown on
the Data Page.
7.2 WITHDRAWALS WITHOUT CHARGE - For each Contract Year after the first, the
Owner may withdraw without a withdrawal charge an amount equal to 10% of the
total of all Purchase Payments at the beginning of the Contract Year less any
Purchase Payments previously withdrawn. Any withdrawals without a withdrawal
charge not used in a Contract Year may not be used in any subsequent Contract
Year.
8. CONTRACT PROCEEDS
8.1 MATURITY PROCEEDS - On the Maturity Date, the Company will pay the
Maturity Proceeds of the Contract to the Annuitant, if living, subject to the
terms of this Contract. If Payment Plan A, Option 1; Plan B; or Plan C are
elected, the Maturity Proceeds will be the Contract Value less any applicable
taxes not previously deducted. If the Maturity Proceeds are paid in cash or by
any other method not listed above, the Maturity Proceeds equal the Contract
Value less:
(1) Any applicable taxes not previously deducted; less
(2) The Withdrawal Charge, if any; less
(3) The Annual Contract Maintenance Charge, if any.
The election of a Payment Plan must be made in writing at least seven (7) days
prior to the Maturity Date. If no election is made, an automatic option of
monthly income for a minimum of 120 months and as long thereafter as the
Annuitant lives will be applied.
8.2 DEATH PROCEEDS - If death occurs prior to the end of the eighth Contract
Year, the Death Proceeds will be the greater of:
(1) The sum of the Purchase Payments less any Withdrawals including any
applicable Withdrawal Charge and any applicable taxes not previously deducted:
or
(2) The Contract Value less any applicable taxes not previously deducted.
If death occurs after the end of the eighth Contract Year, the Death Proceeds
will be the greatest of:
(1) The sum of the Purchase Payments less any Withdrawals including any
applicable Withdrawal Charge and less any applicable taxes not previously
deducted; or
(2) The Contract Value less any applicable taxes not previously
deducted; or
(3) The Contract Value at the end of the eighth Contract Year less any
Withdrawals including any applicable Withdrawal Charge incurred since the end
of the eighth Contract Year and any applicable taxes not previously deducted.
The Death Proceeds will be determined and paid as of the Valuation Period next
following the Valuation Period during which both due proof of death
satisfactory to the Company and an election for the payment method are
received at the Company.
The Beneficiary can elect to have a single lump sum payment or choose one of
the Payment Plans. If a single sum payment is requested, the amount will be
paid within seven (7) days, unless the Suspension or Deferral of Payments
provision is in effect.
Payment to the Beneficiary, other than in a single sum, may only be elected
during the 60-day period beginning with the date of receipt of due proof of
death on a form acceptable to the Company.
The entire Death Proceeds must be paid within five (5) years of the date of
death unless:
(1) The Beneficiary elects to have the Death Proceeds:
(a) Payable under a Payment Plan over the life of the Beneficiary or
over a period not extending beyond the life expectancy of the Beneficiary; and
(b) Payable beginning within one year of the date of death; or
(2) If the Beneficiary is the Owner's Spouse, the Beneficiary may elect
to become the Owner of the Contract and this Contract will continue in effect.
8.3 DEATH OF ANNUITANT
(1) If the Annuitant dies prior to the Maturity Date, we will pay the
Death Proceeds as provided in Section 8.2 except as provided in number (2) of
this Section.
(2) If the Annuitant dies prior to the Maturity Date and if the Annuitant
was age 76 or greater on the Issue Date of this Contract, we will pay the
Death Proceeds as provided in Section 8.2 except that the Death Proceeds will
equal the Contract Value less any applicable taxes not previously deducted.
(3) If the Annuitant dies after the Maturity Date but before all of the
Proceeds payable under this Contract have been distributed, we pay the
remaining Proceeds to your Beneficiary according to the terms of the
supplementary contract.
8.4 DEATH OF OWNER
(1) If you, as Owner of this Contract, die before the Maturity Date,
Ownership of this Contract will be transferred as follows:
(a) If you are also the Annuitant, Section 8.3 applies; or
(b) If you are not also the Annuitant and if the new Owner is your
spouse, this Contract may be continued; or
(c) If you are not also the Annuitant and it the new Owner is someone
other than your spouse, the Contract Withdrawal value must be distributed
under Section 8.2.
(2) If you, as Owner, die on or after the Maturity Date, but before all
Proceeds payable under this Contract have been distributed, we will continue
payments according to the terms of the Supplementary Contract.
The Owner's spouse is the Owner's surviving spouse at the time of the Owner's
death.
If the Owner is not a natural person, the death of the Annuitant will be
treated as the death of the Owner.
If there are Joint Owners, any references to the death of the Owner shall mean
the first death of an Owner.
9. FIXED PAYMENT PLANS
After the first Contract Year, the Proceeds may be applied under one or more
of the Payment Plans described below. Payment Plans not specified in this
Contract are available only if they are approved both by the Company and the
Owner. You can choose a Payment Plan during the Annuitant's lifetime. This
choice can be changed during the life of the Annuitant prior to the Maturity
Date. If you have not chosen a plan prior to the Annuitant's death, the
automatic option of monthly income for a minimum of 120 months and as long
thereafter as the Payee lives will be applied.
To choose a plan, send a written request to our Annuity Service Center. We
will send you the proper forms to complete. Your request, when recorded at our
Annuity Service Center, will be in effect from the date it was signed, subject
to any payments or actions taken by us before the recording. Any change must
be requested at least seven (7) days prior to the Maturity Date.
If, for any reason, the person named to receive payments (the Payee) is
changed, the change will go into effect when the request is recorded at our
Annuity Service Center, subject to any payments or actions taken by us before
the recording.
A plan is available only if the periodic payment is $100 or more. If the Payee
is other than a natural person (such as a corporation), a plan will be
available only with our consent.
A supplementary contract will be issued in exchange for this Contract when
payment is made under a Payment Plan. The effective date of a Payment Plan
shall be a date upon which we mutually agree.
The minimum interest rate for plans A and B is 3.0% a year, compounded yearly.
The minimum rates for Plan C were based on the 1983a Annuity Table at 3.0%
interest, compounded yearly. We may pay a higher rate at our discretion.
9.1 PLAN A. INTEREST
OPTION 1 - The Contract Value less any applicable taxes not previously
deducted may be left on deposit with us for five (5) years. Fixed payments
will be made monthly, quarterly, semi-annually, or annually. We will not allow
a monthly payment if the Contract Value applied under this option is less than
$100,000. The Proceeds may not be withdrawn until the end of the five (5) year
period.
OPTION 2 - The Contract Withdrawal Value may be left on deposit with us
for a specified period. Interest will be paid annually. All or part of the
Proceeds may be withdrawn at any time.
9.2 PLAN B. FIXED PERIOD - The Contract Value less any applicable taxes not
previously deducted will be paid until the Proceeds, plus interest, are paid
in full. Payments may be paid annually or monthly. The payment period cannot
be more than 30 years nor less than five (5) years. The table below shows the
minimum annual payment for each $1,000 of Proceeds applied. It is based on the
age of the Annuitant or the Beneficiary.
MINIMUM AMOUNT OF EACH INSTALLMENT PER $1,000 FOR PLAN B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Years Annual Years Annual Years Annual
Payable Installment Payable Installment Payable Installment
5 $ 218.35 14 $ 88.53 23 $ 60.81
6 184.60 15 83.77 24 59.05
7 160.51 16 79.61 25 57.43
8 142.46 17 75.95 26 55.94
9 128.43 18 72.71 27 54.56
10 117.23 19 69.81 28 53.29
11 108.08 20 67.22 29 52.11
12 100.46 21 64.87 30 51.02
13 94.03 22 62.75
</TABLE>
9.3 PLAN C. LIFE INCOME - The Contract Value less any applicable taxes not
previously deducted will be paid in monthly or annual payments for as long as
the Annuitant or Beneficiary, whichever is appropriate, lives. The Company has
the right to require proof satisfactory to us of the age and sex of such
person and proof of continuing survival of such person. A minimum number of
payments may be guaranteed, if desired.
The table below shows the minimum annual payment for each $ 1,000 of Proceeds
applied. It is based on the age of the Annuitant or Beneficiary.
MINIMUM AMOUNT OF EACH INSTALLMENT PER $1,000 OF PROCEEDS FOR PLAN C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Male Female
Annual Installment Annual Installment
Guaranteed Period Guaranteed Period
Age of Age of
Payee Life 10 Yrs 20 Yrs Payee Life 10 Yrs 20 Yrs
45 48.35 47.69 46.41 45 44.67 44.26 43.60
46 49.13 48.41 47.01 46 45.28 44.85 44.13
47 49.95 49.17 47.63 47 45.92 45.46 44.68
48 50.80 49.96 48.27 48 46.60 46.11 45.25
49 51.70 50.78 48.93 49 47.31 46.79 45.84
50 52.64 51.64 49.60 50 48.06 47.50 46.45
51 53.63 52.55 50.30 51 48.85 48.25 47.09
52 54.67 53.50 51.01 52 49.69 49.03 47.75
53 55.77 54.49 51.73 53 50.56 49.86 48.43
54 56.93 55.54 52.48 54 51.49 50.73 49.14
55 58.16 56.64 53.23 55 52.48 51.65 49.87
56 59.47 57.80 54.00 56 53.52 52.61 50.63
57 60.85 59.02 54.77 57 54.63 53.63 51.41
58 62.34 60.30 55.55 58 55.81 54.71 52.21
59 63.92 61.65 56.33 59 57.06 55.84 53.03
60 65.61 63.08 57.10 60 58.39 57.04 53.86
61 67.43 64.57 57.87 61 59.81 58.30 54.70
62 69.38 66.14 58.62 62 61.33 59.64 55.56
63 71.47 67.78 59.36 63 62.95 61.04 56.41
64 73.71 69.50 60.07 64 64.68 62.53 57.26
65 76.12 71.28 60.74 65 66.53 64.10 58.11
66 78.69 73.13 61.38 66 68.51 65.75 58.93
67 81.45 75.04 61.99 67 70.64 67.49 59.73
68 84.40 77.01 62.54 68 72.93 69.32 60.50
69 87.57 79.03 63.05 69 75.40 71.24 61.23
70 90.96 81.09 63.52 70 78.08 73.25 61.91
71 94.60 83.19 63.93 71 80.99 75.36 62.54
72 98.50 85.32 64.30 72 84.14 77.54 63.12
73 102.70 87.45 64.63 73 87.57 79.81 63.63
74 107.22 89.58 64.91 74 91.30 82.14 64.08
75 112.08 91.69 65.14 75 95.36 84.52 64.47
76 117.32 93.77 65.34 76 99.77 86.93 64.80
77 122.97 95.79 65.51 77 104.57 89.35 65.08
78 129.06 97.74 65.64 78 109.79 91.75 65.30
79 135.61 99.60 65.75 79 115.49 94.12 65.49
80 142.65 101.36 65.83 80 121.71 96.42 65.64
</TABLE>
Factors for ages not shown will be supplied upon request.
10. SUSPENSION OR DEFERRAL OF PAYMENTS
The Company reserves the right to suspend or postpone payments for a
withdrawal or transfer for any period when:
(1) The New York Stock Exchange is restricted;
(2) Trading on the New York Stock Exchange is restricted;
(3) An emergency exists as a result of which disposal of securities held
in the Separate Account is not reasonably practicable or it is not reasonably
practicable to determine the value of the Separate Account's net assets;
(4) During any other period when the Securities and Exchange Commission,
by order, so permits for the protection of the Owners; or
(5) Our Annuity Service Center is closed for business.
The applicable rules and regulations of the Securities and Exchange Commission
will govern as to whether the conditions described in (2) and (3) exist.
11. OWNER, ASSIGNMENT, BENEFICIARY PROVISIONS
11.1 OWNER - As Owner, you can exercise the rights given by this Contract. You
can name a new Owner. Any change in Ownership must be sent to our Annuity
Service Center on a form we accept. The change will go into effect when it is
signed, subject to any payments or actions taken by us before we record it.
11.2 ASSIGNMENT - During the Annuitant's life, you can assign some or all of
your rights under this Contract to someone else.
A signed copy of the assignment must be sent to our Annuity Service Center on
a form we accept. An assignment of your Contract is not binding on us until
the assignment, or a copy, is recorded at our Annuity Service Center, subject
to any payments or actions taken by us before the recording. We are not
responsible for the validity or effect of any assignment, including any tax
consequences. A general assignment is not a change of owner.
Consent of any Irrevocable Beneficiaries is required before assignment of
Proceeds.
11.3 BENEFICIARY - The Owner can name any Beneficiary to be an Irrevocable
Beneficiary. The interest of an Irrevocable Beneficiary cannot be changed
without his or her consent. Otherwise, you can change Beneficiaries as
explained below.
Unless you state otherwise, all rights of a Beneficiary, including an
Irrevocable Beneficiary, will end if he or she dies before the Annuitant dies.
If any Beneficiary dies before the Annuitant, that Beneficiary's interest will
pass to any other Beneficiaries according to their respective interests. If
all Beneficiaries die before the Annuitant, upon the Annuitant's death the
Company will pay the Death Proceeds to the Owner, if living, otherwise to the
Owner's estate or legal successors.
The Owner can change the Beneficiary at any time during the Annuitant's life.
To do so, send a written request to our Annuity Service Center. The request
must be on a form we accept. The change will go into effect when signed,
subject to any payments or actions taken by us before we record the change.
A change cancels all prior Beneficiaries; except, however, a change will not
cancel any Irrevocable Beneficiary without his or her consent. The interest of
the Beneficiary will be subject to:
(1) Any assignment of this Contract, accepted and recorded by the Company
prior to the Annuitant's death: and
(2) Any Payment Plan in effect on the date of the Annuitant's death.
11.4 SIMULTANEOUS DEATH OF BENEFICIARY AND ANNUITANT - Death Proceeds will be
paid as though the Beneficiary died before the Annuitant if:
(1) The Beneficiary dies at the same time as the Annuitant; or
(2) The Beneficiary dies within 24 hours of the Annuitant's death.
12. GENERAL TERMS
12.1 YOUR CONTRACT - This Contract is a legal Contract with us. The Contract
is issued in consideration of any Application you completed and the payment of
the initial Purchase Payment. A copy of any Application is attached to and
made a part of this Contract.
This Contract is the entire Contract between you and us. Only our President or
Vice President can change, modify or waive the provisions of this Contract.
12.2 LIMITS ON CONTESTING THIS CONTRACT - The Company relies on the statements
made in any Application for the Contract. These statements, in the absence of
fraud, are considered representations and not warranties.
The Company will not contest payment of the Proceeds after this Contract has
been in force during the Annuitant's life for two (2) years from the Issue
Date.
12.3 VALID RELEASE FOR PAYMENT - If Proceeds are payable to a person not
legally competent to give a valid release, we may pay the Proceeds in monthly
installments, not exceeding $100, to the person or persons, who, in our
opinion, have assumed custody and principal support of the person. The person
to receive the Proceeds must be judged by us to be entitled to payment. Any
payment made under this clause will be made in good faith. It will satisfy our
responsibility to the extent of any payments made.
12.4 OPTION TO CHANGE MATURITY DATE - The Owner may elect a new Maturity Date
at any time by making a written request to us at our Annuity Service Center at
least seven (7) days prior to the Maturity Date. We may require that the
Contract be submitted for endorsement to show the change. The Maturity Date
may not be in the first Contract Year.
12.5 REPORTS - The Company will send you at least once each year a report
which shows the current Contract Value and any other information which may be
required by law. The Company will also send you an annual report of the
Separate Account. Reports will be sent to the Owner at the post office address
last known to us.
12.6 MISTAKE OF AGE OR SEX - If the age or sex of the Annuitant, or the age or
sex of any designated second person, is misstated in any Application, we will
adjust the Proceeds. The Proceeds of this Contract will be those the Purchase
Payment would have bought at the correct age and sex. Any underpayment made by
the Company will be made up immediately. Any overpayment made by the Company
will be deducted from the succeeding payments as necessary.
12.7 NONPARTICIPATING - This Contract does not share in our divisible surplus.
12.8 PROTECTION OF PROCEEDS - To the extent permitted by law, Proceeds will be
free from legal process and the claim of any creditor if the person is
entitled to them under this Contract. No payment and no amount under this
Contract can be taken or assigned in advance of its payment date unless the
Company receives the Owner's written consent.
12.9 TAXES - Any taxes paid to any government entity relating to this Contract
will be deducted from the Purchase Payment or Contract Value when incurred.
The Company will, in its sole discretion, determine when taxes have resulted
from:
(1) The investment experience of the Separate Account;
(2) Receipt by the Company of the Purchase Payments; or
(3) Commencement of Annuity Payments.
The Company may, at its sole discretion, pay taxes when due and deduct that
amount from the Contract Value at a later date. Payment at an earlier date
does not waive any right the Company may have to deduct amounts at a later
date. The Company will deduct any withholding taxes required by applicable
law.
12.10 MODIFICATION - This Contract may be modified in order to maintain
compliance with applicable state or federal laws.
MATURITY PROCEEDS, WITHDRAWAL VALUES, AND DEATH PROCEEDS PROVIDED BY THIS
CONTRACT, WHEN BASED ON INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE
VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
THE VARIABLE PROVISIONS OF THIS CONTRACT CAN BE FOUND IN SECTIONS 3 and 4.
FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY CONTRACT
NONPARTICIPATING
MATURITY PROCEEDS PAYABLE AT MATURITY DATE.
DEATH PROCEEDS PAYABLE IN EVENT OF ANNUITANT'S DEATH PRIOR TO MATURITY DATE.
EQUITABLE LIFE INSURANCE VARIABLE ANNUITY APPLICATION
COMPANY OF IOWA
______________________________________________________________________________
Annuity plan applied for: _________________________
Maturity Date (Date on which benefit payments are to begin.) __/__/__
Purchase Payment $____________
Future Payment(s) $___________ [ ] Monthly [ ] Qrtly [ ] Semi-Annl [ ] Annual
______________________________________________________________________________
TYPE OF PLAN [ ] Non-Qualified [ ] 1035 Exchange [ ] IRA [ ] SEP-IRA Rollover
[ ] IRA Transfer [ ] SEP-IRA [ ] IRA Rollover from Qualified Plan
[ ] OTHER ____________________ [ ] 403(b) [ ] 403(b) TSA Rollover
I acknowledge that I understand the withdrawal restrictions under Internal
Revenue Code Section 403(b)(11) on contributions and earnings and have
received a prospectus explaining the restrictions. I understand the other
investment alternatives available under the employer's 403(b) arrangement to
which I may elect to transfer my contract value.
______________________________________________________________________________
ANNUITANT INFORMATION
Full Name______________________________ Social Security Number________________
Address________________________________ [ ] Male [ ] Female
________________________________ Date of Birth __/__/__
City___________________________________ State_____________________ Zip________
______________________________________________________________________________
OWNER INFORMATION JOINT OWNER INFORMATION
(If different from Annuitant)
Full Name_____________________________ Full Name______________________________
Address_______________________________ Address________________________________
City____________State________Zip______ City_____________State________Zip______
Social Security Number________________ Social Security Number_________________
[ ] Male [ ] Female [ ] Male [ ] Female
Date of Birth ___/___/___ Date of Birth ___/___/___
______________________________________________________________________________
PRIMARY BENEFICIARY(IES) (Show % each is to receive.) Relationship Soc. Sec. #
______________________________________________________________________________
______________________________________________________________________________
(Add separate sheet for contingent beneficiary information)
______________________________________________________________________________
PURCHASE PAYMENT ALLOCATION Subaccount Percent(%)
_____________ _____________
Enter desired Subaccount number and _____________ _____________
indicate percent of Purchase Payment _____________ _____________
allocation. Use whole percentages only. _____________ _____________
If more room is needed, use back of _____________ _____________
application. _____________ _____________
_____________ _____________
Fixed Account
_____________ _____________
Total Percent 100%
ALLOCATION DURING RIGHT TO EXAMINE PERIOD
Under certain circumstances, as described in the accompanying Prospectus, the
initial purchase payment will be allocated to the ELI Money Market Portfolio
until the expiration of the Right to Examine Period. Thereafter, the purchase
payments will be allocated as directed in the Purchase Payment Allocation
Section.
______________________________________________________________________________
Is the policy applied for to replace or change any existing Life Insurance or
Annuity contract? [ ] Yes [ ] No
______________________________________________________________________________
It is understood and agreed that:
(1) The statements made shall form the exclusive basis of any Annuity Contract
or Certificate issued hereon;
(2) Only the President or Secretary can make, modify, discharge, or waive any
of the Company's rights;
(3) The Annuity Contracts or Certificates are not effective until the initial
purchase payment is received by the Company;
(4) CHECKS MUST BE MADE PAYABLE TO THE COMPANY. CHECKS ARE NOT TO BE MADE
PAYABLE TO THE AGENT. THE CANCELLED CHECK IS YOUR RECEIPT;
(5) THERE IS A SUBSTANTIAL PENALTY FOR EARLY SURRENDER.
______________________________________________________________________________
I agree that the above information contained in the application is true and
correct to the best of my knowledge and belief and is made as the basis for my
application. I UNDERSTAND THAT ANNUITY PAYMENTS AND TOTAL WITHDRAWAL VALUES
(IF ANY) PROVIDED BY THIS CONTRACT WHEN BASED ON THE INVESTMENT EXPERIENCE OF
A SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR
AMOUNT. HOWEVER, FIXED ACCOUNT VALUES ARE GUARANTEED AS TO A FIXED DOLLAR
AMOUNT. RECEIPT OF A CURRENT VARIABLE ANNUITY PROSPECTUS IS HEREBY
ACKNOWLEDGED. Under penalty of perjury, I certify that my social security
number listed above is correct and that I am not currently subject to backup
withholding. Application made at:
City____________________ State___________ this ___ day of _____________, 19___
_________________________________ ___________________________________________
Annuitant's Signature Owner's Signature (if other than Annuitant)
______________________________________________________________________________
AGENT'S REPORT To the best of your knowledge, does the policy applied for
involve replacement or modification of any existing Life Insurance or Annuity
contract? [ ] Yes [ ] No
If Yes, Indicate which cost basis and submit required replacement forms.
[ ] Life Insurance [ ] Annuity [ ] Cost Basis $_____________
Agent Name_____________________________ Tel. (___)___-____ Agent No. _____
Address_______________________________________________________________________
City___________________________________ State___________________ Zip__________
Signature of Agent____________________________________ Date Signed ___/___/___
______________________________________________________________________________
General Agent______________________________ Branch Office Location____________
City_____________________ State_________ Zip________ Telephone________________
______________________________________________________________________________
SEND APPLICATION AND CHECK TO: P.O. BOX 9271, DES MOINES, IA 50306-9271
EXHIBIT 10 - CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our reports dated February 7, 1996, with respect to Equitable Life
Insurance Company of Iowa and each account within Equitable Life Insurance
Company of Iowa Separate Account A in Post-Effective Amendment No. 4 to the
Registration Statement (Form N-4 No. 33-79170) and related Prospectus of
Equitable Life Insurance Company of Iowa Separate Account A.
ERNST & YOUNG LLP
Des Moines, Iowa
March 27, 1996
AGREEMENT GOVERNING INITIAL CONTRIBUTION
TO
EQUI-SELECT SERIES TRUST
BY
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
THIS AGREEMENT is made by and between Equi-Select Series Trust ('Trust")
a Massachusetts Business Trust, and Equitable Life Insurance Company of Iowa
("Insurance Company") on behalf of Equitable Life Insurance Company of Iowa
Separate Account A (the "Separate Account"), a separate account of Insurance
Company.
WHEREAS, Insurance Company has established the Separate Account and
proposes to contribute to it the sum of $100,000; and
WHEREAS, the Insurance Company on behalf of the Separate Account proposes
to contribute $100,000 ("Contribution") to the Trust in the manner hereinafter
described; and
WHEREAS, The Parties hereto intend that the Contribution satisfy the
requirement that the Trust have a net worth of at least $100,000 prior to
making a public offering of securities of the Trust; and
WHEREAS, it is necessary and desirable that the terms under which said
Contribution is made and the respective rights of the Insurance Company and
the Trust with respect thereto be determined;
NOW, THEREFORE, it is hereby agreed between Insurance Company on behalf
of the Separate Account and the Trust as follows:
Insurance Company will provide for the contribution to the Trust by the
Separate Account the sum of $100,000. Insurance Company hereby represents and
agrees that such Contribution is for investment purposes and not for the
purpose of redeeming or disposing of any interest in the Trust resulting from
such Contribution. Contribution is intended to satisfy the requirement that
the Trust have a net worth of at least S 100,000 prior to making public
offering of the securities of the Trust.
II
In consideration for such Contribution and without deduction of any sales
or other charges, the Trust shall credit Insurance Company with shares, of
which Insurance Company, on behalf of the Separate Account, shall be the
owner. Such shares shall share pro rata in the investment performance of each
Portfolio of Trust as selected by Insurance Company and shall be subject to
the same valuation procedures and the same periodic charges as are other
shares of such Portfolios.
III
Insurance Company hereby acknowledges that by the making of such
Contribution by Separate Account, neither Insurance Company nor Separate
Account is and shall not be regarded as a creditor of the Trust and that the
relationship of debtor-creditor between the Trust and the Separate Account
does not exist with respect to the amount so contributed. Insurance Company
agrees that the Separate Account's interest in the Trust as a result of such
Contribution shall be neither senior to nor subordinate to the interests of
owners of variable annuity contracts issued with respect to the Separate
Account and that, in the event of liquidation of the Trust or the Separate
Account, however occurring, the Separate Account shall have no preferential
rights of any kind over such contract owner's but hall share ratably with
them.
IV
All commitments of the Insurance Company hereunder shall be forever
binding upon its successor or successors.
V
Insurance Company shall not withdraw the Contribution prior to five years
from the date hereof unless its annuity program is terminated and no more
variable annuity contracts are outstanding.
VI
The Trust hereby accepts such Contribution subject to the Terms of the
Agreement.
Executed this 15th day of September, 1994.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
BY: /s/ FRED S. HUBBELL
--------------------------
Fred S. Hubbell, President
EQUI-SELECT SERIES TRUST
BY: /s/ PAUL R. SCHLAACK
--------------------------
Paul R Schlaack, President
AGREEMENT GOVERNING CONTRIBUTION OF WORKING CAPITAL
TO
EQUI-SELECT SERIES TRUST
BY
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
THIS AGREEMENT is made by and between Equi-Select Series Trust ("Trust),
a Massachusetts Business Trust, and Equitable Life Insurance Company of Iowa
('Insurance Company").
WHEREAS, Insurance Company has established a variable annuity program
which will utilize Trust as an underlying investment; and
WHEREAS, Insurance Company desires that Trust have sufficient assets to
be able to efficiently invest in a diversified portfolio of securities; and
WHEREAS, the Insurance Company proposes to contribute $23,000,000
("Working Capital") to the Trust in the manner hereinafter described; and
WHEREAS, it is necessary and desirable that the teens under which said
Working Capital is contributed and the respective rights of the Insurance
Company and the Trust with respect there to be determined;
NOW, THEREFORE, it is hereby agreed between Insurance Company on behalf
of the Separate Account and the Trust as follows:
I
Insurance Company will provide for the contribution to the Trust the sum
of $23,000,000. Insurance Company hereby represents and agrees that such
Working Capital is for investment purposes and not for the purpose of
redeeming or disposing of any interest in the Trust resulting from such
contribution. This Working Capital is in addition to any minimum capital
requirements imposed upon the Trust.
II
In consideration for the contribution of the Working Capital and without
deduction of any sales or other charges, the Trust shall credit Insurance
Company with shares. Such shares shall share pro rata in the investment
performance of each Portfolio of Trust as selected by Insurance Company and
shall be subject to the same valuation procedures and the same periodic
charges as are other shares of such Portfolios.
III
Insurance Company hereby acknowledges that by the contribution of such
Working Capital, Insurance Company is not and shall not be regarded as a
creditor of the Trust and that the relationship of debtor-creditor between the
Trust and the Insurance Company does not exist with respect to the amount so
contributed. Insurance Company agrees that the contribution of the Working
Capital does not now and shall not in the future deem the Insurance Company,
the holder of any interest other than as provided in Section II of this
Agreement. Insurance Company agrees that its interest in the Trust as a result
of such Contribution shall be neither senior to nor subordinate to the
interests of owners of variable annuity contracts issued with respect to the
Separate Accounts of Insurance Company and that, in the event of liquidation
of the Trust, the Insurance Company shall have no preferential rights of any
kind over such contract owner's but shall share ratably with them.
IV
All Commitments of the Insurance Company hereunder shall be forever
binding upon its successor or successors.
V
Insurance Company may, at any time withdraw one dollar of contributed
Working Capital for each dollar of assets allocated to the Trust in the form
of purchase payments from annuity contracts owners or owners of other variable
insurance contracts offered by Insurance Company or an affiliated insurance
company of Insurance company.
VI
The Trust hereby accepts the contribution of such Working Capital subject
to the terms of the Agreement.
Executed this 4th day of October, 1994.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
BY: /s/ FRED S. HUBBELL
--------------------------
Fred S. Hubbell, President
EQUI-SELECT SERIES TRUST
BY: /s/ PAUL R. SCHLAACK
---------------------------
Paul R Schlaack, President
AGREEMENT GOVERNING INITIAL CONTRIBUTION
TO
EQUI-SELECT SERIES TRUST
BY
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
THIS AGREEMENT is made by and between Equi-Select Series Trust ("Trust"), a
Massachusetts Business Trust, and Equitable Life Insurance Company of Iowa
("Insurance Company") on behalf of Equitable Life Insurance Company of Iowa
Separate Account A (the "Separate Account"), a separate account of Insurance
Company.
WHEREAS, Insurance Company has established two additional Sub-Accounts of the
Separate Account and proposes to contribute to the Sub-Accounts the sum of
$20,000; and
WHEREAS, Insurance Company on behalf of the Separate Account proposes to
contribute $20,000 ("Contribution") to the Trust in the manner hereinafter
described; and
WHEREAS, it is necessary and desirable that the terms under which said
Contribution is made and the respective rights of the Insurance Company and
the Trust with respect thereto be determined;
NOW, THEREFORE, it is hereby agreed between Insurance Company on behalf of the
Separate Account and the Trust as follows:
I
Insurance Company will provide for the contribution to the Trust by the
Separate Account the sum of $20,000. Insurance Company hereby represents and
agrees that such Contribution is for investment purposes and not for the
purpose of redeeming or disposing of any interest in the Trust resulting from
such Contribution.
II
In consideration for such Contribution and without deduction of any sales or
other charges, the Trust shall credit Insurance Company with shares, of which
Insurance Company, on behalf of the Separate Account, shall be the owner.
Such shares shall share pro rata in the investment performance of each of the
two additional Portfolios of Trust as selected by Insurance Company and shall
be subject to the same valuation procedures and the same periodic charges as
are other shares of such other Portfolios of Trust.
III
Insurance Company hereby acknowledges that by the making of such Contribution
by Separate Account, neither Insurance Company nor Separate Account is and
shall not be regarded as a creditor of the Trust and that the relationship of
debtor-creditor between the Trust and the Separate Account does not exist with
respect to the amount so contributed. Insurance Company agrees that the
Separate Account's interest in the Trust as a result of such Contribution
shall be neither senior to nor subordinate to the interests of owners of
variable annuity contracts issued with respect to the Separate Account and
that, in the event of liquidation of the Trust or the Separate Account,
however occurring, the Separate Account shall have no preferential rights of
any kind over such contract owners but shall share ratably with them.
IV
All commitments of the Insurance Company hereunder shall be forever binding
upon its successor or successors.
V
Insurance Company shall not withdraw the Contribution prior to five years from
the date hereof unless its annuity program is terminated and no more variable
annuity contracts are outstanding.
VI
The Trust hereby accepts such Contribution subject to the Terms of the
Agreement.
Executed this 20th day of March, 1996.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
By: /s/ FRED S. HUBBELL
__________________________________________
Fred S. Hubbell, Chairman, President and
Chief Executive Officer
EQUI-SELECT SERIES TRUST
By: /s/ PAUL R. SCHLAACK
_________________________________________
Paul R. Schlaack, President
AGREEMENT GOVERNING CONTRIBUTION OF WORKING CAPITAL
TO
EQUI-SELECT SERIES TRUST
BY
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
THIS AGREEMENT is made by and between Equi-Select Series Trust ("Trust"), a
Massachusetts Business Trust, and Equitable Life Insurance Company of Iowa
("Insurance Company").
WHEREAS, Insurance Company has established a variable annuity program which
will utilize Trust as an underlying investment; and
WHEREAS, Insurance Company desires that Trust have sufficient assets to be
able to efficiently invest in a diversified portfolio of securities; and
WHEREAS, the Insurance Company proposes to contribute $9,980,000 ("Working
Capital") to the Trust in the manner hereinafter described; and
WHEREAS, it is necessary and desirable that the terms under which said Working
Capital is contributed and the respective rights of the Insurance Company and
the Trust with respect thereto be determined;
NOW, THEREFORE, it is hereby agreed between Insurance Company for itself, and
on behalf of the Equitable Life Insurance Company of Iowa Separate Account A,
and the Trust as follows:
I
Insurance Company will provide for the contribution to the Trust the sum of
$9,980,000 to be divided equally between the Trust's Growth & Income Portfolio
and Value + Growth Portfolio (collectively the "Portfolios"). Insurance
Company hereby represents and agrees that such Working Capital is for
investment purposes and not for the purpose of redeeming or disposing of any
interest in the Trust resulting from such contribution. This Working Capital
is in addition to any minimum capital requirements imposed upon the Trust.
II
In consideration for the contribution of the Working Capital and without
deduction of any sales or other charges, the Trust shall credit Insurance
Company with shares. Such shares shall share pro rata in the investment
performance of each of the Portfolios and shall be subject to the same
valuation procedures and the same periodic charges as are other shares of such
portfolios of Trust.
III
Insurance Company hereby acknowledges that by the contribution of such Working
Capital, Insurance Company is not and shall not be regarded as a creditor of
the Trust and that the relationship of debtor-creditor between the Trust and
the Insurance Company does not exist with respect to the amount so
contributed. Insurance Company agrees that the contribution of the Working
Capital does not now and shall not in the future deem the Insurance Company,
the holder of any interest other than as provided in Section II of this
Agreement. Insurance Company agrees that its interest in the Trust as a
result of such Contribution shall be neither senior to nor subordinate to the
interests of owners of variable annuity contracts issued with respect to the
separate accounts of Insurance Company and that, in the event of liquidation
of the Trust, the Insurance Company shall have no preferential rights of any
kind over such contract owner's but shall share ratably with them.
IV
All Commitments of the Insurance Company hereunder shall be forever binding
upon its successor or successors.
V
Insurance Company may, at any time withdraw one dollar of contributed Working
Capital for each dollar of assets allocated to the Trust in the form of
purchase payments from annuity contracts owners or owners of other variable
insurance contracts offered by Insurance Company or an affiliated insurance
company of Insurance Company.
VI
The Trust hereby accepts the contribution of such Working Capital subject to
the terms of the Agreement.
Executed this 1st day of April, 1996.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
By: /s/ FRED S. HUBBELL
_________________________________________
Fred S. Hubbell, Chairman, President and
Chief Executive Officer
EQUI-SELECT SERIES TRUST
By: /s/ PAUL R. SCHLAACK
_________________________________________
Paul R. Schlaack, President
EX-99.B13
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
Equi-Select Money Market Subaccount
Calculation of Yield and Effective Yield
For the Seven Day Period from: 24-Dec-95 through 31-Dec-95
SUBACCOUNT DETAIL
Date AUV per Unit
___________ ______________
24-Dec-95 BOP AUV 10.438090
31-Dec-95 10.445643
PRO-RATION OF ANNUAL CONTRACT MAINTENANCE CHARGE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Total Annual Contract Maintenance Charge $ 30.00
Period pro-ration factor (7 / 365) 0.01918
---------
Portion attributable to a seven day period MM Average All Fund Avg 0.57534
Subaccount pro-ration factor 17,857.39 / 105,839.02 0.16872
---------
Portion attributable to Money Market Subaccount 0.09707
Allocation to assumed contract
Average assumed value of contract 10.445643
-------------
Average account balance 17,857.39 0.00058
Pro-rated annual contract maintenance charge 0.000057
=========
</TABLE>
CALCULATION OF YIELD
<TABLE>
<CAPTION>
<S> <C> <C>
Value of one accumulation unit - end of period
Value of one accumulation unit - end of period 10.445643
Deduct: Pro-rated annual contract maintenance charge (0.000057)
----------
Value after deductions* 10.445586
Base Period Return
Change in account value (Adjstd EOP - BOP) 0.007496
----------
Value of account - beginning of period 10.438090 0.000718
Yield (Base Period Return * 365 / 7) 3.74458%
Effective Yield [(1 + Base Period Return)^365/7] - 1 3.81418%
<FN>
* Deductions for M&E and Admin Charges are already reflected in calculation of
AUV.
</TABLE>
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
Smith Barney Money Market Subaccount
Calculation of Yield and Effective Yield
For the Seven Day Period from: 24-Dec-95 through 31-Dec-95
SUBACCOUNT DETAIL
Date AUV per Unit
___________ ______________
24-Dec-95 BOP AUV 10.224826
31-Dec-95 10.232310
PRO-RATION OF ANNUAL CONTRACT MAINTENANCE CHARGE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Total Annual Contract Maintenance Charge $ 30.00
Period pro-ration factor (7 / 365) 0.01918
---------
Portion attributable to a seven day period MM Average All Fund Avg 0.57534
Subaccount pro-ration factor 42,650.84 107,715.56 0.39596
---------
Portion attributable to Money Market Subaccount 0.22781
Allocation to assumed contract
Average assumed value of contract 10.232310
----------
Average account balance 42,650.84 0.00024
Pro-rated annual contract maintenance charge 0.000055
=========
</TABLE>
CALCULATION OF YIELD
<TABLE>
<CAPTION>
<S> <C> <C>
Value of one accumulation unit - end of period
Value of one accumulation unit - end of period 10.23231
Deduct: Pro-rated annual contract maintenance charge (0.000055)
----------
Value after deductions* 10.232255
Base Period Return
Change in account value (Adjstd EOP - BOP) 0.007429
----------
Value of account - beginning of period 10.224826 0.000727
Yield (Base Period Return * 365 / 7) 3.78852%
Effective Yield [(1 + Base Period Return)^365/7] - 1 3.85977%
<FN>
* Deductions for M&E and Admin Charges are already reflected in calculation of
AUV.
</TABLE>
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
TOTAL RETURN
P(1 + T)NTH POWER = ERV
VALUATION DATE:31-DEC-95
ONE YEAR ENDED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Total Average
Purchase Years Value of Annual Total
Subaccount Amount Invested Units Held Total Return Return
- ---------------------------------------------- --------- -------- ----------- -------------
EQUI-SELECT VARIABLE ANNUITY
Equi-Select Advantage SubAcct $1,000.00 1.00 $ 993.07 -0.69% -0.69%
Equi-Select Government Securities SubAcct $1,000.00 1.00 $ 1,080.39 8.04% 8.04%
Equi-Select International Fixed Income SubAcct $1,000.00 1.00 $ 1,065.91 6.59% 6.59%
Equi-Select International Stock SubAcct $1,000.00 1.00 $ 988.52 -1.15% -1.15%
Equi-Select Mortgage-Backed Sec SubAcct $1,000.00 1.00 $ 1,060.88 6.09% 6.09%
Equi-Select OTC SubAcct $1,000.00 1.00 $ 1,194.69 19.47% 19.47%
Equi-Select Research SubAcct $1,000.00 1.00 $ 1,264.82 26.48% 26.48%
Equi-Select Short-Term Bond SubAcct $1,000.00 1.00 $ 999.77 -0.02% -0.02%
Equi-Select Total Return SubAcct $1,000.00 1.00 $ 1,145.51 14.55% 14.55%
PRIMELITE VARIABLE ANNUITY
Smith Barney Income & Growth SubAcct $1,000.00 0.74 $ 1,119.69 16.45% 11.97%
Smith Barney International Equity SubAcct $1,000.00 0.77 $ 1,073.59 9.70% 7.36%
Smith Barney High Income SubAcct $1,000.00 0.68 $ 1,011.17 1.65% 1.12%
Equi-Select Research SubAcct $1,000.00 1.00 $ 1,262.15 26.22% 26.22%
</TABLE>
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
TOTAL RETURN
P(1 + T)NTH POWER = ERV
VALUATION DATE: 31-DEC-95
INCEPTION TO DATE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Total Average
Purchase Years Value of Annual Total
Subaccount Amount Invested Units Held Total Return Return
- ---------------------------------------------- --------- -------- ----------- ------------- -------
EQUI-SELECT VARIABLE ANNUITY
Equi-Select Advantage SubAcct $1,000.00 1.23 $ 1,008.44 0.68% 0.84%
Equi-Select Government Securities SubAcct $1,000.00 1.23 $ 1,100.90 8.11% 10.09%
Equi-Select International Fixed Income SubAcct $1,000.00 1.23 $ 1,080.99 6.52% 8.10%
Equi-Select International Stock SubAcct $1,000.00 1.23 $ 982.62 -1.41% -1.74%
Equi-Select Mortgage-Backed Sec SubAcct $1,000.00 1.23 $ 1,067.09 5.41% 6.71%
Equi-Select OTC SubAcct $1,000.00 1.23 $ 1,247.31 19.63% 24.73%
Equi-Select Research SubAcct $1,000.00 1.23 $ 1,235.25 18.69% 23.53%
Equi-Select Short-Term Bond SubAcct $1,000.00 1.23 $ 1,023.46 1.90% 2.35%
Equi-Select Total Return SubAcct $1,000.00 1.23 $ 1,130.04 10.42% 13.00%
PRIMELITE VARIABLE ANNUITY
Smith Barney Income & Growth SubAcct $1,000.00 0.74 $ 1,119.69 16.45% 11.97%
Smith Barney International Equity SubAcct $1,000.00 0.77 $ 1,073.59 9.70% 7.36%
Smith Barney High Income SubAcct $1,000.00 0.68 $ 1,011.17 1.65% 1.12%
Equi-Select Research SubAcct $1,000.00 1.23 $ 1,229.92 18.28% 22.99%
</TABLE>
SEC RULE 482 - TOTAL RETURN
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
ONE YEAR ENDED
VALUATION DATE: 31-DEC-95
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Equi-select Advantage SubAccount
Inception Date: 31 December 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
31 December 1994 Purchase $1,000.00 $10.084878 99.158 99.158 $1,000.00
31 December 1995 Annual Contract Maint Charge (3.78) 10.859933 (0.348) 98.810 1,073.07
31 December 1995 Withdrawal Charge 8.0% (80.00) 10.859933 (7.367) 91.444 993.07
31 December 1995 Remaining Value 10.859933 0.000 91.444 993.07
Equi-Select Government Securities SubAccount
Inception Date: 31 December 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
31 December 1994 Purchase $1,000.00 $10.110317 98.909 98.909 $1,000.00
31 December 1995 Annual Contract Maint Charge (2.31) 11.755307 (0.197) 98.712 1,160.39
31 December 1995 Withdrawal Charge 8.0% (80.00) 11.755307 (6.805) 91.907 1,080.39
31 December 1995 Remaining Value 11.755307 0.000 91.907 1,080.39
Equi-Select International Fixed Income SubAccount
Inception Date: 31 December 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
31 December 1994 Purchase $1,000.00 $10.061037 99.393 99.393 $1,000.00
31 December 1995 Annual Contract Maint Charge (1.94) 11.548579 (0.168) 99.225 1,145.91
31 December 1995 Withdrawal Charge 8.0% (80.00) 11.548579 (6.927) 92.298 1,065.91
31 December 1995 Remaining Value 11.548579 0.000 92.298 1,065.91
Equi-Select International Stock SubAccount
Inception Date: 31 December 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
31 December 1994 Purchase $1,000.00 $ 9.867051 101.347 101.347 $1,000.00
31 December 1995 Annual Contract Maint Charge (1.67) 10.559615 (0.158) 101.189 1,068.52
31 December 1995 Withdrawal Charge 8.0% (80.00) 10.559615 (7.576) 93.613 988.52
31 December 1995 Remaining Value 10.559615 0.000 93.613 988.52
Equi-Select Mortgage-Backed Securities SubAccount
Inception Date: 31 December 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
31 December 1994 Purchase $1,000.00 $ 9.987814 100.122 100.122 $1,000.00
31 December 1995 Annual Contract Maint Charge (2.40) 11.418854 (0.210) 99.912 1,140.88
31 December 1995 Withdrawal Charge 8.0% (80.00) 11.418854 (7.006) 92.906 1,060.88
31 December 1995 Remaining Value 11.418854 0.000 92.906 1,060.88
Equi-Select OTC SubAccount
Inception Date: 31 December 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
31 December 1994 Purchase $1,000.00 $10.349538 96.623 96.623 $1,000.00
31 December 1995 Annual Contract Maint Charge (2.01) 13.213195 (0.152) 96.471 1,274.69
31 December 1995 Withdrawal Charge 8.0% (80.00) 13.213195 (6.055) 90.417 1,194.69
31 December 1995 Remaining Value 13.213195 0.000 90.417 1,194.69
Equi-Select Research SubAccount
Inception Date: 31 December 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
31 December 1994 Purchase $1,000.00 $ 9.722913 102.850 102.850 $1,000.00
31 December 1995 Annual Contract Maint Charge (2.24) 13.097295 (0.171) 102.679 1,344.82
31 December 1995 Withdrawal Charge 8.0% (80.00) 13.097295 (6.108) 96.571 1,264.82
31 December 1995 Remaining Value 13.097295 0.000 96.571 1,264.82
Equi-Select Short-Term Bond SubAccount
Inception Date: 31 December 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
31 December 1994 Purchase $1,000.00 $10.146070 98.560 98.560 $1,000.00
31 December 1995 Annual Contract Maint Charge (2.12) 10.976991 (0.193) 98.367 1,079.77
31 December 1995 Withdrawal Charge 8.0% (80.00) 10.976991 (7.288) 91.079 999.77
31 December 1995 Remaining Value 10.976991 0.000 91.079 999.77
Equi-Select Total Return SubAccount
Inception Date: 31 December 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
31 December 1994 Purchase $1,000.00 $ 9.814543 101.890 101.890 $1,000.00
31 December 1995 Annual Contract Maint Charge (2.69) 12.054141 (0.223) 101.667 1,225.51
31 December 1995 Withdrawal Charge 8.0% (80.00) 12.054141 (6.637) 95.030 1,145.51
31 December 1995 Remaining Value 12.054141 0.000 95.030 1,145.51
Smith Barney Income & Growth SubAccount
Inception Date: 5 April 1995
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
5 April 1995 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (4.83) 12.045225 (0.401) 99.599 1,199.69
31 December 1995 Withdrawal Charge 8.0% (80.00) 12.045225 (6.642) 92.957 1,119.69
31 December 1995 Remaining Value 12.045225 0.000 92.957 1,119.69
Smith Barney International Equity SubAccount
Inception Date: 27 March 1995
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
27 March 1995 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (2.75) 11.563326 (0.238) 99.762 1,153.59
31 December 1995 Withdrawal Charge 8.0% (80.00) 11.563326 (6.918) 92.844 1,073.59
31 December 1995 Remaining Value 11.563326 0.000 92.844 1,073.59
Smith Barney High Income SubAccount
Inception Date: 28 April 1995
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
28 April 1995 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (3.06) 10.942309 (0.280) 99.720 1,091.17
31 December 1995 Withdrawal Charge 8.0% (80.00) 10.942309 (7.311) 92.409 1,011.17
31 December 1995 Remaining Value 10.942309 0.000 92.409 1,011.17
Equi-Select Research SubAccount
Inception Date: 31 December 1995
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
31 December 1994 Purchase $1,000.00 $ 9.722913 102.850 102.850 $1,000.00
31 December 1995 Annual Contract Maint Charge (4.90) 13.097295 (0.374) 102.476 1,342.15
31 December 1995 Withdrawal Charge 8.0% (80.00) 13.097295 (6.108) 96.367 1,262.15
31 December 1995 Remaining Value 13.097295 0.000 96.367 1,262.15
</TABLE>
SEC RULE 482 - TOTAL RETURN
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
SEPARATE ACCOUNT A
SINCE INCEPTION
VALUATION DATE: 31-DEC-95
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Equi-select Advantage SubAccount
Inception Date: 7 October 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
7 October 1994 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (7.55) 10.859933 (0.696) 99.304 1,078.44
31 December 1995 Withdrawal Charge 7.0% (70.00) 10.859933 (6.446) 92.859 1,008.44
31 December 1995 Remaining Value 10.859933 0.000 92.859 1,008.44
Equi-Select Government Securities SubAccount
Inception Date: 7 October 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
7 October 1994 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (4.63) 11.755307 (0.394) 99.606 1,170.90
31 December 1995 Withdrawal Charge 7.0% (70.00) 11.755307 (5.955) 93.652 1,100.90
31 December 1995 Remaining Value 11.755307 0.000 93.652 1,100.90
Equi-Select International Fixed Income SubAccount
Inception Date: 7 October 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
7 October 1994 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (3.87) 11.548579 (0.335) 99.665 1,150.99
31 December 1995 Withdrawal Charge 7.0% (70.00) 11.548579 (6.061) 93.603 1,080.99
31 December 1995 Remaining Value 11.548579 0.000 93.603 1,080.99
Equi-Select International Stock SubAccount
Inception Date: 7 October 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
7 October 1994 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (3.34) 10.559615 (0.316) 99.684 1,052.62
31 December 1995 Withdrawal Charge 7.0% (70.00) 10.559615 (6.629) 93.055 982.62
31 December 1995 Remaining Value 10.559615 0.000 93.055 982.62
Equi-Select Mortgage-Backed Securities SubAccount
Inception Date: 7 October 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
7 October 1994 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (4.80) 11.418854 (0.420) 99.580 1,137.09
31 December 1995 Withdrawal Charge 7.0% (70.00) 11.418854 (6.130) 93.450 1,067.09
31 December 1995 Remaining Value 11.418854 0.000 93.450 1,067.09
Equi-Select OTC SubAccount
Inception Date: 7 October 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
7 October 1994 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (4.01) 13.213195 (0.304) 99.696 1,317.31
31 December 1995 Withdrawal Charge 7.0% (70.00) 13.213195 (5.298) 94.399 1,247.31
31 December 1995 Remaining Value 13.213195 0.000 94.399 1,247.31
Equi-Select Research SubAccount
Inception Date: 7 October 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
7 October 1994 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (4.48) 13.097295 (0.342) 99.658 1,305.25
31 December 1995 Withdrawal Charge 7.0% (70.00) 13.097295 (5.345) 94.314 1,235.25
31 December 1995 Remaining Value 13.097295 0.000 94.314 1,235.25
Equi-Select Short-Term Bond SubAccount
Inception Date: 7 October 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
7 October 1994 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (4.24) 10.976991 (0.386) 99.614 1,093.46
31 December 1995 Withdrawal Charge 7.0% (70.00) 10.976991 (6.377) 93.237 1,023.46
31 December 1995 Remaining Value 10.976991 0.000 93.237 1,023.46
Equi-Select Total Return SubAccount
Inception Date: 7 October 1994
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
7 October 1994 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (5.38) 12.054141 (0.446) 99.554 1,200.04
31 December 1995 Withdrawal Charge 7.0% (70.00) 12.054141 (5.807) 93.747 1,130.04
31 December 1995 Remaining Value 12.054141 0.000 93.747 1,130.04
Smith Barney Income & Growth SubAccount
Inception Date: 5 April 1995
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
5 April 1995 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (4.83) 12.045225 (0.401) 99.599 1,199.69
31 December 1995 Withdrawal Charge 8.0% (80.00) 12.045225 (6.642) 92.957 1,119.69
31 December 1995 Remaining Value 12.045225 0.000 92.957 1,119.69
Smith Barney International Equity SubAccount
Inception Date: 27 March 1995
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
27 March 1995 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (2.75) 11.563326 (0.238) 99.762 1,153.59
31 December 1995 Withdrawal Charge 8.0% (80.00) 11.563326 (6.918) 92.844 1,073.59
31 December 1995 Remaining Value 11.563326 0.000 92.844 1,073.59
Smith Barney High Income SubAccount
Inception Date: 28 April 1995
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
28 April 1995 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (3.06) 10.942309 (0.280) 99.720 1,091.17
31 December 1995 Withdrawal Charge 8.0% (80.00) 10.942309 (7.311) 92.409 1,011.17
31 December 1995 Remaining Value 10.942309 0.000 92.409 1,011.17
Equi-Select Research SubAccount
Inception Date: 31 December 1995
Unit Units this Total Total
Date Transaction Type Rate Amount Value Transaction Units Held Value
- ---------------- ------------------------------------- ----- ---------- ---------- ------------ ---------- ---------
7 October 1994 Purchase $1,000.00 $10.000000 100.000 100.000 $1,000.00
31 December 1995 Annual Contract Maint Charge (9.81) 13.097295 (0.749) 99.251 1,299.92
31 December 1995 Withdrawal Charge 7.0% (70.00) 13.097295 (5.345) 93.907 1,229.92
31 December 1995 Remaining Value 13.097295 0.000 93.907 1,229.92
</TABLE>
EXHIBIT 99.B14
COMPANY ORGANIZATIONAL CHART
EQUITABLE ORGANIZATIONAL CHART
EQUITABLE OF IOWA COMPANIES - a publicly traded holding company which owns 100%
of the following:
1. Equitable Investment Services, Inc.
2. Locust Street Securities, Inc.
3. Equitable Life Insurance Company of Iowa
4. Tower Locust, Ltd.
5. Shiloh Farming Company
6. Equitable of Iowa Securities Network, Inc.
EQUITABLE AMERICAN INSURANCE COMPANY is a wholly owned subsidiary of
Equitable Life Insurance Company of Iowa.
EQUITABLE COMPANIES is a wholly owned subsidiary of Equitable Life Insurance
Company of Iowa.
USG ANNUITY & LIFE COMPANY is a wholly owned subsidiary of Equitable Life
Insurance Company of Iowa.
EQUITABLE CREATIVE SERVICES, LTD. is a wholly owned subsidiary of Equitable
American Insurance Company.
USGL SERVICE CORPORATION is a wholly owned subsidiary of USG Annuity & Life
Company.
YOUNKERS INSURANCE & INVESTMENTS, LTD. is a wholly owned subsidiary of
Equitable Companies.
EQUITABLE MARKETING SERVICES, INC. is a wholly owned subsidiary of Equitable
Companies.
CLC, LTD. is a subsidiary owned 75% by Equitable Companies.
EQUITABLE AMERICAN MARKETING SERVICES, INC. is a wholly owned subsidiary of
Equitable Companies.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 01
<NAME> MONEY MARKET ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 5,708,694
<INVESTMENTS-AT-VALUE> 5,708,694
<RECEIVABLES> 23,527
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,732,221
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 5,708,819
<SHARES-COMMON-PRIOR> 343,995
<ACCUMULATED-NII-CURRENT> 23,402
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 5,732,221
<DIVIDEND-INCOME> 173,300
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (47,365)
<NET-INVESTMENT-INCOME> 125,935
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 125,935
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 30,141,356
<NUMBER-OF-SHARES-REDEEMED> (24,880,569)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,386,722
<ACCUMULATED-NII-PRIOR> 1,504
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 02
<NAME> MORTGAGE-BACKED SECURITIES
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 4,182,777
<INVESTMENTS-AT-VALUE> 4,104,533
<RECEIVABLES> 234,987
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,339,520
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 4,200,698
<SHARES-COMMON-PRIOR> 28,737
<ACCUMULATED-NII-CURRENT> 217,066
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (78,244)
<NET-ASSETS> 4,339,520
<DIVIDEND-INCOME> 234,986
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (18,005)
<NET-INVESTMENT-INCOME> 216,981
<REALIZED-GAINS-CURRENT> 994
<APPREC-INCREASE-CURRENT> (77,915)
<NET-CHANGE-FROM-OPS> 140,060
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,178,329
<NUMBER-OF-SHARES-REDEEMED> (7,691)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,310,698
<ACCUMULATED-NII-PRIOR> 414
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 03
<NAME> INTERNATIONAL FIXED INCOME ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 3,405,258
<INVESTMENTS-AT-VALUE> 3,439,156
<RECEIVABLES> 160,411
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,599,567
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 3,415,456
<SHARES-COMMON-PRIOR> 51,238
<ACCUMULATED-NII-CURRENT> 150,213
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,898
<NET-ASSETS> 3,599,567
<DIVIDEND-INCOME> 172,046
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (22,087)
<NET-INVESTMENT-INCOME> 149,959
<REALIZED-GAINS-CURRENT> 4,271
<APPREC-INCREASE-CURRENT> 34,190
<NET-CHANGE-FROM-OPS> 188,420
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,366,214
<NUMBER-OF-SHARES-REDEEMED> (6,355)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,548,279
<ACCUMULATED-NII-PRIOR> 342
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 04
<NAME> OTC ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 9,015,055
<INVESTMENTS-AT-VALUE> 9,042,595
<RECEIVABLES> 994,102
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 10,036,697
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 9,076,800
<SHARES-COMMON-PRIOR> 653,787
<ACCUMULATED-NII-CURRENT> 932,357
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 27,540
<NET-ASSETS> 10,036,697
<DIVIDEND-INCOME> 994,102
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (61,044)
<NET-INVESTMENT-INCOME> 933,058
<REALIZED-GAINS-CURRENT> 36,066
<APPREC-INCREASE-CURRENT> 20,313
<NET-CHANGE-FROM-OPS> 989,437
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,420,919
<NUMBER-OF-SHARES-REDEEMED> (33,765)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 9,376,591
<ACCUMULATED-NII-PRIOR> (908)
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 05
<NAME> RESEARCH ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 14,644,800
<INVESTMENTS-AT-VALUE> 16,172,693
<RECEIVABLES> 274,255
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 16,446,948
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 14,724,226
<SHARES-COMMON-PRIOR> 687,853
<ACCUMULATED-NII-CURRENT> 194,829
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,527,893
<NET-ASSETS> 16,446,948
<DIVIDEND-INCOME> 274,255
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (84,136)
<NET-INVESTMENT-INCOME> 190,119
<REALIZED-GAINS-CURRENT> 19,662
<APPREC-INCREASE-CURRENT> 1,548,017
<NET-CHANGE-FROM-OPS> 1,757,798
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,048,677
<NUMBER-OF-SHARES-REDEEMED> (32,130)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,774,345
<ACCUMULATED-NII-PRIOR> 4,874
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 06
<NAME> TOTAL RETURN ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 14,460,627
<INVESTMENTS-AT-VALUE> 15,492,400
<RECEIVABLES> 329,442
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 15,821,842
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 14,542,050
<SHARES-COMMON-PRIOR> 324,709
<ACCUMULATED-NII-CURRENT> 248,019
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,031,773
<NET-ASSETS> 15,821,842
<DIVIDEND-INCOME> 329,442
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (82,966)
<NET-INVESTMENT-INCOME> 246,476
<REALIZED-GAINS-CURRENT> 6,083
<APPREC-INCREASE-CURRENT> 1,034,214
<NET-CHANGE-FROM-OPS> 1,286,773
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,282,645
<NUMBER-OF-SHARES-REDEEMED> (72,501)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,496,917
<ACCUMULATED-NII-PRIOR> 2,657
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 07
<NAME> ADVANTAGE ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 3,599,548
<INVESTMENTS-AT-VALUE> 3,499,215
<RECEIVABLES> 245,022
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,744,237
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 3,620,601
<SHARES-COMMON-PRIOR> 458,832
<ACCUMULATED-NII-CURRENT> 223,969
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (100,333)
<NET-ASSETS> 3,744,237
<DIVIDEND-INCOME> 245,168
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (25,445)
<NET-INVESTMENT-INCOME> 219,723
<REALIZED-GAINS-CURRENT> 15,065
<APPREC-INCREASE-CURRENT> (96,273)
<NET-CHANGE-FROM-OPS> 138,515
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,162,037
<NUMBER-OF-SHARES-REDEEMED> (15,339)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,285,213
<ACCUMULATED-NII-PRIOR> 4,252
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 08
<NAME> GOVERNMENT SECURITIES ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 603,887
<INVESTMENTS-AT-VALUE> 583,367
<RECEIVABLES> 77,967
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 661,334
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 636,052
<SHARES-COMMON-PRIOR> 14,354
<ACCUMULATED-NII-CURRENT> 45,802
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (20,520)
<NET-ASSETS> 661,334
<DIVIDEND-INCOME> 78,036
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (9,992)
<NET-INVESTMENT-INCOME> 68,044
<REALIZED-GAINS-CURRENT> 57,031
<APPREC-INCREASE-CURRENT> (20,436)
<NET-CHANGE-FROM-OPS> 104,639
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 932,770
<NUMBER-OF-SHARES-REDEEMED> (390,511)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 646,898
<ACCUMULATED-NII-PRIOR> 166
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 09
<NAME> INTERNATIONAL STOCK ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 5,412,698
<INVESTMENTS-AT-VALUE> 5,490,993
<RECEIVABLES> 227,777
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,718,770
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 5,450,703
<SHARES-COMMON-PRIOR> 233,072
<ACCUMULATED-NII-CURRENT> 189,772
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 78,295
<NET-ASSETS> 5,718,770
<DIVIDEND-INCOME> 228,324
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (38,228)
<NET-INVESTMENT-INCOME> 190,096
<REALIZED-GAINS-CURRENT> 9,684
<APPREC-INCREASE-CURRENT> 79,172
<NET-CHANGE-FROM-OPS> 278,952
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,263,440
<NUMBER-OF-SHARES-REDEEMED> (57,092)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,485,300
<ACCUMULATED-NII-PRIOR> 1,275
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 10
<NAME> SHORT-TERM BOND ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 332,138
<INVESTMENTS-AT-VALUE> 322,215
<RECEIVABLES> 29,396
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 351,611
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 343,325
<SHARES-COMMON-PRIOR> 11,577
<ACCUMULATED-NII-CURRENT> 18,209
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (9,923)
<NET-ASSETS> 351,611
<DIVIDEND-INCOME> 29,416
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (4,355)
<NET-INVESTMENT-INCOME> 25,061
<REALIZED-GAINS-CURRENT> 11,985
<APPREC-INCREASE-CURRENT> (9,796)
<NET-CHANGE-FROM-OPS> 27,250
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 463,287
<NUMBER-OF-SHARES-REDEEMED> (150,505)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 340,032
<ACCUMULATED-NII-PRIOR> 129
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 11
<NAME> INTERNATIONAL EQUITY ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 1,753,674
<INVESTMENTS-AT-VALUE> 1,785,234
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,785,234
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,757,418
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (3,744)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 31,560
<NET-ASSETS> 1,785,234
<DIVIDEND-INCOME> 2,011
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (5,755)
<NET-INVESTMENT-INCOME> (3,744)
<REALIZED-GAINS-CURRENT> (4)
<APPREC-INCREASE-CURRENT> 31,560
<NET-CHANGE-FROM-OPS> 27,812
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,757,422
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,785,234
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 12
<NAME> INCOME AND GROWTH ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 3,366,536
<INVESTMENTS-AT-VALUE> 3,554,954
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,554,954
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 3,319,871
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 46,665
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 188,418
<NET-ASSETS> 3,554,954
<DIVIDEND-INCOME> 59,488
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (12,823)
<NET-INVESTMENT-INCOME> 46,665
<REALIZED-GAINS-CURRENT> 106
<APPREC-INCREASE-CURRENT> 188,418
<NET-CHANGE-FROM-OPS> 235,189
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,319,842
<NUMBER-OF-SHARES-REDEEMED> (77)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,554,954
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 13
<NAME> HIGH INCOME ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 791,011
<INVESTMENTS-AT-VALUE> 790,940
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 790,940
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 760,190
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 30,821
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (71)
<NET-ASSETS> 790,940
<DIVIDEND-INCOME> 33,656
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (2,773)
<NET-INVESTMENT-INCOME> 30,883
<REALIZED-GAINS-CURRENT> 20
<APPREC-INCREASE-CURRENT> (71)
<NET-CHANGE-FROM-OPS> 30,832
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 761,719
<NUMBER-OF-SHARES-REDEEMED> (1,611)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 790,940
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF ASSETS, STATEMENTS OF OPERATIONS, STATEMENTS OF CHANGES IN
NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 14
<NAME> MONEY MARKET ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 1,277,892
<INVESTMENTS-AT-VALUE> 1,277,892
<RECEIVABLES> 1,633
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,279,525
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,275,454
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 4,071
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,279,525
<DIVIDEND-INCOME> 12,980
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (3,380)
<NET-INVESTMENT-INCOME> 9,600
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 9,600
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,007,403
<NUMBER-OF-SHARES-REDEEMED> (1,737,478)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,279,525
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
