File Nos. 33-
811-8890
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 2 [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.
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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.
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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
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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
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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.
INQUIRIES:
Any inquiries can be made by telephone or in writing to the Annuity Service
Center listed above.
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
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
APPENDIX
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
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 who are
60 years of age or older in California, 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 cancelling Accumulation Units from each applicable
Sub-Account. 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. The charge will be deducted from the Fixed
Account and the Sub-Accounts in the same proportion that the amount of
Contract Value in the Fixed Account and each Sub-Account bears to the total
Contract Value. 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 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."
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)
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SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Charge 1.25%
Administrative Charge .15%
Distribution Charge .10%
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Total Separate Account Annual Expenses 1.50%
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LPT VARIABLE INSURANCE SERIES TRUST ANNUAL EXPENSES
(as a percentage of the average daily net assets of a Portfolio)
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Management Other Total Annual
Fees Expenses Expenses*
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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 the
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 Potfolio'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 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. Without such
expense reimbursements, the "Total Annual Expenses" would be higher. The
Company has reserved the right to withdraw or modify its policy of expense
reimbursements. The Examples below are calculated based upon such expense
reimbursement arrangements.
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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.
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Time Periods
1 year 3 years
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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
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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 three 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 cancelling 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. 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 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. 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.
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.
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
is $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
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 advisor 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
cancelled. 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
theValuation 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 if during the Accumulation
Period) 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 after a partial
withdrawal is $500. The minimum Contract Value which must remain in 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, the Issue Date. The Systematic Withdrawal
Option can be exercised at any time, including during the first Contract Year.
Systematic withdrawal is 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 seven year Contract Anniversary
or the Adjusted Contributions as of the most recent seven 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 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 - the 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 attained 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 Payment 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 Fixed and Variable Annuities are 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 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.
The dollar amount of the first Variable Annuity payment is determined in
accordance with the description above. 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 for each applicable
Sub-Account 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 each 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.
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 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 any asset-based charges and any
applicable Contract Maintenance Charge.
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 an
investment medium over a period of time, usually a calendar year, determined
by dividing the increase (decrease) in value for that Unit by the Accumulation
Unit value at the beginning of the period. This percentage figure will
reflect the deduction of any asset-based charges and any applicable Contract
Maintenance Charges under the Contracts.
Any advertisement will also include total return figures calculated as
described in the Statement of Additional Information. The total return
figures reflect the deduction of any applicable Contract Maintenance Charge,
as well as any asset-based charges.
The Company has decided to make available yield information with respect to
some of the Sub-Accounts. Such yield information will be calculated as
described in the Statement of Additional Information. The yield information
will reflect the deduction of any applicable Contract Maintenance Charge as
well as any asset-based charges.
The Company may also show historical Accumulation Unit values in certain
advertisements containing illustrations. These illustrations will be based on
actual Accumulation Unit values.
In addition, the Company may distribute sales literature which compares the
percentage change in Accumulation Unit values for any of the Sub-Accounts
against established market indices such as the Standard & Poor's 500 Composite
Stock Price Index, the Dow Jones Industrial Average or other management
investment companies which have investment objectives similar to the
underlying Portfolio being compared. The Standard & Poor's 500 Composite
Stock Price Index is an unmanaged, unweighted average of 500 stocks, the
majority of which are listed on the New York Stock Exchange. The Dow Jones
Industrial Average is an unmanaged, weighted average of thirty blue chip
industrial corporations listed on the New York Stock Exchange. Both the
Standard & Poor's 500 Composite Stock Price Index and the Dow Jones Industrial
Average assume quarterly reinvestment of dividends.
In addition, the Company may, as appropriate, compare each Sub-Account's
performance to that of other types of investments such as certificates of
deposit, savings accounts and U.S. Treasuries, or to certain interest rate and
inflation indices, such as the Consumer Price Index, which is published by the
U.S. Department of Labor and measures the average change in prices over time
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 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 advisor regarding withholding requirements.
TAX TREATMENT OF WITHDRAWALS - NON-QUALIFIED CONTRACTS
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the Contract Value exceeds the aggregate
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. Owners, Annuitants and Beneficiaries are cautioned that benefits
under a Qualified Contract may be subject to the terms and conditions of the
plan regardless of the terms and conditions of the Contracts issued pursuant
to the plan. 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 and the Separate Account 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.
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 OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
ITEM PAGE
Company.............................................................. 3
Experts.............................................................. 3
Legal Opinions....................................................... 3
Distributor.......................................................... 3
Yield Calculation for the Salomon Money Market Sub-Account........... 3
Performance Information.............................................. 4
Annuity Provisions................................................... 6
Financial Statements................................................. 6
<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.
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 __________________, 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 Salomon Money Market Sub-Account has yet to commence business.
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 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 Trust
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>
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.
(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.
PART C
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
A. FINANCIAL STATEMENTS
Financial Statements will be included in a Pre-Effective Amendment.
B. EXHIBITS
<TABLE>
<CAPTION>
<C> <S>
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 (to be filed by Amendment).
10. Consent of Independent Accountants (to be filed by Amendment).
11. Not Applicable.
12. Not Applicable.
13. Not Applicable.
14. Not Applicable.
15. Company Organizational Chart.
</TABLE>
# Incorporated by reference to Registrant's initial registration on
Form N-4 (File No. 811-8890) filed on December 12,1994.
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 is included herein as Exhibit 15.
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 Chairman and Director
1755 Creekside Oaks Drive
Sacramento, CA 95833
Jerry T. Tamura President and Chief Executive Officer
1755 Creekside Oaks Drive
Sacramento, CA 95833
George C. Nicholson Treasurer
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 8th
day of March, 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 March 7, 1996
- --------------------- Chairman of the Board and Director -------------
Arthur I. Trueger Date
/s/ IAN K. WHITEHEAD March 7, 1996
- --------------------- President, Chief Executive Officer -------------
Ian K. Whitehead and Director Date
/s/ GEORGE C. NICHOLSON March 7, 1996
- ----------------------- Chief Financial Officer, Secretary -------------
George C. Nicholson and Director Date
</TABLE>
INDEX TO EXHIBITS
EXHIBIT PAGE
99.B1. Resolution of Board of Directors of the Company authorizing
the establishment of the Separate Account
99.B3. Form of Principal Underwriter's Agreement
99.B4. Individual Fixed and Variable Deferred Annuity Contract
99.B4(i) Enhanced Death Benefit Endorsement
99.B5. Application Form
99.B6.(ii) Copy of the Bylaws of the Company
99.B15. Company Organizational Chart
EXHIBIT 99.B1
LONDON PACIFIC LIFE & ANNUITY COMPANY
RESOLUTION
VARIABLE ANNUITY CONTRACTS
WHEREAS, the Company is desirous of developing and marketing certain
types of variable and fixed annuity contracts which may be required to be
registered with the Securities and Exchange Commission pursuant to the various
securities laws; and
WHEREAS, it will be necessary to take certain actions including, but not
limited to, establishing separate accounts for segregation of assets and
seeking approval of regulatory authorities;
NOW THEREFORE, BE IT RESOLVED, that the Company is hereby authorized to
develop the necessary program in order to effectuate the issuance and sale of
variable and fixed annuity contracts; and further
RESOLVED, that the Company is hereby authorized to establish and to
designate one or more separate accounts of the Company in accordance with the
provisions of state insurance law. The purpose of any such separate account
shall be to provide an investment medium for such variable and fixed annuity
contacts issued by the Company as may be designated as participating therein.
Any such separate account shall receive, hold, invest and reinvest only the
monies arising from (i) premiums, contributions or payments made pursuant to
the variable and fixed annuity contracts participating therein; (ii) such
assets of the Company as shall be deemed appropriate to be invested in the
same manner as the assets applicable to the Company's reserve liability under
the variable and fixed annuity contracts participating in such separate
accounts; or as may be necessary for the establishment of such separate
accounts; (iii) the dividends, interest and gains produced by the foregoing;
and further
RESOLVED, FURTHER, that the proper officers of the Company are hereby
authorized:
(i) to register the variable and fixed annuity contracts participating in
such separate accounts under the provisions of the Securities Act of 1933 to
the extent that it shall be determined that such registration is necessary;
(ii) to register any such separate accounts with the Securities and
Exchange Commission under the provisions of the Investment Company Act of 1940
to the extent that it shall be determined that such registration is necessary;
(iii) to prepare, execute and file such amendments to any registration
statements filed under aforementioned Acts (including post-effective
amendments), supplements and exhibits thereto as they may be deemed necessary
or desirable;
(iv) to apply for exemption from those provisions of the aforementioned
Acts as shall be deemed necessary and to take any and all other actions which
shall be deemed necessary, desirable, or appropriate in connection with such
Acts;
(v) to file the variable and fixed annuity contracts participating in any
such separate accounts with the appropriate state insurance departments and to
prepare and execute all necessary documents to obtain approval of the
insurance departments;
(vi) to prepare or have prepared and execute all necessary documents to
obtain approval of, or clearance with, or other appropriate actions required,
of any other regulatory authority that may be necessary; and further
RESOLVED, FURTHER, that in connection with the offering and sale of the
fixed and variable annuity contracts in the various States of the United
States, as and to the extent necessary, the appropriate officers of the
Company be, and they hereby are, authorized to take any and all such action,
including but not limited to the preparation, execution and filing with proper
State authorities, on behalf of and in the name of the Company, of such
applications, notices, certificates, affidavits, powers of attorney, consents
to service of process, issuer's covenants, certified copies of minutes of
shareholders' and directors' meetings, bonds, escrow and impounding agreements
and other writings and instruments, as may be required in order to render
permissible the offering the sale of the fixed and variable annuity contracts
in such jurisdictions; and further
RESOLVED, FURTHER, that the forms of any resolutions required by any
State authority to be filed in connection with any of the documents or
instruments referred to in any of the preceding resolutions be, and the same
hereby are, adopted as if fully set forth herein if(l) in the opinion of the
appropriate officers of the Company, the adoption of the resolutions is
advisable and (2) the Secretary of the Company evidences such adoption by
inserting into these minutes copies of such resolutions: and further
RESOLVED, FURTHER, that the officers of the Company, and each of them,
are hereby authorized to prepare and to execute the necessary documents and to
take such further actions as may be deemed necessary or appropriate, in their
discretion, to implement the purpose of these resolutions.
DATE: November 21, 1994
-----------------
/s/ BRIAN M. LEE
-----------------------
Brian M. Lee, Secretary
EXHIBIT 99.B3
PRINCIPAL UNDERWRITER'S AGREEMENT
IT IS HEREBY AGREED by and between LONDON PACIFIC LIFE & ANNUITY COMPANY
("INSURANCE COMPANY") on behalf of LPLA SEPARATE ACCOUNT ONE (the "Variable
Account") and LONDON PACIFIC FINANCIAL AND INSURANCE SERVICES. ("PRINCIPAL
UNDERWRITER") as follows:
I
INSURANCE COMPANY proposes to issue and sell Individual Fixed and Variable
Deferred Annuity Contracts with flexible Contributions (the "Contracts") of
the Variable Account to the public through PRINCIPAL UNDERWRITER. The
PRINCIPAL UNDERWRITER agrees to provide sales service subject to the terms and
conditions hereof. The Contracts to be sold are more fully described in the
registration statement and prospectus hereinafter mentioned. Such Contracts
will be issued by INSURANCE COMPANY through the Variable Account.
II
INSURANCE COMPANY grants PRINCIPAL UNDERWRITER the exclusive right, during the
term of this Agreement, subject to registration requirements of the Securities
Act of 1933 and the Investment Company Act of 1940 and the provisions of the
Securities Exchange Act of 1934, to be the distributor of the Contracts issued
through the Variable Account. PRINCIPAL UNDERWRITER will sell the Contracts
under such terms as set by INSURANCE COMPANY and will make such sales to
purchasers permitted to buy such Contracts as specified in the prospectus.
III
PRINCIPAL UNDERWRITER shall be compensated for its distribution services in
such amount as to meet all of its obligations to selling broker-dealers with
respect to all Purchase Payments accepted by INSURANCE COMPANY on the
Contracts covered hereby.
IV
On behalf of the Variable Account, INSURANCE COMPANY shall furnish PRINCIPAL
UNDERWRITER with copies of all prospectuses, financial statements and other
documents which PRINCIPAL UNDERWRITER reasonably requests for use in
connection with the distribution of the Contracts. INSURANCE COMPANY shall
provide to PRINCIPAL UNDERWRITER such number of copies of the current
effective prospectuses as PRINCIPAL UNDERWRITER shall request.
V
PRINCIPAL UNDERWRITER is not authorized to give any information, or to make
any representations concerning the Contracts or the Variable Account of
INSURANCE COMPANY other than those contained in the current registration
statements or prospectuses relating to the Variable Account filed with the
Securities and Exchange Commission or such sales literature as may be
authorized by INSURANCE COMPANY.
VI
Both parties to this Agreement agree to keep the necessary records as
indicated by applicable state and federal law and to render the necessary
assistance to one another for the accurate and timely preparation of such
records.
VII
Agreement shall be effective upon the execution hereof and will remain in
effect unless terminated as hereinafter provided. This Agreement shall
automatically be terminated in the event of its assignment by PRINCIPAL
UNDERWRITER.
This Agreement may at any time be terminated by either party hereto upon 60
days' written notice to the other party.
VIII
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed to have been given on the date of
service if served personally on the party to whom notice is to be given, or on
the date of mailing if sent by First Class Mail, Registered or Certified,
postage prepaid and properly addressed.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed on their behalf by their respective officers thereunto duly authorized.
EXECUTED this ____ day of ___________, 199_.
<TABLE>
<CAPTION>
<S> <C>
INSURANCE COMPANY
LONDON PACIFIC LIFE & ANNUITY
COMPANY
BY:_______________________________
ATTEST:________________________
Secretary
PRINCIPAL UNDERWRITER
LONDON PACIFIC FINANCIAL AND
INSURANCE SERVICES.
BY:_______________________________
ATTEST:________________________
Secretary
</TABLE>
EXHIBIT 99.B4
MAILING ADDRESS: Post Office Box 29564, Raleigh, North Carolina 27626-0564
HOME OFFICE: 3109 Poplarwood Court, Raleigh, North Carolina 27604
(919) 790-2243
LONDON PACIFIC LIFE & ANNUITY COMPANY (the "Company") in consideration of the
payment of the initial Contribution issued this Contract.
RIGHT TO EXAMINE CONTRACT: Within 10 days of the date of receipt of this
Contract by the Owner, it may be returned by delivering or mailing it to the
Company at its Annuity Service Center. When the Contract is received by the
Company, it will be voided as if it has never been in force. The Company will
refund the Contract Value, computed at the end of the Valuation Period during
which this Contract is received by the Company at its Annuity Service Center.
THIS IS A LEGAL CONTRACT BETWEEN THE OWNER AND THE COMPANY
READ YOUR CONTRACT CAREFULLY
George C. Nicholson, Ian K. Whitehead,
Secretary President
INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACT
WITH FLEXIBLE CONTRIBUTIONS
NONPARTICIPATING
ANNUITY PAYMENTS, WITHDRAWAL VALUES AND THE DEATH BENEFITS PROVIDED BY THIS
CONTRACT, WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE
VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
TABLE OF CONTENTS
PAGE
CONTRACT SCHEDULE
DEFINITIONS
CONTRIBUTION PROVISIONS
Contributions
Allocation Of Contributions
SEPARATE ACCOUNT PROVISIONS
The Separate Account
Valuation Of Assets
Accumulation Units
Accumulation Unit Value
Mortality And Expense Risk Charge
Distribution Charge
Enhanced Death Benefit Charge
FIXED ACCOUNT
Fixed Account
CONTRACT VALUE
CONTRACT MAINTENANCE CHARGE
Deduction For Contract Maintenance Charge
TRANSFERS
Transfers During The Accumulation Period
Transfers During The Annuity Period
WITHDRAWAL PROVISIONS
Withdrawals
Contingent Deferred Sales Charge
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
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION
OWNER, ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISIONS
Owner
Joint Owner
Annuitant
Assignment Of The Contract
ANNUITY PROVISIONS
General
Annuity Date
Selection Of An Annuity Option
Frequency And Amount Of Annuity Payments
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
Annuity
Fixed Annuity
Variable Annuity
Annuity Unit
Mortality Tables
GENERAL PROVISIONS
The Contract
Misstatement Of Age
Incontestability
Modification
Non-Participating
Evidence Of Survival
Proof Of Age
Protection Of Proceeds
Reports
Taxes
Regulatory Requirements
ANNUITY TABLES
CONTRACT SCHEDULE
OWNER: [John Smith] AGE AND SEX: [50 Male]
ANNUITANT: [John Smith] AGE AND SEX: [50 Male]
CONTRACT NUMBER: [12345] ISSUE DATE: [July 01, 1995]
ANNUITY DATE: [July 01, 2010]
CONTRIBUTIONS:
INITIAL CONTRIBUTION: [$10,000 Non-Qual; $1,000 IRA]
MINIMUM SUBSEQUENT CONTRIBUTION: [$1,000; or if the periodic investment
plan is elected: $100]
MAXIMUM TOTAL CONTRIBUTIONS: [$1M without Company approval except for
issue ages greater than 75 for which the maximum total contribution is
$500,000]
ALLOCATION GUIDELINES:
[1. There are no limitations on the number of Sub-Accounts that can be
selected by an Owner.
2. Allocations must be in whole percentages with 10% of each
Contribution or transfer as a minimum, unless the Contribution or transfer is
being made pursuant to an approved Dollar Cost Averaging Program or an
approved Asset Allocation Program.
3. If the Contribution and forms required to issue a Contract are in
good order, the initial Contribution will be credited to the Contract within
two (2) business days after receipt at the Annuity Service Center. Additional
Contributions will be credited to the Contract as of the Valuation Period when
they are received.]
BENEFICIARY:
[As designated by the Owner at the Issue Date, unless subsequently changed.]
CONTRACT MAINTENANCE CHARGE:
[The Contract Maintenance Charge is currently $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 pro-rata from Annuity Payments regardless of Contract size and will
result in a reduction of each Annuity Payment.]
MORTALITY AND EXPENSE RISK CHARGE:
[The Mortality and Expense Risk Charge is equal, on an annual basis, to 1.25%
of the average daily net asset value of each Sub-Account of the Separate
Account.]
ADMINISTRATIVE CHARGE:
[The Administrative Charge is equal, on an annual basis, to .15% of the
average daily net asset value of each Sub-Account of the Separate Account.]
DISTRIBUTION CHARGE:
[The Distribution Charge is equal, on an annual basis, to .10% of the average
daily net asset value of each Sub-Account of the Separate Account.]
ENHANCED DEATH BENEFIT CHARGE:
[The current Enhanced Death Benefit Charge is 0.]
TRANSFERS:
NUMBER OF TRANSFERS: [Subject to any restrictions imposed on transfers by
the Company, there are currently no restrictions on the number of transfers
that can be made. The Company reserves the right to further limit the number
of transfers in the future.]
TRANSFER FEE: [The Transfer Fee is the lesser of $20.00 or 2% of the
amount transferred. Currently, the Company does not assess a Transfer Fee on
the first 12 transfers in a Contract Year. Transfers made at the end of the
Right to Examine Contract period by the Company and any transfers made
pursuant to an approved Dollar Cost Averaging Program or pursuant to an
approved Asset Allocation Program will not be counted in determining the
application of the Transfer Fee.]
MINIMUM AMOUNT TO BE TRANSFERRED: [$500 (from (i) one or multiple
Sub-Accounts; or (ii) the Fixed Account if during the Accumulation Period) or
the Owner's entire interest in the Sub-Account or the Fixed Account, if less.
Transfers made pursuant to an approved Dollar Cost Averaging Program or
pursuant to an approved Asset Allocation Program will not be subject to these
limitations.]
MINIMUM AMOUNT WHICH MUST REMAIN IN A SUB-ACCOUNT AFTER A TRANSFER:
[$500; or $0 if the entire amount in the Sub-Account is transferred. Transfers
made pursuant to an approved Dollar Cost Averaging Program or pursuant to an
approved Asset Allocation Program will not be subject to this limitation.]
MINIMUM AMOUNT WHICH MUST REMAIN IN THE FIXED ACCOUNT AFTER A TRANSFER:
[1. $500, or
2. $0 if the entire amount in any Guarantee Period is transferred.
3. Transfers made from any Guarantee Period pursuant to an approved
Dollar Cost Averaging Program or pursuant to an approved Asset Allocation
Program will not be subject to these limitations.]
WITHDRAWALS:
CONTINGENT DEFERRED SALES CHARGE: [NONE}
FREE WITHDRAWAL: [Currently, not applicable.]
MINIMUM PARTIAL WITHDRAWAL: [$500]
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN THE CONTRACT AFTER A PARTIAL
WITHDRAWAL: [$2,000]
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN A SUB-ACCOUNT AFTER A PARTIAL
WITHDRAWAL: [$500]
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN THE FIXED ACCOUNT AFTER A PARTIAL
WITHDRAWAL: [$500]
ELIGIBLE FUNDS: SUB-ACCOUNTS:
[LPT Variable Insurance Series Trust]
[Strong Growth Portfolio Strong Growth Sub-Account]
[MAS Value Portfolio MAS Value Sub-Account]
[Berkeley Smaller Companies Portfolio Berkeley Smaller Companies
Sub-Account]
[Lexington Corporate Leaders Lexington Corporate Leaders
Portfolio Sub-Account]
[Strong International Stock Portfolio Strong International Stock
Sub-Account]
[Salomon U.S. Quality Bond Salomon U.S. Quality Bond
Portfolio Sub-Account]
[Salomon Money Market Salomon Money Market
Portfolio Sub-Account]
[MFS Total Return Portfolio MFS Total Return Sub-Account]
SEPARATE ACCOUNT: [LPLA Separate Account One]
FIXED ACCOUNT:
Minimum Guaranteed Interest Rate: [3%]
Initial Guaranteed Interest Rate: [X%]
RIDERS: [Enhanced Death Benefit Endorsement]
[IRA Endorsement]
ANNUITY SERVICE CENTER:
London Pacific Life & Annuity Company or London Pacific Life & Annuity Company
Annuity Service Center Annuity Service Center
P.O. Box 29564 3109 Poplarwood Court
Raleigh, North Carolina 27626 Raleigh, North Carolina 27604
(800) 852-3152
(919) 790-2243
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 an 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. The Annuity Date is
shown on the Contract Schedule.
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 RESERVES: The assets which the Company has determined support the
Annuity Option selected by the Owner during the Annuity Period.
ANNUITY SERVICE CENTER: The office indicated on the Contract Schedule of this
Contract to which notices, requests and Contributions must be sent. All sums
payable by the Company under this 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 a 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 Contingent Deferred Sales Charge, 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 this
Contract.
EFFECTIVE DATE: The date the Company declares a Guaranteed Interest Rate for a
specified Guarantee Period. The Initial Guaranteed Interest Rate for the
selected Guarantee Period is shown on the Contract Schedule.
ELIGIBLE FUND: An investment entity shown on the Contract Schedule.
FIXED ACCOUNT: An investment option within the General Account where the
Company guarantees the rate of interest for the specified Guarantee Period.
FIXED ANNUITY: A series of payments made during the Annuity Period which are
guaranteed as to dollar amount by the Company.
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.
GENERAL ACCOUNT: The Company's general investment account which contains all
the assets of the Company with the exception of the Separate Account and other
segregated asset accounts.
ISSUE DATE: The date on which the Contract became effective. The Issue Date is
shown on the Contract Schedule.
OWNER: The person or entity entitled to the ownership rights stated in this
Contract.
PORTFOLIO: A segment of an Eligible Fund which constitutes a separate and
distinct class of shares. Portfolios which are available for investment by the
Sub-Accounts under this Contract are shown on the Contract Schedule.
PREMIUM TAX: Any premium taxes paid to any governmental entity and assessed
against Contributions or Contract Value.
SEPARATE ACCOUNT: The Company's Separate Account designated on the Contract
Schedule.
SUB-ACCOUNT: Separate Account assets are divided into Sub-Accounts which are
listed on the Contract Schedule. 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.
CONTRIBUTION PROVISIONS
CONTRIBUTIONS : The initial Contribution is due on the Issue Date. Subject to
the maximum and minimum amounts shown on the Contract Schedule, the Owner may
make subsequent Contributions and may increase or decrease or change the
frequency of such Contributions. The Company reserves the right to reject any
Application or Contribution.
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
and must be in accordance with the Allocation Guidelines set forth on the
Contract Schedule. Unless otherwise changed by the Owner, subsequent
Contributions are allocated in the same manner as the initial Contribution.
Allocation of the Contributions is subject to the terms and conditions imposed
by the Company. The Company has reserved the right to allocate initial
Contributions to the Money Market Sub-Account until the expiration of the
Right to Examine Contract period.
SEPARATE ACCOUNT PROVISIONS
THE SEPARATE ACCOUNT : The Separate Account is designated on the Contract
Schedule and consists of assets set aside by the Company, which are kept
separate from that of the general assets and all other separate account assets
of the Company. The assets of the Separate Account equal to reserves and other
liabilities will not be charged with liabilities arising out of any other
business the Company may conduct.
The Separate Account assets are divided into Sub-Accounts. The Sub-Accounts
which are available under this Contract are listed on the Contract Schedule.
The assets of the Sub-Accounts are allocated to the Eligible Funds(s) and the
Portfolio(s), if any, within an Eligible Fund, shown on the Contract Schedule.
The Company may, from time to time, add an additional Eligible Fund(s) or
Portfolio(s) to those shown on the Contract Schedule. The Owner may be
permitted to transfer Contract Values or allocate Contributions to the
additional Sub-Account(s) within the Separate Account. However, the right to
make such transfers or allocations will be limited by the terms and conditions
imposed by the Company.
Should the shares of any such Eligible Fund(s) or any Portfolio(s) within an
Eligible Fund become unavailable for investment by the Separate Account, or
the Company's Board of Directors deems further investment in these shares
inappropriate, the Company may limit further purchase of such shares or
substitute shares of another Eligible Fund or Portfolio for shares already
purchased under this Contract.
VALUATION OF ASSETS : The assets of the Separate Account are valued at their
fair market value in accordance with procedures of the Company.
ACCUMULATION UNITS : Accumulation Units shall be used to account for all
amounts allocated to or withdrawn from the Sub-Accounts of the Separate
Account as a result of Contributions, withdrawals, transfers, or fees and
charges. The Company will determine the number of Accumulation Units of a
Sub-Account purchased or cancelled. 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, for the Distribution Charge, and for
the Enhanced Death Benefit Charge, if any, which are shown on the Contract
Schedule; and
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.
MORTALITY AND EXPENSE RISK CHARGE : Each Valuation Period, the Company deducts
a Mortality and Expense Risk Charge from each Sub-Account of the Separate
Account which is equal, on an annual basis, to the amount shown on the
Contract Schedule. The Mortality and Expense Risk Charge compensates the
Company for assuming the mortality and expense risks under this Contract.
ADMINISTRATIVE CHARGE: Each Valuation Period, the Company deducts an
Administrative Charge from each Sub-Account of the Separate Account which is
equal, on an annual basis, to the amount shown on the Contract Schedule. The
Administrative Charge compensates the Company for the costs associated with
the administration of this Contract and the Separate Account.
DISTRIBUTION CHARGE : Each Valuation Period, the Company deducts a
Distribution Charge from each Sub-Account of the Separate Account which is
equal, on an annual basis, to the amount shown on the Contract Schedule. The
Distribution Charge compensates the Company for the costs associated with the
distribution of the Contracts.
ENHANCED DEATH BENEFIT CHARGE : If an Enhanced Death Benefit Option has been
issued pursuant to this Contract, each Valuation Period the Company deducts an
Enhanced Death Benefit Charge from the Separate Account which is equal, on an
annual basis, to the amount shown on the Contract Schedule. The Enhanced Death
Benefit Charge compensates the Company for assuming the mortality risks for
the Enhanced Death Benefit Option Endorsement attached to this Contract.
FIXED ACCOUNT
FIXED ACCOUNT : Initial Contributions allocated to the Fixed Account are
credited at the Initial Guaranteed Interest Rate for the Guarantee Period. The
Initial Guaranteed Interest Rate is shown on the Contract Schedule. During the
thirty (30) days prior to the end of the Guarantee Period, the Owner may renew
the Guarantee Period or transfer all or a portion of the amount to the
Separate Account. Upon renewal, the Guaranteed Interest Rate will be the
greater of: (1) the Company's Guaranteed Interest Rate in effect on the
Contract Anniversary date or, (2) the Minimum Guaranteed Interest Rate shown
on the Contract Schedule. If the Owner does not specify a transfer to the
Separate Account, the amount will be renewed for a new Guarantee Period. All
interest payable under the Contract is compounded annually on a daily basis.
The Fixed Account value of a Contract at any time is equal to:
1. the Contributions allocated to the Fixed Account: plus
2. the Contract Value transferred to the Fixed Account: plus
3. interest credited to the Contract Value in the Fixed Account: less
4. any withdrawals of a Contract Value in the Fixed Account, any
Contingent Deferred Sales Charge and the Contract Maintenance Charge, if any;
less
5. any Contract Value transferred from the Fixed Account; less
6. any applicable Premium Taxes or Transfer Fees.
Any subsequent Contributions and transfers to the Fixed Account will be
allocated to the remaining term of the Guarantee Period, and receive a
credited rate of the greater of: (1) the Company's Guaranteed Interest Rate in
effect on the date of the Contribution or transfer, or (2) the Minimum
Guaranteed Interest Rate.
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.
Withdrawals will result in the cancellation of Accumulation Units in a
Sub-Account or a reduction in the Fixed Account, as applicable.
CONTRACT MAINTENANCE CHARGE
DEDUCTION FOR CONTRACT MAINTENANCE CHARGE : On each Contract Anniversary the
Company will deduct a Contract Maintenance Charge from the Contract Value to
reimburse it for expenses relating to maintenance of this Contract. 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 Contract Maintenance Charge is deducted from the Separate
Account by cancelling Accumulation Units from each applicable Sub-Account. The
Contract Maintenance Charge is shown on the Contract Schedule. During the
Accumulation Period, the Contract Maintenance Charge will be deducted from the
Contract Value on each Contract Anniversary while this Contract is in force.
If a total withdrawal is made on other than a Contract Anniversary, the full
Contract Maintenance Charge will be deducted at the time of withdrawal. During
the Annuity Period, the Contract Maintenance Charge will be deducted from
Annuity Payments and will result in a reduction of each Annuity Payment.
TRANSFERS
TRANSFERS DURING THE ACCUMULATION PERIOD : Subject to any limitation imposed
by the Company on the number of transfers during the Accumulation Period shown
on the Contract Schedule, 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 shown on the Contract Schedule for the Contract Year. All
transfers are subject to the following:
1. If more than the number of free transfers, shown on the Contract
Schedule, have been made in a Contract Year, the Company will deduct a
Transfer Fee, shown on the Contract Schedule, for each subsequent transfer
permitted. 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. A transfer from the Fixed
Account is made for a Contract with multiple Contributions during the
Guarantee Period by a transfer from the Contribution with the most recent
Effective Date.
2. The minimum amount which can be transferred is shown on the Contract
Schedule. The minimum amounts which must remain in a Sub-Account and in the
Fixed Account are shown on the Contract Schedule.
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.
If the Owner elects to use this transfer privilege, the Company will not be
liable for transfers made in accordance with the Owner's instructions. All
amounts and Accumulation Units will be determined as of the end of the
Valuation Period during which the request for transfer is received at the
Annuity Service Center.
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 Value between Sub-Accounts,
subject to any limitation imposed by the Company on the number of transfers
shown on the Contract Schedule. If more than the number of free transfers,
shown on the Contract Schedule, have been made in a Contract Year, the Company
will deduct a Transfer Fee, shown on the Contract Schedule, for each
subsequent transfer permitted. The Transfer Fee will be deducted from the
amount which is transferred.
2. The Owner may once each Contract year, make a transfer from one or
more Sub-Accounts 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 from a Sub-Account is
shown on the Contract Schedule. The minimum amount which must remain in a
Sub-Account is shown on the Contract Schedule.
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.
If the Owner elects to use this transfer privilege, the Company will not be
liable for transfers made in accordance with the Owner's instructions. All
amounts and Annuity Unit Values will be determined as of the end of the
Valuation Period during which the request for transfer is received at the
Annuity Service Center.
WITHDRAWAL PROVISIONS
WITHDRAWALS : During the Accumulation Period, the Owner may, upon 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 from the Separate Account
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 is taken first from the Contract Withdrawal Value for
which the Free Withdrawal provision applies and then from the Contract
Withdrawal Value for which a Contingent Deferred Sales Charge is applied. 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 an amount which is not less than the
amount shown on the Contract Schedule. The minimum Contract Value which must
remain in a Sub-Account, or in the Fixed Account, after a partial withdrawal
is shown on the Contract Schedule.
CONTINGENT DEFERRED SALES CHARGE : Upon a withdrawal of the unliquidated
Contribution a Contingent Deferred Sales Charge as set forth on the Contract
Schedule will be assessed. The Contingent Deferred Sales Charge will not be
assessed under certain circumstances as set forth on the Contract Schedule
under "Free Withdrawal."
PROCEEDS PAYABLE ON DEATH
DEATH OF OWNER DURING THE ACCUMULATION PERIOD : Upon the death of the Owner,
or 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 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 : The death benefit 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 less any applicable Contingent Deferred Sales Charge determined
at the time the death benefit is paid.
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 - the 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 single 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 an 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; or
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). A change may 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.
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION
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 payments from the Fixed
Account for a period of up to six months.
OWNER, ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISIONS
OWNER : The Owner has all interest and right 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.
JOINT OWNER : A 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 spouse will be the Primary Beneficiary. Any
other Beneficiary designation will be treated as a Contingent Beneficiary
unless otherwise indicated in a Written Request.
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 OF THE CONTRACT : 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.
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 at the Issue Date.
The Annuity Date is shown on the Contract Schedule. 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
attained 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 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 Options 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 Payment
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 Fixed and Variable
Annuities are 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 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 guarantee period, he/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/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. If no Annuity Option is
selected, Option B will automatically be applied. 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.
ANNUITY : If the Owner selects a Fixed Annuity, the Adjusted Contract Value is
allocated to the General 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 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.
The amount of the first payment for each $1,000 of Adjusted Contract Value is
shown in the Annuity Tables. If, as of the Annuity Date, the current Annuity
Option rates applicable to this class of Contracts provide an initial Annuity
Payment greater than that guaranteed under the same Annuity Option under a
Contract, the greater payment will be made.
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 shall be determined in accordance with Annuity Tables contained in
this 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.
The dollar amount of the first Variable Annuity Payment is determined in
accordance with the description above. 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 for each applicable
Sub-Account 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 by subtracting (2) from (1) and dividing the result by
(3) and dividing the result by the Assumed Investment Rate Factor (1.04 raised
to a power equal to the number of years in the current valuation period),
which neutralizes the assumed net investment rate which is built into the
annuity rate tables and which is not applicable because the actual net
investment rate is credited instead. Where:
1. is the net result of:
a. the assets of the Sub-Account attributable to Annuity Units; plus
or minus
b. the cumulative charges 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, for the Distribution Charge, if any,
and for the Enhanced Death Benefit Charge, if any, which are shown on the
Contract Schedule; and
3. is the number of Annuity Units outstanding at the end of the Valuation
Period.
The value of an Annuity Unit may increase or decrease from Valuation Period to
Valuation Period.
MORTALITY TABLES : The Annuity Tables contained in the Contract utilize an
Assumed Investment Rate of 4% for the determination of the initial Variable
Annuity Payment and a minimum guaranteed rate of 3% per year for the
determination of the monthly Fixed Annuity Payment.
The mortality table used in determining the Annuity Purchase Rates for Options
A, B, and C is the 1983 IAM Table, with Projection Scale G.
The dollar amount of an Annuity Payment for any Age or combination of Ages not
shown in the Tables or for any other form of Annuity Option agreed to by the
Company will be provided by the Company upon request.
GENERAL PROVISIONS
THE CONTRACT : The entire Contract consists of this Contract, the Application,
if any, and any riders or endorsements attached to this Contract.
This Contract may be changed or altered only by the President or Vice
President and the Secretary of the Company. A change or alteration must be
made in writing.
MISSTATEMENT OF AGE : If the Age of any Annuitant has been misstated, any
Annuity benefits payable will be the Annuity benefits provided by the correct
Age. After Annuity Payments have begun, any underpayments will be made up in
one sum with the next Annuity Payment. Any overpayments will be deducted from
future Annuity Payments until the total is repaid.
INCONTESTABILITY : This Contract will not be contestable after it has been in
force for a period of two years from the Issue Date.
MODIFICATION : This Contract may be modified in order to maintain compliance
with applicable state and federal law.
NON-PARTICIPATING : This Contract will not share in any distribution of
dividends.
EVIDENCE OF SURVIVAL : The Company may require satisfactory evidence of the
continued survival of any person(s) on whose life Annuity Payments are based.
PROOF OF AGE : The Company may require evidence of Age of any Annuitant or
Owner.
PROTECTION OF PROCEEDS : To the extent permitted by law, death benefits and
Annuity Payments shall be free from legal process and the claim of any
creditor if the person is entitled to them under this Contract. No payment and
no amount under this Contract can be taken or assigned in advance of its
payment date unless the Company receives the Owner's written consent.
REPORTS : At least once each calendar year, the Company will furnish the Owner
with a report showing the Contract Value and any other information as may be
required by law. The Company will also furnish an annual report of the
Separate Account. Reports will be sent to the last known address of the Owner.
TAXES : Any taxes paid to any governmental entity relating to this Contract
will be deducted from the Contribution 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
Contributions; or commencement of Annuity Payments. The Company may, in 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 will deduct
any withholding taxes required by applicable law.
The Company reserves the right to establish a provision for federal income
taxes if it determines, in its sole discretion, that it will incur a tax as a
result of the operation of the Separate Account. The Company will deduct for
any income taxes incurred by it as a result of the operation of the Separate
Account whether or not there was a provision for taxes and whether or not it
was sufficient.
REGULATORY REQUIREMENTS : All values payable under this Contract will not be
less than the minimum benefits required by the laws and regulations of the
states in which this Contract is delivered.
ANNUITY TABLES
FIXED ANNUITY SETTLEMENT OPTIONS
Based on 1983 Individual Annuity Mortality Table with Projection Scale G,
interest at 3% per annum, and the annuitant's issue age, sex and year of
issue.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
OPTION A OPTION B OPTION C OPTION D
Monthly Payments Monthly Payments Monthly Payments Period Certain
Life Only Life & 10 Year Joint & 2/3 Survivor
Certain Male & Female
Number of Monthly
Age Equal Age Years Payments
55 4.23 4.18 3.84 10 9.61
56 4.30 4.25 3.90 11 8.86
57 4.38 4.32 3.96 12 8.23
58 4.46 4.40 4.02 13 7.71
59 4.55 4.48 4.09 14 7.25
60 4.64 4.56 4.16 15 6.86
61 4.74 4.65 4.23 16 6.52
62 4.84 4.75 4.31 17 6.22
63 4.95 4.84 4.39 18 5.96
64 5.07 4.94 4.48 19 5.72
65 5.19 5.05 4.57 20 5.51
66 5.33 5.16 4.67 25 4.70
67 5.47 5.28 4.78 30 4.18
68 5.61 5.40 4.89
69 5.77 5.52 5.01
70 5.94 5.65 5.13
71 6.11 5.78 5.27
72 6.30 5.92 5.41
73 6.49 6.06 5.56
74 6.69 6.20 5.71
75 6.91 6.35 5.88
</TABLE>
Annuitant's Issue Age and Sex: 50, Male
Issue Year: 1995
VARIABLE ANNUITY SETTLEMENT OPTIONS
Based on 1983 Individual Annuity Mortality Table with Projection Scale G, AIR
at 4% per annum, and the annuitant's issue age, sex and year of issue.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
OPTION A OPTION B OPTION C OPTION D
Monthly Payments Monthly Payments Monthly Payments Period Certain
Life Only Life & 10 Year Joint & 2/3 Survivor
Certain Male & Female
Number of Monthly
Age Equal Age Years Payments
55 4.83 4.77 4.44 10 10.05
56 4.90 4.84 4.50 11 9.31
57 4.98 4.91 4.55 12 8.69
58 5.06 4.98 4.62 13 8.16
59 5.14 5.06 4.68 14 7.72
60 5.23 5.14 4.75 15 7.33
61 5.33 5.23 4.82 16 7.00
62 5.43 5.32 4.90 17 6.70
63 5.54 5.42 4.98 18 6.44
64 5.66 5.52 5.07 19 6.21
65 5.79 5.62 5.16 20 6.00
66 5.92 5.73 5.26 25 5.22
67 6.06 5.84 5.36 30 4.71
68 6.21 5.96 5.47
69 6.37 6.08 5.59
70 6.53 6.21 5.71
71 6.71 6.34 5.85
72 6.89 6.47 5.99
73 7.09 6.61 6.14
74 7.29 6.75 6.29
75 7.51 6.89 6.46
</TABLE>
Annuitant's Issue Age and Sex: 50, Male
Issue Year: 1995
INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACT
WITH FLEXIBLE CONTRIBUTIONS
NONPARTICIPATING
ANNUITY PAYMENTS, WITHDRAWAL VALUES AND THE DEATH BENEFITS PROVIDED BY THIS
CONTRACT, WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE
VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
EXHIBIT 99.B4(i)
ENHANCED DEATH BENEFIT ENDORSEMENT
This Endorsement modifies the Contract to which it is attached. The effective
date of this Endorsement is the Issue Date shown on the Contract Schedule. In
the case of a conflict with any provision in the Contract, the provisions of
this Endorsement will control. The following hereby amends and supersedes the
section of the Contract captioned (Proceeds Payable on Death - Death Benefit
Amount During The Accumulation Period).
PROCEEDS PAYABLE ON DEATH
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 determined in accordance with this
Endorsement; 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 seven year Contract Anniversary
or the Adjusted Contributions (determined in accordance with this Endorsement)
as of the most recent seven 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 85 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.
Signed for London Pacific Life & Annuity Company by:
EXHIBIT 99.B5
LONDON PACIFIC LIFE &
ANNUITY COMPANY [LOGO]
POST OFFICE BOX 29564 VARIABLE ANNUITY APPLICATION
RALEIGH, NC 27626-0564 REGENCY SERIES I
INSTRUCTIONS: Please type or print in permanent black ink. This form will be
photocopied.
1. OWNER
______________________________________ SSN or Tax I.D. ____/____/____
Name (First, Middle Initial, Last)
Maximum
______________________________________ Date of birth ___ ____ ___ Age 85
Name/Trustee mo. day yr.
______________________________________ Gender: [ ] Male [ ] Female
Street Address
______________________________________ Daytime phone number ( )________
City State Zip
______________________________________________________________________________
2. JOINT OWNER
(Optional) Spouse Only, Non-Qualified Only
______________________________________ Social Security ____/____/____
Name (First, Middle Initial, Last)
Maximum
______________________________________ Date of birth ___ ____ ___ Age 85
Street Address mo. day yr.
______________________________________ Gender: [ ] Male [ ] Female
City State Zip
Daytime phone number ( )________
______________________________________________________________________________
3. ANNUITANT
(Required) Must be natural person
______________________________________ Social Security ____/____/____
Name (First, Middle Initial, Last)
Maximum
______________________________________ Date of birth ___ ____ ___ Age 85
Street Address mo. day yr.
______________________________________ Annuity Start Date ____ ____ ____
City State Zip mo. day yr.
Relationship to Owner_________________ Gender: [ ] Male [ ] Female
Daytime phone number ( )________
______________________________________________________________________________
4. BENEFICIARY
In the event of death, any surviving joint owner becomes the primary
beneficiary.
Primary______________________________ Relationship____________________
_____________________________________ Relationship____________________
Contingent___________________________ Relationship____________________
______________________________________________________________________________
5. TYPE OF PLAN
[ ] Non-qualified [ ] Qualified:
[ ] Contribution to IRA $_____ Tax Yr.____
[ ] Rollover to IRA
[ ] Direct IRA Transfer
[ ] Simplified Employee Pension IRA
[ ] Employer Contribution
[ ] Employee Contribution
______________________________________________________________________________
6. INVESTMENT
Initial minimum: $10,000
Initial investment amount $________________________
($1000 for qualified plans)
______________________________________________________________________________
7. INVESTMENT ALLOCATION
- Use whole percentages.
- 10% minimum contribution to Sub-Accounts selected.
- Total must equal 100%.
____% Salomon U.S. Bond ____% Berkeley Smaller Co. ____% Fixed Account
____% Strong International ____% Strong Growth
____% MFS Total Return ____% Lexington Corp. Ldr.
____% Salomon Money Market ____% MAS Value
When a return of contribution is required by law during the Right to Examine
Contract period, London Pacific Life & Annuity Company (LPL&A) will allocate
the contribution to the Money Market Sub-Account as described in the
prospectus. Thereafter, contributions will be allocated as directed by the
Owner. Written notification is required to change allocation schedule.
______________________________________________________________________________
8. REPLACEMENT
Will the proposed contract replace any existing annuity or life insurance
policy?
[ ] Yes [ ] No
(If yes, list company name, plan and year of issue in Section 14.)
______________________________________________________________________________
9. SIGNATURES
All statements made in this application (including on the reverse side) are
true to the best of our knowledge and belief, and we agree to all terms and
conditions as shown on the front and back. We further agree that this
application shall be a part of the annuity contract, and verify our
understanding that all payments and values provided by the contract, when
based on investment experience of the Separate Account, are variable and not
guaranteed as to dollar amount. We acknowledge receipt of a current
prospectus. Under penalty of perjury, the owner certifies that the Social
Security (or taxpayer identification) number is correct as it appears in this
application.
Signed at City____________________________ State________________ Date_________
SIGNATURE OF OWNER____________________________________________________________
SIGNATURE OF JOINT OWNER______________________________________________________
SIGNATURE OF ANNUITANT________________________________________________________
______________________________________________________________________________
See reverse side for options including: Dollar Cost Averaging. Telephone
transfer. Systematic Withdrawal program. Periodic investment plan. Note to
representatives: You MUST complete Sections 14 through 18 on the reverse side.
10. DOLLAR COST AVERAGING
- Monthly only.
- Use whole percentages.
- Total must equal 100%.
- 10% minimum to any Sub-Account selected.
- 12-month minimum period.
Provide dollar cost averaging as follows: ($20,000 minimum contract value)
[ ] Future Earnings
[ ] Sub-Account Value over ____ years
[ ] $_____________________ per month (minimum $500)
From (select one):
[ ] Salomon Money Market; [ ] Fixed Account; [ ] Salomon U.S. Bond:
Info: _______% Salomon U.S. Bond ______% Berkeley Smaller Co.
_______% Strong International ______% Strong Growth
_______% MFS Total Return ______% Lexington Corp. Ldr.
_______% MAS Value
Effective Start Date: No sooner than 1 month after policy date or on
_____/_____/_____, if later.
mo. day yr.
Initials of contract owner: ___________ Date______________
______________________________________________________________________________
11. TELEPHONE TRANSFER
(Minimum transfer $500)
[ ] I hereby authorize and direct LPL&A to accept telephone instructions from
any person who can furnish proper identification to exchange values from
Sub-Account and/or Fixed Account to Sub-Account and/or Fixed Account. LPL&A
will employ reasonable procedures to confirm instructions communicated by
telephone are genuine; and if it does not, it may be liable for any loss due
to unauthorized or fraudulent instructions. LPL&A will not be liable for
following instructions communicated by telephone that it reasonably believes
to be genuine.
Initials of contract owner: ___________ Date______________
______________________________________________________________________________
12. SYSTEMATIC WITHDRAWAL PROGRAM
- Amounts in excess of 10% per year of the unliquidated contribution may
be subject to contingent deferred sales charge.
- Minimum payment $100.
Provide systematic withdrawals as follows: ($20,000 minimum contract value)
[ ] Future Earnings
[ ] Sub-Account Value over ____ years
[ ] $_____________________ Pro-Rata from all investment allocations
Withdraw from:
$_______ Salomon U.S. Bond $______ Berkeley Smaller Co.
$_______ Strong International $______ Strong Growth
$_______ MFS Total Return $______ Lexington Corp. Ldr.
$_______ Salomon Money Mkt. $______ MAS Value
$______ Fixed Account
Effective Start Date: No sooner than 1 month after policy date or on
_____/_____/_____, if later.
mo. day yr.
[ ] I do not wish to have federal income tax withheld.
Payment Mode: Send to:
[ ] Annual [ ] Semi-annual [ ] Direct Credit to bank account
(submit voided CHECK)
[ ] Quarterly [ ] Monthly [ ] Payment mailed to address of record
[ ] Other______________________________
(Please note: If the systematic withdrawal is from a specific Sub-Account and
there is no longer any value in this Sub-Account, the systematic withdrawal
program will terminate. New instructions will be required to restart a
program.)
Initials of contract owner: ___________ Date______________
______________________________________________________________________________
13. PERIODIC INVESTMENT PLAN
[ ] Investment amount $_____________. (minimum $100)
Check one: [ ] Semi-annual [ ] Quarterly
[ ] Monthly (EFT only) ATTACH VOIDED CHECK - NO deposit slips.
Effective Start Date: No sooner than 1 month after policy date or on
_____/_____/_____, if later.
mo. day yr.
Initials of contract owner: ___________ Date______________
______________________________________________________________________________
THE FOLLOWING SECTIONS MUST BE COMPLETED BY THE REPRESENTATIVE. PLEASE TYPE OR
PRINT IN PERMANENT BLACK INK.
______________________________________________________________________________
14. INSURANCE IN FORCE
Does this contract replace or change any other life insurance or annuity
in this or any other company? [ ] Yes [ ] No
If yes, please list company name, plan, policy date, and amount below.
Also, complete appropriate state replacement forms, if applicable.
_________________________________________________________________________
_________________________________________________________________________
______________________________________________________________________________
15. ADDITIONAL REMARKS
_________________________________________________________________________
_________________________________________________________________________
______________________________________________________________________________
16. STATEMENT OF ADDITIONAL INFORMATION
[ ] Yes. Please send me a statement of additional information.
______________________________________________________________________________
17. DEALER INFORMATION
___________________________________________ __________________________
Representative name (please print) Representative number
___________________________________________ (____)____________________
Investment dealer name Representative phone
______________________________________________________________________________
18. REPRESENTATIVE SIGNATURE
The representative hereby certifies he/she witnessed the signature(s) in
section 9 and that all information contained in this application is true to
the best of his or her knowledge and belief.
Signature________________________________________ Date______________________
EXHIBIT 99.B6(ii)
BYLAWS OF LONDON PACIFIC LIFE & ANNUITY COMPANY
ARTICLE I - STOCKHOLDERS
Section 1. Annual Meetings. The annual meetings of the stockholders of
the Company shall be held on such day during the first one hundred and fifty
days of the calendar year as the Board of Directors may determine.
Section 2. Special Meetings. Special meetings of the
stockholders may be called at any time by the Board of Directors, the Chairman
of the Board, the President, or upon request of stockholders holding at least
one-tenth of the outstanding stock.
Section 3. Place of Meetings. Each annual and special meeting of the
stockholders shall be held at the principal office of the Company, or at such
other place as shall be designated by the Board of Directors or the officer
calling such meeting.
Section 4. Notice of Meetings. Written or printed notice stating the
place, day and hour of meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be mailed by the
Secretary or an Assistant Secretary not less than ten days before the date of
the meeting, to each stockholder of record, addressed to him at his address as
it appears on the stock books of the Company.
Section 5. Proxies. At a meeting of stockholders, a stockholder may
vote by proxy executed in writing by the stockholder and filed with the
Secretary of the Company, bearing date within eleven months prior to the
meeting unless a longer period is provided therein and is permitted by law.
Section 6. Quorum. A majority of the outstanding shares of the Company,
reported in person or by proxy, shall constitute a quorum at a meeting of
stockholders.
Section 7. Voting. Subject to the provisions of Section 3 of Article VI
hereof, each stockholder shall be entitled to one vote for each share of stock
standing in his name on the books of the Company. Only those whose names
appear as stockholders on the books of the Company, or their proxies or legal
representatives, shall be entitled to vote or to participate in any meeting of
stockholders. A majority of the votes cast shall decide any question that may
come before the meeting, except as otherwise provided by law or by these
Bylaws.
ARTICLE II - DIRECTORS
Section 1. General Powers. The business and property of the Company
shall be managed by the Board of Directors and they shall and may exercise all
powers of the Company except as limited by law and elsewhere by these Bylaws.
They shall have power to make all necessary rules and regulations for their
government and for the regulation of the business of the Company which are not
inconsistent with the charter and these Bylaws, and shall have general
management and control of the Company. The Board of Directors may delegate
from time to time to any committee, officer or agent such power and authority
as permitted by law.
Section 2. Number Tenure and Qualifications. Members of the Board of
Directors shall be elected annually by the vote of the stockholders at the
annual meeting or at a special meeting called for this purpose if for any
reason directors should not be elected at the annual meeting, and shall hold
office until the next annual meeting and until their successors are elected
and qualified. Any vacancy in the Board of Directors caused by death or
resignation may, but need not, be filled by the Directors for the unexpired
term. The number of Directors shall be fixed from time to time by the
stockholders at the annual meeting or at any special meeting called for that
purpose. At any such meeting the stockholders may increase the number of
directors, not to exceed seven and may at the same meeting elect directors to
fill the vacancies resulting therefrom.
Section 3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this By-Law immediately
after, and at the same place as, the annual meeting of stockholders. The Board
of Directors may provide, by resolution, the date and place, either within or
without the State of North Carolina, for the holding of additional regular
meetings without other notice than such resolution.
Section 4. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board, the President, or upon the request
of a majority of the Board, and may be held at such time and place, either
within or without the State of North Carolina, as may be specified in the
notice thereof.
Section 5. Notice of Meetings. Notice of each special meeting of the
Board of Directors, stating the time and the place where the meeting is to be
held, shall be given by the Secretary or an Assistant Secretary by mailing the
same to each director at his residence or business address not less than three
days before such meeting, or by giving the same to him personally or
telegraphing or telephoning the same to him at his residence or business
address not later than the day before the day on which the meeting is to be
held. Any and all requirements for call and notice of meetings may be
dispensed with if all directors are present at the meeting or if those not
present at the meeting shall at any time waive or have waived notice thereof.
Section 6. Quorum and Manner of Acting. A majority of the number of
directors in office shall constitute a quorum for the transaction of business
at any meeting of the Board of Directors. The act of majority of the directors
present at a meeting at which a quorum is present shall be the act of the
Board of Directors.
Section 7. Compensation. The directors shall receive such fees and
expenses for attendance at meetings of the Board, as may be determined by the
Board of Directors; provided, however, that no salaried officer shall receive
a fee for attendance at such meetings.
ARTICLE III - COMMITTEES
Section 1. Committees of the Board. The Board of Directors, by
resolution adopted by a majority of the directors fixed by these bylaws, may
designate two (2) or more directors to constitute an Executive Committee and
such other committees, each of which, to the extent authorized by law and
provided in such resolution, shall have and may exercise all of the authority
of the Board of Directors in the management of the Company. The designation of
any committee and the delegation thereto of authority shall not operate to
relieve the Board of Directors, or any member thereof, of any responsibility
or liability imposed upon it or him by law.
Section 2. General Provisions. The members of any Committee of the
Board shall be elected by the Board of Directors and shall serve at the
pleasure of the Board of Directors. The Board of Directors shall designate the
chairman of each of such committees, or if for any reason the Board shall fail
to designate the chairman, then each committee shall elect its own chairman.
Meetings of each such committee shall be held at such times and places as may
be determined by its chairman or as may be agreed upon by members of the
committee. A quorum at any meeting of either committee shall consist of a
majority of the committee, and any action taken by such committee shall
require the assent of at least a majority of the members who are present.
Notice of meetings shall be given in the same manner as for special meetings
of the Board of Directors. Any action taken by such committees shall be deemed
to be action taken by the Board of Directors and shall be binding on the
Company, but the Board of Directors shall at all times have the power to
reverse and overrule any action taken by such committees, provided that the
exercise of such power by the Board of Directors shall not in any way abrogate
the obligations or duties owing by the Company to third parties who have acted
in reliance on the action taken by such committees. All proceedings by each
such committee and all action taken by each such committee shall be reported
to the Board of Directors at the meeting of the Board of Directors next
following such proceedings or action.
Section 3. Other Committees. There shall be such other committees
consisting of directors, officers and employees of the Company as the
President of the Company may appoint from time to time.
Section 4. Compensation. Members of committees shall receive such fees
and expenses for attendance at committee meetings as may be determined by the
Board of Directors; provided, however, that no salaried officer shall receive
a fee for attendance at such meetings.
ARTICLE IV - OFFICERS
Section 1. Number. The officers of the Company shall be a President,
one or more Vice-Presidents, with such designation of rank or duties as the
Board of Directors may from time to time designate and determine, a Secretary,
a Treasurer, an Actuary, a Controller, and a Medical Director. Such other
officers or assistant officers as may be deemed necessary may be elected or
appointed by the Board of Directors. Any two or more of said offices may be
held by one person at the same time, except that the President may not also be
the Secretary.
Section 2. Election and Tenure. The officers of the Company shall be
elected annually at the first regular meeting of the Board of Directors held
after each annual meeting of stockholders, or at a special meeting called for
that purpose if for any reason officers should not be elected at such first
meeting, and shall hold office until the first regular meeting of the Board of
Directors held after the next annual meeting of stockholders; provided,
however, that any officer may be removed from office by the Board of Directors
at any lawful meeting, and any vacancy in any office, however caused, may be
filled by the Board of Directors at any lawful meeting.
Section 3. Duties of Officers. The Board of Directors shall, from time
to time, in its discretion, designate and prescribe the duties incident to
each office, and it may, at any time, expressly authorize any officer to
perform any duty or function which is usually performed by any other officer.
Section 4. Salaries. The salaries of the officers shall be fixed from
time to time by the Board of Directors. No officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
Company.
ARTICLE V - INDEMNIFICATION OF DIRECTORS AND OFFICERS
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.
ARTICLE VI - CAPITAL STOCK
Section 1. Form of Certificates. All certificates of stock, which shall
be in such form as may be prescribed by the Board of Directors, shall be
signed by the President or a Vice President and by the Treasurer or the
Secretary or an Assistant Secretary, and shall be sealed with the Company's
seal; provided, however, that if the certificate is countersigned by a
transfer agent or any assistant transfer agent, or is registered by a
registrar, other than the corporation itself or an employee of the
corporation, such certificates may be signed with the facsimile signatures of
the officers authorized to execute such certificates and may be sealed with a
facsimile of the seal of the Company. All certificates shall be consecutively
numbered or otherwise identified.
Section 2. Stock Record. The name and address of the person to whom
certificates representing shares of the capital stock are issued, with the
certificate number, number of shares and date of issue, shall be entered on
the stock transfer books of the Company. All certificates surrendered to the
Company for transfer shall be canceled, and no new certificate shall be issued
until the former certificate for a like number of shares shall have been
surrendered and canceled, except that in case of a lost, destroyed or
mutilated certificate, a new one may be issued therefor upon such terms and
indemnity to the Company as the Board of Directors may prescribe.
Section 3. Transfer of Stock. Transfer of shares of the Company shall
be made only on the stock transfer books of the Company by the holder of
record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Company, and on surrender
for cancellation of the certificate for such shares. The person in whose name
shares stand on the books of the Company shall be deemed by the Company to be
the owner thereof for all purposes. The Board of Directors shall have power to
close the stock transfer books of the Company for a period not in excess of
thirty days immediately preceding the date of the meeting of stockholders or
the date for the payment of any dividend or the date for the allotment of
rights or the date when any change or conversion or exchange of capital stock
shall go into effect or for a period not in excess of thirty days in
connection with obtaining the consent of stockholders for any purpose;
provided, however, that in lieu of closing the stock transfer books as
aforesaid the Board of Directors may fix in advance a date not exceeding
thirty days preceding the date of the meeting of stockholders or the date for
the payment of any dividend or the date for the allotment of rights or to
exercise the rights or the date when any such change, conversion or exchange
of capital stock shall go into effect, or a date in connection with obtaining
such consent, as a record date, and in such case only such stockholders as
shall be stockholders of record on the date so fixed shall be entitled to such
notice of and to vote at such meeting, or to receive payment of such dividend
or to receive such allotment of rights or to exercise such rights or to give
such consent, as the case may be, notwithstanding any transfer of any stock on
the books of the corporation after any such record date is fixed as aforesaid.
ARTICLE VII - AMENDMENTS
Section 1. Amendment by Stockholders. These Bylaws may be added to,
amended or repealed, by the majority vote of the entire outstanding stock of
the Company at any regular meeting of the stockholders, or at any special
meeting, where such proposed action has been announced in the call and notice
of such meeting.
Section 2. Amendment by Board of Directors. Subject to the right of the
stockholders to adopt, amend or repeal bylaws, the Board of Directors shall
have the power to adopt, amend or repeal bylaws, by an affirmative vote of a
majority of all directors then holding office, provided that notice of the
proposal to adopt, amend or repeal the bylaws was included in the notice of
the directors meeting at which such action takes place.
EXHIBIT 99.B15
COMPANY ORGANIZATIONAL CHART
GOVETT & COMPANY LIMITED
U.S. CORPORATE ORGANIZATIONAL CHART
London Pacific Group Limited (Jersey, Channel Islands) a publicly traded holding
company which owns 100% of Berkeley (USA) Holdings Limited (California).
BERKELEY (USA) Holdings Limited (California) a company which owns 100%
of the following:
1. Berkeley Institutional Investment, Inc. (California)
2. Berkeley Financial Services Limited (California)
3. The London Pacific Assurance Group Limited (California)
4. BG American Fiduciary Services, Inc. (California)
5. Berkeley International Capital Corporation (California)
6. Berkeley Capital Management Company (California)
LONDON PACIFIC LIFE & ANNUITY COMPANY (North Carolina) is a wholly owned
subsidiary of The London Pacific Assurance Group Limited (California).
LONDON PACIFIC SERVICES COMPANY (California) is a wholly owned subsidiary of
The London Pacific Assurance Group Limited (California).
NORTH AMERICAN TRUST COMPANY (California) is a wholly owned subsidiary of BG
American Fiduciary Services, Inc. (California).
LPIMC INSURANCE MARKETING SREVICES (California) is a wholly owned
subsidiary of London Pacific Life & Annuity Company, Inc. (North Carolina).
LONDON PACIFIC FINANCIAL AND INSURANCE SERVICES (California)is a wholly
owned subsidiary of London Pacific Life & Annuity Company, Inc.
(North Carolina).
