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File Nos. 33-61679
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
[_] Pre-Effective Amendment No.___ [X] Post-Effective Amendment No. 3
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
[X] Amendment No. 10
(Check appropriate box or boxes.)
C.M. MULTI-ACCOUNT A
--------------------
(Exact Name of Registrant)
C.M. LIFE INSURANCE COMPANY
---------------------------
(Name of Depositor)
140 Garden Street, Hartford, Connecticut 06154
----------------------------------------------
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code 1-800-234-5606
Name and Address of Agent for Service
Ann F. Lomeli, Secretary
C.M. Life Insurance Company
140 Garden Street
Hartford, Connecticut 06154
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective
/_/ immediately upon filing pursuant to paragraph (b) of Rule 485
/X/ on May 1, 1998 pursuant to paragraph (b) of Rule 485
/_/ 60 days after filing pursuant to paragraph (a) of Rule 485
/_/ on (date) pursuant to paragraph (a) of the Rule 485
STATEMENT PURSUANT TO RULE 24f-2
The Registrant has registered an indefinite number or amount of its variable
annuity contracts under the Securities Act of 1993 pursuant to Rule 24f-2 under
the Investment Company Act of 1940. The Rule 24f-2 Notice for Registrant's
fiscal year ended December 31, 1997 was filed on or about March 20, 1998.
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CROSS REFERENCE TO ITEMS
REQUIRED BY FORM N-4
N-4 Item Caption in Prospectus
- -------- ---------------------
1 ................................... Cover Page
2 ................................... Definitions
3 ................................... Table of Fees and Expenses
4 ................................... Condensed Financial
Information; Performance
Measures
5 ................................... C.M. Life, the Separate
Account and the Funds
6 ................................... Contract Charges;
Distribution
7 ................................... Miscellaneous Provisions;
An Explanation of the
Contracts; Reservation of
Rights; Contract Owner's
Voting Rights
8 ................................... The Annuity (Pay-Out)
Period
9 ................................... The Death Benefit
10 .................................. The Accumulation (Pay-In)
Period; Distribution
11 .................................. Right to Return Contract;
Redemption Privilege
12 .................................. Federal Tax Status
13 .................................. None
14 .................................. Additional Information
2
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.................................. Caption in Statement of
Additional Information
----------------------
15 .................................. Cover Page
16 .................................. Table of Contents
17 .................................. General Information
18 .................................. Service Arrangements and
Distribution
21 .................................. Performance Measures
22 .................................. Contract Value Calculations
23 .................................. Reports of Independent
Accountants and Financial
Statements
3
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PART A
INFORMATION REQUIRED IN A PROSPECTUS
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C.M. MULTI-ACCOUNT A AND C.M. LIFE INSURANCE COMPANY
PROSPECTUS - MAY 1, 1998
INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACTS WITH FLEXIBLE PURCHASE PAYMENTS
(the "Contracts" or "Panorama Premier 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 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.
Purchase Payments for the Contracts will be allocated as specified by the
Contract Holder, to the Fixed Accounts (subject to state availability) and/or to
a separate account designated C.M. Multi-Account A (the "Separate Account") of
C.M. Life Insurance Company (the "Company"). The Company may allocate initial
Purchase Payments to the Money Market Sub-Account of the Separate Account during
the Right to Examine Contract Period. (See Highlights.) The Separate Account
invests in shares of Panorama Series Fund, Inc. ("Panorama Fund") and
Oppenheimer Variable Account Funds ("Oppenheimer Funds"), and subject to state
availability, Variable Insurance Products Fund II ("VIP Fund II") and American
Century Variable Portfolios, Inc. ("American Century VP"). The Panorama Fund is
a series fund with six (6) of its Portfolios currently available to Owners of
Contracts: LifeSpan Diversified Income Portfolio, Total Return Portfolio,
LifeSpan Balanced Portfolio, LifeSpan Capital Appreciation Portfolio, Growth
Portfolio, and International Equity Portfolio. Oppenheimer Funds is a series
fund with two (2) of its Funds currently available: Oppenheimer Money Fund and
Oppenheimer Bond Fund. VIP Fund II is a series fund with one (1) of its
Portfolios available to Owners of Contracts (subject to state availability):
Contrafund Portfolio. American Century VP is a series fund with one (1) of its
Portfolios available to Owners of Contracts (subject to state availability): VP
Income & Growth Portfolio.
This Prospectus concisely sets forth the information a prospective investor
should know before investing and should be kept for future reference. 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. For the Statement of Additional Information,
call (800) 569-6576 or write to: Panorama Premier, Annuity Products, H563, P.O.
Box 9067, Springfield, Massachusetts 01102-9067.
The Securities and Exchange Commission (SEC) maintains a Web site
(http://www.sec.gov) that contains the Statement of Additional Information,
material incorporated by reference and other information regarding registrants
that is filed with the SEC electronically.
ANY INQUIRIES CAN BE MADE BY TELEPHONE OR IN WRITING TO C.M. LIFE INSURANCE
COMPANY AT ITS ANNUITY SERVICE CENTER.
THIS PROSPECTUS IS ONLY VALID WHEN ACCOMPANIED BY THE PROSPECTUSES FOR PANORAMA
FUND, OPPENHEIMER FUNDS, VIP FUND II, AND AMERICAN CENTURY VP.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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.
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Table of Contents
Page
Definitions ............................................................... 4
Highlights ................................................................ 6
Table of Fees and Expenses ................................................ 8
Condensed Financial Information ........................................... 10
The Company ............................................................... 11
The Separate Account ...................................................... 11
Eligible Investments ................................................. 11
Panorama Series Fund, Inc ............................................ 11
Oppenheimer Variable Account Funds ................................... 12
VIP Fund II .......................................................... 12
American Century VP .................................................. 12
Voting Rights ........................................................ 13
Substitution of Securities ........................................... 13
The Fixed Account ......................................................... 13
Charges and Deductions .................................................... 14
Deduction for Mortality and Expense Risk Charge ...................... 14
Deduction for Administrative Charge .................................. 14
Deduction for Annual Contract Maintenance Charge ..................... 14
Deduction for Premium and Other Taxes ................................ 14
Deduction for Fund Expenses .......................................... 15
Deduction for Transfer Fee .......................................... 15
Deduction for Contingent Deferred Sales Charge ....................... 15
Free Withdrawals ..................................................... 16
The Contracts ............................................................. 16
Contract Owner ....................................................... 16
Joint Contract Owners ................................................ 16
Annuitant ............................................................ 17
Assignment ........................................................... 17
Purchase Payments and Contract Value ...................................... 17
Purchase Payments .................................................... 17
Allocation of Purchase Payments ...................................... 17
Contract Value ....................................................... 17
Accumulation Units ................................................... 18
Accumulation Unit Value .............................................. 18
Transfers ................................................................. 18
Transfers During the Accumulation Period ............................. 18
Transfers During the Annuity Period .................................. 19
Dollar Cost Averaging ................................................ 19
Rebalancing Program .................................................. 20
Withdrawals ............................................................... 20
Systematic Withdrawals ............................................... 20
Suspension or Deferral of Payments ................................... 21
Terminal Illness Benefit ............................................. 21
Proceeds Payable on Death ................................................. 22
Death of Contract Owner During the Accumulation Period ............... 22
Death Benefit Amount During the Accumulation Period .................. 22
Death Benefit Options During the Accumulation Period ................. 22
Death of Contract Owner During the Annuity Period .................... 23
Death of Annuitant ................................................... 23
Payment of Death Benefit ............................................. 23
Beneficiary .......................................................... 23
Change of Beneficiary ................................................ 23
Annuity Provisions ........................................................ 23
Annuity Guidelines ................................................... 23
Annuity Payments ..................................................... 24
Fixed Annuity ........................................................ 24
Variable Annuity ..................................................... 24
2
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Annuity Units and Payments .......................................... 24
Annuity Unit Value .................................................. 24
Annuity Options ..................................................... 24
Distribution .............................................................. 25
Performance Measures ...................................................... 25
Standardized Average Annual Total Return ............................ 25
Additional Performance Measures ..................................... 26
Tax Status ................................................................ 27
General ............................................................. 27
Diversification ..................................................... 27
Multiple Contracts .................................................. 28
Tax Treatment of Assignments ........................................ 28
Penalty Tax ......................................................... 28
Income Tax Withholding .............................................. 28
Tax Treatment of Withdrawals - Non-Qualified Contracts .............. 28
Qualified Plans ..................................................... 29
H.R. 10 Plans ..................................................... 29
Individual Retirement Annuities ................................... 29
Roth IRAs ......................................................... 29
Corporate Pension and Profit-Sharing Plans ........................ 30
Section 457 Deferred Compensation ("Section 457") Plans ........... 30
Tax Treatment of Withdrawals - Qualified Contracts ................ 30
Contracts Owned by Other Than Natural Persons ..................... 31
IRA Disclosure Statement - Appendix A ..................................... 32
Additional Information .................................................... 35
3
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Definitions
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.
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 Options: Options available for Annuity Payments.
Annuity Payments: The series of payments that will begin on the Annuity Date.
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: Annuity Service Center: The office at which the
administration of the contract occurs. Prior to July 1, 1998, the Service Center
for the Contract will be located at P.O. Box 419204, Kansas City, MO 64141-6204,
(800) 569-6576, or 301 West 11th St, Fourth Floor, Kansas City, MO, 64105.
Effective July 1, 1998, the Service Center will be relocated. After July 1,
1998, please direct all requests and/or inquiries to Annuity Service Center,
H563, P. O. Box 9067, Springfield, MA 01102-9067 (800) 569-6576.
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.
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
segregated asset accounts.
Issue Date: The date on which the Contract became effective.
Non-Qualified Contracts: Contracts other than Qualified Contracts 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.
Qualified Plans: 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 are the Panorama Fund, Oppenheimer Funds, and subject to state
availability, VIP Fund II and American Century VP.
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 the
Panorama Fund, Oppenheimer Funds, VIP Fund II, and American Century VP.
4
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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
succeeding 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.
5
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Highlights
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 the Panorama Fund, in shares
of certain Funds of Oppenheimer Funds, and subject to state availability, in the
shares of one Portfolio of VIP Fund II and one Portfolio of American Century VP.
(See Eligible Investments.) 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. The Contract must be accompanied by a written request
signed by the Contract Owner that indicates the Contract Owner wishes to return
the Contract. 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) and (b) 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. With respect to the
circumstances described in (c) above, the Company will allocate initial Purchase
Payments to the Money Market Sub-Account until the expiration of twenty-five
(25) days from the Issue Date. 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.)
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 may be
increased but it cannot exceed 0.25% 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.)
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.)
Contingent Deferred Sales Charge. The Company does not deduct a sales charge
when it receives a Purchase Payment. However, if any part of 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. The Contract Owner may with draw the greater of:
(a) the portion of the Contract Value attributable to positive investment
results, if any, on the date of withdrawal; or
(b) 10% of Purchase Payments remaining in the Contract on the withdrawal date
reduced by any Free Withdrawal(s) previously taken during the current
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.
6
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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.) 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 Fixed Account. The Transfer Fee is the lesser of $20
or 2% of the amount transferred. (See Charges and Deductions - Deduction for
Transfer Fee.)
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 or 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. For
federal income tax purposes, withdrawals are deemed to be on a last-in,
first-out basis. (See Tax Status - Tax Treatment of Withdrawals - Non-Qualified
Contracts.) Separate tax withdrawal penalties and restrictions apply to
Qualified Contracts. For a further discussion of the taxation of the Contracts,
see Tax Status.
See Tax Status - Diversification for a discussion of owner control of the
underlying investments in a variable annuity contract.
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.)
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 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 for a further discussion.)
Maximum Issue Ages. The maximum issue age is Attained Age 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.
7
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C.M. Multi-Account A
Table of Fees and Expenses
(see Note 1)
Contract Owner Transaction Expenses
Transfer Fee ........................... No charge is imposed for the first 12
(see Note 3) transfers in a 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 Purchases ................ 0%
Maximum Contingent Deferred Sales Charge
Computed on Amounts Withdrawn (as a
percentage of Contract Owner's Purchase
Payment) ............................... 7%
(see Note 2)
Annual Contract Maintenance Charge (see
Note 4) ................................ $30 per Contract per Contract Year.
Separate Account Annual Expenses
(as a percentage of average account value)
Mortality and Expense Risk Charge ...... 1.25%
Administrative Charge (see Note 5) ..... 0.15%
Total Separate Account Annual Expenses . 1.40%
ELIGIBLE INVESTMENTS' ANNUAL EXPENSES FOR 1997
(as a percentage of the average net assets of a Portfolio)
<TABLE>
<CAPTION>
Panorama
LifeSpan Panorama Panorama
Oppenheimer Oppenheimer Diversified Total LifeSpan
Money Bond Income Return Balanced
Fund Fund Portfolio Portfolio Portfolio
---- ---- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Management Fee ............... 0.44% 0.73% 0.75% 0.54% 0.85%
Other Expenses ............... 0.04% 0.05% 0.09% 0.01% 0.12%
Total Operating Expenses ..... 0.48% 0.78% 0.84% 0.55% 0.97%
<CAPTION>
Panorama American
LifeSpan Panorama Century VP
Capital Panorama International VIP Fund II Income &
Appreciation Growth Equity Contrafund Growth
Portfolio Portfolio Portfolio Portfolio* Portfolio*
--------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Management Fee .............. 0.85% 0.53% 1.00% 0.60% 0.70%
Other Expenses .............. 0.14% 0.01% 0.12% 0.11% -
Total Operating Expenses .... 0.99% 0.54% 1.12% 0.71% 0.70%
</TABLE>
(See the Prospectuses for Panorama Fund, Oppenheimer Funds, VIP Fund II and
American Century VP for more information.)
*Subject to state availability
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Examples (See Note 6)
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.
Panorama
LifeSpan Panorama Panorama
Oppenheimer Oppenheimer Diversified Total LifeSpan
Money Bond Income Return Balanced
Fund Fund Portfolio Portfolio Portfolio
---- ---- --------- --------- ---------
1 ...... $ 85 $ 88 $ 89 $ 86 $ 90
3 ...... $112 $121 $122 $114 $126
5 ...... $137 $153 $156 $141 $162
10 ..... $231 $262 $269 $238 $282
Panorama American
LifeSpan Panorama Century VP
Capital Panorama International VIP Fund II Income &
Appreciation Growth Equity Contrafund Growth
Portfolio Portfolio Portfolio Portfolio* Portfolio*
--------- --------- --------- ------------ ------------
1 ...... $ 90 $ 86 $ 91 87 87
3 ...... $127 $114 $131 118 118
5 ...... $163 $140 $170 149 148
10 ..... $284 $237 $297 255 254
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.
*Subject to state availability
Panorama
LifeSpan Panorama Panorama
Oppenheimer Oppenheimer Diversified Total LifeSpan
Money Bond Income Return Balanced
Fund Fund Portfolio Portfolio Portfolio
---- ---- --------- --------- ---------
1 ...... $ 20 $ 23 $ 24 $ 21 $ 25
3 ...... $ 62 $ 72 $ 73 $ 64 $ 77
5 ...... $107 $123 $126 $111 $132
10 ..... $231 $262 $269 $238 $282
Panorama American
LifeSpan Panorama Century VP
Capital Panorama International VIP Fund II Income &
Appreciation Growth Equity Contrafund Growth
Portfolio Portfolio Portfolio Portfolio* Portfolio*
--------- --------- --------- ------------ ------------
1 ...... $ 25 $ 21 $ 27 23 22
3 ...... $ 78 $ 64 $ 82 69 69
5 ...... $133 $110 $140 119 118
10 ..... $284 $237 $297 255 254
*Subject to state availability
9
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Condensed Financial Information
ACCUMULATION UNIT VALUES
Sub-Account Dec 31, 1997 Dec 31, 1996 1996(a)
------------ ------------ -------
Money 10.741883 10.342534 10.00
Bond 11.133260 10.333908 10.00
LifeSpan Diversified Income 11.648276 10.498529 10.00
Total Return 12.689528 10.831420 10.00
LifeSpan Balanced 12.401154 11.208195 10.00
LifeSpan Capital Appreciation 12.970161 11.688219 10.00
Growth 14.655753 11.761149 10.00
International Equity 11.858034 11.123558 10.00
ACCUMULATION UNITS OUTSTANDING
Sub-Account Dec 31, 1997 Dec. 31, 1996
----------- -------------
Money 1,270,662 526,970
Bond 577,928 245,238
LifeSpan Diversified Income 750,520 250,228
Total Return 3,810,237 1,416,956
LifeSpan Balanced 1,882,142 990,137
LifeSpan Capital Appreciation 1,988,330 910,038
Growth 3,900,882 1,258,381
International Equity 1,128,689 320,578
(a) Commencement of public offering was January 23, 1996.
Financial Statements
For audited financial statements and other information concerning the financial
condition of C.M. Multi-Account A and the Company, see the Statement of
Additional Information.
Notes to Table Of Fees and Expenses 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 Panorama Fund, VIP Fund II, and American Century VP, and the
Funds of Oppenheimer Funds. For additional information, see "Charges and
Deductions" in this Prospectus and the Prospectuses for Panorama Fund, VIP
Fund II, American Century VP, 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). 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). 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 and Dollar Cost
Averaging and Rebalancing Program.)
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.) The examples reflect the $30 Annual Contract
Maintenance Fee as an annual charge of 0.09% of assets, based on an
anticipated average Contract Value of $35,000.
5. The current Administrative Charge is equal on an annual basis to 0.15% of
the average daily net asset value of the Separate Account. The Company may
increase this charge to an amount not to exceed 0.25% 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.)
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7. The examples should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.
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.
Prior to February 29, 1996, the Company was a wholly-owned subsidiary of
Connecticut Mutual Life Insurance company ("CML"). On February 29, 1996, CML
merged with and into Massachusetts Mutual Life Insurance Company (MassMutual").
The Company is now a wholly-owned subsidiary of MassMutual. The merger did not
affect any provision of, or rights or obligations under, the Contracts issued by
the Company.
MassMutual is a mutual life insurance company specially chartered by the
Commonwealth of Massachusetts on May 14, 1851. It is currently licensed to
transact life, accident, and health insurance business in all states, the
District of Columbia, Puerto Rico and certain provinces of Canada. MassMutual
had estimated unconsolidated statutory assets in excess of $57 billion, and
estimated total assets under management in excess of $152 billion as of December
31, 1997.
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
designated as C.M. Multi-Account A (the "Separate Account"). The Separate
Account is 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 currently is divided into three segments, one of which
relates to the Contracts. This segment is divided into Sub-Accounts, with the
assets of each Sub-Account invested in one Portfolio of the Panorama Series
Fund, Inc. (LifeSpan Diversified Income Portfolio, Total Return Portfolio,
LifeSpan Balanced Portfolio, LifeSpan Capital Appreciation Portfolio, Growth
Portfolio, and International Equity Portfolio), one Fund of the Oppenheimer
Variable Account Funds (Money Fund and Bond Fund), and subject to state
availability, one Portfolio of VIP Fund II (Contrafund Portfolio), and one
Portfolio of American Century VP (VP Income & Growth). 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
performance of the Sub-Accounts to which Purchase Payments are allocated, and in
accordance with the imposition of the fees and charges assessed under the
Contracts.
Eligible Investments
The following are the current Separate Account 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.
Panorama Series Fund, Inc.
Panorama Series Fund, Inc. ("Panorama Fund") is an open-end management
investment company. OppenheimerFunds, Inc. ("OFI"), an investment adviser
registered with the SEC under the Investment Advisers Act of 1940, as amended,
("Investment Advisers Act") is the investment adviser to the Panorama Fund, and
performs sales and administrative functions relative to the Panorama Fund,
including the keeping of all records not maintained by the custodian. OFI has
operated as an investment adviser since 1959 and, together with a subsidiary,
manages companies with $75 billion in assets and 3.5 million shareholder
accounts as of December 31, 1997. OFI is owned by Oppenheimer Acquisition
Corporation, a holding company that is owned in part by senior officers for OFI
and controlled by MassMutual. The address of OFI is Two World Trade Center, New
York, NY 10048-0203.
OFI 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. Babson-Stewart Ivory International ("Babson-Stewart"),
One Memorial Drive, Cambridge, MA 02142, is the Subadviser to the International
Equity Portfolio and the international stock components of the LifeSpan Balanced
Portfolio and the LifeSpan Capital Appreciation Portfolio. Babson-Stewart is a
partnership formed in 1987 between David L. Babson & Co., Inc., a subsidiary of
MassMutual and Stewart Ivory & Co., Ltd., located in Edinburgh, Scotland. BEA
Associates, 599 Lexington Avenue, 36th Floor, New
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York, NY 10022, is the Subadviser to the high yield bond components of the three
LifeSpan Portfolios. Pilgrim, Baxter & Associates ("Pilgrim Baxter"), 1255
Drummers Lane, Wayne, PA 19087, is the Subadviser to the small cap components of
the LifeSpan Balanced Portfolio and the LifeSpan Capital Appreciation Portfolio.
Panorama Fund 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 bonds.
Panorama Fund Total Return Portfolio
The investment objective of the Total Return Portfolio is to maximize the total
investment return (including capital appreciation and income) by allocating its
assets among stocks, corporate bonds, securities issued by the U.S. Government
and its instrumentalities, and money market instruments according to changing
market conditions.
Panorama Fund 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 stocks
and bonds with a slightly stronger emphasis on stocks.
Panorama Fund 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
stocks. Current income is not a primary consideration.
Panorama Fund 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. Realization of current income is a
secondary consideration.
Panorama Fund 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.
Oppenheimer Variable Account Funds
Oppenheimer Variable Account Funds ("Oppenheimer Funds") is an open-end
management investment company. The Oppenheimer Funds are also advised by OFI.
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 primarily seeks a high level of current
income by investing primarily in debt securities. Secondarily, this Fund seeks
capital growth when consistent with its primary objective.
Variable Insurance Product Fund II
Variable Insurance Product Fund II ("VIP Fund II") is an open-end management
investment company organized as a Massachusetts business trust on March 21,
1988. Fidelity Management & Research Company ("FMR") is the investment adviser
to VIP Fund II. FMR is the management arm of Fidelity Investments which was
established in 1946. Fidelity Investments has its principal business address at
82 Devonshire Street, Boston, Massachusetts 02109. FMR has engaged two
affiliates Fidelity Management & Research (U.K.) Inc. and Fidelity Management &
Research (Far East) Inc. to serve as subadvisers to the Contrafund Portfolio.
VIP Fund II Contrafund Portfolio*
The investment objective of the Contrafund Portfolio is to seek capital
appreciation by investing mainly in equity securities of companies that FMR
believes to by undervalued due to an overly pessimistic appraisal by the public.
The Contra-fund Portfolio usually invests primarily in common stock and
securities convertible into common stock, but it has the flexibility to invest
in any type of security that may produce capital appreciation.
*Subject to state availability
American Century Variable Portfolios, Inc.
American Century Variable Portfolios, Inc. ("American Century VP") was organized
as a Maryland corporation in 1987 and is a diversified, open-end management
investment company. American Century Investment Management, Inc. ("American
Century") is the investment manager of American Century VP. American Century has
been providing investment advisery services to investment companies and
institutional investors since it was founded in 1958. American Century's address
is American Century Tower, 4500 Main Street, Kansas City Missouri 64111.
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American Century VP Income & Growth Portfolio*
American Century VP Income & Growth Portfolio seeks long-term growth of capital
as well as current income. The fund pursues a total return and dividend yield
that exceeds those of the S&P 500 by investing in stocks of companies with
strong dividend growth potential.
*Subject to state availability
THERE IS NO ASSURANCE THAT ANY PORTFOLIO/ FUND WILL ACHIEVE ITS STATED
OBJECTIVE. More detailed information, including a description of each
Portfolio's/Fund's investment objective and policies, and a description of risks
involved in investing in each of the Portfolios/Funds and each
Portfolio's/Fund's fees and expenses, is contained in the prospectuses for
Panorama Fund, Oppenheimer Funds, VIP Fund II, and American Century VP, current
copies of which are attached to this Prospectus. Information contained in the
Panorama Fund, Oppenheimer Funds, VIP Fund II, and American Century VP
prospectuses should be read carefully before making allocation to any
Sub-Account of the Separate Account.
Voting Rights
As long as the Separate Account continues to operate as a unit investment trust
under the Investment Company Act of 1940, the Contract Owner during the lifetime
of the Annuitant, or the beneficiary after the Annuitant's death, will be
entitled to give instructions as to how the shares of the Funds held in the
Separate Account (or other securities held in lieu of such shares) deemed
attributable to the Contract should be voted at meetings of shareholders of the
Funds or the Trusts. Those persons entitled to give voting instructions will be
determined as of the record date for the meeting.
The number of Fund shares held in the Separate Account deemed attributable to a
Contract prior to its Maturity Date and during the lifetime of the Annuitant
will be determined by dividing the Contract's value held in each Sub-Account of
the Separate Account, if any, by $100. Fractional votes are counted. After the
Maturity Date or after the death of the Annuitant, the number of Fund shares
deemed attributable to the Contract will be based on the liability for future
Variable Monthly Annuity payments under the Contract as of the record date and
thus the voting rights will decrease as payments are made.
Contact Owners or beneficiaries will receive proxy material and a form with
which voting instructions may be given. Fund shares held by the Separate Account
as to which no effective instructions have been received or which are
attributable to assets transferred from the Company's general account will be
voted for or against any proposition in the same proportion as the shares as to
which instructions have been received.
In situations where the Annuitant is not the Contract Owner, the Annuitant will
have the right to instruct the Contract Owner with respect to the votes
attributable to any vested interest the Contract Owner has in the Contract. The
Company's obligation in this instance will be to make available to the Contract
Owner copies of the proxy material for distribution to the Annuitant. Votes
representing interests as to which the Contract Owner is not instructed may, in
turn, be voted by the Contract Owner in his discretion.
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.
The Fixed Account
The Fixed Account (subject to state availability) is an investment option within
the General Account of the Company. 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." 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.
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
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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 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, 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.
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
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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
Panorama Fund, Oppenheimer Funds, VIP Fund II, and American Century VP,
including amounts paid for advisory and management fees, which are described in
the accompanying Fund Prospectuses.
Deduction for Transfer Fee
Subject to certain conditions (see Transfers), 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 per calendar year during the Annuity Period. If, during the
Accumulation Period, more than the number of
Contingent Deferred Sales Charge
Against Amount Withdrawn?
-------------------------
7%
6%
5%
4%
3%
2%
1%
0%
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) and (iii) transfers made under the Rebalancing Program. (See
Rebalancing Program.)
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 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 Amount described later, the following
table shows Contingent Deferred Sales Charges:
Year Applicable
---------------
During 1st Year since Purchase Payment Accepted
During 2nd Year since Purchase Payment Accepted
During 3rd Year since Purchase Payment Accepted
During 4th Year since Purchase Payment Accepted
During 5th Year since Purchase Payment Accepted
During 6th Year since Purchase Payment Accepted
During 7th Year since Purchase Payment Accepted
Thereafter
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The Contingent Deferred Sales Charge is assessed against the amounts remaining
in the Sub-Account from which the withdrawal occurred. If a withdrawal is made
from more than one Sub-Account, the Contingent Deferred Sales Charge is assessed
against the amounts remaining in such Sub-Accounts in the same proportion to
which the withdrawal amount bears to the total value of such Sub-Accounts. If a
withdrawal causes the entire Sub-Account value to be withdrawn, then the
Contingent Deferred Sales Charge will be assessed against the amounts remaining
in the Sub-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, 1999, 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.
No Contingent Deferred Sales Charge will be imposed on the redemption of "excess
contributions" to a plan qualifying for special income tax treatment ("Qualified
Plan"), TSAs or IRAs. "Excess Contributions" (including excess aggregate
contributions) will be defined as provided in the Internal Revenue Code and
applicable regulations.
Owners of certain IRA or non-qualified Flex Extra variable annuity contracts
issued by MassMutual that are beyond the sales charge period may exchange such
contracts for a Contract (the "Flex Extra exchange program"). When an eligible
Flex Extra contract is exchanged for a Contract, no Contingent Deferred Sales
Charge shall apply to initial purchase payments made pursuant to the exchange
but all subsequent purchase payments shall be subject to Contingent Deferred
Sales Charges.
Owners of IRA or non-qualified Account A, Account B and Account E variable
annuity contracts previously issued by Connecticut Mutual Life Insurance Company
may exchange such contracts for a Contract. When eligible Account A, B and E
contracts are exchanged for a Contract, no Contingent Deferred Sales Charge
shall apply to initial purchase payments made pursuant to the exchange, but any
subsequent purchase payments will be subject to the Contingent Deferred Sales
Charge.
The Flex Extra exchange program and the Accounts A, B and E exchange programs
are subject to state availability. The Company may terminate these exchange
programs at any time at its sole discretion. See the Statement of Additional
Information for further information about the Flex Extra exchange program or
contact your registered representative or call the Service Center at (800)
569-6576.
Free Withdrawals
The Contract Owner may withdraw the greater of:
(a) the portion of the Contract Value attributable to positive investment
results, if any, on the date of withdrawal; or
(b) 10% of Purchase Payments remaining in the Contract on the withdrawal date
reduced by any Free Withdrawal(s) previously taken during the current
Contract Year.
Withdrawals must be taken first from investment earnings, if any, and next from
Purchase Payments. Withdrawals which are not attributable to investment earnings
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 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. A change in Contract Owner may trigger income
tax consequences. (See Tax Status - General.)
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
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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 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 or older on the proposed Issue
Date ("Maximum Issue Age").
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
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 cumulative
Purchase Payments without prior consent of the Company is $1 million. For
Contract Owners over Age 75 on the Issue Date, the maximum total Purchase
Payments without prior consent of the Company 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.
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. 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 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 two
(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 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.
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
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all Fixed Account amounts credited to the Contract on such Valuation Date.
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.
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.
Transfers
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 for each subsequent transfer permitted. (see Charges
and Deductions - Deduction for Transfer Fee) 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 are transferred first; then amounts attributed to the next
oldest Purchase Payment are 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.
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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.
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 pro-portion 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.
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 Contract Value of at least $5,000
to complete the Contract 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.
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A Contract Owner participating in the Dollar Cost Averaging program may not also
be participating in the Rebalancing Program. (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.)
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.
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.
Withdrawals
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.)
Systematic Withdrawals
The Company permits a Systematic Withdrawal Plan which enables a Contract Owner
to pre-authorize a periodic exercise
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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). Contract Owners can choose the frequency at which
withdrawals will be made, i.e., monthly, quarterly, semi-annually or annually.
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 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 withdrawal request.
All the provisions relating to withdrawals contained in the Contract are
applicable to the Systematic Withdrawal Plan, including the minimum withdrawal
amount of $250. The Systematic Withdrawal Plan is not available to Contract
Owners who are currently utilizing the Automatic Investment Plan Option, the
Rebalancing Program or the 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.
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.
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 Purchase Payments less any subsequent withdrawals,
including any applicable charges.
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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.
Proceeds Payable on Death
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 become payable.
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 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.
Death Benefit Options During the Accumulation Period
A Beneficiary who is not the surviving spouse of the Contract Owner 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 Beneficiary who is the surviving spouse of the Contract Owner 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.
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Payment to the Beneficiary, in any form other than 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.
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.
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.)
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.
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.
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.
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.
Annuity Provisions
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 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
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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 Contract 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 ten (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.
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.
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.
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.
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.
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 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.
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.
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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 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 - 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 (subject to state availability).
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.
Distribution
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. MML Distributors, LLC ("MML
Distributors"), an ultimate subsidiary of MassMutual serves as a principal
underwriter for the Contracts. MML Distributors is located at 1414 Main Street,
Springfield, MA 01144-1013. 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 1414 Main Street,
Springfield, MA 01144-1013. 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.
The Company will accept, by agreement with a limited number of broker-dealers,
electronic data transmissions of Application information, along with wire
transmittals of initial Purchase Payments from the broker-dealers to the Annuity
Service Center for purchase of the Contract. Please contact your broker-dealer
representative to receive more information about electronic data transmission of
Application information.
It is anticipated that the offering of the Contracts will be continuous.
Performance Measures
The Company may show the performance under the Contracts in the following ways:
Standardized Average Annual Total Return
The Company will show the Standardized Average Annual Total Return for the
Sub-Accounts of the Separate Account which have been in existence for more than
one year. As prescribed by the rules of the SEC, the Standardized Average Annual
Total Return is the effective annual compounded rate of return that would have
produced the cash
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redemption value over the stated period had the performance remained constant
throughout. The Standardized Average Annual Total Return assumes a single $1000
payment made at the beginning of the period and full redemption at the end of
the period. It reflects a deduction for the contingent deferred sales charge,
the annual contract maintenance charge and all other Fund, Separate Account, and
Contract level charges except premium taxes, if any. The annual contract
maintenance charge is apportioned among the Sub-Accounts based upon the
percentages of inforce Contracts investing in each of the Sub-Accounts.
For sub-accounts of the Separate Account which have been in existence for less
than one year, the Company will show the aggregate total return as permitted by
the SEC. The aggregate total return assumes a single one thousand dollar payment
made at the beginning of the period and full redemption at the end of the
period. It reflects the change in unit value and a deduction of the contingent
deferred sales charge.
The Company may choose to show Standardized Average Annual Total Returns based
on the inception of the underlying Fund.
Additional Performance Measures
The performance figures discussed in this section are calculated on the basis of
the historical performance of the Funds, and may assume the Contracts were in
existence prior to January 23, 1996 (which they were not). Beginning January 23,
1996 (inception date), actual Accumulation Unit values are used for the
calculations. The difference between the first set of additional performance
measures, PERCENTAGE CHANGE and ANNUALIZED RETURNS on Accumulation Unit Values,
and the second set, the NONSTANDARDIZED ANNUAL and AVERAGE ANNUAL TOTAL RETURNS,
is that the second set includes the deduction of the Annual Contract Maintenance
Charge, the first set does not. Additional details follow.
ACCUMULATION UNIT VALUES; PERCENTAGE CHANGE AND ANNUALIZED RETURNS. The Company
will show the PERCENTAGE CHANGE in the value of an Accumulation Unit for a
Sub-Account with respect to one or more periods. The ANNUALIZED RETURN, or
average annual change in Accumulation Unit Values, may also be shown with
respect to one or more periods. For a one year period, the PERCENTAGE CHANGE and
the ANNUALIZED RETURN are effective annual rates of return and are equal. For
periods greater than one year, the ANNUALIZED RETURN is the effective annual
compounded rate of return for the periods stated. Since the value of an
Accumulation Unit reflects the Separate Account, the Panorama Series Fund
expenses, the Oppenheimer Fund expenses and subject to state availability, VIP
Fund II expenses and American Century VP expenses (See Table of Fees and
Expenses), the PERCENTAGE CHANGE and ANNUALIZED RETURN also reflect these
expenses.
These percentages, however, do not reflect the Contract Maintenance Charge and
the contingent deferred sales charge or premium taxes (if any), which if
included would reduce the percentages reported.
The NON-STANDARDIZED ANNUAL TOTAL RETURN for a Sub-Account is the effective
annual rate of return that would have produced the ending Accumulated Value of
the stated one year period.
The NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN for a Sub-Account is the
effective annual compounded rate of return that would have produced the ending
Accumulated Value over the stated period had the performance remained constant
throughout.
Note: The NON-STANDARDIZED ANNUAL TOTAL RETURN will be less than the
NON-STANDARDIZED ANNUALIZED RETURN on Accumulation Unit values for the same
period due to the effect of the Annual Contract Maintenance Charge.
Additionally, the magnitude of this difference will depend on the size of the
Accumulated Value from which the Annual Contract Maintenance Charge is deducted.
YIELD AND EFFECTIVE YIELD. The Company may also show yield and effective yield
figures for the Money Market Sub-Account over a seven-day period, which is then
"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 investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Money
Market Sub-Account is assumed to be reinvested. Therefore the effective yield
will be slightly higher than the yield because of the compounding effect of this
assumed reinvestment. These figures do not reflect the contingent deferred sales
charge or premium taxes (if any), which if included would reduce the yields
reported.
The performance measures discussed above reflect results of the Funds and are
not intended to indicate or predict future performance. For more detailed
information see the Statement of Additional Information.
Performance information for the Separate Account Sub-Accounts may be: (a)
compared to other variable annuity separate accounts or other investment
products surveyed by Lipper Analytical Services, a nationally recognized
independent reporting service or similar services that rank mutual funds and
other investment companies by overall performance, investment objectives and
assets; (b) tracked by other ratings services, companies, publications or
persons who rank separate accounts or other investment products on overall
performance or other criteria; and (c) included in data bases that produce
reports and illustrations by organizations such as CDA Weisenberger. Performance
figures will be calculated in accordance with standardized methods established
by each reporting service.
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The Company may also show the application of general mathematical principles in
connection with the Contracts.
Tax Status
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. This discussion is based upon The Company's understanding of
the present Federal income tax laws as they are currently interpreted by the
Internal Revenue Service. No representation is made as to the likelihood of the
continuation of the present Federal income tax laws, or of the current
interpretation by the Internal Revenue Service. 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 generally not taxed on increases in the value of a Contract until
distribution occurs, either in the form of a lump sum payment or other
non-periodic distribution 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 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 received 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.
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 Contract 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 Contract. 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 Funds underlying the Contracts
will be managed by the Investment Adviser for the Funds 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 invest-
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ments 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 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 would 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.
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.
Tax Treatment of Assignments
A transfer of ownership, assignment or pledge of a Contract may be a taxable
event. Contract Owners should therefore consult competent tax advisers should
they wish to transfer, assign or pledge their Contracts.
Income Tax Withholding
All distributions or the portion thereof which is includible in the gross income
of a payee 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 payee, in most cases, may elect not to
have taxes withheld or to have withholding done at a different rate. Special
rules limit the ability of a payee to elect no withholding where the payee fails
to provide a U.S. residence address or federal taxpayer identification number.
Effective January 1, 1993, certain distributions from Qualified Plans under
Section 401, 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 lives or joint life expectancies 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. Payments that are not eligible for rollover remain subject to the
withholding rules described in the preceding paragraph.
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.
Penalty Tax
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 has
become 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.)
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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 rights 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 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.
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
non-forfeitability of interests; nondiscrimination in eligibility and
participation; and the tax treatment of distributions, withdrawals and
surrenders. (See Tax Treatment of Withdrawals -Qualified Contracts.) 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.
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.) 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.
Roth IRAs
Section 408A of the Code establishes the specially designated Roth IRA to which
eligible individuals may contribute. Contributions to a Roth IRA are not
deductible and are limited based on modified adjusted gross income. Qualified
distributions from Roth IRAs are not included in income. Distributions that are
not qualified distributions are treated first as a return of investment to the
extent of the individual's contributions to Roth IRAs and as a taxable
distribution to the extent of any excess. An individual (other that a married
individual filing separately) with an adjusted gross income of $100,000 or less
may roll over distributions within 60 days from a regular IRA to a Roth IRA or
may convert a regular IRA into a Roth IRA. The rollover would be subject to tax;
however, it would not be subject to the 10% premature distribution penalty tax.
If the rollover oc-
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curs during 1998, the income will be spread out over four years.
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.) 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 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.
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, but all Contract Values must be held for the exclusive benefit of the
employees under it. 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.
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), 408(b) (Individual Retirement Annuities) and 408A (Roth
IRAs). 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 penalty tax will not apply to a rollover from a
conversion of a traditional IRA into a Roth IRA. 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; (f) distributions made to an alternate payee pursuant to
a qualified domestic relations order; (g) beginning in 1998, distributions made
for qualified higher education expenses, and (h) beginning in 1998,
distributions made for a qualified "first-home" purchase, subject to a $10,000
lifetime cap. The exceptions stated in (d) and (f) above do not apply in the
case of an Individual Retirement Annuity. The exceptions stated in (g) and (h)
above apply to Individual Retirement Annuities. The exception stated in (c)
above applies to an Individual Retirement Annuity without the requirement that
there be a separation from service. In addition, for calendar years beginning
January 1, 1997, withdrawals from IRAs by certain unemployed persons for payment
of health insurance premiums are not subject to the tax penalty. Exceptions
applicable to an Individual Retirement Annuity are applicable to a Roth IRA.
Qualified distributions from Roth IRAs are not subject to the penalty tax.
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Generally, distributions from a Qualified Plan of a 5% owner or from an IRA must
commence no later than April 1 of the calendar year, following the year in which
the (employee attains age 70 1/2) (and from all others in Qualified) (Plans at
the later of age 70 1/2) (or when the employee retires.) 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. There are no required minimum
distributions for a Roth IRA.
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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APPENDIX A
IRA DISCLOSURE STATEMENT
This statement is designed to assist you in understanding the requirements of
Federal tax law which apply to your Individual Retirement Annuity ("IRA"),
Spousal IRA , Roth IRA, or your Simplified Employee Pension IRA ("SEP- IRA") for
employer contributions. If you desire further information regarding your IRA, it
may be obtained either from your registered representative or from any district
office of the Internal Revenue Service.
The growth in value of the annuity is neither guaranteed nor projected.
Seven-Day Review Period
You have seven (7) days after you sign your application to review this statement
and the Prospectus without obligation. If you notify the company either orally
or in writing within this seven-day period that you do not wish to keep your
contract, your entire Purchase Payment will be refunded to you.
Annuity Service Center
H305
P.O. Box 9067
Springfield, MA 01102-9067
Eligibility Requirements
All persons with earned compensation are eligible for Individual Retirement
Annuities ("IRAs"). Additionally, if you have a spouse who has earned no
compensation (and you file a joint tax return), you may establish an IRA on
behalf of your spouse. Of course, if you have a working spouse who has earned
compensation, that spouse may establish his or her own IRA. Lastly, a divorced
or legally separated spouse may treat taxable alimony or separate maintenance
payments as compensation for purposes of establishing an IRA.
The Annuity as an IRA
When this Annuity is issued as an IRA, the contract is amended to provide that
the contract is both non-transferable and non-forfeitable.
Contributions and Deductions
As a result of significant changes made by the Tax Reform Act of 1986,
contributions to your IRA are limited at two levels. First, there are limits on
the amount of contributions which may be deducted for income tax purposes.
Second, there is a limit with respect to the amount of nondeductible
contributions which can be made. The Small Business Job Protection Act of 1996
and The Taxpayer Relief Act of 1997 may also affect IRA contributions and
withdrawals.
For tax years beginning after 1997, an individual who is not an active
participant in an employer-maintained retirement plan is eligible to make
deductible contributions to an IRA equal to the lesser of 100% of compensation
or $2,000. A spouse who is not an active participant in an employer-maintained
retirement plan during any part of a year but whose spouse is a plan participant
may made a deductible IRA contribution, subject to phase-out at adjusted gross
income between $150,000 and $160,000. Furthermore, an individual who files a
joint return and who has less taxable compensation than his spouse may
contribute to a spousal IRA and deduct the lesser of $2,000 or the sum of (a)
that individual's includable compensation for the tax year plus (b) includable
compensation of the individual's spouse reduced by the spouse's allowable IRA
deduction and Roth IRA contribution for the tax year.
However, if you or your spouse (if you file a joint return) is an active
participant in an employer-maintained retirement plan, your IRA deduction may be
reduced or eliminated entirely at certain levels of adjusted gross income. For
tax years beginning after 1997, phase-out ranges for deductible IRA
contributions increase annually until 2005 or 2007. Specifically, the adjusted
gross income phase-out range in 1998 for individuals with a single or head of
household filing status is $30,000 to $40,000, increasing annually to $50,000 to
$60,000 in 2005. For married individuals filing a joint return, the phase-out
range in 1998 is $50,000 to $60,000, increasing annually to $80,000 to $100,000
in 2007. The phase-out range in any year for a married individual filing
separately is $0 to $10,000. In all cases, the IRA deduction will be phased out
ratably within the respective ranges.
Nevertheless, you may still make designated nondeductible IRA contributions to
the extent of the excess of (1) the lesser of $2,000 ($4,000 in the case of a
Spousal IRA), or 100% of compensation annually, over (2) the applicable IRA
deduction limit. You may also choose to make a contribution nondeductible even
if you could have deducted part or all of the contribution. Interest or other
earnings on your IRA contribution, whether from deductible or nondeductible
contributions, will not be taxed until distributed to you.
For purposes of the above discussion, you are an "active participant" in an
employer-maintained retirement plan, if you are covered by such plan, even if
you are not yet vested in your retirement benefit. However, an individual who is
a participant in an eligible state deferred compensation plan, as defined in
Code section 457(b), is not considered to be an "active participant".
In order to qualify for a particular tax year, IRA contribu-
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tions must be made during such tax year or by the deadline for filing your
income tax return for that year (not including extensions). For calendar year
taxpayers the deadline is generally April 15.
If you make contributions to an IRA, Roth IRA or Education IRA in excess of the
combined deductible and nondeductible limits, you may be liable for a
nondeductible excise tax of 6% of the amount of the excess. You may withdraw an
excess contribution together with the net income attributable to the excess, on
or before the due date (including extensions of time) for filing your Federal
income tax return and the excess amount will be treated as if you never
contributed it, regardless of the size of the contribution. The accompanying
distribution of the net income, however, is includable in income for the year in
which the excess contribution is made. Excess amounts which are not withdrawn by
this method are subject to the 6% excise tax in the year of contribution and are
carried over and taxed each year until the year the excess is reduced.
No contribution may be made by you to your IRA during or after the tax year in
which you attain age 70 1/2, other than rollover distributions.
Special tax rules apply in the case of Roth IRAs.
Spousal IRAs
If your spouse has no compensation for the year and you file a joint return, you
may set up and make contributions to an IRA for your spouse, as well as for
yourself. Subject to the active participant rules discussed above, the maximum
amount that you can deduct for contributions to both IRAs is the lesser of
$4,000, or 100% of compensation reduced by the spouse's allowable IRA deduction
and Roth IRA contribution for the tax year. You may not deduct, however, more
than $2,000 to either IRA for any year
SEP-IRAs
Under a SEP-IRA agreement, your employer may contribute 15% of your
compensation, up to $30,000, to your IRA each year. The contribution and
interest earned is excludable from your income until such time as it is
distributed to you.
You must withdraw any excess contribution made to your SEP-IRA by your employer
before the date for filing your return. If you do not, you are liable for the 6%
excise tax discussed above. SEP-IRAs are also generally subject to the other
requirements applicable to IRAs.
Roth IRAs
Roth IRAs are specially designated IRAs. Roth IRAs are subject to the same rules
as traditional IRAs except for certain special rules. Contributions to Roth IRAs
are not deductible and are limited based on modified adjusted gross income. You
may make a contribution to a Roth IRA even if you are an active participant in
an employer-maintained retirement plan. You may also make contributions to a
Roth IRA after age 70 1/2.
You may contribute a maximum of $2,000 per year to all IRAs (deductible, non
deductible and Roth IRAs). This $2,000 annual limit does not include rollover
contributions. The $2,000 maximum annual contribution to a Roth IRA phases out
for individuals with a single or head of household filing status with modified
adjusted gross income between $95,000 and $110,000. For married individuals
filing a joint return, the maximum annual contribution to a Roth IRA phases out
with modified adjusted gross income between $150,000 and $160,000.
Qualified distributions from Roth IRAs are not included in income and are not
subject to the 10% tax on premature distributions. To be qualified, a
distribution must not be made before the end of the five year tax period
beginning with the first tax year a contribution to a Roth IRA is made, and the
distribution must be made: (a) on or after the date on which you attain age
59 1/2; or (b) to your beneficiary or your estate after your death; or (c) as a
result of your being disabled; or (d) to pay for qualified first-time homebuyer
expenses.
Distributions that are not qualified distributions are treated first as a return
of investment to the extent of your contributions to Roth IRAs and as a taxable
distribution to the extent of any excess. Roth IRAs are not subject to required
minimum distribution rules or to incidental death benefit rules.
If you are not married filing separately and if your adjusted gross income for a
tax year does not exceed $100,000, you may roll over distributions within 60
days from a traditional IRA to a Roth IRA or you may convert a traditional IRA
into a Roth IRA. While the rollover would be subject to tax, it would not be
subject to the 10% premature distribution penalty tax. If the rollover occurs
during 1998, the taxable amount is included in gross income ratably over four
tax years.
Rollover Contributions and Transfers
You are permitted to withdraw any portion of the value of your IRA and reinvest
it in another individual retirement annuity or account, but not more frequently
than once in any one-year period. Such withdrawals may also be made from other
IRAs and contributed to this contract. Such a withdrawal of funds from one IRA
and subsequent reinvestment in another IRA is called a "rollover contribution".
In order to qualify as a tax-free rollover contribution, the entire portion of
the withdrawal must be reinvested in another IRA within 60 days after the date
it is received. Of course, you will not be allowed a tax deduction for the
amount of any rollover contribution.
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A similar type of rollover contribution can be made with the proceeds of an
eligible rollover distribution or a lump-sum distribution from a qualified
retirement plan. Such a distribution must also be invested in the IRA within 60
days of receipt. A lump sum distribution is one made from a Qualified Plan: (1)
because of your death; (2) after you reached age 59 1/2 ; (3) because you left
your job (unless you are self-employed); or (4) after you become permanently
disabled (but only if you are self-employed). To be considered a lump sum, the
distribution must also be made entirely in a single tax year and must represent
the entire value of your account in the retirement plan (and in all plans of a
similar type sponsored by the same employer). Properly made, such a distribution
will not be taxable until you receive payments from the IRA created with it.
Unless you were a self-employed participant in the distributing plan, you may
later roll over such a contribution to another qualified retirement plan as long
as you have not mixed it with any IRA contributions you have deducted from your
income.
Eligible rollover distributions are generally all taxable distributions from
Qualified Plans and Section 403(b) annuities except for: (1) amounts paid over
your life or life expectancy; or (2) installments for periods of years spanning
ten (10) years or more; or (3) required minimum distributions.
Also, if you receive a distribution on account of a plan termination you may
make a rollover contribution to an IRA.
In addition to rollover contributions, you may also have the assets of one IRA
directly transferred (without any distribution to you) to another IRA. Direct
IRA to IRA transfers are not subject to the one-year waiting period applicable
to IRA rollover contributions.
Special tax rules apply to rollover contributions to a Roth IRA.
Withdrawals
If you withdraw an amount from an IRA during a tax year and you have made both
deductible and nondeductible IRA contributions, the part of the withdrawal that
is from nondeductible contributions (not including interest) is excludable from
income. The amount excludable from income for the tax year is the portion of the
amount withdrawn that has the same ratio to the amount withdrawn as your total
nondeductible IRA contributions (of all your IRAs) have to the total balance of
all your IRAs, including rollover IRAs. The remaining portion of the amount
withdrawn for the tax year is includable in income. For purposes of this
calculation, all your IRAs are treated as one contract and all withdrawals you
make during a tax year are treated as one distribution and the value of the
contract (after adding back distributions made during the year), income on the
contract and investment in the contract are computed at the end of the year.
Special tax rules apply to distributions from Roth IRAs.
Premature Distributions
Premature distributions are amounts you withdraw from your IRA before you are
age 59 1/2 Premature distributions which do not qualify for rollover treatment
are subject to a penalty tax equal to 10% of the amount of the distribution
includable in gross income in the tax year, unless you are totally disabled or
receive the distributions in substantially equal payments (at least annually)
for your life or life expectancy or the joint lives or life expectancies of you
and your beneficiary or unless the distributions are made to your beneficiary on
account of your death. In addition, beginning January 1, 1997, withdrawals from
IRAs for payment of certain medical expenses and withdrawals by certain
unemployed persons for payment of health insurance premiums are not subject to
the 10% penalty tax. Furthermore, for calendar years beginning January 1, 1998,
withdrawals from IRAs for payment of certain qualified higher education expenses
and withdrawals for certain first time homebuyer expenses are not subject to the
penalty tax.
The penalty tax is also applicable to income taxable distributions deemed to
have been made upon disqualification of your IRA as a result of a prohibited
transaction (including, in general, the sale or assignment of your interest in
your IRA to anyone), or as a result of borrowing on your IRA, or using your IRA
as security for a loan.
Special tax rules apply to distributions from Roth IRAs.
Inadequate or Under distribution - 50% Tax
Your IRA is intended to provide retirement benefits over your lifetime. Thus,
Federal law requires that you either (1) receive a lump sum distribution from
your IRA not later than April 1st of the year after the year in which you attain
age 70 1/2 or (2) start to receive periodic payments by that date. If you elect
to receive periodic payments, those payments must be sufficient to pay out the
entire value of your IRA during your life or life expectancy (or over the life
or life expectancies of you and your beneficiary). If the payments are not
sufficient to meet these requirements, an excise tax of 50% will be imposed on
the amount of any underpayment.
Death Benefits
If you should die before receiving any benefits from your IRA, your beneficiary
must either elect (1) to receive the balance of your account in a lump sum
within five (5) years of your death, or (2) have the balance applied to purchase
an immediate annuity payable over the life or life expectancy of the
beneficiary. Such annuity must commence within one year of your death. If your
spouse is your beneficiary, however, distributions are not required to be
distributed until the date you would have attained age 70 1/2, and if your
spouse dies before any distribution to him or her commences, your spouse is
treated as the owner of your IRA for purposes of any required distributions.
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If you should die after benefits have commenced to you, the remaining portion of
your account must be distributed to your beneficiary as rapidly as under the
method of distribution in effect on the date of your death.
Prohibited Transactions
If you engage in certain prohibited transactions with your IRA, the IRA will
lose its exemption from taxation. Depending on the type of prohibited
transaction, you must include in income all or a portion of the fair market
value of the IRA account. Examples of prohibited transactions are: (1) any
borrowing from the account; (2) use of the account as security for a loan; (3)
receipt by you or certain family members of unreasonable compensation for
managing the IRA.
Prototype Status
The Internal Revenue Service currently has not been asked to review the format
of your Massachusetts Mutual Life Insurance Company ("MassMutual") Prototype IRA
or issue a determination letter regarding the qualification of the prototype
IRA. However, an opinion letter is a determination only as to the form of the
IRA, and does not represent a determination as to its merits.
Reporting to the IRS
If you make a designated nondeductible contribution to an IRA for a taxable year
or receive a distribution from an IRA during a taxable year, you are required to
provide such information as the IRS may prescribe on your tax return for the
taxable year, and, to the extent required, for succeeding taxable years. The
information that may be required includes, but is not limited to: (1) the amount
of designated nondeductible contributions for the taxable year; (2) the total
amount of designated nondeductible contributions for all preceding taxable years
that have not previously been withdrawn; (3) the total balance of all your IRAs
as of the close of the calendar year with or within which the taxable year ends;
and (4) the amount of distributions from your IRAs during the taxable year. If
the required information is not shown on your return, all traditional IRA
contributions are presumed to have been deductible. Therefore, they will be
taxable upon withdrawal from the IRA, unless it can be shown, with satisfactory
evidence, that the contributions were nondeductible when they were made.
Whenever you are liable for one of the penalty taxes discussed above (6% for
excess contributions, 10% for premature distributions, or 50% for
underpayments), you must file Form 5329 with the Internal Revenue Service. The
form is to be attached to your income tax return (Form 1040) for the tax year in
which the penalty applies.
Financial Disclosure
The charges which may be made against a contribution to your IRA include the
Custodian's fees (set forth in the Adoption Agreement), and the mortality and
expense risk fee, and other fees for the Separate Account contained in the Fee
Table of the Account Prospectus. The charges which may be made against a
withdrawal are also described in the Prospectus, and you should read the
Panorama Account Prospectus carefully and retain it for your future reference.
Additional Information
For further information about the Contract, you may obtain a Statement of
Additional Information prepared by the Company.
The Table of Contents of this Statement is as follows:
1. Company
2. Independent Accountants
3. Assignment of Contract
4. Distributors
5. Performance Measures
6. Yield and Effective Yield
7. Annuity Provisions
8. Financial Statements
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This Prospectus sets forth the information about C.M. Multi-Account A that a
prospective investor ought to know before investing. Certain additional
information about the Separate Account is contained in a Statement of Additional
Information dated May 1, 1998 which has been filed with the SEC and is
incorporated herein by reference. The Table of Contents for the Statement of
Additional Information appears on the last page of this Prospectus. To obtain a
copy, return this request form to the address shown below or telephone
1-800-234-5606.
- --------------------------------------------------------------------------------
To: C.M. Life Insurance Company
Annuity Products, H563
P.O. Box 9067
Springfield, Massachusetts 01102-9067
Please send me a Statement of Additional Information for Panorama Premier
Name
-----------------------------------------------------------------
Address
-----------------------------------------------------------------
-----------------------------------------------------------------
City State Zip
----------------------------- ------------------ -----
Telephone
---------------------------------------------------------------
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PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
1
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
INDIVIDUAL VARIABLE DEFERRED ANNUITY CONTRACTS
WITH FLEXIBLE PURCHASE PAYMENTS
issued by
C.M. PANORAMA PREMIER SEPARATE ACCOUNT AND
C.M. LIFE INSURANCE COMPANY
MAY 1, 1998
This is not a prospectus. This Statement of Additional Information should be
read in conjunction with the prospectus dated May 1, 1998, for the individual
variable deferred annuity contracts with flexible purchase payments which are
referred to herein.
For a copy of the prospectus call 1-800-569-6576 or write to: C.M. Life
Insurance Company, Panorama Premier, Annuity Service Center, H563, P.O. Box
9067, Springfield, MA 01102-9067.
TABLE OF CONTENTS
Company .................................................................... 2
Independent Accountants .................................................... 2
Assignment of Contract ..................................................... 2
Distributors ............................................................... 3
Performance Measures ....................................................... 4
Yield and Effective Yield .................................................. 5
Annuity Provisions ......................................................... 6
Financial Statements ................................................final pages
1
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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.
Prior to February 29, 1996, the Company was a wholly-owned subsidiary of
Connecticut Mutual Life Insurance Company ("CML"). On February 29, 1996, CML
merged with and into Massachusetts Mutual Life Insurance Company ("MassMutual").
The Company is now a wholly-owned subsidiary of MassMutual. The merger did not
affect any provision of, or rights or obligations under, the Contracts issued by
the Company.
MassMutual is a mutual life insurance company specially chartered by the
Commonwealth of Massachusetts on May 14, 1851. It is currently licensed to
transact life, accident, and health insurance business in all states, the
District of Columbia, Puerto Rico and certain provinces of Canada. MassMutual
had estimated unconsolidated statutory assets in excess of $57 billion, and
estimated total assets under management in excess of $152 billion as of December
31, 1997.
INDEPENDENT ACCOUNTANTS
The audited financial statements of the Panorama Premier segment of C.M.
Multi-Account A included in this Statement of Additional Information have been
so included in reliance on the report of Coopers & Lybrand L.L.P., Springfield,
Massachusetts, independent accountants, given on the authority of that firm as
experts in accounting and auditing.
The audited statements of statutory financial position of C.M. Life Insurance
Company as of December 31, 1997 and 1996 and the related statutory statements of
income, changes in capital stock and surplus and cash flows for each of the
years in the two year period ended December 31, 1997 included in this Statement
of Additional Information have been so included in reliance on the report of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
The statutory statements of income, changes in capital stock and surplus and
cash flows of C.M. Life Insurance Company for the year ended December 31, 1995
included in this registration statement have been audited by Arthur Andersen
LLP, Hartford, Connecticut, independent public accountants, as indicated in
their report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
ASSIGNMENT OF CONTRACT
C.M. Life will not be charged with notice of any assignment of a Contract or of
the interest of any beneficiary or of any other person unless the assignment is
in writing and the original or C.M. Life receives at its Home Office a true copy
thereof. C.M. Life assumes no responsibility for the validity of any assignment.
While the Contracts are generally assignable, all non-tax qualified Contracts
must carry a non-transferability endorsement which precludes their assignment.
For qualified Contracts, the following exceptions and provisions should be
noted:
(1) No person entitled to receive annuity payments under a Contract or
part or all of the Contract's value will be permitted to commute, anticipate,
encumber, alienate or assign such amounts, except upon the written authority of
the Contract Owner given during the Annuitant's lifetime and received in good
order by C.M. Life at its Home Office. To the extent permitted by law, no
Contract nor any proceeds or interest payable thereunder will be subject to the
Annuitant's or any other person's debts, contracts or engagements, nor to any
levy or attachment for payment thereof;
(2) If an assignment of a Contract is in effect on the maturity date, C.M.
Life reserves the right to pay to the assignee in one sum the amount of the
Contract's maturity value to which he is entitled, and to pay any balance of
such value in one sum to the Contract Owner, regardless of any payment options
which the Contract Owner may have elected. Moreover, if an assignment of a
Contract is in effect at the death of the Annuitant prior to the maturity date,
C.M. Life will pay to the assignee in one sum, to the extent that he is
entitled, the greater of (a) the total of all purchase payments, less the net
amount of all partial redemptions, and (b) the Accumulated Value of the
Contract, and
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any balance of such value will be paid to the beneficiary in one sum or applied
under one or more of the payment options elected;
(3) Contracts used in connection with a tax-qualified retirement plan must
be endorsed to provide that they may not be sold, assigned or pledged for any
purpose unless they are owned by the trustee of a trust described in Section
401(a) or by the administrator of an annuity plan described under Section 403(a)
of the Code; and
(4) Contracts issued under a plan for an Individual Retirement Annuity
pursuant to Section 408 of the Code must be endorsed to provide that they are
non-transferable. Such Contracts may not be sold, assigned, discounted, or
pledged as collateral for a loan or as security for the performance of an
obligation or for any other purpose by the Annuitant to any person or party
other than C.M. Life, except to a former spouse of the Annuitant in accordance
with the terms of a divorce decree or other written instrument incident to a
divorce.
Assignments may be subject to federal income tax.
DISTRIBUTORS
MML Distributors, LLC ("MML Distributors"), is the principal underwriter of the
Contracts. MML Investors Services, Inc. ("MMLISI") serves as co-underwriter of
the Contracts. Both MML Distributors and MMLISI are broker-dealers registered
with the Securities and Exchange Commission and members of the National
Association of Securities Dealers, Inc. MML Distributors and MMLISI are indirect
wholly owned subsidiaries of Massachusetts Mutual Life Insurance Company and
affiliates of C.M. Life Insurance Company.
Pursuant to the Underwriting and Servicing Agreement, both MML Distributors and
MMLISI will receive compensation for their activities as underwriters for the
Separate Account. Compensation paid to MMLISI in 1997 was $98,000. No
compensation was paid to MML Distributors in 1997. Commissions will be paid
through MMLISI and MML Distributors to agents and selling brokers for selling
the Contracts. During 1997 and 1996, commission payments amounted to $3,070,825
and $1,780,825 respectively.
MML Distributors may enter into selling agreements with other broker-dealers
which are registered with the Securities and Exchange Commission and are members
of the National Association of Securities Dealers, Inc. ("selling brokers").
Contracts are sold through agents who are licensed by state insurance officials
to sell the Contracts. These agents are also registered representatives of
selling brokers or of MMLISI.
MML Distributors does business under different variations of its name; including
the name MML Distributors, L.L.C. in the states of Illinois, Michigan, Oklahoma,
South Dakota, and Washington, and the name MML Distributors, Limited Liability
Company in the states of Maine, Ohio, and West Virginia.
The offering is on a continuous basis.
PERFORMANCE MEASURES
C.M. Life may show the performance for the Sub-Accounts of the Separate Account
in the following ways:
Standardized Average Annual Total Return
----------------------------------------
C.M. Life will show the "Standardized Average Annual Total Return," formulated
as prescribed by the rules of the SEC, for each Sub-Account. The Standardized
Average Annual Total Return is the effective annual compounded rate of return
that would have produced the cash redemption value over the stated period had
the performance remained constant throughout. The calculation assumes a single
$1,000 payment made at the beginning of the period and full redemption at the
end of the period. It reflects a deduction for the contingent deferred sales
charge, the Annual Contract Maintenance charge and all other Fund, Separate
Account and Contract level charges except premium taxes, if any. The Annual
Contract Maintenance charge is apportioned among the Sub-Accounts based upon
3
<PAGE>
the percentages of in force Contracts investing in each of the Sub-Accounts. The
Company may choose to show Standardized Average Annual Total Returns based on
the inception of the underlying Fund.
For Sub-Accounts of the Separate Account which have been in existence for less
than one year. C.M. Life will show the aggregate total return as permitted by
the SEC. The aggregate total return assumes a single one thousand dollar payment
made at the beginning of the period and full redemption at the end of the
period. It reflects the change in unit value and a reduction of the contingent
deferred sales charge.
The following tables show the Standardized Average Annual Total Return for the
Sub-Accounts for the period ended December 31, 1997.
1 Year Since Inception*
------
Growth Sub-Account 17.28% 18.90%
Total Return Sub-Account 9.19% 9.32%
Oppenheimer Bond Sub-Account 0.78% 2.59%
Oppenheimer Money Sub-Account -2.79% 0.72%
International Equity Sub-Account -0.30% 6.16%
LifeSpan Capital Appreciation Sub-Account 3.58% 11.22%
LifeSpan Balanced Sub-Account 3.01% 8.30%
LifeSpan Diversified Income Sub-Account 3.62% 4.94%
* Inception of the Contract was January 23, 1996
Additional Performance Measures
-------------------------------
The performance figures discussed below, are calculated on the basis of the
historical performance of the Funds, and may assume the Contracts were in
existence prior to January 23, 1996 (which they were not). Beginning January 23,
1996 (inception date), actual Accumulation Unit values are used for the
calculations.
The difference between the first set, ANNUALIZED RETURNS on Accumulation Unit
Values, and the second set, the NON-STANDARDIZED ANNUAL and AVERAGE ANNUAL TOTAL
RETURNS, is that the second set includes the deduction of the Annual Contract
Maintenance Charge, whereas the first set does not. Additional details follow.
Accumulation Unit Values: Annualized Returns.
---------------------------------------------
C.M. Life will show the ANNUALIZED RETURN, or average annual change in
Accumulation Unit values, for one or more periods. For one year, the Annualized
Return is the effective annual rate of return. For periods greater than one
year, the Annualized Return is the effective annual compounded rate of return
for the periods stated. Since the value of an Accumulation Unit reflects the
Separate Account and Fund expenses (See Table of Fees and Expenses in the
Prospectus), the Annualized Returns also reflect these expenses. However, these
percentages do not reflect the Annual Contract Maintenance Charge and the
contingent deferred sales charge or premium taxes (if any), which if included
would reduce the percentages reported by C.M. Life.
4
<PAGE>
Annualized Accumulation Unit Value Return
-----------------------------------------
For Periods Ending 12/31/97
---------------------------
<TABLE>
<CAPTION>
Portfolio (Inception) 1 Year 3 Years 5 Years 10 Years Since Inception
- --------------------- ------ ------- ------- -------- ---------------
<S> <C> <C> <C> <C> <C>
Growth (1/21/82)........................................... 24.61% 25.68% 18.48% 17.01% 16.69%
Total Return (9/30/82)..................................... 17.15% 15.95% 11.68% 12.22% 12.26%
Oppenheimer Bond (4/3/85).................................. 7.74% 8.70% 6.72% 7.89% 8.22%
Oppenheimer Money (4/3/85)*................................ 3.86% 3.97% 3.24% 4.31% 4.45%
International Equity (5/13/92)............................. 6.60% 9.07% 9.22% N/A 7.14%
LifeSpan Capital Appreciation (9/1/95)..................... 10.97% N/A N/A N/A 14.45%
LifeSpan Balanced (9/1/95)................................. 10.64% N/A N/A N/A 12.12%
LifeSpan Diversified Income (9/1/95)....................... 10.95% N/A N/A N/A 9.30%
</TABLE>
* Although the Oppenheimer Money Fund commenced operations on 4/3/85, the
information necessary to calculate returns is available only for 1987 and later
years.
The NON-STANDARDIZED ANNUAL TOTAL RETURN for a Sub-Account is the effective
annual rate of return that would have produced the ending Accumulated Value of
the stated one-year period.
The NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN for a Sub-Account is the
effective annual compounded rate of return that would have produced the ending
Accumulated Value over the stated period had the performance remained constant
throughout.
Note: The NON-STANDARDIZED ANNUAL TOTAL RETURN will be less than the
NON-STANDARDIZED ANNUALIZED RETURN on Accumulation Unit values for the same
period due to the effect of the Annual Contract Maintenance Charge.
Additionally, the magnitude of this difference will depend on the size of the
Accumulated Value from which the annual Administrative Charge is deducted.
The performance figures discussed above reflect historical results of the Funds
and are not intended to indicate or to predict future performance.
Performance information for the Sub-Accounts may be: (a) compared to other
variable annuity separate accounts or other investment products surveyed by
Lipper Analytical Services, a nationally recognized independent reporting
service or similar service that rank mutual funds and other investment companies
by overall performance, investment objectives and assets; (b) tracked by other
ratings services, companies, publications or persons who rank separate accounts
or other investment products on overall performance or other criteria; and (c)
included in data bases that can be used to produce reports and illustrations by
organizations such as CDA Wiesenberger. Performance figures will be calculated
in accordance with standardized methods established by each reporting service.
YIELD AND EFFECTIVE YIELD
C.M. Life may show yield and effective yield figures for the Money Market
Sub-Account. "Yield" refers to the income generated by an investment in the
Money Market Sub-Account over a seven-day period, which is then "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 investment. The "effective" yield is calculated similarly but,
when annualized, the income earned by an investment in the Money Market
Sub-Account is assumed to be re-invested. Therefore the effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
These figures reflect a deduction for all Fund, Separate Account and Contract
level charges assuming the Contract remains inforce. The figures do not reflect
the contingent deferred sales charge or premium tax deductions (if any), which
if included would reduce the percentages reported.
5
<PAGE>
The 7-Day Yield and Effective Yield for the Money Market Sub-Account for the
period ended December 31, 1997 are as follows:
Before Annual Maintenance Charge After Annual Maintenance Charge
(Annual Maintenance Charge is 0.086%)
7-Day Yield................ 3.09% 7-Yield..................... 3.00%
7-Day Effective Yield...... 3.13% 7-Day Effective Yield....... 3.05%
The performance figures discussed above reflect historical results of the Funds
and are not intended to indicate or to predict future performance.
ANNUITY PROVISIONS
A Variable Annuity is an annuity with payments which; (1) are not predetermined
as to dollar amount; and (2) will vary in amount with the net investment results
of the applicable Sub-Accounts of the Separate Account. Annuity Payments also
depend upon the Age of the Annuitant and any Joint Annuitant and the assumed
interest factor utilized. The Annuity Table used will depend upon the Annuity
Option chosen. The dollar amount of annuity payments after the first is
determined as follows;
1. The dollar amount of the first Annuity Payment is divided by the
value of an Annuity Unit as of the Annuity Date. This establishes
the number of Annuity Units for each Annuity Payment. The number of
Annuity Units remains fixed during the Annuity Period.
2. For each Sub-Account, the fixed number of Annuity Units is
multiplied by the Annuity Unit value on each subsequent Annuity
Payment date.
3. The total dollar amount of each Variable Annuity Payment is the sum
of all Sub-Account Variable Annuity Payments.
(See "Annuity Provisions" in the Prospectus.)
6
<PAGE>
PANORAMA PREMIER HYPOTHETICAL PROJECTIONS
GROWTH
------
$50,000 purchase payment made December 31, 1987
Values prior to current Non-Standardized
year's purchase payment ----------------------------
----------------------- One Average
Year Annual
Cumulative Accumulated Total Total
Date Payments Value Return Return
-----------------------------------------------------------------------
12/31/88 $50,000 $56,405 12.81% 12.81%
12/31/89 $50,000 $75,509 33.87% 22.89%
12/31/90 $50,000 $68,544 -9.22% 11.09%
12/31/91 $50,000 $92,928 35.58% 16.76%
12/31/92 $50,000 $102,862 10.69% 15.52%
12/31/93 $50,000 $123,045 19.62% 16.19%
12/31/94 $50,000 $120,959 -1.70% 13.45%
12/31/95 $50,000 $164,107 35.67% 16.02%
12/31/96 $50,000 $192,703 17.42% 16.17%
12/31/97 $50,000 $240,130 24.61% 16.99%
TOTAL RETURN
------------
$50,000 purchase payment made December 31, 1987
Values prior to current Non-Standardized
year's purchase payment ----------------------------
----------------------- One Average
Year Annual
Cumulative Accumulated Total Total
Date Payments Value Return Return
-----------------------------------------------------------------------
12/31/88 $50,000 $55,013 10.03% 10.03%
12/31/89 $50,000 $66,689 21.22% 15.49%
12/31/90 $50,000 $66,057 -0.95% 9.73%
12/31/91 $50,000 $83,864 26.96% 13.80%
12/31/92 $50,000 $90,953 8.45% 12.71%
12/31/93 $50,000 $104,289 14.66% 13.03%
12/31/94 $50,000 $101,354 -2.81% 10.62%
12/31/95 $50,000 $124,478 22.82% 12.08%
12/31/96 $50,000 $134,866 8.35% 11.66%
12/31/97 $50,000 $158,002 17.15% 12.19%
7
<PAGE>
PANORAMA PREMIER HYPOTHETICAL PROJECTIONS
OPPENHEIMER BOND
----------------
$50,000 purchase payment made December 31, 1987
Values prior to current Non-Standardized
year's purchase payment -------------------
----------------------- One Average
Year Annual
Cumulative Accumulated Total Total
Date Payments Value Return Return
- -------------------------------------------------------------
12/31/88 $50,000 $53,592 7.18% 7.18%
12/31/89 $50,000 $59,736 11.46% 9.30%
12/31/90 $50,000 $63,403 6.14% 8.24%
12/31/91 $50,000 $73,391 15.75% 10.07%
12/31/92 $50,000 $76,975 4.88% 9.01%
12/31/93 $50,000 $85,774 11.43% 9.41%
12/31/94 $50,000 $82,916 -3.33% 7.49%
12/31/95 $50,000 $95,634 15.34% 8.44%
12/31/96 $50,000 $98,786 3.30% 7.86%
12/31/97 $50,000 $106,427 7.74% 7.85%
OPPENHEIMER MONEY
-----------------
$50,000 purchase payment made December 31, 1987
Values prior to current Non-Standardized
year's purchase payment ----------------------
----------------------- One Average
Year Annual
Cumulative Accumulated Total Total
Date Payments Value Return Return
- ---------------------------------------------------------------
12/31/88 $50,000 $52,705 5.41% 5.41%
12/31/89 $50,000 $56,800 7.77% 6.58%
12/31/90 $50,000 $60,487 6.49% 6.55%
12/31/91 $50,000 $63,302 4.65% 6.07%
12/31/92 $50,000 $64,836 2.42% 5.33%
12/31/93 $50,000 $65,948 1.71% 4.72%
12/31/94 $50,000 $67,604 2.51% 4.40%
12/31/95 $50,000 $70,406 4.15% 4.37%
12/31/96 $50,000 $73,087 3.81% 4.31%
12/31/97 $50,000 $75,880 3.82% 4.26%
8
<PAGE>
PANORAMA PREMIER HYPOTHETICAL PROJECTIONS
INTERNATIONAL EQUITY
--------------------
$50,000 purchase payment made December 31, 1992
Values prior to current Non-Standardized
year's purchase payment ----------------------
----------------------- One Average
Year Annual
Cumulative Accumulated Total Total
Date Payments Value Return Return
- ----------------------------------------------------------------
12/31/93 $50,000 $60,075 20.15% 20.15%
12/31/94 $50,000 $59,836 -0.40% 9.39%
12/31/95 $50,000 $65,224 9.00% 9.26%
12/31/96 $50,000 $72,760 11.55% 9.83%
12/31/97 $50,000 $77,534 6.56% 9.17%
LIFESPAN CAPITAL APPRECIATION
- -----------------------------
$50,000purchase payment made December 31, 1995
Values prior to current Non-Standardized
year's purchase payment ----------------------
----------------------- One Average
Year Annual
Cumulative Accumulated Total Total
Date Payments Value Return Return
- ----------------------------------------------------------------
12/31/96 $50,000 $57,904 15.81% 15.81%
12/31/97 $50,000 $64,224 10.92% 13.34%
LIFESPAN BALANCED
-----------------
$50,000 purchase payment made December 31, 1995
Values prior to current Non-Standardized
year's purchase payment ----------------------
----------------------- One Average
Year Annual
Cumulative Accumulated Total Total
Date Payments Value Return Return
- ----------------------------------------------------------------
12/31/96 $50,000 $55,809 11.62% 11.62%
12/31/97 $50,000 $61,719 10.59% 11.10%
LIFESPAN DIVERSIFIED INCOME
---------------------------
$50,000 purchase payment made December 31, 1995
Values prior to current Non-Standardized
year's purchase payment ----------------------
----------------------- One Average
Year Annual
Cumulative Accumulated Total Total
Date Payments Value Return Return
- ----------------------------------------------------------------
12/31/96 $50,000 $52,587 5.17% 5.17%
12/31/97 $50,000 $58,316 10.89% 8.00%
9
<PAGE>
Report Of Independent Accountants
To the Contract Owners of the Panorama Premier Segment of C.M. Multi-Account A
and The Board of Directors of C.M. Life Insurance Company
We have audited the statements of assets and liabilities of the Panorama Total
Return Sub-Account, Panorama Growth Sub-Account, Panorama International Equity
Sub-Account, Panorama LifeSpan Diversified Income Sub-Account, Panorama LifeSpan
Balanced Sub-Account, Panorama LifeSpan Capital Appreciation Sub-Account,
Oppenheimer Money Sub-Account and Oppenheimer Bond Sub-Account (the "Sub-
Accounts") of the Panorama Premier segment of C.M. Multi-Account A as of
December 31, 1997, the related statements of operations for the year then ended,
and the statements of changes in net assets for the period indicated thereon.
These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
verification of securities owned as of December 31, 1997, by confirmation with
Panorama Series Fund, Inc. and Oppenheimer Variable Account Funds. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Panorama Total Return
Sub-Account, Panorama Growth Sub-Account, Panorama International Equity
Sub-Account, Panorama LifeSpan Diversified Income Sub-Account, Panorama LifeSpan
Balanced Sub-Account, Panorama LifeSpan Capital Appreciation Sub-Account,
Oppenheimer Money Sub-Account and Oppenheimer Bond Sub-Account of the Panorama
Premier segment of C.M. Multi-Account A as of December 31, 1997, the results of
their operations for the year then ended, and changes in their net assets for
the period indicated thereon, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
March 11, 1998
1
<PAGE>
C.M. Multi-Account A - Panorama Premier
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments, at Market (Notes 3A and 3B):
Panorama Total Return Sub-Account
24,177,144 shares (Cost $45,268,012) $ 48,354,289
Panorama Growth Sub-Account
16,573,274 shares (Cost $51,412,400) 57,177,795
Panorama International Equity Sub-Account
9,843,142 shares (Cost $12,973,582) 13,386,672
Panorama LifeSpan Diversified Income Sub-Account
7,409,215 shares (Cost $8,426,404) 8,742,874
Panorama LifeSpan Balanced Sub-Account
18,235,378 shares (Cost $21,556,529) 23,341,284
Panorama LifeSpan Capital Appreciation Sub-Account
19,103,807 shares (Cost $23,792,936) 25,790,140
----------------
176,793,054
----------------
Oppenheimer Money Market Sub-Account
13,619,988 shares (Cost $13,619,988) 13,619,988
Oppenheimer Income Sub-Account
540,280 shares (Cost $6,230,753) 6,434,730
----------------
20,054,718
----------------
Total investments 196,847,772
----------------
Dividends receivable 29,022
----------------
Total assets 196,876,794
----------------
Due to C.M. Life Insurance Company 16,811
----------------
NET ASSETS $ 196,859,983
================
</TABLE>
<TABLE>
<CAPTION>
Net assets consisted of: Units Unit Value Net assets
----- ---------- ----------
<S> <C> <C> <C>
Panorama Total Return Sub-Account 3,810,237 12.689528 $ 48,350,108
Panorama Growth Sub-Account 3,900,882 14.655753 57,170,358
Panama International Equity Sub-Account 1,128,689 11.858034 13,384,037
Panorama LifeSpan Diversified Income Sub-Account 750,520 11.648276 8,742,262
Panorama LifeSpan Balanced Sub-Account 1,882,142 12.401154 23,340,728
Panorama LifeSpan Capital Appreciation Sub-Account 1,988,330 12.970161 25,788,957
Oppenheimer Money Market Sub-Account 1,270,662 10.741883 13,649,307
Oppenheimer Income Sub-Account 577,928 11.133260 6,434,226
----------------
$ 196,859,983
================
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
C.M. Multi-Account A - Panorama Premier
STATEMENT OF OPERATIONS
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
Panorama
Panorama Panorama LifeSpan
Total Panorama International Diversified
Return Growth Equity Income
Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $2,236,976 $1,672,345 $ 113,344 $ 132,335
Expenses
Mortality and expense risk fees (Note 4) 392,002 440,395 97,069 57,079
---------- ---------- ---------- ----------
Net investment income (Note 3C) 1,844,974 1,231,950 16,275 75,256
---------- ---------- ---------- ----------
Net realized and unrealized
gain on investments
Net realized gain on investments
(Notes 3B, 3C and 6) 125,668 350,940 97,075 141,119
Change in net unrealized
appreciation of investments 2,289,961 4,650,165 270,130 211,187
---------- ---------- ---------- ----------
Net gain on investments 2,415,629 5,001,105 367,205 352,306
---------- ---------- ---------- ----------
Net increase in net assets
resulting from operations $4,260,603 $6,233,055 $ 383,480 $ 427,562
========== ========== ========== ==========
<CAPTION>
Panorama
Panorama LifeSpan
LifeSpan Capital Oppenheimer Oppenheimer
Balanced Appreciation Money Bond
Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $ 435,398 $ 436,765 $ 528,711 $ 256,051
Expenses
Mortality and expense risk fees (Note 4) 230,634 237,708 143,090 47,284
---------- ---------- ---------- ----------
Net investment income (Note 3C) 204,764 199,057 385,621 208,767
---------- ---------- ---------- ----------
Net realized and unrealized
gain on investments
Net realized gain on investments
(Notes 3B, 3C and 6) 116,847 83,111 - 14,428
Change in net unrealized
appreciation of investments 1,367,082 1,627,933 - 184,181
---------- ---------- ---------- ----------
Net gain on investments 1,483,929 1,711,044 - 198,609
---------- ---------- ---------- ----------
Net increase in net assets
resulting from operations $1,688,693 $1,910,101 $ 385,621 $ 407,376
========== ========== ========== ==========
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
C.M. Multi-Account A - Panorama Premier
STATEMENT OF CHANGES IN NET ASSETS
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
Panorama
Panorama Panorama LifeSpan
Total Panorama International Diversified
Return Growth Equity Income
Sub-Account Sub-Account Sub-Account Sub-Account
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Increase in net assets
Operations:
Net investment income $ 1,844,974 $ 1,231,950 $ 16,275 $ 75,256
Net realized gain on investments 125,668 350,940 97,075 141,119
Change in net unrealized
appreciation of investments 2,289,961 4,650,165 270,130 211,187
------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations 4,260,603 6,233,055 383,480 427,562
------------ ------------ ------------ ------------
Capital transactions:
Net contract payments 10,966,415 14,781,455 3,579,300 2,860,309
Withdrawal of funds (827,884) (878,869) (205,373) (79,222)
Transfer due to death benefits (328,830) (189,084) (7,481) -
Transfers between Sub-Accounts
and the Fixed Account 18,932,159 22,423,795 6,068,143 2,906,587
------------ ------------ ------------ ------------
Net increase in net assets resulting
from capital transactions 28,741,860 36,137,297 9,434,589 5,687,674
------------ ------------ ------------ ------------
Total increase 33,002,463 42,370,352 9,818,069 6,115,236
NET ASSETS, at beginning of the year 15,347,645 14,800,006 3,565,968 2,627,026
------------ ------------ ------------ ------------
NET ASSETS, at end of the year 48,350,108 57,170,358 13,384,037 8,742,262
============ ============ ============ ============
<CAPTION>
Panorama
Panorama LifeSpan
LifeSpan Capital Oppenheimer Oppenheimer
Balanced Appreciation Money Bond
Sub-Account Sub-Account Sub-Account Sub-Account
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Increase in net assets
Operations:
Net investment income $ 204,764 $ 199,057 $ 385,621 $ 208,767
Net realized gain on investments 116,847 83,111 - 14,428
Change in net unrealized
appreciation of investments 1,367,082 1,627,933 - 184,181
------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations 1,688,693 1,910,101 385,621 407,376
------------ ------------ ------------ ------------
Capital transactions:
Net contract payments 5,876,887 6,942,332 64,204,637 2,384,346
Withdrawal of funds (972,925) (332,973) (191,954) (171,016)
Transfer due to death benefits (23,806) (38,628) (61,386) -
Transfers between Sub-Accounts
and the Fixed Account 5,674,230 6,671,402 (56,137,816) 1,279,253
------------ ------------ ------------ ------------
Net increase in net assets resulting
from capital transactions 10,554,386 13,242,133 7,813,481 3,492,583
------------ ------------ ------------ ------------
Total increase 12,243,079 15,152,234 8,199,102 3,899,959
NET ASSETS, at beginning of the year 11,097,649 10,636,723 5,450,205 2,534,267
------------ ------------ ------------ ------------
NET ASSETS, at end of the year 23,340,728 25,788,957 13,649,307 6,434,226
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
C.M. Multi-Account A - Panorama Premier
STATEMENT OF CHANGES IN NET ASSETS
For The Period January 23, 1996 (Commencement of Operations) through
December 31, 1996
<TABLE>
<CAPTION>
Panorama
Panorama Panorama LifeSpan Panorama
Total Panorama International Diversified LifeSpan
Return Growth Equity Income Balanced
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss) $ (38,101) $ (32,150) $ (8,125) $ 1,185 $ (25,686)
Net realized gain (loss)
on investments 131,669 91,938 (6,326) 39,028 2,632
Change in net unrealized
appreciation of investments 796,316 1,115,230 142,961 105,283 417,673
------------ ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations 889,884 1,175,018 128,510 145,496 394,619
------------ ------------ ------------ ------------ ------------
Capital transactions:
Net contract payments 7,378,546 5,994,148 1,344,434 847,453 5,074,416
Withdrawal of funds (191,537) (122,188) (3,556) (20,064) (235,004)
Transfers between Sub-Accounts
and the Fixed Account 7,270,752 7,753,028 2,096,580 1,654,141 5,863,618
------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting
from capital transactions 14,457,761 13,624,988 3,437,458 2,481,530 10,703,030
------------ ------------ ------------ ------------ ------------
Total increase 15,347,645 14,800,006 3,565,968 2,627,026 11,097,649
NET ASSETS, at beginning of the year - - - - -
------------ ------------ ------------ ------------ ------------
NET ASSETS, at end of the year $ 15,347,645 $ 14,800,006 $ 3,565,968 $ 2,627,026 $ 11,097,649
============ ============ ============ ============ ============
<CAPTION>
Panorama
LifeSpan
Capital Oppenheimer Oppenheimer
Appreciation Money Bond
Sub-Account Sub-Account Sub-Account
------------ ------------ ------------
<S> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss) $ (23,179) $ 97,292 $ 53,501
Net realized gain (loss)
on investments 61,983 - 3,730
Change in net unrealized
appreciation of investments 369,270 - 19,796
------------ ------------ ------------
Net increase in net assets
resulting from operations 408,074 97,292 77,027
------------ ------------ ------------
Capital transactions:
Net contract payments 4,861,420 38,360,004 1,253,589
Withdrawal of funds (211,687) (106,081) (15,177)
Transfers between Sub-Accounts
and the Fixed Account 5,578,916 (32,901,010) 1,218,828
------------ ------------ ------------
Net increase in net assets resulting
from capital transactions 10,228,649 5,352,913 2,457,240
------------ ------------ ------------
Total increase 10,636,723 5,450,205 2,534,267
NET ASSETS, at beginning of the year - - -
------------ ------------ ------------
NET ASSETS, at end of the year $ 10,636,723 $ 5,450,205 $ 2,534,267
============ ============ ============
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
C.M. Multi-Account A - Panorama Premier
Notes To Financial Statements
1. HISTORY
C.M. Multi-Account A (the "Separate Account") was established as a separate
investment account of C.M. Life Insurance Company ("C.M. Life"). C.M. Life
was formerly a wholly-owned stock life insurance subsidiary of Connecticut
Mutual Life Insurance Company (CML). On February 29, 1996, CML merged with
and into Massachusetts Mutual Life Insurance Company ("MassMutual"). Upon
the merger, CML's existence ceased and MassMutual became the surviving
company under the name Massachusetts Mutual Life Insurance Company. C.M.
Life became a wholly-owned subsidiary of MassMutual. The Separate Account
operates as a registered unit investment trust pursuant to the Investment
Company Act of 1940 ("the 1940 Act") and the rules promulgated thereunder.
C.M. Life maintains two segments within the Separate Account. The segments
are Panorama Premier and OFFITBANK. These notes and the financial statements
presented herein describe and consist only of the Panorama Premier segment
(the "Segment").
2. INVESTMENT OF THE SEGMENT'S ASSETS
The Segment maintains eight Sub-Accounts. Each Sub-Account invests in shares
of certain investment portfolios of two investment companies: Panorama
Series Fund, Inc. ("Panorama Fund") (prior to May 1, 1996 named Connecticut
Mutual Financial Services Series Fund I, Inc.), and the Oppenheimer Variable
Account Funds ("Oppenheimer Trust"). Panorama Trust is a registered,
open-end, diversified management investment company with six of its
portfolios currently available to Panorama Premier contract owners: Total
Return, Growth, International Equity, LifeSpan Diversified Income, LifeSpan
Balanced and LifeSpan Capital Appreciation. Oppenheimer Trust is a
registered, open-end, diversified management investment company with two of
its Funds currently available to Panorama Premier contract owners:
Oppenheimer Money and Oppenheimer Bond. OppenheimerFunds, Inc., a controlled
subsidiary of MassMutual, serves as investment adviser to the Panorama Fund
and Oppenheimer Trust.
In addition to the eight Sub-Accounts of the Segment, a contract owner may
also allocate funds to the Fixed Account, which is part of C.M. Life's
General Account. Because of applicable exemptive and exclusionary
provisions, interests in the Fixed Account are not registered under the
Securities Act of 1933, as amended, nor has the Fixed Account been
registered under the Investment Company Act of 1940.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Segment in preparation of the financial statements in
conformity with generally accepted accounting principles.
A. Investment Valuation
Investments in Panorama Fund and Oppenheimer Trust are each stated at market
value which is the net asset value per share of each of the respective
underlying portfolios.
B. Accounting for Investments
Investment transactions are accounted for on the trade date and identified
cost is the basis followed in determining the cost of investments sold for
financial statement purposes. Dividend income is recorded on the ex-dividend
date.
6
<PAGE>
Notes To Financial Statements (Continued)
C. Federal Income Taxes
Operations of the Segment form a part of the total operations of C.M. Life,
and the Segment is not taxed separately. C.M. Life is taxed as a life
insurance company under the provisions of the 1986 Internal Revenue Code, as
amended. The Segment will not be taxed as a "regulated investment company"
under Subchapter M of the Internal Revenue Code. Under existing federal law,
no taxes are payable on investment income and realized capital gains
attributable to contracts which depend on the Segment's investment
performance. Accordingly, no provision for federal income tax has been made.
C.M. Life may, however, make such a charge in the future if an unanticipated
change of current law results in a company tax liability attributable to the
Segment.
D. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
4. CHARGES
There are no deductions for sales charges made from purchase payments.
However, if a withdrawal is made, a contingent deferred sales charge may be
assessed by C.M. Life. Any premium taxes relating to the Contracts may be
deducted from the purchase payments or contract value when annuity payments
or withdrawals are made. Premium taxes generally range from 0% to 3.5%.
There is also an annual contract maintenance fee (currently $30 per
Contract), imposed each year for Contract maintenance and related
administrative expenses.
For assuming mortality and expense risks, C.M. Life deducts a charge equal,
on an annual basis, to 1.25% of the average daily net asset value of the
Separate Account's assets. C.M. Life also deducts an administrative charge
equal, on an annual basis, to .15% of the average daily net assets of the
Separate Account. These charges cover expenses in connection with the
administration of the Separate Account and the contracts.
5. DISTRIBUTION AGREEMENTS
MML Distributors, LLC ("MML Distributors"), a wholly-owned subsidiary of
MassMutual, serves as principal underwriter of the contracts pursuant to an
underwriting and servicing agreement among MML Distributors, C.M. Life and
C.M. Multi-Account A (prior to May 1, 1996, MML Distributors was known as
Connecticut Mutual Financial Services, LLC). MML Distributors is registered
with the Securities and Exchange Commission (the "SEC") as a broker-dealer
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. (the "NASD"). MML Distributors may
enter into selling agreements with other broker-dealers who are registered
with the SEC and are members of the NASD in order to sell the contracts.
Effective March 1, 1996, MML Investors Services, Inc. ("MMLISI") serves as
co-underwriter of the contracts pursuant to underwriting and servicing
agreements among MMLISI, C.M. Life and C.M. Multi-Account A. MMLISI is
registered with the SEC as a broker-dealer under the Securities Exchange Act
of 1934 and is a member of the NASD. Registered representatives of MMLISI
sell the contracts as authorized variable life insurance agents under
applicable state insurance laws.
Pursuant to underwriting and servicing agreements, commissions or other fees
due to registered representatives for selling and servicing the contracts
are paid by C.M. Life on behalf of MML Distributors or MMLISI. MML
Distributors and MMLISI also receive compensation for their actions as
underwriters of the contracts.
7
<PAGE>
Notes To Financial Statements (Continued)
6. PURCHASES AND SALES OF INVESTMENTS
<TABLE>
<CAPTION>
Panorama Panorama
Panorama Panorama LifeSpan Panorama LifeSpan
Total Panorama International Diversified LifeSpan Capital Oppenheimer Oppenheimer
For The Year Ended Return Growth Equity Income Balanced Appreciation Money Bond
December 31, 1997 Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------------- ----------- ----------- ------------ ----------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cost of purchases $ 33,189,903 $ 39,897,541 $ 10,903,588 $ 8,168,615 $ 12,786,743 $ 12,768,204 $ 18,485,772 $ 4,597,341
Proceeds from sales $ 2,468,662 $ 2,432,544 $ 1,458,743 $ 2,366,296 $ 2,024,367 $ 1,264,426 $ 10,315,989 $ 978,990
</TABLE>
7. NET INCREASE IN ACCUMULATION UNITS
<TABLE>
<CAPTION>
Panorama Panorama
Panorama Panorama LifeSpan Panorama LifeSpan
Total Panorama International Diversified LifeSpan Capital Oppenheimer Oppenheimer
For The Year Ended Return Growth Equity Income Balanced Appreciation Money Bond
December 31, 1997 Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------------- ----------- ----------- ----------- ----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Units purchased 1,063,300 1,366,404 341,080 265,750 522,891 600,696 6,328,326 218,259
Units withdrawn (101,623) (69,651) (15,761) (15,814) (82,919) (35,654) (23,668) (7,069)
Units transferred
between divisions 1,431,604 1,345,748 482,792 250,356 452,033 513,250 (5,560,966) 121,500
----------- ----------- ----------- ----------- ----------- ------------ ----------- ------------
Net increase 2,393,281 2,642,501 808,111 500,292 892,005 1,078,292 743,692 332,690
Units, at beginning of
the year 1,416,956 1,258,381 320,578 250,228 990,137 910,038 526,970 245,238
----------- ----------- ----------- ----------- ----------- ------------ ----------- ------------
Units, at end of the year 3,810,237 3,900,882 1,128,689 750,520 1,882,142 1,988,330 1,270,662 577,928
=========== =========== =========== =========== =========== ============ =========== ============
</TABLE>
8
<PAGE>
C.M. LIFE INSURANCE COMPANY
-----
STATUTORY FINANCIAL STATEMENTS
as of December 31, 1997 and 1996
and for the years ended December 31, 1997, 1996 and 1995
<PAGE>
Report Of Independent Accountants
To the Board of Directors and Policyholders
of C.M. Life Insurance Company
We have audited the accompanying statutory statements of financial position of
C.M. Life Insurance Company as of December 31, 1997 and 1996, and the related
statutory statements of income, changes in capital stock and surplus, and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. The statutory
financial statements of C.M. Life Insurance Company for the year ended December
31, 1995 were audited by other auditors whose report, dated February 15, 1996,
expressed an adverse opinion on those statements as to fair presentation in
conformity with generally accepted accounting principles and expressed an
unqualified opinion in conformity with accounting practices prescribed or
permitted by the Insurance Department of the State of Connecticut.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described more fully in Note 1, these financial statements were prepared in
conformity with statutory accounting practices of the National Association of
Insurance Commissioners and the accounting practices prescribed or permitted by
the Department of Insurance of the State of Connecticut ("statutory accounting
principles"), which practices differ from generally accepted accounting
principles. The effects on the financial statements of the variances between the
statutory basis of accounting and generally accepted accounting principles,
although not reasonably determinable at this time, are presumed to be material.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the financial position
of C.M. Life Insurance Company at December 31, 1997 and 1996, or the results of
its operations or its cash flows for the years then ended.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of C.M. Life Insurance Company at
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended, on the statutory basis of accounting described in Note
1.
COOPERS & LYBRAND, L.L.P.
Springfield, Massachusetts
February 6, 1998
28
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION
December 31,
1997 1996
---- ----
(in Millions)
Assets:
Bonds ...................................... $ 664.5 $ 736.5
Common stocks .............................. 61.4 55.6
Mortgage loans ............................. 101.6 33.8
Other investments .......................... 2.2 -
Policy loans ............................... 142.5 132.9
Cash and short-term investments ............ 88.4 63.7
-------- --------
1,060.6 1,022.5
Investment and insurance amounts
receivable ............................... 30.1 32.9
Federal income tax receivable .............. - 7.1
Transfer due from separate account ......... 32.0 24.3
-------- --------
1,122.7 1,086.8
Separate account assets .................... 1,096.5 779.8
-------- --------
$2,219.2 $1,866.6
======== ========
See Notes to Statutory Financial Statements.
29
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION (continued)
<TABLE>
<CAPTION>
December 31,
1997 1996
---- ----
($ In Millions Except for Par Value
and Share Amounts
<S> <C> <C>
Liabilities:
Policyholders' reserves and funds .............. $ 951.0 $ 907.5
Policyholders' claims and other benefits ....... 4.5 3.8
Payable to parent .............................. 13.6 9.6
Federal income taxes payable ................... 6.1 -
Asset valuation reserve ........................ 22.7 18.5
Investment reserves ............................ 3.9 3.3
Other liabilities .............................. 7.7 34.3
-------- --------
1,009.5 977.0
Separate account reserves and liabilities ...... 1,096.5 779.8
-------- --------
2,106.0 1,756.8
-------- --------
Capital stock and surplus:
Common stock, $200 par value
50,000 shares authorized
12,500 shares issued and outstanding ........ 2.5 2.5
Paid-in and contributed surplus ................ 43.8 43.8
Surplus ........................................ 66.9 63.5
-------- --------
113.2 109.8
-------- --------
$2,219.2 $1,866.6
======== ========
</TABLE>
See Notes to Statutory Financial Statements.
30
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF INCOME
Years ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
Revenue:
Premium Income ............................ $331.3 $314.4 $260.8
Net investment and other income ........... 72.1 76.4 84.4
------ ------ ------
403.4 390.8 345.2
------ ------ ------
Benefits and expenses:
Policy benefits and payments .............. 100.4 99.0 58.9
Addition to policyholders' reserves, funds
and separate accounts ................... 190.0 210.3 211.4
Operating expenses ........................ 49.5 45.4 32.1
Commissions ............................... 33.5 25.0 14.1
State taxes, licenses and fees ............ 3.5 3.2 5.0
------ ------ ------
376.9 382.9 321.5
------ ------ ------
Net gain from operations before federal
income taxes ............................ 26.5 7.9 23.7
Federal income taxes ...................... 19.0 6.3 9.4
------ ------ ------
Net gain from operations .................. 7.5 1.6 14.3
Net realized capital gain (loss) .......... 0.1 0.6 (0.5)
------ ------ ------
Net income ................................ $ 7.6 $ 2.2 $ 13.8
====== ====== ======
See Notes to Statutory Financial Statements.
31
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF CHANGES IN CAPITAL STOCK AND SURPLUS
Years Ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
Capital stock and surplus equity,
beginning of year ............................ $109.8 $113.2 $103.8
Increases (decreases) due to:
Net income ................................... 7.6 2.2 13.8
Change in asset valuation and investment
reserves .................................... (4.8) (1.9) (9.2)
Change in non-admitted assets and other ...... (0.2) (2.7) (1.2)
Net unrealized capital gain (loss) ........... 0.8 (1.0) 6.0
------ ------ ------
3.4 (3.4) 9.4
------ ------ ------
Capital stock and surplus equity, end of year.. $113.2 $109.8 $113.2
====== ====== ======
See Notes to Statutory Financial Statements.
32
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF CASH FLOWS
Years Ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
Operating activities:
Net income ....................................... $ 7.6 $ 2.2 $ 13.8
Additions to policyholders' reserves and funds
net of transfers to separate accounts ........... 44.2 41.6 84.2
Net realized capital gain (loss) ................. (0.1) (0.6) 0.5
Other changes .................................... 0.5 (0.8) (0.6)
------ ------ ------
Net cash provided by operating activities ........ 52.2 42.4 97.9
------ ------ ------
Investing activities:
Loans and purchases of investments ............... (438.6) (184.9) (491.9)
Sales and maturites of investments and
receipts from repayment of loans ................ 411.1 191.1 406.0
------ ------ ------
Net cash provided by (used in) investing
activities ........................................ (27.5) 6.2 (85.9)
------ ------ ------
Increase in cash and short-term investments ......... 24.7 48.6 12.0
Cash and short-term investments, beginning of
year ................................................ 63.7 15.1 3.1
------ ------ ------
Cash and short-term investments, end of year ........ $ 88.4 $ 63.7 $ 15.1
====== ====== ======
See Notes to Statutory Financial Statements.
33
<PAGE>
Notes To Statutory Financial Statements
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
C.M. Life Insurance Company (the Company) is a wholly owned stock life insurance
subsidiary of Massachusetts Mutual Life Insurance Company ("MassMutual"). On
March 1, 1996, the operations of the Company's former parent, Connecticut Mutual
Life Insurance Company, were merged into MassMutual. The Company is primarily
engaged in the sale of flexible premium universal life insurance and variable
annuity products distributed through career agents. The Company is licensed to
sell life insurance and annuities in Puerto Rico, the District of Columbia and
all 50 states except New York.
The accompanying statutory financial statements, except as to form, have been
prepared in conformity with the statutory accounting practices of the National
Association of Insurance Commissioners ("NAIC") and the accounting practices
prescribed or permitted by the Insurance Department of the State of Connecticut.
The accompanying statutory financial statements are different in some respects
from GAAP financial statements. The more significant differences are as follows:
(a) acquisition costs, such as commissions and other costs directly related to
acquiring new business, are charged to current operations as incurred, whereas
GAAP would require these expenses to be capitalized and recognized over the life
of the policies; (b) policy reserves are based upon statutory mortality and
interest requirements without consideration of withdrawals, whereas GAAP
reserves would be based upon reasonably conservative estimates of mortality,
morbidity, interest and withdrawals; (c) bonds are generally carried at
amortized cost whereas GAAP generally requires they be valued at fair value; (d)
deferred income taxes are not provided for book-tax timing differences as would
be required by GAAP; and (e) payments received for universal life products and
variable annuities are reported as premium revenue, whereas under GAAP, these
payments would be recorded as deposits to policyholders' account balances.
The NAIC is currently engaged in an extensive project to codify statutory
accounting principles ("Codification") with a goal of providing a comprehensive
guide of statutory accounting principles for use by insurers in all states. This
comprehensive guide, which has not been approved by the NAIC or any state
insurance department includes seventy-two Statements of Statutory Accounting
Principles ("SSAPs") and is expected to be effective no earlier than January 1,
1999. The effect of adopting these SSAPs shall be reported as an adjustment to
surplus on the effective date. Management is currently reviewing the impact of
Codification. However, since the SSAPs have not been finalized, the ultimate
impact cannot be determined at this time.
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, as
well as disclosures of contingent assets and liabilities, at the date of the
financial statements. Management must also make estimates and assumptions that
affect the amounts of revenues and expenses during the reporting period. Future
events, including changes in the levels of mortality, morbidity, interest rates
and asset valuations, could cause actual results to differ from the estimates
used in the financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a description of the Company's principal accounting policies
and practices.
A. Investments
Bonds and stocks are valued in accordance with rules established by the National
Association of Insurance Commissioners. Generally, bonds are valued at amortized
cost, preferred stocks in good standing at cost, and common stocks at fair
value.
Mortgage loans are valued at unpaid principal less unamortized discount.
Policy loans are carried at the outstanding loan balance less amounts unsecured
by the cash surrender value of the policy.
Short-term investments are stated at amortized cost, which approximates fair
value.
In compliance with regulatory requirements, the Company maintains an Asset
Valuation Reserve and an Interest Maintenance Reserve. The Asset Valuation
Reserve and other investment reserves stabilize surplus against fluctuations in
the value of stocks, as well as declines in the value of bonds and mortgage
loans.
Notes To Statutory Financial Statements (Continued)
The Interest Maintenance Reserve captures after-tax realized capital gains and
losses which result from changes in the overall level of
34
<PAGE>
interest rates for all types of fixed income investments, as well as other
financial instruments, including financial futures, U. S. Treasury purchase
commitments, options and interest rate swaps. This reserve is amortized into
income using the grouped method over the remaining life of the investment sold
or over the remaining life of the underlying asset. Net realized after tax
capital gains of $2.0 million in 1997 and $0.4 million in 1996 and net realized
after tax capital losses of $0.9 million in 1995 were transferred to the
Interest Maintenance Reserve. Amortization of the Interest Maintenance Reserve
into net investment income amounted to $0.1 million in 1997, 1996 and 1995. At
December 31, 1997, 1996 and 1995, the Interest Maintenance Reserve consisted of
a net loss deferral which was recorded as a reduction of surplus.
Realized capital gains and losses, less taxes, not includable in the Interest
Maintenance Reserve, are recognized in net income. Realized capital gains and
losses are determined using the specific identification method. Unrealized
capital gains and losses are included in surplus.
B. Separate Accounts
Separate account assets and liabilities represent segregated funds administered
and invested by the Company for the benefit of variable annuity contract
holders. The assets consist principally of marketable securities reported at
fair value. Transfers due from separate account represents the policyholders'
account values in excess of statutory benefit reserves. Premiums, benefits and
expenses of the separate accounts are reported in the Statutory Statement of
Income. Reserves for these life and annuity contracts have been established
using assumed interest rates and valuation methods that will provide reserves at
least as great as those required by law and contract provisions. The Company
receives administrative and investment advisory fees from these accounts.
C. Non-admitted Assets
Assets designated as "non-admitted" (principally prepaid agent commissions,
other prepaid expenses and the Interest Maintenance Reserve, when in a net loss
deferral position) are excluded from the statutory statement of financial
position. These amounted to $5.7 million and $6.6 million as of December 31,
1997 and 1996, respectively and changes therein are charged directly to surplus.
D. Policyholders' Reserves and Funds
Policyholders' reserves for life contracts are developed using accepted
actuarial methods computed principally on the net level premium and the
Commissioners' Reserve Valuation Method bases using the American Experience and
1980 Commissioners' Standard Ordinary mortality tables with assumed interest
rates ranging from 4.0 to 4.5 percent.
Reserves for individual annuities are based on accepted actuarial methods,
principally at interest rates ranging from 5.5 to 9.0 percent. Reserves for
policies and contracts considered investment contracts have a carrying value of
$115.6 million and $113.7 million at December 31, 1997 and 1996, respectively
(fair value of $116.0 million and $113.7 million at December 31, 1997 and 1996,
respectively as determined by discounted cash flow projections).
E. Premium and Related Expense Recognition
Life insurance premium revenue is recognized annually on the anniversary date of
the policy. Annuity premium is recognized when received. Commissions and other
costs related to the issuance of new policies, maintenance and settlement costs
are charged to current operations when incurred.
F. Cash and Short-term Investments
For purposes of the Statutory Statement of Cash Flows, the Company considers all
highly liquid short-term investments purchased with a maturity of twelve months
or less to be cash and short-term investments.
35
<PAGE>
Notes To Statutory Financial Statements (Continued)
3. FEDERAL INCOME TAXES
Provision for federal income taxes is based upon the Company's best estimate of
its tax liability. No deferred tax effect is recognized for temporary
differences that may exist between financial reporting and taxable income.
Accordingly, the reporting of miscellaneous temporary differences, such as
reserves and acquisition costs, resulted in effective tax rates which differ
from the statutory tax rate.
The Internal Revenue Service has completed its examination of the Company's
income tax returns through the year 1991 and is currently examining the Company
for the years 1992 through 1995. The Company believes any adjustments resulting
from such examinations will not materially affect its financial statements.
The Company plans to file a separate company 1997 federal income tax return.
Federal tax payments were $6.8 million in 1997, $17.6 million in 1996 and $10.7
million in 1995.
4. CAPITAL STOCK AND SURPLUS
The Board of Directors of MassMutual has authorized the contribution of funds to
the Company sufficient to meet the capital requirements of all states in which
the Company is licensed to do business. Substantially all of the statutory
capital stock and surplus is subject to dividend restrictions relating to
various state regulations which limit the payment of dividends without prior
approval. Under these regulations, $10.7 million of capital stock and surplus is
available for distribution to the shareholder in 1998 without prior regulatory
approval.
5. RELATED PARTY TRANSACTIONS
MassMutual and the Company have an agreement whereby MassMutual, for a fee, will
furnish the Company, as required, operating facilities, human resources,
computer software development and managerial services. Investment and
administrative services are provided to the Company pursuant to a management
services agreement with MassMutual. Similar arrangements were in place with
Connecticut Mutual Life Insurance Company, the Company's former parent, prior to
its merger with MassMutual. Fees incurred under the terms of these agreements
were $39.7 million, $45.9 million and $34.0 million in 1997, 1996 and 1995,
respectively.
Prior to March 1, 1996, the Company had an underwriting agreement with its
affiliates GR Phelps and MML Distributors. Under this agreement, the affiliates
paid commissions and received the cash flows from variable annuity contract
fees. Effective March 1, 1996, this agreement was cancelled, and the Company
began paying all commissions and retained the right to the related future cash
flows from contract fees.
The Company cedes a portion of its life insurance business to MassMutual and
other insurers in the normal course of business. The Company's retention limit
per individual insured is $4 million; the portion of the risk exceeding the
retention limit is reinsured with other insurers. The Company is contingently
liable with respect to ceded reinsurance in the event any reinsurer is unable to
fulfill its contractual obligations.
The Company has a modified coinsurance quota-share reinsurance agreement with
Mass Mutual whereby the Company cedes 75% of the premiums on certain universal
life policies. In return, MassMutual pays the Company a stipulated expense
allowance, death and surrender benefits, and a modified coinsurance adjustment.
Reserves for payment of future benefits for the ceded policies are retained by
the Company.
The Company also has a stop-loss agreement with MassMutual, with maximum
coverage at $25.0 million, under which the Company cedes claims which, in
aggregate, exceed $35.6 million in 1997, $28.1 million in 1996, and $24.2
million in 1995. For each of the years, the limit was not exceeded. The Company
paid approximately $1.0 million, $0.4 million, and $0.6 million in premiums
under the agreement in 1997, 1996 and 1995, respectively.
36
<PAGE>
Notes To Statutory Financial Statements (Continued)
6. INVESTMENTS
The Company maintains a diversified investment portfolio. Investment policies
limit concentration in any asset class, geographic region, industry group,
economic characteristic, investment quality or individual investment.
A. Bonds
The carrying value and estimated fair value of investments in bonds as of
December 31, 1997 and 1996 are as follows:
December 31, 1997
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
(in Millions)
U. S. Treasury securities
and obligations of U.S.
government corporations
and agencies $ 104.3 $ 2.2 $ 0.2 $ 106.3
Debt securities issued by
foreign governments 4.6 0.0 0.3 4.3
Mortgage-backed securities 38.8 1.0 0.2 39.6
State and local governments 20.0 0.3 - 20.3
Corporate debt securities 471.8 15.6 1.9 485.6
Utilities 25.0 1.1 - 26.1
------- ------ ----- -------
Total $ 664.5 $ 20.2 $ 2.6 $ 682.1
======= ====== ===== =======
December 31, 1996
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
(In Millions)
U. S. Treasury securities
and obligations of U.S.
government corporations
and Agencies $138.8 $ 2.2 $ 1.0 $140.0
Debt securities issued by
foreign governments 3.9 0.1 - 4.0
Mortgage-backed securities 37.4 0.7 0.7 37.4
State and local governments 10.3 0.2 0.1 10.4
Industrial securities 509.2 11.6 3.7 517.1
Utilities 36.9 1.2 0.2 37.9
------ ------ ----- ------
Total $736.5 $ 16.0 $ 5.7 $746.8
====== ====== ===== ======
The carrying value and estimated fair value of bonds at December 31, 1997, by
contractual maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without prepayment penalties.
Estimated
Carrying Fair
Value Value
----- -----
(In Millions)
Due in one year or less $ 34.3 $ 34.3
Due after one year through five years 227.7 232.0
Due after five years through ten years 209.7 217.4
Due after ten years 80.3 83.4
------- ------
552.0 567.1
Mortgage-backed securities, including
securities guaranteed by the U.S.
Government 112.5 115.0
------- ------
Total $ 664.5 $682.1
======= ======
37
<PAGE>
Notes To Statutory Financial Statements (Continued)
Proceeds from sales of investments in bonds were $388.8 million during 1997,
$162.9 million during 1996, and $380.6 million during 1995. Gross capital gains
of $3.8 million in 1997, $1.6 million in 1996, and $3.6 million in 1995 and
gross capital losses of $0.5 million in 1997, $0.9 million in 1996, and $4.7
million in 1995 were realized on those sales, portions of which were included in
the Interest Maintenance Reserve. Estimated fair value of non-publicly traded
bonds is determined by the Company using a pricing matrix.
B. Stocks
Common stocks had a cost of $50.2 million in 1997 and $47.2 million in 1996.
C. Mortgages
The fair value of mortgage loans, as determined from a pricing matrix for
performing loans and the estimated underlying real estate value for
non-performing loans, approximated carrying value.
The Company had restructured loans with book values of $17.3 million and $21.9
million at December 31, 1997 and 1996, respectively. The loans typically have
been modified to defer a portion of the contracted interest payments to future
periods. Interest deferred to future periods totaled $0.2 million in 1997, 1996
and 1995.
D. Other
The carrying value of investments which were non-income producing for the
preceding twelve months was $0.4 million and $2.8 million at December 31, 1997
and 1996, respectively.
It is not practicable to determine the fair value of policy loans as they do not
have a stated maturity.
7. PORTFOLIO RISK MANAGEMENT
The Company manages its investment risks primarily to reduce interest rate and
duration imbalances determined in asset/liability analyses. The fair values of
these instruments, which are not recorded in the financial statements, are based
upon market prices or prices obtained from brokers. The Company does not hold or
issue these financial instruments for trading purposes.
The notional amounts described do not represent amounts exchanged by the parties
and, thus, are not a measure of the exposure of the Company. The amounts
exchanged are calculated on the basis of the notional amounts and the other
terms of the instruments, which relate to interest rates, exchange rates,
security prices or financial or other indexes.
The Company utilizes interest rate swap agreements and options to reduce
interest rate exposures arising from mismatches between assets and liabilities
and to modify portfolio profiles to manage other risks identified. Under
interest rate swaps, the Company agrees to exchange, at specified intervals, the
difference between fixed and floating interest rates calculated by reference to
an agreed-upon notional principal amount. Net amounts receivable and payable are
accrued as adjustments to interest income and included in investment and
insurance amounts receivable on the Statutory Statement of Financial Position.
Gains and losses realized on the termination of contracts are amortized through
the Interest Maintenance Reserve over the remaining life of the associated
contract. At December 31, 1997 and 1996, the Company had swaps outstanding with
notional amounts of $46.5 million and $13.0 million, respectively. The fair
value of these instruments was $0.2 million at December 31, 1997 and $0.1
million at December 31, 1996.
Options grant the purchaser the right to buy or sell a security or enter into a
derivative transaction at a stated price within a stated period. The Company's
option contracts have terms of up to five years. The amounts paid for options
purchased are included in other investments on the Statutory Statement of
Financial Position. Gains and losses on these contracts are recorded at the
expiration or termination date and are amortized through the Interest
Maintenance Reserve over the remaining life of the option contract. At December
31, 1997 and 1996, the Company had option contracts with notional amounts of
$111.3 million and $34.7 million, respectively. The Company's credit risk
exposure was limited to the unamortized costs of $2.2 million and $0.1 million
which had fair values of $2.3 million and $0.1 million at December 31, 1997 and
1996, respectively.
Notes To Statutory Financial Statements (Continued)
The Company utilizes asset swap agreements to reduce exposures, such as currency
risk and prepayment risk, built into certain assets acquired. Cross-currency
interest rate swaps allow investment in foreign currencies, increasing access to
additional investment
38
<PAGE>
opportunities, while limiting foreign exchange risk. The net cash flows from
asset and currency swaps are recognized as adjustments to the underlying assets'
interest income. Gains and losses realized on the termination of these contracts
adjusts the bases of the underlying asset. Notional amounts relating to asset
and currency swaps totaled $1.0 million at December 31, 1997 and 1996. The fair
values of these instruments were an unrealized gain of $0.1 million and an
unrealized loss of $0.1 million at December 31, 1997 and 1996, respectively.
The Company enters into forward U.S. Treasury commitments for the purpose of
managing interest rate exposure. The Company generally does not take delivery on
forward commitments. These commitments are instead settled with offsetting
transactions. Gains and losses on forward commitments are recorded when the
commitment is closed and amortized through the Interest Maintenance Reserve over
the remaining life of the asset. At December 31, 1997 and 1996, the company had
U. S. Treasury purchase commitments which will settle during the following year
with contractual amounts of $3.0 million and $2.0 million, respectively.
The Company is exposed to credit-related losses in the event of nonperformance
by counterparties to derivative financial instruments. This exposure is limited
to contracts with a positive fair value. The amounts at risk in a net gain
position were $2.6 million and $0.1 million at December 31, 1997 and 1996,
respectively. The Company monitors exposure to ensure counterparties are credit
worthy and concentration of exposure is minimized. Additionally, contingent
collateral positions have been obtained with counterparties when considered
prudent.
8. LIQUIDITY
The withdrawal characteristics of the policyholder's reserves and funds,
including separate accounts, and the invested assets which support them at
December 31, 1997 are illustrated below:
(In Millions)
Total policyholders' reserves and funds and,
separate account liabilities $2,047.5
Not subject to discretionary withdrawal (1.4)
Policy loans (142.5)
--------
Subject to discretionary withdrawal $1,903.6
========
Total invested assets, including separate
investment accounts $2,157.1
Policy loans and other invested assets (295.3)
--------
Marketable investments $1,861.8
========
9. BUSINESS RISKS AND CONTINGENCIES
The Company is subject to insurance guaranty fund laws in the states in which it
does business. These laws assess insurance companies amounts to be used to pay
benefits to policyholders and claimants of insolvent insurance companies. Many
states allow these assessments to be credited against future premium taxes. The
Company believes such assessments in excess of amounts accrued will not
materially affect its financial position, results of operations or liquidity.
The Company elected not to admit $1.3 million and $1.6 million of guaranty fund
premium tax offset receivable relating to prior assessments in 1997 and 1996,
respectively.
The Company is involved in litigation arising in and out of the normal course of
its business. Management intends to defend these actions vigorously. While the
outcome of litigation cannot be forseen with certainty, it is the opinion of
management, after consultation with legal counsel, that the ultimate resolution
of these matters will not materially affect its financial position, results of
operations or liquidity.
10. RECLASSIFICATIONS
Certain 1996 and 1995 amounts have been reclassified to conform with the current
year presentation.
39
<PAGE>
Notes To Statutory Financial Statements (Continued)
11. AFFILIATED COMPANIES
The relationship of the Company, its parent and affiliated companies as of
December 31, 1997 is illustrated below. Subsidiaries are wholly-owned by the
parent, except as noted.
Parent
- ------
Massachusetts Mutual Life Insurance Company
Subsidiaries of Massachusetts Mutual Life Insurance Company
- -----------------------------------------------------------
C.M. Assurance Company
C.M. Benefit Insurance Company
C.M. Life Insurance Company
MassMutual Holding Company
MassMutual Holding Company Two, Inc. (Sold in March 1996)
MassMutual of Ireland, Limited
MML Bay State Life Insurance Company
MML Distributors, LLC
Subsidiaries of MassMutual Holding Company
------------------------------------------
GR Phelps, Inc.
MassMutual Holding Trust I
MassMutual Holding Trust II
MassMutual Holding MSC, Inc.
MassMutual International, Inc.
MassMutual Reinsurance Bermuda (Sold in December 1996)
MML Investor Services, Inc.
State House One (Liquidated in December 1996)
Subsidiaries of MassMutual Holding Trust I
------------------------------------------
Antares Leveraged Capital Corporation - 98.5%
Charter Oak Capital Management, Inc. - 80.0%
Cornerstone Real Estate Advisors, Inc.
DLB Acquisition Corporation - 84.8%
Oppenheimer Acquisition Corporation - 88.55%
Subsidiaries of MassMutual Holding Trust II
-------------------------------------------
CM Advantage, Inc. - (Liquidated in December 1997)
CM International, Inc.
CM Property Management, Inc. - (Liquidated in December 1997)
High Yield Management, Inc.
MMHC Investments, Inc.
MML Realty Management
Urban Properties, Inc.
Westheimer 335 Suites, Inc.
Subsidiaries of MassMutual International
----------------------------------------
MassLife Seguros de Vida (Argentina) S. A.
MassMutual International (Bermuda) Ltd.
Mass Seguros de Vida (Chile) S. A.
MassMutual International (Luxemburg) S. A.
MassMutual Holding MSC, Incorporated
------------------------------------
MassMutual/Carlson CBO N. V. - 100%
MassMutual Corporate Value Limited - 46%
9048 - 5434 Quebec, Inc.
Affiliates of Massachusetts Mutual Life Insurance Company
---------------------------------------------------------
MML Series Investment Fund
MassMutual Institutional Funds
Oppenheimer Value Stock Fund
40
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS
Financial Statements Included in Part A
---------------------------------------
Condensed Financial Information
Financial Statements Included in Part B
---------------------------------------
The Registrant
--------------
Report of Independent Accountants
Statement of Assets and Liabilities as of December 31, 1997
Statement of Operations for the year ended December 31, 1997
Statement of Changes in Net Assets for the years ended December 31,
1997 and for the period January 23, 1996 through December 31, 1996
Notes to Financial Statements
The Depositor
-------------
Reports of Independent Accountants
Statutory Statements of Financial Position as of December 31, 1997
and 1996
Statutory Statements of Income for the years ended December 31, 1997,
1996 and 1995
Statutory Statements of Changes in Capital Stock and Surplus for the
years ended December 31, 1997, 1996 and 1995
Statutory Statements of Cash Flows for the years ended December 31,
1997, 1996 and 1995
Notes to Statutory Financial Statements
(b) EXHIBITS
Exhibit 1 Resolution of Board of Directors of the Company
authorizing the establishment of the Separate Account./6/
Exhibit 2 Not Applicable.
Exhibit 3 (i) Principal Underwriting Agreement./1/
(ii) Broker/Dealer Agreement./1/
(iii) Form of Producer's Agreement./1/
(iv) Underwriting and Servicing Agreement./1/
Exhibit 4 Individual Variable Deferred Annuity Contract./1/
Exhibit 5 Application Form./1/
Exhibit 6 (i) Copy of Articles of Incorporation of the Company./2/
(ii) Copy of the Bylaws of the Company./2/
1
<PAGE>
Exhibit 7 Not Applicable.
Exhibit 8 (a) Copy of the Form of Participation Agreement between
Massachusetts Mutual Life Insurance Company, MML Bay State
Life Insurance Company, C.M. Life Insurance Company,
Oppenheimer Funds, Inc. and Oppenheimer Variable Account
Funds./4/
(b) Copy of the Form of Participation Agreement between
Massachusetts Mutual Life Insurance Company, MML Bay State
Life Insurance Company, C.M. Life Insurance Company,
Oppenheimer Funds, Inc. and Panorama Series Fund,
Inc./4/
Exhibit 9 Opinion of and Consent of Counsel./6/
Exhibit 10 (i) Consent of Coopers & Lybrand L.L.P., Independent
Accountants./6/
(ii) Consent of Arthur Andersen LLP, Independent Public
Accountants./6/
(iii) Report of Arthur Andersen LLP, Independent Public
Accountants./6/
(iv) Powers of Attorney./3/
Exhibit 11 Not Applicable.
Exhibit 12 Not Applicable.
Exhibit 13 Form of Schedule of Computation of Performance./5/
Exhibit 14 Not Applicable.
/1/ Incorporated by reference to Registrant's Form N-4 filed
on August 9, 1995
/2/ Incorporated by reference to Post Effective Amendment No.
3 to Registration Statement File No. 33-91072
/3/ Incorporated by reference to Post Effective Amendment No.
4 to Registration No. 333-2347
/4/ Incorporated by reference to Registration Statement File
No. 333-22557, filed on February 28, 1997.
/5/ Incorporated by reference to Post Effective Amendment No.
2 to Registration Statement File No. 33-61679
/6/ Filed herewith.
2
<PAGE>
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
C.M. LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
NAME AND POSITION PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Lawrence V. Burkett, Jr., Director, Director, President and Chief Executive Officer, C.M. Life, since 1996; Executive
President and Chief Executive Officer Vice President and General Counsel, since 1993, Senior Vice President and Deputy
1295 State Street General Counsel, 1992-1993, MassMutual
Springfield, MA 01111
- -------------------------------------------------------------------------------------------------------------------------------
John B. Davies, Director Director, C.M. Life, since 1996; Executive Vice President, since 1994, Associate
1295 State Street Executive Vice President, 1994-1994, General Agent, 1982-1993, MassMutual
Springfield, MA 01111
- -------------------------------------------------------------------------------------------------------------------------------
Stuart H. Reese, Director and Senior Vice Director and Senior Vice President-Investments, C.M. Life, since 1996; Chief
President-Investments Executive Director-Investment Management, since 1997, Senior Vice President, 1993-
1295 State Street 1997, MassMutual; Investment Manager, Aetna Life and Casualty and Affiliates,
Springfield, MA 01111 1979-1993
- -------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OFFICERS (other than those who are also Directors):
- -------------------------------------------------------------------------------------------------------------------------------
Paul D. Adornato Senior Vice President-Operations, C.M. Life, since 1996; Senior Vice President,
140 Garden Street MassMutual, since 1986
Hartford, CT 06154
- -------------------------------------------------------------------------------------------------------------------------------
Anne Melissa Dowling Senior Vice President-Large Corporate Marketing, C.M. Life, since 1996; Senior Vice
140 Garden Street President, MassMutual, since 1996; Chief Investment Officer, Connecticut Mutual
Hartford, CT 06154 Life Insurance Company, 1994-1996; Senior Vice President-International, Travelers
Insurance Co., 1987-1993
- -------------------------------------------------------------------------------------------------------------------------------
Maureen R. Ford Senior Vice President-Annuity Marketing, C.M. Life, since 1996; Senior Vice
140 Garden Street President, MassMutual, since 1996; Marketing Officer, Connecticut Mutual Life
Hartford, CT 06154 Insurance Company, 1989-1996
- -------------------------------------------------------------------------------------------------------------------------------
Isadore Jermyn Senior Vice President and Actuary, C.M. Life, since 1996; Senior Vice President and
1295 State Street Actuary, since 1995, Vice President and Actuary, 1980-1995, MassMutual
Springfield, MA 01111
- -------------------------------------------------------------------------------------------------------------------------------
Edward M. Kline Treasurer, C.M. Life, since 1997; Vice President, since 1989, and Treasurer, since
1295 State Street 1997, MassMutual
Springfield, MA 01111
- -------------------------------------------------------------------------------------------------------------------------------
Ann F. Lomeli Secretary, C.M. Life, since 1988; Vice President, Secretary and Associate General
1295 State Street Counsel, since 1998, Associate Secretary, 1996-1998, MassMutual; Corporate
Springfield, MA 01111 Secretary and Counsel, Connecticut Mutual Life Insurance Company, 1988-1996
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The assets of the Registrant, under state law, are assets of C.M. Life.
C.M. Life Insurance Company is 100% owned by Massachusetts Mutual Life Insurance
Company.
The registrant may also be deemed to be under common control with other separate
accounts established by MassMutual and its life insurance subsidiaries, C.M.
Life Insurance Company and MML Bay State Life Insurance Company, which are
registered as unit investment trusts under the Investment Company Act of 1940.
The discussion that follows indicates those entities owned directly or
indirectly by Massachusetts Mutual Life Insurance Company:
LIST OF SUBSIDIARIES AND AFFILIATES
The following entities are, or may be deemed to be, controlled by MassMutual
through the direct or indirect ownership of such entities' stock.
1. CM Assurance Company, a Connecticut life, accident, disability and health
insurer, all the stock of which is owned by MassMutual.
2. CM Benefit Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
3. C.M. Life Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
4. MML Bay State Life Insurance Company, a Connecticut life and health
insurer, all the stock of which is owned by MassMutual.
5. MML Distributors, LLC, formerly known as Connecticut Mutual Financial
Services, LLC, a registered broker-dealer incorporated as a limited
liability company in Connecticut. MassMutual has a 99% ownership interest
and G.R. Phelps & Co. has a 1% ownership interest herein.
6. MassMutual Holding Company, a Delaware holding company, all the stock of
which is owned by MassMutual.
7. MassMutual of Ireland, Limited., incorporated in the Republic of Ireland,
to operate a group life and health claim office for MassMutual, all of the
stock of which is owned by MassMutual.
8. MML Series Investment Fund, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares of which are
owned by separate accounts of MassMutual and companies controlled by
MassMutual.
9. MassMutual Institutional Funds, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares are owned by
MassMutual.
10. G.R. Phelps & Company, Inc., Connecticut corporation which formerly
operated as a securities broker-dealer, all the stock of which is owned by
MassMutual Holding Company.
11. MML Investors Services, Inc., registered broker-dealer incorporated in
Massachusetts, MassMutual Holding Company owns 86% of the capital stock and
F.R. Phelps & Co., Inc. owns 14% of the capital stock of MML Investors
Services, Inc..
12. MassMutual Holding MSC, Inc., a Massachusetts corporation, which acts as a
holding company for MassMutual positions in investment entities organized
outside the United States. MassMutual Holding Company owns all the
outstanding shares of MassMutual Holding MSC, Inc.
4
<PAGE>
13. MassMutual Holding Trust I, a Massachusetts business trust, which acts as a
holding company for certain MassMutual investment subsidiaries. MassMutual
Holding Company owns all the outstanding shares of MassMutual Holding Trust
I..
14. MassMutual Holding Trust II, a Massachusetts business trust, which acts as
a holding company for certain MassMutual investment subsidiaries.
MassMutual Holding Company owns all the outstanding shares of MassMutual
Holding Trust II.
15. MassMutual International, Inc., a Delaware corporation that acts as a
holding company of and provides services to international insurance
companies, all of the stock of which is owned by MassMutual Holding
Company.
16. MML Insurance Agency, Inc., a licensed insurance broker incorporated in
Massachusetts, all of the stock of which is owned by MML Investors
Services, Inc.
17. MML Securities Corporation, a "Massachusetts Securities Corporation", all
of the stock of which is owned by MML Investors Services, Inc.
18. DISA Insurance Services Agency of America, Inc. (Alabama), a licensed
insurance broker incorporated in Alabama. MML Insurance Agency, Inc. owns
all the shares of outstanding stock.
19. Diversified Insurance Services Agency of America, Inc. (Hawaii), a licensed
insurance broker incorporated in Hawaii. MML Insurance Agency, Inc. owns
all the shares of outstanding stock.
20. MML Insurance Agency of Mississippi, P.C., a Mississippi professional
corporation that operates as an insurance broker, and is controlled by MML
Insurance Agency, Inc.
21. MML Insurance Agency of Nevada, Inc., a Nevada corporation that operates as
an insurance broker, all of the stock of which is owned by MML Insurance
Agency, Inc.
22. MML Insurance Agency of Ohio, Inc., a subsidiary of MML Insurance Agency,
Inc., is incorporated in the state of Ohio and operates as an insurance
broker. The outstanding capital stock is controlled by MML Insurance
Agency, Inc. through a voting trust agreement.
23. MML Insurance Agency of Texas, Inc., a subsidiary of MML Insurance Agency,
Inc., is incorporated in the state of Texas and operates as an insurance
broker. The outstanding capital stock is controlled by MML Insurance
Agency, Inc. through an irrevocable proxy arrangement.
24. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation which
operated a collateralized bond obligation fund. MassMutual Holding MSC,
Inc. and Carlson Investment Management Co. each owns 99% of the outstanding
shares.
25. MassMutual Corporate Value Limited, a Cayman Islands corporation that owns
approximately 93% of MassMutual Corporate Value Partners Limited.
MassMutual Holding MSC, Inc. owns 46.19% of the outstanding capital stock
of MassMutual Corporate Value Limited.
26. MassMutual Corporate Value Partners Limited, a Cayman Islands corporation
that operates as a high yield bond fund. MassMutual Corporate Value Limited
holds an approximately 93% ownership interest in this company.
27. 9048-5434 Quebec, Inc., a Quebec corporation, which operates as the owner
of hotel property in Montreal, Quebec, Canada. MassMutual Holdings MSC,
Inc. owns all the shares of 9048-5434 Quebec, Inc.
28. Antares Leveraged Capital Corp., a Delaware corporation that operates as a
finance company. MassMutual Holding Trust I owns approximately 98.7% of the
capital stock of Antares.
29. Charter Oak Capital Management, Inc., a Delaware corporation that operates
as an investment manager. MassMutual Holding Trust I owns 80% of the
capital stock of Charter Oak.
30. Cornerstone Real Estate Advisers, Inc., a Massachusetts equity real estate
advisory corporation, all the stock of which is owned by MassMutual Holding
Trust I.
31. DLB Acquisition Corporation ("DLB") is a Delaware corporation, which serves
as a holding company for David L. Babson and Company, Incorporated.
MassMutual Holding Trust I owns 83.7% of the outstanding capital stock of
DLB.
5
<PAGE>
32. Oppenheimer Acquisition Corporation ("OAC") is a Delaware corporation,
which serves as a holding company for OppenheimerFunds, Inc. MassMutual
Holding Trust I owns 86% of the capital stock of OAC.
33. David L. Babson and Company, Incorporated, a registered investment adviser
incorporated in Massachusetts, all of the stock of which is owned by DLB.
34. Babson Securities Corporation, a registered broker-dealer incorporated in
Massachusetts, all of the stock of which is owned by David L. Babson and
Company, Incorporated.
35. Babson-Stewart-Ivory International, a Massachusetts general partnership,
which operates as a registered investment adviser. David L. Babson and
Company Incorporated holds a 50% ownership interest in the partnership.
36. Potomac Babson Incorporated, a Massachusetts corporation, is a registered
investment adviser. David L. Babson and Company Incorporated owns 60% of
the outstanding shares of Potomac Babson Incorporated.
37. OppenheimerFunds, Inc., a registered investment adviser incorporated in
Colorado, all of the stock of which is owned by Oppenheimer Acquisition
Corporation
38. Centennial Asset Management Corporation, a Delaware corporation that serves
as the investment adviser and general distributor of the Centennial Funds.
OppenheimerFunds, Inc. owns all the stock of Centennial Asset Management
Corporation.
39. HarbourView Asset Management Corporation, a registered investment adviser
incorporated in New York, all the stock of which is owned by
OppenheimerFunds, Inc.
40. MultiSource Service, Inc., a Colorado corporation that operates as a
clearing broker, 80% of the stock of which is owned by OppenheimerFunds,
Inc.
41. OppenheimerFunds Distributor, Inc., a registered broker-dealer incorporated
in New York, all the stock of which is owned by OppenheimerFunds, Inc.
42. Oppenheimer Partnership Holdings, Inc., a Delaware holding company, all the
stock of which is owned by OppenheimerFunds, Inc.
43. Oppenheimer Real Asset Management, Inc., a commodity pool operator
incorporated in Delaware, all the stock of which is owned by
OppenheimerFunds, Inc.
44. Shareholder Financial Services, Inc., a transfer agent incorporated in
Colorado, all the stock of which is owned by OppenheimerFunds, Inc.
45. Shareholder Services, Inc., a transfer agent incorporated in Colorado, all
the stock of which is owned by OppenheimerFunds, Inc.
46. Centennial Capital Corporation, a Delaware corporation that formerly
sponsor a unit investment trust. Centennial Asset Management Corporation
owns all the outstanding shares of Centennial Capital Corporation.
47. Cornerstone Office Management, LLC, a Delaware limited liability company
that is 50% owned by Cornerstone Real Estate Advisers, Inc. and 50% owned
by MML Realty Management Corporation.
48. Cornerstone Suburban Office Investors, LP, a Delaware limited partnership,
which operates as a real estate operating company. Cornerstone Office
Management, LLC holds a 1% general partnership interest in this fund and
MassMutual holds a 99% limited partnership interest.
49. CM Advantage, Inc., a Connecticut corporation that acts as a general
partner in real estate limited partnerships. MassMutual Holding Trust II
owns all of the outstanding stock.
50. CM International, Inc., a Delaware corporation that holds a mortgage pool
and issues collateralized bond obligations. MassMutual Holding Trust II
owns all the outstanding stock of CM International, Inc.
6
<PAGE>
51. CM Property Management, Inc., a Connecticut real estate holding company,
all the stock of which is owned by MassMutual Holding Trust II.
52. HYP Management, Inc., a Delaware corporation which is the LLC Manager for
MassMutual High Yield Partners LLC and owns 1.28% of the LLC units of such
entity. MassMutual Holding Trust II owns all the outstanding stock of HYP
Management, Inc.
53. MMHC Investment, Inc., a Delaware corporation which is a passive investor
in MassMutual/Darby CBO LLC, MassMutual High Yield Partners LLC and other
MassMutual investments. MassMutual Holding Trust II owns all the
outstanding stock of MMHC Investment, Inc.
54. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds 5.28%, MMHC
Investment Inc. holds 35.99%, and HYP Management, Inc. hold 1.28% for a
total of 42.55% of the ownership interest in this company.
55. MML Realty Management Corporation, a property manager incorporated in
Massachusetts, all the stock of which is owned by MassMutual Holding Trust
II.
56. 505 Waterford Park Limited Partnership, a Delaware limited partnership,
which holds title to an office building in Minneapolis, Minnesota. MML
Realty Management Corporation holds a 1% general partnership interest in
this partnership and MassMutual holds a 99% limited partnership interest.
57. MassMutual/Darby CBO IM Inc., a Delaware corporation which operates as the
LLC Manager of MassMutual/Darby CBO LLC MMHC Investment, Inc. owns 50% of
the capital stock of this company
58. MassMutual/Darby CBO LLC, a Delaware limited liability company that
operates as a fund investing in high yield debt securities of U.S. and
emerging market issuers. MassMutual holds 1.79%, MMHC Investment holds
44.91% and MassMutual High Yield Partners LLC holds 2.39% of the ownership
interest in this company.
59. Urban Properties, Inc., a Delaware real estate holding and development
company, all the stock of which is owned by MassMutual Holding Trust II.
60. Westheimer 335 Suites, Inc., was incorporated in Delaware to serve as a
general partner of the Westheimer 335 Suites Limited Partnership.
MassMutual Holding Trust II owns all the stock of Westheimer 335 Suites,
Inc.
61. Westheimer 335 Suites Limited Partnership, a Texas limited partnership of
which Westheimer 335 Suites, Inc. is the general partner.
62. MassMutual Internacional (Argentina) S.A., an Argentine corporation, which
operates as a holding company. MassMutual International Inc. owns 99.9% of
the outstanding shares and MassMutual Holding Company owns the remaining
0.1% of the shares.
63. MassMutual Internacional (Chile) S.A. a Chilean corporation, which operates
as a holding company. MassMutual International Inc. owns 99% of the
outstanding shares and MassMutual Holding Company owns the remaining 0.1%
of the shares.
64. MassMutual International (Bermuda) Ltd., a Bermuda life insurance company,
all of the stock of which is owned by MassMutual International Inc.
65. MassMutual International (Luxembourg) S.A. a Luxembourg corporation, which
operates as an insurance company. MassMutual International Inc. owns 99.9%
of the outstanding shares and MassMutual Holding Company owns the remaining
0.1% of the shares.
66. MassLife Seguros de Vida S.A., a life insurance company incorporated in
Argentina. MassMutual International Inc. owns 99.9% of the outstanding
capital stock of MassLife Seguros de Vida S.A.
67. MassMutual Services, S.A., an Argentine corporation, which operates as a
service company. MassMutual Internacional (Argentina) S.A. owns 99.9% of
the outstanding shares and MassMutual International, Inc. own 0.1% of the
shares.
7
<PAGE>
68. Mass Seguros de Vida S.A., a life insurance company incorporated in Chile.
MassMutual Internacional (Chile S.A.) owns 33.5% of the outstanding capital
stock of Mass Seguros de Vida S.A.
69. Origen Inversiones S.A., a Chilean corporation which operates as a holding
company. MassMutual Internacional (Chile) S.A. holds a 33.5% ownership
interest in this corporation.
70. Compania Seguros de Vida Corp, S.A., a Chilean insurance company. Origen
Inversiones S.A. owns 99% of the outstanding shares of this company
71. Oppenheimer Series Fund Inc., a Maryland corporation and a registered
open-end investment company of which MassMutual and its affiliates own a
majority of the outstanding shares issued by the fund.
72. Panorama Series Fund, Inc., a registered open-end investment company
organized as a Maryland corporation. Shares of the fund are sold only to
MassMutual and its affiliates.
73. The DLB Fund Group, an open-end management investment company, advised by
David L. Babson and Company Incorporated. MassMutual owns at least 25% of
each series.
MassMutual acts as the investment adviser to each of the following investment
companies and as such may be deemed to control them.
1. MML Series Investment Fund, a registered open-end Massachusetts business
trust, all of the shares are owned by separate accounts of MassMutual and
companies controlled by MassMutual.
2. MassMutual Corporate Investors, a registered closed-end Massachusetts
business trust.
3. MassMutual Corporate Value Partners, Limited, a Cayman Islands corporation
that operates as a high-yield bond fund. MassMutual Corporate Value Limited
holds an approximately 93% ownership interest in this company.
4. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds 5.28%, MMHC
Investment Inc. holds 35.99%, and HYP Management, Inc. hold 1.28% for a
total of 42.55% of the ownership interest in this company.
5. MassMutual Institutional Funds, a registered open-end Massachusetts
business trust, all of the shares are owned by MassMutual.
6. MassMutual Participation Investors, a registered closed-end Massachusetts
business trust.
7. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation which
operates a collateralized bond obligation fund. MassMutual Holding MSC,
Inc. and Carlson Investment Management Co. each own 50% of the outstanding
shares.
8. MassMutual/Darby CBO, LLC, a Delaware limited liability company that
operates as a fund investing in high yield debt securities of U.S. and
emerging market issuers. MassMutual owns 1.79% , MMHC investment, Inc. owns
44.91% and MassMutual High Yield Partners LLC owns 2.39% of the ownership
interest in this company.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of March 4, 1998, the number of Contract Owners was 4,424.
8
<PAGE>
ITEM 28. INDEMNIFICATION
The Bylaws of the Company provide that:
The following provisions regarding the Indemnification of Directors and
Officers of the Registrant are applicable: CONNECTICUT LAW. Except where an
applicable insurance policy is procured, Connecticut General Statutes ("C.G.S.")
Section 33-320a is the sole source of indemnification rights for directors and
officers of Connecticut corporations and for persons who may be deemed to be
controlling persons by reason of their status as a shareholder, director,
officer, employee or agent of a Connecticut corporation. Under C.G.S. Section
33-320a, a corporation shall indemnify any director or officer who was or is a
party, or was threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter referred to as "proceeding") by virtue of the fact
that he or the person whose legal representative he is: (i) is or was a director
or officer of the corporation; (ii) while a director or an officer of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise (hereinafter
referred to as "enterprise"), other than an employee benefit plan or trust; or
(iii) while a director or an officer of the corporation, is or was a director or
officer serving at the request of the corporation as a fiduciary or an employee
benefit plan or trust maintained for the benefit of employees of the corporation
or any other enterprise, against "covered expenditures" if (and only if) his
conduct met the applicable statutory eligibility standard. The types of
expenditures which are covered and the statutory eligibility standard vary
according to the type of proceeding to which the director or officer is or was a
party or was threatened to be made a party.
According to C.G.S. Section 33-320a, in non-derivative proceedings other
than ones brought in connection with an alleged claim based upon the purchase or
sale by a director or officer of securities of the corporation or of another
enterprise, which the director or officer serves or served at the request of the
corporation, the corporation shall indemnify a director or officer against
judgments, fines, penalties, amounts paid in settlement and reasonable expenses,
including attorneys' fees, actually incurred by him in connection with the
proceeding, or any appeal therein, IF AND ONLY IF he acted (i) in good faith and
(ii) in a manner he reasonably believed to be in the best interests of the
corporation or, in the case of a person serving as a fiduciary of any employee
benefit plan or trust, in a manner he reasonably believed to be in the best
interests of the corporation or in the best interest of the participants and
beneficiaries of such employee benefit plan or trust and consistent with the
provisions of such employee benefit plan or trust. However, where the proceeding
brought is criminal in nature, C.G.S. Section 33-320a requires that the director
or officer must satisfy the additional condition that he had no reasonable cause
to believe that his conduct was unlawful in order to be indemnified. A director
or officer also will be entitled to indemnification as described above if (i) he
is successful on the merits in the defense of any non-derivative proceeding
brought against him or (ii) a court shall have determined that in view of all
the circumstances he is fairly and reasonably entitled to be indemnified. The
decision about whether the director or officer qualifies for indemnification
under C.G.S. Section 33-320a may be made (i) in writing by a majority of those
members of the board of directors who were not parties to the proceeding in
question, (ii) in writing by independent legal counsel selected by a consent in
writing signed by a majority of those directors who were not parties to the
proceeding, or (iii) by the shareholders of the corporation at a special or
annual meeting by an affirmative vote of at least a majority of the voting power
of shares not owned by parties to the proceeding. A director or officer also may
apply to a court of competent jurisdiction for indemnification even though he
previously applied to the board, independent legal counsel or the shareholders
and his application for indemnification was rejected.
For purposes of C.G.S. Section 33-320a, the termination of any proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not create, of itself, a presumption that the director or
officer did not act in good faith or in a manner which that director or officer
did not believe reasonably to be in the best interests of the corporation or of
the participants and beneficiaries of an employee benefit plan or trust and
consistent with the provisions of such plan or trust. Likewise, the termination
of a criminal act or proceeding shall not create, of itself, a presumption that
the director or officer had reasonable cause to believe that his conduct was
unlawful.
In non-derivative proceedings based on the purchase or sale of securities of
the corporation or of another enterprise, which the director or officer serves
or served at the request of the corporation, C.G.S. Section 33-320a
9
<PAGE>
provides that the corporation shall indemnify the director or officer only after
a court shall have determined upon application that, in view of all the
circumstances, the director or officer is fairly and reasonably entitled to be
indemnified. Furthermore, the expenditures for which the director or officer
shall be indemnified shall be only such amount as the court determines to
appropriate.
Pursuant to C.G.S. Section 33-320a, where a director or officer was or is a
party or was threatened to be made a party to a derivative proceeding, the
corporation shall indemnify him against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the proceeding or any
appeal therein, in relation to matters as to which he is finally adjudged not to
have breached his duty to the corporation. The corporation also shall indemnify
a director or officer where the court determines that, in view of all the
circumstances, such person is fairly and reasonably entitled to be indemnified;
however, in such a situation, the individual shall be indemnified only for such
amount as the court determines to be appropriate. Furthermore, the statute
provides that the corporation shall not indemnify a director or officer for
amounts paid to the corporation, to a plaintiff or to counsel for a plaintiff in
settling or otherwise disposing of a threatened or pending action, with or
without court approval, or for expenses incurred in defending a threatened
action or a pending action which is settled or otherwise disposed of without
court approval.
C.G.S. Section 33-320a also provides that expenses incurred in defending a
proceeding may be paid by the corporation in advance of the final disposition of
such proceeding upon authorization of the board of directors, provided said
expenses are indemnifiable under the statute and the director or officer agrees
to repay such amount if he is later found not entitled to indemnification by the
corporation.
Lastly, C.G.S. Section 33-320a is intended to be an exclusive statute. A
corporation established under Connecticut statute cannot indemnify a director or
officer (other than a director or officer who is or was serving at the request
of the corporation as a director, officer, partner, trustee, employee or agent
of another enterprise), to an extent either greater or less than that authorized
by the statute, and any provision in the certificate of incorporation, the
by-laws, a shareholder or director resolution, or agreement or otherwise that is
inconsistent with the statute is invalid. C.M. Life Insurance Company was not
established under Connecticut statute but was instead created by special act of
the Connecticut General Assembly. Currently, its charter does not have
provisions dealing with indemnification of its directors or officers, therefore
the provisions of C.G.S. Section 33-320a currently apply to such
indemnification. However, in the event C.M. Life Insurance Company's charter is
amended by the Connecticut General Assembly in such a manner which is
inconsistent with the statute, the charter would take precedence over C.G.S.
Section 33-320a. Notwithstanding the above, C.G.S. Section 33-320a specifically
authorizes a corporation to procure insurance providing greater indemnification
rights than those set out in the statute the premium cost of which may be shared
with the director or officer on such basis as may be agreed upon. The directors
and officers may be covered by an errors and omissions insurance policy or other
insurance policy. Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
10
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS
(a) MML Distributors, LLC, a wholly-owned subsidiary of MassMutual, acts as
principal underwriter for registered separate accounts of MassMutual,
C.M. Life and MML Bay State.
(b)(1) MML Distributors, LLC is the principal underwriter of the Contracts. The
following people are officers and member representatives of the principal
underwriter.
OFFICERS AND MEMBER REPRESENTATIVES
MML DISTRIBUTORS, LLC
Kenneth M. Rickson Member Representative One Monarch Place
G.R. Phelps & Co., Inc. 1414 Main Street
Springfield, MA 01144-1013
Margaret Sperry Member Representative 1295 State Street
Massachusetts Mutual Springfield, MA 01111-0001
Life Insurance Co.
Kenneth M. Rickson Chief Executive Officer, One Monarch Place
President, and Main OSJ 1414 Main Street
Supervisor Springfield, MA 01144-1013
John E. Forrest Vice President One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Michael L. Kerley Vice President One Monarch Place
Assistant Secretary 1414 Main Street
Springfield, MA 01144-1013
Ronald E. Thomson Vice President One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
James T. Bagley Treasurer 1295 State Street
Springfield, MA 01111
Bruce C. Frisbie Assistant Treasurer 1295 State Street
Springfield, MA 01111-0001
Raymond W. Anderson Assistant Treasurer 140 Garden Street
Hartford, CT 06154
Ann F. Lomeli Secretary 1295 State Street
Springfield, MA 01111-0001
Eileen D. Leo Assistant Secretary One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Marilyn A. Sponzo Chief Legal Officer One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Robert Rosenthal Compliance Officer One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
11
<PAGE>
Melissa Thompson Registration Manager One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Ruth B. Howe Director of Continuing One Monarch Place
Education 1414 Main Street
Springfield, MA 01144-1013
Peter D. Cuozzo Variable Life Supervisor 140 Garden Street
and Hartford OSJ Supervisor Hartford, CT 06154
Maureen Ford Variable Annuity Supervisor 140 Garden Street
Hartford, CT 06154
Anne Melissa Dowling Large Corporate Markets 140 Garden Street
Supervisor Hartford, CT 06154
(b)(2) MML Investors Services, Inc. is the co-underwriter of the Contracts.
The following people are the officers and directors of the co-
underwriter.
MML INVESTORS SERVICES, INC.
OFFICERS AND DIRECTORS
OFFICER BUSINESS ADDRESS
- --------------------------------------------------------------------------------
Kenneth M. Rickson One Monarch Place
President 1414 Main Street
Springfield, MA 01144-1013
Michael L. Kerley One Monarch Place
Vice President, Chief Legal Officer, 1414 Main Street
Chief Compliance Officer, Assistant Secretary Springfield, MA 01144-1013
Ronald E. Thomson One Monarch Place
Vice President, Treasurer 1414 Main Street
Springfield, MA 01144-1013
Ann F. Lomeli 1295 State Street
Secretary Springfield, MA 01111
John E. Forrest One Monarch Place
Vice President 1414 Main Street
National Sales Director Springfield, MA 01144-1013
Eileen D. Leo One Monarch Place
Assistant Secretary, 1414 Main Street
Assistant Treasurer Springfield, MA 01144-1013
David Deonarine One Monarch Place
Sr. Registered Options Principal 1414 Main Street
Springfield, MA 01144-1013
Nicholas J. Orphan 245 Peach Tree Center
Regional Supervisor (South) Ave., Suite 2330
Atlanta, GA 30303
Robert W. Kumming 1295 State Street
Regional Pension Management Supervisor (East/Central) Springfield, MA 01111
Peter J. Zummo 1295 State Street
Regional Pension Management Supervisor (South/West) Springfield, MA 01111
Bruce Lukowiak 6263 North Scottsdale Rd.,
Regional Supervisor (West) Suite 222
Scottsdale, AZ 85250
12
<PAGE>
Gary L. Greenfield 1 Lincoln Center, Suite 1490
Regional Supervisor (Central) Oakbrook Terrace, IL 60181
Burvin E. Pugh, Jr. 1295 State Street
Chief Agency Field Force Supervisor Springfield, MA 01111
John P. McCloskey 1295 State Street
Regional Supervisor (East) Springfield, MA 01144
Susan Alfano 1295 State Street
Director Springfield, MA 01111
Lawrence V. Burkett, Jr. 1295 State Street
Chairman of the Board of Directors Springfield, MA 01111
Peter Cuozzo, CLU, ChFC 140 Garden Street
Director Hartford, CT 06154
John B. Davies 1295 State Street
Director Springfield, MA 01111
Anne Melissa Dowling 140 Garden Street
Director Hartford, CT 01654
Maureen R. Ford 140 Garden Street
Director Hartford, CT 01654
Gary T. Huffman 1295 State Street
Director Springfield, MA 01111
Douglas J. Jangraw 140 Garden Street
Director Hartford, CT 01654
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Until July 1, 1998, all accounts, books, or other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and the rules
promulgated thereunder are maintained by the Registrant through a full service
agreement between itself and ALLIANCE-ONE Services, L.P. ("ALLIANCE-ONE") and
such records will be maintained at ALLIANCE-ONE, 301 West Eleventh Street,
Kansas City, Missouri 64105. However, this agreement will terminate on June 30,
1998. Effective July 1, 1998, the Service Center for the Registrant will be
relocated to C.M. Life's Home Office at 140 Garden Street, Hartford CT.
Effective July 1, 1998 all records for the Registrant will be maintained at this
address.
ITEM 31. MANAGEMENT SERVICES
Not Applicable.
ITEM 32. UNDERTAKINGS
a. Registrant hereby undertakes to file a post-effective amendment to this
registration statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are never more
than sixteen (16) months old for so long as payment under the variable
annuity contracts may be accepted.
b. Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus, a space that
an applicant can check to request a Statement of Additional Information, or
(2) a postcard or similar written communication affixed to or included in
the Prospectus that the applicant can remove to send for a Statement of
Additional Information.
c. Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statement required to be made available under
this Form promptly upon written or oral request.
13
<PAGE>
d. C.M. Life Insurance Company hereby represents that the fees and charges
deducted under the individual deferred variable annuity contracts with
flexible purchase payments described in this Registration Statement in
the aggregate, are reasonable in relation to the services rendered, the
expenses expected to be incurred, and the risks assumed by C.M. Life
Insurance Company.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant, C.M.
Multi-Account A, certifies that it meets all of the requirement for
effectiveness of this Post-Effective Amendment No. 3 pursuant to Rule 485(b)
under the Securities Act of 1933 and has caused this Post-Effective Amendment
No. 3 to Registration Statement No. 33-61679 to be signed on its behalf by the
undersigned thereunto duly authorized, all in the city of Springfield and the
Commonwealth of Massachusetts, on the 10th day of April, 1998.
C.M. MULTI-ACCOUNT A
C.M. LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Lawrence V. Burkett, Jr.*
-----------------------------
Lawrence V. Burkett, Jr., Director, President and
Chief Executive Officer
C.M. Life Insurance Company
/s/ Richard M. Howe On April 10, 1998, as Attorney-in-Fact pursuant to
- ------------------- powers of attorney.
*Richard M. Howe
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 3 to Registration Statement No. 33-61679 has been signed by the following
persons in the capacities and on the duties indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Lawrence V. Burkett, Jr.* Director, President and Chief April 3, 1998
- ----------------------------- Executive Officer
Lawrence V. Burkett, Jr.
/s/ Edward M. Kline* Treasurer (Principal Financial April 3, 1998
- -------------------- Officer)
Edward M. Kline
/s/ John M. Miller, Jr.* Second Vice President and April 3, 1998
- ------------------------ Comptroller (Principal Accounting Officer)
John M. Miller Jr.
/s/ John B. Davies* Director April 3, 1998
- -------------------
John B. Davies
/s/ Stuart H. Reese* Director April 3, 1998
- --------------------
Stuart H. Reese.
/s/ Richard M. Howe On April 3, 1998, as Attorney-in-Fact
- ------------------- pursuant to powers of attorney.
* Richard M. Howe
</TABLE>
14
<PAGE>
REPRESENTATION BY REGISTRANT'S COUNSEL
As counsel to the Registrant, I, James M. Rodolakis, have reviewed this
Post-Effective Amendment No. 3 to Registration Statement No. 33-61679, and
represent, pursuant to the requirement of paragraph (e) of Rule 485 under the
Securities Act of 1933, that this Amendment does not contain disclosures which
would render it ineligible to become effective pursuant to paragraph (b) of said
Rule 485.
/s/ James M. Rodolakis
James M. Rodolakis
Counsel
C.M. Life Insurance Company
15
<PAGE>
EXHIBIT INDEX
1 C.M. Life Board of Directors Resolution establishing the
Separate Account
9 Opinion of and Consent of Counsel.
10 (i) Consent of Coopers & Lybrand L.L.P., Independent Accountants.
(ii) Consent of Arthur Andersen LLP, Independent Public Accountants
(iii) Report of Arthur Andersen LLP, Independent Public Accountants
<PAGE>
EXHIBIT 1
C.M. Life Board of Directors Resolution establishing the Separate Account.
August 3, 1994
C.M. LIFE INSURANCE COMPANY
---------------------------
RESOLUTIONS RE ESTABLISHMENT OF C.M. MULTI-ACCOUNT A
----------------------------------------------------
WHEREAS, Section 38a-433 of the Connecticut Insurance Laws permits a
domestic life insurance company to establish one or more separate accounts;
WHEREAS, it is desired that the Company create such a separate account to
house certain of its variable annuity products;
NOW, THEREFORE, BE IT
RESOLVED, that a separate account referred to herein as "C.M. Multi-
Account A" is hereby established;
FURTHER RESOLVED that the assets of C.M. Multi-Account A shall be derived
solely from (a) sale of variable annuity products, (b) funds corresponding to
dividend accumulation with respect to investment of such assets, and (c)
advances made by the Company in connection with operation of C.M. Multi-Account
A;
FURTHER RESOLVED that this Company shall maintain in C.M. Multi-Account A
assets with a fair market value at least equal to the statutory valuation
reserves for the variable annuity policies;
FURTHER RESOLVED that the President, any Executive Vice President, any
Senior Vice President, any Vice President, the Secretary and the Treasurer of
the Company (the "Officers") be, and each of them hereby is, authorized in his
or her discretion, as it may deem appropriate from time to time, in accordance
with applicable laws and regulations (a) to divide C.M. Multi-Account A into
divisions and sub-divisions with each division or subdivision investing in
shares of designated classes of designated investment companies or other
appropriate securities, (b) to modify or eliminate any such divisions or
sub-divisions, (c) to designate further any division or sub-division thereof and
(d) to change the designation of C.M. Multi-Account A to another designation;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized to invest cash from the Company's general account in C.M.
Multi-Account A or in any division thereof as may be deemed necessary or
appropriate to facilitate the commencement of the operations of C.M.
Multi-Account A or to meet any minimum capital requirements under the Investment
Company Act of 1940 and to transfer cash or securities from time to time between
the Company's general account and C.M. Multi-Account A as deemed necessary or
appropriate so long as such transfers are not prohibited by law and are
consistent with the terms of the variable annuity policies issued by the Company
providing for allocations to C.M. Multi-Account A;
FURTHER RESOLVED that the income, gains, and losses (whether or not
realized) from assets allocated to C.M. Multi-Account A shall, in accordance
with any variable annuity policies issued by the Company providing for
allocations to C.M. Multi-Account A, be credited to or charged against C.M.
Multi-Account A without regard to the other income, gains, or losses of the
Company;
FURTHER RESOLVED that authority is hereby delegated to the President of
the Company or the Vice President and Chief Operating Officer to adopt
procedures providing for, among other things, criteria by which the Company
shall provide for a pass-through of voting rights to the owners of variable
annuity policies issued by the Company providing for allocation to C.M.
Multi-Account A with respect to the shares of any investment companies which are
held in C.M. Multi-Account A;
<PAGE>
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized and directed to prepare and execute any necessary
agreements to enable C.M. Multi-Account A to invest or reinvest the assets of
C.M. Multi-Account A in securities issued by investment companies registered
under the Investment Company Act of 1940 or other appropriate securities as the
Officers of the Company may designate pursuant to the provisions of the variable
annuity policies issued by the Company providing for allocations to C.M.
Multi-Account A;
FURTHER RESOLVED that the fiscal year of C.M. Multi-Account A shall end on
the 31st day of December each year;
FURTHER RESOLVED that the Company may register under the Securities Act of
1933 variable annuity policies, or units of interest thereunder, under which
amounts will be allocated by the Company to C.M. Multi-Account A to support
reserves for such policies and, in connection therewith, the Officers of the
Company be, and each of them hereby is, authorized, to prepare, execute and file
with the Securities and Exchange Commission, in the name and on behalf of the
Company, registration statements under the Securities Act of 1933, including
prospectuses, supplements, exhibits and other documents relating thereto, and
amendments to the foregoing, in such form as the Officer executing the same may
deem necessary or appropriate;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized to take all actions necessary to register C.M.
Multi-Account A as a unit investment trust under the investment Company Act of
1940 and to take such related actions as they deem necessary and appropriate to
carry out the foregoing;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized to prepare, execute and file with the Securities and
Exchange Commission, applications and amendments thereto for such exemptions
from or orders under the Investment Company Act of 1940 and the Securities Act
of 1933, and to request from the Securities and Exchange Commission no action
and interpretative letters as they may from time to time deem necessary or
desirable;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized to prepare, execute and file all periodic reports required
under the Investment Company Act of 1940 and the Securities Exchange Act of
1934;
FURTHER RESOLVED that the President of the Company or the Vice President
and Chief Operating Officer, or such person as is designated by either, is
hereby appointed as agent for service under any such registration statement and
is duly authorized to receive communications and notices from the Securities and
Exchange Commission with respect thereto, and to exercise powers given to such
agent by the Securities Act of 1933 and the Rules thereunder and any other
necessary Acts;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized to effect in the names and on behalf of the Company, all
such registrations, filings and qualifications under blue sky or other
applicable securities laws and regulations and under insurance securities laws
and insurance laws and regulations of such states and other jurisdictions as
they may deem necessary or appropriate, with respect to the Company, and with
respect to any variable annuity policies under which amounts will be allocated
by the Company to C.M. Multi-Account A to support reserves from such policies;
such authorization shall include registration, filing and qualification of the
Company and of said policies, as well as registration, filing and qualifications
of officers, employees and agents of the Company as brokers, dealers, agents,
salesmen or otherwise; and such authorization shall also include, in connection
therewith, authority to prepare, execute, acknowledge and file all such
applications, applications for exemptions, certificates, affidavits, covenants,
consents to service of process and other instruments, and to take all such
action as the Officer executing the same or taking such action may deem
necessary or desirable;
FURTHER RESOLVED that the Officers of the Company be, and each of them
hereby is, authorized to execute and deliver all such documents and papers and
to do or cause to be done all such acts and things as they may deem necessary or
desirable to carry out the foregoing resolutions and the intent and purpose
thereof.
<PAGE>
EXHIBIT 9
Opinion of and Consent of Counsel
April, 1998
C.M. Life Insurance Company
140 Garden Street
Hartford, CT 06154
Re: Post-Effective Amendment No. 3 to Registration Statement
No. 33-61679 filed on Form N-4
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of Post-Effective
Amendment No. 3 to Registration Statement No. 33-61679 on Form N-4 under the
Securities Act of 1933 for C.M. Life Insurance Company's ("CM Life") flexible
premium variable annuity contract (the "Contract"). C.M. Multi-Account A issues
the Contract.
As Attorney for CM Life, I provide legal advice to CM Life in connection with
the operation of its variable products. In such role I am familiar with the
Post-Effective Amendment for the Contract. In so acting, I have made such
examination of the law and examined such records and documents as in my judgment
are necessary or appropriate to enable me to render the opinion expressed below.
I am of the following opinion:
1. CM Life is a valid and subsisting corporation, organized and operated under
the laws of the state of Connecticut and is subject to regulation by the
Connecticut Commissioner of Insurance.
2. C.M. Multi-Account A is a separate account validly established and maintained
by CM Life in accordance with Connecticut law.
3. All of the prescribed corporate procedures for the issuance of the Contract
have been followed, and all applicable state laws have been complied with.
I hereby consent to the use of this opinion as an exhibit to this Post-Effective
Amendment.
Very truly yours,
/s/ James M. Rodolakis
James M. Rodolakis
Counsel
<PAGE>
Exhibit 10(i)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
C.M. Life Insurance Company
We consent to the inclusion in this Post-Effective Amendment No. 3 to the
Registration Statement of C.M. Multi-Account A (Panorama Premier segment) on
Form N-4 (Registration No. 33-61679), of our report dated March 11, 1998 on our
audits of the Panorama Premier segment of C.M. Multi-Account A, and of our
report dated February 6, 1998 on our audits of the statutory financial
statements of C.M. Life Insurance Company, which includes explanatory paragraphs
relating to the use of statutory accounting practices, which differ from
generally accepted accounting principles. We also consent to the reference to
our Firm under the caption "Independent Accountants."
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
April 24, 1998
<PAGE>
Exhibit 10(ii)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
(and to all references to our Firm) included in or made a part of the
registration statement for the Panorama Premier Segment of C.M. Multi-Account A
of C.M. Life Insurance Company.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
April 24, 1998
<PAGE>
Exhibit 10(iii)
Report Of Independent Public Accountants
To the Board of Directors of
C.M. Life Insurance Company:
We have audited the accompanying statutory statements of income, changes in
capital stock and surplus and cash flows of C.M. Life Insurance Company (a
Connecticut corporation and a wholly-owned subsidiary of Connecticut Mutual Life
Insurance Company) for the year ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion.
In our originally issued report dated February 15, 1996, we expressed an opinion
that the 1995 financial statements, prepared using accounting practices
prescribed or permitted by the Insurance Department of the State of Connecticut,
presented fairly, in all material respects, the financial position of C.M. Life
Insurance Company as of December 31, 1995, and the results of its operations and
its cash flows for the year ended December 31, 1995 in conformity with generally
accepted accounting principles. Pursuant to the provisions of Statement of
Financial Accounting Standards No. 120 (SFAS No. 120), Accounting and Reporting
by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain
Long-Duration Participating Contracts, financial statements of mutual life
insurance enterprises for periods ending on or before December 15, 1996,
prepared using accounting practices prescribed or permitted by insurance
regulators (statutory financial statements) are no longer considered
presentations in conformity with generally accepted accounting principles when
presented for comparative purposes with the enterprise's financial statements
for periods subsequent to the effective date of SFAS No. 120. Accordingly, our
present opinion on the presentation of the 1995 financial statements in
accordance with generally accepted accounting principles, as presented herein,
is different from that expressed in our previous report.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the results of
operations and cash flows of C.M. Life Insurance Company for the year ended
December 31, 1995.
In our opinion, the financial statements referred to above do present fairly, in
all material respects, the results of operations and cash flows of C.M. Life
Insurance Company for the year ended December 31, 1995 in conformity with
accounting practices prescribed or permitted by the Insurance Department of the
State of Connecticut.
Arthur Andersen LLP
Hartford, Connecticut
February 15, 1996
