<PAGE>
FILE NO. 33-88632
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO.
TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
------------------
A. Exact name of trust:
COLONIAL SEPARATE ACCOUNT D
B. Name of depositor:
THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA
C. Complete address of depositor's principal executive offices:
One Granite Place
Concord, NH 03301
D. Name and complete address of agent for service:
Ronald R. Angarella
President
Chubb Securities Corporation
One Granite Place
Concord, NH 03301
Copies to:
Charlene Grant, Esq.
The Colonial Life Insurance
Company of America
One Granite Place
Concord, NH 03301
Joan E. Boros, Esq.
Katten Muchin & Zavis
1025 Thomas Jefferson Street, N.W.
East Lobby, Suite 700
<PAGE>
Washington, D.C. 20007
------------------
It is proposed that this filing will become effective (check appropriate box)
[_] immediately upon filing pursuant to paragraph (b)
[_] on May 1, 1996 pursuant to paragraph (b)
[X] 60 days after filing pursuant to paragraph (a)(i)
[_] on (date) pursuant to paragraph (a)(i) of rule (485)
[_] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
E. Title and amount of securities being registered:
Units of Interest in the Separate Account under Group Flexible Premium
Variable Life Insurance and Group Joint and Last Survivor Flexible
Premium Variable Life Insurance Policies.
F. Proposed maximum offering price to the public of the securities being
registered:
Registration of Indefinite Amount of Securities under the Securities Act
of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940.
G. Amount of filing fee:
An indefinite amount of the Registrant's securities has been registered
pursuant to a declaration, under Rule 24f-2 under the Investment Company
Act of 1940, set out in the initial Form S-6 Registration Statement. A
Pursuant to paragraph (b)(2) the issuer need not file a Rule 24f-2 Notice
because it did not sell any securities pursuant to such declarations
during the fiscal year ended December 31, 1995.
H. Approximate date of proposed public offering:
As soon as practicable after the effective date of this Registration
Statement.
Registrant elects to be governed by Rule 6e-3(T)(b)(13)(i)(B) under the
Investment Company Act of 1940, with respect to the policies described in the
Prospectus.
<PAGE>
RECONCILIATION AND TIE BETWEEN ITEMS
IN FORM N-8B-2 AND THE PROSPECTUS
<TABLE>
<CAPTION>
Item No. of
- -----------
Form N-8B-2 Caption of Prospectus
- ----------- --------------------------------------------------------------------------------
<S> <C>
1...... Cover Page
2...... Cover Page
3...... Not Applicable
4...... Distribution of the Group Policies and Certificates
5...... The Colonial Life Insurance Company of America; Colonial Separate Account D
6...... Colonial Separate Account D
7...... Not Required
8...... Not Required
9...... Legal Proceedings
10...... Summary, Colonial Separate Account D; The Group Policies and Certificates;
Certificate Benefits and Rights; Calculation of Accumulation Value; Cash
Value Benefits; Other Matters; Federal Tax Matters
11...... Colonial Separate Account D, Chubb Series Trust
12...... Chubb Series Trust; Distribution of Group Policies and the Certificates
13...... Chubb Series Trust; General; Charges and Deductions; Optional Insurance
Benefits; Distribution of the Group Policies and Certificate
14...... The Group Policies and Certificates
15...... The Group Policies and Certificates
16...... Colonial Separate Account D, Chubb Series Trust
17...... Transfers; Telephone Transfers and Reallocations; Certificate Lapse;
Reinstatement; Certificate "Free Look", Optional Insurance Benefits; Cash
Value Benefits
18...... Colonial Separate Account D
19...... Annual Report; Confirmation
20...... Not Applicable
21...... Certificate Loans
22...... Colonial Separate Account D; Telephone Transfers, Loans and Reallocations
23...... Management of Colonial Life
24...... Not Applicable
25...... The Colonial Life Insurance Company of America
26...... Not Applicable
27...... The Colonial Life Insurance Company of America
28...... The Colonial Life Insurance Company of America; Management of Colonial Life
29...... The Colonial Life Insurance Company of America
30...... Not Applicable
31...... Not Applicable
32...... Not Applicable
</TABLE>
<PAGE>
<TABLE>
<S> <C>
33...... Not Applicable
34...... Not Applicable
35...... The Colonial Life Insurance Company of America
36...... Not Applicable
37...... Not Applicable
38-41... Distribution of the Group Policies and Certificates
42...... Not Applicable
43...... Not Applicable
Item No. of
- -----------
Form N-8B-2 Caption of Prospectus
- ----------- --------------------------------------------------------------------
44...... Chubb Series Trust; The Group Policies and Certificates; Charges and
Deductions; Calculation of Accumulation Value; Cash Value Benefits;
Distribution of the Group Policies and Certificates
45...... Not Applicable
46...... Chubb Series Trust; The Group Policies and Certificates; Charges and
Deductions; Calculation of Accumulation Value; Cash Value Benefits
47...... Not Applicable
48...... Not Applicable
49...... Not Applicable
50...... Colonial Separate Account D
51...... Cover Page; The Group Policies and Certificates; Charges and Deductions;
Certificate Benefits and Rights; Calculation of Accumulation Value; Cash
Value Benefits; Other Matters
52...... Chubb Series Trust; Other Matters
53...... Federal Tax Matters
54...... Not Applicable
55...... Not Applicable
56...... Not Applicable
57...... Not Applicable
58...... Not Applicable
59...... Financial Statements
</TABLE>
<PAGE>
THE CHUBB HERITAGE SERIES
COLONIAL SEPARATE ACCOUNT D
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
And
GROUP JOINT AND LAST SURVIVOR FLEXIBLE
PREMIUM VARIABLE LIFE INSURANCE POLICY
Issued by
The Colonial Life Insurance Company of America
One Granite Place, P.O. Box 2086
Concord, New Hampshire 03301
(800) 997-4499
This Prospectus describes two forms of group flexible premium variable
life insurance policies issued by The Colonial Life Insurance Company of America
("Colonial Life"): a group flexible premium variable life insurance policy
form ("Colonial Heritage I") and a group joint and last survivor flexible
premium variable life insurance policy form ("Colonial Heritage II")
(collectively the "Group Policy" or "Group Policies"). The persons and legal
entities covered under the Group Policy (the "Certificate Owners") possess all
rights and interests under the Group Policy. The Certificate Owners are provided
with certificates of insurance ("Certificates") describing each Certificate
Owner's rights, benefits, and options under the Group Policy. The Certificates
are designed to provide a Certificate Owner with both lifetime insurance
protection and maximum flexibility in connection with premium payments and Death
Benefits, together with the opportunity to participate in the investment
experience of Colonial Separate Account D ("Separate Account D"). Although
each Certificate contains a schedule of intended premium payments ("Planned
Periodic Premiums"), and an intended frequency of premium payments ("Premium
Frequency"), a Certificate Owner may, subject to certain restrictions, vary the
frequency and amount of the premium payments and increase or decrease the level
of life insurance benefits payable under the Certificate. The flexibility allows
a Certificate Owner to provide for changing insurance needs within the framework
of a single insurance policy. Unlike traditional insurance protection providing
fixed benefits, the Certificate Owner participates in the investment experience
of Separate Account D. Accumulation Value under the Certificates will increase
with positive investment experience and decrease with negative investment
experience. Accumulation Value in Separate Account D is not guaranteed and could
decline to zero.
<PAGE>
A Certificate issued under Colonial Heritage I provides life insurance
coverage on one Insured, with the Death Benefit payable at the Insured's death.
A Certificate issued under Colonial Heritage II provides life insurance coverage
on two Insureds, with the Death Benefit payable upon the death of the last
surviving Insured. If Net Premiums are allocated to Separate Account D, the
amount of the Death Benefit may reflect the investment experience of the chosen
Divisions, as well as the frequency and amount of premiums, any withdrawals of
Cash Value, and the charges assessed in connection with the Certificate. As long
as the Certificate remains in force, the Death Benefit will not be less than the
current Specified Amount of the Certificate, reduced by any outstanding
indebtedness and any due and unpaid fees and charges. The minimum initial
Specified Amount is $500,000 for Colonial Heritage I and $2,000,000 for Colonial
Heritage II. After a withdrawal, the Specified Amount may not be reduced to less
than $250,000 for Colonial Heritage I and $500,000 for Colonial Heritage II.
The Death Benefit is payable under two options. The Certificate Owner
will make two elections to determine the Death Benefit under the Certificate.
First, the Certificate Owner will choose one of two Death Benefit options
offered under the Certificate. Second, the Certificate Owner will choose the
Death Benefit qualification test, which is the method for qualifying the
Certificate as a life insurance contract for purposes of Federal tax law. In
general, under Death Benefit Option I, the Death Benefit payable under the
Certificate is equal to the current Specified Amount; under Death Benefit Option
II, the Death Benefit equals the current Specified Amount plus the Accumulation
Value of the Certificate on the date of death. The Certificate will also
increase the Death Benefit if necessary to ensure that the Certificate will
continue to qualify as life insurance under Federal tax laws. The Certificate
Owner may not change the Death Benefit qualification test once selected but may,
subject to certain restrictions, change from one death benefit option to the
other after the Certificate has been issued.
The initial premium payment must be sufficient to keep the Certificate
in force for at least three months. If a Certificate Owner chooses the
Guaranteed Death Benefit Rider, the Death Benefit will be guaranteed to never be
less than the Specified Amount, provided that a cumulative minimum premium
requirement is met. No premium payment may be less than $500.
The Certificate will remain in force so long as Cash Value exceeds
indebtedness and Cash Value less indebtedness is sufficient to pay certain
monthly charges imposed in connection with the Certificate. The Cash Value
equals the Accumulation Value less any Surrender Charge. Accumulation Value in
Separate Account D will reflect the investment experience of the chosen
Divisions, the amount and frequency of premium payments, any withdrawals, and
charges imposed in connection with the Certificate. Adherence to the schedule of
Planned Periodic Premiums will not assure the Certificate will remain in force.
The Certificate Owner bears the entire investment risk for all amounts allocated
to Separate Account D; no minimum Accumulation Value is guaranteed and the
Accumulation Value could decline to zero. So long as Cash Value exceeds
indebtedness and subject to certain conditions described in this Prospectus, a
Certificate Owner may obtain Certificate loans at any time after the first
Certificate anniversary and may make withdrawals at any time. Both withdrawals
and Certificate loans must be made prior to the Certificate's Maturity Date.
The Certificate Owner may allocate Net Premiums to one or more of the
Divisions or to Colonial Life's General Account on the Allocation Date. Each
Division will invest solely in a corresponding series (a "Portfolio") of Chubb
Series Trust (the "Trust"). Prior to the Allocation Date the Net Premiums paid
will be deposited in Colonial Life's General Account. There is a "free look"
period during which the Certificate Owner may cancel the Certificate. If the
Certificate Owner elects during this "free look" period to cancel the
Certificate, Colonial Life will reimburse, within seven days from the date the
Certificate is surrendered to Colonial Life, the full amount of premium paid.
The accompanying Prospectus for the Trust and the Statement of Additional
Information, available on request, describe the investment objectives and risks
of the five Portfolios of the Trust. The Certificates described in this
Prospectus are available in the State of New York only.
Colonial Life believes the Group Policies and Certificates will in general
receive favorable tax treatment under the Internal Revenue Code of 1986, as
amended ("the Code"). However, because there are issues as to which the law is
developing or changing, there can be no guarantees. Information in this
Prospectus is not intended as tax advice and Colonial Life recommends that
prospective purchasers rely only on the advice of a qualified tax adviser. A
prospective purchaser of a Certificate is advised that replacement of existing
insurance coverage may not be financially advantageous and should consult with
his or her financial advisers with respect to the Certificate. It may also not
be advantageous to purchase a Certificate if the prospective purchaser already
owns a flexible premium variable life insurance policy.
This Prospectus generally describes only the portion of the Certificates
involving Separate Account D. For a brief summary of Colonial Life's General
Account, see "THE GENERAL ACCOUNT."
This Prospectus Is Valid Only If Accompanied Or
Preceded By A Current Prospectus For
Chubb Series Trust
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES DIVISION, NOR HAS THE COMMISSION OR
ANY STATE SECURITIES DIVISION, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Please Read This Prospectus Carefully and Retain It For Future Reference.
The Date of This Prospectus is May 1, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
DEFINITIONS............................................... 3
SUMMARY................................................... 5
THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA............ 10
COLONIAL SEPARATE ACCOUNT D............................... 10
Divisions.............................................. 10
CHUBB SERIES TRUST........................................ 11
THE GROUP POLICIES AND CERTIFICATES....................... 12
General................................................ 12
Payment of Premiums.................................... 13
Guaranteed Death Benefit Premiums...................... 13
Premium Limitations.................................... 13
Allocation of Premiums................................. 13
Transfers.............................................. 14
Telephone Transfers, Loans and Reallocations........... 16
Certificate Lapse...................................... 16
Reinstatement.......................................... 16
Conversion............................................. 16
Certificate "Free Look"................................ 17
CHARGES AND DEDUCTIONS.................................... 17
Premium Charges........................................ 17
Monthly Deduction...................................... 18
Risk Charge............................................ 19
Surrender Charge....................................... 19
Administrative Fees.................................... 19
Other Charges.......................................... 20
CERTIFICATE BENEFITS AND RIGHTS........................... 20
Death Benefits......................................... 20
Guaranteed Death Benefit............................... 21
Combined Requests...................................... 21
Maturity of the Certificate............................ 21
Optional Insurance Benefits............................ 22
Settlement Options..................................... 22
CALCULATION OF ACCUMULATION VALUE......................... 23
Unit Values............................................ 24
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Net Investment Factor.................................. 24
Page
----
CASH VALUE BENEFITS....................................... 25
Surrender Privileges................................... 25
Certificate Loans...................................... 26
OTHER MATTERS............................................. 27
Voting Rights.......................................... 27
Additions, Deletions or Substitutions of Investments... 27
Annual Report.......................................... 28
Confirmation........................................... 28
Limitation on Right to Contest......................... 28
Misstatements.......................................... 28
Suicide................................................ 28
Beneficiaries.......................................... 29
Postponement of Payments............................... 29
Assignment............................................. 29
Illustration of Benefits and Values.................... 29
Non-Participating Certificate.......................... 29
THE GENERAL ACCOUNT....................................... 29
General Description.................................... 29
General Account Accumulation Value..................... 30
Determination of Charges............................... 30
Premium Deposit Fund................................... 30
DISTRIBUTION OF THE GROUP POLICIES AND CERTIFICATES....... 30
MANAGEMENT OF COLONIAL LIFE............................... 32
Executive Officers and Directors of Colonial Life...... 32
Executive Officers (Other Than Directors).............. 33
STATE REGULATION OF COLONIAL LIFE......................... 34
FEDERAL TAX MATTERS....................................... 34
Tax Considerations....................................... 34
Certificate Proceeds..................................... 34
Charge for Colonial Life Income Taxes.................... 37
EMPLOYEE BENEFIT PLANS.................................... 37
LEGAL PROCEEDINGS......................................... 37
EXPERTS................................................... 37
REGISTRATION STATEMENT.................................... 38
FINANCIAL STATEMENTS...................................... 38
ILLUSTRATIONS............................................. A-1
</TABLE>
[THIS PROSPECTUS CONSTITUTES AN OFFERING ONLY IN THE STATE OF NEW YORK.
COLONIAL LIFE DOES NOT AUTHORIZE ANY INFORMATION OR REPRESENTATIONS
<PAGE>
REGARDING THE OFFERING DESCRIBED IN THIS PROSPECTUS OTHER THAN AS CONTAINED IN
THIS PROSPECTUS, THE PROSPECTUS OF THE TRUST OR THE STATEMENT OF ADDITIONAL
INFORMATION OF THE TRUST.]
<PAGE>
DEFINITIONS
In addition to terms which are defined elsewhere in this Prospectus, the
following words and phrases shall have the indicated meanings:
Accumulation Value--The total amount that a Certificate provides for
investment at any time plus the amount held as collateral for Certificate Debt.
Age--The Insured's age at his or her nearest birthday.
Allocation Date--The date when the initial premium is placed in the
Divisions and the General Account in accordance with the Certificate Owner's
allocation instructions in the application. The Allocation Date is 20 days from
the date the Certificate is issued.
Attained Age--The age of the Insured at his or her nearest birthday on the
last Certificate anniversary.
Beneficiary--The person, designated by the Certificate Owner in the
application, to receive the Death Benefit proceeds. If later changed, the
Beneficiary is as shown in the latest change filed with Colonial Life. If no
Beneficiary survives the Insured, the Certificate Owner or the Certificate
Owner's estate will be the Beneficiary. The interest of any Beneficiary is
subject to that of any assignee.
Cash Value--The Accumulation Value less any applicable Surrender Charge.
This amount less the amount of Certificate Debt is payable to the Certificate
Owner on the earlier of surrender of the Certificate or the Maturity Date.
Certificate--The form used to describe the Certificate Owners' rights,
benefits, and options under their respective Group Policies. The Certificate
will describe, among other things, (i) the benefits for the named Insured, (ii)
to whom the benefits are payable, and (iii) the limits and other terms of the
Group Policy as they pertain to the Insured.
Certificate Date--The date set forth in the Certificate, which is the date
requested by the Certificate Owner. If no date is requested, it is the date the
Certificate is issued. The Certificate Date is the date from which Certificate
years, Certificate months, and Certificate anniversaries will be determined. If
the Certificate Date should fall on the 29th, 30th, or 31st of a month, the
Certificate Date will be the 1st of the following month.
Certificate Debt--The sum of all unpaid Certificate loans and accrued
interest thereon.
Certificate Owner--The person or legal entity so designated in the
application or as subsequently changed. A Certificate Owner may be someone other
than the Insured. Certificate Owners possess all rights under their respective
Group Policies with respect to their Certificates.
Date of Receipt--Any business day of Colonial Life, prior to 4:00 P.M.
Eastern time, on which a notice or premium payment is received at Colonial
Life's Service Center.
Death Benefit--The amount, less the amount of Certificate Debt, which is
payable to the Beneficiary under the Certificate upon the death of the Insured
under Colonial Heritage I and the death of the last surviving Insured under
Colonial Heritage II.
Division--A separate division of Separate Account D which invests
exclusively in the shares of a specified Portfolio of the Trust.
<PAGE>
General Account--The assets of Colonial Life other than those allocated to
Separate Account D or any other separate account.
Group Policies--Refers to the Group Flexible Premium Variable Life
Insurance Policy and the Group Joint and Last Survivor Flexible Premium Variable
Life Insurance Policy described herein.
Insured(s)--The person(s) upon whose life the Certificate is issued.
Issue Age--The Insured's age at his or her nearest birthday on the
Certificate Date.
Joint Equal Age--On Colonial Heritage II, this will be calculated pursuant
to a formula which converts the specific age, gender and underwriting
classifications of the two Insureds into one age. The Joint Equal Age is used in
determining issue age limitations, minimum premiums and guaranteed death benefit
premiums.
Loan Value--Generally, 90% of a Certificate's Cash Value on the date of a
loan.
Maturity Date--Unless otherwise specified, the Maturity Date will be the
Certificate anniversary nearest to the Insured's 100th birthday for Colonial
Heritage I and the younger Insured's 100th birthday for Colonial Heritage II.
Monthly Anniversary Date--The same day in each month as the Certificate
Date.
Net Premium--The gross premium less a 2.0% state tax charge, a 1.25%
federal deferred acquisition cost tax charge and a 3% sales charge.
Policyholder--The entity to whom a Group Policy is issued. The Policyholder
possesses no rights under the Group Policy.
Portfolio--A separate investment series of the Trust.
Proof of Death--One or more of the following:
(a) A copy of a certified death certificate.
(b) A copy of a certified decree of a court of competent jurisdiction as to
the finding of death.
(c) A written statement by a medical doctor who attended the Insured.
(d) Any other proof satisfactory to Colonial Life.
Separate Account D--Colonial Separate Account D, a separate investment
account created by Colonial Life to receive and invest Net Premiums paid under
the Certificates and other variable life insurance policies offered by Colonial
Life.
Service Center--Colonial Life's administrative service center, located at
One Granite Place, P.O. Box 2086, Concord, New Hampshire 03302, telephone number
(800) 997-4499.
Specified Amount--The face amount of the Certificate which is the minimum
death benefit payable under the Certificate.
Surrender Charge--A sales charge assessed only upon surrender or
withdrawal.
<PAGE>
Trust--Chubb Series Trust, a series mutual fund.
Valuation Date--Each day, as of the close of regular trading on the New
York Stock Exchange, which is currently 4:00 P.M. Eastern time, or any other
days as may be required.
Valuation Period--The period between two successive Valuation Dates,
commencing at the close of regular trading on the New York Stock Exchange on
each Valuation Date and ending at the close of regular trading on the New York
Stock Exchange on the next succeeding Valuation Date.
<PAGE>
SUMMARY
The discussion in this Prospectus assumes that there is no Certificate loan
outstanding. The terms under which the Group Policies and Certificates are
issued may also vary from those described in this Prospectus based on particular
circumstances. The description of the Group Policies and Certificates in this
Prospectus is subject to the terms of the Group Policy and Certificate and any
supplement or endorsement to them. An applicant may review a copy of the Group
Policy and Certificate and any supplement or endorsement to them on request.
What are the Group Policies and Certificates being offered?
This Prospectus describes two forms of group flexible premium variable life
insurance policies issued by The Colonial Life Insurance Company of America
("Colonial Life"). Colonial Heritage I provides life insurance coverage on one
Insured, with the Death Benefit payable upon the death of such Insured. Colonial
Heritage II provides life insurance coverage on two Insureds, with a Death
Benefit payable only when the last surviving Insured dies. The Certificate Owner
may, subject to certain limitations, make premium payments in any amount at any
frequency. The Group Policies and Certificates are life insurance contracts with
death benefits, cash values, and other features traditionally associated with
life insurance. They are called "flexible premium" because, unlike many
insurance contracts, there are no fixed schedules for premium payments, although
each Certificate Owner may establish a schedule of premium payments ("Planned
Periodic Premiums"). This flexibility permits a Certificate Owner to provide for
evolving insurance needs within a single insurance product. The minimum initial
Specified Amount is $500,000 for Colonial Heritage I and $2,000,000 for Colonial
Heritage II. A Certificate Owner may increase or decrease coverage. Increasing
coverage under the Certificate, rather than purchasing another policy, may save
additional administrative costs. Increasing coverage under the Certificate or
purchasing another policy may require new evidence of insurability. Increasing
or decreasing coverage may have certain tax consequences. See "FEDERAL TAX
MATTERS".
The Certificates generally work as follows: a Certificate Owner
periodically pays a premium to Colonial Life. Colonial Life subtracts an amount
for state taxes, the federal deferred acquisition cost tax charge and the sales
charge from each premium. Colonial Life then places the Net Premium into one or
more of the five Divisions and/or Colonial Life's General Account as directed by
the Certificate Owner. Each Division invests its assets in a corresponding
Portfolio of the Trust. During the year, Colonial Life takes charges from each
Division and credits or charges each Division with its respective investment
experience. The cost of insurance charge, which is deducted from each
Certificate's Accumulation Value, varies monthly based on the sex, Issue Age,
Certificate year, rating class of the Insured(s), Specified Amount of the
Certificate, Death Benefit option and applicable corridor percentage. A
Certificate Owner will incur a Surrender Charge for a surrender or withdrawal
during the first five Certificate years. See "CHARGES AND DEDUCTIONS--Surrender
Charge".
The Death Benefit is payable under two options. The Certificate Owner will
make two elections to determine the Death Benefit under the Certificate. First,
the Certificate Owner will choose one of two Death Benefit options offered under
the Certificate. Second, the Certificate Owner will choose the Death Benefit
qualification test, which is the method for qualifying the Certificate as a life
insurance contract for purposes of Federal tax law. In general, under Death
Benefit Option I, the Death Benefit payable under the Certificate is equal to
the current Specified Amount; under Death Benefit Option II, the Death Benefit
is equal to the Specified Amount plus the Accumulation Value of the Certificate
on the date of death. The Certificate will also increase the Death Benefit if
necessary to ensure that the Certificate will continue to qualify as life
insurance under Federal tax laws. The Certificate Owner may not change the Death
Benefit qualification test once selected but may, subject to certain
restrictions, change from Death Benefit Option I to Option II, and vice versa,
after the Certificate has been issued. Prospective Certificate Owners should be
aware that there is no guarantee of Accumulation Value in Separate Account D.
See
<PAGE>
"CERTIFICATE BENEFITS AND RIGHTS--Death Benefits".
All persons insured must meet specified age limits and certain health and
other standards called "Underwriting Standards". The smoking status of the
Insureds is generally reflected in the cost of insurance rates. However, for
Colonial Heritage I, distinctions between smokers and nonsmokers are only made
for Insureds age 15 and over. Certificates issued in certain jurisdictions will
not directly reflect the sexes of the Insureds in either the premium rates or
the charges and values under the Certificate.
What is the amount of the Premiums?
Premiums are flexible and the Certificate Owner may choose the amount and
frequency of premium payments provided each premium is at least $500. Colonial
Life reserves the right to limit the amount of any increase in premium payment.
The first premium is due on the Certificate Date. The amount of the first
premium must be sufficient to keep the Certificate in force for three months.
Premiums are paid in advance, generally one year at a time; however, Colonial
Life accepts semi-annual, quarterly and monthly premium payments. Changes in
Premium Frequency and increases or decreases in the amount of Planned Periodic
Premiums may be made by the Certificate Owner. Colonial Life will notify
Certificate Owners annually if any premiums would cause their Certificates to be
deemed to be modified endowment contracts and allow for a refund of the excess
premium. See "FEDERAL TAX MATTERS--Certificate Proceeds".
Failure to pay premiums in accordance with the schedule of Planned Periodic
Premiums will not automatically cause the Certificate to lapse. Unless the
Guaranteed Death Benefit Rider is in force and the conditions under the Rider
satisfied, it will lapse when the Cash Value less outstanding Certificate Debt
is insufficient to pay the monthly deduction for certain charges ("monthly
deduction") and a grace period expires without a sufficient payment by the
Certificate Owner. Conversely, payment of premiums in accordance with the
schedule of Planned Periodic Premiums does not necessarily mean that the
Certificate will remain in force. See "THE GROUP POLICIES AND CERTIFICATES--
Certificate Lapse".
The Guaranteed Death Benefit Rider guarantees that the Death Benefit will
never be less than the Specified Amount provided that a cumulative minimum
premium requirement is met.
What is Colonial Separate Account D?
Separate Account D is a separate account established by Colonial Life
pursuant to the insurance laws of the State of New Jersey and organized as a
registered unit investment trust under the Investment Company Act of 1940 (the
"1940 Act"). Such registration does not involve any supervision by the
Securities and Exchange Commission (the "Commission") of the management or
investment practices or policies of Separate Account D. Separate Account D is
presently comprised of five Divisions, each of which buys shares at net asset
value of the corresponding series (a "Portfolio") of Chubb Series Trust (the
"Trust").
What is Chubb Series Trust?
The Trust is registered as an open-end diversified management company under
the 1940 Act. Its shares are offered only to the Divisions, whether now in
existence or to be established by Colonial Life, and to divisions of the Chubb
Separate Account C, a separate account established to fund certain variable life
insurance policies by Chubb Life Insurance Company of America, Colonial Life's
parent. The Trust's shares may also be offered to other separate accounts which
may be established by Colonial Life or its affiliated insurance companies to
fund variable
<PAGE>
life insurance policies and variable annuity contracts.
The Trust presently has five classes of shares, each representing a
Portfolio having a specific investment objective. The present Portfolios of the
Trust are the Resolute Treasury Money Market Portfolio, the Resolute Bond
Portfolio, the Resolute Equity Portfolio, the Resolute Small Company Portfolio
and the Resolute International Equity Portfolio.
The investment manager to the Trust is Chubb Investment Advisory
Corporation ("Chubb Investment Advisory"), a subsidiary of Chubb Life Insurance
Company of America, Colonial Life's parent. Chubb Investment Advisory receives
fees from the Trust for providing investment management services. The fees range
from .40 percent to .80 percent of average daily net assets of the Portfolios.
Morgan Guaranty Trust Company of New York ("Morgan") provides sub-investment
advisory services to the Trust. Morgan receives an annual percentage fee from
Chubb Investment Advisory for its services which in no way increases the costs
borne by the Trust, Separate Account D or the Certificate Owner. See "CHUBB
SERIES TRUST".
What are the charges made by Colonial Life?
State Tax Charge and Federal DAC Tax Charge. These charges are deducted
from each premium payment, currently 2.0% for state premium and other local
taxes imposed on premiums and 1.25% as a federal deferred acquisition cost
("DAC") tax charge.
Sales Charge. A 3% sales charge is deducted from each premium payment. Also
see below "Surrender or Withdrawal Charges".
Cost of Insurance Charge. This charge is calculated on each Monthly
Anniversary Date and deducted from each Certificate's Accumulation Value. The
monthly current cost of insurance rate is based on the sex, Issue Age,
Certificate year, rating class of the Insured(s), Specified Amount, Death
Benefit option and applicable corridor percentage. Monthly cost of insurance
rates will be determined by Colonial Life based upon its expectations as to
future mortality experience. Cost of insurance rates are guaranteed not to
exceed or be increased above the maximum charge based upon the Commissioner's
1980 Standard Ordinary Mortality Table.
Charge for Mortality and Expense Risks. This charge is imposed daily at an
annual rate of .65% on the assets of each Division. Colonial Life will realize
net income from this charge to the extent it is not needed to provide benefits
and pay expenses under the Group Policies and Certificates.
Surrender or Withdrawal Charges. This sales charge is imposed at the time
of surrender or withdrawal during the first five Certificate years. It declines
annually from 5% to 0% of premiums paid in the first Certificate year.
Administrative Charge for Withdrawal or Transfer. Colonial Life charges
$100 for each withdrawal and for certain transfers between Divisions or between
the Divisions and the General Account. See "THE GROUP POLICIES AND
CERTIFICATES--Transfers" for a description of situations in which the transfer
charge will be imposed.
Guaranteed Death Benefit Charge. If the Guaranteed Death Benefit Rider is
added to the Certificate, a monthly charge of $.01 per $1,000 of Specified
Amount will be deducted each month from the Accumulation Value of the
Certificate.
Charge for Optional Rider Benefits. An additional charge is required if the
Certificate Owner elects to purchase certain optional insurance benefits by
rider. Charges are deducted monthly from a Certificate's
<PAGE>
Accumulation Value. See "CERTIFICATE BENEFITS AND RIGHTS--Optional Insurance
Benefits".
See "CHARGES AND EXPENSES" for a fuller description of charges under the
Certificates.
Is there a charge against Separate Account D for federal income tax?
Currently no charge is made against any Division for federal income taxes.
However, if Colonial Life incurs, or expects to incur, income taxes attributable
to any Division of this class of Group Policies and Certificates in future
years, it reserves the right to make a charge. See the discussion of the federal
DAC tax charge under "CHARGES AND DEDUCTIONS--Premium Charges".
How are amounts allocated to each Division or the General Account?
The Certificate Owner indicates in the application the allocation of Net
Premium among the Divisions and the General Account. The initial Net Premium is
allocated on the Allocation Date and Net Premiums received after the Allocation
Date are allocated generally on the Date of Receipt. The minimum percentage of
any Net Premium allocated to any Division or the General Account is 1%. The
Certificate Owner may change his or her allocation of future premium payments by
written notice to Colonial Life or by telephone, if the proper telephone
authorization is on file, without payment of any fee or penalty.
What is the relationship between the premium and the amount allocated to the
Divisions?
The initial Net Premium is allocated by Colonial Life on the Allocation
Date among the Divisions and the General Account as directed by the Certificate
Owner. Prior to the Allocation Date the initial Net Premium is held in Colonial
Life's General Account. The initial Net Premium is the initial gross premium,
plus any additional premium paid prior to the Allocation Date, less the state
tax charge, the federal DAC tax charge and the sales charge. These charges also
apply to subsequent premium payments.
What commissions are paid to agents?
The Group Policies and Certificates are sold by agents who represent
Colonial Life and are registered representatives of Chubb Securities Corporation
or other registered broker-dealers. Commissions payable to agents are described
under "DISTRIBUTION OF THE GROUP POLICIES AND CERTIFICATES".
What is the Death Benefit?
The Death Benefit under Colonial Heritage I is the amount payable to the
named Beneficiary when the person insured under the Certificate dies. The Death
Benefit under Colonial Heritage II is the amount payable to the named
Beneficiary when the last surviving Insured dies. The Death Benefit proceeds
will equal the Death Benefit of the Certificate, plus any additional rider
benefits included and then due, minus any outstanding Certificate Debt or unpaid
cost of insurance charges or charges for riders.
Under Option I, the Death Benefit will be equal to the greater of the
Specified Amount or the Accumulation Value of the Certificate on the date of
death multiplied by the corridor percentage. Under Option II, the Death Benefit
is equal to the Specified Amount plus the Accumulation Value of the Certificate
on the date of death; provided, however, that under Option II, the Death Benefit
can never be less than the Accumulation Value on the
<PAGE>
date of death multiplied by the corridor percentage. See "CERTIFICATE BENEFITS
AND RIGHTS--Death Benefits".
Under the Guaranteed Death Benefit Rider the Death Benefit is guaranteed to
never be less than the Specified Amount provided that a cumulative minimum
premium requirement is met.
How does the Accumulation Value of a Certificate vary in relation to the
Divisions' investment experience?
The Certificate provides for Accumulation Value equal to the total of the
Certificate's Accumulation Value in the Divisions and Accumulation Value in the
General Account. The Certificate's Accumulation Value will reflect the amount
and frequency of premium payments, the investment experience of the Divisions,
the value of Net Premiums (Net Premiums plus credited interest), if any,
allocated to the General Account, Certificate loans, any withdrawals, and any
charges imposed in connection with the Certificate. There is no minimum
guaranteed Accumulation Value.
What is the loan provision and how does a loan affect the Death Benefit,
Accumulation Value and Cash Value?
After the first Certificate anniversary, a Certificate Owner may borrow
against the Cash Value of his or her Certificate. Generally, the maximum loan
amount is 90% of the Cash Value of the Certificate on the date of the loan. Loan
interest is payable at the end of each Certificate year and all Certificate Debt
outstanding will be deducted from proceeds payable at the Insured's death for
Colonial Heritage I and at the death of the last surviving Insured for Colonial
Heritage II, upon maturity, or upon surrender.
When a Certificate loan is made, a portion of the Certificate's
Accumulation Value sufficient to secure the loan will be transferred to the
General Account. A Certificate loan removes the proceeds from the investment
experience of Separate Account D which will have a permanent effect on the
Accumulation Value, the Cash Value and the Death Benefit even if the loan is
repaid.
There are two types of loans available. See "CASH VALUE BENEFITS--
Certificate Loans" for a description of the two types of loans and their
applicable interest rates.
Is there a short-term cancellation right?
The Certificate Owner has the limited right to return a Certificate for
cancellation and full refund of all premiums paid. Colonial Life will cancel the
Certificate if it is returned by mail or personal delivery to Colonial Life, or
to the agent who sold the Certificate, within 20 days after the delivery of the
Certificate to the Certificate Owner. Colonial Life will return to the
Certificate Owner, within seven days, all payments received on the Certificate.
What transfers is a Certificate Owner allowed?
A Certificate Owner may transfer Accumulation Value among the Divisions and
among the Divisions and the General Account. However, transfers out of the
General Account are subject to restrictions. Colonial Life currently permits up
to 24 transfers per Certificate year, twelve of which will not incur a transfer
charge. See "THE GROUP POLICIES AND CERTIFICATES--Transfers" for a more
complete description of the terms and conditions of the transfer privileges
under the Certificates.
<PAGE>
Are the benefits under the Certificates subject to federal income tax?
Under current interpretations of the tax laws, all Death Benefits paid
under the Certificates will generally be fully excludable from the gross income
of the Beneficiary for federal income tax purposes. Treasury regulations require
that investments underlying the Certificates be adequately diversified. Colonial
Life believes it is presently in compliance with the regulations and intends to
remain in compliance with such regulations and other federal tax law
requirements.
If a Certificate Owner elects to make certain transactions, including a
withdrawal, surrender or exchange of the Certificate, the Certificate Owner may
be taxed on a portion of any amounts paid to the Certificate Owner (which may
include any prior Certificate loans cancelled in the transaction). Also, if
premiums paid by a Certificate Owner exceed certain limits and the Certificate
is deemed a modified endowment contract, then any pre-death distributions,
including loans, surrenders and partial withdrawals, may be treated as income
taxable to the Certificate Owner and may also cause the Certificate Owner to
incur a penalty tax of 10%. Certificate Owners are advised to consult with their
own tax advisers with regard to the tax consequences of the Certificate. See
"FEDERAL TAX MATTERS".
<PAGE>
THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA
Colonial Life is a stock life insurance company chartered in 1897 in New
Jersey and has been continuously engaged in the insurance business since that
time. It is licensed to do life insurance business in fifty states of the United
States, Puerto Rico, the U.S. Virgin Islands, and in the District of Columbia.
Colonial Life is a wholly-owned subsidiary of Chubb Life Insurance Company of
America, ("Chubb Life") a New Hampshire life insurance company which in turn
is a wholly owned subsidiary of The Chubb Corporation, a New Jersey Corporation.
The principal offices of The Chubb Corporation are located at 15 Mountain View
Road, Warren, New Jersey. Its telephone number is (908) 580-2000. Chubb Life's
home office and Colonial Life's service center are located at One Granite Place,
P.O. Box 2086, Concord, New Hampshire 03302, telephone number (800) 997-4499.
Colonial Life's home office is located at Eight Sylvan Way, Parsippany, New
Jersey 17054, telephone number (201) 455-1400. Colonial Life's total assets at
December 31, 1995, were $636,071,000.
Colonial Life writes life and health insurance. It is subject to New Jersey
law governing insurance, and is regulated and supervised by the New Jersey
Insurance Commissioner. Colonial Life is currently rated AAA (Superior) by
Standard and Poor's Corporation and A (Excellent) by A.M. Best and Company.
These ratings do not apply to Separate Account D but merely reflect the opinion
of the rating company as to the relative financial strength of Colonial Life and
Colonial Life's ability to meet its contractual obligations to its policy and
certificate owners. Even though assets in Separate Account D are held separately
from Colonial Life's other assets, ratings of Colonial Life may still be
relevant to Certificate Owners since not all of Colonial Life's contractual
obligations relate to payments based on those segregated assets.
COLONIAL SEPARATE ACCOUNT D
Separate Account D is a separate account of Colonial Life established on
June 13, 1994 and governed by the insurance laws of the State of New Jersey.
Separate Account D is organized as a unit investment trust registered with the
Commission under the 1940 Act and is subject to that Act's requirements. Such
registration does not involve supervision of the management or investment
policies of Separate Account D or Colonial Life by the Commission. Colonial Life
is the depositor of Separate Account D. Under New Jersey law, the assets of
Separate Account D are held exclusively for the benefit of Policyholders,
Certificate Owners and persons entitled to payments under these Group Policies
and Certificates, and other variable life insurance policies funded by Separate
Account D. The income, realized or unrealized capital gains, or capital losses
of Separate Account D are credited to or charged against the assets held in
Separate Account D in accordance with the terms of the Group Policies and
Certificates, without regard to other income or capital gains or losses of any
other account arising out of any other business Colonial Life conducts. Separate
Account D is administered and accounted for as part of the general business of
Colonial Life, but the assets of Separate Account D are not chargeable with
liabilities arising out of any other business which Colonial Life may conduct.
Colonial Life holds the assets of Separate Account D. These assets are kept
physically segregated and held separate and apart from the General Account.
Colonial Life maintains records of all purchases and redemptions of Trust shares
by each of the Divisions.
Divisions. Separate Account D presently has five Divisions but may, in
the future, add or delete investment Divisions. Each Division will invest
exclusively in shares representing an interest in a Portfolio of the Trust.
Investment income and other distributions to each Division of Separate
Account D arising from the applicable underlying Portfolio of the Trust
increases the assets of the corresponding Division of Separate Account D. The
income and both realized and unrealized gains or losses on the assets of each
Division of Separate Account D are credited to or charged against that Division
without regard to income, gains or losses from any other Division.
<PAGE>
CHUBB SERIES TRUST
Separate Account D invests in shares of the Trust which is organized as a
Delaware business trust and is registered as an open-end diversified management
company under the 1940 Act. The Trust currently has five Portfolios each of
which has different objectives. The shares of each Portfolio are offered only to
the Divisions and to divisions of the Chubb Separate Account C, a separate
account of Chubb Life Insurance Company of America, Colonial Life's parent. The
Trust's shares may also be offered to other separate accounts that may be
established by Colonial Life or any of its affiliated insurance companies to
fund variable life insurance policies and variable annuity contracts. The assets
of each Portfolio are maintained separately from the assets of the other
Portfolios and each Portfolio has investment objectives and policies which are
different from those of the other Portfolios. Thus, each Portfolio operates as a
separate investment fund, and the income, gains or losses of one Portfolio has
no effect on the investment performance of any other Portfolio.
The investment manager to the Trust is Chubb Investment Advisory
Corporation ("Chubb Investment Advisory"), which is an affiliate of Colonial
Life. Chubb Investment Advisory has in turn retained Morgan Guaranty Trust
Company of New York ("Morgan") to provide sub-investment advisory services to
each Portfolio.
An investment management fee is charged monthly against each Portfolio by
Chubb Investment Advisory at the annual rate of .40 percent of the average daily
net asset value of the Resolute Treasury Money Market Portfolio, .50 percent of
the average daily net asset value of the Resolute Bond Portfolio, .60 percent of
the average daily net asset value of the Resolute Equity Portfolio, and .80
percent of the average daily net asset value of the Resolute Small Company
Portfolio and the Resolute International Equity Portfolio. The compensation of
Morgan is set at the annual rate of .20 percent of the average daily net asset
value of the Resolute Treasury Money Market Portfolio, .30 percent of the
average daily net asset value of the Resolute Bond Portfolio, .40 percent of the
average daily net asset value of the Resolute Equity Portfolio, and .60 percent
of the average daily net asset value of the Resolute Small Company Portfolio and
the Resolute International Equity Portfolio. Chubb Investment Advisory is solely
responsible for paying such sub-investment advisory fees out of its investment
management fee described above.
The investment objectives of each Portfolio are set forth below. There can
be no assurance that any of the Portfolios will achieve its stated objectives.
The specialized nature of each Portfolio gives rise to significant differences
in the relative investment potential and market and financial risks of each
Portfolio. Certificate Owners should consider the unique features of each
Portfolio before investing in any corresponding Division. For more detailed
information concerning each Portfolio, including a description of the investment
risks, reference is made to the Prospectus for the Trust which accompanies this
Prospectus, or the Statement of Additional Information for the Trust, available
upon request.
The Resolute Treasury Money Market Portfolio seeks to provide current
income, maintain a high level of liquidity and preserve capital.
The Resolute Bond Portfolio seeks to provide a high total return consistent
with moderate risk of capital and maintenance of liquidity.
The Resolute Equity Portfolio seeks to provide a high total return from a
portfolio comprised of selected equity securities.
The Resolute Small Company Portfolio seeks to provide a high total return
from a portfolio of equity securities of small companies.
The Resolute International Equity Portfolio seeks to provide a high total
return from a portfolio of equity securities of foreign corporations.
<PAGE>
The Trust may find it necessary to take action to assure that the Group
Policies and Certificates qualify as life insurance under federal tax laws. The
Trust, for example, may alter the investment objectives of any Portfolio or take
other appropriate actions. See "OTHER MATTERS--Additions, Deletions or
Substitutions of Investments" and "FEDERAL TAX MATTERS".
Separate Account D will purchase shares of the Trust at net asset value in
connection with Net Premiums, transfers and loan repayments allocated to the
Divisions in accordance with the Certificate Owner's directions and will redeem
shares of the Trust to process transfers, Certificate loans, surrenders or
withdrawals and generally to meet contract obligations or make adjustments in
reserves. The Trust will sell and redeem its shares at net asset value as of the
Date of Receipt by Separate Account D of premium payments or notifications by a
Certificate Owner.
THE GROUP POLICIES AND CERTIFICATES
General. The Group Policies are issued to the banking corporation set
forth in the Group Policies and Certificates (the "Policyholder"). The
Policyholder possesses no rights under the Group Policies but holds the Group
Policies as trustee under a trust known as the Colonial Heritage Group Insurance
Trust. Colonial Life established the Colonial Heritage Group Insurance Trust for
the purpose of enabling participating financial institutions in the State of New
York which have applied for and been accepted as participants in the Group
Insurance Trust and have accepted its terms and conditions (the "Members") to
join together in the purchase and maintenance of the Group Policies.
Certificates of insurance may be issued to certain eligible persons (natural or
legal entity) who maintain at the time of application an account with, or whose
account is serviced by, a financial institution participating as a Member and
who have applied for insurance under this Group Policy. The Certificates
describe each Certificate Owner's rights, benefits and options under the Group
Policy. The Certificate is designed to provide the Certificate Owner with
lifetime insurance protection and flexibility in connection with the amount and
frequency of premium payments and the level of life insurance proceeds payable
under the Certificate. Colonial Life reserves the right to no longer accept any
new Insureds under a Group Policy as of a specified date.
Colonial Heritage I is a group flexible premium variable life insurance
policy which provides life insurance coverage on one Insured, with the Death
Benefit payable upon the death of such Insured. Colonial Heritage II is a group
flexible premium joint and last survivor variable life insurance policy which
provides life insurance coverage on two Insureds, with a Death Benefit payable
only when the last surviving Insured dies. The Certificate Owner is not required
to pay scheduled premiums to keep a Certificate in force but may, subject to
certain limitations, vary the frequency and amount of premium payments.
Moreover, subject to certain limitations, a Certificate Owner may adjust the
level of life insurance payable under the Certificate without having to purchase
a new policy by increasing or decreasing the Specified Amount. Thus, as
insurance needs or financial conditions change, the Certificate Owner has the
flexibility to adjust coverage and vary the premium payments. Death Benefits are
payable under two options as described in "CERTIFICATE BENEFITS AND RIGHTS--
Death Benefits".
To purchase a Certificate, a completed application must be submitted to
Colonial Life through the agent selling the Certificate. Applicants for
insurance must furnish satisfactory evidence of insurability. An Insured under
Colonial Heritage I must generally be between the ages of 0 and 80 and the
Insureds under Colonial Heritage II must generally be between 20 and 85 with
only one Insured over the age of 80. The Joint Equal Age of the Insureds under
Colonial Heritage II cannot be over age 80. The smoking status of each Insured
is reflected in the cost of insurance rates; provided, however, that under
Colonial Heritage I distinctions between smokers and nonsmokers are only made
for Insureds age 15 and over.
The minimum Specified Amount at issue is $500,000 for Colonial Heritage I
and $2,000,000 for Colonial
<PAGE>
Heritage II. Colonial Life reserves the right to revise its rules from time to
time to specify different minimum Specified Amounts at issue. If the Specified
Amount applied for plus all other insurance in force which is underwritten by
Colonial Life or its affiliates exceeds an amount which varies between $300,000
and $2,000,000 based on various factors, Colonial Life will reinsure all or a
portion of the Certificate. Acceptance of an application or revocation of a
Certificate during the contestable period is subject to Colonial Life's
insurance underwriting rules and Colonial Life may, in its sole discretion,
reject any application or related premium for any good reason or contest a
Certificate.
Payment of Premiums. Premiums must be paid to Colonial Life at its
Service Center or through an authorized agent of Colonial Life for forwarding to
Colonial Life's Service Center. The initial premium may be wired to Colonial
Life's bank upon notification that the application has been approved by Colonial
Life. Subsequent premium payments may also be wired to Colonial Life's bank. The
financial institution transmitting the wired funds may impose a charge for this
service. In addition, Colonial Life has administrative procedures whereby
premium payments in response to billing notices are sent directly to Colonial
Life's bank. Unlike traditional insurance contracts, there is no fixed schedule
of premium payments on a Certificate either as to the amount or the timing of
the payment. A Certificate Owner may determine, within specified limits, his or
her own premium payment schedule. These limits will be set forth by Colonial
Life and will include an initial premium payment sufficient to keep the Policy
in force for at least three months, and may also include limits on the total
amount and frequency of payments in each Certificate year. No premium payment
may be less than $500. In order to help the Certificate Owner obtain the
insurance benefits desired, a Planned Periodic Premium and Premium Frequency
will be stated in each Certificate. This premium will usually be based upon the
Certificate Owner's insurance needs and financial abilities, the current
financial climate, the Specified Amount of the Certificate, and the Insured's
age, sex and risk class, as discussed with the agent. The Certificate Owner is
not required to pay such premiums and failure to make any premium payment will
not necessarily result in lapse of the Certificate, provided the Certificate's
Cash Value, less Certificate Debt, if any, is sufficient to pay monthly
deductions. Conversely, adherence to the schedule of Planned Periodic Premiums
will not assure that the Certificate will remain in force. See "THE GROUP
POLICIES AND CERTIFICATES--Certificate Lapse".
Guaranteed Death Benefit Premiums. If the Guaranteed Death Benefit Rider
is added to the Certificate, the Death Benefit is guaranteed to never be less
than the Specified Amount, provided the Certificate Owner pays a cumulative
minimum premium. This cumulative minimum premium is based on Issue Age, sex,
smoking status and underwriting class of the Insured(s) as well as the Specified
Amount and Death Benefit option. The premium is increased for increases in the
Specified Amount. See "CERTIFICATE BENEFITS AND RIGHTS--Optional Insurance
Benefits".
Premium Limitations. If, at any time during the year, a premium has been
paid which would result in a Certificate being deemed a modified endowment
contract, Colonial Life will so notify the Certificate Owner on the
Certificate's anniversary date and allow the Certificate Owner to request a
refund of the excess premium, or other action, in order to avoid having the
Certificate be deemed to be a modified endowment contract. A Certificate Owner,
however, may choose to have the Certificate be deemed a modified endowment
contract, and, in that case, Colonial Life will not refund the premiums. See
"FEDERAL TAX MATTERS--Certificate Proceeds". Premium payments less than the
minimum amount of $500 will be returned to the Certificate Owner.
Allocation of Premiums. Premium payments, net of the state premium tax
charge, the federal DAC tax charge and the sales charge plus interest earned
prior to the Allocation Date, will be allocated on the Allocation Date among the
Divisions and the General Account in accordance with the directions of the
Certificate Owner, as contained in the application. Prior to the Allocation Date
the initial Net Premium will be held in Colonial Life's General Account. Any
other premiums received prior to the Allocation Date will also be held in the
General Account. If the Certificate issued as applied for is not accepted or the
"free look" is exercised, no interest will be credited and Colonial Life will
retain any interest earned on the initial Net Premium. The minimum percentage of
any Net Premium payment allocated to any Division or the General Account is 1%.
The Certificate Owner may change his or her allocation of future premium
payments among the Divisions and the General Account by written
<PAGE>
notice to Colonial Life or by telephone without payment of any fee or penalty.
The allocation of each Net Premium to a Division will be determined first
by multiplying the Net Premium by the percentage to be allocated to each
Division as the Certificate Owner directs to determine the portion to be
invested in the Division. Each portion to be invested in each Division is then
divided by the unit value of that particular Division to determine the number of
units to be credited to a Certificate Owner. The unit value of each Division
will vary to reflect the investment experience of the corresponding underlying
Portfolio shares. For a description of the method of determining unit values see
"CALCULATION OF ACCUMULATION VALUE--Unit Values". Applicants should refer to
the Prospectus for the Trust which accompanies this Prospectus for a description
of how the assets of each Portfolio are valued.
All valuations in connection with the Certificate, e.g., with respect to
determining Cash Value in connection with Certificate loans or withdrawals, with
respect to determining Accumulation Value in connection with transfers or
payment of Death Benefits, and with respect to determining a Division's unit
value at the time of each Net Premium payment, will be made on the Date of
Receipt of the premium or the request for payment, loan, withdrawal or transfer
if such date is a Valuation Date; otherwise, such determination will be made on
the next succeeding day which is a Valuation Date. The Date of Receipt of a
premium payment sent directly to Colonial Life's bank pursuant to a billing
notice will be the date the payment is received at the bank and the value of any
Division to which the payment is allocated will be determined as of such date
provided such date is a Valuation Date; otherwise, such determination will be
made on the next succeeding day which is a Valuation Date.
Transfers. Accumulation Value may be transferred among the Divisions and
between the Divisions and the General Account. In addition to individual
transfer requests, Certificate Owners may elect either a Dollar Cost Averaging
feature or an Automatic Portfolio Re-Balancing feature which provides for
systematic transfers as described below. Transfer requests may be made in
writing or by telephone. The total amount transferred each time must be at least
$1,000 unless a lesser amount constitutes the entire Accumulation Value in a
Division or in the General Account. Accumulation Value transferred from one
Division or from the General Account into more than one Division, and/or into
the General Account, counts as one transfer. Similarly, transferring
Accumulation Value from more than one Division, and/or the General Account, into
one other Division or the General Account, counts as one transfer.
Colonial Life currently permits 12 transfers per Certificate year without
imposing a transfer charge. For transfers in excess of 12 in any Certificate
year, a transfer charge of $100 to cover administrative costs will be imposed
each time amounts are transferred and will be deducted on a pro-rata basis from
the Division or Divisions or the General Account into which the amount is
transferred. However, no transfer charge will be imposed on the transfer of the
initial Net Premium payments, plus interest earned, from the General Account to
the Divisions on the Allocation Date or on loan repayments. No transfer charge
will be imposed for transfers pursuant to the Dollar Cost Averaging or Automatic
Portfolio Re-Balancing features. Currently, a Certificate Owner may make up to
24 transfers per Certificate year. Colonial Life reserves the right to revoke or
modify transfer privileges and charges.
At any time, the Certificate Owner may transfer 100% of the Certificate's
Accumulation Value to the General Account and elect to have all future premium
payments allocated to the General Account. While 100% of the Certificate's
Accumulation Value and all future premium payments are allocated to the General
Account, the minimum period the Certificate will be in force will be fixed and
guaranteed. The minimum period will depend on the amount of Accumulation Value,
the Specified Amount, the sex, the Attained Age, and rating class of the Insured
at the time of transfer. The minimum period will decrease if the Certificate
Owner subsequently elects to increase the Specified Amount, elects to surrender
the Certificate, or elects to make a withdrawal. The minimum period will
increase if the Certificate Owner elects to decrease the Specified Amount,
additional premium payments are received, or Colonial Life credits a higher
interest rate or charges a lower cost of insurance rate than those guaranteed
for the General Account.
Except for transfers in connection with Dollar Cost Averaging, Automatic
Portfolio Re-Balancing and loan
<PAGE>
repayments, transfers out of the General Account to the Divisions are permitted
only once every 180 days and are limited in amount to the lesser of (a) 25% of
the Accumulation Value in the General Account not being held as loan collateral
or (b) $100,000. In addition, any other transfer rules, including minimum
transfer amounts, also apply. Colonial Life reserves the right to modify these
restrictions.
No transfer charge will be imposed for a transfer of all Accumulation Value
in Separate Account D to the General Account. However, any transfer from the
General Account to the Division(s) will be subject to the transfer charge,
unless it is one of the first 12 transfers in a Certificate year and except for
the transfer of the initial Net Premium payments, plus interest earned, from the
General Account, loan repayments, and transfers pursuant to the Dollar Cost
Averaging or Automatic Portfolio Re-Balancing features.
A feature called Dollar Cost Averaging is available to Certificate Owners
under which a Certificate Owner deposits or designates an amount, subject to a
minimum of $6,000, in the Resolute Treasury Money Market Division or the General
Account and elects to have a specified dollar amount (the "Periodic Transfer
Amount") automatically transferred to one or more of the Divisions on a
monthly, quarterly, or semi- annual basis. This feature allows Certificate
Owners to systematically invest in the Divisions at various prices which may be
higher or lower than the price a Certificate Owner would pay when investing the
entire amount at one time and at one price. Each Periodic Transfer Amount is
subject to a minimum amount of $500. A minimum of 1% of the Periodic Transfer
Amount must be transferred to any specified Division. These amounts are subject
to change at Colonial Life's discretion. If a transfer would reduce Accumulation
Value in the Resolute Treasury Money Market Division or the General Account to
less than the Periodic Transfer Amount, Colonial Life reserves the right to
include such remaining Accumulation Value in the amount transferred. At the
time a Certificate Owner elects the Dollar Cost Averaging feature, an election
is made between Fixed Amount Dollar Cost Averaging or Continuous Mode Dollar
Cost Averaging. Under Fixed Amount Dollar Cost Averaging, the feature will
continue until the Designated Amount has been transferred or the Certificate
Onwer gives notification of cancellation of the feature prior to transfer of the
entire Designated Amount. Once the Designated Amount has been transferred, a
new Dollar Cost Averaging election form must be completed if the Certificate
Owner wishes to have additional money dollar cost averaged. Under Continuous
Mode Dollar Cost Averaging, any amounts deposited into the Repository Account,
and not just the Designated Amount, will be transferred. Dollar Cost Averaging
is currently available to Certificate Owners at no charge. Although Colonial
Life reserves the right to assess a charge, no greater than cost and with 30
days advance notice to Certificate Owners, it has no present intention to do so.
An Automatic Portfolio Re-Balancing feature is also available to
Certificate Owners. This feature provides a method for re-establishing fixed
proportions between various types of investments on a systematic basis. Under
this feature, the allocation between Divisions and the General Account will be
automatically re-adjusted to the desired allocation, subject to a minimum of 1%
per Division or General Account, on a quarterly, semi-annual or annual basis.
A Certificate Owner may choose one of the two features. Transfers and
adjustments pursuant to these features will occur on a Certificate's Monthly
Anniversary Date in the month in which the transaction is to take place or the
next succeeding business day if the Monthly Anniversary Date falls on a holiday
or a weekend. The applicable authorization form must be on file at Colonial Life
before either feature may begin. Neither feature guarantees profits nor protects
against losses. Transfers under these features do not count toward the 12 free
transfers or the 24 transfers currently allowed per year. Colonial Life reserves
the right to modify the terms and conditions of these features upon 30 days
advance notice to Certificate Owners.
Telephone Transfers, Loans and Reallocations. Certificate Owners may
request by telephone transfers of Accumulation Value or reallocation of premiums
(including allocation changes pursuant to existing Dollar Cost Averaging and
Automatic Portfolio Re-Balancing programs), provided that the appropriate
authorization form is on file with Colonial Life. Colonial Life may also, in its
discretion, permit loans to be made by telephone, provided that the proper
authorization form is on file with Colonial Life. During periods of heavy
telephone transfers, implementing a telephone transfer may be difficult. If a
Certificate Owner is unable to reach Colonial Life via
<PAGE>
telephone, the Certificate Owner should send a written request to Colonial Life
via an express mailing service or via the Colonial Life telecopier machine at
(603) 226-5155. (Any transfer requests received via telecopier are considered
telephone transfers and are bound by the conditions outlined in the signed
authorization form.) Colonial Life reserves the right to discontinue telephone
transfers at any time without notice to the Certificate Owners. Procedures have
been established that are reasonably designed to reduce the risk of unauthorized
telephone transfers, loan requests or allocation changes. These procedures
include requiring personal identification information (such as social security
number and date of birth), tape recording calls and providing written
confirmations to Certificate Owners.
Certificate Lapse. Failure to make a premium payment on a Certificate
will not necessarily cause the Certificate to lapse. The duration of a
Certificate depends upon its Cash Value. The Certificate will remain in force so
long as the Cash Value, less any outstanding Certificate Debt, is sufficient to
cover cost of insurance and any rider charges. In the event the Cash Value, less
any outstanding Certificate Debt, is insufficient to pay these monthly cost of
insurance and rider charges ("monthly deduction") the Certificate Owner will
be given a sixty-one day period ("grace period") within which to make a
premium payment to avoid lapse. The premium required to avoid lapse must be
sufficient in amount, after the deduction of the state premium tax charge, the
federal DAC tax charge and the sales charge, to cover the monthly deduction for
at least three Certificate months. This required premium will be set forth in a
written notice which Colonial Life will send to the Certificate Owner thirty-one
days prior to the end of the grace period. The Certificate will continue in
force through the grace period, but if no payment is forthcoming, the
Certificate will terminate without value at the end of the grace period. If the
Insured under Colonial Heritage I or the last surviving Insured under Colonial
Heritage II dies during the grace period, the Death Benefit payable under the
Certificate will be reduced by the amount of the monthly deduction due and
unpaid and the amount of any outstanding Certificate Debt. In addition, if the
Cash Value of the Certificate at any time should decrease so the aggregate
amount of outstanding Certificate Debt secured by the Certificate exceeds the
Cash Value shown in the Certificate and an additional payment is not made within
sixty-one days the Certificate will lapse.
Reinstatement. If the Certificate lapses, the Certificate Owner may
reinstate the Certificate. The terms of the original Certificate will apply upon
reinstatement. The Accumulation Value, before payment of the required
reinstatement premium, will equal the Accumulation Value on the date of
termination. The Certificate year on reinstatement will be measured from the
Certificate Date. An application for reinstatement may be made any time within
five years of lapse and before the Maturity Date, but satisfactory proof of
insurability of the Insured under Colonial Heritage I or the Insureds or
surviving Insured under Colonial Heritage II and payment of a reinstatement
premium is required. The reinstatement premium, after deduction of the state
premium tax charge, the federal DAC tax charge and the sales charge, must be
sufficient to cover the monthly deduction for three Certificate months following
the effective date of reinstatement. If a loan was outstanding at the time of
lapse, Colonial Life will require, at the election of the Certificate Owner,
repayment or reinstatement of the loan before permitting reinstatement of the
Certificate. The effective date will be the date of approval of the
reinstatement application, which will be as of a Monthly Anniversary Date.
Conversion. If the Insured's coverage under the Group Policy ends for any
reason other than the non-payment of premiums, the Certificate Owner may convert
the insurance under the Group Policy to a comparable, individual policy without
evidence of insurability. The Certificate Owner must apply for the individual
policy and pay the first premium within 31 days after coverage under the Group
Policy ends. The new policy will be non-participating and issued subject to the
following:
(i) The policy will be on one of the forms Colonial Life customarily issues
at the time of conversion, other than term;
(ii) The policy will be issued at the amount and age applied for;
(iii) The amount of the policy may not exceed the Specified Amount of the
Certificate which ends; and
<PAGE>
(iv) The premium for the policy will be at Colonial Life's usual rate, and
it will be based on the amount of insurance, risk class, type of policy and age
at the policy issued date.
If the Insured dies during the time in which the Certificate is entitled to
be converted, Colonial Life will pay the Death Benefit which was in effect under
the Certificate just prior to its termination. Colonial Life will deduct any
overdue monthly deduction, which is applicable to the conversion period, from
the proceeds of the Insured's coverage. This will be done whether or not the
Certificate Owner actually applied for the individual policy. Any policy issued
pursuant to this provision will take effect at the end of the 31-day period in
which application must be made.
Certificate "Free Look". The Certificate Owner has a limited right to
return a Certificate for cancellation and a full refund of all premiums paid.
Colonial Life will cancel the Certificate if it is returned by mail or personal
delivery to Colonial Life, or to the agent who sold the Certificate, within 20
days after the delivery of the Certificate to the Certificate Owner. Colonial
Life will return to the Certificate Owner within seven days all payments
received on the Certificate. Prior to the Allocation Date the initial Net
Premium will be held in Colonial Life's General Account; Colonial Life will
retain any interest earned if the "free look" right is exercised.
CHARGES AND DEDUCTIONS
Premium Charges. Upon receipt of each premium payment and before
allocation of payment among the Divisions and the General Account, Colonial Life
will deduct a state premium tax charge of 2.0%. This charge is designed to
compensate Colonial Life for state premium taxes, franchise taxes and other
local taxes imposed on premiums by the State of New York and local
jurisdictions. The actual taxes imposed on Colonial Life may fall between 1.7%
and 2.5% of premiums received. As a result, the 2.0% charge may at times be
higher or lower than the actual taxes incurred by Colonial Life. Colonial Life
reserves the right to increase this charge to Certificate Owners up to a maximum
of 2.5%. Colonial Life does not expect to realize a profit from this charge.
Colonial Life will also deduct from each premium a charge currently equal
to 1.25% to cover the estimated cost to Colonial Life of the federal income tax
treatment of the Group Policies' and Certificates' deferred acquisition costs
(the "federal DAC tax charge"). Colonial Life has determined that this charge
is reasonable in relation to Colonial Life's increased federal income tax burden
under the Code resulting from the receipt of premiums. Colonial Life will not
increase this charge under outstanding Group Policies and Certificates, but
reserves the right, subject to any required regulatory approval, to change this
charge for Group Policies and Certificates thereunder not yet issued in order to
correspond with changes in the DAC tax.
Colonial Life will deduct a sales charge of 3% from each premium payment to
compensate Colonial Life for the cost of selling the Certificates. The cost of
selling the Certificates includes, among other things, agents' commissions,
commission overrides, advertising and the printing of prospectuses and sales
literature. Under normal circumstances, the amount of this charge, plus the
Surrender Charge discussed below, are expected to compensate Colonial Life for
total sales expenses for that year. To the extent sales expenses in any one
Certificate year are not recovered by this 3% sales charge and the sales charge
imposed upon surrenders or withdrawals during the first five Certificate years,
the sales expenses may be recovered from other sources, including surplus, which
may include profits, if any, from the mortality and expense Risk Charge.
Monthly Deduction. On each Monthly Anniversary Date and on the
Certificate Date, Colonial Life will deduct from the Accumulation Value of a
Certificate an amount to cover certain charges and expenses incurred in
connection with the Certificate. The amount of the monthly deduction is equal to
the cost of insurance for the Certificate as described below, and the cost of
any optional benefits added by rider. The amount deducted will be deducted pro
rata from each of the Divisions and the General Account, excluding the amount
held in the General Account as loan collateral, in which the Certificate Owner
is invested.
<PAGE>
The cost of insurance is determined on a monthly basis, and is determined
separately for the initial Specified Amount and each subsequent increase in the
Specified Amount. The monthly current cost of insurance rate is based on the
sex, Issue Age, Certificate year, smoking status and rating class of the
Insured(s), Specified Amount, Death Benefit option and applicable corridor
percentage.
The cost of insurance is calculated as (i) multiplied by the result of (ii)
minus (iii) where:
(i) is the cost of insurance rate as described in the Cost of Insurance
Rates provision contained in the Certificate.
(ii) is the Death Benefit at the beginning of the Certificate month divided
by 1.00327374, to arrive at the proper values for the beginning of the month
assuming the guaranteed interest rate of 4% that is applicable to the General
Account portion of the Certificate; and
(iii) is the Accumulation Value at the beginning of the Certificate month.
If the corridor percentage is applicable, the Death Benefit used in the
foregoing calculation will reflect the corridor percentage. The cost of
insurance charge is not affected by the death of the first Insured to die under
Colonial Heritage II.
The monthly cost of insurance rate will be determined by Colonial Life
based upon expectations as to future mortality experience, but can never exceed
the rates shown in the table of Monthly Guaranteed Cost of Insurance Rates set
forth in the Certificate. Such guaranteed maximum rates are based on the
Commissioner's 1980 Standard Ordinary Mortality Table.
A guaranteed Monthly Deduction Adjustment will be calculated at the
beginning of each Certificate year and subtracted from the cost of insurance for
each month of that Certificate year during which the discount is in effect. The
Adjustment will be allocated between the Divisions and the General Account in
the same proportion as premium payments. The Adjustment is calculated as (i)
multiplied by the result of (ii) minus (iii) minus (iv), but not less than zero,
where:
(i) is a factor that varies by Specified Amount as follows:
Under $5,000,000............ .0001250
$5,000,000 to $9,999,999.... .0002500
$10,000,000 to $14,999,999.. .0003750
$15,000,000 and Above....... .0004583
(ii) is an amount no greater than the Accumulation Value at the
beginning of the Certificate year, and guaranteed to be at least the
Accumulation Value at the beginning of the Certificate year less any unloaned
funds in the General Account;
(iii) is the Guideline Single Premium at issue under Section 7702 of
the Code, increased on a pro-rata basis for any increase in Specified Amount;
and
(iv) is the outstanding Type A loan balance at the beginning of the
Certificate year. See "CASH VALUE BENEFITS--Certificate Loans" for a description
of Type A loans.
The Monthly Deduction Adjustment is the mechanism whereby Colonial Life
annually evaluates its mortality risk exposure on individual Certificates based
on, among other factors, the proceeds from all mortality charges, including the
cost of insurance charge and the mortality risk portion of the Risk Charge. The
insurance charges are
<PAGE>
set at rates designed to cover total anticipated mortality experience, i.e.,
Death Benefit payments, taking into consideration the risk that actual
experience may exceed Colonial Life's expectation. Of course, as the amount at
risk under any one Certificate decreases, i.e., Accumulation Value increases,
Colonial Life's exposure on such Certificate will be reduced. Moreover, Colonial
Life 's risk decreases as the Specified Amount increases. The Monthly Deduction
Adjustment formula factors in Accumulation Value and Specified Amount. Thus, the
Monthly Deduction Adjustment may be translated into a net reduction of the Risk
Charge which is applied to the Accumulation Value. As shown in the following
table, the Monthly Deduction Adjustment may be expressed as a reduction in the
mortality portion of the Risk Charge, discussed below.
<TABLE>
<CAPTION>
Mortality Mortality
Monthly Risk Risk Effective
Mortality Deduction Charge Charge Mortality
Risk Adjust- Below Above Risk
Specified Amount Charge ment GSP* GSP* Charge
---------------- ------ ---- ---- ---- ------
<S> <C> <C> <C> <C> <C>
$500,000--$4,999,999 .55% .15% .55% .40% .475%
$5,000,000--$9,999,999 .55% .30% .55% .25% .40%
$10,000,000--$14,999,999 .55% .45% .55% .10% .325%
$15,000,000 and Above .55% .55% .55% .0% .275%
</TABLE>
- ------------
* Assumes that Accumulation Value, less any Type A loans, at the beginning of
the Certificate year is twice the Guideline Single Premium ("GSP").
Risk Charge. Colonial Life will also assess a charge on a daily basis
against each Division at an annual rate of .65% of the value of the Division to
compensate Colonial Life for its assumption of certain mortality and expense
risks in connection with the Certificate. Specifically, Colonial Life bears the
risk that the total amount of Death Benefit payable under the Certificate will
be greater than anticipated and Colonial Life also assumes the risk that the
actual cost incurred by it to administer the Certificate will not be covered by
charges assessed under the Certificate.
Surrender Charge. Upon surrender during the first five Certificate years,
Colonial Life will assess a contingent deferred sales charge. This contingent
deferred sales charge will be 5% of first year premiums for surrender during the
first Certificate year, 4% of first year premiums for surrender during the
second Certificate year, 3% of first year premiums for surrender during the
third Certificate year, 2% of first year premiums for surrender during the
fourth Certificate year and 1% of first year premiums for surrender during the
fifth Certificate year. There is no Surrender Charge assessed for surrender
after the fifth Certificate year. A pro rata portion of any Surrender Charge
will be assessed upon a withdrawal. The Certificate's Accumulation Value will be
reduced by the amount of any withdrawal plus any applicable pro-rata Surrender
Charge.
The Surrender Charge helps to compensate Colonial Life for the cost of
selling the Certificates, including the cost of advertising and the printing of
the Prospectus and sales literature.
Administrative Fees. An administrative fee equal to $100 is imposed for
each transfer among the Divisions or the General Account, after the first 12
transfers in a Certificate year and except for the transfer of the initial Net
Premium payments, plus interest, from the General Account on the Allocation
Date, loan repayments and transfers pursuant to the Dollar Cost Averaging and
Automatic Portfolio Re-Balancing features. For withdrawals, an administrative
fee equal to $100 will be charged. All administrative fees are no greater than
the anticipated expenses of providing such services.
Other Charges. Colonial Life also reserves the right to charge the assets
of each Division to provide for any income taxes or other taxes payable by
Colonial Life on the assets attributable to that Division. An investment
advisory fee for services provided by the Trust's investment manager and sub-
investment adviser and certain other
<PAGE>
operating expenses are deducted from the assets of each Portfolio of the Trust.
See "CHUBB SERIES TRUST".
CERTIFICATE BENEFITS AND RIGHTS
Death Benefits. So long as it remains in force, Colonial Heritage I
provides for the payment of life insurance proceeds upon the death of the
Insured and Colonial Heritage II provides for a Death Benefit payable upon the
death of the last surviving Insured. Proceeds will be paid to a named
Beneficiary or contingent Beneficiary. One or more Beneficiaries or contingent
Beneficiaries may be named. Life insurance proceeds may be paid in a lump sum or
under an optional payment plan. (See "SETTLEMENT OPTIONS" below.) Proceeds of
the Certificate will be reduced by any outstanding Certificate Debt and any due
and unpaid charges and increased by any benefits added by rider. Proceeds that
are payable in a lump sum will be increased to include interest as required by
applicable state law. Proceeds will ordinarily be paid within seven days after
Colonial Life receives due Proof of Death. Under Colonial Heritage II, due Proof
of Death must also be submitted at the time of the first death.
A Certificate Owner will make in the initial application two elections to
determine the Death Benefit under the Certificate. First, the Certificate Owner
will choose one of two Death Benefit options offered under the Certificate.
Second, the Certificate Owner will choose the Death Benefit qualification test,
which is the method for qualifying the Certificate as a life insurance contract
for purposes of Federal tax law. If no Death Benefit qualification test or
option is designated, the guideline premium test under Option I, as described
below, will be assumed by Colonial Life to have been selected.
The amount of life insurance proceeds payable under a Certificate will
depend upon the option in effect, as follows:
Option I: For Certificates issued pursuant to the cash value accumulation
test, the Death Benefit equals the greater of the current Specified Amount or
the Accumulation Value of the Certificate at the date of death multiplied by the
corridor percentage, as described below. For Certificates issued pursuant to
the guideline premium test, the Death Benefit equals the greater of the current
Specified Amount or the Accumulation Value of the Certificate at the date of
death multiplied by the corridor percentage, as described below.
Option II: The Death Benefit equals the current Specified Amount plus the
Accumulation Value of the Certificate on the date of death. For Certificates
issued pursuant to the cash value accumulation test, the Death Benefit will not
be less than the Accumulation Value on the date of death multiplied by the
corridor percentage, as described below. For Certificates issued pursuant to
the guideline premium test, the Death Benefit will not be less than the
Accumulation Value multiplied by the corridor percentage, as described below
Option I emphasizes the impact of investment experience on Accumulation
Value rather than insurance coverage because the Specified Amount and the Death
Benefit, generally, remain stable. Under Option I, as Accumulation Value
increases and the Death Benefit does not increase, the amount at risk decreases.
Thus, the cost of insurance charges are imposed on a decreasing amount. Option
II emphasizes insurance coverage because favorable investment experience adds to
the Accumulation Value that provides an addition to the total Death Benefit.
Under Option II, favorable investment experience does not reduce the amount at
risk upon which cost of insurance charges are based.
The corridor percentage is a minimum ratio of Death Benefit to Accumulation
Value required pursuant to the cash value corridor test under Section 7702 of
the Code. The Certificate Owner has the option to select this minimum corridor
percentage under the Code or an alternative corridor percentage that produces a
higher corridor percentage beginning in Certificate year 25 which grades back to
the minimum corridor percentage at the Maturity Date. Use of the alternative
corridor percentage results in a higher ratio of Death Benefit to Accumulation
Value than that resulting from the use of the minimum corridor percentage
beginning in Certificate year 25. This higher ratio then gradually reduces
until, by the Maturity Date, it is equal to the ratio produced by use of the
minimum
<PAGE>
corridor percentage. Although use of the alternative corridor percentage results
in a higher Death Benefit than the minimum corridor percentage beginning in
Certificate year 25, this higher Death Benefit results in higher cost of
insurance charges which has the effect of reducing Accumulation Value and
consequently future Death Benefits.
The Certificate Owner will also choose from two Death Benefit qualification
tests available under a Certificate. Once elected, the Death Benefit
qualification test cannot be changed for the duration of the Certificate. The
available Death Benefit qualification test cannot be changed for the duration of
the Certificate. The available Death Benefit qualification tests are the cash
value accumulation test and the guideline premium test.
Generally, the cash value accumulation test requires that under the terms
of a Certificate, the Death Benefit must be sufficient so that the cash
surrender value, as defined in Section 7702 of the Internal Revenue Code, does
not at any time exceed the net single premium required to fund the future
benefits under the Certificate. If the Accumulation Value under a Certificate
is at any time greater than the net single premium at the Insured's age and sex
for the proposed Death Benefit, the Death Benefit will be incrased automatically
by multiplying the Accumulation Value by the corridor percentage computed in
compliance with the Code. A list of representative corridor percentages is set
forth in Appendix A to this Prospectus. The corridor percentages under the
Certificate vary according to the Age, sex, and underwriting classification of
the Insured(s), and the resulting Death Benefit determined by using the corridor
percentage will be at least equal to the amount required for the Certificate to
be deemed life insurance under Section 7702. The corridor percentage is
calculated using a four percent interest rate, or, if higher, the contractually
guaranteed interest rate and using mortality charges specified in the prevailing
Commissioner's standard table as of the time the Certificate is issued.
The guideline premium test limits the amount of premiums payable under a
Certificate to a certain amount for an Insured of a particular age and sex. The
test also applies a prescribed corridor percentage to determine a minimum ratio
of Death Benefit to Accumulation Value. A complete list of corridor percentages
is set forth in Appendix B to this Prospectus.
There are two main differences between the guideline premium test and the
cash value accumulation test. First, the guideline premium test limits the
amount of premium that may be paid into a Certificate. No such limits apply
under the cash value accumulation test. (However, any premium that wouild
incrase the net amount at risk is subject to evidence of insurability
satisfactory to Colonial Life.) Second, the factors that determine the minimum
Death Benefit relative to the Certificate's Accumulation Value are different.
Required increases in the minimum Death Benefit due to growth in Accumulation
Value will generally be greater under the cash value accumulation test than
under the guideline premium test. Certificate Owners who desire to pay premiums
in excess of the guideline premium test limitations should elect the cash value
accumulation test. Certificate Owners who do not desire to pay premiums in
excess of the guideline premium test limitations should consider the guideline
premium test. Applicants for a Certificate should consult a qualified tax
adviser in choosing a Death Benefit election.
The following examples demonstrate the determination of Death Benefits
under Options I and II for the cash value accumulation test and the guideline
premium test. The examples show a Colonial Heritage I certificate and a
Colonial Heritage II certificate, with the same Specified Amounts and
Accumulation Values. The Colonial Heritage I example assumes a Certificate was
issued to a male, non-smoker Insured, Age 45 at the time of calculation of the
Death Benefit and that there is no outstanding Certificate Debt. The Colonial
Heritage II example considers a Certificate issued to one male and one female,
both non-smokers, and both Age 45. The certificate is in its tenth certificate
year without any outstanding Certificate Debt and with both insureds having
attained age 55.
Colonial Heritage I
<TABLE>
<CAPTION>
Cash Value Guideline
Accumulation Test Premium Test
----------------- ------------
<S> <C> <C>
Specified Amount 1,000,000 1,000,000
Accumulation Value 500,000 500,000
Corridor Percentage 314% 215%
</TABLE>
<PAGE>
Death Benefit Option I 1,570,000 1,075,000
Death Benefit Option II 1,570,000 1,500,000
Colonial Heritage II
Specified Amount 2,000,000 2,000,000
Accumulation Value 1,000,000 1,000,000
Corridor Percentage 306% 150%
Death Benefit Option I 1,530,000 2,000,000
Death Benefit Option II 3,060,000 3,000,000
The Death Benefit option in effect may be changed by sending Colonial Life
a written request for change. The effective date of the change will be the first
Monthly Anniversary Date that coincides with or next follows the Date of Receipt
of such request. If the Death Benefit option is changed from Option II to Option
I, the Specified Amount will be increased by the Certificate's Accumulation
Value on the effective date of the change. Conversely, if the Death Benefit
option is changed from Option I to Option II, the Specified Amount will be
decreased by the Certificate's Accumulation Value on the effective date of the
change. Evidence of insurability satisfactory to Colonial Life will be required
on a change from Option I to Option II. A change in the Death Benefit option may
not be made if it would result in a Specified Amount which is less than a
minimum Specified Amount of $250,000 on Colonial Heritage I and $500,000 on
Colonial Heritage II. A change in Death Benefit options will affect the cost of
insurance.
After a Certificate has been in force for one year, the Certificate Owner
may adjust the existing insurance coverage by increasing or decreasing the
Specified Amount. The increase or decrease must be at least $250,000 on Colonial
Heritage I and $500,000 on Colonial Heritage II. To make a change, the
Certificate Owner must send a written request and the Certificate to Colonial
Life's Service Center. Any change in the Specified Amount will affect a
Certificate Owner's cost of insurance charge. An increase in the Specified
Amount will affect the determination of the amount available for a Type A loan,
as explained below, and will affect the Monthly Deduction Adjustment, if any.
Decreases in the Specified Amount may affect the Monthly Deduction Adjustment
but will have no affect on the determination of the amount available for a Type
A loan. Any decrease in the Specified Amount will become effective on the
Monthly Anniversary Date after the Date of Receipt of the request. Any decrease
in Specified Amount will first apply to coverage provided by the most recent
Specified Amount increase, then to the next most recent increases successively
and finally to the coverage under the original application. By applying
decreases in this manner, savings, generally, may be realized by a Certificate
Owner since additional costs and limitations associated with increases in
Specified Amounts would be eliminated first.
To apply for an increase in the Specified Amount, a supplemental
application must be completed and evidence satisfactory to Colonial Life that
each Insured is insurable must be submitted. Any approved increase in the
Specified Amount will become effective on the date shown in the Supplemental
Certificate Specifications Page. Such increase will not become effective,
however, if the Certificate's Cash Value is insufficient to cover the deduction
for the cost of the increased insurance for the Certificate month following the
increase. Such an increase may require a payment or future increased Planned
Periodic Premiums.
GUARANTEED DEATH BENEFIT. The Certificate Owner may add a Guaranteed
Death Benefit Rider to the Certificate under which the Death Benefit is
guaranteed to never be less than the Specified Amount provided that a cumulative
minimum premium requirement is met. The premium requirement is based on Issue
Age, sex, smoking status, underwriting class, Specified Amount and Death Benefit
Option. If the Specified Amount is increased, an additional premium, based on
Attained Age, will be required for such increase. There is a monthly charge for
this Death Benefit Rider. See "Optional Insurance Benefits".
<PAGE>
Combined Requests. Certificate Owners may combine requests for changes in
the Specified Amount and the Death Benefit option and requests for withdrawals.
The requirements and limitations that apply to each change will apply to the
combined transactions, including any required evidence of insurability,
Specified Amount and premium limitations, effectiveness on the Monthly
Anniversary Date following the Date of Receipt of the request, and the
sufficiency of Cash Value to keep the Certificate in force for the month
following the transaction.
The effect of a combined transaction on the cost of insurance, the amount
of the Death Benefit proceeds and the premium limitations will be the net result
of such effects for each such transaction considered separately. Certificate
Owners should consider the net result of a combined transaction in light of
insurance needs, financial circumstances and tax consequences.
Maturity of the Certificate. As long as the Certificate remains in force,
Colonial Life will pay the Certificate's Cash Value, less outstanding
Certificate Debt, if any, on the Maturity Date. Benefits at maturity may be paid
in a lump sum or under an optional payment plan. The Maturity Date is the date
shown in the Certificate. To change the Maturity Date, a written request and the
Certificate must be sent to Colonial Life's Service Center. The Date of Receipt
for any request must be before the Maturity Date then in effect. The requested
Maturity Date must be (i) on a Certificate anniversary, (ii) at least one year
from the Date of Receipt of the request, (iii) after the tenth Certificate year
and (iv) on or before the Certificate anniversary nearest to the Insured's 100th
birthday for Colonial Heritage I and the younger Insured's 100th birthday for
Colonial Heritage II.
Optional Insurance Benefits. Subject to certain requirements, one or more
of the following optional insurance benefits may be added to a Certificate by
rider. More detailed information concerning such riders may be obtained from the
agent selling the Certificate. Additional riders, developed after the effective
date of this Prospectus, may also be available as optional insurance benefits to
the Certificate. The agent selling the Certificate should be consulted regarding
the availability of any such additional riders. The cost of any optional
insurance benefits will be deducted as part of the monthly deduction. See
"CHARGES AND DEDUCTIONS."
(a) Guaranteed Death Benefit Rider. This rider guarantees that the
Certificate will stay in force with a Death Benefit equal to the Specified
Amount, even if the Cash Value less Certificate Debt is not sufficient to pay
the monthly deduction, provided that cumulative premiums paid, less loans and
withdrawals, are greater than or equal to the guaranteed death benefit premium
multiplied by the number of months the Certificate has been in force. This
cumulative premium requirement must be met at all times for the rider to stay in
force. A monthly charge of $.01 per $1,000 of Specified Amount will be deducted
from the Certificate's Accumulation Value.
(b) Automatic Increase Rider. This rider allows for scheduled annual
increases in Specified Amount of from 1% to 7%, subject to certain limitations
set forth in the rider. There is a monthly charge per unit of Specified Amount
which varies by Issue Age on Colonial Heritage I and by Joint Equal Age at issue
on Colonial Heritage II.
(c) Certificate Exchange Option Rider. This rider is available on
Colonial Heritage II provided both Insureds are insurable. It allows Colonial
Heritage II to be exchanged for two individual Colonial Heritage I Certificates,
without evidence of insurability, each with a face amount equal to one half of
the Death Benefit under Colonial Heritage II at the time of exchange, upon the
Insureds' divorce or the occurrence of certain federal tax law changes as
specified in the rider. There is no charge for this rider.
(d) Extension of Maturity Date Rider. This rider allows the Certificate
Owner to extend the original Maturity Date of the Certificate under the terms
set forth in the rider.
(e) Exchange of Insured Rider. This benefit is available under Colonial
Heritage I, and provides that the Certificate may be exchanged for a reissued
certificate on the life of a substitute insured, subject to the conditions
stated in the rider. A charge of $150 will be assessed for exercising the
option. See "FEDERAL TAX MATTERS."
<PAGE>
Settlement Options. In addition to a lump sum payment of benefits under
the Certificate, any proceeds to be paid under the Certificate may be paid in
any of four methods. A settlement option may be designated by notifying Colonial
Life in writing. A lump sum payment of proceeds under the Certificate will be
made if a settlement option is not designated. Any amount left with Colonial
Life for payment under an optional payment plan will be transferred to the
account of the Beneficiary in the General Account on the date Colonial Life
receives written instructions. During the life of the Insured, the Certificate
Owner may select a plan. If a payment plan has not been chosen at the time the
Death Benefit becomes payable, a Beneficiary can choose a plan. If a Beneficiary
is changed, the payment plan selection will no longer be in effect unless the
Certificate Owner requests that it continue. An option may be elected only if
the amount of the proceeds is $2,000 or more. Colonial Life reserves the right
to change the interval of payments to 3, 6 or 12 months, if necessary, to
increase the guaranteed payments to at least $20 each.
Option A.
Installments of a specified amount. Payments of an agreed amount to be
made each month until the proceeds and interest are exhausted.
Option B.
Installments for a specified period. Payments to be made each month for
an agreed number of years.
Option C.
Life income. Payments to be made each month for the lifetime of the
payee. It is guaranteed that payments will be made for a minimum of 10, 15, or
20 years, as agreed upon.
Option D.
Interest. Payment of interest on the proceeds held by Colonial Life
calculated at the compound rate of 3% per year. Interest payments will be made
at 12, 6, 3 or 1 month intervals, as agreed upon.
The interest rate for Options A, B, and D will not be less than 3% per
year. The interest rate for Option C will not be less than 2 1/2% per year.
Interest in addition to that stated may be paid or credited from time to time
under any option, but only in the sole discretion of Colonial Life.
Unless otherwise stated in the election of an option, the payee of
Certificate benefits shall have the right to receive the withdrawal value under
that option. For Options A and D, the withdrawal value shall be any unpaid
balance of proceeds plus accrued interest. For Option B, the withdrawal value
shall be the commuted value of the remaining payments. Such value will be
calculated on the same basis as the original payments. For Option C, the
withdrawal value will be the commuted value of the remaining payments. Such
value will be calculated on the same basis as the original payments. To receive
this value under Option C, the payee must submit evidence of insurability
acceptable to Colonial Life. Otherwise, the withdrawal value shall be the
commuted value of any remaining guaranteed payments. If the payee should be
alive at the end of the guaranteed period, the payment will be resumed on that
date. The payment will then continue for the lifetime of the payee.
If a payee of Certificate benefits dies before the proceeds are exhausted
or the prescribed payments made, a final payment will be made in one sum to the
estate of the last surviving payee. The amount to be paid will be calculated as
described for the applicable option in the Withdrawal Value provision of the
Certificate.
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CALCULATION OF ACCUMULATION VALUE
The Certificate provides for an Accumulation Value, which will be
determined on a daily basis. Accumulation Value is the sum of the values in the
Divisions plus the value in the General Account. The Certificate's Accumulation
Value in the Divisions is calculated by units and unit values under the
Certificates, as described below. The Certificate's Accumulation Value will
reflect a number of factors, including the investment experience of the
Divisions that are invested in the Portfolios, any additional net premiums paid,
any withdrawals, any Certificate loans, and any charges assessed in connection
with the Certificate. Accumulation Values in Separate Account D are not
guaranteed as to dollar amount.
On the Allocation Date, the Accumulation Value in Separate Account D is the
initial premium payments, reduced by the state tax charge, the federal DAC tax
charge and the sales charge, plus interest earned prior to the Allocation Date,
and less the monthly deduction for the first Certificate month. On the
Allocation Date, the initial number of units credited to Separate Account D for
the Certificate will be established. At the end of each Valuation Period
thereafter, the Accumulation Value in a Division is (i) plus (ii) plus (iii)
minus (iv) minus (v) where:
(i) is the Accumulation Value in the Division on the preceding Valuation
Date multiplied by the net investment factor, as described below, for the
current Valuation Period,
(ii) is any Net Premium received during the current Valuation Period which
is allocated to the Division,
(iii) is all Accumulation Values transferred to the Division from another
Division or the General Account during the current Valuation Period,
(iv) is the Accumulation Values transferred from the Division to another
Division or the General Account and Accumulation Values transferred to secure a
Certificate loan during the current Valuation Period, and
(v) is all withdrawals from the Division during the current Valuation
Period.
In addition, whenever a Valuation Period includes the Monthly Anniversary
Date, the Accumulation Value at the end of such period is reduced by the portion
of the monthly deduction allocated to the Division.
The Certificate's total Accumulation Value in Separate Account D equals the
sum of the Certificate's Accumulation Value in each Division thereof.
Unit Values. Units are credited to a Certificate Owner upon allocation of
Net Premiums to a Division. Each Net Premium payment allocated to a Division
will increase the number of units in that Division. Both full and fractional
units are credited. The number of units and fractional units is determined by
dividing the Net Premium payment by the unit value of the Division to which the
payment has been allocated. The unit value of each Division is determined on
each Valuation Date. The number of units credited will not change because of
subsequent changes in unit value. The dollar value of each Division's units will
vary depending upon the investment performance of the corresponding Portfolio of
the Trust.
Certain transactions affect the number of units in a Division under a
Certificate. Loans, surrenders and withdrawals, withdrawal and transfer fees and
charges, the Surrender Charge, and monthly deductions involve the redemption of
units and will decrease the number of units. Transfers of Accumulation Value
among Divisions will reduce or increase the number of units in a Division, as
appropriate.
The unit value of each Division's units initially under the Certificates
was $10.00. Thereafter, the unit value of a Division on any Valuation Date is
calculated by multiplying (1) by (2) where:
(1) is the Division's unit value on the previous Valuation Date; and
(2) is the net investment factor for the Valuation Period then ended.
<PAGE>
The unit value of each Division's units on any day other than a Valuation
Date is the unit value as of the next Valuation Date and is used for the purpose
of processing transactions.
Net Investment Factor. The net investment factor measures the investment
experience of each Division and is used to determine changes in unit value from
one Valuation Period to the next Valuation Period. The net investment factor for
a Valuation Period is (i) divided by (ii) minus (iii) where:
(i) is (a) the value of the assets of the Division at the end of the
preceding Valuation Period, plus (b) the investment income and capital gains,
realized or unrealized, credited to the assets of the Division during the
Valuation Period for which the net investment factor is being determined, minus
(c) capital losses, realized or unrealized, charged against those assets during
the Valuation Period, minus (d) any amount charged against the Division for
taxes or any amount set aside during the Valuation Period by Colonial Life to
provide for taxes attributable to the operation or maintenance of that Division,
and
(ii) is the value of the assets of the Division at the end of the preceding
Valuation Period, and
(iii) is a charge no greater than .0017808% on a daily basis. This
corresponds to .65% on an annual basis for mortality and expense risks.
CASH VALUE BENEFITS
So long as it remains in force, the Certificate provides for certain
benefits prior to the Maturity Date. Subject to certain limitations, the
Certificate Owner may at any time obtain Cash Value by surrendering the
Certificate or making withdrawals from the Certificate. The Cash Value equals
the Accumulation Value less any Surrender Charge. In addition, the Certificate
Owner has certain Certificate loan privileges under the Certificate.
Surrender Privileges. As long as the Certificate is in force, a
Certificate Owner may surrender the Certificate or make a withdrawal from the
Certificate at any time by sending a written request along with the Certificate
to Colonial Life. See "FEDERAL TAX MATTERS--Certificate Proceeds."
The surrender value of the Certificate equals the Cash Value less any
outstanding Certificate Debt. The amount payable upon surrender of the
Certificate is the surrender value at the end of the Valuation Period during
which the request is received. The surrender value may be paid in a lump sum or
under one of the optional payment plans specified in the Certificate. Proceeds
will generally be paid within seven days of the Date of Receipt of a request for
surrender or withdrawal. See "CERTIFICATE BENEFITS AND RIGHTS--Settlement
Options."
A Certificate Owner can obtain a portion of the Certificate's Cash Value by
withdrawal of Cash Value from the Certificate. A withdrawal from a Certificate
is subject to the following conditions:
A. The amount withdrawn may not exceed the Cash Value less any outstanding
Certificate Debt.
B. The minimum amount that may be withdrawn is $5,000.
C. A charge of $100 will be deducted from the amount of each withdrawal.
Withdrawals generally will affect the Certificate's Accumulation Value,
Cash Value and the life insurance proceeds payable under the Certificate. The
Certificate's Cash Value will be reduced by the amount of the withdrawal. The
Certificate's Accumulation Value will be reduced by the amount of the withdrawal
plus any applicable pro-rata Surrender Charge. Life insurance proceeds payable
under the Certificate will generally be reduced by the amount of the withdrawal
plus any applicable pro-rata Surrender Charge, unless the withdrawal is
<PAGE>
combined with a request to maintain or increase the Specified Amount. See
"CERTIFICATE BENEFITS AND RIGHTS--Combined Requests".
Under Option I, which provides for life insurance proceeds equal to the
greater of the Specified Amount or the Accumulation Value of the Certificate at
the date of death multiplied by the corridor percentage, the Specified Amount
will be reduced by the amount of the withdrawal plus any applicable pro-rata
Surrender Charge. The Specified Amount remaining after a withdrawal may not be
less than $250,000 for Colonial Heritage I and $500,000 for Colonial Heritage
II. As a result, Colonial Life will not effectuate any withdrawal that would
reduce the Specified Amount below these minimums. If increases in Specified
Amount previously have occurred, a withdrawal will first reduce the Specified
Amount of the most recent increase, then the most recent increases successively,
then the coverage under the original application. If the life insurance proceeds
payable under either Death Benefit option, both before and after the withdrawal,
is the Accumulation Value multiplied by the corridor percentage, a withdrawal
generally will result in a reduction in life insurance proceeds equal to the
amount paid upon withdrawal, multiplied by the corridor percentage then in
effect.
Under Option II, which provides for life insurance proceeds equal to the
Specified Amount plus Accumulation Value, a reduction in Accumulation Value as a
result of a withdrawal will typically result in a dollar per dollar reduction in
the life insurance proceeds payable under the Certificate.
A Certificate Owner may allocate a withdrawal among the Divisions and the
General Account. If no such allocation is made, a withdrawal will be allocated
among the Divisions and the General Account in the same proportion that the
Accumulation Value in each Division and the Accumulation Value in the General
Account, less any Certificate Debt bears to the total Accumulation Value of the
Certificate, less any Certificate Debt, on the date of withdrawal. See "FEDERAL
TAX MATTERS--Certificate Proceeds".
Certificate Loans. So long as the Certificate remains in force, a
Certificate Owner may borrow money from Colonial Life at any time after the
first Certificate anniversary using the Certificate as the only security for the
loan. Loans have priority over the claims of any assignee or any other person.
Generally, the maximum loan amount is 90% of the Cash Value at the end of the
Valuation Period during which the loan request is received. The maximum amount
which may be borrowed at any given time is the maximum loan amount reduced by
any outstanding Certificate Debt.
Proceeds of Certificate loans ordinarily will be disbursed within seven
days from the Date of Receipt of a request for a loan by Colonial Life, although
payments may be postponed under certain circumstances. See "OTHER MATTERS--
Postponement of Payments". Colonial Life may, in its discretion, permit loans
to be made by telephone if the proper authorization form is on file with
Colonial Life. So long as the Certificate remains in force, the loan may be
repaid in whole or in part without penalty at any time while an Insured is
living.
When a Certificate loan is made, a portion of the Certificate's
Accumulation Value sufficient to secure the loan will be transferred to the
General Account. A Certificate loan removes the proceeds from the investment
experience of Separate Account D which will have a permanent effect on the
Accumulation Value and Death Benefit even if the loan is repaid. Any loan
interest that is due and unpaid will also be so transferred. Accumulation Value
equal to Certificate Debt in the General Account will accrue interest daily at
an annual rate of 6%. The Certificate Owner may allocate a Certificate loan
among the Divisions and the General Account. If no such allocation is made the
loan will be allocated among the Divisions and the General Account in the same
proportion that the Accumulation Value in each Division and the Accumulation
Value in the General Account less Certificate Debt bears to the total
Accumulation Value of the Certificate, less Certificate Debt, on the date of the
loan.
Colonial Life will charge interest on any outstanding Certificate loan with
such interest compounded annually. There are two types of loans available. A
Type A loan is charged the same interest rate as the interest credited to the
amount of Accumulation Value held in the General Account to secure loans. The
unloaned Type A balance is the Cash Value, less the threshold, and less the sum
of any outstanding Type A loans. The threshold is the
<PAGE>
Guideline Single Premium for this certificate at issue as defined in Section
7702 of the Internal Revenue Code of 1986 entitled "Life Insurance Contract
Defined." Any other loans are Type B loans. A Type B loan is charged an interest
rate of 6.85%. It is possible for one loan request to result in both a Type A
and a Type B loan. A request for a loan will be granted first as a Type A loan,
to the extent available, and then as a Type B loan. Once a Certificate loan is
granted, it remains a Type A or Type B until it is repaid. Increases in the
Specified Amount will affect the determination of the amount available for a
Type A loan; however, decreases in the Specified Amount will not have any such
effect. Interest is due and payable at the end of each Certificate year, and any
interest not paid when due becomes loan principal.
Where applicable, loans are subject to conditions and requirements of the
Employee Retirement Income Security Act of 1974 ("ERISA"), as well as the
terms of any retirement plan in connection with which the Certificate has been
purchased. The ERISA rules relating to loans are complex and vary depending on
the individual circumstances of each Certificate. Employers and Certificate
Owners should consult with qualified advisers before exercising the loan
privileges.
Certificate Debt equals the total of all outstanding Certificate loans and
accrued interest on Certificate loans. If Certificate Debt exceeds Cash Value,
Colonial Life will notify the Certificate Owner and any assignee of record. A
payment at least equal to the amount of excess Certificate Debt above the Cash
Value must be made to Colonial Life within 61 days from the date Certificate
Debt exceeds Cash Value, otherwise, the Certificate will lapse and terminate
without value. In such event, the Certificate Owner may be taxed on the total
appreciation under the Certificate. The Certificate may, however, later be
reinstated, subject to satisfactory proof of insurability and the payment of a
reinstatement premium. See "THE CERTIFICATES--Reinstatement".
So long as the Certificate remains in force, Certificate Debt may be repaid
in whole or in part at any time during an Insured's life. If there is any
existing Certificate Debt, premium payments in the amount of the Planned
Periodic Premium, received at the Premium Frequency, will be applied as premium.
Premium payments in excess of the Planned Periodic Premium or premium payments
received other than at the Premium Frequency, will first be applied as
Certificate loan repayments, then as premium when the Certificate Debt is
repaid. For Certificate Owners with both Type A and Type B loans, repayments of
the loan will be applied first to Type B loans and then to Type A loans. Upon
repayment, the Certificate's Accumulation Value securing the repaid portion of
the debt in the General Account will be transferred to the Divisions and the
General Account using the same percentages used to allocate Net Premiums. Any
outstanding Certificate Debt is subtracted from life insurance proceeds payable
at the Insured's or last surviving Insured's death, from Accumulation Value upon
surrender, and from Cash Value payable on the Maturity Date.
OTHER MATTERS
Voting Rights. To the extent required by law, Colonial Life will vote the
Trust shares held in the various Divisions at regular and special shareholder
meetings of the Trust in accordance with instructions received from persons
having voting interests in Separate Account D. If, however, the 1940 Act or any
regulation thereunder should be amended or if the present interpretation thereof
should change and, as a result, Colonial Life determines that it is permissible
to vote the Trust shares in its own right, it may elect to do so. The number of
votes on which each Certificate Owner has the right to instruct will be
determined by dividing the Certificate's Accumulation Value in a Division by the
net asset value per share of the corresponding Portfolio in which the Division
invests, or as otherwise required by law. Fractional shares will be counted. The
number of votes on which the Certificate Owner has the right to instruct will be
determined as of the date coincident with the date established by the Trust for
determining shareholders eligible to vote at the meeting of the Trust. Voting
instructions will be solicited by written communications prior to such meeting
in accordance with procedures established by the Trust. Colonial Life will vote
Trust shares as to which no instructions are received in proportion to the
voting instructions which are received with respect to all Certificates
participating in the Trust in accordance with applicable law. Each person having
a
<PAGE>
voting interest will receive proxy material, reports and other materials
relating to the Trust. The shares held by Colonial Life, including shares for
which no voting instructions have been received, shares held in Separate Account
D representing charges imposed by Colonial Life against Separate Account D under
the Certificates and shares held by Colonial Life that are not otherwise
attributable to Certificates, will also be voted by Colonial Life in proportion
to instructions received from the owners of variable life insurance Certificates
funded through Separate Account D. Colonial Life reserves the right to vote any
or all such shares at its discretion to the extent consistent with then current
interpretations of the 1940 Act and rules thereunder.
Colonial Life may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that shares be voted
so as to cause a change in subclassification or investment objective of the
Trust or disapprove an investment advisory contract of the Trust. In addition,
Colonial Life may disregard voting instructions in favor of changes initiated by
a Certificate Owner in the investment policies or the investment adviser of the
Trust if Colonial Life reasonably disapproves of such changes. A change would be
disapproved only if the proposed change is contrary to state law or prohibited
by state regulatory authorities or Colonial Life determined that the change
would be inconsistent with the investment objectives of Separate Account D or
would result in the purchase of securities for Separate Account D which vary
from the general quality and nature of investments and investment techniques
utilized by other separate accounts created by Colonial Life or any affiliate of
Colonial Life which have similar investment objectives. In the event that
Colonial Life does disregard voting instructions, a summary of that action and
the reason for such actions will be included in the next semi-annual report to
the Certificate Owner.
Additions, Deletions or Substitutions of Investments. Colonial Life
reserves the right, subject to compliance with applicable law, to make additions
to, deletions from, or substitutions for the shares held by any Division or
which any Division may purchase. If shares of the Trust should no longer be
available for investment or if, in the judgment of Colonial Life's management,
further investment in shares of the Trust should become inappropriate in view of
the purposes of the Certificate, Colonial Life may substitute shares of any
other investment company for shares already purchased, or to be purchased in the
future under the Certificates. No substitution of securities will take place
without notice to and consent of Certificate Owners and without prior approval
of the Commission, all to the extent required by the 1940 Act. Any surrender of
a Certificate due to a change in a Portfolio's investment policy will incur any
applicable Surrender Charges.
Each class of Trust shares is subject to certain investment restrictions
which may not be changed without the approval of the majority of the holders of
such class. See the accompanying Prospectus for the Trust.
Annual Report. Each year a report will be sent to the Certificate Owner
which shows the current Accumulation Value, Cash Value, premiums paid and all
charges since the last annual report as well as the balance of outstanding
Certificate loans. Colonial Life will also send to the Certificate Owner the
reports required by the 1940 Act.
Confirmation. Confirmation notices (or other appropriate notification)
will be mailed promptly at the time of the following transactions:
(1) Certificate issue;
(2) receipt of premium payments;
(3) initial allocation among Divisions on the Allocation Date;
(4) transfers among Divisions;
(5) change of premium allocation;
<PAGE>
(6) change between Option I and Option II;
(7) increases or decreases in Specified Amount;
(8) withdrawals, surrenders or loans;
(9) receipt of loan repayments; and
(10) reinstatements; and
(11) redemptions due to insufficient funds.
Limitation on Right to Contest. Colonial Life will not contest or revoke
the insurance coverage provided under the Certificate, except for any subsequent
increase in Specified Amount, after the Certificate has been in force during the
lifetime of each Insured for a period of two years from the date it is issued.
Any increase in the Specified Amount will not be contested after such increase
has been in force during the lifetime of each Insured for two years following
the effective date of the increase. Any increase will be contestable within the
two year period only with regard to statements concerning this increase.
Misstatements. If the age or sex of an Insured has been misstated in an
application, including a reinstatement application, Colonial Life will adjust
the benefits payable to reflect the correct age or sex.
Suicide. The Certificate does not cover the risk of suicide within two
years from the date the Certificate is issued or two years from the date of any
increase in Specified Amount with respect to such increase, whether the Insured
is sane or insane, unless otherwise specified by state law. In the event of
suicide of any Insured within two years of the date the Certificate is issued,
the only liability of Colonial Life will be a refund of premiums paid, without
interest, less any Certificate Debt and less any withdrawal. In the event of
suicide by any Insured within two years of an increase in Specified Amount, the
only liability of Colonial Life with respect to the increase will be a refund of
the cost of insurance for such increase.
Under Colonial Heritage II, if the first death is by suicide and the
surviving Insured is classified by Colonial Life as insurable on the Certificate
Date, Colonial Life will issue, upon request of the Certificate Owner and
without evidence of insurability, an individual Certificate providing coverage
on the life of the surviving Insured equal to the coverage on the Insureds for
which premiums or cost of insurance was refunded.
Beneficiaries. The original Beneficiaries and contingent Beneficiaries
are designated by the Certificate Owner on the application. If changed, the
primary Beneficiary or contingent Beneficiary is as shown in the latest change
filed with Colonial Life. One or more primary or contingent Beneficiaries may be
named in the application. In such case, the proceeds of the Certificate will be
paid in equal shares to the survivors in the appropriate beneficiary class
unless requested otherwise by the Certificate Owner.
Postponement of Payments. Payment of any amount upon surrender,
withdrawal, Certificate loan, or benefits payable at death or maturity may be
postponed whenever: (i) the New York Stock Exchange is closed other than
customary week-end and holiday closings, or trading on the New York Stock
Exchange is restricted as determined by the Commission; (ii) the Commission by
order permits postponement for the protection of Certificate Owners; or (iii) an
emergency exists, as determined by the Commission, as a result of which disposal
of securities is not reasonably practical or it is not reasonably practicable to
determine the value of net assets in Separate Account D.
Assignment. Ownership of the Certificate can be assigned or the
Certificate can be assigned as collateral security. Colonial Life must be
notified in writing if the Certificate has been assigned. Each assignment will
be subject to any payments made or action taken by Colonial Life prior to its
notification of such assignment. Colonial Life is not responsible for the
validity of an assignment. A Certificate Owner's rights and the rights of the
<PAGE>
Beneficiary may be affected by an assignment.
Illustration of Benefits and Values. The Certificate Owner may request
illustrations of Death Benefits, Accumulation Values and Cash Values at any time
after the Certificate Date. Illustrations will be based on the existing
Accumulation Value and Cash Value at the time of the request and both the
maximum and the then current costs of insurance rates. Although Colonial Life
does not currently charge a fee for such illustrations, it reserves the right to
charge an administrative fee, not to exceed $25, to cover the cost of preparing
the illustrations.
Non-Participating Certificate. The Certificate does not share in any
surplus distributions of Colonial Life. No dividends are payable with respect to
the Certificate.
THE GENERAL ACCOUNT
Certificate Owners may allocate Net Premiums and transfer Accumulation Value to
the General Account. Because of exemptive and exclusionary provisions, interests
in the General Account have not been registered under the Securities Act of 1933
and the General Account has not been registered as an investment company under
the 1940 Act. Accordingly, neither the General Account nor any interests therein
are subject to the provisions of these Acts, and Colonial Life has been advised
that the staff of the Securities and Exchange Commission has not reviewed the
disclosures in this Prospectus relating to the General Account. Disclosures
regarding the General 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.
General Description. The General Account consists of all assets owned by
Colonial Life other than those in Separate Account D and other separate accounts
which have been or may be established by Colonial Life. Subject to applicable
law, Colonial Life has sole discretion over the investment of the assets of the
General Account.
A Certificate Owner may elect to allocate Net Premiums to the General
Account or to transfer Accumulation Value to or from the Divisions and the
General Account. The allocation or transfer of funds to the General Account does
not entitle a Certificate Owner to share in the investment experience of the
General Account. Instead, Colonial Life guarantees that Accumulation Value in
the General Account will accrue interest daily at an effective annual rate of at
least 4%, independent of the actual investment experience of the General
Account. Colonial Life is not obligated to credit interest at any higher rate,
although Colonial Life may, in its sole discretion, do so.
If the Certificate issued as applied for is not accepted or the "free
look" is exercised, no interest will be credited and Colonial Life will retain
any interest earned on the initial Net Premium.
General Account Accumulation Value. The Accumulation Value in the General
Account on the Allocation Date is equal to the portion of the Net Premium
payments, plus interest earned, which have been paid and allocated to the
General Account, less the portion of the first monthly deduction allocated to
the General Account.
Colonial Life guarantees that interest credited to each Certificate Owner's
Accumulation Value in the General Account will not be less than an effective
annual rate of at least 4%. Colonial Life may, IN ITS SOLE DISCRETION, credit a
higher rate of interest, although it is not obligated to credit interest in
excess of 4% per year, and might not do so. ANY INTEREST CREDITED ON THE
CERTIFICATE'S ACCUMULATION VALUE IN THE GENERAL ACCOUNT IN EXCESS OF THE
GUARANTEED RATE OF 4% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF
COLONIAL LIFE. THE CERTIFICATE OWNER ASSUMES THE RISK THAT INTEREST CREDITED MAY
NOT EXCEED THE GUARANTEED MINIMUM RATE OF 4% PER YEAR. Accumulation Value in the
General Account that equals Certificate Debt will be credited interest daily at
an effective annual rate of 6%. The Accumulation Value in the General Account
will be calculated on each Monthly Anniversary Date of the Certificate, or on
any other date with consistent adjustments.
<PAGE>
Colonial Life guarantees that, at any time prior to the Maturity Date, the
Accumulation Value in the General Account will not be less than the amount of
the Net Premiums allocated or Accumulation Value transferred to the General
Account, plus interest at the rate of 4% per year, plus any excess interest
which Colonial Life credits and any amounts transferred into the General
Account, less the sum of all charges allocable to the General Account and any
amounts deducted from the General Account in connection with withdrawals or
transfers to Separate Account D.
Determination of Charges. The portion of the monthly deduction
attributable to the General Account will be determined as of the actual Monthly
Anniversary Date, even if the Monthly Anniversary Date does not fall on a
Valuation Date.
Premium Deposit Fund. As a convenience to Certificate Owners, Colonial
Life permits Certificate Owners to deposit funds in a premium deposit fund
("PDF"), subject to the terms and conditions of the appropriate agreement.
Funds deposited in the PDF earn interest at a minimum annual rate of 4%, with
interest credited on each monthly anniversary date. Interest on these funds is
not tax deferred and will be annually reported on Form 1099 to the Certificate
Owner. An amount equal to the Planned Periodic Premium will be transferred on
the Certificate date to pay premiums on the Certificate. Certificate Owners may
withdraw all or part of the funds from the PDF at any time. No commissions are
earned or paid until premium payments are made pursuant to transfers from the
PDF.
DISTRIBUTION OF THE GROUP POLICIES AND CERTIFICATES
The Group Policies and Certificates will be sold by individuals who, in
addition to being licensed as life insurance agents for Colonial Life, are also
registered representatives of Chubb Securities Corporation, the principal
underwriter of the Certificates, or of broker-dealers who have entered into
written sales agreements with the principal underwriter. Chubb Securities
Corporation is a New Hampshire corporation organized in 1969. Chubb Securities
Corporation is registered with the Securities and Exchange Commission under the
Securities and Exchange Act of 1934 as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. Each broker-dealer with whom
Chubb Securities Corporation has executed a selling agreement will receive as a
commission the full charge of 3% imposed on premiums. Any such broker-dealers
will be registered under the Securities Exchange Act of 1934 and their
representatives selling the Group Policies and Certificates will be authorized
under applicable insurance laws and regulations to sell insurance products of
this type. It is not expected that the compensation paid by Colonial Life in
connection with such sales will exceed that described above for sales by Chubb
Securities Corporation's registered representatives.
Colonial Life and Separate Account D have entered into a Distribution
Agreement with Chubb Securities Corporation which continues until terminated by
any party on 60 days notice. Chubb Securities Corporation is not obligated to
sell any specified amount of Certificates and may not assign its
responsibilities under the Distribution Agreement. Colonial Life reimburses
Chubb Securities Corporation for its expenses under the Distribution Agreement.
Chubb Securities Corporation is engaged in the sale and distribution of
various other securities, including other flexible premium variable life
policies. It acts as principal underwriter for other flexible premium variable
life policies and variable annuity contracts issued by Colonial Life and Chubb
Life Insurance Company of America, Colonial Life's parent, and for the Chubb
America Fund, Inc. and Chubb Investment Funds, Inc. mutual funds. It sells a
number of mutual fund shares as well as shares of other securities and limited
partnership interests in both public and private limited partnerships. Mutual
fund shares available for sale by Chubb Securities Corporation are sold pursuant
to non-exclusive selling agreements with the distributors of the mutual funds.
<PAGE>
MANAGEMENT OF COLONIAL LIFE
Executive Officers and Directors of Colonial Life
Directors
Principal Occupation and
------------------------
Name Business Address
- ---- ----------------
*Percy Chubb, III.......... Vice Chairman
The Chubb Corporation
(also serves as Vice Chairman of The Colonial
Life Insurance Company of America)
15 Mountain View Road
P.O. Box 1615
Warren, New Jersey 07061-1615
*Frederick H. Condon....... Senior Vice President, General Counsel and
Secretary
Chubb Life Insurance Company of America
(also serves as Senior Vice President, General
Counsel and Secretary of The Colonial Life
Insurance Company of America)
One Granite Place
Concord, NH 03301
*Randall G. Craig.......... Executive Vice President and Chief Operating
Officer
Chubb Life Insurance Company of America
(also serves as Executive Vice President and
Chief Operating Officer of The Colonial Life
Insurance Company of America)
One Granite Place
Concord, NH 03301
*David S. Fowler........... Senior Vice President
The Chubb Corporation
(also serves as Vice Chairman of The Colonial
Life Insurance Company of America)
15 Mountain View Road
P.O. Box 1615
Warren, New Jersey 07061-1615
*Dean R. O'Hare............ Chairman and Chief Executive Officer
The Chubb Corporation
(also serves as Chairman of The Colonial Life
Insurance Company of America)
15 Mountain View Road
P.O. Box 1615
Warren, NJ 07061-1615
*Theresa M. Stone.......... President and Chief Executive Officer
Chubb Life Insurance Company of America
(also serves as President and Chief Executive
Officer of The Colonial Life Insurance Company of
America)
One Granite Place
Concord, NH 03301
<PAGE>
*Richard V. Werner......... Executive Vice President and Chief Financial
Officer Chubb Life Insurance Company of America
(also serves as Executive Vice President and Chief
Financial Officer of The Colonial Life Insurance
Company of America)
One Granite Place
Concord, NH 03301
* Executive Officer of
= ====================
Colonial Life
==============
Executive Officers (Other Than Directors)
<TABLE>
<CAPTION>
Name
- ----
<S> <C>
Ronald R. Angarella........ Senior Vice President
Charles C. Cornelio........ Senior Vice President and
Chief Administrative Officer
Ronald H. Emery............ Senior Vice President and Controller
Vincent G. Mace, Jr........ Senior Vice President and Group Actuary
Warren L. Reynolds......... Senior Vice President
Arthur V. Anderson......... Vice President
Douglas H. Blampied........ Vice President
Thomas M. Bodrogi.......... Vice President
Edwin E. Creter............ Vice President
Ned I. Gerstman............ Vice President
J. Michael Gannon.......... Vice President and Counsel
Glenn Hilsinger............ Vice President
Donald M. Kane............. Vice President
Patrick A. Lang............ Vice President
Deborah A. Leitch.......... Vice President
Sandra M. MacIntyre........ Vice President
Edward C. Mackenzie........ Vice President
Justin J. Manjorin......... Vice President
Donna L. Metcalf........... Vice President
Christopher J. Moakley..... Vice President
Thomas E. Murphy, Jr. MD... Vice President
Herbert B. Olson........... Vice President and Group Actuary
Robert R. Rodgers.......... Vice President
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Russell C. Simpson......... Vice President and Treasurer
James S. Smith............. Vice President
William A. Spencer......... Vice President
John A. Thomas............. Vice President
Ernest J. Tsouros.......... Vice President
David G. Underwood, II,MD.. Vice President
John W. Wells.............. Vice President
</TABLE>
The officers and employees of Colonial Life who have access to the assets of
Separate Account D are covered by a fidelity bond issued by Aetna Casualty and
Surety Company in the amount of $35,000,000.
STATE REGULATION OF COLONIAL LIFE
Colonial Life is governed under the laws of the state of New Jersey
and is subject to regulation by the Insurance Commissioner of New Jersey. An
annual statement is filed with the New Jersey Insurance Commissioner on or
before March 1 of each year covering the operations and reporting on the
financial condition of Colonial Life as of December 31 of the preceding year.
Periodically, the Commissioner examines the assets and liabilities of Colonial
Life and Separate Account D and verifies their adequacy and a full examination
of Colonial Life's operations is conducted by the Commissioner at least every
five years.
In addition, Colonial Life is subject to the insurance laws and
regulations of other states within which it is licensed to operate. Generally,
the insurance department of any other state applies the laws of the state of
domicile in determining permissible investments.
FEDERAL TAX MATTERS
Tax Considerations. The following description is a brief summary of
some of the tax rules, primarily related to federal income taxes under the Code,
which, in the opinion of Colonial Life, are currently in effect and is not
intended as tax advice. Colonial Life believes that, as discussed below, the
Group Policies and Certificates will in general receive favorable tax treatment
under the Code. Because there are issues as to which the law is still developing
or may change, however, and because this information is not intended as tax
advice, Colonial Life recommends that the Certificate Owner or prospective
Certificate Owner rely only on the advice of a qualified tax adviser.
Certificate Proceeds. The Certificate contains provisions not found
in traditional life insurance policies providing only for fixed benefits.
However, under the Code, the Certificate should qualify as a life insurance
contract for federal income tax purposes, with the result that all Death
Benefits paid under the Certificate will generally be fully excludable from the
gross income of the Certificate's Beneficiary for federal income tax purposes
and, as long as the Group Policy and Certificate remain in force, income earned
on the Certificate will not be subject to federal income tax unless and until
there is a distribution from the Certificate. Certificate Owners should consult
with their own tax advisers in this regard.
The federal income tax treatment of a distribution from the
Certificate will depend on whether a Certificate is a life insurance policy and
also if it is determined to be a "modified endowment contract," as defined by
the Code. Colonial Life will notify a Certificate Owner if the amount of
premiums paid in would cause a Certificate to be a modified endowment contract
and will allow a refund of the excess premium. Thus, the Certificate Owner may
choose to have the Certificate treated as a modified endowment contract.
<PAGE>
A modified endowment contract is a life insurance policy which fails
to meet a "seven-pay" test. In general, a policy will fail the seven-pay test
if the cumulative amount of premiums paid under the policy at any time during
the first seven years exceeds a calculated premium level. The calculated seven-
pay premium level is based on a hypothetical policy issued on the same insured
persons and for the same intial death benefit which, under specified conditions
(which include the absence of expense and administrative charges), would be
fully paid for after seven years. Your certificate will be treated as a
modified endowment unless the cumulative premiums paid under your certificate,
at all times during the first seven policy years, are less than or equal to the
cumulative seven-pay premiums which would have been paid under the hypothetical
Certificate on or before such times.
Whenever there is a "material change" under a certificate, it will
generally be treated as a new contract for purposes of determining whether the
certificate is a modified endowment, and subject to a new seven-pay premium
period and a new seven-pay limit. The new seven-pay limit would be determined
taking into account, under a downward adjustment formula, the Certificate
Account Value of the policy at the time of such change. A materially changed
certificate would be considered a modified endowment if it failed to satisfy the
new seven-pay limit. A material change could occur as a result of a change in
death benefit option, the selection of additional benefits, the restoration of a
terminated certificate and certain other changes.
If the benefits under your certificate are reduced, for example, by
requesting a decrease in Face Amount or in some cases by making partial
withdrawals, terminating additional benefits under a rider, changing the death
benefit option, or as a result of policy termination, the calculated seven-pay
premium level will be redetermined based on the reduced level of benefits and
applied retroactively for purposes of the seven-pay test. If the premiums
previously paid are greater than the recalculated seven-pay premium level limit,
the certificate will become a modified endowment. Generally, a life insurance
policy which is received in exchange for a modified endowment or a modified
endowment which terminates and is restored, will also be considered a modified
endowment.
If a Certificate is deemed to be a modified endowment contract, any
distribution from the Certificate will be taxed in a manner comparable to
distributions from annuities (i.e., on an "income-first" basis); distributions
for this purpose include a loan or partial withdrawal. Any such distributions
will be considered taxable income to the extent accumulation value under the
Certificate exceeds investment in the Certificate.
A 10% penalty tax will apply to the taxable portion of such a
distribution. No penalty will apply to distributions (i) to taxpayers 59 1/2
years of age or older, (ii) in the case of a disability which can be expected to
result in death or to be of indefinite duration or (iii) received as part of a
series of substantially equal periodic annuity payments for the life (or life
expectancy) of the taxpayer or the joint lives (or joint life expectancies) of
the taxpayer and his beneficiary.
To the extent a Certificate becomes a modified endowment contract, any
distribution, including any loan, which occurs in the Certificate year it
becomes a modified endowment contract and in any year thereafter, will be
taxable income to the Certificate Owner. Also, any distributions within two
years before a Certificate becomes a modified endowment contract will also be
income taxable to the Certificate Owner. The Secretary of the Treasury has been
authorized to prescribe rules which would similarly treat other distributions
made in anticipation of a policy becoming a modified endowment contract. For
purposes of determining the amount of any distribution includable in income, all
modified endowment contract policies that fail the above-described tests which
are issued by the same insurer, or its affiliates, to the same Certificate Owner
during any calendar year are treated as one contract. The Secretary of the
Treasury is also authorized to issue regulations in this connection.
In addition to the distribution rules for modified endowment
contracts, the Code and proposed regulations thereunder require that reasonable
mortality and other charges be used in satisfying the definition of life
insurance. The death benefit under a Certificate which meets this definition
will continue to be excluded from the beneficiary's
<PAGE>
gross income. Colonial Life believes that the Certificates meet this definition.
However, there is uncertainty as to the meaning of "reasonable mortality
charges" and resultant uncertainties as to Colonial Heritage II's qualification
if a different definition is adopted by the Treasury Department. As long as a
Certificate does not violate the tests described above, it will not fail to meet
the tests of the Code and the general tax provisions described herein still
apply.
The foregoing summary does not purport to be complete or to cover all
situations, and, as always, there is some degree of uncertainty with respect to
the application of the current tax laws. In particular, prior to the issuance of
final regulations or other clarifications under certain sections of the Code,
there may be some uncertainties about the tax treatment of the Certificate with
respect to the mortality charges, substandard risks and any extension of the
Maturity Date. In addition to the provisions discussed above, the United States
Congress may consider other legislation which, if enacted, could adversely
affect the tax treatment of life insurance policies. Also, the Treasury
Department may amend current regulations or adopt new regulations with respect
to this and other Code provisions. Therefore, Certificate Owners are advised to
consult a tax adviser or attorney for more complete tax information,
specifically regarding the applicability of the Code provisions to an individual
Certificate Owner's situation.
Under normal circumstances, the Certificate is not a modified
endowment contract and loans received under the Certificate will be construed as
indebtedness of the Certificate Owner in the same manner as loans under a fixed
benefit life insurance policy and no part of any loan under the Certificate is
expected to constitute income to the Certificate Owner. Certificate Owners are
advised to consult a tax adviser or attorney regarding the deduction of interest
paid on loans.
Even if the Certificate is not a modified endowment contract, a
partial withdrawal together with a reduction in death benefits during the first
15 Certificate years may create taxable income for the Certificate Owner. The
amount of that taxable income is determined under a complex formula and it may
be equal to part or all of, but not greater than, the income on the contract. A
partial withdrawal made after the first 15 Certificate years will be taxed on a
recovery of premium-first basis, and will only be subject to federal income tax
to the extent such proceeds exceed the total amount of premiums the Certificate
Owner has paid that have not been previously withdrawn.
If a Certificate Owner makes a partial withdrawal, surrender, loan or
exchange of the Certificate, Colonial Life may be required to withhold federal
income tax from the portion of the money received by the Certificate Owner that
is includable in the Certificate Owner 's federal gross income. A Certificate
Owner who is not a corporation may elect not to have such tax withheld; however,
such election must be made before Colonial Life makes the payment. In addition,
if a Certificate Owner fails to provide Colonial Life with a correct taxpayer
identification number (usually a social security number) or if the Treasury
notifies Colonial Life that the taxpayer identification number which has been
provided is not correct, the election not to have such taxes withheld will not
be effective. In any case, a Certificate Owner is liable for payment of the
federal income tax on the taxable portion of money received, whether or not an
election to have federal income tax withheld is made. If a Certificate Owner
elects not to have federal income tax withheld, or if the amount withheld is
insufficient, then the Certificate Owner may be responsible for payment of
estimated tax. A Certificate Owner may also incur penalties under the estimated
tax rules if the withholding and estimated tax payments are insufficient.
Colonial Life suggests that Certificate Owners consult with a tax adviser or
attorney as to the tax implications of these matters.
In the event that a Certificate is owned by a trustee under a pension
or profit sharing plan, or similar deferred compensation arrangement, the tax
consequences of ownership or receipt of proceeds under the Certificate could
differ from those stated herein. However, if ownership of such a Certificate is
transferred from the plan to a plan participant (upon termination of employment,
for example), the Certificate will be subject to all of the federal tax rules
described above. A Certificate owned by a trustee under such a plan may be
subject to restrictions under ERISA and a tax adviser should be consulted
regarding any applicable ERISA requirements.
The Certificate may also be used in various arrangements, including
nonqualified deferred compensation or salary continuation plans, split dollar
insurance plans, executive bonus plans and others, where the tax consequences
<PAGE>
may vary depending on the particular facts and circumstances of each individual
arrangement. A tax adviser should be consulted regarding the tax attributes of
any particular arrangement where the value of it depends in part on its tax
consequences.
Federal estate and local estate, inheritance and other tax
consequences of ownership or receipt of Certificate proceeds depend upon the
circumstances of each Certificate Owner and Beneficiary.
Current Treasury regulations set standards for diversification of the
investments underlying variable life insurance policies in order for such
policies to be treated as life insurance. Colonial Life believes it presently is
in compliance with the diversification requirements as set forth in the
regulations and intends to remain in compliance with such diversification
requirements. If the diversification requirements are not satisfied, the
Certificate would not be treated as a life insurance contract. As a consequence
to the Certificate Owner, income earned on a Certificate would be taxable to the
Certificate Owner in the calendar quarter in which the diversification
requirements were not satisfied, and for all subsequent calendar quarters.
The Secretary of the Treasury may issue a regulation or a ruling which
will prescribe the circumstances in which a Certificate Owner's control of the
investments of a segregated asset account may cause the Certificate Owner,
rather than the insurance company, to be treated as the owner of the assets of
the account. The regulation or ruling could impose requirements that are not
reflected in the Certificate, relating, for example, to such elements of
Certificate Owner control as premium allocation, investment selection, transfer
privileges and investments in a division focusing on a particular investment
sector. It has also been suggested that, in certain circumstances, control over
the investment adviser might constitute prohibited Certificate Owner control.
Colonial Life believes that Certificate Owner control will not exist under the
Certificate. Because failure to comply with any such regulation or ruling
presumably would cause earnings on a Certificate Owner's interest in Separate
Account D to be includable in the Certificate Owner's gross income in the year
earned, Colonial Life has reserved certain rights to alter the Certificate and
investment alternatives so as to comply with such regulation or ruling. Colonial
Life believes that any such regulation or ruling would apply prospectively.
Since the regulation or ruling has not been issued, there can be no assurance as
to the content of such regulation or ruling or even whether application of the
regulation or ruling will be prospective. For these reasons, Certificate Owners
are urged to consult with their own tax advisers.
A Certificate Owner may elect to exchange Colonial Heritage II for two
individual Colonial Heritage I Certificates provided the conditions under the
Certificate Exchange Option Rider are met. This could have adverse tax
consequences including, but not limited to, the recognition of taxable income in
an amount up to any taxable gain in the Certificate at the time of the exchange.
Charge for Colonial Life Income Taxes. Colonial Life is presently
taxed as a life insurance company under the provisions of the Code. The Code
specifically provides for adjustments in reserves for variable policies, and
Colonial Life will include flexible premium life insurance operations in its tax
return in accordance with these rules.
Currently no charge is made against Separate Account D for Colonial
Life's federal income taxes, or provisions for such taxes, that may be
attributable to Separate Account D. Colonial Life may charge each Division for
its portion of any income tax charged to Colonial Life on the Division or its
assets. See "CHARGES AND DEDUCTIONS--Premium Charges" for a description of the
federal DAC tax charge deducted from premium payments. Under present laws,
Colonial Life may incur state and local taxes (in addition to premium taxes) in
several states. At present, these taxes are not significant. If they increase,
however, Colonial Life may decide to make charges for such taxes or provisions
for such taxes against Separate Account D. Colonial Life would retain any
investment earnings on any tax charges accumulated in a Division. Any such
charges against Separate Account D or its Divisions could have an adverse effect
on the investment experience of such Division.
<PAGE>
EMPLOYMENT BENEFIT PLANS
Employers and employee organizations should consider, in consultation
with counsel, the impact of Title VII of the Civil Rights Act of 1964 on the
purchase of a Certificate in connection with an employment-related insurance or
benefit plan. The United States Supreme Court held, in a 1983 decision, that,
under Title VII, optional annuity benefits under a deferred compensation plan
could not vary on the basis of sex.
LEGAL PROCEEDINGS
There are no legal proceedings to which Separate Account D is a party
or to which the assets of any of the Divisions are subject. Colonial Life is not
involved in any litigation that is of material importance in relation to its
total assets or that relate to Separate Account D.
EXPERTS
The financial statements of colonial Life as of december 31, 1994 and
for the year then ended, appearing in this Prospectus and Registration Statement
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing elsewhere herein and in the Registration
Statement, and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
Actuarial matters included in this Prospectus have been examined by
Michael J. LeBoeuf, FSA, MAAA as stated in the opinion filed as an exhibit to
the Registration Statement.
REGISTRATION STATEMENT
A Registration Statement has been filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, with respect
to the Group Policies and Certificates offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement and the
amendments and exhibits to the Registration Statement to all of which reference
is made for further information concerning Separate Account D, Colonial Life and
the Group Policies and Certificates offered hereby. Statements contained in this
Prospectus as to the contents of the Group Policies and Certificates and other
legal instruments are summaries. For a complete statement of the terms thereof
reference is made to such instruments as filed.
FINANCIAL STATEMENTS
The most current financial statements of Colonial Life are those as of
the end of the most recent fiscal year. Colonial Life does not prepare financial
statements more often than annually and believes that any incremental benefit to
prospective Certificate Owners that may result from preparing and delivering
more current financial statements, though unaudited, does not justify the
additional cost that would be incurred. In addition, Colonial Life represents
that there have been no adverse changes in the financial condition or operations
of Colonial Life between the end of the most current fiscal year and the date of
this Prospectus.
The financial statements of Colonial Life which are included in the
Prospectus should be considered only as bearing on the ability of Colonial Life
to meet its obligations under the Certificate. They should not be considered as
bearing on the investment experience of the assets held in Separate Account D.
APPENDIX
ILLUSTRATIONS OF ACCUMULATION VALUES
CASH VALUES AND DEATH BENEFITS
<PAGE>
Following are a series of tables that illustrate how the Accumulation
Values, Cash Values and Death Benefits of a Certificate change with the
investment performance of the Trust. The tables show how the Accumulation
Values, Cash Values and Death Benefits of a Certificate issued to an Insured(s)
of a given age(s) and given premium would vary over time if the return on the
assets held in each Portfolio of the Trust were a constant gross annual rate of
0%, 6%, and 12%. The tables on pages A-3 through A-8 illustrate a Colonial
Heritage I Certificate issued to a male, age 35, under a standard rate non-
smoker underwriting risk classification. The tables on pages A-9 through A-14
illustrate a Colonial Heritage II Certificate issued to a male, age 40, under a
standard rate non-smoker underwriting risk classification and a female, age 35,
under a standard rate non-smoker underwriting risk classification. The
Accumulation Values, Cash Values and Death Benefits would be different from
those shown if the returns averaged 0%, 6%, and 12% over a period of years, but
fluctuated above and below those averages for individual Certificate years.
The amount of the Accumulation Value exceeds the Cash Value during the
first five Certificate years due to the Surrender Charge. For Certificate years
six and after, the Accumulation Value and Cash Value are equal, since the
Surrender Charge has been reduced to zero.
The second column shows the Accumulation Value of the premiums paid at
the stated interest rate. The third and sixth columns illustrate the
Accumulation Values and the fourth and seventh columns illustrate the Cash
Values of the Certificate over the designated period. The Accumulation Values
shown in the third column and the Cash Values shown in the fourth column assume
the monthly charge for cost of insurance is based upon the current cost of
insurance rates and assume a Monthly Deduction Adjustment which varies based on
the Specified Amount of the Certificate. The current cost of insurance rates,
which may be modified at any time, are based on the sex, Issue Age, Certificate
year, and rating class of the Insured(s). The cost of insurance discount may be
modified or terminated at any time. The Accumulation Values shown in the sixth
column and the cash values shown in the seventh column assume the monthly charge
for cost of insurance is based upon the maximum cost of insurance rates
allowable, which are based on the Commissioner's 1980 Standard Ordinary
Mortality Table. The fifth and eighth columns illustrate the Death Benefit of a
Certificate over the designated period. The illustrations of Death Benefits
reflect the same assumptions as the Accumulation Values and Cash Values. The
Death Benefit values also vary between tables, depending upon whether Option I
or Option II Death Benefits are illustrated.
The amounts shown for the Death Benefit, Accumulation Values, and Cash
Values reflect the fact that the net investment return of the Divisions of
Separate Account D is lower than the gross rates of return on the assets in the
Trust, as a result of expenses paid by the Trust and charges levied against the
Divisions of Separate Account D.
The certificate values shown take into account a daily investment
advisory fee equivalent to the maximum annual rate of .62% of the aggregate
average daily net assets of the Portfolios of the Trust plus an assumed charge
of .30% of the aggregate average daily net assets to cover expenses incurred by
the Trust. The .62% investment advisory fee is an average of the individual
investment advisory fees of the five Portfolios. See the attached Prospectus for
the Trust for a description of the assumption of expenses of the Trust in excess
of specified annual rates averaging .92%. The Certificate values also take into
account a daily charge to each Division of Separate Account D for assuming
mortality and expense risks which is equivalent to a charge at an annual rate of
.65% of the average net assets of the Divisions of Separate Account D. After
deduction of these amounts, the illustrated gross investment rates of 0%, 6% and
12% correspond to approximate net annual rates of -1.57%, 4.43% and 10.43%,
respectively.
The hypothetical values shown in the tables do not reflect any charges
for federal income taxes or other taxes other than the DAC tax. However, if, in
the future, any additional charges are made, the gross annual investment rate of
return would have to exceed the stated investment rates by a sufficient amount
to cover the tax charges in order to produce the Accumulation Values, Cash
Values and Death Benefits illustrated.
The tables illustrate the Certificate values that would result based
on hypothetical investment rates of return if premiums are paid in full at the
beginning of each year, if all Net Premiums are allocated to Separate Account
<PAGE>
D, and if no Certificate loans have been made. The values would vary from those
shown if the assumed annual premium payments were paid in installments during a
year. The values would also vary if the Certificate Owner varied the amount or
frequency of premium payments. The tables also assume that the Certificate Owner
has not requested an increase or decrease in Specified Amount, that no
withdrawals have been made and no Surrender Charges imposed, and that no
transfers have been made and no transfer charges imposed.
Upon request, Colonial Life will provide, without charge, a comparable
illustration based upon the proposed Insured's age, sex and rating class the
Specified Amount requested, the proposed frequency and amount of premium
payments and any available riders requested. Existing Certificate Owners may
request illustrations based on existing cash value at the time of request.
Colonial Life has reserved the right to charge an administrative fee of up to
$25 for such illustrations.
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.43% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,995 11,355 1,000,000 10,665 10,065 1,000,000
2 25,830 25,081 24,601 1,000,000 22,379 21,899 1,000,000
3 39,721 39,442 39,082 1,000,000 35,227 34,867 1,000,000
4 54,308 55,212 54,972 1,000,000 49,321 49,081 1,000,000
5 69,623 72,562 72,442 1,000,000 64,778 64,658 1,000,000
6 85,704 91,661 91,661 1,000,000 81,738 81,738 1,000,000
7 102,589 112,686 112,686 1,000,000 100,338 100,338 1,000,000
8 120,319 135,837 135,837 1,000,000 120,762 120,762 1,000,000
9 138,935 161,360 161,360 1,000,000 143,185 143,185 1,000,000
10 158,481 189,516 189,516 1,000,000 167,861 167,861 1,000,000
11 179,006 220,604 220,604 1,000,000 195,020 195,020 1,000,000
12 200,556 254,905 254,905 1,000,000 224,931 224,931 1,000,000
13 223,184 292,771 292,771 1,000,000 257,898 257,898 1,000,000
14 246,943 334,577 334,577 1,000,000 294,261 294,261 1,000,000
15 271,890 380,753 380,753 1,000,000 334,393 334,393 1,000,000
16 298,084 431,794 431,794 1,000,000 378,727 378,727 1,000,000
17 325,589 488,218 448,218 1,000,000 427,721 427,721 1,000,000
18 354,468 550,620 550,620 1,000,000 481,902 481,902 1,000,000
19 384,791 619,689 619,689 1,016,290 (3) 541,881 541,881 1,000,000
20 416,631 696,042 696,042 1,092,786 (3) 608,345 608,345 1,000,000
25 601,361 1,213,918 1,213,918 1,626,650 (3) 1,061,071 1,061,071 1,421,835 (3)
30 837,129 2,058,902 2,058,902 2,511,860 (3) 1,795,560 1,795,560 2,190,583 (3)
35 1,138,036 3,431,167 3,431,167 3,980,154 (3) 2,977,916 2,977,916 3,454,383 (3)
40 1,522,077 5,667,964 5,667,964 6,064,721 (3) 4,892,654 4,892,654 5,235,140 (3)
45 2,012,222 9,347,502 9,347,502 9,814,877 (3) 8,033,402 8,033,402 8,435,072 (3)
50 2,637,785 15,262,107 15,262,107 16,025,212 (3) 13,015,363 13,015,363 13,666,131 (3)
55 3,436,179 24,620,260 24,620,260 25,851,273 (3) 20,733,555 20,733,555 21,770,233 (3)
60 4,455,155 39,890,178 39,890,178 40,289,080 (3) 33,285,971 33,285,971 33,618,831 (3)
65 5,755,655 66,055,262 66,055,262 66,055,262 (3) 55,131,675 55,131,675 55,131,675 (3)
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.43% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ---------------------------------------- -------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,955 11,355 1,000,000 10,665 10,065 1,000,000
2 25,830 25,081 24,601 1,000,000 22,379 21,899 1,000,000
3 39,721 39,442 39,082 1,000,000 35,227 34,867 1,000,000
4 54,308 55,212 54,972 1,000,000 49,321 49,081 1,000,000
5 69,623 72,562 72,442 1,000,000 64,778 64,658 1,000,000
6 85,704 91,661 91,661 1,000,000 81,738 81,738 1,000,000
7 102,589 112,686 112,686 1,000,000 100,338 100,338 1,000,000
8 120,319 135,837 135,837 1,000,000 120,762 120,762 1,000,000
9 138,935 161,360 161,360 1,000,000 143,185 143,185 1,000,000
10 158,481 189,516 189,516 1,000,000 167,861 167,861 1,000,000
11 179,006 220,604 220,604 1,000,000 195,020 195,020 1,000,000
12 200,556 254,905 254,905 1,000,000 224,931 224,931 1,000,000
13 223,184 292,771 292,771 1,000,000 257,898 257,898 1,000,000
14 246,943 334,577 334,577 1,000,000 294,261 294,261 1,000,000
15 271,890 380,728 380,728 1,050,809 (3) 334,393 334,393 1,000,000
16 298,084 431,536 431,536 1,152,201 (3) 378,725 378,725 1,011,196 (3)
17 325,589 487,377 487,377 1,262,306 (3) 427,425 427,425 1,107,031 (3)
18 354,468 548,714 548,714 1,377,272 (3) 480,675 480,675 1,206,494 (3)
19 384,791 616,089 616,089 1,497,096 (3) 538,864 538,864 1,309,440 (3)
20 416,631 690,032 690,032 1,628,476 (3) 602,361 602,361 1,421,572 (3)
25 601,361 1,181,230 1,181,230 2,409,709 (3) 1,016,314 1,016,314 2,073,281 (3)
30 837,129 1,948,502 1,948,502 3,468,334 (3) 1,643,771 1,643,771 2,925,912 (3)
35 1,138,036 3,127,758 3,127,758 4,941,858 (3) 2,572,895 2,572,895 4,065,174 (3)
40 1,522,077 4,910,443 4,910,443 6,972,829 (3) 3,915,898 3,915,898 5,560,575 (3)
45 2,012,222 7,559,993 7,559,993 9,903,591 (3) 5,794,320 5,794,320 7,590,559 (3)
50 2,637,785 11,444,595 11,444,595 13,962,406 (3) 8,398,697 8,398,697 10,246,410 (3)
55 3,436,179 17,094,238 17,094,238 19,829,316 (3) 11,954,036 11,954,036 13,866,682 (3)
60 4,455,155 25,356.454 25,356.454 28,145,664 (3) 16,928,779 16,928,779 18,790,945 (3)
65 5,755,655 38,899,053 38,899,053 40,455,015 (3) 23,920,165 23,920,165 24,876,972 (3)
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES
TRUST THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A - 3
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 6% (4.43% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ---------------------------------------- -------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,294 10,694 1,000,000 10,042 9,442 1,000,000
2 25,830 23,015 22,535 1,000,000 20,467 19,987 1,000,000
3 39,721 33,123 34,763 1,000,000 31,265 30,905 1,000,000
4 54,308 47,679 47,439 1,000,000 42,444 42,204 1,000,000
5 69,623 60,724 60,604 1,000,000 54,007 53,887 1,000,000
6 85,704 74,283 74,283 1,000,000 65,965 65,965 1,000,000
7 102,589 88,372 88,372 1,000,000 78,312 78,312 1,000,000
8 120,319 103,009 103,009 1,000,000 91,070 91,070 1,000,000
9 138,935 118,221 118,221 1,000,000 104,237 104,237 1,000,000
10 158,481 134,020 134,020 1,000,000 117,837 117,837 1,000,000
11 179,006 150,460 150,460 1,000,000 131,861 131,861 1,000,000
12 200,556 167,542 167,542 1,000,000 146,331 146,331 1,000,000
13 223,184 185,295 185,295 1,000,000 161,269 161,269 1,000,000
14 246,943 203,730 203,730 1,000,000 176,691 176,691 1,000,000
15 271,890 222,873 222,873 1,000,000 192,598 192,598 1,000,000
16 298,084 242,767 242,767 1,000,000 209,010 209,010 1,000,000
17 325,589 263,412 263,412 1,000,000 225,908 225,908 1,000,000
18 354,468 284,818 284,818 1,000,000 243,281 243,281 1,000,000
19 384,791 307,030 307,030 1,000,000 261,123 261,123 1,000,000
20 416,631 330,064 330,064 1,000,000 279,415 279,415 1,000,000
25 601,361 458,659 458,659 1,000,000 377,713 377,713 1,000,000
30 837,129 613,087 613,087 1,000,000 487,505 487,505 1,000,000
35 1,138,036 804,121 804,121 1,000,000 609,261 609,261 1,000,000
40 1,522,077 1,052,811 1,052,811 1,126,508 (3) 750,866 750,866 1,000,000
45 2,012,222 1,365,970 1,365,970 1,434,269 (3) 943,306 943,306 1,000,000
50 2,637,785 1,741,818 1,741,818 1,828,909 (3) 1,212,210 1,212,210 1,272,821 (3)
55 3,436,179 2,181,885 2,181,885 2,290,979 (3) 1,518,121 1,518,121 1,594,027 (3)
60 4,455,155 2,732,676 2,732,676 2,760,003 (3) 1,903,148 1,903,148 1,922,179 (3)
65 5,755,655 3,482,451 3,482,451 3,482,451 (3) 2,444,547 2,444,547 2,444,547 (3)
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-4
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 6% (4.43% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,294 10,694 1,000,000 10,042 9,442 1,000,000
2 25,830 23,015 22,535 1,000,000 20,467 19,987 1,000,000
3 39,721 35,123 34,763 1,000,000 31,265 30,905 1,000,000
4 54,308 47,679 47,439 1,000,000 42,444 42,204 1,000,000
5 69,623 60,724 60,604 1,000,000 54,007 53,887 1,000,000
6 85,704 74,283 74,283 1,000,000 65,965 65,965 1,000,000
7 102,589 88,372 88,372 1,000,000 78,312 78,312 1,000,000
8 120,319 103,009 103,009 1,000,000 91,070 91,070 1,000,000
9 138,935 118,221 118,221 1,000,000 104,237 104,237 1,000,000
10 158,481 134,020 134,020 1,000,000 117,837 117,837 1,000,000
11 179,006 150,460 150,460 1,000,000 131,861 131,861 1,000,000
12 200,556 167,542 167,542 1,000,000 146,331 146,331 1,000,000
13 223,184 185,295 185,295 1,000,000 161,269 161,269 1,000,000
14 246,943 203,730 203,730 1,000,000 176,691 176,691 1,000,000
15 271,890 222,873 222,873 1,000,000 192,598 192,598 1,000,000
16 298,084 242,767 242,767 1,000,000 209,010 209,010 1,000,000
17 325,589 263,412 263,412 1,000,000 225,908 225,908 1,000,000
18 354,468 284,818 284,818 1,000,000 243,281 243,281 1,000,000
19 384,791 307,030 307,030 1,000,000 261,123 261,123 1,000,000
20 416,631 330,064 330,064 1,000,000 279,415 279,415 1,000,000
25 601,361 458,659 458,659 1,000,000 377,713 377,713 1,000,000
30 837,129 611,729 611,729 1,088,878 (3) 487,505 487,505 1,000,000
35 1,138,036 786,798 786,798 1,243,141 (3) 609,261 609,261 1,000,000
40 1,522,077 981,514 981,514 1,393,750 (3) 746,409 746,409 1,059,901 (3)
45 2,012,222 1,192,689 1,192,689 1,562,423 (3) 884,426 884,426 1,158,598 (3)
50 2,637,785 1,417,427 1,417,427 1,729,261 (3) 1,020,393 1,020,393 1,244,879 (3)
55 3,436,179 1,654,821 1,654,821 1,919,592 (3) 1,150,762 1,150,762 1,334,884 (3)
60 4,455,155 1,911,745 1,911,745 2,122,037 (3) 1,286,526 1,286,526 1,428,044 (3)
65 5,755,655 2,276,363 2,276,363 2,367,418 (3) 1,431,195 1,431,195 1,488,443 (3)
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-5
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.57% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,634 10,034 1,000,000 9,421 8,821 1,000,000
2 25,830 21,028 20,548 1,000,000 18,632 18,152 1,000,000
3 39,721 31,130 30,770 1,000,000 27,608 27,248 1,000,000
4 54,308 40,985 40,745 1,000,000 36,347 36,107 1,000,000
5 69,623 50,619 50,499 1,000,000 44,833 44,713 1,000,000
6 85,704 60,034 60,034 1,000,000 53,063 53,063 1,000,000
7 102,589 69,228 69,228 1,000,000 61,016 61,016 1,000,000
8 120,319 78,196 78,196 1,000,000 68,699 68,699 1,000,000
9 138,935 86,943 86,943 1,000,000 76,089 76,089 1,000,000
10 158,481 95,456 95,456 1,000,000 83,194 83,194 1,000,000
11 179,006 103,749 103,749 1,000,000 89,984 89,984 1,000,000
12 200,556 111,784 111,784 1,000,000 96,449 96,449 1,000,000
13 223,184 119,557 119,557 1,000,000 102,579 102,579 1,000,000
14 246,943 127,050 127,050 1,000,000 108,364 108,364 1,000,000
15 271,890 134,256 134,256 1,000,000 113,776 113,776 1,000,000
16 298,084 141,189 141,189 1,000,000 118,805 118,805 1,000,000
17 325,589 147,805 147,805 1,000,000 123,400 123,400 1,000,000
18 354,468 154,069 154,069 1,000,000 127,508 127,508 1,000,000
19 384,791 159,981 159,981 1,000,000 131,092 131,092 1,000,000
20 416,631 165,500 165,500 1,000,000 134,084 134,084 1,000,000
25 601,361 186,022 186,022 1,000,000 138,325 138,325 1,000,000
30 837,129 189,052 189,052 1,000,000 116,653 116,653 1,000,000
35 1,138,036 163,084 163,084 1,000,000 47,664 47,664 1,000,000
40 1,522,077 85,379 85,379 1,000,000 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-6
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.57% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ---------------------------------------- -------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,634 10,034 1,000,000 9,421 8,821 1,000,000
2 25,830 21,028 20,548 1,000,000 18,632 18,152 1,000,000
3 39,721 31,130 30,770 1,000,000 27,608 27,248 1,000,000
4 54,308 40,985 40,745 1,000,000 36,347 36,107 1,000,000
5 69,623 50,619 50,499 1,000,000 44,833 44,713 1,000,000
6 85,704 60,034 60,034 1,000,000 53,063 53,063 1,000,000
7 102,589 69,228 69,228 1,000,000 61,016 61,016 1,000,000
8 120,319 78,196 78,196 1,000,000 68,699 68,699 1,000,000
9 138,935 86,943 86,943 1,000,000 76,089 76,089 1,000,000
10 158,481 95,456 95,456 1,000,000 83,194 83,194 1,000,000
11 179,006 103,749 103,749 1,000,000 89,984 89,984 1,000,000
12 200,556 111,784 111,784 1,000,000 96,449 96,449 1,000,000
13 223,184 119,557 119,557 1,000,000 102,579 102,579 1,000,000
14 246,943 127,050 127,050 1,000,000 108,364 108,364 1,000,000
15 271,890 134,256 134,256 1,000,000 113,776 113,776 1,000,000
16 298,084 141,189 141,189 1,000,000 118,805 118,805 1,000,000
17 325,589 147,805 147,805 1,000,000 123,400 123,400 1,000,000
18 354,468 154,069 154,069 1,000,000 127,508 127,508 1,000,000
19 384,791 159,981 159,981 1,000,000 131,092 131,092 1,000,000
20 416,631 165,500 165,500 1,000,000 134,084 134,084 1,000,000
25 601,361 186,022 186,022 1,000,000 138,325 138,325 1,000,000
30 837,129 189,052 189,052 1,000,000 116,653 116,653 1,000,000
35 1,138,036 163,084 163,084 1,000,000 47,664 47,664 1,000,000
40 1,522,077 85,379 85,379 1,000,000 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR
CHUBB SERIES TRUST THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-7
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.43% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT (2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,950 11,350 1,011,950 10,647 10,047 1,010,647
2 25,830 25,063 24,583 1,025,063 22,320 21,840 1,022,320
3 39,721 39,396 39,036 1,039,396 35,096 34,736 1,035,096
4 54,308 55,119 54,879 1,055,119 49,078 48,838 1,049,078
5 69,623 72,398 72,278 1,072,398 64,371 64,251 1,064,371
6 85,704 91,395 91,395 1,091,395 81,101 81,101 1,081,101
7 102,589 112,279 112,279 1,112,279 99,388 99,388 1,099,388
8 120,319 135,237 135,237 1,135,237 119,393 119,393 1,119,393
9 138,935 160,500 160,500 1,160,500 141,264 141,264 1,141,264
10 158,481 188,313 188,313 1,188,313 165,222 165,222 1,165,222
11 179,006 218,955 218,955 1,218,955 191,454 191,454 1,191,454
12 200,556 252,674 252,674 1,252,674 220,181 220,181 1,220,181
13 223,184 289,784 289,784 1,289,784 251,645 251,645 1,251,645
14 246,943 330,614 330,614 1,330,614 286,116 286,116 1,286,116
15 271,890 375,537 375,537 1,375,537 323,869 323,869 1,323,869
16 298,084 424,986 424,986 1,424,986 365,232 365,232 1,365,232
17 325,589 479,377 479,377 1,479,377 410,514 410,514 1,410,514
18 354,468 539,181 539,181 1,539,181 460,055 460,055 1,460,055
19 384,791 604,961 604,961 1,604,961 514,245 514,245 1,514,245
20 416,631 677,287 677,287 1,677,287 573,482 573,482 1,573,482
25 601,361 1,162,028 1,162,028 2,162,028 963,298 963,298 1,963,298
30 837,129 1,937,195 1,937,195 2,937,195 1,569,859 1,569,859 2,569,859
35 1,138,036 3,174,155 3,174,155 4,174,155 2,507,362 2,507,362 3,507,362
40 1,522,077 5,146,231 5,146,231 6,146,231 3,950,397 3,950,397 4,950,397
45 2,012,222 8,292,643 8,292,643 9,292,643 6,158,697 6,158,697 7,158,697
50 2,637,785 13,318,902 13,318,902 14,318,902 9,555,861 9,555,861 10,555,861
55 3,436,179 21,375,614 21,375,614 22,444,395 (3) 14,794,340 14,794,340 15,794,340
60 4,455,155 34,358,865 34,358,865 35,358,865 23,011,552 23,011,552 24,011,552
65 5,755,655 55,553,486 55,553,486 56,553,486 34,977,424 34,977,424 35,977,424
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST
THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
A-8
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.43% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,950 11,350 1,011,950 10,647 10,047 1,010,647
2 25,830 25,063 24,583 1,025,063 22,320 21,840 1,022,320
3 39,721 39,396 39,036 1,039,396 35,096 34,736 1,035,096
4 54,308 55,119 54,879 1,055,119 49,078 48,838 1,049,078
5 69,623 72,398 72,278 1,072,398 64,371 64,251 1,064,371
6 85,704 91,395 91,395 1,091,395 81,101 81,101 1,081,101
7 102,589 112,279 112,279 1,112,279 99,388 99,388 1,099,388
8 120,319 135,237 135,237 1,135,237 119,393 119,393 1,119,393
9 138,935 160,500 160,500 1,160,500 141,264 141,264 1,141,264
10 158,481 188,313 188,313 1,188,313 165,222 165,222 1,165,222
11 179,006 218,955 218,955 1,218,955 191,454 191,454 1,191,454
12 200,556 252,674 252,674 1,252,674 220,181 220,181 1,220,181
13 223,184 289,784 289,784 1,289,784 251,645 251,645 1,251,645
14 246,943 330,614 330,614 1,330,614 286,116 286,116 1,286,116
15 271,890 375,537 375,537 1,375,537 323,869 323,869 1,323,869
16 298,084 424,986 424,986 1,424,986 365,232 365,232 1,365,232
17 325,589 479,377 479,377 1,479,377 410,514 410,514 1,410,514
18 354,468 539,181 539,181 1,539,181 460,055 460,055 1,460,055
19 384,791 604,961 604,961 1,604,961 514,245 514,245 1,514,245
20 416,631 677,287 677,287 1,677,287 573,482 573,482 1,573,482
25 601,361 1,160,121 1,160,121 2,366,647 (3) 963,298 963,298 1,965,128 (3)
30 837,129 1,914,997 1,914,997 3,408,695 (3) 1,561,502 1,561,502 2,779,474 (3)
35 1,138,036 3,075,232 3,075,232 4,858,867 (3) 2,447,716 2,447,716 3,867,391 (3)
40 1,522,077 4,829,196 4,829,196 6,857,458 (3) 3,728,835 3,728,835 5,294,946 (3)
45 2,012,222 7,436,099 7,436,099 9,741,290 (3) 5,520,881 5,520,881 7,232,354 (3)
50 2,637,785 11,258,212 11,258,212 13,735,019 (3) 8,005,648 8,005,648 9,766,891 (3)
55 3,436,179 16,817,010 16,817,010 19,507,732 (3) 11,397,857 11,397,857 13,221,514 (3)
60 4,455,155 24,946,393 24,946,393 27,690,496 (3) 16,144,395 16,144,395 17,920,278 (3)
65 5,755,655 38,271,177 38,271,177 39,802,024 (3) 22,689,676 22,689,676 23,689,676
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-9
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 6% (4.43% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED -------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,290 10,690 1,011,290 10,025 9,425 1,010,025
2 25,830 22,998 22,518 1,022,998 20,414 19,934 1,020,414
3 39,721 35,082 34,722 1,035,082 31,150 30,790 1,031,150
4 54,308 47,600 47,360 1,047,600 42,240 42,000 1,042,240
5 69,623 60,591 60,471 1,060,591 53,678 53,558 1,053,678
6 85,704 74,076 74,076 1,074,076 65,470 65,470 1,065,470
7 102,589 88,067 88,067 1,088,067 77,602 77,602 1,077,602
8 120,319 102,575 102,575 1,102,575 90,088 90,088 1,090,088
9 138,935 117,625 117,625 1,117,625 102,912 102,912 1,102,912
10 158,481 133,219 133,219 1,133,219 116,091 116,091 1,116,091
11 179,006 149,405 149,405 1,149,405 129,600 129,600 1,129,600
12 200,556 166,171 166,171 1,166,171 143,439 143,439 1,143,439
13 223,184 183,531 183,531 1,183,531 157,618 157,618 1,157,618
14 246,943 201,484 201,484 1,201,484 172,131 172,131 1,172,131
15 271,890 220,036 220,036 1,220,036 186,953 186,953 1,186,953
16 298,084 239,215 239,215 1,239,215 202,078 202,078 1,202,078
17 325,589 258,987 258,987 1,258,987 217,448 217,448 1,217,448
18 354,468 279,330 279,330 1,279,330 233,003 233,003 1,233,003
19 384,791 300,259 300,259 1,300,259 248,691 248,691 1,248,691
20 416,631 321,741 321,741 1,321,741 264,426 264,426 1,264,426
25 601,361 436,433 436,433 1,436,433 341,245 341,245 1,341,245
30 837,129 556,610 556,610 1,556,610 403,901 403,901 1,403,901
35 1,138,036 667,243 667,243 1,667,243 424,612 424,612 1,424,612
40 1,522,077 740,256 740,256 1,740,256 355,311 355,311 1,355,311
45 2,012,222 727,912 727,912 1,727,912 109,682 109,682 1,109,682
50 2,637,785 549,144 549,144 1,549,144 0 0 0
55 3,436,179 82,695 82,695 1,082,695 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -----------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-10
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 6% (4.43% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,290 10,690 1,011,290 10,025 9,425 1,010,025
2 25,830 22,998 22,518 1,022,998 20,414 19,934 1,020,414
3 39,721 35,082 34,722 1,035,082 31,150 30,790 1,031,150
4 54,308 47,600 47,360 1,047,600 42,240 42,000 1,042,240
5 69,623 60,591 60,471 1,060,591 53,678 53,558 1,053,678
6 85,704 74,076 74,076 1,074,076 65,470 65,470 1,065,470
7 102,589 88,067 88,067 1,088,067 77,602 77,602 1,077,602
8 120,319 102,575 102,575 1,102,575 90,088 90,088 1,090,088
9 138,935 117,625 117,625 1,117,625 102,912 102,912 1,102,912
10 158,481 133,219 133,219 1,133,219 116,091 116,091 1,116,091
11 179,006 149,405 149,405 1,149,405 129,600 129,600 1,129,600
12 200,556 166,171 166,171 1,166,171 143,439 143,439 1,143,439
13 223,184 183,531 183,531 1,183,531 157,618 157,618 1,157,618
14 246,943 201,484 201,484 2,201,484 172,131 172,131 1,172,131
15 271,890 220,036 220,036 2,220,036 186,953 186,953 1,186,953
16 298,084 239,215 239,215 1,239,215 202,078 202,078 1,202,078
17 325,589 258,987 258,987 1,258,987 217,448 217,448 1,217,448
18 354,468 279,330 279,330 1,279,330 233,003 233,003 1,233,003
19 384,791 300,259 300,259 1,300,259 248,691 248,691 1,248,691
20 416,631 321,741 321,741 1,321,741 264,426 264,426 1,264,426
25 601,361 436,433 436,433 1,436,433 341,245 341,245 1,341,245
30 837,129 556,610 556,610 1,556,610 403,901 403,901 1,403,901
35 1,138,036 667,243 667,243 1,667,243 424,612 424,612 1,424,612
40 1,522,077 740,256 740,256 1,740,256 355,311 355,311 1,355,311
45 2,012,222 727,912 727,912 1,727,912 109,682 109,682 1,109,682
50 2,637,785 549,144 549,144 1,549,144 0 0 0
55 3,436,179 82,695 82,695 1,082,695 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -----------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-11
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.57% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,629 10,029 1,010,629 9,405 8,805 1,009,405
2 25,830 21,012 20,532 1,021,012 18,583 18,103 1,018,583
3 39,721 31,094 30,734 1,031,094 27,509 27,149 1,027,509
4 54,308 40,919 40,679 1,040,919 36,176 35,936 1,036,176
5 69,623 50,511 50,391 1,050,511 44,569 44,449 1,044,569
6 85,704 59,874 59,874 1,059,874 52,682 52,682 1,052,682
7 102,589 69,000 69,000 1,069,000 60,490 60,490 1,060,490
8 120,319 77,885 77,885 1,077,885 67,998 67,998 1,067,998
9 138,935 86,531 86,531 1,086,531 75,181 75,181 1,075,181
10 158,481 94,923 94,923 1,094,923 82,043 82,043 1,082,043
11 179,006 103,075 103,075 1,103,075 88,552 88,552 1,088,552
12 200,556 110,941 110,941 1,110,941 94,692 94,692 1,094,692
13 223,184 118,516 118,516 1,118,516 100,449 100,449 1,100,449
14 246,943 125,775 125,775 1,125,775 105,810 105,810 1,105,810
15 271,890 132,704 132,704 1,132,704 110,741 110,741 1,110,741
16 298,084 139,318 139,318 1,139,318 115,230 115,230 1,115,230
17 325,589 145,562 145,562 1,145,562 119,214 119,214 1,119,214
18 354,468 151,391 151,391 1,151,391 122,633 122,633 1,122,633
19 384,791 156,802 156,802 1,156,802 125,435 125,435 1,125,435
20 416,631 161,742 161,742 1,161,742 127,543 127,543 1,127,543
25 601,361 177,823 177,823 1,177,823 125,644 125,644 1,125,644
30 837,129 172,452 172,452 1,172,452 94,776 94,776 1,094,776
35 1,138,036 132,837 132,837 1,132,837 16,217 16,217 1,016,217
40 1,522,077 39,194 39,194 1,039,194 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-12
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.57% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $12,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,629 10,029 1,010,629 9,405 8,805 1,009,405
2 25,830 21,012 20,532 1,021,012 18,583 18,103 1,018,583
3 39,721 31,094 30,734 1,031,094 27,509 27,149 1,027,509
4 54,308 40,919 40,679 1,040,919 36,176 35,936 1,036,176
5 69,623 50,511 50,391 1,050,511 44,569 44,449 1,044,569
6 85,704 59,874 59,874 1,059,874 52,682 52,682 1,052,682
7 102,589 69,000 69,000 1,069,000 60,490 60,490 1,060,490
8 120,319 77,885 77,885 1,077,885 67,998 67,998 1,067,998
9 138,935 86,531 86,531 1,086,531 75,181 75,181 1,075,181
10 158,481 94,923 94,923 1,094,923 82,043 82,043 1,082,043
11 179,006 103,075 103,075 1,103,075 88,552 88,552 1,088,552
12 200,556 110,941 110,941 1,110,941 94,692 94,692 1,094,692
13 223,184 118,516 118,516 1,118,516 100,449 100,449 1,100,449
14 246,943 125,775 125,775 1,125,775 105,810 105,810 1,105,810
15 271,890 132,704 132,704 1,132,704 110,741 110,741 1,110,741
16 298,084 139,318 139,318 1,139,318 115,230 115,230 1,115,230
17 325,589 145,562 145,562 1,145,562 119,214 119,214 1,119,214
18 354,468 151,391 151,391 1,151,391 122,633 122,633 1,122,633
19 384,791 156,802 156,802 1,156,802 125,435 125,435 1,125,435
20 416,631 161,742 161,742 1,161,742 127,543 127,543 1,127,543
25 601,361 177,823 177,823 1,177,823 125,644 125,644 1,125,644
30 837,129 172,452 172,452 1,172,452 94,776 94,776 1,094,776
35 1,138,036 132,837 132,837 1,132,837 16,217 16,217 1,016,217
40 1,522,077 39,194 39,194 1,039,194 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-13
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,561 15,761 2,000,000 16,557 15,757 2,000,000
2 34,440 34,844 34,204 2,000,000 34,826 34,186 2,000,000
3 52,962 55,025 54,545 2,000,000 54,981 54,501 2,000,000
4 72,410 77,301 76,981 2,000,000 77,216 76,896 2,000,000
5 92,831 101,890 101,730 2,000,000 101,744 101,584 2,000,000
6 114,272 129,029 129,029 2,000,000 128,798 128,798 2,000,000
7 136,786 158,984 158,984 2,000,000 158,637 158,637 2,000,000
8 160,425 192,072 192,072 2,000,000 191,572 191,572 2,000,000
9 185,246 228,642 228,642 2,000,000 227,946 227,946 2,000,000
10 211,309 269,060 269,060 2,000,000 268,115 268,115 2,000,000
11 238,674 313,732 313,732 2,000,000 312,475 312,475 2,000,000
12 267,408 363,103 363,103 2,000,000 361,461 361,461 2,000,000
13 297,578 417,666 417,666 2,000,000 415,554 415,554 2,000,000
14 329,257 477,968 477,968 2,000,000 475,284 475,284 2,000,000
15 362,520 544,611 544,611 2,000,000 541,240 541,240 2,000,000
16 397,446 618,263 618,263 2,000,000 614,072 614,072 2,000,000
17 434,118 699,663 699,663 2,000,000 694,499 694,499 2,000,000
18 472,624 789,630 789,630 2,000,000 783,326 783,326 2,000,000
19 513,055 889,072 889,072 2,000,000 881,441 881,441 2,000,000
20 555,508 998,996 998,996 2,000,000 989,839 989,839 2,000,000
25 801,815 1,749,506 1,749,506 2,344,338 (3) 1,729,534 1,729,534 2,317,576 (3)
30 1,116,173 2,987,097 2,987,097 3,644,258 (3) 2,945,306 2,945,306 3,593,273 (3)
35 1,517,381 5,020,723 5,020,723 5,824,039 (3) 4,928,799 4,928,799 5,717,407 (3)
40 2,029,436 8,359,342 8,359,342 8,944,496 (3) 8,162,200 8,162,200 8,733,554 (3)
45 2,682,963 13,848,141 13,848,141 14,540,548 (3) 13,456,128 13,456,128 14,128,934 (3)
50 3,517,046 22,733,066 22,733,066 23,869,719 (3) 21,906,617 21,906,617 23,001,948 (3)
55 4,581,572 36,900,054 36,900,054 38,745,057 (3) 35,076,674 35,076,674 36,830,508 (3)
60 5,940,206 60,047,793 60,047,793 60,648,271 (3) 56,384,967 56,384,967 56,948,817 (3)
65 7,674,207 99,422,071 99,422,071 99,422,071 (3) 93,363,631 93,363,631 93,363,631 (3)
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-14
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,561 15,761 2,000,000 16,557 15,757 2,000,000
2 34,440 34,844 34,204 2,000,000 34,826 34,186 2,000,000
3 52,962 55,025 54,545 2,000,000 54,981 54,501 2,000,000
4 72,410 77,301 76,981 2,000,000 77,216 76,896 2,000,000
5 92,831 101,890 101,730 2,000,000 101,744 101,584 2,000,000
6 114,272 129,029 129,029 2,000,000 128,798 128,798 2,000,000
7 136,786 158,984 158,984 2,000,000 158,637 158,637 2,000,000
8 160,425 192,072 192,072 2,000,000 191,572 191,572 2,000,000
9 185,246 228,642 228,642 2,000,000 227,946 227,946 2,000,000
10 211,309 269,060 269,060 2,000,000 268,115 268,115 2,000,000
11 238,674 313,732 313,732 2,000,000 312,475 312,475 2,000,000
12 267,408 363,103 363,103 2,000,000 361,461 361,461 2,000,000
13 297,578 417,666 417,666 2,000,000 415,554 415,554 2,000,000
14 329,257 477,968 477,968 2,000,000 475,284 475,284 2,000,000
15 362,520 544,611 544,611 2,000,000 541,240 541,240 2,000,000
16 397,446 618,257 618,257 2,108,256 (3) 614,062 614,062 2,093,951 (3)
17 434,118 699,605 699,605 2,294,704 (3) 694,381 694,381 2,277,570 (3)
18 472,624 789,436 789,436 2,494,618 (3) 782,911 782,911 2,473,999 (3)
19 513,055 888,610 888,610 2,710,261 (3) 880,439 880,439 2,685,339 (3)
20 555,508 998,081 998,081 2,924,377 (3) 987,842 987,842 2,894,377 (3)
25 801,815 1,739,908 1,739,908 4,245,376 (3) 1,708,517 1,708,517 4,168,781 (3)
30 1,116,173 2,943,526 2,943,526 6,034,228 (3) 2,851,783 2,851,783 5,846,155 (3)
35 1,517,381 4,869,761 4,869,761 8,522,082 (3) 4,614,802 4,614,802 8,075,904 (3)
40 2,029,436 7,895,654 7,895,654 12,001,394 (3) 7,244,807 7,244,807 11,012,107 (3)
45 2,682,963 12,516,791 12,516,791 17,022,836 (3) 10,994,457 10,994,457 14,952,462 (3)
50 3,517,046 19,358,313 19,358,313 24,197,891 (3) 16,166,174 16,166,174 20,207,718 (3)
55 4,581,572 29,405,212 29,405,212 34,404,098 (3) 23,221,294 23,221,294 27,168,914 (3)
60 5,940,206 44,524,128 44,524,128 49,421,782 (3) 32,991,445 32,991,445 36,620,504 (3)
65 7,674,207 69,262,852 69,262,852 72,033,366 (3) 46,681,869 46,681,869 48,549,144 (3)
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-15
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.43% NET)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,662 14,862 2,000,000 15,658 14,858 2,000,000
2 34,440 32,011 31,371 2,000,000 31,994 31,354 2,000,000
3 52,962 49,076 48,569 2,000,000 49,035 48,555 2,000,000
4 72,410 66,889 66,569 2,000,000 66,810 66,490 2,000,000
5 92,831 85,479 85,319 2,000,000 85,346 85,186 2,000,000
6 114,272 104,880 104,880 2,000,000 104,673 104,673 2,000,000
7 136,786 125,125 125,125 2,000,000 124,818 124,818 2,000,000
8 160,425 146,247 146,247 2,000,000 145,812 145,812 2,000,000
9 185,246 168,292 168,292 2,000,000 167,693 167,693 2,000,000
10 211,309 191,321 191,321 2,000,000 190,518 190,518 2,000,000
11 238,674 215,378 215,378 2,000,000 214,322 214,322 2,000,000
12 267,408 240,504 240,504 2,000,000 239,139 239,139 2,000,000
13 297,578 266,740 266,740 2,000,000 265,002 265,002 2,000,000
14 329,257 294,136 294,134 2,000,000 291,942 291,942 2,000,000
15 362,520 322,727 322,727 2,000,000 319,992 319,992 2,000,000
16 397,446 352,567 352,567 2,000,000 349,180 349,180 2,000,000
17 434,118 383,700 383,700 2,000,000 379,536 379,536 2,000,000
18 472,624 416,174 416,174 2,000,000 411,087 411,087 2,000,000
19 513,055 450,035 450,035 2,000,000 443,856 443,856 2,000,000
20 555,508 485,334 485,334 2,000,000 477,868 477,868 2,000,000
25 801,815 685,152 685,152 2,000,000 667,256 667,256 2,000,000
30 1,116,173 928,536 928,536 2,000,000 889,626 889,626 2,000,000
35 1,517,381 1,222,135 1,222,135 2,000,000 1,142,814 1,142,814 2,000,000
40 2,029,436 1,578,415 1,578,415 2,000,000 1,429,031 1,429,031 2,000,000
45 2,682,963 2,032,868 2,032,868 2,134,511 (3) 1,774,451 1,774,451 2,000,000
50 3,517,046 2,597,578 2,597,578 2,727,457 (3) 2,251,265 2,251,265 2,363,828 (3)
55 4,581,572 3,264,943 3,264,943 3,428,190 (3) 2,802,837 2,802,837 2,942,979 (3)
60 5,940,206 4,097,245 4,097,245 4,138,217 (3) 3,487,201 3,487,201 3,522,073 (3)
65 7,674,207 5,211,113 5,211,113 5,211,113 (3) 4,447,996 4,447,828 4,447,828 (3)
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-16
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.43% NET)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,662 14,862 2,000,000 15,658 14,858 2,000,000
2 34,440 32,011 31,371 2,000,000 31,994 31,354 2,000,000
3 52,962 49,076 48,596 2,000,000 49,035 48,555 2,000,000
4 72,410 66,889 66,569 2,000,000 66,810 66,490 2,000,000
5 92,831 85,479 85,319 2,000,000 85,346 85,186 2,000,000
6 114,272 104,880 104,880 2,000,000 104,673 104,673 2,000,000
7 136,786 125,125 125,125 2,000,000 124,818 124,818 2,000,000
8 160,425 146,247 146,247 2,000,000 145,812 145,812 2,000,000
9 185,246 168,292 168,292 2,000,000 167,693 167,693 2,000,000
10 211,309 191,321 191,321 2,000,000 190,518 190,518 2,000,000
11 238,674 215,378 215,378 2,000,000 214,322 214,322 2,000,000
12 267,408 240,504 240,504 2,000,000 239,139 239,139 2,000,000
13 297,578 266,740 266,740 2,000,000 265,002 265,002 2,000,000
14 329,257 294,134 294,134 2,000,000 291,942 291,942 2,000,000
15 362,520 322,727 322,727 2,000,000 319,992 319,992 2,000,000
16 397,446 352,567 352,567 2,000,000 349,180 349,180 2,000,000
17 434,118 383,700 383,700 2,000,000 379,536 379,536 2,000,000
18 472,624 416,174 416,174 2,000,000 411,087 411,087 2,000,000
19 513,055 450,035 450,035 2,000,000 443,856 443,856 2,000,000
20 555,508 485,334 485,334 2,000,000 477,868 477,868 2,000,000
25 801,815 685,152 685,152 2,000,000 667,256 667,256 2,000,000
30 1,116,173 928,536 928,536 2,000,000 889,626 889,626 2,000,000
35 1,517,381 1,221,177 1,221,177 2,137,060 (3) 1,142,814 1,142,814 2,000,000
40 2,029,436 1,561,989 1,561,989 2,374,223 (3) 1,420,128 1,420,128 2,158,595 (3)
45 2,682,963 1,940,639 1,940,639 2,639,269 (3) 1,696,228 1,696,228 2,306,870 (3)
50 3,517,046 2,340,311 2,340,311 2,925,389 (3) 1,954,738 1,954,738 2,443,423 (3)
55 4,581,572 2,761,174 2,761,174 3,230,574 (3) 2,193,966 2,193,966 2,566,940 (3)
60 5,940,206 3,236,956 3,236,956 3,593,021 (3) 2,429,985 2,429,985 2,697,283 (3)
65 7,674,207 3,886,918 3,886,918 4,042,395 (3) 2,676,097 2,676,097 2,783,141 (3)
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-17
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.57% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,762 13,962 2,000,000 14,758 13,958 2,000,000
2 34,440 29,285 28,645 2,000,000 29,269 28,629 2,000,000
3 52,962 43,573 43,093 2,000,000 43,535 43,055 2,000,000
4 72,410 57,628 57,308 2,000,000 57,555 57,235 2,000,000
5 92,831 71,451 71,291 2,000,000 71,330 71,170 2,000,000
6 114,272 85,045 85,045 2,000,000 84,858 84,858 2,000,000
7 136,786 98,409 98,409 2,000,000 98,137 98,137 2,000,000
8 160,425 111,544 111,544 2,000,000 111,163 111,163 2,000,000
9 185,246 124,451 124,451 2,000,000 123,934 123,934 2,000,000
10 211,309 137,131 137,131 2,000,000 136,446 136,446 2,000,000
11 238,674 149,581 149,581 2,000,000 148,691 148,691 2,000,000
12 267,408 161,813 161,813 2,000,000 160,674 160,674 2,000,000
13 297,578 173,829 173,829 2,000,000 172,389 172,389 2,000,000
14 329,257 185,623 185,623 2,000,000 183,823 183,823 2,000,000
15 362,520 197,191 197,191 2,000,000 194,957 194,957 2,000,000
16 397,446 208,522 208,522 2,000,000 205,769 205,769 2,000,000
17 434,118 219,608 219,608 2,000,000 216,235 216,235 2,000,000
18 472,624 230,437 230,437 2,000,000 226,327 226,327 2,000,000
19 513,055 240,992 240,992 2,000,000 236,005 236,005 2,000,000
20 555,508 251,258 251,258 2,000,000 245,232 245,232 2,000,000
25 801,815 297,399 297,399 2,000,000 282,674 282,674 2,000,000
30 1,116,173 330,909 330,909 2,000,000 296,989 296,989 2,000,000
35 1,517,381 339,967 339,967 2,000,000 262,175 262,175 2,000,000
40 2,029,436 289,084 289,084 2,000,000 121,820 121,820 2,000,000
45 2,682,963 137,484 137,484 2,000,000 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-18
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION I; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.57% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,762 13,962 2,000,000 14,758 13,958 2,000,000
2 34,440 29,285 28,645 2,000,000 29,269 28,629 2,000,000
3 52,962 43,573 43,093 2,000,000 43,535 43,055 2,000,000
4 72,410 57,628 57,308 2,000,000 57,555 57,235 2,000,000
5 92,831 71,451 71,291 2,000,000 71,350 71,170 2,000,000
6 114,272 85,045 85,045 2,000,000 84,858 84,858 2,000,000
7 136,786 98,409 98,409 2,000,000 98,137 98,137 2,000,000
8 160,425 111,544 111,544 2,000,000 111,163 111,163 2,000,000
9 185,246 124,451 124,451 2,000,000 123,934 123,934 2,000,000
10 211,309 137,131 137,131 2,000,000 136,446 136,446 2,000,000
11 238,674 149,581 149,581 2,000,000 148,691 148,691 2,000,000
12 267,408 161,813 161,813 2,000,000 160,674 160,674 2,000,000
13 297,578 173,829 173,829 2,000,000 172,389 172,389 2,000,000
14 329,257 185,623 185,623 2,000,000 183,823 183,823 2,000,000
15 362,520 197,191 197,191 2,000,000 194,957 194,957 2,000,000
16 397,446 208,522 208,522 2,000,000 205,769 205,769 2,000,000
17 434,118 219,608 219,608 2,000,000 216,235 216,235 2,000,000
18 472,624 230,437 230,437 2,000,000 226,327 226,327 2,000,000
19 513,055 240,992 240,992 2,000,000 236,005 236,005 2,000,000
20 555,508 251,258 251,258 2,000,000 245,232 245,232 2,000,000
25 801,815 297,399 297,399 2,000,000 282,674 282,674 2,000,000
30 1,116,173 330,909 330,909 2,000,000 296,989 296,989 2,000,000
35 1,517,381 339,967 339,967 2,000,000 262,175 262,175 2,000,000
40 2,029,436 298,084 298,084 2,000,000 121,820 121,820 2,000,000
45 2,682,963 137,484 137,484 2,000,000 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-19
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,561 15,761 2,016,561 16,557 15,757 2,016,557
2 34,440 34,843 34,203 2,034,843 34,826 34,186 2,034,826
3 52,962 55,024 54,544 2,055,024 54,980 54,500 2,054,980
4 72,410 77,299 76,979 2,077,299 77,212 76,892 2,077,212
5 92,831 101,886 101,726 2,101,886 101,735 101,575 2,101,735
6 114,272 129,022 129,022 2,129,022 128,781 128,781 2,128,781
7 136,786 158,970 158,970 2,158,970 158,605 158,605 2,158,605
8 160,425 192,048 192,048 2,192,048 191,516 191,516 2,191,516
9 185,246 228,603 228,603 2,228,603 227,853 227,853 2,227,853
10 211,309 268,998 268,998 2,268,998 267,968 267,968 2,267,968
11 238,674 313,635 313,635 2,313,635 312,249 312,249 2,312,249
12 267,408 362,957 362,957 2,362,957 361,121 361,121 2,361,121
13 297,578 417,450 417,450 2,417,450 415,050 415,050 2,415,050
14 329,257 477,652 477,652 2,477,652 474,551 474,551 2,474,551
15 362,520 544,155 544,155 2,544,155 540,185 540,185 2,540,185
16 397,446 617,614 617,614 2,617,614 612,570 612,570 2,612,570
17 434,118 698,745 698,745 2,698,745 692,381 692,381 2,692,381
18 472,624 788,343 788,343 2,788,343 780,365 780,365 2,780,365
19 513,055 887,280 887,280 2,887,280 877,330 877,330 2,877,330
20 555,508 996,516 996,516 2,996,516 984,169 984,169 2,984,169
25 801,815 1,738,249 1,738,249 3,738,249 1,704,143 1,704,143 3,704,143
30 1,116,173 2,950,245 2,950,245 4,950,245 2,863,277 2,863,277 4,863,277
35 1,517,381 4,919,974 4,919,974 6,919,974 4,707,860 4,707,860 6,707,860
40 2,029,436 8,101,001 8,101,001 10,101,001 7,609,815 7,609,815 9,609,815
45 2,682,963 13,194,706 13,194,706 15,194,706 12,110,872 12,110,872 14,110,872
50 3,517,046 21,292,698 21,292,698 23,292,698 19,046,383 19,046,383 21,046,383
55 4,581,572 34,193,837 34,193,837 36,193,837 29,747,509 29,747,509 31,747,509
60 5,940,206 54,957,553 54,957,553 56,957,553 46,365,426 46,365,426 48,365,426
65 7,674,207 88,725,982 88,725,982 90,725,982 70,550,315 70,550,315 72,550,315
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-20
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,561 15,761 2,016,561 16,557 15,757 2,016,557
2 34,440 34,843 34,203 2,034,845 34,826 34,186 2,034,826
3 52,962 55,024 54,544 2,055,024 54,980 54,500 2,054,980
4 72,410 77,299 769797 2,077,299 77,212 76,892 2,077,212
5 92,831 101,886 101,726 2,101,886 101,735 101,575 2,101,735
6 114,272 129,022 129,022 2,129,022 128,781 128,781 2,128,781
7 136,786 158,970 158,970 2,158,970 158,605 158,605 2,158,605
8 160,425 192,048 192,048 2,192,048 191,516 191,516 2,191,516
9 185,246 228,603 228,603 2,228,603 227,853 227,853 2,227,853
10 211,309 268,998 268,998 2,268,998 267,968 267,968 2,267,968
11 238,674 313,635 313,635 2,313,635 312,249 312,249 2,312,249
12 267,408 362,957 362,957 2,362,957 361,121 361,121 2,361,121
13 297,578 417,450 417,450 2,417,450 415,050 415,050 2,415,050
14 329,257 477,652 477,652 2,477,652 474,551 474,551 2,474,551
15 362,520 544,155 544,155 2,544,155 540,185 540,185 2,540,185
16 397,446 617,614 617,614 2,617,614 612,570 612,570 2,612,570
17 434,118 698,745 698,745 2,698,745 692,381 692,381 2,692,381
18 472,624 788,343 788,343 2,788,343 780,365 780,365 2,780,365
19 513,055 887,280 887,280 2,887,280 877,330 877,330 2,877,330
20 555,508 996,516 996,516 2,996,516 984,169 984,169 2,984,169
25 801,815 1,737,261 1,737,261 4,238,917 (3) 1,702,293 1,702,293 4,153,595 (3)
30 1,116,173 2,939,200 2,939,200 6,025,360 (3) 2,841,756 2,841,756 5,825,600 (3)
35 1,517,381 4,862,750 4,862,750 8,509,813 (3) 4,598,922 4,598,922 8,048,114 (3)
40 2,029,436 7,884,429 7,884,429 11,984,332 (3) 7,220,209 7,220,209 10,974,718 (3)
45 2,682,963 12,499,136 12,499,136 16,998,825 (3) 10,957,452 10,957,452 14,902,135 (3)
50 3,517,046 19,331,143 19,331,143 24,163,929 (3) 16,112,078 16,112,078 20,140,098 (3)
55 4,581,572 29,364,077 29,364,077 34,355,970 (3) 23,143,902 23,143,902 27,078,365 (3)
60 5,940,206 44,461,978 44,461,978 49,352,796 (3) 32,881,803 32,881,803 36,498,801 (3)
65 7,674,207 69,166,308 69,166,308 71,932,960 (3) 46,313,074 46,313,074 48,313,074
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-21
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY OF AMERICA
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II: GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,662 14,862 2,015,662 15,658 14,858 2,015,658
2 34,440 32,011 31,371 2,032,011 31,993 31,353 2,031,993
3 52,962 49,076 48,596 2,049,076 49,034 48,554 2,049,034
4 72,410 66,887 66,567 2,066,887 66,807 66,487 2,066,807
5 92,831 85,476 85,316 2,085,476 85,339 85,179 2,085,339
6 114,272 104,874 104,874 2,104,874 104,659 104,659 2,104,659
7 136,786 125,114 125,114 2,125,114 124,793 124,793 2,124,793
8 160,425 146,230 146,230 2,146,230 145,771 145,771 2,145,771
9 185,246 168,264 168,264 2,168,264 167,627 167,627 2,167,627
10 211,309 191,279 191,279 2,191,279 190,418 190,418 2,190,418
11 238,674 215,315 215,315 2,215,315 214,174 213,174 2,214,174
12 267,408 240,411 240,411 2,240,411 238,924 238,924 2,238,924
13 297,578 266,609 266,609 2,266,609 264,696 264,696 2,264,696
14 329,257 293,949 293,949 2,293,949 291,514 291,514 2,291,514
15 362,520 322,471 322,471 2,322,471 319,400 319,400 2,319,400
16 397,446 352,217 352,217 2,352,217 348,371 348,371 2,348,371
17 434,118 383,224 383,224 2,383,224 378,440 378,440 2,378,440
18 472,624 415,532 415,532 2,415,532 409,616 409,616 2,409,616
19 513,055 449,178 449,178 2,449,178 441,896 441,896 2,441,896
20 555,508 484,196 484,196 2,484,196 475,276 475,276 2,475,276
25 801,815 680,850 680,850 2,680,850 657,684 657,684 2,657,684
30 1,116,173 913,825 913,825 2,913,825 858,009 858,009 2,858,009
35 1,517,381 1,174,501 1,174,501 3,174,501 1,044,653 1,044,653 3,044,653
40 2,029,436 1,432,474 1,432,474 3,432,474 1,146,360 1,146,360 3,146,360
45 2,682,963 1,605,399 1,605,399 3,605,399 1,007,567 1,007,567 3,007,567
50 3,517,046 1,526,285 1,526,285 3,526,285 374,733 374,733 2,374,733
55 4,581,572 971,089 971,089 2,971,089 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-22
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.43% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,662 14,862 2,015,662 15,658 14,858 2,015,658
2 34,440 32,011 31,371 2,032,011 31,993 31,353 2,031,993
3 52,962 49,076 48,596 2,049,076 49,034 48,554 2,049,034
4 72,410 66,887 66,567 2,066,887 66,807 66,487 2,066,807
5 92,831 85,476 85,316 2,085,476 84,339 85,179 2,085,339
6 114,272 104,874 104,874 2,104,874 104,659 104,659 2,104,659
7 136,786 125,114 125,114 2,125,114 124,793 124,793 2,124,793
8 160,425 146,230 146,230 2,146,230 145,771 145,771 2,145,771
9 185,246 168,264 168,264 2,168,264 167,627 167,627 2,167,627
10 211,309 191,279 191,279 2,191,279 190,418 190,418 2,190,418
11 238,674 215,315 215,315 2,215,315 214,174 214,174 2,214,174
12 267,408 240,411 240,411 2,240,411 238,924 238,924 2,238,924
13 297,578 266,609 266,609 2,266,609 264,696 264,696 2,264,696
14 329,257 293,949 293,949 2,293,949 291,514 291,514 2,291,514
15 362,520 322,471 322,471 2,322,471 319,400 319,400 2,319,400
16 397,446 352,217 352,217 2,352,217 348,371 348,371 2,348,371
17 434,118 383,224 383,224 2,383,224 378,440 378,440 2,378,440
18 472,624 415,532 415,532 2,415,532 409,616 409,616 2,409,616
19 513,055 449,178 449,178 2,449,178 441,896 441,896 2,441,896
20 555,508 484,196 484,196 2,484,196 475,276 475,276 2,475,276
25 801,815 680,850 680,850 2,680,850 657,684 657,684 2,657,684
30 1,116,173 913,825 913,825 2,913,825 858,009 858,009 2,858,009
35 1,517,381 1,174,501 1,174,501 3,174,501 1,044,653 1,044,653 3,044,653
40 2,029,436 1,432,474 1,432,474 3,432,474 1,146,360 1,146,360 3,146,360
45 2,682,963 1,605,399 1,605,399 3,605,399 1,007,567 1,007,567 3,007,567
50 3,517,046 1,526,285 1,526,285 3,526,285 374,733 374,733 2,374,733
55 4,581,572 971,089 971,089 2,971,089 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-23
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY OF AMERICA
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.57% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,762 13,962 2,014,762 14,758 13,958 2,014,758
2 34,440 29,285 28,645 2,029,285 29,269 28,629 2,029,269
3 52,962 43,573 43,093 2,043,573 43,534 43,054 2,043,534
4 72,410 57,627 57,307 2,057,627 57,552 57,232 2,057,552
5 92,831 71,449 71,289 2,071,449 71,324 71,164 2,071,324
6 114,272 85,040 85,040 2,085,040 84,847 84,847 2,084,847
7 136,786 98,401 98,401 2,098,401 98,118 98,118 2,098,118
8 160,425 111,531 111,531 2,111,531 111,133 111,133 2,111,133
9 185,246 124,432 124,432 2,124,432 123,888 123,888 2,123,888
10 211,309 137,102 137,102 2,137,102 136,378 136,378 2,136,378
11 238,674 149,540 149,540 2,149,540 148,594 148,594 2,148,594
12 267,408 161,755 161,755 2,161,755 160,538 160,538 2,160,538
13 297,578 173,748 173,748 2,173,748 172,203 172,203 2,172,203
14 329,257 185,515 185,515 2,185,515 183,570 183,570 2,183,570
15 362,520 197,045 197,045 2,197,045 194,620 194,620 2,194,620
16 397,446 208,330 208,330 2,208,330 205,325 205,325 2,205,325
17 434,118 219,355 219,355 2,219,355 215,656 215,656 2,215,656
18 472,624 230,109 230,109 2,230,109 225,577 225,577 2,225,577
19 513,055 240,569 240,569 2,240,569 235,042 235,042 2,235,042
20 555,508 250,716 250,716 2,250,716 244,004 242,004 2,244,004
25 801,815 295,691 295,691 2,295,691 278,926 278,926 2,278,926
30 1,116,173 326,083 326,083 2,326,083 286,976 286,976 2,286,976
35 1,517,381 327,353 327,353 2,327,353 238,421 238,421 2,238,421
40 2,029,436 268,752 268,752 2,268,752 77,864 77,864 2,077,864
45 2,682,963 82,840 82,840 2,082,840 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-24
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
<TABLE>
<CAPTION>
DEATH BENEFIT OPTION II; CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.57% net)
FEMALE NON-SMOKER ISSUE AGE 35
$2,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $16,000
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------- -------- -------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,762 13,962 2,014,762 14,758 13,958 2,014,758
2 34,440 29,285 28,645 2,029,285 29,269 28,629 2,029,269
3 52,962 43,573 43,093 2,043,573 43,534 43,054 2,043,534
4 72,410 57,627 57,307 2,057,627 57,552 57,232 2,057,552
5 92,831 71,449 71,289 2,071,449 71,324 71,164 2,071,324
6 114,272 85,040 85,040 2,085,040 84,847 84,847 2,084,847
7 136,786 98,401 98,401 2,098,401 98,118 98,118 2,098,118
8 160,425 111,531 111,531 2,111,531 111,133 111,133 2,111,133
9 185,246 124,432 124,432 2,124,432 123,888 123,888 2,123,888
10 211,309 137,102 137,102 2,137,102 136,378 136,378 2,136,378
11 238,674 149,540 149,540 2,149,540 148,594 148,594 2,148,594
12 267,408 161,755 161,755 2,161,755 160,538 160,538 2,160,538
13 297,578 173,748 173,748 2,173,748 172,203 172,203 2,172,203
14 329,257 185,515 185,515 2,185,515 183,570 183,570 2,183,570
15 362,520 197,045 197,045 2,197,045 194,620 194,620 2,194,620
16 397,446 208,330 208,330 2,208,330 205,325 205,325 2,205,325
17 434,118 219,355 219,355 2,219,355 215,656 215,656 2,215,656
18 472,624 230,109 230,109 2,230,109 225,577 225,577 2,225,577
19 513,055 240,569 240,569 2,240,569 235,042 235,042 2,235,042
20 555,508 250,716 250,716 2,250,716 244,004 244,004 2,244,004
25 801,815 295,691 295,691 2,295,691 278,926 278,926 2,278,926
30 1,116,173 326,083 326,083 2,326,083 286,976 286,976 2,286,976
35 1,517,381 327,353 327,353 2,327,353 238,421 238,421 2,238,421
40 2,029,436 268,752 268,752 2,268,752 77,864 77,864 2,077,864
45 2,682,963 82,840 82,840 2,082,840 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
- -----------
</TABLE>
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR CHUBB SERIES TRUST. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT C, OR CHUBB SERIES TRUST THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-25
<PAGE>
PART II
UNDERTAKINGS TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore, or hereafter duly adopted pursuant to
authority conferred in that section.
UNDERTAKING REGARDING INDEMNIFICATION
Pursuant to Rule 484(b)(1) of the Securities Act of 1933, insofar as
indemnification for liability arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant, the
Registrant has been advised that in the option of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer of controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following pages and documents:
The facing sheet
The prospectus consisting of _______ pages
The undertaking to file reports
The undertaking pursuant to Rule 484(b)(1) under the Securities Act of 1933
regarding indemnification
The signatures
Written consents of the following persons:
(a) Michael J. LeBoeuf, FSA, MAAA, contained in Exhibit 6 below.
<PAGE>
(b) Ernst & Young LLP (to be filed by amendment)
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of
the instructions as to exhibits in Form N-8B-2:
(a) Certified Copy of Resolution of Board of Directors of The Colonial Life
Insurance Company of America establishing the Colonial Separate Account D.
(b) Not Applicable
(c) (i) Form of Distribution Agreement among The Colonial Life Insurance
Company of America, Colonial Separate Account D, and Chubb Securities
Corporation.
(ii) Specimen Variable Contracts Selling Agreement between Chubb
Securities Corporation and Selling Broker-Dealers.
(iii) Specimen District Manager's Agreement of Chubb Securities
Corporation.
(iv) Specimen Registered Representative's Agreement of Chubb Securities
Corporation.
(v) Schedule of Commissions.
(d) Not Applicable
(e) (i) Specimen flexible premium variable life insurance policy.
(ii) Specimen joint and last survivor flexible premium variable life
insurance policy.
(iii) Forms of Riders
(f) (i) Amended and Restated Charter, with all amendments, of The Colonial
Life Insurance Company of America./3/
(ii) By-Laws of The Colonial Life Insurance Company of America./3/
(g) Not Applicable
(h) (i) Investment Management Agreement between Chubb Series Trust and Chubb
Investment Advisory Corporation with respect to the Resolute Treasury Money
Market Portfolio./1/
(ii) Investment Management Agreement between Chubb Series Trust and
Chubb Investment Advisory Corporation with respect to the
<PAGE>
Resolute Bond Portfolio./1/
(iii) Investment Management Agreement between Chubb Series Trust and
Chubb Investment Advisory Corporation with respect to the Resolute Equity
Portfolio./1/
(iv) Investment Management Agreement between Chubb Series Trust and
Chubb Investment Advisory Corporation with respect to the Resolute Small Company
Portfolio./1/
(v) Investment Management Agreement between Chubb Series Trust and Chubb
Investment Advisory Corporation with respect to the Resolute International
Equity Portfolio./1/
(vi) Sub-Investment Management Agreement among Chubb Series Trust, Chubb
Investment Advisory Corporation and Morgan Guaranty Trust Company of New York
with respect to the Resolute Treasury Money Market Portfolio./1/
(vii) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute Bond Portfolio./1/
(viii) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute Equity Portfolio./1/
(ix) Sub-Investment Management Agreement among Chubb Series Trust, Chubb
Investment Advisory Corporation and Morgan Guaranty Trust Company of New York
with respect to the Resolute Small Company Portfolio./1/
(x) Sub-Investment Management Agreement among Chubb Series Trust, Chubb
Investment Advisory Corporation and Morgan Guaranty Trust Company of New York
with respect to the Resolute International Equity Portfolio./1/
(xi) Custodial Services Agreement between Chubb Series Trust, and Morgan
Guaranty Trust Company of New York./2/
(i) Not applicable
(j) Application
2. Specimen Policy (Same as 1(e)).
3. Opinion of counsel as to securities being registered.
4. Not applicable.
5. Not applicable.
<PAGE>
6. Actuarial opinions and consents of Michael J. LeBoeuf, FSA, MAAA.
7. Consent of Ernst & Young LLP, (to be filed by amendment)
8. Procedures Memorandum pursuant to Rule 6e-3(T)(b)(12)(iii) under the
1940 Act./4/
9. Representations, description and undertakings regarding mortality and
expense risk charge, pursuant to Rule 6e-3(T)(b)(13)(iii)(F).
10. Form of Reinsurance Agreement.
11. Form of Trust Agreement between The Colonial Life Insurance Company of
America and financial institution acting as trustee and Policyholder of
the Group Policies.
12. (a) Memorandum regarding reliance on Order of the Commission.
(b) Memorandum regarding reliance on Order of the Commission to deduct
the DAC tax charge.
13. EDGAR Financial Data Schedule. Not applicable.
14. Power of Attorney
- -------------
/1/ Incorporated by reference to Registrant's Pre-effective Amendment No. 2 to
the Registration Statement on Form N-1A, of Chubb Series Trust filed on
July 22, 1994, File No. 33-72834.
/2/ Incorporated by reference to the Registration Statement on Form N-1A of
Chubb Series Trust, filed on December 10, 1993, File No. 33-72834.
/3/ Incorporated by reference to the Registration Statement on Form S-6 of
Colonial Separate Account B, filed April 8, 1994, File No. 33-77496.
/4/ Incorporated by reference to the Registration Statement on Form S-6 of
Chubb Separate Account C, filed April 11, 1995, File No. 33-72830.
<PAGE>
The signatures
Written consents of the following persons:
(a) Michael J. LeBoeuf, FSA, MAAA, contained in
Exhibit 6 below.
(b) Ernst & Young LLP, independent auditors, contained in
Exhibit 7 below.
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of
the instructions as to exhibits in Form N-8B-2:
(a) Certified Copy of Resolution of the Board of Directors of The Colonial
Life Insurance Company of America establishing the Colonial Separate Account
D/4/.
(b) Not Applicable
(c)(i) Form of Distribution Agreement among The Colonial Life Insurance
Company of America, Colonial Separate Account D, and Chubb Securities
Corporation/4/.
(ii) Specimen Variable Contracts Selling Agreement between Chubb
Securities Corporation and Selling Broker-Dealers/4/.
(iii) Specimen District Manager's Agreement of Chubb Securities
Corporation/4/.
(iv) Specimen Registered Representative's Agreement of Chubb
Securities Corporation/4/.
(v) Schedule of Commissions/4/.
(d) Not Applicable
(e)(i) Specimen group flexible premium variable life insurance policy and
certificate./4/
(ii) Specimen group joint and last survivor flexible premium variable
life insurance policy and certificate/4/.
(iii) Forms of Riders/4/.
(f)(i) Amended and Restated Charter, with all amendments, of The Colonial
Life Insurance Company of America/1/.
(ii) By-Laws of The Colonial Life Insurance Company of America/1/.
(g) Not Applicable
(h)(i) Investment Management Agreement between Chubb Series Trust and Chubb
Investment Advisory Corporation with respect to the Resolute Treasury Money
Market Portfolio/2/.
(ii) Investment Management Agreement between Chubb Series Trust and
Chubb Investment Advisory Corporation with respect to the Resolute Bond
Portfolio/2/.
(iii) Investment Management Agreement between Chubb Series Trust and
Chubb Investment Advisory Corporation with respect to the Resolute Equity
Portfolio/2/.
<PAGE>
Corporation with respect to the Resolute Equity Portfolio/2//
(iv) Investment Management Agreement between Chubb Series Trust and
Chubb Investment Advisory Corporation with respect to the Resolute Small Company
Portfolio/2/.
(v) Investment Management Agreement between Chubb Series Trust and
Chubb Investment Advisory Corporation with respect to the Resolute International
Equity Portfolio/2/.
(vi) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute Treasury Money Market Portfolio/2/.
(vii) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute Bond Portfolio/2/.
(viii) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute Equity Portfolio/2/.
(ix) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute Small Company Portfolio/2/.
(x) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute International Equity Portfolio/2/.
(xi) Custodial Services Agreement between Chubb Series Trust, and
Morgan Guaranty Trust Company of New York/3/.
(i) Not applicable
(j) Application/4/
2. Specimen Policy (Same as 1(e)).
3. Opinion of counsel as to securities being registered/4/.
4. Not applicable.
5. Not applicable.
6. Actuarial opinions and consents of Michael J. LeBoeuf, FSA, MAAA/4/.
7. Consent of Ernst & Young LLP, independent auditors.
8. Procedures Memorandum pursuant to Rule 6e-3(T)(b)(12)(iii) under the
1940 Act.
9. Representations, description and undertakings regarding mortality and
expense risk charge, pursuant to Rule 6e-3(T)(b)(13)(iii)(F)/ 4/.
10. Form of Reinsurance Agreement/4/.
<PAGE>
11. Form of Trust Agreement between The Colonial Life Insurance Company of
America and financial institution acting as trustee and Policyholder of the
Group Policies/4/.
12. (a) Memorandum regarding reliance on Order of the Commission/4/.
(b) Memorandum regarding reliance on Order of the Commission to deduct
the DAC tax charge.
13. EDGAR Financial Data Schedule. Not applicable.
/1/ Incorporated by reference to the Registration Statement on Form S-6 of
Colonial Separate Account B, filed April 8, 1994, File No. 33-77496.
/2/ Incorporated by reference to Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1A of Chubb Series Trust, filed on July 22,
1994, File No. 33-72834.
/3/ Incorporated by reference to the Registration Statement on Form N-1A of
Chubb Series Trust, filed on December 10, 1993, File No. 33-72834.
/4/ Incorporated by reference to the Registration Statement on Form S-6 of
Colonial Separate Account D, filed on January 19, 1995, File No. 33-88632.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Colonial Separate Account D, has duly caused this Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized, and its seal
to be hereunto affixed and attested, all in Concord, New Hampshire, on the 26th
day of February, 1996.
Colonial Separate Account D
(Registrant)
(SEAL)
The Colonial Life Insurance Company
of America
(Depositor)
/s/ Theresa M. Stone
By:
Theresa M. Stone
President and Chief Executive Officer
Title:
Attest:
/s/ Charles C. Cornelio
---------------------------------------
Charles C. Cornelio, Assistant Secretary
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
The Colonial Life Insurance Company of America as Depositor has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, and its seal to be hereunto affixed and attested, all in
Concord, New Hampshire, on the 26th day of February, 1996.
The Colonial Life Insurance Company
of America (Depositor)
(SEAL)
/s/ Theresa M. Stone
By:_
Theresa M. Stone
President and Chief Executive Officer
Title:_
Attest: /s/ Charles C. Cornelio
----------------------------------
Charles C. Cornelio, Assistant Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
Signatures
----------
Title
-----
*
----------------------------------
Percy Chubb, III
Director and Vice Chairman
*
----------------------------------
Frederick H. Condon
Director, Senior Vice President, General
Counsel, and
<PAGE>
Secretary
*
----------------------------------
Randall G. Craig
Director
*
----------------------------------
David S. Fowler
Director
*
----------------------------------
Dean R. O'Hare
Director and Chairman
Signatures
---------
Title
-----
*
----------------------------------
Russell C. Simpson
Vice President and Treasurer
/s/ Theresa M. Stone
----------------------------------
Theresa M. Stone
Director, President and Chief
Executive Officer
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Pages
-----
Exhibit 1 (a) - Resolution of The Board of Directors
of The Colonial Life Insurance Company
of America Establishing The Colonial
Separate Account D
Exhibit 1(c)(i) - Form of Distribution Agreement Among
The Colonial Life Insurance Company of
America, Chubb Separate Account D and
Chubb Securities Corporation
Exhibit 1(c)(ii) - Specimen Variable Contacts Selling
Agreement Between Chubb Securities
Corporation and Selling Broker-Dealers
Exhibit 1(c)(iii) - Specimen District Manager's Agreement of
Chubb Securities Corporation
Exhibit 1(c)(iv) - Specimen Registered Representative's
Agreement of Chubb Securities Corporation
Exhibit 1(c)(v) - Schedule of Commissions
Exhibit 1(e)(i) - Specimen Flexible Premium Variable
Life Insurance Policy
Exhibit 1(e)(ii) - Specimen Joint and Last Survivor Flexible
Premium Variable Life Insurance Policy
Exhibit 1(e)(iii) - Form of Riders
Exhibit 1(j) - Application
Exhibit 3 - Opinion of Counsel as to Securities
Being Registered
Exhibit 6 - Actuarial Opinions and Consents of
Michael J. LeBoeuf, FSA, MAAA
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Pages
-----
Exhibit 9 - Representations, Descriptions and
Undertakings Regarding Mortality and
Expense Risk Charge, Pursuant to Rule
6e-3(T) (b) (13) (iii) (F)
Exhibit 10 - Form of Reinsurance Agreement
Exhibit 11 - Form of Trust Agreement Between The
Colonial Life Insurance Company of
America and Financial Institution
Acting as Trustee and Policyholder
of the Group Policies
Exhibit 12(a) - Memorandum Regarding Reliance on Order
of the Commission
Exhibit 12(b) - Memorandum Regarding Reliance on Order
of the Commission to Deduct the DAC
Tax Charge
Exhibit 14 - Power of Attorney
<PAGE>
Exhibit 1(a)
RESOLUTION OF THE BOARD OF DIRECTORS
OF
THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA
ESTABLISHING THE COLONIAL SEPARATE ACCOUNT D
<PAGE>
One Granite Place, P.O. Box 515, Concord, NH 03302-0515. (603) 226-5000
CERTIFICATION
-------------
I, Frederick H. Condon, being duly constituted Secretary of The Colonial Life
Insurance Company of America, a corporation organized and existing under and
by virtue of the Laws of the State of New Jersey (hereinafter called the
Corporation) do hereby certify that the following is a true and complete copy
of a resolution duly adopted at a meeting of the Board of Directors of this
Corporation, duly called and held on June 13, 1994 at which a quorum was
present and voting; and said resolution is still in full force and effect and
has not been rescinded; and that said resolution is not in conflict with the
Charter or By-Laws of this Corporation.
RESOLVED: That pursuant to the provisions of Sections 17B:28-7 of the
New Jersey Statutes Annotated, and any regulations promulgated thereunder
by the New Jersey Commissioner of Insurance, the Board of Directors of
The Colonial Life Insurance Company of America ("the Company") does
hereby establish a separate account to be known as "Colonial Separate
Account D" for the purpose of allocating thereto any amounts paid to or
held by the Company in connection with the issuance of variable life
insurance policies (the "Policies"), including, but not limited to,
amounts held under optional settlement modes;
FURTHER RESOLVED: That the Chairman, the Vice Chairman, the President,
any Senior Vice President and the Treasurer, or any of them, (herein
"Officers") be, and they each hereby are, severally authorized and
directed, in conjunction with the Company's independent certified public
accountants, legal counsel, independent consultants and/or such others as
they may deem appropriate, to take such actions as they may deem
necessary or appropriate to receive approval of the operation of Colonial
Separate Account D by the New Jersey Commissioner of Insurance;
FURTHER RESOLVED: That the income, gains and losses, realized or
unrealized, in Colonial Separate Account D shall be credited to or
charged against the amounts allocated to Colonial Separate Account D in
accordance with the terms of the Policies, without regard to other
income, gains or losses of the Company;
FURTHER RESOLVED: That Colonial Separate Account D shall be legally
segregated and the assets and contract liabilities shall not be
chargeable with liabilities arising out of any other business which the
Company may conduct and such assets shall not be available to general
creditors of the Company in the event of
Chubb LifeAmerica is the servicemark of
Chubb Life Insurance Company of America . The Colonial Life Insurance Company of
America
Chubb Sovereign Life Insurance Company
<PAGE>
-2-
insolvency of the Company to the full extent permitted
by applicable law;
FURTHER RESOLVED: That Colonial Separate Account D shall be divided into
divisions and subdivisions so that each division or subdivision may invest in
the shares of designated investment companies with the net premiums received
under the Policies as directed by the owners of said Policies;
FURTHER RESOLVED: That the Executive Committee of the Board of Directors be,
and it hereby is, expressly authorized in its discretion and as it may deem
appropriate from time to time in accordance with applicable laws and
regulations: (a) to divide Colonial Separate Account D into one or more
divisions or subdivisions, (b) to modify, consolidate, or eliminate any such
divisions or subdivisions, (c) to change the designation of Colonial Separate
Account D to another designation, (d) to further designate any divisions or
subdivisions thereof, and (e) to take such other action as may be required to
further Colonial Separate Account D's compliance with applicable state and
federal laws;
FURTHER RESOLVED: That amounts allocated to Colonial Separate Account D and any
accumulations thereon, or to any division of Colonial Separate Account D, may be
invested or reinvested in any class of investments which may be authorized in
the Policies, including, but not limited to, shares of an investment company or
companies established pursuant to the Investment Company Act of 1940 and
regulations promulgated thereunder, without regard to any requirements or
limitations prescribed by the laws of the State of New Jersey governing the
investments of life insurance companies; provided, that no assets held in
Colonial Separate Account D will be invested in any investments prohibited by
Section 17B:28-9 of the New Jersey Statutes Annotated;
FURTHER RESOLVED: That the officers be, and they each hereby are, authorized
and directed to execute such agreement or agreements as they deem necessary or
appropriate with one or more investment companies established pursuant to the
Investment Company Act of 1940 and regulations promulgated thereunder;
FURTHER RESOLVED: That the following binding Standards of Conduct applicable to
the Company, its officers, directors, employees, and affiliates ("Persons") with
respect to the purchase and sale of investments of Colonial Separate Account D
be adopted:
(1) No Person shall engage in any action or activity which the Person has
reason to
<PAGE>
-3-
believe could in any way conflict with
Colonial Separate Account D's interest.
(2) No Person, directly or indirectly, shall, in connection with any
transaction: (a) employ any device, scheme or artifice to defraud
Colonial Separate Account D; (b) make to Colonial Separate Account D
any untrue statement of a material fact or omit to state to Colonial
Separate Account D a material fact necessary in order to make the
statements made, in light of the circumstances under which they are
made, not misleading; (c) engage in any act, practice or course of
business which operates or would operate as a fraud or deceit upon
Colonial Separate Account D; or (d) engage in any manipulative
practice with respect to Colonial Separate Account D.
(3) No Person shall accept, directly or indirectly, any gift, favor,
service, or anything of value from any broker, dealer or other Person
which could be construed as being compensation for causing Colonial
Separate Account D to engage in any transaction with such broker,
dealer or other Person.
(4) Each Person shall keep confidential all information regarding past or
future transactions, investment programs and studies of Colonial
Separate Account D, except as may be required by applicable law or as
approved by the Company's Board of Directors.
FURTHER RESOLVED: That the Officers of the Company be, and they each hereby are,
severally authorized to invest cash in Colonial Separate Account D or in any
division thereof as may be deemed necessary or appropriate to facilitate the
commencement of Colonial Separate Account D's operations, including, but not
limited to, compliance with applicable tax laws, or to meet any minimum capital
requirements under the Investment Company Act of 1940 and to transfer cash or
securities from time to time between the Company's general account and Colonial
Separate Account D as deemed necessary or appropriate, so long as such transfers
are not prohibited by law and are consistent with the terms of the Policies;
FURTHER RESOLVED: That the Officers be, and they each hereby are, authorized and
directed, in conjunction with the Company's independent certified public
accountants, legal counsel, independent consultants or such others as they deem
appropriate, to take such action as they deem
<PAGE>
-4-
necessary or appropriate to:
(a) Register Colonial Separate Account D as a unit investment trust under
the Investment Company Act of 1940, as amended;
(b) Register the Policies in such amounts, which may be indefinite
amounts, as the Officers shall from time to time deem appropriate
under the Securities Act of 1933; and
(c) Take all other action on behalf of Colonial Separate Account D and on
behalf of the Company as sponsor and depositor which in their judgment
may be necessary or appropriate in connection with the offering of
said Policies for sale and the operation of Colonial Separate Account
D in order to comply with the Investment Company Act of 1940, the
Securities Exchange Act of 1934, the Securities Act of 1933 and all
other applicable federal laws and regulations, including the filing of
any registration statements, amendments to registration statements,
notification of registration statements, any undertakings, and any
applications for exemptions from the Investment Company Act of 1940,
the Securities Act of 1933 or other applicable federal laws and
regulations;
FURTHER RESOLVED: That the President of the Company, and any Senior Vice
President of the Company, are duly appointed as agents for service of process
under such registration statements and duly authorized to receive communications
and notices from the Securities and Exchange Commission with respect thereto and
exercise any powers given to such agents by the rules and regulations under the
Securities Act of 1933;
FURTHER RESOLVED: That the Officers be, and they each hereby are, authorized
and directed on behalf of Colonial Separate Account D and on behalf of the
Company to take any and all actions that any of them may deem necessary or
advisable in order to offer and sell the Policies, including any registrations,
filings and qualifications, both of the Company, its officers, agents and
employees, and of the Policies, under the insurance and securities laws of any
state or any other jurisdiction, and in connection therewith to prepare,
execute, deliver and file all such applications, reports, covenants,
resolutions, applications for exemptions, consents to service of process and
other papers and instruments as may be required under such
<PAGE>
-5-
laws, and to take any and all further actions which said Officers or legal
counsel for the Company may deem necessary or desirable in order to maintain
such registrations or qualifications for as long as said Officers or legal
counsel deem it to be in the best interest of Colonial Separate Account D and
the Company;
FURTHER RESOLVED: That any form of corporate resolution required by any State
or other jurisdiction in connection with any filing, registration, or approval
as contemplated in these resolutions is hereby adopted, and the Officers be, and
they each hereby are, authorized to certify to the adoption thereof by this
Board;
FURTHER RESOLVED: That the Officers be, and they each hereby are, authorized in
the names and on behalf of Colonial Separate Account D and the Company to
execute and file irrevocable written consents to be used in such States and
other jurisdictions wherein such consents to service of process may be requisite
under the insurance or securities laws thereof in connection with such
registration or qualification of the Policies or Colonial Separate Account D,
and to appoint the appropriate State or public official, or such other person
that may be specified by said insurance or securities laws, as agents of
Colonial Separate Account D and of the Company for the purpose of receiving and
accepting process;
FURTHER RESOLVED: That the Officers be, and they each hereby are, authorized to
establish procedures to the extent required or deemed appropriate, and, subject
to the limitations of applicable law, for providing a pass-through of voting
rights for owners of the Policies with respect to the shares of an investment
company or companies, attributable to them, owned by Colonial Separate Account
D;
FURTHER RESOLVED: That the following general Standard of Suitability, which
expresses the policy of the Company with respect to determining the suitability
for applicants be adopted: No recommendations shall be made to a potential
applicant to purchase a variable life insurance product and no variable life
insurance product shall be issued in the absence of reasonable grounds to
believe that the purchase of same is not unsuitable for such applicant on the
basis of information furnished after reasonable inquiry of such applicant
concerning the applicant's insurance and investment objectives, financial
situation and needs, and any other information known to the Company or to the
sales representative making the recommendations;
<PAGE>
-6-
FURTHER RESOLVED: That the Officers be, and they each hereby are,
authorized and directed to execute such agreement or agreements as they
deem necessary or appropriate:
(a) With Chubb Securities Corporation, or any other qualified entity,
under which Chubb Securities Corporation or such other entity
will be appointed principal underwriter and distributor for the
Policies; and
(b) With one or more qualified banks or other qualified entities,
including the Company or any of its affiliates, to provide
administrative and/or custodial service in connection with the
establishment and maintenance of Colonial Separate Account D and
the design, issuance and administration of the Policies;
FURTHER RESOLVED: That the Officers be, and they each hereby are,
authorized and directed on behalf of the Company to execute and deliver
such agreements and other documents and to do such acts and things as each
of them may in their sole discretion deem necessary or desirable to carry
out the foregoing resolutions and the intent and purposes thereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of this Corporation
this 10th day of January 1995.
/s/ Frederick H. Condon, Secretary
----------------------------------
Frederick H. Condon, Secretary
(SEAL)
<PAGE>
Exhibit 1(c) (i)
FORM OF DISTRIBUTION AGREEMENT AMONG
THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA,
COLONIAL SEPARATE ACCOUNT D AND
CHUBB SECURITIES CORPORATION
<PAGE>
SEPARATE ACCOUNT DISTRIBUTION AGREEMENT
BETWEEN
CHUBB SECURITIES CORPORATION
AND
THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA
FOR ITSELF AND ON BEHALF OF ITS
COLONIAL SEPARATE ACCOUNT D
Page 1 of 12
<PAGE>
This Separate Account Distribution Agreement (this
"Agreement") is made this ____ day of __________, 1995, by and between Chubb
Securities Corporation, a corporation organized and existing under the laws of
the State of New Hampshire with its principal place of business in Concord, New
Hampshire (herein the "Distributor"), and The Colonial Life Insurance Company of
America, an insurance company organized and existing under the laws of the State
of New Jersey with its home office in Parsippany, New Jersey (herein the
"Company"), for itself and on behalf of its Colonial Separate Account D, a
separate account established pursuant to the provisions of section 17B:28-7 of
the New Jersey Statutes Annotated and a registered investment company under the
Investment Company Act of 1940 (the "1940 Act") (herein the "Separate Account").
WITNESSETH:
WHEREAS, the Company and the Separate Account propose to offer for sale
certain variable life insurance policies and certificates (together with any
riders, the "Policies") which may be deemed to be securities under the
Securities Act of 1933 (the "1933 Act") and the laws of some states; and
WHEREAS, the Distributor, a wholly-owned subsidiary of Chubb Life Insurance
Company of America, and an affiliate of the Company, is registered as a broker-
dealer with the
-2-
<PAGE>
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934 (the "1934 Act") and is a member of the National Association of
Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the parties desire to have the Distributor act as principal
underwriter for the Separate Account and assume full responsibility for the
securities activities of any "person associated" (as that term is defined in
Section 3(a)(18) of the 1934 Act) with the Distributor and engaged directly or
indirectly in the variable life operations (the "Associated Persons"); and
WHEREAS, the parties desire to have the Company perform certain services in
connection with the sale of the Policies;
NOW, THEREFORE, in consideration of the covenants and mutual promises
herein contained and of other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, the Distributor and the
Company agree as follows:
1. The Distributor will act as the exclusive principal underwriter during
the term of this Agreement in each state or other jurisdiction where the
Policies may legally be sold. The Distributor shall at all times function as and
be deemed to be an independent contractor and will be under no
-3-
<PAGE>
obligation to effectuate any particular amount of sales of the Policies or to
promote or make sales, except to the extent the Distributor deems advisable.
Anything in this Agreement to the contrary notwithstanding, the Company retains
the ultimate right to control the sale of the Policies, including the right to
suspend sales in any jurisdiction or jurisdictions, to appoint and discharge
agents of the Company, or to refuse to sell a Policy to any applicant for any
reason whatsoever.
2. The Distributor will assume full responsibility for the securities
activities of, and for securities law compliance by, the Associated Persons,
including, as applicable, compliance with the NASD Rules of Fair Practice and
Federal and state laws and regulations. The Distributor, directly or through
the Company as its agent, will (a) make timely filings with the SEC, NASD, and
any other securities regulatory authorities of any sales literature or materials
relating to the Separate Account, as required by law to be filed, (b) make
available to the Company copies of any agreements or plans intended for use in
connection with the sale of the Policies in sufficient number and in adequate
time for clearance by the appropriate regulatory authorities before they are
used, and (c) train the Associated Persons, use its best efforts to prepare them
to complete satisfactorily any and all applicable NASD and state qualification
examinations, register the Associated Persons
-4-
<PAGE>
as its registered representatives before they engage in securities activities,
and supervise and control them in the performance of such activities. In
connection with the clearance by appropriate regulatory authorities the parties
agree to use their best efforts to obtain such clearance by the appropriate
regulatory authorities as expeditiously as reasonably possible and shall not use
any materials, plan or agreement in any jurisdiction unless all filings have
been made and approvals obtained that are necessary to make said use proper and
legal therein.
3. The Company shall undertake to appoint the Distributor's qualified
representatives as life insurance agents of the Company, and shall be
responsible for ensuring that only agents properly qualified under the insurance
laws of all relevant jurisdictions will engage in the offer and sale of
Policies. Completed applications for the Policies shall be transmitted directly
to the Company for acceptance or rejection in accordance with insurance
underwriting and selection rules established by the Company. Initial and
subsequent purchase payments under the Policies shall be made payable to the
Company and shall be held in a fiduciary capacity for and forwarded to the
Company promptly.
4. The Distributor shall take reasonable steps to ensure that the various
representatives appointed by it shall not make recommendations to an applicant
to purchase a
-5-
<PAGE>
Policy in the absence of reasonable grounds to believe that the purchase of the
Policy is suitable for said applicant. While not limited to the following, a
determination of suitability shall be based on information furnished to a
representative after reasonable inquiry of such applicant (and any other
information known about the applicant) concerning the applicant's insurance and
investment objectives and financial situation and needs, including the
likelihood that the applicant will make sufficient purchase payments to derive
the benefits thereof.
No person shall use any sales aids, promotional material, or sales
literature which has not been specifically approved in advance by the Company,
and the Company will be responsible for filing such items, as necessary, with
any insurance regulatory authorities and, where necessary, obtaining approvals
of said authorities. No person shall in connection with the offer or sale of
the Policies, make any representations or communicate any information regarding
the Policies or the Company, which are not contained in materials approved by
the Company as aforesaid or in the then-effective Registration Statement of the
Separate Account under the 1933 Act.
5. As between the Company and the Distributor, the Company will, except as
otherwise provided in this Agreement, bear and/or reimburse the Distributor for
the cost of all the
-6-
<PAGE>
Distributor's services and expenses hereunder, including direct legal services
and expenses and registration, filing and other fees, in connection with (a)
registering and qualifying the Separate Account, the Policies, and (to the
extent requested by the Distributor) the Associated Persons with Federal and
state regulatory authorities and the NASD (including the training of Associated
Persons for this purpose), (b) printing, filing and distributing all
registration statements and prospectuses (including amendments), Policies,
notices, periodic reports, proxy solicitation material, sales literature and
advertising filed or distributed in connection with the sale of the Policies,
and (c) complying with the requirements of Section 7 below.
6. The Company will, in connection with the sale of the Policies,
reimburse the Distributor for all amounts (including the sales commissions,
trail commissions and expense reimbursement allowances described in the
prospectus for the Policies) paid to the sales representatives or to other
broker-dealers who have entered into selling agreements with the Distributor.
7. The Distributor, directly or through the Company as its agent, will (a)
maintain and preserve in accordance with Rules 17a-3 and 17a-4 under the 1934
Act all books and records required to be maintained in connection with the offer
and sale of the Policies being distributed pursuant to
-7-
<PAGE>
this Agreement, which books and records shall remain the property of the
Distributor and shall be subject to inspection by the SEC in accordance with
Section 17 (a) of the Act, and (b) upon or prior to completion of each
transaction for which a confirmation is legally required, send a written
confirmation for each such transaction reflecting the facts of the transaction.
All records maintained hereunder will be available to properly-constituted
governmental authorities, should the same be required to be filed with or
reviewed by said authorities. The Company shall have access to all records
maintained hereunder and, upon reasonable request, copies shall be furnished by
the Distributor.
8. The Distributor will execute such papers and do such acts and things as
shall from time to time be reasonably requested by the Company for the purpose
of (a) maintaining the registration of the Policies under the 1933 Act and the
Separate Account under the 1940 Act, and (b) qualifying and maintaining
qualification of the Policies for sale under the applicable laws of any state.
9. Each party hereto shall advise the other promptly of (a) any action of
the SEC or any authorities of any state or territory, of which it has knowledge,
affecting registration or qualification of the Separate Account or the Policies,
or the right to offer the Policies for sale, and (b) the happening of any event
which makes untrue any statement or
-8-
<PAGE>
which requires the making of any change, in the registration statement or
prospectus in order to make the statements therein not misleading.
10. Neither party hereto shall be liable to the other for any action taken
or omitted by it, or any of its officers, agents or employees, in performing
their responsibilities under this Agreement in good faith and without
negligence, willful misfeasance or reckless disregard of such responsibilities.
11. As compensation for the Distributor's assuming the expenses and
performing the services to be assumed and performed by it pursuant to this
Agreement, the Distributor shall receive from the Company such amounts and at
such times as may from time to time be agreed upon by the Distributor and the
Company.
12. As compensation for its services performed and expenses incurred under
this Agreement, the Company will receive all amounts charged as "Sales Charges"
under the Policies. It is understood that the Company assumes the risk that the
above compensation for its services may not prove sufficient to cover its actual
expenses in connection therewith.
13. It is understood that any Policy owner or agent of
-9-
<PAGE>
the Separate Account may be a policyholder, shareholder, director, officer,
employee or agent of, or be otherwise interested in, the Distributor, any
affiliated person of the Distributor, any organization in which the Distributor
may have an interest or any organization which may have an interest in the
Distributor; that the Distributor, any such affiliated person or any such
organization may have an interest in the Separate Account; and that the
existence of any such dual interest shall not affect the validity hereof or of
any transaction hereunder except as may otherwise be provided in the articles of
organization or by-laws of the Distributor or by specific provisions of
applicable law. For the purpose of this Agreement, the term "affiliated
persons" shall have its respective meaning defined in the 1940 Act subject,
however, to such exemptions as may be granted by or pursuant to that Act.
14. This Agreement shall become effective as of the date of its execution,
shall continue in full force and effect until terminated, may be amended at any
time by mutual agreement of the parties hereto, and may be terminated at any
time without penalty on sixty days' written notice by any party to the others.
15. The Distributor will not assign or delegate its responsibilities under
this Agreement, except with the written consent of the Company.
-10-
<PAGE>
16. This Agreement shall be construed in accordance with the laws of the
State of New Hampshire.
17. The Distributor shall keep confidential any information obtained
pursuant to this Agreement, and shall disclose such information only if the
Company has authorized such disclosure or if such disclosure is expressly
required by applicable Federal or state authorities.
18. The Distributor, the Company and the Separate Account agree to
cooperate fully in any insurance regulatory examination, investigation, or
proceeding or any jurisdictional proceeding arising in connection with the
Policies. The Distributor, the Company and the Separate Account further agree
to cooperate fully in any securities regulatory examination, investigation, or
proceeding or any judicial proceeding with respect to the Company, the Separate
Account, the Distributor, their affiliates and their agents or representatives,
to the extent that such examination, investigation or proceeding is in
connection with Policies distributed under this Agreement. The Distributor
shall furnish applicable Federal and state regulatory authorities with any
information or reports in connection with its services under this Agreement,
which authorities may request in order to ascertain whether the Company's
operations are being conducted in a manner consistent with any applicable law or
regulations.
-11-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
CHUBB SECURITIES CORPORATION
BY: _________________________
Bruce R. Stefany
TITLE: President
----------------------
THE COLONIAL LIFE INSURANCE COMPANY
OF AMERICA FOR ITSELF AND ON BEHALF
OF ITS COLONIAL SEPARATE ACCOUNT D
BY: _________________________
Theresa M. Stone
TITLE: President and Chief Executive Officer
-------------------------------------
-12-
<PAGE>
Exhibit 1(c) (ii)
SPECIMEN VARIABLE CONTRACTS SELLING AGREEMENT BETWEEN
CHUBB SECURITIES CORPORATION AND
SELLING BROKER-DEALERS
<PAGE>
Chubb Securities Corporation
BROKER-DEALER AGREEMENT
THIS AGREEMENT is made by and between CHUBB SECURITIES CORPORATION, a
corporation organized and existing under the laws of the State of New Hampshire
with its principal place of business in Concord, New Hampshire (hereinafter
called "Chubb") and _________________________________________, a corporation
organized and existing under the laws of the State of ________________________
_______________________________ (the "State") with its principal place of
business in _________________________________________ (hereinafter called
"Broker").
In consideration of the premises and the mutual agreements herein made, it
is agreed as follows:
EFFECTIVE DATE:
This agreement shall be effective as of ____________________,19__.
BACKGROUND:
Chubb, pursuant to the provisions of that certain Distribution Agreement
dated as of February 27,1985 between Chubb and Chubb Life Insurance Company of
America ("Chubb Life"), acts as distributor of certain flexible premium variable
life insurance policies issued by Chubb Life. Chubb desires that Broker
distribute such policies in ________________________________, and Broker desires
to sell such policies, through its agents in such states, on the terms and
conditions set forth hereinafter.
CONDITIONS:
1. Broker represents, warrants and covenants that:
a) It is and will remain at all times during the term of this Agreement a
member in good standing of the National Association of Securities Dealers, Inc.
("NASD") and a broker-dealer duly registered with the Securities and Exchange
Commission ("SEC") and licensed as a broker-dealer under applicable state
securities laws;
b) It is a corporation organized and existing in good standing under the
laws of the State and the execution and performance of this Agreement has been
duly authorized and will not violate any document or instrument to which it is a
party or by which it is bound:
-1-
<PAGE>
c) It is in compliance with the applicable net capital requirements of the
SEC, the NASD and applicable securities exchanges and that it will, if so
requested, provide to persons designated by Chubb copies of each Statement of
Financial Condition contained in Financial and Operational Combined Uniformed
Single ("FOCUS") report filed with the SEC and any other applicable regulatory
authority;
d) It will immediately notify Chubb should the capital percentage, capital
ratio, or dollar amount of required net capital exceed or fall below the
percentages or amounts required under any applicable net capital rule or
regulations;
e) It is in compliance, and at all times during the term of this Agreement
will remain in compliance, with the capital and financial requirements of every
state in which it is licensed as a broker-dealer;
f) It will notify Chubb immediately in the event a determination is made
to cancel, terminate or substantially modify its blanket bond insurance
coverage;
g) It will keep confidential any confidential information it may acquire
as a result of this Agreement regarding Chubb, its affiliates' and subsidiaries'
affairs, which requirement shall survive the termination of this Agreement;
h) Only representatives of Broker who are agents of Chubb Life, and duly
registered as such with states having jurisdiction over such representatives,
may sell such policies.
2. Chubb represents, warrants and covenants that:
a) It is and will remain at all times during the term of this Agreement a
member in good standing of the NASD and a broker-dealer duly registered with the
SEC and licensed as a broker-dealer under applicable state securities laws;
b) It is a New Hampshire corporation, and that the execution and
performance of this Agreement has been duly authorized;
c) It is in compliance, and during the term of this Agreement will remain
in compliance, with the capital and financial reporting requirements of the NASD
and the capital requirements of every state in which it is licensed as a broker-
dealer; and
d) It shall keep confidential any confidential information it may acquire
as a result of this Agreement regarding Broker's business and affairs. which
requirement shall survive termination of this Agreement.
3. Broker shall, except as hereinafter specifically provided, cause its
representatives to sell such policies in the state(s) designated in the preamble
to this Agreement and in which both Chubb and the policies are duly registered.
Chubb, in its sole discretion, may reject any applications for a policy
submitted to it by the Broker or any of its representatives.
-2-
<PAGE>
4. Chubb, subject to the terms and conditions contained herein, hereby
authorizes Broker as an independent contractor, to make sales of such policies
for which Chubb acts as a distributor. Broker agrees to direct the sales
activities of its Registered Representatives and to enforce written supervisory
procedures to assure strict compliance with applicable rules and regulations of
NASD, and any applicable state securities laws and regulations.
a) Broker shall have sole responsibility for maintaining an organized
program of supervision and compliance, consistent with the rules and regulations
of the SEC, the NASD, any applicable national securities exchanges and any state
securities regulatory agency having jurisdiction, with respect to the sale of
such policies. Such program shall include, but not be limited to, the following
types of procedures:
(i) Review, verification and approval of all new accounts and
applications for the purpose of establishing the identity, capacity to contract,
reputability, financial condition, creditworthiness, investment objectives and
needs of each customer (and if applicable, essential information concerning such
customer's agent); and obtaining and providing all documents and agreements
required in opening, operating and maintaining such a policy, including, but not
limited to, delivery of the current prospectus:
(ii) Review of all statements relating to each customer's policy;
(iii) Investigation and analysis of all bona fide customer complaints and
regulatory or customer inquiries relating to policies sold through Broker, with
prompt notification thereof to Chubb:
(iv) Registration of the firm as a broker-dealer and of sales personnel
in all states in which business is conducted and such registration is required.
5. Broker agrees to use its best efforts on behalf of Chubb while performing
the functions set forth herein. Broker agrees to promptly report and remit to
Chubb all checks, drafts or funds of any kind received from clients and in the
event of failure to do so, all rights hereunder, including all accrued and
accruing commissions, shall immediately terminate.
6. Broker shall be free to exercise its own judgment as to whom to solicit
and the time, place and manner of solicitation. Broker shall pay all expenses
incurred by it hereunder and shall comply with all federal end state laws,
ordinances and regulations relating thereto.
7. Broker hereby assigns to Chubb any and all commissions or other monies
now or hereafter owed to it, arising from the sale of such policies by its
authorized representatives or from any other business which Broker may do with
Chubb Life Insurance Company of America, or any subsidiary or affiliate thereof,
or their lawful successors. as security for repayment for any advance or other
extension of credit by Chubb to Broker.
-3-
<PAGE>
Broker hereby authorizes Chubb Life Insurance Company of America. or any of its
subsidiaries or affiliates, upon receipt of written demand by Chubb, to pay such
monies to Chubb, to the extent of Chubb's interest therein or, in the
alternative, Broker hereby grants to Chubb and its affiliates a right of offset
against such commissions or other monies due Broker, which right shall survive
the termination of this Agreement.
8. Except as otherwise stated herein, Broker shall be entitled to
commissions with respect to all sales of such policies it shall make in
accordance with the Commission Schedule attached hereto, which schedule may be
modified at any time by Chubb. All commissions are payable only upon receipt of
full payment of premiums due on such policies and are not paid until such
premiums are earned. Payments, if any, made to Broker's account in excess of
commissions earned by it in accordance with said Commission Schedule, as amended
or supplemented, shall be deemed an advance against future commissions and the
amount of any such excess shall be refunded to Chubb in the event of termination
of this Agreement, to the extent that such commissions have not been earned
prior to such termination.
In the event this Agreement is terminated by Chubb for cause, or Broker is
dissolved or liquidated, no further commissions will be payable to Broker
pursuant to this Agreement.
9. Chubb will, each month, furnish to Broker a statement of Broker's account
showing all earnings and payments made to its account allocated by
representative registered with Broker and the balance due from Chubb. Broker
agrees to notify Chubb, in writing, within 30 days, of any discrepancy or
disagreement with such statement in any respect, and in the absence of such
notice, such statement shall be conclusively presumed to be correct unless the
parties mutually agree to an adjustment in writing.
Notwithstanding anything to the contrary herein, Chubb shall have no
obligation hereunder to any registered representative of Broker.
10. Broker shall be responsible and liable for any damages arising Out of
the acts or omissions of Broker, its registered representatives and/or its
employees and does hereby agree to indemnify and hold Chubb harmless against any
loss or expense arising out of or resulting from any failure by the indemnifying
party or any of its registered representatives and/or employees to carry out
fully and without negligence the duties and responsibilities assigned to it
herein.
Chubb shall be responsible and liable for any damages arising out of the acts
or omissions of Chubb and/or its employees and does hereby agree to indemnify
and hold Broker harmless against any loss or expense arising out of or resulting
from any failure by the indemnifying party or any of its employees to carry out
fully and without negligence the duties and responsibilities assigned to it
herein.
-4-
<PAGE>
If any action or proceeding shall be brought against Chubb or Broker relating
to a policy sold pursuant to this Agreement, the party against whom such action
or proceeding is brought shall give prompt written notice to the other party to
this Agreement if a claim is intended to be asserted against such other party
with respect to indemnity against any loss or expense and such other party shall
be entitled to participate in the defense thereof at its own expense.
In the event of any dispute with a policyholder, Chubb shall have the right
to take such action as Chubb may in its sole discretion deem necessary to
promptly effect a mitigation of damages or limitation of losses without
obtaining the prior consent of Broker.
Chubb shall have the right to settle with any policyholder engaged in a
dispute with Chubb or Broker without the prior consent of Broker and without
waiving or electing to relinquish any rights or remedies Chubb may have against
Broker.
Without limiting the foregoing indemnities, Chubb and Broker each agree to
indemnify and hold harmless the other against any breach of representation,
warranty or covenant herein by the indemnifying party.
The indemnification provisions of this Agreement shall remain operative and
in full force and effect, regardless of the termination of this Agreement and
shall survive any such termination.
11. Broker shall submit to Chubb, for written approval in advance of use, all
advertising, signs and sales promotion material involving the use of Chubb's
name and/or the sale of such policies.
12. No relationship of principal and agent or partnership or joint venture
between the parties hereto is intended to be established and neither party shall
hold itself out as the agent, partner or joint ventures of or with the other
party in any respect whatsoever. Except for this Agreement, no other legal
relationship is intended between the parties.
13. This Agreement may be terminated at any time by either party upon thirty
(30) days written notice to the other, and may be terminated immediately by
Chubb for cause. For purposes of this Section 1 3, "cause" shall mean failure to
return money to clients where appropriate, failure to account for any money
received from or on behalf of Chubb, any fraud, misrepresentation or dishonesty
in any relationship with Chubb, its affiliates, or any past, present or proposed
client, violation of any federal or state law or regulation, or violation of any
of the terms of this contract.
Notice of such termination shall be deemed to be given on the day mailed or
delivered in hand to an officer of either party. If mailed to Chubb, such notice
shall be addressed to the principal office of Chubb, currently One Granite
Place, Concord, New Hampshire 03301, and if mailed to the Broker, shall be
addressed to the last known address as shown on the records of Chubb.
-5-
<PAGE>
14. Broker may not assign this Agreement without the prior written approval
of Chubb.
15. This Agreement is exclusively for and shall inure to the benefit of the
parties hereto, their respective heirs, legal representatives. successors and
assigns and shall not be deemed to create any rights for the benefit of third
parties.
16. This Agreement is made in the State of New Hampshire, and all questions
concerning its validity, construction or otherwise shall be determined under the
laws of New Hampshire.
IN WITNESS WHEREOF, the parties hereto have executed this agreement in
duplicate.
CHUBB SECURITIES CORPORATION
By______________________________
Date________________________________
BROKER
By______________________________
Print Name________________________
Title______________________________
Date_______________________________
R1D1A0282
-6-
<PAGE>
Exhibit 1(c) (iii)
SPECIMEN DISTRICT MANAGER'S AGREEMENT OF
CHUBB SECURITIES CORPORATION
<PAGE>
[LOGO OF CHUBB SECURITIES CORPORATION APPEARS HERE]
Chubb Securities Corporation
One Granite Place, PO Box 2005
Concord, New Hampshire 03302
(603) 226-5000
DISTRICT MANAGER'S
AGREEMENT
This AGREEMENT is made by and between CHUBB SECURITIES CORPORATION, a
corporation organized and existing under the laws of the State of New Hampshire
with its principal place of business in Concord, New Hampshire (hereinafter
called the Company) and _______________________________________________________
__________________ of _________________________ (hereinafter called the District
Manager).
In consideration of the premises and the mutual agreements herein made, it is
agreed as follows:
Effective Date
The agreement shall be effective as of ______________________, 19____________.
Territory
It is agreed that the District Manager will represent the Company in the
State(s) of __________________________________________ and any other state in
which the District Manager becomes registered hereafter.
Terms
1. The Company, subject to the terms and conditions contained herein, hereby
authorizes the District Manager, as an independent contractor, to represent it
in the sale of securities for which the Company may now or hereafter act as
principal, dealer, wholesaler or underwriter. The District Manager agrees to
direct the sales activities of each Sales Representative assigned to the
District Manager's agency and further to enforce the Supervisory Procedures (and
any amendments thereto) issued by the Company from time to time in regard to
such Sales Representatives. The District Manager shall at all times act in
strict compliance with all state and federal securities laws, including but not
limited to the Federal Securities Act of 1933, as amended, and with the rules
and regulations of the National Association of Securities Dealers, Inc.
2. The Company reserves the right to accept or reject any or all business
submitted to it by the District Manager. In all cases in which the question of
credit for business, confirmation of orders, or compensation is not definitely
stipulated herein, the decision of the Company shall be final.
3. The District Manager agrees to use his/her best efforts on behalf of the
Company while so representing it, and will not engage in any employment by, or
representation of, any issuer of or dealer in securities other than those
offered by the Company without the written consent of the Company. The District
Manager agrees to promptly report and remit to the Company all checks, drafts or
funds of any kind received from customers without commingling same with the
District Manager's own funds, and in the event of failure to do so, all rights
hereunder, including all accrued and accruing commissions, shall immediately
terminate. If and when requested by the Company, the District Manager shall
furnish a surety bond satisfactory to the Company. This Agreement shall be
immediately and automatically cancelled upon cancellation of coverage by the
surety under said bond.
4. The District Manager shall be free to exercise his/her own judgment as to
whom to solicit and the time, place and manner of solicitation. The District
Manager shall pay all expenses in connection with conducting business as a Sales
Representative and shall comply with all federal and state laws, ordinances and
regulations relating thereto.
1
Form 3-0826 Ed. 12/89
<PAGE>
The District Manager shall make no solicitation for any securities until he/she
has been duly registered under the applicable state and federal laws, and until
any license or permit required by law has been obtained, and unless such
registration is then in effect.
5. The District Manager agrees that, in connection with all solicitations,
he/she will not take or recommend any action which they may have reason to
believe is not in the best interests of each client or customer. The District
Manager agrees not to make any untrue statement or misrepresentations, or omit
any material facts concerning the securities involved. The District Manager also
agrees to comply in all respects with the Rules of Fair Practice, and other
applicable rules of the National Association of Securities Dealers, Inc. and all
applicable federal and state laws.
6. The District Manager hereby assigns to the Company any and all commissions or
other monies owed to the District Manager under any contracts he/she may have
with the Chubb Life Insurance Company of America or any subsidiary or affiliate
thereof, as security for the repayment of any loan or extensions of credit made
to the customers of the District Manager at the District Manager's request or
for any losses incurred by the Company in any transaction. The District Manager
hereby authorizes Chubb Life Insurance Company of America, or any of its
subsidiaries or affiliates to pay such monies to the Company to the extent of
the Company's interest therein upon receipt of written demand by the Company.
7. If the District Manager's contract with Chubb Securities Corporation has not
been terminated, the District Manager shall be entitled to commissions with
respect to all sales the District Manager shall make in accordance with the
Commission Schedules issued from time to time by the Company and incorporated by
reference herein. All commissions are payable subject to receipt of full payment
for the securities sold. The District Manager hereby expressly waives all rights
to such earned commissions or other payments until such time as the Company is
in actual receipt of the concession due in respect to such sale. The amount of
any such excess shall be refunded to the Company in the event of termination of
this Agreement, to the extent that such commissions have not been earned prior
to such termination. Any indebtedness from the District Manager to the Company
shall be a first lien upon any amount due the District Manager hereunder.
8. The Company agrees that, if any Sales Representative assigned to the
District Manager's agency is terminated under any conditions or
circumstances which preclude the payment of commissions thereafter, then
pursuant to Paragraph 8 of such Sales Representative's Agreement with the
Company, the Company shall pay to the District Manager the Sales
Representative's commissions which become due thereafter as personal production.
The Company shall, then treat such commissions as business personally produced
by the District Manager.
9. If the District Manager either dies or retires after attaining the age of 55
or is permanently and totally disabled and terminates his license with the
National Association of Securities Dealers, Inc., the Company will continue to
pay commissions subject to the following conditions and limitations. If this
Agreement is terminated for any reason other than death, retirement or permanent
and total disability, then no commissions or other compensation shall be paid;
provided however, that if this Agreement is terminated for any reason other than
the National Association of Securities Dealers, Inc. disqualification, then
commissions will continue to be paid in accordance with the Supplemental
Commission Schedule (or any replacement thereof) on all premium payments
received by the Company on variable life insurance products.
Other than in the event of death, the District Manager must agree to the
continuance of this Agreement and must agree in writing not to solicit any new
securities business or to attempt to obtain a securities license through any
other entity.
If the District Manager so agrees, or in the event of death, the Company
will continue to pay to the District Manager or his/her estate, all commissions
due the District Manager totalling in excess of $100 per annum on business
personally produced by the District Manager. Commissions payable will be
determined based on New Customer Account forms executed prior to the termination
of his license. Commissions will be payable for a period not to exceed 10 years
from the date of termination or death. Commissions will be paid for the balance
of the calendar year at the rate currently in effect at the time of termination.
Thereafter, commissions will be paid at the appropriate commission level as
determined pursuant to the terms of the District Manager's Commission Schedule.
The Company will not pay commissions to any District Manager who is
disqualified from association with any member of the National Association of
Securities Dealers, Inc. because of revocation, expulsion, suspension, or any
other reason, nor will the Company pay commissions in violation of any
applicable laws or regulations.
10. The Company will, each month, furnish to the District Manager a statement of
the District Manager's account showing all earnings and payments made to his/her
account and the balance due from the Company and the amount of any indebtedness
due from the District Manager to the Company. The District Manager agrees to
notify the Company, in writing,
2
<PAGE>
within 30 days, of any discrepancy or disagreement with such statement in any
respect. In the absence of such notice, such statement shall be conclusively
presumed to be correct unless the parties mutually agree to an adjustment in
writing.
11. The Company may offset against any commissions or other monies accruing to
the account of the District Manager under the terms of this Agreement any debts,
liabilities, or other obligations of the District Manager due to the Company or
any affiliate of the Company. This right of offset shall apply both during the
existence of this Agreement and upon its termination.
12. Any commissions or other compensation due to a Sales Representative
assigned to the District Manager's agency will be included in the commission
paid to the District Manager for payment to the Sales Representative, unless the
District Manager informs the Company in writing to pay commissions or other
compensation directly to the Sales Representative. The District Manager agrees
to pay commissions or other compensation to the Sales Representative in
accordance with the Commission Schedules issued by the Company.
13. The District Manager shall obtain and maintain for the term of this
Agreement errors and omissions insurance, satisfactory to the Company, and shall
provide proof of such coverage to the Company.
14. This Agreement may be terminated at any time by either party upon thirty
(30) days written notice to the other, and may be terminated immediately by the
Company for cause or breach of this Agreement by the District Manager. Notice of
such termination shall be deemed to be given on the day mailed or delivered. If
mailed to the Company, such notice shall be addressed to the principal
office of the Company at One Granite Place, Concord, New Hampshire 03301. If
mailed to the District Manager, notice shall be addressed to the last known
address as shown on the records of the Company.
15. With respect to any concession which the Company may receive as a residual
concession at the termination of a direct participation program, it being
understood that any such residual concession to the Company is contingent in
nature and there is no guarantee that the Company will ever actually receive
such payment, the Company will, upon receipt of such residual concession, pay
out a commission to the District Manager in accordance with the vesting schedule
as follows:
(i) If the District Manager has been under agreement with the Company for no
less than one nor more than five years, then he/she shall be vested to receive
any residual concession three years or more after the program sale is made;
(ii) If the District Manager has been under agreement with the Company for no
less than five nor more than ten years, he/she shall be vested to receive any
residual concession two years or more after the program sale is made; and
(iii) If the District Manager has been under agreement with the Company for more
than ten years, then he/she shall be vested to receive any residual concession
one year or more after the program sale is made;
provided, however, that the District Manager must continue to be under agreement
with the Company for the number of years set forth in the applicable portion of
the above vesting schedule after a program sale is made. If the District Manager
does not remain under agreement for the applicable number of years after a
program sale is made, then no residual concession shall be paid. The amount of
the residual concession commission paid shall be as set forth in the Commission
Schedule in effect at the time of the payment, but in no event will the
commission be less than 75% of the concession which the Company actually
receives.
Payment of a commission to the District Manager out of any residual concessions
received by the Company will be considered as any other commission and all
provisions of this Agreement which relate to commissions will also apply to
these commissions, specifically including but not limited to the terms of
paragraphs 8 and 9.
16. This Agreement is made in the State of New Hampshire and all questions
concerning its validity, construction or otherwise shall be determined under the
laws of New Hampshire.
IN WITNESS WHEREOF, the parties hereto have executed this agreement in
duplicate as of the date first written below.
Chubb Securities Corporation District Manager______________________
by:_______________________________ ______________________________________
Date:_____________________________ Date:_________________________________
Date:_______________________
3
<PAGE>
[LOGO OF CHUBB SECURITIES CORPORATION APPEARS HERE]
Chubb Securities Corporation
One Granite Place, PO Box 2005
Concord, New Hampshire 03302
(603) 226-5000
DISTRICT MANAGER COMMISSION SCHEDULE
This Commission Schedule is a part of the District Manager's Agreement entered
into by the District Manager and the Company, is incorporated by reference
therein, and supersedes any prior schedule.
Commissions will be a percentage of total dealer concession actually paid to the
Company on all business produced personally by the District Manager or by any
and all Sales Representatives assigned to the District Manager for supervision.
Commissions will be paid on the following transactions:
1. Variable or Fixed Annuity and Mutual Fund Contractual Sales - Commissions
will be paid on first year and subsequent payments.
2. Private Placements - Commissions will be paid for all staged-in payments as
well as any residual benefits available to the District Manager. For the
purposes of computing commissions on private placements, the Company shall
retain one-third of any marketing or due diligence expense allowance (or
other terminology generally accepted to mean such a concept) paid on a per
unit basis in excess of 9%, and will pay commissions out of the balance.
3. General Securities Sales of Any Other Type - No commissions are payable on
the Execution fee collected from the customer. The company will pay
commissions in accordance with the schedule below, based on 80% of the dealer
concession generated from the general securities transactions, net of ticket
and administrative charges.
4. Mutual Funds, Public Limited Partnerships, Unit Investment Trusts.
5. Any Other Sales Made Available Through the Company's Facilities - In
accordance with Supplemental Commission Schedules.
During the first contract year (12 months following the date of full
registration with the Company), the District Manager will receive 40% of Dealer
Concession. A level in excess of 40% can be established during the first
contract year if the District Manager provides the Company with proof of
earnings from Securities Sales for a period immediately preceding registration
with the Company. This higher level of commission must be authorized in writing
by a Principal of the Company.
After the first contract year, a commission level will be established for future
commission payments on the basis of the Dealer Concession achieved by the
District Manager during the first contract year. The commission level for each
subsequent year will be established thereafter in January, based on the previous
calendar year's Dealer Concession.
Overriding commission has been incorporated in the below commission levels. Any
reference to overriding commissions in the District Manager's Agreement is
superseded by this Commission Schedule.
The Dealer Concession levels to establish commission rates are as follows:
Dealer Concession Commission Level
----------------- ----------------
Up to $10,000 40%
$10,000 to $24,999 60%
$25,000 to $49,999 75%
$50,000 to $74,999 77%
$75,000 to $124,999 80%
$125,000 to $199,999 82%
$200,000 to $499,999 85%
$500,000 to $749,999 87%
$750,000 and above 90%
The above commission levels are retroactive to all Dealer Concession earned
after January 1 of the then current year if a new commission level is attained
during any given calendar year.
4
Form 3-0826 Ed. 10/92
<PAGE>
Dealer Concession earned will be monitored to effect the change in commission
level as the District Manager becomes eligible for it. Once a higher commission
level has been achieved, it will be credited and paid on the following
commission statement.
Each District Manager's Dealer Concession production will be subject to review
on June 30th of each year. If the District Manager has not produced dealer
concession above 80% of the prorated minimum for the attained commission level,
the commission rate will be reduced on subsequent commissions earned to the
appropriate level. If the District Manager is still in the first contract year,
no reduction will take effect.
The District Manager shall be responsible for the payment of the Sales
Representative's commission from the commission paid to the District Manager.
Payment to the Sales Representative in excess of the standard commission set
forth in the Sales Representative's contract shall be permissible. Factors such
as sales ability, potential, and other factors may be taken into account in
making such payments to Sales Representatives assigned to the District Manager.
This Commission Schedule rescinds and replaces all prior commission Schedules
issued by the Company as of its effective date and will continue in effect until
such time as a new Schedule is issued by the Company.
Effective date of this Schedule: February 1, 1991.
5
<PAGE>
Exhibit 1(c) (iv)
SPECIMEN REGISTERED REPRESENTATIVE'S AGREEMENT OF
CHUBB SECURITIES CORPORATION
<PAGE>
[LOGO OF CHUBB SECURITIES APPEARS HERE]
Chubb Securities Corporation
One Granite Place, P0 Box 2005
Concord, New Hampshire 03302
(603) 226-5000
SALES REPRESENTATIVE'S
AGREEMENT
This AGREEMENT is made by and between CHUBB SECURITIES CORPORATION, a
corporation organized and existing under the laws of the State of New Hampshire
with its principal place of business in Concord, New Hampshire (hereinafter
called the Company) and_________________________________________________________
___________________ of ___________________________(hereinafter called the Sales
Representative).
In consideration of the premises and the mutual agreements herein made, it is
agreed as follows:
Effective Date
The agreement shall be effective as of__________________________, 19 ________.
Territory
It is agreed that the Sales Representative will represent the Company in the
State(s) of _______________________________________ and any other state in which
the Sales Representative becomes registered hereafter.
Terms
1. The Company, subject to the terms and conditions contained herein, hereby
authorizes the Sales Representative, as an independent contractor, to represent
it in the sale of securities for which the Company may now or hereafter act as
principal, dealer, wholesaler or underwriter. The Sales Representative shall at
all times act in strict compliance with the state and federal securities laws,
including but not limited to the Federal Securities Act of 1933, as amended, and
with the rules and regulations of the National Association of Securities
Dealers, Inc.
2. The Company reserves the right to accept or reject any or all business
submitted to it by the Sales Representative. In all cases in which the question
of credit for business, confirmation of orders, or compensation is not
definitely stipulated herein, the decision of the Company shall be final.
3. The Sales Representatives agrees to use his/her best efforts on behalf of the
Company while so representing it, and will not engage in any employment by, or
representation of, any issuer of or dealer in securities other than those
offered by the Company without the written consent of the Company. The Sales
Representative agrees to promptly report and remit to the Company all checks,
drafts or funds of any kind received from customers without commingling same
with the Sales Representative's own funds and, in the event of failure to do so,
all rights hereunder, including all accrued and accruing commissions, shall
immediately terminate. If and when requested by the Company, the Sales
Representative shall furnish a surety bond satisfactory to the Company. This
Agreement shall be immediately and automatically cancelled upon cancellation of
coverage by the surety under said bond.
4. The Sales Representative shall be free to exercise his/her own judgment as to
whom to solicit and the time, place and manner of solicitation, subject to the
vesting provisions of this Agreement. The Sales Representative shall pay all
expenses in connection with conducting business as a Sales Representative and
shall comply with all federal and state laws, ordinances and regulations
relating thereto. The Sales Representative shall make no solicitation for any
securities until he/she have been duly registered under the applicable state and
federal laws, and until any license or permit required by law have been
obtained, and unless such registration is then in effect.
5. The Sales Representative agrees that, in connection with all solicitations,
he/she will not take or recommend any action which they may have reason to
believe is not in the best interest of each client or customer. The Sales
Representative agrees not to make any untrue statement or misrepresentations, or
omit any material facts concerning the securities involved, and will also comply
in all respects with the Rules of Fair Practice, and other applicable rules of
the National Association of Securities Dealers, Inc. and all applicable federal
and state laws.
6. The Sales Representative hereby assigns to the Company any and all
commissions or other monies owed to the Sales Representative or which hereafter
accrue to the Sales Representative under any contracts he/she may have with the
Chubb Life Insurance Company of America or any subsidiary or affiliate thereof,
as security for the repayment of any loan or extensions of credit made to the
customers of
<PAGE>
the Sales Representative at the Representative's request by the Company or for
any losses incurred by the Company in such transaction. The Sales Representative
hereby authorizes Chubb Life Insurance Company of America, or applicable
subsidiary or affiliate, upon receipt of written demand by the Company, to pay
such monies to the Company to the extent of the Company's interest therein.
7. The Sales Representative shall be entitled to commissions with respect to all
sales the Sales Representative shall make in accordance with the Commission
Schedules issued from time to time by the Company and incorporated by reference
herein. Any commission will be paid by the Company to the Sales Representative's
District Manager, who will then pay the commission over to the Sales
Representative, unless the District Manager specifies in writing to the Company
that commissions shall be paid directly to the Sales Representative or as
otherwise required by law. All commissions are payable subject to receipt of
full payment for the securities sold and the Sales Representative hereby
expressly waives all rights to such earned commissions or other payments until
such time as the Company is in actual receipt of the concession due in respect
to such sale. Payments, if any, made to the Sales Representative or for the
Sales Representative's account in excess of commissions earned by the Sales
Representative in accordance with said Commission Schedules as amended or
supplemented shall be deemed advances against future commissions and the amount
of any such excess shall be refunded to the Company in the event of termination
of this Agreement, to the extent that such commissions have not been earned
prior to such termination. Any indebtedness from the Sales Representative to
the Company shall be a first lien upon any amount due the Sales Representative
hereunder.
8. If the Sales Representative's license with the National Association of
Securities Dealers, Inc. is terminated as a result of retirement, after
attaining the age of 55, or as a result of sustaining a total and permanent
disability, and if the Sales Representative agrees in the case of such
retirement or disability to the continuance of this Agreement and executes a
form agreeing not to solicit any new securities business or attempt to obtain
licensing with the National Association of Securities Dealers, Inc. through any
other entity, or if this Agreement is terminated as a result of the death of the
Sales Representative then, in any such case, the Company will continue to pay to
the Sales Representative, successors or assigns, all commissions totalling in
excess of $100 per annum, on business which was personally produced by the Sales
Representative, which would otherwise be due the Sales Representative under the
applicable Commissions Schedules, on all accounts which continue to be credited
to the Sales Representative as personal production pursuant to the New Customer
Account forms executed under this Agreement prior to such termination or death
and not resulting from any solicitation after termination, for a period not to
exceed five (5) years from the date of such termination or death. All vested
payments, as detailed above, shall relate solely to business of the Sales
Representative which remains credited to the Sales Representative pursuant to
New Customer Account forms executed prior to such termination or death and
which remain in force during the term of such vesting. The Company reserves the
right not to pay any commissions after termination if the Sales Representative
refuses to execute written acknowledgment of the continuance of this Agreement,
or if the Company receives proof of further securities solicitation or licensing
with the National Association of Securities Dealers, Inc. by the former Sales
Representative.
If this Agreement is terminated for any reason other than death, retirement or
permanent and total disability, then no commissions or other compensation shall
be paid; provided, however, that if this Agreement is terminated for any reason
other than the National Association of Securities Dealers, Inc.
disqualification, then commissions will continue to be paid in accordance with
the Supplemental Commission Schedule (or any replacement thereof) on all premium
payments received by the Company on variable life insurance products.
The Company will not pay commissions to any Sales Representative who is
disqualified from association with any member of the National Association of
Securities Dealers, Inc. because of revocation, expulsion, suspension, or any
other reason, nor will the Company pay commissions in violation of any
applicable laws or regulations.
9. The Company will, each month, furnish to the Sales Representative a statement
of the Sales Representative's account showing all earnings and payments made to
his/her account and the balance due from the Company and the amount of any
indebtedness due from the Sales Representative to the Company. The Sales
Representative agrees to notify the Company, in writing, within 30 days, of any
discrepancy or disagreement with such statement in any respect, and in the
absence of such notice, the statement shall be conclusively presumed to be
correct unless the parties mutually agree to an adjustment in writing.
10. The Company may offset against any commissions or other monies accruing to
the account of the Sales Representative any debts, liabilities, or other
obligations of the Sales Representative due to the Company or any affiliate of
the Company. The Company may also in its sole discretion offset against any
commissions or other monies accruing to the account of the Sales Representative
any debts or liabilities of the Sales Representative due to his/her District
Manager.
11. Should the Sales Representative transfer to a new District Manager's agency,
any override commissions shall then be paid to the new District Manager. Should
Form 3-0825 Ed. 12/89 Page 2
<PAGE>
the Sales Representative become a District Manager, the Sales Representative
shall then be entitled to both commissions and override commissions due under
the terms of this Agreement and the District Manager's Agreement.
12. The Sales Representative shall obtain and maintain for the term of this
Agreement errors and omissions insurance satisfactory to the Company, and shall
provide proof of such coverage to the Company.
13. With respect to any concession which the Company may receive as a residual
concession at the termination of a direct participation program, it being
understood that any such residual concession to the Company is contingent in
nature and there is no guarantee that the Company will ever actually receive
such payment, the Company will, upon receipt of such residual concession, pay
out a commission to the Sales Representative in accordance with the vesting
schedule as follows: (i) If the Sales Representative has been under agreement
with the Company for no less than one nor more than five years, then he/she
shall be vested to receive any residual concession three years or more after the
program sale is made;
(ii) If the Sales Representative has been under agreement with the Company for
no less than six nor more than ten years, he/she shall be vested to receive any
residual concession two years or more after the program sale is made; and
(iii) If the Sales Representative has been under agreement with the Company for
more than ten years, then he/she shall be vested to receive any residual
concession one year or more after the program sale is made;
provided, however, that the Sales Representative must continue to be under
agreement with the Company for the number of years set forth in applicable
portion of the above vesting schedule after a program sale is made. If the Sales
Representative does not remain under agreement for the applicable number of
years after a program sale is made, then no residual concession shall be paid.
The amount of the residual concession commission paid shall be as set forth in
the Commission Schedule in effect at the time of the payment.
Payment of a commission to the Sales Representative out of any residual
concessions received by the Company will be considered as any other commission
and all provisions of this Agreement which relate to commissions will also apply
to these commissions, specifically including but not limited to the terms of
paragraphs 8 and 9.
14. This Agreement may be terminated at any time by either party upon thirty
(30) days written notice to the other, and may be terminated immediately by the
Company for cause. Notice of such termination shall be deemed to be given on the
day mailed or delivered. If mailed to the Company, it shall be addressed to the
principal office of the Company at One Granite Place, Concord, New Hampshire and
if mailed to the Representative shall be addressed to their last known address
as shown on the records of the Company. If this Agreement is terminated for any
reason other than those set forth in Paragraph 8, above, then pay commissions
generated by the Sales Representative and not paid prior to the termination date
shall be paid to the Sales Representative's District Manager.
15. This Agreement is made in the State of New Hampshire and all questions
concerning its validity, construction or otherwise shall be determined under the
laws of New Hampshire.
IN WITNESS WHEREOF, the parties hereto have executed this agreement in
duplicate as of the date first written below.
CHUBB Securities Corporation District Manager ________________________
by: _____________________________ Date: _________________________
Date: ___________________________ Sales Representative: ___________________
Date: _________________________
Form 3-0825 Ed. 12/89 Page 3
<PAGE>
[LOGO OF CHUBB SECURITIES CORPORATION APPEARS HERE]
Chubb Securities Corporation
One Granite Place, P0 Box 2005
Concord, New Hampshire 03302
(603) 226-5000
CHUBB SECURITIES CORPORATION
COMMISSION SCHEDULE
This Commission Schedule is a part of the Sales Representative Agreement entered
into by the Sales Representative and the Company and is incorporated by
reference therein.
Commissions on sales made and concession received by the Company will be paid in
accordance with the Agreement and the following schedule:
____% of dealer concession for: (40% unless otherwise indicated and not to
exceed percentage paid to District Manager)
1. Mutual Fund Cash Sales.
2. Variable or Fixed Annuity and Mutual Fund Contractual Sales on first year and
subsequent payments.
3. Private Placements - as received for all staged-in payments. For the purposes
of computing commissions on private placements, the Company shall retain one-
third of any marketing or due diligence expense allowance (or other
terminology generally accepted to mean such a concept) paid on a per unit
basis in excess of 9%. and will pay commissions out of the balance.
4. General Securities Sales of any other type based on 80% of the dealer
concession generated from the general securities transactions, net of ticket
and administrative charges.
5. Public Limited Partnerships, Unit Investment Trusts.
Any other securities made available through the Company's facilities - in
accordance with Supplemental Commission Schedules.
This Commission Schedule rescinds and replaces all prior commission schedules
issued by the Company as of its effective date and will continue in effect until
such time as a new Schedule of Commissions may be established by the Company.
District/Branch Manager _______________________________________ Name
_______________________________________ Signature
Sales Representative _______________________________________ Name
_______________________________________ Signature
Date _______________________________________
Farm 3-0825 Ed. 1/93 Page. 4
<PAGE>
Exhibit 1(c)(v)
SCHEDULE OF COMMISSIONS
<PAGE>
SCHEDULE OF SALES COMMISSIONS
-----------------------------
Selling Broker-Dealers
----------------------
Commissions are 3% of all premiums paid.
Writing Agents of Chubb Securities Corporation
----------------------------------------------
Commissions are 2 % of all premiums paid.
---
District Mangers of Chubb Securities Corporation
------------------------------------------------
Commissions are 1 % of all premiums paid.
---
<PAGE>
Exhibit 1(e)(i)
SPECIMEN GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY AND CERTIFICATE
<PAGE>
[LOGO OF CHUBB LIFEAMERICA APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, Parsippany, N.J. 07054
Service Center: One Granite Place, P.O. Box 2086, Concord, New Hampshire 03302
(800) 997-4499
READ THIS POLICY CAREFULLY
In consideration of the application for this Group Policy made by the
Policyholder, as named herein, and the applications of persons insured hereunder
and the payment of premiums when due, The Colonial Life Insurance Company of
America agrees to pay, in accordance with and subject to the terms and
conditions of this Group Policy, the benefits herein set forth with respect to
each Certificate Owner.
The Colonial Life Insurance Company of America, a stock company, will pay a
Death Benefit, as described herein on Page 12, to the Beneficiary on our receipt
of due proof of an Insured's death while this Group Flexible Premium Variable
Life Insurance Policy was in force and coverage on such Insured was in effect.
This is a Group Flexible Premium Variable Life Insurance Policy. Specified
Amounts may be increased or decreased by each respective Certificate Owner. Net
premiums will be allocated to the General Account or to one or more divisions of
Colonial Separate Account D (herein called Separate Account D) as determined by
each respective Certificate Owner.
A CERTIFICATE'S ACCUMULATION VALUE IN EACH DIVISION OF SEPARATE ACCOUNT D IS
BASED ON THE INVESTMENT EXPERIENCE OF THAT DIVISION AND MAY INCREASE OR DECREASE
DAILY. ACCUMULATION VALUES ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
A Certificate's Accumulation Value in the General Account will earn interest
daily at a minimum guaranteed effective annual rate of 4%. Interest in excess of
the guaranteed rate may be applied in the calculation of Accumulation Values at
such increased rates as the The Colonial Life Insurance Company of Amercia may
determine. While 100% of a Certificate's Accumulation Value is allocated to the
General Account, minimum benefits for such Certificate will be fixed and
guaranteed.
THE AMOUNT OR DURATION OF A DEATH BENEFIT MAY BE VARIABLE OR FIXED UNDER THE
CONDITIONS SPECIFIED HEREIN AND MAY INCREASE OR DECREASE. A CERTIFICATE'S
MINIMUM DEATH BENEFIT WILL BE AT LEAST EQUAL TO ITS INITIAL SPECIFIED AMOUNT AT
ITS ISSUE DATE IF PREMIUMS ARE PAID AS DUE, AND IF THERE ARE NO OUTSTANDING
CERTIFICATE LOANS, PARTIAL WITHDRAWALS OR PARTIAL
SURRENDERS.
This Group Policy is a legal contract between the Policyholder and The Colonial
Life Insurance Company of America. The terms of all rights, benefits, and
options under this Group Policy are stated on this and the following pages.
Certificates issued under this Group Policy are not part of, nor do they modify
any provisions of this Group Policy.
/s/ John F. Swope /s/ Frederick H. Condon
President Secretary
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Policyholder: The Colonial Heritage Group Insurance Trust
Group Policy Number: VUL-l000
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Adjustable Death Benefits Payable On The Death Of An Insured.
Premium Payments May be Made At Any Time And, Within Limits, In Any Amount.
Specified Amounts May Be Increased Or Decreased And
Death Benefit Options May Be Changed.
Certificate Maturity Dates May Be Changed,
Subject To The Limitations Of This Group Policy.
Surrender Values, If Any, Payable On Certificate Maturity Dates.
Additional Benefits, If Any, As Indicated On Page 3.
Some Benefits Reflect Investment Results.
Non-participating - No Dividends.
Form 94-100NY Page i
<PAGE>
DEFINITIONS
The Terms or Definitions provided below are some of the terms used throughout
this Group Policy. There are other terms which are explained or defined on Page
5 and other parts of the text.
Certificate - The form used to describe a Certificate Owner's rights, benefits,
and options under this Group Policy. We will provide each Certificate Owner with
a Certificate which shows:
(1) The benefits for the named Insured;
(2) To whom the benefits are payable:
(3) Limits and other terms of this Group Policy as they pertain to the Insured;
and
(4) The location where this Group Policy may be seen.
A copy of the Certificate to be issued under this Group Policy, Form 94-101NY,
constitutes pages 1 - 25 of this Group Policy. A Certificate, when issued to any
Certificate Owner under this Group Policy, is not part of, nor does it modify
any provisions of this Group Policy.
Certificate Owner - The Owner of a Certificate as shown in the application for
such Certificate, unless later changed following a written request. A
Certificate Owner may be someone other than the Insured. Certificate Owners
possess all rights under this Group Policy with respect to their Certificates.
As used in the following pages, the terms "you" and "your" will refer to each
respective Certificate Owner; it does not refer to the Policyholder.
Group Policy - The Group Flexible Premium Variable Life Insurance Policy stated
herein. The terms of all rights, benefits, and options under this Group Policy
are contained on these pages.
This Group Policy consists of this and the face page, Form 94-100NY, and
attached pages 1 through 25, Form 94-101NY.
PROVISIONS
Listed below are some of the provisions to this Group Policy. All other
provisions are stated on the following pages. A "Guide to Provisions" appears on
Page 2.
Eligibility - Any person (natural or legal entity) who, at the time of
application, maintains a current account with, or whose account is currently
serviced by, a financial institution participating as a Member under this
contract may apply for insurance under this Group Policy, if:
(1) The attained age of the proposed Insured, at the time of application. has
not exceeded age 85; and
(2) The insurance is applied for on our forms and is accepted by us.
New Insureds - Unless stated otherwise, new Insureds may be added at any time to
this Group Policy, subject to the eligibility requirements and other terms of
this contract.
We do reserve the right to no longer accept any new Insureds under this Group
Policy as of a specified date.
Page ii
<PAGE>
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, Parsippany, N.J. 07054
Service Center: One Granite Place, P.O. Box 2086, Concord, New Hampshire 03302
(800) 997-4499
The Colonial Life Insurance Company of America, a stock company. hereby
certifies that the Insured named herein is insured under a Group Flexible
Premium Variable Life Insurance Policy issued to the Policyholder, as named on
Page 3. Subject to the terms of the Group Policy, we will pay the Death Benefit
specified on Page 12 to the Beneficiary on our receipt of due proof of the
Insured's death while the Group Policy was in force and coverage on the Insured
was in effect.
This is a Certificate of Group Flexible Premium Variable Life Insurance. The
Specified Amount may be increased or decreased by the Owner. Net Premiums will
be allocated to the General Account or to one or more divisions of Colonial
Separate Account D (herein called Separate Account D) as determined by the
Owner.
THE CERTIFICATE'S ACCUMULATION VALUE IN EACH DIVISION OF SEPARATE ACCOUNT D IS
BASED ON THE INVESTMENT EXPERIENCE OF THAT DIVISION AND MAY INCREASE OR DECREASE
DAILY. THE ACCUMULATION VALUE IS NOT GUARANTEED AS TO DOLLAR AMOUNT.
The certificate's Accumulation Value in the General Account will earn interest
daily at a minimum guaranteed effective annual rate of 4%. Interest in excess of
the guaranteed rate may be applied in the calculation of the Accumulation Value
at such increased rates as The Colonial Life Insurance Company of America may
determine. While 100% of the certificate's Accumulation Value is allocated to
the General Account, minimum benefits for the certificate will be fixed and
guaranteed.
THE AMOUNT OF DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY INCREASE OR
DECREASE UNDER THE CONDITIONS DESCRIBED HEREIN. THE CERTIFICATE'S MINIMUM DEATH
BENEFIT WILL BE AT LEAST EQUAL TO ITS INITIAL SPECIFIED AMOUNT ON ITS ISSUE DATE
IF PREMIUMS ARE PAID AS DUE, AND IF THERE ARE NO OUTSTANDING CERTIFICATE LOANS,
PARTIAL WITHDRAWALS OR PARTIAL SURRENDERS.
The Group Policy, under which this certificate is issued, is a legal contract
between the Policyholder and The Colonial Life Insurance Company of America.
This certificate describes the terms of your rights, benefits, and options under
the Group Policy. Your certificate is not part of, nor does it modify any
provisions of the Group Policy.
READ YOUR CERTIFICATE CAREFULLY
TWENTY DAY RIGHT TO CANCEL - Please examine this certificate carefully. You may
cancel this certificate by returning it to our Service Office or to the agent
through whom it was purchased within 20 days after the date you receive the
certificate or any longer period as may be required by the Securities and
Exchange Commission. If the certificate is returned, it will be deemed void from
the beginning and any premium paid for it will be refunded within 7 days.
/s/ John F. Swope /s/ Frederick H. Condon
President Secretary
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Insured:
Certificate Number:
CERTIFICATE OF GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Adjustable Death Benefit Payable On The Death Of The Insured.
Premium Payments May be Made At Any Time And, Within Limits, In Any Amount.
The Specified Amount May Be Increased Or Decreased And
Death Benefit Option May Be Changed.
The Maturity Date May Be Changed Subject To Limitations In The Certificate.
Surrender Value, If Any, Payable On Maturity Date.
Additional Benefits, If Any, As Indicated On Page 3.
Some Benefits Reflect Investment Results.
Non-participating - No Dividends.
Form 94-101NY ##########
<PAGE>
GUIDE TO PROVISIONS
<TABLE>
<CAPTION>
<S> <C>
Corridor Percentage Table................................. 3B
Data Page:
Age at Issue........................................... 3
Certificate Expense Charges............................ 3
Death Benefit Option................................... 3
Initial Specified Amount............................... 3
Maturity Date.......................................... 3
Owner.................................................. 3
Death Benefit:
Changes in Existing Coverage........................... 13
Death Benefit.......................................... 12
Definitions............................................... 5
General Provisions:
Annual Report.......................................... 10
Assignment............................................. 9
Changing the Beneficiary............................... 9
Illustration of Benefits and Values.................... 10
Incontestability....................................... 8
Misstatement of Age or Sex............................. 8
Non-Participating...................................... 10
Payment of Proceeds.................................... 9
Postponement of Payment................................ 10
Proceeds............................................... 9
Reserves............................................... 10
Suicide................................................ 8
Payment Options:
Death of Payee......................................... 24
Election of an Option.................................. 23
Interest............................................... 23
Limitation on Rights of Payee and Claims
of Creditors.................................... 24
Option A - Installments of a Specified Amount.......... 23
Option B - Installments for a Specified Period......... 23
Option C - Life Income................................. 23
Option D - Interest.................................... 23
Supplementary Contract................................. 23
Tables of Monthly Installments Under
Option B or C................................... 25
Withdrawal Value....................................... 23
Certificate Loans:
Certificate Loan Interest.............................. 22
Certificate Loan Repayment............................. 22
Certificate Loans...................................... 21
Types of Certificate Loans
(Type A and Type B)............................... 22
Certificate Values:
Accumulation Value..................................... 13
Basis of Computations.................................. 19
Cash Value............................................. 17
Continuation of Insurance.............................. 17
Cost of Insurance...................................... 16
Cost of Insurance Discounts............................ 17
Cost of Insurance Rates................................ 16
General Account Accumulation Value..................... 14
General Account Interest Rate.......................... 14
Insufficient Cash Value................................ 17
Minimum Values......................................... 19
Monthly Deduction...................................... 15
Net Investment Factor.................................. 15
Separate Account Accumulation Values................... 15
Surrender.............................................. 18
Surrender Charge....................................... 18
Withdrawal of Cash Value (Withdrawal).................. 18
Premiums:
Allocation of Net Premiums............................. 11
Certificate Lapse...................................... 12
Grace Period........................................... 12
Net Premium............................................ 11
Planned Periodic Premium and Premium
Frequency........................................ 11
Premium Payments....................................... 11
Reinstatement.......................................... 12
Unscheduled Premiums................................... 11
Separate Account Provisions:
Addition, Deletion, or Substitution of
Investments...................................... 21
Divisions.............................................. 20
Separate Account....................................... 19
Transfers.............................................. 20
Schedule of Surrender Charges............................. 3A
Table of Monthly Guaranteed Cost of Insurance
Rates............................................ 4
Contract Provisions:
Certificate Termination................................ 7
Change of Maturity Date................................ 7
Change or Modification................................. 6
Conversion............................................. 7
Effective Date of Coverage............................. 6
Entire Contract........................................ 6
Group Policy Termination............................... 6
Information Required................................... 6
Maturity Date.......................................... 7
Owner Death............................................ 7
Rights Under the Contract.............................. 6
The Group Policy is a Legal Contract................... 6
</TABLE>
A copy of the application will be found after page 24 of this certificate. Any
other benefit or agreements will also be found after page 24.
xx
Form xxxxx ##########
<PAGE>
(THIS PAGE TO BE RESPECTIVELY COMPLETED FOR EACH ISSUED CERTIFICATE)
POLICYHOLDER: THE COLONIAL HERITAGE GROUP INSURANCE TRUST
10 STATE STREET
ANYTOWN, NY 12345
GROUP POLICY NUMBER: VUL-1000
INSURED: XXXXXX XXXXXX MATURITY DATE: XX/XX/XXXX
CERTIFICATE OWNER: XXXXXX XXXXXX CERTIFICATE NUMBER: XXXXXXXX
ISSUE DATE: XX/XX/XXXX PREMIUM FREQUENCY: XXXXXXXX
CERTIFICATE DATE: XX/XX/XXXX DEATH BENEFIT: XXXXXX X
AGE AT ISSUE: XX XXXX CORRIDOR PERCENTAGE TABLE: XXXXXXXX
RATING CLASS: XXXXXXX
BENEFICIARY: XXXXXX XXXXXX
INITIAL PLANNED
MINIMUM PERIODIC
LIFE INSURANCE PREMIUM PREMIUM
$XX,XXX,XXX INITIAL SPECIFIED AMOUNT $XX,XXX.XX $XX,XXX.XX
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
IT IS POSSIBLE THAT COVERAGE WILL EXPIRE PRIOR TO THE MATURITY DATE CHOSEN
WHEN EITHER NO PREMIUMS ARE PAID FOLLOWING PAYMENT OF THE INITIAL PREMIUM OR
SUBSEQUENT PREMIUMS ARE INSUFFICIENT TO CONTINUE COVERAGE TO SUCH DATE. IF
CURRENT VALUES CHANGE, THIS WILL ALSO AFFECT COVERAGE.
THE CERTIFICATE'S ACCUMULATED VALUE IN THE GENERAL ACCOUNT WILL EARN INTEREST
DAILY AT A MINIMUM GUARANTEED EFFECTIVE ANNUAL RATE OF 4%. THE CERTIFICATE'S
ACCUMULATED VALUE HELD IN THE GENERAL ACCOUNT FOR CERTIFICATE LOAN COLLATERAL
WILL EARN INTEREST DAILY AT AN EFFECTIVE ANNUAL RATE OF 6%.
ALLOCATIONS OF NET PREMIUMS: XX.X% INTERNATIONAL EQUITY DIVISION
XX.X% SMALL COMPANY DIVISION
XX.X% EQUITY DIVISION
XX.X% BOND DIVISION
XX.X% TREASURY MONEY MARKET DIVISION
XX.X% GENERAL ACCOUNT
CERTIFICATE EXPENSE CHARGES:
(1) STATE TAX CHARGE: 2.0% OF EACH PREMIUM PAID.
(2) FEDERAL DEFERRED ACQUISITION COST (DAC TAX) CHARGE: 1.25% OF EACH
PREMIUM PAID.
(3) SALES CHARGE: 3.0% OF EACH PREMIUM PAID.
(4) COST OF INSURANCE AS DEFINED ON PAGE 13.
(5) MORTALITY AND EXPENSE RISK CHARGE AS DEFINED ON PAGE 13.
(6) SURRENDER CHARGE ON WITHDRAWAL OR SURRENDER AS DEFINED ON PAGE 15.
GUIDELINE SINGLE PREMIUM (BASED ON INITIAL SPECIFIED AMOUNT): $XX,XXX.XX
Page 3
<PAGE>
CERTIFICATE YEAR SURRENDER FACTOR
1 5%
2 4%
3 3%
4 2%
5 1%
6+ 0
SURRENDER CHARGE IS CALCULATED BY MULTIPLYING
THE APPROPRIATE SURRENDER FACTOR BY THE TOTAL
PREMIUMS PAID IN THE FIRST CERTIFICATE YEAR.
Page 3A
<PAGE>
(THIS PAGE TO BE RESPECTIVELY COMPLETED FOR EACH ISSUED CERTIFICATE)
CORRIDOR PERCENTAGE TABLE
<TABLE>
<CAPTION>
Certificate Corridor Certificate Corridor Certificate Corridor
Year Percentage Year Percentage Year Percentage
<S> <C> <C> <C> <C> <C>
XX XXX% XX XXX% XX XXX%
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
</TABLE>
Page 3B
<PAGE>
(THIS PAGE TO BE RESPECTIVELY COMPLETED FOR EACH ISSUED CERTIFICATE)
<TABLE>
<CAPTION>
TABLE OF MONTHLY GUARANTEED COST OF
INSURANCE RATES PER $1,000
CERTIFICATE NUMBER 000000
Certificate Monthly Certificate Monthly Certificate Monthly
Year Rate Year Rate Year Rate
<S> <C> <C> <C> <C> <C>
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
</TABLE>
Page 4
<PAGE>
DEFINITIONS
Terms or Definitions we identify or define here are some of the terms used
throughout the certificate. There are other terms which are explained or defined
in other parts of the text.
Accumulation Value - The Accumulation Value of the certificate is equal to the
total of the certificate's Accumulation Value in the General Account and the
certificate's Accumulation Value in divisions of Separate Account D.
Age - Refers to the age nearest birthday on the Certificate Date of the Insured.
Attained age of the Insured means the age nearest birthday on the last
certificate anniversary.
Beneficiary - The person named to receive the Death Benefit proceeds upon the
death of the Insured. The Beneficiary is as named in the application unless
later changed. There can be one or more Beneficiaries.
Cash Value - The Accumulation Value less any applicable Surrender Charge.
Certificate Date - The date as shown on Page 3, which is the date requested by
the Owner. If no date is requested, it shall be the Issue Date. The Certificate
Date is the date from which certificate years, certificate months, certificate
anniversaries and monthly anniversary days will be determined. If the
Certificate Date should fall on the 29th, 30th or 31st of a month, the
Certificate Date will be the 1st of the following month.
Certificate Year - The first certificate year is the twelve month period
following the Certificate Date. Each twelve month period thereafter makes up
the next certificate year.
Death Benefit - The amount payable on the death of the Insured while the
certificate is in force. It is explained in the Death Benefit section.
Debt - Means the principal of any loan outstanding against the certificate, plus
any accrued loan interest which has not been paid.
Initial Minimum Premium - The minimal first year premium amount due and payable
on the Certificate Date as shown on Page 3.
Insured - The person named as the Insured on Page 3. The Insured may be other
than the Owner.
Issue Date - This is the date the certificate is issued at the Service Office
and is stated on Page 3. The contestable and suicide periods are measured from
the Issue Date.
Member - Your financial institution whose customers are eligible to apply for
insurance under the Group Policy as a result of the Member's written application
to participate under the Group Policy.
Policyholder - The entity named on Page 3. The Group Policy is held by the
Policyholder; it may be inspected by you at any time during business hours at
the office of the Policyholder. The Policyholder possesses no rights under the
Group Policy.
Specified Amount - The face amount of the certificate as selected by the Owner.
This amount may increase or decrease subject to the terms of the certificate.
The Death Benefit is based on the Specified Amount as described in the Death
Benefit section.
Surrender Charge - A charge to the Accumulation Value in the event of surrender
or withdrawal. It is further explained in the Certificate Values section.
Surrender Value - The Cash Value less any debt.
We, Us, Our - The Colonial Life Insurance Company of America.
Withdrawal - A payment to you of some portion of the Cash Value accompanied by a
reduction to the Accumulation Value, Specified Amount, Surrender Charge, and
Death Benefit. It is explained in the Certificate Values section.
Written Request - A request in writing signed by you and received by us.
You, Your - The Owner of the certificate as shown in the application unless
later changed following written request; it does not refer to the Policyholder.
The Owner may be someone other than the Insured. As Owner, you possess all
rights under the Group Policy with respect to your certificate.
Page 5
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CONTRACT PROVISIONS
The Group Policy is a Legal Contract - The Group Policy is a legal contract that
the Policyholder has entered into with us. We promise to provide the insurance
benefits set forth in the Group Policy. In return, the Policyholder has
submitted a completed application. There will be no insurance coverage under
the Group Policy until we receive and approve an application for a person to be
insured under the Group Policy and the Initial Minimum Premium for such person
is paid.
Entire Contract - The entire contract consists of:
(1) the Group Policy, and any endorsements or riders (mandatory and/or optional)
attached to it.
(2) the application of the Policyholder, a copy of which is attached to the
Group Policy;
(3) the application of the Member;
(4) the separate applications for insurance of each person insured under the
Group Policy and any supplemental applications; and
(5) any amendments which are added to and made a part of the Group Policy.
Your certificate is not part of the Group Policy. Any conflict between the terms
of your certificate and the Group Policy will be decided in favor of the Group
Policy.
Rights Under The Group Policy - The Policyholder and the Member have no rights
under the Group Policy. As the Owner of this certificate, you have the sole
authority to exercise every contractual right, receive every benefit and enjoy
every privilege granted by the Group Policy with respect to your certificate.
Information Required - You, the Member and the Policyholder shall furnish all
information which we may reasonably require for the administration of the Group
Policy. We will not be liable for the fulfillment of any obligations until we
receive all information in a satisfactory form.
Change or Modification - Only one of our officers can change or modify the Group
Policy or waive any of our rights or requirements. Any such changes must be in
writing. No agent or other person has the authority to make any changes or waive
any terms of the Group Policy.
To the extent permitted by applicable laws and regulations, we may make changes
without your consent to the provisions of the Group Policy to comply with any
applicable federal or state laws including, but not limited to, requirements for
life insurance contracts under the Internal Revenue Code. You have the right to
refuse any such changes. However, we cannot accept responsibility for the tax
treatment of your coverage under the Group Policy. You should consult your tax
advisor regarding taxation under the Group Policy.
If the Group Policy is revised, you will be provided with either an amendment
for this certificate or a new revised certificate.
Group Policy Termination - The Group Policy will not terminate until the close
of business on the date upon which the performance and fulfillment by us of all
our duties and obligations thereunder have been completed.
Effective Date of Coverage - The effective date of coverage under this
certificate shall be as follows:
(1) For all coverage requested in the original application the coverage
begins on the Certificate Date, provided that the Initial Minimum Premium
has been paid, and the certificate has been delivered while there has been
no change since the date of the application in the health of the Insured or
the answers to the health questions contained in the application.
(2) For any increase or addition to coverage, the effective date shall be the
date shown on the Supplemental Certificate Specifications page. The
effective date for such coverage shall begin on the certificate monthly
anniversary day that coincides with or next follows the date the application
for the increase or addition is approved by us.
Page 6
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CONTRACT PROVISIONS (CONTINUED)
Maturity Date - The Maturity Date is shown on Page 3 and is the date when
coverage under this certificate is scheduled to end. If this certificate is in
force on the Maturity Date:
(1) all insurance benefits end; and
(2) the Surrender Value, if any, will be paid as you direct in a lump sum or
under a payment option.
The certificate may end prior to the Maturity Date if premium payments are
insufficient to continue coverage to such date. Details are provided in the
Certificate Lapse provision of the Premiums section, and also in the
Continuation of Insurance provision of the Certificate Values section.
Change of Maturity Date - The Maturity Date may be changed upon written request
by you. The new Maturity Date may be any certificate anniversary after the end
of the tenth certificate year, and on or before the Insured's l00th birthday.
However, the new Maturity Date must be at least twelve months from the date we
receive such written request from you.
Certificate Termination - This certificate terminates when any of the following
occur:
(1) you request the full surrender of this certificate;
(2) the death of the Insured;
(3) the Grace Period ends; or
(4) the certificate reaches its Maturity Date.
Conversion - If the Insured's coverage under the Group Policy ends for any
reason other than the non-payment of premiums, you may convert the insurance
under the Group Policy to an individual policy of life insurance without
evidence of insurability. You must apply for the individual policy and pay the
first premium within 31 days after coverage under the Group Policy ends. The new
policy will be non-participating and issued subject to the following:
(1) The policy will be on one of the forms we customarily issue at the time of
conversion, other than term;
(2) The policy will be issued at the amount and age applied for;
(3) The amount of the policy may not exceed the Specified Amount of the
certificate which ends; and
(4) The premium for the policy will be our usual rate. It will be based on the
amount of insurance, risk class, type of policy and age at the policy issue
date.
If the Insured dies during the time in which this certificate is entitled to be
converted, we will pay the Death Benefit which was in effect under the
certificate just prior to its termination. We will deduct any overdue monthly
deduction, which is applicable to the conversion period, from the proceeds of
the Insured's coverage. This will be done whether or not you actually applied
for the individual policy.
Any policy issued pursuant to this provision will take effect at the end of the
31-day period in which application must be made.
Owner Death - Upon death of the Owner, the Insured will assume ownership, unless
otherwise provided. If such ownership goes to joint owners, they will be joint
tenants with right of survivorship and not tenants in common.
Page 7
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GENERAL PROVISIONS
Incontestability - We rely on the statements made in the application for this
certificate and any supplemental applications. These statements are
considered representations and not warranties. No statement may be used in
defense of a claim under this certificate unless it is in an application.
We will not contest the coverage under this certificate, except for any increase
in the Specified Amount, after it has been in force during the lifetime of the
Insured for a period of two years from its Issue Date. This provision does not
apply to any benefits provided by a rider which grants disability benefits or an
added benefit in the event death results from an accident.
Any increase in the Specified Amount will not be contested after such increase
has been in force during the lifetime of the Insured for two years following the
effective date of such increase. Any increase will be contestable, within the
two year period, only with regard to statements concerning the increase.
If we cancel coverage for the Initial Specified Amount, we will refund to you
all premiums paid less any certificate loans and withdrawals paid out. If we
cancel coverage for an additional Specified Amount or Amounts only, we will
refund to you, the cost of insurance for the additional Specified Amount or
Amounts, charged for the applicable period.
If this certificate is reinstated, the incontestability period will start over
again beginning on the reinstatement date, but only for statements made in
the application for reinstatement.
The Group Policy, under which this certificate is issued, will not be contested.
Suicide - If the Insured commits suicide within two years from the Issue Date,
our only liability will be a refund of premiums paid without interest less any
certificate loans and withdrawals. If the Insured commits suicide after such
two year period, but within two years of the effective date of any increase in
the Specified Amount, our only liability with respect to the increase in the
Specified Amount will be a refund of the total cost of insurance for such
increase.
Misstatement of Age or Sex - If the Insured's age or sex has been misstated in
the application, we will adjust the proceeds to reflect the correct age or sex.
In such event, the Death Benefit we will pay will be equal to:
(1) The Accumulation Value on the date of death of the Insured less any
outstanding debt; plus
(2) The Death Benefit, less the Accumulation Value on the date of death of the
Insured, multiplied by the ratio of (a) the cost of insurance actually
deducted at the beginning of the certificate month in which death occurs, to
(b) the cost of insurance that should have been deducted based on the
correct age or sex.
If the Insured's age or sex has been misstated in the application, the amount
payable under any rider by reason of death of the Insured shall be that amount
of insurance which the rider cost, for the certificate month during which such
death occurred, would have purchased had the cost of the benefits provided under
the rider been calculated using the correct cost of insurance rates for the
correct age or sex.
If prior to the death of the Insured, it is found that the Insured's age or sex
has been misstated in the application for the certificate or a rider, the
certificate Accumulation Value will be recalculated from issue, using mortality
charges based on the correct age or sex.
Page 8
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GENERAL PROVISIONS (CONTINUED)
Assignment - While the Insured is alive you can:
(1) assign certificate ownership to someone else; or
(2) assign this certificate as security for an obligation. (This does not assign
ownership).
A signed copy of the assignment must be sent to our Service Office on a form we
accept. The assignment will go into effect when it is signed subject to any
payments we make or other actions we take before we record it. We are not
responsible for the validity of any assignment.
Changing the Beneficiary - You can change the Beneficiary at any time during the
lifetime of the Insured. To do so, send a written request to our Service
Office. The request must be on a form we accept. The change will go into effect
when signed subject to any payments we make or other actions we take before we
record the change. A change cancels all prior beneficiary designations.
Proceeds - By proceeds, we mean the amount payable:
(1) on the Maturity Date; or
(2) on the surrender of this certificate; or
(3) on the death of the Insured.
The proceeds on the Maturity Date, as well as on surrender, will be the
Surrender Value. The proceeds on the death of the Insured will be the Death
Benefit less any debt and less any monthly deductions due.
All proceeds are subject to the adjustments provided in the Incontestability,
Suicide, and Misstatement of Age or Sex provisions of this certificate and the
restrictions below.
Payment of Proceeds - Death Benefit proceeds or Surrender Value proceeds may be
paid in one sum or under our payment options. Before proceeds are paid, they
will be used to pay the interest of anyone to whom this certificate has been
assigned (see the Assignment provision). Loans and assignments will be paid in
one sum.
Unless an optional mode of settlement is elected, the proceeds payable on the
death of the Insured shall be paid in one sum to the Beneficiary. If there is
no Beneficiary at the time of the death of the Insured, we will pay the proceeds
to you or your estate.
Unless an optional mode of settlement is elected, any proceeds payable on the
Maturity Date or upon surrender of this certificate shall be paid in one sum to
you or your estate.
If the Death Benefit proceeds are not paid in one sum or applied under a payment
option, within 30 days after we receive due proof of the death of the Insured,
we will pay interest. Interest will be paid at the rate of 4% a year from
the date we receive such proof until paid. If New York state law requires
payment of a greater amount, we will pay that amount.
To the extent allowed by law, all payments under this certificate will be free
from creditor claims or legal process.
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GENERAL PROVISIONS (CONTINUED)
Postponement of Payment - We will usually pay any amounts payable on
surrender, withdrawal, or certificate loan, allocated to Separate Account D,
within seven days after written notice is received. We will usually pay any
Death Benefit proceeds, allocated to Separate Account D, within seven days after
we receive due proof of the death of the Insured. However, payment of any
amount payable on surrender, withdrawal, certificate loan, or any part of the
Death Benefit, attributable to Separate Account D, may be postponed whenever:
(1) The New York Stock Exchange is closed other than customary week-end and
holiday closings, or trading on the New York Stock Exchange is restricted as
determined by the Securities and Exchange Commission;
(2) The Securities and Exchange Commission, by order, permits postponement for
the protection of certificate owners; or
(3) An emergency exists as determined by the Securities and Exchange Commission,
as a result of which disposal of securities is not reasonably practicable or
it is not reasonably practicable to determine the value of the net assets of
Separate Account D.
Transfers may also be postponed under the above circumstances.
We may defer the portion of any transfer, amount payable on surrender,
withdrawal, or certificate loan from the General Account for not more than six
months. However, no payment from the General Account to pay premiums on
certificates with us will be deferred.
We may defer payment of any part of the Death Benefit attributed to funds in the
General Account for a period of not more than 60 days.
Annual Report - Following each December 31st, we will send you an annual report
which shows the current Accumulation Value, Cash Value, premiums paid, incurred
charges, withdrawals, any outstanding certificate loans, and any other
information required by the Superintendent of Insurance for the entire 12 months
of the previous calendar year. The first annual report forwarded to you will
only reflect those months of the previous calendar year during which this
certificate was in effect.
Illustration of Benefits and Values - We will provide illustrations of Death
Benefits, Accumulation Values and Cash Values at any time after the Certificate
Date upon your written request. This illustration will be based on the existing
Accumulation Value and Cash Value at the time of request and maximum cost of
insurance rates. Additional illustrations will be made based on the existing
Accumulation Value, Cash Value and current mortality assumptions.
Reserves - Reserves are the amount we hold to pay future benefits. They are not
less than the minimum required by New York state law. When required, we file
with the state regulatory authorities a statement showing how Reserves are
calculated.
Non-Participating -- The Group Policy is a non-participating contract,
which means the following:
(1) Premiums are determined and redetermined on a prospective basis only;
(2) We will not recoup any prior losses by means of a premium change; and
(3) You, the Member and the Policyholder are not entitled to participate in our
profits.
Page 10
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PREMIUMS
Premium Payments - An initial premium is due and payable on the Certificate
Date. The initial premium may not be less than the Initial Minimum Premium. All
premiums are payable in advance at our Service Office or to our authorized agent
in exchange for a receipt. This receipt must be signed by an elected officer of
the Company and countersigned by such agent. No premium payment may be less than
$500.00.
Planned Periodic Premium and Premium Frequency - The Planned Periodic Premium
and Premium Frequency, as shown on Page 3, are selected by you. The Planned
Periodic Premium is the amount of premium you intend to pay. The Premium
Frequency is how often you intend to pay the Planned Periodic Premium. Payment
of the Planned Periodic Premium is your option.
We will send you Planned Periodic Premium payment reminder notices. If the mode
of premium payment is preauthorized check, government allotment or payroll
deduction, notice of any Planned Periodic Premium due will not be sent.
Changes in Premium Frequency and increases or decreases in the Planned Periodic
Premium may be made by you by providing us with written notification. We reserve
the right to limit the amount of any increase. The total of all premiums paid
may never exceed the current maximum premium limitations set forth in Section
7702 of the Internal Revenue Code of 1986, as amended.
Payment of a Planned Periodic Premium may not prevent this certificate from
terminating. Failure to pay a Planned Periodic Premium will not, in itself,
cause this certificate to terminate. The certificate will terminate only if
the conditions occur as described in the Grace Period provision.
Net Premium - The Net Premium is equal to the premium paid multiplied by 93.75%.
The deduction of 6.25% is for Certificate Expense Charges (2.0% state tax
charge, plus 1.25% Federal Deferred Acquisition Cost tax charge, plus 3% sales
charge) as stated on Page 3.
We reserve the right to increase the state tax charge, stated above, if our
actual state tax expense incurred is greater than 2.0%. However, in no event
will this charge exceed 2.5%.
Allocation of Net Premiums - You will determine the allocation of the net
premiums among the General Account and the divisions of Separate Account D. The
minimum percentage that may be allocated to any of these accounts is 1%.
Unscheduled Premiums - Premium payments in addition to the Planned Periodic
Premium may be made at any time prior to the Maturity Date. We reserve the
right to limit the number and amount of unscheduled additional premium payments
to one each month per certificate year. The total of all premiums paid may
never exceed the current maximum premium limitations set forth in Section 7702
of the Internal Revenue Code of 1986, as amended.
If there is an existing certificate loan, premium payments in the amount of the
Planned Periodic Premium received at the Premium Frequency will be applied as
premium. Premium payments in excess of the Planned Periodic Premium or premium
payments received other than at the Premium Frequency will first be applied as
certificate loan repayments, then as premium when the certificate debt is
repaid.
Page 11
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PREMIUMS (CONTINUED)
Grace Period - We will allow a Grace Period of 61 days. Such Grace Period will
begin if the Cash Value less any certificate debt on a monthly anniversary day
is not enough to cover the monthly deduction for the month following such
monthly anniversary day. The Cash Value and monthly deduction are defined in the
Certificate Values section.
If the Insured dies during the Grace Period, we will deduct any overdue monthly
deduction, which is applicable to the Grace Period, from the proceeds of the
certificate.
Certificate Lapse - The certificate will terminate without value at the end of
the Grace Period unless a premium large enough, after the deduction of the
Certificate Expense Charges, to cover monthly deductions for at least three
months is paid by the end of the Grace Period. However, coverage will not end
until 31 days after we have mailed a premium notice to you, and any assignee of
record, at the last known address.
Reinstatement - Reinstatement is the restoration of the certificate after it has
lapsed. Following reinstatement, the certificate is placed back in force as if
it had never lapsed.
If this certificate lapses or terminates as provided in the Grace Period
provision, we will reinstate the certificate if we receive:
(1) your written request for reinstatement within five years after the end of
the Grace Period and before the Maturity Date;
(2) satisfactory proof the Insured is living and insurable at the original
rating class;
(3) payment of a premium large enough, after the deduction of the Certificate
Expense Charges, to cover monthly deductions for at least three certificate
months following the effective date of reinstatement; and
(4) payment or reinstatement of any debt against the certificate which existed
on the date of termination.
The effective date of a reinstated certificate or Reinstatement Date is the date
we approve the application for reinstatement. The Accumulation Value of the
certificate on the Reinstatement Date shall be the Accumulation Value on the
date of termination plus the premium received to reinstate the certificate. Any
Surrender Charges in effect on reinstatement shall be as defined in the
Surrender Charge provision based on the original Certificate Date and duration.
DEATH BENEFIT
Death Benefit - If the Insured dies while this certificate is in force, we will
pay the Death Benefit upon receipt of due proof of the death of the Insured. The
Death Benefit is also subject to all other terms and conditions of this
certificate.
The Death Benefit provided by this certificate depends on the Death Benefit
Option in effect on the date of death. The Death Benefit Option for this
certificate is shown on Page 3.
Option I - Under Option I, the Death Benefit shall be the greater of:
(1) The Specified Amount; or
(2) The Accumulation Value on the date of death multiplied by the corridor
percentage.
Option II - Under Option II, the Death Benefit shall be equal to the Specified
Amount plus the Accumulation Value on the date of death. However, the Death
Benefit can never be less than the Accumulation Value on the date of death
multiplied by the corridor percentage.
The corridor percentage varies by certificate duration and is indicated in the
Corridor Percentage Table as shown on Page 3B.
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<PAGE>
DEATH BENEFIT (CONTINUED)
Changes in Existing Coverage - The Initial Specified Amount is shown on Page 3.
At any time after the first certificate anniversary, you may, by written
request, increase or decrease the Specified Amount. Any change is subject to
the following conditions:
(i) Any decrease will become effective on the monthly anniversary day that
coincides with or next follows our receipt of the request. At least twelve
months must elapse between decreases. Any such decrease will be deducted in
the following order:
(a) from the most recent Specified Amount increase, if any;
(b) successively from the next most recent Specified Amount increase, if
any;
(c) from the Initial Specified Amount.
(2) Any request for an increase must be applied for on a supplemental
application and shall be subject to evidence satisfactory to us that the
Insured is living and insurable. At least twelve months must elapse
between requested increases.
(3) Any change approved by us will become effective on the effective date shown
in the Supplemental Certificate Data Page, subject to deduction of the
first month's cost of insurance from the Accumulation Value of this
certificate.
(4) The minimum Specified Amount, after a change, which must be in effect at any
time is $250,000.
(5) Any increase or decrease in the Specified Amount must be for at least
$250,000.
(6) You may request in writing to change the Death Benefit Option. If your
request is to change from Option I to Option II, the Specified Amount will
be decreased by the amount of the Accumulation Value. Evidence of
insurability satisfactory to us will be required on a change from Option I
to Option II. If the request is to change from Option II to Option I, the
Specified Amount will be increased by the amount of Accumulation Value. The
effective date of change shall be the monthly anniversary day that coincides
with or next follows the day the request for change is received.
(7) An increase for insurance cannot be requested after the Insured reaches an
attained age of 80.
CERTIFICATE VALUES
Accumulation Value - The Accumulation Value of the certificate is equal to the
total of the certificate's Accumulation Value in the General Account and the
certificate's Accumulation Value in divisions of Separate Account D.
Page 13
<PAGE>
CERTIFICATE VALUES (CONTINUED)
General Account Accumulation Value - The Accumulation Value in the General
Account on the Certificate Date is equal to the portion of the net premium which
has been paid and allocated to the General Account, less the portion of the
first monthly deduction allocated to the General Account.
On each monthly anniversary day, the Accumulation Value in the General Account
is equal to (1) plus (2) plus (3) plus (4) minus (5) minus (6) minus (7) where:
(1) is the Accumulation Value in the General Account on the preceding monthly
anniversary day.
(2) is one month's interest on item (1).
(3) is any net premium received since the preceding monthly anniversary day plus
interest from the date the net premium is received to the monthly
anniversary day.
(4) is the sum of all Accumulation Values transferred to the General Account
from a division of Separate Account D since the preceding monthly
anniversary day and interest from the date the Accumulation Value is
transferred to the monthly anniversary day.
(5) is the sum of all Accumulation Values transferred from the General Account
to a division of Separate Account D since the preceding monthly anniversary
day and interest from the date the Accumulation Value is transferred to the
monthly anniversary day.
(6) is all withdrawals from the General Account since the preceding monthly
anniversary day plus interest from the date of the withdrawal to the monthly
anniversary day.
(7) is the portion of the monthly deduction allocated to the Accumulation Value
in the General Account to cover the certificate month following the monthly
anniversary day.
On any date other than a monthly anniversary day, the Accumulation Value will be
calculated on a consistent basis.
General Account Interest Rate - The certificate's Accumulation Value in the
General Account will earn interest daily at a minimum guaranteed effective
annual rate of 4%. Interest in excess of the guaranteed rate may be applied in
the calculation of the Accumulation Value at such increased rates as we may
determine. Interest rates will be established by class of Insureds based on
future expectations and on rules and standards on file with the New York
Insurance Department. The current interest rate reflects the prevailing average
rate on the current portfolio and rates obtained on new investments, adjusted
for contingencies and expenses. The certificate's Accumulation Value held in
the General Account for policy loan collateral will earn interest daily at an
effective annual rate of 6%.
Page 14
<PAGE>
CERTIFICATE VALUES (CONTINUED)
Separate Account Accumulation Values - The Accumulation Value in each
division on the Certificate Date is equal to the portion of the net premium
which has been paid and allocated to that division, less the portion of the
first monthly deduction allocated to the certificate's Accumulation Value in
that division.
At the end of each valuation period after the Certificate Date, the
certificate's Accumulation Value in a division is equal to (1) plus (2) plus (3)
minus (4) minus (5) where:
(1) is the Accumulation Value in the division on the preceding valuation date
multiplied by the Net Investment Factor for the current valuation period.
(2) is any net premium received during the current valuation period which is
allocated to the division.
(3) is all Accumulation Values transferred to the division from another division
or the General Account during the current valuation period.
(4) is all Accumulation Values transferred from the division to another division
or the General Account and Accumulation Values transferred to secure a
certificate debt during the current valuation period.
(5) is all withdrawals from the division during the current valuation period.
In addition, whenever a valuation period includes the monthly anniversary day,
the Accumulation Value at the end of such period is reduced by the portion of
the monthly deduction allocated to the division.
Net Investment Factor - The Net Investment Factor measures the investment
performance of a division during a valuation period. The Net Investment Factor
for each division for a valuation period is calculated as (1) divided by (2),
minus (3) where:
(1) is (a) the value of the assets in the division at the end of the preceding
valuation period, plus (b) the investment income and capital gains, realized
or unrealized, credited to the assets in the valuation period for which the
Net Investment Factor is being determined, minus (c) the capital losses,
realized or unrealized, charged against those assets during the valuation
period, minus (d) any amount charged against each division for taxes, or any
amount we set aside during the valuation period as a reserve for taxes
attributable to the operation or maintenance of each division.
(2) is the value of the assets in the division at the end of the preceding
valuation period.
(3) is a charge not to exceed .00178083% for each day in the valuation period.
This corresponds to .65% per year for mortality and expense risks.
An investment advisory fee is considered in calculating item (1).
Expense and mortality results of this plan shall not adversely affect the Net
Investment Factor to be used in computing the dollar amount of variable benefits
or other contractual payments or values of this certificate.
Monthly Deduction - The monthly deduction for a certificate month shall be equal
to the cost of insurance (as described below) and the cost of additional
benefits provided by rider for the certificate month.
The monthly deduction for a certificate month will be allocated among the
General Account and the divisions of Separate Account D in the same proportion
that the Accumulation Value in the General Account less any debt and the
Accumulation Value in each division bears to the total Accumulation Value of the
certificate, less any debt, at the beginning of the certificate month.
Page 15
<PAGE>
CERTIFICATE VALUES (CONTINUED)
Cost of Insurance - The cost of insurance for the Insured is determined on a
monthly basis. The cost of insurance is determined separately for the Initial
Specified Amount and each subsequent increase in Specified Amount. The cost of
insurance is calculated as (1), multiplied by the result of (2) minus (3),
where:
(1) is the cost of insurance rate as described in the Cost of Insurance Rates
provision.
(2) is the Death Benefit at the beginning of the certificate month, divided by
1.00327374.
(3) is the Accumulation Value at the beginning of the certificate month, prior
to the monthly deduction for the cost of insurance.
If the Death Benefit Option is Option I and there have been increases in the
Specified Amount then the Accumulation Value shall be first considered a part of
the Initial Specified Amount. If the Accumulation Value exceeds the Initial
Specified Amount, it shall then be considered a part of the additional Specified
Amounts resulting from increases in the order of such increases.
Cost of Insurance Rates - The monthly cost of insurance rate is based on the
sex, issue age, certificate year, rating class of the Insured, and Specified
Amount. Monthly cost of insurance rates will be determined by us based upon
future expectations, including charges for mortality experience, amortization of
sales charges and other administrative charges, and on rules and standards on
file with the New York Insurance Department.
Changes in the monthly cost of insurance rates will be based upon changes in
future expectations as to investment earnings, mortality experience,
persistency, expenses, and on rules and standards on file with the New York
Insurance Department. Any change in cost of insurance rates will apply to all
individuals of the same class as the Insured. The rating class will be
determined separately for the Initial Specified Amount and for any increase in
Specified Amount that requires evidence of insurability.
We will consider changes in the cost of insurance rates at least every five
years and when cost of insurance rates for new issues change. However, the cost
of insurance rates can never be greater than those shown in the Table of Monthly
Guaranteed Cost of Insurance Rates on Page 4.
For attained ages 15 and above, such guaranteed maximum rates are based on the
1980 CSO Male or Female, Smoker or Nonsmoker Mortality Tables with appropriate
increases for rated risks. For attained ages 14 and below, such guaranteed
maximum rates are based on the 1980 CSO Male or Female Mortality Tables with
appropriate increases for rated risks.
PAGE 16
<PAGE>
CERTIFICATE VALUES (CONTINUED)
Cost of Insurance Discounts - There will be a non-guaranteed cost of insurance
discount that will be calculated at the beginning of each certificate year. The
discount will be a monthly amount that is subtracted from the monthly cost of
insurance charge that is normally calculated. This discount may be suspended at
any time. You will be notified if the discount is suspended. The discount is
calculated as (1) multiplied by the result of (2) minus (3) minus (4), but not
less than zero, where:
(1) is a factor that varies by Specified Amount as follows:
<TABLE>
<CAPTION>
Specified Amount Factor
<S> <C>
Under $5 Million .0001250
$5 Million - $9.999 Million .0002500
$10 Million - $14.999 Million .0003750
Over $15 Million .0004583
</TABLE>
(2) is the Accumulation Value at the beginning of the certificate year.
(3) is the Guideline Single Premium at issue, under Section 7702 of the Internal
Revenue Code of 1986, as amended, entitled "Life Insurance Contract
Defined", increased on a pro rata basis for any increase in Specified
Amount.
(4) is the outstanding Type A loan balance at the beginning of the certificate
year.The discount will be allocated among the General Account and divisions
of Separate Account D using the same percentages used to allocate net
premiums.
Cash Value - The Cash Value is equal to the Accumulation Value less a Surrender
Charge.
Continuation of Insurance - In the event Planned Periodic Premium payments are
not continued or if there are changes of Death Benefit Options, mortality
deductions, deductions for additional benefit riders, withdrawals, or
certificate loans, as well as varying investment results, insurance coverage
under this certificate and any benefits provided by rider will be continued
until the Cash Value, less any debt, is insufficient to cover the monthly
deduction, as provided in the Grace Period provision. This provision shall not
continue the certificate beyond the Maturity Date nor continue any rider beyond
the date of its termination, as provided in the rider. If the Cash Value is
sufficient to continue this certificate to the Maturity Date, then any remaining
Surrender Value will be paid to you if the Insured is then living.
Insufficient Cash Value - If the Cash Value less any debt on a monthly
anniversary day is insufficient to cover the monthly deduction for the month
following such monthly anniversary day, the certificate shall terminate as
provided in the Grace Period provision. Any deduction for the cost of insurance
after termination of insurance shall not be considered a reinstatement of the
certificate nor a waiver by us of the termination. Any such deduction shall be
credited to the Cash Value as of the date of the deduction.
Page 17
<PAGE>
CERTIFICATE VALUES (CONTINUED)
Withdrawal of Cash Value (Withdrawal) - Upon written request you may make a
withdrawal from this certificate. Any withdrawal is subject to the following
conditions:
(1) The amount withdrawn may not exceed the Cash Value less any outstanding
debt.
(2) The minimum amount that may be withdrawn is
$5000.
(3) A charge equal to $100 will be deducted from the amount of each withdrawal.
(4) The Accumulation Value will be reduced by the sum of the withdrawal and a
pro rata portion of the Surrender Charge in effect on the date of the
withdrawal. The remaining Accumulation Value and schedule of surrender
charges will be determined by multiplying each of these values by a
numerical factor. This numerical factor is equal to
Amount of Withdrawal
1 - [----------------------------------------]
Cash Value Immediately Before Withdrawal
(5) The Death Benefit will be reduced by an amount equal to the reduction in the
Accumulation Value. This will result in a reduction of the Specified Amount
if the Death Benefit is Option I by an amount equal to the reduction in the
Accumulation Value. The Specified Amount remaining in force after any
withdrawal must be at least $250,000. You may allocate the withdrawal among
the General Account and the divisions of Separate Account D. If you do not
specify the allocation, then the withdrawal will be allocated among the
General Account and the divisions of Separate Account D in the same
proportion that the Accumulation Value in the General Account, less any
debt, and the Accumulation Value in each division bears to the total
Accumulation Value of the certificate, less any debt, on the date of the
withdrawal.
Surrender - Upon written request you may surrender this certificate at any time
during the lifetime of the Insured and before the Maturity Date. The amount
payable on surrender of this certificate shall be the Surrender Value. If this
certificate is surrendered, all insurance in force under this certificate shall
terminate on the monthly anniversary day next following our receipt of the
surrender request. We reserve the right to defer payment for the period
permitted by law, but not more than six months from the date written request for
surrender is received by us.
If surrender is requested under this section within 30 days after a certificate
anniversary, the Cash Value shall not be less than the Cash Value on that
anniversary, less any certificate loans or withdrawals made on or after such
anniversary.
Surrender Charge - The Surrender Charge is calculated by multiplying the
surrender factor by the total premiums paid in the first certificate year.
The surrender factor will vary by certificate year according to the table shown
on Page 3A. The surrender factor will not be altered by lapse and subsequent
reinstatement of the certificate.
Page 18
<PAGE>
CERTIFICATE VALUES (CONTINUED)
Basis of Computations - For attained ages 15 and above, minimum Cash Values and
Reserves in the General Account are based on the 1980 CSO Male or Female, Smoker
or Nonsmoker Mortality Tables with interest at 4% per year. For attained ages
14 and below, minimum Cash Values and Reserves in the General Account are based
on the 1980 CSO Male or Female Mortality Tables with interest at 4% per year.
The method used in computing Cash Values and Reserves in Separate Account D is
in accordance with actuarial procedures that recognize the variable nature of
Separate Account D. The method used is such that if the Net Investment Factor,
less one, for all divisions of Separate Account D, at all times from the
Certificate Date, is equal to an effective annual interest rate of 4%, then the
Cash Values and Reserves in Separate Account D will be at least equal to the
minimum Cash Values and Reserves, which would have been required by New York
state law, of an equivalent certificate in which all net premiums have been
allocated to the General Account.
Minimum Values - All values under this certificate are not less than the values
required by New York state law. A detailed statement of the method of
computation of Cash Values under this certificate has been filed with the New
York Insurance Department.
SEPARATE ACCOUNT PROVISIONS
Separate Account - The variable benefits under this certificate are provided
through investments in Separate Account D. We established Separate Account D
as a separate investment account to support variable life insurance contracts.
We will not allocate assets to Separate Account D to support the operation of
any contracts or certificates that are not variable life insurance.
The assets of Separate Account D are owned by us. However, these assets are not
part of our General Account. Income, gains and losses, whether or not realized,
from assets allocated to Separate Account D will be credited to or charged
against the account without regard to our other income, gains or losses.
Assets equal to the reserves and other liabilities of Separate Account D will
not be charged with liabilities that arise from any other business we may
conduct. Such assets shall not be available to general creditors of ours in the
event of our insolvency to the full extent permitted by applicable law. We shall
have the right to transfer to our General Account any assets of Separate Account
D which are in excess of such reserves and other certificate liabilities.
Separate Account D is registered with the Securities and Exchange Commission as
a unit investment trust under the Investment Company Act of 1940. Separate
Account D is also subject to the laws of the State of New Jersey which regulate
the operations of insurance companies incorporated in New Jersey. The
investment policy of Separate Account D will not be changed without the approval
of the Insurance Commissioner of New Jersey. The approval process is on file
with the New York Insurance Department.
Page 19
<PAGE>
SEPARATE ACCOUNT PROVISIONS (CONTINUED)
Divisions - Separate Account D has several divisions. Each division will buy
shares of a separate series of Chubb Series Trust. Each series represents a
separate investment portfolio of Chubb Series Trust. Divisions of Separate
Account D are shown on Page 3. You will determine the percentage of net
premiums which will be allocated to each division.
Income, gains and losses, whether or not realized, from the assets of Separate
Account D are credited to or charged against that division without regard to
income, gains or losses in other divisions of Separate Account D or in the
General Account.
We will value the assets of each division of Separate Account D at the end of
each valuation period. A valuation period is the period between two successive
valuation dates. A valuation date is each day that the New York Stock Exchange
is open for business or any other day in which there is material change in the
value of the assets in Separate Account D.
Transfers - You may transfer amounts between the General Account and the
divisions of Separate Account D by sending a written request to us. The total
amount transferred must be at least $1,000. No amounts under $1,000 may be
transferred out of any division of Separate Account D or the General Account
unless such lesser amount constitutes the entire balance. A transfer charge
equal to $100 will be imposed each time amounts are transferred, except with
respect to certificate loans. The transfer charge will be deducted from the
amount that is transferred. We will make transfers so that the Accumulation
Value on the date of transfer will not be affected by the transfer except to the
extent of the transfer charge. We may revoke or modify the transfer privilege at
any time, including the minimum amount transferable and the transfer charge.
As long as any portion of the certificate's Accumulation Value is allocated
to a division of Separate Account D, the certificate's Accumulation Value and
Cash Value will reflect the investment performance of the chosen division(s) of
Separate Account D. The Death Benefit may also reflect the performance of the
chosen division(s) of Separate Account D.
At any time, you may transfer 100% of the certificate's Accumulation Value to
the General Account. While 100% of the certificate's Accumulation Value is
allocated to the General Account, minimum benefits for the certificate will be
fixed and guaranteed.
No transfer charge will be imposed for a transfer of all Accumulation Value in
Separate Account D to the General Account. However, any transfer from the
General Account to the division(s) of Separate Account D will be subject to the
transfer charge.
Page 20
<PAGE>
SEPARATE ACCOUNT PROVISIONS (CONTINUED)
Addition, Deletion, or Substitution of Investments - We reserve the right,
subject to compliance with applicable law, to make additions to, deletions
from, or substitutions for the shares of a series that are held by Separate
Account D or that Separate Account D may purchase. We reserve the right to
eliminate the shares of any series of Chubb Series Trust and to substitute
shares of another series of Chubb Series Trust or of another open-end,
registered investment company, if the shares or series are no longer available
for investment or if in our judgement, further investment in any eligible series
should become inappropriate in view of the purposes of the certificate. We will
not substitute any shares attributable to your interest in a division of
Separate Account D without notice to you and prior approval of the Securities
and Exchange Commission, to the extent required by the Investment Company Act of
1940. This shall not prevent Separate Account D from purchasing other
securities for other series or classes of certificates, or from permitting
conversation between series or classes of certificates or contracts on the
basis of requests made by certificate owners.
We reserve the right to establish additional divisions of Separate Account D,
each of which would invest in a new series of Chubb Series Trust or in shares of
another open-end, registered investment company. We also reserve the right to
eliminate existing divisions of Separate Account D.
If we consider it to be in the best interest of persons having voting
privileges under the certificates, Separate Account D may be operated
as a management company under the Investment Company Act of 1940; or it may be
deregistered under that Act in the event registration is no longer required or
it may be combined with other separate accounts.
CERTIFICATE LOANS
Certificate Loans - After the first certificate anniversary, a loan will
be granted upon the sole security of the portion of the certificate's Cash Value
required to repay the loan. The maximum loan amount is 90% of this certificate's
Cash Value on the date of loan, less any debt. Outstanding debts against this
certificate will be deducted from the amount available for loan. Any debt will
be deducted from the proceeds payable at the Insured's death, on maturity, or on
surrender.
You may allocate the certificate loan among the General Account and the
divisions of Separate Account D. If you do not specify the allocation, then the
certificate loan will be allocated among the General Account and the divisions
of Separate Account D in the same proportion that the Accumulation Value
in the General Account, less any debt, and the Accumulation Value in each
division bears to the total Accumulation Value of the certificate, less any
debt, on the date of the certificate loan. Accumulation Value in each division
equal to the certificate loan allocated to each division will be transferred to
the General Account and reduce the Accumulation Value in that division. If loan
interest is not paid when due, an amount of Accumulation Value equal to the loan
interest will also be transferred.
If the certificate debt exceeds the certificate's Accumulation Value in the
General Account, we will transfer Accumulation Value equal to the excess debt
from the divisions of Separate Account D to the General Account as security for
the excess debt. The amount transferred will be allocated among the divisions in
the same proportion that the Accumulation Value in each division bears to the
certificate's total Accumulation Value in all divisions of Separate Account D.
Page 21
<PAGE>
CERTIFICATE LOANS (CONTINUED)
Types of Certificate Loans (Type A and Type B) - There are two (2) types of
certificate loans which we will grant to you - Type A and Type B. The type of
loan which we will grant depends upon the amount of unloaned Type A balance
available at the time the loan is taken. The unloaned Type A balance is the Cash
Value, less the threshold, and less the sum of any outstanding Type A loans as
defined below. The threshold is the Guideline Single Premium for this
certificate at issue as defined in Section 7702 of the Internal Revenue Code of
1986, as amended, entitled "Life Insurance Contract Defined". If the Specified
Amount increases, the threshold will be increased to the threshold at issue
times the ratio of the largest Specified Amount ever existing on the certificate
to the Initial Specified Amount. If the Specified Amount decreases, the
threshold will not change.
A Type A loan is a certificate loan granted by us when the unloaned Type A
balance before the loan is taken exceeds the loan requested.
A Type B loan is a certificate loan granted by us when the unloaned Type A
balance before the loan is taken is less than or equal to zero.
When the unloaned Type A balance before the loan is taken exceeds zero, but is
less than the loan requested, a Type A loan equal to the unloaned Type A balance
will be granted by us. The remainder of the requested loan will be a Type B
loan.
We will grant a Type A loan first before a Type B loan. Once a certificate loan
is granted, it remains a Type A or a Type B until it is repaid.
Certificate Loan Interest - The interest charged by us on a certificate loan
depends upon the type of loan granted.
On a Type A loan we will charge interest at an effective annual rate of 6.0%.
On a Type B loan we will charge interest at an effective annual rate of 6.85%.
Interest accrues on a daily basis from the date of the loan and is compounded
annually. Interest is due and payable at the end of each certificate year.
Interest unpaid on a certificate anniversary is added to and becomes part of the
loan principal and bears interest on the same rate.
Certificate Loan Repayment - Any debt may be repaid, in whole or in part, at any
time while this certificate is in force. Repayments will be used to reduce
certificate loans until fully paid in the following order:
(1) Any or all Type B loans; then
(2) Any or all Type A loans.
When a loan repayment is made, Accumulation Value securing the debt in the
General Account equal to the loan repayment will be allocated among the General
Account and divisions of Separate Account D using the same percentages used to
allocate net premiums.
If total certificate debt exceeds the Cash Value at any time, we will send a
notice by mail to you, and to any assignee of record, at the last known address.
If the excess is not paid within 61 days from the date the notice is mailed, the
certificate will terminate without value.
Page 22
<PAGE>
PAYMENT OPTIONS
Election of an Option - Any proceeds to be paid under this certificate may be
paid as an income under any one of the options below. The election of an option
or change of prior election must be made in writing to us at our Service Office.
If an option is not chosen by you prior to the death of the Insured, the primary
Beneficiary may make such election.
Unless we agree otherwise, any such payments will be made only to a natural
person taking in his own right. An option may be elected only if the amount of
the proceeds is $2,000 or more. We may change the interval of payments to 3, 6,
or 12 months, if necessary to increase the guaranteed payments to at least
$20.00 each.
Option A - Installments of a Specified Amount - Payments of an agreed amount to
be made each month until the proceeds and interest are exhausted.
Option B - Installments for a Specified Period - Payments to be made each month
for an agreed number of years.
Option C - Life Income - Payments to be made each month for the lifetime of the
Payee. It is guaranteed that payments will be made for a minimum of 10, 15, or
20 years as agreed upon. No election will default to payments made for 20 years.
Option D - Interest - Payment of interest on the proceeds held by us. The amount
of interest payment is calculated at the compound rate of 3% per year. Interest
payments will be made in 12-, 6-, 3-, or 1-month intervals as agreed upon.
Supplementary Contract - When the proceeds of this certificate become payable, a
supplementary contract setting forth the terms of the option chosen will be
issued to the Payee. The first payment under Option A, B, or C shall be payable
on the effective date of such option. The first payment under Option D shall be
payable at the end of the first agreed payment interval.
Interest - The interest rate for Options A, B, and D will not be less than 3%
per year. The interest rate for Option C will not be less than 2 1/2% per year.
Interest in addition to that stated may be paid or credited from time to time
under any option but only at our sole discretion.
Withdrawal Value - Unless otherwise stated in the election of an option, the
Payee shall have the right to receive the Withdrawal Value under that option.
For Options A and D the Withdrawal Value shall be any unpaid balance of proceeds
plus interest.
For Option B the Withdrawal Value shall be the commuted value of the remaining
payments. Such value will be calculated on the same basis as the original
payments.
For Option C the Withdrawal Value shall be the commuted value of the remaining
payments. Such value will be calculated on the same basis as the original
payments. To receive this value, the Payee must submit evidence of insurability.
Such evidence must be satisfactory to us. Otherwise, the Withdrawal Value shall
be the commuted value of any remaining guaranteed payments. In this event the
payments will be resumed at the end of the guaranteed period if the Payee should
be alive on that date. The payments will then continue for the lifetime of the
Payee.
Under any of these options, the Payee shall have the right to receive the
Withdrawal Value in partial amounts. However, the partial amounts shall not be
less than the smaller of the Withdrawal Value or $100.
Page 23
<PAGE>
PAYMENT OPTIONS (CONTINUED)
Death of Payee - If the Payee dies before the proceeds are exhausted or the
prescribed payments made, a final payment will be made in one sum to the estate
of the last surviving Payee. The amount to be paid will be calculated as
described for the applicable option in the Withdrawal Value provision.
Limitation on Rights of Payee and Claims of Creditors
- - Neither the amount retained under an option nor any payment made under an
option can be assigned or pledged. To the extent permitted by law such amounts
or payments shall not be subject to claims of creditors or legal process.
Page 24
<PAGE>
SETTLEMENT OPTIONS
TABLES OF MONTHLY INSTALLMENTS UNDER OPTION B OR C
Monthly installments are shown for each $1,000 of net proceeds applied. The ages
shown are ages nearest birthday when the first monthly installment is payable.
OPTION B TABLE
INSTALLMENTS FOR A SPECIFIED PERIOD
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Years Monthly Years Monthly Years Monthly Years Monthly Years Monthly
Installment Installment Installment Installment Installment
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.47 7 $13.16 13 $7.71 19 $5.73 25 $4.71
2 42.86 8 11.68 14 7.26 20 5.51 26 4.59
3 28.99 9 10.53 15 6.87 21 5.32 27 4.48
4 22.05 10 9.61 16 6.53 22 5.15 28 4.37
5 17.91 11 8.86 17 6.23 23 4.99 29 4.27
6 15.14 12 8.24 18 5.96 24 4.84 30 4.18
Multiply the monthly installment by 11.84 for annual, by 5.96 for semi-annual or by 2.99 for quarterly
installments.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
OPTION C TABLE
LIFE INCOME
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Attained Attained
Age of Payee MONTHLY INSTALLMENTS Age of Payee MONTHLY INSTALLMENTS
- --------------------------------------------------------------------------------------------------------
--------- GUARANTEED --------- --------- GUARANTEED ---------
Male Female 10 Years 15 Years 20 Years Male Female 10 Years 15 Years 20 Years
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 or 2l or
Under Under $2.83 $2.82 $2.81 51 56 $4.60 $4.44 $4.24
17 22 2.85 2.84 2.84 52 57 4.69 4.52 4.30
18 23 2.88 2.87 2.86 53 58 4.79 4.60 4.36
19 24 2.90 2.89 2.88 54 59 4.90 4.69 4.41
20 25 2.93 2.92 2.91 55 60 5.01 4.77 4.47
21 26 2.95 2.95 2.93 56 61 5.12 4.86 4.53
22 27 2.98 2.97 2.96 57 62 5.23 4.94 4.59
23 28 3.01 3.00 2.99 58 63 5.35 5.03 4.64
24 29 3.04 3.03 3.02 59 64 5.48 5.12 4.70
25 30 3.08 3.07 3.05 60 65 5.61 5.21 4.75
26 31 3.11 3.10 3.08 61 66 5.74 5.30 4.80
27 32 3.14 3.13 3.11 62 67 5.87 5.39 4.85
28 33 3.18 3.17 3.15 63 68 6.01 5.48 4.90
29 34 3.22 3.20 3.18 64 69 6.16 5.56 4.94
30 35 3.26 3.24 3.22 65 70 6.30 5.65 4.98
31 36 3.30 3.28 3.25 66 71 6.45 5.73 5.02
32 37 3.34 3.32 3.29 67 72 6.60 5.82 5.05
33 38 3.39 3.36 3.33 68 73 6.76 5.90 5.09
34 39 3.43 3.41 3.37 69 74 6.91 5.97 5.12
35 40 3.48 3.45 3.41 70 75 7.07 6.05 5.14
36 41 3.53 3.50 3.45 71 76 7.23 6.12 5.17
37 42 3.59 3.55 3.50 72 77 7.38 6.18 5.19
38 43 3.64 3.60 3.54 73 78 7.54 6.24 5.20
39 44 3.70 3.65 3.59 74 79 7.69 6.30 5.22
40 45 3.76 3.71 3.64 75 80 7.84 6.35 5.23
41 46 3.82 3.77 3.69 76 81 7.98 6.39 5.24
42 47 3.88 3.82 3.74 77 82 8.13 6.43 5.25
43 48 3.95 3.88 3.79 78 83 8.26 6.47 5.26
44 49 4.02 3.95 3.84 79 84 8.39 6.50 5.26
45 50 4.09 4.01 3.90 80 or 85 or 8.51 6.53 5.27
46 51 4.17 4.08 3.95 Over Over
47 52 4.25 4.15 4.01
48 53 4.33 4.22 4.07
49 54 4.42 4.29 4.12
50 55 4.50 4.37 4.18
Multiply the monthly installment by 11.80 for annual, by 5.93 for semi-annual or by 2.98 for quarterly
installments.
</TABLE>
<PAGE>
ENDORSEMENTS:
CERTIFICATE OF GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Adjustable Death Benefit Payable On The Death Of The Insured.
Premium Payments May be Made At Any Time And, Within Limits, In Any Amount.
The Specified Amount May Be Increased Or Decreased And
Death Benefit Option May Be Changed.
The Maturity Date May Be Changed Subject To Limitations In TheCertificate.
Surrender Value, If Any, Payable On Maturity Date.
Additional Benefits, If Any, As Indicated On Page 3.
Some Benefits Reflect Investment Results.
Non-participating - No Dividends.
<PAGE>
APPLICATION FOR
GROUP INSURANCE POLICY
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, P.O. Box 216, Parsippany, NJ 07054-0216
Service Office: One Granite Place, P.O. Box 515, Concord, NH 03302-0515.
(800) 258-3648
Application is hereby made to
THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA
by
The Colonial Heritage Group Trust
- --------------------------------------------------------------------------------
whose main office address is 10 State Street Anytown NY 12345
---------------------------------------------------
- --------------------------------------------------------------------------------
for Group Policy No. VUL- 1000 (Group Flexible Premium Variable Life
------------------------------------------------------------
Insurance Policy)
- -----------------
Said Group Policy is hereby approved and the terms thereof are hereby accepted.
This Application is executed in duplicate, one counterpart being attached to
said Group Policy and the other being returned to The Colonial Life Insurance
Company of America.
It is agreed that this Application supercedes any previous application for said
Group Policy.
Executed at Anytown, NY this 1st day of June , 1994.
______________________ ________ ________
(City and State)
/s/ Jim Barber The Colonial Heritage Group Insurance Trust
__________________________________ ____________________________________________
Witness Full Name of Applicant,
If a Corporation state name accurately.
By: /s/ Joe Johnson, Vice President
________________________________________
Signature and Title
Bankers Trust Company,Inc.
This Copy Is to Remain Attached to the Policy.
Form 9-89117
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
APPLICATION FOR
GROUP INSURANCE POLICY
[LOGO OF CHUBB LIFEAMERICA APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, P.O. Box 216, Parsippany, NJ 07054-0216
Service Office: One Granite Place, P.O. Box 515, Concord, NH 03302-0515.
(800) 258-3648
Application is hereby made to
THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA
by
________________________________________________________________________________
whose main office address is ___________________________________________________
________________________________________________________________________________
for Group Policy No.____________________________________________________________
Said Group Policy is hereby approved and the terms thereof are hereby accepted.
This Application is executed in duplicate, one counterpart being attached to
said Group Policy and the other being returned to The Colonial Life Insurance
Company of America.
It is agreed that this Application supercedes any previous application for said
Group Policy.
Executed at _________________________ this ___ day of ______________, 1994.
(City and State)
_____________________________________ _______________________________________
Witness Full Name of Applicant,
It a Corporation state name accurately.
By:____________________________________
Signature and Title
This Copy Is to be Returned to The Colonial Life Insurance Company of America.
Form 9-89117
<PAGE>
Exhibit 1(e) (ii)
SPECIMEN GROUP JOINT AND LAST SURVIVOR FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE POLICY AND CERTIFICATE
<PAGE>
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, Parsippany, N.J. 07054
Service Center: One Granite Place, P.O. Box 2086, Concord, New Hampshire 03302
(800) 997-4499
READ THIS POLICY CAREFULLY
In consideration of the application for this Group Policy made by the
Policyholder, as named herein, and the applications of persons insured hereunder
and the payment of premiums when due, The Colonial Life Insurance Company of
America agrees to pay, in accordance with and subject to the terms and
conditions of this Group Policy, the benefits herein set forth with respect to
each Certificate Owner.
The Colonial Life Insurance Company of America, a stock company, will pay a
Death Benefit, as described herein on Page 12, to the Beneficiary on the death
of the Survivor of Joint Insureds on our receipt of due proof of both Joint
Insureds' deaths while this Group Joint and Last Survivor Flexible Premium
Variable Life Insurance Policy was in force and coverage on such Joint Insureds
was in effect.
This is a Group Joint and Last Survivor Flexible Premium Variable Life Insurance
Policy. Specified Amounts may be increased or decreased by each respective
Certificate Owner. Net premiums will be allocated to the General Account or to
one or more divisions of Colonial Separate Account D (herein called Separate
Account D as determined by each respective Certificate Owner.
A CERTIFICATE'S ACCUMULATION VALUE IN EACH DIVISION OF SEPARATE ACCOUNT D IS
BASED ON THE INVESTMENT EXPERIENCE OF THAT DIVISION AND MAY INCREASE OR DECREASE
DAILY. ACCUMULATION VALUES ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
A Certificate's Accumulation Value in the General Account will earn interest
daily at a minimum guaranteed effective annual rate of 4%. Interest in excess of
the guaranteed rate may be applied in the calculation of Accumulation Values at
such increased rates as The Colonial Life Insurance Company of America may
determine. While 100% of a Certificate's Accumulation Value is allocated to the
General Account, minimum benefits for such Certificate will be fixed and
guaranteed.
The AMOUNT OR DURATION OF A DEATH BENEFIT MAY BE VARIABLE OR FIXED UNDER THE
CONDITIONS SPECIFIED HEREIN AND MAY INCREASE OR DECREASE A CERTIFICATE'S MINIMUM
DEATH BENEFIT WILL BE AT LEAST EQUAL TO ITS INITIAL SPECIFIED AMOUNT AT ITS
ISSUE DATE IF PREMIUMS ARE PAID AS DUE, AND IF THERE ARE NO OUTSTANDING
CERTIFICATE LOANS, PARTIAL WITHDRAWALS OR PARTIAL SURRENDERS.
This Group Policy is a legal contract between the Policyholder and The Colonial
Life Insurance Company of America. The terms of all rights, benefits, and
options under this Group Policy are stated on this and the following pages.
Certificates issued under this Group Policy are not part of, nor do they modify
any provisions of this Group Policy.
/s/ John F. Swope /s/ Frederick H. Condon
-------------------- ---------------------
President Secretary
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Policyholder: The Colonial Heritage Group Insurance Trust
Group Policy Number: VUL-2000
GROUP JOINT AND LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY Adjustable Death Benefits Payable On The Death Of The Survivor
Of Joint Insureds. Premium Payments May be Made At Any Time And, Within
Limits, In Any Amount.
Specified Amounts May Be Increased Or Decreased And
Death Benefit Options May Be Changed.
Certificate Maturity Dates May Be Changed,
Subject To The Limitations Of This Group Policy.
Surrender Values, If Any, Payable On Certificate Maturity Dates.
Additional Benefits, If Any, As Indicated On Page 3.
Some Benefits Reflect Investment Results.
Non-participating - No Dividends.
Page i
<PAGE>
DEFINITIONS
The Terms or Definitions provided below are some of the terms used throughout
this Group Policy. There are other terms which are explained or defined on Page
5 and other parts of the text.
Certificate - The form used to describe a Certificate Owner's rights, benefits,
and options under this Group Policy. We will provide each Certificate Owner with
a Certificate which shows:
(1) The benefits for the named Joint Insureds;
(2) To whom the benefits are payable;
(3) Limits and other terms of this Group Policy as they pertain to the Joint
Insureds; and
(4) The location where this Group Policy may be seen.
A copy of the Certificate to be issued under this Group Policy, Form 94-121NY,
constitutes pages 1 - 25 of this Group Policy. A Certificate, when issued to any
Certificate Owner under this Group Policy, is not part of, nor does it modify
any provisions of this Group Policy.
Certificate Owner - The Owner of a Certificate as shown in the application for
such Certificate, unless later changed following a written request. A
Certificate Owner may be someone other than the Joint Insureds. Certificate
Owners possess all rights under this Group Policy with respect to their
Certificates.
As used in the following pages, the terms "you" and "your" will refer to each
respective Certificate Owner; it does not refer to the Policyholder.
Group Policy - The Group Joint and Last Survivor Flexible Premium Variable Life
Insurance Policy stated herein. The terms of all rights, benefits, and options
under this Group Policy are contained on these pages.
This Group Policy consists of this and the face page, Form 94-120NY, and
attached pages 1 through 25, Form 94-121NY.
PROVISIONS
Listed below are some of the provisions to this Group Policy. All other
provisions are stated on the following pages. A "Guide to Provisions" appears on
Page 2.
Eligibility - Any person (natural or legal entity) who, at the time of
application, maintains a current account with, or whose account is currently
serviced by, a financial institution participating as a Member under this
contract may apply for insurance under this Group Policy, if:
(1) The attained age of both proposed Joint Insureds, at the time of
application, is at least age 20, but not more than age 80; and
(2) The insurance is applied for on our forms and is accepted by us.
New Insureds - Unless stated otherwise, new Joint Insureds may be added at any
time to this Group Policy, subject to the eligibility requirements and other
terms of this contract.
We do reserve the right to no longer accept any new Joint Insureds under this
Group Policy as of a specified date.
<PAGE>
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, Parsippany, N.J, 07054
Service Office: One Granite Place, P.O. Box 2086, Concord, New Hampshire 03302
(800) 997-4499
The Colonial Life Insurance Company of America, a stock company, hereby
certifies that the Joint Insureds named herein are insured under a Group Joint
and Last Survivor Flexible Premium Variable Life Insurance Policy issued to the
Policyholder, as named on Page 3. Subject to the terms of the Group Policy, we
will pay the Death Benefit specified on Page 12 to the Beneficiary on the death
of the Survivor of the Joint Insureds on our receipt of due proof of both Joint
Insureds' deaths while the Group Policy was in force and coverage on the Joint
Insureds was in effect.
This is a Certificate of Group Joint and Last Survivor Flexible Premium Variable
Life Insurance. The Specified Amount may be increased or decreased by the Owner.
Net Premiums will be allocated to the General Account or to one or more
divisions of Colonial Separate Account D (herein called Separate Account D) as
determined by the Owner.
THE CERTIFICATE'S ACCUMULATION VALUE IN EACH DIVISION OF SEPARATE ACCOUNT D IS
BASED ON THE INVESTMENT EXPERIENCE OF THAT DIVISION AND MAY INCREASE OR DECREASE
DAILY. THE ACCUMULATION VALUE IS NOT GUARANTEED AS TO DOLLAR AMOUNT.
The certificate's Accumulation Value in the General Account will earn interest
daily at a minimum guaranteed effective annual rate of 4%. Interest in excess of
the guaranteed rate may be applied in the calculation of the Accumulation Value
at such increased rates as The Colonial Life Insurance Company of America may
determine. While 100% of the certificate's Accumulation Value is allocated to
the General Account, minimum benefits for the certificate will be fixed and
guaranteed.
THE AMOUNT OF DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY INCREASE OR
DECREASE UNDER THE CONDITIONS DESCRIBED HEREIN. THE CERTIFICATE'S MINIMUM DEATH
BENEFIT WILL BE AT LEAST EQUAL TO ITS INITIAL SPECIFIED AMOUNT ON ITS ISSUE DATE
IF PREMIUMS ARE PAID AS DUE, AND IF THERE ARE NO OUTSTANDING CERTIFICATE LOANS,
PARTIAL WITHDRAWALS OR PARTIAL SURRENDERS.
The Group Policy, under which this certificate is issued, is a legal contract
between the Policyholder and The Colonial Life Insurance Company of America.
This certificate describes the terms of your rights, benefits, and options under
the Group Policy. Your certificate is not part of, nor does it modify any
provisions of the Group Policy.
READ YOUR CERTIFICATE CAREFULLY
TWENTY DAY RIGHT TO CANCEL - Please examine this certificate carefully. You may
cancel this certificate by returning it to our Service Office or to the agent
through whom it was purchased within 20 days after the date you receive the
certificate or any longer period as may be required by the Securities and
Exchange Commission. If the certificate is returned, it will be deemed void from
the beginning and any premium paid for it will be refunded within 7 days.
/s/ John F. Swope /s/ Frederick H. Condon
-------------------- ---------------------
President Secretary
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Joint Insureds:
Certificate Number:
CERTIFICATE OF GROUP JOINT AND LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE
Adjustable Death Benefit Payable On The Death Of The Survivor Of The Joint
Insureds.
Premium Payments May be Made At Any Time And, Within Limits, In Any Amount.
The Specified Amount May Be Increased Or Decreased And
Death Benefit Option May Be Changed.
The Maturity Date May Be Changed Subject To Limitations In The Certificate
Surrender Value, If Any, Payable On Maturity Date.
Additional Benefits, If Any, As Indicated On Page 3.
Some Benefits Reflect Investment Results.
Non-participating - No Dividends.
FORM 94-121NY
<PAGE>
GUIDE TO PROVISIONS
<TABLE>
<S> <C>
Corridor Percentage Table............................ 3B
Data Page:
Age at Issue...................................... 3
Certificate Expense Charges....................... 3
Death Benefit Option.............................. 3
Initial Specified Amount.......................... 3
Maturity Date..................................... 3
Owner............................................. 3
Death Benefit:
Changes in Existing Coverage...................... 13
Death Benefit..................................... 12
Definitions.......................................... 5
General Provisions:
Annual Report..................................... 10
Assignment........................................ 9
Changing the Beneficiary.......................... 9
Illustration of Benefits and Values............... 10
Incontestability.................................. 8
Misstatement of Age or Sex........................ 8
Non-Participating................................. 10
Notice of First Death............................. 9
Payment of Proceeds............................... 9
Postponement of Payment........................... 10
Proceeds.......................................... 9
Reserves.......................................... 10
Simultaneous Death of Insureds.................... 9
Suicide........................................... 8
Payment Options:
Death of Payee.................................... 24
Election of an Option............................. 23
Interest.......................................... 23
Limitation on Rights of Payee and Claims
of Creditors............................... 24
Option A - Installments of a Specified Amount..... 23
Option B - Installments for a Specified Period.... 23
Option C - Life Income............................ 23
Option D - Interest............................... 23
Supplementary Contract............................ 23
Tables of Monthly Installments Under
Option B or C............................. 25
Withdrawal Value.................................. 23
Certificate Loans:
Certificate Loan Interest......................... 22
Certificate Loan Repayment........................ 22
Certificate Loans................................. 21
Types of Certificate Loans
(Type A and Type B)........................ 22
Certificate Values:
Accumulation Value................................ 13
Basis of Computations............................. 19
Cash Value........................................ 17
Continuation of Insurance......................... 17
Cost of Insurance................................. 16
Cost of Insurance Discounts....................... 17
Cost of Insurance Rates........................... 16
General Account Accumulation Value................ 14
General Account Interest Rate..................... 14
Insufficient Cash Value........................... 17
Minimum Values.................................... 19
Monthly Deduction................................. 15
Net Investment Factor............................. 15
Separate Account Accumulation Values.............. 15
Surrender......................................... 18
Surrender Charge.................................. 18
Withdrawal of Cash Value (Withdrawal)............. 18
Premiums:
Allocation of Net Premiums........................ 11
Certificate Lapse................................. 12
Grace Period...................................... 12
Net Premium....................................... 11
Planned Periodic Premium and Premium
Frequency.................................. 11
Premium Payments.................................. 11
Reinstatement..................................... 12
Unscheduled Premiums.............................. 11
Separate Account Provisions:
Addition, Deletion, or Substitution of
Investments................................ 21
Divisions......................................... 20
Separate Account.................................. 19
Transfers......................................... 20
Schedule of Surrender Charges........................ 3A
Table of Monthly Guaranteed Cost of Insurance
Rates................................ 4
Contract Provisions:
Certificate Termination........................... 7
Change of Maturity Date........................... 7
Change or Modification............................ 6
Conversion........................................ 7
Effective Date of Coverage........................ 6
Entire Contract................................... 6
Group Policy Termination.......................... 6
Information Required.............................. 6
Maturity Date..................................... 7
Owner Death....................................... 7
Rights Under the Contract......................... 6
The Group Policy is a Legal Contract.............. 6
</TABLE>
A copy of the application will be found after page 24 of this certificate. Any
other benefit or agreements will also be found after page 24.
Page 2 **********
<PAGE>
(THIS PAGE TO BE RESPECTIVELY COMPLETED FOR EACH ISSUED CERTIFICATE)
POLICYHOLDER: THE COLONIAL HERITAGE GROUP INSURANCE TRUST
10 STATE STREET
ANYTOWN, NY 12345
GROUP POLICY NUMBER: VUL-2000
INSURED: A - XXXXXX XXXXXX MATURITY DATE: XX/XX/XXXX
INSURED: B - XXXXXX XXxXXX CERTIFICATE NUMBER: XXXXXXXX
CERTIFICATE OWNER: XXXXXX XXXXXX PREMIUM FREQUENCY: XXXXXXXX
ISSUE DATE: XX/XX/XXXX DEATH BENEFIT: XXXXXX X
CERTIFICATE DATE: XX/XX/XXXX CORRIDOR PERCENTAGE TABLE: XXXXXXXX
AGE AT ISSUE: A - XX XXXXXX
AGE AT ISSUE: B - XX XXXXXX
RATING CLASS: A - XXXXXXXX XXXXXXXXX
RATING CLASS: B - XXXXXXXX XXXXXXXXX
BENEFICIARY: XXXXXX XXXXXX
INITIAL PLANNED
MINIMUM PERIODIC
LIFE INSURANCE PREMIUM PREMIUM
$XX,XXX,XXX INITIAL SPECIFIED AMOUNT $XX,XXX.XX $XX,XXX.XX
GROUP JOINT AND LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
IT IS POSSIBLE THAT COVERAGE WILL EXPIRE PRIOR TO THE MATURITY DATE CHOSEN WHEN
EITHER NO PREMIUMS ARE PAID FOLLOWING PAYMENT OF THE INITIAL PREMIUM OR
SUBSEQUENT PREMIUMS ARE INSUFFICIENT TO CONTINUE COVERAGE TO SUCH DATE. IF
CURRENT VALUES CHANGE, THIS WILL ALSO AFFECT COVERAGE.
THE CERTIFICATE'S ACCUMULATED VALUE IN THE GENERAL ACCOUNT WILL EARN INTEREST
DAILY AT A MINIMUM GUARANTEED EFFECTIVE ANNUAL RATE OF 4%. THE CERTIFICATE'S
ACCUMULATED VALUE HELD IN THE GENERAL ACCOUNT FOR CERTIFICATE LOAN COLLATERAL
WILL EARN INTEREST DAILY AT AN EFFECTIVE ANNUAL RATE OF 6%.
ALLOCATIONS OF NET PREMIUMS: XX.X% INTERNATIONAL EQUITY DIVISION
XX.X% SMALL COMPANY DIVISION
XX.X% EQUITY DIVISION
XX.X% BOND DIVISION
XX.X% TREASURY MONEY MARKET DIVISION
XX.X% GENERAL ACCOUNT
CERTIFICATE EXPENSE CHARGES:
(1) STATE TAX CHARGE: 2.0% OF EACH PREMIUM PAID.
(2) FEDERAL DEFERRED ACQUISITION COST (DAC TAX) CHARGE: 1.25% OF EACH
PREMIUM PAID.
(3) SALES CHARGE: 3.0% OF EACH PREMIUM PAID.
(4) COST OF INSURANCE AS DEFINED ON PAGE 13.
(5) MORTALITY AND EXPENSE RISK CHARGE AS DEFINED ON PAGE 13.
(6) SURRENDER CHARGE ON WITHDRAWAL OR SURRENDER AS DEFINED ON PAGE 15.
GUIDELINE SINGLE PREMIUM (BASED ON INITIAL SPECIFIED AMOUNT): $XX,XXX.XX
Page 3
<PAGE>
CERTIFICATE YEAR SURRENDER FACTOR
1 5%
2 4%
3 3%
4 2%
5 1%
6+ 0
SURRENDER CHARGE IS CALCULATED BY MULTIPLYING
THE APPROPRIATE SURRENDER FACTOR BY THE TOTAL
PREMIUMS PAID IN THE FIRST CERTIFICATE YEAR.
Page 3A
<PAGE>
(THIS PAGE TO BE RESPECTIVELY COMPLETED FOR EACH ISSUED CERTIFICATE)
CORRIDOR PERCENTAGE TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Certificate Corridor Certificate Corridor Certificate Corridor
Year Percentage Year Percentage Year Percentage
XX XXX% XX XXX% XX XXX%
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
XX XXX XX XXX
</TABLE>
Page 3B
<PAGE>
(THIS PAGE TO BE RESPECTIVELY COMPLETED FOR EACH ISSUED CERTIFICATE)
TABLE OF MONTHLY GUARANTEED COST OF
INSURANCE RATES PER $1,000
CERTIFICATE NUMBER 000000
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Certificate Monthly Certificate Monthly Certificate Monthly
Year Rate Year Rate Year Rate
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
XX XX.XXXXX XX XX.XXXXX
</TABLE>
Page 4
<PAGE>
DEFINITIONS
Terms or Definitions we identify or define here are some of the terms used
throughout the certificate. There are other terms which are explained or defined
in other parts of the text.
Accumulation Value - The Accumulation Value of the certificate is equal to the
total of the certificate's Accumulation Value in the General Account and the
certificate's Accumulation Value in divisions of Separate Account D.
Age - Refers to the age nearest birthday on the Certificate Date of each
Insured. Attained age of the Insureds means the age nearest birthday on the last
certificate anniversary.
Beneficiary - The person named to receive the Death Benefit proceeds upon the
death of the surviving Insured. The Beneficiary is as named in the application
unless later changed. There can be one or more Beneficiaries.
Cash Value - The Accumulation Value less any applicable Surrender Charge.
Certificate Date - The date as shown on Page 3, which is the date requested by
the Owner. If no date is requested, it shall be the Issue Date. The Certificate
Date is the date from which certificate years, certificate months, certificate
anniversaries and monthly anniversary days will be determined. If the
Certificate Date should fall on the 29th, 30th or 31st of a month, the
Certificate Date will be the 1st of the following month.
Certificate Year - The first certificate year is the twelve month period
following the Certificate Date. Each twelve month period thereafter makes up
the next certificate year.
Death Benefit - The amount payable on the death of the surviving Insured while
the certificate is in force. It is explained in the Death Benefit section.
Debt - Means the principal of any loan outstanding against the certificate, plus
any accrued loan interest which has not been paid.
Initial Minimum Premium - The minimal first year premium amount due and payable
on the Certificate Date as shown on Page 3.
Insureds or Joint Insureds - The two persons named as the Insureds on Page 3.
The Insureds may be other than the Owner.
Issue Date - This is the date the certificate is issued at the Service Office
and is stated on Page 3. The contestable and suicide periods are measured from
the Issue Date.
Member - Your financial institution whose customers are eligible to apply for
insurance under the Group Policy as a result of the Member's written application
to participate under the Group Policy.
Policyholder - The entity named on Page 3. The Group Policy is held by the
Policyholder; it may be inspected by you at any time during business hours at
the office of the Policyholder. The Policyholder possesses no rights under the
Group Policy.
Specified Amount - The face amount of the certificate as selected by the Owner.
This amount may increase or decrease subject to the terms of the certificate.
The Death Benefit is based on the Specified Amount as described in the Death
Benefit section.
Surrender Charge - A charge to the Accumulation Value in the event of surrender
or withdrawal. It is further explained in the Certificate Values section.
Surrender Value - The Cash Value less any debt.
We, Us, Our - The Colonial Life Insurance Company of America.
Withdrawal - A payment to you of some portion of the Cash Value accompanied by a
reduction to the Accumulation Value, Specified Amount, Surrender Charge, and
Death Benefit. It is explained in the Certificate Values section.
Written Request - A request in writing signed by you and received by us.
You, Your - The Owner of the certificate as shown in the application unless
later changed following written request; it does not refer to the Policyholder.
The Owner may be someone other than the Insureds. As Owner, you possess all
rights under the Group Policy with respect to your certificate.
Page 5
<PAGE>
CONTRACT PROVISIONS
The Group Policy is a Legal Contract - The Group Policy is a legal contract that
the Policyholder has entered into with us. We promise to provide the insurance
benefits set forth in the Group Policy. In return, the Policyholder has
submitted a completed application. There will be no insurance coverage under
the Group Policy until we receive and approve an application for a person to be
insured under the Group Policy and the Initial Minimum Premium for such person
is paid.
Entire Contract - The entire contract consists of:
(1) the Group Policy, and any endorsements or riders (mandatory and/or
optional) attached to it;
(2) the application of the Policyholder, a copy of which is attached to the
Group Policy;
(3) the application of the Member;
(4) the separate applications for insurance of each person insured under the
Group Policy and any supplemental applications; and
(5) any amendments which are added to and made a part of the Group Policy.
Your certificate is not part of the Group Policy. Any conflict between the
terms of your certificate and the Group Policy will be decided in favor of the
Group Policy.
Rights Under The Group Policy - The Policyholder and the Member have no rights
under the Group Policy. As the Owner of this certificate, you have the sole
authority to exercise every contractual right, receive every benefit and enjoy
every privilege granted by the Group Policy with respect to your certificate.
Information Required - You, the Member and the Policyholder shall furnish all
information which we may reasonably require for the administration of the Group
Policy. We will not be liable for the fulfillment of any obligations until we
receive all information in a satisfactory form.
Change or Modification - Only one of our officers can change or modify the Group
Policy or waive any of our rights or requirements. Any such changes must be in
writing. No agent or other person has the authority to make any changes or waive
any terms of the Group Policy.
To the extent permitted by applicable laws and regulations, we may make changes
without your consent to the provisions of the Group Policy to comply with any
applicable federal or state laws including, but not limited to, requirements for
life insurance contracts under the Internal Revenue Code. You have the right to
refuse any such changes. However, we cannot accept responsibility for the tax
treatment of your coverage under the Group Policy. You should consult your tax
advisor regarding taxation under the Group Policy.
If the Group Policy is revised, you will be provided with either an amendment
for this certificate or a new revised certificate.
Group Policy Termination - The Group Policy will not terminate until the close
of business on the date upon which the performance and fulfillment by us of all
our duties and obligations thereunder have been completed.
Effective Date of Coverage - The effective date of coverage under this
certificate shall be as follows:
(1) For all coverage requested in the original application the coverage begins
on the Certificate Date, provided that the Initial Minimum Premium has been
paid, and the certificate has been delivered while there has been no change
since the date of the application in the health of the Insureds or the
answers to the health questions contained in the application.
(2) For any increase or addition to coverage, the effective date shall be the
date shown on the Supplemental Certificate Specifications page. The
effective date for such coverage shall begin on the certificate monthly
anniversary day that coincides with or next follows the date the
application for the increase or addition is approved by us.
Page 6 **********
<PAGE>
CONTRACT PROVISIONS (CONTINUED)
Maturity Date - The Maturity Date is shown on Page 3 and is the date when
coverage under this certificate is scheduled to end. If this certificate is in
force on the Maturity Date:
(1) all insurance benefits end; and
(2) the Surrender Value, if any, will be paid as you direct in a lump sum or
under a payment option.
The certificate may end prior to the Maturity Date if premium payments are
insufficient to continue coverage to such date. Details are provided in the
Certificate Lapse provision of the Premiums section, and also in the
Continuation of Insurance provision of the Certificate Values section.
Change of Maturity' Date - The Maturity Date may be changed upon written request
by you. The new Maturity Date may be any certificate anniversary after the end
of the tenth certificate year, and on or before the younger Insured's 100th
birthday. However, the new Maturity Date must be at least twelve months from
the date we receive such written request from you.
Certificate Termination - This certificate terminates when any of the following
occur:
(1) you request the full surrender of this certificate;
(2) the death of the surviving Insured;
(3) the Grace Period ends; or
(4) the certificate reaches its Maturity Date.
Conversion - If the Insureds' coverage under the Group Policy ends for any
reason other than the non-payment of premiums, you may convert the insurance
under the Group Policy to an individual policy of life insurance without
evidence of insurability. You must apply for the individual policy and pay the
first premium within 31 days after coverage under the Group Policy ends. The new
policy will be non-participating and issued subject to the following:
(1) The policy will be on one of the forms we customarily issue at the time of
conversion, other than term;
(2) The policy will be issued at the amount and age applied for;
(3) The amount of the policy may not exceed the Specified Amount of the
certificate which ends; and
(4) The premium for the policy will be our usual rate. It will be based on the
amount of insurance, risk class, type of policy and age at the policy issue
date.
If the Survivor of the Insureds dies during the time in which this certificate
is entitled to be converted, we will pay the Death Benefit which was in effect
under the certificate just prior to its termination. We will deduct any overdue
monthly deduction, which is applicable to the conversion period, from the
proceeds of the Insureds' coverage. This will be done whether or not you
actually applied for the individual policy.
Any policy issued pursuant to this provision will take effect at the end of the
31-day period in which application must be made.
Owner Death - Upon death of the Owner, the surviving Insured(s) will assume
ownership, unless otherwise provided. If such ownership goes to joint owners,
they will be joint tenants with right of survivorship and not tenants in common.
Page 7
<PAGE>
GENERAL PROVISIONS
Incontestability - We rely on the statements made in the application for this
certificate and any supplemental applications. These statements are considered
representations and not warranties. No statement may be used in defense of a
claim under this certificate unless it is in an application.
We will not contest the coverage under this certificate, except for any increase
in the Specified Amount, after it has been in force during the lifetime of at
least one of the Insureds for a period of two years from its Issue Date. This
provision does not apply to any benefits provided by a rider which grants
disability benefits or an added benefit in the event death results from an
accident.
Any increase in the Specified Amount will not be contested after such increase
has been in force during the lifetime of at least one of the Insureds for two
years following the effective date of such increase. Any increase will be
contestable, within the two year period, only with regard to statements
concerning the increase.
If we cancel coverage for the Initial Specified Amount, we will refund to you
all premiums paid less any certificate loans and withdrawals paid out. If we
cancel coverage for an additional Specified Amount or Amounts only, we will
refund to you, the cost of insurance for the additional Specified Amount or
Amounts, charged for the applicable period.
If this certificate is reinstated, the incontestability period will start over
again beginning on the reinstatement date, but only for statements made in
the application for reinstatement.
The Group Policy, under which this certificate is issued, will not be contested.
Suicide - If either Insured commits suicide within two years from the Issue
Date, our only liability will be a refund of premiums paid without interest less
any certificate loans and/or withdrawals. If either Insured commits suicide
after such two year period, but within two years of the effective date of any
increase in the Specified Amount, our only liability with respect to the
increase in the Specified Amount will be a refund of the total cost of insurance
for such increase.
If the first death of either Insured is by suicide within any such two year
period, and the surviving Insured was classified by us as insurable on the
Certificate Date, at your request, we will issue, without evidence of
insurability, a single life certificate providing coverage on the life of the
surviving Insured equal to the coverage on the Joint Insureds for which the
premiums or costs of insurance was refunded. The Certificate Date of the new
certificate and the dates of any increases in the Specified Amount will be the
effective dates of the refunded coverage. The new certificate will be on the
most similar certificate form available at the time. The premiums for the new
certificate will depend on the Initial Specified Amount, rating class, and the
attained age and sex of the surviving Insured for this certificate. The rating
class for the new certificate will be the individual rating class assigned to
the surviving Insured when this certificate was underwritten and may differ from
the rating class for this certificate.
Misstatement of Age or Sex - If either Insured's age or sex has been misstated
in the application, we will adjust the proceeds to reflect the correct age or
sex. In such event, the Death Benefit we will pay will be equal to:
(1) The Accumulation Value on the date of death of the surviving Insured less
any outstanding debt; plus
(2) The Death Benefit, less the Accumulation Value on the date of death of the
surviving Insured, multiplied by the ratio of (a) the cost of insurance
actually deducted at the beginning of the certificate month in which death
occurs, to.(b) the cost of insurance that should have been deducted based
on the correct age or sex.
If either Insured's age or sex has been misstated in the application, the amount
payable under any rider by reason of death of the surviving Insured shall be
that amount of insurance which the rider cost, for the certificate month during
which such death occurred, would have purchased had the cost of the benefits
provided under the rider been calculated using the correct cost of insurance
rates for the correct age or sex.
If prior to the death of the surviving Insured, it is found that either
Insured's age or sex has been misstated in the application for the certificate
or a rider, the certificate Accumulation Value will be recalculated from issue,
using mortality charges based on the correct age or sex.
Page 8
<PAGE>
GENERAL PROVISIONS (CONTINUED)
Assignment - While at least one Insured is alive you can:
(1) assign certificate ownership to someone else; or
(2) assign this certificate as security for an obligation. (This does not
assign ownership).
A signed copy of the assignment must be sent to our Service Office on a form we
accept. The assignment will go into effect when it is signed subject to any
payments we make or other actions we take before we record it. We are not
responsible for the validity of any assignment.
Notice of First Death - Due proof of the death of the first of the Insureds to
die must be given to us as soon after the death occurs as is reasonably
possible.
Simultaneous Death of Insureds - When two or more Beneficiaries are designated
to take on the alternative based on the order of the Insureds' death and there
is not sufficient evidence that the Insureds died other than simultaneously; one
half of the Death Benefit proceeds shall be paid as if Insured A had survived
Insured B; and one half shall be paid as if Insured B had survived Insured A.
This shall not apply if you have provided for a different payment.
Changing the Beneficiary - You can change the Beneficiary at any time during the
lifetime of either Insured. To do so, send a written request to our Service
Office. The request must be on a form we accept. The change will go into effect
when signed subject to any payments we make or other actions we take before we
record the change. A change cancels all prior beneficiary designations.
Proceeds - By proceeds, we mean the amount payable:
(1) on the Maturity Date; or
(2) on the surrender of this certificate; or
(3) on the death of the surviving Insured.
The proceeds on the Maturity Date, as well as on surrender, will be the
Surrender Value. The proceeds on the death of the surviving Insured will be the
Death Benefit less any debt and less any monthly deductions due.
All proceeds are subject to the adjustments provided in the Incontestability,
Suicide, and Misstatement of Age or Sex provisions of this certificate and the
restrictions below.
Payment of Proceeds - Death Benefit proceeds or Surrender Value proceeds may be
paid in one sum or under our payment options. Before proceeds are paid, they
will be used to pay the interest of anyone to whom this certificate has been
assigned (see the Assignment provision). Loans and assignments will be paid in
one sum.
Unless an optional mode of settlement is elected, the proceeds payable on the
death of the surviving Insured shall be paid in one sum to the Beneficiary. If
there is no Beneficiary at the time of the death of the surviving Insured, we
will pay the proceeds to you or your estate.
Unless an optional mode of settlement is elected, any proceeds payable on the
Maturity Date or upon surrender of this certificate shall be paid in one sum to
you or your estate.
If the Death Benefit proceeds are not paid in one sum or applied under a payment
option, within 30 days after we receive due proof of the death of the surviving
Insured, we will pay interest. Interest will be paid at the rate of 4% a year
from the date we receive such proof until paid. If New York state law requires
payment of a greater amount, we will pay that amount.
To the extent allowed by law, all payments under this certificate will be free
from creditor claims or legal process.
Page 9
<PAGE>
GENERAL PROVISIONS (CONTINUED)
Postponement of Payment - We will usually pay any amounts payable on surrender,
withdrawal, or certificate loan, allocated to Separate Account D, within seven
days after written notice is received. We will usually pay any Death Benefit
proceeds allocated to Separate Account D, within seven days after we receive due
proof of the death of the surviving Insured. However, payment of any amount
payable on surrender, withdrawal, certificate loan, or any part of the Death
Benefit, attributable to Separate Account D, may be postponed whenever:
(1) The New York Stock Exchange is closed other than customary week-end and
holiday closings, or trading on the New York Stock Exchange is restricted
as determined by the Securities and Exchange Commission;
(2) The Securities and Exchange Commission, by order, permits postponement for
the protection of certificate owners; or
(3) An emergency exists as determined by the Securities and Exchange
Commission, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to determine the value of
the net assets of Separate Account D.
Transfers may also be postponed under the above circumstances.
We may defer the portion of any transfer, amount payable on surrender,
withdrawal, or certificate loan from the General Account for not more than six
months. However, no payment from the General Account to pay premiums on
certificates with us will be deferred. We may defer payment of any part of the
Death Benefit attributed to funds in the General Account for a period of not
more than 60 days.
Annual Report - Following each December 31st, we will send you an annual report
which shows the current Accumulation Value, Cash Value, premiums paid, incurred
charges, withdrawals, outstanding certificate loans, and any other information
required by the Superintendent of Insurance for the entire 12 months of the
previous calendar year. The first annual report forwarded to you will only
reflect those months of the previous calendar year during which this certificate
was in effect.
Illustration of Benefits and Values - We will provide illustrations of Death
Benefits, Accumulation Values and Cash Values at any time after the Certificate
Date upon your written request. This illustration will be based on the existing
Accumulation Value and Cash Value at the time of request and maximum cost of
insurance rates. Additional illustrations will be made based on the existing
Accumulation Value, Cash Value and current mortality assumptions.
Reserves - Reserves are the amount we hold to pay future benefits. They are not
less than the minimum required by New York state law. When required, we file
with the state regulatory authorities a statement showing how Reserves are
calculated.
Non-Participating The Group Policy is a non-participating contract,
which means the following:
(1) Premiums are determined and redetermined on a prospective basis only;
(2) We will not recoup any prior losses by means of a premium change; and
(3) You, the Member and the Policyholder are not entitled to participate in our
profits.
Page 10
<PAGE>
PREMIUMS
Premium Payments - An initial premium is due and payable on the Certificate
Date. The initial premium may not be less than the Initial Minimum Premium. All
premiums are payable in advance at our Service Office or to our authorized agent
in exchange for a receipt. This receipt must be signed by an elected officer of
the Company and countersigned by such agent. No premium payment may be less than
$500.00.
Planned Periodic Premium and Premium Frequency - The Planned Periodic Premium
and Premium Frequency, as shown on Page 3, are selected by you. The Planned
Periodic Premium is the amount of premium you intend to pay. The Premium
Frequency is how often you intend to pay the Planned Periodic Premium. Payment
of the Planned Periodic Premium is your option.
We will send you Planned Periodic Premium payment reminder notices. If the mode
of premium payment is preauthorized check, government allotment or payroll
deduction, notice of any Planned Periodic Premium due will not be sent.
Changes in Premium Frequency and increases or decreases in the Planned Periodic
Premium may be made by you by providing us with written notification. We reserve
the right 40 limit the amount of any increase. The total of all premiums paid
may never exceed the current maximum premium limitations set forth in Section
7702 of the Internal Revenue Code of 1986, as amended.
Payment of a Planned Periodic Premium may not prevent this certificate from
terminating. Failure to pay a Planned Periodic Premium will not, in itself,
cause this certificate to terminate. The certificate will terminate only if the
conditions occur as described in the Grace Period provision.
Net Premium - The Net Premium is equal to the premium paid multiplied by 93.75%.
The deduction of 6.25% is for Certificate Expense Charges (2.00/o state tax
charge, plus 1.25% Federal Deferred Acquisition Cost tax charge, plus 3% sales
charge) as stated on Page 3.
We reserve the right to increase the state tax charge, stated above, if our
actual state tax expense incurred is greater than 2.0%. However, in no event
will this charge exceed 2.5%.
Allocation of Net Premiums - You will determine the allocation of the net
premiums among the General Account and the divisions of Separate Account D. The
minimum percentage that may be allocated to any of these accounts is 1%.
Unscheduled Premiums - Premium payments in addition to the Planned Periodic
Premium may be made at any time prior to the Maturity Date. We reserve the right
to limit the number and amount of unscheduled additional premium payments to one
each month per certificate year. The total of all premiums paid may never exceed
the current maximum premium limitations set forth in Section 7702 of the
Internal Revenue Code of 1986, as amended.
If there is an existing certificate loan, premium payments in the amount of the
Planned Periodic Premium received at the Premium Frequency will be applied as
premium. Premium payments in excess of the Planned Periodic Premium or premium
payments received other than at the Premium Frequency will first be applied as
certificate loan repayments, then as premium when the certificate debt is
repaid.
94125 Page 11 ##########
<PAGE>
PREMIUMS (CONTINUED)
Grace Period - We will allow a Grace Period of 61 days. Such Grace Period will
begin if the Cash Value less any certificate debt on a monthly anniversary day
is not enough to cover the monthly deduction for the month following such
monthly anniversary day. The Cash Value and monthly deduction are defined in the
Certificate Values section.
If the surviving Insured dies during the Grace Period, we will deduct any
overdue monthly deduction, which is applicable to the Grace Period, from the
proceeds of the certificate.
Certificate Lapse - The certificate will terminate without value at the end of
the Grace Period unless a premium large enough, after the deduction of the
Certificate Expense Charges, to cover monthly deductions for at least three
months is paid by the end of the Grace Period. However. coverage will not end
until 31 days after we have mailed a premium notice to you, and any assignee of
record, at the last known address.
Reinstatement - Reinstatement is the restoration of the certificate after it has
lapsed. Following reinstatement, the certificate is placed back in force as if
it had never lapsed.
If this certificate lapses or terminates as provided in the Grace Period
provision, we will reinstate the certificate if we receive:
(1) your written request for reinstatement within five years after the end of
the Grace Period and before the Maturity Date;
(2) satisfactory proof the Insureds, or the surviving Insured, are living and
insurable at the original rating classes or class;
(3) payment of a premium large enough, after the deduction of the Certificate
Expense Charges, to cover monthly deductions for at least three certificate
months following the effective date of reinstatement; and
(4) payment or reinstatement of any debt against the certificate which
existed on the date of termination.
The effective date of a reinstated certificate or Reinstatement Date is the date
we approve the application for reinstatement. The Accumulation Value of the
certificate on the Reinstatement Date shall be the Accumulation Value on the
date of termination plus the premium received to reinstate the certificate. Any
Surrender Charges in effect on reinstatement shall be as defined in the
Surrender Charge provision based on the original Certificate Date and duration.
DEATH BENEFIT
Death Benefit - If the Survivor of the Insureds dies while this certificate is
in force, we will pay the Death Benefit upon receipt of due proof of the death
of both Insureds. No Death Benefit is paid on the death of the first Insured to
die. The Death Benefit is also subject to all other terms and conditions of this
certificate.
The Death Benefit provided by this certificate depends on the Death Benefit
Option in effect on the date of death. The Death Benefit Option for this
certificate is shown on Page 3.
Option I - Under Option I, the Death Benefit shall be the greater of:
(1) The Specified Amount; or
(2) The Accumulation Value on the date of death multiplied by the corridor
percentage.
Option II - Under Option II, the Death Benefit shall be equal to the Specified
Amount plus the Accumulation Value on the date of death. However, the Death
Benefit can never be less than the Accumulation Value on the date of death
multiplied by the corridor percentage.
The corridor percentage varies by certificate duration and is indicated in the
Corridor Percentage Table as shown on Page 3B.
Page 12
<PAGE>
DEATH BENEFIT (CONTINUED)
Changes in Existing Coverage - The Initial Specified Amount is shown on Page 3.
At any time after the first certificate anniversary, you may, by written
request, increase or decrease the Specified Amount. Any change is subject to
the following conditions:
(1) Any decrease will become effective on the monthly anniversary day that
coincides with or next follows our receipt of the request. At least twelve
months must elapse between decreases. Any such decrease will be deducted in
the following order:
(a) from the most recent Specified Amount increase, if any;
(b) successively from the next most recent Specified Amount increase, if
any;
(c) from the Initial Specified Amount.
(2) Any request for an increase must be applied for on a supplemental
application and shall be subject to evidence satisfactory to us that both
Insureds are living and insurable. At least twelve months must elapse
between requested increases.
(3) Any change approved by us will become effective on the effective date shown
in the Supplemental Certificate Data Page, subject to deduction of the
first month's cost of insurance from the Accumulation Value of this
certificate.
(4) The minimum Specified Amount, after a change, which must be in effect at
any time is $1,000,000.
(5) Any increase or decrease in the Specified Amount must be for at least
$500,000.
(6) You may request in writing to change the Death Benefit Option. If your
request is to change from Option I to Option II, the Specified Amount will
be decreased by the amount of the Accumulation Value. Evidence of
insurability satisfactory to us will be required on a change from Option I
to Option II. If the request is to change from Option II to Option I, the
Specified Amount will be increased by the amount of Accumulation Value. The
effective date of change shall be the monthly anniversary day that
coincides with or next follows the day the request for change is received.
(7) An increase for insurance cannot be requested after the younger of the
Insureds reaches an attained age of 80.
CERTIFICATE VALUES
Accumulation Value - The Accumulation Value of the certificate is equal to the
total of the certificate's Accumulation Value in the General Account and the
certificate's Accumulation Value in division of Separate Account D.
Page 13
<PAGE>
CERTIFICATE VALUES (CONTINUED)
General Account Accumulation Value - The Accumulation Value in the General
Account on the Certificate Date is equal to the portion of the net premium which
has been paid and allocated to the General Account, less the portion of the
first monthly deduction allocated to the General Account.
On each monthly anniversary day, the Accumulation Value in the General Account
is equal to (1) plus (2) plus (3) plus (4) minus (5) minus (6) minus (7) where:
(1) is the Accumulation Value in the General Account on the preceding monthly
anniversary day.
(2) is one month's interest on item (1).
(3) is any net premium received since the preceding monthly anniversary day
plus interest from the date the net premium is received to the monthly
anniversary day.
(4) is the sum of all Accumulation Values transferred to the General Account
from a division of Separate Account D since the preceding monthly
anniversary day and interest from the date the Accumulation Value is
transferred to the monthly anniversary day.
(5) is the sum of all Accumulation Values transferred from the General Account
to a division of Separate Account D since the preceding monthly anniversary
day and interest from the date the Accumulation Value is transferred to the
monthly anniversary day.
(6) is all withdrawals from the General Account since the preceding monthly
anniversary day plus interest from the date of the withdrawal to the
monthly anniversary day.
(7) is the portion of the monthly deduction allocated to the Accumulation Value
in the General Account to cover the certificate month following the monthly
anniversary day.
On any date other than a monthly anniversary day, the Accumulation Value will be
calculated on a consistent basis.
General Account Interest Rate - The certificate's Accumulation Value in the
General Account will earn interest daily at a minimum guaranteed effective
annual rate of 4%. Interest in excess of the guaranteed rate may be applied in
the calculation of the Accumulation Value at such increased rates as we may
determine. Interest rates will be established by class of Insureds based on
future expectations and on rules and standards on file with the New York
Insurance Department. The current interest rate reflects the prevailing average
rate on the current portfolio and rates obtained on new investments, adjusted
for contingencies and expenses. The certificate's Accumulation Value held in
the General Account for policy loan collateral will earn interest daily at an
effective annual rate of 6%.
Page 14
<PAGE>
CERTIFICATE VALUES (CONTINUED)
Separate Account Accumulation Values - The Accumulation Value in each
division on the Certificate Date is equal to the portion of the net premium
which has been paid and allocated to that division, less the portion of the
first monthly deduction allocated to the certificate's Accumulation Value in
that division.
At the end of each valuation period after the Certificate Date, the
certificate's Accumulation Value in a division is equal to (1) plus (2) plus (3)
minus (4) minus (5) where:
(1) is the Accumulation Value in the division on the preceding valuation date
multiplied by the Net Investment Factor for the current valuation period.
(2) is any net premium received during the current valuation period which is
allocated to the division.
(3) is all Accumulation Values transferred to the division from another
division or the General Account during the current valuation period.
(4) is all Accumulation Values transferred from the division to another
division or the General Account and Accumulation Values transferred to
secure a certificate debt during the current valuation period.
(5) is all withdrawals from the division during the current valuation period.
In addition, whenever a valuation period includes the monthly anniversary day,
the Accumulation Value at the end of such period is reduced by the portion of
the monthly deduction allocated to the division.
Net Investment Factor - The Net Investment Factor measures the investment
performance of a division during a valuation period. The Net Investment Factor
for each division for a valuation period is calculated as (1) divided by (2),
minus (3) where:
(1) is (a) the value of the assets in the division at the end of the preceding
valuation period, plus (b) the investment income and capital gains,
realized or unrealized, credited to the assets in the valuation period for
which the Net Investment Factor is being determined, minus (c) the capital
losses, realized or unrealized, charged against those assets during the
valuation period, minus (d) any amount charged against each division for
taxes, or any amount we set aside during the valuation period as a reserve
for taxes attributable to the operation or maintenance of each division.
(2) is the value of the assets in the division at the end of the preceding
valuation period.
(3) is a charge not to exceed .00178083% for each day in the valuation period.
This corresponds to .65% per year for mortality and expense risks.
An investment advisory fee is considered in calculating item (1).
Expense and mortality results of this plan shall not adversely affect the Net
Investment Factor to be used in computing the dollar amount of variable benefits
or other contractual payments or values of this certificate.
Monthly Deduction - The monthly deduction for a certificate month shall be equal
to the cost of insurance (as described below) and the cost of additional
benefits provided by rider for the certificate month.
The monthly deduction for a certificate month will be allocated among the
General Account and the divisions of Separate Account D in the same proportion
that the Accumulation Value in the General Account less any debt and the
Accumulation Value in each division bears to the total Accumulation Value of the
certificate, less any debt, at the beginning of the certificate month.
Page 15
<PAGE>
CERTIFICATE VALUES (CONTINUED)
Cost of Insurance - The cost of insurance for the Insureds is determined on a
monthly basis. The cost of insurance is determined separately for the Initial
Specified Amount and each subsequent increase in Specified Amount. The cost of
insurance is calculated as (1), multiplied by the result of (2) minus (3),
where:
(1) is the cost of insurance rate as described in the Cost of Insurance Rates
provision.
(2) is the Death Benefit at the beginning of the certificate month, divided by
1.00327374.
(3) is the Accumulation Value at the beginning of the certificate month, prior
to the monthly deduction for the cost of insurance.
If the Death Benefit Option is Option I and there have been increases in the
Specified Amount then the Accumulation Value shall be first considered a part of
the Initial Specified Amount. If the Accumulation Value exceeds the Initial
Specified Amount, it shall then be considered a part of the additional Specified
Amounts resulting from increases in the order of such increases.
Cost of Insurance Rates - The monthly cost of insurance rate is based on the
sex, issue age, certificate. year rating classes of the Insureds, and Specified
Amount. Monthly cost of insurance rates will be determined by us based upon
future expectations, including charges for mortality experience, amortization of
sales charges and other administrative charges, and on rules and standards on
file with the New York Insurance Department.
Changes in the monthly cost of insurance rates will be based upon changes in
future expectations as to investment earnings, mortality experience,
persistency, expenses, and on rules and standards on file with the New York
Insurance Department. Any change in cost of insurance rates will apply to all
individuals of the same classes as the Insureds. The rating classes will be
determined separately for the Initial Specified Amount and for any increase in
Specified Amount that requires evidence of insurability.
We will consider changes in the cost of insurance rates at least every five
years and when cost of insurance rates for new issues change. However, the cost
of insurance rates can never be greater than those shown in the Table of Monthly
Guaranteed Cost of Insurance Rates on Page 4.
Such guaranteed maximum rates are based on the 1980 CSO Male or Female, Smoker
or Nonsmoker Mortality Tables with appropriate increases for rated risks.
Page 16 ##########
<PAGE>
CERTIFICATE VALUES (CONTINUED)
Cost of Insurance Discounts - There will be a non-guaranteed cost of insurance
discount that will be calculated at the beginning of each certificate year. The
discount will be a monthly amount that is subtracted from the monthly cost of
insurance charge that is normally calculated. This discount may be suspended at
any time. You will be notified if the discount is suspended. The discount is
calculated as (1) multiplied by the result of (2) minus (3) minus (4), but not
less than zero, where:
(1) is a factor that varies by Specified Amount as follows:
<TABLE>
<CAPTION>
Specified Amount Factor
<S> <C>
Under $5 Million .0001250
$5 Million - $9.999 Million .0002500
$10 Million - $14.999 Million .0003750
Over $15 Million .0004583
</TABLE>
(2) is the Accumulation Value at the beginning of the certificate year.
(3) is the Guideline Single Premium at issue, under Section 7702 of the
Internal Revenue Code of 1985, as amended, entitled "Life Insurance
Contract Defined", increased on a pro rata basis for any increase in
Specified Amount.
(4) is the outstanding Type A loan balance at the beginning of the certificate
year.
The discount will be allocated among the General Account and divisions of
Separate Account D using the same percentages used to allocate net premiums.
Cash Value - The Cash Value is equal to the Accumulation Value less a Surrender
Charge.
Continuation of Insurance - In the event Planned Periodic Premium payments are
not continued or if there are changes of Death Benefit Options, mortality
deductions, deductions for additional benefit riders, withdrawals, or
certificate loans, as well as varying investment results, insurance coverage
under this certificate and any benefits provided by rider will be continued
until the Cash Value, less any debt, is insufficient to cover the monthly
deduction, as provided in the Grace Period provision. This provision shall not
continue the certificate beyond the Maturity Date nor continue any rider beyond
the date of its termination, as provided in the rider. If the Cash Value is
sufficient to continue this certificate to the Maturity Date, then any remaining
Surrender Value will be paid to you if either Insured is then living.
Insufficient Cash Value - If the Cash Value less any debt on a monthly
anniversary day is insufficient to cover the monthly deduction for the month
following such monthly anniversary day, the certificate shall terminate as
provided in the Grace Period provision. Any deduction for the cost of
insurance after termination of insurance shall not be considered a reinstatement
of the certificate nor a waiver by us of the termination. Any such deduction
shall be credited to the Cash Value as of the date of the deduction.
Page 17
<PAGE>
CERTIFICATE VALUES (CONTINUED)
Withdrawal of Cash Value (Withdrawal) - Upon written request you may make a
withdrawal from this certificate. Any withdrawal is subject to the following
conditions:
(1) The amount withdrawn may not exceed the Cash Value less any outstanding
debt.
(2) The minimum amount that may be withdrawn is $5,000.
(3) A charge equal to $100 will be deducted from the amount of each withdrawal.
(4) The Accumulation Value will be reduced by the sum of the withdrawal and a
pro rata portion of the Surrender Charge in effect on the date of the
withdrawal. The remaining Accumulation Value and schedule of surrender
charges will be determined by multiplying each of these values by a
numerical factor. This numerical factor is equal to
Amount of Withdrawal
1 - [----------------------------------------]
Cash Value Immediately Before Withdrawal
(5) The Death Benefit will be reduced by an amount equal to the reduction in
the Accumulation Value. This will result in a reduction of the Specified
Amount if the Death Benefit is Option I by an amount equal to the reduction
in the Accumulation Value. The Specified Amount remaining in force after
any withdrawal must be at least $500,000.
You may allocate the withdrawal among the General Account and the divisions of
Separate Account D. If you do not specify the allocation, then the withdrawal
will be allocated among the General Account and the divisions of Separate
Account D in the same proportion that the Accumulation Value in the General
Account, less any debt, and the Accumulation Value in each division bears to the
total Accumulation Value of the certificate, less any debt, on the date of the
withdrawal.
Surrender - Upon written request you may surrender this certificate at any time
during the lifetime of either Insured and before the Maturity Date. The amount
payable on surrender of this certificate shall be the Surrender Value. If this
certificate is surrendered, all insurance in force under this certificate shall
terminate on the monthly anniversary day next following our receipt of the
surrender request. We reserve the right to defer payment for the period
permitted by law, but not more than six months from the date written request for
surrender is received by us.
If surrender is requested under this section within 30 days after a certificate
anniversary, the Cash Value shall not be less than the Cash Value on that
anniversary, less any certificate loans or withdrawals made on or after such
anniversary.
Surrender Charge - The Surrender Charge is calculated by multiplying the
surrender factor by the total premiums paid in the first certificate year.
The surrender factor will vary by certificate year according to the table shown
on Page 3A. The surrender factor will not be altered by lapse and subsequent
reinstatement of the certificate.
Page 18
<PAGE>
CERTIFICATE VALUES (CONTINUED)
Basis of Computations - Minimum Cash Values and Reserves in the General Account
are based on the 1980 CSO Male or Female, Smoker or Nonsmoker Mortality Tables
with interest at 4% per year.
The method used in computing Cash Values and Reserves in Separate Account D is
in accordance with actuarial procedures that recognize the variable nature of
Separate Account D. The method used is such that if the Net Investment Factor,
less one, for all divisions of Separate Account D, at all times from the
Certificate Date, is equal to an effective annual interest rate of 4%, then the
Cash Values and Reserves in Separate Account D will be at least equal to the
minimum Cash Values and Reserves, which would have been required by New York
state law, of an equivalent certificate in which all net premiums have been
allocated to the General Account.
Minimum Values - All values under this certificate are not less than the values
required by New York state law. A detailed statement of the method of
computation of Cash Values under this certificate has been filed with the New
York Insurance Department.
SEPARATE ACCOUNT PROVISIONS
Separate Account - The variable benefits under this certificate are provided
through investments in Separate Account D. We established Separate Account D as
a separate investment account to support variable life insurance contracts. We
will not allocate assets to Separate Account D to support the operation of any
contracts or certificates that are not variable life insurance.
The assets of Separate Account D are owned by us. However, these assets are not
part of our General Account. Income, gains and losses, whether or not realized,
from assets allocated to Separate Account D will be credited to or charged
against the account without regard to our other income, gains or losses.
Assets equal to the reserves and other liabilities of Separate Account D will
not be charged with liabilities that arise from any other business we may
conduct. Such assets shall not be available to general creditors of ours in the
event of our insolvency to the full extent permitted by applicable law. We shall
have the right to transfer to our General Account any assets of Separate Account
D which are in excess of such reserves and other certificate liabilities.
Separate Account D is registered with the Securities and Exchange Commission as
a unit investment trust under the Investment Company Act of 1940. Separate
Account D is also subject to the laws of the State of New Jersey which regulate
the operations of insurance companies incorporated in New Jersey. The investment
policy of Separate Account D will not be changed without the approval of the
Insurance Commissioner of New Jersey. The approval process is on file with the
New York Insurance Department.
Page 19
<PAGE>
SEPARATE ACCOUNT PROVISIONS (CONTINUED)
Divisions - Separate Account D has several divisions. Each division will buy
shares of a separate series of Chubb Series Trust. Each series represents a
separate investment portfolio of Chubb Series Trust. Divisions of Separate
Account D are shown on Page 3. You will determine the percentage of net
premiums which will be allocated to each division.
Income, gains and losses, whether or not realized, from the assets of Separate
Account D are credited to or charged against that division without regard to
income, gains or losses in other divisions of Separate Account D or in the
General Account.
We will value the assets of each division of Separate Account D at the end of
each valuation period. A valuation period is the period between two successive
valuation dates. A valuation date is each day that the New York Stock Exchange
is open for business or any other day in which there is material change in the
value of the assets in Separate Account D.
Transfers - You may transfer amounts between the General Account and the
divisions of Separate Account D by sending a written request to us. The total
amount transferred must be at least $1,000. No amounts under $1,000 may be
transferred out of any division of Separate Account D or the General Account
unless such lesser amount constitutes the entire balance. A transfer charge
equal to $100 will be imposed each time amounts are transferred, except with
respect to certificate loans. The transfer charge will be deducted from the
amount that is transferred. We will make transfers so that the Accumulation
Value on the date of transfer will not be affected by the transfer except to the
extent of the transfer charge. We may revoke or modify the transfer privilege at
any time, including the minimum amount transferable and the transfer charge.
As long as any portion of the certificate's Accumulation Value is allocated to a
division of Separate Account D, the certificate's Accumulation Value and Cash
Value will reflect the investment performance of the chosen division(s) of
Separate Account D. The Death Benefit may also reflect the performance of the
chosen division(s) of Separate Account D.
At any time, you may transfer 100% of the certificate's Accumulation Value to
the General Account. While 100% of the certificate's Accumulation Value is
allocated to the General Account, minimum benefits for the certificate will be
fixed and guaranteed.
No transfer charge will be imposed for a transfer of all Accumulation Value in
Separate Account D to the General Account. However, any transfer from the
General Account to the division(s) of Separate Account D will be subject to the
transfer charge.
Page 20
<PAGE>
SEPARATE ACCOUNT PROVISIONS (CONTINUED)
Addition, Deletion, or Substitution of Investments - We reserve the right,
subject to compliance with applicable law, to make additions to, deletions from,
or substitutions for the shares of a series that are held by Separate Account D
or that Separate Account D may purchase. We reserve the right to eliminate the
shares of any series of Chubb Series Trust and to substitute shares of another
series of Chubb Series Trust or of another open-end, registered investment
company, if the shares or series are no longer available for investment or if in
our judgement, further investment in any eligible series should become
inappropriate in view of the purposes of the certificate. We will not substitute
any shares attributable to your interest in a division of Separate Account D
without notice to you and prior approval of the Securities and Exchange
Commission, to the extent required by the Investment Company Act of 1940. This
shall not prevent Separate Account D from purchasing other securities for other
series or classes of certificates, or from permitting conversation between
series or classes of certificates or contracts on the basis of requests made by
certificate owners.
We reserve the right to establish additional divisions of Separate Account D,
each of which would invest in a new series of Chubb Series Trust or in shares of
another open-end, registered investment company. We also reserve the right to
eliminate existing divisions of Separate Account D.
If we consider it to be in the best interest of persons having voting privileges
under the certificates, Separate Account D may be operated as a management
company under the Investment Company Act of 1940; or it may be deregistered
under that Act in the event registration is no longer required or it may be
combined with other separate accounts.
CERTIFICATE LOANS
Certificate Loans - After the first certificate anniversary, a loan will be
granted upon the sole security of the portion of the certificate's Cash Value
required to repay the loan. The maximum loan amount is 90% of this certificate's
Cash Value on the date of loan, less any debt. Outstanding debts against this
certificate will be deducted from the amount available for loan. Any debt will
be deducted from the proceeds payable at the surviving Insured's death, on
maturity, or on surrender.
You may allocate the certificate loan among the General Account and the
divisions of Separate Account D. If you do not specify the allocation, then the
certificate loan will be allocated among the General Account and the divisions
of Separate Account D in the same proportion that the Accumulation Value in the
General Account, less any debt, and the Accumulation Value in each division
bears to the total Accumulation Value of the certificate, less any debt, on the
date of the certificate loan. Accumulation Value in each division equal to the
certificate loan allocated to each division will be transferred to the General
Account and reduce the Accumulation Value in that division. If loan interest is
not paid when due, an amount of Accumulation Value equal to the loan interest
will also be transferred.
If the certificate debt exceeds the certificate's Accumulation Value in the
General Account, we will transfer Accumulation Value equal to the excess debt
from the divisions of Separate Account D to the General Account as security for
the excess debt. The amount transferred will be allocated among the divisions in
the same proportion that the Accumulation Value in each division bears to the
certificate's total Accumulation Value in all divisions of Separate Account D.
Page 21
<PAGE>
CERTIFICATE LOANS (CONTINUED)
Types of Certificate Loans (Type A and Type B) - There are two (2) types of
certificate loans which we will grant to you - Type A and Type B. The type of
loan which we will grant depends upon the amount of unloaned Type A balance
available at the time the loan is taken. The unloaned Type A balance is the Cash
Value, less the threshold, and less the sum of any outstanding Type A loans as
defined below. The threshold is the Guideline Single Premium for this
certificate at issue as defined in Section 7702 of the Internal Revenue Code of
1986, as amended, entitled "Life Insurance Contract Defined". If the Specified
Amount increases, the threshold will be increased to the threshold at issue
times the ratio of the largest Specified Amount ever existing on the certificate
to the Initial Specified Amount. If the Specified Amount decreases, the
threshold will not change.
A Type A loan is a certificate loan granted by us when the unloaned Type A
balance before the loan is taken exceeds the loan requested.
A Type B loan is a certificate loan granted by us when the unloaned Type A
balance before the loan is taken is less than or equal to zero.
When the unloaned Type A balance before the loan is taken exceeds zero, but is
less than the loan requested a Type A loan equal to the unloaned Type A balance
will be granted by us. The remainder of the requested loan will be a Type B
loan.
We will grant a Type A loan first before a Type B loan. Once a certificate
loan is granted, it remains a Type A or a Type B until it is repaid.
Certificate Loan Interest - The interest charged by us on a certificate loan
depends upon the type of loan granted.
On a Type A loan we will charge interest at an effective annual rate of 6.0%.
On a Type B loan we will charge interest at an effective annual rate of 6.85%.
Interest accrues on a daily basis from the date of the loan and is compounded
annually. Interest is due and payable at the end of each certificate year.
Interest unpaid on a certificate anniversary is added to and becomes part of the
loan principal and bears interest on the same rate.
Certificate Loan Repayment - Any debt may be repaid, in whole or in part, at any
time while this certificate is in force. Repayments will be used to reduce
certificate loans until fully paid in the following order:
(1) Any or all Type B loans; then
(2) Any or all Type A loans.
When a loan repayment is made, Accumulation Value securing the debt in the
General Account equal to the loan repayment will be allocated among the General
Account and divisions of Separate Account D using the same percentages used to
allocate net premiums.
If total certificate debt exceeds the Cash Value at any time, we will send a
notice by mail to you, and to any assignee of record, at the last known address.
If the excess is not paid within 61 days from the date the notice is mailed, the
certificate will terminate without value.
Page 21
<PAGE>
PAYMENT OPTIONS
Election of an Option - Any proceeds to be paid under this certificate may be
paid as an income under any one of the options below. The election of an option
or change of prior election must be made in writing to us at our Service Office.
If an option is not chosen by you prior to the death of the surviving Insured,
the primary Beneficiary may make such election.
Unless we agree otherwise, any such payments will be made only to a natural
person taking in his own right. An option may be elected only if the amount of
the proceeds is $2,000 or more. We may change the interval of payments to 3, 6,
or 12 months, if necessary to increase the guaranteed payments to at least
$20.00 each.
Option A - Installments of a Specified Amount - Payments of an agreed amount to
be made each month until the proceeds and interest are exhausted.
Option B - Installments for a Specified Period - Payments to be made each month
for an agreed number of years.
Option C - Life Income - Payments to be made each month for the lifetime of the
Payee. It is guaranteed that payments will be made for a minimum of 10, 15, or
20 years as agreed upon. No election will default to payments made for 20 years.
Option D - Interest - Payment of interest on the proceeds held by us. The amount
of interest payment is calculated at the compound rate of 3% per year. Interest
payments will be made in 12-, 6-, 3-, or 1-month intervals as agreed upon.
Supplementary Contract - When the proceeds of this certificate become payable, a
supplementary contract setting forth the terms of the option chosen will be
issued to the Payee. The first payment under Option A, B, or C shall be payable
on the effective date of such option. The first payment under Option D shall be
payable at the end of the first agreed payment interval.
Interest - The interest rate for Options A, B, and D will not be less than 3%
per year. The interest rate for Option C will not be less than 2 1/2% per year.
Interest in addition to that stated may be paid or credited from time to time
under any option but only at our sole discretion.
Withdrawal Value - Unless otherwise stated in the election of an option, the
Payee shall have the right to receive the Withdrawal Value under that option.
For Options A and D the Withdrawal Value shall be any unpaid balance of proceeds
plus interest.
For Option B the Withdrawal Value shall be the commuted value of the remaining
payments. Such value will be calculated on the same basis as the original
payments.
For Option C the Withdrawal Value shall be the commuted value of the remaining
payments. Such value will be calculated on the same basis as the original
payments. To receive this value, the Payee must submit evidence of insurability.
Such evidence must be satisfactory to us. Otherwise, the Withdrawal Value shall
be the commuted value of any remaining guaranteed payments. In this event the
payments will be resumed at the end of the guaranteed period if the Payee should
be alive on that date. The payments will then continue for the lifetime of the
Payee.
Under any of these options, the Payee shall have the right to receive the
Withdrawal Value in partial amounts. However, the partial amounts shall not be
less than the smaller of the Withdrawal Value or $100.
Page 23 ##########
<PAGE>
PAYMENT OPTIONS (CONTINUED)
Death of Payee - If the Payee dies before the proceeds are exhausted or the
prescribed payments made, a final payment will be made in one sum to the estate
of the last surviving Payee. The amount to be paid will be calculated as
described for the applicable option in the Withdrawal Value provision.
Limitation on Rights of Payee and Claims of Creditors
- - Neither the amount retained under an option nor any payment made under an
option can be assigned or pledged. To the extent permitted by law such amounts
or payments shall not be subject to claims of creditors or legal process.
Page 24
<PAGE>
SETTLEMENT OPTIONS
TABLES OF MONTHLY INSTALLMENTS UNDER OPTION B OR C
Monthly installments are shown for each $1,000 of net proceeds applied. The
ages shown are ages nearest birthday when the first monthly installment is
payable.
OPTION B TABLE
INSTALLMENTS FOR A SPECIFIED PERIOD
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Years Monthly Years Monthly Years Monthly Years Monthly Years Monthly
Installment Installment Installment Installment Installment
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.47 7 $13.16 13 $7.71 19 $5.73 25 $4.71
2 42.86 8 11.68 14 7.26 20 5.51 26 4.59
3 28.99 9 10.53 15 6.87 21 5.32 27 4.48
4 22.06 10 9.61 16 6.53 22 5.15 28 4.37
5 17.91 11 8.86 17 6.23 23 4.99 29 4.27
6 15.14 12 8.24 18 5.96 24 4.84 30 4.18
Multiply the monthly installment by 11.84 for annual, by 5.96 for semi-annual or by 2.99 for quarterly
installments.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
OPTION C TABLE
LIFE INCOME
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Attained Attained
Age of Payee MONTHLY INSTALLMENTS Age of Payee MONTHLY INSTALLMENTS
- ----------------------------------------------------------------------------------------------
----------GUARANTEED---------- ----------GUARANTEED----------
Male Female 10 Years 15 Years 20 Years Male Female 10 Years 15 Years 20 Years
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 or 2l or
Under Under $2.83 $2.82 $2.81 51 56 $4.60 $4.44 $4.24
17 22 2.85 2.84 2.84 52 57 4.69 4.52 4.30
18 23 2.88 2.87 2.86 53 58 4.79 4.60 4.36
19 24 2.90 2.89 2.88 54 59 4.90 4.69 4.41
20 25 2.93 2.92 2.91 55 60 5.01 4.77 4.47
21 26 2.95 2.95 2.93 56 61 5.12 4.86 4.53
22 27 2.98 2.97 2.96 57 62 5.23 4.94 4.59
23 28 3.01 3.00 2.99 58 63 5.35 5.03 4.64
24 29 3.04 3.03 3.02 59 64 5.48 5.12 4.70
25 30 3.08 3.07 3.05 60 65 5.61 5.21 4.75
26 31 3.11 3.10 3.08 61 66 5.74 5.30 4.80
27 32 3.14 3.13 3.11 62 67 5.87 5.39 4.85
28 33 3.18 3.17 3.15 63 68 6.01 5.48 4.90
29 34 3.22 3.20 3.18 64 69 6.16 5.56 4.94
30 35 3.26 3.24 3.22 65 70 6.30 5.65 4.98
31 36 3.30 3.28 3.25 66 ?1 6.45 5.73 5.02
32 37 3.34 3.32 3.29 67 72 6.60 5.82 5.05
33 38 3.39 3.36 3.33 68 73 6.76 5.90 5.09
34 39 3.43 3.41 3.37 69 74 6.91 5.97 5.12
35 40 3.48 3.45 3.41 70 75 7.07 6.05 5.14
36 41 3.53 3.50 3.45 71 76 7.23 6.12 5.17
37 42 3.59 3.55 3.50 72 77 7.38 6.18 5.19
38 43 3.64 3.60 3.54 73 78 7.54 6.24 5.20
39 44 3.70 3.65 3.59 74 79 7.69 6.30 5.22
40 45 3.76 3.71 3.64 75 80 7.84 6.35 5.23
41 46 3.82 3.77 3.69 76 81 7.98 6.39 5.24
42 47 3.88 3.82 3.74 77 82 8.13 6.43 5.25
43 48 3.95 3.88 3.79 78 83 8.26 6.47 5.26
44 49 4.02 3.95 3.84 79 84 8.39 6.50 5.26
45 50 4.09 4.01 3.90 80 or 85 or 8.51 6.53 5.27
46 51 4.17 4.08 3.95 Over Over
47 52 4.25 4.15 4.01
48 53 4.33 4.22 4.07
49 54 4.42 4.29 4.12
50 55 4.50 4.37 4.18
Multiply the monthly installment by 11.80 for annual, by 5.93 for semi-annual or by 2.98 for
quarterly installments.
</TABLE>
<PAGE>
ENDORSEMENTS:
CERTIFICATE OF GROUP JOINT AND LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE
Adjustable Death Benefit Payable On The Death Of The Survivor Of The Joint
Insureds.
Premium Payments May be Made At Any Time And, Within Limits, In Any Amount.
The Specified Amount May Be Increased Or Decreased And
Death Benefit Option May Be Changed.
The Maturity Date May Be Changed Subject To Limitations In The
Certificate Surrender Value, If Any, Payable On Maturity Date.
Additional Benefits, If Any, As Indicated On Page 3.
Some Benefits Reflect Investment Results.
Non-Participating - No Dividends
<PAGE>
APPLICATION FOR
GROUP INSURANCE POLICY
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, P.O. Box 216, Parsippany, NJ 07054-0216
Service Office: One Granite Place, P.O. Box 515, Concord, NH 03302-0515.
(800) 258-3648
Application is hereby made to
THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA
by
The Colonial Heritage Group Insurance Trust
- --------------------------------------------------------------------------------
whose main office address is 10 State Street Anytown, NY 12345
____________________________________________________
________________________________________________________________________________
for Group Policy No. VUL-2000 (Group Joint and Last Survivor Flexible
____________________________________________________________
Premium Variable Life Insurance Policy.
________________________________________________________________________________
Said Group Policy is hereby approved and the terms thereof are hereby accepted.
This Application is executed in duplicate, one counterpart being attached to
said Group Policy and the other being returned to The Colonial Life Insurance
Company of America.
It is agreed that this Application supercedes any previous application for said
Group Policy.
Executed at Anytown, NY this 1st day of June , 1994.
____________________ ________ __________
(City and state)
/s/ Jim Barber The Colonial Heritage Group Insurance Trust
_______________________________ ___________________________________________
Witness Full Name of Applicant, if a Corporation
state name accurately.
By: Joe Johnson, Vice President
_______________________________________
Signature and Title
This Copy is to Remain Attached to the Policy,
Farm 9-89117
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
APPLICATION FOR
GROUP INSURANCE POLICY
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, P.O. Box 216, Parsippany, NJ 07054-0216
Service Office: One Granite Place,
P.O. Box 515, Concord, NH 03302-0515e
(800) 258-3648
Application is hereby made to
The COLONIAL LIFE INSURANCE COMPANY OF AMERICA
by
________________________________________________________________________________
whose main office address is ___________________________________________________
________________________________________________________________________________
for Group Policy No.___________________________________________________________
Said Group Policy is hereby approved and the terms thereof are hereby accepted.
This Application is executed in duplicate, one counterpart being attached to
said Group Policy and the other being returned to The Colonial Life
Insurance Company of America.
It is agreed that this Application supercedes any previous application for said
Group Policy.
Executed at ______________________ this_______ day of_________________ , 1994.
(City and State)
__________________________________ ________________________________________
Witness Full Name of Applicant, if a corporation
state name accurately.
By:_____________________________________
Signature and Title
This Copy Is to be Returned to The Colonial Life Insurance Company of America.
Farm 9-89i17
<PAGE>
Exhibit 1(e) (iii)
FORMS OF RIDERS
<PAGE>
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, Parsippany, N.J. 07054
Service Center: One Granite Place, P.O. Box 2086, Concord, New Hampshire 03302
(800) 997-4499
GUARANTEED DEATH BENEFIT RIDER
Effective Date -
This Rider is part of the certificate to which it is attached. It takes effect
on the Certificate Date of the certificate unless a later effective date is
shown above. In this rider, "we", "us", or "our" means The Colonial Life
Insurance Company of America; "you" means the Owner of the certificate; and
"Insured" means the person named on Page 3 of the certificate.
Consideration - In return for the payment of the monthly deductions and receipt
of any application for this rider, we will provide the benefit described in this
rider.
Benefit - We guarantee that the death benefit of the certificate will be no less
than the Specified Amount, regardless of the investment experience of the
divisions within the Separate Account, provided that the cumulative minimum
premium requirements have been satisfied.
This Rider has no loan value and no surrender value.
Cumulative Minimum Premium Requirement - On each monthly anniversary day, we
will determine if the cumulative minimum premium requirement for this rider has
been met. The cumulative minimum premium requirement is met provided that (a) is
greater than or equal to (b), where:
(a) is the sum of all previous premium payments under the certificate less
any certificate loans or withdrawals; and
(b) is the minimum premium requirement for this rider, as shown on Page 3 of
the certificate, divided by twelve. multiplied by the number of completed
certificate months.
If this requirement has been met, the certificate is guaranteed to remain in
force during the next certificate month. If this requirement is not met, we will
notify you of the premium payments required in order to continue benefits under
this rider. A grace period of 61 days will be provided. If the necessary
premiums are not received during this grace period, this rider will terminate
without value.
Any increase in the Specified Amount will require an increase in the minimum
premium. The cumulative minimum premium requirement will be the sum of the
minimum premium requirements for the Initial Specified Amount and each
respective increase to the Specified Amount. The portion of the minimum premium
associated with any increase in the Specified Amount will be based on the
attained age of the Insured as of the date of increase.
Monthly Deduction - The monthly deduction for this rider will be (a), multiplied
by (b), divided by $1,000, where:
(a) is the Specified Amount of the certificate; and
(b) is $0.01.
Termination - This Rider will cease as soon as one of the following occurs:
(1) The cumulative minimum premium requirement remains unsatisfied at the end
of the Grace Period.
(2) The certificate is surrendered, exchanged, or lapsed.
(3) The Maturity Date of the certificate is attained.
(4) We receive a proper written request to terminate this rider.
/S/ John F. Swope /s/ Frederick H. Condon
___________________ ___________________
President Secretary
P94-93N ##########
<PAGE>
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, Parsippany, N.J. 07054
Service Center: One Granite Place, P.O. Box 2086, Concord, New Hampshire 03302
(800) 997-4499
JOINT AND LAST SURVIVOR
GUARANTEED DEATH BENEFIT RIDER
Effective Date -
This Rider is part of the certificate to which it is attached. It takes effect
on the Certificate Date of the certificate unless a later effective date is
shown above. In this rider, we, us, or "our" means The Colonial Life Insurance
Company of America; "you" means the Owner of the certificate; and "Insureds"
means the persons named on Page 3 of the certificate.
Consideration - In return for the payment of the monthly deductions and receipt
of any application for this rider, we will provide the benefit described in this
rider.
Benefit - We guarantee that the death benefit of the certificate will be no less
than the Specified Amount, regardless of the investment experience of the
divisions within the Separate Account, provided that the cumulative minimum
premium requirements have been satisfied.
This Rider has no loan value and no surrender value.
Cumulative Minimum Premium Requirement - On each monthly anniversary day, we
will determine if the cumulative minimum premium requirement for this rider has
been met. The cumulative minimum premium requirement is met provided that (a) is
greater than or equal to (b), where:
(a) is the sum of all previous premium payments under the certificate less
any certificate loans or withdrawals; and
(b) is the minimum premium requirement for this rider, as shown on Page 3 of
the certificate, divided by twelve, multiplied by the number of completed
certificate months.
If this requirement has been met, the certificate is guaranteed to remain in
force during the next certificate month. If this requirement is not met, we will
notify you of the premium payments required in order to continue benefits under
this rider. A grace period of 61 days will be provided. If the necessary
premiums are not received during this grace period, this rider will terminate
without value.
Any increase in the Specified Amount will require an increase in the minimum
premium. The cumulative minimum premium requirement will be the sum of the
minimum premium requirements for the Initial Specified Amount and each
respective increase to the Specified Amount. The portion of the minimum premium
associated with any increase in the Specified Amount will be based on the
attained joint equal age of the Insureds as of the date of increase.
Monthly Deduction - The monthly deduction for this rider will be (a), multiplied
by (b), divided by $1,000, where:
(a) is the Specified Amount of the certificate; and
(b) is $0.01.
Termination - This Rider will cease as soon as one of the following occurs:
(1) The cumulative minimum premium requirement remains unsatisfied at the end
of the Grace Period.
(2) The certificate is surrendered, exchanged, or lapsed.
(3) The Maturity Date of the certificate is attained.
(4) We receive a proper written request to terminate this rider.
/S/ John F. Swope /s/ Frederick H. Condon
___________________ ___________________
President Secretary
P94-94N ##########
<PAGE>
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, Parsippany, N.J. 07054
Service Center: One Granite Place, P.O. Box 2086, Concord, New Hampshire 03302
(800) 997-4499
JOINT AND LAST SURVIVOR
CERTIFICATE EXCHANGE OPTION RIDER
Effective Date -
This Rider is part of the certificate to which it is attached. It takes effect
on the Certificate Date of the certificate unless a later effective date is
shown above. In this rider, "we", "us", or "our" means The Colonial Life
Insurance Company of America; "you" means the Owner of the certificate; and
"Insureds" means the persons named on Page 3 of the certificate.
Consideration - In receipt of any application for this rider, we will provide
the benefit described in this rider.
Benefit - We will exchange the certificate for two individual certificates, one
on the life of each of the Insureds, subject to the conditions stated in this
rider.
Exchange Option Events - This option may be exercised only if one of the
following events occurs:
(1) A final divorce decree on the Insureds' marriage must be in effect for at
least 180 days but not more than one year, before an exchange takes place.
(2) The Federal Tax Law is changed, resulting in:
(a) the repeal of the unlimited marital deduction provision; or
(b) a reduction of at least 50% in the maximum federal estate tax
bracket.
This option may be exercised on or within 180 days after:
(1) A final divorce decree on the Insureds' marriage has been in effect for
180 days; or
(2) The effective date of the Federal Tax Law change as described above.
In addition, the Conditions for Exchange listed below must be met.
Conditions for Exchange -
(1) The certificate and this rider must be in force and not within the Grace
Period.
(2) The Owner of each new certificate must have an insurable interest in the
Insured's life.
(3) The Owner for each new certificate and the Insured must sign the
application for the new certificate.
(4) Your written request satisfactory to us must be received at the Home
Office on or within 180 days after the date an exchange option event occurs.
(5) Evidence of the exchange option event satisfactory to us must be received
at the Home Office on or within 180 days after the date an exchange option
event occurs.
(6) This certificate must be returned to us before the exchange date.
(7) This certificate, including any attached riders, will terminate on the
day before the exchange date. This date is the termination date.
(8) Both of the Insureds under this certificate must be living on the
exchange date.
(9) Any assignee must agree in writing to the exchange.
<PAGE>
New Certificates -
(1) Each new certificate will be for one half of this certificate's Specified
Amount.
(2) The exchange date will be this certificate's Monthly Anniversary Day
following receipt of your request for exchange. The Issue Date and
Certificate Date for each new certificate will be the exchange date.
(3) Each new certificate will be a whole life plan being issued by us on
the Certificate Date of the new certificate.
(4) Premiums for each new certificate will be based on our published rates on
the Certificate Date of the new certificate. The premiums will depend on
each new certificate's plan, initial specified amount, rating class, and the
Insured's attained age.
(5) The rating class for each new certificate will be the individual rating
class assigned to each Insured when this certificate was underwritten.
(6) Each new certificate will be subject to one half the amount of any
outstanding loans on this certificate. However, the outstanding loans on a
new certificate cannot exceed its loan value.
(7) The time periods in the Suicide and Incontestability provisions of each new
certificate will be measured from the Issue Date of this certificate.
(8) Each new certificate will be subject to any existing assignment of this
certificate.
Additional benefit riders will be available with each new certificate only with
our consent. Evidence of insurability at the Insured's attained age will be
required if additional benefit riders are requested. All riders on each new
certificate will be subject to our rules on the Certificate Date of the new
certificate.
Exchange Values - One half of the Accumulation Value of this certificate will be
allocated to each new certificate on the exchange date. This Rider has no cash
or loan value.
Termination - This Rider will cease as soon as one of the following occurs:
(1) One of the Insureds under this certificate dies.
(2) This certificate is surrendered, exchanged, or lapsed.
(3) We receive a proper written request to terminate this Rider.
/S/ John F. Swope /s/ Frederick H. Condon
___________________ ___________________
President Secretary
Form xxxxx ##########
<PAGE>
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, Parsippany, N.J. 07054
Service Center: One Granite Place, P.O. Box 2086, Concord, New Hampshire 03302
(800) 997-4499
AUTOMATIC INCREASE RIDER
Effective Date -
This Rider is part of the certificate to which it is attached. It takes effect
on the Certificate Date of the certificate unless a later effective date is
shown above. In this rider, "we", "us", or "our" means The Colonial Life
Insurance Company of America; "you" means the Owner of the certificate; and
"Insured" means the person named on Page 3 of the certificate.
Consideration - In return for the payment of the monthly deductions and receipt
of any application for this rider, we will provide the benefit described in this
rider.
Benefit - We will increase the Specified Amount of the certificate on the first
day of each new certificate year by an amount equal to a percentage of the
Specified Amount for the past certificate year.
Increase Percentage Factor - The increase percentage factor has been selected by
you and is shown on Page 3 of the certificate.
Expiry Date - The Expiry Date of this rider is shown on Page 3.
Monthly Deduction - The monthly deduction for this rider will be (a), multiplied
by (b), divided by $1,000, where:
(a) is the monthly rate for this rider, based on the age at issue, shown
on Page 3 of the certificate; and
(b) is the certificate's Specified Amount.
Maximum Amount of Increase - The maximum amount of all increases from the
operation of this rider will be equal to the smaller of (a) or (b), where:
(a) is three (3) times the sum of the Initial Specified Amount of the
certificate; and
(b) is $10,000,000.
Termination - This Rider will cease as soon as one of the following occurs:
(1) The monthly deduction for this rider remains unpaid at the end of the
Grace Period.
(2) The certificate is surrendered, exchanged, or lapsed.
(3) The maturity date of the certificate is attained.
(4) We receive a proper written request to terminate
this Rider.
(5) The amount of any increase in the Specified Amount of the certificate as
a result of the operation of this rider is less than $10,000.
(6) The maximum amount of increases permitted under this rider has been
attained.
(7) The Expiry Date for this Rider shown on Page 3 is attained.
/S/ John F. Swope /s/ Frederick H. Condon
___________________ ___________________
President Secretary
<PAGE>
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, Parsippany, N.J. 07054
Service Center: One Granite Place, P.O. Box 2086, Concord, New Hampshire 03302
(800) 997-4499
JOINT AND LAST SURVIVOR
AUTOMATIC INCREASE RIDER
Effective Date -
This Rider is part of the certificate to which it is attached. It takes effect
on the Certificate Date of the certificate unless a later effective date is
shown above. In this rider, "we", "us", or "our" means The Colonial Life
Insurance Company of America; "you" means the Owner of the certificate; and
"Insureds" means the persons named on Page 3 of the certificate.
Consideration - In return for the payment of the monthly deductions and receipt
of any application for this rider, we will provide the benefit described in this
rider.
Benefit - We will increase the Specified Amount of the certificate on the first
day of each new certificate year by an amount equal to a percentage of the
Specified Amount for the past certificate year.
Increase Percentage Factor - The increase percentage factor has been selected by
you and is shown on Page 3 of the certificate.
Expiry Date - The Expiry Date of this rider is shown on Page 3.
Monthly Deduction - The monthly deduction for this rider will be (a), multiplied
by (b), divided by $1,000, where:
(a) is the monthly rate for this rider, based on the joint equal age at
issue shown on Page 3 of the certificate; and
(b) is the certificate's Specified Amount.
Maximum Amount of Increase - The maximum amount of all increases from the
operation of this rider will be equal to the smaller of (a) or (b), where:
(a) is three (3) times the sum of the Initial Specified Amount of the
certificate; and
(b) is $10,000,000.
Termination - This Rider will cease as soon as one of the following occurs:
(1) The monthly deduction for this rider remains unpaid at the end of the
Grace Period.
(2) The certificate is surrendered, exchanged, or lapsed.
(3) The maturity date of the certificate is attained.
(4) We receive a proper written request to terminate this Rider.
(5) The amount of any increase in the Specified Amount of the certificate as
a result of the operation of this rider is less than $10,000.
(6) The maximum amount of increases permitted under this rider has been
attained.
(7) The Expiry Date for this Rider shown on Page 3 is attained.
/S/ John F. Swope /s/ Frederick H. Condon
___________________ ___________________
President Secretary
##########
<PAGE>
Exhibit 1(j)
APPLICATION
<PAGE>
[LOGO OF CHUBB LIFE AMERICA APPEARS HERE]
APPLICATION FOR
GROUP INSURANCE POLICY
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, P.O. Box 216, Parsippany, NJ 07054-0216
Service Office: One Granite Place, P.O. Box 515, Concord, NH 03302-0515 . (800)
258-3648
Application is hereby made to
THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA
by
- --------------------------------------------------------------------------------
whose main office address is____________________________________________________
________________________________________________________________________________
for Group Policy No.____________________________________________________________
Said Group Policy is hereby approved and the terms thereof are hereby accepted.
This Application is executed in duplicate, one counterpart being attached to
said Group Policy and the other being returned to The Colonial Life Insurance
Company of America.
It is agreed that this Application supercedes any previous application for said
Group Policy.
Executed at __________________________________ this ______day of _______, 1994.
(City and State)
______________ ______________________________________________________________
Witness Full Name of Applicant, if a Corporation state name accurately.
By:____________________________________________________________
Signature and Title
This Copy Is to Remain Attached to the Policy.
Form 9-89117
- --------------------------------------------------------------------------------
[LOGO OF CHUBB LIFE AMERICA APPEARS HERE]
APPLICATION FOR
GROUP INSURANCE POLICY
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, P.O. Box 216, Parsippany, NJ 07054-0216
Service Office: One Granite Place, P.O. Box 515, Concord, NH 03302-0515 . (800)
258-3548
Application is hereby made to
THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA
by
________________________________________________________________________________
whose main office address is____________________________________________________
________________________________________________________________________________
for Group Policy No.____________________________________________________________
Said Group Policy is hereby approved and the terms thereof are hereby accepted.
This Application is executed in duplicate, one counterpart being attached to
said Group Policy and the other being returned to The Colonial Life Insurance
Company of America.
It is agreed that this Application supercedes any previous application for said
Group Policy.
Executed at _____________________________ this ______ day of __________, 1994.
(City and State)
___________________________________ __________________________________________
Witness Full Name of Applicant, If a
Corporation state name accurately.
By:________________________________
Signature and Title
This Copy is to be Returned to The Colonial Life Insurance Company of America.
Form 9-89117
<PAGE>
[LOGO OF CHUBB LIFE AMERICA APPEARS HERE]
APPLICATION AND
SUBSCRIPTION AGREEMENT
- -------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, P.O. Box 216, Parsippany, NJ 07054-0216
Service Office: One Granite Place, P.O. Box 515, Concord, NH 03302-0515 . (800)
258-3648
The undersigned, hereinafter referred to as the "Member", hereby makes
application to The Colonial Life Insurance Company of America, hereinafter
referred to as the "Company", for participation under the Colonial Heritage
Group Insurance Trust, hereinafter referred to as the "Trust", to make available
to eligible Customers of the Member the plan of group insurance described below.
Eligibility requirements, for Customers of the Member seeking to apply for
coverage provided by the group plan, are defined in the Group Policy for such
plan as issued to the Trust.
The Member hereby subscribes to and agrees for itself and its Customers, who may
obtain insurance coverage under the Trust through the Member, to be bound by the
terms of the Trust. It is understood and agreed that, under the Trust, the
principal duty of the Trustee is to hold the Group Policy(ies) selected for the
Trust. The Trust which sets out all the rights, powers and duties of the Trustee
in detail, and the Group Policy(ies) held by the Trustee are available for
inspection by the Member during regular business hours at the main office of the
Trustee as stated below.
The Member acknowledges that by execution of this application the Member has no
liability to the Company or the Trustee except for the payment of any charges
associated with participation in the Trust.
The undersigned Member acknowledges and agrees to use its best efforts to
provide all eligible Customers with an opportunity to apply for insurance under
the plan(s) available, and that the coverage available shall be only that
coverage as provided under a group plan held by the Trust.
Notwithstanding the date of this application, the Member's participation in the
Trust will commence only if this application is accepted by an appointed
Administrator of the Company on behalf of the Trust, and then only upon the
insertion of an Effective Date on this Application by the Administrator.
The Member may withdraw from participation in the Trust and cancel its
participation in any group plan(s) at any time after thirty (30) days prior
written notice to the Trustee and the Company. Any group plan(s) of insurance
held by the Trust will remain in force and available to all Customers of the
Member who are currently insured or who have applied for insurance prior to the
cancellation date of the Member's participation.
It is hereby agreed that the Member shall provide the Company and the Trustee
with all records necessary for the efficient administration of the plan(s).
It is understood and agreed by the Member that the Trustee is not an insurance
company, nor does the Trustee have any obligation under any policy of insurance.
It is further understood and agreed that all claims for benefits provided by
insurance being applied for herein shall be promptly made and forwarded to the
Company on forms it accepts. Any benefits payable shall be made by the Company
only to the extent of, and in strict accordance with, the terms of the
policy(ies) issued.
- --------------------------------------------------------------------------------
Requested Plan:_______________________________________________________________
- --------------------------------------------------------------------------------
_____________________________________ By___________________________
Name of Member Signature
_____________________________________ ______________________________________
Street Address Suite No. Print Name and Title
_____________________________________ ______________________________________
City State Zip Date
For The Colonial Life Insurance Company
of America
_____________________________________ Accepted By ___________________________
Name of Trustee Signature
_____________________________________ _______________________________________
Street Address Suite No. Print Name and Title
_____________________________________ _______________________________________
City State Zip Date
- --------------------------------------------------------------------------------
Group Plan Number: ________________ Effective Date:_________________________
- --------------------------------------------------------------------------------
Form 9-89118
<PAGE>
[LOGO OF CHUBB LIFE AMERICA APPEARS HERE]
APPLICATION FOR GROUP
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
- -------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, P.O. Box 216, Parsippany, NJ 07054-0216
Service Office: One Granite Place, P.O. Box 2086, Concord, NH 03302-2086 . (800)
997-4499
If Single Life Insurance is being applied for, then complete all requested
information for Proposed Insured A only. If Joint and Last Survivor Life
Insurance is being applied for, then complete all requested information for both
Proposed Insured A and Proposed Insured B.
PART ONE
________________________________________________________________________________
Section A - Personal Information
Proposed Insured-A
1. Print Name (Last, First & Middle)
____________________________________________
2. Sex: [_] Male [_] Female
3. Birthdate: __/__/__
4. Age (Nearest Birthday):_____________________
5. U.S. Citizen: [_] Yes [_] No
6. Permanent Resident: [_] Yes [_] No
7. Birthplace (State/Country):_________________
8. Social Security/Tax ID Number:______________
9. Driver License Number:______________________
10. Home Address:
Street_________________________ Apt.____________
City________________ State_________ Zip_________
Prior Address (Within Last 2 Yrs.):
Street_______________________ Apt.______________
City_____________ State________ Zip_____________
11. Home Telephone: (____)_____________________
12. Business Telephone:(____)__________ Ext.___
13. Occupation and Duties:
___________________________________________
14. Length of Current Employment:______________
Proposed Insured-B (If Applicable)
1. Print Name (Last, First & Middle)
____________________________________________
2. Sex: [_] Male [_] Female
3. Birthdate: __/__/__
4. Age (Nearest Birthday):_____________________
5. U.S. Citizen: [_] Yes [_] No
6. Permanent Resident: [_] Yes [_] No
7. Birthplace (State/Country):_________________
8. Social Security/Tax ID Number:______________
9. Driver License Number:______________________
10. Home Address:
Street_____________ Apt.___________________
City______________ State ________ Zip _____
Prior Address (Within Last 2 Yrs.):
Street _____________ Apt._________________
City_______________ State _______ Zip _____
11. Home Telephone: (___)______________________
12. Business Telephone: (___)__________ Ext.___
13. Occupation and Duties:
___________________________________________
14. Length of Current Employment:_______________
CASH VALUES MAY INCREASE OR DECREASE IN ACCORDANCE WITH THE EXPERIENCE OF THE
SEPARATE ACCOUNT (SUBJECT TO ANY SPECIFIED MINIMUM GUARANTEES). THE DEATH
BENEFIT MAY BE VARIABLE OR FIXED UNDER SPECIFIED CONDITIONS.
Form 9-89075NY Page
<PAGE>
Proposed Insured-A
15. Employer:________________________________________
16. Business Address:
Street __________________________________________
City ___________________ State ________ Zip _____
17. List income for past year:
Year______________________________________
Earned Income $___________________________
Unearned Income $ ________________________
Source of Unearned Income __________________
Proposed Insured-B (If Applicable)
15. Employer:_________________________________
16. Business Address:
Street ___________________________________
City _________ State ________ Zip ___________
17. List income for past year:
Year_________________________________________
Earned Income $ ______________________________
Unearned Income $ ____________________________
Source of Unearned Income ___________________
- -------------------------------------------------------------------------------
Section B - Life Insurance Applied For
1. Certificate Description
Plan of Insurance: ___________ Initial Specified Amount: $__________________
Death Benefit Option: [_] Option I [_] Option 2
Corridor Option: [_] Minimum Corridor [_] Alternative Corridor
Optional Benefit Riders:
Single Life Coverage
______ Automatic Increase Rider (Increase Percentage Factor __ %)
______ Guaranteed Minimum Death Benefit Rider
______ Other ______________________________________________
Joint and Last Survivor Coverage
______ Automatic Increase Rider (Increase Percentage Factor __ %)
______ Guaranteed Minimum Death Benefit Rider
______ Certificate Exchange Option Rider
______ Other ______________________________________________
2. Premium Information
Initial Premium Amount: $ ___ Planned Periodic Premium: $ ___
Planned Premium Frequency:
[_] Annually [_] Semi-Annually [_] Quarterly [_] Monthly [_] PAC
Premium Notices to be sent to:
[_] Proposed Insured(s) at: [_] Home Address [_] Business Address
[_] Owner's Address [_] Other____________________________________
3. Allocation of Net Premiums - Indicate Desired Allocations (See Note).
Separate Account:
International Equity Division _______%
Small Company Division ______%
Equity Division _______%
Bond Division _______%
Treasury Money Market Division _______%
Other _____________________ _______%
General Account: _______%
TOTAL 100 %
-------
Note:
1% minimum to any division
used. Whole numbers only
(no fractions or decimals).
Sum of percentage allocations
must equal 100%.
Form 9-89075NY Page 2
<PAGE>
4. Beneficiaries - Complete the information below for each Beneficiary and
circle whether Primary (P) or Contingent (C).
Social
Security City and State
Full Name(s): Relationship: Birthdate: Number: of Residence:
P C ________ ________ ______ _______ ______________
P C ________ ________ ______ _______ ______________
P C ________ ________ ______ _______ ______________
P C ________ ________ ______ _______ ______________
P C ________ ________ ______ _______ ______________
P C ________ ________ ______ _______ ______________
5. Certificate Owner - Complete if other than Proposed Insured(s).
Print Full Name of Person (Last, First, Middle),
Firm, Trust or Corporation:__________________________________________________
Date of Birth/Trust: ________ Social Security/Tax ID Number: ________________
Address: Street________________ City ______________ State_________ Zip_____
Home Telephone: (___)_______________ Work Telephone:(___)__________ Ext. ____
Relationship to Proposed Insured(s):___________ Contingent Owner:_________
6. Suitability
a. Has/Have the Proposed Insured(s), and the Owner, if other than the
Proposed Insured(s), received a Prospectus for the plan of insurance
applied for? [_] Yes [_] No
b. Does/Do the Proposed Insured(s) understand that, under the plan of
insurance applied for (exclusive of any optional benefits):
i. There are two death benefit options to
choose between? [_] Yes [_] No
ii. The amount of death benefit above the guaranteed
insurance amount under Option 2 may increase decrease
depending on investment experience? [_] Yes [_] No
iii. The cash value under Options 1 and 2 may increase or decrease
depending on investment experience? [_]Yes [_] No
C. With this in mind, is the plan of insurance applied for in accord with
the insurance objective and anticipated financial needs of
the Proposed Insured(s)? [_] Yes [_] No
7. Special Request
Requested Certificate Date: _____________________
Is requested date to save age? [_] Yes [_] No
8. Service Office Amendments and Corrections (For Service Office use only where
permitted by state statute regulation.)
Form 9-89075NY Page 3
<PAGE>
Section C - Life Insurance In Force and Pending
1. Describe all life coverage in force. Include individual and group. If none,
write "none"
Proposed Insured-A
Face Amount
Policy Plan Including Double Issue
Company Number Insurance Term Riders Indemnity Premium Date
_______ ______ _________ ___________ _________ _______ _____
_______ ______ _________ ___________ _________ _______ _____
_______ ______ _________ ___________ _________ _______ _____
_______ ______ _________ ___________ _________ _______ _____
Proposed Insured-B (If Applicable)
Face Amount
Policy Plan Including Double Issue
Company Number Insurance Term Riders Indemnity Premium Date
_______ ______ _________ ___________ _________ _______ _____
_______ ______ _________ ___________ _________ _______ _____
_______ ______ _________ ___________ _________ _______ _____
_______ ______ _________ ___________ _________ _______ _____
2. Is there any life insurance or annuity in force or pending with any Company
that will be changed, lapsed or replaced as a result of this application?
Proposed Insured-A [_] Yes [_] No Proposed Insured-B [_]Yes [_] NO
(If Applicable)
If "yes", circle the above Company and number(s).
3. In the past 6 months, has/have the Proposed Insured(s) applied for insurance
with any other Company?
Proposed Insured-A [_] Yes [_] No Proposed Insured-B [_] Yes [_] No
(If Applicable)
If "yes", give details.
Form 9-89075NY Page 4
<PAGE>
- --------------------------------------------------------------------------------
Section D - Additional Information Regarding the Proposed insured(s)
<TABLE>
<CAPTION>
Proposed Proposed
Insured-A Insured-B
(If Applicable)
<S> <C> <C>
Circle Answer To Questions 1-9. Please provide details to any "yes" answers
and indicate whether applicable to Proposed Insured-A or Proposed Insured-B.
1. Do you now, or have you in the past 12 months, smoked cigarettes, cigars or a Yes No Yes No
pipe, chewed tobacco or used tobacco in any other form? If
"yes", give details.
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
2. Have you ever used any form of tobacco? Yes No Yes No
If "yes", used ____ from ___ to ___
3. Do you plan to participate in or have you within the past 3 years Yes No Yes No
participated in organized auto, boat, or motorcycle racing, skin or scuba
diving, parachuting or skydiving, hang gliding, or mountain or rock climbing?
If "yes", complete Avocation Questionnaire.
4. Have you ever flown any aircraft (i.e. airplane, glider, helicopter, balloon, Yes No Yes No
ultra-lite) as a pilot, student pilot, crew member or as a passenger on other
than commercial airplanes? If "yes", complete Aviation Questionnaire.
5. Have you within the past 3 years been convicted of a moving violation, or had Yes No Yes No
your driver license restricted or revoked? If "yes", give
details.__________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
6. Are you a member of, or do you contemplate joining, any branch of the Armed Yes No Yes No
Forces, National Guard or a reserve military unit? If "yes", give details.__
____________________________________________________________________________
____________________________________________________________________________
7. Have you ever received benefits or had insurance premiums waived on any other Yes No Yes No
insurance? If "yes", give details. _________________________________________
____________________________________________________________________________
____________________________________________________________________________
8. Do you intend to live or travel outside of the United States or Canada? If Yes No Yes No
"yes", give details. ______________________________________________________
___________________________________________________________________________
___________________________________________________________________________
9. Have you had life, disability or hospital insurance rated, modified, Yes No Yes No
rejected, cancelled, or had renewal or reinstatement refused in the past 5
years? If "yes", give details. ____________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
</TABLE>
Form 9-89075NY Page 5
<PAGE>
AGREEMENT
I/We understand and agree that:
1. The insurance applied for will not take effect unless and until the issuance
and delivery of the certificate of insurance and payment of the first premium
occur during the life of the person(s) proposed for insurance while the
health of the Proposed Insured(s) and the financial status of the Proposed
Insured(s) has not changed since the date below.
GENERAL PROVISIONS
2. No agent, registered representative or medical examiner has the authority to
waive the answers to any question, to determine insurability, to waive any of
the Company's rights or requirements, or to make or alter any contract,
policy or certificate of insurance.
3. The Owner of the certificate of insurance applied for may be named herein; if
not, the Proposed Insured(s) will be the Owner.
4. The Company has the right to require medical examinations and diagnostic
tests to determine insurability and shall have 80 days from the date of this
application in which to consider and act upon the issuance of any insurance
coverage. If within such period, a certificate of insurance has not been
delivered, the Company will provide notice to the Proposed Owner of rejection
or the reason for the delay. For any certificate of insurance issued
thereafter, the Company will require evidence of insurability.
5. Acceptance by the Proposed Owner of any certificate of insurance issued on
this application agrees to any changes made under Service Office Amendments
and Corrections. Written consent of the Proposed Insured(s) and Owner will be
obtained as to any changes made as to the Class of Risk, Age at Issue, Form
or Plan of Insurance, Amount of Insurance or any Benefit applied for. A copy
of this application, any supplement to it and any Part 2, if required, shall
become part of any certificate of insurance issued on this application.
5. I/WE ACKNOWLEDGE receipt of a Prospectus for the plan of insurance applied
for.
7. I/WE ACKNOWLEDGE receipt of the Notice on the Medical Information Bureau, the
Notice of Investigative Consumer Reports, and the Description of Information
Practices.
8. I/WE HAVE READ, or have had read to me/us, the complete application. All
statements and answers in this application are full, complete and true to the
best of my/our knowledge and belief. I/WE UNDERSTAND that any material
misrepresentations may result in the loss of coverage under the plan of
insurance.
Signed at _______________________ this ___ day of _______________________ 19__
(City and State)
Under penalties of perjury, I certify that the taxpayer identification number
(social security number) provided is my correct taxpayer Identification number.
______________________________________ _________________________________
Signature of Proposed lnsured-A age 15 Signature of Applicant Owner, if
or over. Signature of Parent or Legal other than Proposed Insured(s).
Guardian If Proposed Insured-A If Firm, Trust or Corporation,
under age 15. print its name and that
of authorized person who will
sign below on Its behalf.
___________________________________ By:
Signature of Proposed Insured-B ___________________________________
(If applicable). Signature and title of authorized
person signing on behalf of Firm,
Trust or Corporation named above.
I certify that I asked the Proposed Insured(s) each question. The answers have
been recorded by me free from error. To the best of my knowledge the life
insurance applied for 0 will 0 will not replace insurance with this company of
any other company.
___________________________________ ________________________________________
Signature of Registered Principal Signature of Registered Representative
________________________________________
Name of Registered Representative
(please print)
________________________________________
Office and Control Code
Page 6
<PAGE>
[LOGO OF CHUBB LIFEAMERICA APPEARS HERE]
APPLICATION FOR LIFE
INSURANCE
- --------------------------------------------------------------------------------
The Colonial Life Insurance Company of America
Home Office: Eight Sylvan Way, P.O. Box 216, Parsippany, NJ 07054-0216
Service Office: One Granite Place, P.O. Box 2086, Concord, NH 03302-2086. (800)
997-4499
AUTHORIZATION TO OBTAIN & DISCLOSE INFORMATION
I/We authorize any medical practitioner: medically related facility,
psychologist, psychiatrist, insurer or reinsure Medical Information Bureau
(MIB), financial institution, consumer reporting agency, accountant, lawyer,
employee Social Security Administration or Internal Revenue Service to give the
Company or its agents any records or knowledge of me/us or that of my/our minor
children that they may have, whether medical or non-medical, including any use
of drugs or alcohol as well as any hobbies and finances. No consumer reporting
agency is to obtain information from the MIB.
I/We understand that the information obtained may be used by the Company to
determine eligibility for insurance or to administer my/our coverage. The
Company may not give the information to any person or entity EXCEPT: (1)
reinsurer, or other insurers to whom I/we have applied or may apply: (2) MIB; or
(3) any other person or entity who performs business or legal services in
connection with the administration of my/our insurance coverage. Information may
be disclosed as allowed by law.
I/We authorize the Company named above to obtain an investigative consumer
report.
I/We agree that a copy of this Authorization shall be as valid as the original:
this Authorization shall be valid for two years from the date shown below. I/We
may have a copy upon request.
I/We want to be interviewed if an Investigative Consumer Report is required.
[ ] Yes [ ] No
Minor Children, If Proposed for Insurance
- --------------------------------
- --------------------------------
- --------------------------------
- --------------------------------
- --------------------------------------------------------------------------------
Date
Signature of Proposed Insured-A age 15
or over. Signature of Parent or Legal
Guardian If Proposed Insured-A under
age 15.
- --------------------------------------------------------------------------------
Date Signature of Proposed Insured-B (If
applicable).
- --------------------------------------------------------------------------------
Date Signature of Registered Representative
<PAGE>
[LOGO OF CHUBB LIFEAMERICA APPEARS HERE]
APPLICATION FOR LIFE
INSURANCE
- --------------------------------------------------------------------------------
The Colonial Life insurance Company of America
Home Office: Eight Sylvan Way, P.O. Box 0216, Parsippany, NJ 07054-0216
Service Office: One Granite Place, P.O. Box 2086, Concord, NH 03302-2086. (800)
997-4499
Notice on the Medical Information Bureau
Information on your insurability or that of your spouse or minor children will
be treated as confidential. The Company or its reinsurers may make a brief
report on it to the Medical Information Bureau, Inc. This is a non-profit
organization: to which a number of life and health insurers belong. It runs an
exchange of information for its members. If you, your spouse, or any of your
minor children apply to other Bureau members for life or health insurance, or
file a claim with one of them, the Bureau, if asked, will give the member the
information in its file.
If you ask, the Bureau will disclose any information it may have in its files on
you or your spouse or minor children. If you think the file is wrong, you may
write or telephone and ask that it be changed. Your rights are set forth in the
Federal Fair Credit Reporting Act. You can write to the Bureau at: Box 105,
Essex Station, Boston, MA 02112. You can reach the Bureau by phone at (817) 426-
3660.
The Company or its reinsurers may also give information in their files to life
and health insurers to which you, your spouse or minor children apply for life
or health insurance or with which you file a claim.
Notice of Investigative Consumer Reports
As part of the routine processing of your application, an investigative consumer
report may be made. Through this report the Company obtains information about
you by talking to you, your neighbors, friends, and others whom you know. The
report has information as to your character, general reputation, personal traits
and life-style, except may be related directly or indirectly to your sexual
orientation.
If a report is made, you have the right to a personal interview. You can request
it on the Authorization to Obtain a Disclose Information. If a report is made,
you may receive a copy upon written request.
If you want more details on the nature and scope of this report, write to us at
the above address.
Description of information Practices
To issue and service your insurance coverage, and later to pay a claim, we need
to collect information about y( Our sources are set forth below. If you wish to
learn about our information practices in more detail, please write us at the
above address.
Types of Information Collected: Age, Job, Pay, Health, Financial Data,
Character, Reputation, Personal Traits, Life-style, except as may be related
directly or indirectly to your sexual orientation, Other Personal
Characteristics.
Source of Information: Insured, Applicant, Doctors, Hospitals, Employers, Other
Insurers to which you have applied, the MIB, Consumer Reporting Agencies, Banks.
Disclosure to Third Parties Without Prior Authorization: The information may at
times be disclosed to third part without your consent. This is only done when
required by law or for business reasons.
Access and Correction: You can obtain access to the personal information in our
files; you may also request us correct, amend or delete what you think is wrong
or not related to your coverage. If you want to know how to do please write and
we will advise you how to go about it.
TO BE GIVEN TO The PROPOSED INSURED(S)
Form 9-89075NY Page 8
<PAGE>
Exhibit 3
OPINION OF COUNSEL AS TO SECURITIES BEING REGISTERED
<PAGE>
[LOGO OF CHUBB LIFEAMERICA APPEARS HERE]
- --------------------------------------------------------------------------------
One Granite Place, P.O. Box 515, Concord, NH 03302. (603)226-5000
January 13, 1995
The Colonial Life Insurance Company of America
One Granite Place
Concord, New Hampshire 03301
Gentlemen:
This opinion is furnished in connection with the filing by The Colonial Life
Insurance Company of America ("Colonial Life") of a Registration Statement on
Form S-6 under the Securities Act of 1933 (the "Act") of interests in the
Colonial Separate Account D (the "Separate Account") under its group variable
life insurance policies and certificates (collectively, the "Policies"). This
opinion covers both the group flexible premium variable life insurance policy
and certificates ("Colonial Heritage I") and the group survivorship flexible
premium variable life insurance policy and certificates ("Colonial Heritage
II").
I am familiar with the terms of the Policies and the Registration Statement and
the Exhibits thereto. I have also examined all such corporate records of
Colonial Life and such other documents and laws as I considered appropriate as a
basis for the opinion hereinafter expressed. On the basis of such examination,
it is my opinion that:
1. Colonial Life is a corporation duly organized and validly existing under the
laws of the State of New Jersey.
2. The Separate Account is a separate account of Colonial Life validly existing
pursuant to the New Jersey Insurance Code and the regulations issued
thereunder, under which income, gains and losses, whether or not realized,
from assets allocated to the Separate Account, are, in accordance with the
Policies, credited to or charged against the Separate Account without regard
to other income, gains or losses of Colonial Life.
3. Assets allocated to the Separate Account will be owned by Colonial Life;
Colonial Life is not a trustee with respect thereto. The Policies provide
that the portion of the assets of the Separate Account equal to the reserves
and other Policy liabilities with respect to the Separate Account will not
be chargeable with liabilities arising out of any other business Colonial
Life may conduct. Colonial Life reserves the right to transfer assets of
the Separate Account in excess of such reserves
Chubb LifeAmerica is the servicemark of
Chubb Life Insurance Company of America . The Colonial Life Insurance Company of
America
Chubb Sovereign Life Insurance Company
<PAGE>
The Colonial Life Insurance Company of America
January 13, 199S
Page Two
and other Policy liabilities to the general account of Colonial Life.
4. The Policies (including any units duly credited thereunder) have been duly
authorized by Colonial Life and, when issued and sold in jurisdictions that
have approved the policy form for sale in accordance with the insurance law
of that jurisdiction, each of the Policies (including any such units) will
constitute validly issued and binding obligations of Colonial Life in
accordance with its terms. Purchasers of the Policies are subject only to
the deductions, charges and fees set forth in the Prospectus.
I hereby consent to the filing of this opinion as an Exhibit to the Registration
Statement of the Separate Account filed under the Act.
Sincerely,
/s/
Kurt W. Bernlohr
Assistant Counsel
<PAGE>
Exhibit 6
ACTUARIAL OPINIONS AND CONSENTS OF
MICHAEL J. LEBOEUF, PSA, MAAA
<PAGE>
[LOGO OF CHUBB LIFEAMERICA APPEARS HERE]
- --------------------------------------------------------------------------------
One Granite Place, P.O. Box 515, Concord, NH 03302-0515. (603) 226-5000
February 20, 1996
The Colonial Life Insurance Company of America
One Granite Place
Concord, New Hampshire 03301
Gentlemen:
This opinion is furnished in connection with the filing of post-effective
amendment no. 2 to the registration statement of The Colonial Life Insurance
Company of America ("Colonial") on Form S-6, ("Registration Statement") of
interests in Colonial Separate Account D under its group variable life insurance
policies and certificates (collectively, the "Policies"). This opinion covers
both the group flexible premium variable life insurance policy and certificates
("Colonial Heritage I") and the group survivorship flexible premium variable
life insurance policy and certificates ("Colonial Heritage II").
I am familiar with the terms of the Policies, and the Registration Statement and
the Exhibits thereto. In my opinion:
1. The illustrations of death benefits, accumulation value, and cash value for
the Policies in Appendix A of the prospectus, based on the assumptions
stated in the illustrations, are consistent with the provisions of the
Policies.
The Policies have not been designed so as to make the relationship between
premiums and benefits, as shown in the illustrations, appear
disproportionately more favorable to prospective purchases of Policies for
the age(s), gender(s), smoking status(es), and underwriting class(es)
illustrated in Appendix A than to prospective purchasers of Policies for
other age(s), gender(s), smoking status(es), and underwriting class(es).
The particular illustrations shown were not selected for the purpose of
making this relationship appear more favorable. Generally, the rates for
non-smokers are lower than for smokers and the rates for females are lower
than for males.
2. The illustrations of death benefits, accumulation value and cash value for
the Policies, set forth in Appendix A of the prospectus, based on the net
return of the five divisions of Colonial Separate Account D and the
assumptions stated within the example, are consistent with the provisions
of the Policies.
Chubb LifeAmerica is the servicemark of
Chubb Life Insurance Company of America . The Colonial Life Insurance Company of
America
Chubb Sovereign Life Insurance Company
<PAGE>
February 20, 1996
Page Two
The illustrations in Appendix A have not been designed so as to make the
relationship between premiums and benefits appear disproportionately
more favorable to prospective purchasers of Policies for age(s),
gender(s), smoking status(es), and underwriting class(es) illustrated in
Appendix A than to prospective purchasers of Policies for other age(s),
gender(s), smoking status(es), and underwriting class(es). Generally,
the rates for nonsmokers are lower than for smokers and the rates for
females are lower than for males.
3. The illustrations set forth in Appendix A of the prospectus contain both
the current and guaranteed rates of cost of insurance charges to be used
for those Policies.
These rates have not been designed so as to make the relationship
between current and guaranteed rates appear disproportionately more
favorable to prospective purchasers of Policies for the age(s),
gender(s), smoking status(es) and underwriting class(es) illustrated in
Appendix A than to prospective purchasers of Policies for other age(s),
gender(s), smoking status(es), and underwriting class(es). The
particular illustrations shown were not selected for the purpose of
making this relationship appear more favorable. Generally, the rates for
non-smokers are lower than for smokers and the rates for females are
lower than for males.
I hereby consent to the use of this opinion as an Exhibit to the Registration
Statement and to the reference to my name under the heading "Experts" in the
prospectus.
Sincerely,
/s/
Michael J. LeBoeuf, FSA, MAAA
Assistant Vice President
and Product Actuary
MJL/jlf
<PAGE>
Exhibit 9
REPRESENTATIONS, DESCRIPTION AND UNDERTAKINGS REGARDING
MORTALITY AND EXPENSE RISK CHARGE, PURSUANT TO
RULE 6e-3(T) (b) (13) (iii) (F)
<PAGE>
REPRESENTATIONS, DESCRIPTION AND
UNDERTAKINGS PURSUANT TO
RULE 6e-3(T) (b) (13) (iii) (F) UNDER
THE INVESTMENT COMPANY ACT OF 1940
The Colonial Life Insurance Company of America ("Colonial"), on behalf of its
Colonial Separate Account D, makes the following representations:
1. Section 6e3(T) (b) (13) (iii) (F) is being relied upon.
2. The level of mortality and expense risk charge is reasonable in relation to
the risks assumed and is within the range of industry practice for
comparable contracts.
3. The methodology used to support the representation made in paragraph (2)
above is based on an analysis of the mortality and expense risk charges
being made in relation to the risks assumed, as well as those in comparable
flexible premium contracts filed with the Commission - both single life
policies and survivorship policies. Colonial undertakes to keep and make
available to the Commission on request the documents used to support the
representation in paragraph (2) above.
4. It is expected that the proceeds from explicit sales loads will be
sufficient to cover the expected costs of distributing the flexible
contracts. If this is ever not the case, Colonial has concluded that there
is a reasonable likelihood that the distribution financing arrangement will
benefit Colonial Separate Account D and policy and certificate owners.
Colonial undertakes to keep and make available to the Commission on request
the memorandum setting forth the basis for this representation.
5. Colonial represents that Colonial Separate Account D will invest only in
management investment companies which have undertaken to have a board of
directors, a majority of whom are not interested persons of the company,
formulate and approve any plan under Rule 12b-l to finance distribution
expenses.
/s/
Michael J. LeBoeuf, FSA, MAAA
Assistant Vice President
and Product Actuary
<PAGE>
Exhibit 10
FORM OF REINSURANCE AGREEMENT
<PAGE>
REINSURANCE AGREEMENT
between
COLONIAL LIFE INSURANCE COMPANY OP AMERICA
of Parsippany, New Jersey,
hereinafter referred to as the "Ceding Company," and
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE TITLE PAGE
<C> <S> <C>
1 Effective Date 1.0
2 Automatic Reinsurance Coverage 2.0
3 Facultative Reinsurance Coverage 3.0
4 Procedure 4.0
5 Liability 5.0
6 Plans of Reinsurance 6.0
7 Premiums 7.0
8 Reinsurance Conditions 8.0
9 Premium Tax Reimbursement and DAC Tax 9.0
10 Adjustments 10.0
11 Reinstatement 11.0
12 Payments 12.0
13 Recapture 13.0
14 Administrative Oversights 14.0
15 Claims 15.0
16 Misstatement of Age or Sex 16.0
17 Insolvency 17.0
18 Inspection of Records 18.0
19 Arbitration 19.0
20 Parties to the Agreement 20.0
21 Duration of Agreement 21.0
22 Experience Refund 22.0
23 Reserves 23.0
24 Entire Agreement 24.0
25 Reports 25.0
26 Execution of the Agreement 26.0
</TABLE>
<PAGE>
ARTICLE 1: EFFECTIVE DATE
- --------------------------
This Treaty is an Agreement, effective September 7, 1993, by and between the
Ceding Company and the Reinsurer. In consideration of the mutual promises
contained herein the parties hereto agree to act in accordance with the
provisions of this Agreement.
<PAGE>
ARTICLE 2: AUTOMATIC REINSURANCE COVERAGE
- ------------------------------------------
1. The Ceding Company agrees to submit for reinsurance with the Reinsurer arid
the Reinsurer agrees to accept for reinsurance 25% of the excess over the
Ceding Company's limits of retention, as shown in Exhibit A, attached hereto
and made a part hereof, of any arid all standard and substandard
individually underwritten ordinary life insurance, as set forth in
Exhibit B, attached hereto and made a part hereof, which is written by the
Ceding Company on any resident of the United States, in accordance with the
Ceding Company's normal individual ordinary underwriting rules and
practices. Minimum cessions will be $10,000, and maximum total amounts on
one life will be equal to 25% of the amounts as set forth in Exhibit A.
For the purposes of this Agreement and in accordance with the Ceding
Company's ordinary underwriting rules, "resident" shall be defined as a
person whose primary domicile is the United States for at least 9 months in
a 12 consecutive month period, and who is either a U.S. citizen or has been
lawfully admitted for permanent residence in the United States. The phrase
"lawfully admitted for permanent residence'' means the status of having
been lawfully accorded the privilege of residing permanently in the United
States and having been issued an alien registration receipt card by the
United States Immigration and Naturalization Service of the United States
Department of Justice.
Should the Ceding Company desire to change its issue limits or underwriting
guidelines, such changes shall be subject to approval by the Reinsurer.
Should the Ceding Company elect to participate in another arrangement or
other arrangements to secure additional automatic binding capacity, the
Reinsurer shall be notified thirty (30) days in advance of such action and
reserves the right to modify the binding limits currently set forth in this
Agreement.
It is further provided and agreed that life insurance amounts submitted in
accordance with this Article shall not include those constituting a "Jumbo
Risk". A "Jumbo Risk" for the purpose of this Agreement is defined as one
where the papers of the Ceding Company indicate that the proposed insured's
total life insurance inforce and applied for in all companies exceeds the
amounts shown in Exhibit A.
2. Automatic reinsurance coverage shall not apply to those situations where the
policy has been submitted on a facultative basis.
2.0
<PAGE>
3. Automatic reinsurance under this Agreement will include, if mutually agreed
upon in writing between the parties and referenced in Exhibit B or elsewhere
in this document, any supplementary benefits.
4. The Ceding Company shall at any time have the right to modify its retention
limits affecting reinsurance by advance notice in writing mailed to the
Reinsurer. The automatic binding limits specified in Exhibit A and referred
to in paragraph 1 of this Article shall be amended in writing by the Ceding
Company and the Reinsurer.
5. Automatic reinsurance shall not cover special programs, experimental or
limited retention programs, or replacement and conversion situations of the
Ceding Company unless prior approval has been received from the Reinsurer.
For the purposes of this Agreement, these situations are not intended to
mean contractual conversions or exchanges or continuations of the original
policy for reinsurance purposes.
2.1
<PAGE>
ARTICLE 3: FACULTATIVE REINSURANCE COVERAGE
- --------------------------------------------
1. whenever the Ceding Company desires reinsurance on a standard or substandard
risk not covered by the automatic provisions of this Agreement as specified
in Article 2, or on any application on which the Ceding Company wishes the
advice of the Reinsurer, it must submit, and the Reinsurer agrees to
consider, such reinsurance on a facultative basis.
2. Facultative reinsurance under this Agreement may include supplementary
benefits as mutually agreed upon in writing by the Ceding Company and the
Reinsurer.
3. Any and all offers made by the Reinsurer to accept a risk as submitted or to
accept a risk under terms and conditions other than as submitted shall,
unless otherwise terminated by the Reinsurer, terminate automatically on the
earliest of:
a. The date the Reinsurer receives notice from the Ceding Company of its
withdrawal of its application, or
b. Ninety (90) days from the date the Reinsurer communicates its offer to
the Ceding Company.
The Reinsurer's offer may remain open beyond the ninety day period provided
the Ceding Company submits a written
request to the Reinsurer for an extension of the offer and the Reinsurer
approves such request. If an extension is granted, the Reinsurer's offer
shall terminate automatically on the date the extension expires.
3.0
<PAGE>
ARTICLE 4: PROCEDURE
- ---------------------
1. Automatic Reinsurance
The plans covered under this Agreement shall be Self-Administered. Each
month, the Ceding Company shall submit to the Reinsurer a statement
containing the following information for each policy for which premium
payments or adjustments are due, along with the applicable premium payment
or adjustment:
1. Policy number
2. Issue Date
3. Insured's Name
4. Age and date of birth
5. Sex
6. Underwriting classification, smoking code, and table rating
7. Amount of risk for following year, less retention
8. Premiums due the Reinsurer
9. Policy Exhibit
10. Treaty code
11. Life or health indicator
12. Coinsurance or YRT indicator
13. Reinsurer's cession number
14. Valuation code
15. Premium duration
16. Automatic or facultative indicator
17. State code
18. Reinsurance premium paid-to date
19. Face amount of policy
20. Original amount of reinsurance
21. Commissions due Chubb
2. Facultative Reinsurance
When the Ceding Company desires to apply for facultative reinsurance, the
Ceding Company shall send to the Reinsurer copies of the original
application, medical examiners' reports, inspection reports, and all other
information bearing on the insurability of the risk. Upon receipt of such
application, the Reinsurer shall examine the papers and promptly notify the
Ceding Company of its decision to either make an offer or reject the risk as
submitted, or advise the Ceding Company of additional evidence necessary to
underwrite the risk.
When a policy has been issued and paid for on which reinsurance has been
obtained from the Reinsurer, the Ceding Company shall promptly pay
reinsurance premiums on such policy on the next monthly statement. Payment
of said premium shall constitute acceptance of the Reinsurer's
4.0
<PAGE>
facultative offer.
If the reinsurance application on which the Reinsurer has made an offer is not
to be placed with the Reinsurer because the original policy has not been paid
for or because of some other reason, such offer shall expire in accordance with
the terms and conditions specified under Article 3, paragraph 3.
The reporting of facultative business shall be made in the same accord as
automatic reinsurance.
4.1
<PAGE>
ARTICLE 5: LIABILITY
- ---------------------
1. The liability of the Reinsurer on any reinsurance under this Agreement
shall commence simultaneously with the liability of the Ceding Company,
except that no liability shall attach to the Reinsurer hereunder with
respect to facultative reinsurance prior to acceptance during the
lifetime of the insured by the Ceding Company of the Reinsurer's offer.
In no event shall the liability of the Reinsurer commence prior to the
liability of the Ceding Company. The Reinsurer's liability thereunder
shall continue as long as the Ceding Company is liable under the policy,
subject to all provisions contained in this agreement, and shall cease
when the liability of the Ceding Company ceases.
2. Whenever the Ceding Company becomes liable for a loss under the
terms of a Conditional Receipt or Temporary Insurance Receipt, the
Reinsurer shall be liable to the Ceding Company for the amount over the
Ceding Company's standard retention as specified in the retention
schedule in Exhibit A, but not in excess of the automatic reinsurance
limits hereunder, and only if the policy would have qualified for
automatic reinsurance hereunder. In order for the Reinsurer to be
liable in accordance with the preceding qualifications on any
Conditional Receipt or Temporary Insurance Receipt, the Ceding Company
must have submitted to the Reinsurer a copy of the application and
receipt it intends to use with regard to risks reinsured hereunder and
must have received written acknowledgment from the Reinsurer that it
intends to be bound on such receipt as herein stated. The Ceding
Company shall notify the Reinsurer of proposed changes to its
Conditional Receipt or Temporary Insurance Receipt or in its practices
in issuing Conditional Receipts or Temporary Insurance Receipts. The
Reinsurer shall not be liable for such revised Conditional Receipt,
Temporary Insurance Receipt or practices unless the Ceding Company has
received written acknowledgment from the Reinsurer that it intends to be
bound on such revision.
3. The Reinsurer shall not be liable for a loss incurred by the Ceding
Company under the terms of a Conditional Receipt or Temporary Insurance
Receipt where the Ceding Company has submitted the policy facultatively
to any reinsurer.
5.0
<PAGE>
ARTICLE 6: PLANS OF REINSURANCE
- --------------------------------
1. Life Reinsurance
Life Reinsurance under this Agreement shall be on the Yearly Renewable Term
plan for the amount at risk on the proportion of the original policy
reinsured in the Reinsurer. For the purpose of this Agreement the
reinsured net amount at risk will be calculated as (a) the number of $1000
units of reinsurance, less (b) the reserve per unit, if any, times (c) the
number of units reinsured.
For purposes of the preceeding paragraph, reserve will mean accumulated fund
value for interest sensitive or universal life type products, and will mean
statutory reserves (excluding deficiency reserves) for all other products.
2. Supplemental Benefits
All Supplemental Benefits reinsurance shall be on the Coinsurance plan.
3. Any Supplemental Benefits reinsured hereunder shall be independent of the
life reinsurance amount at risk.
6.0
<PAGE>
ARTICLE 7: PREMIUMS
- --------------------
1. Premiums for Life Reinsurance
The annual premiums for standard and substandard life reinsurance shall be
computed on the basis of the amount at risk at the rates shown in Exhibit C
attached hereto and made a part hereof. These rates are guaranteed for one
year. The Reinsurer guarantees that premium rates shall not exceed the
rate determined using the applicable 1980 CSO table at the maximum statutory
valuation rate approved in the Reinsurer's state of domicile.
2. Flat Extra Premiums
For reinsurance of substandard risks for which a flat extra premium is
charged, the Ceding Company shall pay to the Reinsurer the sum of:
a. The premiums for the amount at risk as determined in item 1. above, and
b. The flat extra premium collected by the Ceding Company on the portion of
the face amount reinsured in the Reinsurer, less allowances as described
in Exhibit C.
3. Supplemental Benefits
Premiums for reinsurance of Supplemental Benefits shall be paid during the
period that such coverage is inforce at the annual rates as are charged by
the Ceding Company under the policy or policies on which reinsurance in the
Reinsurer is based, less allowances as described in, Exhibit D. If the
Ceding Company decreases the Supplemental Benefits rates subsequent to the
effective date of this Agreement, the Reinsurer reserves the right to review
the allowances.
7.0
<PAGE>
ARTICLE 8: REINSURANCE CONDITIONS
- ----------------------------------
1. Upon request, the Ceding Company shall furnish the Reinsurer with any and
all specimen copies of its applications, rate books, underwriting
requirements, policy and rider forms and any tables of rates and values
which may be required for the proper administration of the business
reinsured under this Agreement.
2. Each reinsurance cession shall be subject to all applicable general
conditions, limitations, exceptions or restrictions contained in the
respective policies of the Ceding Company, except, however, that the
reinsurance shall provide no loan or cash surrender values.
3. The Ceding Company shall bear the expense of all medical examinations,
inspection fees and other charges incurred in connection with the policy,
including but not limited to issue, reinstatement, or reentry.
8.0
<PAGE>
ARTICLE 9: PREMIUM TAX REIMBURSEMENT AND DAC TAX
- -------------------------------------------------
1. Premium Taxes
The Reinsurer is not required to reimburse the Ceding Company for premium
taxes the latter may be required to pay with respect to that part of the
premiums received under the Ceding Company's policies which is remitted to
the Reinsurer as reinsurance premiums.
2. DAC Tax
The Ceding Company and the Reinsurer hereby enter into an election under
Treasury Regulations Section 1.848-2(g) (8) whereby:
a. For each taxable year under this Agreement, the party with net positive
consideration, as defined in the regulations promulgated under Treasury
Code Section 848, will capitalize specified policy acquisition expenses
with respect to this Agreement without regard to the general deductions
limitation of Section 848(c) (1);
b. The Ceding Company and the Reinsurer agree to exchange information
pertaining to the amount of net consideration under this Agreement each
year to ensure consistency or as otherwise required by the Internal
Revenue Service;
c. The Ceding Company will submit a schedule to the Reinsurer by May 1 of
each year of its calculation of the net consideration for the preceding
calendar year. This schedule of calculations will be accompanied by a
statement signed by an officer of the Ceding Company stating that the
Ceding Company will report such net consideration in its tax return for
the preceding calendar year;
d. The Reinsurer may contest such calculation by providing an alternative
calculation to the Ceding Company in writing by June 1st of the same
year. If the Reinsurer does not so notify the Ceding Company, the
Reinsurer will report the net consideration as determined by the Ceding
Company in the Reinsurer's tax return for the previous calendar year;
e. If the Reinsurer contests the Ceding Company's calculation of the net
consideration, the parties will act in good faith to reach an agreement
as to the correct amount by July 1st of the same year. If the
9.0
<PAGE>
Ceding Company and the Reinsurer reach agreement on an amount of net
consideration, each party shall report such amount in their
respective tax returns for the previous calendar year.
9.1
<PAGE>
ARTICLE 10: ADJUSTMENTS
- ------------------------
1. Changes
If any change is made in the plan of the original policy reinsured in the
Reinsurer, including but not limited to any change in status caused by the
application of a nonforfeiture provision, a corresponding change shall be
made in the reinsurance. The Ceding Company shall promptly notify the
Reinsurer of any such change with the next monthly statement that is
completed. Increases in the face amount of the original policy reinsured
hereunder and changes in the underwriting classification of substandard
policies for facultative policies shall be subject to prior approval of the
Reinsurer.
2. Reductions and Terminations
If all or any part of any insurance coverage under any policy upon which
reinsurance is based shall be reduced or terminated, the amount of
reinsurance carried by the Reinsurer with respect to that coverage, shall
be:
a. in the case of a policy terminating, the reinsurance related to that
policy shall be terminated.
b. in the case of a policy reduction, the ceding company will maintain the
retention it possessed prior to the reduction and reduce or terminate
the reinsurance depending on the amount of the policy remaining after
the reduction.
3. Conversions or Continuations
Conversions or continuations will be reinsured by the Reinsurer only if the
original policy was reinsured by the Reinsurer. The amount of reinsurance
will not exceed the amount of the reinsurance on the original policy with
the Reinsurer immediately prior to the conversion or continuation. Premiums
and allowances will be determined at the rates covering the new plan at
point in scale based on the original policy that is being converted or
continued.
A continuation is defined as a policy not meeting all of the following
conditions:
1) complete new underwriting
2) new suicide clause and incontestible period
3) full first year commissions paid.
10.0
<PAGE>
ARTICLE 11: REINSTATEMENT
- --------------------------
1. If a policy reinsured automatically under the provisions of Article 2
hereunder lapses and is later approved for reinstatement by the Ceding
Company in accordance with its usual and ordinary underwriting standards,
reinsurance for the amount reinsured with the Reinsurer at the time of lapse
shall be reinstated automatically. The notice of reinstatement shall appear
on the monthly statement. Reinsurance shall be effective as of the date of
reinstatement.
2. If a policy reinsured facultatively under the provisions of Article 3 lapses,
reinstatement of the amount reinsured with the Reinsurer at the time of the
lapse shall require prior approval by the Reinsurer. Notice in writing of
such reinstatement shall be given promptly to the Reinsurer together with
copies of the reinstatement papers that are required. Such reinsurance shall
become effective as of the date of reinstatement.
3. In the event of a reinstatement in accordance with this Article, the Ceding
Company shall pay to the Reinsurer all reinsurance premiums and policy fees
in arrears from the reinstatement date. Thereafter, reinsurance premiums
shall be payable in accordance with Article 7 and 12.
11.0
<PAGE>
ARTICLE 12: PAYMENTS
- ---------------------
1. Reinsurance premiums shall be paid on an annual basis. Within thirty days
after the close of each calendar month, the Ceding Company shall forward to
the Reinsurer its statement of account along with its remittance for the new
amount due as shown therein. If the statement shows a balance due the Ceding
Company, the Reinsurer shall remit that amount to the Ceding Company within
30 days of receipt of the statement of account.
2. For the purposes of this Agreement, the due date for the Reinsurer's receipt
of the statement of account and premiums due is the thirty-first day
following the close of any calendar month. The payment of reinsurance
premiums in accordance with the provisions herein shall be a condition
precedent to the liability of the Reinsurer for reinsurance covered by this
Agreement. In the event that reinsurance premiums are not paid as of the
thirty-first day following the close of the calendar month in which they fall
due, the Reinsurer shall have the right to give the Ceding Company thirty
days notice of the Reinsurer' 5 intention to terminate reinsurance on those
policies for which reinsurance premiums have not been paid. At the
expiration of this thirty-day period the reinsurance shall terminate
automatically. Whether or not the Reinsurer exercises its right to terminate
the reinsurance as specified in the preceding paragraph, all such outstanding
premiums shall be subject to an annual interest charge on the unpaid balance
from the due date as specified in this Article to the date of payment, at a
rate coincident with the current rate of interest charged by the Reinsurer
for delinquent premiums in connection with its individual life insurance
policies.
3. If reinsurance is terminated as provided in paragraph 2, and if all
reinsurance premiums in default and any additional charge due in accordance
with paragraph 2, including such premiums and charges which may become in
default during the thirty-day notice period are not paid before the
expiration of such period, the Reinsurer shall thereupon be relieved
automatically of future liability under all reinsurance on those policies for
which premiums and other charges remain unpaid. Reinsurance under cessions
for which premiums subsequently fall due will terminate automatically if
reinsurance premiums are not paid when due as provided in paragraph 2 of this
Article. The reinsurance so terminated may be reinstated at any time within
sixty days of the date of termination upon payment of all reinsurance
premiums and other charges in arrears; but in the event of such
reinstatement, the Reinsurer shall have no liability in connection with any
claims incurred between the date of
12.0
<PAGE>
termination and the date of reinstatement of the reinsurance.
4. The Ceding Company shall continue to be liable to the Reinsurer for all
unpaid reinsurance premiums earned by the Reinsurer during the time period
reinsurance coverage remains in effect under this Agreement. Such premiums
are subject to an annual interest charge as specified in paragraph 2 above.
12.1
<PAGE>
ARTICLE 13: RECAPTURE
- ----------------------
1. The limits of retention of the Ceding Company are shown in Exhibit A,
attached hereto and made a part hereof. The Ceding Company shall at any time
have the right to increase its retention limits affecting new reinsurance by
advance notice in writing mailed to the Reinsurer. If the Ceding Company
reduces its retention limits, such reduction shall not take effect for
reinsurance purposes until written approval has been received from the
Reinsurer.
2. If the Ceding Company increases its limits of retention as specified in
Exhibit A, a corresponding reduction may be made at the option of the Ceding
Company in the reinsurance inforce under this Agreement on all lives on which
the Ceding Company has maintained its maximum limit of retention for age and
mortality rating in effect at the time of issue. A reduction shall not be
made in the reinsurance of any policy until such reinsurance has been inforce
hereunder at least ten (10) full years.
3. If such reduction in reinsurance is elected and written notice thereof is
given to the Reinsurer within ninety days from the effective date of such
increase in retention for new issues, then:
a. All policies or reinsurance issued hereunder and eligible for
recapture, as provided in this Article, shall be similarly reduced;
b. Such reinsurance shall be reduced by an amount in each case as will
increase the total insurance to be retained by the Ceding Company to its
maximum limit of retention for the age and mortality rating in effect at
the time the reinsurance was ceded to the Reinsurer;
c. If there is reinsurance in other companies on any such life, the
reduction of the reinsurance in the Reinsurer shall be that proportion
of the total indicated reduction which the reinsurance in the Reinsurer
bears to the total reinsurance on that life;
d. The reduction of reinsurance shall be effective upon the anniversary
date next following or the tenth (10th) policy anniversary for those
policies which have not been inforce at least ten (10) full years;
e. If, at the time of recapture, the reinsured is disabled and premiums are
being waived under a waiver of monthly deductions benefit, the life
reinsurance shall be considered eligible for recapture. However, the
waiver
13.0
<PAGE>
of monthly deductions benefit reinsurance shall remain inforce until
such time as the policy is returned to a premium paying status, at which
time the waiver of monthly deductions benefit reinsurance shall be
eligible for recapture.
4. In the event the Ceding Company overlooks any reduction in the amount of
reinsurance which should have been made because of an increase in the Ceding
Company's limits of retention, the acceptance by the Reinsurer of
reinsurance premiums under such circumstances after the effective date of
the reduction shall not constitute or determine a liability on the part
of the Reinsurer for such reinsurance. The Reinsurer shall be liable
only for a refund of premiums so received without interest.
13.1
<PAGE>
ARTICLE 14: ADMINISTRATIVE OVERSIGHTS
- --------------------------------------
1. Should either party to this Agreement fail to comply with any of the terms
of this Agreement, and if said failure can be shown to be unintentional
and a result of an administrative oversight or misunderstanding on the
part of either party, then this Agreement shall not be deemed abrogated
thereby, but bath parties shall be restored to the position they would have
occupied had no such administrative oversight occurred.
2. If the Ceding Company does discover that it did not cede reinsurance on a
policy it should have reinsured automatically under this Agreement, the
Ceding Company is required to do an audit of its records sufficient to
determine if automatic reinsurance was unreported on any other policies.
14.0
<PAGE>
ARTICLE 15: CLAIMS
- -------------------
1. Notice of Claim.
Immediate notice of any claim submitted on a policy reinsured hereunder
shall be given to the Reinsurer after receipt of first information by the
Ceding Company. Copies of documents bearing on such claim and coverage shall
be furnished to the Reinsurer as requested. In addition, on any claim
occurring during the contestable period, the Ceding Company shall furnish
copies of the application and underwriting papers. Whenever the amount
reinsured by the Reinsurer exceeds the amount retained by the Ceding
Company, the Ceding Company shall consult with the Reinsurer prior to
conceding any liability or making any settlement with the claimant.
2. Settlement of Claims.
Except as otherwise hereinafter provided, the Reinsurer shall accept the
good faith decision of the Ceding Company in settling any claim. Upon
receipt of the proper proofs and, if requested by the Reinsurer, evidence of
the Ceding Company having settled with the claimant, the Reinsurer shall
make one lump sum payment of its net reinsurance liability regardless of the
method of settlement used by the Ceding Company under its policy or
policies. In settlement of reinsurance liability for waiver of monthly
deductions benefits, the Reinsurer shall pay the Ceding Company its
proportionate share of the gross premium waived annually.
3. Contested Claims.
The Ceding Company shall immediately notify the Reinsurer of its intention
to contest, compromise or litigate a claim involving the insurance. The
Reinsurer shall notify the Ceding Company of its decision to decline to be a
party to such contest within fifteen (15) days of the Reinsurer's receipt of
all documents requested by the Reinsurer in accordance with this Article.
In such case, the Reinsurer shall pay the full amount of the reinsurance due
the Ceding Company and shall not be liable for future costs of legal and/or
investigative expenses incurred subsequent to the date of the Reinsurer's
notice of declination.
When the Reinsurer agrees to participate in a contest, compromise or
litigation involving the insurance, the Ceding Company shall give
prompt notice of the commencement, or proposed commencement, of any
legal proceedings in connection therewith. Copies of all documents in
connection with a lawsuit or notice of intent
15.0
<PAGE>
to file a lawsuit shall be furnished promptly to the Reinsurer. The
Reinsurer shall accept the Ceding Company's good faith decisions in
litigation, compromises, or contests.
The Reinsurer shall share in legal or investigative expenses related to such
proceedings in the same proportion as its reinsurance liability bears to the
Ceding Company's liability.
If the Ceding Company's contest, compromise or litigation results in a
reduction of its liability, the Reinsurer shall share in the reduction in
the proportion that the liability of the Reinsurer bore to the amount
payable under the terms of the policy on the date of death of the insured.
4. Claim Expense.
The Reinsurer shall pay its proportionate share of the following expenses
connected with the litigation or settlement of a claim, provided that such
expenses are reasonable:
a. Investigative expenses such as investigatory reports, attending
physician's statements, police reports;
b. Attorney's fees;
c. Penalties and interest imposed automatically by statute against the
Ceding Company and rising solely out of a judgement rendered against the
Ceding Company in a suit for policy benefits reinsured hereunder;
d. Interest paid to the claimant on death benefit proceeds in accordance
with the Ceding Company's practices. Reimbursement of interest in excess
of 9%, unless otherwise dictated by local legislation, shall require
approval by the Reinsurer.
The Reinsurer's share of such expenses shall be determined in accordance
with the same proportions described in paragraph 3 of this Article.
The following claim expenses shall not be considered items
of "net reinsurance liability", as referenced in paragraph
2 of this Article, and such expenses shall be paid by the
Ceding Company:
a. Routine administrative expenses, home office or elsewhere,
including salaries of employees of the Company.
15.1
<PAGE>
b. Expenses incurred in connection with any dispute or contest arising
out of conflict in claims of entitlement to policy proceeds or
benefits which the Ceding Company admits are payable.
5. Extra Contractual Damages.
The Reinsurer shall not be liable, nor shall any amounts be paid under
this Agreement or otherwise, for any extra-contractual damages,
including but not limited to consequential, compensatory, exemplary or
punitive damages awarded against the Ceding Company or the Ceding Company
voluntarily pays in settlement of a dispute or claim, where the damages
actually awarded are the direct or indirect result of any act, omission or
course of conduct undertaken by the Ceding Company, its agents or
representatives in connection with any aspect of the insurance reinsured
under the Agreement. The Reinsurer recognizes that special circumstances
may arise under which the Reinsurer, in equity, should participate to the
extent permitted by law in certain assessed damages. These circumstances
are difficult to define in advance but could include those situations in
which the Reinsurer was an active party in the act, omission or course of
conduct which directly results in the assessment of such damages. The
extent of such participation is dependent upon a good-faith assessment
of the relative culpability in each case; but all factors being equal,
the division of any such assessment would generally be in the proportion of
the net liability accepted by each party.
15.2
<PAGE>
ARTICLE 16: MISSTATEMENT OF AGE OR SEX
- ---------------------------------------
In the event of an increase or reduction in the amount of original insurance
under any policy reinsured hereunder because of an overstatement or
understatement of age or misstatement of sex established after the death of the
insured, the Ceding Company and the Reinsurer shall share in such increase or
reduction in proportion to their respective liabilities under such policy.
16.0
<PAGE>
ARTICLE 17: INSOLVENCY
- -----------------------
1. All reinsurance under this Agreement shall be payable by the Reinsurer
directly to the Ceding Company, its liquidator, receiver or statutory
successor on the basis of the liability of the Ceding Company under the
policy or policies reinsured without diminution because of the insolvency of
the Ceding Company. It is understood, however, that in the event of
such insolvency the liquidator or receiver or statutory successor of the
Ceding Company shall give written notice of the pendency of a claim against
the insolvent Ceding Company on the policy reinsured within a reasonable
time after such claim is filed in the insolvency proceeding. During the
pendency of such claim, the Reinsurer may investigate such claim and
interpose, at its own expense, in the proceeding where such claim is to be
adjudicated any defense which it may deem available to the Ceding Company or
its liquidator or receiver or statutory successor.
2. It is further understood that the expense thus incurred by the Reinsurer
shall be chargeable, subject to court approval, against the insolvent
Ceding Company as part of the expense of liquidation to the extent of a
proportionate share of the benefit which may accrue to the Ceding Company
solely as a result of the defense undertaken by the Reinsurer. Where two
or more reinsurers are involved in the same claim and a majority in interest
elect to interpose defense to such claim, the expenses shall be apportioned
in accordance with the terms of the reinsurance agreement as though such
expense had been incurred by the Ceding Company.
3. Any debts or credits, matured or unmatured, liquidated or unliquidated, in
favor of or against either the Reinsurers or the Ceding Company with respect
to this agreement or with respect to any other claim of one party against
the other are deemed mutual debts or credits, as the case may be, and will
be offset, and only the balance will be allowed or paid.
17.0
<PAGE>
ARTICLE 18: INSPECTION OF RECORDS
- ----------------------------------
The Reinsurer shall have the right at any reasonable time to inspect at the
office of the Ceding Company the original papers, records, books, files and
other documents relating directly or indirectly to the insurance coverage
reinsured under this Agreement.
18.0
<PAGE>
ARTICLE 19: ARBITRATION
- ------------------------
It is understood by both parties hereunder that the wording and interpretation
of this Agreement is based on the usual customs and practices of the insurance
and reinsurance industry. While both parties agree to act in good faith in their
dealings with each other, it is understood and recognized that situations arise
in which an agreement cannot be reached.
In the event that any dispute cannot be resolved to the satisfaction of both
parties, such dispute shall first be subject to good-faith negotiation as
described below in an attempt to resolve such dispute without the need to
institute a formal arbitration proceeding.
1. Negotiation. Within ten days after the first written notification of the
specific dispute has been given to the other party, each party shall appoint
a designated officer to represent that party with the objective of resolving
the dispute. The parties shall meet at a mutually agreeable location as
early as practicable and as often as deemed necessary, in order to gather
and furnish to the other party all appropriate and relevant information with
respect to the matter at issue. The officers shall discuss the problem
and/or negotiate in good faith in an effort to resolve the dispute without
the necessity of any formal arbitration proceeding. During the course
of the negotiation, all reasonable requests made by one party to the other
for information shall be honored in order that each of the parties may be
fully advised. The specific format for such discussions shall be left to
the discretion of the designated officers.
The parties agree that they will submit the dispute to formal arbitration
in the event that such officers cannot resolve the dispute within thirty
days of their first meeting. The parties may agree in writing to extend
this period for an additional thirty days.
2. Arbitration. No later than fifteen days after the final meeting, in
accordance with the negotiation period above, the parties to the negotiation
process shall give written confirmation to the Ceding Company and the
Reinsurer of their inability to resolve the dispute and their
recommendation for establishment of formal arbitration.
An arbitration panel, consisting of three arbitrators, who must be past or
present officers of life insurance companies not affiliated in any way
with the Ceding Company or the Reinsurer, shall settle the dispute.
19.0
<PAGE>
Selection of the panel shall be as follows: within thirty days of the written
recommendation of the establishment of formal arbitration procedures, the Ceding
Company and the Reinsurer shall each submit in writing to the other a list of
three candidates for the arbitration panel. The Ceding Company and the Reinsurer
shall each choose one candidate from the other party's list. Should any chosen
candidate decline to participate in the arbitration proceedings, the party which
had named such candidate shall add another name to the list, and the other party
shall again choose an arbitrator from the list. This procedure shall continue
until two arbitrators have been chosen and have agreed to serve.
The two chosen arbitrators shall choose a third from the remaining candidates
set forth on the lists described above. If the two arbitrators cannot agree on
the choice of a third, such choice shall be made by the Chairman of the American
Arbitration Association.
The date and location of the arbitration shall be set by the arbitration panel,
and shall be communicated in writing to the Ceding Company and to the Reinsurer.
In no event will the date of the arbitration occur later than six months after
the choice of the third arbitrator.
No later than thirty days before the date of the arbitration, the Ceding
Company and the Reinsurer shall supply the arbitration panel with a written
statement containing the facts of the dispute, along with any and all applicable
evidence pertaining to the case. The arbitrators shall consider all
evidence which they consider relevant and shall have the authority to request
additional evidence or statements from either party.
Within sixty days after the beginning of the arbitration proceedings, the
arbitrators shall issue a written decision regarding the dispute and a statement
of any award to be paid as a result of that decision. Their decision shall be
based on the terms and conditions of this Agreement as well as the usual customs
and practices of the insurance and reinsurance industry, rather than on strict
interpretation of the law. Their decision shall be final and binding on both
parties and there shall be no further appeal, except that either party may
petition any court having jurisdiction over the parties and the subject
matter as respects the award rendered by the arbitrators.
Unless otherwise decided by the arbitrators, all expenses resulting from the
arbitration, including the fees and expenses of the arbitrators, will be borne
jointly by
19.1
<PAGE>
each respective party to this Agreement, except that each party will be
responsible for its own attorneys' fees.
19.2
<PAGE>
ARTICLE 20: PARTIES TO THE AGREEMENT
- -------------------------------------
This is an Agreement for indemnity reinsurance solely between the Ceding
Company and the Reinsurer. The acceptance of reinsurance hereunder shall not
create any right or legal relationship whatever between the Reinsurer and the
insured or any beneficiary under any policies of the Ceding Company which may be
reinsured hereunder.
20.0
<PAGE>
ARTICLE 21: DURATION OF AGREEMENT
- ----------------------------------
The Agreement shall be unlimited in duration, but may be amended at any time by
the written agreement of the two (2) parties and may be terminated as to further
new reinsurance at any time by either party upon ninety (90) days notice in
writing. The Reinsurer shall continue to accept reinsurance during the ninety-
day period aforesaid subject to the payment of reinsurance premiums in
accordance with Article 12. Such termination as to new reinsurance shall not
affect existing reinsurance which shall remain inforce until the termination or
expiry of each reinsurance cession in accordance with the terms and conditions
of this Agreement. The Reinsurer shall not be liable under this Agreement for
any claims or premium refunds which are not reported to the Reinsurer within 180
days following the termination or expiry of all inforce individual cessions
reinsured hereunder.
21.0
<PAGE>
ARTICLE 22: EXPERIENCE REFUND
- ------------------------------
Reinsurance ceded under this Agreement shall not be eligible for an Experience
Refund.
22.0
<PAGE>
ARTICLE 23: RESERVES
- ---------------------
The Reinsurer shall maintain its proportionate share of reserves, excluding
deficiency reserves, if any, held by the Ceding Company which may be required by
state or other regulatory authority for the insurance reinsured under this
Agreement.
23.0
<PAGE>
ARTICLE 24: ENTIRE AGREEMENT
- -----------------------------
This Agreement represents the entire agreement between the Ceding Company and
the Reinsurer and supersedes, with respect to its subject matter, any prior oral
or written agreements between the parties.
No modification or waiver of any provision of this Agreement shall be effective
unless set forth in a written amendment to this Agreement which is executed by
both parties. A waiver shall constitute a waiver only with respect to the
particular circumstances for which it is given and not a waiver of any future
circumstance.
24.0
<PAGE>
ARTICLE 25: REPORTS
- --------------------
1. Quarterly Policy Reserve Report. The Ceding Company shall provide the
Reinsurer with a listing of the mean reserves attributable to the reinsured
portion of each policy reinsured.
2. Annual Tax Reserve Report. Shortly after the close of the year, the
Ceding Company shall report to the Reinsurer the amount by which the Ceding
Company will reduce its tax reserve because of the reinsurance ceded under
this Agreement. The details of the report should conform to the current
requirements of Internal Revenue Code Section 807.
3. Annual Inforce Listing. Shortly after the close of the year, the Ceding
Company shall furnish the Reinsurer with a listing of all inforce reinsured
policies, similar in form to the listing shown in Article 4.
25.0
<PAGE>
ARTICLE 26: EXECUTION OF THE AGREEMENT
- ---------------------------------------
In witness whereof the Ceding Company and the Reinsurer have caused this
Agreement to be executed in duplicate by their respective officers duly
authorized to do so.
COLONIAL LIFE INSURANCE COMPANY OF AMERICA
_________________________________ ____________________________________
Officer Signature Witness
_________________________________ ____________________________________
Title Title
_________________________________ ____________________________________
Date Date
<PAGE>
Exhibit 11
FORM OF TRUST AGREEMENT BETWEEN THE COLONIAL LIFE INSURANCE
COMPANY OF AMERICA AND FINANCIAL INSTITUTION ACTING AS
TRUSTEE AND POLICYHOLDER OF THE GROUP POLICIES
<PAGE>
AGREEMENT OF TRUST
This Agreement of Trust (the "Agreement") is made and entered into this
_____ day of ____________, 199_ by and between The Colonial Life Insurance
Company of America, a New Jersey corporation with its principal place of
business at One Granite Place, Concord, New Hampshire (the "Settlor" or "Issuing
Company") and ______________________, a _______________ banking corporation
having its principal office in ________________, (the "Trustee") for the
establishment of a trust to be known as the Colonial Heritage Group Insurance
Trust (the "Trust") for the purpose of enabling participating financial
institutions throughout the State of New York which have applied for and been
accepted as participants in this Trust and have accepted its terms and
conditions (the "Members") to create an efficient means for offering insurance
benefits to individuals who would be eligible for such benefits through the
creation and continuation of the Trust and through life insurance and group
joint and last survivor flexible premium variable life insurance (the "Policy"
or "Policies") of Issuing Company:
WITNESSETH
WHEREAS, Issuing Company desires to underwrite variable life insurance in a
group format, in accordance with New York Insurance Law, covering the individual
lives of those persons to whom a Member has extended credit in the ordinary
course
<PAGE>
of its business, who has deposited funds with the Member, whose loan is serviced
by a Member or who has otherwise established an account with the Member (the
"Participants");
WHEREAS, the Members shall include only financial institutions doing
business in New York and shall include only entities which are regulated by
Federal and/or state regulatory bodies such as credit unions, corporate lending
institutions, mortgage finance companies, commercial banks, savings and loan
associations and any other organization or corporation principally engaged in
lending money, financing business transactions, or servicing loans;
WHEREAS, Section 4216 of the New York Insurance Law authorizes Issuing
Company to issue the Policies to a trustee to hold such Policies solely as a
conduit for the benefit of the Participants, who will be the individual
certificate holders and the beneficiaries of the Trust;
WHEREAS, the Trustee is duly qualified under the laws of the State of New
York to hold such Policies;
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein, the parties agree as follows:
Section 1. Appointment of the Trustee. The Trustee by its execution of
--------- --------------------------
this Agreement accepts the Trusteeship and
-2-
<PAGE>
declares that it will receive and hold the Policies as Trustee by virtue of this
Agreement for the uses and purposes of the Trust, upon the terms and conditions
herein provided.
Section 2. Trustee Responsibilities. The Trustee shall hold the Policies
--------- ------------------------
issued to it until termination of the Trust as herein described or upon
cancellation of the Policy in accordance with the terms thereof. The duties and
obligations and rights of the Trustee shall only be such as are specifically set
forth in this Agreement, as it may from time to time be amended, and no implied
duties or obligations or rights shall be read into this Agreement against the
Trustee.
a. The Trustee shall make application to the Issuing Company for a group
Policy that will provide reasonable benefits to the Participants in
light of all circumstances and factors deemed to be relevant.
b. The Trustee shall become the custodian and holder of the Policy of the
Issuing Company, but will not be responsible for any promotional,
marketing, enrollment, operational, administrative or investment
functions or duties with respect thereto and shall not have the
discretion to substitute another life insurance company for the Issuing
Company or another policy for the Policy, or
-3-
<PAGE>
exercise any voting rights under the Policy. Such Policy, when issued,
shall automatically become subject to this Trust and shall not be
deemed the separate property of the Trustee.
c. The Trustee shall not hold, or invest, any funds whatsoever, shall not
be liable or responsible to the Trust, or the Participants for the
collection, remittance, forwarding, payment, or investment of premiums,
or any recording thereof, and shall immediately remit to the Issuing
Company all monies or correspondence received in connection therewith.
All payments in connection with the Policy shall be paid directly to
the Issuing Company.
d. The Trustee shall not be liable or responsible for the payment,
settlement processing or presentment of claims, or any recording
thereof, arising out of the coverage afforded the Participants by the
Policy hereunder.
e. The Trustee shall look to the Issuing Company for the provision of all
administrative services relating to the maintenance of the Policy, the
Trust and records of the Participants.
-4-
<PAGE>
Section 3. Compensation. The Trustee shall be entitled to reasonable fees
--------- ------------
and shall be reimbursed for all reasonable and necessary expenses which it may
incur in the performance of its duties, such fees and expenses to be negotiated
with the Settlor, but in no event shall such compensation bear any relationship
to the assets held under the Policies.
The Issuing Company, as Issuing Company, shall not, for any purpose, be deemed a
party to this Trust, or be responsible for its validity or sufficiency. The
obligations of the Issuing Company shall be measured and determined solely by
the terms and conditions of the Policy it may issue, and there shall be no
obligations to any person whatsoever other than that stated in such Policy.
No Participant nor beneficiary nor any other person, shall have any rights or
claim to benefits under this Trust except as specified in a Policy procured or
entered into pursuant hereto. Any dispute as to eligibility, type, amount or
duration of benefit shall be resolved by the administrator and the Issuing
Company in accordance with the Policy.
Neither the Trustee, nor any Participant shall be liable for the failure or
omission of the Issuing Company for any reason to pay any benefits or furnish
any services under the Policy.
-5-
<PAGE>
Section 4. Hold Harmless. The Settlor hereby indemnifies the Trustee for,
--------- -------------
and holds it harmless against, any loss, liability, costs or expenses (including
attorneys fees and expenses) incurred or made without negligence, willful
misconduct or lack of good faith on the part of the Trustee, arising out of or
in connection with the performance of its obligations in accordance with the
provisions of this Agreement, including any loss, liability, costs or expenses
arising out of or in connection with the status of the Trustee as the holder of
record of the Policies hereunder.
Section 5. Termination. The Trustee may resign and become and remain fully
--------- -----------
discharged from all further duty or responsibility hereunder, by written notice,
effective not less than ninety (90) days after receipt thereof by Settlor, and
the Settlor may remove the Trustee without the Trustee's consent at any time
without assigning any cause therefore. No such resignation or removal shall be
effective until a successor trustee has been appointed by Settlor and has
accepted such appointment and all the Policies held in the Trust have been duly
transferred to such successor trustee. The Trustee shall continue as Trustee for
purposes of the dissolution and shall take any action with regard to the
Policies which may be appropriate or required by Settlor. This Trust shall
terminate sixty (60) days after the expiration of any remaining Policy held
hereunder by the Trustee.
-6-
<PAGE>
Section 6. Situs and Construction of the Trust. The Trust is accepted by
--------- -----------------------------------
the Trustee in the State of New York and shall be construed in accordance with
the laws of the State of New York. Wherever any words are used in this
Agreement the masculine shall be construed to include the feminine or neuter and
the singular to include the plural and the plural, the singular.
Section 7. Amendments to the Trust. This Agreement may be amended at any
-------- -----------------------
time by agreement in writing between the Trustee and the Settlor.
Section 8. Mailing Addresses. Mailing addresses for notice purposes shall
--------- -----------------
be as follows unless changed in writing:
Settlor:
The Colonial Life Insurance Company of America
One Granite Place
P.O. Box 2086
Concord, New Hampshire 03301
Attention: Vice President, Corporate Accounts
-7-
<PAGE>
Trustee:
____________________________________
____________________________________
____________________________________
Attention: __________________________________
Section 9. Counterparts. This Agreement may be
--------- ------------
executed in any number of counterparts each of which shall be deemed an
original, and the counterparts shall constitute but one and the same instrument,
which shall be sufficiently evidenced by any one counterpart.
Section 10. Successors and Assigns. This Agreement shall be binding
---------- ----------------------
upon the successors and assigns of the parties hereto. Except as stated herein,
this Agreement is not subject to any conditions or qualifications.
-8-
<PAGE>
IN WITNESS WHEREOF, The Colonial Life Insurance Company
of America and ___________________ have caused this Agreement to be executed on
their behalf and have this day caused their respective corporate seals to be
affixed by their duly authorized officers.
THE COLONIAL LIFE INSURANCE
COMPANY OF AMERICA, SETTLOR
AND ISSUING COMPANY
By:______________________________
Title:___________________________
________________________, TRUSTEE
By:______________________________
Title:___________________________
s:\write\trust.krt
-9-
<PAGE>
Exhibit 12
MEMORANDUM REGARDING RELIANCE ON ORDER OF THE COMMISSION
<PAGE>
[LOGO OF CHUBB LIFEAMERICA APPEARS HERE]
- --------------------------------------------------------------------------------
One Granite Place, P.0. Box 515, Concord, NH 03302 . (603) 226-5000
MEMORANDUM REGARDING RELIANCE ON ORDER OF THE
SECURITIES AND EXCHANGE COMMISSION
Registrant, in deducting from premium payments what is commonly referred to as a
"DAC tax" charge, will rely on the order of exemption from Section 27(c) (2) of
the 1940 Act, and Rules 6e-3 (T) (b) (13) and (c) (4) thereunder, granted on
August 10, 1994 to Chubb Life Insurance Company of America ("Chubb Life") and
its Chubb Separate Account C; which order also granted relief to certain future
policies and separate accounts, including those established by life insurance
companies affiliated with Chubb Life. (See Investment Company Act Release No.
20471; File No. 812-8720.)
/s/ Kurt W. Bernlohr
Kurt W. Bernlohr
Assistant Counsel
Chubb LifeAmerica is the servicemark of
Chubb Life Insurance Company of America . The Colonial Life Insurance
Company of America
Chubb Sovereign Life Insurance Company
<PAGE>
Exhibit 12 (b)
MEMORANDUM REGARDING RELIANCE ON ORDER OF THE COMMISSION TO
DEDUCT THE DAC TAX CHARGE
<PAGE>
[CHUBB LIFEAMERICA LOGO APPEARS HERE]
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One Granite Place, P.O. Box 515, Concord, NH 03302 . (603) 226-5000
June 22, 1995
The Colonial Insurance Company of America
One Granite Place
Concord, New Hampshire 03301
Re: Colonial Separate Account D
Gentlemen:
This opinion is furnished in connection with an Order of Exemption, pursuant to
section 6(c) of the Investment Company Act of 1940 from section 27(c) (2) of the
Act and rules 6e-3(T) (b) (13) and 6e-3(T) (c) (4) thereunder, granted on August
10, 1994 to Chubb Life Insurance Company of America ("Chubb Life") and its Chubb
Separate Account C; which order also granted relief to certain future policies
and separate accounts, including those established by life insurance companies
affiliated with Chubb Life. Chubb Life Insurance Company of America, et.al.,
Release No. IC-20401 (July 12, 1994) (notice) and Release No. IC-20471 (Aug. 10,
1994) (order).
This opinion covers Colonial Separate Account D of The Colonial Insurance
Company of America ("Colonial Life"), a wholly-owned subsidiary of Chubb Life,
to support certain group flexible premium variable life insurance policies and
certificates and group joint and last survivor flexible premium variable life
insurance policies and certificates ("collectively, "flexible premium
contracts") issued by Colonial Life and Chubb Securities Corporation.
I am familiar with the financial impact of the increased federal tax burden
under Section 848 of the Internal Revenue Code of 1986, as amended, resulting
from the receipt of premiums for the flexible premium contracts, and I am
familiar with the Order of Exemption. In my opinion:
1. The DAC Tax charge is reasonable is relation to Colonial Life's increased
federal tax burden under Section 848 resulting from the receipt of
premiums.
2. The targeted rate of return used to calculate the DAC Tax charge is
reasonable.
3. The factors taken into account by Colonial Life to determine the targeted
rate of return are appropriate for this purpose.
Chubb LifeAmerica is the servicemark of
Chubb Life Insurance Company of America . The Colonial Life Insurance
Company of America
Chubb Sovereign Life Insurance Company
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The Colonial Life Insurance Company
of America
June 22, 1995
Page Two
I hereby consent to the use of this opinion as an Exhibit to Pre-Effective
Amendment No. 1 to the Registration Statement on Form S-6 filed in connection
with the registration 0f interests in Colonial Separate Account D.
/S/ Michael J. LeBoeuf
Michael J. LeBoeuf, FSA: MAAA;
Assistant Vice President and
Product Actuary
<PAGE>
Exhibit 14
POWER OF ATTORNEY
<PAGE>
POWER OF ATTORNEY
The undersigned directors and/or officers of Chubb Life Insurance Company of
America, a New Hampshire corporation (the "Company"), hereby constitute and
appoint Theresa M. Stone, Richard V. Werner and Frederick H. Condon, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her name, place and stead, to
execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 or the Investment Company Act of
1940 (the "Acts"): registration statements on any form or forms under the Acts,
and any and all amendments and supplements thereto (including post-effective
amendments), with all exhibits and all agreements, consents, exemptive
applications and other documents and instruments necessary or appropriate in
connection therewith, each of said attorneys-in-fact and agents being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand,
this 8th day of December, 1995.
/s/ John C. Beck, Director /s/ Gertrude G. Michelson, Director
------------------------------ -------------------------------
John C. Beck, Director Gertrude G. Michelson, Director
/s/ Percy Chubb /s/ Dean R. O'Hare
------------------------------ -------------------------------
Percy Chubb, III Vice Chairman Dean R. O'Hare, Chairman
and Director and Director
/s/ Joel J. Cohen /s/ Warren B. Rudman
------------------------------ -------------------------------
Joel J. Cohen, Director Warren B. Rudman, Director
/s/ Henry U. Harder /s/ David G. Scholey
------------------------------ -------------------------------
Henry U. Harder, Director David G. Scholey, Director
/s/ David H. Hoag /s/ Raymond G. Seitz
------------------------------ -------------------------------
David H. Hoag, Director Raymond G. Seitz, Director
/s/ Robert V. Lindsay /s/ Lawrence M. Small
------------------------------ -------------------------------
Robert V. Lindsay, Director Lawrence M. Small, Director
/s/ Thomas C. MacAvoy /s/ Richard D. Wood
------------------------------ -------------------------------
Thomas C. MacAvoy, Director Richard D. Wood, Director
<PAGE>
POWER OF ATTORNEY
The undersigned directors and/or officers of Chubb Life Insurance Company of
America, a New Hampshire corporation (the "Company"), hereby constitute and
appoint Theresa M. Stone, Richard V. Werner and Frederick H. Condon, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her name, place and stead, to
execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 or the Investment Company Act of
1940 (the "Acts"): registration statements on any form or forms under the Acts,
and any and all amendments and supplements thereto (including post-effective
amendments), with all exhibits and all agreements, consents, exemptive
applications and other documents and instruments necessary or appropriate in
connection therewith, each of said attorneys-in-fact and agents being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand,
this 8th day of December, 1995.
/s/ John C. Beck, Director /s/ Gertrude G. Michelson, Director
------------------------------ -------------------------------
John C. Beck, Director Gertrude G. Michelson, Director
/s/ Percy Chubb /s/ Dean R. O'Hare
------------------------------ -------------------------------
Percy Chubb, III, Vice Chairman Dean R. O'Hare, Chairman
and Director and Director
/s/ Joel J. Cohen /s/ Warren B. Rudman
------------------------------ -------------------------------
Joel J. Cohen, Director Warren B. Rudman, Director
/s/ Henry U. Harder /s/ David G. Scholey
------------------------------ -------------------------------
Henry U. Harder, Director David G. Scholey, Director
/s/ David H. Hoag /s/ Raymond G. Seitz
------------------------------ -------------------------------
David H. Hoag, Director Raymond G. Seitz, Director
/s/ Robert V. Linsay /s/ Lawrence M. Small
------------------------------ -------------------------------
Robert V. Linsay, Director Lawrence M. Small, Director
/s/ Thomas C. MacAvoy /s/ Richard D. Wood
------------------------------ -------------------------------
Thomas C. MacAvoy, Director Richard D. Wood, Director
<PAGE>
POWER OF ATTORNEY
The undersigned directors and/or officers of Chubb Life Insurance Company of
America, a New Hampshire corporation (the "Company"), hereby constitute and
appoint Theresa M. Stone, Richard V. Werner and Frederick H. Condon, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her name, place and stead, to
execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 or the Investment Company Act of
1940 (the "Acts"): registration statements on any form or forms under the Acts,
and any and all amendments and supplements thereto (including post-effective
amendments), with all exhibits and all agreements, consents, exemptive
applications and other documents and instruments necessary or appropriate in
connection therewith, each of said attorneys-in-fact and agents being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand,
this 8th day of December, 1995.
/s/ John C. Beck /s/ Gertrude G. Michelson
------------------------------ -------------------------------
John C. Beck, Director Gertrude G. Michelson, Director
/s/ Percy Chubb /s/ Dean R. O'Hare
------------------------------ -------------------------------
Percy Chubb, III, Vice Chairman Dean R. O'Hare, Chairman
and Director and Director
/s/ Joel J. Cohen /s/ Warren B. Rudman
------------------------------ -------------------------------
Joel J. Cohen, Director Warren B. Rudman, Director
/s/ Henry U. Harder /s/ David G. Scholey
------------------------------ -------------------------------
Henry U. Harder, Dirctor David G. Scholey, Director
/s/ David H. Hoag /s/ Raymond G. Seitz
------------------------------ -------------------------------
David H. Hoag, Director Raymond G. Seitz, Director
/s/ Robert V. Lindsay /s/ Lawrence M. Small
------------------------------ -------------------------------
Robert V. Lindsay, Director Lawrence M. Small, Director
/s/ Thomas C. MacAvoy /s/ Richard D. Wood
------------------------------ -------------------------------
Thomas C. MacAvoy, Director Richard D. Wood, Director
<PAGE>
POWER OF ATTORNEY
The undersigned directors and/or officers of Chubb Life Insurance Company of
America, a New Hampshire corporation (the "Company"), hereby constitute and
appoint Theresa M. Stone, Richard V. Werner and Frederick H. Condon, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her name, place and stead, to
execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 or the Investment Company Act of
1940 (the "Acts"): registration statements on any form or forms under the Acts,
and any and all amendments and supplements thereto (including post-effective
amendments), with all exhibits and all agreements, consents, exemptive
applications and other documents and instruments necessary or appropriate in
connection therewith, each of said attorneys-in-fact and agents being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand,
this 8th day of December, 1995.
/s/ John C. Beck /s/ Gertrude G. Michelson
------------------------------ -------------------------------
John C. Beck, Director Gertrude G. Michelson, Director
/s/ Percy Chubb, III /s/ Dean R. O'Hare
------------------------------ -------------------------------
Percy Chubb, III, Vice Chairman Dean R. O'Hare, Chairman
and Director and Director
/s/ Joel J. Cohen /s/ Warren B. Rudman
------------------------------ -------------------------------
Joel J. Cohen, Director Warren B. Rudman, Director
/s/ Henry U. Harder /s/ David G. Scholey
------------------------------ -------------------------------
Henry U. Harder, Director David G. Scholey, Director
/s/ David H. Hoag /s/ Raymond G. Seitz
------------------------------ -------------------------------
David H. Hoag, Director Raymond G. Seitz, Director
/s/ Robert V. Lindsay /s/ Lawrence M. Small
------------------------------ -------------------------------
Robert V. Lindsay, Director Lawrence M. Small, Director
/s/ Thomas C. MacAvoy /s/ Richard D. Wood
------------------------------ -------------------------------
Thomas C. MacAvoy, Director Richard D. Wood, Director
<PAGE>
POWER OF ATTORNEY
The undersigned directors and/or officers of Chubb Life Insurance Company of
America, a New Hampshire corporation (the "Company"), hereby constitute and
appoint Theresa M. Stone, Richard V. Werner and Frederick H. Condon, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her name, place and stead, to
execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933 or the Investment Company Act of
1940 (the "Acts"): registration statements on any form or forms under the Acts,
and any and all amendments and supplements thereto (including post-effective
amendments), with all exhibits and all agreements, consents, exemptive
applications and other documents and instruments necessary or appropriate in
connection therewith, each of said attorneys-in-fact and agents being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand,
this 8th day of December, 1995.
/s/ John C. Beck /s/ Gertrude G. Michelson
------------------------------ -------------------------------
John C. Beck, Director Gertrude G. Michelson, Director
/s/ Percy Chubb /s/ Dean R. O'Hare
------------------------------ -------------------------------
Percy Chubb, III, Vice Chairman Dean R. O'Hare, Chairman
and Director and Director
/s/ Joel J. Cohen /s/ Warren B. Rudman
------------------------------ -------------------------------
Joel J. Cohen, Director Warren B. Rudman, Director
/s/ Henry U. Harder /s/ David G. Scholey
------------------------------ -------------------------------
Henry U. Harder, Director David G. Scholey, Director
/s/ David H. Hoag /s/ Raymond G. Seitz
------------------------------ -------------------------------
David H. Hoag, Director Raymond G. Seitz, Director
/s/ Robert V. Lindsay /s/ Lawrence M. Small
------------------------------ -------------------------------
Robert V. Lindsay, Director Lawrence M. Small, Director
/s/ Thomas C. MacAvoy /s/ Richard D. Wood
------------------------------ -------------------------------
Thomas C. MacAvoy, Director Richard D. Wood, Director
