STATEMENT OF ADDITIONAL INFORMATION
INDIVIDUAL AND GROUP FIXED AND VARIABLE DEFERRED
ANNUITY CONTRACTS AND CERTIFICATES
issued by
UNITED COMPANIES SEPARATE ACCOUNT ONE
AND
UNITED COMPANIES LIFE INSURANCE COMPANY
THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS DATED MAY 1, 1996, FOR THE
INDIVIDUAL AND GROUP FIXED AND VARIABLE DEFERRED ANNUITY CONTRACTS AND
CERTIFICATES WHICH ARE REFERRED TO HEREIN.
THE PROSPECTUS CONCISELY SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR
OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS CALL OR WRITE
THE COMPANY AT: UNITED COMPANIES LIFE INSURANCE COMPANY, P.O. BOX 3257, BATON
ROUGE, LA 70821-3257, (800) 825-7568.
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED MAY 1, 1996.
TABLE OF CONTENTS
PAGE
Company........................................................
Experts........................................................
Legal Opinions.................................................
Distributor....................................................
Yield Calculation For Money Market Sub-Account.................
Performance Information........................................
Annuity Provisions.............................................
Financial Statements...........................................
COMPANY
Information regarding United Companies Life Insurance Company (the "Company")
and its ownership is contained in the Prospectus.
EXPERTS
The financial statements included (or incorporated by reference) in the
Prospectus and the related financial statement schedules included elsewhere
in the registration statement have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report appearing herein and
elsewhere in the registration statement, and are so included in reliance upon
the reports of such firm given upon their authority as experts in accounting
and auditing.
LEGAL OPINIONS
Legal matters in connection with the Contracts and Certificates described
herein are being passed upon by the law firm of Blazzard, Grodd & Hasenauer,
P.C., Westport, Connecticut.
DISTRIBUTOR
United Variable Services, Inc., a wholly-owned subsidiary of the Company, acts
as the distributor. The offering is on a continuous basis.
YIELD CALCULATION FOR MONEY MARKET SUB-ACCOUNT
The Money Market Sub-Account of the Separate Account will calculate its
current yield based upon the seven days ended on the date of calculation.
For the seven calendar days ended December 31, 1995, the annualized yield of
the Money Market Sub-Account was 3.55%.
The current yield of the Money Market Sub-Account is computed by determining
the net change (exclusive of capital changes) in the value of a hypothetical
pre-existing Owner or Certificate Holder account having a balance of one
Accumulation Unit of the Sub-Account at the beginning of the period,
subtracting the Mortality and Expense Risk Charge, the Administrative Charge
and the Contract and Certificate Maintenance Charges, dividing the difference
by the value of the account at the beginning of the same period to obtain the
base period return and multiplying the result by (365/7).
The Money Market Sub-Account computes its effective compound yield according
to the method prescribed by the Securities and Exchange Commission. The
effective yield reflects the reinvestment of net income earned daily on Money
Market Sub-Account assets.
Net investment income for yield quotation purposes will not include either
realized capital gains and losses or unrealized appreciation and depreciation,
whether reinvested or not.
The yields quoted should not be considered a representation of the yield of
the Money Market Sub-Account in the future since the yield is not fixed.
Actual yields will depend not only on the type, quality and maturities of the
investments held by the Money Market Sub-Account and changes in the interest
rates on such investments, but also on changes in the Money Market
Sub-Account's expenses during the period.
Yield information may be useful in reviewing the performance of the Money
Market Sub-Account and for providing a basis for comparison with other
investment alternatives. However, the Money Market Sub-Account's yield
fluctuates, unlike bank deposits or other investments which typically pay a
fixed yield for a stated period of time.
PERFORMANCE INFORMATION
From time to time, the Company may advertise performance data as described in
the Prospectus. Any such advertisement will include total return figures for
the time periods indicated in the advertisement. Such total return figures
will reflect the deduction of a 1.52% Mortality and Expense Risk Charge, a
.15% Administrative Charge, the investment advisory fee and expenses for
the underlying Portfolio being advertised and any applicable Contract and
Certificate Maintenance Charge.
The hypothetical value of a Contract or Certificate purchased for the time
periods described in the advertisement will be determined by using the actual
Accumulation Unit values for an initial $1,000 purchase payment, and deducting
any applicable Contract and Certificate Maintenance Charge to arrive at the
ending hypothetical value. The average annual total return is then determined
by computing the fixed interest rate that a $1,000 purchase payment would have
to earn annually, compounded annually, to grow to the hypothetical value at
the end of the time periods described. The formula used in these calculations
is:
n
P (1+T) = ERV
<TABLE>
<CAPTION>
<S> <C> <C>
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the time periods used (or
fractional portion thereof) of a hypothetical $1,000 payment
made at the beginning of the time periods used.
</TABLE>
In addition to total return data, the Company may include yield information in
its advertisements. For each Sub-Account (other than the Money Market
Sub-Account) for which the Company will advertise yield, it will show a yield
quotation based on a 30 day (or one month) period ended on the date of the
most recent balance sheet of the Separate Account included in the registration
statement, computed by dividing the net investment income per Accumulation
Unit earned during the period by the maximum offering price per Unit on the
last day of the period, according to the following formula:
6
[(a-b ) ]
Yield = 2 [(___ + 1) -1 ]
[( cd ) ]
<TABLE>
<CAPTION>
<S> <C> <C>
Where:
a = Net investment income earned during the period by the
Portfolio attributable to shares owned by the Sub-Account.
b = Expenses accrued for the period (net of reimbursements).
c = The average daily number of Accumulation Units outstanding
during the period.
d = The maximum offering price per Accumulation Unit on the
last day of the period.
</TABLE>
The Company may also advertise performance data which will be computed
on a different basis.
HYPOTHETICAL PERFORMANCE INFORMATION
The Sub-Accounts of the Separate Account are relatively new and therefore have
little or no investment performance history. However, the corresponding
Eligible Funds or Portfolios of the Eligible Funds have been in existence for
some time and consequently have investment performance history. In order to
demonstrate how the actual investment experience of the Eligible Funds or the
various Portfolios of the Eligible Funds affects Accumulation Unit values, the
following hypothetical performance information was developed. The information
is based upon the historical experience of the Eligible Fund or Portfolio of
an Eligible Fund and is for the periods shown.
The performance of the various Sub-Accounts will vary and the hypothetical
results shown are not necessarily representative of future results.
Performance for periods ending after those shown may vary substantially from
the examples shown below. Chart 1 shows the performance of the various
Sub-Accounts calculated for a specified period of time assuming an initial
Purchase Payment of $1,000 allocated to each of the Sub-Accounts and a
deduction of all charges and deductions (see "Charges and Deductions" in the
Prospectus for more information). Chart 2 is identical to Chart 1 except
that it does not reflect the deduction of the Contingent Deferred Sales
Charge. The hypothetical performance figures in both charts also reflect
the actual fees and expenses paid by the Eligible Fund or Portfolio of an
Eligible Fund. The percentage increases are determined by subtracting the
initial Purchase Payment from the ending value and dividing the remainder
by the beginning value.
For the Periods Ended 12/31/95:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CHART 1
SUB-ACCOUNT 1 Year 5 Years Since Inception Inception Date
Alger American Growth 23.57% 16.00% 14.71% 1/6/89
Dreyfus Growth and Income 41.51% - 19.34% 5/2/94
Dreyfus Stock Index 20.37% 4.13% 2.41% 10/1/89
Federated High Income Bond Fund II -0.30% - -7.46% 3/1/94
Federated Fund for U.S. Government Securities II -7.42% - -5.03% 3/27/94
Federated Utility Fund II 7.90% - -0.95% 2/10/94
MFS Emerging Growth - - 11.24% 7/24/95
MFS Total Return - - 11.77% 1/3/95
Scudder International -0.10% 5.27% 5.16% 5/1/87
Van Eck Gold & Natural Resources -0.75% 5.94% 3.26% 9/1/89
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CHART 2
SUB-ACCOUNT 1 Year 5 Years Since Inception Inception Date
Alger American Growth 32.07% 16.71% 14.96% 1/6/89
Dreyfus Growth and Income 50.01% - 23.56% 5/2/94
Dreyfus Stock Index 28.87% 5.21% 2.97% 10/1/89
Federated High Income Bond Fund II 8.20% - -2.90% 3/1/94
Federated Fund for U.S. Government Securities II 1.08% - -0.40% 3/27/94
Federated Utility Fund II 16.40% - 3.25% 2/10/94
MFS Emerging Growth - - 32.90% 7/24/95
MFS Total Return - - 20.36% 1/3/95
Scudder International 8.40% 6.31% 5.40% 5/1/87
Van Eck Gold & Natural Resources 7.75% 6.95% 3.92% 9/1/89
</TABLE>
Owners and Certificate Holders should note that the investment results of each
Sub-Account will fluctuate over time, and any presentation of the
Sub-Account's total return or yield for any period should not be considered as
a representation of what an investment may earn or what an Owner's or
Certificate Holder's total return or yield may be in any future period.
ANNUITY PROVISIONS
Currently, the Company makes available payment plans on a fixed basis only.
(See "Annuity Provisions - Annuity Options" in the Prospectus for a
description of the Annuity Options.)
FINANCIAL STATEMENTS
The financial statements of the Company included in the Prospectus should be
considered only as bearing upon the ability of the Company to meet its
obligations under the Contracts and Certificates.
INDEPENDENT AUDITORS' REPORT
____________________________
United Companies Life Insurance Company
United Companies Separate Account One and the
Board of Directors of
United Companies Life Insurance Company
Baton Rouge, Louisiana
We have audited the accompanying statement of assets and liabilities of seven
sub-accounts of United Companies Separate Account One, referred to in Note 1,
as of December 31, 1995, and the related statements of operations and of
changes in net assets for the periods presented. 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. Our
procedures included confirmation of securities owned as of December 31, 1995,
with the managers of the mutual funds. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the seven sub-accounts of United Companies
Separate Account One, referred to in Note 1, as of December 31, 1995, the
results of their operations and the changes in their net assets for the
periods presented in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
February 16, 1996
UNITED COMPANIES
SEPARATE ACCOUNT ONE
Financial Statements
as of December 31, 1995 and
Independent Auditors' Report
UNITED COMPANIES SEPARATE ACCOUNT ONE
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
December 31,
1995
-------------
ASSETS
Investments in mutual funds at market value:
The Alger American Fund (Alger):
Alger American Growth Portfolio - 2,103.830 shares (cost $65,088) $ 65,555
The Dreyfus Variable Investment Fund (Dreyfus):
Stock Index Portfolio - 2,385.910 shares (cost $41,399) 41,038
Federated Investors (Federated):
Corporate Bond Fund - 472.981 shares (cost $4,628) 4,631
MFS Variable Insurance Trust (MFS):
Emerging Growth Series - 89.515 shares (cost $1,029) 1,021
Total Return Series - 1,962.528 shares (cost $24,754) 24,041
Scudder Variable Life Investment Fund (Scudder):
Money Market Portfolio - 74,331.500 shares (cost $74,332) 74,332
International Portfolio - 5.358 shares (cost $63) 63
-------------
Total assets $ 210,681
=============
LIABILITIES $ -
-------------
Unit
NET ASSETS Units Value
----- ------
Contractowner's equity:
Alger - Growth 6,521 $10.05 $ 65,555
Dreyfus - Stock Index 4,041 10.15 41,038
Federated - Corporate Bond 456 10.16 4,631
MFS - Emerging Growth 100 10.19 1,021
MFS - Total Return 2,346 10.25 24,041
Scudder - Money Market 7,407 10.04 74,332
Scudder - International 6 10.11 63
-------------
Total net assets $ 210,681
=============
</TABLE>
See notes to financial statements.
UNITED COMPANIES SEPARATE ACCOUNT ONE
STATEMENT OF OPERATIONS
For the Periods Ended December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
MFS MFS Scudder
Alger Dreyfus Federated Emerging Total Money
Growth Stock Index Corp Bond Growth Return Market
(Dec 15* (Dec 15* (Dec 26* (Dec 18* (Dec 15* (Nov 28*
thru thru thru thru thru thru
Total Dec 31) Dec 31) Dec 31) Dec 31) Dec 31) Dec 31)
------- ---------- ------------- ----------- ---------- ---------- ----------
INVESTMENT INCOME:
Income:
Dividends $1,882 $ - $ 468 $ - $ 29 $ 909 $ 476
Expenses:
Mortality and expense risks charges
and administrative fees 159 8 4 - 29 3 144
------- ---------- ------------- ----------- ---------- ---------- ----------
NET INVESTMENT INCOME 1,723 (8) 464 - 29 906 332
------- ---------- ------------- ----------- ---------- ---------- ----------
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Beginning period - - - - - - -
End of period (612) 467 (361) 3 (8) (713) -
------- ---------- ------------- ----------- ---------- ---------- ----------
NET UNREALIZED GAIN (LOSS) (612) 467 (361) 3 (8) (713) -
------- ---------- ------------- ----------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,111 $ 459 $ 103 $ 3 $ 21 $ 193 $ 332
======= ========== ============= =========== ========== ========== ==========
<S> <C>
Scudder
Internl
(Dec 15*
thru
Dec 31)
----------
INVESTMENT INCOME:
Income:
Dividends $ -
Expenses:
Mortality and expense risks charges
and administrative fees $ -
----------
NET INVESTMENT INCOME -
----------
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Beginning period -
End of period -
----------
NET UNREALIZED GAIN (LOSS) -
----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ -
==========
</TABLE>
See notes to financial statements.
* Date operations commenced.
UNITED COMPANIES SEPARATE ACCOUNT ONE
STATEMENT OF CHANGES IN NET ASSETS
For the Periods Ended December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
MFS MFS Scudder
Alger Dreyfus Federated Emerging Total Money
Growth Stock Index Corp Bond Growth Return Market
(Dec 15* (Dec 15* (Dec 15* (Dec 15* (Dec 15* (Dec 15*
thru thru thru thru thru thru
Total Dec 31) Dec 31) Dec 31) Dec 31) Dec 31) Dec 31)
--------- ---------- ------------- ----------- ---------- ---------- ----------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 1,723 $ (8) $ 464 $ - $ 29 $ 906 $ 332
Net unrealized gain (loss) on investments (612) 467 (361) 3 (8) (713) -
--------- ---------- ------------- ----------- ---------- ---------- ----------
Net increase in net assets
resulting from operations 1,111 459 103 3 21 193 332
--------- ---------- ------------- ----------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Transfers of annuity fund deposits 209,570 65,096 40,935 4,628 1,000 23,848 74,000
--------- ---------- ------------- ----------- ---------- ---------- ----------
Net increase in net assets resulting
from capital share transactions 209,570 65,096 40,935 4,628 1,000 23,848 74,000
--------- ---------- ------------- ----------- ---------- ---------- ----------
TOTAL INCREASE IN NET ASSETS 210,681 65,555 41,038 4,631 1,021 24,041 74,332
NET ASSETS:
Beginning of period - - - - - - -
--------- ---------- ------------- ----------- ---------- ---------- ----------
End of period $210,681 $ 65,555 $ 41,038 $ 4,631 $ 1,021 $ 24,041 $ 74,332
========= ========== ============= =========== ========== ========== ==========
<S> <C>
Scudder
Intern'l
(Dec 15*
thru
Dec 31)
----------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ -
Net unrealized gain (loss) on investments -
----------
Net increase in net assets
resulting from operations -
----------
CAPITAL SHARE TRANSACTIONS:
Transfers of annuity fund deposits 63
----------
Net increase in net assets resulting
from capital share transactions 63
----------
TOTAL INCREASE IN NET ASSETS 63
NET ASSETS:
Beginning of period -
----------
End of period $ 63
==========
</TABLE>
See notes to financial statements.
* Date operations commenced.
UNITED COMPANIES SEPARATE ACCOUNT ONE
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION. United Companies Separate Account One (the "Separate
Account") is a separate investment account of United Companies Life Insurance
Company ("UC Life"). The Separate account is registered with the SEC under
the Investment Company Act of 1940 as a unit investment trust. The Separate
Account commenced operations on November 29, 1995. UC Life is a stock life
insurance company domiciled in Louisiana and organized in 1955. UC Life is
currently authorized to conduct business in 47 states, the District of
Columbia and Puerto Rico. UC Life is a wholly-owned subsidiary of United
Companies Financial Corporation, a public financial services company.
As of December 31, 1995, the Separate Account consisted of eleven
sub-accounts. These financial statements report on the seven sub-accounts
which had activity at December 31, 1995. Each of the eleven sub-accounts
invests only in a single corresponding portfolio of either The Alger American
Fund (Fred Alger Management, Advisor), the Dreyfus Variable Investment Fund
(The Dreyfus Corporation, Advisor), Federated Investor's Insurance Management
Service (Federated Advisors, Advisor), MFS Variable Insurance Trust (MFS,
Advisor), Scudder Variable Life Investment Fund (Scudder, Stevens & Clark,
Inc., Advisor) or the Van Eck Worldwide Insurance Trust (Van Eck Associates
Corporation, Advisor). Each sub-account pays the respective advisor a fee for
services.
2. INVESTMENTS. The market value of the investments in the sub-accounts is
based on the net asset values of shares held at the end of the current period.
Transactions are accounted for on the trade date and dividend income is
recognized on an accrual basis. Realized gains and losses are determined on a
first-in first-out basis. Generally, investment income and realized capital
gains are reinvested.
3. CONTRACT CHARGES. Each valuation period, generally each business day, a
mortality and expense risk charge is deducted from the Separate Account, which
is equal, on an annual basis, to 1.45% of the average daily net asset value of
each sub-account of the Separate Account. This charge compensates UC Life for
assuming the mortality and expense risks under the contracts and certificates.
In addition, an administrative charge is deducted from the Separate Account
which is equal, on an annual basis, to .15% of the average daily net asset
value of each sub-account of the Separate Account. This charge compensates UC
Life for costs associated with the administration of the contracts,
certificates and the Separate Account. Under certain circumstances, a
transfer fee may be assessed when an owner or certificate holder transfers
contract values or certificate holder's account values between sub-accounts or
to or from UC Life's fixed accounts. A contingent deferred sales charge is
assessed against full or partial surrenders in accordance with contract terms.
There is no contingent deferred sales charge if all premiums were received at
least ten years prior to the date of the full or partial surrenders. An
annual contract or certificate maintenance fee of $30 is charged against
certain contracts based upon a minimum contract value. Some states and other
jurisdictions assess premium taxes at the time purchase payments are made;
others assess premium taxes at the time annuity payments begin. Premium taxes
are deducted when they are due.
4. INCOME TAXES. UC Life does not expect to incur any federal income tax
liability on earnings, or realized capital gains attributable to the Separate
Account, therefore, no charges for federal income taxes are currently deducted
from the Separate Account. If UC Life incurs income taxes attributable to the
Separate Account, or determines that such taxes will be incurred, it may make
a charge for such taxes against the Separate Account.
5. CHANGES IN THE UNITS OUTSTANDING.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Dreyfus Federated
Alger Stock Corporate
Growth Index Bond
(Dec 15* (Dec 15* (Dec 26*
thru thru thru
Dec 31) Dec 31) Dec 31)
--------- --------- ----------
Units outstanding beginning of the period - - -
Units transferred between sub-accounts 6,521 4,041 456
--------- --------- ----------
Units outstanding end of the period 6,521 4,041 456
========= ========= ==========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MFS MFS
Emerging Total
Growth Return
(Dec 18* (Dec 15*
thru thru
Dec 31) Dec 31)
--------- ---------
Units outstanding beginning of the period - -
Units transferred between sub-accounts 100 2,346
--------- ---------
Units outstanding end of the period 100 2,346
========= =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Scudder Scudder
Money
Market Internl
(Nov 28* (Dec 15*
thru thru
Dec 31) Dec 31)
--------- ---------
Units outstanding beginning of the period - -
Units purchased 20,925 -
--------- ---------
Units transferred between sub-accounts (13,518) 6
--------- ---------
Units outstanding end of the period 7,407 6
========= =========
</TABLE>
* Date operations commenced
