<PAGE>
Pre-Effective Amendment No. 1 to
Registration No. 333-88493
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
INITIAL FILING TO
FORM S-6
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
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 Depositor's 140 Garden Street
principal executive offices: Hartford, CT 06154
D. Name and address of Agent Ann Lomeli
For Service of Process: Corporate Secretary
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.
____________ on ________________ pursuant to paragraph (b) of Rule 485.
____________ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
X on January 26, 2000 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
Policy
F. Approximate date of proposed as soon as practicable after the
Public offering: effective date of this Registration
Statement.
Pursuant to Rule 24-F-2 of the Investment Company Act of 1940, Registrant
registers an indefinite number or amount of its variable life insurance
contracts under the Securities Act of 1933 pursuant to Rule 24F-2 under the
Investment Company Act of 1940. The Rule 24F-2 notice for Registrant's fiscal
year ending December 31, 1998 was filed on February 25, 1999.
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall become effective in accordance with Section 8(a) of the Securities Act of
1933 or until this Registration Statement shall become effective on such date as
the Commission, acting pursuant to said section, may determine.
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. Of
Form N-8B-2 Caption
- ----------- -------
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.
2
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
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.
3
<PAGE>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy*
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 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 divisions of the
Separate Account offered under this policy and a Guaranteed Principal Account
(the "GPA"). Each division invests in shares of a designated investment fund.
Currently, the funds listed at right are available under this policy.
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 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.
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.
*Title may vary in some jurisdictions.
MML Series Investment Fund
- --------------------------
MML Equity Fund
MML Money Market Fund
MML Managed Bond Fund
MML Blend Fund
MML Equity Index Fund
MML Small Cap Value Equity Fund
MML Growth Equity Fund
MML Small Cap Growth Equity Fund
Oppenheimer Variable Account Funds
- ----------------------------------
Oppenheimer Aggressive Growth Fund/VA
Oppenheimer Global Securities Fund/VA
Oppenheimer Capital Appreciation Fund/VA
Oppenheimer Strategic Bond Fund/VA
Oppenheimer Main Street Growth & Income Fund/VA
Oppenheimer High Income Fund/VA
Oppenheimer Bond Fund/VA
Variable Insurance Products Fund II
- -----------------------------------
Fidelity's VIP II Contrafund(R) Portfolio
T. Rowe Price Equity Series, Inc.
- ---------------------------------
T. Rowe Price Mid-Cap Growth Portfolio
American Century Variable Portfolios, Inc.
- ------------------------------------------
American Century's VP Income & Growth Fund
BT Insurance Funds
- ------------------
Bankers Trust's Small Cap Index
Goldman Sachs Variable Insurance Trust
- --------------------------------------
Goldman Sachs Capital Growth Fund
Janus Aspen Series
- ------------------
Janus Aspen Capital Appreciation Portfolio
Janus Aspen Worldwide Growth Portfolio
Templeton Variable Product Series Fund
- --------------------------------------
Templeton International Fund
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.
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
<S> <C>
I. INTRODUCTION.............................................................3
II. DETAILED DESCRIPTION OF POLICY FEATURES
Purchasing the Policy...................................................7
Death Benefit...........................................................7
Premiums................................................................9
Transfers..............................................................10
Policy Termination and Reinstatement...................................11
Charges and Deductions.................................................12
Deductions from Premiums...............................................12
Monthly Charges Against the Account Value..............................12
Daily Charges Against the Separate Account.............................13
Surrender Charges......................................................13
Other Charges..........................................................13
Special Circumstances..................................................13
Account Value and Net Surrender Value..................................13
Policy Loan Privilege..................................................15
III. INVESTMENT OPTIONS
The Guaranteed Principal Account.......................................17
The Separate Account...................................................17
The Funds..............................................................18
Fund Profiles..........................................................18
The Investment Advisers................................................21
IV. OTHER POLICY INFORMATION
When We Pay Proceeds...................................................23
Payment Options........................................................23
Beneficiary............................................................24
Assignment.............................................................24
Limits on Our Right to Challenge the Policy............................24
Error of Age or Gender.................................................24
Suicide................................................................24
Additional Benefits You Can Get by Rider...............................25
Sales and Other Agreements.............................................26
V. OTHER INFORMATION
C.M. Life and MassMutual...............................................27
Annual Reports.........................................................27
Federal Income Tax Considerations......................................27
Your Voting Rights.....................................................31
Reservation of Rights..................................................31
Service Agreement......................................................31
Bonding Arrangement....................................................31
Legal Proceedings......................................................32
Experts................................................................32
Appendix A
Definition of Terms....................................................33
Appendix B
Examples of Death Benefit Option Changes...............................35
Appendix C
Rates of Return........................................................37
Appendix D
Illustration of Death Benefits, Net Surrender Values, and
Accumulated Premiums.................................................41
Appendix E
Directors of C.M. Life.................................................54
Principal Officers.....................................................55
Appendix F
Unaudited Interim Financial Statements................................F-1
Financial Statements.................................................FF-1
</TABLE>
2 Table of Contents
<PAGE>
I. Introduction
Please refer to Appendix A, 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 variations 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 that the policy will remain in force.
The policy allows you to vary premium payments with 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 interest periodically at
rates that exceed the guaranteed rate.
The following diagram summarizes how the policy works.
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
the percentages you have
chosen (graphic arrow to
"Account Value")
Investment Earnings
Each day we credit or debit the
investment earnings or losses of the
divisions of the Separate Account
less fund investment management fees
and Separate Account fees.
(graphic arrow to "Account Value")
We also credit interest on values
in the GPA.
Death Benefit
You have a choice of three Death
Benefit Options. You can change the
Option at a later date.
------------------------------------
Account Value
You determine how the account
value is allocated among the
available investment options.
(graphic arrows to "Account
Value Charges", "Owner Access
to Account Value", "Death
Benefit", "Policy Surrender")
------------------------------------
Account Value Charges
Each month we deduct charges
for administrative, insurance, and rider
expenses.
Access to Account Value
While Policy In Force
You may access account values
through loans and withdrawals after
the first Policy Year.
Policy Surrender
You may surrender your policy at any
time. If you surrender during the
first 14 years after Policy Date or
after any increase in Face Amount is
effective, we deduct a surrender
charge from any amount we pay you.
Detailed Description of Policy Features 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 All Coverage Years: 8.5% of premium All Coverage Years: 10.0% of premium
up to Premium Expense Factor; 5.0% up to Premium Expense Factor; 7.5% of
of premium over Premium Expense premium over Premium Expense Factor.
Factor.
- --------------------------------------------------------------------------------------------------------------------
Administrative Charge Policy Years 1-10: $12 per month per All Policy Years: $12 per month per
policy. policy.
Policy Years 11+: $8 per month per
policy.
- --------------------------------------------------------------------------------------------------------------------
Face Amount Charge A rate that varies by the Issue A rate that varies by the Issue Ages,
Ages, genders, and risk genders, and risk classifications of
classifications of the Insureds, and the Insureds, and by the year of
by the year of coverage. The coverage. The monthly rate, per
monthly rate, per $1,000 of Face $1,000 of Face Amount, ranges from:
Amount, ranges from: Coverage Years 1-10: $0.06 to $0.18
Coverage Years 1-10: $0.03 to $0.15 Coverage Years 11+: $0.00
Coverage Years 11+: $0.00
- --------------------------------------------------------------------------------------------------------------------
Insurance Charges A per-thousand rate applied to the For standard risks, the guaranteed
insurance risk each month. The rate cost of insurance rates are based on
varies by the Issue Ages, genders, the Commissioners 1980 Standard
and risk classifications of the Ordinary (CSO) Mortality Tables.
Insureds, and by the year of
coverage.
- --------------------------------------------------------------------------------------------------------------------
Mortality and Expense Risk All Policy Years: 0.25%, on an All Policy Years: 0.60%, on an annual
Charge annual basis, of daily net asset basis, of daily net asset value of
value of the Separate Account. the Separate Account.
- --------------------------------------------------------------------------------------------------------------------
Investment Management Fees and (See separate table on next page.)
Other Expenses
- --------------------------------------------------------------------------------------------------------------------
Loan Rate Expense Charge Policy Years 1-10: 0.50% of loaned All Policy Years: 0.80% of loaned
amount. amount.
Policy Years 11+: 0.25% of loaned
amount.
- --------------------------------------------------------------------------------------------------------------------
Withdrawal Fee $25 $25
- --------------------------------------------------------------------------------------------------------------------
Surrender Charges Coverage Years 1-5: Based on the Coverage Years 1-5: Based on the
(Taken upon policy surrender; Target Premium (but not to exceed Target Premium (but not to exceed $45
also, a partial surrender $45 per thousand of Face Amount). per thousand of Face Amount).
charge may be taken upon Coverage Years 6-14: The preceding Coverage Years 6-14: The preceding
decrease in Face Amount) year surrender charge reduced by 10% year surrender charge reduced by 10%
of the first-year surrender charge. of the first-year surrender charge.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The Premium Expense Factor referenced above is used to determine the premium
expense charge and sales compensation. The Premium Expense Factor is shown in
the policy; it can be quoted upon request before the policy is issued. Examples
of current Premium Expense Factors per $1,000 of Face Amount, for a Male and
Female, both Non-Tobacco risk class, are: Both Age 25 - $2.48; Both Age 55 -
$12.45; Both Age 85 - $58.83. The Premium Expense Factor 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 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 Non-Tobacco risk class, are: Both Age 25 - $2.48; Both Age
55 - $12.45; Both Age 85 - $58.83. 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 Detailed Description of Policy Features
<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.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Total Fund
Other Operating
Fund Name Management Fees Expenses Expenses
- ------------------------------------ ----------------- ---------- ---------------
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MML Equity Fund 0.37%/1/ 0.00%/1/ 0.37%
- -------------------------------------------------------------------------------------------------------
MML Money Market Fund 0.46% 0.03% 0.49%
- -------------------------------------------------------------------------------------------------------
MML Managed Bond Fund 0.45% 0.03% 0.48%
- -------------------------------------------------------------------------------------------------------
MML Blend Fund 0.37%/1/ 0.00%/1/ 0.37%
- -------------------------------------------------------------------------------------------------------
MML Equity Index Fund 0.40% 0.20% 0.60%
- -------------------------------------------------------------------------------------------------------
MML Small Cap Value Equity Fund 0.67% 0.11%/1/ 0.78%
- -------------------------------------------------------------------------------------------------------
MML Growth Equity Fund 0.80% 0.11%/1/ 0.91%/2/
- -------------------------------------------------------------------------------------------------------
MML Small Cap Growth Equity Fund 1.08% 0.11%/1/ 1.19%/2/
- -------------------------------------------------------------------------------------------------------
Oppenheimer Aggressive Growth Fund/VA 0.69% 0.02% 0.71%
- -------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 0.68% 0.06% 0.74%
- -------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA/3/ 0.72% 0.03% 0.75%
- -------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA 0.74% 0.06% 0.80%
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Growth & Income Fund/VA 0.74% 0.05% 0.79%
- -------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA 0.74% 0.04% 0.78%
- -------------------------------------------------------------------------------------------------------
Oppenheimer Bond Fund/VA 0.72% 0.02% 0.74%
- -------------------------------------------------------------------------------------------------------
VIP II Contrafund(R) Portfolio 0.59% 0.11%/4/ 0.70%/4/
- -------------------------------------------------------------------------------------------------------
T. Rowe Price Mid-Cap Growth Portfolio 0.85% 0.00% 0.85%
- -------------------------------------------------------------------------------------------------------
American Century's VP Income & Growth Fund N/A N/A 0.70%
- -------------------------------------------------------------------------------------------------------
Bankers Trust's Small Cap Index 0.35% 0.10% 0.45%/5/
- -------------------------------------------------------------------------------------------------------
Goldman Sachs Capital Growth 0.75% 0.15% 0.90%
- -------------------------------------------------------------------------------------------------------
Janus Aspen Capital Appreciation Portfolio 0.70% 0.22% 0.92%/6/
- -------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio 0.65% 0.07% 0.72%/6/
- -------------------------------------------------------------------------------------------------------
Templeton International 0.69% 0.42% 1.11%
- -------------------------------------------------------------------------------------------------------
</TABLE>
/1/ MassMutual has agreed to bear the expenses (other than the management fees,
interest, taxes, brokerage commissions and extraordinary expenses) in excess of
.11% of the average daily net asset values through April 30, 2000 for MML Equity
Fund, MML Blend Fund, MML Small Cap Value Equity Fund, MML Growth Equity Fund
and MML Small Cap Growth Equity Fund. Such agreement cannot be terminated
unilaterally by MassMutual. The expenses shown for the MML Growth Equity Fund
and MML Small Cap Growth Equity Fund include this reimbursement. If not
included, the other expenses for these Funds in 1999 are estimated to be 0.25%,
for the MML Growth Equity Fund and 0.25% for the MML Small Cap Growth Equity
Fund. We do not expect that we will be required to reimburse any expenses of the
MML Equity Fund, MML Blend Fund and MML Small Cap Value Equity Fund in
1999.
Detailed Description of Policy Features 5
<PAGE>
/2/ The MML Growth Equity Fund and the MML Small Cap Growth Equity Fund began
operations in 1999 and therefore, had no operating expenses as of December 31,
1998. The investment manager estimates that the total operating expenses for
these Funds in 1999 will be as shown.
/3/ Prior to May 1, 1999, the Oppenheimer Capital Appreciation Fund/VA was
called the Oppenheimer Growth Fund. Prior to May 1, 1998, the Oppenheimer
Aggressive Growth Fund/VA was called the Oppenheimer Capital Appreciation Fund.
/4/ 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. With such reductions, the Other
Expenses became 0.07%, decreasing the Total Fund Operating Expenses to 0.66%.
/5/ Bankers Trust Company has voluntarily undertaken to waive its management fee
and reimburse the BT Small Cap Index Fund certain expenses so that the total
fund expenses for the BT Small Cap Index Fund will not exceed 0.45%. Bankers
Trust Company may not recoup any of its waived investment advisory fees. Such
waivers by Bankers Trust Company should stay in effect for at least 12 months.
Without such waivers and reimbursements, the total fund expenses for the BT
Small Cap Index Fund would have been 1.58%.
/6/ Janus Capital has agreed to reduce the management fee of the Janus Aspen
Worldwide Growth Portfolio and the Janus Aspen Capital Appreciation Portfolio to
the level of their corresponding Janus retail funds. Other waivers, if
applicable, are first applied against the management fee and then against other
expenses. Janus Capital has agreed to continue the waivers and fee reductions
until at least the next annual renewal of the advisory agreement. Without such
reductions, the total fund expenses for the Janus Aspen Worldwide Growth
Portfolio and the Janus Aspen Capital Appreciation Portfolio would have been
0.74% and 0.97%, respectively.
(See the funds' prospectuses for more information.)
6 Detailed Description of Policy Features
<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
$100,000. 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 purchased in Montana are "unisex"; that
is, the policy values do not vary by the genders of the Insureds. Policies
purchased elsewhere as part of an employee benefit plan also may have policy
values that do not vary by the genders of the Insureds. 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 the percentage varies only by
the Attained Age of the younger Insured. The percentages are shown in the
policy.
Detailed Description of Policy Features 7
<PAGE>
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
better 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 $100,000 as a result of the change;
2. the Attained Age of the younger Insured has reached 85, or the older has
reached 90; 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 the 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 approval 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 may not increase the Face Amount of
the policy after the younger Insured reaches Attained Age 85 or, if earlier,
after the older Insured reaches Attained Age 90.
If you increase the policy Face Amount, the monthly charges will increase.
Decreases in Face Amount. After the first Policy Year, you may decrease the
policy Face Amount at any time (except during the 12-month
8 Detailed Description of Policy Features
<PAGE>
period following a Face Amount increase). You may not decrease the Face Amount
if the decrease would result in a Face Amount of less than $100,000.
If you decrease the Face Amount, a partial surrender charge may apply. (See
Decrease in Face Amount in the Surrender Charges section of this Part.) We will
deduct partial 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; then
(b) the Face Amounts of the next most recent increases successively; and last
(c) the Initial Face Amount.
If you decrease the Face Amount, the monthly charges deducted from the account
value will decrease.
If you decrease the Face Amount, the policy may become a "modified endowment
contract" under federal tax law. Consult your tax adviser. (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
amount 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 request 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 that
the policy will remain in force. To keep the policy in force, you must either
have a sufficient account 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 Premium Expense Factor 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
(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. In
Detailed Description of Policy Features 9
<PAGE>
this case, you may instead increase the Face Amount, by meeting the requirements
for the increase, so that the premium payment is within the increased premium
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 first Valuation Date after the end of the Right To
Return period;
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 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 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 have neither
. allocated net premiums to the GPA , nor
. transferred any money into the GPA during these three Years; then
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 case, 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.
10 Detailed Description of Policy Features
<PAGE>
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. We reserve the right to increase this limit.
In addition, we may need to further limit access to divisions of the Separate
Account, so the policy will continue to qualify as life insurance. See Investor
Control, under Federal Income Tax Considerations, in Section V. Other
Information, for more information.
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 account 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 account value , less any outstanding policy debt, 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.
Safety Test. The safety test allows you to keep the policy in force, regardless
of the account 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. Even
if the account 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.
Detailed Description of Policy Features 11
<PAGE>
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
. the younger Insured's Attained Age exceeds 99; 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. (Monthly charges for the period before
reinstatement are not recovered.) 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 adviser.
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 the Premium
Expense Factor than for premium payments over the Premium Expense Factor. The
Premium Expense Factor is based on the Issue Ages, genders, and risk
classifications of the Insureds.
If you have increased the policy Face Amount, we allocate premium payments to
the Initial Face Amount and to all increases based on the relative size of the
Premium Expense Factor for each.
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.
Monthly charges beyond Attained Age 99 of the younger Insured are zero.
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
insurance risk under the policy, multiplied by the monthly insurance charge rate
for that policy month. We determine the insurance risk on the first day of each
policy month. It is the amount by which the
12 Detailed Description of Policy Features
<PAGE>
death benefit (discounted at the monthly equivalent of 3% per year) exceeds the
account value.
Insurance rates are based on the Issue Ages, genders, and risk classes of the
Insureds, and the year of coverage. We currently place Insureds into the
following five standard rate classes: Ultra Preferred Non-Tobacco, Select
Preferred Non-Tobacco, Non-Tobacco, Select Preferred Tobacco, and Tobacco. We
also have rate classes for less-favorable 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 Non-Tobacco Insureds than for
Ultra Preferred Non-Tobacco Insureds.
Rider Charge. You can obtain additional benefits by requesting riders on your
policy. The monthly rider charges include any charges for 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 fund incurs investment
management fees and other expenses. These are deducted from the fund.
Surrender Charges
If you fully surrender the policy or decrease the Face Amount during the first
14 Policy Years, we will take a surrender charge against the account value. This
also applies during the first 14 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 five years
of coverage is based on the Target Premium. Then, 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 fifteenth and later years.
Decrease in Face Amount. If you decrease your policy Face Amount, we cancel all
or a part of your Face Amount segments. We may take a partial surrender charge
from the account value. The partial surrender charge is equal to the surrender
charge for each canceled Face Amount segment plus a pro rata surrender charge
for any decreased segment. But if the partial surrender charge 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 decrease.
After a Face Amount decrease, we reduce the remaining surrender charge for the
policy by the amount of the partial surrender charge taken.
Other Charges
Withdrawal Fee. If you make a withdrawal from your policy, we deduct $25 from
the amount you withdraw. This fee is guaranteed not to exceed $25.
Loan Interest Rate Expense Charge. This charge reimburses us for administering
policy 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
from 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.
Detailed Description of Policy Features 13
<PAGE>
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
. any policy debt.
You may surrender your policy by written request. 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 $100,000.
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 request
in good order. We will process it within seven days. The withdrawal amount you
wish taken from each division of the Separate Account
14 Detailed Description of Policy Features
<PAGE>
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. We reserve
the right to allow loans during the first Policy Year. 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 (which includes 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 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, the policy terminates
without value.
Loan Interest Charged. At the time of application for the policy, you may select
a fixed loan interest rate of 4% 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; and
(ii) 4%.
If the maximum rate is less than 1/2% higher than the rate in effect for the
preceding year, we will not increase the rate. If the maximum rate is at least
1/2% lower than the rate in effect for the preceding year, we will decrease the
rate.
Interest on policy loans accrues daily and becomes part of the policy debt as it
accrues. It is due on each Policy Anniversary Date. 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 a 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 net premium allocation then in
effect. You must clearly identify loan repayments as such, or we will consider
the payments premium payments.
We will deduct any outstanding policy debt from the proceeds payable at the
second death or upon the surrender of the policy.
Detailed Description of Policy Features 15
<PAGE>
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 a rate
equal to the policy loan rate less the loan interest rate expense charge rate.
We guarantee this charge rate will not exceed 0.80%. Currently, the charge rate
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 adviser.
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.
16 Detailed Description of Policy Features
<PAGE>
III. Investment Options
The Guaranteed Principal Account
You may allocate some or all of the net premiums to the Guaranteed Principal
Account ("GPA"). You also may transfer some or all of the account value in the
divisions of the Separate Account to the GPA. Neither our general investment
account nor the GPA is registered under federal or state securities laws.
Amounts allocated to the GPA become part of our general investment account. Our
general investment 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 investment account.
We guarantee amounts allocated to the GPA in excess of any policy loan will
accrue interest daily at an effective annual rate at least equal to 3%. For
amounts in the GPA equal to any policy loan, 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
0.80% per year. Interest will be credited at this rate regardless of the actual
investment experience of the GPA. In addition to the guaranteed minimum interest
rate, we will declare a guaranteed minimum calendar-year rate each December for
the upcoming calendar year. Interest we credit during any calendar year will not
be less than would be credited using this guaranteed minimum calendar-year 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 23 divisions.
Each division invests in shares of a designated investment fund as follows:
- --------------------------------------------------------------------------------
Division Fund
- --------------------------------------------------------------------------------
MML Equity MML Equity Fund
- --------------------------------------------------------------------------------
MML Money Market MML Money Market Fund
- --------------------------------------------------------------------------------
MML Managed Bond MML Managed Bond Fund
- --------------------------------------------------------------------------------
MML Blend MML Blend Fund
- --------------------------------------------------------------------------------
MML Equity Index MML Equity Index Fund
- --------------------------------------------------------------------------------
MML Small Cap Value Equity MML Small Cap Value Equity Fund
- --------------------------------------------------------------------------------
MML Growth Equity MML Growth Equity Fund
- --------------------------------------------------------------------------------
MML Small Cap Growth Equity MML Small Cap Growth Equity Fund
- --------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Oppenheimer Capital Appreciation
Fund/VA
- --------------------------------------------------------------------------------
Oppenheimer Aggressive Growth Oppenheimer Aggressive Growth
Fund/VA
- --------------------------------------------------------------------------------
Oppenheimer Global Securities Oppenheimer Global Securities
Fund/VA
- --------------------------------------------------------------------------------
Oppenheimer Strategic Bond Oppenheimer Strategic Bond
Fund/VA
- --------------------------------------------------------------------------------
Oppenheimer Main Street Growth & Oppenheimer Main Street Growth &
Income Income Fund/VA
- --------------------------------------------------------------------------------
Oppenheimer High Income Oppenheimer High Income Fund/VA
- --------------------------------------------------------------------------------
Oppenheimer Bond Oppenheimer Bond Fund/VA
- --------------------------------------------------------------------------------
Fidelity VIP II Contrafund Fidelity's VIP II Contrafund(R)
Portfolio
- --------------------------------------------------------------------------------
T. Rowe Price Mid-Cap Growth T. Rowe Price Mid-Cap Growth
Portfolio
- --------------------------------------------------------------------------------
American Century VP Income & American Century's VP Income &
Growth Growth Fund
- --------------------------------------------------------------------------------
Bankers Trust Small Cap Index Bankers Trust's Small Cap Index
Fund
- --------------------------------------------------------------------------------
Goldman Sachs Capital Growth Goldman Sachs Capital Growth Fund
- --------------------------------------------------------------------------------
Janus Aspen Capital Appreciation Janus Aspen Capital Appreciation
Portfolio
- --------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Janus Aspen Worldwide Growth
Portfolio
- --------------------------------------------------------------------------------
Templeton International Templeton International Fund
- --------------------------------------------------------------------------------
Investment Options 17
<PAGE>
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 investment account any assets that exceed anticipated obligations of
the Separate Account.
The Funds
The investment funds available through the policy are offered by nine investment
companies and trusts. They each provide an investment vehicle for the separate
investment accounts of variable life policies and variable annuity contracts
offered by companies such as C.M. Life. Shares of these organizations are not
offered to the general public.
The assets of certain variable annuity separate accounts offered by C.M. Life
and by other affiliated and non-affiliated life insurers are invested in shares
of these funds. Because these separate accounts are invested in the same
underlying funds, it is possible that conflicts could arise between policy
owners and owners of the variable annuity contracts.
The board of trustees or board of directors of each fund will follow procedures
developed to determine whether conflicts have arisen. If a conflict exists, the
board will notify the insurers and will take appropriate action to eliminate the
conflict.
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.
Some of the funds offered are similar 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, the 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.
Fund Profiles
Following is 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 the funds and their investment objectives is contained in
the accompanying prospectuses; they include information on the risks associated
with the investments, the investment techniques, and the deduction of expenses
for each of the funds.
MML Series Investment Fund ("MML Trust")
The MML Trust, managed by MassMutual, was organized as a Massachusetts business
trust on December 19, 1984. All eight of the diversified investment portfolios
of the Trust are available under this policy.
MML Equity Fund
Sub-adviser: David L. Babson & Company, Inc.
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.
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.
18 Investment Options
<PAGE>
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.
MML Blend Fund
Sub-adviser: David L. Babson & Company, Inc. (equity segment of the 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.
MML Equity Index Fund
Sub-adviser: Mellon Equity Associates, LLP
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 ("S&P"), a division
of The McGraw-Hill Companies, or The McGraw Hill Companies, Inc. Standard &
Poor's makes no representation regarding the advisability of investing in the
fund.)
MML Small Cap Value Equity Fund
Sub-adviser: David L. Babson & Company, Inc
The MML Small Cap Value Equity Fund seeks long-term growth of capital and income
by investing primarily in small company stocks.
MML Growth Equity Fund
Sub-adviser: Massachusetts Financial Services Company
The MML Growth Equity Fund seeks growth of capital and income over time by
investing primarily in equity securities of large companies with long-term
growth potential.
MML Small Cap Growth Equity Fund
Sub-advisers: J. P. Morgan Investment Management, Inc. (50%), and Waddell & Reed
Investment Management Company (50%)
The MML Small Cap Growth Equity Fund seeks growth of capital over time by
investing primarily in equity securities of smaller and medium-size companies
with long-term growth potential.
Oppenheimer Variable Account Funds ("Oppenheimer Trust")
The Oppenheimer Trust is managed by OppenheimerFunds, Inc. The Trust consists of
10 separate funds, seven of which are offered under this policy.
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.
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.
Oppenheimer Global Securities Fund/VA
Oppenheimer Global Securities Fund/VA is a mutual fund that seeks long-term
capital appreciation by investing mainly in common stocks, and can also buy
other equity securities, including preferred stocks and securities convertible
into common stock.
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.
Oppenheimer Main Street Growth & Income Fund/VA
The Oppenheimer Main Street Growth & Income Fund/VA seeks total return (which
includes growth in the value of its shares as well
Investment Options 19
<PAGE>
as current income) from equity and debt securities.
Oppenheimer High Income Fund/VA
The Oppenheimer High Income Fund/VA seeks a high level of current income. The
Fund invests in unrated securities or high risk securities in the lower rating
categories, commonly known as "junk bonds," which are subject to a greater risk
of loss of principal and non payment of interest than higher-rated securities.
Oppenheimer Bond Fund/VA
The Oppenheimer Bond Fund/VA seeks a high level of current income. The Fund
seeks capital growth when consistent with its primary objective. The Fund will,
under normal market conditions, invest at least 65% of its total assets in
investment grade securities.
Variable Insurance Products Fund II
Variable Insurance Products Fund II ("Fidelity's 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(R) Portfolio, is available under this policy.
Fidelity's VIP II Contrafund(R) 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.
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.
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.
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 Fund, is offered under this policy.
American Century's VP Income & Growth Fund
American Century's VP Income & Growth Fund 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.
BT Insurance Funds Trust
BT Insurance Funds Trust ("BT Insurance Funds") was organized as a Massachusetts
business trust in 1996. Bankers Trust' Small Cap Index Fund is a separate series
of the BT Insurance Funds Trust.
Bankers Trust's Small Cap Index Fund
Bankers Trust's Small Cap Index Fund seeks to match, before expenses, the risk
and return characteristics of the Russell 2000 Index. The Fund will invest
primarily in common stocks of companies that comprise the Russell 2000 Index, in
approximately the same weightings as the Russell 2000 Index. The Fund may also
use stock index futures and options.
(The Russell 2000 index is a widely accepted benchmark of small company stock
performance. It is a model, not an actual portfolio, and is a subset of the
Russell 3000 Index. The Russell 2000 tracks the 2000 smallest companies in the
Russell 3000. As of December 31, 1998, the weighted average market
capitalization of the companies in the Russell 2000 was $0.88 billion. That
compares to $72 billion for the companies in the Russell 3000.)
20 Investment Options
<PAGE>
Goldman Sachs Variable Insurance Trust.
The Goldman Sachs VIT Variable Insurance Trust is an open-end, management
investment company, organized in Delaware in September, 1997. The Goldman Sachs
Capital Growth Fund is a separate series of shares of the Trust.
Goldman Sachs Capital Growth
The Goldman Sachs Capital Growth Fund seeks long-term growth of capital through
diversified investments in equity securities of companies that are considered to
have long-term capital appreciation potential.
Janus Aspen Series.
Janus Aspen is an open-end, management investment company. Janus Aspen Worldwide
Growth Portfolio and Janus Aspen Capital Appreciation Portfolio are each
separate portfolios of the Janus Aspen Series.
Janus Aspen Capital Appreciation Portfolio
The Janus Aspen Capital Appreciation Portfolio seeks long-term growth of
capital. The Portfolio invests primarily in common stocks selected for their
growth potential. The Portfolio may invest in companies of any size, from
larger, well-established companies to smaller, emerging growth companies.
Janus Aspen Worldwide Growth Portfolio
The Janus Aspen Worldwide Growth Portfolio seeks long-term growth of capital in
a manner consistent with the preservation of capital. The Portfolio invests
primarily in common stocks of companies of any size throughout the world.
Templeton Variable Products Series Fund ("Templeton Fund").
The Templeton Fund is an open-end, management investment company organized as
a Massachusetts business trust on February 25, 1988. The Templeton International
Fund is a separate series of the Templeton Fund.
Templeton International Fund - Class 2 Shares.
The Templeton International Fund seeks long-term capital growth. The Fund
invests primarily in a diversified portfolio of non-U.S. common stocks.
The Investment Advisers
MassMutual serves as investment manager of each of the MML Trust funds under
investment management agreements. David L. Babson & Company, Inc. ("Babson"),
which is a controlled subsidiary of MassMutual, is the investment sub-adviser to
the MML Equity Fund, the equity sector of the MML Blend Fund, and 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 Associates,
LLP ("Mellon Equity"). Mellon Equity manages the investment and reinvestment of
the assets of the MML Equity Index Fund.
MassMutual has entered into a sub-advisory agreement with Massachusetts
Financial Services Company ("MFS"). MFS manages the investment of the MML Growth
Equity Fund.
MassMutual has entered into a sub-advisory agreement with J. P. Morgan
Investment Management, Inc. ("J.P. Morgan") and Waddell & Reed Investment
Management Company ("Waddell & Reed"). J. P. Morgan and Waddell & Reed each
manage 50% of the portfolio of MML Small Cap Growth Equity 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 four million shareholder accounts. OFI is located at Two
World Trade 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
Investment Options 21
<PAGE>
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, New
York 10005, acts as custodian for the MML Trust. Bank of New York, with its home
office at One Wall Street, New York, New York 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(R) 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(R) 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(R) 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's VP Income & Growth Fund. Under the laws of the state of
Maryland, the company's 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.
Bankers Trust Company, with headquarters at 130 Liberty Street, New York, New
York 10006, acts as the investment adviser of BT Insurance Funds Trust.
Bankers Trust is a wholly owned subsidiary of Deutsche Bank AG.
Deutsche Bank AG is a major global banking institution that is engaged in a wide
range of financial services, including investment management, mutual funds,
retail and commercial banking, investment banking and insurance. Deutsche Bank
AG, as Bankers Trust's parent company, controls its operations as investment
adviser.
Goldman Sachs Asset Management ("GSAM"), a separate operating division of
Goldman, Sachs & Co. ("Goldman Sachs"), serves as investment adviser to the
Goldman Sachs Capital Growth Fund. Goldman Sachs registered as an investment
adviser in 1991. GSAM is located at One New York Plaza, New York, New York
10004.
The custodian for each fund of the Goldman Sachs Variable Insurance Trust is
State Street Bank and Trust Company. It is located at 1776 Heritage Drive, North
Quincy, Massachusetts 02110.
Janus Aspen Series is an open-end, management investment company. Janus Aspen
Capital Appreciation Portfolio and Janus Aspen Worldwide Growth Portfolio are
each separate portfolios of the Janus Aspen Series.
Janus Capital is the investment adviser to the Janus Aspen Capital Appreciation
Portfolio and the Janus Aspen Worldwide Growth Portfolio. Janus Capital is
located at 100 Fillmore Street, Denver, Colorado 80206-4928.
The Templeton Variable Products Fund ("Templeton Fund") is an open-end
management investment company organized as a Massachusetts business trust on
February 25, 1988. The Templeton International Fund is a separate series of the
Templeton Fund.
Templeton Investment Counsel, Inc. ("TIC") is the investment manager of the
Templeton International Fund. TIC is located at 500 East Broward Boulevard, Fort
Lauderdale, Florida 33394-3091.
22 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.
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
Installments Equal monthly payments for any period selected, up to 30
for a Specified years. The amount of each payment depends on the total
Period 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 Fixed amount payments. The total amount paid during the
Specified Amount 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.
- --------------------------------------------------------------------------------
</TABLE>
Other Policy Information| 23
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
Life Income Equal monthly payments based on the life of a named person.
with Payments We will make payments until the total amount paid equals the
Guaranteed for amount applied, whether the named person lives until all
Amount Applied 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 Monthly payments based on the lives of two named persons. We
Income with will make payments at the initial level while both are
Reduced Payments living, or for 10 years if longer. When one dies (but not
to Survivor 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.
- --------------------------------------------------------------------------------
</TABLE>
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
24 |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.
Survivorship Term Rider. This rider provides level survivorship insurance on the
lives of the policy Insureds. The insurance is convertible for a limited period
of time. The Rider Face Amount must be at least $100,000 and must not exceed two
times the Face Amount under the base policy.
The Rider Face Amount may be increased or decreased. An increase requires
evidence of insurability and the increase must not raise the Rider Face Amount
to more than two times the policy Face Amount. The minimum increase amount is
$50,000. A decrease may not bring the Rider Face Amount below $100,000. If the
policy Face Amount decreases to an amount below one-half the Rider Face Amount,
the Rider Face Amount will be decreased to an amount equal to two times the
reduced policy Face Amount.
While both Insureds are living, coverage under the rider can be fully or
partially converted until the earlier of Attained Age 70 of the younger Insured
or Attained Age 80 of the older Insured. Conversion can be either to an increase
in Face Amount under the policy, or to a new survivorship life policy we are
offering for conversion at that time. Evidence of insurability will not be
required.
The rider terminates when the policy terminates or when the policy is changed to
another policy under which this rider is not available.
The monthly charge for this rider is the sum of the risk charge for the Rider
Face Amount and the rider face amount charge.
This rider may be cancelled at any time. Cancellation is effective on the
Monthly Charge Date on, or next following, the date we receive the written
request.
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. Any schedule of surrender charges normally
applicable to the new policy will apply here as well.
This right to exchange 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. (If the policy also has
Other Policy Information| 25
<PAGE>
the Survivorship Term Rider, the amount of that rider is added to the
policy Face Amount for 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.
We 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.
Accelerated Death Benefit Rider. This rider advances to the Owner a portion of
the policy death benefit, after the death of the first Insured to die, when we
receive proof, satisfactory to us, that the surviving Insured is terminally ill
and is not expected to live more than 12 months. In return for the advance
payment, a lien is placed on the policy, equal to the amount of benefit
accelerated. Interest is not charged on the lien.
Where this rider is available, we will include it with all policies. There is no
charge for this rider.
Sales and Other Agreements
MML Distributors, LLC ("MML Distributors"), 1414 Main Street, Springfield,
Massachusetts 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. ("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. 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.
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 Premium Expense Factor and premiums paid in excess of the
Premium Expense Factor. The Premium Expense Factor 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.
For coverage year 1, 50% of premium paid up to the Premium Expense Factor and 3%
of premium paid in excess of the Factor; for coverage years 2 through 5, 5% of
premium paid up to the Premium Expense Factor and 3% of premium paid in excess
of the Factor; for coverage years 6 through 10, 3% of all premium
26 |Other Policy Information
<PAGE>
paid; and for coverage years 11 and beyond, 1% of all premium paid. Also, for
Policy Years 2 and beyond, 0.15% of the average monthly account value during the
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.
Other Policy Information| 27
<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 $66 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 Date, we will mail you a report showing:
(i) the account value at the beginning of the previous Policy Year,
(ii) all premiums paid during that Year,
(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 Date.
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. It 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 know the likelihood that the
current federal income tax laws and Treasury Regulations or the current
interpretations of the Internal Revenue Service ("IRS") will continue. We cannot
make any guarantee regarding the future tax treatment of any policy. But we
reserve the right to make changes to the policy that we determine are needed for
it to continue to qualify as life insurance for tax purposes.
For complete information on any tax issue, we urge you to consult a qualified
tax adviser. No attempt is made in this prospectus to consider any applicable
state or other tax laws.
28 Other Information
<PAGE>
Policy Proceeds and Loans. We believe the policy meets the Internal Revenue Code
("IRC") definition of life insurance. Therefore, the death benefit under the
policy generally is excludible from the Beneficiary's gross income under federal
tax law, and the gain accumulated in the contract is not taxed until withdrawn
or otherwise accessed. Gain withdrawn from a policy is taxed as ordinary income.
The following information applies only to a policy that is not a modified
endowment contract ("MEC") under federal tax law. See Modified Endowment
Contracts below for information about MECs.
As a general rule, withdrawals are taxable only to the extent that the amounts
received exceed your cost basis in the policy. Cost basis equals the sum of the
premiums and other consideration paid for the policy less any prior withdrawals
under the policy that were not subject to income taxation. For example, if your
cost basis in the policy is $10,000, amounts received under the policy will not
be taxable as income until they exceed $10,000; then, only the excess over
$10,000 is taxable.
However, special rules apply to certain withdrawals associated with a decrease
in the policy Face Amount. The IRC provides that if:
. there is a reduction of benefits during the first 15 years after a policy
is issued, and
. there is a cash distribution associated with the reduction,
you may be taxed on all or a part of the amount distributed. After 15 years,
cash distributions are not subject to federal income tax, except to the extent
they exceed your cost basis.
If you surrender the policy for its net surrender value, all or a portion of the
distribution may be taxable as income. The distribution represents income to the
extent the value received exceeds your cost basis in the policy. For this
calculation, the value received is equal to the account value, reduced by any
surrender charges, but not reduced by any outstanding policy debt. Therefore, if
there is a loan on the policy when it is surrendered, the loan will reduce the
cash actually paid to you but will not reduce the amount you must include in
your income as a result of the surrender.
A change of the Owner or the Insured(s), or an exchange or assignment of the
policy, may cause the Owner to recognize taxable income.
We believe that, under current tax law, any loan taken under the policy will be
treated as policy debt of the Owner. If your policy is not a MEC, the loan will
not be considered income to you when received.
Interest on policy loans used for personal purposes generally is not
tax-deductible. However, you may be able to deduct this interest if the loan
proceeds are used for "trade for business" or "investment" purposes, provided
that you meet certain narrow criteria.
If the Owner is a corporation or other business, additional restrictions may
apply. For example, there are limits on interest deductions available for loans
against a business-owned policy. In addition, the IRC restricts the ability of a
business to deduct interest on debt totally unrelated to any life insurance, if
the business holds a cash value policy on the life of certain insureds. The
alternative minimum tax ("AMT") may apply to the gain accumulated in a policy
held by a corporation. The corporate AMT may apply to a portion of the amount by
which death benefits received exceed the policy's net surrender value on the
date of the second death.
The impact of federal income taxes on values under the 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 to 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.
Investor Control. There are a number of tax benefits associated with variable
life insurance policies. Gains on the net investment experience of the Separate
Account are deferred until withdrawn or otherwise accessed, and gains on
transfers also are deferred. For these benefits to continue, the policy must
continue to qualify as life insurance. In addition to other requirements,
federal tax law dictates that the insurer, and not
Other Information 29
<PAGE>
the policy Owner, have control of the investments underlying the various
divisions for the policy to qualify as life insurance.
You may make transfers among divisions of the Separate Account, but you may not
direct the investments each division makes. If the IRS were to conclude that
you, as the investor, have control over these investments, then the policy would
no longer qualify as life insurance and you would be taxed on the gain in the
policy as it is earned rather than when it is withdrawn or otherwise accessed.
The IRS has provided some guidance on investor control, but many issues remain
unclear. One such issue is whether a policy Owner can have too much investor
control if the variable life policy offers a large number of investment
divisions in which to invest account values. We do not know if the IRS will
provide any further guidance on the issue. We do not know if any such guidance
would apply retroactively to policies already in force.
Consequently, we reserve the right to further limit net premium allocations and
transfers under the policy, so that it will not lose its qualification as life
insurance due to investor control.
Modified Endowment Contracts. If a policy is a modified endowment contract
("MEC") under federal tax law, loans, withdrawals, and other amounts distributed
under the policy are taxable to the extent of any income accumulated in the
policy. The policy income is the excess of the account value (both loaned and
unloaned) over your cost basis. For example, if your cost basis in the policy is
$10,000 and the account value is $15,000, then all distributions up to $5,000
(the accumulated policy income) are immediately taxable as income when withdrawn
or otherwise accessed. The collateral assignment of a MEC is also treated as a
taxable distribution. 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 IRC definition of life insurance but fails
the "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 the
same benefits guaranteed after the payment of seven level annual premiums.
A life insurance policy may pass the 7-pay test and still be taxed as a MEC if
it is received in a tax-deferred exchange for a MEC.
If certain changes are made to a policy, we will retest it to determine if it
has become a MEC. For example, if you reduce the death benefit, we will retest
the policy using the lower benefit amount. If the reduction in death benefit
causes the policy to become a MEC, this change is effective retroactively to the
Policy Year in which the actual premiums paid exceed the new, lower 7-pay limit.
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 certain 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 distribution
and loans.
If any amount is taxable as a distribution of income under a MEC, it will also
be subject to a 10% penalty tax. There are a few exceptions to the additional
penalty tax for distributions to 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, or the joint lives or joint
life expectancies of the taxpayer and the taxpayer's beneficiary. These
payments must be made at least annually.
30 Other Information
<PAGE>
Once a policy fails the 7-pay test, loans and distributions taken in the year of
failure and in future years are taxable as distributions from a MEC. In
addition, the IRS has authority to apply the MEC taxation rules to loans and
other distributions received in anticipation of the policy's failing the 7-pay
test. The IRC provides that a loan or distribution, if taken within two years
prior to the policy's becoming a MEC, shall be treated as received in
anticipation of failing the 7-pay test. However, the IRS has not exercised its
authority to extend the MEC tax rules to any distributions received in a year
prior to the one in which the policy became a MEC.
Under current circumstances, a loan, collateral assignment, or other
distribution under a MEC may be taxable even though it exceeds the amount of
income accumulated in that particular 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) or as part of a Tax-Sheltered Annuity (TSA)
or Section 403(b) custodial account.
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;
. Rename divisions;
. Combine any two or more Separate Accounts, Segments or divisions;
. Close divisions to future investments;
. Operate the Separate Account as a unit investment trust 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; and
. Substitute one or more funds for other funds with similar investment
objectives.
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, employees, general agents, and agents of MassMutual and C.M. Life
(subject to a $350,000 deductible).
Other Information 31
<PAGE>
Legal Proceedings
We are not currently involved in any legal proceedings that would have a
material impact on the policy.
C.M. Life is involved in litigation arising in and out of the normal course of
its business. C.M. Life intends to defend these actions vigorously. While the
outcome of litigation cannot be foreseen with certainty, it is the opinion of
C.M. Life's management, after consultation with its legal counsel, that the
ultimate resolution of these matters will not materially affect its financial
position, results of operations or liquidity.
Experts
We have included the December 31, 1998 financial statements of C.M. Life, 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, which differ from generally accepted accounting
principles.
Effective July 22, 1999, C.M. Life dismissed PricewaterhouseCoopers LLP as its
independent certified public accountants and appointed Deloitte & Touche LLP,
City Place, 185 Asylum Street, Hartford, Conn. 06103, as its independent
certified public accountants. Deloitte & Touche LLP has not audited or reviewed
the financial statements of C.M. Life.
Craig Waddington, FSA, MAAA, Vice President and Actuary 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.
32 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.
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 investment 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.
Notice: A notification, in a form satisfactory to us, that we receive at our
Administrative Office. A notice usually must be written, but we may accept
notices by other means.
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.
Appendix A 33
<PAGE>
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.
Premium Expense Factor: An amount used to determine the premium expense charges
and sales compensation. For the Initial Face Amount, the Premium Expense Factor
is based on the Issue Ages, genders, and risk classifications of the Insureds.
For each increase in Face Amount, the Premium Expense Factor is based on the
ages, genders and risk classifications of the Insureds on the effective date of
the increase.
Request: A notice asking for a change or an additional benefit. We may require
that this notice be in good order.
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 the 1940 Act. The Separate Account is used to receive and
invest net premiums for this policy.
Target Premium: An amount used to determine surrender charges. The Target
Premium is based on the Issue Ages, genders, and risk classifications of the
Insureds. It is lower than or equal to the Premium Expense Factor.
Valuation Date: A date on which the net asset value of the units 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.
34 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 35
<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.
36 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 deductions from premiums, monthly charges assessed against
the account value of the policies, policy surrender charges, or other charges;
these expenses, 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 reflect the fund operating expenses but
no other expenses. 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 37
<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 Money Market 6.66% 6.16% 5.41% 4.95% 5.16%
MML Managed Bond 10.24% 10.16% 9.19% 7.07% 8.14%
MML Blend 13.67% -- 13.70% 14.60% 13.56%
MML Equity Index 31.03% -- -- -- 28.22%
MML Small Cap Value Equity (23.88%) -- -- -- (23.88%)*
MML Growth Equity/1/ -- -- -- -- --
MML Small Cap Growth Equity/1/ -- -- -- -- --
Oppenheimer Aggressive Growth/2/ 15.07% -- 16.12% 13.06% 12.36%
Oppenheimer Global Securities 12.49% -- -- 9.67% 14.11%
Oppenheimer Capital Appreciation/3/ 16.03% -- 16.85% 22.10% 24.00%
Oppenheimer Strategic Bond 6.79% -- -- 6.83% 2.90%
Oppenheimer Main Street Growth & Income 27.00% -- -- -- 4.70%
Oppenheimer High Income 12.26% -- 12.71% 8.62% 0.31%
Oppenheimer Bond 9.66% -- -- -- 6.80%
VIP II Contrafund(R) Portfolio 28.62% -- -- -- 29.98%
T. Rowe Price Mid-Cap Growth Portfolio 20.43% -- -- -- 22.08%
American Century's VP Income & Growth Fund 30.68% -- -- -- 26.87%
Bankers Trust's Small Cap Index Fund 2.07% -- -- -- (2.18%)
Goldman Sachs Capital Growth Fund 13.40% -- -- -- --
Janus Aspen Capital Appreciation Portfolio 51.65% -- -- -- 58.11%
Janus Aspen Worldwide Growth Portfolio 24.06% -- -- 21.32% 28.92%
Templeton International 14.10% -- -- 11.74% 9.08%
- --------------------------------------------------------------------------------------------
</TABLE>
The figures in this Table do not reflect any charges at the Separate Account or
policy level.
*Since inception.
/1/ The MML Growth Equity Fund and the MML Small Cap Growth Equity Fund began
operations in 1999 and therefore, had no operating expenses as of
December 31, 1998. The investment manager estimates that the total
operating expenses for these Funds in 1999 will be as shown.
/2/ Prior to May 1, 1998, the Oppenheimer Aggressive Growth Fund/VA was
called the Oppenheimer Capital Appreciation Fund.
/3/ Prior to May 1, 1999, the Oppenheimer Capital Appreciation Fund/VA was
called the Oppenheimer Growth Fund.
<TABLE>
<CAPTION>
Dates of inception:
<S> <C>
MML Equity Fund - 9/15/71 Oppenheimer Main Street Growth and Income - 7/5/95
MML Money Market Fund - 12/16/81 Oppenheimer High Income Fund/VA - 4/30/86
MML Managed Bond Fund - 12/16/81 Oppenheimer Bond Fund/VA - 4/3/85
MML Blend Fund - 2/3/84 VIP II Contrafund(R) Portfolio - 1/3/95
MML Equity Index Fund - 5/1/97 T. Rowe Price Mid-Cap Growth Portfolio - 12/31/96
MML Small Cap Value Equity Fund - 6/1/98 American Century's VP Income & Growth Fund - 10/30/97
MML Growth Equity Fund - 5/3/99 Bankers Trust's Small Cap Index Fund - 8/25/97
MML Small Cap Growth Equity Fund - 5/3/99 Goldman Sachs Capital Growth Fund - 5/1/98
Oppenheimer Capital Appreciation Fund/VA - 4/3/85 Janus Aspen Capital Appreciation Portfolio - 5/1/97
Oppenheimer Aggressive Growth Fund/VA - 8/15/86 Janus Aspen Worldwide Growth Portfolio - 9/13/93
Oppenheimer Global Securities Fund/VA - 11/12/90 Templeton International Fund - 5/1/92
Oppenheimer Strategic Bond Fund/VA - 5/3/93
</TABLE>
38 Appendix C
<PAGE>
TABLE 2
ONE YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
MML MML
MML MML MML Small Cap MML Small Cap
Year MML Managed MML Money Equity Value Growth Growth
Ended Equity Bond Blend Market Index Equity Equity Equity
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 16.20% 8.14% 13.56% 5.16% 28.22% (23.88%)* ---/2/ ---/2/
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%/1/ 22.79%* --- 11.12%* --- --- --- ---
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Oppenheimer
Oppenheimer Oppenheimer Oppenheimer Oppenheimer Main Street Oppenheimer
Year Capital Aggressive Global Strategic Growth & High Oppenheimer
Ended Appreciation/3/ Growth/4/ Securities Bond Income Income Bond
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1998 24.00% 12.36% 14.11% 2.90% 4.70% 0.31% 6.80%
1997 26.69% 11.67% 22.42% 8.71% 32.48% 12.22% 9.26%
1996 25.20% 20.23% 17.80% 12.07% 32.51% 15.25% 4.80%
1995 36.66% 32.52% 2.24% 15.33% --- 20.37% 17.00%
1994 0.97% (7.59%) (5.72%) (3.78%) --- (3.18%) (1.94%)
1993 7.25% 27.32% 70.32% 4.25%* --- 26.34% 13.04%
1992 14.53% 15.42% (7.11%) --- --- 17.92% 6.50%
1991 25.54% 54.72% 3.39% --- --- 33.91% 17.63%
1990 (8.21%) (16.82%) 0.40%* --- --- 4.65% 7.92%
1989 23.59% 27.57% --- --- --- 4.84% 13.32%
1988 22.09% 13.41% --- --- --- --- ---
1987 3.31% 14.34% --- --- --- --- ---
1986 17.76% (1.65%)* --- --- --- --- ---
1985 9.50%* --- --- --- --- --- ---
1984 --- --- --- --- --- --- ---
1983 --- --- --- --- --- --- ---
1982 --- --- --- --- --- --- ---
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
The figures in this Table do not reflect any charges at the Separate Account or
policy level.
*Since inception.
/1/ Performance for the MML Equity Fund for years 1981 through 1974: 6.67%,
27.62%, 19.54%, 3.71%, (0.52%), 24.77%, 32.85%, (17.61%). Performance for
the MML Equity Fund prior to 1974 is not available.
/2/ The MML Growth Equity Fund and the MML Small Cap Growth Equity Fund began
operations in 1999 and therefore, had no operating expenses as of
December 31, 1998. The investment manager estimates that the total
operating expenses for these Funds in 1999 will be as shown.
/3/ Prior to May 1, 1999, the Oppenheimer Capital Appreciation Fund/VA was
called the Oppenheimer Growth Fund.
/4/ Prior to May 1, 1998, the Oppenheimer Aggressive Growth Fund/VA was
called the Oppenheimer Capital Appreciation Fund.
Appendix C 39
<PAGE>
TABLE 2 (continued)
ONE YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Bankers Goldman Janus
Year Price Mid VP Income Trust Sachs Janus Aspen Aspen
Ended VIP II Cap & Growth Small Cap Capital Capital Worldwide Templeton
Contrafund Growth Fund Index Fund Growth Appreciation Growth International
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 29.98% 22.08% 26.87% (2.18%) 13.40% 58.11% 28.92% 9.08%
1997 24.14% 18.80%* 7.8%* -- -- -- 22.15% 13.73%
1996 21.22% -- -- -- -- -- 29.04% 24.04%
1995 39.72%* -- -- -- -- -- 27.37% 15.78%
1994 -- -- -- -- -- -- 1.53% (2.22%)
1993 -- -- -- -- -- -- -- 47.28%
1992 -- -- -- -- -- -- -- --
1991 -- -- -- -- -- -- -- --
1990 -- -- -- -- -- -- -- --
1989 -- -- -- -- -- -- -- --
1988 -- -- -- -- -- -- -- --
1987 -- -- -- -- -- -- -- --
1986 -- -- -- -- -- -- -- --
1985 -- -- -- -- -- -- -- --
1984 -- -- -- -- -- -- -- --
1983 -- -- -- -- -- -- -- --
1982 -- -- -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The figures in this Table do not reflect any charges at the Separate Account or
policy level.
* Since inception.
<TABLE>
<CAPTION>
Dates of inception:
<S> <C>
MML Equity Fund - 9/15/71 Oppenheimer Main Street Growth and Income - 7/5/95
MML Money Market Fund - 12/16/81 Oppenheimer High Income Fund/VA - 4/30/86
MML Managed Bond Fund - 12/16/81 Oppenheimer Bond Fund/VA - 4/3/85
MML Blend Fund - 2/3/84 VIP II Contrafund(R) Portfolio - 1/3/95
MML Equity Index Fund - 5/1/97 T. Rowe Price Mid-Cap Growth Portfolio - 12/31/96
MML Small Cap Value Equity Fund - 6/1/98 American Century's VP Income & Growth Fund - 10/30/97
MML Growth Equity Fund - 5/3/99 Bankers Trust's Small Cap Index Fund - 8/25/97
MML Small Cap Growth Equity Fund - 5/3/99 Goldman Sachs Capital Growth Fund - 5/1/98
Oppenheimer Capital Appreciation Fund/VA - 4/3/85 Janus Aspen Capital Appreciation Portfolio - 5/1/97
Oppenheimer Aggressive Growth Fund/VA - 8/15/86 Janus Aspen Worldwide Growth Portfolio - 9/13/93
Oppenheimer Global Securities Fund/VA - 11/12/90 Templeton International Fund - 5/1/92
Oppenheimer Strategic Bond Fund/VA - 5/3/93
</TABLE>
40 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 $7,500 for a combination of an Ultra
Preferred Non-Tobacco Male age 35 and an Ultra Preferred Non-Tobacco Female age
35. Ultra Preferred Non-Tobacco 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 $8 per month in Policy Years 11 and beyond.
. face amount charges of $0.05 per month per $1,000 of Face Amount in
coverage years 1-10.
. insurance charges based on the current rates we are charging for Ultra
Preferred Non-Tobacco, 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 0.73% 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 $0.08 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 0.60% 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 14 Policy Years. The surrender charge in the first five
Years is the Target Premium or $45 per $1,000 of Face Amount if less. In each of
Years six through 14, the surrender charge is equal to the surrender charge in
the preceding 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 (0.97%), 4.97%, and 10.91%,
respectively, on a net basis.
Appendix D 41
<PAGE>
<TABLE>
<CAPTION>
TABLE 1
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
<S> <C>
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 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 $7,875 $1,000,000 $1,000,000 $1,000,000 $2,280 $2,672 $3,064
2 $16,144 $1,000,000 $1,000,000 $1,000,000 $8,400 $9,570 $10,787
3 $24,826 $1,000,000 $1,000,000 $1,000,000 $14,460 $16,809 $19,351
4 $33,942 $1,000,000 $1,000,000 $1,000,000 $20,460 $24,408 $28,850
5 $43,514 $1,000,000 $1,000,000 $1,000,000 $26,400 $32,384 $39,384
6 $53,565 $1,000,000 $1,000,000 $1,000,000 $32,672 $41,144 $51,455
7 $64,118 $1,000,000 $1,000,000 $1,000,000 $38,885 $50,319 $64,800
8 $75,199 $1,000,000 $1,000,000 $1,000,000 $45,039 $59,928 $79,556
9 $86,834 $1,000,000 $1,000,000 $1,000,000 $51,135 $69,994 $95,877
10 $99,051 $1,000,000 $1,000,000 $1,000,000 $57,173 $80,537 $113,934
15 $169,931 $1,000,000 $1,000,000 $1,000,000 $89,657 $144,957 $241,899
20 $260,394 $1,000,000 $1,000,000 $1,000,000 $118,566 $224,395 $453,232
25 $375,851 $1,000,000 $1,000,000 $1,082,274 $145,534 $325,114 $807,667
30 $523,206 $1,000,000 $1,000,000 $1,710,466 $169,923 $452,502 $1,402,021
35 $711,272 $1,000,000 $1,000,000 $2,781,292 $190,162 $613,293 $2,397,665
40 $951,298 $1,000,000 $1,000,000 $4,349,407 $202,522 $816,732 $4,064,866
45 $1,257,639 $1,000,000 $1,131,346 $7,199,585 $197,247 $1,077,472 $6,856,747
50 $1,648,615 $1,000,000 $1,477,469 $12,081,362 $150,961 $1,407,114 $11,506,059
- --------------------------- ---------------------------------------------- -----------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
-----------------------------------------------------------
0% 6% 12%
-----------------------------------------------------------
1 $6,180 $6,572 $6,964
2 $12,300 $13,470 $14,687
3 $18,360 $20,709 $23,251
4 $24,360 $28,308 $32,750
5 $30,300 $36,284 $43,284
6 $36,182 $44,654 $54,965
7 $42,005 $53,439 $67,920
8 $47,769 $62,658 $82,286
9 $53,475 $72,334 $98,217
10 $59,123 $82,487 $115,884
15 $89,657 $144,957 $241,899
-----------------------------------------------------------
- --------------------------------------------------------------------------------
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 2
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
<S> <C>
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 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 $7,875 $1,006,180 $1,006,572 $1,006,964 $2,280 $2,672 $3,064
2 $16,144 $1,012,300 $1,013,470 $1,014,687 $8,400 $9,570 $10,787
3 $24,826 $1,018,360 $1,020,709 $1,023,251 $14,460 $16,809 $19,351
4 $33,942 $1,024,360 $1,028,308 $1,032,750 $20,460 $24,408 $28,850
5 $43,514 $1,030,300 $1,036,284 $1,043,283 $26,400 $32,384 $39,383
6 $53,565 $1,036,181 $1,044,654 $1,054,965 $32,671 $41,144 $51,455
7 $64,118 $1,042,004 $1,053,438 $1,067,919 $38,884 $50,318 $64,799
8 $75,199 $1,047,768 $1,062,657 $1,082,284 $45,038 $59,927 $79,554
9 $86,834 $1,053,474 $1,072,332 $1,098,215 $51,134 $69,992 $95,875
10 $99,051 $1,059,121 $1,082,484 $1,115,880 $57,171 $80,534 $113,930
15 $169,931 $1,089,646 $1,144,938 $1,241,865 $89,646 $144,938 $241,865
20 $260,394 $1,118,522 $1,224,305 $1,453,039 $118,522 $224,305 $453,039
25 $375,851 $1,145,359 $1,324,691 $1,806,570 $145,359 $324,691 $806,570
30 $523,206 $1,169,342 $1,450,821 $2,397,810 $169,342 $450,821 $1,397,810
35 $711,272 $1,188,445 $1,607,292 $3,385,167 $188,445 $607,292 $2,385,167
40 $951,298 $1,197,848 $1,796,678 $5,030,787 $197,848 $796,678 $4,030,787
45 $1,257,639 $1,185,279 $2,013,557 $7,764,939 $185,279 $1,013,557 $6,764,939
50 $1,648,615 $1,124,127 $2,233,889 $12,290,868 $124,127 $1,233,889 $11,290,868
- -------------------------------------------------------------------------------- -----------------------------------------------
</TABLE>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
-----------------------------------------------
0% 6% 12%
-----------------------------------------------
1 $6,180 $6,572 $6,964
2 $12,300 $13,470 $14,687
3 $18,360 $20,709 $23,251
4 $24,360 $28,308 $32,750
5 $30,300 $36,284 $43,283
6 $36,181 $44,654 $54,965
7 $42,004 $53,438 $67,919
8 $47,768 $62,657 $82,284
9 $53,474 $72,332 $98,215
10 $59,121 $82,484 $115,880
15 $89,646 $144,938 $241,865
-----------------------------------------------
- --------------------------------------------------------------------------------
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 3
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
<S> <C>
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 Annual Premium
Death Benefit Option 3 $1 million Initial Face Amount
Current Schedule of Charges Guideline Premium Test
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 $7,875 $1,007,500 $1,007,500 $1,007,500 $2,280 $2,672 $3,064
2 $16,144 $1,015,000 $1,015,000 $1,015,000 $8,400 $9,570 $10,787
3 $24,826 $1,022,500 $1,022,500 $1,022,500 $14,460 $16,809 $19,351
4 $33,942 $1,030,000 $1,030,000 $1,030,000 $20,460 $24,408 $28,850
5 $43,514 $1,037,500 $1,037,500 $1,037,500 $26,400 $32,384 $39,383
6 $53,565 $1,045,000 $1,045,000 $1,045,000 $32,671 $41,144 $51,455
7 $64,118 $1,052,500 $1,052,500 $1,052,500 $38,884 $50,318 $64,799
8 $75,199 $1,060,000 $1,060,000 $1,060,000 $45,038 $59,927 $79,554
9 $86,834 $1,067,500 $1,067,500 $1,067,500 $51,134 $69,992 $95,875
10 $99,051 $1,075,000 $1,075,000 $1,075,000 $57,171 $80,534 $113,931
15 $169,931 $1,112,500 $1,112,500 $1,112,500 $89,643 $144,940 $241,879
20 $260,394 $1,150,000 $1,150,000 $1,150,000 $118,511 $224,327 $453,145
25 $375,851 $1,187,500 $1,187,500 $1,187,500 $145,312 $324,836 $807,313
30 $523,206 $1,225,000 $1,225,000 $1,709,679 $169,171 $451,534 $1,401,376
35 $711,272 $1,262,500 $1,262,500 $2,780,037 $187,867 $610,264 $2,396,584
40 $951,298 $1,300,000 $1,300,000 $4,347,468 $195,938 $807,853 $4,063,054
45 $1,257,639 $1,337,500 $1,337,500 $7,196,398 $178,619 $1,053,462 $6,853,712
50 $1,648,615 $1,375,000 $1,436,411 $12,076,036 $99,145 $1,368,011 $11,500,987
- --------------------------- ------------------------------------------------ ------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
---------------------------------------------------
0% 6% 12%
---------------------------------------------------
1 $6,180 $6,572 $6,964
2 $12,300 $13,470 $14,687
3 $18,360 $20,709 $23,251
4 $24,360 $28,308 $32,750
5 $30,300 $36,284 $43,283
6 $36,181 $44,654 $54,965
7 $42,004 $53,438 $67,919
8 $47,768 $62,657 $82,284
9 $53,474 $72,332 $98,215
10 $59,121 $82,484 $115,881
15 $89,643 $144,940 $241,879
---------------------------------------------------
- --------------------------------------------------------------------------------
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 4
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
<S> <C>
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 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 $7,875 $1,000,000 $1,000,000 $1,000,000 $1,751 $2,121 $2,491
2 $16,144 $1,000,000 $1,000,000 $1,000,000 $7,323 $8,414 $9,550
3 $24,826 $1,000,000 $1,000,000 $1,000,000 $12,815 $14,990 $17,344
4 $33,942 $1,000,000 $1,000,000 $1,000,000 $18,227 $21,861 $25,952
5 $43,514 $1,000,000 $1,000,000 $1,000,000 $23,559 $29,039 $35,455
6 $53,565 $1,000,000 $1,000,000 $1,000,000 $29,200 $36,927 $46,338
7 $64,118 $1,000,000 $1,000,000 $1,000,000 $34,758 $45,146 $58,311
8 $75,199 $1,000,000 $1,000,000 $1,000,000 $40,233 $53,710 $71,487
9 $86,834 $1,000,000 $1,000,000 $1,000,000 $45,623 $62,632 $85,992
10 $99,051 $1,000,000 $1,000,000 $1,000,000 $50,925 $71,925 $101,961
15 $169,931 $1,000,000 $1,000,000 $1,000,000 $80,683 $129,862 $215,932
20 $260,394 $1,000,000 $1,000,000 $1,000,000 $105,339 $198,586 $399,484
25 $375,851 $1,000,000 $1,000,000 $1,000,000 $125,315 $281,785 $700,876
30 $523,206 $1,000,000 $1,000,000 $1,460,439 $137,189 $380,585 $1,197,081
35 $711,272 $1,000,000 $1,000,000 $2,329,056 $131,673 $493,759 $2,007,807
40 $951,298 $1,000,000 $1,000,000 $3,563,630 $87,906 $618,955 $3,330,495
45 $1,257,639 $0 $1,000,000 $5,765,882 $0 $752,923 $5,491,317
50 $1,648,615 $0 $1,000,000 $9,390,604 $0 $915,774 $8,943,432
- --------------------------- ----------------------------------------------- ------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------------
0% 6% 12%
--------------------------------------------------
1 $5,651 $6,021 $6,391
2 $11,223 $12,314 $13,450
3 $16,715 $18,890 $21,244
4 $22,127 $25,761 $29,852
5 $27,459 $32,939 $39,355
6 $32,710 $40,437 $49,848
7 $37,878 $48,266 $61,431
8 $42,963 $56,440 $74,217
9 $47,963 $64,972 $88,332
10 $52,875 $73,875 $103,911
15 $80,683 $129,862 $215,932
--------------------------------------------------
- --------------------------------------------------------------------------------
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 5
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
<S> <C>
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 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 $7,875 $1,005,651 $1,006,021 $1,006,391 $1,751 $2,121 $2,491
2 $16,144 $1,011,223 $1,012,314 $1,013,450 $7,323 $8,414 $9,550
3 $24,826 $1,016,715 $1,018,889 $1,021,244 $12,815 $14,989 $17,344
4 $33,942 $1,022,126 $1,025,760 $1,029,850 $18,226 $21,860 $25,950
5 $43,514 $1,027,457 $1,032,937 $1,039,352 $23,557 $29,037 $35,452
6 $53,565 $1,032,707 $1,040,433 $1,049,843 $29,197 $36,923 $46,333
7 $64,118 $1,037,873 $1,048,259 $1,061,422 $34,753 $45,139 $58,302
8 $75,199 $1,042,955 $1,056,428 $1,074,202 $40,225 $53,698 $71,472
9 $86,834 $1,047,950 $1,064,954 $1,088,307 $45,610 $62,614 $85,967
10 $99,051 $1,052,857 $1,073,848 $1,103,871 $50,907 $71,898 $101,921
15 $169,931 $1,080,590 $1,129,701 $1,215,648 $80,590 $129,701 $215,648
20 $260,394 $1,104,997 $1,197,884 $1,397,984 $104,997 $197,884 $397,984
25 $375,851 $1,124,249 $1,279,174 $1,694,021 $124,249 $279,174 $694,021
30 $523,206 $1,134,252 $1,371,856 $2,171,886 $134,252 $371,856 $1,171,886
35 $711,272 $1,124,234 $1,465,828 $2,934,869 $124,234 $465,828 $1,934,869
40 $951,298 $1,072,136 $1,534,907 $4,138,201 $72,136 $534,907 $3,138,201
45 $1,257,639 $0 $1,510,014 $5,996,932 $0 $510,014 $4,996,932
50 $1,648,615 $0 $1,267,615 $8,825,609 $0 $267,615 $7,825,609
- ---------------------------- ------------------------------------------------- ------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
------------------------------------------------
0% 6% 12%
------------------------------------------------
1 $5,651 $6,021 $6,391
2 $11,223 $12,314 $13,450
3 $16,715 $18,889 $21,244
4 $22,126 $25,760 $29,850
5 $27,457 $32,937 $39,352
6 $32,707 $40,433 $49,843
7 $37,873 $48,259 $61,422
8 $42,955 $56,428 $74,202
9 $47,950 $64,954 $88,307
10 $52,857 $73,848 $103,871
15 $80,590 $129,701 $215,648
------------------------------------------------
- --------------------------------------------------------------------------------
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 6
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
<S> <C>
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 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 $7,875 $1,007,500 $1,007,500 $1,007,500 $1,751 $2,121 $2,491
2 $16,144 $1,015,000 $1,015,000 $1,015,000 $7,323 $8,414 $9,550
3 $24,826 $1,022,500 $1,022,500 $1,022,500 $12,814 $14,989 $17,344
4 $33,942 $1,030,000 $1,030,000 $1,030,000 $18,226 $21,860 $25,950
5 $43,514 $1,037,500 $1,037,500 $1,037,500 $23,557 $29,036 $35,452
6 $53,565 $1,045,000 $1,045,000 $1,045,000 $29,196 $36,922 $46,333
7 $64,118 $1,052,500 $1,052,500 $1,052,500 $34,751 $45,138 $58,303
8 $75,199 $1,060,000 $1,060,000 $1,060,000 $40,222 $53,697 $71,473
9 $86,834 $1,067,500 $1,067,500 $1,067,500 $45,605 $62,612 $85,970
10 $99,051 $1,075,000 $1,075,000 $1,075,000 $50,900 $71,896 $101,928
15 $169,931 $1,112,500 $1,112,500 $1,112,500 $80,554 $129,707 $215,743
20 $260,394 $1,150,000 $1,150,000 $1,150,000 $104,861 $197,988 $398,715
25 $375,851 $1,187,500 $1,187,500 $1,187,500 $123,780 $279,799 $698,204
30 $523,206 $1,225,000 $1,225,000 $1,453,421 $132,690 $374,612 $1,191,329
35 $711,272 $1,262,500 $1,262,500 $2,318,117 $118,778 $476,307 $1,998,377
40 $951,298 $1,300,000 $1,300,000 $3,547,121 $52,054 $569,365 $3,315,066
45 $1,257,639 $0 $1,337,500 $5,739,393 $0 $608,158 $5,466,088
50 $1,648,615 $0 $1,375,000 $9,347,679 $0 $474,240 $8,902,551
- ----------------------------- ------------------------------------------------ ------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
---------------------------------------------------
0% 6% 12%
---------------------------------------------------
1 $5,651 $6,021 $6,391
2 $11,223 $12,314 $13,450
3 $16,714 $18,889 $21,244
4 $22,126 $25,760 $29,850
5 $27,457 $32,936 $39,352
6 $32,706 $40,432 $49,843
7 $37,871 $48,258 $61,423
8 $42,952 $56,427 $74,203
9 $47,945 $64,952 $88,310
10 $52,850 $73,846 $103,878
15 $80,554 $129,707 $215,743
---------------------------------------------------
- --------------------------------------------------------------------------------
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 7
<TABLE>
<S> <C>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 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 $7,875 $1,000,000 $1,000,000 $1,000,000 $2,280 $2,672 $3,064
2 $16,144 $1,000,000 $1,000,000 $1,000,000 $8,400 $9,570 $10,787
3 $24,826 $1,000,000 $1,000,000 $1,000,000 $14,460 $16,809 $19,351
4 $33,942 $1,000,000 $1,000,000 $1,000,000 $20,460 $24,408 $28,850
5 $43,514 $1,000,000 $1,000,000 $1,000,000 $26,400 $32,384 $39,384
6 $53,565 $1,000,000 $1,000,000 $1,000,000 $32,672 $41,144 $51,455
7 $64,118 $1,000,000 $1,000,000 $1,000,000 $38,885 $50,319 $64,800
8 $75,199 $1,000,000 $1,000,000 $1,000,000 $45,039 $59,928 $79,556
9 $86,834 $1,000,000 $1,000,000 $1,000,000 $51,135 $69,994 $95,877
10 $99,051 $1,000,000 $1,000,000 $1,000,000 $57,173 $80,537 $113,934
15 $169,931 $1,000,000 $1,000,000 $1,000,000 $89,657 $144,957 $241,899
20 $260,394 $1,000,000 $1,000,000 $1,427,471 $118,566 $224,395 $453,165
25 $375,851 $1,000,000 $1,000,000 $2,105,323 $145,534 $325,114 $806,637
30 $523,206 $1,000,000 $1,000,000 $3,058,274 $169,923 $452,502 $1,396,472
35 $711,272 $1,000,000 $1,133,847 $4,396,675 $190,162 $612,890 $2,376,581
40 $951,298 $1,000,000 $1,292,236 $6,351,817 $202,522 $812,727 $3,994,854
45 $1,257,639 $1,000,000 $1,480,831 $9,293,511 $197,247 $1,057,736 $6,638,222
50 $1,648,615 $1,000,000 $1,716,346 $13,832,716 $150,961 $1,351,454 $10,891,902
- -------------------------- ----------------------------------------------------- -------------------------------------------------
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
----------------------------------------------
0% 6% 12%
----------------------------------------------
<S> <C> <C> <C>
1 $6,180 $6,572 $6,964
2 $12,300 $13,470 $14,687
3 $18,360 $20,709 $23,251
4 $24,360 $28,308 $32,750
5 $30,300 $36,284 $43,284
6 $36,182 $44,654 $54,965
7 $42,005 $53,439 $67,920
8 $47,769 $62,658 $82,286
9 $53,475 $72,334 $98,217
10 $59,123 $82,487 $115,884
15 $89,657 $144,957 $241,899
----------------------------------------------
</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>
<S> <C>
TABLE 8
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 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 $7,875 $1,006,180 $1,006,572 $1,006,964 $2,280 $2,672 $3,064
2 $16,144 $1,012,300 $1,013,470 $1,014,687 $8,400 $9,570 $10,787
3 $24,826 $1,018,360 $1,020,709 $1,023,251 $14,460 $16,809 $19,351
4 $33,942 $1,024,360 $1,028,308 $1,032,750 $20,460 $24,408 $28,850
5 $43,514 $1,030,300 $1,036,284 $1,043,283 $26,400 $32,384 $39,383
6 $53,565 $1,036,181 $1,044,654 $1,054,965 $32,671 $41,144 $51,455
7 $64,118 $1,042,004 $1,053,438 $1,067,919 $38,884 $50,318 $64,799
8 $75,199 $1,047,768 $1,062,657 $1,082,284 $45,038 $59,927 $79,554
9 $86,834 $1,053,474 $1,072,332 $1,098,215 $51,134 $69,992 $95,875
10 $99,051 $1,059,121 $1,082,484 $1,115,880 $57,171 $80,534 $113,930
15 $169,931 $1,089,646 $1,144,938 $1,241,865 $89,646 $144,938 $241,865
20 $260,394 $1,118,522 $1,224,305 $1,453,039 $118,522 $224,305 $453,039
25 $375,851 $1,145,359 $1,324,691 $2,104,758 $145,359 $324,691 $806,421
30 $523,206 $1,169,342 $1,450,821 $3,057,481 $169,342 $450,821 $1,396,110
35 $711,272 $1,188,445 $1,607,292 $4,395,557 $188,445 $607,292 $2,375,977
40 $951,298 $1,197,848 $1,796,678 $6,350,222 $197,848 $796,678 $3,993,850
45 $1,257,639 $1,185,279 $2,013,557 $9,291,194 $185,279 $1,013,557 $6,636,567
50 $1,648,615 $1,124,127 $2,233,889 $13,829,281 $124,127 $1,233,889 $10,889,198
- -------------------------- ----------------------------------------------------- -------------------------------------------------
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
--------------------------------------------
0% 6% 12%
--------------------------------------------
<S> <C> <C> <C>
1 $6,180 $6,572 $6,964
2 $12,300 $13,470 $14,687
3 $18,360 $20,709 $23,251
4 $24,360 $28,308 $32,750
5 $30,300 $36,284 $43,283
6 $36,181 $44,654 $54,965
7 $42,004 $53,438 $67,919
8 $47,768 $62,657 $82,284
9 $53,474 $72,332 $98,215
10 $59,121 $82,484 $115,880
15 $89,646 $144,938 $241,865
--------------------------------------------
</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 49
<PAGE>
<TABLE>
<S> <C>
TABLE 9
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 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 $7,875 $1,007,500 $1,007,500 $1,007,500 $2,280 $2,672 $3,064
2 $16,144 $1,015,000 $1,015,000 $1,015,000 $8,400 $9,570 $10,787
3 $24,826 $1,022,500 $1,022,500 $1,022,500 $14,460 $16,809 $19,351
4 $33,942 $1,030,000 $1,030,000 $1,030,000 $20,460 $24,408 $28,850
5 $43,514 $1,037,500 $1,037,500 $1,037,500 $26,400 $32,384 $39,383
6 $53,565 $1,045,000 $1,045,000 $1,045,000 $32,671 $41,144 $51,455
7 $64,118 $1,052,500 $1,052,500 $1,052,500 $38,884 $50,318 $64,799
8 $75,199 $1,060,000 $1,060,000 $1,060,000 $45,038 $59,927 $79,554
9 $86,834 $1,067,500 $1,067,500 $1,067,500 $51,134 $69,992 $95,875
10 $99,051 $1,075,000 $1,075,000 $1,075,000 $57,171 $80,534 $113,931
15 $169,931 $1,112,500 $1,112,500 $1,112,500 $89,643 $144,940 $241,879
20 $260,394 $1,150,000 $1,150,000 $1,427,320 $118,511 $224,327 $453,117
25 $375,851 $1,187,500 $1,187,500 $2,105,113 $145,312 $324,836 $806,557
30 $523,206 $1,225,000 $1,225,000 $3,057,979 $169,171 $451,534 $1,396,338
35 $711,272 $1,262,500 $1,262,500 $4,396,259 $187,867 $610,264 $2,376,356
40 $951,298 $1,300,000 $1,300,000 $6,351,224 $195,938 $807,853 $3,994,481
45 $1,257,639 $1,337,500 $1,471,984 $9,292,650 $178,619 $1,051,417 $6,637,607
50 $1,648,615 $1,375,000 $1,706,391 $13,831,440 $99,145 $1,343,615 $10,890,898
- -------------------------- ----------------------------------------------------- -------------------------------------------------
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
----------------------------------------------
0% 6% 12%
----------------------------------------------
<S> <C> <C> <C>
1 $6,180 $6,572 $6,964
2 $12,300 $13,470 $14,687
3 $18,360 $20,709 $23,251
4 $24,360 $28,308 $32,750
5 $30,300 $36,284 $43,283
6 $36,181 $44,654 $54,965
7 $42,004 $53,438 $67,919
8 $47,768 $62,657 $82,284
9 $53,474 $72,332 $98,215
10 $59,121 $82,484 $115,881
15 $89,643 $144,940 $241,879
----------------------------------------------
</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.
50 Appendix D
<PAGE>
<TABLE>
<S> <C>
TABLE 10
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 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 $7,875 $1,000,000 $1,000,000 $1,000,000 $1,751 $2,121 $2,491
2 $16,144 $1,000,000 $1,000,000 $1,000,000 $7,323 $8,414 $9,550
3 $24,826 $1,000,000 $1,000,000 $1,000,000 $12,815 $14,990 $17,344
4 $33,942 $1,000,000 $1,000,000 $1,000,000 $18,227 $21,861 $25,952
5 $43,514 $1,000,000 $1,000,000 $1,000,000 $23,559 $29,039 $35,455
6 $53,565 $1,000,000 $1,000,000 $1,000,000 $29,200 $36,927 $46,338
7 $64,118 $1,000,000 $1,000,000 $1,000,000 $34,758 $45,146 $58,311
8 $75,199 $1,000,000 $1,000,000 $1,000,000 $40,233 $53,710 $71,487
9 $86,834 $1,000,000 $1,000,000 $1,000,000 $45,623 $62,632 $85,992
10 $99,051 $1,000,000 $1,000,000 $1,000,000 $50,925 $71,925 $101,961
15 $169,931 $1,000,000 $1,000,000 $1,000,000 $80,683 $129,862 $215,932
20 $260,394 $1,000,000 $1,000,000 $1,257,628 $105,339 $198,586 $399,247
25 $375,851 $1,000,000 $1,000,000 $1,817,457 $125,315 $281,785 $696,344
30 $523,206 $1,000,000 $1,000,000 $2,565,682 $137,189 $380,585 $1,171,544
35 $711,272 $1,000,000 $1,000,000 $3,541,135 $131,673 $493,759 $1,914,127
40 $951,298 $1,000,000 $1,000,000 $4,833,658 $87,906 $618,955 $3,040,036
45 $1,257,639 $0 $1,049,748 $6,529,825 $0 $749,820 $4,664,161
50 $1,648,615 $0 $1,110,024 $8,775,423 $0 $874,035 $6,909,782
- -------------------------- ------------------------------------------------ ------------------------------------------------------
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
----------------------------------------------
0% 6% 12%
----------------------------------------------
<S> <C> <C> <C>
1 $5,651 $6,021 $6,391
2 $11,223 $12,314 $13,450
3 $16,715 $18,890 $21,244
4 $22,127 $25,761 $29,852
5 $27,459 $32,939 $39,355
6 $32,710 $40,437 $49,848
7 $37,878 $48,266 $61,431
8 $42,963 $56,440 $74,217
9 $47,963 $64,972 $88,332
10 $52,875 $73,875 $103,911
15 $80,683 $129,862 $215,932
----------------------------------------------
</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 51
<PAGE>
<TABLE>
<S> <C>
TABLE 11
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 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 $7,875 $1,005,651 $1,006,021 $1,006,391 $1,751 $2,121 $2,491
2 $16,144 $1,011,223 $1,012,314 $1,013,450 $7,323 $8,414 $9,550
3 $24,826 $1,016,715 $1,018,889 $1,021,244 $12,815 $14,989 $17,344
4 $33,942 $1,022,126 $1,025,760 $1,029,850 $18,226 $21,860 $25,950
5 $43,514 $1,027,457 $1,032,937 $1,039,352 $23,557 $29,037 $35,452
6 $53,565 $1,032,707 $1,040,433 $1,049,843 $29,197 $36,923 $46,333
7 $64,118 $1,037,873 $1,048,259 $1,061,422 $34,753 $45,139 $58,302
8 $75,199 $1,042,955 $1,056,428 $1,074,202 $40,225 $53,698 $71,472
9 $86,834 $1,047,950 $1,064,954 $1,088,307 $45,610 $62,614 $85,967
10 $99,051 $1,052,857 $1,073,848 $1,103,871 $50,907 $71,898 $101,921
15 $169,931 $1,080,590 $1,129,701 $1,215,648 $80,590 $129,701 $215,648
20 $260,394 $1,104,997 $1,197,884 $1,397,984 $104,997 $197,884 $397,984
25 $375,851 $1,124,249 $1,279,174 $1,811,032 $124,249 $279,174 $693,882
30 $523,206 $1,134,252 $1,371,856 $2,556,961 $134,252 $371,856 $1,167,562
35 $711,272 $1,124,234 $1,465,828 $3,529,381 $124,234 $465,828 $1,907,773
40 $951,298 $1,072,136 $1,534,907 $4,817,846 $72,136 $534,907 $3,030,092
45 $1,257,639 $0 $1,510,014 $6,508,662 $0 $510,014 $4,649,044
50 $1,648,615 $0 $1,267,615 $8,747,157 $0 $267,615 $6,887,525
- -------------------------- ------------------------------------------------ ------------------------------------------------------
<CAPTION>
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
----------------------------------------------
0% 6% 12%
----------------------------------------------
<S> <C> <C> <C>
1 $5,651 $6,021 $6,391
2 $11,223 $12,314 $13,450
3 $16,715 $18,889 $21,244
4 $22,126 $25,760 $29,850
5 $27,457 $32,937 $39,352
6 $32,707 $40,433 $49,843
7 $37,873 $48,259 $61,422
8 $42,955 $56,428 $74,202
9 $47,950 $64,954 $88,307
10 $52,857 $73,848 $103,871
15 $80,590 $129,701 $215,648
----------------------------------------------
</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.
52 Appendix D
<PAGE>
<TABLE>
<S> <C>
TABLE 12
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Ultra Preferred Non-Tobacco $7,500 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 $7,875 $1,007,500 $1,007,500 $1,007,500 $1,751 $2,121 $2,491
2 $16,144 $1,015,000 $1,015,000 $1,015,000 $7,323 $8,414 $9,550
3 $24,826 $1,022,500 $1,022,500 $1,022,500 $12,814 $14,989 $17,344
4 $33,942 $1,030,000 $1,030,000 $1,030,000 $18,226 $21,860 $25,950
5 $43,514 $1,037,500 $1,037,500 $1,037,500 $23,557 $29,036 $35,452
6 $53,565 $1,045,000 $1,045,000 $1,045,000 $29,196 $36,922 $46,333
7 $64,118 $1,052,500 $1,052,500 $1,052,500 $34,751 $45,138 $58,303
8 $75,199 $1,060,000 $1,060,000 $1,060,000 $40,222 $53,697 $71,473
9 $86,834 $1,067,500 $1,067,500 $1,067,500 $45,605 $62,612 $85,970
10 $99,051 $1,075,000 $1,075,000 $1,075,000 $50,900 $71,896 $101,928
15 $169,931 $1,112,500 $1,112,500 $1,112,500 $80,554 $129,707 $215,743
20 $260,394 $1,150,000 $1,150,000 $1,255,848 $104,861 $197,988 $398,682
25 $375,851 $1,187,500 $1,187,500 $1,815,052 $123,780 $279,799 $695,422
30 $523,206 $1,225,000 $1,225,000 $2,562,418 $132,690 $374,612 $1,170,054
35 $711,272 $1,262,500 $1,262,500 $3,536,735 $118,778 $476,307 $1,911,749
40 $951,298 $1,300,000 $1,300,000 $4,827,739 $52,054 $569,365 $3,036,314
45 $1,257,639 $0 $1,337,500 $6,521,903 $0 $608,158 $4,658,502
50 $1,648,615 $0 $1,375,000 $8,764,842 $0 $474,240 $6,901,451
- -------------------------- ------------------------------------------------ ------------------------------------------------------
Account Value Assuming Hypothetical
Gross Annual Investment Return of:
----------------------------------------------
0% 6% 12%
----------------------------------------------
<S> <C> <C> <C>
1 $5,651 $6,021 $6,391
2 $11,223 $12,314 $13,450
3 $16,714 $18,889 $21,244
4 $22,126 $25,760 $29,850
5 $27,457 $32,936 $39,352
6 $32,706 $40,432 $49,843
7 $37,871 $48,258 $61,423
8 $42,952 $56,427 $74,203
9 $47,945 $64,952 $88,310
10 $52,850 $73,846 $103,878
15 $80,554 $129,707 $215,743
----------------------------------------------
</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.
<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)
Isadore Jermyn, Director and Senior C.M. Life
Vice President and Actuary Director (since 1998); Senior Vice President and Actuary
1295 State Street (since 1996)
Springfield, MA 01111 MassMutual
Senior Vice President and Actuary (since 1999 and 1995-1998)
Senior Vice President and Chief Actuary (1998-1999)
Vice President and Actuary (1980-1995)
Efrem Marder, Director C.M. Life
1295 State Street Director (since 1999)
Springfield, MA 01111 MassMutual
Executive Director (1998-present)
Senior Managing Director (1996-1998)
Vice President and Managing Director (1989-1996)
James E. Miller, Director and C.M. Life
Executive Vice President-Life Operations Director (since 1998) and Executive Vice President-Life
140 Garden Street Operations (since 1999)
Hartford, CT 06154 Senior Vice President-Life Operations (1998-1999)
MassMutual
Executive Vice President (since 1997 and 1987-1996)
UniCare Life & Health
Senior Vice President (1996-1997)
John V. Murphy, Director C.M. Life
1295 State Street Director (since 1999)
Springfield, MA 01111 MassMutual
Executive Vice President (since 1997)
David L. Babson & Co., Inc.
Executive Vice President and Chief Operating Officer (1995-
1997)
Concert Capital Management, Inc.
Chief Operating Officer (1993-1995)
</TABLE>
54 Appendix E
<PAGE>
<TABLE>
<S> <C>
Robert J. O'Connell, Director C.M. Life
1295 State Street Director (since 1999)
Springfield, MA 01111 MassMutual
Chairman (since 2000), 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)
PRINCIPAL OFFICERS (other than those who are also Directors):
Stuart H. Reese, Executive Vice C.M. Life
President-Investments Executive Vice President-Investments (since 1999)
1295 State Street Director and Senior Vice President-Investments (1996-
Springfield, MA 01111 1999)
MassMutual
Executive Vice President and Chief Executive Officer (since
1999)
Chief Executive Director-Investment Management (1997-
1999)
Senior Vice President (1993-1997)
Edward M. Kline, Vice President and C.M. Life
Treasurer Vice President (since 1999) and Treasurer (since 1997)
1295 State Street MassMutual
Springfield, MA 01111 Vice President (since 1989) and Treasurer (since 1997)
Ann F. Lomeli, Senior Vice President C.M. Life
and Secretary Senior Vice President (since 1999) and Secretary (since 1988)
1295 State Street MassMutual
Springfield, MA 01111 Senior Vice President, Secretary and Deputy General Counsel
(since 1999)
Vice President, Secretary and Deputy General Counsel (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 E 55
<PAGE>
C.M. LIFE INSURANCE COMPANY
_______
INTERIM FINANCIAL STATEMENTS
for the nine months ended September 30, 1999 and 1998
F-1
<PAGE>
C.M. LIFE INSURANCE COMPANY
STATUTORY STATEMENTS OF FINANCIAL POSITION
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
---- ----
($ In Millions Except for Par Value)
<S> <C> <C>
Assets:
Bonds $ 736.2 $ 683.0
Mortgage loans 216.4 126.3
Other investments 74.3 76.3
Policy loans 139.8 150.4
Cash and short-term investments 64.6 105.7
-------- --------
Total invested assets 1,231.3 1,141.7
Investment and insurance amounts receivable 53.2 36.0
Transfers due from separate accounts 45.1 34.3
-------- --------
1,329.6 1,212.0
Separate account assets 1,385.2 1,318.9
-------- --------
Total assets $2,714.8 $2,530.9
======== ========
Liabilities:
Policyholders' reserves and funds $1,089.1 $ 996.3
Policyholders' claims and other benefits 4.0 3.8
Payable to parent 42.6 28.8
Asset valuation and other investment reserves 27.1 23.9
Other liabilities 41.9 18.2
-------- --------
1,204.7 1,071.0
Separate account liabilities 1,385.2 1,318.9
-------- --------
Total liabilities 2,589.9 2,389.9
-------- --------
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 68.8
Surplus 53.6 69.7
-------- --------
Total shareholder's equity 124.9 141.0
-------- --------
Total liabilities and shareholder's equity $2,714.8 $2,530.9
======== ========
</TABLE>
See condensed notes to statutory financial statements.
F-2
<PAGE>
C.M. LIFE INSURANCE COMPANY
STATUTORY STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1999 1998
---- ----
($ In Millions)
<S> <C> <C>
Revenue:
Premium income $494.6 $289.7
Net investment income 58.0 61.0
Fees and other income 4.6 2.6
------ ------
557.2 353.3
------ ------
Benefits and expenses:
Policyholders' benefits and payments 223.1 104.2
Addition to policyholders' reserves and funds 212.3 139.3
Operating expenses 72.0 46.3
Commissions 50.1 34.4
State taxes, licenses and fees 6.4 5.9
------ ------
563.9 330.1
------ ------
Net gain (loss) from operations before federal income
taxes (6.7) 23.2
Federal income tax expense 2.6 6.8
------ ------
Net gain (loss) from operations (9.3) 16.4
Net realized capital loss (4.2) (1.9)
------ ------
Net income (loss) $(13.5) $ 14.5
====== ======
</TABLE>
See condensed notes to statutory financial statements.
F-3
<PAGE>
C.M. LIFE INSURANCE COMPANY
STATUTORY STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1999 1998
---- ----
($ In Millions)
<S> <C> <C>
Shareholder's equity, beginning of year $141.0 $113.2
Increases (decreases) due to:
Net income (loss) (13.5) 14.5
Change in net unrealized capital gain (loss) 1.2 (8.5)
Change in asset valuation and other investment reserves (3.2) 6.5
Capital contribution - 25.0
Changes in non-admitted assets and other (0.6) 1.4
------ ------
(16.1) 38.9
------ ------
Shareholder's equity, end of period $124.9 $152.1
====== ======
</TABLE>
See condensed notes to statutory financial statements.
F-4
<PAGE>
C.M. LIFE INSURANCE COMPANY
STATUTORY STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1999 1998
---- ----
($ In Millions)
<S> <C> <C>
Operating activities:
Net income (loss) $ (13.5) $ 14.5
Additions to policyholders' reserves and funds
net of transfers to separate accounts 93.0 13.7
Net realized capital loss 4.2 1.9
Other changes 16.2 7.3
-------- --------
Net cash provided by operating activities 99.9 37.4
-------- --------
Investing activities:
Loans and purchases of investments (429.6) (466.1)
Sales and maturities of investments and
receipts from repayments of loans 288.6 465.3
-------- --------
Net cash used in investing activities (141.0) (0.8)
-------- --------
Financing activities:
Capital and surplus contribution - 25.0
-------- --------
Net cash provided by financing activities - 25.0
-------- --------
Increase (decrease) in cash and short-term investments (41.1) 61.6
Cash and short-term investments, beginning of year 105.7 88.4
-------- --------
Cash and short-term investments, end of period $ 64.6 $ 150.0
======== ========
</TABLE>
See condensed notes to statutory financial statements.
F-5
<PAGE>
C.M. Life Insurance Company
Condensed Notes to Statutory Financial Statements
September 30, 1999
(Unaudited)
C.M. Life Insurance Company ("C.M. Life" or "The Company"), is organized as a
stock life insurance company. The Company primarily sells flexible premium
universal life insurance, variable universal life insurance and variable annuity
products, and is licensed in Puerto Rico, the District of Columbia and 49
states, (excluding the State of New York). C.M. Life is a wholly owned stock
life insurance subsidiary of Massachusetts Mutual Life Insurance Company
("MassMutual").
Certain prior period amounts have been restated to conform to current
presentation. These financial statements have been prepared under the
presumption that users of the interim financial information have either read or
have access to C.M. Life's audited statutory financial statements for the year
ended December 31, 1998. Accordingly, footnote disclosures, which would
substantially duplicate the disclosures contained in C.M. Life's December 31,
1998, audited statutory financial statements, have been omitted from these
interim financial statements.
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 State of Connecticut Insurance Department 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,
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, the impact has not been determined at this time.
F-6
<PAGE>
Condensed Notes to Statutory Financial Statements, Continued
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.
In the Company's opinion these financial statements contain all adjustments,
consisting of only normal recurring adjustments, necessary to present fairly its
statutory financial position in accordance with statutory accounting principles,
as of September 30, 1999 and December 31, 1998, the results of its operations
for the three month and nine month periods ended September 30, 1999 and 1998,
changes in shareholder's equity and its cash flows for the nine month periods
ended September 30, 1999 and 1998.
2. Related Party Transactions
- ------------------------------
C.M. Life has an agreement with MassMutual, whereby MassMutual furnishes the
Company operating facilities, human resources, computer software development and
managerial services. Additionally, investment and administrative services are
provided by MassMutual under a management services agreement. Fees incurred
under the terms of these agreements were $37.8 million and $73.9 million for the
three and nine month periods ending September 30, 1999, respectively, and $19.1
million and $47.4 million for the three and nine month periods ended September
30, 1998, respectively.
The Company cedes a portion of its life insurance business to MassMutual and
other insurers in the normal course of business. 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. The
Company retains the assets and related reserves for the payment of future
benefits on ceded policies. In addition to the modified coinsurance agreement,
the Company also has a stop-loss agreement with MassMutual under which the
Company cedes claims that, in aggregate, exceed .22% of the covered volume for
any year, with maximum coverage of $25.0 million above the aggregate limit. The
Company incurred approximately $0.3 million and $0.9 million in premiums under
the agreement for the three and nine month periods ending September 30, 1999,
respectively, and $0.3 million and $0.8 million in premiums for the three and
nine month periods ending September 30, 1998, respectively.
3. Segment Information
- -----------------------
C.M. Life's operations consist of one business segment, which principally sells
universal life insurance, variable life insurance and annuity products. C.M.
Life is not dependent upon any single customer and no single customer accounted
for more than 10% of revenues for the three and nine month periods ended
September 30, 1999 and 1998, respectively.
F-7
<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 78 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 as its independent
accountants;
2. Form of Counsel opining as to the legality of
securities being registered;
3. Form of Opinion and consent of Craig Waddington, FSA,
MAAA, opining as to actuarial matters contained in the
Registration Statement.
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. Resolution of Board of Directors of C.M. Life establishing the
Separate Account: /1/
1.b. Certificate from C.M. Life's Secretary attesting to the establishment
of the SVUL II Segment.
2. Not Applicable.
3.a. Form of Distribution Servicing Agreement between MML Distributors, LLC
and C.M. Life./3/
3.b. Form of Co-Underwriting Agreement between MML Investors Services, Inc.
and C.M. Life./4/
4. Not Applicable.
5. a. Form of Survivorship Flexible Premium Adjustable Variable Life
Policy/14/
b. Form of Survivorship Term Rider/14/
c. Form of Estate Protection Rider/14/
d. Form of Accelerated Benefit Rider/14/
e. Form of Policy Split Option Rider/14/
6a. Certificate of Incorporation of C.M. Life./5/
6b. By-Laws of C.M. Life./5/
<PAGE>
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/
d. American Century Variable Portfolios, Inc./7/
e. Janus Aspen Series/13/
f. BT Insurance Funds/13/
g. Goldman Sachs Variable Insurance Trust/8/
h. Templeton Variable Product Series Fund/13/
9. Not Applicable.
10. Form of Application for a Survivorship Flexible Premium Adjustable
Variable Life insurance policy./15/
11. Form of Memorandum describing C.M. Life's 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 as independent accountants.
99.F. Opinion and consent of Craig Waddington, FSA, MAAA, as to actuarial
matters pertaining to the securities being registered.
99.G. Powers of Attorney/3/
1. Powers of Attorney for John Miller, Jr., and James Miller and Isadore
Jermyn/11/
2. Power of Attorney for Robert J. O'Connell/12/
3. Power of Attorney for John V. Murphy
4. Power of Attorney for Efrem Marder.
27. Not Applicable
- ---------------
/1/ Incorporated by reference to Initial Registration Statement No. 33-49457
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.
<PAGE>
/5/ Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement No. 33-91072 filed with the Commission as an exhibit effective
May 1, 1998.
/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/ Incorporated by reference to Post-Effective Amendment No. 6 to
Registration Statement No. 333-41667 filed with the Commission as an
exhibit on April 27, 1999.
/13/ Incorporated by reference to Pre-Effective
Amendment No. 1 to Registration Statement No. 333-80991 filed with the
Commission on September 20, 1999.
/14/ Incorporated by reference to Initial Registration Statement No 333-88493
filed with the Commission as an exhibit on October 5, 1999.
/15/ Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement No. 333-88503 filed with the Commission on January 20, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
caused this Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, all in the city of Hartford and the state of
Connecticut, on the 20th day of January, 2000.
C.M. LIFE VARIABLE LIFE SEPARATE ACCOUNT I
C.M. LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Lawrence V. Burkett, Jr.*
----------------------------------------------------
Lawrence V. Burkett, Jr.,
President and Chief Executive Officer
C.M. Life Insurance Company
/s/ Richard M. Howe On January 20, 2000 , as Attorney-in-Fact pursuant to
- -------------------- powers of attorney filed herewith.
*Richard M. Howe
As required by the Securities Act of 1933, this Registration Statement 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 January 20, 2000
- ------------------------------- Executive Officer
Lawrence V. Burkett, Jr.
/s/Robert J. O'Connell* Director and Chairman of the January 20, 2000
- ------------------------ Board
Robert J. O'Connell
/s/ John Miller Jr..* Vice President and Comptroller January 20, 2000
- ------------------------ (Principal Accounting Officer)
John Miller Jr.
/s/ James E. Miller* Director January 20, 2000
- ------------------------
James E. Miller
/s/ Isadore Jermyn* Director January 20, 2000
- ------------------------
Isadore Jermyn
/s/ John V. Murphy* Director January 20, 2000
- ------------------------
John V. Murphy
/s/ Efrem Marder* Director January 20, 2000
- ------------------------
Efrem Marder
/s/ Richard M. Howe On January 20, 2000, as Attorney-in-Fact
- ----------------------------- pursuant to powers of attorney filed herewith.
*Richard M. Howe
</TABLE>
<PAGE>
EXHIBIT LIST
99.A.1.b. Certificate of Secretary as to the establishment of the SVUL II
Segment of the Separate Account
99.B. Form of Opinion and Consent of Counsel as to the legality of the
securities being registered.
99.E. Consent of PricewaterhouseCoopers LLP as independent accountants.
99.F Form of Opinion and consent of Craig Waddington, FSA, MAAA, as to
actuarial matters pertaining to the securities being registered.
99.G Powers of Attorney
1. John V. Murphy
2. Efrem Marder
<PAGE>
EXHIBIT 99.A.1.b. - FORM OF CERTIFICATE OF SECRETARY AS TO THE ESTABLISHMENT OF
THE SVUL II SEGMENT OF THE SEPARATE ACCOUNT
CERTIFICATE
-----------
The undersigned hereby certifies that she is the Secretary of C.M. Life
Insurance Company (the "Company"); that on November 24, 1997, the Board of
Directors of the Company voted, by unanimous written consent, that the Chief
Executive Officer or Chief Operating Officer of the Company be authorized to
establish additional segments of C.M. Life Variable Life Separate Account I;
that said vote remains in full force and effect; that the following was adopted
by the President and CEO of the Company in a writing dated November 23, 1999:
That in connection with the development of a new survivorship variable universal
life insurance product (the "SVUL II Policy"), the Company establish a segment
of C.M. Life Variable Life Separate Account I (the "Separate Account") for the
purpose of investing contributions received under a new SVUL II Policy; that the
appropriate officers of the Company be, and each acting singly hereby is,
authorized to execute all documents or take any other action which said officer
deems necessary or advisable in order to permit the sale of the SVUL II Policy,
including the filing of registration statements or amendments thereto with the
United States Securities and Exchange Commission or other appropriate regulatory
authorities.
IN WITNESS WHEREOF, I have hereunto affixed my hand and the seal of the Company
this 23rd day of November, 1999.
/s/ Ann F. Lomeli
-----------------
- -------------------- Ann F. Lomeli
Secretary
<PAGE>
EXHIBIT 99.B: Form of Opinion and Consent of Counsel.
(C.M. LIFE LETTERHEAD)
January 20, 2000
C.M. Life Insurance Company
140 Garden Street
Hartford, CT 06154
RE: Registration Statement No. 333-88493
filed on Form S-6
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of Registration
Statement 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-Law for C.M. Life, 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 - Law
<PAGE>
EXHIBIT 99.E: Consent of PricewaterhouseCoopers LLP as independent accountants.
Consent of Independent Accountants
To the Board of Directors of
C.M. Life Insurance Company
We hereby consent to the use in this Registration Statement of C.M. Life
Variable Life Separate Account on Form S-6 (File No. 333-88493) of our report,
which includes explanatory paragraphs relating to the use of statutory
accounting practices, which differ from generally accepted accounting
principles, dated February 25, 1999 relating to the financial statements of C.M.
Life Insurance Company as of December 31, 1998 and 1997 and for each of the
three years in the period ended December 31, 1998, which appear in such
Registration Statement. We also consent to the references to us under the
caption "Experts" in this Registration Statement.
PricewaterhouseCoopers LLP
Hartford, Connecticut
January 20, 2000
<PAGE>
EXHIBIT 99.F: Form of Actuarial Opinion
(C.M. LIFE LETTERHEAD)
January 7, 2000
C.M. Life Insurance Company
140 Garden Street
Hartford, CT 06154
Ladies and Gentlemen:
This opinion is furnished in connection with Registration Statement 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 Registration
Statement filing 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.G.3. - POWER OF ATTORNEY
POWER OF ATTORNEY: FEDERAL SECURITIES LAWS
------------------------------------------
The Undersigned, John V. Murphy, 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 22nd day of October,
1999.
/s/ John V. Murphy /s/ Joyce Jackson
- -------------------------------- -----------------------
John V. Murphy Witness
Member, Board of Directors
<PAGE>
EXHIBIT 99.G.4. - POWER OF ATTORNEY
POWER OF ATTORNEY: FEDERAL SECURITIES LAWS
------------------------------------------
The Undersigned, Efrem Marder, 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 29th day of October,
1999
/s/ Efrem Marder /s/ Joyce Bosworth
- --------------------------- ----------------------------
Efrem Marder Witness
Member, Board of Directors
