SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM
N-8B-2
PRE-EFECTIVE AMENDMENT
Registration Statement
No. 1
C. M.LIFE VARIABLE LIFE SEPARATE ACCOUNT I
(Exact Name of Registrant)
C.M. LIFE INSURANCE COMPANY
140 Garden Street
Hartford, CT 06154
(Address of Principal Executive Office)
ANN LOMELI, SECRETARY
140 Garden Street
Hartford, CT 06154
(Name and Address of Agent for Service of Process)
It is proposed that this filing will become effective:
___on_______pursuant to paragraph (a) of Rule 486.
___60 days after filing pursuant to paragraph (a) of Rule 486.
___immediately after filing pursuant to paragraph (b) of Rule 486.
___on_______pursuant to paragraph (b) of Rule 486.
FLEXIBLE PREMIUM VARIABLE LIFE
Pursuant to Reg. Section 270.24f-2 of the Investment Company Act of 1940 as
amended, Registrant hereby declares that an indefinite amount of its
securities is being registered under the Securities Act of 1933. The $500
filing fee required by said rule has been previously submitted on April 10,
1995.
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Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall become effective in accordance with section 8(a) of the Securities Act
of 1933 or until this Registration Statement shall become effective on such
date as the Commission, acting pursuant to said section 8(a), may determine.
<PAGE>
RECONCILIATION AND TIE BETWEEN ITEMS
IN FORM N-8b-2 AND THE PROSPECTUS
Item No. of
FORM N-8B-2 CAPTION IN PROSPECTUS
1 Cover Page
2 Cover Page
3 Not Applicable
4 Distribution
5 C.M. Life, The Separate Account
6 The Separate Account
7 Not Applicable
8 Not Applicable
9 Legal Proceedings
10 Summary; Description of C. M. Life, the Separate Account, the
C.M. Fund, the VIP Funds; The Policy; Policy Termination and
Reinstatement; Other Policy Provisions
11 Summary; the C.M. Fund; the VIP Funds; Investment Objectives and
Policies
12 Summary; the C.M. Fund; the VIP Funds
13 Summary; the C.M. Fund; the VIP Fimds; Investment Advisory
Services to the C.M. Fund Investment Advisory Services to the
VIP Funds; Charges Deductions
14 Summary; Application for a Policy
15 Summary; Application for a Policy; Premium Payments; Allocation
of Net Premiums
16 The Separate Account; The C.M. Fund; VIP Funds Portfolio;
Premium Charge; Allocation of Net Premiums
17 Summary; Surrender; Partial Withdrawal; Charges and Deductions;
Reduction in Charges, Policy Termination and Reinstatement
18 The Separate Account; The C.M. Fund; the VIP Funds; Premium
Payments
19 Reports; Voting Rights
20 Not Applicable
21 Summary; Policy Loans; Other Policy Provisions
22 Other Policy Provisions
23 Not Required
24 Other Policy Provisions
25 C.M. Life, Connecticut Mutual Life Insurance Co.
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Item No. of
FORM N-8B-2 CAPTION IN PROSPECTUS
26 Not Applicable
27 C.M. Life
28 Directors and Principal Officers of C.M. Life
29 C.M. Life
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Distribution
36 Not Applicable
37 Not Applicable
38 Summary; Distribution
39 Summary; Distribution
40 Not Applicable
41 C.M. Life; Distribution
42 Not Applicable
43 Not Applicable
44 Premium Payments; Policy Value and Surrender Value
45 Not Applicable
46 Policy Value and Surrender Value; Federal Tax Considerations
47 C.M. Life
48 Not Applicable
49 Not Applicable
50 The Separate Account
51 Cover Page; Summary; Charges and Deductions; The Policy; Policy
Termination and Reinstatement; Other Policy Provisions
52 Addition, Deletion or Substitution of Investments
53 Federal Tax Considerations
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Not Applicable
<PAGE>
C.M. LIFE VARIABLE LIFE SEPARATE ACCOUNT I
EXECUTIVE BENEFITS VARIABLE UNIVERSAL LIFE POLICY ISSUED BY
C.M. LIFE INSURANCE COMPANY
140 Garden St., Hartford, Connecticut 06154
1-203-987-6500
This prospectus describes the Executive Benefits Variable Universal Life
Policy, which is an individual flexible premium variable life insurance policy
(the "Policy") offered by C.M. Life Insurance Company ("C.M. Life"). The
Policy is designed for use in funding corporate obligations, for example non-
qualified employee fringe benefit plans, through the Death Benefit, Surrender
Value and Loan Value available under the Policy. Generally, the Policyowner
will be a corporation, partnership, trust, or other employer. In those cases,
individual Insureds will have a specific insurable relationship with the
Policyowner. In certain instances, the Policyowner may be an individual.
The Policy offers the flexibility to vary the frequency and amount of premium
payments, subject to certain restrictions and conditions described in more
detail in this prospectus. You may also choose between two Death Benefit
Options and between two tests to determine if the Policy qualifies as "life
insurance" under the Federal tax laws. Subject to certain limitations, you
may withdraw a portion of the Policy Value, or the Policy may be fully
surrendered at any time. No surrender charges apply if a Policy is
surrendered. If the Policy is in effect on the Maturity Date, the Proceeds
are payable to the Policyowner. If it is in effect upon the death of the
Insured prior to the Maturity Date, the Proceeds will be payable to the
Beneficiary. The Proceeds may be payable in a lump sum, or a settlement
option may be selected. The Policy Value will vary with the investment
experience of allocations to the Sub-Accounts, the fixed rates of interest
earned by allocations to the Fixed Account, and the charges imposed under the
terms of the Policy.
The Policy currently allows a Policyowner to allocate Policy Value and Net
Premiums among eleven investment choices and a Fixed Account. Allocations to
the Fixed Account will earn interest at a rate determined by C.M. Life and
guaranteed to be no less than 4% annually. Allocations may also be made among
the eleven sub-accounts ("Sub-Accounts") of C.M. Life Variable Life Separate
Account I (the "Separate Account"). The Sub-Accounts are described in detail
in the Separate Account section of this prospectus. The corresponding
investment portfolios in which each Sub-Account invests, as well as a
discussion of investment objectives and charges of each portfolio, are
described in the accompanying prospectuses for Connecticut Mutual Financial
Services Series Fund I, Inc. ("C.M. Fund"), Variable Insurance Products Fund
("VIP Fund") or Variable Insurance Products Fund II ("VIP Fund II"). (The C.
M. Fund and VIP Funds are sometimes collectively referred to as the "Funds,"
while VIP Fund and VIP Fund II are sometimes referred to as the "VIP Funds.")
This prospectus should be reviewed carefully before making any decisions
concerning the Policy or making allocations among the Sub-Accounts.
IT MAY NOT BE ADVANTAGEOUS TO PURCHASE FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE AS A REPLACEMENT FOR YOUR CURRENT LIFE INSURANCE OR IF YOU ALREADY
OWN A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY CURRENT PROSPECTUSES OF THE
CONNECTICUT MUTUAL FINANCIAL SERVICES SERIES FUND I, INC., VARIABLE INSURANCE
PRODUCTS FUND, AND VARIABLE INSURANCE PRODUCTS FUND II. INVESTORS SHOULD
RETAIN A COPY OF EACH OF THESE PROSPECTUSES FOR FUTURE REFERENCE.
THE POLICY DESCRIBED IN THIS PROSPECTUS IS NOT A DEPOSIT OR AN OBLIGATION OF,
OR GUARANTEED OR ENDORSED BY, ANY BANK, AND IS NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this prospectus is August 11, 1995
<PAGE>
TABLE OF CONTENTS
SPECIAL TERMS
SUMMARY
DESCRIPTION OF C. M. LIFE, CONNECTICUT MUTUAL LIFE INSURANCE COMPANY, THE
SEPARATE ACCOUNT, C.M. FUND AND VIP FUNDS
C.M. LIFE
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY ("CML")
THE SEPARATE ACCOUNT
THE C.M. FUND
VIP FUND AND VIP FUND II
INVESTMENT OBJECTIVES AND POLICIES
INVESTMENT ADVISORY SERVICES TO THE C.M. FUND
INVESTMENT ADVISORY SERVICES TO THE VIP FUNDS
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
VOTING RIGHTS
PERFORMANCE INFORMATION
THE POLICY
APPLICATION FOR A POLICY
FREE LOOK PERIOD
CONVERSION PRIVILEGES
PREMIUM PAYMENTS
ALLOCATION OF NET PREMIUMS
TRANSFER PRIVILEGE
ACCOUNT REBALANCING
PROCEEDS PAYABLE ON DEATH OF THE INSURED
DEATH BENEFIT OPTIONS
CHANGE IN DEATH BENEFIT OPTION
DEFINITION OF LIFE INSURANCE TEST
CHANGE IN SPECIFIED AMOUNT
POLICY VALUE AND SURRENDER VALUE
PAYMENT OPTIONS
OPTIONAL INSURANCE BENEFITS
SURRENDER
PARTIAL WITHDRAWAL
CHARGES AND DEDUCTIONS
TAX EXPENSE CHARGE
PREMIUM CHARGE
MONTHLY DEDUCTION FROM POLICY VALUE
CHARGES AGAINST ASSETS OF THE SEPARATE ACCOUNT
SURRENDER CHARGE
CHARGES ON PARTIAL WITHDRAWAL
TRANSFER CHARGES
CHARGE FOR INCREASE IN SPECIFIED AMOUNT
OTHER ADMINISTRATIVE CHARGES
REDUCTION OF CHARGES
POLICY LOANS
LOAN INTEREST CHARGED
PREFERRED LOAN PROVISION
REPAYMENT OF POLICY DEBT
EFFECT OF POLICY LOANS
POLICY TERMINATION AND REINSTATEMENT
TERMINATION
REINSTATEMENT
OTHER POLICY PROVISIONS
POLICYOWNER
BENEFICIARY
INCONTESTABILITY
SUICIDE
AGE
ASSIGNMENT
POSTPONEMENT OF PAYMENTS
DIRECTORS AND PRINCIPAL OFFICERS OF C.M. LIFE
DISTRIBUTION
REPORTS
LEGAL PROCEEDINGS
FURTHER INFORMATION
INDEPENDENT ACCOUNTANTS
FEDERAL TAX CONSIDERATIONS
C.M. LIFE AND THE SEPARATE ACCOUNT
TAXATION OF THE POLICIES
CONVENTIONAL LIFE INSURANCE POLICIES
MODIFIED ENDOWMENT CONTRACTS
REASONABLENESS REQUIREMENTS FOR CHARGES
OTHER
MORE INFORMATION ABOUT THE FIXED ACCOUNT
GENERAL DESCRIPTION
FIXED ACCOUNT VALUE
THE POLICY
ERISA COMPLIANCE
FINANCIAL STATEMENTS
APPENDIX A - OPTIONAL BENEFITS
APPENDIX B - PAYMENT OPTIONS
APPENDIX C - ILLUSTRATIONS OF DEATH BENEFIT, POLICY VALUES AND
ACCUMULATED PREMIUMS
<PAGE>
SPECIAL TERMS
ACCUMULATION UNIT: A measure of your interest in a Sub-Account.
AGE: The Insured's age as of his or her nearest birthday.
BENEFICIARY: The person(s) or entity(ies) designated to receive the Proceeds
upon the death of the Insured.
COMPANY: C.M. Life Insurance Company, a stock life insurance company
incorporated under the laws of the State of Connecticut, and a wholly-owned
subsidiary of Connecticut Mutual Life Insurance Company.
DEATH BENEFIT: The amount payable upon the death of the Insured, before the
Maturity Date. The amount of the Death Benefit will depend on the Death
Benefit Option and the Definition of Life Insurance Test chosen, but will
always be at least equal to the Specified Amount.
DELIVERY RECEIPT: An acknowledgment, signed by the Policyowner and returned
to C.M. Life's Service Center, stating that the Policyowner has received the
Policy.
DEFINITION OF LIFE INSURANCE TEST: The test chosen at issue by the
Policyowner to determine if the Policy qualifies as "life insurance" under
Federal tax laws. The two possible choices are the Guideline Premium Test and
the Cash Value Accumulation Test.
EVIDENCE OF INSURABILITY: Information, including medical information
satisfactory to C.M. Life, that is used to determine the Insured's
Underwriting Class. Additionally, information may be required to ascertain
the existence of a sufficient insurable interest to support ownership of the
Policy by the Policyowner.
FIXED ACCOUNT: An account that bears interest at a fixed rate determined by
C.M. Life but guaranteed to be no lower than 4% annually. Amounts allocated
to the Fixed Account will be held in the General Account of C.M. Life.
GENERAL ACCOUNT: All the assets of C. M. Life other than those held in a
separate investment account.
GUIDELINE MINIMUM DEATH BENEFIT: The minimum Death Benefit required to
qualify the Policy as "life insurance" under Federal tax laws. The Guideline
Minimum Death Benefit is calculated by multiplying the Policy Value by a
percentage determined by the Insured's Age and the Definition of Life
Insurance Test chosen at issue.
INSURANCE AMOUNT AT RISK: The Death Benefit less the Policy Value.
LOAN VALUE: The maximum amount that may be borrowed under the Policy. The
Loan Value is currently equal to the Policy Value as of the date of the loan
less any outstanding Policy Debt and less loan interest projected to the next
Policy Anniversary at the then current Loan Interest Rate.
MATURITY DATE: Unless a different date is mandated under applicable state
law, the Maturity Date will be the Policy Anniversary nearest the Insured's
95th birthday. The Maturity Date is the latest date on which a premium
payment may be made.
MONTHLY DEDUCTION: Charges deducted monthly from the Policy Value of a Policy
prior to the Maturity Date. The charges include the monthly cost of
insurance, the monthly cost of any benefits provided by riders, and the
monthly administrative charge.
MONTHLY PAYMENT DATE: The date on which the Monthly Deduction is deducted
from Policy Value.
NET PREMIUM: An amount equal to the premium payment made less a tax expense
charge and any applicable premium charge.
POLICY CHANGE: Any change in the Specified Amount, the addition or deletion
of a rider, or a change in the Death Benefit Option and certain changes in
Underwriting Class.
POLICY DATE: The date set forth in the Policy used to determine the Monthly
Payment Date, Policy months, Policy years, and Policy anniversaries.
POLICY DEBT: All unpaid Policy loans plus interest currently due or accrued
on such loans.
POLICY VALUE: The total amount available for allocation under a Policy at any
time. It is equal to the sum of (a) the value of the Accumulation Units
credited to a Policy in the Sub-Accounts, and (b) the value held in the Fixed
Account credited to that Policy.
PRINCIPAL OFFICE: C.M. Life's home office, located at 140 Garden St.,
Hartford, Connecticut 06154.
PROCEEDS: Amounts paid to the Policyowner (or any assignee) through a
surrender or payment at Maturity or to the Beneficiary at the death of the
Insured. Proceeds equal the Surrender Value, if paid out by Surrender or at
the Maturity Date. If paid on the death of the Insured, the amount of the
Proceeds will depend on the Death Benefit option selected.
PRO RATA ALLOCATION: A method of allocating amounts to or from the Fixed
Account and the Sub-Accounts that contain Policy Value. Each account will be
allocated a percentage of the total amount to be allocated, and that
percentage will be equal to the percentage of the total Policy Value less
Policy Debt that is contained in that account.
SEPARATE ACCOUNT: The separate investment account called "C.M. Life Variable
Life Separate Account I." Established by C.M. Life under the laws of the
State of Connecticut, the Separate Account is registered as a unit investment
trust under the Investment Company Act of 1940, as amended. The Separate
Account will be used to receive and invest premiums for the Policy and it may
also be used for other variable life insurance policies that C.M. Life may
issue.
SERVICE CENTER: Currently, C.M. Life's home office, located at 140 Garden
Street, Hartford, Connecticut 06154.
SPECIFIED AMOUNT: The amount of insurance coverage applied for. The
Specified Amount of each Policy is set forth in the specification pages of the
Policy.
SUB-ACCOUNT: A division of the Separate Account. Each Sub-Account invests
exclusively in the shares of a corresponding C. M. Fund or VIP Fund.
SURRENDER VALUE: The amount payable upon a full surrender of the Policy. It
is the Policy Value less any Policy Debt.
TARGET PREMIUM: A premium amount used to determine premium charges for the
Policy. Target Premiums vary by Insured's Age, Underwriting Class, and
tobacco status.
UNDERWRITING CLASS: The risk classification that C.M. Life assigns the
Insured based on the type of underwriting applied to the Insured, the
information in the application and any other Evidence of Insurability
considered by C.M. Life. The Insured's Underwriting Class will affect the
cost of insurance charge and the amount of premium required to keep the Policy
in force.
VALUATION DATE: A day on which the net asset value of the shares of the C.M.
Fund or VIP Funds is determined and Accumulation Unit values of the
Sub-Accounts are determined. Valuation Dates currently occur on each day on
which the New York Stock Exchange is open for trading.
VALUATION PERIOD: The interval between two consecutive Valuation Dates.
WRITTEN REQUEST: A request by the Policyowner in writing in a form
satisfactory to C.M. Life.
YOU OR YOUR: The Policyowner, as shown in the application for the Policy.
<PAGE>
SUMMARY
This Policy, issued by C.M. Life, is an individual flexible premium variable
life insurance policy. The Policy is generally issued to corporations and
other entities who are employers. The Policy is subject to certain
underwriting rules. While it provides a Death Benefit, Surrender Values, and
Policy Loan options like a traditional life insurance product, it offers the
Policyowner the flexibility to adjust the amount and timing of premiums paid.
The Policy will remain in effect as long as the Policy Value less Policy Debt
is sufficient to cover any charges assessed against the Policy. The Policy is
"variable" in that it allows the Policyowner to bear the investment risk on
Policy Value allocated to any of the Sub-Account choices offered by the
Policy. While Policy Value allocated to the Fixed Account bears interest at a
fixed rate guaranteed to be no lower than 4% annually, Policy Value allocated
to a Sub-Account will vary with the investment performance of that Sub-
Account. The Sub-Accounts do not have a guaranteed minimum rate of return.
(See "The Policy.")
Net premiums and Policy Value may be allocated among any of the eleven Sub-
Accounts and the Fixed Account. Each of the eleven Sub-Accounts invests in a
corresponding Portfolio of the C.M. Fund, VIP Fund or VIP Fund II. These
Portfolios include eight C.M. Fund Portfolios: Government Securities; Income;
Total Return; Growth; International Equity; LifeSpan Diversified Income;
LifeSpan Balanced; and LifeSpan Capital Appreciation. The two VIP Fund
Portfolios are the Money Market and the High Income, while the Index 500
Portfolio is offered by VIP Fund II. (See "DESCRIPTION OF C.M. LIFE,
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY, THE SEPARATE ACCOUNT, C.M. FUND AND
VIP FUNDS.")
Transfers of Policy Value, within certain limits, are allowed between these
options. Currently, the first twelve transfers per Policy year will be free
of charge. The charge per transfer in excess of twelve per Policy year is
$25. Rebalancing of the Policy Value among the Sub-Accounts and the Fixed
Account may be chosen by the Policyowner. Rebalancing compares the percentage
of the total Policy Value in each of the Sub-Accounts and the Fixed Account
with a set of percentages specified by the Policyowner. If those percentages
differ by more than a specified tolerance, automatic transfers will rebalance
the Policy Value within each Sub-Account to match the specified mix.
Automatic transfers do not count toward the twelve free transfers. (See
"TRANSFER PRIVILEGES" and "ACCOUNT REBALANCING.")
In addition to premium flexibility and investment choices, the Policy offers
other choices. At issue, and once per policy year, the Policyowner may choose
between two Death Benefit Options. Death Benefit Option 1 is a level death
benefit equal to the Specified Amount (or if greater, the Guideline Minimum
Death Benefit), while Death Benefit Option 2 is an increasing death benefit
equal to the Specified Amount plus the Policy Value (or if greater, the
Guideline Minimum Death Benefit). The Policyowner may also choose the test to
be used to determine if the Policy qualifies as "life insurance" under Federal
Tax laws. The two choices are the Cash Value Accumulation Test and the
Guideline Premium Test. The Definition of Life Insurance Test cannot be
changed after issue.
The Policy offers other benefits and features described in greater detail in
"The Policy" section of this prospectus. Additionally, you should consult the
Policy itself to reference the insurance coverage and rights afforded to the
Policyowner.
There are no surrender charges assessed upon full surrender of the Policy.
Partial withdrawals are permitted at any time and are subject to a transaction
charge of $25. Loans are available from the inception of the Policy, and
Preferred Loans are available after the tenth Policy Year. Within certain
limits the Specified Amount can be adjusted by the Policyower, and the Policy
may be reinstated for up to three years from the lapse date.
The charges associated with the Policy include a tax expense charge, a premium
charge, and a Monthly Deduction. The Monthly Deduction consists of a charge
for the cost of insurance, a charge for any additional benefits provided by
rider, and a monthly administrative charge. There are also charges associated
with certain transactions that may be requested by the Policyowner. (See
"CHARGES AND DEDUCTIONS.")
Charges are also assessed against assets of the Separate Account. A mortality
and expense risk charge, and an administrative charge are assessed against all
assets in the Separate Account. Additionally, investment advisory fees and
other expense charges are assessed by each Fund. See the accompanying
prospectuses for each Fund for more detail concerning applicable Fund charges.
(See "CHARGES AND DEDUCTIONS.")
The purpose of the Policy is to provide insurance protection on the life of
the named Insured. This Summary is intended to provide only a very brief
overview of the more significant aspects of the Policy. Further detail is
provided in this prospectus and in the Policy. No claim is made that the
Policy is in any way similar or comparable to a systematic investment plan of
a mutual fund. The Policy together with its attached application and any
amendments thereto constitutes the entire agreement between C.M. Life and you.
DESCRIPTION OF C.M. LIFE, CONNECTICUT MUTUAL LIFE INSURANCE COMPANY, THE
SEPARATE ACCOUNT, THE C.M. FUND, VIP FUND AND VIP FUND II.
C.M. LIFE - C.M. Life is a stock life insurance company located at 140 Garden
Street, Hartford, Connecticut 06154. C.M. Life was chartered by a Special Act
of the Connecticut General Assembly on April 25, 1980. C.M. Life is
principally engaged in the sale of life insurance policies and annuity
contracts, and is licensed to sell such products in all states except New
York. C.M. Life is a wholly-owned subsidiary of Connecticut Mutual Life
Insurance Company ("CML"). As of March 1, 1995 C.M. Life is licensed to
transact a variable life insurance business in 25 States. It anticipates that
it will receive authority to write variable life insurance business in all
States (except New York) by the end of 1995.
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY ("CML") - Founded in 1846, CML is
the sixth oldest life insurance company in the United States, and the first
life insurance company formed in Connecticut. CML distributes products and
services in all 50 states, Puerto Rico and the District of Columbia.
THE SEPARATE ACCOUNT - The Separate Account was established on February 2,
1995, by the Board of Directors of C.M. Life, in accordance with the laws of
the State of Connecticut. The Separate Account is a separate investment
account of C.M. Life, and is registered with the Securities and Exchange
Commission ("SEC") as a unit investment trust under the Investment Company Act
of 1940, as amended ("1940 Act"). Such registration does not involve the
supervision of its management or investment practices or policies of the
Separate Account or C.M. Life by the SEC.
The assets used to fund the variable portion of the Policies are set aside in
the Separate Account and are kept separate from the general assets of C.M.
Life. Assets equal to the reserves and other liabilities of the Separate
Account may not be charged with any liabilities arising out of any other
business of C.M. Life.
The Separate Account currently has eleven Sub-Accounts. Each Sub-Account is
administered and accounted for as part of the general business of C.M. Life,
but the income, capital gains, or capital losses of each Sub-Account are
allocated to such Sub-Account, without regard to other income, capital gains,
or capital losses of C.M. Life or the other Sub-Accounts. Each of the eleven
Sub-Accounts invests its assets in a corresponding investment portfolio of
either the C.M. Fund or VIP Funds, each open-end management investment
companies registered under the SEC under the 1940 Act. The C.M. Fund is
managed by G.R. Phelps & Co., Inc. ("G.R. Phelps") while the VIP Funds are
managed by Fidelity Management & Research Company ("Fidelity Management").
Each Sub-Account has two sub-divisions. One sub-division applies to Policies
during their first twenty Policy years, which are subject to a Separate
Account administrative charge. See "CHARGES AND DEDUCTIONS - Charges Against
Assets of the Separate Account." Thereafter, such Policies are automatically
allocated to the second sub-division to account for the elimination of the
Separate Account administrative charge and the reduction in the Mortality and
Expense Risk Charge.
C.M. Life reserves the right, subject to compliance with applicable law, to
change the names of the Sub-Accounts and Separate Account and to add or delete
Sub-Accounts. Any additional Sub-Accounts added will invest in vehicles
determined by C.M. Life to be available for investment by the Separate
Account.
THE C.M. FUND - Connecticut Mutual Financial Services Series Fund I, Inc. (the
"C.M. Fund") is an open-end, diversified management investment company
registered with the SEC under the 1940 Act. Such registration does not
involve supervision by the SEC of the investments or investment policy of the
Trust or its separate investment Portfolios.
The C.M. Fund was incorporated in Maryland on August 17, 1981. The C.M. Fund
has eight Portfolios including: Government Securities Portfolio; Income
Portfolio; Total Return Portfolio; Growth Portfolio; International Equity
Portfolio; LifeSpan Diversified Income Portfolio; LifeSpan Balanced Portfolio;
and LifeSpan Capital Appreciation Portfolio. The LifeSpan Diversified Income
Portfolio, the LifeSpan Balanced Portfolio, and the LifeSpan Capital
Appreciation Portfolio will be available to the Separate Account after
September 1, 1995.
G.R. Phelps is an indirect wholly-owned subsidiary of CML, serves as
investment adviser of the C.M. Fund, and manages the investments of the C.M.
Fund Portfolios. (See "INVESTMENT ADVISORY SERVICES TO THE C.M. FUND.")
VIP FUND AND VIP FUND II - Variable Insurance Products Fund and Variable
Insurance Products Fund II are each managed by Fidelity Management. Two VIP
Fund Portfolios are available under the Policies: the Money Market Portfolio,
and High Income Portfolio. Additionally, the Index 500 Portfolio of the VIP
Fund II is available under the Policy.
Various Fidelity companies perform certain activities required to operate VIP
Funds. Fidelity Management, a registered investment adviser under the
Investment Advisers Act of 1940, is one of America's largest investment
management organizations and has its principal business address at 82
Devonshire Street, Boston, MA. It is composed of a number of different
companies, which provide a variety of financial services and products.
Fidelity Management is the original Fidelity company, founded in 1946. It
provides a number of mutual funds to other clients with investment research
and portfolio management services.
INVESTMENT OBJECTIVES AND POLICIES - A summary of investment objectives of
each of the Funds is set forth below. MORE DETAILED INFORMATION REGARDING THE
INVESTMENT OBJECTIVES, RESTRICTIONS AND RISKS, EXPENSES PAID BY THE FUNDS, AND
OTHER RELEVANT INFORMATION REGARDING THE FUNDS MAY BE FOUND IN THEIR
RESPECTIVE PROSPECTUSES, WHICH ACCOMPANY THIS PROSPECTUS. EACH OF THE
PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE INVESTING. The statements of
additional information of the Funds are available by written or telephone
request to the C. M. Fund and VIP Funds,whose addresses and telephone numbers
are shown in their prospectuses. There can be no assurance that the
investment objectives of the Funds can be achieved.
GOVERNMENT SECURITIES PORTFOLIO - The Government Securities Portfolio of
the C.M. 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 C.M. Fund seeks to obtain
a high level of current income consistent with prudent investment
risk and preservation of capital by investing primarily in fixed-income
debt securities anticipated to have an average dollar-weighted
portfolio maturity of eight to twelve years.
TOTAL RETURN PORTFOLIO - The Total Return Portfolio of the C.M. 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 and the Income Portfolio.
GROWTH PORTFOLIO - The Growth Portfolio of the C.M. Fund seeks to achieve
long-term growth of capital by investing in common stocks with low price-
earnings ratios and better than anticipated earnings.
INTERNATIONAL EQUITY PORTFOLIO - The International Equity Portfolio of
the C.M. Fund seeks long-term capital growth by investing primarily (at
least 90% of its total assets under normal circumstances) in equity
securities of companies based outside the United States. A portion of
the Portfolio's investments may be held in cash and in short-term
instruments. Current income is a secondary consideration.
LIFESPAN PORTFOLIOS - Commencing on September 1, 1995, the C.M. Fund
will offer three distinct "LifeSpan Portfolios" each of which is designed
to meet the needs of different types of investors. The LifeSpan
Portfolios consist of various sub-accounts that invest in a variety of
underlying funds. The primary investment objectives of these LifeSpan
Portfolios are as follows:
LifeSpan Capital Appreciation Portfolio seeks long-term capital
appreciation through a strategically allocated portfolio consisting
primarily of equity securities.
LifeSpan Balanced Account Portfolio seeks capital appreciation and
income through a strategically allocated portfolio of equity
securities and fixed income securities with a focus on equity
securities.
LifeSpan Diversified Income Portfolio attempts to provide long-term
protection for cautious investors, seeking high current income
focusing on fixed income securities.
MONEY MARKET PORTFOLIO - The Money Market Portfolio of VIP Fund is invested
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 VIP 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
"Securities and Investment Practices" in the VIP Fund prospectus.
INDEX 500 PORTFOLIO - The Index 500 Portfolio of VIP Fund lI seeks
investment results that correspond to the total return (i.e., the
combination of capital changes and income) of common stocks publicly traded
in the United States, as represented by the Standard & Poor's Composite
Index of 500 Stock Prices (the "S&P 500"), while keeping transaction
costs and other expenses low.
Index 500 Portfolio is not managed according to traditional methods of
"active" investment management, which involve the buying and selling of
securities based upon economic, financial, and market analyses and
investment judgment. Instead, the fund, utilizing a "passive" or
"indexing" investment approach, attempts to duplicate the performance of
the S&P 500.
CERTAIN C.M. FUND PORTFOLIOS MAY HAVE INVESTMENT OBJECTIVES AND/OR POLICIES
SIMILAR TO THOSE OF CERTAIN VIP FUND PORTFOLIOS. THEREFORE, TO CHOOSE THE
SUB-ACCOUNTS WHICH WILL BEST MEET YOUR NEEDS AND OBJECTIVES, CAREFULLY READ
THE PROSPECTUSES OF THE C.M. FUND AND VIP FUND AND VIP FUND II ALONG WITH THIS
PROSPECTUS. IN SOME STATES, INSURANCE REGULATIONS MAY RESTRICT THE
AVAILABILITY OF PARTICULAR SUB-ACCOUNTS.
If required in your state, in the event of a material change in the investment
policy of a Sub-Account or the Funds in which it invests, you will be
notified of the change. If you have Policy Value in that Sub-Account, C.M.
Life will transfer it without charge on Written Request by you to another
Sub-Account or to the Fixed Account. C.M. Life must receive your written
request within sixty (60) days of the later of (1) the effective date of such
change in the investment policy or (2) the receipt of the notice of your right
to transfer. You may then change your premium allocation percentages.
INVESTMENT ADVISORY SERVICES TO THE C.M. FUND - The C.M. Fund has entered into
an investment advisory agreement with G.R. Phelps & Co., Inc. ("G.R. Phelps"),
an indirect wholly-owned subsidiary of CML and an affiliate of C.M. Life.
Under the investment advisory agreement, G.R. Phelps provides certain
administrative services and investment advice to each C.M. Fund Portfolio.
G.R. Phelps provides administrative and management services to the C.M. Fund
Portfolios, such as providing accounting, administrative and clerical
personnel and monitoring the activities of the custodian and independent
auditors for the C.M. Fund Portfolios. The investment advisory agreement
obligates G.R. Phelps to provide investment advisory services and to pay all
compensation of and furnish office space for officers of the C.M. Fund
connected with investment and economic research, trading and investment
management of the C.M. Fund and the C.M. Fund Portfolios. Each C.M. Fund
Portfolio pays all other expenses incurred in its operation. The Board of
Directors of the C.M. Fund is primarily responsible for monitoring activities
of G.R. Phelps.
For providing its services under the investment advisory agreement, G.R.
Phelps will receive a monthly fee, computed daily at an annual rate based on
the average daily net asset value of each C.M. Fund Portfolio as follows:
<TABLE>
<CAPTION>
<S> <C>
</TABLE>
PORTFOLIO NET ASSET VALUE RATE
Total Return First $600 Million 0.625%
More than $600 Million 0.450%
International Equity First $250 Million 1.000%
More than $250 Million 0.900%
Government Securities First $300 Million 0.525%
Next $100 Million 0.500%
More than $400 Million 0.450%
Income First $300 Million 0.575%
Next $100 Million 0.500%
More than $400 Million 0.450%
Growth First $300 Million 0.625%
Next $100 Million 0.500%
More than $400 Million 0.450%
LifeSpan Diversified Income All Amounts 0.750%
LifeSpan Balanced All Amounts 0.850%
LifeSpan Capital Appreciation All Amounts 0.850%
INVESTMENT ADVISORY SERVICES TO THE VIP FUNDS - For managing investments and
business affairs, each VIP Fund and VIP Fund ll Portfolio pays a monthly fee
to Fidelity Management. The Prospectuses of the VIP Fund and VIP Fund II
contain additional information concerning the Portfolios, including
information concerning additional expenses paid by the VIP Portfolios, and
should be read in conjunction with this Prospectus.
VIP FUND PORTFOLIOS
The Money Market Portfolio's management fee is (a) the sum of an individual
fund fee rate of 0.03% and a group fee rate; and (b) the addition of an income
component of 6% of the Portfolio's gross income in excess of a 5% annual
yield. The result is multiplied by the Portfolio's average net assets. The
group fee rate, which is based on the average net assets of all of the mutual
funds advised by Fidelity Management, cannot rise above 0.37%, and it drops as
total assets under management increase. The income component cannot rise
above 0.24%. The management fee rate for Money Market Portfolio as of
December 31, 1994 was 0.20%
The High Income Portfolio pays a monthly fee to Fidelity Management at an
annual fee rate made up of the sum of two components:
1. A group fee rate based on the monthly average net assets of all the mutual
funds advised by Fidelity Management. On an annual basis this rate cannot
rise above 0.37%, and it drops to as low as 0.14% as total assets in all
these funds rise.
2. An individual fund fee rate of 0.45% of the High Income Portfolio's average
net assets throughout the month. One-twelfth of the annual management fee
rate is applied to net assets averaged over the most recent month, resulting
in a dollar amount which is the management fee for that month.
One-twelfth of the sum of these two rates is applied to the respective VIP
Fund Portfolio's net assets averaged over the most recent month, giving a
dollar amount which is the fee for that month.
Thus, the High Income Portfolio may have an annual fee of as high as 0.82% of
its average net assets. The actual fee rate may be less depending on the total
assets in each Portfolio and in the other funds advised by Fidelity
Management. The effective management fee rate for the High Income Portfolio
as of December 31, 1994 was 0.61%.
VIP FUND II PORTFOLIO
The Index 500 Portfolio had a monthly fee payable at the annual rate of 0.28%
of its average net assets. The actual advisory expenses for 1994 equaled
0.91% of the Portfolio's average net assets.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS - C.M. Life reserves the
right, subject to applicable law, to make additions to, deletions from, or
substitutions for the shares that are held in the Sub-Accounts or that the
Sub-Accounts may purchase. If the shares of any of the Funds are no longer
available for investment or if in C.M. Life's judgment further investment in
any of the Funds should become inappropriate in view of the purposes of the
Separate Account or the affected Sub-Account, C.M. Life may redeem the shares
of that Fund and substitute shares of another registered open-end management
company. C.M. Life will not substitute any shares attributable to a Policy
invested in a Sub-Account without appropriate notice to the Policyowner and
prior approval of the Commission and state insurance authorities, to the
extent required by the 1940 Act or other applicable law. The Separate Account
may, to the extent permitted by law, purchase other securities for other
policies or permit a conversion between policies upon request by a
Policyowner.
C.M. Life also reserves the right to establish additional Sub-Accounts of the
Separate Account, each of which would invest in shares corresponding to either
a new C.M. Fund or VIP Fund or in shares of another investment company having
a specified investment objective. Subject to applicable law and any required
Commission approval, C.M. Life may, in its sole discretion, establish new
Sub-Accounts or eliminate one or more Sub-Accounts if marketing needs, tax
considerations or investment conditions warrant. Any new Sub-Accounts may be
made available to existing Policyowners on a basis to be determined by C.M.
Life.
Shares of the C.M. Fund Portfolios are also issued to separate accounts of
C.M. Life and its affiliates which issue variable annuity contracts ("mixed
funding"). In the future, shares of the C.M. Fund Portfolios may be issued to
separate accounts of unaffiliated insurance companies ("shared funding"). It
is conceivable that in the future such mixed funding or shared funding may be
disadvantageous for variable life Policyowners or variable annuity
Policyowners. Although C.M. Life does not currently foresee any such
disadvantages to either variable life insurance Policyowners or variable
annuity Policyowners, C.M. Life, the Board of Directors of the C.M. Fund and
the Board of Trustees of each of the VIP Funds are required to monitor events
in order to identify any material conflicts between such Policyowners and to
determine what action, if any, should be taken in response thereto. If the
Trustees or Directors were to conclude that separate funds should be
established for variable life and variable annuity separate accounts, C.M.
Life will bear the attendant expenses.
If any of these substitutions or changes are made, C.M. Life may by
appropriate endorsement change the Policy to reflect the substitution or
change and will notify Policyowners of all such changes. If C.M. Life deems
it to be in the best interest of Policyowners, and subject to any approvals
that may be required under applicable law, the Separate Account or any
Sub-Account(s) may be operated as a management company under the 1940 Act, may
be deregistered under the 1940 Act if registration is no longer required, or
may be combined with other Sub-Accounts or other separate accounts of C.M.
Life.
VOTING RIGHTS - To the extent required by law, C.M. Life will vote C.M. Fund,
VIP Fund, or VIP Fund II shares held by each Sub-Account in accordance with
instructions received from Policyowners with Policy Value in such Sub-Account.
If the 1940 Act or any rules thereunder should be amended or if the present
interpretation of the 1940 Act or such rules should change, and as a result
C.M. Life determines that it is permitted to vote shares in its own right,
whether or not such shares are attributable to the Policies, C.M. Life
reserves the right to do so.
Each person having a voting interest will be provided with proxy materials of
the C.M. Fund or the particular VIP Fund together with an appropriate form
with which to give voting instructions to C.M. Life. Shares held in each
Sub-Account for which no timely instructions are received will be voted in
proportion to the instructions received from all persons with an interest in
such Sub-Account furnishing instructions to C.M. Life. C.M. Life will also
vote shares held in the Separate Account that it owns and which are not
attributable to Policies in the same proportion.
The number of votes which a Policyowner has the right to instruct will be
determined by C.M. Life as of the record date established for the C.M. Fund or
the particular VIP Fund. This number is determined by dividing each
Policyowner's Policy Value in the Sub-Account, if any, by the net asset value
of one share in the corresponding C.M. Fund or VIP Fund Portfolio in which the
assets of the Sub-Account are invested.
C.M. Life may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as (1) to cause a change in the subclassification or investment
objective of one or more of the C.M. Fund or VIP Fund Portfolios; or (2) to
approve or disapprove an investment advisory contract for the C.M. Fund or VIP
Funds. In addition, C.M. Life may disregard voting instructions in favor of
any change in the investment policies or in any investment adviser or
principal underwriter initiated by Policyowners, the Board of Directors of the
C.M. Fund, or the Board of Trustees of either of the VIP Funds. C.M. Life's
disapproval of any such change must be reasonable and, in the case of a change
in investment policies or investment adviser, based on a good faith
determination that such change would be contrary to state law or otherwise is
inappropriate in light of the objectives and purposes of the C.M. Fund or the
VIP Funds. In the event C.M. Life does disregard voting instructions, a
summary of and the reasons for that action will be included in the next
periodic report to Policyowners.
PERFORMANCE INFORMATION
CML from time to time may advertise the "Total Return" and the "Average Annual
Total Return." Such figures are based on historical earnings and are not
intended to indicate future performance.
"Total Return" for a Portfolio refers to the total of the income generated by
the Portfolio net of total Portfolio operating expenses plus capital gains and
losses, realized or unrealized. "Total Return" for the Sub-Accounts refers to
the total of the income generated by the Portfolio net of total Portfolio
operating expenses plus capital gains and losses, realized or unrealized, the
mortality and expense risk charge, and the Separate Account administrative
charges. "Average Annual Total Return" reflects the hypothetical annually
compounded return that would have produced the same cumulative return if the
Portfolio's or Sub-Account's performance had been constant over the entire
period. Because Average Annual Total Returns tend to smooth out variations in
the return of the Portfolio, they are not the same as actual year-by-year
results.
Performance information may be compared, in reports and promotional
literature, to: (i) the Standard & Poor's 500 Stock Index ("S & P 500"), Dow
Jones Industrial Average ("DJIA"), Shearson Lehman Aggregate Bond Index or
other unmanaged indices so that investors may compare the Sub-Account results
with those of a group of unmanaged securities widely regarded by investors as
representative of the securities markets in general; (ii) other groups of
variable life separate accounts or other investment products tracked by Lipper
Analytical Services, a widely used independent research firm which ranks
mutual funds and other investment products by overall performance, investment
objectives, and assets, or tracked by other services, companies, publications,
or persons, such as Morningstar, Inc., who rank such investment products on
overall performance or other criteria; or (iii) the Consumer Price Index (a
measure for inflation) to assess the real rate of return from an investment in
the Sub-Account. Unmanaged indices may assume the reinvestment of dividends
but generally do not reflect deductions for administrative and management
costs and expenses.
C.M. Life may provide in advertising, sales literature, periodic publications
or other materials information on various topics of interest to Policyowners
and prospective Policyowners. These topics may include the relationship
between sectors of the economy and the economy as a whole and its effect on
various securities markets, investment strategies and techniques (such as
value investing, market timing, dollar cost averaging, asset allocation,
constant ratio transfer and account rebalancing), the advantages and
disadvantages of investing in tax-deferred and taxable investments, customer
profiles and hypothetical purchase and investment scenarios, financial
management and tax and retirement planning, and investment alternatives to
certificates of deposit and other financial instruments, including comparisons
between the Policies and the characteristics of and market for such financial
instruments.
The Policies were first offered to the public in 1995. However, total return
data may be advertised based on the period of time that the Portfolios have
been in existence. The results for any period prior to the Policies being
offered will be calculated as if the Policies had been offered during that
period of time, with all charges assumed to be those applicable to the
Policies.
PORTFOLIO PERFORMANCE FOR PERIOD ENDING: DECEMBER 31, 1994
The following performance information of the Portfolio reflects the total of
the income generated by the Portfolio net of total Portfolio operating
expenses plus capital gains and losses, realized or unrealized. It does NOT
reflect the Policy or Separate Account charges.
<TABLE>
<CAPTION>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN OF THE PORTFOLIOS
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO 1 YR. 3 YR. 5 YR. 10 YR. LIFE OF PORTFOLIO
<S> <C> <C> <C> <C> <C>
International Equity 1.44% N/A N/A N/A 6.56%
Income -4.08% 4.90% 7.66% 9.67% 10.80%
Govt. Securities -4.89% N/A N/A N/A 4.58%
Total Return -1.97% 7.90% 10.21% 12.64% 13.17%
Growth -0.51% 10.66% 11.41% 14.28% 16.27%
High Income -1.55% 13.44% 14.03% N/A 10.90%
Money Market 4.25%* 3.79% 5.09% 6.31% 7.20%
Index 500 1.04% N/A N/A N/A 7.26%
LifeSpan Balanced N/A N/A N/A N/A N/A
LifeSpan Diversified N/A N/A N/A N/A N/A
LifeSpan Capital Appreciation N/A N/A N/A N/A N/A
</TABLE>
Portfolio Inception Dates: Income 1-21-82, Government Securities 5-13-92,
Total Return 9-30-82, Growth 1-21-82, High Income 9-19-85, International
Equity 5-13-92, Money Market 4-1-82, LifeSpan Balanced 9-1-95, LifeSpan
Diversified 9-1-95, LifeSpan Capital Appreciation 9-1-95, and Index 500 8-
27-92.
* The annualized yield for the Money Market Portfolio for the seven days
ending December 31, 1994 was 5.62%.
SUB-ACCOUNT INVESTMENT PERFORMANCE
Although as of the date of this prospectus the Sub-Accounts have not commenced
operations and therefore have no performance history, the following
performance information of the Sub-Accounts assumes that the Sub-Accounts have
been in operation for the same periods as the corresponding Portfolio and
investing in the corresponding Portfolio. It reflects the total of the income
generated by the Portfolio net of total Portfolio operating expenses, plus
capital gains and losses, realized or unrealized, net of the mortality and
expense risk charge and the separate account administrative charge.
THE FOLLOWING SUB-ACCOUNT PERFORMANCE FIGURES DO NOT REFLECT THREE SIGNIFICANT
CHARGES. IF THESE CHARGES WERE INCLUDED, THE TOTAL RETURN FIGURES WOULD BE
LOWER. FIRST, COST OF INSURANCE CHARGES HAVE NOT BEEN DEDUCTED. SECOND, THE
TOTAL RETURN FIGURES DO NOT REFLECT THE DEDUCTION FROM PREMIUMS OF THE 2.0%
TAX EXPENSE CHARGE OR ANY APPLICABLE PREMIUM CHARGE. THIRD, THESE FIGURES DO
NOT REFLECT THE DEDUCTION OF THE MONTHLY ADMINISTRATIVE CHARGE.
<TABLE>
<CAPTION>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN OF THE SUB-ACCOUNT
</TABLE>
<TABLE>
<CAPTION>
SUB-ACCOUNT 1 YR. 3 YR. 5 YR. 10 YR. LIFE OF SUB-ACCOUNT
<S> <C> <C> <C> <C> <C>
International Equity 0.53% N/A N/A N/A 5.61%
Income -4.94% 3.96% 6.70% 8.69% 9.81%
Govt. Securities -5.74% N/A N/A N/A 3.64%
Total Return -2.85% 6.93% 9.22% 11.63% 12.16%
Growth -1.40% 9.67% 10.41% 13.26% 15.23%
High Income -2.43% 12.42% 13.01% N/A 9.91%
Money Market 3.32% 2.86% 4.15% 5.36% 6.24%
Index 500 0.13% N/A N/A N/A 6.30%
LifeSpan Balanced N/A N/A N/A N/A N/A
LifeSpan Diversified N/A N/A N/A N/A N/A
LifeSpan Capital Appreciation N/A N/A N/A N/A N/A
</TABLE>
Performance information for any Sub-Account reflects only the performance of a
hypothetical investment in the Sub-Account during the particular time period
on which the calculations are based. Performance information should be
considered in light of the investment objectives and policies, characteristics
and quality of the Portfolio in which the Sub-Account invests and the market
conditions during the given time period, and should not be considered as a
representation of what may be achieved in the future. Actual returns may be
more or less than those shown and will depend on a number of factors,
including the investment allocations by an owner and the different investment
rates of return for the Portfolios.
THE POLICY
APPLICATION FOR A POLICY - Upon receipt at its Principal Office of a completed
application from a prospective Policyowner, C.M. Life will follow certain
insurance underwriting procedures designed to determine whether the proposed
Insured is insurable. This process may involve such verification procedures
as medical examinations and may require that further information be provided
by the proposed Policyowner before a determination of insurability can be
made. In some cases, an entire group of Insureds will be pre-approved for
Guaranteed Issue underwriting based on information provided by the common
Policyowner on a master application. In other cases, however, applications
will be subject to full underwriting, in which case C.M. Life reserves the
right to reject an application which does not meet C.M. Life's underwriting
guidelines. In all cases, C.M. Life shall comply with all applicable federal
and state prohibitions concerning unfair discrimination. This process may
include an assessment of whether the Policyowner has a sufficient insurable
interest in the Insured to support ownership of the Policy under applicable
state insurance laws. A Policy cannot be issued until this underwriting
procedure has been completed.
If, at the time of application, a prospective Policyowner makes a premium
payment equal to at least the planned periodic premium selected for the
Policy, pending underwriting approval, C.M. Life will provide fixed
conditional insurance pursuant to a Conditional Insurance Agreement in the
amount of insurance applied for, up to a maximum of $1,000,000. This coverage
will generally continue for a maximum of 90 days from the date of the
application or the completion of a medical exam, should one be required. In
no event will any insurance proceeds be paid under the Conditional Insurance
Agreement if death is by suicide.
If the application is approved, the Policy will be issued with a Policy date
as of the date the terms of the Conditional Insurance Agreement were met. If
no Conditional Insurance Agreement is in effect because the prospective
Policyowner does not wish to make any payment until the Policy is issued or
has paid an initial premium that is not sufficient to place the Policy in
force, upon delivery of the Policy C.M. Life will require payment of
sufficient premium to place the insurance in force.
Pending completion of insurance underwriting and Policy issuance procedures,
the initial premium will be held in the Company's General Account. If the
application is approved and the Policy is issued and accepted, the Net Premium
which was held in the General Account will be credited with interest at a
specified rate (no less than 3%) beginning not later than the date of receipt
of the premium at the Company's Service Center. IF A POLICY IS NOT ISSUED AND
ACCEPTED, THE INITIAL PREMIUMS WILL BE RETURNED TO YOU WITHOUT INTEREST.
If your application is approved, your Policy Value will be allocated according
to your instructions following issuance of the Policy. If your Policy
provides for a full refund of the initial purchase payment under its "Right to
Examine Policy" provision (see "THE POLICY - "Free Look Period"), for the
first 10 days following issuance and acceptance of the Policy, unless an
extended right-to-examine provision applies under applicable state law, the
portion of your Policy Value which you have instructed to be allocated to the
Separate Account will be allocated to the Money Market Sub-Account.
Thereafter, your Policy Value will be allocated to the Sub-Accounts and the
Fixed Account according to your instructions.
Subject to the approval of C.M. Life, a Policy may be backdated no more than
six months prior to the date of application. Backdating may be advantageous
where the Insured's lower Age on the Policy Date results in lower cost of
insurance rates. If a Policy is backdated, cost of insurance charges will be
assessed as of the backdated period.
FREE LOOK PERIOD - The Policy provides for an initial Free Look Period. You
may cancel the Policy by mailing or delivering the Policy to the Service
Center or by delivering the Policy to an agent of C.M. Life on or before the
latest of: (a) 10 days after you receive the Policy (unless a different
period is applicable under state law or regulation); or (b) 10 days after C.M.
Life mails or personally delivers to you a notice of withdrawal right. If
your Policy provides for a full refund of the initial payment under its "Right
to Examine Policy" provision, you will receive on cancellation the greater of
(1) your entire payment, or (2) the Policy Value plus any amounts deducted
under the Policy for taxes, charges or fees. If your Policy does not provide
for a full refund of the initial payment, you will receive upon cancellation
the sum of (1) the difference between any payments made, including fees and
charges, and the amounts allocated to the Separate Account, (2) the Policy
Value (on the date the cancellation request is received by C.M. Life)
attributable to the amounts allocated to the Separate Account, and (3) any
fees or charges imposed on amounts in the Separate Account.
The refund of any payment you have made by check may be delayed until the
check has cleared your bank.
After an increase in Specified Amount, C.M. Life will forward a notice of a
"Free Look" with respect to the increase. You will have the right to cancel
the increase before the latest of (a) 10 days after you receive the new
specification pages issued for the increase (unless a different period is
applicable under state law or regulation), or (b) 10 days after C.M. Life
mails or delivers a notice of withdrawal rights to you. Upon canceling the
increase, you will receive a credit to your Policy Value of charges which
would not have been deducted but for the increase. The amount to be credited
will be refunded if you so request.
CONVERSION PRIVILEGES - Once during the first 24 months after the Date of
Issue or after the effective date of an increase in Specified Amount, while
the Policy is in force, you may convert your Policy without Evidence of
Insurability to any flexible premium adjustable life insurance Policy with
fixed and guaranteed minimum benefits which had been offered by the Company or
CML on the date of issue or on the effective date of an increase in Specified
Amount, whichever is applicable. Assuming that there have been no increases
in the initial Specified Amount, you can accomplish this within 24 months
after the date of issue by transferring, without charge, the Policy Value in
the Separate Account to the General Account and by simultaneously changing
your premium allocation instructions to allocate future premium payments to
the General Account. Within 24 months after the effective date of each
increase, you can transfer, without charge, all or part of the Policy Value in
the Separate Account to the General Account and simultaneously change your
premium allocation instructions to allocate all or part of future premium
payments to the General Account.
Where required by state law, and at your request, C.M. Life will issue a
flexible premium adjustable life insurance policy to you. The new Policy will
have the same Specified Amount, issue ages, and dates of issue as the original
Policy, and will have the underwriting classification we then offer that is
most similar to the original Policy.
PREMIUM PAYMENTS - Premium Payments (for both initial and subsequent premiums)
are payable to C.M. Life, and should be mailed to the Service Center. All
premium payments after the initial premium payment are credited to the
Separate Account or Fixed Account as of date of receipt in good order by C.M.
Life at the Service Center.
You may establish a schedule of planned periodic premium payments. C.M. Life
will send you notice of such planned periodic payments at regular intervals.
Failure to pay planned periodic premiums, however, will not itself cause the
Policy to lapse. You may also make unscheduled premium payments at any time
prior to the Maturity Date or skip planned premium payments, subject to the
maximum and minimum premium limitations described below.
Premiums are not limited as to frequency and number. However, no premium
payment may be less than $100 without C.M. Life's consent. Moreover, premium
payments must be sufficient to provide a positive Surrender Value at the end
of each Policy month, or the Policy may lapse. (See "POLICY TERMINATION AND
REINSTATEMENT.")
If the Guideline Premium Test is chosen as the Definition of Life Insurance
Test, the test provides that there are maximum premium payments that may be
accepted. C.M. Life will not accept premium payments that will violate the
provisions of the test. If a premium payment is made in excess of the limits
of the Guideline Premium Test, C.M. Life will only accept that portion of the
premium payment that is within the limits and will refund the remainder. No
such maximum premium limitations apply under the Cash Value Accumulation Test.
However, notwithstanding the current maximum premium limitations, C.M. Life
will accept a premium which is necessary to prevent a lapse of the Policy
during a Policy year. We reserve the right to refuse any premium that would
increase the net Insurance Amount at Risk.
ALLOCATION OF NET PREMIUMS - The Net Premium equals the premium paid less the
2% tax expense charge and any applicable premium charge. At the time your
application is submitted, you will indicate your initial allocation of Net
Premiums among the Fixed Account and the Sub-Accounts of the Separate Account.
There are no limitations concerning the number of Sub-Accounts to which Net
Premiums may be allocated. Allocation percentages must be in whole numbers
(for example, 33 1/3% may not be chosen) and must total 100%.
For certain Policyowners, after the underwriting period and during the "Right
to Examine Policy" period the portion of your Policy Value which you have
instructed to be allocated to the Separate Account will be allocated to the
Money Market Portfolio (see "THE POLICY - Application for a Policy").
Thereafter, your Net Premium will be allocated to the Sub-Accounts and the
Fixed Account according to your instructions.
You may change the allocation of future Net Premiums at any time pursuant to
written or telephone request. If allocation changes by telephone are elected
by the Policyowner, a properly completed authorization form must be on file
before telephone requests will be honored. C.M. Life and its agents and
affiliates will not be responsible for losses resulting from acting upon
telephone requests reasonably believed to be genuine. C.M. Life will employ
reasonable procedures to confirm that instructions communicated by telephone
are genuine; otherwise, C.M. Life may be liable for any losses due to
unauthorized or fraudulent instructions. The procedures C.M. Life follows for
transactions initiated by telephone include requirements that a Policyowner
wanting to make such a change identify themselves by name and identify a
personal identification number. All transfer instructions by telephone may be
tape recorded as an additional safeguard.
An allocation change will be effective as of the date of receipt of the notice
at the Service Center. Although no charge currently is imposed for changing
premium allocation instructions, C.M. Life reserves the right to impose such
a charge in the future. C.M. Life guarantees that such charge will not exceed
$25.
The Policy Value in the Sub-Accounts will vary with their investment
experience. The Policyowner bears the investment risk that the Policy Value
of each Sub-Account will fluctuate. Further, investment performance of the
Sub-Accounts may affect the Proceeds as well. Policyowners should
periodically review their allocations of premiums and Policy Value in light of
market conditions and overall financial planning requirements.
TRANSFER PRIVILEGE - Subject to C.M. Life's then current rules, you may at any
time transfer Policy Value among the Sub-Accounts or between a Sub-Account and
the Fixed Account. The Policy Value held in the Fixed Account to secure a
Policy Loan, however, may not be transferred.
All requests for transfers must be made to the Service Center. The amount
transferred will be based on the Policy Value in the Account(s) next computed
after receipt of the transfer order. C.M. Life will make transfers pursuant
to valid written or telephone request. As discussed in "THE POLICY -
Allocation of Net Premiums," a properly completed authorization form must be
on file at the Service Center before telephone requests will be honored. (See
"ALLOCATION OF NET PREMIUMS.")
Only one transfer from the Fixed Account to the Separate Account may be made
during each Policy year. The one transfer permitted may not exceed 25% of the
Policy Value held in the Fixed Account at the time of transfer request. There
will also be a ninety (90) day waiting period between transfers out of the
Fixed Account.
The Fixed Account and the Money Market Portfolio could be considered to be
competing options. Transfers between these competing options will not be
permitted. For a period of ninety (90) days following a transfer from one
competing option, no transfer can be made to the other competing option. For
a period of ninety (90) days following a transfer to one competing option, no
transfer can be made from the other competing option.
The transfer privilege is subject to the consent of C.M. Life. C.M. Life
reserves the right to impose limitations on transfers including, but not
limited to: (1) the minimum amount that may be transferred; (2) the minimum
amount that may remain in a Sub-Account following a transfer from that Sub-
Account; (3) the minimum period of time between transfers involving the Fixed
Account; and (4) the maximum amount that may be transferred each time to or
from the Fixed Account.
The first twelve transfers in a Policy Year are free of any charge.
Thereafter a transfer charge of no more than $25 will be deducted from the
amount transferred for each transfer in that Policy year. Any transfers made
with respect to a conversion privilege, Policy loan or material change in
investment policy will not count towards the twelve free transfers.
ACCOUNT REBALANCING - An Account Rebalancing option is currently available to
Policies owned by corporations and trusts. This option maintains a specified
allocation of Policy Value among selected Sub-Accounts and the Fixed Account
by automatically transferring Policy Value on a quarterly, semiannual or
annual basis in accordance with the allocation selected by the Policyowner.
Additionally, we anticipate that this option may be available on a monthly
basis at some time in the future. Generally, Account Rebalancing will be
processed on the 15th of each scheduled month unless the 15th is not a
business day, in which case the rebalancing will be processed on the next
business day. Transfers made in connection with Account Rebalancing are
without charge and do not count toward the twelve free transfers allowed per
Policy Year.
PROCEEDS PAYABLE UPON DEATH OF THE INSURED - As long as the Policy remains in
force C.M Life will, upon due proof of the Insured's death, pay the Proceeds
of the Policy to the named Beneficiary. C.M. Life will normally pay the
Proceeds within seven days of receiving due proof of the Insured's death
(unless a shorter period is required under applicable law), but C.M. Life may
delay payments under certain circumstances. (See "OTHER POLICY PROVISIONS -
Postponement Of Payments.") The Proceeds may be received by the Beneficiary
in a lump sum or under one or more payment options currently offered by C.M.
Life, except as may be restricted by state law. (See "APPENDIX B - PAYMENT
OPTIONS.")
Prior to and at the Maturity Date while the Insured is living, the Proceeds
equal the Surrender Value. The amount of Proceeds payable as a Death Benefit
will be determined as of the date of C.M. Life's receipt of due proof of the
Insured's death.
DEATH BENEFIT OPTIONS - The Policy provides two Death Benefit Options: Option
1 and Option 2, as described below:
Under Option 1, the Death Benefit is equal to the greater of the Specified
Amount and the Guideline Minimum Death Benefit.
Under Option 2, the Death Benefit is equal to the greater of the Specified
Amount plus the Policy Value or the Guideline Minimum Death Benefit.
You designate the desired Death Benefit Option in the application. You may
change the option once per Policy Year by Written Request. Changing Death
Benefit Options may require Evidence of Insurability. The effective date of
any such change will be the Monthly Deduction Date on or following the date of
receipt of the request. Although no charge currently is assessed for
processing a change in Death Benefit Option, C.M. Life reserves the right to
impose such a charge for processing a change in Death Benefit Option in the
future. Any such charge would not be designed to produce a profit.
CHANGE IN DEATH BENEFIT OPTION - If the Death Benefit Option is changed from
Option 2 to Option 1, the Specified Amount will be increased to equal the
Death Benefit which would have been payable under Option 2 on the effective
date of the change (i.e., the Specified Amount immediately prior to the change
plus the Policy Value on the date of the change). The amount of the Death
Benefit will not be altered at the time of the change. However, the change in
Death Benefit Option will affect the determination of the Death Benefit from
that point on, since the Policy Value will no longer be added to the Specified
Amount in determining the Death Benefit.
If the Death Benefit Option is changed from Option 1 to Option 2, the
Specified Amount will be decreased to equal the Death Benefit which would have
been payable under Option 1 at the effective date of such change less the
Policy Value on such effective date. This change may not be made if it would
result in a Specified Amount less than $50,000. A change from Option 1 to
Option 2 will not alter the amount of the Death Benefit at the time of the
change, but will affect the determination of the Death Benefit from that point
on. Because the Policy Value will be added to the new Specified Amount, the
Death Benefit will vary with the Policy Value.
Under the Guideline Premium Test, a change in the Death Benefit Option may
result in total premiums paid exceeding the maximum premium limitation
determined by the provisions of the Guideline Premium Test. In such event,
C.M. Life will pay the excess to the Policyowner. See "THE POLICY - Premium
Payments."
DEFINITION OF LIFE INSURANCE TEST - At issue, the Policy offers a choice
between two tests that may be used to determine if the Policy qualifies as
"life insurance" under Section 7702 of the Code. They are the Guideline
Premium Test and the Cash Value Accumulation Test. The test selected will
determine how the Guideline Minimum Death Benefit is calculated.
Under either test, the Death Benefit at any point must be greater than the
Policy Value times a specified percentage. Under the Guideline Premium Test,
those percentages are prescribed and vary only by the Age of the Insured.
Under the Cash Value Accumulation Test, the percentages vary by the
Underwriting Class, tobacco status and Age of the Insured. If at any point the
Death Benefit is not greater than the Policy Value times the applicable
percentage, the Death Benefit will be increased to the amount necessary to
satisfy the test. We refer to this amount as the "Guideline Minimum Death
Benefit."
The percentages used in calculating the Guideline Minimum Death Benefit are
typically lower under the Guideline Premium Test than they are under the Cash
Value Accumulation Test. However, the Guideline Premium Test imposes maximum
premium limitations while the Cash Value Accumulation Test does not. In
general, these differences in the tests make the Cash Value Accumulation Test
more appropriate for situations where maximum accumulation of Policy Value
during the initial years of the Policy is a primary objective. On the other
hand, the Guideline Premium Test is best suited for Policyowners looking for
the most economically efficient method of accumulating Policy Value to fund a
specified amount of coverage. Since a Policyowner's selection of the Cash
Value Accumulation Test or the Guideline Premium Test depends upon various
complex factors, applicants should consult with a qualified tax adviser in
choosing the Definition of Life Insurance Test.
CHANGE IN SPECIFIED AMOUNT - Subject to certain limitations, you may increase
or decrease the Specified Amount at any time by submitting a Written Request
to C.M. Life requesting such change. Any increase or decrease in the
Specified Amount requested by you will become effective on the Monthly Payment
Date on or next following the date of receipt of the request at the Service
Center, or, if Evidence of Insurability is required, the date of approval of
the request.
INCREASES - Along with the Written Request for an increase, you must submit
satisfactory Evidence of Insurability. The consent of the Insured is also
required whenever the Specified Amount is increased. A request for an
increase in Specified Amount may not be less than $10,000. You may not
increase the Specified Amount after the Insured reaches Age 75.
An increase in the Specified Amount will generally affect the Insurance Amount
at Risk, which may affect the monthly cost of insurance charges. An increase
in Specified Amount may also have adverse tax implications and may result in
modified endowment contract status for the Policy.
After increasing the Specified Amount, you will have the right (1) during a
Free Look Period, to have the increase canceled and the charges which would
not have been deducted but for the increase will be credited to the Policy,
and (2) during the first 24 months following the increase, to transfer any or
all Policy Value of the amount of the increase to the General Account free of
charge. (See "THE POLICY - Free Look Period, - Conversion Privileges.")
DECREASES - A decrease in Specified Amount will not be permitted during the
first three Policy years, or for the three Policy years following an increase
in Specified Amount. The Specified Amount in force after any decrease may
not be less than $50,000. Under the Guideline Premium Test, if a decrease in
Specified Amount will make the Policy not comply with the maximum premium
limitations of the test, the decrease may be limited or Policy Value may be
returned to the Policyowner (at your election) to the extent necessary to meet
the requirements. A return of Policy Value may result in tax liability to
you.
A decrease in the Specified Amount will affect the total Insurance Amount at
Risk, which may affect a Policyowner's monthly cost of insurance charges.
(See "CHARGES AND DEDUCTIONS - Monthly Deduction From Policy Value.") For
purposes of determining the cost of insurance charge, any decrease in the
Specified Amount will reduce the Specified Amount in the following order: (a)
the Specified Amount provided by the most recent increase; (b) the next most
recent increases successively; and (c) the initial Specified Amount.
POLICY VALUE AND SURRENDER VALUE - The Policy Value is the total amount
available for allocation and is equal to the sum of the accumulation in the
Fixed Account and the value of the Accumulation Units in the Sub-Accounts.
The Policy Value is used in determining the Surrender Value (the Policy Value
less any Policy Debt). There is no guaranteed minimum Policy Value. Because
Policy Value on any date depends upon a number of variables, it cannot be
predetermined.
Policy Value and Surrender Value will reflect frequency and amount of Net
Premiums paid, interest credited to accumulations in the Fixed Account, the
investment performance of the chosen Sub-Accounts, any partial withdrawals,
any loans, any loan repayments, any loan interest paid or credited, and any
charges assessed in connection with the Policy.
CALCULATION OF POLICY VALUE - The Policy Value is determined following the
Date of Issue and thereafter on each Valuation Date. Following the Date Of
Issue, the Policy Value will be the Net Premiums received, plus any interest
earned during the period when premiums are held in the Fixed Account (before
being transferred to the Separate Account; see THE POLICY - Application For A
Policy") less any Monthly Deductions due.
On each Valuation Date after the Policy has been issued the Policy Value will
be:
(1) the aggregate of the values in each of the Sub-Accounts on the
Valuation Date, determined for each Sub-Account by multiplying the
value of an Accumulation Unit in that Sub-Account on that date by
the number of such Accumulations Units allocated to the Policy;
plus
(2) the value in the Fixed Account (including any amounts transferred
to the Fixed Account with respect to a loan).
Thus, the Policy Value is determined by multiplying the number of Accumulation
Units in each Sub-Account by the value of the applicable Accumulation Units on
the particular Valuation Date, adding the products, and adding the amount of
the accumulations in the Fixed Account, if any.
THE ACCUMULATION UNIT - Each Net Premium payment is allocated to either the
Sub-Account(s) or the Fixed Account in accordance with your instructions.
Allocations to the Sub-Accounts are credited to the Policy in the form of
Accumulation Units. Accumulation Units are credited separately for each
Sub-Account.
The number of Accumulation Units for each Sub-Account credited to the Policy
is equal to the portion of the Net Premium allocated to the Sub-Account,
divided by the dollar value of the applicable Accumulation Unit as of the
Valuation Date the payment is received at the Service Center. The number of
Accumulation Units will remain fixed unless changed by a subsequent split of
Accumulation Unit value, transfer, partial withdrawal or surrender. In
addition, if C.M. Life is deducting the Monthly Deduction or other charges
from a Sub-Account, each such deduction will result in cancellation of a
number of Accumulation Units equal in value to the amount deducted.
The dollar value of an Accumulation Unit of each Sub-Account varies from
Valuation Date to Valuation Date based on the investment experience of that
Sub-Account. That experience, in turn, will reflect the investment
performance, expenses and charges of the respective Funds. The value of an
Accumulation Unit was set at $1.00 on the first Valuation Date for each
Sub-Account. The dollar value of an Accumulation Unit on a given Valuation
Date is determined by multiplying the dollar value of the corresponding
Accumulation Unit as of the immediately preceding Valuation Date by the
appropriate net investment factor.
NET INVESTMENT FACTOR - The net investment factor measures the investment
performance of a Sub-Account of the Separate Account during the Valuation
Period just ended. The net investment factor for each Sub-Account is equal to
1.0000 plus the number arrived at by dividing (a) by (b) and subtracting (c)
and (d) from the result, where:
(a) is the investment income of that Sub-Account for the Valuation
Period, plus capital gains, realized or unrealized, credited during the
Valuation Period; minus capital losses, realized or unrealized, charged
during the Valuation Period; adjusted for provisions made for taxes, if
any;
(b) is the value of that Sub-Account's assets at the beginning of the
Valuation Period;
(c) is a charge for each day in the Valuation Period equal on an annual basis
to 0.65% of the daily net asset value of that Sub-Account for mortality
and expense risks for the first twenty Policy years. After the twentieth
Policy anniversary, the charge will be reduced to 0.25% of the daily net
asset value of that Sub-Account. This charge may be increased or
decreased by C.M. Life, but may not exceed 0.90%at any point in time;
and
(d) is the Separate Account administrative charge for each day in the
Valuation Period equal on an annual basis to 0.25% of the daily net asset
value of that Sub-Account. This charge is applicable only during the
first twenty Policy years.
The net investment factor may be greater or less than one. Therefore, the
value of an Accumulation Unit may increase or decrease. You bear the
investment risk.
Allocations to the Fixed Account are not converted into Accumulation Units,
but are credited interest at a rate periodically set by C.M. Life. (See "MORE
INFORMATION ABOUT THE GENERAL ACCOUNT.")
PAYMENT OPTIONS - During the Insured's lifetime, you may arrange for the
Proceeds to be paid in a single sum or under one or more of the payment
options currently offered by C.M. Life, subject to any state limitations.
(See "APPENDIX B, "PAYMENT OPTIONS.") These payment options are also
available at the Maturity Date and if the Policy is surrendered. C.M. Life
may make more payment options available in the future. If no election is
made, C.M. Life will pay the Proceeds in a single sum. When the Proceeds are
payable in a single sum, the Beneficiary may, within one year of the Insured's
death, select one or more of the payment options, if no payments have yet been
made.
OPTIONAL INSURANCE BENEFITS - Subject to certain requirements, one or more of
the optional insurance benefits described in "APPENDIX A - OPTIONAL BENEFITS"
may be added to a Policy by rider. The cost of any optional insurance
benefits will be deducted as part of the Monthly Deduction. (See "CHARGES AND
DEDUCTIONS - Monthly Deduction From Policy Value.")
SURRENDER - You may at any time surrender the Policy and receive its Surrender
Value. The Surrender Value is the Policy Value less any Policy Debt. The
Surrender Value will be calculated as of the Valuation Date on which a Written
Request for surrender and the Policy are received at the Service Center. No
Surrender Charges are applied.
The proceeds from a surrender may be paid in a single lump sum or under one or
more payment options currently offered by C.M. Life, subject to any state
limitations. (See "APPENDIX B - PAYMENT OPTIONS.") C.M. Life will normally
pay the Surrender Value within seven days following C.M. Life's receipt of the
surrender request (unless a shorter period is required under applicable law or
regulation), but C.M. Life may delay payment under the circumstances described
in "OTHER POLICY PROVISIONS - Postponement Of Payments."
For important tax consequences which may result from surrender see "FEDERAL
TAX CONSIDERATIONS."
PARTIAL WITHDRAWAL - You may withdraw a portion of the Surrender Value of your
Policy at any time after the Policy has been issued upon Written Request filed
at the Service Center. The Written Request must indicate the dollar amount
you wish to receive and the accounts from which such amount is to be
withdrawn. You may allocate the amount withdrawn among the Sub-Accounts and
the Fixed Account. If you do not provide allocation instructions C.M. Life
will make a Pro Rata Allocation. Under Option 1, the Specified Amount is
reduced by the amount of the partial withdrawal. Additionally, the maximum
amount of a partial withdrawal is 90% of the Surrender Value. A request for a
a partial withdrawal that would reduce the Minimum Specified Amount below 90%
of the Minimum Specified Amount, or that exceeds 90% of the Surrender Value
may be treated as a request for a full surrender of the Policy.
A partial withdrawal from a Sub-Account will result in the cancellation of the
number of Accumulation Units equivalent in value to the amount withdrawn. The
amount withdrawn equals the amount requested by you plus the transaction
charge as described under "CHARGES AND DEDUCTIONS - Charges On Partial
Withdrawal." C.M. Life will normally pay the amount of the partial withdrawal
within seven days (unless a shorter period is required pursuant to applicable
law) following C.M. Life's receipt of the partial withdrawal request, but C.M.
Life may delay payment under certain circumstances described in "OTHER POLICY
PROVISIONS - Postponement Of Payments."
For important tax consequences which may result from partial withdrawals, see
"FEDERAL TAX CONSIDERATIONS."
CHARGES AND DEDUCTIONS
Charges will be deducted in connection with the Policy to compensate C.M. Life
for providing the insurance benefits set forth in the Policy and any
additional benefits added by rider, administering the Policy, incurring
distribution expenses, and assuming certain risks in connection with the
Policies. Each of the charges identified as an administrative charge is
intended to reimburse C.M. Life for actual administrative costs incurred, and
is not intended to result in a profit to C.M. Life.
TAX EXPENSE CHARGE - Currently, a deduction of 2% of premiums for state and
local premium taxes is made from each premium payment. The premium payment
less the tax expense charge and any applicable premium charge equals the Net
Premium. While the premium tax of 2% is deducted from each premium payment,
some jurisdictions may not impose premium taxes. Premium taxes vary from
state to state, ranging from zero to 4.0%, and the 2% rate attributable to
premiums for state and local premium taxes approximates the average expenses
to C.M. Life associated with the premium taxes. The 2% charge may be higher
or lower than the actual premium tax imposed by the applicable jurisdiction.
C.M. Life reserves the right to increase or decrease the tax expense charge to
reflect tax expenses incurred by C.M. Life. C.M. Life does not expect to make
a profit from this charge.
Although not currently deducted, C.M. Life reserves the right to make
deductions from premium payments for Deferred Acquisition Cost ("DAC") tax
charges. If currently imposed, the rate would be at 1%, a rate that C.M. Life
approximates to be equal to C.M. Life's expenses in paying federal taxes for
deferred acquisition costs associated with the Policies. The DAC tax
deduction is a factor C.M. Life must use when calculating the maximum sales
load it can charge under SEC rules.
PREMIUM CHARGE - A premium charge will be applied to premium payments received
during the first seven Policy years after issue or the effective date of an
increase in Specified Amount. The maximum premium charge applied in a Policy
year will be 6% of premium received during that Policy Year, up to the annual
Target Premium for the Policy. If more than the Target Premium for the Policy
is paid in a Policy year, there will be no premium charge applied to the
premium in excess of the Target Premium. In the event of an increase in
Specified Amount, premium payments will be pro rated between the original
Specified Amount and the increase in Specified Amount using the Target
Premiums for each to determine the pro rata split. The premium charge is
designed primarily to compensate C.M. Life for the distribution expenses
associated with the Policy. In certain instances, C.M. Life may reduce this
charge. (See "Reduction of Charges.")
MONTHLY DEDUCTION FROM POLICY VALUE - Prior to the Maturity Date, a Monthly
Deduction from Policy Value will be made to cover a charge for the cost of
insurance, a charge for any optional insurance benefits added by rider and a
monthly administrative charge. The cost of insurance charge and the monthly
administrative charges are discussed below.
Prior to the Maturity Date, the Monthly Deduction will be deducted as of each
Monthly Payment Date commencing with the Policy Date of the Policy. The
Monthly Deduction will be made Pro Rata from the Fixed Account and Sub-
Accounts in which you have Policy Value on the Monthly Calculation Date. No
Monthly Deductions will be made on or after the Maturity Date.
COST OF INSURANCE - This charge is designed to compensate C.M. Life for the
anticipated cost of providing Proceeds to Beneficiaries of those Insureds who
die prior to the Maturity Date. The cost of insurance is determined on a
monthly basis, and is calculated separately for the initial Specified Amount
and for each subsequent increase in Specified Amount.
CALCULATION OF THE CHARGE - The monthly cost of insurance is determined by
multiplying the Insurance Amount at Risk by the appropriate cost of insurance
rates. Under Death Benefit Option 1, the Insurance Amount at Risk is equal to
the greater of the Specified Amount less the Policy Value or the Guideline
Minimum Death Benefit less the Policy Value. Under Death Benefit Option 2,
the Insurance Amount at Risk is equal to the greater of the Specified Amount
or the Guideline Minimum Death Benefit less Policy Value.
COST OF INSURANCE RATES - The Policy contains both current and guaranteed cost
of insurance rates. The current rates are used to calculate the monthly cost
of insurance charges and they may be lower than the guaranteed rates. The
guaranteed rates represent the maximum rates that C.M. Life may charge.
The guaranteed cost of insurance rates vary by the Underwriting Class, tobacco
status and Age of the Insured. For Policies that are fully underwritten, the
guaranteed rates for Preferred risks are based on the 1980 Commissioners
Standard Ordinary Unisex Mortality Table B which assumes an 80% male and 20%
female distribution by sex. The guaranteed rates for Substandard Risks are
based on multiples or additives of the same table. For Policies that are
guaranteed issue (i.e. issued without full underwriting), the guaranteed cost
of insurance rates are based on 150% of the 1980 Commissioners Standard
Ordinary Unisex Mortality Table B.
Current cost of insurance rates vary by Underwriting Class, tobacco status,
Age at Issue, and the number of Policy years that have elapsed since the
Policy date or the effective date of an increase in Specified Amount. The
current cost of insurance rates are based upon C.M. Life's expectations as to
future mortality, investment, expense and persistency experience. C.M. Life
may adjust current cost of insurance rates periodically. The current cost of
insurance rates are determined at the beginning of each Policy Year. The
current cost of insurance rates for an increase in Specified Amount or rider
are also determined annually on the anniversary of the effective date of each
increase or rider.
MONTHLY ADMINISTRATIVE CHARGES - Prior to the Maturity Date, current
administrative charges of $5 per Policy and $0.05 per thousand of Specified
Amount will be deducted from the Policy Value each month. These charges are
guaranteed not to exceed $10 per Policy and $0.10 per thousand of Specified
Amount. After the twentieth Policy Anniversary, the $0.05 per thousand charge
will be eliminated, and the amount deducted monthly will be $5.00 per Policy.
This charge will be used to compensate C.M. Life for first year and on-going
expenses incurred in the administration of the Policy. These expenses include
the cost of processing applications, conducting any applicable medical
examinations, determining insurability and the Insured's Underwriting Class,
establishing Policy records, and paying Proceeds. C.M. Life does not expect
to make a profit from these charges.
CHARGES AGAINST ASSETS OF THE SEPARATE ACCOUNT - C.M. Life assesses each
Sub-Account with a charge for mortality and expense risks assumed by C.M.
Life and a charge for administrative expenses of the Separate Account.
MORTALITY AND EXPENSE RISK CHARGE - C.M. Life currently makes a charge on an
annual basis of 0.65% of the daily net asset value in each Sub-Account for
Policy years one through twenty. This charge is reduced to 0.25% in
subsequent Policy years. This charge is for the mortality risk and expense
risk which C.M. Life assumes in relation to the variable portion of the
Policies. The total charges may be increased or decreased by the Board of
Directors of C.M. Life, subject to compliance with applicable state and
federal requirements, but it may not exceed 0.90% on an annual basis.
The mortality risk assumed by C.M. Life is that Insureds may live for a
shorter time than anticipated, and that C.M. Life will therefore pay an
aggregate amount of Proceeds sooner than anticipated. The expense risk
assumed is that the expenses incurred in issuing and administering the
Policies will exceed the amounts realized from the administrative charges
provided in the Policies. If the charge for mortality and expense risks is
not sufficient to cover actual mortality experience and expenses, C.M. Life
will absorb the losses. If costs are less than the amounts provided, the
difference will be a profit to C.M. Life. To the extent this charge results
in a current profit to C.M. Life, such profit will be available for use by
C.M. Life for, among other things, the payment of distribution, sales and
other expenses. Since mortality and expense risks involve future
contingencies which are not subject to precise determination in advance, it is
not feasible to identify specifically the portion of the charge which is
applicable to each.
SEPARATE ACCOUNT ADMINISTRATIVE CHARGE - During the first twenty Policy
Years, C.M. Life assesses a charge on an annual basis of 0.25% of the daily
net asset value in each Sub-Account. Thereafter, in subsequent Policy Years,
this administrative charge will be waived. The charge is assessed to help
defray administrative expenses actually incurred in the administration of the
Separate Account and the Sub-Accounts and is not expected to be a source of
profit. The administrative functions and expenses assumed by C.M. Life in
connection with the Separate Account and the Sub-Accounts include, but are not
limited to, clerical, accounting, actuarial and legal services, rent, postage,
telephone, office equipment and supplies, expenses of preparing and printing
registration statements, expenses of preparing and typesetting prospectuses
and the cost of printing prospectuses not allocable to sales expense, filing
and other fees.
OTHER CHARGES AGAINST THE ASSETS OF THE SEPARATE ACCOUNT - Because the
Sub-Accounts purchase shares of the C.M. Fund and the VIP Funds, the value of
the Accumulation Units of the Sub-Accounts will reflect the investment
advisory fee and other expenses incurred by the Funds. The prospectuses and
statements of additional information of each of the Funds contain additional
information concerning such fees and expenses.
No charges are currently made against the Sub-Accounts for federal or state
income taxes. Should C.M. Life determine that taxes will be imposed, C.M.
Life may make deductions from the Sub-Account to pay such taxes. (See
"FEDERAL TAX CONSIDERATIONS.") The imposition of such taxes would result in a
reduction of the Policy Value in the Sub-Accounts.
SURRENDER CHARGE - No Surrender Charges are applied against the Policy.
CHARGES ON PARTIAL WITHDRAWAL - A transaction charge of $25 will be assessed
on each partial withdrawal to reimburse C.M. Life for the cost of processing
the withdrawal. C.M. Life does not expect to make a profit on this charge.
TRANSFER CHARGES - The first twelve transfers in a Policy year will be free of
charge. Thereafter, a transfer charge of $25 will be imposed for each
transfer request to reimburse C.M. Life for the administrative costs incurred
in processing the transfer request. This transfer charge and the number of
free transfers permitted per Policy year may be adjusted periodically by C.M.
Life; however, the transfer charge is guaranteed not to increase. C.M. Life
reserves the right to change the number of free transfers allowed in a Policy
Year.
Transfers made in connection with Account Rebalancing do not count toward the
number of free transfers allowed in each Policy year and are free of charge.
If you utilize the Conversion Privilege, Loan Privilege or reallocate Policy
Value within 20 days of the Date of Issue of the Policy, any resulting
transfer of Policy Value from the Sub-Accounts to the General Account will
also be free of charge and in addition to the free transfers permitted in a
Policy Year. (See "THE POLICY - Conversion Privileges" and "POLICY LOANS.")
CHARGE FOR INCREASE IN SPECIFIED AMOUNT - No charge is imposed for any
increase in Specified Amount. C.M. Life does, however, reserve the right to
impose such a charge in the future. This charge would be imposed to reimburse
C.M. Life for underwriting and other costs associated with the increase. It
would not be designed to produce a profit.
OTHER ADMINISTRATIVE CHARGES - C.M. Life reserves the right to impose a charge
for the administrative costs incurred for changing the Net Premium allocation
instructions or for producing a projection of values. No such charges are
currently imposed. If such charges are imposed, they will not be designed to
produce a profit.
REDUCTION OF CHARGES - While this Policy is available for sale to individuals,
it will also be sold to corporations and to other multiple life groups or
sponsoring organizations. Depending on the size of the group, the nature of
the sale, the expected premium volume, or other factors that C.M. Life
considers to be significant, there may be expense savings that could be passed
on to the customer. Subject to applicable state laws and regulations, we
reserve the right to reduce the premium charge, cost of insurance charge, or
any other charge that is appropriate to reflect any expense savings.
Distribution expenses, underwriting expenses and administrative expenses are
examples of potential areas where savings may be realized.
POLICY LOANS
Loans may be obtained by request to C.M. Life on the sole security of this
Policy. The total amount which may be borrowed is the Loan Value. The Loan
Value is an amount equal to the Policy Value less existing Policy Debt and
less projected interest to the next Policy Anniversary Date at the then
applicable Loan Interest Rate. We reserve the right to defer Policy Loan
requests for a period not exceeding six months after the date when the
Policyholder applies for the Policy Loan. There is no minimum limit on the
amount of the loan.
A Policy Loan may be allocated among the Fixed Account and one or more
Sub-Accounts. If you do not make an allocation, C.M. Life will make a Pro
Rata Allocation based on the amounts in the Accounts on the date C.M. Life
receives the loan request. Policy Value in each Sub-Account equal to the
Policy Debt allocated to such Sub-Account will be transferred to the Fixed
Account, and the number of Accumulation Units equal to the Policy Value so
transferred will be cancelled. This will reduce the Policy Value in these
Sub-Accounts. These transactions are not treated as transfers for purposes of
the transfer charge.
As long as the Policy is in force, Policy Value in the Fixed Account equal to
the loan amount will be credited with interest at a specified rate equal to 1
1/2% less than the Loan Interest Rate.
LOAN INTEREST CHARGED - Interest accrues daily and is payable in arrears. A
Policy Loan will be subject to a Loan Interest Rate which is calculated based
on the current rate specified as the monthly average of the Composite Yield on
Seasoned Corporate Bonds as published by Moody's Investors Service. The rate
will be calculated two months prior to the Policy's anniversary date, and will
remain in force for the entire Policy Year. If increased at the next Policy
anniversary, the increase will be at least for 1/2%. Where required by state
law, a fixed interest rate will be available at a rate of 8%, unless a
different rate is required under applicable state law. Further, the variable
interest rate will not exceed the maximum interest rate permitted in the
Policy's contract state. Interest is due and payable at the end of each
Policy year or on a pro rata basis for such shorter period as the loan may
exist. Interest not paid when due will be added to the loan amount and bear
interest at the same rate. After the due and unpaid interest is added to loan
amount, if the new loan amount exceeds the Policy Value in the Fixed Account,
C.M. Life will transfer Policy Value equal to that excess loan amount from the
Policy Value in each Sub-Account to the Fixed Account as security for the
excess loan amount. C.M. Life will allocate the amount transferred among the
Sub-Accounts in the same proportion that the Policy Value in each Sub-Account
bears to the total Policy Value in all Sub-Accounts.
PREFERRED LOAN PROVISION - Where permitted by applicable law, a Preferred
Loan Provision is available under the Policy. When available, the Preferred
Loan Provision permits the Policyowner to take loans against the Policy Value
at a rate that is 1 1/2% less than the Loan Interest Rate then in effect for
the Policy. Additionally, we reserve the right to adjust this preferred rate
at each Policy anniversary when the Loan Interest Rate for the coming Policy
year is determined. The maximum Preferred Loan Amount is 10% of the Surrender
Value at the time of the Preferred Loan request. This provision is available
after the tenth Policy year.
REPAYMENT OF POLICY DEBT - Loans may be repaid at any time prior to the lapse
of the Policy. You must notify C.M. Life if a payment is a loan repayment,
otherwise it will be considered a premium payment. Upon repayment of Policy
Debt, the portion of the Policy Value that is in the Fixed Account securing
the Policy Debt repaid will be allocated to the various Sub-Accounts and
increase the Policy Value in such accounts in accordance with your
instructions. If you do not make a repayment allocation, C.M. Life will
allocate Policy Value in accordance with your most recent premium allocation
instructions; provided, however, that loan repayments allocated to the
Separate Account cannot exceed Policy Value previously transferred from the
Separate Account to secure the Policy Debt.
If Policy Debt exceeds the Policy Value, the Policy will terminate. A notice
of such pending termination will be mailed to the last known address of you
and any assignee. If you do not make sufficient payment within 62 days after
this notice is mailed, the Policy will lapse without value.
EFFECT OF POLICY LOANS - Although Policy Loans may be repaid at any time prior
to the lapse of the Policy, Policy Loans will permanently affect the Policy
Value and may permanently affect Proceeds. The effect could be favorable or
unfavorable, depending upon whether the investment performance of the
Sub-Account(s) is less than or greater than the interest credited to the
Policy Value in the Fixed Account attributable to the loan. Moreover,
outstanding Policy loans and the accrued interest will be deducted from the
proceeds payable upon the death of the Insured or Surrender.
POLICY TERMINATION AND REINSTATEMENT
TERMINATION - The failure to make premium payments will not cause the Policy
to lapse unless: (a) the Surrender Value is insufficient to cover the next
Monthly Deduction plus loan interest accrued; or (b) Policy Debt and the
Monthly Deductions currently due exceed the Policy Value; or (c) the Policy
Value is less than zero. If one of these situations occurs, the Policy will
be in default. You will then have a grace period of 62 days, measured from the
date of default, to make sufficient payments to prevent termination. On the
date of default, C.M. Life will send a notice to you and to any assignee of
record. The notice will state the amount of premium due and the date on which
it is due.
Failure to make a sufficient payment within the grace period will cause the
Policy to lapse. If the Insured dies during the grace period, the Proceeds
will still be payable; however, any Monthly Deductions due and unpaid through
the Policy month in which the Insured dies and any other overdue charge will
be deducted from the Proceeds paid to the Beneficiary.
REINSTATEMENT - If the Policy has not been surrendered and the Insured is
alive, the terminated Policy may be reinstated anytime within three years
after the lapse date and before the Maturity Date. The reinstatement will be
effective on the Monthly Payment Date following the date you submit the
following to C.M. Life: (1) a written application for reinstatement; (2)
Evidence of Insurability showing that the Insured is insurable consistent with
C.M. Life's then applicable underwriting rules; and (3) a Net Premium that is
the greater of a Planned Periodic Payment or a net premium sufficient to cover
three monthly deductions at an amount equal to the last Monthly Deduction just
prior to the Policy termination.
POLICY VALUE ON REINSTATEMENT - The Policy Value on the date of reinstatement
is:
. the Net Premium paid to reinstate the Policy increased at an interest
rate determined by C.M. Life, and guaranteed to be no less than 3%
annually, from the date the payment was received at C.M. Life's Service
Center;
. plus an amount equal to the Policy Value less Policy Debt on the date the
Policy terminated;
. less the Monthly Deduction due on the date of reinstatement.
You may not reinstate any Policy Debt outstanding on termination date.
OTHER POLICY PROVISIONS
The following Policy provisions may vary in certain states in order to comply
with requirements of the insurance laws, regulations, and insurance regulatory
agencies in those states.
POLICYOWNER - Generally, the Policyowner named in the application for the
Policy will be a corporation, partnership, trust, or other similar business
entity. Usually the Policyowner will be the Insured's employer. In any case,
the Policyowner must be able to demonstrate the existence of a sufficient
relationship to satisfy applicable insurable interest laws and rules. C.M.
Life will determine whether such relationship exists. In certain states, the
consent of the Insured must be obtained in a form satisfactory to C.M. Life to
satisfy state laws concerning insurable interest rules. C.M. Life reserves
the right to make any final determination in this regard and will take any
action to remain consistent with such rules. The Policyowner is generally
entitled to exercise all rights under a Policy while the Insured is alive,
subject to the consent of any irrevocable Beneficiary (the consent of a
revocable Beneficiary is not required). The consent of the Insured is
required whenever the Specified Amount of insurance is increased.
BENEFICIARY - The Beneficiary is the recipient of the Proceeds upon the
Insured's death. The Beneficiary can be a person or an entity, and there can
be more than one Beneficiary under the Policy. If no Beneficiary is selected,
C.M. Life will designate the Policyowner as the Beneficiary.
INCONTESTABILITY - C.M. Life will not contest the validity of a Policy after
it has been in force during the Insured's lifetime for two years from the date
of issue. C.M. Life will not contest the validity of any increase in the
Specified Amount after such increase or rider has been in force during the
Insured's lifetime for two years from its effective date.
If the Policy is reinstated, the Death Benefit cannot be contested after the
Policy has been in force during the Insured's lifetime for two years from the
date of reinstatement. The Policy can be contested within the two-year period
over statements made in the reinstatement application.
SUICIDE - The Proceeds will not be paid if the Insured commits suicide, while
sane or insane, within two years from the date of issue. Instead, C.M. Life
will pay the Beneficiary an amount equal to all premiums paid for the Policy,
without interest, less any outstanding Policy Debt and less any partial
withdrawals. If the Insured commits suicide, while sane or insane, generally
within two years from the effective date of any increase in the Specified
Amount, C.M. Life's liability with respect to such increase will be limited to
a refund of the cost thereof. The Beneficiary will receive the administrative
charges and insurance charges paid for such increase.
C.M. Life does not assume the risk of suicide of the Insured, while sane or
insane, within two years of the effective date of a reinstatement of the
Policy. Instead of the Proceeds, the Beneficiary will receive the sum of the
premiums paid since reinstatement, less the sum of any outstanding debt and
partial withdrawals made since the date of reinstatement.
AGE- If the Insured's Age as stated in the application for a Policy is not
correct, benefits under a Policy will be adjusted to reflect the correct Age
if death occurs prior to the Maturity Date. The adjusted benefit will be that
which the most recent cost of insurance charge would have purchased for the
correct Age. In no event will the Death Benefit be reduced to less than the
Guideline Minimum Death Benefit.
ASSIGNMENT - The Policyowner may assign a Policy as collateral or make an
absolute assignment of the Policy. All rights under the Policy will be
transferred to the extent of the assignee's interest. The consent of the
assignee may be required in order to make changes in premium allocations, to
make transfers, or to exercise other rights under the Policy. C.M. Life is
not bound by an assignment or release thereof, unless it is in writing and is
recorded at the Service Center. When recorded, the assignment will take
effect as of the date the written request was signed. Any rights created by
the assignment will be subject to any payments made or actions taken by C.M.
Life before the assignment is recorded. C.M. Life is not responsible for
determining the validity of any assignment or release.
POSTPONEMENT OF PAYMENTS - Payments of any amount due from the Separate
Account upon surrender, partial withdrawals, or death of the Insured, as well
as payments of a Policy loan and transfers may be postponed whenever: (i) the
New York Stock Exchange is closed other than customary weekend and holiday
closings, or trading on the New York Stock Exchange is restricted as
determined by the SEC or (ii) an emergency exists, as determined by the SEC,
as a result of which disposal of securities is not reasonably practicable or
it is not reasonably practicable to determine the value of the Separate
Account's net assets. Payments under the Policy of any amounts derived from
the premiums paid by check may be delayed until such time as the check has
cleared your bank.
C.M. Life also reserves the right to defer payment of any amount due from the
Fixed Account upon surrender, partial withdrawal or death of the Insured, as
well as payments of policy loans and transfers from the Fixed Account, for a
period not to exceed six months.
DIRECTORS AND PRINCIPAL OFFICERS OF C.M. LIFE
Emelia Bruno has been Controller of C.M. Life since August 1994. Ms. Bruno
has been Controller of CML since May 1994 and Assistant Vice President of CML
since 1988.
John A. Hubbard is an Actuary for C.M. Life, a position he has held since May,
1987. Mr. Hubbard has been an Actuary with CML since December, 1991. Prior
to that, from March 1990 until December, 1991, Mr. Hubbard served as an
Assistant Actuary for CML.
Ann F. Lomeli has been Corporate Secretary of C.M. Life since 1988. Ms.
Lomeli is Corporate Secretary and Counsel to CML, positions she assumed in
1988.
John H. Loewenberg has been Executive Vice President and Director of C.M. Life
since June 1995. He also has served as Executive Vice President of
Connecticut Mutual since June 1995. From February 1989 to May 1995 he served
as Senior Vice President of Aetna Life & Casualty Co.
J. Brinke Marcuccilli has been Chief Financial Officer of C.M. Life since
August 1994, and has been a Director since June, 1995. He has served in a
similar capacity with CML since May, 1994. Previously, Mr. Marcuccilli was
Vice President/Chief Financial Officer of Providian Corporation, Agency Group
from January 1983 until May 1994.
Scott Peters has been Treasurer of C.M. Life since August 1994. Mr. Peters
serves as Vice President and Treasurer of CML, a position he has held since
February 1994. Previously he was Associate Treasurer from 1992 to 1994, and
Director of Banking Services from 1989 to 1992.
David E. Sams, Jr. has been President and Director of C.M. Life since July
1993. Mr. Sams has been a Director, as well as President and Chief Executive
Officer of CML since 1993. Prior to that, Mr. Sams served as President and
Chief Executive Officer - Agency Group of Capital Holding Corporation (now
Providian Corporation) from 1987 to 1993.
Donald A. Skokan is an actuary for C.M. Life, a position he has held since
February, 1991. Mr. Skokan has been an Actuary with CML since December, 1989.
DISTRIBUTION
Connecticut Mutual Financial Services, LLC ("CMFS"), an affiliate of C.M. Life
and CML, acts as the principal underwriter of the Policies pursuant to an
underwriting agreement among itself, C.M. Life, and the Separate Account.
CMFS is registered with the Securities and Exchange Commission as a
broker-dealer and is a member of the National Association of Securities
Dealers. CMFS will enter into selling group agreements with other broker-
dealers pursuant to which the Policies may be sold. An example of such an
entity is G.R. Phelps, an indirect wholly owned subsidiary of CML.
The Policy will be sold by registered representatives of registered broker-
dealers that have established selling group agreements with CMFS. The
commission payable to the broker-dealer will vary with the individual selling
group agreements. The maximum commission payable to a broker-dealer in the
first Policy Year will be 45% of premium up to the Target Premium for the
Policy, and 10% on premium in excess of the Target Premium. In Policy Years
two through seven, the maximum commission will be 15% up to Target Premium and
10% above Target Premium. In years eight and later, a renewal commission of
up to 0.25% of Policy Value less Policy Debt may be payable.
The commission payable to the registered representative is determined by the
broker-dealer and also varies by the terms of each arrangement. C.M. Life may
also pay overrides, expense allowances, bonuses, and wholesaler fees.
CMFS also does business under the name Connecticut Mutual Financial Services,
L.L.C. in the states of Illinois, Michigan, New Mexico, North Dakota and South
Dakota. In the states of Maine, New Mexico, Ohio and West Virginia it does
business as Connecticut Mutual Financial Services, Limited Liability Company.
In Florida it is known as Connecticut Mutual Financial Services, LLC, L.C.
REPORTS
C.M. Life will maintain the records relating to the Separate Account. You
will be promptly sent statements of significant transactions such as premium
payments, changes in Specified Amount, changes in Death Benefit Option,
transfers among Sub-Accounts and the Fixed Account, partial withdrawals,
increases in loan amount by you, loan repayments, lapse, termination for any
reason, and reinstatement. An annual statement will also be sent to you
within 30 days after a Policy anniversary. The annual statement will
summarize all of the above transactions and deductions of charges during the
Policy year. It will also set forth the status of the Proceeds, Policy Value,
Surrender Value, amounts in the Sub-Accounts and Fixed Account, and any Policy
Loan(s).
In addition, you will be sent periodic reports containing financial statements
and other information for the Separate Account, the C.M. Funds, and the VIP
Funds as required by the 1940 Act.
LEGAL PROCEEDINGS
There are no material legal proceedings pending to which the Separate Account
is a party, or to which the assets of the Separate Account are subject. C.M.
Life currently is not involved in any litigation that is of material
importance in relation to its total assets or that relates to the Separate
Account.
FURTHER INFORMATION
A Registration Statement under the Securities Act of 1933 relating to this
offering has been filed with the SEC. Certain portions of the Registration
Statement and amendments have been omitted from this prospectus pursuant to
the rules and regulations of the Securities and Exchange Commission.
Statements contained in this prospectus concerning the Policy and other legal
documents are summaries. The complete documents and omitted information may
be obtained from the SEC's principal office in Washington, D.C., upon payment
of the SEC's prescribed fees.
INDEPENDENT ACCOUNTANTS
The financial statements of C.M. Life as of December 31, 1994 and 1993 and for
the two years then ended appearing in this prospectus and constituting part of
the Registration Statement, have been audited by Arthur Andersen, LLP,
independent public accountants as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm
as experts in auditing and accounting in giving said reports. Financial
statements of the Separate Account are not included because the Separate
Account did not exist prior to February, 1995.
FEDERAL TAX CONSIDERATIONS
The effect of federal income taxes on the value of a Policy, on loans,
withdrawals, or surrenders, on death benefit payments, and on the economic
benefit to you or the Beneficiary depends upon a variety of factors. The
following discussion is based upon C.M. Life's understanding of the present
federal income tax laws as they are currently interpreted. From time to time
legislation is proposed which, if passed, could significantly, adversely and
possibly retroactively affect the taxation of the Policies. No representation
is made regarding the likelihood of continuation of current federal income tax
laws or of current interpretations by the Internal Revenue Service (IRS).
Moreover, no attempt has been made to consider any applicable state or other
tax laws.
It should be recognized that the following summary of certain federal income
tax considerations relating to a Policy is not exhaustive, does not purport to
cover all situations and is not intended as tax advice. Specifically, the
discussion below does not address certain tax provisions that may be
applicable if the Policyowner is a corporation or the Trustee of an employee
benefit plan. Because of the inherent complexity of federal income tax laws,
and the fact that tax results will vary according to the particular
circumstances of the person or entity involved, a qualified tax adviser should
always be consulted with regard to the application of the tax laws to
individual circumstances.
C.M. LIFE AND THE SEPARATE ACCOUNT - C.M. Life is taxed as a life insurance
company under Part I of Subchapter L of the Internal Revenue Code of 1986 (the
"Code") and it files a consolidated tax return with its affiliates. C.M. Life
does not expect to incur any income tax upon the earnings or realized capital
gains attributable to the Separate Account. Based on these expectations, no
charge is made for federal income taxes which may be attributable to the
Separate Account.
C.M. Life will review periodically the question of a charge to the Separate
Account for federal income taxes. Such a charge may be made in future years
for any federal income taxes incurred by C.M. Life. This might become
necessary if the tax treatment of C.M. Life is ultimately determined to be
other than what C.M. Life believes it to be, if there are changes made in the
federal income tax treatment of variable life insurance at C.M. Life level, or
if there is a change in C.M. Life's tax status. Any such charge would be
designed to cover the federal income taxes attributable to the investment
results of the Separate Account.
Under current laws C.M. Life may also incur state and local taxes (in addition
to premium taxes) in several states. At present these taxes are not
significant. If there is a material change in applicable state or local tax
laws, charges may be made for such taxes paid, or reserves for such taxes,
attributable to the Separate Account.
TAXATION OF THE POLICIES - While C.M. Life believes that the Policy meets the
statutory definition of life insurance, and that it will receive federal
income tax treatment consistent with that of fixed life insurance, the area of
the tax law relating to the definition of life insurance does not explicitly
address all relevant issues (including, for example, the treatment of
substandard risk Policies). C.M. Life reserves the right to make changes to
the Policy if changes are deemed appropriate by C.M. Life to attempt to assure
qualification of the Policy as a life insurance contract. If a Policy were
determined not to qualify as life insurance, the Policy would not provide the
tax advantages normally provided by life insurance. The discussion below
summarizes the tax treatment of life insurance contracts.
The death benefit under a Policy should be excludable from the gross income of
the Beneficiary (whether the Beneficiary is a corporation, individual or other
entity) under Code section 101(a)(1) for purposes of the regular federal
income tax and the Policyowner generally should not be deemed to be in
constructive receipt of the Policy Value, including increments thereof, under
the Policy until Surrender thereof, maturity of the Policy, or partial
withdrawal. However, certain Policy loans may be taxable in the case of
Policies that are modified endowment contracts. Prospective Policyowners that
intend to use Policies to fund deferred compensation arrangements for their
employees are urged to consult their tax advisers with respect to the tax
consequences of such arrangements. Prospective corporate owners should
consult their tax advisers about the treatment of life insurance in their
particular circumstances for purposes of the alternative minimum tax
applicable to corporations and the environmental tax under Code section 59A
(for these purposes, the death benefit and increases in Policy Value may be
taxable). Changing the Policyowner may also have tax consequences.
Exchanging a Policy for another involving the same Insured generally will not
result in the recognition of gain or loss according to Code section 1035(a).
Changing the Insured under a Policy will, however, not be treated as a tax-
free exchange under Section 1035, but rather as a taxable exchange.
The Code also requires that the investment of each Sub-Account be adequately
diversified in accordance with Treasury regulations in order to be treated as
a life insurance policy for tax purposes. The Sub-Accounts through the Funds,
intend to comply with this diversification requirement. Although C.M. Life
does not have control over the investments of the Funds, C.M. Life will
monitor continued compliance with these requirements.
In certain circumstances, owners of variable life insurance policies may be
considered the owners, for federal income tax purposes, of the assets of the
separate account used to support their policies. In those circumstances,
income and gains from the separate account assets would be includible in the
variable policyowner's gross income. The IRS has stated in published rulings
that a variable policyowner will be considered the owner of separate account
assets if the owner possesses incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department also announced, in connection with the issuance of regulations
concerning diversification, that those regulations "do not provide guidance
concerning the circumstances in which Investor control of the investments of a
segregated asset account may cause the investor (i.e., the Policyowner),
rather than the insurance company, to be treated as the owner of the assets in
the account." This announcement also stated that guidance would be issued by
way of regulations or rulings on the "extent to which policyholders may direct
their investments to particular subaccounts without being treated as owners of
the underlying assets." As of the date of this prospectus, no such guidance
has been issued.
The ownership rights under the Policy are similar to, but different in certain
respects from, those described by the IRS in rulings in which it was
determined that policyowners were not owners of separate account assets. For
example, the Policyowner has additional flexibility in allocating premium
payments and Policy Values. These differences could result in a Policyowner
being treated as the owner of a pro rata portion of the assets of the Separate
Account. In addition, C.M. Life does not know what standards will be set
forth, if any, in the regulations or rulings which the Treasury Department has
stated it expects to issue. C.M. Life therefore reserves the right to modify
the Policy, or C.M. Life's administrative rules, as deemed appropriate by C.M.
Life, to attempt to prevent a Policyowner from being considered the owner of a
pro rata share of the assets of the Separate Account. Moreover, in the event
that regulations or rulings are adopted, there can be no assurance that a Fund
will be able to operate as currently described in its prospectus, or that a
Fund will not have to change its investment objective or investment policies.
The Technical and Miscellaneous Revenue Act of 1988 established a new class of
life insurance contracts referred to as modified endowment contracts. With
the enactment of this legislation, the Policies will be treated for tax
purposes in one of two ways. Policies that are not classified as modified
endowment contracts will be taxed as conventional life insurance contracts, as
described below. Taxation of pre-death distributions from Policies that are
classified as modified endowment contracts, is somewhat different, as
described below.
A life insurance contract becomes a modified endowment contract if, at any
time during the first seven Policy years, the sum of actual premiums paid
exceeds the sum of the "seven-pay premium." Generally, the "seven-pay
premium" is the level annual premium, such that if paid for each of the first
seven years, will fully pay for future benefits under a contract. For
example, if the "seven-pay premium" was $1,000, the maximum premiums that
could be paid during the first seven years to avoid modified endowment
contract treatment would be $1,000 in the first year, $2,000 through the first
two years, and $3,000 through the first three years, etc. Under this test, a
Policy may or may not be a modified endowment contract, depending on the
amount of premium paid during each of the Policy's first seven contract years.
Changes in death benefit options under, or in other terms of a Policy may
require "retesting" of a Policy to determine if it is to be classified as a
modified endowment contract.
CONVENTIONAL LIFE INSURANCE POLICIES - If a Policy is not a modified endowment
contract, upon surrender or at the Maturity Date of a Policy for its Surrender
Value, the excess, if any, of the Surrender Value plus any outstanding Policy
Debt over the cost basis under a Policy will be treated as ordinary income for
federal income tax purposes. Such a Policy's cost basis will usually equal
the premiums paid less any premiums previously recovered in partial
withdrawals. If a partial withdrawal occurring within 15 years of the Policy
date is accompanied by a reduction in benefits under the Policy, special rules
apply to determine whether part or all of the cash received is paid out of the
income of the Policy and is taxable. Cash distributed to a Policyowner on
partial withdrawals occurring more than 15 years after the Policy date will be
taxable as ordinary income to the Policyowner to the extent that it exceeds
the cost basis under a Policy.
Loans received under Policies that are not modified endowment contracts should
be treated as indebtedness of the Policyowner, and no part of any Policy Loan
will constitute income to the Policyowner unless the Policy is surrendered or
the Policy matures. Interest on a loan under a Policy that is not a modified
endowment contract may be deductible, subject to several limitations,
depending on the use to which the Loan proceeds are put and the tax rules
applicable to the Policyowner. If, for example, the loan proceeds are used by
an individual for business or investment purposes, all or part of the interest
expense may be deductible. Generally, if the Policy loan is used for personal
purposes by an individual, the interest expense is not deductible. The
deductibility of loan interest (whether incurred under a Policy loan or on
other indebtedness) also may be subject to other limitations. For example,
where the interest is incurred on a loan under a Policy covering the life of
an officer, employee, or person financially interested in the trade of
business of the Policyowner, the interest may be deductible to the extent that
the interest is attributable to the first $50,000 of the Policy loan. Other
tax law provisions may limit the deduction of interest payable on loan
proceeds that are used to purchase or carry a life insurance policy.
MODIFIED ENDOWMENT CONTRACTS - Pre-death distributions from modified endowment
contracts may give rise to taxable income. Upon full surrender or maturity of
the Policy, the Policyowner will recognize ordinary income for federal income
tax purposes equal to the amount by which the Surrender Value plus the Policy
Debt exceeds the investment in the Policy (usually the premiums paid plus
certain pre-death distributions that were taxable less any premiums previously
recovered that were excludable from gross income). Upon partial withdrawals
and Policy loans, the Policyowner will recognized ordinary income to the
extent allocable to income (which includes all previously non-taxed gains) on
the Policy. The amount allocated to income is the amount by which the Policy
Value exceeds investment in the Policy immediately before the distribution. If
two or more Policies which are classified as modified endowment contracts are
purchased from any one insurance company during any calendar year, all such
Policies will be aggregated for purposes of determining the portion of the
pre-death distribution allocable to income on the Policies and the portion
allocable to investment in the Policies.
Amounts received under a modified endowment contract that are included in
gross income are subject to an additional tax equal to 10% of the amount
included in gross income, unless an exception applies. The 10% additional tax
does not apply to any amount received: (i) when the taxpayer is at least 59
1/2 years old; (ii) which is attributable to the taxpayer becoming disabled;
or (iii) which is part of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the taxpayer of the joint lives (or joint life expectancies) of the taxpayer
and his or her beneficiary.
If a Policy was not originally a modified endowment contract but becomes one,
under Treasury Department regulations which are yet to be prescribed, pre-
death distributions received in anticipation of a failure of a Policy to meet
the seven-pay premium test are to be treated as pre-death distributions from a
modified endowment contract (and, therefore, are to be taxable as described
above) even though, at the time of the distribution(s) the Policy was not yet
a modified endowment contract. For this purpose, pursuant to the Code, any
distribution made within two years before the Policy is classified as a
modified endowment contract shall be treated as being made in anticipation of
the Policy's failing to meet the seven-pay premium test.
It is unclear whether interest on a Policy loan with respect to a modified
endowment contract constitutes interest for federal income tax purposes. If
it does constitute interest, it may be deductible, subject to several
limitations, depending on the use to which the loan proceeds are put and the
tax rules applicable to the Policyowner. If, for example, the loan proceeds
are used by an individual for business or investment purposes, all or part of
the interest expense may be deductible. Generally, if the Policy loan is used
for personal purposes by an individual, the interest expense is not
deductible. The deductibility of loan interest (whether incurred under a
Policy loan or on other indebtedness) also may be subject to other
limitations. For example, where the interest is incurred on a loan under a
Policy covering the life of an officer, employee, or person financially
interested in the trade of business of the Policyowner, the interest may be
deductible to the extent that the interest is attributable to the first
$50,000 of the Policy loan. Other tax law provisions may limit the deduction
of interest payable on loan proceeds that are used to purchase or carry a life
insurance policy.
REASONABLENESS REQUIREMENT FOR CHARGES - Another provision of the tax law
deals with allowable charges for mortality costs and other expenses that are
used in making calculations to determine whether a contract qualifies as life
insurance for federal income tax purposes. These calculations must be based
upon: (i) mortality charges that meet the reasonable mortality charge
requirements set forth in the Code, and (ii) other charges reasonably expected
to be actually paid. The Treasury Department is expected to promulgate
regulations governing reasonableness standards for mortality and other
charges. The area of the law relating to reasonableness standards for
mortality and other charges is currently based on statutory language and IRS
pronouncements which do not explicitly address all relevant issues.
Accordingly, while C.M. Life believes that the mortality costs and other
expenses used in making calculations to determine whether the Policy qualifies
as life insurance meet the current standards, it cannot offer complete
assurance since the law in this area is not fully developed. It is possible
that future regulations will contain standards that would require C.M. Life to
modify its mortality and other charges used for the purposes of the
calculations in order to retain the qualification of the Policy as life
insurance for federal income tax purposes, and C.M. Life reserves the right to
make any such modifications.
OTHER - Federal estate and gift and state and local estate, inheritance and
other tax consequences of ownership or receipt of Policy proceeds depend on
the jurisdiction and the circumstances of each Policyowner or Beneficiary.
For complete information on federal, state, local and other tax
considerations, a qualified tax adviser should be consulted.
C.M. LIFE DOES NOT MAKE ANY GUARANTEE REGARDING THE TAX STATUS OF ANY POLICY.
MORE INFORMATION ABOUT THE FIXED ACCOUNT
As discussed earlier, you may allocate Net Premiums and transfer Policy Value
to the Fixed Account. Because of exemption and exclusionary provisions in the
securities law, any amount in the Fixed Account is not generally subject to
regulation under the provisions of the Securities Act of 1933 or the 1940 Act.
Accordingly, the disclosures in this Section have not been reviewed by the
SEC. Disclosures regarding the fixed portion of the Policy and the Fixed
Account may, however, be subject to certain generally applicable provisions of
the Federal securities laws concerning the accuracy and completeness of
statements made in prospectuses.
GENERAL DESCRIPTION - Allocations to the Fixed Account for this Policy are
invested in the General Account of C.M. Life. The General Account of C.M.
Life is made up of all of the general assets of C.M. Life other than those
allocated to any separate account. Allocations to the General Account become
part of the assets of C.M. Life and are used to support insurance and annuity
obligations. Subject to applicable law, C.M. Life has sole discretion over
the investment of assets of the General Account.
A portion or all of Net Premiums may be allocated or transferred to accumulate
at a fixed rate of interest in the Fixed Account. Such net amounts are
guaranteed by C.M. Life as to principal and a minimum rate of interest. The
allocation or transfer of funds to the Fixed Account does not entitle you to
share in the investment experience of the General Account.
FIXED ACCOUNT VALUE - C.M. Life bears the full investment risk for amounts
allocated to the Fixed Account and guarantees that interest credited to each
Policyowner's Policy Value in the General Account will not be less than an
annual rate of 3% prior to issuance of the Policy and 4% thereafter
("Guaranteed Minimum Rate").
C.M. Life may, AT ITS SOLE DISCRETION, credit a higher rate of interest
("excess interest"), although it is not obligated to credit interest in excess
of the Guaranteed Minimum Rate per year, and might not do so. However, the
excess interest rate, if any, in effect on the date a premium is received at
the Service Center is guaranteed on that premium for one year, unless the
Policy Value associated with the premium becomes security for a Policy loan.
AFTER SUCH INITIAL ONE YEAR GUARANTEE OF INTEREST ON NET PREMIUM, ANY INTEREST
CREDITED ON THE POLICY'S ACCUMULATED VALUE IN THE FIXED ACCOUNT IN EXCESS OF
THE GUARANTEED MINIMUM RATE PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION
OF C.M. LIFE. THE POLICYOWNER ASSUMES THE RISK THAT INTEREST CREDITED MAY NOT
EXCEED THE GUARANTEED MINIMUM RATE.
Even if excess interest is credited to accumulated value in the Fixed Account,
no excess interest will be credited to that portion of the Policy Value which
is equal to Policy Debt. However, such Policy Value will be credited interest
at an effective annual yield of at least a rate equal to the Loan Interest
Rate less 1.5% (unless another rate is required by applicable law).
C.M. Life guarantees that, on each Monthly Payment Date after issuance and
acceptance of the Policy, the Policy Value in the Fixed Account will be the
amount of the Net Premiums allocated or Policy Value transferred to the Fixed
Account, plus interest at an annual rate of 4% per year, plus any excess
interest which C.M. Life credits, less the sum of all Policy charges allocable
to the Fixed Account and any amounts deducted from the Fixed Account in
connection with loans, partial withdrawals, surrenders or transfers.
Transfers, surrenders, partial withdrawals, Proceeds and Policy loans payable
from the General Account may be delayed up to six months. However, if payment
is delayed for 30 days (state variations may exist) or more, C.M. Life will
pay interest at least equal to an effective annual yield of 3% per year for
the period of deferment. Amounts from the General Account used to pay
premiums on Policies with C.M. Life will not be delayed.
THE POLICY - This prospectus describes a flexible premium variable life
insurance policy and is generally intended to serve as a disclosure document
only for the aspects of the Policy relating to the Separate Account. For
complete details regarding the Fixed Account, see the Policy itself.
ERISA COMPLIANCE
The use of the Policy in an employer-sponsored program may result in the
application of all or portions of the Employee Retirement Income Security Act
of 1974 (as amended) ("ERISA"). If ERISA applies, the employer may be subject
to government and participant disclosure, filing, fiduciary and other
requirements.
The Policyowner is encouraged to consult with counsel on these matters, as
neither C.M. Life nor any of its representatives are authorized to make
representations concerning whether ERISA applies to the intended use of a
Policy.
<PAGE>
FINANCIAL STATEMENTS
Financial Statements for C.M. Life are included in this prospectus beginning
immediately after this section. The financial statements of C.M. Life should
be considered only as bearing on the ability of C.M. Life to meet its
obligations under the Policy. They should not be considered as bearing on the
investment performance of the assets held in the Separate Account. Included
are audited financial statements for the period ended December 31, 1994. Also
included are unaudited interim financial statements for the period ended March
31, 1995.* Financial Statements for the Separate Account are not included
since the Separate Account had no assets prior to the effective date of this
Prospectus.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To C.M. Life Insurance Company:
We have audited the accompanying balance sheets of C.M. Life Insurance Company
(a Connecticut corporation and a wholly owned subsidiary of Connecticut Mutual
Life Insurance Company) as of December 31, 1994 and 1993, and the related
statements of operations, stockholder's equity and cash flows for each of the
three years in the period ended December 31, 1994. These financial statements
and the schedules referred to below are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of C.M. Life Insurance Company as
of December 31, 1994 and 1993, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedules I and VI are presented for
purposes of complying with the Securities and Exchange Commission's rules and
are not part of the basic financial statements. These schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, fairly state in all material respects
the financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.
Arthur Andersen LLP
Hartford, Connecticut
February 15, 1995
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
C.M. Life Insurance Company
Balance Sheets
As of December 31, 1994 and 1993
C.M. Life Insurance Company
Statements of Operations
For the Years Ended December 31, 1994, 1993 and 1992
C.M. Life Insurance Company
Statements of Stockholder's Equity
For the Years Ended December 31, 1994, 1993 and 1992
C.M. Life Insurance Company
Statements of Cash Flows
For the Years Ended December 31, 1994, 1993 and 1992
C.M. Life Insurance Company
Notes to Financial Statements
December 31, 1994, 1993 and 1992
C.M. Life Insurance Company
Summary of Investments - Other than Investments in Related Parties
As of December 31, 1994 (Schedule I)
C.M. Life Insurance Company
Reinsurance
For the Years Ended December 31, 1994, 1993 and 1992 (Schedule VI)
<PAGE>
<TABLE>
C.M. LIFE INSURANCE COMPANY
BALANCE SHEETS
AS OF DECEMBER 31, 1994 AND 1993
($ IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> 1994 1993
---- ----
ASSETS: <C> <C>
Investments:
Fixed maturities at cost (fair value;
$684,213 in 1994 and $647,980 in 1993) $717,291 $627,110
Equity securities at cost (fair value;
$2,065 in 1994 and $2,095 in 1993) 1,815 1,815
Mortgage loans on real estate at net
realizable value 42,038 65,788
Real estate at cost 1,897 5,362
Policy loans at outstanding balance 109,720 98,215
Cash and cash equivalents 3,025 5,589
------- -------
Total investments 875,786 803,879
------- -------
Accrued investment income 14,023 13,215
Accounts receivable 5,330 4,317
Amounts due from reinsurers 1,162 1,229
Other assets 2,318 1,709
Assets of Separate Account 309,672 145,661
---------- ---------
TOTAL ASSETS $1,208,291 $970,010
---------- --------
LIABILITIES AND STOCKHOLDER'S EQUITY:
Liabilities:
Future policy benefits $751,808 $698,779
Policy claims and benefits currently
payable 1,772 1,758
Indebtedness to related parties 6,965 11,485
Federal income tax payable 2,446 441
Asset valuation reserve 6,640 6,534
Other liabilities 7,906 8,582
Other deposits 31,690 15,992
Transfers due from Separate Account (14,445) (7,120)
Liabilities of Separate Account 309,672 145,661
--------- -------
TOTAL LIABILITIES 1,104,454 882,112
--------- -------
STOCKHOLDER'S EQUITY:
Common stock, $200 par value - 50,000
shares authorized, 12,500 shares
issued and outstanding 2,500 2,500
Additional paid-in capital 43,759 43,759
Retained earnings 57,578 41,639
---------- --------
TOTAL STOCKHOLDER'S EQUITY 103,837 87,898
---------- --------
TOTAL LIABILITIES AND STOCKHOLDER'S $1,208,291 $970,010
========== ========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
C.M. LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
($ IN THOUSANDS)
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
REVENUES:
Premiums and annuity considerations $111,238 $108,097 $117,785
Less: reinsurance ceded (54,032) (56,905) (60,830)
-------- -------- --------
Net premiums and annuity considerations 57,206 51,192 56,955
Net investment income 59,887 57,460 56,666
Net realized capital gains (losses) on
investments (2,533) 459 (380)
Other income 984 363 20
------- ------- -------
TOTAL REVENUES 115,544 109,474 113,261
BENEFITS, LOSSES AND EXPENSES:
Benefits, claims and settlement expenses 101,243 98,700 111,843
Acquisition and insurance expenses 24,630 25,436 31,736
Other expenses 4,199 3,004 3,633
Less: reinsurance benefits and expenses
ceded
(45,804) (50,001) (54,537)
-------- -------- --------
TOTAL BENEFITS, LOSSES AND EXPENSES 84,268 77,139 92,675
------ ------ ------
INCOME BEFORE FEDERAL INCOME TAX
EXPENSE 31,276 32,335 20,586
FEDERAL INCOME TAX EXPENSE 13,488 11,241 9,055
------ ------ -----
NET INCOME $17,788 $21,094 $11,531
======= ======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
C.M. LIFE INSURANCE COMPANY
STATEMENTS OF STOCKHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
($ IN THOUSANDS)
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Common Stock $ 2,500 $ 2,500 $ 2,500
Additional Paid-in Capital 43,759 43,759 43,759
Retained Earnings
Balance, beginning of year 41,639 21,163 10,155
Net income 17,788 21,094 11,531
Change in asset valuation reserve (106) (1,313) 877
Change in nonadmitted assets (1,761) 675 (1,004)
Net unrealized capital gain (loss) 18 84 (1,514)
Other - (64) 1,118
------ ------ ------
Balance, end of year 57,578 41,639 21,163
------ ------ ------
TOTAL STOCKHOLDER'S EQUITY $103,837 $87,898 $67,422
======== ======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
C.M. LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
($ IN THOUSANDS)
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
CASH PROVIDED:
Premiums and annuity considerations, net
of reinsurance $56,346 $49,530 $57,180
Other deposits 193,970 129,030 25,149
Net investment income 60,886 58,728 56,147
Commission and expense allowance and
reserve adjustment on reinsurance ceded 22,484 29,576 35,794
Other - 2,106 4,983
------- ------- -------
333,686 268,970 179,253
------- ------- -------
Benefits and interest to policyholders
and beneficiaries, net of reinsurance (43,808) (28,973) (38,391)
Acquisition and insurance expenses, net
of reinsurance (25,934) (28,619) (35,926)
Transfers to Separate Account (168,913) (114,917) (21,605)
Federal income taxes paid (10,076) (11,579) (12,290)
Other payments, net (15,132) (17,903) (5,284)
-------- -------- -------
(263,863) (201,991) (113,496)
--------- --------- ---------
Net cash provided by operations 69,823 66,979 65,757
Proceeds from the disposition of fixed
maturities and mortgage loans on real
estate 249,038 348,263 199,831
Other cash provided - 855 5,725
------- ------- -------
Total cash provided 318,861 416,097 271,313
------- ------- -------
CASH APPLIED:
Purchases of fixed maturities 320,272 408,017 274,590
Purchase of equity securities - 296 2,330
Other applications 1,153 3,974 1,601
----- ----- -----
Total cash applied 321,425 412,287 278,521
------- ------- -------
Net increase (decrease) in cash and cash
equivalents (2,564) 3,810 (7,208)
CASH AND CASH EQUIVALENTS:
Beginning of year 5,589 1,779 8,987
----- ----- -----
End of year $3,025 $5,589 $1,779
====== ====== ======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
C.M. LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1993 AND 1992
($ IN THOUSANDS)
1. Organization:
------------
C.M. Life Insurance Company (C.M. Life) is a wholly owned stock life insurance
subsidiary of Connecticut Mutual Life Insurance Company (Connecticut Mutual).
2. Summary of Significant Accounting Policies:
------------------------------------------
C.M. Life's financial statements have been prepared in conformity with
accounting practices and procedures of the National Association of Insurance
Commissioners (NAIC) as prescribed or permitted by the Insurance Department of
the State of Connecticut, which are considered to be generally accepted
accounting principles for wholly owned stock life insurance subsidiaries of
mutual life insurance companies. (see Note 2.h.).
The principal accounting practices currently followed by C.M. Life are as
follows:
a. Assets - Assets are stated at amounts reported to state regulatory
authorities. Certain assets, such as prepaid agent commissions and
other prepaid expenses, are excluded from the balance sheet and amounted
to $2,684 and $923 as of December 31, 1994 and 1993.
b. Investments - Investments are valued in accordance with procedures
prescribed by the NAIC. Fixed maturities eligible for amortization are
reported at amortized cost. Equity securities of preferred stock are
reported at cost. Mortgage loans on real estate are reported at the
unpaid principal balance unless delinquent, at which time they are
reported at the lower of the unpaid balance or fair value. Investments
in real estate which have been identified for sale within the next
twelve months are reported at the lower of cost, less accumulated
depreciation of $187 and $124 at December 31, 1994 and 1993,
respectively, or market value. Investments for real estate which have
been identified as held for investment are reported at the lower of
cost, less accumulated depreciation of $0 and $466 at December 31, 1994
and 1993, respectively, or market value. The Company calculates
depreciation for its real estate investments using principally the
straight line method. Policy loans are reported at the aggregate amount
of the unpaid balances. Short-term investments are reported at
amortized cost, which approximates fair value.
The Company maintains an Interest Maintenance Reserve (IMR) for all
fixed income investments and establishes a liability/asset to defer all
interest rate related realized capital gains and losses, net of taxes,
as they occur. The deferral is subsequently amortized to net investment
income over the period remaining to maturity of the assets sold. All
other realized gains and losses are reported in the Statements of
Operations upon sale. Unrealized capital gains and losses are reported
as additions to or reductions from equity.
The Asset Valuation Reserve (AVR), prescribed by the NAIC, provides for
possible decline in the value of bonds, stocks, mortgage loans, real
estate and other invested assets. This reserve contains different
components, each designed to address specific asset risks. Changes in
the AVR are charged or credited directly to equity. The AVR increased
by $106 and $1,313 in 1994 and 1993, respectively.
Investments which exceeded 10% of total stockholder's equity are as
follows:
<TABLE>
<S> 1994 1993
---- ----
Mortgage loans on real estate: <C> <C>
J.L. Associates LTD PTR None $15,200
</TABLE>
<PAGE>
The Company uses derivative instruments (as defined in FAS No. 119)
which include options and futures, to hedge equity exposure and to
hedge reinvestment of proceeds from major anticipated transactions.
During 1994 interest rate futures were acquired to hedge the
reinvestment of anticipated proceeds from a bulk mortgage sale. The
actual gain of $95 was amortized over the expected term of the assets
acquired with the mortgage sale proceeds. During 1993 no futures and
options were utilized to hedge equity exposures.
There were no fixed maturities greater than 10% of stockholder's equity
as of December 31, 1994 and 1993.
C.M. Life has loans overdue more than 12 months as follows:
1994 1993
---- ----
Defaults on mortgages: (non-income
producing for 12 months) $2,77 None
c. Disclosure of the Fair Value of Financial Instruments - Fair value is
defined as "the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or
liquidation sale." (Fair value estimates, methods and significant
assumptions are disclosed in the relevant footnotes.)
d. Reserves for Payment of Future Benefits: Reserves for payment of future
benefits on life insurance, developed by accepted actuarial methods, are
established and maintained primarily on the Commissioners' Reserve
Valuation Method utilizing the 1980 Commissioners' Standard Ordinary
Mortality Table with interest rates of 4%-4 1/2%. Reserves for single
premium deferred annuities are calculated based on the Commissioners'
Annuity Reserve Valuation Method utilizing the change in fund method and
assuming interest on changes in funds of 7.0%, 7.5% and 8.25% in 1994,
1993, and 1992 respectively. Additional reserves are maintained for
contracts where the cash surrender value exceeds the actuarially
determined reserve.
e. Separate Accounts: Separate accounts include the assets and
liabilities of certain annuity contracts that must be segregated from
C.M. Life's general assets under the terms of the contracts. The assets
consist primarily of marketable securities reported at market value.
Reserves for these annuity contracts have been established using assumed
interest rates and valuation methods that will provide reserves at least
as great as those required by law and contract provisions. Transfers
due from Separate Account, a contra-liability, represents Separate
Account liabilities in excess of Separate Account reserves.
f. Premiums and Insurance Operating Expenses: Premiums are reported as
income when due. Commissions and other costs relating to the
solicitation, underwriting and issuance of new contracts are reported as
acquisition and insurance expenses in the year incurred.
g. Cash Equivalents: For purposes of the Statements of Cash Flows, C.M.
Life considers all highly liquid short-term investments with a maturity
of three months or less from the date of purchase to be cash
equivalents. The carrying amounts reported approximate those assets'
fair value.
h. New Accounting Pronouncements: The Financial Accounting Standards Board
(FASB) has issued an interpretation declaring that financial statements
of mutual life insurance companies, and their wholly owned subsidiaries,
which are prepared on the basis of statutory accounting principles, will
no longer be considered to be in conformity with GAAP. This
interpretation applies to financial statements issued for fiscal years
beginning after December 15, 1995. Certain accounting principles for
mutual life insurance companies, which will be required to be in
compliance with GAAP, were also issued by the FASB and the American
Institute of Certified Public Accountants in January 1995. The
financial statement impact of adopting these accounting principles has
not been determined by the Company. The effect of initially adopting
the FASB interpretation shall be reported retroactively through
restatement of all previously issued financial statements presented for
comparative purposes for fiscal years beginning after December 15, 1992.
<PAGE>
Financial Accounting Standard (FAS) No. 120, Accounting and Reporting by
Mutual Life Insurance Enterprises and by Insurance Enterprises for
Certain Long-Duration Participating Contracts, which was issued in
January 1995 extends the requirements of FASB statements Nos. 60
(Accounting and Reporting by Insurance Enterprises), 97 (Accounting and
Reporting by Insurance Enterprises for Certain Long-Duration Contracts
and For Realized Gains and Losses From the Sale of Investments) and 113
(Accounting and Reporting for Reinsurance of Short-Duration and Long-
Duration Contracts) to C.M. Life.
The impact of adopting these accounting standards on C.M. Life's
financial position or results of operations is not known or reasonably
estimable at this time.
i. Reclassifications: The 1993 and 1992 financial statements and Notes to
Financial Statements reflect certain reclassifications to conform with
the 1994 presentation.
3. Federal Income Taxes:
--------------------
C.M. Life is included in Connecticut Mutual's consolidated Federal income tax
return and, in accordance with a written tax-sharing agreement, makes a
provision for payment to Connecticut Mutual based on its income included in
Connecticut Mutual's consolidated taxable income. This provision is based on
income which is currently taxable.
4. Stockholder's Equity:
--------------------
The Board of Directors of Connecticut Mutual has authorized the contribution
of funds to C.M. Life sufficient to meet the capital requirements of all
states in which C.M. Life is licensed to do business. Substantially all of
the statutory stockholder's equity is subject to dividend restrictions
relating to various state regulations which limit the payment of dividends
without prior approval.
5. Reinsurance:
-----------
C.M. Life reinsures (cedes) a portion of its life insurance business to
Connecticut Mutual and other insurers, in order to reduce insurance risk.
C.M. life's retention limit per individual insured is $4 million; the portion
of the risk exceeding the retention limit is reinsured with other insurers.
The reinsurance contract with Connecticut Mutual is a modified coinsurance
quota-share treaty. Under the treaty C.M. Life cedes 50% of the premiums on
universal life policies issued in 1985 and 75% of the premiums with issue
dates on or after January 1, 1986. In return Connecticut Mutual pays C.M.
Life a stipulated expense allowance, death and surrender benefits, and a
modified coinsurance adjustment. Reserves for payment of future benefits for
the ceded policies are retained by C.M. Life.
C.M. Life also has a stop-loss agreement with Connecticut Mutual under which
C.M. Life cedes claims which, in aggregate, exceed $18,348 in 1994, $16,431 in
1993 and $16,443 in 1992. In 1994, 1993, and 1992, the limit was not
exceeded. The agreement was amended and renewed in 1994 for a duration of
three years. The amended maximum coverage is $25,000. C.M. Life paid
approximately $435, $446 and $478 in premiums under the agreement in 1994,
1993 and 1992, respectively.
C.M. Life is contingently liable with respect to ceded reinsurance in the
event any reinsurer is unable to fulfill its contractual obligations.
<PAGE>
6. Investments:
-----------
Fixed maturities:
----------------
The carrying value and estimated fair value of investments in fixed maturities
as of December 31, 1994 and 1993 are as follows:
<TABLE>
<S>
1994 Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
<C> <C> <C> <C>
U.S. Government $62,501 $ - $ 1,874 $60,627
Special Revenue and
Special Assessment
Obligations and all
Non-guaranteed Obli-
gations of Government
Agencies, Authorities,
and Subdivisions 4,373 - 375 3,998
Foreign Government,
Province & Municipal 16,175 117 904 15,388
Public Utility 38,773 227 1,605 37,395
Mortgage Backed
Obligations 167,641 533 12,184 155,990
Industrial and
Miscellaneous 427,828 967 17,980 410,815
--------- ----------------------- -----------
Total Fixed Maturities $717,291 $1,844 $34,922 $684,213
========= ======================= ==========
1993 Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
U.S. Government $ 24,015 $ 906 $ - $ 24,921
Special Revenue and
Special Assessment
Obligations and all
Non-guaranteed Obli-
gations of Government
Agencies, Authorities,
and Subdivisions 5,000 - - 5,000
Foreign Government,
Province & Municipal 23,511 620 529 23,602
Public Utility 34,162 1,577 99 35,640
Mortgage Backed
Obligations 135,309 3,505 706 138,107
Industrial and
Miscellaneous 405,113 16,477 881 420,710
--------- ----------------------- -----------
Total Fixed Maturities $627,110 $23,085 $2,215 $647,980
========= ======================= ==========
</TABLE>
AGE>
The carrying value and estimated fair value of C.M. Life's fixed maturities at
December 31, 1994, by contractual maturity, are shown below. Expected
maturities may differ from contractual maturities because borrowers may have
the right to prepay obligations with or without prepayment penalties.
<TABLE>
Estimated
Carrying Fair
Value Value
----- -----
<S> <C> <C>
Due in one year or less $ 26,429 $ 26,509
Due after one year through five years 339,561 328,984
Due after five years through ten years 176,968 166,335
Due after ten years 6,692 6,395
Mortgage-backed securities 167,641 155,990
----------- ---------
Total $717,291 $684,213
=========== =========
TABLE>
Proceeds from sales of fixed maturities were $224,884, $334,801 and $182,572
for 1994, 1993 and 1992, respectively. Gross gains of $1,358, $5,931 and
$1,444 and gross losses of $4,439, $1,016 and $3,650 were realized on those
sales for 1994, 1993 and 1992, respectively.
The estimated fair value for the public bonds is based on the quoted market
price from various external bond pricing services. Private bonds are assigned
an internal quality rating which parallels independent rating agency criteria
and is consistent with NAIC ratings. The fair value of these bonds is
estimated by discounting the expected future cash flows using a current
discount rate based on the quality rating and maturity of the specific
instruments.
Equity Securities:
------------------
Equity securities consist solely of preferred stock which is reported at cost,
the estimated fair value of which is $2,065 and $2,095 as of December 31, 1994
and 1993, respectively. The estimated fair value for the equity securities is
based on quoted market prices from national securities exchanges and over-the-
counter markets.
Mortgage Loans on Real Estate:
-----------------------------
The following table provides a breakdown of the carrying value of mortgage
loans on real estate by geographical location:
</TABLE>
<TABLE>
1994 1993
---- ----
<S> <C> <C>
United States
Northeast $22,111 $ 23,425
South Atlantic 13,090 16,615
North Central - 18,784
South Central 3,462 3,498
West 3,375 3,466
------------ ------------
Total $42,038 $ 65,788
============ ============
</TABLE>
Outstanding mortgages whose terms have been modified aggregated $24,034 and
$26,196 which represents 57.2% and 39.8% of the total portfolio as of December
31, 1994 and 1993, respectively. Income recognized during 1994, 1993 and 1992
on these restructured loans was $1,379, $1,495 and $1,018, respectively.
Income that would have been recognized during 1994, 1993 and 1992 on these
loans, if such loans had been current in accordance with their original terms
and had been outstanding throughout the year, was $2,296, $2,568 and $1,851,
respectively.
C.M. Life has loans either overdue more than three months or in the process of
foreclosure of $2,774 and $43 at December 31, 1994 and 1993, respectively.
Additionally, C.M. Life has properties which it acquired in satisfaction of
debt of $1,897 and $5,362 at December 31, 1994 and 1993, respectively.
<PAGE>
The estimated fair value for mortgages was $40,241 and $64,528 at December 31,
1994 and 1993, respectively. The value for performing mortgages is determined
by discounting the expected future cash flows using the current interest rates
at which similar loans would be made to borrowers with similar credit ratings
and remaining maturities. The non-performing mortgages are valued based on a
discounted cash flow analysis on the underlying collateral using the current
market rate for similar collateral.
7. Policy loans:
------------
Policy loans are issued with either fixed or variable interest rates,
depending upon the terms of the policies. For those loans with fixed interest
rates, the interest rates range from 5% to 8%. Since policy loans do not have
defined maturities, management believes it is not practicable to estimate the
fair value of fixed policy loans. For loans with variable interest rates, the
rates are adjusted annually based upon changes in a corporate bond index and
are stated at fair value.
The carrying value of policy loans as of December 31, 1994 and 1993 is as
follows:
<TABLE>
1994 1993
---- ----
<S> <C> <C>
Fixed $ 1,639 $ 1,603
Variable 108,081 96,612
------------- ------------
$ 109,720 $ 98,215
============= ============
</TABLE>
8. Fair Value Disclosure of Other Financial Instruments:
----------------------------------------------------
The Company has identified certain liabilities as financial instruments that
require fair value disclosure. The following methods and assumptions were
used to estimate the fair value of each class of these instruments for which
it is practicable to estimate the value.
Since supplementary contracts may be perceived as deposit liabilities with
defined maturities, the Company has determined fair value based on the
discounted value of amounts payable at maturity of the contract. Discount
rates used to determine fair value range from 6.5% to 7.9%. All other deposit
liabilities are not considered to have defined maturities. The Company has
determined fair value for these contracts to be equal to the cash surrender
value, which is that amount which is payable to policyholders on demand.
The estimated fair values for liabilities, which the Company has identified as
investment contracts and borrowed funds, are as follows:
<TABLE>
1994 1993
---- ----
Estimated Estimated
<S> Carrying Fair Carrying Fair
Value Value Value Value
----- ----- ----- -----
Financial Liabilities <C> <C> <C> <C>
---------------------
Future Policy Benefits
Annuity Reserves -
Accumulation Phase $30,239 $28,868 $21,140 $22,308
Other Deposits 31,690 29,484 15,992 15,884
Other Liabilities
Funds Deposited Under
Income Settlements
Supplementary
Contracts Without
Life Contingencies 270 260 262 262
Liabilities of
Separate Account 309,672 309,672 145,661 145,661
</TABLE>
<PAGE>
9. Related Party Transactions:
--------------------------
Connecticut Mutual allocates certain expenses to C.M. Life for providing
operating facilities, human resources, computer software development and
managerial services. Total expenses allocated to C.M. Life were approximately
$16,412, $18,831 and $24,590 in 1994, 1993 and 1992, respectively.
10. Net Investment Income:
---------------------
Net Investment Income is comprised of the following:
<TABLE>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Fixed maturities $47,658 $43,983 $42,908
Mortgage loans on real estate 4,383 5,813 6,507
Policy loans 7,925 7,448 7,785
Amortization of IMR 309 251 (239)
Other 1,449 1,844 1,383
----- ----- -----
Total investment income 61,742 59,339 58,344
Less: Applicable investment
expenses 1,837 1,879 1,678
----- ----- -----
Net investment income $59,887 $ 57,460 $ 56,666
======= ======== ========
<FN>
Net investment income and realized gains and losses applicable to
the Separate Account are not included in C.M. Life's net investment
income and realized gains and losses reported in the Statement of Operations.
</TABLE>
Realized and Unrealized Gains and Losses:
----------------------------------------
The cost of investments sold is determined by the specific identification
method. Realized gains and losses and the change in the difference between
market value and cost for fixed maturities and equity securities are
summarized
as follows:
<TABLE>
<S> 1994 1993 1992
---- ---- ----
Realized Gains and Losses: <C> <C> <C>
Fixed Maturities:
Realized gains $ 1,358 $ 5,931 $ 1,444
Realized losses (4,439) (1,016) (3,650)
---------- ------------ ------------
(3,081) 4,915 (2,206)
---------- ----------- ------------
Equity Securities:
Realized gains - 4 -
Realized losses - - -
--------- ----------- -----------
- 4
--------- ----------- ------------
Real Estate:
Realized gains - - -
Realized losses (2,158) - -
--------- ----------- -----------
(2,158) - -
--------- ----------- -----------
Mortgage Loans:
Realized gains - - -
Realized losses (2,093) (13) (25)
--------- ----------- -----------
(2,093) (13) (25)
--------- ----------- -----------
(Gains)/Losses 4,799 (4,447) 1,851
Transferred to IMR
Net Realized Capital
Gains/(Losses)
$ (2,533) $ 459 $ (380)
========== =========== ===========
Unrealized Gains and Losses:
Fixed Maturities:
Net unrealized gains
(losses),end of year $ (33,077) $ 20,870 $ 16,497
Net unrealized gains,
beginning of year 20,870 16,497 20,035
--------- ----------- -----------
Change in unrealized
gains or losses on
fixed maturities $ (53,947) $ 4,373 $ (3,538)
========== =========== =============
<FN>
The change in unrealized gains and (losses) for equity securities were
$(30), $50 and $105 as of December 31, 1994, 1993 and 1992, respectively.
</TABLE>
12. Contingencies:
-------------
In the normal course of its business operations, C.M. Life is involved in
litigation from time to time with claimants, beneficiaries and others.
Several lawsuits were pending at December 31, 1994. In the opinion of
management, the ultimate liability, if any, arising from this litigation is
not expected to have a material adverse effect on the financial position of
C.M. Life.
<PAGE>
<TABLE>
SCHEDULE I
C.M. LIFE INSURANCE COMPANY
SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES
AS OF DECEMBER 31, 1994
($ IN THOUSANDS)
Cost or Fair Balance
Other Value Sheet
TYPE OF INVESTMENT Basis (see note) Amount
- ------------------ ----- ---------- ------
<S> <C> <C> <C>
Fixed Maturities:
U.S. Government $62,501 $60,627 $62,501
Special Revenue and Special
Assessment - Obligations and
all Non-guaranteed Obligations
of Government Agencies
Authorities,and Subdivisions 4,373 3,998 4,373
Foreign Government, Province and
Municipal 16,175 15,388 16,175
Public Utility 38,773 37,395 38,773
Mortgage Backed Obligations 167,641 155,990 167,641
Industrial and Miscellaneous 427,828 410,815 427,828
------- ------- -------
Total Fixed Maturities 717,291 684,213 717,291
------- ------- -------
Equity Securities:
Nonredeemable Preferred Stocks 1,815 2,065 1,815
----- ----- -----
Total Equity Securities 1,815 2,065 1,815
----- ----- -----
Total Fixed Maturities and
Equity Securities
719,106 719,106
------- -------
$686,278
========
Other Investments:
Mortgage Loans on Real Estate 47,833 40,241 42,038
Real Estate 2,084 (see note) 1,897
Policy Loans 109,720 (see note) 109,720
Short-term Investments 3,025 3,025 3,025
----- -----
Total Other Investments 162,662 156,680
------- -------
Total Investments $881,768 $875,786
======== ========
<FN>
Note: Fair values for equity securities and fixed maturities proximate those
quotations published by applicable stock exchanges or are received from other
reliable sources. Fair values for real estate are not readily available.
Approximately 98% of policy loans are comprised of variable interest rate
loans whose carrying value approximate fair value.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VI
C.M. LIFE INSURANCE COMPANY
REINSURANCE
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
($ IN THOUSANDS)
Ceded
Gross To Other Net
Amount Companies Amount
------ --------- ------
<S> <C> <C> <C>
December 31, 1994
- -----------------
Life insurance in force $15,800,300 $7,310,290 $8,490,010
=========== ========== ==========
Premiums: Life Insurance $111,238 $54,032 $57,206
======== ======= =======
December 31, 1993
- -----------------
Life insurance in force $14,521,452 $7,382,223 $7,139,229
=========== ========== ==========
Premiums: Life insurance $108,097 $56,905 $51,192
======== ======= =======
December 31, 1992
- -----------------
Life insurance in force $14,985,254 $7,372,,633 $7,612,621
=========== =========== ==========
Premiums: Life Insurance $177,785 $60,830 $56,955
======== ======= =======
</TABLE>
<PAGE>
C.M. LIFE INSURANCE COMPANY
INDEX
Financial Statements:*
Balance Sheet -
March 31, 1995 and December 31, 1994 . . .3
Statement of Operations -
Three Months Ended
March 31, 1995 and 1994 . . . . . . 4
Statement of Stockholder's Equity -
Three Months Ended
March 31, 1995 and 1994 . . . . . . 5
Statement of Cash Flows -
Three Months Ended
March 31, 1995 and 1994 . . . . . . 6
Notes to Financial Statements . . . . . .7
* The balance sheet at December 31, 1994 has been taken from the
audited financial statements at that date. All other
statements are unaudited.
2
<PAGE>
<TABLE>
C.M. LIFE INSURANCE COMPANY
BALANCE SHEETS
($ IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(see NOTE)
March 31, 1995 December 31, 1994
-------------- ------------------
<S> <C> <C>
ASSETS:
Investments:
Fixed maturities at cost $745,486 $717,291
Equity securities at cost - 1,815
Mortgage loans on real estate at 41,609 42,038
net realizable value
Real estate at cost 1,885 1,897
Policy loans at outstanding 116,442 109,720
balance
Cash and cash equivalents 2,048 3,025
-------------- ------------------
Total investments 907,470 875,786
-------------- ------------------
Accrued investment income 16,634 14,023
Accounts receivable 4,886 5,330
Amounts due from reinsurers 1,120 1,162
Other assets 1,822 2,318
Assets of Separate Account 349,028 309,672
-------------- ------------------
TOTAL ASSETS $1,280,960 $1,208,291
-------------- ------------------
LIABILITIES AND STOCKHOLDER'S
EQUITY:
Liabilities:
Future policy benefits $771,904 $751,808
Policy claims and benefits
currently payable 2,084 1,772
Indebtedness to related parties 6,791 6,965
Federal income tax payable 4,971 2,446
Asset valuation reserve 7,917 6,640
Other liabilities 12,183 7,906
Other deposits 35,098 31,690
Transfers due from Separate (15,846) (14,445)
Account
Liabilities of Separate Account 349,028 309,672
-------------- ------------------
Total liabilities 1,174,130 1,104,454
-------------- ------------------
STOCKHOLDER'S EQUITY:
Common stock, $200 par value -
50,000 shares authorized,
12,500 shares issued and 2,500 2,500
oustanding
Additional paid-in capital 43,759 43,759
Retained earnings 60,571 57,578
-------------- ------------------
Total stockholder's equity 106,830 103,837
-------------- ------------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $1,280,960 $1,208,291
============== ==================
<FN>
NOTE: The Balance Sheet at December 31, 1994 has been taken from the audited
financial statements at that date.
<FN>
The accompanying notes are an integral part of these unaudited financial
statements.
3
</TABLE>
<PAGE>
<TABLE>
C.M. LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
($ IN THOUSANDS)
1995 1994
---------- ----------
<S> <C> <C>
REVENUES:
Premiums and annuity considerations $36,801 $25,696
Less: reinsurance ceded (14,206) (14,906)
--------- -------
Net premiums and annuity considerations 22,595 10,790
Net investment income 16,189 14,641
Net realized capital losses
on investments (252) (2)
Other income 349 147
------ -----
Total revenues 38,881 25,576
BENEFITS, LOSSES AND EXPENSES:
Benefits, claims and settlement expenses 37,363 22,085
Acquisition and insurance expenses 6,521 5,038
Other expenses 1,199 1,505
Less: reinsurance benefits and expenses (13,106) (11,275)
--------- -------
Total benefits, losses and expenses 31,977 17,353
--------- --------
Income before income tax expense 6,904 8,223
FEDERAL INCOME TAX EXPENSE 2,680 3,268
-------- -------
NET INCOME $4,224 $4,955
========= ========
<FN>
The accompanying notes are an integral part of these unaudited financial
statements.
4
</TABLE>
<PAGE>
<TABLE>
C.M. LIFE INSURANCE COMPANY
STATEMENTS OF STOCKHOLDER'S EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
($ IN THOUSANDS)
1995 1994
---------- -----------
<S> <C> <C>
Common Stock $2,500 $2,500
Additional Paid-in Capital 43,759 43,759
Retained Earnings
Balance, beginning of year 57,578 41,639
Net income 4,224 4,955
Change in asset valuation reserve (1,276) (1,721)
Change in nonadmitted assets 45 497
--------- -----------
Balance, end of period 60,571 45,370
--------- -----------
TOTAL STOCKHOLDER'S EQUITY $106,830 $91,629
========= ===========
<FN>
The accompanying notes are an integral part of these unaudited financial
statements.
5
</TABLE>
<PAGE>
<TABLE>
C.M. LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
($ IN THOUSANDS)
1995 1994
------------ ---------
<S> <C> <C>
CASH PROVIDED:
Premiums and annuity considerations,
net of reinsurance $22,932 $11,166
Other deposits 30,339 58,358
Net investment income 14,211 13,567
Commission and expense allowance and
reserve adjustment on reinsurance ceded 4,917 5,959
------------ --------
72,399 89,050
Benefits and interest to policyholders
and beneficiaries, net of reinsurance (12,873) (9,528)
Acquisition and insurance expenses,
net of reinsurance (7,503) (5,912)
Transfers to Separate Account (21,885) (53,050)
Other payments, net (4,101) (7,498)
Net cash provided by operations 26,037 13,062
------------ --------
Proceeds from the the disposition of
fixed maturities and mortgage loans on
real estate 121,889 58,119
------------ --------
Total cash provided 147,926 71,181
------------ --------
CASH APPLIED:
Purchases of fixed maturities 148,896 66,457
Other applications 7 709
------------ --------
Total cash applied 148,903 67,166
------------ --------
Net increase (decrease) in cash and cash
equivalents (977) 4,015
CASH AND CASH EQUIVALENTS:
Beginning of year 3,025 5,589
------------ --------
End of period $2,048 $9,604
============ ========
<FN>
The accompanying notes are an integral part of these unaudited financial
statements.
6
</TABLE>
<PAGE>
C.M. LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995 AND 1994
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
1. General:
-------
C.M. Life Insurance Company (C.M. Life) is a wholly owned stock
life insurance subsidiary of Connecticut Mutual Life Insurance
Company (Connecticut Mutual). In the opinion of C.M. Life these
financial statements contain all adjustments, consisting of only
normal recurring adjustments, necessary to present fairly the
financial position as of March 31, 1995 and December 31, 1994, the
results of its operations for the three months ended March 31,
1995 and 1994, and its cash flows for the three months ended March
31, 1995 and 1994.
C.M. Life's financial statements have been prepared in conformity
with accounting practices and procedures of the National
Association of Insurance Commissioners (NAIC) as prescribed or
permitted by the Insurance Department of the State of Connecticut,
which are considered to be generally accepted accounting
principles for wholly owned stock life insurance subsidiaries of
mutual life insurance companies.
The Financial Accounting Standards Board (FASB) has issued an
interpretation declaring that financial statements of mutual life
insurance companies, and their wholly owned subsidiaries, which
are prepared on the basis of statutory accounting principles, will
no longer be considered to be in conformity with GAAP. This
interpretation applies to financial statements issued for fiscal
years beginning after December 15, 1995. Certain accounting
principles for mutual life insurance companies, which will be
required to be in compliance with GAAP, were also issued by the
FASB and the American Institute of Certified Public Accountants in
January 1995. The financial statement impact of adopting these
accounting principles has not been determined by the Company. The
effect of initially adopting the FASB interpretation shall be
reported retroactively through restatement of all previously
issued financial statements presented for comparative purposes for
fiscal years beginning after December 15, 1992.
2. Related Party Transactions:
--------------------------
The Parent, Connecticut Mutual, allocates certain expenses to C.M.
Life for providing operating facilities, human resources, computer
software development and managerial services. Total expenses
allocated to C.M. Life were approximately $4,121 and $3,865 for
the three month period ended March 31, 1995 and 1994.
3. Net Investment Income:
---------------------
<TABLE>
Net investment income is comprised of the following:
Three Months Ended
March 31,
----------------------
1995 1994
---------- ----------
<S> <C> <C>
Fixed Maturities $13,451 $11,454
Mortgage loans on real estate 762 1,269
Policy loans 2,277 1,898
Amortization of IMR (436) 234
Other 301 401
---------- ---------
Total Investment Income 16,355 15,256
Less: Applicable investment expense 166 615
---------- ---------
Net Investment Income $16,189 $14,641
========== =========
<FN>
7
</TABLE>
</PAGE>
<PAGE>
APPENDIX A - OPTIONAL BENEFITS
This Appendix is intended to provide only a very brief overview of additional
insurance benefits currently available by rider. We reserve the right to add
insurance benefits by rider from time to time subject to applicable laws and
regulations. For more information, contact your agent or registered
representative.
The following supplemental benefits are available for issue under the
Policies.
DISABILITY WAIVER OF MONTHLY DEDUCTIONS RIDER
This rider provides that C.M. Life will waive Monthly Deductions
due under a Policy for each month that the Insured is disabled, as
that term is defined in the rider. The rider will bear additional
cost of insurance charges if added to the Policy.
TRANSFER OF INSURED RIDER
This rider allows you to use the Policy to insure a different person,
subject to Company guidelines. This rider is available without charge.
<PAGE>
APPENDIX B - PAYMENT OPTIONS
PAYMENT OPTIONS - Upon Written Request, all or part of the Proceeds may be
placed under one or more payment options currently offered by C.M. Life. If
you do not make an election, C.M. Life will pay the Proceeds in a single sum.
A certificate will be provided to the payee describing the payment option
selected.
If a payment option is selected, the Beneficiary may pay to C.M. Life any
amount that would otherwise be deducted from the Proceeds.
SELECTION OF PAYMENT OPTIONS - The amount applied under any one option for any
one payee must be at least $5,000. The periodic payment for any one payee
must be at least $50. Subject to your and/or the Beneficiary's provision, any
option selection may be changed before the Proceeds become payable. If you
make no selection, the Beneficiary may select an option when the Proceeds
become payable.
<PAGE>
APPENDIX C - ILLUSTRATIONS OF DEATH BENEFIT, POLICY VALUES
AND ACCUMULATED PREMIUMS
The tables on the following pages illustrate the way in which a Policy's Death
Benefit, Policy Value, and Surrender Value could vary over an extended period
of time. They assume that all premiums are allocated to and remain in the
Separate Account for the entire period shown and are based on hypothetical
gross investment rates of return for the Funds (i.e., investment income and
capital gains and losses, realized or unrealized) equivalent to constant gross
(after tax) annual rates of 0%, 6%, and 12%.
The tables on pages 39 and 40 illustrate a Policy issued to an individual ,
Age 30, based on full medical underwriting and classified as a non-tobacco
user. The illustrations are also based on a choice of Death Benefit Option 1
and the Cash Value Accumulation Test. The tables on pages[ ] and [ ]
illustrate a Policy issued to an individual , Age 45, based on guaranteed
issue underwriting and classified as a non-tobacco user. The illustrations
are also based on a choice of Death Benefit Option 2 and the Guideline Premium
Test. Illustrations are provided using both the current and guaranteed cost
of insurance rates for the two examples. Since the Policy is issued on a
unisex basis, the illustrations are shown on a unisex basis.
The Policy Values and Death Benefits would be different from those shown if
the gross annual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below such averages for individual
Policy Years. The values would also be different depending on the allocation
of a Policy's total Policy Value among the Sub-Accounts of the Separate
Account, if the actual rates of return averaged 0%, 6% or 12%, but the rates
of each Fund Portfolio varied above and below such averages.
The amounts shown for the Death Benefits and Policy Values take into account
the deduction from premium for the tax expense charge, the premium charge, and
the Monthly Deduction from Policy Value. The amounts shown also take into
account the daily charge against the Separate Account for mortality and
expense risks and the Separate Account administrative charge for the first
twenty Policy Years, equivalent to an effective annual rate of 0.90% of the
average daily value of the assets in the Separate Account attributable to the
Policies, and 0.25% thereafter. The amounts shown in the tables also take
into account the C.M. Fund, VIP Fund, and VIP Fund ll Portfolio's advisory
fees and operating expenses, which are assumed to be at an annual rate of
0.70% of the average daily net assets of each C.M. Fund, VIP Fund, and VIP
Fund ll Portfolio. This is based upon a weighted allocation of premiums among
the sub-accounts rather than an average. The weighted allocation assumes 5.0%
in Government Securities Portfolio; 10.0% Income Portfolio; 20.0% Total Return
Portfolio; 15.0% Growth Portfolio; 10.0% International Equity Portfolio; 2.5%
LifeSpan Diversified Income Portfolio; 2.5% LifeSpan Balanced Portfolio; 2.5%
LifeSpan Capital Appreciation Portfolio; 5.0% Money Market Portfolio; 7.5%
High Income Portfolio; and 20% Index 500 Portfolio. The actual fees and
expenses of the C.M. Fund and VIP Funds in 1994 ranged from an annual rate of
0.27% to an annual rate of 1.28%. No fees and expenses were deducted for the
LifeSpan Balanced, LifeSpan Capital Appreciation, or LifeSpan Diversified
Income Portfolios since none of these Portfolios were in existence prior to
1995. The fees and expenses associated with your Policy may be more or less
than 0.70% in the aggregate, depending upon how you make allocations of Policy
Value among the Sub-Accounts. Under its investment advisory agreement with
the C.M. Fund, G.R. Phelps will reimburse the C.M. Fund for total ordinary
expenses exceeding a limitation of 1.50% of average daily net assets of the
C.M. Fund. Fidelity Management has voluntarily agreed to temporarily limit
the total operating expenses (excluding interest, taxes, brokerage commissions
and extraordinary expenses) of the High Income Portfolio to an annual rate of
1.00% of the Portfolio's average net assets. Without the effect of the
expense limitations, in 1994 the total operating expenses of the High Income
Portfolio would have been 0.66% of its average net assets.
Taking into account the mortality and expense risk charge and the Separate
Account administrative charge and the assumed 0.70% charge for the C.M. Fund,
VIP Fund, and VIP Fund ll Portfolio advisory fees and operating expenses, the
gross annual rates of investment return of 0%, 6% and 12% correspond to net
annual rates of -1.60%, 4.40%, and 10.40%, respectively, during the first 20
Policy years and -0.95%, 5.05%, and 11.05%, respectively, thereafter.
The hypothetical returns shown in the table do not reflect any charges for
income taxes against the Separate Account since no charges are currently made.
If, in the future, such charges are made, in order to produce illustrated
death benefits and cash values, the gross annual investment rate of return
would have to exceed 0%, 6% or 12% by a sufficient amount to cover the tax
charges.
The second column of the tables show the amount which would accumulate if the
premium payments were invested to earn interest, (after taxes) at 5%
compounded annually.
The tables illustrate the Policy Values that would result based upon the
assumptions that no Policy loans have been made, that you have not requested
an increase or decrease in the initial Specified Amount, that no partial
withdrawals have been made, and that no transfers above twelve have been made
in any Policy Year (so that no transaction or transfer charges have been
incurred).
Upon request, C.M. Life will provide a comparable illustration based upon the
proposed Insured's Age, underwriting classification, and the requested
Specified Amount, Death Benefit Option, and riders.
TO CHOOSE THE SUB-ACCOUNTS WHICH WILL BEST MEET YOUR NEEDS AND OBJECTIVES,
CAREFULLY READ THE PROSPECTUSES OF THE C.M. FUND AND VIP FUNDS ALONG WITH THIS
PROSPECTUS.
<PAGE>
C.M LIFE INSURANCE COMPANY
EXECUTIVE BENEFITS VARIABLE UNIVERSAL LIFE POLICY
<TABLE>
<CAPTION>
Fully Underwritten
<S> <C>
Unisex Non-Tobacco User Age 30
Specified Amount $300,000
Death Benefit Option 1
Cash Value AccumuLation Test
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT COST OF INSURANCE CHARGES
</TABLE>
<TABLE>
<CAPTION>
Premiums Hypothetical 0% Hypothetical 6% Hypothetical 12%
<S> <C> <C> <C> <C>
Paid Plus Gross Investment Return Gross Investment Return Gross Investment Return
</TABLE>
<TABLE>
<CAPTION>
Interest
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Policy At 5% Surrender Policy Death Surrender Policy Death Surrender Policy Death
Year Per year Value Value Benefit Value Value Benefit Value Value Benefit
1 5,670 4,569 4,569 300,000 4,856 4,856 300,000 5,144 5,144 300,000
2 11,624 9,002 9,002 300,000 9,862 9,862 300,000 10,758 10,758 300,000
3 17,875 13,301 13,301 300,000 15,024 15,024 300,000 16,889 16,889 300,000
4 24,438 17,466 17,466 300,000 20,347 20,347 300,000 23,591 23,591 300,000
5 31,330 21,489 21,489 300,000 25,828 25,828 300,000 30,916 30,916 300,000
6 38,567 25,373 25,373 300,000 31,476 31,476 300,000 38,930 38,930 300,000
7 46,165 29,177 29,177 300,000 37,359 37,359 300,000 47,769 47,769 300,000
8 54,143 33,221 33,221 300,000 43,825 43,825 300,000 57,877 57,877 300,000
9 62,521 37,175 37,175 300,000 50,556 50,556 300,000 69,024 69,024 300,000
10 71,317 41,039 41,039 300,000 57,562 57,562 300,000 81,323 81,323 300,000
11 80,552 44,813 44,813 300,000 64,857 64,857 300,000 94,830 94,830 300,000
12 90,250 48,492 48,492 300,000 72,449 72,449 300,000 109,638 109,638 300,000
13 100,433 52,080 52,080 300,000 80,357 80,357 300,000 125,875 125,875 300,000
14 111,124 55,572 55,572 300,000 88,590 88,590 300,000 143,667 143,667 328,998
15 122,350 58,972 58,972 300,000 97,153 97,153 300,000 163,167 163,167 362,231
16 134,138 62,654 62,654 300,000 106,379 106,379 300,000 185,155 185,155 398,083
17 146,515 66,256 66,256 300,000 115,972 115,972 300,000 209,337 209,337 437,515
18 159,511 69,779 69,779 300,000 125,945 125,945 300,000 235,932 235,932 478,942
19 173,156 73,220 73,220 300,000 136,309 136,309 300,000 265,171 265,171 522,387
20 187,484 76,580 76,580 300,000 147,081 147,081 300,000 297,318 297,318 567,877
Age 60 376,708 112,921 112,921 300,000 298,382 298,382 399,832 908,009 908,009 1,216,732
Age 65 512,116 127,456 127,456 300,000 401,176 401,176 489,435 1,527,189 1,527,189 1,863,171
Age 70 684,935 138,293 138,293 300,000 525,852 525,852 609,989 2,528,498 2,528,498 2,933,058
Age 75 905,500 143,738 143,738 300,000 675,666 675,666 722,962 4,136,036 4,136,036 4,425,559
</TABLE>
(1) Assumes a $5,400 premium is paid at the beginning of each Policy
Year. Values will be different if premiums are paid with a different
frequency or in different amounts.
(2) Assumes that no policy loan has been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient
Policy Value
THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE ILLUSTRATIVE ONLY, AND
SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RATES OF RETURN. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN, AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS BY A POLICYOWNER, AND THE DIFFERENT INVESTMENT
RATES OF RETURN FOR THE FUNDS. THE VALUE OF UNITS, CASH VALUE, AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL RATES OF INVESTMENT RETURN AVERAGES 0%, 6%, AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE AND BELOW THOSE AVERAGES FOR
INDIVIDUAL POLICY YEARS, OR IF ANY PREMIUMS WERE ALLOCATED OR POLICY
VALUE TRANSFERRED TO THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
C.M LIFE INSURANCE COMPANY
EXECUTIVE BENEFITS VARIABLE UNIVERSAL LIFE POLICY
<TABLE>
<CAPTION>
Fully Underwritten
<S> <C>
Unisex Non-Tobacco User Age 30
Specified Amount $300,000
Death Benefit Option 1
Cash Value AccumuLation Test
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
GUARANTEED COST OF INSURANCE CHARGES
</TABLE>
<TABLE>
<CAPTION>
Premiums Hypothetical 0% Hypothetical 6% Hypothetical 12%
<S> <C> <C> <C> <C>
Paid Plus Gross Investment Return Gross Investment Return Gross Investment Return
</TABLE>
<TABLE>
<CAPTION>
Interest
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Policy At 5% Surrender Policy Death Surrender Policy Death Surrender Policy Death
Year Per year Value Value Benefit Value Value Benefit Value Value Benefit
1 5,670 4,002 4,002 300,000 4,272 4,272 300,000 4,541 4,541 300,000
2 11,624 7,937 7,937 300,000 8,728 8,728 300,000 9,553 9,553 300,000
3 17,875 11,806 11,806 300,000 13,379 13,379 300,000 15,085 15,085 300,000
4 24,438 15,608 15,608 300,000 18,230 18,230 300,000 21,189 21,189 300,000
5 31,330 19,332 19,332 300,000 23,279 23,279 300,000 27,914 27,914 300,000
6 38,567 22,986 22,986 300,000 28,543 28,543 300,000 35,335 35,335 300,000
7 46,165 26,562 26,562 300,000 34,022 34,022 300,000 43,515 43,515 300,000
8 54,143 30,381 30,381 300,000 40,064 40,064 300,000 52,894 52,894 300,000
9 62,521 34,110 34,110 300,000 46,349 46,349 300,000 63,235 63,235 300,000
10 71,317 37,751 37,751 300,000 52,889 52,889 300,000 74,639 74,639 300,000
11 80,552 41,303 41,303 300,000 59,693 59,693 300,000 87,212 87,212 300,000
12 90,250 44,760 44,760 300,000 66,770 66,770 300,000 100,993 100,993 300,000
13 100,433 48,128 48,128 300,000 74,136 74,136 300,000 116,097 116,097 300,000
14 111,124 51,399 51,399 300,000 81,799 81,799 300,000 132,642 132,642 303,749
15 122,350 54,578 54,578 300,000 89,778 89,778 300,000 150,767 150,767 334,703
16 134,138 57,655 57,655 300,000 98,081 98,081 300,000 170,608 170,608 366,807
17 146,515 60,634 60,634 300,000 106,676 106,676 300,000 192,328 192,328 401,966
18 159,511 63,512 63,512 300,000 115,565 115,565 300,000 216,100 216,100 438,683
19 173,156 66,283 66,283 300,000 124,751 124,751 300,000 242,102 242,102 476,941
20 187,484 68,948 68,948 300,000 134,244 134,244 300,000 270,543 270,543 516,737
Age 60 376,708 93,154 93,154 300,000 260,366 260,366 348,890 787,347 787,347 1,055,045
Age 65 512,116 97,814 97,814 300,000 339,973 339,973 414,767 1,281,812 1,281,812 1,563,810
Age 70 684,935 92,685 92,685 300,000 429,576 429,576 498,308 2,037,130 2,037,130 2,363,071
Age 75 905,500 69,190 69,190 300,000 527,649 527,649 564,584 3,169,324 3,169,324 3,391,176
</TABLE>
(1) Assumes a $5,400 premium is paid at the beginning
of each Policy Year. Values will be different if
premiums are paid with a different frequency or in
different amounts.
(2) Assumes that no policy loan has been made.
Excessive loans or withdrawals may cause this Policy
to lapse because of insufficient Policy Value
THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF
RETURN. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN, AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY A
POLICYOWNER, AND THE DIFFERENT INVESTMENT RATES OF
RETURN FOR THE FUNDS. THE VALUE OF UNITS, CASH VALUE,
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL RATES OF INVESTMENT RETURN
AVERAGES 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE AND BELOW THOSE AVERAGES FOR
INDIVIDUAL POLICY YEARS, OR IF ANY PREMIUMS WERE
ALLOCATED OR POLICY VALUE TRANSFERRED TO THE FIXED
ACCOUNT. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL INVESTMENT RATES OF RETURN CAN BE ACHIEVED
FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
C.M LIFE INSURANCE COMPANY
EXECUTIVE BENEFITS VARIABLE UNIVERSAL LIFE POLICY
<TABLE>
<CAPTION>
Guaranteed Issue
<S> <C>
Unisex Non-Tobacco User Age 45
Specified Amount $500,000
Death Benefit Option 2
Guideline Premium Test
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT COST OF INSURANCE CHARGES
</TABLE>
<TABLE>
<CAPTION>
Premiums Hypothetical 0% Hypothetical 6% Hypothetical 12%
<S> <C> <C> <C> <C>
Paid Plus Gross Investment Return Gross Investment Return Gross Investment Return
</TABLE>
<TABLE>
<CAPTION>
Interest
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Policy At 5% Surrender Policy Death Surrender Policy Death Surrender Policy Death
Year Per year Value Value Benefit Value Value Benefit Value Value Benefit
1 13,125 10,474 10,474 510,474 11,137 11,137 511,137 11,800 11,800 511,800
2 26,906 20,483 20,483 520,483 22,456 22,456 522,456 24,510 24,510 524,510
3 41,377 29,990 29,990 529,990 33,921 33,921 533,921 38,178 38,178 538,178
4 56,570 38,949 38,949 538,949 45,481 45,481 545,481 52,845 52,845 552,845
5 72,524 47,318 47,318 547,318 57,088 57,088 557,088 68,563 68,563 568,563
6 89,275 55,043 55,043 555,043 68,679 68,679 568,679 85,372 85,372 585,372
7 106,864 62,425 62,425 562,425 80,554 80,554 580,554 103,696 103,696 603,696
8 125,332 70,183 70,183 570,183 93,483 93,483 593,483 124,494 124,494 624,494
9 144,724 77,536 77,536 577,536 106,690 106,690 606,690 147,155 147,155 647,155
10 165,085 84,448 84,448 584,448 120,145 120,145 620,145 171,829 171,829 671,829
11 186,464 90,901 90,901 590,901 133,832 133,832 633,832 198,699 198,699 698,699
12 208,912 96,871 96,871 596,871 147,729 147,729 647,729 227,958 227,958 727,958
13 232,483 102,335 102,335 602,335 161,812 161,812 661,812 259,823 259,823 759,823
14 257,232 107,273 107,273 607,273 176,064 176,064 676,064 294,536 294,536 794,536
15 283,219 111,659 111,659 611,659 190,454 190,454 690,454 332,355 332,355 832,355
16 310,505 118,499 118,499 618,499 208,084 208,084 708,084 376,795 376,795 876,795
17 339,155 124,928 124,928 624,928 226,178 226,178 726,178 425,535 425,535 925,535
18 369,238 130,905 130,905 630,905 244,707 244,707 744,707 478,972 478,972 978,972
19 400,824 136,381 136,381 636,381 263,633 263,633 763,633 537,535 537,535 1,037,535
20 433,991 141,311 141,311 641,311 282,919 282,919 782,919 601,701 601,701 1,101,701
Age 60 283,219 111,659 111,659 611,659 190,454 190,454 690,454 332,355 332,355 832,355
Age 65 433,991 141,311 141,311 641,311 282,919 282,919 782,919 601,701 601,701 1,101,701
Age 70 626,418 163,123 163,123 663,123 397,293 397,293 897,293 1,059,801 1,059,801 1,559,801
Age 75 872,010 163,945 163,945 663,945 520,680 520,680 1,020,680 1,807,159 1,807,159 2,307,159
</TABLE>
(1) Assumes a $12,500 premium is paid at the
beginning of each Policy Year. Values will be
different if premiums are paid with a different
frequency or in different amounts.
(2) Assumes that no policy loan has been made.
Excessive loans or withdrawals may cause this
Policy to lapse because of insufficient Policy
Value
THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES
OF RETURN. ACTUAL INVESTMENT RESULTS MAY BE MORE
OR LESS THAN THOSE SHOWN, AND WILL DEPEND ON A
NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATIONS BY A POLICYOWNER, AND THE DIFFERENT
INVESTMENT RATES OF RETURN FOR THE FUNDS. THE
VALUE OF UNITS, CASH VALUE, AND DEATH BENEFIT FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
THE ACTUAL RATES OF INVESTMENT RETURN AVERAGES
0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE AND BELOW THOSE AVERAGES FOR
INDIVIDUAL POLICY YEARS, OR IF ANY PREMIUMS WERE
ALLOCATED OR POLICY VALUE TRANSFERRED TO THE
FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RATES OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
C.M LIFE INSURANCE COMPANY
EXECUTIVE BENEFITS VARIABLE UNIVERSAL LIFE POLICY
<TABLE>
<CAPTION>
Guaranteed Issue
<S> <C>
Unisex Non-Tobacco User Age 45
Specified Amount $500,000
Death Benefit Option 2
Guideline Premium Test
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
GUARANTEED COST OF INSURANCE CHARGES
</TABLE>
<TABLE>
<CAPTION>
Premiums Hypothetical 0% Hypothetical 6% Hypothetical 12%
<S> <C> <C> <C> <C>
Paid Plus Gross Investment Return Gross Investment Return Gross Investment Return
</TABLE>
<TABLE>
<CAPTION>
Interest
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Policy At 5% Surrender Policy Death Surrender Policy Death Surrender Policy Death
Year Per year Value Value Benefit Value Value Benefit Value Value Benefit
1 13,125 8,172 8,172 508,172 8,759 8,759 508,759 9,349 9,349 509,349
2 26,906 16,027 16,027 516,027 17,711 17,711 517,711 19,470 19,470 519,470
3 41,377 23,553 23,553 523,553 26,849 26,849 526,849 30,430 30,430 530,430
4 56,570 30,728 30,728 530,728 36,148 36,148 536,148 42,282 42,282 542,282
5 72,524 37,548 37,548 537,548 45,610 45,610 545,610 55,112 55,112 555,112
6 89,275 43,997 43,997 543,997 55,217 55,217 555,217 68,997 68,997 568,997
7 106,864 50,027 50,027 550,027 64,921 64,921 564,921 83,991 83,991 583,991
8 125,332 56,347 56,347 556,347 75,472 75,472 575,472 100,997 100,997 600,997
9 144,724 62,160 62,160 562,160 86,068 86,068 586,068 119,340 119,340 619,340
10 165,085 67,415 67,415 567,415 96,650 96,650 596,650 139,094 139,094 639,094
11 186,464 72,081 72,081 572,081 107,176 107,176 607,176 160,366 160,366 660,366
12 208,912 76,123 76,123 576,123 117,598 117,598 617,598 183,266 183,266 683,266
13 232,483 79,505 79,505 579,505 127,864 127,864 627,864 207,912 207,912 707,912
14 257,232 82,198 82,198 582,198 137,926 137,926 637,926 234,447 234,447 734,447
15 283,219 84,160 84,160 584,160 147,721 147,721 647,721 263,009 263,009 763,009
16 310,505 85,295 85,295 585,295 157,125 157,125 657,125 293,694 293,694 793,694
17 339,155 85,532 85,532 585,532 166,034 166,034 666,034 326,633 326,633 826,633
18 369,238 84,747 84,747 584,747 174,283 174,283 674,283 361,914 361,914 861,914
19 400,824 82,785 82,785 582,785 181,667 181,667 681,667 399,597 399,597 899,597
20 433,991 79,510 79,510 579,510 187,987 187,987 687,987 439,768 439,768 939,768
Age 60 283,219 84,160 84,160 584,160 147,721 147,721 647,721 263,009 263,009 763,009
Age 65 433,991 79,510 79,510 579,510 187,987 187,987 687,987 439,768 439,768 939,768
Age 70 626,418 41,914 41,914 541,914 204,138 204,138 704,138 703,871 703,871 1,203,871
Age 75 872,010 0 0 0 155,646 155,646 655,646 1,070,629 1,070,629 1,570,629
</TABLE>
(1) Assumes a $12,500 premium is paid at the
beginning of each Policy Year.
Values will be different if premiums
are paid with a different frequency or
in different amounts.
(2) Assumes that no policy loan has
been made. Excessive loans or
withdrawals may cause this Policy to
lapse because of insufficient Policy
Value
THE HYPOTHETICAL INVESTMENT RATES OF
RETURN ARE ILLUSTRATIVE ONLY, AND
SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE INVESTMENT RATES OF
RETURN. ACTUAL INVESTMENT RESULTS MAY
BE MORE OR LESS THAN THOSE SHOWN, AND
WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY
A POLICYOWNER, AND THE DIFFERENT
INVESTMENT RATES OF RETURN FOR THE
FUNDS. THE VALUE OF UNITS, CASH VALUE,
AND DEATH BENEFIT FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL RATES OF INVESTMENT RETURN
AVERAGES 0%, 6%, AND 12% OVER A PERIOD
OF YEARS, BUT FLUCTUATED ABOVE AND
BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS, OR IF ANY PREMIUMS WERE
ALLOCATED OR POLICY VALUE TRANSFERRED
TO THE FIXED ACCOUNT. NO
REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL INVESTMENT RATES OF RETURN
CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
Part II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of
Section 15(d) of the Securities
Exchange Act of 1934, the undersigned
registrant hereby undertakes to file
with the Securities and Exchange
Commission such supplementary and
periodic information, documents, and
reports as may be prescribed by any
rule or regulation of the Commission
heretofore or hereafter duly adopted
pursuant to authority conferred in that
section.
RULE 484 UNDERTAKING
INDEMNIFICATION
The following provisions regarding the
Indemnification of Directors and
Officers of the Registrant are
applicable:
CONNECTICUT LAW. Except where an
applicable insurance policy is
procured, Connecticut General Statutes
("C.G.S.") Section 33-320a is the sole
source of indemnification rights for
directors and officers of Connecticut
corporations and for persons who may be
deemed to be controlling persons by
reason of their status as a
shareholder, director, officer,
employee or agent of a Connecticut
corporation. Under C.G.S. Section 33-
320a, a corporation shall indemnify any
director or officer who was or is a
party, or was threatened to be made a
party, to any threatened, pending or
completed action, suit or proceeding,
whether civil, criminal, administrative
or investigative (hereinafter referred
to as "proceeding") by virtue of the
fact that he or the person whose legal
representative he is: (i) is or was a
director or officer of the corporation;
(ii) while a director or an officer of
the corporation, is or was serving at
the request of the corporation as a
director, officer, partner, trustee,
employee or agent of another foreign or
domestic corporation, partnership,
joint venture, trust or other
enterprise (hereinafter referred to as
"enterprise"), other than an employee
benefit plan or trust; or (iii) while a
director or an officer of the
corporation, is or was a director or
officer serving at the request of the
corporation as a fiduciary or an
employee benefit plan or trust
maintained for the benefit of employees
of the corporation or any other
enterprise, against "covered
expenditures" if (and only if) his
conduct met the applicable statutory
eligibility standard. The types of
expenditures which are covered and the
statutory eligibility standard vary
according to the type of proceeding to
which the director or officer is or was
a party or was threatened to be made a
party.
According to C.G.S. Section 33-320a, in
non-derivative proceedings other than
ones brought in connection with an
alleged claim based upon the purchase
or sale by a director or officer of
securities of the corporation or of
another enterprise, which the director
or officer serves or served at the
request of the corporation, the
corporation shall indemnify a director
or officer against judgments, fines,
penalties, amounts paid in settlement
and reasonable expenses, including
attorneys' fees, actually incurred by
him or herin connection with the
proceeding, or any appeal therein, IF
AND ONLY IF he or she acted: (i) in
good faith; and (ii) in a manner he or
she reasonably believed to be in the
best interests of the corporation or,
in the case of a person serving as a
fiduciary of any employee benefit plan
or trust, in a manner he or she
reasonably believed to be in the best
interests of the corporation or in the
best interest of the participants and
beneficiaries of such employee benefit
plan or trust and consistent with the
provisions of such employee benefit
plan or trust. However, where the
proceeding brought is criminal in
nature, C.G.S. Section 33-320a requires
that the director or officer must
satisfy the additional condition that
he or she had no reasonable cause to
believe that his or her conduct was
unlawful in order to be indemnified. A
director or officer also will be
entitled to indemnification as
described above if: (i) he or she is
successful on the merits in the defense
of any non-derivative proceeding
brought against him or her; or (ii) a
court shall have determined that in
view of all the circumstances such
director is fairly and reasonably
entitled to be indemnified. The
decision about whether the director or
officer qualifies for indemnification
under C.G.S. Section 33-320a may be
made: (i) in writing by a majority of
those members of the board of directors
who were not parties to the proceeding
in question; (ii) in writing by
independent legal counsel selected by a
consent in writing signed by a majority
of those directors who were not parties
to the proceeding; or (iii) by the
shareholders of the corporation at a
special or annual meeting by an
affirmative vote of at least a majority
of the voting power of shares not owned
by parties to the proceeding. A
director or officer also may apply to a
court of competent jurisdiction for
indemnification even though he
previously applied to the board,
independent legal counsel or the
shareholders and his application for
indemnification was rejected.
For purposes of C.G.S. Section 33-320a,
the termination of any proceeding by
judgment, order, settlement, conviction
or upon a plea of nolo contendere or
its equivalent shall not create, of
itself, a presumption that the director
or officer did not act in good faith or
in a manner which that director or
officer did not believe reasonably to
be in the best interests of the
corporation or of the participants and
beneficiaries of an employee benefit
plan or trust and consistent with the
provisions of such plan or trust.
Likewise, the termination of a criminal
act or proceeding shall not create, of
itself, a presumption that the director
or officer had reasonable cause to
believe that his or her conduct was
unlawful.
In non-derivative proceedings based on
the purchase or sale of securities of
the corporation or of another
enterprise, in which the director or
officer serves or served at the request
of the corporation, C.G.S Section 33-
320a provides that the corporation
shall indemnify the director or officer
only after a court shall have
determined upon application that, in
view of all the circumstances, the
director or officer is fairly and
reasonably entitled to be indemnified.
Furthermore, the expenditures for which
the director or officer shall be
indemnified shall be only such amount
as the court determines to be
appropriate.
Pursuant to C.G.S. Section 33-320a,
where a director or officer was or is a
party or was threatened to be made a
party to a derivative proceeding, the
corporation shall provide
indemnification against expenses,
including attorneys' fees, actually and
reasonably incurred in connection with
the proceeding or any appeal therein,
in relation to matters as to which
such director is finally adjudged not
to have breached a duty owed to the
corporation. The corporation also
shall indemnify a director or officer
where the court determines that, in
view of all the circumstances, such
person is fairly and reasonably
entitled to be indemnified; however, in
such a situation, the individual shall
be indemnified only for such amount as
the court determines to be appropriate.
Furthermore, the statute provides that
the corporation shall not indemnify a
director or officer for amounts paid to
the corporation, to a plaintiff or to
counsel for a plaintiff in settling or
otherwise disposing of a threatened or
pending action, with or without court
approval, or for expenses incurred in
defending a threatened action or a
pending action which is settled or
otherwise disposed of without court
approval.
C.G.S. Section 33-320a also provides
that expenses incurred in defending a
proceeding may be paid by the
corporation in advance of the final
disposition of such proceeding upon
authorization of the board of
directors, provided said expenses are
indemnifiable under the statute and the
director or officer agrees to repay
such amount if he is later found not
entitled to indemnification by the
corporation.
Lastly, C.G.S. Section 33-320a is
intended to be an exclusive statute. A
corporation established under
Connecticut statute cannot indemnify a
director or officer (other than a
director or officer who is or was
serving at the request of the
corporation as a director, officer,
partner, trustee, employee or agent of
another enterprise), to an extent
either greater or less than that
authorized by the statute, and any
provision in the certificate of
incorporation, the by-laws, a
shareholder or director resolution, or
agreement or otherwise that is
inconsistent with the statute is
invalid. C. M. Life Insurance Company
was not established under Connecticut
statute but was instead created by
special act of the Connecticut General
Assembly. Notwithstanding the above,
C.G.S. Section 33-320a specifically
authorizes a corporation to procure
insurance providing greater
indemnification rights than those set
out in the statute the premium cost of
which may be shared with the director
or officer on such basis as may be
agreed upon. The directors and
officers may be covered by an errors
and omissions insurance policy or other
insurance policy.
Insofar as indemnification for
liability arising under the Securities
Act of 1933 may be permitted to
directors, officers and controlling
persons of the Registrant pursuant to
the foregoing provisions, or otherwise,
the Registrant believes that in the
opinion of the Securities and Exchange
Commission such indemnification is
against public policy as expressed in
the Act and is, therefore,
unenforceable. In the event that a
claim for indemnification against such
liabilities (other than the payment by
the Registrant of expenses incurred or
paid by a director, officer or
controlling person of the Registrant in
the successful defense of any action,
suit or proceeding) is asserted by such
director, or officer or controlling
person in connection with the
securities being registered, the
Registrant will, unless in the opinion
of its counsel the matter has been
settled by controlling precedent,
submit to a court of appropriate
jurisdiction the question whether such
indemnification by it is against public
policy as expressed in the Act and will
be governed by the final adjudication
of such issue.
RULE 6E-3(T) REPRESENTATIONS,
DESCRIPTIONS AND UNDERTAKINGS
Registrant makes the following
representations pursuant to the
requirements of Rule 6e-3(T) under the
Investment Company Act of 1940:
A. Risk charge
Pursuant to Rule 6e-
3(T)(b)(13)(iii)(F)(1), Registrant
represents that Rule 6e-
3(T)(b)(13)(iii)(F) has been relied
upon in deducting charges for mortality
and expense risks assumed by C. M.
Life.
Pursuant to Rule 6e-
3(T)(b)(13)(iii)(F)(2), Registrant
represents that the mortality and
expense risk charge is within the range
of industry practice for comparable
flexible premium variable life
insurance contracts. The methodology
used to support this representation is
based upon an analysis of the mortality
and expense risk charges adopted under
other flexible premium variable life
insurance contracts. Registrant
undertakes to keep and make available
to the Commission on request the
documents used to support the foregoing
representation.
B. Distribution Costs
Pursuant to Rule 6e-3(T)(b)(13)(iii)(F)(4)(ii)(A),
Registrant represents that C.M. Life
has concluded that there is a
reasonable likelihood that the
distribution financing arrangement of
the Registrant will benefit the
Registrant and s Policyholders and will
keep and make available to the
Commission on request a memorandum
setting forth the basis for this
representation. Pursuant to Section
6e-3(T)(b)(13)(iii)(F)(4)(ii)(B)(2),
Registrant also represents that it will
invest only in management investment
companies which have undertaken to have
a board of directors, a majority of
whom are not interested persons of the
company, formulate and approve any plan
under Rule 12b-1 under the Investment
Company Act of 1940 to finance
distribution expenses.
UNDERTAKINGS CONCERNING MORTALITY AND
EXPENSE RISK CHARGE
The flexible premium variable life
policies offered by this registration
statement currently provide for a
mortality and expense risk charge of
0.65% , on an annual basis, of the
daily net asset value of each Sub-
Account of the Separate Account during
the first 20 Policy Years. Thereafter
the mortality and expense risk charge
will be reduced to 0.25% on a current
basis. C.M. Life may adjust the
mortality and expense risk charge;
however, it is guaranteed not to exceed
0.90%, on an annual basis of the daily
net asset value of each Sub-Account of
the Separate Account. The C.M. Life
acknowledges that any mortality and
expense risk charge above 0.90% may be
above the range of industry practice.
If C.M. Life proposes to increase the
charges above the range of industry
practice, the C.M. Life hereby
undertakes to file an exemption request
with the Securities and Exchange
Commission ("Commission") in which it
would demonstrate that the proposed
charge is reasonable in relation to the
risks assumed under the Policy.
Additionally, C.M. Life would take
any additional action that may be
necessary under the Policy or pursuant
to any applicable state regulatory
authorities.
This undertaking is given subject to
the applicability of future federal
legislation or Commission rules or
regulation which might permit an
increase in the mortality and expense
risk charge beyond the range of
industry practice, without submitting
an exemption application and/or making
the demonstration described above. In
such case, in lieu of the undertaking
described above, the C.M. Life hereby
undertakes to comply with the
provisions of such legislation, rules,
or regulations in implementing any
increase in the mortality and expense
risk charge.
<PAGE>
CONTENTS OF THE REGISTRATION STATEMENT
This registration statement comprises
the following papers and documents:
The facing sheet.
Cross-reference to items required by
Form N-8B2.
The prospectus, consisting of ____
pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484
under the Securities Act of 1933.
Representatives, descriptions and
undertaking pursuant to Rule 6e-
3(T)(b)(13)(iii)(F) under the
Investment Company Act of 1940 (The
"1940 Act").
The signatures.
Written consents of the following
persons:
1. Arthur Anderson--Exhibit 99.C1
2. Legal Opinion--Exhibit 99.C2
3. Actuarial consent--Exhibit 99.C6
The following exhibits:
(Exhibits required by paragraph A of the instructions to
Form N-8B-2)
Exhibit 99.A1 Certified copy of Resolution of the Board of
Directors of C.M. Life Insurance Company
authorizing the establishment of C. M. Life
Variable Life Separate Account I.*
Exhibit 99.A2 Not Applicable.
Exhibit 99.A3 (i) Underwriting Agreement between C.M. Life and
Connecticut Mutual Financial Services, L.L.C.
(ii) Form of Broker Dealer Selling Agreement.*
(iii) Form of Registered Representative Agreement.*
Exhibit 99.A4 Not Applicable.
Exhibit 99.A5 Not Applicable.
Exhibit 99.A6 Organizational documents of the Company.*
a. By-laws.
b. Articles of Incorporation.
Exhibit 99.A7 (i) Form of Policy (including Policy Riders).
Exhibit 99.A8 (i) Participation Agreement with Connecticut Mutual
Financial Services Series Fund I, Inc.
(ii) Participation Agreement with VIP Fund.
(iii) Participation Agreement with VIP Fund II.
Exhibit 99.A9 Not Applicable.
Exhibit 99.A10 Form of Application.
Exhibit 99.A11 Procedures Memorandum pursuant to
Rule 6e-3(T)(b)(12)(iii) under the 1940 Act
which includes conversion procedures pursuant
to Rule 6e-3(T)(b)(13)(v)(B).*
Exhibit 99.A12 Powers of Attorney.**
Exhibit 99.C1 Accounting Consent.
Exhibit 99.C2 Opinion of Counsel.
Exhibit 99.C4 Not Applicable.
Exhibit 99.C5 Not Applicable.
Exhibit 99.C6 Actuarial Consent.*
* Exhibits noted with asterik (*) were previously filed with
Registrant's Initial Registration Statement Dated April 10, 1995 and
are incorporated herein by reference.
** Power of Attorney Designations for Mssrs. Sams and Marcucculli were
previously filed with Registrant's Initial Registration Statement;
however, attached hereto as Exhibit 99.12 is a Power of Attorney
Designation for Mr. Loewenberg.
<PAGE>
FORM S-6 EXHIBIT TABLE
Exhibit 99.A1 Certified copy of Resolution of the Board of Directors
of C. M. Life Insurance Company establishing the
Separate Account*
Exhibit 99.A3A Underwriting Agreement between the Company
and Connecticut Mutual Financial Services, LLC
Exhibit 99.A3B Broker Dealer Selling Agreement*
Exhibit 99.A3 Form of Registered Representative Agreement*
Exhibit 99.A6 Organizational Documents of the Company*
(a) By-laws
(b) Articles of Incorporation
Exhibit 99.A7 Form of Policy (including Riders)
Exhibit 99.A8 Participation Agreement with Connecticut
Mutual Financial Services Series Fund I, Inc.
Exhibit 99.A8 Participation Agreement with VIP Fund
Exhibit 99.A8 Participation Agreement with VIP Fund II
Exhibit 99.A10 Form of Application
Exhibit 99.A11 Procedures Memorandum
Exhibit 99.A12 Powers of Attorney**
Exhibit 99.C1 Consent of Independent Accountants
Exhibit 99.C6 Acturial Consent
Exhibit 99.C2 Opinion of Counsel
* Previously filed with Registrant's Initial Registration Statement Dated
April 7, 1995, and incorporated herein by reference.
** Power of Attorney Designations for Mssrs. Sams and Marcucilli were
previously filed with Registrant's Initial Registration Statement;
however, attached hereto as Exhibit 99.12 is a Power of Attorney
Registration for Mr. Loewenberg.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 as amended, the Registrant, C.M. Life Variable Life
Separate Account I, has caused this Pre-Effective Registration Statement
Number 1 to be signed on its behalf by the undersigned thereunto duly
authorized, and its seal to be hereunto affixed and attested, all in the city
of Hartford, and State of Connecticut, on the 11th day of August, 1995.
C. M. LIFE VARIABLE LIFE SEPARATE ACCOUNT I
C. M. LIFE INSURANCE COMPANY
(Depositor)
By: /S/ANN F.LOMELI
Ann F. Lomeli
Corporate Secretary and Counsel
Pursuant to the requirements of the Securities Act of 1933, this initial
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
DAVID E. SAMS, JR.* Director and President (Chief August 11, 1995
David E. Sams, Jr. Executive Officer)
J. BRINKE MARCUCCILLI* Director and Chief Financial Officer
J. Brinke Marcuccilli (Chief Financial Officer)
JOHN H. LOEWENBERG* Director
John H. Loewenberg
/S/WILLIAM D. WILCOX*
William D. Wilcox
Attorney-In-Fact
* William D. Wilcox, Counsel, by signing his name hereto, does hereby sign
this document on behalf of the above-noted Officers and Directors of C.M.
Life Insurance Company pursuant to the Power of Attorney designations
previously filed with the Registrant's Initial Registration Statement for
Mssrs. Sams and Marcucculli, and attached hereto for Mr. Loewenberg.
UNDERWRITING AGREEMENT AMONG
CONNECTICUT MUTUAL FINANCIAL SERVICES LIMITED LIABILITY COMPANY
AND G.R. PHELPS & CO.
AGREEMENT made as of the 1st day of August, 1995 by and between C.M.
Life Insurance Company, a Connecticut corporation ("C.M. Life"), on its
own behalf and on behalf of C.M. Life Variable Life Separate Account I
(the "Separate Account"), and Connecticut Mutual Financial Services, LLC,
("CMFS") a Connecticut limited liability company.
WHEREAS, on February 2, 1995, C.M. Life's Board of Directors
established the Separate Account in order to set aside and invest assets
attributable to certain variable life insurance policies (the "Policies")
issued by C.M. Life; and
WHEREAS, C.M. Life has registered and will continue to maintain the
registration of the Separate Account under the Investment Company Act of
1940 and will register the Policies under the Securities Act of 1933; and
WHEREAS, CMFS is registered as a broker/dealer with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934 and
is a member of the National Association of Securities Dealers, Inc.
("NASD"); and
WHEREAS, C.M. Life and the Separate Account desire to have Policies
sold and distributed through CMFS, and CMFS is willing to sell and
distribute such Policies under the terms stated herein; and
WHEREAS, CMFS may desire to appoint C.M. Life as its agent to receive
money and perform other services.
WITNESSETH:
In consideration of the covenants hereinafter contained C.M. Life and
CMFS agree as follows:
1. UNDERWRITER. C.M. Life hereby appoints CMFS to serve as principal
underwriter of the Policies during the term of this Agreement. C.M.
Life reserves the right, however, to refuse at any time or times to
sell any Policies hereunder for any reason, and C.M. Life maintains
ultimate responsibility for Policy underwriting.
2. UNDERTAKINGS REGARDING SALES. CMFS shall use reasonable efforts to
distribute the Policies but does not agree hereby to sell any specific
number of Policies and shall be free to act as underwriter of other
securities. All premiums for Policies shall be held in a fiduciary
capacity and remitted promptly in full together with such application,
forms and any other required documentation to C.M. Life or its duly
appointed designee. CMFS hereby appoints C.M. Life and Connecticut
Mutual Life Insurance Company as agents of CMFS to receive premiums in
CMFS's behalf. Checks or money orders in payment of premiums shall be
drawn to the order of "C.M. Life Insurance Company". CMFS agrees to
offer the Policies for sale in accordance with the prospectus then in
effect. CMFS is not authorized to give any information or to make any
representations concerning the Policies other than those contained in
the current prospectus filed with the SEC or in such sales literature as
may be authorized from time to time by C.M. Life. CMFS shall take
reasonable steps to ensure that any associated person or entity with
whom it has entered into an agreement to sell the Policies pursuant to
Section 3 below, shall comply with the provisions of this Section 2.
3. FORMATION OF A SELLING GROUP.
The parties to this Agreement understand that CMFS will not engage in
sales of the Policies directly to public. Rather, CMFS will operate as
a wholesale distributor of the Policies. The parties envision the
development of a selling group of broker-dealers to sell the Policies
and, accordingly, C.M. Life hereby appoints CMFS as its agent in
connection with the formation of a group to sell the Policies (the
"Selling Group"). CMFS shall enter into such Agreements with such
broker-dealer(s) (referred to throughout as "Selling Broker-Dealers") as
it and C.M. Life may determine are appropriate. CMFS shall ensure that
any Selling Broker-Dealer with whom a Selling Group Agreement is
executed shall be a duly licensed broker-dealer under all applicable
state and federal securities laws. Additionally, CMFS shall ensure that
any Selling Broker-Dealer (or a properly licensed subsidiary or
affiliate) has requisite corporate authority pursuant to applicable
state insurance law to engage in sales and to receive commissions from
sales of the Policies. Additionally, CMFS will ensure that all Selling
Broker-Dealers shall maintain compliance with applicable state and
federal laws concerning such sales.
Further, CMFS shall take reasonable steps to ensure that any Selling
Broker-Dealer with whom it enters into a Selling Group Agreement will
agree to terms substantially similar to those contained in this
Agreement concerning the sale and distribution of the Policies.
4. COMPLIANCE. CMFS shall conform to the Rules of Fair Practice of the
NASD, and the securities laws of any jurisdiction in which it sells,
directly or indirectly, any Policies. CMFS shall take reasonable steps
to ensure that the Selling Broker-Dealers who enter into Selling Group
Agreements to sell the Policies will make certain that the sale of the
Policy is suitable. CMFS agrees to make timely filings with the SEC,
the NASD, and such other regulatory authorities as may be required of
any sales literature relating to the Policies that is intended for
distribution to prospective investors. CMFS agrees that it will not
distribute any sales literature to any associated persons or Selling
Broker-Dealer unless C.M. Life has approved such materials. CMFS also
agrees to furnish to C.M. Life sufficient copies of any agreements or
plans it intends to use in connection with any sales of Policies. CMFS
further agrees to provide information or reports with respect to its
services hereunder pursuant to request by any regulatory authority
having jurisdiction with respect thereto, in order that such regulatory
authority may ascertain whether C.M. Life's variable life insurance
operations are being conducted in a manner consistent with applicable
laws and regulations. CMFS agrees that it will cooperate fully in any
proceeding or investigation arising in connection with the distribution
of the Policies.
5. REGISTRATION AND QUALIFICATION OF POLICIES. C.M. Life agrees to
execute such papers and to perform such other acts as may be reasonably
requested by CMFS for the purpose of qualifying and maintaining
qualification of the Policies for sale under applicable state and
federal law. C.M. Life shall advise CMFS promptly of: (a) any action
of the SEC or any authorities of any state or territory, of which it may
be advised, affecting registration or qualification of the Separate
Account, or rights to offer the Policies for sale, and (b) any event
that would require the registration statement or prospectus to be
amended in order to make the statements therein not misleading.
6. CMFS -- INDEPENDENT CONTRACTOR. CMFS shall be an independent
contractor. CMFS is responsible for its own conduct and the employment,
control and conduct of its agents and employees and for injury to such
agents or employees or to others through its agent or employees. CMFS
assumes full responsibility for its agents and employees under
applicable statutes and agrees to pay all employer taxes thereunder.
All persons selling Policies shall be duly licensed as insurance
producers pursuant to applicable state laws, and C.M. Life shall have
responsibility for arranging for such licensing. C.M. Life expressly
reserves to itself the ultimate responsibility and authority for
direction and control of the underwriting services provided hereunder;
including the ultimate right to appoint and discharge agents selling
Policies, and to direct the marketing of the Policies.
7. EXPENSES PAID BY C.M. LIFE. While CMFS continues to act as agent of
C.M. Life to obtain subscriptions for and to sell Policies, and PROVIDED
CMFS receives no commission for the sale of the Policies, C.M. Life
shall pay the following:
(a) all expenses of printing and distributing any prospectus for use in
offering the Policies for sale, and all other copies of any such
prospectus used by CMFS, and
(b) all other expenses of advertising and of preparing, printing and
distributing all other literature or material for use in connection with
offering the Policies for sale.
8. INTERESTS IN AND OF CMFS. It is understood that any of the
policyholders, directors, officers, employees and agents of C.M. Life
may be a shareholder, director, officer, employee or agent of, or be
otherwise interested in, CMFS, any affiliated person of CMFS, any
organization in which CMFS may have an interest or any organization
which may have an interest in CMFS; that CMFS, any such affiliated
person or any such organization may have an interest in C.M. Life; and
that the existence of any such dual interest shall not affect the
validity hereof or of any transaction hereunder except as otherwise
provided in the Charter of C.M. Life and CMFS, respectively, or by
specific provision of applicable law.
9. COMPENSATION FOR SALES OF POLICIES AND APPOINTMENT OF C.M. LIFE AS
AGENT OF CMFS.
(a) For sales of the Policies by associated persons of CMFS and the
continuing obligations of CMFS set forth herein, C.M. Life shall pay to
full time life insurance agents of C.M. Life who are also associated
persons of CMFS on behalf of CMFS the commissions set forth in Schedule
A to this Agreement, as such Schedule may be amended from time-to-time.
For Policies sold under agreements that CMFS and C.M. Life enter into
with Selling Broker-Dealers, C.M. Life shall pay on behalf of CMFS, the
commissions set forth in Schedule B to this Agreement, as such Schedule
may be amended from time-to-time.
(b) C.M. Life agrees to maintain all required books of account and
related financial records on behalf of CMFS. All such books and records
shall be maintained and preserved pursuant to Rules 17a-3 and 17a-4
under the Securities Exchange Act (or the corresponding provisions of
any future federal securities laws or regulations). In addition, C.M.
Life agrees to maintain records of all sales commissions paid to the
associated persons of CMFS and any other broker-dealers pursuant to
paragraph (a) above for the sale of the Policies. All such books and
records shall be owned by and under the control of C.M. Life. C.M. Life
also agrees to send to CMFS's customers all required confirmations of
customer transactions, and on behalf of CMFS to pay all sales
commissions due and payable to full time life insurance agents of C.M.
Life who are also associated persons of CMFS and/or any Selling Broker-
Dealer.
10. INDEMNIFICATION.
(a) C.M. Life agrees to indemnify and hold harmless CMFS and each
director or officer thereof and each person, if any, who is associated
with CMFS within the meaning of the Securities Exchange Act of 1934
against any and all loss, liability, claims, damage, and expenses
whatsoever (including any and all expenses reasonably incurred in
investigating or defending against any litigation commenced or
threatened or any claim whatsoever) arising out of any untrue or alleged
untrue registration statement, or sales material relating to the
Policies prepared by C.M. Life or supplied to CMFS by C.M. Life or in
any application ("application") filed in any state in order to qualify
the same for sale or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(b) CMFS agrees to indemnify and hold harmless C.M. Life and each
director or officer thereof, and each person, if any who controls C.M.
Life within the meaning of the Securities Act of 1933, its agents,
subsidiaries and employees, against any and all loss, liability, claims,
damages, and expense whatsoever (including but not limited to any and
all expenses reasonably incurred in investigating or defending against
any litigation commenced or threatened or any claim whatsoever) arising
out of any untrue or alleged untrue statement or representation made
(except as such statements may be made in reliance on the prospectus,
registration statement and sales material supplied by C.M. Life), the
failure to deliver a currently effective prospectus (provided that CMFS
shall be entitled to rely on representations by C.M. Life as to which
prospectus is currently effective at any point in time and CMFS shall
not be liable for delivering a prospectus that is not currently
effective at the time of delivery thereof due to a misrepresentation of
the currency thereof by C.M. Life or other failure by C.M. Life to
notify CMFS that such prospectus was no longer effective) or the use of
any unauthorized sales literature by CMFS (or its employees), in
connection with the sale of the Policies.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any such litigation or claim, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section, notify the
indemnifying party of the commencement thereof, but the omission so to
notify the indemnifying party will not relieve it from any liability,
which it may have to any indemnified party otherwise than under this
Section. In case any such litigation or claim is brought against any
indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, assume the
defense thereof, with counsel satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party
of its election to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section for any
legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than the reasonable cost of
investigation.
11. LIABILITY. Each party shall be liable for its own misconduct and negligence
hereunder.
12. TERMINATION. This Agreement:
(a) shall continue in force from year-to-year, subject to prior
termination as provided herein;
(b) may at any time be terminated on sixty days' written notice to CMFS
by C.M. Life;
(c) may at any time be terminated by C.M. Life if CMFS fails to perform
in a satisfactory manner;
(d) shall terminate automatically in the event of its assignment by
CMFS and shall not be assignable by C.M. Life except with the written
consent of CMFS;
(e) may be terminated by CMFS on sixty days' written notice to C.M.
Life.
Termination of this agreement pursuant to this section shall be without
payment of any penalty. In the event of termination for any reason,
C.M. Life shall retain all records relating hereto, free from any claim
or retention of rights by CMFS.
13. CONFIDENTIALITY. CMFS agrees not to disclose or use any records or
information obtained hereunder in any manner whatsoever except as
expressly authorized herein, and will keep confidential any information
obtained pursuant hereto, and disclose such information only if C.M.
Life has authorized such disclosure, or if such disclosure is expressly
required by applicable state or federal regulatory authorities.
14. AMENDMENT. This Agreement may be amended only by mutual consent of
the parties by an instrument in writing.
15. APPLICABLE LAW AND LIABILITIES. This Agreement is executed and
delivered in the State of Connecticut and shall be governed by and
construed in accordance with the laws of Connecticut.
This Agreement shall be subject to all applicable provisions of law,
including, without limitation, the applicable provisions of the 1940 Act.
To the extent that any provisions herein contained conflict with any
applicable provisions of law, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
C.M. Life Insurance Company
By:_______________________________________
Title: _____________________________________
CONNECTICUT MUTUAL FINANCIAL SERVICES, L.L.C.
By: ______________________________________
Title: _____________________________________
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Adjustable Death Benefit Payable at the Death of the Insured, if the
Insured Dies Before the Maturity Date and While the Policy is In Force.
Flexible Premiums Payable During the Lifetime of the Insured Until the
Maturity Date.
Policy Value Payable on the Maturity Date if the Policy has not
Terminated.
Nonparticipating - No Dividends.
<PAGE>
C.M. LIFE INSURANCE COMPANY
A STOCK COMPANY
HARTFORD, CONNECTICUT
INSURED JOHN DOE 123456789 POLICY NUMBER
POLICY DATE MAY 1, 1995 35 UNISEX AGE AND SEX
DATE OF ISSUE MAY 1, 1995 $50,000 INITIAL SPECIFIED
AMOUNT
This Policy is issued by the Company at its Service Center, 140 Garden Street,
Hartford, Connecticut, on the Date of Issue. It is a legal contract between
the Policyowner and the Company.
The Company will pay the death Proceeds to the Beneficiary when We receive at
Our Service Center due proof of the Insured's death while this Policy was In
Force.
Payment will be subject to all provisions of this Policy. This Policy may
terminate before the Maturity Date if the premiums paid are not sufficient to
continue it to that date.
THE AMOUNT OF THE DEATH BENEFIT, THE DURATION OF THE DEATH BENEFIT, OR BOTH,
MAY BE VARIABLE OR FIXED AS DESCRIBED IN THIS POLICY. POLICY VALUES MAY
INCREASE OR DECREASE IN ACCORDANCE WITH THE EXPERIENCE OF THE SEPARATE
ACCOUNT.
The Policy Value in the Fixed Account will accumulate interest at a minimum
guaranteed annual rate as shown in the Policy Specifications. Interest in
excess of the guaranteed rate may be credited at the Company's sole
discretion.
READ YOUR POLICY CAREFULLY
Ann F. Lomeli David Sams, Jr.
SECRETARY REGISTRAR
RIGHT TO EXAMINE THE POLICY
You may cancel this Policy by mailing or delivering it to the Service Center
or by delivering it to the agent of the Company on or before the later of: ten
(10) days after You receive it; or ten (10) days after the Company mails You a
Notice of Withdrawal Right. Upon its return, the Policy will be considered
void from its inception. You will receive a refund equal to the sum of:
(1) the difference between any payments made, including fees and charges, and
the amounts allocated to the Separate Account;
(2) the Surrender Value (on the date the cancellation request is received by
the Company) attributable to the amounts allocated to the Separate
Account; and
(3) any fees or charges imposed on amounts in the Separate Account.
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Adjustable Death Benefit Payable at the Death of the Insured, if the
Insured Dies Before the Maturity Date and
While the Policy is In Force.
Flexible Premiums Payable During the Lifetime of the Insured Until the
Maturity Date.
Surrender Value Payable on the Maturity Date if the Policy has not
Terminated.
Nonparticipating - No Dividends.
<PAGE>
TABLE OF CONTENTS
Part
POLICY SPECIFICATIONS
DEFINITIONS
GENERAL PROVISIONS
The Policy
Policy Specifications
Maturity Date
Policyowner
Beneficiary
Change of Policyowner or Beneficiary
Misstatement of Age
Incontestability
Suicide
Assignment
Termination
Nonparticipation
Annual Statement
Illustration of Benefits and Values
PREMIUM PROVISIONS
Premiums
Maximum Premium
Premium Charge
Tax Expense Charge
Net Premium and Allocation of Net Premiums
Allocation
Planned Periodic Premiums
Unscheduled Premiums
Grace Period
Reinstatement
PROCEEDS
General
Policy Settlement
DEATH BENEFIT PROVISIONS
Death Benefit
Changing the Death Benefit Option
Changing the Specified Amount
DEFINITION OF LIFE INSURANCE TEST
POLICY VALUE PROVISIONS
Calculation of Policy Value
Accumulation Unit
Net Investment Factor
Fixed Account
Separate Account
Monthly Deductions
Monthly Cost of Insurance Rates
Basis of Computation
Transfers
<PAGE>
TABLE OF CONTENTS (CONTINUED)
Part
SURRENDER PROVISIONS
Surrender Value
Surrender of the Policy
Partial Withdrawals
POSTPONEMENT OF PAYMENTS
CONVERSION PROVISION
POLICY LOANS
General
Loan Interest Rate
Preferred Loan
Federal Tax Considerations
INCOME SETTLEMENT OPTIONS
Alternate Life Income
Payment Provisions
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
OPTION 1. INSTALLMENTS FOR
A SPECIFIED PERIOD -
SETTLEMENT OPTION RATES
</TABLE>
<TABLE>
<CAPTION>
Years
Monthly Income
<S> <C>
1 $ 84.47
2 42.86
3 28.99
4 22.06
5 17.91
6 15.14
7 13.16
8 11.68
9 10.53
10 9.61
11 8.86
12 8.24
13 7.71
14 7.26
15 6.87
16 6.53
17 6.23
18 5.96
19 5.73
20 5.51
21 5.32
22 5.15
23 4.99
24 4.84
25 4.71
26 4.59
27 4.47
28 4.37
29 4.27
30 4.18
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
The first Income Payment is made on the contract's Income Date.
</TABLE>
<PAGE>
OPTION 2. LIFE INCOME - SETTLEMENT OPTION RATES
OPTION 5. LIFE INCOME WITH INSTALMENT REFUND - SETTLEMENT OPTION RATES
<TABLE>
<CAPTION>
LIFE 5 Yrs 10 Yrs 20 Yrs Instl
AGE ONLY C & L* C & L C & L Refnd AGE
<S> <C> <C> <C> <C> <C> <C>
50 $3.76 $3.75 $3.74 $3.70 $3.68 50
51 3.81 3.81 3.80 3.74 3.72 51
52 3.87 3.87 3.85 3.79 3.77 52
53 3.93 3.93 3.91 3.84 3.83 53
54 3.99 3.99 3.97 3.90 3.88 54
55 4.06 4.05 4.04 3.95 3.94 55
56 4.13 4.12 4.10 4.01 4.00 56
57 4.21 4.20 4.18 4.07 4.06 57
58 4.29 4.28 4.25 4.13 4.12 58
59 4.37 4.36 4.33 4.19 4.19 59
60 4.46 4.45 4.41 4.25 4.26 60
61 4.55 4.54 4.50 4.32 4.34 61
62 4.65 4.64 4.60 4.39 4.42 62
63 4.76 4.75 4.69 4.45 4.50 63
64 4.88 4.86 4.80 4.52 4.59 64
65 5.00 4.98 4.91 4.59 4.68 65
66 5.13 5.10 5.02 4.66 4.78 66
67 5.27 5.24 5.14 4.73 4.88 67
68 5.41 5.38 5.27 4.80 4.99 68
69 5.57 5.53 5.41 4.87 5.10 69
70 5.74 5.70 5.55 4.93 5.22 70
71 5.92 5.87 5.69 4.99 5.35 71
72 6.12 6.05 5.85 5.05 5.48 72
73 6.33 6.25 6.00 5.11 5.62 73
74 6.55 6.46 6.17 5.16 5.77 74
75 6.79 6.68 6.34 5.21 5.93 75
76 7.05 6.92 6.52 5.26 6.09 76
77 7.33 7.17 6.70 5.30 6.26 77
78 7.62 7.43 6.88 5.33 6.44 78
79 7.94 7.71 7.06 5.36 6.63 79
80 8.28 8.00 7.25 5.39 6.84 80
81 8.65 8.31 7.44 5.42 7.05 81
82 9.04 8.64 7.62 5.44 7.27 82
83 9.46 8.98 7.80 5.45 7.51 83
84 9.92 9.34 7.98 5.47 7.75 84
85 10.41 9.72 8.15 5.48 8.01 85
</TABLE>
Rates for other ages are available upon request.
Age of annuitant is determined on an age-nearest-birthday basis.
The first Income Payment is made on the contract's Income Date.
* C & L is an abreviation for certain and life
<PAGE>
OPTION 6. JOINT LIFE INCOME AND 2/3 SURVIVOR,
10 YEARS CERTAIN BENEFITS - SETTLEMENT OPTION RATES
UNISEX1
UNISEX2 IS YOUNGER THAN UNISEX1 BY:
<TABLE>
<CAPTION>
AGE 10 Yr 9 Yr 8 Yr 7 Yr 6 Yr 5 Yr 4 Yr 3 Yr 2 Yr 1 Yr
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.62 $3.64 $3.67 $3.69 $3.72 $3.74 $3.77 $3.80 $3.83 $3.86
56 3.66 3.69 3.72 3.74 3.77 3.80 3.83 3.86 3.89 3.92
57 3.71 3.74 3.77 3.80 3.83 3.85 3.89 3.92 3.95 3.98
58 3.76 3.79 3.82 3.85 3.88 3.91 3.95 3.98 4.01 4.05
59 3.82 3.85 3.88 3.91 3.94 3.98 4.01 4.04 4.08 4.12
60 3.88 3.91 3.94 3.97 4.01 4.04 4.08 4.11 4.15 4.19
61 3.94 3.97 4.00 4.04 4.07 4.11 4.15 4.19 4.23 4.27
62 4.00 4.04 4.07 4.11 4.15 4.18 4.22 4.26 4.31 4.35
63 4.07 4.10 4.14 4.18 4.22 4.26 4.30 4.35 4.39 4.43
64 4.14 4.18 4.22 4.26 4.30 4.34 4.39 4.43 4.48 4.53
65 4.21 4.25 4.29 4.34 4.38 4.43 4.48 4.52 4.57 4.62
66 4.29 4.33 4.38 4.42 4.47 4.52 4.57 4.62 4.67 4.73
67 4.37 4.42 4.46 4.51 4.56 4.62 4.67 4.72 4.78 4.83
68 4.46 4.50 4.56 4.61 4.66 4.72 4.77 4.83 4.89 4.95
69 4.55 4.60 4.65 4.71 4.76 4.82 4.88 4.94 5.00 5.07
70 4.64 4.70 4.75 4.81 4.87 4.94 5.00 5.06 5.13 5.19
71 4.74 4.80 4.86 4.92 4.99 5.05 5.12 5.19 5.26 5.33
72 4.85 4.91 4.97 5.04 5.11 5.18 5.25 5.32 5.39 5.46
73 4.96 5.03 5.09 5.16 5.24 5.31 5.38 5.46 5.53 5.61
74 5.07 5.15 5.22 5.29 5.37 5.45 5.52 5.60 5.68 5.76
75 5.20 5.27 5.35 5.43 5.51 5.59 5.67 5.76 5.84 5.92
76 5.33 5.41 5.49 5.57 5.65 5.74 5.83 5.92 6.00 6.09
77 5.46 5.54 5.63 5.72 5.81 5.90 5.99 6.08 6.17 6.26
78 5.60 5.69 5.78 5.87 5.97 6.06 6.16 6.25 6.35 6.44
79 5.75 5.84 5.94 6.03 6.13 6.23 6.33 6.43 6.53 6.62
80 5.90 6.00 6.10 6.20 6.30 6.41 6.51 6.61 6.71 6.81
81 6.06 6.16 6.26 6.37 6.48 6.58 6.69 6.80 6.90 7.00
82 6.22 6.33 6.44 6.55 6.66 6.77 6.88 6.99 7.09 7.19
83 6.39 6.50 6.61 6.73 6.84 6.95 7.07 7.18 7.28 7.39
84 6.56 6.67 6.79 6.91 7.03 7.14 7.26 7.37 7.47 7.58
85 6.73 6.85 6.97 7.09 7.21 7.33 7.45 7.56 7.66 7.76
</TABLE>
Rates for other ages are available upon request.
Age of annuitant is determined on an age-nearest-birthday basis.
The first Income Payment is made on the contract's Income Date.
<PAGE>
OPTION 6. JOINT LIFE INCOME AND 2/3 SURVIVOR,
10 YEARS CERTAIN BENEFITS - SETTLEMENT OPTION RATES CONT.
UNISEX1
UNISEX2 IS OLDER THAN UNISEX1 BY:
<TABLE>
<CAPTION>
AGE {SAME AGE 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr}
<S> <C> <C> <C> <C> <C> <C>
55 $3.89 $3.92 $3.95 $3.98 $4.01 $4.04
56 3.95 3.98 4.01 4.04 4.08 4.11
57 4.01 4.05 4.08 4.11 4.15 4.18
58 4.08 4.12 4.15 4.19 4.22 4.26
59 4.15 4.19 4.23 4.26 4.30 4.34
60 4.23 4.27 4.31 4.35 4.39 4.43
61 4.31 4.35 4.39 4.43 4.48 4.52
62 4.39 4.43 4.48 4.52 4.57 4.62
63 4.48 4.53 4.57 4.62 4.67 4.72
64 4.57 4.62 4.67 4.72 4.77 4.82
65 4.67 4.73 4.78 4.83 4.88 4.94
66 4.78 4.83 4.89 4.94 5.00 5.05
67 4.89 4.95 5.00 5.06 5.12 5.18
68 5.01 5.07 5.13 5.19 5.25 5.31
69 5.13 5.19 5.26 5.32 5.38 5.45
70 5.26 5.33 5.39 5.46 5.52 5.59
71 5.39 5.46 5.53 5.60 5.67 5.74
72 5.54 5.61 5.68 5.76 5.83 5.90
73 5.69 5.76 5.84 5.92 5.99 6.06
74 5.84 5.92 6.00 6.08 6.16 6.23
75 6.01 6.09 6.17 6.25 6.33 6.41
76 6.18 6.26 6.35 6.43 6.51 6.58
77 6.35 6.44 6.53 6.61 6.69 6.77
78 6.53 6.62 6.71 6.80 6.88 6.95
79 6.72 6.81 6.90 6.99 7.07 7.14
80 6.91 7.00 7.09 7.18 7.26 7.33
81 7.10 7.19 7.28 7.37 7.45 7.52
82 7.29 7.39 7.47 7.56 7.63 7.70
83 7.48 7.58 7.66 7.74 7.82 7.88
84 7.67 7.76 7.85 7.92 7.99 8.06
85 7.86 7.94 8.02 8.10 8.17 8.23
</TABLE>
Rates for other ages are available upon request.
Age of annuitant is determined on an age-nearest-birthday basis.
The first Income Payment is made on the contract's Income Date.
<PAGE>
DEFINITIONS
ACCUMULATION UNIT - A measure of Your interest in a Sub-Account.
AGE - The Insured's age as of the nearest birthday.
BENEFICIARY - The person(s) or entity(ies) designated to receive the
Proceeds upon the death of the Insured.
COMPANY - C.M. Life Insurance Company, a stock life insurance company
incorporated under the laws of the State of Connecticut, and a wholly-
owned subsidiary of Connecticut Mutual Life Insurance Company.
DELIVERY RECEIPT - An acknowledgment, signed by the Policyowner and
returned to C.M. Life's Service Center, stating that the Policyowner has
received the Policy.
FIXED ACCOUNT - An account that bears interest at an effective annual
rate determined by C.M. Life, but guaranteed to be no lower than as
shown in the Policy Specifications. Amounts allocated to the Fixed
Account will be part of the General Account of C.M. Life.
GENERAL ACCOUNT - All assets of C.M. Life other than those held in a
separate investment account.
GUIDELINE MINIMUM DEATH BENEFIT - The minimum Death Benefit required to
qualify the Policy as life insurance under Federal Tax laws.
IN FORCE - The status of this Policy after coverage has begun and prior
to termination.
LOAN VALUE - The maximum amount that may be borrowed under the Policy.
The Loan Value equals the Policy Value as of the date of the loan less
any outstanding Policy Debt and less loan interest projected to the next
Policy Anniversary at the then current Loan Interest Rate.
MODE, PREMIUM MODE - The frequency Planned Periodic Premiums are billed.
MONTHLY DEDUCTION - Charges deducted monthly from the Policy Value prior
to the Maturity Date. The charges include the monthly cost of
insurance, the monthly cost of any benefits provided by riders, and the
monthly administrative charge.
NET PREMIUM - An amount equal to the premium payment made less a tax
expense charge and any applicable premium charge.
POLICY CHANGE - Any change in the Specified Amount, the addition or
deletion of a rider, or a change in the Death Benefit Option and certain
changes in Underwriting Class.
POLICY DATE - The date set forth in the Policy used to determine the
Monthly Payment Date, Policy Months, Policy Years, and Policy
Anniversaries.
POLICY DEBT - All unpaid Policy loans plus interest currently due or
accrued on such loans.
POLICY VALUE - The total amount available for allocation under this
Policy at any time. It is equal to the sum of (a) the value of the
Accumulation Units credited to a Policy in the Sub-Accounts and (b) the
value held in the Fixed Account credited to that Policy.
POLICY YEAR, POLICY ANNIVERSARY, POLICY MONTH, MONTHLY ANNIVERSARY - Are
computed from the Policy Date.
Example:
Assume the Policy Date is September 15 of a given year. Then:
the first Policy Month begins on September 15.
the 15th of each succeeding month will be a Monthly Anniversary and
the beginning of a new Policy Month.
the first Policy Year begins on September 15.
the first Policy Anniversary is September 15 of the following year.
PROCEEDS - Prior to the Maturity Date, upon the death of the Insured,
the Proceeds equal the amount calculated under the chosen Death Benefit
Option (two Death Benefit Options, referred to throughout as "Option 1"
or "Option 2", are available), less Policy Debt outstanding at the time
of the Insured's death and less any due and unpaid Monthly Deductions.
On the Maturity Date, or upon surrender, the Proceeds will equal the
Surrender Value of the Policy.
PRO RATA ALLOCATION - A method of allocating amounts to or from the
Fixed Account and the Sub-Accounts that contain Policy Value. Each
account will be allocated a percentage of the total amount to be
allocated, and that percentage will be equal to the percentage of the
total Policy Value less Policy Debt that is contained in that account.
SEPARATE ACCOUNT - The separate investment account called "C.M. Life
Variable Life Separate Account I." Established by C.M. Life under the
laws of the State of Connecticut, the Separate Account is registered as
a unit investment trust under the Investment Act of 1940, as amended.
The Separate Account will be used to receive and invest premiums for the
Policy and it may also be used for other variable life insurance
policies that C.M. Life may issue.
SERVICE CENTER - the location where this Policy is administered as shown
in the Policy Specifications.
SPECIFIED AMOUNT - the Specified Amount of this Policy is shown in the
Policy Specifications.
SUB-ACCOUNT - A division of the Separate Account. Each Sub-Account
invests exclusively in the shares of a corresponding underlying fund.
SURRENDER VALUE - The Policy Value less Policy Debt.
TARGET PREMIUM - A premium amount used to determine premium charges for
the Policy. Target Premiums vary by the Insured's Age, Underwriting
Class, and tobacco status.
VALUATION DATE - A day on which the net asset value of the shares of the
underlying funds of the Separate Account We offer under the Policy is
determined and Accumulation Unit values of the Sub-Accounts are
determined. Valuation Dates generally occur on each day on which the
New York Stock Exchange is open for trading and such other days (other
than a day during which no payment, partial withdrawal or surrender of
the Policy is received) when there is a sufficient degree of trading in
the securities of any of the funds (or unless the Securities and
Exchange Commission determines that an emergency exists), such that the
current asset value of the Sub-Accounts may be materially affected.
VALUATION PERIOD - The interval between two consecutive Valuation Dates.
WE, OUR, US - The Company.
WRITTEN REQUEST - A request by the Policyowner in writing in a form
satisfactory to C.M. Life.
YOU, YOUR - The Policyowner, as shown in the application for this
Policy.
GENERAL PROVISIONS
THE POLICY
The Policy and the application, including subsequent applications
requesting changes in the Policy, constitute the entire contract. A
copy of the initial application is attached to and made a part of this
Policy. Any subse-quent applications will be mailed to You for
attachment to this Policy. This contract is made in consideration of
the application(s) and the payment of premiums as provided in this
Policy.
All statements in the application will be deemed representations
and not warranties.
No statement will be used to void this Policy or to defend against
a claim under it unless contained in the application.
Our agents have no authority to alter or modify any of the terms of
this Policy. They have no authority to waive any of its provisions.
Only the President or the Secretary of the Company may modify the
provisions of this Policy, and then only in writing.
POLICY SPECIFICATIONS
The initial Policy Specifications are attached to this Policy at issue.
When needed, due to a Policy Change, We will mail to You, for attachment
to this Policy, new Policy Specifications.
MATURITY DATE
The Maturity Date is the Policy Anniversary nearest the Insured's 95th
birthday. The Maturity Date is the latest date on which a premium
payment may be made. However, this Policy may terminate prior to the
Maturity Date, as provided in the Termination provision.
POLICYOWNER
The Policyowner has the exclusive right to exercise all rights and
privileges and to receive all benefits under the Policy during the
lifetime of the Insured. If the Policyowner is an individual and if no
Policyowner designated under this Policy is living and if the Policy
does not provide otherwise, the Policyowner will be the estate of the
last Policyowner to die.
BENEFICIARY
If no Beneficiary designated under this Policy survives the
Insured, the Beneficiary will be the Policyowner.
The interest of any Beneficiary will be subject to:
(1) Any assignment of this Policy which is binding on Us.
(2) Any optional settlement agreement in effect at the Insured's
death.
CHANGE OF POLICYOWNER OR BENEFICIARY
While the Insured is alive, You can change the Policyowner or
Beneficiary by Written Request.
The change will take effect on the date You signed the request
whether or not the Insured is living when We receive the request at
the Service Center. However, the change will be subject to any
payment made or actions taken by Us before receiving the request.
MISSTATEMENT OF AGE
The Insured's Age may be adjusted at any time to correct a misstatement
of Age. Any benefit provided by this Policy will be determined based on
the Insured's correct Age. The future charges for this Policy will also
be adjusted to reflect the Insured's correct Age.
INCONTESTABILITY
With respect to statements made in the initial
application: this Policy will be incontestable after it
has been In Force during the lifetime of the Insured for a
period of two years from its Date of Issue.
With respect to statements made in a subsequent
application: any increase in Death Benefit based on such
application will be incontestable after this Policy has
been In Force during the lifetime of the Insured for two
years following the Date of Issue of such increase.
With respect to any statements made in an application for any extra
benefit rider: the incontestability pro-visions of the rider will
apply.
With respect to statements made in the reinstatement application:
this Policy will be incontestable after it has been In Force during
the lifetime of the Insured for a period of two years from the date of
reinstatement.
SUICIDE
If the Insured dies by suicide, while sane or insane,
within two years from the Date of Issue, We will return to
the Policyowner premiums paid less any Policy Debt
outstanding on the date of death.
If the Insured dies by suicide, while sane or insane,
within two years of the date of reinstatement of this
Policy, the refund will be limited to the premiums paid
since reinstatement less any Policy Debt outstanding on
the date of death, and less any partial withdrawals made
since the date of reinstatement.
If the Insured dies by suicide, while sane or insane, more than two
years from the Date of Issue, but within two years from the date of
any Policy Change resulting from a subsequent application, the refund,
with respect to any increase in Death Benefit arising from such
change, will be limited to the Cost of Insurance attributable to such
increase.
ASSIGNMENT
Written notice of the terms of a transfer or a copy of any assignment
must be filed at Our Service Center. Until We receive such notice, We
will not be required to take notice of, or be responsible for, any
transfer of interest in this Policy by an assignment, agreement or
otherwise.
We will not be responsible for the validity of any assignment.
Any assignment made after the Insured's death will be valid only
with Our consent.
TERMINATION
All coverage under this Policy will terminate when any one of the
following events occurs:
(1) the Policy is surrendered;
(2) the Insured dies;
(3) the Policy matures; or
(4) the required premium is not paid as described in the Grace Period
provision.
When this Policy terminates, any Proceeds due will be paid to the Owner
or Beneficiary in full settlement of Our liability under this Policy.
We may require return of this Policy.
NONPARTICIPATION
This Policy is nonparticipating and will not share in Our profits or
surplus earnings. We will pay no dividends on this Policy.
ANNUAL STATEMENT
At least once a year We will mail an annual report to You at Your last
known address. This report will include the following information as of
the Policy Anniversary:
(1) the Policy Value in the Fixed Account and in each Sub-Account of
the Separate Account;
(2) any transfers and withdrawals;
(2) the Surrender Value;
(3) premiums paid and Monthly Deductions made during the Policy Year;
(4) existing Policy Debt;
(5) changes in the Guideline Premiums, if applicable; and
(6) any other information required by law.
ILLUSTRATION OF BENEFITS AND VALUES
Upon Written Request We will send You an illustration of projected
future benefits and values under the Policy. This illustration will be
based upon such assumptions as You may specify, as may be permitted by
law. We may limit the number of such illustrations in any Policy Year.
We reserve the right to charge a reasonable fee to produce an
illustration.
PREMIUM PROVISIONS
PREMIUMS
Premiums are payable directly to the Company. Premiums may be paid at
any time prior to the Maturity Date to the Service Center. This Policy
will not be In Force until the first premium is paid. No premium
payment may be less than $100 without the Company's consent.
MAXIMUM PREMIUM
The maximum premium will depend on the Definition of Life Insurance Test
elected in the application for this Policy. We reserve the right to
refuse any premium payment that would increase the net amount at risk.
If the Guideline Premium Test is chosen, the sum of the premiums paid
less any partial withdrawals may not exceed the greater of:
the guideline single premium; or
the sum of the guideline level premiums to the date of payment.
The amount of the guideline premiums are shown in the Policy
Specifications. The guideline premiums will change whenever there is a
Policy Change. If the guideline premiums change, We will send new
Policy Specifications showing the new guideline premiums. These premium
limitations do not apply to the extent premiums are necessary to prevent
lapse of the Policy during the Policy Year.
The guideline premiums are determined according to the rules set forth
in the Federal tax law. The
guideline premiums will be adjusted to conform to any changes in the
Federal tax law.
The total planned and unscheduled premium payments cannot exceed limits
set by the Company. Premiums received in excess of the Company's limits
will be returned to You no later than 60 days after the end of the
applicable Policy Year. If this excess amount plus interest is not
refunded by then, the Death Benefit under the Policy shall be increased
retroactively so that at no time is the Death Benefit ever less than the
amount needed to ensure qualification as a life insurance contract for
Federal tax purposes.
PREMIUM CHARGE
A premium charge will be applied to premiums received during the first
seven Policy Years after the issuance of the Policy or an increase in
Specified Amount. The maximum premium charge for this Policy is shown
in the Policy Specifications. During the first seven Policy Years,
after the issuance of the Policy or an increase in Specified Amount, the
premium charge will be assessed against premiums received during the
Policy Year, up to the annual Target Premium for the Policy or the
increase. If more than the Target Premium for the Policy or the
increase is paid in a Policy Year, there will be no premium charge
applied to the premium in excess of the Target Premium.
In the event of an increase in Specified Amount, premium payments will
be pro rated between the original Specified Amount and the increase in
Specified Amount using the Target Premium for each to determine the pro
rata split.
TAX EXPENSE CHARGE
A tax expense charge will be deducted from each premium payment. The
current tax expense charge is shown in the Policy Specifications. The
charge is to compensate the Company for state and local premium taxes
assessed in connection with this Policy. Since state and local premium
taxes vary by jurisdiction, the charge is meant to approximate an
overall average tax rate paid by the Company. We reserve the right to
increase or decrease the tax expense charge to reflect changes in the
premium taxes paid by the Company. We also reserve the right to charge
for deferred acquisition tax charges.
NET PREMIUM AND ALLOCATION OF NET PREMIUMS
The Net Premium equals the premium paid less the current tax expense
charge and any applicable premium charge. In the application for this
Policy, You indicate the initial allocation of Net Premiums among the
Fixed Account and the Sub-Accounts of the Separate Account. There are
no limitations concerning the number of Sub-Accounts to which Net
Premiums may be allocated. Allocation percentages must be in whole
numbers and must total 100%.
You may change the allocation of future Net Premiums at any time
pursuant to written or telephone request. If allocation changes by
telephone are elected by the Policyowner, a properly completed
authorization form must be on file at Our Service Center before
telephone requests will be honored. C.M. Life and its agents and
affiliates will not be responsible for losses resulting from acting upon
telephone requests reasonably believed to be genuine. C.M. Life will
employ reasonable procedures to confirm that instructions communicated
by telephone are genuine. Otherwise, We may be liable for any losses
due to unauthorized or fraudulent instructions. The procedures We
follow for transactions initiated by telephone include requirements that
a Policyowner wanting to make such a change identify themselves by name
and identify a personal identification number. All transfer
instructions by telephone may be tape recorded as an additional
safeguard.
The Company reserves the right the charge a fee of $25 for transfers.
ALLOCATION
If a premium is paid with the application or at any time prior to
delivery of the Policy, the Net Premium will be placed in the General
Account on the date it is received at Our Service Center. Upon issuance
of the Policy the Net Premium in the General Account will be allocated
to one or more of the Sub-Accounts of the Separate or Fixed Account, or
to any combination of these accounts in accordance with Your premium
allocation instructions.
PLANNED PERIODIC PREMIUMS
We will send reminder notices for the Planned Periodic Premiums based on
the amount and mode of such premiums as indicated in the Policy
Specifications. We may suspend the notices if premiums are not being
paid. We will also suspend the notices upon Your Written Request. With
Our consent, You may change the mode or the amount of these premiums by
filing a Written Request. Any change in the Planned Periodic Premium
amount is subject to the minimum required by Company rules. We may also
limit the amount of an increase.
If premiums are discontinued, We will continue to make Monthly
Deductions from the Policy Value and this Policy will stay In Force
subject to the Grace Period provision.
UNSCHEDULED PREMIUMS
Any premium We receive under this Policy in an amount different from the
Planned Periodic Premium will be considered an unscheduled premium.
Unscheduled premium payments can be made at any time while this Policy
is In Force.
GRACE PERIOD
If on any Monthly Anniversary, the Policy Debt is greater than the
Policy Value, or the Policy Value is less than or is equal to zero, then
this Policy will enter the Grace Period. This Policy will not enter the
Grace Period, if on any Monthly Anniversary, the Policy Debt is less
than or equal to the Policy Value, and the Policy Value is greater than
zero.
If this Policy enters the Grace Period on any Monthly Anniversary, a
premium will be due 62 days after such Monthly Anniversary. During this
62 day period, the Policy will stay In Force. Notice of the required
premium will be mailed to You at Your last known address and, if You
have so requested, to any assignee of record. If the required premium
is not paid by the due date, this Policy will lapse without value on the
later of:
(1) 62 days after the written notice is mailed; or
(2) 62 days after this Policy enters the Grace Period.
REINSTATEMENT
If this Policy terminates other than by maturity, surrender or death of
the Insured, You may reinstate it prior to the Maturity Date within 3
years after default in premium payment. We must receive:
(1) a written application for reinstatement;
(2) evidence of insurability satisfactory to Us; and
(3) the greater of one planned periodic premium or a Net Premium
sufficient to cover 3 Monthly Deductions at an amount equal to the
last Monthly Deduction just prior to the lapse of this Policy.
This Policy will be reinstated on the Monthly Anniversary following Our
approval. The Policy Value on the date of reinstatement will be:
(1) the Net Premium paid to reinstate the Policy increased by interest
from the date the payment is received at Our Service Center; plus
(2) an amount equal to the Policy Value less any Policy Debt on the
lapse date; less
(3) the Monthly Deduction due on the date of reinstatement.
You may not reinstate any Policy Debt outstanding on the lapse date.
The premium paid on reinstatement will be allocated to the Fixed Account
and the Sub-Accounts of the Separate Account in accordance with Your
most recent premium allocation request.
PROCEEDS
GENERAL
Proceeds means the amount payable under this Policy on the Maturity
Date, upon its prior surrender, or at the death of the Insured.
If the Insured is alive on the Maturity Date, or this Policy is
surrendered before the Maturity Date, the Proceeds will be the
Surrender Value on that Date.
The Proceeds on the death of the Insured will be the
Death Benefit less any Policy Debt and less due and unpaid
Monthly Deductions. The Death Benefit is described in the
Death Benefit provision.
The Company will pay the death Proceeds to the Beneficiary when We receive at
Our Service Center due proof of
the Insured's death while this Policy was In Force.
POLICY SETTLEMENT
All amounts payable by Us are payable only at Our Service Center.
Unless an optional settlement agreement is elected, Proceeds will
be paid in a single sum.
We may require the return of the Policy before paying Proceeds.
Interest will be paid on lump sum death Proceeds at a
rate not less than 3% per year or the minimum rate set by
law, if greater. Interest will be paid from the date of
death to the payment date except, when Option 2 is
elected, interest will be calculated on the Policy Value
portion of the death Proceeds from the date the Company
receives due proof of death to the payment date.
DEATH BENEFIT PROVISIONS
DEATH BENEFIT
The Death Benefit depends on the Death Benefit Option in effect on the
date of death.
OPTION 1:
The Death Benefit is the Specified Amount on the date of death, or
if greater, the Guideline Minimum Death Benefit.
OPTION 2:
The Death Benefit is the Specified Amount on the date of death plus
the Policy Value on the date of receipt of due proof of death at the
Service Center, or if greater, the Guideline Minimum Death Benefit.
The Death Benefit is the Specified Amount on the date of death plus the
Policy Value on the date of receipt of due proof of death at the Service
Center, or if greater, the Guideline Minimum Death Benefit.
The Death Benefit Option and initial Specified Amount elected in the
application are shown in the Policy Specifications. Either or both may
be changed as described below.
CHANGING THE DEATH BENEFIT OPTION
You may change the Death Benefit Option in effect by Written Request.
Any change will be effective on the Monthly Anniversary on or next
following the date We approve the request. You may specify a later
effective date. A change in the Death Benefit Option is subject to the
following conditions:
(1) If the change is from Option 1 to Option 2, the Specified Amount
will be reduced by an amount equal to the Policy Value as of the
effective date of change. The Specified Amount in effect after any
reduction must be at least as great as the minimum Specified Amount
shown in the Policy Specifications.
(2) If the change is from Option 2 to Option 1, the Specified Amount
will be increased to equal the Death Benefit which would have been
payable under Option 2 on the effective date of change.
(3) We may limit the number of Death Benefit Option changes in any
Policy Year.
We may require evidence of insurability satisfactory to Us for any Death
Benefit Option change. Also, We may charge up to $25 for any change.
CHANGING THE SPECIFIED AMOUNT
The existing Specified Amount may be increased or decreased by Written
Request. Any change will be effec-tive on the Monthly Anniversary on or
next following the date We approve the request, unless You specify a
later date. We may limit the number and size of changes in a Policy
Year.
A decrease in the Specified Amount is subject to the following
conditions:
(1) No decrease is permitted prior to the third Policy Anniversary.
(2) No decrease is permitted within three years following the
effective date of any increase.
(3) The Specified Amount in effect after any decrease must be at least
as great as the Minimum Specified Amount shown in the Policy
Specifications.
(4) Any decrease will reduce the Specified Amount in the
following order:
(a) first, it will reduce the most recent increase;
(b) next, it will reduce the next most recent increase(s)
successively; and
(c) finally, it will reduce the Specified Amount.
An increase in the Specified Amount is subject to the following
conditions:
(1) Submission of an application for increase and satisfactory
evidence of insurability of the Insured.
(2) If the Surrender Value is insufficient to continue the Policy In
Force for three months at current rates of mortality and interest,
a Net Premium sufficient to increase the Surrender Value to an
amount equal to three Monthly Deductions is required.
(3) No increase may be made after the Policy Anniversary on or next
following the Insured's Age 75.
(4) The minimum amount of any increase in Specified Amount is shown in
the Policy Specifications.
DEFINITION OF LIFE INSURANCE TEST
At application for this Policy, the Policyowner must choose one of two
tests to be used to determine if the Policy qualifies as life insurance
under Section 7702 of the Internal Revenue Code. The test cannot be
changed once the Policy is issued. Currently, the two tests are:
(1) the Guideline Premium Test; and
(2) the Cash Value Accumulation Test.
Under the Guideline Premium Test, the Death Benefit must be greater than
or equal to the product of the Policy Value and the Death Benefit Factor
for the Insured's Age. If this test is chosen, the Death Benefit Factor
will be shown in the Policy Specifications. If this is chosen, there
are maximum premium limitations described in detail in the Policy
Specifications.
Under the Cash Value Accumulation Test, the Policy Value can never be
greater than the net single premium, calculated using guaranteed cost of
insurance rates and 4% interest, for the Death Benefit otherwise
calculated under the Policy. There are no maximum premium limitations
imposed under this test.
Under both tests, if the Death Benefit is not sufficient to satisfy the
test, it will be increased to the amount necessary to satisfy the test.
That Death Benefit amount will be referred to as the Guideline Minimum
Death Benefit. The Definition of Life Insurance Test chosen is shown in
the Policy Specifications.
POLICY VALUE PROVISIONS
The Policy Value is the total amount available for allocation and is
equal to the sum of the accumulation in the Fixed Account and the value
of the Accumulation Units in the Sub-Accounts. There is no guaranteed
minimum Policy Value. Because Policy Value on any date depends upon a
number of variables, it cannot be predetermined.
Policy Value and Surrender Value will reflect frequency and amount of
Net Premiums paid, interest credited to accumulation in the Fixed
Account, the investment performance of the chosen Sub-Accounts, any
partial withdrawals, any loans, any loan repayments, any loan interest
paid or credited, and any charges assessed in connection with this
Policy.
CALCULATION OF POLICY VALUE
The Policy Value is determined first on the Date of Issue and thereafter
on each Valuation Date. On the Date of Issue, the Policy Value will be
the Net Premiums received, plus any interest earned during the period
when premiums are held in the General Account (before being transferred
to the Separate Account or the Fixed Account), less any Monthly
Deductions due.
On each Valuation Date after the Date of Issue the Policy Value will be:
(1) the aggregate of the values in each of the Sub-Accounts on the
Valuation Date, determined for each Sub-Account by multiplying the
value of an Accumulation Unit in that Sub-Account on that date by
the number of such Accumulations Units allocated to the Policy; plus
(2) the value in the Fixed Account allocated to the Policy.
Thus, the Policy Value is determined by multiplying the number of
Accumulation Units in each Sub-Account by the value of the applicable
Accumulation Units on the particular Valuation Date, adding the results,
and adding the amount in the Fixed Account allocated to this Policy, if
any.
ACCUMULATION UNIT
Each Net Premium payment is allocated to either the Sub-Account(s) or
the Fixed Account in accordance with Your instruction. Allocations to
the Sub-Accounts are credited to the Policy in the form of Accumulation
Units. Accumulation Units are credited separately for each Sub-Account.
The number of Accumulation Units for each Sub-Account credited to the
Policy is equal to the portion of the Net Premium allocated to the Sub-
Account, divided by the dollar value of the applicable Accumulation Unit
as of the Valuation Date the payment is received at Our Service Center.
The number of Accumulation Units will remain fixed unless changed by a
subsequent split of Accumulation Unit value, transfer, partial
withdrawal or surrender. In addition, if C.M. Life is deducting the
Monthly Deduction or other charges from a Sub-Account, each such
deduction will result in cancellation of a number of Accumulation Units
equal in value to the amount deducted.
The dollar value of an Accumulation Unit of each Sub-Account varies from
Valuation Date to Valuation Date based on the investment experience of
that Sub-Account. That experience, in turn, will reflect the investment
performance, expenses and charges of the respective Funds. The dollar
value of an Accumulation Unit on a given Valuation Date is determined by
multiplying the dollar value of the corresponding Accumulation Unit as
of the immediately preceding Valuation Date by the appropriate net
investment factor.
NET INVESTMENT FACTOR
The net investment factor measures the investment performance of a Sub-
Account of the Separate Account during the Valuation Period just ended.
The net investment factor for each Sub-Account is equal to 1.0000 plus
the number arrived at by dividing (a) by (b) and subtracting (c) and (d)
from the result, where:
(a) is the investment income of that Sub-Account for the Valuation
Period, plus capital gains, realized or unrealized, credited during
the Valuation Period; minus capital losses, realized or unrealized,
charged during the Valuation Period; adjusted for provisions made
for taxes, if any;
(b) is the value of that Sub-Account's assets at the beginning of the
Valuation Period;
(c) is a charge for each day in the Valuation Period for mortality and
expense risks. This charge may be increased or decreased by C.M.
Life, but may not exceed, on an annual basis, the amount shown in
the Policy Specifications of the daily net asset value of the Sub-
Account; and
(d) is the Separate Account administrative charge for each day in the
Valuation Period equal, on an annual basis, to the percentage shown
in the Policy Specifications of the daily net asset value of that
Sub-Account. This charge is applicable only during the first
twenty Policy Years.
The net investment factor may be greater or less than one (1).
Therefore, the value of an Accumulation Unit may increase or decrease.
You bear the investment risk.
FIXED ACCOUNT
Amounts allocated to the Fixed Account will be part of the General
Account.
On the date of receipt of an amount to be allocated, We will credit
interest separately to that portion of the Policy Value equal to any
existing Policy Debt and to the balance of the Policy Value in the Fixed
Account. The balance of the Policy Value in the Fixed Account will be
credited with interest at rates to be declared by Us. They will be
declared in advance and will not be less than the Guaranteed Interest
Rate which is shown in the Policy Specifications.
All interest rates stated are effective annual rates. They will be
applied to properly reflect the date of receipt of any Planned Periodic
Premiums, unscheduled premiums and any changes in Policy Debt during a
Policy Month.
The interest credited on the portion of the value in the Fixed Account
equal to the Policy Debt, is the loan rate less the Loan Interest Spread
shown in the Policy Specifications or the Fixed Account guaranteed rate,
whichever is greater.
SEPARATE ACCOUNT
The Policy Value may vary if allocated to the Sub-Accounts of the
Separate Account. The Separate Account is separate from the Company's
General Account and the Fixed Account. That portion of the assets of
the Separate Account equal to the reserves and other liabilities of the
Policies which are supported by the Separate Account will not be charged
with liabilities that arise from any other business the Company
conducts.
The Company established the Separate Account to support variable life
insurance contracts. The Separate Account is registered with the
Securities and Exchange Commission (SEC) as a unit investment trust
under the Investment Company Act of 1940. It also is governed by the
laws of the State of Connecticut.
The Separate Account has several Sub-Accounts. The Company reserves the
right, subject to compliance with applicable law, to change the names of
the Separate Account or its Sub-Accounts. The Sub-Accounts in which You
initially chose to invest are shown in Your Initial Net Premium
Allocation Form attached to this Policy.
Each Sub-Account invests its assets in a separate registered investment
company or a separate series of a registered investment company or fund.
We reserve the right to add new sub-accounts and to restrict investments
in Sub-Accounts that We deem unsuitable for investment.
Income and realized and unrealized gains or losses from the assets of
each Sub-Account of the Separate Account are credited to or charged
against that Sub-Account without regard to income, gains, or losses in
the other Sub-Accounts of the Separate Account, the General Account or
any other separate accounts.
MONTHLY DEDUCTIONS
The Monthly Deduction will be made pro rata from the Fixed Account and
Sub-Accounts in which You have Policy Value on the Monthly Calculation
Date.
The Monthly Deduction consists of:
(1) the Monthly Cost of Insurance; plus
(2) the Monthly Administrative Charge; plus
(3) any monthly charge for certain Riders attached
to the Policy.
The Monthly Cost of Insurance is (1 x (2 - 3)) + (4 x 5) where:
(1) is the Monthly Cost of Insurance Rate per $1,000 divided by
1,000. (The Monthly Cost of Insurance Rate per $1,000 will not
exceed the Maximum Monthly Cost of Insurance Rate per $1,000 of
Net Amount at Risk shown in the Policy Specifications).
(2) is the Death Benefit on the Monthly Anniversary;
(3) is the Policy Value on the Monthly Anniversary;
(4) is any flat extra charge shown in the Policy Specifications
divided by 12.
(5) is the Specified Amount of this Policy as shown in the Policy
Specifications divided by 1,000.
The Monthly Administrative Charge is (1) + (2) where:
(1) is the Monthly Per Policy Charge (the Monthly Per Policy Charge
will not exceed the Maximum Monthly Per Policy Charge shown in
the Policy Specifications); and
(2) is the Monthly Per Thousand Charge. The Monthly Per Thousand
Charge is (a) times (b) where:
(a) is the Specified Amount of this Policy as shown in the Policy
Specifications divided by 1,000.
(b) is the Monthly Per Thousand Rate (The Monthly Per Thousand Rate
will not exceed the Maximum Monthly Per Thousand Rate shown in
the Policy Specifications).
MONTHLY COST OF INSURANCE RATES
Monthly Cost of Insurance Rates are determined by Us based on Our
expectations as to Our future mortality, investment, lapse and expense
experience. For the initial Specified Amount they will never be greater
than those shown in the Table of Maximum Monthly Cost of Insurance Rates
in the Policy Specifications.
If there has been an increase in the Specified Amount, a different
Monthly Cost of Insurance Rate may apply to the increase.
BASIS OF COMPUTATION
Maximum Monthly Cost of Insurance Rates are based on the 1980 CSO
Mortality Table B, and the Insured's tobacco and underwriting class
stated in the Policy Specifications.
TRANSFERS
Subject to the Company's then current rules, You may at any time
transfer Policy Value among the Sub-Accounts or between a Sub-Account
and the Fixed Account. The Policy Value held in the Fixed Account to
secure a Policy loan, however, may not be transferred.
All requests for transfers must be made to the Service Center. The
amount transferred will be based on the Policy Value in the Account(s)
next computed after receipt of the transfer order. C.M. Life will make
transfers pursuant to valid written or telephone request. As discussed
in the Net Premium and Allocation of Net Premiums provision of this
Policy, a properly completed authorization form must be on file at the
Service Center before telephone requests will be honored.
Only one transfer from the Fixed Account to the Separate Account may be
made per Policy Year. The transfer may not exceed Our percentage limit
as shown in the Policy Specifications. There will also be a ninety (90)
day waiting period between transfers out of the Fixed Account.
The Fixed Account and the Money Market Portfolio are competing
investment options. Transfers between these competing options will not
be permitted. For a period of ninety (90) days following a transfer
from one competing option, no transfer can be made to the other
competing option. For a period of 90 days following a transfer to one
competing option, no transfer can be made from the other competing
option.
The transfer privilege is subject to the consent of C.M. Life. We
reserve the right to impose limitations on transfers including, but not
limited to:
(1) the minimum amount that may be transferred;
(2) the minimum amount that may remain in a sub-account from which the
transfer is being made;
(3) the minimum period of time between transfers involving the Fixed
Account; and
(4) the maximum amount that may be transferred each time to or from the
Fixed Account.
You may make in any Policy Year, a number of transfers without charge.
This number is shown in the Policy Specifications. After the last
transfer made without charge, a charge of no more than the charge shown
in the Policy Specifications will be deducted from the amount
transferred for each transfer in that Policy Year. Any transfer made
with respect to a conversion privilege, Policy loan or material change
in investment policy will not incur a charge and will not count towards
Your number of free transfers.
SURRENDER PROVISIONS
SURRENDER OF THE POLICY
You may at any time surrender this policy and receive its Surrender
Value. The Surrender Value will be calculated as of the Valuation Date
on which a Written Request for surrender and this Policy are received at
the Service Center.
The Surrender Value may be paid in a single lump sum or under one or
more payment options currently offered by the Company, subject to any
state limitations. We will normally pay the Surrender Value within
seven days following receipt of the surrender request, but We may delay
payment under the circumstances described in the Postponement of
Payments provision in this Policy.
This Policy will terminate as of the date of surrender.
PARTIAL WITHDRAWALS
You may make a partial withdrawal from the Policy Value by sending Us
Your Written Request. The date of the partial withdrawal will be the
date the request is received at Our Service Center.
Partial withdrawals are subject to the following conditions:
(1) No partial withdrawals are permitted in the first three (3)
Policy Years.
(2) A maximum partial withdrawal may not exceed 90% of the
Surrender Value.
(3) Only one partial withdrawal is permitted per Policy Year.
(4) The minimum partial withdrawal is $1000.
(5) A fee will be charged for each partial withdrawal. The
Partial Withdrawal Charge is shown in the Policy Specifications.
(6) The Surrender Value after a partial withdrawal must be at
least $1,000.
The Policy Value on the date of a partial withdrawal is reduced by:
(1) The amount paid to You; plus
(2) The Partial Withdrawal Charge.
If the Death Benefit Option in effect on the date of a partial
withdrawal is Option 1, the Specified Amount will be reduced by the
reduction in Policy Value. The Specified Amount after the reduction
cannot be less than the minimum required by Company rules.
POSTPONEMENT OF PAYMENTS
Payments of any amount due from the Separate Account upon surrender,
partial withdrawals, or death of the Insured, as well as payments of a
Policy Loan and transfers may be postponed whenever:
(1) the New York Stock Exchange is closed other than customary weekend
and holiday closings; or
(2) trading on the New York Stock Exchange is restricted as determined
by the Securities and Exchange Commission; or
(3) an emergency exists, as determined by the Securities and Exchange
Commission, as a result of which disposal of securities is not
reasonably practicable or it is not reasonably practicable to
determine the value of the Separate Account's net assets.
Payments under the Policy of any amounts derived from the premiums paid
by check may be delayed until such time as the check has cleared Your
bank.
We also reserve the right to defer payments of any amount due from the
Fixed Account upon surrender, partial withdrawal or death of the
Insured, as well as payments of Policy loans and transfers from the
Fixed Account, for a period not to exceed six months.
CONVERSION PROVISION
Upon Your Written Request, while this Policy is In Force, You may
convert it to a flexible premium adjustable life insurance policy
currently offered by Us during the first 24 months after the Date of
Issue or after the effective date of an increase in the Specified
Amount.
The new policy will be issued:
(1) on the life of the Insured of this Policy;
(2) without evidence of insurability;
(3) with the underwriting class We then offer that is most similar
to the original policy;
(4) with the same Issue Age and Date of Issue as this Policy;
(5) with the same Specified Amount as this Policy;
(6) with fixed and guaranteed minimum benefits which had been
offered by the Company on the Date of Issue of the original
policy or on the effective date of an increase in Specified
Amount, whichever is applicable.
The periods in the suicide and incontestability provision of the
new policy will expire on the same date as such provisions in this
policy would have expired.
Any extra benefit rider will be available only with Our consent.
If this Policy is converted within 24 months after the Date of
Issue, You can transfer, without a charge, the Policy Value in the
Separate Account to the Fixed Account and simultaneously change Your
premium allocation instructions to allocate future premium payments to
the Fixed Account.
If this Policy is converted within 24 months after the effective
date of an increase, You can transfer, without charge, all or part of
the Policy Value in the Separate Account to the Fixed Account and
simultaneously change Your premium allocation instructions to allocate
all or part of future premium payments to the Fixed Account.
POLICY LOANS
GENERAL
At any time You may, by Written Request, borrow against this Policy. We
will lend You any sum up to the Policy's maximum loan value. The
maximum loan value is the Surrender Value on the date of the Policy loan
less projected interest, at the loan interest rate, to the end of the
Policy Year.
We reserve the right to inspect or endorse the Policy before making
the loan.
We may defer making a loan against the Policy Value in the Fixed
Account for a period not exceeding six months after You apply for it.
However, We will not defer the loan if it is to be used to pay any
premiums to Us.
The Policy will be the sole security for the loan. Lack of
endorsement will not indicate that the Policy is free of loans.
Any interest not paid when due will be added to the loan. Interest
is due and payable on the Policy Anni-versary.
Any Policy Debt may be repaid in whole or in part at any time while
this Policy is In Force.
Principal and interest are payable at Our Service Center.
Every payment to the Company will be considered a premium payment
unless clearly marked for Policy Debt repayment.
Policy Value equal to the Policy loan will be held in the Fixed
Account to secure the Policy loan. The amount will be transferred
from each Sub-Account on a pro rata basis, less the pro rata share of
the Policy Value in the Fixed Account.
As described in the Policy Value Provisions, We may credit interest
at different rates to that portion of the Policy Value equal to any
existing Policy Debt and to the balance of the Policy Value.
LOAN INTEREST RATE
Interest on any loan is at an effective annual rate. This rate will
apply to all Policy Debt under this Policy. This rate may change.
Changes will be made only on a Policy Anniversary and will remain in
effect for the following Policy Year.
The loan interest rate is based on a published Monthly Average.
That Average will be:
(1) the Composite Yield on Seasoned Corporate Bonds as published
by Moody's Investors Service, Inc. or any successor to the
Service; or
(2) If that Monthly Average is no longer published, a
substantially similar average, established by regulation issued
by the insurance supervisory official of the state where this
Policy was delivered.
The loan interest rate for a Policy Year is the Published Monthly
Average for the calendar month ending two months before the calendar
month in which that Policy Year begins or the guaranteed interest rate
for the Fixed Account plus the Loan Interest Spread shown in the
Policy Specifications, whichever is higher.
The following restrictions apply to the loan interest rate as
described above:
(1) We may increase the rate whenever the maximum rate is at
least 1/2% higher than the rate in effect for the previous
Policy Year.
(2) We will reduce the rate whenever the maximum rate is at least
1/2% lower than the rate in effect for the prior Policy Year.
(3) If the rate is changed, the new rate will become effective on
Your Policy Anniversary.
(4) The loan interest rate may not exceed the maximum loan
interest rate allowed by the state in which this Policy was
delivered.
We will notify You of the current loan interest rate:
(1) upon Your Written Request; and
(2) at the time a Policy loan is made.
We will send You notice 30 days in advance of any increase in the
loan interest rate, if a Policy loan is then outstanding. We will
also notify You of any decreases.
Any notice will state that the rate may vary and will state the
frequency at which the rate will be deter-mined.
PREFERRED LOAN
After the tenth Policy Year, the Policyowner may take loans against the
Policy Value at a rate that is equal to the Loan Interest Rate then in
effect for the Policy, less the Loan Interest Spread shown in the Policy
Specifications. We reserve the right to adjust this preferred rate on
each Policy Anniversary when the Loan Interest Rate for the coming
Policy Year is determined. The maximum Preferred Loan Amount is 10% of
the Policy Value at the time of the Preferred Loan request.
FEDERAL TAX CONSIDERATIONS
The Company intends to make a charge for any effect which the income,
assets or existence of the Separate Account may have upon its tax. The
Separate Account presently is not subject to tax, but the Company
reserves the right to assess a charge for taxes of the Separate Account
at any time it becomes subject to tax.
INCOME SETTLEMENT OPTIONS
Rather than pay Proceeds in a single sum as provided in this Policy, We
will pay them based on the terms of an optional settlement agreement, if
elected. Under such an agreement You may elect one of the following
options:
OPTION 1. INSTALLMENTS FOR A SPECIFIED PERIOD. Equal payments for a
stated number of years, not more than 30. The amount is shown in the
Option 1 Table on the following page.
OPTION 2. LIFE INCOME. Equal monthly payments while the payee is
alive, as shown in the Option 2 Table on the following page. Payments
with or without installments certain may be elected. This benefit may
be in-creased by the Alternative Life Income provision.
OPTION 3. INTEREST. Interest payments while the payee is alive or for
a shorter period. Interest will be paid at an effective interest rate
of 3% compounded annually. Payments are increased by any additional
interest earnings We may apportion.
OPTION 4. INSTALLMENTS OF SPECIFIED AMOUNT. Equal annual, semiannual,
quarterly or monthly payments for a stated amount. Payments will be
made until the proceeds and interest are all paid out. The total yearly
amount paid must be at least 6% of the original proceeds. Any unpaid
balance left with Us will be increased by an effective interest rate of
3% compounded annually. We will also add any additional interest
earnings We may apportion.
OPTION 5. LIFE INCOME WITH INSTALLMENT REFUND. Equal monthly payments
as shown in the Option 5 Table on the following page. Payments will be
made until the total amount paid equals the proceeds, and as long
thereafter as the payee lives.
OPTION 6. JOINT LIFE INCOME FOR THE PAYEE AND ONE OTHER PERSON WITH
TWO-THIRDS TO SURVIVOR (ONE HUNDRED AND TWENTY MONTHS CERTAIN). Based
on the Option 6 table, We will pay a joint monthly income to the payee
and one other person designated at exercise of this option. We will pay
the income for 120 months certain, and as long afterwards as both payees
are living. After the death of either payee, and following pay-ment of
any remaining income certain, monthly payments equal to two-thirds of
monthly income will be con-tinued to the surviving payee for life.
ALTERNATE LIFE INCOME
If Option 2, 5 or 6 is elected, the payee can elect to receive an
alternate life income. This is instead of receiv-ing income based on
the rates shown in the following tables. The election must be made at
the time the in-come is to begin. The alternate life monthly income
will at least be equal to the monthly income provided by a new single
premium immediate annuity (first payment immediate), based on Our
published rates then in use when the income settlement option is
elected.
PAYMENT PROVISIONS
If an optional settlement agreement becomes effective, We will
issue a supplementary contract in ex-change for the Policy and
agreement. The contract will show the rights and benefits provided by
the agreement.
We may change the payment basis to quarterly, semiannual, or annual
if any payment is less than $50.
We may pay Proceeds in one sum if they are less than $5,000. The
payment will be paid to the then payee of income named in the optional
settlement agreement.
Payments under Options 2, 5, and 6 will be subject to proof of the
payee's ages.
The first installment under Options 1, 2, 4, 5 and 6 is due as of
the date the Proceeds become payable.
Installments certain under Options 1, 2, 5 and 6 are computed at an
effective interest rate of 3% com-pounded annually. This does not
apply when alternate life income is elected.
Installments certain, after the first, will be increased by any
additional interest earnings We may apportion. If the alternate life
income is elected, We will not increase payments certain by additional
interest earnings. No endorsements of the Policy are required when an
optional settlement agreement is completed.
If the same income would be payable for various periods of time at
a given age, We will automatically pay income for the longest period.
<PAGE>
C.M. LIFE INSURANCE COMPANY
HARTFORD, CONNECTICUT
TRANSFER OF INSUREDS RIDER
This extra benefit Rider is attached to and made a part of the Policy.
It provides for substitution of a New Insured for the Insured now
covered by this Policy. We will amend the Original Policy as described
below. The terms and conditions of the Policy also apply to this Rider
except as provided by this Rider.
DEFINITIONS
AMENDED POLICY -- The Policy after the Date of Substitution.
CURRENT INSURED -- The life insured by this Policy prior to exercising
the option provided by this Rider.
DATE OF SUBSTITUTION -- The next Monthly Anniversary of the Original
Policy once requirements for sub-stitution have been met.
NEW INSURED -- The life on which the Amended Policy is issued after the
option of this Rider has been ex-ercised.
ORIGINAL POLICY -- The Policy to which this Rider is attached.
GENERAL CONDITIONS
To substitute a New Insured, You must submit:
(1) an application signed by You and the New Insured;
(2) evidence that You have an insurable interest in the Current
Insured and the New Insured;
(3) evidence of insurability satisfactory to Us on the New
Insured;
(4) evidence of the release of any lien against or assignment of
the Original Policy. Instead of the release, You can give
written approval by the lien holder or assignee of the
substitution. You must provide any documents We may require.
The transfer will be effective on the Date of Substitution, subject
to the following:
(1) receipt by Us of the information listed above;
(2) surrender and release of the Original Policy;
(3) the age nearest birthday of the New Insured must not be over
the lesser of age 75 or the maximum issue age of the Policy on
the Date of Substitution.
Coverage on the Current Insured and any extra benefit riders
attached to the Original Policy will terminate on the day before the
Date of Substitution. The Amended Policy will become effective on the
Date of Substitution.
The Amended Policy will be of the same plan as the Original Policy.
TERMS OF THE POLICY AFTER SUBSTITUTION
Monthly deductions will be based on the underwriting classification
of the New Insured.
Any policy loan outstanding on the Original Policy will be
transferred to the Amended Policy.
AMOUNT OF THE POLICY AFTER SUBSTITUTION
The Specified Amount of the Amended Policy cannot be less than Our
published minimum amount on the Date of Substitution.
The Amended Policy will have a Specified Amount that will produce
the same reserve as on the Original Policy as of the Date of
Substitution.
SUPPLEMENTAL RIDERS
Other extra benefit riders may be added to the Amended Policy only with
Our consent.
SUICIDE AND INCONTESTABILITY AFTER SUBSTITUTION
The Amended Policy will be modified so that the time periods for suicide
and incontestability will be measured from the Date of Substitution.
TERMINATION
This Rider will terminate upon the earliest of:
the date the Original Policy terminates;
the Date of Substitution of the Original Policy;
the anniversary of the Original Policy on which the Insured's Age
is 75.
David Sams, Jr.
PRESIDENT
<PAGE>
C.M. LIFE INSURANCE COMPANY
HARTFORD, CONNECTICUT
WAIVER OF MONTHLY DEDUCTIONS RIDER
This extra benefit Rider is attached to and made a part of the Policy.
It provides waiver of Monthly Deductions if the Insured is continuously
Totally Disabled for 4 months or more. The terms and conditions of the
Policy also apply to this Rider except as provided by this Rider.
DEFINITIONS
DOCTOR -- A licensed physician who is acting within the scope of his or
her license and who is other than the Insured; the Owner; or parent,
spouse, or child of the Insured or Policyowner.
DOCTOR'S CARE -- The Insured is receiving care by a Doctor which, under
prevailing medical standards, is appropriate for the condition causing
the Disability. We will waive this requirement if We receive written
proof acceptable to Us that further Doctor's Care is no longer of
benefit to the Insured.
OCCUPATION -- During the first 24 months of Total Disability, Occupation
means the Insured's regular occu-pation at the start of Total
Disability. After 24 months of Total Disability, Occupation means any
occupation for which the Insured is or may become reasonably qualified
as a result of training, education or experience.
TOTAL DISABILITY, TOTALLY DISABLED -- The Insured is Totally Disabled if
because of sickness or injury he/she can't do the main duties of his/her
Occupation. The Insured must be under a Doctor's Care.
BENEFIT
If the conditions of this Rider are met, We will waive the Monthly
Deductions under Your Policy as specified below.
Waiver of Monthly Deductions will begin with the Policy Month
following the date the Insured became To-tally Disabled.
We will waive Monthly Deductions until the earlier of:
(1) the date the Insured's Total Disability ends; or
(2) the Insured's Age 65.
However, if Total Disability begins before the Insured's Age 60 and
continues through Age 65, we will continue to waive Monthly Deductions
as long as the Policy is In Force.
The Policy Value of the Policy will be adjusted if any Monthly
Deductions are made which subsequently qualify for waiver.
CONDITIONS
The benefit this Rider provides will take effect only if:
Total Disability begins:
(1) before the Insured's Age 65; and
(2) while this Rider is In Force.
We receive proof satisfactory to Us that the Insured has been
continuously Totally Disabled for a 4 month period.
CHARGES
This Rider is issued in consideration of the application and the
inclusion of a monthly charge for this Rider in each Monthly Deduction
for the Policy.
The amount of the monthly charge on each Monthly Anniversary is
determined by multiplying the Monthly De-duction on the Monthly
Anniversary by the Waiver of Monthly Deduction rate based on the Age of
the Insured. The Waiver of Monthly Deduction rates are shown in the
Policy Specifications.
We will mail to You, for attachment to the Policy, any new Policy
Specifications resulting from the addition of this Rider after the
Policy was issued.
PROOF OF TOTAL DISABILITY
In order for the benefit of this Rider to take effect and continue, We
must receive:
written notice of claim during the Insured's lifetime and during
the period of Total Disability. Failure to fur-nish written notice of
claim will not reduce a benefit if it is shown that such notice was
furnished to Us as soon as reasonably possible; and
proof of Total Disability satisfactory to Us within one year after
written notice of claim is submitted. Failure to furnish written
notice of claim will not reduce a benefit if it is shown that such
notice was furnished to Us as soon as reasonably possible.
proof of continuing Total Disability satisfactory to Us at
reasonable intervals as We may require.
At reasonable intervals, We may also require that the Insured be
examined by Doctors We choose. We will pay for any examination We
require. If the examination is not furnished as required, We will stop
waiving Monthly Deductions.
PRESUMPTIVE TOTAL DISABILITY
If one of the following losses occurs and first appears after the
Effective Date of this Rider, it will be regarded as Total Disability
for as long as it continues:
(1) The entire loss of sight in both eyes.
(2) The entire loss of use of both hands or both feet.
(3) The entire loss of use of one hand and one foot.
RECURRING DISABILITY
Recurring Disability is a Disability that begins within 6 months after a
period of Total Disability. We must receive proof satisfactory to Us
that the Total Disability is caused by the same, or related, injury or
sickness. For the purpose of determining benefits under this Rider, We
will treat the Recurring Disability as a continuation of the previous
Total Disability. If the required 4 month period of Total Disability
has been satisfied, no new 4 month period is required. If the required
4 month period of Total Disability has not been satisfied, periods of
Recurring Disability may be accumulated to satisfy that requirement for
the payment of benefits.
EXCLUDED DISABILITIES
We do not provide benefits under this Rider for Total Disabilities
caused or contributed to by:
service in the armed forces of any country or international
organization at war, whether declared or unde-clared.
injury willfully and intentionally self-inflicted.
MISSTATEMENT OF AGE
The Insured's Age may be adjusted at any time to correct a misstatement
of Age. Any benefit provided by this Rider will be determined based on
the Insured's correct Age. The future charges for this Rider will also
be adjusted to reflect the Insured's correct Age.
INCONTESTABILITY
We cannot contest this Rider after it has been In Force during the
lifetime of the Insured without the occurrence of Total Disability of
the Insured for a period of 2 years from the Date of Issue of this
Rider.
TERMINATION
This Rider will terminate on the end of the earliest of the following:
upon termination of the Policy.
as of the Insured's Age 65.
as of the next Monthly Anniversary upon Your Written Request.
David Sams, Jr.
PRESIDENT
PARTICIPATION AGREEMENT
Among
CONNECTICUT MUTUAL FINANCIAL SERVICES SERIES FUND I, INC.,
CONNECTICUT MUTUAL FINANCIAL SERVICES, LIMITED LIABILITY COMPANY
AND
C.M. LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of the ________ day
of August, 1995 by and among C.M. LIFE INSURANCE COMPANY,
(hereinafter the "Company"), a Connecticut corporation, on
its own behalf and on behalf of C.M. Life Variable Life
Separate Account I, Inc. (hereinafter the "Separate
Account"), CONNECTICUT MUTUAL FINANCIAL SERVICES, LIMITED
LIABILITY COMPANY (hereinafter the "Underwriter"), a limited
liability company organized under the laws of the State of
Connecticut, and CONNECTICUT MUTUAL FINANCIAL SERVICES SERIES
FUND I, INC., an open-end diversified management company
incorporated in Maryland (hereinafter the "Fund").
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 by the
Company and its affiliates which fund flexible premium
variable life insurance policies and variable annuity
Policies (collectively, the "Variable Insurance Products") ;
and
WHEREAS, the beneficial interest in the Fund is divided
into several series of shares, each designated a "Portfolio"
and representing the interest in a particular managed
portfolio of securities and other assets; 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 "1993 Act"); and
WHEREAS, the Company has registered or will register
certain flexible premium variable life insurance Policies
under the 1933 Act (hereinafter the "Policies"); and
WHEREAS, the Account is a duly organized, validly
existing segregated asset account, established pursuant to
authority granted by the Board of Directors of the Company to
set aside and invest assets attributable to the aforesaid
Policies; and
WHEREAS, the Fund has appointed the Underwriter to serve
as the principal underwriter of the Contracts; and
WHEREAS, the Company has registered or will register the
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
(hereinafter "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 certain Portfolios of the Fund on behalf of the Account to
fund the Policies and the Underwriter is authorized to sell
such shares to the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual
promises, the Company, the Separate Account, 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 Portfolios which the 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 Portfolios. For purposes of
this Section 1.1, the Company shall be the designee of the
Fund for receipt of such orders from the Account and receipt
by such designee shall constitute receipt by the Fund;
provided that the Fund receives notice of such order 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. The
Company shall use its best efforts to communicate such orders
to the Fund by 11:00 a.m. eastern time.
1.2. The Fund agrees to make shares of the Portfolios
available indefinitely for purchase at the applicable net
asset value per share by the Company and its Account 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 calculate such net asset value on each day
which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Directors 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 no shares
of any Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not issue Fund
shares to separate accounts of any insurance company
unaffiliated with the Company unless the Fund obtains
exemptions from the provisions of Section 9(a), 13(a), 15(a),
and 15(b) of the Investment Company Act of 1940, and Rule 6e-
2(b)(15) and 6e-3(T)(b)(15) thereunder (hereinafter "Shared
and Mixed Funding Exemption).
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. The Fund
shall use its best efforts to pay and transmit the redemption
proceeds the next business day after 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 to purchase and redeem the
shares of each Portfolio offered by the then current
prospectus of the Fund in accordance with the provisions of
such prospectus.
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.
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 the Separate Account. Shares ordered from
the Fund will be recorded in an appropriate title for the
Separate Account or its appropriate sub-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 possible after the net asset value per share is
calculated and shall use its best efforts to make such net
asset value per share available by 7 p.m. eastern time. If
the Fund provides incorrect share net asset value
information, the Company shall be entitled to an adjustment
to the number of shares purchased or redeemed to reflect the
correct net asset value per share (and, if and to the extent
necessary, the Company shall make adjustments to the number
of units credited and/or unit values for the Policies for the
periods affected). Any error in the calculation or reporting
of net asset value per share, dividend or capital gains
information greater than or equal to $.01 per share shall be
reported immediately upon discovery to the Company. Any
error of a lesser amount shall be corrected in the next
Business Day's net asset value per share.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the
Policies are or will be registered under the 1933 Act; that
the Policies will be issued and sold in compliance in all
material respects with all applicable Federal and State laws
and that the sale of the Policies 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 and
validly established the Separate Account prior to any
issuance or sale thereof as a segregated asset account under
Section 38a-433 of the Connecticut Insurance Laws and has
registered or, prior to any issuance or sale of the Policies,
will register the Separate Account as a unit investment trust
in accordance with the provisions of the 1940 Act to serve as
a segregated investment account for the Policies.
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 Connecticut and all applicable
federal and state 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 if and to the extent required
by law.
2.3. The Company represents that the Policies are
currently treated as life insurance policies under
Connecticut law and satisfy the definition of life insurance
as contained in Section 7702 of the Internal Revenue Code.
2.4. The Fund currently does not intend to make any
payments to finance distribution expenses pursuant to Rule
12b-1 under the 1940 Act or otherwise, although it may make
such payments in the future. To the extent that it decides
to finance distribution expenses pursuant to Rule 12b-1, the
Fund undertakes to have a board of directors, a majority of
whom are not interested persons of the Fund, formulate and
approve any plan under Rule 12b-1 to finance distribution
expenses.
2.5. 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 Connecticut and
all applicable state and federal securities laws, including
without limitation the 1933 Act, the 1934 Act, and the 1940
Act.
2.6. The Fund represents that it is lawfully organized
and validly existing under the laws of Maryland and that it
does and will comply in all material respects with the 1940
Act.
2.7. The Underwriter represents and warrants that the
investment adviser to the Fund 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 Connecticut
and any applicable state and federal securities laws.
2.8. 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 available 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.
2.9. The Fund will provide the Company with as much
advance notice as possible, but in any event with at least
ninety (90) days advance notice, of any material change
affecting the Fund (including, but not limited to, any
material change in its registration statement or prospectus
and any proxy solicitation) and consult with the Company in
order to implement any such change in an orderly manner,
recognizing the expenses of changes and attempting to
minimize such expenses by implementing them in conjunction
with regular annual updates of the prospectuses for the
Policies. The Fund agrees to share equitably in expenses
incurred by the Company as a result of actions taken by the
Fund.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS: VOTING
3.1. The Underwriter shall provide the Company with as
many copies of the Fund's current prospectus as the Company
may reasonably request. If requested by the Company in lieu
thereof, the Fund shall provide such documentation (including
a final copy of the new prospectus as set in type at the
Fund's expense) and other assistance as is reasonably
necessary in order for the Company once each year (or more
frequently if the prospectus for the Fund is amended) to have
the prospectus for the Policies and the Fund's prospectus
printed together in one document.
3.2. The Fund, at its expense, shall provide the
Company with copies of its prospectus, proxy material,
reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably
require for distributing to existing Contract owners.
3.3. 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 from Contract owners;
and
(iii) vote Fund shares for which no instructions
have been received in the same proportion
as Fund shares of such portfolio for which
instructions have been received,
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.
3.4. 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 directors and with whatever rules the Commission
may promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall be responsible for the sales
literature and promotional materials discussing the Fund.
The Underwriter shall provide such assistance to the Company
in the preparation and filing of such materials as the
Company shall from time to time reasonably request.
4.2. The Fund and the Underwriter shall not give any
information or make any representations on behalf of the
Company or concerning the Company, the Separate Account, or
the Policies other than the information or representations
contained in a registration statement or prospectus for the
Policies, as such registration statement and prospectus may
be amended or supplemented from time to time, or in published
reports for the 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.
4.3. The Company will provide to the Fund, should it
so request, copies of any registration statements,
prospectuses, reports, solicitations for voting instructions,
sales literature or other promotional materials, applications
for exemptions, requests for no action letters, and all
amendments to any of the above, that relate to the Policies
or the Separate Account, contemporaneously with the filing of
such document with the SEC or other regulatory authorities.
4.4. For purposes of this Article IV, the phrase
"sales literature or other promotional material" includes,
but is not limited to, advertisements (such as material
published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion
pictures, or other public media), 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
tests, reprints or excerpts of any other advertisement, sales
literature, or published article), and registration
statements, prospectuses, shareholder reports, and proxy
materials.
ARTICLE V. FEES AND EXPENSES
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 Policies 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. Currently, no such
payments are contemplated.
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 in accordance with applicable state laws (if
required) 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 the
proxy materials and reports to shareholders (including the
costs of printing and distributing 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 printing
and mailing the Fund's prospectus to owners of Policies
issued by the Company and of printing and mailing the Fund's
proxy materials and reports to such Policy owners.
ARTICLE VI. DIVERSIFICATION AND QUALIFICATION
6.1. The Fund represents and warrant that the Fund
will at all times sell its shares and invest its assets in
such a manner as to ensure that the Policies will be treated
as variable Policies under the Internal Revenue Code of 1986,
as amended (the "Code") and the regulations issued
thereunder. Without limiting the scope of the foregoing, the
Fund represents and warrant that the Fund and each Portfolio
thereof will at all times comply with Section 817(h) of the
Code and Treasury Regulation 1.817-5, as amended from time
to time, and any Treasury interpretations thereof, relating
to the diversification requirements for variable annuity,
endowment, or life insurance Policies and any amendments or
other modifications or successor provisions to such Section
or Regulations. The Fund agrees that shares of the Fund will
be sold only to the Company or its affiliate insurance
companies and their separate accounts. However, in the event
the Fund obtains a Shared and Mixed Funding Exemption, the
Fund may also sell its shares to other insurance companies
and their separate accounts.
6.2. No shares of any series or portfolio of the Fund
will be sold to the general public.
6.3. The Fund represents and warrants that the Fund
and each Portfolio is currently qualified as a Regulated
Investment Company under Subchapter M of the Code, and that
it will maintain such qualification (under Subchapter M or
any successor or similar provisions) as long as shares of any
Portfolio are held by the Account.
6.4. The Fund will notify the Company immediately upon
having a reasonable basis for believing that the Fund or any
Portfolio has ceased to comply with the aforesaid Section
817(h) diversification or Subchapter M qualification
requirements or might not so comply in the future.
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. The opportunity for the occurrence of an
irreconcilable conflict may be increased in the event the
Fund obtains a Shared and Mixed Funding Exemption and offers
its shares to insurance companies unaffiliated with the
Company. An irreconcilable material conflict may arise for a
variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable
federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-
action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant
proceeding; (d) the manner in which the investments of any
Portfolio are being managed; (e) a difference in voting
instructions given by 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. In the event
the Fund receives a Shared and Mixed Funding Exemption, the
Company will assist the Board in carrying out its
responsibilities under the exemption 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 directors, that a material
irreconcilable conflict exists, the Company and other
insurance companies which purchase Fund shares for their
separate accounts (hereinafter "Participating Insurance
Companies") shall, at their expense and to the extent
reasonably practicable (as determined by a majority of the
disinterested directors), take whatever steps are necessary
to remedy or eliminate the irreconcilable material conflict,
up to and including: (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 Separate Account's investment in the Fund and terminate
this Agreement with respect to the Separate 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.
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
Separate Account's investment in the Fund and terminate this
Agreement with respect to the Separate 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. The Company
shall not be required by Section 7.3 to establish a new
funding medium for the Policies 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 Separate
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 shared and mixed
funding on terms and conditions materially different from
those contained in any Shared and Mixed Funding Exemption the
Fund may obtain, 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 each trustee of the Board and officers
(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 Policies 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 Policies or contained in the Policies
or sales literature for the Policies (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 Underwriter or the Fund for use in the
Registration Statement or prospectus for the Policies or
in the Policies or sales literature (or any amendment or
supplement) or otherwise for use in connection with the
sale of the Policies 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
Policies 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 material 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 limited by and in accordance with the
provisions of Section 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
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 or to the Underwriter or to the Fund's investment
adviser, 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 Policies or the operation of the Fund.
8.2. INDEMNIFICATION BY THE FUND
8.2(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 8.2)
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 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
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 8.2(b) and 8.2(c)
hereof.
8.2(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 the Separate
Account, whichever is applicable.
8.2(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.
8.2(d). The Fund agrees promptly to notify the
Company and the Underwriter of the commencement of any
litigation or proceedings against it or any of its respective
officers or directors in connection with this Agreement, the
issuance or sale of the Policies, with respect to the
operation of the Separate 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 state of Connecticut.
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 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:
(a) termination by any party for any reason by (60)
sixty days advance written notice delivered to the other
party.
(b) 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 Policies issued or to be issued by the Company; or
(c) 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
(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 fails to
meet the diversification requirements specified in
Article VI hereof.
10.2. SURVIVING PROVISIONS. Notwithstanding any
termination of this Agreement, each party's obligation under
Article VIII to indemnify other parties shall survive and not
be affected by any termination of this Agreement
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:
Connecticut Mutual Financial Services Series Fund I, Inc.
140 Garden Street
Hartford, Connecticut 06154
Attention: Treasurer
If to the Company:
C.M. Life Insurance Company
140 Garden Street
Hartford, Connecticut 06154
Attention: Corporate Secretary
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
Policies 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 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
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 thereunder may not be assigned by any party
without the prior written consent of all parties hereto.
<PAGE>
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 the date specified below.
C.M. Life Insurance Company, Inc.
By its authorized officer,
By:___________________________________
Title:__________________________________
Date:__________________________________
CONNECTICUT MUTUAL FINANCIAL SERVICES,
LIMITED LIABILITY COMPANY
By:___________________________________
Title:__________________________________
Date:__________________________________
CONNECTICUT MUTUAL FINANCIAL SERVICES SERIES FUND I, INC.
By its authorized officer,
By:___________________________________
Title:__________________________________
Date:__________________________________
PARTICIPATION AGREEMENT
Among
VARIABLE INSURANCE PRODUCTS FUND,
FIDELITY DISTRIBUTORS CORPORATION
and
C. M. LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of the 1st
day of April, 1995 by and among C. M. LIFE INSURANCE
COMPANY, (hereinafter the "Company"), a Connecticut
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 October 15, 1985
(File No. 812-6102), 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 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/or variable annuity
contracts under the 1933 Act, said Contracts being listed in
Schedule A, which may be amended from time to time; and
WHEREAS, each Account is a duly organized, validly
existing segregated asset account, established by resolution
of the Board of Directors of the Company (or the Board's
lawfully empowered designee), 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 one or more of 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 constitute
receipt by the Fund; provided that the Fund receives notice
of such order by 11:00 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 its best 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. The Fund and the
Underwriter represent and warrant that 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, in the Company's
general account, or in other investment companies advised by
an affiliate of the Company. Amounts may also be invested
in other investment companies provided (a) such other
investment company, or series 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 30 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); (d) the Fund or Underwriter consents to the use
of such other investment company; or (e) such investment
company is advised by an affiliate of the Company, and
Company informs the Underwriter prior to use of such
investment company.
1.7. The Company shall pay for Fund shares on the
next Business Day after a net 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 and
validly established each Account prior to any issuance or
sale thereof as a segregated asset account under Section
38a-433 of the Connecticut Insurance Laws 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 Connecticut and all
applicable federal and state 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 if and to the
extent required by law.
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 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, assuming that the Fund
qualifies for favorable treatment under section 817 of the
Code and Regulation 817-5 thereunder, that the Contracts
will be treated as annuity or life 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. 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.
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
Connecticut 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
Connecticut 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
Connecticut 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 Connecticut 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, in an
amount not less $1 million. The aforesaid includes coverage
for larceny and embezzlement is issued by a reputable
bonding company. 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.
2.12 The Fund will provide the Company with as much
advance notice as is reasonably practicable of any material
change affecting the Fund, including, but not limited to, a
material change in the Fund's registration statement or
prospectus, or the existence of any upcoming proxy
solicitation. The Fund will take into consideration before
implementing any such changes the effects on the Company,
including the expenses that will be incurred by the Company,
and will use reasonable efforts in relation to both the
content and the timing of the implementation of any material
changes so as not to cause the Company unreasonable
additional expense.
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 or
computer diskettes 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 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 or computer diskettes 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 from Contract owners;
and
(iii) vote Fund shares for which no instructions
have been received in the same proportion as
Fund shares of such portfolio for which
instructions have been received,
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 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 or 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 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
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.
Currently, no such payments are contemplated.
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 with the grace period afforded by Regulation 817-
5. The Fund will notify the Company immediately upon having
a reasonable basis for believing that the Fund may not in
the future comply with the diversification requirements of
Section 817(h) or Treasury Regulation 1.817-5 thereunder.
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
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.
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 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 (provided such person
is associated with a company, or is a company, that is part
of the group of companies commonly known as "Fidelity
Investments") (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 Underwriter or 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 material 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 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, the Underwriter, or the
Adviser, 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 Parties may become subject under any statute or
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
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,
the Fund or the Adviser, or persons under
their 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 and/or the Accounts, 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
or the Underwriter 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 qualification and
diversification requirements specified in
Article VI and the qualification requirements
specified in Section 2.3 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 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
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
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
(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 reasonably 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 thirty (30) 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.
Each party's indemnification obligations under Article VIII shall
survive termination of this Agreement and shall not be affected
thereby. In addition, with respect to Existing Contracts, the
following provisions shall also survive and not be affected by
any termination: Article I, Article II, Section 3.3, Section
3.4, Article VI, Section 12.1, Section 12.2, and Section 12.6.
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, (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 a substitution
order granted by the SEC pursuant to Section 26(b) of the 1940
Act. Upon request, the Company will promptly 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.
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:
C. M. Life Insurance Company
140 Garden Street
Hartford, Connecticut 06154
Attention: Corporate Secretary
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 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.
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), as
soon as practical and in any event within 90
days after the end of each fiscal year;
(b) the Company's quarterly statements
(statutory) 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 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, provided
that this requirement shall not compel the
Company to divulge information which is
otherwise confidential.
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.
C. M. LIFE INSURANCE COMPANY
By its authorized officer,
By: /S/ DAVID BEED
Name: DAVID BEED
Title: SENIOR VICE PRESIDENT
VARIABLE INSURANCE PRODUCTS FUND
By its authorized officer,
By: /S/ J. GARY BURKHEAD
Name: J. GARY BURKHEAD
Title: SENIOR VICE PRESIDENT
FIDELITY DISTRIBUTORS CORPORATION
By its authorized officer,
By: S/ KURT A. LANGE
Name: KURT A. LANGE
Title: PRESIDENT
<PAGE>
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Name of Separate Account and Contracts Funded
DATE ESTABLISHED BY BOARD OF DIRECTORS BY SEPARATE ACCOUNT
C. M. Life Variable Life Executive Benefits Variable
Universal Life
Separate Account I (February 2, 1995)
<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.)
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
signature needed on the Card.
10. 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.
<PAGE>
SCHEDULE C
Other investment companies currently available under
variable annuities or variable life insurance issued by the
Company:
1. Connecticut Mutual Financial Services Series Fund I.
PARTICIPATION AGREEMENT
Among
VARIABLE INSURANCE PRODUCTS FUND II,
FIDELITY DISTRIBUTORS CORPORATION
and
C. M. LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of the 1st
day of April, 1995 by and among C. M. LIFE INSURANCE
COMPANY, (hereinafter the "Company"), a Connecticut
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 II, 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 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/or variable annuity
contracts under the 1933 Act, said Contracts being listed in
Schedule A, which may be amended from time to time; and
WHEREAS, each Account is a duly organized, validly
existing segregated asset account, established by resolution
of the Board of Directors of the Company (or the Board's
lawfully empowered designee), 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 one or more of 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 constitute
receipt by the Fund; provided that the Fund receives notice
of such order by 11:00 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 its best 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. The Fund and the
Underwriter represent and warrant that 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, in the Company's
general account, or in other investment companies advised by
an affiliate of the Company. Amounts may also be invested
in other investment companies provided (a) such other
investment company, or series 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 30 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); (d) the Fund or Underwriter consents to the use
of such other investment company; or (e) such investment
company is advised by an affiliate of the Company, and
Company informs the Underwriter prior to use of such
investment company.
1.7. The Company shall pay for Fund shares on the
next Business Day after a net 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 and
validly established each Account prior to any issuance or
sale thereof as a segregated asset account under Section
38a-433 of the Connecticut Insurance Laws 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 Connecticut and all
applicable federal and state 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 if and to the
extent required by law.
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 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, assuming that the Fund
qualifies for favorable treatment under section 817 of the
Code and Regulation 817-5 thereunder, that the Contracts
will be treated as annuity or life 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. 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.
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
Connecticut 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
Connecticut 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
Connecticut 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 Connecticut 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, in an
amount not less $1 million. The aforesaid includes coverage
for larceny and embezzlement is issued by a reputable
bonding company. 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.
2.12 The Fund will provide the Company with as much
advance notice as is reasonably practicable of any material
change affecting the Fund, including, but not limited to, a
material change in the Fund's registration statement or
prospectus, or the existence of any upcoming proxy
solicitation. The Fund will take into consideration before
implementing any such changes the effects on the Company,
including the expenses that will be incurred by the Company,
and will use reasonable efforts in relation to both the
content and the timing of the implementation of any material
changes so as not to cause the Company unreasonable
additional expense.
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 or
computer diskettes 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 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 or computer diskettes 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 from Contract owners;
and
(iii) vote Fund shares for which no instructions
have been received in the same proportion as
Fund shares of such portfolio for which
instructions have been received,
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 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 or 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 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
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.
Currently, no such payments are contemplated.
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 with the grace period afforded by Regulation 817-
5. The Fund will notify the Company immediately upon having
a reasonable basis for believing that the Fund may not in
the future comply with the diversification requirements of
Section 817(h) or Treasury Regulation 1.817-5 thereunder.
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
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.
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 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 (provided such person
is associated with a company, or is a company, that is part
of the group of companies commonly known as "Fidelity
Investments") (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 Underwriter or 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 material 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 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, the Underwriter, or the
Adviser, 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 Parties may become subject under any statute or
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
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,
the Fund or the Adviser, or persons under
their 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 and/or the Accounts, 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
or the Underwriter 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 qualification and
diversification requirements specified in
Article VI and the qualification requirements
specified in Section 2.3 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 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
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
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
(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 reasonably 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 thirty (30) 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.
Each party's indemnification obligations under Article VIII shall
survive termination of this Agreement and shall not be affected
thereby. In addition, with respect to Existing Contracts, the
following provisions shall also survive and not be affected by
any termination: Article I, Article II, Section 3.3, Section
3.4, Article VI, Section 12.1, Section 12.2, and Section 12.6.
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, (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 a substitution
order granted by the SEC pursuant to Section 26(b) of the 1940
Act. Upon request, the Company will promptly 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.
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:
C. M. Life Insurance Company
140 Garden Street
Hartford, Connecticut 06154
Attention: Corporate Secretary
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 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.
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), as
soon as practical and in any event within 90
days after the end of each fiscal year;
(b) the Company's quarterly statements
(statutory) 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 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, provided
that this requirement shall not compel the
Company to divulge information which is
otherwise confidential.
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.
C. M. LIFE INSURANCE COMPANY
By its authorized officer,
By: /S/ DAVID BEED
Name: DAVID BEED
Title: SENIOR VICE PRESIDENT
VARIABLE INSURANCE PRODUCTS FUND II
By its authorized officer,
By: /S/ J. GARY BURKHEAD
Name: J. GARY BURKHEAD
Title: SENIOR VICE PRESIDENT
FIDELITY DISTRIBUTORS CORPORATION
By its authorized officer,
By: /S/ KURT A. LANGE
Name: KURT A. LANGE
Title: PRESIDENT
<PAGE>
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Name of Separate Account and Contracts Funded
DATE ESTABLISHED BY BOARD OF DIRECTORS BY SEPARATE ACCOUNT
C. M. Life Variable Life Executive Benefits Variable
Universal Life
Separate Account I (February 2, 1995)
<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.)
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
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.
<PAGE>
SCHEDULE C
Other investment companies currently available under
variable annuities or variable life insurance issued by the
Company:
1. Connecticut Mutual Financial Services Series Fund I.
<TABLE>
<CAPTION>
<S> <C>
Master Application for Executive
CM Life Insurance Company Benefit Variable Universal Life
</TABLE>
INSTRUCTIONS:
Please Note the following:
AIC/Compliance Officer must perform a suitability review on each
application.
Cash with application must be submitted with the application and sent
to the Home Office.
A sales illustration signed by the applicant is required for all
applications.
If Guaranteed Issue:
Submit one Temporary Insurance Receipt (F60-95TIR) for each group if
case is prepaid. Prepayment must be the full modal premium for
all policies in the group.
Submit one Guaranteed Issue Application (F60GI-95) signed by each
proposed insured.
Complete the Agent Certificate.
If Underwritten:
Submit one Conditional Advance Premium Receipt (F65-95CR) for each
proposed insured.
Submit one Underwritten Application (PK65-95) for each proposed
insured.
Complete the Agent Certificate.
For Fund Selection:
If funds are selected by Owner (group), for multiple policies,
submit
Initial Net Premium Allocation Form (F60B) and Entity New Account
Form (F8118).
If proposed individual insured selects funds, submit one Initial
Net Premium Allocation Form (F60C) per individual and one Individual
New Account Form (F8119).
Agent/Registered Representative Certificate (F3260A)
Provide information necessary for payment of commissions.
Each registered representative receiving a commission must be a
registered representative licensed in the state of application
and licensed with C.M. Life.
Signatures: Registered representative(s).
<TABLE>
<CAPTION>
<S> <C>
PK60-95 8/95 CM Life Insurance Company
140 Garden Street
Hartford, CT 06154
</TABLE>
<PAGE>
CM Life Company/Owner Master Application
Insurance Company For Executive Benefit Variable Universal Life
Insurance
/R>
1. Name of Company (please print) 2. Tax Identification Number
3. Street Address City, State Zip Code
4. Policy Applied For
A. Plan Name B. Group Charge C. Underwiting Class
Adjustment _____%
5. Definition of Life Insurance Test
Cash Value Accumulation Test
Guideline Premium Test
6. Riders
Disability Waiver of Monthly Deductions _________ Other ______________
7. Premium Billing 8. Policy Dating
__Annual __Semiannual __Quarterly Indicate specific date desired
_____________________
(only date to the 28th)
9. Beneficiary and Relationship 10. Owner
to the Proposed Insured Company listed in #1 above
____________________________ __________________________
11. Is this insurance to replace or will it cause a change in, or involve a loan
under, any insurance or annuity policy on any Proposed Insured's life or
owner by this Owner? If "yes" give name, company and details. Yes No
12. If a Rider benefit applied for is not approved, should the policy be issued
without it? Yes No
I agree that the Insurance Schedule and Proposed Insured Applications shall
form part of the application for insurance. This Application shall be
attached to and form a part of any policy of insurance issued. Application
includes any amendments. No Agent may change the term of the Application or of
any policy issued by C.M. Life Insurance Company and no agent may waive any of
C.M. Life Insurance Company's rights or requirements.
I understand that the Insurance under any policy issued on the Application
will become effective only when the first premium has been paid in full and
the policy has been delivered; provided that at the time of delivery there
has been no change in the insurability of any proposed insured as stated on
the Application, since the date of the Application.
I represent that the answers and statements in this Application, the Insurance
Schedule and the Proposed Insured Applications are true and complete the best
of my knowledge and belief. The proposed insureds have been advised of the
company's underwriting rules to determine insurability. Under the penalties
of perjury, I certify that my correct taxpayer identification is shown and
that I am not subject to back up withholding.
Signed at ________________________________ Date ___________________
Signature of Owner's Print Authorized
Authorized Officer Officer's Name & Title
__________________________ ___________________________
Witness ________________________________________________________________________
Registered Representative/Licensed Resident Agent(where required by law)
For Home Office Use Only
Franch# ________________
Co.# ___________________
SG# ____________________
F60-95
<PAGE>
CM Life Initial Net Premium Allocation
Insurance Company For Executive Benefit
Variable Universal Life Insurance
Name of Company/Owner (please print) Tax Identification Number
Indicate below how the net premium payments (as described in the Prospectus)
will be allocated among the Fixed Account and sub-accounts of C.M. Life
Variable Life Separate Account I. Your allocations must be in whole
percentages and total 100%. All net premium payments will be allocated to the
Fixed Account unless otherwise specified.
Allocation Selection(s)
A B C D E
Fixed Account % % % % %
Money Market Sub-Account** % % % % %
Government Securities Sub-Account % % % % %
Income Sub-Account* % % % % %
High Income Sub-Account** % % % % %
Total Return Sub-Account* % % % % %
Growth Sub-Account* % % % % %
International Equity Sub-Account* % % % % %
Index 500 Sub-Account*** % % % % %
LifeSpan Diversified Income Sub-Account* % % % % %
LifeSpan Balance Sub-Account* % % % % %
LifeSpan Capital Appreciation Sub-Account* % % % % %
Total 100% 100% 100% 100% 100%
ALLOCATION DURING THE FREE LOOK PERIOD
Under certain conditions a Net Premium Payments will be allocated to the Money
Market Sub-Account Option until the expiration of the Free Look period.
Following the expiration of this period, the net premium payments and
corresponding earnings will be allocated as directed in this form.
ACCOUNT REBALANCING ELECTION
Indicate below the Account Rebalancing Option (as described in the Prospectus)
which You elect. This Account Rebalancing Option will apply to the net premium
payment allocation which You elect above, or any subsequent allocation which
You put into effect.
None Monthly Quarterly Semi-Annual Annual
Account Rebalancing Option
Signature of Owner's Print Authorized
Authorized Officer Officer's Name & Title
_________________________________ _________________________________
Date ________________________________
* These sub-accounts each invest in corresponding shares of certain
portfolios of Connecticut Mutual Financial Services Series Fund I, Inc.
(the "C.M. Fund")
** These sub-accounts each invest in corresponding shares of certain
portfolios of Variable Insurance Products Fund ("VIP Fund") advised by
Fidelity Management and Resource Company
*** These sub-accounts each invest in corresponding shares of certain
portfolios of Variable Insurance Products Fund II ("VIP Fund II") advised by
Fidelity Management and Resource Company
F60B 8/95
<PAGE>
CM Life Proposed Life Insured Application
Insurance Comapny For Executive Benefit Variable Universal Life Insurance
1. Name of Company/Policyowner
2. Proposed Insured Last Name (please print) First Name Middle Initial
3. Social Security Number
4. Have you used any tobacco products in the past 12 months? If "yes",
specify.
Yes No
Any person who knowingly and with intent to defraud any insurance company or
other person files an application for insurance containing any materially false
information or conceals, for the purpose of misleading, information concerning
any fact material thereto commits a fraudulent insurance act, which is a crime.
I agree to the purchase of life insurance on my life by the Policyowner listed
in #1 above and in accordance with the Master Application Insurance Schedule
which is part of this Application. I understand and agree that the Policyowner
will be the owner and beneficiary of the policy.
This Application includes any amendments. No agent may change the terms of the
Application or of any policy issued by C.M. Life Insurance Company and no agent
may waive any of C.M. Life Insurance Company's rights or requirements.
I represent that the answers and statements in this Application are true and
complete to the best of my knowledge and belief. This Application shall be
attached to and form a part of any policy of insurance issued.
I authorize the Policyowner listed in #1 above to release any information it has
of me or my health to C.M. Life Insurance Company. This information will be used
to determine eligibility for life insurance.
Proposed Insured
Signature _____________________________________ Date __________________
Witness _______________________________________
F60GI-95
<PAGE>
NOTICE OF INSURANCE INFORMATION PRACTICES
Thank you for your application for insurance. We are glad to have the chance to
participate in your insurance program. This notice tells you about the
underwriting process. It also tells you how information is gathered to review
your application.
The Underwriting Process
Insurance is based on the concept of equal risk sharing. Underwriters seek to
determine the level of risk of proposed Insureds who have similar risk
characteristics. This assures that each applicant contributes his or her fair
share of the cost.
Examples of risk characteristics are age; occupation; health; medical history;
and avocations. We gather and review information on these and other
characteristics. This determines the premium rate of the insurance requested.
Sources of Information
Your written application and the results of a physical examination, if required,
are important. With your written authorization information may be obtained from
the following: physicians, health professionals, hospitals, clinics, other
medically related facilities, insurance companies, reinsuring companies, the
MIB Inc., consumer reporting agencies, or employers.
An interviewer representing our Company may phone you to review the information
provided on the application. Additional questions may be asked. This information
will aid in the review of your application.
Confidentiality of Information
The only people who have access to this information are employees of the
Company who service your policy, or those who have an insurance related,
regulatory or legal need for the information. Also, the MIB Inc. conducts a
random review of our underwriting files. This is to ensure compliance with their
rules. Otherwise, information we obtain about you will not be given to anyone
without your consent.
MIB Inc.
We may make a brief report to the MIB Inc. MIB Inc. is a non-profit membership
organization of life insurance companies. It operates an information exchange
on behalf of its members.
If a member insurance company to which you have applied for Life or Health
insurance asks for information, MIB Inc. will provide what it has in its file.
MIB Inc. protects its members and their policyowners from the expense created by
those who conceal facts about their insurability. Information from MIB Inc. may
indicate the need for further investigation. It is not used as the basis for
underwriting decisions.
Upon your written request, MIB Inc. will disclose the information in your file.
Medical information will be disclosed only to your physician.
If you question the accuracy of information in its file, you may seek correction
under the procedures of the Federal and State Fair Credit Reporting Act. The
address of MIB Inc. is P.O. Box 105, Essex Station, Boston, Massachusetts 02112.
Telephone No. (617) 426-3660.
Federal Fair Credit Reporting Act Prenotification
As a part of the underwriting process, we may request an Investigative Consumer
Report. These reports are prepared by independent reporting firms. They provide
pertinent information about character, general reputation, personal
characteristics, health, finances and mode of living except as may be related
directly or indirectly to your sexual orientation. This information may be
obtained through personal interviews with friends, neighbors, associates or
others who know you. To request further details, see below.
If we request an Investigative Consumer Report, you have the right to ask to be
interviewed personally. Upon your written request, you have the right to receive
a copy of the report from the reporting company. If a report affects our
decision not to approve your application as requested, we will provide you with
the name and address of the reporting firm. If an insurance support organization
prepares a report about you, that organization may retain the report and
subsequently disclose the information in that report to other persons.
Other Rights You Have
You have a right of access to personal information collected about you. You have
the right to seek correction or amendment of that information. We reserve the
right to disclose medical record information only to a licensed physician you
name.
For Further Information
Write to us if you desire:
Details of the nature and scope of an Investigative Consumer Report.
A description of your rights of access and correction and a copy of a more
detailed Notice of Insurance Information Practices.
Send your request to: Director, Life Underwriting, Connecticut Mutual Companies,
140 Garden Street, Hartford, CT 06154.
F336-95
<PAGE>
CM Life Insurance Company Application for Executive
Benefit Variable Universal Life
INSTRUCTIONS:
Notice of Information Insurance Practices (F336-95)
Detach Notice and give to applicant.
Conditional Advance Premium Receipt (F65-95CR)
Ask for prepayment only if you believe proposed insured to be insurable.
The minimum prepayment required is the full modal premium.
Give original receipt to owner/applicant.
Give copy of receipt and Part I and Part II Non-Medical to New Business
Coordinator. Do not wait for completion of any other requirements.
Signatures: Owner/Applicant and Registered Representative.
Nonmedical/Authorization (F65A-95)
The nonmedical includes questions 11 through 18.
Furnish details of all "Yes" answers in area provided.
If applicant is other than proposed insured, applicant must also sign
application.
Obtain proposed insured signature on both application and
authorization.
Signatures: Proposed Insured twice, Owner, if different than Proposed
Insured.
Supplements (If needed)
The Aviation/Avocation form is F1093.
The Foreign Travel/Foreign Residence form is F257.
Replacement forms are F108A and F304. Use appropriate form for the
state of the contract.
PK65-95 8/95 CM Life Insurance Company
140 Garden Street
Hartford, CT 06154
<PAGE
CM Life Proposed Life Insured Application
Insurance Company For Executive Benefit Variable Universal Life Insurance
PART I
1. Name of Company/Policyowner
2. Proposed Insured Last Name (please print) First Name Middle Initial
3. Social Security Number 4. Date of Birth (MO/DAY/YR)
5. Male Female
6. Are you actively at work on the date this application is signed Yes No
and have you been actively at work for an average of 30 hours
per week for the past 90 days? If "No", give reasons for absence
below. (Disregard vacation days, normal non-working days and any
absence that totals less than seven days.)
7. Do you plan any foreign travel or foreign residence? If yes, Yes No
submit Foreign Travel/Foreign Residence Supplement F257.
8. In the past three years have you taken part in any avocation Yes No
such as motor vehicle racing, parachute jumping, hang
gliding, skin or scuba diving or is such activity planned?
If yes, submit Avocation Supplement F1093.
9. Within the past three years have you flown as a pilot or crew Yes No
member? If yes, submit Aviation Supplement F1093.
10. In the past three years have you been in a motor vehicle Yes No
accident, or charged with a "moving" violation of any motor
vehicle law or has your driver's license ever been suspended?
State ____ Operator's license number ____________
PART II - NON-MEDICAL Questions 11 - 18 - (Complete only if Medical/Paramedical
Examination will not be completed.)
11. Have you used any tobacco products in the past 12 months? Yes No
If "yes", specify:
12. Current height and weight: _____ft. _____inches
13. Name and address of personal physician: ______________________
Date and reason last consulted: ______________________
Diagnosis and treatment: ____________________________
14. Have you ever received treatment for or been diagnosed as Yes No
having or had any of the following? (If yes, circle condition(s)
and give details below.)
Chest Pain Acquired Immune Deficiency Emphysema Paralysis
High Blood Pressure Syndrome (AIDS) Arthritis Hepatitis
Heart Attack Tumor Physical Venereal
Stroke Cancer Impairment Disease
Diabetes Asthma AIDS Related Depression
Pneumonia Complex (ARC) Emotional
Seizure Disorder
15. Have you ever had any disorder of the following? Yes No
(If yes, circle condition(s) and give details below.)
Blood Neck Joints Lungs Gastrointestinal System
Lymph Nodes Back Eyes Breasts Genitourinary System
Blood Vessels Spine Ears Liver Immune System
Skin Bones Heart Kidney Nervous System
F65-95
<PAGE>
16. Other than above, within the past 5 years have you had any Yes No
illness, infection, injury or surgery, physical examination,
electrocardiogram, X-ray or laboratory study, or been a patient
in a hospital or other medical facility?
17. Have you ever requested or received a pension, benefits or Yes No
payment because of injury, sickness or disability?
18. Have you ever used cocaine or been advised to restrict the Yes No
use of alcohol or drugs?
DETAILS: Include diagnosis, dates, duration, names and addresses of all
attending physicians and medical facilities.
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
I agree to the purchase of life insurance on my life by the Policyowner
listed in #1 above and in accordance with the Master Application Insurance
Schedule which is part of this Application. I understand and agree that the
Policyowner will be the owner and beneficiary of the policy.
This Application includes any amendments. No agent may change the terms of the
Application or of any policy issued by C.M. Life Insurance Company and no agent
may waive any of C.M. Life Insurance Company's rights or requirements.
I represent that the answers and statements in this Application are true and
complete to the best of my knowledge and belief. This Application shall be
attached to and form a part of any policy of insurance issued.
Proposed Insured
Signature _____________________________________ Date __________________
Witness _______________________________________
AUTHORIZATION TO RELEASE INFORMATION
I authorize any of the following: licensed physician; health professional;
hospital; clinic; other medically related facility; insurance company;
reinsuring company; MIB, Inc., consumer reporting agency; or employer that has
any record or knowledge of me, or of my health to give to C.M. Life Insurance
Company or its reinsurers all such information. I permit the Company to give to
MIB, Inc., a brief report of this information. This information will be used to
determine eligibility for life insurance. All medical information may be
released. This includes: medical history; mental or physical condition
diagnosis; prognosis; and treatment. This release shall be valid for thirty
(30) months from this date.
A copy of this is as valid as the original. I have the right to receive a copy.
Proposed Insured
Signature _____________________________________ Date __________________
Print Name of Proposed Insured __________________________________
F65A-95
Description of Issuance, Transfer and Redemption Procedures for Policies
Offered by C. M. LIFE VARIABLE LIFE SEPARATE ACCOUNT - I
of C.M. Life Insurance Company
Pursuant to Rule 6e-3(T)(b)(12)(iii) under the Investment Company Act of 1940
C.M. LIFE VARIABLE LIFE SEPARATE ACCOUNT - I ("the Separate Account") of C.M.
Life Insurance Company ("Company") is registered or will register under the
Investment Company Act of 1940 ("1940 Act") as a unit investment trust. The
following sets forth the standards and procedures to be followed in connection
with the ongoing operation of the Separate Account. Please note that certain
terms used herein will have the same definitions as are set forth in the
prospectus for the Policies. Within the Separate Account are eleven
Sub-Accounts. Procedures apply equally to each Sub-Account and for purposes of
this description are defined in terms of the Separate Account, except where a
discussion of both the Separate Account and the individual Sub-Accounts is
necessary. Currently, each Sub-Account invests in shares of a corresponding
investment division of the Connecticut Mutual Financial Services Series Fund I,
Inc. ("C.M. Fund"), the Variable Insurance Products Fund ("VIP Fund"), or the
Variable Insurance Products Fund II ("VIP Fund II"), each of which is an open-
end management investment company registered with the Securities and Exchange
Commission ("SEC") as such under the 1940 Act. The investment experience of a
Sub-Account of the Separate Account depends on the market performance of its
corresponding underlying fund. Although flexible premium variable life
insurance policies funded through the Separate Account may also provide for
fixed benefits through a fixed account (the "Fixed Account") supported by the
Company's General Account, this description assumes that net premiums are
allocated exclusively to the Separate Account and that all transactions
involve only the Sub-Accounts of the Separate Account, except as otherwise
explicitly stated herein.
I. "Public Offering Price": Purchase and Related Transactions -- Section 22(d)
and Rule 22c-1
This section outlines Policy provisions and administrative procedures which
might be deemed to constitute, either directly or indirectly, a "purchase"
transaction. Because of the insurance nature of the Policies, the procedures
involved necessarily differ in certain significant respects from the purchase
procedures for investment companies (i.e. mutual funds) and annuity contracts.
The chief differences revolve around the structure of the cost of insurance
charges and the insurance underwriting process. Certain Policy provisions, such
as reinstatement and loan repayment, do not result in the issuance of a Policy
but may require certain payments by the Policyowner and may involve a transfer
of assets supporting Policy reserves into the Separate Account.
a. Insurance Charges and Underwriting Standards
The Policy provides for flexible premiums. Notices will be sent on a quarterly,
semiannual or annual basis to remind Policyowners of their Planned Periodic
Premium amount and payment date. However, payment of the Planned Periodic
Premium is not necessary, nor does it guarantee that the Policy will remain
in force. The Policy will remain in force so long as the Policy Value less any
outstanding Policy Debt is sufficient to pay the Monthly Deductions charged in
connection with the Policy. The cost of insurance charges are contained in the
Monthly Deductions.
Cost of insurance charges for the policies will not be the same for all
Policyowners. The charges are based on the Company's expectations as to future
mortality, investment, expense and persistency experience. Those expectations
are actuarially determined based on factors including age, health, tobacco
status, and the type of underwriting that was done to assess the Insured's risk.
Additionally, this Policy is available for sale to Corporations or other
multiple life groups or sponsoring associations. To the extent that such a sale
may offer expense savings or reduced risk for the Insured's in the group, the
cost of insurance charges may be adjusted to reflect such efficiencies. The
policies will be offered and sold pursuant to the Company's underwriting
standards and in accordance with state insurance laws. Such laws prohibit
unfair discrimination among Insureds, but recognize that cost of insurance
charges must be based upon the Company's expectation as to future mortality,
investment, expense and persistency for each Insured. Tables showing the
maximum cost of insurance charges will be delivered as part of the policy.
While premium payments under the Policy are flexible, there are limitations as
to amount. No premium payment may be for less than $100 without the Company's
consent. If the Guideline Premium Test is chosen by the Policyowner at issue,
the total of all premiums paid can never exceed the then current maximum
premiums determined by Internal Revenue Service rules governing that test.
Under the Guideline Premium Test, if a premium is paid that would result in
total premiums exceeding the current maximum premium limitations, the Company
will return the amount in excess of such maximums to the Policyowner. Under
the Cash Value Accumulation Test, there is no preset maximum to the premiums
that may be paid into the Policy.
b. Application and Initial Premium Processing
Upon receipt at its Service Center (which is currently the Company's
Principal Office) of an application, in good order, from a prospective
Policyowner, C.M. Life will follow certain insurance underwriting procedures
designed to determine whether the proposed Insured is insurable. This process
may involve verification procedures such as medical examinations and may require
that further information be provided by the proposed Policyowner before a
determination of insurability can be made. In some cases, an entire group of
Insureds will be pre-approved for guaranteed issue underwriting based on
information provided by the common Policyowner on a master application. This
process will also include an assessment of whether the Policyowner has a
sufficient insurable interest in the Insured to support ownership of the Policy
under applicable state insurance laws. A Policy cannot be issued until this
underwriting procedure has been completed.
If, at the time of application, a prospective Policyowner pays at least the
Planned Periodic Premium, pending underwriting approval, C.M. Life will provide
fixed conditional insurance pursuant to a Conditional Insurance Agreement in the
amount of insurance applied for, up to a maximum of $1,000,000 per Insured.
This coverage will generally continue for a maximum of ninety (90) days from the
date of the application or the completion of a medical exam, should one be
required. In no event will any insurance proceeds be paid under the Conditional
Insurance Agreement if death is by suicide.
If the application is approved, the Policy will be in force as of the date the
terms of the Conditional Insurance Agreement were met. If no Conditional
Insurance Agreement is in effect because the prospective Policyowner did not
wish make a payment at least equal to the Planned Periodic Premium, upon
delivery of the Policy, C.M. Life will require payment of sufficient premium to
place the insurance in force.
Pending completion of insurance underwriting and other Policy issuance
procedures, initial premium will be held in the Company's General Account. If
the application is approved and the Policy is issued and accepted, the Net
Premium (the premium payment less the tax expense charge and any applicable
premium charge) held in the General Account will be credited with interest at a
specified rate (no less than 3%) beginning not later than the date of receipt of
the premium at the Company's Service Center. If a policy is not issued and
accepted, the initial premiums will be returned to the Policyowner without
interest.
If the application is approved, the Policy Value will be allocated according to
the Policyowner's instructions upon issuance and acceptance of the Policy. If
the Policy provides for a full refund of the initial purchase payment under its
"Right to Examine Policy" provision, the portion of the Policy Value which was
instructed to be allocated to the Separate Account will be allocated to the
Money Market Sub-Account. After the expiration of the "Right to Examine Policy"
provision, the Policy Value will be allocated to the Sub-Accounts and the Fixed
Account according to the Policyowner's instructions.
Subject to the approval of the Company, a Policy may be backdated no more than
six months prior to the date of the application if the Insured's lower Age on
the date of issue results in lower cost of insurance rates. The Company will
require the payment of all charges which would have been due had the application
date coincided with the back-dated issue date.
These processing procedures are designed to provide insurance, starting with the
date of the application, to the proposed Policyowner in connection with payment
of the initial premium. Such procedures are designed to not dilute any benefit
payment to any existing Policyowner. Although a Policy cannot be issued until
the underwriting process has been completed, the proposed Policyowner will
receive immediate insurance coverage, if a sufficient initial premium is
received, the Insured proves to be insurable, and a sufficient insurable
interst is found to exist.
The Company will require that the Policy be delivered within a specific delivery
period to protect itself against anti-selection by the prospective Policyowner
resulting from a deterioration of the health of the proposed Insured.
Generally, the period will not exceed the shorter of 30 days from the date the
Policy is issued and 75 days from the date of Part 2 of the Application.
c. Premium Allocation
Net Premiums are credited to the Policy as of the date the premium payments are
received by the Company, with the possible exception of the first Net Premium.
Net Premiums are equal to the gross premiums minus the tax expense charge and
any applicable premium charge. Currently, the tax expense charge compensates
the Company for state and local taxes imposed on premiums paid for the Policy.
Although the premium taxes may vary by jurisdiction, the tax expense charge
reflects an average charge. It may be adjusted to reflect any increase or
decrease in the applicable state or local premium tax rate. The Company
makes no adjustment for deferred acquisition cost tax expenses, although it
reserves the right to do so in the future.
The premium charge helps to compensate the Company for the costs associated
with the sale of the Policy. Premium charges will be assessed against premium
payments received during the first seven Policy years after the issue of the
Policy or the effective date of an increase in Specified Amount. During that
period, premium charges will only be assessed against premium payments received
during a Policy year up to the annual Target Premium for the Policy or the
increase in Specified Amount. No premium charge will be assessed against
premiums received during a Policy year in excess of the applicable Target
Premium. For an increase in Specified Amount, premium payments will be
prorated between the original Specified Amount and the increase using the
Target Premiums for each to calculate the pro rata split.
The Policyowner may allocate Net Premiums among the Fixed Account and the Sub-
Accounts for the Separate Account. The Policyowner may change the allocation
of Net Premiums without charge at any time by providing written notice to the
Service Center. The change will be effective as of the date of receipt of the
notice at the Service Center. The Policyowner may transfer amounts among the
Sub-Accounts and the Fixed Account, subject to certain restrictions.
d. Repayment of Loan
A Loan made under this Policy may be repaid with an amount equal to the original
Loan plus Loan Interest.
When a Loan is made, the Company will transfer Policy Value from each Sub-
Account to the Fixed Account. The Policy Value transferred from each Sub-
Account will equal the amount of the Loan allocated to that Sub-Account. Since
the Company will credit interest on Policy Value so transferred at a rate equal
to the Loan Interest Rate less 1.5%, the Company will retain the difference
between these rates in order to cover certain expenses and contingencies. Upon
repayment of Policy Debt, the Company will reduce the Policy Value in the Fixed
Account attributable to the Loan and transfer the reduction in Policy Value to
the Sub-Accounts according to either the Policyowner's instructions or, if no
allocation instructions have been received, the premium payment allocation
percentages then in effect. Loan repayments allocated to the Separate Account
cannot exceed Policy Value previously transferred from the Separate Account to
secure the Policy Debt.
e. Policy Reinstatement
Pursuant to applicable state law, if the Policy has not been surrendered and the
Insured is alive, a terminated Policy may be reinstated anytime within three
years after the lapse date and before the Maturity Date. The reinstatement will
be effective on the monthly payment date following the date the Policyowner
submits the following to the Company: (1) a written application for
reinstatement; (2) evidence of insurability showing that the Insured is
insurable according to the Company's underwriting rules; and (3) a premium
payment at least equal to the greater of the Planned Periodic Premium or a
premium sufficient to cover three Monthly Deductions using the last monthly
deduction amount prior to the lapse of the Policy.
The Policy Value on the date of reinstatement is:
(a) the Net Premium paid to reinstate the Policy increased for interest, at a
rate determined by the Company and guaranteed to be no less than 3%
annually, from the date the payment for reinstatement was received at the
Company's Service Center;
(b) plus an amount equal to the Policy Value less Policy Debt on the lapse date;
(c) less the Monthly Deduction due on the date of reinstatement.
The Policyowner may not repay or reinstate any Policy Debt outstanding on the
lapse date or termination date.
f. Correction of Misstatement of Age
If the Insured's Age as stated in the application for a Policy is not correct,
benefits under a Policy will be adjusted to reflect the correct Age. The
adjusted benefit will be equal to the benefit which the most recent cost of
insurance charge would have purchased for the correct Age.
g. Contestability
The Company will not contest the validity of a Policy after it has been in force
during the Insured's lifetime for two years from the date of issue. The Company
will not contest the validity of any increase in the Specified Amount after such
increase has been in force during the Insured's lifetime for two years from its
effective date.
If the Policy is reinstated, the Policy cannot be contested after it has been in
force during the Insured's lifetime for two years from the date of
reinstatement. The Company can contest statements contained in the initial or
reinstatement application within the two-year period following the date of
receipt of such application.
h. Reduction in Cost of Insurance Rate Classification
By administrative practice, the Company will reduce the cost of insurance rate
classification for an Insured if evidence of insurability is submitted in a form
satisfactory to the Company to demonstrate that the Insured qualifies for a
lower classification. After the reduced rating is determined, the Policyowner
will pay a lower cost of insurance charge for each Monthly Deduction. If new
evidence of insurability provided in connection with an increase in Specified
Amount demonstrates that the Insured is in a higher risk classification, the
higher cost of insurance rate will apply only to the charges associated with
the increase in Specified Amount.
i. Reduction in Charges
While this Policy is available for sale to individuals, it will also be sold to
corporations and to other multiple life groups or sponsoring organizations.
Depending on the size of the group, the nature of the sale, and the premium
volume, there may be expense savings that could be passed on to the customer.
We reserve the right to reduce the premium charge, cost of insurance charge, or
any other charge that we feel is appropriate to reflect any expense savings.
Sales expenses, underwriting expenses and administrative expenses are examples
of potential areas where savings may be realized.
II. "Redemption Procedures": Surrender and Related Transactions
The policies provide for the payment of moneys to a Policyowner or Beneficiary
upon presentation of a Policy. The amount received by the payee will depend
upon the particular benefit for which the Policy is presented, including, for
example, the Surrender Value or Death Benefit. There are also certain Policy
provisions (e.g., partial withdrawals or the loan privilege) under which the
Policy will not be presented to the Company but which will affect the
Policyowner's benefits and may involve a transfer of the assets supporting the
Policy reserve out of the Separate Account. Any combined transactions on the
same day which counteract the effect of each other will be allowed. The Company
will assume the Policyonwer is aware of the possible conflicting nature of the
transactions and desires their combined result. If a transaction is requested
which the Company will not allow (e.g., a request for a decrease in the
Specified Amount which lowers the face amount below the state minimum) the
Company will reject the whole transaction and not just the portion which
causes the disallowance. The Policyowner will be informed of the rejection and
will have an opportunity to give new instructions.
a. Surrender for Surrender Value
The Company will normally pay the Surrender Value within seven days after
receipt (unless a shorter period is required under applicable law or
regulation), at its Service Center, of the Policy and signed request for
surrender. Normally, computations with respect to the investment experience
of each Sub-Account will be made as of the close of trading of the New York
Stock Exchange. This will enable the Company to pay a Surrender Value on
surrender based on the next computed value after the surrender request is
received. For valuation purposes, the surrender is effective on the date the
Company receives the request at its Service Center (although insurance
coverage ends the day the request is mailed).
The Policy Value (equal to the value of all accumulations in the Separate
Account) may increase or decrease from day to day depending on the investment
experience of the Separate Account. Calculations of the Policy Value for any
given day will reflect the actual premiums paid, expenses charged and deductions
taken. The Company will deduct a tax expense charge and any applicable premium
charge from each premium payment. The balance (Net Premium) is allocated to the
Separate Account and the Fixed Account according to Policyowner's instructions.
The Company will also make monthly deductions from a Policy to cover the cost of
insurance and administrative expenses for the following month. The monthly
administrative charge is $10 per policy and $0.10 per thousand of Specified
Amount, on a guaranteed basis. Current charges reflect actual administrative
expenses and are equal to $5 per policy for years twenty-one and later. The
monthly administrative charge is designed to compensate the Company for
administering and maintaining a Policy. Other possible deductions from the
Policy include a transaction charge for partial withdrawals and a charge for
certain transfers.
There are no charges on the surrender of the Policy.
b. Charges on Partial Withdrawal
Partial withdrawals may be made against the Surrender Value of the Policy. The
minimum withdrawal is $1,000. Under Death Benefit Option 1, the Specified
Amount is reduced by the amount of the partial withdrawal, and a partial
withdrawal will not be allowed if it would reduce the Specified Amount below
$50,000. A transaction charge may be assessed on each partial withdrawal.
c. Proceeds
Proceeds may be payable under the Policy upon the death of the Insured, the
maturity of the Policy, or the surrender of the Policy prior to the Maturity
Date. Prior to the Maturity Date, the Proceeds payable upon the full surrender
of the Policy will be equal to the Surrender Value. On or after the Maturity
Date, the Proceeds payable will also be equal to the Surrender Value.
The Proceeds payable upon the death of the Insured will equal the Death Benefit
payable under the Death Benefit Option selected by the Policyowner, less Policy
Debt and any due and unpaid monthly deductions. Under Death Benefit Option 1,
the Death Benefit is the greater of either the Specified Amount or the
Guideline Minimum Death Benefit. Under Death Benefit Option 2, the Death
Benefit is the greater of either the Specified Amount plus the Policy Value or
the Guideline Minimum Death Benefit. The Guideline Minimum Death Benefit will
vary between the Guideline Premium Test and the Cash Value Accumulation Test.
Upon the death of the Insured, the Company will pay Proceeds to the Beneficiary
normally within seven days after receipt, at its Service Center, of: the Policy,
due proof of death of the Insured, and all other requirements necessary to make
payment. The Company may delay payments under certain circumstances as
described in the prospectus.
The Company will make payment of the Proceeds out of its General Account, and
will transfer assets from the Separate Account to the General Account in an
amount equal to the reserve in the Separate Account attributable to the Policy.
The excess, if any, of the Proceeds over the amount transferred will be paid out
of the General Account.
d. Termination
The failure to make premium payments will not cause the Policy to lapse unless:
(a) the Surrender Value is insufficient to cover the next Monthly Deduction; or
(b) Policy Debt exceeds the Policy Value. If one of these situations occurs,
the Policy will be in default. The Policyowner will then have a grace period of
62 days, measured from the date of default, to make sufficient payments to
prevent termination. On the date of default, the Company will send notice to
the Policyowner and to any assignee of record. The notice will state the amount
of premium due and the date on which it is due.
Failure to make a sufficient payment within the grace period will result in
termination of the Policy. If the Insured dies during the grace period, the
Proceeds will still be payable, but any monthly deductions due and unpaid
through the policy month in which the Insured dies and any other overdue charge
will be deducted from the Proceeds.
e. Policy Loan
Policy Loans may be taken against the Policy Value at any time. The total amount
which may be borrowed is the Loan Value. The Loan Value is an amount equal to
the Policy Value less existing Policy Debt and less projected interest to the
next Policy Anniversary at the then applicable Loan Interest Rate. Currently,
there is no minimum limit on the amount of the loan. The Policy Value for this
purpose will be that next computed after receipt of a loan request. The Loan
amount will be paid normally within seven days after the Company receives
request at its Service Center, but the Company may delay payments under certain
circumstances as described in the prospectus.
A Policy Loan will be subject to a Loan Interest Rate which is calculated based
on the current rate specified as the monthly average of the Composite Yield on
Seasoned Corporate Bonds as published by Moody's Investors Service. The rate
will be calculated two months prior to the Policy's Anniversary Date, and will
remain in force for the entire Policy Year. The rate will only be increased on
the next Policy Anniversary if the calculated increase is greater than or equal
to 1/2%. Where required by State law, a fixed interest rate will be available
at a rate of 8%, unless a different rate is required under applicable state law.
Further, the variable interest rate will not exceed the maximum interest rate
permitted in the Policy's Contract State.
The amount of any outstanding Policy Loan plus accrued interest is called
"Policy Debt". When a Policy Loan is made, the portion of the assets in the
Separate Account (which is a portion of the Policy Value and which also
constitutes a portion of the reserves for the Death Benefit) equal to the Policy
Debt created thereby is transferred by the Company from the Separate Account to
the Fixed Account. Allocation of the Policy Loan among Sub-Accounts will be
according to the Policyowner's request. If this allocation is not specified or
not possible, the Policy Loan will be allocated based on the proportion the
Policy Value in the Fixed Account, less Policy Debt, and the Policy Value in
each Sub-Account bears to the total Policy Value, less Policy Debt. Policy
Value in each Sub-Account equal to the Policy Loan allocated to such Sub-accoun
will be transferred to the Fixed Account, and the number of Accumulation units
equal to the Policy Value so transferred will be canceled. Because of the
transfer, a portion of the Policy is not variable during the Policy Loan period
and, therefore, the Death Benefit and the Surrender Value are permanently
affected by any Policy Debt whether or not repaid in whole or in part. The
Company credits the Policy Value in the Fixed Account attributable to the Policy
Loan with a rate of return equal to the effective Loan Interest Rate less 1.5.
Upon repayment of the Policy Loan, the Policy Value held in the Fixed Account as
collateral will be reallocated to the Sub-Accounts according to the
Policyowner's instructions or, if none, according to the most recent Net Premium
allocation instructions.
Interest is accrued daily and payable in arrears at the Loan Interest Rate.
Interest is payable at the end of each Policy Year or on a pro rata basis for
such shorter period as the Policy Loan may exist. Loan interest is due on each
Policy anniversary. If not paid when due, it is added to the Policy Loan
principal and bears interest at the same rate of interest. If the resulting
Policy Loan principal exceeds the Policy Value in the Fixed Account, the Company
will transfer Policy Value equal to the excess Policy Debt from the Policy Value
in each Sub-Account to the Fixed Account; as security for the excess Policy
Debt. The Company will allocate the amount transferred among the Sub-Accounts
in the same proportion that the Policy Value in each Sub-Account bears to the
total Policy Values in all Sub-Accounts.
After the tenth Policy Year, and where permitted by applicable law, Preferred
Loans may be taken against the Policy. The Preferred Loan provision permits the
Policyowner to take loans against the Policy Value at a rate that is 1.5% less
than the Loan Interest Rate then in effect for the Policy. The maximum
Preferred Loan Amount is 10% of the Policy Value at the time of the Preferred
Loan request.
Failure to repay a loan will not necessarily terminate the Policy. If the
Surrender Value is not sufficient to cover the monthly deductions for the cost
of insurance and administrative expenses, the Policy will go into a 62 day grace
period as described above.
f. Transfers Among Sub-Accounts
Currently, Policy Value may be transferred among the Sub-Accounts at any time.
Policy Value may also be transferred between the Sub-Accounts and the Fixed
Account, but that privilege is subject to certain limitations.
All requests for transfers must be made in good order to the Service Center.
The amount transferred will be based on the Policy Value in the Account(s) next
computed after receipt of the transfer order. C.M. Life will make transfers
pursuant to valid written or telephone request. A properly completed
authorization form must be on file at the Service Center before telephone
requests will be honored. C.M. Life will take reasonable measures to make
certain that telephone requests are genuine. This may include use of a persona
identification number, and recording of telephone calls. Failure to follow such
procedures may result in liability to C.M. Life.
Only one transfer from the Fixed Account to the Separate Account may be made
per Policy Year. The one transfer permitted may not exceed 25% of the Policy
Value held in the Fixed Account at the time of transfer request. There will
also be a 90 day waiting period between transfers out of the Fixed Account.
The Policy Value held in the Fixed Account to secure a Policy loan may not be
transferred.
The Fixed Account and the Money Market Portfolio are competing investment
options. Transfers between these competing options will not be permitted.
For a period of ninety (90) days following a transfer from one competing option,
no transfer can be made to the other competing option. For a period of 90 days
following a transfer to one competing option, no transfer can be made from the
other competing option.
The transfer privilege is subject to the consent of C.M. Life. C.M. Life
reserves the right to impose limitations on transfers including, but not limited
to: (1) the minimum amount that may be transferred; (2) the minimum amount that
may remain in a Sub-Account following a transfer from that Sub-Account; (3) the
minimum period of time between transfers involving the Fixed Account; and
(4) the maximum amount that may be transferred each time to or from the Fixed
Account.
Currently, the first twelve transfers in a Policy Year are free of any charge.
Thereafter a $25 transfer charge will be deducted from the amount transferred
for each transfer in that Policy Year. Any transfers made with respect to a
conversion privilege, Policy Loan, material change in investment policy, or
reallocation of Policy Value within 20 days of issue will not count towards the
twelve free transfers. The Company reserves the right to change the number of
free transfers allowed in a Policy Year or to adjust the charge that will be
deducted for transfer that are not free.
An Account Rebalancing option is also available. This option maintains a
specified allocation of Policy Value among selected Sub-Accounts by
automatically transferring Policy Value on a monthly, quarterly, semiannual or
annual basis in accordance with the allocation selected by the Policyowner.
Generally, account rebalancing will be processed on the 15th of each scheduled
month unless the 15th is not a business day, in which case the rebalancing will
be processed on the next business day. Transfers made in connection with
Account Rebalancing are without charge and do not count toward the twelve free
transfers allow per Policy Year.
Transfer charges will be deducted from the Policy Value transferred, and will be
allocated Pro Rata to the Sub-Accounts, and if applicable the Fixed Account,
from which the transfers were made.
g. Right of Withdrawal Procedures
The Policy provides that the Policyowner may cancel it by mailing or delivering
the Policy to the Service Center or an agent of the Company on or before the
latest of (1) 10 days after the Policyowner receives the Policy (or longer
where required by state law), or (2) 10 days after the Company mails or
personally delivers to the Policyowner a written Notice of Withdrawal Right. If
the Policy provides for a full refund of the initial payment under its "Right to
Examine Policy" provision, the Policyowner will receive on cancellation of the
greater of (1) the entire payment, or (2) the Policy Value plus any amounts
deducted under the Policy for taxes, charges or fees. If the Policy does not
provide for a full refund of the initial payment, the Policyonwer will receive
upon cancellation the sum of (1) the difference between any payments made,
including fees and charges, and the amounts allocated to the Separate Account,
(2) the Policy Value (a=on the date the cancellation request is received by the
Company) attributatble to the amounts allocated to the Separate Account, and
(3) any fees or charges imposed on the amounts in the Separate Account.
A free look privilege also applies after a requested increase in Specified
Amount. After an increase, the Company will mail or deliver notice of the "Free
Look" with respect to the increase. The Policyowner will have the right to
cancel the increase before the latest of (a) 45 days after the application for
the increase is signed, (b) 10 days after the Policyowner receives the new
specification pages issued for the increase (or longer where required by
state law), or (c) 10 days after the Company mails or delivers a notice of
withdrawal rights to the Policyowner, and receive a credit to the Policy Value
for charges which would not have been deducted but for the increase. The amoun
to be credited will be refunded if the Policyowner so requests.
h. Conversion Privileges
Once during the first 24 months after the Date of Issue or after the effective
date of an increase in Specified Amount, while the Policy is in force, the
Company will allow the Policy to be converted without Evidence of Insurability
to any flexible premium adjustable life insurance Policy with fixed and
guaranteed minimum benefits which had been offered by the Company on the Date of
Issue or on the effective date of an increase in Specified Amount, whichever is
applicable. Assuming that there have been no increases in the initial Specified
Amount, this can be accomplished with 24 months after the Date of Issue by
transferring, without charge, the Policy Value in the Separate Account to the
Fixed Account and by simultaneously changing the premium allocation instructions
to allocate future premium payments to the Fixed Account. Within 24 months
after the effective date of each increase, the Company will also allow the
Policyowner to transfer, without charge, all or part of the Policy Value in the
Separate Account to the Fixed Account and simultaneously change the premium
allocation instructions to allocate all or part of future premium payments to
the Fixed Account.
Where required by state law, and at a Policyowner's request, C.M. Life will
issue a flexible premium adjustable life insurance policy. The new Policy will
have the same Specified Amount, issue ages, and dates of issue as the original
policy, and will have the underwriting classification we then offer that is most
similar to the original Policy.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that I, John D. Loewenberg, do hereby appoin
MICHAEL A. CHONG, WILLIAM D. WILCOX, and ANN F. LOMELI, and each of them
severally, my true and lawful attorneys-in-fact, for me and in my name, place
and stead to execute and file any instrument or document to be filed as part of
or in connection with or in any way related to the Registration Statements and
any and all amendments thereto, filed under the Securities Act of 1933, as
amended, and/or the Investment Company Act of 1940, as amended, and/or under
laws of any jurisdiction of the United States in connection with C.M. Life
Variable Life Separate Account I, and to have full power and authority to do or
cause to be done in my name, place and stead, each and every act and thing
necessary or appropriate in order to effectuate the same, as fully to all
intents and purposes and I might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact, or any of them, may do or cause to
be done by virtue hereof. Each said attorney-in-fact shall have power to act
hereunder with or without the others.
IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of July, 1995.
/s/John D. Loewenberg
John D. Loewenberg
CONSENT OF INDEPENDENT PUBLIC ACCOUNTS
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
Registration Statement File No. 33-91072 for C.M. Life Variable Life Separate
Account I.
/s/ Arthur Andersen, LLP
Hartford, Connecticut
July 28, 1995
Connecticut Mutual
140 Garden Street
Hartford, CT 06154
(203) 987-6500
August 11, 1995
Gentlemen:
This opinion is furnished in connection with he filing by C.M. Life Insurance
Company of the Pre-Effective Amendment No. 1 to the Registration Statement on
Form S-6 (filed on August 11, 1995) of its flexible premium variable life
insurance policy ("Policy"). The prospectus included in the Pre-Effective
Amendment No. 1 describes the Policy.
I am familiar with the above named Registration Statement and the Pre-Effective
Amendment thereto, including the exhibits.
In my opinion, the illustration of death benefits and cash values included in
Appendix C of the prospectus, based on the assumptions stated in the
illustrations, are consistent with the provisions of the Policy. The rate
structure of the Policy has not been designed so as to make the relationship
between premiums and benefits, as shown in the illustrations, appear more
favorable to a prospective purchaser of a Policy for a person age 30 or a
person age 45 than to prospective purchasers of Policies for people at other
ages or underwriting classes.
I hereby consent to the use of this opinion as an exhibit to Pre-Effective
Amendment No. 1 to the Registration Statement.
Sincerely,
/s/Brian S. Reid
Brian S. Reid
Actuary
C.M. Life Insurance Company
140 Garden Street
Hartford, CT 06154
August 11, 1995
Gentlemen:
In my capacity as Counsel of C.M. Life Insurance Company (the "Company"), I have
participated in the preparation of this Pre-Effective Amendment to the
Registration Statement on Form S-6 under the Securities Act of 1933 of the
Company's individual flexible premium variable life insurance policies
("Policies") and in the registration of C.M. Life Variable Life Separate
Account I under the Investment Company Act of 1940.
I am of the following opinion:
1. C.M. Life Variable Life Separate Account I is a separate account of the
Company validly existing pursuant to the Connecticut Insurance Code and
regulations issued thereunder.
2. The assets held in C.M. Life Variable Life Separate Account I equal to the
reserves and other policy liabilities of the Policies which are supported by
C.M. Life Variable Life Separate Account I are not chargeable with the
liabilities arising out of any other business the Company may conduct.
3. The individual flexible premium variable life insurance policies, when issued
in accordance with the Prospectus contained in the Registration Statement and
upon compliance with applicable state law, are legally issued and binding
obligations of the Company in accordance with their terms.
In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as in my judgment are necessary or
appropriate.
I hereby consent to the filing of this opinion as an exhibit to this amendment
to the Registration Statement filed under the Securities Act of 1933.
Sincerely,
/s/William D. Wilcox
William D. Wilcox
