<PAGE>
[CONNECTICUT MUTUAL LOGO]
THE BLUE CHIP COMPANY'S -Registered
Trademark-
VARIABLE UNIVERSAL LIFE
SEMI-ANNUAL REPORTS
JUNE 30, 1995
[LOGO] CONNECTICUT
MUTUAL
The Blue Chip Company-Registered Trademark-
<PAGE>
CONNECTICUT MUTUAL VARIABLE LIFE SEPARATE ACCOUNT I
OF CONNECTICUT MUTUAL LIFE INSURANCE COMPANY
1995 SEMI-ANNUAL REPORT
DEAR VUL CONTRACT HOLDER:
U.S. Investors greeted 1995 with caution. They'd just been through a
difficult 1994, with a rocky stock market and bond market that had recorded
its worst decline in decades.
But, as is often the case when the prevailing mood is bearish, the stock and
bond markets rallied in the first quarter, fueled by the expectation that the
economy is headed in the right direction for continued growth without
touching off inflation.
This optimistic belief came from a number of factors -- slower retail
sales, drop-offs in auto sales and production, benign inflation and the Fed's
seventh money tightening move in the previous 12 months.
The stock market interpreted these indicators as positive for corporate
earnings. At the same time, bond investors decided that the interest rate
hikes of 1994 had overstated the risks of inflation. The economy, it was
felt, was heading for a ""soft landing'' before taking off again.
Although it is too early to share with you the performance results of this
new product, our VUL portfolios were well positioned for the turn of events.
As a result, the portfolios provided handsome returns as the bond and stock
markets rallied.
While these results show a marked improvement from last year's returns and
the outlook remains good, the economy is still unsettled.
Although some investors have engaged in profit-taking during these heady
times, our advice remains the same -- Short-term moves are unpredictable,
a long-term stance generally produces the greatest results for investors
seeking long-term growth of capital. If fact, over the long-term the markets
have continued to produce positive results.
We, too, plan to stay the course with our consistently applied, value
oriented investment strategy that has produced solid results during both bull
and bear financial markets. While there are no guarantees, we are confident
that this approach will continue to reward patient investors over time.
ECONOMIC FORECAST: THIRD AND FOURTH QUARTERS 1995
All the right elements were in place to produce the strong showings of stocks
and bonds in the first half of 1995. The economy slowed, interest rates
ceased their upward climb, inflation stalled and corporate earnings
were strong.
It appears that the Fed may have succeeded in engineering a soft landing for
the economy with moderate economic growth and low inflation. Although this
seems to be an ideal situation for investors, there are no guarantees that an
economic slowdown will not follow.
On average, stocks are somewhat overvalued by historical standards, dividend
ratios are low and price/earnings ratios are high. These indicators would
suggest caution in the short-term.
Despite this cautionary note, we are optimistic that moderate economic growth
will continue, fueling strong demand for stocks and bonds. Inflation is
expected to hover around 3 percent, dropping even lower if the economy slows
further.
A slowing of the economy could prompt the Fed to lower interest rates even
further, spurring a continuation of the bond market rally in the second half
of 1995.
SUMMARY
Both the stock and bond markets have picked up a good head of steam that we
expect to continue for the foreseeable future. But amid good news always
lurks the chance for a negative surprise.
We believe that by sticking to a long-term investment discipline[|nb|][cad 228]
rather than chasing the latest investment fad -- you are more likely to
achieve favorable returns over the long-term.
As a VUL contractholder, you know that your cash values are in a quality fund
with a solid track record. You can feel confident that our investment
professionals continue to pursue a conservative management philosophy
designed to provide you with highly competitive returns, as well as peace of
mind.
David E. Sams, Jr.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY
T H E V U L A C C O U N T S
GOVERNMENT SECURITIES PORTFOLIO
The Government Securities Portfolio of the CML Fund seeks to provide a high
level of current income with a high degree of safety of principal by
investing primarily in securities that are issued or guaranteed as to
principal and interest by the U.S. government, its agencies, authorities or
instrumentalities and by obligations that are fully collateralized or
otherwise fully backed by U.S. Government Securities.*
INCOME PORTFOLIO
The Income Portfolio of the CML Fund seeks to obtain a maximum level of
income consistent with prudent investment risk and preservation of capital by
investing primarily in fixed-income debt securities anticipated to have an
average maturity of eight to twelve years from the date of purchase.
TOTAL RETURN PORTFOLIO
The Total Return Portfolio of the CML Fund seeks to maximize over time the
return achieved from capital appreciation and income by varying the
allocation of the assets of the Portfolio among stocks, corporate bonds,
securities issued by the U.S. Government and its instrumentalities, and money
market instruments of the type acquired respectively by the Growth Portfolio,
the Income Portfolio, and the Money Market Portfolio.
GROWTH PORTFOLIO
The Growth Portfolio of the CML Fund seeks to achieve long-term growth of
capital by investing primarily in common stocks with low price-earnings
ratios and better than anticipated earnings.
MONEY MARKET PORTFOLIO
The Money Market Portfolio of the Fidelity VIPF Fund seeks to invest in a
diversified portfolio of high-quality, short-term debt instruments with the
objective of obtaining maximum current income consistent with the
preservation of capital and liquidity.**
HIGH INCOME PORTFOLIO
The High Income Portfolio of the Fidelity VIPF Fund seeks to obtain a high
level of current income by investing primarily in high-yielding, lower-rated
fixed income securities (commonly referred to as ""junk bonds''), while also
considering growth of capital. These securities are often considered to be
speculative and involve greater risk of default or price changes than
securities assigned a high quality rating. For more information about these
lower-rated securities, see ""Risks of Lower-Rated Debt Securities'' in the
Fidelity VIPF Fund prospectus.***
OVERSEAS PORTFOLIO
The Overseas Portfolio of Fidelity VIPF Fund seeks long-term growth of
capital primarily through investments in foreign securities and provides a
means for aggressive investors with a higher risk tolerance to diversify
their own portfolios by investing in companies and economies outside of the
United States.****
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ONLY FOUR OF THE PORTFOLIOS OF CONNECTICUT MUTUAL FINANCIAL SERVICES
SERIES FUND I, INC. (THE GOVERNMENT SECURITIES PORTFOLIO, THE INCOME
PORTFOLIO, THE TOTAL RETURN PORTFOLIO AND THE GROWTH PORTFOLIO) ARE
AVAILABLE UNDER THE VARIABLE UNIVERSAL LIFE CONTRACT.
THIS MATERIAL IS INTENDED FOR USE ONLY WHEN ACCOMPANIED OR PRECEDED BY A
PROSPECTUS.
* THE GOVERNMENT BACKING APPLIES ONLY TO THE TIMELY PAYMENT OF PRINCIPAL
AND INTEREST AND DOES NOT APPLY TO THE SHARES OF THE FUND.
**AN INVESTMENT IN THE MONEY MARKET PORTFOLIO IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE
MONEY MARKET PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE
OF $1.00 PER SHARE.
***THESE FUNDS INVEST IN LOWER RATED SECURITIES THAT INVOLVE SPECIAL
ADDITIONAL RISKS DUE TO THE LOWER CREDIT QUALITY OF THE SECURITIES
PORTFOLIO. YOU SHOULD BE AWARE OF THE POSSIBLE HIGHER LEVEL OF
VOLATILITY AND INCREASED RISK OF DEFAULT INVOLVED IN THESE FUNDS.
****THERE ARE SPECIAL RISKS ASSOCIATED WITH INTERNATIONAL INVESTING SUCH
AS POLITICAL CHANGES AND CURRENCY FLUCTUATIONS.
<PAGE>
STATEMENT OF NET ASSETS CONNECTICUT MUTUAL VARIABLE LIFE SEPARATE
ACCOUNT I OF
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments, at market:
Connecticut Mutual Financial Services
Series Fund I, Inc.
Government Securities Portfolio
16,449 shares (Cost $17,111) $ 17,423
Income Portfolio
29,142 shares (Cost $35,143) 35,877
Total Return Portfolio
241,362 shares (Cost $395,794) 414,635
Growth Portfolio
244,301 shares (Cost $538,302) 571,399
----------
1,039,334
----------
Fidelity Variable Insurance Products Fund
Money Market Portfolio
107,629 shares (Cost $107,629) 107,629
High Income Portfolio
2,740 shares (Cost $30,021) 30,657
Overseas Portfolio
5,409 shares (Cost $84,802) 87,568
----------
225,854
----------
Due from Affiliates 5,706
----------
NET ASSETS (variable universal life policyholder
liabilities) $1,270,894
----------
----------
</TABLE>
<TABLE>
<CAPTION>
VARIABLE UNIVERSAL LIFE POLICYHOLDER LIABILITIES
At June 30, 1995 the variable universal life policyholder UNITS OWNED BY VARIABLE UNIVERSAL LIFE
liabilities of the Account consisted of the following: POLICYHOLDERS UNIT VALUE POLICYHOLDER LIABILITIES
<S> <C> <C> <C>
CONNECTICUT MUTUAL FINANCIAL SERVICES SERIES FUND I, INC.
Government Securities Sub-Account 15,664 1.111403 $ 17,409
Income Sub-Account 32,563 1.101031 35,853
Total Return Sub-Account 362,201 1.135958 411,445
Growth Sub-Account 498,078 1.194903 595,155
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
Money Market Sub-Account 91,740 0.996638 91,431
High Income Sub-Account 28,142 1.124475 31,645
Overseas Sub-Account 84,842 1.036701 87,956
-----------
$ 1,270,894
-----------
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 1
<PAGE>
STATEMENT OF OPERATIONS CONNECTICUT MUTUAL VARIABLE LIFE SEPARATE
ACCOUNT I OF
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY
For the six months ended June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
S U B - A C C O U N T S
CONNECTICUT MUTUAL FINANCIAL SERVICES SERIES FUND I, INC.
GOVERNMENT
SECURITIES INCOME TOTAL RETURN GROWTH
<S> <C> <C> <C> <C>
INVESTMENT INCOME (LOSS)
Income:
Dividends $ -- $ -- $ -- $ --
Expenses:
Mortality and Expense Risk Fees 38 57 290 1,335
----- ------ ------------ --------
NET INVESTMENT INCOME (LOSS) (38) (57) (290) (1,335)
----- ------ ------------ --------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net Realized Gain from Fund Share Transactions 506 442 89 2,055
Unrealized Appreciation 312 733 18,841 33,097
----- ------ ------------ --------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 818 1,175 18,930 35,152
----- ------ ------------ --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 780 $1,118 $ 18,640 $33,817
----- ------ ------------ --------
----- ------ ------------ --------
</TABLE>
2 The accompanying notes are an integral part of these financial statements.
<PAGE>
S U B - A C C O U N T S
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
MONEY HIGH
MARKET INCOME OVERSEAS
$1,172 $ 484 $ 42
304 81 214
------ ------ --------
868 403 (172)
------ ------ --------
-- 32 94
-- 636 2,766
------ ------ --------
-- 668 2,860
------ ------ --------
$ 868 $1,071 $ 2,688
------ ------ --------
------ ------ --------
The accompanying notes are an integral part of these financial statements. 3
<PAGE>
STATEMENTS OF CHANGES IN NET CONNECTICUT MUTUAL VARIABLE LIFE SEPARATE
ASSETS ACCOUNT I OF
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY
For the six months ended June 30, 1995
(Unaudited)
and for the year ended December 31, 1994
<TABLE>
<CAPTION>
S U B - A C C O U N T S
CONNECTICUT MUTUAL FINANCIAL SERVICES SERIES FUND I, INC.
GOVERNMENT TOTAL
SECURITIES INCOME RETURN GROWTH
1995 1994 1995 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net Investment Income (Loss) $ (38) $ 16 $ (57) $ 21 $ (290) $ 699 $ (1,335) $ 2,598
Net Realized Gain from Fund Share Transactions 506 -- 442 -- 89 -- 2,055 --
Unrealized Appreciation (Depreciation) 312 (14) 733 (22) 18,841 (613) 33,097 (2,335)
-------- ----- -------- ----- --------- -------- --------- --------
Net Increase (Decrease) in Net Assets
Resulting from Operations 780 2 1,118 (1) 18,640 86 33,817 263
-------- ----- -------- ----- --------- -------- --------- --------
FROM UNIT TRANSACTIONS:
Purchases by Policyholders 17,654 290 28,243 311 266,469 11,338 512,733 31,325
Withdrawals by Policyholders (2,389) (8) (3,271) (14) (39,636) (177) (60,194) (588)
Net Transfers from (to) other Sub-Accounts 1,080 -- 9,467 -- 154,343 382 43,266 34,533
-------- ----- -------- ----- --------- -------- --------- --------
Increase in Net Assets from Unit Transactions 16,345 282 34,439 297 381,176 11,543 495,805 65,270
-------- ----- -------- ----- --------- -------- --------- --------
INCREASE IN NET ASSETS 17,125 284 35,557 296 399,816 11,629 529,622 65,533
-------- ----- -------- ----- --------- -------- --------- --------
NET ASSETS
Beginning of Period 284 -- 296 -- 11,629 -- 65,533 --
-------- ----- -------- ----- --------- -------- --------- --------
End of Period $17,409 $284 $35,853 $296 $411,445 $11,629 $595,155 $65,533
-------- ----- -------- ----- --------- -------- --------- --------
-------- ----- -------- ----- --------- -------- --------- --------
</TABLE>
4 The accompanying notes are an integral part of these financial statements.
<PAGE>
S U B - A C C O U N T S
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
MONEY HIGH
MARKET INCOME OVERSEAS
1995 1994 1995 1994 1995 1994
$ 868 $ 55 $ 403 $ (3) $ (172) $ --
-- -- 32 -- 94 --
-- -- 636 57 2,766 11
---------- --------- -------- ------- -------- -------
868 55 1,071 54 2,688 11
---------- --------- -------- ------- -------- -------
333,969 45,173 24,576 5,627 78,757 575
(28,505) (8,952) (3,307) (82) (8,659) (56)
(215,457) (35,720) 3,706 -- 13,835 805
---------- --------- -------- ------- -------- -------
90,007 501 24,975 5,545 83,933 1,324
---------- --------- -------- ------- -------- -------
90,875 556 26,046 5,599 86,621 1,335
---------- --------- -------- ------- -------- -------
556 -- 5,599 -- 1,335 --
---------- --------- -------- ------- -------- -------
$ 91,431 $ 556 $31,645 $5,599 $87,956 $1,335
---------- --------- -------- ------- -------- -------
---------- --------- -------- ------- -------- -------
The accompanying notes are an integral part of these financial statements. 5
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONNECTICUT MUTUAL VARIABLE LIFE SEPARATE
ACCOUNT I OF
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY
June 30, 1995 (Unaudited)
1. ORGANIZATION
Connecticut Mutual Variable Life Separate Account I (the Account) is a
separate account within Connecticut Mutual Life Insurance Company (Connecticut
Mutual). Although the Account is an integral part of Connecticut Mutual, it is
registered as a unit investment trust under the Investment Company Act of
1940, as amended (the 1940 Act). The assets attributable to policies
participating in the Account are held for the benefit of the participants and
are not chargeable with liabilities arising out of any other business that
Connecticut Mutual may conduct.
The Account currently offers seven sub-accounts. Each sub-account invests
exclusively in a corresponding investment portfolio of Connecticut Mutual
Financial Services Series Fund I, Inc. (Series Fund) managed by G.R. Phelps &
Co., Inc., a wholly-owned subsidiary of Connecticut Mutual, or of the Variable
Insurance Products Fund (VIPF) managed by Fidelity Management & Research
Company. Series Fund and VIPF are open-end diversified series management
investment companies registered under the 1940 Act.
In addition to the Account, a policyholder may allocate funds to a fixed
interest account which is part of Connecticut Mutual's general account. The
fixed interest account has not been registered under the Securities Act of
1933 and Connecticut Mutual's general account has not been registered as an
investment company under the 1940 Act. Accordingly, the assets attributable to
policies in the fixed interest account are chargeable with liabilities arising
out of business that Connecticut Mutual may conduct and are not reflected in
the accompanying financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
(a)INVESTMENTS - Transactions in Series Fund and VIPF are recorded on the
trade date. Investments in each fund are valued at their closing net asset
value per share on June 30, 1995. The cost of shares sold is determined on
the basis of identified cost.
(b)FEDERAL INCOME TAXES - The operations of the Account form a part of the
total operations of Connecticut Mutual and are not taxed separately.
Connecticut Mutual is taxed as a life insurance company under Subchapter L
of the Internal Revenue Code of 1986, as amended. The Account will not be
taxed as a regulated investment company under Subchapter M of the Internal
Revenue Code. Accordingly, no provision for income taxes has been required
in the accompanying financial statements.
(c)Certain reclassifications have been made to prior year amounts to conform
with current year presentation.
3. CONTRACT CHARGES
A monthly charge is deducted from the policy value to compensate Connecticut
Mutual for the cost of insurance which is the anticipated cost of providing
death proceeds to beneficiaries of those insureds who die prior to the
maturity date. Because the cost of insurance depends on a number of variables,
it can vary from month to month.
A monthly charge of $5 is deducted from the policy value to compensate
Connecticut Mutual for actual expenses incurred in the administration and
underwriting of the policy. During the first ten policy years, Connecticut
Mutual assesses an additional daily charge of .00068% (.25% on an annual
basis) of the value of the Account's assets for costs involved with the
administration of the Account.
For assuming mortality and expense risks, Connecticut Mutual makes a daily
charge equal to .0024% (.90% on an annual basis) of the value of the Account's
assets. This charge may be increased or decreased by the Board of Directors of
Connecticut Mutual once each year, subject to compliance with applicable state
and federal requirements, but it may not exceed 1.275% on an annual basis. The
mortality risk is that insureds may live for a shorter time than anticipated,
and Connecticut Mutual will therefore pay an aggregate amount of death
proceeds which are greater than anticipated. The expense risk is that expenses
incurred in issuing and administering the policies will exceed the amounts
realized from the administrative charges discussed above.
6
<PAGE>
CONNECTICUT MUTUAL
LIFE INSURANCE COMPANY
--------------------------------------
BOARD OF DIRECTORS AND OFFICERS
JAMES R. BIRLE, Director
President
Resolute Partners, Incorporated
ANDREW F. BRIMMER, PH.D., Director
President
Brimmer & Company, Inc.
FRANK C. CARLUCCI, III, Director
Chairman
The Carlyle Group
GENE CHAO, PH.D., Director
Chairman and Chief Executive Officer
Computer Projections, Inc.
PATRICIA D. DENNIS, Director
Special Counsel
Sullivan & Cromwell
WILLIAM B. ELLIS, PH.D., Director
Retired Chairman
Northeast Utilities
GRACE J. FIPPINGER, Director
Retired Vice President, Secretary and
Treasurer
NYNEX Corporation
ROBERT M. FUREK, Director
President and Chief Executive Officer
Heublein, Inc.
HOWARD GOLDFEDER, Director
Retired Chairman and Chief Executive
Officer
Federated Department Stores, Inc.
GEORGE B. HARVEY, Director
Chairman, President and Chief Executive
Officer
Pitney Bowes, Inc.
DAVID E. SAMS, JR., Director
President and Chief Executive Officer
Connecticut Mutual Life Insurance Company
SCOTT C. PETERS
Vice President and Treasurer
ANNE MELISSA DOWLING
Chief Product and Investment Officer
ANN F. LOMELI
Corporate Secretary and Counsel
J. BRINKE MARCUCCILLI
Senior Vice President and
Chief Financial Officer
KATHERINE MCG. SULLIVAN
Senior Vice President and
General Counsel
DAVID J. BEED
Senior Vice President
JOHN D. LOEWENBERG
Director and Executive Vice President
JOHN F. MAYPOLE, Director
Managing Partner
Peach Tree Real Estate Holding Company
This report is prepared for the general information of contract owners and is
not an offer of contracts of The Blue Chip Company's Variable Universal Life. It
should not be used in connection with any offer except in conjunction with the
Prospectus which contains all pertinent information including the applicable
sales charges.
<PAGE>
CONNECTICUT MUTUAL FINANCIAL SERVICES
SERIES FUND I, INC.
-------------------------------------------
BOARD OF DIRECTORS AND OFFICERS
DIRECTORS
RICHARD H. AYERS
Chairman and Chief Executive Officer
The Stanley Works
DAVID E. A. CARSON
President, Chairman and
Chief Executive Officer
People's Bank
RICHARD W. GREENE
Executive Vice President and Treasurer
University of Rochester
BEVERLY L. HAMILTON
President
ARCO Investment Management Company
DAVID E. SAMS, JR.
President and Chief Executive Officer
Connecticut Mutual Life Insurance Company
OFFICERS
LINDA M. NAPOLI, Treasurer and Controller
Treasurer, Mutual Funds
Connecticut Mutual Life Insurance Company
LOUIS A. LACCAVOLE, CPA, General Auditor
Vice President and General Auditor
Connecticut Mutual Life Insurance Company
ANN F. LOMELI, Secretary
Corporate Secretary and Counsel
Connecticut Mutual Life Insurance Company
AUDITORS
ARTHUR ANDERSEN LLP
Hartford, CT
This report is prepared for the general information of contract owners and is
not an offer of contracts of The Blue Chip Company's Variable Universal Life. It
should not be used in connection with any offer except in conjunction with the
Prospectus which contains all pertinent information including the applicable
sales charges.
<PAGE>
CONNECTICUT MUTUAL FINANCIAL SERVICES
SERIES FUND I, INC.
[LOGO]
S E M I - A N N U A L
R E P O R T
----------
JUNE 30, 1995
Money Market Portfolio
Government Securities Portfolio
Income Portfolio
Total Return Portfolio
Growth Portfolio
International Equity Portfolio
ONLY FOUR OF THE PORTFOLIOS OF CONNECTICUT MUTUAL FINANCIAL SERVICES SERIES FUND
I, INC. (THE GOVERNMENT SECURITIES PORTFOLIO, THE INCOME PORTFOLIO, THE TOTAL
RETURN PORTFOLIO, AND THE GROWTH PORTFOLIO) ARE AVAILABLE UNDER THE CONNECTICUT
MUTUAL VARIABLE LIFE SEPARATE ACCOUNT I.
<PAGE>
- -----------------------------------------------------------------
THIS DOCUMENT CONTAINS THE JUNE 30, 1995 SEMI-ANNUAL REPORTS
FOR THE CONNECTICUT MUTUAL FINANCIAL SERVICES SERIES FUND I, INC.
AND THE CONNECTICUT MUTUAL VARIABLE LIFE SEPARATE ACCOUNT I
OF CONNECTICUT MUTUAL LIFE INSURANCE COMPANY.
- ------------------------------------------------------------------
Effective August 1, 1995, the National Distributor for The Blue Chip
Company's Variable Universal Life will be Connecticut Mutual Financial
Services, LLC; an affiliate of Connecticut Mutual Life Insurance Company.
National Distributor
G.R. Phelps & Co., Inc.
a subsidiary of
[LOGO] CONNECTICUT
MUTUAL
The Blue Chip Company-Registered
Trademark-
L2926.1 -c-MCMXCV Connecticut Mutual Life Insurance Company
140 Garden Street, Hartford, CT 06154 (203)987-6500
