<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. 7 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 5 /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)
---
on (date), pursuant to paragraph (b)(1)(ix)
---
60 days after filing pursuant to paragraph (a)(i)
---
X on May 1, 1999 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
Montgomery, Ohio 45242
Telephone (513) 794-6514
for
TAX QUALIFIED GROUP VARIABLE ANNUITY CONTRACTS
This prospectus offers a group variable annuity contract providing accumulation
of values and payment of benefits on a variable and/or fixed basis.
Variable annuities provide contract values and lifetime annuity payments that
vary with the investment results of the Funds you choose. You cannot be sure
that account values or annuity payments will equal or exceed your contributions.
The contracts are designed for:
- - 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,
- - 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,
- - state and municipal deferred compensation plans, and
- - non-tax-qualified plans.
The minimum contribution amount is $25 per participant. You may make additional
contributions at any time, but not more often than biweekly. Generally, your
plan governs the maximum amounts that may be contributed.
You may direct the allocation of contributions to one or more (but not more than
10 variable) subaccounts of Ohio National Variable Account D ("VAD"). VAD is a
separate account of The Ohio National Life Insurance Company. The assets of VAD
are invested in shares of the Funds. See page 2 for the list of available Funds.
(See also the accompanying prospectuses of the Funds which also contain
information about other funds that are not available for these contracts.
You may withdraw all or part of the contract value to provide plan benefits at
no charge. Amounts withdrawn for any other reason may be subject to federal
income tax penalties. We may charge a withdrawal charge up to 7% of the amount
withdrawn (up to a maximum of 9% of all contributions). Your exercise of
contract rights may be subject to the terms of the qualified employee trust or
annuity plan. This prospectus contains no information about your trust or plan.
KEEP THIS PROSPECTUS FOR FUTURE REFERENCE. IT SETS FORTH THE INFORMATION ABOUT
VAD AND THE VARIABLE ANNUITY CONTRACT 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, 1999. THE
STATEMENT OF ADDITIONAL INFORMATION IS INCORPORATED HEREIN BY REFERENCE. IT IS
AVAILABLE UPON REQUEST AND WITHOUT CHARGE BY WRITING OR CALLING US AT THE ABOVE
ADDRESS. THE TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL INFORMATION IS ON
PAGE 2.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR 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 FUND PROSPECTUSES.
MAY 1, 1999
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Funds............................................. 2
Fee Table................................................... 2
Accumulation Unit Values.................................... 4
Financial Statements...................................... 6
The Ohio National Companies................................. 6
Ohio National Life........................................ 6
Ohio National Variable Account D.......................... 6
Ohio National Fund, Inc................................... 7
Mixed and Shared Funding.................................. 7
Voting Rights............................................. 7
Distribution of the Contracts............................... 8
Deductions and Expenses..................................... 8
Withdrawal Charge......................................... 8
Deduction for Administrative Expenses..................... 9
Deduction for Risk Undertakings........................... 9
Limitations on Deductions................................. 9
Transfer Fee.............................................. 9
Deduction for State Premium Tax........................... 9
Fund Expenses............................................. 9
Description of the Contracts................................ 10
Accumulation.............................................. 10
TeleAccess................................................ 12
Guaranteed Account........................................ 12
Annuity Benefits.......................................... 13
Other Contract Provisions................................. 15
Performance Data.......................................... 16
Federal Tax Status.......................................... 16
Tax-Deferred Annuities.................................... 17
STATEMENT OF ADDITIONAL INFORMATION CONTENTS
Custodian
Independent Certified Public Accountants
Underwriter
Calculation of Money Market Yield
Total Return
The Year 2000 Issue
Financial Statements for VAD and Ohio National Life
</TABLE>
<PAGE> 7
AVAILABLE FUNDS
<TABLE>
<S> <C>
ADVISER/SUBADVISER
Ohio National Investments, Inc.
OHIO NATIONAL FUND INC. Ohio National Investments, Inc.
Equity Portfolio Ohio National Investments, Inc.
Money Market Portfolio Ohio National Investments, Inc.
Bond Portfolio Federated Global Investment Management
Omni Portfolio (a flexible portfolio Corp.
fund) Federated Global Investment Management
International Portfolio Corp.
International Small Company Portfolio T. Rowe Price Associates, Inc.
Capital Appreciation Portfolio Founders Asset Management LLC
Small Cap Portfolio Strong Capital Management, Inc.
Aggressive Growth Portfolio Pilgrim Baxter & Associates, Ltd.
Core Growth Portfolio Robertson Stephens Investment Management,
Growth & Income Portfolio L.P.
S&P 500 Index Portfolio Ohio National Investments, Inc.
Social Awareness Portfolio Ohio National Investments, Inc.
</TABLE>
FEE TABLE
<TABLE>
<CAPTION>
CONTRACT YEAR
OF SURRENDER PERCENTAGE
CONTRACTOWNER TRANSACTION EXPENSES OR WITHDRAWAL CHARGED
---------------------------------- ------------- ----------
<S> <C> <C>
Deferred Sales Load (as a percentage of amount withdrawn)
(Percentage varies by number of years from the establishment
of each participant's account.) (No charge for withdrawals
for plan payments.) 1 7%
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>
<TABLE>
<S> <C>
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>
2
<PAGE> 8
FUND ANNUAL EXPENSES (after fee waiver*) (as a percentage of the Fund's average
net assets)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Equity 0.53% 0.11% 0.64%
Money Market* 0.25% 0.16% 0.41%
Bond 0.58% 0.14% 0.72%
Omni 0.54% 0.11% 0.65%
International* 0.85% 0.27% 1.12%
International Small Company 1.00% 0.40% 1.40%.
Capital Appreciation 0.80% 0.13% 0.93%
Small Cap 0.80% 0.11% 0.91%
Aggressive Growth 0.80% 0.14% 0.94%
Core Growth 0.95% 0.18% 1.13%
Growth & Income 0.85% 0.12% 0.97%
S&P 500 Index 0.40% 0.09% 0.49%
Social Awareness 0.60% 0.21% 0.81%
</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 Fund, assuming 5% annual return:
<TABLE>
<CAPTION>
1 3 5 10
YEAR YEARS YEARS YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity $93 $117 $142 $232
Money Market* 90 110 131 207
Bond 93 119 146 240
Omni 92 117 143 233
International* 97 131 166 281
International Small Company 99 139 179 308
Capital Appreciation 95 125 156 262
Small Cap 95 125 155 260
Aggressive Growth 95 126 157 263
Core Growth 97 131 166 282
Growth & Income 95 127 158 266
S&P 500 Index 91 113 135 216
Social Awareness 94 122 150 249
</TABLE>
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 3 5 10
YEAR YEARS YEARS YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity $20 $62 $107 $232
Money Market* 18 55 95 207
Bond 21 65 111 240
Omni 20 63 108 233
International* 25 77 132 281
International Small Company 28 85 145 308
Capital Appreciation 23 71 122 262
Small Cap 23 71 121 260
Aggressive Growth 23 72 123 263
Core Growth 25 77 132 282
Growth & Income 24 72 124 266
S&P 500 Index 19 58 100 216
Social Awareness 22 68 116 249
</TABLE>
3
<PAGE> 9
*For the Money Market and International portfolios the investment adviser is
voluntarily waiving 0.05% of the management fees. Without those waivers, the
management fees are 0.30% for the Money Market portfolio and 0.90% for the
International portfolio.
EXAMPLE -- Without the voluntary fee waivers, if you surrendered your contract
at the end of the applicable time period, you would pay the following aggregate
expense on a $1,000 investment in each Fund, assuming 5% annual return:
<TABLE>
<CAPTION>
1 3 5 10
YEAR YEARS YEARS YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market $91 $112 $133 $213
International 97 132 168 286
</TABLE>
EXAMPLE -- Without the voluntary fee waivers, 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 3 5 10
YEAR YEARS YEARS YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market $18 $ 57 $ 98 $213
International 26 78 134 286
</TABLE>
The purpose of the above table is to help you to understand the costs and
expenses that you will bear directly or indirectly. THESE EXAMPLES SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSE. 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 be applicable to a
contract. These 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 we may offer. For further details, see Deductions and
Expenses, page 8.
ACCUMULATION UNIT VALUES
This series of group variable annuity contracts began on January 25, 1995. The
International Small Company and Aggressive Growth funds began on March 31, 1995.
The Core Growth, Growth & Income, S&P 500 Index and Social Awareness funds began
on January 3, 1997.
The net annualized yield for the Money Market fund in these contracts for the
seven days ended December 31, 1998 was 3.84%.
EQUITY
<TABLE>
<CAPTION>
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>
1995 $ 10.000000 $ 12.198167 13,287
1996 12.198167 14.243704 32,583
1997 14.243704 16.607094 74,941
1998 16.607094 17.323587 107,618
</TABLE>
MONEY MARKET
<TABLE>
<CAPTION>
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>
1995 $ 10.000000 $ 10.346422 1,732
1996 10.346422 10.735959 7,977
1997 10.735959 11.161886 32,475
1998 11.161886 11.606378 48,567
</TABLE>
4
<PAGE> 10
BOND
<TABLE>
<CAPTION>
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>
1995 $ 10.000000 $ 11.207694 1,139
1996 11.207694 11.468004 6,512
1997 11.468004 12.365430 12,237
1998 12.365430 12.837064 16,940
</TABLE>
OMNI
<TABLE>
<CAPTION>
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>
1995 $ 10.000000 $ 11.742940 13,547
1996 11.742940 13.386856 45,160
1997 13.386856 15.605553 98,309
1998 15.605553 16.095248 146,331
</TABLE>
INTERNATIONAL
<TABLE>
<CAPTION>
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>
1995 $ 10.000000 $ 11.256284 20,393
1996 11.256284 12.714297 42,439
1997 12.714297 12.810197 100,959
1998 12.810197 13.130325 110,066
</TABLE>
INTERNATIONAL SMALL COMPANY
<TABLE>
<CAPTION>
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>
1995 $ 10.000000 $ 10.780072 8,523
1996 10.780072 11.922317 13,394
1997 11.922317 13.135923 16,765
1998 13.135923 13.418205 12,900
</TABLE>
CAPITAL APPRECIATION
<TABLE>
<CAPTION>
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>
1995 $ 10.000000 $ 11.663489 39,782
1996 11.663489 13.320406 54,003
1997 13.320406 15.139212 78,535
1998 15.139212 15.820771 72,571
</TABLE>
SMALL CAP
<TABLE>
<CAPTION>
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>
1995 $ 10.000000 $ 12.909669 24,533
1996 12.909669 14.992559 39,188
1997 14.992559 16.045605 78,648
1998 16.045605 17.505914 91,751
</TABLE>
5
<PAGE> 11
AGGRESSIVE GROWTH
<TABLE>
<CAPTION>
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>
1995 $ 10.000000 $ 12.568155 3,057
1996 12.568155 12.494380 9,915
1997 12.494380 13.872097 21,702
1998 13.872097 14.760465 38,333
</TABLE>
CORE GROWTH
<TABLE>
<CAPTION>
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>
1997 $ 10.000000 $ 9.562924 12,433
1998 9.562924 10.267604 23,776
</TABLE>
GROWTH & INCOME
<TABLE>
<CAPTION>
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>
1997 $ 10.000000 $ 13.476367 11,608
1998 13.476367 14.239205 71,864
</TABLE>
S&P 500 INDEX
<TABLE>
<CAPTION>
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>
1997 $ 10.000000 $ 12.999822 26,903
1998 12.999822 16.675212 112,232
</TABLE>
SOCIAL AWARENESS
<TABLE>
<CAPTION>
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>
1997 $ 10.000000 $ 12.396349 3,506
1998 12.396349 9.490457 20,572
</TABLE>
FINANCIAL STATEMENTS
The complete financial statements of VAD and Ohio National Life, including the
Independent Auditors' Reports for them, may be found in the Statement of
Additional Information.
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. We are now ultimately owned by a mutual holding company (Ohio
National Mutual Holdings, Inc.) with the majority ownership being by our
policyholders. We write life, accident and health insurance and annuities in 47
states, the District of Columbia and Puerto Rico. Currently, we have assets in
excess of $6.5 billion and equity in excess of $600 million. Our home office is
located at One Financial Way, Montgomery, Ohio 45242.
OHIO NATIONAL VARIABLE ACCOUNT D
We established VAD 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.) 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
6
<PAGE> 12
or not realized, from assets allocated to VAD are, credited to or charged
against VAD without regard to our other income, gains or losses. The assets
maintained in VAD will not be charged with any liabilities arising out of any of
our other business. Nevertheless, all obligations arising under the contracts,
including the commitment to make annuity payments, are our general corporate
obligations. Accordingly, all of our assets are available to our meet
obligations under the contracts. VAD is registered as a unit investment trust
under the Investment Company Act of 1940.
The assets of each subaccount of VAD are invested at net asset value (without an
initial sales charge) in shares of a corresponding Fund.
OHIO NATIONAL FUND, INC.
Ohio National Fund is a mutual fund registered under the Investment Company Act
of 1940. The available Funds listed on page 2 are portfolios of Ohio National
Fund. The value of Fund investments fluctuates daily and is subject to the risk
that Fund management may not anticipate or make changes necessary in the
investments to meet changes in economic conditions.
The Funds receive investment advice, for a fee, from the investment adviser,
Ohio National Investments, Inc. The investment adviser pays these subadvisers to
manage certain Funds:
- - Federated Global Investment Management Corp. (sub-adviser to the International
and International Small Company portfolios)
- - T. Rowe Price Associates, Inc. (sub-adviser to the Capital Appreciation
portfolio)
- - Founders Asset Management LLC (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)
- - Robertson Stephens Investment Management, L.P. (sub-adviser to the Growth &
Income portfolio)
For additional information concerning the Funds, including their investment
objectives, see the Ohio National Fund prospectus. Read it carefully before
investing. The Fund prospectus contains information about other funds that are
not available for these contracts.
MIXED AND SHARED FUNDING
In addition to being offered to VAD, Fund shares are offered to our other
separate accounts for variable annuity contracts and a separate account of Ohio
National Life Assurance Corporation for variable life insurance contracts. Fund
shares may also 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 Funds. Although
neither we nor the Funds currently foresee any such disadvantage, the Board of
Directors of the Funds will monitor events to identify any material conflict
between variable life and variable annuity contract owners and to determine if
any action should be taken. That could possibly include withdrawal of VAD#s
participation in a Fund. Material conflicts could result from such things as:
- - changes in state insurance law;
- - changes in federal income tax law;
- - changes in the investment management of any Fund; or
- - differences between voting instructions given by different types of contract
owners.
VOTING RIGHTS
We will vote Fund shares held in VAD at Fund shareholders meetings in accordance
with voting instructions received from contract owners. We will determine the
number of Fund shares for which you are entitled to give instructions as
described below. This determination will be within 90 days before the
shareholders meeting. Fund proxy material
7
<PAGE> 13
and forms for giving voting instructions will be distributed to each owner. Fund
shares held in VAD, for which no timely instructions are received, will be voted
by us in proportion to the instructions that we do receive for VAD.
The number of Fund shares for which instructions may be given to us is
determined by dividing your contract value in each Fund by the net asset value
of a share of the corresponding Fund as of the same date. For variable annuities
purchased for participants, the number of Fund shares for which such
instructions may be given is determined by dividing the actuarial liability for
those variable annuities by the net asset value of a Fund 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 our insurance agents who are also registered
representatives of (a) The O. N. Equity Sales Company ("ONESCO"), a wholly-owned
subsidiary of ours, or (b) other broker-dealers that have entered into
distribution agreements with Ohio National Equities, Inc. ("ONEQ") another
wholly-owned subsidiary of ours. ONEQ 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. We pay ONEQ compensation equal to no more than 5% of
contributions. ONEQ then pays part of that amount to ONESCO and the other
broker-dealers. ONESCO and the other broker-dealers pay their registered
representatives from their own funds. Contributions on which nothing is paid to
registered representatives may not be included in amounts on which the fee will
be paid to ONEQ. If our withdrawal charge is not sufficient to recover the fee
paid to ONEQ any deficiency will be made up from general assets. These include,
among other things, any profit from the mortality and expense risk charges.
ONEQ's address is One Financial Way, Montgomery, Ohio 45242.
DEDUCTIONS AND EXPENSES
WITHDRAWAL CHARGE
There is no deduction from contributions to pay sales expense. We may assess a
withdrawal charge if you surrender the contract or withdraw part of its value
(except to make plan payments). The purpose of this 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. The withdrawal charge equals a percent of the contract value
withdrawn. This percent varies 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>
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.) If the trustee of a retirement plan qualifying under
Section 401, 403(b), or 457 of the Code uses values of at least $250,000 from an
Ohio National Life individual or group annuity to provide the first purchase
payment for a contract offered under this prospectus, this contract will be
treated (for purposes of determining the
8
<PAGE> 14
withdrawal charge) as if each existing participant's account funded with any
portion of that first purchase payment had been established at the same time as
the original annuity (or the same time the individual annuity was issued to the
participant) and as if the purchase payments made for the fixed annuity had been
made for this contract. This does not apply to participants added after this
contract is issued.
DEDUCTION FOR ADMINISTRATIVE EXPENSES
At the end of each valuation period, we deduct an amount presently equal to
0.35% on an annual basis, of the contract value. This deduction is designed to
reimburse us for administrative expenses. Examples of these expenses are
expenses are accounting, auditing, legal, contract owner services, reports to
regulatory authorities and contract owners, contract issue, etc.
DEDUCTION FOR RISK UNDERTAKINGS
We guarantee that the contract value will not be affected by any excess of sales
and administrative expenses over the deductions for them. We also guarantee that
variable annuity payments will not be affected by adverse mortality experience
or expenses.
For assuming these risks, when we determine the accumulation unit values and the
annuity unit values for each subaccount, we make a deduction from the applicable
investment results equal to 1% of the contract value on an annual basis. The
risk charge is an indivisible whole of the amount currently being deducted.
However, we believe that a reasonable allocation would be 0.40% for mortality
risk, and 0.60% for expense risk. We hope to realize a profit from this charge.
However, there will be a loss if the deduction fails to cover the actual risks
involved.
The contracts also provide for a distribution expense risk charge of no more
than 0.40%. We are not presently deducting that charge.
LIMITATIONS ON DEDUCTIONS
The contracts provide that we may reduce the deductions for administrative
expense, mortality and expense risks, and distribution expense risk at any time.
Each of these deductions may be increased, not more often than annually, and the
total of all these deductions may never exceed 2% per year.
TRANSFER FEE
We may charge a transfer fee of $5 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. We are not currently charging this fee.
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 Funds.
These are described in the Fund prospectus.
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DESCRIPTION OF THE CONTRACTS
ACCUMULATION
CONTRIBUTION PROVISIONS
The contracts provide for minimum contributions of $25 per participant. Your
plan defines the maximum contributions allowed. You may make contributions at
any time but not more often than biweekly. We may agree to modify any of these
limits.
ACCUMULATION UNITS
The contract value is measured by accumulation units. These units are credited
to the contract when you make each contribution. (See Crediting Accumulation
Units, below). The number of units remains constant between contributions, but
their dollar value varies depending upon the investment results of each Fund to
which contributions are allocated.
CREDITING ACCUMULATION UNITS
Your representative will send application forms or orders, together with the
first contribution, to our home office for acceptance. Upon acceptance, we issue
a contract and we credit the first contribution to the contract in the form of
accumulation units. If all information necessary for processing the contribution
is complete, your first contribution will be credited within two business days
after receipt. If this cannot be done within five business days, we will return
the contribution immediately unless you specifically consent to having us retain
the contribution until the necessary information is completed. After that, we
will credit the contribution within two business days. You must send any
additional contributions directly to our home office. They will then be applied
to provide that number of accumulation units (for each subaccount) determined by
dividing the amount of the contribution by the unit value next computed after we
receive the payment at our home office.
ALLOCATION OF CONTRIBUTIONS
You may allocate contributions among up to 10 variable Funds and the Guaranteed
Account. The amount allocated to any Fund or the Guaranteed Account must equal a
whole percent. You may change your allocation of future contributions at any
time by sending written notice to our home office.
ACCUMULATION UNIT VALUE AND CONTRACT VALUE
We set the accumulation unit value of each subaccount of VAD at $10 when we
allocated the first contributions for these contracts. We determine the unit
value for any later valuation period by multiplying the unit value for the
immediately preceding valuation period by the net investment factor (described
below) for such later valuation period. We determine a contract's value by
multiplying the total number of units (for each subaccount) credited to the
contract by the unit value (for such subaccount) for the current valuation
period.
NET INVESTMENT FACTOR
The net investment factor measures the investment results of each subaccount.
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 the corresponding Fund share at the end of a
valuation period, plus
(2) the per share amount of any dividends or other distributions declared
for that Fund if the "ex-dividend" date occurs during the valuation
period, plus or minus
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(3) a per share charge or credit for any taxes paid or reserved for, the
maintenance or operation of that subaccount, (no federal income taxes
apply under present law.);
(b) is the net asset value of the corresponding Fund share at the end of the
preceding valuation period; and
(c) is the deduction for administrative expenses and risk undertakings. (See
Deduction for Administrative Expenses, page 9, and Deduction for Risk
Undertakings, page 9.)
SURRENDER AND WITHDRAWAL
You may surrender (totally withdraw the value of) the contract or you may make
withdrawals from it. The withdrawal charge may apply to these transactions. The
withdrawal will be made from your values in each Fund. The amount you may
withdraw is the contract value less any withdrawal charge. We will pay you
within seven days after we receive your request. However, we may defer payments
as 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 18. For tax consequences of a withdrawal, see
Federal Tax Status, page 16.
If you request a withdrawal that includes contract values derived from
contributions that have not yet cleared the banking system, we 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:
- - for any period during which the New York Stock Exchange is closed (other than
customary weekend and holiday closings) or during which the Securities and
Exchange Commission has restricted trading on the Exchange;
- - for any period during which an emergency, as determined by the Commission,
exists as a result of which disposal of securities held in a Fund is not
reasonably practical, or it is not reasonably practical to determine the value
of a Fund's net assets; or
- - such other periods as the Commission may order to protect security holders.
TRANSFERS AMONG SUBACCOUNTS
You may transfer contract values at any time from one Fund to another. 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). We
may limit the number, frequency, method or amount of transfers. We may limit
transfers from any Fund on any one day to 1% of the previous day's total net
assets of that Fund if we or the Fund, in our discretion, believe that the Fund
might otherwise be damaged. In this case, some requested transfers will not
occur. In determining which requests to honor, scheduled transfers (under a
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. We will notify you if your requested transfer is not
made. Current SEC rules preclude us from processing at a later date those
requests that were not made. Accordingly, you would need to submit a new
transfer request in order to make a transfer that was not made because of these
limitations.
Certain third parties may offer you asset allocation or timing services for your
contract. We may choose to honor transfer requests from these third parties if
you give us a written power of attorney to do so. Fees you pay for such asset
allocation or timing services are in addition to any contract charges. WE DO NOT
ENDORSE, APPROVE OR RECOMMEND THESE SERVICES.
After purchasing an annuity, a participant may transfer annuity values among
subaccounts only 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).
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TELEACCESS
If you give us a pre-authorization form, contract and unit values and interest
rates can be checked and transfers may be made by telephoning us between 7:00
a.m. and 7:00 p.m. (Eastern time) on days we are open for business, at
1-800-366-6654, #8. You may only make one telephone transfer per day. We will
honor pre-authorized telephone transfer instructions from anyone who provides
the personal identifying information requested via TeleAccess. We will not honor
telephone transfer requests after the annuitant's death. For added security, we
send the contract owner a written confirmation of all telephone transfers on the
next business day. However, if we cannot complete a transfer as requested, our
customer service representative will contact the contract owner in writing sent
within 48 hours of the TeleAccess request. YOU MAY THINK THAT YOU HAVE LIMITED
THIS ACCESS TO YOURSELF, OR TO YOURSELF AND YOUR REPRESENTATIVE. HOWEVER, ANYONE
GIVING US THE NECESSARY IDENTIFYING INFORMATION CAN USE TELEACCESS ONCE YOU
AUTHORIZE ITS USE.
PAYMENT OF PLAN BENEFITS
At the contract owner's request, and upon receipt of due proof of a
participant's death, disability, retirement or termination of employment, we
will apply that participant's account value to provide a benefit prescribed by
the plan. No withdrawal charge will be made in connection with the payment of
these 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, a participant in the Program may not make a withdrawal
until the first of these events occurs.
GUARANTEED ACCOUNT
The Guaranteed Account guarantees a fixed return for a specified period of time
and guarantees the principal against loss. The Guaranteed Account is not
registered as an investment company. Interests in it are not subject to the
provisions or restrictions of federal securities laws. The staff of the
Securities and Exchange Commission has not reviewed the disclosures regarding
it.
The Guaranteed Account consists of all of our general assets other than those
allocated to a separate account. You may allocate contributions and contract
values between the Guaranteed Account and the Funds.
We will invest our general assets in our discretion as allowed by Ohio law. We
allocate the investment income from our general assets to those contracts having
guaranteed values.
The amount of investment income allocated to the contracts varies from year to
year in our sole discretion. However, we guarantee that we will credit interest
at a rate of not less than 3% per year, compounded annually, to contract values
allocated to the Guaranteed Account. We may credit interest at a rate in excess
of 3%, but any such excess interest credit will be in our sole discretion.
We guarantee that the guaranteed value of a contract will never be less than:
- - the amount of deposits allocated to, and transfers into, the Guaranteed
Account, plus
- - interest credited at the rate of 3% per year compounded annually, plus
- - any additional excess interest we may credit to guaranteed values, and less
- - any withdrawals and transfers from the guaranteed values, and less
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- - any withdrawal charges, state premium taxes and transfer fees.
No deductions are made from the Guaranteed Account for administrative expenses
or risk undertakings. (See Deductions and Expenses, page 8.) However, in
addition to any applicable withdrawal charge, we may assess a liquidation charge
as described below.
Contract values credited to the Guaranteed Account are allocated to an
investment cell. A cell is a partition of the Guaranteed Account by the time
period in which the contract value is credited to the Guaranteed Account (either
from a contribution or a transfer into the Guaranteed Account). Earlier cells
may be aggregated into a single cell. We credit interest to each cell at a rate
declared by us. This rate will not be reduced more than once a year. Amounts
withdrawn from or charged against a participant's account decrease the balances
in the cells within that participant's account on a last-in first-out basis.
Only when the most recently established cell's balance is zero will the next
previously established cell's balance be reduced.
We assess a liquidation charge for withdrawals made from a participant's portion
of the Guaranteed Account. This is a percent 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 we declare for the cell for new
contract contributions as of the date of withdrawal, and
y is the annual effective interest rate for the cell from which a
withdrawal is being made at the time of withdrawal.
The liquidation charge never exceeds the difference between the amount of the
participant's contract value allocated to the Guaranteed Account and the
participant's minimum Guaranteed Account value. The participant's minimum
Guaranteed Account value equals the participant's net purchase payments and
transfers allocated to the Guaranteed Account, less withdrawals and transfers
from the Guaranteed Account, accumulated at an annual effective interest rate of
3%.
The liquidation charge does not apply when the contract is discontinued because
of plan termination. The liquidation charge is not assessed when you discontinue
the contract if you elect to receive the balance in the Guaranteed Account in
six payments over a five year period. The first payment is made within 30 days
of discontinuance, equal to 1/6 of the balance. Later payments are 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 Guaranteed Account value, as of the
beginning of any contract year, may be transferred to one or more variable Funds
during that contract year. As provided by state law, we can defer the payment of
amounts withdrawn from the Guaranteed Account for up to six months from the date
we receive your written request for withdrawal.
ANNUITY BENEFITS
PURCHASING AN ANNUITY
At the contract owner's written request, we will apply a participant's account
value to purchase an annuity. You 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 our guarantee (except for option
(e), below) that we will pay annuity payments for the lifetime of the annuitant
(and any joint annuitant) in accordance with the contract's annuity rates no
matter how long the annuitant (and any joint annuitant) may live.
Other than in connection with annuity Option (e) described below, once an
annuity is purchased, the annuity cannot be surrendered for cash except that,
upon the death of the annuitant, the beneficiary may surrender the annuity for
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the commuted value of any remaining period-certain payments. Surrenders and
withdrawals may be made from Option (e) at any time.
ANNUITY OPTIONS
You 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 (the annuity has no more value after the annuitant's
death).
Option (b): Life Annuity with installment payments guaranteed for five or ten
years and then continuing 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 contingent
annuitant.
Option (d): Installment Refund Life Annuity with payments guaranteed for a
period certain and then continuing 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. This option is available for
variable annuity payments only. (Although the deduction for risk
undertakings is taken from annuity unit values, we have no
mortality risk during the annuity payout period under this
option.)
We may agree to other settlement options.
Unless you direct otherwise, when an annuity is purchased, we will apply the
participant's account values to provide annuity payments pro-rata from each Fund
in the same proportion as the participant's account values immediately before
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). This could
result in your payments being fully taxable to you. Should the IRS so rule, we
may have to tax report up to the full value of the annuity as your taxable
income.
DETERMINATION OF AMOUNT OF THE FIRST VARIABLE ANNUITY PAYMENT
To determine the first payment under a variable annuity, we apply the
participant's account value for each Fund in accordance with the contract's
purchase rate tables. The rates in those tables depend upon the annuitant's (and
any contingent annuitant's) age and sex and the option selected. The annuitant's
sex is not a factor in contracts issued to plans sponsored by employers subject
to Title VII of the Civil Rights Act of 1964 or similar state statutes. We
determine the accumulation value to be applied at the end of a valuation period
(selected by us and uniformly applied) not more than a month and a day before
participant's first annuity payment.
If the amount that would be applied under an option is less than $5,000, we will
pay the participant's account value in a single sum. If the first periodic
payment under any option would be less than $50, we may change the frequency of
payments so that the first payment is at least $50.
ANNUITY UNITS AND VARIABLE PAYMENTS
After a participant's first annuity payment, later variable annuity payments
will vary to reflect the investment performance of the selected Funds. The
amount of each payment depends on the participant's number of annuity
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units. To determine the number of annuity units for each Fund, divide the dollar
amount of the first annuity payment from each Fund by the value of that Fund's
annuity unit. This number of annuity units remains constant for any annuity
unless the annuitant transfers among Funds.
The annuity unit value for each subaccount was set at $10 for the valuation
period when the first variable annuity was calculated for each subaccount. The
annuity unit value for each later valuation period equals the annuity unit value
for the immediately preceding valuation period multiplied by the net investment
factor (see page 9) for such later 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 later subsequent variable annuity payment equals your
constant number of annuity units for each Fund 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 stay 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 Funds on which variable annuity payments are
based. On at least 60 days written notice to our home office, we will change
that portion of the periodic variable annuity payment as you direct to reflect
the investment results of different Funds. The annuity payment immediately after
a change will be the amount that would have been paid without the change. Later
payments will reflect the new mix of Funds.
OTHER CONTRACT PROVISIONS
ASSIGNMENT
Amounts payable in settlement of a contract may not be commuted, anticipated,
assigned or otherwise encumbered, or pledged as loan collateral to anyone other
than us. To the extent permitted by law, such amounts are not subject to any
legal process to pay any claims against an annuitant before annuity payments
begin. The owner of a tax-qualified contract may not, but the owner of a
non-tax-qualified contract may, collaterally assign the contract before the
annuity payout date. Ownership of a tax-qualified contract may not be
transferred except to:
- - the annuitant,
- - a trustee or successor trustee of a pension or profit-sharing trust which is
qualified under Section 401 of the Code,
- - the employer of the annuitant provided that the contract after transfer is
maintained under the terms of a retirement plan qualified under Section 403(a)
of the Code for the benefit of the annuitant, or
- - as otherwise permitted by laws and regulations governing plans for which the
contract may be issued.
PERIODIC REPORTS
Each six months we will send you a statement showing the number of accumulation
units credited to the contract by Fund and the value of each unit as of the end
of the last half year. In addition, as long as the contract remains in effect,
we will forward any periodic Fund reports.
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SUBSTITUTION FOR FUND SHARES
If investment in a Fund is no longer possible or we believe it is inappropriate
to the purposes of the contract, we may substitute one or more other funds.
Substitution may be made as to both existing investments and the investment of
future contributions. However, no substitution will be made until we receive any
necessary approval of the Securities and Exchange Commission. We may also add
other Funds as eligible investments of VAD.
CONTRACT OWNER INQUIRIES
Direct any questions 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
We may advertise performance data for the various Funds showing the percentage
change in unit values based on the performance of the applicable Fund over a
period of time (usually a calendar year). We determine the percentage change by
dividing the increase (or decrease) in value for the unit by the unit value at
the beginning of the period. This percent reflects the deduction of any
asset-based contract charges but does not reflect the deduction of any
applicable withdrawal charge. The deduction of a withdrawal charge would reduce
any percentage increase or make greater any percentage decrease.
Advertising may also include average annual total return figures calculated as
shown in the Statement of Additional Information. The average annual total
return figures reflect the deduction of applicable withdrawal charges as well as
applicable asset-based charges.
We 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 Funds.
FEDERAL TAX STATUS
The following discussion of federal income tax treatment of amounts received
under a variable annuity contract does not cover all situations or issues. It is
not intended as tax advice. Consult a qualified tax adviser for application of
law to your circumstances. Tax laws can change, even for contracts that have
already been issued. Tax law revisions, with unfavorable consequences, could
have retroactive effect on previously issued contracts or on later voluntary
transactions in previously issued contracts.
We are 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, our operations, VAD is not separately taxed as a "regulated
investment company" under Subchapter M of the Code.
As to tax-qualified contracts, the law does not now provide for payment of
federal income tax on dividend income or capital gains distributions from Fund
shares held in VAD or upon capital gains realized by VAD on redemption of Fund
shares. When a non-tax-qualified contract is issued in connection with a
deferred compensation plan or arrangement, all rights, discretions and powers
relative to the contract are vested in the contract owner and participants must
look only to the contract owner for the payment of deferred compensation
benefits. Generally, in that case, an annuitant will have no "investment in the
contract" and amounts received by participants from the contract owner under a
deferred compensation arrangement will be taxable in full as ordinary income in
the years participants receive the payments.
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The contracts 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 contract value is not taxable to you as the owner
or annuitant until you receive it, either in the form of annuity payments, as
contemplated by the contract, or in some other form of distribution. The owner
of a non-tax-qualified contract must be a natural person for this purpose. With
certain exceptions, where the owner of a non-tax-qualified contract is a
non-natural person (corporation, partnership or trust) any increase in the
accumulation value of the contract attributable to purchase payments made after
February 28, 1986 will be treated as ordinary income received or accrued by the
contract owner during the current tax year.
When annuity payments begin each payment is taxable under Section 72 of the Code
as ordinary income in the year of receipt if you have neither paid any portion
of the contributions nor 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, all further annuity payments will be included in that annuitant's
taxable income.
If a participant elects to receive his or her 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:
- - received on or after the taxpayer reaches age 59 1/2;
- - made to a beneficiary on or after the death of the annuitant;
- - attributable to the taxpayer's becoming disabled;
- - made as a series of substantially equal periodic payments for the life of the
annuitant (or joint lives of the annuitant and beneficiary);
- - from a contract that is a qualified funding asset for purposes of a structured
settlement;
- - 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; or
- - incident to divorce.
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. A participant's failure to provide his or her taxpayer
identification number will automatically subject any payments under the contract
to withholding.
TAX-DEFERRED ANNUITIES
Under the provisions of Section 403(b) of the Code, employees may exclude from
their gross income contributions made for annuity contracts purchased for them
by public educational institutions and certain tax-exempt organizations which
are described in Section 501(c)(3) of the Code. They may make this exclusion to
the extent that the
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aggregate contributions plus any other amounts contributed to purchase a
contract and toward benefits under qualified retirement plans do not exceed
their exclusion allowance as determined 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,
for a salary reduction agreement under Section 403(b) of the Code, distributions
may be paid only when the employee:
- - attains age 59 1/2,
- - separates from the employer's service,
- - dies,
- - becomes disabled as defined in the Code, or
- - incurs a financial hardship as defined in the Code.
In the case of hardship, cash distributions may not exceed the amount of
contributions. These restrictions do not affect rights to transfer investments
among the Funds and do not limit the availability of exchanges.
QUALIFIED PENSION OR PROFIT-SHARING PLANS
Under present law, contributions made by an employer or trustee, for a plan or
trust qualified under Section 401(a) or 403(a) of the Code, are generally
excludable from the employee's gross income. Any contributions made by the
employee, or which are considered taxable income to the employee in the year
such payments are made, constitute 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 begin 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. You
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 later 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.
18
<PAGE> 24
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
is required on annuity payments. However, recipients of annuity payments may
elect not to have the tax withheld. This election may be revoked at any time and
withholding would begin after that. If you do not give us your taxpayer
identification number any payments under the contract will automatically be
subject to withholding.
19
<PAGE> 25
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 26
OHIO NATIONAL VARIABLE ACCOUNT D
OF
THE OHIO NATIONAL LIFE INSURANCE COMPANY
One Financial Way
Montgomery, Ohio 45242
Telephone (513) 794-6514
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1999
This Statement of Additional Information is not a prospectus. Read it along with
the prospectus for Ohio National Variable Account D ("VAD") group variable
annuity contracts dated May 1, 1999. To get a free copy of the VAD prospectus,
write or call us at the above address.
Table of Contents
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Independent Certified Public Accountants . . . . . . . . . . . 2
Underwriter . . . . . . . . . . . . . . . . . . . . . . . . . 2
Calculation of Money Market Yield . . . . . . . . . . . . . . 3
Total Return . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Year 2000 Issue . . . . . . . . . . . . . . . . . . . . . 4
Financial Statements . . . . . . . . . . . . . . . . . . . . . 5
GROUP RETIREMENT ADVANTAGE
<PAGE> 27
CUSTODIAN
We have a custody agreement with Firstar Bank, N.A., Cincinnati, Ohio, under
which Firstar holds custody of VAD's assets. The agreement provides for Firstar
to purchase Fund shares at their net asset value determined as of the end of the
valuation period during which we receive the deposit. At our instruction,
Firstar redeems the Fund shares held by VAD at their net asset value determined
as of the end of the valuation period during which we receive or make a
redemption request. In addition, Firstar keeps appropriate records of all of
VAD's transactions in Fund shares.
The custody agreement requires Firstar to always have aggregate capital, surplus
and undivided profit of not less than $2 million. It does not allow Firstar to
resign until (a) a successor custodian bank having the above qualifications has
agreed to serve as custodian, or (b) VAD has been completely liquidated and the
liquidation proceeds properly distributed. Subject to these conditions, the
custody agreement may be terminated by either us or Firstar upon sixty days
written notice. We pay Firstar a fee for its services as custodian.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The financial statements of VAD as of December 31, 1998 and for the periods
indicated and our consolidated financial statements as of December 31, 1998 and
1997 and for the periods indicated have been included in reliance upon the
report of KPMG LLP, independent certified public accountants, also appearing
herein, and upon that firm's authority as experts in accounting and auditing.
UNDERWRITER
We offer the contracts continuously. Before May 1, 1997, The O. N. Equity Sales
Company ("ONESCO"), a wholly-owned subsidiary of ours, was the principal
underwriter of the contracts. Since May 1, 1997, the principal underwriter has
been Ohio National Equities, Inc. ("ONEQ"), another wholly-owned subsidiary of
ours. The aggregate amount of commissions paid to ONESCO and ONEQ with respect
to contracts issued by VAD, and the amounts retained by ONESCO and ONEQ, for
each of the last three years have been:
<TABLE>
<CAPTION>
ONESCO ONEQ
Aggregate Aggregate Retained
Year Commissions Commissions Commissions
---- ----------- ----------- -----------
<S> <C> <C> <C>
1998 None $195,038 None
1997 $93,634 91,301 None
1996 74,326 None None
</TABLE>
2
<PAGE> 28
CALCULATION OF MONEY MARKET YIELD
The annualized current yield of the Money Market subaccount for the seven days
ended on December 31, 1998, was 3.84%. 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 Money Market accumulation unit at
the beginning of the seven-day period, dividing the net change in value by the
beginning value to obtain the seven-day return, and multiplying the difference
by 365/7. The result is rounded to the nearest hundredth of one percent.
TOTAL RETURN
The average annual compounded rate of return for a contract for each 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).
We will up-date standardized total return data based upon Fund performance in
the subaccounts within 30 days after each calendar quarter.
In addition, we may present non-standardized total return data, using the above
formula but based upon Fund performance before the date we first offered this
series of contracts (January 25, 1995). This will be presented as if the same
charges and deductions applying to these contracts had been in effect from the
inception of each Fund.
The average annual non-standardized total returns for the contracts from the
inception of each Fund and for the one-, five- and ten-year periods ending on
December 31, 1998 (assuming surrender of the contract then) are as follows:
<TABLE>
<CAPTION>
One Five Ten From Inception
Year Years Years Inception Date
---- ----- ----- --------- ----
<S> <C> <C> <C> <C> <C>
Equity 4.31% 12.01% 11.16% 9.40% 10-06-69
Money Market 3.98% 3.71% 3.96% 5.77% 03-20-80
Bond 3.81% 4.98% 6.71% 7.04% 11-02-82
Omni 3.14% 10.26% 10.01% 10.02% 09-10-84
International 2.50% 6.59% N/A 9.85% 04-30-93
Capital Appreciation 4.50% N/A N/A 12.01% 05-01-94
Small Cap 9.10% N/A N/A 17.66% 05-01-94
International Small Company 2.15% N/A N/A 8.15% 03-31-95
Aggressive Growth 6.40% N/A N/A 10.93% 03-31-95
Core Growth 7.37% N/A N/A 1.31% 01-03-97
Growth & Income 5.66% N/A N/A 19.38% 01-03-97
S&P 500 Index 28.27% N/A N/A 29.22% 01-03-97
Social Awareness (23.44%) N/A N/A (2.61%) 01-03-97
</TABLE>
3
<PAGE> 29
THE YEAR 2000 ISSUE
We believe we have succeeded in remedying the "Year 2000" problem for all
mission critical internal computer systems and applications. Conversion testing
and implementation for those systems were completed by December 31, 1998. During
the remainder of 1999, peripheral personal computer systems will continue to be
up-graded and tested for Year 2000 implementation. While Ohio National Fund and
its investment adviser have been assured by suppliers of financial services
(including the custodians, the transfer agent and the accounting agent) that
their systems either are already compliant or will be so in sufficient time,
internal auditors intend to independently test those systems to verify their
compliance. We are also developing contingency plans to be prepared for the
possibility that one or more service providers might not be complaint. If we,
Ohio National Fund, its investment adviser or one of our service suppliers fails
to achieve timely and complete compliance, it could materially impair our
ability to conduct our business, including the ability to accurately and timely
value interests in the contracts.
4
<PAGE> 30
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements of the Registrant are included in Part B of
this Registration Statement and will be furnished in another post-effective
amendment to be filed before May 1, 1999:
Independent Auditors' Report of KPMG LLP dated February 5, 1999
Statement of Assets and Contract Owners' Equity dated December 31, 1998
Statement of Operations and Changes in Contract Owners' Equity for the
Year Ended December 31, 1998
Notes to Financial Statements dated December 31, 1998
Schedule of Changes in Unit Values for the Year Ended December 31, 1998
The following consolidated financial statements of The Depositor and its
subsidiaries are also included in Part B of this Registration Statement and
will be furnished in another post-effective amendment to be filed before May
1, 1999:
Independent Auditors' Report of KPMG LLP dated February __, 1999
Consolidated Balance Sheets dated December 31, 1998 and 1997
Consolidated Statements of Income for the Years Ended December 31, 1998,
1997 and 1996
Consolidated Statements of Equity for the Years Ended December 31, 1998,
1997 and 1996
Consolidated Statements of Cash Flows for the Years Ended December 31,
1998, 1997 and 1996
Notes to Consolidated Financial Statements dated December 31, 1998, 1997
and 1996
The following financial information is included in Part A of this Registration
Statement:
Accumulation Unit Values
Consents of the Following Persons:
Not applicable
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> 31
(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> 32
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- --------------
<S> <C>
Trudy K. Backus* Vice President, Individual Insurance Services
Thomas A. Barefield* Senior Vice President, Institutional Sales
Howard C. Becker* Senior Vice President, Individual Insurance
& Corporate Services
Ronald L. Benedict* Corporate Vice President, Counsel and
Secretary
Michael A. Boedeker* Vice President, Fixed Income Securities
Robert A. Bowen* Senior Vice President, Information Systems
Roylene M. Broadwell* Vice President & Treasurer
Joseph P. Brom* Director and 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
Ronald J. Dolan* Director and 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> 33
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- --------------
<S> <C>
Charles S. Mechem, Jr. Director
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* Director and Senior Vice President, Strategic
Initiatives
George B. Pearson, Jr.* Vice President, PGA Marketing
J. Donald Richardson* Senior Regional Vice President
D. Gates Smith* Director and Senior Vice President, Sales
Michael D. Stohler* Vice President, Mortgages and Real Estate
Stuart G. Summers* Director and Senior Vice President and General
Counsel
Dennis C. Twarogowski* Vice President, Career Marketing
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,
Montgomery, Ohio 45242.
-4-
<PAGE> 34
<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. A. Bowen
VP & Dir. S. Williams Sr. Vice Pres. D. Cook
Treasurer B. Turner Sr. Vice Pres. G. Smith
Treasurer D. Taney Vice Pres. & Treas. R. Broadwell
Compliance Director J. Dunn Vice President M. Boedeker
Secretary R. Benedict Vice President T. Backus
Vice President G. Pearson
VP K. Hanson Vice President M. Stohler
VP D. Hundley Vice Pres. J. Houser
VP J. Martin Vice President D. Twarogowski
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 DIVISIFIED 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> 35
*The principal business address for these individuals is One Financial Way,
Montgomery, 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 February 5, 1999, the Registrant's contracts were owned by 128 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> 36
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> 37
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 Operations Vice President and Treasurer
James I. Miller II Vice President and Director
</TABLE>
-6-
<PAGE> 38
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>
$195,038 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
Montgomery, Ohio 45242
Firstar 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> 39
(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> 40
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the registrant, Ohio National Variable Account D, has caused this
post-effective amendment to the registration statement to be signed on its
behalf in the City of Montgomery and the State of Ohio on this 25th day of
February, 1999.
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
1940, 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 25th day of
February, 1999.
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> 41
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, February 25, 1999
- ---------------------- Chief Executive Officer
David B. O'Maley and Director
/s/ Joseph P. Brom Director February 25, 1999
- ----------------------
Joseph P. Brom
*s/ Dale P. Brown Director February 25, 1999
- ----------------------
Dale P. Brown
*s/ Jack E. Brown Director February 25, 1999
- ----------------------
Jack E. Brown
*s/ William R. Burleigh Director February 25, 1999
- ----------------------
William R. Burleigh
*s/ Victoria B. Buyniski Director February 25, 1999
- ----------------------
Victoria B. Buyniski
*s/ Raymond R. Clark Director February 25, 1999
- ----------------------
Raymond R. Clark
s/ Ronald J. Dolan Director February 25, 1999
- ----------------------
Ronald J. Dolan
*s/ Charles S. Mechem, Jr. Director February 25, 1999
- ----------------------
Charles S. Mechem, Jr.
*s/ James F. Orr Director February 25, 1999
- ----------------------
James F. Orr
s/ John J. Palmer Director February 25, 1999
- ----------------------
John J. Palmer
s/ D. Gates Smith Director February 25, 1999
- ----------------------
D. Gates Smith
s/ Stuart G. Summers Director February 25, 1999
- ----------------------
Stuart G. Summers
*s/ Oliver W. Waddell Director February 25, 1999
- ----------------------
Oliver W. Waddell
</TABLE>
<PAGE> 42
<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> 43
INDEX OF CONSENTS AND EXHIBITS
<TABLE>
<CAPTION>
Page Number in
Exhibit Sequential
Number Description Numbering System
- ------ ----------- ----------------
<S> <C>
None
</TABLE>
