As filed with the Securities and Exchange Commission on
January 28, 2000
Registration No. ______
======================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form S-6
---------------
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
----------------
ACACIA NATIONAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
(EXACT NAME OF REGISTRANT)
----------------
ACACIA NATIONAL LIFE INSURANCE COMPANY
(Depositor)
7315 Wisconsin Avenue
Bethesda, MD 20814
----------------
Robert-John H. Sands Senior Vice President
Corporate Secretary and General Counsel
Acacia National Life Insurance Company
7315 Wisconsin Avenue
Bethesda, MD 20855
-----------------
Title of Securities Being Registered: SECURITIES OF UNIT INVESTMENT TRUST
Approximate Date Of Proposed Public offering: As soon as practicable after the
effective date of the Registration Statement.
Flexible Premium Variable Life Insurance Policies--Registration of an indefinite
amount of securities pursuant to Rule 24f-2 under the Investment Company Act of
1940
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a) may determine.
<PAGE>
RECONCILIATION AND TIE BETWEEN ITEMS IN FORM N-8B-2
AND THE PROSPECTUS
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
1 Cover Page
2 Cover Page
3 Not Applicable
4 Distribution of the Policies
5 Acacia National Life Insurance Company - Separate Account I
6 Acacia National Life Insurance Company - Separate Account I
7 Not Required
8 Not Required
9 Legal Proceedings
10 Summary; Addition, Deletion of Substitution of Investments;
Policy Benefits; Policy Rights; Payment and Allocation of
Premiums; General Provisions; Voting Rights
11 Summary; The Funds
12 Summary; The Funds
13 Summary; The Funds - Charges and Deductions
14 Summary; Payment and Allocation of Premiums
15 Summary; Payment and Allocation of Premiums
16 Summary; The Alger American Fund, BT Insurance Funds Trust,
Calvert Variable Series, Inc., Fidelity Management & Research
Company, Franklin Templeton Variable Insurance Products Trust,
Neuberger Berman Advisers Management Trust, Oppenheimer Variable
Account Funds, and Van Eck Worldwide Insurance Trust
17 Summary, Policy Rights
18 The Alger American Fund, BT Insurance Funds Trust, Calvert
Variable Series, Inc., Fidelity Management & Research Company,
Franklin Templeton Variable Insurance Products Trust, Neuberger
Berman Advisers Management Trust, Oppenheimer Variable Account
Funds, and Van Eck Worldwide Insurance Trust
19 General Provisions; Voting Rights
20 Not Applicable
21 Summary; Policy Rights, Loan Benefits; General Provisions
22 Not Applicable
23 Safekeeping of the Separate Account's Assets
24 General Provisions
25 Acacia National Life Insurance Company
26 Not Applicable
27 Acacia National Life Insurance Company
28 Executive Officers and Directors of ANLIC; Acacia National Life
Insurance Company
29 Acacia National Life Insurance Company
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Not Applicable
36 Not Required
37 Not Applicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Distribution of the Policies
41 Distribution of the Policies
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
- ------------ -----------------------
42 Not Applicable
43 Not Applicable
44 Cash Value, Payment and Allocation of Premium
45 Not Applicable
46 The Funds; Cash Value
47 The Funds
48 State Regulation of ANLIC
49 Not Applicable
50 The Separate Account
51 Cover Page; Summary; Policy Benefits; Payment and Allocation of
Premiums, Charges and Deductions
52 Addition, Deletion or Substitution of Investments
53 Summary; Federal Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Required
57 Not Required
58 Not Required
59 Financial Statements
<PAGE>
ACACIA NATIONAL LIFE INSURANCE COMPANY LOGO
PROSPECTUS
Acacia National Life
Insurance Company
7315 Wisconsin Avenue
Bethesda, MD 20814
Executive Select -- A Flexible Premium Variable Universal Life
Insurance Policy issued by Acacia National Life Insurance Company
- --------------------------------------------------------------------------------
Executive Select is a flexible premium variable universal life insurance Policy
("Policy"), issued by Acacia National Life Insurance Company ("ANLIC"). The
Policy is designed primarily for an employer who is seeking a cost-effective and
tax-efficient means of informally funding a non-qualified deferred compensation
plan for its key executives. Like traditional life insurance policies, an
Executive Select Policy provides Death Benefits to Beneficiaries and gives you,
the Policy Owner, the opportunity to increase the Policy's value. Unlike
traditional policies, Executive Select lets you vary the frequency and amount of
premium payments, rather than follow a fixed premium payment schedule. It also
lets you change the level of Death Benefits as often as once each year.
An Executive Select Policy is different from traditional life insurance policies
in another important way: the Policy Owner selects how Policy premiums will be
invested. Although the Policy guarantees a minimum Death Benefit as long as the
Policy remains in force, the value of the Policy, as well as the actual Death
Benefit, will vary with the performance of investments you select.
The Investment Options available through Executive Select include investment
portfolios from The Alger American Fund, BT Insurance Funds Trust, Calvert
Variable Series, Inc., Fidelity Management & Research Company, Franklin
Templeton Variable Insurance Products Trust, Neuberger Berman Advisers
Management Trust, Oppenheimer Variable Account Funds, and Van Eck Worldwide
Insurance Trust. Each of these portfolios has its own investment objective and
policies. These are described in the prospectuses for each investment portfolio
which must accompany this Executive Select prospectus. You may also choose to
allocate premium payments to the Fixed Account managed by ANLIC.
An Executive Select Policy will be issued after ANLIC accepts a prospective
Policy Owner's application. Generally, an application must specify a Death
Benefit no less than $100,000 ($50,000 if the Term Coverage Rider is attached to
the Policy). Policies are available on individuals ages 18 to 65 at the time of
purchase if guaranteed or simplified underwriting is used and ages 18 to 85 with
regular underwriting. An Executive Select Policy, once purchased, may generally
be canceled within 10 days after you receive it.
This Executive Select prospectus is designed to assist you in understanding the
opportunities and risks associated with the purchase of an Executive Select
Policy. Prospective Policy Owners are urged to read the prospectus carefully and
retain it for future reference.
This prospectus includes a summary of the most important features of the
Executive Select Policy, information about ANLIC, a list of the investment
portfolios to which you may allocate premium payments, and a detailed
description of the Executive Select Policy. The appendix to the prospectus
includes tables designed to illustrate how values and Death Benefits may change
with the investment experience of the Investment Options.
This prospectus must be accompanied by a prospectus for each of the investment
portfolios available through this Policy.
Although the Executive Select Policy is designed to provide life insurance, an
Executive Select Policy is considered to be a security. It is not a deposit
with, an obligation of, or guaranteed or endorsed by any banking institution,
nor is it insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. The purchase of an Executive Select Policy
involves investment risk, including the possible loss of principal. For this
reason, Executive Select may not be suitable for all businesses. A Policy
provides employers with a means of funding non-qualified deferred compensation
plans for their key associates. It may not be advantageous to purchase an
Executive Select Policy as a replacement for another type of life insurance or
as a way to obtain additional insurance protection if the purchaser already owns
another flexible premium variable universal life insurance policy on the
Insured. In addition, the tax consequences of continuing coverage beyond age 100
are uncertain, and the Policy Owner should consult a tax advisor as to the
potential consequences.
The Securities and Exchange Commission maintains a web site (http://www.sec.gov)
that contains other information regarding registrants that file electronically
with the Securities and Exchange Commission.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORY AUTHORITY HAS APPROVED THESE SECURITIES, OR DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
May 1, 2000
EXECUTIVE SELECT
1
<PAGE>
TABLE OF CONTENTS PAGE
DEFINITIONS................................................................ 3
SUMMARY.................................................................... 5
YEAR 2000 ................................................................. 9
ANLIC, THE SEPARATE ACCOUNT AND THE FUNDS.................................. 9
Acacia National Life Insurance Company.............................. 9
The Separate Account................................................ 9
Performance Information............................................. 10
The Funds........................................................... 10
Investment Objectives and Policies Of The Funds' Portfolios......... 11
Addition, Deletion or Substitution of Investments................... 16
Fixed Account....................................................... 16
POLICY BENEFITS............................................................ 17
Purposes of the Policy.............................................. 17
Death Benefit Proceeds.............................................. 17
Death Benefit Options............................................... 18
Methods of Affecting Insurance Protection........................... 20
Duration of Policy.................................................. 20
Accumulation Value.................................................. 20
Payment of Policy Benefits.......................................... 21
POLICY RIGHTS.............................................................. 21
Loan Benefits....................................................... 21
Surrenders.......................................................... 22
Partial Withdrawals................................................. 23
Transfers........................................................... 23
Systematic Programs................................................. 24
Free Look Privilege................................................. 24
PAYMENT AND ALLOCATION OF PREMIUMS......................................... 24
Issuance of a Policy................................................ 24
Premiums............................................................ 25
Allocation of Premiums and Accumulation Value....................... 26
Policy Lapse and Reinstatement...................................... 26
CHARGES AND DEDUCTIONS..................................................... 27
Deductions From Premium Payments.................................... 27
Charges From Accumulation Value..................................... 27
Daily Charges Against the Separate Account.......................... 28
Fund Expense Summary................................................ 29
GENERAL PROVISIONS......................................................... 30
DISTRIBUTION OF THE POLICIES............................................... 33
ADMINISTRATION............................................................. 33
FEDERAL TAX MATTERS........................................................ 33
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS............................... 36
THIRD PARTY SERVICES....................................................... 36
VOTING RIGHTS.............................................................. 36
STATE REGULATION OF ANLIC.................................................. 37
EXECUTIVE OFFICERS AND DIRECTORS OF ANLIC.................................. 37
LEGAL MATTERS.............................................................. 38
LEGAL PROCEEDINGS.......................................................... 38
EXPERTS.................................................................... 38
ADDITIONAL INFORMATION..................................................... 39
FINANCIAL STATEMENTS....................................................... 39
ACACIA NATIONAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT I
ACACIA NATIONAL LIFE INSURANCE COMPANY
APPENDICES................................................................. A-1
The Policy, certain Funds, and/or certain riders are
not available in all states.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESPERSON, OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
EXECUTIVE SELECT
2
<PAGE>
DEFINITIONS
ACCRUED EXPENSE CHARGES - Any Monthly Deductions that are due and unpaid.
ACCUMULATION VALUE - The total amount that the Policy provides for investment at
any time. It is equal to the total of the Accumulation Value held in Separate
Account I, the Fixed Account, and any Accumulation Value held in the General
Account which secures Outstanding Policy Debt.
ADMINISTRATIVE EXPENSE CHARGE - A charge, which is part of the Monthly
Deduction, to cover the cost of administering the Policy.
ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE - A daily charge that is deducted from
the overall assets of Separate Account I to provide for expenses of ongoing
administrative services to the Policy Owners as a group.
ATTAINED AGE - The Issue Age of the Insured plus the number of complete Policy
Years that the Policy has been in force.
ANLIC ("WE, US, OUR") - Acacia National Life Insurance Company, a Virginia stock
company. ANLIC's Home Office is located at 7315 Wisconsin Avenue, Bethesda, MD
20814.
BENEFICIARY - The person or persons to whom the Death Benefit Proceeds are
payable upon the death of the Insured. (See the sections on Beneficiary and
Change of Beneficiary.)
COST OF INSURANCE - A charge deducted monthly from the Accumulation Value to
provide the life insurance protection. The Cost of Insurance is calculated with
reference to an annual "Cost of Insurance Rate." This rate is based on the
Insured's gender (where applicable), Issue Age, Policy duration, and risk class.
The Cost of Insurance is part of the Monthly Deduction.
DEATH BENEFIT - The amount of insurance coverage provided under the selected
Death Benefit option of the Policy.
DEATH BENEFIT PROCEEDS - The proceeds payable to the Beneficiary upon receipt by
ANLIC of Satisfactory Proof of Death of the Insured while the Policy is in
force. It is equal to: (l) the Death Benefit; (2) plus additional life insurance
proceeds provided by any riders; (3) minus any Outstanding Policy Debt; (4)
minus any Accrued Expense Charges, including the Monthly Deduction through the
month of death.
FIXED ACCOUNT - An account that is a part of ANLIC's General Account to which
all or a portion of Net Premiums and transfers may be allocated for accumulation
at fixed rates of interest.
GENERAL ACCOUNT - The General Account of ANLIC includes all of ANLIC's assets
except those assets segregated into separate accounts such as Separate Account
I.
GRACE PERIOD - A 61 day period from the date written notice of lapse is mailed
to the Policy Owner's last known address. If the Policy Owner makes a payment
during the Grace Period such that the Net Cash Surrender Value of the Policy is
sufficient to pay the Monthly Deduction, the Policy will not lapse.
INSURED - The person whose life is insured under the Policy.
INVESTMENT OPTIONS - Refers to the Subaccounts and/or the Fixed Account offered
under this Policy.
ISSUE AGE - The age of the Insured at the Insured's birthday nearest the Policy
Date.
ISSUE DATE - The date that all financial, contractual and administrative
requirements have been met and processed for the Policy.
MONTHLY ACTIVITY DATE - The same date in each succeeding month as the Policy
Date except should such Monthly Activity Date fall on a date other than a
Valuation Date, the Monthly Activity Date will be the next Valuation Date.
MONTHLY DEDUCTION - The deductions taken from the Accumulation Value on the
Monthly Activity Date. These deductions are equal to: (1) the current Cost of
Insurance; (2) the Administrative Expense Charge; and (3) rider charges, if any.
MORTALITY AND EXPENSE RISK CHARGE - A daily charge that is deducted from the
overall assets of Separate Account I to provide for the risk that mortality and
expense costs may be greater than expected.
EXECUTIVE SELECT
3
<PAGE>
NET CASH SURRENDER VALUE - The Accumulation Value of the Policy on any Valuation
Date (including for this purpose, the date of Surrender), less any Outstanding
Policy Debt and any Accrued Expense Charges.
NET PREMIUM - Premium paid less the Percent of Premium Charge.
OUTSTANDING POLICY DEBT - The sum of all unpaid Policy loans and accrued
interest on Policy loans.
PERCENT OF PREMIUM CHARGE - The amount deducted from each premium received to
cover certain expenses such as premium-based taxes, expressed as a percentage of
the premium. (See the section on Deductions From Premium Payment.)
PLANNED PERIODIC PREMIUMS - A selected schedule of equal premiums payable at
fixed intervals. The Policy Owner is not required to follow this schedule, nor
does following this schedule ensure that the Policy will remain in force.
POLICY - The flexible premium variable universal life insurance Policy offered
by ANLIC and described in this prospectus.
POLICY ANNIVERSARY DATE - The same day as the Policy Date for each year the
Policy remains in force.
POLICY DATE - The effective date for all coverage provided in the application.
The Policy Date is used to determine Policy Anniversary Dates, Policy Years and
Monthly Activity Dates. Policy Anniversaries are measured from the Policy Date.
The Policy Date and the Issue Date will be the same unless: (1) an earlier
Policy Date is specifically requested, or (2) there are additional premiums or
application amendments at time of delivery. (See the section on Issuance of a
Policy.)
POLICY OWNER - ("you, your") The owner of the Policy, as designated in the
application or as subsequently changed. If a Policy has been absolutely
assigned, the assignee is the Policy Owner. A collateral assignee is not the
Policy Owner.
POLICY YEAR - The period from one Policy Anniversary Date until the next Policy
Anniversary Date. A "Policy Month" is measured from the same date in each
succeeding month as the Policy Date.
SATISFACTORY PROOF OF DEATH - Means all of the following must be submitted: (1)
A certified copy of the death certificate; (2) A Claimant Statement; (3) The
Policy; and (4) Any other information that ANLIC may reasonably require to
establish the validity of the claim.
SEPARATE ACCOUNT I- This term refers to Separate Account I, a separate
investment account established by ANLIC to receive and invest the Net Premiums
paid under the Policy and allocated by the Policy Owner to Separate Account I.
Separate Account I is segregated from the General Account and all other assets
of ANLIC.
SPECIFIED AMOUNT - The minimum Death Benefit under the Policy, as selected by
the Policy Owner.
SUBACCOUNT - A subdivision of the Separate Account I. Each Subaccount invests
exclusively in the shares of a specified portfolio of the Funds.
SURRENDER - The termination of the Policy during the Insured's life for the Net
Cash Surrender Value.
VALUATION DATE - Any day on which the New York Stock Exchange is open for
trading.
VALUATION PERIOD - The period between two successive Valuation Dates, commencing
at the close of the New York Stock Exchange ("NYSE") on one Valuation Date and
ending at the close of the NYSE on the next succeeding Valuation Date.
EXECUTIVE SELECT
4
<PAGE>
SUMMARY
The following summary of prospectus information and diagram of the Policy should
be read along with the detailed information found elsewhere in this prospectus.
Unless stated otherwise, this prospectus assumes that the Policy is in force and
that there is no Outstanding Policy Debt.
DIAGRAM OF POLICY
PREMIUM PAYMENTS
You can vary amount and frequency.
DEDUCTIONS FROM PREMIUMS
Percent of Premium Charge for Taxes - currently 3.0% (maximum 5.0%)
NET PREMIUM
The net premium may be invested in the Fixed Account or in Separate Account I
which offers 24 different Subaccounts. The Subaccounts invest in the
corresponding portfolios of The Alger American Fund, BT Insurance Funds Trust,
Calvert Variable Series, Inc., Fidelity Management & Research Company, Franklin
Templeton Variable Insurance Products Trust, Neuberger Berman Advisers
Management Trust, Oppenheimer Variable Account Funds, and Van Eck Worldwide
Insurance Trust Funds.
DEDUCTIONS FROM ASSETS
Monthly charge for Cost of Insurance and cost of any riders.
Monthly per Policy charge for administrative expenses:
CURRENT MAXIMUM
POLICY YEAR MONTHLY CHARGE MONTHLY CHARGE
----------- -------------- ---------------
1 $15.00 $15.00
2+ $ 7.00 $12.00
Monthly per $1000 charge for administrative expenses:
The first ten Policy Years, there is a monthly charge per $1000 of
initial Specified Amount. In addition, there is a monthly charge per
$1000 of each increase in Specified Amount for ten years from the date
of increase. The per $1000 rates for both the initial Specified Amount
and each increase vary by Issue Age, gender, and risk class. (See the
Policy Schedule for rates.)
Daily charge from the Subaccounts (not deducted from the Fixed Account):
CURRENT ANNUAL CHARGE MAXIMUM ANNUAL CHARGE
POLICY YEARS POLICY YEARS
1-15 16+ 1-15 16+
Mortality and Expense Risk Charge 0.75% 0.30% 0.95% 0.50%
Asset-Based Administrative
Expense Charge 0.15% 0.15% 0.15% 0.15%
----- ----- ----- -----
Combined annual rate of Subaccount
daily charges 0.90% 0.45% 1.10% 0.65%
Fund expense charges, which ranged from ___ to ___ at the most recent fiscal
year end, are also deducted. There is no surrender charge.
LIVING BENEFITS
You may make partial withdrawals, subject to certain restrictions. The Death
Benefit will be reduced by the amount of the partial withdrawal. ANLIC
guarantees up to 15 free transfers between the Investment Options each Policy
Year. After that, a $10 charge may be made for each transfer. Under current
practice, unlimited free transfers are permitted. You may Surrender the Policy
at any time for its Net Cash Surrender Value.
RETIREMENT INCOME BENEFITS
Loans may be available on a more favorable interest rate basis after the tenth
Policy Year. Should the Policy lapse while loans are outstanding, the portion of
the loan attributable to earnings will become a taxable distribution. (See page
24.) You may Surrender the Policy or make a partial withdrawal and take values
as payments under one or more of five different payment options.
DEATH BENEFITS
Generally, Death Benefit income is tax free to the Beneficiary. The Beneficiary
may be paid a lump sum or may select any of the five payment methods available
as retirement benefits.
EXECUTIVE SELECT
5
<PAGE>
SUMMARY
The following summary is intended to highlight the most important features of an
Executive Select Policy that you, as a prospective Policy Owner, should
consider. You will find more detailed information in the main portion of the
prospectus; cross-references are provided for your convenience. Capitalized
terms are defined in the Definitions section that begins on page 3 of this
prospectus. This summary and all other parts of this prospectus are qualified in
their entirety by the terms of the Executive Select Policy, which is available
upon request from ANLIC.
WHO IS THE ISSUER OF AN EXECUTIVE SELECT POLICY?
ANLIC is the issuer of each Executive Select Policy. ANLIC enjoys a rating of A
(Excellent) from A.M. Best Company, a firm that analyzes insurance carriers. A
stock life insurance company organized in Virginia, ANLIC is a wholly owned
subsidiary of Acacia Life Insurance Company which is, in turn, a second tier
subsidiary of Ameritas Acacia Mutual Holding Company. (See the section on Acacia
National Life Insurance Company.)
WHAT IS THE PRIMARY PURPOSE OF PURCHASING AN EXECUTIVE SELECT POLICY?
The primary purpose of an Executive Select Policy is to serve as an informal
funding vehicle for various executive benefit arrangements. These arrangements
typically focus on one or more financial objectives, which can be met by the
following characteristics of the Executive Select Policy:
o payment of a Death Benefit, which will never be less than the Specified
Amount the Policy Owner selects (See the section on Death Benefit Options.)
o accessability of Policy values through Policy loan, Surrender and
withdrawal features (See the section on Policy Rights.)
o ability to direct the manner in which the net premiums will be invested. So
long as the Policy is in force, the Policy Owner will be responsible for
selecting the manner in which Net Premiums will be invested. Thus, the
value of an Executive Select Policy will reflect your investment choices
over the life of the Policy.
An Executive Select Policy also includes an investment component. This means
that, so long as the Policy is in force, you will be responsible for selecting
the manner in which Net Premiums will be invested. Thus, the value of an
Executive Select Policy will reflect your investment choices over the life of
the Policy.
HOW DOES THE INVESTMENT COMPONENT OF THE EXECUTIVE SELECT POLICY WORK?
ANLIC has established Separate Account I, which is separate from all other
assets of ANLIC, as a vehicle to receive and invest premiums received from
Executive Select Policy Owners and owners of certain other variable universal
life products offered by ANLIC. Separate Account I is divided into separate
Subaccounts. Each Subaccount invests exclusively in shares of one of the
investment portfolios available through Executive Select. Each Policy Owner may
allocate Net Premiums to one or more Subaccounts, or to ANLIC's Fixed Account in
the initial application. These allocations may be changed, without charge, by
notifying ANLIC's Administrative Office. The aggregate value of your interests
in the Subaccounts, the Fixed Account and any amount held in the General Account
to secure Policy debt will represent the Accumulation Value of your Executive
Select Policy. (See the Section on Accumulation Value.)
WHAT INVESTMENT OPTIONS ARE AVAILABLE THROUGH THE EXECUTIVE SELECT POLICY?
The Investment Options available through Executive Select include 24 investment
portfolios, each of which is a separate series of a mutual fund from: The Alger
American Fund ("Alger American Fund"); BT Insurance Funds Trust ("Bankers
Trust"); Calvert Variable Series, Inc. ("Calvert"); Fidelity Management &
Research Company ("Fidelity"); Franklin Templeton Variable Insurance Products
Trust ("FTVIP"); Neuberger Berman Advisers Management Trust (Neuberger Berman");
Oppenheimer Variable Account Funds ("Oppenheimer"); and Van Eck Worldwide
Insurance Trust ("Van Eck"). These portfolios are:
Alger American Growth Portfolio
Alger American MidCap Growth Portfolio
Alger American Small Capitalization Portfolio
Bankers Trust Equity 500 Index Fund
Bankers Trust Small Cap Index Fund
Bankers Trust EAFE(R) Equity Index Fund
EXECUTIVE SELECT
6
<PAGE>
Calvert Social Money Market Portfolio
Calvert Social Small Cap Growth Portfolio
Calvert Social Mid Cap Growth Portfolio
Calvert Social International Equity Portfolio
Calvert Social Balanced Portfolio
Fidelity VIP Equity-Income: Service Class II
Fidelity VIP High Income: Service Class II
Fidelity VIP II Contrafund (R): Service Class II
Templeton Asset Strategy Fund - Class 2
Templeton International Securities Fund - Class 2
Neuberger Berman Advisers Management Trust Limited Maturity Bond Portfolio
Neuberger Berman Advisers Management Trust Growth Portfolio
Neuberger Berman Advisers Management Trust Partners Portfolio
Oppenheimer Aggressive Growth Fund/VA
Oppenheimer Capital Appreciation Fund/VA
Oppenheimer Main Street Growth & Income Fund/VA
Oppenheimer High Income Fund/VA
Oppenheimer Strategic Bond Fund/VA
Van Eck Worldwide Hard Assets Fund
Details about the investment objectives and policies of each of the available
investment portfolios and management fees and expenses appear in the sections on
Investment Objectives and Policies of the Funds' Portfolios and Fund Expense
Summary. In addition to the listed portfolios, you may also elect to allocate
Net Premiums to ANLIC's Fixed Account. (See the section on the Fixed Account.)
HOW DOES THE LIFE INSURANCE COMPONENT OF AN EXECUTIVE SELECT POLICY WORK?
An Executive Select Policy provides for the payment of a minimum Death Benefit
upon the death of the Insured. The amount of the minimum Death Benefit --
sometimes referred to as the Specified Amount of the Executive Select Policy --
is chosen by you at the time your Executive Select Policy is established.
However, Death Benefit Proceeds -- the actual amount that will be paid after
ANLIC receives Satisfactory Proof of Death -- may vary over the life of your
Executive Select Policy, depending on which of the two available coverage
options you select.
If you choose Option A, Death Benefit Proceeds payable under your Executive
Select Policy will be the Specified Amount of your Executive Select Policy OR
the applicable percentage of its Accumulation Value, whichever is greater. If
you choose Option B, Death Benefit Proceeds payable under your Executive Select
Policy will be the Specified Amount of your Executive Select Policy PLUS the
Accumulation Value of your Executive Select Policy, or if it is higher, the
applicable percentage of the Accumulation Value on the date of death. In either
case, the applicable percentage is based on the age of the Insured at the date
of death. (See the section on Death Benefit Options.)
ARE THERE ANY RISKS INVOLVED IN OWNING AN EXECUTIVE SELECT POLICY?
Yes. Over the life of the Executive Select Policy, the Subaccounts to which you
allocate your premiums will fluctuate with changes in the stock market and
overall economic factors. These fluctuations will be reflected in the
Accumulation Value of your Executive Select Policy and may result in loss of
principal. For this reason, the purchase of an Executive Select Policy may not
be suitable for all businesses. It may not be advantageous to purchase an
Executive Select Policy to replace or augment your existing insurance
arrangements. Appendix A includes tables illustrating the impact that
hypothetical market returns would have on Accumulation Values under a Executive
Select Policy (page A-1).
WHAT IS THE PREMIUM THAT MUST BE PAID TO KEEP AN EXECUTIVE SELECT POLICY IN
FORCE?
Like traditional life insurance policies, an Executive Select Policy requires
the payment of periodic premiums in order to keep the Policy in force. You will
be asked to establish a payment schedule before an Executive Select Policy
becomes effective.
The distinction between traditional life policies and an Executive Select Policy
is that an Executive Select Policy will not lapse simply because premium
payments are not made according to that payment schedule. However, an Executive
Select Policy will lapse, even if scheduled premium payments are made, if the
Net Cash Surrender Value of your Executive Select Policy falls below zero. (See
the section on Premiums.)
HOW ARE PREMIUMS PAID, PROCESSED AND CREDITED?
An Executive Select Policy will be issued after a completed application is
accepted, and the initial premium payment is received, by ANLIC at its
Administrative Office. ANLIC's Administrative Office is located at 5900 "O"
EXECUTIVE SELECT
7
<PAGE>
Street, P.O. Box 82550, Lincoln, NE 68501. The initial Net Premium will be
allocated on the Issue Date to the Subaccounts and/or the Fixed Account
according to the selections made in the application. When state or other
applicable law or regulation requires return of at least the premium payments,
should you return the Policy under the free-look privilege, the initial Net
Premium will be allocated to the Money Market Subaccount. Thirteen days after
the Issue Date, the Accumulation Value of the Policy will be allocated among the
Subaccounts and/or the Fixed Account according to the instructions in the
application. You have the right to examine the Executive Select Policy and
return it for a refund for a limited time, even after the Issue Date. (See the
section on Issuance of a Policy.)
You may make subsequent premium payments, although you are not required to do
so. ANLIC will send premium payment notices to you according to any schedule you
select. When ANLIC receives a premium payment at its Administrative Office, we
will deduct any applicable Percent of Premium Charge and allocate the Net
Premium to the Subaccounts and/or the Fixed Account according to your
selections. ( See the sections on Premiums and Allocations of Premiums and
Accumulation Value.)
As already noted, Executive Select provides considerable flexibility in
determining the frequency and amount of premium payments. This flexibility is
not, however, unlimited. You should keep certain factors in mind in determining
the payment schedule that is best suited to your needs. These include the Cost
of Insurance needed to keep the Executive Select Policy in force; maximum
premium limitations established under the federal tax laws; and the impact that
reduced premium payments may have on the Net Cash Surrender Value of the
Executive Select Policy. (See the Section on Premiums.)
IS THE ACCUMULATION VALUE OF THE EXECUTIVE SELECT POLICY AVAILABLE WITHOUT
SURRENDER?
Yes. You may access the value of your Executive Select Policy in one of two
ways. After the first Policy Year, you may obtain a loan, secured by the
Accumulation Value of your Executive Select Policy. The maximum interest rate on
any such loan is 6% annually; the current rate is 5.5% annually. After the tenth
Policy Anniversary, you may borrow against a limited amount of the Net Cash
Surrender Value of your Executive Select Policy at a maximum annual interest
rate of 4%; the current rate for such loans is 3.5% annually. (See the section
on Loan Benefits.)
You may also access the value of your Executive Select Policy by making a
partial withdrawal. A partial withdrawal is subject to a maximum charge not to
exceed the lesser of $50 or 2% of the amount withdrawn (currently, the partial
withdrawal charge is the lesser of $25 or 2%). (See the section on Partial
Withdrawals.)
ARE THERE ANY OTHER CHARGES ASSOCIATED WITH OWNERSHIP OF AN EXECUTIVE SELECT
POLICY?
Certain states impose premium and other taxes in connection with insurance
policies such as Executive Select. ANLIC may deduct up to 5.0% of each premium
as a Percent of Premium Charge. Currently, the charge is 3.0%.
Charges are deducted against the Accumulation Value to cover the Cost of
Insurance under the Policy and to compensate ANLIC for administering each
individual Executive Select Policy. These charges, which are part of the Monthly
Deduction, are calculated and deducted on each Monthly Activity Date. The Cost
of Insurance is calculated based on risk factors relating to the INSURED as
reflected in relevant actuarial tables. The monthly deduction also includes an
Administrative Expense Charge based on the Specified Amount and the Policy
duration. Currently, the per Policy charge is $15 per month in the first Policy
Year and $7 per month thereafter. The per Policy portion of the Administrative
Expense Charge is levied throughout the life of the Policy and is guaranteed not
to increase above $15 per month in the first Policy Year and $12 per month
thereafter. During the first ten Policy Years, there is a monthly charge per
$1000 of initial Specified Amount. In addition, there is a monthly charge per
$1000 of each increase in Specified Amount for ten years from the date of
increase. The per $1000 rates for both the initial Specified Amount and each
increase vary by Issue Age, gender, and risk class. The current charge per $1000
is the same as the maximum charge. (See the section on Charges from the
Accumulation Value.)
For its services in administering Separate Account I and SubaccountS and as
compensation for bearing certain mortality and expense risks, ANLIC is also
entitled to receive fees. These fees are calculated and deducted daily during
the first 15 Policy Years, at a combined current annual rate of 0.90% (maximum
1.10%) of the value of the net assets of Separate Account I. After the 15th
Policy Anniversary Date, the combined current annual rate will decrease to 0.45%
(maximum 0.65%) of the daily net assets of Separate Account I. These charges
will not be deducted from the amounts in the Fixed Account. (See the section on
Daily Charges Against the Separate Account.)
Policy Owners who choose to allocate Net Premiums to one or more of the
Subaccounts will also bear a pro rata share of the management fees and expenses
paid by each of the investment portfolios in which the various SubaccountS
invest. No such management fees are assessed against Net Premiums allocated to
the Fixed Account. (See the section on Fund Expense Summary.)
WHEN DOES THE EXECUTIVE SELECT POLICY TERMINATE?
You may terminate the Executive Select Policy by Surrendering the Policy during
the lifetime of the Insured for its Net Cash Surrender Value. If you surrender
the Policy in the first two Policy Years, we will refund a portion of the
EXECUTIVE SELECT
8
<PAGE>
Percent of Premium Charge deducted in the first Policy Year. As noted above, the
Executive Select Policy will terminate if you fail to maintain sufficient Net
Cash Surrender Value to cover Policy charges. (See the sections on Surrenders
and Premiums.)
YEAR 2000
Like other insurance companies and their separate accounts, ANLIC and Separate
Account I could be adversely affected if the computer systems they rely upon do
not properly process date-related information and data involving the years 2000
and after. This issue arose because both mainframe and PC-based computer
hardware and software have traditionally used two digits to identify the year.
For example, the year 1998 is input, stored and calculated as "98." Similarly,
the year 2000 would be input, stored and calculated as "00." If computers assume
this means 1900, it could cause errors in calculations, comparisons, and other
computing functions.
Like all insurance companies, ANLIC makes extensive use of dates and date
calculations. We began a corporate-wide Year 2000 (Y2K) project in mid-1997. Our
goal is to ensure that our computer systems continue to operate smoothly with no
service disruptions before, during or after the year 2000.
As of January 15, 2000, ANLIC has experienced no known Y2K problems. All of our
computer application and operating systems had been updated for the year 2000 by
July 31, 1999. Continuous testing and monitoring throughout the remainder of
1999 helped ANLIC continue to meet our contractual and service obligations to
our customers. In addition to our internal efforts, ANLIC is working closely
with vendors and other business partners to confirm that they too are addressing
Y2K issues on a timely basis. In the event we or our service providers, vendors,
financial institutions or others with which we conduct business, fail to be Y2K
- - compliant, there would be a materially adverse effect on us.
Certain vendors and/or business partners, due to their exposure to foreign
markets, may face additional Y2K issues. Please see the Funds' prospectuses for
information on the Funds' preparedness for Y2K.
ANLIC, THE SEPARATE ACCOUNT AND THE FUNDS
ACACIA NATIONAL LIFE INSURANCE COMPANY
Acacia National Life Insurance Company ("ANLIC") is a stock life insurance
company organized in the Commonwealth of Virginia. ANLIC was incorporated on
December 9, 1974. ANLIC is currently licensed to sell life insurance in 46
states and the District of Columbia.
ANLIC is a wholly owned subsidiary of Acacia Life Insurance Company ("Acacia"),
a District of Columbia stock company. Acacia is wholly owned by Ameritas Holding
Company, a subsidiary of Ameritas Acacia Mutual Holding Company, a Nebraska
mutual insurance holding company. The Administrative Offices of both ANLIC and
Acacia are at 5900 "O" Street, P.O. Box 81889, Lincoln, Nebraska 68501. ANLIC's
telephone number is 888-837- 6791 and its website address is
www.acaciagroup.com.
On January 1, 1999, Ameritas Mutual Insurance Holding Company, a Nebraska mutual
insurance holding company and Acacia Mutual Insurance Holding Company, a
District of Columbia mutual holding corporation merged and became Ameritas
Acacia Mutual Holding Company ("Ameritas Acacia") a Nebraska mutual insurance
holding company. Both Ameritas Acacia and Ameritas Holding Company, an
intermediate holding company, are organized under the Nebraska Mutual Insurance
Holding Company Act. Ameritas Acacia and its subsidiaries had total assets at
December 31, 1999 of over $____ billion and Acacia and its subsidiaries had
total assets as of December 31, 1999 of $____ billion.
THE SEPARATE ACCOUNT
Acacia National Life Insurance Company Separate Account I ("Separate Account I")
was established under Virginia law on January 31, 1995. The assets of Separate
Account I are held by ANLIC segregated from all of ANLIC's other assets, are not
chargeable with liabilities arising out of any other business which ANLIC may
conduct, and income, gains, or losses of ANLIC. Although the assets maintained
in Separate Account I will not be charged with any liabilities arising out of
ANLIC's other business, all obligations arising under the Policies are
liabilities of ANLIC who will maintain assets in Separate Account I of a total
market value at least equal to the reserve and other contract liabilities of
Separate Account I. Separate Account I will at all times contain assets equal to
or greater than Accumulation Values invested in Separate Account I.
Nevertheless, to the extent assets in Separate Account I exceed ANLIC's
liabilities in Separate Account I, the assets are available to cover the
liabilities of ANLIC's General Account. ANLIC may, from time to time, withdraw
assets available to cover the General Account obligations.
EXECUTIVE SELECT
9
<PAGE>
Separate Account I is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940 ("1940 Act") as a unit
investment trust, which is a type of investment company. This does not involve
any SEC supervision of the management or investment policies or practices of
Separate Account I. For state law purposes, Separate Account I is treated as a
Division of ANLIC.
PERFORMANCE INFORMATION
Performance information for the Subaccounts of Separate Account I and the Funds
available for investment by Separate Account I may appear in advertisements,
sales literature, or reports to Policy Owners or prospective purchasers. ANLIC
may also provide a hypothetical illustration of Accumulation Value, Net Cash
Surrender Value and Death Benefit based on historical investment returns of the
Funds for a sample Policy based on assumptions as to age, gender and other
Policy specific assumptions.
ANLIC may also provide individualized hypothetical illustrations of Accumulation
Value, Net Cash Surrender Value and Death Benefit based on historical investment
returns of the Funds. These illustrations will reflect deductions for Fund
expenses and Policy and Separate Account I charges, including the Monthly
Deduction and Percent of Premium Charge. These hypothetical illustrations will
be based on the actual historical experience of the Funds as if the Subaccounts
had been in existence and a Policy issued for the same periods as those
indicated for the Funds.
THE FUNDS
There are currently 24 Subaccounts within Separate Account I available to Policy
Owners for new allocations. The assets of each Subaccount are invested in shares
of a corresponding portfolio of one of the following mutual Funds (collectively,
the "Funds"): The Alger American Fund; BT Insurance Funds Trust; Calvert
Variable Series, Inc.; Fidelity Management & Research Company; Franklin
Templeton Variable Insurance Products Trust; Neuberger Berman Advisers
Management Trust; Oppenheimer Variable Account Fund; and Van Eck Worldwide
Insurance Trust. Each Fund is registered with the SEC under the Investment
Company Act of 1940 as an open-end management investment company.
The assets of each portfolio of the Funds are held separate from the assets of
the other portfolios. Thus, each portfolio operates as a separate investment
portfolio, and the income or losses of one portfolio generally have no effect on
the investment performance of any other portfolio.
The investment objectives and policies of each portfolio are summarized below.
There is no assurance that any of the portfolios will achieve their stated
objectives. More detailed information, including a description of investment
objectives, policies, restrictions, expenses and risks, is in the prospectuses
for each of the Funds, which must accompany or precede this Prospectus. All
underlying fund information, including Fund prospectuses, has been provided to
ANLIC by the underlying Funds. ANLIC has not independently verified this
information. One or more of the Portfolios may employ investment techniques that
involve certain risks, including investing in non-investment grade, high risk
debt securities, entering into repurchase agreements and reverse repurchase
agreements, lending portfolio securities, hedging instruments, interest rate
swaps, engaging in "short sales against the box," investing in instruments
issued by foreign banks, entering into firm commitment agreements and investing
in warrants and restricted securities. For example, the Calvert Social Balanced
Portfolio may invest up to 20% of its assets in non-investment grade
obligations, commonly referred to as "junk bonds". Oppenheimer High Income
Fund/VA may also invest in "junk bonds". In addition, certain of the portfolios
may invest in securities of foreign issuers, such as the Calvert Variable
Series, Inc. MidCap Portfolio which may invest up to 25% of its funds in foreign
securities.
Other portfolios invest primarily in the securities markets of developing
nations. Investments of this type involve different risks than investments in
more established economies, and will be affected by greater volatility of
currency exchange rates and overall economic and political factors. Such
portfolios include the Calvert Variable Series, Inc. Social International Equity
Portfolio, and Van Eck Worldwide Hard Assets Fund Portfolio. The Van Eck
Worldwide Hard Assets Fund will also invest at least 25% of its total assets in
"Hard Assets" including precious metals, ferrous and non-ferrous metals, gas,
petroleum, petrochemicals or other hydrocarbons, forest products, real estate
and other basic non-agricultural commodities. It may invest up to 50% of its
assets in any one of these sectors. Therefore it may be subject to greater risks
and market fluctuations than other investment companies with more diversified
portfolios. Further information about the risks associated with investments in
each of the Funds
EXECUTIVE SELECT
10
<PAGE>
and their respective portfolios is contained in the prospectus relating to that
Fund. These prospectuses, together with this prospectus, should be read
carefully and retained.
The investments in the Funds may be managed by Fund managers which manage one or
more other mutual funds that have similar names, investment objectives, and
investment styles as the Funds. You should be aware that the Funds are likely to
differ from the other mutual funds in size, cash flow pattern, and tax matters.
Thus, the holdings and performance of the Funds can be expected to vary from
those of the other mutual funds.
You should periodically consider the allocation among the Subaccounts in light
of current market conditions and the investment risks attendant to investing in
the Funds' various portfolios.
Separate Account I will purchase and redeem shares from the portfolios at the
net asset value. Shares will be redeemed to the extent necessary for ANLIC to
collect charges, pay the Net Cash Surrender Values, partial withdrawals, and
make policy loans or to transfer assets among Investment Options as you
requested. Any dividend or capital gain distribution received is automatically
reinvested in the corresponding Subaccount.
Since each of the Funds is designed to provide investment vehicles for variable
annuity and variable life insurance contracts of various insurance companies and
will be sold to separate accounts of other insurance companies as investment
vehicles for various types of variable life insurance policies and variable
annuity contracts, there is a possibility that a material conflict may arise
between the interests of Separate Account I and one or more of the separate
accounts of another participating insurance company. In the event of a material
conflict, the affected insurance companies agree to take any necessary steps,
including removing their separate account from the Funds, to resolve the matter.
The risks of such mixed and shared funding are described further in the
prospectuses of the Funds.
<TABLE>
<CAPTION>
INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS' PORTFOLIOS
ALGER
AMERICAN
FUNDS
PORTFOLIO INVESTMENT POLICIES OBJECTIVE
<S> <C> <C>
Alger American Invests in equity securities, such as common or preferred Seeks to provide long-
Growth Portfolio stocks, or securities convertible into or exchangeable for term capital appreciation.
equity securities, including warrants and rights,
primarily of companies with total market capitalization
of $1 billion or greater.
Alger American Invests in equity securities, such as common or preferred Seeks to provide long-
MidCap Growth stocks, or securities convertible into or exchangeable for term capital appreciation.
Portfolio equity securities, including warrants and rights. Except
during temporary defensive period, the Portfolio invests
at least 65% of its total assets in equity securities,
of companies that, at the time of purchase of the
securities, have total market capitalization within the
range of companies included in the S & P MidCap 400
index.
Alger American Invests in equity securities, such as common or preferred Seeks to provide long-
Small stocks, or securities convertible into or exchangeable for term capital appreciation.
Capitalization equity securities, including warrants and rights. Except
Portfolio during temporary defensive period, the Portfolio invests at
least 65% of its total assets in equity securities, of
companies that, at the time of purchase of the
securities, have total market capitalization within the
range of companies included in the Russell 2000 Growth
Index.
EXECUTIVE SELECT
11
<PAGE>
CALVERT
Calvert Social CVS Social Money Market invest in high quality, money CVS Social Money
Money Market market instruments, such as commercial paper, variable rate Market seeks to provide
Portfolio demand notes, corporate, agency and taxable municipal current income by
obligations. All investments must comply with the SEC investing in enterprises
money market fund requirements. The Portfolio invests with that make a significant
the philosophy that long-term rewards to investors will come contribution to society
from those organizations whose products, services, and through their products
methods enhance the human condition and the traditional and services and through
American values of individual initiative, equality of the way they do business.
opportunity and cooperative effort. Investments are
selected on the basis of their ability to contribute to
the dual objectives of financial soundness and social
criteria.
Calvert Social At least 65% of CVS Social Small Cap Growth's assets will CVS Social Small Cap
Small Cap Growth be invested in the common stocks of small-cap companies. Growth seeks to provide
Portfolio Returns in the Portfolio will be mostly from the changes in long-term capital
the price of the Portfolio's holdings (capital appreciation). appreciation by investing
The Portfolio currently defines small-cap companies as those primarily in equity
with market capitalization of $1 billion or less at the time securities of companies
the Portfolio initially invests. The Portfolio invests with the that have small market
philosophy that long-term rewards to investors will come capitalizations. This
from those organizations whose products, services, and objective may be changed
methods enhance the human condition and the traditional by the Fund's Board of
American values of individual initiative, equality of Directors without
opportunity and cooperative effort. Investments are selected shareholder approval.
on the basis of their ability to contribute to the dual
objectives of financial soundness and social criteria.
EXECUTIVE SELECT
12
<PAGE>
Calvert Social Mid Investments are primarily in the common stocks of mid-size CVS Social Mid Cap
Cap Growth companies. Returns in the Portfolio will be mostly from the Growth seeks to provide
Portfolio changes in the price of the Portfolio's holdings (capital long-term capital
appreciation.) CVS Social Mid Cap Growth currently defines appreciation by investing
mid-cap companies as those within the range of market primarily in a
capitalizations of the S&P's Mid-Cap 400 Index. Most nondiversified portfolio
companies in the Index have a capitalization of $500 million of the equity securities of
to $10 billion. Stocks chosen for the Portfolio combine mid-sized companies that
growth and value characteristics or offer the opportunity to are undervalued but
buy growth at a reasonable price. The Subadvisor favors demonstrate a potential
companies which have an above market average prospective for growth. This
growth rate, but sell at below market average valuations. The objective may be changed
Subadvisor evaluates each stock in terms of its growth by the Portfolio's Board
potential, the return for risk free investments, and the risk of directors without
and reward potential for the company to determine a reasonable shareholder approval.
price for the stock. The Portfolio invests with the philosophy
that long-term rewards to investors will come from thos
organizations whose products, services, and methods enhance
the human condition and the traditional American values of
individual initiative, equality of opportunity and cooperative
effort. Investments are selected on the basis of their ability to
contribute to the dual objectives of financial soundness
and social criteria.
Calvert Social CVS Social International Equity invests primarily in the CVS Social International
International common stocks of mid- to large- cap companies using a value Equity seeks to provide a
Equity Portfolio approach. The Portfolio identifies those countries with high total return
markets and economies that it believes currently provide the consistent with
most favorable climate for investing. The Subadvisor selects reasonable risk by
countries based on a "20 questions" model which uses macro- investing primarily in a
and micro-economic inputs to rank the attractiveness of globally diversified
market in various countries. Within each country, the portfolio for equity
Subadvisor used valuation techniques that have been shown securities.
to best determine value within that market. In some
countries, the valuation process may favor the
comparison of price-to-cash flow while in other
countries, price-to-sales or price-to-book may be more
useful in determining which stocks are undervalued. The
Portfolio invests primarily in more developed economies
and markets. No mor that 5% of Portfolio assets are
invested in the U. S. The Portfolio invests with the
philosophy that long-term rewards to investors will come
from those organizations whose products, services, and
methods enhance the human condition and the traditional
American values of individual initiative, equality of
opportunity and cooperative effort. Investments are
selected on the basis of their ability to contribute to
the dual objectives of financial soundness and social
criteria.
EXECUTIVE SELECT
13
<PAGE>
Calvert Social An actively managed portfolio of stocks, bonds and money Seeks to achieve a total
Balanced Portfolio market instruments (including repurchase agreements secured return above the rate of
by such instruments) selected with a concern for the inflation.
investment and social impact of each investment. The
Portfolio invests with the philosophy that long-term rewards
to investors will come from those organizations whose
products, services, and methods enhance the human condition
and the traditional American values of individual initiative,
equality of opportunity and cooperative effort. Investments
are selected on the basis of their ability to contribute to the
dual objectives of financial soundness and social criteria.
BANKERS
TRUST
Equity 500 Index The Fund will invest primarily in common stocks of Seeks to match, before
Fund companies that comprise the S&P 500 Index, which expenses, the risk and
emphasizes stocks of large U.S. companies. The Fund may return characteristics of
also use stock index futures and options. the Standard and Poor's
500 Composite Stock
Price ("S&P 500 Index").
Small Cap Index The Fund will invest primarily in common stocks of Seeks to match, before
Fund companies that comprise the Russell 2000 Index, which expenses, the risk and
emphasizes stocks of small U.S. companies. The Fund may return characteristics of
also use stock index futures and options. the Russell 2000 Small
Stock Index ("Russell
2000 Index").
EAFE(R) Equity The Fund will invest primarily in common stocks of Seeks to match, before
Index Fund companies that comprise the EAFE(R) Index, which expenses, the risk and
emphasizes stocks of companies in major markets in Europe, return characteristics of
Australia and the Far East. The Fund may also use stock the Morgan Stanley
index futures and options. Capital International
EAFE(R) Index ("EAFE(R)
Index").
FIDELITY
VIP Equity- Investing at least 65% in income-producing equity securities, Seeks reasonable income.
Income: which tens to lead to investments in large cap "value" stocks. Will also consider the
Service Class II potential for capital
appreciation. Seeks a
yield which exceeds the
composite yield on the
securities comprising the
Standard & Poor's 500.
VIP High Income: Investing at least 65% of total assets in income-producing Seeks a high level of
Service Class II debt securities, preferred stocks and convertible securities, current income while also
with an emphasis on lower-quality debt securities. considering growth of
capital.
EXECUTIVE SELECT
14
<PAGE>
VIP II Contrafund: Investing primarily in common stocks. Investing in securities Seeks long-term capital
Service Class II of companies whose value it believes is not fully recognized appreciation.
by the public.
FTVIP
Templeton Asset The fund will invest in equity securities of companies of any High total return.
Strategy nation, debt securities of companies and governments of any
nation, and in money market instruments.
Templeton The fund will invest in the equity securities of companies Long-term capital
International located outside the U. S., including emerging markets. growth.
Securities
NEUBERGER
BERMAN
Limited Maturity The Portfolio will invest in a diversified portfolio of fixed Seeks to provide the
Bond Fund and variable debt securities and seeks to increase income and highest current income
preserve or enhance total return by actively managing consistent with low risk
average portfolio maturity in light of market conditions and to principal and liquidity.
trends.
Growth Portfolio The Portfolio invests in securities believed to have the Seeks capital appreciation
maximum potential for long term capital appreciation. It without regard to income.
does not seek to invest in securities that pay dividends or
interest, and such income is incidental.
Partners Portfolio Principal series investments are common stocks of mid- Seeks capital growth.
to large-cap companies.
OPPENHEIMER
Oppenheimer The Portfolio will invest in securities of companies believed Seeks to achieve capital
Aggressive to have relatively favorable long-term prospects for appreciation, by investing
Growth Fund/VA increasing demand for their goods or services, or to be in "growth-type"
developing new products, services or markets, and normally companies.
retain a relatively larger portion of their earnings for research,
development and investment in capital assets.
Oppenheimer The Portfolio will emphasize investments in securities of Seeks capital appreciation
Capital well-known and established companies. Such securities by investing in securities
Appreciation generally have a history of earnings and dividends and are of well known established
Fund/VA issued by seasoned companies. companies.
Oppenheimer Its equity investments will include common stocks, preferred Seeks a high total return
Main Street stocks, convertible securities and warrants. Its debt securities (which includes growth in
Growth & Income will include bonds, participation interests, asset-backed the value of its shares as
Fund/VA securities, private label mortgage backed securities and well as current income)
collateralized mortgage obligations, zero coupon securities from equity and debt
and U.S. obligations. securities.
EXECUTIVE SELECT
15
<PAGE>
Oppenheimer High Investments in high yield fixed-income securities Seeks a high level of current
Income Fund/VA (including long-term debt and preferred stock issues, income.
including convertible securities) believed by the
Manager not to involve undue risk. Fund will assume
certain risks in seeking high yield including
securities in the lower ratings categories, commonly
known as "junk bonds".
Oppenheimer Income is principally derived from interest on debt Seeks a high level of current
Strategic Bond securities and the Fund seeks to enhance such income by income by investing primarily in
Fund/VA writing covered call options on debt securities. The Fund a diversified portfolio of high
intends to invest primarily in (i) foreign government and yield fixed-income securities.
corporate debt securities (ii) U.S. Government Securities,
and (iii) lower-rated high yield domestic debt securities,
commonly known as junk bonds.
VAN ECK
Worldwide Hard The Worldwide Hard Assets Fund must invest at least 25% Seeks long-term capital
Assets Fund of its total assets in "Hard Assets" including precious appreciation by investing
metals, ferrous and non-ferrous metals, gas, petroleum, globally, primarily in "Hard
petrochemicals or other hydrocarbons, forest products, real Assets" securities. Income is a
estate and other basic non-agricultural commodities. An secondary consideration.
additional but not fundamental policy, it may invest up to
50% of its assets in any one of these sectors.
</TABLE>
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
ANLIC reserves the right, subject to applicable law, to add, delete, combine or
substitute investments in Separate Account I if, in our judgment, marketing
needs, tax considerations, or investment conditions warrant. This may happen due
to a change in law or a change in a Fund's objectives or restrictions, or for
some other reason. ANLIC may operate Separate Account I as a management company
under the 1940 Act, it may be deregistered under that Act if registration is no
longer required, or it may be combined with other ANLIC separate accounts. ANLIC
may also transfer the assets of Separate Account I to another separate account.
If necessary, we will notify the SEC and/or state insurance authorities and will
obtain any required approvals before making these changes.
If any changes are made, ANLIC may, by appropriate endorsement, change the
Policy to reflect the changes. In addition, ANLIC may, when permitted by law,
restrict or eliminate any voting rights of Policy Owners or other persons who
have voting rights as to Separate Account I. ANLIC will determine the basis for
making any new Subaccounts available to existing Policy Owners.
You will be notified of any material change in the investment policy of any Fund
in which you have an interest.
FIXED ACCOUNT
You may elect to allocate all or a portion of your Net Premium payments to the
Fixed Account, and you may also transfer monies between Separate Account I and
the Fixed Account. (See the section on Transfers.)
Payments allocated to the Fixed Account and transferred from Separate Account I
to the Fixed Account are placed in ANLIC's General Account. The General Account
includes all of ANLIC's assets, except those assets segregated in ANLIC's
separate accounts. ANLIC has the sole discretion to invest the assets of the
General Account, subject to applicable law. ANLIC bears an investment risk for
all amounts allocated or transferred to the Fixed Account, plus interest
credited thereto, less any deduction for charges and expenses. The Policy Owner
bears the investment risk that the declared rate, described below, will fall to
a lower rate after the expiration of a declared rate period.
EXECUTIVE SELECT
16
<PAGE>
Because of exemptions and exclusionary provisions, interests in the General
Account have not been registered under the Securities Act of 1933 (the "1933
Act"), nor is the General Account registered as an investment company under the
Investment Company Act of 1940. Accordingly, neither the General Account nor any
interest in it is generally subject to the provisions of the 1933 or 1940 Act.
We understand that the staff of the SEC has not reviewed the disclosures in this
prospectus relating to the Fixed Account portion of the Policy; however, these
disclosures may be subject to generally applicable provisions of the federal
securities laws regarding the accuracy and completeness of statements made in
prospectuses.
ANLIC guarantees that it will credit interest at a declared rate of at least
3.5%. ANLIC may, at its discretion, set a higher declared rate(s). Each month
ANLIC will establish the declared rate for the Policies with a Policy Date or
Policy Anniversary Date in that month. Each month is assumed to have 30 days,
and each year to have 360 days for purposes of crediting interest on the Fixed
Account. The Policy Owner will earn interest on the amounts transferred or
allocated to the Fixed Account at the declared rate effective for the month in
which the Policy was issued, which rate is guaranteed for the remainder of the
first Policy Year. During later Policy Years, all amounts in the Fixed Account
will earn interest at the declared rate in effect in the month of the last
Policy Anniversary. Declared interest rates may increase or decrease from
previous periods, but will not fall below 3.5%. ANLIC reserves the right to
change the declaration practice and the period for which a declared rate will
apply.
POLICY BENEFITS
The rights and benefits under the Policy are summarized in this prospectus;
however prospectus disclosure regarding the Policy is qualified in its entirety
by the Policy itself, a copy of which is available upon request from ANLIC.
PURPOSES OF THE POLICY
The Policy is designed to provide the Policy Owner with both lifetime insurance
protection on the life of the Insured and flexibility in the amount and
frequency of premium payments and with the level of life insurance proceeds
payable under the Policy.
You are not required to pay scheduled premiums to keep the Policy in force, but
you may, subject to certain limitations, vary the frequency and amount of
premium payments. You also may adjust the level of Death Benefits payable under
the Policy without having to purchase a new Policy by increasing (with evidence
of insurability) or decreasing the Specified Amount. Thus, as insurance needs or
financial conditions change, you have the flexibility to adjust life insurance
benefits and vary premium payments.
The Death Benefit may, and the Accumulation Value will, vary with the investment
experience of the chosen Subaccounts of Separate Account I. Thus the Policy
Owner benefits from any appreciation in value of the underlying assets, but
bears the investment risk of any depreciation in value. As a result, whether or
not a Policy continues in force may depend in part upon the investment
experience of the chosen Subaccounts. The failure to pay a Planned Periodic
Premium will not necessarily cause the Policy to lapse, but the Policy could
lapse even if Planned Periodic Premiums have been paid, depending upon the
investment experience of Separate Account I.
DEATH BENEFIT PROCEEDS
As long as the Policy remains in force, ANLIC will pay the Death Benefit
Proceeds of the Policy upon Satisfactory Proof of Death, according to the Death
Benefit option in effect at the time of the Insured's death. The amount of the
Death Benefits payable will be determined at the end of the Valuation Period
during which the Insured's death occurs. The Death Benefit Proceeds may be paid
in a lump sum or under one or more of the payment options set forth in the
Policy. (See the section on Payment Options.)
Death Benefit Proceeds will be paid to the surviving Beneficiary or
Beneficiaries you specified in the application or as subsequently changed. If
you do not choose a Beneficiary, the proceeds will be paid to you, as the Policy
Owner, or if individually owned, to your estate.
EXECUTIVE SELECT
17
<PAGE>
DEATH BENEFIT OPTIONS
The Policy provides two Death Benefit options. The Policy Owner selects one of
the options in the application. The Death Benefit under either option will never
be less than the current Specified Amount of the Policy as long as the Policy
remains in force. (See the section on Policy Lapse and Reinstatement.) The net
amount at risk for Option A will generally be less than the net amount at risk
for Option B. If you choose Option A, your Cost of Insurance deduction will
generally be lower than if you choose Option B. (See the section on Charges and
Deductions.) The following graphs illustrate the differences in the two Death
Benefit options.
OPTION A.
OMITTED GRAPH ILLUSTRATES PAYOUT UNDER DEATH BENEFIT OPTION A, SPECIFICALLY BY
SHOWING THE RELATIONSHIPS OVER TIME, BETWEEN THE SPECIFIED AMOUNT AND THE
ACCUMULATION VALUE.
Death Benefit Option A. Pays a Death Benefit equal to the Specified Amount
or the Accumulation Value multiplied by the Death Benefit percentage (as
illustrated at Point A) whichever is greater.
Under Option A, the Death Benefit is the current Specified Amount of the Policy
or, if greater, the applicable percentage of Accumulation Value on the date of
death. The applicable percentage is 250% for Insureds with an Attained Age 40 or
younger on the Policy Anniversary Date prior to the date of death. For Insureds
with an Attained Age over 40 on that Policy Anniversary Date, the percentage
declines. For example, the percentage at Attained Age 40 is 250%, at Attained
Age 50 is 185%, at Attained Age 60 is 130%, at Attained Age 70 is 115%, at
Attained Age 80 is 105%, and Attained Age 90 is 105%. The applicable percentage
will never be less than 101%. Accordingly, under Option A the Death Benefit will
remain level at the Specified Amount unless the applicable percentage of
Accumulation Value exceeds the current Specified Amount, in which case the
amount of the Death Benefit will vary as the Accumulation Value varies. Policy
Owners who prefer to have favorable investment performance, if any, reflected in
higher Accumulation Value, rather than increased insurance coverage, generally
should select Option A.
OPTION B.
OMITTED GRAPH ILLUSTRATES PAYOUT UNDER DEATH BENEFIT OPTION B, SPECIFICALLY BY
SHOWING THE RELATIONSHIPS OVER TIME, BETWEEN THE SPECIFIED AMOUNT AND THE
ACCUMULATION VALUE.
Death Benefit Option B. Pays a Death Benefit equal to the Specified Amount
plus the Policy's Accumulation Value or the Accumulation Value multiplied
by the Death Benefit percentage, whichever is greater.
Under Option B, the Death Benefit is equal to the current Specified Amount plus
the Accumulation Value of the Policy or, if greater, the applicable percentage
of the Accumulation Value on the date of death. The applicable
EXECUTIVE SELECT
18
<PAGE>
percentage is the same as under Option A: 250% for Insureds with an Attained Age
40 or younger on the Policy Anniversary Date prior to the date of death. For
Insureds with an Attained Age over 40 on that Policy Anniversary Date the
percentage declines. Accordingly, under Option B the amount of the Death Benefit
will always vary as the Accumulation Value varies (but will never be less than
the Specified Amount). Policy Owners who prefer to have favorable investment
performance, if any, reflected in increased insurance coverage, rather than
higher Accumulation Values, generally should select Option B.
CHANGE IN DEATH BENEFIT OPTION. The Death Benefit option may be changed once per
year after the first Policy Year by sending ANLIC a written request. The
effective date of such a change will be the Monthly Activity Date on or
following the date the change is approved by ANLIC. A change may have federal
tax consequences.
If the Death Benefit option is changed from Option A to Option B, the Specified
Amount after the change will equal the Specified Amount before the change less
the Accumulation Value as of the date of the change. If the Death Benefit option
is changed from Option B to Option A, the Specified Amount under Option A after
the change will equal the Death Benefit under Option B on the effective date of
change.
No charges will be imposed upon a change in Death Benefit option, nor will such
a change in and of itself result in an immediate change in the amount of a
Policy's Accumulation Value. However, a change in the Death Benefit option may
affect the Cost of Insurance because this charge varies depending on the net
amount at risk (i.e. the amount by which the Death Benefit as calculated on a
Monthly Activity Date exceeds the Accumulation Value on that date). Changing
from Option B to Option A generally will decrease the net amount at risk in the
future, and will therefore decrease the Cost of Insurance. Changing from Option
A to Option B generally will result in an increase in the Cost of Insurance over
time because the Cost of Insurance Rate will increase with the Insured's age,
even though the net amount at risk will generally remain level. (See the
sections on Charges and Deductions and Federal Tax Matters.)
CHANGE IN SPECIFIED AMOUNT. Subject to certain limitations, after the first
Policy Year, a Policy Owner may increase or decrease the Specified Amount of a
Policy. A change in Specified Amount may affect the Cost of Insurance Rate and
the net amount at risk, both of which may affect a Policy Owner's Cost of
Insurance and have federal tax consequences. (See the sections on Charges and
Deductions and Federal Tax Matters.)
Any increase or decrease in the Specified Amount will become effective on the
Monthly Activity Date on or following the date a written request is approved by
ANLIC. The Specified Amount of a Policy may be changed only once per year and
ANLIC may limit the size of a change in a Policy Year. The Specified Amount
remaining in force after any requested decrease may not be less than $100,000
($50,000 if the Term Coverage Rider is attached to the Policy). After the
Insured reaches Attained Age 100, the Policy Owner may decrease the Specified
Amount to no less than $1000. If a decrease in the Specified Amount makes the
Policy not comply with the maximum premium limits required by federal tax law,
the decrease may be limited or the Accumulation Value may be returned to you, at
your election, to the extent necessary to meet the requirements. (See the
section on Premiums.) The Administrative Expense Charge will include a monthly
charge per $1000 of increase in Specified Amount for ten years from the date of
the increase.
Increases in the Specified Amount will be allowed after the first Policy Year.
For an increase in the Specified Amount, you must submit a written supplemental
application. ANLIC may also require additional evidence of insurability.
Although an increase need not necessarily be accompanied by an additional
premium, in certain cases an additional premium will be required to put the
requested increase in effect. (See the section on Premiums upon Increases in
Specified Amount.) The minimum amount of any increase is $25,000. Generally an
increase cannot be made if the Insured's Attained Age is over the maximum age
for the Insured's risk class. The increase may be subject to guaranteed issue
guidelines, if applicable.
In states which require Cost of Insurance charges to cease at a stated Attained
Age, the Specified Amount will decrease to $1000 when that age is reached.
EXECUTIVE SELECT
19
<PAGE>
METHODS OF AFFECTING INSURANCE PROTECTION
You may increase or decrease the pure insurance protection provided by a Policy
- - the difference between the Death Benefit and the Accumulation Value - in
several ways as your insurance needs change. These ways include increasing or
decreasing the Specified Amount of insurance, changing the level of premium
payments, and making a partial withdrawal of the Policy's Accumulation Value.
Certain of these changes may have federal tax consequences. The consequences of
each of these methods will depend upon the individual circumstances.
DURATION OF THE POLICY
The duration of the Policy generally depends upon the Accumulation Value. The
Policy will remain in force so long as the Net Cash Surrender Value is
sufficient to pay the Monthly Deduction. (See the section on Charges from
Accumulation Value.) However, when the Net Cash Surrender Value is insufficient
to pay the Monthly Deduction and the Grace Period expires without an adequate
payment by the Policy Owner, the Policy will lapse and terminate without value.
(See the section on Policy Lapse and Reinstatement.)
ACCUMULATION VALUE
The Accumulation Value will reflect the investment performance of the chosen
Investment Options, the Net Premiums paid, any partial withdrawals, and the
charges assessed in connection with the Policy. You may Surrender the Policy at
any time and receive the Policy's Net Cash Surrender Value. (See the section on
Surrenders.) There is no guaranteed minimum Accumulation Value.
Accumulation Value is determined on each Valuation Date. On the Issue Date, the
Accumulation Value will equal the portion of any Net Premium allocated to the
Investment Options, reduced by the portion of the first Monthly Deduction
allocated to the Investment Options. (See the section on Allocation of Premiums
and Accumulation Value.) Thereafter, on each Valuation Date, the Accumulation
Value of the Policy will equal:
(1) The aggregate values belonging to the Policy in each of the
Subaccounts on the Valuation Date, determined by multiplying each
Subaccount's unit value by the number of Subaccount units you have
allocated to the Policy; plus
(2) The value of allocations to the Fixed Account; plus
(3) Any Accumulation Value impaired by Outstanding Policy Debt held in the
General Account; plus
(4) Any Net Premiums received on that Valuation Date; minus
(5) Any partial withdrawal, and its charge, made on that Valuation Date;
minus
(6) Any Monthly Deduction to be made on that Valuation Date.
In computing the Policy's Accumulation Value on the Valuation Date, the number
of Subaccount units allocated to the Policy is determined after any transfers
among Investment Options (and deduction of transfer charges), but before any
other Policy transactions, such as receipt of Net Premiums and partial
withdrawals. Because the Accumulation Value depends on a number of variables, a
Policy's Accumulation Value cannot be predetermined.
THE UNIT VALUE. The unit value of each Subaccount reflects the investment
performance of that Subaccount. The unit value of each Subaccount is calculated
by:
(1) Multiplying the net asset value per share of each Fund portfolio on
the Valuation Date times the number of shares held by that Subaccount,
before the purchase or redemption of any shares on that Valuation
Date; minus
(2) A charge not exceeding an annual rate of 0.95% (years 1-15) or 0.50%
(years 16+) for mortality and expense risk; minus
(3) A charge not exceeding an annual rate of 0.15% for administrative
service expenses; minus
(4) Any taxes payable by Separate Account I; and
(5) Dividing the result by the total number of units held in the
Subaccount on the Valuation Date, before the purchase or redemption of
any units on that Valuation Date.
(See the section on Daily Charges Against the Separate Account I.)
VALUATION DATE AND VALUATION PERIOD. A Valuation Date is each day on which the
New York Stock Exchange ("NYSE") is open for trading. The net asset value for
each Fund portfolio is determined as of the close of regular
EXECUTIVE SELECT
20
<PAGE>
trading on the NYSE. The net investment return for each Subaccount and all
transactions and calculations with respect to the Policies as of any Valuation
Date are determined as of that time. A Valuation Period is the period between
two successive Valuation Dates, commencing at the close of the NYSE on each
Valuation Date and ending at the close of the NYSE on the next succeeding
Valuation Date.
PAYMENT OF POLICY BENEFITS
Death Benefit Proceeds under the Policy will usually be paid within seven days
after ANLIC receives Satisfactory Proof of Death. Payments may be postponed in
certain circumstances. (See the section on Postponement of Payments.) The Policy
Owner may decide the form in which Death Benefit Proceeds will be paid. During
the Insured's lifetime, the Policy Owner may arrange for the Death Benefit
Proceeds to be paid in a lump sum or under one or more of the optional methods
of payment described below. Changes must be in writing and will revoke all prior
elections. If no election is made, ANLIC will pay Death Benefit Proceeds or the
Accumulation Value Benefit in a lump sum. When Death Benefit Proceeds are
payable in a lump sum and no election for an optional method of payment is in
force at the death of the Insured, the Beneficiary may select one or more of the
optional methods of payment. Further, if the Policy is assigned, any amounts due
to the assignee will first be paid in one sum. The balance, if any, may be
applied under any payment option. Once payments have begun, the payment option
may not be changed. (Also see the section on Surrenders.)
PAYMENT OPTIONS FOR DEATH BENEFIT PROCEEDS. The minimum amount of each payment
is $100. If a payment would be less than $100, ANLIC has the right to make
payments less often so that the amount of each payment is at least $100. Once a
payment option is in effect, Death Benefit Proceeds will be transferred to
ANLIC's General Account. ANLIC may make other payment options available in the
future. For additional information concerning these options, see the Policy
itself. The following payment options are currently available:
OPTION AI--INTEREST PAYMENT OPTION. ANLIC will hold any amount applied
under this option. Interest on the unpaid balance will be paid or credited
each month at a rate determined by ANLIC.
OPTION AII--FIXED AMOUNT PAYABLE OPTION. Each payment will be for an agreed
fixed amount. Payments continue until the amount ANLIC holds runs out.
OPTION B--FIXED PERIOD PAYMENT OPTION. Equal payments will be made for any
period selected up to 20 years.
If the beneficiary is a natural person, the following payment options are also
currently available:
OPTION C--LIFETIME PAYMENT OPTION. Equal monthly payments are based on the
life of a named person. Payments will continue for the lifetime of that
person. Variations provide for guaranteed payments for a period of time.
OPTION D--JOINT LIFETIME PAYMENT OPTION. Equal monthly payments are based
on the lives of two named persons. While both are living, one payment will
be made each month. When one dies, the same payment will continue for the
lifetime of the other.
As an alternative to the above payment options, Death Benefits Proceeds may be
paid in any other manner approved by ANLIC. Further, one of ANLIC's affiliates
may make payments under the above payment options. If an affiliate makes the
payment, it will do so according to the request of the Policy Owner, using the
rules set out above.
POLICY RIGHTS
LOAN BENEFITS
LOAN PRIVILEGES. After the first Policy Year, the Policy Owner may borrow an
amount up to the current Net Cash Surrender Value less twelve times the most
recent Monthly Deduction, at regular or reduced loan rates (described below).
Loans usually are funded within seven days after receipt of a written request.
The loan may be repaid at any time while the Insured is living. Policy Owners in
certain states may borrow 100% of the Net Cash Surrender
EXECUTIVE SELECT
21
<PAGE>
Value after deducting Monthly Deductions and any interest on Policy loans that
will be due for the remainder of the Policy Year. Loans may have tax
consequences. (See the section on Federal Tax Matters).
LOAN INTEREST. ANLIC charges interest to Policy Owners at regular and reduced
rates. Regular loans will accrue interest on a daily basis at a rate of up to 6%
per year; currently the interest rate on regular Policy loans is 5.5%. Each year
after the tenth Policy Anniversary Date, the Policy Owner may borrow a limited
amount of the Net Cash Surrender Value at a reduced interest rate. For those
loans, interest will accrue on a daily basis at a rate of up to 4% per year; the
current reduced loan rate is 3.5%. The amount available at the reduced loan rate
is:
(1) The Accumulation Value, minus
(2) Total premiums paid minus any partial withdrawals previously taken,
minus
(3) Any Outstanding Policy Debt held at a reduced loan rate.
However, this amount may not exceed the maximum loan amount described above.
(See the section on Loan Privileges.) If unpaid when due, interest will be added
to the amount of the loan and bear interest at the same rate. The Policy Owner
earns 3.5% interest on the Accumulation Values held in the General Account
securing the loans.
EFFECT OF POLICY LOANS. When a loan is made, Accumulation Value equal to the
amount of the loan will be transferred from the Investment Options to the
General Account as security for the loan. The Accumulation Value transferred
will be allocated from the Investment Options according to the instructions you
give when you request the loan. The minimum amount which can remain in a
Subaccount or the Fixed Account as a result of a loan is $100. If no
instructions are given, the amounts will be withdrawn in proportion to the
various Accumulation Values in the Investment Options. In any Policy Year that
loan interest is not paid when due, ANLIC will add the interest due to the
principal amount of the Policy loan on the next Policy Anniversary. This loan
interest due will be transferred from the Investment Options as set out above.
No charge will be made for these transfers. A Policy loan will permanently
affect the Accumulation Value and may permanently affect the amount of the Death
Benefits, even if the loan is repaid.
Interest earned on amounts held in the General Account will be allocated to the
Investment Options on each Policy Anniversary in the same proportion that Net
Premiums are being allocated to those Investment Options at the time. Upon
repayment of loan amounts, the portion of the repayment allocated in accordance
with the repayment of loan provision (see below) will be transferred to increase
the Accumulation Value in that Investment Option.
OUTSTANDING POLICY DEBT. The Outstanding Policy Debt equals the total of all
Policy loans and accrued interest on Policy loans. If the Outstanding Policy
Debt exceeds the Accumulation Value less any Accrued Expense Charges, the Policy
Owner must pay the excess. ANLIC will send a notice of the amount which must be
paid. If you do not make the required payment within the 61 days after ANLIC
sends the notice, the Policy will terminate without value ("lapse".) Should the
Policy lapse while Policy loans are outstanding, the portion of the loans
attributable to earnings will become taxable. You may lower the risk of a Policy
lapsing while loans are outstanding as a result of a reduction in the market
value of investments in the Subaccounts by investing in a diversified group of
lower risk investment portfolios and/or transferring the funds to the Fixed
Account and receiving a guaranteed rate of return. Should you experience a
substantial reduction, you may need to lower anticipated withdrawals and loans,
repay loans, make additional premium payments, or take other action to avoid
Policy lapse. A lapsed Policy may later be reinstated. (See the section on
Policy Lapse and Reinstatement.)
REPAYMENT OF LOAN. Unscheduled premiums paid while a Policy loan is outstanding
are treated as repayment of the debt only if the Policy Owner so requests. As a
loan is repaid, the Accumulation Value in the General Account securing the
repaid loan will be allocated among the Subaccounts and the Fixed Account in the
same proportion that Net Premiums are being allocated at the time of repayment.
SURRENDERS
At any time during the lifetime of the Insured, the Policy Owner may withdraw a
portion of the Accumulation Value or Surrender the Policy by sending a written
request to ANLIC. The amount available for Surrender is the Net Cash Surrender
Value at the end of the Valuation Period when the Surrender request is received
at ANLIC's Administrative Office. Surrenders will generally be paid within seven
days of receipt of the written request. (See the section on Postponement of
Payments.) SURRENDERS MAY HAVE TAX CONSEQUENCES. Once a Policy is Surrendered,
it may not be reinstated. (See the section on Tax Treatment of Policy Proceeds.)
EXECUTIVE SELECT
22
<PAGE>
If the Policy is being Surrendered in its entirety, the Policy itself must be
returned to ANLIC along with the request. ANLIC will pay the Net Cash Surrender
Value. Coverage under the Policy will terminate as of the date of a total
Surrender. A Policy Owner may elect to have the amount paid in a lump sum or
under a payment option. (See the section on Payment Options.)
PARTIAL WITHDRAWALS
Partial withdrawals are irrevocable. The amount of a partial withdrawal may not
be less than $500. After a partial withdrawal, the Net Cash Surrender Value, not
including any percent of premium refund, must be at least $1,000 or an amount
sufficient to maintain the Policy in force for the remainder of the Policy Year.
The amount paid will be deducted from the Investment Options according to your
instructions when you request the withdrawal. However, the minimum amount
remaining in a Subaccount as a result of the allocation is $100. If no
instructions are given, the amounts will be withdrawn in proportion to the
various Accumulation Values in the Investment Options.
The Death Benefit will be reduced by the amount of any partial withdrawal and
may affect the way the Cost of Insurance is calculated and the amount of pure
insurance protection under the Policy. (See the sections on Monthly Deduction -
Cost of Insurance and Death Benefit Options--Methods of Affecting Insurance
Protection.) If Death Benefit option B is in effect, the Specified Amount will
not change, but the Accumulation Value will be reduced.
A fee which does not exceed the lesser of $50 or 2% of the amount withdrawn is
deducted from the Accumulation Value. Currently, the charge is the lesser of $25
or 2% of the amount withdrawn. (See the section on Partial Withdrawal Charge.)
TRANSFERS
Accumulation Value may be transferred among the Subaccounts of Separate Account
I and to the Fixed Account as often as desired. However, you may make only one
transfer out of the Fixed Account per Policy Year. We may limit the transfer
period to the 30 day period following the Policy Anniversary Date. The transfers
may be ordered in person, by mail or by telephone. The total amount transferred
each time must be at least $250, or the balance of the Subaccount, if less. The
minimum amount that may remain in a Subaccount or the Fixed Account after a
transfer is $100. The first 15 transfers per Policy Year will be permitted free
of charge. After that, a transfer charge of $10 may be imposed each additional
time amounts are transferred. Currently, no charge is imposed for additional
transfers. This charge will be deducted pro rata from each Subaccount (and, if
applicable, the Fixed Account) in which the Policy Owner is invested. (See the
section on Transfer Charge.)
Additional restrictions on transfers may be imposed at the Fund level.
Specifically, Fund managers may have the right to refuse sales, or suspend or
terminate the offering of portfolio shares, if they determine that such action
is necessary in the best interests of the portfolio's shareholders. If a Fund
manager refuses a transfer for any reason, the transfer will not be allowed.
ANLIC will not be able to process the transfer if the Fund manager refuses.
Transfers resulting from Policy loans will not be subject to a transfer charge
and will not be counted towards the guaranteed 15 free transfers per Policy
Year. ANLIC may at any time revoke or modify the transfer privilege, including
the minimum amount transferable.
Transfers out of the Fixed Account, unless part of the dollar cost averaging
systematic program described below, are limited to one per Policy Year.
Transfers out of the Fixed Account are limited to the greater of (1) 25% of the
Fixed Account attributable to the Policy; (2) the largest transfer made by the
Policy Owner out of the Fixed Account during the last 13 months; or (3) $1,000.
This provision is not available while dollar cost averaging from the Fixed
Account.
The privilege to initiate transactions by telephone will be made available to
Policy Owners automatically. The registered representative designated on the
application will have the authority to initiate telephone transfers.
EXECUTIVE SELECT
23
<PAGE>
ANLIC will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, and if it does not, ANLIC may be liable
for any losses due to unauthorized or fraudulent instructions. The procedures
ANLIC follows for transactions initiated by telephone include, but are not
limited to, requiring the Policy Owner to provide the Policy number at the time
of giving transfer instructions; ANLIC's tape recording of all telephone
transfer instructions; and ANLIC providing written confirmation of telephone
transactions.
SYSTEMATIC PROGRAMS
ANLIC may offer systematic programs as discussed below. These programs will be
subject to administrative guidelines ANLIC may establish from time to time. We
will count your transfers in these programs when determining whether any
transfer fee applies. Lower minimum amounts may be allowed to transfer as part
of a systematic program. No other separate fee is assessed when one of these
options is chosen. All other normal transfer restrictions, as described above,
also apply.
You can request participation in the available programs when purchasing the
Policy or at a later date. You can change the allocation percentage or
discontinue any program by sending written notice or calling the Administrative
Office. Other scheduled programs may be made available. ANLIC reserves the right
to modify, suspend or terminate such programs at any time. Participation in any
systematic program will automatically terminate upon death of the Insured. Use
of systematic programs may not be advantageous, and does not guarantee success.
PORTFOLIO REBALANCING. Under the Portfolio Rebalancing program, you can instruct
ANLIC to reallocate the Accumulation Value among the Subaccounts (but not the
Fixed Account) on a systematic basis according to your specified allocation
instructions.
DOLLAR COST AVERAGING. Under the Dollar Cost Averaging program, you can instruct
ANLIC to automatically transfer, on a systematic basis, a predetermined amount
or specified percentage from the Fixed Account or the Money Market Subaccount to
any other Subaccount(s). Dollar cost averaging is permitted from the Fixed
Account if each monthly transfer is no more than 1/36th of the value of the
Fixed Account at the time dollar cost averaging is established.
EARNINGS SWEEP. This program permits systematic redistribution of earnings among
Investment Options.
FREE-LOOK PRIVILEGE
You may cancel the Policy within 10 days after you receive it, within 10 days
after ANLIC delivers a notice of your right of cancellation, or within 45 days
of completing Part I of the application, whichever is later. When allowed by
state law, the amount of the refund is the Net Premiums allocated to the
Investment Options, adjusted by investment gains and losses, plus the sum of all
charges deducted from premiums paid. Otherwise, the amount of the refund will
equal the gross premiums paid. To cancel the Policy, you should mail or deliver
it to the selling agent, or to ANLIC at its Administrative Office. A refund of
premiums paid by check may be delayed until the check has cleared your bank.
(See the section on Postponement of Payments.)
PAYMENT AND ALLOCATION OF PREMIUMS
ISSUANCE OF A POLICY
Individuals wishing to purchase a Policy must complete an application and submit
it to ANLIC's Administrative Office ( 5900 "O" Street, P.O. Box 82550, Lincoln,
Nebraska 68501). With guaranteed or simplified underwriting, a Policy will be
issued to individuals ages 18 to 65 on their nearest birthday. With regular
underwriting, a Policy will generally be issued only to individuals age 18 to 85
on their nearest birthday who supply satisfactory evidence of insurability to
ANLIC. Preferred class regular issue Policies are available only for ages 18 to
75. Acceptance of a regular underwriting application is subject to ANLIC's
underwriting rules, and ANLIC reserves the right to reject an application for
any reason.
The Policy Date is the effective date for all coverage in the original
application. The Policy Date is used to determine Policy Anniversary Dates,
Policy Years and Policy Months. The Issue Date is the date that all financial,
EXECUTIVE SELECT
24
<PAGE>
contractual and administrative requirements have been met and processed for the
Policy. The Policy Date and the Issue Date will be the same unless: (1) an
earlier Policy Date is specifically requested, or (2) additional premiums or
application amendments are needed. When there are additional requirements before
issue (see below) the Policy Date will be the date the Policy is sent for
delivery and the Issue Date will be the date the requirements are met.
When all required premiums and application amendments have been received by
ANLIC in its Administrative Office, the Issue Date will be the date the Policy
is mailed to you or sent to the agent for delivery to you. When application
amendments or additional premiums need to be obtained upon delivery of the
Policy, the Issue Date will be when the Policy receipt and federal funds (monies
of member banks within the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received and available to ANLIC, and the application
amendments are received and reviewed in ANLIC's Administrative Office. The
initial Net Premium will be allocated on the Issue Date to the Subaccounts
and/or the Fixed Account according to the selections made in the application.
When state or other applicable law or regulation requires return of at least the
premium payments if you return the Policy under the free-look privilege, the
initial Net Premium will be allocated to the Money Market Subaccount. Then,
thirteen days after the Issue Date, the Accumulation Value of the Policy will be
allocated among the Subaccounts and/or Fixed Account according to the
instructions in the application.
Subject to approval, a Policy may be backdated, but the Policy Date may not be
more than six months prior to the date of the application. Backdating can be
advantageous if the Insured's lower Issue Age results in lower Cost of Insurance
Rates. If a Policy is backdated, the minimum initial premium required will
include sufficient premium to cover the backdating period. Monthly deductions
will be made for the period the Policy Date is backdated.
Conditional receipt coverage may be available prior to the Policy Date, provided
that certain conditions are met, upon the completion of an application and the
payment of the required premium at the time of the application. The maximum
total amount of insurance which will be payable pursuant to all conditional
receipts received by the applicant as a result of pending applications with
ANLIC and its affiliates is limited to the smaller of:
(1) The total amount of insurance applied for with ANLIC and its
affiliates; or
(2) $250,000 minus the total amount of insurance in force with ANLIC and
its affiliates, but not less than zero.
As used above, total amount of insurance includes any amounts payable under any
Accidental Death Benefit provision.
PREMIUMS
No insurance will take effect before the minimum initial premium payment is
received by ANLIC in federal funds. Subsequent premiums are payable at ANLIC's
Administrative Office. A Policy Owner has flexibility in determining the
frequency and amount of premiums. However, unless you have paid sufficient
premiums to pay the Monthly Deduction and Percent of Premium Charge, the Policy
may have a zero Net Cash Surrender Value and lapse. (See the section on Policy
Benefits, Purposes of the Policy.)
PLANNED PERIODIC PREMIUMS. At the time the Policy is issued you may determine a
Planned Periodic Premium schedule that provides for the payment of level
premiums at selected intervals. You are not required to pay premiums according
to this schedule. You have considerable flexibility to alter the amount and
frequency of premiums paid. ANLIC reserves the right to limit the number and
amount of additional or unscheduled premium payments.
You may also change the frequency and amount of Planned Periodic Premiums by
sending a written request to the Administrative Office, although ANLIC reserves
the right to limit any increase. Premium payment notices will be sent annually,
semi-annually or quarterly, depending upon the frequency of the Planned Periodic
Premiums. Payment of the Planned Periodic Premiums does not guarantee that the
Policy remains in force. Instead, the duration of the Policy depends upon the
Policy's Net Cash Surrender Value. (See the section on Duration of the Policy.)
Even if Planned Periodic Premiums are paid, the Policy will lapse any time the
Net Cash Surrender Value is insufficient to pay the Monthly Deduction, and the
Grace Period expires without a sufficient payment. (See the section on Policy
Lapse and Reinstatement.)
EXECUTIVE SELECT
25
<PAGE>
PREMIUM LIMITS. ANLIC's current minimum premium limit is $45, $15 if paid by
automatic bank draft. ANLIC currently has no maximum premium limit, other than
the current maximum premium limits established by federal tax laws. ANLIC
reserves the right to change any premium limit. In no event may the total of all
premiums paid, both planned and unscheduled, exceed the current maximum premium
limits established by federal tax laws. (See the section on Tax Status of the
Policy.)
If at any time a premium is paid which would result in total premiums exceeding
the current maximum premium limits, ANLIC will accept only that portion of the
premium which will make total premiums equal the maximum. Any part of the
premium in excess of that amount will be returned or applied as otherwise agreed
and no further premiums will be accepted until allowed by the current maximum
premium limits allowed by law. ANLIC may require additional evidence of
insurability if any premium payment would result in an increase in the Policy's
net amount at risk on the date the premium is received.
PREMIUMS UPON INCREASES IN SPECIFIED AMOUNT. Depending upon the Accumulation
Value of the Policy at the time of an increase in the Specified Amount of the
Policy and the amount of the increase requested by the Policy Owner, an
additional premium payment may be required. ANLIC will notify you of any premium
required to fund the increase, which premium must be made in a single payment.
The Accumulation Value of the Policy will be immediately increased by the amount
of the payment, less the applicable Percent of Premium Charge.
ALLOCATION OF PREMIUMS AND ACCUMULATION VALUE
ALLOCATION OF NET PREMIUMS. In the application for a Policy, the Policy Owner
allocates Net Premiums to one or more Subaccounts and/or to the Fixed Account.
Allocations must be whole number percentages and must total 100%. The allocation
of future Net Premiums may be changed without charge by providing proper
notification to the Administrative Office. If there is any Outstanding Policy
Debt at the time of a payment, ANLIC will treat the payment as a premium payment
unless you instruct otherwise by proper written notice.
The initial Net Premium will be allocated on the Issue Date to the Subaccounts
and/or the Fixed Account according to the selections made in the application.
When state or other applicable law or regulation requires return of at least the
premium payments if you return the Policy under the free-look privilege, the
initial Net Premium will be allocated to the Money Market Subaccount. Then,
thirteen days after the Issue Date, the Accumulation Value of the Policy will be
allocated among the Subaccounts and/or Fixed Account according to the
instructions in the application. Premium payments received by ANLIC prior to the
Issue Date are held in the General Account until the Issue Date and are credited
with interest at a rate determined by ANLIC for the period from the date the
payment has been converted into federal funds and is available to ANLIC. In no
event will interest be credited prior to the Policy Date.
The Accumulation Value of the Subaccounts will vary with the investment
performance of these Subaccounts and you, as the Policy Owner, will bear the
entire investment risk. This will affect the Policy's Accumulation Value, and
may affect the Death Benefit as well. You should periodically review your
allocations of premiums and values in light of market conditions and overall
financial planning requirements.
POLICY LAPSE AND REINSTATEMENT
LAPSE. Unlike conventional life insurance policies, the failure to make a
Planned Periodic Premium payment will not itself cause the Policy to lapse.
Lapse will occur when the Net Cash Surrender Value is insufficient to cover the
Monthly Deduction and a Grace Period expires without a sufficient payment. The
Grace Period is 61 days from the date ANLIC mails a notice that the Grace Period
has begun. ANLIC will notify you at the beginning of the Grace Period by mail
addressed to your last known address on file with ANLIC.
The notice will specify the premium required to keep the Policy in force. The
required premium will equal the amount necessary to cover the Monthly Deductions
and Percent of Premium Charges for the three Policy Months after commencement of
the Grace Period. Failure to pay the required premium within the Grace Period
will result in lapse of the Policy. If the Insured dies during the Grace Period,
any overdue Monthly Deductions and Outstanding Policy Debt will be deducted from
the Death Benefit Proceeds. (See the section on Charges and Deductions.)
EXECUTIVE SELECT
26
<PAGE>
REINSTATEMENT. A lapsed Policy may be reinstated any time within three years
(five years in Missouri) after the beginning of the Grace Period. We will
reinstate the Policy based on the Insured's risk class at the time of the
reinstatement.
Reinstatement is subject to the following:
(1) Evidence of insurability of the Insured satisfactory to ANLIC
(including evidence of insurability of any person covered by a rider
to reinstate the rider);
(2) Any Outstanding Policy Debt on the date of lapse will be reinstated
with interest due and accrued;
(3) The Policy cannot be reinstated if it has been Surrendered for its
full Net Cash Surrender Value;
(4) The minimum premium required at reinstatement is:
(a) the amount necessary to raise the Net Cash Surrender Value as of
the date of reinstatement to equal to or greater than zero; plus
(b) three times the current Monthly Deduction.
The amount of Accumulation Value on the date of reinstatement will equal:
(1) The amount of the Net Cash Surrender Value on the date of lapse,
increased by
(2) The premium paid at reinstatement, less
(3) The Percent of Premium Charge.
If any Outstanding Policy Debt is reinstated, that debt will be held in ANLIC's
General Account. Accumulation Value calculations will then proceed as described
under the section on Accumulation Value.
The effective date of reinstatement will be the first Monthly Activity Date on
or next following the date of approval by ANLIC of the application for
reinstatement.
CHARGES AND DEDUCTIONS
Charges will be deducted in connection with the Policy to compensate ANLIC for:
(1) providing the insurance benefits set forth in the Policy and any optional
insurance benefits added by rider; (2) administering the Policy and payment of
applicable taxes; (3) assuming certain risks in connection with the Policy; and
(4) incurring expenses in distributing the Policy. The nature and amount of
these charges are described more fully below. The charges are determined by us
according to our expectations of future experience for mortality, lapse,
interest and expenses. If our expectations of future experience for mortality,
lapse, interest and expenses change, we may increase or decrease charges where
permitted by the Policy, but we will never charge more than the maximum amount
specified in the Policy. Any change in the charges will apply to all Insureds of
the same age, gender, and risk class and whose Policies have been in effect for
the same length of time.
DEDUCTIONS FROM PREMIUM PAYMENTS
PERCENT OF PREMIUM CHARGE. A deduction of up to 5.0% of the premium is made from
each premium payment; currently the charge is 3.0%. The deduction is intended to
partially offset the premium taxes imposed by the states and their subdivisions,
and to help defray the tax cost due to capitalizing certain Policy acquisition
expenses as required under applicable federal tax laws. (See the section on
Federal Tax Matters .) ANLIC does not expect to derive a profit from the Percent
of Premium Charge. If you Surrender the Policy in the first two Policy Years, we
will refund a portion of the Percent of Premium Charge deducted in the first
Policy Year. The applicable portion is 100% in the first Policy Year and 50% in
the second Policy Year.
CHARGES FROM ACCUMULATION VALUE
MONTHLY DEDUCTION. Charges will be deducted as of the Policy Date and on each
Monthly Activity Date thereafter from the Accumulation Value of the Policy to
compensate ANLIC for administrative expenses and insurance provided. These
charges will be allocated from the Investment Options in accordance with your
instructions. If no instructions are given the charges will be allocated
pro-rata among the Investment Options. Each of these charges is described in
more detail below.
ADMINISTRATIVE EXPENSE CHARGE. To compensate ANLIC for the ordinary
administrative expenses expected to be incurred in connection with a Policy, we
deduct an Administrative Expense Charge based on the Specified Amount and the
Policy duration. Currently, the per Policy charge is $15 per month in the first
Policy Year and $7 per month thereafter. The per Policy portion of the
Administrative Expense Charge is levied throughout the life of the Policy and is
guaranteed not to increase above $15 per month in the first Policy Year and $12
per month thereafter. During
EXECUTIVE SELECT
27
<PAGE>
the first ten Policy Years, there is a monthly charge per $1000 of initial
Specified Amount. In addition, there is a monthly charge per $1000 of each
increase in Specified Amount for ten years from the date of increase. The per
$1000 rates for both the initial Specified Amount and each increase vary by
Issue Age, gender, and risk class. The current charge per $1000 is the same as
the maximum charge. (See the Policy Schedule for rates.)
COST OF INSURANCE. Because the Cost of Insurance depends upon several variables,
the cost for each Policy Month can vary from month to month. ANLIC will
determine the monthly Cost of Insurance by multiplying the applicable Cost of
Insurance Rate by the Net Amount at Risk for each Policy Month. The net amount
at risk on any Monthly Activity Date is based on the amount by which the Death
Benefit which would have been payable on that Monthly Activity Date exceeds the
Accumulation Value on that date.
COST OF INSURANCE RATE. The Annual Cost of Insurance Rates are based on the
Insured's gender, Issue Age, Policy duration and risk class. The rates will vary
depending upon tobacco use and other risk factors. For the initial Specified
Amount, the Cost of Insurance Rates will not exceed those shown in the Schedule
of Guaranteed Annual Cost of Insurance Rates shown in the schedule pages of the
Policy. These guaranteed rates are based on the Insured's Attained Age and are
equal to the 1980 Insurance Commissioners Standard Ordinary Male and Female
Mortality Tables without smoker distinction. The maximum rates for the
table-rated substandard Insureds are based on a multiple (shown in the schedule
pages of the Policy) of the above rates. We may add flat extra ratings to an
Insured to reflect higher mortality risk. Any change in the Cost of Insurance
Rates will apply to all Insureds of the same age, gender, risk class and whose
Policies have been in effect for the same length of time.
The Cost of Insurance Rates, Policy charges, and payment options for Policies
issued in Montana, and perhaps other states or in connection with certain
employee benefit arrangements, are issued on a gender-neutral (unisex) basis.
The unisex rates will be higher than those applicable to females and lower than
those applicable to males.
If the rating class for any increase in the Specified Amount is not the same as
the rating class at issue, the Cost of Insurance Rate used after such increase
will be a composite rate based upon a weighted average of the rates of the
different rating classes. Decreases may be reflected in the Cost of Insurance
Rate, as discussed earlier.
The actual charges made during the Policy year will be shown in the annual
report delivered to Policy Owners.
RATING CLASS. The rating class of the Insured will affect the Cost of Insurance
Rate. ANLIC currently places Insureds into both standard rating classes and
substandard rating classes that involve a higher mortality risk. In an otherwise
identical Policy, Insureds in the standard rating class will have a lower Cost
of Insurance Rate than Insureds in a rating class with higher mortality risks.
TRANSFER CHARGE. Currently there is no charge for transfers among the Investment
Options in excess of 15 per Policy Year. A charge of $10 (guaranteed not to
increase) for each transfer in excess of 15 may be imposed to compensate ANLIC
for the costs of processing the transfer. Since the charge reimburses ANLIC only
for the cost of processing the transfer, ANLIC does not expect to make any
profit from the transfer charge. This charge will be deducted pro rata from each
Subaccount (and, if applicable, the Fixed Account) in which the Policy Owner is
invested. The transfer charge will not be imposed on transfers that occur as a
result of Policy loans or the exercise of exchange rights.
PARTIAL WITHDRAWAL CHARGE. A charge will be imposed for each partial withdrawal.
This charge will compensate ANLIC for the administrative costs of processing the
requested payment and in making necessary calculations for any reductions in
Specified Amount which may be required because of the partial withdrawal. This
charge is currently the lesser of $25 or 2% of the amount withdrawn (guaranteed
not to be greater than the lesser of $50 or 2% of the amount withdrawn). A
partial withdrawal charge is not assessed when a Policy is Surrendered.
DAILY CHARGES AGAINST THE SEPARATE ACCOUNT
A daily Mortality and Expense Risk Charge will be deducted from the value of the
net assets of Separate Account I to compensate ANLIC for mortality and expense
risks assumed in connection with the Policy. This daily charge from Separate
Account I is currently at the rate of 0.002050% (equivalent to an annual rate of
0.75%) for Policy Years 1-15 and will not exceed 0.95% annually. After the
fifteenth Policy Year the daily charge will be applied at the rate of 0.000820%
(equivalent to an annual rate of 0.30%) and will not exceed 0.50% annually. The
daily charge will be deducted from the net asset value of Separate Account I,
and therefore the Subaccounts, on each Valuation Date. Where the previous day or
days was not a Valuation Date, the deduction on the Valuation Date will be the
EXECUTIVE SELECT
28
<PAGE>
applicable daily rate multiplied by the number of days since the last Valuation
Date. No Mortality and Expense Risk Charges will be deducted from the amounts in
the Fixed Account.
ANLIC believes that this level of charge is within the range of industry
practice for comparable flexible premium variable universal life policies. The
mortality risk assumed by ANLIC is that Insureds may live for a shorter time
than calculated, and that the aggregate amount of Death Benefits paid will be
greater than initially estimated. The expense risk assumed is that expenses
incurred in issuing and administering the Policies will exceed the
administrative charges provided in the Policies.
An Asset-Based Administrative Expense Charge will also be deducted from the
value of the net assets of Separate Account I on a daily basis. This charge is
applied at a rate of 0.000409% (equivalent to 0.15% annually). The rate of this
charge will never exceed 0.15% annually. No Asset-Based Administrative Expense
Charge will be deducted from the amounts in the Fixed Account.
FUND EXPENSE SUMMARY
In addition to the charges against Separate Account I described just above,
management fees and expenses will be assessed by Alger, Bankers Trust, Calvert,
Fidelity, FTVIP, Neuberger Berman, Oppenheimer, and Van Eck against the amounts
invested in the various portfolios. No portfolio fees will be assessed against
amounts placed in the Fixed Account.
The information shown below relating to the Funds was provided to ANLIC by the
Funds and ANLIC has not independently verified such information. Each of the
Funds is managed by an investment advisory organization that is not affiliated
with ANLIC. Each such organization is entitled to receive a fee for its services
based on the value of the relevant portfolio's net assets. The amount of
expenses, including the asset based advisory fee referred to above, borne by
each portfolio for the fiscal year ended December 31, 1998, was as follows:
<TABLE>
<CAPTION>
PORTFOLIO ANNUAL EXPENSES
(EXPRESSED AS A PERCENTAGE OF NET ASSETS OF EACH PORTFOLIO)
TOTAL
(REFLECTING
PORTFOLIO OTHER TOTAL WAIVED, WAIVERS,
MANAGEMENT EXPENSES PORTFOLIO REIMBURSED REIMBURSEMENTS,
FEES ANNUAL AND/OR AND/OR
EXPENSES PAID INDIRECT
INDIRECTLY PAYMENTS,
IF ANY)
- ------------------------------------- ------------- ---------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Alger American Growth Portfolio 0.75% 0.04% 0.79% -- 0.79%
Alger American MidCap Growth 0.80% 0.04% 0.84% -- 0.84%
Portfolio
Alger American Small Capitalization 0.85% 0.04% 0.89% -- 0.89%
Portfolio
Calvert Social Money Market Portfolio 0.50% 0.16% 0.66% 0.03% 0.63%
Calvert Social Small Cap Growth 1.00% 0.33% 1.33% 0.21% 1.12%
Portfolio
Calvert Social Mid Cap Growth 0.90% 0.16% 1.06% 0.05% 1.01%(1)
Portfolio
Calvert Social International Equity 1.10% 0.70% 1.80% 0.24% 1.56%(2)
Portfolio
Calvert Social Balanced Portfolio 0.70% 0.18% 0.88% 0.02% 0.86%(1)
[Bankers Trust, Fidelity, FTVIP
portfolio expenses for 1999
will be listed here]
EXECUTIVE SELECT
29
<PAGE>
Neuberger Berman Advisers -- 0.76%
Management Trust Limited Maturity 0.65% 0.11% 0.76%
Bond Portfolio
Neuberger Berman Advisers 0.83% 0.09% 0.92% -- 0.92%
Management Trust Growth Portfolio
Neuberger Berman Advisers
Management Trust Partners Portfolio
Oppenheimer Aggressive Growth 0.69% 0.02% 0.71% -- 0.71%
Fund/VA
Oppenheimer Capital Appreciation 0.72% 0.03% 0.75% -- 0.75%
Fund/VA
Oppenheimer Main Street Growth & 0.74% 0.05% 0.79% -- 0.79%
Income Fund/VA
Oppenheimer High Income Fund/VA 0.74% 0.04% 0.78% -- 0.78%
Oppenheimer Strategic Bond Fund/VA 0.74% 0.06% 0.80% -- 0.80%
Van Eck Worldwide Hard Assets Fund 1.00% 0.20% 1.20% 0.04%(3) 1.16%
</TABLE>
(1) Expenses have been restated to reflect expenses expected to be incurred in
1999.
(2) Net expenses include a voluntary reimbursement made by the Advisor of 0.15%
for administrative service fees.
(3) Expense is reduced to 1.16% by the directed brokerage and custodian fee
arrangement.
Expense reimbursement agreements are expected to continue in future years but
may be terminated at any time. As long as the expense limitations continue for a
portfolio, if a reimbursement occurs, it has the effect of lowering the
portfolio's expense ratio and increasing its total return.
ANLIC may receive administrative fees from the investment advisers of certain
Funds. ANLIC currently does not assess a separate charge against Separate
Account I or the Fixed Account for any federal, state or local income taxes.
ANLIC may, however, make such a charge in the future if income or gains within
Separate Account I will incur any federal, or any significant state or local
income tax liability, or if the federal, state or local tax treatment of ANLIC
changes.
GENERAL PROVISIONS
THE CONTRACT. The Policy, the application, any supplemental applications, and
any riders, amendments or endorsements make up the entire contract. Only the
President, Vice President, Secretary or Assistant Secretary can modify the
Policy. Any changes must be made in writing, and approved by ANLIC. No agent has
the authority to alter or modify any of the terms, conditions or agreements of
the Policy or to waive any of its provisions. The rights and benefits under the
Policy are summarized in this prospectus; however prospectus disclosure
regarding the Policy is qualified in its entirety by the Policy itself, a copy
of which is available upon request from ANLIC.
CONTROL OF POLICY. The Policy Owner is as shown in the application or subsequent
written endorsement. Subject to the rights of any irrevocable Beneficiary and
any assignee of record, all rights, options, and privileges belong to the Policy
Owner. If the Policy Owner is a natural person, upon the death of the Policy
Owner, all rights, options, and privileges pass to any successor-owner or
owners, if living; otherwise to the estate of the last Policy Owner to die.
BENEFICIARY. Policy Owners may name both primary and contingent Beneficiaries in
the application. Payments will be shared equally among Beneficiaries of the same
class unless otherwise stated. If a Beneficiary dies before the Insured,
payments will be made to any surviving Beneficiaries of the same class;
otherwise to any Beneficiaries of the next class; otherwise to the Policy Owner;
otherwise to the estate of the Policy Owner, if a natural person.
EXECUTIVE SELECT
30
<PAGE>
CHANGE OF BENEFICIARY The Policy Owner may change the Beneficiary by written
request at any time during the Insured's lifetime unless otherwise provided in
the previous designation of Beneficiary. The change will take effect as of the
date the change is recorded at the Administrative Office. ANLIC will not be
liable for any payment made or action taken before the change is recorded.
CHANGE OF POLICY OWNER OR ASSIGNMENT. In order to change the Policy Owner of the
Policy or assign Policy rights, an assignment of the Policy must be made in
writing and filed with ANLIC at its Administrative Office. Any such assignment
is subject to Outstanding Policy Debt. The change will take effect as of the
date the change is recorded at the Administrative Office, and ANLIC will not be
liable for any payment made or action taken before the change is recorded.
Payment of Death Benefit Proceeds is subject to the rights of any assignee of
record. A collateral assignment is not a change of ownership.
PAYMENT OF PROCEEDS. The Death Benefit Proceeds are subject first to any debt to
ANLIC and then to the interest of any assignee of record. The balance of any
Death Benefit Proceeds shall be paid in one sum to the designated Beneficiary
unless an Optional Method of Payment is selected. If no Beneficiary survives the
Insured, the Death Benefit Proceeds shall be paid in one sum to the Policy
Owner. If the Policy Owner is a natural person and is no longer living, the
Death Benefit Proceeds shall be paid to any successor-owner, if living;
otherwise to the Policy Owner's estate. Any proceeds payable upon Surrender
shall be paid in one sum unless an Optional Method of Payment is elected.
INCONTESTABILITY. ANLIC cannot contest the Policy or reinstated Policy during
the Insured's lifetime after it has been in force for two years from the Policy
Date (or reinstatement effective date). After the Policy Date, ANLIC cannot
contest an increase in the Specified Amount or addition of a rider during the
Insured's lifetime, after such increase or addition has been in force for two
years from its effective date. However, this two year provision shall not apply
to riders with their own contestability provision.
MISSTATEMENT OF AGE AND GENDER. If the age or gender of the Insured or any
person insured by rider has been misstated, the amount of the Death Benefit and
any added riders provided will be those that would be purchased by the most
recent deduction for the Cost of Insurance and the cost of any additional riders
at the Insured's correct age or gender. The Death Benefit Proceeds will be
adjusted correspondingly.
SUICIDE. The Policy does not cover suicide within two years of the Policy Date
unless otherwise provided by a state's Insurance law. If the Insured, while sane
or insane, commits suicide within two years after the Policy Date, ANLIC will
pay only the premiums received less any partial withdrawals, the cost for riders
and any outstanding Policy debt. If the Insured, while sane or insane, commits
suicide within two years after the effective date of any increase in the
Specified Amount, ANLIC's liability with respect to such increase will only be
its total Cost of Insurance applicable to the increase. The laws of Missouri
provide that death by suicide at any time is covered by the Policy, and further
that suicide by an insane person may be considered an accidental death.
POSTPONEMENT OF PAYMENTS. Payment of any amount upon Surrender, partial
withdrawal, Policy loans, benefits payable at death, and transfers may be
postponed whenever: (1) the New York Stock Exchange ("NYSE") is closed other
than customary weekend and holiday closings, or trading on the NYSE is
restricted as determined by the SEC; (2) the SEC by order permits postponement
for the protection of Policy Owners; (3) an emergency exists, as determined by
the SEC, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to determine the value of
Separate Account I's net assets; or (4) Surrenders, loans or partial withdrawals
from the Fixed Account may be deferred for up to 6 months from the date of
written request. Payments under the Policy of any amounts derived from premiums
paid by check may be delayed until such time as the check has cleared the Policy
Owner's bank.
REPORTS AND RECORDS. ANLIC will maintain all records relating to the Separate
Account I and will mail to the Policy Owner, at the last known address of
record, within 30 days after each Policy Anniversary, an annual report which
shows the current Accumulation Value, Net Cash Surrender Value, Death Benefit,
premiums paid, Outstanding Policy Debt and other information. Quarterly
statements are also mailed detailing Policy activity during the calendar
quarter. Instead of receiving an immediate confirmation of transactions made
pursuant to some types of periodic payment plan (such as a dollar cost averaging
program, or payment made by automatic bank draft or salary reduction
arrangement), the Policy Owner may receive confirmation of such transactions in
their quarterly statements. The Policy Owner should review the information in
these statements carefully. All errors or corrections
EXECUTIVE SELECT
31
<PAGE>
must be reported to ANLIC immediately to assure proper crediting to the Policy.
ANLIC will assume all transactions are accurately reported on quarterly
statements unless ANLIC is notified otherwise within 30 days after receipt of
the statement. The Policy Owner will also be sent a periodic report for the
Funds and a list of the portfolio securities held in each portfolio of the
Funds.
ADDITIONAL INSURANCE BENEFITS (RIDERS.) Subject to certain requirements, one or
more of the following additional insurance benefits may be added to a Policy by
rider. All riders are not available in all states. The cost, if any, of
additional insurance benefits will be deducted as part of the Monthly Deduction.
(See the section on Charges From Accumulation Value--Monthly Deduction.)
TERM COVERAGE RIDER. You may increase the total coverage by adding a term
insurance rider, at issue, on the Insured person's life. The death benefit
provided by the rider adjusts over time.
If you purchase this rider, the total specified amount is the total of the
specified amount for the base Policy plus the specified amount for this
rider. We generally restrict the total specified amount at issue to an
amount not more than ten times the base Policy specified amount. For
example, if the base Policy specified amount is $100,000, then the maximum
total specified amount we allow is $1,000,000.
The death benefit for the term insurance rider is the difference between
the total death benefit and the base Policy death benefit. (See the section
on Death Benefit Options.) The total death benefit depends upon which Death
Benefit option is in effect. If Option A is in effect, the total death
benefit is the greater of (1) the total specified amount, or (2) the
Accumulation Value multiplied by the appropriate Death Benefit percentage.
If Option B is in effect, the total death benefit is the greater of (1) the
total specified amount plus the Accumulation Value, or (2) the Accumulation
Value multiplied by the appropriate Death Benefit percentage.
Over time, it is possible that the base Policy Death Benefit could grow and
cause a corresponding reduction in the term rider death benefit. If the
base Policy Death Benefit becomes equal to the total death benefit, the
term rider death benefit drops to zero, but it will never be less than
zero. Even if the death benefit for the rider is reduced to zero, the rider
remains in effect until you remove it from the Policy. Therefore, if later
the base Policy death benefit is reduced below the total death benefit, the
rider death benefit reappears to maintain the total death benefit.
There is no defined premium for a given amount of term insurance coverage.
Instead, we deduct a monthly cost of insurance charge from the Accumulation
Value. The cost of insurance for this rider is calculated as the monthly
cost of insurance rate for the rider coverage multiplied by the term death
benefit in effect that month. The cost of insurance rates will be
determined by us from time to time. They will be based on the Insured's
gender, Issue Age, Policy duration ,and risk class. The monthly maximum
cost of insurance rates for this rider will be in the Policy.
Subject to certain limitations, after the first Policy Year you may
decrease the specified amount for this rider. The specified amount
remaining in force for this rider after any requested decrease may not be
less than $50,000. You may terminate all coverage under this rider at any
time after the first Policy Year. You may not increase the specified amount
of this rider nor add this rider to your Policy after issue. Coverage under
this rider is not convertible.
You may select only one of the following riders:
WAIVER OF MONTHLY DEDUCTIONS ON DISABILITY RIDER. This rider provides for
the waiver of Monthly Deductions for the Policy and all riders while the
Insured is disabled.
TOTAL DISABILITY RIDER. This rider provides for the payment by ANLIC of a
disability benefit in the form of premiums while the Insured is disabled.
The benefit amount may be chosen by the Policy Owner at the issue of the
rider. In addition, while the Insured is totally disabled, the Cost of
Insurance for the rider will not be deducted from Accumulation Value.
EXECUTIVE SELECT
32
<PAGE>
DISTRIBUTION OF THE POLICIES
The principal underwriter for the Policies is The Advisors Group, Inc. ("TAG"),
a second tier wholly owned subsidiary of Acacia Life Insurance Company and an
affiliate of ANLIC. TAG is registered as a broker-dealer with the SEC and is a
member of the National Association of Securities Dealers ("NASD"). ANLIC pays
TAG for acting as the principal underwriter under an Underwriting Agreement.
TAG offers its clients a wide variety of financial products and services and has
the ability to execute stock and bond transactions on a number of national
exchanges. TAG also serves as principal underwriter for ANLIC's variable
annuities and variable life contracts. It also has executed selling agreements
with a variety of mutual funds, issuers of unit investment trusts, and direct
participation programs.
The Policies are sold through Registered Representatives of TAG or other
broker-dealers which have entered into selling agreements with ANLIC or TAG.
These Registered Representatives are also licensed by state insurance officials
to sell ANLIC's variable life policies. Each of the broker-dealers with a
selling agreement is registered with the SEC and is a member of the NASD. In
1999, TAG received gross variable universal life compensation of $_____ and
retained $_____ in underwriting fees, and $_____ in brokerage commissions on
ANLIC's variable universal life policies.
Under these selling agreements, ANLIC pays commission to the broker-dealers,
which in turn pay commissions to the registered representative who sells this
Policy. The commission may equal an amount up to 30% of premium in the first
Policy Year and up to 12% of premium in renewal years. Broker-dealers may also
receive a service fee up to an annualized rate of .50% of the Accumulation Value
beginning in the sixth Policy Year. Compensation arrangements may vary among
broker-dealers. In addition, ANLIC may also pay override payments, expense
allowances, bonuses, wholesaler fees, and training allowances. Registered
Representatives who meet certain production standards may receive additional
compensation. ANLIC may reduce or waive the sales charge and/or other charges on
any Policy sold to directors, officers or employees of ANLIC or any of its
affiliates, employees and registered representatives of any broker dealer that
has entered into a sales agreement with ANLIC or TAG and the spouses or children
of the above persons. In no event will any such reduction or waiver be permitted
where it would be unfairly discriminatory to any person.
ADMINISTRATION
ANLIC has contracted with Ameritas Life Insurance Corp. ("Ameritas"), having its
principal place of business at 5900 "O" Street, Lincoln, Nebraska 68501 for it
to provide ANLIC with certain administrative services for the flexible premium
variable life policies. Ameritas is an affiliate of ANLIC and a member of the
Ameritas Acacia family of companies. Pursuant to the terms of a Service
Agreement, Ameritas will act as record keeping Service Agent for the policies
and riders for an initial term of three years and any subsequent renewals
thereof. Ameritas under the direction of ANLIC will perform Administrative
functions including issuance of policies for reinstatement, term conversion,
plan changes and guaranteed insurability options, generation of billing and
posting of premium, computation of valuations, calculation of benefits payable,
maintenance of administrative controls over all activities, correspondence, and
data, and providing management reports to ANLIC.
FEDERAL TAX MATTERS
The following discussion provides a general description of the federal income
tax considerations associated with the Policy and does not purport to be
complete or cover all situations. This discussion is not intended as tax advice.
No attempt has been made to consider in detail any applicable state or other tax
laws except premium taxes (See discussion in the section on Percent of Premium
Charge). This discussion is based upon ANLIC's understanding of the relevant
laws at the time of filing. Counsel and other competent tax advisors should be
consulted for more complete information before a Policy is purchased. ANLIC
makes no representation as to the likelihood of the continuation of present
federal income tax laws nor of the interpretations by the Internal Revenue
Service. Federal tax laws are subject to change and thus tax consequences to the
Insured, Policy Owner or Beneficiary may be altered.
EXECUTIVE SELECT
33
<PAGE>
(1) TAXATION OF ANLIC. ANLIC is taxed as a life insurance company under Part I
of Subchapter L of the Internal Revenue Code of 1986, (the "Code"). At this
time, since Separate Account I is not a separate entity from ANLIC, and its
operations form a part of ANLIC, it will not be taxed separately as a
"regulated investment company" under Subchapter M of the Code. Net
investment income and realized net capital gains on the assets of Separate
Account I are reinvested and automatically retained as a part of the
reserves of the Policy and are taken into account in determining the Death
Benefit and Accumulation Value of the Policy. ANLIC believes that Separate
Account I net investment income and realized net capital gains will not be
taxable to the extent that such income and gains are retained as reserves
under the Policy.
ANLIC does not currently expect to incur any federal income tax liability
attributable to Separate Account V with respect to the sale of the
Policies. Accordingly, no charge is being made currently to Separate
Account V for federal income taxes. If, however, ANLIC determines that it
may incur such taxes attributable to Separate Account V, it may assess a
charge for such taxes against Separate Account V.
ANLIC may also incur state and local taxes (in addition to premium taxes
for which a deduction from premiums is currently made). At present, they
are not charges against Separate Account V. If there is a material change
in state or local tax laws, charges for such taxes attributable to Separate
Account V, if any, may be assessed against Separate Account V.
(2) TAX STATUS OF THE POLICY. The Code (Section 7702) includes a definition of
a life insurance contract for federal tax purposes which places limitations
on the amount of premiums that may be paid for the Policy and the
relationship of the Accumulation Value to the Death Benefit. ANLIC believes
that the Policy meets the statutory definition of a life insurance
contract. If the Death Benefit of a Policy is changed, the applicable
defined limits may change. In the case of a decrease in the Death Benefit,
a partial withdrawal, a change in Death Benefit option, or any other such
change that reduces future benefits under the Policy during the first 15
years after a Policy is issued and that results in a cash distribution to
the Policy Owners in order for the Policy to continue complying with the
Section 7702 defined limits on premiums and Accumulation Values, such
distributions may be taxable in whole or in part as ordinary income to the
Policy Owner (to the extent of any gain in the Policy) as prescribed in
Section 7702.
The Code (Section 7702A) also defines a "modified endowment contract" for
federal tax purposes. If a life insurance policy is classified as a
modified endowment contract, distributions from it (including loans) are
taxed as ordinary income to the extent of any gain. This Policy will become
a "modified endowment contract" if the premiums paid into the Policy fail
to meet a 7-pay premium test as outlined in Section 7702A of the Code.
Certain benefits the Policy Owner may elect under this Policy may be
material changes affecting the 7-pay premium test. These include, but are
not limited to, changes in Death Benefits and changes in the Specified
Amount. Should the Policy become a "modified endowment contract" partial
withdrawals, full Surrenders, assignments, pledges, and loans (including
loans to pay loan interest) under the Policy will be taxable to the extent
of any gain under the Policy. A 10% penalty tax also applies to the taxable
portion of any distribution made prior to the taxpayer's age 59 1/2. The
10% penalty tax does not apply if the distribution is made because the
taxpayer becomes disabled as defined under the Code or if the distribution
is paid out in the form of a life annuity on the life of the taxpayer or
the joint lives of the taxpayer and Beneficiary. One may avoid a Policy
becoming a modified endowment contract by, among other things, not making
excessive payments or reducing benefits. Should you deposit excessive
premiums during a Policy Year, that portion that is returned by ANLIC
within 60 days after the Policy Anniversary Date will reduce the premiums
paid to avoid the Policy becoming a modified endowment contract. All
modified endowment policies issued by ANLIC to the same Policy Owner in any
12 month period are treated as one modified endowment contract for purposes
of determining taxable gain under Section 72(e) of the Internal Revenue
Code. Any life insurance policy received in exchange for a modified
endowment contract will also be treated as a modified endowment contract.
You should contact a competent tax professional before paying additional
premiums or making other changes to the Policy to determine whether such
payments or changes would cause the Policy to become a modified endowment
contract.
The Code (Section 817(h)) also authorizes the Secretary of the Treasury
(the "Treasury") to set standards by regulation or otherwise for the
investments of Separate Account I to be "adequately diversified" in order
for the
EXECUTIVE SELECT
34
<PAGE>
Policy to be treated as a life insurance contract for federal tax purposes.
If the Policy is not treated as life insurance because it fails the
diversification requirements, the Policy Owner is then subject to federal
income tax on gain in the Policy as it is earned. Separate Account I,
through the Funds, intends to comply with the diversification requirements
prescribed by the Treasury in regulations published in the Federal Register
on March 2, 1989, which affect how the Fund's assets may be invested.
While Calvert, an ANLIC affiliate, is the trust for certain of the
portfolios, ANLIC does not have control over any of the Funds or their
investments. However, ANLIC believes that the Funds will be operated in
compliance with the diversification requirements of the Internal Revenue
Code. Thus, ANLIC believes that the Policy will be treated as a life
insurance contract for federal tax purposes.
In connection with the issuance of regulations relating to the
diversification requirements, the Treasury announced that such regulations
do not provide guidance concerning the extent to which policy owners may
direct their investments to particular divisions of a separate account.
Regulations in this regard may be issued in the future. It is not clear
what these regulations will provide nor whether they will be prospective
only. It is possible that when regulations are issued, the Policy may need
to be modified to comply with such regulations. For these reasons, ANLIC
reserves the right to modify the Policy as necessary to prevent the Policy
Owner from being considered the owner of the assets of Separate Account V
or otherwise to qualify the Policy for favorable tax treatment.
The following discussion assumes that the Policy will qualify as a life
insurance contract for federal tax purposes.
(3) TAX TREATMENT OF POLICY PROCEEDS. ANLIC believes that the Policy will be
treated in a manner consistent with a fixed benefit life insurance policy
for federal income tax purposes. Thus, ANLIC believes that the Death
Benefit will generally be excludable from the gross income of the
Beneficiary under Section 101(a)(1) of the Code and the Policy Owner will
not be deemed to be in constructive receipt of the Accumulation Value under
the Policy until its actual Surrender. However, in the event of certain
cash distributions under the Policy resulting from any change which reduces
future benefits under the Policy, the distribution may be taxed in whole or
in part as ordinary income (to the extent of gain in the Policy.) See
previous discussion on Tax Status of the Policy. In addition, certain
exceptions apply to the general rule that death benefit proceeds are
non-taxable. Federal, state, and local tax consequences of ownership or
receipt of Policy proceeds depend on the circumstances of each Policy
Owner and Beneficiary.
ANLIC also believes that loans received under a Policy will be treated as
debt of the Policy Owner and that no part of any loan under a Policy will
constitute income to the Policy Owner so long as the Policy remains in
force, unless the Policy becomes a "modified endowment contract." See
discussion of modified endowment contract distributions in the section on
Tax Status of the Policy. Should the Policy lapse while Policy loans are
outstanding the portion of the loans attributable to earnings will become
taxable. Generally, interest paid on any loan under a Policy owned by an
individual will not be tax-deductible.
Except for policies with respect to a limited number of key persons of an
employer (both as defined in the Internal Revenue Code), and subject to
applicable interest rate caps and debt limits, the Health Insurance
Portability and Accountability Act of 1996 (the "Health Insurance Act")
generally repealed the deduction for interest paid or accrued after October
13, 1995 on loans from corporate owned life insurance policies on the lives
of officers, employees or persons financially interested in the taxpayer's
trade or business. Certain transitional rules for then existing debt are
included in the Health Insurance Act. The transitional rules included a
phase-out of the deduction for debt incurred (1) before January 1, 1996, or
(2) before January 1, 1997, for policies entered into in 1994 or 1995. The
phase-out of the interest expense deduction occurred over a transition
period between October 13, 1995 and January 1, 1999. There is also a
special rule for pre-June 21, 1986 policies. The Taxpayer Relief Act of
1997 ("TRA '97"), further expanded the interest deduction disallowance for
businesses by providing, with respect to policies issued after June 8,
1997, that no deduction is allowed for interest paid or accrued on any debt
with respect to life insurance covering the life of any individual (except
as noted above under pre-'97 law with respect to key persons and pre-June
21, 1986 policies). Any material change in a policy (including a material
increase in the death benefit) may cause the policy to be treated as a new
policy for purposes of this rule. TRA '97 also provides that no deduction
is permissible for premiums paid on a life insurance policy if the taxpayer
is directly or indirectly a beneficiary under the policy. Also under TRA
'97 and subject to certain exceptions, for policies issued after June 8,
1997, no deduction is allowed for that portion of a taxpayer's interest
expense that is allocable to unborrowed policy
EXECUTIVE SELECT
35
<PAGE>
cash values. This disallowance generally does not apply to policies owned
by natural persons. BUSINESSES CONTEMPLATING THE PURCHASE OF A NEW POLICY
OR A CHANGE TO AN EXISTING POLICY SHOULD CONSULT A QUALIFIED TAX ADVISOR
REGARDING THE TAX IMPLICATIONS OF THESE RULES FOR THEIR PARTICULAR
SITUATIONS.
The right to change Policy Owners (See the section on General Provisions.)
and the provision for partial withdrawals (See the section on Partial
Withdrawals.) may have tax consequences depending on the circumstances of
such exchange, change, or partial withdrawal. Upon complete Surrender, if
the amount received plus any Outstanding Policy Debt exceeds the total
premiums paid (the "basis") that are not treated as previously withdrawn by
the Policy Owner, the excess generally will be taxed as ordinary income.
Federal, state and local tax consequences of ownership or receipt of Death
Benefit Proceeds depend on applicable law and the circumstances of each
Policy Owner or Beneficiary. In addition, the tax consequences of using the
Policy in non-qualified deferred compensation, salary continuance,
split-dollar insurance, and executive bonus plans may vary depending on the
particular facts and circumstances of the arrangement. Further, if the
Policy is used in connection with tax-qualified retirement plans, certain
limitations prescribed by the Internal Revenue Service on, and rules with
respect to the taxation of, life insurance protection provided through such
plans may apply. The advice of qualified tax counsel should be sought in
connection with use of life insurance in non-qualified or qualified plans.
YOU SHOULD CONSULT QUALIFIED TAX AND/OR LEGAL ADVISORS TO OBTAIN COMPLETE
INFORMATION ON FEDERAL, STATE AND LOCAL TAX CONSIDERATIONS APPLICABLE TO
YOUR PARTICULAR SITUATION
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
ANLIC holds the assets of Separate Account I. The assets are kept physically
segregated and held separately and apart from the General Account assets, except
for the Fixed Account. ANLIC maintains records of all purchases and redemptions
of Funds' shares by each of the Subaccounts.
THIRD PARTY SERVICES
ANLIC is aware that certain third parties are offering investment advisory,
asset allocation, money management and timing services in connection with the
Policies. Except for Model Asset Allocation Programs (which include automatic
rebalancing) offered through Ibbotsen Associates (See Appendix B.), ANLIC does
not engage third parties to offer such services. In certain cases, ANLIC has
agreed to honor transfer instructions from other such services where it has
received powers of attorney, in a form acceptable to it, from the Policy Owners
participating in the service. Firms or persons offering such services do so
independently from any agency relationship they may have with ANLIC for the sale
of Policies. ANLIC takes no responsibility for the investment allocations and
transfers transacted on a Policy Owner's behalf by such third parties or any
investment allocation recommendations made by such parties. Policy Owners should
be aware that fees paid for such services are separate and in addition to fees
paid under the Policies.
VOTING RIGHTS
ANLIC is the legal holder of the shares held in the Subaccounts of Separate
Account I and as such has the right to vote the shares, to elect Directors of
the Funds, and to vote on matters that are required by the Investment Company
Act of 1940 and upon any other matter that may be voted upon at a shareholder
meeting. To the extent required by law, ANLIC will vote all shares of each of
the Funds held in Separate Account I at regular and special shareholder meetings
of the Funds according to instructions received from Policy Owners based on the
number of shares held as of the record date for such meeting.
The number of Fund shares in a Subaccount for which instructions may be given by
a Policy Owner is determined by dividing the Accumulation Value held in that
Subaccount by the net asset value of one share in the corresponding portfolio of
the Fund. Fractional shares will be counted. Fund shares held in each Subaccount
for which no timely instructions from Policy Owners are received and Fund shares
held in each Subaccount which do not support Policy Owner interests will be
voted by ANLIC in the same proportion as those shares in that Subaccount for
which timely instructions are received. Voting instructions to abstain on any
item to be voted will be applied on a pro rata basis to reduce the votes
eligible to be cast. Should applicable federal securities laws or regulations
permit, ANLIC may elect to vote shares of the Fund in its own right.
EXECUTIVE SELECT
36
<PAGE>
DISREGARD OF VOTING INSTRUCTION. ANLIC may, if required by state insurance
officials, disregard voting instructions if those instructions would require
shares to be voted to cause a change in the subclassification or investment
objectives or policies of one or more of the Funds' portfolios, or to approve or
disapprove an investment adviser or principal underwriter for the Funds. In
addition, ANLIC itself may disregard voting instructions that would require
changes in the investment objectives or policies of any portfolio or in an
investment adviser or principal underwriter for the Funds, if ANLIC reasonably
disapproves those changes in accordance with applicable federal regulations. If
ANLIC does disregard voting instructions, it will advise Policy Owners of that
action and its reasons for the action in the next annual report or proxy
statement to Policy Owners.
STATE REGULATION OF ANLIC
ANLIC, a stock life insurance company organized under the laws of Virginia, is
subject to regulation by the Virginia Department of Insurance. On or before
March 1 of each year an NAIC convention blank covering the operations and
reporting on the financial condition of ANLIC and Separate Account I as of
December 31 of the preceding year must be filed with the Virginia Department of
Insurance. Periodically, the Virginia Department of Insurance examines the
liabilities and reserves of ANLIC and Separate Account I.
In addition, ANLIC is subject to the insurance laws and regulations of other
states within which it is licensed or may become licensed to operate. The
Policies offered by the prospectus are available in the various states as
approved. Generally, the Insurance Department of any other state applies the
laws of the state of domicile in determining permissible investments.
EXECUTIVE OFFICERS AND DIRECTORS OF ANLIC
This list shows name and position(s) with ANLIC followed by the principal
occupations for the last five years. Where an individual has held more than one
position with an organization during the last 5-year period, the last position
held has been given.
CHARLES T. NASON, CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER*
Vice Chairman of Board and President, Director: Ameritas Acacia Mutual Holding
Company
Vice Chairman of Board and President, Director: Ameritas Holding Company
Chairman of the Board and Chief Executive Officer: Acacia Life Insurance Company
Also serves as a Director of direct and indirect subsidiaries of Acacia Life
Insurance Company.
ROBERT W. CLYDE, PRESIDENT AND CHIEF OPERATING OFFICER*
Executive Vice President, Director: Ameritas Acacia Mutual Holding Company
Executive Vice President, Director: Ameritas Holding Company
President and Chief Operating Officer: Acacia Life Insurance Company
Also serves as a Director of direct and indirect subsidiaries of Acacia Life
Insurance Company.
HALUK ARITURK, SENIOR VICE PRESIDENT, PRODUCT MANAGEMENT AND ADMINISTRATION**
Senior Vice President, Product Management and Administration: Acacia Life
Insurance Company
Executive Vice President, Ameritas Acacia Shared Services Center: Ameritas Life
Insurance Corp.
Formerly: Senior Vice President, Operations and Chief Actuary: Acacia Life
Insurance Company.
JOANN M. MARTIN, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, DIRECTOR**
Senior Vice President, Chief Financial Officer and Corporate Treasurer: Ameritas
Acacia Mutual Holding Company and Ameritas Holding Company
Senior Vice President and Chief Financial Officer: Acacia Life Insurance Company
Senior Vice President - Controller and Chief Financial Officer: Ameritas Life
Insurance Corp.
Also serves as officer and /or director of subsidiaries and/or affiliates of
Ameritas Life Insurance Corp.
BRIAN J. OWENS, SENIOR VICE PRESIDENT, CAREER DISTRIBUTION*
Senior Vice President, Career Distribution: Acacia Life Insurance Company;
Director: The Advisors Group, Inc.
EXECUTIVE SELECT
37
<PAGE>
BARRY C. RITTER, SENIOR VICE PRESIDENT AND CHIEF INFORMATION OFFICER**
Senior Vice President and Chief Information Officer, Acacia Life Insurance
Company
Senior Vice President - Information Services: Ameritas Life Insurance Corp.
ROBERT-JOHN H. SANDS, SENIOR VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE
SECRETARY*
Senior Vice President and General Counsel: Ameritas Acacia Mutual Holding
Company
Senior Vice President and General Counsel: Ameritas Holding Company
Senior Vice President, General Counsel and Corporate Secretary: Acacia Life
Insurance Company
Also serves as a Director of direct and indirect subsidiaries of Acacia Life
Insurance Company.
JANET L. SCHMIDT, SENIOR VICE PRESIDENT, HUMAN RESOURCES*
Senior Vice President and Director of Human Resources: Ameritas Acacia Mutual
Holding Company
Senior Vice President and Director of Human Resources: Ameritas Holding Company
Senior Vice President, Human Resources: Acacia Life Insurance Company
RICHARD W. VAUTRAVERS, SENIOR VICE PRESIDENT AND CORPORATE ACTUARY**
Senior Vice President and Corporate Actuary: Ameritas Life Insurance Corp.
Senior Vice President and Corporate Actuary: Acacia Life Insurance Company
WILLIAM W. LESTER, VICE PRESIDENT AND TREASURER**
Treasurer: Ameritas Life Insurance Corp.
Also serves as officer of subsidiaries of Ameritas Life Insurance Corp.
Vice President and Treasurer, Acacia Life Insurance Company
RENO J. MARTINI, DIRECTOR***
Senior Vice President, Calvert Group, Ltd.
* The principal business address of each person is Acacia National Life
Insurance Company, 7315 Wisconsin Avenue, Bethesda, Maryland 20814.
**The principal business address of each person is Ameritas Life Insurance
Corp., 5900 "O" Street, Lincoln, Nebraska 68510.
*** The principal business address of each person is Calvert Group, Ltd., 4550
Montgomery Avenue, Bethesda, Maryland 20814.
LEGAL MATTERS
All matters of Virginia law pertaining to the Policies, including the validity
of the Policy and ANLIC's right to issue the Policy under Virginia Insurance
Law, have been passed upon by Robert-John H. Sands, Senior Vice President and
General Counsel of ANLIC.
LEGAL PROCEEDINGS
There are no legal proceedings to which Separate Account I is a party or to
which the assets of the Separate Account I are subject. ANLIC is not involved in
any litigation that is of material importance in relation to its total assets or
that relates to Separate Account I.
EXPERTS
Actuarial matters included in this prospectus have been examined by
_____________________ of Ameritas Life Insurance Corp., as stated in the opinion
filed as an exhibit to the registration statement.
EXECUTIVE SELECT
38
<PAGE>
ADDITIONAL INFORMATION
A registration statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, with respect to the
Policy offered hereby. This Prospectus does not contain all the information set
forth in the registration statement and the amendments and exhibits to the
registration statement, to all of which reference is made for further
information concerning Separate Account I, ANLIC and the Policy offered hereby.
Statements contained in this Prospectus as to the contents of the Policy and
other legal instruments are summaries. For a complete statement of the terms
thereof reference is made to such instruments as filed.
FINANCIAL STATEMENTS
The financial statements of ANLIC _____________ should be considered only as
bearing on the ability of ANLIC to meet its obligations under the Policies. They
should not be considered as bearing on the investment performance of the assets
held in Separate Account I.
EXECUTIVE SELECT
39
<PAGE>
Appendix A
ILLUSTRATIONS
The following tables indicate how the Accumulation Value and Death Benefit
Proceeds vary with the investment experience of the Funds and differences
between the maximum and current costs of the Policy. The tables show how the
Accumulation Value and Death Benefit Proceeds of a Policy, issued to an Insured
of a certain age with regular annual premiums, differ over time if the
investment return on the assets of each portfolio were a uniform annual rate of
0%, 8% and 12%. The tables beginning on page A-2 illustrate a Policy issued to a
male, age 35, under a standard non-tobacco rate class. The Accumulation Value
and Death Benefit Proceeds would be different from those shown if the gross
annual investment rates of return averaged 0%, 8% and 12% over a period of years
but fluctuated above and below those averages for individual Policy Years. The
values also assume that no loans or partial withdrawals are made by the Policy
Owner.
The columns headed Maximum Charges reflect that throughout the life of the
Policy the monthly charge for the Cost of Insurance is based on the maximum
level permitted under the Policy, a Percent of Premium Charge of 5.0%, a monthly
Administrative Expense Charge of $15 for the first Policy Year and $12 each
month thereafter, a daily Asset-Based Administrative Expense Charge equal to an
annual rate of .15%, and a daily Mortality and Expense Risk Charge equal to an
annual rate of .95% for the first fifteen Policy Years and .50% each year
thereafter. The columns headed Current Charges assume that, throughout the life
of the Policy, the monthly Cost of Insurance is based on the current Cost of
Insurance Rate, a Percent of Premium Charge of 3.0%, a monthly Administrative
Expense Charge of $15 for the first Policy Year and $7 each month thereafter, a
daily Asset-Based Administrative Expense Charge equal to an annual rate of .15%,
and a daily Mortality and Expense Risk Charge equal to an annual rate of .75%
and .30% each year thereafter.
The amounts shown in the tables for Accumulation Value and Death Benefit
Proceeds reflect that the net investment return of the portfolios is lower than
the gross return listed due to investment advisory and other fees of the Funds.
The Policy values reflect a daily investment advisory fee and expenses at an
annual rate of .95% which represents an average charge for all the portfolios.
After a deduction of these amounts, the illustrated gross investment rates of
0%, 8%, and 12% correspond to approximate net annual rates of -1.85%, 6.15% and
10.15% respectively.
The hypothetical values shown in the tables do not reflect any charges for
federal income taxes against Separate Account I, since ANLIC is not currently
making such charges. However, such charges may be made in the future and, in
that event, the gross annual investment rate of return would have to exceed 0%,
8% and 12% by an amount to cover the tax charges to produce the Death Benefit
Proceeds and Accumulation Value illustrated (See, Federal Tax Considerations).
The tables illustrate the Policy values that would result based upon
hypothetical investment rates and premium payment schedules, if all Net Premiums
are allocated to Separate Account I and if no Policy loans, partial withdrawals
or changes in benefits are applied for. Upon request, ANLIC will provide a
comparable illustration based upon the Insured's age, gender, rate class, face
amount or premium schedule requested, and additional benefits. For unisex
policies, ANLIC will supply such illustrations without regard to the Insured's
gender. ANLIC reserves the right to charge a fee not to exceed $25 for this
service.
A-1
<PAGE>
ACACIA NATIONAL LIFE INSURANCE COMPANY
EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE
Prepared for: John Doe Annual Premium: $ 1,838
MALE Age 35 Non-Tobacco Riders: NONE Option A Face amount: $250,000
- --------------------------------------------------------------------------------
0.00 % Hypothetical Gross Annual Rate of Return
- --------------------------------------------------------------------------------
Current Charges Maximum Charges
- --------------------------------------------------------------------------------
End of Attained Annual Accumulation Surrender Death Surrender Death
Year Age Premium Value Value Benefit Value Benefit
- -------------------------------------------------------------------------------
1 36 1,838
- --------------------------------------------------------------------------------
2 37 1,838
- --------------------------------------------------------------------------------
3 38 1,838
- --------------------------------------------------------------------------------
4 39 1,838
- --------------------------------------------------------------------------------
5 40 1,838
- --------------------------------------------------------------------------------
6 41 1,838
- --------------------------------------------------------------------------------
7 42 1,838
- --------------------------------------------------------------------------------
8 43 1,838
- --------------------------------------------------------------------------------
9 44 1,838
- --------------------------------------------------------------------------------
10 45 1,838
- --------------------------------------------------------------------------------
11 46 1,838
- --------------------------------------------------------------------------------
12 47 1,838
- --------------------------------------------------------------------------------
13 48 1,838
- --------------------------------------------------------------------------------
14 49 1,838
- --------------------------------------------------------------------------------
15 50 1,838
- --------------------------------------------------------------------------------
16 51 1,838
- --------------------------------------------------------------------------------
17 52 1,838
- --------------------------------------------------------------------------------
18 53 1,838
- --------------------------------------------------------------------------------
19 54 1,838
- --------------------------------------------------------------------------------
20 55 1,838
- --------------------------------------------------------------------------------
25 60 1,838
- --------------------------------------------------------------------------------
30 65 1,838
- --------------------------------------------------------------------------------
31 66 1,838
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATIONS BY A POLICY OWNER AND THE DIFFERENT INVESTMENT RATE
OF RETURN FOR THE FUND PORTFOLIOS. THE DEATH BENEFIT AND ACCUMULATION VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATE OF
RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE
AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY ANLIC OR
THE FUNDS THAT THIS HYPOTHETICAL INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR OVER A PERIOD OF TIME.
A-2
<PAGE>
ACACIA NATIONAL LIFE INSURANCE COMPANY
EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE
Prepared for: John Doe Annual Premium: $ 1,838
MALE Age 35 Non-Tobacco Riders: NONE Option A Face amount: $250,000
- --------------------------------------------------------------------------------
8.0% Hypothetical Gross Annual Rate of Return
- --------------------------------------------------------------------------------
Current Charges Maximum Charges
- --------------------------------------------------------------------------------
End of Attained Annual Accumulation Surrender Death Surrender Death
Year Age Premium Value Value Benefit Value Benefit
- -------------------------------------------------------------------------------
1 36 1,838
- --------------------------------------------------------------------------------
2 37 1,838
- --------------------------------------------------------------------------------
3 38 1,838
- --------------------------------------------------------------------------------
4 39 1,838
- --------------------------------------------------------------------------------
5 40 1,838
- --------------------------------------------------------------------------------
6 41 1,838
- --------------------------------------------------------------------------------
7 42 1,838
- --------------------------------------------------------------------------------
8 43 1,838
- --------------------------------------------------------------------------------
9 44 1,838
- --------------------------------------------------------------------------------
10 45 1,838
- --------------------------------------------------------------------------------
11 46 1,838
- --------------------------------------------------------------------------------
12 47 1,838
- --------------------------------------------------------------------------------
13 48 1,838
- --------------------------------------------------------------------------------
14 49 1,838
- --------------------------------------------------------------------------------
15 50 1,838
- --------------------------------------------------------------------------------
16 51 1,838
- --------------------------------------------------------------------------------
17 52 1,838
- --------------------------------------------------------------------------------
18 53 1,838
- --------------------------------------------------------------------------------
19 54 1,838
- --------------------------------------------------------------------------------
20 55 1,838
- --------------------------------------------------------------------------------
25 60 1,838
- --------------------------------------------------------------------------------
30 65 1,838
- --------------------------------------------------------------------------------
31 66 1,838
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATIONS BY A POLICY OWNER AND THE DIFFERENT INVESTMENT RATE
OF RETURN FOR THE FUND PORTFOLIOS. THE DEATH BENEFIT AND ACCUMULATION VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATE OF
RETURN AVERAGED 8% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE
AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY ANLIC OR
THE FUNDS THAT THIS HYPOTHETICAL INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR OVER A PERIOD OF TIME.
A-3
<PAGE>
ACACIA NATIONAL LIFE INSURANCE COMPANY
EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE
Prepared for: John Doe Annual Premium: $ 1,838
MALE Age 35 Non-Tobacco Riders: NONE Option A Face amount: $250,000
- --------------------------------------------------------------------------------
12.0 % Hypothetical Gross Annual Rate of Return
- --------------------------------------------------------------------------------
Current Charges Maximum Charges
- --------------------------------------------------------------------------------
End of Attained Annual Accumulation Surrender Death Surrender Death
Year Age Premium Value Value Benefit Value Benefit
- -------------------------------------------------------------------------------
1 36 1,838
- --------------------------------------------------------------------------------
2 37 1,838
- --------------------------------------------------------------------------------
3 38 1,838
- --------------------------------------------------------------------------------
4 39 1,838
- --------------------------------------------------------------------------------
5 40 1,838
- --------------------------------------------------------------------------------
6 41 1,838
- --------------------------------------------------------------------------------
7 42 1,838
- --------------------------------------------------------------------------------
8 43 1,838
- --------------------------------------------------------------------------------
9 44 1,838
- --------------------------------------------------------------------------------
10 45 1,838
- --------------------------------------------------------------------------------
11 46 1,838
- --------------------------------------------------------------------------------
12 47 1,838
- --------------------------------------------------------------------------------
13 48 1,838
- --------------------------------------------------------------------------------
14 49 1,838
- --------------------------------------------------------------------------------
15 50 1,838
- --------------------------------------------------------------------------------
16 51 1,838
- --------------------------------------------------------------------------------
17 52 1,838
- --------------------------------------------------------------------------------
18 53 1,838
- --------------------------------------------------------------------------------
19 54 1,838
- --------------------------------------------------------------------------------
20 55 1,838
- --------------------------------------------------------------------------------
25 60 1,838
- --------------------------------------------------------------------------------
30 65 1,838
- --------------------------------------------------------------------------------
31 66 1,838
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATIONS BY A POLICY OWNER AND THE DIFFERENT INVESTMENT RATE
OF RETURN FOR THE FUND PORTFOLIOS. THE DEATH BENEFIT AND ACCUMULATION VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATE OF
RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE
AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY ANLIC OR
THE FUNDS THAT THIS HYPOTHETICAL INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR OVER A PERIOD OF TIME.
A-4
<PAGE>
ACACIA NATIONAL LIFE INSURANCE COMPANY
EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE
Prepared for: John Doe Annual Premium: $ 1,838
MALE Age 35 Non-Tobacco Riders: NONE Option B Face amount: $250,000
- --------------------------------------------------------------------------------
0.00 % Hypothetical Gross Annual Rate of Return
- --------------------------------------------------------------------------------
Current Charges Maximum Charges
- --------------------------------------------------------------------------------
End of Attained Annual Accumulation Surrender Death Surrender Death
Year Age Premium Value Value Benefit Value Benefit
- -------------------------------------------------------------------------------
1 36 1,838
- --------------------------------------------------------------------------------
2 37 1,838
- --------------------------------------------------------------------------------
3 38 1,838
- --------------------------------------------------------------------------------
4 39 1,838
- --------------------------------------------------------------------------------
5 40 1,838
- --------------------------------------------------------------------------------
6 41 1,838
- --------------------------------------------------------------------------------
7 42 1,838
- --------------------------------------------------------------------------------
8 43 1,838
- --------------------------------------------------------------------------------
9 44 1,838
- --------------------------------------------------------------------------------
10 45 1,838
- --------------------------------------------------------------------------------
11 46 1,838
- --------------------------------------------------------------------------------
12 47 1,838
- --------------------------------------------------------------------------------
13 48 1,838
- --------------------------------------------------------------------------------
14 49 1,838
- --------------------------------------------------------------------------------
15 50 1,838
- --------------------------------------------------------------------------------
16 51 1,838
- --------------------------------------------------------------------------------
17 52 1,838
- --------------------------------------------------------------------------------
18 53 1,838
- --------------------------------------------------------------------------------
19 54 1,838
- --------------------------------------------------------------------------------
20 55 1,838
- --------------------------------------------------------------------------------
25 60 1,838
- --------------------------------------------------------------------------------
30 65 1,838
- --------------------------------------------------------------------------------
31 66 1,838
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATIONS BY A POLICY OWNER AND THE DIFFERENT INVESTMENT RATE
OF RETURN FOR THE FUND PORTFOLIOS. THE DEATH BENEFIT AND ACCUMULATION VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATE OF
RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE
AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY ANLIC OR
THE FUNDS THAT THIS HYPOTHETICAL INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR OVER A PERIOD OF TIME.
A-5
<PAGE>
ACACIA NATIONAL LIFE INSURANCE COMPANY
EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE
Prepared for: John Doe Annual Premium: $ 1,838
MALE Age 35 Non-Tobacco Riders: NONE Option B Face amount: $250,000
- --------------------------------------------------------------------------------
8.0% Hypothetical Gross Annual Rate of Return
- --------------------------------------------------------------------------------
Current Charges Maximum Charges
- --------------------------------------------------------------------------------
End of Attained Annual Accumulation Surrender Death Surrender Death
Year Age Premium Value Value Benefit Value Benefit
- -------------------------------------------------------------------------------
1 36 1,838
- --------------------------------------------------------------------------------
2 37 1,838
- --------------------------------------------------------------------------------
3 38 1,838
- --------------------------------------------------------------------------------
4 39 1,838
- --------------------------------------------------------------------------------
5 40 1,838
- --------------------------------------------------------------------------------
6 41 1,838
- --------------------------------------------------------------------------------
7 42 1,838
- --------------------------------------------------------------------------------
8 43 1,838
- --------------------------------------------------------------------------------
9 44 1,838
- --------------------------------------------------------------------------------
10 45 1,838
- --------------------------------------------------------------------------------
11 46 1,838
- --------------------------------------------------------------------------------
12 47 1,838
- --------------------------------------------------------------------------------
13 48 1,838
- --------------------------------------------------------------------------------
14 49 1,838
- --------------------------------------------------------------------------------
15 50 1,838
- --------------------------------------------------------------------------------
16 51 1,838
- --------------------------------------------------------------------------------
17 52 1,838
- --------------------------------------------------------------------------------
18 53 1,838
- --------------------------------------------------------------------------------
19 54 1,838
- --------------------------------------------------------------------------------
20 55 1,838
- --------------------------------------------------------------------------------
25 60 1,838
- --------------------------------------------------------------------------------
30 65 1,838
- --------------------------------------------------------------------------------
31 66 1,838
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATIONS BY A POLICY OWNER AND THE DIFFERENT INVESTMENT RATE
OF RETURN FOR THE FUND PORTFOLIOS. THE DEATH BENEFIT AND ACCUMULATION VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATE OF
RETURN AVERAGED 8% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE
AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY ANLIC OR
THE FUNDS THAT THIS HYPOTHETICAL INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR OVER A PERIOD OF TIME.
A-6
<PAGE>
ACACIA NATIONAL LIFE INSURANCE COMPANY
EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE
Prepared for: John Doe Annual Premium: $ 1,838
MALE Age 35 Non-Tobacco Riders: NONE Option B Face amount: $250,000
- --------------------------------------------------------------------------------
12.0 % Hypothetical Gross Annual Rate of Return
- --------------------------------------------------------------------------------
Current Charges Maximum Charges
- --------------------------------------------------------------------------------
End of Attained Annual Accumulation Surrender Death Surrender Death
Year Age Premium Value Value Benefit Value Benefit
- -------------------------------------------------------------------------------
1 36 1,838
- --------------------------------------------------------------------------------
2 37 1,838
- --------------------------------------------------------------------------------
3 38 1,838
- --------------------------------------------------------------------------------
4 39 1,838
- --------------------------------------------------------------------------------
5 40 1,838
- --------------------------------------------------------------------------------
6 41 1,838
- --------------------------------------------------------------------------------
7 42 1,838
- --------------------------------------------------------------------------------
8 43 1,838
- --------------------------------------------------------------------------------
9 44 1,838
- --------------------------------------------------------------------------------
10 45 1,838
- --------------------------------------------------------------------------------
11 46 1,838
- --------------------------------------------------------------------------------
12 47 1,838
- --------------------------------------------------------------------------------
13 48 1,838
- --------------------------------------------------------------------------------
14 49 1,838
- --------------------------------------------------------------------------------
15 50 1,838
- --------------------------------------------------------------------------------
16 51 1,838
- --------------------------------------------------------------------------------
17 52 1,838
- --------------------------------------------------------------------------------
18 53 1,838
- --------------------------------------------------------------------------------
19 54 1,838
- --------------------------------------------------------------------------------
20 55 1,838
- --------------------------------------------------------------------------------
25 60 1,838
- --------------------------------------------------------------------------------
30 65 1,838
- --------------------------------------------------------------------------------
31 66 1,838
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATIONS BY A POLICY OWNER AND THE DIFFERENT INVESTMENT RATE
OF RETURN FOR THE FUND PORTFOLIOS. THE DEATH BENEFIT AND ACCUMULATION VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATE OF
RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE
AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY ANLIC OR
THE FUNDS THAT THIS HYPOTHETICAL INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR OVER A PERIOD OF TIME.
A-7
<PAGE>
Appendix B
AUTOMATIC REBALANCING PROGRAMS
To assist the Policy Owner in making a premium allocation decision among
Subaccounts, ANLIC offers automatic transfer programs. These programs are
designed to meet individual needs of the Policy Owner and are not guaranteed to
improve performance of the Policy.
The Policy Owner may elect the Automatic Rebalancing Program which will adjust
values in the Subaccounts to align with a specific percentage of total value in
Separate Account I. By placing a written allocation election form on file with
ANLIC, the Policy Owner may have amounts automatically transferred from the
Subaccounts on either a quarterly, semi-annual or annual basis.
The Policy Owner chooses the percentages to be used under the Automatic
Rebalancing Program. To assist the Policy Owner, TAG representatives offer a
service created by Ibbotson Associates to match the Policy Owner's risk
tolerance and investment objectives with a model Subaccount percentage
allocation formula. To use this service, the Policy Owner first completes a
questionnaire about risk tolerance and Policy performance objectives. The TAG
representative uses the completed responses to match the Policy Owner's needs to
one of ten different model percentage allocation formulas designed by Ibbotson.
The Policy Owner may then elect to follow the recommended percentage allocation
formula, or select a different formula.
Ibbotson Associates provides a valuable service to a Policy Owner who seeks to
follow the science of asset allocation. Some research studies have shown that
the asset allocation decision is the single largest determinant of portfolio
performance. Asset allocation combines the concepts of asset-liability
management, mean-variance optimization, simulation and economic forecasting. Its
objectives are to match asset classes and strategies to achieve better returns,
to reduce volatility and to attain specific goals such as avoidance of interest
rate or market risk.
B-1
<PAGE>
Appendix C
ACACIA NATIONAL LIFE INSURANCE COMPANY LOGO
EMPLOYEE BENEFIT PLAN
INFORMATION STATEMENT
ERISA COVERED PLANS
or Purchasers of a Policy for use in connection with a plan (including, among
others, 401(a) pension or profit-sharing plans and certain non-qualified plans)
covered by the Employees Retirement Income Security Act ("ERISA"), the purpose
of this statement is to inform you as an independent Fiduciary of the Employee
Benefit Plan, of the Sales Representative's relationship to and compensation
from Acacia National Life Insurance Company("ANLIC"). This disclosure also
describes certain fees and charges under the Executive Select Policy being
purchased from the Sales Representative.
The Sales Representative is appointed with ANLIC as its Sales Representative and
is a Securities Registered Representative hired to procure and submit to ANLIC
applications for contracts, including applications for Executive Select.
Commissions, Fees and Charges
The following commissions, fees and charges apply to an Executive Select
("Policy"):
Sales Commission: ANLIC pays commission to the broker-dealers, which in turn pay
commissions to the registered representative who sells this Policy. The
commission may equal an amount up to 30% of premium in the first Policy Year and
up to 12% of premium in renewal years. Broker-dealers may also receive a service
fee up to an annualized rate of .50% of the Accumulation Value beginning in the
sixth Policy Year. Compensation arrangements may vary among broker-dealers. In
addition, ANLIC may also pay override payments, expense allowances, bonuses,
wholesaler fees, and training allowances. Registered representatives who meet
certain production standards may receive additional compensation. From time to
time, additional sales incentives may be provided to broker-dealers.
Cost of Insurance: A monthly charge for the Policy and any riders. The Cost of
Insurance Rates are shown on the Policy Schedule.
Administrative Expense Charge: ANLIC will make a per Policy charge of $15.00 per
month (maximum $15.00) during the first Policy Year and $7.00 per month (maximum
$12.00) thereafter. This charge is guaranteed not to increase above the maximum.
The first ten Policy Years, there is a monthly charge per $1000 of initial
Specified Amount. In addition, there is a monthly charge per $1000 of each
increase in Specified Amount for ten years from the date of increase. The per
$1000 rates for both the initial Specified Amount and each increase vary by
Issue Age, gender, and risk class. (See the Policy Schedule for rates.)
Asset-Based Administrative Expense Charge: ANLIC makes a daily charge of the
value of the average daily net assets of Separate Account I under the policies
equal to an annual rate of 0.15% (maximum 0.15%). This charge is subtracted when
determining the daily accumulation unit value. This charge is guaranteed not to
increase above the maximum and is designed to reimburse ANLIC for administrative
expenses of issuing, servicing and maintaining the policies. ANLIC does not
expect to make a profit on this fee. No asset-based administrative expense
charge is imposed on the Fixed Account.
Mortality and Expense Risk Charge: ANLIC imposes a charge to compensate it for
bearing certain mortality and expense risks under the policies. ANLIC makes a
daily charge of the value of the average daily net assets of Separate Account I
under the policies equal to an annual rate of 0.75% (maximum 0.95%) in Policy
Years 1-15 and
C-1
<PAGE>
0.30% (maximum 0.50%) thereafter. This charge is subtracted when determining the
daily accumulation unit value. ANLIC guarantees that this charge will never
increase above the maximum. If this charge is insufficient to cover assumed
risks, the loss will fall on ANLIC. Conversely, if the charge proves more than
sufficient, any excess will be added to ANLIC's surplus. No mortality and
expense risk charge is imposed on the Fixed Account.
Partial and Full Withdrawals: Partial withdrawals may be made, subject to
certain restrictions. The Death Benefit will be reduced by the amount of the
partial withdrawal. A partial withdrawal is subject to a maximum charge not to
exceed the lesser of $50 or 2% of the amount withdrawn (currently, the partial
withdrawal charge is the lesser of $25 or 2%). You may Surrender the Policy at
any time for its Net Cash Surrender Value. There is no surrender charge.
Percent of Premium Charge: ANLIC will deduct a percent of premium charge upon
receipt of a premium payment. Currently, this charge is 3.0% of the premium paid
(maximum 5.0%).
Fund Investment Advisory Fees and Expenses: At the direction of the Policy
Owner, Separate Account I purchases shares of Funds which are available for
investment under this Policy. The net assets of Separate Account I will reflect
the value of the Fund shares and therefore, investment advisory fees and other
expenses of the Funds. A complete description of these fees and expenses is
contained in the Funds' prospectuses.
C-2
<PAGE>
INCORPORATION BY REFERENCE
The Registrant, Separate Account I, purchases or will purchase units from the
portfolios of these Funds at the direction of its Policy Owners. The
prospectuses of these Funds will be distributed with this prospectus and are
hereby incorporated by reference. The prospectuses incorporated by reference are
as follows:
The Alger American Fund
SEC File No. 33-21722
BT Insurance Funds Trust
SEC File No. 333-00479
Calvert Variable Series, Inc.
SEC File No. 2-80154
Variable Insurance Products Fund
SEC File No. 2-75010
Variable Insurance Products Fund II
SEC File No. 33-20773
Franklin Templeton Variable Insurance Products Trust
SEC File No. 33-23493
Neuberger Berman Advisers Management Trust
SEC File No. 2-88566
Oppenheimer Funds
SEC File No. 2-931-77
Van Eck Worldwide Insurance Trust
SEC File No. 33-13019
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore, or hereafter duly adopted pursuant to authority conferred
in that section.
Registrant makes the following representation pursuant to the National
Securities Markets Improvements Act of 1996:
Acacia National Life Insurance Company represents that the fees and charges
deducted under the contract, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by the insurance company.
RULE 484 UNDERTAKING
ANLIC'S By-laws provide as follows:
In the event any action, suit or proceeding is brought against a present or
former Director, elected officer, appointed officer or other employee because of
any action taken by such person as a Director, officer or other employee of the
Company or which he omitted to take as a Director, officer or employee of the
Company, the Company shall reimburse or indemnify him for all loss reasonably
incurred by him in connection with such action to the fullest extent permitted
by ss.13.1-696 through ss.13.1-704 of the Code of Virginia, as is now or
hereafter amended, except in relation to matters as to which such person shall
have been finally adjudged to be liable by reason of having been guilty of gross
negligence or willful misconduct in the performance of duties as such Director,
officer or employee. In case any such suit, action or proceeding shall result in
a settlement prior to final judgment and if, in the judgment of the Board of
Directors, such person in taking the action or failing to take the action
complained of was not grossly negligent or guilty of wilful misconduct in the
performance of his duty, the Company shall reimburse or indemnify him for the
amount of such settlement and for all expenses reasonably incurred in connection
with such action and its settlement. This right of indemnification shall not be
exclusive of any other rights to which such person may be entitled.
REPRESENTATION PURSUANT TO RULE 6E-3(T)
This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment
Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Acacia National Life Insurance Company Separate Account I, certifies that it
has caused this Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized in the City of Bethesda, County of
Montgomery, State of Maryland on this 27th day of January, 2000.
ACACIA NATIONAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I, Registrant
ACACIA NATIONAL LIFE INSURANCE COMPANY, Depositor
Attest: /s/ Robert-John H. Sands By:/s/ Charles T. Nason
----------------------- -------------------------
Secretary Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the Directors and Principal Officers of Acacia
National Life Insurance Company on the dates indicated.
SIGNATURE TITLE DATE
---------- ------ -----
/s/ Charles T. Nason Chairman of the Board January 27, 2000
- -------------------------- and Chief Executive Officer
Charles T. Nason
/s/ Robert W. Clyde President and Chief January 27, 2000
- -------------------------- Operating Officer
Robert W. Clyde
/s/ Robert-John H. Sands Senior Vice President, January 27, 2000
- -------------------------- General Counsel & Corporate
Robert-John H. Sands Secretary
/s/ Haluk Ariturk Senior Vice President, January 27, 2000
- -------------------------- Product Management and
Haluk Ariturk Administration
/s/ JoAnn M. Martin Senior Vice President, January 27, 2000
- -------------------------- Chief Financial Officer
JoAnn M. Martin
/s/ Reno J. Martini Director January 27, 2000
- --------------------------
Reno J. Martini
<PAGE>
/s/ Brian J. Owens Senior Vice President, January 27, 2000
- -------------------------- Career Distribution
Brian J. Owens
/s/ Janet L. Schmidt Senior Vice President, January 27, 2000
- -------------------------- Human Resources
Janet L. Schmidt
/s/ Barry C. Ritter Senior Vice President January 27, 2000
- -------------------------- and Chief Information Officer
Barry C. Ritter
/s/ Richard W. Vautravers Senior Vice President January 27, 2000
- -------------------------- and Corporate Actuary
Richard W. Vautravers
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
The prospectus consisting of 49 pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484.
Representations pursuant to Rule 6e-3(T).
The signatures.
Written consents of the following:
(a) (actuary)
(b) Robert-John H. Sands
(c) (auditors)
The Following Exhibits:
1. The Following exhibits correspond to those required by paragraph IX A of the
instructions as to exhibits in Form N- 8B-2.
(A)(1) Board Resolution Establishing Separate Account I /1
(A)(2) Not applicable
(A)(3)(a) Underwriting Agreement between The Advisors Group, Inc. and Acacia
National Life Insurance Company /2
(A)(3)(b) Form of Selling Agreement /3
(A)(3)(c) Form of Commission Schedule -To be filed by later amendment
(A)(4) Not Applicable
(A)(5)(a) Form of Policy -To be filed by later amendment
(A)(5)(b) Form of Policy Riders -To be filed by later amendment
(A)(6) Certificate of Organization of Acacia National Life Insurance Company /4
(A)(6) Bylaws of Acacia National Life Insurance Company /4
(A)(7) Not applicable
(A)(8)(a) Participation Agreement Alger American Fund /1
(A)(8)(b) Participation Agreement Calvert Variable Series, Inc. /1
(A)(8)(d) Participation Agreement Neuberger Berman Advisers Management Trust /1
(A)(8)(e) Participation Agreement Oppenheimer Variable Account Funds /4
(A)(8)(g) Participation Agreement Van Eck Worldwide Hard Assets Fund /1
(A)(9) Not Applicable
(A)(10) Form of Application for Policy - To be filed by later amendment
2. (a)(b) Opinion and Consent of Robert-John H. Sands Senior Vice President and
General Counsel
3. No financial statements will be omitted from the final Prospectus pursuant to
Instruction 1(b) or (c) or Part I.
4. Not applicable.
5. Not applicable.
7. (a)(b) Opinion and Consent of actuary - To be filed by later amendment
8. Consent of Independent Auditors - To be filed by later amendment
9. Not applicable.
/1 Incorporated by reference to the Pre-Effective Amendment No. 3 to the
Registration Statement on Form S-6 for Acacia National Life Insurance
Company Separate Account (File No. 33-90208), filed on October 11, 1995.
/2 Incorporated by reference to the initial Registration Statement for Acacia
National Life Insurance Company Separate Account II on Form N-4 ( File No
333 -03963), filed August 26, 1996.
/3 Incorporated by reference to the initial Registration Statement on Form S-6
for Acacia National Life Insurance Company Separate Account (File No.
33-90208), filed on March 10, 1995.
/4 Incorporated by Reference to the Post-Effective Amendment No. 3 to the
Registration Statement on Form S-6 for Acacia National Life Insurance
Company Separate Account ( File No. 33 -90208), filed on May 1, 1997.
<PAGE>
EXHIBIT INDEX
EXHIBIT
Opinion and Consent of Robert-John H. Sands
EXHIBIT 2. (A)(B)
Opinion and Consent of Robert-John H. Sands
<PAGE>
ACACIA NATIONAL LIFE INSURANCE COMPANY LOGO
THE ACACIA GROUP
7315 Wisconsin Avenue Bethesda, Maryland 20814 (301)280-1000
January 28, 2000
Acacia National Life Insurance Company
7315 Wisconsin Avenue
Bethesda, Maryland 20814
Gentlemen:
With reference to the Form S-6 filed by Acacia National Life Insurance Company
and Acacia National Life Insurance Company Separate Account I with the
Securities & Exchange Commission covering flexible premium life insurance
policies, I have examined such documents and such laws as I considered necessary
and appropriate, and on the basis of such examination, it is my opinion that:
1. Acacia National Life Insurance Company is duly organized and validly
existing under the laws of the Commonwealth of Virginia and has been
duly authorized to issue individual flexible premium variable life
policies by the Insurance Department of the Commonwealth of Virginia.
2. Acacia National Life Insurance Company Separate Account I is a duly
authorized and existing separate account established pursuant to the
provisions of Virginia, ss.38.2-3113.
3. The survivorship flexible premium variable universal life policies, when
issued as contemplated by said Form S-6 Registration Statement, will
constitute legal, validly issued and binding obligations of Acacia
National Life Insurance Company.
I hereby consent to the filing of this opinion as an exhibit to said Form S-6
Registration Statement and to the use of my name under the caption "Legal
Matters" in the Prospectus contained in the Registration Statement.
Sincerely,
/s/ Robert-John H. Sands
Robert-John H. Sands
Senior Vice President, Corporate Secretary and General Counsel
Acacia Mutual Holding Corporation, Acacia Financial Group, Ltd., Acacia Life
Insurance Company, Acacia National Life Insurance Company, Acacia Financial
Corporation, Calvert Group, Ltd., Acacia Federal Savings Bank, Enterprise
Resources, LLC, Acacia Realty Corporation, The Advisors Group, Inc.
- --------------------------------------------------------------------------------
NATIONAL HEADQUARTERS, Washington, DC
