<PAGE> 1
File No. 33-81784
811-8642
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 6 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 4 /X/
---------------------------------
(Exact Name of Registrant)
OHIO NATIONAL VARIABLE ACCOUNT D
(Name of Depositor)
THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Address of Depositor's Principal Executive Offices)
One Financial Way
Cincinnati, Ohio 45242
(Depositor's Telephone Number)
(513) 794-6100
---------------------------------
(Name and Address of Agent for Service)
Ronald L. Benedict, Corporate Vice President, Counsel
and Secretary
The Ohio National Life Insurance Company
P.O. Box 237
Cincinnati, Ohio 45201
Notice to:
W. Randolph Thompson, Esq.
Of Counsel
Jones & Blouch L.L.P.
Suite 405 West
1025 Thomas Jefferson Street, N.W.
Washington, D.C. 20007
---------------------------------
Approximate Date of Proposed Public Offering: As soon after the effective date
of this amendment as is practicable.
It is proposed that this filing will become effective (check appropriate space):
immediately upon filing pursuant to paragraph (b)
---
X on May 1, 1998, pursuant to paragraph (b)(1)(ix)
---
60 days after filing pursuant to paragraph (a)(i)
---
on (date) pursuant to paragraph (a)(i) 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.
<PAGE> 2
OHIO NATIONAL VARIABLE ACCOUNT D
<TABLE>
<CAPTION>
N-4 Item Caption in Prospectus
- -------- ---------------------
<S> <C>
1 Cover Page
2 Glossary of Special Terms
3 Not applicable
4 Accumulation Unit Values
5 The Ohio National Companies
6 Deductions and Expenses
7 Description of the Contracts
8 Annuity Benefits
9 Death Benefit
10 Accumulation
11 Surrender and Withdrawal
12 Federal Tax Status
13 Not applicable
14 Table of Contents
Caption in Statement of Additional Information
----------------------------------------------
15 Cover Page
16 Table of Contents
17 Not applicable
18 Custodian
Independent Certified Public Accountants
19 See Prospectus (Distribution of the Contracts
20 Underwriter
21 Calculation of Money Market Subaccount Yield
Total Return
22 See Prospectus (Annuity Benefits)
23 Financial Statements
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Caption in Part C
-----------------
<S> <C>
24 Financial Statements and Exhibits
25 Directors and Officers of the Depositor
26 Persons Controlled by or Under Common Control
with the Depositor or Registrant
27 Number of Contractowners
28 Indemnification
29 Principal Underwriter
30 Location of Accounts and Records
31 Not applicable
32 Undertakings and Representations
</TABLE>
<PAGE> 4
PART A
PROSPECTUS
<PAGE> 5
PROSPECTUS
OHIO NATIONAL VARIABLE ACCOUNT D
OF
THE OHIO NATIONAL LIFE INSURANCE COMPANY
ONE FINANCIAL WAY
CINCINNATI, OHIO 45242
TELEPHONE (513) 794-6514
FOR
TAX QUALIFIED GROUP VARIABLE ANNUITY CONTRACTS
This prospectus offers a multiple funded group variable annuity contract,
designed for tax qualified retirement plans, that provides for the accumulation
of values and the payment of annuity benefits on a variable and/or fixed basis.
Unless specifically stated otherwise, only provisions relating to the variable
portion of the contracts are described in this prospectus. The fixed portion
("Fixed Accumulation Account") is briefly described in an appendix to this
prospectus.
Variable annuities are designed to provide lifetime annuity payments which will
vary with the investment results of the investment vehicle chosen. The contract
value and the value of each participant's variable accumulation account will
vary with the investment performance of Ohio National Fund, Inc. (the "Fund"),
and the amount of each participant's annuity payments will vary with the Fund's
investment performance subsequent to the commencement of annuity payments. There
can be no assurance that account values prior to the purchase of an annuity or
the aggregate amount of annuity payments received after such date will equal or
exceed the contributions made therefor.
The contracts offered by this prospectus are designed for (1) annuity purchase
plans adopted by public school systems and certain tax-exempt organizations
described in Section 501(c)(3) of the Internal Revenue Code (the "Code"),
qualifying for tax-deferred treatment pursuant to Section 403(b) of the Code,
(2) other employee pension or profit-sharing trusts or plans qualifying for
tax-deferred treatment under Section 401(a), 401(k) or 403(a) of the Code, and
(3) state and municipal deferred compensation plans.
The minimum contribution amount is $25 per participant. Additional contributions
may be made at any time, but not more often than biweekly. Generally, maximum
contributions equal the maximums permitted under the plan.
Contributions are allocated to one or more (but not more than 10 variable)
subaccounts of Ohio National Variable Account D ("VAD") in such portion as the
contract owner may choose. VAD is a separate account established by The
Ohio National Life Insurance Company ("Ohio National Life"). The assets of VAD
are invested in shares of the Fund, a mutual fund having 13 portfolios in which
the contracts' assets may be invested: Equity Portfolio, Money Market
Portfolio, Bond Portfolio, Omni Portfolio, International Portfolio, Capital
Appreciation Portfolio, Small Cap Portfolio, Global Contrarian Portfolio,
Aggressive Growth Portfolio, Core Growth Portfolio, Growth & Income Portfolio,
S&P 500 Index Portfolio and Social Awareness Portfolio. (See the accompanying
prospectus of the Fund which contains information about other portfolios that
are not available for the contracts offered herein).
All or part of the contract value may be withdrawn for purposes of paying
benefits provided by the plan at no charge. Amounts withdrawn for any other
reason may be subject to federal income tax penalties, and a withdrawal charge
may be assessed up to 7% of the amount withdrawn (up to a maximum of 9% of all
contributions). Exercise of contract rights may be subject to the terms of the
qualified employee trust or annuity plan under which a contract is purchased.
This prospectus contains no information concerning such trusts or plans.
THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE. IT SETS FORTH THE
INFORMATION ABOUT VAD AND THE VARIABLE ANNUITY CONTRACTS OFFERED BY THIS
PROSPECTUS THAT YOU SHOULD KNOW BEFORE INVESTING. ADDITIONAL INFORMATION ABOUT
VAD HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN A STATEMENT OF
ADDITIONAL INFORMATION DATED MAY 1, 1998. THE STATEMENT OF ADDITIONAL
INFORMATION IS INCORPORATED HEREIN BY REFERENCE AND IS AVAILABLE UPON REQUEST
AND WITHOUT CHARGE BY WRITING OR CALLING OHIO NATIONAL LIFE AT THE ABOVE
ADDRESS. THE TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL INFORMATION IS ON
PAGE 2.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS SHOULD BE ACCOMPANIED BY THE CURRENT PROSPECTUS OF OHIO NATIONAL
FUND, INC.
MAY 1, 1998
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<S> <C>
Fee Table................................................3
Accumulation Unit Values.................................5
Financial Statements..................................5
The Ohio National Companies..............................6
Ohio National Life....................................6
Ohio National Variable Account D......................6
Ohio National Fund, Inc...............................6
Distribution of the Contracts............................7
Deductions and Expenses..................................7
Withdrawal Charge.....................................7
Deduction For Administrative Expenses.................8
Deduction For Risk Undertakings.......................8
Limitations On Deductions.............................8
Transfer Fee..........................................8
Deduction For State Premium Tax.......................8
Fund Expenses.........................................8
Description of the Contracts.............................9
Accumulation..........................................9
Annuity Benefits.....................................11
Other Contract Provisions............................13
Performance Data.....................................13
Federal Tax Status......................................14
Appendix................................................16
Fixed Accumulation Account...........................16
</TABLE>
- ----------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
Custodian
Independent Certified Public Accountants
Underwriter
Calculation of Money Market Subaccount Yield
Transfer Limitations
Total Return
The Year 2000 Issue
Financial Statements for VAD and Ohio National Life
GLOSSARY OF SPECIAL TERMS
Accumulation Unit -A unit of measure used to determine the contract values.
Annuitant -Any natural person who is to receive or is receiving annuity payments
and upon whose continuation of life annuity payments with life
contingencies depend.
Annuity Payments -Periodic payments made to an annuitant pursuant to an annuity
purchased with contract values.
Annuity Purchase -The application of a participant's account values to purchase
an annuity under the contract's retirement income provisions.
Annuity Unit -A unit of measure used to determine the second and subsequent
variable annuity payments and reflecting the investment performance of the
Fund.
Contributions -The amount of payments made by the owner, on behalf of
participants, under the contract.
Fund Shares -Shares of Ohio National Fund, Inc., or shares of another registered
open-end investment company substituted therefor.
Owner -The contract holder.
Participant -An individual participating in the benefits of the plan for which
the contract is purchased.
Participant Account -The account established under the contract on behalf of
each participant.
Subaccount -Subdivisions of VAD, each of which invests exclusively in shares of
a designated portfolio of the Fund.
Valuation Period -The period of time from one determination of accumulation unit
and annuity unit values to their next determination. Such determination is
made at the same time that the net asset value of Fund Shares is
determined. See the accompanying Fund prospectus.
1940 Act -The Investment Company Act of 1940, as amended, or any similar
successor federal legislation.
2
<PAGE> 7
FEE TABLE
<TABLE>
<S> <C> <C>
CONTRACTOWNER TRANSACTION EXPENSES CONTRACT YEAR
Deferred Sales Load (as a percentage of OF SURRENDER PERCENTAGE
amount withdrawn) (Percentage OR WITHDRAWAL CHARGED
varies by number of years from the ------------- -------
establishment of each participant's account.) 1 7%
(No charge for withdrawals for plan payments.) 2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
8 and later 0%
Exchange (transfer) Fee $5 (the fee is presently being waived)
</TABLE>
VAD ANNUAL EXPENSES (as a percentage
of average account value)
Mortality and Expense Risk Fees 1.00%
Account Fees and Expenses 0.35%
-----
Total VAD Annual Expenses 1.35%
<TABLE>
<CAPTION>
FUND ANNUAL EXPENSES (after fee waiver*)
(as a percentage of the Fund's average
net assets) MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Equity 0.53% 0.14% 0.67%
Money Market* 0.25% 0.13% 0.38%
Bond 0.60% 0.18% 0.78%
Omni 0.55% 0.16% 0.71%
International 0.90% 0.32% 1.22%
Capital Appreciation 0.80% 0.15% 0.95%
Small Cap 0.80% 0.14% 0.94%
Global Contrarian 0.90% 0.42% 1.32%
Aggressive Growth 0.80% 0.17% 0.97%
Core Growth 0.95% 0.16% 1.11%
Growth & Income 0.85% 0.10% 0.95%
S&P 500 Index 0.40% 0.12% 0.52%
Social Awareness 0.60% 0.35% 0.95%
</TABLE>
EXAMPLE - If you surrendered your contract at the end of the applicable time
period, you would pay the following aggregate expenses on a $1,000 investment in
each subaccount, assuming 5% annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity $93 $118 $144 $235
Money Market* 90 110 129 204
Bond 94 121 149 246
Omni 93 119 146 239
International 98 134 170 290
Capital Appreciation 95 126 157 264
Small Cap 95 125 157 263
Global Contrarian 99 137 175 300
Aggressive Growth 95 127 158 266
Core Growth 97 131 165 280
Growth & Income 95 126 157 264
S&P 500 Index 91 114 136 219
Social Awareness 95 126 157 264
</TABLE>
3
<PAGE> 8
EXAMPLE - If you do not surrender your contract at the end of the applicable
time period, you would pay the following aggregate expenses on the same
investment:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity $21 $63 $109 $235
Money Market* 18 54 94 204
Bond 22 67 114 246
Omni 21 65 111 239
International 26 80 137 290
Capital Appreciation 23 72 123 264
Small Cap 23 72 123 263
Global Contrarian 27 83 142 300
Aggressive Growth 24 72 124 266
Core Growth 25 77 131 280
Growth & Income 23 72 123 264
S&P 500 Index 19 59 101 219
Social Awareness 23 72 123 264
</TABLE>
The purpose of the above table is to help you to understand the costs and
expenses that a variable annuity contractowner will bear directly or
indirectly. THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Note
that the expense amounts shown in the examples are aggregate amounts for the
total number of years indicated. Neither the table nor the examples reflect any
premium taxes that may apply to a contract, which currently range from 0% to
2.25%. The above table and examples reflect only the charges for contracts
currently offered by this prospectus and not other contracts that may be
offered by Ohio National Life. For further details, see Deductions and
Expenses, page 8.
*For the Money Market Portfolio, management fees in excess of 0.25% are
presently being waived by the Fund's investment adviser. Without the waiver, the
Money Market Portfolio's Management Fee would be 0.30%, its Total Fund Annual
Expenses would be 0.43%, and its expenses would total $90 for a $1,000 contract
surrendered at the end of 1 year, $111 if surrendered at the end of 3 years,
$132 if surrendered at the end of 5 years or $209 if surrendered at the end of
10 years. For a $1,000 contract annuitized or not surrendered, the expenses
without the waiver would be $18 for 1 year, $56 for 3 years, $96 for 5 years or
$209 for 10 years.
4
<PAGE> 9
<TABLE>
ACCUMULATION UNIT VALUES
<CAPTION>
EQUITY SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
<S> <C> <C> <C> <C>
1995* $10.000000 $12.198167 13,287
1996 12.198167 14.243704 32,583
1997 14.243704 16.607094 74,941
MONEY MARKET SUBACCOUNT**
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1995* $10.000000 $10.346422 1,732
1996 10.346422 10.735959 7,977
1997 10.735959 11.161886 32,475
BOND SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1995* $10.000000 $11.207694 1,139
1996 11.207694 11.468004 6,512
1997 11.468004 12.365430 12,237
OMNI SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1995* $10.000000 $11.742940 13,547
1996 11.742940 13.386856 45,160
1997 13.386856 15.605553 98,309
INTERNATIONAL SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1995* $10.000000 $11.256284 20,393
1996 11.256284 12.714297 42,439
1997 12.714297 12.810197 100,959
CAPITAL APPRECIATION SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1995* $10.000000 $11.663489 39,782
1996 11.663489 13.320406 54,003
1997 13.320406 15.139212 78,535
SMALL CAP SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1995* $10.000000 $12.909669 24,533
1996 12.909669 14.992559 39,188
1997 14.992559 16.045605 78,648
GLOBAL CONTRARIAN SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1995* $10.000000 $10.780072 8,523
1996 10.780072 11.922317 13,394
1997 11.922317 13.135923 16,765
AGGRESSIVE GROWTH SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1995* $10.000000 $12.568155 3,057
1996 12.568155 12.494380 9,915
1997 12.494380 13.872097 21,702
CORE GROWTH SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1997* $10.000000 $ 9.562924 12,433
GROWTH & INCOME SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1997* $10.000000 $13.476367 11,608
S & P 500 INDEX SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1997* $10.000000 $12.999822 26,903
SOCIAL AWARENESS SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------- ----------------- ----------- --------------
1997* $10.000000 $12.396349 3,506
<FN>
*Series of variable annuity contracts commenced on January 25, 1995. Global
Contrarian and Aggressive Growth subaccounts commenced on March 31, 1995. Core
Growth, Growth & Income, S&P 500 Index and Social Awareness subaccounts
commenced on January 3, 1997.
**The current annualized yield for the Money Market subaccount for the seven
days ended December 31, 1997, was 4.14%.
</TABLE>
FINANCIAL STATEMENTS
The complete financial statements of VAD and Ohio National Life, and the
Independent Auditors' Reports thereon, may be found in the Statement of
Additional Information.
5
<PAGE> 10
THE OHIO NATIONAL COMPANIES
OHIO NATIONAL LIFE
Ohio National Life was organized under the laws of Ohio in 1909 as a stock life
insurance company and became a mutual life insurance company in 1959. It writes
life, accident and health insurance and annuities in 47 states, the District of
Columbia and Puerto Rico. Currently it has assets in excess of $6.3 billion and
equity in excess of $600 million. Its home office is located at One Financial
Way, Cincinnati, Ohio 45242. Ohio National Life's policyholders have approved
a plan of reorganization that, if approved by the Ohio Superintendent of
Insurance, would convert Ohio National Life to a stock company ultimately owned
by a mutual holding company (Ohio National Holdings, Inc.) with the majority
ownership of the latter being by the policyholders.
OHIO NATIONAL VARIABLE ACCOUNT D
The establishment of VAD was authorized by Ohio National Life in 1969 as a
separate account under Ohio law for the purpose of funding variable annuity
contracts. (Until 1993, VAD was used to fund group variable annuity contracts
unrelated to the contracts offered in this prospectus. Those unrelated group
variable annuity contracts are now funded through another separate account of
Ohio National Life.) Contributions for the contracts are allocated to one or
more subaccounts of VAD. However, a participant's account values may not be
allocated to more than 10 variable subaccounts at any one time. Income, gains
and losses, whether or not realized, from assets allocated to VAD are, as
provided in the contracts, credited to or charged against VAD without regard to
other income, gains or losses of Ohio National Life. The assets maintained in
VAD will not be charged with any liabilities arising out of any other business
conducted by Ohio National Life. Nevertheless, all obligations arising under
the contracts, including the commitment to make annuity payments, are general
corporate obligations of Ohio National Life. Accordingly, all of Ohio National
Life's assets are available to meet its obligations under the contracts. VAD is
registered as a unit investment trust under the 1940 Act.
The assets of each subaccount of VAD are invested at net asset value (without an
initial sales charge) in shares of a corresponding portfolio of the Fund: the
Equity Portfolio, Money Market Portfolio, Bond Portfolio, Omni Portfolio (a
flexible portfolio fund), International Portfolio, Capital Appreciation
Portfolio, Small Cap Portfolio, Global Contrarian Portfolio, Aggressive Growth
Portfolio, Core Growth Portfolio, Growth & Income Portfolio, S&P 500 Index
Portfolio or Social Awareness Portfolio.
OHIO NATIONAL FUND, INC.
The Fund is a diversified, open-end, management investment company registered
under the 1940 Act. The value of the Fund's investments fluctuates daily and is
subject to the risk of changing economic conditions as well as the risk inherent
in the ability of management to anticipate changes necessary in such investments
to meet changes in economic conditions. The Fund receives investment advice, for
a fee, from its investment adviser, Ohio National Investments, Inc., and from
Societe Generale Asset Management Corp. (sub-adviser to the International and
Global Contrarian Portfolios), T. Rowe Price Associates, Inc. (sub-adviser to
the Capital Appreciation Portfolio), Founders Asset Management, Inc.
(sub-adviser to the Small Cap Portfolio), Strong Capital Management, Inc.
(sub-adviser to the Aggressive Growth Portfolio), Pilgrim Baxter & Associates,
Ltd. (sub-adviser to the Core Growth Portfolio), and Robertson Stephens
Investment Management, L.P. (sub-adviser to the Growth & Income Portfolio). For
additional information concerning the Fund, including the investment objectives
of each of its portfolios, see the attached Fund prospectus. Read the Fund
prospectus carefully before investing. The Fund prospectus contains information
about other portfolios that are not available for the contracts offered herein.
In addition to being offered to VAD, Fund shares are currently offered to other
separate accounts of Ohio National Life in connection with variable annuity
contracts and a separate account of Ohio National Life Assurance Corporation in
connection with variable life insurance contracts. In the future, Fund shares
may be offered to other insurance company separate accounts. It is conceivable
that in the future it may become disadvantageous for both variable life and
variable annuity separate accounts to invest in the Fund. Although neither Ohio
National Life nor the Fund currently foresees any such disadvantage, the Board
of Directors of the Fund will monitor events in order to identify any material
conflict between variable life and variable annuity contractowners and to
determine what action, if any, should be taken in response thereto, including
the possible withdrawal of VAA`s participation in the Fund. Material conflicts
could result from such things as (1) changes in state insurance law; (2) changes
in federal income tax law; (3) changes in the investment management of any
portfolio of the Fund; or (4) differences between voting instructions given by
variable life and variable annuity contractowners.
6
<PAGE> 11
VOTING RIGHTS
Ohio National Life shall vote Fund shares held in VAD at meetings of Fund
shareholders in accordance with voting instructions received from contract
owners. The number of Fund shares for which an owner is entitled to give
instructions will be determined by Ohio National Life in the manner described
below, not more than 90 days prior to the meeting of shareholders. Fund proxy
material will be distributed to each owner together with appropriate forms for
giving voting instructions. Fund shares held in VAD, for which no timely
instructions are received, will be voted by Ohio National Life in proportion to
the instructions which are received with respect to all contracts participating
in VAD.
The number of Fund shares for which instructions may be given to Ohio National
Life is determined by dividing the value of a subaccount of the contract by the
net asset value of a share of the corresponding Fund portfolio as of the same
date. For variable annuities purchased for participants, the number of Fund
portfolio shares for which such instructions may be given is determined by
dividing the actuarial liability for variable annuities in the course of payment
by the net asset value of a Fund portfolio share as of the same date. Generally,
the number of votes tends to decrease as annuity payments progress.
DISTRIBUTION OF THE CONTRACTS
The contracts are sold by Ohio National Life insurance agents who are also
registered representatives of (a) The O.N. Equity Sales Company ("ONESCO"), a
wholly-owned subsidiary of Ohio National Life, or (b) of other broker-dealers
that have entered into distribution agreements with Ohio National Equities,
Inc. ("ONEQ," another wholly-owned subsidiary of Ohio National Life) which is
the principal underwriter of the contracts. Each of ONEQ, ONESCO and the other
broker-dealers is registered under the Securities Exchange Act of 1934 and a
member of the National Association of Securities Dealers, Inc. Ohio National
Life pays ONEQ a fee equal to no more than 5% of contributions. ONEQ then pays
a portion of that amount to ONESCO and the other broker-dealers as compensation
for their sales efforts. ONESCO and the other broker-dealers will remunerate
their registered representatives from their own funds. Contributions on which
no compensation is paid to registered representatives may not be included in
amounts on which the fee will be paid to ONEQ. To the extent that the amount of
the withdrawal charge received by Ohio National Life is not sufficient to
recover the fee paid to ONEQ, any deficiency will be made up from Ohio National
Life's general account assets which include, among other things, any profit
from the mortality and expense risk charges. ONEQ's address is One Financial
Way, Cincinnati, Ohio 45242.
DEDUCTIONS AND EXPENSES
WITHDRAWAL CHARGE
No deduction for sales expense is made from contributions. A withdrawal charge
may be assessed by Ohio National Life when a contract is surrendered or a
withdrawal of a participant's account value is made for any reason other than to
make a plan payment to a participant. The purpose of the withdrawal charge is to
defray expenses relating to the sale of the contract, including compensation to
sales personnel, cost of sales literature and prospectuses, and other expenses
related to sales activity. Such charge equals a percentage of the contract value
withdrawn. This percentage will vary by the number of years from the date the
participant's account was established under the contract until the day the
withdrawal occurs as follows:
<TABLE>
<CAPTION>
YEAR OF
WITHDRAWAL PERCENTAGE
---------- ----------
<S> <C>
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
8 and later 0%
</TABLE>
7
<PAGE> 12
The total of all withdrawal charges together with any distribution expense risk
charges made against any participant account will never exceed 9% of the total
contributions made to that participant account. (See Deduction for Risk
Undertakings, below.)
DEDUCTION FOR ADMINISTRATIVE EXPENSES
A deduction is made at the end of each valuation period, presently equal to
0.35% on an annual basis, of the contract value for administrative expenses.
This deduction is not designed to produce a profit but to reimburse Ohio
National Life for expenses incurred for accounting, auditing, legal, contract
owner services, reports to regulatory authorities and contract owners, contract
issue, etc.
DEDUCTION FOR RISK UNDERTAKINGS
Ohio National Life guarantees that the contract value will not be affected by
any excess of sales and administrative expenses over the deductions provided
therefor. Ohio National Life also guarantees that variable annuity payments will
not be affected by adverse mortality experience or expenses.
For assuming these risks, Ohio National Life, in determining the accumulation
unit values and the annuity unit values for each subaccount, makes a deduction
from the applicable investment results equal to 1.00% of the contract value on
an annual basis. Although Ohio National Life views the risk charge as an
indivisible whole, of the amount currently being deducted, it has estimated that
a reasonable allocation would be 0.40% for mortality risk, and 0.60% for expense
risk. Although Ohio National Life hopes to realize a profit from this charge, if
the deduction is insufficient to cover the actual risk involved, the loss will
fall on Ohio National Life; conversely, if the deduction proves more than
sufficient, the excess will be a gain to Ohio National Life.
The contracts also provide for a distribution expense risk charge of no more
than 0.40%. Ohio National Life is presently not deducting that charge.
LIMITATIONS ON DEDUCTIONS
The contracts provide that the total of the deductions for administrative
expense, mortality and expense risks, and distribution expense risk may be
decreased by Ohio National Life at any time. Each of these deductions may be
increased, not more frequently than annually, provided that the total of all
these deductions shall not exceed 2.00% on an annual basis.
TRANSFER FEE
A transfer fee of $5 may be made for each transfer of a participant's account
values from one subaccount to another. The fee is charged against the subaccount
from which the transfer is effected. This fee is presently being waived.
DEDUCTION FOR STATE PREMIUM TAX
Most states do not presently charge a premium tax for these contracts. Where a
tax applies, the rates are presently 0.5% in California, 1.0% in Puerto Rico
and West Virginia, 2.0% in Kentucky and 2.25% in the District of Columbia. The
deduction for premium taxes will be made when incurred. Normally, that is not
until annuity payments begin.
FUND EXPENSES
There are deductions from, and expenses paid out of, the assets of the Fund.
These are described in the attached Fund prospectus.
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DESCRIPTION OF THE CONTRACTS
ACCUMULATION
CONTRIBUTION PROVISIONS
The contracts provide for minimum contributions of $25 per participant and
maximum contributions equal to the maximums permitted under the plan.
Contributions after the first may be made at any time but not more often than
biweekly. Ohio National Life may agree to modify any of these limits.
ACCUMULATION UNITS
The contract value is measured by accumulation units. Each contribution results
in the crediting of accumulation units to the contract (see Crediting
Accumulation Units, below). The number of accumulation units so credited remains
constant but the dollar value of accumulation units will vary depending upon the
investment results of the particular subaccount to which contributions are
allocated.
CREDITING ACCUMULATION UNITS
Application forms or orders, together with the first contribution, are
forwarded to the home office of Ohio National Life for acceptance. Upon
acceptance, a contract is issued to the contract owner, and the first
contribution is then credited to the contract in the form of accumulation
units. Initial contributions are credited not later than two business days
after receipt of all information necessary for processing the contribution. If
this cannot be done within five business days, the contribution will be
returned immediately to the applicant unless the applicant specifically
consents to having Ohio National Life retain the contribution until the
necessary information is completed. After that, the contribution will be
credited within two business days. Subsequent contributions are sent directly
to the home office of Ohio National Life and are applied to provide that number
of accumulation units (for each subaccount) determined by dividing the amount
of the contribution by the value of the appropriate accumulation unit next
computed after the payment is received at the home office.
ALLOCATION OF CONTRIBUTIONS
The contract owner may direct the allocation of contributions among the
subaccounts of VAD and the Fixed Accumulation Account. The amount allocated to
any subaccount or the Fixed Accumulation Account must equal a whole percentage.
The allocation of future contributions may be changed at any time upon written
notice to the home office of Ohio National Life.
ACCUMULATION UNIT VALUE AND CONTRACT VALUE
The accumulation unit value of each subaccount of VAD was set at $10 when the
first contribution for these contracts was allocated to each subaccount. The
accumulation unit value for any subsequent valuation period is determined by
multiplying the accumulation unit value for the immediately preceding valuation
period by the net investment factor (described below) for such subsequent
valuation period. The contract value is determined by multiplying the total
number of accumulation units (for each subaccount) credited to the contract by
the accumulation unit value (for such subaccount) for the valuation period for
which the contract value is being determined.
NET INVESTMENT FACTOR
The net investment factor is a quantitative measure of the investment results of
each subaccount of VAD. The net investment factor for each subaccount for any
valuation period is determined by dividing (a) by (b), then subtracting (c) from
the result, where:
(a) is
(1) the net asset value of a share in the appropriate portfolio of the Fund
determined as of the end of a valuation period, plus
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<PAGE> 14
(2) The per share amount of any dividends or other distributions declared
for that portfolio by the Fund if the "ex-dividend" date occurs during
the valuation period, plus or minus
(3) per share charge or credit for any taxes paid or reserved for, which is
determined by Ohio National Life to result from the maintenance or
operation of that subaccount of VAD (No federal income taxes are
applicable under present law.);
(b) is the net asset value of a share in the appropriate portfolio of the Fund
determined as the end of the preceding valuation period; and
(c) is the deduction for administrative expenses and risk undertakings. (See
Deduction for Administrative Expenses, page 8, and Deduction for Risk
Undertakings, page 8.)
SURRENDER AND WITHDRAWAL
The contract owner may surrender (totally withdraw the value of) the contract
for its contract value or make withdrawals therefrom. These transactions may be
subject to the withdrawal charge described on page 7. The withdrawal will be
made from the values of each subaccount in accordance with the contract owner's
instructions. The amount available for withdrawal is the sum of the subaccount
values less the withdrawal charge, if applicable. Payment by Ohio National Life
shall be made within seven days from the date of receipt of the request for such
payment except as it may be deferred under the circumstances described below.
Withdrawals are limited or not permitted in connection with certain retirement
plans. See Texas Optional Retirement Program, page 12, and Tax Deferred
Annuities, page 16. For tax consequences of a withdrawal, see Federal Tax
Status, page 15.
Occasionally, the contract owner may request a withdrawal which includes
contract values derived from contributions which have not cleared the banking
system. Ohio National Life may delay mailing that portion which relates to such
contributions until the check for the contribution has cleared.
The right to withdraw may be suspended or the date of payment postponed (1) for
any period during which the New York Stock Exchange is closed (other than
customary weekend and holiday closings) or during which trading on the Exchange,
as determined by the Securities and Exchange Commission, is restricted; (2) for
any period during which an emergency, as determined by the Commission, exists as
a result of which disposal of securities held in the Fund is not reasonably
practical, or it is not reasonably practical to determine the value of the
Fund's net assets; or (3) or such other periods as the Commission may by order
permit for the protection of security holders.
TRANSFERS AMONG SUBACCOUNTS
Contract values may be transferred at any time from one subaccount to another
upon the request of the owner. The amount of any such transfer within a
participant's account must be at least $500 (or the entire value of the
participant's interest in a subaccount, if less). Ohio National Life reserves
the right to limit the number, frequency, method or amount of transfers.
Transfers from any portfolio of the Fund on any one day may be limited to 1% of
the previous day's total net assets of that portfolio if Ohio National Life or
the Fund, in its or their discretion, believes that the portfolio might
otherwise be damaged. After the purchase of an annuity, transfers of the
participant's annuity values among subaccounts can only be made once each
calendar quarter. Such transfers may then be made without a transfer fee.
(See Transfer Fee, page 9, and Transfers After Annuity Purchase, page 14).
TELEACCESS
If the contract owner first submits a pre-authorization form to Ohio National
Life, contract and unit values and interest rates can be checked and transfers
may be made by telephoning Ohio National Life between 7:00 a.m. and 7:00 p.m.
(Eastern time) on days that it is open for business, at 1-800-366-6654, #8.
Ohio National Life will honor pre-authorized telephone transfer instructions
from anyone who is able to provide the personal identifying information
requested via TeleAccess. Telephone transfer requests will not be honored
after the annuitant's death. For added security, transfers are confirmed in
writing sent to the owner on the next business day. However, if a transfer
cannot be completed as requested, a customer service representative will
contact the owner in writing sent within 48 hours of the TeleAccess request.
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PAYMENT OF PLAN BENEFITS
At the contract owner's request, and upon receipt of due proof, Ohio National
Life will apply a participant's account value to provide a benefit prescribed by
the plan in the event of the participant's death, disability, retirement or
termination of employment. No withdrawal charge will be made in connection with
the payment of such plan benefits.
TEXAS STATE OPTIONAL RETIREMENT PROGRAM
Under the Texas State Optional Retirement Program (the "Program"), contributions
may be excluded from the gross income of state employees for federal tax
purposes to the extent that such contributions do not exceed the exclusion
allowance provided by the Code. The Attorney General of Texas has interpreted
the Program as prohibiting any participating state employee from receiving the
surrender value of a contract funding benefits under the Program prior to
termination of employment or the state employee's retirement, death or total
disability. Therefore, no withdrawal by a participant in the Program will be
allowed until the first of these events occurs.
ANNUITY BENEFITS
PURCHASING AN ANNUITY
Upon written request by the contract owner, Ohio National Life will apply a
participant's account value to purchase an annuity. The contract owner must
specify the purpose, effective date, option, amount and frequency of payments,
and the payees (including the annuitant and any contingent annuitant and
beneficiary), and give evidence of the annuitant's age. Payments will be made to
the annuitant during the annuitant's lifetime. The contracts include Ohio
National Life's assurance (except for option(e), below that annuity payments
will be paid for the lifetime of the annuitant (and joint annuitant, if any)
in accordance with the annuity rates contained in the contract, regardless
of actual mortality experience.
Once an annuity is purchased, the annuity cannot be surrendered for cash except
that, upon the death of the annuitant, the beneficiary shall be entitled to
surrender the annuity for the commuted value of any remaining period-certain
payments.
ANNUITY OPTIONS
The contract owner may elect one or more of the following annuity options upon
the purchase of an annuity for a participant (annuitant):
Option (a): Life Annuity with installment payments for the lifetime of the
annuitant (under this option it is possible for the annuitant to
receive only one payment; this could happen if the annuitant should
die before receiving the second payment; there is no residual value
of the contract after the annuitant's death).
Option (b): Life Annuity with installment payments guaranteed for five or ten
years and continuing thereafter during the remaining lifetime of
the annuitant.
Option (c): Joint & Survivor Life Annuity with installment payments during the
lifetime of an annuitant and all or a portion (e.g., 1/2 or 2/3) of
the payments continuing during the lifetime of a designated
contingent annuitant (under this option it is possible for the
annuitant and contingent annuitant to receive only one payment;
this could happen if both were to die before receiving the second
payment).
Option (d): Installment Refund Life Annuity with payments guaranteed for a
period certain and continuing thereafter during the remaining
lifetime of the annuitant. The number of period-certain payments is
equal to the amount applied under this option divided by the amount
of the first payment.
Option (e): Installment Refund annuity with payments guaranteed for a fixed
number (up to thirty) of years and remaining annuity values may be
commuted (surrendered) at any time. This option is available for
variable annuities only. Although the deduction for risk
undertakings is taken from annuity unit values, Ohio National
Life has no mortality risk during the annuity payout period under
this option.
Other settlement options are available as agreed to by Ohio National Life.
Unless the contract owner directs otherwise, when an annuity is purchased, the
participant's account values will be applied to provide annuity payments
pro-rata from each subaccount in the same proportion as the participant's
account values immediately prior to the purchase of the annuity.
The Internal Revenue Service has not ruled on the tax treatment of a commutable
variable annuity. If you select Option (e), it is possible that the IRS could
determine that the entire value of the annuity is fully taxable at the time you
elect Option (e) or that variable annuity payments under this option should not
be taxed under the annuity rules (see Federal Tax Status, page 15), which could
result in your payments being fully taxable to you. Should the IRS so rule,
Ohio National Life may be required to tax report up to the full value of the
annuity to you as taxable income.
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DETERMINATION OF AMOUNT OF THE FIRST VARIABLE ANNUITY PAYMENT
The first payment under a variable annuity is determined by applying the value
of the participant's account for each subaccount in accordance with the purchase
rate tables contained in the contract. The rates contained in those tables
depend upon the annuitant's (and any contingent annuitant's) age and sex and the
option selected. Contracts issued to plans sponsored by employers subject to
Title VII of the Civil Rights Act of 1964 or similar state statutes use annuity
tables which do not vary with annuitant's sex. The accumulation value to be
applied is determined at the end of a valuation period (selected by Ohio
National Life and uniformly applied) not more than a month and a day before the
date of the participant's first annuity payment.
If the amount to be applied under an option is less than $5,000, the option
shall not be available and the participant's account value shall be paid in a
single sum. If the first periodic payment under any option would be less than
$50, Ohio National Life reserves the right to change the frequency of payments
so that the first such payment is at least $50.
ANNUITY UNIT AND THE DETERMINATION OF SUBSEQUENT PAYMENTS
Subsequent variable annuity payments will vary to reflect the investment
performance of each applicable subaccount. The amount of each subsequent payment
is determined by annuity units. The number of annuity units for each subaccount
is determined by dividing the dollar amount of the first annuity payment from
each subaccount by the value of the subaccount annuity unit for the same
valuation period used to determine the participant's account value applied to
provide annuity payments. This number of annuity units remains fixed for any
annuity unless changed as provided below.
The annuity unit value for each subaccount was set at $10 for the valuation
period as of which the first variable annuity payable from each subaccount of
VAD was calculated. The annuity unit value for each subsequent valuation period
equals the annuity unit value for the immediately preceding valuation period
multiplied by the net investment factor (see page 9) for such subsequent
valuation period and by a factor (0.9998925 for a one-day valuation period) to
neutralize the assumed interest rate discussed below.
The dollar amount of each subsequent variable annuity payment is equal to the
fixed number of annuity units for each subaccount multiplied by the value of the
annuity unit for the valuation period.
The annuity purchase rate tables contained in the contract are based on a
blended 1983(a) Annuity Mortality Table with compound interest at the effective
rate of 4% per year. A higher interest assumption would mean a higher initial
annuity payment but a more slowly rising series of subsequent annuity payments
if annuity unit values were increasing (or a more rapidly falling series of
subsequent annuity payments if annuity unit values were decreasing). A lower
interest assumption would have the opposite effect. If the actual net investment
rate were equal to the assumed interest rate, annuity payments would be level.
TRANSFERS AFTER ANNUITY PURCHASE
After annuity payments have been made for at least 12 months, the annuitant can,
once each 12 months, change the subaccount(s) on which variable annuity payments
are based. On at least 60 days written notice to Ohio National Life at its home
office, that portion of the periodic variable annuity payment directed by the
annuitant will be changed to reflect the investment results of a different
subaccount. The annuity payment immediately after such change will be the amount
that would have been paid without such change. Subsequent payments will reflect
the new mix of subaccount allocation.
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OTHER CONTRACT PROVISIONS
ASSIGNMENT
Any amount payable in settlement of the contracts may not be commuted,
anticipated, assigned or otherwise encumbered, or pledged as loan collateral to
any person other than Ohio National Life. To the extent permitted by law, no
such amounts shall be subject in any way to any legal process to subject them to
payment of any claims against an annuitant before the annuity payments commence.
PERIODIC REPORTS
Ohio National Life will furnish the contract owner, once each six months, a
statement showing the number of accumulation units credited to the contract by
subaccount and the value of each unit as of the end of the preceding half year.
In addition, as long as the contract remains in effect, Ohio National Life will
forward such periodic reports as may be furnished it by the Fund.
SUBSTITUTION FOR FUND SHARES
If investment in the Fund is no longer possible or in Ohio National Life's
judgment becomes inappropriate to the purposes of the contract, Ohio National
Life may substitute one or more other mutual funds. Substitution may be made
with respect to both existing investments and the investment of future
contributions. However, no such substitution will be made without any necessary
approval of the Securities and Exchange Commission. We may also add other
investment portfolios of the Fund or of additional mutual funds as eligible
investments of VAD.
CONTRACT OWNER INQUIRIES
Any questions from contract owners should be directed to Ohio National Life,
Group Annuity Administration, P.O. Box 2669, Cincinnati, Ohio 45201; telephone
1-800-366-6654 (8:30 a.m. to 4:30 p.m. Eastern time).
PERFORMANCE DATA
Ohio National Life may advertise performance data for the various Fund
portfolios showing the percentage change in the value of an accumulation unit
based on the performance of the applicable portfolio over a period of time
(usually a calendar year). Such percentage change is determined by dividing the
increase (or decrease) in value for the unit by the accumulation unit value at
the beginning of the period. This percentage figure will reflect the deduction
of any asset-based charges under the contract but will not reflect the deduction
of any applicable withdrawal charge. The deduction of any applicable withdrawal
charge would reduce any percentage increase or make greater any percentage
decrease.
Any such advertising will also include average annual total return figures
calculated as shown in the Statement of Additional Information. The average
annual total return figures will reflect the deduction of applicable withdrawal
charges as well as applicable asset-based charges.
Ohio National Life may also distribute sales literature comparing separate
account performance to the Consumer Price Index or to such established market
indexes as the Dow Jones Industrial Average, the Standard & Poor's 500 Stock
Index, IBC's Money Fund Reports, Lehman Brothers Bond Indices, Morgan Stanley
Europe Australia Far East Index, Morgan Stanley World Index, Russell 2000 Index,
or other variable annuity separate accounts or mutual funds with investment
objectives similar to those of the subaccounts.
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FEDERAL TAX STATUS
The following discussion of federal income tax treatment of amounts received
under a variable annuity contract is not exhaustive, does not purport to cover
all situations, and is not intended as tax advice. A qualified tax adviser
should always be consulted with regard to the application of law to individual
circumstances. Tax laws can change, even with respect to contracts that have
already been issued. Tax law revisions, with unfavorable consequences to
contracts offered by this prospectus, could have retroactive effect on
previously issued contracts or on subsequent voluntary transactions in
previously issued contracts.
Ohio National Life is taxed as a life insurance company under Subchapter L of
the Internal Revenue Code (the "Code"). Since the operations of VAD are a part
of, and are taxed with, the operations of Ohio National Life, VAD is not
separately taxed as a "regulated investment company" under Subchapter M of the
Code.
No federal income tax is payable under present law on dividend income or capital
gains distribution from Fund shares held in VAD or upon capital gains realized
by VAD on redemption of Fund shares.
The contracts described in this prospectus are considered annuity contracts
under Section 72 of the Code, which generally provides for taxation of
annuities. Under existing provisions of the Code, any increase in the
accumulation value of the contract is not taxable to the owner or annuitant
until received, either in the form of annuity payments, as contemplated by the
contract, or in some other form of distribution.
When annuity payments commence under a participant's annuity, each payment is
taxable under Section 72 of the Code as ordinary income in the year of receipt
if the annuitant has neither paid any portion of the contributions nor has
previously been taxed on any portion of the contributions. If any portion of the
contributions has been paid from or included in the annuitant's taxable income,
this aggregate amount will be considered the annuitant's "investment in the
contract." The annuitant will be entitled to exclude from taxable income a
portion of each annuity payment equal to the annuitant's "investment in the
contract" divided by the period of expected annuity payments, determined by the
annuitant's life expectancy and the form of annuity benefit. Once the
annuitant's "investment in the contract" is recovered, the entire portion of
each annuity payment will be included in the annuitant's taxable income.
If an election is made to receive a participant's value in a single sum in lieu
of annuity payments, any amount received or withdrawn in excess of the
participant's "investment in the contract" will normally be taxed as ordinary
income in the year received. A withdrawal of a participant's account values is
taxable as income to the extent that the participant's accumulated account value
immediately before the payment exceeds the "investment in the contract." Such a
withdrawal is treated as a distribution of earnings first and only second as a
recovery of the participant's "investment in the contract." Any part of the
value of the contract that is assigned or pledged to secure a loan will be taxed
as if it had been a partial withdrawal and may be subject to a penalty tax.
There is a penalty tax equal to 10% of any amount that must be included in
gross income for tax purposes. The penalty will not apply to a redemption that
is (1) received on or after the taxpayer reaches age 59 1/2; (2) made to a
beneficiary on or after the death of the annuitant; (3) attributable to the
taxpayer's becoming disabled; (4) made as a series of substantially equal
periodic payments for the life of the annuitant (or joint lives of the
annuitant and beneficiary); (5) from a contract that is a qualified funding
asset for purposes of a structured settlement; (6) made under an annuity
contract that is purchased with a single premium and with annuity payments that
commence not later than a year from the purchase of the annuity; (7) incident
to divorce; or (8) taken from an IRA for a qualified first-time home purchase
(up to $10,000) or qualified education expense. If an election is made not to
have withholding apply to the early withdrawal or if an insufficient amount is
withheld, the participant may be responsible for payment of estimated tax. The
participant may also incur penalties under the estimated tax rules if the
withholding and estimated tax payments are not sufficient. Failure by a
participant to provide his or her taxpayer identification number will
automatically subject any payments under the contract to withholding.
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TAX-DEFERRED ANNUITIES
Under the provisions of Section 403(b) of the Code, contributions made for
annuity contracts purchased for employees by public educational institutions and
certain tax-exempt organizations which are described in Section 501(c)(3) of the
Code are excludable from the gross income of such employees to the extent that
the aggregate contributions plus any other amounts contributed to the purchase
of a contract and toward benefits under qualified retirement plans do not exceed
the exclusion allowance determined for the employee as set forth in Sections
403(b) and 415 of the Code. Employee contributions are, however, subject to
social security (FICA) tax withholding. All amounts received by an employee
under a contract, either in the form of annuity payments or cash withdrawal,
will be taxed under Section 72 of the Code as ordinary income for the year
received, except for exclusion of any amounts representing "investment in the
contract." Under certain circumstances, amounts received may be used to make a
"tax-free rollover" into one of the types of individual retirement arrangements
permitted under the Code. Amounts received that are eligible for "tax-free
rollover" will be subject to an automatic 20% withholding unless such amounts
are directly rolled over from the tax-deferred annuity to the individual
retirement arrangement.
With respect to earnings accrued and contributions made after December 31, 1988,
pursuant to a salary reduction agreement under Section 403(b) of the Code,
distributions may be paid only when the employee (a) attains age 59 1/2, (b)
separates from the employer's service, (c) dies, (d) becomes disabled as defined
in the Code, or (e) incurs a financial hardship as defined in the Code. In the
case of hardship, cash distributions may not exceed the amount of such
contributions. These restrictions do not affect rights to transfer investments
among the subaccounts and do not limit the availability of exchanges.
QUALIFIED PENSION OR PROFIT-SHARING PLANS
Under present law, contributions made by an employer or trustee, pursuant to a
plan or trust qualified under Section 401(a) or 403(a) of the Code, are
generally excludable from gross income of the employee. The portion, if any, of
the contributions made by the employee, or which is considered taxable income to
the employee in the year such payments are made, constitutes an "investment in
the contract" under Section 72 of the Code for the employee's annuity benefits.
Employer or employee payments to a profit sharing plan qualifying under Section
401(k) of the Code are generally excludable from gross income of the employee.
Distributions must commence no later than April 1 of the calendar year following
the year in which the participant reaches age 70 1/2. Premature distribution of
benefits (prior to age 59 1/2) or contributions in excess of those permitted by
the Code may result in certain penalties under the Code.
If an employee, or one or more of the beneficiaries, receives the total amounts
payable with respect to an employee within one taxable year after age 59 1/2 on
account of the employee's death or separation from service of the employer, any
amount received in excess of the employee's "investment in the contract" may be
taxed under special 5-year forward averaging rules. Five-year averaging will no
longer be available after 1999 except for certain grandfathered individuals.
The taxpayer can elect to have that portion of a lump-sum distribution
attributable to years of participation prior to January 1, 1974 given capital
gains treatment. The percentage of pre-1974 distribution subject to capital
gains treatment decreases as follows: 100%, 1987; 95%, 1988; 75%, 1989; 50%,
1990; and 25%, 1991. For tax years 1992 and thereafter no capital gains
treatment is available (except that taxpayers who were age 50 before 1986 may
still elect capital gains treatment). The employee receiving such a
distribution may be able to make a "tax-free rollover" of the distribution less
the employee's "investment in the contract" into another employee's qualified
plan or into one of the types of individual retirement arrangements permitted
under the Code. Amounts received that are eligible for "tax-free rollover" will
be subject to an automatic 20% withholding unless such amounts are directly
rolled over to another qualified plan or individual retirement arrangement.
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WITHHOLDING ON DISTRIBUTIONS
Distributions from tax-deferred annuities or qualified pension or profit sharing
plans that are eligible for "tax-free rollover" will be subject to an automatic
20% withholding unless such amounts are directly rolled over to an individual
retirement arrangement or another qualified plan. Federal income tax withholding
on annuity payments is required. However, recipients of annuity payments are
allowed to elect not to have the tax withheld. Such an election may be revoked
at any time with respect to annuity payments and thereafter withholding would
commence. Failure to provide your taxpayer identification number will
automatically subject any payments under the contract to withholding.
APPENDIX
FIXED ACCUMULATION ACCOUNT
The Fixed Accumulation Account guarantees a fixed return for a specified period
of time and guarantees the principal against loss. Any portion of a contract
relating to the Fixed Accumulation Account is not registered under the
Securities Act of 1933. The Fixed Accumulation Account is not registered as an
investment company under the 1940 Act. Accordingly, neither the Fixed
Accumulation Account nor any interests in it are subject to the provisions or
restrictions of either such Act, and the disclosures in this appendix have not
been reviewed by the staff of the Securities and Exchange Commission.
The Fixed Accumulation Account consists of all of Ohio National Life's general
assets other than those allocated to a separate account. Accumulation values
under a contract will be allocated between the Fixed Accumulation Account and
VAD. The allocation will be as elected by the contract owner or participant at
the time of purchase or as subsequently changed.
Ohio National will invest its general assets in its discretion as allowed by
applicable state law. Investment income from Ohio National Life's general assets
will be allocated to those contracts having guaranteed accumulation values in
accordance with the terms of such contracts
The amount of investment income allocated to the contracts will vary from year
to year in Ohio National Life's sole discretion. However, Ohio National Life
guarantees that it will credit interest at a rate of not less than 3% per year,
compounded annually, to contract values allocated to the Fixed Accumulation
Account. Ohio National Life may credit interest at a rate in excess of 3%, but
any such excess interest credit will be in Ohio National Life's sole discretion.
Ohio National Life guarantees that the fixed accumulation value of a contract
will never be less than (a) the amount of deposits allocated to, and transfers
into, the Fixed Accumulation Account, plus (b) interest credited at the rate of
3% per year compounded annually, plus (c) any additional excess interest Ohio
National Life may credit to fixed accumulation values, and less (d) any
withdrawals and transfers from the fixed accumulation values, and less (e) any
withdrawal charges, state premium taxes and transfer fees. No deductions are
made from the Fixed Accumulation Account for administrative expenses or risk
undertakings. (See Deductions and Expenses, page 8.) However, in addition to any
applicable withdrawal charge, Ohio National Life may assess a liquidation charge
as described below.
Contract values credited to the Fixed Accumulation Account will be allocated to
an investment cell of the Fixed Accumulation Account (a "Cell"). A Cell is a
partition of the Fixed Accumulation Account by the time period in which the
contract value is credited to the Fixed Accumulation Account (either by means of
a contract contribution or a transfer into the Fixed Accumulation Account).
Earlier Cells may be aggregated into a single Cell. Each Cell is credited with
interest at an associated rate declared by Ohio National Life. Such rate will
not be reduced more than once a year. Amounts withdrawn from or charged against
a participant's contribution account decrease the balances in the Cells
established within that participant's account on a last-in first-out basis. Only
when the most recently established Cell's balance is exhausted will the next
previously established Cell's balance be reduced.
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<PAGE> 21
Withdrawals made from a participant's portion of the Fixed Accumulation Account
are assessed a liquidation charge which is a percentage of the balance withdrawn
from a Cell. The percentage equals ten times x minus y (but never less than 0%),
where:
x is the annual effective interest rate declared by Ohio National Life
applicable to the Cell for new contract contributions as of the date of
withdrawal, and
y is the annual effective interest rate at the time of withdrawal that is
applicable to the Cell from which a withdrawal is being made.
In no event will the liquidation charge exceed the difference between the amount
of the participant's contract value allocated to the Fixed Accumulation Account
and the participant's minimum Fixed Accumulation Account value. The
participant's minimum Fixed Accumulation Account value equals the participant's
net purchase payments and transfers allocated to the Fixed Accumulation Account,
less withdrawals and transfers from the Fixed Accumulation Account, accumulated
at an annual effective interest rate of 3%. The liquidation charge does not
apply when the contract is discontinued because of termination of the plan.
Upon discontinuance of the contract by the contract owner, the liquidation
charge will not be assessed if the contract owner elects to receive the balance
in the Fixed Accumulation Account in six payments over a five year period. The
first payment will be made within 30 days of discontinuance, equal to 1/6 of the
balance, and subsequent payments will be made at the end of each of the next
five years equal to 1/6 of the original balance plus interest credited to the
date of payment.
Not more than 20% of a participant's Fixed Accumulation Account value, as of
the beginning of any contract year, may be transferred to one or more variable
subaccounts during that contract year. As provided by applicable state law,
Ohio National Life reserves the right to defer the payment of amounts withdrawn
from the Fixed Accumulation Account for a period not to exceed six months from
the date written request for such withdrawal is received by Ohio National Life.
17
<PAGE> 22
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 23
OHIO NATIONAL VARIABLE ACCOUNT D
OF
THE OHIO NATIONAL LIFE INSURANCE COMPANY
One Financial Way
Cincinnati, Ohio 45242
Telephone (513) 794-6514
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1998
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the prospectus for Ohio National Variable Account D ("VAD")
flexible purchase payment individual tax qualified variable annuity contracts
dated May 1, 1998. To obtain a free copy of the VAD prospectus, write or
call The Ohio National Life Insurance Company ("Ohio National Life") at the
above address.
Table of Contents
<TABLE>
<S> <C>
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Independent Certified Public Accountants . . . . . . . . . . . 2
Underwriter . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Calculation of Money Market Subaccount Yield . . . . . . . . . 3
Total Return . . . . . . . . . . . . . . . . . . . . . . . . . 3
Transfer Limitations . . . . . . . . . . . . . . . . . . . . . 4
The Year 2000 Issue . . . . . . . . . . . . . . . . . . . . . . 4
Financial Statements . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>
GROUP RETIREMENT ADVANTAGE
<PAGE> 24
CUSTODIAN
Ohio National Life has executed an agreement with Star Bank, N.A. ("the Bank"),
Cincinnati, Ohio, pursuant to which the shares of Ohio National Fund, Inc.
("Fund") and other assets credited to VAD will be held in the custody of the
Bank. The agreement provides that the Bank will purchase Fund shares at their
net asset value determined as of the end of the valuation period of VAD during
which the deposit is received by Ohio National Life. The Bank effects
redemptions of Fund shares held by VAD upon instructions from Ohio National Life
at net asset value determined as of the end of the valuation period of VAD
during which a redemption request is received or made by Ohio National Life. In
addition, the Bank maintains appropriate records with respect to all
transactions in Fund shares relative to VAD.
The agreement requires the Bank to have at all times an aggregate capital,
surplus and undivided profit of not less than $2 million and prohibits
resignation by the Bank until (a) a successor custodian bank having the
qualifications enumerated above shall have agreed to serve as custodian, or (b)
VAD has been completely liquidated and the proceeds of such liquidation properly
distributed. Subject to these conditions the agreement of custodianship may be
terminated by either party upon sixty days written notice. For its services as
custodian, the Bank will be paid a fee to be agreed upon from time to time by
the Bank and Ohio National Life.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The financial statements of VAD as of December 31, 1997 and for the periods
indicated herein and Ohio National Life's consolidated financial statements
as of December 31, 1997 and 1996 and for the periods indicated herein have been
included herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.
UNDERWRITER
The offering of the contracts is continuous. Prior to May 1, 1997, The O. N.
Equity Sales Company ("ONESCO"), a wholly-owned subsidiary of Ohio National
Life, was the principal underwriter of the contracts. The aggregate amount of
commissions paid to ONESCO with respect to contracts issued by VAD, and the
amounts retained by ONESCO, for each of the last three years have been:
<TABLE>
<CAPTION>
Aggregate Retained
Year Commissions Commissions
---- ----------- -----------
<S> <C> <C>
1997 $93,634 None
1996 74,326 None
1995 79,218 None
</TABLE>
-2-
<PAGE> 25
Since May 1, 1997, Ohio National Equities, Inc., another wholly-owned
subsidiary of Ohio National Life, has been the principal underwriter of the
contracts. Its aggregate and retained commissions have been:
<TABLE>
<CAPTION>
Aggregate Retained
Year Commissions Commissions
---- ----------- -----------
<S> <C> <C>
1997 $ 91,301 None
</TABLE>
CALCULATION OF MONEY MARKET SUBACCOUNT YIELD
The current yield of the Money Market subaccount for the seven days ended on
December 31, 1997, was 4.14%. This was calculated by determining the net change,
exclusive of capital changes, in the value of a hypothetical pre-existing
account having a balance of one accumulation unit of the subaccount at the
beginning of the seven-day period, dividing the net change in subaccount value
by the value of the subaccount at the beginning of the base period to obtain the
base period return, and multiplying the difference by 365/7. The resulting
figure is carried to the nearest hundredth of one percent.
TOTAL RETURN
The average annual compounded rate of return for a contract with respect to a
particular subaccount over a given period is found by equating the initial
amount invested to the ending redeemable value using the following formula:
P(1 + T)n = ERV
where: P = a hypothetical initial payment of $1,000,
T = the average annual total return,
n = the number of years, and
ERV = the ending redeemable value of a hypothetical $1,000
beginning-of-period payment at the end of the period (or
fractional portion thereof).
For this purpose, it should be noted that the current series of contracts were
initially offered on January 25, 1995. Hypothetical results based upon
performance of the portfolio underlying each subaccount prior to that date
assume that the same charges and deductions applicable to the current contracts
were in effect from the inception of each corresponding portfolio. Based on
those assumptions, the average total returns for contracts in each of the
subaccounts from the inception of the subaccount and for the one-, five- and
ten-year periods ending on December 31, 1997, and assuming surrender of the
contract on the latter date, are as follows:
<TABLE>
<CAPTION>
One Five Ten From Inception
Year Years Years Inception Date
---- ----- ----- --------- ----
<S> <C> <C> <C> <C> <C>
Equity 16.59% 13.73% 12.10% 9.59% 10-06-69
Money Market 3.97% 3.18% 4.13% 5.87% 03-20-80
Bond 7.83% 6.05% 6.86% 7.25% 11-02-82
Omni 16.57% 11.96% 11.09% 10.55% 09-10-84
International 0.75% N/A N/A 11.52% 04-30-93
Capital Appreciation 13.65% N/A N/A 14.19% 05-01-94
Small Cap 7.02% N/A N/A 20.14% 05-01-94
Global Contrarian 10.18% N/A N/A 10.43% 03-31-95
Aggressive Growth 11.03% N/A N/A 12.64% 03-31-95
Core Growth N/A N/A N/A (4.37%) 01-03-97
Growth & Income N/A N/A N/A 34.76% 01-03-97
S&P 500 Index N/A N/A N/A 30.22% 01-03-97
Social Awareness N/A N/A N/A 23.96% 01-03-97
</TABLE>
-3-
<PAGE> 26
TRANSFER LIMITATIONS
To the extent that transfers, surrenders, partial withdrawals and annuity
payments from a subaccount exceed net purchase payments and transfers into that
subaccount, securities of the corresponding portfolio of the Fund may have to be
sold. Excessive sales of a portfolio's securities on short notice could be
detrimental to that portfolio and to contractowners with values allocated to the
corresponding subaccount. To protect the interests of all contractowners, Ohio
National Life reserves the right to limit the number, frequency, method or
amount of transfers. Transfers from any portfolio of the Fund on any one day may
be limited to 1% of the previous day's total net assets of that portfolio if
Ohio National Life or the Fund, in its or their discretion, believes that the
portfolio might otherwise be damaged.
If and when transfers must be so limited, some transfer requests will not be
made. In determining which requests will be made, scheduled transfers (that is,
those pursuant to a pre-existing dollar cost averaging program) will be made
first, followed by mailed written requests in the order postmarked and, lastly,
telephone and facsimile requests in the order received. Contractowners whose
transfer requests are not made will be no notified. Current SEC rules preclude
Ohio National Life from processing at a later date those requests that were not
made. Accordingly, a new transfer request would have to be submitted in order to
make a transfer that was not made because of these limitations.
The Year 2000 Issue
The Company has considered the impact on its business of "Year 2000" issues. It
has developed a remedial plan for its computer systems and applications.
Conversion activities are presently in process and the Company expects
conversion testing and implementation to be completed by December 31, 1998.
While the Company has been assured by suppliers of financial services
(including underlying mutual funds, custodians, transfer agents and accounting
agents) that their systems either are already compliant or will be so by
December 31, 1998, the Company's internal auditors intend to independently test
those systems (other than systems of unaffiliated mutual funds and their
suppliers) to verify their compliance. The failure of the Company or one of its
suppliers to achieve timely and complete compliance could materially impair the
Company's ability to conduct its business, including its ability to accurately
and timely value interests in the contracts.
-4-
<PAGE> 27
OHIO NATIONAL VARIABLE ACCOUNT D December 31, 1997
INDEPENDENT AUDITORS' REPORT
The Board of Directors
The Ohio National Life Insurance Company
The Contract Owners
Ohio National Variable Account D
We have audited the accompanying statements of assets and contract owners'
equity of Ohio National Variable Account D (comprising, respectively, the
Equity, Money Market, Bond, Omni, International, Capital Appreciation, Small
Cap, Global Contrarian, Aggressive Growth, S&P 500 Index, Social Awareness, Core
Growth and Growth & Income Subaccounts) as of December 31, 1997, and the related
statements of operations and changes in contract owners' equity and schedules of
changes in unit values for each of the periods indicated herein. These financial
statements are the responsibility of the Companys' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1997, by examination of the
underlying mutal fund. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ohio National Variable Account
D at December 31, 1997, and the results of their operations, changes in contract
owners' equity and changes in unit values for each of the periods indicated
herein, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Cincinnati, Ohio
January 30, 1998
107
<PAGE> 28
<TABLE>
<CAPTION>
OHIO NATIONAL VARIABLE ACCOUNT D
Statements of Assets and Contract Owners' Equity December 31, 1997
MONEY CAPITAL
EQUITY MARKET BOND OMNI INTERNATIONAL APPRECIATION SMALL CAP
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets - Investments
at market value
(note 2) ............. $ 1,244,545 $ 362,477 $ 151,318 $ 1,534,159 $ 1,293,305 $ 1,188,962 $ 1,261,959
============ ============= ============ ============ ============= ============ ============
Contract owners' equity
Contracts in
accumulation
period (note 3) .... $ 1,244,545 $ 362,477 $ 151,318 $ 1,534,159 $ 1,293,305 $ 1,188,962 $ 1,261,959
============ ============= ============ ============ ============= ============ ============
<CAPTION>
GLOBAL AGGRESSIVE S&P 500 SOCIAL CORE GROWTH &
CONTRARIAN GROWTH INDEX AWARENESS GROWTH INCOME
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Assets - Investments
at market value
(note 2) ............ $ 220,226 $ 301,053 $ 349,733 $ 43,466 $ 118,899 $ 156,440
============ ============= ============ ============ ============= ============
Contract owners' equity
Contracts in
accumulation
period (note 3) ... $ 220,226 $ 301,053 $ 349,733 $ 43,466 $ 118,899 $ 156,440
============ ============= ============ ============ ============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
109
<PAGE> 29
<TABLE>
<CAPTION>
OHIO NATIONAL VARIABLE ACCOUNT D
Statements of Operations and Changes in Contract Owners' Equity For the Years Ended December 31, 1997 and 1996
---------------------------------------------------------------
EQUITY MONEY MARKET BOND
SUBACCOUNT SUBACCOUNT SUBACCOUNT
1997 1996 1997 1996 1997 1996
------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Investment activity:
Reinvested dividends............. $15,244 $4,468 $19,238 $11,803 $8,473 $2,942
Risk and administrative
expense (note 4)................ (11,440) (4,433) (4,929) (3,176) (1,366) (716)
---------- -------- -------- ------- -------- -------
Net investment activity........ 3,804 35 14,309 8,627 7,107 2,226
---------- -------- -------- ------- -------- -------
Realized and Unrealized gain
(loss) on investments:
Reinvested capital gains........ 60,605 4,927 0 0 0 0
Realized gain (loss)............ 11,539 2,366 (3,324) 56 162 (187)
Unrealized gain (loss).......... 38,939 43,435 0 0 712 228
---------- -------- -------- ------- -------- -------
Net gain (loss) on
investments.................. 111,083 50,728 (3,324) 56 874 41
---------- -------- -------- ------- -------- -------
Net increase (decrease) in
contract owners' equity
from operations............. 114,887 50,763 10,985 8,683 7,981 2,267
---------- -------- -------- ------- -------- -------
Equity transactions:
Sales:
Contract purchase payments...... 686,822 279,457 911,058 357,959 100,723 67,441
Transfers from fixed and
other subaccounts.............. 66,178 604 282,983 0 8,105 1,846
---------- -------- -------- ------- -------- -------
753,000 280,061 1,194,041 357,959 108,828 69,287
---------- -------- -------- ------- -------- -------
Redemptions:
Withdrawals and surrenders...... 74,998 18,800 210,267 5,924 15,998 6,379
Transfers to fixed and
other subaccounts.............. 12,441 10,000 717,920 292,995 24,168 3,266
---------- -------- -------- ------- -------- -------
87,439 28,800 928,187 298,919 40,166 9,645
---------- -------- -------- ------- -------- -------
Net equity transactions........ 665,561 251,261 265,854 59,040 68,662 59,642
---------- -------- -------- ------- -------- -------
Net change in contract
owners' equity.............. 780,448 302,024 276,839 67,723 76,643 61,909
Contract owners' equity:
Beginning of period.............. 464,097 162,073 85,638 17,915 74,675 12,766
---------- -------- -------- ------- -------- -------
End of period....................$1,244,545 $464,097 $362,477 $85,638 $151,318 $74,675
========== ======== ======== ======= ======== =======
<CAPTION>
--------------------------------------------------------------------
OMNI INTERNATIONAL CAPITAL APPRECIATION
SUBACCOUNT SUBACCOUNT SUBACCOUNT
1997 1996 1997 1996 1997 1996
--------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Investment activity:
Reinvested dividends............. $36,504 $7,676 $67,512 $13,973 $35,184 $20,325
Risk and administrative
expense (note 4)................ (15,439) (4,481) (13,848) (4,981) (14,046) (8,025)
---------- -------- ---------- -------- ---------- --------
Net investment activity........ 21,065 3,195 53,664 8,992 21,138 12,300
---------- -------- ---------- -------- ---------- --------
Realized and Unrealized gain
(loss) on investments:
Reinvested capital gains........ 67,271 2,841 102,621 4,286 61,862 15,733
Realized gain (loss)............ 30,835 8,091 9,059 2,863 25,674 1,985
Unrealized gain (loss).......... 52,694 39,991 (185,689) 27,047 32,527 50,911
---------- -------- ---------- -------- ---------- --------
Net gain (loss) on
investments.................. 150,800 50,923 (74,009) 34,196 120,063 68,629
---------- -------- ---------- -------- ---------- --------
Net increase (decrease) in
contract owners' equity
from operations............. 171,865 54,118 (20,345) 43,188 141,201 80,929
---------- -------- ---------- -------- ---------- --------
Equity transactions:
Sales:
Contract purchase payments...... 856,949 278,302 765,825 194,955 467,154 159,142
Transfers from fixed and
other subaccounts.............. 152,282 141,607 135,835 82,458 91,434 30,791
---------- -------- ---------- -------- ---------- --------
1,009,231 419,909 901,660 277,413 558,588 189,933
---------- -------- ---------- -------- ---------- --------
Redemptions:
Withdrawals and surrenders...... 96,739 17,953 42,798 8,753 91,386 14,883
Transfers to fixed and
other subaccounts.............. 154,745 10,606 84,799 1,809 138,784 631
---------- -------- ---------- -------- ---------- --------
251,484 28,559 127,597 10,562 230,170 15,514
---------- -------- ---------- -------- ---------- --------
Net equity transactions........ 757,747 391,350 774,063 266,851 328,418 174,419
---------- -------- ---------- -------- ---------- --------
Net change in contract
owners' equity.............. 929,612 445,468 753,718 310,039 469,619 255,348
Contract owners' equity:
Beginning of period.............. 604,547 159,079 539,587 229,548 719,343 463,995
---------- -------- ---------- -------- ---------- --------
End of period....................$1,534,159 $604,547 $1,293,305 $539,587 $1,188,962 $719,343
========== ======== ========== ======== ========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
110
<PAGE> 30
<TABLE>
<CAPTION>
OHIO NATIONAL VARIABLE ACCOUNT D
Statements of Operations and Changes in Contract Owners' Equity For the Periods Ended December 31, 1997 and 1996
----------------------------------------------------------------
SMALL CAP GLOBAL CONTRARIAN AGGRESSIVE
SUBACCOUNT SUBACCOUNT SUBACCOUNT
1997 1996 1997 1996 1997 1996
-------------------- ------------------- -------------------
Investment activity:
Reinvested dividends............. $0 $0 $8,679 $3,423 $1,780 $10,586
Risk and administrative
expense (note 4)................ (13,285) (5,793) (2,735) (1,667) (2,833) (912)
---------- -------- -------- -------- -------- --------
Net investment activity........ (13,285) (5,793) 5,944 1,756 (1,053) 9,674
---------- -------- -------- -------- -------- --------
Realized and Unrealized gain
(loss) on investments:
Reinvested capital gains........ 53,817 10,714 12,007 765 1,010 0
Realized gain (loss)............ 13,237 2,171 4,350 802 2,301 (539)
Unrealized gain (loss).......... 30,649 56,410 (2,263) 8,542 21,214 (7,417)
---------- -------- -------- -------- -------- --------
Net gain (loss) on
investments.................. 97,703 69,295 14,094 10,109 24,525 (7,956)
---------- -------- -------- -------- -------- --------
Net increase in contract
owners' equity from
operations.................. 84,418 63,502 20,038 11,865 23,472 1,718
---------- -------- -------- -------- -------- --------
Equity transactions:
Sales:
Contract purchase payments...... 613,236 175,106 73,928 57,483 186,195 83,703
Transfers from fixed and
other subaccounts.............. 133,886 59,385 870 0 5,128 2,732
---------- -------- -------- -------- -------- --------
747,122 234,491 74,798 57,483 191,323 86,435
---------- -------- -------- -------- -------- --------
Redemptions:
Withdrawals and surrenders...... 70,853 22,174 17,583 1,538 24,275 2,692
Transfers to fixed and
other subaccounts.............. 86,257 5,000 16,720 0 13,352 0
---------- -------- -------- -------- -------- --------
157,110 27,174 34,303 1,538 37,627 2,692
---------- -------- -------- -------- -------- --------
Net equity transactions........ 590,012 207,317 40,495 55,945 153,696 83,743
---------- -------- -------- -------- -------- --------
Net change in contract
owners' equity.............. 674,430 270,819 60,533 67,810 177,168 85,461
Contract owners' equity:
Beginning of period.............. 587,529 316,710 159,693 91,883 123,885 38,424
---------- -------- -------- -------- -------- --------
End of period....................$1,261,959 $587,529 $220,226 $159,693 $301,053 $123,885
========== ======== ======== ======== ======== ========
<CAPTION>
S&P
500 SOCIAL CORE GROWTH &
INDEX AWARENESS GROWTH INCOME
1997 (a) 1997 (a) 1997 (a) 1997 (a)
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends............. $9,332 $180 $10 $653
Risk and administrative
expense (note 4)................ (1,785) (341) (744) (743)
-------- ------- -------- --------
Net investment activity........ 7,547 (161) (734) (90)
-------- ------- -------- --------
Realized and Unrealized gain
(loss) on investments:
Reinvested capital gains........ 28,189 3,716 0 7,767
Realized gain (loss)............ 321 (179) (3,615) 4,769
Unrealized gain (loss).......... (14,677) 3,299 4,899 2,964
-------- ------- -------- --------
Net gain (loss) on
investments.................. 13,833 6,836 1,284 15,500
-------- ------- -------- --------
Net increase in contract
owners' equity from
operations.................. 21,380 6,675 550 15,410
-------- ------- -------- --------
Equity transactions:
Sales:
Contract purchase payments...... 216,016 36,230 106,989 88,729
Transfers from fixed and
other subaccounts.............. 118,615 4,450 12,112 59,138
-------- ------- -------- --------
334,631 40,680 119,101 147,867
-------- ------- -------- --------
Redemptions:
Withdrawals and surrenders...... 1,206 3,889 295 31
Transfers to fixed and
other subaccounts.............. 3,072 0 457 6,806
-------- ------- -------- --------
4,278 3,889 752 6,837
-------- ------- -------- --------
Net equity transactions........ 330,353 36,791 118,349 141,030
-------- ------- -------- --------
Net change in contract
owners' equity.............. 351,733 43,466 118,899 156,440
Contract owners' equity:
Beginning of period.............. 0 0 0 0
-------- ------- -------- --------
End of period.................... $351,733 $43,466 $118,899 $156,440
======== ======= ======== ========
</TABLE>
(a) Period from January 3, 1997, date of commencement of operations.
The accompanying notes are an integral part of these financial statements.
111
<PAGE> 31
OHIO NATIONAL VARIABLE ACCOUNT D
NOTES TO FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Ohio National Variable Account D (the Account) is a separate account of The Ohio
National Life Insurance Company (ONLIC) and all obligations arising under
variable annuity contracts are general corporate obligations of ONLIC. The
account has been registered as a unit investment trust under the Investment
Company Act of 1940.
Assets of the Account are invested in shares of Ohio National, Fund, Inc. (The
Fund), a diversified open-end management investment company. The Fund's
investments are subject to varying degrees of market, interest and financial
risks; the issuers' abilities to meet certain obligations may be affected by
economic developments in their respective industries.
Investments are valued at the net asset value of fund shares held at December
31, 1997. Share transactions are recorded on the trade date. Income and capital
gain distributions are recorded on the ex-dividend date. Net realized capital
gains of loss is determined on the basis of average cost.
ONLIC performs investment advisory services on behalf of the Ohio National Fund,
Inc. in which the Account invests. For these services, the Company receives fees
from the mutual funds. These fees are paid to an affiliate of the Company.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
(2) INVESTMENTS
At December 31, 1997 the aggregate cost and number of shares of Ohio National
Fund, Inc. owned by the respective subaccounts were:
<TABLE>
<CAPTION>
MONEY CAPITAL
EQUITY MARKET BOND OMNI INTERNATIONAL APPRECIATION SMALL CAP
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Aggregate Cost $ 1,244,545 $ 362,477 $ 151,318 $ 1,534,159 $ 1,293,305 $ 1,188,962 $ 1,261,959
Number of Shares 35,115 36,248 14,171 72,830 96,551 87,850 67,416
<CAPTION>
GLOBAL AGGRESSIVE S&P 500 SOCIAL CORE GROWTH &
CONTRARIAN GROWTH INDEX AWARENESS GROWTH INCOME
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Aggregate Cost $ 220,226 $ 301,053 $ 349,733 $ 43,466 $ 118,899 $ 156,440
Number of Shares 18,776 27,154 29,828 3,813 12,278 12,172
</TABLE>
(3) CONTRACTS IN ACCUMULATION PERIOD
At December 31, 1997 the accumulation units and value per unit of the respective
subaccounts and products were:
<TABLE>
<CAPTION>
ACCUMULATION UNITS VALUE PER UNIT
------------------ --------------
<S> <C> <C>
Equity Subaccount 74,940.5344 16.607094
Money Market Subaccount 32,474.5080 11.161886
Bond Subaccount 12,237.1712 12.365430
Omni Subaccount 98,308.5177 15.605553
International Subaccount 100,958.9923 12.810197
Capital Appreciation Subaccount 78,535.2484 15.139212
Small Cap Subaccount 78,648.2641 16.045605
Global Contrarian Subaccount 16,765.2010 13.135923
Aggressive Growth Subaccount 21,702.0383 13.872097
S&P 500 Index Subaccount 26,902.8929 12.999822
</TABLE>
113
<PAGE> 32
OHIO NATIONAL VARIABLE ACCOUNT D
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
ACCUMULATION UNITS VALUE PER UNIT
------------------ --------------
<S> <C> <C>
Social Awareness Subaccount 3,506.3910 12.396349
Core Growth Subaccount 12,433.3813 9.562924
Growth & Income Subaccount 11,608.4615 13.476367
</TABLE>
4) RISK AND ADMINISTRATIVE EXPENSE
ONLIC charges the Account's assets at the end of each valuation period, equal to
0.25% on an annual basis, of the contract value for administrative expenses,
based on premiums established at the time the contracts are issued.
Although variable annuity payments differ according to the investment
performance of the Accounts, they are not affected by mortality or expense
experience because ONLIC assumes the expense risk and the mortality risk under
the contracts. ONLIC charges the Accounts' assets for assuming those risks,
based on the contract value at a rate of 0.95% for mortality and expense risk.
The expense risk assumed by ONLIC is the risk that the deductions for sales and
administrative expenses provided for in the variable annuity contracts may prove
insufficient to cover the cost of those terms.
The mortality risk results from a provision in the contract in which ONLIC
agrees to make annuity payments regardless of how long a particular annuitant or
other payee lives and how long all annuitants or other payees as a class live if
payment options involving life contingencies are chosen. Those annuity payments
are determined in accordance with annuity purchase rate provisions established
at the time the contracts are issued.
5) CONTRACT CHARGES
No deduction for a sales charge is made from purchase payments. A withdrawal
charge ranging from 0% to 7% may be assed by ONLIC when a contract is
surrendered or a partial withdrawal of a participant's account value is made for
any other reason than to make a plan payment to a participant.
A transfer fee is charged for each transfer from one subaccount to another. The
fee is charged against the contract owner's equity in the subaccount from which
the transfer is effected.
State premium taxes presently range from 0% to 2 1/2% for these contracts. In
those jurisdictions permitting, such taxes will be deducted when annuity
payments begin. Elsewhere, they will be deducted from purchase payments.
(6) FEDERAL INCOME TAXES
Operations of the Account form a part of, and are taxed with, operations of
ONLIC which is taxed as a life insurance company under the Internal Revenue
Code. Taxes are the responsibility of the contract owner upon termination or
withdrawal. No Federal income taxes are payable under the present law on
dividend income or capital gains distribution from the Fund shares held in the
Account or on capital gains realized by the Account on redemption of the Fund
shares.
(7) NOTE TO SCHEDULE 1
Schedule 1 presents the components of the change in the unit values, which are
based on aveage unit value and are the basis for determining contract owners'
equity. This schedule is presented for each series, as applicable, in the
following format:
* Beginning unit value
* Reinvested capital gains and dividends
(This amount reflects the increase in the unit value due to capital gain
and dividend distributions from the underlying mutual fund.)
* Unrealized gain (loss)
(This amount reflects the increase (decrease) in the unit value resulting
from the market appreciation (depreciation) of the fund.)
* Expenses
(This amount reflects the decrease in the unit value due to Risk and
Administrative Expenses discussed in note 4 to the financial statements.)
* Ending unit value
* Percentage increase (decrease) in unit value
114
<PAGE> 33
<TABLE>
<CAPTION>
OHIO NATIONAL VARIABLE ACCOUNT D For the Years Ended December 31, 1997 and 1996
Schedules of Changes in Unit Values Schedule 1
MONEY
EQUITY MARKET BOND OMNI
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C>
1997
Beginning unit value..................... 14.243704 10.735959 11.468004 13.386856
Reinvested capital gains and dividends... 1.416970 0.573667 0.979685 1.355122
Realized and unrealized gain (loss)...... 1.161157 0.000000 0.078543 1.063053
Expenses................................. -0.214737 -0.147740 -0.160802 -0.199478
Ending unit value........................ 16.607094 11.161886 12.365430 15.605553
Percentage increase in unit value*....... 16.6% 4.0% 7.8% 16.6%
<CAPTION>
CAPITAL SMALL GLOBAL AGGRESSIVE
INTERNATIONAL APPRECIATION CAP CONTRARIAN GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C>
1997
Beginning unit value..................... 12.714297 13.320406 14.992559 11.922317 12.494380
Reinvested capital gains and dividends... 2.217694 1.327329 0.837620 1.310966 0.177037
Realized and unrealized gain (loss)...... -1.941641 0.682813 0.421519 0.075638 1.382002
Expenses................................. -0.180153 -0.191336 -0.206093 -0.172998 -0.181322
Ending unit value........................ 12.810197 15.139212 16.045605 13.135923 13.872097
Percentage increase in unit value*....... 0.8% 13.7% 7.0% 10.2% 11.0%
<CAPTION>
S&P 500 SOCIAL CORE GROWTH &
INDEX AWARENESS GROWTH INCOME
SUBACCOUNT** SUBACCOUNT** SUBACCOUNT** SUBACCOUNT**
<S> <C> <C> <C> <C>
1997
Beginning unit value..................... 10.000000 10.000000 10.000000 10.000000
Reinvested capital gains and dividends... 2.960950 1.774245 0.001604 1.698440
Realized and unrealized gain (loss)...... 0.208398 0.785017 -0.305691 1.950795
Expenses................................. -0.169526 -0.162913 -0.132989 -0.172868
Ending unit value........................ 12.999822 12.396349 9.562924 13.476367
Percentage increase (decrease) in unit
value*.................................. 30.0% 24.0% -4.4% 34.8%
<CAPTION>
MONEY
EQUITY MARKET BOND OMNI
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C>
1996
Beginning unit value..................... 12.198167 10.346422 11.207694 11.742940
Reinvested capital gains and dividends... 0.378887 0.531716 0.617011 0.397192
Realized and unrealized gain (loss)...... 1.846378 0.000000 -0.206175 1.417666
Expenses................................. -0.179728 -0.142179 -0.150526 -0.170942
Ending unit value........................ 14.243704 10.735959 11.468004 13.386856
Percentage increase (decrease) in unit
value* ............................... 16.8% 3.8% 2.3% 14.0%
<CAPTION>
CAPITAL SMALL GLOBAL AGGRESSIVE
INTERNATIONAL APPRECIATION CAP CONTRARIAN GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C>
1996
Beginning unit value..................... 11.256284 11.663489 12.909669 10.780072 12.568155
Reinvested capital gains and dividends... 0.603661 0.754940 0.349712 0.390426 1.877276
Realized and unrealized gain (loss)...... 1.019591 1.069965 1.923240 0.907834 -1.785852
Expenses................................. -0.165239 -0.167988 -0.190062 -0.156015 -0.165199
Ending unit value........................ 12.714297 13.320406 14.992559 11.922317 12.494380
Percentage increase (decrease) in unit
value* ............................... 13.0% 14.2% 16.1% 10.6% -0.6%
<FN>
* An annualized rate or return cannot be determined as expenses do not include
the contract charges discussed in note (5).
** Period from January 3, 1997, date of commencement of operations.
</TABLE>
The accompanying notes are a integral part of these financial statements.
115
<PAGE> 34
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements of the Registrant are included in Part B of
this Registration Statement:
Independent Auditors' Report of KPMG Peat Marwick LLP dated January 30,
1998
Statement of Assets and Contract Owners' Equity dated December 31, 1997
Statement of Operations and Changes in Contract Owners' Equity for the
Year Ended December 31, 1997
Notes to Financial Statements dated December 31, 1997
Schedule of Changes in Unit Values for the Year Ended December 31, 1997
The following consolidated financial statements of The Depositor and its
subsidiaries are also included in Part B of this Registration Statement:
Independent Auditors' Report of KPMG Peat Marwick LLP dated February 12,
1998
Consolidated Balance Sheets dated December 31, 1997 and 1996
Consolidated Statements of Income for the Years Ended December 31, 1997,
1996 and 1995
Consolidated Statements of Equity for the Years Ended December 31, 1997,
1996 and 1995
Consolidated Statements of Cash Flows for the Years Ended December 31,
1997, 1996 and 1995
Notes to Consolidated Financial Statements dated December 31, 1997, 1996
and 1995
The following financial information is included in Part A of this Registration
Statement:
Accumulation Unit Values
Consents of the Following Persons:
KPMG Peat Marwick LLP
Exhibits:
All relevant exhibits, which have previously been filed with the Commission and
are incorporated herein by reference, are as follows:
(1) Resolution of Board of Directors of the Depositor authorizing
establishment of the Registrant was filed as Exhibit A(1) of the
registration statement of Ohio National Variable Account A ("VAA")
on Form S-6 on August 3, 1982 (File no. 2-78652).
-1-
<PAGE> 35
(3)(a) Principal Underwriting Agreement for Variable Annuities between the
Depositor and Ohio National Equities, Inc. was filed as Exhibit
(3)(a) of Form N-4, Post-effective Amendment no. 21 of Ohio
National Variable A (File no. 2-91213) on April 25, 1997.
(3)(b) Registered Representative's Sales Contract with Variable Annuity
Supplement was filed as Exhibit (3)(b) of VAA's Form N-4,
Post-effective Amendment no. 9 on February 27, 1991 (File no.
2-91213).
(3)(c) Variable Annuity Sales Commission Schedule was filed as Exhibit
A(3)(c) of VAA's registration statement on Form S-6 on May 18, 1984
(File no. 2-91213).
(4) Group Annuity, Form GA-93-VF-1, was filed as Exhibit (4) of the
Registrant's registration statement on Form N-4 on July 20, 1994.
(4)(a) Group Annuity Certificate, Form GA-93-VF-1C, was filed as Exhibit
(4)(a) of the Registrant's registration statement on July 20, 1994.
(5) Group Annuity Application, Form 3762-R, was filed as Exhibit (5) of
the Registrant's registration statement on July 20, 1994.
(6)(a) Articles of Incorporation of the Depositor were filed as Exhibit
A(6)(a) of Ohio National Variable Interest Account registration
statement on Form N-8B-2 on July 11, 1980 (File no. 811- 3060).
(6)(b) Code of Regulations (by-laws) of the Depositor were filed as
Exhibit A(6)(b) of Ohio National Variable Interest Account
registration statement on Form N-8B-2 on July 11, 1980 (File no.
811- 3060).
(8) Powers of Attorney by certain Directors of the Depositor were filed
as Exhibit (8) of Post-effective Amendment no. 22 of Ohio
National Variable Account A registration statement on Form N-4 on
March 2, 1998 (File no. 2-91213).
(13) Computation of Performance Data was filed as Exhibit (13) of
Form N-4, Pre-effective Amendment no. 1, of Ohio National
Variable Account A (File no. 333-43511) on April 10, 1998.
-2-
<PAGE> 36
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- --------------
<S> <C>
Neil A. Armstrong Director
4635 Drake Road
Cincinnati, Ohio 45243
Trudy K. Backus* Vice President, Individual Insurance Services
Thomas A. Barefield* Senior Vice President, Institutional Sales
Howard C. Becker* Senior Vice President, Individual Insurance
and Corporate Services
Ronald L. Benedict* Corporate Vice President, Cousel and Secretary
Michael A. Boedeker* Vice President, Fixed Income Securities
Robert E. Bowen* Senior Vice President, Information Systems
Roylene M. Broadwell* Vice President and Treasurer
Joseph P. Brom* Senior Vice President & Chief Investment Officer
Dale P. Brown Director
36 East Seventh Street
Cincinnati, Ohio 45202
Jack E. Brown Director
50 E. Rivercenter Blvd.
Covington, Kentucky 41011
William R. Burleigh Director
One West Fourth Street
Suite 1100
Cincinnati, Ohio 45202
Victoria B. Buyniski Director
2343 Auburn Avenue
Cincinnati, Ohio 45219
Raymond R. Clark Director
201 East Fourth Street
Cincinnati, Ohio 45202
David W. Cook* Senior Vice President and Actuary
Dr. Alvin H. Crawford Director
Children's Hospital Medical Center
Department of Orthopedics
Elland and Bethesda Avenues
Cincinnati, Ohio 45229
Robert M. DiTommaso* Vice President, Career Marketing
Ronald J. Dolan* Senior Vice President and Chief Financial Officer
Michael J. Ferry* Vice President, Information Systems
Michael F. Haverkamp* Vice President and Counsel
John A. Houser III* Vice President, Claims
</TABLE>
-3-
<PAGE> 37
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- --------------
<S> <C>
Bannus B. Hudson Director
One Eastwood Drive
Cincinnati, Ohio 45227
David G. McClure* Vice President, Variable Product Sales
Charles S. Mechem, Jr.
One East Fourth Street
Cincinnati, Ohio 45202
James I. Miller, II* Vice President, Marketing Support
Thomas O. Olson* Vice President, Underwriting
David B. O'Maley* Director, Chairman, President and Chief Executive Officer
James F. Orr Director
201 East Fourth Street
Cincinnati, Ohio 45202
John J. Palmer* Senior Vice President, Strategic Initiatives
George B. Pearson, Jr.* Vice President, PGA Marketing
J. Donald Richardson* Senior Regional Vice President
D. Gates Smith* Senior Vice President, Sales
Michael D. Stohler* Vice President, Mortgages and Real Estate
Stuart G. Summers* Senior Vice President and General Counsel
Oliver W. Waddell Director
425 Walnut Street
Cincinnati, Ohio 45202
Dr. David S. Williams* Vice President and Medical Director
Stephen T. Williams* Vice President, Equity Investments
</TABLE>
*The principal business address for these individuals is One Financial Way,
Cincinnati, Ohio 45242.
-4-
<PAGE> 38
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY/CINCINNATI
A MUTUAL LIFE INSURANCE COMPANY INCORPORATED UNDER THE LAWS OF OHIO
- --------------------------------------------------------------------------------
<S> <C>
- ------------------------------- -----------------------------
ENTERPRISE PARK, INC. OHIO NATIONAL EQUITIES INC.
A GEORGIA CORPORATION A BROKER/DEALER
REAL ESTATE DEVELOPMENT COMPANY CAPITALIZED BY ONLI @ $30,000
CAPITALIZED BY ONLI $50,000
- ------------------------------- --------------------------------
Pres. & Dir. M. Stohler Chm. & Dir. D. O'Maley
V.P. & Dir. J. Brom Pres. & Dir. J. Palmer
Secy. & Dir. J. Fischer VP & Dir. T. Backus
Treas. & Dir. D. Taney VP & Dir. J. Miller
Sr. VP T. Barefield
Secretary & Dir. R. Benedict
Treasurer B. Turner
Compliance Officer J. Dunn
Asst. Secy. M. Haverkamp
- ------------------------------- --------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY/CINCINNATI
A MUTUAL LIFE INSURANCE COMPANY INCORPORATED UNDER THE LAWS OF OHIO
- -------------------------------------------------------------------------------------------------------------------
S E P A R A T E A C C O U N T S
--------------------------------
A B C D E F
--------------------------------
<S> <C> <C>
- ------------------------------- ------------------------------ -------------------------------------
OHIO NATIONAL INVESTMENTS, INC. THE O.N. EQUITY SALES COMPANY OHIO NATIONAL LIFE
ASSURANCE CORPORATION
AN INVESTMENT ADVISER AN OHIO CORPORATION AN OHIO CORPORATION
CAPITALIZED BY ONLI @ $10,000 A BROKER/DEALER A STOCK LIFE INSURANCE COMPANY
CAPITALIZED BY ONLI @ $790,000 CAPITALIZED BY ONLI @ $32,000,000
INCORPORATED UNDER THE LAWS OF OHIO
- ------------------------------- ------------------------------ ------------------------------------
Chm. & Dir. D. O'Maley Chm./Pres/.CEO & Dir. D. O'Maley
Pres. & Dir. J. Brom Sr. VP & Dir. R. Dolan
Pres. & Dir. J. Palmer Sr. VP & Dir. J. Palmer
VP & Dir. M. Boedeker Sr. VP & Dir. S. Summers
V.P. & Dir. M. Haverkamp Sr. VP & Dir. J. Brom
VP & Dir. M. Stohler Sr. VP T. Barefield
Secy. & Dir. R. Benedict Sr. Vice Pres. D. Cook
VP & Dir. S. Williams Sr. Vice Pres. G. Smith
Director B. DiTommaso Vice Pres. & Treas. R. Broodwell
Treasurer D. Taney Vice President M. Boedeker
Treasurer B. Turner Vice President R. DiTommaso
Secretary R. Benedict Vice President T. Backus
Compliance Director J. Dunn Vice President G. Pearson
VP K. Hanson Vice President D. Pennington
VP D. Hundley Vice President M. Stohler
VP J. Martin Vice Pres. J. Houser
VP & Secy. R. Benedict
Asst. Secy. J. Fischer
Asst. Actuary K. Flischel
- ------------------------------- ------------------------------ ------------------------------------
SEPARATE ACCOUNT
-------------------------------------
R
---
<CAPTION>
(= Advisor to Advisor to =)
--------------------------------------------------------
<S> <C> <C>
- ------------------ -------------------------------- --------------------------------
ONE FUND, INC. O.N. INVESTMENT MANAGEMENT CO. OHIO NATIONAL FUND
A MARYLAND CORPORATION AN OHIO CORPORATION A MARYLAND CORPORATION
AN OPEN END DIVERSIFIED A FINANCIAL ADVISORY SERVICE AN OPEN END DIVERSIFIED
MANAGEMENT INVESTMENT COMPANY CAPITALIZED BY ONESCO @ $145,000 MANAGEMENT INVESTMENT COMPANY
- ----------------------------- -------------------------------- --------------------------------
Pres. & Dir. J. Palmer Pres. & Dir. J. Palmer Pres. & Dir. J. Palmer
Vice. Pres. M. Boedeker ----- Vice President M. Boedeker
Vice Pres. J. Brom VP & Dir. G. Smith Vice President J. Brom
Vice Pres. T. Barefield Vice President S. Williams
Vice Pres. S. Williams VP & Dir. D. McClure Treasurer D. Taney
Treasurer D. Taney --------Secy. & Dir. R. Benedict
Secy. & Dir. R. Benedict Treasurer K. Jaeger Director R. Love
Director R. Love Director G. Castrucci
Director G. Castrucci Secretary M. Haverkamp Director G. Vredeveld
Director G. Vredeveld Sr. VP T. Barefield
- --------------------------------- -------------------------------- ---------------------------------
</TABLE>
<PAGE> 39
*The principal business address for these individuals is One Financial Way,
Cincinnati, Ohio 45242.
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The Organization Chart showing the relationships among the Depositor, the
Registrant and their affiliated entities is on page 4A hereof.
ITEM 27. NUMBER OF CONTRACTOWNERS
As of April 1, 1998, the Registrant's contracts were owned by 104 owners.
ITEM 28. INDEMNIFICATION
The sixth article of the Depositor's Articles of Incorporation, as amended,
provides as follows:
Each former, present and future Director, Officer or Employee of the
Corporation (and his heirs, executors or administrators), or any such
person (and his heirs, executors or administrators) who serves at the
Corporation's request as a director, officer, partner, member or employee
of another corporation, partnership or business organization or
association of any type whatsoever shall be indemnified by the Corporation
against reasonable expenses, including attorneys' fees, judgments, fine
and amounts paid in settlement actually and reasonably incurred by him in
connection with the defense of any contemplated, pending or threatened
action, suit or proceeding, civil, criminal, administrative or
investigative, other than an action by or in the right of the corporation,
to which he is or may be made a party by reason of being or having been
such Director, Officer, or Employee of the Corporation or having served at
the Corporation's request as such director, officer, partner, member or
employee of any other business organization or association, or in
connection with any appeal therein, provided a
-4-
<PAGE> 40
determination is made by majority vote of a disinterested quorum of the
Board of Directors (a) that such a person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and (b) that, in any matter the subject of
criminal action, suit or proceeding, such person had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself create a
presumption that the person did not act in good faith in any manner which
he reasonably believed to be in or not opposed to the best interests of
the Corporation, and with respect to any criminal action or proceeding, he
had reasonable cause to believe that his conduct was unlawful. Such right
of indemnification shall not be deemed exclusive of any other rights to
which such person may be entitled. The manner by which the right to
indemnification shall be determined in the absence of a disinterested
quorum of the Board of Directors shall be set forth in the Code of
Regulations or in such other manner as permitted by law. Each former,
present, and future Director, Officer or Employee of the Corporation (and
his heirs, executors or administrators) who serves at the Corporation's
request as a director, officer, partner, member or employee of another
corporation, partnership or business organization or association of any
type whatsoever shall be indemnified by the Corporation against reasonable
expenses, including attorneys' fees, actually and reasonably incurred by
him in connection with the defense or settlement of any contemplated,
pending or threatened action, suit or proceeding, by or in the right of
the Corporation to procure a judgment in its favor, to which he is or may
be a party by reason of being or having been such Director, Officer or
Employee of the Corporation or having served at the Corporation's request
as such director, officer, partner, member or employee of any other
business organization or association, or in connection with any appeal
therein, provided a determination is made by majority vote of a
disinterested quorum of the Board of Directors (a) that such person was
not, and has not been adjudicated to have been negligent or guilty of
misconduct in the performance of his duty to the Corporation or to such
other business organization or association, and (b) that such person acted
in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation. Such right of
indemnification shall not be deemed exclusive of any other rights to which
such person may be entitled. The manner by which the right of
indemnification shall be determined in the absence of a disinterested
quorum of the Board of Directors shall be as set forth in the Code of
Regulations or in such other manner as permitted by law.
In addition, Article XII of the Depositor's Code of Regulations states as
follows:
If any director, officer or employee of the Corporation may be entitled to
indemnification by reason of Article Sixth of the Amended Articles of
Corporation, indemnification shall be made upon either (a) a determination
in writing of the majority of disinterested directors present, at a
meeting of the Board at which all disinterested directors present
constitute a quorum, that the director, officer or employee in question
was acting in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of this Corporation or of such other
business organization or association in which he served at the
Corporation's request, and that, in any matter which is the subject of a
criminal action, suit or proceeding, he had no reasonable cause to believe
that his conduct was unlawful and in an action by or in the right of the
Corporation to procure a judgment in its favor that such person was not
and has not been adjudicated to have been negligent or guilty of
misconduct in the performance of his duty to the Corporation or to such
other business organization or association; or (b) if the number of all
disinterested directors would not be sufficient at any time to constitute
a quorum, or if the number of disinterested directors present at two
consecutive meetings of the Board has not been sufficient to constitute a
quorum, a determination to the same effect as set forth in the foregoing
clause (a) shall be made in a written opinion by independent legal counsel
other than an attorney, or a firm having association with it an attorney,
who has been retained by or who has performed services for this
Corporation, or any person to be indemnified within the past five years,
or by the majority vote of the policyholders, or by the Court of Common
Pleas or the court in which such action, suit or proceeding was brought.
Prior to making any such
-5-
<PAGE> 41
determination, the Board of Directors shall first have received the
written opinion of General Counsel that a number of directors sufficient
to constitute a quorum, as named therein, are disinterested directors. Any
director who is a party to or threatened with the action, suit or
proceeding in question, or any related action, suit or proceeding, or has
had or has an interest therein adverse to that of the Corporation, or who
for any other reason has been or would be affected thereby, shall not be
deemed a disinterested director and shall not be qualified to vote on the
question of indemnification. Anything in this Article to the contrary
notwithstanding, if a judicial or administrative body determines as part
of the settlement of any action, suit or proceeding that the Corporation
should indemnify a director, officer or employee for the amount of the
settlement, the Corporation shall so indemnify such person in accordance
with such determination. Expenses incurred with respect to any action,
suit or proceeding which may qualify for indemnification may be advanced
by the Corporation prior to final disposition thereof upon receipt of an
undertaking by or on behalf of the director, officer or employee to repay
such amount if it is ultimately determined hereunder that he is not
entitled to indemnification or to the extent that the amount so advanced
exceeds the indemnification to which he is ultimately determined to be
entitled.
ITEM 29. PRINCIPAL UNDERWRITERS
The principal underwriter of the Registrant's securities is Ohio National
Equities, Inc. ("ONEQ"). ONEQ is a wholly-owned subsidiary of the
Depositor. ONEQ also serves as the principal underwriter of securities issued
by Ohio National Variable Accounts A and B, other separate accounts of the
Depositor which are registered as unit investment trusts; and Ohio National
Variable Account R, a separate account of the Depositor's subsidiary, Ohio
National Life Assurance Corporation, which separate account is also registered
as a unit investment trust; and ONE Fund, Inc., an open-end investment company
of the management type.
The directors and officers of ONEQ are:
<TABLE>
<CAPTION>
Name Position with ONEQ
---- -----------------------
<S> <C>
David B. O'Maley Chairman and Director
John J. Palmer President & Chief Executive Officer and Director
Thomas A. Barefield Senior Vice President
Trudy K. Backus Vice President and Director
Joni L. Dunn Vice President & Compliance Officer
Ronald L. Benedict Secretary and Director
Barbara A. Turner Treasurer
James I. Miller II Vice President and Director
</TABLE>
-6-
<PAGE> 42
The principal business address of each of the foregoing is One Financial Way,
Cincinnati, Ohio 45242.
During the last fiscal year, ONEQ received the following commissions and other
compensation, directly or indirectly, from the Registrant:
<TABLE>
<CAPTION>
Net Underwriting Compensation
Discounts and on Redemption Brokerage
Commissions or Annuitization Commissions Compensation
- ----------- ---------------- ----------- ------------
<S> <C> <C> <C>
$91,301 None None None
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The books and records of the Registrant which are required under Section 31(a)
of the 1940 Act and Rules thereunder are maintained in the possession of the
following persons:
(1) Journals and other records of original entry:
The Ohio National Life Insurance Company ("Depositor")
One Financial Way
Cincinnati, Ohio 45242
Star Bank, N.A. ("Custodian")
425 Walnut Street
Cincinnati, Ohio 45202
(2) General and auxiliary ledgers:
Depositor and Custodian
(3) Securities records for portfolio securities:
Custodian
(4) Corporate charter, by-laws and minute books:
Registrant has no such documents.
(5) Records of brokerage orders:
Not applicable.
(6) Records of other portfolio transactions:
Custodian
(7) Records of options:
Not applicable
(8) Records of trial balances:
Custodian
-7-
<PAGE> 43
(9) Quarterly records of allocation of brokerage orders and commissions:
Not applicable
(10) Records identifying persons or group authorizing portfolio
transactions:
Depositor
(11) Files of advisory materials:
Not applicable
(12) Other records
Custodian and Depositor
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS AND REPRESENTATIONS
Representation pursuant to Section 26(e)(2)(A) of the Investment Company Act of
1940, as amended, was furnished in the Registrant's Form N-4, Post-effective
Amendment No. 5, on April 25, 1997.
-8-
<PAGE> 44
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
l940, the registrant, Ohio National Variable Account D, certifies that it meets
the requirements of Securities Act Rule 485(b) for effectiveness of this
registration statement and has caused this post-effective amendment to the
registration statement to be signed on its behalf in the City of Cincinnati and
the State of Ohio on this 23rd day of April, 1998.
OHIO NATIONAL VARIABLE ACCOUNT D
(Registrant)
By THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Depositor)
By /s/ John J. Palmer
--------------------------------------
John J. Palmer, Senior Vice President,
Strategic Initiatives
Attest:
/s/Ronald L. Benedict
- ------------------------------------
Ronald L. Benedict
Corporate Vice President, Counsel
and Secretary
As required by the Securities Act of 1933 and the Investment Company Act of
l940, the depositor, The Ohio National Life Insurance Company, has caused this
post-effective amendment to the registration statement to be signed on its
behalf in the City of Cincinnati and the State of Ohio on the 23rd day of
April, 1998.
THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Depositor)
By /s/ John J. Palmer
----------------------------------------
John J. Palmer, Senior Vice President,
Strategic Initiatives
Attest:
/s/Ronald L. Benedict
- ---------------------------------
Ronald L. Benedict
Corporate Vice President, Counsel
and Secretary
<PAGE> 45
As required by the Securities Act of 1933, this post-effective amendment to the
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ David B. O'Maley Chairman, President, April 23, 1998
- ---------------------- Chief Executive Officer
David B. O'Maley and Director
*s/ Neil A. Armstrong Director April 23, 1998
- ----------------------
Neil A. Armstrong
*s/ Dale P. Brown Director April 23, 1998
- ----------------------
Dale P. Brown
*s/ Jack E. Brown Director April 23, 1998
- ----------------------
Jack E. Brown
*s/ William R. Burleigh Director April 23, 1998
- ----------------------
William R. Burleigh
*s/ Victoria B. Buyniski Director April 23, 1998
- ----------------------
Victoria B. Buyniski
*s/ Raymond R. Clark Director April 23, 1998
- ----------------------
Raymond R. Clark
*s/ Alvin H. Crawford Director April 23, 1998
- ----------------------
Alvin H. Crawford
*s/ Bannus B. Hudson Director April 23, 1998
- ----------------------
Bannus B. Hudson
*s/ Charles S. Mechem, Jr. Director April 23, 1998
- ----------------------
Charles S. Mechem, Jr.
Director
- ----------------------
James F. Orr
*s/ Oliver W. Waddell Director April 23, 1998
- ----------------------
Oliver W. Waddell
</TABLE>
<PAGE> 46
<TABLE>
<CAPTION>
<S> <C> <C>
<FN>
*By s/ John J. Palmer
----------------------------
John J. Palmer, Attorney in Fact pursuant to Powers of Attorney, copies
of which are filed as exhibits to the Registrant's registration statement.
</TABLE>
<PAGE> 47
INDEX OF CONSENTS AND EXHIBITS
<TABLE>
<CAPTION>
Page Number in
Exhibit Sequential
Number Description Numbering System
- ------ ----------- ----------------
<S> <C>
Consent of KPMG Peat Marwick LLP
</TABLE>
<PAGE> 48
INDEPENDENT AUDITOR'S CONSENT
The Board of Directors
The Ohio National Life Insurance Company
The Contract Owners
Ohio National Variable Account D:
We consent to the inclusion of our reports included herein and to the reference
to our firm under the heading "Independent Certified Public Accountants" in the
Statement of Additional Information.
KPMG Peat Marwick LLP
Cincinnati, Ohio
April 23, 1998
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<TABLE> <S> <C>
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<CIK> 0000927140
<NAME> OHIO NATIONAL VARIABLE ACCOUNT D
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<NAME> CORE GROWTH
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<S> <C>
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<TABLE> <S> <C>
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<CIK> 0000927140
<NAME> OHIO NATIONAL VARIABLE ACCOUNT D
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<NUMBER> 11
<NAME> GROWTH & INCOME
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<S> <C>
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<TABLE> <S> <C>
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<CIK> 0000927140
<NAME> OHIO NATIONAL VARIABLE ACCOUNT D
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<NUMBER> 12
<NAME> S&P 500 INDEX
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<S> <C>
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<TABLE> <S> <C>
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<CIK> 0000927140
<NAME> OHIO NATIONAL VARIABLE ACCOUNT D
<SERIES>
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<NAME> SOCIAL AWARENESS
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<S> <C>
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