FILE NO. 33-90474
811-9002
As Filed with the Securities and Exchange Commission December 18, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 6 [X]
and /or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 7 [X]
SEPARATE ACCOUNT ONE
(Exact Name of Registrant)
NORTHERN LIFE INSURANCE COMPANY
(Name of Depositor)
1501 Fourth Avenue, Seattle, Washington 98111
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code: (206) 292-1111
Stewart D. Gregg
Northern Life Insurance Company
20 Washington Avenue South
Minneapolis, Minnesota 55401
(Name and Address of Agent for Service)
Approximate date of proposed Public Offering:
As soon as practicable after the Registration Statement becomes effective.
It is proposed that this filing will become effective
(check appropriate space)
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on January 1, 1999, pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485
[ ] on (date), pursuant to paragraph (a) of Rule 485.
If appropriate, check the following box:
[ ] This Post-Effective Amendment designates a new effective date of a
previously filed Post-Effective Amendment.
Title of Securities Being Registered: Variable Annuity Contracts Issued by a
Registered Separate Account
<PAGE>
SEPARATE ACCOUNT ONE
CROSS REFERENCE SHEET PURSUANT TO RULE 495(a)
FORM N-4
ITEM NUMBER PART A HEADING IN PROSPECTUS
- ------------- ------------------------------------------------------
1 Cover Page
2 Definitions
3 Summary
4 Condensed Financial Information
5 The Company; The Variable Account; Investments
of the Variable Account
6 Charges Made by the Company
7 The Contracts
8 Annuity Provisions
9 The Contracts
10 The Contracts
11 The Contracts
12 Federal Tax Status
13 Legal Proceedings
14 Statement of Additional Information Table of
Contents
PART B HEADING IN STATEMENT OF ADDITIONAL INFORMATION
------------------------------------------------------
15 Cover Page
16 Table of Contents
17 Introduction
18 Not Applicable
19 Distribution of the Contracts
20 Distribution of the Contracts
21 Calculation of Yields and Total Returns
22 Annuity Provisions (In Prospectus)
23 Financial Statements
PART C HEADINGS
---------------
24 Financial Statements and Exhibits
25 Directors and Officers of the Depositor
26 Persons Controlled by or Under Common Control
with the Depositor or Registrant
27 Number of Contract Owners
28 Indemnification
29 Principal Underwriter
30 Location of Accounts and Records
31 Not Applicable
32 Undertakings
i
<PAGE>
NORTHERN LIFE INSURANCE COMPANY
INDIVIDUAL DEFERRED VARIABLE/FIXED ANNUITY CONTRACTS
ISSUED BY
SEPARATE ACCOUNT ONE
SUPPLEMENT DATED JANUARY 1, 1999 TO
PROSPECTUS DATED MAY 1, 1998
ADDITIONAL SUB-ACCOUNT INVESTMENT OPTIONS
Separate Account One has added two new Sub-Accounts. Each of these
Sub-Accounts invests in an additional Fund. Purchase Payments and Contract
Value may now be allocated into either or both of these two new Funds, subject
to certain limitations set out in the Prospectus and this Supplement. The two
newly available Fund investment options are:
INVESTMENT FUNDS INVESTMENT OBJECTIVE
- ---------------- ---------------------
FIDELITY VARIABLE INSURANCE PRODUCTS
FUND III (VIP III):
VIP III Growth Opportunities Portfolio Capital Growth
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST:
Socially Responsive Portfolio Long-term Capital
Appreciation
The following information should be added at page 8 of the Prospectus to
the Section of the Prospectus entitled "Summary of Contract Expenses" under the
heading "Annual Investment Fund Expenses after Reimbursements":
<TABLE>
<CAPTION>
MANAGEMENT TOTAL FUND
(ADVISORY) OTHER ANNUAL
FEES EXPENSES EXPENSE
------------ ---------- -----------
<S> <C> <C> <C>
Fidelity VIP III Growth Opportunities
Portfolio (d)(k) ............................. 0.60% 0.14% 0.74%
Neuberger Berman Advisers Management Trust
Socially Responsive Portfolio (d)(l) ......... 0.85% 0.65% 1.50%
Northstar Galaxy Trust Emerging Growth
Portfolio (m) ................................ 0.85% 0.05% 0.90%
Northstar Galaxy Trust International Value
Portfolio (m) ................................ 0.95% 0.05% 1.00%
</TABLE>
These figures are before the effect of expense reimbursements. The expense
information for the Northstar Galaxy Trust Emerging Growth Portfolio and
International Value Portfolio has been restated to reflect current fees
effective November 9, 1998.
- ------------------
(d) The Company or its affiliates may receive compensation from an affiliate or
affiliates of certain of the Funds based upon an annual percentage of the
average net assets held in that Fund by the Company and by certain of the
Company's insurance company affiliates. These amounts are intended to
compensate the Company or the Company's affiliates for administrative,
recordkeeping, and in some cases, distribution, and other services provided
by the Company and its affiliates to Funds and/or the Fund's affiliates.
Payments of such amounts by an affiliate or affiliates of the Funds do not
increase the fees paid by the Funds or their shareholders. The percentage
paid may vary from one fund company to another.
(k) A portion of the brokerage commissions that the fund pays was used to
reduce fund expenses. In addition, the fund has entered into arrangements
with its custodian whereby credits realized as a result of uninvested cash
balances were used to reduce custodian expenses. Including these
reductions, the total operating expenses would have been .73% for VIP III
Growth Opportunities Portfolio.
(l) Neuberger Berman Advisers Management Trust is comprised of separate
Portfolios, the following of which are available as funding options under
the contract: Limited Maturity Bond Portfolio, Partners Portfolio and
Socially Responsive Portfolio ("Portfolio series"). Unlike the other
funding options available under the contract, each of these Portfolio
series invests all of its net investable assets in the AMT Limited Maturity
Bond Investments, AMT Partners Investments, and AMT Socially Responsive
Investments, respectively, of Advisers Managers Trust ("Investment
series").
<PAGE>
The Investment series in turn, invest directly in securities. For a more
complete discussion of this structure, please see the prospectus for
Neuberger Berman Advisers Management Trust Limited Maturity Bond Portfolio,
Partners Portfolio and Socially Responsive Portfolio. Please note that the
figures reported under "Management Fees" and "Other Expenses" include the
aggregate of (i) the management fees paid by the Investment series, (ii)
the administration fees paid by the Portfolio series, and (iii) all other
expenses in the aggregate for the Investment series and Portfolio series,
respectively.
Estimated expenses reflect expense reimbursement. Neuberger Berman
Management Inc. ("NBMI") has undertaken to reimburse the Socially
Responsive Portfolio for certain operating expenses, including the
compensation of NBMI and excluding taxes, interest, extraordinary expenses,
brokerage commissions and transaction costs, that exceed in the aggregate,
1.50% of the average daily net asset value of the Socially Responsive
Portfolio. The Socially Responsive Portfolio has not commenced operations
as of November 30, 1998, and therefore these expense figures are estimated.
Estimated expenses are expected to be 2.50% for the fiscal period ending
December 31, 1998, prior to the reimbursement. The expense reimbursement
policy is subject to termination upon 60 days written notice. There can be
no assurance that this policy will be continued. See "Expense Limitation"
in the Socially Responsive Portfolio prospectus for further information.
(m) The investment adviser to the Northstar Galaxy Trust has agreed to
reimburse the Emerging Growth Portfolio for any expenses in excess of 0.90%
of its average daily net assets. The investment adviser to the Northstar
Galaxy Trust has also agreed to reimburse the International Value Portfolio
for any expenses in excess of 1.00% of its average daily net assets. On an
annualized basis, absent expense reimbursements, actual expenses are
estimated to be 1.11% for the Emerging Growth Portfolio and 2.61% for the
International Value Portfolio. Expense reimbursements are voluntary. There
is no assurance of ongoing reimbursement.
The following information should be added at page 9 of the Prospectus to
the section of the Prospectus entitled "Summary of Contract Expenses" under the
heading "Examples," in the chart listing certain expenses following a full
withdrawal of the Contract Value:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------- --------------------- --------------------- --------------------
TRANSFER FLEX TRANSFER FLEX TRANSFER FLEX TRANSFER FLEX
SERIES SERIES SERIES SERIES SERIES SERIES SERIES SERIES
---------- -------- ---------- -------- ---------- -------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fidelity VIP III Growth
Opportunities Portfolio 80 98 124 143 149 180 272 272
Neuberger Berman Advisers
Management Trust Socially
Responsive Portfolio 87 105 146 165 188 217 350 350
Northstar Galaxy Trust
Emerging Growth Portfolio 81 100 129 148 157 188 288 288
Northstar Galaxy Trust
International Value Portfolio 83 101 133 152 165 195 304 304
</TABLE>
2
<PAGE>
The following information should be added at page 10 of the Prospectus to
the section of the Prospectus entitled "Summary of Contract Expenses" under the
heading "Examples," in the chart listing certain expenses following
annuitization of the Contract:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------- --------------------- --------------------- --------------------
TRANSFER FLEX TRANSFER FLEX TRANSFER FLEX TRANSFER FLEX
SERIES SERIES SERIES SERIES SERIES SERIES SERIES SERIES
---------- -------- ---------- -------- ---------- -------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fidelity VIP III Growth
Opportunities Portfolio 24 24 75 75 129 129 272 272
Neuberger Berman Advisers
Management Trust Socially
Responsive Portfolio 32 32 99 99 168 168 350 350
Northstar Galaxy Trust
Emerging Growth Portfolio 26 26 80 80 137 137 288 288
Northstar Galaxy Trust
International Value Portfolio 27 27 85 85 145 145 304 304
</TABLE>
The following information should be added at page 14 of the Prospectus to
the "Condensed Financial Information" section:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31 DECEMBER 31
1995 1996 1997
------------- ------------- ------------
<S> <C> <C> <C>
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III (VIP III):
VIP III Growth Opportunities Portfolio (From January 1,
1999)
Beginning of period ................................... N/A N/A N/A
End of period ......................................... N/A N/A N/A
Units of outstanding at end of period ................. N/A N/A N/A
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST:
Socially Responsive Portfolio (From January 1, 1999)
Beginning of period ................................... N/A N/A N/A
End of period ......................................... N/A N/A N/A
Units of outstanding at end of period ................. N/A N/A N/A
</TABLE>
The Fidelity Variable Insurance Products Fund III Growth Opportunities
Portfolio and Neuberger Berman Advisers Management Trust Socially
Responsive Portfolio were not available under the Contracts prior to
January 1, 1999.
The following information replaces the similar information found on page
18 of the Prospectus starting in the second paragraph of the section
"Investments of the Variable Account":
With the addition of the two new Sub-Accounts, there are currently
twenty-nine Sub-Accounts, each of which invests in shares of one of the
Funds. The Company reserves the right, subject to compliance with
applicable law, to offer additional Sub-Accounts, each of which could
invest in a new fund with a specified investment objective. A Contract
Owner is limited to participating in a maximum of sixteen Sub-Accounts over
the lifetime of the Contract. The Contract Owner would not be required to
select the Sub-Accounts in advance, but upon reaching participation in
sixteen Sub-Accounts since issue of the Contract, the Contract Owner would
only be able to transfer within the sixteen Sub-Accounts already selected
and which are still available under the Variable Account.
For example, assume a Contract Owner selects six Sub-Accounts. Later,
the Contract Owner transfers out of all of the six initial selections and
chooses ten different Sub-Accounts, none of which are the same as the
original six selections. The Contract Owner has now used the maximum
selection of sixteen Sub-Accounts. The Contract Owner may still allocate
Purchase Payments or transfer Contract Values among any of the sixteen
Sub-Accounts that were previously selected. However, the Contract Owner may
not allocate funds to the remaining Sub-Accounts at any time.
3
<PAGE>
NEW FIXED ACCOUNT OPTION
The Separate Account has added a new Fixed Account option, Fixed Account
C. The minimum payment to Fixed Account C is $5,000. The principal purpose of
Fixed Account C is to allow the Contract Owner to utilize "Dollar Cost
Averaging," a long term investment method which provides for regular
investments over time in a level or variable amount. Amounts in Fixed Account C
will earn various rates of interest, with the minimum being the guaranteed
rate. Interest payable on Fixed Account C is expected to be higher than the
interest payable by Fixed Account A or B.
A Contract Owner with Contract Value allocated to Fixed Account C may
direct the Company to automatically transfer a fixed dollar amount or a
specified percentage of Fixed Account C Value to any one or more other
Sub-Accounts. Reallocations from Fixed Account C to the Variable Account must
begin immediately and must be in substantially equal payments over a period of
twelve (12) months or less. If additional Purchase Payment(s) are received for
allocation to Fixed Account C, the balance of Fixed Account C will be adjusted
to reflect the subsequent payment(s) and reallocations will be recalculated
based on the remaining 12 month period.
Fixed Account C Contract Value may only be transferred to one or more
Sub-Accounts, and such transfers may only be made by Dollar Cost Averaging
Reallocations. Reallocations from Fixed Account C to Fixed Account A or Fixed
Account B or from Fixed Account A, Fixed Account B, or the Variable Account to
Fixed Account C are not permitted. You may change the Variable Sub-Account(s)
receiving Fixed Account C Reallocations with written notice prior to the
Reallocation Date. Only one reallocation of Fixed Account C shall take place at
any one time.
Contract Values in Fixed Account C are not eligible for automatic
reallocations. See the "Automatic Reallocation" heading in the "The Contracts"
section of the Prospectus at page 30.
Reallocations from Fixed Account C will be transferred on the 28th day of
each month. If the mode of your Reallocation is less frequent than monthly, the
Reallocation Date will be the 28th day of the last month in the modal period.
The Contract Owner may discontinue dollar cost averaging at any time by
notifying the Company in writing. If reallocations from Fixed Account C are
discontinued prior to the end of the twelve (12) month term, the remaining
balance of Fixed Account C will be reallocated to Fixed Account A.
The Fixed Account C Contract Value is equal the sum of Purchase Payments
allocated to Fixed Account C, and interest credited to Fixed Account C, less
reallocations out of Fixed Account C, withdrawals from Fixed Account C
(including amounts applied to purchase annuity payouts, withdrawal charges and
applicable premium taxes) and deductions for the Annual Contract Charge. The
Contract Value for a Contract shall equal the sum of the Variable Account
Contract Value, plus the sum of the Fixed Account A, Fixed Account B and Fixed
Account C Contract Values. Reallocations of this type may be made on a monthly,
quarterly, semi-annual or annual basis.
The Company makes no guarantees that Dollar Cost Averaging will result in
a profit or protect against loss.
The Company reserves the right to discontinue, modify or suspend Dollar
Cost Averaging. Although the Company currently charges no fees for
reallocations made under the Dollar Cost Averaging program, the Company
reserves the right to charge a processing fee not to exceed $25 for each Dollar
Cost Averaging reallocation from Fixed Account C.
Contract Owners interested in Dollar Cost Averaging may obtain a separate
application form and full information concerning this service and its
restrictions from their registered representatives.
Contributions and reallocations to Fixed Account C under the Contracts
become part of the general account of the Company (the "General Account"),
which supports insurance and annuity obligations. Because of exemptive and
exclusionary provisions, interests in the Fixed Account have not been
registered under the Securities Act of 1933 ("1933 Act") nor is the Fixed
Account registered as an investment company under the Investment Company Act of
1940 ("1940 Act"). Accordingly, neither the Fixed Account nor any interests
therein are generally subject to the provisions of the 1933 or 1940 Acts and
the Company has been advised that the staff of the Securities and Exchange
Commission has not reviewed the disclosures in the Prospectus which relate to
the fixed portion of the Contracts. Disclosures regarding the fixed portion of
the Contracts and the Fixed Accounts, however, may be subject to certain
4
<PAGE>
generally applicable provisions of the federal securities laws relating to the
accuracy and completeness of statements made in prospectuses.
THE TWO NEW FUND INVESTMENT OPTIONS DESCRIBED IN THIS SUPPLEMENT AND THE
NEW FIXED ACCOUNT C ARE NOT AVAILABLE IN ALL STATES.
CHANGES TO NORTHSTAR PORTFOLIOS
The Northstar Variable Trust and the individual Northstar Portfolios have
changed their names, as follows:
<TABLE>
<CAPTION>
OLD NAME NEW NAME
- ---------------------------------------------- -------------------------------------------
<S> <C>
Northstar Variable Trust Northstar Galaxy Trust
Northstar Variable Trust Growth Northstar Galaxy Trust Growth + Value
Portfolio Portfolio
Northstar Variable Trust International Northstar Galaxy Trust International Value
Value Portfolio Portfolio
Northstar Variable Trust Income and Northstar Galaxy Trust Emerging Growth
Growth Portfolio Portfolio
Northstar Variable Trust Multi-Sector Northstar Galaxy Trust Multi-Sector Bond
Bond Portfolio Portfolio
Northstar Variable Trust High Yield Northstar Galaxy Trust High Yield Bond
Bond Portfolio Portfolio
</TABLE>
In addition, the Northstar Galaxy Trust Emerging Growth Portfolio
(formerly the Northstar Variable Trust Income and Growth Portfolio) has changed
its investment objective from seeking income balanced with capital appreciation
to seeking long-term capital appreciation.
In addition, certain of the Northstar Portfolios have reduced their
voluntary expense reimbursements, as follows:
<TABLE>
<CAPTION>
PORTFOLIO FORMER EXPENSE LIMITATION CURRENT EXPENSE LIMITATION
- --------------------------------------------- --------------------------- ---------------------------
<S> <C> <C>
Northstar Galaxy Trust
Emerging Growth Portfolio ............. 0.80% 0.90%
Northstar Galaxy Trust
International Value Portfolio ......... 0.80% 1.00%
</TABLE>
These expense limitations are voluntary and can be changed.
SUB-ACCOUNT CLOSINGS
Effective April 30, 1999, Sub-Accounts investing in the following Funds
(the "Closed Funds") are being closed to new monies, and will no longer accept
additional premiums or transfers:
-- Fidelity VIP Overseas Portfolio
-- Fidelity VIP II Asset Manager Portfolio
If new premiums are received on or after April 30 for investment in one
or more of the Closed Funds, these premiums will automatically be
re-allocated to the money market fund option, unless we receive
instructions from you to the contrary. If we receive additional premiums
but you have already reached the 16 Fund limitation (as outlined in the
Prospectus), and the money market fund was not one of these Funds, then the
additional premiums will be re-allocated pro rata to the other Funds to
which you have allocated monies, and which are not being closed.
If you have elected the dollar cost averaging service, and one or more
of the transferee funds you have selected is a Closed Fund, then the
service will be terminated and you will be required to complete a new
dollar cost averaging form specifying new transferee fund(s).
If you have elected the portfolio rebalancing service, and one or more
of the Funds you have elected is a Closed Fund, then the service will be
terminated. If you wish to resume this service, you will be required to
complete a new portfolio rebalancing form, and re-allocate all monies
currently allocated to Closed Funds to Funds that have not been closed.
5
<PAGE>
OTHER MATTERS
The following sentence replaces the first sentence of the first paragraph
found on page 22 of the Prospectus in the section entitled "Partial Waiver of
Withdrawal Charge":
During any 12-month period after the first Contract Year, the Contract
Owner may withdraw a portion of the Contract Value without a Withdrawal
Charge.
The following paragraph should be added on page 39 of the Prospectus to
the section entitled "Reports to Contract Owners" starting after the first
paragraph:
Effective January 1, 1999, to reduce expenses, only one copy of most
financial reports and prospectuses will be mailed to your household, even
if you or other persons in your household have more than one Contract. Call
(800) 426-7050 (ext. 2505) if you need additional copies of financial
reports, prospectuses, or historical account information.
THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY THE PROSPECTUS FOR THE
CONTRACTS DATED MAY 1, 1998 AND ALL ACCOMPANYING FUND PROSPECTUSES, INCLUDING
THE PROSPECTUSES FOR THE FIDELITY VIP III GROWTH OPPORTUNITIES PORTFOLIO AND
THE NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST SOCIALLY RESPONSIVE PORTFOLIO.
Additional information about the Contracts, the Company and the Variable
Account is contained in a Statement of Additional Information dated January 1,
1999, which has been filed with the Securities and Exchange Commission ("SEC")
and is available upon request without charge by writing to Northern Life
Insurance Company, P.O. Box 12530, Seattle, Washington 98111, by calling (800)
426-7050 (ext. 2505), or by accessing the SEC's internet web site
(http://www.sec.gov). The Statement of Additional Information is incorporated
by reference in this Supplement. The Table of Contents for the Statement of
Additional Information may be found on page 41 of the Prospectus.
6
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
FOR NORTHERN
------------------
INDIVIDUAL DEFERRED VARIABLE/FIXED ANNUITY CONTRACTS
ISSUED BY
SEPARATE ACCOUNT ONE
AND
NORTHERN LIFE INSURANCE COMPANY
This Statement of Additional Information is not a Prospectus, but should
be read in conjunction with the Prospectus dated May 1, 1998 as supplemented by
the Prospectus Supplement dated January 1, 1999 (the "Prospectus") relating to
the Individual Deferred Variable/Fixed Annuity Contracts issued by Separate
Account One (the "Variable Account") and Northern Life Insurance Company (the
"Company"). Much of the information contained in this Statement of Additional
Information expands upon subjects discussed in the Prospectus. A copy of the
Prospectus may be obtained from Washington Square Securities, Inc., 20
Washington Avenue South, Minneapolis, Minnesota 55401.
Capitalized terms used in this Statement of Additional Information that
are not otherwise defined herein shall have the meanings given to them in the
Prospectus.
------------------
TABLE OF CONTENTS
PAGE
-----
Introduction ..................................... 2
Custody of Assets ................................ 2
Independent Auditors ............................. 2
Distribution of the Contracts .................... 2
Calculation of Yields and Total Returns .......... 3
Company Holidays ................................. 11
Financial Statements ............................. 11
------------------
The date of this Statement of Additional Information is January 1, 1999.
1
<PAGE>
INTRODUCTION
The Individual Deferred Variable/Fixed Annuity Contracts described in the
Prospectus are flexible Purchase Payment Contracts. The Contracts are sold to
or in connection with retirement plans which may or may not qualify for special
federal tax treatment under the Internal Revenue Code. (See "Federal Tax
Status" on page 34 of the Prospectus.) Annuity Payouts under the Contracts are
deferred until a later date selected by the Contract Owner.
Purchase Payments may be allocated to one or more of the available
Sub-Accounts of the Variable Account, a separate account of the Company, and/or
to Fixed Account A, Fixed Account B and/or Fixed Account C (which are part of
the general account of the Company).
Purchase payments allocated to one or more of the available Sub-Accounts
of the Variable Account, as selected by the Contract Owner, will be invested in
shares at net asset value of one or more of a group of investment funds
("Funds"). The Funds currently are: the Alger American Growth Portfolio, Alger
American Leveraged AllCap Portfolio, Alger American MidCap Growth Portfolio and
Alger American Small Capitalization Portfolio of The Alger American Fund which
are managed by Fred Alger Management, Inc.; the VIP Equity-Income Portfolio,
VIP Growth Portfolio, VIP Money Market Portfolio and VIP Overseas Portfolio of
the Variable Insurance Products Fund, VIP II Asset Manager: Growth Portfolio,
VIP II Asset Manager Portfolio, VIP II Contrafund Portfolio, VIP II Index 500
Portfolio of the Variable Insurance Products Fund II, and VIP III Growth
Opportunities Portfolio of the Variable Insurance Products Fund III, all of
which are managed by Fidelity Management & Research Company; the Aggressive
Growth Portfolio, Growth Portfolio, International Growth Portfolio and
Worldwide Growth Portfolio of the Janus Aspen Series which are managed by Janus
Capital Corporation; the Limited Maturity Bond Portfolio, Partners Portfolio
and Socially Responsive Portfolio of the Neuberger Berman Advisers Management
Trust, which are managed by Neuberger Berman Management Inc. with assistance of
Neuberger Berman, LLC as sub-adviser; the Growth + Value Portfolio, High Yield
Bond Portfolio, Emerging Growth Portfolio, International Value Portfolio and
Multi-Sector Bond Portfolio of the Northstar Galaxy Trust which are managed by
Northstar Investment Management Corporation; and the Equity Portfolio, Global
Equity Portfolio, Managed Portfolio and Small Cap Portfolio of the OCC
Accumulation Trust which are managed by OpCap Advisors, a subsidiary of
Oppenheimer Capital.
Purchase Payments allocated to Fixed Account A, Fixed Account B or Fixed
Account C, which are part of the general account of the Company, will be
credited with interest at a rate not less than 3% per year. Interest credited
in excess of 3%, if any, will be determined at the sole discretion of the
Company. That part of the Contract relating to Fixed Account A, Fixed Account B
and Fixed Account C is not registered under the Securities Act of 1933 and the
Fixed Accounts are not subject to the restrictions of the Investment Company
Act of 1940. (See Appendix A to the Prospectus and page 4 of the Prospectus
Supplement dated January 1, 1999.)
CUSTODY OF ASSETS
The Company, whose address appears on the cover of the Prospectus,
maintains custody of the assets of the Variable Account.
INDEPENDENT AUDITORS
The financial statements of Separate Account One and Northern Life
Insurance Company, which are incorporated by reference in this Statement of
Additional Information, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports which are incorporated by reference
herein, and have been so incorporated in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.
DISTRIBUTION OF THE CONTRACTS
The Contracts will be sold by licensed insurance agents in those states
where the Contracts may be lawfully sold. Such agents will be registered
representatives of broker-dealers registered under the Securities Exchange Act
of 1934 who are members of the National Association of Securities Dealers, Inc.
The Contracts will be distributed by Washington Square Securities, Inc.
("WSSI"), the principal underwriter which is an affiliate of the Company.
For the years ended December 31, 1995, 1996 and 1997, WSSI was paid fees
by the Company in connection with distribution of the Contracts aggregating
$750, $1,123,993 and $5,551,624, respectively.
2
<PAGE>
The offering of the Contracts is continuous.
There are no special purchase plans or exchange privileges not described
in the Prospectus. (See "Reduction of Charges" at page 24 of the Prospectus.)
No deduction for a sales charge is made from the Purchase Payments for the
Contracts. However, if part or all of a Contract's value is withdrawn,
Withdrawal Charges (which may be deemed to be Contingent Deferred Sales
Charges) may be made by the Company. The method used to determine the amount of
such charges is described in the Prospectus under the heading "Charges Made By
The Company -- Withdrawal Charge (Contingent Deferred Sales Charge)" on page
21. There is no difference in the amount of this charge or any of the other
charges described in the Prospectus as between Contracts purchased by members
of the public as individuals or groups, and Contracts purchased by any class of
individuals, such as officers, directors or employees of the Company or of the
Principal Underwriter.
CALCULATION OF YIELDS AND TOTAL RETURNS
From time to time, the Company may disclose yields, total returns, and
other performance data pertaining to the Contracts for a Sub-Account. Such
performance data will be computed, or accompanied by performance data computed,
in accordance with the standards defined by the Securities and Exchange
Commission.
Because of the charges and deductions imposed under a Contract, the yield
for the Sub-Accounts will be lower than the yield for their respective
portfolios. The calculations of yields, total returns, and other performance
data do not reflect the effect of any premium tax that may be applicable to a
particular Contract. Premium taxes currently range from 0% to 3.5% of premium
based on the state in which the Contract is sold.
VIP MONEY MARKET PORTFOLIO SUB-ACCOUNT YIELD. From time to time,
advertisements and sales literature may quote the current annualized yield of
the Money Market Sub-Account for a seven-day period in a manner which does not
take into consideration any realized or unrealized gains or losses on shares of
the VIP Money Market Portfolio or on its portfolio securities.
The current annualized yield is computed by determining the net change
(exclusive of realized gains and losses on the sale of securities and
unrealized appreciation and depreciation) at the end of the seven-day period in
the value of a hypothetical account under a Contract having a balance of one
Accumulation Unit of the Money Market Sub-Account at the beginning of the
period dividing such net change in account value of the hypothetical account to
determine the base period return, and annualizing this quotient on a 365-day
basis. The net change in account value reflects: 1) net income from the
Portfolio attributable to the hypothetical account; and 2) charges and
deductions imposed under the Contract which are attributable to the
hypothetical account. The charges and deductions include the per unit charges
for the hypothetical account for: 1) the Annual Contract Charge; 2)
Administration Charge; and 3) the Mortality and Expense Risk Charges. For
purposes of calculating current yields for a Contract, an average per unit
administration fee is used based on the $30 Annual Contract Charge deducted at
the end of each Contract Year. Current Yield will be calculated according to
the following formula:
Current Yield = ((NCS - ES)/UV) x (365/7)
Where:
NCS = the net change in the value of the Portfolio (exclusive of realized
gains or losses on the sale of securities and unrealized appreciation
and depreciation) for the seven-day period attributable to a
hypothetical account having a balance of 1 Sub-Account Accumulation
Unit.
ES = per unit expenses attributable to the hypothetical account for the
seven-day period.
UV = The Accumulation Unit value on the first day of the seven-day period.
The current yield of the sub-account for the seven day period ended
December 31, 1997 was 3.90%.
EFFECTIVE YIELD. The effective yield of the Money Market Sub-Account
determined on a compounded basis for the same seven-day period may also be
quoted.
3
<PAGE>
The effective yield is calculated by compounding the unannualized base
period return according to the following formula:
Effective Yield = (1 + ((NCS - ES)/UV)) 365/7 - 1
Where:
NCS = the net change in the value of the Portfolio (exclusive of realized
gains and losses on the sale of securities and unrealized
appreciation and depreciation) for the seven-day period attributable
to a hypothetical account having a balance of 1 Sub-Account unit.
ES = per Accumulation Unit expenses attributable to the hypothetical
account for the seven-day period.
UV = the Accumulation Unit value for the first day of the seven-day
period.
The effective yield of the sub-account for the seven day period ended
December 31, 1997 was 3.97%.
Because of the charges and deductions imposed under the Contracts, the
yield for the Money Market Sub-Account will be lower than the yield for the VIP
Money Market Portfolio.
The current and effective yields on amounts held in the Money Market
Sub-Account normally will fluctuate on a daily basis. THEREFORE, THE DISCLOSED
YIELD FOR ANY GIVEN PAST PERIOD IS NOT AN INDICATION OR REPRESENTATION OF
FUTURE YIELDS OR RATES OF RETURN. The Money Market Sub-Account's actual yield
is affected by changes in interest rates on money market securities, average
portfolio maturity of the VIP Money Market Portfolio, the types and quality of
portfolio securities held by VIP Money Market Portfolio and the VIP Money
Market Portfolio's operating expenses. Yields on amounts held in the Money
Market Sub-Account may also be presented for periods other than a seven-day
period.
OTHER SUB-ACCOUNT YIELDS. From time to time, sales literature or
advertisements may quote the current annualized yield of one or more of the
Sub-Accounts (except the Money Market Sub-Account) for a Contract for 30-day or
one-month periods. The annualized yield of a Sub-Account refers to income
generated by the Sub-Account over a specific 30-day or one-month period.
Because the yield is annualized, the yield generated by a Sub-Account during a
30-day or one-month period is assumed to be generated each period over a
12-month period.
The yield is computed by: 1) dividing the net investment income of the
Fund attributable to the Sub-Account Accumulation Units less Sub-Account
expenses for the period; by 2) the maximum offering price per Accumulation Unit
on the last day of the period times the daily average number of units
outstanding for the period; by 3) compounding that yield for a six-month
period; and by 4) multiplying that result by 2. Expenses attributable to the
Sub-Account include the Administration Charge and the Mortality and Expense
Risk Charges. The yield calculation assumes an Annual Contract Charge of $30
per year per Contract deducted at the end of each Contract Year. For purposes
of calculating the 30-day or one-month yield, an average Annual Contract Charge
per dollar of Contract Value in the Variable Account is used to determine the
amount of the charge attributable to the Sub-Account for the 30-day or
one-month period. The 30-day or one-month yield is calculated according to the
following formula:
Yield = 2 x [(((NI - ES)/(U \x UV)) + 1) 6 - 1]
Where:
NI = net income of the Portfolio for the 30-day or one-month period
attributable to the Sub-Account's Accumulation Units.
ES = expenses of the Sub-Account for the 30-day or one-month period.
U = the average number of Accumulation Units outstanding.
UV = the Accumulation Unit value of the close (highest) of the last day in
the 30-day or one-month period.
The annualized yield for the Northstar Galaxy Trust Multi-Sector Bond
Portfolio Sub-Account for the month ended December 31, 1997 was 5.51%. The
annualized yield for the Northstar Galaxy Trust High Yield Bond Portfolio
Sub-Account for the month ended December 31, 1997 was 7.77%. The
4
<PAGE>
annualized yield for the Neuberger Berman Advisers Management Trust Limited
Maturity Bond Portfolio Sub-Account for the month ended December 31, 1997 was
2.81%.
Because of the charges and deductions imposed under the Contract, the
yield for the Sub-Account will be lower than the yield for the corresponding
Fund.
The yield on the amounts held in the Sub-Accounts normally will fluctuate
over time. THEREFORE, THE DISCLOSED YIELD FOR ANY GIVEN PAST PERIOD IS NOT AN
INDICATION OR REPRESENTATION OF FUTURE YIELDS OR RATES OF RETURN. The
Sub-Account's actual yield is affected by the types and quality of portfolio
securities held by the Fund and its operating expenses.
Yield calculations do not take into account the Withdrawal Charges under
the Contracts. The Withdrawal Charge for Transfer Series Contracts is equal to
2% to 6% of Purchase Payments paid during the six years prior to the withdrawal
(including the year in which the withdrawal is made) on amounts withdrawn or
withdrawn under the Contract. The Withdrawal Charge for Flex Series Contracts
is equal to 1% to 8% of amounts withdrawn under the Contracts during the first
10 Contract Years.
AVERAGE ANNUAL TOTAL RETURNS. From time to time, sales literature or
advertisements may also quote average annual total returns for one or more of
the Sub-Accounts for various periods of time, excluding the money market
Sub-Account.
Average annual total returns represent the average annual compounded rates
of return that would equate an initial investment of $1,000 under a Contract to
the redemption value of that investment as of the last day of each of the
periods. The ending date for each period for which total return quotations are
provided will be for the most recent month-end practicable, considering the
type and media of the communication and will be stated in the communication.
Average annual total returns will be calculated using Sub-Account
Accumulation Unit values which the Company calculates on each Valuation Date
based on the performance of the Sub-Account's underlying Fund, the deductions
for the Mortality and Expense Risk Charges, the Administration Charge, and the
Annual Contract Charge. The calculation assumes that the Annual Contract Charge
is $30 per year per Contract deducted at the end of each Contract Year. For
purposes of calculating average annual total return, an average per dollar
Annual Contract Charge attributable to the hypothetical account for the period
is used. The calculation also assumes full withdrawal of the Contract at the
end of the period for the return quotation. Total returns will therefore
reflect a deduction of the Withdrawal Charge in the case of the Transfer Series
Contracts, for any period less than six years and in the case of the Flex
Series Contracts, for any period less than 11 years. The total return will then
be calculated according to the following formula:
TR = ((ERV/P) 1/N) - 1
Where:
TR = The average annual total return net of Sub-Account recurring
charges.
ERV = the ending redeemable value (net of any applicable surrender charge)
of the hypothetical account at the end of the period.
P = a hypothetical initial payment of $1,000.
N = the number of years in the period.
5
<PAGE>
Following are the Average Annual Total Returns for Sub-Accounts as of
December 31, 1997.
<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
FROM DATE OF FROM DATE OF
FOR THE 1-YEAR FOR THE 1-YEAR INCEPTION OF INCEPTION OF
PERIOD ENDED PERIOD ENDED SUB-ACCOUNT TO SUB-ACCOUNT TO
SUB-ACCOUNT 12/31/97 12/31/97 12/31/97 12/31/97
- ------------------------------------------------------------ ---------------- ---------------- ---------------- ---------------
++T.S. F.S. T.S. F.S.
<S> <C> <C> <C> <C>
Alger American Growth Portfolio 18.26% 14.76% 13.38% 11.28%
(Sub-Account Inception: 10/20/95)
Alger American Leveraged AllCap Portfolio 12.29% 9.22% 11.14% 9.16%
(Sub-Account Inception: 10/20/95)
Alger American MidCap Growth Portfolio 7.70% 4.96% 25.82% 23.11%
(Sub-Account Inception: 10/20/95)
Alger American Small Capitalization Portfolio 4.14% 1.65% 1.44% ( 0.02)%
(Sub-Account Inception: 10/20/95)
Fidelity VIP Equity-Income Portfolio 20.58% 16.91% 18.47% 16.12%
(Sub-Account Inception: 10/20/95)
Fidelity VIP Growth Portfolio 16.03% 12.69% 11.95% 9.93%
(Sub-Account Inception: 10/20/95)
Fidelity VIP Overseas Portfolio 4.31% 1.81% 8.80% 6.93%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Asset Manager: Growth Portfolio 17.59% 14.14% 18.06% 15.73%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Asset Manager Portfolio 13.25% 10.10% 14.21% 12.06%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Contrafund Portfolio 16.68% 13.29% 17.77% 15.45%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Index 500 Portfolio 25.22% 21.21% 24.10% 21.47%
(Sub-Account Inception: 10/20/95)
Fidelity VIP III Growth Opportunities Portfolio N/A N/A N/A N/A
(Sub-Account Inception: 1/1/99)
Janus Aggressive Growth Portfolio N/A N/A 8.86% 2.52%
(Sub-Account Inception: 8/8/97)
Janus Growth Portfolio N/A N/A (10.34)% (14.71)%
(Sub-Account Inception: 8/8/97)
Janus International Growth Portfolio N/A N/A (22.92)% (26.07)%
(Sub-Account Inception: 8/8/97)
Janus Worldwide Growth Portfolio N/A N/A (18.33)% (21.92)%
(Sub-Account Inception: 8/8/97)
Neuberger Berman Advisers Management Trust Limited N/A N/A ( 8.99)% (13.50)%
Maturity Bond Portfolio (Sub-Account Inception: 8/8/97)
Neuberger Berman Advisers Management Trust Partners N/A N/A ( 7.06)% (11.76)%
Portfolio (Sub-Account Inception: 8/8/97)
Neuberger Berman Advisers Management Trust Socially N/A N/A N/A N/A
Responsive Portfolio (Sub-Account Inception: 1/1/99)
Northstar Galaxy Trust Growth + Value Portfolio 7.36% 4.64% 14.60% 12.44%
(Sub-Account Inception: 10/20/95)
Northstar Galaxy Trust High Yield Bond Portfolio N/A N/A (15.00) (18.91)
(Sub-Account Inception: 8/8/97)
Northstar Galaxy Trust Emerging Growth Portfolio (a) 8.49% 5.69% 11.64% 9.62%
(Sub-Account Inception: 10/20/95)
Northstar Galaxy Trust International Value Portfolio N/A N/A (11.58) (15.83)
(Sub-Account Inception: 8/8/97)
Northstar Galaxy Trust Multi-Sector Bond Portfolio (1.01)% (3.13)% 6.42% 4.68%
(Sub-Account Inception: 10/20/95)
OCC Equity Portfolio (b) N/A N/A 2.00% ( 3.62)%
(Sub-Account Inception: 8/8/97)
OCC Global Equity Portfolio N/A N/A (25.27)% (28.20)%
(Sub-Account Inception: 8/8/97)
OCC Managed Portfolio (b) N/A N/A (11.66)% (15.90)%
(Sub-Account Inception: 8/8/97)
OCC Small Cap Portfolio (b) N/A N/A ( 8.93)% (13.44)%
(Sub-Account Inception: 8/8/97)
- -----------------
</TABLE>
++ Key: T.S. = Transfer Series Contract; F.S. = Flex Series Contract. (See
"Withdrawal Charge (Contingent Deferred Sale Charge)" on page 21 of the
Prospectus.)
From time to time, sales literature or advertisements may quote average
annual total returns for periods prior to the date the Sub-Accounts commenced
operations. Such performance information for the Sub-Accounts will be
calculated based on the performance of the Funds and the assumption that the
Sub-Accounts were in existence for the same periods as those indicated for the
Funds, with the level of Contract charges currently in effect.
6
<PAGE>
Such average annual total return information for the Sub-Accounts is as follows:
<TABLE>
<CAPTION>
FOR THE 1-YEAR FOR THE 5-YEAR
PERIOD ENDED PERIOD ENDED
SUB-ACCOUNT 12/31/97 12/31/97
- ------------------------------------------------------ ----------------------- -----------------------
++T.S. F.S. T.S. F.S.
<S> <C> <C> <C> <C>
Alger American Growth Portfolio 18.26% 14.76% 16.92% 16.01%
(Portfolio Inception: 1/9/89)
Alger American Leveraged AllCap Portfolio 12.29% 9.22% N/A N/A
(Portfolio Inception: 1/25/95)
Alger American MidCap Growth Portfolio 7.70% 4.96% N/A N/A
(Portfolio Inception: 5/3/93)
Alger American Small Capitalization Portfolio 4.14% 1.65% 10.30% 9.56%
(Portfolio Inception: 9/21/88)
Fidelity VIP Equity-Income Portfolio 20.58% 16.91% 17.79% 16.86%
(Portfolio Inception: 10/9/86)
Fidelity VIP Growth Portfolio 16.03% 12.69% 15.65% 14.76%
(Portfolio Inception: 10/9/86)
Fidelity VIP Overseas Portfolio 4.31% 1.81% 11.77% 10.98%
(Portfolio Inception: 1/28/87)
Fidelity VIP II Asset Manager: Growth Portfolio 17.59% 14.14% N/A N/A
(Portfolio Inception: 1/3/95)
Fidelity VIP II Asset Manager Portfolio 13.25% 10.10% 10.63% 9.88%
(Portfolio Inception: 9/6/89)
Fidelity VIP II Contrafund Portfolio 16.68% 13.29% N/A N/A
(Portfolio Inception: 1/3/95)
Fidelity VIP II Index 500 Portfolio 25.22% 21.21% 17.55% 16.62%
(Portfolio Inception: 8/27/92)
Fidelity VIP III Growth Opportunities Portfolio 22.39% 18.59% N/A N/A
(Portfolio Inception: 1/3/95)
Janus Aggressive Growth Portfolio 5.39% 2.81% N/A N/A
(Portfolio Inception: 9/13/93)
Janus Growth Portfolio 15.31% 12.02% N/A N/A
(Portfolio Inception: 9/13/93)
Janus International Growth Portfolio 11.14% 8.15% N/A N/A
(Portfolio Inception: 5/2/94)
Janus Worldwide Growth Portfolio 14.72% 11.47% N/A N/A
(Portfolio Inception: 9/13/93)
Neuberger Berman Advisers Management Trust (0.43)% (2.59)% 3.25% 2.73%
Limited Maturity Bond Portfolio
(Portfolio Inception: 9/10/84)
Neuberger Berman Advisers Management Trust 23.67% 19.78% N/A N/A
Partners Portfolio (Portfolio Inception: 3/22/94)
Neuberger Berman Advisers Management Trust N/A N/A N/A N/A
Socially Responsive Portfolio
(Portfolio Inception: 8/19/98)
Northstar Galaxy Trust Growth + Value Portfolio 7.36% 4.64% N/A N/A
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust High Yield Bond Portfolio 1.79% (0.53)% N/A N/A
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust Emerging Growth Portfolio (a) 8.49% 5.69% N/A N/A
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust International Value Portfolio N/A N/A N/A N/A
(Portfolio Inception: 8/8/97)
Northstar Galaxy Trust Multi-Sector Bond Portfolio (1.01)% (3.13)% N/A N/A
(Portfolio Inception: 5/6/94)
OCC Equity Portfolio (b) 19.13% 15.56% 17.05% 16.14%
(Portfolio Inception: 8/1/88)
OCC Global Equity Portfolio 6.73% 4.05% N/A N/A
(Portfolio Inception: 3/1/95)
OCC Managed Portfolio (b) 14.86% 11.60% 17.51% 16.58%
(Portfolio Inception: 8/1/88)
OCC Small Cap Portfolio (b) 14.81% 11.56% 12.27% 11.47%
(Portfolio Inception: 8/1/88)
</TABLE>
- -----------------
++ Key: T.S. = Transfer Series Contract; F.S. = Flex Series Contract. (See
"Withdrawal Charge (Contingent Deferred Sale Charge)" on page 21
[WIDE TABLE CONTINUED FROM ABOVE]
<TABLE>
<CAPTION>
FOR THE PERIOD FROM
FOR THE 10-YEAR DATE OF INCEPTION OF
PERIOD ENDED PORTFOLIO TO
SUB-ACCOUNT 12/31/97 12/31/97
- ------------------------------------------------------ ----------------------- ---------------------------
T.S. F.S. T.S. F.S.
<S> <C> <C> <C> <C>
Alger American Growth Portfolio N/A N/A 17.44% 17.20%
(Portfolio Inception: 1/9/89)
Alger American Leveraged AllCap Portfolio N/A N/A 30.42% 30.42%
(Portfolio Inception: 1/25/95)
Alger American MidCap Growth Portfolio N/A N/A 19.67% 18.65%
(Portfolio Inception: 5/3/93)
Alger American Small Capitalization Portfolio N/A N/A 17.25% 17.13%
(Portfolio Inception: 9/21/88)
Fidelity VIP Equity-Income Portfolio 14.79% 14.68% 12.76% 12.76%
(Portfolio Inception: 10/9/86)
Fidelity VIP Growth Portfolio 15.24% 15.14% 13.64% 13.64%
(Portfolio Inception: 10/9/86)
Fidelity VIP Overseas Portfolio 7.80% 7.70% 6.42% 6.42%
(Portfolio Inception: 1/28/87)
Fidelity VIP II Asset Manager: Growth Portfolio N/A N/A 19.66% 17.73%
(Portfolio Inception: 1/3/95)
Fidelity VIP II Asset Manager Portfolio N/A N/A 10.86% 10.62%
(Portfolio Inception: 9/6/89)
Fidelity VIP II Contrafund Portfolio N/A N/A 25.09% 22.94%
(Portfolio Inception: 1/3/95)
Fidelity VIP II Index 500 Portfolio N/A N/A 17.71% 16.87%
(Portfolio Inception: 8/27/92)
Fidelity VIP III Growth Opportunities Portfolio N/A N/A 23.74% 21.64%
(Portfolio Inception: 1/3/95)
Janus Aggressive Growth Portfolio N/A N/A 16.95% 15.93%
(Portfolio Inception: 9/13/93)
Janus Growth Portfolio N/A N/A 15.39% 14.41%
(Portfolio Inception: 9/13/93)
Janus International Growth Portfolio N/A N/A 16.50% 15.25%
(Portfolio Inception: 5/2/94)
Janus Worldwide Growth Portfolio N/A N/A 20.68% 19.56%
(Portfolio Inception: 9/13/93)
Neuberger Berman Advisers Management Trust 5.29% 5.20% 6.37% 6.37%
Limited Maturity Bond Portfolio
(Portfolio Inception: 9/10/84)
Neuberger Berman Advisers Management Trust N/A N/A 21.43% 20.03%
Partners Portfolio (Portfolio Inception: 3/22/94)
Neuberger Berman Advisers Management Trust N/A N/A N/A N/A
Socially Responsive Portfolio
(Portfolio Inception: 8/19/98)
Northstar Galaxy Trust Growth + Value Portfolio N/A N/A 15.00% 13.80%
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust High Yield Bond Portfolio N/A N/A 8.52% 7.57%
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust Emerging Growth Portfolio (a) N/A N/A 11.44% 10.37%
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust International Value Portfolio N/A N/A (11.58)% (15.83)%
(Portfolio Inception: 8/8/97)
Northstar Galaxy Trust Multi-Sector Bond Portfolio N/A N/A 6.64% 5.76%
(Portfolio Inception: 5/6/94)
OCC Equity Portfolio (b) N/A N/A 15.61% 15.50%
(Portfolio Inception: 8/1/88)
OCC Global Equity Portfolio N/A N/A 13.75% 12.00%
(Portfolio Inception: 3/1/95)
OCC Managed Portfolio (b) N/A N/A 18.33% 18.22%
(Portfolio Inception: 8/1/88)
OCC Small Cap Portfolio (b) N/A N/A 13.54% 13.43%
(Portfolio Inception: 8/1/88)
</TABLE>
- -----------------
++ Key: T.S. = Transfer Series Contract; F.S. = Flex Series Contract. (See
"Withdrawal Charge (Contingent Deferred Sale Charge)" on page 21 of the
Prospectus.)
The Company may also disclose average annual total returns for the Funds
since their inception, including such disclosure for periods prior to the date
the Variable Account commenced operations.
7
<PAGE>
Such average annual total return information for the Funds is as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM DATE OF
FOR THE 1-YEAR FOR THE 5-YEAR FOR THE 10-YEAR INCEPTION OF
PERIOD ENDED PERIOD ENDED PERIOD ENDED PORTFOLIO TO
PORTFOLIO 12/31/97 12/31/97 12/31/97 12/31/97
- --------------------------------------------------------- ---------------- ---------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Alger American Growth Portfolio 25.75% 19.28% N/A 19.42%
(Portfolio Inception: 1/9/89)
Alger American Leveraged AllCap Portfolio 19.68% N/A N/A 33.55%
(Portfolio Inception: 1/25/95)
Alger American MidCap Growth Portfolio 15.01% N/A N/A 22.09%
(Portfolio Inception: 5/3/93)
Alger American Small Capitalization Portfolio 11.39% 12.65% N/A 19.22%
(Portfolio Inception: 9/21/88)
Fidelity VIP Equity-Income Portfolio 28.11% 20.16% 16.72% 14.66%
(Portfolio Inception: 10/9/86)
Fidelity VIP Growth Portfolio 23.48% 18.00% 17.19% 15.56%
(Portfolio Inception: 10/9/86)
Fidelity VIP Overseas Portfolio 11.56% 14.12% 9.62% 8.22%
(Portfolio Inception: 1/28/87)
Fidelity VIP II Asset Manager: Growth Portfolio 25.07% N/A N/A 22.74%
(Portfolio Inception: 1/3/95)
Fidelity VIP II Asset Manager Portfolio 20.65% 12.98% N/A 12.73%
(Portfolio Inception: 9/6/89)
Fidelity VIP II Contrafund Portfolio 24.14% N/A N/A 28.17%
(Portfolio Inception: 1/3/95)
Fidelity VIP II Index 500 Portfolio 32.82% 19.91% N/A 19.87%
(Portfolio Inception: 8/27/92)
Fidelity VIP III Growth Opportunities Portfolio 29.95% N/A N/A 26.81%
(Portfolio Inception: 1/3/95)
Janus Aggressive Growth Portfolio 12.66% N/A N/A 19.44%
(Portfolio Inception: 9/13/93)
Janus Growth Portfolio 22.75% N/A N/A 17.87%
(Portfolio Inception: 9/13/93)
Janus International Growth Portfolio 18.51% N/A N/A 19.29%
(Portfolio Inception: 5/2/94)
Janus Worldwide Growth Portfolio 22.15% N/A N/A 23.18%
(Portfolio Inception: 9/13/93)
Neuberger Berman Advisers Management Trust 6.74% 5.63% 7.07% 8.17%
Limited Maturity Bond Portfolio
(Portfolio Inception: 9/10/84)
Neuberger Berman Advisers Management Trust 31.25% N/A N/A 24.18%
Partners Portfolio (Portfolio Inception: 3/22/94)
Neuberger Berman Advisers Management Trust Socially N/A N/A N/A N/A
Responsive Portfolio (Portfolio Inception: 8/19/98)
Northstar Galaxy Trust Growth + Value Portfolio 14.66% N/A N/A 17.79%
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust High Yield Bond Portfolio 9.00% N/A N/A 11.34%
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust Emerging Growth Portfolio (a) 15.81% N/A N/A 14.24%
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust International Value Portfolio N/A N/A N/A 3.27%
(Since Inception 8/8/97)
Northstar Galaxy Trust Multi-Sector Bond Portfolio 6.15% N/A N/A 9.47%
(Portfolio Inception: 5/6/94)
OCC Equity Portfolio (b) 26.63% 19.42% N/A 17.56%
(Portfolio Inception: 8/1/88)
OCC Global Equity Portfolio 14.02% N/A N/A 16.93%
(Portfolio Inception: 3/1/95)
OCC Managed Portfolio (b) 22.29% 19.88% N/A 20.33%
(Portfolio Inception: 8/1/88)
OCC Small Cap Portfolio (b) 22.24% 14.62% N/A 15.46%
(Portfolio Inception: 8/1/88)
</TABLE>
- -----------------
++ Key: T.S. = Transfer Series Contract; F.S. = Flex Series Contract. (See
"Withdrawal Charge (Contingent Deferred Sale Charge)" on page 21 of the
Prospectus.)
OTHER TOTAL RETURNS. From time to time, sales literature or advertisements
may quote average annual total returns that do not reflect the Withdrawal
Charge. These returns are calculated in exactly the same way as average
8
<PAGE>
annual total returns described above, except that the ending redeemable value
of the hypothetical account for the period is replaced with an ending value for
the period that does not take into account any charges on amounts withdrawn.
Because the Withdrawal Charge will not be reflected in those quotations, there
is no differentiation between the Transfer Series Contracts and the Flex Series
Contracts. Listed in the chart below are the Average Annual Total Returns for
the Sub-Accounts for the indicated periods.
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM DATE OF
FOR THE 1-YEAR INCEPTION OF
PERIOD ENDED SUB-ACCOUNT TO
SUB-ACCOUNT 12/31/97 12/31/97
- ----------------------------------------------------------------------- ---------------- ---------------
<S> <C> <C>
Alger American Growth Portfolio 23.66% 15.13%
(Sub-Account Inception: 10/20/95)
Alger American Leveraged AllCap Portfolio 17.69% 12.93%
(Sub-Account Inception: 10/20/95)
Alger American MidCap Growth Portfolio 13.10% 27.36%
(Sub-Account Inception: 10/20/95)
Alger American Small Capitalization Portfolio 9.54% 3.43%
(Sub-Account Inception: 10/20/95)
Fidelity VIP Equity-Income Portfolio 25.98% 20.13%
(Sub-Account Inception: 10/20/95)
Fidelity VIP Growth Portfolio 21.43% 13.72%
(Sub-Account Inception: 10/20/95)
Fidelity VIP Overseas Portfolio 9.71% 10.63%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Asset Manager Growth Portfolio 22.99% 19.72%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Asset Manager Portfolio 18.65% 15.94%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Contrafund Portfolio 22.08% 19.44%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Index 500 Portfolio 30.62% 25.66%
(Sub-Account Inception: 10/20/95)
Fidelity VIP III Growth Opportunities Portfolio N/A N/A
(Sub-Account Inception: 1/1/99)
Janus Aggressive Growth Portfolio N/A 23.74%
(Sub-Account Inception: 8/8/97)
Janus Growth Portfolio N/A 2.94%
(Sub-Account Inception: 8/8/97)
Janus International Growth Portfolio N/A (10.77)%
(Sub-Account Inception: 8/8/97)
Janus Worldwide Growth Portfolio N/A ( 5.76)%
(Sub-Account Inception: 8/8/97)
Neuberger Berman Advisers Management Trust N/A 4.40%
Limited Maturity Bond Portfolio
(Sub-Account Inception: 8/8/97)
Neuberger Berman Advisers Management Trust N/A 6.50%
Partners Portfolio (Sub-Account Inception: 8/8/97)
Neuberger Berman Advisers Management Trust N/A N/A
Socially Responsive Portfolio (Sub-Account Inception: 1/1/99)
Northstar Galaxy Trust Growth + Value Portfolio 12.76% 16.32%
(Sub-Account Inception: 10/20/95)
Northstar Galaxy Trust High Yield Bond Portfolio N/A ( 2.13)
(Sub-Account Inception: 8/8/97)
Northstar Galaxy Trust Emerging Growth Portfolio (a) 13.89% 13.41%
(Sub-Account Inception: 10/20/95)
Northstar Galaxy Trust International Value Portfolio N/A 1.59
(Sub-Account Inception: 8/8/97)
Northstar Galaxy Trust Multi-Sector Bond Portfolio 4.39% 8.29%
(Sub-Account Inception: 10/20/95)
OCC Equity Portfolio (b) N/A 16.33%
(Sub-Account Inception: 8/8/97)
OCC Global Equity Portfolio N/A (13.34)%
(Sub-Account Inception: 8/8/97)
OCC Managed Portfolio (b) N/A 1.51%
(Sub-Account Inception: 8/8/97)
OCC Small Cap Portfolio (b) N/A 4.47%
(Sub-Account Inception: 8/8/97)
</TABLE>
9
<PAGE>
The Average Annual Total Returns listed below do not reflect deduction of
the withdrawal charge and are calculated based on the assumption that the
Sub-Accounts were in existence for the same periods as those indicated for the
funds:
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM DATE OF
FOR THE 1-YEAR FOR THE 5-YEAR FOR THE 10-YEAR INCEPTION OF
PERIOD ENDED PERIOD ENDED PERIOD ENDED PORTFOLIO TO
SUB-ACCOUNT 12/31/97 12/31/97 12/31/97 12/31/97
- --------------------------------------------------------- ---------------- ---------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Alger American Growth Portfolio 23.66% 17.30% N/A 17.44%
(Portfolio Inception: 1/9/89)
Alger American Leveraged AllCap Portfolio 17.69% N/A N/A 31.34%
(Portfolio Inception: 1/25/95)
Alger American MidCap Growth Portfolio 13.10% N/A N/A 20.07%
(Portfolio Inception: 5/3/93)
Alger American Small Capitalization Portfolio 9.54% 10.78% N/A 17.25%
(Portfolio Inception: 9/21/88)
Fidelity VIP Equity-Income Portfolio 25.98% 18.17% 14.79% 12.76%
(Portfolio Inception: 10/9/86)
Fidelity VIP Growth Portfolio 21.43% 16.05% 15.24% 13.64%
(Portfolio Inception: 10/9/86)
Fidelity VIP Overseas Portfolio 9.71% 12.22% 7.80% 6.42%
(Portfolio Inception: 1/28/87)
Fidelity VIP II Asset Manager: Growth Portfolio 22.99% N/A N/A 20.70%
(Portfolio Inception: 1/3/95)
Fidelity VIP II Asset Manager Portfolio 18.65% 11.11% N/A 10.86%
(Portfolio Inception: 9/6/89)
Fidelity VIP II Contrafund Portfolio 22.08% N/A N/A 26.04%
(Portfolio Inception: 1/3/95)
Fidelity VIP II Index 500 Portfolio 30.62% 17.92 N/A 17.88%
(Portfolio Inception: 8/27/92)
Fidelity VIP III Growth Opportunities Portfolio 27.79% N/A N/A 24.71%
(Portfolio Inception: 1/3/95)
Janus Aggressive Growth Portfolio 10.79% N/A N/A 17.46%
(Portfolio Inception: 9/13/93)
Janus Growth Portfolio 20.71% N/A N/A 15.92%
(Portfolio Inception: 9/13/93)
Janus International Growth Portfolio 16.54% N/A N/A 17.31%
(Portfolio Inception: 5/2/94)
Janus Worldwide Growth Portfolio 20.12% N/A N/A 21.13%
(Portfolio Inception: 9/13/93)
Neuberger Berman Advisers Management Trust 4.97% 3.87% 5.29% 6.37%
Limited Maturity Bond Portfolio
(Portfolio Inception: 9/10/84)
Neuberger Berman Advisers Management Trust 29.07% N/A N/A 22.11%
Partners Portfolio (Portfolio Inception: 3/22/94)
Neuberger Berman Advisers Management Trust Socially N/A N/A N/A N/A
Responsive Portfolio (Portfolio Inception: 8/19/98)
Northstar Galaxy Trust Growth + Value Portfolio 12.76% N/A N/A 15.84%
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust High Yield Bond Portfolio 7.19% N/A N/A 9.50%
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust Emerging Growth Portfolio (a) 13.89% N/A N/A 12.35%
(Portfolio Inception: 5/6/94)
Northstar Galaxy Trust International Value Portfolio N/A N/A N/A 1.59%
(Portfolio Inception: 8/8/97)
Northstar Galaxy Trust Multi-Sector Bond Portfolio 4.39% N/A N/A 7.66%
(Portfolio Inception: 5/6/94)
OCC Equity Portfolio (b) 24.53% 17.44% N/A 15.61%
(Portfolio Inception: 8/1/88)
OCC Global Equity Portfolio 12.13% N/A N/A 14.99%
(Portfolio Inception: 3/1/95)
OCC Managed Portfolio (b) 20.26% 17.89% N/A 18.33%
(Portfolio Inception: 8/1/88)
OCC Small Cap Portfolio (b) 20.21% 12.72% N/A 13.54%
(Portfolio Inception: 8/1/88)
</TABLE>
- -----------------
++ Key: T.S. = Transfer Series Contract; F.S. = Flex Series Contract. (See
"Withdrawal Charge (Contingent Deferred Sale Charge)" on page 21 of the
Prospectus.)
10
<PAGE>
(a) The Northstar Galaxy Trust Emerging Growth Portfolio (formerly the
Northstar Galaxy Trust Income and Growth Portfolio) operated under an
investment objective of seeking income balanced with capital appreciation
from inception through November 8, 1998, when the investment objective was
modified to seeking long-term capital appreciation.
(b) On September 16, 1994, an investment company then called Quest for Value
Accumulation Trust (the "Old Trust") was effectively divided into two
investment funds, the Old Trust and the present OCC Accumulation Trust
(the "Trust") at which time the Trust commenced operations. The total net
assets for the Equity, Managed, and Small Cap Portfolios immediately after
the transaction were $86,789,755, $682,601,380, and $139,812,573,
respectively, with respect to the Old Trust and for the Equity, Managed,
and Small Cap Portfolios, $3,764,598, $51,345,102, and $8,129,274,
respectively with respect to the Trust. For the period prior to September
14, 1994, the performance figures for the Equity, Managed, and Small Cap
Portfolios of the Trust reflect the performance of the Equity, Managed,
and Small Cap Portfolios of the Old Trust.
The Company may disclose Cumulative Total Returns in conjunction with the
standard formats described above. The Cumulative Total Returns will be
calculated using the following formula:
CTR = ERV/P - 1
Where:
CTR = the Cumulative Total Return net of Sub-Account recurring charges for
the period.
ERV = the ending redeemable value of the hypothetical investment at the
end of the period.
P = a hypothetical single payment of $1,000.
EFFECT OF THE ANNUAL CONTRACT CHARGE ON PERFORMANCE DATA. The Contract
provides for a $30 Annual Contract Charge to be deducted annually at the end of
each Contract Year, from the Sub-Accounts and the Fixed Accounts based on the
proportion that the value of each such account bears to the total Contract
Value. For purposes of reflecting the Annual Contract Charge in yield and total
return quotations, the annual charge is converted into a per-dollar of per-day
charge based on the Annual Contract Charges collected from the average total
assets of the Variable Account and the Fixed Accounts during the calendar year.
COMPANY HOLIDAYS
The Company is closed on the following holidays: New Year's Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Holidays
that fall on a Saturday will be recognized on the previous Friday. Holidays
that fall on a Sunday will be recognized on the following Monday.
FINANCIAL STATEMENTS
The Statement of Additional Information incorporates by reference the
Financial Statements for the Separate Account One as of December 31, 1997,
December 31, 1996 and for the period of October 20, 1995 (the date on which the
Separate Account One commenced operations) to December 31, 1995. Deloitte &
Touche LLP serves as independent auditors for the Separate Account One.
Although the financial statements are audited, the period they cover is not
necessarily indicative of the longer term performance of the assets held in the
Separate Account One.
The financial statements for the Company for the years ended December 31,
1997 and 1996 have been prepared on the basis of statutory accounting
principles ("STAT") rather than generally accepted accounting principles
("GAAP"). The financial statements of the Company, which are incorporated by
reference in this Statement of Additional Information, should be considered
only as bearing on the ability of the Company to meet its obligations under the
Contracts. They should not be considered as bearing on the investment
performance of the assets held in the Separate Account One.
11
<PAGE>
NORTHERN LIFE SEPARATE ACCOUNT ONE
Independent Auditors' Report(1)
Combined Statement of Assets and Liabilities as of December 31, 1997(1)
Combined Statements of Operations and Changes in Contract Owners' Equity for
the years ended December 31, 1997 and 1996(1)
Notes to Financial Statements(1)
NORTHERN LIFE INSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF RELIASTAR LIFE INSURANCE COMPANY)
Independent Auditors' Report(1)
Statutory Basis Statements of Admitted Assets, Liabilities, Surplus and Other
Funds as of December 31, 1997 and 1996(1)
Statutory Basis Statements of Operations for the years ended December 31, 1997
and 1996(1)
Statutory Basis Statements of Changes in Capital and Surplus for the years
ended December 31, 1997 and 1996(1)
Statutory Basis Statements of Cash Flows for the years ended December 31, 1997
and 1996(1)
Notes to Statutory Basis Financial Statements(1)
Independent Auditors' Report on Supplemental Schedule of Assets and
Liabilities(1)
Supplemental Schedule of Assets and Liabilities for the year ended December 31,
1997(1)
- ------------------
(1) Incorporated by reference to Post-Effective Amendment No. 6 to the
Registrant's Form N-4 Registration Statement File No. 33-90474, filed April
20, 1998.
12
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Part A: None
Part B: SEPARATE ACCOUNT ONE1
Independent Auditors' Report
Statement of Assets and Liabilities as of December 31, 1997
Combined Statements of Operations and Changes in
Contract Owners' Equity for the years ended December 31, 1997
and December 31, 1996
Notes to Financial Statements
NORTHERN LIFE INSURANCE COMPANY1
Independent Auditors' Report
Statutory-Basis Statements of Admitted Assets, Liabilities,
Surplus
and Other Funds as of December 31, 1997 and 1996
Statutory-Basis Statements of Operations for the years ended
December 31, 1997
and 1996
Statutory-Basis Statements of Changes in Capital and Surplus for
the years ended
December 31, 1997 and 1996
Statutory-Basis Statement of Cash Flows for the years ended
December 31, 1997 and 1996
Notes to Statutory Basis Financial Statements
Independent Auditor's Report on Supplemental Schedule of Assets
and Liabilities
Supplemental Schedule of Assets and Liabilities for the year
ended
December 31, 1997
(b) Exhibits:
1. Resolution of the Executive Committee of the Board of Directors of
Northern Life Insurance Company ("Depositor") authorizing the
establishment of Separate Account One ("Registrant").(1)
2. Not Applicable.
3.(a) Form of Distribution and Administrative Services Agreement between
Washington Square Securities, Inc. and Depositor.(1)
(b) Form of selling group (or distribution) agreement between
Washington Square Securities, Inc. and selling group
members.(1)
(c) Form of Amended Broker/Dealer Variable Annuity Compensation
Schedule.
4.(a) Individual Deferred Tax Sheltered Annuity Contract (Transfer
Series).(1)
(b) Individual Deferred Annuity Contract (Transfer Series) for use
with non-qualified plans.(1)
(c) Individual Deferred Retirement Annuity Contract (Transfer
Series).(1)
(d) Flexible Premium Individual Deferred Tax-Sheltered Annuity
Contract.(1)
(e) Flexible Premium Individual Deferred Retirement Annuity
Contract.(1)
(f) ERISA Endorsement.(2)
(g) TSA Endorsement.(3)
(h) Contract Data Page Form No. 13000 (FL-PBC) 2-95 for use with
Form No. 13000 (FL) 2-95 in Florida.(4)
(i) Table of Sample Values Endorsement Form No. 13058 3-97 for use
with Form No. 13000 (FL-PBC) 2-95 in Florida.(4)
(j) Flexible Premium Individual Deferred Annuity Contract (457
Variable Annuity Contract).(1)
II-1
<PAGE>
(k) Roth IRA Endorsement.(1)
(l) Fixed Account C Endorsement.
5. Contract Application Form.(1)
6.(a) Articles of Incorporation of Depositor.(1)
(b) Bylaws of Depositor.(1)
7. Not Applicable.
8.(a) Participation Agreement with The Alger American Fund and Fred
Alger and Company.(1)
(b) Participation Agreement among Fidelity Variable Insurance
Products Fund, Fidelity Distributors Corporation, and
Northern Life Insurance Company.(1)
(c) Amendment to Participation Agreement among Fidelity Variable
Insurance Products Fund, Fidelity Distributors Corporation,
and Northern Life Insurance Company, dated July 24, 1997.(4)
(d) Participation Agreement among Fidelity Variable Insurance
Products Fund II, Fidelity Distributors Corporation, and
Northern Life Insurance Company.(1)
(e) Amendment to Participation Agreement among Fidelity Variable
Insurance Products Fund II, Fidelity Distributors Corporation,
and Northern Life Insurance Company, dated July 24, 1997.(4)
(f) Form of Participation Agreement among Fidelity Variable
Insurance Products Fund III, Fidelity Distributors Corporation
and Northern Life Insurance Company.
(g) Participation Agreement by and between the Janus Aspen Series
and Northern Life Insurance Company, dated August 8, 1997.(4)
(h) Participation Agreement by and among Northern Life Insurance
Company, Neuberger Berman Advisers Management Trust, Advisers
Managers Trust and Neuberger Berman Management Inc., dated
August 8, 1997.(4)
(i) Form of Amendment No. 1 to Participation Agreement by and among
Northern Life Insurance Company, Neuberger Berman Advisers
Management Trust, Advisers Managers Trust and Neuberger Berman
Management Inc.
(j) Participation Agreement by and among OCC Accumulation Trust,
Northern Life Insurance Company and OCC Distributors, dated
August 8, 1997.4
(k) Service Agreement by and between Fred Alger Management, Inc.
and Northern Life Insurance Company, dated as of August 8,
1997.(4)
(l) Form of Service Agreement and Contract between ReliaStar Life
Insurance Company, WSSI, and Fidelity Investments Institutional
Operations Company and Fidelity Distributors Corporation dated
January 1, 1997.(5)
(m) Service Agreement by and between Janus Capital Corporation and
Northern Life Insurance Company, dated August 8, 1997.(4)
(n) Service Agreement by and between Neuberger Berman Management
Inc. and Northern Life Insurance Company, effective August 8,
1997.(4)
(o) Service Agreement by and between OpCap Advisors and Northern
Life Insurance Company, dated as of August 8, 1997.(4)
9. Consent and Opinion of Stewart D. Gregg as to the legality of the
securities being registered.
10. Consent of Deloitte & Touche LLP.
11. No financial statements are omitted from Item 23.
12. Not Applicable.
13. Schedule of computation of performance data.
II-2
<PAGE>
14. Financial Data Schedule. Not required.
15. Powers of Attorney for Richard R. Crowl, Michael J. Dubes, John H.
Flittie, Wayne R. Huneke, Kenneth U. Kuk, Robert C. Salipante, John G.
Turner, Mark S. Jordahl and James R. Miller.(1)
Power of Attorney for Susan W.A. Mead.
- ------------------
(1) Incorporated by reference to Post-Effective Amendment No. 6 to the
Registrant's Form N-4 Registration Statement File No. 33-90474, filed April
20, 1998.
(2) Incorporated by reference to Post-Effective Amendment No. 1 to the
Registrant's Form N-4 Registration Statement File No. 33-90474, filed April
23, 1996.
(3) Incorporated by reference to Post-Effective Amendment No. 3 to the
Registrant's Form N-4 Registration Statement File No. 33-90474, filed April
28, 1997.
(4) Incorporated by reference to Post-Effective Amendment No. 4 to the
Registrant's Form N-4 Registration Statement File No. 33-90474, filed July
29, 1997.
(5) Incorporated by reference to Post-Effective Amendment No. 4 to ReliaStar
Life Insurance Company's Form N-4 Registration Statement File No. 33-69892,
filed April 14, 1997.
II-3
<PAGE>
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITIONS AND OFFICES WITH DEPOSITOR
- ----------------------------- ------------------------------------------------
John G. Turner Director; Chairman
20 Washington Avenue South
Minneapolis, Minnesota 55401
John H. Flittie Director; Vice Chairman
20 Washington Avenue South
Minneapolis, Minnesota 55401
Richard R. Crowl Director; Senior Vice President, General Counsel
20 Washington Avenue South and Assistant Secretary
Minneapolis, Minnesota 55401
Michael J. Dubes Director; President and Chief Executive Officer
1501 Fourth Avenue
Seattle, Washington 98111
Wayne R. Huneke Director; Assistant Treasurer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Mark S. Jordahl Director; Assistant Treasurer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Kenneth U. Kuk Director; Assistant Treasurer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Susan W.A. Mead Director
20 Washington Avenue South
Minneapolis, Minnesota 55401
James R. Miller Director; Assistant Treasurer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Robert C. Salipante Director
20 Washington Avenue South
Minneapolis, Minnesota 55401
Elisabeth R. Bennett Vice President and Medical Director
20 Washington Avenue South
Minneapolis, Minnesota 55401
Richard Contreras Vice President, Marketing
1501 Fourth Avenue
Seattle, Washington 98111
Brad J. Corbin Vice President, Sales
1501 Fourth Avenue
Seattle, Washington 98111
John A. Johnson Vice President
20 Washington Avenue South
Minneapolis, Minnesota 55401
Novian Junus Vice President
1501 Fourth Avenue
Seattle, Washington 98111
II-4
<PAGE>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITIONS AND OFFICES WITH DEPOSITOR
- ------------------------------ --------------------------------------------
Douglas R. Kaufman Vice President and Chief Investment Officer
1501 Fourth Avenue
Seattle, Washington 98111
Jerome A. Mills Vice President, Strategic Alliances
1501 Fourth Avenue
Seattle, Washington 98111
Jeryl A. Millner Vice President, Chief Financial Officer and
1501 Fourth Avenue Treasurer
Seattle, Washington 98111
Susan M. Bergen Secretary
20 Washington Avenue South
Minneapolis, Minnesota 55401
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
Registrant is a separate account of Depositor. Depositor is an indirect,
wholly-owned subsidiary of ReliaStar Financial Corp., formerly known as The
NWNL Companies, Inc., a Delaware corporation.
The following chart identifies the subsidiaries of ReliaStar Financial
Corp. and their relationship to one another, all of which, except where
indicated, are either directly or indirectly wholly-owned by ReliaStar
Financial Corp., except for directors' qualifying shares.
II-5
<PAGE>
ORGANIZATIONAL CHART
ReliaStar Financial Corp. owns, directly or indirectly, capital stock of
subsidiary companies as follows as of December 1, 1998 (second and third tier
subsidiaries are listed, indented, directly below their parent company):
<TABLE>
<CAPTION>
OWNER AND
COMPANY PERCENTAGE
- ---------------------------------------------------------- --------------------
<S> <C>
ReliaStar Life Insurance Company ("RLIC") RLR-100%
Northern Life Insurance Company ("NLIC") RLIC-100%
Norlic, Inc. NLIC-100%
Nova, Inc. NLIC-100%
ReliaStar United Services Life Insurance Company ("RUSL") RLIC-100%
Security-Connecticut Life Insurance Company ("SCL") RUSL-100%
ReliaStar Life Insurance Company of New York ("RLNY") SCL-100%
North Atlantic Life Agency, Inc. RLNY-100%
Delaware Administrators, Inc. RUSL-100%
NWNL Benefits Corporation ("NBC") RLIC-100%
NWNL Health Management Corp. NBC-100%
Select Care Health Network, Inc. NBC-50%
ReliaStar Reinsurance Group (UK), Ltd. RLIC-100%
ReliaStar Investment Research, Inc. RLR-100%
Washington Square Securities, Inc. RLR-100%
Northstar Holding, Inc. ("NI") RLR-100%
Northstar Investment Management Corp. NI-100%
Northstar Distributors, Inc. ("NDI") NI-100%
Northstar Funding, Inc. NDI-100%
Northstar Administrators Corporation NI-100%
IB Holdings, Inc. ("IB") RLR-100%
International Risks, Inc. IB-100%
Northeastern Corporation IB-100%
The New Providence Insurance Company, Limited IB-100%
Successful Money Management Seminars, Inc. ("SMMS") RLR-100%
PrimeVest Financial Services, Inc. ("PVF") RLR-100%
PrimeVest Insurance Agency of Alabama, Inc. PVF-100%
PrimeVest Insurance Agency of New Mexico, Inc. PVF-100%
PrimeVest Insurance Agency of Ohio, Inc. Class A Robert Chapman-100%
Class B PVF-100%
Branson Insurance Agency, Inc. PVF-100%
Granite Investment Services, Inc. PVF-100%
Arrowhead, Ltd. RLR-100%
ReliaStar Payroll Agent, Inc. RLR-100%
ReliaStar Bancshares, Inc. ("RBS") RLR-100%
ReliaStar Bank ("RB") RBS-100%
ReliaStar Investment Services, Inc. RB-100%
ReliaStar Managing Underwriters, Inc. RLR-100%
</TABLE>
ITEM 27. NUMBER OF CONTRACT OWNERS
As of October 31, 1998, there were 24,733 owners of the Contracts, 21,998
which were owners of qualified Contracts.
ITEM 28. INDEMNIFICATION
Reference is hereby made to Article VII, Section 6 of Depositor's Bylaws,
filed as an Exhibit to this registration statement filed on Form N-4. The
Bylaws of Depositor mandate indemnification by Depositor of its directors,
officers and certain others, and permit indemnification of directors, officers,
employees and agents of Washington Square Securities, Inc. ("WSSI") under
certain conditions. Section 4.01 of the Bylaws of WSSI mandates indemnification
by WSSI of its directors and officers under certain conditions.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Depositor or WSSI, pursuant to the foregoing provisions or otherwise, Depositor
and WSSI have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Depositor
of expenses incurred or paid by a director or officer or controlling person of
Depositor or WSSI in the successful defense of any action, suit or proceeding)
is asserted by such
II-6
<PAGE>
director, officer or controlling person of Depositor or WSSI in connection with
the securities being registered, Depositor or WSSI, as the case may be, will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether or not such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
An insurance company blanket bond is maintained providing $25,000,000
coverage for Depositor and the Principal Underwriter, subject to a $500,000
deductible.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) WSSI is the distributor and principal underwriter of the
Contracts. WSSI also acts as the principal distributor and underwriter of:
variable annuity contracts issued by ReliaStar Life Insurance Company
("ReliaStar Life") through the ReliaStar Select Variable Account, a separate
account of ReliaStar Life registered as a unit investment trust under the
Investment Company Act of 1940; flexible premium variable life insurance
policies issued by ReliaStar Life through Select*Life Variable Account, a
separate account of ReliaStar Life registered as unit investment trust under
the Investment Company Act of 1940; variable annuity contracts issued by
ReliaStar Life Insurance Company of New York ("RLNY") through Separate Accounts
M, P, Q, separate accounts of RLNY registered as unit investment trusts under
the Investment Company Act of 1940; and variable life insurance policies issued
by RLNY through ReliaStar Life Insurance Company of New York Variable Life
Separate Account I, a separate account of RLNY registered as a unit investment
trust under the Investment Company Act of 1940.
II-7
<PAGE>
(b) The directors and officers of WSSI are as follows:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITIONS AND OFFICES WITH DEPOSITOR
- ----------------------------- ------------------------------------------------------
<S> <C>
John H. Flittie Director; Chairman
20 Washington Avenue South
Minneapolis, Minnesota 55401
Anne W. Dowdle Director
20 Washington Avenue South
Minneapolis, Minnesota 55401
Michael J. Dubes Director
1501 Fourth Avenue
Seattle, Washington 98111
James R. Gelder Director
20 Security Drive
Avon, Connecticut 06001
Wayne R. Huneke Director
20 Washington Avenue South
Minneapolis, Minnesota 55401
Robert C. Salipante Director
20 Washington Avenue South
Minneapolis, Minnesota 55401
Jeffrey A. Montgomery President and Chief Executive Officer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Kenneth S. Cameranesi Executive Vice President and Chief Operations Officer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Gene Grayson Vice President, National Sales and Marketing
20 Washington Avenue South
Minneapolis, Minnesota 55401
David Braun Assistant Vice President
20 Washington Avenue South
Minneapolis, Minnesota 55401
Karin Callanan Assistant Vice President
20 Washington Avenue South
Minneapolis, Minnesota 55401
Timothy J. Lyle Assistant Vice President and Chief Compliance Officer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Susan M. Bergen Secretary
20 Washington Avenue South
Minneapolis, Minnesota 55401
Margaret B. Wall Treasurer and Chief Financial Officer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Loralee A. Renelt Assistant Secretary
20 Washington Avenue South
Minneapolis, Minnesota 55401
Allen Kidd Assistant Secretary
222 North Arch Road
Richmond, Virginia 23236
</TABLE>
II-8
<PAGE>
(c) For the year ended December 31, 1997 WSSI received $5,551,624 in
fees, including gross concessions, in connection with distribution of the
Contracts.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts and records of Registrant are located at the offices of
Depositor at 1501 Fourth Avenue, Seattle, Washington 98111.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
Registrant will file a post-effective amendment to this Registration
Statement as frequently as is necessary to ensure that the audited financial
statements in this Registration Statement are never more than 16 months old for
so long as payments under the Contracts may be accepted.
Registrant will include either (1) as part of any application to purchase
a Contract offered by the Prospectus, a space that an applicant can check to
request a Statement of Additional Information, or (2) a postcard or similar
written communication affixed to or included in the Prospectus that the
applicant can remove to send for a Statement of Additional Information.
Registrant will deliver any Statement of Additional Information and any
financial statements required to be made available under this form promptly
upon written or oral request.
The Depositor and the Registrant rely on a no-action letter issued by the
Division of Investment Management to the American Council of Life Insurance on
November 28, 1988 and represent that the conditions enumerated therein have
been or will be complied with.
The Depositor represents that the fees and charges deducted under the
Advantage series variable annuity contracts, in the aggregate, are reasonable
in relation to the services rendered, the expenses expected to be incurred, and
the risks assumed by the Company.
The Depositor and Registrant rely on SEC regulation (section)270.6c-7 with
respect to offering variable annuity contracts under the Texas Optional
Retirement Program and represent that the provisions of paragraphs (a)-(d) of
that regulation have been or will be complied with.
II-9
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, Registrant certifies that it meets the requirements of Securities Act Rule
485 for effectiveness of this Registration Statement and has caused this
Post-Effective Amendment No. 6 to the Registration Statement to be signed on its
behalf, in the City of Seattle and State of Washington, on this 16th day of
December, 1998.
SEPARATE ACCOUNT ONE
(Registrant)
By NORTHERN LIFE INSURANCE COMPANY
(Depositor)
By /s/ MICHAEL J. DUBES
----------------------------------------
Michael J. Dubes
President and Chief Executive Officer
As required by the Securities Act of 1933 and the Investment Company Act of
1940, Depositor has caused this Post-Effective Amendment No. 6 to the
Registration Statement to be signed on its behalf, in the City of Seattle and
State of Washington, on this 16th day of December, 1998.
NORTHERN LIFE INSURANCE COMPANY
By /s/ MICHAEL J. DUBES
----------------------------------------
Michael J. Dubes
President and Chief Executive Officer
As required by the Securities Act of 1933, Post-Effective Amendment No. 6 to the
Registration Statement has been signed on this 16th day of December, 1998 by the
following directors and officers of Depositor in the capacities indicated:
/s/ MICHAEL J. DUBES President and Chief Executive Officer
- ---------------------------------
Michael J. Dubes
/s/ JERYL A. MILLNER Vice President, Chief Financial Officer and
- --------------------------------- Treasurer
Jeryl A. Millner
Richard R. Crowl Mark S. Jordahl James R. Miller
Michael J. Dubes Kenneth U. Kuk Robert C. Salipante
John H. Flittie Susan W.A. Mead John G. Turner
Wayne R. Huneke
Stewart D. Gregg, by signing his name hereto, does hereby sign this document on
behalf of each of the above-named directors of Northern Life Insurance Company
pursuant to powers of attorney duly executed by such persons.
/s/ Stewart D. Gregg
----------------------------------------
Stewart D. Gregg, Attorney-In-Fact
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C> <C>
(b) Exhibits
3. (c) Form of Amended Broker/Dealer Variable Annuity Compensation Schedule.
4. (l) Fixed Account C Endorsement.
8. (f) Form of Participation Agreement among Fidelity Variable Insurance Products
Fund III, Fidelity Distributors Corporation and Northern Life Insurance Company.
(i) Form of Amendment No. 1 to Participation Agreement by and among Northern
Life Insurance Company, Neuberger Berman Advisers Management Trust,
Advisers Management Trust and Neuberger Berman Management Incorporated.
9. Consent and Opinion of Stewart D. Gregg as to the legality of the securities being
registered.
10. Consent of Deloitte & Touche LLP.
13. Schedule of computation of performance data.
15. Power of Attorney for Susan W.A. Mead.
</TABLE>
[LOGO] RELIASTAR
NORTHERN LIFE
BROKER/DEALER INSURANCE COMPANY
VARIABLE ANNUITY COMPENSATION SCHEDULE A RELIASTAR COMPANY
- --------------------------------------------------------------------------------
Your dealer concession will be the following percentage of the premium received
by us. No dealer concessions are payable on a policy after the 20th policy year.
This Schedule is effective with business written 1 January 1999.
Periodic Series ---------------------------------------------
% OF PAID PREMIUM
- ------------------------------------------------------------------------
PERIODIC & INCREASE OPTION A OPTION B OPTION C OPTION D
- ------------------------------------------------------------------------
Policy Years 1-2 6 4 1 3
Policy Year 3 5 4 1 2
Policy Years 4-6 5 4 .5 1
Policy Years 7-20 5 4 0 1
TRANSFER
Policy Years 1-2 6 4 1 3
Policy Year 3 5 4 1 2
Policy Years 4-5 5 4 .5 1
Policy Years 6-20 0 0 0 0
TRANSFER SERIES
- ------------------------------------------------------------------------
TRANSFER OPTION A OPTION B OPTION C OPTION D
- ------------------------------------------------------------------------
Policy Years 1-2 6.5 5.25 1 3
Policy Year 3 6.5 5.25 1 3
Policy Years 4-6 6.5 5.25 1 2
Policy Years 7-20 6.5 5.25 1 1
ASSET-BASED COMMISSION INFORMATION
Asset-based commission (ABC) is paid monthly based on the percent of
accumulation value. The yearly rate is below. Divide by 12 to find the monthly
payout.
PERIODIC SERIES
- ------------------------------------------------------------------------
POLICY YEARS OPTION A OPTION B OPTION C OPTION D
- ------------------------------------------------------------------------
1 0 0 0 0
2-6 0 .25 1 .2
7-10 0 .25 1 .2
11-20 0 .25 1 1
TRANSFER SERIES
- ------------------------------------------------------------------------
POLICY YEARS OPTION A OPTION B OPTION C OPTION D
- ------------------------------------------------------------------------
1 0 0 0 0
2-6 0 .25 1 .2
7-10 0 .25 1 1
11-20 0 .25 1 1
By: __________________________________________
Printed Name: ________________________________
Title: _______________________________________
(If corporation)
Corporation Name: ____________________________
<PAGE>
GENERAL RULES PERTAINING TO VARIABLE CONTRACTS
1. CHANGE OF DEALER AUTHORIZATION. No compensation of any kind shall be payable
in respect of Variable Contracts following Insurer's or General Distributor's
receipt of a change of dealer authorization applicable to such Variable
Contract.
2. CHANGE IN REPRESENTATIVE'S STATUS. Broker/Dealer agrees that in the event a
Representative ceases to be an associated person of Broker/Dealer or ceases to
be validly licensed or registered, Broker/Dealer shall not receive any
compensation based on any Variable Contract, its values, or on premium or
purchase payments thereafter received by Northern Life and/or WSSI from such
former Representative's customers. Provided, however, if within 60 days after
such Representative ceases to be a representative of Broker/Dealer,
Broker/Dealer designates another registered representative of Broker/Dealer to
service the former Representative's business, the compensation not paid shall be
payable to Broker/Dealer. If an assigned Representative's replacement is not
designated within such 60 day period, Broker/Dealer may not thereafter designate
a replacement Representative for such Variable Contracts and shall not be
entitled to such compensation.
3. EXCLUSIVE COMPENSATION. Broker/Dealer agrees that no compensation of any kind
other than as described herein is payable by Insurer or General Distributor in
respect of Broker/Dealer's sales of Variable Contracts.
4. REPLACEMENT BUSINESS. The amount and time of payment of commissions on
replacements, changes, transfers, or exchanges from a policy previously issued
by Insurer or an affiliate shall be governed by Insurer's rules and regulations.
5. COMMISSIONS. Commissions shall accrue on Variable Contracts issued as and
when premium is received by Insurer and applied as premium due or payable on
such policies, except as Insurer's practices may otherwise provide.
6. CHARGE BACKS. In any case where Insurer has credited a commission to
Broker/Dealer on the basis of a premium on a Variable Contract issued and the
premium is returned to the purchaser, Insurer will charge back such commissions.
7. ISSUE AGE. Issue age is based upon the annuitant's age on last birthday.
NORTHERN LIFE INSURANCE COMPANY
A RELIASTAR COMPANY
P.O. Box 12530, Seattle, Washington 98111-4530
This Endorsement is part of your Contract. The provisions of this Endorsement
supersede any conflicting provisions in your Contract or in any prior
endorsements.
"We" are the Northern Life Insurance Company. "You" are the Owner of the
Contract according to our records. "IRC" means the Internal Revenue Code of
1986, as amended from time to time. "IRS" means the Internal Revenue Service.
This Endorsement amends the Contract to add Fixed Account C. Fixed Account C is
provided as a vehicle for dollar cost averaging to any of the Variable
Sub-Accounts. The Minimum Purchase Payment for fixed Account C is $5,000.
I. FIXED ACCOUNT. The Fixed Account consists of fixed Account A, Fixed Account
B, and Fixed Account C. Purchase Payments allocated to any Fixed Account
and the Contract Value reallocated to Fixed Account A or Fixed Account B,
will be credited with interest at rates we determine from time to time, but
never less than an effective yearly interest rate of three percent (3%).
II. REALLOCATIONS. Reallocations from Fixed Account C to the Variable Account
must begin within 30 days and shall be in substantially equal payments over
a period of twelve (12) months. You may change the Variable Sub-Account(s)
receiving Fixed Account C reallocations with written notice prior to the
Reallocation Date. Only one reallocation of Fixed Account C shall take
place at any one time. If additional Purchase Payment(s) are received for
allocation to Fixed Account C, the balance of Fixed Account C will be
adjusted to reflect the subsequent payment(s) and reallocations will be
recalculated based on the remaining 12 month period. Reallocations from the
Fixed Account A, Fixed Account B, or the Variable Account to Fixed Account
C are prohibited. No loans or full or partial withdrawals are available
from Fixed Account C. Purchase Payments must be moved to Fixed Account A or
Fixed Account B for loans or withdrawals.
III. REALLOCATION DATE. Reallocations from Fixed Account C will be transferred
any time before the 29th day of each month. You may direct us on which day
you want the reallocation.
IV. INTEREST CREDITING. We may credit interest in excess of the guaranteed rate
of three percent (3%). Any interest rate in effect when an amount is
allocated to a Fixed Account is for the calendar year. All interest will be
credited and compounded daily to the Fixed Account value using the daily
equivalent of the effective yearly interest rate.
V. FIXED ACCOUNT CONTRACT VALUE. The Fixed Account Value on any Valuation Date
is:
1. The sum of your Purchase Payment(s) allocated to Fixed Account A,
Fixed Account B, and Fixed Account C;
2. Plus any reallocations from the Variable Account to Fixed Account A
and Fixed Account B;
3. Plus interest credited to Fixed Account A, Fixed Account B, and Fixed
Account C;
4. Minus any previous partial Withdrawals, amounts applied to purchase
partial Annuity Payouts, and annual contract charges applied to the
Fixed Account:
5. Minus any previous reallocations to the Variable Account;
6. Minus Premium Tax deducted, if any.
I. DISCONTINUING REALLOCATIONS FROM FIXED ACCOUNT C. If reallocations from
Fixed Account C are discontinued prior to the end of the twelve (12) month
term, the remaining balance of Fixed Account C will be reallocated to Fixed
Account A, unless you tell us differently.
Notwithstanding anything else in your Contract, the provisions of this
Endorsement are controlling.
The Effective Date of this Endorsement is ________________________________
/s/ Susan M. Bergen
Secretary
FIXED ACCOUNT C ENDORSEMENT
Page 1
Form No. 1300? 9-98
PARTICIPATION AGREEMENT
Among
VARIABLE INSURANCE PRODUCTS FUND __,
FIDELITY DISTRIBUTORS CORPORATION
and
________________ INSURANCE COMPANY _______________
THIS AGREEMENT, made and entered into as of the _________ day of
______________, 1998 by and among ________________ LIFE INSURANCE COMPANY,
(hereinafter the "Company"), a ___________ corporation, on its own behalf and on
behalf of each segregated asset account of the Company set forth on Schedule A
hereto as may be amended from time to time (each such account hereinafter
referred to as the "Account"), and the VARIABLE INSURANCE PRODUCTS FUND ___, an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts (hereinafter the "Fund") and FIDELITY DISTRIBUTORS CORPORATION
(hereinafter the "Underwriter"), a Massachusetts corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and variable
annuity contracts (collectively, the "Variable Insurance Products") to be
offered by insurance companies which have entered into participation agreements
with the Fund and the Underwriter (hereinafter "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into
several series of shares, each representing the interest in a particular managed
portfolio of securities and other assets, any one or more of which may be made
available under this Agreement, as may be amended from time to time by mutual
agreement of the parties hereto (each such series hereinafter referred to as a
"Portfolio"); and
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated September 17, 1986 (File No. 812-6422), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter the "1940 Act") and Rules 6e-2(b) (15) and 6e-3(T) (b) (15)
thereunder, to the extent necessary to permit
1
<PAGE>
shares of the Fund to be sold to and held by variable annuity and variable life
insurance separate accounts of both affiliated and unaffiliated life insurance
companies (hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, Fidelity Management & Research Company (the "Adviser")
is duly registered as an investment adviser under the federal Investment
Advisers Act of 1940 and any applicable state securities law; and
WHEREAS, the Company has registered or will register certain
variable life insurance and variable annuity contracts under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of Directors of
the Company, on the date shown for such Account on Schedule A hereto, to set
aside and invest assets attributable to the aforesaid variable annuity
contracts; and
WHEREAS, the Company has registered or will register each
Account as a unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with
the Securities and Exchange Commission ("SEC") under the Securities Exchange Act
of 1934, as amended, (hereinafter the "1934 Act"), and is a member in good
standing of the National Association of Securities Dealers, Inc. (hereinafter
"NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Company intends to purchase shares in the Portfolios on
behalf of each Account to fund certain of the aforesaid variable life and
variable annuity contracts and the Underwriter is authorized to sell such shares
to unit investment trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Underwriter agrees to sell to the Company those shares
of the Fund which each Account orders, executing such orders on a daily basis at
the net asset value next computed after receipt by the Fund or its designee of
the order for the shares of the Fund. For purposes of this Section 1.1, the
Company shall be the designee of the Fund for receipt of such orders from each
Account and receipt by such designee shall
2
<PAGE>
constitute receipt by the Fund; provided that the Fund receives notice of such
order by 9:00 a.m. Boston time on the next following Business Day. "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Fund calculates its net asset value pursuant to the rules of
the Securities and Exchange Commission.
1.2. The Fund agrees to make its shares available indefinitely
for purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value pursuant
to rules of the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each day which the New
York Stock Exchange is open for trading. Notwithstanding the foregoing, the
Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Board
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interests of the shareholders
of such Portfolio.
1.3. The Fund and the Underwriter agree that shares of the Fund
will be sold only to Participating Insurance Companies and their separate
accounts. No shares of any Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund shares to
any insurance company or separate account unless an agreement containing
provisions substantially the same as Articles I, III, V, VII and Section 2.5 of
Article II of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's
request, any full or fractional shares of the Fund held by the Company,
executing such requests on a daily basis at the net asset value next computed
after receipt by the Fund or its designee of the request for redemption. For
purposes of this Section 1.5, the Company shall be the designee of the Fund for
receipt of requests for redemption from each Account and receipt by such
designee shall constitute receipt by the Fund; provided that the Fund receives
notice of such request for redemption on the next following Business Day.
1.6. The Company agrees that purchases and redemptions of
Portfolio shares offered by the then current prospectus of the Fund shall be
made in accordance with the provisions of such prospectus. The Company agrees
that all net amounts available under the variable annuity contracts with the
form number(s) which are listed on Schedule A attached hereto and incorporated
herein by this reference, as such Schedule A may be amended from time to time
hereafter by mutual written agreement of all the parties hereto, (the
"Contracts") shall be invested in the Fund, in such other Funds advised by the
Adviser as may be mutually agreed to in writing by the parties hereto, or in the
Company's general account, provided that such amounts may also be invested in an
investment company other than the Fund if (a) such other investment company, or
series
3
<PAGE>
thereof, has investment objectives or policies that are substantially different
from the investment objectives and policies of all the Portfolios of the Fund;
or (b) the Company gives the Fund and the Underwriter 45 days written notice of
its intention to make such other investment company available as a funding
vehicle for the Contracts; or (c) such other investment company was available as
a funding vehicle for the Contracts prior to the date of this Agreement and the
Company so informs the Fund and Underwriter prior to their signing this
Agreement (a list of such funds appearing on Schedule C to this Agreement); or
(d) the Fund or Underwriter consents to the use of such other investment
company.
1.7. The Company shall pay for Fund shares on the next Business
Day after an order to purchase Fund shares is made in accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted
by wire. For purpose of Section 2.10 and 2.11, upon receipt by the Fund of the
federal funds so wired, such funds shall cease to be the responsibility of the
Company and shall become the responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book
entry only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire or
telephone, followed by written confirmation) to the Company of any income,
dividends or capital gain distributions payable on the Fund's shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on the Portfolio shares in additional shares of
that Portfolio. The Company reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash. The
Fund shall notify the Company of the number of shares so issued as payment of
such dividends and distributions.
1.10. The Fund shall make the net asset value per share for each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated (normally by 6:30
p.m. Boston time) and shall use its best efforts to make such net asset value
per share available by 7 p.m. Boston time.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts are
or will be registered under the 1933 Act; that the Contracts will be issued and
sold in compliance in all material respects with all applicable Federal and
State laws and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally
4
<PAGE>
and validly established each Account prior to any issuance or sale thereof as a
segregated asset account under Section _________ of the ______________ Insurance
Code and has registered or, prior to any issuance or sale of the Contracts, will
register each Account as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for the
Contracts.
2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of the State of
______________ and all applicable federal and state securities laws and that the
Fund is and shall remain registered under the 1940 Act. The Fund shall amend the
Registration Statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares. The Fund shall register and qualify the shares for sale in accordance
with the laws of the various states only if and to the extent deemed advisable
by the Fund or the Underwriter.
2.3. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended, (the "Code") and that it will make every effort to maintain
such qualification (under Subchapter M or any successor or similar provision)
and that it will notify the Company immediately upon having a reasonable basis
for believing that it has ceased to so qualify or that it might not so qualify
in the future.
2.4. The Company represents that the Contracts are currently
treated as endowment or annuity insurance contracts, under applicable provisions
of the Code and that it will make every effort to maintain such treatment and
that it will notify the Fund and the Underwriter immediately upon having a
reasonable basis for believing that the Contracts have ceased to be so treated
or that they might not be so treated in the future.
2.5. (a) With respect to Initial Class shares, the Fund
currently does not intend to make any payments to finance distribution expenses
pursuant to Rule 12b-1 under the 1940 Act or otherwise, although it may make
such payments in the future. The Fund has adopted a "no fee" or "defensive" Rule
12b-1 Plan under which it makes no payments for distribution expenses. To the
extent that it decides to finance distribution expenses pursuant to Rule 12b-1,
the Fund undertakes to have a board of trustees, a majority of whom are not
interested persons of the Fund, formulate and approve any plan under Rule 12b-1
to finance distribution expenses.
(b) With respect to Service Class shares, the Fund has
adopted a Rule 12b-1 Plan under which it makes payments to finance distribution
expenses. The Fund represents and warrants that it has a board of trustees, a
majority of whom are not interested persons of the Fund, which has formulated
and approved the Fund's Rule 12b-1 Plan to finance distribution expenses of the
Fund and that any changes to the Fund's Rule 12b-1 Plan will be approved by a
similarly constituted board of trustees.
5
<PAGE>
2.6. The Fund makes no representation as to whether any aspect
of its operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states except that the Fund represents that the Fund's investment
policies, fees and expenses are and shall at all times remain in compliance with
the laws of the State of ______________ and the Fund and the Underwriter
represent that their respective operations are and shall at all times remain in
material compliance with the laws of the State of ______________ to the extent
required to perform this Agreement.
2.7. The Underwriter represents and warrants that it is a member
in good standing of the NASD and is registered as a broker-dealer with the SEC.
The Underwriter further represents that it will sell and distribute the Fund
shares in accordance with the laws of the State of ______________ and all
applicable state and federal securities laws, including without limitation the
1933 Act, the 1934 Act, and the 1940 Act.
2.8. The Fund represents that it is lawfully organized and
validly existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply in all material respects with the 1940 Act.
2.9. The Underwriter represents and warrants that the Adviser is
and shall remain duly registered in all material respects under all applicable
federal and state securities laws and that the Adviser shall perform its
obligations for the Fund in compliance in all material respects with the laws of
the State of ______________ and any applicable state and federal securities
laws.
2.10. The Fund and Underwriter represent and warrant that all of
their directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11. The Company represents and warrants that all of its
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund, and that said bond is issued by a reputable bonding company, includes
coverage for larceny and embezzlement, and is in an amount not less than $5
million. The Company agrees to make all reasonable efforts to see that this bond
or another bond containing these provisions is always in effect, and agrees to
notify the Fund and the Underwriter in the event that such coverage no longer
applies.
6
<PAGE>
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company with as many
printed copies of the Fund's current prospectus and Statement of Additional
Information as the Company may reasonably request. If requested by the Company
in lieu thereof, the Fund shall provide camera-ready film containing the Fund's
prospectus and Statement of Additional Information, and such other assistance as
is reasonably necessary in order for the Company once each year (or more
frequently if the prospectus and/or Statement of Additional Information for the
Fund is amended during the year) to have the prospectus for the Contracts and
the Fund's prospectus printed together in one document, and to have the
Statement of Additional Information for the Fund and the Statement of Additional
Information for the Contracts printed together in one document. Alternatively,
the Company may print the Fund's prospectus and/or its Statement of Additional
Information in combination with other fund companies' prospectuses and
statements of additional information. Except as provided in the following three
sentences, all expenses of printing and distributing Fund prospectuses and
Statements of Additional Information shall be the expense of the Company. For
prospectuses and Statements of Additional Information provided by the Company to
its existing owners of Contracts in order to update disclosure annually as
required by the 1933 Act and/or the 1940 Act, the cost of printing shall be
borne by the Fund. If the Company chooses to receive camera-ready film in lieu
of receiving printed copies of the Fund's prospectus, the Fund will reimburse
the Company in an amount equal to the product of A and B where A is the number
of such prospectuses distributed to owners of the Contracts, and B is the Fund's
per unit cost of typesetting and printing the Fund's prospectus. The same
procedures shall be followed with respect to the Fund's Statement of Additional
Information.
The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the Fund's
expenses do not include the cost of printing any prospectuses or Statements of
Additional Information other than those actually distributed to existing owners
of the Contracts.
3.2. The Fund's prospectus shall state that the Statement of
Additional Information for the Fund is available from the Underwriter or the
Company (or in the Fund's discretion, the Prospectus shall state that such
Statement is available from the Fund).
3.3. The Fund, at its expense, shall provide the Company with
copies of its proxy statements, reports to shareholders, and other
communications (except for prospectuses and Statements of Additional
Information, which are covered in Section 3.1) to shareholders in such quantity
as the Company shall reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received
7
<PAGE>
from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in a particular separate account in the same
proportion as Fund shares of such portfolio for which
instructions have been received in that separate account,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund shares
held in any segregated asset account in its own right, to the extent permitted
by law. Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts participating in the Fund calculates voting
privileges in a manner consistent with the standards set forth on Schedule B
attached hereto and incorporated herein by this reference, which standards will
also be provided to the other Participating Insurance Companies.
3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act (although the
Fund is not one of the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will
act in accordance with the Securities and Exchange Commission's interpretation
of the requirements of Section 16(a) with respect to periodic elections of
trustees and with whatever rules the Commission may promulgate with respect
thereto.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or its investment adviser or the Underwriter is
named, at least fifteen Business Days prior to its use. No such material shall
be used if the Fund or its designee reasonably objects to such use within
fifteen Business Days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee or by the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.
4.3. The Fund, Underwriter, or its designee shall furnish, or
shall cause to
8
<PAGE>
be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company and/or its
separate account(s), is named at least fifteen Business Days prior to its use.
No such material shall be used if the Company or its designee reasonably objects
to such use within fifteen Business Days after receipt of such material.
4.4. The Fund and the Underwriter shall not give any information
or make any representations on behalf of the Company or concerning the Company,
each Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with the Securities and
Exchange Commission or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses, Statements of Additional
Information, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemptions, requests for no
action letters, and all amendments to any of the above, that relate to the
Contracts or each Account, contemporaneously with the filing of such document
with the SEC or other regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but is not limited to, any
of the following that refer to the Fund or any affiliate of the Fund:
advertisements (such as material published, or designed for use in, a newspaper,
magazine, or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or other public media),
sales literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.
ARTICLE V. Fees and Expenses
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5.1. The Fund and Underwriter shall pay no fee or other
compensation to the Company under this agreement, except that if the Fund or any
Portfolio adopts and implements a plan pursuant to Rule 12b-1 to finance
distribution expenses, then the Underwriter may make payments to the Company or
to the underwriter for the Contracts if and in amounts agreed to by the
Underwriter in writing and such payments will be made out of existing fees
otherwise payable to the Underwriter, past profits of the Underwriter or other
resources available to the Underwriter. No such payments shall be made directly
by the Fund.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law,
and all taxes on the issuance or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of distributing the
Fund's prospectus, proxy materials and reports to owners of Contracts issued by
the Company.
ARTICLE VI. Diversification
6.1. The Fund will at all times invest money from the Contracts
in such a manner as to ensure that the Contracts will be treated as variable
contracts under the Code and the regulations issued thereunder. Without limiting
the scope of the foregoing, the Fund will at all times comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life insurance
contracts and any amendments or other modifications to such Section or
Regulations. In the event of a breach of this Article VI by the Fund, it will
take all reasonable steps (a) to notify Company of such breach and (b) to
adequately diversify the Fund so as to achieve compliance within the grace
period afforded by Regulation 1.817-5.
ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the contract owners of
all separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a
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<PAGE>
change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts
of which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order, by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Board, or a
majority of its disinterested trustees, that a material irreconcilable conflict
exists, the Company and other Participating Insurance Companies shall, at their
expense and to the extent reasonably practicable (as determined by a majority of
the disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2), establishing a new
registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account; provided, however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested members of the Board. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Underwriter and Fund shall continue to accept
and implement orders by the Company for the purchase (and redemption) of shares
of the Fund.
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<PAGE>
7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company will
withdraw the affected Account's investment in the Fund and terminate this
Agreement with respect to such Account within six months after the Board informs
the Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. Until the end of the foregoing six month period, the Underwriter
and Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement,
a majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision
of the Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies,
as appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of
this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
8.1(a). The Company agrees to indemnify and hold harmless the
Fund and
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each trustee of the Board and officers and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements are related to the sale or acquisition of the Fund's shares or
the Contracts and:
(i) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact contained in
the Registration Statement or prospectus for the Contracts or
contained in the Contracts or sales literature for the Contracts
(or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Company by
or on behalf of the Fund for use in the Registration Statement
or prospectus for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the Registration Statement, prospectus or sales
literature of the Fund not supplied by the Company, or persons
under its control) or wrongful conduct of the Company or persons
under its control, with respect to the sale or distribution of
the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration
Statement, prospectus, or sales literature of the Fund or any
amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance
upon information furnished to the Fund by or on behalf of the
Company; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms
of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company, as
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<PAGE>
limited by and in
accordance with the provisions of Sections 8.1(b) and 8.1(c)
hereof.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed against
an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations or
duties under this Agreement or to the Fund, whichever is
applicable.
8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against
an Indemnified Party unless such Indemnified Party shall have
notified the Company in writing within a reasonable time after
the summons or other first legal process giving information of
the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not
relieve the Company from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the
Company shall be entitled to participate, at its own expense, in
the defense of such action. The Company also shall be entitled
to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Company to such
party of the Company's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be
liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs
of investigation.
8.1(d). The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the Fund
Shares or the Contracts or the operation of the Fund.
8.2. Indemnification by the Underwriter
8.2(a). The Underwriter agrees to indemnify and hold harmless the Company and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Underwriter) or litigation (including legal and other
expenses) to which the Indemnified
14
<PAGE>
Parties may become subject under any statute, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements are related to the sale or acquisition of the
Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in the Registration Statement or prospectus
or sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged
omission to state therein a material fact required to
be stated therein or necessary to make the statements
therein not misleading, provided that this agreement
to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reliance upon and
in conformity with information furnished to the
Underwriter or Fund by or on behalf of the Company
for use in the Registration Statement or prospectus
for the Fund or in sales literature (or any amendment
or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Registration
Statement, prospectus or sales literature for the
Contracts not supplied by the Underwriter or persons
under its control) or wrongful conduct of the Fund,
Adviser or Underwriter or persons under their
control, with respect to the sale or distribution of
the Contracts or Fund shares; or
(iii)arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
Registration Statement, prospectus, or sales
literature covering the Contracts, or any amendment
thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statement or statements therein not misleading,
if such statement or omission was made in reliance
upon information furnished to the Company by or on
behalf of the Fund; or
(iv) arise as a result of any failure by the Fund to
provide the services and furnish the materials under
the terms of this Agreement (including a failure,
whether unintentional or in good faith or
otherwise, to comply with the diversification
requirements specified in Article VI of this
Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Underwriter in this
15
<PAGE>
Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter;
as limited by and in accordance with the provisions
of Sections 8.2(b) and 8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to each Company or the Account, whichever is applicable.
8.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of
the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Contracts
or the operation of each Account.
8.3. Indemnification By the Fund
8.3(a). The Fund agrees to indemnify and hold harmless the
Company, and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.3)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Fund) or litigation (including
legal and other expenses) to which the Indemnified Parties may become
16
<PAGE>
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements result from the gross negligence, bad faith or willful misconduct of
the Board or any member thereof, are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to
provide the services and furnish the materials under
the terms of this Agreement (including a failure to
comply with the diversification requirements
specified in Article VI of this Agreement);or
(ii) arise out of or result from any material breach of
any representation and/or warranty made by the Fund
in this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Underwriter or each Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). The Company and the Underwriter agree promptly to notify
the Fund of the commencement of any litigation or proceedings against it or any
of its
17
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respective officers or directors in connection with this Agreement, the
issuance or sale of the Contracts, with respect to the operation of either
Account, or the sale or acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party for any reason by sixty (60) days
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio based
upon the Company's determination that shares of such
Portfolio are not reasonably available to meet the
requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio in the
event any of the Portfolio's shares are not registered,
issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares
as the underlying investment media of the Contracts issued
or to be issued by the Company; or
(d) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio in the
event that such Portfolio ceases to qualify as a Regulated
Investment Company under Subchapter M of the Code or under
any successor or similar provision, or if the Company
reasonably believes that the Fund may fail to so qualify;
or
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(e) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio in the
event that such Portfolio fails to meet the
diversification requirements specified in Article VI
hereof; or
(f) termination by either the Fund or the Underwriter by
written notice to the Company, if either one or both of
the Fund or the Underwriter respectively, shall determine,
in their sole judgment exercised in good faith, that the
Company and/or its affiliated companies has suffered a
material adverse change in its business, operations,
financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity;
or
(g) termination by the Company by written notice to the Fund
and the Underwriter, if the Company shall determine, in
its sole judgment exercised in good faith, that either the
Fund or the Underwriter has suffered a material adverse
change in its business, operations, financial condition or
prospects since the date of this Agreement or is the
subject of material adverse publicity; or
(h) termination by the Fund or the Underwriter by written
notice to the Company, if the Company gives the Fund and
the Underwriter the written notice specified in Section
1.6(b) hereof and at the time such notice was given there
was no notice of termination outstanding under any other
provision of this Agreement; provided, however any
termination under this Section 10.1(h) shall be effective
forty five (45) days after the notice specified in Section
1.6(b) was given.
10.2. Effect of Termination. Notwithstanding any termination of
this Agreement, the Fund and the Underwriter shall at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that this
Section 10.2 shall not apply to any terminations under Article VII and the
effect of such Article VII terminations shall be governed by Article VII of this
Agreement.
10.3 The Company shall not redeem Fund shares attributable to
the Contracts (as opposed to Fund shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract Owner
initiated or approved transactions, or (ii) as required by state and/or federal
laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly
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<PAGE>
furnish to the Fund and the Underwriter the
opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Underwriter) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption. Furthermore,
except in cases where permitted under the terms of the Contracts, the Company
shall not prevent Contract Owners from allocating payments to a Portfolio that
was otherwise available under the Contracts without first giving the Fund or the
Underwriter 90 days notice of its intention to do so.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered
or certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to the Fund:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
If to the Company:
__________ Life Insurance Company
_________________________________
_________________________________
Attention: ______________________
If to the Underwriter:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
ARTICLE XII. Miscellaneous
12.1 All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Board, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected
20
<PAGE>
party.
12.3 The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
12.5 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance Regulations and any other applicable law or regulations.
12.7 The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.8. This Agreement or any of the rights and obligations
hereunder may not be assigned by any party without the prior written consent of
all parties hereto; provided, however, that the Underwriter may assign this
Agreement or any rights or obligations hereunder to any affiliate of or company
under common control with the Underwriter, if such assignee is duly licensed and
registered to perform the obligations of the Underwriter under this Agreement.
The Company shall promptly notify the Fund and the Underwriter of any change in
control of the Company.
12.9. The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee copies of the following reports:
(a) the Company's annual statement (prepared under
statutory accounting principles) and annual report
(prepared under generally accepted accounting
principles ("GAAP"), if any), as soon as practical
and in any event within 90 days after the end of
each fiscal year;
21
<PAGE>
(b) the Company's quarterly statements (statutory)
(and GAAP, if any), as soon as practical and in
any event within 45 days after the end of each
quarterly period:
(c) any financial statement, proxy statement, notice
or report of the Company sent to stockholders
and/or policyholders, as soon as practical after
the delivery thereof to stockholders;
(d) any registration statement (without exhibits) and
financial reports of the Company filed with the
Securities and Exchange Commission or any state
insurance regulator, as soon as practical after
the filing thereof;
(e) any other report submitted to the Company by
independent accountants in connection with any
annual, interim or special audit made by them of
the books of the Company, as soon as practical
after the receipt thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
______________ LIFE INSURANCE COMPANY
By: _________________________
Name: _________________________
Title: _________________________
VARIABLE INSURANCE PRODUCTS FUND ___
By: ________________________
Robert C. Pozen
Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By: _______________________
Kevin J. Kelly
Vice President
22
<PAGE>
Schedule A
Separate Accounts and Associated Contracts
Name of Separate Account and Policy Form Numbers of Contracts
Funded
Date Established by Board of Directors By Separate Account
- -------------------------------------- -------------------
23
<PAGE>
SCHEDULE B
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Fund by the Underwriter, the Fund and the
Company. The defined terms herein shall have the meanings assigned in the
Participation Agreement except that the term "Company" shall also include the
department or third party assigned by the Insurance Company to perform the steps
delineated below.
1. The number of proxy proposals is given to the Company by the Underwriter
as early as possible before the date set by the Fund for the shareholder
meeting to facilitate the establishment of tabulation procedures. At
this time the Underwriter will inform the Company of the Record, Mailing
and Meeting dates. This will be done verbally approximately two months
before meeting.
2. Promptly after the Record Date, the Company will perform a "tape run",
or other activity, which will generate the names, addresses and number
of units which are attributed to each contractowner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in Step #2. The Company will use its best efforts to call in
the number of Customers to Fidelity, as soon as possible, but no later
than two weeks after the Record Date.
3. The Fund's Annual Report no longer needs to be sent to each Customer by
the Company either before or together with the Customers' receipt of a
proxy statement. Underwriter will provide the last Annual Report to the
Company pursuant to the terms of Section 3.3 of the Agreement to which
this Schedule relates.
4. The text and format for the Voting Instruction Cards ("Cards" or "Card")
is provided to the Company by the Fund. The Company, at its expense,
shall produce and personalize the Voting Instruction Cards. The Legal
Department of the Underwriter or its affiliate ("Fidelity Legal") must
approve the Card before it is printed. Allow approximately 2-4 business
days for printing information on the Cards. Information commonly found
on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and
verification of votes (already on Cards as printed by
the Fund)
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
24
<PAGE>
5. During this time, Fidelity Legal will develop, produce, and the Fund
will pay for the Notice of Proxy and the Proxy Statement (one document).
Printed and folded notices and statements will be sent to Company for
insertion into envelopes (envelopes and return envelopes are provided
and paid for by the Insurance Company). Contents of envelope sent to
Customers by Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed
to the Company or its tabulation agent
d. "urge buckslip" - optional, but recommended. (This is a
small, single sheet of paper that requests Customers to
vote as quickly as possible and that their vote is
important. One copy will be supplied by the Fund.)
e. cover letter - optional, supplied by Company and
reviewed and approved in advance by Fidelity Legal.
6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews
and approves the contents of the mailing package to ensure correctness
and completeness. Copy of this approval sent to Fidelity Legal.
7. Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including) the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation usually takes
place in another department or another vendor depending on process used.
An often used procedure is to sort Cards on arrival by proposal into
vote categories of all yes, no, or mixed replies, and to begin data
entry.
Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal procedure
and has not been required by Fidelity in the past.
9. Signatures on Card checked against legal name on account registration which
was printed on the Card.
Note: For Example, If the account registration is under "Bertram C.
Jones, Trustee," then that is the exact legal name to be printed on the
Card and is the
25
<PAGE>
signature needed on the Card.
10. If Cards are mutilated, or for any reason are illegible or are not
signed properly, they are sent back to Customer with an explanatory
letter, a new Card and return envelope. The mutilated or illegible Card
is disregarded and considered to be not received for purposes of vote
tabulation. Any Cards that have "kicked out" (e.g. mutilated, illegible)
of the procedure are "hand verified," i.e., examined as to why they did
not complete the system. Any questions on those Cards are usually
remedied individually.
11. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is then converted
to shares. (It is very important that the Fund receives the tabulations
stated in terms of a percentage and the number of shares.) Fidelity
Legal must review and approve tabulation format.
13. Final tabulation in shares is verbally given by the Company to Fidelity
Legal on the morning of the meeting not later than 10:00 a.m. Boston
time. Fidelity Legal may request an earlier deadline if required to
calculate the vote in time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final vote.
Fidelity Legal will provide a standard form for each Certification.
15. The Company will be required to box and archive the Cards received from
the Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, Fidelity Legal
will be permitted reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
26
<PAGE>
SCHEDULE C
Other investment companies currently available under the Contracts:
27
AMENDMENT NO. 1 TO THE
FUND PARTICIPATION AGREEMENT
This AMENDMENT NO. 1, dated as of December 1, 1998, NORTHERN LIFE
INSURANCE COMPANY ("LIFE COMPANY"), and NEUBERGER BERMAN ADVISERS MANAGEMENT
TRUST ("TRUST"), ADVISERS MANAGERS TRUST ("MANAGERS TRUST"), and NEUBERGER
BERMAN MANAGEMENT INC. ("NB MANAGEMENT"), is made to the Fund Participation
Agreement, dated as of August 8, 1997, among LIFE COMPANY, TRUST, MANAGERS TRUST
and NB MANAGEMENT (the "Agreement"). Terms defined in the Agreement are used
herein as therein defined.
WHEREAS, the parties desire to amend Appendices A and B to the
Agreement to add one or more Portfolios and Series.
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the parties agree as follows:
1. Appendix A of the Agreement is hereby deleted and replaced with new
Appendix A attached hereto.
2. Appendix B of the Agreement is hereby deleted and replaced with new
Appendix B attached hereto.
3. Except as modified hereby, all other terms and conditions of the Agreement
shall remain in full force and effect.
3. This Amendment No. 1 may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same First Amendment.
NEUBERGER BERMAN NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST MANAGEMENT INC.
By:_______________________________ By:___________________________
Name: Name:
Title: Title:
ADVISERS MANAGERS TRUST NORTHERN LIFE INSURANCE
COMPANY
By: ___________________________ By: ___________________________
Name: Name:
Title: Title:
<PAGE>
APPENDIX A
Neuberger Berman Advisers Corresponding Series of
Management Trust and its Series (Portfolios) Advisers Managers Trust (Series)
- -------------------------------------------- --------------------------------
Balanced Portfolio AMT Balanced Investments
Growth Portfolio AMT Growth Investments
Guardian Portfolio AMT Guardian Investments
International Portfolio AMT International Investments
Limited Maturity Bond Portfolio AMT Limited Maturity Bond
Investments
Liquid Asset Portfolio AMT Liquid Asset Investments
Mid-Cap Growth Portfolio AMT Mid-Cap Growth Investments
Partners Portfolio AMT Partners Investments
Socially Responsive Portfolio AMT Socially Responsive
Investments
2
<PAGE>
Appendix B
Separate Accounts Selected Portfolios
- ----------------- -------------------
Separate Account One Partners Portfolio
Limited Maturity Bond Portfolio
Socially Responsive Portfolio
3
NORTHERN LIFE
A ReliaStar Company
Northern Life Insurance Company
P.O. Box 12530
Seattle, Washington 98111-4530
(206) 292-1111
December 18, 1998
Northern Life Insurance
1501 Fourth Avenue
Seattle, WA 98111
Dear Madam/Sir:
In connection with the proposed registration under the Securities Act of 1933,
as amended, of variable/fixed annuity contracts ("the Contract") and interests
in Separate Account One (the "Varaiable Acount") I have examined documents
relating to the establishment of the Variable Account by the Board of Directors
of Northern Life Insurance Company (the "Company") as a separate account for
assets applicable to variable contracts, pursuant to RCW 48.18A.010 et seq., as
amended, and the Registratin Statement, on Form N-4, amended by Post-Effective
Amendment No. 6 thereto, File N. 33-90474 (the "Registration Statement"), and I
have examined such other documents and have reviewed such matters of law as I
deemed necessary for this opinion, and I advise you that in my opinion:
1. The Variable Account is a separate account of the Company duly created and
validly existing pursuant to the laws of the State of Washington.
2. The Contracts, when issued in accordance with the Prospectus constituting a
part of the Registration Statement and upon compliance with applicable
local law, will be legal and binding obligations of the company in
accordance with their respective terms.
3. The portion of the assets held in the Variable Account equal to reserves
and other contract liabilities with respect to the Variable Account are not
chargeable with liabilities arising out of any other business the Company
might conduct.
I consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Stewart D. Gregg
Counsel
INDEPENDENT AUDITORS' CONSENT
Board of Directors and Contract Holders
Northern Life Separate Account One
We consent to the incorporation by reference in this Post-Effective Amendment
No. 6 to the Registration Statement on Form N-4 (File No. 33-90474) of the
Northern Life Separate Account One filed under the Securities Act of 1933 and
Amendment No. 7 to the Registration Statement filed under the Investment Company
Act of 1940, respectively, of our report dated February 20, 1998 on the audit of
the financial statements of Northern Life Separate Account One as of December
31, 1997 and the two years ended December 31, 1997, and our report dated
February 6, 1998, on the audit of the statutory-basis financial statements of
Northern Life Insurance Company as of and for the years ended December 31, 1997,
and 1996 incorporated by reference in the Statement of Additional Information of
such Registration Statement, and to the references to us under the heading
"Financial Statements and Experts" appearing in the Prospectus and under the
headings "Independent Auditors" and "Financial Statements" appearing in the
Statement of Additional Information, all of which are part of such Registration
Statement.
/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
December 16, 1998
EXHIBIT 99.13
<TABLE>
<CAPTION>
<S> <C>
FUND: FEI VIPF EQUITY INCOME PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 365.04%
Total Return incl M&E 296.91% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 285.32% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
09-Oct-86 $1,000 10.000000 100.00 $3,969.11 $3,853.22 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $3,853.22 $3,853.22 $3,853.22
Total Return Inception 365.04% 285.32% 285.32% 285.32%
Average Annual Return 14.66% 12.76% 12.76% 12.76%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund 369.43%
Total Return incl M&E 307.70%
Total Return incl M&E and Cont Fee 297.09%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 $4,076.99 $3,970.86 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $3,970.86 $3,970.86 $3,935.13
Total Return 10 Years 369.43% 297.09% 297.09% 293.51%
Average Annual Return 16.72% 14.79% 14.79% 14.68%
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund 150.50%
Total Return incl M&E 133.45%
Total Return incl M&E and Cont Fee 130.39%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 $2,334.49 $2,303.91 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,303.91 $2,267.91 $2,179.50
Total Return 5 Years 150.50% 130.39% 126.79% 117.95%
Average Annual Return 20.16% 18.17% 17.79% 16.86%
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 28.11%
Total Return incl M&E 26.32%
Total Return incl M&E and Cont Fee 25.98%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,263.16 $1,259.84 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,259.84 $1,205.84 $1,169.13
Total Return 1 Year 28.11% 25.98% 20.58% 16.91%
Average Annual Return 28.11% 25.98% 20.58% 16.91%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: FGP VIPF GROWTH PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 407.79%
Total Return incl M&E 333.40% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 320.74% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
09-Oct-86 $1,000 10.000000 100.00 $4,333.99 $4,207.43 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $4,207.43 $4,207.43 $4,207.43
Total Return Inception 407.79% 320.74% 320.74% 320.74%
Average Annual Return 15.56% 13.64% 13.64% 13.64%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund 388.38%
Total Return incl M&E 324.16%
Total Return incl M&E and Cont Fee 313.12%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 $4,241.57 $4,131.16 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $4,131.16 $4,131.16 $4,093.98
Total Return 10 Years 388.38% 313.12% 313.12% 309.40%
Average Annual Return 17.19% 15.24% 15.24% 15.14%
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund 128.82%
Total Return incl M&E 113.24%
Total Return incl M&E and Cont Fee 110.45%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 $2,132.45 $2,104.51 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,104.51 $2,068.51 $1,990.87
Total Return 5 Years 128.82% 110.45% 106.85% 99.09%
Average Annual Return 18.00% 16.05% 15.65% 14.76%
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 23.48%
Total Return incl M&E 21.75%
Total Return incl M&E and Cont Fee 21.43%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,217.51 $1,214.31 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,214.31 $1,160.31 $1,126.88
Total Return 1 Year 23.48% 21.43% 16.03% 12.69%
Average Annual Return 23.48% 21.43% 16.03% 12.69%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: FOS VIPF OVERSEAS PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 137.09%
Total Return incl M&E 103.23% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 97.45% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
28-Jan-87 $1,000 10.000000 100.00 $2,032.26 $1,974.50 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,974.50 $1,974.50 $1,974.50
Total Return Inception 137.09% 97.45% 97.45% 97.45%
Average Annual Return 8.22% 6.42% 6.42% 6.42%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund 150.57%
Total Return incl M&E 117.62%
Total Return incl M&E and Cont Fee 111.95%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 $2,176.20 $2,119.55 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,119.55 $2,119.55 $2,100.47
Total Return 10 Years 150.57% 111.95% 111.95% 110.05%
Average Annual Return 9.62% 7.80% 7.80% 7.70%
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund 93.54%
Total Return incl M&E 80.37%
Total Return incl M&E and Cont Fee 78.00%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 $1,803.66 $1,780.03 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,780.03 $1,744.03 $1,683.91
Total Return 5 Years 93.54% 78.00% 74.40% 68.39%
Average Annual Return 14.12% 12.22% 11.77% 10.98%
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 11.56%
Total Return incl M&E 10.00%
Total Return incl M&E and Cont Fee 9.71%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,099.98 $1,097.08 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,097.08 $1,043.08 $1,018.09
Total Return 1 Year 11.56% 9.71% 4.31% 1.81%
Average Annual Return 11.56% 9.71% 4.31% 1.81%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: FAM VIPF II ASSET MANAGER PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 171.19%
Total Return incl M&E 141.16% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 135.93% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
06-Sep-89 $1,000 10.000000 100.00 $2,411.62 $2,359.26 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,359.26 $2,359.26 $2,316.79
Total Return Inception 171.19% 135.93% 135.93% 131.68%
Average Annual Return 12.73% 10.86% 10.86% 10.62%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund 84.11%
Total Return incl M&E 71.58%
Total Return incl M&E and Cont Fee 69.33%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 $1,715.78 $1,693.30 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,693.30 $1,657.30 $1,601.86
Total Return 5 Years 84.11% 69.33% 65.73% 60.19%
Average Annual Return 12.98% 11.11% 10.63% 9.88%
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 20.65%
Total Return incl M&E 18.96%
Total Return incl M&E and Cont Fee 18.65%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,189.61 $1,186.48 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,186.48 $1,132.48 $1,101.05
Total Return 1 Year 20.65% 18.65% 13.25% 10.10%
Average Annual Return 20.65% 18.65% 13.25% 10.10%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: FMG VIPF II ASSET MANAGER: GROWTH PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 84.69%
Total Return incl M&E 77.05% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 75.66% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
03-Jan-95 $1,000 10.000000 100.00 $1,770.55 $1,756.62 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,756.62 $1,711.62 $1,630.14
Total Return Inception 84.69% 75.66% 71.16% 63.01%
Average Annual Return 22.74% 20.70% 19.66% 17.73%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 25.07%
Total Return incl M&E 23.32%
Total Return incl M&E and Cont Fee 22.99%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,233.19 $1,229.94 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,229.94 $1,175.94 $1,141.39
Total Return 1 Year 25.07% 22.99% 17.59% 14.14%
Average Annual Return 25.07% 22.99% 17.59% 14.14%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: FCF VIPF II CONTRAFUND PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 110.26%
Total Return incl M&E 101.57% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 99.98% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
03-Jan-95 $1,000 10.000000 100.00 $2,015.68 $1,999.82 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,999.82 $1,954.82 $1,855.83
Total Return Inception 110.26% 99.98% 95.48% 85.58%
Average Annual Return 28.17% 26.04% 25.09% 22.94%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 24.14%
Total Return incl M&E 22.40%
Total Return incl M&E and Cont Fee 22.08%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,224.02 $1,220.80 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,220.80 $1,166.80 $1,132.90
Total Return 1 Year 24.14% 22.08% 16.68% 13.29%
Average Annual Return 24.14% 22.08% 16.68% 13.29%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: FIN VIPF II INDEX 500 PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 163.56%
Total Return incl M&E 144.42% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 140.99% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
27-Aug-92 $1,000 10.000000 100.00 $2,444.18 $2,409.95 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,409.95 $2,391.95 $2,301.50
Total Return Inception 163.56% 140.99% 139.19% 130.15%
Average Annual Return 19.87% 17.88% 17.71% 16.87%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund 147.93%
Total Return incl M&E 131.05%
Total Return incl M&E and Cont Fee 128.03%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 $2,310.54 $2,280.27 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,280.27 $2,244.27 $2,157.13
Total Return 5 Years 147.93% 128.03% 124.43% 115.71%
Average Annual Return 19.91% 17.92% 17.55% 16.62%
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 32.82%
Total Return incl M&E 30.96%
Total Return incl M&E and Cont Fee 30.62%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,309.61 $1,306.16 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,306.16 $1,252.16 $1,212.11
Total Return 1 Year 32.82% 30.62% 25.22% 21.21%
Average Annual Return 32.82% 30.62% 25.22% 21.21%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: VIP III GROWTH OPPORTUNITIES PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 103.68%
Total Return incl M&E 95.26%
Total Return incl M&E and Cont Fee 93.73%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
3-Jan-95 $1,000 10.000000 100.00 $1,952.60 $1,937.26 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,952.60 $1,892.26 $1,797.78
Total Return Inception 103.68% 93.73% 89.23% 79.78%
Average Annual Return 26.81% 24.71% 23.74% 21.64%
-----------------------------------------------------------------------------------------
OVER ONE YEAR:
Total Return of Fund 29.95%
Total Return incl M&E 28.13%
Total Return incl M&E and Cont Fee 27.79%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 1,281.31 1,227.94 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A 1,277.94 1,223.94 1,185.93
Total Return 10 Years 29.95% 27.79% 22.39% 18.59%
Average Annual Return 29.95% 27.79% 22.39% 18.59%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: ASC ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 411.47%
Total Return incl M&E 348.73% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 337.88% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
21-Sep-88 $1,000 10.000000 100.00 $4,487.29 $4,378.77 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $4,378.77 $4,378.77 $4,339.36
Total Return Inception 411.47% 337.88% 337.88% 333.94%
Average Annual Return 19.22% 17.25% 17.25% 17.13%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund 81.41%
Total Return incl M&E 69.06%
Total Return incl M&E and Cont Fee 66.85%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 $1,690.62 $1,668.47 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,668.47 $1,632.47 $1,578.37
Total Return 5 Years 81.41% 66.85% 63.25% 57.84%
Average Annual Return 12.65% 10.78% 10.30% 9.56%
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 11.39%
Total Return incl M&E 9.83%
Total Return incl M&E and Cont Fee 9.54%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,098.31 $1,095.41 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,095.41 $1,041.41 $1,016.54
Total Return 1 Year 11.39% 9.54% 4.14% 1.65%
Average Annual Return 11.39% 9.54% 4.14% 1.65%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: AGR ALGER AMERICAN GROWTH PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 392.34%
Total Return incl M&E 333.79% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 323.63% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
09-Jan-89 $1,000 10.000000 100.00 $4,337.85 $4,236.31 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $4,236.31 $4,236.31 $4,160.05
Total Return Inception 392.34% 323.63% 323.63% 316.01%
Average Annual Return 19.42% 17.44% 17.44% 17.20%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund 141.48%
Total Return incl M&E 125.04%
Total Return incl M&E and Cont Fee 122.09%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 $2,250.43 $2,220.95 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,220.95 $2,184.95 $2,101.02
Total Return 5 Years 141.48% 122.09% 118.49% 110.10%
Average Annual Return 19.28% 17.30% 16.92% 16.01%
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 25.75%
Total Return incl M&E 23.99%
Total Return incl M&E and Cont Fee 23.66%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,239.90 $1,236.63 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,236.63 $1,182.63 $1,147.59
Total Return 1 Year 25.75% 23.66% 18.26% 14.76%
Average Annual Return 25.75% 23.66% 18.26% 14.76%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: AMG ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 153.80%
Total Return incl M&E 137.64% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 134.74% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
03-May-93 $1,000 10.000000 100.00 $2,376.42 $2,347.35 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,347.35 $2,311.35 $2,220.60
Total Return Inception 153.80% 134.74% 131.14% 122.06%
Average Annual Return 22.09% 20.07% 19.67% 18.65%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 15.01%
Total Return incl M&E 13.40%
Total Return incl M&E and Cont Fee 13.10%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,134.00 $1,131.01 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,131.01 $1,077.01 $1,049.58
Total Return 1 Year 15.01% 13.10% 7.70% 4.96%
Average Annual Return 15.01% 13.10% 7.70% 4.96%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: ALA ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 133.72%
Total Return incl M&E 124.25% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 122.52% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
25-Jan-95 $1,000 10.000000 100.00 $2,242.48 $2,225.20 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,225.20 $2,180.20 $2,064.98
Total Return Inception 133.72% 122.52% 118.02% 106.50%
Average Annual Return 33.55% 31.34% 30.42% 28.03%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 19.68%
Total Return incl M&E 18.00%
Total Return incl M&E and Cont Fee 17.69%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,180.04 $1,176.94 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,176.94 $1,122.94 $1,092.20
Total Return 1 Year 19.68% 17.69% 12.29% 9.22%
Average Annual Return 19.68% 17.69% 12.29% 9.22%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: JAG JANUS AGGRESSIVE GROWTH PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 112.92%
Total Return incl M&E 100.52% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 98.29% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
30-Sep-93 $1,000 10.000000 100.00 $2,005.23 $1,982.85 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,982.85 $1,946.85 $1,875.78
Total Return Inception 112.92% 98.29% 94.69% 87.58%
Average Annual Return 19.44% 17.46% 16.95% 15.93%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 12.66%
Total Return incl M&E 11.08%
Total Return incl M&E and Cont Fee 10.79%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,110.83 $1,107.90 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,107.90 $1,053.90 $1,028.13
Total Return 1 Year 12.66% 10.79% 5.39% 2.81%
Average Annual Return 12.66% 10.79% 5.39% 2.81%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: JGP JANUS GROWTH PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 101.30%
Total Return incl M&E 89.58% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 87.46% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
30-Sep-93 $1,000 10.000000 100.00 $1,895.79 $1,874.64 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,874.64 $1,838.64 $1,773.41
Total Return Inception 101.30% 87.46% 83.86% 77.34%
Average Annual Return 17.87% 15.92% 15.39% 14.41%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 22.75%
Total Return incl M&E 21.03%
Total Return incl M&E and Cont Fee 20.71%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,210.32 $1,207.13 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,207.13 $1,153.13 $1,120.21
Total Return 1 Year 22.75% 20.71% 15.31% 12.02%
Average Annual Return 22.75% 20.71% 15.31% 12.02%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: JIG JANUS INTERNATIONAL GROWTH PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 91.09%
Total Return incl M&E 81.45% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 79.70% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-May-94 $1,000 10.000000 100.00 $1,814.51 $1,797.02 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,797.02 $1,752.02 $1,683.81
Total Return Inception 91.09% 79.70% 75.20% 68.38%
Average Annual Return 19.29% 17.31% 16.50% 15.25%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 18.51%
Total Return incl M&E 16.85%
Total Return incl M&E and Cont Fee 16.54%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,168.51 $1,165.43 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,165.43 $1,111.43 $1,081.52
Total Return 1 Year 18.51% 16.54% 11.14% 8.15%
Average Annual Return 18.51% 16.54% 11.14% 8.15%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: JWG JANUS WORLDWIDE GROWTH PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 142.78%
Total Return incl M&E 128.64% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 126.09% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
30-Sep-93 $1,000 10.000000 100.00 $2,286.44 $2,260.93 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,260.93 $2,224.93 $2,138.84
Total Return Inception 142.78% 126.09% 122.49% 113.88%
Average Annual Return 23.18% 21.13% 20.68% 19.56%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 22.15%
Total Return incl M&E 20.44%
Total Return incl M&E and Cont Fee 20.12%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,204.40 $1,201.23 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,201.23 $1,147.23 $1,114.74
Total Return 1 Year 22.15% 20.12% 14.72% 11.47%
Average Annual Return 22.15% 20.12% 14.72% 11.47%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: NLM NEUBERGER BERMAN LIMITED MATURITY BOND PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 184.43%
Total Return incl M&E 135.75% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 127.61% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
10-Sep-84 $1,000 10.000000 100.00 $2,357.47 $2,276.11 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,276.11 $2,276.11 $2,276.11
Total Return Inception 184.43% 127.61% 127.61% 127.61%
Average Annual Return 8.17% 6.37% 6.37% 6.37%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund 98.02%
Total Return incl M&E 71.98%
Total Return incl M&E and Cont Fee 67.50%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 $1,719.80 $1,675.03 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,675.03 $1,675.03 $1,659.96
Total Return 10 Years 98.02% 67.50% 67.50% 66.00%
Average Annual Return 7.07% 5.29% 5.29% 5.20%
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund 31.49%
Total Return incl M&E 22.54%
Total Return incl M&E and Cont Fee 20.93%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 $1,225.40 $1,209.34 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,209.34 $1,173.34 $1,144.04
Total Return 5 Years 31.49% 20.93% 17.33% 14.40%
Average Annual Return 5.63% 3.87% 3.25% 2.73%
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 6.74%
Total Return incl M&E 5.25%
Total Return incl M&E and Cont Fee 4.97%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,052.46 $1,049.68 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,049.68 $995.68 $974.11
Total Return 1 Year 6.74% 4.97% -0.43% -2.59%
Average Annual Return 6.74% 4.97% -0.43% -2.59%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: NPP NEUBERGER BERMAN PARTNERS PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 126.74%
Total Return incl M&E 114.97% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 112.84% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
22-Mar-94 $1,000 10.000000 100.00 $2,149.70 $2,128.37 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,128.37 $2,083.37 $1,994.28
Total Return Inception 126.74% 112.84% 108.34% 99.43%
Average Annual Return 24.18% 22.11% 21.43% 20.03%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 31.25%
Total Return incl M&E 29.41%
Total Return incl M&E and Cont Fee 29.07%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,294.13 $1,290.72 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,290.72 $1,236.72 $1,197.78
Total Return 1 Year 31.25% 29.07% 23.67% 19.78%
Average Annual Return 31.25% 29.07% 23.67% 19.78%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: NGF NORTHSTAR GROWTH + VALUE PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 82.06%
Total Return incl M&E 72.91% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 71.25% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
06-May-94 $1,000 10.000000 100.00 $1,729.10 $1,712.50 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,712.50 $1,667.50 $1,604.61
Total Return Inception 82.06% 71.25% 66.75% 60.46%
Average Annual Return 17.80% 15.84% 15.00% 13.80%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 14.66%
Total Return incl M&E 13.05%
Total Return incl M&E and Cont Fee 12.76%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,130.55 $1,127.57 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,127.57 $1,073.57 $1,046.38
Total Return 1 Year 14.66% 12.76% 7.36% 4.64%
Average Annual Return 14.66% 12.76% 7.36% 4.64%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: NHY NORTHSTAR HIGH YIELD BOND FUND
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 48.15%
Total Return incl M&E 40.70% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 39.35% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
06-May-94 $1,000 10.000000 100.00 $1,407.04 $1,393.53 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,393.53 $1,348.53 $1,305.74
Total Return Inception 48.15% 39.35% 34.85% 30.57%
Average Annual Return 11.35% 9.50% 8.52% 7.57%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 9.00%
Total Return incl M&E 7.47%
Total Return incl M&E and Cont Fee 7.19%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,074.74 $1,071.91 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,071.91 $1,017.91 $994.73
Total Return 1 Year 9.00% 7.19% 1.79% -0.53%
Average Annual Return 9.00% 7.19% 1.79% -0.53%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: NIG NORTHSTAR EMERGING GROWTH FUND
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 62.78%
Total Return incl M&E 54.60% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 53.11% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
06-May-94 $1,000 10.000000 100.00 $1,545.99 $1,531.14 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,531.14 $1,486.14 $1,434.68
Total Return Inception 62.78% 53.11% 48.61% 43.47%
Average Annual Return 14.25% 12.35% 11.44% 10.37%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 15.81%
Total Return incl M&E 14.19%
Total Return incl M&E and Cont Fee 13.89%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,141.89 $1,138.88 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,138.88 $1,084.88 $1,056.88
Total Return 1 Year 15.81% 13.89% 8.49% 5.69%
Average Annual Return 15.81% 13.89% 8.49% 5.69%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: NIV NORTHSTAR INTERNATIONAL VALUE FUND
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 1.30%
Total Return incl M&E 0.73% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 0.63% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
08-Aug-97 $1,000 10.000000 100.00 $1,007.34 $1,006.29 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,006.29 $952.29 $933.83
Total Return Inception 1.30% 0.63% -4.77% -6.62%
Average Annual Return 3.30% 1.59% -11.58% -15.83%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 1 Year #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: NMS NORTHSTAR MULTI-SECTOR BOND PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 39.27%
Total Return incl M&E 32.27% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 31.00% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
06-May-94 $1,000 10.000000 100.00 $1,322.70 $1,310.00 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,310.00 $1,265.00 $1,227.47
Total Return Inception 39.27% 31.00% 26.50% 22.75%
Average Annual Return 9.48% 7.66% 6.64% 5.76%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 6.15%
Total Return incl M&E 4.66%
Total Return incl M&E and Cont Fee 4.39%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,046.64 $1,043.88 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,043.88 $989.88 $968.72
Total Return 1 Year 6.15% 4.39% -1.01% -3.13%
Average Annual Return 6.15% 4.39% -1.01% -3.13%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: OEP OCC EQUITY PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 359.20%
Total Return incl M&E 302.08% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 292.21% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Aug-88 $1,000 10.000000 100.00 $4,020.78 $3,922.09 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $3,922.09 $3,922.09 $3,886.79
Total Return Inception 359.20% 292.21% 292.21% 288.68%
Average Annual Return 17.56% 15.61% 15.61% 15.50%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund 142.85%
Total Return incl M&E 126.32%
Total Return incl M&E and Cont Fee 123.35%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 $2,263.20 $2,233.55 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,233.55 $2,197.55 $2,112.94
Total Return 5 Years 142.85% 123.35% 119.75% 111.29%
Average Annual Return 19.42% 17.44% 17.05% 16.14%
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 26.63%
Total Return incl M&E 24.86%
Total Return incl M&E and Cont Fee 24.53%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,248.57 $1,245.28 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,245.28 $1,191.28 $1,155.62
Total Return 1 Year 26.63% 24.53% 19.13% 15.56%
Average Annual Return 26.63% 24.53% 19.13% 15.56%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: OGE OCC GLOBAL EQUITY PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 55.88%
Total Return incl M&E 49.77% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 48.65% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Mar-95 $1,000 10.000000 100.00 $1,497.65 $1,486.48 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,486.48 $1,441.48 $1,379.46
Total Return Inception 55.88% 48.65% 44.15% 37.95%
Average Annual Return 16.93% 14.99% 13.75% 12.00%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 5 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 14.02%
Total Return incl M&E 12.42%
Total Return incl M&E and Cont Fee 12.13%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,124.24 $1,121.28 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,121.28 $1,067.28 $1,040.54
Total Return 1 Year 14.02% 12.13% 6.73% 4.05%
Average Annual Return 14.02% 12.13% 6.73% 4.05%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: OMP OCC MANAGED PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 471.80%
Total Return incl M&E 400.67% [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 388.38% [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Aug-88 $1,000 10.000000 100.00 $5,006.72 $4,883.83 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $4,883.83 $4,883.83 $4,839.87
Total Return Inception 471.80% 388.38% 388.38% 383.99%
Average Annual Return 20.33% 18.33% 18.33% 18.22%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund 147.55%
Total Return incl M&E 130.70%
Total Return incl M&E and Cont Fee 127.68%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 $2,307.00 $2,276.77 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $2,276.77 $2,240.77 $2,153.83
Total Return 5 Years 147.55% 127.68% 124.08% 115.38%
Average Annual Return 19.88% 17.89% 17.51% 16.58%
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 22.29%
Total Return incl M&E 20.58%
Total Return incl M&E and Cont Fee 20.26%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,205.78 $1,202.60 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,202.60 $1,148.60 $1,116.02
Total Return 1 Year 22.29% 20.26% 14.86% 11.60%
Average Annual Return 22.29% 20.26% 14.86% 11.60%
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FUND: OSC OCC SMALL CAP PORTFOLIO
ASSUMPTIONS:
Contract Fee $30
Avg Contract Fee per $ 0.263%
M&E and Admin Charge 1.40%
SINCE FUND INCEPTION:
Total Return of Fund 287.45%
Total Return incl M&E 239.25% % [(1+TOTAL RETURN)*((1-M&E)^(# days/365))]-1
Total Return incl M&E and Cont Fee 230.93% % [(1+TOTAL RETURN incl M&E)*((1-Cont fee per $)^(# days/365))]-1
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Aug-88 $1,000 10.000000 100.00 $3,392.54 $3,309.27 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $3,309.27 $3,309.27 $3,279.48
Total Return Inception 287.45% 230.93% 230.93% 227.95%
Average Annual Return 15.46% 13.54% 13.54% 13.43%
-----------------------------------------------------------------------------------------
OVER 10 YEARS:
Total Return of Fund #N/A
Total Return incl M&E #N/A
Total Return incl M&E and Cont Fee #N/A
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-88 $1,000 10.000000 100.00 #N/A #N/A 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A #N/A #N/A #N/A
Total Return 10 Years #N/A #N/A #N/A #N/A
Average Annual Return #N/A #N/A #N/A #N/A
-----------------------------------------------------------------------------------------
OVER 5 YEARS:
Total Return of Fund 97.84%
Total Return incl M&E 84.37%
Total Return incl M&E and Cont Fee 81.96%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-93 $1,000 10.000000 100.00 $1,843.74 $1,819.58 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,819.58 $1,783.58 $1,721.32
Total Return 5 Years 97.84% 81.96% 78.36% 72.13%
Average Annual Return 14.62% 12.72% 12.27% 11.47%
-----------------------------------------------------------------------------------------
OVER 1 YEAR:
Total Return of Fund 22.24%
Total Return incl M&E 20.53%
Total Return incl M&E and Cont Fee 20.21%
BEGINNING CONTRACT LESS "AVG" Yearend ENDING
DATE DEPOSIT NQ UV # UNITS VALUE CONT FEE Units DATE
01-Jan-97 $1,000 10.000000 100.00 $1,205.29 $1,202.11 100.00 31-Dec-97
---------------------------------
Less Surrender Charge
-----------------------------------------------------------------------------------------
Fund Contract Value T.S. F.S.
Ending Value #N/A $1,202.11 $1,148.11 $1,115.56
Total Return 1 Year 22.24% 20.21% 14.81% 11.56%
Average Annual Return 22.24% 20.21% 14.81% 11.56%
-----------------------------------------------------------------------------------------
</TABLE>
NORTHERN LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of NORTHERN LIFE INSURANCE COMPANY, a
Washington corporation, does hereby make, constitute and appoint RICHARD R.
CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, JAMES E. NELSON, ROBERT B. SAGINAW,
KRISTEN K. LINDBERG, JERFFREY A. PROULX AND DEBORAH A. LJUNGKULL, and each or
any one of them, the undersigned's true and lawful attorneys-in-fact, with full
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration Statements,
under the Securities Act of 1933 (1933 Act) and the Investment Company Act of
1940 (1940 Act) and any other forms applicable to such registrations, and all
amendments, including post-effective amendments, thereto, to be filed by said
Company with the Securities and Exchange Commission, Washington, DC, in
connection with the registration under the 1933 and 1940 Acts, as amended, of
variable annuity contracts and accumulation units in Separate Account One and to
file the same, with all exhibits thereto and other supporting documents, with
said Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or incidental
to the performance and execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this
5th day of October, 1988.
/s/ Susan W.A. Mead
-------------------
Susan W.A. Mead
