<PAGE> 1
As filed with the Securities and Exchange Commission on November 5, 1998
Registration No. 033-79906
Registration No. 811-8550
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 8 [ X ]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 9 [ X ]
(Check appropriate box or boxes)
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WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 2
(Exact Name of Registrant)
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY
(Name of Depositor)
400 Broadway
Cincinnati, Ohio 45202
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number (513) 629-1800
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Copy to:
DONALD J. WUEBBLING, ESQ. MARK H. LONGENECKER, JR.
400 Broadway Frost & Jacobs LLP
Cincinnati, Ohio 45202 2500 PNC Center
(Name and Address of Agent for Service) 201 East Fifth Street
Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering: Continuous Offering
It is proposed that this filing will become effective (check appropriate box)
___ immediately upon filing pursuant to paragraph (b) of rule 485
on January 4, 1999 pursuant to paragraph (b) of Rule 485
XX 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 box:
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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Title of Securities Being Registered: Variable Annuity Contracts
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<PAGE> 2
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 2
TOUCHSTONE ADVISOR VARIABLE ANNUITY CONTRACT
CROSS-REFERENCE SHEET REQUIRED BY RULE 495(a)
<TABLE>
<CAPTION>
FORM N-4 PART A ITEM NO. HEADING IN PROSPECTUS
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<C> <S> <C>
1. Cover Page Cover Page
2. Definitions Glossary
3. Synopsis
(a) Fee and Expense Tables Fee and Expense Tables
(b) Synopsis Summary
4. Condensed Financial Information
(a) Accumulation Unit Values Accumulation Unit Values, Supplement A
(b) Performance Information Performance Information
(c) Financial Statements Other Information about your Contracts
5. General Description of Registrant,
Depositor and Portfolio Companies
(a) Depositor WSLAC and Separate Account 2
(b) Registrant WSLAC and Separate Account 2
(c) Portfolio Company Information about the Investment Options
(d) Prospectus Information about the Investment Options
(e) Voting Voting Rights
(f) Administrator Service Providers
6. Deductions and Expenses
(a) Deductions Charges
(b) Sales load Not Applicable
(c) Special purchase plans Purchasing Your Contract
(d) Commissions Service Providers
(e) Portfolio company expenses Information about the Investment Options
(f) Registrant's expenses Charges
</TABLE>
1
<PAGE> 3
<TABLE>
<CAPTION>
FORM N-4 PART A ITEM NO. HEADING IN PROSPECTUS
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<C> <S> <C>
7. General Description of Variable Annuity Contracts
(a) Rights Other Information about Your Contract
(b) Allocations, transfers and exchanges Purchasing Your Contract, Transferring Your
Money
(c) Changes in contracts or operations Information about the Investment Options
(d) Contract owner inquiries Summary
8. Annuity Period
(a) Level of benefits Annuity Income Payment Options
(b) Annuity commencement date Annuity Income Payment Options
(c) Annuity payments Annuity Income Payment Options
(d) Assumed investment return Not applicable
(e) Minimums Annuity Income Payment Options
(f) Rights to change options or Annuity Income Payment Options
transfer contract value
9. Death Benefit
(a) Death benefit calculation Guaranteed Death Benefit
(b) Forms of benefits Guaranteed Death Benefit
10. Purchases and Contract Value
(a) Procedures for purchases Purchasing Your Contract
(b) Accumulation unit values Accumulation Unit Values, Supplement A
(c) Calculation of accumulation unit values Valuation of Your Investments
(d) Principal underwriter Service Providers
</TABLE>
2
<PAGE> 4
<TABLE>
<CAPTION>
FORM N-4 PART A ITEM NO. HEADING IN PROSPECTUS
- -------------------------------------------------------------------------------------------------------
<C> <S> <C>
11. Redemptions
(a) Redemption procedures Accessing Your Money, Annuity Income
Payments Options
(b) Texas Optional Retirement Program Supplement C
(c) Delay Accessing Your Money, Other Information
about Your Contract
(d) Lapse Other Information about Your Contract
(e) Revocation rights Purchasing Your Contract
12. Taxes
(a) Tax consequences Federal Income Tax Information,
Supplement B, Supplement C
(b) Qualified plans Federal Income Tax Information,
Supplement B, Supplement C
(c) Impact of taxes Federal Income Tax Information,
Supplement B, Supplement C
13. Legal Proceedings Not Applicable
14. Table of Contents for Statement of Table of Contents of Statement of Additional
Additional Information Information
<CAPTION>
FORM N-4 PART B ITEM NO. HEADING IN SAI OR PROSPECTUS
- -------------------------------------------------------------------------------------------------------
<C> <S> <C>
15. Cover Page Cover Page (SAI)
16. Table of Contents Table of Contents (SAI)
17. General Information and History
(a) Name change Not Applicable
(b) Attribution of assets Not Applicable
(c) Control of depositor WSLAC and Separate Account 1 (Prospectus)
18. Services
(a) Fees, expenses and costs Not Applicable
(b) Management-related services Service Providers
(c) Custodian and independent Independent Accountants (SAI)
public accountant
(d) Other custodianship Not Applicable
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
FORM N-4 PART B ITEM NO. HEADING IN SAI OR PROSPECTUS
- -------------------------------------------------------------------------------------------------------
<C> <S> <C>
(e) Affiliated service agents Not Applicable
(f) Depositor as principal underwriter Not Applicable
19. Purchase of Securities Being Offered
(a) Manner of offering Distribution of the Contracts (SAI), Service
Providers (Prospectus)
(b) Sales Load Not Applicable
20. Underwriters Distribution of the Contracts (SAI), Service
Providers (Prospectus)
21. Calculation of Performance Data Sub-Account Performance (SAI)
22. Annuity Payments Fixed Annuity Income Payments (SAI)
23. Financial Statements
(a) Registrant Financial Statements (SAI)
(b) Depositor Financial Statements (SAI)
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of the Registration Statement.
4
<PAGE> 6
TOUCHSTONE ADVISOR VARIABLE ANNUITY
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY
SEPARATE ACCOUNT 2
COVER PAGE
PROSPECTUS DATED JANUARY 4, 1999
This Prospectus describes the Touchstone Advisor Variable Annuity
Contract and the investment options available to Contract owners. It contains
information you should know before purchasing a Contract and selecting your
investment options. Please read this Prospectus carefully and keep it for future
reference.
The Touchstone Advisor Variable Annuity Contract is issued by
Western-Southern Life Assurance Company (WSLAC). The Contract is an investment
alternative for investors who want to accumulate money on a tax-deferred basis
for retirement or other long-term goals.
You can purchase a Contract for $5,000 or more. You can also purchase a
Contract in connection with certain types of retirement plans, such as a
Traditional IRA or Roth IRA or a 403(b) plan, for $1,000 or more. The Contract
also includes a flexible purchase payment feature that allows you to make
additional payments later.
You tell us how to invest your payments. Your investment options
include the following Sub-Accounts:
- Emerging Growth
- International Equity
- Income Opportunity
- Value Plus
- Growth & Income
- Balanced
- Bond
- Standby Income
Each Sub-Account invests in a separately managed Fund. Each Fund is
part of the Touchstone Variable Series Trust.
The Statement of Additional Information dated January 4, 1999 contains
more information about the Contract, WSLAC and its Separate Account 2. It has
been filed with the Securities and Exchange Commission (SEC) and is legally part
of this Prospectus. The table of contents for the Statement of Additional
Information is located on page ___ of this Prospectus. For a free copy, call the
Touchstone Variable Annuity Service Center at 1-800-669-2796 (press 2).
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<PAGE> 7
The Securities and Exchange Commission maintains a web site
(http://www.sec.gov) that contains the Statement of Additional Information,
certain other material that is legally part of the registration statement of
Separate Account 2, and other information about Separate Account 2.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the Contracts or determined if this
Prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
The Contracts are not deposits or obligations of any bank. No bank has
guaranteed or endorsed the Contracts. The Contracts are not federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board, the
National Credit Union Share Insurance Fund or any other agency.
Investments in variable annuities involve investment risk, including
possible loss of principal and interest.
Page 2
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TABLE OF CONTENTS
PAGE
COVER PAGE..................................................................
TABLE OF CONTENTS...........................................................
GLOSSARY....................................................................
FEE AND EXPENSE TABLES......................................................
SUMMARY.....................................................................
PURCHASING YOUR CONTRACT....................................................
TRANSFERRING YOUR MONEY.....................................................
ACCESSING YOUR MONEY........................................................
CHARGES.....................................................................
INFORMATION ABOUT THE INVESTMENT OPTIONS....................................
VALUATION OF YOUR INVESTMENTS...............................................
PERFORMANCE INFORMATION.....................................................
ANNUITY INCOME PAYMENT OPTIONS..............................................
GUARANTEED DEATH BENEFIT....................................................
WSLAC AND SEPARATE ACCOUNT 2................................................
SERVICE PROVIDERS...........................................................
VOTING RIGHTS...............................................................
OTHER INFORMATION ABOUT YOUR CONTRACT.......................................
FEDERAL INCOME TAX INFORMATION..............................................
SUPPLEMENT A: ACCUMULATION UNIT VALUES......................................
SUPPLEMENT B: SECTION 401 PLANS AND SECTION 403(B) PLANS....................
SUPPLEMENT C: STATE OF TEXAS OPTIONAL RETIREMENT PROGRAM....................
TABLES OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION...................
BACK COVER..................................................................
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GLOSSARY
ACCUMULATION UNIT A unit of measure used to calculate a Contact
owner's share of a Sub-Account.
ACCUMULATION UNIT VALUE The dollar value of an Accumulation Unit in a
Sub-Account.
ANNUITANT The person whose life is used to determine the
amount of any annuity income payments and the
length of time for which the payments are made.
CODE The Internal Revenue Code of 1986, as amended.
CONTRACT The Touchstone Advisor Variable Annuity
Contract, including the application and any
amendments, riders or endorsements.
CONTRACT DATE The effective date of a Contract. The Contract
Date is shown on page 3 of your Contract.
CONTRACT VALUE At any given time, the value of all Accumulation
Units credited to the Sub-Accounts pursuant to
the Contract.
CONTRACT YEAR A year that starts on your Contract Date or the
anniversary of your Contract Date.
FUND Each Sub-Account invests in a Fund that has the
same investment objective as the Sub-Account.
Each Fund is part of a group of funds called
Touchstone Variable Annuity Trust.
INCOME DATE The date on which annuity payments are scheduled
to begin.
SUB-ACCOUNT A division of Separate Account 2. Each
Sub-Account invests in a Fund, which has the
same investment objective as the Sub-Account.
SURRENDER VALUE The Contract Value minus any contract
maintenance charge.
WSLAC, WE, OUR AND US Western-Southern Life Assurance Company.
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FEE AND EXPENSE TABLES
These tables describe the fees and expenses that you may pay directly or
indirectly if you purchase a Contract. More complete information about these
fees and expenses is located in the following sections of this Prospectus:
[insert cross references]
CONTRACT OWNER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
<S> <C>
MAXIMUM Contingent Deferred Sales Charge None
(as a percentage of amount surrendered or withdrawn)*
Annual Contract Maintenance Charge* $35.00
</TABLE>
SUB-ACCOUNT AND FUND EXPENSES (after expense reimbursement)**
<TABLE>
<CAPTION>
SUB-ACCOUNT EXPENSES FUND EXPENSES
MORTALITY AND CONTRACT ADVISOR FEE OTHER EXPENSES TOTAL
EXPENSE RISK ADMINISTRATION
CHARGES CHARGES
<S> <C> <C> <C> <C> <C>
Emerging Growth 0.70% 0.10% 0.80% 0.35% 1.95%
International Equity 0.70% 0.10% 0.95% 0.30% 2.05%
Income Opportunity 0.70% 0.10% 0.65% 0.20% 1.65%
Value Plus 0.70% 0.10% 0.75% 0.10% 1.65%
Growth & Income 0.70% 0.10% 0.80% 0.05% 1.65%
Balanced 0.70% 0.10% 0.80% 0.10% 1.70%
Bond 0.70% 0.10% 0.55% 0.20% 1.55%
Standby Income 0.70% 0.10% 0.25% 0.25% 1.30%
<FN>
*In certain states and for certain retirement plans, we can waive, reduce or
eliminate the annual contract maintenance charge.
**Sub-Account annual expenses are shown as a percentage of average account
value. Fund expenses are shown as a percentage of average daily net assets.
Touchstone Advisors has agreed to waive certain fees or reimburse each Fund for
certain expenses so that the Fund's total expenses do not exceed the percentage
listed in the table below in the column entitled "Fund Expenses (After
Reimbursement)". This agreement will remain in place until at least December 31,
1999. If Touchstone Advisors had not reimbursed the Funds, the total expenses of
each Fund in 1997 would have been higher, as shown in the following table in the
column entitled "Fund Expenses (Before Reimbursement)".
</TABLE>
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<TABLE>
<CAPTION>
FUND EXPENSES FUND EXPENSES
(BEFORE REIMBURSEMENT) (AFTER REIMBURSEMENT)
<S> <C> <C>
Emerging Growth 2.19% 1.15%
International Equity 3.19% 1.25%
Income Opportunity 1.72% 0.85%
Value Plus 2.85% 0.85%
Growth & Income 1.64% 0.85%
Balanced 2.04% 0.90%
Bond 1.69% 0.75%
Standby Income 1.48% 0.50%
</TABLE>
EXAMPLES
These examples should help you compare the cost of purchasing a Contract with
the cost of purchasing other variable annuity contracts.
The examples assume that you invest $1,000 in each Sub-Account, your investment
has a 5% return each year and the Fund's total expenses are the same as shown
above in the column entitled "Fund Expenses (After Reimbursement)." Your actual
costs may be higher or lower than the costs shown in the examples.
EXAMPLE 1 This example assumes that you surrender your Contract at the end
of the applicable time period.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Emerging Growth $23 $72 $124 $264
International Equity $24 $75 $129 $275
Income Opportunity $20 $63 $108 $232
Value Plus $20 $63 NA $NA
Growth & Income $20 $63 $108 $232
Balanced $21 $64 $110 $238
Bond $19 $60 $102 $222
Standby Income $17 $52 $ 89 $194
</TABLE>
EXAMPLE 2 This example assumes that you annuitize your Contract at the
end of the applicable time period and choose at least a 5-year
payout period.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Emerging Growth $23 $72 $124 $264
International Equity $24 $75 $129 $275
Income Opportunity $20 $63 $108 $232
Value Plus $20 $63 NA $NA
Growth & Income $20 $63 $108 $232
Balanced $21 $64 $110 $238
Bond $19 $60 $102 $222
Standby Income $17 $52 $ 89 $194
</TABLE>
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TOUCHSTONE ADVISOR VARIABLE ANNUITY CONTRACT
SUMMARY
This summary highlights some basic information about the Touchstone
Advisor Variable Annuity Contract. More information about the Contract is
located on pages __ through __ of this Prospectus.
HOW THE CONTRACT WORKS
The Contract is a contract between you and WSLAC. The Contract, like
all variable annuity contracts, has two phases: the accumulation phase and the
annuity income phase. During the accumulation phase, earnings on your investment
accumulate on a tax-deferred basis. The annuity income phase begins when you
start to receive annuity income payments. The amount of money you accumulate
during the accumulation phase determines the amount of the annuity income
payments you receive. You can select one of several annuity income payment
plans.
The Contract also provides a guaranteed death benefit that is payable
to a designated beneficiary when the Annuitant dies. Generally, the Contract
guarantees that the beneficiary will receive the greater of either the total
purchase payments less any withdrawals or the Contract Value, regardless of
investment performance.
WHO SHOULD PURCHASE THE CONTRACT
The Contract allows you to accumulate money on a tax-deferred basis for
retirement or other long-term goals through various investment options.
Generally, the higher your tax bracket, the more you will benefit from the
tax-deferred feature of the Contract. You should not purchase a Contract if you
are looking for a short-term investment or if you cannot take the risk of
getting less money back than you paid for the Contract. You may want to consult
a tax advisor or other investment professional before you purchase a Contract.
PURCHASING A CONTRACT
You can purchase a Contract for $5,000 or more. You can also purchase a
Contract in connection with certain types of retirement plans, such as a
Traditional or Roth IRA or a 403(b) plan, for $1,000 or more. The Contract also
includes a flexible purchase payment feature that allows you to make additional
payments later.
SELECTING YOUR INVESTMENT OPTIONS
You can allocate your purchase payments among the following
investment options, called Sub-Accounts. Depending on market conditions, you can
make or lose money in any Sub-Account.
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- Emerging Growth
- International Equity
- Income Opportunity
- Value Plus
- Growth & Income
- Balanced
- Bond
- Standby Income
TRANSFERRING AMONG INVESTMENT OPTIONS
You can transfer money from one investment option to another. Like all
variable annuities, transfers between investment options are tax-free. The
minimum transfer amount is $250. We limit the number of times you can transfer
between investment options in each Contract Year.
ACCESSING YOUR MONEY
You can access your money at any time during the accumulation phase.
The minimum withdrawal is $250.
Also be aware that you may be required to pay income taxes and a 10%
federal penalty tax on any amount you withdraw.
CHARGES AND FEES
A $35 contract maintenance charge is ordinarily deducted each year from
your Contract Value. Other administrative charges are deducted at an annual rate
of no more than 0.80% of your Contract Value. Also, you may indirectly pay
investment advisory fees.
10-DAY REVIEW PERIOD
You have 10 days to review your Contract after you receive it. If you
are not satisfied with your Contract, you can cancel it but must do so by
returning it to the Touchstone Variable Annuity Service Center at P.O. Box 2850,
Cincinnati, Ohio 45201-2850 within 10 days after you receive it. If you cancel
your Contract, in most cases we will refund the Contract Value to you. However,
some state laws may require us to refund your purchase payments.
ADDITIONAL INFORMATION
Representatives at the Touchstone Variable Annuity Service Center can
answer your questions about the Contract. You can call the Service Center at
1-800-669-2796 (press 2).
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ACCUMULATION UNIT VALUES
The Accumulation Unit Values for each Sub-Account other than Value Plus
are shown in Supplement A on page ____.
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PURCHASING YOUR CONTRACT
To obtain an application to purchase a Contract, please contact your
investment advisor or the Touchstone Variable Annuity Service Center by mail at
P.O. Box 2850, Cincinnati, Ohio 45201-2580 or by phone at 1-800-669-2796 (press
2).
MINIMUM AND MAXIMUM PURCHASE PAYMENTS
- You can purchase a Contract for $5,000 or more.
- You can also purchase a Contract in connection with certain
types of retirement plans, such as a Traditional or Roth IRA,
a 403(b) plan, a SIMPLE IRA (Savings Incentive Match Plans
for Employees), or a SEPs (Simplified Employee Pension
Plans), for $1,000 or more.
- You can make additional investments in your Contract at any
time before the Income Date. Each additional purchase payment
must be at least $1,000.
10-DAY REVIEW PERIOD
You have 10 days to review your Contract after you receive it. This
10-day review period is called the free look period. The state where you live
may require us to give you a longer free look period.
If you are not satisfied with the Contract, you can cancel it during
the free look period. To cancel the Contract, you must return it to the
Touchstone Variable Annuity Service Center at P.O. Box 2850, Cincinnati, Ohio
45201-2850 within 10 days after you receive it. If you cancel the Contract, in
most cases we will refund the Contract Value to you. However, some state laws
may require us to refund your purchase payments.
INVESTMENT OPTIONS
You decide how to allocate your purchase payments by selecting from the
following investment options, called Sub-Accounts.
- Emerging Growth
- International Equity
- Income Opportunity
- Value Plus
- Growth & Income
- Balanced
- Bond
- Standby Income
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ALLOCATION OF PURCHASE PAYMENTS
Your instructions are included in your application and shown on page 3
of your Contract. You can change your allocation instructions by contacting us
either by phone or in writing. When we receive a purchase payment from you, we
allocate it based on the most recent allocation instructions we have received
from you.
The following guidelines apply to the allocation of your purchase
payments:
- Allocate at least 5% of your initial purchase payment to each
investment option you choose.
- Use whole percentages. For example, you can allocate 33% or 34%
to an investment option, not 33 1/3%.
- Make sure your percentages total 100%.
Allocation Changes by Phone. You can change the allocation of your
future purchase payments over the phone by following these steps.
(1) Fill out either the telephone authorization part of the
application or a Telephone Authorization Form. You can get a
copy of either form by contacting the Touchstone Variable
Annuity Service Center. You must complete and return one of
these forms before you call to change your allocations over
the phone.
(2) Call the Touchstone Variable Annuity Service Center at
1-800-669-2796 (press 2) between 8:00 a.m. and 4:00 p.m.
Eastern Time.
(3) Give the representative the following information:
Your Social Security number
Your Contract number or other precise information that
identifies your Contract Your allocation instructions
Allocation Changes in Writing. You can also change the allocation of
your future purchase payments by writing to the Touchstone Variable Annuity
Service Center. Your written instructions must include the following
information:
- Your Contract number or other precise information that identifies
- your Contract Your allocation instructions
You should review your selected investment options and allocations
periodically to determine if they are appropriate considering market conditions
and your financial objectives.
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<PAGE> 17
TRANSFERING YOUR MONEY
You can transfer money from one investment option to another. You can
make transfers by phone or in writing.
The following guidelines apply to transfers other than dollar cost
averaging transfers:
- Each transfer must be at least $250.
- The allocation to each investment option must be at least 5% of
the total transfer amount.
- You can transfer money among the Sub-Accounts once every 30 days.
Transfers by Phone. You can transfer your money over the phone by
following these steps.
(1) Fill out either the telephone transfer authorization part of
the application or a Telephone Authorization Form. You can get
a copy of either form by contacting the Touchstone Variable
Annuity Service Center. You must complete and return one of
these forms before you call to change your allocations over
the phone.
(2) Call the Touchstone Variable Annuity Service Center at
1-800-669-2796 (press 2) between 8:00 a.m. and 4:00 p.m.
Eastern Time.
(3) Give the representative the following information:
- Your Social Security number
- Your Contract number or other precise information that
identifies your Contract
- Your transfer instructions
Transfers in Writing. You can also transfer your money by writing to
the Touchstone Variable Annuity Service Center. Your written instructions must
include the following information:
- Your Contract number or other precise information that identifies
- your Contract Your transfer instructions
THIRD PARTY AUTHORIZATION
You can authorize a third party to transfer money for you. To do so,
you must contact us at the Touchstone Variable Annuity Service Center at
1-800-669-2796 (press 2) to complete the appropriate written authorization.
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TOUCHSTONE'S DOLLAR COST AVERAGING PROGRAM
Dollar cost averaging is a method of investing equal amounts of money
at regular intervals. Dollar cost averaging allows you to purchase more
Accumulation Units when prices are low and fewer when prices are high. Dollar
cost averaging can result in a lower average cost of investing over time. While
dollar cost averaging does not guarantee a profit or prevent a loss, you have a
higher likelihood to profit from this long-term investment method. For dollar
cost averaging to be effective, you should continue to invest during both market
ups and downs. You should also consider your financial ability to maintain a
consistent level of investment over time.
Touchstone's Dollar Cost Averaging Program allows you to transfer
amounts at regular intervals from the Standby Income Sub-Account to other
Sub-Accounts. You can make the following transfers:
- A specific dollar amount
- A specific percentage of your money in the Standby Income
Sub-Account
- Earnings in the Standby Income Sub-Account
You select the number and the frequency of your transfers in
Touchstone's Dollar Cost Averaging Program. We will transfer the money on the
anniversary of your Contract Date each month or each quarter.
The following guidelines apply to dollar cost averaging transfers:
- Your Contract Value must be at least $10,000.
- Dollar cost averaging transfers must continue for at least 12
months.
- Each transfer must be at least $200.
- The allocation to each Sub-Account must be at least 5% of the
transfer amount.
To set up dollar cost averaging transfers, contact the Touchstone
Variable Annuity Service Center at 1-800-669-2796 (press 2) or P.O. Box 2850,
Cincinnati, Ohio 45201-2850.
Dollar cost averaging transfers will stop if we complete the number of
transfers you requested, you ask us to stop after using the program for at least
12 months, you do not have enough money in your accounts to complete the
transfer, or the program is discontinued. If we discontinue the program, you
will be allowed to complete the number of transfers you previously requested.
ACCESSING YOUR MONEY
Your Contract is designed to help you achieve your long-term investment
goals. However, there may be times when you need to access the money you have
invested in your Contract. You can access your money at any time during the
accumulation phase by making a partial withdrawal, by making systematic
withdrawals or by canceling your Contract.
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PARTIAL WITHDRAWALS
To withdraw money from your Contract, send written instructions to the
Touchstone Variable Annuity Service Center at P.O. Box 2850, Cincinnati, Ohio
45201-2580. For help with a partial withdrawal, please call the Service Center
at 1-800-669-2796 (press 2).
The following guidelines apply to partial withdrawals:
- Include your Contract number or other information that identifies
your Contract and the amount to be withdrawn in your instructions.
- Each withdrawal must be at least $250.
- If your Contract Value is reduced below $5,000 by the partial
withdrawal, we reserve the right to terminate your Contract by
paying you the Surrender Value.
CANCELING YOUR CONTRACT
You can cancel your Contract at any time during the accumulation phase.
When you cancel your Contract, we pay you the Surrender Value. This payment
terminates your Contract and our obligations under the Contract.
To cancel your Contract, send written instructions to the Touchstone
Variable Annuity Service Center at P.O. Box 2850, Cincinnati, Ohio 45201-2580.
Include your Contract number or other information that identifies your Contract
in your instructions. For assistance, please call the Service Center at
1-800-669-2796 (press 2).
The Surrender Value will equal the Contract Value, less any applicable
contract charge and premium taxes. Because investment performance and applicable
charges affect your Contract Value, the Surrender Value may be less than the
total of your purchase payments.
PENALTY TAXES
If you withdraw money from your Contract or cancel your Contract before
you or the Annuitant (as applicable) reach age 59 1/2, you generally will have
to pay a federal penalty tax. This tax is equal to 10% of the amount of the
payment you receive that is treated as taxable income. More information about
penalty taxes is located on page _____.
PROCESSING WITHDRAWALS
When we process your partial withdrawal, we withdraw money from each of
your investment options on a pro-rata basis. For example, if you have 25% of
your money in the Income Opportunity Sub-Account and 75% of your money in the
Balanced Sub-Account and you want to withdraw $2,000, we will withdraw $500 from
the Income Opportunity Sub-Account (25% of $2,000) and $1,500 from the Balanced
Sub-Account (75% of $2,000).
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<PAGE> 20
If you want us to process your withdrawal on a different basis, such as
withdrawing all the money from one Sub-Account, you must provide specific
instructions in your withdrawal request.
We will generally send payments to you within 7 days of the date that
we process your request. We may delay calculating the amount of the payment from
a Sub-Account or sending a payment from a Sub-Account for any of the following
reasons:
- The New York Stock Exchange is closed on a day that it normally
would be open.
- Trading on the New York Stock Exchange is restricted.
- Because of an emergency, it is not reasonably practicable for the
Sub-Accounts to sell securities or to fairly determine the value
of their investments.
- The SEC permits us to postpone payments from the Sub-Accounts for
your protection.
CHARGES
ADMINISTRATIVE CHARGES
We incur administrative costs in setting up your Contract, maintaining
records of your Contract and sending you confirmations and statements about your
Contract. By paying a contract maintenance charge and a contract administration
charge, you reimburse us for the administrative costs we expect to incur.
<TABLE>
<CAPTION>
CONTRACT MAINTENANCE CHARGE CONTRACT ADMINISTRATION CHARGE
--------------------------- ------------------------------
<S> <C> <C>
When Charged? On the anniversary of your Contract Date On each day the New York Stock
each year until annuity payments begin. Exchange is open for trading.
The date we start annuity payments.
The date you completely surrender your
Contract.
How Much Charged? $35 each year during the first 10 years The effective annual rate of the
of your Contract. charge is 0.10%.
How Charged? We reduce your Contract Value. The number We deduct this charge from the
of Accumulation Units you own in each Accumulation Unit Value of each
Sub-Account is reduced. Sub-Account.
</TABLE>
If we receive appropriate governmental approvals, we may reduce or
eliminate the contract maintenance charge.
MORTALITY AND EXPENSE RISK CHARGES
We assume two risks with every Contract: a mortality risk and an
expense risk. We take a mortality risk that the Annuitant will live longer than
expected or we will pay a death benefit greater than your Contract Value. We
also take an expense risk that the administrative charges will not pay all the
administrative costs of your Contract.
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<PAGE> 21
You pay us to assume these risks by paying mortality and expense risk
charges. On each Valuation Date, we deduct the mortality and expense risk
charges from the Accumulation Unit Value of each Sub-Account. The effective
annual rate of these charges is 0.70%, which includes 0.50% for assuming
mortality risk and 0.20% for assuming expense risk. If we do not actually incur
the risks associated with these charges, we will make money from collecting
these charges.
PREMIUM TAXES
Certain states and government authorities charge a premium tax on your
purchase payments. The premium tax may be as much as 3.5% of your purchase
payments. These premium taxes are charged either when you make purchase payments
or when we begin annuity payments.
Currently, we pay all of the premium taxes charged by states and
government authorities. However, we may decide to stop paying the premium taxes
in the future. We would then deduct the amount of the premium taxes from your
Contract Value at one of the following times when:
- We pay the premium tax.
- You surrender or withdraw money from your Contract.
- The death benefit is paid.
- Annuity payments begin.
INFORMATION ABOUT THE INVESTMENT OPTIONS
THE SUB-ACCOUNTS AND THE FUNDS
Each Sub-Account invests in a corresponding Fund of Touchstone Variable
Series Trust (TVST). Touchstone Advisors is the investment advisor for each
Fund. This table contains information about the investment objective and
Sub-Advisor of each Fund.
<TABLE>
<CAPTION>
FUNDS INVESTMENT OBJECTIVE SUB-ADVISORS
<S> <C> <C>
Emerging Growth The Fund seeks to increase the value of its shares David L. Babson & Company, Inc.
as a primary goal and to earn income as a Westfield Capital Management
secondary goal. Company, Inc.
International Equity The Fund seeks to increase the value of its BEA Associates
shares over the long-term.
Income Opportunity The Fund seeks to achieve a high level of current Alliance Capital Management L.P.
income as its main goal. The Fund may also seek
to increase the value of its shares, if consistent
with its main goal.
</TABLE>
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<PAGE> 22
<TABLE>
<S> <C> <C>
Value Plus The Fund seeks to increase the value of its shares Fort Washington Investment
over the long-term. Advisors, Inc.
Growth & Income The Fund seeks to increase the value of its shares Scudder Kemper Investments, Inc.
over the long-term, while receiving dividend
income.
Balanced The Fund seeks to achieve an increase in value and OpCap Advisors, Inc.
current income.
Bond The Fund seeks to provide a high level of Fort Washington Investment
dividends and distributions. Advisors, Inc.
Standby Income The Fund seeks to provide a higher level of Fort Washington Investment
current income than a money market fund, while Advisors, Inc.
preventing large fluctuations in the value of the
Sub-Account's initial investment. The Fund does
not try to keep a constant $1.00 per share net
asset value.
</TABLE>
More complete information about each Fund, including information about
its expenses, is included in the TVST Prospectus that is contained in this
booklet. Please read the TVST Prospectus carefully before you purchase a
Contract.
CHANGES IN THE SUB-ACCOUNTS AND THE FUNDS
We may add, delete or combine Sub-Accounts. New Sub-Accounts will
invest in Funds we consider suitable. We may also substitute a new Fund or
similar investment option for the Fund in which a Sub-Account invests. We would
make a substitution to ensure the underlying Fund continues to be a suitable
investment. A substitution may be triggered by unsatisfactory investment
performance, a change in laws or regulations, a change in a Fund's investment
objectives or restrictions, a change in the availability of the Fund for
investment, or any other reason. Before any substitution, we will obtain any
required approvals, including approval from the SEC or from Contract owners.
VALUATION OF YOUR INVESTMENTS
SUB-ACCOUNTS
- --------------------------------------------------------------------------------
ACCUMULATION UNIT A unit of measure used to calculate a Contact owner's
share of a Sub-Account. Although it is not the same
as a mutual fund share, it is similar.
- --------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE The dollar value of an Accumulation Unit in a
Sub-Account.
- --------------------------------------------------------------------------------
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The value of your interest in a Sub-Account is measured in Accumulation
Units. An Accumulation Unit is an accounting unit of measure. It is similar to a
share of a mutual fund. The value of an Accumulation Unit varies from day to day
depending on the investment performance of the Fund in which the Sub-Account is
invested and the expenses of the Sub-Account.
The Accumulation Unit Value of each Sub-Account is calculated on each
day that the New York Stock Exchange is open for business (Valuation Date). The
Accumulation Unit Value of a Sub-Account on any Valuation Date is calculated by
dividing the value of the Sub-Account's net assets by the number of Accumulation
Units credited to the Sub-Account on the Valuation Date.
When you allocate purchase payments to a Sub-Account, your Contract is
credited with Accumulation Units. Other transactions, such as withdrawals,
exchanges, and payments of the annual contract maintenance charge, will increase
or decrease the number of Accumulation Units credited to your Contract.
The number of Accumulation Units added to or subtracted from your
Contract is calculated by dividing the dollar amount of the transaction by the
Accumulation Unit Value for the Sub-Account at the close of trading on the
Valuation Date when we process the transaction. To calculate the Accumulation
Unit Value of a Sub-Account on any Valuation Date, we start with the
Accumulation Unit Value from the preceding Valuation Date and adjust it to
reflect the following items:
- The investment performance of the Sub-Account, which is based
on the investment performance of the corresponding Fund
- Any dividend or distributions paid by the corresponding Fund
- Any charges or credits for taxes that we determined were the
result of the investment operations of the Sub-Account
- The mortality and expense risk charge
- The contract administration charge
We reserve the right to change the number and value of the Accumulation
Units credited to your Contract so long as the change does not affect your
Contract Value or the benefits or other provisions of your Contract.
PERFORMANCE INFORMATION
We may include performance information for the Sub-Accounts in
advertisements, sales literature and reports to Contract owners. This
performance information will be based on historical performance. It is not
intended to predict the future performance of a Sub-Account.
STANDARDIZED PERFORMANCE INFORMATION
We usually advertise average annual total return. Average annual total
return represents the average compounded rate of return on a hypothetical
initial investment of $1,000. It is calculated by comparing the hypothetical
$1,000 investment in a Sub-Account to the
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<PAGE> 24
hypothetical surrender value of the investment at the end of a period. The
periods that we normally include are 1 year, 5 year and 10 year periods. If a
Contract has not been available for the complete period, we include the period
for which it was available.
Average annual total return reflects historical investment results and
expenses of the Sub-Account for a specific period. It also reflects any
surrender charge that you might pay if you surrendered your Contract at the end
of the period. It does not include any deductions for premium taxes.
NON-STANDARDIZED PERFORMANCE INFORMATION
We may use other performance information, such as cumulative total
return and total return for other periods of time. We may compare the
performance of a Sub-Account to the performance of other separate accounts or
investments as listed in rankings prepared by independent organizations that
monitor the performance of separate accounts and other investments. We may also
include evaluations of the Sub-Accounts published by nationally recognized
ranking services or by nationally recognized financial publications.
ANNUITY INCOME PAYMENT OPTIONS
ANNUITY PHASE
During the annuity phase, we will make periodic annuity income payments
based on the annuity income payment option you choose (1A, 1B, 2A, 2B) as
described below. In the Contract, we refer to annuity income payment options as
payout provisions.
DETERMINING THE INCOME DATE
Annuity income payments start on a specific date called the Income
Date. The Income Date is shown on page 3 of your Contract. If you do not select
an Income Date, the Income Date will be based on the birthday of the Annuitant.
The Annuitant is a natural person selected by you whose life is used to
determine the duration and amount of any annuity payments.
Generally, the Income Date is the first anniversary of your Contract
Date on or after the Annuitant's 80th birthday. If your Contract has not been in
effect for 10 years on the Annuitant's 80th birthday, the Income Date will be
the 10th anniversary of your Contract Date.
You can change the Income Date by writing to us. We must receive this
notice on or before the scheduled Income Date. Once annuity income payments
begin, you cannot change the Income Date.
CHOOSING THE PAYEE
You choose the person or persons to receive the annuity income
payments. If you do not select someone, the Annuitant will automatically receive
the annuity income payments. You can change the person you selected at any time
by writing to us. If the person you select to receive
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<PAGE> 25
annuity income payments dies, you will receive the annuity income payments
unless you select another payee.
DETERMINING THE PAYMENT AMOUNT
Annuity income payment amounts are based on the Surrender Value of your
Contract on the Income Date and the payment option you choose.
Under all payment plans, we guarantee that you will earn interest at a
minimum rate of 3% each year.
CHOOSING THE FREQUENCY
Generally, we make annuity income payments monthly. You can request
annuity income payments on a quarterly, semiannual, or annual basis. If the
Surrender Value of your Contract is less than $1,000, we make one annuity income
payment in an amount equal to the Surrender Value. If each periodic payment will
be less than $50, we will change the frequency of the payments to increase the
amount of each periodic payment to at least $50.
CHOOSING THE PAYMENT OPTION
You can select one of the four annuity income payment options described
below at any time before the Income Date. Some states may limit the availability
of payment options. You can change the payment option you selected by writing to
us. We must receive this notice on or before the scheduled Income Date. Once
annuity income payments begin, you cannot change your payment option.
If you do not elect an annuity payment plan, Life Income Option 2A
(monthly payments guaranteed for 10 years) will apply.
OVERVIEW OF ANNUITY INCOME PAYMENT OPTIONS
------------------------------------------
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------
INSTALLMENT INCOME OPTION 1A Fixed Period - you select the number of years.
- -----------------------------------------------------------------------------------------------------
INSTALLMENT INCOME OPTION 1B Fixed Amount - you select the amount of the monthly payment.
- -----------------------------------------------------------------------------------------------------
LIFE INCOME OPTION 2A One Life - we make payments as long as the Annuitant lives.
- -----------------------------------------------------------------------------------------------------
LIFE INCOME OPTION 2B Joint and Survivor - we make payments as long as either the
Annuitant or another designated person lives.
- -----------------------------------------------------------------------------------------------------
</TABLE>
ANNUITY INCOME PAYMENT OPTIONS
------------------------------
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<PAGE> 26
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------
INSTALLMENT INCOME FIXED PERIOD
OPTION 1A MONTHLY PAYMENT AMOUNT: Based on the Surrender Value of your Contract and the number of
years in the payment period. Your monthly payments will remain the same throughout the
payment period.
PAYMENT PERIOD: You select the number of years, but no more than 30.
SPECIAL RULE FOR QUALIFIED CONTRACT: Payment period may not extend beyond the life
expectancy of the Annuitant.
OPTION TO REQUEST LUMP SUM PAYMENT: Available at any time.
- ----------------------------------------------------------------------------------------------------------------
INSTALLMENT INCOME FIXED AMOUNT
OPTION 1B MONTHLY PAYMENT AMOUNT: You select the amount, which must be at least $5 for each $1,000 of
Surrender Value. For example, if your Surrender Value is $60,000, the minimum monthly
payment amount is $300 ($5 x $60). Your monthly payments will remain the same throughout
the payment period.
PAYMENT PERIOD: Payments are made until the entire amount, including interest, is paid.
SPECIAL RULE FOR QUALIFIED CONTRACT: Payment period may not extend beyond the life
expectancy of the Annuitant.
OPTION TO REQUEST LUMP SUM PAYMENT: Available at any time.
- ----------------------------------------------------------------------------------------------------------------
LIFE INCOME ONE LIFE
OPTION 2A MONTHLY PAYMENT AMOUNT: Based on the Surrender Value of your Contract, the age and sex
of the Annuitant on the date of the first payment, and the number of years chosen for
guaranteed payments. Your monthly payments will remain the same throughout the payment
period.
PAYMENT PERIOD: You select 10 or 20 years as the guaranteed payment period. We make
payments for as long as the Annuitant lives even if the Annuitant lives longer than the
selected period. For example, if you select a 10-year guaranteed payment period and the
Annuitant lives for 12 years, we make payments for 12 years.
SPECIAL RULE FOR QUALIFIED CONTRACT: Payment period may not extend beyond the life
expectancy of the Annuitant or the joint life expectancies of the Annuitants.
OPTION TO REQUEST LUMP SUM PAYMENT: Not available after the first payment is made.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 27
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------
LIFE INCOME JOINT AND SURVIVOR
OPTION 2B
MONTHLY PAYMENT AMOUNT: Based on the Surrender Value of your Contract and the age and
sex of the Annuitant and another designated person on the date of the first payment.
Your monthly payments will remain the same throughout the payment period.
PAYMENT PERIOD: Based on the lifetimes of the Annuitant and another designated person;
payments continue as long as either person is living. If either person dies before the
first payment, we make annuity payments during the survivor's lifetime under Life
Income Option 2A guaranteed for 10 years.
SPECIAL RULE FOR QUALIFIED CONTRACT: Payment period may not extend beyond the life
expectancy of the Annuitant or the joint life expectancies of the Annuitants.
OPTION TO REQUEST LUMP SUM PAYMENT: Not available after the first payment is made.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
GUARANTEED DEATH BENEFIT
If the Annuitant dies before the Income Date, we will pay a death
benefit.
You select one or more person(s) who will receive this death benefit.
These persons are called beneficiaries. You can change a beneficiary at any time
by writing to us.
To determine the death benefit amount, we must receive proof of death
of the Annuitant and payment instructions for the beneficiary. If we do not
receive payment instructions for the beneficiary within 60 days of receipt of
the proof of death, we may pay the beneficiary in one lump sum.
Based upon the date we receive the proof of death and payment
instructions, we calculate the amount of the death benefit according to the
following table.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
A. ANNUITANT DIES BEFORE ANNUITY PAYMENTS BEGIN, BEFORE THE FIRST DAY OF THE CALENDAR MONTH AFTER THE ANNUITANT'S
80TH BIRTHDAY, AND
- ------------------------------------------------------------------------------------------------------------------------
The death benefit amount will equal the greater of the following 2 amounts:
- The Contract Value on the date we receive proof of death of the Annuitant and payment instructions for the
beneficiary
- The sum of all purchase payments minus any amounts withdrawn, including any surrender charges on the
withdrawals
- ------------------------------------------------------------------------------------------------------------------------
B. ANNUITANT DIES BEFORE ANNUITY PAYMENTS BEGIN BUT ON OR AFTER THE FIRST DAY OF THE CALENDAR MONTH AFTER THE
ANNUITANT'S 80TH BIRTHDAY.
- ------------------------------------------------------------------------------------------------------------------------
The death benefit amount will equal the Contract Value on the day we receive proof of death of the Annuitant and
payment instructions for the beneficiary.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 28
If an Annuitant dies after annuity income payments begin, any remaining
benefits will be paid based on the annuity income payment option in effect for
the Contract.
WSLAC AND SEPARATE ACCOUNT 2
WSLAC
Western-Southern Life Assurance Company (WSLAC) is a stock life
insurance company organized under the laws of the State of Ohio on December 1,
1980. It is a wholly-owned subsidiary of The Western and Southern Life Insurance
Company, a mutual life insurance company originally organized under the laws of
the State of Ohio on February 23, 1888. Both companies issue insurance and
annuity contracts and are located at 400 Broadway, Cincinnati, Ohio 45202.
SEPARATE ACCOUNT 2
WSLAC established Separate Account 2 (SA2) under Ohio law on June 1,
1994. SA2 supports the Contracts and certain other variable annuity contracts
that it issues. SA2 is registered with the SEC as a unit investment trust. We
may operate SA2 as a management investment company or any other form permitted
by law. We may also deregister SA2 if registration with the SEC is no longer
required.
SA2 is currently divided into 8 Sub-Accounts: Emerging Growth,
International Equity, Income Opportunity, Value Plus, Growth & Income, Balanced,
Bond and Standby Income. SA2 holds the investments allocated to the Sub-Accounts
by the owners of the Contracts. It also holds assets for the benefit of owners
of certain other variable annuity contracts that it issues. SA2 invests the
assets of each Sub-Account in a Fund of the Touchstone Variable Series Trust
(TVST). The investment objective of a Sub-Account and the Fund in which it
invests are identical.
WSLAC owns SA2's assets but it separates SA2's assets from its general
account assets and the assets of its other separate accounts. Liabilities from
any other businesses conducted by WSLAC will not be charged to SA2's assets. We
hold SA2's assets exclusively for the benefit of owners and beneficiaries of the
Contracts and certain other variable annuity contracts issued by SA2. WSLAC is
obligated to pay all benefits provided under the Contracts.
The income, capital gains and capital losses of each Sub-Account are
credited to or charges against the assets of that Sub-Account without regard to
the income, capital gains or capital losses of any other Sub-Account or WSLAC.
SERVICE PROVIDERS
Touchstone Advisors, Inc. is the investment advisor for each Fund.
Subject to the review and approval of the Board of Trustees of Touchstone
Variable Series Trust, it selects the Sub-Advisors and regularly reviews the
investment strategies of each Sub-Advisor and the performance of each Fund. Its
address is 311 Pike Street, Cincinnati, Ohio 45202.
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<PAGE> 29
Investors Bank and Trust Company provides administrative and fund
accounting services to TVST. Its address is 200 Clarendon Street, Boston,
Massachusetts 02116.
Touchstone Securities, Inc. is the distributor of the Contracts. Its
principal business address is 311 Pike Street, Cincinnati, Ohio 45202.
Touchstone Securities is a wholly-owned subsidiary of IFS Financial Services,
Inc., a wholly-owned subsidiary of WSLAC.
Touchstone Securities pays sales commissions to persons or entities
that sell the Contracts. These persons are called dealers. Sales commissions may
be calculated as a percentage of the purchase payments received for a Contract
or a percentage of the Contact Value (sometimes called a trail commission).
Sales commissions may also be based on a dealer's total sales and other
performance factors (sometimes called production bonuses).
VOTING RIGHTS
Because each Sub-Account invests in a corresponding Fund of TVST, WSLAC
is entitled to vote at any meeting of the Fund's shareholders. WSLAC, on behalf
of SA2, votes the shares of a Fund that are held by a Sub-Account according to
the instructions of the owners of Contracts who have invested in that
Sub-Account.
If you have money in a Sub-Account on the record date for a meeting of
the shareholders of the corresponding Fund, we will ask you for voting
instructions. Your voting instructions will apply to a specific number of Fund
shares. We will calculate this number by determining the percentage of a
Sub-Account that you own and applying this percentage to the total number of
Fund shares that the Sub-Account owns.
We will mail materials to you at least 14 days before the shareholder
meeting so you can provide your voting instructions to us. If we do not receive
voting instructions from you, we will still vote the shares for which you are
entitled to provide instructions. We will vote these shares in the same
proportion as the voting instructions received by Contract owners who provide
instructions. If WSLAC itself is entitled to vote at the shareholder meeting, it
will vote its shares in the same manner.
We may not ask Contract owners for voting instructions if the
applicable rules and regulations change and permit us to vote the shares of a
Fund. We may also change the manner in which we calculate the number of shares
for which you can provide voting instructions if the applicable rules and
regulations change.
We may disregard the voting instructions of Contract owners under
certain circumstances and state insurance regulators may require us to disregard
these instructions under certain circumstances. If we disregard the voting
instructions we receive, we will include a summary of our actions in our next
report to you.
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<PAGE> 30
OTHER INFORMATION ABOUT YOUR CONTRACT
CONFIRMATIONS AND STATEMENTS
We will send you a confirmation of each purchase payment and other
transactions, such as transfers and partial withdrawals. We will also send you a
statement each year showing the value of your investment in the Sub-Accounts.
If you have invested money in a Sub-Account, you will also receive
semi-annual reports for SA2. These semi-annual reports will include a list of
portfolio securities held by the underlying Fund.
PROCESSING GUIDELINES
We use certain guidelines to determine when we will process your
Contract application and other instructions. These processing guidelines
determine your Contract Date and the effective date of instructions that you
send to us. The effective date depends upon the time of day we receive your
application or your instructions, whether the New York Stock Exchange is open at
that time and whether your applications and instructions are in good order.
If we receive an incomplete application or incomplete instructions from
you, we will contact you for more information. If we have not received all the
application information that we need within 5 days of the day we received your
application, we will return your initial purchase payment to you unless you tell
us not to return it.
If you are the sole owner of your Contract, you must sign your Contract
application and other instructions. If you and another person are joint owners
of your Contract, you and your joint owner must both sign your Contract
application and other instructions.
SECURITY PROCEDURES
We have established security procedures, such as recording telephone
calls. In the future we may also require a personal identification number (PIN).
We will not be liable for losses due to unauthorized or fraudulent telephone
instructions if we follow reasonable security procedures and reasonably believe
the instructions are genuine.
FINANCIAL STATEMENTS AND ADDITIONAL CONTRACT INFORMATION
Financial statements of WSLAC and SA2 are included in the Statement of
Additional Information along with additional information about the Contracts.
The table of contents of the Statement of Additional Information is included
below. For a free copy, call the Touchstone Variable Annuity Service Center at
1-800-669-2796 (press 2).
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<PAGE> 31
FEDERAL INCOME TAX INFORMATION
The following discussion summarizes the impact of certain federal
income tax laws on contributions to, earnings of and distributions from a
Contract. It is based on our understanding of these laws as they are currently
in effect and interpreted. It is not tax advice. YOU SHOULD CONSULT YOUR OWN TAX
ADVISOR BEFORE YOU PURCHASE A CONTRACT. Because this is a summary, it does not
contain all the information that may be important to you.
The impact of federal income taxes on your investment in a Contract
depends, among other things, on the following factors:
- WSLAC's tax status
- The tax status of the Contract
- Your tax status
- The tax status of your beneficiary
- The tax status of the person you select to receive annuity
payments
Your investment may also be affected by changes that occur in the
federal income tax laws and by other tax laws, such as state or local income tax
laws, federal estate and gift tax laws and local estate and other similar laws.
The effect of such other laws on your investment in a Contract are not discussed
in this summary.
The following discussion assumes "you" are the owner of a Contract.
I. TAX STATUS OF WSLAC
WSLAC is taxed as a life insurance company. Because the operations of
the SA1 are part of WSLAC, WSLAC is responsible for any federal income taxes
related to the income of the SA1 and its Sub-Accounts. You are responsible for
all taxes related to your investment in a Contract.
II. TAX STATUS OF THE CONTRACT
We believe that your Contract will be treated as an "annuity contract"
under the Internal Revenue Code (Code) and thus will provide the federal income
tax consequences discussed in this summary. We do not, however, guarantee the
tax status of any Contract. You bear the complete risk that your Contract may
not be treated as an "annuity contract" under the Code. A more detailed
discussion of various matters that might affect your Contract's status as an
"annuity contract" is included in the Statement of Additional Information.
If your Contract is not treated as an "annuity contract," the earnings
allocable to your investment in the Contract will be included in your income for
federal income tax purposes on a current basis, even if you have not yet
received payments from the Contract.
The discussions below entitled "Tax Treatment of Non-Qualified
Contracts" and "Tax Treatment of Qualified Contracts" will apply only if your
Contract is treated as an "annuity contract" under the Code.
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<PAGE> 32
III. TAX TREATMENT OF NON-QUALIFIED CONTRACTS
The information in this section of the Prospectus relates to Contracts
that are not purchased in connection with a retirement plan or program which
qualifies under Section 401, 403(b), 408, 408A or 457 of the Code. In this
section of the Prospectus, these Contracts will be called "Non-Qualified
Contracts."
A Non-Qualified Contract is intended to be a tax-deferred investment.
This means that, if the Contract qualifies as an "annuity contract" under the
Code, you will not have to include in income for federal income tax purposes the
investment earnings of your Non-Qualified Contract until you make a withdrawal
from the Contract, surrender it or start receiving annuity payments from it.
When you make a withdrawal from your Non-Qualified Contract, surrender it or
receive an annuity payment from it, you will have to include in income for
federal income tax purposes the portion of the payment that reflects investment
earnings (but no other part of the payment).
Different rules may apply to an owner of a Non-Qualified Contract that
is not a natural person, such as a corporation or trust. If the owner of a
Non-Qualified Contract is not a natural person, you should consult a tax advisor
for more information about these rules.
The following discussion in this section (III.A. through III.G.)
explains how the general principles of tax-deferred investing apply to a
Non-Qualified Contract, when the owner of such Contract is a natural
person. The discussion assumes at all times that your Non-Qualified Contract
will be treated as an "annuity contract" under the Code.
A. TAX TREATMENT OF PURCHASE PAYMENTS
Generally, any purchase payments that you invest in your Non-Qualified
Contract will not be deductible in determining your federal income tax.
B. TAX TREATMENT OF WITHDRAWALS, SURRENDERS AND DISTRIBUTIONS
You will generally have to include in income for federal income tax
purposes the portion of any payment from your Non-Qualified Contract that
exceeds the portion of the cost basis (or principal) of the Contract which is
allocable to such payment. The cost basis of your Non-Qualified Contract is
generally the sum of your purchase payments for the Contract. The difference
between the cost basis and the value of your Non-Qualified Contract represents
the increase in the value of the Contract. The taxable portion of a payment from
your Non-Qualified Contract is generally taxed at your marginal income tax rate.
1. TAX TREATMENT OF PARTIAL WITHDRAWALS AND SURRENDERS
PARTIAL WITHDRAWALS. A partial withdrawal refers to a withdrawal from
your Non-Qualified Contract that is less than its total value and is not paid in
the form of an annuity. Usually, a partial withdrawal of the value of your
Non-Qualified Contract will be treated
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<PAGE> 33
as coming first from earnings (which represent the increase in the value of the
Contract). This portion of the withdrawal will be included in your income for
federal income tax purposes.
After the earnings portion is exhausted, the remainder of the partial
withdrawal will be treated as coming from your principal in the Contract
(generally the sum of the purchase payments). This portion of the withdrawal
will not be included in your income for federal income tax purposes.
If your Non-Qualified Contract contains investments made prior to
August 14, 1982, a partial withdrawal from the Contract will be treated, to the
extent it is allocable to such pre-August 14, 1982 investments, as coming first
from principal and then, only after the principal portion is exhausted, from
earnings.
SURRENDERS. If you surrender your Non-Qualified Contract and receive a
lump sum payment of its entire value, the portion of the payment that exceeds
your then remaining cost basis in the Contract will be included in your income
for federal income tax purposes. You will not include in income for federal
income tax purposes the part of the payment that is equal to such cost basis.
2. TAX TREATMENT OF ANNUITY PAYMENTS
If you receive annuity payments from your Non-Qualified Contract, a
fixed portion of each payment is generally excludable from income for federal
income tax purposes as a tax-free recovery of your cost basis in the Contract
and the balance is included in income for such purposes.
The portion of the payment that is excludable from income is determined
under detailed rules provided in the Code (which in general terms determine such
excludable amount by dividing your cost basis in the Contract at the time the
annuity payments begin by the expected return under such Contract).
If the annuity payments continue after your cost basis has been
recovered, such additional payments will generally be included in full in income
for federal income tax purposes.
C. PENALTY TAX ON DISTRIBUTIONS
Generally, a penalty equal to 10% of the amount of any payment that is
includable in your income for federal income tax purposes will apply to any
distribution you receive from a Non-Qualified Contract in addition to ordinary
income tax.
This 10% penalty will not apply, however, if the distribution meets
certain conditions. Some of the distributions that are excepted from the 10%
penalty are listed below:
- A distribution that is made on or after the date you reach age
59 1/2
- A distribution that is made on or after your death
- A distribution that is made when you are totally disabled
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<PAGE> 34
- A distribution that is made as part of a series of
substantially equal periodic payments which are made at least
annually for your life (or life expectancy) or the joint lives
(or joint life expectancies) of you and your joint Annuitant
under the Contract
- A part of a distribution that is attributable to your
investment in the Contract prior to August 14, 1982
- A distribution that is paid as an immediate annuity (within
the meaning of Section 72(u)(4) of the Code)
D. TAX TREATMENT OF ASSIGNMENTS
An assignment or pledge by you of your Non-Qualified Contract may be
treated as if it were a payment to you of all or part of the value of the
Contract and therefore may be a taxable event. You should consult your own tax
advisor before you assign or pledge your Non-Qualified Contract.
E. REQUIRED DISTRIBUTIONS
To qualify as an "annuity contract" under the Code, your Non-Qualified
Contract must meet certain distributions requirements in the event you die.
Generally, if you die before annuity payments begin, the amounts
accumulated under your Non-Qualified Contract either must be distributed within
5 years of your death or must begin to be paid within one year of your death
under a method that will pay the entire value of the Contract over the life (or
life expectancy) of your beneficiary under the Contract.
Special rules apply, however, if your beneficiary under the Contract is
your surviving spouse. If your spouse is your beneficiary under the Contract,
these rules involving required distributions in the event of death will be
applied as if your surviving spouse had been the original owner of the Contract.
If you die after annuity payments have begun, payments generally must
continue at least as rapidly as under the method in effect at your death (unless
such method provides that payments stop at your death).
F. WITHHOLDING
Payments received from your Non-Qualified Contract are generally
subject to federal income tax withholding, unless you elect not to have taxes
withheld and you notify us that you are making this election.
G. MULTIPLE NON-QUALIFIED CONTRACTS
All Non-Qualified Contracts that are issued to you within a calendar
year period are generally treated as one Contract for purposes of determining
the tax consequences of any distribution, and this may cause adverse or
unanticipated tax consequences. As a result, you
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<PAGE> 35
should consult a tax advisor before purchasing more than one Non-Qualified
Contract in any calendar year period in order to discuss the effect of such
multiple purchases.
IV. TAX TREATMENT OF QUALIFIED CONTRACTS
The information in this section of the Prospectus relates to Contracts
that are purchased in connection with certain retirement plans. In this section
of the Prospectus, these retirement plans will be called "Qualified Plans" and
Contracts purchased in connection with Qualified Plans will be called "Qualified
Contracts."
A Qualified Contract is intended to be a tax-deferred investment. This
means that, if the Qualified Contract and the Qualified Plan under which it was
purchased meet certain applicable rules of the Code, you will not have to
include in income for federal income tax purposes the investment earnings of
your Qualified Contract until you make a withdrawal from the Contract, surrender
it or start receiving annuity payments from it.
When you make a withdrawal from your Qualified Contract, surrender it
or receive an annuity payment from it, you will generally have to include in
income for federal income tax purposes the entire amount of the payment (except
to the extent it reflects your own "after-tax" contributions to the Contract or
any other cost basis you may have under the Contract).
A. TYPES OF QUALIFIED CONTRACTS
The Qualified Contracts are designed to be suitable for use with the
following types of Qualified Plans:
- Traditional IRAs (individual retirement annuities under
Section 408 of the Code)
- Roth IRAs (individual retirement annuities under Section 408A
of the Code)
- Section 401 Plans (plans qualified under Section 401(a) of the
Code, such as profit sharing plans, including so-called
401(k) plans and money purchase pension plans)
- Section 403(b) Plans (tax-sheltered annuities under Section
403(b) of the Code)
- Section 457 Deferred Compensation Plans (deferred
compensation plans under Section 457 of the Code)
- SEPs (Simplified Employee Pension Plans under Section 408(k)
of the Code)
- Simple IRAs (Savings Incentive Match Plans for Employees under
Section 408(p) of the Code)
- Texas ORP (State of Texas Optional Retirement Program plans)
Because of the minimum purchase payment requirements, Qualified
Contracts may not be appropriate for some retirement plans.
B. LIMITATIONS IMPOSED BY THE CODE OR THE QUALIFIED PLAN
In most cases, the Code places limitations and restrictions on how a
Qualified Plan can be designed and operated. These limitations and restrictions
relate to various issues, including:
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- Amounts of allowable contributions
- Form, manner and timing of distributions
- Vesting and nonforfeitability of interests
- Nondiscrimination in eligibility, participation, contributions
and benefits
- Tax treatment of distributions, withdrawals and surrenders
- Withdrawal from the plan, such as while the plan participant
is still employed by the employer of the plan
- Receipt and taxation of loans
A Qualified Contract that is issued under or in connection with a
Qualified Plan is subject to the terms and conditions of the Qualified Plan. If
the information in the Qualified Plan documents differs from the information in
the Qualified Contract, you should rely on the information in the Qualified
Plan.
C. TAX CONSEQUENCES OF PARTICIPATING IN A QUALIFIED PLAN
The tax consequences of participating in a Qualified Plan vary with the
type of plan and the terms and conditions of the plan. Various penalty and
excise taxes may apply to contributions to or distributions from a Qualified
Contract if the contributions or distributions violate the limitations of the
Qualified Plan or the Code. Certain restrictions and penalties may apply to
withdrawals and surrenders from a Qualified Contract.
THE TAX RULES REGARDING QUALIFIED PLANS ARE COMPLEX, CHANGE FREQUENTLY
AND WILL HAVE DIFFERENT APPLICATIONS DEPENDING ON INDIVIDUAL FACTS AND
CIRCUMSTANCES. YOU SHOULD CONSULT YOUR OWN TAX ADVISORS BEFORE YOU PURCHASE A
QUALIFIED CONTRACT.
TRADITIONAL AND ROTH IRAS. To help you understand the tax consequences
of purchasing a Qualified Contract in connection with a Traditional IRA or a
Roth IRA, we will provide you with an IRA Disclosure Statement.
SECTION 401 PLANS AND SECTION 403(b) PLANS. To help you understand the
tax consequences of purchasing a Qualified Contract in connection with a Section
401 Plan or a Section 403(b) Plan, we have included a supplement in this
Prospectus as to such Plans. The supplement summarizes certain federal income
tax laws and is based on our understanding of these laws. Because the supplement
is a summary, it does not contain all the information that may be important to
you. The supplement is for general informational purposes only.
TEXAS OPTIONAL RETIREMENT PROGRAM. To help you understand the tax
consequences of purchasing a Qualified Contract in connection with the Texas
Optional Retirement Program, we have included a supplement in this Prospectus as
to this Program. The supplement summarizes certain state and federal income tax
laws and is based on our understanding of these laws. Because the supplement is
a summary, it does not contain all the information that may be important to you.
The supplement is for general informational purposes only.
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OTHER QUALIFIED PLANS. You should contact your own tax advisor for more
information about the tax consequences of investing in a Qualified Contract in
connection with a Section 457 Deferred Compensation Plan, a SEP or a Simple IRA.
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SUPPLEMENT A
ACCUMULATION UNIT VALUES
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT A unit of measure used to calculate a Contact owner's share of a
Sub-Account. Although it is not the same as a mutual fund share, it is
similar.
- -------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE The dollar value of an Accumulation Unit in a Sub-Account.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The Accumulation Unit Values shown in the table below are for an
Accumulation Unit outstanding throughout the periods. An explanation of how
Accumulation Unit Value is calculated is located on page ___ in this Prospectus.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Years Ended December 31 Unit Value at Unit Value at End of Number of Units at
Beginning of Year Year End of Year
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Emerging Growth
- ------------------------------------------------------------------------------------------------
1995* 10.000000 11.741102 2,008
- ------------------------------------------------------------------------------------------------
1996 11.741102 12.947664 4,066
- ------------------------------------------------------------------------------------------------
1997 12.947664 17.169847 15,058
- ------------------------------------------------------------------------------------------------
International Equity
- ------------------------------------------------------------------------------------------------
1995* 10.000000 11.282669 2,158
- ------------------------------------------------------------------------------------------------
1996 11.282669 12.475967 4,538
- ------------------------------------------------------------------------------------------------
1997 12.475967 14.203413 10,507
- ------------------------------------------------------------------------------------------------
Income Opportunity
- ------------------------------------------------------------------------------------------------
1995* 10.000000 12.572866 2,048
- ------------------------------------------------------------------------------------------------
1996 12.572866 15.886632 3,590
- ------------------------------------------------------------------------------------------------
1997 15.886632 17.673231 58,064
- ------------------------------------------------------------------------------------------------
Growth & Income
- ------------------------------------------------------------------------------------------------
1995* 10.000000 12.533949 2,623
- ------------------------------------------------------------------------------------------------
1996 12.533949 14.291347 4,690
- ------------------------------------------------------------------------------------------------
1997 14.291347 16.995828 15,766
- ------------------------------------------------------------------------------------------------
Balanced
- ------------------------------------------------------------------------------------------------
1995* 10.000000 12.018023 1,771
- ------------------------------------------------------------------------------------------------
1996 12.018023 13.922266 3,958
- ------------------------------------------------------------------------------------------------
1997 13.922266 16.382306 10,276
- ------------------------------------------------------------------------------------------------
Bond
- ------------------------------------------------------------------------------------------------
1995* 10.000000 11.309517 1,615
- ------------------------------------------------------------------------------------------------
1996 11.309517 11.505592 2,904
- ------------------------------------------------------------------------------------------------
1997 11.505592 12.322051 7,005
- ------------------------------------------------------------------------------------------------
Standby Income
- ------------------------------------------------------------------------------------------------
1995* 10.000000 10.364840 1,059
- ------------------------------------------------------------------------------------------------
1996 10.364840 10.819908 19,762
- ------------------------------------------------------------------------------------------------
1997 10.819908 11.314893 11,233
- ------------------------------------------------------------------------------------------------
<FN>
*Operations began on February 23, 1995
</TABLE>
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SUPPLEMENT B
FEDERAL INCOME TAX INFORMATION
SECTION 401 PLANS AND SECTION 403(B) PLANS
Section 401(a) of the Code permits sole proprietorships, partnerships,
corporations and certain other organizations operating businesses to establish
various types of Qualified Plans (called Section 401 Plans in this Supplement)
for their employees (and, if applicable, those self-employed persons working in
the businesses). A Qualified Contract may be purchased to provide benefits to a
participant in a Section 401 Plan.
Section 403(b) of the Code permits public schools and certain
charitable, educational and scientific organizations described in Section
501(c)(3) of the Code to purchase Qualified Contracts as "tax-sheltered
annuities" (called Section 403(b) Plans in this Supplement) for their employees.
The Code places limitations and restrictions on all Section 401 and
Section 403(b) Plans, but the specific rules set forth in the applicable plan
will also affect how the plan works. Because the provisions of Section 401 Plans
and Section 403(b) Plans vary from plan to plan, you should contact your plan
administrator for additional information. If the information in the Qualified
Plan documents differs from the information in the Qualified Contract or in this
Supplement, you should rely on the information in the Qualified Plan documents.
This discussion explains certain federal income tax rules applicable to
a Qualified Contract purchased in connection with a Section 401 Plan or a
Section 403(b) Plan. This discussion assumes at all times that the Contract
qualifies as an "annuity contract" and a "Qualified Contract," and that the plan
to which it relates qualifies as a "Qualified Plan" under the Code.
A. TAX TREATMENT OF CONTRIBUTIONS
Other than "after-tax" contributions made by you to a Section 401 Plan,
contributions to a Section 401 Plan or a Section 403(b) Plan generally are NOT
included in your income for federal income tax purposes until the contributions
are distributed from the plan, provided such contributions are not in excess of
any benefit, contribution or nondiscrimination limits that apply to the plan.
B. TAX TREATMENT OF DISTRIBUTIONS
Any distributions from Qualified Contracts purchased in connection with
Section 401 Plans or Section 403(b) Plans generally are included in income for
federal income tax purposes as ordinary income, except to the extent the
distributions are allocable to your after-tax contributions.
SPECIAL TAX TREATMENT FOR LUMP SUM DISTRIBUTIONS FROM A SECTION 401
PLAN. If you receive (or your beneficiary receives) an amount from a Qualified
Contract as part of a
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<PAGE> 40
distribution from a Section 401 Plan and the distribution qualifies as a lump
sum distribution under the Code, the portion of the distribution that is
included in income may be eligible for special tax treatment. The plan
administrator should provide you with information about the tax treatment of a
lump sum distribution at the time you receive such a distribution.
SPECIAL RULES FOR DISTRIBUTIONS THAT ARE ROLLED OVER. In addition,
special rules apply to a distribution from a Qualified Contract that relates to
a Section 401 Plan or a Section 403(b) Plan if such distribution is properly
rolled over in accordance with the provisions of the Code. These provisions
contain various requirements, including the requirement that the rollover be
made directly from the distributing plan or within 60 days of receipt:
- to a Traditional IRA or to an individual retirement account
under Section 408 of the Code,
- to another Section 401 Plan or a certain kind of annuity plan
under Section 403(a) of the Code (if the distribution is from
a Section 401 Plan) or
- to a Section 403(b) Plan (if the distribution is from a
Section 403(b) Plan).
These special rules only apply to distributions that qualify as
"eligible rollover distributions" under the Code. In general, a distribution
from a Section 401 Plan or Section 403(b) Plan will be an eligible rollover
distribution EXCEPT to the extent:
- it represents the return of your "after-tax" contributions or
is not otherwise includable in income,
- it is part of a series of payments made for your life (or life
expectancy) or the joint lives (or joint life expectancies) of
you and your beneficiary under the plan or for a period of
less than ten years,
- it is a required minimum distribution under Section 401(a)(9)
of the Code as described below, or
- it is made from a Section 401 Plan by reason of a hardship.
Required minimum distributions under Section 401(a)(9) include the
following required payments:
- Required payments for the calendar year in which you reach age
70 1/2 or any later calendar year
- If the plan is a Section 401 Plan that is not maintained by
certain governmental or church-sponsored organizations and if
you are not treated under the Code as owning 5% or more of the
employer of the applicable plan, required payments for
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<PAGE> 41
the later of the calendar year in which you reach age 70 1/2
or the calendar year you terminate employment with the
employer or for any later calendar year.
The administrator of the applicable Section 401 Plan or Section 403(b)
Plan should provide additional information about these rollover tax rules when a
distribution is made.
DISTRIBUTIONS IN THE FORM OF ANNUITY PAYMENTS. If any distribution is
made from a Qualified Contract that relates to a Section 401 Plan or Section
403(b) Plan and is made in the form of annuity payments (and is not eligible for
rollover or is not in any event rolled over), a fixed portion of each payment is
generally excludable from income for federal income tax purposes to the extent
it is treated as allocable to your "after-tax" contributions to the Contract
(and any other cost basis you have in the Contract). To the extent the payment
exceeds such portion, it is includable in income for federal income tax
purposes.
The portion of the annuity payment that is excludable from income is
determined under detailed rules provided in the Code. In very general terms,
these detailed rules determine such excludable amount by dividing your
"after-tax" contributions and other cost basis in the Contract that remain in
the plan at the time the annuity payments begin by the anticipated number of
payments to be made under the Contract. If the annuity payments continue after
the number of anticipated payments has been made, such additional payments will
generally be included in full in income for federal income tax purposes.
WITHHOLDING. If any part of a distribution from a Qualified Contract
that relates to a Section 401 Plan or a Section 403(b) Plan is eligible for
rollover, but is not directly rolled over to a Traditional IRA or another
eligible employer plan or account pursuant to your election, it is generally
subject to federal income tax withholding at a rate of 20%.
Any taxable part of a distribution from such Contract that is not
eligible for a direct rollover is subject to different withholding rules that
are described in the Code. You can elect completely out of withholding as to
such part.
C. PENALTY TAX ON WITHDRAWALS
Generally, there is a penalty tax equal to 10% of the portion of any
payment from a Qualified Contract issued in connection with a Section 401 Plan
or a Section 403(b) Plan that is included in your income for federal income tax
purposes.
This 10% penalty will not apply if the distribution meets certain
conditions. Some of the distributions that are excepted from the 10% penalty are
listed below:
- A distribution that is made on or after the date you reach age
59 1/2
- A distribution that is properly rolled over to a Traditional
IRA or to another eligible employer plan or account
- A distribution that is made on or after your death
- A distribution that is made when you are totally disabled (as
defined in Section 72(m) of the Code
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<PAGE> 42
- A distribution that is made as part of a series of
substantially equal periodic payments which begin after you
separate from service with the employer of the applicable plan
and are made at least annually for your life (or life
expectancy) or the joint lives (or joint life expectancies) of
you and your joint Annuitant under the Qualified Contract
- A distribution that is made to you by reason of your
separation from service with the employer of the applicable
plan during or after the calendar year in which you reach age
55
- A distribution that is made to you to the extent it does not
exceed the amount allowable to you as a deduction for medical
care under Section 213 of the Code (determined without regard
to whether or not you itemize deductions)
- A distribution that is made to an alternate payee of yours
pursuant to a qualified domestic relations order (that meets
the conditions of Section 414(p) of the Code)
D. REQUIRED DISTRIBUTIONS
Distributions from a Qualified Contract issued in connection with a
Section 401 Plan or a Section 403(b) Plan must meet certain rules concerning
required distributions that are set forth in the Code. Such rules are summarized
below.
- Required distributions generally must start by April 1 of the
calendar year following the calendar year in which you reach
age 70 1/2.
- If a Section 401 Plan is involved (except for a Section 401
Plan maintained by certain governmental or church-sponsored
organizations) and you are not considered a 5% or more owner
of the employer of the plan under the rules of the Code, the
required distributions generally do not have to start until
April 1 of the calendar year following the later of the
calendar year in which you reach age 70 1/2 or the calendar
year in which you terminate employment with the employer.
- When distributions are required under the Code, a certain
minimum amount, determined under the Code and regulations
issued thereunder, must be made each year.
In addition, other rules apply under the Code to determine when and how
required minimum distributions must be made in the event of your death. The
applicable plan documents will contain such rules.
E. SPECIAL PROVISIONS
LOANS. Qualified Contracts used for Section 403(b) Plans generally
allow you to borrow money from such Contracts. In addition, certain Section 401
Plans may allow you to borrow money from a Qualified Contract that is used for
such plans.
In order to meet the rules of the Code so that such loans are not
considered taxable distributions when made, such loans must generally meet the
rules listed below.
- The amount of each loan must generally be at least $1,000.
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<PAGE> 43
- The maximum time for repaying a loan for any other purpose is
5 years.
- The interest rate on each loan must be comparable to the rate
charged by commercial lenders for similar loans.
- The loan must be repaid in substantially equal payments made
at least quarterly.
- Generally, you cannot surrender or annuitize the Contract
while a loan is outstanding.
- There may also be restrictions on the maximum time for
repaying the loan.
A Section 403(b) Plan or a Section 401 Plan may contain additional or
different rules on loans from a Qualified Contract. The administrator of the
applicable Section 403(b) Plan or Section 401 Plan should be able to provide
information about these rules.
WITHDRAWAL LIMITATIONS. The Code limits the withdrawal of amounts from
a Qualified Contract used for a Section 401 Plan or Section 403(b) Plan to the
extent it is attributable to contributions made pursuant to a salary reduction
agreement or other cash or deferred arrangement. This limit applies in a
Qualified Contract used for a Section 403(b) Plan only to the extent the
withdrawal is attributable to contributions made after December 31, 1988.
If such withdrawal limitations apply, withdrawals of such amounts
generally can be made only when you reach age 59 1/2, when you separate from
service with the employer of the plan, when you become totally disabled or in
the case of your hardship. Withdrawals for hardship do not include earnings
allocated for you under the plan after 1988.
You should consult your own tax advisor about the tax consequences of
and rules for a loan or a withdrawal from a Section 401 Plan or Section 403(b)
Plan.
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SUPPLEMENT C
STATE OF TEXAS OPTIONAL RETIREMENT PROGRAM
The Contract is eligible for the State of Texas Optional Retirement
Program (ORP). Plans established under the Texas ORP will be referred to as
"Texas ORP Plans" in this Supplement. Contracts purchased in connection with
Texas ORP Plans will be referred to as "ORP Contracts" in this Supplement.
A. ORP CONTRACTS
ELIGIBLE PARTICIPANTS. An ORP Contract may be purchased to provide
benefits to a participant in a Texas ORP Plan. Employees of Texas "state
supported institutions of higher education" may direct contributions and
transfers to an ORP Contract. "State supported institutions of higher education"
are defined in Section 51.351 of Subchapter G of Title 3 of the Higher Education
Code of the State of Texas.
EMPLOYER PREMIUMS. Employer premiums are purchase payments applied to
the ORP Contract that are attributable to employer contributions other than
contributions made through a salary reduction agreement. Employer premiums are
subject to vesting under the rules governing Texas ORP Plans.
LOANS. Participants in a Texas ORP Plan are not allowed to borrow money
from ORP Contract.
DISTRIBUTIONS. Distributions from an ORP Contract are considered to
have begun if:
- Distributions are made on account of your reaching your
required beginning date
- Before the required beginning date, irrevocable distributions
commence over a period permitted and in an annuity form
acceptable under Section 1.401(a)(9) of the Regulations.
Distribution of funds from an ORP Contract may only be made upon the
occurrence of a "distributable event." Title 8, Chapter 830.105 of the Texas
Government Code defines "distributable event" as death, retirement, termination
of employment in all public institutions of higher education in Texas, or
attainment of age 70 1/2.
SPECIFIC PLAN RULES. The Internal Revenue Code and Texas laws place
limitations and restrictions on Texas ORP Plans, but the specific rules set
forth in the applicable plan will also affect how the plan works. Because the
provisions of Texas ORP Plans vary from plan to plan, you should contact your
plan administrator for additional information. If the information in the Texas
ORP Plan documents differs from the information in the ORP Contract or in this
Supplement, you should rely on the information in the Texas ORP Plan documents.
B. FEDERAL INCOME TAX INFORMATION
This discussion explains certain federal income tax rules applicable to
an ORP Contract. This discussion assumes at all times that the Contract
qualifies as an "annuity contract" under the Code, the Contract qualifies as an
"ORP Contract" under Texas law and the plan to which it relates qualifies as a
"Texas ORP Plan" under Texas law.
The specific rules related to ORP Contracts and Texas ORP Plans
discussed in Section A above, such as the rules on when distributions may be
made from an ORP Contract, are applicable in addition to the federal income tax
rules discussed in this Section B.
1. TAX TREATMENT OF CONTRIBUTIONS
Contributions to a Texas ORP Plan generally are NOT included in your
income for federal income tax purposes until the contributions are distributed
from the plan, provided such contributions are not in excess of any benefit,
contribution or nondiscrimination limits that apply to the plan.
2. TAX TREATMENT OF DISTRIBUTIONS
Any distributions from a Texas ORP Plan generally are included in
income for federal income tax purposes as ordinary income, except to the extent
the distributions are allocable to your after-tax contributions.
In addition, special rules apply to a distribution from an ORP Contract
if such distribution is properly rolled over in accordance with the provisions
of the Code. The administrator of the applicable Texas ORP Plan should provide
additional information about these rollover tax rules when a distribution is
made.
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<PAGE> 45
3. PENALTY TAX ON WITHDRAWALS
Generally, there is a penalty tax equal to 10% of the portion of any
payment from an ORP Contract that is included in your income for federal income
tax purposes.
This 10% penalty will not apply if the distribution meets certain
conditions. Some of the distributions that are excepted from the 10% penalty are
listed below:
- A distribution that is made on or after the date you reach age
59 1/2
- A distribution that is properly rolled over to a Traditional
IRA or to another eligible employer plan or account
- A distribution that is made on or after your death
- A distribution that is made when you are totally disabled (as
defined in Section 72(m) of the Code
- A distribution that is made as part of a series of
substantially equal periodic payments which begin after you
separate from service with the employer of the applicable plan
and are made at least annually for your life (or life
expectancy) or the joint lives (or joint life expectancies) of
you and your joint Annuitant under the Qualified Contract
- A distribution that is made to you by reason of your
separation from service with the employer of the applicable
plan during or after the calendar year in which you reach age
55
- A distribution that is made to you to the extent it does not
exceed the amount allowable to you as a deduction for medical
care under Section 213 of the Code (determined without regard
to whether or not you itemize deductions)
- A distribution that is made to an alternate payee of yours
pursuant to a qualified domestic relations order (that meets
the conditions of Section 414(p) of the Code)
4. REQUIRED DISTRIBUTIONS UNDER THE CODE
Distributions from an ORP Contract must meet certain rules concerning
required distributions that are set forth in the Code. Such rules are summarized
below.
- Required distributions generally must start by April 1 of the
calendar year following the calendar year in which you reach
age 70 1/2.
- If you do not terminate your employment until after age 70
1/2, the required distributions generally do not have to start
until April 1 of the calendar year following the later of the
calendar year in which you reach age 70 1/2 or the calendar
year in which you terminate employment with the employer.
- When distributions are required under the Code, a certain
minimum amount, determined under the Code and regulations
issued thereunder, must be made each year.
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<PAGE> 46
In addition, other rules apply under the Code to determine when and how
required minimum distributions must be made in the event of your death. The
applicable plan documents will contain such rules.
5. WITHDRAWAL LIMITATIONS UNDER THE CODE
The Code limits the withdrawal of amounts from an ORP Contract to the
extent it is attributable to contributions made pursuant to a salary reduction
agreement or other cash or deferred arrangement. If such withdrawal limitations
apply, withdrawals of such amounts generally can be made only when you reach
age 59 1/2, when you separate from service with the employer of the plan, when
you become totally disabled or in the case of your hardship. Withdrawals for
hardship do not include earnings allocated for you under a Texas ORP Plan after
1988.
You should consult your own tax advisor about the tax consequences of
and rules for a withdrawal from a Texas ORP Plan.
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<PAGE> 47
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION
Page
----
General.....................................................................
Safekeeping of Assets.......................................................
Distribution of the Contracts...............................................
Sub-Account Performance.....................................................
Sub-Accounts Accumulation Unit Value........................................
Fixed Annuity Income Payments...............................................
Other Contract Provisions...................................................
Misstatement of Age or Sex.........................................
Assignment.........................................................
Loans..............................................................
No Dividends.......................................................
Qualification as an "Annuity Contract".............................
Independent Accountants.....................................................
Financial Statement.........................................................
Page 42
<PAGE> 48
BACK COVER
This booklet contains the Touchstone Variable Annuity Prospectus and the current
prospectus for Touchstone Variable Series Trust. You should rely only on the
information contained in the Contract, this Prospectus, the Statement of
Additional Information or our approved sales literature.
No one is authorized to give any information or make any representation other
than those contained in the Contract, this Prospectus, the Statement of
Additional Information or our approved sales literature.
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<PAGE> 49
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY
SEPARATE ACCOUNT 2
FLEXIBLE PURCHASE PAYMENT DEFERRED
VARIABLE ANNUITY CONTRACTS
----------------------------
STATEMENT OF ADDITIONAL INFORMATION
January 4, 1999
----------------------------
This Statement of Additional Information is not a prospectus, but
contains information in addition to that set forth in the current prospectus
dated January 4, 1999 (the "Prospectus") for certain variable annuity contracts
("Contracts") offered by Western-Southern Life Assurance Company ("WSLAC")
through its Separate Account 2 ("SA2"), and should be read in conjunction with
the Prospectus. Unless otherwise noted, the terms used in this Statement of
Additional Information have the same meanings as those set forth in the
Prospectus.
A copy of the Prospectus may be obtained by calling the Touchstone
Variable Annuity Service Center at 1-800-669-2796 (press 2) or by written
request to WSLAC at P.O. Box 2850, Cincinnati, Ohio 45201-2850.
FORM 7135-9705
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<PAGE> 50
TABLE OF CONTENTS
OF
STATEMENT OF ADDITIONAL INFORMATION
PAGE
----
GENERAL.....................................................................
SAFEKEEPING OF ASSETS.......................................................
DISTRIBUTION OF THE CONTRACTS...............................................
SUB-ACCOUNT PERFORMANCE.....................................................
SUB-ACCOUNTS ACCUMULATION UNIT VALUE........................................
FIXED ACCOUNT VALUE.........................................................
FIXED ANNUITY INCOME PAYMENTS...............................................
OTHER CONTRACT PROVISIONS...................................................
Misstatement of Age or Sex.........................................
Assignment.........................................................
Loans..............................................................
No Dividends.......................................................
Qualification as an "Annuity Contract".............................
Diversification..................................................
Excessive Control................................................
Required Distributions...........................................
INDEPENDENT ACCOUNTANTS.....................................................
FINANCIAL STATEMENTS........................................................
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<PAGE> 51
GENERAL
Except as otherwise indicated herein, all capitalized terms shall have
the meanings assigned to them in the Prospectus.
WSLAC is subject to regulation by the Ohio Department of Insurance,
which periodically examines its financial condition and operations. WSLAC also
is subject to the insurance laws and regulations of all jurisdictions in which
it offers Contracts. Copies of the Contract have been filed with, and, where
required, approved by insurance regulators in those jurisdictions. WSLAC must
submit annual statements of its operations, including financial statements, to
such state insurance regulators so that they may determine solvency and
compliance with applicable state insurance laws and regulations.
WSLAC and SA2 have filed a Registration Statement regarding the
Contracts with the Securities and Exchange Commission under the Investment
Company Act of 1940 and the Securities Act of 1933. The Prospectus and this
Statement of Additional Information do not contain all of the information in the
Registration Statement.
SAFEKEEPING OF ASSETS
The assets of SA2 are held by WSLAC, separate from WSLAC's general
account assets and any other separate accounts that WSLAC has or will establish.
WSLAC maintains records of all purchases and redemptions of the interests in the
Funds held by the Sub-Accounts. WSLAC maintains fidelity bond coverage for the
acts of its officers and employees.
DISTRIBUTION OF THE CONTRACTS
As disclosed in the Prospectus, the Contracts are distributed through
Touchstone Securities, Inc. (the "Distributor"), which is a wholly-owned
subsidiary of IFS Financial Services, Inc. ("IFS"). IFS is a wholly-owned
subsidiary of WSLAC. The Distributor is a member of the National Association of
Securities Dealers, Inc. The offering of the Contracts is continuous, and WSLAC
does not anticipate discontinuing offering the Contracts, although it reserves
the right to do so.
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Sales commissions attributable to the Contracts and paid by WSLAC to
the Distributor and amounts retained by the Distributor are shown below for the
periods indicated.
<TABLE>
<CAPTION>
Sales Commissions Amounts Retained by
Period Paid Distributor
- ----------------------------------------------------------------------------------------
<S> <C> <C>
For the period from February 23, 1995 to $159,807 $26,967
December 31, 1995
For the year ended December 31, 1996 $1,902,186 $305,688
For the year ended December 31, 1997 $7,686,342 $790,452
</TABLE>
SUB-ACCOUNT PERFORMANCE
The performance of the Sub-Accounts may be quoted or advertised by
WSLAC in various ways. All performance information supplied by WSLAC in
advertising is based upon historical results of the Sub-Accounts and is not
intended to indicate future performance of either one. Total returns and other
performance information may be quoted numerically or in a table, graph or
similar illustration. The value of an Accumulation Unit and total returns
fluctuate in response to market conditions, interest rates and other factors.
Average annual total returns are calculated by determining the average
annual compounded rates of return over one, five and ten year periods (or since
commencement of operations) that would equate an initial hypothetical investment
to the ending redeemable value according to the following formula:
P (1 + T)n = ERV where:
P = a hypothetical initial purchase payment of
T = $1,000 average annual total return
n = number of years and/or portion of a year
ERV = ending redeemable value of a hypothetical
initial purchase payment of $1,000 at the
end of the applicable period
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The following table sets forth the type of total return data for each of the
Sub-Accounts that will be used in advertising, in each case for the period ended
December 31, 19987
<TABLE>
<CAPTION>
TYPE OF EMERGING INTERNATIONAL INCOME GROWTH & STANDBY
PERFORMANCE GROWTH EQUITY OPPORTUNITY INCOME BALANCED BOND INCOME
Data Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
<S> <C> <C> <C> <C> <C> <C> <C>
Total Return 29.11% 10.35% 7.75% 15.42% 14.17% 3.60% 1.07%
For Year
Total Return 32.61% 13.85% 11.25% 18.92% 17.67% 7.10% 4.57%
For Year
Measured by
Change In
Accumulation
Unit Value **
Average Annual 17.25% 9.57% 18.46% 16.83% 15.31% 4.07% 0.88%
Total Return
Since
Inception*
Total Return 71.70% 42.03% 76.73% 69.96% 63.82% 23.22% 13.15%
Since
Inception
Measured By
Change In
Accumulation
Unit Value**
<FN>
*Based on a period beginning February 28, 1995.
**Calculated by determining the change in the Accumulation Unit Value from the
beginning of the period to the end of the period and dividing such amount by the
Accumulation Unit Value at the end of the period.
While average annual total returns are convenient means of comparing
investment alternatives, investors should realize that any Sub-Account's
performance is not constant over time, but changes from year to year, and that
average annual total returns represent averaged figures as opposed to the actual
year-to-year performance of any Sub-Account.
Average annual total return is calculated as required by applicable
regulations. In addition to average annual total returns, a Sub-Account may
quote cumulative total returns reflecting the simple change in value of any
investment over a stated period. Average annual and cumulative total returns may
be quoted as a percentage or as a dollar amount.
"Total return" or "average annual total return" quoted in advertising
reflects all aspects of a Sub-Account's return, including the effect of
reinvestment by the Sub-Account of income and capital gain distributions and any
change in the Sub-Account's value over the applicable period. Such quotations
reflect administrative charges and risk charges. Since the Contract is intended
as a long-term investment, total return calculations will assume that no partial
withdrawals from the hypothetical Contract occurred during the applicable
period, but that a Surrender Charge would be incurred upon the hypothetical
withdrawal at the end of the applicable period.
Any total return quotation provided for a Sub-Account should not be
considered as representative of the performance of the Sub-Account in the
future, since the net asset value will
Page 5
</TABLE>
<PAGE> 54
vary based not only on the type, quality and maturities of the securities held
in the underlying fund in which the Sub-Account invests, but also on changes in
the current value of such securities and on changes in the expenses of the
Sub-Account and the underlying fund. These factors and possible differences in
the methods used to calculate total return should be considered when comparing
the total return of a Sub-Account to total returns published for other
investment companies or other investment vehicles.
WSLAC may advertise examples of the effects of dollar cost averaging,
whereby a Contract owner periodically invests a fixed dollar amount in a
Sub-Account, thereby purchasing fewer Accumulation Units when prices are high
and more Accumulation Units when prices are low. While such a strategy does not
assure a profit nor guard against a loss in a declining market, the Contract
owner's average cost per Accumulation Unit can be lower than if fixed numbers of
Accumulation Units had been purchased at the same intervals. In evaluating
dollar cost averaging, owners should consider their ability to continue
purchasing Accumulation Units during periods of low price levels.
Performance information for any Sub-Account may be compared, in reports
to Contract owners and in advertising, to stock indices, other variable annuity
separate accounts or other products tracked by Lipper Analytical Services, or
other widely used independent research firms, which rank variable annuities and
investment companies by overall performance, investment objectives and assets.
Unmanaged indices may assume the reinvestment of dividends but generally do not
reflect deductions for annuity charges and investment management costs.
SUB-ACCOUNTS ACCUMULATION UNIT VALUE
In this discussion, the term Valuation Period means the period of time
beginning at the close of trading on the New York Stock Exchange (NYSE) on one
Valuation Date, as defined below, and ending at the close of trading on the
NYSE at the next succeeding Valuation Date. A Valuation Date is each day
valuation of the Sub-Accounts is required by law including every day that the
NYSE is open.
The value of an Accumulation Unit at the close of any Valuation Period
is determined for each Sub-Account by multiplying the Accumulation Unit Value of
the Sub-Account at the close of the immediately preceding Valuation Period by
the "Net Investment Factor" (described below). Depending upon investment
performance of the underlying fund in which the Sub-Account is invested, the
Accumulation Unit Value may increase or decrease.
The Net Investment Factor for each Sub-Account for any Valuation Period
is determined by dividing (a) by (b) and subtracting (c) from the result, where:
(a) equals: (1) the net asset value per share of the underlying
fund at the end of the current Valuation Period, plus
(2) the per share amount of any dividend or capital
gain distribution made by the underlying fund on
shares held in the Sub-Account if the "ex-dividend"
date occurs during the current Valuation Period, plus
or minus
(3) a per share charge or credit for any taxes
reserved, which are determined by WSLAC to have
resulted from the investment operations of the
Sub-Account during the current Valuation Period;
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<PAGE> 55
(b) is the net asset value per share of the underlying fund determined
at the end of the immediately preceding Valuation Period; and
(c) is a factor representing the charges deducted from the Sub-Account
on a daily basis for the daily portion of the annual Mortality and
Expense Risk Charge and the annual Contract Administration Charge.
FIXED ANNUITY INCOME PAYMENTS
The Contracts provide only for fixed annuity payment options. The
amount of such payments is calculated by applying the Surrender Value at
annuitization, less any applicable premium tax, to the income payment rates for
the income payment option selected. Annuity payments will be the larger of:
- the income based on the rates shown in the Contract's Annuity
Tables for the income payment option chosen; and
- the income calculated by applying the proceeds as a single
premium at WSLAC's current rates in effect on the date of the
first annuity payment for the same option.
Annuity payments under any of the income payment options will not vary
in dollar amount and will not be affected by the future investment performance
of the Variable Account.
OTHER CONTRACT PROVISIONS
Misstatement of Age or Sex. If the age or sex of the Annuitant is
misstated to WSLAC, WSLAC will change any benefits under the Contract to those
which the proceeds would have purchased had the correct age and sex been stated.
If the misstatement is not discovered until after annuity payments have started,
any overpayments will be charged, with compound interest, against subsequent
payments. Any amount WSLAC owes as the result of underpayments will be paid,
with compound interest, in a lump sum.
Assignment. An owner may assign a Non-Qualified Contract in writing,
but may not assign a Qualified Contract except as may be allowed under
applicable law and the documents governing the plan. WSLAC will not be bound by
any assignment until written notice of the assignment is received and recorded
at the Touchstone Variable Annuity Service Center. The rights of the Contract
owner and any beneficiary will be affected by an assignment, and WSLAC disclaims
any responsibility for the validity or tax consequences of any assignment.
Loans. Loans may be permitted under Qualified Contracts purchased in
connection with a plan established under Section 403(b), if the plan documents
permit such loans. Loans are not permitted under any other type of Contract.
No Dividends. The Contracts are "non-participating." That means that
they do not provide for dividends. Investment results under the Contracts are
reflected in benefits.
QUALIFICATION AS AN "ANNUITY CONTRACT"
For the Contract to be treated as an "annuity contract" under the Code,
the Contract must meet certain requirements under the Code. The following
sections discuss various matters that might affect the Contract's status as an
"annuity contract."
DIVERSIFICATION
Section 817(h) of the Code imposes certain diversification standards on
the underlying assets of all variable annuity contracts. The Code generally
provides that a variable 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,
adequately diversified. The Code contains a safe harbor provision which provides
that variable contracts such as the Contracts meet the diversification
requirements if, as of the end of each quarter, (1) the underlying assets meet
the diversification standards prescribed elsewhere in the Code for an entity to
be classified as a regulated investment company and (2) no more than 55% of the
total assets consist of cash, cash items, U.S. government securities and
securities of other regulated investment companies.
In March 1989, the Treasury Department issued regulations that
established diversification requirements for the investment portfolios such as
the Funds 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 in
Section 817(h) of the Code. 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 investment portfolio is represented by any one investment;
(2) no more than 70% of the value of the total assets of the investment
portfolio is represented by any two investments; (3) no more than 80% of the
value of the total assets of the investment portfolio is represented by any
three investments; and (4) no more than 90% of the value of the total assets of
the investment portfolio is represented by any four investments.
The Sub-Accounts, through each of the Funds, intends to comply with the
diversification requirements of the Code and the regulations. The Advisor has
agreed to manage the Funds so as to comply with such requirements.
EXCESSIVE CONTROL
The Treasury Department has from time to time suggested that guidelines
may be forthcoming under which a variable annuity contract will not be treated
as an annuity contract for tax purposes if the owner of the contract has
excessive control over the investments underlying the contract (i.e., the owner
is able to transfer values among Sub-Accounts with only limited restrictions).
If a variable contract is not treated as an annuity contract, the owner of such
contract would be considered the owner of the assets of a separate account, and
income and gains from that account would be included each year in the owner's
gross income. No such guidelines have been issued to date.
The issuance of such guidelines, or regulations or rulings dealing with
excessive control issues, might require the Company to impose limitations on an
owner's right to transfer all or part of the Contract Value among the
Sub-Accounts or to make other changes in the Contract as necessary to attempt to
prevent an owner from being considered the owner of any assets of a Sub-Account.
The Company therefore reserves the right to make such changes. It is not known
whether any such guidelines, regulations or rulings, if adopted, would have
retroactive effect.
REQUIRED DISTRIBUTIONS
Additionally, in order to qualify as an annuity contract under the
Code, a Non-Qualified Contract must meet certain requirements regarding
distributions in the event of the death of the owner. In general, if the owner
dies before the entire value of the Contract is distributed, the remaining value
of the Contract must be distributed according to provisions of the Code. Upon
the death of an owner prior to commencement of annuity payments, (1) the amounts
accumulated under a Contract must be distributed within five years, or (2) if
distributions to a designated beneficiary within the meaning of Section 72 of
the Code begin within one year of the owner's death, distributions are permitted
over a period not extending beyond the life (or life expectancy) of the
designated beneficiary.
The above rules are modified if the designated beneficiary is the
surviving spouse. The surviving spouse is not required to take distributions
from the Contract under the above rules as a beneficiary and may continue the
Contract and take distributions under the above rules as if the surviving spouse
were the original owner. If distributions have begun prior to the death of the
owner, such distributions must continue at least as rapidly as under the method
in effect at the date of the owner's death (unless the method in effect provides
that payments cease at the death of the owner).
For Qualified Contracts issued in connection with tax-qualified plans
and traditional individual retirement annuities, the plan documents and rules
will determine mandatory distribution rules. However, under the Code,
distributions from Contracts issued under Qualified Plans (other than
traditional and Roth individual retirement annuities and certain governmental or
church-sponsored Qualified Plans) for employees who are not 5% owners of the
sponsoring employer generally must commence no later than April 1 of the
calendar year following the calendar year in which the employee terminates
employment or reaches age 70 1/2, whichever is later. Such distributions must be
made over a period that does not exceed the life expectancy of the employee or
the joint and last survivor life expectancy of the employee and a designated
beneficiary. Distributions from Contracts issued under traditional individual
retirement annuities (but not Roth IRAs) or to 5% owners of the sponsoring
employer from Contracts issued under Qualified Plans (other than certain
governmental or church-sponsored Qualified Plans) must commence by April 1 of
the calendar year after the calendar year in which the individuals reach age 70
1/2 even if they have not terminated employment. A penalty tax of 50% may be
imposed on any amount by which the required minimum distribution in any year
exceeds the amount actually distributed.
If the Contract is a Qualified Contract issued in connection with a
traditional individual retirement annuity, a SIMPLE account, or a plan which
qualifies under Sections 403(b), 408 or 457 of the Code, the Company will send a
notice to the owner when the owner or Annuitant, as applicable, reaches age 70
1/2. The notice will summarize the required minimum distribution rules and
advise the owner of the date that such distributions must begin from the
Qualified Contract or other traditional individual retirement annuities of the
owner. The owner has sole responsibility for requesting distributions under the
Qualified Contract or other traditional individual retirement annuities (to the
extent permitted by the Code) that will satisfy the minimum distribution rules.
In the case of a distribution from a Qualified Contract issued under a plan
which qualifies under Section 401 of the Code, the Company will not send a
notice when the owner or Annuitant, as applicable, reaches age 70 1/2, and the
owner (or the employer sponsoring the Qualified Plan) has sole responsibility
for requesting distributions under the Qualified Contract that will satisfy the
minimum distribution rules.
INDEPENDENT ACCOUNTANTS
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<PAGE> 56
The financial statements of Western-Southern Life Assurance Company
Separate Account 2 and the financial statements of Western-Southern Life
Assurance Company, included in this registration statement and described on
pages ______, have been included herein in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.
FINANCIAL STATEMENTS
The following financial statements for Western-Southern Life Assurance
Company Separate Account 2 at and for the fiscal periods indicated are attached
hereto:
1. Report of PricewaterhouseCoopers LLP.
2. Statement of Net Assets as of December 31, 1997.
3. Statement of Operations and Changes in Net Assets for the years
ended December 31, 1997 and 1996.
4. Notes to Financial Statements.
5. Supplementary Information-Selected Per Unit Data and Ratios for the
years ended December 31, 1997 and 1996.
6. Statement of Net Assets as of June 30, 1998 (unaudited).
7. Statement of Operations and Changes in Net Assets for the period
from January 1, 1998 to June 30,1998 (unaudited).
8. Notes to Financial Statements (unaudited).
9. Supplementary Information-Selected Per Unit Data and Ratios for the
period ended June 30, 1998 (unaudited) and for the year ended
December 31, 1997.
The following financial statements for Western-Southern Life Assurance
Company at and for the fiscal periods indicated are attached hereto:
1. Report of PricewaterhouseCoopers LLP.
2. Consolidated Balance Sheets as of December 31, 1997 and 1996.
3. Consolidated Statements of Operations for the years ended December
31, 1997, 1996 and 1995.
4. Consolidated Statements of Changes in Shareholder's Equity for the
years ended December 31, 1997, 1996 and 1995.
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5. Consolidated Statements of Cash Flows for the years ended December
31, 1997, 1996 and 1995.
6. Notes to Financial Statements.
The following financial statements for Variable Insurance Trust Portfolios at
and for the fiscal periods indicated are incorporated by reference from their
current reports to shareholders filed with the Securities and Exchange
Commission pursuant to Section 30(b) of the 1940 Act and Rule 30b2-1 thereunder.
A copy of each such report will be provided to each person receiving this
Statement of Additional Information.
1. Schedule of Investments December 31, 1997.
2. Statement of Assets and Liabilities December 31, 1997.
3. Statement of Operations for the year ended December 31, 1997.
4. Statement of Changes in Net Assets for the years ended December 31,
1997 and 1996.
5. Supplementary Data for the years ended December 31, 1997, 1996, 1995
and 1994.
6. Notes to Financial Statements.
7. Report of PricewaterhouseCoopers LLP.
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FINANCIAL STATEMENTS
For purposes of this filing only, the following financial statements
are incorporated by reference. A copy of the financial statements will be
attached to the Statement of Additional Information and provided to each person
receiving the Statement of Additional Information.
The following financial statements for Western-Southern Life Assurance
Company Separate Account 2 at and for the fiscal periods indicated are
incorporated herein by reference to Post-Effective Amendment No. 6 to the
Registration Statement filed with the SEC on April 30, 1998 (File Nos. 033-79906
and 811-08550).
1. Report of PricewaterhouseCoopers LLP.
2. Statement of Net Assets as of December 1, 1997.
3. Statement of Operations and Changes in Net Assets for the years
ended December 31, 1997 and 1996.
4. Notes to Financial Statements.
5. Supplementary Information--Selected Per Unit Data and Ratios for the
years ended December 31, 1997 and 1996.
The following financial statements for Western-Southern Life Assurance
Company Separate Account 2 at and for the periods indicated are incorporated by
reference from its Semi Annual Report on Form N-30D filed with the SEC on
September 2, 1998 (File No. 811-08550).
1. Statement of Net Assets as of June 30, 1998 (unaudited).
2. Statement of Operations and Changes in Net Assets for the period
from January 1, 1998 to June 30, 1998 (unaudited).
3. Notes to Financial Statements (unaudited).
4. Supplementary Information--Selected Per Unit Data and Ratios for the
period ended June 30, 1998 (unaudited) and for the year ended
December 31, 1997.
The following financial statements for Western-Southern Life Assurance
Company at and for the fiscal periods indicated are incorporated herein by
reference to Post-Effective Amendment No. 6 to the Registration Statement filed
with the SEC on April 30, 1998 (File Nos. 033-79906 and 811-08550).
1. Report of PricewaterhouseCoopers LLP
2. Consolidated Balance Sheets as of December 31, 1997 and 1996.
3. Consolidated Statements of Operations for the years ended December
31, 1997, 1996 and 1995.
4. Consolidated Statements of Changes in Shareholder's Equity for the
years ended December 31, 1997, 1996 and 1995.
5. Consolidated Statements of Cash Flows for the years ended December
31, 1997, 1996 and 1995.
6. Notes to Financial Statements.
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DISTRIBUTOR
Touchstone Securities, Inc. Sub-Accounts
311 Pike Street ------------
Cincinnati, Ohio 45202 - Emerging Growth
(800) 669-2796 (press 3) - International Equity
- Income Opportunity
INVESTMENT ADVISOR AND SPONSOR - Value Plus
- Growth & Income
Touchstone Advisors, Inc. - Balanced
311 Pike Street - Bond
Cincinnati, Ohio 45202 - Standby Income
TOUCHSTONE VARIABLE ANNUITY SERVICE CENTER
Touchstone Variable Annuity Service Center
P.O. Box 2850
Cincinnati, Ohio 45201-2850
(800) 669-2796 (press 2)
TRANSFER AGENT
State Street Bank and Trust Company
P.O. Box 8578
Boston, Massachusetts 02266-8518
ADMINISTRATOR, CUSTODIAN
AND FUND ACCOUNTING AGENT
Investors Bank & Trust Company STATEMENT OF
200 Clarendon Street ADDITIONAL INFORMATION
Boston, Massachusetts 02116 January 4, 1999
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
312 Walnut Street
Cincinnati, Ohio 45202
LEGAL COUNSEL
Frost & Jacobs LLP
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
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<PAGE> 60
PART C
ITEM 24 -- FINANCIAL STATEMENTS AND EXHIBITS
(a) No financial statements are included in Part A.
The following financial statements are incorporated by reference into
Part B:
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 2
(1) Report of PricewaterhouseCoopers LLP.
(2) Statement of Net Assets as of December 31, 1997.
(3) Statement of Operations and Changes in Net Assets for
the years ended December 31, 1997 and 1996.
(4) Notes to Financial Statements.
(5) Supplementary Information -- Selected Per Unit Data
and Ratios for the years ended December 31, 1997 and
1996.
(6) Statement of Net Assets as of June 30, 1998
(unaudited).
(7) Statement of Operations and Changes in Net Assets for
the period from January 1, 1998 to June 30, 1998
(unaudited).
(8) Notes to Financial Statements (unaudited).
(9) Supplementary Information -- Selected Per Unit Data
and Ratios for six months ended June 30, 1998
(unaudited) and for the year ended December 31, 1997.
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY
(1) Report of PricewaterhouseCoopers LLP.
(2) Balance Sheets as of December 31, 1997 and 1996.
(3) Summaries of Operations for the years ended December
31, 1997, 1996 and 1995.
(4) Statements of Changes in Shareholder's Equity for the
years ended December 31, 1997, 1996 and 1995.
(5) Statements of Cash Flows for the years ended December
31, 1997, 1996 and 1995.
-1-
<PAGE> 61
(b) Exhibits:
(1) Resolutions of the Executive Committee of the Board of
Directors of Western-Southern Life Assurance Company (the
"Company") establishing Western-Southern Life Assurance
Company Separate Account 2.
(2) Not Applicable.
(3) (a) Distributor Agreement between the Company (on
behalf of Separate Account 2) and Touchstone
Securities, Inc. incorporated herein by reference to
Post-Effective Amendment No. 6 to the Registration
Statement filed with the Securities and Exchange
Commission ("SEC") on April 30, 1998 (File Nos.
033-79906 and 811-8550).
(b) Commission Schedule incorporated herein by reference
to Post-Effective Amendment No. 6 to the Registration
Statement filed with the SEC on April 30, 1998 (File
Nos. 033-79906 and 811-8550).
(c) Specimen General Agency Agreement between Touchstone
Securities, Inc. and its dealers incorporated herein
by reference to Post-Effective Amendment No. 9 to the
Registration Statement filed with the SEC on November
5, 1998 (File Nos. 033-76582 and 811-8420)
(4) (a) Specimen Touchstone Advisor Variable Annuity Contract
9408-5570-WSA.
(b) Specimen Endorsement for SIMPLE IRA 9801-5600 WSA END
incorporated herein by reference to Post-Effective
Amendment No. 9 to the Registration Statement filed
with the SEC on November 5, 1998 (File Nos. 033-76582
and 811-8420).
(c) Specimen Endorsement for IRA 9801-5606 WSA END
incorporated herein by reference to Post-Effective
Amendment No. 9 to the Registration Statement filed
with the SEC on November 5, 1998 (File Nos. 033-76582
and 811-8420).
(d) Specimen Endorsement for SEP-IRA 9801-5614 WSA END
incorporated herein by reference to Post-Effective
Amendment No. 9 to the Registration Statement filed
with the SEC on November 5, 1998 (File Nos. 033-76582
and 811-8420).
(e) Specimen Tax Sheltered Annuity Endorsement 9801-5620
WSA END.
(f) Specimen Endorsement for Roth IRA 9801-5607 WSA END
incorporated herein by reference to Post-Effective
Amendment No. 9 to the Registration Statement filed
with the SEC on November 5, 1998 (File Nos. 033-76582
and 811-8420).
-2-
<PAGE> 62
(g) Specimen 401 Plan Endorsement 9801-5611 WSA END
incorporated herein by reference to Post-Effective
Amendment No. 9 to the Registration Statement filed
with the SEC on November 5, 1998 (File Nos. 033-76582
and 811-8420).
(5) Specimen Application Form for Touchstone Advisor Variable
Annuity Contract DO-11-IFS-VARII-9805.
(6) (a) Amended Articles of Incorporation of the Company
incorporated herein by reference to Post-Effective
Amendment No. 2 to the Registration Statement filed
with the SEC on April 29, 1996 (File No. 33-79906).
(b) Amended Code of Regulations of the Company
incorporated herein by reference to Post-Effective
Amendment No. 2 to the Registration Statement filed
with the SEC on April 29, 1996 (File No. 33-79906).
(7) Not Applicable.
(8) (a) Administration Agreement between Investors Bank &
Trust Company and Select Advisors Variable Insurance
Trust ("VIT") is incorporated herein by reference to
Post-Effective Amendment No. 3 to the Registration
Statement of VIT filed with the SEC on February 28,
1997 (File Nos. 033-76566 and 811-08416).
(b) Fund Accounting Agreement between Investors Bank &
Trust Company and VIT is incorporated herein by
reference to Post-Effective Amendment No. 3 to the
Registration Statement of VIT filed with the SEC on
February 28, 1997 (File Nos. 033-76566 and
811-08416).
(c) Custodian Agreement between Investors Bank & Trust
Company and VIT is incorporated herein by reference
to Post-Effective Amendment No. 8 to the Registration
Statement of VIT filed with the SEC on July 30, 1998
(File Nos. 033-76566 and 811-08416).
(d) (i) Sponsor Agreement between Touchstone
Advisors, Inc. and VIT is incorporated
herein by reference to Post-Effective
Amendment No. 7 to the Registration
Statement filed with the SEC on May 1, 1998
(File Nos. 033-76582 and 811-08420).
(ii) Form of Amendment No. 1 to Sponsor Agreement
between Touchstone Advisors, Inc. and VIT is
incorporated herein by reference to
Post-Effective Amendment No. 7 to the
Registration Statement filed with the SEC on
May 1, 1998 (File Nos. 033-76582 and
811-08420).
(e) (i) Fund Participation Agreement between
Western-Southern Life Assurance Company and
VIT is incorporated herein by reference to
Post-Effective Amendment No. 7 to the
Registration Statement filed with the SEC on
May 1, 1998 (File Nos. 033-76582 and
811-08420).
(ii) Form of Amendment No. 1 to Fund
Participation Agreement between
Western-Southern Life Assurance Company and
VIT is incorporated herein by reference to
Post-Effective Amendment No. 7 to the
Registration Statement filed with the SEC on
May 1, 1998 (File Nos. 033-76582 and
811-08420).
(9) Opinion and Consent of Donald J. Wuebbling, Esq.
(10) Consent of PricewaterhouseCoopers LLP.
(11) Not Applicable.
(12) Not Applicable.
(13) Schedule for Computation of Performance Quotations provided in
Registration Statement in response to Item 21 incorporated
herein by reference to Post-Effective Amendment No. 6 to the
Registration Statement filed with the SEC on April 30, 1998
(File Nos. 033-79906 and 811-8550).
(14) Not Applicable.
(99) Powers of Attorney -- Directors of the Company.
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<PAGE> 63
ITEM 25. -- DIRECTORS AND OFFICERS OF THE DEPOSITOR
The directors and officers of the Company are listed below. Unless
otherwise noted, the principal business address of all persons listed in
Item 25 is 400 Broadway, Cincinnati, Ohio 45202.
<TABLE>
<CAPTION>
<S> <C>
William J. Williams Chairman of the Board and Director
John F. Barrett Director, Chief Executive Officer
and President
James N. Clark Director, Executive Vice President,
Secretary and Treasurer
Dr. J. Harold Kotte Director
Dr. Lawrence C. Hawkins Director
Omni-Man, Inc.
3909 Reading Road
Cincinnati, Ohio 45229
Carl A. Kroch Director
Kroch's & Brentano's
29 South Wabash Avenue
Chicago, Illinois 60603
Eugene P. Ruehlmann Director
Vorys, Sater, Seymour and Pease
Suite 2100 Atrium Two
221 East Fourth Street
Cincinnati, Ohio 45202
Thomas L. Williams Director
North American Properties
212 East Third Street
Suite 300
Cincinnati, Ohio 45202
Donald A. Bliss Director
10892 East Fanfol Lane
Scottsdale, Arizona 85259
Herbert R. Brown Vice President
James W. Carpenter Vice President and Senior Counsel
Keith T. Clark Vice President and Medical Director
</TABLE>
-4-
<PAGE> 64
<TABLE>
<S> <C>
Bryan C. Dunn Senior Vice President and Chief
Marketing Officer
David G. Ennis Vice President and Auditor
Noreen J. Hayes Vice President
Edward S. Heenan Vice President and Comptroller
Dale P. Hennie Senior Vice President
Carroll R. Hutchinson Senior Vice President
Donald W. Kaplan Vice President and Actuary
William F. Ledwin Senior Vice President and Chief
Investment Officer
Harold V. Lyons Vice President and Actuary
Nora E. Moushey Senior Vice President and Chief
Actuary
Jill T. McGruder Senior Vice President
J. J. Miller Senior Vice President
Kenneth A. Palmer Senior Vice President
Mario J. San Marco Vice President
Thomas M. Stapleton Vice President
Robert H. Starnes Vice President
Richard K. Taulbee Vice President
Donald J. Wuebbling Vice President and General Counsel
G. H. Schellpeper Vice President
8901 Indian Hills Drive
Omaha, Nebraska 68144
James J. Vance Treasurer
</TABLE>
-5-
<PAGE> 65
ITEM 26. -- PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The Western and Southern Life Insurance Company ("WSLIC"); Ohio
corporation
Western-Southern Life Assurance Company ("WSLAC"); Ohio
corporation; 100% owned by WSLIC
Courtyard Nursing Care, Inc.; Ohio corporation; 100%
owned by WSLAC; ownership and operation of real estate.
IFS Financial Services, Inc. ("IFS"); Ohio corporation;
100% owned by WSLAC; development and marketing of
financial products for distribution through financial
institutions.
IFS Systems, Inc.; Delaware corporation;
100% owned by IFS; development, marketing
and support of software systems.
IFS Insurance Agency, Inc.; Ohio
corporation; 99% owned by IFS, 1% owned by
William F. Ledwin; general insurance agency.
Touchstone Securities, Inc.; Nebraska
corporation; 100% owned by IFS; securities
broker-dealer.
Touchstone Advisors, Inc.; Ohio corporation;
100% owned by IFS; registered investment
adviser.
IFS Agency Services, Inc.; Pennsylvania
corporation; 100% owned by IFS; general
insurance agency.
IFS Agency, Inc.; Texas corporation; 100%
owned by an individual; general insurance
agency.
IFS General Agency, Inc.; Pennsylvania
corporation; 100% owned by William F.
Ledwin; general insurance agency.
Seasons Congregate Living, Inc.; Ohio corporation; 100% owned by
WSLIC; ownership and operation of real estate.
Latitudes at the Moors, Inc.; Florida corporation; 100% owned by
WSLIC; ownership and operation of real estate.
WestAd Inc.; Ohio corporation; 100% owned by WSLIC, general
advertising, book-selling and publishing.
Fort Washington Investment Advisors, Inc.; Ohio corporation;
100% owned by WSLIC; registered investment adviser.
-6-
<PAGE> 66
Columbus Life Insurance Company; Ohio corporation; 100% owned by
WSLIC; insurance.
Colmain Properties, Inc.; Ohio corporation; 100% owned
by Columbus Life Insurance Company; acquiring, owning,
managing, leasing, selling real estate.
Colpick, Inc.; Ohio corporation; 100% owned
by Colmain Properties, Inc.; acquiring,
owning, managing, leasing and selling real
estate.
CAI Holding Company, Inc.; Ohio corporation; 100% owned
by Columbus Life Insurance Company; holding company.
Capital Analysts Incorporated; Delaware
corporation; 100% owned by CAI Holding
Company; securities broker-dealer and
registered investment advisor.
Capital Analysts Agency, Inc.; Ohio
corporation; 99% owned by Capital Analysts
Incorporated, 1% owned by William F. Ledwin;
general insurance agency.
Capital Analysts Agency, Inc.; Texas
corporation; 100% owned by an individual who
is a resident of Texas, but under
contractual association with Capital
Analysts Incorporated; general insurance
agency.
Capital Analysts Insurance Agency, Inc.;
Massachusetts corporation; 100% owned by
Capital Analysts Incorporated; general
insurance agency.
CLIC Company I; Delaware corporation; 100% owned by
Columbus Life Insurance Company; holding company.
CLIC Company II; Delaware corporation; 100% owned by
Columbus Life Insurance Company; holding company.
Eagle Properties, Inc.; Ohio corporation; 100% owned by WSLIC;
ownership, development and management of real estate.
Seasons Management Company; Ohio corporation; 100 %
owned by Eagle Properties, Inc.; management of real
estate.
Continental General Corporation; Nebraska corporation; 100%
owned by WSLIC; holding company.
Continental Agency Services, Inc.; Nebraska
corporation; 100% owned by Continental General
Corporation.
-7-
<PAGE> 67
Continental General Insurance Company; Nebraska
corporation; 100% owned by Continental General
Corporation; insurance.
Continental Print & Photo Co.; Nebraska corporation;
100% owned by Continental General Corporation;
printing.
Waslic Company II; Delaware corporation; 100% owned by WSLIC;
holding company.
WestTax, Inc.; Ohio corporation, 100% owned by WSLIC;
preparation and electronic filing of tax returns.
Florida Outlet Marts, Inc.; Florida corporation; 100% owned by
WSLIC; ownership and operation of real estate.
AM Concepts Inc.; Delaware corporation, 100% owned by WSLIC;
venture capital investment in companies engaged in alternative
marketing of financial products.
Western-Southern Agency, Inc.; Ohio corporation; 99% owned by
WSLIC; 1% owned by William F. Ledwin; general insurance agency.
Western-Southern Agency Services, Inc.; Pennsylvania
corporation; 100% owned by WSLIC; general insurance agency.
W-S Agency of Texas, Inc.; Texas corporation; 100% owned by an
individual; general insurance agency.
ITEM 27. -- NUMBER OF CONTRACT OWNERS
As of October 30, 1998, there were 14 owners of Qualified Contracts and
25 owners of Non-Qualified Contracts offered pursuant to this
Registration Statement.
ITEM 28. -- INDEMNIFICATION
The Amended Code of Regulations of the Company provides that, to the
fullest extent not prohibited by applicable law, the Company shall
indemnify each director, officer and employee against any and all costs
and expenses (including attorney fees, judgments, fines, penalties,
amounts paid in settlement, and other disbursements) actually and
reasonably incurred by or imposed upon such director, officer or
employee in connection with any action, suit, investigation or
proceedings (or any claim or other matter therein), whether civil,
criminal, administrative or otherwise in nature, including any
settlements thereof of any appeals therein, with respect to which such
director, officer or employee is named or otherwise becomes or is
threatened to be made a party by reason of being or at any time having
been a director, officer or employee of the Company, or, at the
direction or request of the Company, a director, trustee, officer,
administrator, manager, employee, adviser or other agent of or fiduciary
for any other corporation, partnership, trust, venture or other entity
or enterprise including any employee benefit plan; provided, however,
that no
-8-
<PAGE> 68
person shall be indemnified to the extent, if any, that the directors of
the Company, acting at a meeting at which a quorum of directors who are
not parties to or threatened with any such action, suit, investigation
or proceeding, determine that such indemnification is contrary to
applicable law.
Any director of the Company who is a party to or threatened with any
such action, suit, investigation or proceeding shall not be qualified to
vote; and if for this reason a quorum of directors, who are not
disqualified from voting by reason of being parties to or threatened
with such action, suit, investigation or proceeding, cannot be obtained,
such determination shall be made by three attorneys at law, who have not
theretofore represented the Company in any matter and who shall be
selected by all of the officers and directors of the Company who are not
parties to or threatened with any such action, suit, investigation or
proceeding. If there are no officers or directors who are qualified to
make such selection, the selection shall be made by a Judge of the Court
of Common Pleas of Hamilton County, Ohio. Such indemnification shall not
be deemed exclusive of any other right to which such director, officer
or employee may be entitled under the Company's articles of
incorporation, code of regulations, any agreement, any insurance
purchased by the Company, vote of shareholders or otherwise.
The Board of Directors of the Company also may, in its discretion,
secure and maintain insurance policies against any liability asserted
against and incurred by any of the Company's directors, officers or
employees.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant 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 is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a trustee, director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted
by such trustee, director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such
issues.
ITEM 29. -- PRINCIPAL UNDERWRITERS
(a) Touchstone Securities, Inc. ("Touchstone") acts as distributor
for Contracts issued under Western-Southern Life Assurance
Company Separate Accounts 1 and 2 and as distributor for the
shares of several series (Funds) of Touchstone Series Trust
(formerly Select Advisors Trust A), each of which is affiliated
with the Depositor.
(b) Set forth below are the names, principal business addresses and
positions of each director and officer of Touchstone Securities.
-9-
<PAGE> 69
<TABLE>
<CAPTION>
Name Position/Office with Touchstone Securities
---- ------------------------------------------
<S> <C>
James N. Clark Director
400 Broadway
Cincinnati, Ohio 45202
Edward G. Harness, Jr. Director, Chief Executive Officer and President
311 Pike Street
Cincinnati, Ohio 45202
Edward S. Heenan Director and Controller
400 Broadway
Cincinnati, Ohio 45202
William F. Ledwin Director
400 Broadway
Cincinnati, Ohio 45202
Donald J. Wuebbling Director
400 Broadway
Cincinnati, Ohio 45202
Richard K. Taulbee Vice President
400 Broadway
Cincinnati, Ohio 45202
Carl A. Ramsey Vice President
8901 Indian Hills Drive
Omaha, Nebraska 68114
E. Duane Clay Vice President
8901 Indian Hills Drive
Omaha, Nebraska 68114
Robert F. Morand Secretary
400 Broadway
Cincinnati, Ohio 45202
Patricia Wilson Chief Compliance Officer
311 Pike Street
Cincinnati, Ohio 45202
</TABLE>
(c) The following table sets forth information about all commissions
and compensation received by the principal underwriter,
Touchstone Securities, Inc.
<TABLE>
<CAPTION>
Net Underwriting Discounts Compensation on Brokerage Commissions Compensation
and Commissions Redemptions
------------------------------- --------------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
$790,452 $ -0- $ -0- $ -0-
</TABLE>
-10-
<PAGE> 70
ITEM 30. -- LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules
promulgated thereunder are maintained by the Company at 400 Broadway,
Cincinnati, Ohio 45202.
ITEM 31. -- MANAGEMENT SERVICES
Not Applicable.
ITEM 32. -- UNDERTAKINGS
Registrant undertakes to:
(a) 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 16 months old for so long as payments under the
Contracts may be accepted;
(b) 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; and
(c) deliver any Statement of Additional Information and any
financial statements required to be made available under this
Form promptly upon written or oral request directed to the
address or telephone number contained in the Prospectus.
Registrant represents that it is relying upon a "no-action" letter
issued to the American Council of Life Insurance concerning that
conflict between the redeemability requirements of sections 22(e),
27(c)(1) and 27(d) of the Investment Company Act of 1940 and the limits
on the redeemability of variable annuities imposed by Section
403(b)(11) of the Internal Revenue Code. The Registrant has included
disclosure concerning the 403(b)(11) restrictions in its prospectus and
sales literature, and established a procedure whereby each plan
participant will sign a statement acknowledging these restrictions
before a Contract is issued. Sales representatives have been instructed
to bring the restrictions to the attention of potential plan
participants.
Registrant represents that it is relying upon Rule 6c-7 promulgated
under the Investment Company Act of 1940, as amended, with respect to
offering variable annuity contracts to participants in the Texas
Optional Retirement Program ("Program") and that it has complied with
or will comply with the provisions of paragraphs (a)-(d) of Rule 6c-7.
Registrant has included appropriate disclosure regarding the
restrictions on redemption imposed by the Program in each registration
statement, including the prospectus, used in connection with the
Program. Registrant will (1) include appropriate disclosure regarding
the restrictions on redemption imposed by the Program
-11-
<PAGE> 71
in any sales literature used in connection with the offer of annuity
contracts to Program participants, (2) instruct sales representatives
who solicit Program participants to purchase annuity contracts
specifically to bring the restrictions on redemption imposed by the
Program to the attention of potential Program participants, and (3)
obtain from each Program participant who purchases an annuity contract
in connection with the Program, prior to or at the time of such
purchase, a signed statement acknowledging the restrictions on
redemption imposed by the Program.
Pursuant to Section 26(e) of the Investment Company Act of 1940, as
amended, Western-Southern Life Assurance Company represents that, with
respect to the Contracts registered with the Commission by this
Registration Statement, as it may be amended, and offered by the
Prospectus included in this Registration Statement, all fees and
charges imposed for any purpose and in any manner and deducted under
the Contracts, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks
assumed by the Western-Southern Life Assurance Company.
-12-
<PAGE> 72
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Depositor, on behalf of itself and the
Registrant, has duly caused this Post-Effective Amendment No. 8 to its
Registration Statement under the Securities Act of 1933 and Amendment No. 9 to
its Registration Statement under the Investment Company Act of 1940 to be signed
on its behalf, in the City of Cincinnati and State of Ohio on the 5th day of
November, 1998.
WESTERN-SOUTHERN LIFE ASSURANCE
COMPANY SEPARATE ACCOUNT 2
By WESTERN-SOUTHERN LIFE
ASSURANCE COMPANY
By /s/ EDWARD S. HEENAN
-----------------------------
Edward S. Heenan,
Vice President and Controller
As required by the Securities Act of 1933, this Registration Statement
has been signed below by the following persons in the capacities and on the
date(s) indicated below.
<TABLE>
PRINCIPAL EXECUTIVE OFFICER:
<S> <C>
/s/ JOHN F. BARRETT November 5, 1998
- -------------------
John F. Barrett,
President, Director and
Chief Executive Officer
PRINCIPAL FINANCIAL OFFICER:
/s/ JAMES J. VANCE November 5, 1998
- ------------------
James J. Vance,
Treasurer
DIRECTORS:
DONALD A. BLISS
JAMES N. CLARK
LAWRENCE C. HAWKINS
J. HAROLD KOTTE By /s/ EDWARD S. HEENAN
CARL A. KROCH Edward S. Heenan,
EUGENE P. RUEHLMANN as attorney-in fact for each Director
THOMAS L. WILLIAMS
WILLIAM J. WILLIAMS November 5, 1998
</TABLE>
Advisor Annuity
-13-
<PAGE> 73
EXHIBIT INDEX
EXHIBIT DESCRIPTION
1 Resolutions of Executive Committee of the Board of
Directors of Western-Southern Life Assurance Company (the
"Company") establishing Western-Southern Life Assurance
Company Separate Account 2
4(a) Specimen Touchstone Advisors Variable Annuity Contract
9408-5570 WSA
4(e) Specimen Tax Sheltered Annuity Endorsement to Individual
Flexible Purchase Payment Deferred Variable Annuity
9801-5620 WSA
5 Specimen Application Form for Touchstone Advisor Variable
Annuity Contract DO-11-IFS-VARII-9805
9 Opinion and Consent of Donald J. Wuebbling, Esq.
10 Consent of PricewaterhouseCoopers LLP.
99 Powers of Attorney - Directors of the Company
<PAGE> 1
Exhibit 1
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY
Executive Committee Resolution
June 1, 1994
RESOLUTION ESTABLISHING
SEPARATE ACCOUNT
FOR THE VARIABLE ANNUITY
WHEREAS, the Company has decided to develop a variable annuity product; and
WHEREAS, a separate account is needed as a depository of the premiums paid under
such contracts and allocated to the variable account options under such
contracts;
NOW, THEREFORE, BE IT RESOLVED:
A. That the Company establish a separate account pursuant to the
provisions of Section 3907.15, Ohio Revised Code, to be called
the Western-Southern Life Assurance Company Separate Account 2
(the "Separate Account"); and
B. That the purpose of the Separate Account is to receive funds
deposited therein as purchase payments for variable annuity
contracts issued by the Company through the Separate Account
and to invest, manage and deal with such funds in accordance
with the terms of such variable annuity contracts; and
C. That pursuant to Section 3907.15, Ohio Revised Code, the
variable annuity contracts issued in respect of the Separate
Account shall provide that that portion of the assets of the
Separate Account equal to the reserves and other contract
liabilities under all annuities and other contracts identified
with such account shall not be chargeable with liabilities, or
otherwise subject to claims, arising out of any other business
in which the Company may be engaged; and
D. That the Company and the Separate Account shall make any
required application to the Securities and Exchange Commission
(the "Commission") for exemption from certain provisions of
Sections 26 and 27 of The Investment Company Act of 1940 (the
"Act") with respect to the mortality and expense risk
assumption charge to be provided for in the variable annuity
contracts; and
- 1 -
<PAGE> 2
E. That the President or any Vice President of the Company be,
and each of them hereby is, authorized, directed and empowered
to file the above mentioned application or applications (and
such amendments thereto as the President or any such Vice
President, or any of them, may deem appropriate) and to take
any such further action in connection therewith as the
President or any such Vice President, or any of them, may deem
appropriate, the filing of such amendments or the taking of
such further action being conclusive evidence that the same is
or are appropriate; and
F. That the officers of the Company be, and each of them hereby
is, authorized, directed and empowered to cause to be filed
with the Commission with respect to the offering of variable
annuity contracts through the Separate Account a registration
statement on Form N-4 under the Act and under the Securities
Act of 1933; and
G. That the officers of the Company be, and each of them hereby
is, authorized, directed and empowered to take any and all
action which, in the judgment of any such officer, is
necessary and appropriate in order to cause such variable
annuity contracts to be eligible for offering and sale under
the securities laws of any jurisdiction in which the Company
is qualified to issue such contracts, including, but not
limited to, making application for and obtaining qualification
or registration under such laws and, in that connection,
executing and filing such documents, including consents to
service of process and making any agreements that may appear
necessary, useful or appropriate with respect thereto the
taking of any such action to be conclusive evidence of the
necessity and appropriateness thereof; and
H. That the officers of the Company be, and each of them hereby
is, authorized, directed and empowered to execute such
additional documents and take such other and further action as
any such officer may deem necessary or appropriate for the
purpose of effecting the transactions contemplated by the
foregoing resolutions, the taking of any such action to be
conclusive evidence of the necessity and appropriateness
thereof.
I. That the fundamental investment policy of the Separate Account
shall be to invest or reinvest its assets in securities issued
by investment companies registered under the Investment
Company Act of 1940, as may be specified in the respective
variable annuity contracts; and
J. That specialized investment divisions may be established
within the Separate Account to which net payments under the
Contract will be allocated in
- 2 -
<PAGE> 3
accordance with instructions received from the Contract
holder, and that the Company is hereby authorized to create
such divisions and to increase or decrease the number of such
divisions as it deems necessary or appropriate from time to
time; and
K. That each such investment division shall invest only in the
shares of a single mutual fund or a single mutual fund
portfolio of an investment company organized as a series fund
pursuant to the Investment Company Act of 1940; and
L. That the officers of this Company be, and each of them hereby
is, authorized and empowered, in the names and on behalf of
the Separate Account and the Company to execute and file
irrevocable written consents on the part of the Separate
Account and the Company, to be used in those states wherein
the Contracts will be offered and such consents to service of
process may be required under the insurance or securities laws
of such states in connection with the registration or
qualification of the Contracts and, as necessary, to appoint
the appropriate state official, or such other person as may be
allowed by the insurance or securities laws, as agent or
agents of the Separate Account and of the Company for the
purpose of receiving and accepting process; and
M. That the officers of the Company be, and each of them hereby
is, authorized and empowered to establish procedures under
which the Company will provide voting rights for owners of the
Contracts with respect to securities owned by the Separate
Account; and
N. That the officers of the Company be, and each of them hereby
is, authorized and empowered to execute such agreement or
agreements as may be deemed necessary or appropriate (a) with
Interactive Financial Services, Inc. ("IFS") or another
qualified entity under which IFS or such other entity will be
appointed principal underwriter and distributor for the
Contracts and (b) with one or more other qualified entities to
provide administrative and/or custodial services in connection
with the establishment and maintenance of the Separate Account
and the design, issuance and administration of the Contracts;
and
O. That the officers of this Company be, and each of them hereby
is, authorized and empowered to enter into such agreement or
agreements as may be necessary or appropriate in connection
with the investment by the Separate Account in one or more
investment companies.
- 3 -
<PAGE> 4
* * *
The undersigned, Margaret A. Parks, does hereby certify that she is a duly
elected officer of Western-Southern Life Assurance Company and that the
foregoing is a true and correct and complete copy of a resolution presented to
and duly adopted by the Executive Committee of said corporation at a meeting
held on June 1, 1994.
------------------------------
Margaret A. Parks, Secretary
Date:
- 4 -
<PAGE> 1
Exhibit 4(a)
[WESTERN SOUTHERN LIFE LOGO]
Western-Southern Life Assurance Company
Agrees to provide the benefits and rights set out on this and the pages
that follow which are a part of the Contract. They are provided as consideration
for the application and purchase payment(s) for the Contract.
The Contract, the attached application, and any amendments, riders or
endorsements make up the entire Contract. The Contract does not take effect
until the Contract Date and until we have received the initial purchase payment.
TEN DAY FREE LOOK. PLEASE EXAMINE THE CONTRACT. IF YOU ARE NOT SATISFIED,
YOU MAY CANCEL THE CONTRACT BY RETURNING IT TO US AT OUR VARIABLE ANNUITY
SERVICE CENTER LISTED ON PAGE 3 WITHIN 10 DAYS AFTER YOU RECEIVE IT. WE WILL
REFUND THE CONTRACT VALUE COMPUTED AT THE END OF THE VALUATION PERIOD DURING
WHICH THE CONTRACT WAS RECEIVED, PLUS ANY PREMIUM TAX DEDUCTED FROM THE PURCHASE
PAYMENT, WITHIN 7 DAYS OF OUR RECEIPT OF THE CONTRACT.
/s/ JAMES N. CLARK /s/ JOHN F. BARRETT
- ----------------------- -------------------------
Secretary President and
Chief Executive Officer
This Annuity Contract is a legal contract between the Contract Owner and the
Company.
READ YOUR CONTRACT CAREFULLY
ALL VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THESE VALUES MAY INCREASE OR DECREASE TO REFLECT THE
INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT.
Issued by a Stock Company
Home Office: 400 Broadway, Cincinnati, Ohio 45202
FLEXIBLE PURCHASE PAYMENT DEFERRED VARIABLE ANNUITY
Income Payable at Income Date
Death Benefit Prior to Income Date
Non-Participating
<PAGE> 2
Contents
DATA PAGE......................................3
DEFINITIONS....................................4
ACCUMULATION PROVISIONS........................4
Purchase Payments............................4
Allocation of Purchase Payments..............4
Variable Account.............................5
Contract Value.............................5
Sub-Account................................5
Accumulation Units.........................5
Net Investment Factor......................6
Transfers....................................6
CONTRACT CHARGES AND DEDUCTIONS................7
Contract Maintenance Charge..................7
Mortality and Expense Risk Charge............7
Contract Administration Charge...............7
Premium Tax Deductions.......................7
SURRENDER AND WITHDRAWAL PROVISIONS............7
General Surrender Provisions.................7
Partial Withdrawals..........................8
Surrender....................................8
Delay in Payment.............................8
OWNERSHIP PROVISIONS...........................8
Contract Owner...............................8
Joint Owner..................................8
Contingent Owner.............................8
Beneficiary..................................9
Assignment...................................9
DEATH PROVISIONS...............................9
Death of Owner...............................9
Death of Annuitant...........................9
Death Benefit...............................10
Required Distributions......................10
Priority of Beneficiaries...................10
PAYOUT PROVISIONS.............................10
Income Date.................................10
Payout Plans................................11
Additional Interest.........................12
Choosing a Payout Plan......................12
Minimum Installment.........................13
Due Date....................................13
GENERAL PROVISIONS............................13
Reports.....................................13
Statements In Application...................13
Modification Of Contract....................13
Incontestability............................13
Incorrect Age Or Sex........................13
Place Of Payment............................13
Submission Of Contract......................13
Creditors' Claims...........................14
Proof Of Facts..............................14
Non-Participating...........................14
<PAGE> 3
DATA PAGE
Owner Region Number
Annuitant Annuitant's Birthdate
Contract Number Contract Date
Initial Purchase Payment Income Date
Western-Southern Life Assurance Company
Special Markets Service Center
P.O. Box 2850
Cincinnati, Ohio 45201-2850
ALLOCATION OF INITIAL PURCHASE PAYMENT (percentages must be in whole numbers not
less than 5% and must total 100%):
Emerging Growth Sub-Account 50%
International Equity Sub-Account
Value Plus Sub-Account
Growth & Income Sub-Account
Balanced Sub-Account 30%
Income Opportunity Sub-Account
Bond Sub-Account 20%
Standby Income Sub-Account
CURRENT ANNUAL MORTALITY AND
EXPENSE RISK CHARGE .70%
3
<PAGE> 4
DEFINITIONS
"The Company", "we", "our" and "us", is Western-Southern Life Assurance
Company.
"Accumulation Unit" is an accounting unit of measure used to calculate the
Contract Value prior to the Income Date.
"Annuitant" is the natural person whose life is used to determine the
duration and amount of any annuity payments.
"Beneficiary" is the person, persons or entity to whom the death benefit
will be paid if the Annuitant dies before the Income Date.
"Contract Year" is a year starting with the Contract Date indicated on page
3 or with a Contract Anniversary. A "Contract Anniversary" is the same day
and month as the Contract Date in each subsequent year.
"Income Date" is the date annuity payments begin. The Income Date is shown
on page 3 and can be changed by written notice to us.
"Owner" is the person, persons or entity having all rights under this
Contract unless otherwise provided. If there are Joint Owners they own the
Contract equally with a right of survivorship. "Contingent Owner" is the
person, persons or entity who will own the Contract following the Owner's
death (or the death of both Joint Owners).
"Portfolio" is an investment portfolio of an open-end management investment
company registered under the Investment Company Act of 1940.
"Qualified Contracts" are Contracts purchased in connection with a plan
that qualifies for favorable tax treatment under Sections 401, 403(b) or
408 of the Internal Revenue Code.
"Sub-Account" is a division of the Variable Account which invests in a
Portfolio. Purchase payments allocated to the Variable Account are further
allocated to one or more of these Sub-Accounts, as designated by the Owner.
"Surrender Value" is the Contract Value less the Contract Maintenance
Charge.
"Valuation Date" is each day on which valuation of the Sub-Accounts is
required by applicable law, including every day that the New York Stock
Exchange is open.
"Valuation Period" is the period of time beginning at the close of a
Valuation Date and ending at the close of the next succeeding Valuation
Date.
"You" and "your" refer to the Owner or Owners if there are Joint Owners.
ACCUMULATION PROVISIONS
PURCHASE PAYMENTS
The initial purchase payment may not be less than $5,000. Subsequent
purchase payments must be at least $1,000, and may be made at any time.
The total of all purchase payments under this Contract may not exceed
$500,000 without prior approval of the Company.
ALLOCATION OF PURCHASE PAYMENTS
You elect to have purchase payments allocated to one or more Sub-Accounts
of the Variable Account. Each allocation must be in whole percentages of at
least 5%. The sum of the allocation percentages must equal 100%.
The allocation of the initial purchase payment is set forth on page 3.
Additional purchase payments will be allocated in the same manner as your
initial purchase payment unless
4
<PAGE> 5
changed by written request. All purchase payments received after a change
in allocation will be invested in the same manner as your most recent
allocation unless you instruct otherwise in writing.
VARIABLE ACCOUNT
The Variable Account is a separate investment account of the Company.
Assets of the Variable Account are the property of the Company and will be
used to provide values and benefits under this Contract and similar
contracts. The Variable Account may not be charged with liabilities arising
out of any other business the Company may conduct.
CONTRACT VALUE
The Contract Value is equal to the current value of all Accumulation Units
credited to the Sub-Accounts pursuant to this Contract.
SUB-ACCOUNT
The Variable Account is divided into Sub-Accounts, each of which invests in
a Portfolio. Purchase payments are allocated to one or more of these
Sub-Accounts as designated by you.
The Company may from time to time make additional Sub-Accounts available.
These Sub-Accounts will invest in investment portfolios that the Company
deems suitable for the Contracts. The Company also has the right to
eliminate Sub-Accounts from the Variable Account, to combine two or more
Sub-Accounts, or to substitute a new Portfolio or similar investment option
for the Portfolio in which a Sub-Account invests. A substitution may become
necessary if, in the Company's judgment, the Portfolio or other investment
option no longer suits the purposes of the Contracts. This may happen due
to unsatisfactory investment performance, a change in laws or regulations,
a change in a Portfolio's investment objectives or restrictions, because
the Portfolio is no longer available for investments, or for some other
reason. The Company will obtain prior approval from The Securities and
Exchange Commission to the extent required and any other required approvals
before making such a change or substitution.
ACCUMULATION UNITS
The Company will use amounts allocated or transferred to a Sub-Account to
buy Accumulation Units. The number of Accumulation Units is determined by
dividing the amount allocated or transferred to the Sub-Account by the
Accumulation Unit Value for the Sub-Account for the Valuation Period during
which the purchase payment was received or the transfer was made.
The Accumulation Unit Value for each Sub-Account was arbitrarily set at $10
when the first Portfolio interest was purchased by the Sub-Account. The
Accumulation Unit Value for any subsequent Valuation Period is equal to:
o The Accumulation Unit Value for the Sub-Account for the immediately
preceding Valuation Period; multiplied by
o The Net Investment Factor for the Sub-Account for such subsequent
Valuation Period.
5
<PAGE> 6
NET INVESTMENT FACTOR
The Net Investment Factor is an index applied to measure the investment
performance of a Sub-Account from one Valuation Period to the next. The Net
Investment Factor may be greater or less than one; therefore, the
Accumulation Unit Value may increase or decrease.
For all Sub-Accounts (except the Growth & Income Sub-Account and the Bond
Sub-Account), the Net Investment Factor for each Sub-Account for any
Valuation Period is determined by dividing (a) by (b) and subtracting (c)
from the result, where
(a) is:
(1) the net asset value per share of the corresponding Portfolio at the
end of the current Valuation Period, plus
(2) the per share amount of a dividend or capital gain distribution
made by the Portfolio on shares held in the Sub-Account if the
"ex-dividend" date occurs during the current Valuation Period, plus
or minus
(3) a per share charge or credit for any taxes reserved, which is
determined by the Company to have resulted from the investment
operations of the Sub-Account during the current Valuation Period;
and
(b) is:
(1) the net asset value per share of the corresponding Portfolio at the
end of the immediately preceding Valuation Period, plus or minus
(2) a per share charge or credit for any taxes reserved for the
immediately preceding Valuation Period; and
(c) is:
a factor representing the charges deducted from the Sub-Account on
a daily basis for the daily portion of the annual Mortality and
Expense Risk Charge and the annual Contract Administration Charge.
For the Growth & Income Sub-Account and the Bond Sub-Account, the Net
Investment Factor for any Valuation Period is equal to one plus the net
result of (a) divided by (b) where:
(a) is the accrued gain or loss in the corresponding Sub-Account for the
Valuation Period, including investment income, capital gains and
losses, adjusted by:
(1) a charge to the Sub-Account on a daily basis representing the
portion of the annual Mortality and Expense Risk Charge and the
annual Contract Administration Charge that is allocable to the
Sub-Account for the Valuation Period, and
(2) a charge or credit to the Sub-Account for any tax charge or tax
credit determined by the Company to have resulted from the
investment operations of the Sub-Account during the Valuation
Period; and
(b) is the value of the Sub-Account as of the close of the immediately
preceding Valuation Period.
TRANSFERS
You may transfer all or a portion of the Contract Value among the
Sub-Accounts. A transfer request must be in writing unless telephone
transfer authorization has been received and approved by the Company.
Transfers must be in amounts not less than $250 and may be made among
Sub-Accounts once every thirty days.
When transferring Contract Value to more than one Sub-Account, not less
than 5% of the total amount being transferred can be directed to each such
Sub-Account.
6
<PAGE> 7
We may at any time revoke or modify the transfer provisions. Any change
will be confirmed in writing to you.
CONTRACT CHARGES AND DEDUCTIONS
The following contract charges may be imposed and are designed to reimburse
the Company for expenses incurred that relate to the Contract. The Company
guarantees that these charges will not increase, with the exception of the
premium tax deduction.
CONTRACT MAINTENANCE CHARGE
On each Contract Anniversary prior to the Income Date we will deduct a
Contract Maintenance Charge of $35. The charge will also be deducted on any
date that is not a Contract Anniversary on which you fully surrender the
Contract or on the Income Date.
MORTALITY AND EXPENSE RISK CHARGE
On each Valuation Date we will deduct from the Accumulation Unit Value a
Mortality and Expense Risk Charge equal to a percentage of such value that
is the daily equivalent of a maximum effective annual rate of .90%. The
current Mortality and Expense Risk Charge is shown on the Data Page. The
Company assumes a "mortality risk" from our promise to pay a death benefit
prior to the Income Date and from our obligation to make annuity payments
to each annuitant regardless of how long he or she lives. For assuming this
risk, we deduct a charge equal to a maximum annual rate of .60% of the
assets in the Sub-Account. The Company assumes an "expense risk" from the
possibility that amounts deducted for administrative expenses may be
insufficient to cover the actual costs. For assuming this risk, we deduct a
charge at a maximum annual rate of .30% of the assets in the Sub-Account.
CONTRACT ADMINISTRATION CHARGE
On each Valuation Date we will deduct from the Accumulation Unit Value a
Contract Administration Charge equal to a percentage of such value that is
the daily equivalent of an effective annual rate of .10%.
PREMIUM TAX DEDUCTIONS
The Company will deduct the amount of any premium taxes levied by a state
or any other governmental entity. The Company currently deducts the
applicable amount of premium taxes from the Contract Value on the Income
Date except in those states which require such taxes to be paid when
purchase payments are made. In those states, the Company deducts the
applicable amount of premium taxes upon receipt of a purchase payment.
SURRENDER AND WITHDRAWAL PROVISIONS
GENERAL SURRENDER PROVISIONS
The Owner may withdraw part or surrender all of the Contract Value at any
time this Contract is in force and prior to the earlier of the Income Date
and the Annuitant's death, subject to the conditions set forth below. The
withdrawal or surrender will be effective on the Valuation Date on or next
following the date we receive your request at our Variable Annuity Service
Center. The Company is not responsible for the tax consequences of any
withdrawals or surrender.
7
<PAGE> 8
PARTIAL WITHDRAWALS
You may request in writing to withdraw part of the Contract Value in
amounts not less than $250. Your request must be received before the Income
Date. The Contract Value may not be reduced to below $5,000 by a partial
withdrawal. The amount withdrawn from the Contract Value will include any
charges.
The Company will process the withdrawals, unless instructed otherwise, by
liquidating, on a pro rata basis, Accumulation Units from all Sub-Accounts
in which Contract Value is allocated.
SURRENDER
The Surrender Value is the amount that will be paid if the full Contract
Value is surrendered. When written request for surrender and the Contract
are received, the Company will pay the Contract Value on the date the
surrender is effective less any Contract Maintenance Charge which applies.
DELAY IN PAYMENT
Payment of a surrender or withdrawal from the Variable Account will be made
within seven days. The Company has the right to suspend or delay
calculation or payment of any surrender or withdrawal from the Variable
Account for any of the following reasons:
1. The New York Stock Exchange is closed other than for customary weekend
and holiday closings; or
2. Trading on the New York Stock Exchange is restricted; or
3. An emergency exists as a result of which disposal of the securities is
not reasonably practicable or it is not reasonably practicable to
fairly determine the value of the net assets of the Variable Account;
or
4. The Securities and Exchange Commission, by order, permits postponement
of payments for the protection of security holders; or
5. The request for surrender or withdrawal is not made in writing.
Rules and regulations of the Securities and Exchange Commission will govern
as to whether the conditions set forth in numbers 2 and 3 above exist.
OWNERSHIP PROVISIONS
CONTRACT OWNER
The Annuitant is the Owner of the Contract unless some other person(s)
is(are) named as Owner on page 3. The Owner has all rights under the
Contract unless otherwise provided.
JOINT OWNER
The Contract may be owned by two persons as Joint Owners. In this case,
both Joint Owners must consent to any withdrawals, surrenders or changes to
the Contract or beneficiary.
CONTINGENT OWNER
If you are the Owner but are not the Annuitant, you may name a Contingent
Owner to take over as Owner upon your death. The naming of a Contingent
Owner will not take effect until we record it at the Home Office. We are
not responsible for the tax consequences resulting from the change of the
Owner.
8
<PAGE> 9
BENEFICIARY
You may designate a beneficiary and change any designated beneficiary any
time during the lifetime of the Annuitant by written notice satisfactory to
us. The change will take effect on the date the notice is signed. A change
will not apply to any payment we make or any other action we take before
the notice is received and recorded by us at our Home Office.
ASSIGNMENT
You may assign the Contract in writing. The assignment will not bind us
until our Home Office records show that we have received a copy. Your
rights and those of any beneficiary or Contingent Owner will be subject to
the assignment. We are not responsible for the validity or tax consequences
of the assignment.
DEATH PROVISIONS
DEATH OF OWNER
If the Contract is owned by Joint Owners and one of them dies, the
surviving Owner will become the sole Owner. If the Contract is owned by one
person and a Contingent Owner has been named, the Contingent Owner will
become the Owner if the sole Owner dies. If there is no Joint Owner or
Contingent Owner at the time of the Owner's death, the estate of the Owner
becomes Owner.
If an Owner who is not also the Annuitant dies before the Annuitant and
before the Income Date, the Surrender Value must be paid to the new Owner
(or surviving Joint Owner) within 5 years of the deceased Owner's death.
Alternatively, the new Owner (or surviving Joint Owner) may elect to
receive periodic payments to begin within one year of the deceased Owner's
death in the form of a life annuity or an annuity for a period certain not
exceeding the new Owner's (or surviving Joint Owner's) life expectancy. (If
the Annuitant dies prior to payment of the Surrender Value or commencement
of periodic payments, no death benefit shall be payable.) In addition, if
the new Owner (or surviving Joint Owner) is the surviving spouse of the
deceased Owner, then the Contract may continue in the name of the surviving
spouse who may exercise all rights of ownership under the Contract.
If an Owner or Joint Owner who is the Annuitant dies before the Income
Date, the Death of Annuitant provision shall apply.
If an Owner dies on or after the Income Date, any payments that remain to
be made must be made at least as rapidly as under the payout plan in effect
on the date of the Owner's death.
DEATH OF ANNUITANT
If the Annuitant dies before the Income Date, the beneficiary will be paid
a death benefit. The death benefit will be paid to the beneficiary either
in one sum or in the form of an annuity if the beneficiary should so elect
within 60 days of the Annuitant's death. However, if the Annuitant is the
Owner and the surviving spouse is the sole beneficiary, then the spouse may
elect to continue the Contract and become the new Owner and Annuitant.
9
<PAGE> 10
DEATH BENEFIT
If the Annuitant dies prior to the first day of the calendar month after
his or her 80th birthday, the death benefit will equal the greater of (1)
the Contract Value on the date both due proof of death and death benefit
payout instructions are received by the Company; and (2) the sum of all
purchase payments less any amounts previously withdrawn. If the Annuitant
dies on or after the first day of the calendar month after his or her 80th
birthday, the death benefit will equal the Contract Value on the date both
due proof of death and death benefit payout instructions are received by
the Company.
REQUIRED DISTRIBUTIONS
An Owner or beneficiary who is required to surrender this Contract within a
specified time or begin to receive payments in the form of a life annuity
or annuity for a period certain not exceeding the recipient's life
expectancy may choose a Payout Plan in the Payout Provisions of the
Contract that meets those requirements.
PRIORITY OF BENEFICIARIES
You may designate the beneficiaries as primary or contingent to indicate
the order in which they will receive any death benefit payable. If you name
two or more beneficiaries of the same class, they will share equally unless
you state how they are to share. If you identify a beneficiary as a
relative, we will interpret that to mean a relative of the Annuitant unless
you state that the relationship is to another person.
Any death benefit will be paid to the primary beneficiaries who are living
when payment is due. If there are no living primary beneficiaries, payment
will be made to the contingent beneficiaries who are living when payment is
due. If all beneficiaries have predeceased the Annuitant, the death benefit
will be paid to the Owner if different than the Annuitant and, if not, to
the Annuitant's estate.
Any beneficiary who dies within 10 days after the Annuitant's death will
not be entitled to any benefits payable on such a death unless that
beneficiary is living when we receive due proof of the Annuitant's death.
PAYOUT PROVISIONS
INCOME DATE
We will start annuity payments on the Income Date shown on page 3 unless
you request a change in the Income Date. The Income Date is the Contract
Anniversary on or following the Annuitant's 80th birthday or the 10th
Contract Anniversary, if later, unless otherwise indicated on page 3. The
Income Date can be changed by written notice to us. Your written request
must be received by us at least 31 days prior to the existing Income Date.
Upon receipt of your request, the Income Date will be the date you select.
Annuity payments will be paid to the Annuitant unless you designate another
payee. You may change the payee at any time by written notice to us. Such
notice must be received at our Home Office at least 31 days prior to a
payment due date for the change to be effective on such date. An executor,
administrator, trustee, corporation, partnership or association other than
the Owner may not be a payee without our approval. A payee designation is
automatically revoked by the death of the designated payee.
10
<PAGE> 11
PAYOUT PLANS
You may apply the Surrender Value, less any applicable premium tax, under
any of the following payout plans. You may also request quarterly,
semiannual, or annual payments in place of monthly payments, or, with our
approval, choose another plan that is not listed below.
1) Installment Income Plans
A) Fixed Period - Paid in equal monthly payments for the number of
years you select (1-30). The payments for each $1,000 applied will
not be less than those shown in the Fixed Period Table.
B) Fixed Amount - Paid in equal monthly payments of $5 or more for
each $1,000 applied until the full amount with compound interest at
not less than 3% a year is used up.
2) Life Income Plans
A) One Life - Paid in equal monthly payments during the lifetime of a
designated person. We will guarantee payments for either 10 years
or 20 years and for as long as that person lives. Payments for each
$1,000 applied will not be less than those shown in the One Life
Table. The amount paid is based on the person's sex and age on the
date of the first payment. Payments may not be commuted.
B) Joint and Survivor - Paid in equal monthly payments during the
lifetimes of two designated persons. Payments will continue as long
as either person is living. The amount of each payment is based on
both persons' sex and age on the date of the first payment. If
either one dies before the due date of the first payment, we will
make payments during the survivor's lifetime under Life Income Plan
A with payments guaranteed for 10 years. Payments may not be
commuted.
If you do not elect a payout plan by the Income Date, we will apply the
Surrender Value, less any applicable premium tax, on the Income Date under
Life Income Plan A with monthly payments guaranteed for 10 years. When a
payee dies, any remaining payments will be paid to the Owner unless the
Owner names another payee.
FIXED PERIOD MINIMUM INCOME TABLE*
Monthly Payments for each $1,000 applied
----------------------------------------------------
Number Monthly Number Monthly Number Monthly
of Install- of Install- of Install-
Years ments Years ments Years ments
----------------------------------------------------
1 $84.47 11 $8.86 21 $5.32
2 42.86 12 8.24 22 5.15
3 28.99 13 7.71 23 4.99
4 22.06 14 7.26 24 4.84
5 17.91 15 6.87 25 4.71
6 15.14 16 6.53 26 4.59
7 13.16 17 6.23 27 4.47
8 11.68 18 5.96 28 4.37
9 10.53 19 5.73 29 4.27
10 9.61 20 5.51 30 4.18
----------------------------------------------------
*Values are based on compound interest at 3% a year.
11
<PAGE> 12
ONE LIFE MINIMUM INCOME TABLE*
Monthly Payments for each $1,000 applied
<TABLE>
<CAPTION>
Age of Life Life Age of Life Life
Payee 10 Years 20 Years Payee 10 Years 20 Years
Last Certain Certain Last Certain Certain
Birth- -------------------------------- Birth- --------------------------------
day Male Female Male Female day Male Female Male Female
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15 and
under $2.84 $2.77 $2.84 $2.76 50 $4.04 $3.71 $3.92 $3.66
16 2.86 2.78 2.85 2.78 51 4.11 3.77 3.98 3.71
17 2.87 2.79 2.87 2.79 52 4.18 3.83 4.04 3.76
18 2.89 2.80 2.88 2.80 53 4.26 3.89 4.10 3.82
19 2.90 2.82 2.90 2.81 54 4.35 3.96 4.16 3.87
20 2.92 2.83 2.91 2.83 55 4.43 4.03 4.23 3.93
21 2.94 2.84 2.93 2.84 56 4.53 4.10 4.29 4.00
22 2.96 2.86 2.95 2.85 57 4.62 4.18 4.36 4.06
23 2.97 2.87 2.97 2.87 58 4.73 4.27 4.43 4.13
24 2.99 2.89 2.99 2.88 59 4.83 4.36 4.50 4.20
25 3.02 2.90 3.01 2.90 60 4.95 4.45 4.57 4.27
26 3.04 2.92 3.03 2.92 61 5.07 4.55 4.64 4.34
27 3.06 2.94 3.05 2.94 62 5.20 4.66 4.71 4.42
28 3.08 2.96 3.07 2.95 63 5.33 4.77 4.78 4.49
29 3.11 2.98 3.10 2.97 64 5.47 4.89 4.84 4.57
30 3.14 3.00 3.12 2.99 65 5.62 5.01 4.91 4.64
31 3.16 3.02 3.15 3.01 66 5.77 5.15 4.97 4.72
32 3.19 3.04 3.18 3.04 67 5.93 5.29 5.04 4.80
33 3.22 3.07 3.21 3.06 68 6.09 5.44 5.09 4.87
34 3.26 3.09 3.24 3.08 69 6.26 5.59 5.15 4.94
35 3.29 3.12 3.27 3.11 70 6.43 5.76 5.20 5.01
36 3.32 3.15 3.30 3.13 71 6.61 5.93 5.24 5.08
37 3.36 3.17 3.33 3.16 72 6.79 6.11 5.29 5.14
38 3.40 3.20 3.37 3.19 73 6.97 6.30 5.32 5.20
39 3.44 3.24 3.41 3.22 74 7.16 6.50 5.36 5.25
40 3.48 3.27 3.45 3.25 75 7.34 6.70 5.39 5.30
41 3.53 3.30 3.49 3.29 76 7.53 6.91 5.41 5.34
42 3.58 3.34 3.53 3.32 77 7.71 7.12 5.43 5.37
43 3.63 3.38 3.57 3.36 78 7.89 7.33 5.45 5.40
44 3.68 3.42 3.62 3.39 79 8.06 7.54 5.47 5.43
45 3.73 3.46 3.66 3.43 80 8.23 7.75 5.48 5.45
46 3.79 3.51 3.71 3.47 81 8.39 7.95 5.49 5.47
47 3.85 3.55 3.76 3.52 82 8.53 8.15 5.50 5.48
48 3.91 3.60 3.81 3.56 83 8.67 8.33 5.50 5.49
49 3.97 3.65 3.87 3.61 84 8.80 8.50 5.51 5.50
85 and 8.92 8.66 5.51 5.50
over
</TABLE>
*Values are based on the "1983 Table a" adjusted for
age last birthday, with compound interest at 3% a year.
ADDITIONAL INTEREST
We guarantee interest under all Installment Income and Life Income Plans at
a minimum rate of 3% per year. We may increase the interest rate above the
minimum on these plans. Monthly payments under these plans will be based on
the interest rate in effect on the due date of the first payment.
CHOOSING A PAYOUT PLAN
You may choose or change a payout plan any time before the Income Date. The
choice or later change of a payout plan must be in writing and in
satisfactory form to us. If you make the request, it must be received
before the Income Date. The minimum amount which may be applied under a
payout plan is $1,000. Any choice involving more than one payout plan must
have our approval.
12
<PAGE> 13
MINIMUM INSTALLMENT
Each payment must be at least $50. We may change the number of payments we
make in a year so that each payment is at least $50. If the amount to be
applied is less than $1,000 or an annual payment would be less than $50,
the payout plan will not take effect or will terminate.
DUE DATE
The first payment under a payout plan chosen by the beneficiary will be due
on the date the plan is selected. The first payment under a payout plan
chosen by you for the beneficiary will be due on the date of the
Annuitant's death. The first payment under a payout plan chosen by you upon
withdrawal of the Surrender Value will be due when the request to withdraw
is received.
GENERAL PROVISIONS
REPORTS
At least once each Contract Year prior to the Income Date, we will mail a
report to you at your last address known to us. This report shall include a
statement of the Variable Account Value. The information in this report
shall be as of the date not more than 4 months prior to the date the report
is mailed. We will also send you confirmations of transactions under the
Contract, such as purchase payments, transfers and withdrawals and, at
least semi-annually, a report of the investments held in the Sub-Accounts
and any other information required by applicable law or regulation.
STATEMENTS IN APPLICATION
All statements made in the application are considered to be representations
and not warranties. No statement will be used in defense of a claim unless
it is in the application.
MODIFICATION OF CONTRACT
Any change in the Contract or waiver of its provisions must be in writing
and signed by our Chairman, President or Secretary. No other person can
change or waive any of its provisions.
INCONTESTABILITY
The Contract will be incontestable after it has been in force during the
Annuitant's lifetime for two years from the Contract Date.
INCORRECT AGE OR SEX
If the age or sex of the Annuitant has been misstated, we will adjust all
benefits to those that the purchase payment(s) for the Contract would have
purchased for the correct age and sex. Any overpayments we make will be
charged with compound interest against subsequent payments. Any amounts we
owe as a result of underpayments will be paid with compound interest upon
receipt of notice of the underpayment. The rate will be the rate we used to
determine the number or amount of the payments.
PLACE OF PAYMENT
We will make all payments due under the contract at our Home Office.
SUBMISSION OF CONTRACT
We may ask you to relinquish the Contract or send it to us for endorsement
before we make any payment. Failure to have you relinquish the Contract or
to note payment on it does not indicate that we have not made payment.
13
<PAGE> 14
CREDITORS' CLAIMS
All payments under the Contract will be exempt from the claims of creditors
and legal process to the extent permitted by law. No payment will be
transferred, assigned or withdrawn before it becomes payable unless we
agree.
Proof Of Facts
We may ask any person claiming the right to payments for proof satisfactory
to us of such person's right to payment. Any payment we make relying on
that proof discharges us from any obligation to make that payment to
another person. We will require proof of date of birth of the person(s) on
whose life (or lives) payments are based.
NON-PARTICIPATING
This contract does not participate in surplus earnings of the Company.
14
<PAGE> 15
Western-Southern Life Assurance Company
Cincinnati, Ohio
Issued by a Stock Company
Home Office: 400 Broadway, Cincinnati, Ohio 45202
FLEXIBLE PURCHASE PAYMENT DEFERRED VARIABLE ANNUITY
Income Payable at Income Date
Death Benefit Prior to Income Date
Non-Participating
<PAGE> 1
Exhibit 4(e)
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY
TAX SHELTERED ANNUITY ENDORSEMENT TO INDIVIDUAL
FLEXIBLE PURCHASE PAYMENT DEFERRED VARIABLE ANNUITY
THE TERMS OF THIS ENDORSEMENT APPLY AND REPLACE CONTRARY CONTRACT TERMS IF THE
APPLICATION INDICATES THE CONTRACT IS A TAX SHELTERED ANNUITY ("TSA") UNDER
INTERNAL REVENUE CODE ("CODE") SECTION 403(B). IN THE EVENT OF ANY CONFLICT
BETWEEN THIS CONTRACT AND ANY CODE SECTIONS APPLICABLE TO THE ANNUITY DESCRIBED
ABOVE, THE CODE WILL GOVERN. TO QUALIFY UNDER THE CODE, YOUR CONTRACT MUST MEET
THE FOLLOWING REQUIREMENTS:
1. This contract is not transferable and may not be sold, assigned,
discounted, or pledged as collateral for a loan or as security for the
performance of any obligation to any person other than to the Company.
2. You must be the contract Owner and the Annuitant. You must be an
employee ("Employee") of an employer described in Code Section
403(b)(1)(A) ("Employer"). If your employment with the Employer is
terminated, and you are employed by another Employer described in Code
Section 403(b)(1)(A) ("Successor Employer"), you may continue to
participate hereunder and future purchase payments may continue to be
made. Any reference to Employer in this Endorsement shall include a
Successor Employer. If your employment with your Employer is
terminated, you may continue to participate under this contract to the
extent of the Contract Value. Purchase payments (other than Rollover
Contributions) made when you are no longer employed by the Employer may
affect your tax liability under the contract. Any election or change
hereunder must be made by written notice satisfactory to the Company
and consistent with applicable state and federal law.
3. Except as otherwise provided in the Code, purchase payments must be
made by the Employer. Purchase payments made for your taxable year,
other than rollover contributions, as provided in Code Section
403(b)(8) may not exceed the least of:
A. the exclusion allowance for a taxable year determined pursuant to
Code Section 403(b)(2);
B. the maximum amount permitted to be contributed for a taxable year
under Code Section 415; and
C. the annual limit on elective deferrals specified in Code Section
402(g) for salary reduction contributions made under a Code
approved salary reduction agreement. Unless otherwise permitted in
the Code, the limitation specified in Code Section 403(b)(1)(E)
shall not be exceeded.
4. Your entire interest under the contract accruing after December 31,
1986, will be distributed as follows:
The Code establishes a time ("required beginning date") at which you
must begin to take distribution from your contract.
In general, the required beginning date is the later of April 1 of the
calendar year following the calendar year in which you attain age
70-1/2, or April 1 of the calendar year following the calendar year in
which you retire. Your entire interest will be distributed over (a)
your life or the lives of you and your designated beneficiary or (b) a
period certain not extending beyond your life expectancy, or the joint
and last survivor expectancy of you and your designated beneficiary.
Payments must be made in periodic payments at intervals of no longer
than one year. In addition, payments must be either nonincreasing or
they may increase only as provided in Section 1.401(a)(9)-1 of the
Proposed Income Tax Regulations.
All distributions made hereunder shall be in accordance with the
requirements of Code Section 401(a)(9), including the incidental death
benefit requirements of Code 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 Income Tax
Regulations.
1
<PAGE> 2
In addition to meeting the distribution requirements of the regulations
mentioned in the prior paragraph, payments under a partial withdrawal
option or an annuity option must also comply with the minimum
distribution incidental benefit (MDIB) requirements under Code Section
401(a)(9) of the Internal Revenue Code. The amount to be distributed
each year beginning with the first calendar year for which
distributions are required and then for each succeeding calendar year
shall not be less than the quotient obtained by dividing your benefit
by the lesser of (1) the applicable life expectancy, or (2) if your
spouse is not the designated beneficiary, the applicable divisor
determined from the table set forth in Q & A-4 of Section 1.401(a)(9)-2
of the Proposed Income Tax Regulations. Distributions after your death
shall be calculated using the applicable life expectancy as the
relevant divisor without regard to Section 1.401(a)(9)-2 of the
Proposed Income Tax Regulations. This MDIB rule may increase the amount
of your payments. If we are required to make a distribution to you at
year end because payments made to you during the calendar year are
insufficient to meet MDIB requirements for this contract, we will waive
any surrender charge that might otherwise be applicable.
You may satisfy the minimum distribution requirements applicable to two
or more 403(b) Tax Sheltered Annuities by receiving a distribution from
one such annuity equal to the amount required to satisfy the minimum
distribution requirement for all such 403(b) Tax Sheltered Annuities,
as described in more detail in IRS Notice 88-38.
Life expectancy is computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations. Unless
otherwise elected by you by the time distributions are required to
begin, life expectancy shall be recalculated annually. Such election
shall be irrevocable 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 individual
attains age 70-1/2 and payments for subsequent years shall be
calculated on such life expectancy reduced by one for each calendar
year which has elapsed since the calendar year life expectancy was
first calculated.
5. If you die before your entire interest which accrued after December 31,
1986, has been distributed, the following distribution rules shall
apply:
A. If you die after the distribution of your interest has commenced,
the remaining portion of your interest will continue to be
distributed at least as rapidly as under the methods of
distribution being used prior to your death.
B. If you die before distribution of your interest commences, your
entire post-1986 interest will be distributed by December 31 of the
calendar year containing the fifth anniversary of your death,
unless an election is made to receive distribution in accordance
with (1) or (2) below:
(1) If your interest is payable to a designated beneficiary and
you have not made an election as described above, then the
entire interest will be distributed over the life or over a
period certain not greater than the life expectancy of your
designated beneficiary commencing on or before December 31 of
the calendar year immediately following the calendar year of
your death. Your designated beneficiary may elect at any time
to receive greater payments.
(2) If your designated beneficiary is your surviving spouse, your
spouse may elect to receive equal or substantially equal
payments over the life or life expectancy of the surviving
spouse commencing at any date prior to the later of
(i) December 31 of the calendar year immediately following the
calendar year of your death; and (ii) December 31 of the
calendar year in which you would have attained age 70-1/2.
Such election must be made no later than the earlier of
December 31 of the calendar year containing the fifth
anniversary of your death or the date distributions are
required to begin pursuant to the preceding sentence. Your
surviving spouse may accelerate these payments at any time,
i.e., increase the frequency or amount of such payments.
2
<PAGE> 3
Life expectancy is computed by use of the expected return multiples and
Tables V and VI of Section 1.72-9 of the Income Tax Regulations. For
purposes of distributions beginning after your death, unless otherwise
elected by your surviving spouse by the time distributions are required
to begin, life expectancy 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 beneficiary, life expectancy
shall be recalculated 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 your attaining your required
beginning date or, if prior to the required beginning date,
distributions irrevocably commence over a period permitted and in an
annuity form acceptable under Section 1.401(a)(9) of the Regulations.
6. You may withdraw part or all of the Contract Value at any time this
contract is in force prior to the earlier of the Income Date or your
death.
A. The withdrawal of Contract Value attributable to contributions made
pursuant to a salary reduction agreement (within the meaning of
Code Section 402(g)(3)(C)) may be executed only
(1) when you attain age 59-1/2, separate from service, die, or
become disabled (within the meaning of Code Section 72(m)(7));
or
(2) in the case of hardship (as defined for purposes of Code
Section 401(k)), provided that any withdrawal of Contract
Value in the case of hardship may not include any income
attributable to salary reduction contributions.
B. The withdrawal limitations described in A. above apply to
(1) salary reduction contributions to Code Section 403(b)
contracts made for plan years beginning after December 31,
1988, and
(2) earnings credited to such contracts after the last plan year
beginning before January 1, 1989, on amounts attributable to
salary reduction contributions.
C. Any request for a withdrawal due to hardship must be submitted with
evidence acceptable to the Company on forms provided by the Company
and consistent with applicable law.
7. A. Notwithstanding any provision of a plan to the contrary that would
otherwise limit a distributee's election under this Section, a
distributee may elect in writing and not less than 30 or more than
90 days prior to distribution, to have any portion of an eligible
rollover distribution hereunder paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
B. Definitions:
(1) Eligible rollover distributions: An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include: 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 distributee or the joint
lives (or joint life expectancy) of the distributee and the
distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such distribution is required under Code Section 401(a)(9) of
the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
3
<PAGE> 4
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Code Section
408(a), an individual retirement annuity described in Code
Section 408(b), or an annuity plan described in Code Section
403(b), that accepts the distributee's eligible rollover
distribution.
(3) Distributee: a distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Code Section
4l4(p), are distributees with regard to the interest of the
spouse or former spouse.
(4) Direct rollover: A direct rollover is a direct payment
hereunder to the eligible retirement plan specified by the
distributee.
8. The Company is not liable for any tax or tax penalties paid by any
party resulting from failure to comply with the Code, ERISA and any
rulings, regulations, and requirements thereunder relating to the
administration of this contract.
9. If your contract is subject to the Employee Retirement Income Security
Act of 1974 ("ERISA"), your spouse will have certain rights, such as
the right to a Qualified Joint and Survivor Annuity Benefit ("QJSA") or
a Qualified Preretirement Survivor Annuity Benefit ("QPSA"). Your
spouse's rights under ERISA may limit your choice of payment plan,
beneficiary and cash surrenders as follows:
If you are married on the Income Date, your payment plan must be an
immediate annuity for your life with a survivor annuity for the life of
your spouse which is not less than 50 percent and not more than 100
percent of the amount of the annuity which is payable during the joint
lives of you and your spouse, and which is the amount of benefit which
can be purchased with Contract Value.
If you die before your Income Date and your spouse survives you, the
payment of the Death Benefit to your named Beneficiary is subject to
your spouse's right to receive an immediate annuity which is the
actuarial equivalent of one-half the portion of your Contract Value.
Your spouse must consent to your choice of a form of benefit other than
the QJSA/QPSA, beneficiaries who are not your spouse and cash
surrenders.
In order for your spouse to properly waive his or her QJSA/QPSA rights,
the Company must receive, in form satisfactory to the Company, your
spouse's written consent, or verification that you do not have a
spouse, or verification that your spouse cannot be located. Waiver of a
spouse's rights to QJSA/QPSA benefits and elections of an alternative
form of benefit cannot be made more than 90 days before your Income
Date. A waiver of a spouse's rights to QJSA/QPSA benefits may become
ineffective if made before you attain age 35, or if earlier, the date
you terminate your employment with your Employer. Waivers of a spouse's
rights hereunder with respect to a cash surrender must also be made not
more than 90 days before the date of distribution.
You may revoke an election requiring a waiver of your spouse's
QJSA/QPSA rights at any time during your lifetime and before the Income
Date. Your spouse, however, may not revoke his or her consent once
given.
4
<PAGE> 5
10. The following table is substituted for the One Life Minimum Table in
the Nonqualified contract.
ONE LIFE MINIMUM INCOME TABLE*
Monthly Payments for each $1,000 applied
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
Age of Age of
Payee Payee
Last Life Life Last Life Life
Birth- 10 Years 20 years Birth- 10 Years 20 years
day Certain Certain day Certain Certain
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
15 and
under $2.80 $2.80 50 $3.87 $3.79
16 2.82 2.81 51 3.94 3.85
17 2.83 2.83 52 4.00 3.90
18 2.84 2.84 53 4.08 3.96
19 2.86 2.85 54 4.15 4.02
20 2.87 2.87 55 4.23 4.08
21 2.89 2.88 56 4.31 4.15
22 2.90 2.90 57 4.40 4.21
23 2.92 2.92 58 4.50 4.28
24 2.94 2.93 59 4.59 4.35
25 2.96 2.95 60 4.70 4.42
26 2.98 2.97 61 4.81 4.50
27 3.00 2.99 62 4.93 4.57
28 3.02 3.01 63 5.05 4.64
29 3.04 3.03 64 5.18 4.71
30 3.07 3.06 65 5.32 4.79
31 3.09 3.08 66 5.46 4.86
32 3.12 3.11 67 5.61 4.92
33 3.14 3.13 68 5.77 4.99
34 3.17 3.16 69 5.93 5.05
35 3.20 3.19 70 6.10 5.11
36 3.23 3.22 71 6.28 5.17
37 3.27 3.25 72 6.46 5.22
38 3.30 3.28 73 6.65 5.27
39 3.34 3.31 74 6.84 5.31
40 3.38 3.35 75 7.03 5.35
41 3.42 3.39 76 7.23 5.38
42 3.46 3.42 77 7.43 5.41
43 3.50 3.46 78 7.62 5.43
44 3.55 3.50 79 7.81 5.45
45 3.59 3.55 80 8.00 5.47
46 3.64 3.59 81 8.18 5.48
47 3.70 3.64 82 8.35 5.49
48 3.75 3.69 83 8.51 5.50
49 3.81 3.74 84 8.66 5.50
85 and 8.80 5.51
over
---------------------------------------------------------------------------------------
</TABLE>
*Values are based on the "1983 Table a" adjusted for age last
birthday, with compound interest at 3% a year.
/s/ James N. Clark /s/ JOHN F. BARRETT
- -------------------------- ------------------------
Secretary President and
Chief Executive Officer
5
<PAGE> 1
Exhibit 5
<TABLE>
<CAPTION>
[TOUCHSTONE LOGO] FOR ASSISTANCE IN COMPLETING THIS APPLICATION, CALL 1-800-669-2796
TOUCHSTONE ADVISOR VARIABLE ANNUITY UNDERWRITTEN BY: WESTERN-SOUTHERN LIFE ASSURANCE COMPANY
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
OWNER o INDIVIDUAL o CORPORATION o TRUST
- ------------------------------------------------------------------------------------------------------------------------------------
Name - First Middle Last o Male Birth Date - -
o Female (m-d-y)
- ------------------------------------------------------------------------------------------------------------------------------------
Trust or Corporation Name Phone #
- ------------------------------------------------------------------------------------------------------------------------------------
Address - Street Social Security #
or T.I.N.
- ------------------------------------------------------------------------------------------------------------------------------------
City State Zip Relationship
to Annuitant
- ------------------------------------------------------------------------------------------------------------------------------------
o JOINT OWNER o CONTINGENT OWNER
- ------------------------------------------------------------------------------------------------------------------------------------
Name - First Middle Last o Male Birth Date - -
o Female (m-d-y)
- ------------------------------------------------------------------------------------------------------------------------------------
Address - Street Social Security #
or T.I.N.
- ------------------------------------------------------------------------------------------------------------------------------------
City State Zip Relationship
to Annuitant
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUITANT Complete if different from Owner
- ------------------------------------------------------------------------------------------------------------------------------------
Name - First Middle Last o Male Birth Date - -
o Female (m-d-y)
- ------------------------------------------------------------------------------------------------------------------------------------
Address - Street Social Security #
- ------------------------------------------------------------------------------------------------------------------------------------
City State Zip
- ------------------------------------------------------------------------------------------------------------------------------------
BENEFICIARY Full Name of Beneficiary(ies) and Relationship to Annuitant
- ------------------------------------------------------------------------------------------------------------------------------------
A. Primary Beneficiary(ies): (Additional Beneficiary form may be required for tax qualified plans.)
- ------------------------------------------------------------------------------------------------------------------------------------
Name Relationship Social Security Number Date of Birth
- - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Name Relationship Social Security Number Date of Birth
- - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Name Relationship Social Security Number Date of Birth
- - - -
- ------------------------------------------------------------------------------------------------------------------------------------
B. Contingent Beneficiary(ies): To receive benefits if none of the Primary Beneficiaries survive the Annuitant prior to the
Income Date.
- ------------------------------------------------------------------------------------------------------------------------------------
Name Relationship Social Security Number Date of Birth
- - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Name Relationship Social Security Number Date of Birth
- - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Name Relationship Social Security Number Date of Birth
- - - -
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
Initial Purchase Payment $ ___________________________ 1035 Exchange? o No o Yes (Please submit appropriate exchange forms)
- ------------------------------------------------------------------------------------------------------------------------------------
Will this contract replace any life insurance policy or annuity contract in this or any other company? o No o Yes
If yes, please list company name: ________________________________________________ Policy/Contract Number: _________________________
- ------------------------------------------------------------------------------------------------------------------------------------
PLAN TYPE (Check only one): o Non-Qualified o 457 o 401(k) o 403(b) o Pension/Profit Sharing o
Other:________________________
o Ordinary IRA o Roth IRA o SEP-IRA or o SIMPLE-IRA
o Contribution* o Contribution* o Employer Contribution*
o Transfer o Transfer from Roth IRA o Employee Salary Deferral
Contribution*
o Rollover o Conversion from Ordinary IRA
Note: If the plan is being funded by transfer, rollover or conversion in the year, or any year after, the owner attains age 70-1/2,
any minimum distribution requirement for the year of funding cannot be placed in this contract.
- ------------------------------------------------------------------------------------------------------------------------------------
If no date is selected, the Income Date on non-tax qualified plans and the
IRA tax qualified plan will be the later of the contract anniversary on or
following the annuitant's 80th birthday or 10 years after issue. On all other
tax-qualified plans with issue ages less than 70, the Income Date will be
Income Date (m-d-y): ___ - ___ - ___ determined by the plan document. Choosing an Income Date after age 70-1/2
does not defer required distribution from tax-qualified plans.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT ALLOCATION Must be whole percentage; Minimum of 5%; Must total 100%
- ------------------------------------------------------------------------------------------------------------------------------------
o Allocate my purchase payment(s) among the following investment options (MUST BE COMPLETED):
__________ % Emerging Growth ___________ % Value Plus _________ % Balanced ____________ % Bond
__________ % International Equity ___________ % Growth & Income _________ % Income Opportunity ____________ % Standby Income
o I prefer to use the following Touchstone Asset Allocation model:______________.
Model #
- ------------------------------------------------------------------------------------------------------------------------------------
DOLLAR COST AVERAGING $10,000 minimum Contract Value required; Must be whole percentage; Minimum of 5%; Must total 100%
- ------------------------------------------------------------------------------------------------------------------------------------
Please transfer $___________($1,000 minimum) from Standby Income.
Frequency: o Monthly o Quarterly Transfer period: o _____________ months/quarters (12-months or 4 quarters minimum)
o until source fund is depleted
o Dollar cost average among the following investment option(s): (If not completed, Touchstone will use Investment Allocation
indicated above.)
__________ % Emerging Growth ___________ % Value Plus _________ % Balanced ____________ % Bond
__________ % International Equity ___________ % Growth & Income _________ % Income Opportunity
o I prefer to use the following Asset Allocation model:_________________________.
Model #
- ------------------------------------------------------------------------------------------------------------------------------------
AUTOMATIC REBALANCING
- ------------------------------------------------------------------------------------------------------------------------------------
Do you wish to employ the automatic rebalancing feature? o No o Yes
Frequency: o Quarterly o Semi-Annually o Annually Note: If frequency is not selected, quarterly rebalancing will apply.
Model Number: ____________ Note: Automatic Rebalancing is not available if Dollar Cost Averaging has been selected.
- ------------------------------------------------------------------------------------------------------------------------------------
TELEPHONE ACCESS AUTHORIZATION
- ------------------------------------------------------------------------------------------------------------------------------------
o No o Yes If answered yes, I (We) authorize Western-Southern Life Assurance Company affiliates and the Variable Annuity
Administrator to honor telephone instructions from any person who can furnish proper identification to transfer values among the
different investment options. I (We) understand that I am (we are) responsible for losses due to unauthorized or fraudulent
telephone instructions to the extent and under the circumstances described in the variable annuity contract Prospectus under the
caption "TRANSFERS." I (We) further understand that the telephone privilege may be modified, suspended, or discontinued at any time
and without prior notice. THIS WILL NOT APPLY IF NEITHER BOX IS CHECKED.
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNATURES
- ------------------------------------------------------------------------------------------------------------------------------------
The statements and answers in this application are true and complete to the best of my (our) knowledge and belief. Under penalty of
perjury, I (we) certify that the social security number(s) and/or tax identification number(s) listed above is (are) correct. Any
person who, with intent to defraud or knowing that he/she is facilitating a fraud against an insurer, submits an application or
files a claim containing a false or deceptive statement is guilty of insurance fraud. I (WE) UNDERSTAND THAT ALL VALUES, WHEN BASED
ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO A DOLLAR AMOUNT. I ACKNOWLEDGE RECEIPT
OF A CURRENT VARIABLE ANNUITY PROSPECTUS.
o Please send me a copy of the Statement of Additional Information to the Prospectus.
- ------------------------------------------------------------------------------------------------------------------------------------
Signed At: City State Date(m-d-y): ___ - ___ - ___
- ------------------------------------------------------------------------------------------------------------------------------------
Owner Joint Owner:
X X
- ------------------------------------------------------------------------------------------------------------------------------------
Annuitant (Required only for tax qualified & 457 plans)
X
- ------------------------------------------------------------------------------------------------------------------------------------
REGISTERED REP/AGENT INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
By signing below, the Registered Rep/Agent certifies that:
a) The questions contained in this application were asked of the Owner and the answers duly recorded; that this application is
complete and true to the best of my knowledge and belief; and
b) I am NASD registered and state licensed for variable annuity contracts where this application is written; and
c) To the best of my knowledge and belief, this application o does o does not involve replacement of existing life insurance or
annuities.
- ------------------------------------------------------------------------------------------------------------------------------------
Registered Rep/Agent Registered Rep/Agent # __ __ __ __ __ __
X
- ------------------------------------------------------------------------------------------------------------------------------------
Print name of Registered Rep/Agent Dealer/General Agent
- ------------------------------------------------------------------------------------------------------------------------------------
Branch Office Street Address Business Phone
- ------------------------------------------------------------------------------------------------------------------------------------
City State Zip Code
- ------------------------------------------------------------------------------------------------------------------------------------
PLEASE MAKE CHECK PAYABLE TO WESTERN-SOUTHERN LIFE ASSURANCE COMPANY
Please Mail To: For Overnight Deliveries, Please Mail To:
TOUCHSTONE VARIABLE ANNUITY SERVICE CENTER TOUCHSTONE VARIABLE ANNUITY SERVICE CENTER
P.O. Box 2850 400 Broadway, Mail Station 74
Cincinnati, OH 45201-2850 Cincinnati, OH 45202
Phone # 1-800-669-2796
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
Exhibit 9
June 3, 1994
Western-Southern Life
Assurance Company
400 Broadway
Cincinnati, Ohio 45202
Ladies and Gentlemen:
This opinion is furnished in connection with the offering of variable
annuity contracts (the "Contracts") of Western-Southern Life Assurance Company
(the "Company") under a Registration Statement on Form N-4 to be filed herewith
by the Company and Western-Southern Life Assurance Company Separate Account 2
(the "Separate Account") under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended.
I have supervised the establishment of the Separate Account on June 1,
1994, by the Executive Committee of the Company, pursuant to Section 3907.15 of
the Ohio Revised Code. I have made such examination of the law and examined such
corporate records and such other documents as in my judgment are necessary and
appropriate to enable me to render the following opinions:
1. The Company has been duly organized under the laws of the State of Ohio
and is a validly existing stock life insurance corporation.
2. The Separate Account is duly created and validly existing as an
insurance corporation separate account under the laws of the State of
Ohio.
3. The portion of the assets to be held in the Separate Account equal to
the reserves and other liabilities under the Contracts is not chargeable
with liabilities arising out of any other business the Company may
conduct.
4. The offer and sale of the Contracts have been duly authorized by the
Company and, when issued as contemplated by the Registration Statement,
as it may from time to time be amended, the Contracts will constitute
legal, validly
<PAGE> 2
issued and binding obligations of the Company in accordance with their
terms.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ DONALD J. WUEBBLING
Donald J. Wuebbling
Vice President
and General Counsel
DJW:jam
S:\PTA\JBF0330
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Post-Effective Amendment No. 8
to the Registration Statement under the Securities Act of 1933 and Amendment
No. 9 to the Registration Statement under the Investment Company Act of 1940
of Western-Southern Life Assurance Company Separate Account 2 on Form N-4 (File
No. 33-79906) of our report, dated April 27, 1998, on our audits of the
financial statements of Western-Southern Life Assurance Company and our report,
dated January 16, 1998, on our audits of the financial statements of
Western-Southern Life Assurance Company Separate Account 2. We also consent to
the reference to our firm under the caption "Independent Accountants".
/s/ PricewaterhouseCoopers LLP
Cincinnati, Ohio
November 4, 1998
<PAGE> 1
POWER OF ATTORNEY
WHEREAS, WESTERN-SOUTHERN LIFE ASSURANCE COMPANY, an Ohio corporation
(the "Company"), proposes to file with the Securities and Exchange Commission on
or before November 4, 1998, pursuant to the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder, and the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder,
post-effective amendments to the registration statement of the Company's
Separate Account 1 and post-effective amendments to the registration statement
of the Company's Separate Account 2 (collectively, the "Post-Effective
Amendments"); and
WHEREAS, the undersigned is a Director of the Company;
NOW, THEREFORE, the undersigned hereby constitutes and appoints John F.
Barrett and Edward S. Heenan, and each of them individually, his attorney in
fact, for him and in his name, place and stead and in his office and capacity
with the Company, to execute and file the Post-Effective Amendments, including
the prospectuses, statements of additional information and exhibits included
therein, and thereafter to execute and file any additional amended
post-effective amendment or amendments, amended prospectus or prospectuses,
amended statement or statements of additional information, amended exhibits or
any supplements to any of the foregoing (collectively, the "Amended Documents"),
hereby giving and granting to said attorneys full power and authority to do and
perform each and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
This authority hereby granted is limited to the execution and delivery
of the Post-Effective Amendments and Amended Documents and included documents
and, unless earlier revoked by me or expressly extended by me in writing, shall
remain in force and effective only until such Post-Effective Amendments shall
have become effective under the federal securities laws and in any event no
later than January 31, 1999.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
28th day of October, 1998.
/s/ John F. Barrett
---------------------------------
John F. Barrett
<PAGE> 2
POWER OF ATTORNEY
WHEREAS, WESTERN-SOUTHERN LIFE ASSURANCE COMPANY, an Ohio corporation
(the "Company"), proposes to file with the Securities and Exchange Commission on
or before November 4, 1998, pursuant to the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder, and the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder,
post-effective amendments to the registration statement of the Company's
Separate Account 1 and post-effective amendments to the registration statement
of the Company's Separate Account 2 (collectively, the "Post-Effective
Amendments"); and
WHEREAS, the undersigned is a Director of the Company;
NOW, THEREFORE, the undersigned hereby constitutes and appoints John F.
Barrett and Edward S. Heenan, and each of them individually, his attorney in
fact, for him and in his name, place and stead and in his office and capacity
with the Company, to execute and file the Post-Effective Amendments, including
the prospectuses, statements of additional information and exhibits included
therein, and thereafter to execute and file any additional amended
post-effective amendment or amendments, amended prospectus or prospectuses,
amended statement or statements of additional information, amended exhibits or
any supplements to any of the foregoing (collectively, the "Amended Documents"),
hereby giving and granting to said attorneys full power and authority to do and
perform each and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
This authority hereby granted is limited to the execution and delivery
of the Post-Effective Amendments and Amended Documents and included documents
and, unless earlier revoked by me or expressly extended by me in writing, shall
remain in force and effective only until such Post-Effective Amendments shall
have become effective under the federal securities laws and in any event no
later than January 31, 1999.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
29th day of October, 1998.
/s/ Donald A. Bliss
---------------------------------
Donald A. Bliss
<PAGE> 3
POWER OF ATTORNEY
WHEREAS, WESTERN-SOUTHERN LIFE ASSURANCE COMPANY, an Ohio corporation
(the "Company"), proposes to file with the Securities and Exchange Commission on
or before November 4, 1998, pursuant to the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder, and the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder,
post-effective amendments to the registration statement of the Company's
Separate Account 1 and post-effective amendments to the registration statement
of the Company's Separate Account 2 (collectively, the "Post-Effective
Amendments"); and
WHEREAS, the undersigned is a Director of the Company;
NOW, THEREFORE, the undersigned hereby constitutes and appoints John F.
Barrett and Edward S. Heenan, and each of them individually, his attorney in
fact, for him and in his name, place and stead and in his office and capacity
with the Company, to execute and file the Post-Effective Amendments, including
the prospectuses, statements of additional information and exhibits included
therein, and thereafter to execute and file any additional amended
post-effective amendment or amendments, amended prospectus or prospectuses,
amended statement or statements of additional information, amended exhibits or
any supplements to any of the foregoing (collectively, the "Amended Documents"),
hereby giving and granting to said attorneys full power and authority to do and
perform each and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
This authority hereby granted is limited to the execution and delivery
of the Post-Effective Amendments and Amended Documents and included documents
and, unless earlier revoked by me or expressly extended by me in writing, shall
remain in force and effective only until such Post-Effective Amendments shall
have become effective under the federal securities laws and in any event no
later than January 31, 1999.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
28th day of October, 1998.
/s/ James N. Clark
---------------------------------
James N. Clark
<PAGE> 4
POWER OF ATTORNEY
WHEREAS, WESTERN-SOUTHERN LIFE ASSURANCE COMPANY, an Ohio corporation
(the "Company"), proposes to file with the Securities and Exchange Commission on
or before November 4, 1998, pursuant to the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder, and the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder,
post-effective amendments to the registration statement of the Company's
Separate Account 1 and post-effective amendments to the registration statement
of the Company's Separate Account 2 (collectively, the "Post-Effective
Amendments"); and
WHEREAS, the undersigned is a Director of the Company;
NOW, THEREFORE, the undersigned hereby constitutes and appoints John F.
Barrett and Edward S. Heenan, and each of them individually, his attorney in
fact, for him and in his name, place and stead and in his office and capacity
with the Company, to execute and file the Post-Effective Amendments, including
the prospectuses, statements of additional information and exhibits included
therein, and thereafter to execute and file any additional amended
post-effective amendment or amendments, amended prospectus or prospectuses,
amended statement or statements of additional information, amended exhibits or
any supplements to any of the foregoing (collectively, the "Amended Documents"),
hereby giving and granting to said attorneys full power and authority to do and
perform each and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
This authority hereby granted is limited to the execution and delivery
of the Post-Effective Amendments and Amended Documents and included documents
and, unless earlier revoked by me or expressly extended by me in writing, shall
remain in force and effective only until such Post-Effective Amendments shall
have become effective under the federal securities laws and in any event no
later than January 31, 1999.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
28th day of October, 1998.
/s/ Dr. Lawrence C. Hawkins
---------------------------------
Dr. Lawrence C. Hawkins
<PAGE> 5
POWER OF ATTORNEY
WHEREAS, WESTERN-SOUTHERN LIFE ASSURANCE COMPANY, an Ohio corporation
(the "Company"), proposes to file with the Securities and Exchange Commission on
or before November 4, 1998, pursuant to the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder, and the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder,
post-effective amendments to the registration statement of the Company's
Separate Account 1 and post-effective amendments to the registration statement
of the Company's Separate Account 2 (collectively, the "Post-Effective
Amendments"); and
WHEREAS, the undersigned is a Director of the Company;
NOW, THEREFORE, the undersigned hereby constitutes and appoints John F.
Barrett and Edward S. Heenan, and each of them individually, his attorney in
fact, for him and in his name, place and stead and in his office and capacity
with the Company, to execute and file the Post-Effective Amendments, including
the prospectuses, statements of additional information and exhibits included
therein, and thereafter to execute and file any additional amended
post-effective amendment or amendments, amended prospectus or prospectuses,
amended statement or statements of additional information, amended exhibits or
any supplements to any of the foregoing (collectively, the "Amended Documents"),
hereby giving and granting to said attorneys full power and authority to do and
perform each and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
This authority hereby granted is limited to the execution and delivery
of the Post-Effective Amendments and Amended Documents and included documents
and, unless earlier revoked by me or expressly extended by me in writing, shall
remain in force and effective only until such Post-Effective Amendments shall
have become effective under the federal securities laws and in any event no
later than January 31, 1999.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
28th day of October, 1998.
/s/ Dr. J. Harold Kotte
---------------------------------
Dr. J. Harold Kotte
<PAGE> 6
POWER OF ATTORNEY
WHEREAS, WESTERN-SOUTHERN LIFE ASSURANCE COMPANY, an Ohio corporation
(the "Company"), proposes to file with the Securities and Exchange Commission on
or before November 4, 1998, pursuant to the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder, and the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder,
post-effective amendments to the registration statement of the Company's
Separate Account 1 and post-effective amendments to the registration statement
of the Company's Separate Account 2 (collectively, the "Post-Effective
Amendments"); and
WHEREAS, the undersigned is a Director of the Company;
NOW, THEREFORE, the undersigned hereby constitutes and appoints John F.
Barrett and Edward S. Heenan, and each of them individually, his attorney in
fact, for him and in his name, place and stead and in his office and capacity
with the Company, to execute and file the Post-Effective Amendments, including
the prospectuses, statements of additional information and exhibits included
therein, and thereafter to execute and file any additional amended
post-effective amendment or amendments, amended prospectus or prospectuses,
amended statement or statements of additional information, amended exhibits or
any supplements to any of the foregoing (collectively, the "Amended Documents"),
hereby giving and granting to said attorneys full power and authority to do and
perform each and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
This authority hereby granted is limited to the execution and delivery
of the Post-Effective Amendments and Amended Documents and included documents
and, unless earlier revoked by me or expressly extended by me in writing, shall
remain in force and effective only until such Post-Effective Amendments shall
have become effective under the federal securities laws and in any event no
later than January 31, 1999.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
28th day of October, 1998.
/s/ Carl A. Kroch
---------------------------------
Carl A. Kroch
<PAGE> 7
POWER OF ATTORNEY
WHEREAS, WESTERN-SOUTHERN LIFE ASSURANCE COMPANY, an Ohio corporation
(the "Company"), proposes to file with the Securities and Exchange Commission on
or before November 4, 1998, pursuant to the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder, and the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder,
post-effective amendments to the registration statement of the Company's
Separate Account 1 and post-effective amendments to the registration statement
of the Company's Separate Account 2 (collectively, the "Post-Effective
Amendments"); and
WHEREAS, the undersigned is a Director of the Company;
NOW, THEREFORE, the undersigned hereby constitutes and appoints John F.
Barrett and Edward S. Heenan, and each of them individually, his attorney in
fact, for him and in his name, place and stead and in his office and capacity
with the Company, to execute and file the Post-Effective Amendments, including
the prospectuses, statements of additional information and exhibits included
therein, and thereafter to execute and file any additional amended
post-effective amendment or amendments, amended prospectus or prospectuses,
amended statement or statements of additional information, amended exhibits or
any supplements to any of the foregoing (collectively, the "Amended Documents"),
hereby giving and granting to said attorneys full power and authority to do and
perform each and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
This authority hereby granted is limited to the execution and delivery
of the Post-Effective Amendments and Amended Documents and included documents
and, unless earlier revoked by me or expressly extended by me in writing, shall
remain in force and effective only until such Post-Effective Amendments shall
have become effective under the federal securities laws and in any event no
later than January 31, 1999.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
29th day of October, 1998.
/s/ Eugene P. Ruehlmann
---------------------------------
Eugene P. Ruehlmann
<PAGE> 8
POWER OF ATTORNEY
WHEREAS, WESTERN-SOUTHERN LIFE ASSURANCE COMPANY, an Ohio corporation
(the "Company"), proposes to file with the Securities and Exchange Commission on
or before November 4, 1998, pursuant to the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder, and the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder,
post-effective amendments to the registration statement of the Company's
Separate Account 1 and post-effective amendments to the registration statement
of the Company's Separate Account 2 (collectively, the "Post-Effective
Amendments"); and
WHEREAS, the undersigned is a Director of the Company;
NOW, THEREFORE, the undersigned hereby constitutes and appoints John F.
Barrett and Edward S. Heenan, and each of them individually, his attorney in
fact, for him and in his name, place and stead and in his office and capacity
with the Company, to execute and file the Post-Effective Amendments, including
the prospectuses, statements of additional information and exhibits included
therein, and thereafter to execute and file any additional amended
post-effective amendment or amendments, amended prospectus or prospectuses,
amended statement or statements of additional information, amended exhibits or
any supplements to any of the foregoing (collectively, the "Amended Documents"),
hereby giving and granting to said attorneys full power and authority to do and
perform each and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
This authority hereby granted is limited to the execution and delivery
of the Post-Effective Amendments and Amended Documents and included documents
and, unless earlier revoked by me or expressly extended by me in writing, shall
remain in force and effective only until such Post-Effective Amendments shall
have become effective under the federal securities laws and in any event no
later than January 31, 1999.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
28th day of October, 1998.
/s/ Thomas L. Williams
---------------------------------
Thomas L. Williams
<PAGE> 9
POWER OF ATTORNEY
WHEREAS, WESTERN-SOUTHERN LIFE ASSURANCE COMPANY, an Ohio corporation
(the "Company"), proposes to file with the Securities and Exchange Commission on
or before November 4, 1998, pursuant to the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder, and the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder,
post-effective amendments to the registration statement of the Company's
Separate Account 1 and post-effective amendments to the registration statement
of the Company's Separate Account 2 (collectively, the "Post-Effective
Amendments"); and
WHEREAS, the undersigned is a Director of the Company;
NOW, THEREFORE, the undersigned hereby constitutes and appoints John F.
Barrett and Edward S. Heenan, and each of them individually, his attorney in
fact, for him and in his name, place and stead and in his office and capacity
with the Company, to execute and file the Post-Effective Amendments, including
the prospectuses, statements of additional information and exhibits included
therein, and thereafter to execute and file any additional amended
post-effective amendment or amendments, amended prospectus or prospectuses,
amended statement or statements of additional information, amended exhibits or
any supplements to any of the foregoing (collectively, the "Amended Documents"),
hereby giving and granting to said attorneys full power and authority to do and
perform each and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
This authority hereby granted is limited to the execution and delivery
of the Post-Effective Amendments and Amended Documents and included documents
and, unless earlier revoked by me or expressly extended by me in writing, shall
remain in force and effective only until such Post-Effective Amendments shall
have become effective under the federal securities laws and in any event no
later than January 31, 1999.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
28th day of October, 1998.
/s/ William J. Williams
---------------------------------
William J. Williams
