<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT VA-P - PIONEER VISION
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES o DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH CAPITAL GROWTH REAL ESTATE GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
251 252 253
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investment in shares of Pioneer Variable Contracts Trust.... $ 2,684,784 $ 9,219,862 $ 392,808
Accrued investment income................................... -- -- --
Receivable from Allmerica Financial Life Insurance
and Annuity Company (Sponsor)............................. 6,597 22,948 2,655
----------- ----------- -----------
Total assets............................................. 2,691,381 9,242,810 395,463
LIABILITIES:
Payable to Allmerica Financial Life Insurance
and Annuity Company (Sponsor)............................. -- -- --
----------- ----------- -----------
Net assets............................................... 2,691,381 $ 9,242,810 $ 395,463
=========== =========== ===========
Net asset distribution by category:
Qualified variable annuity policies...................... $ 459,805 $ 2,244,484 $ 110,063
Non-qualified variable annuity policies..................... 2,231,576 6,998,326 285,400
Value of investment by Allmerica Financial Life Insurance
and Annuity Company (Sponsor).......................... -- -- --
----------- ----------- -----------
$ 2,691,381 $ 9,242,810 $ 395,463
=========== =========== ===========
Qualified units outstanding, December 31, 1995.............. 420,313 1,938,108 95,184
Net asset value per qualified unit, December 31, 1995....... $ 1.093958 $ 1.158080 $ 1.156319
Non-qualified units outstanding, December 31, 1995.......... 2,039,910 6,043,042 246,818
Net asset value per non-qualified unit, December 31, 1995... $ 1.093958 $ 1.158080 $ 1.156319
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT VA-P - PIONEER VISION
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY INCOME BALANCED AMERICA INCOME MONEY MARKET SWISS FRANC BOND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
254 255 256 257 258
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 6,752,789 $ 2,529,155 $ 3,397,788 $ 3,303,968 $ 89,018
-- -- 13,341 9,837 --
33,729 -- -- -- --
----------- ----------- ----------- ----------- -----------
6,786,518 2,529,155 3,411,129 3,313,805 89,018
-- 324 2,430 3,029 42
----------- ----------- ----------- ----------- -----------
$ 6,786,518 $ 2,528,831 $ 3,408,699 $ 3,310,776 $ 88,976
=========== =========== =========== =========== ===========
$ 1,593,072 $ 865,639 $ 514,232 $ 1,724,639 $ 60,048
5,193,446 1,663,192 2,894,467 1,586,137 28,728
-- -- -- -- 200
----------- ----------- ----------- ----------- -----------
$ 6,786,518 $ 2,528,831 $ 3,408,699 $ 3,310,776 $ 88,976
=========== =========== =========== =========== ===========
1,303,431 743,165 492,994 1,672,389 59,959
$ 1.222215 $ 1.164800 $ 1.043081 $ 1.031243 $ 1.001476
4,249,208 1,427,878 2,774,920 1,538,083 28,685
$ 1.222215 $ 1.164800 $ 1.043081 $ 1.031243 $ 1.001476
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT VA-P - PIONEER VISION
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH CAPITAL GROWTH REAL ESTATE GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
251(a) 252(b) 253(c)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................................ $ 24,231 $109,271 $ 6,947
-------- -------- --------
EXPENSES:
Mortality and expense risk fees.......................... 7,710 33,097 1,229
Administrative expense charges........................... 925 3,971 148
-------- -------- --------
Total expenses......................................... 8,635 37,068 1,377
-------- -------- --------
Net investment income (loss)............................. 15,596 72,203 5,570
-------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain........................................ 3,151 2,197 891
Net unrealized gain (loss)............................... 41,577 93,617 14,788
-------- -------- --------
Net realized and unrealized gain (loss) on investments.... 44,728 95,814 15,679
-------- -------- --------
Net increase (decrease) in net assets from operations.... $ 60,324 $168,017 $ 21,249
======== ======== ========
(a) For the period March 29, 1995 (date of initial investment) to December 31, 1995
(b) For the period March 2, 1995 (date of initial investment) to December 31, 1995
(c) For the period March 7, 1995 (date of initial investment) to December 31, 1995
(d) For the period March 3, 1995(date of initial investment) to December 31, 1995
(e) For the period April 7, 1995 (date of initial investment) to December 31, 1995
(f) For the period May 5, 1995 (date of initial investment) to December 31, 1995
(g) For the period March 3, 1995 (date of initial investment) to December 31, 1995
(h) For the period October 27, 1995 (date of initial investment) to December 31, 1995
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT VA-P - PIONEER VISION
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY INCOME BALANCED AMERICA INCOME MONEY MARKET SWISS FRANC BOND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
254(d) 255(e) 256(f) 257(g) 258(h)
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 47,323 $ 18,380 $ 33,200 $ 46,090 --
--------- --------- --------- --------- ------
19,828 6,302 7,750 11,414 $ 38
2,379 756 930 1,370 4
--------- --------- --------- --------- ------
22,207 7,058 8,680 12,784 42
--------- --------- --------- --------- ------
25,116 11,322 24,520 33,306 (42)
--------- --------- --------- --------- ------
5,211 559 1,887 -- --
328,176 89,378 47,373 -- (18)
--------- --------- --------- --------- ------
333,387 89,937 49,260 -- (18)
--------- --------- --------- --------- ------
$ 358,503 $ 101,259 $ 73,780 $ 33,306 $ (60)
========= ========= ========= ========= ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT VA-P - PIONEER VISION
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH CAPITAL GROWTH REAL ESTATE GROWTH
SUB-ACCOUNT 251 SUB-ACCOUNT 252 SUB-ACCOUNT 253
PERIOD FROM PERIOD FROM PERIOD FROM
3/29/95* TO 12/31/95 3/2/95* TO 12/31/95 3/7/95* TO 12/31/95
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss)............................. $ 15,596 $ 72,203 $ 5,570
Net realized gain from security transactions............. 3,151 2,197 891
Net unrealized gain (loss) on investments................ 41,577 93,617 14,788
----------- ----------- ---------
Net increase (decrease) in net assets from operations.... 60,324 168,017 21,249
----------- ----------- ---------
FROM CAPITAL TRANSACTIONS:
Net purchase payments.................................... 1,750,481 5,686,038 293,637
Terminations............................................. (25,826) (72,466) (5,880)
Annuity benefits......................................... (5,915) (5,593) (5,865)
Other transfers from (to) the General Account of
Allmerica Financial Life Insurance and Annuity
Company (Sponsor).................................... 912,317 3,466,814 92,322
Net increase in investment by Allmerica Financial Life
Insurance and Annuity Company (Sponsor).................. -- -- --
----------- ----------- ---------
Net increase in net assets from capital transactions..... 2,631,057 9,074,793 374,214
----------- ----------- ---------
Net increase in net assets............................... 2,691,381 9,242,810 395,463
NET ASSETS:
Beginning of period...................................... -- -- --
----------- ----------- ---------
End of period............................................ $ 2,691,381 $ 9,242,810 $ 395,463
=========== =========== =========
* Date of initial investment.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT VA-P - PIONEER VISION
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
EQUITY INCOME BALANCED AMERICA INCOME MONEY MARKET SWISS FRANC BOND
SUB-ACCOUNT 254 SUB-ACCOUNT 255 SUB-ACCOUNT 256 SUB-ACCOUNT 257 SUB-ACCOUNT 258
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
3/3/95* TO 12/31/95 4/7/95* TO 12/31/95 5/5/95* TO 12/31/95 3/3/95* TO 12/31/95 10/27/95* TO 12/31/95
- ---------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 25,116 $ 11,322 $ 24,520 $ 33,306 $ (42)
5,211 559 1,887 -- --
328,176 89,378 47,373 -- (18)
----------- ----------- ----------- ----------- -----------
358,503 101,259 73,780 33,306 (60)
----------- ----------- ----------- ----------- -----------
3,909,899 1,304,564 2,777,730 12,369,722 28,750
(76,382) (19,783) (65,220) (153,272) --
(6,919) -- (42,887) -- --
2,601,417 1,142,791 665,296 (8,938,980) 60,086
-- -- -- -- 200
----------- ----------- ----------- ----------- -----------
6,428,015 2,427,572 3,334,919 3,277,470 89,036
----------- ----------- ----------- ----------- -----------
6,786,518 2,528,831 3,408,699 3,310,776 88,976
-- -- -- -- --
----------- ----------- ----------- ----------- -----------
$ 6,786,518 $ 2,528,831 $ 3,408,699 $ 3,310,776 $ 88,976
=========== =========== =========== =========== ===========
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT VA-P - PIONEER VISION
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1995
NOTE 1 - ORGANIZATION
Separate Account VA-P (VA-P) is a separate investment account of Allmerica
Financial Life Insurance and Annuity Company (formerly named SMA Life Assurance
Company) (the Company), established on March 1, 1995 for the purpose of
separating from the general assets of the Company those assets used to fund
certain variable annuity policies issued by the Company. Effective October 16,
1995, concurrent with the demutualization, State Mutual Life Assurance Company
of America changed their name to First Allmerica Financial Life Insurance
Company (First Allmerica).The Company is a wholly-owned subsidiary of First
Allmerica. Under applicable insurance law, the assets and liabilities of VA-P
are clearly identified and distinguished from the other assets and liabilities
of the Company. VA-P cannot be charged with liabilities arising out of any other
business of the Company.
VA-P is registered as a unit investment trust under the Investment Company Act
of 1940, as amended (the 1940 Act). VA-P currently offers eight Sub-Accounts
under the policies. Each Sub-Account invests exclusively in a corresponding
investment portfolio of the Pioneer Variable Contracts Trust (the Fund). Each
Portfolio is managed by Pioneering Management Corporation (Pioneer), except the
Real Estate Growth Portfolio, which is managed by Pioneer Winthrop Advisors. The
Fund is an open-end, diversified series management investment company registered
under the 1940 Act.
Separate Account VA-P has two types of variable annuity policies, "qualified"
policies and "non-qualified" policies. A qualified policy is one that is
purchased in connection with a retirement plan which meets the requirements of
Section 401, 403, 408, or 457 of the Internal Revenue Code, while a
non-qualified policy is one that is not purchased in connection with one of the
indicated retirement plans. The tax treatment for certain partial redemptions or
surrenders will vary according to whether they are made from a qualified policy
or a non-qualified policy.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Investments - Security transactions are recorded on the trade date.
Investments in shares of the Fund are stated at the net asset value per share of
the respective investment portfolio of the Fund. Net realized gains and losses
on securities sold are determined on the average cost method. Dividends and
capital gain distributions are recorded on the ex-dividend date and are
reinvested in additional shares of the respective investment portfolio of the
Fund at net asset value.
Federal Income Taxes - The Company is taxed as a "life insurance company"
under Subchapter L of the Internal Revenue Code and files a consolidated federal
income tax return with First Allmerica. The Company anticipates no tax liability
resulting from the operations of VA-P. Therefore, no provision for income taxes
has been charged against VA-P.
NOTE 3 - INVESTMENTS
The number of shares owned, aggregate cost, and net asset value per share of
each Sub-Account's investment in the Fund at December 31, 1995 were as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO INFORMATION
SUB- INVESTMENT NUMBER OF AGGREGATE NET ASSET
ACCOUNT PORTFOLIO SHARES COST VALUE PER SHARE
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
PIONEER VARIABLE CONTRACTS TRUST:
251 International Growth 245,634 $ 2,643,207 $ 10.93
252 Capital Growth 796,877 9,126,245 11.57
253 Real Estate Growth 34,979 378,021 11.23
254 Equity Income 554,872 6,424,613 12.17
255 Balanced 213,071 2,439,778 11.87
256 America Income 333,771 3,350,415 10.18
257 Money Market 3,303,968 3,303,968 1.00
258 Swiss Franc Bond 5,911 89,036 15.06
</TABLE>
<PAGE>
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company makes a charge of 1.25% per annum based on the average daily net
assets of each Sub-Account at each valuation date for mortality and expense
risks. The Company also charges each Sub-Account .15% per annum based on the
average daily net assets of each Sub-Account for administrative expenses. These
charges are deducted from the daily value of each Sub-Account but are paid to
the Company on a monthly basis.
A policy fee is currently deducted on the policy anniversary date and upon
full surrender of the policy when the accumulated value is $50,000 or less. The
policy fee is $30. The policy fee is currently waived for policies originally
issued as part of a 401(k) plan. For the period ended December 31, 1995, there
were no policy fees deducted from accumulated value in the Sub-Accounts.
Allmerica Investments, Inc. (Allmerica Investments), a wholly-owned subsidiary
of First Allmerica, is principal underwriter and general distributor of VA-P,
and does not receive any compensation for sales of the VA-P policies.
Commissions are paid by the Company to registered representatives of
broker-dealers who are registered under the Securities Exchange Act of 1934 and
are members of the National Association of Securities Dealers. As the current
series of policies have a contingent deferred sales charge, no deduction is made
for sales charges at the time of the sale. For the period ended December 31,
1995, the Company received $2,052 for contingent deferred sales charges
applicable to VA-P.
NOTE 5 - POLICYOWNERS AND SPONSOR TRANSACTIONS
Transactions from policyowners and sponsor were as follows:
- --------------------------------------------------------------------------------
PERIOD ENDED DECEMBER 31, 1995
UNITS AMOUNT
- --------------------------------------------------------------------------------
Sub-Account 251 - International Growth
Issuance of units ........................... 2,569,925 $ 2,750,937
Redemption of units ......................... (109,702) (119,880)
----------- -----------
Net increase ................................ 2,460,223 $ 2,631,057
=========== ===========
Sub-Account 252 - Capital Growth
Issuance of units ........................... 8,250,461 $ 9,494,894
Redemption of units ......................... (269,311) (420,101)
----------- -----------
Net increase ................................ 7,981,150 $ 9,074,793
=========== ===========
Sub-Account 253 - Real Estate Growth
Issuance of units ........................... 365,012 $ 399,742
Redemption of units ......................... (23,010) (25,528)
----------- -----------
Net increase ................................ 342,002 $ 374,214
=========== ===========
Sub-Account 254 - Equity Income
Issuance of units ........................... 5,729,620 $ 6,670,540
Redemption of units ......................... (176,981) (242,525)
----------- -----------
Net increase ................................ 5,552,639 $ 6,428,015
=========== ===========
Sub-Account 255 - Balanced
Issuance of units ........................... 2,193,672 $ 2,452,799
Redemption of units ......................... (22,629) (25,227)
----------- -----------
Net increase ................................ 2,171,043 $ 2,427,572
=========== ===========
Sub-Account 256 - America Income
Issuance of units ........................... 3,712,800 $ 3,843,833
Redemption of units ......................... (444,886) (508,914)
----------- -----------
Net increase ................................ 3,267,914 $ 3,334,919
=========== ===========
Sub-Account 257 - Money Market
Issuance of units ........................... 12,303,426 $12,567,146
Redemption of units ......................... (9,092,954) (9,289,676)
----------- -----------
Net increase ................................ 3,210,472 $ 3,277,470
=========== ===========
Sub-Account 258 - Swiss Franc Bond
Issuance of units ........................... 88,644 $ 89,036
Redemption of units ......................... ----------- -----------
Net increase ................................ 88,644 $ 89,036
=========== ===========
<PAGE>
NOTE 6 - DIVERSIFICATION REQUIREMENTS
Under the provisions of Section 817(h) of the Internal Revenue Code, a
variable annuity contract, other than a contract issued in connection with
certain types of employee benefit plans, will not be treated as an annuity
contract for federal income tax purposes for any period for which the
investments of the segregated asset account on which the contract is based are
not adequately diversified. The Code provides that the "adequately diversified"
requirement may be met if the underlying investments satisfy either a statutory
safe harbor test or diversification requirements set forth in regulations issued
by the Secretary of Treasury.
The Internal Revenue Service has issued regulations under Section 817(h) of
the Code. The Company believes that VA-P satisfies the current requirements of
the regulations, and it intends that VA-P will continue to meet such
requirements.
NOTE 7 - PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of the Fund shares by VA-P during
the period ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SUB-
ACCOUNT INVESTMENT PORTFOLIO PURCHASES SALES
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
251 International Growth ................... $ 2,730,760 $ 90,704
252 Capital Growth ......................... 9,295,419 171,371
253 Real Estate Growth ..................... 403,781 26,651
254 Equity Income .......................... 6,562,004 142,602
255 Balanced ............................... 2,456,092 16,874
256 America Income ......................... 3,681,265 332,737
257 Money Market ........................... 8,817,858 5,513,890
258 Swiss Franc Bond ....................... 89,037 --
------------ -----------
Totals $ 34,036,216 $ 6,294,829
============ ===========
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Allmerica Financial Life Insurance
and Annuity Company and Policyowners
of Separate Account VA-P - Pioneer Vision of Allmerica Financial
Life Insurance and Annuity Company
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of each of the Sub-Accounts (251,
252, 253, 254, 255, 256, 257, and 258) constituting the Separate Account VA-P -
Pioneer Vision of Allmerica Financial Life Insurance and Annuity Company at
December 31, 1995, the results of each of their operations and the changes in
each of their net assets for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of Allmerica Financial Life Insurance and Annuity Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of investments owned at December 31, 1995 by correspondence with
the Fund, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
February 23, 1996
