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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. 1 (File No. 33-57731)
Post-Effective Amendment No.
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 X
Amendment No. 1 (File No. 812-9484)
APL VARIABLE ANNUITY ACCOUNT 1
___________________________________________________________________
(Exact Name of Registrant)
American Partners Life Insurance Company
___________________________________________________________________
(Name of Depositor)
80 South 8th Street, P.O. Box 534, Minneapolis, MN 55440-0534
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612)
Mary Ellyn Minenko, IDS Tower 10, Minneapolis, MN 55440-0010
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing will become effective Sept. 15,
1995 or as soon as practicable thereafter. (check appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485
on (date) pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(i) of Rule 485
on (date) pursuant to paragraph (a)(i) of Rule 485
75 days after filing pursuant to paragraph (a)(ii)
on (date) pursuant to paragraph (a)(ii) of rule 485
If appropriate, check the following box:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Calculation of Registration Fee Under the Securities Act of 1933
DECLARATION REQUIRED BY RULE 24f-2(a)(1)
The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Section
24-f of the Investment Company Act of 1940.
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<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
Cross reference sheet showing location in the prospectus and Statement of Additional
Information of the information called for by the items enumerated in Part A and B of Form N-4.
Negative answers omitted from prospectus and Statement of Additional Information are so indicated.
PART A PART B
Section in
Section Statement of
Item No. in Prospectus Item No. Additional Information
<C> <C> <C> <C>
1 Cover page 15 Cover page
2 Key terms 16 Table of contents
3(a) Expense summary 17(a) Depositor
(b) The Annuity in brief (b) NA
(c) About American Partners Life*
4(a) Condensed financial
information 18(a) NA
(b) Performance information (b) NA
(c) Financial statements (c) Independent auditors
(d) NA
5(a) Cover page; About (e) NA
American Partners Life (f) NA
(b) The variable account
(c) The funds 19(a) Distribution of the contracts*
(d) Cover page; The funds About American Partners Life*
(e) Voting rights (b) NA
(f) NA
20(a) Principal underwriter
6(a) Charges (b) Principal underwriter
(b) Charges (c) NA
(c) Charges (d) NA
(d) NA
(e) The funds 21(a) Performance information
(f) NA (b) Performance information
7(a) Buying your annuity; 22 Calculating Annuity Payouts
Benefits in case of
death; 23(a) Financial Statements
The annuity payout (b) Financial Statements
period
(b) The variable account;
Making the most of your
annuity
(c) The funds; Charges
(d) Cover page
8(a) The annuity payout period
(b) Buying the annuity
(c) The annuity payout period
(d) The annuity payout period
(e) The annuity payout period
(f) The annuity payout period
9(a) Benefits in case of death
(b) Benefits in case of death
10(a) Buying your annuity;
Valuing your investment
(b) Valuing your investment
(c) Buying your annuity; Valuing
your investment
(d) About American Partners Life
11(a) Surrendering your contract
(b) NA
(c) Surrendering your contract
(d) Buying your annuity
(e) The annuity in brief
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12(a) Taxes
(b) Key terms
(c) NA
13 NA
14 Table of contents of the
Statement of Additional Information
*Designates section in the prospectus, which is hereby incorporated by reference
in this Statement of Additional Information.
</TABLE>
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Privileged Assets (registered trademark symbol) Select Annuity
Prospectus/_____________, 1995
The Privileged Assets (registered trademark symbol) Select Annuity
is a flexible premium deferred fixed/variable annuity contract
offered by American Partners Life Insurance Company (American
Partners Life), a subsidiary of IDS Life Insurance Company (IDS
Life), which is a subsidiary of American Express Financial
Corporation. Purchase payments may be allocated among different
accounts, providing variable and/or fixed returns. Through the
subaccounts of the variable account, you can invest in mutual funds
which are managed to meet a variety of investment objectives. The
contract value will vary according to the investment performance of
the funds you select. You bear the entire investment risk under
the contract.
The annuity is available for non-qualified and certain qualified
retirement plans. The annuity offers tax-deferred asset
accumulation. This may be particularly attractive to investors in
high federal and state tax brackets who have made maximum
contributions to employer-sponsored retirement programs and IRAs.
The annuity has no front-end sales charge, nor does it have a
redemption or surrender charge.
The Privileged Assets Select Annuity is designed to allow you to
build up funds for retirement. When you need to access your money,
such as at retirement, you may do so in several ways including the
following: you may take a monthly fixed annuity payout for the
lifetime of the annuitant(s) you have designated, or you may take a
lump-sum, a fixed amount per month or the earnings on the annuity.
APL Variable Annuity Account 1
Sold by: American Partners Life Insurance Company.
Service Office: 80 South Eighth Street, P.O. Box 59197,
Minneapolis, MN 55459-0197.
Telephone: 1-800-AXP-SERV.
THIS PROSPECTUS CONTAINS THE INFORMATION ABOUT THE VARIABLE
ACCOUNTS THAT YOU SHOULD KNOW BEFORE INVESTING. Refer to "The
variable accounts" in this prospectus.
THE PROSPECTUS IS ACCOMPANIED OR PRECEDED BY THE FOLLOWING
PROSPECTUSES: THE RETIREMENT ANNUITY MUTUAL FUND PROSPECTUS
(DESCRIBING IDS LIFE AGGRESSIVE GROWTH FUND, IDS LIFE INTERNATIONAL
EQUITY FUND, IDS LIFE CAPITAL RESOURCE FUND, IDS LIFE MANAGED FUND,
INC., IDS LIFE SPECIAL INCOME FUND, INC. AND IDS LIFE MONEYSHARE
FUND, INC.) THE INVESCO VARIABLE INVESTMENT FUNDS, INC. PROSPECTUS
(DESCRIBING INVESCO VIF-INDUSTRIAL INCOME PORTFOLIO); THE
MONTGOMERY VARIABLE SERIES: EMERGING MARKETS FUND PROSPECTUS; AND
THE MONTGOMERY VARIABLE SERIES: GROWTH FUND PROSPECTUS. PLEASE
KEEP THESE PROSPECTUSES FOR FUTURE REFERENCE.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
AMERICAN PARTNERS LIFE IS NOT A FINANCIAL INSTITUTION, AND THE
SECURITIES IT OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY ANY FINANCIAL INSTITUTION NOR ARE THEY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY.
A Statement of Additional Information (SAI) dated _________, 1995
(incorporated by reference into this prospectus) has been filed
with the Securities and Exchange Commission (SEC), and is available
without charge by contacting American Partners Life at the
telephone number above or by completing and sending the order form
on the last page of this prospectus. The table of contents of the
SAI is on the last page of this prospectus.
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Contents
Key terms.....................................................
The Privileged Assets (registered trademark symbol) Select
Annuity in brief..............................................
Expense summary...............................................
Condensed financial information...............................
Financial statements..........................................
Performance information.......................................
The variable account..........................................
The funds.....................................................
IDS Life Aggressive Growth Fund..........................
IDS Life International Equity Fund.......................
IDS Life Capital Resource Fund...........................
IDS Life Managed Fund....................................
IDS Life Special Income Fund.............................
IDS Life Moneyshare Fund.................................
INVESCO VIF-Industrial Income Portfolio..................
Montgomery Variable Series: Emerging Markets Fund........
Montgomery Variable Series: Growth Fund..................
The fixed account.............................................
Buying your annuity...........................................
Setting the annuity start date...........................
Beneficiary..............................................
Three ways to make purchase payments.....................
Charges.......................................................
Contract administrative charge...........................
Mortality and expense risk fee...........................
Premium taxes............................................
Other information on charges.............................
Valuing your investment.......................................
Number of units..........................................
Accumulation unit value..................................
Net investment factor....................................
Factors that affect variable account
accumulation units....................................
Making the most of your annuity...............................
Automated dollar-cost averaging..........................
Transferring money between accounts......................
Transfer policies........................................
Three ways to request a transfer or a surrender..........
Surrendering your contract....................................
Surrender policies.......................................
Receiving payment when you request a surrender...........
Changing ownership............................................
Benefits in case of death.....................................
The annuity payout period.....................................
Annuity payout plans.....................................
Death after annuity payouts begin........................
Taxes.........................................................
Voting rights.................................................
About American Partners Life..................................
Substitution of investments...................................
Distribution of the contracts.................................
Regular and special reports...................................
Table of contents of the Statement of Additional
Information................................................
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Key terms
These terms can help you understand details about your annuity.
American Partners Life - In this prospectus, "we," "us," "our" and
"American Partners Life" refer to American Partners Life Insurance
Company.
Annuity - A contract purchased from an insurance company that
offers tax-deferred growth of the contract owner's investment until
earnings are withdrawn, and that can be tailored to meet the
specific needs of the individual during retirement.
Accumulation unit - A measure of the value of each variable account
before annuity payouts begin.
Annuitant - The person on whose life or life expectancy the payouts
are based.
Annuity payout - An amount paid at regular intervals under one of
several plans available to the owner and/or any other payee. This
amount is paid on a fixed basis.
Annuity start date - The date when annuity payouts are scheduled to
begin. This date is established when you start your contract. As
your financial goals change, you may change the annuity start date.
Beneficiary - The person designated to receive annuity benefits in
case of the owner's or annuitant's death.
Close of business - When the New York Stock Exchange (NYSE) closes,
normally 4 p.m. Central time.
Code - Internal Revenue Code of 1986, as amended.
Contract value - Your total purchase payments, plus investment
return, less any contract administrative charges and premium tax
charges.
Contract year - A period of 12 months, starting on the effective
date of your contract and on each anniversary of the effective
date.
Fixed account - An account to which you may allocate purchase
payments. Amounts allocated to this account earn interest at rates
that are declared periodically by American Partners Life.
Mutual funds (funds) - Mutual funds or portfolios, each with a
different investment objective. (See "The funds.") You may
allocate your purchase payments into variable subaccounts investing
in shares of any or all of these funds.
Owner (you, your) - The person who controls the annuity (decides on
investment allocations, transfers, payout options, etc.) Usually,
but not always, the owner is also the annuitant. The owner is
responsible for taxes, regardless of whether he or she receives the
annuity's benefits.
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Purchase payments - Payments made to American Partners Life for an
annuity.
Qualified annuity - An annuity purchased for a retirement plan
that is subject to applicable federal law and any rules of the plan
itself. These plans include:
o Individual Retirement Annuities (IRAs), including rollovers from
qualified plans
o Simplified Employee Pension (SEP) Plans
All other annuities are considered nonqualified annuities.
Surrender value - The amount you are entitled to receive if you
surrender your annuity. It is the contract value minus any
applicable state premium taxes. No surrender charge will apply.
Valuation date - Any normal business day, Monday through Friday,
that the NYSE is open. The value of each variable subaccount is
calculated at the close of business on each valuation date.
Variable account - An account consisting of separate subaccounts to
which you may allocate purchase payments; each invests in shares of
one mutual fund. (See "The variable account.") The value of your
investment in each variable subaccount changes with the performance
of the particular fund.
The Privileged Assets (registered trademark symbol) Select Annuity
in brief
Purpose: The Privileged Assets (registered trademark symbol)
Select Annuity is designed to allow you to build up funds for
retirement. You do this by making one or more investments
(purchase payments) that may earn returns that increase the value
of the annuity. Beginning at a specified future date (the annuity
start date), the annuity provides lifetime or other forms of
payouts to you or to anyone you designate.
Accounts: You may allocate your purchase payments among any or all
of:
o variable subaccounts, each of which invests in a mutual fund
with a particular investment objective. The value of each
variable subaccount varies with the performance of the
particular fund. Therefore the contract value at the annuity
start date may be more or less than the total of purchase
payments allocated to the variable subaccounts. (p.)
o a fixed account, which earns interest at rates that are declared
periodically by American Partners Life. The guaranteed minimum
interest rate is 3%. (p.)
Buying the annuity: You can purchase an annuity contract by
submitting a complete application. Applications are subject to
acceptance at our service office. You may buy a nonqualified
annuity or a qualified annuity. Payment may be made either in a
lump sum with the option of additional payments in the future or
installments:<PAGE>
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o Minimum purchase payment - $2,000 ($1,000 for qualified
annuities) unless you pay in installments by means of a bank
authorization or under a group billing arrangement such as
payroll deduction at a rate of $100/month or more or other
payment plan acceptable to us.
o Minimum additional payment - $100.
o Maximum first-year payment(s) - $50,000 to $1,000,000 depending
on your age.
o Maximum payment for each subsequent year - $50,000. (p.)
Ten-day free look: You may return your contract for a refund
within 10 days after you receive it. The portion of your first
purchase payment allocated to the variable account must be invested
initially in the IDS Life Moneyshare subaccount for the period we
estimate or calculate your free look right to be in existence
(generally 15 days after the contract date or 25 days if you are
replacing an existing annuity).
If you choose not to keep your contract, return it to us within the
free look period. The contract will be canceled and we will refund
promptly the greater of (1) your purchase payment without
investment earnings, or (2) your contract value plus any amount
deducted from your payment prior to allocation to the variable
account or the fixed account.
Transfers: Subject to certain restrictions you may re-allocate
your money among accounts without charge at any time until annuity
payouts begin. You may establish automated transfers among the
fixed account and variable subaccount(s) and you may request a
transfer by telephone. (p.)
Surrenders: You may surrender all or part of your contract value at
any time before the annuity start date. You also may establish
systematic surrenders. There is no surrender charge. Amounts you
surrender may be taxable (and include a 10% penalty if surrenders
are made prior to your reaching age 59 1/2); and have other tax
consequences; also, certain restrictions apply. (p.)
Changing ownership: You may change ownership of a nonqualified
annuity by written instruction. However, such changes of
nonqualified annuities may have federal income tax consequences.
Certain restrictions apply concerning change of ownership of a
qualified annuity. (p.)
Payment in case of death: If you or the annuitant dies before
annuity payouts begin, we will pay the beneficiary the greater of
the contract value or total purchase payments made less partial
surrenders. (p.)
Annuity payouts: The contract value of your investment can be
applied to an annuity payout plan that begins on the annuity start
date. You may choose from a variety of plans to make sure that
payouts continue as long as they are needed. If you purchased a
qualified annuity, the payout schedule must meet requirements of
the qualified plan. Payouts will be made on a fixed basis. (p.)
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Taxes: Generally, your annuity grows tax-deferred until you
surrender it or begin to receive payouts. (Under certain
circumstances, IRS penalty taxes may apply.) Even if you direct
payouts to someone else, you will still be taxed on the income if
you are the owner. (p.)
Charges: Your Privileged Assets Select Annuity is subject to a $30
annual contract administrative charge, a 1% mortality and expense
risk charge, and any premium taxes that may be imposed by state or
local governments. Premium taxes are deducted either from your
purchase payments or upon full surrender or when annuity payments
begin. (p.)
Expense summary
The purpose of this summary is to help you understand the various
costs and expenses associated with the Privileged Assets Select
Annuity.
You pay no sales charge when you purchase the Privileged Assets
Select Annuity nor do you pay a surrender charge if you surrender
your annuity. All costs that you bear directly or indirectly for
the variable subaccounts and underlying mutual funds are shown
below. Some expenses may vary as explained under "Contract
charges."
Direct charge. This charge is deducted directly from the contract
value.
Annual contract administrative charge: $30. If the total purchase
payments (less partial surrenders) is at least $10,000, we will
waive the charge.
Indirect charges. The variable account pays these expenses out of
its assets. They are reflected in the variable subaccounts' daily
accumulation unit value and are not charged directly to your
account. They include:
Mortality and expense risk fee: 1% per year, deducted from the
variable subaccounts as a percentage of the average daily net
assets of the underlying fund.
Operating expenses of underlying mutual funds: management fees and
other expenses deducted as a percentage of average net assets as
follows: *
<TABLE>
<CAPTION>
IDS Life IDS Life IDS Life IDS Life
Aggressive International Capital IDS Life Special IDS Life
Growth Equity Resource Managed Income Moneyshare
<S> <C> <C> <C> <C> <C> <C>
Management fees .64% .89% .64% .64% .64% .54%
Other expenses .04 .16 .04 .04 .04 .02
Total** .68% 1.05% .68% .68% .68% .56%
</TABLE>
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<TABLE><CAPTION>
INVESCO VIF Montgomery
Industrial Variable Series: Montgomery Variable
Income Emerging Markets Series: Growth
<S> <C> <C> <C>
Management fees .75% 1.25% 1.00%
Other expenses .15 .50 .25
Total** .90% 1.75% 1.25%
</TABLE>
* Premium taxes imposed by some state and local governments are not
reflected in this table.
** Annualized operating expenses of underlying mutual funds for the
year ended Dec. 31, 1994. The figures given above reflect the
amounts actually deducted during 1994, except for three funds. The
INVESCO VIF - Industrial Income Portfolio commenced investment
operations on Aug. 10, 1994, and therefore the expenses for this
Portfolio are annualized. The Montgomery Variable Series: Growth
Fund was not in operation in 1994; its expenses for 1995 and 1996
are estimated to be 1.25% after fee waiver and expense
reimbursement and 1.56% without such waiver and reimbursement. The
Montgomery Variable Series: Emerging Markets Fund was not in
operation in 1994; its expenses for 1995 and 1996 are estimated to
be 1.75% after fee waiver and expense reimbursement in each year,
2.20% without such waiver and reimbursement for 1995, and 1.95%
without such waiver and reimbursement for 1996. As of the date of
this prospectus, certain fees are being waived or expenses are
being assumed by the respective investment managers or service
providers for certain of the underlying mutual funds, in each case
on a voluntary basis. Without such waivers or reimbursements, the
Total Portfolio Annual Expenses that would have been incurred for
the last completed fiscal year would be: 32.55% for the INVESCO VIF
- - Industrial Income Portfolio. See the Portfolios' prospectus for
a discussion of fee waiver and expense reimbursements.
Example:* You would pay the following expenses on a $1,000
investment, assuming 5% annual return and surrender, no surrender
or selection of an annuity payout plan at the end of each time
period:
<TABLE><CAPTION>
IDS Life IDS Life IDS Life IDS Life
Aggressive International Capital IDS Life Special IDS Life
Growth Equity Resource Managed Income Moneyshare
<S> <C> <C> <C> <C> <C> <C> <C>
1 year $ 20.15 $ 23.94 $ 20.15 $ 20.15 $ 20.15 $ 18.92
3 years 62.28 73.72 62.28 62.28 62.28 58.55
5 years 106.95 126.12 106.95 106.95 106.95 100.67
10 years 230.85 269.56 230.85 230.85 230.85 217.99
INVESCO VIF Montgomery
Industrial Variable Series: Montgomery Variable
Income Emerging Markets Series: Growth
1 year $ 22.41 $ 31.12 $ 25.99
3 years 69.09 95.13 79.87
5 years 118.39 161.58 136.36
10 years 254.04 339.01 289.90
</TABLE>
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This example should not be considered a representation of past or
future expenses. Actual expenses may be more or less than those
shown.
* In this example, the $30 annual contract administrative charge is
approximated as a .286% charge based on our estimated average
contract size.
Financial statements
The SAI dated ____________, 1995, contains:
The statutory financial statements of American Partners Life
including:
-balance sheets as of Dec. 31, 1994 and Dec. 31, 1993
-related statements of operations, changes in capital and
surplus and cash flows for the years ended Dec. 31, 1994 and
1993
and the unaudited statutory financial statements for American
Partners Life including:
-balance sheet as of June 30, 1995 and
-related statements of operations, changes in capital and
surplus and cash flows for the six months ended June 30,
1995.
Performance information
Performance information for the variable subaccounts may appear
from time to time in advertisements or sales literature. In all
cases, such information reflects the performance of a hypothetical
investment in a particular account during a particular time period.
Calculations are performed as follows:
Simple yield - IDS Life Moneyshare Subaccount: Income over a given
seven-day period (not counting any change in the capital value of
the investment) is annualized (multiplied by 52) by assuming that
the same income is received for 52 weeks. This annual income is
then stated as an annual percentage return on the investment.
Compound yield - IDS Life Moneyshare Subaccount: Calculated like
simple yield, except that, when annualized, the income is assumed
to be reinvested. Compounding of reinvested returns increases the
yield as compared to a simple yield.
Yield - IDS Life Special Income Subaccount: Net investment income
(income less expenses) per accumulation unit during a given 30-day
period is divided by the value of the unit on the last day of the
period. The result is converted to an annual percentage.
Average annual total return: Expressed as an average annual
compounded rate of return of a hypothetical investment over a
period of one, five and ten years (or up to the life of the
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PAGE 13
subaccount if it is less than ten years old). This figure reflects
deduction of all applicable charges, including the contract
administrative charge, and mortality and expense risk fee.
Aggregate total return: Represents the cumulative change in value
of an investment for a given period (reflecting change in a
subaccount's accumulation unit value). The calculation assumes
reinvestment of investment earnings and reflects deduction of all
applicable charges, including the contract administrative charge
and mortality and expense risk fee. Aggregate total return may be
shown by means of schedules, charts or graphs.
Performance information should be considered in light of the
investment objectives and policies, characteristics and quality of
the fund in which the subaccount invests, and the market conditions
during the given time period. Such information is not intended to
indicate future performance. Because advertised yields and total
return figures include all charges attributable to the annuity,
which has the effect of decreasing advertised performance,
subaccount performance should not be compared to that of mutual
funds that sell their shares directly to the public. (See the SAI
for a further description of methods used to determine yield and
total return for the subaccounts.)
If you would like additional information about actual performance,
contact American Partners Life.
The variable account
Purchase payments can be allocated to any or all of the subaccounts
of the variable account that invest in shares of the following
funds:
Subaccount
IDS Life Aggressive Growth Fund CAG
IDS Life International Equity Fund CIE
IDS Life Capital Resource Fund CCR
IDS Life Managed Fund CMG
IDS Life Special Income Fund CSI
IDS Life Moneyshare Fund CMS
INVESCO VIF - Industrial Income Portfolio CII
Montgomery Variable Series: Emerging Market Fund CEM
Montgomery Variable Series: Growth Fund CGR
Each variable subaccount meets the definition of a separate account
under federal securities laws. Income, capital gains and capital
losses of each subaccount are credited or charged to that account
alone. No subaccount will be charged with liabilities of any other
variable account or of our general business. The obligations
arising under the contracts are general obligations of American
Partners Life.
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PAGE 14
The variable account was established under Arizona law and is
registered as a unit investment trust under the Investment Company
Act of 1940 (the 1940 Act). This registration does not involve any
supervision of our management or investment practices and policies
by the SEC.
The funds
IDS Life Aggressive Growth Fund
Objective: capital appreciation. Invests primarily in common stock
of small- and medium-size companies.
IDS Life International Equity Fund
Objective: capital appreciation. Invests primarily in common stock
of foreign issuers and foreign securities convertible into common
stock.
IDS Life Capital Resource Fund
Objective: capital appreciation. Invests primarily in U.S. common
stocks listed on national securities exchanges and other securities
convertible into common stock, diversified over many different
companies in a variety of industries.
IDS Life Managed Fund
Objective: maximum total investment return. Invests primarily in
U.S. common stocks listed on national securities exchanges,
securities convertible into common stock, warrants, fixed income
securities (primarily high-quality corporate bonds) and money
market instruments.
IDS Life Special Income Fund
Objective: to provide a high level of current income while
conserving the value of the investment for the longest time period.
Invests primarily in high-quality, lower-risk corporate bonds
issued by many different companies in a variety of industries, and
in government bonds.
IDS Life Moneyshare Fund
Objective: maximum current income consistent with liquidity and
conservation of capital. Invests in high-quality money market
securities with remaining maturities of 13 months or less. The
fund also will maintain a dollar-weighted average portfolio
maturity not exceeding 90 days. The fund attempts to maintain a
constant net asset value of $1 per share.
INVESCO VIF - Industrial Income Portfolio
Objective: to seek the best possible current income while following
sound investment practices with capital growth potential as a
secondary consideration. Invests in securities providing a
relatively high yield and stable return and which, over a period of
years, also may provide capital appreciation.
Montgomery Variable Series: Emerging Markets Fund
Objective: capital appreciation. Invests, under normal market
conditions, at least 65% of its total assets in equity securities
of companies in countries having emerging markets.
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PAGE 15
Montgomery Variable Series: Growth Fund
Objective: capital appreciation and an emphasis on value. Invests,
under normal market conditions, at least 65% of its total assets in
the equity securities of domestic companies.
All funds are available to serve as the underlying investment for
variable annuities, and some funds are available to serve as the
underlying investment for variable annuities and variable life
insurance contracts (as well as to qualified pension and retirement
plans). It is conceivable that in the future it may be
disadvantageous for variable annuity separate accounts and variable
life insurance separate accounts to invest in the available funds
simultaneously. Although American Partners Life and the funds do
not currently foresee any such disadvantages either to variable
annuity contract owners or to variable life insurance policy
owners, the boards of directors or trustees of the appropriate
funds will monitor events in order to identify any material
conflicts between such contract owners and policy owners and to
determine what action, if any, should be taken in response to a
conflict. If a board were to conclude that separate funds should
be established for variable life insurance and variable annuity
separate accounts, the variable annuity contract holders would not
bear any expenses associated with establishing separate funds.
The Internal Revenue Service (IRS) has issued final regulations
relating to the diversification requirements under Section 817(h)
of the Code. Each mutual fund intends to comply with these
requirements.
The U.S. Treasury and the IRS have indicated they may provide
additional guidance concerning how many variable subaccounts may be
offered and how many exchanges among variable subaccounts may be
allowed before the owner is considered to have investment control,
and thus is currently taxed on income earned within variable
subaccount assets. We do not know at this time what the additional
guidance will be or when action will be taken. We reserve the
right to modify the contract, as necessary, to ensure that the
owner will not be subject to current taxation as the owner of the
variable subaccount assets.
We intend to comply with all federal tax laws to ensure that the
contract continues to qualify as an annuity for federal income tax
purposes. We reserve the right to modify the contract as necessary
to comply with any new tax laws.
IDS Life, IDS Tower 10, Minneapolis, MN 55440, is the investment
manager for each of the IDS Life Funds. INVESCO Funds Group, Inc.,
Post Office Box 173706, Denver, CO 80217-3706, is the investment
advisor for the INVESCO VIF - Industrial Income Portfolio.
Montgomery Asset Management, L.P., 600 Montgomery Street, San
Francisco, CA 94111 is the investment manager for each of the
Montgomery Variable Series funds. The investment managers for the
funds cannot guarantee that the funds will meet their investment
objectives. Please read the prospectuses for the funds for
complete information on investment risks, deductions, expenses and
<PAGE>
PAGE 16
other facts you should know before investing. They are available
by contacting American Partners Life at the address or telephone
number on the front of this publication.
The fixed account
Purchase payments can also be allocated to the fixed account. The
cash value of the fixed account increases as interest is credited
to the account. Purchase payments and transfers to the fixed
account become part of the general account of American Partners
Life, the company's main portfolio of investments. Interest is
credited daily and compounded annually. We guarantee a minimum
interest rate of 3%. We may declare the interest rates above the
guaranteed rate from time to time.
Because of exemptive and exclusionary provisions, interests in the
fixed account have not been registered under the Securities Act of
1933 (1933 Act), nor is the fixed account registered as an
investment company under the 1940 Act. Accordingly, neither the
fixed account nor any interests in it are generally subject to the
provisions of the 1933 or 1940 Acts, and we have been advised that
the staff of the SEC has not reviewed the disclosures in this
prospectus that relate to the fixed account. Disclosures regarding
the fixed account, however, may be subject to certain generally
applicable provisions of the federal securities laws relating to
the accuracy and completeness of statements made in prospectuses.
Buying your annuity
Our representative can help you prepare and submit your
application. Alternatively, you may ask us for the forms and
prepare them yourself. As the owner, you have all rights and may
receive all benefits under the contract. Annuities cannot be owned
in joint tenancy. (In Pennsylvania, you cannot be an annuitant if
you are 79 or older.)
When you apply, you can select:
o the account(s) in which you want to invest;
o how you want to make purchase payments;
o the date you want to start receiving annuity payouts (the
annuity start date); and
o a beneficiary.
If your application is complete, we will process it and apply your
purchase payment to your account(s) within two days after we
receive it. If your application is accepted, we will send you a
contract. If we cannot accept your application within five days,
we will decline it and return your payment. We will credit
additional purchase payments you make to an existing contract to
your account(s) at the next close of business.
Setting the annuity start date
Annuity payouts will be scheduled to begin on the annuity start
date. This date can be aligned with your actual retirement from a
job, or it can be a different future date, depending on your needs
<PAGE>
PAGE 17
and goals and on certain restrictions. You can also change the
date, provided you send us written instructions at least 30 days
before annuity payouts begin.
For nonqualified annuities, the annuity start date must be:
o no earlier than the 60th day after the contract's effective
date; and
o no later than the annuitant's 85th birthday (or before the 10th
contract anniversary, if purchased after age 75).
For qualified annuities, to avoid IRS penalty taxes, the annuity
start date generally must be:
o on or after the annuitant reaches age 59 1/2; and
o by April 1 of the year following the calendar year when the
annuitant reaches age 70 1/2.
If you are taking the minimum IRA distributions as required by the
Code from another tax-qualified investment, or in the form of
partial surrenders from this annuity, annuity payouts can start as
late as the annuitant's 85th birthday or the 10th contract
anniversary.
Beneficiary
If death benefits become payable before the annuity start date,
your named beneficiary will receive all or part of the contract
value. If there is no named beneficiary, then you or your estate
will be the beneficiary. (See "Payment in case of death" for more
about beneficiaries.)
Minimum purchase payment
If single payment:
Nonqualified: $2,000
Qualified: $1,000
If installment payments:
$100 monthly; $50.00 biweekly
Installments must total at least $1,000 in the first year.*
*If you make no purchase payments for the most recent 24 months,
and your previous payments total $1,000 or less, we have the right
to give you 30 days' written notice and pay you the total value of
your contract in a lump sum. This restriction does not apply to
contracts sold to New Jersey residents.
Minimum additional purchase payment(s): $100
Maximum first-year payment(s):
This maximum is based on your age or age of the annuitant (whomever
is older) on the effective date of the contract.
Up to age 75 $1 million
76 to 85 $500,000
86 to 90 $50,000
<PAGE>
PAGE 18
Maximum payment for each subsequent year: $50,000**
**These limits apply in total to all American Partners Life
annuities you own. We reserve the right to increase maximum limits
or reduce age limits. For qualified annuities the qualified plan's
limits on annual contributions also apply.
Three ways to make purchase payments
1 By letter
Send your check along with your name and account number to:
Regular mail:
American Partners Life Insurance Company
80 South Eighth Street
P.O. Box 59197
Minneapolis, MN 55459-0197
Express mail:
American Partners Life Insurance Company
80 South Eighth Street
Minneapolis, MN 55402
2 By scheduled payment plan
Through:
o an automatic payroll deduction, or
o a bank authorization.
3 Other
o wire transfer; or
o other method acceptable to us.
Charges
Contract administrative charge
This charge is for establishing and maintaining your records. On
each contract anniversary we will deduct $30 from the contract
value. The deduction will be allocated among the subaccounts on a
pro-rata basis.
This charge will be waived for any contract year where the total
purchase payments (less partial surrenders) on the current contract
anniversary is $10,000 or more, or if, during the contract year, a
death benefit is payable or the contract is surrendered in full.
This charge does not apply after annuity payouts begin.
We do not expect to profit from the contract administrative charge.
While we do not currently plan to increase the charge we reserve
the right to increase the charge in the future. In no event will
<PAGE>
PAGE 19
the charge exceed $50 per year. Also, we reserve the right to
impose the charge on all contracts, including those with purchase
payments equal to or greater than $10,000.
Mortality and expense risk fee
This fee is to cover the mortality risk and expense risk and is
applied daily to the variable accounts and reflected in the unit
values of the accounts. Annually it totals 1% of their average
daily net assets. Approximately two-thirds of this amount is for
our assumption of mortality risk, and one-third is for our
assumption of expense risk. This fee does not apply to the fixed
account.
Mortality risk arises because of our guarantee to pay a death
benefit and our guarantee to make annuity payouts according to the
terms of the contract, no matter how long a specific annuitant
lives and no matter how long the entire group of American Partners
Life annuitants live. If, as a group, American Partners Life
annuitants outlive the life expectancy we have assumed in our
actuarial tables, then we must take money from our general assets
to meet our obligations. If, as a group, American Partners Life
annuitants do not live as long as expected, we could profit from
the mortality risk fee.
Expense risk arises because the contract administrative charge may
not cover our expenses. Any deficit would have to be made up from
our general assets. We could profit from the expense risk fee if
the annual contract administrative charge is more than sufficient
to meet expenses.
We do hope to profit from the mortality and expense risk fee. We
may use any profits realized from this fee for any proper corporate
purpose, including, among others, payment of distribution (selling)
expenses.
Premium taxes
Certain state and local governments impose premium taxes of up to
3.5%. These taxes are dependent upon the state of residence or the
state in which the contract was sold and are deducted as
applicable. In some cases, premium taxes are deducted from your
purchase payments before they are allocated. In other cases, the
deduction is made when you surrender your contract or when annuity
payouts begin.
Other information on charges
There is no surrender charge if you take a total or a partial
surrender from your contract.
In some cases lower sales and administrative expenses may be
incurred. In such cases, we may be able to reduce or eliminate the
contract administrative charge. However, we expect this to occur
infrequently.
Valuing your investment
Here is how your accounts are valued:
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PAGE 20
Fixed account: The amounts allocated to the fixed account are
valued directly in dollars and equal the sum of your purchase
payments plus interest earned, less any amounts surrendered or
transferred.
Variable subaccounts: Amounts allocated to the variable
subaccounts are converted into accumulation units. Each time you
make a purchase payment or transfer amounts into one of the
variable subaccounts, a certain number of accumulation units are
credited to your contract for that account. Conversely, each time
you take a partial surrender, transfer amounts out of a variable
subaccount, or are assessed a contract administrative charge, a
certain number of accumulation units are subtracted from your
contract.
The accumulation units are the true measure of investment value in
each subaccount during the accumulation period. They are related
to, but not the same as, the net asset value of the underlying
fund.
The dollar value of each accumulation unit can rise or fall daily
depending on the performance of the underlying mutual fund and on
certain fund expenses. Here is how unit values are calculated:
Number of units
To calculate the number of accumulation units for a particular
subaccount, we divide your investment, after deduction of any
premium taxes, by the current accumulation unit value.
Accumulation unit value
The current accumulation unit value for each variable subaccount
equals the last value times the subaccount's current net investment
factor.
Net investment factor
o Determined each business day by adding the underlying mutual
fund's current net asset value per share plus per-share amount
of any current dividend or capital gain distribution; then
o dividing that sum by the previous net asset value per share; and
o subtracting the percentage factor representing the mortality and
expense risk fee from the result.
Because the net asset value of the underlying mutual fund may
fluctuate, the accumulation unit value may increase or decrease.
You bear this investment risk in a variable subaccount.
Factors that affect variable subaccount accumulation units
Accumulation units may change in two ways; in number and in value.
Here are the factors that influence those changes:
The number of accumulation units you own may fluctuate due to:
o additional purchase payments allocated to the variable
subaccounts;
o transfers into or out of the variable subaccount(s);
o partial surrenders; and/or
o contract administrative charges.
<PAGE>
PAGE 21
Accumulation unit values may fluctuate due to:
o changes in underlying mutual fund(s) net asset value;
o dividends distributed to the variable subaccount(s);
o capital gains or losses of underlying mutual funds;
o mutual fund operating expenses; and/or
o mortality and expense risk fees.
Making the most of your annuity
Automated dollar-cost averaging
You can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For
example, you might have a set amount transferred monthly from a
relatively conservative variable subaccount to a more aggressive
one, or to several others.
This systematic approach can help you benefit from fluctuations in
accumulation unit values caused by fluctuations in the market
value(s) of the underlying mutual fund(s). Since you invest the
same amount each period, you automatically acquire more units when
the market value falls, fewer units when it rises. The potential
effect is to lower your average cost per unit. Contact our service
office for more information.
<TABLE>
<CAPTION>
How dollar-cost averaging works
Month Amount Accumulation Number of units
invested unit value purchased
<S> <C> <C> <C> <C>
By investing an Jan $100 $20 5.00
equal number of
dollars each month.... Feb 100 16 6.25
Mar 100 9 11.11
you automatically Apr 100 5 20.00
buy more units
when the per unit May 100 7 14.29
market price is low....
June 100 10 10.00
July 100 15 6.67
and fewer units Aug 100 20 5.00
when the per unit
market price is Sept 100 17 5.88
high.
Oct 100 12 8.33
</TABLE>
You have paid an average price of only $10.81 per unit over the 10
months, while the average market price actually was $13.10.
Dollar-cost averaging does not guarantee that any variable
subaccount will gain in value, nor will it protect against a
decline in value if market prices fall. However, if you can
continue to invest regularly throughout changing market conditions,
it can be an effective strategy to help meet your long term goals.
Transferring money between accounts
You may transfer money from any one subaccount or the fixed account
to another at any time before annuity payouts begin. If we receive
your request before the close of business, we will process it that <PAGE>
PAGE 22
day. Requests received after the close of business will be
processed the next business day. Before making a transfer, you
should consider the risks involved in switching investments. We
may suspend or modify transfer privileges at any time.
Transfer policies
o You may transfer contract values at any time between the
variable subaccounts, from the variable subaccount(s) to the
fixed account or from the fixed account to the variable
subaccount(s).
o The amount being transferred to any one account must be at least
$100.
o If you make more than 12 transfers in a contract year, we will
charge $25 for each transfer in excess of 12.
o Excessive trading activity can disrupt mutual fund management
strategy and increase expenses, which are borne by all contract
owners participating in the mutual fund regardless of their
transfer activity. Therefore, we reserve the right to limit the
number of transfers permitted, but not to fewer than twelve per
contract year.
Three ways to request a transfer or a surrender
1 By letter
Send your name, contract number, Social Security Number or Taxpayer
Identification Number and signed request for a transfer or
surrender to:
Regular mail:
American Partners Life Insurance Company
P.O. Box 59197
Minneapolis, MN 55459-0197
Express mail:
American Partners Life Insurance Company
80 South Eighth Street
Minneapolis, MN 55402
Minimum amount
Mail transfers: $100 or entire account balance
Mail surrenders: $100 or entire account balance
Maximum amount
Mail transfers: None (up to contract value)
Mail surrenders: None (up to contract value)
2 By phone
Call between 7 a.m. and 6 p.m. Central time:
1-800-AXP-SERV
<PAGE>
PAGE 23
TTY service for the hearing impaired:
1-800-710-5260 (toll free)
Minimum amount
Phone transfers: $100 or entire account balance
Phone surrenders: $100 or entire account balance
Maximum amount
Phone transfers: None (up to contract value)
Phone surrenders: $50,000
We answer phone requests promptly, but you may experience delays
when the call volume is unusually high. If you are unable to get
through, use the mail procedure as an alternative.
We will honor any telephone transfer or surrender request believed
to be authentic and will use reasonable procedures to confirm that
they are. This includes asking identifying questions and tape
recording calls. A telephone surrender will not be allowed within
30 days of a phoned-in address change. As long as the procedures
are followed, neither American Partners Life nor its affiliates
will be liable for any loss resulting from fraudulent requests.
Telephone transfers or surrenders are automatically available. You
may request that telephone transfers or surrenders not be
authorized from your account by writing American Partners Life.
3 By automated transfers and automated partial surrenders
o You can set up automated transfers among your accounts or
partial surrenders from the accounts.
You can start or stop this service by written request or other
method acceptable to American Partners Life. You must allow 30
days for American Partners Life to change any instructions that are
currently in place.
o Automated transfers and automated partial surrenders are subject
to all of the contract provisions and terms, including transfer
of contract values between accounts. Automated surrenders may
be restricted by applicable law under some contracts.
o Automated partial surrenders may result in IRS taxes and
penalties on all or part of the amount surrendered.
Minimum amount
Automated transfers or surrenders: $100
Maximum amount
Automated transfers or surrenders: None
Surrendering your contract
As owner, you may surrender all or part of your contract at any
time before annuity payouts begin by sending a written request or
calling American Partners Life. For total surrenders we will
<PAGE>
PAGE 24
compute the value of your contract at the close of business after
we receive your request. We may ask you to return the contract.
You may have to pay IRS taxes and penalties (see "Taxes"). No
surrenders may be made after annuity payouts begin.
Surrender policies
If you have a balance in more than one account and request a
partial surrender, we will surrender money from all your accounts
in the same proportion as your value in each account correlates to
your total contract value, unless you request otherwise.
Receiving payment when you request a surrender
By regular or express mail:
o Payable to owner.
o Normally mailed to address of record within seven days after
receiving your request. However, we may postpone the payment
if:
-the surrender amount includes a purchase payment check that
has not cleared;
-the NYSE is closed, except for normal holiday and weekend
closings;
-trading on the NYSE is restricted, according to SEC rules;
-an emergency, as defined by SEC rules, makes it impractical
to sell securities or value the net assets of the accounts;
or
-the SEC permits us to delay payment for the protection of
security holders.
Changing ownership
You may change ownership of your non-qualified annuity at any time
by filing a change of ownership with us at our service office. The
change will become binding upon us when we receive and record it.
We will honor any change of ownership request believed to be
authentic and will use reasonable procedures to confirm that it is.
However, we take no responsibility for the validity of the change.
If you have a non-qualified annuity, you may lose your tax
advantages by transferring, assigning or pledging any part of it.
(See "Taxes".)
If you have a qualified annuity, you may not sell, assign,
transfer, discount or pledge your contract as collateral for a
loan, or as security for the performance of an obligation or for
any other purpose to any person except American Partners Life.
However, if the owner is a trust or custodian, or an employer
acting in a similar capacity, ownership of a contract may be
transferred to the annuitant.
Benefits in case of death
If you or the annuitant dies (or, for qualified annuities, if the
annuitant dies) before annuity payouts begin, we will pay the
beneficiary the greater of:
<PAGE>
PAGE 25
o the contract value; or
o purchase payments, minus any partial surrenders.
If your spouse is sole beneficiary under a non-qualified annuity
and you die before the annuity start date, your spouse may keep the
annuity as owner. To do this your spouse must, within 60 days
after we receive proof of death, give us written instructions to
keep the contract in force.
Under a qualified annuity, if the annuitant dies before reaching
age 70 1/2 and before the annuity start date, and the spouse is the
only beneficiary, the spouse may keep the annuity in force as owner
or until the date on which the annuitant would have reached age 70
1/2. To do this, the spouse must give us written instructions
within 60 days after we receive proof of death.
Payouts: We will pay the beneficiary in a single sum unless you
have given us other written instructions, or the beneficiary may
receive payouts under any annuity payout plan available under this
contract if:
o the beneficiary asks us in writing within 60 days after we
receive proof of death;
o payouts begin no later than one year after death; and
o the payout period does not extend beyond the beneficiary's life
or life expectancy.
When paying the beneficiary, we will determine the contract's value
at the next close of business after our death claim requirements
are fulfilled. Interest, if any, will be paid from the date of
death at a rate no less than required by law. We will mail payment
to the beneficiary within seven days after our death claim
requirements are fulfilled. (See "Taxes.")
The annuity payout period
As owner of the contract, you have the right to decide how and to
whom annuity payouts will be made starting at the annuity start
date. You may select one of the annuity payout plans outlined
below, or we will mutually agree on other payout arrangements. The
amount available for payouts under the plan you select is the
contract value on your annuity start date. Annuity payouts will be
made on a fixed basis.
Amounts of payouts depend on:
o the annuity payout plan you select;
o the annuitant's age and, in most cases, sex;
o the annuity table in the contract.
Annuity payout plans
You may choose any one of these annuity payout plans by giving us
written instructions at least 30 days before contract values are to
be used to purchase the payout plan:
<PAGE>
PAGE 26
o Plan A - Life annuity - no refund: Monthly payouts are made
until the annuitant's death. Payouts end with the last payout
before the annuitant's death; no further payouts will be made.
This means that if the annuitant dies after only one monthly payout
has been made, no more payouts will be made.
o Plan B - Life annuity with five, 10 or 15 years certain: Monthly
payouts are made for a guaranteed payout period of five, 10 or 15
years that the annuitant elects. This election will determine the
length of the payout period to the beneficiary if the annuitant
should die before the elected period has expired. The guaranteed
payout period is calculated from the annuity start date. If the
annuitant outlives the elected guaranteed payout period, payouts
will continue until the annuitant's death.
o Plan C - Life annuity - installment refund: Monthly payouts are
made until the annuitant's death, with our guarantee that payouts
will continue for some period of time. Payouts will be made for at
least the number of months determined by dividing the amount
applied under this option by the first monthly payout, whether or
not the annuitant is living.
o Plan D - Joint and last survivor life annuity - no refund:
Monthly payouts are made to the annuitant and a joint annuitant
while both are living. If either annuitant dies, monthly payouts
continue at the full amount until the death of the surviving
annuitant. Payouts end with the death of the second annuitant.
o Plan E - Payouts for a specified period: Monthly payouts are
made for a specific payout period of 10 to 30 years chosen by the
annuitant. Payouts will be made only for the number of years
specified whether the annuitant is living or not. Depending on the
time period selected, it is foreseeable that an annuitant can
outlive the payout period selected. In addition, a 10% IRS penalty
tax could apply under this payout plan. (See "Taxes".)
Restrictions for some qualified plans: If you purchased a
qualified annuity, you must select a payout plan that provides for
payouts:
o over the life of the annuitant;
o over the joint lives of the annuitant and a designated
beneficiary;
o for a period not exceeding the life expectancy of the
annuitant; or
o for a period not exceeding the joint life expectancies
of the annuitant and a designated beneficiary.
If we do not receive instructions: You must give us written
instructions for the annuity payouts at least 30 days before the
annuitant's annuity start date. If you do not, we will make
payouts under Plan B, with 120 monthly payouts guaranteed.
<PAGE>
PAGE 27
If monthly payouts would be less than $20: We will calculate the
amount of monthly payouts at the time the contract value is used to
purchase a payout plan. If the calculations show that monthly
payouts would be less than $20, we have the right to pay the
contract value to the owner in a lump sum.
Death after annuity payouts begin
If you or the annuitant dies after annuity payouts begin, any
amount payable to the beneficiary will be provided in the annuity
payout plan in effect.
Taxes
Generally, under current law, any increase in your contract value
is taxable to you only when you receive a payout or surrender.
(However, see detailed discussion below.) Any portion of the
annuity payouts and any surrenders you request that represent
ordinary income are normally taxable. You will receive a 1099 tax
information form for any year in which a taxable distribution was
made.
Annuity payouts under nonqualified annuities: A portion of each
payout will be ordinary income and subject to tax, and a portion of
each payout will be considered a return of part of your investment
and will not be taxed. All amounts received after your investment
in the annuity is fully recovered will be subject to tax.
Tax law requires that all nonqualified deferred annuity contracts
issued by the same company to the same owner during a calendar year
are to be taxed as a single, unified contract when distributions
are taken from any one of such contracts.
Annuity payouts under qualified annuities: Under a qualified
annuity, the entire payout generally will be includable as ordinary
income and subject to tax except to the extent that contributions
were made with after-tax dollars. If you invested in your contract
with pre-tax dollars as part of a qualified retirement plan, such
amounts are not considered to be part of your investment in the
contract and will be taxed when paid to you.
Surrenders: If you surrender part or all of your contract before
your annuity payouts begin, your surrender payment will be taxed to
the extent that the value of your contract immediately before the
surrender exceeds your investment. You also may have to pay a 10%
IRS penalty for surrenders before reaching age 59 1/2. For
qualified annuities, other penalties may apply if you surrender
your annuity before your plan specifies that you can receive
payouts.
Death benefits to beneficiaries: The death benefit under an
annuity is not tax-exempt. Any amount received by the beneficiary
that represents previously deferred earnings within the contract is
taxable as ordinary income to the beneficiary in the year(s) he or
she receives the payments.
<PAGE>
PAGE 28
Annuities owned by corporations, partnerships or trusts: Any
annual increase in the value of annuities held by such entities
generally will be treated as ordinary income received during that
year. This provision is effective for purchase payments made after
Feb. 28, 1986. However, if the trust was set up for the benefit of
a natural person only, the increase in value will be tax-deferred.
Penalties: If you receive amounts from your contract before
reaching age 59 1/2, you may have to pay a 10% IRS penalty on the
amount includable in your ordinary income. However, this penalty
will not apply to any amount received by you or your beneficiary:
o because of your death;
o because you become disabled (as defined in the Code);
o if the distribution is part of a series of substantially equal
periodic payments, made at least annually, over your life or
life expectancy (or joint lives or life expectancies of you and
your beneficiary); or
o if it is allocable to an investment before Aug. 14, 1982 (except
for qualified annuities).
For a qualified annuity, other penalties or exceptions may apply if
you surrender your annuity before your plan specifies that payouts
can be made.
Withholding, generally: If you receive all or part of the contract
value from an annuity, withholding may be imposed against the
taxable income portion of the payment. Any withholding that is
done represents a prepayment of your tax due for the year. You
take credit for such amounts on the annual tax return that you
file.
If the payment is part of an annuity payout plan, the amount of
withholding generally is computed using payroll tables. You can
provide us with a statement of how many exemptions to use in
calculating the withholding. As long as you've provided us with a
valid Social Security Number or Taxpayer Identification Number, you
can elect not to have any withholding occur.
If the distribution is any other type of payment (such as a partial
or total surrender) withholding is computed using 10% of the
taxable portion. Similar to above, as long as you've provided us
with a valid Social Security Number or Taxpayer Identification
Number, you can elect not to have this withholding occur.
Some states also impose withholding requirements similar to the
federal withholding described above. If this should be the case,
any payment from which federal withholding is deducted may also
have state withholding deducted. The withholding requirements may
differ if payment is being made to a non-U.S. citizen or if the
payment is being delivered outside the United States.
Transfer of ownership of a nonqualified annuity: If you make such
a transfer without receiving adequate consideration, the transfer
is considered a gift, and also may be considered a surrender for
federal income tax purposes. If the gift is a currently taxable
event, the amount of deferred earnings at the time of the transfer
<PAGE>
PAGE 29
will be taxed to the original owner, who also may be subject to a
10% IRS penalty as discussed earlier. In this case, the new
owner's investment in the annuity will be the value of the annuity
at the time of the transfer.
Collateral assignment of a nonqualified annuity: If you
collaterally assign or pledge your contract, earnings on purchase
payments you made after Aug. 13, 1982 will be taxed to you like a
surrender.
Important: Our discussion of federal tax laws is based upon our
understanding of these laws as they are currently interpreted.
Federal tax laws or current interpretations of them may change.
For this reason and because tax consequences are complex and highly
individual and cannot always be anticipated, you should consult a
tax adviser if you have any questions about taxation of your
contract.
Tax Qualifications
The contract is intended to qualify as an annuity for federal
income tax purposes. To that end, the provisions of the contract
are to be interpreted to ensure or maintain such tax qualification,
notwithstanding any other provisions of the contract. We reserve
the right to amend the contract to reflect any clarifications that
may be needed or are appropriate to maintain such qualification or
to conform the contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such
amendments.
Voting rights
As a contract owner with investments in the variable account(s),
you may vote on important mutual fund policies. We will vote fund
shares according to your instructions.
The number of votes you have is determined by applying your
percentage interest in each variable subaccount to the total number
of votes allowed to the subaccount.
We calculate votes separately for each subaccount not more than 60
days before a shareholders' meeting. Notice of these meetings,
proxy materials and a statement of the number of votes to which the
voter is entitled, will be sent.
We will vote shares for which we have not received instructions in
the same proportion as the votes for which we have received
instructions. We also will vote the shares for which we have
voting rights in the same proportion as the votes for which we have
received instructions.
Substitution of Investments
If shares of any fund should not be available for purchase by the
appropriate variable subaccount or if, in the judgment of American
Partners Life's Management, further investment in such shares is no
longer appropriate in view of the purposes of the subaccount,
<PAGE>
PAGE 30
investment in the subaccount may be discontinued or another
registered open-end management investment company may be
substituted for fund shares held in the subaccounts if American
Partners Life believes it would be in the best interest of persons
having voting rights under the contract. The variable account may
be operated as a management company under the 1940 Act or it may be
deregistered under this Act if the registration is no longer
required. In the event of any such substitution or change,
American Partners Life, without the consent or approval of the
owners, may amend the contract and take whatever action is
necessary and appropriate. However, no such substitution or change
will be made without the necessary approval of the SEC and state
insurance departments. American Partners Life will notify owners
of any substitution or change.
Distribution of the Contracts
The contracts will be distributed by American Express Financial
Advisors Inc., the principal underwriter for the variable account.
About American Partners Life
The Privileged Assets Select Annuity is issued by American Partners
Life. American Partners Life is a wholly owned subsidiary of IDS
Life Insurance Company, which is a wholly owned subsidiary of
American Express Financial Corporation. American Express Financial
Corporation is a wholly owned subsidiary of the American Express
Company. American Express Company is a financial services company
principally engaged through subsidiaries (in addition to American
Express Financial Corporation) in travel related services,
investment services and international banking services.
American Partners Life is a stock life insurance company organized
in 1988 under the laws of the State of Arizona. Its service office
is located at 80 South Eighth Street, Minneapolis, MN 55402. Its
statutory address is 3225 North Central Avenue, Phoenix, AZ.
American Partners Life is licensed in the state of Arizona and it
conducts a conventional life insurance business.
American Express Financial Advisors Inc. is the principal
underwriter for the variable account. Its home office is IDS Tower
10, Minneapolis, MN 55440-0010. American Express Financial
Advisors Inc. is registered with the SEC under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. American Express
Financial Advisors Inc. is a wholly owned subsidiary of American
Express Financial Corporation.
The American Express Financial Corporation family of companies also
offers mutual funds, investment certificates and a broad range of
financial management services.
Other subsidiaries provide investment management and related
services for pension, profit-sharing, employee savings and
endowment funds of businesses and institutions.
<PAGE>
PAGE 31
Regular and special reports
Services
To help you track and evaluate the performance of your annuity,
American Partners Life provides:
Quarterly statements showing the value of your investment.
Annual reports containing required information on the annuity and
its underlying investments.
<PAGE>
PAGE 32
Table of contents of the Statement of Additional Information
Performance information............................
Calculating annuity payouts........................
Depositor..........................................
Principal underwriter..............................
Independent auditors...............................
Mortality and expense risk fee.....................
Retirement planning................................
Prospectus.........................................
Financial statements -
American Partners Life Insurance Company.....
___________________________________________________________________
Please check the appropriate box to receive a copy of the Statement
of Additional Information for:
_____ Privileged Assets Select Annuity
_____ IDS Life Retirement Annuity Mutual Funds
_____ INVESCO Variable Investment Funds, Inc.
_____ The Montgomery Funds III
Please return this request to:
American Partners Life Insurance Company
80 South Eighth Street
P.O. Box 59197
Minneapolis, MN 55459-0197
Your name _______________________________________________________
Address _________________________________________________________
City ______________________ State ______________ Zip ___________
<PAGE>
PAGE 33
STATEMENT OF ADDITIONAL INFORMATION
for
PRIVILEGED ASSETS (registered trademark symbol) SELECT ANNUITY
APL VARIABLE ANNUITY ACCOUNT 1
________________, 1995
APL Variable Annuity Account 1 is a separate account established
and maintained by American Partners Life Insurance Company
(American Partners Life).
This Statement of Additional Information, dated _________, 1995, is
not a prospectus. It should be read together with the Account's
prospectus, dated ____________, 1995, which may be obtained by
writing or calling American Partners Life at the address or
telephone number below.
American Partners Life Insurance Company
80 South Eighth Street
P.O. Box 59197
Minneapolis, MN 55459-0197
Phone #1-800-AXP-SERV
<PAGE>
PAGE 34
TABLE OF CONTENTS
Performance Information.......................................p.
Calculating Annuity Payouts...................................p.
Depositor.....................................................p.
Principal Underwriter.........................................p.
Independent Auditors..........................................p.
Mortality and Expense Risk Fee................................p.
Retirement Planning...........................................p.
Prospectus....................................................p.
Financial Statements
- American Partners Life Insurance Company..........p.
<PAGE>
PAGE 35
PERFORMANCE INFORMATION
The following performance figures are calculated on the basis of
historical performance of the funds. The performance figures
relating to these funds assume that the contract was in existence
prior to _______________, 1995, which it was not. Beginning
_______________, 1995, when these funds became available as
investment options under the contract, actual values are used for
the calculations.
Calculation of yield for IDS Life Moneyshare Subaccount
Simple yield for the IDS Life Moneyshare subaccount (CMS) will be
based on the: (a) change in the value of a hypothetical investment
(exclusive of capital changes) at the beginning of a seven-day
period for which yield is to be quoted; (b) subtracting a pro rata
share of subaccount expenses accrued over the seven-day period; (c)
dividing the difference by the value of the subaccount at the
beginning of the period to obtain the base period return; and (d)
annualizing the results (i.e., multiplying the base period return
by 365/7). Calculation of compound yield begins with the same base
period return used in the calculation of yield, which is then
annualized to reflect compounding according to the following
formula:
Compound Yield = [(return for seven-day period + 1) 365/7 ]-1
On June 30, 1995, the account's annualized yield was 4.24% and its
compound yield was 4.33%.
The rate of return, or yield, on the subaccount's accumulation unit
may fluctuate daily and does not provide a basis for determining
future yields. Investors must consider, when comparing an
investment in subaccount CMS with fixed annuities, that fixed
annuities often provide an agreed-to or guaranteed fixed yield for
a stated period of time, whereas the variable subaccount's yield
fluctuates. In comparing the yield of subaccount CMS to a money
market fund, you should consider the different services that the
annuity provides.
Calculation of yield for IDS Life Special Income Subaccount
For the IDS Life Special Income Subaccount (CSI), quotations of
yield will be based on all investment income earned during a
particular 30-day period, less expenses accrued during the period
(net investment income) and will be computed by dividing net
investment income per accumulation unit by the value of an
accumulation unit on the last day of the period, according to the
following formula:
YIELD = 2[(a-b + 1)6 - 1]
cd
<PAGE>
PAGE 36
where: a = dividends and investment income earned during the
period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of accumulation units
outstanding during the period that were entitled to
receive dividends.
d = the maximum offering price per accumulation unit on
the last day of the period.
Yield on the subaccount is earned from the increase in the net
asset value of shares of the fund in which the subaccount invests
and from dividends declared and paid by the fund, which are
automatically invested in shares of the fund.
Calculation of average annual total return
Quotations of average annual total return for a subaccount will be
expressed in terms of the average annual compounded rate of return
of a hypothetical investment in the annuity contract over a period
of one, five and 10 years (or, if less, up to the life of the
subaccount), calculated according to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one, five,
or ten year (or other) period at the end of the
one, five, or ten year (or other) period (or
fractional portion thereof).
The Securities and Exchange Commission requires that an assumption
be made that the contract owner surrenders the entire contract at
the end of the one, five and ten year periods (or, if less, up to
the life of the subaccount) for which performance is required to be
calculated.
<PAGE>
PAGE 37
Average Annual Total Return Period Ended: Dec. 31, 1995
<TABLE>
<CAPTION>
Average Annual Total Return with or without Surrender
Since
Subaccount investing in: 1 Year 5 Years 10 Years Inception
<S> <C> <C> <C> <C>
IDS LIFE
Aggressive Growth Fund (1/92)* 25.00% -- -- 7.71%
Capital Resource Fund (10/81) 20.73% 11.24% 12.71% --
International Equity Fund (1/92) -1.75% -- -- 6.72%
Managed Fund (4/86) 13.46% 9.84% -- 9.74%
Moneyshare Fund (10/81) 3.92% 3.28% 4.69% --
Special Income Fund (10/81) 12.75% 9.79% 9.11% --
INVESCO VIF
Industrial Income Portfolio (8/94) 13.12%
Montgomery Variable Series
Growth Fund .76%
Emerging Markets Fund (not commenced operations)
*inception dates of the funds are shown in parentheses.
</TABLE>
Aggregate Total Return
Aggregate total return represents the cumulative change in value of
an investment for a given period (reflecting change in a
subaccount's accumulation unit value) and is computed by the
following formula:
ERV-P
P
where: P = a hypothetical initial payment of $1,000.
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one, five,
or ten year (or other) period at the end of the
one, five, or ten year (or other) period (or
fractional portion thereof).
Subaccount total return figures reflect the deduction of the
contract administrative charge and mortality and expense risk fee.
Performance of the subaccounts may be quoted or compared to
rankings, yields, or returns as published or prepared by
independent rating or statistical services or publishers or
publications such as The Bank Rate Monitor National Index,
Barron's, Business Week, Donoghue's Money Market Fund Report,
Financial Services Week, Financial Times, Financial World, Forbes,
Fortune, Global Investor, Institutional Investor, Investor's Daily,
Kiplinger's Personal Finance, Lipper Analytical Services, Money,
Mutual Fund Forecaster, Newsweek, The New York Times, Personal
Investor, Stanger Report, Sylvia Porter's Personal Finance, USA
Today, U.S. News and World Report, The Wall Street Journal and
Wiesenberger Investment Companies Service.
CALCULATING ANNUITY PAYOUTS
Your fixed annuity payout amounts are guaranteed. Once calculated,
your payout will remain the same and never change. To calculate
your annuity payouts we:
<PAGE>
PAGE 38
o take the total value of your fixed account and the subaccounts
at the annuity start date or the date you have selected to begin
receiving your annuity payouts; then
o using an annuity table we apply the value according to the
annuity payout plan you select.
o The annuity payout table we use will be the one in effect at the
time you choose to begin your annuity payouts. The table will be
equal to or greater than the table in your contract.
DEPOSITOR
National Pension Life Insurance Company was established on October
14, 1988 and changed its name to American Partners Life Insurance
Company on February 18, 1994.
PRINCIPAL UNDERWRITER
The principal underwriter for the accounts is American Express
Financial Advisors Inc. which offers the variable contracts on a
continuous basis.
INDEPENDENT AUDITORS
The statutory basis financial statements of American Partners Life
Insurance Company (a wholly owned subsidiary of IDS Life Insurance
Company) at December 31, 1994 and for the year then ended, have
been audited by Ernst & Young LLP, independent auditors as stated
in their report appearing herein.
MORTALITY AND EXPENSE RISK FEE
American Partners Life has represented to the SEC that:
American Partners Life has reviewed publicly available information
regarding products of other companies. Based upon this review,
American Partners Life has concluded that the mortality and expense
risk fee is within the range of charges determined by industry
practice. American Partners Life will maintain at its
administrative office, and make available on request of the SEC or
its staff, a memorandum setting forth in detail the variable
products analyzed and the methodology, and results of, its
comparative review.
American Partners Life has concluded that there is a reasonable
likelihood that the proposed distribution financing arrangements
made with respect to the contracts will benefit the variable
account and investors in the contracts. The basis for such
conclusion is set forth in a memorandum which will be made
available to the SEC or its staff on request.
RETIREMENT PLANNING
You may have to save more for retirement because social security
and employee savings plans are estimated to cover only 40% of your
retirement savings. The remaining 60% must come from personal
investments, savings and other income.* One way to help save for
<PAGE>
PAGE 39
retirement is by purchasing a variable annuity. Variable annuity
sales have almost tripled in the last 4 years to over $52 billion
dollars.**
Sources:
* Social Security Administration
**LIMRA 1994 Individual Annuity Market Report
PROSPECTUS
The prospectus dated ______________, 1995, is hereby incorporated
in this Statement of Additional Information by reference.
<PAGE>
PAGE 40
Report of Independent Auditors
The Board of Directors
American Partners Life Insurance Company
We have audited the accompanying statutory basis balance sheets of
American Partners Life Insurance Company (a wholly owned subsidiary
of IDS Life Insurance Company) as of December 31, 1994 and the
related statutory basis statements of operations, changes in
capital and surplus, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements
of American Partners Life Insurance Company for the year ended
December 31, 1993, were audited by other auditors whose report
dated February 21, 1994, expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
As described in Note 1 to the financial statements, the Company
presents its financial statements in conformity with the accounting
practices prescribed or permitted by the Arizona Department of
Insurance that vary in some respects from generally accepted
accounting principles. The effects of these variances have not
been determined but we believe they are material.
In our opinion, because of the significance of the effects of the
matters described in the preceding paragraph, the financial
statements referred to above are not intended to and do not present
fairly, in conformity with generally accepted accounting
principles, the financial position of American Partners Life
Insurance Company at December 31, 1994 or the results of its
operations or its cash flows for the year then ended.
However, in our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
American Partners Life Insurance Company at December 31, 1994 and
the results of its operations and its cash flows for the year
then ended, in conformity with accounting practices prescribed or
permitted by the Arizona Department of Insurance.
Ernst & Young LLP
Minneapolis, Minnesota
May 19, 1995
<PAGE>
PAGE 41
American Partners Life Financial Information
The financial statements shown below are those of the insurance
company and not those of the Subaccounts. These financial
statements have been prepared on the basis of statutory accounting
practices. They are included in the prospectus for the purpose of
informing investors as to the financial condition of the insurance
company and its ability to carry out its obligations under the
variable annuity contracts.
AMERICAN PARTNERS LIFE INSURANCE COMPANY
BALANCE SHEETS - STATUTORY BASIS
<TABLE>
<CAPTION>
Dec. 31, Dec. 31,
ASSETS 1994 1993
(thousands)
<S> <C> <C>
Investments (Note 2):
Bonds (Market: 1994, $3,020; 1993, $8,044) $3,101 $7,860
Cash and short-term investments 3,632 962
Total cash and invested assets 6,733 8,822
Accrued investment income 144 98
Amounts due from brokers 2,200 -
Amounts recoverable from reinsurance assumed - 112
Total admitted assets $9,077 $9,032
===== =====
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
Accrued taxes, licenses and fees $ 18 $ 12
Life insurance policy and contract claims - 123
Payable to parent, subsidiary and affiliates - 173
Asset valuation reserve (Note 1) 6 -
Total liabilities 24 308
Capital and surplus (Note 4):
Capital stock, $100 par value per share;
30,000 shares authorized,
25,000 issued and outstanding 2,500 2,500
Additional paid-in capital 4,543 4,543
Unassigned surplus 2,010 1,681
Total capital and surplus 9,053 8,724
Total liabilities and capital and surplus $9,077 $9,032
===== =====
See accompanying notes.
</TABLE>
<PAGE>
PAGE 42
<TABLE>
<CAPTION>
AMERICAN PARTNERS LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS - STATUTORY BASIS
Years ended Dec. 31,
1994 1993
(thousands)
<S> <C> <C>
Revenues:
Annuity considerations $ - $ 487
Net investment income (Note 2) 427 244
Reserve adjustment on reinsurance ceded - 49
Miscellaneous income - 9
Total revenues 427 789
Benefits and expenses:
Death and other benefits - 424
General insurance expenses 1 195
Insurance taxes, licenses and fees
excluding federal income taxes 28 13
Total benefits and expenses 29 632
Net gain from operations before federal income taxes 398 157
Federal income taxes (Note 3) 109 54
Net income $ 289 $ 103
===== =====
See accompanying notes.
<PAGE>
PAGE 43
AMERICAN PARTNERS LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS - STATUTORY BASIS
Years ended Dec. 31,
1994 1993
(thousands)
Capital and surplus at beginning of year $8,724 $8,553
Net income 289 103
Recapture of reinsurance by ceding company 46 -
Prior year adjustment to surplus - 46
Change in reserve on account of change in
valuation basis - 22
Increase in asset valuation reserve (6) -
Capital and surplus at end of year $9,053 $8,724
===== =====
See accompanying notes.
<PAGE>
PAGE 44
AMERICAN PARTNERS LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS - STATUTORY BASIS
Years ended Dec. 31,
1994 1993
(thousands)
Annuity considerations $ - $ 487
Net investment income received, excluding
realized gains and lossess 425 274
Other income received 35 58
Contract benefits paid - (507)
Operating expenses paid to parent, subsidiary
and affiliates (172) -
Commissions, other expenses and taxes paid,
excluding federal income taxes (24) (216)
Federal income taxes paid (144) 17
Net cash provided by operations 120 113
Proceeds from bonds matured 4,750 2,870
Other cash provided - 95
Total cash provided 4,870 3,078
Cost of bonds acquired - (2,217)
Other cash applied (2,200) (90)
Total cash applied (2,200) (2,307)
Net increase in cash and short-term
investments 2,670 771
Cash and short-term investments at beginning of year 962 191
Cash and short-term investments at end of year $3,632 $ 962
===== =====
See accompanying notes.
</TABLE>
<PAGE>
PAGE 45
AMERICAN PARTNERS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS - STATUTORY BASIS
($ thousands)
1. Summary of significant accounting policies
Nature of business
American Partners Life Insurance Company (the Company), formerly
National Pension Life, is a stock life insurance company
organized in 1981 under the laws of the State of Vermont and
redomisticated in Arizona. The Company is licensed to transact
insurance business in 46 states at Dec. 31, 1994. The Company
was acquired by IDS Life Insurance Company (IDS Life) from Mutual
of America Life Insurance Company in February 1994.
Basis of presentation
The Company is a wholly owned subsidiary of IDS Life Insurance
Company (IDS Life), which is a wholly owned subsidiary of
American Express Financial Corporation (formerly IDS Financial
Corporation). American Express Financial Corporation is a wholly
owned subsidiary of American Express Company. The accompanying
financial statements have been prepared on the basis of
accounting practices prescribed or permitted by the State of
Arizona. Such practices vary from generally accepted accounting
principles for stock life insurance companies primarily as
follows:
- - Bonds are carried at cost rather than being classified as
"available for sale" or "held to maturity" and carried at fair
value or cost, respectively.
- - Policy acquisition costs, such as commissions and other costs
related to acquiring new business, are expensed in the year
incurred, whereas premiums are recognized over the premium paying
period.
- - Reserves for future policy benefits on annuity policies are
based on assumptions recognized by the Arizona Department of
Insurance rather than the Company's expected mortality, interest
and withdrawals.
- - The asset valuation reserve is reported as a liability rather
than as surplus. Changes in this reserve are reported directly
in unassigned surplus.
- - Deferred income taxes are not provided for the effects of
timing differences in reporting income for financial and income
tax purposes.
- - Net realized gains or losses resulting from changes in market
interest rates are deferred and amortized to investment income in
future periods.
- - Net unrealized gain or loss in the carrying value of bonds and
mortgage loans on real estate is reflected directly in unassigned
surplus.<PAGE>
PAGE 46
1. Summary of significant accounting policies (continued)
Investments
Investment values have been determined in accordance
with methods adopted by the National Association of Insurance
Commissioners (NAIC). Bonds are carried at cost, adjusted where
appropriate for amortization of premiums and accretion of
discounts. When evidence indicates a decline, which is other than
temporary, in the underlying value or earning power of individual
investments, such investments are written down to a new cost basis
by a charge to income.
Realized investment gain or loss is determined on an identified
cost basis.
Statement of cash flows
The Company considers investments with a maturity at the date of
their acquisition of three months or less to be short-term
investments. These investments are carried principally at
amortized cost which approximates market value. Short-term
investments at Dec. 31, 1994 and 1993 amounted to $3,474 and
$858, respectively, and have been included in the caption cash
and short-term investments.
Premium revenue
Annuity considerations are recognized as revenue when received.
Federal income taxes
The Company is included in the consolidated federal income tax
return of American Express Company. The Company provides for
income taxes on a separate return basis, except that, under an
agreement between American Express Financial Corporation and
American Express Company, tax benefit is recognized for losses to
the extent they can be used on the consolidated tax return. It
is the policy of American Express Financial Corporation and its
subsidiaries that American Express Financial Corporation will
reimburse a subsidiary for any tax benefit.
At Dec. 31, 1994, included in accrued taxes, licenses and fees is
$18 ultimately payable to American Express Company for federal
income taxes.
2. Investments
Market values of investments have been determined as prescribed
by the NAIC.
Net unrealized depreciation of bonds increased by $266 and
decreased by $63 for the years ended Dec. 31, 1994 and 1993,
respectively.
<PAGE>
PAGE 47
2. Investments (continued)
The amortized cost and market value of investments in U.S.
Government bonds carried at amortized cost at Dec. 31, are as
follows:
1994 1993
Amortized cost $3,101 $7,860
Gross unrealized gains - 185
Gross unrealized losses (81) (1)
Market value $3,020 $8,044
All of the investments in bonds mature from one to five years at
Dec. 31, 1994. Expected maturities may differ from contractual
maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
At Dec. 31, 1994, bonds carried at $1,678 were on deposit with
various states as required by law.
Net investment income for the years ended Dec. 31 is summarized
as follows:
1994 1993
Bonds $363 $463
Short-term investments 81 11
444 474
Less investment expenses 17 230
$427 $244
=== ===
At Dec. 31, 1994, investments in bonds and short-term investments
comprised 98 percent of the Company's total cash and invested
assets. Securities are rated by the Securities Valuation Office
of the NAIC. As of Dec. 31, 1994, 100 percent of the bond
portfolio was invested in investment-grade securities.
3. Federal income taxes
The Company will file a regular corporate tax return for the year
ended Dec. 31. 1994. As of Dec. 31, 1993, the Company qualified
as a life insurance company for federal income tax purposes. As
such, the Company was subject to the Internal Revenue Code
provisions applicable to life insurance companies.
<PAGE>
PAGE 48
3. Federal income taxes (continued)
Increases (decreases) to the federal tax provision applicable to
pretax income (excluding amounts applicable to net realized
capital gains) based on the statutory rate are attributable to:
1994 1993
Provision Rate Provision Rate
Federal income tax
provision based on
the statutory rate $139 35.0% $54 35.0%
Increases (decreases) are
attributable to:
Taxes paid on behalf of
the Company by a former
affiliate (30) (7.5) - -
Federal income tax provision $109 27.5% $54 35.0%
=== ==== == ====
4. Capital and surplus
Capital and surplus available for distribution as dividends to
parent are limited to the Company's net gain from operations in
accordance with accounting practices prescribed by state
insurance regulatory authorities. Any dividend distributions
would require approval of the Arizona Department of Insurance.
The Company is required to maintain a minimum capital and surplus
of $600.
5. Reinsurance
As of Dec. 31, 1993, the Company had a modified coinsurance
agreement with an affiliate of Mutual of America. At Dec. 31,
1993, reserves reinsured under this agreement amounted to $1,100.
During 1993, premiums assumed amounted to $487 and claims
incurred amounted to $423. This agreement was terminated prior
to the purchase of the company by IDS Life in February 1994.
<PAGE>
PAGE 49
AMERICAN PARTNERS LIFE INSURANCE COMPANY
BALANCE SHEET - STATUTORY BASIS
(UNAUDITED)
<TABLE>
<CAPTION>
June 30,
ASSETS 1995
(thousands)
<S> <C>
Investments:
Bonds (Market: June 30, 1995, $6,231) $6,125
Cash and short-term investments 3,019
Total cash and invested assets 9,144
Accrued investment income 143
Amounts due from brokers -
Total admitted assets $9,287
=====
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
General expenses due or accrued $ 2
Accrued taxes, licenses and fees 45
Remittances and items not allocated 40
Asset valuation reserve (Note 1) 6
Total liabilities 93
Capital and surplus:
Capital stock, $100 par value per share;
30,000 shares authorized,
25,000 issued and outstanding 2,500
Additional paid-in capital 4,543
Unassigned surplus 2,151
Total capital and surplus 9,194
Total liabilities and capital and surplus $9,287
=====
See accompanying notes.
</TABLE>
<PAGE>
PAGE 50
<TABLE>
<CAPTION>
AMERICAN PARTNERS LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS - STATUTORY BASIS
(UNAUDITED)
Six month
period ended
June 30, 1995
(thousands)
<S> <C>
Revenues:
Annuity considerations $ -
Net investment income 258
Total revenues 258
Benefits and expenses:
General insurance expenses 41
Insurance taxes, licenses and fees
excluding federal income taxes 1
Total benefits and expenses 42
Net gain from operations before federal income taxes 216
Federal income taxes 75
Net income $ 141
=====
See accompanying notes.
<PAGE>
PAGE 51
AMERICAN PARTNERS LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN CAPITAL AND SURPLUS - STATUTORY BASIS
(UNAUDITED)
Six month
period ended
June 30, 1995
(thousands)
Capital and surplus at beginning of period $9,053
Net income 141
Capital and surplus at end of period $9,194
=====
See accompanying notes.
<PAGE>
PAGE 52
AMERICAN PARTNERS LIFE INSURANCE COMPANY
STATEMENT OF CASH FLOWS - STATUTORY BASIS
(UNAUDITED)
Six month
period ended
June 30, 1995
(thousands)
Net investment income received, excluding
realized gains and lossess $ 243
Commissions, other expenses and taxes paid,
excluding federal income taxes (40)
Federal income taxes paid (48)
Net cash provided by operations 155
Proceeds from bonds matured -
Other cash provided 2,240
Total cash provided 2,395
Cost of bonds acquired 3,008
Other cash applied -
Total cash applied (3,008)
Net decrease in cash and short-term
investments (613)
Cash and short-term investments at beginning of year $3,632
Cash and short-term investments at end of period $3,019
=====
See accompanying notes.
</TABLE>
<PAGE>
PAGE 53
AMERICAN PARTNERS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
June 30, 1995 ($ in thousands) (unaudited)
1. General
In the opinion of the management of American Partners Life
Insurance Company (the Company), the accompanying unaudited
financial statements contain all adjustments (consisting of
normal recurring adjustments) necessary to present fairly its
balance sheet as of June 30, 1995, statement of operations for the
six months ended June 30, 1995, statement of changes in capital and
surplus for the six months ended June 30, 1995, and statement of
cash flows for the six months ended June 30, 1995.
The Company is a wholly owned subsidiary of IDS Life Insurance
Company which is a wholly owned subsidiary of American Express
Financial Corporation. American Express Financial Corporation is
a wholly owned subsidiary of American Express Company. The
accompanying financial statements have been prepared on the basis
of accounting practices prescribed or permitted by the State of
Arizona.
2. Nature of business
The Company is a stock life insurance company licensed to transact
insurance business in 46 states.
3. Statement of cash flows
The Company considers investments with a maturity at the date of
their acquisition of three months or less to be short-term
investments. These investments are carried principally at
amortized cost which approximates market value.
<PAGE>
PAGE 54
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Registration
Statement:
American Partners Life Insurance Company:
Balance Sheets as of Dec. 31, 1994 and 1993;
Related statements of operations, changes in capital and
surplus cash flows for the years ended Dec. 31, 1994, and
1993;
Notes to Financial Statements.
Balance Sheet (unaudited) as of June 30, 1995;
Related Statements of operations, changes in capital and
surplus and cash flows (unaudited) for the six months
ended June 30, 1995.
(b) Exhibits:
1. Consent in Writing in Lieu of Meeting of Board of Directors
establishing the APL Variable Annuity Account 1 dated
February 9, 1995, filed electronically as Exhibit 1 to
Registration Statement No. 33-57731 is incorporated herein by
reference.
2. Not applicable.
3. Form of Variable Annuity Distribution Agreement, filed
electronically herewith.
4.1 Form of Deferred Annuity Contract for nonqualified contract
(form 32028), filed electronically herewith.
4.2 Form of Deferred Annuity Contract for qualified contract
(form 32034-IRA), filed electronically herewith.
5.1 Form of Application for American Partners Life Variable
Annuity (form 32025), filed electronically herewith.
6.1 Articles of Amendment and Restatement of National Pension
Life Insurance Company dated February 18, 1994, filed as
Exhibit 6.1 to Registration Statement No. 33-57731 is
incorporated herein by reference.
6.2 Amended and Restated By-Laws of American Partners Life, filed
as Exhibit 6.2 to Registration Statement No. 33-57731 is
incorporated herein by reference.
7. Not applicable.
8. Form of Participation Agreement, filed electronically
herewith.
9. Opinion of counsel, filed electronically herewith.
<PAGE>
PAGE 55
10. Consent of Independent Auditors, filed electronically
herewith.
11. Not applicable.
12. Not applicable.
13. Copy of schedule for computation of each performance
quotation provided in the Registration Statement in response
to Item 21, filed as Exhibit 13 to Registration Statement No.
33-57731 is incorporated herein by reference.
14.1 Financial Data Schedule, filed electronically herewith.
14.2 Power of Attorney to sign this Registration Statement dated
February 9, 1995, filed as Exhibit 14.2 to Registration
Statement No. 33-57731 is incorporated herein by reference.
Item 25. Directors and Officers of the Depositor
<TABLE>
<CAPTION>
Positions and
Name Principal Business Address Offices with Depositor
<S> <C> <C>
Alan R. Dakay IDS Tower 10 Director and President
Minneapolis, MN 55440
Morris Goodwin Jr. IDS Tower 10 Vice President and Treasurer
Minneapolis, MN 55440
Lorraine R. Hart IDS Tower 10 Director and Vice President-
Minneapolis, MN 55440 Investments
Richard W. Kling IDS Tower 10 Director and Chairman
Minneapolis, MN 55440 of the Board
F. Dale Simmons IDS Tower 10 Vice President-Real
Minneapolis, MN 55440 Estate Loan Management
William A. Stoltzmann IDS Tower 10 Director, Vice President,
Minneapolis, MN 55440 General Counsel and
Secretary
Melinda S. Urion IDS Tower 10 Director, Vice President
Minneapolis, MN 55440 and Controller
Laura G. Zimmerman IDS Tower 10 Vice President-Marketing
Minneapolis, MN 55440
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant
American Partners Life Insurance Company is a wholly
owned subsidiary of IDS Life Insurance Company which is
a wholly owned subsidiary of American Express Financial
Corporation. American Express Financial Corporation is
a wholly owned subsidiary of American Express Company
(American Express).
<PAGE>
PAGE 56
The following list includes the names of major
subsidiaries of American Express.
Jurisdiction
Name of Subsidiary of Incorporation
I. Travel Related Services
American Express Travel Related
Services Company, Inc. New York
II. International Banking Services
American Express Bank Ltd. Connecticut
III. Companies engaged in Investors
Diversified Financial Services
American Centurion Life Insurance Company New York
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Financial Advisors Inc. Delaware
American Express Financial Corporation Delaware
American Express Minnesota Foundation Minnesota
American Express Service Corporation Delaware
American Express Tax and Business Services Minnesota
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
IDS Advisory Group Inc. Minnesota
IDS Aircraft Services Corporation Minnesota
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Deposit Corp. Utah
IDS Fund Management Limited U.K.
IDS Futures Corporation Minnesota
IDS Futures III Corporation Minnesota
IDS Insurance Agency of Alabama Inc. Alabama
IDS Insurance Agency of Arkansas Inc. Arkansas
IDS Insurance Agency of Massachusetts Inc. Massachusetts
IDS Insurance Agency of Mississippi Inc. Mississippi
IDS Insurance Agency of Nevada Inc. Nevada
IDS Insurance Agency of New Mexico Inc. New Mexico
IDS Insurance Agency of North Carolina Inc. North Carolina
IDS Insurance Agency of Ohio Inc. Ohio
IDS Insurance Agency of Texas Inc. Texas
IDS Insurance Agency of Utah Inc. Utah
IDS Insurance Agency of Wyoming Inc. Wyoming
IDS International, Inc. Delaware
IDS Life Insurance Company Minnesota
IDS Life Insurance Company of New York New York
IDS Management Corporation Minnesota
IDS Partnership Services Corporation Minnesota
IDS Plan Services of California, Inc. Minnesota
IDS Property Casualty Insurance Company Wisconsin
IDS Real Estate Services, Inc. Delaware
<PAGE>
PAGE 57
IDS Realty Corporation Minnesota
IDS Sales Support Inc. Minnesota
IDS Securities Corporation Delaware
Investors Syndicate Development Corp. Nevada
Item 27. Number of Contractowners
Not applicable.
Item 28. Indemnification
The By-Laws of the depositor provide that it shall
indemnify a director, officer, agent or employee of the
depositor pursuant to the provisions of applicable
statutes or pursuant to contract.
Insofar as indemnification for liability arising under
the Securities Act of 1933 may be permitted to director,
officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the
registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or
controlling person in connection with the securities
being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Item 29. Principal Underwriters.
(a) American Expess Financial Advisors Inc. (formerly IDS
Financial Services Inc.) acts as principal underwriter
for the following investment companies:
IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS
Discovery Fund, Inc.; IDS Equity Select Fund, Inc.; IDS Extra
Income Fund, Inc.; IDS Federal Income Fund, Inc.; IDS Global
Series, Inc.; IDS Growth Fund, Inc.; IDS High Yield Tax-Exempt
Fund, Inc.; IDS International Fund, Inc.; IDS Investment
Series, Inc.; IDS Managed Retirement Fund, Inc.; IDS Market
Advantage Series, Inc.; IDS Money Market Series, Inc.; IDS New
Dimensions Fund, Inc.; IDS Precious Metals Fund, Inc.; IDS
Progressive Fund, Inc.; IDS Selective Fund, Inc.; IDS Special
Tax-Exempt Series Trust; IDS Stock Fund, Inc.; IDS Strategy
Fund, Inc.; IDS Tax-Exempt Bond Fund, Inc.; IDS Tax-Free Money
Fund, Inc.; IDS Utilities Income Fund, Inc. and IDS
Certificate Company.
<PAGE>
PAGE 58
(b) As to each director, officer or partner of the principal
underwriter:
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Ronald G. Abrahamson Vice President- None
IDS Tower 10 Service Quality and
Minneapolis, MN 55440 Reengineering
Douglas A. Alger Vice President-Total None
IDS Tower 10 Compensation
Minneapolis, MN 55440
Jerome R. Amundson Vice President- None
IDS Tower 10 Investment Accounting
Minneapolis, MN 55440
Peter J. Anderson Senior Vice President- None
IDS Tower 10 Investments
Minneapolis, MN 55440
Ward D. Armstrong Vice President- None
IDS Tower 10 Sales and Marketing,
Minneapolis, MN 55440 American Express
Institutional Services
Alvan D. Arthur Group Vice President- None
IDS Tower 10 Central California/
Minneapolis, MN 55440 Western Nevada
Joseph M. Barsky III Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
Robert C. Basten Vice President-Tax None
IDS Tower 10 and Business Services
Minneapolis, MN 55440
Timothy V. Bechtold Vice President-Risk None
IDS Tower 10 Management Products
Minneapolis, MN 55440
John D. Begley Group Vice President- None
Suite 100 Ohio/Indiana
7760 Olentangy River Rd.
Columbus, OH 43235
Carl E. Beihl Vice President- None
IDS Tower 10 Strategic Technology
Minneapolis, MN 55440 Planning
Jack A. Benjamin Group Vice President- None
Suite 200 Greater Pennsylvania
3500 Market Street
Camp Hill, PA 17011
<PAGE>
PAGE 59
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Alan F. Bignall Vice President- None
IDS Tower 10 Financial Planning
Minneapolis, MN 55440 Systems
Brent L. Bisson Group Vice President- None
Ste 900 e Westside Tower Los Angeles Metro
11835 West Olympic Blvd.
Los Angeles, CA 90064
John C. Boeder Vice President- None
IDS Tower 10 Mature Market Group
Minneapolis, MN 55440
Bruce J. Bordelon Group Vice President- None
Galleria One Suite 1900 Gulf States
Galleria Blvd.
Metairie, LA 70001
Charles R. Branch Group Vice President- None
Suite 200 Northwest
West 111 North River Dr
Spokane, WA 99201
Karl J. Breyer Senior Vice President- None
IDS Tower 10 Corporate Affairs and
Minneapolis, MN 55440 Special Counsel
Harold E. Burke Vice President None
IDS Tower 10 and Assistant
Minneapolis, MN 55440 General Counsel
Daniel J. Candura Vice President- None
IDS Tower 10 Marketing Support
Minneapolis, MN 55440
Cynthia M. Carlson Vice President- None
IDS Tower 10 American Express
Minneapolis, MN 55440 Securities Services
Orison Y. Chaffee III Vice President-Field None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
James E. Choat Senior Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440
Kenneth J. Ciak Vice President and None
IDS Property Casualty General Manager-
1400 Lombardi Avenue IDS Property Casualty
Green Bay, WI 54304<PAGE>
PAGE 60
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Roger C. Corea Group Vice President- None
290 Woodcliff Drive Upstate New York
Fairport, NY 14450
Henry J. Cormier Group Vice President- None
Commerce Center One Connecticut
333 East River Drive
East Hartford, CT 06108
John M. Crawford Group Vice President- None
Suite 200 Arkansas/Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211
Kevin F. Crowe Group Vice President- None
Suite 312 Carolinas/Eastern Georgia
7300 Carmel Executive Pk
Charlotte, NC 28226
Alan R. Dakay Vice President- None
IDS Tower 10 Institutional Products
Minneapolis, MN 55440 Group
Regenia David Vice President- None
IDS Tower 10 Systems Services
Minneapolis, MN 55440
Scott M. Digiammarino Group Vice President- None
Suite 500 Washington/Baltimore
8045 Leesburg Pike
Vienna, VA 22182
Bradford L. Drew Group Vice President- None
Two Datran Center Eastern Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156
William H. Dudley Director and Executive None
IDS Tower 10 Vice President-
Minneapolis MN 55440 Investment Operations
Roger S. Edgar Senior Vice President None
IDS Tower 10 and Technology Advisor
Minneapolis, MN 55440
Gordon L. Eid Senior Vice President None
IDS Tower 10 and General Counsel
Minneapolis, MN 55440
<PAGE>
PAGE 61
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Robert M. Elconin Vice President- None
IDS Tower 10 Government Relations
Minneapolis, MN 55440
Mark A. Ernst Vice President- None
IDS Tower 10 Retail Services
Minneapolis, MN 55440
Joseph Evanovich Jr. Group Vice President- None
One Old Mill Nebraska/Iowa/Dakotas
101 South 108th Avenue
Omaha, NE 68154
Louise P. Evenson Group Vice President- None
Suite 200 San Francisco Bay Area
1333 N. California Blvd.
Walnut Creek, CA 94596
Gordon M. Fines Vice President- None
IDS Tower 10 Mutual Fund Equity
Minneapolis MN 55440 Investments
Louis C. Fornetti Senior Vice President Vice
IDS Tower 10 and Chief Financial President
Minneapolis, MN 55440 Officer
Douglas L. Forsberg Group Vice President- None
Suite 100 Portland/Eugene
7931 N. E. Halsey
Portland, OR 97213
William P. Fritz Group Vice President- None
Suite 160 Northern Missouri
12855 Flushing Meadows Dr
St. Louis, MO 63131
Carl W. Gans Group Vice President- None
8500 Tower Suite 1770 Twin City Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437
Robert G. Gilbert Vice President- None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
John J. Golden Vice President- None
IDS Tower 10 Field Compensation
Minneapolis, MN 55440 Development
<PAGE>
PAGE 62
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Morris Goodwin Jr. Vice President and Vice
IDS Tower 10 Corporate Treasurer President &
Minneapolis, MN 55440 Treasurer
Suzanne Graf Vice President- None
IDS Tower 10 Systems Services
Minneapolis, MN 55440
Bruce M. Guarino Group Vice President- None
Suite 1736 Hawaii
1585 Kapiolani Blvd.
Honolulu, HI 96814
David A. Hammer Vice President None
IDS Tower 10 and Marketing
Minneapolis, MN 55440 Controller
Teresa A. Hanratty Group Vice President- None
Suites 6&7 Northern New England
169 South River Road
Bedford, NH 03110
John R. Hantz Group Vice President- None
Suite 107 Detroit Metro
17177 N. Laurel Park
Livonia, MI 48154
Robert L. Harden Group Vice President- None
Two Constitution Plaza Boston Metro
Boston, MA 02129
Lorraine R. Hart Vice President- None
IDS Tower 10 Insurance Investments
Minneapolis, MN 55440
Scott A. Hawkinson Vice President-Assured None
IDS Tower 10 Assets Product Development
Minneapolis, MN 55440 and Management
Brian M. Heath Group Vice President- None
Suite 250 North Texas
801 E. Campbell Road
Richardson, TX 75081
Raymond E. Hirsch Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
<PAGE>
PAGE 63
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
James G. Hirsh Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
David J. Hockenberry Group Vice President- None
30 Burton Hills Blvd. Eastern Tennessee
Suite 175
Nashville, TN 37215
Kevin P. Howe Vice President- None
IDS Tower 10 Government and
Minneapolis, MN 55440 Customer Relations
David R. Hubers Chairman, Chief None
IDS Tower 10 Executive Officer and
Minneapolis, MN 55440 President
Marietta L. Johns Senior Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440
Douglas R. Jordal Vice President-Taxes None
IDS Tower 10
Minneapolis, MN 55440
James E. Kaarre Vice President- None
IDS Tower 10 Marketing Information
Minneapolis, MN 55440
Linda B. Keene Vice President- None
IDS Tower 10 Market Development
Minneapolis, MN 55440
G. Michael Kennedy Vice President-Investment None
IDS Tower 10 Services and Investment
Minneapolis, MN 55440 Research
Susan D. Kinder Senior Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440
Richard W. Kling Senior Vice President- Director,
IDS Tower 10 Risk Management Products Chairman &
Minneapolis, MN 55440 President
Paul F. Kolkman Vice President- None
IDS Tower 10 Actuarial Finance
Minneapolis, MN 55440
<PAGE>
PAGE 64
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Claire Kolmodin Vice President- None
IDS Tower 10 Service Quality
Minneapolis, MN 55440
David S. Kreager Group Vice President- None
Ste 108 Trestle Bridge V Greater Michigan
5136 Lovers Lane
Kalamazoo, MI 49002
Steven C. Kumagai Director and Senior None
IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management and Business
Systems
Mitre Kutanovski Group Vice President- None
Suite 680 Chicago Metro
8585 Broadway
Merrillville, IN 48410
Edward Labenski Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Kurt A. Larson Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Lori J. Larson Vice President- None
IDS Tower 10 Variable Assets Product
Minneapolis, MN 55440 Development
Ryan R. Larson Vice President- None
IDS Tower 10 IPG Product Development
Minneapolis, MN 55440
Daniel E. Laufenberg Vice President and None
IDS Tower 10 Chief U.S. Economist
Minneapolis, MN 55440
Richard J. Lazarchic Vice President- None
IDS Tower 10 Senior Portfolio
MInneapolis, MN 55440 Manager
Peter A. Lefferts Senior Vice President- None
IDS Tower 10 Corporate Strategy and
Minneapolis, MN 55440 Development
<PAGE>
PAGE 65
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Douglas A. Lennick Director and Executive None
IDS Tower 10 Vice President-Private
Minneapolis, MN 55440 Client Group
Mary J. Malevich Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Fred A. Mandell Vice President- None
IDS Tower 10 Field Marketing Readiness
Minneapolis, MN 55440
Daniel E. Martin Group Vice President- None
Suite 650 Pittsburgh Metro
5700 Corporate Drive
Pittsburgh, PA 15237
William J. McKinney Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440 Support
Thomas W. Medcalf Vice President- None
IDS Tower 10 Senior Portfolio Manager
Minneapolis, MN 55440
William C. Melton Vice President- None
IDS Tower 10 International Research
Minneapolis, MN 55440 and Chief International
Economist
Janis E. Miller Vice President- Director
IDS Tower 10 Variable Assets
Minneapolis, MN 55440
James A. Mitchell Executive Vice President- None
IDS Tower 10 Marketing and Products
Minneapolis, MN 55440
John P. Moraites Group Vice President- None
Union Plaza Suite 900 Kansas/Oklahoma
3030 Northwest Expressway
Oklahoma City, OK 73112
Pamela J. Moret Vice President- None
IDS Tower 10 Corporate Communications
Minneapolis, MN 55440
Barry J. Murphy Senior Vice President- None
IDS Tower 10 Client Service
Minneapolis, MN 55440
<PAGE>
PAGE 66
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Robert J. Neis Vice President- None
IDS Tower 10 Information Systems
Minneapolis, MN 55440 Operations
Ronald E. Newton Group Vice President- None
319 Southbridge St. Rhode Island/Central
Auburn, MA 01501 Massachusetts
Thomas V. Nicolosi Group Vice President- None
Suite 220 New York Metro Area
500 Mamaronick Avenue
Harrison, NY 10528
James R. Palmer Vice President- None
IDS Tower 10 Insurance Operations
Minneapolis, MN 55440
Carla P. Pavone Vice President- None
IDS Tower 10 Specialty Service Teams
Minneapolis, MN 55440 and Emerging Business
George M. Perry Vice President- None
IDS Tower 10 Corporate Strategy
Minneapolis, MN 55440 and Development
Susan B. Plimpton Vice President- None
IDS Tower 10 Segmentation Development
Minneapolis, MN 55440 and Support
Larry M. Post Group Vice President- None
One Tower Bridge Philadelphia Metro
100 Front Street 8th Fl
West Conshohocken, PA 19428
Ronald W. Powell Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James M. Punch Vice President- None
IDS Tower 10 TransAction Services
Minneapolis, MN 55440
Frederick C. Quirsfeld Vice President-Taxable None
IDS Tower 10 Mutual Fund Investments
Minneapolis, MN 55440
<PAGE>
PAGE 67
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
R. Daniel Richardson Group Vice President- None
Suite 800 Southern Texas
Arboretum Plaza One
9442 Capital of Texas Hwy N.
Austin, TX 78759
Roger B. Rogos Group Vice President- None
One Sarasota Tower Western Florida
Suite 700
Two N. Tamiami Trail
Sarasota, FL 34236
ReBecca K. Roloff Vice President-1994 None
IDS Tower 10 Program Director
Minneapolis, MN 55440
Stephen W. Roszell Vice President- None
IDS Tower 10 Advisory Institutional
Minneapolis, MN 55440 Marketing
Max G. Roth Group Vice President- None
Suite 201 S IDS Ctr Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304
Robert A. Rudell Vice President- None
IDS Tower 10 American Express
Minneapolis, MN 55440 Institutional Services
John P. Ryan Vice President and None
IDS Tower 10 General Auditor
Minneapolis, MN 55440
Erven A. Samsel Senior Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440
Russell L. Scalfano Group Vice President- None
Suite 201 Exec Pk East Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715
William G. Scholz Group Vice President- None
Suite 205 Arizona/Las Vegas
7333 E Doubletree Ranch Rd
Scottsdale, AZ 85258
Stuart A. Sedlacek Vice President- None
IDS Tower 10 Assured Assets
Minneapolis, MN 55440
<PAGE>
PAGE 68
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Donald K. Shanks Vice President- None
IDS Tower 10 Property Casualty
Minneapolis, MN 55440
F. Dale Simmons Vice President-Senior None
IDS Tower 10 Portfolio Manager,
Minneapolis, MN 55440 Insurance Investments
Judy P. Skoglund Vice President- None
IDS Tower 10 Human Resources and
Minneapolis, MN 55440 Organization Development
Julian W. Sloter Group Vice Presidnet- None
Ste 1700 Orlando FinCtr Orlando/Jacksonville
800 North Magnolia Ave.
Orlando, FL 32803
Ben C. Smith Vice President- None
IDS Tower 10 Workplace Marketing
Minneapolis, MN 55440
William A. Smith Vice President and None
IDS Tower 10 Controller-Private
Minneapolis, MN 55440 Client Group
James B. Solberg Group Vice President- None
IDS Tower 10 Eastern Iowa Area
Minneapolis, MN 55440
Bridget Sperl Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440 Management Services
Paul J. Stanislaw Group Vice President- None
Suite 1100 Southern California
Two Park Plaza
Irvine, CA 92714
Lois A. Stilwell Group Vice President- None
Suite 433 Outstate Minnesota Area/
9900 East Brn Road North Dakota/Western Wisconsin
Minnetonka, MN 55343
William A. Stoltzmann Vice President and Gen'l Counsel
IDS Tower 10 Assistant General & Asst. Secry
Minneapolis, MN 55440 Counsel
James J. Strauss Vice President- None
IDS Tower 10 Corporate Planning
Minneapolis, MN 55440 and Analysis
<PAGE>
PAGE 69
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Jeffrey J. Stremcha Vice President-Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440
Neil G. Taylor Group Vice President- None
Suite 425 Seattle/Tacoma
101 Elliott Avenue West
Seattle, WA 98119
John R. Thomas Senior Vice President- None
IDS Tower 10 Information and
Minneapolis, MN 55440 Technology
Melinda S. Urion Vice President and Assistant
IDS Tower 10 Corporate Controller Secretary
Minneapolis, MN 55440
Peter S. Velardi Group Vice President- None
Suite 180 Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338
Charles F. Wachendorfer Group Vice President- None
Suite 100 Denver/Salt Lake City/
Stanford Plaza II Albuquerque
7979 East Tufts Ave Pkwy
Denver, CO 80237
Wesley W. Wadman Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Norman Weaver Jr. Senior Vice President- None
1010 Main St Suite 2B Field Management
Huntington Beach, CA 92648
Michael L. Weiner Vice President- None
IDS Tower 10 Corporate Tax
Minneapolis, MN 55440 Operations
Lawrence J. Welte Vice President- None
IDS Tower 10 Investment Administration
Minneapolis, MN 55440
Jeffry M. Welter Vice President- None
IDS Tower 10 Equity and Fixed Income
Minneapolis, MN 55440 Trading
<PAGE>
PAGE 70
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
William N. Westhoff Senior Vice President and None
IDS Tower 10 Global Chief Investment
Minneapolis, MN 55440 Officer
Thomas L. White Group Vice President- None
Suite 200 Cambridge Ct Cleveland Metro
28601 Chagrin Blvd.
Woodmere, OH 44122
Eric S. Williams Group Vice President- None
Suite 250 Virginia
3951 Westerre Parkway
Richmond, VA 23233
Edwin M. Wistrand Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
Michael R. Woodward Senior Vice President- None
32 Ellicott St Ste 100 Field Management
Batavia, NY 14020
Item 30. Location of Accounts and Records
American Partners Life Insurance Company
80 South Eighth Street
Minneapolis, MN
Item 31. Management Services
Not Applicable
Item 32. Undertakings
(a) Registrant undertakes to file a post-effective
amendment to this registration statement as
frequently as is necessary to ensure that the
audited financial statements in the registration
statement are never more than 16 months old for so
long as payments under the variable annuity
contracts may be accepted;
(b) Registrant undertakes to include either (1) as part
of any application to purchase a contract offered by
the prospectus, a space that an applicant can check
to request a Statement of Additional Information, or
(2) a post card or similar written communication
affixed to or included in the prospectus that the
applicant can remove to send for a Statement of
Additional Information;
<PAGE>
PAGE 71
(c) Registrant undertakes to deliver any Statement of
Additional Information and any financial statements
required to be made available under this Form
promptly upon written or oral request.
<PAGE>
PAGE 72
SIGNATURES
As required by the Securities Act of 1933 and the Investment
Company Act of 1940, American Partners Life Insurance Company, on
behalf of the Registrant has duly caused this Registration
Statement to be signed on its behalf, in the City of Minneapolis,
and State of Minnesota, on the 29th day of August, 1995.
APL VARIABLE ANNUITY ACCOUNT 1
(Registrant)
By American Partners Life Insurance Company
(Sponsor)
By /s/ Richard W. Kling*
Richard W. Kling
Chairman of the Board
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the
capacities indicated on the 29th day of August, 1995.
Signature Title
/s/ Richard W. Kling* Director and Chairman of
Richard W. Kling the Board
/s/ Alan R. Dakay* Director and President
Alan R. Dakay
/s/ Lorraine R. Hart* Director and Vice President
Lorraine R. Hart
/s/ William A. Stoltzmann* Director, Vice President,
William A. Stoltzmann General Counsel and
Secretary
/s/ Melinda S. Urion* Director, Vice President
Melinda S. Urion and Controller
*Signed pursuant to Power of Attorney filed electronically as
Exhibit 14.2 to Registration Statement No. 33-57731 is incorporated
herein by reference.
______________________________
Mary Ellyn Minenko
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PAGE 73
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement is comprised of the following papers
and documents:
The Cover Page.
Cross-reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other Information.
The signatures.
Exhibits.
<PAGE>
PAGE 1
APL VARIABLE ANNUITY ACCOUNT 1
Registration Number 33-57731/812-9484
EXHIBIT INDEX
Exhibit 3: Form of Variable Annuity Distribution Agreement.
Exhibit 4.1: Form of Deferred Annuity Contract for nonqualified
contract (form 32028).
Exhibit 4.2: Form of Deferred Annuity Contract for qualified
contract (form 32034-IRA).
Exhibit 5.1: Form of Application for American Partners Life
Variable Annuity (form 32025).
Exhibit 8: Form of Participation Agreement.
Exhibit 9: Opinion of counsel.
Exhibit 10: Consent of Independent Auditors.
Exhibit 14.1: Financial Data Schedule.
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PAGE 1
VARIABLE ANNUITY AND LIFE INSURANCE DISTRIBUTION AGREEMENT
This Variable Annuity and Life Insurance Distribution Agreement
("Agreement") by and between American Partners Life Insurance
Company ("American Partners Life"), an Arizona corporation, and
American Express Financial Advisors Inc., ("AEFA") a Delaware
corporation, with respect to the sale of variable annuity and life
insurance contracts.
WITNESSETH THAT:
1. American Partners Life is licensed in the State of Arizona
by the Arizona Insurance Department to conduct a life insurance,
annuities, and accident and health insurance business. American
Partners Life has established several separate accounts, ("the
Accounts"), for the purpose of providing variable annuity contracts
and life insurance policies. American Partners Life was organized
under the laws of the State of Arizona and will secure all
necessary approvals from the Arizona Insurance Department to sell
its variable annuity contracts.
2. AEFA is registered with the National Association of
Securities Dealers, Inc. ("NASD") as a broker-dealer under the
Securities Exchange Act of 1934 ("1934 Act") and is qualified to do
business in those states where American Partners Life is licensed
to do business.
3. American Partners Life hereby appoints AEFA to solicit and
procure, in authorized states, applications for variable annuity
contracts and life insurance policies to be issued by American
Partners Life through the Accounts. As used herein, the term
"variable annuity contract" or "variable life insurance policy"
means any annuity contract or life insurance policy under which all
or any part of the benefits may be paid on a variable basis.
4. No person affiliated with AEFA shall offer or sell
American Partners Life variable annuity contracts or life insurance
policies unless duly licensed (a) as an "associated person" of AEFA
pursuant to the 1934 Act, and not subject to a bar or suspension
order thereunder and (b) as an insurance agent for American
Partners Life. Such qualification and licensing shall be the sole
responsibility of AEFA.
5. Sales compensation to distributors of each American
Partners Life variable annuity contract or life insurance policy
sold shall be paid in accordance with compensation schedules
published from time to time by AEFA. Any compensation payable
shall be subject to the terms and conditions contained in the form
of agreements between AEFA and the distributors, as amended.
6. It is agreed, with respect to those services which are to
be provided to American Partners Life upon an allocated cost basis
by AEFA, that any such method of allocation or classification of
expenses incurred or services rendered shall be in conformance with
the laws and regulations of the Arizona Insurance Department. If
at any time either American Partners Life or AEFA can reasonably
<PAGE>
PAGE 2
demonstrate that any method of allocation is more equitable and in
conformance with such laws and regulations, the current method of
allocation shall then be subject to renegotiation. In any event,
review of all expenses for the year will be made annually, to make
all necessary adjustments in the amounts billed hereunder in order
to conform them with the amount of such expenses actually incurred.
7. For the solicitation of applications by AEFA through its
distributors, and for the motivational and supervisory services and
field training services performed by AEFA, American Partners Life
will reimburse AEFA for the compensation it becomes obligated, by
reason of American Partners Life's variable annuity or life
insurance business, to pay to its distributors pursuant to written
agreements with such persons; provided, however, that such
agreements have been approved in advance by American Partners Life
and comply in all respects with the insurance laws and regulations
of the State of Arizona; and provided, further, that AEFA hereby
agrees that any such agreement will be terminated or modified by it
upon direction of American Partners Life. AEFA agrees to hold
American Partners Life harmless from any claim for compensation by
any such distributor with respect to services on behalf of AEFA as
contemplated in this agreement.
8. AEFA assumes full responsibility for the supervision of
its associated persons in all their activities covered by this
agreement.
9. American Partners Life may conduct training programs for
distributors at times and places to be agreed upon, for the purpose
of familiarizing distributors with the provisions of American
Partners Life contracts, desirable sales techniques and
administrative procedures.
10. American Partners Life will supply AEFA with reasonable
quantities of current prospectuses as filed with the Securities and
Exchange Commission, periodic reports, and other sales material.
In selling American Partners Life contracts, AEFA shall use only
sales material which has been approved by American Partners Life
and filed with the NASD.
11. Purchase applications, American Partners Life prospectus
receipts, other American Partners Life forms and payments received
by distributors will be promptly forwarded to the appropriate
office. AEFA will conduct a review to determine the suitability of
the sale.
Distributors shall follow established American Partners Life
procedures regarding forms, applications, prospectus receipts, and
other such matters of administration. After AEFA has conducted its
review, it will forward all relevant material, including any of its
own completed forms, to American Partners Life's service office.
American Partners Life will then make a decision whether to accept
or reject the variable annuity or life insurance application.
12. Upon issuance, each variable annuity contract or life
insurance policy sold through AEFA will be mailed directly from
American Partners Life to the appropriate office or to the
distributor for personal delivery to the contract holder.
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PAGE 3
13. Except as otherwise provided in the Agreement, all
standard American Partners Life administrative procedures will be
followed. American Partners Life will, whenever appropriate,
advise AEFA of such procedures.
14. This agreement may be terminated at any time by mutual
agreement of the parties, or by thirty day notice given by either
to the other.
15. This agreement shall become effective subject to
applicable regulatory approvals, and shall supersede all prior
agreements between the parties hereto regarding the distribution of
variable insurance policies or annuity contracts.
16. This agreement shall be governed by Arizona Law.
American Partners Life Insurance Company
By:__________________________________
Vice President
American Express Financial Advisors Inc.
By:__________________________________
Vice President
Dated:_______________________________
<PAGE>
PAGE 1
American
Partners
Life Insurance Company
Administrative Office:
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440
DEFERRED ANNUITY CONTRACT
- - Flexible purchase payments.
- - Optional fixed dollar or variable accumulation values.
- - Fixed dollar annuity payments to begin on the annuity start date.
- - This contract is nonparticipating.
Annuitant: John Doe Contract Date: April 1, 1995
Contract Number: 9300-1234567 Retirement Date: April 1, 2015
This is a deferred annuity contract. It is a legal contract
between you as the owner, and us, American Partners Life Insurance
Company, a Stock Company, Phoenix, Arizona. PLEASE READ YOUR
CONTRACT CAREFULLY.
If the annuitant is living on the Annuity Start Date, upon your
request, we will begin to pay you monthly annuity payments. Any
payments made by us are subject to the terms of this contract.
We issue this contract in consideration of your application and the
initial purchase payment.
Signed for and issued by American Partners Life Insurance Company
at our administrative office in Minneapolis, Minnesota, as of the
contract date shown above.
ACCUMULATION VALUES, WHEN BASED ON THE INVESTMENT RESULTS OF THE
VARIABLE SUB-ACCOUNTS, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED
DOLLAR AMOUNT. SEE PAGE 9 FOR VARIABLE PROVISIONS.
NOTICE OF YOUR RIGHT TO EXAMINE THIS CONTRACT FOR 10 DAYS
If for any reason you are not satisfied with this contract, return
it to us or our representative within 10 days after you receive it.
We will then cancel this contract. Upon such cancellation we will
refund the greater of: (1) your purchase payment without investment
earnings, or (2) your contract value plus any premium tax charges
paid. This contract will then be considered void from its start.
President
Secretary
Form 32028 4/95
<PAGE>
PAGE 2
GUIDE TO CONTRACT PROVISIONS
Definitions Important words and meanings/Page 3
General Provisions Entire contract; Incontestability;
Benefits based upon incorrect data;
State Laws; Federal Laws; Reports to
owner; Evidence of survival;
Protection of proceeds; Payments by
us; Voting rights; Nonparticipating/
Page 4
Ownership and Beneficiary Owner rights; Change of ownership:
Beneficiary; Change of Beneficiary;
Assignment/Page 5
Payments to Beneficiary Describes options and amounts
payable upon death/Page 6
Purchase Payments Purchase payments amounts and
intervals; payment limits;
Allocation of purchase
payments/Page 7
Contract Value Describes the fixed and variable
account contract values; Transfers
of contract values; Contract
administrative charge; Premium
taxes/Page 8
Fixed and Variable Accounts Describes the variable accounts
and sub accounts, accumulation units
and values; Net investment factor;
Mortality and expense risk charge;
Annuity unit value/Page 9
Surrender Provisions Surrender of the contract for its
surrender value; Rules for
surrender/Page 11
Annuity Provisions When annuity payments begin;
Different ways to receive annuity
payments; Determination of payment
amounts/Page 12
Table of Settlement Rates Tables showing the guaranteed fixed
annuity payments for the various
payment plans/Page 13
<PAGE>
PAGE 3
CONTRACT DATA
Annuitant: John Doe Contract Date: April 1, 1995
Contract Number: 0000-1234567 Annuity Start Date: April 1, 2015
Contract Owner: John Doe
DEFERRED ANNUITY CONTRACT
Upon issuance of this contract your purchase payments have been
scheduled to be paid as shown below. You may change the amount and
frequency as provided in this contract. Refer to the purchase
payments provision on Page 7.
Amount Submitted With Application: $100
Scheduled Purchase Payment:
Annual Amount: $1,200
FIXED ACCOUNT AND VARIABLE ACCOUNT INVESTMENT OPTIONS
Variable
Subaccounts Mutual Fund
CCR IDS Life Capital Resource Fund
CSI IDS Life Special Income Fund
CMS IDS Life Moneyshare Fund
CMG IDS Life Managed Fund
CIE IDS Life International Equity Fund
CAG IDS Life Aggressive Growth Fund
CAB Montgomery VIP Emerging Markets
CBD Montgomery Growth
CDJ INVESCO Industrial Income
Fixed Account: Guaranteed Fixed Account Interest Rate:
3% per year compounded annually
As of the date this contract was issued, any amounts allocated to
the fixed account will earn interest, for the first year, at the
annual effective rate of 4.65%. If a new rate is declared, it will
apply to amounts paid or allocated to the fixed account after the
new rate is effective.
SURRENDER CHARGE: None
CONTRACT ADMINISTRATIVE CHARGE: $30 per year. Charge is currently
waived if purchase payment less withdrawals are equal to or greater
than $10,000. We reserve the right to apply the charge to all
contracts regardless of purchase payments made. We also reserve
the right to increase the charge to not more than $50 per year.
See page 8.
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PAGE 4
PURCHASE PAYMENT LIMITS:
Maximum Minimum
1st contract year: $1,000,000 Additional Purchase Payment: $100
Each contract year thereafter: $50,000
<PAGE>
PAGE 5
DEFINITIONS
The following words are used often in this contract. When we use
these words, this is what we mean:
annuitant
The person or persons on whose life monthly annuity payments
depend.
you, your
The owner of this contract. The owner may be someone other than
the annuitant. The owner may be changed as provided in this
contract.
we, our, us
American Partners Life Insurance Company
accumulation unit
An accumulation unit is an accounting unit of measure. It is used
to calculate the contract value prior the Annuity Start Date.
contract date
It is the date from which contract anniversaries, contract years,
and contract months are determined. Your contract date is shown
under Contract Data.
contract anniversary
The same day and month as the contract date each year that the
contract remains in force.
annuity start date
The date shown under Contract Data on which annuity payments are to
begin. This date may be changed as provided in this contract. You
will be notified prior to the annuity start date in order to select
an appropriate annuity payment plan.
settlement
The application of the contract value of this contract to under an
Annuity Payment Plan to provide annuity payments.
valuation date
A valuation date is each day the New York Stock Exchange is open
for trading.
valuation period
A valuation period is the interval of time commencing at the close
of business on each valuation date and ending at the close of
business on the next valuation date.
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PAGE 6
fixed account
A fixed account is made up of all our assets other than those in
any separate account.
written request
A request in writing signed by you and delivered to us at our
administrative office.
subaccounts
The portfolios of the Variable Account. The subaccounts available
on the contract date are named under Contract Data.
contract value
The sum of the Fixed Account Contract Value (which receives a
declared interest rate) and the Variable Account Contract Value
(which varies with the investment performance of the elected
subaccounts) for this contract.
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PAGE 7
GENERAL PROVISIONS
General information about the contract.
Entire Contract
This contract form and the application, a copy of which is
attached, are the entire contract between you and us.
No one except one of our corporate officers (President, Vice
President, Secretary or Assistant Secretary) can change or waive
any of our rights or requirements under this contract. That person
must do so in writing. None of our representatives or other
persons has the authority to change or waive any of our rights or
requirements under this contract.
Incontestable
This contract is incontestable from its date of issue.
Benefits Based on Incorrect Data
If the amount of benefits is determined by data as to a person's
age that is incorrect, benefits will be recalculated on the basis
of the correct data. Any underpayments made by us will be made up
immediately. Any overpayments made by us will be subtracted from
the future payments.
State Laws
This contract is governed by the law of the state in which it is
delivered. The values and benefits of this contract are at least
equal to those required by such state.
Federal Laws
This contract is intended to qualify as an annuity contract for
Federal income tax purposes. To that end, the provisions of this
contract are to be interpreted to ensure or maintain such tax
qualification, despite any other provisions to the contrary. We
reserve the right to amend this contract to reflect any
clarifications that may be needed or is appropriate to maintain
such qualification or to conform the contract any applicable
changes in the tax qualification requirements. We will send you a
copy of any such amendments.
Reports to Owner
At least once a year we will send you a statement showing the
contract value and the cash surrender value of this contract. This
statement will be based on any laws or regulations that apply to
contracts of this type.
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PAGE 8
Evidence of Survival
Where any payments under this contract depend on the recipient or
annuitant being alive on a given date, proof that such condition
has been met may be required by us. Such proof may be required
prior to making payments.
Protection of Proceeds
Payments under this contract are not assignable by any beneficiary
prior to the time they are due. To the extent allowed by law,
payments are not subject to the claims of creditors or to legal
process.
Payments By Us
All sums payable by us are payable at our administrative office.
Any surrender payment based on the variable account contract value
shall be payable only from the variable subaccounts.
Voting Rights
As long as federal law requires, we will give certain voting rights
to contract owners. As contract owner, if you have voting rights
we will send a notice to you telling you the time and place of a
shareholder meeting. The notice will also explain matters to be
voted upon and how many votes you get.
Nonparticipating
This contract does not participate in the profits or surplus of the
company.
<PAGE>
PAGE 9
OWNERSHIP AND BENEFICIARY
This section describes information about the contract owner and
beneficiary.
Owner's Rights
As long as the annuitant is living and unless otherwise provided in
this contract, you may exercise all rights and privileges provided
in this contract or allowed by us.
o Name a different owner for the contract;
o Name or change the beneficiary.
o Assign the contract to another person.
o Withdraw money from the contract.
o Select an annuity payment plan and specify the annuity start
date;
o Receive the income payments if an annuity payment plan is
started.
o Name or change the person who is to receive payments if an
annuity payment plan is chosen.
o Cancel the contract and receive its value.
These rights are more fully described below and on the following
pages.
Change of Ownership
You can change the ownership of this contract by written request on
a form approved by us. The change must be made while the annuitant
is living. Once the change is recorded by us, it will take effect
as of the date of your request, subject to any action taken or
payment made by us before the recording.
Beneficiary
Beneficiaries are those you name, in a form satisfactory to us, to
receive benefits of this contract if you or the annuitant die while
this contract is in force.
Only those beneficiaries who are living when death benefits become
payable may share in the benefits, if any. If no beneficiary is
then living, we will pay the benefits to you, if living, otherwise
to your estate.
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PAGE 10
Change of Beneficiary
You may change the beneficiary anytime while the annuitant is
living by satisfactory written request to us. Once the change is
recorded by us, it will take effect as of the date of your request,
subject to any action taken or payment made by us before the
recording.
Assignment
While the annuitant is living, you can assign this contract or any
interest in it. Your interest and the interest of any beneficiary
is subject to the interest of the assignee. As assignment is not a
change of ownership and an assignee is not an owner as these terms
are used in this contract. Any amounts payable to the assignee
will be paid in a single sum.
A copy of any assignment must be submitted to us at our
administrative office. Any assignment is subject to any action
taken or payment made by us before the assignment was recorded at
our administrative office. We are not responsible for the validity
of any assignment.
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PAGE 11
PAYMENTS TO BENEFICIARY
This section of the contract describes what happens and what is
payable after the death of the owner or annuitant.
Death Benefit Before the Annuity Start Date
If the annuitant or owner dies before the annuity start date while
this contract is in force we will pay to the beneficiary the
greater of:
1. the contract value; or
2. the purchase payments paid less any amounts surrendered.
The above amount will be payable in a lump sum upon the receipt of
due proof of death of the annuitant or owner whichever first
occurs. The beneficiary may elect to receive payment anytime
within 5 years after the date of death.
In lieu of a lump sum, payment may be made under an Annuity Payment
Plan, provided:
1. the beneficiary elects the plan within 60 days after we
receive due proof of death; and
2. payments begin no later than one year after the date of
death; and
3. the plan provides payments over a period which does not
exceed the life of the beneficiary, or the life expectancy
of the beneficiary.
In this event, the reference to "annuitant" in the Annuity
Provisions shall apply to the beneficiary.
Any amounts payable or applied by us as described in this section
will be based on the contract value as of the valuation date on or
next following the date on which due proof of death is received at
our administrative office.
Spouse Option to Continue Contract Upon Owner's Death
If the owner's death occurs prior to the annuity start date, the
owner's spouse, if designated as sole beneficiary, may elect in
writing to forego receipt of the death benefit and instead continue
this contract in force as owner. The election by the spouse must
be made within 60 days after we receive due proof of death.
Death Benefit After the Annuity Start Date
If the annuitant or owner dies after the annuity start date, the
amount payable, if any, will be as provided in the Annuity Payment
Plan then in effect.
<PAGE>
PAGE 12
PURCHASE PAYMENTS
This section describes the rules about how you can make payments
into the contract.
Purchase Payments
Purchase payments are the payments you make for this contract and
the benefits it provides. Purchase payments must be paid or mailed
to us at our administrative office or to our authorized agent. If
requested, we'll give you a receipt for your purchase payments.
Upon payment to us, purchase payments become our property.
Net purchase payments are that part of your purchase payments
applied to the contract value. A net purchase payment is equal to
the purchase payment less any applicable premium tax charge.
Amount and Intervals
Purchase payments may be paid in a single sum or in installments
until the earlier of: (1) the date this contract terminates by
surrender or otherwise; or (2) the date on which annuity payments
begin.
Subject to the Payment Limits Provision you may: (1) stop and/or
restart purchase payments; or (2) increase or decrease the amount
of your purchase payments; or (3) change the interval of your
purchase payments.
Payment Limits Provision
Maximum Purchase Payments - The maximum purchase payments in the
first or later contract years may not exceed the amounts shown
under Contract Data. We reserve the right to increase the
maximums. We will not decrease the maximum.
Minimum Purchase Payments - Upon issue of this contract, a purchase
payment intended as a Single Purchase Payment must be at least
$2,000. If you intend to make installment purchase payments such
payments, on an annualized basis, must be at least equal to $1,200.
(For example: 12 monthly payments of $100 each; or four quarterly
payments of $300 each). The minimum additional purchase payment is
$100.
We also reserve the right to cancel this contract if both of the
following conditions exist at the same time: (1) no purchase
payments have been paid for a continuous period of 24 months; and
(2) less than $1,000 in purchase payments have been paid under this
contract. In this event we will give you 30 days written notice of
our intent to cancel this contract. Upon such cancellation we will
pay you the contract value in one sum. This contract will then
terminate.
<PAGE>
PAGE 13
Allocation of Purchase Payments
You may allocate your purchase payments to the fixed account and
among one or more of the variable subaccounts. Your choice for
each account may be made in any whole percent from 0% to 100% as
long as the total adds up to 100%.
The entire portion of any net purchase payment that you allocate to
the Variable Subaccounts will be invested in the Moneyshare
subaccount until the estimated end of the "Right to Examine the
Contract" period. The contract value in the Moneyshare subaccount
will then be transferred to the subaccounts you elected on the
application.
The entire portion of any net purchase payment that you allocate to
the Fixed Account will be invested in the Fixed Account when
received.
Additional net purchase payments received after the "Right to
Examine the Contract" period will be allocated to the Fixed Account
and the Variable Subaccounts as you elected on the application
unless you elect a different allocation. By written request, or by
another method agreed to by us, you may change your purchase
payment allocations.
The first net purchase payment will be allocated as of the end of
the valuation period during which we make an affirmative decision
to issue this contract. Net purchase payments after the first will
be allocated as of the end of the valuation period during which we
receive the payment at our administrative office.
<PAGE>
PAGE 14
CONTRACT VALUE
This section explains the main parts of the contract that determine
its value and charges that may apply.
Contract Value
The contract value at any time is the sum of: (1) the Fixed Account
Contract Value; and 2) the Variable Account Contract Value.
If: (1) part or all of the contract value is surrendered; or (2)
charges described herein are made against the contract value; then
a number of accumulation units from the variable subaccounts and an
amount from the fixed account will be deducted to equal such
amount. For surrenders, deductions will be made from the fixed or
variable subaccounts that you specify. Otherwise, the number of
units from the variable subaccounts and the amount from the fixed
account will be deducted in the same proportion that your interest
in each bears to the total contract value.
Fixed Account Contract Value
The fixed account contract value at any time will be: (1) the sum
of all amounts credited to the fixed account under this contract;
less (2) any amounts deducted for charges or surrenders.
We will credit interest to the fixed account contract value.
Interest will begin to accrue on the date the purchase payments
which are received in our administrative office become available to
us for use. Such interest will be credited at rates that we
determine from time to time. However, we guarantee that the rate
will not be less than the Guaranteed Interest Rate shown under
Contract Data.
Variable Account Contract Value
The variable account contract value at any time will be: (1) the
sum of the value of all variable subaccount accumulation units
under this contract resulting from purchase payments so allocated,
or transfers among the variable and fixed accounts; less (2) any
units deducted for charges or surrenders.
Transfers of Contract Values
While this contract is in force prior to the annuity start date,
transfer of contract values may be made as outlined below:
o between the variable subaccounts; or
o from the variable subaccount(s) to the fixed account; or
o from the fixed account to the variable subaccount(s).
o The minimum transfer amount is $100, or if less, the entire
value in the account from which the transfer is being made.
Smaller minimums may apply to automated transfer procedures.
<PAGE>
PAGE 15
You may make a transfer by written request. Transfer requests may
also be made according to telephone procedures or automated
transfer procedures that are then currently in effect, if any. If
you make 12 transfer requests in a contract year we charge $25 for
each additional request. This transfer privilege may be suspended
or modified by us at any time.
Contract Administrative Charge
We charge a fee for establishing and maintaining our records for
this contract. The charge is $30 per year and is deducted from the
contract value at the end of each contract year prior to the
annuity start date. We currently waive this annual charge if your
total purchase payments, less any withdrawals, equal at least
$10,000. The charge does not apply after the annuity start date.
Although we do not now intend to charge more than $30 per year, we
reserve the right to increase this annual charge to up to $50 if
warranted by the expenses we incur. We also reserve the right to
assess this charge, prior to the annuity start date against all
contracts regardless of the amount of purchase payments you have
made.
Premium Tax Charges
If a premium tax is imposed by any taxing authority, we reserve the
right to deduct the amount of the tax from your purchase payments
when they are received or from the contract value either at the
time of surrender or when you elect an annuity payment plan.
<PAGE>
PAGE 16
FIXED AND VARIABLE ACCOUNT
This section provides detailed information about the variable
account, accumulation units of the variable subaccounts and how
they are valued.
The Fixed Account
The fixed account is our general account. It is made up of all of
our assets other than: (1) those in the variable accounts; and (2)
those in any other segregated asset account.
The Variable Account
The variable account is a separate investment account of ours. It
consists of several subaccounts which are named under Contract
Data. We have allocated a part of our assets for this and other
similar contracts to the variable subaccounts. Such assets remain
our property. However, they may not be charged with the
liabilities from any other business in which we may take part.
Investments of the Variable Account
Purchase payments applied to the variable subaccount will be
allocated as specified by the owner. Each variable subaccount will
buy, at net asset value, shares of the fund shown for that account
under Contract Data or as later added or changed.
We may change the mutual funds from which the variable subaccounts
buy shares if laws or regulations change, the existing funds become
unavailable or in our judgment, the funds are no longer suitable
for the subaccounts. If any of these situations occur, we would
have the right to substitute funds other that those shown under
Contract Data. We may also add additional subaccounts investing in
other funds.
When required, we would first seek approval of the Securities and
Exchange Commission and, the insurance regulator of the state where
this contract is delivered.
Valuation of Assets
Mutual fund shares in the variable subaccounts will be valued at
their net asset value.
Variable Account Accumulation Units
The company will credit net purchase payments and amounts of
variable subaccount transfers in the form of accumulation units.
The number of units to be credited to each subaccount will be
determined by dividing the net amount allocated to that subaccount
by the unit value of the subaccount. In the case of the initial
net purchase payment, units will be credited on the date we make an
affirmative decision to issue this contract. For additional
payments, units will be credited as of the valuation period during
which the purchase payment is received.
<PAGE>
PAGE 17
The amount of any Contract Administrative Charge, other applicable
charges or partial surrender from the Variable Account Contract
Value will reduce the number of units credited to the contract in
the variable subaccounts. A transfer out of a subaccount will
reduce the number of units credited to the contract in that
subaccount while a transfer into a subaccount will increase the
number of units.
Variable Account Accumulation Unit Value
The value of an accumulation unit for each of the variable
subaccounts was arbitrarily set at $1 when the first mutual fund
shares were bought. The value for any later valuation period is
found as follows:
The accumulation unit value for each variable subaccount for
the last prior valuation period is multiplied by the net
investment factor for the same account for the next
following valuation period. The result is the accumulation
unit value. The value of an accumulation unit may increase
or decrease from one valuation period to the next.
Net Investment Factor
The net investment factor is an index applied to measure the
investment performance of a variable subaccount from one valuation
period to the next. The net investment factor may be greater or
less than one; therefore, the value of an accumulation unit may
increase or decrease.
The net investment factor for any such account for any valuation
period is determined by: dividing (1) by (2) and subtracting (3)
from the result. This is done where:
(1) is the sum of:
a. the net asset value per share of the mutual fund held
in the variable subaccount determined at the end of the
current valuation period; plus
b. the per share amount of any dividend or capital gain
distributions made by the mutual fund held in the
variable subaccount, if the "ex-dividend" date occurs
during the current valuation period.
(2) is the net asset value per share of the mutual fund held in
the variable subaccount, determined at the end of the last
prior valuation period.
(3) is a factor representing the mortality and expense risk
charge.
<PAGE>
PAGE 18
Mortality and Expense Risk Charge
In calculating accumulation unit values we will deduct a mortality
and expense risk charge from the variable subaccounts equal, on an
annual basis, to 1.00% of the daily net asset value. This
deduction is made to compensate us for assuming the mortality and
expense risks under contracts of this type. We estimate that
approximately 2/3 of this charge is for assumption of mortality
risk and 1/3 is for assumption of expense risk. The deduction will
be: (1) made from each variable account; and (2) computed on a
daily basis.
<PAGE>
PAGE 19
SURRENDER PROVISIONS
This section describes how you may obtain some or all of the value
of your contract other than through an Annuity Payment Plan.
Surrender
By written request and subject to the rules below you may:
1. surrender this contract for the total surrender value; or
2. partially surrender this contract for a part of the
surrender value.
Surrender Value
The surrender value at any time will be:
1. the contract value;
2. minus any applicable premium tax.
Rules For Surrender
All surrenders will have the following conditions:
1. You must apply by written request or other method agreed to
by us: (a) while this contract is in force; and (b) prior to
the earlier of the annuity start date or the death of the
annuitant.
2. Unless we agree otherwise, you must surrender an amount
equal to at least $100 or the contract value, if less.
3. The amount surrendered, will normally be paid to you within
seven days of the receipt of your written request and this
contract, if required. In accordance with state law for
surrenders from the fixed account, we have the right to
defer payment to you for up to 6 months from the date we
receive your request.
4. For partial surrenders, if you do not specify from which
accounts the surrender is to be made, the surrender will be
made from the variable subaccounts and fixed account in the
same proportion as your interest in each bears to the
contract value.
5. Any amounts surrendered can not be reversed. Amounts paid
after a partial surrender are considered new purchase
payments.
Upon surrender for the full surrender value this contract will
terminate. We may require that you return the contract to us
before we pay the full surrender value.
<PAGE>
PAGE 20
Suspension or Delay in Payment of Surrender
We have the right to suspend or delay the date of any surrender
payment from the variable subaccounts for any period:
1. When the New York Stock Exchange is closed; or
2. When trading on the New York Stock Exchange is restricted;
or
3. When an emergency exists as a result of which: (a)
disposal of securities held in the variable subaccounts is
not reasonably practicable; or (b) it is not reasonably
practicable to fairly determine the value of the net assets
of the variable subaccount; or
4. During any other period when the Securities and Exchange
Commission, by order, so permits for the protection of
security holders.
Rules and regulations of the Securities and Exchange Commission
will govern as to whether the conditions set forth in 2 and 3
exist.
<PAGE>
PAGE 21
ANNUITY PROVISIONS
This section describes using the contract value as a source of
guaranteed income and different ways to structure that income.
Settlement
When settlement occurs, the contract value less any applicable
premium taxes will be applied to make annuity payments under an
Annuity Payment Plan. The first payment will be made as of the
annuity start date. This date is shown under Contract Data unless
you have changed it. Before payments begin we will require
satisfactory proof that the annuitant is alive. We may also
require that you exchange this contract for a supplemental contract
which provides the annuity payments.
Change of Annuity Start Date
You may change the annuity start date shown for this contract.
Tell us the new date by written request. Any change must be
received by us at least 30 days prior to the date being changed.
However the annuity start date may not be later than the later of:
(1) the annuitant's 85th birthday; or (2) the tenth contract
anniversary. The new annuity start date you select must be at
least 30 days after we receive your written request.
Annuity Payment Plans
Subject to the terms of this contract annuity payments will be made
on a fixed dollar basis. You can schedule receipt of annuity
payments according to one of the Plans A through E below or another
plan agreed to by us.
Plan A - This provides monthly annuity payments during the
lifetime of the annuitant. No payments will be made after
the annuitant dies.
Plan B - This provides monthly annuity payments during the
lifetime of the annuitant with a guarantee by us that
payments will be made for a period of at least five, ten or
fifteen years. You must select the guaranteed period.
Plan C - This provides monthly annuity payments during the
lifetime of the annuitant with a guarantee by us that
payments will be made for a certain number of months. We
determine the number of months by dividing the amount
applied under this Plan by the amount of the first monthly
annuity payment.
Plan D - Monthly payments will be paid during the lifetime
of the annuitant and a joint annuitant. When either the
annuitant or the joint annuitant dies we will continue to
make monthly payments during the lifetime of the survivor.
No payments will be paid after the death of both the
annuitant and joint annuitant.
<PAGE>
PAGE 22
Plan E - (Installments for a specified period) This provides
monthly annuity payments for a period of years. The period
of years may be no less than 10 nor more than 30.
By written request to us at least 30 days before the Annuity Start
Date, you may select the Plan. If at least 30 days before the
Annuity Start Date we have not received your written request to
select a Plan, we will make payments according to Plan B with
payments guaranteed for ten years.
If the amount to be applied to a Plan would not provide a monthly
payment of at least $20, we have the right to make a lump sum
payment of the contract value.
Fixed Annuity
A fixed annuity is an annuity with payments that are guaranteed by
us as to dollar amount. Fixed annuity payments after the first
will never be less than the amount of the first payment. At
settlement, the contract value will be applied to the applicable
Annuity Table. This will be done in accordance with the Payment
Plan chosen. The amount payable for each $1,000 so applied is
shown in Table of Settlement Rates on page 13.
<PAGE>
PAGE 23
TABLE OF SETTLEMENT RATES
Rates used for various Annuity Payment Plans.
The amount of the first and all subsequent monthly fixed dollar
annuity payments for each $1,000 of value applied under any Payment
Plan will be based on our fixed dollar Table of Settlement Rates in
effect on the annuity start date. Such rates are guaranteed to be
not less than those shown in the table below. The amount of such
annuity payments under Plans A, B, and C will depend upon the sex
and the adjusted age of the annuitant on the annuity start date.
The amount of such annuity payments under Plan D will depend upon
the sex and the adjusted age of the annuitant and joint annuitant
on the annuity start date. Adjusted age shall be equal to the age
nearest birthday minus an "adjustment" depending on the calendar
year of birth of the annuitant and joint annuitant as follows:
Calendar Calendar
Year of Year of
Annuitant's Annuitant's
Birth Adjustment Birth Adjustment
Prior to 1920 0 1945 through 1949 6
1920 through 1924 1 1950 through 1959 7
1925 through 1929 2 1960 through 1969 8
1930 through 1934 3 1970 through 1979 9
1935 through 1939 4 1980 through 1989 10
1940 through 1944 5 After 1989 11
<PAGE>
PAGE 24
<TABLE>
<CAPTION>
Dollar Amount of Each Monthly Annuity Payment Per $1,000 Applied
PLAN A PLAN B PLAN C PLAN D - Joint and Survivor
Life 5 Years 10 Years 15 Years With Adj. Adjusted Age of Female Joint Annuitant
Adj. Income Certain Certain Certain Refund Male 10 Years 5 Years Same 5 Years 10 years
Age* M F M F M F M F M F Age* Younger Younger Age Older Older
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.66 3.42 3.65 3.42 3.64 3.42 3.63 3.41 3.57 3.38 40 3.05 3.14 3.23 3.32 3.40
45 3.93 3.63 3.92 3.63 3.90 3.63 3.87 3.61 3.80 3.57 45 3.17 3.28 3.39 3.50 3.61
50 4.27 3.90 4.26 3.90 4.22 3.89 4.17 3.86 4.08 3.80 50 3.32 3.46 3.60 3.75 3.88
55 4.70 4.25 4.68 4.25 4.62 4.22 4.53 4.18 4.42 4.10 55 3.51 3.69 3.88 4.06 4.23
60 5.28 4.72 5.25 4.70 5.14 4.66 4.96 4.57 4.86 4.48 60 3.76 3.99 4.24 4.49 4.72
65 6.10 5.35 6.03 5.32 5.81 5.22 5.46 5.05 5.43 4.97 65 4.07 4.38 4.72 5.07 5.39
70 7.23 6.25 7.07 6.18 6.36 5.96 5.96 5.60 6.16 5.61 70 4.50 4.93 5.40 5.89 6.34
75 8.82 7.56 8.44 7.39 7.49 6.89 6.38 6.14 7.11 6.48 75 5.08 5.68 6.37 7.07 7.68
80 11.06 9.53 10.17 9.07 8.33 7.89 6.66 6.55 8.32 7.64 80 5.90 6.78 7.77 8.76 9.57
85 14.16 12.48 12.12 11.19 8.97 8.74 6.81 6.77 9.85 9.18 85 7.07 8.36 9.78 11.11 12.13
* Adjusted age of annuitant. M=Male F=Female
The table above is based on the "1983 Individual Annuitant Mortality Table A." assuming a 3% annual effective interest rate.
Settlement rates for any age, or any combination of age and sex not shown above, will be calculated on the same basis as those
rates shown in the table above. Such rates will be furnished by us upon request. Amounts shown in the table below are based on
assuming a 3% annual effective rate.
</TABLE>
<PAGE>
PAGE 25
<TABLE>
<CAPTION>
PLAN E Dollar Amount of Each Monthly Annuity Payment Per
$1,000 Applied
Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment
<C> <C> <C> <C> <C> <C>
10 $9.61 17 $6.23 24 $4.84
11 8.86 18 5.96 25 4.71
12 8.24 19 5.73 26 4.59
13 7.71 20 5.51 27 4.47
14 7.26 21 5.32 28 4.37
15 6.87 22 5.15 29 4.27
16 6.53 23 4.99 30 4.18
</TABLE>
<PAGE>
PAGE 26
DEFERRED ANNUITY CONTRACT
- - Flexible purchase payments.
- - Optional fixed dollar or variable accumulation values.
- - Fixed dollar annuity payments to begin on the annuity start date.
- - This contract is nonparticipating.
American Partners Life Insurance Company
Administrative Office
80 South Eighth Street
P.O. Box 534
Minneapolis, Minnesota 55440
<PAGE>
PAGE 1
American
Partners
Life Insurance Company
Administrative Office:
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440
DEFERRED ANNUITY CONTRACT
- - Flexible purchase payments.
- - Optional fixed dollar or variable accumulation values.
- - Fixed dollar annuity payments to begin on the annuity start date.
- - This contract is nonparticipating.
Annuitant: John Doe Contract Date: April 1, 1995
Contract Number: 9310-1234567 Retirement Date: April 1, 2015
This is a deferred annuity contract. It is a legal contract
between you, as the owner, and us, American Partners Life Insurance
Company, a Stock Company, Phoenix, Arizona. PLEASE READ YOUR
CONTRACT CAREFULLY.
If the annuitant is living on the Annuity Start Date, upon your
request, we will begin to pay you monthly annuity payments. Any
payments made by us are subject to the terms of this contract.
We issue this contract in consideration of your application and the
initial purchase payment.
Signed for and issued by American Partners Life Insurance Company
at our administrative office in Minneapolis, Minnesota, as of the
contract date shown above.
ACCUMULATION VALUES, WHEN BASED ON THE INVESTMENT RESULTS OF THE
VARIABLE SUBACCOUNTS, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED
DOLLAR AMOUNT. SEE PAGE 10 FOR VARIABLE PROVISIONS.
NOTICE OF YOUR RIGHT TO EXAMINE THIS CONTRACT FOR 10 DAYS
If for any reason you are not satisfied with this contract, return
it to us or our representative within 10 days after you receive it.
We will then cancel this contract. Upon such cancellation we will
refund the greater of: (1) your purchase payment without investment
earnings, or (2) your contract value plus any premium tax charges
paid. This contract will then be considered void from its start.
President
Secretary
Form 32034-IRA (4/95)
<PAGE>
PAGE 2
GUIDE TO CONTRACT PROVISIONS
Definitions Important words and meanings/Page 3
General Provisions Entire contract; Incontestability;
Benefits based upon incorrect data;
State Laws; Federal Laws; Reports to
owner; Evidence of survival;
Protection of proceeds; Payments by
us; Voting rights;
Nonparticipating/Page 4
Ownership and Beneficiary Owner rights; Change of
ownership: Beneficiary; Change of
Beneficiary; Assignment/Page 5
Payments to Beneficiary Describes options and amounts
payable
upon death/Page 6
Purchase Payments Purchase payments amounts and
intervals; Payment limits;
Allocation
of purchase payments/Page 7
Contract Value Describes the fixed and variable
account contract values; Transfers
of contract value; Contract
administrative charge; Premium
taxes/Page 9
Fixed and Variable Account Describes the variable account and
subaccounts, accumulation units and
values; Net investment factor;
Mortality and expense risk
charge; Annuity unit value/Page 10
Surrender Provisions Surrender of the contract for its
surrender value; Rules for
surrender/Page 12
Annuity Provisions When annuity payments begin;
Different ways to receive annuity
payments; Determination of payment
amounts/Page 13
Table of Settlement Rates Tables showing the guaranteed fixed
annuity payments for the various
payment plans/Page 15
<PAGE>
PAGE 3
CONTRACT DATA
Annuitant: John Doe Contract Date: April 1, 1995
Contract Number: 0000-1234567 Annuity Start Date: April 1, 2015
Contract Owner: John Doe
DEFERRED ANNUITY CONTRACT
Upon issuance of this contract your purchase payments have been
scheduled to be paid as shown below. You may change the amount,
and frequency as provided in this contract. Refer to the purchase
payments provision on Page 7.
Amount Submitted With Application: $100
Scheduled Purchase Payment:
Annual Amount: $1,200
FIXED ACCOUNT AND VARIABLE ACCOUNT INVESTMENT OPTIONS
Variable
Subaccounts Mutual Fund
CCR IDS Life Capital Resource Fund
CSI IDS Life Special Income Fund
CMS IDS Life Moneyshare Fund
CMG IDS Life Managed Fund
CIE IDS Life International Equity Fund
CAG IDS Life Aggressive Growth Fund
CAB Montgomery VIP Emerging Markets
CBD Montgomery Growth
CDJ INVESCO Industrial Income
Fixed Account: Guaranteed Fixed Account Interest Rate:
3% per year compounded annually
As of the date this contract was issued, any amounts allocated to
the fixed account will earn interest, for the first year, at the
annual effective rate of 4.65%. If a new rate is declared, it will
apply to amounts paid or allocated to the fixed account after the
new rate is effective.
SURRENDER CHARGE: None
CONTRACT ADMINISTRATIVE CHARGE: $30 per year. Charge is currently
waived if purchase payment less withdrawals are equal to or greater
than $10,000. We reserve the right to apply the charge to all
contracts regardless of purchase payments made. We also reserve
the right to increase the charge to not more than $50 per year.
See page 9.
<PAGE>
PAGE 4
PURCHASE PAYMENT LIMITS:
Maximum Purchase Payments Permitted Subject to SEP/IRA Limits:
Maximum Minimum
1st contract year: $1,000,000 Additional Purchase Payment: $100
Each contract year thereafter: $50,000
<PAGE>
PAGE 5
DEFINITIONS
The following words are used often in this contract. When we use
these words, this is what we mean:
annuitant
The person or persons on whose life monthly annuity payments
depend.
you, your
The owner of this contract.
we, our, us
American Partners Life Insurance Company
accumulation unit
An accumulation unit is an accounting unit of measure. It is used
to calculate the contract value prior to the Annuity Start Date.
contract date
It is the date from which contract anniversaries, contract years,
and contract months are determined. Your contract date is shown
under Contract Data.
contract anniversary
The same day and month as the contract date each year that the
contract remains in force.
annuity start date
The date shown under Contract Data on which annuity payments are to
begin. This date may be changed as provided in this contract. You
will be notified prior to the annuity start date in order to select
an appropriate annuity payment plan.
settlement
The application of the contract value of this contract under an
Annuity Payments Plan to provide annuity payments.
valuation date
A valuation date is each day the New York Stock Exchange is open
for trading.
valuation period
A valuation period is the interval of time commencing at the close
of business on each valuation date and ending at the close of
business on the next valuation date.
<PAGE>
PAGE 6
fixed account
The fixed account is made up of all our assets other than those in
any separate account.
written request
A request in writing signed by you and delivered to us at our
administrative office.
subaccounts
The portfolios of the Variable Account. The subaccounts available
on the contract date are named under Contract Data.
contract value
The sum of the Fixed Account Contract Value (which receives a
declared interest rate) and the Variable Account Contract Value
(which varies with the investment performance of the elected
subaccounts) for this contract.
<PAGE>
PAGE 7
GENERAL PROVISIONS
General information about the contract.
Entire Contract
This contract form and the application, a copy of which is
attached, are the entire contract between you and us.
No one except one of our corporate officers (President, Vice
President, Secretary or Assistant Secretary) can change or waive
any of our rights or requirements under this contract. That person
must do so in writing. None of our representatives or other
persons has the authority to change or waive any of our rights or
requirements under this contract.
This contract is intended to qualify as an Individual Retirement
Annuity (IRA). We agree to and reserve the right to modify this
contract to the extent necessary to qualify this contract as an
Individual Retirement Annuity as described in Sections 408(b) and
219 of the Internal Revenue Code of 1986, as amended and all
related sections and regulations (the Code) which are in effect
during the term of the contract.
SEP/IRA Contract
This contract may be used as a Simplified Employee Pension in or
under a retirement plan or program described in Code sections
408(k) and 219. An SEP/IRA is an IRA with special features and
requirements.
Incontestable
This contract is incontestable from its date of issue.
Benefits Based on Incorrect Data
If the amount of benefits for an IRA contract is determined by data
as to a person's age or sex that is incorrect, benefits will be
recalculated on the basis of the correct data. If the amount of
benefits for an SEP/IRA contract is determined by data as to a
person's age that is incorrect, benefits will be recalculated on
the basis of the correct data. Any underpayments made by us will
be made up immediately. Any overpayments made by us will be
subtracted from the future payments.
State Laws
This contract is governed by the law of the state in which it is
delivered. The values and benefits of this contract are at least
equal to those required by such state.
Federal Laws
This contract is intended to qualify as an annuity contract for
federal income tax purposes. To that end, the provisions of this
contract are to be interpreted to ensure or maintain such tax
<PAGE>
PAGE 8
qualification, despite any other provisions to the contrary. We
reserve the right to amend this contract to reflect any
clarification that may be needed or is appropriate to maintain such
qualification or to conform the contract to any applicable changes
in the tax qualification requirements. We will send you a copy of
any such amendments.
Reports to Owner
At least once a year we will send you a statement showing the
contract value and the cash surrender value of this contract. This
statement will be based on any laws or regulations that apply to
contracts of this type.
Evidence of Survival
Where any payments under this contract depend on the recipient or
annuitant being alive on a given date, proof that such condition
has been met may be required by us. Such proof may be required
prior to making payments.
Protection of Proceeds
Payments under this contract are not assignable by any beneficiary
prior to the time they are due. To the extent allowed by law,
payments are not subject to the claims of creditors or to legal
process.
Payments By Us
All sums payable by us are payable at our administrative office.
Any surrender payment based on the variable account contract value
shall be payable only from the variable subaccounts.
Voting Rights
As long as federal law requires, we will give certain voting rights
to contract owners. As contract owner, if you have voting rights
we will send a notice to you telling you the time and place of a
shareholder meeting. The notice will also explain matters to be
voted upon and how many votes you get.
Nonparticipating
This contract does not participate in the profits or surplus of the
company.
<PAGE>
PAGE 9
OWNERSHIP AND BENEFICIARY
This section describes information about the contract owner and
beneficiary.
Owner's Rights
As long as the annuitant is living and unless otherwise provided in
this contract, you may exercise all rights and privileges provided
in this contract or allowed by us.
These include the right to:
o Name or change the beneficiary.
o Withdraw money from the contract.
o Select an annuity payment plan and specify the annuity start
date;
o Receive the income payments if an annuity payment plan is
started.
o Name or change the person who is to receive payments if an
annuity payment plan is chosen.
o Cancel the contract and receive its value.
These rights are more fully described below and on the following
pages.
Change of Ownership (Restricted)
Your right to change the ownership of this contract is restricted.
This contract may not be sold, assigned, transferred, discounted or
pledged as collateral for a loan or as security for the performance
of an obligation or for any other purpose to any person other than
as may be required or permitted under Section 408 of the Internal
Revenue Code of 1986, as amended. Your interest in this contract
may be transferred to your former spouse, if any, under a divorce
decree or a written instrument incident to such divorce.
Beneficiary
Beneficiaries are those you name, in a form satisfactory to us, to
receive benefits of this contract if you or the annuitant die while
this contract is in force.
Only those beneficiaries who are living when death benefits become
payable may share in the benefits, if any. If no beneficiary is
then living, we will pay the benefits to you, if living, otherwise
to your estate.
<PAGE>
PAGE 10
Change of Beneficiary
You may change the beneficiary anytime while the annuitant is
living by satisfactory written request to us. Once the change is
recorded by us, it will take effect as of the date of your request,
subject to any action taken or payment made by us before the
recording.
<PAGE>
PAGE 11
PAYMENTS TO BENEFICIARY
This section of the contract describes what happens and what is
payable after the death of the annuitant.
Death Benefit Before the Annuity Start Date
If the annuitant dies before the annuity start date while this
contract is in force we will pay to the beneficiary the greater of:
1. the contract value; or
2. the purchase payments paid less any amounts surrendered.
The above amount will be payable in a lump sum upon the receipt of
due proof of death of the annuitant. The beneficiary may elect to
receive payment anytime within 5 years after the date of death.
In lieu of a lump sum, payment may be made under an Annuity Payment
Plan, provided:
1. the beneficiary elects the plan within 60 days after we
receive due proof of death; and
2. payments begin no later than one year after the date of
death; and
3. the plan provides payments over a period which does not
exceed the life of the beneficiary, or the life expectancy
of the beneficiary.
In this event, the reference to "annuitant" in the Annuity
Provisions shall apply to the beneficiary.
Any amounts payable or applied by us as described in this section
will be based on the contract value as of the valuation date on or
next following the date on which due proof of death is received at
our administrative office.
Spouse Option to Continue Contract Upon Annuitant's Death
If the annuitant's death occurs prior to the annuity start date,
the annuitant's spouse, if designated as sole beneficiary, may
elect in writing to forego receipt of the death benefit and instead
continue this contract in force as owner and annuitant. The
election by the spouse must be made within 60 days after we receive
due proof of death.
In this event, the annuity start date may not be later than the
April 1 following the calendar year in which the spouse attains age
70 1/2, or such other date which allows the spouse to satisfy the
minimum distribution requirements under the Internal Revenue Code
of 1986, as amended, its regulations and/or promulgations by the
Internal Revenue Service.
<PAGE>
PAGE 12
Death Benefit After the Annuity Start Date
If the annuitant dies after the annuity start date, the amount
payable, if any, will be as provided in the Annuity Payment Plan
then in effect.
<PAGE>
PAGE 13
PURCHASE PAYMENTS
This section describes the rules about how you can make payments
into the contract.
Purchase Payments
Purchase payments are the payments you make for this contract and
the benefits it provides. Purchase payments must be paid or mailed
to us at our administrative office or to an authorized agent. If
requested, we'll give you a receipt for your purchase payments.
Upon payment to us, purchase payments become our property.
Net purchase payments are that part of your purchase payments
applied to the contract value. A net purchase payment is equal to
the purchase payment less any applicable premium tax charge.
Amount and Intervals
Purchase payments may be paid in a single sum or in installments
until the earlier of: (1) the date this contract terminates by
surrender or otherwise; or (2) the date on which annuity payments
begin.
Subject to the Payment Limits Provision you may: (1) stop and/or
restart purchase payments; or (2) increase or decrease the amount
of your purchase payments; or (3) change the interval of your
purchase payments.
With the exception of employer purchase payments made in connection
with a Simplified Employee Pension Plan, no annual purchase
payments may be made with respect to the taxable year in which the
annuitant attains age 70 1/2 or any later year.
Payment Limits Provision
Maximum Purchase Payments - The maximum purchase payments in the
first or later contract years may not exceed the amounts shown
under Contract Data. We reserve the right to increase the
maximums. We will not decrease the maximums.
Minimum Purchase Payments - Upon issue of this contract, a purchase
payment intended as a Single Purchase Payment must be at least
$1,000. If you intend to make installment purchase payments such
payments, on an annualized basis, must be at least equal to $1,200.
(For example: 12 monthly payments of $100 each; or four quarterly
payments of $300 each). The minimum additional purchase payment is
$100.
In addition, except as otherwise provided in this paragraph, the
total purchase payments for any taxable year may not exceed $2,000.
In the case of a rollover contribution described in Sections 402(a)
(5), 402(a)(7), 403(a)(4), 403(b)(8) or, 408(d)(3), of the Internal
Revenue Code of 1986, as amended, there is no limit on the amount
of your purchase payment. If this contract is maintained in
connection with a Simplified Employee Pension Plan, employer
<PAGE>
PAGE 14
purchase payments for any taxable year may not exceed 15% of your
compensation or $30,000, whichever is less. All purchase payments
must be made in cash. If you die before your entire interest in
this contract has been distributed to you, and your beneficiary is
other than your surviving spouse, no additional purchase payments
will be accepted from your beneficiary under this contract.
We also reserve the right to cancel this contract if both of the
following conditions exist at the same time: (1) no purchase
payments have been paid for a continuous period of 24 months; and
(2) less than $1,000 in purchase payments have been paid under this
contract. In this event we will give you 30 days written notice of
our intent to cancel this contract. Upon such cancellation we will
pay you the contract value in one sum. This contract will then
terminate.
Allocation of Purchase Payments
You may allocate your purchase payments to the fixed account and
among one or more of the variable subaccounts. Your choice for
each account may be made in any whole percent from 0% to 100% as
long as the total adds up to 100%.
The entire portion of any net purchase payment that you allocate to
the Variable Subaccounts will be invested in the Moneyshare
subaccount until the estimated end of the "Right to Examine the
Contract" period. The contract value in the Moneyshare subaccount
will then be transferred to the subaccounts you elected on the
application.
The entire portion of any net purchase payment that you allocate to
the Fixed Account will be invested in the Fixed Account when
received.
Additional net purchase payments received after the "Right to
Examine the Contract" period will be allocated to the Fixed Account
and the Variable Subaccounts as you elected on the application
unless you elect a different allocation. By written request, or by
another method agreed to by us, you may change your purchase
payment allocations.
The first net purchase payment will be allocated as of the end of
the valuation period during which we make an affirmative decision
to issue this contract. Net purchase payments after the first will
be allocated as of the end of the valuation period during which we
receive the payment at our administrative office.
<PAGE>
PAGE 15
CONTRACT VALUE
This section explains the main parts of the contract that determine
its value and charges that may apply.
Contract Value
The contract value at any time is the sum of: (1) the Fixed Account
Contract Value; and 2) the Variable Account Contract Value.
If: (1) part or all of the contract value is surrendered; or (2)
charges described herein are made against the contract value; then
a number of accumulation units from the variable subaccounts and an
amount from the fixed account will be deducted to equal such
amount. For surrenders, deductions will be made from the fixed or
variable subaccounts that you specify. Otherwise, the number of
units from the variable subaccounts and the amount from the fixed
account will be deducted in the same proportion that your interest
in each bears to the total contract value.
Fixed Account Contract Value
The fixed account contract value at any time will be: (1) the sum
of all amounts credited to the fixed account under this contract;
less (2) any amounts deducted for charges or surrenders.
We will credit interest to the fixed account contract value.
Interest will begin to accrue on the date the purchase payments
which are received in our administrative office become available to
us for use. Such interest will be credited at rates that we
determine from time to time. However, we guarantee that the rate
will not be less than the Guaranteed Interest Rate shown under
Contract Data.
Variable Account Contract Value
The variable account contract value at any time will be: (1) the
sum of the value of all variable subaccount accumulation units
under this contract resulting from purchase payments so allocated,
or transfers among the variable and fixed accounts; less (2) any
units deducted for charges or surrenders.
Transfers of Contract Values
While this contract is in force prior to the annuity start date,
transfer of contract values may be made at any time as outlined in
next column:
o between the variable subaccounts; or
o from the variable subaccount(s) to the fixed account; or
o from the fixed account to the variable subaccount(s).
<PAGE>
PAGE 16
o The minimum transfer amount is $100, or if less, the entire
value in the account from which the transfer is being made.
Smaller minimums may apply to automated transfer procedures.
You may make a transfer by written request. Transfer requests may
also be made according to telephone procedures or automated
transfer procedures that are then currently in effect, if any.
If you make 12 transfer requests in a contract year we charge $25
for each additional request. This transfer privilege may be
suspended or modified by us at any time.
Contract Administrative Charge
We charge a fee for establishing and maintaining our records for
this contract. The charge is $30 per year and is deducted from the
contract value at the end of each contract year prior to the
annuity start date. We currently waive this annual charge if your
total purchase payments, less any withdrawals, equal at least
$10,000. The charge does not apply after the annuity start date.
Although we do not now intend to charge more than $30 per year, we
reserve the right to increase this annual charge to up to $50 if
warranted by the expenses we incur. We also reserve the right to
assess this charge, prior to the annuity start date against all
contracts regardless of the amount of purchase payments you have
made.
Premium Tax Charges
If a premium tax is imposed by any taxing authority, we reserve the
right to deduct the amount of the tax from your purchase payments
when they are received or from the contract value either at the
time of surrender or when you elect an annuity payment plan.
<PAGE>
PAGE 17
FIXED AND VARIABLE ACCOUNT
This section provides detailed information about the variable
account, accumulation units of the variable subaccounts and how
they are valued.
The Fixed Account
The fixed account is our general account. It is made up of all of
our assets other than: (1) those in the variable accounts; and (2)
those in any other segregated asset account.
The Variable Account
The variable account is a separate investment account of ours. It
consists of several subaccounts which are named under Contract
Data. We have allocated a part of our assets for this and other
similar contracts to the variable subaccounts. Such assets remain
our property. However, they may not be charged with the
liabilities from any other business in which we may take part.
Investments of the Variable Account
Purchase payments applied to the variable subaccount will be
allocated as specified by the owner. Each variable subaccount will
buy, at net asset value, shares of the fund shown for that account
under Contract Data or as later added or changed.
We may change the mutual funds from which the variable subaccounts
buy shares if laws or regulations change, the existing funds become
unavailable or in our judgment, the funds are no longer suitable
for the subaccounts. If any of these situations occur, we would
have the right to substitute funds other that those shown under
Contract Data. We may also add additional subaccounts investing in
other funds.
When required, we would first seek approval of the Securities and
Exchange Commission and, where required, the insurance regulator of
the state where this contract is delivered.
Valuation of Assets
Mutual fund shares in the variable subaccounts will be valued at
their net asset value.
Variable Account Accumulation Units
The company will credit net purchase payments and amounts of
variable subaccount transfers in the form of accumulation units.
The number of units to be credited to each subaccount will be
determined by dividing the net amount allocated to that subaccount
by the unit value of the subaccount. In the case of the initial
net purchase payment, units will be credited on the date we make an
affirmative decision to issue this contract. For additional
payments, units will be credited as of the valuation period during
which the purchase payment is received.
<PAGE>
PAGE 18
The amount of any Contract Administrative Charge, or other
applicable charges deducted from the Variable Account Contract
Value will reduce the number of units credited to the contract in
the subaccounts. A transfer out of a subaccount will reduce the
number of units credited to the contract in that subaccount while a
transfer into a subaccount will increase the number of units.
Variable Account Accumulation Unit Value
The value of an accumulation unit for each of the variable
subaccounts was arbitrarily set at $1 when the first mutual fund
shares were bought. The value for any later valuation period is
found as follows:
The accumulation unit value for each variable subaccount for
the last prior valuation period is multiplied by the net
investment factor for the same account for the next
following valuation period. The result is the accumulation
unit value. The value of an accumulation unit may increase
or decrease from one valuation period to the next.
Net Investment Factor
The net investment factor is an index applied to measure the
investment performance of a variable subaccount from one valuation
period to the next. The net investment factor may be greater or
less than one; therefore, the value of an accumulation unit may
increase or decrease.
The net investment factor for any such account for any valuation
period is determined by: dividing (1) by (2) and subtracting (3)
from the result. This is done where:
(1) is the sum of
a. the net asset value per share of the mutual fund held
in the variable subaccount determined at the end of
the current valuation period; plus
b. the per share amount of any dividend or capital gain
distributions made by the mutual fund held in the
variable subaccount, if the "ex-dividend" date occurs
during the current valuation period.
(2) is the net asset value per share of the mutual fund held in
the variable subaccount, determined at the end of the last
prior valuation period.
(3) is a factor representing the mortality and expense risk
charge.
<PAGE>
PAGE 19
Mortality and Expense Risk Charge
In calculating accumulation unit values we will deduct a mortality
and expense risk charge from the variable subaccounts equal, on an
annual basis, to 1.00% of the daily net asset value. This
deduction is made to compensate us for assuming the mortality and
expense risks under contracts of this type. We estimate that
approximately 2/3 of this charge is for assumption of mortality
risk and 1/3 is for assumption of expense risk. The deduction will
be: (1) made from each variable account; and (2) computed on a
daily basis.
<PAGE>
PAGE 20
SURRENDER PROVISIONS
This section describes how you may obtain some or all of the value
of your contract other than through an Annuity Payment Plan.
Surrender
By written request and subject to the rules below you may:
1. surrender this contract for the total surrender value; or
2. partially surrender this contract for a part of the
surrender value.
Surrender Value
The surrender value at any time will be:
1. the contract value;
2. minus any applicable premium tax.
Rules For Surrender
All surrenders will have the following conditions:
1. You must apply by written request or other method agreed to
by us: (a) while this contract is in force; and (b) prior to
the earlier of the annuity start date or the death of the
annuitant.
2. Unless we agree otherwise, you must surrender an amount
equal to at least $100 or the contract value, if less.
3. The amount surrendered, will normally be paid to you within
seven days of the receipt of your written request and this
contract, if required. In accordance with state law for
surrenders from the fixed account, we have the right to
defer payment to you for up to 6 months from the date we
receive your request.
4. For partial surrenders, if you do not specify from which
accounts the surrender is to be made, the surrender will be
made from the variable subaccounts and fixed account in the
same proportion as your interest in each bears to the
contract value.
5. Any amounts surrendered can not be reversed. Amounts paid
after a partial surrender are considered new purchase
payments.
Upon surrender for the full surrender value this contract will
terminate. We may require that you return the contract to us
before we pay the full surrender value.
<PAGE>
PAGE 21
Suspension or Delay in Payment of Surrender
We have the right to suspend or delay the date of any surrender
payment from the variable subaccounts for any period:
1. When the New York Stock Exchange is closed; or
2. When trading on the New York Stock Exchange is restricted;
or
3. When an emergency exists as a result of which: (a) disposal
of securities held in the variable subaccounts is not
reasonably practicable; or (b) it is not reasonably
practicable to fairly determine the value of the net assets
of the variable subaccount; or
4. During any other period when the Securities and Exchange
Commission, by order, so permits for the protection of
security holders.
Rules and regulations of the Securities and Exchange Commission
will govern as to whether the conditions set forth in 2 and 3
exist.
<PAGE>
PAGE 22
ANNUITY PROVISIONS
This section describes using the contract value as a source of
guaranteed income and different ways to structure that income.
Settlement
When settlement occurs, the contract value less any applicable
premium taxes will be applied to make annuity payments under an
Annuity Payment Plan. The first payment will be made as of the
annuity start date. This date is shown under Contract Data unless
you have changed it. Before payments begin we will require
satisfactory proof that the annuitant is alive. We may also
require that you exchange this contract for a supplemental contract
which provides the annuity payments.
Change of Annuity Start Date
You may change the annuity start date shown for this contract.
Tell us the new date by written request. Any change must be
received by us at least 30 days prior to the date being changed.
However the annuity start date may not be later than the later of:
o April 1 following the calendar year in which the annuitant
attains age 70 1/2; or
o such other date which satisfies the minimum distribution
requirements under the Internal Revenue Code of 1986, as
amended its regulations and/or promulgations by the Internal
Revenue Service; or
o such other date as agreed upon by us.
Not withstanding the above, the maximum annuity Start Date is the
later of:
o the annuitant's 85th birthday; or
o the tenth contract anniversary.
The new annuity start date you select must be at least 30 days
after we receive your written request.
Annuity Payment Plans
Subject to the terms of this contract annuity payments will be made
on a fixed dollar basis. You can schedule receipt of annuity
payments according to one of the Plans A through E below or another
plan agreed to by us provided:
1. the Plan selected provides for payments over the life of the
annuitant or over the life of the annuitant and a joint
annuitant; or
2. the Plan selected provides for payments over a period which
does not exceed the life expectancy of the annuitant, or the
life expectancy of the annuitant and joint annuitant; and
<PAGE>
PAGE 23
3. the Plan selected meets the minimum death incidental benefit
requirements under the Internal Revenue Code of 1986, as
amended.
Plan A - This provides monthly annuity payments during the
lifetime of the annuitant. No payments will be made after
the annuitant dies.
Plan B - This provides monthly annuity payments during the
lifetime of the annuitant with a guarantee by us that
payments will be made for a period of at least five, ten or
fifteen years. You must select the guaranteed period.
Plan C - This provides monthly annuity payments during the
lifetime of the annuitant with a guarantee by us that
payments will be made for a certain number of months. We
determine the number of months by dividing the amount
applied under this Plan by the amount of the first monthly
annuity payment.
Plan D - Monthly payments will be paid during the lifetime
of the annuitant and a joint annuitant. When either the
annuitant or the joint annuitant dies we will continue to
make monthly payments during the lifetime of the survivor.
No payments will be paid after the death of both the
annuitant and joint annuitant.
Plan E - (Installments for a specified period) This provides
monthly fixed dollar annuity payments for a period of years.
The period of years may be no less than 10 nor more than 30.
By written request to us at least 30 days before the Annuity Start
Date, you may select the Plan. If at least 30 days before the
Annuity Start Date we have not received your written request to
select a Plan, we will make payments according to Plan B with
payments guaranteed for ten years.
If the amount to be applied to a Plan would not provide a monthly
payment of at least $20, we have the right to make a lump sum
payment of the contract value.
Fixed Annuity
A fixed annuity is an annuity with payments that are guaranteed by
us as to dollar amount. Fixed annuity payments after the first
will never be less than the amount of the first payment. At
settlement, the contract value will be applied to the applicable
Annuity Table. This will be done in accordance with the Payment
Plan chosen. The amount payable for each $1,000 so applied is
shown in Table of Settlement Rates on page 15.
<PAGE>
PAGE 24
TABLE OF SETTLEMENT RATES
Rates used for various Annuity Payment Plans.
The amount of the first and all subsequent monthly fixed dollar
annuity payments for each $1,000 of value applied under any Payment
Plan will be based on our fixed dollar Table of Settlement Rates in
effect on the annuity start date. Such rates are guaranteed to be
not less than those shown in Table I below for IRA contracts or
Table II for SEP/IRA contracts. For IRA contracts, the amount of
such annuity payments under Plans A, B, and C will depend upon the
sex and the adjusted age of the annuitant on the annuity start
date. The amount of such annuity payments under Plan D will depend
upon the sex and the adjusted age of the annuitant and joint
annuitant on the annuity start date. For SEP/IRA contracts, the
amount of such annuity payments under plans A, B and C will depend
upon the adjusted age of the annuitant on the annuity start date.
The amount of such annuity payments under Plan D will depend upon
the adjusted age of the annuitant and joint annuitant on the
annuity start date. Adjusted age shall be equal to the age nearest
birthday minus an "adjustment" depending on the calendar year of
birth of the annuitant and the joint annuitant as follows:
Calendar Calendar
Year of Year of
Annuitant's Annuitant's
Birth Adjustment Birth Adjustment
Prior to 1920 0 1945 through 1949 6
1920 through 1924 1 1950 through 1959 7
1925 through 1929 2 1960 through 1969 8
1930 through 1934 3 1970 through 1979 9
1935 through 1939 4 1980 through 1989 10
1940 through 1944 5 After 1989 11
<PAGE>
PAGE 25
<TABLE>
<CAPTION>
TABLE I IRA Contracts only
Dollar Amount of Each Monthly Annuity Payment Per $1,000 Applied
PLAN A PLAN B PLAN C PLAN D - Joint and Survivor
Life 5 Years 10 Years 15 Years With Adj. Adjusted Age of Female Joint Annuitant
Adj. Income Certain Certain Certain Refund Male 10 Years 5 Years Same 5 Years 10 years
Age* M F M F M F M F M F Age* Younger Younger Age Older Older
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.66 3.42 3.65 3.42 3.64 3.42 3.63 3.41 3.57 3.38 40 3.05 3.14 3.23 3.32 3.40
45 3.93 3.63 3.92 3.63 3.90 3.63 3.87 3.61 3.80 3.57 45 3.17 3.28 3.39 3.50 3.61
50 4.27 3.90 4.26 3.90 4.22 3.89 4.17 3.86 4.08 3.80 50 3.32 3.46 3.60 3.75 3.88
55 4.70 4.25 4.68 4.25 4.62 4.22 4.53 4.18 4.42 4.10 55 3.51 3.69 3.88 4.06 4.23
60 5.28 4.72 5.25 4.70 5.14 4.66 4.96 4.57 4.86 4.48 60 3.76 3.99 4.24 4.49 4.72
65 6.10 5.35 6.03 5.32 5.81 5.22 5.46 5.05 5.43 4.97 65 4.07 4.38 4.72 5.07 5.39
70 7.23 6.25 7.07 6.18 6.61 5.96 5.96 5.60 6.16 5.61 70 4.50 4.93 5.40 5.89 6.34
75 8.82 7.56 8.44 7.39 7.49 6.89 6.38 6.14 7.11 6.48 75 5.08 5.68 6.37 7.07 7.68
80 11.06 9.53 10.17 9.07 8.33 7.89 6.66 6.55 8.32 7.64 80 5.90 6.78 7.77 8.76 9.57
85 14.16 12.48 12.12 11.19 8.97 8.74 6.81 6.77 9.85 9.18 85 7.07 8.36 9.78 11.11 12.13
* Adjusted age of annuitant. M=Male F=Female
Table I above is based on the "1983 Individual Annuitant Mortality Table A." assuming a 3% annual effective interest rate.
Settlement rates for any age, or any combination of age and sex not shown above, will be calculated on the same basis as those
rates shown in the table above. Such rates will be furnished by us upon request. Amounts shown in the table below are based on
assuming a 3% annual effective interest rate.
</TABLE>
<PAGE>
PAGE 26
<TABLE>
<CAPTION>
PLAN E Dollar Amount of Each Monthly Annuity Payment Per $1,000 Applied
Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment
<C> <C> <C> <C> <C> <C>
10 $9.61 17 $6.23 24 $4.84
11 8.86 18 5.96 25 4.71
12 8.24 19 5.73 26 4.59
13 7.71 20 5.51 27 4.47
14 7.26 21 5.32 28 4.37
15 6.87 22 5.15 29 4.27
16 6.53 23 4.99 30 4.18
</TABLE>
<PAGE>
PAGE 27
<TABLE>
<CAPTION>
TABLE II SEP/IRA contracts only
Dollar Amount of Each Monthly Annuity Payment Per $1,000 Applied
PLAN A PLAN B PLAN C PLAN D - Joint and Survivor
Life 5 Years 10 Years 15 Years With Adjusted Age of Joint Annuitant
Adj. Income Certain Certain Certain Refund Adj. 10 Years 5 Years Same 5 Years 10 years
Age* Age* Younger Younger Age Older Older
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.42 3.42 3.42 3.41 3.38 40 3.03 3.10 3.17 3.24 3.29
45 3.63 3.63 3.63 3.61 3.57 45 3.15 3.24 3.33 3.41 3.47
50 3.90 3.90 3.89 3.86 3.80 50 3.29 3.41 3.52 3.62 3.71
55 4.25 4.25 4.22 4.18 4.10 55 3.47 3.62 3.77 3.90 4.01
60 4.72 4.70 4.66 4.57 4.48 60 3.71 3.90 4.10 4.28 4.42
65 5.35 5.32 5.22 5.05 4.97 65 4.01 4.28 4.54 4.79 4.99
70 6.25 6.18 5.96 5.60 5.61 70 4.42 4.79 5.16 5.51 5.79
75 7.56 7.39 6.89 6.14 6.48 75 4.99 5.51 6.06 6.56 6.96
80 9.53 9.07 7.89 6.55 7.64 80 5.79 6.56 7.38 8.11 8.67
85 12.48 11.19 8.74 6.77 9.18 85 6.96 8.11 9.32 10.38 11.14
* Adjusted age of annuitant. M=Male F=Female
Table II above is based on the "1983 Individual Annuitant Mortality Table A" assuming a 3% annual effective interest rate.
Settlement rates for any age, or any combination of age not shown above, will be calculated on the same basis as those rates shown
in the table above. Such rates will be furnished by us upon request. Amounts shown in the table below are based on assuming a 3%
annual effective interest rate.
</TABLE>
<PAGE>
PAGE 28
<TABLE>
<CAPTION>
PLAN E Dollar Amount of Each Monthly Annuity Payment Per $1,000 Applied
Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment
<C> <C> <C> <C> <C> <C>
10 $9.61 17 $6.23 24 $4.84
11 8.86 18 5.96 25 4.71
12 8.24 19 5.73 26 4.59
13 7.71 20 5.51 27 4.47
14 7.26 21 5.32 28 4.37
15 6.87 22 5.15 29 4.27
16 6.53 23 4.99 30 4.18
</TABLE>
<PAGE>
PAGE 29
DEFERRED ANNUITY CONTRACT
- - Flexible purchase payments.
- - Optional fixed dollar or variable accumulation values.
- - Fixed dollar annuity payments to begin on the annuity start date.
- - This contract is nonparticipating.
American Partners Life Insurance Company
Administrative Office
80 South Eighth Street
P.O. Box 534
Minneapolis, Minnesota 55440
<PAGE>
PAGE 1
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
American Partners Life Insurance Company (APL) Variable Annuity
Administrative office Application
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0499
An American Express Company
_______________________________________________________________________________________________________________________________
1. Who is the Proposed Annuitant? Is Annuitant the owner? __ Yes __ No (Always complete this section)
_______________________________________________________________________________________________________________________________
__ Mr. __ Mrs. Annuitant's name (first) (full middle) (last)
__ Miss __ Ms.
_______________________________________________________________________________________________________________________________
Social Security # Birthdate Marital status __ Male Citizenship
__ Female __ U.S. __ Other
_______________________________________________________________________________________________________________________________
Home address (street) (city) (state) (zip)
_______________________________________________________________________________________________________________________________
Telephone (Please provide both day and evening numbers) Day: ( ) Best time to call
Evening: ( ) Best time to call
_______________________________________________________________________________________________________________________________
2. Who will be the Owner? (Complete if owner is other than proposed annuitant)
_______________________________________________________________________________________________________________________________
__ Mr. __ Mrs. Owner's name (first) (full middle) (last)
__ Miss __ Ms.
_______________________________________________________________________________________________________________________________
Taxpayer ID or Social Security # Birthdate Relationship to annuitant
_______________________________________________________________________________________________________________________________
Home address (street) (city) (state) (zip)
_______________________________________________________________________________________________________________________________
3. What type of Annuity are you purchasing, and how will you pay for it? (Always complete this section)
_______________________________________________________________________________________________________________________________
__ Nonqualified __ IRA __ SEP __ Name of Employer_________________ Amount submitted
__ Individual purchase __ Personal ____________________________________________ $___________________
__ 1035 exchange __ Spousal __ Address__________________________________ note: $2,000 minimum nonqualified
__ IRA Rollover ____________________________________________ $1,000 minimum qualified
__ IRA Transfer ____________________________________________ or $1,200 annually for installment
Annual amount intended
$____________________
_______________________________________________________________________________________________________________________________
Premium Payment Frequency Method of Payment (note: Minimum premium is waived if application includes setup of
periodic payment of $100 or more)
__ Biweekly
__ Monthly __ Quarterly __ Bank Authorization __ Check
__ Semiannually __ Annually __ Wire __ 1035 exchange (please submit exchange form)
_______________________________________________________________________________________________________________________________
4. How will you allocation your Investment Allocate in whole percentages. Total must equal 100%
_______________________________________________________________________________________________________________________________
Fixed Account ______% Montgomery VS Emerging Markets _______% (* the entire portion of any net
IDS Life Aggressive Growth Fund ______% Montgomery VS Growth _______% purchase payment that I allocate to
IDS Life Capital Resource Fund ______% INVESCO VIF Industrial Income _______% the Variable Accounts will be
IDS Life International Equity Fund ______% ____________________ _______% in the Moneyshare Fund until the end
IDS Life Managed Fund ______% ____________________ _______% of the Right to Examine the Contract
IDS Life Moneyshare Fund* ______% ____________________ _______% period.)
IDS Life Special Income Fund ______%
_______________________________________________________________________________________________________________________________
5. Who will be the beneficiary(ies) of this contract? (Always complete this section)
_______________________________________________________________________________________________________________________________
__ A. Beneficiary is: Annuitant's spouse, if living, otherwise the beneficiaries are the living lawful children of the
Annuitant, equally.
Annuitant spouse's full name _____________________________________________________________________
__ B. Other designation _____________________________________________________________________
Relationship to Annuitant _____________________________________________________________________
_______________________________________________________________________________________________________________________________
6. Notes
_______________________________________________________________________________________________________________________________
32025C (6/95)
<PAGE>
PAGE 2
7. Replacement: Will this contract replace or change any existing life insurance or annuity?
_______________________________________________________________________________________________________________________________
__ Yes (if yes, please provide company name below) __ No
_______________________________________________________________________________________________________________________________
Company Name Policy Number
_______________________________________________________________________________________________________________________________
8. Please read carefully, check appropriate boxes, and sign below.
_______________________________________________________________________________________________________________________________
SUITABILITY
Investment Objectives: I understand the investment objectives and risks of the contract for which I am applying. There can be
no assurance that such objectives will be achieved.
My specific long-term objectives are:
__ Aggressive Growth __ Growth with Income __ Income __ Growth __ Tax Deferral __ Preservation of Principal
My risk tolerance for investment is: __ Low __ Medium __ High
My Federal income tax bracket is: __ 15% __ 28% __ 31% __ 36% __ 39.6% __ Other
My annual income is: __ Under $15,000 __ $15,000 to $24,999 __ $25,000 to $49,999 __ $50,000 to $99,999 __ $100,000 or more
Specify any securities firm with which you are affiliated:_______________________________________________________.
_______________________________________________________________________________________________________________________________
Privacy of Client Information: You authorize (a) APL and its affiliates, subsidiaries and agents authorized by APL to use
information about you to administer your annuity contract, and (b) APL and its affiliates and subsidiaries and other providers
of products and services through American Express Financial Services Direct authorized by APL to use information APL maintains about
you, including information from the application, for marketing and administrative purposes and to share such information
with each other. If you object to the use of information described in (b), please telephone American Express Financial
Services Direct at 1-800-297-7378.
Except as described above, we will not release information about you to others unless you have asked us to do so or we are
required by law or other regulatory authority.
Deferred Annuity
The basic purpose of an annuity is to provide lifetime income at retirement and it should be purchased for this purpose. You should
be aware of the benefits and consequences of tax deferral, and be confident that it can work to your advantage. The contract value
may be surrendered in full or in part before annuity payments begin, but not after.
We reserve the right to terminate certain installment payment contracts for full value, if in any 24 month period no purchase
payments have been received and the amount paid is less than $1,000.
IRA Applications
By signing below I acknowledge receipt of the IRA Disclosure Guide and understand the terms contained in it. I assume all
responsibility for any tax consequences and penalties that may result from making contributions to, transactions with and
distributions from this IRA.
_______________________________________________________________________________________________________________________________
AGREEMENTS
_______________________________________________________________________________________________________________________________
Cancellation: The contract provides me with certain cancellation privileges for a period of time from receipt (usually 10 days)
under which no fees will be charged by the company.
For Kentucky/Ohio residents only: Any person who knowingly and with intent to defraud any insurance company or other person
files an application for insurance containing any materially false information or conceals for the purpose of misleading,
information concerning any fact material thereto commits a fraudulent insurance act, which is a crime.
I agree that each of the statements and answers given in this application is true and complete to the best of my knowledge and
belief, and will be the basis of any annuity issued from this application. I certify under penalties of perjury that (1) my
social Security Number as listed on this application is correct, and (2) that I am not subject to backup withholding either
because I have not been notified that I am subject to backup withholding as a result of a failure to report all interest and
dividends, or the Internal Revenue Service has notified me that I am no longer subject to backup withholding.
By signing below, I acknowledge receipt of the appropriate prospectuses. The contract value and cash surrender value when
based on a separate account may increase or decrease on any day depending upon the investment results. No minimum cash
surrender value is guaranteed. All values under the variable annuity provisions of the contract are variable and are not
guaranteed as to fixed dollar amounts.
SIGNATURES:
Signed on (date) __________________________ at (city) ______________________, (state) __________________________
X___________________________________________________ X__________________________________________________
Signature of Owner Signature of Annuitant (If different from owner)
This application __ does __ does not involve replacement of existing insurance or annuities.
Licensed Agent/witness X_______________________________________________________________ Date _________________
_______________________________________________________________________________________________________________________________
32025C (6/95)
</TABLE>
<PAGE>
PAGE 1
DRAFT 8/7/1995
PARTICIPATION AGREEMENT
By and Among
AMERICAN PARTNERS LIFE INSURANCE COMPANY
And
______________________________________
And
______________________________________
THIS AGREEMENT, made and entered into this ____ day of _________,
1995 by and among American Partners Life Insurance Company,
organized under the laws of the State of Arizona (the "Company"),
on its own behalf and on behalf of each separate account of the
Company named in Schedule 1 to this Agreement, as may be amended
from time to time (each account referred to as the "Account"),
_____________________, a diversified open-end management investment
company organized under the laws of the State of __________________
(the "Fund") and _______________________________________________, a
_____________________________ (the "Underwriter").
WHEREAS, the Fund engages in business as a diversified open-end
management investment company and was established for the purpose
of serving as the investment vehicle for separate accounts
established for variable life insurance contracts and variable
annuity contracts to be offered by insurance companies which have
entered into participation agreements substantially identical to
this Agreement (the "Participating Insurance Companies"), and
WHEREAS, beneficial interests in the Fund are divided into several
series of shares, each representing the interest in a particular
managed portfolio of securities and other assets (the
"Portfolios"); and
WHEREAS, the Fund has received an order from the Securities &
Exchange Commission (alternatively referred to as the "SEC" or the
"Commission") granting Participating Insurance Companies and
variable annuity separate accounts and variable life insurance
separate accounts relief from the provisions of Sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as
amended, (the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to
be sold to and held by variable annuity separate accounts and
variable life insurance separate accounts of both affiliated and
unaffiliated Participating Insurance Companies and qualified
pension and retirement plans (the "Mixed and Shared Funding
Exemptive Order"). The parties to this Agreement agree that the
conditions or undertakings specified in the Mixed and Shared
Funding Exemptive Order and that may be imposed on the Company, the
Fund and/or the Underwriter by virtue of the receipt of such order
by the SEC will be incorporated herein by reference, and such
parties agree to comply with such conditions and undertakings to
the extent applicable to each such party; and
<PAGE>
PAGE 2
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are registered
under the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Company has registered or will register certain
variable annuity contracts (the "Contracts") under the 1933 Act;
and
WHEREAS, the Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of
Directors of the Company under the insurance laws of the State of
Arizona, to set aside and invest assets attributable to the
Contracts; and
WHEREAS, the Company has registered the Account as a unit
investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker-dealer with the
SEC under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the
Portfolios named in Schedule 2, as may be amended from time to
time, on behalf of the Account to fund the Contracts and the
Underwriter is authorized to sell such shares to unit investment
trusts such as the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Underwriter agrees to sell to the Company those shares
of the Fund which the Company orders on behalf of the
Account, executing such orders on a daily basis at the net
asset value next computed after receipt and acceptance by
the Fund or its agent of the order for the shares of the
Fund. For purposes of this Section 1.1, the Company will be
the designee of the Fund for receipt of such orders from
each Account and receipt by such designee will constitute
receipt by the Fund; provided that the Fund receives notice
of such order by 9:00 a.m. Central Time on the next
following business day. "Business Day" will mean any day on
which the New York Stock Exchange is open for trading and on
which the Fund calculates its net asset value pursuant to
the rules of the SEC.
1.2. The Company will pay for Fund shares on the next Business
Day after it places an order to purchase Fund shares in
accordance with Section 1.1 above. Payment will be in
federal funds transmitted by wire except for amounts less
than $500 which may be paid by check or by another method
acceptable to the parties.
<PAGE>
PAGE 3
1.3. The Fund agrees to make its shares available indefinitely
for purchase at the applicable net asset value per share by
Participating Insurance Companies and their separate
accounts on those days on which the Fund calculates its net
asset value pursuant to rules of the SEC; provided, however,
that the Board of Directors of the Fund (the "Fund Board")
may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of shares of any Portfolio
if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole
discretion of the Fund Board, acting in good faith and in
light of their fiduciary duties under federal and any
applicable state laws, necessary in the best interests of
the shareholders of any Portfolio.
1.4. The Fund and the Underwriter agree that shares of the Fund
will be sold only to Participating Insurance Companies and
their separate accounts, qualified pension and retirement
plans or such other persons as are permitted under
applicable provisions of the Internal Revenue Code of 1986,
as amended, (the "Internal Revenue Code"), and regulations
promulgated thereunder, the sale to which will not impair
the tax treatment currently afforded the Contracts. No
shares of any Portfolio will be sold to the general public.
1.5. The Fund and the Underwriter will not sell Fund shares to
any insurance company or separate account unless an
agreement containing provisions substantially the same as
Articles I, III, V, and VII of this Agreement are in effect
to govern such sales. The Fund will make available upon
written request from the Company: (a) a list of all other
Participating Insurance Companies; and (b) a copy of the
Participation Agreement executed by any other Participating
Insurance Company.
1.6. The Fund agrees to redeem for cash, upon the Company's
request, any full or fractional shares of the Fund held by
the Company, executing such requests on a daily basis at the
net asset value next computed after receipt and acceptance
by the Fund or its agent of the request for redemption. For
purposes of this Section 1.6, the Company will be the
designee of the Fund for receipt of requests for redemption
from each Account and receipt by such designee will
constitute receipt by the Fund; provided the Fund receives
notice of request for redemption by 9:00 a.m. Central Time
on the next following Business Day. Payment will be in
federal funds transmitted by wire to the Company's account
as designated by the Company in writing from time to time,
on the same Business Day the Fund receives notice of the
redemption order from the Company except for amounts less
than $500 which may be paid by check or by another method
acceptable to the parties. The Fund reserves the right to
delay payment of redemption proceeds, but in no event may
such payment be delayed longer than the period permitted
under Section 22(e) of the 1940 Act. Neither the Fund nor
the Underwriter will bear any responsibility whatsoever for
the proper disbursement or crediting of redemption proceeds;
<PAGE>
PAGE 4
the Company alone will be responsible for such action. If
notification of redemption is received after 9:00 a.m.
Central Time, payment for redeemed shares will be made on
the next following Business Day.
1.7. The Company agrees to purchase and redeem the shares of the
Portfolios named in Schedule 2 offered by the then current
prospectus of the Fund in accordance with the provisions of
such prospectus.
1.8. Issuance and transfer of the Fund's shares will be by book
entry only. Stock certificates will not be issued to the
Company or any Account. Purchase and redemption orders for
Fund shares will be recorded in an appropriate title for
each Account or the appropriate subaccount of each Account.
1.9. The Fund will furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of the
declaration of any income, dividends or capital gain
distributions payable on the Fund's shares. The Company
hereby elects to receive all such dividends and
distributions as are payable on the Portfolio shares in the
form of additional shares of that Portfolio. The Company
reserves the right to revoke this election and to receive
all such dividends and distributions in cash. The Fund will
notify the Company of the number of shares so issued as
payment of such dividends and distributions.
1.10. The Fund will make the net asset value per share for each
Portfolio available to the Company on a daily basis as soon
as reasonably practical after the net asset value per share
is calculated and will use its best efforts to make such net
asset value per share available by 5:00 p.m., Central Time,
each business day.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts are
or will be registered under the 1933 Act and that the
Contracts will be issued and sold in compliance with all
applicable federal and state laws. The Company further
represents and warrants that it is an insurance company duly
organized and in good standing under applicable law and that
it has legally and validly established each Account as a
separate account under applicable state law and has
registered the subaccounts of each Account together as a
unit investment trust in accordance with the provisions of
the 1940 Act to serve as segregated investment accounts for
the Contracts, and that it will maintain such registration
for so long as any Contracts are outstanding. The Company
will amend the registration statement under the 1933 Act for
the Contracts and the registration statement under the 1940
Act for the Account from time to time as required in order
to effect the continuous offering of the Contracts or as may
otherwise be required by applicable law. The Company will
register and qualify the Contracts for sale in accordance
with the securities laws of the various states only if and
to the extent deemed necessary by the Company.
<PAGE>
PAGE 5
2.2. The Company represents that it believes that the Contracts
are currently and at the time of issuance will be treated as
annuity contracts under applicable provisions of the
Internal Revenue Code and that it will make every effort to
maintain such treatment and that it will notify the Fund and
the Underwriter immediately upon having a reasonable basis
for believing that the Contracts have ceased to be so
treated or that they might not be so treated in the future.
2.3. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement will be registered under the 1933
Act and duly authorized for issuance in accordance with
applicable law and that the Fund is and will remain
registered under the 1940 Act for as long as the Fund shares
are sold. The Fund will amend the registration statement
for its shares under the 1933 Act and the 1940 Act from time
to time as required in order to effect the continuous
offering of its shares. The Fund will register and qualify
the shares for sale in accordance with the laws of the
various states only if and to the extent deemed advisable by
the Fund or the Underwriter.
2.4. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the
Internal Revenue Code, and that it will make every effort to
maintain such qualification (under Subchapter M or any
successor or similar provision) and that it will notify the
Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might
not so qualify in the future.
2.5. The Fund represents that its investment objectives, policies
and restrictions comply with applicable state investment
laws as they may apply to the Fund. The Fund makes no
representation as to whether any aspect of its operations
(including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws and
regulations of any state. The Company alone will be
responsible for informing the Fund of any insurance
restrictions imposed by state insurance laws which are
applicable to the Fund. To the extent feasible and
consistent with market conditions, the Fund will adjust its
investments to comply with the aforementioned state
insurance laws upon written notice from the Company of such
requirements and proposed adjustments, it being agreed and
understood that in any such case the Fund will be allowed a
reasonable period of time under the circumstances after
receipt of such notice to make any such adjustment. The
Fund and the Underwriter agree that they will furnish the
information required by state insurance laws so that the
Company can obtain the authority needed to issue the
Contracts in the various states.
<PAGE>
PAGE 6
2.6. The Fund currently does not intend to make any payments to
finance distribution expenses pursuant to Rule 12b-1 under
the 1940 Act or otherwise, although it may make such
payments in the future. To the extent that it decides to
finance distribution expenses pursuant to Rule 12b-1, the
Fund undertakes to have its Fund Board, a majority of whom
are not "interested" persons of the Fund, formulate and
approve any plan under Rule 12b-1 to finance distribution
expenses.
2.7. The Underwriter represents and warrants that it is a member
in good standing of the NASD and is registered as a broker-
dealer with the SEC. The Underwriter further represents
that it will sell and distribute the Fund shares in
accordance with all applicable federal and state securities
laws, including without limitation the 1933 Act, the 1934
Act, and the 1940 Act.
2.8. The Fund represents that it is lawfully organized and
validly existing under the laws of ____________ and that it
does and will comply with applicable provisions of the 1940
Act.
2.9. The Underwriter represents and warrants that the Fund's
Adviser, __________________________________, is and will
remain duly registered under all applicable federal and
state securities laws and that the Adviser will perform its
obligations to the Fund in accordance with the laws of
____________________ and any applicable state and federal
securities laws.
2.10. The Fund and Underwriter represent and warrant that all of
their directors, officers, employees, investment advisers,
and other individuals/entities having access to the funds
and/or securities of the Fund are and continue to be at all
times covered by a blanket fidelity bond or similar coverage
for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of
the 1940 Act or related provisions as may be promulgated
from time to time. The aforesaid bond includes coverage for
larceny and embezzlement and is issued by a reputable
bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter will provide the Company, at the Fund's or
Underwriter's expense, with as many copies of the current
Fund prospectus for the Portfolios named in Schedule 2 as
the Company may reasonably request for distribution, at the
Company's expense, to prospective contractowners and
applicants. The Underwriter will provide, at the Fund's or
Underwriter's expense, as many copies of said prospectus as
necessary for distribution, at the Fund's or Underwriter's
expense, to existing contractowners. The Underwriter will
provide the copies of said prospectus to the Company or to
its mailing agent. The Company will distribute the
prospectus to existing contractowners and will bill the Fund
or the Underwriter for the reasonable cost of such
distribution. If requested by the Company in lieu thereof,
<PAGE>
PAGE 7
the Fund will provide such documentation, including a final
copy of a current prospectus set in type at the Fund's
expense, and other assistance as is reasonably necessary in
order for the Company at least annually (or more frequently
if the Fund prospectus is amended more frequently) to have
the new prospectus for the Contracts and the Fund's new
prospectus printed together, in which case the Fund will
bear its share of expenses as described above.
3.2. The Fund's prospectus will state that the statement of
additional information for the Fund is available from the
Company. The Underwriter (or the Fund) will provide the
Company, at Fund's or Underwriter's expense, with as many
copies of the statement of additional information as the
Company may reasonably request for distribution, at the
Company's expense, to prospective contractowners and
applicants. The Underwriter (or the Fund) will provide, at
the Fund's or Underwriter's expense, as many copies of said
statement of additional information as necessary for
distribution, at the Fund's or Underwriter's expense, to any
existing contractowner who requests such statement or
whenever state or federal law otherwise requires that such
statement be provided. The Underwriter (or the Fund) will
provide the copies of said statement of additional
information to the Company or to its mailing agent. The
Company will distribute the statement of additional
information as requested or required and will bill the Fund
or the Underwriter for the reasonable cost of such
distribution.
3.3. The Fund, at its expense, will provide the Company or its
mailing agent with copies of its proxy material, if any,
reports to shareholders and other communications to
shareholders in such quantity as the Company will reasonably
require. The Company will distribute this proxy material,
reports and other communications to existing contractowners
and will bill the Fund or the Underwriter for the reasonable
cost of such distribution.
3.4. If and to the extent required by law the Company will:
(a) solicit voting instructions from contractowners;
(b) vote the Fund shares held in the Account in
accordance with instructions received from
contractowners; and
(c) vote Fund shares held in the Account for which
no timely instructions have been received, in
the same proportion as Fund shares of such
Portfolio for which instructions have been
received from the Company's contractowners;
so long as and to the extent that the SEC continues to
interpret the 1940 Act to require pass-through voting
privileges for variable contractowners. The Company
reserves the right to vote Fund shares held in any
segregated asset account in its own right, to the extent
<PAGE>
PAGE 8
permitted by law. Participating Insurance Companies will be
responsible for assuring that each of their separate
accounts participating in the Fund calculates voting
privileges in a manner consistent with all legal
requirements.
3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular, the
Fund either will provide for annual meetings or comply with
Section 16(c) of the 1940 Act (although the Fund is not one
of the trusts described in Section 16(c) of that Act) as
well as with Sections 16(a) and, if and when applicable,
16(b). Further, the Fund will act in accordance with the
SEC interpretation of the requirements of Section 16(a) with
respect to periodic elections of directors and with whatever
rules the Commission may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. The Company will furnish, or will cause to be furnished, to
the Fund or the Underwriter, each piece of sales literature
or other promotional material in which the Fund or the
Fund's adviser or the Underwriter is named, at least ten
(10) business days prior to its use. No such material will
be used if the Fund or the Underwriter reasonably objects to
such use within five (5) business days after receipt of such
material.
4.2. The Company will not give any information or make any
representations or statements on behalf of the Fund or
concerning the Fund in connection with the sale of the
Contracts other than the information or representations
contained in the registration statement, prospectus or
statement of additional information for Fund shares, as such
registration statement, prospectus and statement of
additional information may be amended or supplemented from
time to time, or in reports or proxy statements for the
Fund, or in published reports for the Fund which are in the
public domain or approved by the Fund or the Underwriter for
distribution, or in sales literature or other material
provided by the Fund or by the Underwriter, except with
permission of the Fund or the Underwriter. The Fund and the
Underwriter agree to respond to any request for approval on
a prompt and timely basis. Nothing in this Section 4.2 will
be construed as preventing the Company or its employees or
agents from giving advice on investment in the Fund.
4.3. The Fund or the Underwriter will furnish, or will cause to
be furnished, to the Company or its designee, each piece of
sales literature or other promotional material in which the
Company or its separate account is named, at least ten (10)
business days prior to its use. No such material will be
used if the Company reasonably objects to such use within
five (5) business days after receipt of such material.
<PAGE>
PAGE 9
4.4. The Fund and the Underwriter will not give any information
or make any representations or statements on behalf of the
Company or concerning the Company, each Account, or the
Contracts other than the information or representations
contained in a registration statement, prospectus or
statement of additional information for the Contracts, as
such registration statement, prospectus and statement of
additional information may be amended or supplemented from
time to time, or in published reports for each Account or
the Contracts which are in the public domain or approved by
the Company for distribution to contractowners or
participants, or in sales literature or other material
provided by the Company, except with permission of the
Company. The Company agrees to respond to any request for
approval on a prompt and timely basis.
4.5. The Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses,
statements of additional information, reports, proxy
statements, sales literature and other promotional
materials, applications for exemptions, requests for no-
action letters, and all amendments to any of the above, that
relate to the Fund or its shares, contemporaneously with the
filing of such document with the SEC or the NASD.
4.6. The Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses,
statements of additional information, reports, solicitations
for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests
for no action letters, and all amendments to any of the
above, that relate to the Contracts or each Account,
contemporaneously with the filing of such document with the
SEC or the NASD.
4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but is
not limited to, advertisements (such as material published,
or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or
other public media, i.e., on-line networks such as the
Internet or other electronic messages), sales literature
(i.e., any written communication distributed or made
generally available to customers or the public, including
brochures, circulars, research reports, market letters, form
letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article),
educational or training materials or other communications
distributed or made generally available to some or all
agents or employees, registration statements, prospectuses,
statements of additional information, shareholder reports,
and proxy materials and any other material constituting
sales literature or advertising under the NASD rules, the
1933 Act or the 1940 Act.
<PAGE>
PAGE 10
4.8. The Fund and the Underwriter hereby consent to the Company's
use of the name __________________________________________,
in connection with marketing the Contracts, subject to the
terms of Sections 4.1 and 4.2 of this Agreement. Such
consent will terminate with the termination of this
Agreement.
ARTICLE V. Fees and Expenses
5.1. The Fund and the Underwriter will pay no fee or other
compensation to the Company under this Agreement, except
that if the Fund or any Portfolio adopts and implements a
plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses, then, subject to obtaining any
required exemptive orders or other regulatory approvals, the
Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in such amounts agreed
to by the Underwriter in writing. Currently, no such
payments are contemplated.
5.2. All expenses incident to performance by the Fund of this
Agreement will be paid by the Fund to the extent permitted
by law. All Fund shares will be duly authorized for
issuance and registered in accordance with applicable
federal law and, to the extent deemed advisable by the Fund,
in accordance with applicable state law, prior to sale. The
Fund will bear the expenses for the cost of registration and
qualification of the Fund's shares; preparation and filing
of the Fund's prospectus, statement of additional
information and registration statement, proxy materials and
reports; the preparation of all statements and notices
required by any federal or state law; all taxes on the
issuance or transfer of the Fund's shares; any expenses
permitted to be paid or assumed by the Fund pursuant to a
plan, if any, under Rule 12b-1 under the 1940 Act; and all
typesetting, printing and distribution expenses set forth in
Article III of this Agreement.
ARTICLE VI. Diversification
6.1. The Fund will at all times invest money from the Contracts
in such a manner as to ensure that the Contracts will be
treated as variable contracts under the Internal Revenue
Code and the regulations issued thereunder. Without
limiting the scope of the foregoing, the Fund will comply
with Section 817(h) of the Internal Revenue Code and
Treasury Regulation 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life
insurance contracts and any amendments or other
modifications to such Section or Regulation in accordance
with guidelines provided by the Company prior to the
execution of this Agreement and as necessary thereafter. In
the event of a breach of this Article VI by the Fund, it
will take all reasonable steps: (a) to notify the Company of
such breach; and (b) to adequately diversify the Fund so as
to achieve compliance within the grace period afforded by
Treasury Regulation 1.817-5.
<PAGE>
PAGE 11
ARTICLE VII. Potential Conflicts
7.1. The Fund Board will monitor the Fund for the existence of
any irreconcilable material conflict among the interests of
the contractowners of all separate accounts investing in the
Fund. An irreconcilable material conflict may arise for a
variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable
federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-
action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant
proceeding; (d) the manner in which the investments of any
Portfolio are being managed; (e) a difference in voting
instructions given by Participating Insurance Companies or
by variable annuity and variable life insurance
contractowners; or (f) a decision by an insurer to disregard
the voting instructions of contractowners. The Fund Board
will promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications
thereof. A majority of the Fund Board will consist of
persons who are not "interested" persons of the Fund.
7.2. The Company will report any potential or existing conflicts
of which it is aware to the Fund Board. The Company agrees
to assist the Fund Board in carrying out its
responsibilities, as delineated in the Mixed and Shared
Funding Exemptive Order, by providing the Fund Board with
all information reasonably necessary for the Fund Board to
consider any issues raised. This includes, but is not
limited to, an obligation by the Company to inform the Fund
Board whenever contractowner voting instructions are
disregarded. The Fund Board will record in its minutes, or
other appropriate records, all reports received by it and
all action with regard to a conflict.
7.3. If it is determined by a majority of the Fund Board, or a
majority of its disinterested directors, that an
irreconcilable material conflict exists, the Company and
other Participating Insurance Companies will, at their
expense and to the extent reasonably practicable (as
determined by a majority of the disinterested directors),
take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (a)
withdrawing the assets allocable to some or all of the
Accounts from the Fund or any Portfolio and reinvesting such
assets in a different investment medium, including (but not
limited to) another Portfolio of the Fund, or submitting the
question whether such segregation should be implemented to a
vote of all affected contractowners and, as appropriate,
segregating the assets of any appropriate group (i.e.,
<PAGE>
PAGE 12
variable annuity contractowners or variable life insurance
contractowners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or
offering to the affected contractowners the option of making
such a change; and (b) establishing a new registered
management investment company or managed separate account.
7.4. If the Company's disregard of voting instructions could
conflict with the majority of contractowner voting
instructions, and the Company's judgment represents a
minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw
the affected subaccount of the Account's investment in the
Fund and terminate this Agreement with respect to such
subaccount; provided, however, that such withdrawal and
termination will be limited to the extent required by the
foregoing irreconcilable material conflict as determined by
a majority of the disinterested directors of the Fund Board.
No charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal and termination must take
place within six (6) months after the Fund gives written
notice to the Company that this provision is being
implemented. Until the end of such six-month period the
Underwriter and Fund will, to the extent permitted by law
and any exemptive relief previously granted to the Fund,
continue to accept and implement orders by the Company for
the purchase (and redemption) of shares of the Fund.
7.5. If a particular state insurance regulator's decision
applicable to the Company conflicts with the majority of
other state insurance regulators, then the Company will
withdraw the affected subaccount of the Account's investment
in the Fund and terminate this Agreement with respect to
such subaccount; provided, however, that such withdrawal and
termination will be limited to the extent required by the
foregoing irreconcilable material conflict as determined by
a majority of the disinterested directors of the Fund Board.
No charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal and termination must take
place within six (6) months after the Fund gives written
notice to the Company that this provision is being
implemented. Until the end of such six-month period the
Underwriter and Fund will, to the extent permitted by law
and any exemptive relief previously granted to the Fund,
continue to accept and implement orders by the Company for
the purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement,
a majority of the disinterested members of the Fund Board
will determine whether any proposed action adequately
remedies any irreconcilable material conflict, but in no
event will the Fund be required to establish a new funding
medium for the Contracts. The Company will not be required
by Section 7.3 to establish a new funding medium for the
Contracts if an offer to do so has been declined by vote of
a majority of contractowners materially adversely affected
by the irreconcilable material conflict.
<PAGE>
PAGE 13
7.7. The Company will at least annually submit to the Fund Board
such reports, materials or data as the Fund Board may
reasonably request so that the Fund Board may fully carry
out the duties imposed upon it as delineated in the Mixed
and Shared Funding Exemptive Order, and said reports,
materials and data will be submitted more frequently if
deemed appropriate by the Fund Board.
7.8. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the 1940 Act or the rules
promulgated thereunder with respect to mixed or shared
funding (as defined in the Mixed and Shared Funding
Exemptive Order) on terms and conditions materially
different from those contained in the Mixed and Shared
Funding Exemptive Order, then: (a) the Fund and/or the
Participating Insurance Companies, as appropriate, will take
such steps as may be necessary to comply with Rules 6e-2 and
6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 3.4, 3.5,
7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement will continue
in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in
such Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the
Fund, the Underwriter, and each person, if any, who
controls or is associated with the Fund or the
Underwriter within the meaning of such terms under the
federal securities laws and any director, officer,
employee or agent of the foregoing (collectively, the
"Indemnified Parties" for purposes of this Section
8.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with
the written consent of the Company) or litigation
(including reasonable legal and other expenses), to
which the Indemnified Parties may become subject under
any statute, regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or
settlements:
(1) arise out of or are based upon any untrue
statements or alleged untrue statements of any
material fact contained in the registration
statement, prospectus or statement of additional
information for the Contracts or contained in
the Contracts or sales literature or other
promotional material for the Contracts (or any
amendment or supplement to any of the
foregoing), or arise out of or are based upon
the omission or the alleged omission to state
therein a material fact required to be stated<PAGE>
PAGE 14
or necessary to make such statements not
misleading in light of the circumstances in
which they were made; provided that this
agreement to indemnify will not apply as to any
Indemnified Party if such statement or omission
or such alleged statement or omission was made
in reliance upon and in conformity with
information furnished to the Company by or on
behalf of the Fund for use in the registration
statement, prospectus or statement of additional
information for the Contracts or in the
Contracts or sales literature (or any amendment
or supplement) or otherwise for use in
connection with the sale of the Contracts or
Fund shares; or
(2) arise out of or as a result of statements or
representations by or on behalf of the Company
(other than statements or representations
contained in the Fund registration statement,
prospectus, statement of additional information
or sales literature or other promotional
material of the Fund (or any amendment or
supplement) not supplied by the Company or
persons under its control) or wrongful conduct
of the Company or persons under its control,
with respect to the sale or distribution of the
Contracts or Fund shares; or
(3) arise out of any untrue statement or alleged
untrue statement of a material fact contained in
the Fund registration statement, prospectus,
statement of additional information or sales
literature or other promotional material of the
Fund (or amendment or supplement) or the
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make such statements not misleading
in light of the circumstances in which they were
made, if such a statement or omission was made
in reliance upon and in conformity with
information furnished to the Fund by or on
behalf of the Company or persons under its
control; or
(4) arise as a result of any failure by the Company
to provide the services and furnish the
materials or to make any payments under the
terms of this Agreement; or
(5) arise out of any material breach of any
representation and/or warranty made by the
Company in this Agreement or arise out of or
result from any other material breach by the
Company of this Agreement;
except to the extent provided in Sections 8.1(b) and
8.3 hereof. This indemnification will be in addition
to any liability that the Company otherwise may have.
<PAGE>
PAGE 15
(b) No party will be entitled to indemnification if such
loss, claim, damage, liability or litigation is due to
the willful misfeasance, bad faith, gross negligence
or reckless disregard of duty by the party seeking
indemnification.
(c) The Indemnified Parties promptly will notify the
Company of the commencement of any litigation,
proceedings, complaints or actions by regulatory
authorities against them in connection with the
issuance or sale of the Fund shares or the Contracts
or the operation of the Fund.
8.2. Indemnification By The Underwriter
(a) The Underwriter, on its own behalf and on behalf of
the Fund, agrees to indemnify and hold harmless the
Company and each person, if any, who controls or is
associated with the Company within the meaning of such
terms under the federal securities laws and any
director, officer, employee or agent of the foregoing
(collectively, the "Indemnified Parties" for purposes
of this Section 8.2) against any and all losses,
claims, damages, liabilities (including amounts paid
in settlement with the written consent of the
Underwriter) or litigation (including reasonable legal
and other expenses) to which the Indemnified Parties
may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions
in respect thereof) or settlements:
(1) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the registration
statement, prospectus or statement of additional
information for the Fund or sales literature or
other promotional material of the Fund (or any
amendment or supplement to any of the
foregoing), or arise out of or are based upon
the omission or the alleged omission to state
therein a material fact required to be stated or
necessary to make such statements not misleading
in light of the circumstances in which they were
made; provided that this agreement to indemnify
will not apply as to any Indemnified Party if
such statement or omission or such alleged
statement or omission was made in reliance upon
and in conformity with information furnished to
the Underwriter or Fund by or on behalf of the
Company for use in the registration statement,
prospectus or statement of additional
information for the Fund or in sales literature
of the Fund (or any amendment or supplement
thereto) or otherwise for use in connection with
the sale of the Contracts or Fund shares; or
<PAGE>
PAGE 16
(2) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Contracts or in
the Contract or Fund registration statements,
prospectuses or statements of additional
information or sales literature or other
promotional material for the Contracts or of the
Fund not supplied by the Underwriter or the Fund
or persons under the control of the Underwriter
or the Fund respectively, or wrongful conduct of
the Underwriter or the Fund or persons under the
control of the Underwriter or the Fund
respectively, with respect to the sale or
distribution of the Contracts or Fund shares; or
(3) arise out of any untrue statement or alleged
untrue statement of a material fact contained in
a registration statement, prospectus, statement
of additional information or sales literature or
other promotional material covering the
Contracts (or any amendment or supplement
thereto), or the omission or alleged omission to
state therein a material fact required to be
stated or necessary to make such statement or
statements not misleading in light of the
circumstances in which they were made, if such
statement or omission was made in reliance upon
and in conformity with information furnished to
the Company by or on behalf of the Underwriter
or the Fund or persons under the control of the
Underwriter or the Fund; or
(4) arise as a result of any failure by the Fund to
provide the services and furnish the materials
under the terms of this Agreement (including a
failure, whether unintentional or in good faith
or otherwise, to comply with the diversification
requirements and procedures related thereto
specified in Article VI of this Agreement except
if such failure is a result of the Company's
failure to comply with the notification
procedures specified in Article VI); or
(5) arise out of or result from any material breach
of any representation and/or warranty made by
the Underwriter or the Fund in this Agreement
(including but not limited to any failure to
supply timely and accurate net asset value
information relating to the Fund; an error in
security accounting that would cause a
previously calculated net asset value to be
incorrect; faulty transmittal of a net asset
value; or failure to furnish the Company with
correct and timely information on the
declaration of any dividend distribution
payable), or arise out of or result from any
other material breach of this Agreement by the
Underwriter or the Fund; except to the extent
<PAGE>
PAGE 17
provided in Sections 8.2(b) and 8.3 hereof.
This indemnification will be in addition to any
liability which the Underwriter otherwise may
have.
(b) No party will be entitled to indemnification if such
loss, claim, damage, liability or litigation is due to
the willful misfeasance, bad faith, gross negligence
or reckless disregard of duty by the party seeking
indemnification.
(c) The Indemnified Parties will promptly notify the
Underwriter and the Fund of the commencement of any
litigation, proceedings, complaints or actions by
regulatory authorities against them in connection with
the issuance or sale of the Contracts or the operation
of the Account.
8.3. Indemnification Procedure
Any person obligated to provide indemnification under this
Article VIII ("Indemnifying Party" for the purpose of this
Section 8.3) will not be liable under the indemnification
provisions of this Article VIII with respect to any claim
made against a party entitled to indemnification under this
Article VIII ("Indemnified Party" for the purpose of this
Section 8.3) unless such Indemnified Party will have
notified the Indemnifying Party in writing within a
reasonable time after the summons or other first legal
process giving information of the nature of the claim will
have been served upon such Indemnified Party (or after such
party will have received notice of such service on any
designated agent), but failure to notify the Indemnifying
Party of any such claim will not relieve the Indemnifying
Party from any liability which it may have to the
Indemnified Party against whom such action is brought under
the indemnification provision of this Article VIII except to
the extent that the failure to notify results in the failure
of actual notice to the Indemnifying Party and such
Indemnifying Party is damaged solely as a result of failure
to give such notice. In case any such action is brought
against the Indemnified Party, the Indemnifying Party will
be entitled to participate, at its own expense, in the
defense thereof. The Indemnifying Party also will be
entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice
from the Indemnifying Party to the Indemnified Party of the
Indemnifying Party's election to assume the defense thereof,
the Indemnified Party will bear the fees and expenses of any
additional counsel retained by it, and the Indemnifying
Party will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by
such party independently in connection with the defense
thereof other than reasonable costs of investigation,
unless: (a) the Indemnifying Party and the Indemnified Party
will have mutually agreed to the retention of such counsel;
or (b) the named parties to any such proceeding (including
any impleaded parties) include both the Indemnifying Party
<PAGE>
PAGE 18
and the Indemnified Party and representation of both parties
by the same counsel would be inappropriate due to actual or
potential differing interests between them. The
Indemnifying Party will not be liable for any settlement of
any proceeding effected without its written consent but if
settled with such consent or if there is a final judgment
for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnified Party from and against any loss or
liability by reason of such settlement or judgment. A
successor by law of the parties to this Agreement will be
entitled to the benefits of the indemnification contained in
this Article VIII. The indemnification provisions contained
in this Article VIII will survive any termination of this
Agreement.
ARTICLE IX. Applicable Law
9.1. This Agreement will be construed and the provisions hereof
interpreted under and in accordance with the laws of the
State of Minnesota.
9.2. This Agreement will be subject to the provisions of the 1933
Act, the 1934 Act and the 1940 Act, and the rules and
regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the
SEC may grant (including, but not limited to, the Mixed and
Shared Funding Exemptive Order) and the terms hereof will be
interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1. This Agreement will terminate:
(a) at the option of any party, with or without cause,
with respect to some or all of the Portfolios, upon
one (1) year's advance written notice to the other
parties or, if later, upon receipt of any required
exemptive relief or orders from the SEC, unless
otherwise agreed in a separate written agreement among
the parties; or
(b) at the option of the Company, upon receipt of written
notice by the other parties, with respect to any
Portfolio if shares of the Portfolio are not
reasonably available to meet the requirements of the
Contracts as determined in good faith by the Company;
or
(c) at the option of the Company, upon receipt of written
notice by the other parties, with respect to any
Portfolio in the event any of the Portfolio's shares
are not registered, issued or sold in accordance with
applicable state and/or federal law or such law
precludes the use of such shares as the underlying
investment media of the Contracts issued or to be
issued by Company; or
<PAGE>
PAGE 19
(d) at the option of the Fund, upon receipt of written
notice by the other parties, upon institution of
formal proceedings against the Company by the NASD,
the SEC, the insurance commission of any state or any
other regulatory body regarding the Company's duties
under this Agreement or related to the sale of the
Contracts, the administration of the Contracts, the
operation of the Account, or the purchase of the Fund
shares, which the Fund determines in good faith would
have a material adverse effect on the Company's
ability to perform its obligations under this
Agreement; or
(e) at the option of the Company, upon receipt of written
notice by the other parties, upon institution of
formal proceedings against the Fund by the NASD, the
SEC, or any state securities or insurance department
or any other regulatory body, which the Company
determines in good faith would have a material adverse
effect on the Fund's ability to perform its
obligations under this Agreement; or
(f) at the option of the Company, upon receipt of written
notice by the other parties, if the Fund ceases to
qualify as a Regulated Investment Company under
Subchapter M of the Internal Revenue Code, or under
any successor or similar provision, or if the Company
reasonably and in good faith believes that the Fund
may fail to so qualify; or
(g) at the option of the Company, upon receipt of written
notice by the other parties, with respect to any
Portfolio if the Fund fails to meet the
diversification requirements specified in Article VI
hereof or if the Company reasonably and in good faith
believes the Fund may fail to meet such requirements;
or
(h) at the option of any party to this Agreement, upon
written notice to the other parties, upon another
party's material breach of any provision of this
Agreement; or
(i) at the option of the Company, if the Company
determines in its sole judgment exercised in good
faith, that either the Fund or the Underwriter has
suffered a material adverse change in its business,
operations or financial condition since the date of
this Agreement or is the subject of material adverse
publicity which is likely to have a material adverse
impact upon the business and operations of the
Company, such termination to be effective sixty (60)
days' after receipt by the other parties of written
notice of the election to terminate; or
(j) at the option of the Fund or Underwriter, if the Fund
or Underwriter respectively, will determine in its
sole judgment exercised in good faith, that the
Company has suffered a material adverse change in its
<PAGE>
PAGE 20
business, operations or financial condition since the
date of this Agreement or is the subject of material
adverse publicity which is likely to have a material
adverse impact upon the business and operations of the
Fund or Underwriter, such termination to be effective
sixty (60) days' after receipt by the other parties of
written notice of the election to terminate; or
(k) at the option of the Company or the Fund upon receipt
of any necessary regulatory approvals and/or the vote
of the contractowners having an interest in the
Account (or any subaccount) to substitute the shares
of another investment company for the corresponding
Portfolio shares of the Fund in accordance with the
terms of the Contracts for which those Portfolio
shares had been selected to serve as the underlying
investment media. The Company will give sixty (60)
days' prior written notice to the Fund of the date of
any proposed vote or other action taken to replace the
Fund's shares; or
(l) at the option of the Company or the Fund upon a
determination by a majority of the Fund Board, or a
majority of the disinterested Fund Board members, that
an irreconcilable material conflict exists among the
interests of: (1) all contractowners of variable
insurance products of all separate accounts; or (2)
the interests of the Participating Insurance Companies
investing in the Fund as set forth in Article VII of
this Agreement; or
(m) at the option of the Fund in the event any of the
Contracts are not issued or sold in accordance with
applicable federal and/or state law. Termination will
be effective immediately upon such occurrence without
notice.
10.2. Notice Requirement
(a) No termination of this Agreement will be effective
unless and until the party terminating this Agreement
gives prior written notice to all other parties of its
intent to terminate, which notice will set forth the
basis for the termination.
(b) In the event that any termination of this Agreement is
based upon the provisions of Article VII, such prior
written notice will be given in advance of the
effective date of termination as required by such
provisions.
10.3. Effect of Termination
(a) Notwithstanding any termination of this Agreement, the
Fund and the Underwriter will, at the option of the
Company, continue to make available additional shares
of the Fund pursuant to the terms and conditions of
this Agreement, for all Contracts in effect on the
<PAGE>
PAGE 21
effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts.") .
Specifically, without limitation, the owners of the
Existing Contracts will be permitted to reallocate
investments in the Portfolios (as in effect on such
date), redeem investments in the Portfolios and/or
invest in the Portfolios upon the making of additional
purchase payments under the Existing Contracts. The
parties agree that this Section 10.3 will not apply to
any terminations under Article VII and the effect of
such Article VII terminations will be governed by
Article VII of this Agreement.
10.4 Surviving Provisions
Notwithstanding any termination of this Agreement, each
party's obligations under Article VIII to indemnify other
parties will survive and not be affected by any termination
of this Agreement. In addition, with respect to Existing
Contracts, all provisions of this Agreement also will
survive and not be affected by any termination of this
Agreement.
ARTICLE XI. Notices
Any notice will be deemed duly given when sent by
registered or certified mail to the other party at the address of
such party set forth below or at such other address as such party
may from time to time specify in writing to the other parties.
If to the Company:
American Partners Life Insurance Company
80 South Eighth Street
P. O. Box 534
Minneapolis, MN 55440
Attn: President
If to the Fund:
If to the Underwriter:
<PAGE>
PAGE 22
ARTICLE XII. Miscellaneous
12.1. All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims
against the Fund as neither the directors, officers, agents
or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.
12.2. The Fund and the Underwriter acknowledge that the identities
of the customers of the Company or any of its affiliates
(collectively the "Protected Parties" for purposes of this
Section 12.2), information maintained regarding those
customers, and all computer programs and procedures
developed by the Protected Parties or any of their employees
or agents in connection with the Company's performance of
its duties under this Agreement are the valuable property of
the Protected Parties. The Fund and the Underwriter agree
that if they come into possession of any list or compilation
of the identities of or other information about the
Protected Parties' customers, or any other property of the
Protected Parties, other than such information as may be
independently developed or compiled by the Fund or the
Underwriter from information supplied to them by the
Protected Parties' customers who also maintain accounts
directly with the Fund or the Underwriter, the Fund and the
Underwriter will hold such information or property in
confidence and refrain from using, disclosing or
distributing any of such information or other property
except: (a) with the Company's prior written consent; or
(b) as required by law or judicial process. The Fund and
the Underwriter acknowledge that any breach of the
agreements in this Section 12.2 would result in immediate
and irreparable harm to the Protected Parties for which
there would be no adequate remedy at law and agree that in
the event of such a breach, the Protected Parties will be
entitled to equitable relief by way of temporary and
permanent injunctions, as well as such other relief as any
court of competent jurisdiction deems appropriate.
12.3. The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of
the provisions hereof or otherwise affect their construction
or effect.
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute
one and the same instrument.
12.5. If any provision of this Agreement will be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of the Agreement will not be affected thereby.
12.6. This Agreement will not be assigned by any party hereto
without the prior written consent of all the parties.
12.7. Each party to this Agreement will cooperate with each other
party and all appropriate governmental authorities
(including without limitation the SEC, the NASD and state
insurance regulators) and will permit each other and such
<PAGE>
PAGE 23
authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to
this Agreement or the transactions contemplated hereby.
12.8. Each party represents that the execution and delivery of
this Agreement and the consummation of the transactions
contemplated herein have been duly authorized by all
necessary corporate or board action, as applicable, by such
party and when so executed and delivered this Agreement will
be the valid and binding obligation of such party
enforceable in accordance with its terms.
12.9. The parties to this Agreement may amend the schedules to
this Agreement from time to time to reflect changes in or
relating to the Contracts, the Accounts or the Portfolios of
the Fund or other applicable terms of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly
authorized representative and its seal to be hereunder affixed
hereto as of the date specified below.
Company:
AMERICAN PARTNERS LIFE
INSURANCE COMPANY
SEAL By: _______________________________
Fund:
SEAL By: _______________________________
Underwriter:
SEAL By: _______________________________
<PAGE>
PAGE 24
Schedule 1
PARTICIPATION AGREEMENT
By and Among
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
And
_________________________________________
And
_________________________________________
The following separate accounts of American Partners Life Insurance
Company are permitted in accordance with the provisions of this
Agreement to invest in Portfolios of the Fund shown in Schedule 2:
APL Variable Annuity Account 1, established February 9, 1995.
______________________, 1995
<PAGE>
PAGE 25
Schedule 2
PARTICIPATION AGREEMENT
By and Among
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
And
_________________________________________
And
_________________________________________
The Separate Account(s) shown on Schedule 1 may invest in the
following Portfolios of the _________________________________:
(Fund)
___________________, 1995
<PAGE>
PAGE 1
August 16, 1995
Board of Directors
American Partners Life Insurance Company
80 S. 8th Street
Minneapolis, MN 55440
Gentlemen:
As General Counsel of American Partners Life Insurance Company (the
Company), I am familiar with its legal affairs and with APL
Variable Annuity Account 1 (the Account), which is a separate
account of the Company established by the Company's Board of
Directors pursuant to Section 20-651 of the Arizona Insurance Laws.
I am familiar with the Registration Statement on Form N-4 and Pre-
effective Amendment No. 1 thereto (File No. 33-57731/812-9484) (the
Registration Statement), filed by the Company on behalf of the
Account with the Securities and Exchange Commission with respect to
the Account pursuant to Deferred Annuity Contract (the Contract).
I have made such examination of law and examined such documents and
records as in my judgment are necessary and appropriate to enable
me to express the following opinions. I am of the opinion that:
1. The Company is duly incorporated, validly existing and in
good standing under the laws of the State of Arizona, and is
duly licensed or qualified to do business in Arizona wherein
the business transacted by it requires such licensing or
qualification. The Company has all corporate power required
to carry on its buisness as now conducted and to issue the
Contracts.
2. The Account is a separate account of the Company, duly
established and validly existing pursuant to Arizona law.
3. The Contracts, when issued, offered and sold in accordance
with the prospectus contained in the aforesaid Registration
Statement and, upon reliance of local law, will be legal and
binding obligations of the Company in accordance with their
terms.
4. There is no limitation as to the interests in the Account
that may be issued.
<PAGE>
PAGE 2
August 16, 1995
5. There is no pending or unthreatened litigation, claims or
assessments (including any unasserted claims or assessments)
against the Company.
Please be advised you are correct in your understanding that I will
advise and consult with you concerning questions of disclosure and
the applicable requirements of Statements of Financial Accounting
Standards No. 5 if, and when, in the course of performing legal
services for the Company or the Accounts with respect to a matter
recognized by me to involve an unasserted claim or assessment that
may require financial statement disclosure or consider disclosure
of any such possible claim or assessment in your financial
statements. You may furnish a copy of this letter to your
independent accountants.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ William A. Stoltzmann
William A. Stoltzmann
Vice President, General Counsel and Secretary
WAS/KB/rdh
<PAGE>
PAGE 1
Consent of Independent Auditors
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our report dated May 19,
1995 on the statutory basis financial statements of American
Partners Life Insurance Company (a wholly-owned subsidiary of IDS
Life Insurance Company) for the APL Variable Annuity Account 1 to
be offered by the American Partners Life Insurance Company, in Pre-
Effective Amendment No. 1 to the Registration Statement (Form N-4
File No. 33-57731) being filed under the Securities Act of 1933 and
(Form N-4 File No. 812-9484) being filed under the Investment
Company Act of 1940.
Minneapolis, Minnesota
August 29, 1995
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<CIK> 0040937690
<NAME> American Partners Life Insurance Company
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLAR
<FISCAL-YEAR-END> DEC-31-1993 DEC-31-1995
<PERIOD-START> JAN-01-1994 JAN-01-1995
<PERIOD-END> DEC-31-1994 JUNE-31-1995
<PERIOD-TYPE> YEAR 6 MONTH
<EXCHANGE-RATE> 1 1
<DEBT-HELD-FOR-SALE> 0 0
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