<PAGE>
Registration No. 333-41667
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 6
TO
FORM S-6
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
<TABLE>
<S> <C> <C>
A. Exact name of Trust: C.M. Life Variable Life Separate Account I
B. Name of Depositor: C.M. Life Insurance Company
C. Complete address of 140 Garden Street
Depositor's principal Hartford, CT 06154
executive offices:
D. Name and address of Ann Lomeli
Agent for Service Corporate Secretary
of Process: 1295 State Street
Springfield, MA 01111
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485.
--------
X on May 1, 1999 pursuant to paragraph (b) of Rule 485.
--------
60 days after filing pursuant to paragraph (a)(1) of Rule 485.
--------
on pursuant to paragraph (a)(1) of Rule 485.
-------- ----------------
this post effective amendment designates a new effective
date for a previously filed post effective amendment. Such
effective date shall be .
-------- --------------
E. Title of Securities being registered: Survivorship Flexible Premium
Adjustable Variable Life Insurance
Policies
F. Approximate date of proposed As soon as practicable after the
public offering: effective date of this Registration
Statement.
</TABLE>
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
<TABLE>
Item No. of
Form N-8B-2 Caption
- ----------- -------
<S> <C>
1 Cover Page; The Separate Account.
2 Cover Page.
3 Cover Page.
4 Sales and Other Agreements.
5 The Separate Account.
6 Not Applicable.
7 Not Applicable.
8 Appendix F. Financial Statement.
9 Legal Proceedings.
10 Detailed Description of Policy Features; Investment Options;
Other Policy Information.
11 Investment Options.
12 Investment Options; Sales and Other Agreements.
13 Introduction; Detailed Description of Policy Features.
14 Detailed description of Policy Features.
15 Premiums; Exhibit 99(11).
16 Introduction; The Separate Account.
17 Detailed description of Policy Features; Exhibit 99(11).
18 The Separate Account.
19 Other Information.
20 Not Applicable.
21 Policy Loan Privilege.
22 Not Applicable.
23 Bonding Arrangement.
24 Detailed Description of Policy Features; Other Information;
Investment Options.
25 Other Information.
26 Other Information; The Investment Options.
27 Other Information.
28 Appendix E: Directors and Executive Officers.
29 Other Information.
30 Other Information.
</TABLE>
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
<TABLE>
Item No. of
Form N-8B-2 Caption
- ----------- -------
<S> <C>
31 Not Applicable.
32 Not Applicable.
33 Not Applicable.
34 Not Applicable.
35 Sales and Other Agreements.
36 Not Applicable.
37 Not Applicable.
38 Sales and Other Agreements.
39 Sales and Other Agreements.
40 Sales and Other Agreements.
41 Sales and Other Agreements.
42 Not Applicable.
43 Sales and Other Agreements.
44 The Separate Account.
45 Not Applicable.
46 Account Value and Net Surrender Value; The Separate Account.
47 The Separate Account.
48 Not Applicable.
49 Not Applicable.
50 Not Applicable.
51 Detailed Description of Policy Features; Other Policy
Information.
52 Investment Options.
53 Federal Income Tax Considerations.
54 Not Applicable.
55 Not Applicable.
56 Not Applicable.
57 Not Applicable.
58 Not Applicable.
59 Appendix F.
</TABLE>
<PAGE>
Survivorship Flexible Premium Adjustable
Variable Life Insurance Policies*
Issued by C.M. Life Insurance Company
This Prospectus describes a survivorship life insurance policy (the "Policy")
offered by C.M. Life Insurance Company ("C.M. Life"). While the Policy is in
force, it provides lifetime insurance protection on the two Insureds named in
the Policy. It pays a Death Benefit at the death of the last surviving Insured
(the "second death").
In this Prospectus, "you" and "your" refer to the Owner of the Policy. "We,"
"us," and "our" refer to C.M. Life. "MassMutual" refers to Massachusetts Mutual
Life Insurance Company. C.M. Life is a wholly owned subsidiary of MassMutual.
The Policy provides premium payment and Death Benefit flexibility. It permits
you to vary the frequency and amount of premium payments and to increase or
decrease the Death Benefit. This flexibility allows you to meet changing
insurance needs under a single insurance policy.
You may allocate Net Premiums and Account Value among the investment funds
(Divisions of the Separate Account) offered under this Policy and a Guaranteed
Principal Account (the "GPA"). Currently, the following funds are available
under this Policy.
<TABLE>
<CAPTION>
MML Trust Oppenheimer Trust Variable Insurance Products Fund II
- --------- ----------------- -----------------------------------
<S> <C> <C>
MML Equity Fund Oppenheimer Capital Appreciation Fund/VA VIP II Contrafund Portfolio
MML Managed Bond Fund Oppenheimer Aggressive Growth Fund/VA
MML Money Market Fund Oppenheimer Global Securities Fund/VA
MML Blend Fund Oppenheimer Strategic Bond Fund/VA T. Rowe Price Equity Series, Inc.
---------------------------------
MML Equity Index Fund T. Rowe Price Mid-Cap Growth Portfolio
MML Small Cap Value Equity
Fund American Century Variable
Portfolios, Inc.
-------------------------
American Century VP Income & Growth
</TABLE>
You bear the investment risk of any Account Value allocated to the investment
funds. The Death Benefit may vary, and the Net Surrender Value will vary,
depending on the investment performance of the funds.
This Policy is not a deposit or obligation of, or guaranteed or endorsed by, any
financial institution. It is not insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other federal agency. It is also
subject to investment risks including loss of the principal amount
invested.
We service the Policy at our Administrative Office located at 1295 State Street,
Springfield, Massachusetts 01111-0001. Our telephone number is (413) 788-8411.
Our Home Office is located in Hartford, Connecticut.
This Policy provides insurance protection. It is not a way to invest in mutual
funds. Replacing an existing life insurance policy with this Policy may not be
to your advantage.
Please read this prospectus and keep it for further reference.
Neither the United States Securities and Exchange Commission nor any state
securities commission has approved this Prospectus or determined that it is
accurate or complete. Any representation to the contrary is a criminal offense.
This Prospectus is valid only when accompanied by the prospectuses for the
investment funds. The Securities and Exchange Commission maintains a Web site
(http://www.sec.gov) that contains material incorporated by reference and other
information regarding registrants that is filed with the Commission.
This Prospectus is not an offer to sell the Policy in any jurisdiction where it
is illegal to offer the Policy or to anyone to whom it is illegal to offer the
Policy.
EFFECTIVE MAY 1, 1999
---
*Title may vary in some jurisdictions.
<PAGE>
Table of Contents
I. INTRODUCTION ...............................3
II. DETAILED DESCRIPTION OF
POLICY FEATURES
Purchasing the Policy .....................6
Death Benefit .............................6
Premiums ..................................8
Transfers .................................9
Policy Termination and Reinstatement .....10
Charges and Deductions ...................11
Deductions from Premiums .................11
Monthly Charges Against the
Account Value ..........................11
Daily Charges Against the
Separate Account .......................12
Surrender Charges ........................12
Other Charges ............................12
Special Circumstances.....................13
Account Value and Net
Surrender Value.........................13
Policy Loan Privilege ....................14
III. INVESTMENT OPTIONS
The Guaranteed Principal Account .........16
The Separate Account .....................16
The Funds ................................17
Fund Profiles.............................17
The Investment Advisers ..................19
IV. OTHER POLICY INFORMATION
When We Pay Proceeds .....................21
Payment Options ..........................21
Beneficiary ..............................22
Assignment ...............................22
Limits on Our Right to Challenge
the Policy .............................22
Error of Age or Gender....................22
Suicide .................................22
Additional Benefits You Can Get
by Rider ...............................23
Sales and Other Agreements ...............23
Compensation .............................24
V. OTHER INFORMATION
C.M. Life and MassMutual..................25
Annual Reports............................25
Federal Income Tax Considerations.........25
Your Voting Rights........................27
Reservation of Rights.....................27
Service Agreement.........................28
Bonding Arrangement.......................28
Legal Proceedings.........................28
Year 2000.................................28
Experts...................................28
Appendix A
Definition of Terms ......................29
Appendix B
Examples of Death Benefit
Option Changes .........................31
Appendix C
Rates of Return...........................33
Appendix D
Illustration of Death Benefits,
Net Surrender Values, and
Accumulated Premiums ...................37
Appendix E
Directors of C.M. Life ...................50
Principal Officers .......................51
Appendix F
Separate Account Financial
Statements.............................F-1
Financial Statements ...................FF-1
2 Table of Contents
<PAGE>
I. Introduction
Please refer to Appendix A, Glossary for definitions of the terms contained in
this Prospectus.
You should consult your Policy for more information about its terms and
conditions, and for any state-specific variances that may apply to your Policy.
These variations will depend on the "contract state" of your Policy; it is
usually the state or other jurisdiction in which you live.
The Policy is a life insurance contract providing a Death Benefit, an Account
Value, surrender rights, Policy loan privileges, and other features
traditionally associated with life insurance. The Policy is a "survivorship"
policy because it provides life insurance on two insured lives and pays a Death
Benefit at the time of the second death.
There is no fixed schedule of premium payments. You may establish a schedule of
premium payments ("Planned Premium Payments"), but if a Planned Premium Payment
is not made the Policy will not necessarily terminate. If Planned Premium
Payments are made they do not guarantee a Policy will remain in force. The
Policy allows you to match premium payments to your income flows or other
financial decisions.
You may increase or decrease the Death Benefit and change the Death Benefit
Option under the Policy. Further, the Death Benefit may vary, and the Net
Surrender Value will vary, with the investment experience of the investment
funds in which an Owner has Account Value. The GPA interest rate is declared and
guaranteed each calendar year. This guaranteed calendar-year rate will not be
less than 3%; it may be greater than 3%. We may credit an interest rate
periodically that exceeds this guaranteed rate.
The following diagram summarizes how the Policy works.
<TABLE>
<CAPTION>
HOW THE POLICY WORKS
Premium Payment
---------------
We deduct a Premium Expense
Charge from each Premium
Payment
(graphic arrow to "Net Premium")
Net Premium
-----------
We allocate the Net Premium
and Account Value among the
Divisions of the Separate
Account and the GPA based on
Investment Earnings the percentages you have chosen Account Value Charges
------------------- (graphic arrow to "Account Value") ---------------------
<S> <C> <C>
Each day we credit or debit the ------------------------------------ Each month we deduct for
investment earnings or losses of the Account Value administrative, insurance, and
Divisions of the Separate Account ------------- rider expenses
less fund investment management fees You determine how the Account
and separate account fees Value is allocated among the Owner Access to
available investment options. Account Value
We also credit interest on values (graphic arrows to "Account Value -------------
in the GPA charges", "Owner Access to You may access Account Values
(graphic arrow to "Account Value") Account Value", "Death Benefit", through loans and withdrawals
and " Policy Surrender")
------------------------------------
Death Benefit Policy Surrender
------------- ----------------
You have a choice of 3 Death Benefit In the first 10 years of coverage,
Options. You can change the Option if you surrender all of your
at a later date coverage or decrease your Policy
Face Amount, we deduct a Surrender
Charge from any amount we pay You.
</TABLE>
Introduction 3
<PAGE>
All expense charges and deductions are described in Charges and Deductions in
Part II. A summary of the product and separate account charges follows.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
CURRENT RATE GUARANTEED RATE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Premium Expense Charge Coverage Years 1-10:13% of premium All Coverage Years: 13% of premium up
up to Expense Premium; 3% of premium to Expense Premium; 3% of premium
over Expense Premium over Expense Premium
Coverage Years 11+: 3% of all premium
- --------------------------------------------------------------------------------------------------------------------
Administrative Charge Policy Years 1-10: $12 per month per All Policy Years: $12 per month per
Policy Policy
Policy Years 11+: $6 per month per
Policy
- --------------------------------------------------------------------------------------------------------------------
Face Amount Charge Coverage Years 1-10: $0.13 per month Coverage Years 1-10: $0.13 per month
per $1,000 of Face Amount per $1,000 of Face Amount
Coverage Years 11+: $0.0 Coverage Years 11+: $0.0
- --------------------------------------------------------------------------------------------------------------------
Insurance Charges A per thousand rate multiplied by For standard risks, the guaranteed
the amount at risk each month. The cost of insurance rates are based on
rate varies by the genders, Issue 1980 Commissioners Standard Ordinary
Ages, and risk classifications of (CSO) Mortality Tables.
the Insureds, and the Year of
Coverage.
- --------------------------------------------------------------------------------------------------------------------
Mortality and Expense All Policy Years: 0.25% on an annual All Policy Years: 0.90% on an annual
Risk Charge basis of daily net asset value of basis of daily net asset value of the
the Separate Account Separate Account
- --------------------------------------------------------------------------------------------------------------------
Investment Management (See separate table on next page.)
Fees and Other Expenses
- --------------------------------------------------------------------------------------------------------------------
Loan Rate Expense Charge Policy Years 1-10: 0.50% of loaned All Policy Years: 2.0% of loaned
amount amount
Policy Years 11+: 0.25% of loaned
amount
- --------------------------------------------------------------------------------------------------------------------
Withdrawal Fee $25 $25
- --------------------------------------------------------------------------------------------------------------------
Surrender Charges First Coverage Year: the lesser of First Coverage Year: the lesser of
100% of the Target Premium or $60 100% of the Target Premium or $60 per
per thousand of Face Amount. thousand of Face Amount.
Coverage Years 2-10: the prior year Coverage Years 2-10: the prior year
Surrender Charge reduced by 10% of Surrender Charge reduced by 10% of
the first year Surrender Charge the first year Surrender Charge
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The Expense Premium referenced above is used to determine the Premium Expense
Charge. The Expense Premium is shown in the Policy; it can be quoted upon
request before the Policy is issued. Examples of current Expense Premiums per
$1,000 of Face Amount, for a Male and Female, both Preferred Nontobacco risk
class, are: Both Age 25 - $5.23; Both Age 55 - $19.09; Both Age 85 - $120.05.
The Expense Premium for your Policy will be based on the Issue Ages, genders,
and risk classes of the Insureds, and on the Face Amount.
The Target Premium referenced above is used to determine commission payments and
Surrender Charges. Although the Target Premium is not shown in the Policy, the
Surrender Charges are listed in the Policy; they can be quoted upon request
before the Policy is issued. Examples of current Target Premiums per $1,000 of
Face Amount, for a Male and Female, both Preferred Nontobacco risk class, are:
Both Age 25 - $3.68; Both Age 55 - $12.64; Both Age 85 - $88.27. The Target
Premium for your Policy will be based on the Issue Ages, genders, and risk
classes of the Insureds, and on the Face Amount.
4 Introduction
<PAGE>
INVESTMENT MANAGEMENT FEES
AND OTHER EXPENSES
Total fund operating expenses expressed as a percentage of average net assets
for the year ended December 31, 1998.
Total Fund
Management Other Operating
Fund Name Fees Expenses Expenses
- --------------------------------- --------------- ------------- ------------
MML Equity Fund 0.37% 0.00% 0.37%
MML Managed Bond Fund 0.45% 0.03% 0.48%
MML Blend Fund 0.37% 0.00% 0.37%
MML Money Market Fund 0.46% 0.03% 0.49%
MML Equity Index Fund 0.30% 0.20% 0.50%
MML Small Cap Value Equity Fund 0.39% 0.05% 0.44%
Oppenheimer Capital
Appreciation Fund/VA+ 0.72% 0.03% 0.75%
Oppenheimer Aggressive Growth
Fund /VA ++ 0.69% 0.02% 0.71%
Oppenheimer Global Securities
Fund/VA 0.68% 0.06% 0.74%
Oppenheimer Strategic Bond
Fund/VA 0.74% 0.06% 0.80%
VIP II Contrafund Portfolio* 0.59% 0.07% 0.66%
T. Rowe Price Mid-Cap Growth
Portfolio 0.85% 0.00% 0.85%
American Century VP Income &
Growth N/A N/A 0.70%
- --------------------------------------------------------------------------------
+The Oppenheimer Growth Division invests in the Oppenheimer Capital Appreciation
Fund/VA. Prior to May 1, 1999, the Oppenheimer Capital Appreciation Fund/VA was
called the Oppenheimer Growth Fund.
++The Oppenheimer Capital Appreciation Division invests in the Oppenheimer
Aggressive Growth Fund/VA. Prior to May 1, 1998, the Oppenheimer Aggressive
Growth Fund/VA was called the Oppenheimer Capital Appreciation Fund.
*A portion of the brokerage commissions that Contrafund pays was used to reduce
the Other Expenses for the Fund. In addition, Contrafund, or the investment
manager on behalf of the Fund, entered into an arrangement with a Fund custodian
whereby credits realized as a result of non-invested cash balances were used to
reduce custodian expenses. Without such reductions, the Other Expenses would
have been 0.11%, increasing the Total Fund Operating Expenses to 0.70%.
Introduction 5
<PAGE>
II. Detailed Description of Policy Features
Purchasing the Policy
To purchase a Policy you must send a completed application to our Administrative
Office. The minimum Initial Face Amount of a Policy is currently $500,000. The
Policy can be issued for two Insureds where the older Insured is between the
ages of 18 and 90 inclusive, and the younger Insured is between the ages of 18
and 85 inclusive. Before issuing a Policy, we will require evidence of
insurability. This usually will require a medical examination.
We determine whether to accept or reject the application for the Policy and the
Insureds' risk classifications. If we do not accept the application, we will
refund any premium paid.
Coverage under the Policy becomes effective on the Issue Date of the Policy or,
if later, the date the first premium is paid. See Premiums for more about the
first premium. For the first premium to be paid, we must receive it in Good
Order.
Unisex Policy. Policies generally are issued with values that vary based on the
genders of the Insureds. Policies issued in Montana are "unisex"; that is, the
policy values do not vary by the genders of the Insureds. Policies issued as
part of an employee benefit plan also may have policy values that do not vary by
gender. References in the Prospectus to sex-distinct policy values are not
applicable to unisex Policies. Upon request we will provide you illustrations
showing the effect of unisex rates on premiums, Net Surrender Values and Death
Benefits.
Right to Return the Policy. Once you receive your Policy, you should review it
carefully. If you are not satisfied with your Policy, you may cancel it within
10 days after you receive it. (This period of time may vary by state.)
To cancel the Policy, return it to us at our Administrative Office, to the agent
who sold the Policy, or to one of our agency offices. If you cancel your Policy,
we will give you a refund.
In most states, this refund is the sum of:
(i) any premium paid for the Policy; plus
(ii) any interest credited to the Policy under the GPA; plus or minus
(iii) an amount reflecting the investment experience of the Divisions of the
Separate Account under this Policy to the date we receive the Policy;
minus
(iv) any amounts withdrawn and any Policy Debt.
In other states, this refund is equal to any premium paid for the Policy,
reduced by any amounts withdrawn and any Policy Debt.
Consult your Policy to determine which refund applies under your Policy. A few
states have variations of these two refund types.
Death Benefit
While the Policy is in force, we will pay the Death Benefit to the named
Beneficiary at the second death. Although we normally will pay the Death Benefit
within seven days of receiving satisfactory proof of the Insureds' deaths, we
may delay payments under certain circumstances. All or part of the Death Benefit
can be paid in cash or under one or more of the payment options described in the
Policy.
Minimum Death Benefit. In order to qualify as life insurance under Internal
Revenue Code ("IRC") Section 7702, the Policy has a Minimum Death Benefit
determined by one of two compliance tests. You choose the test when you apply
for the Policy. You cannot change your choice of test after the Policy is
issued.
Under one test, the Cash Value Test, the Minimum Death Benefit is equal to a
percentage of the Account Value. The percentage depends on the genders (male,
female, unisex), tobacco classifications, and Attained Ages of both Insureds.
Under the other test, the Guideline Premium Test, the Minimum Death Benefit also
is equal to a percentage of the Account Value, but
6 Detailed Description of Policy Features
<PAGE>
the percentage varies only by the Attained Age of the younger Insured. The
percentages are shown in the Policy.
Your choice of the Guideline Premium Test or the Cash Value Test will depend on
how you intend to pay premiums. In general, if you intend to pay premiums in
early policy years only, the Cash Value Test may be more appropriate. If you
intend to pay level premiums over a long period of years, the Guideline Premium
Test may be more appropriate. You should see Policy illustrations of both
approaches to determine how the Policy works under each approach, and which is
best for you.
Death Benefit Options. The Death Benefit is the benefit provided under the Death
Benefit Option in effect on the date of the second death. This benefit is
reduced by any outstanding Policy Debt and any due but unpaid premium needed to
avoid Policy termination. You may choose one of three Death Benefit Options:
(a) Option 1 (a level amount option) or
(b) Options 2 or 3 (variable amount options).
You choose the Death Benefit Option in the application and you may change the
option at a later date subject to certain restrictions described in Changes in
Death Benefit Option.
The Death Benefit provided by Options 1, 2 and 3 is as follows.
Option 1 - The benefit is the greater of:
(a) the Face Amount on the date of the second death; and
(b) the Minimum Death Benefit on the date of the second death.
Option 2 - The benefit is the greater of:
(a) the Face Amount plus the Account Value on the date of the second death; and
(b) the Minimum Death Benefit on the date of the second death.
Option 3 - The benefit is the greater of:
(a) the Face Amount plus the premiums paid less any premiums refunded under the
Policy to the date of the second death; and
(b) the Minimum Death Benefit on the date of the second death.
See Appendix B for examples of how changes in Account Value and the amount of
premiums paid may affect the Death Benefit of a Policy.
Changes in Death Benefit Option. After the first Policy Year, you may change the
Death Benefit Option. You must provide a written application and you may have to
provide evidence that the Insureds still are insurable. The effective date of a
change will be the Monthly Charge Date on or preceding the date we approve the
change. A change in the Death Benefit Option will result in a change of the
Policy Face Amount. The Death Benefit under the new Death Benefit Option will be
the same as the Death Benefit under the old Death Benefit Option at the time of
the change.
You cannot change the Death Benefit Option if:
1. the Face Amount is reduced to less than $500,000 as a result of the change,
2. the Attained Age of either Insured is 85 or older; or
3. only one of the Insureds is alive.
When the Policy Face Amount changes as a result of a change in the Death Benefit
Option, the Monthly Charges also will change. The change in Face Amount also may
change the charges for certain additional benefits. The change in Face Amount
will not change the Policy Surrender Charge.
For examples of Death Benefit Option changes and how they impact the contract,
see Appendix B.
Changes in Face Amount. You may request an increase or decrease in the Face
Amount by submitting a written request for a change of Face Amount to our
Administrative Office. The Face Amount change will be effective on the Monthly
Charge Date on or preceding our acceptance of the request.
Increases in Face Amount. You must provide us with a written application and
evidence the Insureds still are insurable to increase your Face Amount. An
increase may not be less than $50,000. You cannot increase the Face Amount of
the Policy after the younger Insured reaches Attained Age 85, or the older
Insured reaches Attained Age 90.
Detailed Description of Policy Features 7
<PAGE>
If you increase the Policy Face Amount the Face Amount Charge and the Insurance
Charges will increase.
Decreases in Face Amount. You may decrease the Policy Face Amount any time after
the first Policy Year or one year after a Face Amount increase. You must send a
written request to us. You cannot decrease the Face Amount if the decrease would
result in a Face Amount of less than $500,000.
If you decrease the Face Amount, a Surrender Charge may apply. We will deduct
Surrender Charges from the Division(s) of the Separate Account and from the GPA
in proportion to the non-loaned values in each.
A decrease will reduce the Face Amount in the following order:
(a) the Face Amount of the most recent increase
(b) the Face Amounts of the next most recent increases successively
(c) the Initial Face Amount.
If you decrease the Face Amount the Monthly Charges deducted from the Account
Value will change.
If you decrease the Face Amount, the Policy may become a "modified endowment
contract" under federal tax law. Consult your tax advisor. (See also Modified
Endowment Contracts in Part V).
Premiums
The first premium must be paid before the Policy can become effective.
Thereafter, within limits you may make premium payments at any time and in any
amount. Net Premiums are allocated to the Account Value as you choose.
First Premium. Generally, you determine the first premium you want to pay for
the Policy; but it must be at least equal to the minimum initial premium. The
minimum initial premium depends on your chosen premium frequency, Initial Face
Amount and Death Benefit Option, and on the Issue Age, gender, and risk
classification of each Insured.
Planned Premiums. When applying for the Policy, you select the Planned Premium
and the payment frequency (annual, semiannual, quarterly, or monthly check
service). The Planned Premium must be at least $20. The amount of the Planned
Premium and the payment frequency you select are shown in the Policy. We will
send you premium notices based on your selections. To change the amount and
frequency of Planned Premiums, send a written notice to us at our Administrative
Office.
If a Planned Premium payment is not made, the Policy will not necessarily
terminate. Conversely, making Planned Premium payments does not guarantee the
Policy will remain in force. To keep the Policy in force, you must either have a
sufficient "policy value" or meet the safety test. See Grace Period and
Termination.
Premium Payments and Flexibility. After you have paid the first premium, within
limits you may pay any amount at any time while at least one Insured is living.
Send all premium payments to us either at our Administrative Office or at the
address shown on the premium notice.
You may elect to pay premiums by pre-authorized check. Under this procedure, we
automatically deduct premium payments each month from a bank account you
designate. We will not send a bill for these automatic payments.
Premium Limitations. The minimum premium payment is $20.
If you choose the Cash Value Test to qualify your Policy as life insurance, the
maximum premium each Policy Year is the greatest of:
(a) an amount equal to $100 plus double the Expense Premium for the Policy;
(b) the amount of premium paid in the preceding Policy Year; and
(c) the highest premium payment amount that would not increase the insurance
risk (see Insurance Charges).
We may refund any amount of premium payment that exceeds the Cash Value Test
limit.
If you choose the Guideline Premium Test, the maximum premium for each Policy
Year is the lesser of:
(a) the maximum premium for the Cash Value Test; and
8 Detailed Description of Policy Features
<PAGE>
(b) the Guideline Premium Test amount which will be stated in the Policy.
If you choose the Guideline Premium Test, we will refund any amount of premium
payment that exceeds the Guideline Premium Test limit. Otherwise, the Policy
would no longer qualify as life insurance under federal tax law.
Allocating Net Premiums. A Net Premium is a premium payment we receive in Good
Order, minus the Premium Expense Charge.
Net Premiums Received through Issue Date. We will allocate any Net Premiums
received through the Issue Date of the Policy to our general investment account.
Any Net Premiums received before the Policy Date will be allocated as of that
Date. We will credit interest at the rate(s) we use for the GPA during that
time.
Register Date and Valuation Date. Net Premiums credited to the Policy on and
after the Register Date will be allocated among the Divisions and the GPA
according to your Net Premium allocation. Also, any values in the Policy held
before the Register Date will be allocated on that Date among the Divisions and
the GPA according to your Net Premium allocation on that Date.
The Register Date must be a Valuation Date. A Valuation Date is any date on
which the New York Stock Exchange is open for trading.
We set the Register Date for the Policy. It depends on the type of refund
offered under the Right To Return provision in your Policy. Refer back to
Purchasing the Policy for information about this provision.
If the refund includes interest and investment experience, the Register Date is
the Valuation Date that is on, or next follows, the later of:
(a) the day after the Issue Date of the Policy; and
(b) the day we receive the first premium payment in Good Order.
If the refund does not include interest or investment experience:
1. The Register Date is the Valuation Date that is on, or next follows, the
later of:
. the day after the end of the Right To Return period; and
. the day we receive the first premium in Good Order;
2. Any Net Premiums received after the Issue Date but before the Register Date
will be allocated to the Money Market Division; and
3. Any values in the Policy held as of the Issue Date will be allocated to the
Money Market Division on the first Valuation Date after the Issue Date.
Net Premium Allocation. When applying for the Policy, you indicate how you want
Net Premiums allocated among the Divisions and the GPA. You may change your Net
Premium allocation at any time. Just send a written notice to us at our
Administrative Office.
You may set your Net Premium allocation in terms of whole-number percentages
that add to 100%. (Also see Overall Limitation on Net Premium Allocations and
Transfers.)
Transfers
You may transfer all or part of the Account Value invested in a Division of the
Separate Account to any other Division or to the GPA. Simply send us a written
request. Although currently there is no limit on the number of transfers you may
make, we reserve the right to limit the number to no more than one every 90
days. If we impose a limit, it would not apply to a transfer of all funds in the
Separate Account Divisions to the GPA or to transfers made in connection with
any automated-transfer program we offer.
We limit transfers from the GPA to the Separate Account Divisions to one each
Policy Year. You may not transfer more than 25% of the Fixed Account Value (less
any Policy Debt) at the time of the transfer. There is one exception to this
rule. If:
. you have transferred 25% of the Fixed Account Value each year for three
consecutive Policy Years, and
. you have not invested any Net Premium amount in the GPA or
. transferred any money into the GPA during these three years,
Detailed Description of Policy Features 9
<PAGE>
you may transfer the remainder of the Fixed Account Value (less any Policy Debt)
out of the GPA in the succeeding Policy Year. In this situation, you must
transfer the full amount out of the GPA in one transaction.
Any transfer is effective on the Valuation Date at the price next determined
after we receive the request in Good Order at our Administrative Office. We do
not charge for transfers.
Overall Limitation on Net Premium Allocations and Transfers. You may allocate
Net Premiums and transfer amounts to up to 16 Divisions over the life of the
Policy.
Policy Termination and Reinstatement
The Policy will not terminate simply because you do not make Planned Premium
payments. Conversely, making Planned Premium payments does not guarantee that
the Policy will remain in force.
The Policy may terminate if its value cannot cover the Monthly Charges and the
safety test is not met.
If the Policy does terminate, you may be permitted to reinstate it.
Grace Period and Termination. The Policy may terminate without value if:
. its "policy value" on a Monthly Charge Date cannot cover the Monthly
Charges due; and
. the safety test is not met on that Date.
However, we allow a grace period for payment of the premium amount (not less
than $20) needed to avoid termination. We will mail you a notice stating this
amount.
The Policy will terminate without value if we do not receive the required
payment by the end of the grace period.
Grace Period. The grace period begins on the date the Monthly Charges are due.
It ends 61 days after that date or, if later, 31 days after the date we mail the
notice stating the amount needed.
During the grace period, the Policy will stay in force. If the second death
occurs during the grace period, the Death Benefit will be payable. In this case,
any due but unpaid premium amount needed to avoid termination will be deducted
from the Death Benefit.
Policy Value. The definition of "policy value" depends on the Policy Year. The
"policy value" is equal to:
. during the first three Policy Years, the Account Value less any Policy
Debt; and
. after the first three Policy Years, the Net Surrender Value.
If the "policy value" cannot cover the Monthly Charges due but the safety test
is met, then the Monthly Charges due will be reduced to an amount equal to the
Account Value less any Policy Debt.
Safety Test. The safety test allows you to keep the Policy in force, regardless
of the value of the Policy, by making minimum premium payments. But the safety
test can be met only during the Guarantee Period(s) stated in the Policy.
Each Guarantee Period has an associated monthly Guarantee Premium. The amount of
each Guarantee Premium depends on the Issue Age, gender, and risk classification
of each Insured, and on the Face Amount and Death Benefit Option.
For each Guarantee Period, the safety test is met if (A) equals or exceeds (B),
defined as:
(A) premiums paid less any amounts withdrawn, accumulated at an effective
annual interest rate of 3%;
(B) monthly Guarantee Premiums paid on each Monthly Charge Date beginning on
the Policy Date, accumulated at an effective annual interest rate of 3%.
In (A) above, we exclude any premiums refunded (see Premium Limitations).
Example:
The Policy is in the First Guarantee Period. The monthly First Guarantee
Premium is $25. You have made premium payments of $35 on each Monthly Charge
Date beginning on the Policy Date. In this case, the safety test is met.
10 Detailed Description of Policy Features
<PAGE>
Even if the "policy value" cannot cover the Monthly Charges, the Policy will
stay in force.
Generally, the Policy has two Guarantee Periods. The First Guarantee Period is
the first 20 Policy Years or, if less, to Attained Age 90 of the younger
Insured. The Second Guarantee Period is to Attained Age 100 of the younger
Insured. Both Guarantee Periods begin on the Policy Date.
The Guarantee Periods for your Policy are shown in the Policy. If the "contract
state" of your Policy is Massachusetts, only one Guarantee Period is available;
it will not exceed the first five Policy Years. The Guarantee Periods available
may vary in other states as well. Consult your Policy for the Guarantee Periods
available to you.
Reinstating Your Policy. If your Policy terminates, you may reinstate it--that
is, put it back in force. But you may not reinstate your Policy if:
. you surrendered it; or
. five years have passed since it terminated; or
. an Insured has died since the Policy terminated.
Requirements to Reinstate Your Policy. To reinstate your Policy, we will need:
1. a written application to reinstate;
2. evidence, satisfactory to us, that each Insured living when the Policy
terminated still is insurable; and
3. a premium payment sufficient to keep the Policy in force for three months
after reinstatement. The minimum amount of this premium payment will be
quoted on request.
Policy after You Reinstate. If you reinstate your Policy, the Face Amount will
be the same as it was when it terminated. Your Account Value at reinstatement
will be the premium paid at that time, reduced by the Premium Expense Charge and
any Monthly Charges then due. Surrender Charges after reinstatement will apply
as if the Policy had not terminated. However, if the Surrender Charge was taken
when the Policy terminated, then the applicable Surrender Charges will not be
reinstated.
If you reinstate your Policy, it may become a "modified endowment contract"
under current federal tax law. Consult your tax advisor.
Charges and Deductions
We will deduct charges from the Policy to compensate us for:
(a) providing the insurance benefits under the Policy (including any riders);
(b) administering the Policy;
(c) assuming certain risks in connection with the Policy (including any
riders); and
(d) selling and distributing the Policy.
In addition, the fund managers deduct expenses from the funds. For more
information about these expenses, see the individual fund prospectuses.
Deductions from Premiums
We deduct a Premium Expense Charge from each premium payment you make. The
Premium Expense Charge rate is higher for premium payments up to Expense Premium
than for premium payments over Expense Premium. The Expense Premium is based on
the Issue Ages, genders, and risk classifications of the Insureds.
If you have increased the Policy Face Amount, the Expense Premium used here is
the total of the Expense Premiums for the Initial Face Amount and for all
increases.
Monthly Charges Against the Account Value
We deduct charges from the Account Value on each Monthly Charge Date. The
Monthly Charges are:
(a) an Administrative Charge;
(b) a Face Amount Charge;
(c) an Insurance Charge; and
(d) a rider charge for any additional benefits provided by rider.
We deduct the Monthly Charges from the Division(s) and the GPA in proportion to
the non-loaned values of the Policy in the Division(s) and the GPA.
Detailed Description of Policy Features 11
<PAGE>
Administrative Charge and Face Amount Charge. The monthly Administrative Charge
and Face Amount Charge reimburse us for issuing and administering the Policy,
and for such activities as processing claims, maintaining records and
communicating with you.
Insurance Charges. The monthly Insurance Charge for a Policy is equal to the
"amount at risk" under the Policy, multiplied by the monthly Insurance Charge
rate for that Policy month. We determine the amount at risk on the first day of
each Policy month. It is the amount by which the Death Benefit (discounted at
the monthly equivalent of 3% per year) exceeds the Account Value.
Insurance rates are based on the genders, Issue Ages, and risk classes of the
Insureds, and the Year of Coverage. We currently place Insureds into the
following three standard rate classes: Select Preferred, Preferred Nontobacco,
and Preferred Tobacco. We also have substandard rate classes for greater
mortality risks. In otherwise identical Policies, the monthly insurance rate is
higher for tobacco users than for those who do not use tobacco and higher for
Preferred Nontobacco Insureds than for Select Preferred Insureds.
Rider Charge. You can obtain additional benefits by requesting riders on your
Policy. The monthly rider charges include charges for any benefits you add by
rider.
Daily Charges Against the Separate Account
Mortality and Expense Risk Charge. Each day we deduct a charge from the Separate
Account for mortality and expense risks. We do not deduct this charge from the
assets in the GPA.
The mortality risk is a risk that the group of lives we insure may, on average,
live for shorter periods of time than we estimated. The expense risk is a risk
that our costs of issuing and administering Policies may be more than we
estimated.
If we do not need all the money we collect in mortality and risk charges to
cover death benefits and expenses, the amount we do not need will be our gain.
However, even if the money we collect is not enough to cover death benefits and
expenses, we will pay all death benefits and expenses.
Investment Management Fee and Other Expenses. Each of the funds incurs
investment management fees and other expenses. These are deducted from the fund.
Surrender Charges
During the first 10 Years of Coverage under the Initial Face Amount, we will
take a Surrender Charge against the Account Value if you fully surrender the
Policy or decrease the Face Amount. This also applies during the first 10 Years
after an increase in Face Amount. We calculate Surrender Charges separately for
the Initial Face Amount and for each increase in the Face Amount. The Surrender
Charge in the first Year of Coverage is based on the Target Premium. The
Surrender Charge is decreased by 10% of the first year Surrender Charge in each
of the next nine Years of Coverage, and is zero in the eleventh year.
Decrease in Selected Face Amount. If you decrease your Policy Face Amount, we
cancel all or a part of your Face Amount segments. We charge a partial Surrender
Charge. The partial Surrender Charge is equal to the Surrender Charge associated
with each decreased or canceled Face Amount segment. If the partial Surrender
Charge for a decreased or canceled Face Amount segment would be greater than the
Account Value of the Policy, we set the partial Surrender Charge equal to the
Account Value on the date of the surrender.
After a Face Amount decrease, we reduce the Surrender Charge for the remaining
segments by the amount of the partial Surrender Charge.
Other Charges
Withdrawal Fee. If you make a partial Withdrawal from your Policy, we deduct $25
from the amount you withdraw. This fee is guaranteed not to increase for the
duration of the Policy.
12 Detailed Description of Policy Features
<PAGE>
Loan Interest Rate Expense Charge. This charge reimburses us for the expenses of
administering loans.
Special Circumstances
We may vary the charges and other terms of Policies where special circumstances
result in sales or administrative expenses or insurance risks that are different
than those normally associated with these Policies. We will make these
variations only in accordance with uniform rules we establish.
Account Value and Net Surrender Value
The Account Value of the Policy has two components: the Variable Account Value
and the Fixed Account Value.
Variable Account Value. The Variable Account Value is the sum of your values in
each of the Divisions of the Separate Account. It reflects:
. Net Premiums allocated to the Separate Account;
. transfers to the Separate Account from the Guaranteed Principal Account;
. transfers and withdrawals from the Separate Account;
. Monthly Charges and Surrender Charges deducted from the Separate Account;
and
. the net investment experience of the Separate Account.
These transactions are all reflected in the Variable Account Value through the
purchase and sale of accumulation units.
Net Investment Experience and Accumulation Units. The net investment experience
of the Variable Account Value is reflected in the value of the accumulation
units. The value of your accumulation units in a Division is equal to:
. the accumulation unit value in that Division; multiplied by
. the number of accumulation units in that Division credited to your Policy.
We purchase and sell accumulation units at the unit value as of the closing time
of the New York Stock Exchange on the Valuation Date processed.
If we receive a premium or a transaction request in Good Order before the
closing time on a Valuation Date, units will be purchased or sold as of that
Valuation Date. If we receive it in Good Order after that time, units will be
purchased or sold as of the next Valuation Date.
The Variable Account Value of the Policy is the total of the values of the
accumulation units in each Division credited to Policy.
Fixed Account Value. The Fixed Account Value is the accumulation at interest of:
. Net Premiums allocated to the Guaranteed Principal Account; plus
. amounts transferred into the GPA from the Separate Account; less
. amounts transferred or withdrawn from the GPA; and less
. Monthly Charges and Surrender Charges deducted from the GPA.
Interest on the Fixed Account Value. The Fixed Account Value earns interest at
an effective annual rate, credited daily.
For the part of the Fixed Account Value equal to any Policy loan, the daily rate
we use is the daily equivalent of:
. the annual loan interest rate minus the Loan Interest Rate Expense Charge;
or
. 3% if greater.
For the part of the fixed account in excess of any Policy loan, the daily rate
we use is the daily equivalent of:
. the current interest rate we declare; or
. the guaranteed calendar-year interest rate we declare for the year if
greater.
This guaranteed calendar-year rate for each year will be at least 3%.
Net Surrender Value. The Net Surrender Value of the Policy is equal to:
. the Account Value; less
. any Surrender Charges that apply; and less
Detailed Description of Policy Features 13
<PAGE>
. any Policy Debt.
You may surrender the Policy by sending a written request together with the
Policy to our Administrative Office. We will determine the Net Surrender Value
at the end of the Valuation Date on which we receive the request in Good Order.
Withdrawals. After the first Policy Year, you may withdraw up to 75% of the Net
Surrender Value. We deduct a fee of $25 from the amount withdrawn. We do not
charge a Surrender Charge for a Withdrawal. The minimum amount you can withdraw
is $100 (including the Withdrawal fee). We may not allow a Withdrawal if it
would result in a reduction of the Face Amount to less than $500,000.
You must state in the Withdrawal Request from which Divisions or the GPA you
want the withdrawal made. You can state the amount as a dollar amount or a
percentage. The withdrawal will be effective on the date we receive the written
request in Good Order. We will process it within seven days. The Withdrawal
amount you wish taken from each Division of the Separate Account and from the
GPA may not exceed the non-loaned Account Value in each of these. If you have
chosen Death Benefit Option 1 or 3, we will reduce the Face Amount by the amount
of the Withdrawal unless you provide evidence satisfactory to us that the
Insureds or Insured alive still is insurable.
Policy Loan Privilege
General. After the first Policy Year, you may take a loan from the Policy as
long as the Account Value exceeds the total of any Surrender Charges. You must
assign the Policy to us as collateral for the loan. The maximum amount you can
borrow at any time is 90% of the Policy's Account Value less any Surrender
Charge. If there is any outstanding Policy Debt, including any accrued interest,
it reduces the maximum amount available.
Source of Loan. We take the Policy loan amount from the Divisions and the GPA in
proportion to the amount of Account Value in each Division and the GPA
(excluding any outstanding loans) on the date of the loan. We reduce the amount
of units in the Divisions of the Separate Account from which the loan is taken.
We transfer the resulting dollar amounts to the loaned portion of the GPA.
We may delay granting any loan you want taken from the GPA for up to six months.
We may delay granting any loan from the Divisions during any period that:
(i) the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
(ii) trading is restricted;
(iii) the SEC determines a state of emergency exists; or
(iv) the SEC permits us to delay payment for the protection of our Owners.
Whenever total Policy Debt (which includes accrued interest) equals or exceeds
the Account Value less Surrender Charges, we will send a notice to you. This
notice will state the amount needed to bring the Policy Debt back within the
limit. If we do not receive this amount within 31 days after the date we mailed
the notice, and if Policy Debt exceeds the Account Value less any Surrender
Charges at the end of those 31 days, the Policy terminates without value.
Loan Interest Charged. At the time of Application, you may select a loan
interest rate of 5% or (in all jurisdictions except Arkansas) an adjustable loan
rate. Each year we will set the adjustable rate that will apply for the next
Policy Year. The maximum loan rate is based on the Monthly Average Corporate
yield on seasoned corporate bonds as published by Moody's Investors Service,
Inc. If this Average is no longer published, we will use a similar average as
approved by the insurance department of your "contract state." The maximum rate
is the greater of:
(i) the published monthly average for the calendar month ending two months
before the Policy Year begins,
(ii) or 4%.
If the maximum rate is less than 1/2% higher than the rate in effect for the
previous year, we will not increase the rate. If the maximum rate is at least
1/2% lower than the rate in effect for the previous year, we will decrease the
rate.
Interest on Policy loans accrues daily and becomes part of the Policy Debt as it
accrues. It
14 Detailed Description of Policy Features
<PAGE>
is due on each Policy Anniversary. If you do not pay it when it is due, the
interest is added to the loan. As part of the loan, it will bear interest at the
loan rate. We will treat capitalized interest the same as a new loan. We will
take an amount equal to the interest due from the Divisions and the GPA in
proportion to the non-loaned Account Value in each.
Repayment. You may repay all or part of any Policy Debt at any time while at
least one of the Insureds is living and while the Policy is in force. Any loan
repayment you make within 30 days of the Policy Anniversary date first pays
Policy loan interest due. We will allocate any other loan repayment to the GPA
until you have repaid all loan amounts that were deducted from the GPA. We will
allocate additional loan repayments based on the premium allocation. You must
clearly identify the payment as a loan repayment or we will consider the
payments premium payments.
We will deduct any outstanding Policy Debt from the proceeds payable at the
second death or the surrender of the Policy.
Interest on Loaned Value. We deposit an amount equal to the loaned amount in the
GPA. This amount earns interest at a rate equal to the greater of 3% and the
Policy loan rate less the Loan Interest Rate Expense Charge. We guarantee this
Charge will not exceed 2%. Currently, the Charge is 0.50% in Policy Years one
through 10 and 0.25% in Policy Years 11 and later.
Effect of Loan. A Policy loan affects the Policy since we reduce the Death
Benefit and Net Surrender Value by the amount of the loan. If you repay the
loan, we increase the Death Benefit and Net Surrender Value under the Policy by
the amount of the repayment. Taking a Policy loan could have adverse tax
consequences if your Policy is a "modified endowment contract" under current
federal tax law. Consult your tax advisor.
As long as a loan is outstanding, a portion of the Policy Account Value equal to
the loan is invested in the GPA. This amount does not participate in the
Separate Account investment performance.
Detailed Description of Policy Features 15
<PAGE>
III. Investment Options
The Guaranteed Principal Account
You may allocate some or all of the Net Premiums to the Guaranteed Principal
Account ("GPA"). An Owner also may transfer some or all of the Account Value in
the Divisions of the Separate Account to the GPA. Neither our General Account
nor the GPA is registered under federal or state securities laws.
Amounts allocated to the GPA become part of our General Account. Our General
Account consists of all assets owned by us other than those in the Separate
Account and in our other separate accounts. Subject to applicable law, we have
sole discretion over the investment of the assets of our General Account.
We guarantee amounts allocated to the GPA in excess of any Policy Debt (which
includes accrued interest) will accrue interest daily at an effective annual
rate at least equal to 3%. For amounts in the GPA equal to any Policy Debt, the
guaranteed minimum interest rate is an effective annual rate of 3% or, if
greater, the Policy loan rate less the Loan Interest Rate Expense Charge. This
charge will not be greater than 2% per year. This rate will be paid regardless
of the actual investment experience of the GPA. In addition to the guaranteed
minimum interest rate, we will declare a calendar year guaranteed minimum rate
each December for the upcoming calendar year. The rate we credit in any calendar
year will not be lower than this calendar year guaranteed minimum rate. Although
we are not obligated to credit interest at a rate higher than the guaranteed
minimum, we may declare a higher rate.
The Separate Account
Our Board of Directors established the Separate Account on February 2, 1995, as
a separate investment account of C.M. Life. The Board established the Separate
Account based on the laws of the State of Connecticut. The Separate Account is
registered with the Securities and Exchange Commission as a unit investment
trust under the provisions of the Investment Company Act of 1940. We have
established a segment within the Separate Account to receive and invest premium
payments for the Policies. We have since divided this segment into 13 Divisions.
Each Division invests in shares of a designated Fund of MML Trust, Oppenheimer
Trust, Variable Insurance Products Fund II (managed by Fidelity Management &
Research Company), T. Rowe Price Equity Series, Inc., or American Century
Variable Portfolios, Inc. We may establish additional divisions within the
Segment in the future.
We own the assets in the Separate Account. We are required to maintain
sufficient assets in the Separate Account to meet anticipated obligations of the
Policies funded by the Separate Account. We credit or charge the income, gains,
or losses, realized or unrealized, of the Separate Account against the assets
held in the Separate Account. We do not take any regard of the other income,
gains, or losses of C.M. Life. Assets in the Separate Account attributable to
the reserves and other liabilities under the Policies cannot be charged with
liabilities from any other business conducted by C.M. Life. We may transfer to
our General Account any assets that exceed anticipated obligations of the
Separate Account.
Some of the Funds offered are generally identical to, or are "clones" of, mutual
funds offered in the retail marketplace. These "clone" funds have the same
investment objectives, policies, and portfolio managers as the retail funds and
usually were formed after the retail funds. While the clone funds generally have
identical investment objectives, policies and portfolio managers, they are
separate and distinct from the retail funds. In fact, the performance of the
clone funds may be dramatically different from the performance of the retail
funds due to differences in the funds' sizes, dates shares of stock are
purchased and sold, cash flows and expenses. Thus, while the performance of the
retail funds may be informative, you should remember that such performance is
not the performance of the funds that support the Policy. It is not an
indication of future performance of the Policy funds.
16 Other Policy Information
<PAGE>
The Funds
The MML Trust, Oppenheimer Trust, Variable Insurance Products Fund II, T. Rowe
Price Equity Series, Inc., and American Century Variable Portfolios, Inc., are
open-end, management investment companies registered under the Investment
Company Act of 1940 ("1940 Act"). They all provide an investment vehicle for the
separate investment accounts of variable life and variable annuity contracts
offered by companies such as MassMutual. Shares of these organizations are not
offered to the general public.
The assets of certain variable annuity separate accounts offered by MassMutual,
an affiliate, or other life insurers are invested in shares of these funds.
Because these separate accounts are invested in the same underlying Funds, it is
possible conflicts could arise between Policy Owners and owners of the variable
annuity contracts.
The Boards of Trustees or Boards of Directors of the Funds will follow
procedures developed to determine whether conflicts have arisen. If a conflict
exists, the Boards will notify the Insurers and they will take appropriate
action to eliminate the conflicts.
We purchase the shares of each Fund for the Division at net asset value. All
dividends and capital gain distributions received from a Fund are automatically
reinvested in that Fund at net asset value, unless C.M. Life, on behalf of the
Separate Account, elects otherwise. We redeem shares of the Funds at their net
asset values as needed to make payments under the Policies.
MML Trust. The MML Trust, managed by MassMutual, was organized as a
Massachusetts business trust on December 19, 1984. Six of the diversified
investment portfolios of the Trust are available under this Policy.
Oppenheimer Trust. The Oppenheimer Trust is managed by OppenheimerFunds, Inc.
The Trust consists of 10 separate funds, four of which are offered under this
Policy.
Variable Insurance Products Fund II. Variable Insurance Products Fund II
("Fidelity VIP II"), managed by Fidelity Management & Research Company ("FMR"),
was organized as a Massachusetts business trust on March 21, 1988. One of its
investment portfolios, the VIP II Contrafund Portfolio, is available under this
Policy.
T. Rowe Price Equity Series, Inc. The T. Rowe Price Equity Series, Inc. was
incorporated in Maryland in 1994. Currently, it consists of four series, each
representing a separate class of shares having different objectives and
investment policies. One of the series, the Mid-Cap Growth Portfolio, is
available under this Policy.
American Century Variable Portfolios, Inc. American Century Variable Portfolios,
Inc. is part of American Century Investments, a family of funds that includes
nearly 70 no-load mutual funds covering a variety of investment opportunities.
One of the funds, VP Income & Growth, is offered under this Policy.
Fund Profiles
Following is a chart illustrating the risk profiles of the investment options
available under this Policy, and a summary of the investment objectives of each
fund. Please note there can be no assurance any fund will achieve its
objectives. More detailed information concerning these investment objectives and
the Funds is contained in the accompanying prospectuses, including information
on the risks associated with the investments, the investment techniques of each
of the funds, and the deduction of expenses applicable to each of the funds.
Investment Options 17
<PAGE>
INVESTMENT PREFERENCE CHART*
- --------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA
VIP II Contrafund Portfolio
Oppenheimer Aggressive Growth Fund/VA++
MML Small Cap Value Equity Fund
T. Rowe Price Mid-Cap Growth Portfolio
Oppenheimer Capital Appreciation Fund/VA+
MML Equity Index Fund
American Century VP Income & Growth
MML Equity Fund
MML Blend Fund
Oppenheimer Strategic Bond Fund/VA
MML Managed Bond Fund
MML Money Market Fund
Guaranteed Principal Account
- --------------------------------------------------------------------------------
Conservative Less Conservative Moderate Aggressive More Aggressive
Conservative: Investment goal is preservation of principal, while incurring
little risk.
Less Conservative: Investment goal is primarily preservation of principal, with
some desire for growth.
Moderate: Investment goal is growth, while seeking some preservation of
principal.
Aggressive: Investment goal is growth, with more tolerance for risk.
More Aggressive: Investment goal is significant growth over the long-term, with
greater tolerance for risk.
+The Oppenheimer Growth Division invests in the Oppenheimer Capital Appreciation
Fund/VA. Prior to May 1, 1999, the Oppenheimer Capital Appreciation Fund/VA was
called the Oppenheimer Growth Fund.
++The Oppenheimer Capital Appreciation Division invests in the Oppenheimer
Aggressive Growth Fund/VA. Prior to May 1, 1998, the Oppenheimer Aggressive
Growth Fund/VA was called the Oppenheimer Capital Appreciation Fund.
*This chart is provided by Massachusetts Mutual Life Insurance Company. It does
not necessarily reflect the opinion of the underlying fund managers.
MML Money Market Fund
MML Money Market Fund seeks to maximize current income, to preserve capital, and
to maintain liquidity by investing in money market instruments.
MML Managed Bond Fund
MML Managed Bond Fund seeks a high rate of return, consistent with capital
preservation, by investing primarily in investment grade, publicly-traded, fixed
income securities.
Oppenheimer Strategic Bond Fund/VA
Oppenheimer Strategic Bond Fund/VA is a mutual fund that seeks a high level of
current income principally derived from interest on debt securities and seeks to
enhance such income by writing covered call options on debt securities. The Fund
invests in three market sectors: debt securities of foreign government and
companies, U.S. Government securities, and lower-rated, high-yield securities of
U.S. companies.
MML Blend Fund
MML Blend Fund seeks a high total rate of return over time, consistent with
prudent investment risk and capital preservation, by investing in equity, fixed
income and money market securities.
Sub-adviser to the equity sector of the Fund is David L. Babson & Company, Inc.
MML Equity Fund
MML Equity Fund seeks to achieve a superior rate of return over time from both
capital appreciation and current income and to preserve capital by investing in
equity securities.
Sub-adviser to the Fund is David L. Babson & Company, Inc.
18 Investment Options
<PAGE>
American Century VP Income & Growth
American Century VP Income & Growth seeks long-term growth of capital as well as
current income. The Fund pursues a total return and dividend yield that exceed
those of the S&P 500 by investing in stocks of companies with strong dividend
growth potential.
MML Equity Index Fund
MML Equity Index Fund seeks investment results that correspond to the price and
yield performance of publicly traded common stocks in the aggregate, as
represented by the Standard & Poor's 500 Composite Stock Price Index. ("Standard
& Poor's 500" and "S&P 500(R)" are trademarks of The McGraw-Hill Companies, Inc.
and have been licensed for use by the Fund. The Fund is not sponsored, endorsed,
sold or promoted by Standard & Poor's, a division of The McGraw-Hill Companies
("S&P"), or The McGraw Hill Companies, Inc. Standard & Poor's makes no
representation regarding the advisability of investing in the Fund.)
Oppenheimer Capital Appreciation Fund/VA
Oppenheimer Capital Appreciation Fund/VA is a mutual fund that seeks long-term
capital appreciation by investing in securities of well-known established
companies. It invests mainly in equity securities. Prior to May 1, 1999, the
Oppenheimer Capital Appreciation Fund/VA was called the Oppenheimer Growth
Fund.
T. Rowe Price Mid-Cap Growth Portfolio
The T. Rowe Price Mid-Cap Growth Portfolio seeks to provide long-term capital
appreciation by investing in mid-cap stocks with potential for above-average
earnings growth. T. Rowe Price defines mid-cap companies as those with market
capitalizations within the range of companies in the S&P 400 Mid-Cap Index.
MML Small Cap Value Equity Fund
The MML Small Cap Value Equity Fund seeks long-term growth of capital and income
by investing primarily in small company stocks.
Oppenheimer Aggressive Growth Fund/VA
Oppenheimer Aggressive Growth Fund/VA is a mutual fund that seeks long-term
capital appreciation by investing in "growth-type" companies. Prior to May 1,
1998, the Fund was named Oppenheimer Capital Appreciation Fund.
VIP II Contrafund Portfolio
This Fund seeks long-term capital appreciation. It invests primarily in common
stocks. It also invests in the securities of companies whose value FMR believes
is not fully recognized by the public, in domestic and foreign issuers, and in
either "growth" stocks or "value" stocks or both.
Oppenheimer Global Securities Fund/VA
Oppenheimer Global Securities Fund/VA is a mutual fund that seeks long-term
capital appreciation by investing a substantial portion of assets in securities
of foreign issuers, "growth-type" companies, cyclical industries and special
situations, which are considered to have appreciation possibilities. It invests
in equity securities of U.S. and foreign issuers.
The Investment Advisers
MassMutual serves as investment manager of each of the MML Funds under
investment management agreements. David L. Babson & Company, Inc. ("Babson"),
which is a controlled subsidiary of MassMutual, is the investment sub-adviser to
MML Equity Fund and the Equity Sector of the MML Blend Fund. Babson also is the
sub-adviser to the MML Small Cap Value Equity Fund. Both MassMutual and Babson
are registered investment advisers under the Investment Advisers Act of 1940.
MassMutual entered into a sub-advisory agreement with Mellon Equity. Mellon
Equity manages the investment and reinvestment of the assets of the MML Equity
Index Fund.
OppenheimerFunds, Inc. ("OFI") is an investment adviser organized under the laws
of Colorado as a corporation; it was originally organized in 1959. It (including
a subsidiary) currently manages investment companies, including other
Oppenheimer funds, with assets of more than $95 billion as of December 31, 1998,
and with more than 4 million shareholder accounts. OFI is located at Two World
Trade
Investment Options 19
<PAGE>
Center, 34th Floor, New York, New York 10048-0203. OFI is owned by Oppenheimer
Acquisition Corporation, a holding company owned in part by senior management of
OFI and ultimately controlled by MassMutual. OFI serves as investment adviser to
the Oppenheimer Trust. OFI is registered as an investment adviser under the
Investment Advisers Act of 1940. OFI serves as Investment Adviser to the
Oppenheimer Funds.
Citibank N.A., with its home office located at 111 Wall Street, New York, NY
10005, acts as custodian for the MML Trust. Bank of New York, with its home
office at One Wall Street, New York, NY 10015, acts as custodian for the
Oppenheimer Trust.
MassMutual is also the investment adviser to MassMutual Corporate Investors and
MassMutual Participation Investors, closed-end investment companies, certain
wholly owned subsidiaries of MassMutual, and various employee benefit plans.
Fidelity Management & Research Company ("FMR") is the investment adviser to the
VIP II Contrafund Portfolio. FMR is the management arm of Fidelity
Investments(R), which was established in 1946. Fidelity Investments(R) has its
principal business address at 82 Devonshire Street, Boston, Massachusetts. FMR
handles the VIP II Contrafund business affairs and, with the assistance of
affiliates, chooses the Fund's investments. Fidelity Management & Research
(U.K.) Inc., in London, England, and Fidelity Management & Research (Far East),
Inc., serve as sub-advisers for the VIP II Contrafund Portfolio.
T. Rowe Price Associates, Inc. ("T. Rowe Price"), is the investment adviser to
the T. Rowe Price Mid-Cap Growth Portfolio. T. Rowe Price was founded in 1937.
The T. Rowe Price Equity Series, Inc. (the "Corporation"), was incorporated in
Maryland in 1994, and is a diversified, open-end investment company. The
Corporation is governed by a Board of Directors that meets regularly to review
the Fund's investments, performance, expenses, and other business affairs. The
policy of the Corporation is that a majority of Board members will be
independent of T. Rowe Price.
American Century Investment Management, Inc., is the investment adviser to the
American Century VP Income & Growth Fund. Under the laws of the state of
Maryland, the Board of Directors is responsible for managing the business and
affairs of the Fund. Acting under an investment management agreement entered
into with the Fund, American Century Investment Management, Inc., serves as the
manager of the Fund. Its principal place of business is American Century Tower,
4500 Main Street, Kansas City, Missouri. The manager has been providing
investment advisory services to investment companies and institutional investors
since it was founded in 1958.
20 Investment Options
<PAGE>
IV. Other Policy Information
When We Pay Proceeds
If the Policy has not terminated, we normally pay surrender, withdrawal, or loan
proceeds or the Death Benefit within seven days after we receive all required
documents in a form satisfactory to us at our Administrative Office.
We can delay payment of the Death Benefit, the Net Surrender Value, or any
Withdrawal or loan from the Separate Account during any period when:
(i) it is not reasonably practical to determine the amount because the New
York Stock Exchange is closed (other than customary week-end and holiday
closings); or
(ii) trading is restricted by the SEC; or
(iii) the SEC declares an emergency exists; or
(iv) the SEC, by order, permits us to delay payment in order to protect our
Owners.
We may delay paying any Net Surrender Value, any Withdrawal, or any loan
proceeds based on the GPA for up to six months from the date the request is
received at our Administrative Office.
We can delay payment of the entire Death Benefit if we contest the payment. We
investigate all death claims occurring within the two-year contestable period.
We may investigate death claims occurring beyond the two-year contestable
period. When we receive the information from a completed investigation, we
generally determine within five days whether we will authorize payment of the
claim. We make all payments promptly after authorization.
If we delay payment of a surrender or Withdrawal for 30 days or more, we add
interest to the date of payment at the same rate it is paid under the interest
payment option. We pay interest on the Death Benefit from the date of death to
the date of payment.
Payment Options
We will pay the Policy proceeds (the Death Benefit or the Net Surrender Value)
in cash. Or if you wish, we will pay all or part of these under one or more of
the following payment options. The minimum amount that can be applied under a
payment option is $5,000. If the periodic payment under any option is less than
$50, we reserve the right to make payments at less-frequent intervals. None of
these benefits depends on the performance of the Separate Account or the GPA.
For additional information concerning these options, see the Policy. The
following payment options are currently available.
- --------------------------------------------------------------------------------
Installments for a Equal monthly payments for any period selected, up
Specified Period to 30 years. The amount of each payment depends on
the total amount applied, the period selected, and
the monthly income rates we are using when the first
payment is due.
- --------------------------------------------------------------------------------
Life Income Equal monthly payments based on the life of a named
person. Payments will continue for the lifetime of
that person. You can elect income with or without a
minimum payment period.
- --------------------------------------------------------------------------------
Interest We will hold any amount applied under this option.
We will pay interest on the amount at an effective
annual rate determined by us. This rate will not be
less than 3%.
- --------------------------------------------------------------------------------
Installments of Specified Fixed amount payments. The total amount paid during
Amount the first year must be at least 6% of the total
amount applied. We will credit interest each month
on the unpaid balance and add this interest to the
unpaid balance This interest will be an effective
annual rate determined by us, but not less than 3%.
Payments continue until the balance we hold is
reduced to less than the agreed fixed amount. The
last payment will be for the balance only.
- --------------------------------------------------------------------------------
Investment Options 21
<PAGE>
- --------------------------------------------------------------------------------
Life Income with Equal monthly payments based on the life of a named
Payments Guaranteed person. We will make payments until the total amount
for Amount Applied paid equals the amount applied, whether the named
person lives until all payments have been made or
not. If the named person lives beyond the payment of
the total amount applied, we will continue to make
monthly payments as long as the named person lives.
- --------------------------------------------------------------------------------
Joint Lifetime Income Monthly payments based on the lives of two named
with Reduced Payments persons. We will make payments at the initial level
to Survivor while both are living, or for 10 years if longer.
When one dies (but not before the 10 years has
elapsed), we will reduce the payments by one-third.
Payments will continue at that level for the
lifetime of the other. After the 10 years has
elapsed, payments stop when both named persons have
died.
- --------------------------------------------------------------------------------
Withdrawal Rights Under Payment Options. If provided in the payment option
election, you may withdraw or apply under any other option all or part of the
unpaid balance under the Fixed Amount or Interest Payment Option. You may not
withdraw any part of the payments under the Specified Period Payment Option or
payments that are based on a named person's life.
Beneficiary
A Beneficiary is any person named on our records to receive insurance proceeds
at the second death. The Applicant names the Beneficiary in the application for
the Policy. You may name different classes of beneficiaries, such as primary and
secondary. These classes set the order of payment. There may be more than one
Beneficiary in a class.
You may change the Beneficiary during either Insured's lifetime by writing to
our Administrative Office. Generally, the change will take effect as of the date
of the request. If no Beneficiary is living at the second death, unless provided
otherwise, the Death Benefit is paid to you or, if deceased, to your estate.
Assignment
You may assign the Policy as collateral for a loan or other obligation. For any
assignment to be binding on C.M. Life, however, we must receive a signed copy of
it at our Administrative Office. We are not responsible for the validity of any
assignment.
Limits on Our Right to Challenge the Policy
Except for any Policy change or reinstatement requiring evidence of
insurability, we cannot contest the validity of the Policy with respect to any
material misrepresentation in the application:
. regarding the insurability of Insured No. 1, once the Policy has been in
force during the lifetime of Insured No. 1 for two years after the its
Issue Date; or
. regarding the insurability of Insured No. 2, once the Policy has been in
force during the lifetime of Insured No. 2 for two years after the Issue
Date.
For any Policy change or reinstatement requiring evidence the Insured(s) are
insurable, we cannot contest the validity of the change or reinstatement with
respect to each Insured after the change has been in effect for two years during
the lifetime of that Insured.
Error of Age or Gender
If either Insured's age or gender is misstated in the Policy application, we
will adjust the Death Benefit we pay under the Policy based on what the Policy
would provide based on the most recent Monthly Charge for the correct date of
birth and correct gender.
Suicide
Suicide within two years of the Policy Date is not covered by the Policy. If
either Insured dies by suicide, while sane or insane, within two years from the
Issue Date or Reinstatement Date, the
22 Other Policy Information
<PAGE>
Policy will terminate. We will refund the amount of all premiums paid, less any
Withdrawals and Policy Debt. If either Insured, while sane or insane, dies by
suicide within two years after the effective date of any increase in the Face
Amount, the increase will terminate and we will refund the Monthly Charges for
that increase. However, if a refund was payable as the result of suicide during
the first two years following the Issue Date or the Reinstatement Date of the
Policy, there is no additional refund for any Face Amount increase.
Additional Benefits You Can Get by Rider
You can obtain additional benefits if you request them and qualify for them. We
provide additional benefits by riders. Additional benefits are subject to the
terms of both the rider and the Policy. The cost of any rider is deducted as
part of the Monthly Charges. Subject to state availability, the following riders
are available.
Policy Split Option Rider. This rider allows you to exchange the Policy for two
new policies, one on the life of each Insured. Both Insureds must be living when
the exchange is made. We do not require evidence that the Insureds are
insurable. Each new Policy may be a fixed premium permanent life Policy or a
flexible premium adjustable life Policy. This right will be available for the
six-month period beginning on:
. The date six months after the effective date of a final court decree of
divorce. The decree must first become effective at least one year after the
Policy Issue Date, and it must remain in effect during the entire six-month
period after it first becomes effective.
. The date IRC Section 2056:
- is nullified;
- is amended to eliminate or reduce by at least 50% the Insureds'
federal estate tax marital deduction;
. The date the maximum federal estate tax rate given in IRC Section 2001 is
reduced to half the rate in effect on the Policy Issue Date of this Policy.
. The effective date of the dissolution of the corporation or partnership
that owns the Policy.
The new policies must meet the Policy requirements in effect at the time of the
exchange.
. The face amount of each new Policy will be one-half the Face Amount of this
Policy at the time of the split.
. The Policy Date of each new Policy will be the date of exchange.
. The issue age of each Insured will be the age of each Insured on the
birthday nearest the Policy Date of the new policies.
You may attach this rider to the Policy only at the time of Policy issue and
only if the younger Insured is younger than age 80, and the insurance risk class
of neither Insured is uninsurable.
There is no charge for this rider.
Estate Protection Rider. You may attach this rider to the Policy only at the
time the Policy is issued. It provides an additional Death Benefit during the
first four Policy Years if both Insureds die during this period. You select the
Face Amount of the rider. The minimum amount is $25,000 and the maximum amount
is 125% of the Initial Face Amount.
We will deduct a Monthly Charge from the Account Value for this rider. It will
equal the rider charge rate multiplied by the Face Amount of the rider, divided
by $1,000.
Sales and Other Agreements
MML Distributors, LLC ("MML Distributors"), 1414 Main Street, Springfield, MA
01144-1013, is the principal underwriter of the Policy. MML Investors Services,
Inc. ("MMLISI"), at the same address serves as the co-underwriter of the Policy.
Both MML Distributors and MMLISI are registered with the SEC as broker-dealers
and are members of the National Association of Securities Dealers, Inc. (the
"NASD").
MML Distributors may have selling agreements with other broker-dealers that are
registered with the SEC and are members of the NASD ("selling brokers"). We sell
the Policy through agents who are licensed by state insurance officials to sell
the Policy. These agents also are registered representatives of selling brokers
or of MMLISI.
Other Policy Information 23
<PAGE>
We intend to offer the Policy in all states except California and New York.
We also may contract with independent third party broker-dealers who may assist
us in finding broker-dealers to offer and sell the Policies. These third parties
also may provide training, marketing and other sales related functions for us
and other broker-dealers. And they may provide certain administrative services
to us in connection with the Policies.
MML Distributors does business under different variations of its name; including
the name MML Distributors, L.L.C. in the states of Illinois, Michigan, Oklahoma,
South Dakota and Washington; and the name MML Distributors, Limited Liability
Company in the states of Maine, Ohio and West Virginia.
Compensation
Both MML Distributors and MMLISI receive compensation for their activities as
underwriters of the Policy.
Agents who sell these Policies will receive commissions based on certain
commission schedules and rules. We pay some commissions as a percentage of the
premium paid in each Year of Coverage. These commissions distinguish between
premiums up to the Target Premium and premiums paid in excess of the Target
Premium. The Target Premium is based on the Issue Ages, genders, and risk
classifications of the Insureds. We also pay commissions as a percentage of the
average monthly Account Value in each Policy Year. The maximum commission
percentages are as follow.
Premium-based Commissions
- --------------------------------------------------------------------------------
Coverage Year 1 50% of premium paid up to the Target Premium
3% of premium paid over the Target Premium
Coverage Years 2-5 5% of premium paid up to the Target Premium
3% of premium paid over the Target Premium
Coverage Years 6-10 3% of all premium paid
Coverage Years 11 and beyond 1% of all premium paid
- --------------------------------------------------------------------------------
Asset-based Commissions
- --------------------------------------------------------------------------------
Policy Years 2 and beyond 0.15% of the average monthly Account Value in
each Policy Year
- --------------------------------------------------------------------------------
We may compensate agents who have financing agreements with general agents of
MassMutual differently. Agents who meet certain productivity and persistency
standards in selling C.M. Life and MassMutual policies are eligible for
additional compensation. General agents and district managers who are registered
representatives of MMLISI also may receive commission overrides, allowances and
other compensation.
We may pay independent, third-party broker-dealers who assist us in finding
broker-dealers to offer and sell the Policies compensation based on premium
payments for the Policies. In addition, some sales personnel may receive various
types of non-cash compensation as special sales incentives, including trips and
educational and/or business seminars.
While the compensation we pay to broker-dealers for sales of Policies may vary
with the sales agreement and level of production, the compensation generally is
expected to be comparable to the aggregate compensation we pay to agents and
general agents.
24 Other Policy Information
<PAGE>
V. Other Information
C.M. Life and MassMutual
C.M. Life is a stock life insurance company located at 140 Garden Street,
Hartford, CT 06154. A Special Act of the Connecticut General Assembly chartered
the company on April 25, 1980. C.M. Life is engaged principally 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 MassMutual. C.M. Life is licensed to transact variable life insurance
business in all states in the United States other than New York and California,
and in Puerto Rico and the District of Columbia.
MassMutual is a mutual life insurance company chartered in 1851 under the laws
of Massachusetts. Its Home Office is located in Springfield, Massachusetts.
MassMutual is licensed to transact life, accident, and health business in all
fifty states of the United States, the District of Columbia, Puerto Rico, and
certain provinces of Canada. As of December 31, 1998, MassMutual had
consolidated statutory assets in excess of $67 billion and estimated total
assets under management of $176.8 billion.
C.M. Life's Tax Status. C.M. Life is taxed as a life insurance company under
Subchapter L of the Internal Revenue Code of 1986 (the "Code"). The Segment and
the Separate Account are part of C.M. Life.
Due to C.M. Life's current tax status, we do not charge the Segment for C.M.
Life's federal income taxes that may be a result of activity of the Segment.
Periodically, C.M. Life reviews the question of a charge to the Segment for C.M.
Life's federal income taxes. In the future, we may impose a charge for any
federal income taxes paid by C.M. Life resulting from activity of the Segment.
Depending on the method of calculating interest on Policy values allocated to
the Guaranteed Principal Account, we may charge for the Policy's share of C.M.
Life's federal income taxes that are a result of activity of the GPA.
Under current laws, C.M. Life may have to pay state or local taxes (in addition
to premium taxes). At present, these taxes are not significant. C.M. Life
reserves the right to charge the Separate Account for such taxes, if any,
resulting from activity of the Separate Account.
Annual Reports
MassMutual or C.M. Life maintains the records and accounts relating to the
Separate Account, the Segment and the Divisions. Each year within the 30 days
following the Policy Anniversary, we will mail you a report showing:
(i) the Account Value at the beginning of the previous Policy Year,
(ii) all premiums paid since that time,
(iii) all additions to and deductions from the Account Value during the year,
and
(iv) the Account Value, Death Benefit, Net Surrender Value and Policy Debt as
of the last Policy Anniversary.
This report may contain additional information if required by any applicable law
or regulation.
Federal Income Tax Considerations
The information in this prospectus is general and is not an exhaustive
discussion of all tax questions that might arise under the Policy. It also is
not intended as tax advice. In addition, we do not profess to know the
likelihood the current federal income tax laws and Treasury Regulations or of
the current interpretations of the Internal Revenue Service will continue. We
cannot make any guarantee regarding the future tax treatment of any Policy. We
reserve the right to make changes in the Policy to assure that it continues to
qualify as life insurance for tax purposes.
For complete information on any tax issue, we urge you to consult a qualified
tax advisor. No attempt is made in this prospectus to consider any applicable
state or other tax laws.
Other Policy Information 25
<PAGE>
Policy Proceeds, Premiums and Loans. We believe the Policy meets the IRC
definition of life insurance. Therefore, the Death Benefit under the Policy
generally is excludible from the gross income of the Beneficiary under the IRC.
Decreases in Face Amount and Withdrawals may be taxable depending on the
circumstances. The IRC states that:
. if there is a reduction of future benefits during the first 15 years after
a Policy is issued and
. if there is a cash distribution as a result of the reduction,
you may be taxed on all or a part of the amount distributed.
If these conditions do not apply, a Withdrawal is taxable only to the extent it
exceeds your unrecovered premiums unless the Policy is a modified endowment
contract. After 15 years, cash distributions are not subject to federal income
tax, except to the extent they exceed the total amount of premiums paid and not
previously recovered.
If you surrender the Policy for its full Net Surrender Value, some of the Net
Surrender Value may be considered ordinary income for tax purposes. The
distribution is ordinary income to the extent the Account Value exceeds the
premiums (or any other amounts paid for the Policy) paid but not previously
recovered. In making this calculation, the Account Value considered is not
reduced by any outstanding Policy Debt but it is reduced by any Surrender
Charges.
A change of the Owner or the Insured(s) or an exchange or assignment of the
Policy may result in immediate taxable income.
We believe that under current law any loan received under the Policy will be
treated as Policy Debt of an Owner. The loan will not be considered income to
you unless the Policy has become a "modified endowment contract." If the Policy
is a modified endowment contract, loans will be fully taxable to the extent of
any income in the Policy and could be subject to an additional 10 percent tax.
Interest on Policy loans used for personal purposes generally is not
tax-deductible. However, you may deduct this interest if the loan proceeds are
used for "trade or business" or "investment" purposes if you meet certain tax
rules.
If the Owner is a business or corporation additional restrictions may apply. For
example, there are limits on interest deductions available for loans against a
business-owned Policy. The corporate alternative minimum tax may apply to any
gain in the Policy. This tax also may apply to a portion of the amount by which
Death Benefits received exceed the Policy's Net Surrender Value on the date of
death.
The impact of federal income taxes on values under this Policy and on the
benefit to you or your Beneficiary depends on C.M. Life's tax status and on the
tax status of the individual concerned. We currently do not make any charge
against the Separate Account for federal income taxes. We may make such a charge
eventually in order to recover the future federal income tax liability of the
Separate Account.
Federal estate and gift taxes, state and local estate taxes, and other taxes
depend on the circumstances of each Owner or Beneficiary.
Modified Endowment Contracts. If a Policy is a modified endowment contract
("MEC"), loans, partial withdrawals, and other amounts distributed under the
Policy are taxable to the extent of any accumulated income in the Policy. The
collateral assignment of a MEC is also treated as a taxable distribution. In
general, the amount subject to taxation is the excess of the Account Value (both
loaned and unloaned) over the previously unrecovered premiums paid. Death
benefits paid under a MEC, however, are not taxed any differently than death
benefits payable under other life insurance contracts.
A Policy is a MEC if it satisfies the definition of life insurance in the IRC
but fails the additional "7-pay test." A Policy fails this test if:
. the accumulated amount paid under the contract at any time during the first
seven contract years
exceeds
. the total premiums that would have been payable for a Policy providing
guaranteed benefits and requiring the payment of only seven level annual
premiums.
A Policy may pass the 7-pay test and still be taxed as a MEC if it is received
in exchange for a MEC.
26 Other Information
<PAGE>
If certain changes are made to a Policy we will re-test it to determine if it
has become a MEC. For example, if you reduce the death benefit during the first
seven contract years we will retest the Policy. If the test shows the Policy has
become a MEC, this classification change is effective retroactively to the
Policy Year in which the actual premiums paid exceed the new 7-pay limits.
We will retest whenever there is a "material change" to the Policy while it is
in force. If there is a material change a new 7-pay test period begins at that
time. The term "material change" includes any increases in death benefits.
Since the Policy provides for flexible premium payments, we have procedures for
determining whether increases in death benefits or additional premium payments
cause the start of a new seven-year test period or the taxation of distributions
and loans.
If any amount is taxable as a distribution of income under a MEC, it also will
be subject to a 10% penalty tax. There are a few exceptions to the additional
penalty tax for individual Owners. The penalty tax will not apply to
distributions:
(i) made on or after the date the taxpayer attains age 59 1/2; or
(ii) made because the taxpayer became disabled; or
(iii) made as part of a series of substantially equal periodic payments paid for
the life or life expectancy of the taxpayer. These payments must be made
at least annually.
Once a Policy fails the 7-pay test, loans and distributions in the year of
failure and in future years are subject to the rules for MECs. In addition,
loans and distributions received in anticipation of failing the 7-pay test are
defined as any loans and distributions made within two years prior to failing
the 7-pay test and are subject to taxation.
Under certain circumstances, a loan, collateral assignment, or other
distribution under a MEC may be taxable even though it exceeds the amount of
income accumulated in the Policy. For purposes of determining the amount of
income received from a MEC, the law considers the total of all income in all the
MECs issued within the same calendar year to the same Owner by an insurer and
its affiliates. Loans, collateral assignments, and distributions from any one
MEC are taxable to the extent of this total income.
Qualified Plans. The Policy may be used as part of certain tax-qualified and/or
ERISA employee benefit plans. Since the rules concerning the use of a Policy
with such plans are complex, you should not use the Policy in this way until you
have consulted a competent tax adviser. You may not use the Policy as part of an
Individual Retirement Account (IRA).
Your Voting Rights
You have the right to instruct us how to vote on questions submitted to the
shareholders of the funds supporting the Policy to the extent you have invested
in these Divisions.
Your right to instruct us is based on the number of shares of the Funds
attributable to your Policy. The Policy's number of shares of the Funds is
determined by dividing the Policy's Account Value held in each Division of the
Separate Account by $100. Fractional votes are counted.
You receive proxy material and a form to complete giving us voting instructions.
Shares of the Funds held by the Separate Account for which we do not receive
instructions are voted for or against any proposition in the same proportion as
the shares for which we do receive instructions.
Reservation of Rights
We reserve the right to take certain actions. Specifically, we reserve the right
to:
. Create new Divisions of the Separate Account;
. Create new Separate Accounts and new Segments;
. Combine any two or more Separate Accounts, Segments or Divisions;
. Make available additional or alternative Divisions of the Separate Account
investing in additional investment companies;
. Invest the assets of the Separate Account in securities other than shares
of the Funds. These securities can be substitutes for Fund
Other Information 27
<PAGE>
shares already purchased or they can apply only to future purchases.
. Operate the Separate Account as a management investment company under the
1940 Act or in any other form permitted by law;
. De-register the Separate Account under the 1940 Act in the event such
registration is no longer required;
. Substitute one or more Funds for other funds with similar investment
objectives;
. Delete Funds or close Funds to future investments; and
. Change the name of the Separate Account.
We have reserved all rights to the name C.M. Life Insurance Company or any part
of it. We may allow the Separate Account and other entities to use our name or
part of it, but we also may withdraw this right.
Service Agreement
In addition to acting as an investment manager for the funds underlying the
Divisions of the Separate Account, MassMutual performs certain investment and
administrative duties for C.M. Life. MassMutual does this according to a written
agreement. The agreement is renewed automatically each year, unless either party
terminates it. Under this agreement, we pay MassMutual for salary costs and
other services and an amount for indirect costs incurred through C.M. Life's use
of MassMutual's personnel and facilities.
Bonding Arrangement
An insurance company blanket bond is maintained providing $75,000,000 coverage
for officers and employees of MassMutual and C.M. Life (subject to a $350,000
deductible) and $75,000,000 for MassMutual's general agents and agents (also
subject to a $350,000 deductible).
Legal Proceedings
We are not currently involved in any legal proceedings that would have a
material impact on the Policy.
Year 2000
Like other businesses and governments around the world, C.M. Life could be
adversely affected if the computer systems used by the company and those with
which it does business do not properly recognize the year 2000. This is commonly
known as the "Year 2000 issue."
In 1996, C.M. Life's parent company, MassMutual, began an enterprise-wide
process of identifying, evaluating and implementing changes to computer systems
and applications software to address the Year 2000 issue on its own behalf and
on behalf of certain subsidiaries, including C.M. Life. MassMutual is addressing
the Year 2000 issue internally with modifications to existing programs and
conversions to new programs. MassMutual is also seeking assurances from vendors,
customers, service providers, governments and others with which MassMutual and
C.M. Life conduct business, to determine their Year 2000 readiness.
MassMutual has allocated a portion of the costs related to the Year 2000 issue
to C.M. Life. The costs are currently being expensed, and when measured against
net gain from operations before dividends, are not material to C.M. Life.
Experts
We have included the financial statements of C.M. Life, and the Survivorship
Variable Universal Life Segment of C.M. Life Variable Life Separate Account I,
in this prospectus in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
PricewaterhouseCoopers LLP's report on the statutory financial statements of
C.M. Life includes explanatory paragraphs relating to the use of statutory
accounting practices rather than generally accepted accounting principles.
Craig Waddington, FSA, MAAA, Vice President for MassMutual, has examined the
illustrations in Appendix D of this prospectus. We filed his opinion on the
illustrations as an exhibit to the registration statement filed with the SEC.
28 Other Information
<PAGE>
Appendix A
Definition of Terms
Account Value: The sum of the Variable Account Value and the Fixed Account Value
of the Policy.
Administrative Office: Our Administrative Office is located at 1295 State
Street, Springfield, Massachusetts 01111-0001.
Attained Age: The Issue Age of an Insured plus the number of completed Policy
Years.
Beneficiary(ies): The person or persons specified by you to receive some or all
of the Death Benefit at the second death.
Death Benefit: The amount paid following receipt of due proof of the death of
both Insureds. The amount is equal to the benefit provided by the Death Benefit
Option in effect on the date of the second death less any Policy Debt
outstanding and any due but unpaid premium needed to avoid Policy termination.
Death Benefit Option: The Policy offers three Death Benefit Options for
determination of the amount of the Death Benefit. The Death Benefit Option is
elected at time of application and, subject to certain requirements, may be
changed at a later date.
Expense Premium: An amount used to determine the Premium Expense Charges. For
the Initial Face Amount, the Expense Premium is based on the Issue Ages,
genders, and risk classifications of the Insureds. For each increase in Face
Amount, the Expense Premium is based on the ages, genders and risk
classifications of the Insureds on the effective date of the increase.
Fixed Account Value: The current Account Value that is allocated to the
Guaranteed Principal Account.
Good Order: Generally, in Good Order means that we have received everything we
need to process the transaction. For example, we may need certain forms
completed and signed before we can process a transaction. Likewise, we cannot
process certain financial transactions until we have received funds with proper
instructions and authorizations.
Guaranteed Principal Account ("GPA"): Part of our General Account, the GPA is a
fixed account to and from which you may make allocations and transfers.
Initial Face Amount: The amount of insurance coverage issued under the Policy.
Subject to certain limitations, you may change the Face Amount after issue.
Insureds: The two persons whose lives this Policy insures.
Issue Age: The age of an Insured at his or her birthday nearest the Policy Date.
Issue Date: The date on which the Policy is actually issued; it is also the date
the suicide and contestability periods begin.
Minimum Death Benefit: The Death Benefit determined in accordance with the
applicable Death Benefit Compliance Test. The applicable Test is either the Cash
Value Test or the Guideline Premium Test, as chosen at the time of application.
Monthly Charge Date: The monthly date on which the Monthly Charges for the
Policy are due. The first Monthly Charge Date is the Policy Date, and subsequent
Monthly Charge Dates are on the same day of each succeeding calendar month.
Monthly Charges: The charges assessed against the Policy Account Value each
month.
Net Premium: The premium payment we receive in Good Order, minus the Premium
Expense Charge.
Net Surrender Value: The amount payable to an Owner upon surrender of the
Policy. It is equal to the Account Value less any Surrender Charges that apply
and less any Policy Debt.
Appendix A 29
<PAGE>
Owner: The person or entity that owns the Policy.
Policy: The survivorship flexible premium adjustable variable life insurance
Policy offered by C.M. Life and described in this Prospectus.
Policy Anniversary Date: An anniversary of the Policy Date.
Policy Date: The date shown on the Policy that is the starting point for
determining Policy Anniversary Dates, Policy Years, and Monthly Charge Dates.
Policy Debt: All outstanding Policy loans plus accrued loan interest.
Policy Year: A twelve-month period commencing with the Policy Date or a Policy
Anniversary Date.
Second Death: The death of the surviving Insured.
Separate Account: The Policies' designated segment of the "C.M. Life Variable
Life Separate Account I" established by C.M. Life under the laws of Connecticut
and registered as a unit investment trust with the Securities and Exchange
Commission under 1940 Act. The Separate Account is used to receive and invest
Net Premiums for this Policy.
Target Premium: The level of premium payments used to determine commission
payments and Surrender Charges. The Target Premium is based on the Issue Ages,
genders, and risk classifications of the Insureds. It is usually not equal to
the Expense Premium.
Valuation Date: A date on which the net asset value of the shares of each
Division of the Separate Account is determined. Generally, this will be any date
on which the New York Stock Exchange (or its successor) is open for trading.
Variable Account Value: The total of the values of the accumulation units
credited to the Policy in each Division of the Separate Account multiplied by
your number of units in that Division.
We, us, our: Refer to C.M. Life.
Year of Coverage: For the Initial Face Amount, each Policy Year is a Year of
Coverage. For any increase in the Face Amount, each Year of Coverage is measured
from the effective date of the increase.
You, your: Refer to the Owner of the Policy.
30 Appendix A
<PAGE>
Appendix B
Examples of the Impact of the
Account Value and Premiums
on the Policy Death Benefit
Example I - Death Benefit Option 1
- --------------------------------------------------------------------------------
Assume the following:
- --------------------------------------------------------------------------------
. Face Amount is $1,000,000
. Account Value is $50,000
. Minimum Death Benefit is $219,000
. No Policy Debt
- --------------------------------------------------------------------------------
Based on these assumptions,
. the Death Benefit is $1,000,000.
If the Account Value increases to $80,000 and the Minimum Death Benefit
increases to $350,400,
. the Death Benefit remains at $1,000,000.
If the Account Value decreases to $30,000 and the Minimum Death Benefit
decreases to $131,400,
. the Death Benefit still remains at $1,000,000.
Example II - Death Benefit Option 2
- --------------------------------------------------------------------------------
Assume the following:
- --------------------------------------------------------------------------------
. Face Amount is $1,000,000
. Account Value is $50,000
. Minimum Death Benefit is $219,000
. No Policy Debt
Based on these assumptions,
. the Death Benefit is $1,050,000 (Face Amount plus Account Value).
If the Account Value increases to $80,000 and the Minimum Death Benefit
increases to $350,400,
. the Death Benefit will increase to $1,080,000.
If the Account Value decreases to $30,000 and the Minimum Death Benefit
decreases to $131,400,
. the Death Benefit will decrease to $1,030,000.
Example III - Death Benefit Option 3
- --------------------------------------------------------------------------------
Assume the following:
- --------------------------------------------------------------------------------
. Face Amount is $1,000,000
. Account Value is $50,000
. Minimum Death Benefit is $219,000
. No Policy Debt
. Premiums paid under the Policy to-date total $40,000
- --------------------------------------------------------------------------------
Based on these assumptions,
. the Death Benefit is $1,040,000 (Face Amount plus Premiums paid).
If you pay an additional $30,000 of premium and the Account Value increases to
$80,000 and the Minimum Death Benefit increases to $350,400,
. the Death Benefit will increase to $1,070,000.
Examples of Death Benefit Option Changes
Example I - Change from Option 2 to Option 1
- --------------------------------------------------------------------------------
For a change from Option 2 to Option 1, the Face Amount is increased by the
amount of the Account Value on the effective date of the change.
For example, if the Policy has a Face Amount of $500,000 and an Account
Value of $25,000, the Death Benefit under Option 2 is equal to the Face
Amount plus the Account Value, or $525,000. If you change from Option 2 to
Option 1, the Death Benefit under Option 1 is equal to the Policy Face
Amount. Since the Death Benefit under the Policy does not change as the
result of a Death Benefit Option change, the Face Amount will be increased
from $500,000 under Option 2 to $525,000 under Option 1 and the Death
Benefit after the change will remain at $525,000.
Appendix B 31
<PAGE>
Example II - Change from Option 3 to Option 1
- --------------------------------------------------------------------------------
For a change from Option 3 to Option 1, the Face Amount is increased by the
amount of the premiums paid to the effective date of the change.
For example, if a Policy has a Face Amount of $500,000, and premium
payments of $12,000 have been made to-date, the Death Benefit under Option
3 is equal to the Face Amount plus the premiums paid, or $512,000. If you
change from Option 3 to Option 1, the Death Benefit under Option 1 is equal
to the Face Amount. Since the Death Benefit under the Policy does not
change as the result of a Death Benefit Option change, the Face Amount will
be increased from $500,000 under Option 3 to $512,000 under Option 1 and
the Death Benefit after the change will remain at $512,000.
Example III- Change from Option 1 to Option 2
- --------------------------------------------------------------------------------
For a change from Option 1 to Option 2, the Face Amount will be decreased by the
amount of the Account Value on the effective date of the change.
For example, if the Policy has a Face Amount of $700,000 and an Account
Value of $25,000, under Option 1 the Death Benefit is equal to the Face
Amount, or $700,000. If you change from Option 1 to Option 2, the Death
Benefit under Option 2 is equal to the Face Amount plus the Account Value.
Since the Death Benefit does not change as the result of a Death Benefit
Option change, the Face Amount will be decreased by $25,000 to $675,000,
and the Death Benefit under Option 2 after the change will remain $700,000.
Example IV - Change from Option 1 to Option 3
- --------------------------------------------------------------------------------
For a change from Option 1 to Option 3, the Face Amount will be decreased by the
amount of the premiums paid to the effective date of the change.
For example, if the Policy has a Face Amount of $700,000 and premiums paid
to-date are $30,000, the Death Benefit under Option 1 is equal to the Face
Amount, or $700,000. If you change from Option 1 to Option 3, the Death
Benefit under Option 3 is equal to the Face Amount plus the premiums paid
to-date. Since the Death Benefit under the Policy does not change as the
result of a Death Benefit Option change, the Face Amount will be decreased
from $700,000 under Option 1 to $670,000 under Option 3 and the Death
Benefit after the change will remain at $700,000.
Example V - Change from Option 2 to Option 3, or from Option 3 to Option 2
- --------------------------------------------------------------------------------
For a change from Option 2 to Option 3 or from Option 3 to Option 2, the Face
Amount is changed (increased or decreased) by the difference between the Account
Value and the premiums paid to-date.
For example, if the Policy has a Face Amount of $1,000,000 and an Account
Value of $70,000 and premiums paid of $25,000, the Death Benefit under
Option 2 is equal to the Face Amount plus the Account Value, or $1,070,000.
If you change from Option 2 to Option 3, the Death Benefit under Option 3
is equal to the Face Amount plus the premiums paid to-date. Since the Death
Benefit under the Policy does not change as the result of a Death Benefit
Option change, the Face Amount will be increased by the difference between
the Account Value and the premiums paid, or $45,000, to $1,045,000 under
Option 3, maintaining a Death Benefit of $1,070,000.
A similar type of change would be made for a change from Option 3 to Option 2.
32 Appendix B
<PAGE>
Appendix C
Rates of Return
From time to time, we may report different types of historical performance for
the Divisions of the Separate Account available under the Policy. We may report
the average annual total returns of the funds over various time periods. These
returns will reflect deductions for investment management fees and fund expenses
and an annual deduction for the Mortality and Expense Risk Charge. The returns
do not reflect any Policy charges, which, if included, would reduce performance.
On request, we will provide an illustration of Account Values and Net Surrender
Values for hypothetical Insureds of given ages, genders, risk classifications,
premium levels and Initial Face Amounts. We will base the illustration either on
actual historic fund performance or on a hypothetical investment return. The
hypothetical return will be between 0% and 12%. The Net Surrender Value figures
will assume all fund charges, the Mortality and Expense Risk Charge, and all
other Policy charges are deducted. The Account Value figures will assume all
charges except the Surrender Charge are deducted.
We also may distribute sales literature comparing the Divisions of the Separate
Account to established market indices, such as the Standard & Poor's 500 Stock
Index and the Dow Jones Industrial Average. These comparisons may show the
percentage change in the net asset values of the funds or in the Accumulation
Unit Values. We also may make comparisons to the percentage change in values of
other mutual funds with investment objectives similar to those of the Divisions
of the Separate Account being compared.
Tables 1 and 2 show the Effective Annual Rates of Return and One Year Total
Returns, respectively, of the funds based on the actual investment performance
(after deduction of investment management fees and direct operating expenses)
underlying each Division of the Separate Account. Table 1 shows figures for
periods ended December 31, 1998, while Table 2 shows December 31 one- year total
returns for each year shown. These rates do not reflect :
. the Mortality and Expense Risk Charges assessed against the Separate
Account
. deductions from premiums or Monthly Charges assessed against the Account
Value of the Policies
. the Policy's Surrender Charges
Therefore, these rates are not illustrative of how actual investment performance
will affect the benefits under the Policy (see, however, Illustration of Death
Benefits, Net Surrender Values, and Accumulated Premiums, Appendix D). The rates
of return shown are not necessarily indicative of future performance. You may
consider these rates of return, however, in assessing the competence and
performance of the investment advisers.
Appendix C 33
<PAGE>
TABLE 1
EFFECTIVE ANNUAL RATES OF RETURN
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Since
Fund Inception 15 Years 10 Years 5 Years 1 Year
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MML Equity 14.84% 15.76% 16.39% 19.66% 16.20%
MML Managed Bond 10.24% 10.16% 9.19% 7.07% 8.14%
MML Blend 13.67% --- 13.70% 14.60% 13.56%
MML Money Market 6.66% 6.16% 5.41% 4.95% 5.16%
MML Equity Index 31.03% --- --- --- 28.22%
MML Small Cap Value Equity (23.88%) --- --- --- (23.88%)*
Oppenheimer Capital Appreciation+ 16.03% --- 16.85% 22.10% 24.00%
Oppenheimer Aggressive
Growth++ 15.07% --- 16.12% 13.06% 12.36%
Oppenheimer Global Securities 12.49% --- --- 9.67% 14.11%
Oppenheimer Strategic Bond 6.79% --- --- 6.83% 2.90%
VIP II Contrafund Portfolio 28.62% --- --- --- 29.98%
T. Rowe Price Mid-Cap Growth Portfolio 20.43% --- --- --- 22.08%
American Century VP Income & Growth 30.68% --- --- --- 26.87%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
The figures in this Table do not reflect any charges at the Separate Account or
Policy level.
+The Oppenheimer Growth Division invests in the Oppenheimer Capital Appreciation
Fund/VA. Prior to May 1, 1999, the Oppenheimer Capital Appreciation Fund/VA was
called the Oppenheimer Growth Fund.
++The Oppenheimer Capital Appreciation Division invests in the Oppenheimer
Aggressive Growth Fund/VA. Prior to May 1, 1998, the Oppenheimer Aggressive
Growth Fund/VA was called the Oppenheimer Capital Appreciation Fund.
*Since inception.
<TABLE>
<CAPTION>
Dates of inception:
<S> <C>
MML Equity Fund - 9/15/71 Oppenheimer Capital Appreciation Fund/VA - 4/3/85
MML Managed Bond Fund - 12/16/81 Oppenheimer Aggressive Growth Fund/VA - 8/15/86
MML Money Market Fund - 12/16/81 Oppenheimer Global Securities Fund/VA - 11/12/90
MML Blend Fund - 2/3/84 Oppenheimer Strategic Bond Fund/VA - 5/3/93
MML Equity Index Fund - 5/1/97 VIP II Contrafund Portfolio - 1/3/95
MML Small Cap Value Equity Fund - 6/1/98 T. Rowe Price Mid-Cap Growth Portfolio - 12/31/96
American Century VP Income & Growth - 10/30/97
</TABLE>
34 Appendix C
<PAGE>
TABLE 2
ONE YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MML MML MML Small
Year MML Managed Money MML Equity Cap Value
Ended Equity Bond MML Blend Market Index Equity
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1998 16.20% 8.14% 13.56% 5.16% 28.22% (23.88%)*
1997 28.59% 9.91% 20.89% 5.18% 21.93%* ---
1996 20.25% 3.25% 13.95% 5.01% --- ---
1995 31.13% 19.14% 23.28% 5.58% --- ---
1994 4.10% (3.76%) 2.48% 3.84% --- ---
1993 9.52% 11.81% 9.70% 2.75% --- ---
1992 10.48% 7.31% 9.36% 3.48% --- ---
1991 25.56% 16.66% 24.00% 6.01% --- ---
1990 (0.51%) 8.38% 2.37% 8.12% --- ---
1989 23.04% 12.83% 19.96% 9.16% --- ---
1988 16.68% 7.13% 13.40% 7.39% --- ---
1987 2.10% 2.60% 3.12% 6.49% --- ---
1986 20.15% 14.46% 18.30% 6.60% --- ---
1985 30.54% 19.94% 24.88% 8.03% --- ---
1984 5.40% 11.69% 8.24%* 10.39% --- ---
1983 22.85% 7.26% --- 8.97% --- ---
1982 25.67% 22.79%* --- 11.12%* --- ---
1981 6.67% --- --- --- --- ---
1980 27.62% --- --- --- --- ---
1979 19.54% --- --- --- --- ---
1978 3.71% --- --- --- --- ---
1977 (0.52%) --- --- --- --- ---
1976 24.77% --- --- --- --- ---
1975 32.85% --- --- --- --- ---
1974 (17.61%)** --- --- --- --- ---
- --------------------------------------------------------------------------------
</TABLE>
The figures in this Table do not reflect any charges at the Separate Account or
Policy level.
*Since inception.
**Performance for the MML Equity Fund prior to 1974 is not available
<TABLE>
<CAPTION>
Dates of inception:
<S> <C>
MML Equity Fund - 9/15/71 Oppenheimer Capital Appreciation Fund/VA - 4/3/85
MML Managed Bond Fund - 12/16/81 Oppenheimer Aggressive Growth Fund/VA - 8/15/86
MML Money Market Fund - 12/16/81 Oppenheimer Global Securities Fund/VA - 11/12/90
MML Blend Fund - 2/3/84 Oppenheimer Strategic Bond Fund/VA - 5/3/93
MML Equity Index Fund - 5/1/97 VIP II Contrafund Portfolio - 1/3/95
MML Small Cap Value Equity Fund - 6/1/98 T. Rowe Price Mid-Cap Growth Portfolio - 12/31/96
American Century VP Income & Growth - 10/30/97
</TABLE>
Appendix C 35
<PAGE>
TABLE 2 (continued)
ONE YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
American
Oppenheimer Oppenheimer Oppenheimer Oppenheimer T. Rowe Price Century
Year Capital Aggressive Global Strategic VIP II Mid Cap VP Income &
Ended Appreciation+ Growth++ Securities Bond Contrafund Growth Growth
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1998 24.00% 12.36% 14.11% 2.90% 29.98% 22.08% 26.87%
1997 26.69% 11.67% 22.42% 8.71% 24.14% 18.80%* 7.8%*
1996 25.20% 20.23% 17.80% 12.07% 21.22% -- --
1995 36.66% 32.52% 2.24% 15.33% 39.72%* -- --
1994 0.97% (7.59%) (5.72%) (3.78%) --- -- --
1993 7.25% 27.32% 70.32% 4.25%* --- -- --
1992 14.53% 15.42% (7.11%) --- --- -- --
1991 25.54% 54.72% 3.39% --- --- -- --
1990 (8.21%) (16.82%) 0.40%* --- --- -- ---
1989 23.59% 27.57% --- --- --- -- ---
1988 22.09% 13.41% --- --- --- -- ---
1987 3.31% 14.34% --- --- --- -- ---
1986 17.76% (1.65%)* --- --- --- -- ---
1985 9.50%* --- --- --- --- -- ---
1984 --- --- --- --- --- -- ---
1983 --- --- --- --- --- -- ---
1982 --- --- --- --- --- -- ---
1981 --- --- --- --- --- -- ---
1980 --- --- --- --- --- -- ---
1979 --- --- --- --- --- -- ---
1978 --- --- --- --- --- -- ---
1977 --- --- --- --- --- -- ---
1976 --- --- --- --- --- -- ---
1975 --- --- --- --- --- -- ---
1974 --- --- --- --- --- -- ---
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
The figures in this Table do not reflect any charges at the Separate
Account or Policy level.
+The Oppenheimer Growth Division invests in the Oppenheimer Capital Appreciation
Fund/VA. Prior to May 1, 1999, the Oppenheimer Capital Appreciation Fund/VA was
called the Oppenheimer Growth Fund.
++The Oppenheimer Capital Appreciation Division invests in the Oppenheimer
Aggressive Growth Fund/VA. Prior to May 1, 1998, the Oppenheimer Aggressive
Growth Fund/VA was called the Oppenheimer Capital Appreciation Fund.
*Since inception.
<TABLE>
<CAPTION>
Dates of inception:
<S> <C>
MML Equity Fund - 9/15/71 Oppenheimer Capital Appreciation Fund/VA - 4/3/85
MML Managed Bond Fund - 12/16/81 Oppenheimer Aggressive Growth Fund/VA - 8/15/86
MML Money Market Fund - 12/16/81 Oppenheimer Global Securities Fund/VA - 11/12/90
MML Blend Fund - 2/3/84 Oppenheimer Strategic Bond Fund/VA - 5/3/93
MML Equity Index Fund - 5/1/97 VIP II Contrafund Portfolio - 1/3/95
MML Small Cap Value Equity Fund - 6/1/98 T. Rowe Price Mid-Cap Growth Portfolio - 12/31/96
American Century VP Income & Growth - 10/30/97
</TABLE>
36 Appendix C
<PAGE>
Appendix D
Illustration of Death Benefits, Net Surrender Values, and Accumulated Premiums
The following tables illustrate the way in which a Policy operates. They show
how the Death Benefit and Net Surrender Value could vary over an extended period
of time assuming the funds experience hypothetical gross rates of investment
return (i.e., investment income and capital gains and losses, realized or
unrealized), equal to constant gross annual rates of 0%, 6%, and 12%. The tables
are based on annual premium payments of $5,000 for a combination of a Select
Preferred Male age 35 and a Select Preferred Female age 35. Select Preferred is
currently our best risk classification. Separate tables are shown for the
current and guaranteed schedules of charges. These tables will assist in the
comparison of Death Benefits and Net Surrender Values for the Policy with those
of other variable life policies.
The Death Benefits and Net Surrender Values for a Policy would be different from
the amounts shown if:
. the rates of return averaged 0%, 6%, and 12% over a period of years, but
varied above and below that average in individual Policy Years
. any Policy loan were made during the period of time illustrated
. the rates of return for all funds averaged 0%, 6%, and 12% but varied above
or below that average for particular funds.
The Death Benefits and Net Surrender Values shown in Tables 1, 2, 3, 7, 8, and 9
reflect the following current charges:
. Administrative Charges of $12 per month per Policy in Policy Years 1-10,
and $6 per month in Policy Years 11 and beyond.
. Face Amount Charges of $0.13 per month per $1,000 of Face Amount in
Coverage Years 1-10.
. Insurance Charges based on the current rates we are charging for Select
Preferred, fully underwritten risks.
. Mortality and Expense Risk Charges of 0.25% on an annual basis of the daily
net asset value of the Separate Account in all Policy Years.
. Fund level expenses of 0.59% on an annual basis of the net asset value of
the Separate Account. These expenses represent the unweighted average of
all fund expenses.
The Death Benefits and Net Surrender Values shown in Tables 4, 5, 6, 10, 11, and
12 reflect the following guaranteed maximum charges as well as the current fund
level expenses.
. Administrative Charges equal to $12 per month per Policy in all years.
. Face Amount Charge of $0.13 per month per $1,000 of Face Amount in Coverage
Years 1-10.
. Insurance Charges based on the Commissioners 1980 Standard Ordinary
Nonsmoker Mortality Table.
. Mortality and Expense Risk Charges equal to 0.90% on an annual basis of the
daily net asset value of the Separate Account in all years.
Net Surrender Values shown in the Tables reflect the deduction of Surrender
Charges in the first 10 Policy Years. The Surrender Charge in the first year is
the Target Premium or $60 per $1,000 of Face Amount if less. In each of Years
two through 10, the Surrender Charge is equal to the Surrender Charge in the
prior year reduced by 10% of the Surrender Charge in the first year.
Taking the current Mortality and Expense Risk Charge and the fund level expenses
into account, the gross rates of 0%, 6%, and 12% are (0.86%), 5.09%, and 11.04%,
respectively, on a net basis.
Appendix D 37
<PAGE>
TABLE 1
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 1 $1 million Initial Face Amount
Current Schedule of Charges Guideline Premium Test
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,000,000 $1,000,000 $1,000,000 $0 $0 $0
2 $10,763 $1,000,000 $1,000,000 $1,000,000 $1,102 $1,676 $2,277
3 $16,551 $1,000,000 $1,000,000 $1,000,000 $4,124 $5,242 $6,457
4 $22,628 $1,000,000 $1,000,000 $1,000,000 $7,122 $8,963 $11,046
5 $29,010 $1,000,000 $1,000,000 $1,000,000 $10,096 $12,848 $16,089
6 $35,710 $1,000,000 $1,000,000 $1,000,000 $13,046 $16,905 $21,637
7 $42,746 $1,000,000 $1,000,000 $1,000,000 $15,974 $21,145 $27,745
8 $50,133 $1,000,000 $1,000,000 $1,000,000 $18,878 $25,574 $34,474
9 $57,889 $1,000,000 $1,000,000 $1,000,000 $21,761 $30,207 $41,897
10 $66,034 $1,000,000 $1,000,000 $1,000,000 $24,623 $35,052 $50,089
15 $113,287 $1,000,000 $1,000,000 $1,000,000 $47,172 $73,175 $118,258
20 $173,596 $1,000,000 $1,000,000 $1,000,000 $68,164 $121,279 $232,392
25 $250,567 $1,000,000 $1,000,000 $1,000,000 $87,838 $182,503 $424,723
30 $348,804 $1,000,000 $1,000,000 $1,000,000 $105,494 $259,875 $748,976
35 $474,182 $1,000,000 $1,000,000 $1,503,372 $118,700 $355,966 $1,296,011
40 $634,199 $1,000,000 $1,000,000 $2,372,748 $123,302 $473,822 $2,217,521
45 $838,426 $1,000,000 $1,000,000 $3,958,306 $107,753 $615,740 $3,769,815
50 $1,099,077 $1,000,000 $1,000,000 $6,688,119 $43,789 $787,259 $6,369,637
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
1 $2,615 $2,820 $3,025
2 $5,206 $5,780 $6,381
3 $7,772 $8,890 $10,105
4 $10,314 $12,155 $14,238
5 $12,832 $15,584 $18,825
6 $15,326 $19,185 $23,917
7 $17,798 $22,969 $29,569
8 $20,246 $26,942 $35,842
9 $22,673 $31,119 $42,809
10 $25,079 $35,508 $50,545
15 $47,172 $73,175 $118,258
--------------------------------------------------------------
- --------------------------------------------------------------------------------
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
38 Appendix D
<PAGE>
TABLE 2
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 2 $1 million Initial Face Amount
Current Schedule of Charges Guideline Premium Test
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,002,615 $1,002,820 $1,003,025 $0 $0 $0
2 $10,763 $1,005,206 $1,005,780 $1,006,381 $1,102 $1,676 $2,277
3 $16,551 $1,007,772 $1,008,890 $1,010,105 $4,124 $5,242 $6,457
4 $22,628 $1,010,314 $1,012,155 $1,014,238 $7,122 $8,963 $11,046
5 $29,010 $1,012,832 $1,015,583 $1,018,825 $10,096 $12,847 $16,089
6 $35,710 $1,015,326 $1,019,184 $1,023,916 $13,046 $16,904 $21,636
7 $42,746 $1,017,797 $1,022,967 $1,029,567 $15,973 $21,143 $27,743
8 $50,133 $1,020,244 $1,026,941 $1,035,840 $18,876 $25,573 $34,472
9 $57,889 $1,022,671 $1,031,116 $1,042,806 $21,759 $30,204 $41,894
10 $66,034 $1,025,077 $1,035,505 $1,050,540 $24,621 $35,049 $50,084
15 $113,287 $1,047,165 $1,073,162 $1,118,235 $47,165 $73,162 $118,235
20 $173,596 $1,068,137 $1,121,224 $1,232,279 $68,137 $121,224 $232,279
25 $250,567 $1,087,746 $1,182,291 $1,424,191 $87,746 $182,291 $424,191
30 $348,804 $1,105,189 $1,259,051 $1,746,457 $105,189 $259,051 $746,457
35 $474,182 $1,117,667 $1,352,635 $2,285,046 $117,667 $352,635 $1,285,046
40 $634,199 $1,120,359 $1,462,058 $3,182,354 $120,359 $462,058 $2,182,354
45 $838,426 $1,100,363 $1,576,661 $4,668,238 $100,363 $576,661 $3,668,238
50 $1,099,077 $1,029,484 $1,664,568 $7,110,319 $29,484 $664,568 $6,110,319
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
1 $2,615 $2,820 $3,025
2 $5,206 $5,780 $6,381
3 $7,772 $8,890 $10,105
4 $10,314 $12,155 $14,238
5 $12,832 $15,583 $18,825
6 $15,326 $19,184 $23,916
7 $17,797 $22,967 $29,567
8 $20,244 $26,941 $35,840
9 $22,671 $31,116 $42,806
10 $25,077 $35,505 $50,540
15 $47,165 $73,162 $118,235
--------------------------------------------------------------
- --------------------------------------------------------------------------------
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
Appendix D 39
<PAGE>
TABLE 3
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 3 $1 million Initial Face Amount
Current Schedule of Charges Guideline Premium Test
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,005,000 $1,005,000 $1,005,000 $0 $0 $0
2 $10,763 $1,010,000 $1,010,000 $1,010,000 $1,102 $1,676 $2,277
3 $16,551 $1,015,000 $1,015,000 $1,015,000 $4,124 $5,242 $6,457
4 $22,628 $1,020,000 $1,020,000 $1,020,000 $7,122 $8,963 $11,046
5 $29,010 $1,025,000 $1,025,000 $1,025,000 $10,096 $12,847 $16,089
6 $35,710 $1,030,000 $1,030,000 $1,030,000 $13,045 $16,904 $21,636
7 $42,746 $1,035,000 $1,035,000 $1,035,000 $15,972 $21,143 $27,743
8 $50,133 $1,040,000 $1,040,000 $1,040,000 $18,876 $25,572 $34,472
9 $57,889 $1,045,000 $1,045,000 $1,045,000 $21,758 $30,203 $41,894
10 $66,034 $1,050,000 $1,050,000 $1,050,000 $24,620 $35,048 $50,084
15 $113,287 $1,075,000 $1,075,000 $1,075,000 $47,159 $73,159 $118,238
20 $173,596 $1,100,000 $1,100,000 $1,100,000 $68,122 $121,224 $232,320
25 $250,567 $1,125,000 $1,125,000 $1,125,000 $87,703 $182,327 $424,481
30 $348,804 $1,150,000 $1,150,000 $1,150,000 $105,059 $259,303 $748,174
35 $474,182 $1,175,000 $1,175,000 $1,501,323 $117,212 $354,015 $1,294,244
40 $634,199 $1,200,000 $1,200,000 $2,369,562 $118,830 $467,845 $2,214,544
45 $838,426 $1,225,000 $1,225,000 $3,953,038 $94,853 $598,172 $3,764,798
50 $1,099,077 $1,250,000 $1,250,000 $6,679,265 $7,516 $736,644 $6,361,204
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
1 $2,615 $2,820 $3,025
2 $5,206 $5,780 $6,381
3 $7,772 $8,890 $10,105
4 $10,314 $12,155 $14,238
5 $12,832 $15,583 $18,825
6 $15,325 $19,184 $23,916
7 $17,796 $22,967 $29,567
8 $20,244 $26,940 $35,840
9 $22,670 $31,115 $42,806
10 $25,076 $35,504 $50,540
15 $47,159 $73,159 $118,238
--------------------------------------------------------------
- --------------------------------------------------------------------------------
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
40 Appendix D
<PAGE>
TABLE 4
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 1 $1 million Initial Face Amount
Guaranteed Schedule of Mortality and Expense Charges and Guideline Premium Test
Current Fund Level Charges
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,000,000 $1,000,000 $1,000,000 $0 $0 $0
2 $10,763 $1,000,000 $1,000,000 $1,000,000 $1,037 $1,605 $2,198
3 $16,551 $1,000,000 $1,000,000 $1,000,000 $3,997 $5,096 $6,291
4 $22,628 $1,000,000 $1,000,000 $1,000,000 $6,913 $8,714 $10,753
5 $29,010 $1,000,000 $1,000,000 $1,000,000 $9,782 $12,462 $15,618
6 $35,710 $1,000,000 $1,000,000 $1,000,000 $12,605 $16,345 $20,927
7 $42,746 $1,000,000 $1,000,000 $1,000,000 $15,378 $20,364 $26,723
8 $50,133 $1,000,000 $1,000,000 $1,000,000 $18,101 $24,525 $33,054
9 $57,889 $1,000,000 $1,000,000 $1,000,000 $20,771 $28,830 $39,973
10 $66,034 $1,000,000 $1,000,000 $1,000,000 $23,387 $33,284 $47,536
15 $113,287 $1,000,000 $1,000,000 $1,000,000 $41,212 $64,757 $105,765
20 $173,596 $1,000,000 $1,000,000 $1,000,000 $55,879 $101,697 $198,612
25 $250,567 $1,000,000 $1,000,000 $1,000,000 $66,171 $144,101 $347,393
30 $348,804 $1,000,000 $1,000,000 $1,000,000 $68,337 $189,519 $586,604
35 $474,182 $1,000,000 $1,000,000 $1,133,210 $52,169 $229,293 $976,905
40 $634,199 $1,000,000 $1,000,000 $1,725,499 $0 $243,077 $1,612,616
45 $838,426 $1,000,000 $1,000,000 $2,774,042 $0 $171,224 $2,641,945
50 $1,099,077 $1,000,000 $1,000,000 $4,484,995 $0 $0 $4,271,424
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
<S> <C> <C> <C>
1 $2,592 $2,795 $2,999
2 $5,141 $5,709 $6,302
3 $7,645 $8,744 $9,939
4 $10,105 $11,906 $13,945
5 $12,518 $15,198 $18,354
6 $14,885 $18,625 $23,207
7 $17,202 $22,188 $28,547
8 $19,469 $25,893 $34,422
9 $21,683 $29,742 $40,885
10 $23,843 $33,740 $47,992
15 $41,212 $64,757 $105,765
--------------------------------------------------------------
</TABLE>
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
Appendix D 41
<PAGE>
TABLE 5
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 2 $1 million Initial Face Amount
Guaranteed Schedule of Mortality and Expense Charges and Guideline Premium Test
Current Fund Level Charges
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,002,592 $1,002,795 $1,002,999 $0 $0 $0
2 $10,763 $1,005,141 $1,005,709 $1,006,302 $1,037 $1,605 $2,198
3 $16,551 $1,007,645 $1,008,744 $1,009,939 $3,997 $5,096 $6,291
4 $22,628 $1,010,104 $1,011,905 $1,013,944 $6,912 $8,713 $10,752
5 $29,010 $1,012,517 $1,015,197 $1,018,352 $9,781 $12,461 $15,616
6 $35,710 $1,014,883 $1,018,623 $1,023,205 $12,603 $16,343 $20,925
7 $42,746 $1,017,200 $1,022,185 $1,028,543 $15,376 $20,361 $26,719
8 $50,133 $1,019,465 $1,025,887 $1,034,415 $18,097 $24,519 $33,047
9 $57,889 $1,021,678 $1,029,734 $1,040,873 $20,766 $28,822 $39,961
10 $66,034 $1,023,834 $1,033,727 $1,047,973 $23,378 $33,271 $47,517
15 $113,287 $1,041,166 $1,064,679 $1,105,629 $41,166 $64,679 $105,629
20 $173,596 $1,055,702 $1,101,345 $1,197,879 $55,702 $101,345 $197,879
25 $250,567 $1,065,611 $1,142,778 $1,344,021 $65,611 $142,778 $344,021
30 $348,804 $1,066,817 $1,185,122 $1,572,584 $66,817 $185,122 $572,584
35 $474,182 $1,048,631 $1,215,666 $1,921,144 $48,631 $215,666 $921,144
40 $634,199 $1,000,000 $1,205,135 $2,435,939 $0 $205,135 $1,435,939
45 $838,426 $1,000,000 $1,081,007 $3,151,296 $0 $81,007 $2,151,296
50 $1,099,077 $1,000,000 $1,000,000 $4,081,957 $0 $0 $3,081,957
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
<S> <C> <C> <C>
1 $2,592 $2,795 $2,999
2 $5,141 $5,709 $6,302
3 $7,645 $8,744 $9,939
4 $10,104 $11,905 $13,944
5 $12,517 $15,197 $18,352
6 $14,883 $18,623 $23,205
7 $17,200 $22,185 $28,543
8 $19,465 $25,887 $34,415
9 $21,678 $29,734 $40,873
10 $23,834 $33,727 $47,973
15 $41,166 $64,679 $105,629
--------------------------------------------------------------
</TABLE>
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
42 Appendix D
<PAGE>
TABLE 6
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 3 $1 million Initial Face Amount
Guaranteed Schedule of Mortality and Expense Charges and Guideline Premium Test
Current Fund Level Charges
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,005,000 $1,005,000 $1,005,000 $0 $0 $0
2 $10,763 $1,010,000 $1,010,000 $1,010,000 $1,037 $1,605 $2,198
3 $16,551 $1,015,000 $1,015,000 $1,015,000 $3,997 $5,096 $6,291
4 $22,628 $1,020,000 $1,020,000 $1,020,000 $6,912 $8,713 $10,752
5 $29,010 $1,025,000 $1,025,000 $1,025,000 $9,781 $12,460 $15,616
6 $35,710 $1,030,000 $1,030,000 $1,030,000 $12,602 $16,342 $20,924
7 $42,746 $1,035,000 $1,035,000 $1,035,000 $15,374 $20,359 $26,718
8 $50,133 $1,040,000 $1,040,000 $1,040,000 $18,094 $24,516 $33,045
9 $57,889 $1,045,000 $1,045,000 $1,045,000 $20,760 $28,817 $39,958
10 $66,034 $1,050,000 $1,050,000 $1,050,000 $23,370 $33,264 $47,514
15 $113,287 $1,075,000 $1,075,000 $1,075,000 $41,126 $64,654 $105,640
20 $173,596 $1,100,000 $1,100,000 $1,100,000 $55,562 $101,300 $198,104
25 $250,567 $1,125,000 $1,125,000 $1,125,000 $65,155 $142,789 $345,629
30 $348,804 $1,150,000 $1,150,000 $1,150,000 $65,361 $185,575 $581,082
35 $474,182 $1,175,000 $1,175,000 $1,175,000 $43,641 $217,779 $961,013
40 $634,199 $1,000,000 $1,200,000 $1,697,450 $0 $210,388 $1,586,402
45 $838,426 $1,000,000 $1,225,000 $2,729,433 $0 $75,899 $2,599,460
50 $1,099,077 $1,000,000 $1,000,000 $4,413,348 $0 $0 $4,203,189
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
<S> <C> <C> <C>
1 $2,592 $2,795 $2,999
2 $5,141 $5,709 $6,302
3 $7,645 $8,744 $9,939
4 $10,104 $11,905 $13,944
5 $12,517 $15,196 $18,352
6 $14,882 $18,622 $23,204
7 $17,198 $22,183 $28,542
8 $19,462 $25,884 $34,413
9 $21,672 $29,729 $40,870
10 $23,826 $33,720 $47,970
15 $41,126 $64,654 $105,640
--------------------------------------------------------------
</TABLE>
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
Appendix D 43
<PAGE>
TABLE 7
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 1 $1 million Initial Face Amount
Current Schedule of Charges Cash Value Test
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,000,000 $1,000,000 $1,000,000 $0 $0 $0
2 $10,763 $1,000,000 $1,000,000 $1,000,000 $1,102 $1,676 $2,277
3 $16,551 $1,000,000 $1,000,000 $1,000,000 $4,124 $5,242 $6,457
4 $22,628 $1,000,000 $1,000,000 $1,000,000 $7,122 $8,963 $11,046
5 $29,010 $1,000,000 $1,000,000 $1,000,000 $10,096 $12,848 $16,089
6 $35,710 $1,000,000 $1,000,000 $1,000,000 $13,046 $16,905 $21,637
7 $42,746 $1,000,000 $1,000,000 $1,000,000 $15,974 $21,145 $27,745
8 $50,133 $1,000,000 $1,000,000 $1,000,000 $18,878 $25,574 $34,474
9 $57,889 $1,000,000 $1,000,000 $1,000,000 $21,761 $30,207 $41,897
10 $66,034 $1,000,000 $1,000,000 $1,000,000 $24,623 $35,052 $50,089
15 $113,287 $1,000,000 $1,000,000 $1,000,000 $47,172 $73,175 $118,258
20 $173,596 $1,000,000 $1,000,000 $1,000,000 $68,164 $121,279 $232,392
25 $250,567 $1,000,000 $1,000,000 $1,108,496 $87,838 $182,503 $424,711
30 $348,804 $1,000,000 $1,000,000 $1,638,070 $105,494 $259,875 $747,977
35 $474,182 $1,000,000 $1,000,000 $2,382,680 $118,700 $355,966 $1,287,935
40 $634,199 $1,000,000 $1,000,000 $3,473,015 $123,302 $473,822 $2,184,286
45 $838,426 $1,000,000 $1,000,000 $5,118,051 $107,753 $615,740 $3,655,751
50 $1,099,077 $1,000,000 $1,000,000 $7,662,758 $43,789 $787,259 $6,033,667
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
<S> <C> <C> <C>
1 $2,615 $2,820 $3,025
2 $5,206 $5,780 $6,381
3 $7,772 $8,890 $10,105
4 $10,314 $12,155 $14,238
5 $12,832 $15,584 $18,825
6 $15,326 $19,185 $23,917
7 $17,798 $22,969 $29,569
8 $20,246 $26,942 $35,842
9 $22,673 $31,119 $42,809
10 $25,079 $35,508 $50,545
15 $47,172 $73,175 $118,258
--------------------------------------------------------------
</TABLE>
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
44 Appendix D
<PAGE>
TABLE 8
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 2 $1 million Initial Face Amount
Current Schedule of Charges Cash Value Test
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,002,615 $1,002,820 $1,003,025 $0 $0 $0
2 $10,763 $1,005,206 $1,005,780 $1,006,381 $1,102 $1,676 $2,277
3 $16,551 $1,007,772 $1,008,890 $1,010,105 $4,124 $5,242 $6,457
4 $22,628 $1,010,314 $1,012,155 $1,014,238 $7,122 $8,963 $11,046
5 $29,010 $1,012,832 $1,015,583 $1,018,825 $10,096 $12,847 $16,089
6 $35,710 $1,015,326 $1,019,184 $1,023,916 $13,046 $16,904 $21,636
7 $42,746 $1,017,797 $1,022,967 $1,029,567 $15,973 $21,143 $27,743
8 $50,133 $1,020,244 $1,026,941 $1,035,840 $18,876 $25,573 $34,472
9 $57,889 $1,022,671 $1,031,116 $1,042,806 $21,759 $30,204 $41,894
10 $66,034 $1,025,077 $1,035,505 $1,050,540 $24,621 $35,049 $50,084
15 $113,287 $1,047,165 $1,073,162 $1,118,235 $47,165 $73,162 $118,235
20 $173,596 $1,068,137 $1,121,224 $1,232,279 $68,137 $121,224 $232,279
25 $250,567 $1,087,746 $1,182,291 $1,424,191 $87,746 $182,291 $424,191
30 $348,804 $1,105,189 $1,259,051 $1,746,457 $105,189 $259,051 $746,457
35 $474,182 $1,117,667 $1,352,635 $2,377,182 $117,667 $352,635 $1,284,963
40 $634,199 $1,120,359 $1,462,058 $3,465,122 $120,359 $462,058 $2,179,322
45 $838,426 $1,100,363 $1,576,661 $5,106,523 $100,363 $576,661 $3,647,516
50 $1,099,077 $1,029,484 $1,664,568 $7,645,590 $29,484 $664,568 $6,020,150
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
<S> <C> <C> <C>
1 $2,615 $2,820 $3,025
2 $5,206 $5,780 $6,381
3 $7,772 $8,890 $10,105
4 $10,314 $12,155 $14,238
5 $12,832 $15,583 $18,825
6 $15,326 $19,184 $23,916
7 $17,797 $22,967 $29,567
8 $20,244 $26,941 $35,840
9 $22,671 $31,116 $42,806
10 $25,077 $35,505 $50,540
15 $47,165 $73,162 $118,235
--------------------------------------------------------------
</TABLE>
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
Appendix D 45
<PAGE>
TABLE 9
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 3 $1 million Initial Face Amount
Current Schedule of Charges Cash Value Test
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,005,000 $1,005,000 $1,005,000 $0 $0 $0
2 $10,763 $1,010,000 $1,010,000 $1,010,000 $1,102 $1,676 $2,277
3 $16,551 $1,015,000 $1,015,000 $1,015,000 $4,124 $5,242 $6,457
4 $22,628 $1,020,000 $1,020,000 $1,020,000 $7,122 $8,963 $11,046
5 $29,010 $1,025,000 $1,025,000 $1,025,000 $10,096 $12,847 $16,089
6 $35,710 $1,030,000 $1,030,000 $1,030,000 $13,045 $16,904 $21,636
7 $42,746 $1,035,000 $1,035,000 $1,035,000 $15,972 $21,143 $27,743
8 $50,133 $1,040,000 $1,040,000 $1,040,000 $18,876 $25,572 $34,472
9 $57,889 $1,045,000 $1,045,000 $1,045,000 $21,758 $30,203 $41,894
10 $66,034 $1,050,000 $1,050,000 $1,050,000 $24,620 $35,048 $50,084
15 $113,287 $1,075,000 $1,075,000 $1,075,000 $47,159 $73,159 $118,238
20 $173,596 $1,100,000 $1,100,000 $1,100,000 $68,122 $121,224 $232,320
25 $250,567 $1,125,000 $1,125,000 $1,125,000 $87,703 $182,327 $424,481
30 $348,804 $1,150,000 $1,150,000 $1,637,208 $105,059 $259,303 $747,584
35 $474,182 $1,175,000 $1,175,000 $2,381,460 $117,212 $354,015 $1,287,276
40 $634,199 $1,200,000 $1,200,000 $3,471,263 $118,830 $467,845 $2,183,184
45 $838,426 $1,225,000 $1,225,000 $5,115,492 $94,853 $598,172 $3,653,923
50 $1,099,077 $1,250,000 $1,250,000 $7,658,947 $7,516 $736,644 $6,030,667
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
<S> <C> <C> <C>
1 $2,615 $2,820 $3,025
2 $5,206 $5,780 $6,381
3 $7,772 $8,890 $10,105
4 $10,314 $12,155 $14,238
5 $12,832 $15,583 $18,825
6 $15,325 $19,184 $23,916
7 $17,796 $22,967 $29,567
8 $20,244 $26,940 $35,840
9 $22,670 $31,115 $42,806
10 $25,076 $35,504 $50,540
15 $47,159 $73,159 $118,238
--------------------------------------------------------------
</TABLE>
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
46 Appendix D
<PAGE>
TABLE 10
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 1 $1 million Initial Face Amount
Guaranteed Schedule of Mortality and Expense Charges and Cash Value Test
Current Fund Level Charges
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,000,000 $1,000,000 $1,000,000 $0 $0 $0
2 $10,763 $1,000,000 $1,000,000 $1,000,000 $1,037 $1,605 $2,198
3 $16,551 $1,000,000 $1,000,000 $1,000,000 $3,997 $5,096 $6,291
4 $22,628 $1,000,000 $1,000,000 $1,000,000 $6,913 $8,714 $10,753
5 $29,010 $1,000,000 $1,000,000 $1,000,000 $9,782 $12,462 $15,618
6 $35,710 $1,000,000 $1,000,000 $1,000,000 $12,605 $16,345 $20,927
7 $42,746 $1,000,000 $1,000,000 $1,000,000 $15,378 $20,364 $26,723
8 $50,133 $1,000,000 $1,000,000 $1,000,000 $18,101 $24,525 $33,054
9 $57,889 $1,000,000 $1,000,000 $1,000,000 $20,771 $28,830 $39,973
10 $66,034 $1,000,000 $1,000,000 $1,000,000 $23,387 $33,284 $47,536
15 $113,287 $1,000,000 $1,000,000 $1,000,000 $41,212 $64,757 $105,765
20 $173,596 $1,000,000 $1,000,000 $1,000,000 $55,879 $101,697 $198,612
25 $250,567 $1,000,000 $1,000,000 $1,000,000 $66,171 $144,101 $347,393
30 $348,804 $1,000,000 $1,000,000 $1,280,903 $68,337 $189,519 $584,887
35 $474,182 $1,000,000 $1,000,000 $1,763,008 $52,169 $229,293 $952,977
40 $634,199 $1,000,000 $1,000,000 $2,394,441 $0 $243,077 $1,505,937
45 $838,426 $1,000,000 $1,000,000 $3,214,166 $0 $171,224 $2,295,833
50 $1,099,077 $1,000,000 $1,000,000 $4,288,680 $0 $0 $3,376,913
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
<S> <C> <C> <C>
1 $2,592 $2,795 $2,999
2 $5,141 $5,709 $6,302
3 $7,645 $8,744 $9,939
4 $10,105 $11,906 $13,945
5 $12,518 $15,198 $18,354
6 $14,885 $18,625 $23,207
7 $17,202 $22,188 $28,547
8 $19,469 $25,893 $34,422
9 $21,683 $29,742 $40,885
10 $23,843 $33,740 $47,992
15 $41,212 $64,757 $105,765
--------------------------------------------------------------
</TABLE>
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
Appendix D 47
<PAGE>
TABLE 11
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 2 $1 million Initial Face Amount
Guaranteed Schedule of Mortality and Expense Charges and Cash Value Test
Current Fund Level Charges
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,002,592 $1,002,795 $1,002,999 $0 $0 $0
2 $10,763 $1,005,141 $1,005,709 $1,006,302 $1,037 $1,605 $2,198
3 $16,551 $1,007,645 $1,008,744 $1,009,939 $3,997 $5,096 $6,291
4 $22,628 $1,010,104 $1,011,905 $1,013,944 $6,912 $8,713 $10,752
5 $29,010 $1,012,517 $1,015,197 $1,018,352 $9,781 $12,461 $15,616
6 $35,710 $1,014,883 $1,018,623 $1,023,205 $12,603 $16,343 $20,925
7 $42,746 $1,017,200 $1,022,185 $1,028,543 $15,376 $20,361 $26,719
8 $50,133 $1,019,465 $1,025,887 $1,034,415 $18,097 $24,519 $33,047
9 $57,889 $1,021,678 $1,029,734 $1,040,873 $20,766 $28,822 $39,961
10 $66,034 $1,023,834 $1,033,727 $1,047,973 $23,378 $33,271 $47,517
15 $113,287 $1,041,166 $1,064,679 $1,105,629 $41,166 $64,679 $105,629
20 $173,596 $1,055,702 $1,101,345 $1,197,879 $55,702 $101,345 $197,879
25 $250,567 $1,065,611 $1,142,778 $1,344,021 $65,611 $142,778 $344,021
30 $348,804 $1,066,817 $1,185,122 $1,572,584 $66,817 $185,122 $572,584
35 $474,182 $1,048,631 $1,215,666 $1,921,144 $48,631 $215,666 $921,144
40 $634,199 $1,000,000 $1,205,135 $2,435,939 $0 $205,135 $1,435,939
45 $838,426 $1,000,000 $1,081,007 $3,151,296 $0 $81,007 $2,151,296
50 $1,099,077 $1,000,000 $1,000,000 $4,081,957 $0 $0 $3,081,957
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
<S> <C> <C> <C>
1 $2,592 $2,795 $2,999
2 $5,141 $5,709 $6,302
3 $7,645 $8,744 $9,939
4 $10,104 $11,905 $13,944
5 $12,517 $15,197 $18,352
6 $14,883 $18,623 $23,205
7 $17,200 $22,185 $28,543
8 $19,465 $25,887 $34,415
9 $21,678 $29,734 $40,873
10 $23,834 $33,727 $47,973
15 $41,166 $64,679 $105,629
--------------------------------------------------------------
</TABLE>
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
48 Appendix D
<PAGE>
TABLE 12
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select Preferred $5,000 Annual Premium
Death Benefit Option 3 $1 million Initial Face Amount
Guaranteed Schedule of Mortality and Expense Charges and Cash Value Test
Current Fund Level Charges
<CAPTION>
Death Benefit Assuming Hypothetical Net Surrender Value Assuming Hypothetical
Gross Annual Investment Return of: Gross Annual Investment Return of:
----------------------------------------------- ----------------------------------------------
Premiums
End of Accumulated at
Policy 5% Interest
Year Per Year 0% 6% 12% 0% 6% 12%
- -------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $5,250 $1,005,000 $1,005,000 $1,005,000 $0 $0 $0
2 $10,763 $1,010,000 $1,010,000 $1,010,000 $1,037 $1,605 $2,198
3 $16,551 $1,015,000 $1,015,000 $1,015,000 $3,997 $5,096 $6,291
4 $22,628 $1,020,000 $1,020,000 $1,020,000 $6,912 $8,713 $10,752
5 $29,010 $1,025,000 $1,025,000 $1,025,000 $9,781 $12,460 $15,616
6 $35,710 $1,030,000 $1,030,000 $1,030,000 $12,602 $16,342 $20,924
7 $42,746 $1,035,000 $1,035,000 $1,035,000 $15,374 $20,359 $26,718
8 $50,133 $1,040,000 $1,040,000 $1,040,000 $18,094 $24,516 $33,045
9 $57,889 $1,045,000 $1,045,000 $1,045,000 $20,760 $28,817 $39,958
10 $66,034 $1,050,000 $1,050,000 $1,050,000 $23,370 $33,264 $47,514
15 $113,287 $1,075,000 $1,075,000 $1,075,000 $41,126 $64,654 $105,640
20 $173,596 $1,100,000 $1,100,000 $1,100,000 $55,562 $101,300 $198,104
25 $250,567 $1,125,000 $1,125,000 $1,125,000 $65,155 $142,789 $345,629
30 $348,804 $1,150,000 $1,150,000 $1,271,973 $65,361 $185,575 $580,809
35 $474,182 $1,175,000 $1,175,000 $1,751,077 $43,641 $217,779 $946,528
40 $634,199 $1,000,000 $1,200,000 $2,378,533 $0 $210,388 $1,495,932
45 $838,426 $1,000,000 $1,225,000 $3,193,063 $0 $75,899 $2,280,760
50 $1,099,077 $1,000,000 $1,000,000 $4,260,744 $0 $0 $3,354,916
- -------------------------- ----------------------------------------------- ----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------------------
End of
Policy Year 0% 6% 12%
--------------------------------------------------------------
<S> <C> <C> <C>
1 $2,592 $2,795 $2,999
2 $5,141 $5,709 $6,302
3 $7,645 $8,744 $9,939
4 $10,104 $11,905 $13,944
5 $12,517 $15,196 $18,352
6 $14,882 $18,622 $23,204
7 $17,198 $22,183 $28,542
8 $19,462 $25,884 $34,413
9 $21,672 $29,729 $40,870
10 $23,826 $33,720 $47,970
15 $41,126 $64,654 $105,640
--------------------------------------------------------------
</TABLE>
Please remember that the hypothetical investment rates of return shown above and
elsewhere in this prospectus are illustrative only and are not a representation
of past or future investment rates of return. Actual rates of return may be more
or less than those shown.
Appendix D 49
<PAGE>
Appendix E
Directors of C.M. Life Insurance Company
<TABLE>
<CAPTION>
Name, Position, Business Address Principal Occupation(s) During Past Five Years
- -------------------------------- ----------------------------------------------
<S> <C>
Lawrence V. Burkett, Jr., Director, C.M. Life
President and Chief Executive Officer Director, President and Chief Executive Officer (since 1996)
1295 State Street MassMutual
Springfield, MA 01111 Executive Vice President and General Counsel (since 1993)
Senior Vice President and Deputy General Counsel (1992-1993)
John B. Davies, Director C.M. Life
1295 State Street Director (since 1996)
Springfield, MA 01111 MassMutual
Executive Vice President (since 1994)
Associate Executive Vice President (1994-1994)
General Agent (1982-1993)
Isadore Jermyn, Director and Senior Vice C.M. Life
President and Actuary Director (since 1998); Senior Vice President and Actuary (since 1996)
1295 State Street MassMutual
Springfield, MA 01111 Senior Vice President and Actuary (since 1999 and 1995-1998)
Senior Vice President and Chief Actuary (1998-1999)
Vice President and Actuary (1980-1995)
James E. Miller, Director and Senior Vice C.M. Life
President-Life Operations Director and Senior Vice President-Life Operations (since 1998)
140 Garden Street MassMutual
Hartford, CT 06154 Executive Vice President (since 1997 and 1987-1996)
UniCare Life & Health
Senior Vice President (1996-1997)
Robert J. O'Connell, Director C.M. Life
1295 State Street Director (since 1999)
Springfield, MA 01111 MassMutual
President and Chief Executive Officer (since 1999)
American International Group, Inc.
Senior Vice President (1991-1998)
AIG Life Companies
President and Chief Executive Officer (1991-1998)
Stuart H. Reese, Director and Senior Vice C.M. Life
President-Investments Director and Senior Vice President-Investments (since 1996)
1295 State Street MassMutual
Springfield, MA 01111 Chief Executive Director-Investment Management (since 1997)
Senior Vice President (1993-1997)
Aetna Life and Casualty and Affiliates
Investment Manager (1979-1993)
</TABLE>
50 Appendix E
<PAGE>
<TABLE>
<CAPTION>
Principal Officers (other than those who are also Directors):
- -------------------------------------------------------------
<S> <C>
Anne Melissa Dowling, Senior Vice C.M. Life
President-Large Corporate Marketing Senior Vice President-Large Corporate Marketing (since 1996)
140 Garden Street MassMutual
Hartford, CT 06154 Senior Vice President (since 1996)
Connecticut Mutual Life Insurance Company
Chief Investment Officer (1994-1996)
Travelers Insurance Co.
Senior Vice President-International (1987-1993)
Edward M. Kline, Treasurer C.M. Life
1295 State Street Treasurer (since 1997)
Springfield, MA 01111 MassMutual
Vice President (since 1989) and Treasurer (since 1997)
Ann F. Lomeli, Secretary C.M. Life
1295 State Street Secretary (since 1988)
Springfield, MA 01111 MassMutual
Vice President, Secretary and Deputy General Counsel (since 1999)
Vice President, Secretary and Associate General Counsel (1998-1999)
Vice President, Associate Secretary and Associate General Counsel
(1996-1998)
Connecticut Mutual Life Insurance Company
Corporate Secretary and Counsel (1988-1996)
</TABLE>
Appendix 51
<PAGE>
Report Of Independent Accountants
To the Board of Directors and Policyowners of C.M. Life Insurance Company
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of each of the divisions of the
Survivorship Variable Universal Life segment of C.M. Life Variable Life Separate
Account I (hereafter referred to as "the Account") at December 31, 1998, the
results of each of their operations and the changes in each of their net assets
for the period from June 29, 1998 (commencement of operations) through December
31, 1998, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Account's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of investments owned at
December 31, 1998 by correspondence with the investment companies, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Springfield, Massachusetts
February 25, 1999
F-1
<PAGE>
C.M. Life Variable Life Separate Account I - Survivorship Variable Universal
Life
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998
<TABLE>
<CAPTION>
MML
MML MML MML Small Cap
MML Money Managed MML Equity Value
Equity Market Bond Blend Index Equity
Division Division Division Division Division Division
----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments
Number of shares (Note 2) 15,446 789,198 16,448 9,898 50,873 9,504
========== ========== ========== ========== ========== ==========
Identified cost (Note 3B) $ 606,385 $ 789,198 $ 210,111 $ 256,674 $ 733,918 $ 76,744
========== ========== ========== ========== ========== ==========
Value (Note 3A) $ 605,461 $ 789,198 $ 207,180 $ 248,265 $ 776,322 $ 80,700
Dividends receivable 30,663 1,703 3,752 15,552 11,655 289
Receivable from C.M. Life Insurance Company 22,616 618,248 351,281 -- 220,200 87,801
---------- ---------- ---------- ---------- ---------- ----------
Total assets 658,740 1,409,149 562,213 263,817 1,008,177 168,790
LIABILITIES
Payable to C.M. Life Insurance Company -- -- -- 117 -- --
---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS $ 658,740 $1,409,149 $ 562,213 $ 263,700 $1,008,177 $ 168,790
========== ========== ========== ========== ========== ==========
Net Assets:
For variable life insurance policies $ 658,740 $1,409,149 $ 562,213 $ 263,700 $1,008,177 $ 168,790
========== ========== ========== ========== ========== ==========
Accumulation Units (Note 8)
Policyowners 617,283 1,375,652 541,837 249,106 929,784 194,803
NET ASSET VALUE PER ACCUMULATION UNIT
December 31, 1998 $ 1.07 $ 1.02 $ 1.04 $ 1.06 $ 1.08 $ 0.87
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
C.M. Life Variable Life Separate Account I - Survivorship Variable Universal
Life
STATEMENT OF ASSETS AND LIABILITIES (Continued)
December 31, 1998
<TABLE>
<CAPTION>
American
Oppenheimer Oppenheimer Oppenheimer Century T. Rowe Price Fidelity
Capital Oppenheimer Global Strategic VP Income Mid-Cap VIP II
Appreciation Growth Securities Bond & Growth Growth Contrafund
Division Division Division Division Division Division Division
----------- ------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments
Number of shares (Note 2) 4,179 19,414 20,016 40,911 16,721 19,521 7,012
======== ======== ======== ======== ======== ======== ========
Identified cost (Note 3B) $168,864 $662,512 $414,077 $208,498 $105,947 $253,431 $155,781
======== ======== ======== ======== ======== ======== ========
Value (Note 3A) $187,364 $711,903 $441,759 $209,464 $113,371 $278,570 $171,371
Dividends receivable -- -- -- -- -- -- --
Receivable from C.M. Life
Insurance Company 21,057 21,004 152,777 -- 87,775 -- 1,630
-------- -------- -------- -------- -------- -------- --------
Total assets 208,421 732,907 594,536 209,464 201,146 278,570 173,001
LIABILITIES
Payable to C.M. Life
Insurance Company -- -- -- 32 -- 46 --
-------- -------- -------- -------- -------- -------- --------
NET ASSETS $208,421 $732,907 $594,536 $209,432 $201,146 $278,524 $173,001
======== ======== ======== ======== ======== ======== ========
Net Assets:
For variable life insurance policies $208,421 $732,907 $594,536 $209,432 $201,146 $278,524 $173,001
======== ======== ======== ======== ======== ======== ========
Accumulation Units (Note 8)
Policyowners 217,903 691,595 586,927 210,518 186,644 265,755 155,494
NET ASSET VALUE PER ACCUMULATION UNIT
December 31, 1998 $ 0.96 $ 1.06 $ 1.01 $ 0.99 $ 1.08 $ 1.05 $ 1.11
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
C.M. Life Variable Life Separate Account I - Survivorship Variable Universal
Life
STATEMENT OF OPERATIONS
For The Period June 29, 1998 (Commencement of Operations) Through December 31,
1998
<TABLE>
<CAPTION>
MML
MML MML MML Small Cap
MML Money Managed MML Equity Value
Equity Market Bond Blend Index Equity
Division Division Division Division Division Division
----------- ------------ ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $ 30,663 $ 7,321 $ 3,752 $ 15,887 $ 11,659 $ 289
Expenses
Mortality and expense risk fees (Note 4) 134 370 22 77 188 26
-------- -------- -------- -------- -------- --------
Net investment income (loss) (Note 3C) 30,529 6,951 3,730 15,810 11,471 263
-------- -------- -------- -------- -------- --------
Net realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments
(Notes 3B, 3C and 6) 4,692 -- 3 954 (112) (100)
Change in net unrealized appreciation/
depreciation of investments (924) -- (2,931) (8,409) 42,404 3,956
-------- -------- -------- -------- -------- --------
Net gain (loss) on investments 3,768 -- (2,928) (7,455) 42,292 3,856
-------- -------- -------- -------- -------- --------
Net increase in net assets resulting
from operations $ 34,297 $ 6,951 $ 802 $ 8,355 $ 53,763 $ 4,119
======== ======== ======== ======== ======== ========
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
C.M. Life Variable Life Separate Account I - Survivorship Variable Universal
Life
STATEMENT OF OPERATIONS (Continued)
For The Period June 29, 1998 (Commencement of Operations) Through December 31,
1998
<TABLE>
<CAPTION>
American T. Rowe
Oppenheimer Oppenheimer Oppenheimer Century Price Fidelity
Capital Oppenheimer Global Strategic VP Income Mid-Cap VIP II
Appreciation Growth Securities Bond & Growth Growth Contrafund
Division Division Division Division Division Division Division
------------ ----------- ----------- ----------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $ -- $ -- $ -- $ -- $ 322 $ 1,904 $ --
Expenses
Mortality and expense risk fees (Note 4) 23 84 71 32 25 47 34
----------- ---------- ---------- ---------- --------- --------- --------
Net investment income (loss) (Note 3C) (23) (84) (71) (32) 297 1,857 (34)
----------- ---------- ---------- ---------- --------- --------- --------
Net realized and unrealized gain on
investments
Net realized gain on investments
(Notes 3B, 3C and 6) 149 270 196 8 14 53 144
Change in net unrealized appreciation/
depreciation of investments 18,500 49,391 27,682 966 7,424 25,139 15,590
----------- ---------- ---------- ---------- --------- --------- --------
Net gain (loss) on investments 18,649 49,661 27,878 974 7,438 25,192 15,734
----------- ---------- ---------- ---------- --------- --------- --------
Net increase in net assets resulting
from operation $ 18,626 $ 49,577 $ 27,807 $ 942 $ 7,735 $ 27,049 $ 15,700
=========== ========== ========== ========== ========= ========= ========
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
C.M. Life Variable Life Separate Account I - Survivorship Variable Universal
Life
STATEMENT OF CHANGES IN NET ASSETS
For The Period June 29, 1998 (Commencement of Operations) Through December 31,
1998
<TABLE>
<CAPTION>
MML
MML MML MML Small Cap
MML Money Managed MML Equity Value
Equity Market Bond Blend Index Equity
Division Division Division Division Division Division
---------- ----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss) $ 30,529 $ 6,951 $ 3,730 $ 15,810 $ 11,471 $ 263
Net realized gain (loss)
on investments 4,692 -- 3 954 (112) (100)
Change in net unrealized
appreciation/depreciation
of investments (924) -- (2,931) (8,409) 42,404 3,956
---------- ----------- ---------- ---------- ----------- ----------
Net increase in net assets
resulting from operations 34,297 6,951 802 8,355 53,763 4,119
---------- ----------- ---------- ---------- ----------- ----------
Capital transactions: (Note 8)
Transfer of net premium 272,994 1,717,381 122,058 46,618 154,642 12,044
Transfer to (from) Guaranteed
Principal Account 371,108 (289,949) 440,352 215,194 802,970 155,477
Transfer of surrender values (18,429) (23,783) (1,026) (6,453) (6,740) (2,899)
Transfer due to death benefits -- -- -- -- -- --
Transfer due to policy loans,
net of repayments -- -- -- -- -- --
Transfer due to reimbursement
(payment) of accumulation
unit value fluctuation (774) (404) 35 198 4,349 123
Withdrawal due to charges for
administrative and insurance costs (456) (1,047) (8) (212) (807) (74)
---------- ----------- ---------- ---------- ----------- ----------
Net increase in net assets
resulting from capital transactions 624,443 1,402,198 561,411 255,345 954,414 164,671
---------- ----------- ---------- ---------- ----------- ----------
Total increase 658,740 1,409,149 562,213 263,700 1,008,177 168,790
NET ASSETS, at beginning
of the period -- -- -- -- -- --
---------- ----------- ---------- ---------- ----------- ----------
NET ASSETS, at end of the year $ 658,740 $ 1,409,149 $ 562,213 $ 263,700 $ 1,008,177 $ 168,790
========== =========== ========== ========== =========== ==========
</TABLE>
See Notes to Financial Statements.
F-6
<PAGE>
C.M. Life Variable Life Separate Account I - Survivorship Variable Universal
Life
STATEMENT OF CHANGES IN NET ASSETS (Continued)
For The Period June 29, 1998 (Commencement of Operations) Through December 31,
1998
<TABLE>
<CAPTION>
American
Oppenheimer Oppenheimer Oppenheimer Century T. Rowe Price Fidelity
Capital Oppenheimer Global Strategic VP Income Mid-Cap VIP II
Appreciation Growth Securities Bond & Growth Growth Contrafund
Division Division Division Division Division Division Division
----------- ---------- ----------- ------------ ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets
Operations:
Net investment income (loss) $ (23) $ (84) $ (71) $ (32) $ 297 $ 1,857 $ (34)
Net realized gain (loss)
on investments 149 270 196 8 14 53 144
Change in net unrealized
appreciation/depreciation
of investments 18,500 49,391 27,682 966 7,424 25,139 15,590
--------- --------- --------- --------- --------- --------- ---------
Net increase in net assets
resulting from operations 18,626 49,577 27,807 942 7,735 27,049 15,700
--------- --------- --------- --------- --------- --------- ---------
Capital transactions: (Note 8)
Transfer of net premium 136,893 498,892 228,291 202,603 53,920 58,855 25,401
Transfer to (from) Guaranteed
Principal Account 54,844 195,168 343,607 7,187 141,871 195,855 135,433
Transfer of surrender values (2,528) (10,019) (6,301) (1,559) (3,000) (4,279) (3,706)
Transfer due to death benefits -- -- -- -- -- -- --
Transfer due to policy loans,
net of repayments -- -- -- -- -- -- --
Transfer due to reimbursement
(payment) of accumulation
unit value fluctuation 608 (512) 1,372 391 815 1,385 377
Withdrawal due to charges for
administrative and
insurance costs (22) (199) (240) (132) (195) (341) (204)
--------- --------- --------- --------- --------- --------- ---------
Net increase in net assets
resulting from capital
transactions 189,795 683,330 566,729 208,490 193,411 251,475 157,301
--------- --------- --------- --------- --------- --------- ---------
Total increase 208,421 732,907 594,536 209,432 201,146 278,524 173,001
NET ASSETS, at beginning
of the period -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
NET ASSETS, at end of the year $ 208,421 $ 732,907 $ 594,536 $ 209,432 $ 201,146 $ 278,524 $ 173,001
========= ========= ========= ========= ========= ========= =========\
</TABLE>
See Notes to Financial Statements.
F-7
<PAGE>
C.M. Life Variable Life Separate Account I - Survivorship Variable Universal
Life
Notes To Financial Statements
1. HISTORY
C.M. Life Insurance Company ("C.M. Life") was formerly a wholly-owned stock
life insurance subsidiary of Connecticut Mutual Life Insurance Company
("CML"). On February 29, 1996, CML merged with and into Massachusetts
Mutual Life Insurance Company ("MassMutual"). Upon the merger, CML's
existence ceased and MassMutual became the surviving company under the name
Massachusetts Mutual Life Insurance Company. C.M. Life became a
wholly-owned subsidiary of MassMutual.
C.M. Life Variable Life Separate Account I (the "Separate Account I") is a
separate investment account established on February 2, 1995 by C.M. Life in
accordance with the laws of the State of Connecticut.
C.M. Life maintains three segments within Separate Account I. The initial
segment ("EBVUL Segment") is used exclusively for C.M. Life's individual
flexible premium variable life insurance policy, known as Executive Benefit
Variable Universal Life.
On November 12, 1997, C.M. Life established a second segment ("SVUL
Segment") within Separate Account I to be used exclusively for C.M. Life's
survivorship flexible premium adjustable variable life insurance policy,
known as Survivorship Variable Universal Life.
On November 12, 1997, C.M. Life established a third segment ("VUL Segment")
within Separate Account I to be used exclusively for C.M. Life's flexible
premium adjustable variable life insurance policy, known as Variable
Universal Life.
The Separate Account I operates as a registered unit investment trust
pursuant to the Investment Company Act of 1940.
2. INVESTMENT OF SVUL SEGMENT'S ASSETS
The SVUL Segment maintains thirteen divisions. The division invests in
corresponding shares of either the MML Series Investment Fund ("MML
Trust"), Oppenheimer Variable Account Funds ("Oppenheimer Trust"), American
Century Variable Portfolios, Inc. ("American Century"), T. Rowe Price
Equity Series, Inc. ("T. Rowe Price Equity Series") and Fidelity Variable
Insurance Products Fund II ("Fidelity VIP II").
The MML Trust is a no-load, open-end, management investment company
registered under the Investment Company Act of 1940. All six of its
separate series are available to the SVUL policyowners: MML Equity Fund,
MML Money Market Fund, MML Managed Bond Fund, MML Blend Fund, MML Equity
Index Fund and MML Small Cap Value Equity Fund. MassMutual serves as
investment manager of each of the MML Funds pursuant to an investment
management agreement. David L. Babson & Company, Inc. ("Babson") a
controlled subsidiary of MassMutual, serves as the sub-adviser to the MML
Equity Fund and the Equity Sector of the MML Blend Fund. MassMutual has
also entered in a sub-advisory agreement with Mellon Equity Associates
("Mellon Equity") whereby Mellon Equity serves as the sub-adviser to the
MML Equity Index Fund.
Oppenheimer Trust is an open-end, diversified, management investment
company registered under the Investment Company Act of 1940 with four if
its funds available to the SVUL Segment's policyowners: Oppenheimer
Aggressive Growth Fund, Oppenheimer Growth Fund, Oppenheimer Global
Securities Fund and Oppenheimer Strategic Bond Fund. OppenheimerFunds, Inc.
("OFI"), a controlled subsidiary of MassMutual, serves as investment
manager to the Oppenheimer Trust.
American Century Variable Portfolios, Inc. is an open-end, diversified,
management investment company with one of its portfolios currently
available to the Segment's contractowners: American Century VP Income &
Growth. Investment Management, Inc. is the investment manager to the
American Century VP Income & Growth Portfolio.
T. Rowe Price Equity Series is an open-end, diversified, investment company
with one of its series of shares currently available to the SVUL Segment's
policyowners: T. Rowe Price Mid-Cap Growth Portfolio. T. Rowe Price
Associates, Inc. is the investment manager to the T. Rowe Price Mid-Cap
Growth Portfolio.
Fidelity VIP II is an open-end, diversified, management investment company
registered under the Investment Company Act of 1940 with one of its
Portfolios available to the SVUL policyowners: the VIP II Contrafund
Portfolio. Fidelity Management & Research Company ("FMR") is the investment
manager to the VIP II Contrafund Portfolio.
F-8
<PAGE>
Notes To Financial Statements (Continued)
In addition to the thirteen divisions of SVUL, policyowners may also
allocate funds to the Guaranteed Principal Account ("GPA"), which is part
of C.M. Life's general account. Because of exemptive and exclusionary
provisions, interests in the GPA, are not registered under the Securities
Act of 1933. Also, the general account is not registered as an investment
company under the Investment Company Act of 1940.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by SVUL Segment in preparation of the financial statements in
conformity with generally accepted accounting principles.
A. Investment Valuation
Investments in MML Trust, the Oppenheimer Trust, American Century, T. Rowe
Price Equity Series and Fidelity VIP II, are each stated at market value
which is the net asset value of each of the respective underlying funds.
B. Accounting for Investments
Investment transactions are accounted for on trade date and identified cost
is the basis followed in determining the cost of investments sold for
financial statement purposes. Dividend income is recorded on the
ex-dividend date.
C. Federal Income Taxes
Operations of the Separate Account I form a part of the total operations of
C.M. Life, and the Separate Account I is not taxed separately. C.M. Life is
taxed as a life insurance company under the provisions of the 1986 Internal
Revenue Code, as amended. The Separate Account I will not be taxed as a
"regulated investment company" under Subchapter M of the Internal Revenue
Code. Under existing federal law, no taxes are payable on investment income
and realized capital gains of the SVUL Segment credited to the policies.
Accordingly, no provision for federal income tax has been made. C.M. Life
may, however, make such a charge in the future if an unanticipated change
of current law results in a company tax liability attributable to the
Separate Account I.
D. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
4. CHARGES
A premium expense charge is deducted from each premium payment made prior
to the allocation of the payment to the Divisions of the Separate Account I
and the GPA. The charge is 13% of premium up to expense premium and 3% of
premium over expense premium.
Charges will be deducted from the account value on each monthly charge
date. The monthly charges consist of: (a) an administrative charge; (b) a
face amount charge; (c) an insurance charge and (d) a rider charge for any
additional benefits provided by rider.
Daily charges against the net asset value of the Separate Account I will be
assessed for mortality and expense risks. This charge is not deducted from
the assets in the GPA. The current effective annual rate is 0.25% of daily
net asset value.
5. SALES AGREEMENTS
MML Distributors, LLC ("MML Distributors"), a wholly-owned subsidiary of
MassMutual, serves as principal of the policies pursuant to an underwriting
and servicing agreement to which MML Distributors, MassMutual and Separate
Account I are parties. MML Investors Services, Inc. ("MMLISI") serves as
the co-underwriter of the policy. Both MML Distributors and MMLISI are
registered with the Securities and Exchange Commission (the "SEC") as a
broker-dealer under the Securities Exchange Act of 1934 and is a member of
the National Association of Securities Dealers, Inc. (the "NASD"). MML
Distributors may enter into selling agreements with other broker-dealers
that are registered with the SEC and are members of the NASD in order to
sell the policies.
F-9
<PAGE>
Notes To Financial Statements (Continued)
Pursuant to the underwriting and servicing agreement, commissions or other
fees due to registered representatives for selling and servicing the
policies are paid by MassMutual on behalf of MML Distributors or MMLISI.
MML Distributors and MMLISI also receive compensation for their activities
as underwriter of the policy.
6. PURCHASES AND SALES OF INVESTMENTS
<TABLE>
<CAPTION>
MML
MML MML MML Small Cap Oppenheimer
For the Period June 29, 1998 MML Money Managed MML Equity Value Capital
(Commencement of Operations) Equity Market Bond Blend Index Equity Appreciation
through December 31, 1998 Division Division Division Division Division Division Division
------------------------- ------------ ------------- ------------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cost of purchases $ 650,277 $2,753,283 $ 210,303 $ 287,542 $ 752,519 $ 78,509 $ 169,552
Proceeds from sales 48,584 1,964,085 195 31,822 18,489 1,665 837
Average monthly value of securities 204,817 473,490 292,503 99,973 308,639 50,828 79,935
</TABLE>
<TABLE>
<CAPTION>
American
Oppenheimer Oppenheimer Century T. Rowe Price Fidelity
For the Period June 29, 1998 Oppenheimer Global Strategic VP Income Mid-Cap VIP II
(Commencement of Operations) Growth Securities Bond & Growth Growth Contrafund
through December 31, 1998 (Continued) Division Division Division Division Division Division
------------------------------------- ------------ ------------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Cost of purchases $ 664,682 $ 415,697 $ 208,852 $ 106,516 $ 254,935 $ 158,014
Proceeds from sales 2,440 1,816 362 583 1,557 2,377
Average monthly value of securities 199,587 147,018 46,707 55,800 80,850 56,302
</TABLE>
7. NET INVESTMENT RETURN
The following table shows the net investment return for each division in
the SVUL Segment:
<TABLE>
<CAPTION>
MML
MML MML MML Small Cap Oppenheimer
MML Money Managed MML Equity Value Capital
Equity Market Bond Blend Index Equity Appreciation
Division Division Division Division Division Division Division
------------ -------------- ------------ ------------ ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
For the Period June 29, 1998
(Commencement of Operations)
through December 31, 1998 16.75% 1.47% 0.27% 8.37% 17.42% 8.10% 23.30%
</TABLE>
<TABLE>
<CAPTION>
American
Oppenheimer Oppenheimer Century T. Rowe Price Fidelity
Oppenheimer Global Strategic VP Income Mid-Cap VIP II
Growth Securities Bond & Growth Growth Contrafund
Division Division Division Division Division Division
------------ -------------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
For the Period June 29, 1998
(Commencement of Operations)
through December 31, 1998 (Continued) 24.84% 18.91% 2.02% 13.86% 33.46% 27.89%
</TABLE>
The net investment return for each division of the SVUL Segment is computed
using the net increase in net assets resulting from operations as compared
to the average monthly net assets. The net investment return figures shown
above do not reflect expenses related to insurance products. Inclusion of
such expenses would reduce the net investment return figures for the period
shown.
Note: The amounts shown for the period June 29, 1998 through December 31,
1998 are not annualized.
F-10
<PAGE>
Notes To Financial Statements (Continued)
8. NET INCREASE (DECREASE) IN ACCUMULATION UNITS
<TABLE>
<CAPTION>
MML
MML MML MML Small Cap Oppenheimer
For the Period June 29, 1998 MML Money Managed MML Equity Value Capital
(Commencement of Operations) Equity Market Bond Blend Index Equity Appreciation
through December 31, 1998 Division Division Division Division Division Division Division
-------------------------------- ------------ ------------ ------------ ----------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Units purchased 524,308 2,852,045 457,666 103,962 501,048 132,416 194,616
Units withdrawn and transferred to
Guaranteed Principal Account (18,581) (24,375) (998) (6,654) (7,416) (3,640) (2,985)
Units transferred between divisions 111,556 (1,452,018) 85,169 151,798 436,152 66,027 26,272
------------ ------------ ------------ ------------ ----------- ------------ --------------
Net increase 617,283 1,375,652 541,837 249,106 929,784 194,803 217,903
Units, at beginning of the period - - - - - - -
------------ ------------ ------------ ------------ ----------- ------------ --------------
Units, at end of the year 617,283 1,375,652 541,837 249,106 929,784 194,803 217,903
============ ============ ============ ============ =========== ============ ==============
<CAPTION>
American
Oppenheimer Oppenheimer Century T. Rowe Price Fidelity
For the Period June 29, 1998 Oppenheimer Global Strategic VP Income Mid-Cap VIP II
(Commencement of Operations) Growth Securities Bond & Growth Growth Contrafund
through December 31, 1998 (Continued) Division Division Division Division Division Division
------------------------------------- ------------ ------------ ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Units purchased 560,436 407,117 208,396 166,397 96,955 65,413
Units withdrawn and transferred to
Guaranteed Principal Account (11,405) (7,395) (1,714) (3,169) (5,189) (4,007)
Units transferred between divisions 142,564 187,205 3,836 23,416 173,989 94,088
------------ ------------ ------------ ------------ ----------- ------------
Net increase 691,595 586,927 210,518 186,644 265,755 155,494
Units, at beginning of the period - - - - - -
------------ ------------ ------------ ------------ ----------- ------------
Units, at end of the year 691,595 586,927 210,518 186,644 265,755 155,494
============ ============ ============ ============ =========== ============
</TABLE>
F-11
<PAGE>
Notes to Financial Statements (Continued)
9. CONSOLIDATED MASSACHUSETTS MUTUAL VARIABLE LIFE SEPARATE ACCOUNT 1
As discussed in Note 1, the financial statements only represent activity of
C.M. Life's SVUL Segment. The combined net assets as of December 31, 1998
for Separate Account I, which includes (but not limited to) the EBVUL and
SVUL Segments are as follows:
<TABLE>
<CAPTION>
Oppenheimer
MML MML MML MML Capital
MML Equity Money Managed MML Small Cap Apprecia- Oppenheimer
Equity Index Market Bond Blend Value Equity tion Growth
Division Division Division Division Division Division Division Division
----------- ------------ ------------- ---------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total assets $ 658,740 $ 1,008,177 $ 1,409,149 $ 562,213 $ 263,817 $ 168,790 $ 208,421 $ 732,907
Total liabilities - - - - 117 - - -
----------- ------------ ------------- ---------- ----------- ----------- ---------- ----------
Net assets $ 658,740 $ 1,008,177 $ 1,409,149 $ 562,213 $ 263,700 $ 168,790 $ 208,421 $ 732,907
=========== ============ ============= ========== =========== =========== ========== ==========
Net assets:
For variable life
insurance policies 658,740 1,008,177 1,409,149 562,213 263,700 168,790 208,421 732,907
=========== ============ ============= ========== =========== =========== ========== ==========
<CAPTION>
Oppenheimer Oppenheimer
Global Strategic Oppenheimer
Securities Bond Income
Division Division Division
------------ ------------- --------------
<S> <C> <C> <C>
Total assets $ 594,536 $ 209,464 $ 1,734,741
Total liabilities - 32 3,920
------------ ------------- --------------
Net assets $ 594,536 $ 209,432 $ 1,730,821
============ ============= ==============
Net assets:
For variable life
insurance policies 594,536 209,432 1,730,821
============ ============= ==============
</TABLE>
<TABLE>
<CAPTION>
Panorama Panorama American
Panorama LifeSpan Panorama LifeSpan Century T. Rowe Price
Panorama Panorama International Diversified LifeSpan Capital VP Income Mid-Cap
Total Return Growth Equity Income Balanced Appreciation & Growth Growth
Division Division Division Division Division Division Division Division
------------- ------------ ------------ ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total assets $ 449,883 $ 1,196,143 $ 111,095 $ 34,192 $ 58,372 $ 53,988 $ 201,146 $ 278,570
Total liabilities 1,033 803 247 77 130 114 - 45
------------- ------------ ------------ ----------- ---------- ----------- ----------- ----------
Net assets $ 448,850 $ 1,195,340 $ 110,848 $ 34,115 $ 58,242 $ 53,874 $ 201,146 $ 278,525
============= ============ ============ =========== ========== =========== =========== ==========
Net assets:
For variable life
insurance policies 448,850 1,195,340 110,848 34,115 58,242 53,874 201,146 278,525
============= ============ ============ =========== ========== =========== =========== ==========
<CAPTION>
Fidelity Fidelity Fidelity Fidelity
VIP II Money High Index
Contrafund Market Income 500
Division Division Division Division
------------ ---------- ---------- -----------
<S> <C> <C> <C> <C>
Total assets $ 173,001 $ 4,136 $ 150,270 $ 479,656
Total liabilities - 38 315 632
------------ ---------- ---------- -----------
Net assets $ 173,001 $ 4,098 $ 149,955 $ 479,024
============ ========== ========== ===========
Net assets:
For variable life
insurance policies 173,001 4,098 149,955 479,024
============ ========== ========== ===========
</TABLE>
F-12
<PAGE>
Report Of Independent Accountants
To the Board of Directors and Policyholders of
C.M. Life Insurance Company
We have audited the accompanying statutory statements of financial position of
C.M. Life Insurance Company as of December 31, 1998 and 1997, and the related
statutory statements of income and changes in shareholder's equity, and of cash
flows for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our 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.
As described in Note 1, these financial statements were prepared in conformity
with accounting practices prescribed or permitted by the Department of Insurance
of the State of Connecticut, which practices differ from generally accepted
accounting principles. The effects on the financial statements of the variances
between the statutory basis of accounting and generally accepted accounting
principles, although not reasonably determinable, are presumed to be material.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements audited by us do not present fairly, in
conformity with generally accepted accounting principles, the financial position
of C.M. Life Insurance Company as of December 31, 1998 and 1997, or the results
of its operations or its cash flows for each of the three years in the period
ended December 31, 1998.
In our opinion, the financial statements audited by us present fairly, in all
material respects, the financial position of C.M. Life Insurance Company as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1998, on the basis
of accounting described in Note 1.
PricewaterhouseCoopers LLP
Springfield, Massachusetts
February 25, 1999
FF-1
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION
December 31,
1998 1997
---- ----
(In Millions)
Assets:
Bonds $ 683.0 $ 664.5
Mortgage loans 126.3 101.6
Other investments 76.3 63.6
Policy loans 150.4 142.5
Cash and short-term investments 105.7 88.4
-------- --------
1,141.7 1,060.6
Investment and insurance amounts
receivable 33.9 30.1
Federal income tax receivable 2.1 --
Transfer due from separate accounts 34.3 32.0
-------- --------
1,212.0 1,122.7
Separate account assets 1,318.9 1,096.5
-------- --------
$2,530.9 $2,219.2
======== ========
See notes to statutory financial statements.
FF-2
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION, Continued
December 31,
1998 1997
---- ----
($ In Millions Except for Par Value)
Liabilities:
Policyholders' reserves and funds $ 996.3 $ 951.0
Policyholders' claims and other benefits 3.8 4.5
Payable to parent 28.8 13.6
Federal income taxes -- 6.1
Asset valuation and other investment reserves 23.9 26.6
Other liabilities 18.2 7.7
-------- --------
1,071.0 1,009.5
Separate account liabilities 1,318.9 1,096.5
-------- --------
2,389.9 2,106.0
-------- --------
Shareholder's equity:
Common stock, $200 par value
50,000 shares authorized
12,500 shares issued and outstanding 2.5 2.5
Paid-in and contributed surplus 68.8 43.8
Surplus 69.7 66.9
-------- --------
141.0 113.2
-------- --------
$2,530.9 $2,219.2
======== ========
See notes to statutory financial statements.
FF-3
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF INCOME
Years Ended December 31,
1998 1997 1996
---- ---- ----
(In Millions)
Revenue:
Premium income $406.4 $331.3 $314.4
Net investment income 82.4 75.3 75.2
Fees and other income 5.5 7.5 8.7
------ ------ ------
494.3 414.1 398.3
------ ------ ------
Benefits and expenses:
Policyholders' benefits and payments 185.2 100.4 99.0
Addition to policyholders' reserves and funds 168.8 200.7 217.8
Operating expenses 72.1 49.5 45.4
Commissions 49.6 33.5 25.0
State taxes, licenses and fees 8.1 3.5 3.2
------ ------ ------
483.8 387.6 390.4
------ ------ ------
Net gain from operations before federal
income taxes 10.5 26.5 7.9
Federal income taxes 6.8 19.0 6.3
------ ------ ------
Net gain from operations 3.7 7.5 1.6
Net realized capital gain (loss) (1.1) 0.1 0.6
------ ------ ------
Net income $ 2.6 $ 7.6 $ 2.2
====== ====== ======
See notes to statutory financial statements.
FF-4
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
Years Ended December 31,
1998 1997 1996
---- ---- ----
(In Millions)
Shareholder's equity, beginning of year $113.2 $109.8 $113.2
------ ------ ------
Increases (decreases) due to:
Net income 2.6 7.6 2.2
Change in asset valuation and investment
reserves 2.7 (4.8) (1.9)
Change in net unrealized capital gain (loss) (5.8) 0.8 (1.0)
Capital contribution 25.0 -- --
Other 3.3 (0.2) (2.7)
------ ------ ------
27.8 3.4 (3.4)
------ ------ ------
Shareholder's equity, end of year $141.0 $113.2 $109.8
====== ====== ======
See notes to statutory financial statements.
FF-5
<PAGE>
C.M. Life Insurance Company
STATUTORY STATEMENTS OF CASH FLOWS
Years Ended December 31,
1998 1997 1996
---- ---- ----
(In Millions)
Operating activities:
Net income $ 2.6 $ 7.6 $ 2.2
Additions to policyholders' reserves and funds
net of transfers to separate accounts 44.6 44.2 41.6
Net realized capital (gain) loss 1.1 (0.1) (0.6)
Other changes 7.8 0.5 (0.8)
------- ------- -------
Net cash provided by operating activities 56.1 52.2 42.4
------- ------- -------
Investing activities:
Loans and purchases of investments (568.6) (438.6) (184.9)
Sales and maturities of investments and
receipts from repayment of loans 504.8 411.1 191.1
------- ------- -------
Net cash provided by (used in) investing
activities (63.8) (27.5) 6.2
------- ------- -------
Financing Activities:
Capital and surplus contribution 25.0 -- --
------- ------- -------
Increase in cash and short-term investments 17.3 24.7 48.6
Cash and short-term investments, beginning of
year 88.4 63.7 15.1
------- ------- -------
Cash and short-term investments, end of year $ 105.7 $ 88.4 $ 63.7
======= ======= =======
See notes to statutory financial statements
FF-6
<PAGE>
NOTES TO STATUTORY FINANCIAL STATEMENTS
C.M. Life Insurance Company (the Company) is a wholly-owned stock life
insurance subsidiary of Massachusetts Mutual Life Insurance Company
("MassMutual"). On March 1, 1996, the operations of the Company's former
parent, Connecticut Mutual Life Insurance Company, were merged into
MassMutual. The Company is primarily engaged in the sale of flexible premium
universal life insurance and variable annuity products distributed through
career agents. The Company is licensed to sell life insurance and annuities
in Puerto Rico, the District of Columbia and 49 states (excluding New York).
1. SUMMARY OF ACCOUNTING PRACTICES
The accompanying statutory financial statements, have been prepared in
conformity with the statutory accounting practices of the National
Association of Insurance Commissioners ("NAIC") and the accounting practices
prescribed or permitted by the Department of Insurance of the State of
Connecticut and are different in some respects from financial statements
prepared in accordance with generally accepted accounting principles
("GAAP"). The more significant differences are as follows: (a) acquisition
costs, such as commissions and other costs directly related to acquiring new
business, are charged to current operations as incurred, whereas GAAP would
require these expenses to be capitalized and recognized over the life of the
policies; (b) policy reserves are based upon statutory mortality and
interest requirements without consideration of withdrawals, whereas GAAP
reserves would be based upon reasonably conservative estimates of mortality,
morbidity, interest and withdrawals; (c) bonds are generally carried at
amortized cost whereas GAAP generally requires they be reported at fair
value; (d) deferred income taxes are not provided for book-tax timing
differences as would be required by GAAP; and (e) payments received for
universal life products and variable annuities are reported as premium
revenue, whereas under GAAP, these payments would be recorded as deposits to
policyholders' account balances.
In March 1998, the NAIC adopted the Codification of Statutory Accounting
Principles ("Codification"). Codification provides a comprehensive guide of
statutory accounting principles for use by insurers in all states and is
expected to become effective no later than January 1, 2001. The effect of
adopting Codification shall be reported as an adjustment to surplus on the
effective date. The Company is currently reviewing the impact of
Codification; however, since the Department of Insurance of the State of
Connecticut has not approved Codification, the ultimate impact cannot be
determined at this time.
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, as well as disclosures of contingent assets and liabilities, at
the date of the financial statements. Management must also make estimates
and assumptions that affect the amounts of revenues and expenses during the
reporting period. Future events, including changes in the levels of
mortality, morbidity, interest rates and asset valuations, could cause
actual results to differ from the estimates used in these financial
statements.
Certain 1997 and 1996 amounts have been reclassed to conform with the
current year presentation.
The following is a description of the Company's principal accounting
policies and practices.
A. Investments
Bonds are valued in accordance with rules established by the NAIC.
Generally, bonds are valued at amortized cost.
Mortgage loans are valued at unpaid principal net of unamortized premium or
discount. The Company discontinues the accrual of interest on mortgage loans
which are delinquent more than 90 days or when collection is uncertain.
FF-7
<PAGE>
Notes To Statutory Financial Statements (Continued)
Policy loans are carried at the outstanding loan balance less amounts
unsecured by the cash surrender value of the policy.
Short-term investments are stated at amortized cost, which approximates fair
value.
Other invested assets include investments in affiliated mutual funds and
preferred stocks and are valued in accordance with rules established by the
NAIC. Generally, investments in mutual funds are valued at fair value and
preferred stocks in good standing at cost.
In compliance with regulatory requirements, the Company maintains an Asset
Valuation Reserve ("AVR") and an Interest Maintenance Reserve ("IMR"). The
AVR and other investment reserves stabilize surplus against fluctuations in
the value of stocks, as well as declines in the value of bonds and mortgage
loans. The IMR captures after-tax realized capital gains and losses which
result from changes in the overall level of interest rates for all types of
fixed income investments and interest related hedging activities. These
interest related gains and losses are amortized into income using the grouped
method over the remaining life of the investment sold or over the remaining
life of the underlying asset. Net realized after-tax capital gains of $2.6
million in 1998, $2.0 million in 1997 and $0.4 million in 1996 were
transferred to the IMR. Amortization of the IMR into net investment income
amounted to $0.3 million in 1998 and $0.1 million in 1997 and 1996. At
December 31, 1997, the IMR consisted of a net loss deferral, which, in
accordance with the regulations, was recorded as a reduction of surplus.
Realized capital gains and losses, less taxes, not includable in the IMR, are
recognized in net income. Realized capital gains and losses are determined
using the specific identification method. Unrealized capital gains and losses
are included in surplus.
B. Separate Accounts
Separate account assets and liabilities represent segregated funds
administered and invested by the Company for the benefit of variable annuity
contract holders. Assets consist principally of marketable securities
reported at fair value. Transfers due from separate accounts represent the
policyholders' account values in excess of statutory benefit reserves.
Premiums, benefits and expenses of the separate accounts are reported in the
Statutory Statement of Income. The Company receives administrative and
investment advisory fees from these accounts.
Net transfers to separate accounts of $121.0 million, $146.5 million and
$170.5 million in 1998, 1997 and 1996, respectively, are included in the
addition to policyholders' reserves and funds.
C. Non-admitted Assets
Assets designated as "non-admitted" (principally prepaid agent commissions,
other prepaid expenses and the IMR, when in a net loss deferral position) are
excluded from the statutory statement of financial position. These amounted
to $5.5 million and $5.7 million as of December 31, 1998 and 1997,
respectively and changes therein are charged directly to surplus.
D. Policyholders' Reserves and Funds
Policyholders' reserves for life insurance contracts are developed using
accepted actuarial methods computed principally on the net level premium, the
Commissioners' Reserve Valuation Method and the California Method bases using
the 1980 Commissioners' Standard Ordinary mortality tables with assumed
interest rates ranging from 3.0 to 4.5 percent.
FF-8
<PAGE>
Notes To Statutory Financial Statements (Continued)
Reserves for individual annuities are based on accepted actuarial methods,
principally at interest rates ranging from 5.25 to 9.0 percent. Reserves for
policies and contracts considered investment contracts have a carrying value
of $129.8 million and $115.6 million at December 31, 1998 and 1997,
respectively with a fair value of $132.8 million and $116.0 million at
December 31, 1998 and 1997, respectively as determined by discounted cash
flow projections.
The Company made certain changes in the valuation of policyholders' reserves
which increased surplus by $2.7 million in 1998.
E. Premium and Related Expense Recognition
Life insurance premium revenue is recognized annually on the anniversary date
of the policy. Annuity premium is recognized when received. Commissions and
other costs related to the issuance of new policies, maintenance and
settlement costs are charged to current operations when incurred.
F. Cash and Short-term Investments
For purposes of the Statutory Statement of Cash Flows, the Company considers
all highly liquid short-term investments purchased with a maturity of twelve
months or less to be short-term investments.
2. FEDERAL INCOME TAXES
Provision for federal income taxes is based upon the Company's estimate of
its tax liability. No deferred tax effect is recognized for temporary
differences that may exist between financial reporting and taxable income.
Accordingly, the reporting of miscellaneous temporary differences, such as
reserves and acquisition costs, resulted in effective tax rates which differ
from the statutory tax rate.
The Company plans to file a separate company 1998 federal income tax return.
The Internal Revenue Service has completed its examination of the Company's
income tax returns through the year 1995.
Federal tax payments were $16.9 million in 1998, $6.8 million in 1997 and
$17.6 million in 1996.
3. SHAREHOLDER'S EQUITY
The Board of Directors of MassMutual has authorized the contribution of funds
to the Company sufficient to meet the capital requirements of all states in
which the Company is licensed to do business. Substantially all of the
statutory shareholder's equity is subject to dividend restrictions relating
to various state regulations, which limit the payment of dividends to the
shareholder without prior approval. Under these regulations, $11.3 million of
shareholder's equity is available for distribution to the shareholder in 1999
without prior regulatory approval.
During 1998, MassMutual contributed additional paid-in capital of $25.0
million to the Company.
4. RELATED PARTY TRANSACTIONS
MassMutual and the Company have an agreement whereby MassMutual, for a fee,
furnishes the Company, as required, operating facilities, human resources,
computer software development and managerial services. Also, investment and
administrative services are provided to the Company pursuant to a management
services agreement with MassMutual. Similar arrangements were in place with
Connecticut Mutual Life Insurance Company, the Company's former parent, prior
to its merger with MassMutual. Fees incurred under the terms of these
agreements were $74.1 million, $39.7 million and $45.9 million in 1998, 1997
and 1996, respectively.
FF-9
<PAGE>
Notes To Statutory Financial Statements (Continued)
Prior to March 1, 1996, the Company had an underwriting agreement with its
affiliates GR Phelps & Co., Inc. and MML Distributors LLC. Under this
agreement, the affiliates paid commissions and received the cash flows from
variable annuity contract fees. Effective March 1, 1996, this agreement was
cancelled, and the Company began paying all commissions and retained the
right to the related future cash flows from contract fees.
The Company cedes a portion of its life insurance business to MassMutual and
other insurers in the normal course of business. The Company's retention
limit per individual insured is $12.0 million; the portion of the risk
exceeding the retention limit is reinsured with other insurers. The Company
is contingently liable with respect to ceded reinsurance in the event any
reinsurer is unable to fulfill its contractual obligations.
The Company has a modified coinsurance quota-share reinsurance agreement with
MassMutual whereby the Company cedes 75% of the premiums on certain universal
life policies. In return, MassMutual pays the Company a stipulated expense
allowance, death and surrender benefits, and a modified coinsurance
adjustment based upon experience. Reserves for payment of future benefits for
the ceded policies are retained by the Company.
The Company also has a stop-loss agreement with MassMutual under which the
Company cedes claims which, in aggregate, exceed 18% of the covered volume
for any year, with maximum coverage of $25.0 million above the aggregate
limit. The aggregate limit was $36.9 million in 1998, $35.6 million in 1997,
and $28.1 million in 1996 and it was not exceeded in any of the years. The
Company paid approximately $1.0 million in premiums to MassMutual under the
agreement in 1998 and 1997, and $0.4 million in 1996.
5. INVESTMENTS
The Company maintains a diversified investment portfolio. Investment policies
limit concentration in any asset class, geographic region, industry group,
economic characteristic, investment quality or individual investment.
A. Bonds
The carrying value and estimated fair value of investments in bonds as of
December 31, 1998 and 1997 are as follows:
December 31, 1998
-----------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
-------- ---------- ---------- ---------
(In Millions)
U. S. Treasury securities $ 69.3 $ 1.4 $ 0.1 $ 70.6
and obligations of U.S.
government corporations
and agencies
Debt securities issued by 3.2 -- 0.1 3.1
foreign governments
Mortgage-backed securities 57.9 1.6 0.2 59.3
State and local governments 12.1 0.4 0.2 12.3
Corporate debt securities 522.6 17.8 3.0 537.4
Utilities 17.9 0.9 -- 18.8
-------- ------- ------ --------
Total $ 683.0 $ 22.1 $ 3.6 $ 701.5
======== ======= ====== ========
FF-10
<PAGE>
Notes To Statutory Financial Statements (Continued)
December 31, 1997
-----------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
-------- ---------- ---------- ---------
(In Millions)
U. S. Treasury securities $ 104.3 $ 2.2 $ 0.2 $ 106.3
and obligations of U.S.
government corporations
and agencies
Debt securities issued by 4.6 -- 0.3 4.3
foreign governments
Mortgage-backed securities 38.8 1.0 0.2 39.6
State and local governments 20.0 0.3 -- 20.3
Corporate debt securities 471.8 15.6 1.9 485.5
Utilities 25.0 1.1 -- 26.1
-------- ------- ------ --------
Total $ 664.5 $ 20.2 $ 2.6 $ 682.1
======== ======= ====== ========
The carrying value and estimated fair value of bonds at December 31, 1998, by
contractual maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without prepayment penalties.
<TABLE>
<CAPTION>
Estimated
Carrying Fair
Value Value
-------- ---------
(In Millions)
<S> <C> <C>
Due in one year or less $ 52.2 $ 52.5
Due after one year through five years 216.8 223.2
Due after five years through ten years 233.1 240.0
Due after ten years 69.4 72.1
-------- --------
571.5 587.8
Mortgage-backed securities, including
securities guaranteed by the U.S.
Government 111.5 113.7
-------- --------
Total $ 683.0 $ 701.5
======== ========
</TABLE>
Proceeds from sales of investments in bonds were $480.4 million during 1998,
$388.8 million during 1997, and $162.9 million during 1996. Gross capital
gains of $5.0 million in 1998, $3.8 million in 1997, and $1.6 million in 1996
and gross capital losses of $0.9 million in 1998, $0.5 million in 1997, and
$0.9 million in 1996 were realized on those sales, portions of which were
included in the IMR. Estimated fair value of non-publicly traded bonds is
determined by the Company using a pricing matrix and quoted market prices for
publicly traded bonds.
B. Mortgages
The fair value of mortgage loans, as determined from a pricing matrix for
performing loans and the estimated underlying real estate value for non-
performing loans, approximated carrying value.
The Company had restructured loans with book values of $10.4 million and
$17.3 million at December 31, 1998 and 1997, respectively. The loans
typically have been modified to defer a portion of the contractual interest
payments to future periods. Interest deferred to future periods totaled $0.2
million in 1998, 1997 and 1996. At December 31, 1998, scheduled commercial
mortgage loan maturities were as follows: 1999 - $8.6 million; 2000 - $1.5
million; 2001 - $10.3 million; 2002 - $15.0 million; 2003 - $8.6 million; and
$37.0 million thereafter.
FF-11
<PAGE>
Notes To Statutory Financial Statements (Continued)
C. Policy Loans
Policy loans are recorded at cost as it is not practicable to determine the
fair value since they do not have a stated maturity.
D. Other
Investments in affiliated mutual funds had a cost of $62.4 million in 1998
and $50.2 million in 1997 with fair values of $67.7 million in 1998 and $61.4
million in 1997, using quoted market prices. Preferred stocks in good
standing had fair values of $0.5 million in 1998 using a pricing matrix for
non-publicly traded stocks and quoted market prices for publicly traded
stocks. At December 31, 1998, the fair values of preferred stocks
approximated cost. The Company did not invest in any preferred stocks at
December 31, 1997.
The carrying value of investments which were non-income producing for the
preceding twelve months was $0.4 million at December 31, 1998 and 1997.
6. PORTFOLIO RISK MANAGEMENT
The Company manages its investment risks primarily to reduce interest rate
and duration imbalances determined in asset/liability analyses. The fair
values of these instruments, which are not recorded in the financial
statements, are based upon market prices or prices obtained from brokers. The
Company does not hold or issue these financial instruments for trading
purposes.
The notional amounts described do not represent amounts exchanged by the
parties and, thus, are not a measure of the exposure of the Company. The
amounts exchanged are calculated on the basis of the notional amounts and the
other terms of the instruments, which relate to interest rates, exchange
rates, security prices or financial or other indexes.
The Company utilizes interest rate swap agreements, options, and purchased
caps and floors to reduce interest rate exposures arising from mismatches
between assets and liabilities and to modify portfolio profiles to manage
other risks identified. Under interest rate swaps, the Company agrees to an
exchange, at specified intervals, between streams of variable rate and fixed
rate interest payments calculated by reference to an agreed-upon notional
principal amount. Gains and losses realized on the termination of contracts
are deferred and amortized through the IMR over the remaining life of the
associated contract. IMR amortization is included in net investment income on
the Statutory Statement of Income. Net amounts receivable and payable are
accrued as adjustments to investment income and included in investment and
insurance amounts receivable on the Statutory Statement of Financial
Position. At December 31, 1998 and 1997, the Company had swaps outstanding
with notional amounts of $197.5 million and $46.5 million, respectively. The
fair value of these instruments was $2.7 million at December 31, 1998 and
$0.2 million at December 31, 1997.
Options grant the purchaser the right to buy or sell a security or enter into
a derivative transaction at a stated price within a stated period. The
Company's option contracts have terms of up to ten years. The amounts paid
for options purchased are amortized into investment income over the life of
the contract on a straight-line basis. Unamortized costs are included in
other investments on the Statutory Statement of Financial Position. Gains and
losses on these contracts are recorded at the expiration or termination date
and are deferred and amortized through the IMR over the remaining life of the
option contract. At December 31, 1998 and 1997, the Company had option
contracts with notional amounts of $961.2 million and $111.3 million,
respectively. The Company's credit risk exposure was limited to the
unamortized costs of $7.5 million and $2.2 million which had fair values of
$9.8 million and $2.3 million at December 31, 1998 and 1997, respectively.
FF-12
<PAGE>
Notes To Statutory Financial Statements (Continued)
Interest rate cap agreements grant the purchaser the right to receive the
excess of a referenced interest rate over a stated rate calculated by
reference to an agreed upon notional amount. Interest rate floor agreements
grant the purchaser the right to receive the excess of a stated rate over a
referenced interest rate calculated by reference to an agreed upon notional
amount. Amounts paid for interest rate caps and floors are amortized into
investment income over the life of the asset on a straight-line basis.
Unamortized costs are included in other investments on the Statutory
Statement of Financial Position. Amounts receivable and payable are accrued
as adjustments to investment income and included in the Statutory Statement
of Financial Position as investment and insurance amounts receivable. Gains
and losses on these contracts, including any unamortized cost, are recognized
upon termination and are deferred and amortized through the IMR over the
remaining life of the associated cap or floor agreement. At December 31,
1998, the Company had agreements with notional amounts of $355.0 million. The
Company's credit risk exposure on these agreements is limited to the
unamortized costs of $0.5 million. The fair values of these instruments were
$1.6 million at December 31, 1998. At December 31, 1997, the Company did not
have any open interest rate caps or floor agreements.
The Company utilizes asset swap agreements to reduce exposures, such as
currency risk and prepayment risk, built into certain assets acquired. Cross-
currency interest rate swaps allow investment in foreign currencies,
increasing access to additional investment opportunities, while limiting
foreign exchange risk. The net cash flows from asset and currency swaps are
recognized as adjustments to the underlying assets' investment income. Gains
and losses realized on the termination of these contracts adjusts the bases
of the underlying asset. Notional amounts relating to asset and currency
swaps totaled $1.0 million at December 31, 1997. The fair values of these
instruments were an unrealized gain of $0.1 million at December 31, 1997. As
of December 31, 1998, the Company did not have any open asset swap
agreements.
The Company enters into forward U.S. Treasury, Government National Mortgage
Association ("GNMA") and Federal National Mortgage Association ("FNMA")
commitments for the purpose of managing interest rate exposure. The Company
generally does not take delivery on forward commitments. These commitments
are instead settled with offsetting transactions. Gains and losses on forward
commitments are recorded when the commitment is closed and amortized through
the IMR over the remaining life of the asset. At December 31, 1998 and 1997,
the Company had U. S. Treasury, GNMA and FNMA purchase commitments which will
settle during the following year with contractual amounts of $1.0 million and
$3.0 million, respectively.
The Company is exposed to credit-related losses in the event of
nonperformance by counterparties to derivative financial instruments. This
exposure is limited to contracts with a positive fair value. The amounts at
risk in a net gain position were $14.2 million and $2.6 million at December
31, 1998 and 1997, respectively. The Company monitors exposure to ensure
counterparties are credit worthy and concentration of exposure is minimized.
Additionally, collateral positions have been obtained with counterparties
when considered prudent.
7. BUSINESS RISKS AND CONTINGENCIES
The Company is subject to insurance guaranty fund laws in the states in which
it does business. These laws assess insurance companies amounts to be used to
pay benefits to policyholders and claimants of insolvent insurance companies.
Many states allow these assessments to be credited against future premium
taxes. The Company believes such assessments in excess of amounts accrued
will not materially affect its financial position, results of operations or
liquidity.
The Company is involved in litigation arising in and out of the normal course
of its business. Management intends to defend these actions vigorously. While
the outcome of litigation cannot be foreseen with certainty, it is the
opinion of management, after consultation with legal counsel, that the
ultimate resolution of these matters will not materially impact its financial
position, results of operations or liquidity.
8. AFFILIATED COMPANIES
The relationship of the Company, its parent and affiliated companies as of
December 31, 1998 is illustrated below. Subsidiaries are wholly-owned by the
parent, except as noted.
FF-13
<PAGE>
Notes To Statutory Financial Statements (Continued)
Parent
------
Massachusetts Mutual Life Insurance Company
Subsidiaries of Massachusetts Mutual Life Insurance Company
-----------------------------------------------------------
CM Assurance Company
CM Benefit Insurance Company
C.M. Life Insurance Company
MassMutual Holding Company
MassMutual of Ireland, Limited
MML Bay State Life Insurance Company
MML Distributors, LLC
MassMutual Mortgage Finance, LLC
Subsidiaries of MassMutual Holding Company
------------------------------------------
GR Phelps & Co., Inc.
MassMutual Holding Trust I
MassMutual Holding Trust II
MassMutual Holding MSC, Inc.
MassMutual International, Inc.
MML Investor Services, Inc.
Subsidiaries of MassMutual Holding Trust I
------------------------------------------
Antares Capital Corporation - 99.4%
Charter Oak Capital Management, Inc. - 80.0%
Cornerstone Real Estate Advisors, Inc.
DLB Acquisition Corporation - 85.8%
Oppenheimer Acquisition Corporation - 89.36%
Subsidiaries of MassMutual Holding Trust II
-------------------------------------------
CM Advantage, Inc.
CM International, Inc.
CM Property Management, Inc.
HYP Management, Inc.
MMHC Investments, Inc.
MML Realty Management
Urban Properties, Inc.
MassMutual Benefits Management, Inc.
Subsidiaries of MassMutual International, Inc.
----------------------------------------------
Compensa de Seguros de Vida S.A. - 33.5%
MassLife Seguros de Vida (Argentina) S. A.
MassMutual International (Bermuda) Ltd.
Mass Seguros de Vida (Chile) S. A. - 33.5%
MassMutual International (Luxembourg) S. A.
MassMutual Holding MSC, Inc.
----------------------------
MassMutual Corporate Value Limited - 40.93%
9048 - 5434 Quebec, Inc.
1279342 Ontario Limited
Affiliates of Massachusetts Mutual Life Insurance Company
---------------------------------------------------------
MML Series Investment Fund
MassMutual Institutional Funds
Oppenheimer Value Stock Fund
FF-14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
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 (the "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
The Bylaws of C.M. Life provide for indemnification of directors and officers as
follows:
C.M. Life directors and officers are indemnified under its by-laws. No
indemnification is provided with respect to any liability to any entity which is
registered as an investment company under the Investment Company Act of 1940 or
to the security holders thereof, where the basis for such liability is willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of office.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of C.M.
Life pursuant to the foregoing provisions, or otherwise, C.M. Life has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, and is, therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by C.M. Life of
expenses incurred or paid by a director, officer or controlling person of C.M.
Life in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, C.M. Life 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 Securities Act of 1933 and will be
governed by the final adjudication of such issue.
REPRESENTATION UNDER SECTION 26(e)(2)(A) OF
THE INVESTMENT COMPANY ACT OF 1940
C.M. Life hereby represents that the fees and charges deducted under the
flexible premium adjustable variable life insurance policies described in this
Registration Statement in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by C.M. Life.
<PAGE>
CONTENTS OF FILING
This Registration Statement is comprised of the following documents:
The Facing Sheet.
Cross-Reference to items required by Form N-8B-2.
The Prospectus consisting of 77 pages.
The Undertaking to File Reports.
The Undertaking pursuant to Rule 484 under the Securities
Act of 1933.
Representation under Section 26(e)(2)(a) of the Investment
Company Act of 1940.
The Signatures.
Written Consents of the Following Persons:
1. PricewaterhouseCoopers, LLP, independent
accountant;
2. Counsel opining as to the legality of
securities being registered;
3. Opinion and consent of Craig Waddington,
FSA, MAAA, opining as to actuarial matters
contained in the Registration Statement.
The following Exhibits:
99.A The following Exhibits correspond to those required
by Paragraph A of the instructions as to Exhibits
in Form N-8B-2:
1. a. Copy of Resolution of Board of Directors
of C.M. Life establishing the Separate
Account./1/
b. Resolution of the Board of Directors
establishing the SVUL segment of the
Separate Account./2/
2. Not Applicable.
3. Form of Distribution Agreements:
a. Form of Distribution Servicing Agreement
between MML Distributors, LLC and C.M.
Life./3/
b. Form of Co-Underwriting Agreement
between MML Investors Services, Inc. and
C.M. Life./4/
4. Not Applicable.
5. Form of Survivorship Flexible Premium
Adjustable Variable Life Policy./2/
6. a. Certificate of Incorporation of C.M. Life./5/
b. By-Laws of C.M. Life./5/
7. Not Applicable.
8. Form of Participation Agreements.
a. Oppenheimer Variable Account Fund/6/
b. Variable Insurance Products Fund II/7/
c. T. Rowe Price Equity Series, Inc./8/
<PAGE>
d. American Century Variable Portfolios,
Inc./7/
9. Not Applicable.
10. Form of Application for a Survivorship
Flexible Premium Adjustable Variable Life
insurance policy./9/
11. Memorandum describing C.M. Life issuance,
transfer, and redemption procedures for the
Policy./10/
99.B. Opinion and Consent of Counsel as to the legality
of the securities being registered.
99.C. No financial statement will be omitted from the
Prospectus pursuant to Instruction 1(b) or (c) of
Part I.
99.D. Not Applicable.
99.E. Consent of PricewaterhouseCoopers, LLP
99.G. Opinion and consent of Craig Waddington, FSA, MAAA,
as to actuarial matters pertaining to the
securities being registered.
99.H. 1. Powers of Attorney/3/
2. Powers of Attorney for Edward M. Kline, John
Miller, Jr., James Miller and Isadore
Jermyn/11/
3. Power of Attorney for Robert J. O'Connell/12/
27. Not Applicable
- ---------
/1/ Incorporated by reference to the Initial Registration Statement No.
333-49457 filed with the Commission as an exhibit on April 6, 1999.
/2/ Incorporated by reference to this Initial Registration Statement filed
with the Commission as an exhibit on December 5, 1997.
/3/ Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement No. 33-91072 dated August 11, 1995.
/4/ Incorporated by reference to Post-Effective Amendment No. 1 to
Registration Statement No. 33-91072 dated May 1, 1996.
/5/ Incorporated by reference to Post-Effective Amendment No. 3 to
Registration Statement No. 33-91072 filed with the Commission as an
exhibit.
/6/ Incorporated by reference to Initial Registration Statement No. 333-22557
filed with the Commission as an exhibit on February 28, 1997.
/7/ Incorporated by reference to Pre-Effective Amendment No. 2 to Registration
Statement No. 333-41657 filed with the Commission as an exhibit on May 26,
1998.
/8/ Incorporated by reference to the Initial Registration Statement No.
333-65887 filed with the Commission as an exhibit on October 20, 1998.
/9/ Incorporated by reference to Pre-Effective Amendment No. 1 to this
Registration Statement No. 333-41667 filed with the Commission as an
exhibit on March 19, 1998.
/10/ Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement No. 333-49475 filed with the Commission as an exhibit on April
26, 1998.
/11/ Incorporated by reference to Post-Effective Amendment to Registration
Statement No. 333-61679 filed with the Commission as an exhibit on
December 21, 1998.
/12/ Filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant, C.M.
Life Variable Life Separate Account I, certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment No. 6 pursuant
to Rule 485(b) under the Securities Act of 1933 and has caused this
Post-Effective Amendment No. 6 to Registration Statement No. 333-41667 to be
signed on its behalf by the undersigned thereunto duly authorized, all in the
city of Springfield and the Commonwealth of Massachusetts, on the 22nd day of
April, 1999.
C.M. LIFE VARIABLE LIFE SEPARATE ACCOUNT I
C.M. LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Lawrence V. Burkett, Jr.*
------------------------------------
Lawrence V. Burkett, Jr., Director, President and
Chief Executive Officer
C.M. Life Insurance Company
/s/ Richard M. Howe On April 22, 1999, as Attorney-in-Fact pursuant to
- ---------------------- powers of attorney.
*Richard M. Howe
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 6 to Registration Statement No. 333-41667 has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Lawrence V. Burkett, Jr.* Director, President and Chief April 22, 1999
- ----------------------------- Executive Officer
Lawrence V. Burkett, Jr.
/s/ Edward M. Kline* Vice President and Treasurer April 22, 1999
- ----------------------------- (Principal Financial Officer)
Edward M. Kline
/s/ John M. Miller, Jr.* Vice President and Comptroller April 22, 1999
- ----------------------------- (Principal Accounting Officer)
John M. Miller Jr.
/s/ John B. Davies* Director April 22, 1999
- -----------------------------
John B. Davies
/s/ Stuart H. Reese* Director April 22, 1999
- -----------------------------
Stuart H. Reese.
/s/ Isadore Jermyn* Director April 22, 1999
- -----------------------------
Isadore Jermyn
/s/ James Miller* Director April 22, 1999
- -----------------------------
James Miller
/s/ Robert J. O'Connell* Director April 22, 1999
- -----------------------------
Robert J. O'Connell
/s/ Richard M. Howe On April 22, 1999, as Attorney-in-Fact pursuant to
- ----------------------------- powers of attorney.
*Richard M. Howe
</TABLE>
<PAGE>
EXHIBIT LIST
99.B. Opinion and Consent of Richard M. Howe, Esq.
99.E. Consent of PricewaterhouseCoopers, LLP
99.F. Opinion and Consent of Craig Waddington, FSA, MAAA
99.H. Powers of Attorney: Federal Securities Laws, for C.M. Life,
Robert J. O'Connell
<PAGE>
EXHIBIT 99.B.
(MASSMUTUAL LETTERHEAD)
April 23, 1999
C.M. Life Insurance Company
140 Garden Street
Hartford, CT 06154
RE: Re: Post-Effective Amendment No. 6 to Registration Statement 333-41667
-----------------------------------------------------------------------
filed on Form S-6
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of Post-Effective
Amendment No. 6 to Registration Statement 333-41667 under the Securities Act of
1933 for C.M. Life Insurance Company's ("C.M. Life") Survivorship Flexible
Premium Adjustable Variable Life Insurance Policies (the "Policies"). C.M. Life
Variable Life Separate Account I issues the Policies.
As 2nd Vice President & Associate General Counsel for MassMutual, I provide
legal advice to C.M. Life in connection with the operation of its variable
products. In such role I am familiar with the filing for the Policies. In so
acting, I have made such examination of the law and examined such records and
documents as in my judgment are necessary or appropriate to enable me to render
the opinion expressed below. I am of the following opinion:
1. C.M. Life is a valid and subsisting corporation, organized and operated
under the laws of the state of Connecticut and is subject to regulation by
the Connecticut Commissioner of Insurance.
2. C.M. Life Variable Life Separate Account I is a separate account validly
established and maintained by C.M. Life in accordance with Connecticut
law.
3. All of the prescribed corporate procedures for the issuance of the
Policies have been followed, and all applicable state laws have been
complied with.
I hereby consent to the use of this opinion as an exhibit to this filing.
Very truly yours,
/s/ Richard M. Howe
- -------------------
Richard M. Howe
2nd Vice President & Associate General Counsel
<PAGE>
EXHIBIT 99.E.
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
C.M. Life Insurance Company
We consent to the inclusion in this Post-Effective Amendment No. 6 to the
Registration Statement of C.M. Life Variable Life Separate Account I
(Survivorship Variable Universal Life segment) on Form S-6 (Registration No.
333-41667), of our report dated February 25, 1999, on our audits of C.M. Life
Variable Life Separate Account I (Survivorship Variable Universal Life segment),
and of our report dated February 25, 1999, on our audits of the statutory
financial statements of C.M. Life Insurance Company, which includes explanatory
paragraphs relating to the use of statutory accounting practices, which differ
from generally accepted accounting principles. We also consent to the reference
to our Firm under the caption "Experts."
PricewaterhouseCoopers LLP
Springfield, Massachusetts
April 27, 1999
<PAGE>
EXHIBIT 99.F.
(MASSMUTUAL LETTERHEAD)
April 23, 1999
C.M. Life Insurance Company
140 Garden Street
Hartford, CT 06154
Re: Post-Effective Amendment No. 6 to Registration Statement 333-41667
- -----------------------------------------------------------------------
Ladies and Gentlemen:
This opinion is furnished in connection with Post-Effective Amendment No. 6 to
Registration Statement 333-41667 for C.M. Life Insurance Company's Survivorship
Flexible Premium Adjustable Variable Life Insurance Policies (the "Policies")
under the Securities Act of 1933. The prospectus included in the filing
describes the Policies. I am familiar with the forms of the Policies and the
prospectus.
In my opinion, the illustrations of benefits under the Policies included in the
section entitled "Illustrations" in Appendix D of the prospectus, based on the
assumptions stated in the illustrations, are consistent with the provisions of
the respective forms of the Policies. The age selected in the illustrations is
representative of the manner in which the Policies operate.
I hereby consent to the use of this opinion as an exhibit to Post-Effective
Amendment No. 6 to Registration Statement 333-41667 and to the reference of my
name under the heading "Experts" in the prospectus.
Sincerely,
/s/ Craig Waddington
- --------------------
Craig Waddington, FSA, MAAA
Vice President and Actuary
<PAGE>
EXHIBIT 99.H
POWER OF ATTORNEY: FEDERAL SECURITIES LAWS
------------------------------------------
The Undersigned, Robert J. O'Connell, a member of the Board of Directors of C.M.
Life Insurance Company ("C.M. Life"), does hereby constitute and appoint
Lawrence V. Burkett, Jr., Thomas F. English, Richard M. Howe, Stephen R.
Bosworth, and Michael Berenson, and each of them individually, as his true and
lawful attorneys and agents.
Such attorneys and agents shall have full power of substitution and authority to
take any and all action and execute any and all instruments on the Undersigned's
behalf as a member of the Board of Directors of C.M. Life that said attorneys
and agents may deem necessary or advisable to enable C.M. Life to comply with
the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the Investment Company Act of 1940, as amended, (collectively, the
"Acts") and any rules, regulations, orders or other requirements of the
Securities and Exchange Commission (the "Commission") thereunder. This Power of
Attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of C.M. Life to any and all
registration statements and/or amendments thereto, reports, instruments or
documents filed or to be to be filed with the Commission under the Acts. Without
limiting the scope of this Power of Attorney, it shall apply to filings by or on
behalf of C.M. Life separate investment accounts currently in existence or
established in the future, including but not limited to those listed below.
C.M. Multi-Account A
C.M. Life Variable Life Separate Account I
Panorama Plus Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 17th day of March,
1999.
/s/ Robert J. O'Connell Ann F. Lomeli
- ---------------------------- -------------------
Robert J. O'Connell Witness
Member, Board of Directors
