<PAGE> 1
- --------------------------------------------------------------------------------
To Our Variable Life Policyholders:
- --------------------------------------------------------------------------------
August 22, 1997
We are pleased to send you the attached semi-annual report, detailing separate
account information pertaining to our variable life insurance policies. In
addition, the semi-annual report for the Market Street Fund, Inc. is attached.
As the owner of a variable life insurance policy, you allocate your premiums to
various investments of your choosing. If applicable, you'll be receiving under
separate cover, additional semi-annual reports pertaining to the Funds you've
selected within your variable life insurance policy offered through
Providentmutual Life and Annuity Company of America.
Your variable life insurance policy is unique in that it combines the protection
and tax advantages of traditional life insurance with the growth potential of
equity investments. Our parent company, Provident Mutual Life Insurance Company,
is a leader in the variable products marketplace offering a wide variety of life
insurance policies and annuity contracts designed to help you meet your
financial planning goals, including retirement planning, college funding, and
estate planning.
By selecting Providentmutual Life and Annuity Company of America, you have
chosen a product backed by a company with a reputation for strength, stability,
and sound management. The roots of our parent company, Provident Mutual Life
Insurance Company, can be traced back to 1717, giving us the distinction of
serving America's life insurance needs longer than any other company.
We appreciate your business. If you have questions about your policy, or would
like more information about our products and services, please contact your local
agent or our Service Center at 1-800-688-5177.
Sincerely,
/s/ Robert W. Kloss
Robert W. Kloss
President
<PAGE> 2
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Assets and Liabilities, June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in the Market Street
Fund, Inc., at market value:
Growth Portfolio................. $925,111
Money Market Portfolio........... $1,280,779
Bond Portfolio................... $245,198
Managed Portfolio................ $157,204
Aggressive Growth Portfolio...... $698,476
International Portfolio.......... $825,261
Dividends receivable............... 5,953
Receivable from Providentmutual
Life and Annuity Company of
America.......................... 91,818
-------- ---------- -------- -------- -------- --------
NET ASSETS......................... $925,111 $1,378,550 $245,198 $157,204 $698,476 $825,261
======== ========== ======== ======== ======== ========
Held for the benefit of
policyholders.................... $882,009 $1,352,585 $214,092 $119,128 $660,629 $787,811
Attributable to Providentmutual
Life and Annuity Company of
America.......................... 43,102 25,965 31,106 38,076 37,847 37,450
-------- ---------- -------- -------- -------- --------
$925,111 $1,378,550 $245,198 $157,204 $698,476 $825,261
======== ========== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
2
<PAGE> 3
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Assets and Liabilities, June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
EQUITY- FIDELITY HIGH FIDELITY ASSET FIDELITY
INCOME GROWTH INCOME OVERSEAS MANAGER INDEX 500
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in the Variable
Insurance Products Fund, at
market value:
Equity-Income Portfolio.......... $3,384,876
Growth Portfolio................. $3,765,449
High Income Portfolio............ $740,846
Overseas Portfolio............... $1,131,964
Investment in the Variable
Insurance Products Fund II, at
market value:
Asset Manager Portfolio.......... $1,004,125
Index 500 Portfolio.............. $2,861,605
---------- ---------- -------- ---------- ---------- ----------
NET ASSETS......................... $3,384,876 $3,765,449 $740,846 $1,131,964 $1,004,125 $2,861,605
========== ========== ======== ========== ========== ==========
Held for the benefit of
policyholders.................... $3,342,278 $3,721,222 $704,310 $1,094,343 $ 966,711 $2,813,310
Attributable to Providentmutual
Life and Annuity Company of
America.......................... 42,598 44,227 36,536 37,621 37,414 48,295
---------- ---------- -------- ---------- ---------- ----------
$3,384,876 $3,765,449 $740,846 $1,131,964 $1,004,125 $2,861,605
========== ========== ======== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements
3
<PAGE> 4
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Assets and Liabilities, June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY NEUBERGER NEUBERGER NEUBERGER
INVESTMENT FIDELITY & BERMAN & BERMAN & BERMAN LIMITED
GRADE BOND CONTRAFUND BALANCED GROWTH MATURITY BOND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in the Variable Insurance
Products Fund II, at market value:
Investment Grade Bond Portfolio......... $246,898
Contrafund Portfolio.................... $1,051,398
Investment in the Neuberger & Berman
Advisers Management Trust, at market
value:
Balanced Portfolio...................... $279,379
Growth Portfolio........................ $773,983
Limited Maturity Bond Portfolio......... $292,984
-------- ---------- -------- -------- --------
NET ASSETS................................ $246,898 $1,051,398 $279,379 $773,983 $292,984
======== ========== ======== ======== ========
Held for the benefit of policyholders..... $216,348 $1,020,048 $242,979 $732,546 $263,477
Attributable to Providentmutual Life and
Annuity Company of America.............. 30,550 31,350 36,400 41,437 29,507
-------- ---------- -------- -------- --------
$246,898 $1,051,398 $279,379 $773,983 $292,984
======== ========== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
4
<PAGE> 5
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Assets and Liabilities, June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN VAN ECK VAN ECK
CENTURY VP VAN ECK WORLDWIDE WORLDWIDE ALGER AMERICAN
CAPITAL WORLDWIDE HARD EMERGING SMALL
APPRECIATION BOND ASSETS MARKETS CAPITALIZATION
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in American Century Variable
Portfolios, Inc., at market value:
American Century VP Capital Appreciation
Portfolio............................... $510,840
Investment in the Van Eck Worldwide
Insurance Trust, at market value:
Van Eck Worldwide Bond Portfolio.......... $211,397
Van Eck Worldwide Hard Assets Portfolio... $241,192
Van Eck Worldwide Emerging Markets
Portfolio............................... $358,421
Investment in the Alger American Fund, at
market value:
Alger American Small Capitalization
Portfolio............................... $838,868
-------- -------- -------- -------- --------
NET ASSETS.................................. $510,840 $211,397 $241,192 $358,421 $838,868
======== ======== ======== ======== ========
Held for the benefit of policyholders....... $479,933 $181,865 $205,285 $323,351 $815,614
Attributable to Providentmutual Life and
Annuity Company of America................ 30,907 29,532 35,907 35,070 23,254
-------- -------- -------- -------- --------
$510,840 $211,397 $241,192 $358,421 $838,868
======== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
5
<PAGE> 6
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Operations for the Six Months Ended June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends.......................... $ 6,845 $ 23,148 $4,675 $ 1,530 $ 4,527 $ 3,778
------- ------- ------ ------- ------- -------
EXPENSES
Mortality and expense risks........ 2,154 3,234 474 245 1,663 1,919
------- ------- ------ ------- ------- -------
Net investment income.............. 4,691 19,914 4,201 1,285 2,864 1,859
------- ------- ------ ------- ------- -------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Realized gain distributions
reinvested....................... 64,240 637 898 29,576
Net realized gain from redemption
of investment shares............. 2,486 502 1,140 4,358 2,455
------- ------- ------ ------- ------- -------
Net realized gain on investments... 66,726 502 1,777 5,256 32,031
------- ------- ------ ------- ------- -------
Net unrealized appreciation
(depreciation) of investments:
Beginning of period.............. 53,902 2,198 6,860 42,267 24,229
End of period.................... 73,433 2,063 15,757 98,694 82,026
------- ------- ------ ------- ------- -------
Net unrealized appreciation
(depreciation) of investments
during the period................ 19,531 (135) 8,897 56,427 57,797
------- ------- ------ ------- ------- -------
Net realized and unrealized gains
on investments................... 86,257 367 10,674 61,683 89,828
------- ------- ------ ------- ------- -------
Net increase in net assets
resulting from operations........ $ 90,948 $ 19,914 $4,568 $ 11,959 $ 64,547 $91,687
======= ======= ====== ======= ======= =======
</TABLE>
See accompanying notes to financial statements
6
<PAGE> 7
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Operations for the Six Months Ended June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
EQUITY- FIDELITY HIGH FIDELITY ASSET FIDELITY
INCOME GROWTH INCOME OVERSEAS MANAGER INDEX 500
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends.......................... $ 37,203 $ 16,922 $ 29,332 $ 10,489 $ 27,124 $ 18,761
-------- ----------- ----------- ------- ---------- ----------
EXPENSES
Mortality and expense risks........ 8,159 9,092 1,518 2,328 2,585 6,497
-------- ----------- ----------- ------- ---------- ----------
Net investment income.............. 29,044 7,830 27,814 8,161 24,539 12,264
-------- ----------- ----------- ------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Realized gain distributions
reinvested....................... 187,050 75,747 3,625 41,640 68,039 38,068
Net realized gain from redemption
of investment shares............. 26,949 7,172 6,297 3,850 2,005 11,012
-------- ----------- ----------- ------- ---------- ----------
Net realized gain on investments... 213,999 82,919 9,922 45,490 70,044 49,080
-------- ----------- ----------- ------- ---------- ----------
Net unrealized appreciation
(depreciation) of investments:
Beginning of period.............. 140,032 120,385 17,486 44,125 42,785 130,599
End of period.................... 306,637 426,644 20,082 117,041 33,448 465,429
-------- ----------- ----------- ------- ---------- ----------
Net unrealized appreciation
(depreciation) of investments
during the period................ 166,605 306,259 2,596 72,916 (9,337) 334,830
-------- ----------- ----------- ------- ---------- ----------
Net realized and unrealized gain on
investments...................... 380,604 389,178 12,518 118,406 60,707 383,910
-------- ----------- ----------- ------- ---------- ----------
Net increase in net assets
resulting from operations........ $409,648 $397,008 $ 40,332 $126,567 $ 85,246 $396,174
======== =========== =========== ======= ========== ==========
</TABLE>
See accompanying notes to financial statements
7
<PAGE> 8
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Operations for the Six Months Ended June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY NEUBERGER NEUBERGER NEUBERGER
INVESTMENT FIDELITY & BERMAN & BERMAN & BERMAN LIMITED
GRADE BOND CONTRAFUND BALANCED GROWTH MATURITY BOND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends................................... $ 10,062 $ 2,887 $ 3,239 $3,868
-------- ------- ------- ------- --------
EXPENSES
Mortality and expense risks................. 527 1,678 579 $ 1,942 279
-------- ------- ------- ------- --------
Net investment income (loss)................ 9,535 1,209 2,660 (1,942) 3,589
-------- ------- ------- ------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Realized gain distributions reinvested...... 7,630 8,314 50,230
Net realized gain (loss) from redemption of
investment shares......................... 779 4,939 371 1,707 (128)
-------- ------- ------- ------- --------
Net realized gain (loss) on investments..... 779 12,569 8,685 51,937 (128)
-------- ------- ------- ------- --------
Net unrealized appreciation (depreciation)
of investments:
Beginning of period....................... 5,863 15,525 1,403 11,488 208
End of period............................. 983 81,335 12,496 62,450 921
-------- ------- ------- ------- --------
Net unrealized appreciation (depreciation)
of investments during the period.......... (4,880) 65,810 11,093 50,962 713
-------- ------- ------- ------- --------
Net realized and unrealized gain (loss) on
investments............................... (4,101) 78,379 19,778 102,899 585
-------- ------- ------- ------- --------
Net increase in net assets resulting from
operations................................ $ 5,434 $ 79,588 $22,438 $ 100,957 $4,174
======== ======= ======= ======= ========
</TABLE>
See accompanying notes to financial statements
8
<PAGE> 9
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Operations for the Six Months Ended June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN VAN ECK
CENTURY VP VAN ECK VAN ECK WORLDWIDE ALGER AMERICAN
CAPITAL WORLDWIDE WORLDWIDE EMERGING SMALL
APPRECIATION BOND HARD ASSETS MARKETS CAPITALIZATION
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends.................................. $ 3,474 $ 4,182 $ 403
------- -------- ------- ------- -------
EXPENSES
Mortality and expense risks................ $ 1,210 404 520 569 $ 1,787
------- -------- ------- ------- -------
Net investment income (loss)............... (1,210) 3,070 3,662 (166) (1,787)
------- -------- ------- ------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Realized gain distributions reinvested..... 9,129 3,087 29,556
Net realized gain (loss) from redemption of
investment shares........................ (10,045) 211 2,905 423 (1,580)
------- -------- ------- ------- -------
Net realized gain (loss) on investments.... (916) 211 5,992 423 27,976
------- -------- ------- ------- -------
Net unrealized appreciation (depreciation)
of investments:
Beginning of period...................... (33,973) 2,328 12,095 4,779 (4,261)
End of period............................ (36,283) (971) 2,924 42,515 (2,774)
------- -------- ------- ------- -------
Net unrealized appreciation (depreciation)
of investments during the period......... (2,310) (3,299) (9,171) 37,736 1,487
------- -------- ------- ------- -------
Net realized and unrealized gain (loss) on
investments.............................. (3,226) (3,088) (3,179) 38,159 29,463
------- -------- ------- ------- -------
Net increase (decrease) in net assets
resulting from operations................ $ (4,436) $ (18) $ 483 $ 37,993 $ 27,676
======= ======== ======= ======= =======
</TABLE>
See accompanying notes to financial statements
9
<PAGE> 10
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Changes in Net Assets for the Six Months Ended June 30, 1997
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income.............. $ 4,691 $ 19,914 $ 4,201 $ 1,285 $ 2,864 $ 1,859
Net realized gain on investments... 66,726 502 1,777 5,256 32,031
Net unrealized appreciation
(depreciation) of investments
during the period................ 19,531 (135) 8,897 56,427 57,797
-------- ---------- -------- -------- -------- --------
Net increase in net assets from
operations....................... 90,948 19,914 4,568 11,959 64,547 91,687
-------- ---------- -------- -------- -------- --------
FROM VARIABLE LIFE POLICY
TRANSACTIONS
Policyholders' net premiums........ 233,478 4,304,570 71,806 26,345 168,799 208,407
Cost of insurance and
administrative charges........... (50,246) (142,659) (11,198) (5,288) (44,229) (40,201)
Surrenders and forfeitures......... (1,070) (1,430) (264) (217) (1,404) (1,053)
Net withdrawals due to policy
loans............................ (201) (2,001) (1,129) (32) (4,800) (130)
Transfers between investment
portfolios....................... 98,094 (3,328,181) 49,051 44,158 42,947 116,283
-------- ---------- -------- -------- -------- --------
Net increase in net assets derived
from policy transactions......... 280,055 830,299 108,266 64,966 161,313 283,306
-------- ---------- -------- -------- -------- --------
Total increase in net assets....... 371,003 850,213 112,834 76,925 225,860 374,993
NET ASSETS
Beginning of period.............. 554,108 528,337 132,364 80,279 472,616 450,268
-------- ---------- -------- -------- -------- --------
End of period.................... $925,111 $1,378,550 $245,198 $157,204 $698,476 $ 825,261
======== ========== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
10
<PAGE> 11
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Changes in Net Assets for the Six Months Ended June 30, 1997
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
EQUITY- FIDELITY HIGH FIDELITY ASSET FIDELITY
INCOME GROWTH INCOME OVERSEAS MANAGER INDEX 500
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income.............. $ 29,044 $ 7,830 $ 27,814 $ 8,161 $ 24,539 $ 12,264
Net realized gain on investments... 213,999 82,919 9,922 45,490 70,044 49,080
Net unrealized appreciation
(depreciation) of investments
during the period................ 166,605 306,259 2,596 72,916 (9,337) 334,830
---------- ---------- -------- ---------- ---------- ----------
Net increase in net assets from
operations....................... 409,648 397,008 40,332 126,567 85,246 396,174
---------- ---------- -------- ---------- ---------- ----------
FROM VARIABLE LIFE POLICY
TRANSACTIONS
Policyholders' net premiums........ 703,431 888,629 164,409 276,887 116,687 815,047
Cost of insurance and
administrative charges........... (151,109) (222,710) (30,545) (55,855) (27,796) (170,742)
Surrenders and forfeitures......... (8,436) (35,230) (489) (3,198) (908) (7,424)
Net repayments (withdrawals) due to
policy loans..................... (11,367) (10,432) 44 (5,604) (8,676) (14,989)
Transfers between investment
portfolios....................... 471,498 394,242 192,602 228,237 98,495 364,005
---------- ---------- -------- ---------- ---------- ----------
Net increase in net assets derived
from policy transactions......... 1,004,017 1,014,499 326,021 440,467 177,802 985,897
---------- ---------- -------- ---------- ---------- ----------
Total increase in net assets....... 1,413,665 1,411,507 366,353 567,034 263,048 1,382,071
NET ASSETS
Beginning of period.............. 1,971,211 2,353,942 374,493 564,930 741,077 1,479,534
---------- ---------- -------- ---------- ---------- ----------
End of period.................... $3,384,876 $3,765,449 $740,846 $1,131,964 $1,004,125 $2,861,605
========== ========== ======== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements
11
<PAGE> 12
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Changes in Net Assets for the Six Months Ended June 30, 1997
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEUBERGER
FIDELITY NEUBERGER NEUBERGER & BERMAN
INVESTMENT FIDELITY & BERMAN & BERMAN LIMITED
GRADE BOND CONTRAFUND BALANCED GROWTH MATURITY BOND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss).................. $ 9,535 $ 1,209 $ 2,660 $ (1,942) $ 3,589
Net realized gain (loss) on investments....... 779 12,569 8,685 51,937 (128)
Net unrealized appreciation (depreciation) of
investments during the period............... (4,880) 65,810 11,093 50,962 713
-------- ---------- -------- -------- --------
Net increase in net assets from operations.... 5,434 79,588 22,438 100,957 4,174
-------- ---------- -------- -------- --------
FROM VARIABLE LIFE POLICY TRANSACTIONS
Policyholders' net premiums................... 75,972 339,445 41,175 139,326 45,715
Cost of insurance and administrative
charges..................................... (12,838) (41,770) (15,539) (47,427) (5,730)
Surrenders and forfeitures.................... (2,259) (239) (471) (1,902) (68)
Net withdrawals due to policy loans........... (1,107) (9,025) (31) (347)
Transfers between investment portfolios....... 26,175 414,444 66,909 44,685 199,152
-------- ---------- -------- -------- --------
Net increase in net assets derived from policy
transactions................................ 85,943 702,855 92,043 134,335 239,069
-------- ---------- -------- -------- --------
Total increase in net assets.................. 91,377 782,443 114,481 235,292 243,243
NET ASSETS
Beginning of period......................... 155,521 268,955 164,898 538,691 49,741
-------- ---------- -------- -------- --------
End of period............................... $246,898 $1,051,398 $279,379 $773,983 $ 292,984
======== ========== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
12
<PAGE> 13
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Changes in Net Assets for the Six Months Ended June 30, 1997
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN VAN ECK
CENTURY VP VAN ECK VAN ECK WORLDWIDE ALGER AMERICAN
CAPITAL WORLDWIDE WORLDWIDE EMERGING SMALL
APPRECIATION BOND HARD ASSETS MARKETS CAPITALIZATION
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)................... $ (1,210) $ 3,070 $ 3,662 $ (166) $ (1,787)
Net realized gain (loss) on investments........ (916) 211 5,992 423 27,976
Net unrealized appreciation (depreciation) of
investments during the period................ (2,310) (3,299) (9,171) 37,736 1,487
-------- -------- -------- -------- --------
Net increase (decrease) in net assets from
operations................................... (4,436) (18) 483 37,993 27,676
-------- -------- -------- -------- --------
FROM VARIABLE LIFE POLICY TRANSACTIONS
Policyholders' net premiums.................... 155,510 53,191 64,668 131,855 304,949
Cost of insurance and administrative charges... (39,071) (9,493) (13,272) (14,970) (49,175)
Surrenders and forfeitures..................... (2,165) (97) (244) (104) (736)
Net withdrawals due to policy loans............ (22) (1,081) (224) (222) (502)
Transfers between investment portfolios........ 51,412 70,340 40,235 125,603 189,571
-------- -------- -------- -------- --------
Net increase in net assets derived from policy
transactions................................. 165,664 112,860 91,163 242,162 444,107
-------- -------- -------- -------- --------
Total increase in net assets................... 161,228 112,842 91,646 280,155 471,783
NET ASSETS
Beginning of period.......................... 349,612 98,555 149,546 78,266 367,085
-------- -------- -------- -------- --------
End of period................................ $510,840 $211,397 $ 241,192 $358,421 $838,868
======== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
13
<PAGE> 14
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Changes in Net Assets for the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)....... $ 5,792 $ 13,514 $ 4,151 $ 1,675 $ (117) $ (233)
Net realized gain on investments... 11,690 741 2,241 18,507 7,356
Net unrealized appreciation
(depreciation) of investments
during the year.................. 43,181 (1,721) 1,929 35,927 18,684
-------- ----------- -------- ------- -------- --------
Net increase in net assets from
operations....................... 60,663 13,514 3,171 5,845 54,317 25,807
-------- ----------- -------- ------- -------- --------
FROM VARIABLE LIFE POLICY
TRANSACTIONS
Policyholders' net premiums........ 200,633 3,426,014 62,154 30,006 253,610 181,285
Cost of insurance and
administrative charges........... (50,683) (139,681) (13,600) (6,124) (58,803) (40,512)
Surrenders and forfeitures......... (2,824) (1,748) (458) (269) (3,944) (2,321)
Net withdrawals due to policy
loans............................ (5,832) (10,177) (685) (4,282)
Transfers between investment
portfolios....................... 200,857 (3,043,148) 31,590 12,196 77,113 191,839
-------- ----------- -------- ------- -------- --------
Net increase in net assets derived
from policy transactions......... 342,151 231,260 79,686 35,809 267,291 326,009
-------- ----------- -------- ------- -------- --------
Total increase in net assets....... 402,814 244,774 82,857 41,654 321,608 351,816
NET ASSETS
Beginning of year................ 151,294 283,563 49,507 38,625 151,008 98,452
-------- ----------- -------- ------- -------- --------
End of year...................... $554,108 $ 528,337 $132,364 $ 80,279 $472,616 $ 450,268
======== =========== ======== ======= ======== ========
</TABLE>
See accompanying notes to financial statements
14
<PAGE> 15
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Changes in Net Assets for the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
EQUITY- FIDELITY HIGH FIDELITY ASSET FIDELITY
INCOME GROWTH INCOME OVERSEAS MANAGER INDEX 500
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)............. $ (5,726) $ (7,298) $ 12,358 $ 530 $ 2,657 $ (1,245)
Net realized gain on investments......... 35,257 65,394 4,014 6,419 8,363 24,266
Net unrealized appreciation of
investments during the year............ 113,039 110,349 12,968 37,316 37,446 113,980
---------- ---------- -------- -------- -------- ----------
Net increase in net assets from
operations............................. 142,570 168,445 29,340 44,265 48,466 137,001
---------- ---------- -------- -------- -------- ----------
FROM VARIABLE LIFE POLICY TRANSACTIONS
Policyholders' net premiums.............. 1,064,311 1,228,372 182,867 303,606 504,956 682,499
Cost of insurance and administrative
charges................................ (172,223) (277,081) (33,017) (55,071) (41,734) (140,878)
Surrenders and forfeitures............... (10,460) (15,689) (1,416) (1,888) (141) (4,843)
Net withdrawals due to policy loans...... (8,344) (9,629) (352) (538) (107) (4,994)
Transfers between investment
portfolios............................. 489,521 624,149 51,297 61,872 157,808 590,621
---------- ---------- -------- -------- -------- ----------
Net increase in net assets derived from
policy transactions.................... 1,362,805 1,550,122 199,379 307,981 620,782 1,122,405
---------- ---------- -------- -------- -------- ----------
Total increase in net assets............. 1,505,375 1,718,567 228,719 352,246 669,248 1,259,406
NET ASSETS
Beginning of year...................... 465,836 635,375 145,774 212,684 71,829 220,128
---------- ---------- -------- -------- -------- ----------
End of year............................ $1,971,211 $2,353,942 $374,493 $564,930 $741,077 $1,479,534
========== ========== ======== ======== ======== ==========
</TABLE>
See accompanying notes to financial statements
15
<PAGE> 16
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Changes in Net Assets for the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY NEUBERGER NEUBERGER NEUBERGER
INVESTMENT FIDELITY & BERMAN & BERMAN & BERMAN LIMITED
GRADE BOND CONTRAFUND BALANCED GROWTH MATURITY BOND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)................... $ 2,947 $ (337) $ 1,346 $ (1,950) $ 2,866
Net realized gain (loss) on investments........ 596 1,095 10,759 25,368 (74)
Net unrealized appreciation (depreciation) of
investments during the year.................. 1,288 15,525 (4,144) 5,800 (986)
-------- -------- -------- -------- -------
Net increase in net assets from operations..... 4,831 16,283 7,961 29,218 1,806
-------- -------- -------- -------- -------
FROM VARIABLE LIFE POLICY TRANSACTIONS
Policyholders' net premiums.................... 89,577 111,330 65,215 249,358 15,412
Cost of insurance and administrative charges... (17,945) (11,937) (14,582) (59,022) (3,100)
Surrenders and forfeitures..................... (765) (265) (619) (8)
Net withdrawals due to policy loans............ (102) (27)
Transfers between investment portfolios........ 19,502 128,279 35,692 105,607 3,279
-------- -------- -------- -------- -------
Net increase in net assets derived from policy
transactions................................. 90,267 227,672 86,060 295,297 15,583
-------- -------- -------- -------- -------
Capital contribution from Providentmutual Life
and Annuity Company of America............... 25,000
-------- -------- -------- -------- -------
Total increase in net assets................... 95,098 268,955 94,021 324,515 17,389
NET ASSETS
Beginning of year............................ 60,423 -- 70,877 214,176 32,352
-------- -------- -------- -------- -------
End of year.................................. $ 155,521 $268,955 $164,898 $538,691 $ 49,741
======== ======== ======== ======== =======
</TABLE>
See accompanying notes to financial statements
16
<PAGE> 17
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Statements of Changes in Net Assets for the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VAN ECK VAN ECK GOLD VAN ECK ALGER AMERICAN
WORLDWIDE AND NATURAL EMERGING SMALL
TCI GROWTH BOND RESOURCES MARKETS CAPITALIZATION
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss).................... $ (1,480) $ 1,547 $ 225 $ 67 $ (374)
Net realized gain (loss) on investments......... 27,549 218 3,368 254 (72)
Net unrealized appreciation (depreciation) of
investments during the year................... (41,402) 404 6,724 4,779 (4,261)
-------- ------- -------- ------- --------
Net increase (decrease) in net assets from
operations.................................... (15,333) 2,169 10,317 5,100 (4,707)
-------- ------- -------- ------- --------
FROM VARIABLE LIFE POLICY TRANSACTIONS
Policyholders' net premiums..................... 186,453 40,692 80,930 34,459 235,120
Cost of insurance and administrative charges.... (51,208) (8,055) (12,112) (5,698) (15,164)
Surrenders and forfeitures...................... (2,139) (163) (78) (57)
Net withdrawals due to policy loans............. (1,766)
Transfers between investment portfolios......... 53,108 8,407 32,292 19,405 126,893
-------- ------- -------- ------- --------
Net increase in net assets derived from policy
transactions.................................. 184,448 40,881 101,032 48,166 346,792
-------- ------- -------- ------- --------
Capital contribution from Providentmutual Life
and Annuity Company of America................ 25,000 25,000
-------- ------- -------- ------- --------
Total increase in net assets.................... 169,115 43,050 111,349 78,266 367,085
NET ASSETS
Beginning of year............................. 180,497 55,505 38,197 -- --
-------- ------- -------- ------- --------
End of year................................... $349,612 $ 98,555 $149,546 $ 78,266 $367,085
======== ======= ======== ======= ========
</TABLE>
See accompanying notes to financial statements
17
<PAGE> 18
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Providentmutual Variable Life Separate Account (Separate Account) was
established by Providentmutual Life and Annuity Company of America
(Providentmutual) under the provisions of Delaware law and commenced operations
on February 1, 1995. Providentmutual is a wholly-owned subsidiary of Provident
Mutual Life Insurance Company. The Separate Account is an investment account to
which assets are allocated to support the benefits payable under flexible
premium adjustable variable life insurance policies (the Policies).
The Policies are distributed principally through personal producing general
agents and brokers.
Providentmutual has structured the Separate Account as a unit investment
trust registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended. The Separate Account is comprised of
twenty-two subaccounts: the Growth, Money Market, Bond, Managed, Aggressive
Growth and International Subaccounts invest in the corresponding portfolios of
the Market Street Fund, Inc.; the Fidelity Equity-Income, Fidelity Growth,
Fidelity High Income and Fidelity Overseas Subaccounts invest in the
corresponding portfolios of the Variable Insurance Products Fund; the Fidelity
Asset Manager, Fidelity Index 500, Fidelity Investment Grade Bond and Fidelity
Contrafund Subaccounts invest in the corresponding portfolios of the Variable
Insurance Products Fund II; the Neuberger & Berman Balanced, Neuberger & Berman
Growth and Neuberger & Berman Limited Maturity Bond Subaccounts invest in the
corresponding portfolios of the Neuberger & Berman Advisers Management Trust;
the American Century VP Capital Appreciation (formerly the TCI Growth)
Subaccount, invests in the corresponding portfolio of the American Century
Variable Portfolios, Inc. (formerly, TCI Portfolios, Inc.); the Van Eck
Worldwide Bond, Van Eck Worldwide Hard Assets (formerly Van Eck Gold and Natural
Resources) and Van Eck Worldwide Emerging Markets (formerly Van Eck Emerging
Markets) Subaccounts invest in the corresponding portfolios of the Van Eck
Worldwide Insurance Trust; and the Alger American Small Capitalization
Subaccount invests in the corresponding portfolio of the Alger American Fund.
Net premiums from in-force Policies are allocated to the Subaccounts in
accordance with policyholder instructions and are recorded as variable life
policy transactions in the statements of changes in net assets. Such amounts are
used to provide money to pay benefits under the Policies (Note 4). The Separate
Account's assets are the property of Providentmutual.
Transfers between investment portfolios include transfers between the
Subaccounts and the Guaranteed Account (not shown), which is part of
Providentmutual's General Account.
18
<PAGE> 19
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed
by the Separate Account in the financial statements.
Investment Valuation:
Investment shares are valued at the net asset values of the respective
Portfolios. Transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date.
Realized Gains and Losses:
Realized gains and losses on sales of investment shares are determined
using the specific identification basis for financial reporting and income tax
purposes.
Federal Income Taxes:
The operations of the Separate Account are included in the Federal income
tax return of Providentmutual. Under the provisions of the Policies,
Providentmutual has the right to charge the Separate Account for Federal income
tax attributable to the Separate Account. No charge is currently being made
against the Separate Account for such tax.
Estimates:
The preparation of the accompanying financial statements required
management to make estimates and assumptions that affect the reported values of
assets and liabilities and the reported amounts from operations and policy
transactions during the period. Actual results could differ from those
estimates.
19
<PAGE> 20
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS
At June 30, 1997, the investments of the respective Subaccounts are as
follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Market Street Fund, Inc.:
Growth Portfolio....................................... 51,653 $851,678 $925,111
Money Market Portfolio................................. 1,280,779 $1,280,779 $1,280,779
Bond Portfolio......................................... 23,154 $243,135 $245,198
Managed Portfolio...................................... 9,856 $141,447 $157,204
Aggressive Growth Portfolio............................ 34,189 $599,782 $698,476
International Portfolio................................ 58,405 $743,235 $825,261
Variable Insurance Products Fund:
Equity-Income Portfolio................................ 153,440 $3,078,239 $3,384,876
Growth Portfolio....................................... 110,101 $3,338,805 $3,765,449
High Income Portfolio.................................. 59,601 $720,764 $740,846
Overseas Portfolio..................................... 56,485 $1,014,923 $1,131,964
Variable Insurance Products Fund II:
Asset Manager Portfolio................................ 60,489 $970,677 $1,004,125
Index 500 Portfolio.................................... 27,616 $2,396,176 $2,861,605
Investment Grade Bond Portfolio........................ 20,853 $245,915 $246,898
Contrafund Portfolio................................... 58,639 $970,063 $1,051,398
Neuberger & Berman Advisers Management Trust:
Balanced Portfolio..................................... 16,850 $266,883 $279,379
Growth Portfolio....................................... 27,901 $711,533 $773,983
Limited Maturity Bond Portfolio........................ 21,511 $292,063 $292,984
American Century Variable Portfolios, Inc.:
American Century VP Capital Appreciation Portfolio..... 52,882 $547,123 $510,840
Van Eck Worldwide Insurance Trust:
Van Eck Worldwide Bond Portfolio....................... 19,868 $212,368 $211,397
Van Eck Worldwide Hard Assets Portfolio................ 15,131 $238,268 $241,192
Van Eck Worldwide Emerging Markets Portfolio........... 23,441 $315,906 $358,421
Alger American Fund:
Alger American Small Capitalization Portfolio.......... 21,221 $841,642 $838,868
</TABLE>
20
<PAGE> 21
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
During the six months ended June 30, 1997 and the year ended December 31,
1996, transactions in investment shares were as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET STREET FUND, INC.
------------------------------------------------------------------------------------------------------------------
MONEY MARKET
GROWTH PORTFOLIO PORTFOLIO BOND PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased................................. 17,616 22,000 3,221,700 2,343,055 10,977 8,375
Shares received from reinvestment of:
Dividends...................................... 431 464 17,195 15,339 451 433
Capital gain distributions..................... 4,035 464
-------- -------- ----------- ----------- -------- -------
Total shares acquired............................ 22,082 22,928 3,238,895 2,358,394 11,428 8,808
Total shares redeemed............................ (1,043) (1,562) (2,411,266) (2,171,067) (679) (903)
-------- -------- ----------- ----------- -------- -------
Net increase in shares owned..................... 21,039 21,366 827,629 187,327 10,749 7,905
Shares owned, beginning of period................ 30,614 9,248 453,150 265,823 12,405 4,500
-------- -------- ----------- ----------- -------- -------
Shares owned, end of period...................... 51,653 30,614 1,280,779 453,150 23,154 12,405
======== ======== =========== =========== ======== =======
Cost of shares acquired.......................... $ 366,515 $ 380,965 $ 3,238,895 $ 2,358,394 $ 119,581 $ 93,373
======== ======== =========== =========== ======== =======
Cost of shares redeemed.......................... $ 15,043 $ 21,332 $ 2,411,266 $ 2,171,067 $ 6,612 $ 8,795
======== ======== =========== =========== ======== =======
</TABLE>
21
<PAGE> 22
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET STREET FUND, INC.
------------------------------------------------------------------------------------------------------------------
MANAGED PORTFOLIO AGGRESSIVE GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased....................................... 4,599 2,833 10,227 17,269 23,872 26,818
Shares received from reinvestment of:
Dividends............................................ 107 131 247 105 306 95
Capital gain distributions........................... 44 117 49 1,071 2,397 390
------- ------- -------- -------- -------- --------
Total shares acquired.................................. 4,750 3,081 10,523 18,445 26,575 27,303
Total shares redeemed.................................. (362) (335) (1,853) (1,615) (1,747) (1,383)
------- ------- -------- -------- -------- --------
Net increase in shares owned........................... 4,388 2,746 8,670 16,830 24,828 25,920
Shares owned, beginning of period...................... 5,468 2,722 25,519 8,689 33,577 7,657
------- ------- -------- -------- -------- --------
Shares owned, end of period............................ 9,856 5,468 34,189 25,519 58,405 33,577
======= ======= ======== ======== ======== ========
Cost of shares acquired................................ $ 72,365 $ 43,739 $ 200,057 $ 310,897 $ 337,712 $ 348,283
======= ======= ======== ======== ======== ========
Cost of shares redeemed................................ $ 4,337 $ 4,014 $ 30,624 $ 25,216 $ 20,516 $ 15,164
======= ======= ======== ======== ======== ========
</TABLE>
22
<PAGE> 23
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND
------------------------------------------------------------------------------------------------------------------
EQUITY-INCOME PORTFOLIO GROWTH PORTFOLIO HIGH INCOME PORTFOLIO OVERSEAS PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares purchased.......... 55,608 72,214 33,406 53,882 33,125 17,623 24,753 18,466
Shares received from
reinvestment of:
Dividends............... 1,879 42 536 73 2,488 1,213 604 157
Capital gain
distributions......... 9,447 1,207 2,400 1,829 307 237 2,403 171
---------- ---------- ---------- ---------- -------- -------- -------- --------
Total shares acquired..... 66,934 73,463 36,342 55,784 35,920 19,073 27,760 18,794
Total shares redeemed..... (7,227) (3,904) (1,833) (1,951) (6,230) (1,259) (1,261) (1,282)
---------- ---------- ---------- ---------- -------- -------- -------- --------
Net increase in shares
owned................... 59,707 69,559 34,509 53,833 29,690 17,814 26,499 17,512
Shares owned, beginning of
period.................. 93,733 24,174 75,592 21,759 29,911 12,097 29,986 12,474
---------- ---------- ---------- ---------- -------- -------- -------- --------
Shares owned, end of
period.................. 153,440 93,733 110,101 75,592 59,601 29,911 56,485 29,986
========== ========== ========== ========== ======== ======== ======== ========
Cost of shares acquired... $ 1,376,325 $ 1,456,815 $ 1,154,710 $ 1,652,672 $ 435,809 $ 229,442 $ 514,166 $ 334,188
========== ========== ========== ========== ======== ======== ======== ========
Cost of shares redeemed... $ 129,265 $ 64,479 $ 49,462 $ 44,454 $ 72,052 $ 13,691 $ 20,048 $ 19,258
========== ========== ========== ========== ======== ======== ======== ========
</TABLE>
23
<PAGE> 24
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND II
------------------------------------------------------------------------------------------------------------------
ASSET MANAGER INDEX 500 CONTRAFUND
PORTFOLIO PORTFOLIO INVESTMENT PORTFOLIO
GRADE BOND
PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares purchased............ 13,050 40,738 10,878 15,023 8,963 8,553 43,680 17,029
Shares received from
reinvestment of:
Dividends................. 1,757 303 204 35 866 288 175
Capital gain
distributions........... 4,410 251 414 91 465
-------- -------- ---------- ---------- -------- -------- -------- --------
Total shares acquired....... 19,217 41,292 11,496 15,149 9,829 8,841 44,320 17,029
Total shares redeemed....... (2,501) (2,068) (480) (1,457) (1,682) (977) (1,922) (788)
-------- -------- ---------- ---------- -------- -------- -------- --------
Net increase in shares
owned..................... 16,716 39,224 11,016 13,692 8,147 7,864 42,398 16,241
Shares owned, beginning of
period.................... 43,773 4,549 16,600 2,908 12,706 4,842 16,241
-------- -------- ---------- ---------- -------- -------- -------- --------
Shares owned, end of
period.................... 60,489 43,773 27,616 16,600 20,853 12,706 58,639 16,241
======== ======== ========== ========== ======== ======== ======== ========
Cost of shares acquired..... $310,462 $660,528 $1,081,775 $1,241,314 $115,166 $104,740 $744,543 $265,037
======== ======== ========== ========== ======== ======== ======== ========
Cost of shares redeemed..... $ 38,077 $ 28,726 $ 34,534 $ 95,888 $ 18,909 $ 10,930 $ 27,910 $ 11,607
======== ======== ========== ========== ======== ======== ======== ========
</TABLE>
24
<PAGE> 25
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST AMERICAN
CENTURY VARIABLE
PORTFOLIOS, INC.
---------------------------------------------------------------------------------------------------------------------------
BALANCED PORTFOLIO GROWTH PORTFOLIO LIMITED MATURITY AMERICAN
BOND PORTFOLIO CENTURY VP
CAPITAL
APPRECIATION PORTFOLIO
---------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996 1997 1996
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares purchased............. 7,441 6,369 6,185 12,912 17,885 1,441 22,118 20,034
Shares received from
reinvestment of:
Dividends................... 207 119 4 290 219
Capital gain
distributions............. 531 665 1,968 855 1,032 2,166
-------- -------- -------- -------- -------- ------- -------- --------
Total shares acquired........ 8,179 7,153 8,153 13,771 18,175 1,660 23,150 22,200
Total shares redeemed........ (1,687) (841) (1,148) (1,157) (204) (319) (4,410) (3,025)
-------- -------- -------- -------- -------- ------- -------- --------
Net increase in shares
owned....................... 6,492 6,312 7,005 12,614 17,971 1,341 18,740 19,175
Shares owned, beginning of
period...................... 10,358 4,046 20,896 8,282 3,540 2,199 34,142 14,967
-------- -------- -------- -------- -------- ------- -------- --------
Shares owned, end of
period...................... 16,850 10,358 27,901 20,896 21,511 3,540 52,882 34,142
======== ======== ======== ======== ======== ======= ======== ========
Cost of shares acquired...... $ 129,899 $ 110,480 $ 212,859 $ 342,933 $ 245,421 $ 22,893 $ 217,509 $ 239,141
======== ======== ======== ======== ======== ======= ======== ========
Cost of shares redeemed...... $ 26,511 $ 12,315 $ 28,529 $ 24,218 $ 2,891 $ 4,518 $ 53,971 $ 28,624
======== ======== ======== ======== ======== ======= ======== ========
</TABLE>
25
<PAGE> 26
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALGER AMERICAN
VAN ECK WORLDWIDE INSURANCE TRUST FUND
- ---------------------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN
VAN ECK WORLDWIDE SMALL
VAN ECK WORLDWIDE VAN ECK WORLDWIDE EMERGING MARKETS CAPITALIZATION
BOND PORTFOLIO HARD ASSETS PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares purchased.............. 11,836 4,129 6,465 6,863 17,300 6,457 13,534 9,023
Shares received from
reinvestment of:
Dividends.................... 329 174 263 35 30 11
Capital gain distributions... 194 35 790
-------- ------- -------- -------- -------- ------- -------- --------
Total shares acquired......... 12,165 4,303 6,922 6,933 17,330 6,468 14,324 9,023
Total shares redeemed......... (1,176) (406) (735) (638) (155) (202) (2,076) (50)
-------- ------- -------- -------- -------- ------- -------- --------
Net increase in shares
owned........................ 10,989 3,897 6,187 6,295 17,175 6,266 12,248 8,973
Shares owned, beginning of
period....................... 8,879 4,982 8,944 2,649 6,266 8,973
-------- ------- -------- -------- -------- ------- -------- --------
Shares owned, end of period... 19,868 8,879 15,131 8,944 23,441 6,266 21,221 8,973
======== ======= ======== ======== ======== ======= ======== ========
Cost of shares acquired....... $ 128,254 $ 46,831 $ 109,577 $ 112,234 $ 244,121 $ 75,703 $ 554,655 $ 373,537
======== ======= ======== ======== ======== ======= ======== ========
Cost of shares redeemed....... $ 12,113 $ 4,185 $ 8,760 $ 7,609 $ 1,702 $ 2,216 $ 84,359 $ 2,191
======== ======= ======== ======== ======== ======= ======== ========
</TABLE>
26
<PAGE> 27
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
4. RELATED PARTY TRANSACTIONS
Providentmutual makes certain deductions from premiums before amounts are
allocated to each Subaccount selected by the policyholder. The deductions may
include (1) state premium taxes, (2) sales charges and (3) Federal tax charges.
Premiums adjusted for these deductions are recorded as net premiums in the
statement of changes in net assets. See original policy documents for specific
charges assessed.
In addition to the aforementioned charges, a daily charge will be deducted
from the Separate Account for mortality and expense risks assumed by
Providentmutual. The charge is deducted at an annual rate of 0.65% of the
average daily net assets of the Separate Account. This charge may be increased,
but in no event will it be greater than 0.90% of the average daily net assets of
the Separate Account.
The Separate Account is also charged monthly by Providentmutual for the
cost of insurance protection. The amount of the charge is computed based upon
the amount of insurance provided during the year and the insured's attained age.
Additional monthly deductions may be made for (1) administrative charges, (2)
minimum death benefit charges, (3) first year policy charges and (4)
supplementary charges. See original policy documents for additional monthly
charges. These charges are included in the statements of changes in net assets.
During any given policy year, the first four transfers by a policyholder of
amounts in the Subaccounts are free of charge. A fee of $25 is assessed for each
additional transfer. No transfer fees were incurred during the six months ended
June 30, 1997 or the year ended December 31, 1996.
The Policies provide for an initial free-look period. If a policy is
cancelled within certain time constraints, the policyholder will receive a
refund equal to the policy account value plus certain deductions made under the
policy. Where state law requires a minimum refund equal to gross premiums paid,
the refund will instead equal the gross premiums paid on the policy and will not
reflect investment experience.
If a policy is surrendered or lapses within the first ten policy years, a
contingent deferred sales load charge and/or contingent deferred administrative
charge are assessed. A deferred sales charge will be imposed if a policy is
surrendered or lapses at any time within ten years after the effective date of
an increase in face amount. A portion of the deferred sales charge will be
deducted if the related increment of face amount is decreased within ten years
after such increase took effect. These charges are recorded as administrative
charges in the statements of changes in net assets.
27
<PAGE> 28
- --------------------------------------------------------------------------------
The Providentmutual Variable Life Separate Account
of Providentmutual Life and Annuity Company of America
Supplementary Information (unaudited)
- --------------------------------------------------------------------------------
The table below shows the net rates of return for the Subaccounts. The net
rate of return is applicable to net assets for a variable life policy whose
policy year commences with the beginning date of the year shown and is not based
on the average net assets in the Subaccounts during the year.
The performance for each Subaccount is shown as the net rate of return
which reflects the Subaccounts' investment income and capital gains and losses,
realized or unrealized, less charges against the Subaccounts' assets for the
year shown.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY
GROWTH MARKET BOND MANAGED
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PLACA OPTIONSVL
For the six months ended:
June 30,1997........................ 12.92% 2.24% 2.13% 11.11%
For the year ended:
December 31, 1996................... 18.79% 4.51% 2.28% 11.22%
December 31, 1995................... 23.66%(3) 4.28%(4) 13.42%(5) 14.12%(6)
PLACA SURVIVOR OPTIONSVL
For the six months ended:
June 30,1997........................ 6.53%(13) 2.00%(14) 0.61%(13) --
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY NEUBERGER
FIDELITY INVESTMENT FIDELITY & BERMAN
INDEX 500 GRADE BOND CONTRAFUND BALANCED
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PLACA OPTIONSVL
For the six months ended:
June 30,1997.................. 19.82% 2.48% 11.27% 10.91%
For the year ended:
December 31, 1996............. 22.02% 2.51% 9.53%(1) 6.19%
December 31, 1995............. 25.79%(5) 12.27%(10) -- 8.29%(11)
PLACA SURVIVOR OPTIONSVL
For the six months ended:
June 30,1997.................. 9.79%(13) 2.91%(19) 8.24%(20) 5.98%(16)
</TABLE>
The net rate of return was calculated from the date policyholder funds were
first allocated to the Subaccount referenced above as follows: (1) May 23, 1996,
(2) June 20, 1996, (3) March 2, 1995, (4) February 15, 1995, (5) March 16, 1995,
(6) April 24, 1995, (7) March 7, 1995, (8) March 6, 1995, (9) March 24, 1995,
(10) March 21, 1995, (11) June 7, 1995, (12) April 25, 1995, (13) February 14,
1997, (14) January 18, 1997, (15) May 24, 1997, (16) February 2, 1997, (17)
April 9, 1997, (18) May 20, 1997, (19) April 15, 1997 and (20) March 5, 1997.
28
<PAGE> 29
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
AGGRESSIVE EQUITY- FIDELITY HIGH FIDELITY ASSET
GROWTH INTERNATIONAL INCOME GROWTH INCOME OVERSEAS MANAGER
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
11.23% 13.49% 16.02% 13.46% 7.36% 16.06% 10.85%
20.13% 10.17% 13.54% 13.96% 13.29% 12.48% 13.86%
7.98%(3) 12.31%(7) 27.36%(3) 31.48%(3) 14.92%(8) 11.29%(7) 14.60%(9)
4.33%(15) 12.23%(13) 11.33%(16) 7.59%(16) 7.65%(17) 13.07%(13) 3.54%(18)
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEUBERGER AMERICAN VAN ECK ALGER
NEUBERGER & BERMAN CENTURY VP VAN ECK VAN ECK WORLDWIDE AMERICAN
& BERMAN LIMITED CAPITAL WORLDWIDE WORLDWIDE EMERGING SMALL
GROWTH MATURITY BOND APPRECIATION BOND HARD ASSETS MARKETS CAPITALIZATION
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
16.80% 2.63% (3.77)% (1.19)% (0.62)% 22.48% 0.32%
8.43% 3.62% (4.95)% 1.86% 17.27% 8.61%(2) (10.72)%(1)
22.72%(3) 7.06%(5) 28.43%(3) 7.35%(5) 5.60%(12) -- --
5.78%(13) 1.63%(13) 0.56%(20) 2.46%(19) -- 9.07%(20) 0.06%(13)
</TABLE>
29
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<PAGE> 33
<TABLE>
<S> <C>
SEMI-ANNUAL REPORT
June 30, 1997
----------------------------------------------
[LOGO] PROVIDENTMUTUAL LIFE
AND ANNUITY COMPANY
Variable Life Insurance policies issued by OF AMERICA, A STOCK LIFE
Providentmutual are distributed by 1717 INSURANCE COMPANY
Capital Management Company, Wilmington, PROVIDENTMUTUAL VARIABLE
DE, a registered broker-dealer. LIFE SEPARATE ACCOUNT
MARKET STREET FUND, INC.
This Report has been prepared for VARIABLE LIFE INSURANCE POLICIES
policyholders. It is not authorized for other ----------------------------------------------
distribution unless preceded or
accompanied by an effective prospectus.
Form 16072 6.97
---------------
BULK RATE
U.S. POSTAGE
PAID
WILMINGTON, DE
PERMIT NO. 1387
---------------
</TABLE>
