File Nos.333-1779
811-8890
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. 1 [X]
Post-Effective Amendment No. [ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 4 [X]
(Check appropriate box or boxes.)
LPLA Separate Account One
___________________________
(Exact Name of Registrant)
London Pacific Life & Annuity Company
_____________________________________
(Name of Depositor)
3109 Poplarwood Court, Raleigh, North Carolina 27604
___________________________________________________ _________
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (919) 790-2243
Name and Address of Agent for Service
George Nicholson
London Pacific Life & Annuity Company
3109 Poplarwood Court
Raleigh, North Carolina 27604
Copies to:
Judith A. Hasenauer
Blazzard, Grodd & Hasenauer, P.C.
P.O. Box 5108
Westport, CT 06881
(203) 226-7866
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this Filing.
Calculation of Registration Fee under the Securities Act of 1933:
$500 - Registrant is registering an indefinite number of securities under
the Securities Act of 1933 pursuant to Investment Company Act Rule 24f-2.
=============================================================================
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
<TABLE>
<CAPTION>
<S> <C> <C>
CROSS REFERENCE SHEET
(required by Rule 495)
Item No. Location
- -------- -------------------------
PART A
Item 1. Cover Page.......................... Cover Page
Item 2. Definitions......................... Definitions
Item 3. Synopsis............................ Highlights
Item 4. Condensed Financial Information..... Not Applicable
Item 5. General Description of Registrant,
Depositor, and Portfolio Companies.. The Company; The Separate
Account; LPT Variable
Insurance Series Trust
Item 6. Deductions and Expenses............. Charges and Deductions
Item 7. General Description of Variable
Annuity Contracts................... The Contracts
Item 8. Annuity Period...................... Annuity Provisions
Item 9. Death Benefit....................... Proceeds Payable on
Death
Item 10. Purchases and Contract Value........ Contributions and
Contract Value
Item 11. Redemptions......................... Withdrawals
Item 12. Taxes............................... Tax Status
Item 13. Legal Proceedings................... Legal Proceedings
Item 14. Table of Contents of the Statement
of Additional Information........... Table of Contents of the
Statement of Additional
Information
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
CROSS REFERENCE SHEET (CONT'D)
(required by Rule 495)
Item No. Location
- -------- -----------------------
PART B
Item 15. Cover Page.......................... Cover Page
Item 16. Table of Contents................... Table of Contents
Item 17. General Information and History..... The Company
Item 18. Services............................ Not Applicable
Item 19. Purchase of Securities Being
Offered............................. Not Applicable
Item 20. Underwriters........................ Distributor
Item 21. Calculation of Performance Data..... Performance Information
Item 22. Annuity Payments.................... Annuity Provisions
Item 23. Financial Statements................ Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate Item so numbered in Part C to this Registration Statement.
PART A
LONDON PACIFIC LIFE & ANNUITY COMPANY
INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACTS
WITH FLEXIBLE CONTRIBUTIONS
issued by
LPLA SEPARATE ACCOUNT ONE
and
LONDON PACIFIC LIFE & ANNUITY COMPANY
The Individual Fixed and Variable Deferred Annuity Contracts with Flexible
Contributions (the "Contracts") described in this Prospectus provide for
accumulation of Contract Values on a fixed and variable basis and payment of
annuity payments on a fixed and variable basis. The Contracts are designed
for use by individuals in retirement plans on a Qualified or Non-Qualified
basis. (See "Definitions.")
Contributions for the Contracts will be allocated to a segregated investment
account of London Pacific Life & Annuity Company (the "Company") which account
has been designated LPLA Separate Account One (the "Separate Account") or to
the Company's Fixed Account. Under certain circumstances, however,
Contributions may initially be allocated to the Salomon Money Market
Sub-Account of the Separate Account. (See "Highlights.") The Separate
Account invests in shares of LPT Variable Insurance Series Trust. (See "LPT
Variable Insurance Series Trust.") LPT Variable Insurance Series Trust is a
series fund with eight Portfolios currently available: MAS Value Portfolio;
MFS Total Return Portfolio; Salomon U.S. Quality Bond Portfolio; Strong
International Stock Portfolio; Salomon Money Market Portfolio; Berkeley
Smaller Companies Portfolio; Lexington Corporate Leaders Portfolio; and Strong
Growth Portfolio.
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 OWNER'S INVESTMENT TO FLUCTUATE, AND WHEN THE CONTRACTS ARE SURRENDERED,
THE VALUE MAY BE HIGHER OR LOWER THAN THE CONTRIBUTIONS.
This Prospectus concisely sets forth the information a prospective investor
should know before investing. Additional information about the Contracts is
contained in the Statement of Additional Information which is available at no
charge. The Statement of Additional Information has been filed with the
Securities and Exchange Commission and is incorporated herein by reference.
The Table of Contents of the Statement of Additional Information can be found
on Page __ of this Prospectus. For the Statement of Additional Information,
call (800) 852-3152 or write to the Company's Annuity Service Center at the
address listed on the back page of this Prospectus .
INQUIRIES:
Any inquiries can be made by telephone or in writing to the Annuity Service
Center listed above on the back page of this Prospectus .
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Prospectus and the Statement of Additional Information are dated
_______________.
This Prospectus should be kept for future reference.
TABLE OF CONTENTS
PAGE
DEFINITIONS
HIGHLIGHTS
FEE TABLE
THE COMPANY
THE SEPARATE ACCOUNT
LPT VARIABLE INSURANCE SERIES TRUST
MAS Value Portfolio
MFS Total Return Portfolio
Salomon U.S. Quality Bond Portfolio
Strong International Stock Portfolio
Salomon Money Market Portfolio
Berkeley Smaller Companies Portfolio
Lexington Corporate Leaders Portfolio
Strong Growth Portfolio
Voting Rights
Substitution of Securities
CHARGES AND DEDUCTIONS
Deduction for Mortality and Expense Risk Charge
Deduction for Administrative Charge
Deduction for Distribution Charge
Deduction for Contract Maintenance Charge
Deduction for Transfer Fee
Deduction for Premium and Other Taxes
Deduction for Expenses of the Trust
THE CONTRACTS
Owner
Joint Owners
Annuitant
Assignment
CONTRIBUTIONS AND CONTRACT VALUE
Contributions
Allocation of Contributions
Dollar Cost Averaging
Contract Value
Exchange Program
Accumulation Units
Accumulation Unit Value
TRANSFERS
Transfers During the Accumulation Period
Transfers During the Annuity Period
WITHDRAWALS
Systematic Withdrawal Option
Suspension or Deferral of Payments
PROCEEDS PAYABLE ON DEATH
Death of Owner During the Accumulation Period
Death Benefit Amount During the Accumulation Period
Death Benefit Options During the Accumulation Period
Death of Owner During the Annuity Period
Death of Annuitant
Payment of Death Benefit
Beneficiary
Change of Beneficiary
ANNUITY PROVISIONS
General
Annuity Date
Selection or Change of an Annuity Option
Frequency and Amount of Annuity Payments
Annuity
Fixed Annuity
Variable Annuity
Annuity Unit
Annuity Options
OPTION A. LIFE ANNUITY
OPTION B. LIFE ANNUITY WITH PERIOD CERTAIN OF 120 MONTHS
OPTION C. JOINT AND SURVIVOR ANNUITY
OPTION D. PERIOD CERTAIN
DISTRIBUTOR
PERFORMANCE INFORMATION
Salomon Money Market Sub-Account
Other Sub-Accounts
TAX STATUS
General
Diversification
Multiple Contracts
Contracts Owned by Other than Natural Persons
Tax Treatment of Assignments
Income Tax Withholding
Tax Treatment of Withdrawals - Non-Qualified Contracts
Qualified Plans
Tax Treatment of Withdrawals - Qualified Contracts
FINANCIAL STATEMENTS
LEGAL PROCEEDINGS
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
APPENDIX
DEFINITIONS
ACCUMULATION PERIOD: The period prior to the Annuity Date during which
Contributions may be made.
ACCUMULATION UNIT: A unit of measure used to determine the value of the
Owner's interest in a Sub-Account of the Separate Account during the
Accumulation Period.
ADJUSTED CONTRACT VALUE: The Contract Value less any applicable Premium Tax
and Contract Maintenance Charge, if any. This amount is applied to the
applicable Annuity Tables to determine Annuity Payments.
AGE: The age of any Owner or Annuitant on his/her last birthday.
ANNUITANT: The natural person on whose life Annuity Payments are based. On
or after the Annuity Date, the Annuitant shall also include 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 made to the Owner or any named payee
after the Annuity Date under the Annuity Option selected.
ANNUITY PERIOD: The period of time beginning with the Annuity Date during
which Annuity Payments are made.
ANNUITY SERVICE CENTER: The office indicated on the back page of this
Prospectus to which notices, requests and Contributions must be sent. All sums
payable to the Company under the Contract are payable only at the Annuity
Service Center.
ANNUITY UNIT: A unit of measure used to calculate Variable Annuity Payments
during the Annuity Period.
BENEFICIARY: The person(s) or entity(ies) who will receive the death benefit
payable under the Contract.
COMPANY: London Pacific Life & Annuity Company.
CONTRACT ANNIVERSARY: An anniversary of the Issue Date.
CONTRACT VALUE: The dollar value as of any Valuation Period of all amounts
accumulated in the Contract.
CONTRACT WITHDRAWAL VALUE: The Contract Value less any applicable Premium
Tax, less any applicable Contract Maintenance Charge.
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.
CONTRIBUTION: A payment made by or on behalf of an Owner with respect to the
Contract.
EFFECTIVE DATE: The date the Company declares a Guaranteed Interest Rate for
a specified Guarantee Period.
ELIGIBLE FUND: An investment entity into which assets of the Separate Account
will be invested.
FIXED ACCOUNT: An investment option within the General Account where the
Company guarantees the rate(s) of interest for a specified Guarantee 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.
GUARANTEE PERIOD: A one year period, commencing on the Issue Date, for which
the Guaranteed Interest Rate is credited. Upon each Contract Anniversary, a
new one year Guarantee Period commences.
GUARANTEED INTEREST RATE: The interest rate credited to the Contract Value by
the Company for any given Guarantee Period.
ISSUE DATE: The date on which the Contract became effective.
NON-QUALIFIED CONTRACTS: Contracts issued under non-qualified plans which do
not receive favorable tax treatment under Section 408 of the Internal Revenue
Code of 1986, as amended (the "Code").
OWNER: The person or entity entitled to the ownership rights stated in the
Contract.
PORTFOLIO: A segment of an Eligible Fund which constitutes a separate and
distinct class of shares.
PREMIUM TAX: Any premium taxes paid to any governmental entity assessed
against Contributions or Contract Value.
QUALIFIED CONTRACTS: Contracts issued under qualified plans which receive
favorable tax treatment under Section 408 of the Code.
SEPARATE ACCOUNT: The Company's separate account designated as LPLA Separate
Account One.
SUB-ACCOUNT: Separate Account assets are divided into Sub-Accounts. Assets of
each Sub-Account will be invested in shares of an Eligible Fund or a Portfolio
of an Eligible Fund.
VALUATION DATE: Each day on which the Company and the New York Stock Exchange
("NYSE") are open for business.
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 in writing, in a form satisfactory to the Company,
which is received by the Annuity Service Center.
HIGHLIGHTS
Contributions for the Contracts will be allocated to a segregated investment
account of London Pacific Life & Annuity Company (the "Company") which account
has been designated LPLA Separate Account One (the "Separate Account") or to
the Company's Fixed Account. Under certain circumstances, however,
Contributions may initially be allocated to the Salomon Money Market
Sub-Account of the Separate Account (see below). The Separate Account invests
in shares of LPT Variable Insurance Series Trust. Owners bear the investment
risk for all amounts allocated to the Separate Account.
The Contract may be returned to the Company for any reason within ten (10)
calendar days (thirty (30) calendar days if purchased by individuals in
California who are 60 years of age or older on the Issue Date, or twenty (20)
calendar days of the date of receipt with respect to the circumstances
described in (c) below) after its receipt by the Owner ("Right to
Examine Contract"). It may be returned to the Company at its Annuity Service
Center. When the Contract is received by the Company at its 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: (a) where the Contract is purchased pursuant
to an Individual Retirement Annuity; (b) in those states which require the
Company to refund Contributions, less withdrawals; or (c) in the case
of Contracts which are deemed by certain states to be replacing an
existing annuity or insurance contract and which require the Company to
refund Contributions, less withdrawals. With respect to the circumstances
described in (a), (b) and (c) above, the Company will refund the greater
of Contributions, less any withdrawals, or the Contract Value, and will
allocate initial Contributions to the Salomon Money Market Sub-Account (except
for any Contribution to be allocated to the Fixed Account as elected by the
Owner) until the expiration of fifteen (15) days from the Issue Date (or
twenty-five (25) days in the case of Contracts described under (c) above).
Upon the expiration of the fifteen (15) day period (or twenty- five (25) day
period with respect to Contracts described under (c)), the Sub-Account
value of the Salomon Money Market Sub-Account will be allocated to the
Separate Account in accordance with the election made by the Owner at the
time the Contract is issued.
The Company reserves the right to offer an exchange program (the "Exchange
Program") which is available only to purchasers who exchange an existing
contract issued by another insurance company not affiliated with the Company
for the Contract offered by this Prospectus. As of the date of this
Prospectus, the Company is making such a Program available. Under the
Exchange Program, the Company adds certain amounts to the Contract Value as
exchange credits ("Exchange credits"). Subject to specific limits, the
Exchange Credits equal the surrender charge paid, if any, to the other
insurance company. (See "Contributions and Contract Value - Exchange
Program").
Each Valuation Period, the Company deducts a Mortality and Expense Risk Charge
from the Separate Account which is equal, on an annual basis, to 1.25% of the
average daily net asset value of each Sub-Account 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.")
Each Valuation Period, the Company deducts a Distribution Charge from the
Separate Account which is equal, on an annual basis, to .10% of the average
daily net asset value of each Sub-Account of the Separate Account. This
charge compensates the Company for the costs associated with the distribution
of the Contracts. (See "Charges and Deductions - Deduction for Distribution
Charge.")
Each Valuation Period, the Company deducts an Administrative Charge from the
Separate Account which is equal, on an annual basis, to .15% of the average
daily net asset value of each Sub-Account of the Separate Account. This
charge compensates the Company for costs associated with the administration of
the Contracts and the Separate Account. (See "Charges and Deductions -
Deduction for Administrative Charge.")
On each Contract Anniversary, the Company deducts a Contract Maintenance
Charge of $36 from the Contract Value by subtracting values from the Fixed
Account and/or by canceling Accumulation Units from each applicable
Sub-Account. However, during the Accumulation Period, if the Contract Value
is at least $50,000 on the Contract Anniversary, then no Contract Maintenance
Charge is deducted. If a total withdrawal is made on other than a Contract
Anniversary and the Contract Value for the Valuation Period during which
the total withdrawal is made is less than $50,000, the full Contract
Maintenance Charge will be deducted at the time of the total withdrawal.
During the Annuity Period, the 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 Contract Maintenance Charge.")
Under certain circumstances, a Transfer Fee may be assessed when an Owner
transfers Contract Values between Sub-Accounts or to or from the Fixed
Account. (See "Charges and Deductions - Deduction for Transfer Fee.")
The Company will not deduct Premium Taxes from an Owner's Contributions before
allocating the Contributions to the Fixed Account and/or Sub-Accounts of the
Separate Account unless required to pay such taxes under applicable state law.
The Company's current practice is to pay the Premium Tax due and deduct the
tax upon full or partial withdrawals, payment of a death benefit or purchase
of an annuity under the Contract. The Company reserves the right to
discontinue the deferral of this tax. (See "Charges and Deductions -
Deduction for Premium and Other Taxes.")
There is a ten percent (10%) federal income tax penalty that may be applied
to the income portion of any distribution from the Contracts. However, the
penalty is not imposed under certain circumstances. See "Tax Status - Tax
Treatment of Withdrawals - Non-Qualified Contracts" and "Tax Treatment of
Withdrawals - 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.
Because of certain exemptive and exclusionary provisions, interests in the
Fixed Account are not registered under the Securities Act of 1933 and the
Fixed Account is not registered as an investment company under the Investment
Company Act of 1940, as amended. Accordingly, neither the Fixed Account nor
any interests therein are subject to the provisions of these Acts, and the
Company has been advised that the staff of the Securities and Exchange
Commission has not reviewed the disclosures in the Prospectus relating to the
Fixed Account. Disclosures regarding the Fixed Account may, however, be
subject to certain generally applicable provisions of the federal securities
laws relating to the accuracy and completeness of statements made in
prospectuses.
LPLA SEPARATE ACCOUNT ONE
FEE TABLE
CONTRACT OWNER TRANSACTION EXPENSES
Sales Charge NONE
Transfer Fee (see Note 2 below) No charge for first 12 transfers in a
Contract Year; thereafter the fee is the
lesser of $20 or 2% of the amount
transferred.
Contract Maintenance Charge $36 per Contract per Contract Year.
(see Note 3 below)
<TABLE>
<CAPTION>
<S> <C>
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Charge 1.25%
Administrative Charge .15%
Distribution Charge .10%
-----
Total Separate Account Annual Expenses 1.50%
</TABLE>
LPT VARIABLE INSURANCE SERIES TRUST ANNUAL EXPENSES
(as a percentage of the average daily net assets of a Portfolio)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Management Other Total Annual
Fees Expenses Expenses*
----------- --------- -------------
MAS Value Portfolio (1) .875% .42% 1.29%
MFS Total Return Portfolio (2) .75% .54% 1.29%
Salomon U.S. Quality Bond Portfolio (2) .55% .44% .99%
Strong International Stock Portfolio (3) .75% .74% 1.49%
Salomon Money Market Portfolio (2) .45% .44% .89%
Berkeley Smaller Companies Portfolio (2) 1.00% .39% 1.39%
Lexington Corporate Leaders Portfolio (3) .65% .64% 1.29%
Strong Growth Portfolio (3) .75% .54% 1.29%
<FN>
(1) LPIMC Insurance Marketing Services, the investment adviser of LPT
Variable Insurance Series Trust (the "Adviser"), has agreed to waive its
entire advisory fee for the Portfolio for the initial three months of the
Portfolio's investment operations and to waive .25% of its advisory fee for the
next three months.
(2) The Adviser has agreed to waive its advisory fee for the Portfolio for
the initial six months of the Portfolio's investment operations.
(3) The Adviser has agreed to waive .25% of its advisory fee for the
Portfolio for the initial six months of the Portfolio's investment operations.
* The Company has voluntarily agreed through December 31, 1997 to reimburse
each Portfolio for certain expenses (excluding brokerage commissions) in excess
of the amounts set forth above under "Total Annual Expenses" for each Portfolio.
If expenses were not reimbursed, the "Other Expenses" and "Total Annual
Expenses" for the year ending December 31, 1996 are estimated to be approximately
1.80% and 2.68%, respectively for the MAS Value Portfolio; 1.65% and 2.40%,
respectively, for the MFS Total Return Portfolio; 2.83% and 3.38%, respectively,
for the Salomon U.S. Quality Bond Portfolio; 2.51% and 3.26%, respectively, for the
Strong International Stock Portfolio; 2.83% and 3.28%, respectively, for the Salomon
Money Market Portfolio; 1.81% and 2.81%, respectively, for the Berkeley Smaller
Companies Portfolio; 1.74% and 3.04%, respectively, for the Lexington Corporate
Leaders Portfolio; and 1.91% and 2.66%, for the Strong Growth Portfolio. The
examples below are calculated based upon such expense reimbursement arrangements.
</TABLE>
EXAMPLES (See Note 6 below)
An Owner would pay the following expenses on a $1,000 investment, assuming a
5% annual return on assets regardless of whether the Contract is surrendered
at the end of each time period or if the Contract is annuitized.
<TABLE>
<CAPTION>
<S> <C> <C>
Time Periods
1 year 3 years
------ -------
MAS Value Portfolio 30.04 94.47
MFS Total Return Portfolio 30.04 94.47
Salomon U.S. Quality Bond Portfolio 26.96 84.78
Strong International Stock Portfolio 32.09 100.94
Salomon Money Market Portfolio 25.94 81.55
Berkeley Smaller Companies Portfolio 31.06 97.70
Lexington Corporate Leaders Portfolio 30.04 94.47
Strong Growth Portfolio 30.04 94.47
</TABLE>
NOTES TO FEE TABLE AND EXAMPLES
1. The purpose of the Fee Table is to assist Owners in understanding the
various costs and expenses that an Owner will incur directly or indirectly.
For additional information, see "Charges and Deductions" in this Prospectus
and the Prospectus for LPT Variable Insurance Series Trust.
2. Transfers made at the end of the Right to Examine Contract period and
any transfers made pursuant to an approved Dollar Cost Averaging Program will
not be counted in determining the application of the Transfer Fee.
3. During the Accumulation Period, if the Contract Value on the Contract
Anniversary is at least $50,000, then no Contract Maintenance Charge is
deducted. If a total withdrawal is made on other than a Contract Anniversary
and the Contract Value for the Valuation Period during which the total
withdrawal is made is less than $50,000, the full Contract Maintenance Charge
will be deducted at the time of the total withdrawal. During the Annuity
Period, the full charge will be deducted regardless of Contract size.
4. Premium Taxes are not reflected. Premium taxes may apply. (See
"Charges and Deductions - Deduction for Premium and Other Taxes.")
5. The Examples assume an estimated $25,000 Contract Value so that the
Contract Maintenance Charge per $1,000 of net asset value in the Separate
Account is $1.44. Such charge would be higher for smaller Contract Values and
lower for higher Contract Values.
6. 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
London Pacific Life & Annuity Company (the "Company") was organized in 1927 in
North Carolina as a stock life insurance company. The Company was acquired
from Liberty Life in 1989 and was formerly named Southern Life Insurance
Company. The Company is authorized to sell life insurance and annuities in
forty states and the District of Columbia. The Company's ultimate parent is
London Pacific Group Limited, an international fund management firm chartered
in Jersey, Channel Islands.
THE SEPARATE ACCOUNT
The Board of Directors of the Company adopted a resolution to establish a
segregated asset account pursuant to North Carolina insurance law on November
21, 1994. This segregated asset account has been designated LPLA Separate
Account One (the "Separate Account"). The Company has caused the Separate
Account to be registered with the Securities and Exchange Commission as a unit
investment trust pursuant to the provisions of the Investment Company Act of
1940.
The assets of the Separate Account are the property of the Company. However,
the assets of the Separate Account, equal to the reserves and other contract
liabilities with respect to the Separate Account, are not chargeable with
liabilities arising out of any other business the Company may conduct.
Income, gains and losses, whether or not realized, are, in accordance with the
Contracts, credited to or charged against the Separate Account without regard
to other income, gains or losses of the Company. The Company's obligations
arising under the Contracts are general obligations.
The Separate Account meets the definition of a "separate account" under
federal securities laws.
The Separate Account is divided into Sub-Accounts. Each Sub-Account invests
in one Portfolio of LPT Variable Insurance Series Trust. There is no
assurance that the investment objectives of any of the Portfolios will be met.
Owners bear the complete investment risk for Contributions allocated to a
Sub-Account. Contract Values will fluctuate in accordance with the investment
performance of the Sub-Accounts to which Contributions are allocated, and in
accordance with the imposition of the fees and charges assessed under the
Contracts.
LPT VARIABLE INSURANCE SERIES TRUST
LPT Variable Insurance Series Trust (the "Trust") has been established to act
as the funding vehicle for the Contracts offered. LPIMC Insurance Marketing
Services (the "Adviser"), a subsidiary of the Company and a registered
investment adviser under the Investment Advisers Act of 1940, serves as
investment adviser to the Trust. The Adviser manages the investment
strategies and policies of the Portfolios and the Trust, subject to the
control of the Board of Trustees of the Trust. The Adviser has entered into
sub-advisory agreements with professional managers for investment of the
assets of each Portfolio. The Sub-Adviser for each Portfolio is listed
under each Portfolio's investment objectives below. The Portfolios pay
monthly investment management fees to the Adviser, and the Adviser
pays the sub-advisers for their services to the Portfolios. The Adviser
retains a management fee as compensation for providing certain services
to the Portfolios at an annual rate of .25% of each Portfolio's net assets
for all Portfolios. See "Management of the Trust" in the Prospectuses
for the Portfolios of the Trust, which accompany this Prospectus, for
additional information concerning the Adviser and the Sub-Advisers,
including a description of advisory and sub-advisory fees.
The Trust is an open-end, series management investment company. While a
brief summary of the investment objectives of the Portfolios is set
forth below, more comprehensive information, including a discussion of
potential risks, is found in the current Prospectuses for the Portfolios
which are included with this Prospectus. Additional Prospectuses and
the Statement of Additional Information can be obtained by calling or
writing the Company. PURCHASERS SHOULD READ THIS PROSPECTUS AND THE
PROSPECTUSES FOR THE PORTFOLIOS CAREFULLY BEFORE INVESTING.
The Trust is intended to meet differing investment objectives with its
currently available separate Portfolios.
MAS VALUE PORTFOLIO : The investment objective of the MAS Value Portfolio is
to achieve above-average total return over a market cycle of three to five
years, consistent with reasonable risk, by investing in common stocks with
equity capitalizations usually greater than $300 million which are deemed by
the Sub-Adviser to be relatively undervalued, based on various measures such
as price/earnings ratios and price/book ratios. While capital return will be
emphasized somewhat more than income return, the Portfolio's total return will
consist of both capital and income returns. The Sub-Adviser for this
Portfolio is Miller Anderson & Sherrerd, LLP.
MFS TOTAL RETURN PORTFOLIO : The MFS Total Return Portfolio's investment
objective is to seek total return by investing in securities which will
provide above-average income (compared to a portfolio entirely invested in
equity securities) and opportunities for growth of capital and income,
consistent with the prudent employment of capital. Under normal market
conditions, at least 25% of the Portfolio's assets will be invested in fixed
income securities and at least 40% and no more than 75% of the Portfolio's
assets will be invested in equity securities. The Sub-Adviser for this
Portfolio is Massachusetts Financial Services Company.
SALOMON U.S. QUALITY BOND PORTFOLIO : The investment objective of the Salomon
U.S. Quality Bond Portfolio is to obtain a high level of current income. It
is a diversified Portfolio that seeks to attain its objective by investing
primarily in debt obligations and mortgage-backed securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities including
collateralized mortgage obligations backed by such securities. The Portfolio
may also invest a portion of its assets in investment grade bonds. The
Sub-Adviser for this Portfolio is Salomon Brothers Asset Management Inc.
STRONG INTERNATIONAL STOCK PORTFOLIO : The investment objective of the Strong
International Stock Portfolio is to seek capital growth. The Portfolio
invests primarily in the equity securities of issuers located outside the
United States. The Portfolio will invest at least 65% of its total assets in
foreign equity securities, including common stocks, preferred stocks, and
securities that are convertible into common or preferred stocks, such as
warrants and convertible bonds, that are issued by companies whose principal
headquarters are located outside the United States. Under normal market
conditions, the Portfolio expects to invest at least 90% of its total assets
in foreign equity securities. The Portfolio will normally invest in
securities of issuers located in at least five foreign countries.
Investing in securities of foreign issuers involves risks not associated with
investing in securities of domestic issuers. Purchasers are cautioned to
read the section entitled "Implementation of Policies and Risks - Foreign
Securities and Currencies" in the Trust Prospectus for a discussion of the
risks involved in foreign investing. The Sub-Adviser for this Portfolio is
Strong Capital Management, Inc.
SALOMON MONEY MARKET PORTFOLIO : The investment objective of the Salomon Money
Market Portfolio is to seek as high a level of current income as is consistent
with liquidity and the stability of principal. The Portfolio invests in
high-quality short-term U.S. dollar-denominated money market instruments which
are deemed to mature in thirteen months or less, and is managed so that the
average portfolio maturity of all portfolio instruments (on a dollar-weighted
basis) will not exceed 90 days. An investment in this Portfolio is neither
insured nor guaranteed by the U.S. Government and there can be no assurance
that the Portfolio will be able to maintain a stable net asset value of $1.00
per share. The Sub-Adviser for this Portfolio is Salomon Brothers Asset
Management Inc.
BERKELEY SMALLER COMPANIES PORTFOLIO : The investment objective of the
Berkeley Smaller Companies Portfolio is to seek long-term capital
appreciation by investing primarily in equity securities of those smaller
companies that the Sub-Adviser believes may be the industry leaders of
tomorrow. The Portfolio will select its portfolio investments primarily
from among U.S. and foreign companies with individual market capitalizations
which would, at the time of purchase, place them in the same size range
as companies included in the NASDAQ Composite Index, excluding its top 75
companies. Based on this policy and recent U.S. share prices, the
companies in which the Portfolio invests typically will have individual
market capitalizations of less than $1.0 billion ("smaller companies").
Under normal market conditions, the Portfolio will invest at least 65% of
its total assets in smaller companies. The Sub-Adviser for this Portfolio is
Berkeley Capital Management.
LEXINGTON CORPORATE LEADERS PORTFOLIO : The investment objective of the
Lexington Corporate Leaders Portfolio is to seek long-term capital growth and
income through investment in the common stocks of large, well-established
companies. The Portfolio will seek to maintain an equal number of shares in
each of the companies in which it invests. The companies in which the
Portfolio will invest have a large market capitalization (in excess of $1.0
billion), an established history of earnings and dividend payments, a large
number of publicly held shares and high trading volume and a high degree of
liquidity. The Portfolio's common stock investments will be selected from a
list of 100 "corporate leaders" of commerce and industry, as determined by the
Sub-Adviser. The Sub-Adviser for this Portfolio is Lexington Management
Corporation.
STRONG GROWTH PORTFOLIO : The investment objective of the Strong Growth
Portfolio is to seek capital growth. The Portfolio invests primarily in
equity securities that the Sub-Adviser believes have above-average growth
prospects. Under normal market conditions, the Portfolio will invest at least
65% of its total assets in equity securities, including common stocks,
preferred stocks, and securities that are convertible into common or preferred
stocks, such as warrants and convertible bonds. The Sub-Adviser for this
Portfolio is Strong Capital Management, Inc.
VOTING RIGHTS
In accordance with its view of present applicable law, the Company will vote
the shares of the Trust held in the Separate Account at special meetings of
the shareholders in accordance with instructions received from persons having
the voting interest in the Separate Account. The Company will vote shares for
which it has not received instructions, as well as shares attributable to it,
in the same proportion as it votes shares for which it has received
instructions. The Trust does not hold regular meetings of shareholders.
The number of shares which a person has a right to vote will be determined as
of a date to be chosen by the Company not more than sixty (60) days prior to a
shareholder meeting of the Trust. Voting instructions will be solicited by
written communication at least ten (10) days prior to the meeting.
SUBSTITUTION OF SECURITIES
If the shares of an Eligible Fund (or any Portfolio within an Eligible Fund or
any other Eligible Fund or Portfolio), 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 Eligible Fund or Portfolio
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.
CHARGES AND DEDUCTIONS
Various charges and deductions are made from the Contract Value, the Separate
Account and the Fixed 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
from the Separate Account which is equal, on an annual basis, to 1.25%
(consisting of approximately .25% for mortality risks and approximately 1.00%
for expense risks) of the average daily net asset value of each Sub-Account 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 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
that anticipated in the mortality tables, 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, the Company bears a mortality risk with respect
to the death benefit. 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 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.
The 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 from the
Separate Account which is equal, on an annual basis, to .15% of the average
daily net asset value of each Sub-Account of the Separate Account. This
charge, together with the Contract Maintenance Charge (see below), is to
reimburse the Company for the expenses it incurs in the establishment and
maintenance of the Contracts and the Separate Account. These expenses include
but are not limited to: preparation of the Contracts, confirmations, annual
reports and statements, maintenance of 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 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 will not
increase this charge and will incur the loss.
DEDUCTION FOR DISTRIBUTION CHARGE
Each Valuation Period, the Company deducts a Distribution Charge from the
Separate Account which is equal, on an annual basis, to .10% of the average
daily net asset value of each Sub-Account of the Separate Account. This
charge compensates the Company for the costs associated with the distribution
of the Contracts. The Company does not intend to profit from this charge.
This charge will be reduced to the extent that amount of this charge is in
excess of that necessary to reimburse the Company for its costs of
distribution. Should this charge prove to be insufficient, the Company will
not increase this charge and will incur the loss. The staff of the Securities
and Exchange Commission deems the Distribution Charge to constitute a deferred
sales charge.
DEDUCTION FOR CONTRACT MAINTENANCE CHARGE
On each Contract Anniversary, the Company deducts a Contract Maintenance
Charge from the Contract Value by subtracting values from the Fixed Account
and/or by canceling Accumulation Units from each applicable Sub-Account to
reimburse it for expenses relating to maintenance of the Contracts. The
Contract Maintenance Charge is $36.00 each Contract Year. However, during the
Accumulation Period, if the Contract Value in the Separate Account and the
Fixed Account on the Contract Anniversary is at least $50,000, then no
Contract Maintenance Charge is deducted. If a total withdrawal is made on
other than a Contract Anniversary and the Contract Value for the Valuation
Period during which the total withdrawal is made is less than $50,000, the
full Contract Maintenance Charge will be deducted at the time of the total
withdrawal. During the Annuity Period, the Contract Maintenance Charge will
be deducted from Annuity Payments regardless of Contract size and will result
in a reduction of each Annuity Payment. The Contract Maintenance Charge will
be deducted from the Fixed Account and the Sub-Accounts in the Separate
Account in the same proportion that the amount of Contract Value in the Fixed
Account and each Sub-Account bears to the total Contract Value. 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.
DEDUCTION FOR TRANSFER FEE
An Owner may transfer all or part of the Owner's interest in a Sub-Account or
the Fixed Account (subject to Fixed Account provisions) without the imposition
of any fee or charge if there have been no more than 12 transfers made in a
Contract Year. If more than twelve transfers have been made in a Contract
Year, the Company will deduct a Transfer Fee which is equal to the lesser of
$20 or 2% of the amount transferred. A transfer made at the end of the
Right to Examine Contract period from the Salomon Money Market Sub-Account
will not count in determining the application of the Transfer Fee. If the
Owner is participating in an approved Dollar Cost Averaging program, such
transfers currently are not counted toward the number of transfers for the
year and are not taken into account in determining any Transfer Fee.
DEDUCTION FOR PREMIUM AND OTHER TAXES
Any taxes, including any Premium Taxes, paid to any governmental entity
relating to the Contract may be deducted from the Contributions or Contract
Value when incurred. The Company will, in its sole discretion, determine when
taxes have resulted from: the investment experience of the Separate Account;
receipt by the Company of the Contributions; or commencement of Annuity
Payments. The Company may, at its sole discretion, pay 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. The Company's current practice is to pay any Premium Taxes
when incurred and deduct the tax upon full or partial withdrawals, payment of
a death benefit or purchase of an annuity under the Contract. The Company
reserves the right to discontinue the deferral of Premium Taxes. Premium
taxes generally range from 0% to 4%.
While the Company is not currently maintaining a provision for federal income
taxes with respect to the Separate Account, the Company has reserved the right
to establish a provision for 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 will deduct any withholding taxes required by applicable law.
See "Tax Status - Income Tax Withholding."
DEDUCTION FOR EXPENSES OF THE TRUST
There are other deductions from and expenses (including management fees paid
to the Adviser and other expenses) paid out of the assets of the Trust which
are described in the Prospectuses for the Portfolios of the Trust.
THE CONTRACTS
OWNER
The Owner has all interest and rights to amounts held in his or her Contract.
The Owner is the person designated as such on the Issue Date, unless changed.
The Owner may change owners of the Contract at any time prior to the Annuity
Date by Written Request. A change of Owner will automatically revoke any
prior designation of Owner. The change will become effective as of the date
the Written Request is signed. A new designation of Owner will not apply to
any payment made or action taken by the Company prior to the time it was
received.
For Non-Qualified Contracts, in accordance with Code Section 72(u), a
deferred annuity contract held by a corporation or other entity that is not a
natural person is not treated as an annuity contract for tax purposes. Income
on the contract is treated as ordinary income received by the owner during
the taxable year. However, for purposes of Code Section 72(u), an annuity
contract held by a trust or other entity as agent for a natural person is
considered held by a natural person and treated as an annuity contract for
tax purposes. Tax advice should be sought prior to purchasing a Contract
which is to be owned by a trust or other non-natural person.
JOINT OWNERS
The Contract can be owned by Joint Owners. If Joint Owners are named, any
Joint Owner must be the spouse of the other Owner. Upon the death of either
Owner, the surviving Joint Owner will be the Primary Beneficiary. Any other
Beneficiary designation 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 Owners both signatures will
be required for all Owner transactions except telephone transfers. If the
telephone transfer option is elected and there are Joint Owners, either Joint
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 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.
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 Owner's rights may only be exercised with the
consent of the assignee of record.
If the Contract is issued pursuant to a retirement plan which receives
favorable tax treatment under the provisions of Section 408 of the Code, it
may not be assigned, pledged or otherwise transferred except as may be
allowed under applicable law.
CONTRIBUTIONS AND CONTRACT VALUE
CONTRIBUTIONS
The initial Contribution is due on the Issue Date. The minimum initial
Contribution is $10,000 (except for Individual Retirement Annuities, the
minimum initial Contribution is $1,000). The minimum subsequent Contribution
is $1,000, or if the periodic investment plan option is elected $100. The
maximum total Contributions the Company will accept without Company approval
are $1,000,000, except for issue Ages greater than 75 years old for
which the maximum total Contributions are $500,000. The Company reserves the
right to reject any Contribution or Contract.
ALLOCATION OF CONTRIBUTIONS
Contributions are allocated to the Fixed Account and/or to one or more
Sub-Accounts of the Separate Account in accordance with the selections made by
the Owner. The allocation of the initial Contribution is made in accordance
with the selection made by the Owner at the Issue Date. Unless otherwise
changed by the Owner, subsequent Contributions are allocated in the same
manner as the initial Contribution. Allocation of the Contribution is subject
to the terms and conditions imposed by the Company. There are currently no
limitations on the number of Sub-Accounts that can be selected by an Owner.
Allocations must be in whole percentages with a minimum allocation of 10% of
each Contribution or transfer, unless the Contribution is being made pursuant
to an approved Dollar Cost Averaging Program . Under certain
circumstances, the Company will allocate initial Contributions to the
Salomon Money Market Sub-Account until the expiration of the Right to Examine
Contract period (see "Highlights").
For initial Contributions, if the forms required to issue a Contract are in
good order, the Company will apply the Contribution to the Separate Account
and credit the Contract with Accumulation Units and/or to the Fixed Account
and credit the Contract with dollars within two business days of receipt.
In addition to the underwriting requirements of the Company, good order means
that the Company has received federal funds (monies credited to a bank's
account with its regional Federal Reserve Bank). 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 Contribution within
five business days. The Company will not retain the Contribution for more
than five business days while processing incomplete forms unless it has been
so authorized by the purchaser. For subsequent Contributions, the Company will
apply Contributions to the Separate Account and credit the Contract with
Accumulation Units and/or to the Fixed Account and credit the Contract with
dollars as of the end of the Valuation Period during which the Contribution
was received in good order.
DOLLAR COST AVERAGING PROGRAM
Dollar Cost Averaging is a program which, if elected, permits an Owner to
systematically transfer amounts on a monthly, quarterly, semi-annual or annual
basis from the Salomon Money Market Sub-Account, the Salomon U.S. Quality Bond
Portfolio or the Fixed Account to one or more Sub-Accounts. Dollar Cost
Averaging may be elected if the Owner's Contract Value is at least $20,000 as
of the Valuation Date Dollar Cost Averaging is elected. By allocating amounts
on a regularly scheduled basis as opposed to allocating the total amount at
one particular time, an Owner may be less susceptible to the impact of market
fluctuations. The minimum amount which may be transferred is $500 per
transfer. The amount must be a fixed dollar amount. Transfers to the Fixed
Account are not permitted. The Company reserves the right, at any time and
without prior notice to any party, to terminate, suspend or modify its Dollar
Cost Averaging Program .
If selected, Dollar Cost Averaging must be for at least 12 months. There is
no current charge for Dollar Cost Averaging. However, the Company reserves
the right to charge for Dollar Cost Averaging in the future. The standard
date of the month for transfers is the date the Owner's request for enrollment
in the program is received and processed by the Company and subsequent
monthly, quarterly, semi-annual or annual anniversaries of that date. The
Owner may specify a different future date. Transfers made pursuant to the
Dollar Cost Averaging Program are not taken into account in
determining any Transfer Fee.
CONTRACT VALUE
The Contract Value for any Valuation Period is the sum of the Contract Value
in each of the Sub-Accounts of the Separate Account and the Contract Value in
the Fixed Account.
The Contract Value in a Sub-Account of the Separate Account is determined by
multiplying the number of Accumulation Units allocated to the Sub-Account by
the Accumulation Unit value.
EXCHANGE PROGRAM
The Company reserves the right to offer an exchange program (the "Exchange
Program") which is available only to purchasers who exchange an existing
contract issued by another insurance company not affiliated with the Company
(an "Exchange Contract") for a Contract offered by this Prospectus. As of the
date of this Prospectus, the Company is making such a program available.
However, the Company reserves the right to modify, suspend, or terminate the
Exchange Programs at any time or from time to time without notice. If such an
Exchange Program is in effect, it will apply to all such exchanges for a
Contract.
The Exchange Program is available only where permitted by law to owners of
insurance or annuity contracts. A currently owned annuity or life insurance
policy (either fixed or variable) may be exchanged for a Contract pursuant to
Section 1035 of the Code, or where applicable, may qualify for a "rollover" or
transfer to a Contract pursuant to other sections of the Code. Purchasers
should carefully evaluate whether the Exchange Program offers benefits which
are more favorable than if the Owner continued to hold the Exchange Contract.
Factors to consider include, but are not limited to: (a) the amount, if any,
of the surrender charges under the Exchange Contract, which can be ascertained
from the insurance company which issued the contract; (b) the time remaining
under the Exchange Contract during which surrender charges apply; (c) the
on-going charges, if any, under the Exchange Contract versus the on-going
charges under the Contract; and (d) the amount and timing of any benefits
under such an Exchange Program. While the Company knows of no adverse federal
income tax consequences, Owners should consult with their own tax adviser as
to the tax consequences of such an exchange.
Under the currently available Exchange Program, the Company adds certain
amounts to the Contract Value as exchange credits ("Exchange Credits"). Such
Exchange Credits are credited by the Company on behalf of Owners of Exchange
Contracts with funds from the Company's General Account. Subject to a
specified limit (the "Exchange Credit Limit") discussed below, the Exchange
Credits equal the surrender charge paid, if any, to the other insurance
company. The Exchange Program is subject to the following rules:
(1) The Company does not add Exchange Credits unless it receives in
writing, not later than 30 days after the issue of the Contract, evidence
satisfactory to the Company of the surrender charge, if any, paid by the Owner
to surrender the Exchange Contract and the amount of any such charge.
(2) The Company allocates the Exchange Credits to the Contract Value 30
days after a Contract is issued (40 days after a Contract is issued in
California if the purchaser is 60 years of age or older). The ratio of the
Exchange Credits to be added to the Fixed Account is the ratio between such
Fixed Account and the Contribution on the date the Contract is issued (40 days
after the Contract is issued in California if the purchaser is 60 years of age
or older). The Exchange Credits, if any, to be allocated to the Separate
Account are pro-rated among the Sub-Accounts based on the ratio of the
Contract Values in the Sub-Accounts 30 days after the Contract is issued. The
allocations are made as follows:
(a) for Fixed Account allocations: once any applicable Exchange
Credits are allocated, interest is credited as if the Exchange Credits had
been allocated as of the Issue Date.
(b) for allocations to any Sub-Accounts: the Company adds
Accumulation Units at the Accumulation Unit Value for the designated
Sub-Accounts as of the Valuation Period of such addition.
(3) The value of the Exchange Credits as of the date of the allocation
to the Sub-Accounts equals the lesser of the Exchange Credits Limit or the
surrender charge paid to surrender the Exchange Contract. The Exchange Credit
Limit currently is 5% of the net amount payable upon surrender of the Exchange
Contract. It is not based on any other Contribution. The Company reserves
the right at any time and from time to time to increase or decrease the
Exchange Credit Limit. However, the Exchange Credit Limit in effect at any
time will apply to all purchases qualifying for the Exchange Program.
(4) The Company does not consider additional amounts credited to the
Contract Value under the Exchange Program to be an increase in the Owner's
investment in the Contract.
ACCUMULATION UNITS
Accumulation Units will be used to account for all amounts allocated to or
withdrawn from the Sub-Accounts of the Separate Account as a result of
Contributions, 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
request for 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. The Accumulation Unit Value for each Sub-Account for any later
Valuation Period is determined by subtracting (2) from (1) and dividing the
result by (3) where:
1. is the result of:
a. the assets of the Sub-Account attributable to Accumulation Units;
plus or minus
b. the cumulative charge or credit for taxes reserved which is
determined by the Company to have resulted from the operation
of the Sub-Account.
2. is the cumulative unpaid charge for the Mortality and Expense Risk
Charge, for the Administrative Charge and for the Distribution Charge.
3. is the number of Accumulation Units outstanding at the end of
the valuation Period.
The Accumulation Unit Value may increase or decrease from Valuation Period to
Valuation Period.
TRANSFERS
TRANSFERS DURING THE ACCUMULATION PERIOD
Subject to any limitation imposed by the Company on the number of transfers
(currently, unlimited) that can be made during the Accumulation Period, the
Owner may transfer all or part of the Contract Value in a Sub-Account or the
Fixed Account by Written Request without the imposition of any fee or charge
if there have been no more than the number of free transfers (currently,
twelve). All transfers are subject to the following:
1. If more than the number of free transfers have been made in a
Contract Year, 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 Contract Value in the
Fixed Account or the Sub-Account from which the transfer is made. However, if
the Owner's entire Contract Value in the Fixed Account or a Sub-Account is
being transferred, the Transfer Fee will be deducted from the amount which is
transferred. If the Contract Value is being transferred from more than one
Sub-Account or a Sub-Account and the Fixed Account, any Transfer Fee will be
allocated to the Fixed Account and to those Sub-Accounts on a pro-rata basis
in proportion to the amount transferred from each.
2. The minimum amount which can be transferred is $500 (from (i) one or
multiple Sub-Accounts or (ii) the Fixed Account) or the Owner's entire
interest in the Sub-Account or the Fixed Account, if less. The minimum
amount which must remain in a Sub-Account after a transfer is $500 per
Sub-Account, or $0 if the entire amount in the Sub-Account is transferred.
Transfers made pursuant to an approved Dollar Cost Averaging Program will
not be subject to this limitation. The minimum amount which must remain in
the Fixed Account after a transfer is $500, or $0 if the entire amount in
any Guarantee Period is transferred. Transfers made from any Guarantee
Period pursuant to an approved Dollar Cost Averaging Program will not be
subject to these limits.
3. 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.
Owners can elect to make transfers by telephone. To do so Owners must complete
a Written Request. 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 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 Owners, unless the Company is informed to the contrary,
telephone instructions will be accepted from either of the Joint Owners.
Neither the Separate Account nor the Trust are designed for professional
market timing organizations or other entities using programmed and frequent
transfers. A pattern of exchanges that coincides with a "market timing"
strategy may be disruptive to a Portfolio. The Company reserves the right to
restrict the transfer privilege or reject any specific Contribution allocation
request for any person whose transactions seem to follow a timing pattern.
TRANSFERS DURING THE ANNUITY PERIOD
During the Annuity Period, the Owner may make transfers, by Written Request,
as follows:
1. The Owner may make transfers of Contract Values between Sub-Accounts,
subject to any limitations imposed by the Company on the number of transfers
that can be made during the Annuity Period (currently, unlimited). If more
than the number of free transfers have been made in a Contract Year, the
Company will deduct a Transfer Fee for each subsequent transfer permitted.
The Transfer Fee will be deducted from the amount which is transferred. The
Transfer Fee is the lesser of $20 or 2% of the amount transferred.
2. The Owner may not make a transfer from the Separate Account to the
Fixed Account. The Owner may not make a transfer from the Fixed Account to
the Separate Account.
3. Transfers between Sub-Accounts will be made by converting the number
of Annuity Units 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
without the transfer. Thereafter, Annuity Payments will reflect changes in
the value of the new Annuity Units.
4. The minimum amount which can be transferred is $500 (from one or
multiple Sub-Accounts) or the Owner's entire interest in the Sub-Account, if
less. The minimum amount which must remain in a Sub-Account after a transfer
is $500 per Sub-Account, or $0 if the entire amount in the Sub-Account is
transferred.
5. 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.
Owners can elect to make transfers by telephone. To do so Owners must complete
a Written Request. 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 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 Owners, unless the Company is informed to the contrary,
telephone instructions will be accepted from either of the Joint Owners.
WITHDRAWALS
During the Accumulation Period, the Owner may, upon a Written Request, make a
total or partial withdrawal of the Contract Withdrawal Value.
Unless the Owner instructs the Company otherwise, a partial withdrawal will
be made from the Separate Account. A partial withdrawal will result in the
cancellation of Accumulation Units from each applicable Sub-Account in the
ratio that the Owner's interest in the Sub-Account bears to the total Contract
Value allocated to the Separate Account. The Owner must specify by Written
Request in advance which Sub-Account Accumulation Units are to be cancelled if
other than the above method is desired.
A partial withdrawal from the Fixed Account is made for a Contract with
multiple Contributions during the Guarantee Period by a withdrawal from the
Contribution with the most recent Effective Date.
The Company will pay the amount of any withdrawal from the Separate Account
within seven (7) days of receipt of a request in good order unless the
Suspension or Deferral of Payments provision is in effect.
Each partial withdrawal must be for at least $500. The minimum Contract Value
which must remain in the Contract after a partial withdrawal is $2,000. The
minimum Contract Value which must remain in a Sub-Account or the Fixed
Account after a partial withdrawal is $500.
SYSTEMATIC WITHDRAWAL OPTION
The Company permits a Systematic Withdrawal Option which enables an Owner to
pre-authorize a periodic exercise of the contractual withdrawal rights
described above. The Systematic Withdrawal Option is available if the Owner's
Contract Value is at least $20,000 as of the Valuation Date this option is
requested. The Owner or the Company may terminate systematic withdrawals upon
30 days' prior written notice. There is currently no charge for systematic
withdrawals. However, the Company reserves the right to charge for systematic
withdrawals in the future. The total permitted systematic withdrawal in a
Contract Year is limited to not more than 10% of the unliquidated
Contributions as of the immediately preceding Contract Anniversary or, if
during the first Contract Year, as of the Issue Date. The
Systematic Withdrawal Option can be exercised at any time, including during
the first Contract Year.
Systematic withdrawals are available for Qualified and Non-Qualified Contracts.
Certain tax penalties and restrictions may apply to systematic withdrawals
from the Contracts. (See "Tax Status - Tax Treatment of Withdrawals -
Qualified Contracts" and "Tax Status - Tax Treatment of Withdrawals -
Non-Qualified Contracts.") Owners entering into such a program instruct the
Company to withdraw an amount specified as a percentage of the Contribution,
or a percentage of Contract Value, or in dollars on a monthly, quarterly or
semi-annual basis. The minimum withdrawal amount is $100 per payment. The
standard date of the month for withdrawals is the date the Owner's request for
enrollment in the program is received and processed by the Company, and
subsequent monthly (or the payment schedule selected) anniversaries of that
date. The Owner may specify a different future date.
SUSPENSION OR DEFERRAL OF PAYMENTS
The Company reserves the right to suspend or postpone payments from the
Separate Account 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 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 further reserves the right to postpone payment for a withdrawal or
transfer from the Fixed Account for a period of up to six months.
PROCEEDS PAYABLE ON DEATH
DEATH OF OWNER DURING THE ACCUMULATION PERIOD
Upon the death of the Owner or any Joint Owner prior to the Annuity Date, the
death benefit will be paid to the Beneficiary(ies) designated by the Owner.
Upon the death of a Joint Owner, the surviving Joint 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.
A Beneficiary may request that the death benefit be paid under one of the
Death Benefit Options described below. If the Beneficiary is the spouse of
the Owner he or she may elect to continue the Contract at the then current
Contract Value in his or her own name and exercise all the Owner's rights
under the Contract.
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD
Prior to the Owner, or the oldest Joint Owner, attaining Age 80, the death
benefit during the Accumulation Period will be the greater of:
1. The Adjusted Contributions; 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 seventh year Contract
Anniversary or the Adjusted Contributions as of the most recent
seventh year Contract Anniversary, whichever is greater. This amount
is increased for subsequent Contributions and reduced for subsequent
partial withdrawals in the same proportion that the Contract Value was
reduced on the date of the withdrawal.
After the Owner, or the oldest Joint Owner, attains age 80 the death benefit
during the Accumulation Period will be the Contract Value determined as of
the end of the Valuation Period during which the Company receives both
due proof of death and an election for the payment method.
Adjusted Contributions are equal to the initial Contribution increased for
subsequent Contributions and reduced for subsequent partial withdrawals in the
same proportion that the Contract Value was reduced on the date of the
withdrawal.
In certain states, the death benefit during the Accumulation Period will
be the Contract Value determined as of the end of the Valuation Period during
which the Company receives both due proof of death and an election for the
payment method.
Owners should refer to their Contract for the applicable death
benefit provision.
See the "Appendix" for examples of how the death benefit is calculated.
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD
A non-spousal Beneficiary must elect the death benefit to be paid under one of
the following options in the event of the death of the Owner during the
Accumulation Period:
OPTION 1 - lump sum payment of the death benefit; or
OPTION 2 - payment of the entire death benefit within 5 years of
the date of the death of the 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 year of
the date of death of the Owner or any Joint Owner.
Any portion of the death benefit not applied under Option 3 within one year of
the date of the Owner's death, must be distributed within five years of the
date of death.
A spousal Beneficiary may elect to continue the Contract in his or her own
name at the then current Contract Value, elect a lump sum payment of the death
benefit or apply the death benefit to an Annuity Option.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the Suspension or
Deferral of Payments provision is in effect.
Payment to the Beneficiary, other than in a lump sum, may only be elected
during the sixty-day period beginning with the date of receipt of proof of
death.
DEATH OF OWNER DURING THE ANNUITY PERIOD
If the Owner or a Joint Owner, who is not the Annuitant, dies during the
Annuity Period, any remaining payments under the Annuity Option elected will
continue at least as rapidly as under the method of distribution in effect at
such Owner's death. Upon the death of the Owner during the Annuity Period, the
Beneficiary becomes the Owner.
DEATH OF ANNUITANT
Upon the death of the Annuitant, who is not the Owner, during the Accumulation
Period, the 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 Owner will become the Annuitant. If the
Owner is a non-natural person, the death of the Annuitant will be treated as
the death of the Owner and a new Annuitant may not be designated.
Upon the death of the Annuitant during the Annuity Period, 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. The Beneficiary is entitled to receive the benefits to be paid
at the death of the Owner. Unless the Owner provides otherwise, the death
benefit will be paid in equal shares to the survivor(s) as follows:
1. to the Primary Beneficiary(ies) who survive the Owner's and/or the
Annuitant's death, as applicable; or if there are none
2. to the Contingent Beneficiary(ies) who survive the Owner's and/or the
Annuitant's death, as applicable; or if there are none
3. to the estate of the Owner.
CHANGE OF BENEFICIARY
Subject to the rights of any irrevocable Beneficiary(ies), the Owner may
change the Primary Beneficiary(ies) or Contingent Beneficiary(ies). Any change
must be made by Written Request. The change will take effect as of the date
the Written Request is signed. The Company will not be liable for any payment
made or action taken before it records the change.
ANNUITY PROVISIONS
GENERAL
On the Annuity Date, the Adjusted Contract Value will be applied under the
Annuity Option selected by the Owner. Annuity Payments may be made on a fixed
or variable basis or both.
ANNUITY DATE
The Annuity Date is selected by the Owner on the Issue Date. The Annuity Date
must be the first day of a calendar month and must be at least one month after
the Issue Date. The Annuity Date may not be later than when the Annuitant
reaches Age 85 or 10 years after the Issue Date for issue ages after Age 75.
Prior to the Annuity Date, the Owner, subject to the above, may change the
Annuity Date by Written Request. Any change must be requested at least seven
(7) days prior to the new Annuity Date.
SELECTION OR CHANGE OF AN ANNUITY OPTION
An Annuity Option is selected by the Owner at the time the Contract is issued.
Prior to the Annuity Date, the Owner can change the Annuity Option selected
by Written Request. Any change must be requested at least seven (7) days
prior to the Annuity Date.
FREQUENCY AND AMOUNT OF ANNUITY PAYMENTS
Annuity Payments are paid in monthly installments. The Adjusted Contract
Value is applied to the Annuity Table for the Annuity Option selected. If the
Adjusted Contract Value to be applied under an Annuity Option is less than
$2,000, the Company reserves the right to make a lump sum payment in lieu of
Annuity Payments. If the Annuity Payment would be or become less than $200
where only a Fixed Annuity or a Variable Annuity is selected, or if
the Annuity Payment would be or become less than $100 on each basis when a
combination of a Fixed and Variable Annuity is selected , the Company
will reduce the frequency of payments to an interval which will result in
each payment being at least $200, or $100 on each basis if a combination of
Fixed and Variable Annuities is selected.
ANNUITY
If the Owner selects a Fixed Annuity, the Adjusted Contract Value is allocated
to the Fixed Account and the Annuity is paid as a Fixed Annuity. If the Owner
selects a Variable Annuity, the Adjusted Contract Value will be allocated to
the Sub-Account(s) of the Separate Account in accordance with the selection
made by the Owner, and the Annuity will be paid as a Variable Annuity. The
Owner can also select a combination of a Fixed and Variable Annuity and the
Adjusted Contract Value will be allocated accordingly. Unless the Owner
specifies otherwise, the payee of the Annuity Payments shall be the Owner.
The Adjusted Contract Value will be applied to the applicable Annuity Table
contained in the Contract based upon the Annuity Option selected by the Owner.
FIXED ANNUITY
The Owner may elect to have the Adjusted Contract Value applied to provide a
Fixed Annuity. The dollar amount of each Fixed Annuity Payment will be
determined in accordance with Annuity Tables contained in the Contract which
are based on the minimum guaranteed interest rate of 3% per year. The dollar
amount of each Fixed Annuity Payment will be reduced by the applicable portion
of the Contract Maintenance Charge. After the initial Fixed Annuity Payment,
the payments will not change regardless of investment, mortality or expense
experience.
VARIABLE ANNUITY
Variable Annuity Payments reflect the investment performance of the Separate
Account in accordance with the allocation of the Adjusted Contract Value to
the Sub-Accounts during the Annuity Period. Variable Annuity payments are not
guaranteed as to dollar amount.
ANNUITY OPTIONS
The following Annuity Options or any other Annuity Option acceptable to the
Company may be selected:
OPTION A. LIFE ANNUITY : Monthly Annuity Payments during the life of the
Annuitant.
OPTION B. LIFE ANNUITY WITH PERIOD CERTAIN OF 120 MONTHS : Monthly
Annuity Payments during the lifetime of the Annuitant and in any event for one
hundred twenty (120) months. If the Beneficiary does not desire payments to
continue for the remainder of the period certain, he or she may elect to have
the present value of the guaranteed annuity payments remaining commuted and
paid in a lump sum.
OPTION C. JOINT AND SURVIVOR ANNUITY : Monthly Annuity Payments payable
during the joint lifetime of the Annuitant and a Joint Annuitant and then
during the lifetime of the survivor at 66 2/3%.
OPTION D. PERIOD CERTAIN : Monthly payments will be made for a
specified period. The specified period must be at least ten (10) years and
cannot be more than thirty (30) years. If the Owner does not desire payments
to continue for the remainder of the selected period, he or she may elect to
have the present value of the remaining payments to be made from the Separate
Account commuted and paid in a lump sum or as an Annuity Option purchased at
the date of such election.
Annuity Options A, B, C and D are available on a Fixed Annuity basis, a
Variable Annuity basis or a combination of both. Election of a Fixed Annuity
or a Variable Annuity must be made no later than fifteen (15) days prior to
the Annuity Date. If no election is made as between a Fixed Annuity and a
Variable Annuity, the Variable Annuity will be the default option.
DISTRIBUTOR
London Pacific Financial and Insurance Services is the distributor of the
Contracts. London Pacific Financial and Insurance Services is registered as a
broker-dealer with the Securities and Exchange Commission and is a member of
the National Association of Securities Dealers, Inc. London Pacific Financial
and Insurance Services is an affiliate of the Company.
Commissions will be paid to broker-dealers who sell the Contracts.
Broker-dealers will be paid an ongoing quarterly commission currently equal to
.25% of the Contract Value (pro-rated for the first Contract quarter based upon
the length of time the Contract has been in force) for promotional or
distribution expenses associated with the marketing of the Contracts.
PERFORMANCE INFORMATION
SALOMON MONEY MARKET SUB-ACCOUNT
From time to time, the Salomon Money Market Sub-Account of the Separate
Account may advertise its "current yield" and "effective yield." Both yield
figures are based on historical earnings and are not intended to indicate
future performance. The "current yield" of the Salomon Money Market Sub-
Account refers to the income generated by Contract Values in the Salomon Money
Market Sub-Account over a seven-day period ending on the date of calculation
(which period will be stated in the advertisement). This income is
"annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period
and is shown as a percentage of the Contract Value in the Salomon Money Market
Sub-Account. The "effective yield" is calculated similarly. However, when
annualized, the income earned by Contract Value is assumed to be reinvested.
This results in the "effective yield" being slightly higher than the "current
yield" because of the compounding effect of the assumed reinvestment. The
yield figure will reflect the deduction of all recurring charges and
deductions against the Sub-Account's income, including the deduction of the
Mortality and Expense Risk Charge, the Administrative Charge, the Distribution
Charge and a pro-rata portion of the Contract Maintenance Charge. The Company
does not impose a sales load upon redemptions in connection with the Contracts.
OTHER SUB-ACCOUNTS
From time to time, the Company may advertise performance data for the various
other Sub-Accounts under the Contract. Such data will show the percentage
change in the value of an Accumulation Unit based on the performance of a
Portfolio over a period of time, usually a calendar year, determined
by dividing the increase (decrease) in value for that Unit by the Accumulation
Unit value at the beginning of the period.
Any advertisement will also include total return figures calculated as
described in the Statement of Additional Information. The total return
figures will reflect the fees and expenses of the Portfolio and all recurring
charges and deductions against the Sub-Account's income, including the
deduction of the Mortality and Expense Risk Charge, the Administrative Charge,
the Distribution Charge and a pro-rata portion of the Contract Maintenance
Charge for the applicable periods shown. The Company may also advertise
performance information computed on a different basis which may not include
certain charges. If such charges were deducted, the performance would be
lower.
The Company may make available yield information with respect to
some of the Sub-Accounts. Such yield information will be calculated as
described in the Statement of Additional Information. The yield information
will reflect the deduction of all recurring charges and deductions
against the Sub-Account's income, including the deduction of the Mortality and
Expense Risk Charge, the Administrative Charge, the Distribution Charge and a
pro-rata portion of the Contract Maintenance Charge. The Company does not
impose a sales load upon redemptions in connection with the Contracts.
The Company may also show historical Accumulation Unit values in certain
advertisements containing illustrations. These illustrations will be based on
actual Accumulation Unit values.
Owners should note that the investment results of each Sub-Account will
fluctuate over time, and any presentation of a Sub-Account's current yield
or total return for any prior period should not be considered a representation
of what an investment may earn or what an Owner's yield or total return may be
in any future period.
In addition, the Company may distribute sales literature which compares the
percentage change in Accumulation Unit values for any of the Sub-Accounts
against established market indices such as the Standard & Poor's 500 Composite
Stock Price Index, the Dow Jones Industrial Average or other management
investment companies which have investment objectives similar to the
underlying Portfolio being compared. The Standard & Poor's 500 Composite
Stock Price Index is an unmanaged, unweighted average of 500 stocks, the
majority of which are listed on the New York Stock Exchange. The Dow Jones
Industrial Average is an unmanaged, weighted average of thirty blue chip
industrial corporations listed on the New York Stock Exchange. Both the
Standard & Poor's 500 Composite Stock Price Index and the Dow Jones Industrial
Average assume quarterly reinvestment of dividends.
In addition, the Company may, as appropriate, compare each Sub-Account's
performance to that of other types of investments such as certificates of
deposit, savings accounts and U.S. Treasuries, or to certain interest rate and
inflation indices, such as the Consumer Price Index, which is published by the
U.S. Department of Labor and measures the average change in prices over time
of a fixed "market basket" of certain specified goods and services. Similar
comparisons of Sub-Account performance may also be made with appropriate
indices measuring the performance of a defined group of securities widely
recognized by investors as representing a particular segment of the securities
markets. For example, Sub-Account performance may be compared with Donoghue
Money Market Institutional Averages (money market rates), Lehman Brothers
Corporate Bond Index (corporate bond interest rates) or Lehman Brothers
Government Bond Index (long-term U.S. Government obligation interest rates).
The Company may also distribute sales literature which compares the
performance of the Accumulation Unit values of the Contracts issued through
the Separate Account with the unit values of variable annuities issued through
the separate accounts of other insurance companies. Such information will be
derived from the Lipper Variable Insurance Products Performance Analysis
Service, the VARDS Report or from Morningstar.
The Lipper Variable Insurance Products Performance Analysis Service is
published by Lipper Analytical Services, Inc., a publisher of statistical data
which currently tracks the performance of almost 4,000 investment companies.
The rankings compiled by Lipper may or may not reflect the deduction of
asset-based insurance charges. The Company's sales literature utilizing these
rankings will indicate whether or not such charges have been deducted. Where
the charges have not been deducted, the sales literature will indicate that if
the charges had been deducted, the ranking might have been lower.
The VARDS Report is a monthly variable annuity industry analysis compiled by
Variable Annuity Research & Data Service of Georgia and published by Financial
Planning Resources, Inc. The VARDS rankings may or may not reflect the
deduction of asset-based insurance charges. Where the charges have not been
deducted, the sales literature will indicate that if the charges had been
deducted, the rankings might have been lower.
Morningstar rates a variable annuity Sub-Account against its peers with
similar investment objectives. Morningstar does not rate any Sub-Account that
has less than three years of performance data. The Morningstar rankings may
or may not reflect the deduction of charges. Where charges have not been
deducted, the sales literature will indicate that if the charges had been
deducted, the rankings might have been lower.
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. THE COMPANY DOES NOT GUARANTEE THE TAX STATUS OF
THE CONTRACTS. PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT
BE TREATED AS "ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS. IT SHOULD BE
FURTHER UNDERSTOOD THAT THE FOLLOWING DISCUSSION IS NOT EXHAUSTIVE AND THAT
SPECIAL RULES NOT DESCRIBED IN THIS PROSPECTUS MAY BE APPLICABLE IN CERTAIN
SITUATIONS. MOREOVER, NO ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE
STATE OR OTHER TAX LAWS.
Section 72 of the Code governs taxation of annuities in general. An owner is
not taxed on increases in the value of a Contract until distribution occurs,
either in the form of a lump sum payment or as annuity payments under the
Annuity Option selected. For a lump sum payment received as a total
withdrawal (total surrender), the recipient is taxed on the portion of the
payment that exceeds the cost basis of the Contract. For Non-Qualified
Contracts, this cost 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 feature) 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 excludible amounts
equal the investment in the Contract) are fully taxable. The taxable
portion is taxed at ordinary income tax rates. For certain types of
Qualified Plans there may be no cost basis in the Contract within the
meaning of Section 72 of the Code. 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 imposition of federal
income tax to the Owner with respect to earnings allocable to the Contract
prior to the receipt of payments under the Contract. The Code contains a safe
harbor provision which provides that annuity contracts such as the Contracts
meet the diversification requirements if, as of the end of each quarter, the
underlying assets meet the diversification standards for a regulated
investment company and no more than fifty-five percent (55%) of the total
assets consist of cash, cash items, U.S. Government securities and securities
of other regulated investment companies.
On March 2, 1989, the Treasury Department issued Regulations (Treas. Reg.
1.817-5), which established diversification requirements for the investment
portfolios underlying variable contracts such as the Contracts. The
Regulations amplify the diversification requirements for variable contracts
set forth in the Code and provide an alternative to the safe harbor provision
described above. Under the Regulations, an investment portfolio will be
deemed adequately diversified if: (1) no more than 55% of the value of the
total assets of the portfolio is represented by any one investment; (2) no
more than 70% of the value of the total assets of the portfolio is represented
by any two investments; (3) no more than 80% of the value of the total assets
of the portfolio is represented by any three investments; and (4) no more than
90% of the value of the total assets of the portfolio is represented by any
four investments.
The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable
contracts by Section 817(h) of the Code have been met, "each United States
government agency or instrumentality shall be treated as a separate issuer."
The Company intends that all Portfolios of the Trust will be managed by the
Adviser and Sub-Advisers for the Trust in such a manner as to comply with
these diversification requirements.
The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which Owner control of
the investments of the Separate Account will cause the 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 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 Owner's ability to transfer among
investment choices or the number and type of investment choices available,
would cause the Owner to be considered as the owner of the assets of the
Separate Account resulting in the imposition of federal income tax to the
Owner with respect to earnings allocable to the Contract prior to receipt of
payments under the Contract.
In the event any forthcoming guidance or ruling is considered to set forth a
new position, such guidance or ruling will generally be applied only
prospectively. However, if such ruling or guidance was not considered to set
forth a new position, it may be applied retroactively resulting in the 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. Owners should consult a tax adviser prior to
purchasing more than one non-qualified annuity contract in any calendar year.
CONTRACTS OWNED BY OTHER THAN NATURAL PERSONS
Under Section 72(u) of the Code, the investment earnings on contributions for
Contracts will be taxed currently to the Owner if the Owner is a non-natural
person, e.g., a corporation or certain other entities. Such Contracts
generally will not be treated as annuities for federal income tax purposes.
However, this treatment is not applied to a Contract held by a trust or other
entity as an agent for a natural person nor Contracts held by Qualified Plans.
Purchasers should consult their own tax counsel or other tax adviser before
purchasing a Contract to be owned by a non-natural person.
TAX TREATMENT OF ASSIGNMENTS
An assignment or pledge of a Contract may be a taxable event. Owners should
therefore consult competent tax advisers should they wish to assign or pledge
their Contracts.
INCOME TAX WITHHOLDING
All distributions or the portion thereof which is includible in the gross
income of the Owner are subject to federal income tax withholding. Generally,
amounts are withheld from periodic payments at the same rate as wages and at
the rate of 10% from non-periodic payments. However, the Owner, in most
cases, may elect not to have taxes withheld or to have withholding done at a
different rate.
Effective January 1, 1993, certain distributions from retirement plans
qualified under Section 401 or Section 403(b) of the Code, which are not
directly rolled over to another eligible retirement plan or individual
retirement account or individual retirement annuity, are subject to a
mandatory 20% withholding for federal income tax. The 20% withholding
requirement generally does not apply to: a) a series of substantially equal
payments made at least annually for the life or life expectancy of the
participant or joint and last survivor expectancy of the participant and a
designated beneficiary, or distributions for a specified period of
10 years or more; b) distributions which are required minimum distributions;
or c) the portion of the distributions not includible in gross income (i.e.
returns of after-tax contributions). Participants under such plans should
consult their own tax counsel or other tax adviser regarding withholding
requirements.
TAX TREATMENT OF WITHDRAWALS - NON-QUALIFIED CONTRACTS
Section 72 of the Code governs the treatment of distributions from annuity
contracts. It provides that if the contract value exceeds the aggregate
contributions made, any amount withdrawn will be treated as coming first from
the earnings and then, only after the income portion is exhausted, as coming
from the principal. Withdrawn earnings are includible in gross income. It
further provides that a ten percent (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 Owner; (c) if the taxpayer is totally disabled (for this purpose
disability is as defined in Section 72(m)(7) of the Code); (d) in a series of
substantially equal periodic payments made not less frequently than annually
for the life (or life expectancy) of the taxpayer or for the joint lives (or
joint life expectancies) of the taxpayer and his or her Beneficiary; (e) under
an immediate annuity; or (f) which are allocable to purchase payments made
prior to August 14, 1982.
The above information does not apply to Qualified Contracts. However,
separate tax withdrawal penalties and restrictions may apply to such Qualified
Contracts. (See "Tax Treatment of Withdrawals - Qualified Contracts," below.)
QUALIFIED PLANS
The Contracts offered by this Prospectus may also be used as Qualified
Contracts. The following discussion of Qualified Contracts is not
exhaustive and is for general informational purposes only. The tax rules
regarding Qualified Contracts are very complex and will have differing
applications depending on individual facts and circumstances. Each purchaser
should obtain competent tax advice prior to purchasing Qualified Contracts.
Qualified Contracts include special provisions restricting Contract provisions
that may otherwise be available as described in this Prospectus. Generally,
Qualified Contracts are not transferable except upon surrender or
annuitization.
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. Qualified Contracts 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.
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"
below.) 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.
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.
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 Section 408(b) (Individual
Retirement Annuities). To the extent amounts are not includible in gross
income because they have been rolled over to an IRA or to another eligible
qualified plan, no tax penalty will be imposed. The tax penalty will not
apply to the following distributions: (a) if distribution is made on or after
the date on which the Owner or Annuitant (as applicable) reaches age 59 1/2;
(b) distributions following the death or disability of the 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 Owner or Annuitant (as
applicable) or the joint lives (or joint life expectancies) of such Owner or
Annuitant (as applicable) and his or her designated Beneficiary; (d)
distributions to an Owner or Annuitant (as applicable) who has separated from
service after he has attained age 55; (e) distributions made to the 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 Owner or
Annuitant (as applicable) for amounts paid during the taxable year for medical
care; and (f) distributions made to an alternate payee pursuant to a qualified
domestic relations order. The exceptions stated in (d), (e) and (f) above do
not apply in the case of an Individual Retirement Annuity. The exception
stated in (c) above applies to an Individual Retirement Annuity without the
requirement that there be a separation from service.
Generally, distributions from a qualified plan must commence no later than
April 1 of the calendar year, following the year in which the employee attains
age 70 1/2. Required distributions must be over a period not exceeding the
life expectancy of the individual or the joint lives or life expectancies of
the individual and his or her designated beneficiary. If the required minimum
distributions are not made, a 50% penalty tax is imposed as to the amount not
distributed. In addition, distributions in excess of $150,000 per year may be
subject to an additional 15% excise tax unless an exemption applies.
FINANCIAL STATEMENTS
Financial statements of the Company have been included in the
Statement of Additional Information.
LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Separate Account,
the Distributor or the Company is a party.
TABLE OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
ITEM PAGE
Company..............................................................
Experts..............................................................
Legal Opinions.......................................................
Distributor..........................................................
Yield Calculation for the Salomon Money Market Sub-Account...........
Performance Information..............................................
Annuity Provisions...................................................
Financial Statements.................................................
APPENDIX
The purpose of the Examples below is to demonstrate how the death benefit is
calculated.
DEATH BENEFIT
EXAMPLE A - OWNER AGE 65 AT DEATH: DIES DURING CONTRACT YEAR TWO
Example A assumes the following:
(1) A Contribution of $10,000 was made for the Contract.
(2) Owner dies at Age 65 during the second Contract Year.
(3) The Contract Value at death was $12,000.
(4) No withdrawals have been made.
The following applies to this Example:
(a) Adjusted Contributions equal $10,000, since there were no
withdrawals.
(b) No seventh year stepped-up death benefit is available because death
occurred prior to the seven year Contract Anniversary.
(c) Contract Value is $12,000 and therefore greater than Adjusted
Contributions.
(d) The death benefit is $12,000.
EXAMPLE B - OWNER AGE 65 AT DEATH; DIES DURING CONTRACT YEAR TWO
This Example is based on the same assumptions as Example A except that in this
Example the Contract Value at death is $9,500.
The following applies to this Example:
(a) The Adjusted Contributions are greater than the Contract Value.
(b) The death benefit is $10,000.
EXAMPLE C - OWNER AGE 65 AT DEATH; DIES DURING CONTRACT YEAR 10
Example C assumes the following:
(1) A single Contribution of $10,000 was made to the Contract.
(2) Owner dies at Age 65 during the tenth Contract Year.
(3) The Contract Value on the seventh Contract Anniversary was $18,000.
(4) The Contract Value at death was $17,000.
(5) A gross withdrawal of $1,500 was made in the sixth Contract Year at
which time the Contract Value was $15,000 before the withdrawal was made.
The following applies to this Example:
(a) Adjusted Contributions are equal to $9,000. (At the time of the
withdrawal the Contract Value was reduced by 10% ($1,500/$15,000 = .10)
therefore, Adjusted Contributions are reduced by 10% ($10,000 - ($10,000 x
.10) = $9,000).
(b) Contract Value on the seventh Contract Anniversary ($18,000) was
greater than that on the death of Owner ($17,000) and greater than Adjusted
Contributions ($9,000).
(c) The death benefit is $18,000.
EXAMPLE D - OWNER AGE 87 AT DEATH; DIES DURING CONTRACT YEAR TWO
This Example is based on the same assumptions as Example A except in this
Example the Owner is Age 87 at death.
The following applies to this Example:
(a) Since the Owner was beyond Age 85, the death benefit will be limited
to the Contract Value.
(b) The death benefit is $12,000.
<TABLE>
<CAPTION>
<S> <C>
________________________________________________________________________
__________________ _______
__________________ STAMP
__________________ _______
FRONT
- -----
London Pacific Life & Annuity Company
Annuity Service Center
P.O. BOX 29056
Raleigh, North Carolina 27626
________________________________________________________________________
________________________________________________________________________
Please send me, at no charge, the Statement of Additional Information
dated ___________, 1996 for the Individual Fixed and Variable Deferred
Annuity Contracts issued by London Pacific Life & Annuity Company
and LPLA Separate Account One.
(Please print or type and fill in all information)
BACK ________________________________________________________________________
- -----
Name
________________________________________________________________________
Address
________________________________________________________________________
City State Zip Code
Form #5344-A
________________________________________________________________________
</TABLE>
[Back Cover of Prospectus]
Distributed by:
London Pacific Financial & Insurance Services
1755 Creekside Oaks Drive
Sacramento, CA 95833
Issued by:
LONDON PACIFIC
LIFE & ANNUITY
COMPANY
Home Office:
3109 Poplarwood Court
Raleigh, North Carolina 27604
(919) 790-2243
Annuity Service Center:
P.O. Box 29564
Raleigh, North Carolina 27626
(800) 852-3152
PART B
STATEMENT OF ADDITIONAL INFORMATION
INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACTS
WITH FLEXIBLE CONTRIBUTIONS
issued by
LPLA SEPARATE ACCOUNT ONE
AND
LONDON PACIFIC LIFE & ANNUITY COMPANY
THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS DATED ___________, 1996, FOR THE
INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACTS WITH FLEXIBLE
CONTRIBUTIONS WHICH ARE REFERRED TO HEREIN.
THE PROSPECTUS CONCISELY SETS FORTH INFORMATION FOR A PROSPECTIVE INVESTOR.
FOR A COPY OF THE PROSPECTUS CALL OR WRITE THE COMPANY AT: P.O. BOX 29564,
RALEIGH, NORTH CAROLINA 27626; (800) 852-3152.
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED ___________, 1996.
TABLE OF CONTENTS
PAGE
Company................................................................. 3
Experts................................................................. 3
Legal Opinions.......................................................... 3
Distributor............................................................. 3
Yield Calculation For Salomon Money Market Sub-Account.................. 3
Performance Information................................................. 4
Annuity Provisions...................................................... 6
Financial Statements.................................................... 6
COMPANY
Information regarding London Pacific Life & Annuity Company (the "Company")
and its ownership is contained in the Prospectus.
The Company contributed the initial capital to the Separate Account. As of
April 1, 1996, the initial capital contributed by the Company represented
approximately 99.2% of the total assets of the Separate Account. The Company
currently intends to remove these assets from the Separate Account on a pro-
rata basis in proportion to money invested in the Separate Account by Owners.
EXPERTS
The financial statements of the Company as of December 31, 1995 and 1994 and
for each of the three years in the period ended December 31, 1995, included in
this Statement of Additional Information have been so included in reliance on
the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
LEGAL OPINIONS
Legal matters in connection with the Contracts described herein are being
passed upon by the law firm of Blazzard, Grodd & Hasenauer, P.C., Westport,
Connecticut.
DISTRIBUTOR
London Pacific Financial and Insurance Services acts as the distributor.
London Pacific Financial and Insurance Services is an affiliate of the
Company. The offering is on a continuous basis.
YIELD CALCULATION FOR THE SALOMON MONEY MARKET SUB-ACCOUNT
The Salomon Money Market Sub-Account of the Separate Account will calculate
its current yield based upon the seven days ended on the date of calculation.
The Company does not currently advertise any yield information for the
Salomon Money Market Sub-Account.
The current yield of the Salomon Money Market Sub-Account is computed daily by
determining the net change (exclusive of capital changes) in the value of a
hypothetical pre-existing Owner account having a balance of one Accumulation
Unit of the Sub-Account at the beginning of the period, subtracting the
Mortality and Expense Risk Charge, the Administrative Charge, the Distribution
Charge and the Contract Maintenance Charge, dividing the difference by the
value of the Owner account at the beginning of the same period to obtain the
base period return and multiplying the result by (365/7).
The Salomon Money Market Sub-Account computes its effective compound yield by
determining the net changes (exclusive of capital change) in the value of a
hypothetical pre-existing Owner account having a balance of one Accumulation
Unit of the Sub-Account at the beginning of the period, subtracting the
Mortality and Expense Risk Charge, the Administrative Charge, the Distribution
Charge and the Contract Maintenance Charge and dividing the difference by the
value of the Owner account at the beginning of the base period to obtain the
base period return, and then compounding the base period return by adding 1,
raising the sum to a power equal to 365 divided by 7, and subtracting 1 from
the result, according to the following formula: Effective Yield = ((Base
Period Return +1) 365/7)-1. The current and the effective yields reflect the
reinvestment of net income earned daily on the Salomon Money Market
Sub-Account's assets.
Net investment income for yield quotation purposes will not include either
realized capital gains and losses or unrealized appreciation and depreciation,
whether reinvested or not.
The yields quoted should not be considered a representation of the yield of
the Salomon Money Market Sub-Account in the future since the yield is not
fixed. Actual yields will depend not only on the type, quality and maturities
of the investments held by the Salomon Money Market Sub-Account and changes
in the interest rates on such investments, but also on changes in the Salomon
Money Market Sub-Account's expenses during the period.
Yield information may be useful in reviewing the performance of the Salomon
Money Market Sub-Account and for providing a basis for comparison with other
investment alternatives. However, the Salomon Money Market Sub-Account's yield
fluctuates, unlike bank deposits or other investments which typically pay a
fixed yield for a stated period of time.
PERFORMANCE INFORMATION
From time to time, the Company may advertise performance data as described in
the Prospectus. Any such advertisement will include total return figures for
the time periods indicated in the advertisement. Such total return figures
will reflect the deduction of a 1.25% Mortality and Expense Risk Charge, a
.15% Administrative Charge, a .10% Distribution Charge, the investment
advisory fee and expenses for the underlying Portfolio being advertised
and any applicable Contract Maintenance Charge.
The hypothetical value of a Contract purchased for the time periods described
in the advertisement will be determined by using the actual Accumulation Unit
values for an initial $1,000 purchase payment, and deducting any applicable
Contract Maintenance Charge to arrive at the ending hypothetical value. The
average annual total return is then determined by computing the fixed interest
rate that a $1,000 purchase payment would have to earn annually, compounded
annually, to grow to the hypothetical value at the end of the time periods
described. The formula used in these calculations is:
n
P (1+T) = ERV
<TABLE>
<CAPTION>
<S> <C> <C>
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the time periods used (or
fractional portion thereof) of a hypothetical $1,000 payment
made at the beginning of the time periods used.
</TABLE>
In addition to total return data, the Company may include yield information in
its advertisements. For each Sub-Account (other than the Salomon Money Market
Sub-Account) for which the Company will advertise yield, it will show a yield
quotation based on a 30 day (or one month) period ended on the date of the
most recent balance sheet of the Separate Account included in the registration
statement, computed by dividing the net investment income per Accumulation
Unit earned during the period by the maximum offering price per Unit on the
last day of the period, according to the following formula:
6
Yield = 2 [( a-b + 1) - 1]
----
cd
<TABLE>
<CAPTION>
<S> <C> <C>
Where:
a = Net investment income earned during the period by the Portfolio
attributable to shares owned by the Sub-Account.
b = Expenses accrued for the period (net of reimbursements).
c = The average daily number of Accumulation Units outstanding
during the period.
d = The maximum offering price per Accumulation Unit on the
last day of the period.
</TABLE>
The Company may also advertise performance data which may be computed on a
different basis which may not include certain charges. If such charges were
deducted, the performance would be lower.
Owners should note that the investment results of each Sub-Account will
fluctuate over time, and any presentation of the Sub-Account's total return or
yield for any period should not be considered as a representation of what an
investment may earn or what an Owner's total return or yield may be in any
future period.
ANNUITY PROVISIONS
Variable Annuity Payments reflect the investment performance of the Separate
Account in accordance with the allocation of the Adjusted Contract Value to
the Sub-Accounts during the Annuity Period. 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 Variable Annuity Payments for each applicable
Sub-Account after the first Variable Annuity Payment is determined as follows:
1. The dollar amount of the first Variable Annuity Payment is divided by
the value of an Annuity Unit for each applicable Sub-Account as of the Annuity
Date. This sets the number of Annuity Units for each monthly payment for the
applicable Sub-Account. The number of Annuity Units remains fixed during the
Annuity Period.
2. The fixed number of Annuity Units per payment in each Sub-Account is
multiplied by the Annuity Unit Value for that Sub-Account for the last
Valuation Period of the month preceding the month for which the payment is
due. This result is the dollar amount of the payment for each applicable
Sub-Account.
The total dollar amount of each Variable Annuity Payment is the sum of all
Sub-Account Variable Annuity Payments reduced by the applicable portion of the
Contract Maintenance Charge.
ANNUITY UNIT
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. The Net Investment Factor is equal to
the Accumulation Unit Value for the current Valuation Period divided by the
Accumulation Unit Value for the immediately preceding Valuation Period.
2. The result in (1) is then divided by the Assumed Investment Rate
Factor which equals 1.00 plus the Assumed Investment Rate for the number of
days since the preceding Valuation Date. The Assumed Investment Rate is equal
to an effective annual rate of 4%.
The value of an Annuity Unit may increase or decrease from Valuation Period to
Valuation Period.
(See "Annuity Provisions" in the Prospectus.)
FINANCIAL STATEMENTS
The financial statements of the Company included herein should be considered
only as bearing upon the ability of the Company to meet its obligations under
the Contracts. No financial statements or condensed financial information
for the Separate Account have been included herein because, as of December 31,
1995, the Separate Account had no assets.
LONDON PACIFIC LIFE
& ANNUITY COMPANY
(A wholly-owned subsidiary
of London Pacific Group
Limited)
STATUTORY BASIS FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
London Pacific Life & Annuity Company
(A wholly-owned subsidiary of London Pacific Group Limited)
Statutory Basis Financial Statements
Years ended December 31, 1995, 1994 and 1993
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Accountants............................................ 1
AUDITED FINANCIAL STATEMENTS
Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus.... 3
Statutory Statements of Operations........................................... 4
Statutory Statements of Changes in Capital and Surplus....................... 5
Statutory Statements of Cash Flows........................................... 6-7
Notes to Statutory Financial Statements...................................... 8-17
SUPPLEMENTARY INFORMATION
Report of Independent Accountants' on Supplemental Schedule of
Assets and Liabilities................................................ 19
Schedule 1 - Supplemental Schedule of Assets and Liabilities................. 20-22
</TABLE>
Report of Independent Accountants
February 8, 1996
To the Board of Directors and Shareholder of
London Pacific Life & Annuity Company
(A wholly-owned subsidiary of London Pacific Group Limited)
We have audited the accompanying Statutory Statements of Admitted Assets,
Liabilities, Capital and Surplus of London Pacific Life & Annuity Company (a
wholly-owned subsidiary of London Pacific Group Limited) as of December 31,
1995 and 1994, and the related Statutory Statements of Operations, of Changes
in Capital and Surplus, and of Cash Flows for each of the three years in the
period 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards; however, as discussed in the following paragraph, we were not
engaged to determine or audit the effects on these financial statements of the
variances between statutory accounting practices and generally accepted
accounting principles. Generally accepted auditing 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 in Note 1, the Company prepared these financial statements in
conformity with accounting practices prescribed or permitted by the Insurance
Department of the State of North Carolina. When financial statements prepared
in conformity with accounting practices prescribed by a regulatory agency are
presented for purposes other than for filing with the regulatory agency,
generally accepted auditing standards require that an auditor's report on them
state whether they are presented in conformity with generally accepted
accounting principles. The accounting practices used by the Company to
prepare these financial statements vary from generally accepted accounting
principles as described in Note 2. The Company has not
To the Board of Directors and Shareholder of
London Pacific Life & Annuity Company
Page 2
February 8, 1996
determined the effects on these financial statements of the
variances. Accordingly, we were not engaged to audit, and we did not audit,
the effects on these financial statements of the variances. As the
financial statements referred to above do not purport to be a
presentation in conformity with generally accepted accounting principles, we
are not in a position to express, and do not express, an opinion on the
financial statements referred to above as to fair presentation of financial
position, results of operations, or cash flows in conformity with generally
accepted accounting principles.
In our opinion, however, the financial statements audited by us present
fairly, in all material respects, the admitted assets, liabilities, capital
and surplus of London Pacific Life & Annuity Company at December 31, 1995 and
1994, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1995, on the basis of accounting
described in Note 1.
/s/ PRICE WATERHOUSE LLP
- ------------------------
<TABLE>
<CAPTION>
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES, CAPITAL AND SURPLUS
___________________________________________________________________________
DECEMBER 31,
<S> <C> <C>
1995 1994
--------------- ---------------
ASSETS
Investments:
Bonds $1,057,481,158 $ 981,232,212
Preferred stock 9,912,720 9,478,047
Common stock 1,430,013 575,195
Short-term investments 69,747,096 -
Policy loans 4,455,976 2,999,312
--------------- ---------------
Total investments 1,143,026,963 994,284,766
Cash 2,664,850 11,790,032
--------------- ---------------
Total cash and investments 1,145,691,813 1,006,074,798
Investment income due and accrued 17,492,346 14,678,500
Electronic data processing equipment, net 609,886 895,106
Federal income tax recoverable - 3,243,665
Amount due from broker-dealers 12,527,500 -
Receivable from affiliates 4,608,663 29,011
Other assets 1,741,100 42,502
--------------- ---------------
Total assets $1,182,671,308 $1,024,963,582
--------------- ---------------
LIABILITIES, CAPITAL AND SURPLUS
Aggregate reserves for life policies and contracts $1,066,977,854 $ 945,045,048
Policy and contract claims 417,570 515,433
Accrued dividends to policyholders 527,418 568,672
Interest maintenance reserve 10,376,170 9,887,040
Federal income taxes payable 2,007,817 -
Remittances and items not allocated 219,649 652,913
Asset valuation reserve 30,546,857 29,395,572
Payable to affiliates 3,325 9,843
Amounts due to broker-dealers 20,930,752 305,126
Accounts payable, accrued expenses and other liabilities 1,053,398 1,262,331
--------------- ---------------
Total liabilities 1,133,060,810 987,641,978
--------------- ---------------
Capital and surplus:
Capital stock - $10 par value, 1,000,000 shares
authorized; 200,000 shares issued and outstanding 2,000,000 2,000,000
Paid-in and contributed surplus 48,394,120 46,938,570
Unassigned deficit (783,622) (11,616,966)
--------------- ---------------
Total capital and surplus 49,610,498 37,321,604
Commitments and contingent liabilities
Total liabilities, capital and surplus $1,182,671,308 $1,024,963,582
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
STATUTORY STATEMENTS OF OPERATIONS
___________________________________________________________________________
YEAR ENDED DECEMBER 31,
<S> <C> <C> <C>
1995 1994 1993
------------- ------------- ------------
REVENUES
Insurance premiums and annuity
considerations $203,233,606 $210,373,366 $223,273,108
Net investment income 88,960,512 79,812,665 71,063,605
Amortization of interest maintenance reserve (185,844) 945,197 1,584,804
Other income 1,255 0 108,980
------------- ------------ ------------
Total revenues 292,009,529 291,131,228 296,030,497
------------ ------------- ------------
BENEFITS AND EXPENSES
Policyholder benefits and changes in reserve 256,854,252 256,731,020 258,850,698
Commissions 14,237,877 22,125,145 16,352,492
Other operating expenses 10,358,955 10,020,230 10,587,846
------------- ------------- ------------
Total benefits and expenses 281,451,084 288,876,395 285,791,036
------------- ------------- ------------
Gain from operations before dividends to
policyholders, federal income taxes and
net realized capital gains (losses) 10,558,445 2,254,833 10,239,461
Dividends to policyholders 1,007,373 540,513 874,768
------------- ------------- ------------
Gains from operations, before federal income taxes
and net realized capital gains (losses) 9,551,072 1,714,320 9,364,693
Federal income tax expense (benefit) (excluding
tax on capital gains) 2,597,127 (961,168) 4,773,674
----------- ------------- ------------
Gain from operations before net realized capital
gains (losses) 6,953,945 2,675,488 4,591,019
Net realized capital gains (losses), less capital gains
tax of $1,931,162, ($2,174,832) and $8,281,326
and excluding $303,286, $2,316,416 and
3,514,550 transferred to the IMR in 1995, 1994
and 1993, respectively. 3,445,440 (6,538,149) 12,560,966
------------- ------------- ------------
Net income (loss) $ 10,399,385 ($3,862,661) $ 17,151,985
------------- ------------- ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
___________________________________________________________________________________________
<S> <C> <C> <C> <C>
PAID-IN AND
CAPITAL CONTRIBUTED UNASSIGNED
STOCK SURPLUS SURPLUS TOTAL
---------- ------------ ------------ -------------
Balance as of
December 31, 1992 2,000,000 33,350,173 (3,656,176) 31,693,997
Net income 17,151,985 17,151,985
Increase in unrealized capital losses (62,299) (62,299)
Increase in non-admitted assets (316,924) (316,924)
Increase in asset valuation reserve (2,772,404) (2,772,404)
--------- ---------- ------------ -------------
Balance as of
December 31, 1993 2,000,000 33,350,173 10,344,182 45,694,355
Net loss (3,862,661) (3,862,661)
Increase in unrealized capital gains 1,726,451 1,726,451
Increase in non-admitted assets (695,915) (695,915)
Increase in asset valuation reserve (19,129,023) (19,129,023)
Capital contributions 13,588,397 13,588,397
--------- ------------ ----------- -------------
Balance as of
December 31, 1994 2,000,000 46,938,570 (11,616,966) 37,321,604
Net income 10,399,385 10,399,385
Increase in unrealized capital gains 9,403 9,403
Decrease in non-admitted assets 1,575,841 1,575,841
Increase in asset valuation reserve (1,151,285) (1,151,285)
Capital contributions 1,455,550 1,455,550
---------- ------------ ---------- -------------
Balance as of
December 31, 1995 $2,000,000 $ 48,394,120 ($783,622) $ 49,610,498
---------- ------------ ------------ -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
STATUTORY STATEMENTS OF CASH FLOWS
_______________________________________________________________________________________
YEAR ENDED DECEMBER 31,
<S> <C> <C> <C>
1995 1994 1993
------------- ------------ -------------
CASH PROVIDED BY:
Premiums and annuity considerations
collected $203,233,606 $210,357,865 $223,279,108
Investment income received (excluding
realized gains/losses and net of investment
expenses) 86,134,922 78,892,896 72,466,842
Other income received 1,255 226,807 1,222,737
------------- ------------ -------------
Total cash provided by operations 289,369,783 289,477,568 296,968,687
----------- ------------ -------------
CASH USED FOR:
Life and accident and health claims paid 1,213,526 210,886 700,123
Surrender benefits and other fund
withdrawals paid 81,936,665 66,245,808 54,241,658
Other benefits to policyholders paid 51,869,119 42,541,134 31,564,604
------------- ------------ -------------
135,019,310 108,997,828 86,506,385
------------- ------------ -------------
Commissions and other expenses paid 24,818,407 28,228,679 26,962,242
------------- ------------ -------------
Dividends to policyholders paid 1,048,627 858,087 623,864
Federal income taxes (recoverable) paid
(excluding tax on capital gains) (2,654,355) 7,673,225 (420,256)
Net increase in policy loans 1,456,664 961,502 1,188,638
Other operating expenses paid 95,312 6,220,353 7,920,914
------------- ------------ -------------
(53,752) 15,713,167 9,313,160
------------- ------------ -------------
Total cash used for operations 159,783,965 152,939,674 122,781,787
------------- ------------ -------------
Net cash provided by operations 129,585,818 136,537,894 174,186,900
------------- ------------ -------------
PROCEEDS FROM INVESTMENTS SOLD, MATURED OR
REPAID:
Bonds 193,271,490 346,800,750 574,302,937
Stocks 11,228,210 120,257,956 139,321,860
Net gain on short-term investments - 17,915 29,041
Other proceeds 96,780 - 296,120
------------- ------------ -------------
204,596,480 467,076,621 713,949,958
Tax on capital gains (1,931,162) 2,174,832 (8,281,326)
------------- ------------ -------------
Total investment proceeds 202,665,318 469,251,453 705,668,632
</TABLE>
(continued on next page)
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
STATUTORY STATEMENT OF CASH FLOWS (CONTINUED)
________________________________________________________________________________________
YEAR ENDED DECEMBER 31,
<S> <C> <C> <C>
1995 1994 1993
------------ -------------- ------------
OTHER CASH PROVIDED:
Capital and surplus paid in 1,455,550 13,588,397 -
Other sources 20,941,157 10,238,471 120,868
------------ -------------- ------------
Total other cash provided 22,396,707 23,826,868 120,868
------------ -------------- ------------
Total cash provided 354,647,843 629,616,215 879,976,400
------------ -------------- ------------
COST OF INVESTMENTS ACQUIRED:
Bonds 268,824,294 602,767,827 659,746,236
Stocks 6,872,362 125,375,796 126,378,133
Miscellaneous other 575,445 1,562,819 98,962
------------ -------------- ------------
Total investments acquired 276,272,101 729,706,422 786,223,331
Other cash applied 17,753,828 190,351 7,945,316
------------ -------------- ------------
Total cash applied 294,025,929 729,896,793 794,168,647
------------ -------------- ------------
Net change in cash and short-term investments 60,621,914 (100,280,578) 85,807,753
CASH AND SHORT-TERM INVESTMENTS:
Beginning of year 11,790,032 112,070,610 26,262,857
------------ -------------- ------------
End of year $ 72,411,946 $ 11,790,032 $112,070,610
------------ -------------- ------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Income taxes $ 2,524,651 $ 5,516,862 $ 7,837,097
</TABLE>
The accompanying notes are an integral part of these financial statements.
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
NOTES TO STATUTORY FINANCIAL STATEMENTS
________________________________________________________________________
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
London Pacific Life & Annuity Company (the Company) is domiciled in North
Carolina and is a wholly-owned subsidiary of The London Pacific Assurance
Group Limited (the Parent), a holding company domiciled in the state of
California, which is ultimately a wholly-owned subsidiary of London Pacific
Group Limited (formerly Govett & Company Limited). The Company has two
wholly-owned subsidiaries, LPIMC Insurance Marketing Services (the Marketing
Company) and London Pacific Financial & Insurance Services (the Broker
Dealer), an inactive broker-dealer. The Company is engaged primarily in the
development and marketing of annuity products and universal life insurance.
Although the Company is licensed and sells its universal life and annuity
products in 40 states, its primary markets are California, Florida, Michigan,
Ohio, Texas and Washington.
The preparation of financial statements of insurance companies requires
management to make estimates and assumptions that affect amounts reported in
the financial statements and accompanying notes. Such estimates and
assumptions could change in the future as more information becomes known,
which could impact amounts reported and disclosed herein.
BASIS OF PRESENTATION
The accompanying financial statements have been prepared in conformity
with accounting practices prescribed or permitted by the North Carolina
Department of Insurance which is a comprehensive basis of accounting other
than generally accepted accounting principles. Significant differences
between statutory accounting principles and generally accepted accounting
principles (GAAP) are described in Note 2.
INVESTMENTS
Investments are recorded in accordance with the requirements of the
National Association of Insurance Commissioners (NAIC). Bonds not backed by
loans are reported at cost or amortized cost; the discount or premium on
bonds is amortized using the interest method. For loan-backed bonds,
anticipated prepayments are considered when determining the amortization of
discount or premium. Prepayment assumptions are obtained from dealer surveys
and are based on the current interest rate and economic development. The
retrospective adjustment method is used to value all such securities except
for interest-only securities, which are valued using the prospective method.
Preferred stocks are carried at NAIC Securities Valuation Office (SVO)
values. Common stocks are reported at market value as determined by the SVO
and the related unrealized capital gain/(loss) is reported in unassigned
surplus without any adjustment for federal income taxes. The Company's
subsidiaries are reported at equity in the underlying statutory basis of
their net assets. As of December 31, 1995, the carrying value of the
Company's investment in subsidiaries was $499,138. Short-term investments
are carried at cost which approximates market value.
INTEREST RATE SWAP CONTRACTS
The Company enters into interest rate swap programs for the purpose of
minimizing exposure to fluctuations in interest rates. The notional amount
of the single matched swap in place at December 31, 1995 and 1994 was
$9,000,000. The unexpired term at December 31,1995 was one year and five
months. During the term of the swap, the net swap settlement amount is
accrued over time as an adjustment to other expense or other income.
Gains or losses on termination are deferred and amortized as an interest
adjustment over the remaining life of the underlying financial instrument.
There are no outstanding matched swaps at a loss position at December 31,
1995 and 1994. The Company does not act as an intermediary or broker in
interest rate swaps.
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
NOTES TO STATUTORY FINANCIAL STATEMENTS
________________________________________________________________________
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ELECTRONIC DATA PROCESSING EQUIPMENT
Electronic data processing equipment is recorded at cost, net of
accumulated depreciation of $1,511,059 and $1,209,852 at December 31, 1995
and 1994. Depreciation is provided using the straight-line method over the
estimated useful life of five years. Depreciation expense amounted to
$346,495, $361,961 and $314,475 for the years ended December 31, 1995, 1994
and 1993.
REMITTANCES AND ITEMS NOT ALLOCATED
Remittances and items not allocated consist primarily of cash received
with policy applications for policies that have not been issued.
POLICY AND CONTRACT CLAIMS
Policy and contract claims of $244,046 and $250,747 related to death
benefits payable on life and annuity contracts have been accrued at December
31, 1995 and 1994. The remaining policy and contract claims of $173,524 and
$264,686 at December 31, 1995 and 1994 relate to estimated incurred but
unreported claims on life contracts.
RECLASSIFICATIONS
Certain reclassifications have been made to the prior years' financial
statements to conform to the current year presentation.
2. DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND
STATUTORY ACCOUNTING PRINCIPLES
Statutory accounting principles vary in some respects from generally
accepted accounting principles. The more significant of these differences
are as follows:
INVESTMENTS
Market values of certain investments in bonds and stocks are based on
values specified by the NAIC, rather than on values provided by outside
broker confirmations or internally calculated estimates. For GAAP,
investments in bonds would be designated at purchase as held-to-maturity,
trading, or available-for-sale. Held-to-maturity investments would be
reported at amortized cost, and the remaining investments would be reported
at fair value with unrealized holding gains and losses reported in
operations for those designated as trading and as a separate component of
shareholders' equity for those designated as a available-for-sale. Realized
gains and losses are reported in income net of income tax rather than
on a pretax basis. The Asset Valuation Reserve is determined by an
NAIC prescribed formula and is reported as a liability rather than as a
valuation allowance or an appropriation of surplus. Beginning in
1992, under a formula prescribed by the NAIC, the Company defers the
portion of realized gains and losses on sales of investments in debt
securities, attributable to changes in the general level of interest
rates and amortizes those deferrals over the remaining period to maturity
based on the individual security sold.
SUBSIDIARIES
The accounts and operations of the Company's subsidiaries are not
consolidated with the accounts and operations of the Company.
POLICY ACQUISITION COSTS
The costs of acquiring and renewing business are expensed when incurred
rather than capitalized and amortized over the terms of the related policies.
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
NOTES TO STATUTORY FINANCIAL STATEMENTS
___________________________________________________________________________
2. DIFFERENCE BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND
STATUTORY ACCOUNTING PRINCIPLES
(CONTINUED)
NON-ADMITTED ASSETS
Certain assets designated as "non-admitted," principally furniture and
equipment, are excluded from the accompanying Statutory Statements of
Admitted Assets, Liabilities, Capital and Surplus and are charged directly to
unassigned surplus.
PREMIUMS
Single premium whole life, annuity and flexible premium variable life
insurance considerations are recognized as earned upon issuance of the
contract, whereas under GAAP, premium income consists of mortality charges,
surrender charges earned, policy fees earned and amounts deducted from
policyholder accounts.
BENEFIT RESERVES
Certain policy reserves are calculated based on statutorily required
interest and mortality assumptions rather than estimated expected experience
or actual account balances.
INCOME TAXES
Deferred income taxes are generally not provided for differences
between the financial statement amounts and the tax bases of assets and
liabilities.
3. ANALYSIS OF ASSETS
An analysis of the Company's ledger assets as compared with its net
admitted assets is as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995
<S> <C> <C> <C> <C>
LEDGER NONLEDGER ASSETS NOT NET
ASSETS ASSETS ADMITTED ADMITTED ASSETS
-------------- ------------ ----------- ----------------
Bonds $1,057,607,158 $ 126,000 $ 1,057,481,158
Preferred stock 9,972,720 ($60,000) 9,912,720
Common stock 1,641,663 (114,209) 97,441 1,430,013
Policy loans 4,455,976 4,455,976
Cash 2,664,850 2,664,850
Short-term investments 69,747,096 69,747,096
Investment income due and accrued 17,492,346 17,492,346
Electronic data processing
equipment, net 609,886 609,886
Receivable from affiliates 4,608,663 4,608,663
Furniture and equipment 245,531 245,531
Deposits, prepaid expenses and
other assets 14,390,754 83,881 206,035 14,268,600
-------------- ------------ ----------- ----------------
$1,165,944,297 $17,402,018 $ 675,007 $ 1,182,671,308
-------------- ------------ ----------- ----------------
</TABLE>
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
NOTES TO STATUTORY FINANCIAL STATEMENTS
___________________________________________________________________________
3. ANALYSIS OF ASSETS (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
<S> <C> <C> <C> <C>
LEDGER NONLEDGER ASSETS NOT NET
ASSETS ASSETS ADMITTED ADMITTED ASSETS
-------------- ------------ ----------- ----------------
Bonds $ 981,232,212 $ 981,232,212
Preferred stock 9,562,255 ($84,208) 9,478,047
Common stock 720,540 (145,345) 575,195
Policy loans 2,999,312 2,999,312
Cash 11,790,032 11,790,032
Investment income due and accrued 14,678,500 14,678,500
Electronic data processing
equipment, net 895,106 895,106
Federal income tax recoverable 3,243,665 3,243,665
Furniture and equipment 267,216 $267,216
Deposits, prepaid expenses and
other assets 1,966,805 42,400 1,937,692 71,513
-------------- ------------ ----------- ----------------
$1,009,433,478 $17,735,012 $ 2,204,908 $ 1,024,963,582
-------------- ------------ ----------- ----------------
</TABLE>
4. RELATED PARTIES
The Company had material transactions with its parent and affiliated
companies as follows:
CAPITAL CONTRIBUTIONS
The Company received capital contributions from its parent during the
years ended December 31, 1995, 1994 and 1993 totaling $1,455,550, $13,588,397
and $0, respectively, principally in the form of investments and accrued
interest. During 1995, the Company made a $575,446 capital contribution to
the Marketing Company in the form of common stock.
EXPENSES
The Company receives investment advisory services under the terms of an
investment management agreement with Berkeley Institutional Investment, Inc.
(BIII), an affiliate of London Pacific Group Limited. Fees charged to the
Company under the agreement amounted to $5,272,984, $4,401,840 and $3,247,481
during the years ended December 31, 1995, 1994, and 1993, respectively.
Commissions on insurance business produced for the Company by its agents
are paid by the Marketing Company, the master general agent for the Company.
Effective January 1, 1995, the Company directly paid all agents' commissions
via the Marketing Company. For the years ended December 31, 1995, 1994,
and 1993, the Company paid commissions of $14,237,877, $22,125,145
and $16,352,492, respectively, to the Marketing Company (and the Marketing
Company paid commissions to agents of approximately $14,237,877, $14,719,474
and $15,988,508, respectively). The 1994 commission payments to the
Marketing Company include an amount paid to extinguish the Company's
contingent commission liability related to a marketing agreement that was
terminated on December 31, 1994.
The Company has payables to affiliates of $3,325 and $9,843 at December
31, 1995 and 1994, respectively, relating to these transactions.
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
NOTES TO STATUTORY FINANCIAL STATEMENTS
___________________________________________________________________________
4. RELATED PARTIES (CONTINUED)
On January 23, 1995, the Company acquired a $5,000,000 corporate bond
from BG Services Limited, an affiliate, issued by Two Count Company and on
December 31, 1995, sold a $2,992,058 corporate bond, plus accrued interest of
$243,000, issued by Orleander Group to BG Services Limited. The amount due
from BG Services Limited on the Orleander Group sale is included in the
receivable from affiliates balance.
5. FEDERAL INCOME TAXES
The provision for federal income taxes has been computed in accordance
with provisions of the Internal Revenue Code, as amended. The Company files
a separate federal income tax return and is not included in a consolidated
return with affiliated entities.
The Company's total tax expense differs from an amount computed by
applying the federal income tax of 35 percent to statutory income. The four
primary items required to reconcile taxable income and statutory income are:
(1) capitalization of policy acquisition costs, (2) differences in computing
reserves for statutory and tax purposes, (3) differences in statutory and tax
bases of assets sold, and (4) differences in timing for the deduction of
accrued expenses.
6. AGGREGATE RESERVES FOR LIFE POLICIES AND CONTRACTS
Aggregate reserves for life policies and contracts have generally been
computed using the Commissioners' Reserve Valuation Method (CRVM) or the
Commissioners' Annuity Reserve Valuation Method (CARVM) prescribed
by the North Carolina Department of Insurance. The aggregate reserves
for life policies and contracts were computed on a policy-by-policy basis.
Statutory reserves for policy benefits due under universal life and
accumulation annuity insurance contracts are computed using the CRVM and the
CARVM, respectively. The CRVM and CARVM reserves established for specific
contracts are the greater of a formula reserve or the cash surrender value of
the contract.
The formula reserves for the universal life policies are computed using
the 1980 Commissioners Standard Ordinary (CSO) mortality table and a 4.0%
discount rate. These assumptions are in compliance with the minimum
statutory requirements.
The accumulation annuity insurance contracts include a single premium
deferred annuity product and a flexible premium deferred annuity product.
The formula reserves for the single premium deferred annuity are higher than
the cash surrender value due to the one year interest rate guarantee
provision of these contracts. The Company computed reserves with an interest
rate of 6.00% for 1995 issues, 6.50%-5.50% for 1994 issues and 5.75%
for 1993 issues. These rates are the maximum statutory interest rates
for such contracts. For flexible premium deferred annuities, the cash
surrender value is never greater than the formula reserves, but may be
equal to the CARVM reserve due to the calendar quarter interest guarantee
provision of these contracts. The Company uses the same interest rates to
compute reserves as are used for single premium deferred annuities.
Reserves for policy benefits due under immediate annuity insurance
contracts are based on a present value actuarial computation using a
statutory discount rate and a statutory mortality basis. The reserves are
based on the 83a table and with a discount rate of 7.25% for 1995, 6.50% for
1994 and 7.00% for 1993.
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
NOTES TO STATUTORY FINANCIAL STATEMENTS
___________________________________________________________________________
6. AGGREGATE RESERVES FOR LIFE POLICIES AND CONTRACTS (CONTINUED)
The withdrawal characteristics of annuity actuarial reserves and deposit
liabilities at December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1995 1994
------ ------------
Subject to discretionary withdrawal at book
value less surrender charge of 5% or more $ 530,130,854 51.79% $700,347,943 77.23%
Subject to discretionary withdrawal at book
value less surrender charge greater than
0% but less than 5% 327,712,985 32.01% 52,995,888 5.84%
Subject to discretionary withdrawal at book
value with no surrender charge 6,736,768 0.66% 1,381,014 0.16%
Not subject to discretionary withdrawal 159,069,009 15.54% 152,055,826 16.77%
-------------- ------ ------------ ------
$1,023,649,616 100% $906,780,671 100%
============== ======= ============ ======
</TABLE>
7. INVESTMENTS
The Company records its investments in debt securities at cost or
amortized cost. The securities are designated investment grade (NAIC SVO
categories "1" and "2") or non-investment grade (categories "3", "4", "5",
and "6"). The NAIC 's highest ratings classification includes issues
normally rated investment grade by independent rating agencies.
The NAIC SVO classified the Company's debt securities as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
<S> <C> <C> <C> <C>
STATEMENT PERCENT STATEMENT PERCENT
NAIC CATEGORY VALUE OF TOTAL VALUE OF TOTAL
- ---------------------------------------------- -------------- --------- ------------ ---------
1 - Highest quality $ 465,956,793 44% $386,803,462 40%
2 - High quality 382,099,503 36 404,365,864 41
3 - Medium quality 90,540,167 9 89,890,621 9
4 - Low quality 85,136,505 8 79,444,805 8
5 - Lower quality 33,748,190 3 20,727,460 2
6 - Debt securities in or near default - - - -
-------------- --------- ------------ ---------
$1,057,481,158 100% $981,232,212 100%
-------------- --------- ------------ ---------
</TABLE>
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
NOTES TO STATUTORY FINANCIAL STATEMENTS
___________________________________________________________________________
7. INVESTMENTS (CONTINUED)
The cost or amortized cost and the fair, or comparable value of
investments in debt securities are as follows:
COST OR GROSS UNREALIZED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DECEMBER 31, 1995 AMORTIZED COST GAINS LOSSES FAIR VALUE
- ----------------------------- --------------- ----------- ---------- --------------
U.S. Government
obligations $ 7,293,486 $ 163,613 ($3,498) $ 7,453,601
Obligations of states
and political subdivisions 2,364,678 55,072 0 2,419,750
Corporate securities 678,240,972 17,874,218 (649,005) 695,466,185
Other debt securities 58,473,851 637,910 (24,207) 59,087,554
Mortgage-backed securities 311,108,171 0 0 311,108,171
--------------- ----------- ---------- --------------
$ 1,057,481,158 $18,730,813 ($676,710) $1,075,535,261
--------------- ----------- ---------- --------------
</TABLE>
<TABLE>
<CAPTION>
COST OR GROSS UNREALIZED
<S> <C> <C> <C> <C>
DECEMBER 31, 1994 AMORTIZED COST GAINS LOSSES FAIR VALUE
- ----------------------------------------------- --------------- -------- ------------- ------------
U.S. Government
obligations $ 7,397,191 $ 24,923 ($594,014) $ 6,828,100
Obligations of states
and political subdivisions 2,366,854 (245,204) 2,121,650
Corporate securities 617,557,758 725,229 (26,938,415) 591,344,572
Other debt securities 33,214,353 6,908 (1,325,379) 31,895,882
Mortgage-backed securities 320,696,056 320,696,056
--------------- ------- ------------ ------------
$ 981,232,212 $757,060 ($29,103,012) $952,886,260
--------------- -------- ------------- ------------
</TABLE>
Fair values are based on published quotations of the SVO of the NAIC.
Fair values generally represent quoted market value prices for securities
traded in the public marketplace, or analytically determined values using bid
or closing prices for securities not traded in the public marketplace.
However, for certain investments for which the NAIC does not provide a value,
the Company uses the amortized cost amount as a substitute for fair value in
accordance with prescribed guidance. As of December 31, 1995 and 1994, the
fair value of investments in debt securities includes $646,886,351 and
$645,396,359, respectively, of debt securities that were valued at amortized
cost.
The cost or amortized cost and the fair value of debt securities at
December 31, 1995, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because borrowers may have
the right to call or repay obligations with or without call or prepayment
penalties.
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
NOTES TO STATUTORY FINANCIAL STATEMENTS
___________________________________________________________________________
7. INVESTMENTS (CONTINUED)
A summary of the cost or amortized cost and fair value of the Company's
investment in debt securities at December 31, 1995, by contractual maturity,
is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
COST OR
AMORTIZED COST FAIR VALUE
--------------- --------------
Maturity:
In 1996 $ 8,105,072 $ 8,108,447
In 1997-2000 118,777,166 121,516,342
In 2001-2005 485,142,725 496,395,991
After 2005 134,348,024 138,406,310
Mortgage-backed securities 311,108,171 311,108,171
--------------- --------------
Total $ 1,057,481,158 $1,075,535,261
--------------- --------------
</TABLE>
Proceeds from sales of investments in fixed maturities and related gross
gains and losses on those sales are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Year Ended Year Ended Year Ended
December 31, 1995 December 31, 1994 December 31, 1993
------------------ ------------------ ------------------
Proceeds from sales $ 193,271,491 $ 236,920,286 $ 719,448,233
Gross realized gains $ 2,078,023 $ 4,413,014 $ 18,201,325
Gross realized losses $ 1,618,499 $ 1,704,392 $ 8,824,962
</TABLE>
At December 31, 1995, debt securities with an admitted asset value of
$9,673,866 were on deposit with state insurance departments to satisfy
regulatory requirements.
8. INVESTMENT INCOME
An analysis of the Company's net investment income is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
<S> <C> <C> <C>
1995 1994 1993
------------ ------------ ------------
Interest on debt securities $91,585,614 $76,595,702 $65,535,483
Interest on short-term investments 554,252 397,098 393,877
Interest on cash on hand and on deposit 274,696 344,915 278,993
Equity in undistributed earnings of subsidiaries (285,874) 5,484,000
Other investment income 2,493,535 2,460,670 8,790,229
------------ ------------ ------------
Gross investment income 94,622,223 85,282,385 74,998,582
Less investment expenses (5,661,711) (5,469,720) (3,934,977)
------------ ------------ ------------
Net investment income $88,960,512 $79,812,665 $71,063,605
------------ ------------ ------------
</TABLE>
9. REINSURANCE
The maximum amount of direct universal life insurance retained on any
life is $250,000. Amounts in excess of $250,000 are ceded on a Yearly
Renewable Term basis of reinsurance. Life insurance ceded to other companies
for the years ended December 31, 1995 and 1994 totaled $53,210,000 and
$56,440,000
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
NOTES TO STATUTORY FINANCIAL STATEMENTS
___________________________________________________________________________
9. REINSURANCE (CONTINUED)
or 12.4% and 12.7% of life insurance in force, respectively. A
contingent liability exists with respect to insurance ceded which would
become a liability should the reinsurer be unable to meet the obligations
assumed under reinsurance agreements.
10. SURPLUS
Under the Insurance Code of the State of North Carolina, in a given
year the Company may make dividend distributions without prior approval of
the Insurance Commissioner up to the lesser of its net gain from operations
for the preceding year or 10% of surplus as of December 31 of the preceding
year. The maximum dividend that could be paid during 1996 without Insurance
Commissioner's approval is $4,761,050.
The NAIC has adopted Risk-Based Capital (RBC) requirements which
became effective December 31, 1993, that attempt to evaluate the adequacy of
a life insurance company's adjusted statutory capital and surplus in relation
to investment, insurance and other business risks. The RBC formula is used
by the states as an early warning tool to identify possible weakly
capitalized companies for the purpose of initiating regulatory action and is
not designed to be a basis for ranking the financial strength of insurance
companies. In states which have adopted the NAIC regulations, the new RBC
requirements provide for four different levels of regulatory attention
depending on the ratio of the company's adjusted capital and surplus to its
RBC. As of December 31, 1995, the adjusted capital and surplus of the
Company is substantially in excess of the minimum level of RBC that would
require regulatory response.
11. COMMITMENT AND CONTINGENT LIABILITIES
Rental expense for all leases was $722,359, $847,389 and $831,805
for 1995, 1994 and 1993, respectively. Future minimum rental commitments
under noncancelable operating leases for office space and equipment aggregate
$1,675,095 through 2000. The amounts due by year are $556,746 in 1996,
$481,205 in 1997, $281,141 in 1998, $267,002 in 1999 and $89,001 in 2000.
The Company has contingent liabilities resulting from anticipated state
guaranty association assessments for life insurers deemed insolvent during
the year. Although the total amount of this exposure is not known, a
substantial portion of the amount assessed will be recovered against future
premium taxes under current laws and regulations. As of December 31, 1995,
the Company estimates its net contingent liability for future state guaranty
association assessments is within range of $500,000 to $2,000,000. The
Company has not committed any surplus funds to reserve for the contingent
liability. The Company recognizes its obligation for guaranty fund
assessments when it receives notice that an amount is payable to a guaranty
fund. Expenses incurred for guaranty fund assessments were $1,075,244,
$431,456 and $306,826 in 1995, 1994 and 1993, respectively.
The Company has been named as a cross-defendant in a complaint filed by
The American Endeavour Fund Limited against the Company's ultimate parent and
the Company's Chairman. Management estimates the claims against the Company
cannot exceed $2 million and there are pending motions to dismiss or, in the
alternative, to stay the complaint. The Company believes that the alleged
claims are without merit. While these claims are being contested, the
outcome is not predictable with assurance. The Company believes that any
liability resulting from these claims should not have a material adverse
affect on the Company's statutory surplus.
12. ASSET VALUATION AND INTEREST MAINTENANCE RESERVES
The purpose of the AVR is to decrease the volatility of the incidence of
asset losses and to recognize the long term return expectations for equity
investments. The increase or decrease to this reserve is charged or credited
directly to surplus.
LONDON PACIFIC LIFE & ANNUITY COMPANY
(A wholly-owned subsidiary of London Pacific Group Limited)
NOTES TO STATUTORY FINANCIAL STATEMENTS
___________________________________________________________________________
12. ASSET VALUATION AND INTEREST MAINTENANCE RESERVES (CONTINUED)
The purpose of the IMR is to minimize the effect of gains and losses
arising from gradual interest rate movements. All realized gains and losses
(net of tax) classified as interest related are accumulated and amortized
into net income over the remaining period to maturity of the security sold.
The effect of recording the IMR at December 31, 1995, 1994 and 1993 was to
defer total net capital gains of $10,190,326, $10,832,237 and $10,100,625,
respectively, and to recognize ($185,844), $945,197 and $1,584,804,
respectively, of IMR amortization into income.
13. FAIR VALUES OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair values of financial
instruments is made in accordance with the requirements of Statement of
Financial Accounting Standards ("SFAS") No. 107, "Disclosure about Fair Value
of Financial Instruments." The estimated fair value amounts have been
determined using available market information and appropriate valuation
methodologies. However, considerable judgment is required to interpret
market data to develop these estimates. Accordingly, these estimates are not
necessarily indicative of the amounts which could be realized in a current
market exchange. The use of different market assumptions or estimation
methodologies may have a material effect on the estimated fair value amounts.
For financial instruments not separately disclosed below, the carrying value
is a reasonable estimate of fair value.
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
<S> <C> <C> <C> <C>
CARRYING ESTIMATED CARRYING ESTIMATED
VALUE FAIR VALUE VALUE FAIR VALUE
-------------- -------------- ------------ ------------
Assets:
Debt securities $1,057,481,158 $1,090,099,356 $981,232,212 $914,143,123
Liabilities:
Insurance and annuity
reserves-investment-type
contracts $1,066,977,854 $1,094,695,606 $945,045,048 $948,989,798
</TABLE>
POLICY RESERVES
In accordance with SFAS No. 107, estimated fair values have been
calculated on policy reserves only for those products determined to be
investment-type. The estimated fair value of deferred annuity and universal
life contracts equals account value after deduction of surrender charges.
The estimated fair value of immediate annuity contracts is based on the
present value of expected benefits using a discount rate equal to the 5-year
Treasury rate.
14. CONCENTRATIONS OF CREDIT RISK
At December 31, 1995, the Company held unrated or less-than-investment
grade corporate bonds of $209,424,862. Those holdings amounted to 19.8% of
the Company's investments in bonds and less than 17.7% of the Company's total
admitted assets. The holdings of less-than-investment grade bonds are widely
diversified and management believes are of satisfactory quality based on
the Company's investment policies and credit standards.
SUPPLEMENTARY INFORMATION
Report of Independent Accountants
on Supplemental Schedule of Assets and Liabilities
February 8, 1996
To the Board of Directors and Shareholder of
London Pacific Life & Annuity Company
(A wholly-owned subsidiary of London Pacific Group Limited)
In our opinion, the accompanying Supplemental Schedule of Assets and
Liabilities is fairly stated in all material respects in relation to the basic
financial statements, taken as a whole, of London Pacific Life & Annuity
Company for the year ended December 31, 1995, which is covered by our report
dated February 8, 1996 presented in the first section of this document. Our
audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Supplemental Schedule of Assets
and Liabilities of London Pacific Life & Annuity Company as of and for the
year ended December 31, 1995 is presented for purposes of additional analysis
and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ PRICE WATERHOUSE LLP
- ------------------------
London Pacific Life & Annuity Company
Annual Statement for the Year Ended December 31, 1995
Schedule 1 - Supplemental Schedule of Assets and Liabilities
The following is a summary of certain financial data included in other
exhibits and schedules subjected to audit procedures by independent auditors
and utilized by actuaries in the determination of reserves.
Investment Income Earned
<TABLE>
<CAPTION>
<S> <C>
Government Bonds $419,725
------------
Other bonds (unaffiliated) 91,165,889
------------
Bonds of affiliates 0
------------
Preferred stocks (unaffiliated) 534,679
------------
Preferred stocks of affiliates 0
------------
Common stocks (unaffiliated) 265,384
------------
Common stocks of affiliates (285,874)
------------
Mortgage loans 0
------------
Real estate 0
------------
Premium notes, policy loans and liens 212,822
------------
Collateral loans 0
------------
Cash on hand and on deposit 274,696
------------
Short-term investments 554,252
------------
Other Invested Assets 0
------------
Derivative Instruments 195,860
------------
Aggregate write-ins for investment income 1,284,790
------------
Gross investment income $94,622,223
============
Real Estate Owned - Book Value less Encumbrances $0
============
Mortgage Loans - Book Value:
Farm mortgages $0
------------
Residential mortgages 0
------------
Commercial mortgages 0
------------
Total mortgage loans $0
============
Mortgage Loans By Standing - Book Value:
Good standing $0
============
Good standing with restructured terms $0
============
Interest overdue more than three months, not in foreclosure $0
============
Foreclosure in process $0
============
Other Long Term Assets - Statement Value $0
============
Collateral Loans $0
============
Bonds and Stocks of Parents, Subsidiaries and Affiliates - Book Value
Bonds $0
============
Preferred Stocks $0
============
Common Stocks $499,138
============
</TABLE>
Schedule 1 - Supplemental Schedule of Assets and Liabilities (continued)
<TABLE>
<CAPTION>
<S> <C>
Bonds and Short-term Investments by Class and Maturity:
Bonds by Maturity - Statement Value
Due within one year less $ 34,432,263
--------------
Over 1 year through 5 years 233,064,260
--------------
Over 5 years through 10 years 590,576,447
--------------
Over 10 years through 20 years 108,279,381
--------------
Over 20 years 91,128,807
--------------
Total by Maturity $1,057,481,158
==============
Bonds by Class - Statement Value
Class 1 $ 465,956,793
--------------
Class 2 382,099,503
--------------
Class 3 90,540,167
--------------
Class 4 85,136,505
--------------
Class 5 33,748,190
--------------
Class 6 0
--------------
Total by Class $1,057,481,158
==============
Total Bonds Publicly Traded $ 834,844,807
==============
Total Bonds Privately Placed $ 222,636,351
==============
Preferred Stocks - Statement Value $ 9,912,722
==============
Common Stocks - Market Value $ 1,430,013
==============
Short Term Investments - Book Value $ 69,747,096
==============
Financial Options Owned - Statement Value $ 0
==============
Financial Options Written and In force - Statement Value $ 0
==============
Collar, Swap and Forward Agreements Open - Statement Value $ 0
==============
Financial Futures Contracts Open - Current Price $ 0
==============
Cash on Deposit $ 2,664,850
==============
Life Insurance In Force:
Industrial $ 0
==============
Ordinary $ 429,950,000
==============
Credit Life $ 0
==============
Group Life $ 0
==============
Amount of Accidental Death Insurance In Force Under Ordinary Policies $ 0
==============
Life Insurance Policies with Disability Provisions In Force:
Industrial $ 0
==============
Ordinary $ 58,092,000
==============
Credit Life $ 0
==============
Group Life $ 0
==============
</TABLE>
Schedule 1 - Supplemental Schedule of Asses and Liabilities (continued)
<TABLE>
<CAPTION>
<S> <C>
Supplementary Contracts In Force:
Ordinary - Not Involving Life Contingencies
Amount on Deposit $ 0
============
Income Payable $ 15,050,486
============
Ordinary - Involving Life Contingencies
Income Payable $ 80,917
============
Group - Not Involving Life Contingencies
Amount of Deposit $ 0
============
Income Payable $ 0
============
Group - Involving Life Contingencies
Income Payable $ 0
============
Annuities:
Ordinary
Immediate - Amount of Income Payable $ 29,749,469
============
Deferred - Fully Paid Account Balance $304,257,178
============
Deferred - Not Fully Paid - Account Balance $615,778,334
============
Group
Amount of Income Payable $ 0
============
Fully Paid Account Balance $ 0
============
Not Fully Paid - Account Balance $ 0
============
Accident and Health Insurance - Premiums In Force:
Ordinary $ 0
============
Group $ 0
============
Credit $ 0
============
Deposit Funds and Dividend Accumulations:
Deposit Funds - Account Balance $ 0
============
Dividend Accumulations - Account Balance $ 0
============
Claim Payments 1995:
Group Accident and Health Year - Ended December 31, 1995 None
Other Accident and Health None
Other Coverages that use developmental methods to None
calculate claims reserves
</TABLE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
A. FINANCIAL STATEMENTS
The following financial statements of the Company are included in Part B
hereof:
<TABLE>
<CAPTION>
<S> <C>
1. Report of Independent Accountants.
2. Statutory Statements of Admitted Assets, Liabilities, Capital
and Surplus - December 31, 1995 and 1994.
3. Statutory Statements of Operations for the Year Ended
December 31, 1995, 1994 and 1993.
4. Statutory Statements of Changes in Capital and Surplus for the
Years Ended December 31, 1995, 1994 and 1993.
5. Statutory Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993.
6. Notes to Statutory Financial Statements.
</TABLE>
B. EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
1. Resolution of Board of Directors of the Company authorizing the
establishment of the Separate Account. *
2. Not Applicable.
3. Form of Principal Underwriter's Agreement. *
4. Individual Fixed and Variable Deferred Annuity Contract. *
(i) Enhanced Death Benefit Endorsement. *
5. Application Form.*
6. (i) Copy of Articles of Incorporation of the Company.
(ii) Copy of the Bylaws of the Company. *
7. Not Applicable.
8. Not Applicable.
9. Opinion and Consent of Counsel.
10. Consent of Independent Accountants.
11. Not Applicable.
12. Not Applicable.
13. Not Applicable.
14. Not Applicable.
15. Company Organizational Chart.*
27. Not Applicable.
</TABLE>
* Incorporated by reference to Registrant's Form N-4 (File No.
333-1779) as electronically filed on March 18, 1996.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
The following are the Executive Officers and Directors of the Company:
<TABLE>
<CAPTION>
<S> <C>
Name and Principal Position and Offices
Business Address with Depositor
- ------------------------- ---------------------------------------
Ian K. Whitehead President, Chief Executive Officer
1755 Creekside Oaks Drive and Director
Sacramento, CA 95833
Arthur I. Trueger Chairman of the Board and Director
650 California Street
San Francisco, CA 94108
George C. Nicholson Chief Financial Officer, Secretary and
3109 Poplarwood Court Director
Raleigh, NC 27604
Mark E. Prillaman Executive Vice President, Marketing
1755 Creekside Oaks Drive
Sacramento, CA 95833
Susan Y. Gressel Vice President and Treasurer
3109 Poplarwood Court
Raleigh, NC 27604
Charles M. King Vice President and Controller
3109 Poplarwood Court
Raleigh, NC 27604
William J. McCarthy Vice President and Chief Actuary
3109 Poplarwood Court
Raleigh, NC 27604
Charlotte M. Stott Vice President, National Sales Manager
1755 Creekside Oaks Drive
Sacramento, CA 95833
Jerry T. Tamura Vice President, Administrative Services
1755 Creekside Oaks Drive
Sacramento, CA 95833
Randolph N. Vance Vice President, Financial Actuary
3109 Poplarwood Court
Raleigh, NC 27604
Jerry S. Waters Vice President, Technology Services
1755 Creekside Oaks Drive
Sacramento, CA 95833
</TABLE>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The Company organizational chart was included as Exhibit 15 in Registrant's
Form N-4 (File No. 333-1779) filed on March 18, 1996.
ITEM 27. NUMBER OF CONTRACT OWNERS
Not Applicable.
ITEM 28. INDEMNIFICATION
The Bylaws (Article V) of the Company provide that:
Subject to the laws of the State of North Carolina, any present or former
director, officer or employee of the Company, or any person who, at the
request of the Company, express or implied, may have served as a director or
officer of another Company in which this Company owns shares or of which this
Company is a creditor, shall be entitled to reimbursement of expenses and
other liabilities, including attorney's fees actually and reasonably incurred
by him and any amount paid by him in discharge of a judgment, fine, penalty of
costs against him or paid by him in a settlement approved by a court of
competent jurisdiction, in any action or proceeding, including any civil,
criminal or administrative action, suit, hearing or proceeding, to which he is
a party by reason of being or having been a director, officer or employee of
this or such other Company. This section is not intended to extend or to
limit in any way the rights and remedies provided with respect to
indemnification of directors, officers, employees and other persons provided
by the laws of the State of North Carolina but is intended to express the
desire of the stockholders of this Company that indemnification be granted to
such directors, officers, employees and other persons to the fullest extent
allowable by such laws.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted directors and officers or controlling persons of the
Company pursuant to the foregoing, or otherwise, the Company 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,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company
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 Company 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.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Not Applicable.
(b) London Pacific Financial and Insurance Services is the principal
underwriter for the Contracts. The following persons are the officers and
directors of London Pacific Financial and Insurance Services.
<TABLE>
<CAPTION>
<S> <C>
Name and Principal Position and Offices
Business Address with Underwriter
- ------------------------- ----------------------------------------------
Ian K. Whitehead Director
1755 Creekside Oaks Drive
Sacramento, CA 95833
Jerry T. Tamura Chairman, President and Chief Executive Officer
1755 Creekside Oaks Drive
Sacramento, CA 95833
George C. Nicholson Treasurer and Director
3109 Poplarwood Court
Raleigh, NC 27604
Bonnie J. Bridge Secretary
1755 Creekside Oaks Drive
Sacramento, CA 95833
</TABLE>
(c) Not Applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Bruce Adams, whose address is 1755 Creekside Oaks Drive, Sacramento, CA 95833,
maintains physical possession of the accounts, books or documents of the
Separate Account required to be maintained by Section 31(a) of the Investment
Company Act of 1940 and the rules promulgated thereunder.
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.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has caused this Registration Statement to be signed on
its behalf, in the City of Raleigh, and State of North Carolina on this 22nd
day of May, 1996.
<TABLE>
<CAPTION>
<S> <C>
LPLA SEPARATE ACCOUNT ONE
-------------------------------------
Registrant
By: LONDON PACIFIC LIFE & ANNUITY COMPANY
By: /s/ GEORGE NICHOLSON
-------------------------------------
George Nicholson
By: LONDON PACIFIC LIFE & ANNUITY COMPANY
-------------------------------------
Depositor
By: /s/ GEORGE NICHOLSON
-------------------------------------
George Nicholson
</TABLE>
As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ ARTHUR I. TRUEGER 5-20-96
- ---------------------- Chairman of the Board and Director -------------
Arthur I. Trueger Date
/s/ IAN K. WHITEHEAD 5-20-96
- --------------------- President, Chief Executive Officer -------------
Ian K. Whitehead and Director Date
/s/ GEORGE C. NICHOLSON 5-20-96
- ------------------------ Chief Financial Officer, Secretary -------------
George C. Nicholson and Director Date
</TABLE>
INDEX TO EXHIBITS
EXHIBIT PAGE
99.B6(i) Copy of Articles of Incorporation of the Company
99.B9 Opinion and Consent of Counsel
99.B10 Consent of Independent Accountants
STATE OF NORTH CAROLINA DEPARTMENT OF THE
SECRETARY OF STATE
_________________________________________________________________________
TO ALL WHOM THESE PRESENTS SHALL COME, GREETINGS:
I, RUFUS L. EDMISTEN, Secretary of State of the State of North Carolina,
do hereby certify the following and hereto attached to be a true copy of
ARTICLES OF INCORPORATION
OF
LONDON PACIFIC LIFE & ANNUITY COMPANY
the original of which is not on file and is a matter of record in this office.
IN WITNESS WHEREOF, I have hereunto set my hand
and affixed my official seal at the City of
Raleigh, this 2nd day of June, 1994.
/S/ RUFUS L. EDMISTEN
_____________________________________
Secretary of State
CERTIFICATE OF INCORPORATION
OF
DIXIE LIFE INSURANCE COMPANY
This is to certify that we, the undersigned, ten in number, all of whom
are citizens and residents of the State of North Carolina, do hereby associate
ourselves into a corporation under and by virtue of the laws of the State of
North Carolina, and particularly those laws contained in Consolidated Statutes
and amendments thereto under Chapter 106, and to that end do hereby set forth:
1. That the name of the company shall be Dixie Life Insurance Company.
2. The location of the principal office of the corporation in the State
of North Carolina shall be at Raleigh; but that it may have such other branch
offices and places of business, both in and out of the State of North
Carolina, as its Board of Directors may deem advisable.
3. The objects for which this corporation is formed are as follows:
(a) To carry on, as a stock corporation, the business of life, accident
and health insurance, and to grant and purchase annuities. It shall also have
the power to re-insure any risks which it may have taken, and may accept
re-insurance upon risks taken by other insurance companies.
4. The authorized capital stock is One Hundred Thousand ($100,000.00)
Dollars divided into one thousand (1,000) shares of par value of One Hundred
Dollars ($100.00) per share, but the corporation may organize when Twenty-Five
Thousand ($25,000.00) Dollars of the capital stock composed of two hundred
fifty shares and a surplus of Twelve Thousand Five Hundred ($12,500.00)
Dollars shall have been subscribed for, but the corporation shall not write
any insurance until the capital stock and surplus in this paragraph provided
for shall have been subscribed and paid for in cash.
5. The names and post office address of the subscribers for stock are as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Name P.O. Address No. Shares
Hugh Stephens Raleigh, NC 10
W.F. Utley Raleigh, NC 10
H.E. Satterfield Raleigh, NC 145
W.C. Twiddy Raleigh, NC 10
M.B. Maynard Raleigh, NC 1
D.S. McMillan Raleigh, NC 1
G.B. Satterfield Raleigh, NC 70
B.H. Parker, Jr. Gastonia, NC 1
H.G. Utley Gastonia, NC 1
C.H. Rogers Raleigh, NC 1
</TABLE>
6. The period of the existence of this corporation is unlimited.
7. The corporation shall be managed by a Board of Directors of such
number as may be fixed by the by-laws of the Company, which by-laws shall
prescribe the rules of government of said corporation.
8. The Board of Directors shall have power, by vote of a majority of all
the directors, to make, alter, amend and rescind the by-laws of the
corporation, which shall remain in full force and effect until amended or
rescinded by the stockholders, or until amended as provided herein.
In witness whereof, we have hereunto set our hands and affixed our seals,
this the 1st day of October, 1927.
<TABLE>
<CAPTION>
<S> <C>
Hugh Stephens /S/ HUGH STEPHENS (SEAL)
------------------------------------
W.F. Utley /S/ W.F. UTLEY (SEAL)
------------------------------------
H.E. Satterfield /S/ H. E. SATTERFIELD (SEAL)
------------------------------------
W.C. Twiddy /S/ W.C. TWIDDY (SEAL)
------------------------------------
M.B. Maynard /S/ M.B. MAYNARD (SEAL)
------------------------------------
D.S. McMillan /S/ D.S. McMILLAN (SEAL)
------------------------------------
G.B. Satterfield /S/ G.B. SATTERFIELD (SEAL)
------------------------------------
B.H. Parker, Jr. /S/ B.H. PARKER, JR. (SEAL)
------------------------------------
H.G. Utley /S/ H.G. UTLEY (SEAL)
------------------------------------
C.H. Rogers /S/ C.H. ROGERS (SEAL)
------------------------------------
</TABLE>
North Carolina
Wake County
I, R.H. Merritt Notary Public in and for the State and County aforesaid,
do hereby certify that H.E. Satterfield and G.B. Satterfield personally
appeared before me this day and acknowledged the due execution of the
foregoing certificate of incorporation of Dixie Life Insurance Company for the
purposes therein expressed.
Witness my hand and notarial seal, this the 1st day of October, 1927.
/S/ R.H. MERRITT
_________________________________
Notary Public
My Commission Expires:
March 11, 1928
____________________________
North Carolina,
Wake County.
I, R.H. Merritt Notary Public, in and for the State and County aforesaid,
do hereby certify that M.B. Maynard and D.S. McMillan personally appeared
before me this day and acknowledged the due execution of the foregoing
certificate of incorporation of Dixie Life Insurance Company for the purposes
therein expressed.
Witness my hand and notarial seal, this the 1st day of October, 1927.
/S/ R.H. MERRITT
_________________________________
Notary Public
My Commission Expires:
March 11, 1928
____________________________
North Carolina,
Wake County.
I, Ella Grant, Notary Public in and for the State and County aforesaid,
do hereby certify that W.F. Utley, B.H. Parker, Jr., H.G. Utley and C.H.
Rogers personally appeared before me this day and acknowledged the due
execution of the foregoing certificate of incorporation of Dixie Life
Insurance Company for the purposes therein expressed.
Witness my hand and notarial seal, this the 2nd day of October, 1927.
/S/ ELLA GRANT
__________________________
Notary Public
My Commission Expires:
December 9, 1928
__________________________
North Carolina,
Wake County,
I, Irma T. Smith, Notary Public, in and for the State and County
aforesaid, do hereby certify that W.C. Twiddy and Hugh Stephens personally
appeared before me this day and acknowledged the due execution of the
foregoing certificate of incorporation of Dixie Life Insurance Company for the
purposes therein expressed.
Witness my hand and notarial seal, this the 3rd day of October, 1927.
/S/ IRMA T. SMITH
_________________________________
Notary Public
My Commission Expires:
May 13, 1928
___________________________
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
October 14, 1927.
I, STACEY W. WADE, INSURANCE COMMISSIONER IN AND FOR THE STATE OF NORTH
CAROLINA, DO HEREBY CERTIFY THAT I have examined the foregoing Articles of
Incorporation of the DIXIE LIFE INSURANCE COMPANY of RALEIGH, the same being
in compliance with the Law and I hereby approve and certify the same to the
Honorable Secretary of State as required by law.
IN TESTIMONY WHEREOF, I HAVE HEREUNTO SET MY HAND AND AFFIXED MY OFFICIAL
SEAL AT THE CITY OF RALEIGH, THIS THE FOURTEENTH DAY OF OCTOBER A.D. 1927.
/S/ STACEY W. WADE
_______________________________________
INSURANCE COMMISSIONER
CERTIFICATE OF AMENDMENT
to the Charter of Dixie Life Insurance Company
STATE OF NORTH CAROLINA :
COUNTY OF WAKE :
I hereby certify that at an adjourned regular meeting of the stockholders
of Dixie Life Insurance company, held at the home office of said Company on
the 15th day of April, A.D., 1931, at 3:00 o'clock P.M., pursuant to notice
required by law, which said notice was deposited in the post office properly
addressed and posted as required by the Company's By-Laws, to each
stockholder, signed in the manner provided in the By-Laws of said Company, all
of the stock of said Company being represented in person by owner or by proxy
and a formal waiver of notice of said meeting having been executed, and all
votes represented by said stock voting therefor, the following resolution was
adopted, to-wit:
"Be it resolved that the President of the Company be authorized and
directed to secure an amendment to the Company's charter reducing the par
value of capital stock of the Company from $100.00 to $10.00 per share and
increasing the number of shares of stock outstanding from 260 shares to 2,600
shares so that the total capital stock shall consist of 2,600 shares of par
value of $10.00 per share.
"Be it further resolved that a further amendment be obtained
providing that the Home Office of the Company shall be located at Greensboro,
N.C.
"Be it further resolved that the date of the annual meeting be
changed from the second Tuesday in January to the first Saturday in May."
/S/ P.T. STONE
___________________________________
Secretary.
Corporate Seal.
State of North Carolina :
County of Wake :
I, W.L. Carter, being duly sworn, declare on oath that I am President of
the Corporation mentioned in the foregoing certificate, and that the
statements therein made are true in substance and in fact.
In witness whereof, I have hereunto set my hand, and caused the seal of
said Corporation to be affixed, this the 15th day of April, A.D. 1931.
/S/ W.L. CARTER
____________________________________
President.
Subscribed and sworn to before me, this 15th day of April, A.D. 1931.
/S/ LOUISE HILL SORRUL
____________________________________
Notary Public.
My Commission Expires: 3/19/33
_______
We, the undersigned stockholders of Dixie Life Insurance Company of
Raleigh, N.C. owning more than 90% of outstanding stock of said company, do
hereby assent to the foregoing amendment. This April 15th, 1931.
/S/ A.J.
_____________________________________
/S/ W.L. CARTER
_____________________________________
/S/ P.T. STONE
_____________________________________
/S/ H.E. SATTERFIELD
_____________________________________
North Carolina,
Wake County.
This is to certify that on the 15th day of April, 1931, before me, Louise
Hill Sorrul, personally came W.L. Carter, with whom I am personally
acquainted, who, being by me duly sworn, says that W.L. Carter is the
president, and that P.T. Stone is the secretary of the Dixie Life Insurance
Company, the corporation described in and which executed the foregoing
instrument; that he knows the common seal of the said corporation; that the
seal affixed to the foregoing instrument is said common seal, and the name of
the corporation was subscribed thereto by the said president, and that the
said president and secretary subscribed their names thereto and said common
seal was affixed, all by order of the board of directors of said corporation,
and that the said president and secretary subscribed their names thereto and
said common seal was affixed, all by order of the board of directors of said
corporation, and that the said instrument is the act and deed of the said
corporation.
Witness my hand and notarial seal, this 15th day of April, 1931.
/S/ LOUISE HILL SORRUL
____________________________________
Notary Public.
My Commission Expires: 3/19/33
_______
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I, DAN C. BONEY, INSURANCE COMMISSIONER IN AND FOR THE STATE OF NORTH
CAROLINA, DO HEREBY CERTIFY THAT I have examined the foregoing amendment to
the certificate of incorporation of the Dixie Life Insurance Company and find
the same in accordance with the law applicable thereto and do hereby certify
the same to the Secretary of State as required by law.
IN TESTIMONY WHEREOF, I HAVE HEREUNTO SET MY HAND AND AFFIXED MY OFFICIAL
SEAL AT THE CITY OF RALEIGH, THIS THE 16TH DAY OF MARCH A.D. 1932.
/S/ DAN C. BONEY
_________________________________
INSURANCE COMMISSIONER
To the Secretary of State, Raleigh, North Carolina:
The undersigned, being owners of all of the stock of Dixie Life Insurance
Company, do hereby give our assent to proposed amendment to charter of Dixie
Life Insurance Company, which authorizes changing the name Dixie Life
Insurance Company to Southern-Dixie Life Insurance Company.
This March 5th, 1932.
/S/
_____________________________________
/S/ E.U. FLETCHER, by
_____________________________________
/S/ H.E. SATTERFIELD
_____________________________________
/S/ G.B. SATTERFIELD
_____________________________________
/S/ P.T. STONE
_____________________________________
/S/ A.B. CARTER
_____________________________________
/S/ W.L. CARTER
_____________________________________
/S/ MARIE E. CARTER
_____________________________________
CERTIFICATE OF AMENDMENT
to the Charter of Dixie Life Insurance Company
STATE OF NORTH CAROLINA :
COUNTY OF GUILFORD :
I hereby certify that a meeting of the stockholders of Dixie Life
Insurance Company, held in Greensboro, North Carolina, on the 9th day of
March, 1932, at 3:00 o'clock P.M., pursuant to notice required by law, all of
the stock of said company being represented in person or by proxy, and a
formal waiver of notice of said meeting having been executed, and all votes
represented by said stock being voted therefor, the following resolution was
adopted, to-wit:
"Be it resolved that the President of the Company be and he is
hereby authorized and directed to secure an amendment to the company's charter
changing the name of the company from 'Dixie Life Insurance Company' to
'Southern-Dixie Life Insurance Company'".
/S/ W.L. CARTER
___________________________________
President
Attest:
/S/ P.T. STONE
____________________________
Secretary
(Corporate Seal)
North Carolina,
Guilford County.
This is to certify that on the 9th day of March, 1932, before me,
A.McKeel, a Notary Public in and for the State and County aforesaid,
personally came W.L. Carter, with whom I am personally acquainted, who, being
by me duly sworn, says that W.L. Carter is the president, and that P.T. Stone
is the secretary of Dixie Life Insurance Company, the corporation described in
and which executed the foregoing instrument; that he knows the common seal of
the said corporation; that the seal affixed to the foregoing instrument is
said common seal, and the name of the corporation was subscribed thereto by
the said president, and that the said president and secretary subscribed their
names thereto, and said common seal was affixed, all by order of the board of
directors of said corporation, and that the said instrument is the act and
deed of the said corporation.
Witness my hand and notarial seal, this 9th day of March, 1932.
/S/ A.McKEEL
_______________________________
Notary Public
My Commission Expires:
November 8, 1932
_______________________
Amendment of Certificate of Incorporation
of Southern-Dixie Life Insurance Company
Greensboro, North Carolina
__________________________
RESOLUTION OF DIRECTORS
The Board of Directors of Southern-Dixie Life Insurance Company, a North
Carolina corporation with its principal office and place of business in
Greensboro, North Carolina, on the 22nd day of December, 1944, adopted the
following resolution:
"(1) RESOLVED by the Board of Directors of the Southern-Dixie Life
Insurance Company, Greensboro, North Carolina, in meeting duly called and
assembled, that it is deemed advisable to amend the Certificate of
Incorporation of this company so as to increase the authorized capital stock
of the company from One Hundred Thousand Dollars ($100,000) divided into ten
thousand shares of the par value of Ten Dollars ($10.00) per share, to Five
Hundred Thousand Dollars ($500,000.00), divided into fifty thousand (50,000)
shares of the par value of Ten Dollars ($10.00) per share, and to that end,
and to accomplish said purpose.
"BE IT FURTHER RESOLVED That the Certificate of Incorporation of
this company be amended further by striking out in section 4 the words and
figures "One Hundred Thousand Dollars ($100,000.00) divided into ten thousand
(10,000) shares of the par value of Ten Dollars ($10.00) per share (formerly
in the original Certificate one thousand shares of the par value of One
Hundred Dollars ($100.00) per share)" and inserting in lieu thereof "Five
Hundred Thousand Dollars ($500,000.00) divided into fifty thousand (50,000)
shares of the par value of Ten Dollars ($10.00) per share".
"(2) RESOLVED FURTHER That it is deemed advisable that the issuance
of $78,000.00 of this additional stock be effected by the transfer of
$78,000.00 from the surplus account of the company to the capital stock
account of the company, by means of the declaration of a stock dividend of
three hundred per cent (300%).
"(3) BE IT FURTHER RESOLVED That the officers of the company be, and
they are hereby, authorized, empowered and directed to take any and all steps,
and to do any and all acts that may be deemed necessary or advisable to carry
out these resolutions.
"(4) BE IT FURTHER RESOLVED That a special meeting of the
stockholders of this company be, and it is hereby, called to meet at the
office of the company in Greensboro, North Carolina, on Thursday, the 28th day
of December, 1944, at 10:30 o'clock A.M. to take action on these resolutions,
and to transact such business as may come before said meeting."
_____________________________________________________________________________
_____________________________________________________________________________
CERTIFICATE OF CHANGE
The Southern-Dixie Life Insurance Company, a North Carolina corporation
with its principal office and place of business in Greensboro, North Carolina,
does hereby certify that pursuant to the foregoing resolutions of its Board of
Directors, that its stockholders on this the 28th day of December, 1944, have
adopted the following resolutions:
"(1) RESOLVED, That the Certificate of Incorporation of this
corporation, be and the same is hereby amended so as to increase the
authorized capital stock of this corporation from One Hundred Thousand Dollars
($100,000.00) divided into ten thousand (10,000) shares of the par value of
Ten Dollars ($10.00) per share to Five Hundred Thousand Dollars ($500,000.00)
divided into fifty thousand (50,000) shares of the par value of Ten Dollars
($10.00) per share, and to that end, and to accomplish said purpose,
"BE IT FURTHER RESOLVED, That the Certificate of Incorporation of
this corporation as amended be further amended by striking out in section 4
the words and figures "One Hundred Thousand Dollars ($100,000.00) divided into
ten thousand (10,000) shares of the par value of Ten Dollars ($10.00) per
share (formerly in the original Certificate one thousand (1,000) shares of the
par value of One Hundred Dollars ($100.00) per share)" and inserting in lieu
thereof "Five Hundred Thousand Dollars ($500,000.00) divided into fifty
thousand (50,000) shares of the par value of Ten Dollars ($10.00) per share".
"(2) RESOLVED FURTHER, That the issuance of Seventy-Eight Thousand
Dollars ($78,000.00) of this additional stock be effected by the transfer of
Seventy-Eight Thousand Dollars ($78,000.00) from the surplus account of this
corporation to the capital stock account of this corporation, by means of the
declaration of a stock dividend of three hundred per cent (300%).
"(3) BE IT FURTHER RESOLVED, That the officers of this corporation
be and they are hereby authorized, empowered and directed to execute a
Certificate of said amendment and change, and any and all further documents
that may be deemed necessary or expedient to accomplish all of said purposes,
and further, to do any and all acts that may be deemed necessary or expedient
to carry out in all respects these resolutions."
That more than two-thirds in interest of all of the stockholders of said
corporation voted in favor of said resolutions, and that their written assent
is hereto appended and attached.
IN WITNESS WHEREOF, Said corporation has caused this Certificate to be
signed in its name by its President and attested by its Secretary, and its
corporate seal to be hereto affixed, this the 28th day of December, 1944.
SOUTHERN-DIXIE LIFE INSURANCE COMPANY
By: /S/ W.L. CARTER
___________________________________
President
/S/ T.C. COLLINS
_____________________________
Secretary
_____________________________________________________________________________
_____________________________________________________________________________
NORTH CAROLINA
GUILFORD COUNTY
I, CLIFFORD E. HALEY, a Notary Public, certify that T.C. COLLINS
personally came before me this day and acknowledged that he is Secretary of
Southern-Dixie Life Insurance Company (a corporation) and that, by authority
duly given and as the act of the corporation, the foregoing instrument was
signed in its name by its President, sealed with its corporate seal, and
attested by himself as its Secretary.
My commission expires June 27, 1945.
Witness my hand and official seal, this the 28th day of December, 1944.
/S/ CLIFFORD E. HALEY
____________________________________
Notary Public
_____________________________________________________________________________
_____________________________________________________________________________
STOCKHOLDERS ASSENT TO CHANGE
We the subscribers, being more than two-thirds in interest of all of the
stockholders of Southern-Dixie Life Insurance Company, Greensboro, North
Carolina, having at a special meeting of the stockholders, called regularly
for that purpose, on the 28th day of December, 1944, voted in favor of the
resolutions to amend the Certificate of Incorporation of this corporation so
as to increase the authorized capital stock of the corporation from One
Hundred Thousand Dollars ($100,000.00) to Five Hundred Thousand Dollars
($500,000.00), divided into fifty thousand (50,000) shares of the par value of
Ten Dollars ($10.00) per share, and to that end and to accomplish said
purpose, that the Certificate of Incorporation of this corporation as amended
be further amended by striking out in section 4 the words and figures "One
Hundred Thousand Dollars ($100,000) divided into ten thousand (10,000) shares
of the par value of Ten Dollars ($10.00) per share (formerly in the original
Certificate one thousand (1,000) shares of the par value of One Hundred
Dollars ($100.00) per share)" and inserting in lieu thereof "Five Hundred
Thousand Dollars ($500,000.00) divided into fifty thousand (50,000) shares of
the par value of Ten Dollars ($10.00) per share", and that the issuance of
Seventy-Eight Thousand Dollars ($78,000.00) of this additional stock be
effected by the transfer of Seventy-Eight Thousand Dollars ($78,000.00) from
the surplus account of the corporation to the capital stock account of the
corporation by means of the declaration of a stock dividend of three hundred
per cent (300%), and do now, pursuant to statute, hereby give our written
assent to said change.
Witness our hands this the 28th day of December, 1944.
STOCKHOLDERS NO. OF SHARES
/S/ A.S. FLETCHER 867
__________________________________________ ______________
/S/ W.L. CARTER 1353
__________________________________________ ______________
/S/ T.C. COLLINS 230
__________________________________________ ______________
/S/ O.H. BOWLES 5
__________________________________________ ______________
/S/ P.P. WILSON 5
__________________________________________ ______________
/S/ W.A. CORBETT 5
__________________________________________ ______________
/S/ J. 5
__________________________________________ ______________
WM. M. YORK 1
__________________________________________ ______________
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I, WILLIAM P. HODGES, INSURANCE COMMISSIONER IN AND FOR THE STATE OF
NORTH CAROLINA, DO HEREBY CERTIFY THAT I have examined the attached Amendment
to the Certificate of Incorporation of the Southern-Dixie Life Insurance
Company, Greensboro, North Carolina, and find the same in conformity with the
laws pertaining thereto, and do hereby certify the same to the Honorable
Secretary of State as provided by law.
IN TESTIMONY WHEREOF, I HAVE HEREUNTO SET MY HAND AND AFFIXED MY OFFICIAL
SEAL AT THE CITY OF RALEIGH, THIS THE 30TH DAY OF DECEMBER A.D. 1944.
/S/ WILLIAM P. HODGES
_________________________________
INSURANCE COMMISSIONER
NORTH CAROLINA
GUILFORD COUNTY
The undersigned officers and Directors of Southern-Dixie Life Insurance
Company, being the President, Secretary-Treasurer, and a majority of the
members of the Board of Directors, do hereby certify to the Insurance
Commissioner that on the 7th day of February, 1945, the Southern-Dixie Life
Insurance Company issued an additional 5,200 shares of its capital to its
stockholders by transferring $52,000.00 from the surplus account of the
company to the capital stock account of the company, and the declaration of a
stock dividend of 50% to its stockholders, said additional to the capital
stock being effected by a transfer from the surplus account to the capital
stock account of the company.
This the 7th day of February, 1945.
SOUTHERN-DIXIE LIFE INSURANCE COMPANY
By: /S/ W.L. CARTER
___________________________________
President and Director
/S/ T.C. COLLINS
___________________________________
Secretary-Treasurer and Director
/S/ WM. M. YORK
___________________________________
Director
/S/ A.S. FLETCHER
___________________________________
Director
Sworn to and subscribed before me,
this 7th day of February, 1945.
/S/ C.T. BOYD
___________________________________
Notary Public
My commission expires: March 9, 1945
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I, WILLIAM P. HODGES, INSURANCE COMMISSIONER IN AND FOR THE STATE OF NORTH
CAROLINA, DO HEREBY CERTIFY THAT I have carefully examined the certificate
filed by the Southern-Dixie Life Insurance Company executed by the officers
and a majority of the members of the Board of Directors certifying to the
increase of its capital stock from $104,000.00 to $156,000.00 by the transfer
of $52,000.00 from its surplus to the capital stock account of the company,
making a total combined capital stock of the company $156,000.00. This
certificate of increase is hereby certified to the Secretary of State for
recording and the company is hereby authorized to transact business upon the
capital increased. This certificate is issued as of February 8, 1945.
IN TESTIMONY WHEREOF, I HAVE HEREUNTO SET MY HAND AND AFFIXED MY OFFICIAL
SEAL AT THE CITY OF RALEIGH, THIS THE 31st DAY OF MAY A.D. 1947.
/S/ WILLIAM P. HODGES
______________________________________
INSURANCE COMMISSIONER
NORTH CAROLINA
GUILFORD COUNTY
The undersigned officers and Directors of Southern-Dixie Life Insurance
Company, being the President, Secretary-Treasurer, and a majority of the
members of the Board of Directors, do hereby certify to the Insurance
Commissioner that on the 28th day of December, 1944, the Southern-Dixie Life
Insurance Company issued an additional 7,400 shares of its capital to its
stockholders by transferring $74,000.00 from the surplus account of the
company to the capital stock account of the company, and on the 2nd day of
January, 1945, the company issued 400 more shares of its capital stock by
transferring $4,000.00 from the surplus account of the company to the capital
stock account of the company, making a total of $78,000.00 additional stock
issued as a stock dividend of 300% to its stockholders, said addition to the
capital stock being effected by a transfer from the surplus account to the
capital stock account of the company.
This the 18th day of January, 1945.
SOUTHERN-DIXIE LIFE INSURANCE COMPANY
By: /S/ W.L. CARTER
___________________________________
President and Director
/S/ T.C. COLLINS
___________________________________
Secretary-Treasurer and Director
/S/ WM. M. YORK
___________________________________
Director
Sworn to and subscribed before me,
this the 18th day of January, 1945.
/S/ G. HARRINGTON, JR.
___________________________________
Notary Public
My commission expires: Jan. 10, 1946
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I WILLIAM P. HODGES, INSURANCE COMMISSIONER IN AND FOR THE STATE OF NORTH
CAROLINA, DO HEREBY CERTIFY THAT I have carefully examined the certificate
filed by the Southern-Dixie Life Insurance Company executed by the officers
and a majority of the members of the Board of Directors certifying to the
increase of its capital stock from $26,000.00 to $104,000.00 by the transfer
of $74,000.00 from its surplus to the capital stock account of the company on
the 28th day of December, 1944, and by the further transfer of $4,000.00 from
the surplus account of the company to the capital stock account of the
company, making the combined capital stock of the company $104,000.00. This
certificate of increase is hereby certified to the Secretary of State for
recording and the company is hereby authorized to transact business upon the
capital increased. This certificate is issued as of January 23, 1945.
IN TESTIMONY WHEREOF, I HAVE HEREUNTO SET MY HAND AND AFFIXED MY OFFICIAL
SEAL AT THE CITY OF RALEIGH, THIS THE 31st DAY OF MAY A.D. 1947.
/S/ WILLIAM P. HODGES
______________________________________
INSURANCE COMMISSIONER
CERTIFICATE OF AMENDMENT TO THE CERTIFICATE
OF INCORPORATION
OF
THE SOUTHERN-DIXIE LIFE INSURANCE COMPANY
The location of the principal office in this State is in the city of
Greensboro, County of Guilford.
RESOLUTION OF DIRECTORS
The Board of Directors of the Southern-Dixie Life Insurance Company, a
corporation of North Carolina, on this the 3rd day of May, 1947, do hereby
resolve and declare that the Board of Directors is of the opinion, and so
recommends to the stockholders of the corporation, that it is advisable that
the corporate charter be amended to change the name of the corporation from
SOUTHERN-DIXIE LIFE INSURANCE COMPANY to SOUTHERN LIFE INSURANCE COMPANY; and
that a meeting of the stockholders of the Southern-Dixie Life Insurance
Company be held in the office of the company in Greensboro, North Carolina, at
ten o'clock A.M., on May 17th, 1947, at which time this recommendation is to
be made to the stockholders and they be allowed to vote at that time upon the
proposed amendment to the corporate charter; and that proper notice of this
stockholders meeting be given to all stockholders of this corporation.
CERTIFICATE OF CHANGE
The Southern-Dixie Life Insurance Company, a corporation of North
Carolina, doth hereby certify that pursuant to the said resolution, and upon
notice duly given to all voting stockholders, as provided by law and the
by-laws of this corporation, a meeting of the stockholders was held at the
time and place specified, and at least a majority in interest of the
stockholders of the said corporation having voting powers being represented in
person or by proxy, a resolution was unanimously adopted approving the
amendment proposed by the Board of Directors as follows:
That the corporate charter be amended to change the name of the
Southern-Dixie Life Insurance Company to Southern Life Insurance Company.
That the written consent of at least a majority in interest of
stockholders having voting powers is hereto appended.
IN WITNESS WHEREOF, said corporation has caused this certificate to be
signed by its President and Secretary, and its corporate seal to be hereto
affixed, the 17th day of May, 1947.
SOUTHERN-DIXIE LIFE INSURANCE COMPANY
/S/W.L. CARTER, PRESIDENT
By____________________________________
W.L. Carter, President
/S/T.C. COLLINS, SECRETARY
____________________________
T.C. COLLINS, SECRETARY
STATE OF NORTH CAROLINA
COUNTY OF GUILFORD
Be it remembered, that on this 17th day of May, 1947, before me, the
subscriber, a Notary Public, personally appeared T.C. Collins, Secretary of
the Southern-Dixie Life Insurance Company, the corporation mentioned in and
which executed the foregoing certificate, who, being by me duly sworn, on his
oath says that he is such Secretary, and that the seal affixed to said
certificate is the corporate seal of said corporation, the same being well
known to him; that W.L. Carter is President of said corporation, and signed
said certificate and affixed said seal thereto, and delivered said certificate
by authority of the Board of Directors and with the assent of at least a
majority in interest of the stockholders of said corporation having voting
powers as and for his voluntary act and deed, and the voluntary act and deed
of said corporation, in presence of deponent, who thereupon subscribed his
name thereto as witness.
And he further says that the assent hereto appended is signed by at least
two-thirds in interest of the stockholders of said corporation having voting
powers, either in person or by their several duly constituted attorneys in
fact, thereunto duly authorized in writing.
/S/VIVIAN F. ROBERTS
___________________________________
Notary Public
My commission expires:
March 14, 1948
____________________________
STATE OF NORTH CAROLINA
COUNTY OF GUILFORD
We, the subscribers, being at least a majority in interest of
stockholders of the Southern-Dixie Life Insurance Company having voting
powers, having at a meeting regularly called for the purpose, voted in favor
of amended the certificate of incorporation as above set out do now, pursuant
to the statute, hereby give our written assent to said change.
Witness our hands, this the 17th day of May, 1947.
STOCKHOLDERS SHARES
/S/ W.L. CARTER 8,090
________________________________ ___________________
/S/ W.L. CARTER, JR. 180
________________________________ ____________________
/S/ T. C. COLLINS 1,320
________________________________ ____________________
/S/ WM. YORK 6
________________________________ ____________________
/S/ CHARLES HOGAN, JR. 5
________________________________ ____________________
/S/ T.C. COLLINS BY PROXY 5,717
________________________________ ____________________
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I, WILLIAM P. HODGES, INSURANCE COMMISSIONER IN AND FOR THE STATE OF
NORTH CAROLINA, DO HEREBY CERTIFY THAT I have examined the foregoing
Certificate of Amendment to the Certificate of Incorporation of the
SOUTHERN-DIXIE LIFE INSURANCE COMPANY and find the same in accordance with
law. I hereby approve and certify the same to the Honorable Thad Eure,
Secretary of State, as by law required.
IN TESTIMONY WHEREOF, I HAVE HEREUNTO SET MY HAND AND AFFIXED MY OFFICIAL
SEAL AT THE CITY OF RALEIGH, THIS THE 9th DAY OF JUNE A.D. 1947.
/S/ WILLIAM P. HODGES
______________________________________
INSURANCE COMMISSIONER
CERTIFICATE OF INCREASE OF CAPITAL STOCK
OF
SOUTHERN LIFE INSURANCE COMPANY
GREENSBORO, NORTH CAROLINA
----------
Resolution of Directors
The Board of Directors of the Southern Life Insurance Company, a North
Carolina corporation with its principal office and place of business in
Greensboro, North Carolina, at its annual meeting on the 3rd day of May, 1952,
adopted the following resolutions:
"(1) RESOLVED: That the Board of Directors is of the opinion and so
recommends to the stockholders of the Southern Life Insurance Company,
Incorporated that it is advisable that the capital stock of this corporation
be increased from Fifteen Thousand Six Hundred (15,600) shares at a par value
of Ten (10.00) dollars per share to Fifty Thousand (50,000) shares at a par
value of Ten (10.00) dollars per share as authorized in the certificate of
incorporation of this corporation, as amended, and that this increase in
capital stock be effected by the transfer of Three Hundred Forty-Four Thousand
(344,000) dollars from the surplus account of this corporation to the capital
stock account of this corporation and that Thirty-Four Thousand Four Hundred
(34,400) shares of stock of the par value of Ten (10.00) dollars be issued on
a pro rata basis and as a stock dividend to stockholders of this corporation
of record on May 3, 1952.
"(2) BE IT FURTHER RESOLVED: That it appearing that in the issuance
of the increase of capital stock referred to above, fractional shares will be
involved, the Board of Directors is of the opinion and so recommends to the
stockholders of the corporation that it is advisable that fractional share
warrants be issued by the corporation in such instances when the pro rata
distribution would entitle a stockholder to a fractional interest in a share
of the capital stock of the Company; that said fractional share warrant will
entitle the holder thereof to a fractional interest in a share of the capital
stock of the Southern Life Insurance Company, as it exists after the
declaration and payment of the stock dividend of May 17, 1952, if such
dividend is approved by the stockholders of the corporation; and that upon
surrender of the warrant at the Company's office in Greensboro, North
Carolina, with other like fractional warrants aggregating the amount of one
share, the bearer will then be entitled to one share of the Company's capital
stock, as it exists after the declaration and payment of the said stock
dividend of May 17, 1952, if such stock dividend is approved by the
stockholders; and further that if the fractional warrants so surrendered
include a fraction in excess of one share, or multiple thereof, a new
fractional warrant will be issued by the Company; and that the fractional
share warrants shall not entitle the holder to voting or any other rights of a
stockholder, and no dividends or interest shall be payable or shall accrue in
respect to said fractional share warrants.
"(3) BE IT FURTHER RESOLVED: That the officers of the Company be,
and they are hereby, authorized, empowered and directed to take any and all
steps, and to do any and all acts that may be deemed necessary or advisable to
carry out these resolutions.
"(4) BE IT FURTHER RESOLVED: That a special meeting of the
stockholders of this company be, and it is hereby, called to meet at the
office of the Company in Greensboro, North Carolina, on Saturday the 17th day
of May, 1952, at 10:00 o'clock A.M., to take action on these resolutions, and
to transact such business as may come before said meeting."
The Southern Life Insurance Company, a North Carolina Corporation with
its principal office and place of business in Greensboro, North Carolina, does
hereby certify that, pursuant to the foregoing resolutions of its Board of
Directors, its stockholders owning and holding Fourteen Thousand Nine Hundred
Sixty-eight (14,968) shares of the Fifteen Thousand Six Hundred (15,600)
shares issued and outstanding met at a special meeting on the 17th day of May,
1952, and unanimously adopted the following resolutions:
"(1) RESOLVED: That the resolutions adopted by the Board of
Directors as set out in the call for special meeting of stockholders of the
Southern Life Insurance Company be and the same are in all respects approved;
and that in furtherance of said resolutions
"(2) BE IT FURTHER RESOLVED that the capital stock of the Southern
Life Insurance Company be increased from Fifteen Thousand Six Hundred (15,600)
shares at a par value of Ten (10.00) dollars per share to Fifty Thousand
(50,000) shares at a par value of Ten (10.00) dollars per share as authorized
in the certificate of incorporation of this corporation, as amended, and that
this increase in capital stock be effected by the transfer of Three Hundred
Forty-four Thousand (344,000.00) dollars from the surplus account of this
corporation to the capital stock account of this corporation and that
Thirty-four Thousand Four Hundred (34,400) shares of stock of the par value of
Ten (10.00) dollars be issued on a pro rata basis and as a stock dividend to
stockholders of this corporation of record on May 3, 1952.
"(3) BE IT FURTHER RESOLVED that fractional share warrants be issued
by the corporation in such instances when, in the issuance of the increase of
capital stock referred to above, the pro rata distribution entitles a
stockholder to a fractional interest in a share of the capital stock of the
company; that such fractional share warrant entitles the holder thereof to a
fractional interest in a share of the capital stock of the Southern Life
Insurance Company as it exists immediately after the declaration and payment
of the stock dividend authorized this the 17th day of May, 1952; and that upon
the surrender of the warrant at the corporation office in Greensboro, North
Carolina, with other like fractional warrants aggregating the amount of one
share, the holder will then be entitled to one share of the company's capital
stock, as it exists immediately after the declaration and payment of the said
stock dividend authorized this the 17th day of May, 1952; and further that if
the fractional warrants so surrendered include a fraction in excess of one
share, or multiple thereof, a new fractional warrant will be issued by the
company; and that the fractional share warrants shall not entitle the holder
to voting or any other rights of a stockholder, and no dividends or interest
shall be payable or shall accrue in respect to said fractional share warrants.
"(4) BE IT FURTHER RESOLVED that the officers of the company be, and
they are hereby, authorized, empowered and directed to take any and all steps
and do any and all acts that may be deemed necessary or advisable to carry out
these resolutions."
That pursuant to said resolutions, Three Hundred Forty-four Thousand
(344,000) dollars was transferred from the surplus account of said corporation
to the capital stock account of said corporation and that on the 17th day of
May, 1952, Thirty-four Thousand Three Hundred Ninety-five (34,395) shares of
stock of the par value of Ten (10.00) dollars per share were issued on a pro
rata basis and as a stock dividend to the stockholders of said corporation of
record on May 3, 1952, and that fractional share warrants aggregating five (5)
shares of stock of the par value of Ten (10.00) dollars per share will be
issued to the stockholders who are entitled to a fractional interest in a
share of the capital stock of this company at such time as such fractional
share warrants can be obtained from the printer.
IN WITNESS WHEREOF, said corporation has caused this certificate to be
signed by its President and Secretary and by a majority of its five Directors
and its corporate seal to be hereto affixed, this the 13th day of June, A.D.,
1952.
<TABLE>
<CAPTION>
<S> <C>
SOUTHERN LIFE INSURANCE COMPANY
Attest:
By /S/ W.L. CARTER
-------------------------------
President
/S/ T.C. COLLINS
- ----------------
Secretary /S/ W.L. CARTER
-------------------------------
President and Director
/S/ T.C. COLLINS
-------------------------------
Secretary and Director
/S/ W.L. CARTER JR.
-------------------------------
Director
/S/ CHARLES T. HAGAN, JR.
-------------------------------
Director
</TABLE>
Sworn to and subscribed by W.L. Carter, T.C. Collins, W.L. Carter, Jr.,
and Charles T. Hagan, Jr., this 13th day of June, 1952.
/S/ EARL H. LANNING JR.
___________________________________
Notary Public
My Commission Expires July 22, 1953.
___________________________________
NORTH CAROLINA
GUILFORD COUNTY
Be it remembered, that on this 13th day of June, A.D. 1952, before me,
the subscriber, a Notary Public, personally appeared T.C. Collins, Secretary
of the Southern Life Insurance Company, the corporation mentioned in and which
executed the foregoing certificate, who, being by me duly sworn, on his oath
says that he is such Secretary, and that the seal affixed to said certificate
is the corporate seal of said corporation, the same being well known to him;
that W.L. Carter is President of said corporation, and signed said certificate
and affixed said seal thereto, and delivered said certificate by authority of
the Board of Directors.
And he further says that said certificate is signed and sworn to by the
President and Secretary and a majority of the Board of Directors of said
corporation.
/S/ EARL H. LANNING JR.
___________________________________
Notary Public
My Commission Expires July 22, 1953.
___________________________________
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I, WALDO C. CHEEK, COMMISSIONER OF INSURANCE IN AND FOR THE STATE OF
NORTH CAROLINA, DO HEREBY CERTIFY THAT I have examined the attached
certificate of Increase of Capital Stock from 15,600 shares at a par value of
$10.00 per share, to 50,000 shares at a par value of $10.00 per share, of the
Southern Life Insurance Company, Greensboro, North Carolina, and find the same
in conformity with the laws pertaining thereto (G.S.58-83), and do certify the
same to the Honorable Secretary of State as provided by law.
IN TESTIMONY WHEREOF, I HAVE HEREUNTO SET MY HAND AND AFFIXED MY OFFICIAL
SEAL AT THE CITY OF RALEIGH, THIS THE 17th DAY OF June A.D. 1952.
/S/ WALDO C. CHEEK
_____________________________________
COMMISSIONER OF INSURANCE
AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
SOUTHERN LIFE INSURANCE COMPANY
_________________
RESOLUTION OF DIRECTORS
The Board of Directors of Southern Life Insurance Company, a North
Carolina corporation with its principal office and place of business in
Greensboro, North Carolina on the 19th day of July, 1952, adopted the
following resolutions:
"RESOLVED, by the Board of Directors of Southern Life Insurance
Company, Greensboro, North Carolina, in meeting duly called and assembled that
the Board of Directors is of the opinion and so recommends to the stockholders
of Southern Life Insurance Company that it is deemed advisable to amend the
Certificate of Incorporation of this Company to increase the authorized
capital stock of the Company from Five Hundred Thousand ($500,000) Dollars
divided into Fifty Thousand (50,000) shares of the par value of Ten ($10)
Dollars per share to One Million ($1,000,000) Dollars divided into One Hundred
Thousand (100,000) shares of the par value of Ten ($10) Dollars per share, and
to that end, and to accomplish said purpose:
"BE IT FURTHER RESOLVED, That the Certificate of Incorporation of
this Company be amended further by striking out in Section 4 the words and
figures 'Five Hundred Thousand ($500,000) Dollars divided into Fifty Thousand
(50,000) shares of the par value of Ten ($10) Dollars per share' and inserting
in lieu thereof 'One Million ($1,000,000) Dollars divided into One Hundred
Thousand (100,000) shares of the par value of Ten ($10) Dollars per share.'
"BE IT FURTHER RESOLVED, That the officers of the Company be, and
they are hereby, authorized, empowered and directed to take any and all steps,
and to do any and all acts that may be deemed necessary or advisable to carry
out these resolutions.
"BE IT FURTHER RESOLVED, That a special meeting of the stockholders
of this Company be, and it is hereby, called to meet at the office of the
Company in Greensboro, North Carolina, on Saturday the first day of November,
1952, at 10:00 o'clock A.M. to take action on these resolutions, and to
transact such business as may come before said meeting."
CERTIFICATE OF CHANGE
The Southern Life Insurance Company, a North Carolina corporation with
its principal office and place of business in Greensboro, North Carolina, does
hereby certify that pursuant to the foregoing resolutions of its Board of
Directors, and upon notice duly given to all stockholders as provided by law
and the by-laws of this corporation, a meeting of the stockholders was held on
this the first day of November, 1952 and the following resolutions were
adopted approving the amendment proposed by the Board of Directors, as
follows:
"RESOLVED by the stockholders of the Southern Life Insurance Company
in meeting duly called and assembled that the resolutions adopted by the Board
of Directors as set out in the call of special meeting of stockholders of the
Southern Life Insurance Company be and the same are in all respects approved,
and that the Certificate of Incorporation of this Company be amended as
recommended in the resolution of the Board of Directors above set forth, and
to this end and to accomplish said purpose:
"BE IT FURTHER RESOLVED that the Certificate of Incorporation of this
Company be amended further by striking out in Section 4 the words and figures
'Five Hundred Thousand ($500,000) Dollars divided into Fifty Thousand (50,000)
shares of the par value of Ten ($10) Dollars per share' and inserting in lieu
thereof 'One Million ($1,000,000) Dollars divided into One Hundred Thousand
(100,000) shares of the par value of Ten ($10) Dollars per share.'
"BE IT FURTHER RESOLVED, that the officers of the Company be and they
are hereby, authorized, empowered and directed to take any and all steps, and
to do any and all acts that may be deemed necessary or advisable to carry out
these resolutions."
That more than two-thirds in interest of all the stockholders of said
corporation voted in favor of said resolutions, and that their written assent
is hereto appended and adopted.
In Witness Whereof, said corporation has caused this Certificate to be
signed in its name by its President and attested by its Secretary, and its
corporate seal to be hereto affixed, this the first day of November, 1952.
SOUTHERN LIFE INSURANCE COMPANY
BY /S/ W.L. CARTER
________________________________
PRESIDENT
ATTEST:
/S/ T.C. COLLINS
_______________________________
SECRETARY
NORTH CAROLINA
GUILFORD COUNTY
Be it remembered, that on this first day of November, A.D. 1952, before
me, the subscriber, a notary public, personally appeared T.C. Collins,
Secretary of the Southern Life Insurance Company, the corporation mentioned in
and which executed the foregoing certificate, who, being by me duly sworn, on
his oath says that he is such Secretary, and that the seal affixed to said
certificate is the corporate seal of said corporation, the same being
well-known to him; that W.L. Carter is President of said corporation, and
signed said certificate and affixed said seal thereto, and delivered said
certificate by authority of the Board of Directors and with the assent of at
least two-thirds in interest of the Stockholders of said corporation having
voting powers as and for his voluntary act and deed, and the voluntary act and
deed of said corporation, in presence of deponent, who thereupon subscribed
his name thereto as witness.
/S/
________________________________________
Notary Public
My Commission Expires
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I, WALDO C. CHEEK, COMMISSIONER OF INSURANCE IN AND FOR THE STATE OF
NORTH CAROLINA, DO HEREBY CERTIFY THAT I have examined the annexed Amendment
of Certificate of Incorporation of SOUTHERN LIFE INSURANCE COMPANY,
Greensboro, N.C., dated 1st November, 1952, increasing the authorized capital
stock of the Company from FIVE HUNDRED THOUSAND ($500,000) DOLLARS, divided
into Fifty Thousand (50,000) shares of Ten ($10) Dollars per share to ONE
MILLION ($1,000,000) DOLLARS divided into One Hundred Thousand (100,000)
shares of the par value of Ten ($10) Dollars per share, which conforms to law
therefor, and that I approve such increase in the capital structure of the
Company, and I hereby certify the attached Amendment for filing with the
Secretary of State of North Carolina as required by law.
IN TESTIMONY WHEREOF, I HAVE HEREUNTO SET MY HAND AND AFFIXED MY OFFICIAL
SEAL AT THE CITY OF RALEIGH, THIS THE 19th DAY OF January A.D. 1953.
/S/ WALDO C. CHEEK
_____________________________________
COMMISSIONER OF INSURANCE
AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
SOUTHERN LIFE INSURANCE COMPANY
* * * * * * *
RESOLUTION OF DIRECTORS
The Board of Directors of Southern Life Insurance Company, a North
Carolina corporation with its principal office and place of business in
Greensboro, North Carolina, on the 5th day of May, 1956, adopted the following
resolutions:
"Resolved, by the Board of Directors of Southern Life Insurance Company,
Greensboro, North Carolina, in meeting duly called and assembled, that the
Board of Directors is of the opinion and so recommends to the Stockholders of
Southern Life Insurance Company that it is deemed advisable to amend the
Certificate of Incorporation of this company to change the date of the annual
meeting from the first Saturday in May to such time as the Board of Directors
shall designate in the By-Laws, and to that end, and to accomplish said
purpose:
"Be it further resolved, that the Certificate of Incorporation of this
company be amended further by striking out the words that the annual meeting
'be changed from the second Tuesday in January to the first Saturday in May'
and inserting in lieu thereof the words 'be at such time as the Board of
Directors shall designate in the By-Laws'.
"Be it further resolved that the officers of the company be, and they are
hereby authorized, empowered and directed to take any and all steps and do any
and all acts that may be deemed necessary or advisable to carry out these
resolutions.
"Be it further resolved, that a special meeting of the Stockholders of
this company be, and it is hereby, called to meet at the office of the company
in Greensboro, North Carolina, on Saturday, the 4th day of August, 1956, at
10:00 a.m., to take action on these resolutions."
CERTIFICATE OF CHANGE
The Southern Life Insurance Company, a North Carolina corporation with
its principal office and place of business in Greensboro, North Carolina, does
hereby certify that pursuant to the foregoing resolutions of its Board of
Directors, and upon notice duly given to all Stockholders as provided by law
and the By-laws of this corporation, a meeting of the Stockholders was held on
this the fourth day of August, 1956, and the following resolutions were
adopted approving the amendment proposed by the Board of Directors, as
follows:
"Resolved by the Stockholders of the Southern Life Insurance Company in
meeting duly called and assembled that the resolutions adopted by the Board of
Directors as set out in the call of special meeting of the Stockholders of
Southern Life Insurance Company be and the same are in all respects approved,
and that the Certificate of Incorporation of this company be amended as
recommended as recommended in the resolution of the Board of Directors above
set forth, and to this end and to accomplish said purpose:
"Be it further resolved that the Certificate of Incorporation of this
company be amended further by striking out the words that the annual meeting
'be changed from the second Tuesday in January to the first Saturday in May'
and inserting in lieu thereof the words 'be at such time as the Board of
Directors shall designate in the By-Laws'.
"Be it further resolved that the officers of the company be, and they are
hereby authorized, empowered and directed to take any and all steps and do any
and all acts that may be deemed necessary or advisable to carry out these
resolutions."
That more than two-thirds in interest of all the Stockholders of said
corporation voted in favor of said resolution.
IN WITNESS WHEREOF, said corporation has caused this Certificate to be
signed in its name by its President and attested by its Secretary, and its
corporate seal to be hereto affixed, this the fourth day of August, 1956.
SOUTHERN LIFE INSURANCE COMPANY
BY /S/ W.L. CARTER
________________________________
PRESIDENT
ATTEST:
/S/ T.C. COLLINS
_______________________________
SECRETARY
NORTH CAROLINA
GUILFORD COUNTY
Be it remembered, that on the fourth day of August, A.D. 1956, before me,
the subscriber, a notary public, personally appeared T.C. Collins, Secretary
of the Southern Life Insurance Company, the corporation mentioned in and which
executed the foregoing certificate, who, being by me duly sworn, on his oath
says that he is such Secretary, and that the seal affixed to said certificate
is the corporate seal of said corporation, the same being well-known to him;
that W.L. Carter is President of said corporation, and signed said certificate
and affixed said seal thereto, and delivered said certificate by authority of
the Board of Directors and with the assent of at least two-thirds in interest
of the Stockholders of said corporation having voting powers as and for his
voluntary act and deed, and the voluntary act and deed of said corporation, in
presence of deponent, who thereupon subscribed his name thereto as witness.
/S/ MARY H. KENNEDY
________________________________________
Notary Public
My Commission Expires May 25, 1957
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I, Charles F. Gold, Commissioner of Insurance in and for the State of
North Carolina, do hereby certify that I have examined the attached "AMENDMENT
OF CERTIFICATE OF INCORPORATION" dated 4th August, 1956 of the SOUTHERN LIFE
INSURANCE COMPANY, a North Carolina corporation with its principal office and
place of business in Greensboro, North Carolina, and that I find the same in
conformity with the law pertaining thereto, and to hereby certify the same to
the Honorable Thad Eure, Secretary of State, as provided by law for filing.
In testimony whereof, I have hereunto set my hand and affixed my official
seal at the city of Raleigh, this the 9th day of August A.D. 1956.
/S/ CHARLES F. GOLD
____________________________________
Commissioner of Insurance
CERTIFICATE OF INCREASE OF CAPITAL STOCK
OF
SOUTHERN LIFE INSURANCE COMPANY
GREENSBORO, NORTH CAROLINA
* * * * * * *
RESOLUTION OF DIRECTORS
The Board of Directors of the Southern Life Insurance Company, a North
Carolina corporation, with its principal office and place of business in
Greensboro, North Carolina, at its regular meeting held on the 3rd day of
November, 1956, adopted the following resolutions:
"Resolved, by the Board of Directors of Southern Life Insurance Company,
in meeting duly called and assembled, that the Board of Directors is of the
opinion and so recommends to the stockholders of the Southern Life Insurance
Company, that it is advisable that the capital stock of this corporation be
increased from Fifty Thousand (50,000) shares at a par value of Ten ($10.00)
Dollars per share to One Hundred Thousand (100,000) shares at a par value of
Ten ($10.00) Dollars per share as authorized in the certificate of
incorporation of this corporation, as amended, and that this increase in
capital stock be effected by the transfer of Five Hundred Thousand ($500,000)
Dollars from the surplus account of the corporation to the capital stock
account of this corporation and that Fifty Thousand (50,000) shares of stock
of the par value of Ten ($10.00) Dollars be issued on a pro-rata basis and as
a stock dividend to stockholders of this corporation of record on the 3rd day
of November, 1956.
"Be it further resolved, that the officers of the Company be, and they
are hereby, authorized, empowered and directed to take any and all steps, and
to do any and all acts that may be deemed necessary or advisable to carry out
these resolutions.
"Be it further resolved, that a special meeting of the stockholders of
this Company be, and it is hereby, called to meet at the Home Office of the
Company in Greensboro, North Carolina, on Saturday the 17th day of November,
1956, at 10:00 A.M. to take action on these resolutions."
CERTIFICATE OF CHANGE
The Southern Life Insurance Company, a North Carolina corporation with
its principal office and place of business in Greensboro, North Carolina, does
hereby certify that, pursuant to the foregoing resolutions of its Board of
Directors, its stockholders owning and holding Forty-seven Thousand Five
Hundred Thirty-eight (47,538) shares of the Forty-nine Thousand Nine Hundred
Ninety-nine (49,999) shares issued and outstanding, met at a special meeting
on the 17th day of November, 1956, at the Home Office of the Company, and
unanimously adopted the following resolutions:
"Resolved, by the Stockholders of the Southern Life Insurance Company in
meeting duly called and assembled, that the resolutions adopted by the Board
of Directors as set out in the call for this special meeting of the
stockholders of Southern Life Insurance Company be, and the same are in all
respects, approved; and that in furtherance of said resolutions,
"Be it further resolved that the capital stock of the Southern Life
Insurance Company be increased from Fifty Thousand (50,000) shares at a par
value of Ten ($10.00) Dollars per share to One Hundred Thousand (100,000)
shares at a par value of Ten ($10.00)Dollars per share
fractional share warrants aggregating one (1) share of the capital stock of
the Southern Life Insurance Company as it existed immediately after the
declaration and payment of the stock dividend of May 17, 1952, are presently
outstanding and were registered upon the records of the Southern Life
Insurance Company on the 3rd day of November, 1956; and that upon the
surrender at the Home Office of the Company in Greensboro, North Carolina, of
the aforesaid fractional share warrants aggregating one (1) share of the
capital stock of the Southern Life Insurance Company as it existed immediately
after the declaration and payment of the stock dividend of May 17, 1952, the
holder thereof will then be entitled to two (2) shares of the Company's
capital stock as it exists immediately after the declaration and payment of
the stock dividend authorized on the 17th day of November, 1956.
IN WITNESS WHEREOF, said corporation has caused this certificate to be
signed by its President and Secretary and by a majority of its five Directors,
and its corporate seal to be hereto affixed, this the 27th day of November,
1956.
SOUTHERN LIFE INSURANCE COMPANY
BY /S/ W.L. CARTER
___________________________________
W.L. Carter, President
/S/ W.L. CARTER
___________________________________
W.L. Carter, President and Director
/S/ T.C. COLLINS
___________________________________
T.C. Collins, Secretary and Director
/S/ W.L. CARTER, JR.
________________________________
W.L. Carter, Jr., Director
/S/ CHARLES T. HAGAN, JR.
________________________________
Charles T. Hagan, Jr., Director
ATTEST:
/S/ T.C. COLLINS
____________________________
T.C. Collins, Secretary
Sworn to and subscribed by W.L. Carter, T.C. Collins, W.L. Carter, Jr.,
and Charles T. Hagan, Jr., this 27th day of November, 1956.
/S/ MARY H. KENNEDY
___________________________________
Notary Public
My commission expires: May 25, 1957
_____________
NORTH CAROLINA
GUILFORD COUNTY
Be it remembered, that on this 27th day of November, A.D. 1956, before
me, the subscriber, a Notary Public, personally appeared T.C. Collins,
Secretary of the Southern Life Insurance Company, the corporation mentioned in
and which executed the foregoing certificate, who, being by me duly sworn, on
his oath says that he is such Secretary, and that the seal affixed to said
certificate is the corporate seal of said corporation, the same being
well-known to him; that W.L. Carter is President of said corporation, and
signed said certificate and affixed said seal thereto, and delivered said
certificate by authority of the Board of Directors.
And he further says that said certificate is signed and sworn to by the
President and Secretary and a majority of the Board of Directors of said
corporation.
/S/ MARY H. KENNEDY
________________________________________
Notary Public
My Commission Expires May 25, 1957
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I, Charles F. Gold, Commissioner of Insurance in and for the State of
North Carolina, do hereby certify that I have examined the foregoing and
attached "CERTIFICATE OF INCREASE OF ISSUED CAPITAL STOCK OF SOUTHERN LIFE
INSURANCE COMPANY", Greensboro, North Carolina, which increases the issued
capital stock of this company from Fifty Thousand (50,000) shares at the par
value of Ten ($10) Dollars per share to ONE HUNDRED THOUSAND (100,000) shares
at a par value of ten ($10) Dollars per share as heretofore authorized in the
Certificate of Incorporation of this corporation, and I find that it complies
with the requirements of law, and I hereby approve the said increase in issued
capital stock of the company, and certify the same to the Honorable Secretary
of State, as required by law.
In testimony whereof, I have hereunto set my hand and affixed my official
seal at the city of Raleigh, this the 28th day of November A.D. 1956.
/S/ CHARLES F. GOLD
____________________________________
Commissioner of Insurance
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I, JOHN RANDOLPH INGRAM, Commissioner of Insurance in and for the State
of North Carolina, do hereby certify that I have examined the attached
Articles of Amendment of the Charter of Southern Life Insurance Company,
Greensboro, North Carolina, dated September 28, 1973, increasing the
authorized Capital Stock from 100,000 shares of a par value of $10.00 per
share, to 200,000 shares of a like par value whereof 100,000 shares are
presently issued and outstanding, and since the Amendment conforms to the
Corporation Laws of North Carolina, I hereby approve and certify the same unto
the Office of the Secretary of State of North Carolina, for filing as required
by law.
In testimony whereof, I have hereunto set my hand and affixed my official
seal at the city of Raleigh, this the 29th day of November A.D. 1973.
/S/ JOHN RANDOLPH INGRAM
____________________________________
Commissioner of Insurance
ARTICLES OF AMENDMENT
OF
SOUTHERN LIFE INSURANCE COMPANY
The undersigned Corporation hereby executes these Articles of Amendment
for the purpose of amending its Charter:
I.
The name of this Corporation is Southern Life Insurance Company.
II.
At the annual meeting of the Board of Directors held on May 12, 1973,
which meeting was duly held pursuant to notice and at which all Directors were
present, the following resolution to increase the authorized capital stock of
the Corporation was proposed, seconded, and unanimously adopted:
"BE IT RESOLVED, that the Certificate of Incorporation of this Company
be amended by striking out Section 4 in its entirety and inserting lieu
thereof the following:
"'4. The authorized capital stock is Two Million ($2,000,000.00)
Dollars divided into Two Hundred Thousand (200,000) shares of the par
Value of Ten ($10.00) Dollars per share.'"
III.
The proposed amendment to the Charter of the Corporation as set forth in
the immediately preceding paragraph was in all respects adopted and approved
by the shareholders of the Corporation at a special meeting of the
shareholders, at which a quorum was present, duly called and held on the 11th
day of August, 1973.
IV.
The total number of shares of the Corporation outstanding and entitled to
vote at said special meeting of shareholders was One Hundred Thousand
(100,000), all of one class. No other class of shares was entitled to vote as
a class or otherwise.
V.
The number of shares voted for such amendment at said special meeting of
shareholders was Ninety-eight Thousand Seven Hundred Thirty-Nine (98,739),
said number being the total number of shares represented at said meeting in
person or by proxy. No shares were voted against such amendment.
VI.
The aforementioned amendment does not provide for an exchange,
reclassification or cancellation of issued shares.
VII.
The aforementioned amendment does not give rise to dissenter's rights for
the reason that it only increases the total authorized capital of the
Corporation and the total number of shares which the Corporation has authority
to issue.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be duly executed by its corporate officers, all done pursuant to
corporate authority duly conferred, this the 28th day of September, 1973.
SOUTHERN LIFE INSURANCE COMPANY
By /S/ W. L. CARTER, JR.
___________________________________
President
Attest:
/S/ T.C. COLLINS, JR.
________________________________
Secretary
NORTH CAROLINA
GUILFORD COUNTY
I. W.L. Carter, Jr., do hereby declare that I signed the annexed Articles
of Amendment of Southern Life Insurance Company, as President of said
Corporation, and for and on its behalf, pursuant to corporate authority duly
given, and that the statements contained therein are true to the best of my
knowledge, information and belief.
This the 28th day of September, 1973.
/S/ W.L. CARTER, JR.
__________________________________
President
Southern Life Insurance Company
Sworn to and subscribed before
me this the 28th day of
September, 1973.
/S/ RUBY B. JACKSON
____________________________
Notary Public
My commission expires:
December 19, 1974
_____________________________
NORTH CAROLINA
GUILFORD COUNTY
I, T.C. Collins, Jr., do hereby declare that I signed the annexed Articles
of Amendment of Southern Life Insurance Company as Secretary of said
Corporation, and for and on its behalf, pursuant to corporate authority duly
given, and that the statements contained therein are true to the best of my
knowledge, information and belief.
This the 28th day of September, 1973.
/S/ T. C. COLLINS, JR.
________________________________________
Secretary
Southern Life Insurance Company
Sworn to and subscribed before
me this the 28th day of September,
1973.
/S/ RUBY B. JACKSON
__________________________________
Notary Public
My commission expires:
December 19, 1974
__________________________________
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I, JOHN RANDOLPH INGRAM, Commissioner of Insurance in and for the State
of North Carolina, do hereby certify that I have carefully examined the
attached December 21, 1973 Certificate of Increase of (Issued) Capital Stock
of Southern Life Insurance Company, Greensboro, North Carolina, from 100,000
shares of the par value of Ten ($10.00) Dollars per share to 200,000 shares of
like par value, and since the said increase and the facts of the transaction
conform to G.S. 58-83, I hereby approve said Certificate for filing with the
Office of the Secretary of State of North Carolina, whereupon the Company may
then transact business upon the Capital as increased from $1,000,000 to
$2,000,000.
In testimony whereof, I have hereunto set my hand and affixed my official
seal at the city of Raleigh, this the 4th day of January A.D. 1974.
/S/ JOHN RANDOLPH INGRAM
____________________________________
Commissioner of Insurance
CERTIFICATE OF INCREASE OF CAPITAL STOCK
OF
SOUTHERN LIFE INSURANCE COMPANY
GREENSBORO, NORTH CAROLINA
The undersigned Corporation, in accordance with Section 58-83 of the
General Statutes of North Carolina, executes this Certificate setting forth
the amount of the increase of capital stock of the Corporation and the facts
of the transaction:
The name of this Corporation is Southern Life Insurance Company.
RESOLUTION OF DIRECTORS
The Board of Directors of Southern Life Insurance Company, a North
Carolina corporation with its principal office and place of business in
Greensboro, North Carolina, at its annual meeting held on May 12, 1973,
adopted the following resolutions:
"RESOLVED, by the Board of Directors of Southern Life Insurance Company,
Greensboro, North Carolina, in meeting duly called and assembled and at which
all members of the Board of Directors were present, that the Board of
Directors is of the opinion and so recommends to the stockholders of Southern
Life Insurance Company that it is deemed advisable to amend the Certificate of
Incorporation of this Company to increase the authorized capital stock of the
Company from One Million ($1,000,000.00) Dollars divided into One Hundred
Thousand (100,000) shares of the par value of Ten ($10.00) Dollars per share
to Two Million ($2,000,000.00) Dollars divided into Two Hundred Thousand
(200,000) shares of the par value of Ten ($10.00) Dollars per share and to
that end and to accomplish said purpose:
"BE IT RESOLVED that the Certificate of Incorporation of this Company be
amended by striking out Section 4 in its entirety and inserting in lieu
thereof the following:
"'4. The authorized capital stock is Two Million
($2,000,000.00) Dollars divided into Two Hundred Thousand
(200,000) shares of the par value of Ten ($10.00) Dollars
per share.'
"BE IT RESOLVED, that the Board of Directors is of the opinion and so
recommends to the stockholders of Southern Life Insurance Company that it is
advisable that the issued and outstanding capital stock of this Company be
increased from One Hundred Thousand (100,000) shares at a par value of Ten
($10.00) Dollars per share to Two Hundred Thousand (200,000) shares at a par
value of Ten ($10.00) Dollars per share and that upon the filing of Articles
of Amendment to the Charter of this Corporation whereby the authorized capital
stock is increased to Two Million ($2,000,000.00) Dollars that this increase
in the issued and outstanding capital stock be effected by the transfer of One
Million ($1,000,000.00) Dollars from the unassigned surplus account of the
Corporation to the capital stock account of this corporation and that One
Hundred Thousand (100,000) shares of stock of the par value of Ten ($10.00)
Dollars be issued on a pro rata basis and as a stock dividend to stockholders
of this Corporation of record as of the 11th day of August, 1973.
"BE IT FURTHER RESOLVED, that the officers of the Company be, and they
are hereby, authorized, empowered, and directed to take any and all steps and
to do any and all acts that may be deemed necessary or advisable to carry out
these resolutions.
"BE IT FURTHER RESOLVED, that a special meeting of the stockholders
of this Company be, and it is hereby, called to meet at the home office of the
Company in Greensboro, North Carolina, on Saturday, the 11th day of August,
1973, at 10:00 a.m. to take action on these resolutions."
The proposed Amendment to the Charter of the Corporation by the terms of
which the authorized capital stock of the Corporation was increased to Two
Million ($2,000,000.00) Dollars divided into Two Hundred Thousand (200,000)
shares of the par value of Ten ($10.00) Dollars per share was in all respects
adopted and approved by the shareholders of the Corporation at a special
meeting of the shareholders, at which a quorum was present, duly called and
held on the 11th day of August, 1973. Articles of Amendment reflecting the
increase in authorized capital stock of Southern Life Insurance Company were
submitted by the Company to the Honorable John Randolph Ingram, Commissioner
of Insurance, who on November 29, 1973, approved the said Articles of
Amendment and certified them unto the office of the Secretary of State of
North Carolina, and said Articles of Amendment were filed in the office of the
Honorable Thad Eure, Secretary of State of North Carolina on November 30,
1973.
CERTIFICATE OF CHANGE
Southern Life Insurance Company, a North Carolina corporation with its
principal office and place of business in Greensboro, North Carolina, does
hereby certify that at a special meeting of its shareholders, at which a
quorum was present, duly called and held on the 11th day of August, 1973, the
shareholders of Southern Life Insurance Company adopted the following
resolutions:
"BE IT RESOLVED, that, upon the filing of Articles of Amendment to
the Charter of this Corporation whereby the authorized capital stock is
increased to Two Million ($2,000,000.00) Dollars, the issued and outstanding
capital stock of this Company be increased from One Hundred Thousand (100,000)
shares at a par value of Ten ($10.00) Dollars per share to Two Hundred
Thousand (200,000) shares at a par value of Ten ($10.00) Dollars per share and
that this increase in the issued and outstanding capital stock be effected by
the transfer of One Million ($1,000,000.00) Dollars from the unassigned
surplus account of this Corporation to the capital stock account of this
Corporation and that One Hundred Thousand (100,000) shares of stock of the par
value of Ten ($10.00) Dollars be issued on a pro rata basis and as a stock
dividend to stockholders of this Corporation of record as of the 11th day of
August, 1973.
"BE IT FURTHER RESOLVED, that the officers of the Company be, and
they are hereby authorized, empowered, and directed to take any and all steps
and to do any and all acts that may be deemed necessary or advisable to carry
out these resolutions."
The total number of shares of the Corporation outstanding and entitled to
vote at said special meeting of the shareholders was One Hundred Thousand
(100,000), all of one class. No other class of shares was entitled to vote as
a class or otherwise. The number of shares voted for the foregoing resolutions
at said special meeting of shareholders was Ninety-eight Thousand Seven
Hundred Thirty-nine (98,739), said number being the total number of shares
represented at said meeting in person or by proxy.
It is further certified that pursuant to said resolutions One Million
($1,000,000.00) Dollars was transferred from the unassigned surplus account of
this Corporation to the capital stock account of said Corporation and that on
the 12th day of December, 1973, One Hundred Thousand (100,000) shares of stock
of the par value of Ten ($10.00) Dollars per share were issued on a pro rata
basis and as a stock dividend to the stockholders of said Corporation of
record as of the 11th day of August, 1973.
IN WITNESS WHEREOF, said Corporation has caused this Certificate to be
signed by its President and Secretary and by a majority of its five (5)
Directors, and its corporate seal to be hereto affixed this the 21st day of
December, 1973.
SOUTHERN LIFE INSURANCE COMPANY
By /S/ W.L. CARTER, JR.
---------------------------
W.L. Carter, Jr., President
Attest:
/S/ T.C. COLLINS, JR.
--------------------------
T.C. Collins, Jr., Secretary
(Affix Corporate Seal) /S/ W.L. CARTER, JR.
---------------------------
W.L. Carter, Jr., President and Director
/S/ VIRGINIA BLAIR CARTER HAGAN
---------------------------------
Virginia Blair Carter Hagan, Director
/S/ CHARLES T. HAGAN, JR.
------------------------------
Charles, T. Hagan, Jr., Director
NORTH CAROLINA
GUILFORD COUNTY
Be it remembered, that on this 21st day of December, A.D. 1973, before
me, the subscriber, a Notary Public, personally appeared T.C. Collins, Jr.,
Secretary of the Southern Life Insurance Company, the corporation mentioned in
and which executed the foregoing certificate, who, being by me duly sworn, on
his oath says that he is such Secretary, and that the seal affixed to said
certificate is the corporate seal of said corporation, the same being well
known to him; that W.L. Carter, Jr., is President of said corporation, and
signed said certificate and affixed said seal thereto, and delivered said
certificate by authority of the Board of Directors.
And he further says that said certificate is signed and sworn to by the
President and Secretary and a majority of the Board of Directors of said
Corporation.
/S/ HILDA D. PASCHAL
____________________________________
Notary Public
My commission expires:
Nov. 14, 1974
________________________
Sworn to and subscribed by W.L. Carter, Jr., Virginia Blair Carter Hagan,
and Charles T. Hagan, Jr., this 21st day of December, 1973.
/S/ HILDA D. PASCHAL
____________________________________
Notary Public
My commission expires:
Nov. 14, 1974
________________________
ARTICLES OF AMENDMENT
OF
SOUTHERN LIFE INSURANCE COMPANY
The undersigned Corporation hereby executes these Articles of Amendment
for the purpose of amending its Charter:
I.
The name of this Corporation is Southern Life Insurance Company.
II.
At a regular meeting of the Board of Directors held February 9, 1974,
which meeting was duly held pursuant to notice and at which all Directors were
present, the following resolution to increase the authorized capital stock of
the Corporation was proposed, seconded, and unanimously adopted:
"BE IT RESOLVED, that the Certificate of Incorporation of this Company
be amended by striking out Section 4 in its entirety and inserting in lieu
thereof the following:
"4. The authorized capital stock is Ten Million ($10,000,000.00)
Dollars divided into One Million (1,000,000) shares of the par
Value of Ten ($10.00) Dollars per share."
III.
The proposed amendment to the Charter of the Corporation as set forth in
the immediately preceding paragraph was in all respects adopted and approved
by the shareholders of the Corporation at the annual meeting of the
shareholders, at which a quorum was present, duly called and held on the 11th
day of May, 1974.
IV.
The total number of shares of the Corporation outstanding and entitled to
vote at said special meeting of shareholders was Two Hundred Thousand
(200,000), all of one class. No other class of shares was entitled to vote as
a class or otherwise.
V.
The number of shares voted for such amendment at said special meeting of
shareholders was One Hundred Ninety-nine Thousand Seven Hundred Seventy-six
(199,776), said number being the total number of shares represented at said
meeting in person or by proxy. No shares were voted against such amendment.
VI.
The aforementioned amendment does not provide for an exchange,
reclassification or cancellation of issued shares.
VII.
The aforementioned amendment does not give rise to dissenter's rights for
the reason that it only increases the total authorized capital of the
Corporation and the total number of shares which the Corporation has authority
to issue.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be duly executed by its corporate officers, all done pursuant to
corporate authority duly conferred, this the 14th day of May, 1974.
SOUTHERN LIFE INSURANCE COMPANY
By /S/ W. L. CARTER, JR.
___________________________________
President
Attest:
/S/ T.C. COLLINS, JR.
________________________________
Secretary
NORTH CAROLINA
GUILFORD COUNTY
I. W.L. Carter, Jr., do hereby declare that I signed the annexed Articles
of Amendment of Southern Life Insurance Company, as President of said
Corporation, and for and on its behalf, pursuant to corporate authority duly
given, and that the statements contained therein are true to the best of my
knowledge, information and belief.
This the 14th day of May, 1974.
/S/ W.L. CARTER, JR.
__________________________________
President
Southern Life Insurance Company
Sworn to and subscribed before
me this the 14th day of
May, 1974.
/S/ HILDA D. PASCHAL
____________________________
Notary Public
My commission expires:
November 14, 1974
_____________________________
NORTH CAROLINA
GUILFORD COUNTY
I, T.C. Collins, Jr., do hereby declare that I signed the annexed Articles
of Amendment of Southern Life Insurance Company as Secretary of said
Corporation, and for and on its behalf, pursuant to corporate authority duly
given, and that the statements contained therein are true to the best of my
knowledge, information and belief.
This the 14th day of May, 1974.
/S/ T. C. COLLINS, JR.
________________________________________
Secretary
Southern Life Insurance Company
Sworn to and subscribed before
me this the 14th day of May,
1974.
/S/ HILDA D. PASCHAL
__________________________________
Notary Public
My commission expires:
November 14, 1974
__________________________________
STATE OF NORTH CAROLINA
INSURANCE DEPARTMENT
RALEIGH
I, JOHN RANDOLPH INGRAM, Commissioner of Insurance in and for the State
of North Carolina, do hereby certify that I have examined the attached
Articles of Amendment of the Charter of SOUTHERN LIFE INSURANCE COMPANY,
Greensboro, North Carolina, dated May 14, 1974, increasing the authorized
Capital Stock from 200,000 shares of a par value of Ten ($10.00) Dollars per
share, to 1,000,000 shares of a like par value whereof 200,000 shares are
presently issued and outstanding, and since the Amendment conforms to the
Corporation Laws of North Carolina, I hereby approve and certify the same unto
the Office of the Secretary of State of North Carolina, for filing as required
by law.
In testimony whereof, I have hereunto set my hand and affixed my official
seal at the city of Raleigh, this the 22nd day of May A.D. 1974.
/S/ JOHN RANDOLPH INGRAM
____________________________________
Commissioner of Insurance
ARTICLES OF AMENDMENT
OF
SOUTHERN LIFE INSURANCE COMPANY
The undersigned Corporation hereby executes these Articles of Amendment
for the purpose of amending its Charter:
I.
The name of this Corporation is Southern Life Insurance Company.
II.
At the annual meeting of the Board of Directors held on June 28, 1989,
which meeting was duly held pursuant to notice and at which all Directors were
present, the following resolution to change the name of the Corporation was
proposed, seconded, and unanimously adopted:
"BE IT RESOLVED, that the Certificate of Incorporation of this Company be
amended by striking out Section 1 in its entirety and inserting lieu thereof
the following:
"1. The name of this Corporation is LONDON PACIFIC LIFE & ANNUITY
COMPANY."
III.
The proposed amendment to the Charter of the Corporation as set forth in
the immediately preceding paragraph was in all respects adopted and approved
by the shareholders of the Corporation at a special meeting of the
shareholders, at which a quorum was present, duly called and held on the 30th
day of June, 1989.
IV.
The total number of shares of the Corporation outstanding and entitled to
vote at said special meeting of shareholders was Two Hundred Thousand
(200,000), all of one class. No other class of shares was entitled to vote as
a class or otherwise.
V.
The number of shares voted for such amendment at said special meeting of
shareholders was Two Hundred Thousand (200,000), said number being the total
number of shares represented at said meeting in person or by proxy. No shares
were voted against such amendment.
VI.
The aforementioned amendment does not provide for an exchange,
reclassification or cancellation of issued shares.
VII.
The aforementioned amendment does not give rise to dissenter's rights.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be duly executed by its corporate officers, all done pursuant to
corporate authority duly conferred, this 30th day of June, 1989.
SOUTHERN LIFE INSURANCE COMPANY
By /S/ CLIFFORD N. GAMBLE
___________________________________
President
Attest:
/S/ TIMOTHY A. MENEZES
________________________________
Timothy A. Menezes
Secretary
STATE OF CALIFORNIA
COUNTY OF SACRAMENTO
This is to certify that on this 30th day of June, 1989, before me, a notary
public, personally appeared Clifford N. Gamble and Timothy A. Menezes, each of
whom, being by me first duly sworn, declared that he signed the foregoing
document in the capacity indicated, that he was authorized so to sign, and
that the statements therein contained are true.
Witness my hand and official seal, this 30th day of June, 1989.
/S/ BONNIE J. BRIDGE
__________________________________
NOTARY PUBLIC
(SEAL)
MY COMMISSION EXPIRES: August 31, 1992
_______________
CERTIFICATE OF SECRETARY OF
THE LONDON PACIFIC ASSURANCE GROUP LIMITED
The undersigned secretary of The London Pacific Assurance Group
Limited ("Corporation") hereby certifies that the following resolutions were
duly adopted on June 28, 1989 by the Board of Directors of Corporation and
have not been amended, modified or rescinded:
RESOLVED, that Alan R. Wolen is hereby appointed as an officer of
the Corporation in the capacity as Assistant Secretary with a term expiring on
July 31, 1989.
RESOLVED FURTHER, that each officer is hereby severally authorized
and directed to take all action and execute all documents otherwise necessary
to effect the transactions contemplated by the Stock Purchase Agreement
entered into by and between the Corporation and Liberty Life Insurance Company
on June 13, 1989.
RESOLVED FURTHER, that effective upon the closing of the aforesaid
transactions pursuant to which this Corporation shall become the sole
shareholder of Southern Life Insurance Company, the following persons are
appointed to constitute the board of directors of said company:
Arthur R. Trueger (Chairman)
Clifford N. Gamble
Timothy A. Menezes
Robert Cornman
RESOLVED FURTHER, that the Corporation's officers are hereby
severally authorized and empowered to prepare and execute all further
instruments and documents and to take all such further action necessary to
effectuate these resolutions.
IN WITNESS WHEREOF, I have executed this certificate on the 28th day
of June, 1989.
/S/ TIMOTHY A. MENEZES
____________________________________
Timothy A. Menezes
Secretary
DEPARTMENT OF INSURANCE
State of North Carolina
P.O. Box 26387
Raleigh, NC 27611
I, James E. Long, Commissioner of Insurance in and for the State of North
Carolina, do hereby certify that I have examined the attached June 30, 1989,
Articles of Amendment to the Charter of Southern Life Insurance Company,
Greensboro, North Carolina, and find the same in conformity with the laws
pertaining thereto and do hereby approve the said Amendment and certify the
same to the Honorable Secretary of State of the State of North Carolina.
In testimony whereof, I have hereunto set my hand and affixed my official seal
at the city of Raleigh, this the 30th day of June A.D. 1989.
Commissioner of Insurance
By: /S/ KATHY H. SYKES
________________________________
Kathy H. Sykes
Administrator
Financial Compliance Section
ARTICLES OF AMENDMENT
OF
LONDON PACIFIC LIFE & ANNUITY COMPANY
The undersigned Corporation hereby executes these Articles of Amendment
for the purpose of amending its Charter:
I.
The name of this Corporation is London Pacific Life & Annuity Company.
II.
The Board of Directors recommended and the shareholders approved the
following amendment to Section 2 of the Articles:
"2. The location of the principal office of the corporation in the
State of North Carolina shall be at Raleigh; provided, however, that it may
have such other branch offices and places of business, both in and out of the
state, as its Board of Directors may deem advisable."
III.
Pursuant to Section 55-10-03 of the North Carolina Business Corporation
Act, the proposed amendment to the Charter of the Corporation as set forth in
the immediately preceding paragraph was in all respects adopted and approved
by the shareholders by unanimous written consent, acting without a meeting.
IV.
The total number of shares of the Corporation outstanding and entitled to
vote was Two Hundred Thousand (200,000), all of one class. No other class of
shares was entitled to vote as a class or otherwise.
V.
The number of shares voted for such amendment was Two Hundred Thousand
(200,000), said number being the total number of shares represented at said
meeting in person or by proxy. No shares were voted against such amendment.
VI.
The aforementioned amendment does not provide for an exchange,
reclassification or cancellation of issued shares.
VII.
The aforementioned amendment does not give rise to dissenter's rights.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be duly executed by its corporate officers, all done pursuant to
corporate authority duly conferred, this 29th day of October, 1990.
LONDON PACIFIC LIFE & ANNUITY COMPANY
By /S/ CLIFFORD N. GAMBLE
___________________________________
President
Attest:
/S/ TIMOTHY A. MENEZES
________________________________
Timothy A. Menezes
Secretary
STATE OF CALIFORNIA
COUNTY OF SACRAMENTO
This is to certify that on this 29th day of October, 1990, before me, a notary
public, personally appeared Clifford N. Gamble and Timothy A. Menezes, each of
whom, being by me first duly sworn, declared that he signed the foregoing
document in the capacity indicated, that he was authorized so to sign, and
that the statements therein contained are true.
Witness my hand and official seal, this 29th day of October, 1990.
/S/ BONNIE J. BRIDGE
__________________________________
NOTARY PUBLIC
MY COMMISSION EXPIRES: August 31, 1992
_______________
DEPARTMENT OF INSURANCE
State of North Carolina
P.O. Box 26387
Raleigh, NC 27611
I, James E. Long, Commissioner of Insurance in and for the State of North
Carolina, do hereby certify that I have examined the attached October 29,
1990, Articles of Amendment of the Articles of Incorporation of London Pacific
& Life Annuity Company, Greensboro, North Carolina, and find the same in
conformity with the laws pertaining thereto and do hereby approve the said
Amendment and certify the same to the Honorable Secretary of State of the
State of North Carolina.
In testimony whereof, I have hereunto set my hand and affixed my official seal
at the city of Raleigh, this the 16th day of November, 1990.
Commissioner of Insurance
By: /S/ KATHY H. SYKES
________________________________
Kathy H. Sykes
Administrative Assistant
Financial Compliance Section
Blazzard, Grodd & Hasenauer, P.C.
943 Post Road East
Westport, CT 06880
203/226-7866
May 22, 1996
Board of Directors
London Pacific Life & Annuity Company
3109 Poplarwood Court
Raleigh, North Carolina 27604
RE: Opinion of Counsel - LPLA Separate Account One
Gentlemen:
You have requested our Opinion of Counsel in connection with the filing with
the Securities and Exchange Commission of a Pre-Effective Amendment to a
Registration Statement on Form N-4 for the Individual Fixed and Variable
Deferred Annuity Contracts with Flexible Contributions (the "Contracts") to
be issued by London Pacific Life & Annuity Company and its separate account,
LPLA Separate Account One.
We have made such examination of the law and have examined such records and
documents as in our judgement are necessary or appropriate to enable us to
render the opinions expressed below.
We are of the following opinions:
1. London Pacific Life & Annuity Company is a valid and existing stock life
insurance company of the state of North Carolina.
2. LPLA Separate Account One is a separate investment account of London
Pacific Life & Annuity Company created and validly existing pursuant to the
North Carolina insurance laws and regulations thereunder.
3. Upon acceptance of purchase payments made by an Owner pursuant to a
Contract issued in accordance with the prospectus contained in the
Registration Statement and upon compliance with applicable law, such an Owner
will have a legally-issued, fully paid, non-assessable contractual interest in
such Contract.
You may use this opinion letter, or a copy hereof, as an exhibit to the
Registration Statement.
We consent to the reference to our firm under the caption "Legal Opinions"
contained in the Statement of Additional Information which forms a part of the
Registration Statement.
Sincerely,
BLAZZARD, GRODD & HASENAUER, P.C.
BY: /S/ LYNN KORMAN STONE
___________________________
Lynn Korman Stone
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Pre-Effective Amendment No. 1 to the registration
statement on Form N-4 of LPLA Separate Account One of our report dated
February 8, 1996, relating to the statutory basis financial statements of
London Pacific Life & Annuity Company, which appears in such Statement of
Additional Information. We also consent to the reference to us under the
heading "Experts" in such Statement of Additional Information.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
Raleigh, North Carolina
May 17, 1996
