<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
140 Garden Street - Hartford, Connecticut 06154 - (203) 987-6500
PROSPECTUS -- DECEMBER 29, 1995
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INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACTS WITH FLEXIBLE PURCHASE PAYMENTS
(the "Contracts") described in this Prospectus provide for accumulation of
Contract Values and payment of annuity payments on a fixed and variable basis.
The Contracts are designed for use by individuals in retirement plans on a
Qualified or Non-Qualified basis. The minimum initial Purchase Payment is $5,000
for Non-Qualified Contracts and $2,000 for Qualified Contracts. (See Definitions
on Page 4.)
Purchase Payments for the Contracts will be allocated as specified by the
Contract Holder, to the Fixed Account and/or a segregated investment account of
C.M. Life Insurance Company (the "Company"). Under certain circumstances,
however, Purchase Payments may initially be allocated to the Money Market
Sub-Account of the Separate Account during the Right to Examine Contract Period.
(See "Highlights" on Page 6.) The Company has established a Guaranteed Minimum
Rate of interest to be credited to amounts allocated to the Fixed Account. The
segregated investment account has been designated C.M. Multi-Account A (the
"Separate Account"). The Separate Account invests in shares of Connecticut
Mutual Financial Services Series Fund I, Inc. ("CMFS Series Fund I") and
Oppenheimer Variable Account Funds ("Oppenheimer Funds"). CMFS Series Fund I is
a series fund with six (6) of its Portfolios currently available: LifeSpan
Diversified Income Portfolio, Total Return Portfolio, LifeSpan Balanced
Portfolio, LifeSpan Capital Appreciation Portfolio, Growth Portfolio, and
International Equities Portfolio. Oppenheimer Funds is a series fund with two
(2) of its Funds currently available: Oppenheimer Money Fund and Oppenheimer
Bond Fund. (See "Eligible Investments" on Page 12.)
This Prospectus and the Statement of Additional Information generally describe
only the Contract and the Separate Account, except when the Fixed Account is
specifically mentioned.
This Prospectus concisely sets forth the information a prospective investor
should know before investing. Additional information about the Contracts is
contained in the Statement of Additional Information which is available at no
charge. The Statement of Additional Information has been filed with the
Securities and Exchange Commission and is incorporated herein by reference. The
Table of Contents of the Statement of Additional Information can be found on
Page 41 of this Prospectus. For the Statement of Additional Information, call
(800) 439-7744 or write to: Connecticut Mutual Financial Services, LLC, 140
Garden Street, Hartford, Connecticut 06154 or call toll free at (800) 569-6576.
This Prospectus should be kept for future reference.
ANY INQUIRIES CAN BE MADE BY TELEPHONE OR IN WRITING TO C.M. LIFE INSURANCE
COMPANY AT ITS ANNUITY SERVICE CENTER, P.O. BOX 419204, KANSAS CITY, MO
64141-6204, (800) 569-6576 OR 301 WEST 11TH STREET, FOURTH FLOOR, KANSAS CITY,
MO 64105.
This Prospectus should be kept for future reference.
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THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
ANY FINANCIAL INSTITUTION AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
INVESTMENT IN THE CONTRACTS IS SUBJECT TO RISK THAT MAY CAUSE THE VALUE OF THE
CONTRACT OWNER'S INVESTMENT TO FLUCTUATE, AND WHEN THE CONTRACTS ARE
SURRENDERED, THE VALUE MAY BE HIGHER OR LOWER THAN THE PURCHASE PAYMENT.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Table of Contents
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<TABLE>
<CAPTION>
Page
----
<S> <C>
Definitions............................................................. 4
Highlights.............................................................. 6
Fee Table............................................................... 8
The Company............................................................. 11
The Separate Account.................................................... 11
Eligible Investments................................................ 12
Connecticut Mutual Financial Services Series Fund I, Inc............ 12
Oppenheimer Variable Account Funds.................................. 13
Voting Rights....................................................... 14
Substitution of Securities.......................................... 14
The Fixed Account....................................................... 15
Charges and Deductions.................................................. 15
Deduction for Mortality and Expense Risk Charge..................... 15
Deduction for Administrative Charge................................. 16
Deduction for Annual Contract Maintenance Charge.................... 16
Deduction for Premium and Other Taxes............................... 17
Deduction for Fund Expenses......................................... 17
Deduction for Transfer Fee.......................................... 17
Deduction for Contingent Deferred Sales Charge...................... 17
Free Withdrawal Amount.............................................. 18
Additional Free Withdrawal Amount................................... 18
The Contracts........................................................... 19
Contract Owner...................................................... 19
Joint Contract Owners............................................... 19
Annuitant........................................................... 19
Assignment.......................................................... 20
Purchase Payments and Contract Value.................................... 20
Purchase Payments................................................... 20
Allocation of Purchase Payments..................................... 20
Contract Value...................................................... 21
Accumulation Units.................................................. 21
Accumulation Unit Value............................................. 21
Transfers............................................................... 22
Transfers During the Accumulation Period............................ 22
Transfers During the Annuity Period................................. 23
Dollar Cost Averaging............................................... 23
Rebalancing Program................................................. 24
</TABLE>
Prospectus Page 2
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
<TABLE>
<CAPTION>
Page
----
Withdrawals............................................................. 25
<S> <C>
Systematic Withdrawals.............................................. 25
Suspension or Deferral of Payments.................................. 26
Terminal Illness Benefit............................................ 26
Proceeds Payable on Death............................................... 27
Death of Contract Owner During the Accumulation Period.............. 27
Death Benefit Amount During the Accumulation Period................. 27
Death Benefit Options During the Accumulation Period................ 28
Death of Contract Owner During the Annuity Period................... 28
Death of Annuitant.................................................. 28
Payment of Death Benefit............................................ 29
Beneficiary......................................................... 29
Change of Beneficiary............................................... 29
Annuity Provisions...................................................... 29
Annuity Guidelines.................................................. 29
Annuity Payments.................................................... 30
Fixed Annuity....................................................... 30
Variable Annuity.................................................... 30
Annuity Units and Payments.......................................... 31
Annuity Unit Value.................................................. 31
Annuity Options..................................................... 31
Distribution............................................................ 32
Performance Information................................................. 33
Money Market Sub-Account............................................ 33
Other Sub-Accounts.................................................. 33
Tax Status.............................................................. 34
General............................................................. 34
Diversification..................................................... 35
Multiple Contracts.................................................. 36
Tax Treatment of Assignments........................................ 36
Income Tax Withholding.............................................. 36
Tax Treatment of Withdrawals -- Non-Qualified Contracts............. 37
Qualified Plans..................................................... 37
H.R. 10 Plans....................................................... 38
Individual Retirement Annuities..................................... 38
Corporate Pension and Profit-Sharing Plans.......................... 38
Section 457 Deferred Compensation ("Section 457") Plans............. 39
Tax Treatment of Withdrawals -- Qualified Contracts................. 39
Contracts Owned by Other Than Natural Persons....................... 40
Financial Statements.................................................... 40
Legal Proceedings....................................................... 40
Table of Contents of the Statement of Additional Information............ 41
</TABLE>
Prospectus Page 3
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Definitions
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Accumulation Period The period prior to the commencement of Annuity
Payments during which Purchase Payments may be
made.
Accumulation Unit A unit of measure used to determine the value of
the Contract Owner's interest in a Sub-Account of
the Separate Account during the Accumulation
Period.
Age The age of any Contract Owner or Annuitant on
his/her birthday nearest the date for which age is
being determined. For purposes of contract issu-
ance, age shall be considered that which was
achieved on the Contract Owner's or Annuitant's
last birthday.
Annuitant The primary person upon whose life Annuity
Payments are to be made. For purposes of
applicable Contract provisions, on or after the
Annuity Date, reference to the Annuitant also
includes any joint Annuitant.
Annuity Date The date on which Annuity Payments begin.
Annuity Payments The series of payments that will begin on the
Annuity Date.
Annuity Options Options available for Annuity Payments.
Annuity Period The period which begins on the Annuity Date and
ends with the last Annuity Payment.
Annuity Reserve The assets which support a variable Annuity Option
during the Annuity Period.
Annuity Service Center The office indicated on the Cover Page of this
Prospectus to which notices, requests and Purchase
Payments must be sent. All sums payable by the
Company under a Contract are payable only at the
Annuity Service Center.
Annuity Unit A unit of measure used to determine the amount of
each Variable Annuity Payment after the Annuity
Date.
Beneficiary The person(s) or entity(ies) designated to receive
the death benefit provided by the Contract.
Contract Anniversary An anniversary of the Issue Date of the Contract.
Contract Owner The person(s) or entity(ies) entitled to the
ownership rights stated in the Contract.
Contract Value The sum of the Contract Owner's interest in the
Fixed Account and/or the Sub-Accounts of the
Separate Account during the Accumulation Period.
Contract Year The first Contract Year is the annual period which
begins on the Issue Date. Subsequent Contract
Years begin on each anniversary of the Issue Date.
Eligible Investment An investment entity into which assets of the
Separate Account will be invested.
Fixed Account An investment option within the General Account
which may be selected during the Accumulation
Period.
Prospectus Page 4
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
<TABLE>
<S> <C>
Fixed Annuity A series of payments made during the Annuity
Period which are guaranteed as to dollar amount by
the Company.
General Account The Company's general investment account which
contains all the assets of the Company with the
exception of the Separate Account and other segre-
gated asset accounts.
Issue Date The date on which the Contract became effective.
Non-Qualified Contracts Contracts issued under Non-Qualified Plans which
do not receive favorable tax treatment under
Sections 401, 408 or 457 of the Internal Revenue
Code of 1986, as amended (the "Code").
Premium Tax A tax imposed by certain states and other
jurisdictions when a Purchase Payment is made,
when Annuity Payments begin, or when a Contract is
surrendered.
Purchase Payment During the Accumulation Period, a payment made by
or on behalf of a Contract Owner with respect to
the Contract.
Qualified Contracts Contracts issued under Qualified Plans which
receive favorable tax treatment under Sections
401, 408, or 457 of the Code.
Separate Account The Company's Separate Account designated as C.M.
Multi-Account A.
Sub-Account Separate Account assets are divided into
Sub-Accounts. Assets of each Sub-Account will be
invested in shares of an available Eligible
Investment or a Portfolio or Fund of an Eligible
Investment. Currently the Eligible Investments
available for the Contracts offered hereby are
CMFS Series Fund I and Oppenheimer Funds.
Valuation Date Each day on which the Company, the New York Stock
Exchange ("NYSE") and the Fund are open for
business. See the Prospectuses for CMFS
Series Fund I.
Valuation Period The period of time beginning at the close of
business of the NYSE on each Valuation Date and
ending at the close of business for the next suc-
ceeding Valuation Date.
Variable Annuity An annuity with payments which vary as to dollar
amount in relation to the investment performance
of specified Sub-Accounts of the Separate Account.
Written Request A request or notice in writing, in a form
satisfactory to the Company, which is received by
the Annuity Service Center.
</TABLE>
Prospectus Page 5
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Highlights
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General
A Contract Owner may elect to have Purchase Payments allocated to a segregated
investment account of C.M. Life Insurance Company (the "Company") which account
has been designated C.M. Multi-Account A (the "Separate Account") or to the
Fixed Account of the Company. The Company guarantees that it will credit a
specified minimum interest rate on amounts allocated to the Fixed Account. Under
certain circumstances, however, Purchase Payments may initially be allocated to
the Money Market Sub-Account of the Separate Account (see below). The Separate
Account invests in shares of certain Portfolios of CMFS Series Fund I and in
shares of certain Funds of Oppenheimer Funds. (See "Eligible Investments" on
Page 12.) Contract Owner(s) bear the investment risk for all amounts allocated
to the Separate Account.
Right to Examine Contract
The Contract may be returned to the Company for any reason within ten (10)
calendar days (or twenty (20) calendar days of the date of receipt with respect
to the circumstances described in (c) below) after its receipt by the Contract
Owner ("Right to Examine Contract"). It may be returned to the Company at its
Annuity Service Center. When the Contract is received at the Annuity Service
Center, it will be voided as if it had never been in force. Upon its return, the
Company will refund the Contract Value next computed after receipt of the
Contract by the Company at its Annuity Service Center except in the following
circumstances in which the Company will refund the greater of Purchase Payments,
less any withdrawals, or the Contract Value: (a) where the Contract is purchased
pursuant to an Individual Retirement Annuity; (b) in those states which require
the Company to refund Purchase Payments, less withdrawals; or (c) in the case of
Contracts (including Contracts purchased pursuant to an Individual Retirement
Annuity) which are deemed by certain states to be replacing an existing annuity
or insurance contract and which require the Company to refund Purchase Payments,
less withdrawals.
With respect to the circumstances described in (a), (b) and (c) above, the
Company will allocate initial Purchase Payments to the Money Market Sub-Account
until the expiration of fifteen (15) days from the Issue Date (or twenty-five
(25) days in the case of Contracts described under (c) above). Upon the
expiration of such fifteen (15) day period (or twenty-five (25) day period
respectively), the Sub-Account value of the Money Market Sub-Account will be
allocated to the Separate Account and/or Fixed Account in accordance with any
previous election made by the Contract Owner.
Charges and Deductions
Mortality and Expense Risk Charge. Each Valuation Period, the Company deducts a
Mortality and Expense Risk Charge which is equal, on an annual basis, to 1.25%
of the average daily net asset value of the Separate Account. This charge
compensates the Company for assuming the mortality and expense risks under the
Contracts. (See "Charges and Deductions -- Deduction for Mortality and Expense
Risk Charge" on Page 15.)
Administrative Charge. Each Valuation Period, the Company deducts an
Administrative Charge which is currently equal, on an annual basis, to .15% of
the average daily net asset value of the Separate Account. This charge may be
increased but it cannot exceed .25% of the average daily net asset value of the
Separate Account. This charge compensates the Company for costs associated with
the administration of the Contracts and the Separate Account. (See "Charges and
Deductions -- Deduction for Administrative Charge" on Page 16.)
Withdrawals. During the Accumulation Period, the Contract Owner may, upon
Written Request, make a total or partial withdrawal of Contract Value.
Withdrawals may be subject to a Contingent Deferred Sales Charge. (See
"Withdrawals" on Page 25.)
Contingent Deferred Sales Charge. The Company does not deduct a sales charge
when it receives a Purchase Payment. However, if any part of
Prospectus Page 6
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Contract Value is withdrawn, a Contingent Deferred Sales Charge may be assessed
by the Company. Subject to the Free Withdrawal Amount and the Additional Free
Withdrawal Amount described below, Contract withdrawals derived from a Purchase
Payment deposited with the Company for a period of seven years or less will be
subject to a Contingent Deferred Sale Charge ranging from 7% to 1%.
Free Withdrawal Amount. A Contract Owner may withdraw amounts attributable to
positive investment results, if any, under the Contract without incurring a
Contingent Deferred Sales Charge.
Additional Free Withdrawal Amount. A Contract Owner may generally withdraw an
Additional Free Withdrawal Amount which is equal, under certain circumstances,
to 10% of Purchase Payments of Contract Value during each contract year.
Annual Contract Maintenance Charge. Currently, there is an Annual Contract
Maintenance Charge of $30 deducted on the last day of the Contract Year. This
charge may be increased but it cannot exceed $60 per Contract Year. In the event
of an increase, the Company will give Contract Owners 90 days prior notice of
the increase. However, if the Contract Value on the last day of the Contract
Year is at least $100,000, then no Annual Contract Maintenance Charge will be
deducted. If a total withdrawal is made on other than the last day of the
Contract Year and the Contract Value for the Valuation Period during which the
total withdrawal is made is less than $100,000, the full Annual Contract
Maintenance Charge will be deducted at the time of the total withdrawal. The
Annual Contract Maintenance Charge will be deducted from the Sub-Accounts and
the Fixed Account in the same proportion that the amount of the Contract Value
in each Sub-Account and the Fixed Account bears to the total Contract Value. If
the Annuity Date is not the last day of the Contract Year, then a pro-rata
portion of the Annual Contract Maintenance Charge will be deducted on the
Annuity Date. During the Annuity Period, the Annual Contract Maintenance Charge
will be deducted pro-rata from Annuity Payments regardless of Contract size and
will result in a reduction of each Annuity Payment.
Premium Taxes. Premium Taxes may be charged against Purchase Payments or
Contract Values. (See "Charges and Deductions -- Deduction for Premium and Other
Taxes" on Page 17.) The Company currently intends to advance any Premium Taxes
that may be due at the time Purchase Payments are made and then deduct a charge
for such Premium Taxes from a Contract Owner's Contract Value at the time
Annuity Payments begin or upon a total withdrawal if the Company is unable to
obtain a refund. Premium taxes generally range from 0% to 3.5%.
Transfer Fee. Under certain circumstances, a Transfer Fee may be assessed during
the Accumulation Period when a Contract Owner makes a transfer from the Fixed
Account or any Sub-Account to another Sub-Account or the Fixed Account. In
addition, a Transfer Fee may be assessed during the Annuity Period when a
Contract Owner makes a transfer from one Sub-Account to another Sub-Account or
from a Sub-Account to the General Account. The Transfer Fee is the lesser of $20
or 2% of the amount transferred. (See "Charges and Deductions -- Deduction for
Transfer Fee" on Page 17.)
Federal Income Tax Penalty
There is a ten percent (10%) federal income tax penalty applied to the income
portion of any distribution from Non-Qualified Contracts. However, the penalty
is not imposed on amounts received: (a) after the taxpayer reaches age 59 1/2;
(b) after the death of the Contract Owner; (c) if the taxpayer is totally
disabled (for this purpose disability is as defined in Section 72(m)(7) of the
Code); (d) in a series of substantially equal periodic payments made not less
frequently than annually for the life (or life expectancy) of the taxpayer and
his or her Beneficiary; (e) under an immediate annuity; or (f) which are
allocable to purchase payments made prior to August 14, 1982. For federal income
tax purposes, withdrawals are deemed to be on a last-in, first-out basis.
Separate tax withdrawal penalties and restrictions apply to Qualified Contracts.
(See "Tax Status -- Tax Treatment of Withdrawals -- Non-Qualified Contracts" on
Page 37.) For a further discussion of the taxation of the Contracts, see "Tax
Status" on Page 34.
See "Tax Status -- Diversification" for a discussion of owner control of the
underlying investments in a variable annuity contract.
Prospectus Page 7
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
The Contract
Transfers. Subject to certain conditions, Contract Owners may make unlimited
transfers between Sub-Accounts and/or the Fixed Account during the Accumulation
Period and 6 transfers per calendar year during the Annuity Period. A transfer
from the Fixed Account is limited each Contract Year to the greater of thirty
percent (30%) of the Contract Owner's Contract Value determined as of the last
day of the previous Contract Year allocated to the Fixed Account or $30,000. In
addition, a ninety (90) day restriction exists for certain types of transfers
involving the Fixed Account or the Money Market Sub-Account. The Company
reserves the right to further limit the number of transfers in the future. The
Contract provides for twelve (12) free transfers per calendar year during the
Accumulation Period and six (6) free transfers per calendar year during the
Annuity Period. Transfers made in excess of the number of free transfers will
result in the imposition of the Transfer fee. During the Annuity Period, the
Contract Owner may, once each Contract Year, make a transfer from one or more
Sub-Accounts to the General Account. However, transfers cannot be made from the
General Account to the Separate Account during the Annuity Period. (See
"Transfers" on Page 22.)
Death Benefit. Prior to the Contract Owner, or the oldest Joint Contract Owner,
or the Annuitant, if the Owner is a non-natural person, attaining age 75, the
death benefit during the Accumulation Period will be at least equal to the
Purchase Payments, less any withdrawals including any applicable charges. (See
"Proceeds Payable on Death" on Page 27 for an additional discussion.)
Annuity Options. There are six (6) Annuity Options available for the Contract
Owner to choose from. The Contract Owner may elect to have the Contract Value
applied to provide a Variable Annuity, a Fixed Annuity, or a combination Fixed
and Variable Annuity. (See "Annuity Provisions" on Page 29 for a further
discussion.)
Maximum Issue Ages. The maximum issue age is 85. This restriction applies at the
time of Contract issue and upon any change in Contract Owner or Annuitant during
the Accumulation Period and applies to both the Contract Owner and the
Annuitant. For Joint Owners all provisions which are based upon age, including
the maximum issue age, are based on the age of the older of the Joint Owners. If
the Contract is owned by a non-natural person, the Contract Owner shall mean
Annuitant.
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C.M. Multi-Account A Fee Table
(see Note 1 Below)
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Contract Owner Transaction Expenses
Transfer Fee No charge is imposed for the first 12 transfers in a
(see Note 3 below) calendar year during the Accumulation Period;
thereafter the fee is the lesser of $20 or 2% of the
amount transferred. Only 6 transfers in a calendar year
are permitted during the Annuity Period and there is no
fee for those 6 transfers.
Sales Load on $0
Purchases
Maximum Contingent 7%
Deferred Sales
Charge Computed on
Amounts Withdrawn
(as a percentage of
Contract Owner's
Purchase Payment)
(see Note 2 below)
Annual Contract 30 per Contract per Contract Year.
Maintenance Charge
(see Note 4 below)
Prospectus Page 8
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Separate Account Annual Expenses
(AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE)
Mortality and Expense Risk Charge...................... 1.25%
Administrative Charge (See Note 5 below)............... 0.15%
-----
Total Separate Account Annual Expenses................. 1.40%
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ELIGIBLE INVESTMENTS' ANNUAL EXPENSES FOR 1995
(as a percentage of the average net assets of a Portfolio)
<TABLE>
<CAPTION>
Total Fund
Management Other Operating
Fees Expenses Expenses
------------ ------------ ------------
<S> <C> <C> <C>
Oppenheimer Money Fund............. 0.450% .05 % .50 %
Oppenheimer Bond Fund.............. 0.750% .06 % .81 %
CMFS Series Fund I LifeSpan
Diversified Income Portfolio...... 0.750% 0.750% 1.50 %
CMFS Series Fund I Total Return.... 0.550% 0.040% 0.59 %
CMFS Series Fund I LifeSpan
Balanced Portfolio................ 0.850% 0.650% 1.50 %
CMFS Series Fund I LifeSpan Capital
Appreciation Portfolio............ 0.850% 0.650% 1.50 %
CMFS Series Fund I Growth
Portfolio......................... 0.625% 0.045% 0.67 %
CMFS Series Fund I International
Equity Portfolio.................. 0.980% 0.280% 1.26 %
</TABLE>
(See the Prospectuses for CMFS Fund I and Oppenheimer Funds for more
information.)
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Examples
A Contract Owner would pay the following expenses on a $1,000 investment,
assuming the entire Contract Value is allocated to the Separate Account,
assuming a 5% annual return on assets, assuming that the same Portfolio and Fund
expenses as shown above remain the same for the periods shown in the examples,
and assuming the Contract is fully surrendered at the end of each time period.
<TABLE>
<CAPTION>
Time Periods
1 Year 3 Years
---------------------------------------- ---------
<S> <C> <C>
Oppenheimer Money Fund................. $ 86 $ 112
Oppenheimer Bond Fund.................. $ 88 $ 121
CMFS Series Fund I LifeSpan Diversified
Income Portfolio...................... $ 95 $ 142
CMFS Series Fund I Total Return
Portfolio............................. $ 86 $ 115
CMFS Series Fund I LifeSpan Balanced
Portfolio............................. $ 95 $ 142
CMFS Series Fund I LifeSpan Capital
Appreciation Portfolio................ $ 95 $ 142
CMFS Series Fund I Growth Portfolio.... $ 87 $ 117
CMFS Series Fund I International Equity
Portfolio............................. $ 93 $ 135
</TABLE>
A Contract Owner would pay the following expenses assuming either 1) the
Contract is not surrendered at the end of each time period, or 2) the Contract
is annuitized at the end of each time period.
<TABLE>
<CAPTION>
Time Periods
1 Year 3 Years
---------------------------------------- ---------
<S> <C> <C>
Oppenheimer Money Fund................. $ 20 $ 63
Oppenheimer Bond Fund.................. $ 24 $ 72
CMFS Series Fund I LifeSpan Diversified
Income Portfolio...................... $ 31 $ 94
CMFS Series Fund I Total Return
Portfolio............................. $ 21 $ 66
CMFS Series Fund I LifeSpan Balanced
Portfolio............................. $ 31 $ 94
CMFS Series Fund I LifeSpan Capital
Appreciation Portfolio................ $ 31 $ 94
CMFS Series Fund I Growth Portfolio.... $ 22 $ 68
CMFS Series Fund I International Equity
Portfolio............................. $ 28 $ 86
</TABLE>
Prospectus Page 9
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Notes to Fee Table and Examples
1. The purpose of the Fee Table is to assist Contract Owners in understanding
the various costs and expenses that a Contract Owner will incur directly or
indirectly. The Examples assume an average Contract Value of $35,000. The Fee
Table reflects expenses of the Separate Account as well as the Portfolios of
the CMFS Series Fund I and the Funds of the Oppenheimer Funds. For additional
information, see "Charges and Deductions" in this Prospectus and the
Prospectuses for CMFS Series Fund I and Oppenheimer Funds.
2. A portion of a Contract Owner's Contract Value may be withdrawn each Contract
Year without the assessment of a Contingent Deferred Sales Charge (see "Free
Withdrawal Amount" on Page 18). After a Purchase Payment has been held by the
Company for seven years such Purchase Payment, may be withdrawn without
assessment of the Contingent Deferred Sales Charge. Under certain
circumstances, in the event of a terminal illness Contract Value may be
withdrawn without the assessment of a Contingent Deferred Sales Charge (see
"Terminal Illness Benefit" on Page 26). In addition, a Contingent Deferred
Sales Charge is not assessed against the payment of a death benefit.
3. Transfers made by the Company at the end of the Right to Examine Contract
period will not be counted in determining the application of the Transfer
Fee. The Transfer Fee is the lesser of $20 or 2% of the amount transferred.
All transfers made during a Valuation Period are deemed to be one transfer.
Currently, transfers made under the following circumstances will not be
counted in determining the application of the Transfer Fee: (i) transfers
made in conjunction with an approved dollar cost averaging program; and (ii)
transfers made in conjunction with the Rebalancing Program. (See "Charges and
Deductions -- Deduction for Transfer Fee" on Page 17 and "Dollar Cost
Averaging" on Page 23 and "Rebalancing Program" on Page 24.)
4. Currently, the Annual Contract Maintenance Charge is $30 each Contract Year
and is deducted on the last day of the Contract Year. This charge may be
increased but it will not exceed $60 per Contract Year. In the event of an
increase, the Company will give Contract Owners 90 days prior notice of the
increase. However, if the Contract Value on the last day of the Contract Year
is at least $100,000, then no Annual Contract Maintenance Charge will be
deducted. If a total withdrawal is made on other than the last day of the
Contract Year and the Contract Value for the Valuation Period during which
the total withdrawal is made is less than $100,000, the full Annual Contract
Maintenance Charge will be deducted at the time of the total withdrawal. The
Annual Contract Maintenance Charge will be deducted from the Fixed Account
and Sub-Accounts in the same proportion that the amount of the Contract Value
in each Sub-Account and the Fixed Account bears to the total Contract Value.
If the Annuity Date is not the last day of the Contract Year and the Contract
Value on the Annuity Date is less than $100,000, then a pro-rata portion of
the Annual Contract Maintenance Charge will be deducted on the Annuity Date.
During the Annuity Period, the Annual Contract Maintenance Charge will be
deducted pro-rata from Annuity Payments regardless of Contract size and will
result in a reduction of each Annuity Payment. (See "Charges and Deductions
-- Deduction for Annual Contract Maintenance Charge" on Page 16.) The
examples reflect the $30 Annual Contract Maintenance Fee as an annual charge
of .09% of assets, based on an anticipated average Contract Value of $35,000.
5. The current Administrative Charge is equal on an annual basis to .15% of the
average daily net asset value of the Separate Account. The Company may
increase this charge to an amount not to exceed .25% of the average daily net
asset value of the Separate Account.
6. Premium Taxes are not reflected. Premium taxes may apply. (See "Charges and
Deductions -- Deduction for Premium and Other Taxes" on Page 17.)
7. THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
Prospectus Page 10
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
The Company
- --------------------------------------------------------------------------------
C.M. Life Insurance Company (the "Company"), 140 Garden Street, Hartford,
Connecticut 06154, is a stock life insurance company. It was chartered by a
special Act of the Connecticut General Assembly on April 25, 1980. It is
principally engaged in the sale of life insurance and annuities, and is licensed
in all states except New York. The Company is a wholly-owned subsidiary of
Connecticut Mutual Life Insurance Company ("Connecticut Mutual"), the sixth
oldest life insurance company in the United States, and the first life insurance
company formed in Connecticut. Connecticut Mutual was chartered by a special Act
of the Connecticut General Assembly in 1846, and has continuously engaged in the
insurance business since that time.
On September 13, 1995, Connecticut Mutual and Massachusetts Mutual Life
Insurance Company ("MassMutual") entered into a definitive merger agreement
pursuant to which Connecticut Mutual will merge with and into MassMutual.
Pending approval by the appropriate regulatory authorities in Connecticut
(Connecticut Mutual's domiciliary state) and Massachusetts (MassMutual's
domiciliary state) and the policyholders of the respective companies, the merger
will be consummated. If finalized, MassMutual will be the surviving entity, and
Connecticut Mutual's separate corporate existence will cease. The newly formed
entity will retain the name Massachusetts Mutual Life Insurance Company. The
Company will become a wholly-owned subsidiary of the merged Company. The
proposed merger will have no effect on the rights or benefits under any
Contracts outstanding at the time of the merger.
- --------------------------------------------------------------------------------
The Separate Account
- --------------------------------------------------------------------------------
The Board of Directors of the Company adopted a resolution to establish a
segregated asset account pursuant to Connecticut insurance law on August 3,
1994. This segregated asset account has been designated C.M. Multi-Account A
(the "Separate Account"). The Company has caused the Separate Account to be
registered with the Securities and Exchange Commission as a unit investment
trust pursuant to the provisions of the Investment Company Act of 1940, as
amended.
The assets of the Separate Account are the property of the Company. However, the
assets of the Separate Account, equal to the reserves and other contract
liabilities with respect to the Separate Account, are not chargeable with
liabilities arising out of any other business the Company may conduct. Income,
gains and losses, whether or not realized, are, in accordance with the
Contracts, credited to or charged against the Separate Account without regard to
other income, gains or losses of the Company. The Company's obligations arising
under the Contracts are general obligations.
The Separate Account meets the definition of a "separate account" under federal
securities laws.
The Separate Account is divided into Sub-Accounts, with the assets of each
Sub-Account invested in one Portfolio of Connecticut Mutual Financial Services
Series Fund I, Inc. (LifeSpan Diversified Income Portfolio, Total Return
Portfolio, LifeSpan Balanced Portfolio, LifeSpan Capital Appreciation Portfolio,
Growth Portfolio, and International Equities Portfolio) or one Fund of the
Oppenheimer Variable Account Funds (Money Fund and Bond Fund). There is no
assurance that the investment objectives of any of the Portfolios will be met.
Contract Owners bear the complete investment risk for Purchase Payments
allocated to a Sub-Account. Contract Values will fluctuate in accordance with
the investment
Prospectus Page 11
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
performance of the Sub-Accounts to which Purchase Payments are allocated, and in
accor-
dance with the imposition of the fees and charges assessed under the Contracts.
- --------------------------------------------------------------------------------
Eligible Investments
The following are the current Eligible Investments and Individual Portfolios or
Funds of the Eligible Investments that can be selected as the underlying
investments of the Contract. While a brief summary of the various investment
objects is set forth below, more comprehensive information, including a
discussion of potential risk, is found in the current Prospectus for each of the
Eligible Investments which are included with this Prospectus.
- --------------------------------------------------------------------------------
Connecticut Mutual Financial Services Series Fund I, Inc.
CMFS Series Fund I is an open-end management investment company. G.R. Phelps &
Co. Inc. ("G.R. Phelps"), an investment adviser registered with the SEC under
the Investment Advisers Act of 1940, as amended, ("Investment Advisers Act") is
the investment adviser to CMFS Series Fund I, and performs sales and
administrative functions relative to the Separate Account, including the keeping
of all records not maintained by the custodian. It has been registered since
1981 as a Broker/Dealer under the Securities Exchange Act of 1934, as amended,
("1934") and as an Investment Adviser under the Investment Advisers Act. G.R.
Phelps is an indirect wholly-owned subsidiary of Connecticut Mutual. It is
located at 10 State House Square, Hartford, Connecticut, and has as its mailing
address 140 Garden Street, Hartford, Connecticut 06154.
G.R. Phelps & Company Inc. has engaged three Subadvisors to assist in the
selection of portfolio investments for the International Equity Portfolio, the
LifeSpan Diversified Income Portfolio, the LifeSpan Balanced Portfolio, and the
LifeSpan Capital Appreciation Portfolio. Scudder, Stevens & Clark ("Scudder,
Stevens") 345 Park Avenue, New York, NY 10154, the Subadvisor to the
International Equity Portfolio, has been providing investment counseling
services for over 70 years, since its founding in 1919. Scudder, Stevens
supervises assets for institutional clients, investment companies and
individuals and had over $90 billion in assets under management as of December
31, 1994. BEA Associates, 599 Lexington Avenue, 36th Floor, New York, NY 10022,
the Subadvisor to the high yield bond components of the LifeSpan Portfolios, has
been providing domestic and global fixed-income and equity investment management
services for institutional clients and mutual funds since 1984. As of December
31, 1994, BEA Associates, together with its global affiliate, had over $16
billion in assets under management. Pilgrim, Baxter & Associates ("Pilgrim
Baxter"), 1255 Drummers Lane, Wayne, PA 19087, the Subadvisor to the small cap
components of the LifeSpan Portfolios, was established in 1982 to provide
specialized equity management for institutional investors including other
investment companies. As of December 31, 1994, Pilgrim, Baxter had $4 billion in
assets under management.
G.R. Phelps provides investment advice for the remaining Portfolios available
under the Contract. See the accompanying prospectus for CMFS Series Fund I for
more information.
CMFS Series Fund I Lifespan Diversified Income Portfolio (DIVERSIFIED INCOME
PORTFOLIO)
The Diversified Income Portfolio is designed for the investor with a relatively
low tolerance for risk who is seeking current income with some long-term
inflation protection. The Diversified Income Portfolio seeks high current
income, with opportunities for capital appreciation through a strategically
allocated portfolio consisting primarily of fixed-income securities.
CMFS Series Fund I Total Return Portfolio
The investment objective of the Total Return Portfolio is to maximize over time
the return achieved from capital appreciation and income by varying the
allocation of the assets of the Portfolio among stocks, corporate bonds,
securities issued by the U.S. Government and its instrumentalities, and money
market instruments of the type acquired respectively by the Growth Portfolio,
the Income
Prospectus Page 12
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Portfolio, the Government Securities Portfolio and the Money Market Portfolio.
CMFS Series Fund I Lifespan Balanced Portfolio (BALANCED PORTFOLIO)
The Balanced Portfolio is designed for the investor seeking a blend of capital
appreciation and income. The Balanced Portfolio seeks a blend of capital
appreciation and income through a strategically allocated portfolio of equity
securities and fixed-income securities with a slightly stronger emphasis on
equity securities.
CMFS Series Fund I Lifespan Capital Appreciation Portfolio (CAPITAL APPRECIATION
PORTFOLIO)
The Capital Appreciation Portfolio is designed for the investor seeking capital
appreciation. The Capital Appreciation Portfolio seeks long-term capital
appreciation through a strategically allocated portfolio consisting primarily of
equity securities. Current income is not a primary consideration.
CMFS Series Fund I Growth Portfolio
The investment objective of the Growth Portfolio is to achieve long-term growth
of capital by investing primarily in common stocks with low price-earnings
ratios and better than anticipated earnings.
CMFS Series Fund I International Equity Portfolio
The investment objective of the International Equity Portfolio is to achieve
long-term growth of capital by investing primarily in equity securities (such as
common stocks) of non-U.S. issuers trading for the most part in non-U.S.
markets.
At a meeting of Connecticut Mutual Financial Services Series Fund I, Inc. (the
"Fund") shareholders on February 14, 1996, the shareholders approved several
changes to the management of the Fund and the CMFS Series Fund I Portfolios as a
result of the impending merger (the "Merger") between Connecticut Mutual Life
Insurance Company ("Connecticut Mutual") and Massachusetts Mutual Life Insurance
Company ("Masssachusetts Mutual"). Connecticut Mutual is the indirect parent
company of G.R. Phelps & Co., Inc. ("G.R. Phelps"), the current investment
adviser to the Portfolios. The Merger is expected to be consummated on March 1,
1996.
The shareholders have approved the following changes to the Fund's management
effective as follows:
The selection of OppenheimerFunds, Inc. ("Oppenheimer"), Two World Trade
Center, New York, NY, as the investment adviser to the Portfolios. Oppenheimer
is a registered investment adviser, which together with its affiliates, has
over $38 billion in assets under management. (EFFECTIVE IMMEDIATELY AFTER THE
CONSUMMATION OF THE MERGER.)
The rate of the investment management fee applicable to each Portfolio will
not change as a result of Oppenheimer's assumption of the management of the
Portfolios. Oppenheimer will be responsible to pay subadvisory fees directly
to the Portfolios' respective subadvisers.
The selection of Babson-Stewart Ivory International ("Babson-Stewart"), a
registered investment adviser and affiliate of Oppenheimer, as the subadviser
to the International Component of each of LifeSpan Capital Appreciation
Portfolio and Balanced Portfolio, Scudder, Stevens & Clark, Inc. ("Scudder"),
the current subadviser to the International Component of such Portfolios, will
not provide subadvisory services after the Merger. The rate of the subadvisory
fee to be paid by Oppenheimer to Babson-Stewart is less than that paid by G.R.
Phelps to Scudder. However, unlike the current Scudder fee arrangement
Babson-Stewart's subadvisory fee will not be calculated on the aggregate
assets of the Portfolios and other portfolios managed by Babson-Stewart.
(EFFECTIVE IMMEDIATELY AFTER THE CONSUMMATION OF THE MERGER.)
The election of eight (8) new directors to serve as the Fund's Board of
Directors. (EFFECTIVE ON THE 91ST DAY AFTER THE MERGER.)
- --------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
Oppenheimer Funds is an open-end management investment company. The Fund's
investment adviser is Oppenheimer Management Corporation ("Oppenheimer
Management"), which (including a subsidiary) advises investment company
portfolios having over $29 billion in assets and with more than 2.4 million
shareholder accounts. Oppenheimer Management has operated as an
Prospectus Page 13
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
investment adviser since 1959. Oppenheimer Acquisition Corp., a holding company
that is owned in part by senior officers of Oppenheimer Management and
controlled by MassMutual. Oppenheimer Management's address is Two World Trade
Center, New York, New York 10048.
Oppenheimer Money Fund. The Money Fund seeks the maximum current income from
investments in "money market" securities consistent with low capital risk and
the maintenance of liquidity. Its shares are neither insured nor guaranteed by
the U.S. government, and there is no assurance that this Fund will be able to
maintain a stable net asset value of $1.00 per share.
Oppenheimer Bond Fund. The Bond Fund seeks a high level of current income from
investment in high yield fixed-income securities rated "Baa" or better by
Moody's or "BBB" or better by Standard & Poor's. Secondarily, this Fund seeks
capital growth when consistent with its primary objective.
THERE IS NO ASSURANCE THAT ANY PORTFOLIO WILL ACHIEVE ITS STATED OBJECTIVE. More
detailed information, including a description of each Portfolio's investment
objective and policies and a description of risks involved in investing in each
of the Portfolios and each Portfolio's fees and expenses, is contained in the
prospectuses for CMFS Series Fund I and Oppenheimer Funds, current copies of
which are attached to this Prospectus. Information contained in CMFS Series Fund
I's prospectus and Oppenheimer Funds' prospectus should be read carefully before
making allocation to a Sub-Account of the Separate Account.
- --------------------------------------------------------------------------------
Voting Rights
In accordance with its view of present applicable law, the Company will vote the
shares of the Eligible Investment held in the Separate Account at special
meetings of the shareholders in accordance with instructions received from
persons having the voting interest in the Separate Account. The Company will
vote shares for which it has not received instructions, as well as shares
attributable to it, in the same proportion as it votes shares for which it has
received instructions. The Eligible Investments do not hold regular meetings of
shareholders.
The number of shares which a person has a right to vote will be determined as of
a date to be chosen by the Company not more than sixty (60) days prior to a
shareholder meeting of the Eligible Investment. Voting instructions will be
solicited by written communication at least ten (10) days prior to the meeting.
- --------------------------------------------------------------------------------
Substitution of Securities
If the shares of the Eligible Investments (or any Portfolio or Fund within an
Eligible Investment or any other funding vehicle made available under the
Contracts), are no longer available for investment by the Separate Account or,
if in the judgment of the Company's Board of Directors, further investment in
the shares should become inappropriate in view of the purpose of the Contracts,
the Company may limit further purchase of such shares or may substitute shares
of another funding vehicle for shares already purchased under the Contracts. No
substitution of securities may take place without prior approval of the
Securities and Exchange Commission and under the requirements it may impose.
Prospectus Page 14
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
The Fixed Account
- --------------------------------------------------------------------------------
The Fixed Account is an investment option within the General Account of the
Company. Because of applicable exemptive and exclusionary provisions, interests
in the Fixed Account have not been registered under the Securities Act of 1933
(the "1933 Act") nor has the Fixed Account been registered under the Investment
Company Act of 1940 (the "1940 Act"). Therefore, neither the Fixed Account nor
any interest therein is generally subject to regulation under the provisions of
the 1933 Act or the 1940 Act. Accordingly, the Company has been advised that the
staff of the Securities and Exchange Commission has not reviewed the disclosure
in this Prospectus relating to the Fixed Account.
Payments may be allocated to the Fixed Account to the extent elected by the
Contract Owner at the time such payment is made. In addition, all or part of the
Contract Owner's Contract Value may be transferred to the Fixed Account as
described under "Transfers." The Company guarantees it will credit a specified
minimum interest rate to amounts allocated to the Fixed Account.
Assets supporting amounts allocated to the Fixed Account become part of the
Company's General Account assets and are available to fund the claims of all
creditors of the Company. All of the Company's General Account assets will be
available to fund benefits under the Contracts. The Contract Owner does not
participate in the investment performance of the assets of the Company's Fixed
Account. Instead, a specified rate of interest, declared in advance, is credited
to amounts allocated to the Fixed Account. This rate is guaranteed to be at
least 3% per year ("Guaranteed Minimum Rate"). The Company may, AT ITS SOLE
DISCRETION, credit a higher rate of interest ("excess interest") for any period
specified in advance by the Company. However, the Company is not obligated to
credit interest in excess of the 3% Guaranteed Minimum Rate per year, and might
not do so. The contract owner assumes the risk that interest credited may not
exceed the guaranteed minimum rate.
Charges and Deductions
- --------------------------------------------------------------------------------
VARIOUS CHARGES AND DEDUCTIONS ARE MADE FROM THE CONTRACT VALUE AND THE SEPARATE
ACCOUNT.
THESE CHARGES AND DEDUCTIONS ARE:
Deduction for Mortality and
Expense Risk Charge
Each Valuation Period, the Company deducts a Mortality and Expense Risk Charge
which is equal, on an annual basis, to 1.25% of the average daily net asset
value of the Separate Account. The mortality risks assumed by the Company arise
from its contractual obligation to make Annuity Payments after the Annuity Date
(determined in accordance with the Annuity Option chosen by the Contract Owner)
regardless of how long all Annuitants live. This assures that neither an
Annuitant's own longevity, nor an improvement in life expectancy greater than
expected, will have any adverse effect on the Annuity Payments the Annuitant
will receive under the Contract. Further, the Company bears a mortality risk in
that it guarantees the annuity purchase rates for the Annuity Options under the
Contract whether for a Fixed Annuity or a Variable Annuity. Also, there is a
mortality risk borne by the Company with respect to the death benefit and to the
waiver of the Contingent
Prospectus Page 15
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Deferred Sales Charge upon the death of the Owner. The expense risk assumed by
the Company is that all actual expenses involved in administering the Contracts,
including Contract maintenance costs, administrative costs, mailing costs, data
processing costs, legal fees, accounting fees, filing fees and the costs of
other services may exceed the amount recovered from the Annual Contract
Maintenance Charge and the Administrative Charge.
If the Mortality and Expense Risk Charge is insufficient to cover the actual
costs, the loss will be borne by the Company. Conversely, if the amount deducted
proves more than sufficient, the excess will be a profit to the Company. The
Company expects a profit from this charge. Mortality and Expense Risk Charge is
guaranteed by the Company and cannot be increased.
- --------------------------------------------------------------------------------
Deduction for Administrative Charge
Each Valuation Period, the Company deducts an Administrative Charge which is
currently equal, on an annual basis, to 0.15% of the average daily net asset
value of the Separate Account. This charge, together with the Annual Contract
Maintenance Charge (see below), is to reimburse the Company for the expenses it
incurs in the establishment and maintenance of the Contracts and the Separate
Account. These expenses include but are not limited to: preparation of the
Contracts, confirmation statements, annual and periodic reports and statements,
maintenance of Contract Owner records, maintenance of Separate Account records,
administrative personnel costs, mailing costs, data processing costs, legal
fees, accounting fees, filing fees, the costs of other services necessary for
Contract Owner servicing and all accounting, valuation, regulatory and reporting
requirements. Since this charge is an asset-based charge, the amount of the
charge attributable to a particular Contract may have no relationship to the
administrative costs actually incurred by that Contract. The Company does not
intend to profit from this charge. This charge will be reduced to the extent
that the amount of this charge is in excess of that necessary to reimburse the
Company for its administrative expenses. Should this charge prove to be
insufficient, the Company may increase this charge but guarantees that it will
never exceed 0.25% of the average daily net asset value of the Separate Account.
If this Charge is increased, Contract Owners will be given 90 days prior notice.
Deduction for Annual Contract
Maintenance Charge
Currently, the Annual Contract Maintenance Charge is $30 each Contract Year and
is deducted on the last day of the Contract Year. This charge may be increased
but it will not exceed $60 per Contract Year. However, if the Contract Value on
the last day of the Contract Year is at least $100,000, then no Annual Contract
Maintenance Charge will be deducted. If a total withdrawal is made on other than
the last day of the Contract Year and the Contract Value for the Valuation
Period during which the total withdrawal is made is less than $100,000, the full
Annual Contract Maintenance Charge will be deducted at the time of the total
withdrawal. The Annual Contract Maintenance Charge will be deducted from the
Fixed Account and the Sub-Accounts in the same proportion that the amount of the
Contract Value in each Sub-Account and the Fixed Account bears to the total
Contract Value. If the Annuity Date is not the last day of the Contract Year and
the Contract Value on the Annuity Date is less than $100,000, then a pro-rata
portion of the Annual Contract Maintenance Charge will be deducted on the
Annuity Date. During the Annuity Period, the Annual Contract Maintenance Charge
will be deducted pro-rata from Annuity Payments regardless of Contract size and
will result in a reduction of each Annuity Payment. The Company has set this
charge at a level so that, when considered in conjunction with the
Administrative Charge (see above), it will not make a profit from the charges
assessed for administration. If this Charge is increased, Contract Owners will
be given 90 days prior notice.
Prospectus Page 16
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Deduction for Premium and Other Taxes
Any Premium Taxes relating to the Contracts may be deducted from the Purchase
Payments or Contract Value when incurred. The Company currently intends to
advance any Premium Taxes that may be due at the time Purchase Payments are made
but not deduct such Premium Taxes from Contract Value until the time Annuity
Payments begin, or upon a total withdrawal if the Company is unable to obtain a
refund. The Company will, in its sole discretion, determine when Premium Taxes
have resulted from: the investment experience of the Separate Account; receipt
by the Company of the Purchase Payments; or commencement of Annuity Payments.
The Company may, at its sole discretion, pay such Premium Taxes when due and
deduct that amount from the Contract Value at a later date. Payment at an
earlier date does not waive any right the Company may have to deduct amounts at
a later date. Premium Taxes generally range from 0% to 3.5%. The Company will
deduct any withholding taxes required by applicable law.
The Company reserves the right to establish a provision for federal income taxes
if it determines, in its sole discretion, that it will incur a tax as a result
of the operation of the Separate Account. The Company will deduct for any income
taxes incurred by it as a result of the operation of the Separate Account
whether or not there was a provision for taxes and whether or not it was
sufficient. The Company is not currently making any provision for federal income
taxes.
- --------------------------------------------------------------------------------
Deduction for Fund Expenses
There are other deductions from and expenses paid out of the assets of the Fund,
including amounts paid for advisory and management fees, which are described in
the accompanying Fund Prospectus.
Deduction for Transfer Fee
Subject to certain conditions (see "Transfers" on Page 22), Contract Owners may
transfer all or part of the Contract Owner's interests among the Sub-Accounts
and/or the Fixed Account during the Accumulation Period or during the Annuity
Period transfer interests from a Sub-Account to the General Account without the
imposition of any fee or charge if there have been no more than the number of
free transfers permitted. Contract Owners are currently not limited to any
number of transfers during the Accumulation Period and are limited to six (6)
transfers during the Annuity Period. If, during the Accumulation Period, more
than the number of free transfers per Contract Year (currently 12 per year) have
been made, the Company will deduct a Transfer Fee for each subsequent transfer
permitted. The Transfer Fee is the lesser of $20 or 2% of the amount
transferred. The Transfer Fee will be deducted from the Sub-Account(s) and/or
Fixed Account (collectively "Account(s)") from which the transfer occurred. If
the entire Account balance is transferred, the Transfer Fee will be deducted
from the amount transferred. All transfers made during a Valuation Period are
deemed to be one transfer. Currently, transfers made under the following
circumstances will not be counted in determining the application of the Transfer
Fee: (i) transfers made by the Company at the end of the Right to Examine
Contract period; (ii) transfers made in conjunction with an approved dollar cost
averaging program; (see "Dollar Cost Averaging" on Page 23) and (iii) transfers
made under the Rebalancing Program. (See "Rebalancing Program" on Page 24.)
- --------------------------------------------------------------------------------
Deduction for Contingent Deferred Sales Charge
No deduction for sales charges is made from a Purchase Payment. However, if a
withdrawal is made, a Contingent Deferred Sales Charge may be assessed by the
Company. The length of time
Prospectus Page 17
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
between the Company's acceptance of a Purchase Payment and the making of a
withdrawal determines the Contingent Deferred Sales Charge, if any. Each
Purchase Payment has its own time period for purposes of assessing a Contingent
Deferred Sales Charge. This Charge will be used to cover certain expenses
relating to the sale of the Contracts including commissions paid to sales
personnel, the costs of preparation of sales literature, other promotional costs
and acquisition expenses. A withdrawal shall be deemed to first withdraw any
positive investment results and thereafter Purchase Payments on a
first-in-first-out basis for purposes of computing the Contingent Deferred Sales
Charge.
Subject to the Free Withdrawal Amount and the Additional Free Withdrawal Amount
described below, the following table shows Contingent Deferred Sales Charges:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Contingent Deferred Sales Charge
Against Amount Withdrawn Year Applicable
- ----------------------------------- ------------------------------------------
<C> <S>
7%................................. During 1st Year since Purchase Payment
Accepted
6%................................. During 2nd Year since Purchase Payment
Accepted
5%................................. During 3rd Year since Purchase Payment
Accepted
4%................................. During 4th Year since Purchase Payment
Accepted
3%................................. During 5th Year since Purchase Payment
Accepted
2%................................. During 6th Year since Purchase Payment
Accepted
1%................................. During 7th Year since Purchase Payment
Accepted
0%................................. Thereafter
</TABLE>
- --------------------------------------------------------------------------------
The Contingent Deferred Sales Charge is assessed against the amounts remaining
in the Account from which the withdrawal occurred. If a withdrawal is made from
more than one Account, the Contingent Deferred Sales Charge is assessed against
the amounts remaining in such Accounts in the same proportion to which the
withdrawal amount bears to the total value of such Accounts. If a withdrawal
causes the entire Account value to be withdrawn, then the Contingent Deferred
Sales Charge will be assessed against the amounts remaining in the Accounts in
the same proportion in which their value bears to Contract Value. If a
withdrawal causes the entire Contract Value to be withdrawn, then the Contingent
Deferred Sales Charge will be assessed against the Contract Value withdrawn. The
Contingent Deferred Sales Charge is not imposed on a Purchase Payment after the
end of the seventh year of the Company's acceptance of such Purchase Payment,
nor is the Contingent Deferred Sales Charge imposed upon payment of the death
benefit or upon amounts applied to purchase an annuity.
Until April 30, 1997, no Contingent Deferred Sales Charge will be imposed upon
surrender of a Contract where the proceeds of such surrender are applied to the
purchase of a new group annuity Contract issued by Massachusetts Mutual Life
Insurance Company. This does not eliminate charges under the particular group
contract, and upon surrender of the group contract, charges may apply.
- --------------------------------------------------------------------------------
Free Withdrawal Amount
A Contract Owner may withdraw amounts attributable to positive investment
results, if any, under the Contract without incurring a Contingent Deferred
Sales Charge (see "Deduction for Contingent Deferred Sales Charge" above). All
withdrawals will be deemed to first withdraw any positive investment results and
thereafter Purchase Payments on a first-in-first-out basis.
- --------------------------------------------------------------------------------
Additional Free Withdrawal Amount
An "Additional Free Withdrawal Amount" is available to Contract Owners which
allows for the withdrawal of certain Contract Values without the imposition of a
Contingent Deferred Sales Charge.
Prospectus Page 18
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
The Additional Free Withdrawal Amount available to the Contract Owner is equal
to 10% of Purchase Payments remaining in the Contract on the withdrawal date
reduced by:
1. any positive investment earnings in the Contract on the date of withdrawal
(since earnings are not subject to the Contingent Deferred Sales Charge); and
2. any Free Withdrawal Amounts and Additional Free Withdrawal Amount(s)
previously taken during the current Contract Year.
There is no limit on the number of Additional Free Withdrawal Amount which a
Contract Owner may elect during any Contract Year. Withdrawals taken pursuant to
this provision will reduce the amount of Purchase Payments remaining in the
Contract on a first-in-first-out basis for purposes of computing any remaining
Contingent Deferred Sales Charge.
- --------------------------------------------------------------------------------
The Contracts
- --------------------------------------------------------------------------------
Contract Owner
The Contract Owner is the person(s) or entity(ies) entitled to ownership rights
stated in the Contract. The Contract Owner is the person designated as such on
the Issue Date, unless changed. The Company will not issue a Contract to a
person who has attained age 85 (age 80 in Pennsylvania) or older on the proposed
Issue Date ("Maximum Issue Age"). If the Contract is proposed to be issued to
Joint Contract Owners, the Company will apply the Maximum Issue Age to the
eldest proposed Joint Contract Owner.
The Contract Owner may change owners at any time prior to the Annuity Date by
Written Request. A change of Contract Owner will automatically revoke any prior
designation of Contract Owner. The change will become effective as of the date
the Written Request is received. A new designation of Contract Owner will not
apply to any payment made or action taken by the Company prior to the time it
was received. Any change of Contract Owner is subject to the Company's
underwriting rules then in effect. (See Tax Status -- General on Pages 34-35.)
- --------------------------------------------------------------------------------
Joint Contract Owners
The Contract can be owned by Joint Contract Owners. If Joint Contract Owners are
named, any Joint Contract Owner must be the spouse of the other Contract Owner
unless prohibited by applicable law or regulations. Upon the death of either
Contract Owner, the surviving spouse will be the Primary Beneficiary. Any other
Beneficiary designation on record at the time of death will be treated as a
Contingent Beneficiary unless otherwise indicated in a Written Request. Unless
otherwise specified in the application for the Contract, if there are Joint
Contract Owners both signatures will be required for all Contract Owner
transactions except telephone transfers. If the telephone transfer option is
elected and there are Joint Contract Owners, either Joint Contract Owner can
give telephone instructions.
- --------------------------------------------------------------------------------
Annuitant
The Annuitant is the person on whose life Annuity Payments are based. The
Annuitant is the person designated by the Contract Owner at the Issue Date,
unless changed prior to the Annuity Date.
The Annuitant may not be changed in a Contract which is owned by a non-natural
person. Any change of Annuitant is subject to the Company's underwriting rules
then in effect. In the case of
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C.M. Multi-Account A and C.M. Life Insurance Company
certain Qualified Contracts the Contract Owner must be the Annuitant. The
Company will not issue a Contract where the proposed Annuitant is
a person who has attained age 85 (age 80 in Pennsylvania) or older on the
proposed Issue Date ("Maximum Issue Age").
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Assignment
A Written Request specifying the terms of an assignment of the Contract must be
provided to the Annuity Service Center. Until the Written Request is received,
the Company will not be required to take notice of or be responsible for any
transfer of interest in the Contract by assignment, agreement, or otherwise.
The Company will not be responsible for the validity or tax consequences of any
assignment. Any assignment made after the death benefit has become payable will
be valid only with the Company's consent.
If the Contract is assigned, the Contract Owner's rights may only be exercised
with the consent of the assignee of record.
The consent of any Irrevocable Beneficiaries is required before assignment of
proceeds can happen.
Purchase Payments and
Contract Value
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Purchase Payments
The initial Purchase Payment is due on the Issue Date. The minimum initial
Purchase Payment the Company will accept is $5,000 for Non-Qualified Contracts
and $2,000 for Qualified Contracts. The minimum subsequent Purchase Payment the
Company will accept is $250, unless the Contract Owner has elected the automatic
investment plan option in which case the Company will accept a minimum of $100.
For Contract Owners up to Age 75 on the Issue Date, the maximum total Purchase
Payment is $1 million. For Contract Owners over Age 75 on the Issue Date, the
maximum total Purchase Payments is $500,000. For contracts issued to non-natural
persons, the maximum Purchase Payment limits will apply to the Annuitant's age.
Purchase Payments above these amounts must be preapproved by the Company. For
Joint Contract Owners, Age refers to the oldest Joint Contract Owner. The
Company reserves the right to reject any Application or Purchase Payment.
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Allocation of Purchase Payments
The allocation of the initial Purchase Payment is made in accordance with the
selection made by the Contract Owner at the time the Contract is issued, except
in the circumstances described under "Right to Examine Contract," on Page 6. In
those circumstances, the Company will allocate initial Purchase Payments to the
Money Market Sub-Account until the expiration of the Right to Examine Contract
period. Upon expiration, the Contract Value will be reallocated in accordance
with the Contract Owner's selection. Unless otherwise changed by Written Request
by the Contract Owner, subsequent Purchase Payments are allocated in accordance
with the same selection as the initial Purchase Payment. Allocation changes can
be made over the telephone if requested at the time of a telephone transfer.
There are currently no limitations on the number of Sub-Accounts that can be
selected by a Contract Owner. If allocations are made in percentages, whole
numbers must be used. If a percentage allocation is used, the smallest
percentage that can be used is 10%.
If the Purchase Payments and forms required to issue a Contract are in good
order, the initial Purchase Payment will be credited to the Contract within (2)
business days after receipt at the Annuity Service Center. Additional Purchase
Payments will be credited to the Contract as of the Valuation Period when they
are received. If the forms required to issue a Contract are not in good order
the Company will attempt to get them in
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<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
good order or the Company will return the forms and the Purchase Payment within
five (5) business days, unless it has been authorized otherwise by the
purchaser.
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Contract Value
The Contract Value is the sum of the Contract Owner's interest in the Fixed
Account and the Sub-Accounts of the Separate Account for any Valuation Date
during the Accumulation Period. It will fluctuate from one Valuation Period to
the next, and may be more or less than Purchase Payments made. The Contract
Owner's interest in a Sub-Account is determined by multiplying the number of
Accumulation Units credited to the Contract by the Accumulation Unit Value for
that Sub-Account as of the Valuation Date. The Contract Owner's interest in the
Fixed Account, if any, for any Valuation Date is equal to the sum of the values
of all Fixed Account amounts credited to the Contract on such Valuation Date.
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Accumulation Units
During the Accumulation Period, Accumulation Units shall be used to account for
all amounts allocated to or withdrawn from the Sub-Accounts of the Separate
Account as a result of Purchase Payments, withdrawals, transfers, or fees and
charges. The Company will determine the number of Accumulation Units of a
Sub-Account purchased or canceled. This will be done by dividing the amount
allocated to (or the amount withdrawn from) the Sub-Account by the dollar value
of one Accumulation Unit of the Sub-Account as of the end of the Valuation
Period during which the transaction is received at the Annuity Service Center.
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Accumulation Unit Value
The Accumulation Unit Value for each Sub-Account was arbitrarily set initially
at $10. Subsequent Accumulation Unit Values for each Sub-Account are determined
for each Valuation Period by multiplying the Accumulation Unit Value for the
immediately preceding Valuation Period by the Net Investment Factor for the
Sub-Account for the current Valuation Period.
The Net Investment Factor for each Sub-Account is determined by dividing A by B
and subtracting C where:
A is (i) the net asset value per share of the funding vehicle or portfolio of a
funding vehicle held by the Sub-Account for the current Valuation Period; plus
(ii) any dividend per share declared on behalf of such funding vehicle or
portfolio of a funding vehicle that has an ex-dividend date within the current
Valuation Period; less (iii) the cumulative charge or credit for taxes reserved
which is determined by the Company to have resulted from the operation or
maintenance of the Sub-Account.
B is the net asset value per share of the funding vehicle or portfolio held by
the Sub-Account for the immediately preceding Valuation Period.
C is the cumulative charge for the Mortality and Expense Risk Charge and for the
Administrative Charge.
The Accumulation Unit Value may increase or decrease from Valuation Period to
Valuation Period.
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C.M. Multi-Account A and C.M. Life Insurance Company
Transfers
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Transfers During the Accumulation Period
Subject to certain limitations, the Contract Owner may transfer all or part of
the Contract Owner's interest in a Sub-Account or the Fixed Account (each an
"Account" or collectively "Accounts")by Written Request. No fee or charge will
be imposed if there have been no more than the number of free transfers allowed
(currently, twelve (12) per calendar year). All transfers are subject to the
following:
1. If more than the number of free transfers have been made, the Company will
deduct a Transfer Fee (see "Charges and Deductions -- Deduction for Transfer
Fee" on Page 17) for each subsequent transfer permitted. The Transfer Fee
will be deducted from the Contract Owner's interest in the Account from which
the transfer is made. However, if the Contract Owner's entire interest in an
Account is being transferred, the Transfer Fee will be deducted from the
amount which is transferred. If Contract Values are being transferred from
more than one Account, any Transfer Fee will be allocated to those Accounts
on a pro-rata basis in proportion to the amount transferred from each
Account.
2. The minimum amount which can be transferred is $1,000 (from one or multiple
Accounts) or the Contract Owner's entire interest in the Account, if less.
This requirement is waived if the transfer is made in connection with the
Rebalancing Program. The minimum amount which must remain in a Sub-Account
after a transfer is $1,000 or $0 if the entire amount in the Sub-Account is
transferred.
3. Transfers out of the Fixed Account during any Contract Year are limited in
amount to the greater of $30,000 or thirty percent (30%) of the Contract
Owner's Contract Value allocated to the Fixed Account determined as of the
end of the previous Contract Year. Transfers out of the Fixed Account are
done on a first-in first out basis; I.E. amounts attributed to the oldest
Purchase Payment is transferred first; then amounts attributed to the next
oldest Purchase Payment is transferred; and so on.
4. Transfers between Competing Accounts are not allowed. For purposes of
transfer, the Fixed Account and the Money Market Sub-Account are considered
"Competing Accounts."
5. Other transfers involving any Competing Account are restricted for certain
periods. For a period of ninety (90) days following a transfer out of a
Competing Account, no transfers (I.E. from any Account) may be made into the
other Competing Account. In addition, for a period of ninety (90) days
following a transfer into a Competing Account, no transfers (I.E. to any
Account) may be made out of the other Competing Account.
6. The Contract provides that the Company reserves the right, at any time and
without prior notice to any party, to terminate, suspend or modify the
transfer privilege described above.
Contract Owners can elect to make transfers by telephone (except if he/she is
participating in the Rebalancing Program). To do so, Contract Owners must submit
a completed Written Request electing the telephone transfer privilege. The
Company will use reasonable procedures to confirm that instructions communicated
by telephone are genuine. If it does not, the Company may be liable for any
losses due to unauthorized or fraudulent instructions. The Company may tape
record all telephone instructions. The Company will not be liable for any loss,
liability, cost or expense incurred by the Contract Owner for acting in
accordance with such telephone instructions believed to be genuine. The
telephone transfer privilege may be discontinued at any time by the Company.
If there are Joint Contract Owners, unless the Company is informed to the
contrary, telephone instructions will be accepted from either of the Joint
Contract Owners.
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<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Transfers During the Annuity Period
During the Annuity Period, the Contract Owner may make transfers (currently, six
(6) per calendar year), by Written Request, as follows:
1. The Contract Owner may make transfers of Annuity Reserves between
Sub-Accounts, subject to any limitations imposed by the Company on the number
of transfers (currently, six (6) transfers per calendar year) that can be
made during the Annuity Period. Currently, six (6) transfers permitted per
calendar year during the Annuity Period are free (no Transfer Fee will be
imposed.) If Annuity Reserves are being transferred from more than one Sub-
Account, any Transfer Fee will be allocated to those Sub-Accounts on a
pro-rata basis in proportion to the amount transferred from each Sub-Account.
2. The Contract Owner may, once each Contract Year, make a transfer from one or
more Sub-Accounts to the General Account. The Contract Owner may not make a
transfer from the General Account to the Separate Account.
3. Transfers of Annuity Reserves between Sub-Accounts will be made by converting
the number of Annuity Units attributable to the Annuity Reserves being
transferred to the number of Annuity Units of the Sub-Account to which the
transfer is made, so that the next Annuity Payment if it were made at that
time would be the same amount that it would have been with out the transfer.
Thereafter, Annuity Payments will reflect changes in the value of the new
Annuity Units.
The amount transferred to the General Account from a Sub-Account will be
based on the Annuity Reserves for the Contract Owner in that Sub-Account.
Transfers to the General Account will be made by converting the Annuity Units
being transferred to purchase fixed Annuity Payments under the Annuity Option
in effect and based on the Age of the Annuitant at the time of the transfer.
4. The minimum amount which can be transferred is $1,000 or the Contract Owner's
entire interest in the Sub-Account, if less. The minimum amount which must
remain in a Sub-Account after a transfer is $1,000 or $0 if the entire amount
in the Sub-Account is transferred.
5. The Contract provides that the Company reserves the right, at any time and
without prior notice to any party, to terminate, suspend or modify the
transfer privilege described above.
Contract Owners can elect to make transfers by telephone. To do so, Contract
Owners must complete a prior Written Request electing the telephone transfer
privilege. The Company will use reasonable procedures to confirm that
instructions communicated by telephone are genuine. If it does not, the Company
may be liable for any losses due to unauthorized or fraudulent instructions. The
Company may tape record all telephone instructions. The Company will not be
liable for any loss, liability, cost or expense incurred by the Contract Owner
for acting in accordance with such telephone instructions believed to be
genuine. The telephone transfer privilege may be discontinued at any time by the
Company.
If there are Joint Contract Owners, unless the Company is informed to the
contrary, telephone instructions will be accepted from either of the Joint
Contract Owners.
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Dollar Cost Averaging
Dollar Cost Averaging is a program which, if elected, permits a Contract Owner
to systematically transfer on a periodic basis amounts from a selected
Sub-Account to any of the other Sub-Accounts. By allocating amounts on a
regularly scheduled basis as opposed to allocating the total amount at one
particular time, a Contract Owner may be less susceptible to the impact of
market fluctuations. The current minimum amount which may be transferred is
$250. The minimum duration of participation in any Dollar Cost Averaging program
is currently six (6) months. In order to participate in the Dollar Cost
Averaging program, a Contract Owner must have the minimum Contract Value
(currently $5,000) required in the selected Sub-Account to complete the Contract
Prospectus Page 23
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Owner's designated program. Dollar Cost Averaging is subject to all contract
restrictions regarding transfers.
If the Contract Owner is participating in the Dollar Cost Averaging program,
such transfers are not currently taken into account in determining any Transfer
Fee. However, the Company reserves the right in the future to count Dollar Cost
Averaging transfers when determining the number of transfers in a year and
impose any applicable Transfer Fees. A Contract Owner participating in the
Dollar Cost Averaging program may not also be participating in the Rebalancing
Program or in a systematic withdrawal plan. (See "Rebalancing Program" below.) A
Contract Owner participating in the Dollar Cost Averaging program may not also
make withdrawals pursuant to the Systematic Withdrawal Plan. (See "Withdrawal --
Systematic Withdrawals" on Page 25.)
Contract Owners can choose the frequency at which the Dollar Cost Averaging
transfers will be made, I.E. monthly, quarterly, semi-annually or annually.
Contract Owners will also choose the specific date when the first Dollar Cost
Averaging transfer will be made. If the date selected is less than five (5)
business days from the date the election form is received at the Annuity Service
Center, the Company may defer the first Dollar Cost Averaging transfer for one
month. If no start date has been selected, the Company will automatically start
Dollar Cost Averaging within five (5) business days after the Written Request is
received. Changes to the selections made by the Contract Owner may be made by
Written Request. The Dollar Cost Averaging option will terminate if: (i) the
total Contract Value is withdrawn; (ii) the last transfer as selected by the
Contract Owner has been made; (iii) there is insufficient Contract Value to make
the transfer; or (iv) a Written Request from the Contract Owner to terminate the
option has been received at the Annuity Service Center at least five (5)
business days prior to the next transfer date.
Except as otherwise provided, Dollar Cost Averaging is subject to the transfer
provisions of the Contract.
Dollar Cost Averaging does not assure a profit and does not protect against loss
in declining markets. Since Dollar Cost Averaging involves continuous investment
in securities regardless of fluctuating price levels of such securities,
Contract Owners should consider their financial ability to continue a Dollar
Cost Averaging Program through periods of fluctuating price levels.
There is currently no charge for participating in the Dollar Cost Averaging
program. However, the Company reserves the right to charge for this option in
the future.
Dollar Cost Averaging is not available to or from Competing Accounts.
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Rebalancing Program
From time to time the Company may make available a program during the
Accumulation Period which provides for periodic pre-authorized automatic
transfers among certain Sub-Accounts pursuant to written allocation instructions
from the Owner. Contract Owners may not participate in the Rebalancing Program
if they currently have any Purchase Payments allocated to the Fixed Account.
Transfers can be scheduled on a monthly, quarterly, semi-annual or annual basis.
All transfers must be expressed in whole percentages. Participants in the Dollar
Cost Averaging Program cannot participate in the Rebalancing Program. The Owner
can terminate the Rebalancing Program at anytime by Written Notice to the
Company. Any unscheduled transfer request will automatically terminate the
Rebalancing Program election.
Prospectus Page 24
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Withdrawals
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During the Accumulation Period, the Contract Owner may, upon a Written Request,
make a total or partial withdrawal of the Contract Withdrawal Value. The
Contract Withdrawal Value is:
1. The Contract Value as of the end of the Valuation Period during which a
Written Request for a withdrawal is received; less
2. Any applicable Premium Taxes not previously deducted; less
3. The Annual Contract Maintenance Charge, if any; less
4. Any Purchase Payments credited to the Contract when based upon checks that
have not cleared the drawer bank; less
5. Any applicable Contingent Deferred Sales Charge.
A withdrawal will result in the cancellation of Accumulation Units from each
applicable Sub-Account and/or cancellation of Fixed Account values. If the
Contract Owner makes a total withdrawal, all of the Contract Owner's rights and
interests in the Contract will terminate. The amount will be withdrawn
proportionately from the Fixed Account and each Sub-Account held under the
Contract unless otherwise directed by the Contract Owner.
The Company will pay the amount of any withdrawal within seven (7) days of
receipt of a request in good order unless the Suspension or Deferral of Payments
provision is in effect (or unless a shorter period is required under applicable
law or regulation).
Each partial withdrawal must be for at least $250 or the Contract Owner's entire
interest in the Fixed Account or applicable Sub-Account, if less. The minimum
Contract Value which must remain in the Contract after a partial withdrawal is
$5,000 for Non-Qualified Contracts and $2,000 for Qualified Contracts. The
Company reserves the right to limit the number of partial withdrawals that can
be made from a Contract. Currently, there are no limitations on the number of
partial withdrawals. Certain tax penalties and restrictions may apply to
withdrawals from Contracts. (See "Tax Status" on Page 34.)
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Systematic Withdrawals
The Company permits a Systematic Withdrawal Plan which enables a Contract Owner
to pre-authorize a periodic exercise of the contractual withdrawal rights.
Systematic withdrawals are made on any monthly date specified by the Contract
Owner (or the next following Valuation Date if the monthly date is not a
Valuation Date). If no start date is selected, the Company will automatically
begin systematic withdrawals within five (5) business days after the Written
Request is received. Contract Owners must be 59 1/2 or older and maintain a
Contract Value of at least $25,000 upon the activation of the withdrawal plan,
in order to participate in the program. Certain tax penalties and restrictions
may apply to withdrawals from the Contracts (see "Tax Status" on Page 34).
Contract Owners can choose the frequency at which withdrawals will be made, I.E.
monthly, quarterly, semi-annually or annually. Contract Owners are not permitted
to participate in the Systematic Withdrawal Plan if he/she is participating in
either the Dollar Cost Averaging program or the Rebalancing Program.
Changes to selections made by the Contract Owner may be made by Written Request.
The Systematic Withdrawal Option will terminate if: (i) the total Contract Value
is withdrawn; (ii) the last withdrawal as selected by the Contract Owner has
been made; (iii) there is insufficient Contract Value in the Fixed Account
and/or Sub-Account to complete the withdrawal; (iv) Annuity Payments have
commenced; or (v) a Written Request from
Prospectus Page 25
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
the Contract Owner to terminate the option has been received at the Annuity
Service Center at least (5) business days prior to the next withdrawal request.
All the provisions relating to withdrawals contained in the Contract are
applicable to the Systematic Withdrawal Plan. The Systematic Withdrawal Plan is
not available to Contract Owners who are currently utilizing the Automatic
Investment Plan Option or Dollar Cost Averaging Program. If a Contract Owner
terminates a Systematic Withdrawal Plan from the Fixed Account, a new Plan
involving withdrawals from the Fixed Account may not be elected during the six
(6) month period immediately following such election.
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Suspension or Deferral of Payments
The Company reserves the right to suspend or postpone payments for a withdrawal
or transfer for any period when:
1. The New York Stock Exchange is closed (other than customary weekend and
holiday closings);
2. Trading on the New York Stock Exchange is restricted;
3. An emergency exists as a result of which disposal of securities held in the
Separate Account is not reasonably practicable or it is not reasonably
practicable to determine the value of the Separate Account's net assets; or
4. During any other period when the Securities and Exchange Commission, by
order, so permits for the protection of Contract Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) and (3)
exist.
The Company reserves the right to defer the payment of amounts withdrawn from
the Fixed Account for a period not to exceed six (6) months from the date
written request for such withdrawal is received by the Company.
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Terminal Illness Benefit
If the Endorsement for Terminal Illness has been attached to the Contract, upon
Written Request, the Contract Owner may elect a Terminal Illness Benefit. The
Company will require proof that the Contract Owner is terminally ill and not
expected to live more than 12 months. This proof will include, but is not
limited to, certification by a licensed medical practitioner performing within
the scope of his/her license. The licensed medical practitioner must not be the
Contract Owner, or the parent, spouse or child of the Contract Owner.
The Terminal Illness Benefit will be paid only to the Contract Owner upon
Written Request. Payment of the Terminal Illness Benefit is determined as of the
end of the valuation Period during which the Company receives at its Annuity
Service Center the Written Request. Prior to the Contact Owner, or Joint Owner
reaching age 75, the Terminal Illness Benefit shall be the greater of:
1. The Purchase Payments, less any withdrawals including any applicable charges;
or
2. The Contract Value determined as of the end of the Valuation Period during
which the Company receives at its Annuity Service Center the Written Request;
or
3. The Contract Value on the most recent three (3) year Contract Anniversary
plus any subsequent Purchase Payments less any subsequent withdrawals and any
applicable charges.
After the Contract Owner or oldest Joint Contract Owner attains age 75, the
Terminal Illness Benefit shall be the greater of:
1. The Purchase Payments, less any withdrawals including any applicable charges;
or
2. The Contract Value determined as of the end of the Valuation Period during
which the Company receives at its Annuity Service Center the Written Request;
or
3. The Contract Value on the most recent three (3) year Contract Anniversary
prior to the Contract Owner, or the oldest Joint Contract Owner reaching age
75, plus any subsequent
Prospectus Page 26
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C.M. Multi-Account A and C.M. Life Insurance Company
Purchase Payments less any subsequent withdrawals, including any applicable
charges.
No Contingent Deferred Sales Charge shall apply with respect to any Terminal
Illness Benefit. Payment of the Terminal Illness Benefit is in full settlement
of the Company's liability under the Contract and the Contract will terminate.
If Joint Owners are named, the Age of the oldest will be used to determine the
Terminal Illness Benefit. If the Contract is owned by a non-natural person, then
Contract Owner shall mean Annuitant.
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Proceeds Payable on Death
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Death of Contract Owner During
the Accumulation Period
Upon the death of the Contract Owner or a Joint Contract Owner during the
Accumulation Period, the death benefit will be paid to the Primary Beneficiary
designated by the Contract Owner. Upon the death of a Joint Contract Owner, the
surviving Joint Contract Owner, if any, will be treated as the Primary
Beneficiary. Any other Beneficiary designation on record at the time of death
will be treated as a Contingent Beneficiary unless previously changed by Written
Request.
A Beneficiary may request that the death benefit be paid under one of the Death
Benefit Options below. If the Beneficiary is the spouse of the Contract Owner he
or she may elect to continue the Contract at the then current Contract Value
(which may be less than the Death Benefit) in his or her own name and exercise
all the Contract Owner's rights under the Contract. In the event of the
simultaneous death of Joint Contract Owners, death benefits will be determined
in accordance with state law.
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Death Benefit Amount During
the Accumulation Period
Prior to the Contract Owner, the oldest Joint Contract Owner or the Annuitant,
attaining age 75, the death benefit during the Accumulation Period will be the
greater of:
1. The Purchase Payments, less any withdrawals including any applicable charges;
or
2. The Contract Value determined as of the end of the Valuation Period during
which the Company receives at its Annuity Service Center both due proof of
death and an election of the payment method; or
3. The Contract Value on the most recent three (3) year Contract Anniversary
plus any subsequent Purchase Payments less any subsequent withdrawals
including any applicable charges.
After the Contract Owner, the oldest Joint Contract Owner, or the Annuitant
attains age 75, the death benefit during the Accumulation Period will be the
greater of:
1. The Purchase Payments, less any withdrawals including any applicable charges;
or
2. The Contract Value determined as of the end of the Valuation Period during
which the Company receives at its Annuity Service Center both due proof of
death and an election of the payment method; or
3. The Contract Value on the most recent three (3) year Contract Anniversary
prior to the Contract Owner, or the oldest Joint Contract Owner, or the
Annuitant reaching age 75, plus any subsequent Purchase Payments less any
subsequent withdrawals, including any applicable charges.
In certain states, the death benefit during the Accumulation Period will be the
Contract Value
Prospectus Page 27
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
determined and paid as of the end of the Valuation Period during which the
Company receives both due proof of death and an election of the payment method.
Contract Owners should consult their Contract for the applicable death benefit
provision.
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Death Benefit Options During
the Accumulation Period
A non-spousal Beneficiary must elect the death benefit to be paid under one of
the following options in the event of the death of the Contract Owner during the
Accumulation Period:
Option 1 -- lump sum payment of the death benefit; or
Option 2 -- the payment of the entire death benefit within five (5) years of the
date of the death of the Contract Owner; or
Option 3 -- payment of the death benefit under an Annuity Option over the
lifetime of the Beneficiary or over a period not extending beyond the life
expectancy of the Beneficiary with distribution beginning within one (1) year of
the date of death of the Contract Owner or any Joint Contract Owner.
Any portion of the death benefit not applied under Option 3 within one (1) year
of the date of the Contract Owner's death, must be distributed within five (5)
years of the date of death.
A spousal Beneficiary may elect to continue the Contract in his or her own name,
elect a lump sum payment of the death benefit or apply the death benefit to an
Annuity Option.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the Suspension or
Deferral of Payments Provision is in effect.
Payment to the Beneficiary, other than in a lump sum, may only be elected during
the sixty-day period beginning with the date of receipt by the Company of proof
of death.
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Death of Contract Owner During
the Annuity Period
If the Contract Owner or a Joint Contract Owner, who is not the Annuitant, dies
during the Annuity Period, any remaining payments under the Annuity Option
elected will continue to be made at least as rapidly as under the method of
distribution in effect at such Contract Owner's death. Upon the death of a
Contract Owner during the Annuity Period, the Beneficiary becomes the Contract
Owner.
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Death of Annuitant
Upon the death of the Annuitant, who is not a Contract Owner, during the
Accumulation Period, the Contract Owner may designate a new Annuitant, subject
to the Company's underwriting rules then in effect. If no designation is made
within 30 days of the death of the Annuitant, the Contract Owner will become the
Annuitant. If the Contract Owner is a non-natural person, the death of the
Annuitant will be treated as the death of the Contract Owner and a new Annuitant
may not be designated. (See "Death of Contract Owner During the Accumulation
Period" on Page 27.)
Upon the death of the Annuitant on or after the Annuity Date, the death benefit,
if any, will be as specified in the Annuity Option elected. Death benefits will
be paid at least as rapidly as under the method of distribution in effect at the
Annuitant's death.
Prospectus Page 28
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Payment of Death Benefit
The Company will require due proof of death before any death benefit is paid.
Due proof of death will be:
1. a certified death certificate;
2. a certified decree of a court of competent jurisdiction as to the finding of
death; or
3. any other proof satisfactory to the Company.
All death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
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Beneficiary
The Beneficiary designation in effect on the Issue Date will remain in effect
until changed. Unless the Contract Owner provides otherwise, the death benefit
will be paid in equal shares to the Beneficiary(ies) as follows:
1. to the Primary Beneficiary(ies) who survive the Contract Owner's and/or the
Annuitant's death, as applicable; or if there are none
2. to the Contingent Beneficiary(ies) who survive the Contract Owner's and/or
the Annuitant's death, as applicable; or if there are none
3. to the estate of the Contract Owner.
Beneficiaries may be named irrevocably. In that case a change of Beneficiary
requires the consent of any irrevocable Beneficiary. If an irrevocable
Beneficiary is named, the Contract Owner retains all other contractual rights.
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Change of Beneficiary
Subject to the rights of any irrevocable Beneficiary(ies), the Contract Owner
may change the Primary Beneficiary(ies) or Contingent Beneficiary(ies). A change
must be made by Written Request. The change will take effect as of the date the
notice is signed. The Company will not be liable for any payment made or action
taken before it records the change.
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Annuity Provisions
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Annuity Guidelines
Once the Contract reaches the Annuity Date, the following guidelines apply:
1. The Contract Owner may elect to have the Contract Value applied to provide a
Variable Annuity, a Fixed Annuity, or a combination Fixed and Variable Annuity.
If a combination is elected, the Contract Owner must specify what part of the
Contract Value is to be applied to the Fixed and Variable options.
2. The amount applied to an Annuity Option on the Annuity Date, excluding any
death benefit proceeds applied to an Annuity Option, is equal to the Contract
Value minus any applicable Premium Tax and Annual Contract Maintenance Charge.
3. If the amount to be applied under an Annuity Option is less than $2,000, the
Company reserves the right to pay the amount in a lump sum. If any Annuity
Payment is less than $100, the Company
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C.M. Multi-Account A and C.M. Life Insurance Company
reserves the right to change the payment basis to equivalent quarterly,
semi-annual or annual payments.
4. Contract Owners select an Annuity Date at the Issue Date. Contract Owners may
change the Annuity Date at any time prior to the Annuity Date by Written Request
30 days prior to the new Annuity Date. The Annuity Date must be the first day of
a calendar month. The Annuity Date cannot be earlier than five years after the
Issue Date. The latest permitted Annuity Date is the earlier of: (i) the 90th
birthday of the Annuitant or the oldest Joint Annuitant; (ii) the 90th birthday
of the Contract Owner or the oldest Joint Owner, or (iii) the latest date
permitted under state law.
5. If no Annuity Option has been chosen at least thirty (30) calendar days
before the Annuity Date, the Company will make payments to the Annuitant under
Option B, with 10 years of payments guaranteed. Unless specified otherwise, the
then current Contract Value allocation shall determine whether a Fixed Annuity
or Variable Annuity, or combination Fixed and Variable Annuity will be provided.
Therefore, any amounts in the Separate Account will be applied to a Variable
Annuity, and any amounts in the Fixed Account will be applied to a Fixed
Annuity. Variable Annuity payments will be based on the Sub-Account(s) selected
by the Contract Owner, or on the then current allocation of Contract Value among
the Sub-Accounts.
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Annuity Payments
The Company will make Annuity Payments beginning on the Annuity Date, provided
no death benefit has become payable and the Contract Owner has by Written
Request selected an available Annuity Option and payment schedule. Except as
otherwise agreed to by the Contract Owner and the Company, Annuity Payments will
be payable monthly. The Annuity Option and frequency of Annuity Payments may not
be changed by the Contract Owner after Annuity Payments begin. Unless the
Contract Owner specifies otherwise, the payee of the Annuity Payments shall be
the Annuitant.
If the amount of the Annuity Payment will depend on the Age or sex of the
Annuitant, the Company reserves the right to ask for satisfactory proof of the
Annuitant's (or Joint Annuitant's, if any) Age and sex. The Company reserves the
right to delay Annuity Payments until acceptable proof is received.
The Mortality and Expense Risk Charge is assessed during both the Accumulation
Period and the Annuity Period. The Company will continue to assess the Mortality
and Expense Risk Charge during payment of an Annuity Option that does not
involve life contingency even though the Company no longer bears any mortality
risk on such payment obligation.
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Fixed Annuity
A Fixed Annuity provides for payments which do not fluctuate based on investment
performance.
Fixed Annuity payments shall be determined by applying the guaranteed Annuity
Purchase Rates set forth in the Fixed Annuity Rate Tables contained in the
Contract to the portion of the Contract Value allocated to the Fixed Annuity
Option selected by the Contract Owner.
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Variable Annuity
A Variable Annuity provides for payments which may fluctuate based on the
investment performance of the Sub-Accounts of the Separate Account. Variable
Annuity Payments will be based on the Sub-Accounts Annuity Units credited to the
Variable Annuity Option.
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C.M. Multi-Account A and C.M. Life Insurance Company
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Annuity Units and Payments
The dollar amount of each Variable Annuity payment depends on the number of
Annuity Units credited to that Annuity Option, and the value of those Units. The
number of Annuity Units is determined as follows:
1. The number of Annuity Units credited in each Sub-Account will be determined
by dividing the product of the portion of the Contract Value to be applied to
the Sub-Account and the Annuity Purchase Rate by the value of one Annuity Unit
in that Sub-Account on the Annuity Date. The purchase rates are set forth in the
Variable Annuity Rate Tables in the Contract.
2. For each Sub-Account, the amount of each Annuity Payment equals the product
of the Annuitant's number of Annuity Units and the Annuity Unit Value on the
payment date. The amount of each payment may vary.
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Annuity Unit Value
The value of any Annuity Unit for each Sub-Account of the Separate Account was
arbitrarily set initially at $10.
The Sub-Account Annuity Unit Value at the end of any subsequent Valuation Period
is determined as follows:
1. The Net Investment Factor (see Page 21 for a description) for the current
Valuation Period is multiplied by the value of the Annuity Unit for the
Sub-Account for the immediately preceding Valuation Period.
2. The result in (1) is then divided by an assumed investment rate factor. The
assumed investment rate factor equals 1.00 plus the assumed investment rate for
the number of days since the preceding Valuation Date. The assumed investment
rate is based on an effective annual rate of 4%.
The value of an Annuity Unit may increase or decrease from Valuation Period to
Valuation Period.
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Annuity Options
The Contract Owner may choose periodic Fixed and/or Variable Annuity Payments
under any one of the Annuity Options described below. The Company may consent to
other plans of payment before the Annuity Date.
The following Annuity Options are available:
Annuity Option A -- Life Income.
Periodic payments will be made as long as the Annuitant lives. Under this option
it would be possible for only one (1) Annuity Payment to be made if the
Annuitant were to die before the due date of the second Annuity Payment; only
two (2) Annuity Payments if the Annuitant were to die before the due date of the
third Annuity Payment; and so forth.
Annuity Option B -- Life Income with Period Certain.
Periodic payments will be made for a guaranteed period, or as long as the
Annuitant lives, whichever is longer. The guaranteed period may be five (5), ten
(10) or twenty (20) years. If the Beneficiary does not desire payments to
continue for the remainder of the guaranteed period, he/she may elect to have
the present value of the guaranteed Annuity Payments remaining commuted and paid
in a lump sum.
Annuity Option C -- Joint and Last Survivor Payments.
Periodic payments will be made during the joint lifetime of two Annuitants
continuing in the same
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C.M. Multi-Account A and C.M. Life Insurance Company
amount during the lifetime of the surviving Annuitant. Under this option it
would be possible for only one (1) Annuity Payment to be made if both Annuitants
were to die before the due date of the second Annuity Payment; only two (2)
Annuity Payments if both Annuitants were to die before the due date of the third
Annuity Payment; and so forth.
Annuity Option D 1 Joint and 2/3 Survivor Annuity.
Periodic payments will be made during the joint lifetime of two Annuitants.
Payments will continue during the lifetime of the surviving Annuitant and will
be computed on the basis of two-thirds of the Annuity Payment (or Units) in
effect during the joint lifetime. Under this option it would be possible for
only one (1) Annuity Payment to be made if both Annuitants were to die before
the due date of the second Annuity Payment; only two (2) Annuity Payments if
both Annuitants were to die before the due date of the third Annuity Payment;
and so forth.
Annuity Option E -- Period Certain.
Periodic payments will be made for a specified period. The specified period must
be at least five (5) years and cannot be more than thirty (30) years. If the
Contract Owner does not desire payments to continue for the remainder of the
guaranteed period, he/she may elect to have the present value of the remaining
payments commuted and paid in a lump sum or as an Annuity Option purchased at
the date of such election. Contract Owners should consult with their tax advisor
prior to electing this option.
Annuity Option F -- Special Income Settlement Agreement.
The Company will pay the proceeds in accordance with terms agreed upon in
writing by the Contract Owner and the Company.
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Distribution
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The Contracts will be sold by licensed insurance agents in those states where
the Contracts may be lawfully sold. Such agents will be registered
representatives of broker-dealers registered under the Securities Exchange Act
of 1934 who are members of the National Association of Securities Dealers, Inc.
and who have entered into distribution agreements with the Company and the
principal underwriter for the Contract. Connecticut Mutual Financial Services,
LLC ("CMFS"), an ultimate subsidiary of Connecticut Mutual serves as a principal
underwriter for the Contracts. CMFS is located at 140 Garden Street, Hartford,
Connecticut 06154. MML Investors Services, Inc. ("MMLISI"), an ultimate
subsidiary of Massachusetts Mutual Life Insurance Company serves as a
co-underwriter for the Contracts. MMLISI is located at 1 Financial Plaza, 1350
Main Street, Springfield, MA 01103-1686. The principal underwriter and the
co-underwriter are registered with the Securities and Exchange Commission as a
broker-dealers and are members of the National Association of Securities Dealer,
Inc. Commissions and other distribution compensation will be paid by the Company
on behalf of the Distributor to selling broker-dealers up to an amount currently
equal to 7.00% of Purchase Payments. The Company may, by agreement with the
broker/ dealer, pay commissions as a trail commission (up to 1.20% of Contract
Values beginning in the first Contract Year) or as a combination of commission
at the time of the sale and a trail commission. These alternatives could exceed
7.0% of the Purchase Payments.
It is anticipated that the offering of the Contracts will be continuous.
Prospectus Page 32
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C.M. Multi-Account A and C.M. Life Insurance Company
Performance Information
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Money Market Sub-Account
From time to time, the Company may advertise its "yield" and "effective yield"
of the Money Market Sub-Account. Both yield figures are based on historical
earnings and are not intended to indicate future performance. The "yield" of the
Money Market Sub-Account refers to the income generated by Contract Values in
the Money Market Sub-Account over a seven-day period (which period will be
stated in the advertisement). This income is "annualized." That is, the amount
of income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
Contract Values in the Money Market Sub-Account. The "effective yield" is
calculated similarly. However, when annualized, the income earned by Contract
Values is assumed to be reinvested. This results in the "effective yield" being
slightly higher than the "yield" because of the compounding effect of the
assumed reinvestment. The yield figure will reflect the deduction of any
asset-based charges and any applicable Annual Contract Maintenance Charge, but
not Premium Taxes.
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Other Sub-Accounts
From time to time, the Company may advertise performance data for the various
other Sub-Accounts under the Contract. Such data will show the percentage change
in the value of a Sub-Account's Accumulation Unit based on the performance of
the underlying investment vehicle over a period of time, usually a calendar
year, determined by dividing the increase (decrease) in value for that Unit by
the Accumulation Unit value at the beginning of the period. This percentage
figure will reflect the deduction of any asset-based charges and any applicable
Annual Contract Maintenance Charges under the Contract, but not Premium Taxes.
Any advertisement will also include total return figures calculated as described
in the Statement of Additional Information. The total return figures reflect the
deduction of any applicable Annual Contract Maintenance Charge, as well as any
asset-based charges, but not Premium Taxes.
The Company has decided to make available yield information with respect to some
of the Sub-Accounts. Such yield information will be calculated as described in
the Statement of Additional Information. The yield information will reflect the
deduction of any applicable Annual Contract Maintenance Charge as well as any
asset-based charges.
The Company may also show historical Accumulation Unit values in certain
advertisements containing illustrations. These illustrations will be based on
actual Accumulation Unit values in addition, the Company may distribute sales
literature which compares the percentage change in Accumulation Unit values for
any of the Sub-Accounts against established market indices such as the Standard
& Poor's 500 Composite Stock Price Index, the Dow Jones Industrial Average or
other management investment companies which have investment objectives similar
to the underlying Portfolio being compared. The Standard & Poor's 500 Composite
Stock Price Index is an unmanaged, unweighted average of 500 stocks, the
majority of which are listed on the New York Stock Exchange. The Dow Jones
Industrial Average is an unmanaged, weighted average of thirty blue chip
industrial corporations listed on the New York Stock Exchange. Both the Standard
& Poor's 500 Composite Stock Price Index and the Dow Jones Industrial Average
assume quarterly reinvestment of dividends. In addition, the Company may, as
appropriate, compare each Sub-Account's performance to that of other types of
investments such as certificates of deposit, savings accounts and U.S.
Treasuries, or to certain interest rate and inflation indices, such as the
Consumer Price Index, which is published by the U.S. Department of Labor and
measures the average change in prices over time
Prospectus Page 33
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C.M. Multi-Account A and C.M. Life Insurance Company
of a fixed "market basket" of certain specified goods and services. Similar
comparisons of Sub-Account performance may also be made with appropriate indices
measuring the performance of a defined group of securities widely recognized by
investors as representing a particular segment of the securities markets. For
example, Sub-Account performance may be compared with Donoghue Money Market
Institutional Averages (money market rates), Lehman Brothers Corporate Bond
Index (corporate bond interest rates) or Lehman Brothers Government Bond Index
(long-term U.S. Government obligation interest rates).
The Company may also distribute sales literature which compares the performance
of the Contracts and CMFS Series Fund I with the contracts issued through the
separate accounts of other insurance companies and their underlying funds. Such
information will be derived from the Lipper Variable Insurance Products
Performance Analysis Service, the VARDS Report or from Morningstar.
The Lipper Variable Insurance Products Performance Analysis Service is published
by Lipper Analytical Services, Inc., a publisher of statistical data which
currently tracks the performance of almost 4,000 investment companies. The
rankings compiled by Lipper may or may not reflect the deduction of asset-based
insurance charges. The Company's sales literature utilizing these rankings will
indicate whether or not such charges have been deducted. Where the charges have
not been deducted, the sales literature will indicate that if the charges had
been deducted, the ranking might have been lower.
The VARDS Report is a monthly variable annuity industry analysis compiled by
Variable Annuity Research & Data Service ("VARDS")of Atlanta and published by
Financial Planning Resources, Inc. The VARDS rankings may or may not reflect the
deduction of asset-based insurance charges. The Company's sales literature
utilizing these rankings will indicate which charges had been deducted. Where
the charges have not been deducted, the sales literature will indicate that if
the charges had been deducted, the ranking might have been lower.
Morningstar rates mutual funds used with variable contracts against its peers
with similar investment objectives. Morningstar does not rate any mutual fund
that has less than three years of performance data. The Company's sales
literature utilizing these rankings will indicate whether they reflect the
deduction of asset-based insurance charges. Where the charges have not been
deducted, the sales literature will indicate that if the charges had been
deducted, the ranking might have been lower.
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Tax Status
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General
NOTE: THE FOLLOWING DESCRIPTION IS BASED UPON THE COMPANY'S UNDERSTANDING OF
CURRENT FEDERAL INCOME TAX LAW APPLICABLE TO ANNUITIES IN GENERAL. THE COMPANY
CANNOT PREDICT THE PROBABILITY THAT ANY CHANGES IN SUCH LAWS WILL BE MADE.
PURCHASERS ARE CAUTIONED TO SEEK COMPETENT TAX ADVICE REGARDING THE POSSIBILITY
OF SUCH CHANGES. THE COMPANY DOES NOT GUARANTEE THE TAX STATUS OF THE CONTRACTS.
PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT BE TREATED AS
"ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS. IT SHOULD BE FURTHER
UNDERSTOOD THAT THE FOLLOWING DISCUSSION IS NOT EXHAUSTIVE AND THAT SPECIAL
RULES NOT DESCRIBED IN THIS PROSPECTUS MAY BE APPLICABLE IN CERTAIN SITUATIONS.
MOREOVER, NO ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE STATE OR OTHER TAX
LAWS.
Section 72 of the Code governs taxation of annuities in general. A Contract
Owner is not taxed on increases in the value of a Contract until distribution
occurs, either in the form of a lump sum payment or as Annuity Payments under
the Annuity Option selected. For a lump sum payment received as a total
withdrawal (total surrender), the recipient is taxed on the portion of the
payment that exceeds the cost basis of the Contract. For Non-Qualified
Contracts, this cost
Prospectus Page 34
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C.M. Multi-Account A and C.M. Life Insurance Company
basis is generally the Purchase Payments, while for Qualified Contracts there
may be no cost basis. The taxable portion of the lump sum payment is taxed at
ordinary income tax rates.
For Annuity Payments, a portion of each payment in excess of an exclusion amount
is includible in taxable income. The exclusion amount for payments based on a
fixed Annuity Option is determined by multiplying the payment by the ratio that
the cost basis of the Contract (adjusted for any period certain or refund
feature) bears to the expected return under the Contract. The exclusion amount
for payments based on a variable Annuity Option is determined by dividing the
cost basis of the Contract (adjusted for any period certain or refund guarantee)
by the number of years over which the annuity is expected to be paid. Payments
received after the investment in the Contract has been recovered (I.E., when the
total of the excludable amounts equal the investment in the Contract) are fully
taxable. The taxable portion is taxed at ordinary income tax rates. For certain
types of Qualified Plans there may be no cost basis in the Contract within the
meaning of Section 72 of the Code. Contract Owners, Annuitants, and
Beneficiaries under the Contracts should seek competent financial advice about
the tax consequences of any distributions.
The Company is taxed as a life insurance company under the Code. For federal
income tax purposes, the Separate Account is not a separate entity from the
Company and its operations form a part of the Company.
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Diversification
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not, in
accordance with regulations prescribed by the United States Treasury Department
("Treasury Department"), adequately diversified. Disqualification of the
Contract as an annuity contract would result in the imposition of federal income
tax to the Contract Owner with respect to earnings allocable to the Contract
prior to the receipt of payments under the Contract. The Code contains a safe
harbor provision which provides that annuity contracts such as the Contracts
meet the diversification requirements if, as of the end of each quarter, the
underlying assets meet the diversification standards for a regulated investment
company and no more than 55% of the total assets consist of cash, cash items,
U.S. Government securities and securities of other regulated investment
companies.
On March 2, 1989, the Treasury Department issued Regulations (Treas. Reg.
1.817-5), which established diversification requirements for the investment
portfolios underlying variable contracts such as the Contracts. The Regulations
amplify the diversification requirements for variable contracts set forth in the
Code and provide an alternative to the safe harbor provision described above.
Under the Regulations, an investment portfolio will be deemed adequately
diversified if: (1) no more than 55% of the value of the total assets of the
portfolio is represented by any one investment; (2) no more than 70% of the
value of the total assets of the portfolio is represented by any two
investments; (3) no more than 80% of the value of the total assets of the
portfolio is represented by any three investments; and (4) no more than 90% of
the value of the total assets of the portfolio is represented by any four
investments.
The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable contracts
by Section 817(h) of the Code have been met, "each United States Government
agency or instrumentality shall be treated as a separate issuer."
The Company intends that all Portfolios of the Trust underlying the Contracts
will be managed by the Investment Adviser for the Trust in such a manner as to
comply with these diversification requirements.
The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which Contract Owner control
of the investments of the Separate Account will cause the Contract Owner to be
treated as the owner of the assets of the Separate Account, thereby resulting in
the loss of favorable tax treatment for the Contract. At this
Prospectus Page 35
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C.M. Multi-Account A and C.M. Life Insurance Company
time it cannot be determined whether additional guidance will be provided and
what standards may be contained in such guidance.
The amount of Contract Owner control which may be exercised under the Contract
is different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
owner was not the owner of the assets of the separate account. It is unknown
whether these differences, such as the Contract Owner's ability to transfer
among investment choices or the number and type of investment choices available,
would cause the Contract Owner to be considered as the owner of the assets of
the Separate Account resulting in the imposition of federal income tax to the
Contract Owner with respect to earnings allocable to the Contract prior to
receipt of payments under the Contract.
In the event any forthcoming guidance or ruling is considered to set forth a new
position, such guidance or ruling will generally be applied only prospectively.
However, if such ruling or guidance was not considered to set forth a new
position, it may be applied retroactively resulting in the Contract Owner being
retroactively determined to be the owner of the assets of the Separate Account.
Due to the uncertainty in this area, the Company reserves the right to modify
the Contract in an attempt to maintain favorable tax treatment.
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Multiple Contracts
The Code provides that multiple non-qualified annuity contracts which are issued
within a calendar year to the same contract owner by one company or its
affiliates are treated as one annuity contract for purposes of determining the
tax consequences of any distribution. Such treatment may result in adverse tax
consequences including more rapid taxation of the distributed amounts from such
combination of contracts. Contract Owners should consult a tax adviser prior to
purchasing more than one non-qualified annuity contract in any calendar year.
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Tax Treatment of Assignments
An assignment or pledge of a Contract may be a taxable event. Contract Owners
should therefore consult competent tax advisers should they wish to assign or
pledge their Contracts.
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Income Tax Withholding
All distributions or the portion thereof which is includible in the gross income
of the Contract Owner are subject to federal income tax withholding. Generally,
amounts are withheld from periodic payments at the same rate as wages and at the
rate of 10% from non-periodic payments. However, the Contract Owner, in most
cases, may elect not to have taxes withheld or to have withholding done at a
different rate.
Effective January 1, 1993, certain distributions from retirement plans qualified
under Section 401 or Section 403(b) of the Code, which are not directly rolled
over to another eligible retirement plan or individual retirement account or
individual retirement annuity, are subject to a mandatory 20% withholding for
federal income tax. The 20% withholding requirement does not apply to: a)
distributions for the life or life expectancy of the participant or joint and
last survivor expectancy of the participant and a designated beneficiary; or b)
distributions for a specified period of ten (10) years or more; or c)
distributions which are required minimum distributions. Participants under such
plans should consult their own tax counsel or other tax advisor regarding
withholding.
Prospectus Page 36
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C.M. Multi-Account A and C.M. Life Insurance Company
Tax Treatment of Withdrawals --
Non-Qualified Contracts
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the Contract Value exceeds the aggregate purchase
payments made, any amount withdrawn will be treated as coming first from the
earnings and then, only after the income portion is exhausted, as coming from
the principal. Withdrawn earnings are includible in gross income. It further
provides that a 10% penalty will apply to the income portion of any
distribution. However, the penalty is not imposed on amounts received: (a) after
the taxpayer reaches age 59 1/2; (b) after the death of the Contract Owner; (c)
if the taxpayer is totally disabled (for this purpose disability is as defined
in Section 72(m)(7) of the Code); (d) in a series of substantially equal
periodic payments made not less frequently than annually for the life (or life
expectancy) of the taxpayer or for the joint lives (or joint life expectancies)
of the taxpayer and his or her Beneficiary; (e) under an immediate annuity; or
(f) which are allocable to purchase payments made prior to August 14, 1982.
The above information does not apply to Qualified Contracts. However, separate
tax withdrawal penalties and restrictions may apply to such Qualified Contracts.
(See "Tax Treatment of Withdrawals -- Qualified Contracts" on Page 39.)
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Qualified Plans
The Contracts offered by this Prospectus are designed to be suitable for use
under various types of Qualified Plans. Taxation of participants in each
Qualified Plan varies with the type of plan and terms and conditions of each
specific plan. Contract Owners, Annuitants and Beneficiaries are cautioned that
benefits under a Qualified Plan may be subject to the terms and conditions of
the plan regardless of the terms and conditions of the Contracts issued pursuant
to the plan. Some retirement plans are subject to distribution and other
requirements that are not incorporated into the Contract's administrative
procedures. Owners, participants and Beneficiaries are responsible for
determining that contributions, distributions and other transactions with
respect to the Contracts comply with applicable law. Following are general
descriptions of the types of Qualified Plans with which the Contracts may be
used. Such descriptions are not exhaustive and are for general informational
purposes only. The tax rules regarding Qualified Plans are very complex and will
have differing applications depending on individual facts and circumstances.
Each purchaser should obtain competent tax advice prior to purchasing a Contract
issued under a Qualified Plan.
Contracts issued pursuant to Qualified Plans include special provisions
restricting Contract provisions that may otherwise be available as described in
this Prospectus. Generally, Contracts issued pursuant to Qualified Plans are not
transferable except upon surrender or annuitization. Various penalty and excise
taxes may apply to contributions or distributions made in violation of
applicable limitations. Furthermore, certain withdrawal penalties and
restrictions may apply to surrenders from Qualified Contracts. (See "Tax
Treatment of Withdrawals -- Qualified Contracts" on Page 39.)
On July 6, 1983, the Supreme Court decided in Arizona Governing Committee v.
Norris that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women. The Contracts sold by the Company in connection with
certain Qualified Plans will utilize annuity tables which do not differentiate
on the basis of sex. Such annuity tables will also be available for use in
connection with certain non-qualified deferred compensation plans.
Prospectus Page 37
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C.M. Multi-Account A and C.M. Life Insurance Company
H.R. 10 Plans
Section 401 of the Code permits self-employed individuals to establish Qualified
Plans for themselves and their employees, commonly referred to as "H.R. 10" or
"Keogh" plans. Contributions made to the Plan for the benefit of the employees
will not be included in the gross income of the employees until distributed from
the Plan. The tax consequences to participants may vary depending upon the
particular plan design. However, the Code places limitations and restrictions on
all Plans including on such items as: amount of allowable contributions; form,
manner and timing of distributions; transferability of benefits; vesting and
nonforfeitability of interests; nondiscrimination in eligibility and
participation; and the tax treatment of distributions, withdrawals and
surrenders. (See "Tax Treatment of Withdrawals -- Qualified Contracts" on Page
39.) These retirement plans may permit the purchase of the Contracts to
accumulate retirement savings under the plans. Adverse tax or other legal
consequences to the Plan, to the participant or to both may result if the
Contract is assigned or transferred to any individual as a means to provide
benefit payments, unless the Plan complies with all legal requirements
applicable to such benefits prior to the transfer of the Contract. Purchasers of
Contracts for use with an H.R. 10 Plan should obtain competent tax advice as to
the tax treatment and suitability of such an investment.
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Individual Retirement Annuities
Section 408(b) of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity"
("IRA"). Under applicable limitations, certain amounts may be contributed to an
IRA which will be deductible from the individual's gross income. These IRAs are
subject to limitations on eligibility, contributions, transferability and
distributions. (See "Tax Treatment of Withdrawals -- Qualified Contracts" on
Page 39.) Under certain conditions, distributions from other IRAs and other
Qualified Plans may be rolled over or transferred on a tax-deferred basis into
an IRA. Sales of Contracts for use with IRAs are subject to special requirements
imposed by the Code, including the requirement that certain informational
disclosure be given to persons desiring to establish an IRA. The Internal
Revenue Service has not reviewed the Contract for qualification as an IRA, and
has not addressed in a ruling of general applicability whether a death benefit
provision such as the provision in the Contract comports with IRA qualification
requirements. Purchasers of Contracts to be qualified as Individual Retirement
Annuities should obtain competent tax advice as to the tax treatment and
suitability of such an investment.
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Corporate Pension and
Profit-Sharing Plans
Sections 401(a) and 401(k) of the Code permit corporate employers to establish
various types of retirement plans for employees. These retirement plans may
permit the purchase of the Contracts to provide benefits under the Plan.
Contributions to the Plan for the benefit of employees will not be includible in
the gross income of the employees until distributed from the Plan. The tax
consequences to participants may vary depending upon the particular plan design.
However, the Code places limitations and restrictions on all plans including on
such items as: amount of allowable contributions; form, manner and timing of
distributions; transferability of benefits; vesting and nonforfeitability of
interests; nondiscrimination in eligibility and participation; and the tax
treatment of distributions, withdrawals and surrenders. (See "Tax Treatment of
Withdrawals -- Qualified Contracts" on Page 39.) These retirement plans may
permit the purchaser of the Contracts to accumulate retirement savings under the
plans. Adverse tax or other legal consequences to the plan, to the participant,
or to both may result if
Prospectus Page 38
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C.M. Multi-Account A and C.M. Life Insurance Company
the Contract is assigned or transferred to any individual as a means to provide
benefit payments, unless the plan complies with all legal requirements
applicable to such benefits prior to transfer of the Contract. Purchasers of
Contracts for use with Corporate Pension or Profit-Sharing Plans should obtain
competent tax advice as to the tax treatment and suitability of such an
investment.
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Section 457 Deferred Compensation
("Section 457") Plans
Under Section 457 of the Code, employees of (and independent contractors who
perform services for) certain state and local governmental units, or certain
tax-exempt employers, may participate in a Section 457 plan of the employer,
allowing them to defer part of their salary or other compensations. The amount
deferred, and any income on such amount, will not be taxable until paid or
otherwise made available to the employee.
The maximum amount that can be deferred under a Section 457 plan in any tax year
is ordinarily one-third of the employee's includible compensation, up to $7,500.
Includible compensation means earnings for services rendered to the employer
which is includible in the employee's gross income, but excluding any
contributions under the Section 457 plan, or a Tax-Sheltered Annuity. During the
last three (3) years before an individual attains normal retirement age,
additional "catch-up" deferrals are permitted. The deferred amounts will be used
by the employer to purchase the Contract. The Contract will be issued to the
employer, and all Contract Values will be subject to the claims of the
employer's creditors. The employee has no rights or vested interest in the
Contract, and is only entitled to payment in accordance with the Section 457
plan provisions. Present federal income tax law does not allow tax-free
transfers or rollovers for amounts accumulated in a Section 457 plan, except for
transfers to other Section 457 plans in certain limited cases.
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Tax Treatment of Withdrawals --
Qualified Contracts
In the case of a withdrawal under a Qualified Contract, a ratable portion of the
amount received is taxable, generally based on the ratio of the individual's
cost basis to the individual's total accrued benefit under the retirement plan.
Special tax rules may be available for certain distributions from a Qualified
Contract. Section 72(t) of the Code imposes a 10% penalty tax on the taxable
portion of any distribution from qualified retirement plans, including Contracts
issued and qualified under Code Sections 401 (H.R. 10 and Corporate Pension and
Profit-Sharing Plans) and 408(b) (Individual Retirement Annuities). To the
extent amounts are not includible in gross income because they have been rolled
over to an IRA or to another eligible Qualified Plan, no tax penalty will be
imposed. The tax penalty will not apply to the following distributions: (a) if
distribution is made on or after the date on which the Contract Owner or
Annuitant (as applicable) reaches age 59 1/2; (b) distributions following the
death or disability of the Contract Owner or Annuitant (as applicable) (for this
purpose disability is as defined in Section 72(m)(7) of the Code); (c) after
separation from service, distributions that are part of substantially equal
periodic payments made not less frequently than annually for the life (or life
expectancy) of the Contract Owner or Annuitant (as applicable) or the joint
lives (or joint life expectancies) of such Contract Owner or Annuitant (as
applicable) and his or her designated Beneficiary; (d) distributions to a
Contract Owner or Annuitant (as applicable) who has separated from service after
he/she has attained age 55; (e) distributions made to the Contract Owner or
Annuitant (as applicable) to the extent such distributions do not exceed the
amount allowable as a deduction under Code Section 213 to the Contract Owner or
Annuitant (as applicable) for amounts paid during the taxable year for medical
care; and (f) distributions made to an alternate payee pursuant to a qualified
domestic relations order. The exceptions stated in (d), (e) and (f) above do not
apply in the case of an Individual Retirement Annuity. The exception stated in
(c) above applies to an Individual Retirement Annuity
Prospectus Page 39
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C.M. Multi-Account A and C.M. Life Insurance Company
without the requirement that there be a separation from service.
Generally, distributions from a Qualified Plan must commence no later than April
1 of the calendar year, following the year in which the employee attains age
70 1/2. Required distributions must be over a period not exceeding the life
expectancy of the individual or the joint lives or life expectancies of the
individual and his or her designated beneficiary. If the required minimum
distributions are not made, a 50% penalty tax is imposed as to the amount not
distributed. In addition, distributions in excess of $150,000 per year may be
subject to an additional 15% excise tax unless an exemption applies.
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Contracts Owned By Other Than
Natural Persons
Generally, investment earnings on premiums for Contracts will be taxed currently
to the Contract Owner if the Owner is a non-natural person, E.G., a corporation,
or certain other entities other than tax-qualified trusts. Such Contracts
generally will not be treated as annuities for federal income tax purposes.
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Financial Statements
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Financial statements of the Company have been included in the Statement of
Additional Information. No financial statements for the Separate Account have
been included herein because, as of the date of this Prospectus the Sub-Accounts
available under the Contracts offered hereunder had no assets.
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Legal Proceedings
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There are no material pending legal proceedings to which the Separate Account,
the Distributor or the Company is a party which would have a nega-
tive impact on any party's ability to meet its obligations under the Contracts.
Prospectus Page 40
<PAGE>
C.M. Multi-Account A and C.M. Life Insurance Company
Table of Contents
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Statement of Additional Information
Item Page
------------------------------------------------------------------------ ----
Company................................................................. 3
Experts................................................................. 3
Legal Opinions.......................................................... 3
Distributor............................................................. 3
Yield Calculation for Money Market Sub-Account.......................... 3
Performance Information................................................. 4
Annuity Provisions...................................................... 5
Financial Statements.................................................... 5
Prospectus Page 41
